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Knowledge Center > Billing and Payments > Advanced AR Settlement > Credit and Debit Memos > Management of Credit and Debit Memos > Create Credit Memo or Debit Memo

Create Credit Memo or Debit Memo

The Advanced AR Settlement feature is in Limited Availability. This feature includes Unapplied Payments, Credit and Debit Memo, and Invoice Item Settlement. If you wish to have access to the feature, submit a request at Zuora Global Support

Credit memos and debit memos are used to manage invoices and account balances. You can create credit memos to reduce invoices and account balances, and create debit memos to increase the amount customers owe you.

The credit memos and debit memos can be issued in the following ways:

  • Create a credit or debit memo from an invoice
  • Create a credit or debit memo from charges
  • Generate credit memos by bill run

You can create memos from invoices or charges only if you have the user permission. See Billing Roles for more information.

Create a Credit or Debit Memo from an Invoice

To create a memo from an invoice through the Zuora REST API, see POST Credit Memo from Invoice and POST Debit Memo from Invoice.

To create a memo from an invoice through the Zuora UI:

  1. Navigate to Billing > Credit and Debit Memos in the left-hand navigation section.
  2. On the Credit and Debit Memos page, click create credit/debit memo.
  3. Specify the following information in the Basic Information panel:
    1. In the Memo Type area, click Credit or Debit.
    2. From the Customer Account list, select a customer account.
    3. From the Invoice list, select an invoice you want to adjust. The invoice items of this invoice are displayed under the Basic Information panel.
    4. In the Memo Date field, specify the date when the memo takes effect. The default value is today's date. Note that the memo date must not be earlier than the invoice date or in the closed accounting periods.
    5. From the Reason Code list, select the reason of the memo.
    6. Credit memo only: Specify the following information in the Auto Apply area:
      • Apply to this invoice upon posting: Select this check box to auto-apply the memo to pay the associated invoice after the memo is posted. The associated invoice is the one you selected from the Invoice list.
      • Exclude from auto apply rules: Select this check box to unapply the payment run processing rule to this memo. The payment run processing rule is to auto-apply the unapplied credit memos on invoices and debit memos during the payment runs. For more information, see Creating a Payment Run.
    7. (Optional) In the Comments field, enter the comments for this memo. 
  4. In the invoice item rows you want to credit or debit, specify the following fields: 
    1. In the Invoice Item column, specify the name of the credit item or debit item.
    2. (Optional) In the Comment column, enter comments for the adjustment.
    3. Credit memo only: Specify the amount you want to offset as credit in the Credit Amount column.
      The Available to Credit column displays the amount that is available to credit, including both the charge and tax amount. The value specified in the Credit Amount column cannot be greater than that displayed in the Available to Credit column.
    4. Debit memo only: Specify the amount you want to debit in the Debit Amount column.
    5. If you manually added taxes to the invoice earlier, click the tax amount. Specify the adjusted amount for each tax item in the Credit Amount or Debit Amount column.
    6. (Optional) To disable the text fields in an invoice item row, deselect the check box in this row. By default, all check boxes are selected. Note that you can select and deselect all invoice items by selecting and deselecting the check box next to Invoice Item.
  5. Click save.

The memo is then saved in draft status. 

Create a Credit or Debit Memo from Charges

To create a memo from an invoice through the Zuora REST API, see POST Credit Memo from Charge and POST Debit Memo from Charge.

To create a memo from charges through the Zuora UI:

  1. Navigate to Billing > Credit and Debit Memos in the left-hand navigation section.
  2. On the Credit and Debit Memos page, click create credit/debit memo.
  3. Specify the following information in the Basic Information panel:
    1. In the Memo Type area, click Credit or Debit.
    2. From the Customer Account list, select a customer account.
    3. From the Invoice list, select Standalone
    4. In the Memo Date field, specify the date when the memo takes effect. The default value is today's date. Note that the memo date must not be in the closed accounting periods.
    5. From the Reason Code list, select the reason of the memo.
    6. Credit memo only: Select the Exclude from auto apply rules check box to unapply the payment run processing rule to this memo. The payment run processing rule is to auto-apply the unapplied credit memos on invoices and debit memos during the payment runs. For more information, see Creating a Payment Run.
    7. (Optional) In the Comments field, enter comments related to this adjustment. 
  4. Specify credit or debit charges.
    1. In the Charge Name column, select the charge name from the list.

      Note that Zuora only supports one-time negative charges for credit memos and one-time positive charges for debit memos.

    2. (Optional) In the Comment column, enter comments for the memo.
    3. Credit memo only: Specify the amount you want to offset as credit in Credit Amount column.
    4. Debit memo only: Specify the amount you want to debit in the Debit Amount column.  
  5. If you want to add more charge items for this memo, click additional item.
  6. Click save.

The memo is then saved in draft status.

Generate a Credit Memo by Bill Run

Follow the steps in Creating Bill Runs. Zuora automatically generates credit memos during the bill runs for negative charges based on your invoice and credit memo generation rule. The number of credit memos that are generated during the bill run is displayed on the bill run detail page.

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