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R12.x Oracle Receivables Management FundamentalsVolume II • Student Guide
D60125GC10
Edition 1.0
March 2010
D65849
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Copyright © 2010, Oracle. All rights reserved. Disclaimer This document contains proprietary information and is protected by copyright and other intellectual property laws. You may copy and print this document solely for your own use in an Oracle training course. The document may not be modified or altered in any way. Except where your use constitutes "fair use" under copyright law, you may not use, share, download, upload, copy, print, display, perform, reproduce, publish, license, post, transmit, or distribute this document in whole or in part without the express authorization of Oracle. The information contained in this document is subject to change without notice. If you find any problems in the document, please report them in writing to: Oracle University, 500 Oracle Parkway, Redwood Shores, California 94065 USA. This document is not warranted to be error-free. Restricted Rights Notice If this documentation is delivered to the United States Government or anyone using the documentation on behalf of the United States Government, the following notice is applicable: U.S. GOVERNMENT RIGHTS The U.S. Government’s rights to use, modify, reproduce, release, perform, display, or disclose these training materials are restricted by the terms of the applicable Oracle license agreement and/or the applicable U.S. Government contract. Trademark Notice Oracle and Java are registered trademarks of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners.
Author
Mathew Daniel, Robert MacIsaac, Sanjay Mall, Vijay Tiwary
Technical Contributors and Reviewers
Victoria Anderson, Nigel Chapman, Tina Cook, Terry Erb, Julie Gustafson, Carol King, Shivranjini Krishnamurthy, Robin Love, Suzanne Miller, Doug Myers, Pamela Rietz, Aalok Shah, Brian Wolfe, Yogendra Joshi, Ivy Farren
This book was published using: Oracle Tutor
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Copyright © Oracle 2010. All rights reserved.
R12.x Oracle Receivables Management Fundamentals Table of Contents i
Table of Contents
Order to Cash Lifecycle Overview.................................................................................................................1-1 Order to Cash Lifecycle Overview ................................................................................................................1-3 Objectives ......................................................................................................................................................1-5 Agenda...........................................................................................................................................................1-6 Order to Cash Lifecycle.................................................................................................................................1-7 Agenda...........................................................................................................................................................1-9 Order Lifecycle..............................................................................................................................................1-10 Order Management Process...........................................................................................................................1-11 Viewing and Managing Orders......................................................................................................................1-12 Scheduling Process ........................................................................................................................................1-13 Pricing Process ..............................................................................................................................................1-14 Shipping Process ...........................................................................................................................................1-15 AutoInvoice Process ......................................................................................................................................1-16 Receivables Process.......................................................................................................................................1-17 Cash Management Process ............................................................................................................................1-18 Agenda...........................................................................................................................................................1-19 Overview of Application Integration.............................................................................................................1-20 Quiz ...............................................................................................................................................................1-22 Summary........................................................................................................................................................1-26
Overview of Oracle Receivables Process .......................................................................................................2-1 Overview of Oracle Receivables Process ......................................................................................................2-3 Objectives ......................................................................................................................................................2-4 Agenda...........................................................................................................................................................2-5 Order to Cash Lifecycle.................................................................................................................................2-6 Overview of Receivables in the Order to Cash Process.................................................................................2-7 Agenda...........................................................................................................................................................2-8 Overview of the Receivables Process............................................................................................................2-9 Overview of Receivables Integration ............................................................................................................2-10 Receivables Integration Process ....................................................................................................................2-11 Agenda...........................................................................................................................................................2-12 Overview of the Transaction Process ............................................................................................................2-13 Overview of Other Invoice Operations..........................................................................................................2-14 Overview of Adjustments ..............................................................................................................................2-16 Overview of Credit Memos ...........................................................................................................................2-17 Overview of the AutoInvoice Process ...........................................................................................................2-18 Overview of Receipts and Remittances .........................................................................................................2-19 Agenda...........................................................................................................................................................2-20 Overview of Advanced Collections...............................................................................................................2-21 Advanced Collections – Collection Methods ................................................................................................2-23 Oracle iReceivables .......................................................................................................................................2-25 Oracle iReceivables Product Integration .......................................................................................................2-26 Overview of Oracle iReceivables Features....................................................................................................2-28 Quiz ...............................................................................................................................................................2-31 Summary........................................................................................................................................................2-35
Manage Parties and Customer Accounts.......................................................................................................3-1 Manage Parties and Customer Accounts .......................................................................................................3-3 Objectives ......................................................................................................................................................3-4 Agenda...........................................................................................................................................................3-5 Customer Overview.......................................................................................................................................3-6 Party Model Overview...................................................................................................................................3-7 Party Model ...................................................................................................................................................3-9
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R12.x Oracle Receivables Management Fundamentals Table of Contents ii
Party Model and Relationships......................................................................................................................3-11 Managing Parties ...........................................................................................................................................3-13 Party Sites......................................................................................................................................................3-14 Customer Accounts........................................................................................................................................3-15 Integrating Party Information ........................................................................................................................3-16 Agenda...........................................................................................................................................................3-17 Profile Classes ...............................................................................................................................................3-18 Profile Class Characteristics ..........................................................................................................................3-20 Managing Customer Account Profiles...........................................................................................................3-21 Setting Up a Late Charge Policy in Profile Classes.......................................................................................3-22 Updating Profile Classes ...............................................................................................................................3-25 Reviewing Profile Class Changes..................................................................................................................3-26 Agenda...........................................................................................................................................................3-27 Data Quality Management Overview ............................................................................................................3-28 Data Quality Management (DQM)................................................................................................................3-29 How Does DQM Work? ................................................................................................................................3-30 Setting UP DQM ...........................................................................................................................................3-31 Entry Methods ...............................................................................................................................................3-33 Business Issues ..............................................................................................................................................3-35 Business Purposes..........................................................................................................................................3-36 Multiple Sites and Business Purposes: Centralized Example ........................................................................3-38 Multiple Sites and Business Purposes: Decentralized Example ....................................................................3-39 Importing Data Using Interface Tables .........................................................................................................3-40 Entering Data Using the Customers Set of Pages..........................................................................................3-42 Prevention of Duplication and Invalid Address Creation ..............................................................................3-45 Dun & Bradstreet (D&B) Integration ............................................................................................................3-47 D&B Online...................................................................................................................................................3-48 Agenda...........................................................................................................................................................3-49 Merge Parties or Customer Accounts ............................................................................................................3-50 Agenda...........................................................................................................................................................3-52 Customer Account Relationships ..................................................................................................................3-53 Agenda...........................................................................................................................................................3-55 Oracle Trading Community Architecture ......................................................................................................3-56 TCA Registry.................................................................................................................................................3-57 TCA Administration ......................................................................................................................................3-58 Using Party Paying Relationships .................................................................................................................3-59 Using Customer Account Relationships ........................................................................................................3-60 Using Party Paying and Customer Account Relationships............................................................................3-61 Creating Party Paying Relationships .............................................................................................................3-62 Pay Within Paying Relationships ..................................................................................................................3-63 Party Paying Relationships Process Flow......................................................................................................3-64 Pay Below Paying Relationships ...................................................................................................................3-65 Relationship Types and Relationship Groups................................................................................................3-66 Agenda...........................................................................................................................................................3-67 Reviewing Information..................................................................................................................................3-68 Reports...........................................................................................................................................................3-69 Agenda...........................................................................................................................................................3-70 Mandatory Customer Profile Setup Steps......................................................................................................3-71 Collectors.......................................................................................................................................................3-72 Payment Terms..............................................................................................................................................3-74 Optional Customer Profile Setup Steps .........................................................................................................3-75 Setup Steps for Customers.............................................................................................................................3-77 System Options Related to Customers...........................................................................................................3-78 Profile Options...............................................................................................................................................3-80 Optional Setup Steps for Customers..............................................................................................................3-82 Flexible Address Formatting .........................................................................................................................3-84 Quiz ...............................................................................................................................................................3-86
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R12.x Oracle Receivables Management Fundamentals Table of Contents iii
Summary........................................................................................................................................................3-90 Process Invoices Using AutoInvoice...............................................................................................................4-1
Process Invoices Using AutoInvoice .............................................................................................................4-3 Objectives ......................................................................................................................................................4-4 Agenda...........................................................................................................................................................4-5 AutoInvoice Process ......................................................................................................................................4-6 AutoInvoice Integration.................................................................................................................................4-8 What Occurs During AutoInvoicing..............................................................................................................4-9 AutoInvoice Interface Tables ........................................................................................................................4-11 Agenda...........................................................................................................................................................4-13 Managing AutoInvoice System Options........................................................................................................4-14 Defining Transaction Batch Sources for AutoInvoice...................................................................................4-16 Automated Refunds .......................................................................................................................................4-20 Grouping Rules..............................................................................................................................................4-21 Grouping Transaction Attributes ...................................................................................................................4-22 Grouping Rule Hierarchy ..............................................................................................................................4-23 Line Ordering Rules ......................................................................................................................................4-24 Transaction Flexfields ...................................................................................................................................4-25 Defining Transaction Flexfields ....................................................................................................................4-26 AutoInvoice Validation .................................................................................................................................4-28 Submitting AutoInvoice ................................................................................................................................4-29 AutoInvoice Reports......................................................................................................................................4-30 Implementation Considerations .....................................................................................................................4-31 Agenda...........................................................................................................................................................4-32 Error Correction Overview............................................................................................................................4-33 AutoInvoice Exception Handling Windows ..................................................................................................4-34 Quiz ...............................................................................................................................................................4-36 Summary........................................................................................................................................................4-40
Process Invoices ...............................................................................................................................................5-1 Process Invoices ............................................................................................................................................5-3 Objectives ......................................................................................................................................................5-4 Agenda...........................................................................................................................................................5-5 Oracle Receivables Overview........................................................................................................................5-6 Transactions Overview ..................................................................................................................................5-8 Transactions Workbench Windows...............................................................................................................5-9 Agenda...........................................................................................................................................................5-10 Invoice Entry Methods ..................................................................................................................................5-11 Creating a Standard Invoice Manually ..........................................................................................................5-12 Invoice Components ......................................................................................................................................5-14 Transactions Window Tabs ...........................................................................................................................5-16 Required Transaction Information.................................................................................................................5-18 Entering Invoice Dates ..................................................................................................................................5-20 Transaction Defaults......................................................................................................................................5-21 Standard Invoice Line Types .........................................................................................................................5-23 Entering Freight Invoices or Lines ................................................................................................................5-24 Entering Sales Credits ...................................................................................................................................5-26 Completing Transactions ...............................................................................................................................5-28 Creating Invoice Batches...............................................................................................................................5-30 View Currency Details ..................................................................................................................................5-31 Agenda...........................................................................................................................................................5-33 Creating Copies of Invoices...........................................................................................................................5-34 Using Recurring Rules...................................................................................................................................5-35 Creating Invoices with Rules.........................................................................................................................5-37 Accounting Rules ..........................................................................................................................................5-38 Assigning Accounting Rules to Invoice Lines...............................................................................................5-39 Using Invoices With Rules ............................................................................................................................5-40
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R12.x Oracle Receivables Management Fundamentals Table of Contents iv
Example of Billing in Advance .....................................................................................................................5-41 Example of Billing in Arrears........................................................................................................................5-42 Deferred Accounting Rules ...........................................................................................................................5-43 Revenue Recognition Program ......................................................................................................................5-44 Making Adjustments Using Revenue Accounting.........................................................................................5-46 Balance Forward Billing (BFB) Process .......................................................................................................5-48 Calculating Late Charges...............................................................................................................................5-50 How Oracle Receivables Uses Statements ....................................................................................................5-52 Setup Details Report......................................................................................................................................5-53 AR: Use Statement, Dunning, and Late Charges Site Profiles ......................................................................5-54 Agenda...........................................................................................................................................................5-55 Invoice Transaction Flow ..............................................................................................................................5-56 Invoice Correction Methods ..........................................................................................................................5-57 Overview of Corrections................................................................................................................................5-58 Updating Invoices..........................................................................................................................................5-60 Creating Debit Memos...................................................................................................................................5-61 Creating Adjustments ....................................................................................................................................5-63 Applying Different Types of Credits .............................................................................................................5-65 Credit Memo Options ....................................................................................................................................5-66 On-Account Credit Options...........................................................................................................................5-68 Reversing Sales Credits .................................................................................................................................5-69 Manual Refunds.............................................................................................................................................5-70 Voiding Transactions.....................................................................................................................................5-72 Agenda...........................................................................................................................................................5-74 Reports...........................................................................................................................................................5-75 Printing Transactions.....................................................................................................................................5-76 Process for Printing Transactions ..................................................................................................................5-77 Using Balance Forward Billing .....................................................................................................................5-78 Agenda...........................................................................................................................................................5-80 Event-Based Revenue Management ..............................................................................................................5-81 Automated Revenue Management Process....................................................................................................5-82 Daily Revenue ...............................................................................................................................................5-83 Revenue Contingencies .................................................................................................................................5-85 Revenue Contingencies Process ....................................................................................................................5-86 Revenue Contingency Analyzer ....................................................................................................................5-87 COGS and Revenue Matching.......................................................................................................................5-88 Evaluating Invoices for Event-Based Revenue Management........................................................................5-89 Collectability Requirements for Revenue Recognition .................................................................................5-90 How Collectability Requirements Relate to Invoices ....................................................................................5-91 Applying Receipts and Event-Based Revenue Management.........................................................................5-92 Agenda...........................................................................................................................................................5-93 Promised Commitment Amounts ..................................................................................................................5-94 Quiz ...............................................................................................................................................................5-95 Summary........................................................................................................................................................5-99
Bill Presentment Architecture ........................................................................................................................6-1 Bill Presentment Architecture........................................................................................................................6-3 Objectives ......................................................................................................................................................6-4 Agenda...........................................................................................................................................................6-5 Bill Presentment Architecture Overview.......................................................................................................6-6 BPA Framework............................................................................................................................................6-7 BPA Process Flow.........................................................................................................................................6-8 Creating Templates........................................................................................................................................6-9 Defining Assignment Rules...........................................................................................................................6-11 Data Retrieval ................................................................................................................................................6-12 Agenda...........................................................................................................................................................6-13 Registering Data Sources...............................................................................................................................6-14
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R12.x Oracle Receivables Management Fundamentals Table of Contents v
Enabling Data Sources...................................................................................................................................6-15 Viewing Data Sources ...................................................................................................................................6-16 Creating Database Views...............................................................................................................................6-17 Registering Data Source Views .....................................................................................................................6-18 Viewing Data Source Views..........................................................................................................................6-19 Agenda...........................................................................................................................................................6-20 Template Management ..................................................................................................................................6-21 Modifying Templates ....................................................................................................................................6-22 Creating a New Template ..............................................................................................................................6-23 Uploading External Templates ......................................................................................................................6-25 Assigning Templates .....................................................................................................................................6-26 Agenda...........................................................................................................................................................6-27 Defining Template Rules...............................................................................................................................6-28 Creating a New Assignment Rule..................................................................................................................6-30 Selecting Attribute Matching Criteria............................................................................................................6-31 Selecting Conditions for Rules ......................................................................................................................6-32 Assigning a Template to a Rule.....................................................................................................................6-33 Reordering Rules ...........................................................................................................................................6-34 Agenda...........................................................................................................................................................6-36 Print Management..........................................................................................................................................6-37 Printing Attachments .....................................................................................................................................6-39 Creating and Updating Page Setups...............................................................................................................6-40 Quiz ...............................................................................................................................................................6-41 Summary........................................................................................................................................................6-45
Credit Management.........................................................................................................................................7-1 Credit Management .......................................................................................................................................7-3 Objectives ......................................................................................................................................................7-4 Agenda...........................................................................................................................................................7-5 Setting Up Oracle Credit Management..........................................................................................................7-6 Define Credit Analysts ..................................................................................................................................7-7 Dynamic Credit Analyst Assignments...........................................................................................................7-8 Define Lookups .............................................................................................................................................7-9 Define System Options..................................................................................................................................7-10 Credit Data Point ...........................................................................................................................................7-11 Define Scoring Models ..................................................................................................................................7-12 Assign Automation Rules ..............................................................................................................................7-13 Credit Checklist .............................................................................................................................................7-14 Credit Usage Rule Sets ..................................................................................................................................7-15 Define Credit Hierarchies ..............................................................................................................................7-16 Define Customer Profile Classes ...................................................................................................................7-17 Customer Profile Classes: Credit Profile Tab...............................................................................................7-18 Assign Profile Class.......................................................................................................................................7-19 Agenda...........................................................................................................................................................7-20 Process Credit Reviews .................................................................................................................................7-21 Initiate a Credit Review.................................................................................................................................7-22 Collecting Credit Data ...................................................................................................................................7-23 Analyzing Credit Data ...................................................................................................................................7-24 Making a Recommendation...........................................................................................................................7-25 Implementing the Recommendation..............................................................................................................7-26 Multi-Period Financial Data Comparison......................................................................................................7-27 Automatic Assessment of Guarantors............................................................................................................7-28 Credit Decision Appeals ................................................................................................................................7-29 Agenda...........................................................................................................................................................7-30 Credit Management Application Workflow ..................................................................................................7-31 Oracle Approvals Management (AME).........................................................................................................7-32 Agenda...........................................................................................................................................................7-33
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R12.x Oracle Receivables Management Fundamentals Table of Contents vi
Review Credit Management Performance .....................................................................................................7-34 Agenda...........................................................................................................................................................7-35 Define Credit Hierarchies ..............................................................................................................................7-36 Identify a Credit Hierarchy............................................................................................................................7-37 Quiz ...............................................................................................................................................................7-38 Summary........................................................................................................................................................7-42
Implement Customer Invoicing......................................................................................................................8-1 Implement Customer Invoicing .....................................................................................................................8-3 Objectives ......................................................................................................................................................8-4 Agenda...........................................................................................................................................................8-5 Required Setup Steps for Transactions..........................................................................................................8-6 Receivables Transaction Types .....................................................................................................................8-8 Using Natural Application.............................................................................................................................8-10 Deposit Transaction Type..............................................................................................................................8-11 AutoAccounting ............................................................................................................................................8-12 Balance Forward Billing Cycle .....................................................................................................................8-14 Payment Terms..............................................................................................................................................8-16 Transaction Sources.......................................................................................................................................8-18 Remit-to Addresses........................................................................................................................................8-20 System Options Relating to Transactions......................................................................................................8-21 System Options Relating to Late Charges .....................................................................................................8-23 Miscellaneous System Options......................................................................................................................8-25 Profile Options...............................................................................................................................................8-27 Implementation Considerations for Transactions ..........................................................................................8-29 Implementation Considerations for Remit-To Addresses..............................................................................8-30 Optional Setup Steps for Customer Invoices .................................................................................................8-31 Salespeople ....................................................................................................................................................8-33 Standard Memo Lines....................................................................................................................................8-34 Setting Up Document Sequencing.................................................................................................................8-36 Setting Up Gapless Transaction Numbering..................................................................................................8-37 Setting Up Statements ...................................................................................................................................8-39 Balance Forward Bills ...................................................................................................................................8-40 Setting Up Balance Forward Billing..............................................................................................................8-41 Setting Up Tiered Interest Rates for Late Charges ........................................................................................8-43 Overview of Transaction Printing Views ......................................................................................................8-45 Transaction Printing Views ...........................................................................................................................8-46 Agenda...........................................................................................................................................................8-47 Define Transaction Types in Order ...............................................................................................................8-48 Implementation Considerations for Document Sequencing Enhancements ..................................................8-49 Function Security...........................................................................................................................................8-50 Quiz ...............................................................................................................................................................8-51 Summary........................................................................................................................................................8-55
Receipts.............................................................................................................................................................9-1 Receipts .........................................................................................................................................................9-3 Objectives ......................................................................................................................................................9-4 Agenda...........................................................................................................................................................9-5 Oracle Receivables Overview........................................................................................................................9-7 Overview of Receipts ....................................................................................................................................9-8 Receipt Creation ............................................................................................................................................9-9 Receipt Statuses.............................................................................................................................................9-10 Manual Receipt Entry Process.......................................................................................................................9-11 Receipt Types ................................................................................................................................................9-12 Manual Receipts versus QuickCash Receipts................................................................................................9-14 Creating Batches............................................................................................................................................9-15 Validating Receipts in Batches ......................................................................................................................9-16 Batch Statuses................................................................................................................................................9-17
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R12.x Oracle Receivables Management Fundamentals Table of Contents vii
Agenda...........................................................................................................................................................9-18 Applying Batch Receipts ...............................................................................................................................9-19 Applying Receipts to an Invoice....................................................................................................................9-20 Applying Receipts at Line Level ...................................................................................................................9-21 Applications Window....................................................................................................................................9-23 Criteria for Mass Applying Receipts .............................................................................................................9-25 AP/AR Netting ..............................................................................................................................................9-26 Prepayments ..................................................................................................................................................9-27 Cross Currency Receipts ...............................................................................................................................9-29 Entering Discounts ........................................................................................................................................9-30 Agenda...........................................................................................................................................................9-31 Chargebacks and Adjustments.......................................................................................................................9-32 Chargebacks and Adjustments against Transactions .....................................................................................9-33 Chargebacks against Receipts........................................................................................................................9-34 Creating a Chargeback...................................................................................................................................9-35 Credit Card Chargebacks...............................................................................................................................9-36 Working with Claims.....................................................................................................................................9-38 Creating Claims .............................................................................................................................................9-39 Automatic Claim Creation Through Lockbox and Quickcash.......................................................................9-40 Resolving Claims...........................................................................................................................................9-41 Automated Settlement Methods Effectively Settle Deductions.....................................................................9-42 Resolving Claims Not Associated to an Invoice............................................................................................9-44 Vendor Claims on Credit Card Chargebacks.................................................................................................9-45 Resolving a Split Claim.................................................................................................................................9-47 Agenda...........................................................................................................................................................9-49 Balancing Segments ......................................................................................................................................9-50 Deriving Balancing Segment Values.............................................................................................................9-51 Disabling the Balancing Segment Substitution Process for Activities ..........................................................9-52 AR: Disable Receivable Activity Balancing Segment Substitution ..............................................................9-53 Agenda...........................................................................................................................................................9-54 Lockboxes......................................................................................................................................................9-55 Using AutoLockbox ......................................................................................................................................9-56 Lockbox Integration ......................................................................................................................................9-57 Historical Data Conversion............................................................................................................................9-58 AutoLockbox Process....................................................................................................................................9-59 AutoLockbox Process Flow...........................................................................................................................9-61 AutoLockbox Validation ...............................................................................................................................9-62 AutoLockbox and Customer Identification ...................................................................................................9-64 AutoLockbox Transmissions .........................................................................................................................9-65 Applying Receipts using AutoLockbox.........................................................................................................9-66 Creating Claims Using AutoLockbox............................................................................................................9-68 Importing and Applying Cross Currency Receipts ........................................................................................9-70 Lockbox Execution Report ............................................................................................................................9-71 Receipt to Receipt Applications ....................................................................................................................9-72 Automated Receipt Handling for Credits ......................................................................................................9-74 Automatic Receipts........................................................................................................................................9-75 Bank Remittance Process ..............................................................................................................................9-76 Creating Automatic Receipts .........................................................................................................................9-77 Automatic Receipts and Remittance Process Overview ................................................................................9-78 Credit Cards...................................................................................................................................................9-79 Processing Credit Card Refunds....................................................................................................................9-81 Processing Credit Card Transactions.............................................................................................................9-82 Creating Credit Card Transactions ................................................................................................................9-83 Credit Card Refunds ......................................................................................................................................9-84 Quiz ...............................................................................................................................................................9-86 Summary........................................................................................................................................................9-90
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R12.x Oracle Receivables Management Fundamentals Table of Contents viii
Implement Receipts .........................................................................................................................................10-1 Implement Receipts .......................................................................................................................................10-3 Objectives ......................................................................................................................................................10-4 Agenda...........................................................................................................................................................10-5 Overview of Receipt Setup............................................................................................................................10-6 Receivables Activity Types ...........................................................................................................................10-7 Receivables Activity Setup............................................................................................................................10-9 Receivables Activity Example.......................................................................................................................10-11 Receipt Class, Receipt Method, and Bank Account Relationship ...............................................................10-12 Defining Remittance Banks and Bank Accounts...........................................................................................10-13 Defining Receipt Classes...............................................................................................................................10-14 Associating a Bank Account With a Receipt Method....................................................................................10-16 Defining Receipt Sources ..............................................................................................................................10-17 Defining AutoCash Rules ..............................................................................................................................10-18 Defining Application Rule Sets .....................................................................................................................10-20 Setting Up Cross Currency Receipts .............................................................................................................10-21 System Options for Receipt Accounting .......................................................................................................10-22 Miscellaneous System Options Relating to Receipts....................................................................................10-23 Profile Options...............................................................................................................................................10-25 Agenda...........................................................................................................................................................10-27 Implementation Considerations for Receipts.................................................................................................10-28 Other Implementation Considerations for Receipts.......................................................................................10-29 Setting Up Lockboxes ...................................................................................................................................10-30 Function Security...........................................................................................................................................10-31 Quiz ...............................................................................................................................................................10-32 Summary........................................................................................................................................................10-36
Tax Processing .................................................................................................................................................11-1 Tax Processing...............................................................................................................................................11-3 Objectives ......................................................................................................................................................11-4 Agenda...........................................................................................................................................................11-5 Oracle E-Business Tax Architecture Overview.............................................................................................11-6 Oracle E-Business Tax Key Concepts And Examples...................................................................................11-7 Calculating Tax on Transactions ...................................................................................................................11-10 Calculating Tax Using the Tax Classification Code......................................................................................11-11 Global Tax Overview ....................................................................................................................................11-12 Tax Overview ................................................................................................................................................11-14 Value Added Tax Overview ..........................................................................................................................11-15 US Sales Tax Overview.................................................................................................................................11-16 Tax Partner Process Overview.......................................................................................................................11-17 Agenda...........................................................................................................................................................11-18 Setting Up Receivables for Tax Calculation..................................................................................................11-19 Defining Transaction Types and Tax Exemptions.........................................................................................11-21 Defining AutoAccounting for Tax.................................................................................................................11-23 Enabling Calculation of Tax on Freight ........................................................................................................11-24 Defining E-Business Tax Profile Options for Receivables............................................................................11-25 Defining E-Business Tax Profile Options for Order Management ................................................................11-27 Agenda...........................................................................................................................................................11-29 Tax Accounting Overview.............................................................................................................................11-30 Setting Up Tax Accounting for Deferred Tax ...............................................................................................11-31 Defining Receivables Activities ....................................................................................................................11-32 Updating the Tax Rate on Transactions.........................................................................................................11-34 Adjusting Tax on Invoices.............................................................................................................................11-35 Tax Credit Memo...........................................................................................................................................11-36 Quiz ...............................................................................................................................................................11-38 Summary........................................................................................................................................................11-42
Period Closing Process ....................................................................................................................................12-1
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R12.x Oracle Receivables Management Fundamentals Table of Contents ix
Period Closing Process ..................................................................................................................................12-3 Objectives ......................................................................................................................................................12-4 Agenda...........................................................................................................................................................12-5 Overview of Accounting and Receivables.....................................................................................................12-6 Oracle Subledger Accounting........................................................................................................................12-7 Oracle Subledger Accounting Integration .....................................................................................................12-8 Subledger Accounting Key Concepts ............................................................................................................12-10 Subledger Accounting Receivables Accounting Event Model .....................................................................12-11 Subledger Accounting Setup and Process .....................................................................................................12-12 Agenda...........................................................................................................................................................12-13 Receivables Period Closing Process ..............................................................................................................12-14 Overview of Ordering to Period Closing.......................................................................................................12-15 Agenda...........................................................................................................................................................12-16 Standard Reports ...........................................................................................................................................12-17 Agenda...........................................................................................................................................................12-18 Reconciling Receivables................................................................................................................................12-19 Transferring to General Ledger .....................................................................................................................12-21 Running the Journal Import Program ............................................................................................................12-22 Mapping Receivables Transactions to General Ledger Categories ...............................................................12-23 Running Revenue Recognition ......................................................................................................................12-24 Quiz ...............................................................................................................................................................12-25 Summary........................................................................................................................................................12-29
Appendix A: Bank Reconciliation..................................................................................................................13-1 Appendix A - Bank Reconciliation................................................................................................................13-3 Course Objectives..........................................................................................................................................13-4 Agenda...........................................................................................................................................................13-6 Reconciliation Overview ...............................................................................................................................13-8 Reconciliation Integration .............................................................................................................................13-9 Reconciliation: Oracle Receivables and Oracle Payables..............................................................................13-10 Functions with Receivables ...........................................................................................................................13-11 Oracle General Ledger and Payroll ...............................................................................................................13-12 Reconciliation of Oracle Payroll EFT Payments ..........................................................................................13-13 AutoReconciliation Overview .......................................................................................................................13-14 Load Bank Statements ...................................................................................................................................13-15 Agenda...........................................................................................................................................................13-16 Setting Up Oracle Cash Management and Related Products .........................................................................13-17 Setting Up Oracle Cash Management System Parameters ............................................................................13-18 Setting Up Oracle Cash Management Bank Transaction Codes....................................................................13-20 Agenda...........................................................................................................................................................13-21 Bank Statement Open Interface .....................................................................................................................13-22 Importing Bank Statements ...........................................................................................................................13-25 Bank Statement Validation ............................................................................................................................13-26 Bank Statement Interface Errors....................................................................................................................13-27 Setup for Bank Statement Open Interface .....................................................................................................13-28 Agenda...........................................................................................................................................................13-29 Entering Bank Statements Manually .............................................................................................................13-30 Entering Bank Statement Information Manually...........................................................................................13-31 Agenda...........................................................................................................................................................13-32 Archiving and Purging...................................................................................................................................13-33 Archiving and Purging Automatically...........................................................................................................13-35 Agenda...........................................................................................................................................................13-36 Reconciling Bank Statements Automatically ................................................................................................13-37 Agenda...........................................................................................................................................................13-39 Reconciling Bank Statements Manually........................................................................................................13-40 Creating Miscellaneous Transactions ............................................................................................................13-41 Recording a Bank Transmission Error...........................................................................................................13-42
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R12.x Oracle Receivables Management Fundamentals Table of Contents x
Recording Transactions from External Systems...........................................................................................13-43 Reconciliation Open Interface .......................................................................................................................13-44 Agenda...........................................................................................................................................................13-45 Manually Clearing and Unclearing................................................................................................................13-46 Clearing and Reconciling Transactions in Oracle Payables .........................................................................13-47 Clearing and Reconciling Transactions in Oracle Receivables ....................................................................13-48 Transferring Bank Reconciliation Transactions to Your General Ledger .....................................................13-49 Agenda...........................................................................................................................................................13-50 Recording Exceptions....................................................................................................................................13-51 Handling Non-Sufficient Funds (NSF) Using AutoReconciliation ...............................................................13-52 Handling Non-Sufficient Funds (NSF) or Rejected Receipts Manually........................................................13-53 Recording a Stopped Payment.......................................................................................................................13-54 Recording a Direct Debit from a Supplier .....................................................................................................13-55 Entering Reversals.........................................................................................................................................13-56 Reconciling Corrections and Adjustments to Bank Errors ............................................................................13-57 AutoReconciliation Matching........................................................................................................................13-58 AutoReconciliation Matching: Reversal Method ..........................................................................................13-59 AutoReconciliation Matching: Adjustment Method......................................................................................13-60 Manual Reconciliation Matching ..................................................................................................................13-61 Agenda...........................................................................................................................................................13-62 Value Date Support .......................................................................................................................................13-63 Value Date Support in Oracle Payables and Oracle Receivables ..................................................................13-64 Agenda...........................................................................................................................................................13-66 Oracle Cash Management Reports ................................................................................................................13-67 Archive/Purge Bank Statements Report ........................................................................................................13-68 AutoReconciliation Execution Report ...........................................................................................................13-69 Bank Statement Detail Report .......................................................................................................................13-70 Bank Statement Summary Report .................................................................................................................13-71 Bank Statements by Document Number Report...........................................................................................13-72 GL Reconciliation Report..............................................................................................................................13-73 Cash in Transit Report ...................................................................................................................................13-74 Cleared Transactions Report..........................................................................................................................13-75 Transactions Available for Reconciliation Report........................................................................................13-76 Batches Available for Reconciliation Report ................................................................................................13-77 Bank Transaction Codes Listing....................................................................................................................13-78 Cash Application Work Queue......................................................................................................................13-79 Cash Application Work Queue (continued)...................................................................................................13-80 Work Load Review Report............................................................................................................................13-82 Summary........................................................................................................................................................13-83
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R12.x Oracle Receivables Management Fundamentals Table of Contents xi
Preface
Profile
Before You Begin This Course
• Thorough knowledge of Oracle Applications.
