Oracle financials theory_vol_i

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ORACLE FINANCIALS Oracle Financials Volume I
ORACLE FINANCIALS
VOL - I
THEORY GUIDE

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Multiple Organizations
• Use a single installation of any Oracle Applications product to support any number of organizations, even if
those organizations use different ledgers
• Support flexible organizational models
• Secure access to data so that users can only access relevant information
• Access one or more operating units using a single responsibility
Major Features
 Multiple Organizations in a Single Installation
 You can define multiple organizations and the relationships among them in a single
 Installation of Oracle Applications. These organizations can be ledgers, business groups,
Legal entities, operating units, or inventory organizations.
 Secure Access
 Data Security
 Inventory Organization Security by Responsibility
 Responsibility Determines Operating Unit
 Receive Goods Into Any Inventory Organization
 Automatic Accounting for Internal Requisitions
Multiple Organizations Reporting
Types of Organizations
1 Business Group
The business group represents the highest level in the organization structure, such as the consolidated
enterprise, a major Branch, or an operation company. The business group secures human resources
information.
For example, when you request a list of employees, you see all employees assigned to the business group of
which your organization is a part.
Multiple ledgers can share the same business group if they share the same business
group attributes, including HR flexfield structures.

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2 LEDGER
 Ledgers takes the place of second level in the multi org structure, only based on which the legal entity
and operating units are going to be decided on. Also remember it is not mandatory for a ledger to have
a Legal entity.
 Only based on the definition of ledger, the multi org structure is designed / finalized.
 Therefore it is very vital to perform the ledger setup keeping in mind that it has a greater
Impact on the multi organization structure to be followed by the client and setup by the Implementation
team.
 Even though Ledgers takes place second level in the above figure, one can say it is the starting point of
Multi org structure, since setting up of a business group or validations / functionalities related to business
group are less complicated when compared to other elements in the Multi org structure.
 In total there are two types of Ledgers available, they are:
 Primary Ledger
 Secondary ledger
 Reporting Currencies (Ledger)
3 Legal Entity
A legal company for which you prepare fiscal or tax reports. You assign tax identifiers and other legal entity
information to this type of organization.
You can define legal entities using Legal Entity Configurator or Accounting Setup Manager in General Ledger.
4 Operating Unit
 An organization that uses Oracle subledgers, such as Oracle Cash Management, Order
Management, Oracle Payables, Oracle Purchasing, Oracle Receivables, and related products. It may be a sales
office, a Branch, or a department.
 Operating units are not associated with legal entities.
 Operating units are assigned to ledgers and a default legal context.
 Information is secured by operating unit for these applications using responsibilities. Each user can
access, process, and report on data only for the operating units assigned to the MO: Operating Unit
(or) MO: Security Profile option.
 The MO: Operating Unit profile option only provides access to one operating unit.

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 The MO: Security Profile provides access to multiple operating units froma single responsibility.
You can define operating units from the Define Organization window in Oracle HRMS
or from Accounting Setup Manager in General Ledger.
5 Inventory Organization
 An organization for which you track inventory transactions and balances, and/or an
Organization that manufactures or distributes products.
 Examples include manufacturing plants, warehouses, distribution centers, and sales offices.
 The following applications secure information by inventory organization: Oracle
Inventory, Bills of Material, Engineering, Work in Process
 . To run any of these applications, you must choose an organization that has been classified as an
inventory organization.
 You can create ledgers using the Accounting Setup Manager in Oracle General Ledger
and define organizations using the Define Organization window.
HR Organization
 HR organizations represent the basic work structure of any enterprise. They usually represent the
functional management, or reporting groups that exist within a business group.
 In addition to these internal organizations, you can define other organizations for tax and government
reporting purposes, or for third party payments.
Organizations in Oracle Projects
 Oracle Projects allows you to define organization hierarchies to reflect your company's organizations
structure.
 You can add Oracle Projects-specific organization types to the organization hierarchy (for example,
projects organizations or Expenditure organizations) to help you manage your project control
requirements.
 You assign project and expenditure hierarchies to operating units.
Asset Organizations

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 An asset organization is an organization that allows you to perform asset-related activities for a specific
Oracle Assets corporate book.
 Oracle Assets uses only organizations designated as asset organizations
Information Shared Across Organizations
The following information is global. It must be set up once for the enterprise:
• Flexfield definitions
• Customer Header (customer site is at the operating unit level)
• Supplier Header (supplier site is at the operating unit level)
Setup and Implementation Multi-Org
Setting Up a Multiple Organization Enterprise
Steps to implement the Multiple Organization support feature in Oracle Applications.
1. Develop the Organization Structure
2. Define Accounting Setups
3. Assign Balancing Segment Values by Legal Entity (optional),
4. Define Locations,
5. Define Business Groups (optional),
6. Define Organizations,
7. Define Organization Relationships,
8. Define Responsibilities,
9. Associate Responsibilities with Business Groups,
10. Define Security Profile and Multiple Organizations (MO) Profile Options,
11. Verify Order Management System Parameter Settings,
12. Set Application-Specific Profile Options Specific to Operating Units,
13. Define Inventory Organization Security (optional),
14. Implement the Applications Products,
15. Run the Multiple Organizations Setup Validation Report (recommended),
16. Implement Document Sequencing (optional),
17. Set Conflict Domains (optional),
18. Specify User-Level Multiple Organizations Preferences (optional),

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LEDGER
 A Ledger is a container of all accounting related information captured through various other modules.
Oracle General Ledger Module owns ledgers.
 One has to design the ledger in an appropriate way keeping in mind what information it needs to hold.
 One can have as many ledgers as they want based on their business requirement and operations point
of view.
 A ledger saves the accounting information in an organized way as directed by the conditions specified
in the accounting options for that ledger.
 Implementer defines the format, rules, restrictions for a particular ledger using different setup screens
making the user to only enter the information what is relevant for Oracle General Ledger to process
further.
 One may collect much additional information in different modules as per their business requirement,
whereas those are of least importance, since they are all only data which are not subjected to any
further processing by oracle.
 A well planned/designed ledger saves a lot of time for the company in processing the data and
preparing MIS reports for the management in key decision makings.
 One will also be knowing that Business intelligence module does this job of producing excellent
reports on the daily operations of company and points out key areas and red flags.
 However, business intelligence can be used to best effect, only when the base setups, which are in
place, are efficient.
 Ledger being the foremost setup for any financial modules in E business Suite, one must understand
the power, importance and its usage at later stage in many other areas within e Business suite.
 Ledger is nothing but a combination of all those components.
 Without usage of components, ledger cannot function on its own.
The components of a ledger are:
1) Chart of Accounts
2) Calendar
3) Currency
4) Accounting Method
They are also termed as 4 C’s.
Chart of Accounts
 The definition of Chart of Accounts structure is one of the most complex part, there has

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to be a brainstorming and many levels of discussions between Client and the Implementation team to decide
on a structure that best suits the business need.
 In short, COA decides on what information needs to be collected for every transaction that is being
transacted by the business, considering different parameters and key factors.
Calendar
 Calendar presents the period for which the business is carried forward. Calendar here represents
Accounting calendar.
 One will be deciding on the calendar based on their statutory requirement.
 Even though every accounting period is going to have a span of 12 months in it, however there is a
greater difference on the start and end date of the accounting period.
Currency
Currency represents the list of currencies in which the customer is having businesses.
One needs to define/enable the currencies as per their business requirement; there is no
harm in enabling all currencies.
Accounting Method
 Every business has to follow an accounting method to record their transactions in order to comply with
the legal commitments.
 Oracle by default has provided seeded accounting methods for usage, however if the clients business
demands for customization of an accounting method or creation of new accounting method as per the
statutory regulations, then they can create their own accounting method as well.
All the above-discussed components are mandatory in order to define a primary ledger.
For a secondary ledger, in addition to the above component, one needs to select the method of Data
Conversion Level followed.
Primary Ledger
 It is mandatory that every accounting operation must have one primary ledger
 It acts as a Primary repository, which records all accounting related information related to that particular
Primary Ledger. One cannot carry out setups without having primary ledger in place.
 Primary ledger replaces the Set of books (Ledger in R12) used in earlier versions prior to Release 12.
Secondary Ledger

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 It is not mandatory to have a secondary ledger.
 One can have one or more secondary ledgers based on their business requirement.
 One can never have a secondary ledger without primary ledger is in place.
 Since secondary ledger does not perform any new operation on its own, it only represents the
information contain in primary ledger in a different way.
 Mostly it is used for satisfying the reporting needs.
 It is necessary for one to know when one should have a Secondary ledger.
 One needs to maintain accounting records in a way, when there is a difference in any of the
parameters below from the primary ledger: Chart of Accounts, Currency, Calendar, Accounting Method
and Ledger processing options.
Reporting Currencies (Ledger)
 Reporting currencies are purely a representation of transactions saved in the Primary or Secondary
ledger in different currency.
 This concept was available in Release 11 in the name of Reporting Set of books (Ledger in R12); it is
exactly the same in R12, no change apart from the terminology.
 Reporting currencies are maintained at different currency conversion levels.
 Even though it is not a separate ledger as such, still it can be considered as a different
ledger since it acts as a different container apart from the primary or secondary ledger information.
LEDGER TYPE PURPOSE
Primary Ledger
 Mandatory for any setup related to financial modules
 Every transaction of the company will be recorded
 Acts as a base repository / container of all accounting information.
Secondary Ledger
 When Client wants Multiple Accounting Representations
 When Client wants to represent the information in a different calendar.
 When Client wants to represent the information in a different chart of Accounts.
Reporting Currencies
When the Client wants to report their information in different currency

