How do I use accounting codes?
Overview
Accounting Codes are commonly referred to as General Ledger Accounts or General Ledger Account Codes. In Zuora, the use of accounting codes are optional but recommended. The solution below describes how accounting codes can be used for aggregation and reporting, and where the accounting codes are derived and defined in Zuora.
Solution
How Accounting Codes Are Used
An accounting code in Zuora allows you to aggregate Zuora transaction data. For example, you can use an accounting code called "Subscription" for all subscription services in your product catalog and use another accounting code called "Professional Services" for all other services. Regardless of the number of products, rate plans, or charges you may have, it is possible to summarize all your invoices by these two accounting codes. There is no limit to the number of accounting codes you can enter in Zuora. Therefore, alternatively, you can use as many different accounting codes as you would like to summarize your transactions.
Using Zuora Reporting, Data Sources, or the Zuora Standard AR Summary Report, you can create reports and data extracts based off of the accounting code for each transaction type. Such reports or data extracts can be used for creating journal entries or for line item integration into your accounting system.
How Accounting Codes Are Derived and Defined in Zuora
Accounting Codes are not mandatory and your company can choose whether you would like to use Accounting Codes to summarize Zuora transactions.
The following chart summarizes where accounting codes are derived and defined in Zuora.
| Transaction | Where the Accounting Code is Derived From | Where to Define the Accounting Code in Zuora |
|---|---|---|
|
Invoice Item |
Rate Plan Charge |
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|
Invoice Payment |
Payment Method |
|
|
Tax Item |
Tax Code |
Finance Settings > Configure Accounting Codes |
|
Credit Balance Payment |
Finance Settings: Configure Accounting Codes |
Finance Settings > Configure Accounting Codes |
|
Payment Refund |
Payment Method |
Finance Settings > Configure Accounting Codes |
|
Credit Balance Refund |
Finance Settings: Configure Accounting Codes |
Finance Settings > Configure Accounting Codes |
|
Credit Balance Adjustment |
Finance Settings: Configure Accounting Codes |
Finance Settings > Configure Accounting Codes |
|
Invoice Adjustment Note: Invoice Adjustment is deprecated on Production. Zuora recommends that you use the Invoice Item Adjustment instead. |
Invoice Adjustment Transaction |
When creating an Invoice Adjustment, go to Additional Fields > Accounting Code |
|
Invoice Item Adjustment |
Invoice Item: Rate Plan Charge |
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The following transaction types are only available if you enable the Invoice Settlement feature. 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 Invoice Settlement is enabled, the Invoice Item Adjustment feature will be deprecated for your tenant. |
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Credit Memo Note: Credit memos can be created due to an invoice/debit memo write-off. If a write-off credit memo impacts revenue, the deferred revenue accounting code used at the time of invoice/DM posting will be used during the write-off CM creation. For non-revenue impacting write offs, such as write offs using bad-debt expense accounts, the accounting code can be selected in Finance settings > Manage accounting codes. |
Finance Settings: Configure Accounting Codes |
Finance Settings > Configure Accounting Codes |
| Debit Memo | Invoice Item: Rate Plan Charge |
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