r12 ar practice documentation_v6.6 (1)

R12 ORACLE ACCOUNTS RECEVIABLE PRACTICE GUIDE

R12 ORACLE ACCOUNTS RECEVIABLE FUNDAMENTALS

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TABLE OF CONTENTS

1. Defining Payment Terms:..................................................................................................................32. Creation of Transaction Types:.........................................................................................................43. Creation of Transaction Sources.......................................................................................................54. Creation of Memo Lines:...................................................................................................................65. Creation of Accounting Rules:...........................................................................................................66. Approval limits................................................................................................................................... 67. Define Profile Classes....................................................................................................................... 78. Create a Party (Organization) with party level Account Information & Address.................................9

8.1 Setup Party Profile:................................................................................................................108.2 Setup Communication Details:...............................................................................................108.3 Setup Party Relationships......................................................................................................118.4 Setup Tax Profile:...................................................................................................................11

9. Adding and Updating Account Site Business Purposes:.................................................................129.1 Add Business Purpose...........................................................................................................13

10. Review the setups till now:............................................................................................................1411. Entering and Updating Account Site Payment Details...................................................................16

11.1 Adding and Updating Account Site Profiles.............................................................................1711.2 Adding and Updating Account Site Late Charges....................................................................18

12. Adding more sites to the customer account:.................................................................................1913. Review all customer setups...........................................................................................................2114. Creating a Transaction:................................................................................................................. 23

14.1. Viewing the Balances..........................................................................................................2314.2 Voiding Transactions:...........................................................................................................2414.3 Create Credit Memo:............................................................................................................2414.4. View Account details of the customer:................................................................................2514.5 Dispute details on Invoices:..................................................................................................25

15. Creation of Distribution Sets:.........................................................................................................2616. Receivable Activities:....................................................................................................................2617. Setup Receipt Sources:................................................................................................................. 2718. Setup Receipt Class and Receipt method:....................................................................................2819. Receipt Entry................................................................................................................................. 29

19.1 Receipt Entry - No Remittance :...........................................................................................2919.1 Creating Miscellaneous receipts..........................................................................................3019.2 Writing off............................................................................................................................. 31

20.Printing Documents........................................................................................................................ 3220.1 Printing of Statements..........................................................................................................3220.2 Aging Buckets setup and printing.........................................................................................33

21. Period End Closing:....................................................................................................................... 35A. Revenue Recognition..............................................................................................................35B. Create Accounting:..................................................................................................................36C. Run Unposted Items report:.....................................................................................................38

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1. Defining Payment Terms:

(N) Setup > Transactions > Payment TermsWe need to create payment terms and assign the same while creating the profile class of the

Name XX 2/10-Net30

Description 2 percent discount if paid in 10 days and Net is payable in 30 days

Billing Cycle Base Amount 100Discount Basis Lines OnlyEffective Dates: From 1-Dec-08Installment Options Include tax and freight in first installment

Payment Schedule RegionSequence 1Relative Amount 100Days 30

Button Discounts% 2Days 10

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2. Creation of Transaction Types:

(N) Setup > Transactions > Transaction TypesOperating Unit Legal EntityVision Operations

Name XX Invoice XX CR Memo XX Debit Memo XX Chargeback XX VOIDDescription My Invoice -

XXMy Credit Memo - XX

My Debit Memo - XX

My Chargeback - XX

My Void Invoice - XX

Class Invoice Credit Memo Debit Memo Chargeback InvoiceCreation Sign

Positive Sign Negative Sign Positive Sign Positive Sign Positive Sign

Transaction Status

Open Open Open Open Void

Printing Option

Print Print Print Print Print

Invoice Type Credit Memo Type

XX CR Memo

Application Rule Set

Line First--Tax Prorate





Terms XX 2/10-Net30

Start Date 1-Dec-08 1-Dec-08 1-Dec-08 1-Dec-08 1-Dec-08End Date Open Receivable

Yes Yes Yes Yes

Allow Freight Yes Yes Yes Yes YesPost to GL Yes Yes Yes YesNatural Application Only

