R12: Oracle Financials

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Module: Oracle Receivables

Module Objectives
Order to Cash process overview Receivables process overview Managing Parties and Customer Accounts Transactions Setup Transactions Process AutoInvoice Receipts Setup Receipts Process AutoLockbox

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Order to Cash Process Overview

Order and Credit Management Shipping Execution

Enter

Credit Check Receivables

Book

Pick Release AutoInvoice

Ship Confirm

Cash Management

Invoice/Revenue

Collections

Receipt

Bank Reconciliation

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Order Lifecycle
Ordering:
Ordering Scheduling Shipping

Collecting
AutoInvoice to Receivables Invoicing / Revenue Collection & Receipts

Accounting
Cash Management Transfer Accounting to GL via SLA

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Order to Cash: Integration Overview

Customers Customer Master Orders CRM Suite

Reserve Demand Item Information Inventory

Order Management Pricing

Shipping Invoices Collections Payments Oracle Payments

Advanced Collections Accounting SLA/GL

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Receipts Receivables Cash Management

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What is Oracle Receivables?

Helps in managing the

financial relationship with your customers

Create and track

Invoice Sales Orders and Accounts Receivables

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Oracle Receivables Overview

Receivables

Imported through AutoInvoice

Transactions

Manual Creation

Cash Management

Receipt

Transfer to General Ledger via SLA

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Oracle Receivables

Receivables Integration with Other Modules

Financials
Payables Projects Property Manager Lease Management Subledger Accounting E-Business Tax Credit Management Advanced Collections General Ledger Payments Cash Management iReceivables Bill Presentment Architecture Approvals Management

CRM
Service Contracts Trade Management

Technical
Workflow

Manufacturing
Order Management Loans

Non-Oracle Systems

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Receivables Process
Create Profile Classes

Enter Customers

Transactions
Manage Customer Credit

Review and Correct Data

Print and Send Invoices

Transfer to G/L via SLA

Enter Receipts

Collect Payments

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Managing Parties and Customer Accounts

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What is a Customer?
A customer is an

organization or person with whom you have a selling relationship.

This selling relationship can

result from the purchase of products and services or from the negotiation of terms and conditions that provide the basis for future purchases.
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Overview: Party Model

One record to represent both a prospect and a customer Each application uses different features of the party model Interact with the party model through the following: Customers set of pages: Online entry and query of party and customer account information. Party interface table: Batch load of party information using the Import Batch to TCA Registry program. Party and customer account merge: Merge parties and customer accounts. This functionality is used to correct party information and for business consolidation.

Receivables Customers set of pages Party Master

Order Management Party Interface tables

Projects Party merge

CRM

Party Model Tables

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Party Model
Selected Party level attributes
Name Street address Parent/subsidiary relationships Industrial classifications DUNS number (D&B) External credit ratings Taxpayer ID

PARTY SITE

Bill to Ship to

Division Of

PARTY

PARTY
Bill to Ship to

SITE

Bill to Ship to

SITE Selected Account level attributes

Payment terms Billing preferences Shipping preferences Internal credit rating

Account
Acct Site

Account
Acct Site

Account
Acct Site

Bill to, Ship to

Bill to, Ship to

Bill to, Ship to

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Party Model
Party Sites: Allow multiple organizations or parties to do business at one location. Party sites are global, but do not default under different operating units Have flexible address formatting with seeded and custom formats Customer Accounts: Information held at the customer account level is about the business relationship. It is for items like payment terms and billing preferences. The financial rollup point is an account. It tracks the monetary portion of a partys purchases and payments. The party model allows you to establish multiple relationships through party accounts with the same organization or person party.

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Managing Parties
Managing parties includes these activities:
Create customer account profile classes. Assign profile classes to customer accounts. Create and maintain party information. Define relationships between parties and between customer accounts

(both reciprocal and non-reciprocal).

Merge parties and customer account information. Review party and customer account information online and in reports.