• Working experience with Accounts Receivables.
Prerequisites
• There are no prerequisites for this course.
How This Course Is Organized
R12 Oracle Receivables Management Fundamentals is an instructor-led course featuring lecture and hands-on exercises. Online demonstrations and written practice sessions reinforce the concepts and skills introduced.
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R12.x Oracle Receivables Management Fundamentals Table of Contents xi i
Related Publications
Oracle Publications Title Part Number
Oracle Receivables User Guide E13522-03
Oracle Receivables Implementation Guide E13510-03
Oracle Receivables Reference Guide E13512-03
Oracle E-Business Tax User Guide E13631-02
Oracle E-Business Tax Implementation Guide E13629-02
Oracle E-Business Tax Reporting Guide E13630-02
Additional Publications
• System release bulletins
• Installation and user’s guides
• Read-me files
• International Oracle User’s Group (IOUG) articles
• Oracle Magazine
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R12.x Oracle Receivables Management Fundamentals Table of Contents xi ii
Typographic Conventions
Typographic Conventions in Text Convention Element Example Bold italic Glossary term (if
there is a glossary) The algorithm inserts the new key.
Caps and lowercase
Buttons, check boxes, triggers, windows
Click the Executable button. Select the Can’t Delete Card check box. Assign a When-Validate-Item trigger to the ORD block. Open the Master Schedule window.
Courier new, case sensitive (default is lowercase)
Code output, directory names, filenames, passwords, pathnames, URLs, user input, usernames
Code output: debug.set (‘I”, 300); Directory: bin (DOS), $FMHOME (UNIX) Filename: Locate the init.ora file. Password: User tiger as your password. Pathname: Open c:\my_docs\projects URL: Go to http://www.oracle.com User input: Enter 300 Username: Log on as scott
Initial cap Graphics labels (unless the term is a proper noun)
Customer address (but Oracle Payables)
Italic Emphasized words and phrases, titles of books and courses, variables
Do not save changes to the database. For further information, see Oracle7 Server SQL Language Reference Manual. Enter [email protected], where user_id is the name of the user.
Quotation marks
Interface elements with long names that have only initial caps; lesson and chapter titles in cross-references
Select “Include a reusable module component” and click Finish. This subject is covered in Unit II, Lesson 3, “Working with Objects.”
Uppercase SQL column names, commands, functions, schemas, table names
Use the SELECT command to view information stored in the LAST_NAME column of the EMP table.
Arrow Menu paths Select File > Save. Brackets Key names Press [Enter]. Commas Key sequences Press and release keys one at a time:
[Alternate], [F], [D] Plus signs Key combinations Press and hold these keys simultaneously: [Ctrl]+[Alt]+[Del]
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R12.x Oracle Receivables Management Fundamentals Table of Contents xiv
Typographic Conventions in Code Convention Element Example Caps and lowercase
Oracle Forms triggers
When-Validate-Item
Lowercase Column names, table names
SELECT last_name FROM s_emp;
Passwords DROP USER scott IDENTIFIED BY tiger;
PL/SQL objects OG_ACTIVATE_LAYER (OG_GET_LAYER (‘prod_pie_layer’))
Lowercase italic
Syntax variables CREATE ROLE role
Uppercase SQL commands and functions
SELECT userid FROM emp;
Typographic Conventions in Oracle Application Navigation Paths
This course uses simplified navigation paths, such as the following example, to direct you through Oracle Applications.
(N) Invoice > Entry > Invoice Batches Summary (M) Query > Find (B) Approve
This simplified path translates to the following:
1. (N) From the Navigator window, select Invoice then Entry then Invoice Batches Summary.
2. (M) From the menu, select Query then Find.
3. (B) Click the Approve button.
Notations:
(N) = Navigator
(M) = Menu
(T) = Tab
(B) = Button
(I) = Icon
(H) = Hyperlink
(ST) = Sub Tab
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R12.x Oracle Receivables Management Fundamentals Table of Contents xv
Typographical Conventions in Oracle Application Help System Paths
This course uses a “navigation path” convention to represent actions you perform to find pertinent information in the Oracle Applications Help System.
The following help navigation path, for example—
(Help) General Ledger > Journals > Enter Journals
— represents the following sequence of actions:
1. In the navigation frame of the help system window, expand the General Ledger entry.
2. Under the General Ledger entry, expand Journals.
3. Under Journals, select Enter Journals.
4. Review the Enter Journals topic that appears in the document frame of the help system window.
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R12.x Oracle Receivables Management Fundamentals Table of Contents xv i
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Credit Management Chapter 7 - Page 1
Credit Management Chapter 7
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Credit Management Chapter 7 - Page 2
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Credit Management Chapter 7 - Page 3
Credit Management
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Credit Management Chapter 7 - Page 4
Objectives
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Credit Management Chapter 7 - Page 5
Agenda
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Credit Management Chapter 7 - Page 6
Setting Up Oracle Credit Management
Setting Up Oracle Credit Management
Credit policies are uniquely identified by the type of credit reviews that you perform at your enterprise, as well as by the credit relationships that you have with your customers and prospects. These two dimensions, known as the credit review type and credit classification, constitute the foundation upon which Oracle Credit Management is based. To set up Credit Management, you must:
• Define credit analysts • Assign credit analysts to accounts • Define Credit Management lookups • Define Credit Management system options • Define scoring models • Assign automation rules (optional) • Define checklists • Verify usage rules • Define the credit hierarchy for your customers and prospects
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Credit Management Chapter 7 - Page 7
Define Credit Analysts
Define Credit Analysts
You use Resource Manager to enter information about the credit analysts in your enterprise. Credit analysts assist in the resolution of credit-related issues and evaluate the creditworthiness of your customers and prospects. Before you can define credit analysts in Resource Manager, you must first define them as employees in the Oracle Human Resources Management System (HRMS). Later, when you are ready to define your credit analysts, you import employees from HRMS into Resource Manager and assign roles. After you define a credit analyst, you can modify any of the analyst’s information, except the employee and user names. Note: You can assign the credit manager role to a credit analyst. A credit manager has access to setup functionality. Non-Employees Non-employees can also initiate (from an application outside Credit Management) the creation of credit applications. Non-employees are users who are not in Oracle HRMS and who are not assigned a credit analyst role in Resource Manager. For example, a non-employee might be a vendor or a contractor.
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Credit Management Chapter 7 - Page 8
Dynamic Credit Analyst Assignments
Dynamic Credit Analyst Assignments
• You can specify a default credit analyst in cases where no credit analyst rules are defined.
• You can create credit analyst assignment rules. In the rule, you must specify the criteria of the credit reviews and the credit analyst assigned to these credit reviews.
• You can put the rules in order, if there are multiple rules created. The credit analyst is assigned according to the sequential order of the rules.
• You can test the created rules. O
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Credit Management Chapter 7 - Page 9
Define Lookups
Define Lookups
For example, to identify an applicant’s potential credit risk, you must select a credit classification and credit review type, if not previously assigned, when entering a credit application. The credit classification describes the type of credit relationship that you have with the applicant. Credit Management provides you with High Risk, Low Risk, and Moderate Risk, but you can optionally define new credit classifications to fit your business needs. The credit review type refers to the type of credit reviews that you perform at your enterprise, such as Credit Checking, Periodic Credit Review, or Lease Application. You use the Oracle Receivables Lookups window to define any additional lookups that you require.
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Credit Management Chapter 7 - Page 10
Define System Options
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Credit Management Chapter 7 - Page 11
Credit Data Point
Credit Data Point
Credit Management extracts various credit data points from the following sources to assess the creditworthiness of your customers and prospects. Seeded Data Points These data points are extracted from other applications in the E-Business Suite, such as Oracle Receivables and Oracle Order Management. Dun and Bradstreet Data Points You can purchase credit information from Dun & Bradstreet and include D&B data points in credit reviews. User-Defined Data Points Internal - You can define additional data points and associate a PL/SQL package and function to derive a value for that data point. External - You can include data points from other sources from outside the E-Business Suite, such as credit bureaus that are not currently integrated with Credit Management. Note: You must manually enter the External Data point values.
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Credit Management Chapter 7 - Page 12
Define Scoring Models
Define Scoring Models
A scoring model consists of a group of data points, with scored ranges and a relative weighting factor for each data point. During a credit analysis, Credit Management calculates a score from 0 to 100, with 0 representing the most risk and 100 representing the least risk. You can also calculate the scores without assigning weights to the data points. The View Scoring Models page displays a table of all existing scoring models. You can view and update the scoring models by clicking the respective inline icons, or you can define a new scoring model. You can treat null data point values as zero, which prevents the scoring process from failing when null data point values are encountered. You can assign a default scoring model to a credit checklist. Alternatively, you can generate various “what-if” scenarios during a credit review by selecting different scoring models from the case folder.
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Credit Management Chapter 7 - Page 13
Assign Automation Rules
Assign Automation Rules
For any scoring model, you can define a set of automation rules to guide the implementation of credit decisions without user intervention. Such automation is preferable when the credit risk, as defined by your enterprise’s credit policies, is minimal. Automation rules base credit decisions upon the credit score that the assigned scoring model calculates. For each automation rule, you define recommendations for a related credit score range. For example, if the credit score is below 50, you might want to automatically reject a credit request. The Automation Rules page provides you with an overview of all scoring models for which a set of automation rules is defined. You can view and update existing sets of automation rules by clicking the respective inline icons, or you can create a new set. Note: This step is optional.
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Credit Management Chapter 7 - Page 14
Credit Checklist
Credit Checklist
For example, when a high risk customer seeks to increase its credit limit with your enterprise, your credit policies might dictate a conservative approach until this customer relationship is more established. In this scenario, you would use a conservative checklist to determine whether to grant additional credit and what the credit limit should be. The flexible setup procedures that follow reflect Credit Management’s ability to meet the demands of your enterprise’s particular credit policies.
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Credit Management Chapter 7 - Page 15
Credit Usage Rule Sets
Credit Usage Rule Sets
Credit usage rule sets define the set of currencies that will share a predefined credit limit during the credit checking process, and enable the grouping of currencies for global credit checking. For example, if a customer is assigned the Default profile class with a credit usage rule set that includes USD, EUR, and CAD, then any transactions in those currencies are included in that customer’s case folder for data points, such as Count of Open Invoices or Amount of Open Invoices.
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Credit Management Chapter 7 - Page 16
Define Credit Hierarchies
Define Credit Hierarchies
To provide global credit limits that are shared by some or all entities within a complex, multinational enterprise, you can define credit relationships between parties using Oracle Trading Community Architecture (TCA) Relationship Manager. You can define a credit hierarchy of parties, party relationships, hierarchy levels, accounts, and account sites. Typically, the party object and party subject in a credit relationship represent a parent and child, or HQ and division hierarchy. For each entity in the hierarchy, you can view credit information, such as credit hold status, credit limits by currency, and credit review cycle. Using Relationship Manager, you assign to your entities an existing relationship type, such as Global Ultimate, or your own user-defined Credit Management relationship type. You then link the relationships to Credit Management by assigning the relationship type to the AR: Credit Hierarchy Type profile option. When you conduct a credit review for an entity that has hierarchical relationships, Credit Management consolidates and displays all data for the entire hierarchy.
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Credit Management Chapter 7 - Page 17
Define Customer Profile Classes
Define Customer Profile Classes
You can also define amount limits for your late charges, dunning, and statements for each currency in which you do business. Define your standard customer profiles in the Customer Profile Classes window. These profiles contain generic options you can use to group your customers into broad categories. For example, you might define three categories: one for prompt paying customers; one for late paying customers with high finance charge rates; and a third for customers who mostly pay on time, with discount incentives for early payment. You can also use the Receivables profile class DEFAULT.
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Credit Management Chapter 7 - Page 18
Customer Profile Classes: Credit Profile Tab
Customer Profile Classes: Credit Profile Tab
Periodic Review Cycle • Defines the frequency of automatic reviews for a customer. Note: Eligible reviews are processed through the Periodic Review Cycle concurrent
program. Credit Analyst
• The credit analyst automatically is assigned to all parties, accounts, and sites which have this profile class.
Credit Tolerance • The percentage upon which credit exposure is exceeded before an order will be placed
on credit holds. Credit holds automatically submit a credit request.
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Credit Management Chapter 7 - Page 19
Assign Profile Class
Assign Profile Class
You assign a profile class to a customer on the Create Customer page. The profile class assigned at the customer level defaults at the account level. If a profile class is assigned to a customer and to an account or account site of the same customer, the options set at the account or account site level take precedence over those set at the customer level. Use the Account Profile subtab of the Account Overview page to customize the default profile class values at the account level to meet specific requirements for each account. You can also use the Account Profile subtab to assign a new profile class at the account level. Use the Profile subtab of the Account Site Overview page to replace the DEFAULT profile class with an appropriate profile class. You can also use the Profile subtab to customize the default profile class values at the account site level. Note: To use the site level credit profile amounts instead of the customer level profile, set the AR: Use Statement, Dunning, and Late Charges Site Profiles profile option to Yes.
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Credit Management Chapter 7 - Page 20
Agenda
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Credit Management Chapter 7 - Page 21
Process Credit Reviews
Process Credit Reviews
During the credit review, the Credit Management Application workflow manages the process flow of credit data collection and analysis, as well as the implementation of credit decisions. In addition, Credit Management provides various tools that you can use to determine if your credit policies are effective. O
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Credit Management Chapter 7 - Page 22
Initiate a Credit Review
Initiate a Credit Review
For example, if a sales order is put on credit hold, then the credit hold process in Order Management passes this information to the Credit Review Request API, which automatically initiates a credit review. Other events, such as a quarterly review, can also trigger a credit review. Note: You can also use the Credit Review Request API to initiate a credit review from a non-Oracle system.
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Credit Management Chapter 7 - Page 23
Collecting Credit Data
Collecting Credit Data
The credit checklist indicates which data points are required for different types of credit analyses and decisions, and can optionally indicate which scoring model will be used for the review. In this way, the checklist enforces your enterprise’s credit policies. If the checklist identifies required data points that already exist within Oracle Applications or that can be calculated by the system, such as available credit, aging, and so on, then Credit Management automatically inserts that information directly into the credit application and case folder. If the checklist requires data points that must be manually supplied, such as bank and trade references, then a credit analyst must enter the required data into the credit application or case folder.
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Credit Management Chapter 7 - Page 24
Analyzing Credit Data
Analyzing Credit Data
The Credit Analysis data pages comprise the universe of data points for the applicant. The Credit Analysis data pages that are available from the Analysis tab are:
• Credit Analysis: Case Folder • Credit Analysis: Credit Summary • Credit Analysis: Billing and Payment Details • Credit Analysis: Aging Details
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Credit Management Chapter 7 - Page 25
Making a Recommendation
Making a Recommendation
Credit Management recommendations are user-extensible Receivables lookup codes. Calling applications can add their specific recommendation and associate a form function to the recommendation. During the credit review process, upon selection of this recommendation the calling application calls the form function to present pages to the user to enter data that is stored in the calling application. Generally, a recommendation is specific to the type of review that was just concluded. For example, a credit review that was originally initiated by an order hold would most likely result in a recommendation to either:
• Increase the credit limit to accommodate the amount of the order and remove the order from hold; or
• Deny the request for an increase in the credit limit and leave the order on hold.
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Credit Management Chapter 7 - Page 26
Implementing the Recommendation
Implementing the Recommendation
Receivables automatically implements the recommendation after all required parties have approved it. For example, if the recommendation indicates that the order should be removed from credit hold, then the workflow will call the Remove Credit Hold API and pass the necessary information, such as order ID, account ID, and so on, to initiate the process.
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Credit Management Chapter 7 - Page 27
Multi-Period Financial Data Comparison
Multi-Period Financial Data Comparison
Enter multi-period financial data in the credit application (case folder) or credit request window in the calling application. This allows you to compare multi-period financial data.
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Credit Management Chapter 7 - Page 28
Automatic Assessment of Guarantors
Automatic Assessment of Guarantors
If the credit review request submitted by the source application has a guarantor, then Credit Management provides the ability to perform a credit review and assess the credit worthiness of the guarantor. Separate case folders are created for the original credit request and the guarantor. Links are provided in the case folder for users to cross reference and drill down to view borrower or guarantor details.
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Credit Management Chapter 7 - Page 29
Credit Decision Appeals
Credit Decision Appeals
Resubmission The resubmission creates a new credit request, which undergoes the same general process in Credit Management as the original request. Withdraw At any point, you can withdraw your application. The withdrawal of an application suspends at once all activities related to credit application, analysis, decision, and approval.
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Credit Management Chapter 7 - Page 30
Agenda
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Credit Management Chapter 7 - Page 31
Credit Management Application Workflow
Credit Management Application Workflow
For each credit review, the workflow checks the automation rules that you previously defined: • If the credit review is automated, then the workflow attempts to automatically make and
implement credit decisions without user intervention. • If the workflow stops due to conditions such as missing data, then the workflow routes
notifications to the appropriate credit analyst for resolution. • If a credit analyst was never assigned because the credit review was automated, then
the workflow notifies the user with the Credit Scheduler responsibility that a credit analyst must be assigned. The Credit Scheduler can select the credit analyst to be assigned from the list of values. The assigned credit analyst then receives a notification that there is a credit request in analyst’s queue.
• If the credit review is not automated, then the workflow assigns the credit review to the appropriate credit analyst and notifies the analyst about the assignment.
• With unautomated credit reviews, credit analysts make recommendations, such as increasing or decreasing the credit limit, after performing the credit analysis.
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Credit Management Chapter 7 - Page 32
Oracle Approvals Management (AME)
Oracle Approvals Management (AME)
Once you define the rules for a given application, the Oracle Approvals Management Engine manages the approvals for that application’s transactions. If approval is required, then the workflow routes notifications according to the approval hierarchy:
• If the recommendation is approved by the appropriate personnel, then the workflow automatically implements the decision.
• If the recommendation is rejected as it is routed through the approval hierarchy, then the workflow sends notifications to the appropriate personnel and updates the case folder.
If a credit analyst cannot be identified, then the workflow notifies the person assigned to the Credit Scheduler role that a credit analyst assignment is required. The Credit Scheduler is a role used in Credit Management to assign credit tasks to credit analysts.
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Credit Management Chapter 7 - Page 33
Agenda
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Credit Management Chapter 7 - Page 34
Review Credit Management Performance
Review Credit Management Performance
On the Performance tab, you can access simple views that indicate the workload and effectiveness of the checklists and scoring models that you have set up and used in credit reviews, including:
• Credit Workload Quick Check • Top 10 Customer Credit Exposure • Customer Trends (Pay Trend) • Checklist Usage by Month • Scoring Model Usage by Month
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Credit Management Chapter 7 - Page 35
Agenda
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Credit Management Chapter 7 - Page 36
Define Credit Hierarchies
Define Credit Hierarchies
Relationship Manager lets you easily build, view, and edit relationships between entities. Using Relationship Manager, you can:
• View a single party and all its relationships • Create new relationships and edit existing relationships • Focus on a particular portion of a hierarchy and edit the hierarchical structure
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Credit Management Chapter 7 - Page 37
Identify a Credit Hierarchy
Identify a Credit Hierarchy
Using Relationship Manager, you assign to your entities an existing relationship type, such as Global Ultimate, or your own user-defined Credit Management relationship type. You then link the relationships to Credit Management by assigning the relationship type to the AR: Credit Hierarchy Type profile option. When you conduct a credit review for an entity that has hierarchical relationships, Credit Management consolidates and displays all data for the entire hierarchy.
