R12 ar practice documentation_v6.6 (1)

R12 ORACLE ACCOUNTS RECEVIABLE PRACTICE GUIDE
R12 ORACLE ACCOUNTS RECEVIABLE
FUNDAMENTALS
Page 1 of 38

TABLE OF CONTENTS
1. Defining Payment Terms:..................................................................................................................3
2. Creation of Transaction Types:.........................................................................................................4
4. Creation of Memo Lines:...................................................................................................................6
5. Creation of Accounting Rules:...........................................................................................................6
7. Define Profile Classes.......................................................................................................................7
8. Create a Party (Organization) with party level Account Information & Address.................................9
9. Adding and Updating Account Site Business Purposes:.................................................................12
9.1 Add Business Purpose...........................................................................................................13
10. Review the setups till now:............................................................................................................14
11. Entering and Updating Account Site Payment Details...................................................................16
11.1 Adding and Updating Account Site Profiles.............................................................................17
11.2 Adding and Updating Account Site Late Charges ...................................................................18
12. Adding more sites to the customer account:..................................................................................19
13. Review all customer setups...........................................................................................................21
14. Creating a Transaction:.................................................................................................................23
15. Creation of Distribution Sets:.........................................................................................................26
16. Receivable Activities:.....................................................................................................................26
17. Setup Receipt Sources:.................................................................................................................27
18. Setup Receipt Class and Receipt method:....................................................................................28
19. Receipt Entry.................................................................................................................................29
21. Period End Closing:.......................................................................................................................35
Page 2 of 38

1. Defining Payment Terms:
(N) Setup > Transactions > Payment Terms
We need to create payment terms and assign the same while creating the profile class of the
Name XX 2/10-Net30
Description
2 percent discount if paid in 10 days and Net is payable in 30
days
Billing Cycle
Base Amount 100
Discount Basis Lines Only
Effective Dates: From 1-Dec-08
Installment Options Include tax and freight in first installment
Payment Schedule Region
Sequence 1
Relative Amount 100
Days 30
Button Discounts
% 2
Days 10
Page 3 of 38

2. Creation of Transaction Types:
(N) Setup > Transactions > Transaction Types
Operating Unit Legal Entity
Vision Operations
Name XX Invoice XX CR Memo XX Debit Memo XX Chargeback XX VOID
Description My Invoice -
XX
My Credit Memo -
XX
My Debit Memo - XX My Chargeback - XX My Void Invoice -
XX
Class Invoice Credit Memo Debit Memo Chargeback Invoice
Creation Sign Positive Sign Negative Sign Positive Sign Positive Sign Positive Sign
Transaction
Status
Open Open Open Open Void
Printing
Option
Print Print Print Print Print
Invoice Type
Credit Memo
Type
XX CR Memo
Application
Rule Set
Line First--Tax
Prorate
Line First--Tax
Prorate
Line First--Tax
Prorate
Line First--Tax
Prorate
Line First--Tax
Prorate
Terms XX 2/10-
Net30
Start Date 1-Dec-08 1-Dec-08 1-Dec-08 1-Dec-08 1-Dec-08
End Date
Open
Receivable
Yes Yes Yes Yes
Allow Freight Yes Yes Yes Yes Yes
Post to GL Yes Yes Yes Yes
Natural
Application
Only
Yes Yes Yes Yes Yes
Exclude
From Late
Charges
Calculation
Accounts Region
Receivable
Account
01-000-1210-0000-000 01-000-1210-0000-
000
01-000-1210-0000-
000
01-000-1210-0000-
000
01-000-1210-0000-
000
Revenue
Account
01-000-2925-0000-000 01-000-2925-0000-
000
01-000-2925-0000-
000
01-000-2925-0000-
000
01-000-2925-0000-
000
Unbilled
Receivable
Account
01-000-1232-0000-000 01-000-1232-0000-
000
01-000-1232-0000-
000
01-000-1232-0000-
000
01-000-1232-0000-
000
Tax
Account
01-000-2520-0000-000 01-000-2520-0000-
000
01-000-2520-0000-
000
01-000-2520-0000-
000
01-000-2520-0000-
000
Freight
Account
01-000-7220-0000-000 01-000-7220-0000-
000
01-000-7220-0000-
000
01-000-7220-0000-
000
01-000-7220-0000-
000
Clearing
Account
01-000-1250-0000-000 01-000-1250-0000-
000
01-000-1250-0000-
000
01-000-1250-0000-
000
01-000-1250-0000-
000
Unearned 01-000-2550-0000-000 01-000-2550-0000- 01-000-2550-0000- 01-000-2550-0000- 01-000-2550-0000-
Page 4 of 38

