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Oracle® Fusion Applications Project Management Implementation Guide
11g Release 1 (11.1.2)
Part Number E20384-02
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16 Common Project Configuration: Define Common Project Billing Configuration

This chapter contains the following:

Manage Intercompany Balancing Rules and Ledger Balancing Options

Define Invoicing Options

Define Transaction Types

Define Transaction Sources

Manage Intercompany Balancing Rules and Ledger Balancing Options

Intercompany Balancing Rules: Explained

Intercompany balancing rules are used to generate the accounts needed to balance journals that are out of balance by legal entity or primary balancing segment values.

You specify the intercompany receivables and intercompany payables accounts you want to use. The intercompany balancing feature then uses these rules to generate the accounts of the balancing lines it creates.

Defining Intercompany Balancing Rules

You can define intercompany balancing rules at the following rule levels:

  1. Primary balancing segment

  2. Legal entity

  3. Ledger

  4. Chart of accounts

The rules are evaluated in the order shown above. For example, you can define a Primary Balancing Segment rule and a Legal Entity level rule. If both rules are used to balance a particular journal, the Primary Balancing Segment rule is used, as it has a higher precedence.

You have flexibility in defining your intercompany balancing rules. You can have a simple setup in which you define one rule for your chart of accounts. This rule is used for all intercompany balancing for all ledgers that use this chart of accounts. Alternatively, you can have a more granular set of rules. For example, you can define a different rule for each legal entity and one chart of accounts rule to cover any gaps in your rule definitions. You can gain even more granularity by defining rules for specific journal and/or category combinations or intercompany transaction types.

Intercompany Balancing Rules: Examples

This topic provides examples of intercompany balancing rules and the intercompany balancing lines generated. These rules are used to generate the accounts needed to balance journals that are out of balance by legal entity or primary balancing segment values.

Scenario

Simple Chart of Accounts

In this scenario the enterprise has one chart of accounts for all its ledgers. The chart of accounts has an intercompany segment. They are using this intercompany segment and the company segment to identify the intercompany trading partners for each transaction. They do not have a need to track their intercompany activity at a granular level such as by journal source and journal category or by intercompany transaction type.

Setup


Segment Qualifier

Primary Balancing Segment

Second Balancing Segment

Third Balancing Segment

Account

Intercompany Segment

Segment Name

Company

(CO)

Cost Center

(CC)

Product

(PROD)

Account

(ACCT)

Intercompany

(IC)


Ledger

Legal Entity

Primary Balancing Segment Value

InFusion USA

InFusion Farms

3100, 3200, 3300, 3400, 3500

InFusion USA

InFusion Textiles

4000

InFusion USA

InFusion Products (East)

5000

InFusion USA

InFusion Products (West)

6000

InFusion USA

 

1000, 9000


Rule Number

Chart of Accounts

AR Account

AP Account

Source

Category

Transaction Type

1

InFusion USA Chart of Accounts

1000 - 000 - 0000 - 13010 - 0000

1000 - 000 - 0000 - 21010 - 0000

Other

Other

None


Line

Line Type

Legal Entity

CO

CC

PROD

ACCT

IC

Debit

Credit

1

Expense

InFusion Farms

3100

100

1200

52330

0000

150

 

2

Liability

InFusion Textiles

4000

500

1300

40118

0000

 

150


Uses Rule

Line

Line Type

Legal Entity

Company

Cost Center

Product

Account

Intercompany

Debit

Credit

 

1

Expense

InFusion Farms

3100

100

1200

52330

0000

150

 

 

2

Liability

InFusion Textiles

4000

500

1300

40118

0000

 

150

1

3

IC AP

InFusion Farms

3100

100

1200

21010

4000

 

150

1

4

IC AR

InFusion Textiles

4000

500

1300

13010

3100

150

 

Scenario

Legal Entity and Chart of Accounts Rules

In this example the legal Entity InFusion Textiles intercompany manufacturing activities are tracked separately from its non-manufacturing activities. In order to achieve this legal entity level rules are defined specifically between the legal entity InFusion Textiles and the two manufacturing legal entities, InFusion Products (East) and InFusion Products (West). A chart of accounts rule is created to cover all other intercompany activities.

