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Transaction flow during Harmonization

Zuora

Transaction flow during Harmonization

This article contains use cases to understand the transaction flows during harmonization based on the following conditions.

  1. Once an Invoice Settlement Payment/Credit Memo is applied to an invoice, the invoice cannot be adjusted by Invoice Item Adjustment/Invoice Adjustment/Credit Balance.
  2. Once a payment is operated by Invoice Settlement Payment operations like apply/unapply, the same payment cannot be operated by legacy Payment operations from both Legacy Payment UI/SOAP API for (cancel, update). To make adjustments to such payments, you can use the Invoice Settlement Payment UI or REST API.

Operate Credit Memo(CM) and Invoice Item Adjustment(IIA) when Invoice Settlement Harmonization is enabled

You can operate CM and IIA when Invoice Harmonization is enabled based on the following scenarios:

Use case #1

Create IIA and CM apply, that impacts different billing documents belonging to one billing account with the account name being A-1.

Steps Description Specifications
Step 1 Create Invoice INV-1 $100, Invoice Detail INVD-1 $100 and Create Invoice INV-2 $100, Invoice Detail INVD-2 $100
  • INV-1 Balance $100
  • INV-2 Balance $100
  • A-1 Balance $200
  • A-1 Total Unapplied Credit Memo Balance $0
Step 2 Create Invoice Item Adjustment IIA-1 -$10 to adjust INVD-1
  • INV-1 Balance $90
  • INV-2 Balance $100
  • A-1 Balance $190
  • A-1 Total Unapplied Credit Memo Balance $0
Step 3 Create Standalone Credit Memo CM-1 from Invoice INV-2 with $20
  • INV-1 Balance $90
  • INV-2 Balance $100
  • A-1 Balance $170
  • A-1 Total Unapplied Credit Memo Balance $20
  • CM-1 unapplied amount $20
Step 4 Apply the Credit Memo CM-1 to Invoice INV-2 with $20
  • INV-1 Balance $90
  • INV-2 Balance $80
  • A-1 Total Unapplied Credit Memo Balance $0
  • CM-1 unapplied amount $0

Use case #2

Create IIA and CM apply and unapply, that impacts different billing documents belonging to one billing account with the account name being A-1.

Steps Description Specifications
Step 1 Create Invoice INV-1 $100, Invoice Detail INVD-1 $100 and Create Invoice INV-2 $100, Invoice Detail INVD-2 $100
  • INV-1 Balance $100
  • INV-2 Balance $100
  • A-1 Balance $200
  • A-1 Total Unapplied Credit Memo Balance $0
Step 2 Create Invoice Item Adjustment IIA-1 -$10 to adjust INVD-1
  • INV-1 Balance $90
  • INV-2 Balance $100
  • A-1 Balance $190
  • A-1 Total Unapplied Credit Memo Balance $0
Step 3 Create Standalone Credit Memo CM-1 from Invoice INV-2 with $20
  • INV-1 Balance $90
  • INV-2 Balance $100
  • A-1 Balance $170
  • A-1 Total Unapplied Credit Memo Balance $20
  • CM-1 unapplied amount $20
Step 4 Apply the Credit Memo CM-1 to Invoice INV-2 with $20
  • INV-1 Balance $90
  • INV-2 Balance $80
  • A-1 Total Unapplied Credit Memo Balance $0
  • CM-1 unapplied amount $0
Step 5 Unapply the CM from INV-2 with $20
  • INV-1 Balance $90
  • INV-2 Balance $100
  • A-1 Total Unapplied Credit Memo Balance $20
  • CM-1 unapplied amount $20

Use case #3

Create IIA and CM apply and cancel IIA, that impacts different billing documents belonging to one billing account with the account name being A-1.

