Debit Memo Transaction Sync (Invoice Settlement Enabled)

Knowledge Center > Integrations > NetSuite Connector > Integration Between Zuora and NetSuite > Debit Memo Transaction Sync (Invoice Settlement Enabled)

Debit Memo Transaction Sync (Invoice Settlement Enabled)

Overview

This integration syncs Zuora debit memos to NetSuite invoices when Invoice Settlement is enabled for your Zuora tenant.

About the Debit Memo Transaction Sync

  • Each debit memo is synced to an individual invoice in NetSuite.

  • Review the Transaction Sync preferences. These preferences are important and control the behavior and data mapping of the sync, including Debit Memo Number.

Transaction Sync Notes

  • Debit Memos will be synced to NetSuite regardless of the balance remaining on the records in Zuora as long as they meet the sync criteria.

  • You can disable the debit memo sync from the NetSuite Connector Advanced Settings. However, you should disable this only under the guidance of Zuora Services.

  • Transferred to Accounting value of Null in the API will appear as No in the Zuora UI. 
  • NetSuite does not have debit memos. Instead, new invoice records will be created in NetSuite upon the successful syncs of debit memos.

Debit Memo Transaction Sync Rules

This integration syncs records according to the following rules:

  1. Zuora debit memo records are synced if they meet the following criteria:

    • The related customer account option Sync To NetSuite is not set or set to Yes.
    • The Status is Posted.
    • The Transferred to Accounting status is NoError, or Processing.
    • The Debit Memo Date is greater than or equal to the Zuora Debit/Credit Memos Cutover Date (if the date is specified in the NetSuite Connector Advanced Settings).

    • The Debit Memo Integration Status is not Sync Complete.

  2. The following validations are performed during the sync to ensure data integrity:

    • The associated Zuora account has been synced (the account has an IntegrationId).

    • The associated Zuora debit memo item's Charge has been synced (the charge has an IntegrationId).

    • The associated Zuora debit memo item's Tax Code has been synced (the tax code has an Accounting Code).

    • If the associated Zuora debit memo item's Charge has a NetSuite Revenue Recognition Template Type of Variable, the associated Zuora subscription's NetSuite Project must be populated.

    • If populated, the associated Zuora account's NetSuite Location matches a valid NetSuite location.

    • If populated, the associated Zuora account's NetSuite Class matches a valid NetSuite class.

    • If populated, the associated Zuora account's NetSuite Department matches a valid NetSuite department.

  3. The Zuora debit memo’s Integration Status is updated to Creating Debit Memo and Transferred to Accounting is updated to Processing to indicate the record is currently being synced and to assist with error recovery.

  4. Upon successful creation of the NetSuite invoice, the new NetSuite internal ID is written to the Zuora debit memo record, the Integration Status is set to Sync Complete, and Transferred to Accounting is set to Yes.

Transaction Sync Notes

  • Once synced successfully, no further changes to the Zuora debit memo will be synced, including cancelation. If you need to re-sync a debit memo, you must delete the corresponding NetSuite invoice and set the Zuora debit memo’s Transferred to Accounting to No.

  • Transferred to Accounting value of Null in the API will appear as No in the Zuora UI.

  • See NetSuite Classifications for more information about how classifications are mapped for NetSuite transaction header and details.

Debit Memo Item Charges

The NetSuite transaction includes a detail line for each charge on the Zuora debit memo. The NetSuite invoice detail will reference an item master that corresponds to a Zuora product rate plan charge that has been synced previously. The NetSuite invoice item will reflect the actual charge amount from the Zuora debit memo.

Project-Based Revenue

The debit memo sync also supports project-based revenue recognition. In this case, debit memo charges are recognized based on a project delivery instead of the time-of-sale or standard subscription schedule. This is common for items such as implementation services.

To set up project-based revenue:

  1. Create a project in NetSuite.

  2. Copy the NetSuite project’s internal ID to the Zuora subscription’s NetSuite Project ID.

  3. On the Zuora product rate plan charge, set the NetSuite Revenue Recognition Template Type to Variable.

  4. When the debit memo is synced, any Variable Template Type charges will be synced with a reference to the project specified on the Zuora subscription. Standard Template Type charges will be synced without the project reference.

  5. Manage the project and track time manually in NetSuite to recognize the revenue.

Delayed Revenue Recognition Logic

This logic applies only if you have revenue recognition enabled in NetSuite and you have set the NetSuite Connector sync option NetSuite Revenue Recognition to Yes.

