Waterfall commitment
Waterfall commitments apply applicable charges to overlapping commitments sequentially in priority order.
You can create multiple commitments under the same account with overlapping commitment periods. When an applicable charge matches more than one commitment, Zuora applies the charge to the commitments one at a time in priority order.
The commitment with the highest priority is processed first. If the charge amount exceeds the committed amount in a commitment period, the remaining amount contributes to the next commitment in the priority order.
Example: Add a commitment during an existing commitment
An account has a one-year commitment from January 1, 2026 through December 31, 2026, with a committed amount of $1,000 per month. In May, the customer signs a separate commitment for the same account from July 1, 2026 through December 31, 2026, with a committed amount of $200 per month.
Set the original commitment to priority 1 and the later commitment to priority 2. From July through December, applicable charges contribute to the original commitment first. After the original commitment is met for the applicable period, any remaining amount contributes to the later commitment.
Configure waterfall commitments
To configure waterfall commitments, create multiple commitments under the same account with overlapping dates and applicable charges.
Create a commitment on the Create Commitment page.
In the Basic Information section, enter the commitment name and currency. Optionally enter a numeric value in the Priority field to control the processing order. A lower number is processed first.
In the Filter Rules section, select the account and charge that the commitment applies to.
In the Commitment Schedules section, add a schedule with dates that overlap the schedules of the other commitments in the arrangement.
Save and activate the order.
Repeat these steps for each additional commitment that shares the account, applicable charge, and overlapping period.
Determine the processing order
Enter a priority in the Priority field when you create or edit a commitment. Priority is optional. When an applicable charge matches multiple commitments, Zuora uses the priority and the following tie-breakers to determine the processing order:
A lower numeric priority is processed before a higher numeric priority.
If priorities are equal, the commitment with the earlier end date is processed first.
If end dates are equal, the commitment with the earlier start date is processed first.
If start dates are equal, the commitment created earlier is processed first.
If all preceding values are equal, the commitment with the smaller commitment ID is processed first.
If you do not specify a priority, Zuora uses the tie-breakers to determine the processing order.
How charges contribute and true-up works
Waterfall commitments process one applicable charge against one commitment at a time. Zuora starts with the first commitment in the processing order. If that commitment does not use the full charge amount, the remaining amount contributes to the next commitment in the order. This process continues until the charge amount is used or no eligible overlapping commitment remains.
Assume that an account has two commitments with overlapping dates. Both commitments apply to charge C1. In the following example, CMT1 and CMT2 are the commitment numbers. CMT1 has an annual commitment amount of $1,000 and priority 1. CMT2 has an annual commitment amount of $2,000 and priority 2.
Waterfall applies charge spend to CMT1 first. Any remaining charge spend contributes to CMT2.
The following table illustrates three independent charge-spend scenarios. Each row shows the result of a separate charge amount. The scenarios are not sequential billings.
Independent charge-spend scenario | CMT1 contribution and true-up | CMT2 contribution and true-up | Total true-up | Total billed |
|---|---|---|---|---|
$500 | $500 contribution; $500 true-up | No contribution; $2,000 true-up | $2,500 | $3,000 |
$1,500 | $1,000 contribution; no true-up | $500 contribution; $1,500 true-up | $1,500 | $3,000 |
$3,500 | $1,000 contribution; no true-up | $2,500 contribution (including $500 overage); no true-up | $0 | $3,500 |
In the $3,500 scenario, CMT1 receives $1,000 and CMT2 receives the remaining $2,500. Because CMT2 has a $2,000 annual commitment amount, the additional $500 is overage on CMT2. CMT1 is processed before CMT2 because CMT1 has the lower priority number. The remaining charge amount contributes to CMT2 after CMT1 is processed. During true-up, Zuora evaluates each unrelated commitment independently. A true-up amount for one commitment does not roll up to another unrelated commitment.