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Oracle Lease and Finance Management User's Guide
Release 12.1
Part Number E13583-05
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Receipt of Payments

This chapter covers the following topics:

Overview

With automated cash application processes you can respond to the multiple ways customers have arranged to remit payments easily, including lockbox, and electronic payment through direct debit, Automatic Clearing House (ACH) and credit cards. Use seeded cash application rules, or define your own, to automatically create receipts and apply them to billing charges quickly and accurately with minimal manual intervention. When exceptions occur, manage receipts manually to correct receipts and invoice balances quickly.

Create Receipts

Record and apply payments received to the appropriate billing charges either manually or automatically in Lease and Finance Management. When you create a receipt, capture receipt details that may include the payment amount, customer account, contract number, invoice number, invoice lines or consolidated invoice number migrated from prior releases.

Record the receipt of payment from multiple sources through alternative processes. When you have defined agreements with customers to remit payments automatically to your account through direct debit or ACH transfers, you can create the receipts automatically in Oracle Receivables. When customers make credit card payments to your account, you can also create the receipts automatically.

You may have agreements with third party commercial banks or agencies that collect lockbox payments on your behalf. When customers remit payments to the lockbox, the agency processes the payments and transmits files electronically to record the receipt in Oracle Receivables.

When customers remit payment by check or cash in the mail, you can either record the receipt individually or in a batch. In a batch of receipts, Lease and Finance Management captures batch ate, remittance bank, general ledger date and user defined attributes so you can:

Advance receipt- record prepayments, such as security deposits, to contracts before they are booked to ensure that prospects are serious about negotiating and signing contracts.

Apply Receipts

Once receipts are recorded, identify the invoice detail to match the payment to the appropriate billing charge. Define cash application rules in Lease and Finance Management to process receipt application automatically. Automatic receipt application is vital to efficient cash management and collections efforts and timely, accurate receipts management reduces costly reconciliation and adjustments. In Lease and Finance Management you can apply the following types of manual receipts to invoices or contracts:

Revenue recognition and accounting for the receipts process occurs in Receivables. Receipt accounting is based on accounting details defined in the Receivables Accounting Template.

Manage Exceptions

When customers remit payments with insufficient information to identify the correct billing charge, you can apply the receipt to On Account in Lease and Finance Management. When the details accompanying a payment are insufficient to identify a customer account, you can apply the receipt to an Unapplied account in Lease and Finance Management.

When account balance reconciliations require adjustments or when customers dispute balances, adjustments may be required to correct applied receipts. Unapply payments and then re-apply them to invoices. You can make the following changes to applied receipts:

View Receipts

Use extensive search criteria in Lease and Finance Management to search and view all receipts created in Oracle Receivables and Lease and Finance Management.

Create Receipts

You can create receipts using the following methods:

Manual Receipts

You can create receipts manually using the user interface in Lease and Finance Management. Lease and Finance Management lets you create individual receipts and in a batch.

Creating Batch Receipts

You can create receipts either against contracts or invoices with Auto Application in a batch.

To create and apply receipts in a batch, perform the following step:

  1. Create a batch and add receipt details to batch.

  2. Submit the batch.

  3. Process the batch.

Creating a Batch and Adding Receipt Details to a Batch

To create a batch, perform the following tasks:

  1. In the Batch Receipts page, click Create Batch.

  2. Enter the batch details.

  3. Enter the receipt details for each receipt in the batch as described in the Create Batch Receipt Field Descriptions table.

  4. Click Apply to save the batch.

Note: By default the batch status is set to Working. Keep the batch status to Working if you need to add more receipts to the batch later.

Create Batch Receipt Field Descriptions
Field Description
Operating Unit Operating unit assigned to the record.

Note: The list of values includes operating units assigned to the MO: Security profile.

Batch Name Batch Name
Batch Total Batch Total
Batch Date Batch Date
GL Date GL Date
Currency This can be either the ledger currency or the contract currency. If your receipt currency is the same as the ledger currency of your organization, you can ignore the currency conversion fields.
Receipt Method To process payments.
Remittance Bank Name Bank name to remit payments.
Remittance Bank Account Bank account to remit payments.
Currency Conversion Type If your receipt currency is not the same as the ledger currency of your organization, select the currency conversion type.
Currency Conversion Rate If you selected User as the Currency Conversion Type, enter the currency conversion rate.
Currency Conversion Date If you selected a value other than User as the Currency Conversion Type, enter the currency conversion date. This date enables Lease and Finance Management to determine the appropriate currency conversion rate for the currency conversion type you selected.
Status Batch Status

Submitting a Batch

Once you complete the entry of all receipts for a batch, change the batch status to Submit and click Apply. On submission of a batch, Lease and Finance Management compares the batch total entered by you at header level with the total of receipt amount for all the receipts in the batch. If these totals match, Lease and Finance Management submits the batch and makes it available for processing. If the totals do not match, Lease and Finance Management displays an error and does not submit the batch.