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Credit Management Chapter 7 - Page 38
Quiz
Answers: 2 Quiz Specifications
• The correct answer is “There are three key setup processes in Credit Management, namely, Credit Policy Identification, Credit Scoring Calculations, and Credit Recommendations”.
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Credit Management Chapter 7 - Page 39
Quiz
Answers: 1, 3, 4 Quiz Specifications
• The correct answer is “The Assess Late Charges system option is not used for Credit Management”. O
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Credit Management Chapter 7 - Page 40
Quiz
Answers: 2 Quiz Specifications
• The correct answer is “During a credit analysis, Credit Management calculates a score from 0 to 100, with 0 representing the most risk and 100 representing the least risk”. O
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Credit Management Chapter 7 - Page 41
Quiz
Answers: 2, 3, 4 Quiz Specifications
• The correct answer is “The following views can be accessed from the Performance tab: Credit Workload Quick Check, Top 10 Customer Credit Exposure, Customer Trends (Pay Trend), Checklist Usage by Month, and Scoring Model Usage by Month”.
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Credit Management Chapter 7 - Page 42
Summary
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Implement Customer Invoicing Chapter 8 - Page 1
Implement Customer Invoicing Chapter 8
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Implement Customer Invoicing Chapter 8 - Page 2
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Implement Customer Invoicing Chapter 8 - Page 3
Implement Customer Invoicing
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Implement Customer Invoicing Chapter 8 - Page 4
Objectives
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Implement Customer Invoicing Chapter 8 - Page 5
Agenda
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Implement Customer Invoicing Chapter 8 - Page 6
Required Setup Steps for Transactions
Required Setup Steps for Transactions
Before you can use customer invoices, you must complete these setups: • Customers: Define customers, including Bill To and Ship To addresses, for transaction
processing. Enable Balance Forward Billing at the customer profile class level, and at the account and site profile levels, to send one balance forward bill to a customer for a billing period. A balance forward bill includes all of a customer’s transactions (with balance forward billing payment terms) for the billing period and any balance carried forward from the previous billing period. You can generate balance forward bills consolidated at either the customer account or site level, depending on whether you selected account or site as the bill level in the customer profile class and account profile. See: Manage Parties and Customer Accounts for detailed information about setting up customer records.
• Receivables Transaction Types: Transaction types add default information to transactions.
• AutoAccounting: Specify the General Ledger accounts for transactions that you enter manually or import using AutoInvoice.
• Payment Terms: Determine the payment schedule and cash discount information for customer invoices, debit memos, and commitments. You need to define balance forward billing payment terms to use the balance forward billing feature.
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Implement Customer Invoicing Chapter 8 - Page 7
• Transaction Sources: Transaction sources control transaction and batch numbering and provide default information.
• Remit-to addresses: Inform customers where to send payments. • System and Profile Options: Provide default values for some Receivables operations,
such as how Receivables processes data and controls the actions users can perform.
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Implement Customer Invoicing Chapter 8 - Page 8
Receivables Transaction Types
Receivables Transaction Types
Receivables, Vision Operations (USA) (N) Setup > Transactions > Transaction Types Use transaction types to define the accounting for Receivables debit memos, credit memos, on-account credits, chargebacks, commitments, invoices, and bills receivable. Transaction types can be used to default the legal entity to the transaction. Transaction types also determine whether your transaction entries update your customer balances and whether Receivables posts these transactions to general ledger. You must set up transaction types before you can enter invoices. Transaction types determine:
• Transaction class: debit memo, credit memo, on-account credit, chargeback, commitment, invoice, bills receivable.
• Natural application setting. • If the transaction can be posted to General Ledger (GL).
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Implement Customer Invoicing Chapter 8 - Page 9
• If the transaction is an open receivable, that is, updates customer balances for debit memos, credit memos, chargebacks, and on-account credits.
• If the transaction excludes late charges. • If freight can be entered. • If a tax classification code defaults to the transaction line. • Default credit memo type for an invoice. • Default invoice type for a commitment. • Creation sign.
Legal Entity Defaulting If you are using a shared accounting environment, you can optionally assign a legal entity to a transaction type to default to the transaction. Receivables looks first to the transaction type for a legal entity to default to the transaction. If a legal entity has not been assigned to the transaction type, then Receivables looks to the transaction batch source for the legal entity. If Receivables cannot find a default legal entity, then the user must enter the legal entity on the transaction line. The legal entities available for selection on the transaction type, transaction batch source, and transaction line are the legal entities assigned to the ledger that is assigned to the active operating unit. If you are using an exclusive accounting environment, with one legal entity only assigned to the ledger, then you do not need to set up legal entity defaulting. Receivables defaults the legal entity to all transactions. Excluding Late Charge Calculation Select the Exclude from Late Charges Calculation checkbox either to exclude specific invoice types or to exclude your Interest Invoices if you do not want interest charged against them. Tax Classification Code Defaulting You can optionally enable the “Default tax classification” option on the transaction type to default a tax classification code to the transaction line. The defaulting and usage of tax classification codes is controlled by Oracle E-Business Tax. The tax classification code represents the tax code migrated from Release 11i tax content. You use tax classification codes as determining factors in tax calculation only when you choose to use the Release 11i tax model in E-Business Tax. See: Order to Cash: Tax Processing for more information about using tax classification codes. Note:
• For guarantees and deposits, the creation sign must be Positive. • You can update the Operating Unit field (and the legal entity associated with the
operating unit) with any operating unit assigned to your responsibility. O
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Implement Customer Invoicing Chapter 8 - Page 10
Using Natural Application
Using Natural Application
Applications to transactions are processed differently, depending on the natural application setting of the transaction type: Natural Application Only Selected, Allow Overapplication Clear.
• Receivables allows any application that reduces the transaction amount toward or to zero without changing the sign of the transaction.
• For example, if the transaction amount is +$500, Receivables allows the applications as shown in the top section of the diagram.
Natural Application Only Clear, Allow Overapplication Selected or Clear. • Receivables allows any application that either reduces or increases the transaction,
even if the application changes the sign of the transaction, as shown in the bottom section of the diagram.
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Implement Customer Invoicing Chapter 8 - Page 11
Deposit Transaction Type
Deposit Transaction Type
If you set the AR: Deposit Offset Account Source profile option to Transaction Type, then Receivables uses the Offset Account that you specify here to derive the offset account for deposits. Otherwise, Receivables uses AutoAccounting to derive the deposit offset account. O
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Implement Customer Invoicing Chapter 8 - Page 12
AutoAccounting
AutoAccounting
Receivables, Vision Operations (USA) (N) Setup > Transactions > AutoAccounting AutoAccounting is a powerful and flexible tool that automatically creates General Ledger accounting flexfields for Receivables transactions. When AutoAccounting is run, Receivables assigns valid accounting flexfields to invoices and credit memos and automatically generates valid accounting flexfields for Freight, Receivable, Revenue, AutoInvoice Clearing, Tax, Unbilled Receivable, and Unearned Revenue accounts. Note that the default accounting that AutoAccounting creates is considered interim accounting only. Oracle Subledger Accounting accepts the default accounts that AutoAccounting derives without change. If necessary, however, you can modify the accounting rules in Subledger Accounting to create accounting that meets your business requirements. AutoAccounting determines the General Ledger (GL) accounts for invoices by deriving a value for each segment of the accounting flexfield:
• When setting up AutoAccounting, rules define how Receivables should derive the value for each segment. This can either be a constant value or a table.
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Implement Customer Invoicing Chapter 8 - Page 13
• For each account type, define the flexfield segments by selecting a table name or entering a constant value. The tables that can be used for segment values are Transaction Types, Salesperson, Customer - Bill To, Standard Line, Freight (for Freight Account only), and Tax Rate Code.
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Implement Customer Invoicing Chapter 8 - Page 14
Balance Forward Billing Cycle
Balance Forward Billing Cycle
Receivables, Vision Operations (USA) (N) Setup > Print > Balance Forward Billing Cycles Balance forward billing cycles determine:
• Date that Receivables generates balance forward bills. • Transactions that are included in balance forward bills.
Define a balance forward billing cycle by entering its name, description, start date, and frequency in the Balance Forward Billing Cycles window. Depending on the frequency, a balance forward billing cycle can be daily, weekly, or monthly.
To define daily cycles: 1. Enter the number of days the billing should repeat. 2. (Optional) Select Exclude Saturdays and Sundays.
To define weekly cycles: 1. Enter the number of weeks the billing should repeat.
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Implement Customer Invoicing Chapter 8 - Page 15
2. Select the day of the week the billing should occur. To define monthly cycles:
1. Enter the number of months the billing should repeat. 2. Select the day of the month the billing should occur. Billing can occur on more than one
day. For cycles with a billing day between 29 and 31, Receivables considers the last day of the month as the billing day for months with fewer days.
3. Select either All Days or Exclude Saturdays and Sundays.
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Implement Customer Invoicing Chapter 8 - Page 16
Payment Terms
Payment Terms
Receivables, Vision Operations (USA) (N) Setup > Transactions > Payment Terms Define standard payment terms to determine payment schedules and percentages of discounts allowed.
• The formula used to determine the amount due is: - Amount Due = Relative Amount/Base Amount x Invoice Amount. - For example: Relative Amount = 60%/Base Amount = 100% would be 60% of
Invoice amount. • Select the Credit Check check box to trigger Order Management credit check. • Enter the number of days before the due date that the invoice should be printed. • Allow discounts on partial payments by selecting the Allow Discount on Partial Payments
checkbox. • Specify how to allocate tax and freight on invoices with split terms: in the first installment,
or prorated across all installments.
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Implement Customer Invoicing Chapter 8 - Page 17
Defining Balance Forward Billing Payment Terms If you want to use a payment term for balance forward billing to send a single bill, consolidated at either the customer account or site level, select a balance forward billing cycle from the Billing Cycle list of values. Because balance forward bills cannot be split across installments, in the case of a balance forward payment term:
• Any value entered in Base Amount defaults to 100. • Installment Options is disabled, and any data entered before selecting a billing cycle
defaults to include tax and freight in the first installment. • You can populate only one row in the Payment Schedule section; the Sequence Number
and Relative Amount values for the row default respectively to 1 and 100. • Date Due is disabled. However, you can populate Days, Day of Month, and Months
Ahead. Note: You cannot change an existing payment term back and forth for use as both a non-balance forward billing and balance forward billing payment term.
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Implement Customer Invoicing Chapter 8 - Page 18
Transaction Sources
Transaction Sources
Receivables, Vision Operations (USA) (N) Setup > Transactions > Sources The following are the transaction sources details:
• Transaction sources are used to control transaction batching and numbering, and to specify default transaction values.
• Assign a default legal entity to the transaction. • Select validation options for imported transactions. • Assign batch sources to invoices, debit memos, commitments, credit memos, and on-
account credits. • Create a batch source for late charges, if applicable. • Set up for automated non-credit card refunds. • When setting up the Credit Memo Workflow, assign a Manual source.
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Implement Customer Invoicing Chapter 8 - Page 19
• Select the Copy Document Number to Transaction Number check box to use the same value for both the document number and the transaction number for transactions assigned to this source. You must check the box if using Gapless document sequences.
Legal Entity Defaulting If you are using a shared accounting environment, you can optionally assign a legal entity to a
transaction batch source to default to the transaction. Receivables looks first to the transaction type for a legal entity to default to the transaction. If a legal entity has not been assigned to the transaction type, then Receivables looks to the transaction batch source for the legal entity. If Receivables cannot find a default legal entity, then the user must enter the legal entity on the transaction line. The legal entities available for selection on the transaction type, transaction batch source, and transaction line are the legal entities assigned to the ledger that is assigned to the active operating unit.
If you are using an exclusive accounting environment, with one legal entity only assigned to the ledger, then you do not need to set up legal entity defaulting. Receivables defaults the legal entity to all transactions.
Batch Source for Late Charges If the late charge policy for any of your Operating Units is to create either Interest Invoices or
Debit Memos, then create a separate batch source for late charges. Create a batch source for Interest Invoice or Debit Memo late charges with Type “Imported”. The batch source Type is Imported because the Interest Invoice and Debit Memo creation is done as a batch process that calls the Invoice API. You then assign this source in the System Options window.
Automated Non-Credit Card Refunds You can set up Receivables to automate the refund process for non-credit card transactions.
Receivables submits the refund request to Payables, and Payables in turn transacts refunds through Oracle Payments.
To set up for automated refunds: 1. Create a Refund receivables activity. The Refund activity type applies exclusively to
automated non-credit card refunds. Note: Use the Credit Card Refund activity type for credit card refunds.
2. Set the Receipt Handling for Credits field to Refund in the transaction source. You set this option to Refund for both credit card and non-credit card automated refunds.
Note: For AutoInvoice feeds from the Service Contracts module, you must use the seeded Transaction Source of OKS_CONTRACTS. See: Transaction Batch Sources, Oracle Receivables Implementation Guide for more information.
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Implement Customer Invoicing Chapter 8 - Page 20
Remit-to Addresses
Remit-to Addresses
Receivables, Vision Operations (USA) (N) Setup > Print > Remit-to Address A remit-to address is the address that is used to send payment for an invoice. You can set up remit-to information in the Remit To Addresses window to default to transactions (excluding credit memos). You can designate a remit-to address for one or more countries. This remit-to address is assigned to all invoices of customers with a bill-to address in the designated country or countries. You can also set up a default remit-to address. A default remit-to address defaults to the Remit-to Address region when you enter transactions. In addition, AutoInvoice will not reject invoices because it is not able to determine a remit-to address. For United States remit-to addresses, you can only have one default remit-to address for each country and state combination. For example, you can have one default remit-to address for United States/California, one for United States/Nevada, and so on.
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Implement Customer Invoicing Chapter 8 - Page 21
System Options Relating to Transactions
System Options Relating to Transactions
Receivables, Vision Operations (USA) (N) Setup > System > System Options > (T) Accounting (N) Setup > System > System Options > (T) Transactions and Customers The following are the system options details:
• Header Level Rounding: Assign a special account for rounding differences when converting foreign currency transactions to your functional currency. The Header Level Rounding is enabled on the Accounting tab. Caution: This option cannot be disabled once the box has been selected. Header Level Rounding adds an additional line to every transaction regardless of the currency.
• Automatic Journal Import: Automatically import the batches you transfer by checking this box on the Accounting tab. The value becomes the default value on the Run GL Journal Import field in the Run General Ledger Interface window.
• Allow Change to Printed Transactions: Allow updates to printed transactions by checking this box on the Transactions and Customers tab.
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Implement Customer Invoicing Chapter 8 - Page 22
• Allow Transaction Deletion: Allow a transaction to be deleted from Receivables after it has been saved by checking this box on the Transactions and Customers tab. Caution: Do not enable this option if using gapless numbering of transactions.
Note: There are system options relating to AutoInvoicing as well. For more information on System Options relating to Autoinvoicing, refer to Order to Cash: Process Invoices Using AutoInvoice.
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Implement Customer Invoicing Chapter 8 - Page 23
System Options Relating to Late Charges
System Options Relating to Late Charges
Receivables, Vision Operations (USA) (N) Setup > System > System Options > (T) Transactions and Customers Use the Late Charges region in the Transactions and Customers tabbed region of the System Options window to assign late charge policy details to the applicable operating unit.
• Select the Assess Late Charges checkbox. Note: You must select this checkbox to enable your late charge policy. If this system option is not selected, then Receivables will not create late charges for a customer, even if that customer is enabled for late charges at the account or site level.
• Enter the transaction types that were previously created for Interest Invoice and Debit Memo late charges.
• If interest charges are in the form of adjustments, enter the Receivables activity that was previously created for late charges. The late charges program uses this value when no value is assigned at the customer account or site level.
• If the late charge policy includes penalty charges, enter the Receivables activity that was previously created for late charges.
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Implement Customer Invoicing Chapter 8 - Page 24
• If the late charge policy is to create either Interest Invoices or Debit Memos, then enter the batch source that was previously created for late charges.
• If the late charges policy uses Balance Forward Billing and the Average Daily Balance method to assess late charges, enter the average daily balance calculation details.
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Implement Customer Invoicing Chapter 8 - Page 25
Miscellaneous System Options
Miscellaneous System Options
Receivables, Vision Operations (USA) (N) Setup > System > System Options > (T) Miscellaneous The Miscellaneous tabbed region of the System Options window contains several parameters that affect transactions.
• Discount Basis: Use this option to calculate discounts on your invoices. The discount options are:
- Invoice Amount - Lines Only - Lines, Freight Items and Tax - Lines and Tax, not Freight Items and Tax
• Require Salesperson: Select this checkbox to require salespersons to be selected when entering transactions.
• Print Remit to Address: Select this checkbox to print your remit-to address on your customer statements.
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Implement Customer Invoicing Chapter 8 - Page 26
• Print Home Country: Select this option to print your home country on your invoices and statements that refer to addresses in that country.
• Source of Territory: Enter the Source of Territory to default to the Salespersons, Transactions, and Customers UI. Receivables uses this value to determine the default territory for invoices and commitments. Selections are: Bill-To Site, Salesrep, Ship-To Site, and None.
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Implement Customer Invoicing Chapter 8 - Page 27
Profile Options
Profile Options
System Administrator (N) Profile > System The following profile options are used:
• AR: Allow Update of Existing Sales Credits: Determines whether you can update existing sales credits.
• AR: Change Customer on Transaction: Determines whether you can update customer names in the Transaction windows.
• AR: Default Exchange Rate Type: Determines the default exchange rate to use when converting foreign currency transactions to your functional currency.
• AR: Override Adjustment Activity Account Option: Determines whether you can override the default adjustment account when entering or updating manual adjustments and when updating automatic adjustments.
• AR: Transaction Batch Source: Determines the default invoice source that will appear in the Batch field of the Transaction window and Credit Memo window.
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Implement Customer Invoicing Chapter 8 - Page 28
• AR: Use Invoice Accounting For Credit Memos: Determines whether to assign your credit memo to the same accounts that are assigned to the invoice you are crediting.
See: Appendix A, Oracle Receivables Profile Options, Oracle Receivables Implementation Guide for complete information about Receivables profile options.
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Implement Customer Invoicing Chapter 8 - Page 29
Implementation Considerations for Transactions
Implementation Considerations for Transactions
• For AutoAccounting, when using a table as a source of a segment, make sure the General Ledger accounts are defined for the source. For example, if you select the Company segment to be derived from the transaction type for Revenue, the revenue account must be entered for all transaction types.
• For payment terms, decide on discounting, balance forward billing, split payment terms, and allocating tax and freight. Note: You cannot use line level cash application on invoices with split payment terms
• For transaction batch sources, select Value to import a record into AutoInvoice tables using its actual name (non-Oracle system); select ID to use its internal identifier (Oracle system). If you use an Oracle system, then ID is quicker because of the shorter character length. For example, it is quicker to read “2309” than “Business World.”
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Implement Customer Invoicing Chapter 8 - Page 30
Implementation Considerations for Remit-To Addresses
Implementation Considerations for Remit-To Addresses
• Define lockbox addresses as remit-to addresses to let customers know where to send payment.
• To catch any missing assignments, set up a remit-to address assigned to a default location. If you enter or import an invoice with an address that does not correspond to any of your assignments, it uses the default remit-to address.
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Implement Customer Invoicing Chapter 8 - Page 31
Optional Setup Steps for Customer Invoices
Optional Setup Steps for Customer Invoices
The following are optional setup steps for customer invoices: • Accounting Rules: If your accounting method is Accrual, use rules to create revenue
recognition schedules for your invoices. See: Process Invoices: Accounting Rules for information about accounting rule types and how to use them to recognize revenue.
• Salespeople: To allocate sales credits to invoices, debit memos and commitments. If you do not want to assign sales credits to a transaction, you can enter No Sales Credit.
• Standard Memo Lines: To enter predefined lines for debit memos, on-account credits, and invoices.
• Document Sequencing: To assign unique numbers to documents and account for each transaction that is entered.
• Statements: To create statements to send to customers. - Define Aging Buckets: To review and report on open receivables based on the
number of days each item is past due. - Define Statement Cycles: To control when you create customer statements. - Define Messages: To customize messages on customer statements.
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Implement Customer Invoicing Chapter 8 - Page 32
• Balance Forward Billing: To create balance forward billing invoices to send to customers.
- Set the AR: Show Billing Number profile option to Yes to display the balance forward billing invoice number in Receivable windows and reports.
- Define New or Update Existing Customer Profiles: To determine which customers will receive a balance forward billing invoice.
- Define Proxima Payment Terms: To determine the cutoff date and payment terms used with balance forward billing invoices.
- Assign Payment Terms: Assign to the Bill To site of each customer that you set up to receive a balance forward billing invoice.
• Tiered Interest Rates for Late Charges: Customize late charges for both interest and penalties by creating interest tiers and assigning the tiers to a charge schedule.
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Implement Customer Invoicing Chapter 8 - Page 33
Salespeople
Salespeople
Receivables, Vision Operations (USA) (N) Setup > Transactions > Salespersons/Resources If you are setting up salespeople in Receivables rather than in Human Resources:
• Define salespeople to allocate sales credits for transactions. • Determine the source of the Territory Flexfield default for the Transactions window by
entering a value in the Source of Territory field in the Miscellaneous tabbed region of the System Options window.
• Determine whether a salesperson is required when entering transactions by selecting the check box for Require Salesperson in the Miscellaneous tabbed region of the System Options window.
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Implement Customer Invoicing Chapter 8 - Page 34
Standard Memo Lines
Standard Memo Lines
Receivables, Vision Operations (USA) (N) Setup > Transactions > Memo Lines Memo lines can be used to define goods or services that are sold frequently, but have not been defined as inventory items, such as Annual Maintenance Contracts or Consulting Services.
• Select one of the following standard line types: Charges, Freight, Line, or Tax. • You can enter a tax classification code and tax product category to associate with a
standard memo line. These values are passed to E-Business Tax for tax calculation. • If the price is constant, you can enter a unit price which defaults when this memo line is
used. Tax Classification Code and Tax Product Category Defaulting The defaulting and usage of tax classification codes is controlled by Oracle E-Business Tax. The tax classification code represents the tax code migrated from Release 11i tax content.
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Implement Customer Invoicing Chapter 8 - Page 35
You use tax classification codes as determining factors in tax calculation only when you choose to use the Release 11i tax model in E-Business Tax. The tax product category is used by E-Business Tax when the product category is a determining factor in tax calculation. Tax product categories are most relevant to VAT-based taxes, where the item must be identified correctly for tax rate determination. See: Order to Cash: Tax Processing for more information.
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Implement Customer Invoicing Chapter 8 - Page 36
Setting Up Document Sequencing
Setting Up Document Sequencing
System Administrator (N) Application > Document > Define Note the following points:
• Using the document sequence number as the transaction number makes tracking transactions easy.
• When you create a transaction type in Receivables, the document sequencing category is created automatically.
See: Oracle Applications System Administrator’s Guide – Configuration for more information about Document Sequencing.
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Implement Customer Invoicing Chapter 8 - Page 37
Setting Up Gapless Transaction Numbering
Setting Up Gapless Transaction Numbering
Receivables, Vision Operations (USA) (N) Setup > System Options > (T) Transactions and Customers (N) Setup > Transactions > Sources > (T) Batch Source Gapless transaction numbering gives a better audit trail and meets legal requirements for certain countries. To ensure gapless numbering, do not check the Allow Transaction Deletion check box in the Transactions and Customers tabbed region of the Systems Options window. The Document Number Generation Level system option in the Transactions and Customers tabbed region of the Systems Options window identifies the point at which Receivables generates a document number for transactions. This is either:
• When the transaction is committed • When the transaction is completed
Working with Duplicate Invoice Numbers
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Implement Customer Invoicing Chapter 8 - Page 38
If the Copy Document Number to Transaction Number check box is selected when creating the transaction batch source, it is possible to have duplicate invoice numbers within a batch source. For example, you are using the following settings:
• Automatic Numbering in the Batch Source window is enabled. • Copy Document Number to Invoice check box is selected in the Batch Source window. • Document Number Generation Level system option is set to “When the Transaction is
committed.” You create an invoice with a transaction type that does not require document sequencing, so the invoice number is assigned from the batch source. You create another invoice with a transaction type that requires document sequencing. The invoice number is created from the document sequence number, which has the same numbering scheme as the batch source. To avoid this, assign a different numbering scheme to your document sequence and attach sources. Note: When using document sequencing, the original invoice number is saved to the underlying tables (OLD_TRX_NUMBER column of the RA_CUSTOMER _TRX_ALL table). Though not viewable from any window, once the document sequence number is assigned to the transaction, you can query the old transaction number by entering ‘&’ in the transaction number field while in query mode. Then press [Ctrl] + [F11] to run the query. When a small window opens, enter the Where criteria for the OLD_TRX_NUMBER and click the OK button. If you do not select the Copy Document Number to Invoice Option, Receivables does not allow duplicate transactions within a batch.
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Implement Customer Invoicing Chapter 8 - Page 39
Setting Up Statements
Setting Up Statements
Receivables, Vision Operations (USA) (N) Setup > Collections > Aging Buckets (N) Setup > Print > Statement Cycles (N) Setup > Print > Standard Messages Statements communicate activity to your customers about invoices, credit memos, debit memos, payments, on-account credits, chargebacks, deposits, and adjustments.
• Define Aging Buckets for statements. The seeded Statement Aging bucket contains five periods. Receivables also prints your customer past due balances based on aging buckets.
