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How to manually handle IIA's in Zuora and AvaTax?

Overview

This is a guide for how to manually calculate tax on Invoice Item Adjustments using AvaTax. Please note the following should only be used if the automated process is not viable. The basic process is:

  1. Add the document to AvaTax.
  2. Use the calculation from AvaTax to put the correct tax adjustment into Zuora.

Resolution

There are many variations on precisely how you could perform this process. The method below assumes that the Invoice Item Adjustments have already been created and that no tax adjustments have been made in those Invoice Item Adjustments.

Here are the steps, using IIA-00000311 as an example.
 File:kb/001/How_to_manually_handle_IIA's_in_Zuora_and_AvaTax?/clipboard_1387473978985.png

We need to know the following about the Invoice Item Adjustment: Please note the information in parenthesis below are just examples.
IIA Number: (IIA-00000311)
Adjustment Date: (12/19/2013)
Invoice Date: (11/25/2013)
Account Number: (
A00000011) This is how we identify customers since names are not always unique.
Adjustment Amount: (1000)

Shipping Address: (100 Ravine Ln, Bainbridge Island, WA, 98110) We need this to determine the correct tax rate and jurisdictions. If you are unsure of how to get this. You can click on the Customer Account on record for the IIA. Then look at the Ship To contact's address. That is the address we need here.
Tax Code: (SW052000) The tax code can be found by looking at the rate plan used for the specific line. This is optional if the line should simply be taxable.
Invoice Number: (INV00000037) This is optional. It can be nice to add a comment in AvaTax referencing the original invoice.

Next, we need to sign into the AvaTax Admin Console (https://admin-avatax.avalara.net).
 File:kb/001/How_to_manually_handle_IIA's_in_Zuora_and_AvaTax?/clipboard_1387474697916.png

Go to the Transactions tab.
 File:kb/001/How_to_manually_handle_IIA's_in_Zuora_and_AvaTax?/clipboard_1387474765065.png

Verify you are in the correct AvaTax Company, as your account may have a test company, or simply multiple entities.
Once you have checked that, click on the orange New button.

 File:kb/001/How_to_manually_handle_IIA's_in_Zuora_and_AvaTax?/clipboard_1387474974076.png

Fill in the information you can on this tab. We will add additional information on the Lines tab in the next step. Here you will need to fill out:
Document Code: (IIA-00000311) This needs to be the IIA number including the "IIA-" at the start.
Customer/Vendor Code: (A00000011) This needs to be the Account Number from Zuora.
Document Date: (12/19/2013) This needs to be the Adjustment Date from Zuora.
Document Type: You can leave this as a Sales Invoice. We will be using a negative value on the lines to make this document behaive as a credit.

Tax Override Type: TaxDate
​Tax Override Date: (11/25/2013) This needs to be the Invoice Date from Zuora.
Tax Override Reason: A reason must be provided for the tax override here. You may use anything you like. In this example I used "Invoice Item Adjustment". This is a free form feild that simply requies some form of input.

Origin: The address fields are near the top of the form, to the left and the right. These fields will need to be filled out. The origin should be where the invoice shipped from.

Destination: In this example the origin and destination are the same. The destination should be the customer's address products were shipped to.

File:kb/001/How_to_manually_handle_IIA's_in_Zuora_and_AvaTax?/clipboard_1387475328993.png

Switch to the Lines tab and click on Add New Line.
 File:kb/001/How_to_manually_handle_IIA's_in_Zuora_and_AvaTax?/clipboard_1387475380742.png

Enter the amount. Be sure you make the amount negative, and leave the quantity positive. Also, please note this is the extended amount, not the amount per quantity. (Optional: to correctly calculate items in certain taxing jurisdictions you may need to include the Item and Tax Code)
  File:kb/001/How_to_manually_handle_IIA's_in_Zuora_and_AvaTax?/clipboard_1387476480864.png

With this information filled in, click on Add at the bottom of this section.
 File:kb/001/How_to_manually_handle_IIA's_in_Zuora_and_AvaTax?/clipboard_1387487386254.png

Then click on Save as Committed.
  File:kb/001/How_to_manually_handle_IIA's_in_Zuora_and_AvaTax?/clipboard_1387476524950.png

This finishes the entry into AvaTax. You can see on the summary page, or the detail page for the document you just created what the calculated tax is. In the example here, the calculated tax was -$86.00.
File:kb/001/How_to_manually_handle_IIA's_in_Zuora_and_AvaTax?/clipboard_1387487494425.png

 

Now we need to enter this into Zuora. Create a new Invoice Item Adjustment in Zuora.
 File:kb/001/How_to_manually_handle_IIA's_in_Zuora_and_AvaTax?/clipboard_1387476770277.png

Select the same customer and invoice as the original IIA. You can leave the Adjustment Date alone or modify it as you please.
 File:kb/001/How_to_manually_handle_IIA's_in_Zuora_and_AvaTax?/clipboard_1387476841076.png

Click on "[Show Discount and Tax]" so we can alter the tax amount.

 File:kb/001/How_to_manually_handle_IIA's_in_Zuora_and_AvaTax?/clipboard_1387477068261.pngEnter the calculated tax (this may be obvious, as in this example, or AvaTax's calculation may be very helpful with partial amounts). With the amount entered click on the adjust invoice items button near the bottom on the page.
 File:kb/001/How_to_manually_handle_IIA's_in_Zuora_and_AvaTax?/clipboard_1387477206740.png

Repeat this process with Invoice Item Adjustments until you are finished. And this is the manual process. An automated process is available and preferable. Although this method is available if the automated process does not work for any reason.