Important: Once Submitted, you cannot change the batch details, receipt details, and add or remove receipt details.

Processing Batch Receipts

Lease and Finance Management processes batch receipts by auto applying receipts based on the cash application rule. Only batch receipts with Submitted status is processed.

To process the submitted batch, perform the following tasks:

  1. Log on to Lease and Finance Management using Lease Administrator responsibility.

  2. Run the Concurrent Cash Application program.

On submission, Lease and Finance Management processes each batch with status submitted, or resubmitted for the selected operating unit. The Concurrent Cash Application checks for the following:

  1. Validates the batch and receipt details.

  2. If all the details are valid for the batch, Lease and Finance Management creates the receipts and auto applies receipt to invoices based on the cash application rule. See: Auto Application.

  3. Changes the status to Process.

  4. Even if one or more details are not valid, Lease and Finance Management does not process the batch and changes the status to Errored. You can correct the errored batch and resubmit the same for processing.

Note: The receipt entered in a batch are created only after processing. Before processing, you cannot update the receipts entered as a part of batch. When you search for receipts in Oracle Receivables or Oracle Lease and Finance Management, only the processed receipts are available.

Important: Lease and Finance Management creates individual receipts in Oracle Receivables even for receipts created as a part of batch and does not create batches in Oracle Receivables.

Correcting and Resubmitting Batches with Error

You can rectify the batches with error and resubmit them. Resubmitted batches are processed again by the Concurrent Cash Application program.

To rectify and resubmit a batch with error, perform the following tasks:

  1. On the Batch Receipts page, search for the batches and click Update.

  2. On the Update Batch page, Lease and Finance Management displays error message against receipts with invalid data.

  3. Based on the error, you update either batch details or receipt details with valid details.

  4. When navigate to the Update Batch page, the status of the batch is changed from Errored to Error Correction.

  5. Once you update the details for all the errors, change the batch status to Resubmit and click Apply.

  6. The batch is now available for processing.

Creating Individual Receipts

You can create Unapplied, On Account, Unidentified, Advance, or Applied receipt using the Create Receipts page. In case of applied receipt, you can also use Auto Application. To use auto application, you must create receipt against a specific invoice or a contract.

To create a receipt, complete the following tasks:

  1. In the Search Receipts page, click Create Receipt.

  2. Enter the receipt details. Refer to the Create Receipts Field Descriptions table for the field descriptions.

  3. Select the cash application criteria to apply the receipt amount to the invoices.

  4. Click Apply.

    Based on the selected cash application criteria, Lease and Finance Management performs the following:

The following table describes the fields on the Create Receipts page.

Create Receipts Field Descriptions
Field Description
Operating Unit Operating unit assigned to the record.

Note: The list of values includes operating units assigned to the MO: Security profile.

Receipt Number The identification number of a payment, such as a check number.
Receipt Date Specify the Receipt date for payment.
GL Date Specify the GL date for receipt.
Receipt Amount Amount of the receipt.
Receipt Currency Currency of the receipt.
Receipt Method To process payments.
Remittance Bank Name Bank name to remit payments.
Remittance Bank Account Bank account to remit payments.
Customer Name Name of the customer.
Customer Bank Name Name of the customer's bank
Customer Bank Account Customer Account number
Currency Conversion Type If your receipt currency is not the same as the ledger currency of your organization, select the currency conversion type.
Currency Conversion Rate If you selected User as the Currency Conversion Type, enter the currency conversion rate.
Currency Conversion Date If you selected a value other than User as the Currency Conversion Type, enter the currency conversion date. This date enables Lease and Finance Management to determine the appropriate currency conversion rate for the currency conversion type you selected.
Criteria Select the application criteria for receipt. If you select contract number or Advance as application criteria, then specify the contract number against which the payment is received. If you select Invoice as application criteria, then specify the contract number against which the payment is received.
Flexfield Lease and Finance Management captures the user-defined information based on the definition of Descriptive FlexField (DFF) "Receipt Information". You can create user-defined information based on the DFF functionality to store additional information.
See:Descriptive Flexfields, Oracle Receivables Implementation Guide

Creating Advance Receipts

Lease and Finance Management allows you to create advance receipts against booked or unbooked contracts. You can also specify the stream types against which an advance payment is received.