Setup


Segment Qualifier

Primary Balancing Segment

Second Balancing Segment

Third Balancing Segment

Account

Intercompany Segment

Segment Name

Company

Cost Center

Product

Account

Intercompany


Ledger

Legal Entity

Primary Balancing Segment Value

InFusion USA

InFusion Farms

3100, 3200, 3300, 3400, 3500

InFusion USA

InFusion Textiles

4000

InFusion USA

InFusion Products (East)

5000

InFusion USA

InFusion Products (West)

6000

InFusion USA

 

1000, 9000


Rule Number

Chart of Accounts

AR Account

AP Account

Source

Category

Transaction Type

2

InFusion USA Chart of Accounts

1000 - 000 - 0000 - 13050 - 0000

1000 - 000 - 0000 - 21050 - 0000

Other

Other

None


Rule No.

From Legal Entity

To Legal Entity

AR Account

AP Account

Source

Category

Transaction Type

3

InFusion Textiles

InFusion Products (West)

1000 - 000 - 0000 - 13020 - 0000

1000 - 000 - 0000 - 21020 - 0000

Other

Other

None

4

InFusion Textiles

InFusion Products (East)

1000 - 000 - 0000 - 13030 - 0000

1000 - 000 - 0000 - 21030 - 0000

Other

Other

None


Line

Line Type

Legal Entity

CO

CC

PROD

ACCT

IC

Debit

Credit

1

Expense

InFusion Farms

3100

100

1200

52330

0000

150

 

2

Expense

InFusion Products (East)

5000

100

1200

52340

0000

200

 

3

Expense

InFusion Products (West)

6000

200

1300

52345

0000

300

 

4

Liability

InFusion Textiles

4000

500

1300

40118

0000

 

650


Uses Rule

Line

Line Type

Legal Entity

CO

CC

PROD

ACCT

IC

Debit

Credit

 

1

Expense

InFusion Farms

3100

100

1200

52330

0000

150

 

 

2

Expense

InFusionProducts (East)

5000

100

1200

52340

0000

200

 

 

3

Expense

InFusionProducts (West)

6000

200

1300

52345

0000

300

 

 

4

Liability

InFusion Textiles

4000

500

1300

40118

0000

 

650

2

5

IC AR

InFusion Textiles

4000

500

1300

13050

3100

150

 

2

6

IC AP

InFusion Farms

3100

100

1200

21050

4000

 

150

4

7

IC AR

InFusion Textiles

4000

500

1300

13030

5000

200

 

2

8

IC AP

InFusionProducts(East)

5000

100

1200

21050

4000

 

200

3

9

IC AR

InFusion Textiles

4000

500

1300

13020

6000

300

 

2

10

IC AP

InFusionProducts (West)

6000

200

1300

21050

4000

 

300

Defining Ledger Balancing Options: Explained

Ledger balancing options are defined for the ledger to balance the second balancing segment and/or the third balancing segment, when a transaction is unbalanced by one of these segments.

Ledger balancing options include the following settings:

Receivables and Payables Accounts used for Ledger Balancing

You can choose to specify the receivables and payables accounts to be used, if your chart of accounts has the second balancing segment and/or the third balancing segment enabled. These accounts are used for the balancing lines generated when a journal is balanced by its primary balancing segment values but is not balanced by its second balancing segment and/or third balancing segment.

Summarization Options

You can choose to summarize balancing lines generated for a primary balancing segment out of balance scenario, where all the primary balancing segment values are assigned to the same legal entity. You do this by specifying the Summarization option of Summary Net or Detail. You can choose to summarize by primary balancing segment value or alternatively have individual balancing lines (that have not been summarized) generated. Note that summarization always applies to balancing lines generated in a cross legal entity scenario.

