Oracle Fusion Financials - Accounts Receivables

In this chapter, you will learn at high level processes and functionalities available in Accounts Receivables module.

System options in the Receivables module allow users to configure various parameters that impact the overall functionality of the module. These settings largely serve as defaults, which can be altered at either the master level or the transaction level. The chapter on configuring system options in the Receivables module will guide you on how to set these parameters effectively.

• System options impact the overall functionality of the Receivables module.

• They are primarily used for defaulting purposes.

• Settings can be changed at both the master level and transaction level.

• The chapter on configuring system options in Receivables will provide guidance on this process.

Receivables transaction types play a pivotal role in the management of transactions. They help in categorizing various transaction types and configuring accounting information. Here are key points you need to know about defining Receivables transaction types:

• Transactions types are important for categorizing different types of transactions.

• They allow for the configuration of accounting information related to transactions.

• Receivables transaction types help in defaulting payment terms for various transactions.

• Defined Receivables transaction types facilitate the efficient management of receivables processes.

In this chapter, you will learn about transaction sources in Receivables. Transaction sources help identify the origin of a transaction, which could be Manual, Order Management, Spreadsheet, etc., based on your business needs. They are also used to define numbering series for transactions created using the specified source.

Key points to remember about transaction sources:

• Transaction sources are important for tracing how a transaction was initiated.

• They allow customization based on business requirements.

• Transaction sources help in establishing unique numbering sequences for transactions created through each source.

In the Receivables module, descriptions for invoice lines can be entered in three different ways:

• Manually

• By picking an item from the Inventory module

• By selecting a memo line

Memo lines serve as a simple master where you can:

• Define a description and related GL account

• When selecting an item from the memo line master, the account is defaulted automatically

• Useful for frequently used descriptions

In this chapter, you will learn how to define memo lines.

Auto accounting is a function used to automatically create different account codes necessary for invoices. By setting up rules, you can extract different parts of your General Ledger (GL) account from different sources in Receivables. For instance, you can extract the company code from the customer's site, the cost center from the transaction type, or the account from the memo line. The system generates an account combination based on these rules when creating an invoice, but users can modify it if required.

• Auto accounting automatically generates various account codes for invoicing

• Rules can be defined to pick segments of GL accounts from different masters in Receivables

• Examples include selecting company code from customer site, cost center from transaction type, etc.

• The generated account combination is defaulted in the invoice creation process

• Users have the ability to override the default account combination

In Receivable's customer master, there are various configurable parameters such as payment terms, statement frequency, late payment interest, etc. Customer profiles allow defining multiple profiles with different parameters that can be attached to customers.

Key points about customer profiles:

• Define multiple profiles in Receivable's customer master.

• Each profile can have different parameters like payment terms, statement frequency, late payment interest, etc.

• When creating a customer, you can link a specific profile to it.

• All parameters defined in the linked profile will be defaulted in the customer master.

• If changes are made at the customer profile level, there's an option to automatically replicate them to all attached customers.

By understanding customer profiles, you will be able to:

• Set up distinct profiles to cater to different customer needs.

• Customize parameters at the profile level and have them applied to linked customers.

• Efficiently manage and update customer information across multiple accounts using profiles.

Customer is the key master of Receivables, as most transactions are carried out for customers and various parameters set at the customer level can affect the functionality of Receivables for that customer. Here's what you will learn in this chapter:

• The significance of the customer in Receivables transactions

• How parameters at the customer level impact the functionality of Receivables for that customer

• Defining the customer master in Receivables

Remit to address is crucial for informing customers where to send their payments. It is usually included on invoices for easy reference. In this chapter, you will discover how to set up the remit to address.

• Remit to address guides customers on where to remit payments.

• This information is commonly printed on invoices.

• It helps customers easily identify the payment destination.

Payment terms play a crucial role in determining the due date for an invoice. They can range from simple terms like "15 days" or "Immediate" to more complex ones such as "15th of every month." Payment terms can be defined to suit the specific requirements of your business within the Receivables framework.

• Payment terms in an invoice are essential for calculating the due date.

• They can be simple (e.g., 15 days) or complex (e.g., 15th of every month).

