Set Up Accounting Periods

Overview

A key step in configuring Finance is to create accounting periods in Zuora to match your company's financial calendar. This allows Zuora to produce reports and data exports organized by accounting periods, and to perform the work of closing the accounting periods for the revenue sub-ledger.

How are accounting periods used in Zuora?

As you work in Zuora, accounting periods provide the timeframe for most accounting reports. At the end of an accounting period, use Finance to run a trial balance, make any adjustments, and close the accounting period. Once that's done, you can run reports or generate data exports to provide summary or detailed entries for your external accounting system.

The most common accounting periods are monthly accounting periods. However, some companies use quarterly, annual, or a 4/4/5 schedule (4 weeks, 4 weeks, and 5 weeks). In Zuora, we allow you to define any length of accounting period as long as it's at least one day long. But we recommend that you use the same periods that you use in your accounting system.

In traditional accounting systems, you must set up accounting periods far in advance,and if you have a transaction that occurs during an accounting period which has not yet been created, then everything halts and the process fails. To prevent this, Zuora uses the concept of an open-ended accounting period, which we use to capture all transactions that fall in the future outside of any existing accounting period.

Creating your first accounting period

When you create your first accounting period, Zuora checks to be sure that no transactions exist before the start of the accounting period (which you specify in the From field).

This check helps you clean up your data. You might discover that you have subscriptions dated really early on, these might be subscriptions that you created as tests. In that case, you should delete those subscriptions if they are just test data. If there is a legitimate reason why you want to keep those subscriptions, you can always create a first accounting period that happens before that date. Zuora gives you the ability to create arbitrary-sized accounting periods, so you can create a big, two-year accounting period to accommodate those subscriptions and other transactions.

To create an accounting period: 

1. Navigate to Finance > Accounting Periods.
2. In the upper-right corner of the page, click the new accounting period button to start.
3. Enter a Name for the accounting period. Use a meaningful name that allows you to quickly identify the accounting period. 
4. The From date, which is the starting date of the accounting period, is set automatically based on the last day of the previous accounting period. The From date will be the day after the previous accounting period's To date.
5. Select a To date for this accounting period. This is the ending date of the accounting period. 
6. Specify the Fiscal Year. For many companies, the fiscal year is the same as the calendar year. For other companies, they are offset by some amount. For example, if the fiscal year is offset by a month, then February 2019 through January 2020 is fiscal year 2020, and February 2020 through January 2021 is fiscal year 2021.
7. (Optional) Specify the Fiscal Quarter. This field specifies one of the four three-month periods that make up the fiscal year. Supported values are: 1, 2, 3, and 4.
8. (Optional) Specify a note in Notes. The notes are visible only when viewing the detail view of the accounting period.
9. Click create accounting period to create it.

Note: Once you create an accounting period, you can move revenue out of the Open-Ended accounting period into the accounting period you just created. See Distribute Revenue from the Open-Ended Accounting Period into Newly-Created Accounting Periods for more information. 

Enabling Multi-Org

Enabling the Multi-Org feature in your tenant brings the following changes.

• Upon enabling Multi-Org, the system auto-creates accounting periods for each organization (Org).
• The naming convention used for these periods is <unlabelled-ap-name> - <org name>. This helps in distinguishing the periods for each Org.

Sample use case

When you enable Multi-Org,

Consider the following accounting periods:

• Open-ended
• January 2024
• February 2024

Enable Multi-Org in your tenant, and the following Orgs will be created.

• Global
• EU

The following accounting periods are automatically created:

• Open-Ended - Global
• January 2024 - Global
• February 2024 - Global
• Open-Ended - EU
• January 2024 - EU
• February 2024 - EU

For new unlabelled periods,

• After the initial setup, when you create new unlabelled accounting periods, they are not automatically copied to the Orgs.
• You should manually create accounting periods for each of the Orgs and align the Org accounting period with the corresponding unlabelled org (or global org).

Troubleshooting

FAQ