Clearing Company Options

You can choose to set clearing company options to balance a journal with different primary balancing segment values that all belong to a single legal entity. Set the following options to handle your clearing company balancing.

Defining Ledger Balancing Options: Examples

This topic provides examples of ledger balancing options, the setup required, and the journal before and after balancing.

Scenario

Simple ledger balancing option with no clearing company options

In this scenario the enterprise has the second balancing segment and the third balancing segment enabled for its chart of accounts. The journal is balanced by primary balancing segment but is out of balance by the second balancing segment and the third balancing segment.

Setup


Segment Qualifier

Primary Balancing Segment

Second Balancing Segment

Third Balancing Segment

Account

Intercompany Segment

Segment Name

Company

CO

Cost Center

CC

Product

PROD

Account

ACCT

Intercompany

IC


Ledger

Legal Entity

Primary Balancing Segment Value

InFusion USA

InFusion Farms

3100, 3200, 3300, 3400, 3500

InFusion USA

InFusion Textiles

4000

InFusion USA

InFusion Products (East)

5000

InFusion USA

InFusion Products (West)

6000

InFusion USA

 

1000, 9000


Rule Number

Ledger

Source

Category

Transaction Type

AR Account

AP Account

1

InFusion USA

Other

Other

None

1000 - 000 - 0000 - 13010 - 0000

1000 - 000 - 0000 - 21010 - 0000


Line

Line Type

Legal Entity

CO

CC

PROD

ACCT

IC

Debit

Credit

1

Expense

InFusion Farms

3100

100

1200

52330

0000

150

 

2

Liability

InFusion Farms

3100

500

1300

40118

0000

 

150


Uses Rule

Line

Line Type

Legal Entity

CO

CC

PROD

ACCT

IC

Debit

Credit

 

1

Expense

InFusion Farms

3100

100

1200

52330

0000

150

 

 

2

Liability

InFusion Farms

3100

500

1300

40118

0000

 

150

1

3

AP

InFusion Farms

3100

100

1200

21010

0000

 

150

1

4

AR

InFusion Farms

3100

500

1300

13010

0000

150

 

Scenario

Ledger balancing options with detail summarization and clearing company options set

In this scenario the enterprise has the second balancing segment and the third balancing segment enabled for its chart of accounts. Management has decided to use a clearing company for balancing Many-to-Many journals only. Since the primary balancing segment values in the journal are out of balance intercompany balancing is required. Additionally since clearing company options have been specified they will be used to balance the journal. Note that if the primary balancing segment values were balanced and only the second balancing segment and the third balancing segment were out of balance, the clearing company options would not be used.

Setup


Segment Qualifier

Primary Balancing Segment

Second Balancing Segment

Third Balancing Segment

Intercompany Segment

Segment Name

Company

Cost Center

Product

Account

Intercompany


Ledger

Legal Entity

Primary Balancing Segment Value

InFusion USA

InFusion Farms

3100, 3200, 3300, 3400, 3500

InFusion USA

InFusion Textiles

4000

InFusion USA

InFusion Products (East)

5000

InFusion USA

InFusion Products (West)

6000

InFusion USA

 

1000, 9000


Rule Number

Chart of Accounts

AR Account

AP Account

Source

Category

Transaction Type

1

InFusion USA Chart of Accounts

1000 - 000 - 0000 - 13050 - 0000

1000 - 000 - 0000 - 21050 - 0000

Other

Other

None


Rule Number

Ledger

Source

Category

Transaction Type

AR Account

AP Account

2

InFusion USA

Other

Other

None

1000 - 000 - 0000 - 13010 - 0000

1000 - 000 - 0000 - 21010 - 0000


Rule Number

Ledger

Source

Category

Transaction Type

Condition

Source

Value

2

InFusion USA

Other

Other

None

Use for many-to-many journals only

Default clearing balancing segment value

9000

Note

The Ledger Balancing Options and Clearing Company Options appear as one line on the form.