Yes Yes Yes Yes Yes

Exclude From Late Charges Calculation

Accounts RegionReceivable Account

01-000-1210-0000-000 01-000-1210-0000-000

01-000-1210-0000-000

01-000-1210-0000-000

01-000-1210-0000-000

Revenue Account

01-000-2925-0000-000 01-000-2925-0000-000

01-000-2925-0000-000

01-000-2925-0000-000

01-000-2925-0000-000

Unbilled Receivable Account

01-000-1232-0000-000 01-000-1232-0000-000

01-000-1232-0000-000

01-000-1232-0000-000

01-000-1232-0000-000

Tax Account

01-000-2520-0000-000 01-000-2520-0000-000

01-000-2520-0000-000

01-000-2520-0000-000

01-000-2520-0000-000

Freight Account

01-000-7220-0000-000 01-000-7220-0000-000

01-000-7220-0000-000

01-000-7220-0000-000

01-000-7220-0000-000

Clearing Account

01-000-1250-0000-000 01-000-1250-0000-000

01-000-1250-0000-000

01-000-1250-0000-000

01-000-1250-0000-000

Unearned 01-000-2550-0000-000 01-000-2550-0000- 01-000-2550-0000- 01-000-2550-0000- 01-000-2550-0000-

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Revenue Account

000 000 000 000

3. Creation of Transaction Sources :

(N) Setup > Transactions > Sources

You can setup 2 types of transaction sources

Manual (If you want to create transactions manually in AR)Imported (if you want to import invoices from Order management, Projects, legacy applications)

Operating Unit Vision OperationsLegal Entity Name XX Invoice SourceType Manual

Batch Source region

DescriptionInvoice Source-Manual-XX Effective Dates (From) 01-Jan-1951

Active Yes Effective Dates (To) Automatic Batch Numbering Last Number 999Automatic Transaction Numbering Yes Last Number 99Copy Document Number to Transaction Number Receipt Handling For Credits Allow Duplicate Transaction Numbers

Reference Field Default Value interface_header_attribute1

Copy Transaction Information Flexfield to Credit Memo Standard Transaction Type XX Invoice Credit Memo Batch Source XX Invoice Source

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4. Creation of Memo Lines:

(N) Setup > Transactions > Memo Lines

Operating Unit Vision OperationsName XX Production SupportDescription Production suport for 1 YearType LineTax Classification Tax Product Category Unit List Price Unit of Measure Revenue Account 01-000-2925-0000-000Invoicing Rule Accounting Rule Active Dates (From) 01-JAN-1951Active Dates (To)

5. Creation of Accounting Rules:

(N) setup > Transaction > Accounting Rules

Name XX 3M Fixed Description XX 3Months FixedType Fixed Schedule Active YesPeriod Month Number of Periods 3 Deferred Revenue No

SchedulePeriod Percent Date [ ]1 33.3333 2 33.3333 3 33.3334

6. Approval limits:

(N) Setup > Transactions > Approval Limits

Main More

Username Document Type Reason Currency From AmountTo Amount Primary Description

XX User Adjustment USD -100 100

XX User Receipt Write-off USD -200 200

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7. Define Profile Classes

(N) Customers>Profile Classes

Enter the Profile name, Description

Enter the following in tab Balance Forward Billing, Invoicing details, Payment terms, Statements and Dunning details of the profile, Collectors, Receipts

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Enter the values for Late Charge Profile

Enter the Profile Class Amounts for which a customer can be assigned

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8. Create a Party (Organization) with party level Account Information & Address

(N) Customers > StandardButton Create

In the Customers window, Create Party with party level Account Information & Address

Customer Information RegionOrganization Name XX My Party3Alias XX MP3

D-U-N-S NumberURL http://www.xxmyparty3.com

Account Information RegionAccount Description XX My Party Accnt3Profile Class DEFAULT

Account TypeExternal

Account Site Address RegionCountry United States of AmericaAddress Line1 102 East Arques AveAddress Line2 33City SUNNYVALECounty Santa Clara

State CA

Postal Code 94085

Address DescriptionGeography Code Override

Optionally enter Account Site Details RegionOperating Unit Vision Operations

StatusActive

Business Purpose RegionPurpose MarketingPrimary Yes

Click on the Button Apply

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The Customer Overview window opens with all the details you entered…

8.1 Setup Party Profile:In the Customer Overview Window, Click on the Profile Tabbed region and enter the below OPTIONAL details

Organization Information Region

Customer Category Education

Tax and Financial Information Region

Taxpayer IDTax Registration NumCurrency Preference USD : US dollarsAnnual Revenue 10000000000


8.2 Setup Communication Details : In the Customer Overview Window, Click on the Communication Tabbed region and enter the below OPTIONAL details

Phone NumbersSelect Telephone from the drop down and click on button GOCountry Code 1Area Code 471Number 654785Ext 2345Status Active


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Email AddressesPurpose BusinessFormat HTML mailEmail businessmail@xxmyparty3Status Active


8.3 Setup Party Relationships: In the Customer Overview Window, Click on the Party Relationships Tabbed region and enter the below OPTIONAL details

Party RelationshipsThis section will display any existing relationships. Click on the button Add Another Row to add a new relationship

Customer Alliance SystemsRelationship Role PartnerStart Date 01-Dec-2007Comments


8.4 Setup Tax Profile : In the Customer Overview Window, Click on the Tax Profile Tabbed region and enter details for the below. This has to be done with inputs from your tax team and eBTax implementation team.