• Payment terms can be customized to meet the business's specific needs.

Understanding how to define payment terms within Receivables is fundamental for managing invoices effectively.

In the Receivables module, invoices can be entered manually or imported from external sources. The process of importing invoices from external sources is carried out using the Autoinvoice process.

Here are the key points to remember when working with Autoinvoice in Oracle Receivables:

• Autoinvoice allows for importing invoices from external sources.

• Configuration of Autoinvoice settings is necessary for the system to understand the expected data format.

• If the received data does not match the Autoinvoice settings, the import of those invoices will be rejected.

By following the steps outlined in this chapter, you will learn how to configure Autoinvoice for importing invoices from external sources effectively.

Revenue scheduling functionality helps in recognizing revenue over a period, similar to AP multi-period accounting where expenses are recognized over time. Key points include:

• Defines revenue schedules based on business needs

• Attached to invoices during creation

• Recognize revenue process triggers revenue recognition for the defined period

This chapter will focus on:

• Defining revenue scheduling rules

In receivable activities, account codes are identified for adjustments in invoices or receipts by assigning the required activity, automatically assigning the account code for the adjustment.

• Receivable activities are utilized to identify account codes for adjustments in invoices or receipts.

• By assigning the necessary activity, the account code is automatically applied for the adjustment.

• The process involves defining receivable activities to manage these adjustments effectively.

Approval limits are set for adjustments on invoices or receipts to control the amount each user can adjust. This ensures that only specific users can make adjustments up to a certain amount. The process involves assigning limits to users based on their role or responsibility.

In summary, the key points for defining approval limits are:

• Approval limits are crucial for controlling adjustments on invoices or receipts.

• Limits are assigned to users based on their roles or responsibilities.

• They specify up to what amount each user can adjust.

In Receivable's invoice, there are two numbers:

• Transaction number

• Document sequence number

Transaction numbers are generated based on the numbering defined in the transaction source. This is a simplified running sequence number assigned to every invoice created using the transaction source. If there is a business need to generate specific numbering for invoices based on transaction type or by legal entity, you can define document sequences as per your business needs. Here's how:

• Define document sequences to generate specific numbering for invoices.

• You can choose to override the transaction number generated by the transaction source with the document sequence number.

In this chapter, you will learn how to define a document sequence to meet your business requirements.

Receivables feature enables the calculation of late payment interest for customers who do not make payments by the due date. This interest can be calculated using a simple rate or by defining interest tiers for more complex scenarios.

In the upcoming chapter, you will discover how to set up and define interest tiers within Receivables to cater to specific requirements. This will allow you to implement a more detailed and customized approach to late payment interest calculations for selected customers.

In this chapter, you will learn about receipt sources:

• Receipt sources are used to identify the source of receipts.

• You can create multiple receipt sources to identify different sources of receipts.

• The chapter will guide you on how to create receipt sources efficiently.

Application rule sets help in determining how a received payment should be applied to an invoice. These rules specify how customers' receipts should be allocated to outstanding invoices, such as Line first - tax after or Line first - tax prorate.

Key points about application rule sets:

• They guide the system on applying customers' receipts against invoices.

• Rules like Line first - tax after or Line first - tax prorate can be utilized.

• An overapplication rule can be defined for scenarios of customer overpayment.

In this guide, you will understand the process of defining an application rule set for effective receipt application.

AutoMatch rules are utilized during receipt application to suggest potential matches when there is no exact match based on the transaction information provided in the receipt.

In this chapter, you will learn about:

• The purpose of AutoMatch rules

• How to define AutoMatch rules

Statement cycles are set to determine how often your customers receive statements. You have the flexibility to customize these cycles based on your business requirements. For instance, you can choose to send statements on a monthly basis.

• You can define statement cycles as per your business needs.

• Statement cycles help in deciding the frequency of sending statements to customers.

• In this chapter, you will gain insights on how to define statement cycles effectively for your business.

Standard messages are pre-defined messages that can be sent to customers, typically at the bottom of a customer statement. These messages can be promotional or general in nature. Below are key points about defining standard messages:

• Standard messages are general messages sent to customers.