Line

Line Type

Legal Entity

CO

CC

PROD

ACCT

IC

Debit

Credit

1

Expense

InFusion Farms

3100

100

1200

52330

0000

150

 

2

Expense

InFusion Farms

3100

300

1200

52340

0000

200

 

3

Expense

InFusion Farms

3300

200

1300

52345

0000

300

 

4

Liability

InFusion Farms

3400

500

1300

40118

0000

 

320

5

Liability

InFusion Farms

3500

600

1400

40112

0000

 

330


Uses Rule

Line

Line Type

Legal Entity

CO

CC

PROD

ACCT

IC

Debit

Credit

 

1

Expense

InFusion Farms

3100

100

1200

52330

0000

150

 

 

2

Expense

InFusion Farms

3100

300

1200

52340

0000

200

 

 

3

Expense

InFusion Farms

3300

200

1300

52345

0000

300

 

 

4

Liability

InFusion Farms

3400

500

1300

40118

0000

 

320

 

5

Liability

InFusion Farms

3500

600

1400

40112

0000

 

330

1

6

IC AR

 

9000

000

0000

13050

3100

150

 

1

7

IC AP

 

3100

100

1200

21050

9000

 

150

1

8

IC AR

 

9000

000

0000

13050

3100

200

 

1

9

IC AP

 

3100

300

1200

21050

9000

 

200

1

10

IC AR

 

9000

000

0000

13050

3300

300

 

1

11

IC AP

 

3300

200

1300

21050

9000

 

300

1

12

IC AR

 

3400

200

1300

13050

9000

320

 

1

13

IC AP

 

9000

000

000

21050

3400

 

320

1

14

IC AR

 

3500

600

1400

13050

9000

330

 

1

15

IC AP

 

9000

000

000

21050

3500

 

330

Define Invoicing Options

Invoice Options: Critical Choices

Invoice options are settings and default values that control how Oracle Fusion Payables processes invoices for a business unit. You can specify options for the following invoice areas on the Manage Invoice Options page:

Invoice Entry and Matching

This table lists the options you can set for invoice entry and matching.


Option

Description

Require invoice grouping

Requires that you enter the name of a group when creating an invoice.

Allow document category override

Allows override of the document category that is automatically assigned to an invoice if the Sequential Numbering Enforced profile is set to Partially Used or Always Used. If the profile is set to Not Used, the application does not assign a document category to an invoice, and you cannot set this option or enter a document category for an invoice.

Allow adjustments to paid invoices

Lets you cancel or add lines to paid invoices. In addition, you can unmatch an invoice from a purchase order that is not finally matched, and match the invoice to a different purchase order. You cannot modify distributions because it would affect the accounting.

Recalculate invoice installments

Recalculates installments during the invoice validation process.

Receipt acceptance days

Specifies the number of days added to the Goods Received date when recalculating installments.

Accounting date basis

Provides the basis for the default accounting date. If you select Goods received or invoice date, and the invoice does not have a date for goods received, then the application uses the invoice date as the default accounting date. If you select Goods received or system date, and the invoice does not have a date for goods received, then the application uses the system date as the default accounting date.

Allow final matching

Lets you perform a final match when you match an invoice to a purchase order, or when you adjust a matched invoice distribution. You cannot perform a final match when matching invoices to receipts.

Allow matching distribution override

Allows override of the invoice distribution created from matching an invoice to a purchase order.

You cannot override the distribution for a matched invoice if you accrue at receipt. In addition, you cannot override the distribution if the purchase order is projects-related, and the item destination for the purchase order distribution is inventory.

Transfer PO distribution additional information

Transfers descriptive flexfield information from the purchase order distribution to the invoice distribution when you match an invoice to a purchase order. If you enable this option, make sure that the flexfield structure is the same for the purchase order distributions and the invoice distributions.