Revenue
Account
000 000 000 000
3. Creation of Transaction Sources :
(N) Setup > Transactions > Sources
You can setup 2 types of transaction sources
Manual (If you want to create transactions manually in AR)
Imported (if you want to import invoices from Order management, Projects, legacy applications)
Operating Unit Vision Operations
Legal Entity
Name XX Invoice Source
Type Manual
Batch Source region
Description
Invoice Source-
Manual-XX Effective Dates (From) 01-Jan-1951
Active Yes Effective Dates (To)
Automatic Batch Numbering Last Number 999
Automatic Transaction
Numbering Yes Last Number 99
Copy Document Number to
Transaction Number Receipt Handling For Credits
Allow Duplicate Transaction
Numbers
Reference Field Default
Value interface_header_attribute1
Copy Transaction Information
Flexfield to Credit Memo Standard Transaction Type XX Invoice
Credit Memo Batch Source XX Invoice Source
Page 5 of 38

4. Creation of Memo Lines:
(N) Setup > Transactions > Memo Lines
Name XX Production Support
Description Production suport for 1 Year
Type Line
Tax Classification
Tax Product Category
Unit List Price
Unit of Measure
Revenue Account 01-000-2925-0000-000
Invoicing Rule
Accounting Rule
Active Dates (From) 01-JAN-1951
Active Dates (To)
5. Creation of Accounting Rules:
(N) setup > Transaction > Accounting Rules
Name XX 3M Fixed Description XX 3Months Fixed
Type Fixed Schedule Active Yes
Period Month Number of Periods 3
Deferred Revenue No
Schedule
Period Percent Date [ ]
1 33.3333
2 33.3333
3 33.3334
6. Approval limits:
(N) Setup > Transactions > Approval Limits
Main More
Username Document Type Reason Currency From Amount
To
Amount Primary Description
XX User Adjustment USD -100 100
XX User Receipt Write-off USD -200 200
Page 6 of 38

7. Define Profile Classes
(N) Customers>Profile Classes
Enter the Profile name, Description
Enter the following in tab Balance Forward Billing, Invoicing details, Payment
terms, Statements and Dunning details of the profile, Collectors, Receipts
Page 7 of 38

Enter the values for Late Charge Profile
Enter the Profile Class Amounts for which a customer can be assigned
Page 8 of 38

8. Create a Party (Organization) with party level Account
Information & Address
(N) Customers > Standard
Button Create
In the Customers window, Create Party with party level Account Information & Address
Customer Information Region
Organization Name XX My Party3
Alias XX MP3
D-U-N-S Number
URL http://www.xxmyparty3.com
Account Information Region
Account Description XX My Party Accnt3
Profile Class DEFAULT
Account Type
External
Account Site Address Region
Country United States of America
Address Line1 102 East Arques Ave
Address Line2 33
City SUNNYVALE
County Santa Clara
State CA
Postal Code 94085
Address Description
Geography Code
Override
Optionally enter Account Site Details Region
Status
Active
Business Purpose Region
Purpose Marketing
Primary Yes
Click on the Button Apply
Page 9 of 38

