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IIAs made on invoice level not reflected in MRR

On occassion, our Account Executives do not enter a new discount for a customer until several days (or weeks) AFTER the renewal date of the subscription.  When that happens, and the AE needs to apply a new discount to the subscription, our AR team applies an adjustment on the invoice level to reflect the refund for the few days that the subscription retained the previous discount and then enters the new discount into Zuora.  Our Business Analytics/Data Warehouse software pulls revenue information from the MRR field in Zuora, which does NOT seem to reflect the IIA on the invoice...so the data in our warehouse will show the original amount of the subscription for the entire year instead of the cost with the correct discount applied.  In other words:

  • Customer has a subscription with a renewal date of 5/15/17 with a 10% discount 
  • AE is negotiating a new discount with the customer of 15%, but does not apply that discount until AFTER the renewal date - it gets applied on 5/30
  • AR does a refund/adjustment on in the invoice level to reflect the new discount 
  • MRR field does not reflect this adjustment, so it thinks that the 10% discount is applied to the list price which is incorrect
  • Our analytics software pulls from the MRR field for reporting, which has incorrect information
  • Our Data Analytics team has to manually overwrite this field in our reporting each month for the remaining months of the subscription to make it correct

 

Should we be making the adjustment in a different place (instead of on the invoice level) so that it updates the MRR field?  OR, is there a different field our analytics team should pull from that would reflect the updated amount once the adjustment has been made?  

 

I know this was a long and detailed post, thanks for any help you can provide!

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Zuora Staff

Re: IIAs made on invoice level not reflected in MRR

Hello, 

 

Thank you for your post!

Discount charges are not part of the MRR calculation due to the uncertain variables in discounts. For example, you are applying a 100% discount. You set the discount to be applicable for the first three months of a twelve-month term. The calculation cannot set the MRR to 0. It is still the original MRR for the remaining nine months.

Because there are too many variables associated with discount charges, discounts are outside of the booking metrics of MRR and TCV (total contract value).

 

There are a few articles that you can review on MRR and discounts:

https://knowledgecenter.zuora.com/CB_Billing/IC_Invoice_Item_Adjustments/Why_are_some_items_on_an_in...

https://knowledgecenter.zuora.com/CD_Reporting/D_Data_Sources_and_Exports/E_Data_Exports/MRR_(Contra...

 

Please let us know if you need additional information.

 



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Master

Re: IIAs made on invoice level not reflected in MRR

Thank you.

 

So you're saying its not the adjustment or the refund, its actually the DISCOUNT applied that MRR won't pick up?  It does currently pick it up, which is why I'm confused.  Perhaps its how we have set our discounts in the rate plan or something?  I'm confused...its the adjustment to the discount that isn't picked up when its made post-renewal date.  As long as the discount is applied on the renewal date, it works perfectly.

 

Would you be able to help me understand?  Thanks

Scholar

Re: IIAs made on invoice level not reflected in MRR

Have you considered amending the sub? Do a 'Remove Product' then 'Add Product' at the new rate. You can backdate the new product which should generate a proration credit.