Steps Description Specifications
Step 1 Create Invoice INV-1 $100, Invoice Detail INVD-1 $100 and Create Invoice INV-2 $100, Invoice Detail INVD-2 $100
  • INV-1 Balance $100
  • INV-2 Balance $100
  • A-1 Balance $200
  • A-1 Total Unapplied Credit Memo Balance $0
Step 2 Create Invoice Item Adjustment IIA-1 -$10 to adjust INVD-1
  • INV-1 Balance $90
  • INV-2 Balance $100
  • A-1 Balance $190
  • A-1 Total Unapplied Credit Memo Balance $0
Step 3 Create Standalone Credit Memo CM-1 from Invoice INV-2 with $20
  • INV-1 Balance $90
  • INV-2 Balance $100
  • A-1 Balance $170
  • A-1 Total Unapplied Credit Memo Balance $20
  • CM-1 unapplied amount $20
Step 4 Apply the Credit Memo CM-1 to Invoice INV-2 with $20
  • INV-1 Balance $90
  • INV-2 Balance $80
  • A-1 Balance $170
  • A-1 Total Unapplied Credit Memo Balance $0
  • CM-1 unapplied amount $0
Step 5 Cancel the IIA from INV-1 with $10
  • INV-1 Balance $100
  • INV-2 Balance $80
  • A-1 Balance $180
  • A-1 Total Unapplied Credit Memo Balance $0
  • CM-1 unapplied amount $0

Use case #4

Create IIA and CM and apply both, that impacts one billing document with the account name being A-1. Create Invoice INV-1 $100, Invoice Detail INVD-1 $100, Invoice Balance $100, Account Balance $100.

Steps Description Specifications
Step 1 Create Invoice Item Adjustment IIA-1 -$10 to adjust INVD-1
  • INV-1 Balance $90
  • A-1 Balance $90
  • A-1 Total Unapplied Credit Memo Balance $0
Step 2 Create Standalone Credit Memo CM-1 from Invoice INV-1 with $20
  • INV-1 Balance $90
  • A-1 Balance $70
  • A-1 Total Unapplied Credit Memo Balance $20
  • CM-1 unapplied amount $20
Step 3 Apply the Credit Memo CM-1 to Invoice INV-1 with $20
  • INV-1 Balance $70
  • A-1 Balance $70
  • A-1 Total Unapplied Credit Memo Balance $0
  • CM-1 unapplied amount $0

Use case #5

Create IIA and CM, and apply and unapply both that impacts one billing document with the account name being A-1. Create Invoice INV-1 $100, Invoice Detail INVD-1 $100, Invoice Balance $100, Account Balance $100.

Steps Description Specifications
Step 1 Create Invoice Item Adjustment IIA-1 -$10 to adjust INVD-1
  • INV-1 Balance $90
  • A-1 Balance $90
  • A-1 Total Unapplied Credit Memo Balance $0
Step 2 Create Standalone Credit Memo CM-1 from Invoice INV-1 with $20
  • INV-1 Balance $90
  • A-1 Balance $70
  • A-1 Total Unapplied Credit Memo Balance $20
  • CM-1 unapplied amount $20
Step 3 Apply the Credit Memo CM-1 to Invoice INV-1 with $20
  • INV-1 Balance $70
  • A-1 Balance $70
  • A-1 Total Unapplied Credit Memo Balance $0
  • CM-1 unapplied amount $0
Step 4 Unapply the Credit Memo CM-1 to Invoice INV-1 with $20
  • INV-1 Balance $90
  • A-1 Balance $70
  • A-1 Total Unapplied Credit Memo Balance $20
  • CM-1 unapplied amount $20

Use case #6

Create IIA and CM apply then cancel IIA both that impacts one billing document with the account name being A-1. Create Invoice INV-1 $100, Invoice Detail INVD-1 $100, Invoice Balance $100, Account Balance $100.

