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Required configurations and best practices for using Order to Revenue

Zuora

Required configurations and best practices for using Order to Revenue

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We recommend the following required configurations and best practices to achieve proper revenue accounting results in Zuora Revenue.

Required settings

This section describes the required settings for Zuora Billing and Zuora Revenue respectively.

Required Zuora Billing settings

Make sure that you configure the following settings in Zuora Billing as given below.

  • The following table lists the billing rule settings with the required values for the Order to Revenue feature to work: 
Billing rule setting Required value
Bill recurring charges for partial month (with monthly based billing periods)? Yes
Bill recurring charges for partial week (with weekly based billing periods)? Yes
Bill usage charges for partial month (with monthly based billing periods)? Yes
Bill usage charges for partial week (with weekly based billing periods)? Yes
Create credit memos mirroring invoice items? Yes or Yes but do not create for zero balance invoice items
When prorating a month, assume 30 days in a month or use actual days? Use actual number of days
When prorating periods greater than a month, prorate by month first, or by day? Prorate by day
Invoice Past End-of-Term when Auto-Renew is OFF? No
Invoice Past End-of-Term when Auto-Renew is ON? No
Default subscription setting Required value
Allow update Subscription trigger dates No
Update Rate Plan Charge trigger condition No

Required Zuora Revenue settings

Make sure that you configure the following settings in Zuora Revenue as given below.

Setting Setting Type Recommended Value
INVOICE_CONTRACT_RATABLE Profile Yes
ENABLE_CONTRACTUAL_PROSPECTIVE Profile Yes
ALLOW_OVERSTATED_INVOICE Profile Yes
SSP_WITHIN_FV_GRP_BY_COL Profile PRNT_CHRG_NUM : PRNT_CHRG_SEGMENT
CREATE_RORD_CONTRA_ENTRY Profile No
CONSUME_DELETED_TRANSACTION Profile No
REPORTING_CURRENCY Profile Default to USD, but can be changed as per requirements

Best practices

The following billing operations contribute to the reconciling items for financial audits.

Do not add new discount charges to periods that have been billed              

By design, the charge contractual value (CCV) is calculated as the booking value for the full period of a rate plan charge. If a discount charge is applied to a regular charge upon billing, inconsistency between CCV and the invoice amount will occur, causing booking value and billing value mis-alignment. You should not add new discount charges to the periods that have been billed.                

Do not change BCD for customers

When a customer account's Bill Cycle Day (BCD) is changed after a Rate Plan Charge (RPC) is activated, the change is not reflected in booking transactions. However, the actual billing amount is updated accordingly due to proration differences, thus causing a discrepancy between the booking and actual billing values. This discrepancy becomes a reconciling item for audit completeness validation.

Do not change billing rules

After billing documents, such as invoices and credit memos, are generated, do not change the billing rules in Zuora Billing. When the billing rules are changed, the CCV is calculated according to the latest settings. However, the billing documents generated are still based on the previous billing rules, thus causing a discrepancy between the booking and billing values.

Do not remove discount charges after invoicing

If you remove discount charges from a subscription in Zuora Billing on a date within a period that has already been invoiced, booking transactions do not get updated, causing the reconciling items for audit completeness validation.

Do not un-post, cancel, or delete invoices and memos

Once the following transactions are posted, do not perform the un-posting, canceling, or deleting operations in Zuora Billing, as the transactions might have already been accounted for in Zuora Revenue. These operations disturb the accounting generated in Zuora Revenue and cause data inconsistency between Billing and Revenue.

  • Invoice items
  • Credit memos
  • Debit memos
  • Invoice item adjustments

Do not delete amendments or orders

Once an amendment or order is activated, do not delete the amendment or order in Zuora Billing, as the transactions might have already been accounted for in Zuora Revenue. The deletions disturb the accounting generated in Zuora Revenue and cause data inconsistency between Billing and Revenue.