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HOW TO DECIDE ON A PERFECT LEDGER STRUCTURE
I would explain the usage of the ledgers with a Business scenario.
Business Scenario is:
Company SKR GROUPS is implementing Oracle Financials for their business. The summary
of their business operations is as follows:
SKR GROUPS, which is based in India, is having their business operation in three countries:
1) Branch I - India
2) Branch II - Australia
3) Branch III - France
And the accounting and reporting requirements are:
 Branch Accounting Method Chart of Accounts Accounting Period
 Branch I Accrual As per Indian Statute April to March
 Branch II Cash As per Australia Statute January to December
 Branch III Accrual As per France Statute October to September
Please advice on the ideal Ledger structure to be designed for the company SKR GROUPS?
Now from the above lets us see how many primary ledgers can be created?
One cannot use the same primary ledger if one of its components is different.
Branch Chart of Accounts Currency Calendar Accounting Method
Branch I Indian Statute INR Apr – Mar Accrual
Branch II Australia Statute AUD Jan – Dec Cash
Branch III France Statute EUR Oct - Sep Accrual
From the above table, it is clear that none of the Branches have all 4 components as similar; therefore we
need to have 3 Primary ledgers defined for it.
Now apart from that, we need to think of the following practical scenario as well,
Even though Branch II is located in Australia, it has to finally consolidate all its operations

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to INDIA at a later stage, therefore it must also follow the rules of accounting and statutory regulations in
India, so as Branch III.
Therefore, Branch II – Should have a secondary ledger, which will represent the transactions as per the Indian
Statute.
Branch III – Should have a secondary ledger, which will represent the transactions as per the Indian Statute.
 However it is not necessary for Branch I to have secondary ledgers, since the company is based in
INDIA, therefore it need not have multiple accounting representations.
If the client insists on it, we can have 2 secondary ledgers for Branch I, to comply with
Australian and France statute.
 Now the Branches situated in France and Australia, must be reporting to the company in
INDIA on a daily basis, for which they need to convert their business transactions values
in to Indian currencies and then report it to the management.
For performing this operation, we require two Reporting currencies as well.
 As discussed earlier, reporting currencies are part of primary ledger setup. Therefore
Australia and France primary ledger should have defined INR as its Reporting currencies.
 To sum up, the ideal ledger structure would be as follows:
Branch Primary Ledger Secondary Ledger Reporting Currencies
Branch I 1 Not Necessary Not Necessary
Branch II 1 1 1
Branch III 1 1 1
TOTAL 3 2 2
Also there can be one more primary ledger created to consolidate the data between
Branch I, II and III,
QUESTION AND ANSWER SECTION
1. Is it mandatory that every ledger must have a legal entity attached to it?

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One can have a ledger with no legal entity as per their business requirement. It is not mandatory that every
ledger must have a legal entity attached to it. There could be ledgers, which have been created for
consolidation purposes alone.
2. Can there be a Secondary ledger without a Primary ledger?
No, it cannot be.
3. Can we have one secondary ledger associated with more than one primary ledger?
No, it is not possible.
4. Can we have more than one secondary ledger for a primary ledger?
Yes, you can have one or more secondary ledgers also there is no restriction imposed anywhere on number of
primary ledgers one can create.
5. Is it possible to convert a Primary Ledger to Secondary Ledger or vice versa?
No, not possible.
Data Access set
 Data Access Set is a new feature in Release 12, which is owned by General Ledger.
 It helps in providing Role Based Access Control to the users.
 Every user has access to the data through Responsibilities, these Data Access Sets controls the
behavior of a Responsibility when the user tries to access the ledger which is the repository of all
accounting related information.
 It can control the level of access to be provided and on what information the access can be restricted
for a given ledger and responsibility.
 We will see about it in more detail in further slides.
 It can provide Read only, Read and Write access to an Ledger
 It can restrict access to MSV (Management Segment Values) and BSV (Balancing Segment Values)
 The ledgers and Ledger Sets which are assigned to a Data Access Set must share the same Chart of
Accounts, Calendar and Period Type.
 General Ledger automatically creates a Data Access Set whenever a Ledger and/or Ledger Set are
created.
Following are the three types of Data Access Sets,
 Full Ledger
 Balancing Segment Value

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 Management Segment Value
FULL LEDGER
 As the name suggests all changes / restrictions defined under this type of Data Access Set will
apply to whole of a Ledger or a Ledger Set.
 Either you can have a Read and Write privilege to a Ledger or Read only privilege to a Ledger.
 For example, You have the Auditors visiting your premises who requires
access to all accounting information, instead of using systemadministrator to create a new
responsibility with lots of menu exclusions, you can just have a responsibility with the Data Access Set,
assigned as READ ONLY. So that the auditors will only have access to view the data and not to edit it
(Intentionally or unintentionally!)
BALANCING SEGMENT VALUE (BSV)
 Instead of providing access to the whole ledger, if you wanted to provide access only to
particular Balancing segment value combinations in a ledger, you can do so.
MANAGEMENT SEGMENT VALUE (BSV) Instead of providing access to the whole ledger, if you wanted
to provide access only to particular Management segment value
combinations in a ledger, you can do so.
Management Segment is a segment which has the Management Segment Qualifier attached. Values
belonging to that segment are termed as Management Segment Values.
Advantages
 Role Based Access Control
 Security on Data Access
 Simplified Setups to create Data Access Security
 It does not override the security rules and Cross validation rules
Limitations
 A Responsibility can have only one Data Access Set
 One can have ledgers sharing the same chart of accounts and calendar alone in the single Data
Access Set.
 In case of BSV or MSV type Data Access Sets, if you select the check box for ALL that does not
include all BSV or MSV values.
 So many parameters need to be considered before defining it, since it may clash with other
setups at General Ledger level resulting in errors.

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Following items should have been already defined before creating a Data Access Set, they are:
 Chart of Accounts
 Calendar and Period Type
 Ledgers should be defined using the above Chart of Accounts and alendar/period Type
 If you want to use Management Segment Value type Data Access Set, you must assign
Management segment qualifier to one of your segments well in advance
Information required for setup
Following information must be collected before proceeding with the setups:
 Name to be provided for Data Access Set
 Description for the Data Access Set
 Chart of Accounts to be Used
 Calendar / Period Type to be used
 Access Set Type required
 Ledger or Ledger Set Name
 In case of BSV or MSV access set types, the list of segment values to be defined.
 Which value requires Read only access and which value requires Read and Write access.
Questions & Answers
6. Which type of Data Access Set is advisable for usage?
The Full Ledger access set type provides better system performance than the Balancing Segment Value
or Management Segment Value access set type.
7. Can we have a Data Access Set without defining what type it is?
You must specify one of the three types for each data access set.
8. Can one change the type of Data Access Set after defining?
Once defined, you cannot alter the type. You can only add or delete ledgers/ledger sets and segment
values specified in the data access set
9. When one should be creating Data Access Set.
 When you want the user to be restricted based on the BSV or MSV, you need to create a Data
Access Set.
 If you are planning to grant full access to ledger, then you are not required to create a Data
Access Set,

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 since systemautomatically creates a Data access set whenever a Ledger or Ledger Set is
created, with the type Full ledger having read and write access.
 You can make use of that. How can I find or trace out the system generated Data Access Set.
 The system-generated data access set for a ledger/ledger set uses the same name as the
ledger/ledger set.
10. Does my Data Access Set override the restrictions provided by Security Rules and Cross Validation
Rules?
No, Data Access set does not override Security rules or Cross validation rules.
11. What precaution needs to be taken care for defining Data Access Set with Balancing Segment Values?
One must make sure that the BSV values used in the Data access sets must correspond to the BSV
values assigned to Legal Entity, using Accounting Setup Manager.
12. What precaution needs to be taken care for defining Data Access Set with Management Segment
Values?
Make sure that you do not restrict read and write access to segment values which are used in default
accounts, such as Retained Earnings Account etc...
13. Can we have multiple Data Access Sets for a Responsibility?
We can define multiple Data Access Sets for a ledger; however we can assign only one Data Access set
per responsibility.
LEDGER SET
 In release 12, the concept of Set of books (Ledger in R12) has been enhanced and termed as
Ledgers.
 Ledgers are of different types, I.e. Primary and Secondary ledgers.
 To make working with ledgers easier, the new feature called LEDGER SET has been introduced.
As the name suggests it is nothing but a Set or Group of ledgers.
 It helps the user in saving time on repetitive tasks performed on ledgers.
FEATURES / PURPOSE
 A Ledger Set can contain any number of ledgers, there is no specific ceiling proposed so far.
 A Ledger Set can include another ledger set within.
 A Ledger Set can only have those ledgers which are sharing the same:
 Chart of Accounts

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 Calendar/Period Type
 A Ledger Set can have Primary, Secondary and Reporting currencies attached to it, but they
need to have the same Chart of Accounts and Calendar/Period Type combination.
 A single ledger can be made use of in Multiple Ledger Sets.
ADVANTAGES
 One can run concurrent programs or processes for multiple ledgers easily.
 Opening and Closing periods
 Generating recurring journals, etc
 One can generate reports for multiple ledgers in no time.
 Reports relating to consolidation
 Financial Statement Generator Reports, etc
 In case of a ledger set, which contains more than one ledger/ledger set in it, user can optionally
set a default ledger for effective usage.
 Ledger set can be secured by having a Definition Access Set.
LIMITATIONS
 You cannot add ledgers that do not share the same chart of accounts and Calendar/Period Type
to a Ledger Set.
 You cannot have a reporting currency which is of type ‘Balance Level’ in the Ledger set, even if
it shares the same Chart of Accounts and Calendar/Period Type.
PREREQUISITES OF SETUP
 One needs to define a chart of accounts structure in place.
 Period Type
 Period types needs to be defined, which in turn will be used by
 Accounting Calendar
 Calendar
 One has to define an Accounting Calendar
 Existing Ledgers or Ledger Sets
 One must have few pre defined ledgers or ledger sets in place.
The following details are required in order to define a ledger set.
 Ledger Set
 Short Name
 Description