• They can be promotional or general in content.

• These messages are often printed at the bottom of customer statements.

• Defining standard messages allows for consistency and efficiency in communication.

In this chapter, you will learn about the Receipt class which determines the steps a receipt will go through. It includes creation, remittance, and clearance of the receipt. The Receipt method on the other hand dictates how the accounting processes will be handled for the receipt.

Here is a breakdown of the key points:

• The Receipt class is responsible for defining the steps a receipt will undergo, such as creation, remittance, and clearance.

• The Receipt method determines how the accounting will be carried out for the receipt.

• By combining the Receipt class and Receipt method, you get a comprehensive view of the steps involved and the accounting procedures for a receipt.

Receivables invoicing process has variety of functions available to meet various business needs.

In this chapter, you will learn about all the activities you can perform using invoicing process.

Before any transactions in Receivables can be completed by a user, they must be granted access to the specific business unit they will be working with. This step is crucial for the user to carry out transactions efficiently. In the upcoming sections, you will understand the process of granting access to a business unit for a user in Receivables:

• Access to the business unit needs to be provided before any transactions can take place.

• Granting access to the appropriate business unit enables the user to perform transactions seamlessly.

• This chapter provides insights into the methods of granting access to business units for users in Receivables.

Invoice entry is a crucial function in Receivables, and it is essential for conducting transactions.

Here is what you need to know about invoice entry in Receivables:

• Accounting period for Receivables must be open before any transactions.

• Using the invoice screen, you can generate:

  • Invoices

  • Debit notes

  • Credit notes

By following the steps in this guide, you will learn how to create invoices effectively in Receivables.

In the Receivables invoice screen, you can create debit notes, credit notes, or credit transactions. This screen resembles the one used for invoicing, with a few fields changing based on the type of transaction being conducted. The chapter focuses on guiding you through the process of creating debit notes, credit notes, and credit transactions.

• You can create debit notes, credit notes, or credit transactions in the Receivables invoice screen.

• The screen shares similarities with the one used for invoicing.

• Certain fields will vary based on the type of transaction you are initiating.

• This chapter will provide insights into creating debit notes, credit notes, and credit transactions.

Invoices with rules feature enables the creation of invoices with attached rules for deferred revenue or deferred receivables. This allows for revenue recognition over time or periodic booking of receivables based on the rule attached to the invoice.

• Create invoices with rules to manage deferred revenue or deferred receivables.

• Choose the appropriate rule to determine how revenue or receivables will be handled over time.

• Learn how to set up rules for invoices to control revenue recognition or receivable booking periods.

In this chapter, you will learn about using FBDI formats in Oracle Receivables for importing invoices from external systems. The FBDI format is beneficial for both regular imports and one-off imports, particularly during data migration.

• Receivables offers FBDI formats for loading invoices from external systems

• These formats can be utilized for regular imports

• They are also useful for one-off imports, particularly during data migration

Once the invoices are created, adjustments may be necessary for various reasons such as late payment charges or writing off invoices due to bad debts. In this chapter, you will be taught how to create adjustments against invoices:

• Adjustments may be required for reasons like late payment charges or bad debts.

• Learn how to create adjustments against invoices effectively.

Many businesses deal with repetitive invoices, such as rental invoices, that need to be sent to customers on a regular basis. Recurring billing offers a solution by creating a framework for defining and automatically generating these repeated invoices.

In this chapter, you will learn:

• The importance of recurring billing for businesses with repetitive invoices

• How recurring billing provides a framework for defining repeated invoices

• The process of creating and setting up a recurring bill plan

• How to generate invoices automatically once a recurring bill plan is defined

The Receivables module lacks a process for the approval of invoices or receipts, which is a common requirement for companies. To implement a maker/checker control system, you can:

• Define a custom role and restrict certain buttons or actions for that role

• Utilize Sandbox personalizations to make form-level changes and assign them to specific roles

Creating a custom role for this purpose may be complex if you are unfamiliar with the process. Sandbox personalizations offer a simpler alternative for implementing necessary changes. This chapter will guide you on how to make modifications using Sandbox personalizations.

Along with key functionalities of invoicing process, there are some additional features which you should be aware of.

