Credit memo transactions

Knowledge Center > Zuora RevPro > Upload transactions or costs > Credit memo transactions

Credit memo transactions

Credit memos can be uploaded to RevPro as transactions (File Upload > Transactions/Cost) for data processing. There are multiple types of credit memos that are supported by RevPro. When you upload credit memo lines to RevPro, use the Line Type field to distinguish different types of credit memos.

Credit memo types

The following types of credit memos are supported.

Line Type

Description

CM

The normal credit that provides a discount to the customer against a sales order or invoice. The transaction price will be adjusted and accounted for allocations for the CM transactions.

Depending on the reference document to which the credit memo is linked, the CM transactions can have the following categories:

  • SO based CM: The discount amount is based on the sales order line but the value remains in deferred status until the invoice is collected.

  • Invoice based CM: The discount amount is based on the billing document.

  • Standalone CM: The credit memo is created without any reference document.

CM-C

The invoice cancelation in case of the rebill scenario. The transaction price will not be adjusted for the CM-C transactions if there is no invoice overage.

CM-R

The return of quantity against a sales order or invoice. The transaction price will be adjusted for the CM-R transactions.

Depending on the reference document to which the credit memo is linked, the CM-R transactions can have the following categories:
  • SO based CM-R: The cancelation is based on the sales order line.

  • Invoice based CM-R: The cancelation is based on the billing document.

Credit rules

When you upload credit memo transactions to RevPro, the Credit Rule (CREDIT_RULE) field specifies how the credit memo amount is to be knocked off from the transaction price. The following credit rules are supported in RevPro:

  • Prorate

  • LIFO (Last In First Out)

  • Fixed duration

Prorate (P)

Set the CREDIT_RULE field to P to apply this credit rule. Based on this rule, RevPro will prorate the credit memo amount equally over the remaining period of the associated invoices or sales orders.

For example, the current open period is Jan-19. An invoice is scheduled for six months.

INV # INV Line # Invoice Amount Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19
100 1 $1200 $200 $200 $200 $200 $200 $200

A credit memo of $150 is input to RevPro to adjust line #1 of the #100 invoice. The amount of $150 is prorated equally during the six months and RevPro will do the following catch-up for this credit memo.

CM # CM Line # Invoice Amount Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19
100 1 $150 ($25) ($25) ($25) ($25) ($25) ($25)

LIFO (L)

Set the CREDIT_RULE field to L to apply this credit rule. Based on this rule, the reversal adjustment starts from the last period backward until the credit memo amount is completely consumed.

For example, the current open period is Jan-19. The following invoice is scheduled for six months.

INV # INV Line # Invoice Amount Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19
100 1 $1200 $200 $200 $200 $200 $200 $200

The following credit memo of $200 is input to RevPro to adjust the invoice based on the LIFO credit rule. This credit memo consumes the value from the last period, Jun-19, and it does not impact any other periods.

CM # CM Line # CM Amount Jun-19
110 1 $200 ($200)

If the credit memo amount is $450, the reversal adjustment is as follows. The amount of $450 can be completely consumed from the Jun-19 period backward until the Apr-19 period.

CM # CM Line # CM Amount Apr-19 May-19 Jun-19
110 1 $450 ($50) ($200) ($200)

Fixed duration (F)

Set the CREDIT_RULE field to F to apply this credit rule. Based on this rule, the credit memo amount is consumed based on the specified start date and end date. If no start and end dates are provided for the credit memo, the credit memo amount is amortized based on the percentage of the billed amount for the period.

For example, the current open period is Jan-19. An invoice is scheduled for six months.

INV # INV Line # Invoice Amount Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19
100 1 $1200 $200 $200 $200 $200 $200 $200

The following credit memo of $200 with start date and end date is input to RevPro. The credit memo amount will be consumed during the specified duration as follows: 

CM # CM Line # CM Amount Start Date End Date May-19 Jun-19
110 1 $200 01-May-2019 30-Jun-2019 ($200) ($200)

Credit memo impact on SO values

The following table explains whether each type of credit memos has an impact on different values of the SO line and whether reallocation occurs. 

CM Type Ext. List Price Ext. Sell Price Allocatable Price Quantity Billed Amount Reallocation
CM (Invoiced based) No No Yes No Yes Yes
CM (SO based) No No Yes No Yes* Yes
CM (Standalone) N/A N/A N/A N/A N/A Yes
CM-C No No No No Yes No
CM-R (Invoiced based) Yes No Yes Yes Yes Yes

CM-R (SO based)

Yes No Yes Yes Yes* Yes
*Note: The SO based credit memos can impact the billed amount only if the invoice has been collected.

Examples are provided below for each type to help you understand the impact of different credit memos.

Invoice based CM

Invoice based CM lines are uploaded to RevPro with the ORIG_INV_LINE_ID field specified. In this example, the following sales order line is input to RevPro.

Type SO # SO Line # Unit List Price Unit Sell Price Ext. List Price Ext. Sell Price Quantity
SO SO-123 1 $70 $50 $1050 $750 15

After this SO is collected, it has been billed by the following invoice line.

Type INV # INV Line # Invoice Amount Quantity
INV INV-123 1 $750 15

RevPro will update the BILLED_DEF_AMT and BILLED_REC_AMT values on the SO line to display how much has been billed and released for this line.