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Profile Classes
Customer Profiles are used to group customer accounts with similar creditworthiness, business volume, payment cycles, and late charge policies. For each profile class, you can define information such as:
Credit limits Payment terms Statement cycles Invoicing and discount information Amount limits for your late charges, dunning, and statements for each currency in which you do business

Poor Credit
Cash on Delivery High Risk Credit Classification Monthly Statements

Good Credit
Net 30 Semiannual Credit Review Cycle Monthly Statements

Excellent Credit
Net 90 No Credit Check Quarterly Statements

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Updating Profile Classes

You can modify attributes in existing profile classes even after customer accounts are assigned to them
There are three options after making a change to a profile class:

Do not update existing profiles: Only the profiles of new customer accounts
created in the future will reflect the changes

Update all profiles: The attribute is updated in all customer accounts that use this
profile.

Update all non-customized profiles: Profile classes set the default values initially
assigned to individual customer account profiles. If an attribute in an individual party profile was customized to be different from its profile class, changes to the value of a profile class attribute do not change the customized value of the attribute in the individual customer account profile.

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Profile Classes

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Entering Party Information

Data Quality Management (DQM) is a powerful tool that allows you to:
Prevent duplicate entries of the customer Perform advance searches with user-defined criteria
Entry Methods:

Import from Other Systems: Customer Interface: Allows you to import and validate current or historical
customer information from other systems

Bulk Import: Allows you to bulk import parties from legacy systems and from
purchased sources to the TCA registry using the Import Batch to TCA Registry program

Customer Set of Pages: Use these to manage, search, create, and update
customer information

Sales Order Window

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Entering Party Information: Customers Set of Pages

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Entering Party Information: Customer Interface

External Databases

Temporary Interface Tables

Oracle Receivables Customer Tables

Correct errors with SQL*Plus

Customer Interface Execution Report

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Entering Party Information: Business Considerations

Follow Naming Conventions Determine the usage of Automatic Numbering Define how to use classifications to group customers, both for pricing functionality and for reporting purposes Decide whether to set up centralized (one party with single bill-to site) or decentralized (multiple parties with a single bill-to site per party) parties
Standard Business Purposes: Bill-to Ship-to Marketing Statements Dunning Legal

Decide whether to allow Payment of unrelated transactions

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Merger Party or Customer Accounts

Merge parties or customer accounts to:

Eliminate incorrect data and duplicate information Consolidate site data Reflect party or customer account changes due to business consolidation

Party Merge results in merging of everything under the parties. Customer Account merge results in merging of two accounts under one party
Party Merge Customer Account Merge

AT&T

American Telephone

AT&T

Montreal

London

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Customer Account Relationships

Relationships exist between two customer accounts. They allow the

following:
Payment of related invoices. Sharing of pricing entitlements (Agreements and Commitments). Consolidation of business addresses (selection of a related customers ship-to address during order entry).
The relationship can be reciprocal or nonreciprocal. Relationships are not transitive.

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Reports and Setup Options

Multiple options for reviewing customer information: Review data online Search Information Run reports:
Customer Listing Detail/Summary Customer Profiles Report Customer Relationships Listing

Setup Options Mandatory Setups required for Customer Profiles:

Collectors Payment Terms
Mandatory Setups required for Customer setup:

Profile Classes System Options Profile Options

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Transactions

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Transactions: Required Setup

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 System and Profile Options

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Receivables Transaction Types

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 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.
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Implementation Consideration: Transaction Types

Transaction types to be defined in the following order: Credit Memo Invoice Debit Memo Chargeback Bill Receivables Deposit Guarantee

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Receivables Transaction Types

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AutoAccounting
Invoice Salesperson = Joe Adams Transaction Type = Invoice 1. Wrist Pad 2 @ 1,000 Revenue Account = 01-100-4505-201 Salesperson = Joe Adams Revenue Account = 02-100-4000-000 Account Type = Revenue Segment Constant Value Table Name CO 01 CC Salesreps Account Trans. Types Product Standard Line Transaction Type = Invoice Revenue Account = 02-000-4505-100 Standard Line = Wrist Pad Revenue Account = 02-000-4101-201
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AutoAccounting

