Previous articles we discussed about overall Receivables process,Setups to create an Invoice & apply receipt to it.In this article we will continue with details of setups and more details around late charges,access & setups related to accounting in Receivables & upto posting Receivables journals to Oracle Fusion General ledger.
Continuing from last article below is summary of Receipt setups for various receipt application we discussed,simple table quickly identifies what setup is required is for each type of receipt creation method.
When creating the receipt classes and methods, there are four primary considerations.
First,determine whether receipts will be created manually, via a lockbox or through automatic receipt processing.
•When creating receipts manually or via lockbox, the receipt class Creation Method should be Manual.
•When using automatic receipts, the Creation Method should be Automatic.
Second, determine which bank accounts are used for remitting receipts.
•Payments received in the form of checks or electronic payments, such as, bank account transfer or credit card payment, need to be remitted to the bank. These payments can be remitted directly or factored in return for cash.
Cash payments do not need to be remitted to the bank.
•It is possible to enter several remittance bank accounts for each receipt method. However, one remittance bank account must be designated as the primary bank account for each currency used.
Third, determine the minimum receipt amount before remitting a receipts to the bank. Receivables allows the deploying company to control the minimum receipt amount allowed to be remitted to a bank account by setting a minimum threshold.
Lastly, Payments that are remitted to the bank must be cleared before they are available as cash. Users can choose to clear receipts either by using Receivables’ automatic clearing process or by Oracle Fusion Cash Management’s bank statement reconciliation.
AutoMatch and Application Exception Rules
As a simple thumb rule you should Set conservative thresholds and then test.
Start with:High values for Customer Recommendation, Threshold Combined Weighted Threshold and Days of Closed Invoices Threshold.Low value for Minimum Match Threshold
Review Customer Account Activities task is performed via the Review Customer Account Details screen which is available on User’s homepage after login
Users can use standard reports to analyze customer account & then take relevant actions
Late Charges Generate late charges for overdue transactions and/or late payments. Include late payments if you want to consider additional charges when the late payment is applied.
Use flat, simple, or compound interest rate calculation to generate interest charges for the transaction depending on the complexity of the interest rate requirements.
Use fixed amounts for late charge calculations if a simplified fixed amount will suffice
Use Interest Tiers and Charge Schedules to enable different interest rate charges
Interest Tiers are used to enable different interest rate charges to the customer based on how late the invoice is overdue and how late the payment is
Use Fusion Revenue Management to
-Revenue Recognition using invoicing and revenue scheduling rules
-Crediting of invoices with rules
-Cost of Goods Sold and revenue matching
-Mass Revenue adjustments
-Access to Revenue setups directly from the Revenue Management work area.
Use pre-defined invoicing rules to support receivables recognition
In Advance: Recognizes receivable amount immediately
In Arrears: Recognizes the receivable amount at the end of schedule
Enable revenue policies only for the appropriate BU
Enable only the appropriate revenue policy based on the speific BU needs
Close Receivables Accounting Period Use following flow to track Month-End processing which is to ensure all pending transactions are completed & re-conciled before closing accounting period in Fusion receivables.
Use below three Work Areas below & run following reports to review and manage actionable items to process before closing your period:
•Billing Work Area
•Receivables Balances Work Area
•Revenue Adjustments
Month-End Reports
1.Receivables to General Ledger Reconciliation Report
2.Extract Reconciliation Data for Receivables to General Ledger
3.Bad Debt Provision Report
4.Customer Balance Revaluation Report
5.Document Number Audit Report
6.Invoices Posted to Suspense report
7.Potential Reconciling Items Report
8.Projected Gains and Losses Report
9.Receivables Aging by General Ledger Account Report
10.Receivables Open Items Revaluation Report
11.Registers
12.Revaluation Reports
13.Exchange gain or loss Reports
Maintain Receivables Period status through common subledger period close management
Depending on business decision to keep historical data,Purge old extract files based on number of days set in the Receivables Profile Option: Receivables Reconciliation Data Purge Frequency
Job Roles & Associated Duty Roles for Month End Processing
To summarize,in these three articles we discussed setups & process to create invoices, receipts,late charges,credit memo & other possible transactions in Fusion receivables & then to recognize revenue & close period to account for transaction described in these three articles.
For benefit of readers who are new to this functionality below are some key terms/Definitions
What is Transaction Source?Use transaction types to define the accounting for the debit memos, credit memos, on-account credits, chargebacks, commitments, and invoices you create in Receivables. Transaction types also determine whether your transaction entries update your customers' balances and whether Receivables posts these transactions to your general ledger.
What is Auto Invoice?A) Autoinvoice is a tool used to import and validate transaction data from other financial systems and create invoices, debit-memos, credit memos, and on account credits in Oracle receivables. Using Custom Feeder programs transaction data is imported into the autoinvoice interface tables.
Autoinvoice interface program then selects data from interface tables and creates transactions in receivables (Populates receivable base tables) . Transactions with invalid information are rejected by receivables and are stored in RA_INTERFACE_ERRORS_ALL interface table.
What is AutoAccounting?A) By defining AutoAccounting we specify how the receivables should determine the general ledger accounts for transactions manually entered or imported using Autoinvoice. Receivables automatically creates default accounts(Accounting Flex field values) for revenue, tax, freight, financial charge, unbilled receivable, and unearned revenue accounts using the AutoAccounting information.
What are Autocash rules?A) Autocash rules are used to determine how to apply the receipts to the customers outstanding debit items. Autocash Rule Sets are used to determine the sequence of Autocash rules that Post Quickcash uses to update the customers account balances.
What are Grouping Rules? (Used by Autoinvoice)
A) Grouping rules specify the attributes that must be identical for lines to appear on the same transaction. After the grouping rules are defined autoinvoice uses them to group revenues and credit transactions into invoices debit memos, and credit memos.
What are Line Ordering Rules? (Used by Autoinvoice)A) Line ordering rules are used to order transaction lines when grouping the transactions into invoices, debit memos and credit memos by autoinvoice program. For instance if transactions are being imported from oracle order management , and an invoice line ordering rule for sales_order _line is created then the invoice lists the lines in the same order of lines in sales order.
What are Transaction types? Types of Transactions in AR?
A) Transaction types are used to define accounting for different transactions such as Debit Memo, Credit Memo, On-Account Credits, Charge Backs, Commitments and invoices.
What are the available Key Flex Fields in Oracle Receivables?A) Sales Tax Location Flex field, It’s used for sales tax calculations.
Territory Flex field is used for capturing address information
What is Autolockbox?
A) Auto lockbox is a service that commercial banks offer corporate customers to enable them to out source their account receivable payment processing. Auto lockbox can also be used to transfer receivables from previous accounting systems into current receivables. It eliminates manual data entry by automatically processing receipts that are sent directly to banks. It involves three steps
1 Import (Formats data from bank file and populates the Interface Table),
2 Validation(Validates the data and then Populates data into Interim Tables),
3 Post Quick Cash(Applies Receipts and updates Balances in BaseTables).
What is Transmission Format?
A) Transmission Format specifies how data in the lockbox bank file should be organized such that it can be successfully imported into receivables interface tables. Example, Default, Convert, Cross Currency, Zengen are some of the standard formats provided by oracle.
What are the different statuses for Receipts?
A) Unidentified – Lack of Customer Information
Unapplied – Lack of Transaction/Invoice specific information (Ex- Invoice Number)
Applied – When all the required information is provided.
On-Account, Non-Sufficient Funds, Stop Payment, and Reversed receipt.
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