Type SO # SO Line # Ext. List Price Ext. Sell Price Quantity Allocatable Price Billed Amount
SO SO-123 1 $1050 $750 15 $750 $750

Then, the following credit memo is collected with the transaction type being CM and linked to line #1 of the original INV-123 invoice.

Type CM # CM Line # Quantity CM Amount Orig. Invoice Line Id
CM CM-123 1 15 $-200 INV-123.1

In this case, RevPro will reduce the allocatable price and trigger reallocation.

Type SO # SO Line # Ext. List Price Ext. Sell Price Quantity Allocatable Price Billed Amount
SO SO-123 1 $1050 $750 15 $550 $550

SO based CM

SO based CM lines are uploaded to RevPro with the ORIG_SO_LINE_ID field specified. In this example, the following sales order line is input to RevPro.

Type SO # SO Line # Unit List Price Unit Sell Price Ext. List Price Ext. Sell Price Quantity
SO SO-123 1 $70 $50 $1050 $750 15

Then, the following credit memo line is collected with the transaction type being CM and linked to line #1 of the original SO-123 sales order line.

Type CM # CM Line # Quantity CM Amount Orig. SO Line Id
CM CM-123 1 15 $-200 SO-123.1

In this case, RevPro will reduce the allocatable price and triggers reallocation.

Type SO # SO Line # Ext. List Price Ext. Sell Price Quantity Allocatable Price
SO SO-123 1 $1050 $750 15 $550

Standalone CM

The standalone CM line is input to RevPro without the original SO Line Id or Invoice Line Id specified such as the following. The standalone CM will not change anything because it is not linked to any sales order or invoice line.

Type CM # CM Line # Quantity CM Amount Orig. SO Line Id Orig. Invoice Line Id
CM CM-123 1 2 $-200    

CM-C

The CM-C transaction line is used to cancel an invoice. If the cancelation is not on an overage invoice, this type of transaction line is treated as a future rebill and does not impact any allocation. CM-C lines are uploaded to RevPro with the ORIG_INV_LINE_ID field specified.

In this example, the following sales order line is input to RevPro.

Type SO # SO Line # Unit List Price Unit Sell Price Ext. List Price Ext. Sell Price Quantity
SO SO-123 1 $90 $70 $900 $700 10

After the SO line is collected, it has been billed with the following invoice.

Type INV # INV Line # Invoice Amount Quantity
INV INV-123 1 $700 10

RevPro will update the BILLED_DEF_AMT and BILLED_REC_AMT values on the SO line to display how much has been billed and released.

Type SO # SO Line # Ext. List Price Ext. Sell Price Quantity Allocatable Price Billed Amount
SO SO-123 1 $900 $700 10 $700

$700

Then, the following CM-C line is collected to cancel line #1 of the original INV-123 invoice.

Type CM # CM Line # Quantity CMC Amount Orig. Invoice Line Id
CM-C CM-123 1 10 $-700 INV-123.1

In this case, RevPro will not update the Sell Price or the Allocatable Price. Only the billed amount will be updated. No reallocation is triggered because the CM-C transaction is to indicate that the SO line can be re-billed again.

Type SO # SO Line # Ext. List Price Ext. Sell Price Quantity Allocatable Price Billed Amount
SO  SO-123 1 $900 $700 10 $700 $0

Invoiced based CM-R

Invoice based CM-R lines are uploaded to RevPro with the ORIG_INV_LINE_ID field specified. In this example, the following sales order is input to RevPro.

Type SO # SO Line # Unit List Price Unit Sell Price Ext. List Price Ext. Sell Price Quantity
SO SO-123 1 $90 $70 $900 $700 10

This SO line has been billed with the following invoice.

Type INV # INV Line # Invoice Amount Quantity
INV INV-123 1 $700 10

RevPro will update the BILLED_DEF_AMT and BILLED_REC_AMT values for this SO line to display how much has been billed and released.

Type SO # SO Line # Ext. List Price Ext. Sell Price Quantity Allocatable Price Billed Amount
SO SO-123 1 $900 $700 10 $700

$700

Then, the following credit memo is collected for line #1 of the INV-123 invoice as the CM-R transaction type.

Type CM # CM Line # Quantity Ext. List Price CM Ext. Sell Price CM Orig. Invoice Line Id
CM-R CM-123 1 5 $-350 $-350 INV-123.1

RevPro will update the list price, quantity, and the allocatable price at SO level. Reallocation will be triggered.  

Type SO # SO Line # Ext. List Price Ext. Sell Price Quantity Allocatable Price Billed Amount
SO SO-123 1 $550 $700 5 $350 $350

SO based CM-R

SO based CM-R lines are uploaded to RevPro with the ORIG_SO_LINE_ID field specified. In this example, the following sales order is input to RevPro.

Type SO # SO Line # Unit List Price Unit Sell Price Ext. List Price Ext. Sell Price Quantity
SO SO-123 1 $90 $70 $900 $700 10

Then, the following credit memo for this SO line is collected in RevPro.

Type CM # CM Line # Quantity Ext. List Price CM Ext. Sell Price CM Orig. SO Line Id
CM-R CM-123 1 5 $-350 $-350 SO-123.1

RevPro will update the list price, quantity, and the allocatable price at SO level. Reallocation will be triggered.  

Type SO # SO Line # Ext. List Price Ext. Sell Price Quantity Allocatable Price
SO SO-123 1 $550 $700 5 $350
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