• Define Statement Cycles. • Define Messages (optional). You can enhance your statements by printing your own
custom messages.
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Implement Customer Invoicing Chapter 8 - Page 40
Balance Forward Bills
Balance Forward Bills
A Balance Forward Bill includes the following information: • A beginning balance or the balance carried over from the last billing period. • An itemized list of current charges and activities (such as invoices, credit memos, debit
memos, adjustments) in either summary or detail format. • Payment received for the last billing period. • Current total outstanding balance.
Note: You cannot update transactions that are included on a balance forward bill, regardless of how you set the system option Allow Change to Printed Transactions. Because Receivables considers inclusion of a balance forward bill to be an activity, you cannot update a transaction once it has an activity against it.
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Implement Customer Invoicing Chapter 8 - Page 41
Setting Up Balance Forward Billing
Setting Up Balance Forward Billing
Receivables, Vision Operations (USA) (N) Setup > Print > Balance Forward Billing Cycles (N) Setup > Transactions > Payment Terms (N) Customers > Profile Classes > Profile Class (N) Customers > Account Overview > Account Profile (N) Customers > Account Site Overview > Profile (N) Setup > System > System Options The key Balance Forward Billing setup steps are as follows:
1. Define Balance Forward Billing Cycles. The Balance Forward Billing program uses balance forward billing cycles:
1. To determine the billing date of a balance forward bill. 2. To select the transactions to include in the balance forward bill.
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Implement Customer Invoicing Chapter 8 - Page 42
2. Define Balance Forward Billing Payment Terms. The payment term is the criteria that Receivables uses to select transactions to be part of the balance forward bill. The due date of a transaction is derived from the billing date and the payment term. The billing date is derived from the transaction date and the billing cycle.
1. Create one or more payment terms for use with balance forward billing by assigning a balance forward billing cycle to a payment term.
2. Assign balance forward billing payment terms at the customer profile class, account, or site level.
3. Receivables defaults the assigned payment term during transaction entry. 3. Enable Balance Forward Billing. You can set up balance forward billing to generate bills
consolidated at either the customer account or site level: 1. To generate account level bills, select Account as the Bill Level at the customer
profile class and account profile level. To generate site level bills, select Site as the Bill Level at the customer profile class and account profile level. The Bill Level at the site profile level is a read-only field, defaulted from the account profile level.
2. Account-level balance forward billing lets you generate one bill for each operating unit of the account, addressed to the primary bill-to site of the account.
3. Site-level balance forward billing lets you generate a balance forward bill for each bill-to site of a customer with multiple bill-to sites.
4. Receivables defaults the assigned payment term during transaction entry. Note: Select Override terms to exclude one or more sites, and even one or more
transactions, from a balance forward bill. Note: Set the Show Billing Number system option to Yes to show the billing number in the
various Transactions windows. The Imported Billing Number feature provides you with an alternative way of grouping your imported invoices at the site level for consolidated presentation of billing. You supply the value for the billing number and then create your own custom consolidated bill formats.
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Implement Customer Invoicing Chapter 8 - Page 43
Setting Up Tiered Interest Rates for Late Charges
Setting Up Tiered Interest Rates for Late Charges
Receivables, Vision Operations (USA) (N) Setup > Collections > Aging Buckets and Interest Tiers (N) Late Charges > Charge Schedules (N) > Customers > Customers > Customer Search > Account Details > (T) Late Charges. The setup steps for Tiered Interest Rates are:
1. In the Aging Buckets and Interest Tiers window: 1. Enter a Name and select the Type Interest Tier. 2. In the Lines region select Type Past Due and specify the day ranges.
2. In the Charge Schedules window: 1. Enter a Schedule Name and Description. 2. Enter the Interest Tier you previously created. 3. Select a Schedule Type of Amount (flat amount) or Percentage (percentage of
overdue invoice).
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Implement Customer Invoicing Chapter 8 - Page 44
4. Enter the schedule Start Date. If the effective dates occur across a charge calculation period, the Use Multiple Interest Rates option will have charges calculated at more than one rate during that charge period. This applies only to Interest, not Penalties.
5. Enter the Tiers and assign a Value of either a flat amount or a percentage (depending on the Schedule Type) to each tier.
3. In the Late Charges tabbed region of the Customers page, enter or update late charge policy details.
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Implement Customer Invoicing Chapter 8 - Page 45
Overview of Transaction Printing Views
Overview of Transaction Printing Views
Transaction Printing Views are used for developers to access the transaction tables to customize invoices. In the past, a developer had to be very familiar with the transaction tables to be able to customize invoices. Now, the developer does not need to know the tables because the view extracts the information.
• Although Receivables makes extracting transaction information easier, it is necessary to know SQL in order to create a customized invoice.
• A view contains a SQL select statement. • You use views to select information from the tables, such as the transaction tables. • A view can reference multiple tables so that when you point to a view, Receivables
retrieves the data from these tables without needing to know all the tables. • There are modules that create the view structure for the transaction printing procedure.
- You must run these modules in the order in which they appear, because dependencies exist between some of the files.
See: Appendix D, Oracle Receivables Transaction Printing Views, Oracle Receivables User Guide for more information about transaction printing views.
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Implement Customer Invoicing Chapter 8 - Page 46
Transaction Printing Views
Transaction Printing Views
• AR_INVOICE_HEADER_V: The main view. It retrieves the header information of the report. It has two parts, one for adjustments and one for nonadjustments.
• AR_INVOICE_ADJ_V: Retrieves the details of an adjustment. • AR_INVOICE_LINES_V: Retrieves the line items of each transaction retrieved by
AR_INVOICE_HEADER_V. • AR_INVOICE_TAX_SUMMARY_V: Retrieves tax summary information for a
transaction. • AR_INVOICE_COMMITMENT_INFO_V: Retrieves commitment information for a
transaction. • AR_INVOICE_TOTALS_V: Retrieves the total amounts for all lines and associated
charges for a transaction (for example, lines, freight, and tax). • AR_INVOICE_INSTALLMENTS_V: Retrieves installment information for transactions
with multiple installments. • AR_INVOICE_COUNT_TERMS_V: Retrieves the number of terms for a transaction
(that is, transactions assigned to split payment terms).
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Implement Customer Invoicing Chapter 8 - Page 47
Agenda
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Implement Customer Invoicing Chapter 8 - Page 48
Define Transaction Types in Order
Define Transaction Types in Order
Define transaction types in the order indicated in this slide, in order to properly associate one transaction type with another. For example, define a credit memo first and then an invoice. Enter the credit memo in the Credit Memo Type field when you create the Invoice transaction type. When you create a credit memo for the invoice, the credit memo transaction type is defaulted. You must define invoice transaction types before you define commitment transaction types. Commitment transaction types are deposits and guarantees. Suggestion: To be able to void a debit memo, credit memo, on-account credit or invoice, define a Void transaction type with “Open Receivables” and “Post to GL” set to No. Then, as long as there is no activity against the transaction and it has not posted to General Ledger, you can make it invalid by simply changing the transaction type to “Void.”
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Implement Customer Invoicing Chapter 8 - Page 49
Implementation Considerations for Document Sequencing Enhancements
Implementation Considerations for Document Sequencing Enhancements
• What type of document sequence should be used: Gapless, Automatic, or Manual? • Document sequences and batch source sequences should have different numbering
schemes. This is to prevent duplicate numbering before a transaction has a status of Complete.
• For gapless transaction numbering, do not allow deletion of invoices. O
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Implement Customer Invoicing Chapter 8 - Page 50
Function Security
Function Security
• If you exclude the Transactions: Dispute function from the Transactions workbench, it is automatically excluded from the Collections workbench.
• The Copy and Print activities can be accessed either from a button or from the menu. Excluding the function disables access from the button. The system administrator must remove access from the menu when defining menu structures.
• You can set up the same function security for debit memos (DM), credit memos (CM), and on-account credits (OnAcc) as for invoices (Inv). Additionally, you can also set function security for applying on-account credits (OnAcc: Applications).
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Implement Customer Invoicing Chapter 8 - Page 51
Quiz
Answers: 1 Quiz Specifications
• The correct answer is “Transaction type can be used to set the default value for entering freight or not”. O
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Implement Customer Invoicing Chapter 8 - Page 52
Quiz
Answers: 2, 3, 4 Quiz Specifications
• The correct answer is “Before you can use customer invoices, you must complete these setups: Customers, Receivables Transaction Types, AutoAccounting, Billing Cycles, Payment Terms, Transaction Sources, Remit-To Addresses, and System and Profile Options”.
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Implement Customer Invoicing Chapter 8 - Page 53
Quiz
Answers: 2 Quiz Specifications
• The correct answer is “You cannot change an existing payment term back and forth for use as both a non-balance forward billing and balance forward billing payment term”. O
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Implement Customer Invoicing Chapter 8 - Page 54
Quiz
Answers: 3 Quiz Specifications
• The correct answer is “You need to define the invoice transaction type before defining a debit memo transaction type”. O
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Implement Customer Invoicing Chapter 8 - Page 55
Summary
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Implement Customer Invoicing Chapter 8 - Page 56
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Receipts Chapter 9 - Page 1
Receipts Chapter 9
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Receipts Chapter 9 - Page 2
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Receipts Chapter 9 - Page 3
Receipts
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Receipts Chapter 9 - Page 4
Objectives
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Receipts Chapter 9 - Page 5
Agenda
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Receipts Chapter 9 - Page 6
Agenda
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Receipts Chapter 9 - Page 7
Oracle Receivables Overview
Oracle Receivables Overview
The Receivables process consists of several major steps. The Post Receipts steps will be discussed in this topic.
• Create Profile Classes: Defines several default values for customers with similar credit terms and invoicing requirements.
• Enter Customers: Creates information for the customer and defines the address for the customer and the business purposes at each address.
• Create Invoices: Uses AutoInvoice or manually created invoices to bill customers for goods and services.
• Print Invoices: Produces invoices to mail to customers. • Use iReceivables: Allows customers and employees to access customer accounts
online to see the status of invoices and receipts and to request credits online. • Post Receipts: Permits posting of customer payments as they are received. • Perform Collections: Enables collectors to use Advanced Collections to perform timely
and accurate collection activities.
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Receipts Chapter 9 - Page 8
Overview of Receipts
Overview of Receipts
You can handle a receipt from a customer in several ways, depending on the amount of the receipt and total amount owed by the customer. A customer may pay:
• Full amount due for a specific invoice or group of invoices. • Partial payment on a specified invoice or specific transaction lines of an invoice. • Payment on the remaining balance of an account. • Overpay an account, creating an on-account credit.
If the customer does not provide clear and sufficient information, you may not be able to accurately identify the customer and properly apply the receipt.
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Receipts Chapter 9 - Page 9
Receipt Creation
Receipt Creation
Receipts are created in one of three ways: • Manual Receipts: Standard and Miscellaneous receipts can be manually applied to
transactions or customer accounts. The Manual Receipt entry method provides more control over the application of individual receipts to specific items.
• QuickCash Receipts: Standard and AutoLockbox receipts can be applied using QuickCash receipts. Use this method when you need to enter and apply receipts quickly, because it only requires a minimal amount of information for each receipt and application. Also, QuickCash provides an extra level of control for entering high volume receipts, because it does not immediately affect your customer’s account balance. QuickCash permits using AutoCash rules, placing receipts on-account, and entering them as unidentified or unapplied.
• Automatic Receipts: Credit Cards and Direct Debits can use Automatic Receipts to automatically generate receipts for customers with whom you have predefined agreements. These agreements let you collect payments on time by transferring funds from the customer’s bank account to yours on the receipt maturity date. Prepayments require Oracle Order Management.
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Receipts Chapter 9 - Page 10
Receipt Statuses
Receipt Statuses
Five receipt statuses are available: • Approved: This receipt has been approved for automatic receipt creation. This status is
only valid for automatic receipts. • Confirmed: For manually entered receipts, this status indicates that the receipt belongs
to a receipt class that requires remittance. For automatic receipts, this status indicates that the receipt has been confirmed.
• Remitted: This receipt has been remitted. This status is valid for both automatic and manually entered receipts.
• Cleared: The payment of this receipt was transferred to your bank account and the bank statement has been reconciled within Receivables. This status is valid for both automatic and manually entered receipts.
• Reversed: This receipt has been reversed. You can reverse a receipt when your customer stops payment on a receipt, if a receipt comes from an account with nonsufficient funds, or if you want to re-enter and reapply it in Receivables. You can reverse standard receipts and miscellaneous transactions.
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Receipts Chapter 9 - Page 11
Manual Receipt Entry Process
Manual Receipt Entry Process
Use the Receipts window or Receipt Batches window to begin the manual entry process. • Create a Batch: (Optional) Receipts are entered in batches or groups. Batches provide
the ability to: - View the difference between control and actual counts and amounts. - Group related receipts together that share the same default attributes. - Manage the time-consuming task of data entry.
Note: Batches are optional for Standard Receipts, but required for QuickCash receipts.
• Enter Receipts: Enter each receipt individually or in batches. • Apply Receipts: Apply receipts to transactions or transaction lines, or on-account. • Enter Chargebacks and Adjustments: Create adjustments and chargebacks against
the transaction to which you are applying a receipt. • Post to GL (General Ledger): Transfer the receipt transaction subledger accounting to
General Ledger for recording. • Remit Receipts: Remit receipts to collect funds from Customer accounts.
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Receipts Chapter 9 - Page 12
Receipt Types
Receipt Types
Receivables, Vision Operations (USA) (N) Receipts > Receipts Manual receipts provide more control over the application of individual receipts. In the Receipts window, you can enter a receipt, specify the customer, reverse a receipt, and apply a receipt to one or many invoices using Search and Apply. Receipt Types are Standard or Miscellaneous.
• Cash Receipts: Payment (such as cash or check) that you receive from your customers for goods or services. Account balances are updated as soon as the receipts are saved.
• Miscellaneous Receipts: Non-invoice related revenue earned from investments, interest, refunds, and stock sales. Receivables Activities determine the accounting for these transactions.
(N) Receipts > Batches > Manual-Quick
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Receipts Chapter 9 - Page 13
QuickCash receipts let you post receipts and update account balances after running the Post QuickCash program, rather than when the information is entered. QuickCash receipts require batching.
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Receipts Chapter 9 - Page 14
Manual Receipts versus QuickCash Receipts
Manual Receipts versus QuickCash Receipts
Another difference between Manual Receipts and QuickCash Receipts is that manual receipts updates a customer’s balance immediately, while QuickCash receipts do not immediately affect a customer’s balance. After reviewing a QuickCash batch for accuracy, you must run Post QuickCash to update your customer’s account balances.
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Receipts Chapter 9 - Page 15
Creating Batches
Creating Batches
Receivables, Vision Operations (USA) (N) Receipts > Batches Use batches to eliminate repetitive data entry by creating default batch-level information.
• Define the following default values for a group of receipts: - Receipt class: Determines the stages involved in receipt-to-cash cycles. These
stages are confirmation, remittance, and reconciliation. - Receipt method: Provides accounting flexfield and bank account defaults. - Deposit date: Default Batch Date and Deposit Date are the current date, but it can
be changed. - GL date: Default GL date is the day of the most recent open period, but it can be
changed to any open or future enterable period. - Apply date: Date the receipt is applied.
• You can change default values for specific receipts, if necessary.
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Receipts Chapter 9 - Page 16
Validating Receipts in Batches
Validating Receipts in Batches
One of the advantages of batching is the ability to validate that the receipts entered tie to the control total. The process is:
• Enter the receipt count and the total receipt amount for the batch. • The actual count and amount is updated as each receipt is entered. • Difference between the control count and amount and the actual count and amount
indicate potential data-entry errors.
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Receipts Chapter 9 - Page 17
Batch Statuses
Batch Statuses
A batch has a status that indicates whether it is complete. Receivables automatically updates the batch status of a receipt batch when you add new or apply existing receipts in the batch.
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Receipts Chapter 9 - Page 18
Agenda
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Receipts Chapter 9 - Page 19
Applying Batch Receipts
Applying Batch Receipts
When you enter receipts and applications in a QuickCash batch or import them using AutoLockbox, Receivables stores the data in an interim table. QuickCash lets you apply your receipts to one or many transactions, use AutoCash rules, place receipts on-account, or enter them as unidentified or unapplied.
• Use the QuickCash window to review receipts and ensure that application information is correct.
• Run Post QuickCash to update the customer’s account balances. Note: If you do not identify the customer for a receipt, Receivables automatically assigns the receipt a status of Unidentified.
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Receipts Chapter 9 - Page 20
Applying Receipts to an Invoice
Applying Receipts to an Invoice
Use the Applications window or Search and Apply window to apply your receipts or on-account credits.
• Apply receipts to multiple invoices, single invoice, or on-account. • Apply a receipt to open debit items to reduce the outstanding balance. • Apply receipts to specific transaction lines. • Control who can create adjustments and chargebacks with the AR: Cash-Allow Actions
profile option. In the Balances region of the Receipts window, receipts are shown as:
• Applied: Receipt is matched to a transaction. • On-Account: The amount of the receipt is put on the customer’s account and may be
applied later. • Unapplied: Receipt has not been applied to a transaction. • Unidentified: Customer for this receipt has not been identified.
Note: Partially applied receipts will have a status of Unapplied until they are fully applied.
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Receipts Chapter 9 - Page 21
Applying Receipts at Line Level
Applying Receipts at Line Level
Receivables, Vision Operations (USA) or Order Management Super User, Vision Operations (USA) (N) Receipts > Receipts > (B) Apply > Applications > (B) Apply in Detail > Detailed Applications Use line-level cash application to apply receipts against specific transaction lines, according to your customers remittance advice. For example, if your customer received only Item X, out of the three items X, Y, and Z shipped to the customer, and remitted payment only for Item X, then you can apply your customer’s payment to Item X. Later, after your customer receives Item Y and remits payment, you can apply the payment for Item Y. When the customer receives Item Z and remits payment, you have the option to unapply line-level cash applications for item X and Y and reapply the receipts against the entire transaction. Receivables lets you update an existing transaction-level receipt application to a line-level receipt application. For example, after applying a receipt against an entire transaction, you
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Receipts Chapter 9 - Page 22
later learn that the customer only wanted to partially pay the transaction. In this case, you can unapply the original receipt application and reapply the receipt to specific transaction lines. Note: Line-level cash application functionality is available only for invoices, debit memos, and chargebacks with line details. You cannot use line-level cash application with any other transactions, including invoices with installments. In addition, you cannot update a transaction level receipt application for an existing invoice created with earlier releases of Oracle Receivables to a line-level receipt application, if there is any activity against the invoice. Invoice activity includes receipt application, adjustments, deposits, or credit memo applications. The line-level cash application functionality provides the following receipt application options:
• Transaction: This option lets you apply receipts at a summary level. You can enter amounts by line type: Line, Tax, Freight, or Charges. If you enter a Line or Tax amount, then Receivables prorates the application across all transaction lines.
• All Lines: This option lets you apply receipts to specific lines. You can select one or more transaction lines. Receivables enters the Amount Applied for this receipt and updates the Balance Due for this transaction, but you can change the amount applied.
Note: If you want to apply cash to most, even if not all, transaction lines, then choose Select All Lines. Receivables applies the receipt to all transaction lines; you can then deselect the unwanted transaction lines.
• All Groups: This option lets you apply receipts to transaction lines of a selected group. This option displays only if group attributes are imported into Receivables from a feeder system, such as Oracle Service Contracts. You can select one or more groups. Receivables prorates the application across all transaction lines assigned to the selected group.
Note: If you want to apply cash to most, even if not all, groups, then choose Select All Groups. Receivables applies the receipt to all transaction lines in all groups; you can then deselect the unwanted groups.
• Specific Groups: Select a group to apply cash to selected transaction lines within the selected group. Specific groups display only if group attributes are imported into Receivables from a feeder system, such as Oracle Service Contracts. You can select one or more transaction lines assigned to the selected group.
• Freight and Charges: This option lets you apply receipts to freight and charges at the invoice level only. You can apply cash to freight and charges either before or after you apply cash to transaction lines. When you select this option, Receivables displays freight and charges on separate lines, if they exist. Receivables automatically calculates earned discounts. You must manually enter unearned discounts.
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Receipts Chapter 9 - Page 23
Applications Window
Applications Window
Receivables, Vision Operations (USA) (N) Receipts > Receipts > (B) Apply In the Applications window, you can:
• Apply a receipt to many invoices or put cash on account. • Apply a receipt to an invoice in a different currency. • Apply a receipt against specific transaction lines (invoices, debit memos, and
chargebacks only). • Apply a receipt against another open receipt (netting receipts). • Create an adjustment to write off a transaction balance or unapplied receipt balances. • Create a chargeback to create a new transaction for the balance of a transaction. • Apply discounts. • Refund all or part of a previously remitted receipt (credit card or non-credit card), either
manually or automatically using AutoInvoice.
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Receipts Chapter 9 - Page 24
• Put invoice-related short payments or non-invoice related overpayments or short payments into claim investigation. Note: When you create a claim for an invoice, Receivables places the related invoice in dispute until the claim is resolved. (For users of Oracle Marketing Online Trade Management only.)
See also: • Process Invoices Using AutoInvoice: Automated Refunds • Process Invoices: Manual Refunds
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Receipts Chapter 9 - Page 25
Criteria for Mass Applying Receipts
Criteria For Mass Applying Receipts
Receivables, Vision Operations (USA) (N) Receipts > Receipts > (B) Search and Apply In the Search and Apply window, you can mass apply receipts to several transactions based on certain sort criteria. When using the Search and Apply window:
• Apply a receipt to open debit items automatically. • Apply receipts based on the criteria you specify. • Review receipts before applying them or apply the receipts automatically.
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Receipts Chapter 9 - Page 26
AP/AR Netting
AP/AR Netting
A business enterprise that is both a customer and a supplier to the deploying company is called a trading partner. The AP/AR Netting process lets the deploying company offset their Payables and Receivables transactions against the same trading partner. AP/AR Netting automatically compares Payables to Receivables and creates the appropriate transaction in each system to net supplier invoices and customer invoices. The netting process runs against the specified trading partners and transaction dates, and produces these results:
• If Receivables has a larger outstanding balance than Payables, then the final netting amount is the sum of the Payables open selected transactions.
• If Payables has a larger outstanding balance than Receivables, then the final netting amount is the sum of the Receivables open selected transactions.
• If there is no outstanding balance in Payables or Receivables, the netting process applies the receipts and closes the invoices to avoid the invoices becoming overdue.
The netting process creates a Payables payment and a Receivables receipt to offset the Payables and Receivables balances due to netting. One Receivables receipt is created to total the final netting amount. Once the receipt is created for netting, it cannot be unapplied.
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Receipts Chapter 9 - Page 27
Prepayments
Prepayments
A prepayment is payment in advance of the delivery of goods or services. Receivables creates prepayments as receipts before the related invoices are created. Receivables integrates with Oracle Payments to process prepayments. Customers can use any of these payment instruments to make a prepayment:
• Automatic Clearing House (ACH) bank account transfer • Cash • Check (tendered to order taker) • Credit card/purchase card • Direct debit
Customers can use more than one payment instrument for a single prepayment. Receivables creates one prepayment receipt for each payment instrument used. The creation of prepayment receipts and the subsequent application to matching prepaid invoices is a process that occurs without user intervention. You cannot manually create prepayments in Receivables, but you can review prepayment receipt history in Receivables. Prepayment Process Flow
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Receipts Chapter 9 - Page 28
• Record the payment information in your feeder system. The information is passed to Receivables.
• A public API creates a prepayment receipt in Receivables, and processes the receipt using the payment information provided. Receivables applies all prepayment receipts against the Prepayment application type, and records accounting according to the prepayment receivables activity.
• When the order is sent to Receivables for invoicing, AutoInvoice creates an invoice that is marked as prepaid. AutoInvoice initiates a postprocess matching program to identify any open prepaid invoices and search for matching prepayment receipts. When a match is found, the program unapplies the receipt from the Prepayment application type and reapplies the receipt to the corresponding invoice.
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Receipts Chapter 9 - Page 29
Cross Currency Receipts
Cross Currency Receipts
Receivables, Vision Operations (USA) (N) Receipts > Receipts > (B) Applications When a customer remits payment in a currency different from the currency of the open debit item, you can apply a cross currency receipt. Receivables lets you apply cross currency receipts for full or partial payment of an invoice, debit memo, or chargeback. When you apply a cross currency receipt, Receivables determines the transaction and receipt amounts in the functional currency. Receivables then compares these amounts to determine the foreign exchange gain or loss as a result of applying the receipt in a different currency, using this formula: (Receipt Amount as of receipt date) – (Invoice Amount as of invoice date) = Foreign Exchange Gain or Loss
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Receipts Chapter 9 - Page 30
Entering Discounts
Entering Discounts
You can review the Earned and Unearned discounts on the debit items to which a receipt was applied.
• Earned discounts are automatically calculated according to the payment terms on the transaction.
• Unearned and partial discounts are entered manually. • Use system options, customer profiles, and payment terms to control discount
calculation. • Use the maximum discount column to view the amount of allowable discount. • The largest Unearned discount a customer can take is the best Earned discount
available for the invoice.
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Receipts Chapter 9 - Page 31
Agenda
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Receipts Chapter 9 - Page 32
Chargebacks and Adjustments
Chargebacks and Adjustments
Receivables lets you create adjustments and chargebacks against transactions to which you apply receipts. You use chargebacks to create a new debit item for your customer when closing an existing debit item. For example, your customer sends payment of $75 for a $100 invoice—you apply the receipt to the invoice, then create a chargeback for the balance due. If you use Oracle Trade Management, then you can create chargebacks against receipts when resolving cash claim investigations. You can create chargebacks against receipts using either the Receivables Receipt Applications window or Trade Management. When you save the receipt application in the Applications window, the claim is created in Trade Management and the claim number passed to Receivables.
