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1. Invoice
Invoice in AR is used to bill the customer for the goods and the services offered (rendered).
2. Debit Memo
Debit Memos in AR have the similar concept as that of an invoice. A debit memo could be used to
invoice the customer for certain miscellaneous expenses incurred which were not included in
the actual invoice for the product/service. Debit memo information is stored in
ra_customer_trx_all, the type of transaction a particular row represents can be found out from
the field class of ar_payment_schedules_all by linking the customer_trx_id field in the two tables.
Debit Memo is not created like credit memo. Debit memo is usually not linked to any other
Invoice like credit memos; the whole idea behind creating a debit memo is to increase the
customer outstanding balance.
3. Credit Memo
Credit Memos with negative amount are typically used for crediting the customer’s account with
some balance. Credit memo information is also stored in ra_customer_trx_all
Credit memo can be created in two different ways; the idea behind creating a credit memo is to
reduce the customer invoice balance.
Credit Memo can be created in two ways
1. Manually creating a credit memo like any other AR manual invoice.
i. Invoice Class: Credit Memo
ii. Invoice Type: OM Credit Memo, Credit Memo
2. Querying an existing AR Invoice and calling the Credit function from Actions menu
Query the AR Invoice for which you want to create a credit memo
i. Click on “Actions menu”
ii. Specify the “Reason for Credit Memo”
iii. Enter the Line % for Credit memo (Eg: 25% entered)
iv. Enter the Tax % for Credit memo (Eg: 10% entered)
v. Click the Save button
4. Deposit/Advance Creation Process and Apply to Invoices
Deposits are entered in the AR system to capture the customer advances and apply them to the
AR invoices.
As is evident from the names a customer type is defined as a Person when the customer is a
single person and while creating a customer, which is organization, the customer type is kept as
Organization. From the back-end point of view, a customer can be distinguished as a person or
organization from the field party_type of the table hz_parties which is linked to the table
hz_cust_accounts by the field party_id.
1. Customer Name (Stored as party_name in the table hz_parties, first name, middle name
and last name are also present for a customer type as Person)
2. Customer Number (Stored as account_number in the table hz_cust_accounts)
3. Address: There can be multiple addresses defined for any customer and these addresses
can be for various purposes for eg. Billing or Shipping the goods. Also, we can specify if a
particular address is active at any point of time or not. The primary flag indicates
whether a particular address is primary or not. Moreover, within an operating unit there
can be only one primary bill to address (active) for any customer. Information regarding
all this can be derived from the tables hz_cust_site_uses_all and hz_cust_acct_sites_all,
where the cust_account_id of hz_cust_accounts acts as a foreign key.
Main Tables
hz_parties -> hz_cust_accounts -> hz_cust_acct_sites_all -> hz_cust_site_uses_all
A. Creating Invoice
After entering the lines for an invoice and saving it, an invoice needs to be completed for it to
appear for any payment application. Pressing the Complete button at the lower most left corner
of the transaction screen does this. Any further changes to the invoice can only be done by again
incompleting the invoice.
The invoice information is stored in the table ra_customer_trx_all where the trx_number
corresponds to the invoice number entered from the front end. Once an invoice is completed the
record appears in ar_payment_schedules_all table, where the customer_trx_id from
ra_customer_trx_all acts as a foreign key.
A receipt can also have some amount as applied, some as unapplied and some as on-account or a
combination of any two of these.
This completes one basic cycle of AR i.e.
1. Creating a customer
2. Invoicing the customer
3. Applying payment to the invoice and closing it.
Note: While this illustrates the brief functionality of AR, appropriate accounting entries need to
be passed by setting the accounts for the customer.
The application of a receipt to an invoice can take various other forms for e.g.
1. To an invoice of amount $100, a receipt of amount $50 is applied. In this case the invoice
remains open with an outstanding amount of $50 while the receipt amount gets
exhausted.
2. A receipt of amount $200 is applied to an invoice of amount $100. In this case the
remaining receipt amount i.e. $100 can be kept unapplied or on-account.
10. Receipt reversal
If you apply a receipt against an invoice whose revenue was automatically deferred upon
import, and you later reverse that receipt, then the impact of the receipt reversal differs
depending on the original reason for the revenue deferral:
If revenue on an invoice was deferred due to unmet header level collectibility requirements,
then Receivables initiates revenue recognition whenever you apply a receipt to the invoice. If
you
reverse a previously applied receipt, then Receivables automatically unearns the previously
earned revenue. In some cases, you might apply a receipt against an invoice line, but
Receivables cannot recognize revenue for that line due to unmet line level collectibility
requirements. Therefore, Receivables leaves the receipt amount as unearned revenue, but flags
the amount as pending revenue recognition at a later date. If you later reverse the receipt, then
Receivables reflects the receipt reversal by simply removing that pending flag from the receipt
amount.
If revenue on an invoice was deferred due to unmet line level collectibility requirements only,
then the reversal of a receipt does not impact the amount and timing of revenue recognition.
11. Auto invoice open interface
The process for creating invoices in AR manually has been demonstrated in the earlier sections.
However, considering the volume of transactions involved, it is not always feasible to create all
the invoices manually. To overcome this AR provides a standard program called ‘Autoinvoice
Master Program’. Whenever shipment of certain items happen from the Order Management
Module, Workflow background process is run to populate data into the interface tables provided
by AR and then the autoinvoice program can be run to automatically generate invoices in AR.
Optionally, data from some legacy systems (if applicable) can also be populated into the
interface tables by building customized interfaces. The following interface tables need to be
populated before running autoinvoice
1. RA_INTERFACE_LINES_ALL
2. RA_INTERFACE_DISTRIBUTIONS_ALL (Optional depending on the specific project
requirements)
3. RA_INTERFACE_SALESCREDITS_ALL (Optional depending on the specific project
requirements)
Autoinvoice program can also be used for creating debit memos and credit memos apart from
invoices. Also, applying a credit memo to invoice can also be done using autoinvoice
Auto invoice is the process used for importing the transactions from feeder moudles like project
accounting, order entry etc. and also from existing applications/systems if the receivable
module is installed for the first time.
Auto-Invoice
Navigation: Receivable >> Interface >> Auto-Invoice
Chargeback Creation Process
Chargeback is postponement of payment date. It can be done only in the receipts workbench. In
this process the old invoice is cancelled and a new transaction is created for the postponed date.
Or, Adjusting remaining balance of the existing debit item to zero, and create a new debit item to
bill customer for unpaid balance of original invoices.
After apply the receipts to any invoice, if you want to re-activate the Invoice by also keeping the
Receipt in place. Then click the Chargeback button.
In order Management, sometimes goods may return to supplier because of damage. To refund
that material amount, supplier will create Credit Memo to customer, to credit customer balance.
Auto Invoice
Create invoices from other sources like Order Management, Service Contracts, Projects Billing,
etc,. This will be done using Auto Invoice master program.
Tables in AR
1. The RA_CUSTOMER_TRX_ALL table stores invoice, debit memo, commitment, bills receivable,
and credit memo header information. Each row in this table includes general invoice
information such as customer, transaction type, and printing instructions. One row exists for
each invoice, debit memo, commitment, bill receivable, and credit memo that you create in
Oracle Receivables. Invoices, debit memos, credit memos, bills receivable, and commitments are
distinguished by their associated transaction types, which are stored in the
RA_CUST_TRX_TYPES_ALLtable.
5. The RA_CUST_TRX_TYPES_ALL table stores information about each transaction type that is
used for invoices, commitments, bills receivable, and credit memos. Each row includes Auto
Accounting information as well as standard defaults for the invoices that result.