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Invoice write-off use cases

Zuora

Invoice write-off use cases

This feature is only available if you have the Invoice Settlement feature enabled. The Invoice Settlement feature is in Limited Availability. If you want to have access to the feature, submit a request at Zuora Global Support

Introduces some common invoice write-off use cases.

This article describes some common use cases for the invoice write-off feature. The specific implementation of the use cases mentioned in this article also depends on the option set for the Create credit memos mirroring invoice items billing rule.

Case I: Writing off invoices without discount items or negative items

You want to write off an invoice with two regular invoice items and their taxation items, and the amount of each item is positive.

For example:

Invoice/Item Amount Balance before write-off Balance after write-off
Invoice item 1 $100 $100 $0

Taxation item 1

$20 $20 $0
Invoice item 2 $10 $10 $0

Taxation item 2

$2 $2 $0
Total $132 $132 $0

In this use case, no matter which option you set the Create credit memos mirroring invoice items billing rule to, the credit memo created during invoice write-off is as follows.

Credit memo/Item Amount Balance before write-off Balance after write-off
Credit memo item 1 $100 $100 $0

Credit memo taxation item 1

$20 $20 $0
Credit memo item 2 $10 $10 $0

Credit memo taxation item 2

$2 $2 $0
Total $132 $132 $0

Case II: Writing off invoices with negative items

You want to write off an invoice that contains an invoice item with a positive amount, an invoice item with a negative amount, and their corresponding taxation items. 

For example:

Invoice/Item Amount Balance before write-off Balance after write-off
Invoice item 1 $100 $100 $0

Taxation item 1

$20 $20 $0
Invoice item 2 $-10 $-10 $0

Taxation item 2

$-2 $-2 $0
Total $108 $108 $0

In this use case, no matter which option you set the Create credit memos mirroring invoice items billing rule to, the credit memo created during invoice write-off is as follows.

Credit memo/Item Amount Balance before write-off Balance after write-off
Credit memo item 1 $100 $100 $0

Credit memo taxation item 1

$-10 $-10 $0

Credit memo item 2

$20 $20 $0

Credit memo taxation item 2

$-2 $-2 $0
Total $108 $108 $0

Case III: Writing off invoices with discount items

You want to write off an invoice that contains an invoice item with a positive amount, a discount item, and their corresponding taxation items. The specific implementation might be different according to the option of the Create credit memos mirroring invoice items billing rule.

For example:

Invoice/Item Amount Balance before write-off Balance after write-off
Invoice item 1 $100 $90 $0

Taxation item 1

$20 $20 $0

Discount invoice item 2

$-10 $-0 $0

Taxation item 2

$-2 $-2 $0
Total $108 $108 $0

In this use case, if you set the Create credit memos mirroring invoice items billing rule to Yes or Yes but do not create for zero balance invoice items, the credit memo created during invoice write-off is as follows. The item "Discount credit memo item 2" of the Discount processing type.

Credit memo/Item Amount Balance before write-off Balance after write-off
Credit memo item 1 $100 $90 $0

Credit memo taxation item 1

$20 $20 $0

Discount credit memo item 2

$-10 $-0 $0

Credit memo taxation item 2

$-2 $-2 $0
Total $108 $108 $0

If you set the Create credit memos mirroring invoice items billing rule to No, the credit memo created during invoice write-off is as follows. The item "Credit memo item 2" of the Charge processing type.

Credit memo/Item Amount Balance before write-off Balance after write-off
Credit memo item 1 $90 $90 $0

Credit memo taxation item 1

$20 $20 $0

Credit memo item 2

$-0 $-0 $0

Credit memo taxation item 2

$-2 $-2 $0
Total $108 $108 $0

Case IV: Writing off invoices with zero-amount taxation items

You want to write off an invoice with two regular invoice items and their taxation items, and the amount of each taxation item is zero. The specific implementation might be different according to the option of the Create credit memos mirroring invoice items billing rule.

For example:

Invoice/Item Amount Balance before write-off Balance after write-off
Invoice item 1 $100 $100 $0

Taxation item 1

$0 $0 $0
Invoice item 2 $10 $10 $0

Taxation item 2

$0 $0 $0
Total $110 $110 $0

In this use case, if you set the Create credit memos mirroring invoice items billing rule to Yes, the credit memo created during invoice write-off is as follows.

Credit memo/Item Amount Balance before write-off Balance after write-off
Credit memo item 1 $100 $100 $0

Credit memo taxation item 1

$0 $0 $0

Credit memo item 2

$10 $10 $0

Credit memo taxation item 2

$0 $0 $0
Total $110 $110 $0

If you set the Create credit memos mirroring invoice items billing rule to Yes but do not create for zero balance invoice items or No, the credit memo created during invoice write-off is as follows.

Credit memo/Item Amount Balance before write-off Balance after write-off
Credit memo item 1 $100 $100 $0
- - - -
Credit memo item 2 $10 $10 $0
- - - -
Total $110 $110 $0

Case V: Writing off partially paid invoices

You want to write off an invoice that is partially paid. The specific write-off implementation might be different according to the option of the Create credit memos mirroring invoice items billing rule.

The invoice originally with the total amount of $132 contained two invoice items and their corresponding taxation items, and each item had a positive amount. Later, you applied a payment with the total amount of $12 to invoice item 2 and taxation item 2. 

For example:

Invoice/Item Amount Balance before write-off Balance after write-off
Invoice item 1 $100 $100 $0

Taxation item 1

$20 $20 $0
Invoice item 2 $10 $0 $0

Taxation item 2

$2 $0 $0
Total $132 $120 $0

In this use case, if you set the Create credit memos mirroring invoice items billing rule to Yes, the credit memo created during invoice write-off is as follows.

Credit memo/Item Amount Balance before write-off Balance after write-off
Credit memo item 1 $100 $100 $0

Credit memo taxation item 1

$20 $20 $0

Credit memo item 2

$0 $0 $0

Credit memo taxation item 2

$0 $0 $0
Total $120 $120 $0

If you set the Create credit memos mirroring invoice items billing rule to Yes but do not create for zero balance invoice items or No, the credit memo created during invoice write-off is as follows.

Credit memo/Item Amount Balance before write-off Balance after write-off
Credit memo item 1 $100 $100 $0

Credit memo taxation item 1

$20 $20 $0
Total $120 $120 $0

Case VI: Writing off fully paid invoices with non-zero balance items

You want to write off an invoice that is fully paid but each of its items still has a non-zero balance.

The invoice originally had the total amount of $108, and it contained two invoice items and their corresponding taxation items. Later, you applied a payment with the total amount of $108 to invoice item 1 and taxation item 1. 

For example:

Invoice/Item Amount Balance before write-off Balance after write-off
Invoice item 1 $100 $10 $0

Taxation item 1

$20 $2 $0
Invoice item 2 $-10 $-10 $0

Taxation item 2

$-2 $-2 $0
Total $108 $0 $0

In this use case, no matter which option the Create credit memos mirroring invoice items billing rule is set to, the credit memo created during invoice write-off is as follows.

Credit memo/Item Amount Balance before write-off Balance after write-off
Credit memo item 1 $10 $10 $0

Credit memo taxation item 1

$2 $2 $0

Credit memo item 2

$-10 $-10 $0

Credit memo taxation item 2

$-2 $-2 $0
Total $0 $0 $0