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Balance Forward Billing Cycle

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Payment Terms

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Transaction Sources

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Remit-to Addresses

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System Options

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Profile Options

AR: Allow Update of Existing Sales Credits AR: Change Customer on Transaction AR: Default Exchange Rate Type AR: Override Adjustment Activity Account Option AR: Transaction Batch Source AR: Use Invoice Accounting For Credit Memos

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Transactions: Optional Setup

The following are optional setup steps for customer invoices: Accounting Rules
Salespeople Standard Memo Lines Document Sequencing Statements Balance Forward Billing Tiered Interest Rates

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Accounting Rules

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Standard Memo Lines

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Document Sequencing
Steps to enable document sequencing:
Enable the sequence numbering profile option Define sequences Assign sequences to categories

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Statements: Aging Bucket

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Statements: Statement Cycles

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Statements: Standard Messages

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Implementation Considerations: Transactions

AutoAccounting Source of Table

Payment Terms: Discounting? Balance Forward Billing? Split Payment Terms? Allocating Tax and Freight?

Transaction Batch Source?

Value
Non Oracle Systems
Oracle Receivables

ID AutoInvoice
Oracle System
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Implementation Considerations: Remit-to Address

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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Implementation Considerations: Function Security

Function Name Transactions: Complete Transactions: Dispute Transactions: Copy Transactions: Print Inv: View Inv: Enter Inv: Update Inv: Delete Activities That Can Be Restricted Complete transactions Place transactions in dispute Copy transactions Print transactions View invoices Enter invoices Update invoices Delete invoices

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Transactions: Process Flow

Invoices Adjustments Debit Memo Credit Memo

Standard Transaction Copy Review and make corrections Valid transaction Invalid transaction Void Delete

Complete, print and send to customer Enter receipt Interface to General Ledger via SLA

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Transactions
Types of transactions:
Invoices Credit Memos Debit Memos Guarantees Deposits Adjustments Chargebacks Manual Entry: Transactions that do not originate from feeder system, like, invoices for misc items, services, or freight AutoInvoice: Import transactions from

Transactions entry methods:

Order Management Projects Service Property Management Non-Oracle Systems

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Invoice Components
Header

Lines

Customer Information

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Transaction Defaults
Transaction defaults save data entry time and reduce errors. Transaction Source defaults:

Transaction type Transaction numbering Legal entity Transaction class Payment terms (if not set at the customer level) Legal entity Accounting Credit memos for invoices Invoice information for commitments Accounts for transactions Validates accounts

Transaction Type defaults:

AutoAccounting defaults:

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Transaction Defaults
Customer Record defaults:

Ship-to and bill-to address Payment terms Salesperson

Accounting Rules default from:

An item A standard memo line

Statement cycles default from the customer profile class. Payment terms for balance forward billing default from either the customer account or customer account site profile, depending on the Bill Level value of the customer account profile.

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Transactions: Freight Details

Freight charges can be recorded optionally. Freight can be recoded at:

Invoice Level Line Level

Freight Account is determined by AutoAccounting Rules.

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Transactions: Sales Credit

Sales Credit information can be recorded optionally A salesperson must be assigned to each invoice if the Require

Salesperson is selected in the System Options window is selected

Allocates sales credit among salespeople Records:

Revenue sales credit: credit based on invoice lines Non-revenue sales credit: credit in excess of the revenue sales credit, such as bonuses or incentives
AutoAccounting recalculates the revenue account assignment

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Completing Transactions
Requirements for completing an invoice are:

Invoice must have at least one line, or at the header level be a freight invoice. General Ledger date must be in an open or future period. Invoice sign must match the sign of the transaction type. Sum of distributions for each line must equal the invoice line amount. If Calculate Tax for the transaction type is set to Yes, tax is required on each line. If freight was entered for this transaction, you must specify a freight account. All the activity date ranges for the setup values (for example, payment terms) must be valid for the invoice date. If this transaction uses an automatic receipt method, you must enter Customer bank, branch, and account information.
On completion of invoice:

Payment schedules and aged receivable amounts are calculated Completed transactions can be transferred to General Ledger Only completed transactions can be printed
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Invoice Batches
Invoice batching is used to create groups of invoices. Batching provides for control checks and balances, which are not

applicable to single invoices.