In addition to the options previously listed, you can specify default values for the following attributes on both the Manage Invoice Options page and on the supplier setup. Payables uses the default values from the Manage Invoice Options page, unless you specify a different value for the supplier.

Discounts

This table lists the options you can set for discounts. You can also set these options on the supplier setup, except for Discount Allocation Method. The values for these options on the supplier setup are: Yes, No, Default from Payables Options.


Option

Description

Exclude tax from calculation

Subtracts the tax amount from the invoice amount during invoice entry, when calculating the discountable amount for an installment. If you enable this option, you cannot select a Discount Allocation Method of Tax lines and single distribution.

Exclude freight from calculation

Subtracts the freight amount from the invoice amount during invoice entry, when calculating the discountable amount for an installment.

Discount allocation method

Allocates discounts across distributions.

Always take discount

Takes the available discount for a supplier, regardless of when you pay the invoice.

Prepayments

This table lists the options you can set for prepayments.


Option

Description

Payment terms

Represents default payment terms. For example, you may want to have immediate payment terms for all prepayment type invoices.

Settlement days

Specifies the number of days to add to the system date to calculate the default settlement date for a prepayment. You cannot apply a prepayment to an invoice until on or after the settlement date.

You can also set this option on the supplier setup. The value for the supplier setup determines if this option is used.

Use distribution from purchase order

Builds the distribution combination for the matched invoice distribution by taking the purchase order distribution combination and overriding the natural account segment with the one from the supplier site prepayment distribution or, if not defined, from the common options prepayment distribution.

Show available prepayments during invoice entry

Displays the number and amount of available prepayments during invoice entry.

Approvals

You can use the invoice approval workflow to automate your invoice approval process. The workflow determines if an invoice requires approval, and if so, automatically routes the invoice to the applicable approvers who then approve or reject the invoice.

This table lists the options you can set for the invoice approval process.


Option

Description

Enable invoice approval

Processes invoices through the approval workflow. The approval workflow is automatically initiated for payment requests and self-service invoices that are created in Oracle Fusion Supplier Portal and not matched to a purchase order.

Require validation before approval

Processes only invoices that are validated. Enable this option if you need the invoice validation process to create tax distributions for an invoice before approvers review it. Payment requests and self-service invoices created in Supplier Portal that are not matched to a purchase order always require approval before validation, regardless of the option selected.

Require accounting before approval

Processes invoices that are accounted.

Allow force approval

Allows managers to override the workflow and manually approve invoices. For example, you might want to force approval of an invoice if the invoice approval workflow does not complete, or if you have authority to pay an invoice without using the workflow process.

Interest

This table lists the options you can set for interest on overdue invoices.


Option

Description

Create interest invoices

Calculates interest on overdue invoices and creates interest invoices. You can also set this option on the supplier setup. The values for this option on the supplier setup are: Yes, No, Default from Payables Options.

Minimum interest amount

Minimum amount of calculated interest below which an interest invoice is not created.

Interest allocation method

Allocates interest across distributions.

Interest expense distribution

Distribution combination used if allocating interest expense to a single distribution.

Payment Requests

You can specify the following default values for a payment request:

Self-Service Invoices

This table lists the options you can set for invoices created in Supplier Portal.


Option

Description

Limit invoice to single purchase order

Limits an invoice to the schedules belonging to a single purchase order.

Allow invoice backdating

Allows a supplier to enter an invoice for a date in the past.

Allow unit price change for quantity-based matches

Allows a supplier to enter a unit price on the invoice that is different from the unit price on the purchase order.

Invoice Installments: How They Are Recalculated

During invoice entry, Oracle Fusion Payables creates installments automatically using the payment terms and terms date. You can optionally have Payables recalculate invoice installments during the invoice validation process.

Settings That Affect Installment Recalculation

Payables recalculates installments during invoice validation when you set the Recalculate invoice installments option on the Manage Invoice Options page.

Restriction

Installments are recalculated unless you have manually updated any of the invoice installments or split the installment.