Steps Description Specifications
Step 1 Create Invoice Item Adjustment IIA-1 -$10 to adjust INVD-1
  • INV-1 Balance $90
  • A-1 Balance $90
  • A-1 Total Unapplied Credit Memo Balance $0
Step 2 Create Standalone Credit Memo CM-1 from Invoice INV-1 with $20
  • INV-1 Balance $90
  • A-1 Balance $70
  • A-1 Total Unapplied Credit Memo Balance $20
  • CM-1 unapplied amount $20
Step 3 Apply the Credit Memo CM-1 to Invoice INV-1 with $20
  • INV-1 Balance $70
  • A-1 Balance $70
  • A-1 Total Unapplied Credit Memo Balance $0
  • CM-1 unapplied amount $0
Step 4 Cancel the Invoice Item Adjustment IIA-1
  • INV-1 Balance $80
  • A-1 Balance $80
  • A-1 Total Unapplied Credit Memo Balance $0
  • CM-1 unapplied amount $0

Operate Credit Balance(CB) and Credit Memo(CM) at the same time for one billing account

Sample use case: Create Invoice INV-1 $100, Invoice Detail INVD-1 $100, Invoice Balance $100, Account Balance $100 with the account name being A-1.

Step: Create Negative Invoice INV-2 -$100, Invoice Detail INVD-2 -$100

  • INV-1 Balance $100
  • INV-2 Balance -$100
  • A-1 Balance $0
  • A-1 Total Unapplied Credit Memo Balance $0
  • CM-1 unapplied amount $0

Multi-Currency behavior in Payment Run

With the Invoice Settlement Harmonization enabled, customers could still leverage the feature Multi-Currency in the payment run. This will allow the customer to apply a credit memo or unapplied payment with the same currency to the invoice or debit memo with a currency different from the currency on the billing account.

With the Multi-Currency feature enabled, there would be a behavior change in the payment run that is listed below:

Payment Run without Multi-Currency Payment Run with Multi-Currency
Query invoices which are able to be collected. Query invoices which are able to be collected.
N/A Query debit memos which are able to be collected.
Apply credit balance to the invoice. Apply credit balance to the invoice.
N/A Apply credit memo to the invoice with the same currency.
N/A Apply unapplied payment to the invoice with the same currency.
Create payment to collect the rest of the invoice balance with the Legacy Payment Model.

This payment will be migrated by the real time migration feature.

Create payment to collect the rest of the invoice balance with the Invoice Settlement Payment Model.

Use case #1

Apply credit memo or unapplied payment with the same currency to the invoice with currency that is different from the currency on the billing account.

Steps Description Specifications
Step 1 Create a billing account with currency USD. ACC-01, Currency: USD
Step 2 Create an invoice with 100 JPY. INV-01, Amount: 100, Balance: 100, Currency: JPY
Step 3

Create a credit memo with 10 USD.

Create a credit memo with 1 JPY.

Create an unapplied payment with 20 USD.

Create an unapplied payment with 2 JPY.

CM-01, Amount: 10, Unapplied Amount: 10, Currency: USD

CM-02, Amount: 1, Unapplied Amount: 1, Currency: JPY

PAY-01, Amount: 20, Unapplied Amount: 20, Currency: USD

PAY-02, Amount: 2, Unapplied Amount: 2, Currency: JPY

Step 4 Create a new payment run in order to collect the invoice INV-01. PR-01 will be created.
Step 5 Within the PR-01, the CM-02 and PAY-02 should be applied to the INV-01, the rest of the invoice balance should be collected by the third party gateway with the proper currency.

INV-01, Amount: 100, Balance: 0, Currency: JPY

 

CM-01, Amount: 10, Unapplied Amount: 10, Currency: USD

CM-02, Amount: 1, Unapplied Amount: 0, Currency: JPY

PAY-01, Amount: 20, Unapplied Amount: 20, Currency: USD

PAY-02, Amount: 2, Unapplied Amount: 0, Currency: JPY

 

PAY-03, Amount: 97, Unapplied Amount: 0, Currency: JPY

Use case #2

Apply credit memo or unapplied payment with the same currency to the debit memo with currency that is different from the currency on the billing account.

