A unique alphanumeric reference given to a specific revenue or customer account to facilitate the reconciliation of transactions across various systems such as subscription management and billing, CRM, and accounting.
A period of time in a business during which financial transactions are collected and evaluated. Revenues and expenses are recognized per accounting period. Some customers use calendar months, some use a rotating cycle of 4-4-5 week periods, and so on.
accounting period lockdown
The time when no one can add or update financial transactions in a particular accounting period. After you close the books or the accounting period, then the accounting period is locked.
A one-time fee for initiation of service.
ACV (annual contract value)
A calculation of the total recurring charges or fees on a subscription.
A change made to a contract or subscription, such as a change in product or edition (e.g. upgrade or downgrade), number of users, payment terms, or a contract renewal.
An application programming interface (API) is a set of routines, data structures, object classes, and protocols provided by libraries and operating system services to support application development.
Authorize.Net , a CyberSource solution, is a payment gateway service provider that allows merchants to accept credit card and electronic checks payments through their websites.
Auto-pay is an option, set in the user account, that gives Zuora permission to automatically charge the user's default payment method every billing cycle without requiring a bill run.
balance sheet account
A summary on a given date of the balances on both sides of the general ledger -- debits and credits.
billing in advance
Charges for services provided at a later date.
billing in arrears
Charges for services delivered in the previous billing period.
Automated means of generating one or more invoices based on a number of billing pre-conditions, such as a specific date range of charges, a subset or entire group of customers, etc.
A booking is an operational metric that tracks the performance of a subscription business. In a subscription or SaaS company, bookings are calculated as the sum or all charges on an order, including recurring charges, one-time fees, and service fees in a given contract period.
While the technology cloud makes it easy to build and launch new services or to build applications in the cloud, the business cloud enables developers to leverage commerce services to monetize these cloud services through subscription or recurring revenue models.
charge revenue summary
A Charge Revenue Summary rolls up all revenue schedules that were created on a specific charge – giving you a single view of how revenue will be recognized for that charge.
chart of accounts
A chart of accounts is the list of accounts, such as Cash and Accounts Receivable, that form the basis of standard accounting practice. In a typical accounting system, journal entries (transaction records) are made in a general ledger (accounting database) to track income, expenses, and any changes to your assets and liability balances. Each journal entry includes an amount of money and two accounts that are affected by the transaction. For instance, when a customer pays an invoice, a journal entry is created to show that a specified dollar amount was moved from Accounts Receivable to Cash. By maintaining a chart of accounts in Zuora, and configuring Zuora to associate the correct accounts with your financial transactions (invoices, payments, credits, and refunds), you can turn your Zuora data into a set of accounting records for your revenue. This can greatly reduce your accounting workload, and at the same time create valuable business intelligence.
A measure of customer attrition, calculated as the number of customers who discontinue service during a specified time period, divided by the total number of customers at the start of that period. Churn is an operational metric that gauges the overall health of a subscription business. Churn is measured in units or dollars.
Sales terminology for the percent of sales prospects that result in actual paying business.
Cloud computing is a style of computing in which dynamically scalable and often virtual resources are provided as a service over the internet. This is in contrast, for instance, to maintaining large computing or data-storage resources at your own site, along with the attendant responsibility for staffing, backups, etc.
contract effective date
The date from which contract terms take effect. This date also can determine when certain charges can be billed to the customer, and often coincides with the start of the subscription term.
The percentage of users whose status changes - e.g., from a website visitor, to a known lead, to a free trial user, and finally to a paid subscriber. Subscription businesses depend upon known conversion rates to monitor the health of the business and to predict future pipeline and revenue.
A code that provides prospects with specialized pricing as an incentive to sign up. Coupon codes can also track the effectiveness of various marketing campaigns.
customer acceptance date
The date from which the customer accepted the delivery of the subscription or associated change order. This date can also determine when certain charges can be billed to the customer.
A graphical representation of key business metrics such as MRR, ACV/TCV, churn, conversion, and close rates. The dashboard provides a snapshot of the health of the subscription business.
A downgrade is a change order or amendment to an existing contract or subscription in which a customer chooses a lower service level. A downgrade can be a less expensive service offering, or a smaller quantity or users or usage levels. Depending on business rules, this change can result in a prorated credit of the original service or a penalty fee associated with the change.
due upon receipt
Payment term in which payment is due immediately upon receipt of the invoice.
A standalone collection of product features. In order to fully monetize a recurring revenue model, many subscription companies use pricing and packaging strategies to reach multiple market segments. Typically the flagship product includes high-value features, whereas lower, entry-level editions offer fewer product features at a lower cost.
Any non-paper based form of payment, such as ACH, wire transfer, credit or debit card, PayPal.
A subscription that remains active until the subscriber cancels.
A home currency refers to the currency used by the tenant for financial reporting. A tenant has only one home currency.
general ledger account
The primary accounting record for a business. This account uses double-entry bookkeeping, which divides the account between debits and credits, and includes other accounts for specific types of transactions.
