The Payment Plans feature is in Limited Availability. If you want to have access to the feature, submit a request at Zuora Global Support.
A payment plan includes the starting date, the frequency of payments, the amount of each payment, and, for tenants that have Invoice Settlement enabled, the amount of a one-time or recurring additional fees. Payments will be processed using the default payment method for the account or via an external payment (cash or check) based on the schedule in the payment plan.
After a payment plan is created, you can view the schedule and status of payments.
How does a payment plan work?
For an account to be eligible in a payment plan, it must have at least one posted invoice with a positive balance. The overall balance of the account does not matter.
You can have multiple payment plans for the same account, but the same invoice or debit memo can be included in only one active payment plan.
When an invoice is included in a payment plan, the Auto-Pay setting of the invoice will be changed to No.
After a payment plan is created against an invoice, the due date of the invoice is not changed. There are no custom fields or objects to identify whether an invoice is included in a payment plan. If your organization has downstream processes to handle invoices that are overdue for a certain time, such as writing off such invoices and canceling the corresponding subscriptions, you must exclude invoices that are already in payment plans from the processes.
Payment processing time and logic
After a payment plan is created, the payment for each installment will be processed right after 0:00 in the configured time zone on the date defined in the plan.
If there are multiple invoices or debit memos included in the payment plan, the amount to be paid for each invoice or debit memo is based on their share in the total amount of all invoices in the payment plan. If there is an overpayment against one of the invoice or debit memo, Payment Plans will still collect the portion for other invoices or debit memos as defined in the plan and not more.
Before each installment is processed, Payment Plans will check if there has been a payment made towards the invoice. If yes, it will compare the last payment amount with the amount in the installment. If the last payment amount is larger than or equal to the amount of the installment, it will skip the installment. If the last payment amount is less than the installment amount, it will modify the payment amount to be the difference between these two numbers.
If you intend to make ad-hoc payments against a payment plan, you must associate the payment with an invoice in the payment plan. Otherwise, Payment Plan will try to collect the full amount of the installment. If you make a one-time payment that pays off all the invoices in the payment plan, the payment plan will be changed to Completed. Payment Plan will not try to collect payments for future installments.
If an installment cannot be collected, the balances of the included invoices will not be changed. The amount of the installment will be added to the next installment.
For example, if the total amount of a plan is $100 and it has four installments, $25 for each installment, if the first installment cannot be collected, the second installment will try to collect $50. If the second installment also fails to be collected, the third installment will try to collect $75.
Payment Plans ensures that the plan balance after each installment is the same as defined in the plan, even if prior installments fail.
If Invoice Settlement is enabled on your tenant, you can add a fee to each installment of the payment plan. Optionally, you can specify a charge id to be associated with the fee. Associating a charge id with the fee is helpful for the recognition of the revenue.
When you create a plan that includes fees, a debit memo in Draft status will be automatically created. Each time an installment is processed, the debit memo will be posted and paid as part of the installment. If you cancel the payment plan, all draft debit memos for future installments will be canceled. If the payment of an installment is not successfully processed, the debit memo will still be posted. You need to collect the fee separately.
If Invoice Settlement is not enabled on your tenant, you cannot add a fee in a payment plan. As a workaround, you can create a workflow to apply a fee to the invoice and then create the payment plan. If you take this approach, you need to identify the fee for revenue recognition purposes.
If a fee is applied but not added to the payment plan, the corresponding revenue may be recognized incorrectly.
Payment plan statuses
- In Progress: There are upcoming installments to be processed. Only payment plans that are In Progress can be edited.
- Completed: All installments have been processed and the plan balance is zero.
- Cancelled: The payment plan has been cancelled.
- Incomplete: All installments in the plan have been processed but the balance of the plan is still positive. For a payment plan that has three installments, if the payment for the first installment is successfully processed, but the payments for the second and third installments fail, this payment plan is Incomplete. In this case, you need to create a new plan to take care of the remaining balance.
- Error: No payments in the payment plan have been successfully processed.
The statuses are refreshed during the scheduler run. A payment that was just completed successfully is in Pending status until the next scheduler run.
- Cancelled: The payment was canceled due to a canceled plan.
