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Revenue recognition amount for Credit Memos are not a exact reversal of the invoice.

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Zuora Support

Revenue recognition amount for Credit Memos are not a exact reversal of the invoice.

Issue:

For Credit Memo's when Revenue is Recognized, the amount for each full is not the same as recognized in the corresponding Invoices.

 

Scenario:

  • Subscription started 2020-01-15
  • Invoiced for a Year: 2020-01-15 – 2021-01-14
  • Subscription is canceled in April (2020-04-09) with a cancellation date of 2020-03-05
  • Subscription billed 2020-04-09 and a Credit Memo was generated for the period 2020-03-05 – 2021-01-14

Question: Why is the amount credited in the Credit Memo revenue schedule higher for the period 2020-05 to 2020-10 than the Invoice revenue schedule? This would mean that even though the subscription is canceled we will have net revenue schedule transactions in the General ledger for these periods.

 

Two revenue Schedules created:

On Invoice, INV00026***16.png

 

On Credit Memo, CM000031**, as below:17.png

 

Reason:

The recognition for Credit Memo will be based on the CM value and revenue recognition rules. It does not depend on the invoice revenue distribution.

 

Please do note: There are a few changes in the current design of Revenue Recognition for Credit Memo  and is being handled in FNR-10030. 

I will be updating this post with the changes once it is in place.






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