Handling Refund Transactions in NetSuite Connector

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Handling Refund Transactions in NetSuite Connector


Explains what the feature is or what its benefits are to the user or customer.

Payment Operations in Zuora

In Zuora, our payment operations (for example, our accounts receivable process) are different from those of traditional accounting systems.

Zuora uses subsscriptions, which generate a stream of invoices. With typical accounting systems, an invoice is tied to an order (sometimes the system includes simple recurring invoices via a billing schedule).

In Zuora, you can change the order. Changing an order does not exist in the Accounting Schedule, even with a billing schedule. 

The subscription and amendment process in Zuora is a powerful feature, and with that power there are some changes to the way our payment operations works compared to NetSuite.

Example: Removing AR Responsibility for an Invoice

For example, you might want to make sure the subscription metrics are reflected, but you want to remove the AR responsibility for that invoice (for example, void it).

Zuora recommends that you cancel the invoice only if the invoice is incorrect. This is why the transferred to accounting setting is critical. 

Instead, we recommend that you create an amendment that reflects the change that you want to make. The amendment is a great audit trail and allows you to impact the MRR/TCV. For example, you can add a discount. You can then run the billing for this account and generate a negative invoice.

The net of the negative invoice and the original positive invoice will give you the result that you are looking for.

Because Zuora is an open-item invoicing system, you will now want to use an invoice item adjustment to net out the effect of those invoices.

We recommend that you use the invoice item adjustment as the accounting code (for example, general ledger/GL account) and the service period from the invoice item.

In this example, where Invoice 1 is 12,000 and Invoice 2 is (1,200) (a loss of 1,200), you would then perform an invoice item adjustment (credit) to Invoice 1 for (-1,200), and an invoice item adjustment to Invoice 2 for 1,200.

Because Zuora offers flexibility around subscriptions and amendments (for example, change orders), you want to perform two actions:

  1. Manage the subscription
  2. Manage the AR impacts

NetSuite Connector will then sync the negative invoice and both invoice item adjustments.

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