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 Calendar
 Period Type
 Default Ledger
 Ledger/Ledger Set
Questions & Answers
14. Can a Ledger Set be created without any ledgers in it
No you cannot create a ledger set without ledgers; you must have at least one ledger or ledger set
assigned.
15. Can a Ledger Set be deleted after defining
No one cannot delete a ledger set which has been created.
16. Can one modify the Ledger Set which is already defined?
Yes, you can add or remove Ledgers / Ledger Sets
17. After setting up the Ledger Set, is there any additional setup required before using the same?
You must assign the Ledger Set to the profile option GL: Data Access Set.
Oracle General Ledger automatically creates a Data Access Set, whenever a Ledger or Ledger Set is
created.
SUBLEDGER ACCOUNTING
 Accounting systemwill have a number of subsidiary ledgers (called subledgers) for items such as cash,
accounts receivable, accounts payable, inventory, purchasing likewise.
 All the entries that are entered (called posted or booked) to these subledgers will transact through the
general ledger account.
 For example, when a credit sale posted in the account receivable subledger turns into cash due to a
payment, the transaction will be posted to the general ledger and the two (cash and accounts
receivable) subledgers as well.
 There are instances when items will go directly to the general ledger without any subledger. These
items will be linked to your balance sheet but not to your profit and loss statement.
The Concept is more or less addressed same in newly R12 SLA accounting, therefore you should note:
 A transactional application that generates accounting impact.
 Used to store detailed information not needed for a general ledger
 Subledgers post summarized activity to a general ledger periodically to maintain centralized account
balances for the company

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 All accounting performed before transfer to the GL and this is achieved by user setup who can do by
definable accounting rules.
 At the data level, it’s a big change for all the subledgers, though there is a first generation changes we
have noticed sometime when 11i Payables where concept of Accounting Events introduced first time
and accounting performed at subledger level first before moving into GL.
 The same idea has been incorporated in new sub ledger accounting model , indeed a was a real need
because of some uneven functionality likes:
1. Inconsistencies in Accounting Generation like Summary vs. Detail
2. Direct to General Ledger vs. Open Interface
3. Inconsistent Drilldown from General Ledger
 Also it has been seen inconsistent Mechanisms for controlling Accounting as certain options has been
used in existing version:
1. flex biller
2. Account Generator
3. Automatic Offsets
What is sub ledger mean for a non finance person?
 A new transactional application that generates accounting impact Used to store detailed information
not needed for a general ledger
 Sub ledgers post summarized activity to a general ledger periodically to maintain centralized account
balances for the company
Why SLA and what does it do?
 Oracle Sub Ledger accounting (SLA) is accounting hub in Oracle Application Release 12 (R12).
 It is used to derive all attributes required to account a transaction in Oracle General Ledger.
 In R12, SLA is used to derive the very basic accounting attributes like entered amount,
accounted amount, Date, Currency code etc and the complex attributes like Ledger, Code
Combination ID, Periods etc.
 After deriving these accounting attributes the transactions are then interfaced to GL from SLA.
 Thus in R12 no sub ledgers (AP, PO, PA etc) interfaces the transactions directly to GL, but all the
transactions are interfaced to GL in following 2 steps:
1. Sub ledgers interface the data to SLA.
2. SLA derives the accounting information and interfaces the data to GL.
SLA gives the flexibility to manage the entire accounting rule at one place, which acts as a single
source of truth for GL.
Note: There is no separate responsibility to access SLA setup or the view the transactions
generated by SLA. Rather we can access SLA setup and review accounted transactions with

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extended menus attached to each sub ledger module
How does SLA works?
1. Register sub ledger transactions in SLA.
 After validating / approving / costing the transaction in the respective module, the sub ledger calls
SLA API to create a reference of the validated transaction in SLA.
 This reference is known as EVENT. Events are created by calling the public API
“xla_events_pub_pkg.create_events” provided by SLA.
 It is up to the sub ledgers on how to call the API.
 For example Oracle Projects call this API from concurrent program “PRC: Generate Cost Accounting
Events” and Oracle Payables calls this API while user creates accounting for the Invoice.
 While calling xla_events_pub_pkg.create_events, oracle passes a unique id and event class (Will
discuss in next step).
 Unique ID can be an invoice id or a po_distribution id or an expenditure_item_id etc.
 As soon as the sub ledger generates event in SLA, SLA returns unique event_id.
 This event_id will then act as a reference to all the accounting entries generated by the SLA.
 Once event is successfully created in SLA, means that the transaction is registered in SLA for
accounting.
 Taking the example of Oracle Projects in 11i where after costing the transaction user need to run
the ‘PRC: Interface Cost to General Ledger’ followed by ‘Journal Import’ followed by ‘PRC: Tieback
process’.
 But in R12 user only need to run “PRC: Generate Cost Accounting Events” which will register
events in SLA and thereafter SLA will take care of accounting the transaction and interfacing it to
GL.
 There is no tieback process in R12, as there is one to one reference of event id between SLA and
sub ledger tables.
2. How does SLA understand whether unique id is invoice id or a po_distribution id or an
expenditure_item_id as SLA uses same table to store all the identifier?

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 Above we discussed that while creating the event we also need to pass event class. This event
class is used to distinguish between the types of transaction passed for processing. To understand
this better we will go thru the seeded oracle information
MONTHEND/YEAR END CLOSE PROCESS
I) ORACLE PAYABLES
1. Complete All Transactions for the Period Being Closed
2. Run the Payables AutoApproval Process for All Invoices / Invoice Batches
3. Review & Resolve Amounts to Post to the General Ledger
4. Reconcile Payments to Bank Statement Activity for the Period
5. Transfer All Approved Invoices Payments, Reconciled Payments to the General Ledger
6. Review the Payables to General Ledger Posting Process After Completion
7. Submit the Unaccounted Transactions Sweep Program
8. Close the Current Oracle Payables Period
9. Accrue Uninvoiced Receipts
10. Reconcile Oracle Payables Activity for the Period
11. Run Mass Additions Transfer to Oracle Assets
12. Open the Next Payables Period
13. Run Reports for Tax Reporting Purposes (Optional)
14. Run the Key Indicators Report (Optional)
15. Purge Transactions (Optional)
II) Purchasing
2. Review the Current and Future Commitments (Optional)
3. Review the Outstanding and Overdue Purchase Orders (Optional)
4. Follow up Receipts-Check with Suppliers
5. Identify and Review Un-invoiced Receipts (Period End Accruals)
6. Follow Up Outstanding Invoices
7. Complete the Oracle Payables- Period End Process
8. Run Receipt Accruals - Period End Process
9. Reconcile Accounts - Perpetual Accruals
10. Perform Year End Encumbrance Processing. (Optional)
11. Close the Current Purchasing Period.

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12. Open the Next Purchasing Period.
13. Run Standard Period End Reports (Optional)
III) Inventory/WIP
1. Complete All Transactions for the Period Being Closed.
2. Check Inventory and Work In Process Transaction Interfaces.
3. Check Oracle Order Management Transaction Process.
4. Review Inventory Transactions.
5. Balance the Perpetual Inventory.
6. Validate Work In Process Inventory.
7. Transfer Summary or Detail Transactions
8. Close the Current Oracle Payables and Oracle Purchasing Periods
9. Close the Current Inventory Period
10. Open the Next Inventory Period
11. Run Standard Period End Reports (Optional)
IV) Order Management
2. Ensure all Interfaces are Completed for the Period (Optional)
3. Review Open Orders and Check the Workflow Status
4. Review Held Orders
5. Review Discounts
6. Review Backorders
7. Review and Correct Order Exceptions
8. Reconcile to Inventory
9. Reconcile to Receivables (Optional)
10. Run Standard Period End Reports
V) Receivables
2. Reconcile Transaction Activity for the Period
3. Reconcile Outstanding Customer Balances
4. Review the Unapplied Receipts Register
5. Reconcile receipts.
6. Reconcile Receipts to Bank Statement Activity for the Period
7. Post to the General Ledger
8. Reconcile the General Ledger Transfer Process
9. Reconcile the Journal Import Process
10. Print Invoices

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11. Print Statements (Optional)
12. Print Dunning (Reminder) Letters (Optional)
13. Close the Current Oracle Receivables Period
14. Reconcile Posted Journal Entries
15. Review Unposted Items Report
16. Open the Next Oracle Receivables Period
18. Run Archive and Purge programs (Optional)
VI) Assets
2. Assign All Assets to Distribution Lines
3. Run Calculate Gains and Losses (Optional)
4. Run Depreciation
5. Create Journal Entries
6. Rollback Depreciation and/or Rollback Journal Entries (Optional)
7. Create Deferred Depreciation Journal Entries (Optional)
8. Depreciation Projections(Optional)
9. Review and Post Journal Entries
10. Reconcile Oracle Assets to Oracle General Ledger Using Reports.
11. Run Responsibility Reports (Optional)
12. Archive and Purge Transactions (Optional)
VII) Project Accounting
1. Change the Current Oracle Projects Period Status from Open to Pending Close
2. Open the Next Oracle Projects Period
3. Complete All Maintenance Activities
4. Run Maintenance Processes
5. Complete All Transaction Entry for the Period Being Closed
6. Run the Final Cost Distribution Processes
7. Interface Transactions to Other Applications (AP, GL, FA)
8. Generate Draft Revenue for All Projects
9. Generate Invoices
10. Run Final Project Costing and Revenue Management Reports
11. Transfer Invoices to Oracle Receivables
12. Interface Revenue to General ledger (Project Billing Only)
13. Run Period Close Exception and Tieback Reports
14. Change the Current Period Oracle Projects Status from Pending Close to Closed
15. Advance the PA Reporting Period (Optional)

