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How do I choose summary level data or line item accounting data


How do I choose summary level data or line item accounting data


Accounting systems were not designed for the subscription economy. Concepts common to subscription businesses (such as negative invoices, credit balances, advanced invoice item adjustment functionality) while supported by Zuora, do not exist in accounting systems which are designed around product-based economies.

The accounting system’s customer account does not have the concept of a subscription, which means orders are treated as disparate events, and RMA (return material authorization) and credit memos are often entered at the account level. The solution below outlines your options for integrating with your accounting system and what considerations you should take into account when making your decision.


Summary Level Accounting Integration (Create Journal Entries)

Summary level accounting integration means extracting from Zuora subscription data (such as invoice amount or refund amount) at the General Ledger (GL) account summary level rather at the transaction (line item) level. A summary level integration unburdens your accounting system as you do not need to map every transaction and the complexity from the subscription economy to an accounting system designed for last century's product economy.

By summarizing Zuora information at the GL Account level using the Zuora AR by Accounting Code report, you can create journal entries in the accounting system and use the GL functionality that accounting systems are very good at managing. If your business is geared up for exponential growth and you do not want to invest in the effort to map and translate all your transactions in Zuora, then a summary level accounting integration is recommended.

Transactional Accounting Integration (Bring Over Line Item Data)

If a transactional integration is considered, you will need to map all Zuora transactions (such as invoices, payments, overpayments, refunds, adjustments) to your accounting system’s transactions and measure that effort (including ongoing enhancements and maintenance) vs. the effort to summarize Zuora transactions and create journal entries. While both Zuora and our integration partners have constructed connectors that automate this integration effort (from Zuora to your accounting system), these products are sold at additional cost.

You will also need to consider how the accounting system can manage an exponential increase in transactions as your business grows in the subscription economy.  In many cases, high volume businesses (such as B2C businesses) are not well supported by accounting systems.