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.
Occasionally, a subscription can be incorrectly configured or account information is not up-to-date. When this happens, the resulting invoice may be incorrect, including either over or undercharging, or incorrect bill-to or sold-to contact information. When you discover mistakes on a posted invoice, you can reverse the invoice, correct the mistakes, and then generate a new corrected invoice for the same billing period.
Reverse Invoice is a single atomic operation that does the following:
- A credit memo is automatically generated and applied to the incorrect invoice to reduce the invoice balance to zero.
- The charge through date in the Zuora rating engine is reset back to the start of the billing period.
- The incorrect invoice is flagged as Reversed.
For example, you have an invoice with the amount of $100. After you posted the invoice to your customer, you find that a charge fee is missing in the invoice. You can reverse the invoice, and generate the correct one. A credit memo is auto-generated with the memo amount of $100 and auto-applied to the reversed invoice. You can then amend the subscription to include the missing charge and re-run the bill run for that period to create a new correct invoice.
After reversing invoices, the invoices are still in Posted status. Once you have reversed an invoice, you will no longer be able to cancel or change the reversed invoice and the generated credit memo. In the Zuora UI, the Reversed field in the Basic Information panel of an invoice detail page shows whether this invoice is reversed. Currently, Zuora does not flag whether the invoice is reversed in the SOAP API.
As a tenant administrator, you can configure the Billing user permissions to restrict users from reversing invoices. See Billing Roles for more information.
You can only reverse the most recently generated invoices for each subscription. If a new invoice is generated for a subscription, you cannot reverse the previously generated invoices for this subscription. Besides, you cannot reverse an invoice when both of the following conditions are true:
- The invoice includes more than one subscription
- One of the subscriptions has a newer invoice generated
For example, an invoice is generated (Service period: March 1 - March 31) and posted for Subscription A and Subscription B. Later, you generate a new invoice (Service period: April 1 - April 30) for Subscription B. You are not allowed to reverse the invoice (Service period: March 1 - March 31), because a new invoice is generated for Subscription B.
You can also reverse the invoices that have the total amount of zero, regardless of the amount of each invoice item or invoice taxation item.
- If a zero-amount invoice is composed of all zero-amount invoices items and taxation items, the invoice is reversed but no credit memo is generated.
- If a zero-amount invoice is composed of positive and negative invoices items or taxation items, the invoice is reversed and a credit memo is created with items of the opposite value of the corresponding invoice item or taxation item.
The credit memo items and their taxation items created in the invoice reversal are applied to the corresponding invoice items and invoice taxation items respectively.
After you reverse an invoice, Zuora now sets some taxation item fields of generated credit memo items by copying values from the corresponding invoice taxation items. The values of the following taxation item fields are copied:
You cannot reverse an invoice under any of the following conditions:
- Payments and credit memos are applied to the invoice.
- The invoice is split.
- The invoice is not in Posted status.
- An invoice contains more than 750 items in total, including invoice items, discount items, and taxation items.
If the limit is reached during invoice reversal, unpost the invoice and cancel it. If you do not want to unpost an invoice, create a credit memo or debit memo from the invoice to adjust or correct the amount.