Installments are also recalculated if you set the Exclude tax from discount calculation option on the Manage Common Options for Payables and Procurement page and you manually change the tax amount. This re-creation of invoice installments is not based on the Recalculate invoice installments setting.

How Invoice Installments Are Recalculated

Payables uses the most recent of the available start date options and the most favorable of the available payment terms. Payables determines which payment terms are more favorable by comparing the ranks assigned to the terms.

This table shows the start dates and payment terms that installment recalculation uses for matched and unmatched invoices.


Matched to a PO

Start Date

Payment Terms

No

Most recent of the following:

  • Invoice date

  • Terms date

  • Goods received date plus receipt acceptance days

Invoice payment terms

Yes

Most recent of the following:

  • Invoice date

  • Terms date

  • Goods received date plus receipt acceptance days

More favorable of the following:

  • Invoice payment terms

  • PO payment terms

Discount Allocation Methods: Critical Choices

Determine the method to use for distributing the discounts you take when making payments. Select one of the following options:

All Invoice Lines

Oracle Fusion Payables automatically prorates any discounts across all invoice lines. Payables assigns the discount to the charge account unless the invoice is matched to a purchase order with Accrue at receipt enabled, in which case the discount is assigned to the price variance account.

Note

If you exclude tax from the discount calculation and select this method , Payables allocates discounts only to expense lines and not to the tax lines.

Tax Lines and Single Distribution

Payables automatically prorates a percentage of the discount across the tax lines. The percentage of discount prorated is equal to the percentage of the tax lines. Payables credits the remaining discount amount to the Discount Taken distribution on the Manage Common Options for Payables and Procurement page. For example, if your tax distributions are 10 percent of the total invoice amount, Payables prorates 10 percent of the discount amount across the tax distributions and credits the remaining 90 percent of the discount amount to the Discount Taken distribution.

You cannot select this method if you exclude tax from discount calculation.

Single Distribution

Payables credits all discounts to the Discount Taken distribution on the Manage Common Options for Payables and Procurement page. If you enable automatic offsets, and want to distribute discount taken amounts across balancing segments, select the Single distribution method.

Interest Invoices: Explained

Oracle Fusion Payables automatically creates invoices to pay interest for overdue invoices if you enable automatic interest calculation for a supplier, and if you pay an overdue invoice in a payment process request or with a Quick payment. The interest invoice is automatically paid along with the overdue invoice.

To use automatic interest rate calculation, define the interest rates and enable the Allow interest invoices option on the Manage Invoice Options page and the Allow interest invoices option for the supplier. You can add, change, or delete a rate at any time. If a rate is not defined, a zero rate is used.

Note

Payables does not create interest invoices when you pay overdue invoices with a Manual payment.

Interest invoices have the following components:

Number

The interest invoice number is the same as the overdue invoice number, but with the suffix -INTx, where x is the count of interest invoices that were created for the overdue invoice. For example, the third interest invoice created for an overdue invoice has the suffix -INT3.

Terms

The payment terms on an interest invoice are Immediate. If you do not have Immediate terms defined, the interest invoice payment terms are the same as the overdue invoice.

Amount

The amount of the interest invoice is the interest amount owed. Payables calculates interest based on the rate you enter on the Manage Interest Rates page in accordance with the United States Prompt Payment Act. The formula used compounds monthly, up to a maximum of 365 days interest.

Currency

Interest invoices have the same invoice currency and payment currency as the overdue invoice.

Interest Allocation Methods: Critical Choices

Oracle Fusion Payables creates and accounts for interest invoices based on one of the following options:

Single Distribution

Payables creates interest invoices with a single distribution using the Interest Expense distribution on the Manage Invoice Options page.

All Invoice Lines

Payables uses the natural account segment from the Interest Expense distribution on the Manage Invoice Options page when it builds expense distributions for an interest invoice.

