You want to write off an invoice that is fully paid but each of its items still has a non-zero balance.

The invoice originally had the total amount of $108, and it contained two invoice items and their corresponding taxation items. Later, you applied a payment with the total amount of $108 to invoice item 1 and taxation item 1.

For example:

In this use case, no matter which option the Create credit memos mirroring invoice items billing rule is set to, the credit memo created during invoice write-off is as follows.

Combined use case: Invoice applied by a credit memo and then written off

In some scenarios, an invoice is first partially credited by a credit memo generated from a bill run (for example, when a subscription is canceled mid‑term) and then written off. This can result in two credit memos against the same invoice:

• A first credit memo (CM1) from the bill run that reduces the invoice and line‑level balances. If this apply does not specify the line-level allocation, it will use the tenant default application rule.
• A second credit memo (CM2) created by the invoice write‑off that clears the remaining non‑zero balances on invoice items and taxation items, based on the Create credit memos mirroring invoice items billing rule.

This behavior is expected. CM1 represents the billing engine adjustment (such as a cancellation), and CM2 represents the final write‑off of any remaining line‑level balances.

In some scenarios, an invoice is first partially credited by a credit memo generated from a bill run (for example, when a subscription is canceled mid‑term) and then written off. This can result in two credit memos against the same invoice.

Take the following example combined use case. You create a 1‑month taxable subscription with:

• Charge of $100 per month (tax exclusive)

• 10% tax rate

• 10% subscription discount

• Subscription term: 2026‑04‑01 to 2026‑04‑30

An invoice INV‑1 is generated by a bill run targeting the end of the subscription term. The invoice consists of:

• Invoice item: $100.00

• Discount invoice item: -$10.00

• Taxation item: $10.00

• Discount taxation item: -$1.00

Together, these result in an invoice header amount of $99.00.

Assume the subscription is canceled effective 2026‑04‑16, and a bill run generates credit memo CM‑1 for $49.50. CM‑1 is then applied back to INV‑1 according to your tenant’s default credit memo application rule (assuming you do not specify line‑level allocation when applying it).

After CM‑1 is applied:

• The invoice header balance is reduced from $99.00 to $49.50.

• At the line level, the remaining balances are, for example:

  • Invoice item: $45.45

  • Taxation item: $5.05

  • Discount invoice item is fully settled (balance 0)

  • Discount taxation item has a balance (balance -1)

You then perform an invoice write‑off on INV‑1.

• Zuora generates credit memo CM‑2 for $49.50 based on the Create credit memos mirroring invoice items billing rule (set to Yes but do not create for zero balance invoice items or Yes).

• CM‑2 contains credit memo items that mirror the remaining non‑zero invoice and taxation item balances:

  • Credit memo item: $55.45

  • Discount credit memo item: -$10.00

  • Taxation credit memo item: $5.05

  • Discount taxation credit memo item: -$1.00

This is the end result. After CM‑1 and CM‑2 are posted and applied:

• The invoice header balance is 0.

• All invoice items and taxation items have a balance of 0.

• Two credit memos are associated with the invoice:

  • CM‑1 represents the billing engine adjustment (for example, the cancellation‑related proration) and partially reduces the invoice and line‑level balances.

  • CM‑2 represents the final write‑off of the remaining non‑zero line‑level balances, created according to the Create credit memos mirroring invoice items billing rule.

This behavior is expected. CM‑1 captures the billing adjustment, and CM‑2 clears the remaining balances as part of the invoice write‑off process.