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16. Update Project Summary Amounts
17. Restore Access to User Maintenance Activities
18. Permanently Close the Oracle Projects Period (Optional)
19. Reconcile Cost Distribution Lines with General Ledger (Optional)
VIII) Cash Management
1. Load Bank Statements
2. Reconcile Bank Statements
3. Create Miscellaneous Transactions
4. Review Auto Reconciliation Execution Report
5. Resolve Exceptions on the Auto Reconciliation Execution Report
6. Run Bank Statement Detail Report
7. Run Transactions Available for Reconciliation Report
8. Resolve Un-reconciled Statement Lines
9. Run the GL Reconciliation Report
10. Run the Account Analysis Report for the General Ledger Cash Account
11. Review the Account Analysis Report
12. Correct any Invalid Entries to the General Ledger Cash Account (Optional)
13. Perform the Bank Reconciliation
IX) General Ledger
1. Ensure the Next Accounting Period Status is Set to Future Entry
2. Complete Oracle Sub-ledger Interfaces to Oracle General Ledger
3. Upload Journals from ADI (Applications Desktop Integrator) to Oracle General Ledger
4. Complete Non-Oracle Sub-ledger Interfaces to Oracle General Ledger (Optional)
5. Generate Reversal Journals (Optional)
6. Generate Recurring Journals (Optional)
7. Generate Mass Allocation Journals (Optional)
8. Review and Verify Journal Details of Unposted Journal Entries
9. Post All Journal Batches
10. Run General Ledger Trial Balances and Preliminary Financial Statement Generator Reports (FSGs)
11. Revalue Balances (Optional)
12. Translate Balances (Optional)
13. Consolidate Sets of Books (Optional)
14. Review and Correct Balances (Perform Reconciliations)
15. Enter Adjustments and / or Accruals and Post
16. Perform Final Adjustments
17. Close the Current Oracle General Ledger Period
18. Open the Next Oracle General Ledger Period

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19. Run Financial Reports for the Closed Period
21. Perform Encumbrance Year End Procedures (Optional)
Account Payables
It is an ERP solution to effectively manage creditors. The main task is to pay the supplier for the goods
&services. It captures information with respect to purchase invoice transaction & payments to supplier.
The task of effective control of payables can be achieved using the following tools of management.
1. Timely recording of invoices & suppliers liability.
2. Effective payments to suppliers through invoices validation a approval process & exercising
hold whenever needed & availing maximum credit wherever possible.
3. Paying on the due date to avoid overdue interest. You can pay early as per vendor agreement
to available maximum discount & the proper mode for payment.
4. It is a subsidiary ledger to GL. It is integrated to other modules like: GL, Assets, Purchasing, Cash
Management, Inventory, Projects, Human Resources, Receivables, Invoice Gateways (Oracle
Ecommerce), Internet Express, Property Management.
Business Flow
Business flow of payables is as under,
1. Invoice Recording: Based on purchasing order suppliers will provide goods & services invoices. In payables
invoices are recorded based on invoices received, purchase order, receipt of material & services.
2. Invoice Approval Process: Dunning approval process, placed to delay payment for any variation in purchase
order in invoices/receipt of materials.
3. Invoice Accounting: The validated & approval invoices will be accounted.
4. Debit memo issue/Credit memo/receipts/Recording/Accounting: For any variation in purchase order,
invoices/receipts/debit memo/credit memo will be issued, which will be recorded & accounted.
5. Advance Payment approval process: Any advance payment to suppliers requesting approval before
payment.
6. Payments of Approval invoices: Approval invoices will be paid by using payment documents. It can be
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7. Payments Accounting: Once payments are a affected, they will be accounted.
8. Refund receipts/record/accounting: Any excess payment will be refunded by the supplier which will be
recorded & Accounted.
9. Review of supplier’s liability Outstanding: Done periodically.
10. Transfer periodically to General Ledger.
APPLICATION FLOW
1. Assign General ledger Set of books (Ledger in R12) (Ledger in R12).
2. Define lookups (purchasing, payables, Employee).
3. Define payment terms.
4. Define Distribution set: Full/Skeleton
5. Set of defaults &controls in financial & payable options.
6. Create supplier & supplier site.
7. Standard invoices/credit memo/Mixed invoice entry/Employee expense invoices generation, Approval,
Accounting.
8. Prepayment invoices generation/Debit memo issue recording, approval, accounting process.
9. Define payable formats, Bank account, payable documents.
10. Issues of payments, Approval Accounting.
11. Recording of refunds & accounting.
12. Transfer approved invoice transactions & payment transaction to GL.
Information Flow
Data can be predefined in following levels shown in ascending order of hierarchy.
Financial options
Payables options
Supplier level

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Supplier site level
Invoice leader level
Financial Options:
Certain values can be predefined & control options enabled. Values defined at this level will act
as default values access various modules like payables, purchasing & asset modules. These values &
options cascade documents to next lower level.
Payable Option:
Some additional values & options can be defined. The values are
defined at payables options level act as default exclusively for payables module only. The values define
at this level will default to every new supplier being defined.
Supplier level:
Values & options that defaulted from payables options can either be accepted/overwritten with
new values & options. The values options defined at this level will default to site being defined at the
site level.
Supplier Site level:
Values & options can either be accepted/overwritten if required; It will default to Invoice header level.
Invoices Header level:
Values & options defaulted from supplier site level can be accepted /overwritten. It will default
to the following 2 level.
Distribution lines level
Schedule payment line level Accepted/Overwritten
Schedule payment line level
Distribution lines/level

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Transactions
Purchase Invoice Payments
This transaction will be in functional or foreign currency.
Purchase Invoice Transactions:
 Standard invoices
 Credit Memo
 Debit Memo
 Mixed invoice
 Po default Standard invoice
 Quick match standard invoice
 Prepayment invoice
 Expense report invoice
 Withholding tax invoice
 Interest invoice
Payment Transaction:
 Manual payment
 Quick payment
 Refund
Basic Setups
1. Choose Set of books (Ledger in R12)(Ledger in r12)
2. Define financial options
3. Define payable options
4. Open period in payables
5. Define payment terms
6. Define lookups
7. Define discount sets
8. Define supplier & supplier sites

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9. Define bank formats
10. Define bank account& payable document.
Financial options
After choosing GL Set of books (Ledger in R12), define financial options which have following regions.
 Accounting
 Supplier – Entry
 Supplier – payables
 Supplier – Purchasing
 Encumbrance
 Tax
 Human resources
Account payable, purchasing, FA module share these options. Information flow starts from financial option. It
defines the defaulting accounting flexfields for Oracle Payables financial transactions which create oracle GL
journal entities.
Navigation:
Setup Options Financials
Accounting tab:
Future tab:
Number of future periods that we may use in our Set of books (Ledger in R12). In payables there is various
period statuses
 Never open
 Future
 Open
 Close
 Permanently close period.
Never Open: Cannot enter transaction at all
Future: It can be entered but they cannot be processed/ posted in GL.
Open: Enter post & transfer to GL.
Close: Cannot enter transaction but can generate statement like open period.

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Permanently Closed: It will work for all close period. In close period we can toggle to open period but here u
cannot.
GL Account:
Liability – Default liable account for all new suppliers created this value can be overridden during supplier
creation.
Prepayment: Default account for each line entered in prepayment type invoice
Future dated payment: This default to all new supplier & bank account for all future data payment.
Discount taken: Discount taken on payment
PO rate variance gain/loss: Rate variance when we match invoice to purchasing order/receipts.
Expense clearing: payments through credit card, oracle internal expense.
Misc: Misc charges when invoices are imposed through XML gateway (or) high supplier port
Supplier – Entry tab:
RFQ only site: If we enable this all suppliers will be defined as only RFQ only site. For these sites no purchase
order can be generated.
Hold unmatched invoices: To place a hold on invoice during invoice validation when it is not matched to
either purchase order/receipts until the hold is released invoice remain unpaid.
Invoice match option: Purchase order/receipts. It indicates how to match invoices.
Supplier Number Entry: Manually/Automatically. It can be changed at any time. But before changing make
sure that the next available now for automatic enter is larger than largest no: already recorded.
Type: Alphanumeric/Numeric
It can be changed at any time, however changing from a no. numeric only is allowed only if all current
suppliers no are numeric.
Next automatic no: Top value to be entered at the time of financial option setup for generating unique
sequential supplier no.
Supplier – Payables tab:
Payment terms: Immediate/No of days (used to car due dates, discount dates for each invoice entered in
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Payment method: Check/clearing/Electronic/wire recording payments to internal/departmental/inter
cost centre.. etc
Electronic: Information about supplier payment is captured by magnetic media which is delivered to a bank
through electronic data interchange gateway. The banker uses this information to electronically to the
fundamentals from our account to supplier account.
Check: Written order to bank to pay a specific sumof money on demand to a specific person/order.
Wire: To telegraphic is used to manually record. Receipt acceptance days: It refers to grace days to avoid into
being added to the invoices for delayed payments. If we enable an option to recalculate schedule payments at
another level, payable option approval recalculates the invoices due date based on this value also.
Always take disc: Payables always take disc from my supplier no matter when to make payments.
Pay alone: We can pay each invoice by each payable document. If we don’t enable, we can combine payments
of several invoices & pay by single payables documents.
Supplier – Purchasing tab:
Options defined at this region were default for purchase region from the supplier in supplier window.
The inventory organization field is applicable to purchasing module.
Ship to location:
Inventory Org : For purchase module transaction use.
Ship via : Default mode of the operation of freight carrier which will duplicate usually to the supplier
like road, air, rail...
Freight on board (FoB): Specify the term at which the vendor liability classes
Freight items: Specifying freight terms payments methods
Whether it is prepaid /paid by vendor or pay & collect it from supplier/no freight terms.
Encumbrance: It means year making/reserving funds from Out of a budget for a specific use. Encumbrance in
application is defined in this region. Controls specified here will be used for payables & purchasing In
Purchasing modules, it is used for requisition &purchase order. In payables, encumbrance for unmatched
invoices & also for variance, it matches invoices & purchase order.
Use requisition encumbrance: If you enable this you got to ‘Choose’ the encumbrance type. And the
encumbrance type for the requisition is ‘commitment’.