Invoice Batches features:

Batch date defaults to the invoice date. If a batch is entered, Receivables uses the source assigned to the batch for each of the invoices. Batch counts and amounts must equal actual invoice counts and amounts. Actual invoice count and amount are updated as each invoice is entered. A batch can contain invoices with different currencies. Invoices can be printed by batch. Receivables uses invoice batches to import invoice data. Batch information identifies the originating system when importing transactions.

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Invoice Copy
Invoice Copy allows creation of recurring invoices for products sold

on a regular basis.
Invoice Copy features:

Model invoice is used to copy a series of invoices in future periods. Model invoice must be complete After the copy action, changes to the model invoice do not reflect on the copied invoice Recurring rules can be associated with invoice copy

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Invoices with Rules

Accounting Rules Accounting rules determine when to recognize revenue amounts. Each invoice line can have a different accounting rule. Accounting Rule types:
Fixed Schedule: Recognize revenue over a specific number of periods. Revenue can be spread evenly or a percentage can be specified for each period. Variable Schedule: Recognize revenue by a percentage for the first period. The remaining revenue is spread evenly across the number of periods that you specify during transaction entry. Daily Revenue Rate All Periods: Used to accurately calculate the revenue distributions across all accounting periods, including both full and partial periods. Partial Periods: Used to accurately calculate the revenue for only partial periods.

Invoicing Rules Invoicing rules determine when to bill the customer. Invoicing Rule types:
Bill in Advance Bill in Arrears

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Bill in Advance: Example

Invoice rule = Bill in Advance January Dr. Receivables 3000 Cr. Unearned rev. 3000 Dr. Unearned rev. 1000 Cr. Revenue 1000 Dr. Unearned rev. 1000 Cr. Revenue 1000

Invoice February

March

Dr. Unearned rev. 1000 Cr. Revenue 1000 Accounting rule = 3-Month Fixed Duration

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Bill in Arrears: Example

Invoice rule = Bill in Arrears January Dr. Unbilled receivable 1000 Cr. Revenue 1000 Invoice Dr. Unbilled receivable 1000 February Cr. Revenue 1000

March

Dr. Unbilled receivable 1000 Cr. Revenue 1000 Dr. Receivable 3000 Cr. Unbilled receivable 3000 Accounting rule = 3-Month Fixed Duration

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Deferred Accounting Rules

Defer all revenue to an unearned revenue account by assigning a

deferred accounting rule to an invoice

A single distribution per line is created that posts to an unearned

revenue GL account
You later recognize the revenue using the Revenue Accounting

feature.
This is used only with the Bill in Advance invoicing rule.

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Revenue Recognition Program

Deferred Revenue = Unearned Revenue Revenue Recognition program

Bill in Advance = Unearned Revenue

Journal entry

Bill in Arrears = Unbilled Receivables

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Adjustments through Revenue Accounting

The Revenue Accounting feature lets you adjust:
Earned or Unearned Revenue Sales Credit Completed invoices and credit memos Make adjustments at transaction or line level

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Invoice Correction
Methods of invoice correction: Under-invoicing: Occurs when an invoice is generated for an amount that
is less than the actual amount due. The difference between the amounts can be corrected by:
Updating the invoice Creating a Debit Memo

Over-invoicing: Occurs when an invoice is generated for an amount that is

greater than the actual amount due. The difference between the amounts can be corrected by:
Updating the invoice Creating a Credit Memo Refunds On Account Credit

Invalid Transactions: Occurs when the transactions are created in error.