Tenant-level governors or policies enforce application and system-level thresholds for each tenant. These governors are designed to optimize and scale Zuora platform resources for multi-tenant usage.
A financial statement that a company uses to determine its profits and losses for a given accounting period.
Part of the order-to-cash process that refers to the collection of payments from the customer based on an invoice. The process includes invoice creation, collection management, and dispute management.
A journal entry report provides journal entries in a format that can be imported into your accounting system to update the summary journal entries for current and future accounting periods.
MRR (monthly recurring revenue)
Monthly recurring revenue (MRR) calculates subscription recurring fees normalized to a monthly value.
The process in which a customer places an order, service is provided, an invoice is generated, and payment is collected. Order-to-cash is a recurring, ongoing process in a subscription business.
Usage charges incurred when service levels included in the rate plan are exceeded.
A payment is the money that customers send to pay for invoices related to their subscriptions.
PaaS (platform as a service)
A comprehensive set of services that are delivered over the web including all systems and environments comprising the end-to-end life cycle of developing, testing, deploying, and hosting web applications.
PCI Compliance or PCI DSS (payment card industry data security standard)
The payment card industry data security standard (PCI DSS) is a set of requirements designed to ensure that all companies that process, store, or transmit credit card information maintain a secure environment. Zuora has compliance in accordance with PCI Service Provider Level1 (PCI DSS SP L1) v1.2. Zuora is listed on the VISA website as an approved provider.
The end-to-end business process of creating a quote for a prospect or customer's order management, invoicing, and cash receipt.
A refund returns money to a customer - as opposed to a credit, which creates a customer credit balance that may be applied to reduce the amount owed to you. For instance, refunds are used when a customer cancels service and is no longer your customer. Refunds can also represent processed payments that are reversed, such as a chargeback or a direct debit payment reversal.
The percentage of subscribers scheduled to expire during a particular cycle who renew their subscriptions. Renewal rate is a subscription operational metric that reflects overall customer satisfaction. Can be measured on a unit or dollar value basis.
A Revenue Event represents a change to a revenue schedule, such as creating the initial schedule, canceling an invoice, or recognizing an undistributed amount.
A Revenue Item represents the amount of revenue distributed into an accounting period.
Revenue Recognition determines when revenue can be recognized for a service. Revenue recognition follows the basic principle that revenue can be recognized when a service has been provided and when you are likely to receive payment for that service.
revenue recognition rule
A Revenue Recognition Rule governs the automated creation and change of revenue schedules on a charge.
A Revenue Schedule is a distribution of revenue amounts over a number of accounting periods–representing how revenue should be recognized over time. A revenue schedule is tied to a single charge.
revenue schedule amount
A Revenue Schedule Amount is the sum of all amounts placed into accounting periods – including the “open-ended” accounting period.
SaaS (software as a service)
A software delivery model in which a software firm provides daily technical operation, maintenance, and support for the software provided to clients.
International regulatory standard developed by the American Institute of Certified Public Accountants that requires formal reviews on an organization’s control over information technology and related processes.
A sandbox is a separate technical environment where customers or prospects can test software or services with a subset of data without disruption to their production environments.
Sometimes called activation fees, set-up fees are a one time charge levied to cover costs associated with getting a customer up and running on a service.
A shopping cart is a software application that acts as a virtual container to hold products that your customers search for and order. For many subscription businesses, adding an item to the shopping cart is typically referred to as the “Subscribe Now” or “Order Now” processes where customer profile and payment information is collected to provide the service and start billing.
A Subscription charge represents a contract to provide a service between a business and its customer.
TCV (total contract value)
Total contract value (TCV) calculates the total recurring charges over the lifetime of a subscription. For instance, a three year contract billed annually at $50,000 per year has a total contract value of $150,000, assuming no activation or setup fees.
A common subscription and usage charge model where pricing changes are based on the incremental number of units that are purchased. For example, 1-5 users are charged full price and 5-10 users receive discounted pricing. A customer purchases 7 units. Units 6 and 7 are discounted, and the first 5 units are charged at the full price.
Verifies that all the general ledger accounts balance. All of the debit columns and the credit columns must be equal to ensure accurate reporting and revenue recognition.
Undistributed Revenue occurs when the accounting period in which to recognize revenue cannot be determined. This undistributed amount is held in an open-ended accounting period until it can be distributed.
A change order or amendment to an existing contract subscription in which a customer chooses a higher service level, such as a more expensive service offering, or a larger quantity of users.
Charge associated with actual consumption of a given product or service. This is measured in terms of time on a site, gigabytes of data, number of reports generated, miles driven, or any other unit of measure.
Pricing a service or item based on its consumption or usage rather than a flat rate for a given service or period of time.
A common subscription and usage charge model in which pricing changes based on the total number of units that are purchased. For example, if a customer has 5 or fewer users, then the customer is charged full price. If the customer has 10 or fewer users, then the customer is charged a discounted price. Therefore, if a customer purchases 7 units, then the customer pays the discounted price on all 7 units.
A web store or online store is a website where prospects and customers can browse, select, and purchase products or services.