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Future Dated Credit Balance Adjustment

Zuora

Future Dated Credit Balance Adjustment

With the Future Dated Credit Balance Adjustment feature enabled, you can process credit balance adjustment from or to a future dated invoice, including:

  • Transferring credit balance from a future dated negative invoice
  • Applying credit balance to a future dated invoice
  • Refunding credit balance that is transferred from a future dated negative invoice through external refund or electronic refund

Transferring credit balance from a future dated overpayment is not supported.

Enablement

Before you can access to the Future Dated Credit Balance Adjustment feature, complete the following steps:

  1. Enable the Credit Balance feature by submitting a request at Zuora Global Support
  2. Set the payment rule to enable this feature:
    1. Click your username at the upper right and navigate to Payments > Payment Settings > Define Payment Rules.
    2. On the Payment Rules page, select Yes from the Enable future dated credit balance adjustment? list.

Rules for specifying the adjustment date

Without Future Dated Credit Balance Adjustment, the adjustment date of credit balance can only be set to today in the tenant time zone. After Future Dated Credit Balance Adjustment is enabled in your tenant, you can specify a credit balance adjustment date to a future date by following these rules:

Use case Rules for specifying the adjustment date
Transferring credit balance from a future dated negative invoice The adjustment date must be later than or equal to the source invoice date. See Example 1 below.
Applying credit balance to a future dated invoice The adjustment date and amount must match the available amount of credit balance. See Example 1 below.
Refunding credit balance that is transferred from a future dated negative invoice through external refund The refund date and amount must match the available amount of credit balance. See Example 2 below.
Refunding credit balance that is transferred from a future dated negative invoice through electronic refund The refund date can only be set to today or tomorrow, and the refund date and amount must match the available amount of credit balance. See Example 3 below.

You can refer to the examples in the following section to understand the use cases and the rules.

Use case examples

Example 1: Transfer credit balance from a future dated negative invoice and then apply credit balance to a future dated invoice

Context:

Today is 2020-09-01 | INV-001: amount is -$100, invoice date is 2020-09-10 | INV-002: amount is $10, invoice date is 2020-09-05

Operation Successful case Failed case
1. Transfer credit balance from a future dated negative invoice

Create a Credit Balance Adjustment with these parameters:

  • SourceTransactionId: INV-001

  • AdjustmentDate: 2020-09-10

  • Amount: $100

  • Type: Increase

The operation is successful. The credit balance of the billing account increases $100.

Create a Credit Balance Adjustment with these parameters:

  • SourceTransactionId: INV-001

  • AdjustmentDate: 2020-09-01

  • Amount: $100

  • Type: Increase

The operation fails because the adjustment date is earlier than the invoice date.

Rule: For this operation, the adjustment date must be later than or equal to the invoice date.

2. Apply credit balance to a future dated invoice

Create a Credit Balance Adjustment with these parameters:

  • SourceTransactionId: INV-002
  • AdjustmentDate: 2020-09-10
  • Amount: $10
  • Type: Decrease

The operation is successful. The credit balance of the billing account decreases $10.

Create a Credit Balance Adjustment with these parameters:

  • SourceTransactionId: INV-002
  • AdjustmentDate: 2020-09-05
  • Amount: $10
  • Type: Decrease

The operation fails because the available credit balance is $0 as of 2020-09-05. The $100 credit balance comes from the above transfer operation on 2020-09-10, so the available credit balance is $0 before 2020-09-10.

Rule: For this operation, the adjustment date must be set to a date when the amount of credit balance is available.

 

Example 2: Refund credit balance that is transferred from a future dated negative invoice through external refund

Context:

Today is 2020-09-01 | INV-001: amount is -$100, invoice date is 2020-10-01 | INV-001 is transferred to credit balance on 2020-10-01 with amount $100

Successful case Failed case

Create a Refund with these parameters:

  • RefundDate: 2020-10-01

  • Amount: $100

  • Type: External

The operation is successful. The available credit balance is $100 as of 2020-10-01, so the refund date 2020-10-01 is set properly. The credit balance of the billing account decreases $100.

Create a Refund with these parameters:

  • RefundDate: 2020-09-05

  • Amount: $100

  • Type: External

The operation fails because the available credit balance is $0 as of 2020-09-05. The 100$ credit balance comes from the transfer operation on 2020-10-01, so the available credit balance is $0 before 2020-10-01. 

Rule: For this operation, the refund date must be set to a date when the amount of credit balance is available.

 

Example 3: Refund credit balance that is transferred from a future dated negative invoice through electronic refund

Context:

  • Tenant time zone is set to Pacific Standard Time and today is 2020-09-01 in tenant time zone.

  • A customer in Australia (GMT+9) cancels a subscription on 2020-09-02, so a negative invoice is generated on 2020-09-02 local time in Australia (GMT+9): INV-001, amount -$100, invoice date 2020-09-02.

  • INV-001 is transferred to credit balance on 2020-09-02 with amount 100$.

Successful case Failed case

Create a Refund with these parameters:

  • RefundDate: 2020-09-02

  • Amount: $100

  • Type: Electronic

The operation is successful. The available credit balance is $100 as of 2020-09-02, so the refund date is set properly. The credit balance of the billing account decreases $100.

Create a Refund with these parameters:

  • RefundDate: 2020-09-01 (Today in tenant time zone)

  • Amount: $100

  • Type: Electronic

The operation fails because the available credit balance is $0 on 2020-09-01. The $100 credit balance comes from the transfer operation on 2020-09-02, so the available credit balance is $0 before 2020-09-02.

Rule: For this operation, the refund date must be set to either today or tomorrow when the amount of credit balance is available.

Limitation

If credit balance is transferred from or applied to a future dated invoice, in Zuora Finance, the cash data of the accounting period during which the credit balance adjustment happened does not show the actual cash amount. Here is an example.

Assume today is 2020-09-01 and a negative invoice -$100 is generated with the invoice date 2020-09-01. The invoice is transferred to credit balance with the date 2020-09-01. The credit balance on the billing account shows $100.

An invoice with the amount of $40 is generated with the invoice date 2020-10-15. Credit balance is applied to this future dated invoice and the credit balance on the billing account shows $60.

In Zuora Finance, the cash amount of the 2020-09 accounting period shows $100, but the cash amount in fact is $60. $40 cash that has been applied to the future dated invoice does not reflect in the cash amount.