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Reserve @ completion: If it is enabled, encumbrance can be created by their preparing requisition, otherwise
only the approvers of requisition can create encumbrance.
Use PO encumbrance: You got to choose its encumbrance type, PO& the normally obligation Encumbrance for
PO journal for this purchase definition at this level.
Invoice encumbrance level: Encumbrance type to be used for creating encumbrance journal for invoice.
TAX:
Default tax code:
It defaults to invoice tax code option in the supplier window. If you choose a tax code for which we have
defined different tax for different effective dates, payables will automatically use the tax applicable for each
invoices based on invoice date.
VAT Registration: Member state: Location of outcomes to find out whether the company is located in the
member state of the E.U.
VAT registration no: Enable recoverable tax:flatRecoverable /Non recoverable
Flat tax type discount as recoverable for reporting, purpose split ‘taxes into’ recoverable& non
recoverable lines, automatically calculate tax &profit rate it back into GL account of the taxable distribution.
Default recovery rate:
Specify a rate that will default to tax recovery rules & tax codes which we define.
Calculate rules:
Rounding rule: No round tax amount in payables & purchase. Up/down/nearest
Precision: Enter a one digit whole no: to indicate which decimal place you want to round automatically to
calculate tax amounts in payables & purchase.
Minimum Account table unit:
The smallest monetary unit you want to round the tax amount.
Human resources:
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 Define your company as a single business group/there is several major Branches/operating unit each
may be defined as a business group. While defining employer, specifying the business group to which
they belong.
 Expense reimbursement address: Home/office
 The default employee address to which the reimbursement object is to be specified. The value entered
here defaults to new employees you create in the persons window when you can optionally over side
it.
 Use approval hierarchies: On HR you define positions & their hierarchies.
 The job of individual within an organization.
 For e.g.: Account clerkjob
 Enable it to define approval pass for documents within purchasing.
 Employee number: Method Manual/Automatic
Payable Options
It will simplify supplier entry, automatic payment processing, invoice entry. Most of the options can be
updated for future transaction any time. There are specification payables modules only. There are 14 tabs
/region.
1. Accounting methods,
2. Transaction to GL
3. Payment accounting
4. Currency
5. Supplier
6. invoice
7. matching
8. interest
9. Expense report
10. Payment
11. Invoice tax
12. Withholding tax
13. Tax defaults & rules
14. Reports
Setupoptionspayables
In payable options window we can define control options & default used throughout payables.
Accounting method Primary accrual

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Secondary—cash
Accrual/Cash basis method of Accounting:
Accrual accounting is mandatory in certain countries. Secondary accrual accounting. Set of books (Ledger in
R12) is maintained in few countries in Europe that too on cash basis in order to meet sales tax reporting
requisition.
Here sales tax output is by deducting the input tax i.e. tax on supplier invoices from output tax i.e. tax On
customer invoices. Input tax can be set of against opening tax only on efficiency an accruing them in the books
of account as evidence of payments. It will be captured in separate books maintained on a cash basis & field
along with the return.
So the transaction in payables can be journalized in to GL Set of Books (Ledger in R12) based on two type of
accounting methods.
For the primary accounting method based on accrual basis, the GL SET OF BOOKS (LEDGER IN R12) will
automatically default from the SET OF BOOKS (LEDGER IN R12) .
Secondary SET OF BOOKS (LEDGER IN R12) can be optionally maintained internally even if is not mandatory.
But you have to specify the basis on how to journalize the transaction. The options available are
accrual/cash/none.
Automatic offset method:
To create multiple liability lines in payable in such a way that all balancing segments are equalized in
terms of debits. Credits automatically during invoice validations process.
None/Balancing/Accounting
Unbalanced journal:
Invoice Transaction Unbalanced Journal
Dr Cr
C1 100 6420 1000
C2 200 6420 2000
C1 000 2210 3000
Balance:

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C1 100 6420 1000
C2 200 6420 2000
C1 000 2210 1000
C2 000 2210 2000
Account
C1 100 6420 1000
C2 200 6420 2000
C1 100 2210 1000
C2 200 2210 2000
The offset entries are created only at the terms of invoice validation process. These types of offset
entries are created for prepayment entities to in case of company want to prevent prepayment application.
Accordingly for balancing segments – enables the relevant check box.
AP Payable option Transaction to GL:
How payables transacts to a GL interface.
 In detail
 Summarize by accounting date
 Summarize by accounting period.
In detail
As many accounting lines (as number of lines in each invoice) transactions are transfered to GL.
Summarize by accounting date: Lines summarized account to account date
Summarize by accounting period: It will create the least no of lines because it will sum up a pair accounting
for a part period &there one line would be generated.
TR. Reporting books:
Applicable only if we have a reporting SET OF BOOKS (LEDGER IN R12) when we run payables to GL for our
primary SET OF BOOKS (LEDGER IN R12) , TR also takes place in repository SET OF BOOKS (LEDGER IN R12)
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Submit journal import:
If you don’t enable transaction when Transfer to GL by the program Transfer to GL will not import it to GL, it
will be in the interface. In GL we have to run the program to import it from interface if enabled, the latter
program will automatically run.
Allow override at program submission:
Above control if you want to override at the program submission enable it, if you enable it at the time of
submitting payable Transfer to GL in the parameters you can override this submission whether to submit
journal import/not & change from Transfer in details to summarize by accounting date or period.
Payment Accounting
Accounting for payment:
When payment document is issued/ when payment document class.
When both are enabled, it gives the functionality to allow reconciliation accounting .Payment entries that will
be created when payment is issued.
Regular payment: AP liability accounting or to cash clearing account.
Future dated payment: On the date of issue AP liability account or to future dated payment account
On the date of maturity: Future dated payment account
To cash clearing account. They are unreconciled payment entries once payment is cleared, cash clearing
account can be converted to cash account after reconciliation in Cash management module.
Accounting for gain/loss: Foreign currency transaction account for gain /loss when accrual/cash basis is used.
Cash basis: Account for currency gain/loss but payment time & payment clearing date. For future dated
payment, it will account for payment issued date & payment maturity date & payment maturity date &
payment clearing date.
Accrual basis: Between the invoice date & payment issue date.
Future dated payment:
 Invoice date
 Pay issues date
 Pay maturing date

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 Pay clearing date.
Calculate gain/loss:
 For each invoice
 For total payment
Use future dated payment account:
 From payment document
 From supplier site
Currency
Use multiple currencies
Require exchange rate entry – daily rate /periodic rate
Calculate user exchange rate : If invoice/payment is entered in a currency other than functional currency or an
associated fixed rate currency I.e. euro derived currency.
Exchange rate type:
Corporate A standard make rate by senior management for use throughout the organization
Reporting:
 Spot – Daily exchange rate that is a quoted market rate
 User - Used to manually enter in own exchange
Rate during invoice entry at payment time:
If functional currency amount is known for any foreign currency invoices, then one can enable this option for
the system to calculate the user exchange rate. It is used mainly to import invoices through payables open
interfaces.
GL ACCOUNT Realized Gain 6842
Loss 6844
Rounding 6826
Supplier

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Invoices tolerance: To allow variance between invoice, purchase order receipt & tax information, you can
specify here the percentage based/amount based tolerance for suppliers.
Pay Group: Normally defined in purchasing lookup. This is to assign pay group for any new supplier for
payment in batches& reporting purposes (standard/employee pay group)
Invoice currency: USD
Terms date basis:
System/goods receive/invoice/invoice received (It decides the date based on due date basis/discount
date basis & prepare the schedule for payment).
Invoice: Terms date will be decided as invoice date & account due date will be calculate.
Invoice received: The date on which we receive the invoice.
Pay date basis: Discount/due – override @ supplier & supplier site .If invoices are to be paid by exercising
discount option, then the schedule payment is as per the due rate. If they are paid based on due date, then
system schedule payment as per due date.
Book charge bearer: Payment of book charges.
Internal/supplier/Negotiation: Supplier/Standard
Supplier Negotiation: Supplier will bear the book charges at negotiated rate.
Supplier standard: Supplier will bear book charges at standard rate.
Tax reporting: Combined filling program.
A use pay at region – supplier site will default as tax region same will be default in the distribution lines
level.
Income tax region: Only when both check boxes are enabled overrides at invoice discount level.
Invoice (tab):
Use invoice approval workflow: If disabled, Can’t submit invoice for approval to higher hierarchies.
Allow force approval: Override the invoice approval.