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Receipts Chapter 9 - Page 33
Chargebacks and Adjustments against Transactions
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Receipts Chapter 9 - Page 34
Chargebacks against Receipts
Chargebacks against Receipts
If you use Trade Management to track your customers’ short payments and overpayments (claims) on receipts, then Receivables claims are automatically passed to Trade Management for claim tracking, analysis, and resolution. If a chargeback is required to resolve a claim, then the chargeback is created directly in Trade Management:
• To resolve an invalid invoice-related claim, the Trade Management user can create a chargeback against the related transaction.
• To resolve an invalid non-invoice related claim (for a short payment), where there is no related transaction to create the chargeback against, the Trade Management user can create a chargeback against the receipt that held the claim. A chargeback against a receipt brings the Unresolved Claims total closer to zero and increases the Applied total for the receipt.
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Receipts Chapter 9 - Page 35
Creating a Chargeback
Creating a Chargeback
Receivables, Vision Operations (USA) or Order Management Super User, Vision Operations (USA) (N) Receipts > Receipts > (B) Apply > Applications > (B) Chargeback Note: If you have Trade Management installed, then the Trade Management user, not the Receivables user, will create these transactions to resolve invalid non-invoice related claims.
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Receipts Chapter 9 - Page 36
Credit Card Chargebacks
Credit Card Chargebacks Receivables supports business enterprise management of credit card chargebacks between
card issuers and cardholders. A credit card chargeback is an independent process that does not make use of the Receipt Applications window.
A cardholder can request a chargeback for many reasons: • Charges for undelivered goods. • Charges for goods or services different from what was ordered. • Charges for the wrong quantity of goods ordered. • Charges for goods that were not timely delivered.
A credit card chargeback takes place when a cardholder disputes a credit card charge with the credit card issuer for a transaction with the business enterprise (vendor). The credit card issuer credits (charges back) the cardholder’s account for the disputed amount, deducts the amount from the vendor’s bank account, and sends the vendor a credit card chargeback notification. The vendor records the credit card chargeback in Receivables as a negative miscellaneous receipt.
The vendor then investigates if the chargeback is valid. After investigating the chargeback request:
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Receipts Chapter 9 - Page 37
1. If the chargeback request was valid, the vendor creates a credit memo against the transaction for the chargeback amount.
2. If the chargeback request is proven to be invalid, then the vendor unapplies the credit card chargeback activity from the receipt and reapplies the receipt for the full amount. This action automatically reverses the negative miscellaneous receipt that was originally created when the vendor first recorded the credit card chargeback.
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Receipts Chapter 9 - Page 38
Working with Claims
Working with Claims
Oracle Applications treats short payments and overpayments as claims. Receivables integrates with Trade Management to let you manage these claim requests. When you create a claim in Receivables, Receivables automatically passes the claim to Trade Management for further research. Trade Management assigns a claim number and the claim investigation process begins.
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Receipts Chapter 9 - Page 39
Creating Claims
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Receipts Chapter 9 - Page 40
Automatic Claim Creation Through Lockbox and Quickcash
Automatic Claim Creation Through Lockbox and Quickcash
Using AutoLockbox, you can create claims in high volume, thus shortening the time to resolution and reducing the total cost of ownership of deductions management. Depending on how you run your business, you can choose whether or not you want to create claims for invalid transactions, credit memos, and negative and positive claims. In addition, claim functionality has been enhanced to accept and store customer reason codes through AutoLockbox and in the Receipt Applications window. Using Trade Management, you can map these reason codes to your organization’s internal codes.
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Receipts Chapter 9 - Page 41
Resolving Claims
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Receipts Chapter 9 - Page 42
Automated Settlement Methods Effectively Settle Deductions
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Receipts Chapter 9 - Page 43
Automated Settlement Methods Effectively Settle Deductions
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Receipts Chapter 9 - Page 44
Resolving Claims Not Associated to an Invoice
Resolving Claims Not Associated to an Invoice
The following resolutions occur directly in Trade Management: • For valid non-invoice related claims, you can:
- Create an on account credit memo (for a short payment) - Apply an existing credit memo (for a short payment) - Create an on account credit-cash application line (for an overpayment) - Create a debit memo (for an overpayment) - Apply an existing debit memo (for an overpayment)
• For invalid non-invoice related claims, you can: - Enter a chargeback on the receipt (for a short payment)
• For both valid and invalid non-invoice related claims, you can: - Write off the remaining amount on the receipt (for an overpayment)
The following resolution must be manually completed in Receivables. • For invalid non-invoice related claims, you can:
- Create a write-off adjustment (for a short payment)
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Receipts Chapter 9 - Page 45
Vendor Claims on Credit Card Chargebacks
Vendor Claims on Credit Card Chargebacks
Receivables, Vision Operations (USA) or Order Management Super User, Vision Operations (USA) (N) Receipts > Receipts > (B) Apply > Applications > (B) Chargeback After receiving a credit card chargeback notification, you record the chargeback in Receivables as follows:
• Find the receipt for which the chargeback was requested. • Unapply the application line and subtract the amount of the credit card chargeback. • Apply the credit card chargeback activity on a new application line on the receipt. This
will automatically generate a negative miscellaneous receipt to the value of the chargeback.
You then investigate whether the chargeback is valid and take one of the following actions depending on your findings:
• For a valid chargeback, you create a credit memo against the transaction for the chargeback amount.
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Receipts Chapter 9 - Page 46
• If you can prove that the chargeback is invalid, by providing sufficient proof of delivery or other supporting documents to the credit card issuer, you reverse the application of the credit card chargeback by:
- Finding the receipt. - Unapplying the credit card chargeback activity from the receipt. This automatically
reverses the negative miscellaneous receipt. - Restoring the original amount on the application line.
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Receipts Chapter 9 - Page 47
Resolving a Split Claim
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Receipts Chapter 9 - Page 48
Resolving a Split Claim
Resolving a Split Claim
Note: Claim reference numbers created in Receivables always start with a DED (deduction) or OPM (overpayment), for example, DED14546 or OPM12356. In Receivables, however, you will still see the original claim DED104 for $1,000 until one of the claims is resolved. When Claim DED104-2 is resolved, Receivables unapplies the Claim Investigation application for $1,000, enters the resolution for claim DED104-2, and creates two new claim investigation applications: claims DED104 and DED104-1. If you were splitting the claim into two different amounts, 400 and 600, then it will close claim DED104 and open DED104-1 and DED104-2.
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Receipts Chapter 9 - Page 49
Agenda
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Receipts Chapter 9 - Page 50
Balancing Segments
Balancing Segments
For example, if an invoice’s balancing segment that you assess late charges for has a value of “01” and the balancing segment of your late charges account is “02,” when Receivables accrues late charges for this invoice the Account Generator automatically changes the balancing segment of the late charges account to “01.” The Account Generator in Receivables uses Oracle Workflow. You can view and customize Account Generator processes through the Oracle Workflow Builder to modify the default setup (for example, to use a different balancing segment for either the late charges or Receivables account).
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Receipts Chapter 9 - Page 51
Deriving Balancing Segment Values
Deriving Balancing Segment Values
Note: Receivables does not substitute the balancing segment for miscellaneous cash, bank errors, or commitments (deposits and guarantees).
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Receipts Chapter 9 - Page 52
Disabling the Balancing Segment Substitution Process for Activities
Disabling the Balancing Segment Substitution Process for Activities
If you disable balancing segment substitution for activities, then you must define a suspense account in the event that your activities and original transactions do not post to the same balancing segment value. Otherwise, the transfer to General Ledger will not succeed.
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Receipts Chapter 9 - Page 53
AR: Disable Receivable Activity Balancing Segment Substitution
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Receipts Chapter 9 - Page 54
Agenda
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Receipts Chapter 9 - Page 55
Lockboxes
Lockboxes
Receivables displays active Lockboxes as list of value choices in the Submit Lockbox Processing window. You can disable a Lockbox by unchecking the Active box on the Lockboxes window. O
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Receipts Chapter 9 - Page 56
Using AutoLockbox
Using AutoLockbox
You specify how you want information transmitted and Receivables ensures that the data is valid before creating QuickCash receipt batches. You can automatically identify the customer who remitted the receipt and optionally use AutoCash rules to determine how to apply the receipts to your customer’s outstanding debit items. If you are using Oracle Trade Management, then during AutoLockbox and Post QuickCash processing, Receivables can automatically prepare eligible remittance lines for claim creation in Trade Management.
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Receipts Chapter 9 - Page 57
Lockbox Integration
Lockbox Integration
The lockbox receives payments and automatically creates a claim for any differences between the invoices and payments received. Receivables interprets the lockbox entries based on settings in the System Options and Lockbox setup windows. The claim preferences are configurable. Customers can communicate the reasons for the difference between their payment and the invoice. The reason codes are captured in the lockbox file and travel through the flow with the remittance line to Trade Management, where they are translated into your company’s reason codes. You can map customer reason codes to internal reason codes.
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Receipts Chapter 9 - Page 58
Historical Data Conversion
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Receipts Chapter 9 - Page 59
AutoLockbox Process
AutoLockbox Process
Three step process: 1. Import
During this step, AutoLockbox reads and formats the data from your bank file into the AutoLockbox table using an SQL *Loader script.
2. Validation The validation program checks data in the AutoLockbox tables for compatibility with Receivables. Once validated, the data is transferred into QuickCash tables. At this point, you can optionally query your receipts in the QuickCash window and change how they will be applied before submitting the final step, Post QuickCash.
3. Post QuickCash This step applies the receipts and updates your customer balances. These steps can be submitted individually or at the same time from the Submit Lockbox Processing window. After you run Post QuickCash, Receivables treats the receipts like any other receipts; you can reverse and reapply them and apply any unapplied, unidentified, or on-account amounts.
Note: AutoLockbox cannot process receipts that are not related to invoices. Process non-invoice related receipts, such as investment income, through the Receipts window using a receipt type of Miscellaneous.
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Receipts Chapter 9 - Page 60
See: Using AutoLockbox, Oracle Receivables User Guide for more information.
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Receipts Chapter 9 - Page 61
AutoLockbox Process Flow
AutoLockbox Process Flow
The illustration in this slide shows how receipt data from your bank file is imported into Receivables tables. The illustration also shows that Receivables generates the Import section when you submit the import step of AutoLockbox, and generates the Validation section when you submit the validation step of AutoLockbox. Receivables automatically generates the Post QuickCash Execution Report each time you submit Post QuickCash or AutoLockbox.
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Receipts Chapter 9 - Page 62
AutoLockbox Validation
AutoLockbox Validation
AutoLockbox validates your data by ensuring that the columns in AR_PAYMENTS_INTERFACE_ALL reference the appropriate values and columns in Receivables. AutoLockbox does not allow duplicate receipts within the same batch source for the same customer. This is the same validation Receivables performs when you manually enter receipts using the Receipts window. Important: If proper controls are not in place, it is possible to reimport and reapply receipts that AutoLockbox has already processed. We recommend that you establish standard operating procedures to ensure that users do not process the same bank file more than once using AutoLockbox. Invoice numbers are only required to be unique within a batch source. A customer can have duplicate invoice numbers as long as they belong to different batch sources; however, AutoLockbox cannot automatically apply a payment to these invoices. If a customer has more than one invoice in the system with the same number, then AutoLockbox cannot determine the invoice to apply the payment. The receipt will either be left as Unapplied (if the customer number or Magnetic Ink Character Recognition, MICR, number is provided) or Unidentified (if the customer number or MICR number is not provided). AutoLockbox completes the following validations:
• Transmission Level Validation
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Receipts Chapter 9 - Page 63
• Lockbox Level Validation • Batch Level Validation • Receipt Level Validation • Overflow Level Validation • Customer Validation • Currency Validation
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Receipts Chapter 9 - Page 64
AutoLockbox and Customer Identification
AutoLockbox and Customer Identification
The AutoLockbox validation program will identify a customer for a receipt using the matching number, only if all of the transactions listed to be paid by this receipt are associated with the same customer:
• If a unique customer cannot be determined, AutoLockbox imports the receipt and assigns it a status of Unidentified.
• If a unique customer cannot be determined and duplicate invoices are supplied as the matching number for a receipt, AutoLockbox does not validate the receipt because it cannot determine how to apply the receipt.
You can use the validation section of the Lockbox Processing Report to examine transactions that AutoLockbox could not apply because the customer could not be uniquely identified.
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Receipts Chapter 9 - Page 65
AutoLockbox Transmissions
AutoLockbox Transmissions
The table in this slide illustrates examples of four separate AutoLockbox transmissions that include duplicate invoice numbers. Assume that in each transmission, AutoAssociate is set to Yes, the remitting customer is Customer ABC, and the receipt information includes the invoice number but not the customer name. In the second example, Lockbox is able to identify the receipt because the invoices belong to the same customer. However, since the invoices have the same number, Lockbox cannot determine to which invoice to apply the receipt, so the receipt is left Unapplied. Note: Depending on your setup, Lockbox might create a claim for an unmatched remittance. In the third example, Customer XYZ is related to Customer ABC and there are two invoices with the same invoice number. In this case, Lockbox will apply the receipt to the invoice that belongs to the remitting customer (Customer ABC), if the receipt record includes the customer or MICR number; otherwise, Lockbox assigns the receipt a status of Unidentified. In the last example, two invoices with the same number exist for two different customers. Lockbox does not validate the receipt because it cannot determine how to apply the receipt. You can review receipts that failed the validation step in the Lockbox Execution Report.
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Receipts Chapter 9 - Page 66
Applying Receipts using AutoLockbox
Applying Receipts using AutoLockbox
To successfully apply a receipt, AutoLockbox must know the name or number of the remitting customer and to which transaction each receipt should be applied. If the Lockbox transmission includes both the customer name or number and the transaction to which each receipt should be applied, AutoLockbox uses this information to apply the receipts during Post QuickCash. If customer information is not provided, you can set up your Lockbox to use matching rules to identify the remitting customer and partially or fully apply each receipt. A Lockbox transmission usually includes matching numbers. These are most often transaction numbers, but they can also be other types of numbers, such as a purchase order or sales order number. To use matching rules, you need to specify a Match Receipts By method and set the AutoAssociate parameter to Yes when defining your Lockbox. The Match Receipts By method determines which type of number to search for during the validation step. When it finds a match, AutoLockbox identifies the customer using the information from the matched transaction and then applies the receipt during the final step, Post QuickCash. If AutoLockbox cannot identify the customer or the transaction to apply the receipt to, it assigns the receipt a status of Unidentified. If AutoLockbox identifies the customer for a receipt but cannot determine which transaction this receipt should be applied to, AutoLockbox might create a claim, depending on your setup.
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Receipts Chapter 9 - Page 67
If you did not define your Lockbox to automatically create claims, or if you did but no remittance lines are eligible, then AutoLockbox applies the receipt using the AutoCash Rule Set defined for this customer. AutoLockbox can also import and apply cross currency receipts. You can pay for another customer’s invoices through AutoLockbox if you have set up a relationship between these customers or the system option Allow Payment of Unrelated Invoices is set to Yes for this Lockbox submission. The paying customer should be identified by a customer or MICR number on the receipt record. Additionally, all invoices listed to be paid by one receipt must belong to the same customer; otherwise, Lockbox imports the receipts as Unapplied. If the Allow Payment of Unrelated Invoices option is set to No in the System Options window or for this Lockbox submission, you need to set up a relationship between the customers before you can make applications in this way. You can also set up a party paying relationship. Note: When applying a receipt to an invoice through AutoLockbox, AutoLockbox does not realize discounts. This is an operation of the Post QuickCash program. If the customer’s credit profile and payment terms are set to Allow Discounts, Post QuickCash will automatically take the discount. The discount taken will also depend on how you set the Allow Unearned Discounts and Discount on Partial Payment system options. The discount can be manually overridden in the Receipts window.
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Receipts Chapter 9 - Page 68
Creating Claims Using AutoLockbox
Creating Claims Using AutoLockbox
You can initiate claim creation: • Manually, when applying receipts in the Applications window or in the QuickCash
window. • Automatically, when importing receipts through AutoLockbox.
Receivables can automatically initiate claim creation during AutoLockbox and Post QuickCash processing. Additionally, you can create claims when manually entering receipts in the Applications window or in the QuickCash window. You can also create claims directly in Trade Management. Claims can be either invoice related or non-invoice related:
• If a customer short pays a particular invoice, then you can create an invoice-related claim. Invoice-related claims take the currency of the invoice.
This type of claim places the related invoice in dispute; the invoice remains open until the claim is resolved. You can choose to age or summarize disputed transactions in aging reports. Note: In Receivables, invoice-related claims are always short payments. If you receive an overpayment that is related to an invoice, then you should fully apply the invoice and record the remaining amount as a non-invoice related claim using the Claim Investigation application type.
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Receipts Chapter 9 - Page 69
• If a customer includes a deduction or overpayment on a remittance but does not indicate a related invoice number, then you can create a non-invoice related claim using the Claim Investigation application type. Non-invoice related claims take the currency of the receipt.
This type of claim is an open receipt credit; the receipt remains open until the claim is resolved. You can choose to age or summarize open credits. Note: A negative claim investigation is a positive claim in Trade Management, because Trade Management and Receivables are on opposite sides of the balance sheet. Trade Management is a liability/expense product while Receivables is an asset/revenue product.
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Receipts Chapter 9 - Page 70
Importing and Applying Cross Currency Receipts
Importing and Applying Cross Currency Receipts
AutoLockbox can import and apply cross currency receipts for each currency defined in your system. For example, your functional currency is the US dollar, and you create invoices for your customers in that currency. However, you have many international customers, so you need to accept payments in different currencies.
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Receipts Chapter 9 - Page 71
Lockbox Execution Report
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Receipts Chapter 9 - Page 72
Receipt to Receipt Applications
Receipt to Receipt Applications
You can net receipts in Receivables. To net receipts, you apply a receipt against another open receipt, and then apply the resulting unapplied receipt balance to a transaction. Open receipts include receipts that have:
• Unapplied cash • On-account cash • Open claim investigation applications
You can also apply one receipt against another receipt that has an open claim investigation application. A claim investigation application results from either a non-invoice related deduction or an overpayment. Note: Receivables automatically updates Trade Management when you make a receipt application against a second receipt that has an open claim investigation. Note: When netting receipts, both receipts must be in the same currency. You can also net a QuickCash receipt against multiple open receipts. Additionally, Receipt to Receipt Applications provide you with an efficient approach to settling open cash, because it eliminates the need to open multiple receipts to apply on-account and unapplied cash. In other words, from just one receipt, you can apply one receipt to another open receipt, and the balances and accounting are automatically updated on both receipts.
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Receipts Chapter 9 - Page 73
Using Oracle Trade Management to manage claims, you can now apply receipts that have open claim investigations, which will in turn update amounts or cancel claims in Trade Management. This lets you net short payments with overpayments in the system. For example, you might do this if you determined that a short payment on a remittance was due to an overpayment on another receipt that resulted in a Claim Investigation. Receipt Write-off for Short Payments You can now manually write off short payments on receipts. This functionality includes the ability to set approval limits for write-off amounts at the user and system level. This can be done in Receivables and in Trade Management.
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Receipts Chapter 9 - Page 74
Automated Receipt Handling for Credits
Automated Receipt Handling for Credits
To handle the situations described above promptly and efficiently, use Automated Receipt Handling for Credits. You can set the receipt handling policy to automatically refund both credit card and non-credit card payments, or apply receipts to on-account cash. When refunding, some credits require careful investigation before funds are returned to the customer. Receivables recognizes when user intervention is required and automatically places questionable items on account. Depending on the outcome of the investigation, you can then initiate the refund or choose another receipt application. You can also set a refund minimum for your enterprise. Amounts less than the minimum are placed on account, letting you manage these receipts according to your business practices.
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Receipts Chapter 9 - Page 75
Automatic Receipts
Automatic Receipts
You can also manage your cash flow by deciding when, where, and how much you should remit to your bank. Automatic receipts also let you manage your customer risk and reconcile bank statements. You can decide how you wish to process the receipts from creation to remittance and risk elimination. O
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Receipts Chapter 9 - Page 76
Bank Remittance Process
Bank Remittance Process
Once created, automatic receipts can be reapplied in the same way as manual receipts. You can reverse an automatic receipt only if its status is Approved. Note: You cannot create cross currency receipt applications using Automatic Receipts. O
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Receipts Chapter 9 - Page 77
Creating Automatic Receipts
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Receipts Chapter 9 - Page 78
Automatic Receipts and Remittance Process Overview
Automatic Receipts and Remittance Process Overview
The graphic in this slide provides an overview of the Automatic Receipts and Remittance processes. See: Automatic Receipts, Oracle Receivables User Guide for complete information about the automatic receipts and remittance process.
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Receipts Chapter 9 - Page 79
Credit Cards
Credit Cards
By providing a credit card number as payment, your customer expects that the credit card issuer will transfer funds to your bank account as payment for their open debit items. The Automatic Receipts program lets you collect payments according to a predefined agreement with your customer. The Automatic Remittances program transfers funds from the customer’s bank account to yours on the receipt maturity date. Credit Card Payment Process You must complete these steps to process credit card payments in Receivables:
• Assign a credit card receipt method and credit card bank account to the transactions that you want to pay by credit card. This assignment flags transactions for credit card payment.
• Run the Automatic Receipts program to select the transactions that are flagged for credit card payment. The Automatic Receipts program creates a batch of receipts (payments) for the selected transactions.
• Approve the batch of automatic receipts to reserve the payment amount from your cardholder’s account and close the selected transactions. The Approve Automatic Receipts program sends the receipt batch to Oracle Payments for credit card authorization. Oracle Payments integrates with third party payment processors to
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Receipts Chapter 9 - Page 80
authorize your customer’s credit card account number and assign an approval code to the transaction.
- If authorization is successful, then Oracle Payments assigns the approval code and the receipt is approved. If authorization is not successful, then the receipt is rejected from the batch.
- To decrease processing time, you can create and approve your automatic receipts in one step. Note: Oracle Payments can authorize your customer’s credit card account number at different times during the payment processing flow. For example, credit card authorization can take place at the time of the order (in Oracle Order Management) or at the time of billing (in Receivables).
• Create and approve a remittance batch to request transfer of funds from the credit card issuer to your bank.
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Receipts Chapter 9 - Page 81
Processing Credit Card Refunds
Note:
Processing Credit Card Refunds is different from processing Credit Card Chargebacks. While the customer requests a credit card refund directly from you, for chargebacks the customer interacts directly with the credit card issuer. For more information, see the following topics:
• Credit Card Chargebacks • Vendor Claims on Credit Card Chargebacks • Credit Card Refunds
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Receipts Chapter 9 - Page 82
Processing Credit Card Transactions
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Receipts Chapter 9 - Page 83
Creating Credit Card Transactions
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Receipts Chapter 9 - Page 84
Credit Card Refunds
Credit Card Refunds
To create a credit card refund, you apply a special credit card refund application to the receipt, which generates a negative miscellaneous receipt. The Automatic Remittances program processes this negative receipt, thereby transferring funds from your account back to your customer’s credit card. See: Credit Cards, Oracle Receivables User Guide for detailed information about the steps that are required to process credit card refunds. Differences between Credit Card Refunds and Credit Card Chargebacks The Credit Card Refunds functionality differs from Credit Card Chargebacks in these ways:
• In Credit Card Refunds, the customer requests a refund directly from you, the vendor, while in Credit Card Chargebacks the customer interacts directly with the credit card issuer. For Credit Card Chargebacks, the credit card issuer credits the customer account for the disputed amount, deducts the amount from the vendor bank account, and notifies the vendor that a credit card chargeback has occurred.
• Both Credit Card Refunds and Credit Card Chargebacks make use of negative miscellaneous receipts. However, in Credit Card Refunds miscellaneous receipts must be remitted for customers to obtain their refunds. In Credit Card Chargebacks, the
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Receipts Chapter 9 - Page 85
customer has already received the disputed amount and the miscellaneous receipt is created and remitted solely to ensure accurate accounting and reconciliation.
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Receipts Chapter 9 - Page 86
Quiz
Answers: 2 Quiz Specifications
• The correct answer is “Manual receipts updates a customer’s account balance immediately, while QuickCash receipts do not immediately affect a customer’s account balance. After reviewing a QuickCash batch for accuracy, you must run Post QuickCash to update your customer’s account balances”.
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Receipts Chapter 9 - Page 87
Quiz
Answers: 1, 2, 3 Quiz Specifications
• The correct answer is “The AR: Disable Receivable Activity Balancing Segment Substitution profile option impacts these activities: Adjustments, Discounts (earned and unearned), Late charges, and Activity applications (such as receipt write-off activity, short term debt, and claims investigation)”.
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Receipts Chapter 9 - Page 88
Quiz
Answers: 2 Quiz Specifications
• The correct answer is “You cannot create cross currency receipt applications using Automatic Receipts”. O
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Receipts Chapter 9 - Page 89
Quiz
Answers: 1, 3 Quiz Specifications
• The correct answer is “Five receipt statuses are available: Approved, Confirmed, Remitted, Cleared, and Reversed”. O
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Receipts Chapter 9 - Page 90
Summary
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Implement Receipts Chapter 10 - Page 1
Implement Receipts Chapter 10
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Implement Receipts Chapter 10 - Page 2
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Implement Receipts Chapter 10 - Page 3
Implement Receipts
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Implement Receipts Chapter 10 - Page 4
Objectives
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Implement Receipts Chapter 10 - Page 5
Agenda
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Implement Receipts Chapter 10 - Page 6
Overview of Receipt Setup
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Implement Receipts Chapter 10 - Page 7
Receivables Activity Types
Receivables Activity Types
You define Receivables activities according to activity type. An activity type determines whether the activity uses a distribution set or GL account, where Receivables derives the tax rate code, and in which windows an activity appears in the list of values. Receivables provides these activity types:
• Adjustment: You use activities of this type in the Adjustments window. You must create at least one activity of this type.