Main Information Default Controls Tax Registrations Associated Fiscal Classifications Customer Tax Exemptions Tax Reporting Codes Account Tax Details

Customer Tax Exemptions

Exempt reason Hospital EducationRelationship Role Unapproved UnapprovedTax Regime Code US-SALES-TAX-101 US-SALES-TAX-101Configuration Owner Vision Operations Vision OperationsEffective from 01-Dec-2007 01-Dec-2007Discount/Surcharge Percentage

100 100

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9. Adding and Updating Account Site Business Purposes:For the Party you just created. (Optional- As per your requirement)

In the Customer Overview Window, Under the Accounts you will see the entire customer accounts setup till now as in the figure below.

Click on the button Create Account to add a new customer account.

Account Information Region

Account Description XX My Cust Accnt 1Profile Class EXCELLENT

Account TypeExternal

You will see the All Addresses setup earlier in the bottom of the page. You can sel;ect one of them and continue OR Click on the Button Create Address

The customer Account site opens up with the Organization name and Registry ID. Enter the following details …


State CA

Postal Code 94085

Address Description My Cust Accnt 1Geography Code Override

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Optionally enter Account Site Details RegionOperating Unit Vision Operations

9.1 Add Business Purpose

Business Purpose RegionPurpose Bill ToPrimary YesBill To LocationClick button Add Another RowPurpose Ship ToPrimary YesBill To Location (Site Bill-to)

Click on the Button Finish

The Customer account details are saved and the Site:30997 (number of your site) is displayed as in the figure below. Enter details in other tabs highlighted below

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Enter/Review details in this tab


10. Review the setups till now:The next section enclosed in **stars** is only for your information. Review the info and proceed to setting up Payment details + Profile + Late charges tabs*************************************************************************************************************If you go back to the Customer overview window now you can observe how your Party > Cust Accnt > Cust Accnt Site are structured as in the fig below

Your Party+ Customer Account + Its site + Business Purpose at that site

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*****************************************************************************************************************

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11. Entering and Updating Account Site Payment Details .

Open the site to which you want to add payment details: From the Customer Overview window, select the your Customer Account and select the Site within that customer account and click on the icon

under details... . This will open the Site:30997 (number of your site) window.

Receipt Method: If you intend to use automatic receipts for this site. We shall leave this blank

Receipt Methods

Primary

Start Date

End Date

Bank Accounts: You can assign a bank account either by adding a predefined bank account or by creating a new bank account

Country United States of America

Allow International PaymentsBank Accounts Region

Select Existing Bank YesBank Name Citibank

Branch RegionBranch Name Westside Branch

Bank AccountAccount Number XX1000

Check Digits 6

Currency USD


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11.1 Adding and Updating Account Site ProfilesUse the Profile subtab of the Account Site Overview page to add and update the profiles of existing account sites.

Navigate to the Profile subtab on the Account Site Overview page. (For newly created account sites only) Select Yes in response to the Assign Profile Class

confirmation message, in case you decide to create a profile at the account site level.

By default, the account site inherits the profile class assigned at the account level. However, you can change the account site profile class as required.

Accept the default values for the below or select different values as may be required… Profile Class Credit and Collection Terms Receipts Statements and Dunning Invoicing

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11.2 Adding and Updating Account Site Late Charges You can assess late charges against past due debit items for each customer, account, or siteAccept the default values for the below or select different values as may be required…


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12. Adding more sites to the customer account : ( For eg to the cust account XX My Cust Accnt 1)

From Customer Overview window, select the customer account to which you want to add an additional Site as shown in the figure below…

Click on button Create Site. This will open Create Account Site window as in the figure below

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Address RegionOperating Unit Vision Operations

Click on the button Create Address Enter the following details in the …


State CA

Postal Code 94085

Address Description My Cust Accnt 1

Business Purpose RegionPurpose Bill ToPrimary YesBill To LocationClick button Add Another RowPurpose Ship ToPrimaryBill To Location (Site Bill-to)Click button Add Another Row

Purpose Legal

Primary Yes

Click on the Button Finish

This will open the Site:31017 (number of your site) window with the Site Details

Optionally you can review each of the tabs in the above window and update them.