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Workflow process: Approve manually at the user level can forcefully approve even if the approval
workflow process is not complete.
Requesting validation before approval:
Allow adjustment to paid invoices:
Recalculate schedule payment:
Automatically create fright discount: If you enable that check box, it uses the freight distribution for the
invoice from the next default option freight account. Freight discount will appear as a single line in invoice.
Confirm date as invoice no: When invoice no is not entered, then date will become the invoice no, In
such situation a caution in popup window will come.
Allow online validation: Users can select invoices for validation in the invoice workbench to the invoice
action window/those validation buttons is invoice batches.
Allow document category override: For invoices besides recording invoice no in case us to wants a
special sequence numbering process for entity of invoice in invoice workbench.
They can adopt a document category sequence numbering you have to enable this checkbox & can use add
category sequential numbering.
GL date basis: Basis on which invoice will have the default accounting data.
 Invoice date
 System
 Goods record/invoice date
 Goods record/system date
Prepayment:
Prepayment invoice - Immediate for advance payment.
Payment terms: Default payment terms for all

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Settlement date: No of days to be adapted to the systemdate for calculating the date which prepayment can
be settled/ applied against any invoices like the prepayment will not be available for application/settlement
against any invoices.
Bill prepayment accounts when matching:
Disabled - prepaid account code combination i.e. defined in the supplier site would be defaulted for the
prepayment line discount.
Enabled- When matching which PO/Receipts, the prepayment item discount lines will be built taking into
account, the natural account segment from the supplier site prepayment account & other segment from the
responsible purchase order discount lines/receipt discount lines.
Matching
Allow final matching:
Final match of an invoice to the PO is done by enabling it. Here for any subsequent invoice matched to
PO after final match, the system hold will be placed for want of PO equivalent & this hold cannot be released
manually.
Allow discount level matching:
Enable: Matching of invoice to PO discount matching of 1/more PO discount with an invoice is possible
here disabled. Payable will allow only matching an invoice to a full PO shipment.
Allow matching account overview:
Enable- You can override an account for invoice discount created by matching to a PO matched invoice
discount account is overridden in invoice workbench/any imported invoices. In case of using encumbrance
accounting/perpetual receipt accrual/PO is project related/PO discount is inventory then such overridden
option is not possible.
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When matching an invoice to PO payables automatically to the descriptive Flexfield information from PO to
invoice if this check box is enabled provided the structure of Flexfield in PO discount is the same as that in
invoice discount.
Interest: Controls & options for calculate of information for override invoice/others.
Allow interest invoice: Enable – systemwill calculate information for override invoice & automatically
generate interest invoices.
Prorate access overdue invoice: Enable – prorate the interest amount of the overdue invoice access item
discount.
Minimum interest amount: For calculating interest is below this value, and then payable will ignore the
calculate interest does not generate any interest invoices.
Interest invoice account codes: Expense &liability Incase if the second checkbox above is disabled, then a
single line discount is created for the total interest & overdue invoice with this account code combination.
Expense 6820 Liability: whenever allow interest invoice is enabled, then you have to specify the interest
invoice liability account code combination in this field -2250 it is used as prepayment process.
Expense Reports
Default template: To enter details of expense of employee is form/template with regular expense
codes/names can be created & used as default template have this will appear in expense report window. The
default value/codes/names/which specified can be overridden at the expense report window.
Payment terms: Select a default payment term for expense report payment. It will be assigned to the
employee when the employee is made as a supplier during expense report/import.
Expense report pay group:
Employee can be grouped for expense report reimbursement purpose & the pay group can be created
at purchasing lookups which can be attached here.
Payment priority: 99 (1- higher priority 99- lowest priority)
Apply advances: To apply advances given to the employee against expense report. Override this option at
expense report window.
Automatically create employee as supplier: At the time payable expense report else he has to be defined in
the supplier window with classification as employee & by linking employee name & number.

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Hold unmatched expense report: Unmatched expense report invoices will be placed on hold during invoice
validation.
Payment
Bank account: Default internal bank for our company. It will be used for payment to supplier. It will be
default in payment window & payment in batches.
Payment Batch limit: Maximum amount payable for the payment batch, if the payable amount is the
batch exceeds this limit, the systemshows a warning message but the excess can be optionally
allowed. This limit is per payment batch.
EFT user no: EFT customer identifying number: allocated to you by user.
Banker/clearing organization. It is incorporated in the pay document sent to buyers.
Additional pay through days:
The number given here is added to default pay through date while initialing a regular payment batch.
No of days specified here are the days but the regular payment date & default pay through date. In case it is
10, payable add to the system date & then arrive at default pay date when we run a payment batch.
Allow document category Override:
Separate numbering of payments as voucher number: Besides payable document number sequential
numbering can be assigned for payment & the payment voucher will be accordingly numbered sequentially. If
you want, you can define a different sequential numbering & override the default setup, if the checkbox is
enabled.
DISCOUNT:
Exclude task from disc calculation: Enabled – tax amount will be subtract from invoice header amount
discount will be calculated.
Three system of accounting discount Taken:
System account: All discounts Taken will be credited to the systemdisc taken account define in the
financial option level.
Prorate expense: Prorate any disc across invoice discount lines, if exclude tax from discount line is
enabled, then disc will prorated across discount expense lines only & not for tax lines.
Prorate task: Prorate to tax discount line only as percentage of the discount amount equal to the
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E.g. tax distribution line 20 % of the total distribution amount, then payable prorate 20% of the discount
amount against tax lines, only the remaining 80% of discount amount is accounted as discount taken account.
SINGLE PAYMENT:
Allow print: To print payments while effecting quick payment.
Allow pre date: We can create payment date prior to system date.
Allow void reissues: Of checks, in cases a check is spoiled, you can void & reissue another check bearing
new cheque number in line of the same cheque through payments.
Allow address change: Change address of supplier site at the time of payment instead of sending it to
supplier site adds as per the invoice.
XML PAYMENTS:
Automatic confirmation:
If System Company uses XML payments, and this check box is enabled then systemwill allow automatic
confirmation of payment batches based on process payment requirement. XML message from in book
indicates that xml payment was successful. If it is enabled, the user will receive workflow information at the
confirmation of the payment batch.
REMIT TO BANK ACCOUNT:
Allow remit- to account override:
Normally for direct remittance to supplier bank account, the supplier site will be having a default
primary bank account. Enabled – in the payment batch window, the user has got an option to change the
remit to supplier bank account.
BANK CHARGES:
Use bank charges: Enabled – you can enter bank charges provided in the supplier region of the payable
option bank charge bearer option is exercised.

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INVOICE TAX
Requisition tax entry at header:
We can enter the tax amount of the tax code of the invoice at invoice header level itself at invoice workbench.
When tax is accounting like this, then distribution lines are generated based on invoice amount after
subtracting the tax amount. Not applicable for imported invoices/for credit & debit memos in invoice
workbench.
Use automatic tax calculation: Based on the tax code tax calculation automatically without entering the
amount.
CALCULATION LEVEL: For automatic tax calculation,
Level at which tax has to be calculated.
 Header – Header level amount is split into line & tax amount.
 Tax code – Based on tax code attached at header level.
 Line – This is always inclusive.
Line: - Tax amount calculation on distribution line amount, It can be inclusive / exclusive if inclusive then check
box includes tax in distribution line level should be enabled; otherwise it will be exclusive tax.
Tax code: Calculating tax more/less in the same way as line level tax except that at the time of calculation of
tax amount, tax lines which the same tax codes can be grouped & then rounding of tax is done .Rounding off is
not done on each tax line but done in tax code grouping level only.
Allow calculation level override: The default level of tax calculation selected in calculation level can be
overridden at the supplier site level only if it is enabled.
Distribution amount inclusive tax: - tax calculation at line level/tax code level at inclusive tax then it is to
be enabled.
Allow override: if the above check box is enabled, then to override the default method of calculation of
tax at supplier site level, enable this,
WITHHOLDING TAX

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Use withholding tax: For supplier & to automatically calculate the same for supplier based on withholding
tax groups.
Allow manual withholding: You can enter withholding tax manually in invoice distribution tax window.
Tax group: Specify the default withholding group for all supplier inclusive new suppliers only if a use
withholding tax option enabled.
WITHHOLDING AMOUNT BASIS:
Include disc amount: You can make payables to inclusive discount amount also for calculation withholding
tax amount.
Include tax amount: You can include invoice tax amount also for calculation of withholding tax.
Apply Withholding Tax:
 Never: Never to apply on supplier invoices
 At invoice validation time
 At payment time
Creating withholding Tax:
 Never: If the company does not want to calculation withholding tax & create
 Invoices automatically, then enable this
 At invoice validation time
 At payment time.
Include income tax type on withholding distributions:
Enable payables to automatically create distribution types for withholding tax .for 1 to 99 supplier
under automatic withholding tax calculation options to report on federal IT with held for those supplier. In
case of manual withholding tax the amount is to be entered manually for reporting.
TAX DEFAULTS AND RULES
Enforce tax from account:
 To set up hierarchies for selecting tax code from various levels.
 Allow payables to select tax code from GL tax assignment for the relevant natural account.

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Enforce tax from PO: To select tax from PO shipment PO i.e. is matched to the invoice.
Tax Code Defaults:
Seven levels from which tax code can default.
1. PO for matched invoices
2. Supplier site
3. Supplier – in case of multi org support structure, entry
4. Accounting of tax code at supplier window is not allowed
5. Financial options
6. Invoice header
7. Template
ACCOUNTS RECEIVABLE
 Effective customer Management is the key of any organization.
 Accounts receivable Modules help on enterprise to manage to customer base, sales invoice and
receipts from customer effectively.
ACCOUNTS RECEIVABLE- A SUBLEDGER
 Accounts Receivable is a subsidiary ledger in which one can track customer, customer
transactions, receipts and collection activities.
SUBSIDIARY LEDGER TO ORACLE GENERAL LEDGER
 It is subsidiary ledger to oracle General ledger and it’s fully integrated with General Ledger.
 All the accounting Transactions will flow to General Ledger with full Audit capabilities likewise
one can drill down from the general ledger journal entries to the oracle receivable accounting
flexfields distribution details.
 Mainly deals with sales invoices, receipts and collection activities
 The main focus that accounts receivable is customer entry, sales invoices, cash receipts and
collection transaction.
BUSINESS FLOW:
 Customer-Purchase item: A customer will place a purchase order.