• Bank Error: You use activities of this type in the Receipts window when entering Miscellaneous transactions. You can use this type of activity to help reconcile bank statements using Oracle Cash Management.
• Claim Investigation: You use activities of this type in the Receipts Applications and QuickCash windows when placing receipt overpayments, short payments, and invalid Lockbox transactions into claim investigation. The receivable activity that you use determines the accounting for these claim investigation applications. This activity type is for use only with Oracle Trade Management.
• Credit Card Chargeback: Use activities of this type in the Receipts Applications window when recording credit card chargebacks. This activity includes information about the General Ledger clearing account used to clear the chargebacks. Receivables credits the
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Implement Receipts Chapter 10 - Page 8
clearing account when you apply a credit card chargeback, and then debits the account after generating the negative miscellaneous receipt.
• Credit Card Refund: You use activities of this type in the Receipts Applications window when processing refunds to customer credit card accounts. This activity includes information about the General Ledger clearing account used to clear credit card refunds. You must create at least one activity of this type to process credit card refunds.
• Earned Discount: You use activities of this type in the Adjustments and the Remittance Banks windows. Use this type of activity to adjust a transaction if payment is received within the discount period (determined by the transaction payment terms).
• Late Charges: You use activities of this type in the System Options window when you define a late charge policy. You must define a late charge activity if you record late charges as adjustments against overdue transactions. If you assess penalties in addition to late charges, then define a separate activity for penalties.
• Miscellaneous Cash: You use activities of this type in the Receipts window when entering Miscellaneous transactions. You must create at least one activity of this type.
• Payment Netting: You use activities of this type in the Applications window and in the QuickCash Multiple Application window when applying a receipt against other open receipts. You can define multiple receivables activities of this type, but only one Payment Netting activity can be active at any given time.
• Prepayments: Receivables uses activities of this type in the Applications window when creating prepayment receipts. You can define multiple receivables activities of this type, but only one prepayment activity can be active at any given time.
• Refund: Use activities of this type in the Applications window to process automated non-credit card refunds.
• Unearned Discount: You use activities of this type in the Adjustments and the Remittance Banks windows. Use this type of activity to adjust a transaction if payment is received after the discount period (determined by the transaction payment terms).
• Other Types of Receivables Activities include: Endorsements, Receipt Write-Off, and Short-Term Debt.
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Implement Receipts Chapter 10 - Page 9
Receivables Activity Setup
Receivables Activity Setup
Define Receivables Activities to default accounting and tax information to specific Receivables transaction activities. The steps are:
• Select an operating unit. • Select an Activity Type. • Select a GL Account Source to indicate how Receivables derives the accounts for the
expense or revenue generated by this activity: - Activity GL Account: Allocate the expense or revenue to the general ledger
account that you specify. - Distribution Set: Allocate the expense or revenue to the distribution set that you
specify. (Miscellaneous Cash activity type only) - Revenue on Invoice: Allocate the expense or revenue net of any tax to the
revenue account or accounts specified on the invoice. (Adjustment, Earned Discount, or Unearned Discount activity types only)
- Tax Rate Code on Invoice: Allocate the net portion using the Expense/Revenue accounts specified by the tax rate code on the invoice. (Adjustment, Earned Discount, or Unearned Discount activity types only)
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Implement Receipts Chapter 10 - Page 10
• Select a Tax Rate Code Source: - None: Allocates the entire tax amount according to the specified GL Account
Source. Choose this option if you do not want to separately account for tax.. - Activity: Allocate the tax amount to the Asset or Liability tax accounts specified by
the Receivables Activity. - Invoice: Distribute the tax amount to the tax accounts specified by the tax rate
code on the invoice. You cannot choose this option if the activity type is Miscellaneous Cash or Late Charges.
• Enter the GL account, distribution set (if applicable), and tax rate code (if applicable). • Complete the remaining setup steps, if applicable.
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Implement Receipts Chapter 10 - Page 11
Receivables Activity Example
Receivables Activity Example
This example shows how Receivables derives the GL accounts on an Adjustment Receivables Activity. You want to adjust an invoice by decreasing the line amount by $120. If the Adjustment Receivables Activity is set with a Tax Rate Code Source of:
• None: Receivables does not calculate tax. The only accounting is specific to the adjustment.
• Invoice: Receivables uses the tax rate code on the original invoice to distribute the tax amount.
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Implement Receipts Chapter 10 - Page 12
Receipt Class, Receipt Method, and Bank Account Relationship
Receipt Class, Receipt Method, and Bank Account Relationship
The relationship between receipt class, receipt method, and bank account enables accounting defaults. When a receipt is entered:
• Receipt method and bank account are specified. • Receivables processes the receipt according to the receipt class that the receipt method
is associated with. • Accounting for the receipt is derived from the bank account of the receipt method.
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Implement Receipts Chapter 10 - Page 13
Defining Remittance Banks and Bank Accounts
Defining Remittance Banks and Bank Accounts
Define all of the banks and bank accounts that you use to remit payments. You can define multiple currency bank accounts to accept payments in more than one currency. You define banks and bank accounts in Oracle Cash Management. See: Create Banks and Define Bank Branches, Oracle Cash Management User Guide for more information.
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Implement Receipts Chapter 10 - Page 14
Defining Receipt Classes
Defining Receipt Classes
Receivables, Vision Operations (USA) (N) Receivables > Setup > Receipts > Receipt Classes Receipt classes determine how Oracle Receivables processes receipts. Specify for each receipt class:
• Creation Method – How to create receipts - Manual: Standard, quick, and lockbox receipts - Automatic: Automatic and credit card receipts. Oracle Payments processes funds
capture. - Bills Receivable - Bills Receivable Remittance
• Remittance Method – How to derive the remittance account for automatic receipts - No Remittance: Receipts that are not remitted.
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Implement Receipts Chapter 10 - Page 15
- Standard: Regular remittance. - Factoring: Short term debt. - Standard and Factoring: Both types in a batch.
Note: Cash receipts reconciled in Oracle Cash Management must be remitted. • Clearance Method – How to reconcile receipts before posting to GL
- Direct: Clear at time of receipt entry. - By Automatic Clearing: Clear using the Automatic Clearing program. - By Matching: Clear receipts manually in Oracle Cash Management.
• Receipt Method – How to account for receipt entry and receipt application - A receipt method is tied to a receipt class and takes on the attributes of that receipt
class, including creation method, remittance, and clearing. - One or more receipt methods are associated with each receipt class. - A receipt method includes a funds capture method, to identify the way customers
remit payment to you. - Each receipt method can be associated with one or more remittance bank
accounts. Each bank account determines the GL accounts to use when you enter or apply a receipt.
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Implement Receipts Chapter 10 - Page 16
Associating a Bank Account With a Receipt Method
Associating a Bank Account with a Receipt Method
Receivables, Vision Operations (USA) (N) Setup > Receipts > Receipt Class > (B) Bank Accounts Associate bank account information with each receipt class and receipt method combination.
• You can assign more than one remittance bank to each receipt class and receipt method combination.
• Specify the bank name, branch, account, and currency for your remittance bank using the list of values.
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Implement Receipts Chapter 10 - Page 17
Defining Receipt Sources
Defining Receipt Sources
Receivables, Vision Operations (USA) (N) Setup > Receipts > Sources Define a receipt source to determine:
• Creation method (automatic or manual) • Batch numbering • Default receipt class, receipt method, and bank account
Set the AR: Receipt Batch Source profile option in order to define default receipt sources either by user, responsibility, application, or site.
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Implement Receipts Chapter 10 - Page 18
Defining AutoCash Rules
Defining AutoCash Rules
Receivables, Vision Operations (USA) (N) Setup > Receipts > AutoCash Rules AutoCash Rule Sets determine how a QuickCash receipt is applied to open debit items.
• Specify whether earned or unearned discounts will be calculated for receipt applications. • Enable late charges or disputed items to be included in the open balance calculation. • Specify whether any remaining remittance amounts from partial payment applications
will be saved as unapplied or on account. • Enter a sequence to specify the order in which to automatically apply receipts for this
set. • Enter one or more rules for receipt application from the AutoCash Rule options.
- Apply Oldest Invoice First: Matches receipts to customer debit items, starting with the oldest outstanding debit item. Receivables determines the oldest debit item using the Open Balance Calculations values for the AutoCash rule set.
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Implement Receipts Chapter 10 - Page 19
- Clear Account: Applies receipts to the customer’s calculated account balance when the balance exactly matches the receipt amount.
- Clear Past Due Invoices: Closes all past due debit and credit items when the calculated past due balance exactly matches the receipt amount.
- Clear Past Due Invoices Grouped by Payment Terms: Groups past due invoices by their payment term, and then uses the oldest transaction due date within the group as the group due date.
- Match Payment With Invoice: Applies receipts to a single invoice, debit memo, or chargeback when the remaining amount due matches the receipt amount.
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Implement Receipts Chapter 10 - Page 20
Defining Application Rule Sets
Defining Application Rule Sets
Application Rule Sets define how to apply partial payments to open invoice items and how discounts affect open balances.
• Receivables provides the following standard application rules: - Line First - Tax After - Line First - Tax Prorate - Prorate All
• You can also define your own application rules. • Application Rule Sets can be defined for each transaction type, or at the system level.
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Implement Receipts Chapter 10 - Page 21
Setting Up Cross Currency Receipts
Setting Up Cross Currency Receipts
If your organization needs to apply receipts to transactions in different currencies, set up Receivables for cross currency receipts. To set up cross-currency receipts:
• Define a cross currency rounding account – Receivables uses this account to record any rounding error amounts created during a cross currency receipt application for currencies that have a fixed rate relationship.
• Define a suspense account – General Ledger uses this account to balance the posting of multi-currency journal entries that result from applying cross-currency receipts.
• Set the Journals: Display Inverse Rate profile option – Set this profile option to determine how General Ledger displays conversion rates in the Exchange Rate window.
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Implement Receipts Chapter 10 - Page 22
System Options for Receipt Accounting
System Options for Receipt Accounting
Receivables, Vision Operations (USA) (N) Setup > System > System Options > (T) Accounting The Accounting tabbed region of the System Options window is used to specify accounting flexfields for recording receipt activity. These include:
• Realized Gains Account: To record gains on foreign currency exchange rate fluctuations between the time the transaction is entered and the time the receipt is applied.
• Realized Loss Account: To record losses on foreign currency exchange rate fluctuations between the time the transaction is entered and the time the receipt is applied.
• Unallocated Revenue Account: To record unallocated revenue when you apply a cash receipt with a balance other than zero to an invoice with a zero balance.
• Cross Currency Rounding Account: To record any rounding error amounts created during a cross currency receipt application for currencies that have a fixed rate relationship.
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Implement Receipts Chapter 10 - Page 23
Miscellaneous System Options Relating to Receipts
Miscellaneous System Options Relating to Receipts
Receivables, Vision Operations (USA) (N) Setup > System > System Options > (T) Miscellaneous Discount Basis: Basis used when calculating discounts on invoices. Receivables uses this value as the default Discount Basis in the Payment Terms window. Choose one of the following discount methods:
• Invoice Amount: To calculate the discount amount based on the sum of the tax, freight charges, and line amounts of your invoices.
• Lines Only: To calculate the discount amount based on only the line amounts of your invoices.
• Lines, Freight Items and Tax: To calculate the discount amount based on the amount of line items, freight, and tax of your invoices, but not freight and charges at the invoice header level.
• Lines and Tax, not Freight Items and Tax: Choose this option to calculate the discount amount based on the line items and their tax amounts, but not the freight items and their tax lines, of your invoices.
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Implement Receipts Chapter 10 - Page 24
AutoCash Rule Set (optional): Used when entering a receipt for a customer whose profile class has not been assigned an AutoCash Rule Set. The AutoCash Rule set and the Discount Grace Days specified in a customer’s credit profile determine the sequence of AutoCash Rules that Receivables uses when Post QuickCash is run to automatically apply receipts to this customer’s open debit items. Allow Unearned Discounts: Enable this option to allow unearned discounts. Unearned discounts are discounts a customer takes after the discount period passes. You define discount periods when defining your payment terms. Discount on Partial Payment: Enable this option to allow discounts to be taken for partial payments. If this option is enabled, you can still choose not to allow discounts on partial payments at the transaction level when defining Payment Terms. Require Billing Location: Enable this option to require that a bill-to location be associated with a cash receipt. If this option is enabled, the Post QuickCash program does not create receipts that do not have billing locations. If you enable this option, you should also enable the Require Billing Location option when defining your Lockboxes; otherwise, Receivables displays an error when you submit AutoLockbox. Invoices per Commit: Enter the number of invoices you want the Automatic Receipt program to process before saving. Receipts per Commit: Enter the number of receipts you want the Automatic Receipt program to process before saving. Suggestion: Set the Receipts per Commit option to a large number to avoid intermediate saves in the program. You should use numbers that are large enough to handle your largest automatic receipt batches. To help determine the numbers to use, look at the end of the log file for your largest Automatic Receipt Creation Batch; this gives you the number of receipts marked for this batch. Enter this number in the Receipts per Commit field. You should only reduce the number if you run out of rollback segments. Chargeback Due Date: The default due date to use when creating a chargeback:
• Current Date: The system date. • Deposit Date: The receipt deposit date. • Open Invoice Due Date: The due date of the invoice or debit memo. • Receipt Date: The date that the receipt was entered.
Application Rule Set: Determines the default payment steps when you use the Applications window or Post QuickCash to apply receipts. Receivables uses this rule set if none is assigned to the debit item’s transaction type. Note: If you are using Oracle Trade Management, then use the Claims tabbed region of the System Options window to indicate how to evaluate, during Lockbox and Post QuickCash processing, your customers’ remittances for claim creation. See: Claims System Options, Oracle Receivables Implementation Guide for more information.
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Implement Receipts Chapter 10 - Page 25
Profile Options
Profile Options
System Administrator (N) Profile > System The default profile options are:
• AR: Allow Overapplication in Lockbox: Controls how AutoLockbox handles receipts when the payment amount is greater than the balance due on a transaction.
• AR: Always Default Transaction Balance for Applications: Determines the default amount applied value that displays in the Applications window. The default value includes discount amounts, where applicable.
- If you set the profile option to Yes, then the default amount applied is the remaining transaction amount.
- If you set the profile option to No, or if a null value exists, then the defaulting rule is: 1. If the unapplied receipt amount is greater than or equal to the transaction, then the
default amount applied is the remaining transaction amount.
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Implement Receipts Chapter 10 - Page 26
2. If the unapplied receipt amount is less than the remaining transaction amount, then the default amount applied is the unapplied receipt amount.
3. If the unapplied receipt amount is negative, then the default amount applied is the remaining transaction amount (to prevent the negative unapplied amount from increasing).
• AR: Application GL Date Default: Determines how Receivables determines the default GL date when you apply receipts.
• AR: Cash - Allow Actions: Determines whether you can create adjustments and chargebacks when applying receipts in the Applications window.
• AR: Commit Between Validations in Lockbox: Determines whether the AutoLockbox program will commit (save) after validating each record in a Lockbox transmission.
• AR: Create Bank Charges: Determines whether users can create bank charges when entering receipts in Receivables.
• AR: Include Receipts at Risk in Customer Balance: Controls whether Receivables displays items at risk and includes them when calculating account balances in the Account Details window.
• AR: Invoices with Unconfirmed Receipts: Select whether to adjust or credit invoices selected for automatic receipt.
• AR: Receipt Batch Source: Enter the default receipt source for the Batch field in the Receipts window and Receipt Batches window.
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Implement Receipts Chapter 10 - Page 27
Agenda
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Implement Receipts Chapter 10 - Page 28
Implementation Considerations for Receipts
Implementation Considerations for Receipts
• Set up GL accounts before setting up bank accounts in Cash Management. • Decide whether you want a different GL account for each status of cash or only one
cash account. • Set up receipt information so that the setup data can default. • Set the AR: Receipt Batch Source profile option so that users do not have to enter
payment information at the batch level.
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Implement Receipts Chapter 10 - Page 29
Other Implementation Considerations for Receipts
Other Implementation Considerations for Receipts
• Define AutoCash Rule Sets for a customer when using AutoLockbox or QuickCash. • You must define receivables activities for earned and unearned discounts. • Define receivables activities before setting up bank accounts in Cash Management. • If you select Tax Rate Code on Invoice as the GL Account Source when setting up
receivables activities, you must either assign tax accounts to all tax rate codes or make sure the activity is selected only when the tax rate code on the invoice has tax accounts assigned. You assign tax accounts to tax rate codes in Oracle E-Business Tax. See: Setting Up Tax Accounts, Oracle E-Business Tax User Guide for more information.
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Implement Receipts Chapter 10 - Page 30
Setting Up Lockboxes
Setting Up Lockboxes
Considerations for setting up lockboxes include: • Create Transmission Formats that accept customer reference and customer reason
codes. You must first work with your banks to accept customer reference and customer reason codes in your lockbox.
• If you are using Oracle Trade Management, enable the Evaluate for Claim Eligibility option to let lockbox automatically create claims for eligible remittance lines. Lockbox looks at your Claims system options to determine which imported receipts are eligible for claim creation.
• Use the Claims tabbed region of the System Options window to indicate claim handling preferences.
• Attach a General Ledger account for claims on the receipt class or receipt methods setup. • Perform Customer Reason Code Mapping in Oracle Trade Management.
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Implement Receipts Chapter 10 - Page 31
Function Security
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Implement Receipts Chapter 10 - Page 32
Quiz
Answers: 1 Quiz Specifications
• The correct answer is “You use activities of this type in the Receipts Applications window when processing refunds to customer credit card accounts. This activity includes information about the General Ledger clearing account used to clear credit card refunds. You must create at least one activity of this type to process credit card refunds”.
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Implement Receipts Chapter 10 - Page 33
Quiz
Answers: 1, 2, 3 Quiz Specifications
• The correct answer is “Receivables provides the following standard application rules: Line First - Tax After, Line First - Tax Prorate, and Prorate All”. O
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Implement Receipts Chapter 10 - Page 34
Quiz
Answers: 2 Quiz Specifications
• The correct answer is “By Matching is a type of Clearance method for receipt classes”.
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Implement Receipts Chapter 10 - Page 35
Quiz
Answers: 1, 2, 4 Quiz Specifications
• The correct answer is “The system options related to receipts are: Discount Basis, AutoCash Rule Set, Allow Unearned Discounts, Discount on Partial Payment, Require Billing Location, Invoices per Commit, Receipts per Commit, Chargeback Due Date, Application Rule Set”.
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Implement Receipts Chapter 10 - Page 36
Summary
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Tax Processing Chapter 11 - Page 1
Tax Processing Chapter 11
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Tax Processing Chapter 11 - Page 2
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Tax Processing Chapter 11 - Page 3
Tax Processing
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Tax Processing Chapter 11 - Page 4
Objectives
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Tax Processing Chapter 11 - Page 5
Agenda
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Tax Processing Chapter 11 - Page 6
Oracle E-Business Tax Architecture Overview
Oracle E-Business Tax Architecture Overview
Oracle E-Business Tax is a centralized tax engine that provides tax determination, tax calculation, and tax repository services for Payables and Receivables transactions. Oracle E-Business Tax consists of a tax knowledge base, a variety of tax services that respond to specific tax events, a set of repositories (for tax content and tax recording) that allows organizations to manage their local tax compliance needs in a proactive manner, and an interface that allows integration with external tax content providers through a single integration point. E-Business Tax uses the information entered on the transaction line to calculate tax on Receivables transactions and return the results to Receivables. E-Business Tax records all transaction tax data for use in your tax reports. Any errors in tax calculation originate from and are corrected in E-Business Tax. E-Business Tax provides many tools for testing your tax configuration prior to using the configuration on transactions. Note: In the initial release of E-Business Tax the integration with external tax content providers is limited to the calculation of US Sales and Use Tax on Receivables transactions. See: Oracle E-Business Tax Implementation Guide and Oracle E-Business Tax User Guide for complete information about setting up and using Oracle E-Business Tax.
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Tax Processing Chapter 11 - Page 7
Oracle E-Business Tax Key Concepts And Examples
Oracle E-Business Tax Key Concepts and Examples
Tax Authority A government entity that regulates tax law, and administers and/or audits one or more taxes. Some examples of tax authorities are:
• Brazil - Secretaria da Fazenda Estadual (State Revenue Office) • Brazil - Secretaria da Receita Federal (Federal Revenue Office) • California, USA - California State Board of Equalization • Canada - Canadian Customs and Revenue Agency • France - Ministry of Economy, Finance and Industry • Germany - Federal Ministry of Finance • India - Central Board of Customs and Excise • Singapore - Inland Revenue Authority of Singapore • United Kingdom - HM Customs and Excise
Tax Regime
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Tax Processing Chapter 11 - Page 8
A tax regime is the set of tax regulations that determine the treatment of one or more taxes administered by a tax authority. Some examples of tax regimes are:
• Brazil - RICMS - ICMS Regulation • Brazil - RIPI - IPI Regulation • California, USA - California Sales Tax • Canada - Canadian Goods and Services Tax • India - Excise Tax • Singapore - Singapore Goods and Services Tax • United Kingdom - UK VAT
Tax In Oracle E-Business Tax, a tax is a specific charge within a tax regime imposed by a government through a fiscal or tax authority. Some examples of taxes are: Tax Regime Taxes ------------------------------------------------ --------------------------------------------------- RICMS - Regulamento do ICMS ICMS, ICMS-ST (Tributary Substitution) RIPI - Regulamento do IPI IPI California Sales Tax State Sales Tax California Sales Tax County Sales tax Canadian Goods and Services Tax GST Canadian Provincial Sales Tax PST India Excise and Customs Excise Tax Singapore Goods and Services Tax GST UK VAT UK VAT
Tax Jurisdiction A tax jurisdiction is a geographic area where a tax is levied by a specific tax authority. Some examples of tax jurisdictions are: Tax Geographic Zone Jurisdiction -------------- ---------------- ------- ---------------- ---------------- ICMS São Paulo São Paulo ICMS IPI Brazil Brazil IPI State Sales Tax California (State) California State Sales Tax County Sales Tax San Francisco (County) County Sales Tax GST Canada Canada GST PST Ontario Ontario PST Excise Tax India India Excise Tax GST Singapore Singapore GST
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Tax Processing Chapter 11 - Page 9
UK VAT UK UK VAT
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Tax Processing Chapter 11 - Page 10
Calculating Tax on Transactions
Calculating Tax on Transactions
This diagram is an overview of the tax process in E-Business Tax and Receivables. The tax rate code and tax rules are defined within E-Business Tax for the applicable tax regime and tax. The E-Business Tax tax rules engine uses the tax rate code assigned to the invoice transaction line to calculate the tax, making use of the applicable tax rules. After calculating the tax, Receivables displays the transaction with tax distributions. E-Business Tax records all tax data for use in tax reporting.
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Tax Processing Chapter 11 - Page 11
Calculating Tax Using the Tax Classification Code
Calculating Tax Using the Tax Classification Code
This diagram is an overview of the tax process in E-Business Tax and Receivables using the migrated data approach. E-Business Tax lets you calculate tax on transactions in a manner similar to the Release 11i tax model. Release 11i Receivables tax codes migrate to E-Business Tax as tax classification codes. Tax classification codes are assigned to items, customers, sites, or revenue accounts. A particular tax classification code defaults to a specific invoice transaction line according to the rules that apply to the transaction. E-Business Tax either uses the migrated default assignment or a new assignment that you create using application tax options in E-Business Tax. The E-Business Tax tax rules engine uses the tax classification code assigned to the invoice transaction line to calculate the tax, making use of the applicable Direct Tax Rate Determination rule. After calculating the tax, Receivables displays the transaction with tax distributions. See: Using Application Tax Options and Using Direct Tax Rate Determination, Oracle E-Business Tax User Guide for more information about calculating taxes using the tax classification code.
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Tax Processing Chapter 11 - Page 12
Global Tax Overview
Global Tax Overview
You use E-Business Tax to set up and maintain these taxes: • Value Added Tax (VAT) - Imposed on the value added to goods or services at each
stage of their supply. • Goods and Services Tax (GST) - Sales tax levied on many consumer products and
professional services. • Excise Duties. • US Sales and Use Tax - Imposed on all state, city, and county sales transactions within
the US. • Canada - Goods and Services Tax (GST), Harmonized Sales Tax (HST), and Provincial
Sales Tax (PST) are sales taxes at the federal and/or provincial level. • Japan - Consumption tax: VAT paid on an expense (input tax) that is recoverable
against the VAT charged on revenue (output tax). • Norway - Investment tax: Applies to certain items that are purchased for use or
consumption by a VAT-registered entity. • Spain - Recargo de Equivalencia: A special VAT, levied on goods and services that
smaller customers pay on their purchase invoices in addition to standard VAT to simplify their tax reporting.
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Tax Processing Chapter 11 - Page 13
With E-Business Tax, you can calculate and account for multiple tax regimes, levying additional taxes such as Surcharges, Excise, and Sales Equalization taxes as required. Receivables Latin Tax Engine You use the Receivables Latin Tax Engine, rather than E-Business Tax, to set up and maintain these country-specific taxes: Argentina
• Value Added Tax (VAT) • Additional VAT • VAT Not Categorized • VAT Perceptions • Provincial Turnover Perceptions • Municipal Perceptions • Ex cise
Brazil • IPI • ICMS • ICMS Tributary Substitution • ISS • IRJ
Colombia • Value Added Tax (VAT) • Income Tax Self Withholding
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Tax Processing Chapter 11 - Page 14
Tax Overview
Tax Overview
E-Business Tax processes Oracle Order Management and Oracle Receivables Output Tax, which is charged on the supply of taxable goods and services on customer invoices or revenue items. You should report Output Tax whenever you account for sales. E-Business Tax processes Oracle Payables and Oracle Purchasing Input Tax, which is paid on supplier invoices.