These transactions can be:

Deleted Voided

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Corrections Overview
Correction Type Update Invoice Debit Memo Effect on Invoice Changes original None; new item Activity Approval Limits None Accounting Source Original Transaction AutoAccounting

None

Adjustment

User

Receivables Activity Original Transaction or AutoAccounting (profile option) AutoAccounting

Credit Memo

New item applied to original

None

On-account Credit

None; account only

None

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Corrections Overview
Correction Type Update Invoice Usage Restriction Activity

Tax Automatic

Entry Query in Transactions window Transactions window Transactions Summary Transactions Summary Transactions window

Debit Memo

Automatic

None

Adjustment

Manual or write-off Automatic

Approval limits None

Credit Memo

On-account Credit

Automatic

None

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Updating Invoice

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Debit Memos

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Adjustments
Transaction Summary Adjust (B)

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Credit Memos

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Refunds

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Printing Transactions
You can print the following documents to send to customers:
Invoices Credit memos Debit memos Deposits Guarantees Chargebacks Adjustments Bills Receivable

Process for Printing Preview First:

Submit the Invoice Print Preview report to see transactions that will be printed. Select a list of transactions by specifying values for the report parameters

Then Print:
Print transactions in batch. Print transactions that have not been printed. Specify a range of transactions to print. Specify other parameters, such as transaction type, class, or customer.

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AutoInvoice Process: Overview

RA_INTERFACE_LINES_ALL RA_INTERFACE_DISTRIBUTIONS_ALL RA_INTERFACE_SALESCREDITS_ALL

Third party data

SQL data Valid AutoInvoice loader lines interface tables

Oracle Receivables transaction tables

Oracle data

Interface Program

Error lines

View and correct invalid records

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AutoInvoice: Integration
The invoices can be created from the following:
Order Management Projects Loans Services Lease Management Property Manager Non-Oracle Systems

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AutoInvoice: System Options

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AutoInvoice: Transaction Batch Source

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AutoInvoice: Line Ordering Rules

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AutoInvoice: Grouping Rules

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Submitting AutoInvoice
AutoInvoice Master Program Parameters:
Source Default Date Transaction Type Bill-To Customer Number/Name Range GL Date Range Ship Date Range Transaction or Sales Number Range Invoice Date Range Ship-To Customer Number/Name Range

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AutoInvoice Reports
AutoInvoice Execution Report: Review AutoInvoice results AutoInvoice Validation Report: Review lines that failed validation

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AutoInvoice Exception Handling: Interface Lines

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AutoInvoice Exception Handling: Interface Exceptions

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AutoInvoice: Implementation Considerations

What type of transactions or lines will be imported? Will you need to modify the Transaction flexfield? How and when will errors be identified? Who is responsible for correcting the errors? Will you need to create Grouping Rules with optional attributes?

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Receipts

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Receipts: Setup Steps

Receivable Activities Remittance Bank Bank Accounts Receipt Class and Receipt Method Receipt Source AutoCash Rule Sets Application Rule Sets

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Receivable Activities
Receivable 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. List of activity types:
Adjustment Bank Error Earned Discount Unearned Discount Late Charges Refunds Misc Cash Credit Card Chargebacks

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Receivable Activity: Example

Invoice #100 Line 1 Tax for Line 1* Revenue account 4010 Tax account 2025 600 500 100

Receivable account 1210 *Tax rate code = VAT @ 20%

Adjustment #200 Tax rate code source = None Tax rate code source = Invoice Revenue Revenue Receivable
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120 120

Tax Receivable

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Receivable Activities

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Receipt Class, Receipt Method and Bank Account: Relationship

Receipt class

Receipt method

Receipt method

Bank account
GL account

Bank account
GL account

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Define Remittance Bank Account

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Define Receipt Class

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Receipt Class/Method and Bank Account Association

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Define Receipt Sources

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Define AutoCash Rule Sets

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Define Application Rule Sets

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Cross Currency Receipts

Use this feature if you needs to apply receipts to transactions in different currencies 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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System Options

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Profile Options
AR: Allow Overapplication in Lockbox AR: Always Default Transaction Balance for Applications AR: Application GL Date Default AR: Cash - Allow Actions AR: Commit Between Validations in Lockbox AR: Create Bank Charges AR: Include Receipts at Risk in Customer Balance AR: Invoices with Unconfirmed Receipts AR: Receipt Batch Source

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Implementation Considerations: 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. Define AutoCash Rule Sets for a customer when using AutoLockbox or QuickCash. Define receivables activities for earned and unearned discounts. Define receivables activities before setting up bank accounts in Cash Management.