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 Generate sales order: Then Generate sales order based on “credit limit” of the customer and
availability of inventory.
 Based on the sales order, Invoice is raised with appropriate “payment term”.
 Receive the payment from customer: payment is received from customer.
 Remit (or) “factor” receipts with bank
 The payment either received is remitted or factored with bank.
 If payment from customer is not received then collection activity is initiated.
Purchase order credit limit & payment
(po) stock term
yes
no
AR FLEXFIELDS:
Sales Tax Location flexfield:
The sales tax rate is determined by the “customer” state, county and city. The sales tax location
flexfield structure helps one to capture different rate as per the capture location.
Application: General ledger
Setup->financials->flexfields->key->segments;
Application: Title:
CUSTOMER
SALES
ORDER
INVOICE
REMIT/FACTOR
RECEIPTS
PAYMENT
Collection
activities
receivables
Sales tax location
flexfields

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CODE TITLE DESCRIPTION VIEW NAME
State. country. State. country. State, Country, AR_LOC_flex
City city city become field _USA
This is the default structure.
Predefined Segment: Click segments to view the 3 separate segment structure.
NAME WINDOWS COLUMN VALUESET DISABLED ENABLED
PROMPT
State State Location_ID_Segment AR_LOC_STATE
Country Country Location_ID_Segment AR_LOC_COUNTRY
City City Location_ID_Segment AR_LOC_City
2) Territory flex field:
 It is primarily used to define the reporting territory and capturing territory information.
 It also facilitates customized reporting on territory information with respect to sales person, customers
and transactions. The usage is optional in accounts receivables.
Key Flexfield segment window:
Application: Receivables
Flexfield Title: Territory Flexfield
CODE TITLE DESCRIPTION VIEW NAME
Customer_ Customer Customers
Territory_ Territory territory

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Flexfield flexfield flexfield
Click
Segment summary window->(territory flexfield)->customer territory flexfield
Name Window Prompt Column Value set Displayed Enabled
1.Area Area Segment Territory Area
2.Country Country Segment Territory Country
3. Region Region Segment Territory Region
Information flow:
1) System option:
One has the system option to specify the following. (i.e.) ones accounting method Set of books
(Ledger in R12), tax method, an accounts, customer and invoice parameter, further, one has to specify
how AUTO-INVOICE and AUTOMATIC RECEIPT Program run
2) Customer Profile class: One can define the customer Profile class to group the customer accounts
with
1. similar credit worthiness,
2. business volume,
3. payment cycles,
Segment
Value set Flexfield Qualifiers New Open

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4. Credit limits,
5. payment terms,
6. statement cycles,
7. invoicing and
8. Discount information.
One can also define amount limits for one’s finance charge dunning statements for each currency in
which one transact this to the customers. Then this Profile class is assigned to the customer. So that it
will flow to the customer standard.
Customer standard: Where one can enters the details of the customer.
Customer Address Level: Then from the customer standard level, the information will flow to the
customer address level and further flow to the business level.
Customer business purpose level: Where bill to and ship to address details are given.
3) Transaction Level:
The information will flow to the transaction level where the transactions are enabled.
System option - Accounting method
Customer Profile class - Group Customer with similar
Customer standard - details of customer
Customer address level - address
Customer business level - Bill to/ship to

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Transaction level - Accounting code combination
System Options:
Receivable systemoptions is used for setting up values which flows to lower level in the
information hierarchy systemoption is made up of tabs.
1. Accounting tab
2. Tax
3. Tax Defaults and rules
4. Trans and customers
5. Revenue Policy
6. Claims
7. Miscellaneous
Setup; System; System option
System option (KARTHIK PR E-Demo Receivables (CO1-LOC1))
Accounting Tax Tax Default
and Rules
Trans and
customers
Revenue
policy
Claims Miscellaneous
Accounting tab:
Operatingunit: Vision operation
Name: Vision operation (USA)
Accounting Method: Accrual (accrual/cash)
Financecharge Activity FinanceCharges
Realized Gain Account PR-740-7830-0000-000
Realized losses Account PR-740-7840-0000-000
Tax Account PR-000-2520-0000-000

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Unallocated Revenue Account PR-000-4150-0000-000
Cross Currency Rate Type Corporate
Cross Currency Rounding Accounts: PR-740-7826-0000-000
Heading Account: PR-740-7827-0000-000
Automatic Journal Import
Header level Rounding Day per posting cycle
-Accounting Flexfield Description
 Name of the operating unit
 Name of the Set of books (Ledger in R12)
 Name of the accounting method whether accrual->to “record” revenue from debit memo
,invoices, charge backs cash basis->”recognize” revenue at the time when one receives
payment for invoice, debit memo, charge backs.
 Finance charge activity: This default provided by the receivables. One can have one’s own
activity defined.
 To account the difference in exchange rate gain/loss
 Realize loss account to account the differences in exchange rate losses.
 One has to enter the tax account to enter the tax codes and rates.
 Unallocated revenue account is used when cash basis is used and one can apply cash receipts
with norms zero balance and invoice with zero balance.
Cross currency Rate Type:
The default is exchange rate type, the receivable will use in case the receipts and transactions
are into different currencies.
Cross currency Rounding Account:
 The receivable will use this account to record rounding amounts created during cross currency
receipt application.
 Header Rounding Account: This field is only optional. Receivable use this account to record any
rounding differences that arise when converting foreign currency transactions to one’s
functional currency.
30

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 If automatic journal import is enabled, to import the batches of transactions to posted once in
general ledger.
 One has to enter the number of days per posting cycle to avoid system over load. One has to
enter the number of days.
 E.g. 10 days is given here but the number of accounting days is 30, then there are three cycles.
 If header rounding account is given then the header level rounding check box should be
enabled.
2. Tax Tab:
Tax Method:
Location Flexfield Structure
Postal code Range
Address validation
Invoice Printing
Tax registration number
Tax vendor views
Sales tax Geo over ride
Inclusive tax used
Rounding Option
Sales tax
State .country. city
0000-99999-9999
No validation
Item size and sum
98-1234567
oracle

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Calculation level Line
Rounding level nearest
Reporting Currency USD
Precision 2
Min accountable unit 0.5
Allow Over ride
This tab is used to calculate the taxes.
 One can enter either sales taxes (or) value added taxes.
 So that receivable uses this tax method.
 Sales tax is based on the location of the customer receiving one’s goods and services / whereas
value added tax is imposed on the value added to each goods and services at each stage of
supply.
 One has to enter the one’s sales tax location Flexfield structure state; country; city. It is used as
Predefined location flexfield structure.
 One has to enter the postal code range that will be default to tax, location and rates window.
 Address validation: One can make the systemto have the validation check on the address
format. Three values
1. Error
2. No validation
3. Warning
Invoice Printing: Select the method to print tax amount on the invoices.
One has to enter the sales invoice Tax registration number for the same to be printed on the invoice.
Tax vendor views is used to calculate the tax select one from the invoices.
Enable inclusive tax used checkbox. When one wants to use inclusive tax codes.
Calculation level field: default line level. Line, header, one can opt to calculate either at line level or
header level.
The systemwill calculate tax at each line level. If it is header means one will calculate tax for each
invoice for each rate.
Rounding rule-> up, down, nearest.
o Up -> round the calculation at the greater amount
o Down -> round the tax calculation at the lowest level
o Nearest -> round the tax calculation at the nearest decimal point (or) integer.
Reporting currency will have the same currency US dollar as your reporting currency.

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Precision is the number of decimal places to be displayed.
Minimum accountable unit is the smallest denomination used in the currency.
Rounding rules example
Precision -> 2.
Minimum accountable unit is .02
Rounding rule unit Price rounds to
up 3.444,3.445,3.446 3.45
down 3.444,3.445,3.446 3.44
nearest 3.444
3.445
3.446
3.44
3.45
3.45
If allow over ride is enabled, one can specify the tax calculation and tax rounding both at the customer
level (or) site level.
3) Tax default and rules tab:
 Enforce tax from revenue account
 Calculate tax on credit memo during auto invoice
Tax code defaults Hierarchy
Customer site 1
Customer 2
Product 3
Revenue account 4
System option 5
Tax code
Exception Rates
Use customer Exemptions
Use item Exemptions (B)
Use item tax rate Exception (G)

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 If enforce tax from revenue account is enabled then it is optionally set up one’s system to
ensure that the tax code from one’s invoice lines “is same” as the tax code one has assigned to
the account segment for one’s “revenue account”.
 Enable calculate tax on credit memo during auto invoice if one want to calculate tax on credit
memo automatically during the importing of credit memos using auto invoice.
 Tax code defaults -> one can enter the hierarchy by entering the sequence number for each.
This hierarchy determines the order in which receivables derive the default tax rate when one
manually enters transaction or during running “auto invoice Program”.
 Exception rates:
 Enable Use customer Exemptions to one can include customer exemption for when calculating
tax for one’s transaction.
 Enable use item Exemption one can include item exemption for calculating tax on one
transaction.
 Enable use item tax rate exception when one uses tax rate one define for specify Product for
based on customer ship to address
Trans and customer tab:
 Allow change to Printed transaction (J)
 Allow payment of unrelated transaction (Q)
 Allow transaction Deletion (K)
 Show billing number (Z)
Document number generation level
Auto invoice
Tuning segments
Accounting flex: Account
When saved

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System items : Item
Territory : Area
Max memory (in bytes) 131070
Log file message level 3
Purge interface tables
Customer
 Automatic Customer numbering
 Automatic site numbering
 Create reciprocal customer
Grouping rule name default
Enable allow change to Printed transaction – one can update the transaction that have been Printed.
 Enable allow payment of unrelated transaction – one can allow receipt application to debit
items of unrelated customers (or) to allow bills receivables assignments to transaction of
unrelated customers.
 Enable allow transaction deletion – one can delete transaction after they have been saved.
 Enable allow billing number – By doing this receivable assigns a unique invoice billing number
when one print a draft or final version of one’s consolidated billing invoices.
 One can select the point when invoices generate a document number for ones transaction.
 There are 3 document number generation level.
 None
 When completed
 When saved
“Auto invoice”
 Process of transferring the transactions from other system (OM0r Legacy system) into AR.
 One has to enter the accounting flexfield, systemitems and territory flexfield segments that are
most often selected by auto invoice.

