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Create delivery adjustments

Zuora

Create delivery adjustments

This article uses an example to explain the steps required for creating delivery adjustments.

Example

An end customer subscribes to newspapers delivered every Saturday and Sunday and thus is charged at the same frequency as follows:

  • Terms subscription with period type is week and period is 4
  • Delivery pricing charges: Recurring charges of 5 USD every Saturday and Sunday
  • Contract Effective Date: 2023-04-01

For some reason, the end customer received wet newspapers from 2023-04-01 (Saturday) to 2023-04-02 (Sunday) and initiated a refund for the poor deliveries.

You can now create delivery adjustments to refund the end customers.

Prerequisites

Before creating delivery adjustments, ensure the following tasks are completed:

  • The following features must be enabled. For more information, see Enable billing features by yourself.

    • Delivery Pricing: For creating delivery charges. 
    • Billing Adjustment: For accessing the Adjustments API.
    • Invoice Settlement: For credit memos or debit memos auto-generation.
  • An invoice for the current billing period has been created and posted.
  • The Post Credit Memo billing permission has been enabled for the billing role specified in Profiles > Billing Role so as to generate and post credit memos for the refund. For more information, see Billing Role.
  • The option of the Invoice/Credit Memo generation rule in Billing Settings > Define Billing Rules > Billing Document is either of the following to ensure the positive charge amount is still within an invoice.
    • Put all negative charges on a credit memo
    • Put all negative charges and zero credit charges on a credit memo
  • The default credit memo reason codes is created.

You must set the default reason code before creating a delivery adjustment. To create a default reason code for credit memos, perform the following steps:

  1. Click your username at the top right in the Zuora UI and then navigate to Payments Configure Reason Codes
  2. Select the Credit Memo from the drop-down list under Define Reason Codes. 
  3. Click Add New Reason Code, enter your customized reason code, for example, "Delivery Complaint", and click Save.
  4. Navigate to BillingDefault Subscription and Order Settings.
  5. In the Default Subscription Settings section, click Edit.
  6. In the row of the Default Reason Code for Credit Memo created by Delivery Adjustment setting, select your customized reason code from the drop-down list. The default reason code will be used for all credit memos generated through delivery adjustment creation. Once selected, you cannot edit or deactivate the reason code from Payments > Configure Reason Codes.

After completing all prerequisite tasks, you can now create delivery adjustments as follows.

Step 1: Verify eligible and ineligible delivery adjustments

You can verify eligible and ineligible delivery adjustments for the subscription through the Preview an adjustment operation, specifying the start date and end date of the adjustment period as 2023-04-01 and 2023-04-02, respectively, and then decide whether to create new delivery adjustments. If yes, perform the next step.

Step 2: Create delivery adjustments and generate credit memos

You can create delivery adjustments through the Create an adjustment operation to refund the charges, specifying the start date and end date of the adjustment period as 2023-04-01 and 2023-04-02, respectively.

Zuora proceeds with the following steps:

  • Creates two delivery adjustments. Each is a one-day adjustment, and the adjustment amount is 5 USD; A delivery adjustment can be in the Billed or Cancelled status.
  • Creates two credit memos, each for a delivery adjustment, then posts the credit memos.

The result of a delivery adjustment depends on whether the credit memo generation succeeds, as follows:

  • If succeeded, the credit memo status changes to Posted and the delivery adjustment status changes to Billed. The applied amount of the credit memo equals the delivery adjustment amount, and the service period of the credit memo equals the adjustment period

  • If failed, the failure is returned in the response, and no delivery adjustment is created.