Stripe invoices in NetSuite

Your customers might want to upgrade or downgrade their subscriptions.

Subscription changes won’t modify the Stripe and NetSuite invoice for the initial invoice. The initial invoice continues to generate revenue during the specified billing period. The new invoice generates revenue during the new subscription period.

Subscription upgrades

If your customer wants to upgrade their subscription, you charge the difference between the unused time proration of the current subscription and the cost of the new subscription. In NetSuite this appears as additions to the subscription invoice.

Subscription downgrades

If your customer wants to downgrade their subscription and the new subscription costs less, you apply a credit for the unused amount of the original subscription to the next invoice. The customer isn’t refunded, and the balance gets added to the customer in Stripe.

When the next billing period occurs, Stripe uses the customer balance to pay the invoice. The connector creates a credit memo against the invoice to represent the amount applied with the customer balance. If the customer balance is greater than the invoice amount, Stripe applies the remaining balance to subsequent invoices.

The approach you use to handle subscription changes depends on how you want to recognize revenue in NetSuite.

Stripe subscriptions with trial periods create zero-balance invoices in Stripe. The connector can either sync these trial period invoices into NetSuite or ignore them.

Trial invoices use a special invoice structure in Stripe. All line items on the invoice are set to zero, so the invoice doesn’t impact accounting. This differs from coupons or discount codes, which creates an invoice with a net total of zero.

The connector still syncs invoices that have non-zero line items, because the invoice might have a net total of zero but contain line items that have general ledger impact.

The connector supports paying an invoice with a Stripe customer credit balance, but this approach isn’t recommended.

If your customer has a negative account balance, they can use their credit balance to partially or fully pay an invoice. For example, if they downgrade their subscription to a lower cost plan, it creates a negative invoice in Stripe. The unused, prorated value gets added to the customer balance. The credit memo applies to the next invoice to represent the portion of the invoice paid using the customer balance. If the invoice has multiple line items, the connector uses the generic Stripe Customer Balance Item. The connector uses the generic Stripe item because it can’t identify which portion of the customer balance to apply to each item, even if the customer balance pays the full invoice amount.

A positive account balance might occur if a plan change or manual adjustment creates a balance that’s less than the minimum payment amount in the invoice currency. In this case, the connector uses a unique Stripe Customer Balance Debit Item to represent the balance amount on the next invoice. If the invoice amount is below the minimum, the invoice isn’t created in NetSuite.

When you edit an invoice in Stripe, the connector voids the original NetSuite invoice with a credit memo. The connector then creates a new invoice to reflect the changes made to the Stripe invoice.

Negative Stripe invoices

NetSuite doesn’t allow negative invoices. Because of this, Stripe represents negative invoices as a zero-dollar invoice in NetSuite, with the negative amount applied on the next invoice as a customer balance credit.

Invoice payment failures

Stripe attempts multiple payments on an invoice. If a payment fails, the invoice remains unpaid in Stripe and open in NetSuite. You must do one of the following:

• Manually pay the invoice.
• Mark the invoice as uncollectible.
• Mark the invoice as void.

You can also configure Stripe to automatically mark the invoice as uncollectible, and the connector closes it in NetSuite.

One-time prices

You can create one-time price objects as lines on an invoice by passing price_data. The price object is automatically archived after it’s used on the invoice. The connector uses the global Stripe Item for one-time price objects.

You can mark an open, unpaid invoice as uncollectible if payment fails on a subscription that’s past due.

Marking an invoice as uncollectible results in the following:

• Stripe treats the subscription as if the user paid and stops attempting to collect payment.
• The user’s subscription continues as normal, but the subscription status remains as past_due.
• The connector automatically creates and applies a credit memo in NetSuite by default. The credit memo reverses the entries to accounts receivable and makes the entry to an income account. If you don’t want the connector to automatically close an invoice, enable the Keep unpaid invoices open feature.

If your payment retry setting for Stripe subscriptions is to cancel the subscription, it marks the associated invoice as uncollectible.

The connector doesn’t support reopening invoices that are marked as uncollectible in Stripe.

The connector doesn’t support reopening invoices marked as uncollectible in Stripe.

Mark an invoice as uncollectible

1. On the Subscriptions and emails tab in the Dashboard, navigate to the Manage failed payments for subscriptions section.
2. For the Invoice status, select mark the invoice as uncollectible if all retries for a payment fail.

This setting affects how the connector records an invoice’s final state in NetSuite.

You might not need to enable this setting if your system has additional requirements, or you have a custom process to close unpaid invoices in NetSuite. If you don’t enable this setting, any open, unpaid invoices with failed payment attempts remain open in NetSuite.

Revenue recognition and bad debt

When creating a credit memo to close an invoice, the connector uses the same revenue recognition schedules as used on the original invoice items. On the credit memo, you can represent all bad debt that’s marked as uncollectible with either of the following:

• The original items on the invoice
• A unique global item to override the default item

Using a bad debt item allows you to customize the account that the bad debt posts to. If you use a unique global item to represent bad debt, the schedules from the original invoice aren’t copied to the credit memo.

The connector reports to NetSuite the date that Stripe records the following invoice statuses: paid, uncollectible, or void. If you use a customized dunning system to handle payment retries and invoice status changes, the closing date for the invoice might differ from the Stripe closing date.

The connector’s invoice syncing feature supports Stripe shipping rates. If a Stripe invoice has a shipping cost, the connector creates a Stripe Shipping global item in your NetSuite instance and uses this item to create a NetSuite invoice line item that represents the shipping cost.