• Input tax: What you pay your tax authority through supplier invoices. • Output tax: What you receive from customers and then pay to your tax authority. • Amount Due to the Tax Authority consists of Output Tax on customer invoices minus any
Recoverable Input Tax on supplier invoices. O
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Tax Processing Chapter 11 - Page 15
Value Added Tax Overview
Value Added Tax Overview
Value Added Tax (VAT) is imposed on the supply of goods and services paid for by the consumer, but collected at each stage of the production and distribution chain. The VAT charged on a customer invoice is called Output Tax. Any VAT paid on a vender invoice is called Input Tax. The amount due each period can be described as follows: Amount Due = Output Tax – Input Tax.
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Tax Processing Chapter 11 - Page 16
US Sales Tax Overview
US Sales Tax Overview
In general, these are the steps in the US Sales tax cycle: • The amount that the customer pays a supplier includes US Sales tax, if applicable. • The supplier is responsible for remitting the sales tax to the tax authority. • E-Business Tax derives the tax jurisdiction or jurisdictions that apply to a transaction line
based on the place of supply. The place of supply is the location where a transaction is determined to have taken place. E-Business Tax either uses a default place of supply or derives a place of supply based on tax rules. In some cases sales tax may not apply if the product is not taxable in the relevant tax jurisdiction. In other cases, state, county, and city taxes may all apply to the transaction.
• The state and local tax jurisdictions collect sales tax from suppliers. See: Tax Determination Processing, Oracle E-Business Tax User Guide for more information about the tax determination process.
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Tax Processing Chapter 11 - Page 17
Tax Partner Process Overview
Tax Partner Process Overview
E-Business Tax lets you use the tax services of external service providers for tax calculation of US Sales and Use Tax on Receivables transactions. E-Business Tax provides transparent integration between the external tax service provider and Oracle Receivables. Both E-Business Tax and the external service provider execute and complete the tax services without any interruption to the application business flow. You set up a service subscription to an external tax service provider in E-Business Tax for a combination of tax regime and tax configuration owner (legal entity or operating unit). At transaction time, when a transaction belonging to this tax configuration owner and tax regime applies:
• E-Business Tax passes tax and transaction information to the tax partner. • The tax partner returns a tax rate and tax amount for each applicable invoice line. • AutoAccounting generates account distribution tax lines based on the tax information
returned by the tax partner and E-Business Tax. See: Setting Up Service Subscriptions, Oracle E-Business Tax User Guide for more information about tax partner services.
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Tax Processing Chapter 11 - Page 18
Agenda
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Tax Processing Chapter 11 - Page 19
Setting Up Receivables for Tax Calculation
Setting Up Receivables for Tax Calculation
You need to complete setup steps in both E-Business Tax and Receivables in order to manage tax calculation on Receivables invoices. Most setup takes place in E-Business Tax. E-Business Tax setup:
- Regime-to-rate flow - First and third party tax profiles - Configuration options - Tax registrations - Tax exemptions - Profile options - Service subscriptions - Tax rules
Receivables setup: - Transaction types - AutoAccounting
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Tax Processing Chapter 11 - Page 20
See: Setting Up Taxes in Oracle E-Business Tax, Oracle E-Business Tax User Guide for more information about E-Business Tax setup steps.
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Tax Processing Chapter 11 - Page 21
Defining Transaction Types and Tax Exemptions
Defining Transaction Types and Tax Exemptions
Transaction Types Receivables, Vision Operations (USA) Order Management Super User, Vision Operations (USA) (N) Setup > Transactions > Transaction Types (N) Setup > Transaction Types > Define Check the Default Tax Classification check box in the Transaction Types window for a transaction type, if you want to default a tax classification code to the transaction line for use by E-Business Tax. You only do this if you intend to calculate taxes using tax classification codes and the Direct Tax Rate Determination tax rule. If you intend to calculate taxes using the standard E-Business Tax tax determination process, then do not check this check box. Tax Exemptions You set up tax exemptions in E-Business Tax for customers and customer sites that are exempt from a particular tax, or from tax on a particular product or service. You set up tax
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Tax Processing Chapter 11 - Page 22
exemptions under the third party tax profile for the applicable customer or customer site. Tax exemptions apply to a specific customer or to a combination of customer and specific product. See: Setting Up Tax Exemptions, Oracle E-Business Tax User Guide for more information about setting up tax exemptions.
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Tax Processing Chapter 11 - Page 23
Defining AutoAccounting for Tax
Defining AutoAccounting for Tax
Receivables, Vision Operations (USA) (N) Setup > Transactions > AutoAccounting Use the AutoAccounting window to specify how Receivables determines the General Ledger account for tax.
• Enter Tax in the Type field. • Query all the segments of your Tax Account Flexfield. For each segment, assign the
value that you want to use to derive the account. The default accounting that AutoAccounting creates is considered interim accounting only. Subledger Accounting accepts the default accounts that AutoAccounting derives without change. You can also modify the accounting rules in Subledger Accounting to create accounting that meets your business requirements.
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Tax Processing Chapter 11 - Page 24
Enabling Calculation of Tax on Freight
Enabling Calculation of Tax on Freight
Receivables, Vision Operations (USA) (N) Setup > Transactions > Transactions You can assign freight charges to an invoice or to each invoice line. When you assign freight to an invoice, Receivables includes the freight amount in the total amount of the invoice. To assign freight to each invoice line, choose Freight from the Lines window after entering your invoice lines. By default, Receivables does not calculate tax on freight charges. However, you can calculate sales tax on freight by using inventory items to define freight services and then entering these items as ordinary invoice lines. When you enter freight charges you also enter the freight GL Account. AutoAccounting creates the default freight account.
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Tax Processing Chapter 11 - Page 25
Defining E-Business Tax Profile Options for Receivables
Defining E-Business Tax Profile Options for Receivables
System Administrator (N) Profile > System Define the following profile options:
• eBTax: Allow Manual Tax Lines: Determines which users can enter manual tax lines on the transaction for the tax setups that allow this update. If the tax configuration in E-Business Tax has the related options enabled, then users can enter manual tax lines on the transaction for the applicable tax.
• eBTax: Allow Ad Hoc Tax Changes: Determines which users can make ad hoc tax changes on the transaction line, such as selecting a different tax status or tax rate. The changes that a user can make also depend upon the details of the applicable tax setups. If the tax rate associated with a tax has the Allow Ad Hoc Rate option enabled, then users can override the calculated tax rate on the transaction line.
• eBTax: Allow Override of Customer Exemptions: Controls the display of the Tax Handling field on the transaction line. You use the Tax Handling field to apply and update customer tax exemptions on transactions. If you set the eBTax: Allow Override of
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Tax Processing Chapter 11 - Page 26
Customer Exemptions profile option to Yes, you must also complete the related setups in E-Business Tax for tax exemptions.
• eBTax: Allow Override of Tax Classification Code: Controls whether users can update the tax classification code that is defaulted to the transaction line. You only set this profile option if you intend to calculate taxes using tax classification codes and the Direct Tax Rate Determination tax rule. E-Business Tax defaults the tax classification code to the transaction line according to the defaulting hierarchy defined for the operating unit and application.
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Tax Processing Chapter 11 - Page 27
Defining E-Business Tax Profile Options for Order Management
Defining E-Business Tax Profile Options for Order Management
System Administrator (N) Profile > System Define the following profile options:
• eBTax: Invoice Freight as Revenue: Controls whether to consider freight amounts as taxable line items. Set the eBTax: Invoice Freight as Revenue profile option to Yes, if you are required to tax freight amounts. The freight amounts entered in the Order Management Ship Confirm window are then passed to Receivables transactions as taxable line items. If you set the eBTax: Invoice Freight as Revenue profile option to Yes, you must also set the eBTax: Inventory Item for Freight profile option.
• eBTax: Inventory Item for Freight: Lets Order Management use an Inventory item defined as Freight on Receivables transaction lines. You can use the freight Inventory item to control the tax rate on taxable freight amounts. The values for this profile option are:
- Freight Charge - The freight Inventory item applies to external Receivables transactions.
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Tax Processing Chapter 11 - Page 28
- Freight for Intercompany - The freight Inventory item applies to internal Receivables transactions only.
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Tax Processing Chapter 11 - Page 29
Agenda
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Tax Processing Chapter 11 - Page 30
Tax Accounting Overview
Tax Accounting Overview
To set up for tax accounting, define: • E-Business Tax: Tax accounting information for tax rate codes:
- Deferred tax • Receivables: Accounting rules for Receivables Activities:
- Miscellaneo us transactions - Discounts - Adjustm ents - Late charges
You can also set up Receivables tax accounts in E-Business Tax for a given tax, tax rate, or tax jurisdiction. You set up these accounts for a combination of primary ledger and operating unit. You can set up these Receivables accounts:
• Finance Charge Tax Liability • Non-Recoverable Tax Accounts • Expense/Re venue Accounts
See: Setting Up Tax Accounts, Oracle E-Business Tax User Guide.
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Tax Processing Chapter 11 - Page 31
Setting Up Tax Accounting for Deferred Tax
Setting Up Tax Accounting for Deferred Tax
Deferred tax recovery is an accounting method that defers the liability of tax to the time that the invoice is paid, rather than when the invoice is created. You set up for deferred tax recovery in E-Business Tax:
• Set the Allow Tax Recovery option for the applicable tax regime. • Select Deferred as the default recovery settlement for the applicable tax regime, tax, tax
status, and tax rate records. • Set up an Interim Tax Account in the Tax Accounts page.
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Tax Processing Chapter 11 - Page 32
Defining Receivables Activities
Defining Receivables Activities
Receivables, Vision Operations (USA) (N) Setup > Receipts > Receivable Activities Define the GL Account and Tax Rate Code Sources.
• GL Activity Source Options: - Activity GL Account - Revenue on Invoice - Tax Rate Code on Invoice - Distribution Set
• Tax Rate Code Source Options: - None: Allocates the entire tax amount according to the specified GL Account
Source. Select this option if you do not want to separately account for tax. - Activity: Allocate the tax amount to the Asset or Liability tax accounts specified by
the Receivables Activity.
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Tax Processing Chapter 11 - Page 33
- Invoice: Distribute the tax amount to the tax accounts specified by the tax rate code on the invoice. You cannot choose this option if the activity Type is Miscellaneous Cash or Late Charges.
Check the Recoverable or Non-Recoverable check box if the Tax Rate Code Source is Invoice. Enter a Tax Rate Code if the tax rate code source is Activity.
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Tax Processing Chapter 11 - Page 34
Updating the Tax Rate on Transactions
Updating the Tax Rate on Transactions
In Receivables, you can update the tax rate code on the transaction line if the appropriate E-Business Tax settings are enabled for the tax and tax rate. These settings are:
• eBTax: Allow Ad Hoc Tax Changes profile option is enabled. • Allow Ad Hoc Rate option is enabled in the applicable tax rate record.
Receivables displays the new tax rate and amount. If you use AutoAccounting and you change the tax rate code, you are prompted to rerun Review Accounting See: Setting Up Tax Rates, Oracle E-Business Tax User Guide for more information about setting up tax rate records.
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Tax Processing Chapter 11 - Page 35
Adjusting Tax on Invoices
Adjusting Tax on Invoices
Receivables, Vision Operations (USA) (N) Transactions > Transactions Summary > (B) Adjust Receivables activities for tax adjustments must be set up first.
• When you create a tax adjustment, Receivables automatically verifies that it is within your adjustment approval limits.
- If within your assigned approval limit for the currency of that item, Receivables updates your customer’s balance to reflect the adjustment.
- If outside your approval limits, Receivables creates a pending adjustment with a status of Pending Approval, which will need to be approved by a higher level employee with the proper approval limit.
• Any adjustments that have been applied to the tax lines of an invoice and cannot be claimed from the state, should use a Receivables activity where tax is not posted to a sales tax liability account (for example, bad debt write-offs of sales tax amounts).
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Tax Processing Chapter 11 - Page 36
Tax Credit Memo
Tax Credit Memos
There are two types of credit memos: On Account and Applied. E-Business Tax uses a different tax calculation method for each type.
• On Account Credit Memos - E-Business Tax calculates tax on On Account credit memos in a similar way to normal invoices. The only difference is that if the line amount is negative, the tax calculated is also negative.
• Applied Credit Memos - E-Business Tax calculates tax on Applied credit memos in direct proportion to the line amounts on the invoice to which the credit memo is applied. For example, if you create an invoice with one line item of $100 and tax of $10, then if the line item is credited $10 with an Applied credit memo the tax line is credited $1.
In Receivables, you can create applied credit memos at the header level or the line level. • Header level - There are three options available for credit allocation:
- Line Only - Tax is not credited. - Line and Tax - You enter the amount or percentage to be credited on the line
amount. The amount you enter is credited proportionately to each line in the invoice. Each tax line is credited by the same percentage as the corresponding line amount.
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Tax Processing Chapter 11 - Page 37
- Tax Only - You enter the amount or percentage to be credited on the tax amount. Each tax line is credited by the same percentage in proportion to the tax amount for the line.
• Line level - You can credit individual lines. The tax line is credited in proportion to the line amount credit.
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Tax Processing Chapter 11 - Page 38
Quiz
Answers: 2 Quiz Specifications
• The correct answer is “A tax authority is a government entity that regulates tax law, and administers and/or audits one or more taxes A tax regime is the set of tax regulations that determine the treatment of one or more taxes administered by a tax authority”.
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Tax Processing Chapter 11 - Page 39
Quiz
Answers: 1, 2, 3 Quiz Specifications
• The correct answer is “Municipal Perceptions tax is maintained by Receivables Latin Tax Engine for Argentina”. O
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Tax Processing Chapter 11 - Page 40
Quiz
Answers: 2 Quiz Specifications
• The correct answer is “The VAT charged on a customer invoice is called Output Tax. Any VAT paid on a vender invoice is called Input Tax”. O
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Tax Processing Chapter 11 - Page 41
Quiz
Answers: 2, 3 Quiz Specifications
• The correct answer is “The setups for E-Business Tax are: Regime-to-rate flow, First and third party tax profiles, Configuration options, Tax registrations, Tax exemptions, Profile options, Service subscriptions, and Tax rules”.
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Tax Processing Chapter 11 - Page 42
Summary
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Period Closing Process Chapter 12 - Page 1
Period Closing Process Chapter 12
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Period Closing Process Chapter 12 - Page 2
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Period Closing Process Chapter 12 - Page 3
Period Closing Process
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Period Closing Process Chapter 12 - Page 4
Objectives
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Period Closing Process Chapter 12 - Page 5
Agenda
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Period Closing Process Chapter 12 - Page 6
Overview of Accounting and Receivables
Overview of Accounting and Receivables
You automatically create accounting entries for all Receivables accounting events using Oracle Subledger Accounting (SLA). Oracle Subledger Accounting is a rule-based accounting engine that centralizes journal entry creation for E-Business Suite products. SLA creates journal entries for subledgers and transfers them to Oracle General Ledger. Receivables provides predefined rules that SLA uses to create journal entries for each accounting event. You can also define your own accounting rules. SLA allows multiple accounting representations for a single business event, resolving differences between corporate and local fiscal accounting requirements. The most granular level of journal entry detail is retained in the subledgers and summarized in General Ledger. You can view all accounting lines produced by Receivables accounting events in the View Accounting windows.
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Period Closing Process Chapter 12 - Page 7
Oracle Subledger Accounting
Oracle Subledger Accounting
Oracle Subledger Accounting (SLA) is primarily a rule-based accounting engine that centralizes accounting for Oracle E-Business Suite products as well as providing an accounting toolset and repository. It is not a separate product in itself, but it is Oracle’s engine catering to the accounting needs of both Oracle and external modules. Together with ledger support, it enables support of multiple accounting requirements concurrently in a single instance. Different accounting regulations can be satisfied by maintaining and applying different sets of rules to different sets of transactions. SLA can also provide accounting for the same transaction with multiple methods. By maintaining a full link between the transaction and accounting data, SLA allows powerful reconciliation and auditing capabilities. SLA provides the setup user interface (UI), inquiry UI, and data model for accounting across Oracle E-Business Suite modules. This common UI provides consistency in reporting, analysis, and user experience, in turn allowing it to replace various product-specific accounting setups from earlier Oracle E-Business Suite releases.
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Period Closing Process Chapter 12 - Page 8
Oracle Subledger Accounting Integration
Oracle Subledger Accounting Integration
Oracle Subledger Accounting integrates with the following E-Business Suite applications: • Payables • Receivables • Projects • Assets • Costing • Process Manufacturing • Public Sector/Federal • Payroll • Property Manager • Loans • Lease and Finance Management • Intercompany • Cash Management • Globalizatio ns
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Period Closing Process Chapter 12 - Page 9
For complete details regarding Subledger Accounting, see: Oracle Subledger Accounting Implementation Guide.
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Period Closing Process Chapter 12 - Page 10
Subledger Accounting Key Concepts
Subledger Accounting Key Concepts
The event model defined in SLA for each subledger represents the transaction or document types and the lifecycle of each transaction:
• Event entity groups together related event classes • Event class classifies transaction types • Event type defines possible actions on each event class with possible accounting
significance The journal creation rules are defined per event class and event type. Transaction object and sources are the data model for each subledger that contains the transaction attributes and information made available to be used during journal rule setup and journal entry generation.
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Period Closing Process Chapter 12 - Page 11
Subledger Accounting Receivables Accounting Event Model
Subledger Accounting Receivables Accounting Event Model
An event entity enables Oracle Subledger Accounting to handle the accounting for similar business events in a consistent manner. The four predefined subledger accounting event entities in Receivables are:
• Transaction s • Receipts • Adjustm ents • Bills Receivable
Each event entity is associated with one or more event classes. An event class represents a category of business events for a particular transaction type or document. Event classes group similar event types and enable the sharing of accounting definitions. An event type represents a business operation that you can perform for an event class. An accounting event has both an event class and an event type that affect how the Create Accounting program determines the subledger accounting for it. Event types provide the lowest level of detail for storing accounting definitions. For example, the Receivables event class Miscellaneous Receipt is subject to three types of business operations that are represented by the event types Miscellaneous Receipt Created, Miscellaneous Receipt Reverse, and Miscellaneous Receipt Updated.
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Period Closing Process Chapter 12 - Page 12
Subledger Accounting Setup and Process
Subledger Accounting Setup and Process
You can define your own accounting rules in addition to the accounting rules seeded for Receivables. The setup for subledger accounting is common to all subledger applications and involves setting up journal entries, defining a subledger accounting method, and assigning the subledger accounting method to the ledger. See: Oracle Subledger Accounting Implementation Guide for complete information about setting up for subledger accounting.
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Period Closing Process Chapter 12 - Page 13
Agenda
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Period Closing Process Chapter 12 - Page 14
Receivables Period Closing Process
Receivables Period Closing Process
Create subledger accounting entries in Receivables using the subledger accounting engine. After reconciliation and review, Receivables accounting information is transferred to General Ledger. These entries are reviewed and then posted to General Ledger. O
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Period Closing Process Chapter 12 - Page 15
Overview of Ordering to Period Closing
Overview of Ordering to Period Closing
This is an example of the flow of sales orders to the General Ledger. Some orders may not follow the complete cycle or may come from other applications. In this example, the orders are shipped, inventory is decremented, the orders are invoiced, Receivables subledger accounting entries are created, and the receipts are posted. To finish the process and close the period, the Receivables subledger transactions are reviewed and transferred to General Ledger through Subledger Accounting.
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Period Closing Process Chapter 12 - Page 16
Agenda
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Period Closing Process Chapter 12 - Page 17
Standard Reports
Standard Reports
Receivables, Vision Operations (USA) (N) Reports Reports can be run as a concurrent process from the Submit Requests window. Use these reports when needed to review activity at any time during the month.
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Period Closing Process Chapter 12 - Page 18
Agenda
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Period Closing Process Chapter 12 - Page 19
Reconciling Receivables
Reconciling Receivables
Internal Reconciliation Internal reconciliation reconciles the Receivables opening to closing balance: (Opening Balance + Transactions) – (Payments) = Closing Balance Reconciling Subledger Accounting Details Reconcile the period operational activity with Receivables subledger accounting data before posting to General Ledger. Use these reports to research transactions and receipts, and the different accounts that they affect, for a given period.
• AR Reconciliation – Compares transactional data against accounting data. Use this report during the internal reconciliation process to see if the balances on the various registers match those on the journal reports. You can also see which items affect aging, and which items affect GL account balances. This helps you to more easily reconcile your accounts receivable activities, before you post to General Ledger.
• Potential Reconciling Items – Review suggested journal items that might potentially post to incorrect GL account types.
• Journal Entries – Review the details that make up the General Ledger journal entries. • Aging – Review beginning and ending customer balances.
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Period Closing Process Chapter 12 - Page 20
• Sales Journal by Account – Ensures that the Transaction Register matches the Sales Journal.
• Transaction Register – Verifies that all items that can be posted are reflected on the Sales Journal. The Sales Journal balance should match the total of the transactions here after adding the credit memo total twice (because it is a negative on the Transaction Register and a positive on the Sales Journal).
• Adjustments Register – Identifies any adjustments that affect the transactions for the month.
• Unapplied Receipts Register – Determines customer balance after taking into account all on-account and unapplied amounts.
• Applied Receipts Register – Identifies receipts that reduce the outstanding opening balance.
Reconciling Receipts Use register and journal reports to reconcile receipts according to the receipt life cycle (confirmed, remitted, cleared) from a cash perspective:
• Receipt Journal – View receipts that appear in the Journal Entries report. • Receipt Register – Review a list of receipts for a specified date range. • Other Receipt Applications – View details about receipt activity that do not impact
customer open receivables. External Reconciliation External reconciliation reconciles the Receivables trial balance (that is, the Aging Report) to the Receivables control account (or accounts) in General Ledger. After you internally reconcile Oracle Receivables data and post to General Ledger, complete the external reconciliation process with the help of these reports:
• Subledger Accounting Program – View the subledger journal entries created for successful events.
• Journal Entries – Review the details that make up the General Ledger journal entries. • Journal Import Execution – Displays the total debits and credits for the journal created. • Posting Execution – Displays the total debits and credits that are posted. • Unposted Journal – Displays the total debits and credits that are not posted. • AR to GL Reconciliation – Verifies that all Receivables journal entries were posted to the
correct General Ledger accounts. Ora
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Period Closing Process Chapter 12 - Page 21
Transferring to General Ledger
Transferring to General Ledger
The Create Accounting program creates subledger accounting entries in Receivables and transfers these entries to General Ledger. The program populates the GL Interface tables with Receivables transaction data. The data can be transferred in detail or summary format. For the transactions that are out of balance, use the Unposted Items report to identify all the items that are not posted for the specified GL date range. For the transactions in balance, use the Posting Execution report to verify that all journal entries exported from Receivables match those posted to General Ledger. Note: The subledger journal entries can also be directly posted to the General Ledger by enabling the Post in General Ledger option in the Create Accounting Program.
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Period Closing Process Chapter 12 - Page 22
Running the Journal Import Program
Running the Journal Import Program
The Create Accounting program can be submitted in either draft mode, if you want to review the results before you create the final accounting, or final mode. During program submission, if you create final accounting, then those entries are automatically transferred to the General Ledger interface table, imported by the Journal Import program, and posted. You can also choose not to post the entries automatically while submitting the Create Accounting program. In this case, run the Journal Import Program manually in GL to transfer accounting information from the GL Interface to the General Ledger. The journal import program takes the information from the GL Interface table and populates the GL_JE_BATCHES, GL_JE_HEADER and GL_JE_LINES tables. The journal entries that were created by the import program must be posted to update the account balances.
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Period Closing Process Chapter 12 - Page 23
Mapping Receivables Transactions to General Ledger Categories
Mapping Receivables Transactions to General Ledger Categories
If you experience reconciliation issues between transactions and categories, use the map in this slide to check your setup information.
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Period Closing Process Chapter 12 - Page 24
Running Revenue Recognition
Running Revenue Recognition
Receivables, Vision Operations (USA) (N) Control > Accounting > Revenue Recognition The Revenue Recognition program will automatically run as a part of the General Ledger transfer process. You can also run the Revenue Recognition program manually at any time. The program generates the revenue distribution records for invoices and credit memos that use invoicing and accounting rules. Accounting rules determine the number of periods and percentage of total revenue to record in each accounting period. Invoicing rules determine when to recognize the receivable for invoices that span more than one accounting period. Distributions are created in the Receivables subledger and will pass to General Ledger during the appropriate accounting period. This is an essential process in accrual-based accounting.
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Period Closing Process Chapter 12 - Page 25
Quiz
Answers: 2 Quiz Specifications
• The correct answer is “Oracle Subledger Accounting (SLA) is primarily a rule-based accounting engine that centralizes accounting for Oracle E-Business Suite products as well as providing an accounting toolset and repository. It is not a separate product in itself, but it is Oracle’s engine catering to the accounting needs of both Oracle and external modules”.
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Period Closing Process Chapter 12 - Page 26
Quiz
Answers: 2, 4, 3, 1 Quiz Specifications
• The correct answer is “Create subledger accounting entries in Receivables using the subledger accounting engine. After reconciliation and review, Receivables accounting information is transferred to General Ledger. These entries are reviewed and then posted to General Ledger”.
