The Invoice Settlement feature is generally available as of Zuora Billing Release 296 (March 2021). This feature includes Unapplied Payments, Credit and Debit Memos, and Invoice Item Settlement. If you want to have access to the feature, see Invoice Settlement Enablement and Checklist Guide for more information.
After you have posted a credit memo, you can fully or partially apply the credit memo to one or more invoices and debit memos. You can apply credit memos to invoices or debit memos only if you have the user permission. See Billing Roles for more information.
Through the billing settings configuration, you can configure a default application rule to determine how the system allocates credit memos applications to invoices and debit memos. Zuora uses the specified application rule to automatically allocate the credit at the item level if you have not specified item-level application amounts explicitly.
When a credit memo is applied, the total number of invoices and debit memos that the credit memo will apply to must be less than or equal to 1,000.
If the Proration application rule is used, when applying credit memos, each credit memo item will be split into parts and these parts will be applied to the debit memo items in proportion. To prevent reaching the system limit for handling application items, ensure that the following quantity must be less than or equal to 15,000:
(number of invoice items + number of debit memo items) * number of credit memo items
Otherwise, the First In First Out rule will be used instead of the Proration rule.
To apply a credit memo through the Zuora REST API, see PUT Apply Credit Memo.
To apply a credit memo through the Zuora UI, complete the following steps:
- Navigate to Billing > Credit and Debit Memos in the navigation section.
- On the Credit and Debit Memos page, find the target credit memo in the Credit Memo tab, and click apply next to the memo you want to apply.
- In the Effective Date field, specify the date when the application will take effect.
- Select the invoices and debit memos to which you want to apply.
- For each invoice and debit memo, you can apply the credit memo in item level:
- Click next to the document. The items of the invoice or debit memo are displayed.
- Select the items, to which you want to apply the credit memo.
- Specify the amount you want to pay for each item in the Credit Applied column. The Balance column shows the total amount you need to pay for that item.
- Click apply.
A table is then displayed at the bottom of this memo page. This table records the detailed information about the invoices and debit memos that the memo is applied to.