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13. Review all customer setupsFrom the Customer Overview window, your customer structure will look like the below

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13. Party Merge

Party merge is managed by Trading Community Architecture

(N) Customers>Party Merge

14. Customer Account Merge

This is used to consolidate any duplicate customers or transfer site use activity from a customer or site that is no longer active. After the merge completes successfully, all activity that was previously associated with the old customer or site is now associated with the new customer or site. Activity includes invoices, debit memos, commitments, credits, receipts, adjustments, and chargeback’s. The merge process also checks for records in the Auto Invoice interface tables.

If we need to delete the records after Customer Merge we need to enable the check box Delete After Merge then all the invoices which has been merged would be deleted from the system and we would be available only with the merged invoices

(N) Customers > Account Merge

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After providing the required information we need to click on Merge button so that the Account Merge would be started by raising an Concurrent Request which is displayed on Request ID button.

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14. Creating a Transaction:

(N) Transactions > Transactions

HeaderSource XX Invoice Source Date Accept defaultNumber GL Date Accept defaultClass Currency USDType Accept default Main TabBill to SectionName Alliance SystemsNumber 1990Payment Term XX 2/10-Net30Invoicing RuleClick on Lines Button

Lines Main Tab Tax Exemption TabNum 1 Tax Handling ExemptItem AS18947 Reason EducationDescription Accept default UOM Accept default Quantity 10 Unit Price 1000 Amount Accept default Save and Close the Lines windowClick on the button Complete

Note down the Transaction Number: It should be 1000

14.1. Viewing the Balances

Click on the button Details

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14.2 Voiding Transactions:Query the transaction to be voided (should not have been transferred to GL and no other activities performed on this invoice)Click on the button Incomplete Change the Type as XX VOID then click on Complete button. The transaction is voided.

14.3 Create Credit Memo: (from transactions window)

Create an Invoice (Refer Creating Transaction chapter)

From Menu click on Actions > Credit .On the Credit transactions window, Navigate to Transaction Amounts region: Select Lines only in credit allocation field.

Enter a percentage by which you want to reduce the transaction amount. Or Simply enter a negative amount and save.

The Credit memo number is generated and Balance Due on original invoice is reduced. Finally click on the button Complete.

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14.4. View Account details of the customer:

(N) Transaction > Account details

Bill To Customer Alliance SystemsNumber 1990

Click on Button FindObserve the details as in Screen shot below

14.5 Dispute details on Invoices:

If there is any invoice which is in dispute we can update in the dispute column by giving the dispute date and then when the dispute is resolved then we can remove the dispute amount and dispute date accordingly. (N) Transaction > Account details

View account details, Select the invoice you want to put some amount on dispute, Enter an amount

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15. Creation of Distribution Sets:

(N) Receivables>Setup>Receipts>Distribution Sets

<Distribution Sets>Operating Unit Vision OperationsName XX Miscellaneous

Description

Distribution sets let you speed your receivables accounting by reducing data entry

Active Yes

<Distribution Set Lines> % Account Description

60 01-740-7740-0000-000 To Controllers office

40 01-001-7740-0000-000 To IT dept

16. Receivable Activities:

(N) Setup > Receipts > Receivable Activity

Operating Unit Name Description TypeActive

GL Account Source

Tax Rate Code Source

Activity GL Account

Distribution Set

Vision Operations

XX BANK CHARGE ADJ

XX BANK CHARGE ADJ Adjustment *

Activity GL Account None

01-740-7870-0000-000

Vision Operations

XX Earned Discount

XX Earned Discount

Earned Discount *


01-410-7825-000

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Vision Operations

XX SELL TREASURY STOCK

XX SELL TREASURY STOCK

Miscellaneous Cash *


01-000-1110-0000-000

Vision Operations

XX Receipt Write-off

XX Receipt Write-off

Receipt Write-off *


01-000-7730-0000-000

17. Setup Receipt Sources:

(N) Setup > Receipts > Receipt Sources

Operating Unit Vision Operations Name XX MANUAL Description XX Manual Receipts SourceReceipt Source Type Manual Payment Method Receipt Class Direct Receipt Bank Account Batch Numbering Automatic Last Number 99Effective Dates(From) 01-JAN-1951

Effective Dates(To)

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18. Setup Receipt Class and Receipt method:

Receipt Class Name XX RC-Man-NR-Direct XX RC-Man-Std-AutoClrCreation Method Manual ManualNotes Receivable Require Confirmation Remittance Method No remittance StandardClearance Method Directly By Auomatic Clearing

Receipt Method Name XX Rec Meth XX Rec Meth-MSBPrinted Name XX Rec Meth Effective Dates (From) 01-JAN-1951 1-Jan-51Effective Dates (To) Notes Receivable N NDebit Memos Inherit Receipt Numbers