The Customer Overview window opens with all the details you entered…
8.1 Setup Party Profile:
In the Customer Overview Window, Click on the Profile Tabbed region and enter the below
OPTIONAL details
Organization Information Region
Customer Category Education
Tax and Financial Information Region
Taxpayer ID
Tax Registration Num
Currency Preference USD : US dollars
Annual Revenue 10000000000
8.2 Setup Communication Details:
In the Customer Overview Window, Click on the Communication Tabbed region and enter the below
OPTIONAL details
Phone Numbers
Select Telephone from the drop down and click on button GO
Country Code 1
Area Code 471
Number 654785
Ext 2345
Status Active
Page 10 of 38

Email Addresses
Purpose Business
Format HTML mail
Email businessmail@xxmyparty3
Status Active
8.3 Setup Party Relationships: In the Customer Overview Window, Click on the Party
Relationships Tabbed region and enter the below OPTIONAL details
Party Relationships
This section will display any existing relationships. Click on the button Add Another Row to add a
new relationship
Customer Alliance Systems
Relationship Role Partner
Start Date 01-Dec-2007
Comments
8.4 Setup Tax Profile: In the Customer Overview Window, Click on the Tax Profile Tabbed
region and enter details for the below. This has to be done with inputs from your tax team and eBTax
implementation team.
• Main Information
• Default Controls
• Tax Registrations
• Associated Fiscal Classifications
• Customer Tax Exemptions
• Tax Reporting Codes
• Account Tax Details
Customer Tax Exemptions
Exempt reason Hospital Education
Relationship Role Unapproved Unapproved
Tax Regime Code US-SALES-TAX-101 US-SALES-TAX-101
Configuration Owner Vision Operations Vision Operations
Effective from 01-Dec-2007 01-Dec-2007
Discount/Surcharge Percentage 100 100
Page 11 of 38

9. Adding and Updating Account Site Business Purposes:
For the Party you just created. (Optional- As per your requirement)
In the Customer Overview Window, Under the Accounts you will see the entire customer accounts
setup till now as in the figure below.
Click on the button Create Account to add a new customer account.
Account Information Region
Account Description XX My Cust Accnt 1
Profile Class EXCELLENT
Account Type
External
You will see the All Addresses setup earlier in the bottom of the page. You can sel;ect one of them
and continue OR Click on the Button Create Address
The customer Account site opens up with the Organization name and Registry ID. Enter the following
details …
Address Line2 404
City SUNNYVALE
County Santa Clara
State CA
Postal Code 94085
Address Description My Cust Accnt 1
Geography Code
Override
Page 12 of 38

Optionally enter Account Site Details Region
9.1 Add Business Purpose
Purpose Bill To
Primary Yes
Bill To Location
Click button Add Another Row
Purpose Ship To
Primary Yes
Bill To Location (Site Bill-to)
Click on the Button Finish
The Customer account details are saved and the Site:30997 (number of your site) is displayed as in
the figure below. Enter details in other tabs highlighted below
Page 13 of 38
Enter/Review
details in this
tab

10. Review the setups till now:
The next section enclosed in **stars** is only for your information. Review the info and proceed to
setting up Payment details + Profile + Late charges tabs
*************************************************************************************************************
If you go back to the Customer overview window now you can observe how your
Party > Cust Accnt > Cust Accnt Site are structured as in the fig below
Your Party+ Customer Account + Its site + Business Purpose at that site
Page 14 of 38

*****************************************************************************************************************
Page 15 of 38

11. Entering and Updating Account Site Payment Details.
Open the site to which you want to add payment details: From the Customer Overview window, select
the your Customer Account and select the Site within that customer account and click on the icon
under details... . This will open the Site:30997 (number of your site) window.
Receipt Method: If you intend to use automatic receipts for this site. We shall leave this blank
Receipt Methods
Primary
Start Date
End Date
Bank Accounts: You can assign a bank account either by adding a predefined bank account or by
creating a new bank account
Country United States of
America
Allow International Payments
Bank Accounts Region
Select Existing Bank Yes
Bank Name Citibank
Branch Region
Branch Name Westside Branch
Bank Account
Account Number XX1000
Check Digits 6
Currency USD
Page 16 of 38