When you create an advance receipt, Lease and Finance Management redirects you to Receipt Allocation page by clicking Apply on the Create Receipt page.

On the Receipt Allocation page, optionally you can specify the stream types and amount received against each stream type.

You can generate invoices against advance receipt through the Advance Billing process. The Advanced Billing process generates invoices based on advanced receipts and are then applied to these invoices automatically. The Automatic Cash application is based on Receipt Allocation. If there is no receipt allocation defined for the receipt, then the receipt application will be based on the CAR. See: Auto Cash application.

Note: If the advance receipt is against unbooked contract, you can generate invoices through advance billing only after the contract is booked.

Creating and Applying Receipts using Autolockbox

AutoLockbox is a facility that Oracle Receivable provides you to eliminate manual data entry by automatically processing receipts that are sent directly to your bank.

Note: Creating and applying lockbox receipts is an automatic procedure that occurs in Oracle Receivables.

The standard Autolockbox procedure is a three step process:

See: Using AutoLockbox, Oracle Receivables User Guide.

Oracle Receivables does not provide for auto cash application based on stream type or at line level. Lease and Finance Management extended the Auto Cash application to provide the cash application based on Lease specific Cash Application Rule (CAR) and cash application at line level.

To use the Lease and Finance Management Auto Cash application, set the Line Level Cash application to Oracle Lease and Finance Management while setting up AutoLockbox in Oracle Receivables. When you process AutoLockbox in Oracle Receivables, it uses the cash application logic provided by Lease and Finance Management if the line level cash application is set to Oracle Lease and Finance Management.

See: Lockboxes, Oracle Receivables Implementation Guide

Lease and Finance Management Cash Application Process

Lease and Finance Management first checks whether the receipt is against the Leasing related invoice, contract, or termination quote. For this Lease and Finance Management uses the reference number provided in the Lockbox, field types Invoice 1, Invoice 2, ... in the record type overflow payment.

Lease and Finance Management validates the following:

Applying Cash Based on Receipt Mismatch Rule

The Receipt Mismatch Rule is meant only to process lockbox receipts. The following three options apply to defining the Receipt Mismatch Rule:

Lease and Finance Management identifies the Receipt Mismatch Rule from the default cash application rule at the operating unit level. The Receipt Mismatch Rule determines whether the mismatch rule was created. When the Receipt Mismatch Rule is set up to apply mismatched receipts to On Account, Lease and Finance Management ignores the BLANK value set for the receipt mismatch rule and continues to process receipts.

Termination Quote Processing

Lease and Finance Management checks the following:

Creating Automatic Receipts

You can use the Automatic Receipts feature of Oracle Receivables to automatically generate receipts for customers with whom you have defined payment agreements, such as payments through direct debit.

See: Creating Automatic Receipts, Oracle Receivables User Guide

See: Creating Remittance Batches, Oracle Receivables User Guide

Auto Cash Application

When you create a receipt against an invoice or a contract , Lease and Finance Management applies the receipt automatically using the Cash Application Rule (CAR).

For automatic application, you must set up at least one cash application rule for an operating unit and make it a default cash application rule. It is important that all the billable stream types in the contracts covered by the invoice are defined in the appropriate cash application rule.

See: Define Cash Application Rules, Oracle Lease and Finance Management Implementation Guide

Identifying Invoice Lines for Auto Application

Each open line, having balance greater than zero, related to reference object is considered as Auto Application if the reference object is Lease and Finance Management related AR invoice or Contract.

Identifying Cash Application Rule

Applying Cash to Invoice Line Based on the Cash Application Rule

You can apply Cash to an invoice line based on CAR. To apply Cash, perform the following tasks:

Search and View Receipts

In Lease and Finance Management, you can search for receipts created from all sources including Lockbox and manual receipts in either Receivables or Lease and Finance Management. You can also view and update receipt applications for all the receipts in Lease and Finance Management.

Lease and Finance Management provides a simple and an advanced search for receipts. Once you search the receipt, you can view the receipt and receipt application details by clicking the receipt number.

You can view the receipt application details either in a details mode or a summary mode. In the detail mode, Lease and Finance Management displays the line details and application amount for each invoice line to which the receipt is applied. In the summary mode, Lease and Finance Management groups the receipt application by stream and displays stream type and amount applied to the stream type.

Important: You can view the search results at stream type level. By default, the view is the Summary mode. In this mode the invoice lines are grouped by streams. In the Detail mode, all the streams are grouped together.

