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BP-080 Business Process Design

j2 Global, Inc.
Accounts Receivables

Author: Syed Abubakar Ali

Creation Date: 15 May, 2018
Last Updated:
Document Ref:
Version: 1.0

S No. Name Designation Sign
1 Sandra AP Key User
2 Naresh Racharla AP Key User
3 Samantha AP Key User

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Document Control:
Change Record
Date Author Version Reference
15-May-2018 Syed Abubakar Ali 1.0 Client Business Manual

Name Position
Guru Krishna Hitachi on-site lead
David Jamison Hitachi on-site manager
Kasey Salmon J2 Global IT manager

S No. Company name Location
1 Hitachi Consulting Hyderabad, India
2 J2 Global, Inc. California, USA

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About this Document 4
Accounts Receivable Process 5
AR 01 Supplier Creation 6
AR 02 Invoice Creation 7
AR 03 Supplier Deposit from Supplier 8
AR 04 Creation of Debit / Credit Memo 9
AR 05 Receipt Creation 10
AR 08 Period Close Process 11
Open and Closed Issues for this Deliverable 12
Open Issues 12
Closed Issues 12

About this Document

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J2 Global has appointed Hitachi Limited to implement Oracle E-Business Suite. The
implementation spans General Ledger, Accounts Payable and Accounts Receivable
processes. This document describes the Process for J2 Global.

The project is divided into Five Stages viz. Plan, Analyze, Design, Develop and Go-Live.
The Analyze Stage covers identifying the gaps in the ‘As-Is’ processes and re-designing
them in order to adopt leading processes as also to harness the capability of the chosen

This document contains the J2 Global Accounts Receivables flow that would be
configured onto the Oracle E-Business Suite

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Accounts Receivable Process
Accounts receivable is an asset account in the general ledger that documents money owed to a business
by customers who have purchases goods or services on credit. Accounts receivable can be contrasted
with accounts payable, a liability account in the GL that documents money the business owes for the
purchase of goods or services. Accounts receivable, accounts payable and payroll are usually listed as
the top three mission-critical business processes in a disaster recovery plan.

During setup, you define business fundamentals such as the activities you process and their accounting
distributions, your accounting structure, and various control features. Setup is also the time to define
comprehensive defaults that Receivables uses to make data entry more efficient and accurate. In
addition, setup lets you customize Receivables to employ the policies and procedures that you use in
your business.
You can set up Receivables a number of different ways. The following graphic shows the most complete
setup scenario. If you use the Oracle Applications Multiple Organization Support feature to use multiple
sets of books for one Receivables installation, please refer to the Multiple Organizations in Oracle
Applications manual before proceeding. If you plan to use Oracle Cash Management with Oracle
Receivables, additional setup steps are required.

AR 01 Supplier Creation

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Set up and maintain suppliers in the Suppliers pages to record information about individuals and
companies from whom you purchase goods and services. You can also enter employees whom you
reimburse for expense reports. When you enter a supplier that does business from multiple locations,
you store supplier information only once, and enter supplier addresses for each location. You can
designate supplier addresses as payment, purchasing, RFQ only, or procurement card locations. For
example, for a single supplier, you can buy from several different addresses and send payments to
several different addresses. Most supplier information automatically defaults to all supplier sites to
facilitate supplier site entry. However, you can override these defaults and have unique information for
each site.

Note: Suppliers can have can have multiple addresses and each address can be used by an operating
unit through a supplier site record.

The system uses information you enter for suppliers and supplier sites to enter default values when you
later enter transactions for a supplier site. Most information you enter in the Suppliers pages is used
only to enter defaults in the Supplier Sites regions. When the system enters that information in a later
transaction, it only uses supplier site information as a default, even if the supplier site value is null and
the supplier has a value. If you update information at the supplier level, existing supplier sites are not

When you enter a supplier, you can also record information for your own reference, such as names of
contacts or the customer number your supplier has assigned to you.

AR 02 Invoice Creation

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This essay describes the accounting entries created when you enter transactions in Receivables using
the Accrual method of accounting.

Receivables creates default accounts for revenue, receivable, freight, tax, unearned revenue, unbilled
receivable, finance charges, and AutoInvoice clearing (suspense) accounts using the information
specified in your AutoAccounting structure.

When you enter a regular invoice through the Transactions window, Receivables creates the following
journal entry:
DR Receivables
CR Revenue
CR Tax (if you charge tax)
CR Freight (if you charge freight)

If you enter an invoice with a Bill in Arrears invoicing rule, Receivables creates the following journal

In the first period of Rule:

DR Unbilled Receivables
CR Revenue

In all periods of Rule, for the portion that is recognized:

DR Receivables
CR Unbilled Receivables
CR Tax (if you charge tax)
CR Freight (if you charge freight)

If you enter an invoice with a Bill in Advance invoicing rule, Receivables creates the following journal

In the first period of the rule:

DR Receivables
CR Unearned Revenue
CR Tax (if you charge tax)
CR Freight (if you charge freight)

AR 03 Supplier Deposit from Supplier

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Oracle Receivables supports two types of commitments with our customers:
1. Deposit: Customer commits to buy certain goods from us within a certain time range. He pays
the amount upfront and we use it until we run out.
2. Guarantee: Customer commits to buy a certain dollar amount from us over a specified time
period. You track their sales to see if they actually spend as much as they said they would. In this
agreement, the customer doesn’t make a prepayment.