11.1 Adding and Updating Account Site Profiles
Use the Profile subtab of the Account Site Overview page to add and update the profiles of existing
account sites.
• Navigate to the Profile subtab on the Account Site Overview page.
• (For newly created account sites only) Select Yes in response to the Assign Profile Class
confirmation message, in case you decide to create a profile at the account site level.
• By default, the account site inherits the profile class assigned at the account level. However,
you can change the account site profile class as required.
Accept the default values for the below or select different values as may be required…
• Profile Class
• Credit and Collection
• Terms
• Receipts
• Statements and Dunning
• Invoicing
Page 17 of 38

11.2 Adding and Updating Account Site Late Charges
You can assess late charges against past due debit items for each customer, account, or site
Accept the default values for the below or select different values as may be required…
Page 18 of 38

12. Adding more sites to the customer account:
( For eg to the cust account XX My Cust Accnt 1)
From Customer Overview window, select the customer account to which you want to add an
additional Site as shown in the figure below…
Click on button Create Site. This will open Create Account Site window as in the figure below
Page 19 of 38

Address Region
Click on the button Create Address
Enter the following details in the …
Address Line2 504
City SUNNYVALE
County Santa Clara
State CA
Postal Code 94085
Address Description My Cust Accnt 1
Purpose Bill To
Primary Yes
Bill To Location
Purpose Ship To
Primary
Bill To Location (Site Bill-to)
Purpose Legal
Primary Yes
Click on the Button Finish
This will open the Site:31017 (number of your site) window with the Site Details
Optionally you can review each of the tabs in the above window and update them.
Page 20 of 38

13. Review all customer setups
From the Customer Overview window, your customer structure will look like the below
Page 21 of 38

13. Party Merge
Party merge is managed by Trading Community Architecture
(N) Customers>Party Merge
14. Customer Account Merge
This is used to consolidate any duplicate customers or transfer site use activity from a customer or
site that is no longer active. After the merge completes successfully, all activity that was previously
associated with the old customer or site is now associated with the new customer or site. Activity
includes invoices, debit memos, commitments, credits, receipts, adjustments, and chargeback’s. The
merge process also checks for records in the Auto Invoice interface tables.
If we need to delete the records after Customer Merge we need to enable the check box Delete After
Merge then all the invoices which has been merged would be deleted from the system and we would
be available only with the merged invoices
(N) Customers > Account Merge
After providing the required information we need to click on Merge button so that the Account Merge
would be started by raising an Concurrent Request which is displayed on Request ID button.
Page 22 of 38

14. Creating a Transaction:
(N) Transactions > Transactions
Header
Source XX Invoice Source Date Accept default
Number GL Date Accept default
Class Currency USD
Type Accept default
Main Tab
Bill to Section
Name Alliance Systems
Number 1990
Payment Term XX 2/10-Net30
Invoicing Rule
Click on Lines Button
Lines
Main Tab Tax Exemption Tab
Num 1 Tax Handling Exempt
Item AS18947 Reason Education
Description Accept default
UOM Accept default
Quantity 10
Unit Price 1000
Amount Accept default
Save and Close the Lines window
Click on the button Complete
Note down the Transaction Number: It should be 1000
14.1. Viewing the Balances
Click on the button Details
Page 23 of 38

14.2 Voiding Transactions:
Query the transaction to be voided (should not have been transferred to GL and no other activities
performed on this invoice)
Click on the button Incomplete
Change the Type as XX VOID then click on Complete button. The transaction is voided.
14.3 Create Credit Memo: (from transactions window)
Create an Invoice (Refer Creating Transaction chapter)
From Menu click on Actions > Credit .On the Credit transactions window, Navigate to Transaction
Amounts region: Select Lines only in credit allocation field.
Enter a percentage by which you want to reduce the transaction amount. Or Simply enter a negative
amount and save.
The Credit memo number is generated and Balance Due on original invoice is reduced. Finally click
on the button Complete.
Page 24 of 38