<Remittance Banks> Operating Unit Vision Operations Vision OperationsBank Name Citibank CitibankBranch Name West Side Branch West Side BranchAccount Name Citibank Westside-204 Citibank Westside-204Currency USD USDMinimum Receipt Amount Risk Elimination Days Clearing Days Override Bank Effective Dates (From) 1-Jan-51 1-Jan-51Effective Dates (To) Primary Yes Yes

GL Accounts Cash 01-000-1110-0000-000 01-000-1110-0000-000

Receipt Confirmation 01-000-1210-0000-000Remittance 01-000-1245-0000-000Factoring Short-term Debt Bank Charges 01-740-7870-0000-000Unapplied Receipts 01-000-1240-0000-000 01-000-1240-0000-000Unidentified Receipts 01-000-1240-0000-000 01-000-1240-0000-000On Account Receipts 01-000-1240-0000-000 01-000-1240-0000-000Unearned Discounts Unearned Discount Unearned DiscountsEarned Discounts Earned Discount Earned DiscountsClaim Investigation Claim Investigation Claim Investigation

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19. Receipt Entry

19.1 Receipt Entry - No Remittance :

Create a transaction and complete the transaction. Refer to the chapter Creating a Transaction

Create a Receipt for the transaction

(N) Receipts > Receipts

If we create receipt with the amount specified and before application of the receipt the balance would be transferred to Unidentified receipts as shown below

Receipt Method Your Receipt methodReceipt Number Enter a receipt number

Receipt Amount in USD500

Receipt Type StandardTransaction NumberCustomer Alliance Systems

Number 1990

Click on Button ApplyApply to 1000

Applied Amount 500

Save your work

After the application of receipt to a transaction the amount would be moved to applied status. View balance on the transaction:

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19.1 Creating Miscellaneous receipts

Non invoice related revenue earned from investments, interest, refunds, stock sales etc can be accounted by using Miscellaneous receipts

Receipt Method XX Rec MethReceipt Number Enter a receipt number

Receipt Amount in USD100

Receipt Type MiscellaneousActivity XX Miscellaneous Cash

Save your work

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19.2 Writing off

Create a transaction and complete (N) Transactions > Transactions

From Menu Actions> Adjust

In the adjustments window, select Activity name (this is a receivable activity that you have setup earlier with a GL account attached to it. Enter type as Line, enter amount (negative if you want to reduce the balance)

View the transaction after adjustment

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20.Printing Documents:

20.1 Printing of Statements

Enter the Option, Customer name, Statement Cycle, Bucket, and Statement Date and choose the standard messages you want to print in the bottom of the report and click Submit.

Review the output of the request, Print it and send the statement to your customer

We can add special message to print when the Statement has been printed and sent to customer

(N) Print Documents> Statements

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20.2 Aging Buckets setup and printing

Run the concurrent request from Menu View> Requests

The output would appear as follows:

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21. Period End Closing:

• At the end of each accounting period, you must complete the month-end closing process. The first step towards period closure is to run the Run the revenue recognition program.

• Run the Create accounting program in final mode with Post journals to GL as Yes. Make sure the journals are created and posted

A. Revenue Recognition

• The Revenue Recognition program identifies all new transactions and creates the revenue distributions for those transactions. The distributions are created for all periods, even in periods whose status is Not Open, using the rules associated with the transactions

(N) Control > Accounting > Revenue Recognition

Program Name Revenue RecognitionOperating Unit Vision Operations

ParametersPrint Format: SummaryCommit Work: Yes

Submit the reqquest

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B. Create Accounting:

There are two ways to create Accounting:

Online Accounting for a single transaction and Create accounting off line (concurrent request) for all transactions at a time.

B1. Online Accounting: Query the Transaction which needs to be accounted

(N) Transactions > Transactions

From Menu Tools > Create Accounting

We need to provide the required option such as Draft, Final Accounting or Accounting and Post to GL

After the Accounting option is provided view the Accounting entries

From Menu Tools> View Accounting

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B2. Create accounting off line (Nightly job): From the Submit Requests window, run the create Accounting program in either draft mode, if you want to review the results before you create the final accounting, or final mode.

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C. Run Unposted Items report:

Run the unposted items concurrent request which would effect the period close. There should be no items in this report so that we can close the period and open the next period.

From Menu > view> Concurrent request

Submit Unposted Items report and provide the following details:

Ledger Currency: USD

Start GL Date: 01-DEC-2008

End GL Date: 31-DEC-2008

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r12 ar practice documentation_v6.6 (1)

Economy & Finance

tax account

customer account

creation of memo lines

revenue account

account site payment

unbilled receivable

account site profiles

creation of transaction