Understanding payments

Payments represent the cash inflows received from your customers — through ACH, wire, lockbox, or other bank channels. These payments are automatically imported from your bank statements or uploaded manually in supported formats (BAI2, BAI3, CSV, etc.).

Each payment record in Zuora contains:

1. Received Amount: The net value credited to your bank account.

2. Original Amount: The gross amount before adjustments such as bank charges. Most domestic transactions, the received amount and the original amount are one and the same.

3. Currency & Exchange Rate: Derived directly from the statement or calculated for multi-currency transactions.

4. Customer Reference: The payer name or bank reference for customer identification.

5. Memo: The description filled in by the Customer or the bank.

Example:

• Amount in Bank: 990.00 USD

• Original Amount: 1,000.00 USD

• Bank Charges: 10.00 USD

Zuora identifies that the original payment was 1,000 USD, with 10 USD deducted as bank charges

Understanding remittance

Remittance Advice is the document or email your customer sends to explain how a payment should be applied. It acts as the link between the payment received in your bank and the invoices recorded in your ERP. Remittance typically includes:

1. The Payment Amount

2. Invoice numbers and corresponding amounts.

3. Any deductions, discounts, or notes related to the payment.

4. Customer identifiers such as PO numbers or email references.

Zuora captures remittances from multiple sources, depending on how your customers and banks provide the data:

Email Inbox Integration

1. Zuora gives you a shared remittance mailbox (e.g., remittance@yourcompany.com). Your remittance emails can be auto-forwarded to this particular email id.

2. The system automatically reads the body and attachments of incoming emails. The supported format of the attachments are as follows:

   1. CSV

   2. Excel [vnd.ms-excel, vnd.openxmlformats-officedocument.spreadsheetml.sheet, vnd.ms-excel.sheet.macroenabled.12]

   3. PDF

   4. Images

   5. Text files

3. Extracted invoice references are linked to the matching payment based on sender, subject, or payment amount.

Manual Upload

1. Agents can manually upload remittance files directly under the Remittance Advice tab.

2. Supported file types include

   1. CSV

   2. Excel [vnd.ms-excel, vnd.openxmlformats-officedocument.spreadsheetml.sheet, vnd.ms-excel.sheet.macroenabled.12]

   3. PDF

   4. Images

   5. Text files

Lockbox feeds

Many banks provide Lockbox services that include remittance data as part of the payment file.

1. Keyed-in Lockbox: The bank's processing team manually enters invoice numbers and amounts into the lockbox file. These are directly read by Zuora and linked to payments.

2. Scanned Lockbox: The bank provides scanned images (PDF/TIFF) of the original remittance stub. Zuora's OCR engine reads these scanned stubs to extract invoice and customer details.

3. Zuora can process both keyed and non-keyed Lockbox data, automatically associating the remittance details to payments using amount and check reference logic.

How old can the remittance be?

Any remittance that is upto 30 days old would be used for the matching. The order of remiitance arrival relative to a payment is irrelevent. Hence both the below scenarios are supported.

1. Payment arrives first followed by the remittance

2. Remittance arrives first followed by the remittance

3. Both at the same time (For Lockboxes)

Role of remittance in matching

Remittance information plays a vital role in Zuora's Smart Match process, enabling faster and more accurate matching between payments and invoices.

1. Invoice ID / Reference: The Invoice ID (eg: INV-123456) present in the remittance is used for a direct Invoice match.

2. Email domain: The domain name (@customer.com) from the sender address is used to match with the right customer name if the Invoice Data is incomplete.

3. Split Amounts: The invoice split(INV-1 = $700, INV-2 = $300) is used to allocate payments across various invoices.

If the remittance matches existing invoices in Zuora:

1. When multiple matches are possible, Zuora's Smart Match AI suggests the most likely invoices.

2. If no match is found, the payment is tagged as "NO_MATCH" for a manual review.

Adjustments during matching

Any payment discrepancy between the amount in the remittance and the actual payment amount is accounted for as a Bank Adjustment by the system automatically. Then range of this small amount deviation can be set from the settings page.

Example:

Received = $265, Bank Charge = $5, Write-off = $30Applicable Amount = 265 + 5 = $270 applied across invoices totaling $270

Posting the remittance information

The only source of truth for the Remittance information would be Zuora's Cash Application. This information would not be pushed into the ERP unless explicitly integrated. Additionally, the remittance can be made mandatory during posting.