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.
You can reverse posted credit memos only if you have the Reverse Credit Memo user permission. See Billing Roles for more information.
Reversing a credit memo is a single atomic operation that completes the following actions:
- A debit memo is generated by mirroring the credit memo, including the credit memo items, discount items, and taxation items.
- The credit memo is applied to the debit memo to change the credit memo balance to zero.
The credit memo items and their taxation items are applied to the correspondingly generated debit memo items and their taxation items respectively. The unapplied amount of all credit memo items gets to zero. The balance of all debit memo items gets to zero.
- The charge through date in the Zuora rating engine is reset back to the start of the billing period.
- If an invoice related to the credit memo exists, the invoice is also reversed during the credit memo reversal.
An invoice and a credit memo are related to each other if they have the same original product rate plan charge and are generated from the same billing operation, for example, from the same bill run, Generate billing documents by account ID operation, or Subscribe call (not recommended).
After a credit memo is reversed, it is flagged as Reversed. In the Zuora UI, the Reversed field in the Basic Information area of a credit memo detail page shows whether this credit memo is reversed.
If a bill run is executed right after the credit memo reversal, a credit memo exactly the same as the reversed one is generated.
If you reverse a credit memo, you are no longer able to cancel or change the reversed credit memo and the generated credit memo.
As a tenant administrator, you can configure the Billing user permissions to restrict users from reversing credit memos. See Billing Roles for more information.
You can only reverse the most recently generated credit memo for each subscription. If a new credit memo is generated for a subscription, you cannot reverse the previously generated credit memos for this account.
If you have enabled the invoice settlement earlier than the credit memo reversal rollout period, and when reversing the credit memo, you may get an error "Unable to get the reason code by name: Credit memo reversal." You must fix this error by manually creating an exact reason code, "Credit memo reversal," in the debit memo reason code list. To add a new reason code, see Creating and Editing Reason Codes.
You can reverse credit memos either through the Zuora UI or REST API. To reverse a credit memo through the Zuora REST API, see PUT Reverse a credit memo.
To reverse a credit memo through the Zuora UI, perform the following steps:
- Navigate to Billing > Credit and Debit Memos in the left-hand navigation section.
- On the Credit and Debit Memos page, click the credit memo that you want to reverse.
- On the credit memo details page, click more > Reverse Credit Memo.
- In the Reverse Credit Memo dialog that is displayed, specify the following basic information:
- In the Memo Date field, specify the date when the debit memo is created.
- In the Apply Effective Date field, specify the date when the credit memo is applied to the debit memo.
- Click save to save the configurations.
Restrictions and limitations
Reversing credit memos has the following restrictions and limitations:
- You cannot reverse the credit memo that is created from an invoice or a product rate plan charge.
- If multiple credit memos are generated for one subscription, you can only reverse the latest one.
- You cannot reverse the credit memo that has been partially applied or refunded. The reversal is allowed after the refund on the credit memo is cancelled or the credit memo is fully unapplied.
- You cannot reverse a credit memo if the corresponding accounting period has been closed or the credit memo has been transferred to accounting.
- You cannot unapply a reversed credit memo.