In this chapter, you will learn about miscellaneous features of invoicing process.

Receipt process is used receive payment against your invoices from customers.

In this chapter, you will learn about various functionalities available in Receivables.

When a payment is received from a customer against the invoices, a standard receipt is generated. This receipt is then applied to the outstanding invoices to mark them as closed. Here is what you will learn in this chapter:

• Understanding the purpose of a standard receipt

• How to create a standard receipt

• Applying the standard receipt against outstanding invoices

Receipts can be created manually or through a faster option using a Spreadsheet. Creating receipts via a Spreadsheet is a convenient method to generate multiple receipts quickly. Below are the key points covered in this chapter:

• Receipts can be created manually or through a Spreadsheet.

• Creating receipts via Spreadsheet is a quicker option.

• This method is useful for generating many receipts efficiently.

• In the chapter, you will learn how to create receipts using a Spreadsheet.

Sometimes customers may send you an overpayment, which is the surplus remaining after clearing all the invoices.

Here's how you can manage overpayments:

• Keep the overpaid amount on-account to be used against future invoices.

• Alternatively, the customer may request a refund for the surplus.

In this chapter, you will learn how to:

• Create an on-account credit for the surplus amount.

• Process a refund to pay back the customer.

When operating in various geographies, it is common to have regulatory requirements for withholding money on behalf of tax authorities before paying suppliers. Here is what you need to know about handling withholding tax deductions by your customers:

• Regulatory requirements exist for withholding money before supplier payments in certain geographies.

• Customers may withhold a portion of the payment and remit the balance amount to you.

• Customers are typically required to provide a withholding tax certificate.

Customer relationships can be defined in business settings to enable customers to pay on behalf of another customer, especially when they are related. This scenario is particularly common in cases where a company's subsidiaries are billed, but the payment is consolidated and sent centrally by their headquarters. Here's a summary of the key points:

• Customer relationships facilitate payments by one customer on behalf of another, given their association.

• For instance, you can create a receipt for payment from customer X and allocate it against the invoices of customer Y, as long as a relationship has been established between them.

• This functionality helps streamline payment processes and simplifies transactions within related entities.

Mastering the definition and application of customer relationships can greatly enhance efficiency in managing finances and payments across interconnected customers and entities.

In accounting, miscellaneous receipts are generated upon receiving money that is not linked to customer invoices, such as interest from fixed deposits. Below is an outline of how to create a miscellaneous receipt:

• Understand the concept of miscellaneous receipts and when they are utilized.

• Determine the source of the miscellaneous receipt, which could be from interests, dividends, or other non-invoice related sources.

• Record the miscellaneous receipt in your accounting system, ensuring accurate entry and categorization.

• Keep detailed records of miscellaneous receipts for tracking and reporting purposes.

• Ensure compliance with accounting standards and regulations when handling miscellaneous receipts.

Customers are obligated to pay their invoices by the due date. If payment is not received by the due date, late payment interest can be charged to customers. This practice is especially common in Government organizations. This chapter provides a detailed guide on calculating late payment charges.

• Customers are required to pay invoices on or before the due date.

• If payment is not made by the due date, late payment interest can be applied.

• Government organizations often utilize late payment charges.

• This chapter will explain how to calculate late payment charges.

Once all transactions for the month are completed, it is crucial to transfer data from the Receivables module to the General Ledger for accurate financial reporting. The reconciliation process ensures that all the necessary data has been accurately transferred and highlights any discrepancies that may require attention.

In this chapter, you will learn about reconciling Receivables control accounts with the General Ledger through the following steps:

• Complete all transactions in the Receivables module for the month.

• Ensure data has been accurately pushed from Receivables to the General Ledger.

• Identify any discrepancies in balances between the two accounts.

• Rectify any highlighted discrepancies for accurate financial reporting.

After all transactions and reconciliation have been completed in the Receivables module, it is necessary to close the Receivables period to prevent any further transactions from being recorded in that period. Once the period is closed, you can proceed to generate reports for that specific period. In this chapter, you will be guided on how to perform the following actions:

• Closing the Receivables period

• Generating period reports