- Processing: The payment is being processed.
- Pending: The payment is to be processed in the future.
- Processed: The payment was successfully processed.
- Error: The payment was not processed successfully.
Create a payment plan
Before creating a payment plan, ensure you have configured the time zone. For details, see Set up the Payment Plans feature.
- Start Payment Plans.
By default, all in-progress payment plans are displayed. You can use the Status drop-down menu to show payment plans in a particular status.
- In the Accounts tab, find the account that you want to create a payment plan for, and click Create Plan. The Create Plan is available for any account that has at least one posted invoice with a positive balance. The balance of the account does not matter.
You can use the three options in the Account Filters menu to filter the accounts to be displayed on the page.
- Positive Account Balance: Only accounts with balances > 0 will be shown.
- Accounts with Status Active: Only active accounts will be shown.
- Accounts with Active Plans: Only accounts that have active payment plans will be shown.
After you click Create Plan on an account, the page for creating payment plans displays. Settings related to fees are only available if Invoice Settlement is enabled on your Zuora tenant.
- In the Payment Plan Document Setup section, select invoices or debit memos that you want to add to the payment plan. When you select an invoice or debit memo, its balance is added to the number shown in the Total Planned Amount field.
- After you complete adding invoices or debit memos to the payment plan, configure the details of the payment plan.
- Select a future date as the start date of the payment plan. The start date is the day when the first payment will be processed.
- Select the frequency of the payments. Weekly, biweekly and monthly are the options that you can select.
- Enter the installment amount. The installment amount is the amount of each payment. You can modify the amount of each installment later.
- If the payments will be processed via an external source (such as cash or check), select the External Method of Payment option. Payment Plans will check the account for the payment on each installment date and update the payment status accordingly.
If this option is not selected, the default payment method will be used.
- If Invoice Settlement is enabled on your Zuora tenant, you can select Enabled Fees and configure the options for fees.
- Select the fee type.
- Flat: a fixed amount of fee will be applied to each installment of the payment plan.
- Percentage: The fee will be calculated based on the total planned amount and applied to each installment in the payment plan.
- Enter the amount or percentage of the fee.
- Optionally, select the charge ID that is associated with the fee for tracking and revenue recognition purposes. When you click the FEE CHARGE ID field, all charge IDs on your Zuora tenant will be loaded and available for selection.
- Select the fee type.
- Click Generate Payment Schedule.
A payment schedule will display at the bottom of the page. The schedule is calculated based on the information that you provide.
- If necessary, adjust the dates and amounts in the schedule. You can remove a payment by clickingat the far end on right.
If the balance for the final payment is not 0, you can click above the table to add a new scheduled payment to the schedule.
- Click Create to create the payment plan.
After you confirm the action, the payment plan is created. The initial status of a payment plan is In Progress. After a payment plan is created, you can view its details or cancel it. Only in-progress payment plans can be edited.
The invoice-level Auto-Pay for all invoices in the payment plan will be changed to No.
View and edit a payment plan
After a payment plan is created, you can view its details, edit it (if it is in progress), or cancel it.
You can find all payment plans in the Payment Plans tab. Click a payment plan number to view its details.
The payment plan details page opens.
To cancel the current plan, click Cancel Plan. When you cancel a payment plan, payments or debit memos that have not been processed will be canceled.
To edit payments in an in-progress plan, click Edit Payments in the Payment Schedule section.
When you click Edit Payments, the Scheduled Payments section will be displayed below the Payment Schedule section. Revise the dates and/or amounts as necessary. You can also remove a payment or add a new scheduled payment.
Click Submit to save the changes that you have made.
Use Payment Plans APIs
You can use Payment Plans APIs to perform most of the tasks that you can perform in the UI.
Payment Plans APIs use basic authentication. The user name is the email address that you use for logging in Zuora. The password is the API token that is shown in the settings of Payment Plans.
Supported API operations include:
- Get active payment plans
- Create a payment plan
- Get a payment plan by ID
- Update or cancels a payment plan
- Get all scheduled payments
- Get a scheduled payment
For details about the operations including parameters, requests, and responses, refer to the Payment Plan section in the Collect API Reference.