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Period Closing Process Chapter 12 - Page 27
Quiz
Answers: 2 Quiz Specifications
• The correct answer is “An event class represents a category of business events for a particular transaction type or document”. O
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Period Closing Process Chapter 12 - Page 28
Quiz
Answers: 2, 3 Quiz Specifications
• The correct answer is “The three components of an event model are: Event Entity, Event Class, and Event Type”. O
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Period Closing Process Chapter 12 - Page 29
Summary
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Period Closing Process Chapter 12 - Page 30
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Appendix A: Bank Reconciliation Chapter 13 - Page 1
Appendix A: Bank Reconciliation Chapter 13
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Appendix A: Bank Reconciliation Chapter 13 - Page 2
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Appendix A: Bank Reconciliation Chapter 13 - Page 3
Appendix A - Bank Reconciliation
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Appendix A: Bank Reconciliation Chapter 13 - Page 4
Course Objectives
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Appendix A: Bank Reconciliation Chapter 13 - Page 5
Course Objectives
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Appendix A: Bank Reconciliation Chapter 13 - Page 6
Agenda
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Appendix A: Bank Reconciliation Chapter 13 - Page 7
Agenda
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Appendix A: Bank Reconciliation Chapter 13 - Page 8
Reconciliation Overview
Reconciliation Overview
This graphic depicts the reconciliation process flow. Enter detailed bank information manually or electronically. Reconcile this information with your system transactions manually or automatically. While reconciling, you can create miscellaneous transactions for bank-originated entries and manually enter payments and receipts. You can manually or automatically clear payments, receipts, open interface and miscellaneous transactions before reconciliation to maintain current cash account balances. After reconciliation, review the Bank Statement Detail, Bank Statement Summary, and Bank Statement by Number Reports. You can post the accounting entries to your General Ledger. You can reconcile your general ledger cash account balance to your bank account balance in Cash Management by printing the GL Reconciliation Report.
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Appendix A: Bank Reconciliation Chapter 13 - Page 9
Reconciliation Integration
Reconciliation Integration
Oracle Cash Management shares functionality with Receivables, Payables, Payroll, Treasury, General Ledger, and other external systems.
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Appendix A: Bank Reconciliation Chapter 13 - Page 10
Reconciliation: Oracle Receivables and Oracle Payables
Reconciliation: Oracle Receivables and Oracle Payables
You can reconcile payments you created in Payables and receipts you entered in Receivables against your bank statements. When you reconcile Payables payments in Cash Management, the payments are first matched to bank statement lines and then cleared. You can also manually clear the payments prior to reconciliation. After clearing or reconciling your payments, you can create accounting entries for the Cash, Cash Clearing, Bank Charges, Bank Errors, Realized Gain, and Realized Loss accounts that you specified in the Oracle Payables Bank Accounts window and the Payment Documents window. You then transfer the accounting entries to your general ledger. When you reconcile receipts with Cash Management, accounting entries are automatically created in the Cash, Remittance, Short-term Debts, and Interest Earned accounts, as applicable to the reconciliation transaction. Cash Management uses the accounts you defined in the Banks window and the Receivables Remittance Banks window (off the Receipt Classes window). You post the accounting entries resulting from Cash Management receipt reconciliation to General Ledger from Receivables.
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Appendix A: Bank Reconciliation Chapter 13 - Page 11
Functions with Receivables
Functions with Receivables
Cash Management performs the following functions with Oracle Receivables: • Clear and reconcile receipts: Receipts are made available to Cash Management to
reconcile with bank statement entries. • Reverse receipts: Receipts that are returned NSF (non-sufficient funds) or Stop
Payment are reversed and Debit Memos can be created from Cash Management. • Create Oracle Receivables receipts: Receipts that are missing from Receivables can
be entered using a link from Cash Management. • Create miscellaneous transactions for bank-initiated transactions: Miscellaneous
Receipts can be created in Receivables using a link from Cash Management for both positive and negative amounts.
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Appendix A: Bank Reconciliation Chapter 13 - Page 12
Oracle General Ledger and Payroll
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Appendix A: Bank Reconciliation Chapter 13 - Page 13
Reconciliation of Oracle Payroll EFT Payments
Reconciliation of Oracle Payroll EFT Payments
Cash Management provides support for various payment formats like NACHA, BACS, and so on for Payroll EFT Payments reconciliation. In order to use this feature, you first need to define the transaction code that specifies the payroll payment format. When defining a transaction code with a payment format, the Payroll Matching Order field will show the order you need to define your BANK_TRX_NUMBER format in your bank statement-mapping template. You will then need to either update or define a new bank statement-mapping template to enter the Format for the BANK_TRX_NUMBER with the format that is needed to identify the EFT payments. Multiple identifiers might be needed to identify EFT payments. You will need to determine what the identifiers are and enter the Format for the BANK_TRX_NUMBER with the formats that are needed to identify the EFT payments. The format should be entered in the order specified by the Payroll Matching Order assigned to the transaction code setup for Payroll EFT payments. Once the setup is complete, you can load, import, and reconcile bank statements containing Payroll EFT payments.
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Appendix A: Bank Reconciliation Chapter 13 - Page 14
AutoReconciliation Overview
AutoReconciliation Overview
This graphic depicts the AutoReconciliation process flow.
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Appendix A: Bank Reconciliation Chapter 13 - Page 15
Load Bank Statements
Load Bank Statements
Bank files can be loaded in the Bank Statement tables in two ways: • To import bank statements automatically, use a SQL*Loader script against the bank file
to populate the Bank Statement Open Interface. Then import the bank statement information using the Bank Statement Import Program.
• To enter a bank statement manually, enter the bank statement header information and the transaction lines in the Bank Statement window.
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Appendix A: Bank Reconciliation Chapter 13 - Page 16
Agenda
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Appendix A: Bank Reconciliation Chapter 13 - Page 17
Setting Up Oracle Cash Management and Related Products
Setting Up Oracle Cash Management and Related Products
Before you set up Cash Management, you should set up Oracle Application responsibilities and users for the implementation. Cash Management provides three responsibilities: Cash Management, Bank Reconciliation, and Cash Forecasting.
• It uses data from Oracle General Ledger, Oracle Payables, Oracle Payroll, Oracle Receivables, and Oracle Treasury for bank statement reconciliation.
• It uses information from Oracle General Ledger, Oracle Order Management, Oracle Payables, Oracle Payroll, Oracle Purchasing, Oracle Projects, Oracle Sales, Oracle Treasury, and Oracle Receivables for cash forecasting.
You must perform certain setup steps in these applications before you can use Cash Management with them.
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Appendix A: Bank Reconciliation Chapter 13 - Page 18
Setting Up Oracle Cash Management System Parameters
Setting Up Oracle Cash Management System Parameters
(N) Setup > System > System Parameters Use the System Parameters window to configure your Cash Management system to meet your business needs. System parameters determine, for example, the default options for manual reconciliation windows and the control settings for the AutoReconciliation program. Basic System Parameters
• Legal Entity: The name of the legal entity that the system parameters are applied to. • Ledger: The name of the ledger for Cash Management accounting transactions. This
value defaults from the GL Ledger Name profile option. Cash Management supports multiple ledgers. Each legal entity is tied to a ledger. If you use multiple legal entities, then you must set up system parameters for each legal entity.
• Begin Date: Cash Management will not display transactions dated earlier than this date. Reconciliation Controls
• Show Cleared Transactions: If you check this check box, cleared transactions remain available for reconciliation. Otherwise, only uncleared transactions will appear for reconciliation.
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Appendix A: Bank Reconciliation Chapter 13 - Page 19
• Allow Adding Lines to Imported Statements. • Show Void Payments: You must check this check box if you want voided payments
available for reconciliation. Signing Authority Approval
• Workflow Enabled • Manually Controlled
Cash Management Transactions • Accounting: Exchange Rate Type, Bank Statement Cashflow Rate Date, Bank Transfer
Rate Date • Bank Account Transfers: Authorization
Note: Set up bank reconciliation controls, such as matching order and float status, for each bank account when you create or update a bank account.
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Appendix A: Bank Reconciliation Chapter 13 - Page 20
Setting Up Oracle Cash Management Bank Transaction Codes
Setting Up Oracle Cash Management Bank Transaction Codes
If you want to load electronic bank statements or use Cash Management AutoReconciliation, you must define, for each bank account, the transaction codes that each bank uses to identify different types of transactions on its statements. Because each bank might use a different set of transaction codes, you must define a bank transaction code for each code that you expect to receive from each bank that you use. Transaction types include: Payment, Receipt, Miscellaneous Payment, Miscellaneous Receipt, Stopped, Rejected, NSF (non-sufficient funds), Sweep In, and Sweep Out.
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Appendix A: Bank Reconciliation Chapter 13 - Page 21
Agenda
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Appendix A: Bank Reconciliation Chapter 13 - Page 22
Bank Statement Open Interface
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Appendix A: Bank Reconciliation Chapter 13 - Page 23
Bank Statement Open Interface
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Appendix A: Bank Reconciliation Chapter 13 - Page 24
Bank Statement Open Interface
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Appendix A: Bank Reconciliation Chapter 13 - Page 25
Importing Bank Statements
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Appendix A: Bank Reconciliation Chapter 13 - Page 26
Bank Statement Validation
Bank Statement Validation
Use the AutoReconciliation Execution Report or the View Reconciliation Errors window to review any import validation errors.
• Use the concurrent request log file to review any errors or warnings related to Treasury. • Use the Bank Statement Interface window to correct any import validation errors.
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Appendix A: Bank Reconciliation Chapter 13 - Page 27
Bank Statement Interface Errors
Bank Statement Interface Errors
• Use the Bank Statement Interface window to review import validation errors from the Bank Statement Open Interface tables.
• Review the AutoReconciliation Execution Report. • Review all import and validation errors for a statement.
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Appendix A: Bank Reconciliation Chapter 13 - Page 28
Setup for Bank Statement Open Interface
Setup for Bank Statement Open Interface
First, define a bank statement mapping rule, if necessary. Then run the custom loader program against the bank statement file to populate the Bank Statement Open Interface tables. Verify that the bank statement data was loaded into the open interface tables correctly. You can use the Bank Statement Interface window to ensure that bank statement header information is correctly inserted into the CE_STATEMENT_HEADERS_INT_ALL table. You can use the Bank Statement Lines Interface window to ensure that bank statement transaction lines are correctly inserted into the CE_STATEMENT_LINES_INTERFACE table. The Bank Statement Interface and Bank Statement Lines Interface windows show you the statement header and lines information in the open interface tables. You can correct the data using these windows, or you can correct the original bank statement file and reload it using your custom loader program.
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Appendix A: Bank Reconciliation Chapter 13 - Page 29
Agenda
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Appendix A: Bank Reconciliation Chapter 13 - Page 30
Entering Bank Statements Manually
Entering Bank Statements Manually
Prerequisites: • Define banks • Define bank transaction codes for the bank account • Set up Receivables activities and receipt methods for miscellaneous transactions • Set up sequential document numbering for Cash Management
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Appendix A: Bank Reconciliation Chapter 13 - Page 31
Entering Bank Statement Information Manually
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Appendix A: Bank Reconciliation Chapter 13 - Page 32
Agenda
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Appendix A: Bank Reconciliation Chapter 13 - Page 33
Archiving and Purging
Archiving and Purging
After you import a bank statement into Cash Management, you can purge its data from the Bank Statement Open Interface tables. After you reconcile it, you can purge its data from the Bank Statement tables. To save a copy of your bank statement, you can archive the data before you purge it. You can also archive or purge intra-day bank statement data from the Bank Statement Open Interface and the Intra-Day Bank Statement tables. You can run the Archive/Purge Bank Statements program to archive and purge. You can run this program in preview mode to review the bank records that can be purged and in purge mode to execute the actual purge process. It is recommended that you run the program in preview mode first to confirm that the records picked up by the program are the ones you actually want to purge. When the program completes, it automatically prints the Archive/Purge Bank Statements Report to display the number of headers and lines that were archived or purged. When you purge a bank statement, you must also purge any system transactions reconciled to it. You periodically archive and purge your bank statement interface and bank statement tables, or the retained information will continue to occupy valuable disk space. If you use Cash Management to reconcile journal entries in General Ledger, you should run the Cash Management Purge program before you purge journals in General Ledger.
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Appendix A: Bank Reconciliation Chapter 13 - Page 34
To save your archived data to a file, use the ORACLE RDBMS Export utility. To restore data from a saved archive file, first use the ORACLE RDBMS Import utility to populate the special archive tables, then run a custom SQL* Loader script to transfer the data.
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Appendix A: Bank Reconciliation Chapter 13 - Page 35
Archiving and Purging Automatically
Archiving and Purging Automatically
Archive tables to the bank statement or open interface tables The Archive/Purge Bank Statements Report lists the number of bank statements (headers and lines) that were archived or purged from Cash Management. The Bank Purging Execution Report displays the Oracle Payables and Oracle Payroll banks, bank branches, internal bank accounts, and employee bank accounts that are processed by the Bank Purging program. Archiving and Purging Automatically If you set the Archive and Purge options in the System Parameters window, you can automatically archive or purge bank statement data from the Bank Statement Open Interface tables after bank statements have been imported into Cash Management. You can also automatically archive or purge imported intra-day bank statement data from the Bank Statement Open Interface tables. To archive or purge data from the Bank Statement or Intra-Day Bank Statement tables, run the Archive/Purge Bank Statements program.
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Appendix A: Bank Reconciliation Chapter 13 - Page 36
Agenda
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Appendix A: Bank Reconciliation Chapter 13 - Page 37
Reconciling Bank Statements Automatically
Reconciling Bank Statements Automatically
You can run these programs from the Submit Request, Reconcile Bank Statements, or Bank Statement Interface windows. You can also import and automatically reconcile a bank statement from the Bank Statement Loader program by selecting the Load, Import, and AutoReconciliation option.
• AutoReconciliation: Used to reconcile any bank statement entered in Cash Management.
• Bank Statement Import: Used to import an electronic bank statement after loading the bank statement file into the Bank Statement Open Interface tables.
• Bank Statement Import and AutoReconciliation: Used to import and reconcile a bank statement in the same run.
AutoReconciliation Program You can use the AutoReconciliation program to automatically reconcile any bank statement in Cash Management. After you run the program, you can review the AutoReconciliation Execution Report to identify any reconciliation errors that need to be corrected. You can run this report automatically or as needed, and also review reconciliation errors online.
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Appendix A: Bank Reconciliation Chapter 13 - Page 38
After automatically reconciling a bank statement and correcting any reconciliation errors, you can run the Bank Statement Detail Report, which shows statement and transaction data for a specific bank account statement, any unreconciled transactions separately with their current status, and the statement totals for each transaction type. Or you can use the View Bank Statements window to review reconciled and unreconciled statement lines. If lines remained unreconciled, you can update the bank statement and rerun the AutoReconciliation program and reconcile the statement lines manually. Once you have reviewed your reconciliation results, you can transfer the accounting entries to your general ledger from Payables and Receivables. If you use Oracle General Ledger, you can reconcile your General Ledger cash account balance to your bank account balance by running the GL Reconciliation Report.
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Appendix A: Bank Reconciliation Chapter 13 - Page 39
Agenda
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Appendix A: Bank Reconciliation Chapter 13 - Page 40
Reconciling Bank Statements Manually
Reconciling Bank Statements Manually
When you use manual reconciliation, you can search for the following: • Payroll or Payables payments, Receivables receipts, miscellaneous transactions, GL
journal entries, open interface transactions, and specific statement lines • Treasury settlements by using the Reconciliation Open Interface • Customer or supplier transactions, batch name, or remittance number, ranges for
transaction numbers, transaction date, transaction amount, and maturity date • Journal entries on period name, journal entry name, document number, or line number
As you reconcile a statement manually, you may need to create transactions to account for differences between the sum of the reconciled transaction and the line amount.
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Appendix A: Bank Reconciliation Chapter 13 - Page 41
Creating Miscellaneous Transactions
Creating Miscellaneous Transactions
When you create a miscellaneous payment, it is actually recorded as a negative receipt. When you reconcile that miscellaneous payment, or negative receipt, it is reconciled to a payment bank statement line with a positive amount.
• Define receivables activities and receipt methods for miscellaneous transactions. When you define a receivables activity with the type Miscellaneous Cash, you must also assign either an account or a distribution set to use for the miscellaneous transaction accounting entries.
• Perform any additional setup required by Receivables to handle miscellaneous receipts, including defining receipt sources and distribution sets.
• Set up Sequential Numbering.
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Appendix A: Bank Reconciliation Chapter 13 - Page 42
Recording a Bank Transmission Error
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Appendix A: Bank Reconciliation Chapter 13 - Page 43
Recording Transactions from External Systems
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Appendix A: Bank Reconciliation Chapter 13 - Page 44
Reconciliation Open Interface
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Appendix A: Bank Reconciliation Chapter 13 - Page 45
Agenda
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Appendix A: Bank Reconciliation Chapter 13 - Page 46
Manually Clearing and Unclearing
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Appendix A: Bank Reconciliation Chapter 13 - Page 47
Clearing and Reconciling Transactions in Oracle Payables
Clearing and Reconciling Transactions in Oracle Payables
The Cleared Transactions Report shows transactions that were cleared or reconciled both manually and automatically. The Cleared Transactions Report can be submitted for Payables payments only, receipts only, payroll payments only, or all three. O
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Appendix A: Bank Reconciliation Chapter 13 - Page 48
Clearing and Reconciling Transactions in Oracle Receivables
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Appendix A: Bank Reconciliation Chapter 13 - Page 49
Transferring Bank Reconciliation Transactions to Your General Ledger
Transferring Bank Reconciliation Transactions to Your General Ledger
When you reconcile bank statement lines to journal entries in General Ledger, no reconciliation accounting entries are created. Transferring to General Ledger is only required for entries created in Payables and Receivables. Cash Management does not provide reconciliation accounting data to Payroll. If you use General Ledger, you need to run the Journal Import program after transferring your reconciliation accounting transactions from Payables or Receivables to create journal entries based on the reconciliation transactions. Once you run Journal Import, you need to post your journals in General Ledger. Use the GL Reconciliation Report to reconcile the General Ledger cash account balance to the bank statement closing balance and to identify any discrepancies in your cash position. The General Ledger cash account should pertain to only one bank account. The summary report lists the General Ledger cash account balance, an adjusted balance for the bank statement, a separate adjustment amount for unreconciled receipts, payments, journal entries which have been recorded in the General Ledger cash account, and bank errors. The detail report provides details for the unreconciled items as well as the information contained in the Summary report.
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Appendix A: Bank Reconciliation Chapter 13 - Page 50
Agenda
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Appendix A: Bank Reconciliation Chapter 13 - Page 51
Recording Exceptions
Recording Exceptions
If you implement the automatic bank transmission feature, use the Payment Exceptions Report to view payment exceptions generated by the bank and transmitted to your local directory. You can view the transmission history and the actual report in the Transmissions window. In the Find Transmissions window, choose the file type of EXCEPTION to query exceptions reports. Select the File Text field of the file you want to view and choose Edit Field from the Edit menu. The Editor window displays the content of the file you selected. To resolve the payment exceptions, you need to manually unreconcile the transactions in Cash Management and void the payment in Payables.
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Appendix A: Bank Reconciliation Chapter 13 - Page 52
Handling Non-Sufficient Funds (NSF) Using AutoReconciliation
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Appendix A: Bank Reconciliation Chapter 13 - Page 53
Handling Non-Sufficient Funds (NSF) or Rejected Receipts Manually
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Appendix A: Bank Reconciliation Chapter 13 - Page 54
Recording a Stopped Payment
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Appendix A: Bank Reconciliation Chapter 13 - Page 55
Recording a Direct Debit from a Supplier
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Appendix A: Bank Reconciliation Chapter 13 - Page 56
Entering Reversals
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Appendix A: Bank Reconciliation Chapter 13 - Page 57
Reconciling Corrections and Adjustments to Bank Errors
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Appendix A: Bank Reconciliation Chapter 13 - Page 58
AutoReconciliation Matching
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Appendix A: Bank Reconciliation Chapter 13 - Page 59
AutoReconciliation Matching: Reversal Method
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Appendix A: Bank Reconciliation Chapter 13 - Page 60
AutoReconciliation Matching: Adjustment Method
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Appendix A: Bank Reconciliation Chapter 13 - Page 61
Manual Reconciliation Matching
Manual Reconciliation Matching
If you are reconciling bank statements manually, the Reconcile Bank Statements window retrieves all available statement lines and transactions that match your selection criteria. Then you can decide how you want to reconcile the correction entry. If you have already reconciled the error statement line to a transaction, you must first unreconcile the error statement line before attempting to reconcile it with the correction entry. Sometimes a bank uses one correction entry to correct multiple error statement lines. You can manually reconcile between multiple statement lines.
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Appendix A: Bank Reconciliation Chapter 13 - Page 62
Agenda
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Appendix A: Bank Reconciliation Chapter 13 - Page 63
Value Date Support
Value Date Support
With value date support, you can: • Calculate a more accurate short-term cash forecast based on value date. • Track actual value dates and derive more accurate lead times. • Calculate a more accurate interest on interest-bearing accounts.
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Appendix A: Bank Reconciliation Chapter 13 - Page 64
Value Date Support in Oracle Payables and Oracle Receivables
Value Date Support in Oracle Payables and Oracle Receivables
Postpone reconciliation in the System Parameters window if the value date on the statement line is greater than the current date. Enter the payment’s anticipated value date in Payables at creation time. Update the actual value date for each payment during reconciliation. Value Date Derivation in Applications is as follows:
• Oracle Payables: Anticipated Value Date, Actual Value Date • Oracle Cash Management: Bank Statement, Miscellaneous Transactions, Manual
Clearing • Oracle Receivables: Anticipated Value Date, Actual Value Date
In the Forecast process, selection hierarchy for future AR Receipts and AP Payments are: AR Receipts:
• Value Date (actual then anticipated) • Maturity Date • Latest Transaction Date
AP Payments: • Value Date (actual then anticipated) • Maturity Date
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Appendix A: Bank Reconciliation Chapter 13 - Page 65
• Payment Date
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Appendix A: Bank Reconciliation Chapter 13 - Page 66
Agenda
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Appendix A: Bank Reconciliation Chapter 13 - Page 67
Oracle Cash Management Reports
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Appendix A: Bank Reconciliation Chapter 13 - Page 68
Archive/Purge Bank Statements Report
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Appendix A: Bank Reconciliation Chapter 13 - Page 69
AutoReconciliation Execution Report
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Appendix A: Bank Reconciliation Chapter 13 - Page 70
Bank Statement Detail Report
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Appendix A: Bank Reconciliation Chapter 13 - Page 71
Bank Statement Summary Report
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Appendix A: Bank Reconciliation Chapter 13 - Page 72
Bank Statements by Document Number Report
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Appendix A: Bank Reconciliation Chapter 13 - Page 73
GL Reconciliation Report
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Appendix A: Bank Reconciliation Chapter 13 - Page 74
Cash in Transit Report
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Appendix A: Bank Reconciliation Chapter 13 - Page 75
Cleared Transactions Report
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Appendix A: Bank Reconciliation Chapter 13 - Page 76
Transactions Available for Reconciliation Report
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Appendix A: Bank Reconciliation Chapter 13 - Page 77
Batches Available for Reconciliation Report
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Appendix A: Bank Reconciliation Chapter 13 - Page 78
Bank Transaction Codes Listing
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Appendix A: Bank Reconciliation Chapter 13 - Page 79
Cash Application Work Queue
Cash Application Work Queue
Using Cash Application Work Queue, you are be able to: • Filter the work queue assigned to you. • Sort the work queue assigned to you • For a selected work item, perform all business actions that are currently available in the
receipt context, within the limits of the functional privileges. • Identify a set of existing work items, based on search criteria, and re-assign in bulk to
another user. • Manually change the status of the selected work items. • Manually assign a review date to the selected work items. • Add notes to the selected work items. • Export the work items to Excel. • View other user’s work queue within the security framework.
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Appendix A: Bank Reconciliation Chapter 13 - Page 80
Cash Application Work Queue (continued)
Cash Application Work Queue (continued)
Work Item Assignment: Unapplied receipts and unidentified receipts in the cash application owner’s queue are referred to as work items. The Work Item Assignment means identifying the unapplied and unidentified receipts and assigning them to cash application owner work queue for further processing. Work Item assignment to cash application owner’s queue will be performed by leveraging the Work Item Assignment Rule Engine. By using this rule engine, assignments can be done evaluating one or more conditions defined in a rule. You can define multiple conditions in a rule and associate the rule to a particular cash application owner. Following receipt attributes will be available for defining conditions in a rule:
• Bill To Customer • Bill To Site • Customer Profile Class • Country • Operating Unit • Currency
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Appendix A: Bank Reconciliation Chapter 13 - Page 81
• Unapplied Amount • Unidentified Amount
You can define multiple rules and assign them priority. The system evaluates rules based on priority and when conditions for a rule are satisfied, the rule engine returns the cash application owner assigned to the rule and stops evaluating the remaining rules. The rule engine also allows you to define a default cash application user, who will be used when none of the rules are satisfied. The Cash Application Work Items Assignment concurrent program runs after the new Automated Cash Application process is run. The concurrent program loops through all unidentified and unapplied receipts not assigned to Cash Application Owners and invokes the rule engine and passes receipt attributes. The rule engine determines the Cash Application Owner for each receipt and provides it to concurrent program, which assigns the work items to the work queue of respective Cash Application Owner. Work Item Status Maintenance The system provides a new extensible lookup to store work item status codes. System seeds the status codes New and Closed. You can add additional status codes to the lookup. The work item has a status of New when it assigned to the cash application owner work queue by the Work Item Assignment concurrent program. Cash application owner can later change the status to any user defined status codes. Once the receipt is fully applied, system updates the status to Closed. You can also bulk reassign work items selected on Cash Application Work Queue page to any particular Cash Application User. You can also update few fields for work items selected on Cash Application Work Queue page. You can update these columns: Cash Application Owner, Review Date, Work Item Status and Note.
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Appendix A: Bank Reconciliation Chapter 13 - Page 82
Work Load Review Report
Work Load Review Report
This report provides work queue information of Cash Application Owner/s for a defined period. This helps in analyzing workload of Cash Application Owners. The report lists all work items in the queue of Cash Application Owner/s selected in the query parameters. It also gives summary at the top of the report. Report shows detailed information of work items if “Yes” is selected for the Detail parameter , otherwise report shows summary information only.
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Appendix A: Bank Reconciliation Chapter 13 - Page 83
Summary
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Appendix A: Bank Reconciliation Chapter 13 - Page 84
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