Finance Management

How do I setup the Zuora Avalara integration?

Overview

Avalara is software for automated tax compliance. Whether you are selling online, starting a new business, or need help filing internationally Avalara can help with your tax needs. Customer who have more advanced or automated tax needs, generally choose to integrate Zuora and Avalara.

Below are the high-level steps to configure Zuora to work with Avalara.

Solution

Submit a ticket to Zuora Support in order to gain access to this feature (currently in Limited Availability).
 
1. Set up Connections to Avalara: Add Avalara as a tax engine in your Zuora tenant and set up the connection.
 
2. Configure Tax Codes in Zuora Billing: Create tax codes in Zuora and associate them with your tax codes in Avalara.
 
3. Associate Avalara Tax Codes with Product Rate Plan Charges: set the Taxable flag on the charge in order to display the Tax Codes. Choose the applicable Tax Code to use for that product
Note** this only needs to be done in the Product Catalog; a mass-amendment of subscriptions is not required.

4. Configure your Tenant Profile & Permissions: set origin address in Zuora and verify this address for compatibility in Avalara. Add Company Codes and additional origin addresses. Disable the Cancel Posted Invoice permission.

Note** all addresses require a Country; for US and Canada a State is required

5. Create Tax Exemptions: specify whether a customer account is tax exempt or not tax exempt
 
After completing testing in Sandbox, enable and test in Production.

Zuora NetSuite Integration - An Overview

Overview

The Zuora NetSuite Integration (aka Connector) is an optional solution that leverages the core capabilities of both the Zuora and NetSuite applications. Zuora manages complex subscriptions and NetSuite is a hosted General Ledger (GL) System.

Features

Zuora NetSuite Connector combines Zuora's subscription billing capabilities with NetSuite's ERP/Financials solution with bi-directional integration across every core application module to seamlessly combine the two applications.

This solution is a pre-defined, out-of-the-box integration that synchronizes transactions between the two applications. Zuora provides NetSuite Connector customers with an integration console in the Zuora Billing user interface which is used to set up the integration, control and monitor the synchronization of data, and view any error or success logs from the synchronization.

Integrating Zuora with NetSuite allows you to use Zuora's applications to:

  • Manage complex pricing and packaging models
  • Align charges with existing subscriptions
  • Consolidate billing
  • Streamline renewal patterns

Advanced Pricing Configuration

Configure any type of subscription pricing, packages and bundles (including one-time, recurring, usage and metering charges, volume tier pricing, and overage pricing) to link Zuora's Product Catalog and NetSuite's Item. For example, simple or complex subscription pricing can be configured in Zuora, such as a cellular phone plan or a data plan with usage, and synchronized to NetSuite's product catalog (e.g. items in the same hierarchical structure).

Customer Account Mirroring

Synchronize Customer Accounts, Billing Accounts, and any customer account hierarchies to provide a single view of all customers whether the data is in Zuora or NetSuite. For example, an address change in Zuora is synchronized with the corresponding account address in NetSuite (and synchronized from NetSuite to Zuora).

Bi-Directional Payment Operations

Manage the Invoice to Cash process in either Zuora or NetSuite with the two-way integration of Zuora Payment Operations with NetSuite's Accounts Receivable module. For example, a customer is issued a refund in Zuora when a subscription is cancelled and the refund is applied to the appropriate payment in NetSuite.

Revenue Recognition Integration

Manage revenue recognition by mapping Zuora's subscription details, including revenue recognition codes, trigger conditions, revenue start dates and revenue end dates to NetSuite's revenue recognition templates and Advanced Revenue Management Module.

Subscription Metrics

Drive key business decisions by using Zuora's subscription metrics, such as Contracted Monthly Recurring Revenue, Total Contract Value, Renewal Rate and Churn.

NetSuite customers can leverage NetSuite's cloud ERP/Financials solution in mixed cloud application environments, including using the Zuora CPQ solution which seamlessly connects Salesforce CRM and Zuora's subscription commerce platform.

Deciding to Use NetSuite Connector

Use NetSuite Connector to solve the following business problems:

  • You have are using NetSuite for one line of your business, but you want to leverage Zuora for subscriptions
  • You have customized NetSuite for subscriptions, but you have reached the limit of the NetSuite customization
  • You are using QuickBooks and want to upgrade your accounting system.
  • You want to have all transactions in your general ledger for a full reporting view in NetSuite.
  • You want NetSuite to handle your revenue recognition.

Verizon Reports Impacts From Accounting Change, Tax Cuts And Jobs Act

Excerpts from an article on Nasdaq.com

Verizon announced it has implemented ASU 2014-09, Revenue from Contracts with Customers (ASC 606) on January 1, 2018 using the modified retrospective method for open contracts. The company said the adoption of the new standard will have a significant impact on its 2018 operating results. During the first quarter of 2018, the Group will record a cumulative adjustment to retained earnings which is primarily related to two items: net contract assets arising from open wireless subsidy contracts, and deferred commission costs.

For full year 2018, the company estimates the overall impact from the opening balance sheet adjustment and the ongoing impact from new contracts to result in an insignificant change to consolidated revenue. The revenue change is primarily related to an expected decrease in wireless service revenue offset by an expected increase in wireless equipment revenue. The company estimates a net decrease to operating expenses primarily related to wireless and wireline commission expense. In the aggregate, these items are expected to yield an estimated benefit to full year 2018 consolidated operating income. On opening balance sheet impact, the company estimates pretax retained earnings increase to be in the range of $4.0 – $4.6 billion. The company said the accretive benefit to operating income anticipated in 2018 is expected to moderate in 2019 and become insignificant in 2020.

Read the full article on Nasdaq.com

Performance tracking and finance management

ASC 606, Revenue From Contracts With Customers, was issued jointly by the FASB and IASB on May 28, 2014. It was originally effective for annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2016, for public entities. Early application was not permitted (however, early adoption was optional for entities reporting under IFRSs). On August 12, 2015, the FASB issued an ASU, Revenue From Contracts With Customers (Topic 606): Deferral of the Effective Date, which deferred for one year the effective date of the new revenue standard for public and nonpublic entities reporting under U.S. GAAP. Therefore, for public business entities, certain not-for-profit entities, and certain employee benefit plans, the effective date for ASC 606 is annual reporting periods (including interim reporting periods within those periods) beginning after December 15, 2017.

The effective dates of the new ASC606 and IFRS15 accounting standards are looming, in turn renewing the emphasis on revenue recognition and finance management. Financial metrics must be forward-looking and report on:

  • customers, not units;
  • lifetime value, not average selling price;
  • recurring profit margins, not annual gross revenue;
  • renewal rates, not close rates;

These metrics differ but do not always map to those configured in an enterprise general ledger (GL) system. CFO's may require access to detailed key performance indicators and reports directly from the billing solution itself — relying on it as a "second tier" to incumbent ERP and GL systems. As a result, the Billing System becomes an extension, subledger, of the General Ledger and necessitates the need for finance and billing to be tightly coupled.

Sources:

  1. https://www.iasplus.com/en-us/standards/fasb/revenue/asc606