You can decide the default view mode. Set the OKL: Number of Receipt Applications to Default Summary View profile option to the Default Summary view. If the number of receipt application line is equal to or more than the value set for this option, the default view mode is Summary otherwise it is Detail.

Updating Receipts

In Lease and Finance Management, you can:

Updating Unidentified Receipts

You can add customer details to an unidentified receipt by updating the receipt. When you add customer details to an unidentified receipt, Lease and Finance Management changes the receipt from unidentified receipt to unapplied receipt.

To add customer details to unidentified receipt:

  1. Navigate to the Receipts page.

  2. Search for the receipt.

  3. Click a receipt number to navigate to the Receipt Details page.

  4. Click Update.

    Note: If the receipt is an unidentified receipt, Lease and Finance Management redirects you to the Update Receipt page.

  5. Add the customer details.

Updating Receipt Application

You can update the following receipts:

Fully unapplied or On Account receipt: You can add receipt application details by adding invoice lines to apply receipt to.

Partially or Fully applied receipt: Add receipt application, unapply existing receipt application, change the applied amount for existing receipt application, change on account amount or application GL date.

Update receipt applications by creating receipt applications to unapplied or on account receipt or change receipt application for already applied (fully or partially applied) receipts. You can change the application amount for existing application, unapply the existing application and add new invoice lines for application.

You can add new invoice lines and fully apply the amount or manually enter the amount to apply to the invoice. You can update the application in either the Summary or the Detail view.

To update receipt applications:

  1. Navigate to the Receipts page.

  2. Search for the receipt.

  3. Click a receipt number to navigate to the Receipt Details page.

  4. Click Update.

    Note: If the receipt is neither an unidentified nor an advance receipt, Lease and Finance Management redirects you to the Update Receipt Application page.

  5. You can update the receipt application either at summary level or detail level.

Updating Receipt Applications at Detail Level

To update receipt application at the detail level, set the view mode to Detail on the Update Receipt Application page.

Adding Invoice Lines to Apply Receipt To

To add invoice lines, perform the following steps:

  1. Navigate to the Cash Application page.

  2. Click Add Invoice Lines.

    Note: Lease and Finance Management displays the list of invoices lines having an open balance that matches the search criteria you entered.

  3. Select one or more invoice lines to apply a receipt to and click Add.

  4. Lease and Finance Management adds the invoice lines to receipt application with zero applied amount.

  5. Enter the amount to be applied against each invoice line.

    Note: If you want to fully apply one or more invoice lines, select those invoice lines and click Fully Apply.

Unapply Receipt Application

To unapply receipt applications:

  1. To unapply receipt application, set the applied amount for receipt application line to zero.

  2. Select the lines and click Unapply.

Update Existing Receipt Application

To update existing receipt application, change applied amount and/or GL date.

Note: Invoice line consists of line amount and tax amount. The total of line amount and tax amount is line total. You can apply receipt to invoice line either at the Line total level or at the line amount and tax amount level. When you apply receipt at line total level, Lease and Finance Management derives the applied amount for line and tax by prorating the applied amount. To prorate the outstanding line amount and outstanding tax amount is taken as base. To apply amount at line total level select Line Total in apply to field. To apply amount for line and tax separately select Line amount and Tax in apply to field.

Once you complete the above, click Apply.

The receipt balances displayed on the Update page are not updated automatically based on changes. To view the updated balance based on changes, click Recalculate to refresh the balances on the page. Click Apply to save the changes.

Updating Receipt Applications at Summary Level

To update receipt application at Summary level set the view mode on update receipt application page to Summary. In the Summary view mode, you can update the receipt application at the stream level. The process of adding invoice lines, fully applying or unapplying the receipt amount is similar to that in the 'Detail' view mode. You can Fully apply or Unapply the receipt amount at the invoice line level and not at the stream level.

Add Invoice Lines to Apply Receipt To

You can add invoice lines in the Cash Application page. The steps to be followed to add invoice lines in summary mode is same as in detail mode. When you add invoice lines in summary mode, Lease and Finance Management groups the added invoice lines by stream type and currency. If the receipt application already exists for a combination of stream type and currency, then Lease and Finance Management adds the selected invoice lines to the existing summary line. If the receipt application does not exists for a combination of stream type and currency, then Lease and Finance Management adds the summary line.

You can enter the applied amount either at the summary or invoice line level. You can also enter the applied amount separately for the line and tax both at the summary or invoice line level.

When you enter the applied amount at the summary level, Lease and Finance Management prorates the applied amount to each invoice line related to summary lines based on the outstanding balance of an invoice line.