If a Zuora debit memo syncs to NetSuite before the Revenue Recognition Start Date is set (determined from the subscription), any debit memo charges configured with revenue recognition codes will be flagged as "delayed" revenue in NetSuite (on the corresponding transaction lines, Delay Rev Rec is set to true). Therefore, the charge amounts displayed on these transaction lines will not be recognized from an accounting perspective.

Once the Revenue Recognition Date is set in Zuora, NetSuite Connector will update the appropriate NetSuite transaction lines to recognize the revenue (Delay Rev Rec is set to false) and set the revenue recognition start and end dates accordingly.

Additionally, debit memos that are associated with a NetSuite project have special revenue recognition logic. The revenue distribution is calculated within NetSuite as the completed portion of this project.

Detailed Delayed Revenue Recognition Rules

  • If the NetSuite Connector sync option NetSuite Revenue Recognition is set to No, the Rev Rec Start and Rev Rec End dates will be empty and Delay Rev Rec will be false.

  • If the Debit Memo Charge has a Rev Rec Code but the Charge’s NetSuite Rev Rec Template Type is Variable, the Rev Rec Start and End Dates will be empty and Delay Rev Rec will be false.  The reason is that the revenue will be recognized based upon Project Status entered in NetSuite.

Revenue Recognition Start Date Logic

  • If the debit memo charge does not have a Rev Rec Code, the debit memo item's Service Start Date will be mapped to the Rev Rec Start Date.

  • If the debit memo charge has a Rev Rec Code, the NetSuite Rev Rec Template Type is Standard, and the debit memo item's Trigger Date is populated:

    • The Delay Rev Rec flag will be false.

    • If the NetSuite Rev Rec Start Date Preference is Use NetSuite Rev Rec Template, no Zuora value will be mapped to the Rev Rec Start Date and NetSuite will calculate based upon the configuration of the Rev Rec Template within NetSuite.

    • If the NetSuite Rev Rec Start Date Preference is not Use NetSuite Rev Rec Template:

      • If the Trigger Date is before the Service Start Date:

        • The debit memo item's Service Start Date will be mapped to the Rev Rec Start Date.

      • If the Trigger Date is on or after the Service Start Date:

        • If the debit memo charge's NetSuite Rev Rec Start Date Preference is Charge Period Start, the debit memo item's Service Start Date will be mapped to the Rev Rec Start Date.

        • If the debit memo charge's NetSuite Rev Rec Start Date Preference is Rev Rec Trigger Date, the Trigger Date will be mapped to the Rev Rec Start Date.

  • If the debit memo charge has a Rev Rec Code but the debit memo item's Trigger Date is not populated, the Delay Rev Rec will be set to true and the debit memo item Service Start Date will be mapped to the Rev Rec Start Date temporarily.

Revenue Recognition End Date Logic

  • If the NetSuite Rev Rec Start Date Preference is Use NetSuite Rev Rec Template, no Zuora value will be mapped for the Rev Rec End Date and NetSuite will calculate based upon the configuration of the Rev Rec Template within NetSuite.

  • If the debit memo charge's NetSuite Rev Rec Start Date Preference is Charge Period End, the debit memo item Service End Date will be mapped to the Rev Rec End Date.

  • If the debit memo charge's NetSuite Rev Rec End Date Preference is Subscription End Date, the related Subscription End Date will be mapped to the Rev Rec End Date.

Taxes

Tax Items and Tax Details are also transferred to NetSuite. These Tax Details are treated as invoice line items. A single Charge can contain multiple Tax Lines.

  1. During the NetSuite Connector setup process, you must create a NetSuite item manually for each Zuora Tax Code. You must configure this item to reference a NetSuite income account.

  2. Zuora will sync tax amounts as normal invoice lines in NetSuite. Each line will reference the item created for the given Tax Code. The invoice and the invoice lines will be marked as non-taxable to prevent NetSuite from calculating tax again.

If you want NetSuite to perform the taxation:

  1. Disable Taxation in Zuora.

  2. In the NetSuite Connector Advanced Settings, set Use Standard Invoice Sync to No.

  3. Load the Zuora debit memo into NetSuite. NetSuite will apply taxes based on the taxation rules for the given customer and items.

  4. NetSuite Connector will not sync subsequent Zuora transactions related to the debit memo, such as payments and refunds, because of the difference in balance between the Zuora and NetSuite debit memo records due to taxation.

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