Payment Requests: Explained

Oracle Fusion Receivables and Oracle Fusion Expenses can submit requests to Oracle Fusion Payables to disburse funds to a payee who is not defined as a supplier. Payables records these requests as payment requests. You can disburse the funds and manage the payment process using the payment management functionality that is available in Payables.

Create a payment request from Receivables for a customer refund or from Expenses for an expense report. Expenses submits payment requests to request reimbursement of employee expenses to the employee or directly to the corporate credit card provider. Once the Expense Report Auditor has completed their review and determined the expense report is ready for reimbursement, they will submit the Process Expense Reimbursement program to create the payment request real time in Payables. Any exceptions to this process are managed in Expenses.

Note

You can only submit a payment request from other applications; you cannot enter a payment request for a payee directly in Payables.

Setting Up Payment Requests

There are no specific setup steps required to use payment requests however, the following setups do affect the payment request process. Review these setups if you plan to use payment requests.

You can use the following Oracle Fusion Payments setups to manage payment requests separately from other payments:

Reporting on Payment Requests

Track progress of the payment request in the originating application. Once the payment request is approved, you can report on and audit the payment request in Payables using the following reports:

Define Transaction Types

Recording Posted and Non-Posted Activities using Transaction Types: Critical Choices

Use the Open Receivable and Post to GL options on the transaction type to manage posted and non-posted activities on transactions.

If the Open Receivable option is enabled, Oracle Fusion Receivables updates your customer balances each time you create a complete debit memo, credit memo, chargeback, or on-account credit with this transaction type. Receivables also includes these transactions in the standard aging and collection processes.

If the Post to GL option is enabled, Receivables posts transactions with this transaction type to general ledger. If this option is not enabled, then no accounting is generated for transactions with this transaction type.

Considerations for defining transaction types include:

Creating a Void Transaction Type

You can void a debit memo, credit memo, on-account credit or invoice by defining a Void transaction type. When you define a Void transaction type, set the Open Receivable and Post to GL options to No. Then, as long as there is no activity against the transaction, and it has not been posted to general ledger, you can make the transaction invalid by changing the transaction type to Void.

This activity is not included on the Review Customer Account Details page since the activity does not modify the customer balance.

Updating Customer Accounts and Aging

If you set the Open Receivable option to Yes and Post to GL option to No, Receivables updates customer accounts with the transaction activity of transactions assigned this transaction type. Receivables also includes these transaction in aging reports. There is no effect on accounting.

Use transaction types with these settings during your initial implementation, where the transaction amount is included in the general ledger beginning balance for the receivable account, but activity still needs to be aged and payment collected against it. All related activities against the transaction, such as credit memos, payments, and adjustments, are accounted as affecting the customer balance. You can review these activities on the Review Customer Account Details page.

Updating Accounting Only

If you set the Open Receivable option to No and Post to GL option to Yes, Receivables updates accounting without any impact on the customer balance.

Use transaction types with these settings when you want to adjust accounting activity, such as when you rebill a customer in order to reclassify the general ledger account. A credit memo and invoice with the Open Receivable option set to No are created where the credit memo reverses the general ledger account of the original invoice, and the invoice creates accounting with the new general ledger account. This activity is transparent to the customer because the original invoice is used for the cash application when payment is received.

This activity is not included on the Review Customer Account Details page since the activity does not modify the customer balance.

Natural Application and Overapplication: Explained

The transaction type that you assign to a transaction defines the type of application that is permitted against the transaction balance. This definition is managed by the Natural Application Only and Allow Overapplication options.

Natural application lets you only apply a payment or credit to a transaction that brings the transaction balance close to or equal to zero. For example, if an invoice has a balance due of $400, you can make applications against this transaction up to $400 only. With natural application, you can only bring the balance to zero.

Overapplication lets you apply more than the balance due on a transaction. For example, if you apply a $500 receipt to a $400 invoice, this overapplies the invoice by $100 and reverses the balance sign from positive to negative.

