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How do I create summarized GL entries in my accounting system for Zuora transactions?

Overview

Zuora provides a standard Accounts Receivable by Accounting Code report that allows you to quickly and easily create summarized journal entries in order to enter your Zuora activity into your General Ledger (GL) accounting system. This article will focus on creating summarized GL entries. Please note that transferring individual transactions to QuickBooks will not be addressed in this article.

Solution

Zuora activity encompasses a number of transactions that need to be journalized. These activities include:

  • Posted Invoices
  • Payments
  • Refunds
  • Adjustments
  • Credit Balance Transfers

Note: Your business may not include all of these transactions within any given accounting period.

Step 1: Generate an AR by Accounting Code Report for the Appropriate Accounting Period

Go to Z-Billing > Reports > Accounts Receivable, and set the following values for the report Time Frame:

  • The Start Date should be the first day of the reporting period (for example: 3/01/2012).
  • The End Date should be the last day of the reporting period (for example: 3/31/2012).

This report results will provide a summarized view of each Zuora transaction broken down by accounting code and currency.

Step 2: Create Summarized Journal Entries

Each column of the AR by Accounting Code Report corresponds to a specific transaction type as detailed in the following table:
 

Report Column

Transactions

Invoice Posted invoices.
Payment Payments received for outstanding invoices.
Refund All refunds for non-credit balance transactions.
Invoice Adjustment [Credit]

All invoice adjustments and invoice item adjustments that decrease the outstanding balance on an invoice.

Note: The invoice adjustment transaction is deprecated on Production. Zuora recommends that you use the Invoice Item Adjustment transaction instead.

Invoice Adjustment [Charge]

All invoice adjustments and invoice item adjustments that increase the outstanding balance on an invoice.

Note: The invoice adjustment transaction is deprecated on Production. Zuora recommends that you use the Invoice Item Adjustment transaction instead.

Credit Balance Increase [Payment] All payments not applied to an invoice and all overpayments. Also referred to as a Credit Balance payment.
Credit Balance Decrease [Refund] All refunds of overpayments and payments not applied to an invoice.
Also referred to as a Credit Balance Refund and is the reversal of a Credit Balance Payment.
Credit Balance Increase [Invoice] Transfers of negative invoice balances to credit balance.
Also referred to as a Credit Balance Adjustment (Increase) because this operation would increase the credit balance amount on a customer account.
Credit Balance Decrease [Invoice] Credit balance transfers to reduce the outstanding balance on an invoice.
Also referred to as Credit Balance Adjustment (Decrease) because this operation would decrease the credit balance amount on a customer account.

Each row corresponds to a specific accounting code.

Since each column represents a specific transaction, a single journal entry can be used to represent each column.

For example, consider the following table:

Accounting Code Invoice Payment
(blank accounting code) 41,447.61  
Set Up Fees 700,000.00  
Services 1,000,000.00  
Bank-B2C   1,004,804.50
Bank-B2B   500,020.28
Totals 1,741,447.61 1,504,824.78

This can be represented by the following two journal entries:

Debit Account Credit Account   Debit Amount Credit Amount
A/R     1,741,447.61  
  Unclassified Revenue     41,447.61
  Set Up Fees     700,000.00
  Services     1,000,000.00
To record all posted invoices for the period
         
Bank-B2C     1,004,804.50  
Bank-B2B     500,020.28  
  A/R     1,504,824.78
To record all payments made against outstanding invoices

The above journal entries are examples of how to record these transactions. Your own journal entries will vary based on your company's Chart of Accounts and accounting practices. 

For specific instructions regarding creating journal entries in your accounting system, please refer to the documentation provided by your accounting software vendor.

Step 3 (Optional): Generate Supporting Reports

If your company's business practices require that supporting documentation be provided for each entry, see How do I validate that the Zuora standard A/R Report is accurate?

Considerations

There are several circumstances which should be considered when summarizing transactions:

  1. In most cases, the date range of the AR by Accounting Code report should reflect only the current period; previous periods should not be included. Additionally, the Zuora accounting period should be closed prior to or immediately following the generation of the required transactions reports. This is necessary to prevent additional transactions from being created in the summarized date range after the GL entries are created.
  2. Do not cancel invoices that have already been entered into your accounting system. If it is necessary to adjust these invoices, an invoice item adjustment with a date inside an open accounting period should be used.
Last modified
18:44, 5 May 2016

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