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Enable automatic customer numbering –by during this systemwill assign a unique number to every
new customer.
Enable automatic site numbering – systemwill automatically assign number to one customer business
purposes.
Enable create reciprocal customer – by doing this one can create the reciprocal relationship during
customer.
E.g. A and B are customer .A pay for B likewise B can Pay for A. Now A and B are related.
Grouping rule name:
 One can enter the default grouping rule name which the auto invoice will use.
 The auto invoice will use this rule to group revenue and credit transaction, debit memos and
credit memos.
Miscellaneous Tab:
Split amount Discount basis:
Auto cash rule set
Days in day sales
Outstanding calculation
Sales credit percent limit ->
Write off limits per receipt
Allow interest Require billing location for receipts
Allow unearned discounts Print remit address
Discount on partial payment Point home country
Trade accounting installed
Bills receivable enabled
2500
Invoice amount
standqrd
90
100
3000

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Require sales person
Minimum refund amount
Credit card payment method
Bank account payment method
Auto receipts
Invoices per commit receipt per commit
Chargeback due date open invoicedue date
Default country United States
Source of territory salesrep
Application ruleset Line and tax Prorate
By specifying split amount, the system will determine the number of invoices over and under this
amount as well as the total amount outstanding.
Discount Basis -> Receivables will use this value (lines only) as default discount basis in payment terms
windows other discount basis.
 Line only
 Invoice amount
 Lines, freight items and tax
 Lines and tax, not freighting items and tax.
Lines only -> The system will use only the line amount of one’s invoices for calculating the discount.
Lines, freight item and tax -> The system will use the line items, freight and tax of one invoice but not
the freight and charges at the invoice header level as the basis for calculating discount.
Lines and tax, not freight item and tax-> The systemwill use the line item and tax amount but not the
freight items and tax lines for one’s invoices as basis for calculating discount.
Invoice amount-> systemwill sum the tax, freight charges and line amounts of one’s invoice and use as
basis for calculating the discount.
500 500

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Auto cash rule set:
Receivable will use this field when one enter receipt for the customer “whose Profile class has not
been assigned” on the auto cash rule set.
Days in day’s sales outstanding calculation: The number of days when one enters here will be used
while calculating one’s conventional days sales outstanding for the collection effectiveness indicators
report.
The formula used for calculating the days outstanding.
Conventional days
Sales outstanding = Total outstanding receivables DSO Days
Total sales for last DSO days
DSO days -> “Days outstanding”
Sales credit percent limit: One can specify the limit on the percentage of revenue plus nonrevenue,
sales credit that sales person can have on any transaction line.
Write-off-limits per Receipt -> one can specify the range for write-off-amounts.so that one cannot
write off less than or greater than the amount one specify here
Enable accrue interest -> receivable will update the balance to the finance charges of our transaction
that are positive.
Enable require billing location for receipts -> receivable will associate a built location to cash receipts.
Enable allow unearned discounts-> receivables will allow the customer to take discounts even if he
pays after the expiry of credit period allowed.
Enable Print remit to address-> when one enables this, receivable will Print remit to address on the
customers statement.
Enable discount on partial payment -> Receivables will discount on partial payment that is the
customer is making us payment which is less than the amount outstanding for a transaction.

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Enable Print home country -> System will print the home country on one’s invoices and statements.
Enable trade accounting installed -> When one wants to use the trade accounting features then one
has to enable the check box for this one has to use the responsibility of “AR trade accounting”.
Minimum refund amount -> Auto invoice automatically, create refunds for credit memos that are
imported against paid invoices Provided the request amount are equal or greater than the minimum
amount that one specify here.
Credit card payment method -> By selecting the default payment method, one can pay the transaction
through credit card.
Bank account payment method -> “ACH” one has to attach the default payment method which is to be
paid on the “Automatic clearing house” bank account transfer.
Require Sales person -> one can enter the sales person while entering transaction.
Auto receipts:
 Invoice per commit -> one has to enter the number of invoices. One want to Process in the
automatic receipts Program.
 Receipts per commit -> One has to enter the “number of receipts” one wants Process in the
automatic receipt Program.
 Change back due date -> one has to enter the default charge back due date. The options are.
 Current date: use today’s date as current date.
 Deposit date: Use date of receipt deposit as a default date.
 Open invoice date: use date of the invoice (or) debit memo as default date.
 Receipt date: use “date of receipt” one enters as default date.
 Default country -> Receivables will use country one enters here as the home country for tax
calculation, flexible bank structure, flexible address format and tax country and tax registration
number validation.

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 Source of territory -> Receivables will use one territory enter here to default into sales person
transactions and customer window.
Values are
 Bill to site -> Receivable will use the customer bill to address as default.
 None -> need not enter default territory.
 Sales rep -> receivables will use the territory which has been assigned to the customer as the
Primary sales person default.
 Ship to site -> Receivables will use customer ship to address as default.
 Application rule set -> One has to attach the application rule set which will determine the
default payment steps. When one use the application window post the cash to apply receipts.
 Line and tax Prorate
 Line first – Tax after
 Prorate all
NOT USED IN AR – When ORDER MANAGENENT is used consider these tabs.
6) Revenue policy tab:
Standard refund policy days
Payment term threshold days
Select credit classification for deferring revenue.
First selection :
Section Selection:
Third selection:
7) Claim tab:
Lock box and post quick cash claimhandling
Unmatched remittance line:

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Prepare for claimcreation
Negative lines
Positive lines
Matched remittance line:
Prepare for claim creation
Exclude credit memos
Payment terms:
It decides the payment schedule and discount information.
Predefined payment term
1. Immediate
2. 30 net
Other payment terms include
3. Fixed date payment term
4. Installment payment term
5. Proxima payment term
Navigation: setup; transaction; payment terms
AR collectors: Setup; collections; collectors
Collectors who are involved in collection activities.
8) Customer Profile class: - 3 tabs
Customer Profile class enables one to default many of the values such as collectors, Receipts
parameters, statement parameters, dunning parameters, payment terms parameters, finance charges
parameters, invoicing and consolidated billing format.
Tab 1) Profile class
1. Collectors

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2. Receipts
3. Statement
4. Dunning
5. Terms
6. Finance charges
7. Invoicing and consolidated billing format
Tab 2) Credit Profile
1. Classification
2. Periodic review cycle
3. Analyst
4. Tolerance
Tab 3) Profile class amounts
Currency rates and limits. They need to maintain one’s customer and one can group customer with
similar characteristics into one’s particular class.
Navigation:
Customer; Profile class
Customer Profile classes:
Name Active
Profile class Credit Profile Profile class amount
Click Profile class
Collectors Terms
Name Payment term :
Allow override Allow discount
Discount Grace days
PR CUS PROF CLS PR Customer Profile
class
PR Collector PR IMMTR
0

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Receipt Grace days
Receipt
Match Receipts By
Auto cash rule set
Remainder Rule set
Auto receipts include disputed items
Finance charges
Charge interest
Compound interest
Days in period
Statements
Send statements
Send credit balance
Cycle
Invoicing
Tax Printing
Grouping rule
Dunning
Send letters
Letter set
Consolidated billing formats
Enable type
Click credit Profile
Classification
Periodic review cycle
Analyst
Tolerance %
Credit check
Tab 3
Currency rates and limits
USD finance charges interest rate
0
360
monthly
European tax format
default
Standard
detail
0
Profile class amounts
10%

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 Max interest per invoice
 Min customer balance for finance charges
 Min invoice balance for finance charges
 Min receipt amount
 Min statement amount
 Min dunning amount
 Min dunning invoice amount
 Credit limit
Order credit limit
a) Cycle may monthly, quarterly, weekly, yearly.
b) Letter-set: Standard, Standard staged
Standard letter set Standard letter set for staged dunning
Staged – No fin CHG -> standard no finance charges
CH – standard -> Standard dunning let set vision Switzerland
Credit Profile
1. Classification -> credit classification such as
a) high risk
b) low risk
c) moderate risk
2. Periodic review cycle -> This review cycle specifies how often “one has to perform credit review” in credit
management.
3. Analyst -> One has to select the default credit analyst for the customer Profile class to do the credit review
4. Tolerance -> One has to enter the credit check tolerance (ie) percentage check over the credit limit.
When credit check enabled, oracle order management will check the customer credit before creating a new
order.
Tab 3: Profile class amounts

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 Finance charges -> this interest rates which will be the customer
 Max interest per invoice -> receivable will charge only if the calculated interest amount is
greater than the amount entered.
 Min customer balance for finance charges -> receivable will apply interest only if the balance is
more than the one specified here.
 Min invoice balance for finance charges -> receivable will apply interest only if the positive
invoice balance is more than the amount one specify here.
 Min receipt amount -> Receivables will generate automatic receipt only when the receipt
amount is more than the one specified here.
 Min statement amount -> receivables will generate the statement for the customers only when
the customer amount balances is more than the one specified here.
 Min dunning amount -> receivables will generate the dunning letter for the customer only if the
positive balance is more than the amount one specified here.
 Min dunning invoice amount -> receivables will generate the dunning letter for the customer
only if the debit balance of each positive item is more than the amount one specify here.
 Credit limit -> one has to enter the credit limit here.
Order credit limit
Click save and close
Allow natural application: Invoice 100. Max allow to Rs.100 only.
9) Tax location and rates:
One can enter the location and the associate tax rates in the tax location and rates window.
Receivables use location such as
1. State
2. Country
3. City
And associates tax rates to create tax authorities.
It also uses the location to validate customer address.
Navigation: setup ; tax ; locations
Find State Find

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Location
State Description Tax amount
PR STATE PR STATE PR-000-2520-0000-000
Rate
Tax rate% Override from To from To
5% 01 Jan 07 - 00000 99999-9999
Click just to view
Then select country and attach the state
Just defined
Find Given state
Location
Country Description Tax account
PR country PR country
RATES
Effective dates Postal codes
Tax rates% Override from to from to
3 1 Jan 2011- 00000 99999-9999
Then select city and attach the country just defined
Find Given country
Tax accounting
country PR STATE
Find
City PR
COUNTRY

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