In this article we will get into the details of what a deposit is.
Deposit is one of the different transactions that you can create in AR using Transaction Workbench.
Normal AR cycle is that after the goods have been shipped out to the customer, invoice is created in AR
which is sent out to the customer. Following that, we will create a receipt when we get the payment
from the customer and then apply the receipt to the invoice.
In some scenarios, customer would like to get into a commitment/agreement with us that he is going to
buy so and so goods from us in future and he is going to pay ahead for the goods he will buy from us in

Deposit lets you record such transactions, meaning it will record customer’s prepayment for goods and
services that he will buy from us in the future. As and when you ship out the goods to the customer, you
will create invoice and apply it to deposit which will indicate that the customer has used up certain
amount from the original prepayment amount.

Deposit Cycle:
1. You create a DEPOSIT transaction when you sign the commitment with the customer.
2. You create a RECEIPT and apply it to the deposit when you receive the prepayment for the
good they will buy in future.
3. You create an INVOICE when you ship out some goods to the customer
4. Apply the invoice to the Deposit which will decrease balance on the deposit.

AR 04 Creation of Debit / Credit Memo

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Enter a credit or debit memo to record a credit for goods or services purchased. Credit/debit memos are
netted with basic invoices at payment time.

 Credit Memo. Negative amount invoice created by a supplier and sent to you to notify you of a

 Debit Memo. Negative amount invoice created by you and sent to a supplier to notify the
supplier of a credit you are recording. Usually sent with a note explaining the debit memo.

AR 05 Receipt Creation

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Use the Receipts window to enter new or query existing receipts. For each receipt, you can see whether
the receipt is identified and what portion of the receipt has been applied, placed on-account, and left
unapplied. You can enter two types of receipts in Receivables:

 Cash receipts: Payment (such as cash or a check) that you receive from your customers for
goods or services.
 Miscellaneous transactions: Revenue earned from investments, interest, refunds, and stock

You can apply receipts to invoices, debit memos, deposits, guarantees, on-account credits, and
chargebacks. You can partially or fully apply a receipt to a single debit item or to several debit items. You
can enter receipts and apply them to transactions in either Open or Future accounting periods. You can
also create chargebacks or adjustments against these transactions.

If you do not specify a customer for a receipt, the receipt is unidentified. In this case, the receipt amount
appears in the unidentified field in the Receipts window (Application Summary alternative region). You
cannot apply an unidentified receipt.
Receipt Status
A receipt can have one of the following statuses:
Approved: This receipt has been approved for automatic receipt creation. This status is only valid
for automatic receipts.
Confirmed: The customer has approved the application of this receipt and their account balances have
been updated within Receivables. This status is only valid for automatic receipts.
Remitted: This receipt has been remitted. This status is valid for both automatic and manually entered
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
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 non-sufficient funds or if you want to re-enter and
reapply it in Receivables. You can reverse cash receipts and miscellaneous transactions.

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AR 08 Period Close Process

Oracle Receivables requires periodic internal reconciliation of the transactions entered into the
Accounts Receivables system. Oracle Receivables provides a comprehensive set of reports to facilitate
the reconciliation of outstanding customer balances, transactions, receipts, and account balances. The
application provides the functionality to enable reconciliation of your sub-ledger, before posting to the
General Ledger. Posting to the General Ledger allows the extraction of details from Oracle Receivables,
and the creation of journal entries in the General Ledger. After posting to the General Ledger, it is
possible to reconcile Oracle Receivables with the General Ledger by verifying that all the correct journal
entries were made.


The following steps are taken in performing period-end processing for Oracle Receivables.

1. Complete All Transactions for the Period Being Closed

Ensure that all transactions have been entered for the period being closed.
Completing all transactions for Oracle Receivables:
* Complete Invoicing, Credits and Adjustments
* Complete Receipts and Reversals
* Complete Invoice and Customer Import
* Complete Lock Box Processing
* Run the revenue recognition program (Optional; required if OM-shipping is used)
If you import transactions from an external system or Oracle Projects, ensure that you have imported all
transactions and master files, and reviewed all audit trails for completeness.

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Open and Closed Issues for this Deliverable
Open Issues
ID Issue Resolution Responsibility Target Date Impact Date

Closed Issues
ID Issue Resolution Responsibility Target Date Impact Date

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