Managing Revenue Recognition in Zuora Billing

This document outlines the process for setting up and managing revenue recognition in Zuora Billing. It covers enabling the revenue recognition feature, defining rules, and creating quote line items for non-subscription charges, ensuring a seamless integration with Zuora CPQX for comprehensive quote management.

Step 1

Ensure that you have the necessary revenue recognition setup in place within Zuora Billing. Verify that the revenue recognition feature is enabled and that rules for OLAs are defined. Let's begin by checking if the revenue recognition feature is active.

Step 2

Navigate to the Finance section in the interface.

Step 3

Select "Manage Features" and confirm that the Revenue Recognition Feature is enabled. If it is already active, no further action is required.

Step 4

If enabling for the first time, be aware it may take a few minutes to activate, and you will receive an email confirmation. No support ticket is necessary. Now, let's define the revenue recognition rule.

Step 5

Once the feature is active, navigate back to Finance and select "Manage Non-subscription Terms and Stand-alone Orders." In the Non-subscription Items tab, ensure that accounts are defined.

Step 6

With this setup complete, proceed to create the quote line item. For non-subscription items, businesses may charge for one-time services such as setup fees, onboarding, or consulting hours.

Step 7

Zuora CPQX facilitates the inclusion of these non-subscription charges within a quote by allowing you to add a Quote Line Item (QLI). This ensures all charges, both recurring and one-time, are visible in a single document.

Step 8

Consider a scenario where Greenfield Enterprises has upgraded to a premium plan and now requires a one-time onboarding service for data migration. We will create a quote to include this.

Step 9

Add the premium plan and learn how to incorporate the onboarding fee as a quote line item. Begin by creating a new quote.

Step 10

Quickly create a new quote by selecting the billing account as Gima Blue and clicking on "New Quote." Fill in the necessary quote details.

Step 11

Fill in the details promptly.

Step 12

With the start date set to October 31st, 2025, continue by filling in the subscription details. Set the term subscription and proceed to the product section.

Step 13

Click on "Browse Products" and search for the premium cloud storage product.

Step 14

Add the Cloud Storage Premium product to the quote. Next, include the one-time onboarding or setup service.

Step 15

Scroll down to locate the "Quote Line Items" section.

Step 16

You can add a quote line item in two ways: by selecting a one-time charge from your product catalog or by creating an ad hoc quote line item from scratch by clicking "New Quote Line Item."

Step 17

Let's first add a QLI from the product catalog using a quick search or by clicking on "Browse Products." You will see a list of one-time charges.

Step 18

Select the "Data Migration Onboarding Service" product charge from the list by clicking the plus button and selecting "Add Selection."

Step 19

Define the item type as either a product or service. Since this is a service, switch to "Service." You can modify the item state to executing, send to billing, complete, or canceled.

Step 20

Select "Send to Billing." You have now added a quote line item from the list of one-time charges in the product catalog.

Step 21

Now, let's learn to create an ad hoc QLI from scratch. Click on the "New Quote Line Item" button.

Step 22

In the pop-up window that appears, enter the item name, for instance, "Setup Service Fee."

Step 23

Set the transaction date to October 31st, 2025. If you have a PO number or invoice number, include it here.

Step 24

Change the item state to "Send to Billing." Specify the bill target date, which should again be October 31st, 2025. Set the amount to $400.

Step 25

Enter the amount per unit as 400, with the quantity consumed being two. Scroll further to select the contact list and finance-related rules.

Step 26

Specify the "Recognize Revenue Accounting Code."

Step 27

With finance settings configured, click "Save."

Step 28

Back on the Quote Details page, review the entire quote and line item details.

Step 29

Click "Preview Metrics" to calculate the metric values.

Step 30

Since this pertains to a one-time charge, the order lines will display as separate items. Review the quote metrics as they are not associated with a subscription, hence appearing as separate sales order lines.

Step 31

After reviewing and receiving customer approval, send the quote to Zuora. Select "Send to Zuora" from the list of options.

Step 32

Upon successful transmission to Zuora, click "OK." In the details section, you will notice the subscription name is 82. Return to Zuora Billing and select "Subscriptions."

Step 33

View subscription 82.

Step 34

Scroll down to examine further details.

Step 35

Upon reviewing the subscription, check the order details.

Step 36

In the order section, you will find two sales order line items: Setup Service Fee and Data Migration Onboarding Service Fee, each priced at $400. To associate this quote line item with the subscription, click "Edit" to view the subscription number.

Step 37

This concludes the process, allowing you to view the subscription and order line item details. Keynote.

Step 38

Quote line items are ideal for non-recurring standalone fees not linked to a specific subscription product. These items are billed once and tracked separately from recurring subscription revenue. You can incorporate multiple quote line items in a single quote to cover various one-time services or charges.

Step 39

Each QLI is displayed as a distinct line item in both the quote PDF and the respective order in Zuora Billing. This process equips sales teams to generate complete, accurate quotes while providing finance teams with comprehensive visibility into non-subscription revenue.