Skip to main content

Detach partial early renewed subscriptions and generate credit memos using standard billing process

Zuora

Detach partial early renewed subscriptions and generate credit memos using standard billing process

  1. Last updated
  2. Save as PDF

Detaching subscription rate plan charges from existing invoice schedules allows you to generate credit memos for those charges separately.

You can generate credit memos via the Billing Schedule feature, as described in Detach partial early renewed subscriptions and generate credit memos in a new invoice schedule. Additionally, you can also generate credit memos separately using the standard billing process.

In this use case, two subscriptions with the same term of 12 months are created and a single invoice schedule with two invoice schedule items is created for these subscriptions.

As shown in the following table, three subscriptions are created by creating an order, respectively containing rate plan charges C1 and C2, with a total amount of $24,000.00. For more information, see Create subscriptions.

Subscription number Charge start date Term (Month) Charge number Charge end date Selling price Lit price base Billing period
S1 01-01-2025 12 C1 12-31-2025 $12,000.00 Per Year Annual
S2 01-01-2025 12 C2 12-31-2025 $12,000.00 Per Year Annual

You have created an invoice schedule IS1 to bill S1 and S2. The invoice schedule contains two invoice schedule items. The first item was processed successfully and generated an invoice INV1 for $20,000.00. For more information, see Create invoice schedules.

The following table lists the information on this invoice schedule:

Invoice schedule Invoice schedule item Run date Amount Actual Amount To Bill Billed amount Schedule item status Billing document Service period start date Service period end date
IS1 1 01-10-2025 $20,000.00 $20,000.00 $20,000.00 Processed INV1 01-01-2025 10-31-2025
2 10-05-2025 $4,000.00 $4,000.00 - Pending - - -

Since the two subscriptions have the same term and selling price, they each contribute $10,000.00 to the total $20,000.00 invoiced in INV1 for the service period from 1 January 2025 to 31 October 2025.

invoice_schedule_partial_early_renewal_use_case_2_before_detach.png

Assume your customer wants to renew S2 for another year, from 1 June 2025 to 31 May 2026, while keeping S1 unchanged. You want to generate billing documents for the renewal term using the standard billing process.

First, you must confirm whether the early renewal of S2 will result in a credit. You can do this in one of the following ways:

  • Compare the billed service period with the effective date of early renewal.
  • Use Order Preview to assess the billing outcome.

If the renewal does not generate a credit, you can proceed with the subscription renewal directly. However, if it does, and you want the credit memo to be generated separately from IS1, you must detach C2 from IS1 before running the billing process. If you do not detach C2 from IS1, the credit memo can only be generated when Zuora Scheduler processes the next invoice schedule item in IS1.

In the above example, C2’s billed service period end date (31 October 2025) is later than the renewal effective date (1 June 2025), so a credit will be introduced.

invoice_schedule_partial_early_renewal_use_case_2_after_detach.png

The following is a high-level procedure for detaching C3 from IS1 and generating a credit memo separately:

  1. Create an order to make an early renewal for S2.
  2. Detach C2 from IS1.
  3. Run a standard billing process and generate billing documents for S2.

See the following sections for details on each step.

Step 1 - Create an order for early subscription renewal

Create an order with the following order actions to make an early renewal for S2. For more information about order actions, see Order actions tutorials.

  • Remove Product: Remove the product from which C2 is generated and set the trigger date as 6/1/2025.
  • Terms And Conditions: Update the term start date and trigger date to 6/1/2025.
  • Add Product: Add the same product from which C2 is generated and set the trigger date as 6/1/2025.

When the renewal is done, S2 now contains two subscription rate plan charges:

Subscription number Charge start date Term (Month) Charge number Charge end date Selling price Lit price base Billing period
S2 01-01-2025 5 C2 05-31-2025 $12,000.00 Per Year Annual
06-01-2025 12 C3 06-01-2026 $12,000.00 Per Year Annual

The current billing schedule of IS1 is as follows:

  • Total Amount: $24,000.00
  • Actual Amount: $17,000.00
  • Billed Amount: $20,000.00
  • Unbilled Amount: -$3,000.00
  • Invoice schedule item 1:
    • Amount: $20,000.00
    • Actual Amount To Bill: $20,000.00
    • Billed Amount: $20,000.00
  • Invoice schedule item 2:
    • Amount: $4,000.00
    • Actual Amount To Bill: -$3,000.00
    • Billed Amount: -

The Actual Amount of IS1 is different from the Total Amount because the term of C2 was reduced from 12 months to 5 months.

Actual Amount = $12,000.00+($10,000.00-($12,000.00÷12)×5) = $17,000.00

In the equation above, ($12,000.00÷12)×5 represents the credit for C2’s removed service period from 1 June 2025 to 31 October 2025.

The Unbilled Amount is negative because the credit of C2 is greater than the unbilled amount of C1.

Unbilled Amount = ($12,000.00-$10,000.00)-($12,000.00÷12)×5=-$3,000.00

In the equation above, $12,000.00-$10,000.00 represents the unbilled amount of C1 for the service period from 1 November 2025 to 31 December 2025.

Step 2 - Detach the charge from the invoice schedule

To detach C2 from IS1, perform the following steps:

  1. In the left navigation section, navigate to Customers > Orders.
  2. On the Orders page, click the number of the order associated with IS1.
  3. On the order detail page, click the number of IS1.
  4. On the invoice schedule detail page, click the more options icon icon-more-options-white-background.png in the upper right and then click Detach Charges.
    The Detach Charges dialogue is displayed.
  5. Select only C2 in the subscription rate plan charge list.
  6. Click Detach.

After detaching C2 from IS1, the billing schedule of IS1 is as follows:

  • Total Amount: $24,000.00
  • Actual Amount: $22,000.00
  • Billed Amount: $20,000.00
  • Unbilled Amount: $2,000.00
  • Invoice schedule item 1:
    • Amount: $20,000.00
    • Actual Amount To Bill: $20,000.00
    • Billed Amount: $20,000.00
  • Invoice schedule item 2:
    • Amount: $4,000.00
    • Actual Amount To Bill: $2,000.00
    • Billed Amount: -

The Actual Amount is even greater than the amount before detaching. This is because when charges are detached from their original invoice schedules, amounts that have already been billed are still counted toward the Actual Amount, whereas unissued credit memos and unbilled amounts are not. This behavior allows you to generate credit memos separately.

Actual Amount = $12,000.00+$10,000.00 = $22,000.00

In the equation above, $10,000.00 represents the billed amount for C2 covering the service period from 1 January 2025 to 31 October 2025.

Step 3 - Generate a credit memo using standard billing process 

Since you have detached C2 from IS1, you can now generate invoices for C3 and credit memos for C2 using the standard billing process, such as via bill runs.

For more information about how to bill subscription rate plan charges, see Create bill runs or the Generate billing documents by account ID API operation.