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Implementation Considerations: Function Security

Function Name Cash Miscellaneous QuickCash QuickCash Post Remit Auto Reverse Exchange Rate Adj. Activities That Can Be Restricted View, enter, update, and delete cash receipts View, enter, update, and delete miscellaneous transactions View, enter, and update QuickCash receipts (either all, manual only, or AutoLockbox only) Post QuickCash View, create, maintain, approve, and format automatic remittances View, create, maintain, approve, format, confirm, and unconfirm automatic receipts Standard reversals or debit memo reversals Create exchange rate adjustments

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Overview of Receipts Flow

Enter receipt

Apply to customer account or invoice

Update customer balance

Clear receipt

Reconcile bank statement

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Receipt Creation
Methods of receipt creation: Manual Receipts: This method provides more control over the application
of individual receipts to specific items. Two types of manual receipts:
Standard Miscellaneous

QuickCash Receipts: This method only requires a minimal amount of

information for each receipt and application and provides an extra level of control for entering high volume receipts as it does not immediately affect your customers account balance. Two types of quickcash receipts:
Standard AutoLockbox

Automatic Receipts: Used to automatically generate receipts for

customers with whom you have predefined agreements.

Credit Card Debit Card Prepayments

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Receipt Statuses
Receipt Statuses: 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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Manual Receipts V/S QuickCash Receipts

Manual Receipts
Apply receipts using the Applications or Mass Apply windows. Apply receipts at invoice line level. Post receipts information after applying receipts. Enter GL Date and Deposit Date at batch level and change dates at receipt level. Create adjustments and chargebacks for debit items with applied receipts.

QuickCash Receipts
Apply receipts using QuickCash window and AutoCash rules. Apply receipts at invoice header level only. Post receipts after running the Post QuickCash program. Enter GL Date and Deposit Date at batch level and change dates at receipt level. Create adjustments or chargebacks after Post QuickCash is run.

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Manual Receipt Entry Process

Create a batch Enter receipts

Apply receipts

Post to GL Enter chargebacks and adjustments Remit receipts

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Batch Creation

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Batch Status
Status New Description Creating a new batch. The status of the batch changes to Out of Balance, Open, or Closed when receipts are saved for the first time. Actual count and amount of receipts do not match the control count and amount. Actual count and amount match the control count and amount, but the batch includes unapplied or unidentified receipts. Actual count and amount match the control count and amount. All receipts have been identified and applied to invoices or applied on account.

Out of Balance

Open

Closed

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Apply Receipts
You can apply a receipt to: Many invoices or put cash on account An invoice in a different currency Against specific transaction lines (invoices, debit memos, and chargebacks only) 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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Applying Batch Receipts

$4,000 Multiple invoices

$1,000 Receipt batch control: 3 receipts, $10,000 Single invoice

$5,000

On-account

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Apply Receipt to Invoice

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Apply Receipt to Invoice Line

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Mass Apply a Receipt

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AP / AR Netting

Trading Partner Payables

AP/AR Netting Process

AP payment

AR receipt

Trading Partner Receivables

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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 invoiceyou apply the receipt to the invoice, then create a chargeback for the balance due. You can create multiple chargebacks and adjustments against each transaction, for positive or negative amounts. Receivables lets you enter a chargeback against credit memos or on-account credits that have a positive balance.