14.4. View Account details of the customer:
(N) Transaction > Account details
Bill To Customer Alliance Systems
Number 1990
Click on Button Find
Observe the details as in Screen shot
below
14.5 Dispute details on Invoices:
If there is any invoice which is in dispute we can update in the dispute column by giving the dispute
date and then when the dispute is resolved then we can remove the dispute amount and dispute date
accordingly. (N) Transaction > Account details
View account details, Select the invoice you want to put some amount on dispute, Enter an amount
Page 25 of 38

15. Creation of Distribution Sets:
(N) Receivables>Setup>Receipts>Distribution Sets
<Distribution Sets>
Name XX Miscellaneous
Description
Distribution sets let you speed your
receivables accounting by reducing data
entry
Active Yes
<Distribution Set Lines>
% Account Description
60 01-740-7740-0000-000 To Controllers office
40 01-001-7740-0000-000 To IT dept
16. Receivable Activities:
(N) Setup > Receipts > Receivable Activity
Operating Unit Name Description Type Active
GL
Account
Source
Tax
Rate
Code
Source
Activity
GL
Account
Distribution
Set
Vision Operations
XX BANK
CHARGE
ADJ
XX BANK
CHARGE
ADJ Adjustment *
Activity
GL
Account None
01-740-
7870-
0000-
000
Vision Operations
XX Earned
Discount
XX Earned
Discount
Earned
Discount *
Activity
GL
Account None
01-410-
7825-
000
Page 26 of 38

Vision Operations
XX SELL
TREASURY
STOCK
XX SELL
TREASURY
STOCK
Miscellaneous
Cash *
Activity
GL
Account None
01-000-
1110-
0000-
000
Vision Operations
XX Receipt
Write-off
XX Receipt
Write-off
Receipt Write-
off *
Activity
GL
Account None
01-000-
7730-
0000-
000
17. Setup Receipt Sources:
(N) Setup > Receipts > Receipt Sources
Name XX MANUAL Description XX Manual Receipts Source
Receipt Source Type Manual Payment Method
Receipt Class Direct Receipt
Bank Account
Batch Numbering Automatic Last Number 99
Effective
Dates(From) 01-JAN-1951
Effective
Dates(To)
Page 27 of 38

18. Setup Receipt Class and Receipt method:
Receipt Class
Name XX RC-Man-NR-Direct XX RC-Man-Std-AutoClr
Creation Method Manual Manual
Notes Receivable
Require Confirmation
Remittance Method No remittance Standard
Clearance Method Directly By Auomatic Clearing
Receipt Method
Name XX Rec Meth XX Rec Meth-MSB
Printed Name XX Rec Meth
Effective Dates (From) 01-JAN-1951 1-Jan-51
Effective Dates (To)
Notes Receivable N N
Debit Memos Inherit Receipt
Numbers
<Remittance Banks>
Operating Unit Vision Operations Vision Operations
Bank Name Citibank Citibank
Branch Name West Side Branch West Side Branch
Account Name Citibank Westside-204 Citibank Westside-204
Currency USD USD
Minimum Receipt Amount
Risk Elimination Days
Clearing Days
Override Bank
Effective Dates (From) 1-Jan-51 1-Jan-51
Effective Dates (To)
Primary Yes Yes
GL Accounts
Cash 01-000-1110-0000-000 01-000-1110-0000-000
Receipt Confirmation 01-000-1210-0000-000
Remittance 01-000-1245-0000-000
Factoring
Short-term Debt
Bank Charges 01-740-7870-0000-000
Unapplied Receipts 01-000-1240-0000-000 01-000-1240-0000-000
Unidentified Receipts 01-000-1240-0000-000 01-000-1240-0000-000
On Account Receipts 01-000-1240-0000-000 01-000-1240-0000-000
Unearned Discounts Unearned Discount Unearned Discounts
Earned Discounts Earned Discount Earned Discounts
Claim Investigation Claim Investigation Claim Investigation
Page 28 of 38