Steps Description Specifications
Step 1 Create a billing account with currency USD. ACC-01, Currency: USD
Step 2 Create a debit memo with 100 JPY. DM-01, Amount: 100, Balance: 100, Currency: JPY
Step 3

Create a credit memo with 10 USD.

Create a credit memo with 1 JPY.

Create an unapplied payment with 20 USD.

Create an unapplied payment with 2 JPY.

CM-01, Amount: 10, Unapplied Amount: 10, Currency: USD

CM-02, Amount: 1, Unapplied Amount: 1, Currency: JPY

PAY-01, Amount: 20, Unapplied Amount: 20, Currency: USD

PAY-02, Amount: 2, Unapplied Amount: 2, Currency: JPY

Step 4 Create a new payment run in order to collect the debit memo DM-01. PR-01 will be created.
Step 5 Within the PR-01, the CM-02 and PAY-02 should be applied to the DM-01, the rest of the debit memo balance should be collected by the third party gateway with the proper currency.

DM-01, Amount: 100, Balance: 0, Currency: JPY

 

CM-01, Amount: 10, Unapplied Amount: 10, Currency: USD

CM-02, Amount: 1, Unapplied Amount: 0, Currency: JPY

PAY-01, Amount: 20, Unapplied Amount: 20, Currency: USD

PAY-02, Amount: 2, Unapplied Amount: 0, Currency: JPY

 

PAY-03, Amount: 97, Unapplied Amount: 0, Currency: JPY

Prepaid Cash in Payment Run

With the Invoice Settlement Harmonization enabled, customers could still leverage the feature prepaid cash in the payment run. This will allow the customer to apply a credit memo or unapplied payment with the same currency to the invoice or debit memo with a currency different from the currency on the billing account.

With the prepaid cash feature enabled, there would be a behavior change in the payment run that is listed below:

Payment Run without Prepaid Cash Payment Run with Prepaid Cash
Query the invoices that can be collected. Query the invoices that can be collected.
N/A Query the debit memos can be collected.
Apply credit balance to the invoice. Apply a credit balance to the invoice using the same currency as the billing account default currency.
N/A Apply a credit memo to the invoice using the same currency.
N/A Apply unapplied payment to the invoice using the same currency.

Create payment to collect the remaining invoice balance with the IS model.

This payment will be migrated using the real-time migration feature.

Create payment to collect the remaining invoice balance using the IS Model.
Update payment run generates summary incremental. Update payment run statistic metrics.

Use case #1

Apply credit memo or unapplied payment with the same currency to the invoice with currency that is different from the currency on the billing account.

Steps Description Specifications
Step 1 Create a subscription with prepayment enabled for the account ACC-01 ACC-01, Currency: USD
Step 2 Allow the order to generate invoice INV-01 with balance 100 USD. INV-01, Balance: 100, Currency: USD
Step 3 Create a payment P-01 from ACC-01 with Prepayment enabled of 100 USD with API. P-01, Unapplied amount: 100, Currency: USD
Step 4 Create a payment run for ACC-01  PR-01 will be created.
Step 5 Without prepaid cash: New Payment P-02 will be generated to settle the balance on invoice INV-01. ( P-01 unapplied amount: 100 USD, INV-01 balance: 0 USD)

P-01, Unapplied amount: 100, Currency: USD

 P-02, Unapplied amount: 0, Currency: USD

INV-01, Balance: 0, Currency: USD

Step 6 With prepaid cash: Payment run will process INV-01 with open balance and the prepayment P-01 will be used to consume the balance of the INV-01 and there will be no payments generated during the payment run. ( P-01 unapplied amount: 0 USD, INV-01 balance: 0 USD)

P-01, Unapplied amount: 0, Currency: USD

INV-01, Balance: 0, Currency: USD