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Chargebacks Against Receipt

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Credit Card Chargebacks

Requests Chargeback (Either due to a problem with the order or the credit card charge)

Issues Chargeback

Customer

Credit Card Company

Notifies Vendor that a Chargeback has taken place

Vendor
Records and Investigates the Chargeback Before either Acknowledging it or Proving it Invalid

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Vendor Claims on Credit Card Chargebacks

Receive Credit Card Chargeback Notification from Card Issuer

Is the Chargeback Valid? No

Yes

Create Credit Memo to Credit Invoice

Find Receipt

Find Receipt

Subtract the Amount of the Credit Card Chargeback from the Application Line Apply Credit Card Chargeback Activity Generates Negative Misc. Receipt

Unapply the Credit Card Chargeback Activity

Reverses

Negative Misc. Receipt

Restore the Original Amount on the Application Line

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Balancing Segments
Receivables uses the Account Generator to update balancing

segment values during various accounting activities against transactions and receipts.
By matching balancing segments for different accounting activities

back to the original transaction or receipt, the Account Generator ensures that Receivables uses the correct balancing segment values during this substitution process.

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Deriving Balancing Segment Values

For transaction-related activities, such as adjustments and

discounts:
Receivables derives the balancing segment value from the receivable account that is associated with the transaction
For receipt-related activities, such as receipt write-off:

Receivables derives the balancing segment from the Unapplied Cash account that is associated with the receipt method bank account

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Disabling the Balancing Segment Substitution

You can optionally use the AR: Disable Receivable Activity

Balancing Segment Substitution profile option to disable balancing segment substitution for Receivables activities.

This profile option does not affect the gain, loss, and rounding

accounts that you define at the system options level.

Profile Option affects the following activities:

Adjustments Discounts Late Charges Activity Applications

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What is a AutoLockbox?
AutoLockbox (or Lockbox) is a service

that commercial banks offer corporate customers to enable them to outsource their accounts receivable payment processing.
An AutoLockbox operation can

process millions of transactions a month.

AutoLockbox eliminates manual data

entry by automatically processing receipts that are sent directly to your bank.

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Lockboxes
You define lockboxes to use the Receivables AutoLockbox

program.
AutoLockbox automatically creates receipts in Receivables using

electronic information that your bank provides.

Receivables lets you specify the receipt method for each Lockbox

you define.
Receipt methods provide the default accounting information for

receipts you create through AutoLockbox.

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AutoLockbox Process
AutoLockbox process is a 3 step process:
Import

During this step, AutoLockbox reads and formats the data from the bank file into the AutoLockbox table using an SQL *Loader script.
Validation

The validation program checks data in the AutoLockbox tables for compatibility with Receivables. Once validated, the data is transferred into QuickCash tables.
Post QuickCash

This step applies the receipts and updates the customer balances.

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AutoLockbox Process Flow

Bank File
Import Program

Lockbox Execution Report

AR_PAYMENTS_ INTERFACE TABLE

AutoLockbox Validation AR_INTERIM CASH RECEIPTS AR_INTERIM_LINES Post QuickCash

Lockbox Execution Report

Post QuickCash Execution Report

Receivables Tables

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Automatic Receipts
Instead of manually entering receipts, you can use the Receivables

automatic receipts feature 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 customers bank account to yours on the receipt maturity date.

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Automatic Receipts and Remittance Process

1. Flag invoices Enter invoices 2. Create receipts

Create automatic receipts

Approve automatic receipts

Format automatic receipts 2a. Send for customer approval 2b. Customer approves

3. Confirm receipts 4. Remit receipts Create remittances 4a. Send remittance to bank 5. Clear receipts

Confirm automatic receipts

Approve remittances 4b. Bank sends statement

Format remittances 6. Eliminate risk

Reconcile remittances

Eliminate Risk (Factored Receipts)

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Credit Cards
Receivables lets your customers use a credit card to remit

payments for open debit items. The procedure for processing credit card payments in Receivables is similar to the procedure for creating automatic receipts.
You can create credit card transactions in Receivables:

Manually in the Transactions window Import using AutoInvoice

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Module Highlights
Order to Cash process overview Receivables process overview Managing Parties and Customer Accounts Transactions Setup Transactions Process AutoInvoicing Receipts Setup Receipts Process AutoLockbox

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