19. Receipt Entry
19.1 Receipt Entry - No Remittance :
Create a transaction and complete the transaction. Refer to the chapter Creating a Transaction
Create a Receipt for the transaction
(N) Receipts > Receipts
If we create receipt with the amount specified and before application of the receipt the balance
would be transferred to Unidentified receipts as shown below
Receipt Method Your Receipt method
Receipt Number Enter a receipt number
Receipt Amount in USD
500
Receipt Type Standard
Transaction Number
Customer Alliance Systems
Number 1990
Click on Button Apply
Apply to 1000
Applied Amount 500
Save your work
After the application of receipt to a transaction the amount would be moved to applied status. View
balance on the transaction:
Page 29 of 38

19.1 Creating Miscellaneous receipts
Non invoice related revenue earned from investments, interest, refunds, stock sales etc can be
accounted by using Miscellaneous receipts
Receipt Method XX Rec Meth
Receipt Number Enter a receipt number
Receipt Amount in USD
100
Receipt Type Miscellaneous
Activity XX Miscellaneous Cash
Save your work
Page 30 of 38

19.2 Writing off
Create a transaction and complete (N) Transactions > Transactions
From Menu Actions> Adjust
In the adjustments window, select Activity name (this is a receivable activity that you have setup
earlier with a GL account attached to it. Enter type as Line, enter amount (negative if you want to
reduce the balance)
View the transaction after adjustment
Page 31 of 38

20.Printing Documents:
20.1 Printing of Statements
 Enter the Option, Customer name, Statement Cycle, Bucket, and Statement Date and choose
the standard messages you want to print in the bottom of the report and click Submit.
 Review the output of the request, Print it and send the statement to your customer
 We can add special message to print when the Statement has been printed and sent to
customer
(N) Print Documents> Statements
Page 32 of 38

20.2 Aging Buckets setup and printing
Run the concurrent request from Menu View> Requests
The output would appear as follows:
Page 33 of 38

Page 34 of 38

21. Period End Closing:
• At the end of each accounting period, you must complete the month-end closing process. The
first step towards period closure is to run the Run the revenue recognition program.
• Run the Create accounting program in final mode with Post journals to GL as Yes. Make sure
the journals are created and posted
A. Revenue Recognition
• The Revenue Recognition program identifies all new transactions and creates the revenue
distributions for those transactions. The distributions are created for all periods, even in
periods whose status is Not Open, using the rules associated with the transactions
(N) Control > Accounting > Revenue Recognition
Program Name Revenue Recognition
Parameters
Print Format: Summary
Commit Work: Yes
Submit the reqquest
Page 35 of 38

B. Create Accounting:
There are two ways to create Accounting:
Online Accounting for a single transaction and Create accounting off line (concurrent request)
for all transactions at a time.
B1. Online Accounting: Query the Transaction which needs to be accounted
(N) Transactions > Transactions
From Menu Tools > Create Accounting
We need to provide the required option such as Draft, Final Accounting or Accounting and Post to
GL
After the Accounting option is provided view the Accounting entries
From Menu Tools> View Accounting
Page 36 of 38

B2. Create accounting off line (Nightly job): From the Submit Requests window, run the create
Accounting program in either draft mode, if you want to review the results before you create the final
accounting, or final mode.
Page 37 of 38

C. Run Unposted Items report:
Run the unposted items concurrent request which would effect the period close. There should be no
items in this report so that we can close the period and open the next period.
From Menu > view> Concurrent request
Submit Unposted Items report and provide the following details:
Ledger Currency: USD
Start GL Date: 01-DEC-2008
End GL Date: 31-DEC-2008
Page 38 of 38

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