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Overview of Invoice Settlement

Zuora

Overview of Invoice Settlement

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Invoice Settlement provides you the advanced payment management, credit and debit memos, and item-level transactions.

  • With the Unapplied Payments feature, you can create unapplied payments, apply unapplied payments on invoices and debit memos, unapply applied payments, and transfer payments.
  • With the Credit and Debit Memos feature, you can issue memos to correct invoices and manage the balance due on a particular invoice or account.
  • With the Invoice Item Settlement feature, you can apply payments at the line-item level.

If you are unsure whether Invoice Settlement is enabled for your tenant, you can check it from Zuora UI under the Billing section in the left navigation:

  • If you can see Credit Memos and Debit Memos, Invoice Settlement is enabled. 
  • If you can see Invoice Adjustments and Invoice Item Adjustments, Invoice Settlement is not enabled yet.

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.

Note that if you have enabled Invoice Settlement Harmonization in your tenant, you can see Credit Memos, Debit Memos, and Invoice Item Adjustments.

Key capabilities

The following table lists the key capabilities of the Invoice Settlement feature compared with Invoice Item Adjustment and Credit Balance features.

Without Invoice Settlement With Invoice Settlement

Negative invoices are generated for credit or negative charges.

No negative invoices are generated; credit memos are generated instead.

You can create Invoice Item Adjustment to correct overcharging and undercharging.

You can create standalone credit memos and debit memos from invoices.

You can amend a subscription with a one-time charge for ad hoc credits or charges.

You can create standalone credit memos and debit memos from product rate plan charges.

You can create invoice item adjustments to write off an invoice.

You can directly write off an invoice with high performance. 

No way is available to re-bill to correct a previous invoice mistake.

You can directly reverse an invoice to correct a previous invoice mistake. 

Credit balance from overpayments or negative invoices cannot trace the source of credits.

Credit memos and unapplied payments provide precise traceability to the corresponding product rate plan charges or original payments.

No way is available to record a payment without assigning it to an account or an invoice.

You can create a payment as Unassigned. The payment can be processed, recorded, and accounted for initially. Then, it can be assigned to an account and applied later.

No way is available to settle specific invoice items.

You can apply payments or credit memos to specific invoice items.