Unapply Receipt Application

To unapply receipt application at the summary level, set the applied amount at summary level to zero. Lease and Finance Management unapplies the receipt application to all invoices lines associated to the summary line.

Update Existing Receipt Application

To update the existing receipt application, change the applied amount at summary level or invoice line level within specific group of stream. If you update the amount at summary level, then the updated amount is prorated for each invoice line for a stream based on the outstanding balance.

The applied amount can be entered or updated at the summary level or invoice line level. You can also enter the applied amount for the line total or line and tax separately. You have to select the appropriate option in Apply To to update or enter the applied amount. Following are the options.

Updating Advance Receipt Allocation

To update the advance receipt allocation.

  1. Search the receipt.

  2. Navigate to the Receipt Details page.

  3. Click Update. When receipt is created as an advance receipt and yet not applied to any invoice lines, Lease and Finance Management redirects you to the Update Receipt Allocation page. Even if the receipt is created as an advance receipt but already applied to invoice lines, you can not update the receipt allocation. For such receipts, Lease and Finance Management redirects you to the update receipt application page.

  4. On the Update Receipt Allocation page, you can change the already allocated amount to stream types or add stream types to allocate receipt amount.

Receipt Reapplication

Lease and Finance Management allows mass application of unapplied or on account balances of receipts for a customer to invoices with open balances for the same customer through the following two Receipt Reapplication programs. Lease and Finance Management uses auto cash application for this.

Receipts Application

If the input parameter is Contract Number:

If the input parameter is Customer Number then Lease and Finance Management selects all the contracts with open balance. For each contract:

Reapplication with Contract

If the input parameter is Contract Number then Lease and Finance Management ignores other input parameter and performs receipt application as follows:

If the input parameter is Customer Number and Receipt Type is Advance then Lease and Finance Management selects all the contracts with open balance. For such contracts:

If the input parameter is Customer Number and Receipt Type is All, then Lease and Finance Management selects all the contracts with open balance.

Cross Currency Receipt Application

When your customer remits payment for an invoice, the receipt is usually in the same currency as the transaction. However, there may be times when your customer remits payment in a currency that is different than the currency of the open debit item. For these occasions, Receivables lets you create cross currency receipt applications to let you fully or partially process the payment.

See: Cross Currency Receipts, Oracle Receivables

For Leasing related receipts and invoices, cross currency application is possible when you create or apply receipt through:

  1. AutoLockbox: For the cross currency receipt application using auto lockbox, see Applying Cross Currency Receipts, Oracle Receivables User Guide.

  2. Manual Receipt through User Interface with Auto Application: If you create a receipt with the application criteria as contract number or an invoice number, and select the contract or invoice with a currency other than the receipt currency, then Lease and Finance Management creates the cross currency receipt application.

  3. Batch Receipt: When you select an invoice or contract having different currency than batch currency, then Lease and Finance Management creates the cross currency receipt application.

  4. Advance Receipt Application: If you create an advance receipt in currency other than the contract currency during advance billing program, Lease and Finance Management creates the cross currency receipt application.

  5. Receipt Reapplication: If you select to create cross currency receipt application while mass applying the receipts to open invoices through receipt reapplication program, Lease and Finance Management may create cross currency application. During Receipt reapplication, Lease and Finance Management first applies the receipt to invoices with the same currency as receipt currency. However, after applying receipts to invoices of the same currency, if there are receipts with unapplied or onaccount balance in one currency and invoice with open balance in other currency, Lease and Finance Management creates cross currency receipt application.

  6. Manual Receipt Application: Lease and Finance Management allows you to create cross currency application manually. You can select invoice lines with currency other than receipt currency manually and apply the receipt to the selected invoice lines. In case of cross currency receipt application, you can enter the applied amount in the invoice currency. Lease and Finance Management derives the receipt amount allocated based on cross currency exchange rate.

In all of the above options, by default Lease and Finance Management uses Cross Currency Rate Type defined in the Oracle Receivables system option and receipt date to determine the exchange rate to apply cross currency receipts and derive allocated amount in the receipt currency.

You can update the default exchange rate used for the cross currency application. To update the exchange rate:

  1. Navigate to the Update Receipt Application page.

    See: Update Recipts

  2. Click Cross Currency Rate.

  3. On the Update Exchange Rate page, the cross currency receipt application lines is displayed grouped by the invoice number.

  4. Update the exchange rate at the invoice level.

Lease and Finance Management recalculates the receipt allocation amount in the receipt currency and receipt balances based on the updated exchange rate.