Example 2 - SO release upon booking (overage invoice)

This example demonstrates the accounting impact and balance when an initial SO line of $100 is uploaded to Zuora Revenue with a release event upon booking, and later increased to $180.

In this example, the initial SO line of $100 is uploaded to Zuora Revenue. The release event is Upon Booking. The impact and balance of the accounting entries will be as follows:


Impact			Balance
Account type	Dr	Cr	Account type	Dr	Cr
Contract Liability	100		Contract Liability	100
Revenue		100	Revenue		100

Later, the SO line with the same SO line ID is uploaded to increase the SO value to $180. The impact and balance of the accounting entries will be as follows:


Impact			Balance
Account type	Dr	Cr	Account type	Dr	Cr
Contract Liability	80		Contract Liability	180
Revenue		80	Revenue		180

Then, an invoice line of $200 is collected, which is associated with the original SO line. A one-sided initial entry is created for $200 in Zuora Revenue.


Impact			Balance
Account type	Dr	Cr	Account type	Dr	Cr	Initial Entry Flag
Contract Liability		200	Contract Liability		200	Y

The reclass entries are created by Zuora Revenue as follows. The first two lines are to reverse the journal entries created for the SO line. The other two lines are to recognize the invoice amount.


Balance
Account type	Dr	Cr	Note
Contract Liability		180	SO reverse
Revenue	180		SO reverse
Contract Liability	200		Invoice recognized
Revenue		200	Invoice recognized

Then, a CM-C line is collected in Zuora Revenue, which is associated with the previous invoice. The EXT_SLL_PRC value of this CM-C line is -$100 so it reduces the invoice amount by $100. The initial entry created for the CM-C line is as follows:


Impact			Balance
Account type	Dr	Cr	Account type	Dr	Cr	Initial Entry Flag
Contract Liability	100		Contract Liability		100	Y

The entries for the billed revenue and unbilled revenue are as follows:


Impact			Balance
Account type	Dr	Cr	Account type	Dr	Cr	Note
Revenue	100		Contract Liability	100		Billed revenue
Contract Liability		100	Revenue		100	Billed revenue
Revenue		100	Revenue	80		Unbilled revenue
Contract Liability	100		Contract Liability		80	Unbilled revenue

Welcome to Zuora Product Documentation

Explore our rich library of product information

Example 2 - SO release upon booking (overage invoice)

zuora-footer