Using Natural Application and Overapplication

Whether or not a transaction allows overapplication determines the actions that you can take on that transaction.

If a transaction that allows natural application only is paid in full, then in order to credit the transaction you must first unapply the transaction from the receipt before creating the credit.

If you want to use AutoInvoice to import credit memos against paid invoices and evaluate these credits for automatic receipt handling, then the transaction type of the paid invoices must allow natural application only. However, if the Receipt Handling for Credits option is not enabled on the transaction source of the transaction, AutoInvoice leaves the related credit memo in the interface tables until you unapply the invoice from the receipt.

Reference Accounts and Transaction Types: Points to Consider

Define the accounting for transaction types of class Invoice, Chargeback, Credit Memo, and Debit Memo. Oracle Fusion Receivables uses this information along with your AutoAccounting definition to determine the accounts to use for transactions with the applicable transaction type.

There are points to consider for each reference account on a transaction type:

Revenue

Enter a revenue account, unless the transaction type does not allow freight.

If the Invoice Accounting Used for Credit Memos profile option is set to No, then a revenue account is not required for Credit Memo transaction types.

Freight

Enter a freight account, unless the transaction type does not allow freight.

Receivable

Enter a receivable account for all transaction types.

If the Post To GL option on the transaction type is enabled, Receivables creates a receivable transaction record using this account in order to transfer accounting to general ledger and create a journal entry.

For Chargeback transaction types, enter the Receivable Chargeback account. The offset to the Receivable account on the original debit transaction is generated by the chargeback adjustment.

If the Invoice Accounting Used for Credit Memos profile option is set to No, then a receivable account is not required for Credit Memo transaction types.

AutoInvoice Clearing

If this is an Invoice or Debit Memo transaction type, enter an AutoInvoice clearing account. Receivables uses this account to hold any difference between the revenue amount specified for the revenue account and the selling price times the quantity for imported invoice lines.

Receivables only uses the AutoInvoice clearing account for imported transactions that have a transaction source with the Create clearing option enabled. If the Create clearing option is not enabled, then AutoInvoice requires that the revenue amount on the invoice be equal to the selling price times the quantity.

Tax

If this is an Invoice, Credit Memo or Debit Memo transaction type, enter a tax account.

Unbilled Receivable

If this is an Invoice or Credit Memo transaction type, enter an unbilled receivable account. This account is for transactions that use the In Arrears invoicing rule.

Unearned Revenue

If this is an Invoice or Credit Memo transaction type, enter an unearned revenue account. This account is for transactions that use the In Advance invoicing rule.

FAQs for Transaction Types

How can I arrange the creation of transaction types?

Define your transaction types in the following order:

If applicable, define the transaction types that you want to add to your transaction sources before defining transaction sources.

If you are using late charges, define a transaction type with a class of Debit Memo for debit memos, and a transaction type with a class of Invoice for interest invoices. Specify the receivable and revenue accounts for these transaction types. Oracle Fusion Receivables uses these accounts instead of AutoAccounting when generating late charges.

How can I use transaction types to review and update customer balances?

You can use the Open Receivable option on the transaction type to implement an approval cycle for any temporary or preliminary transactions.

For example, if you have particularly sensitive debit memos, credit memos, on-account credits, chargebacks, and invoices that you want to review after creation, you can define a transaction type called Preliminary with Open Receivable set to No and assign it to the applicable transactions. This transaction type does not update your customer balances.

When you review and approve the transaction, you can define a transaction type called Final with Open Receivable set to Yes and assign it to the same transactions. This will now update your customer balances on these transactions.

Define Transaction Sources

Managing Transaction Numbering: Points to Consider

Use the various options on the transaction source assigned to a transaction to manage your transaction numbering requirements.

There are these points to consider when defining transaction numbering for transactions assigned to specific transaction sources:

Defining Document Sequences

If necessary, define document sequences to assign unique numbers to each transaction, in addition to the transaction number automatically assigned by Oracle Fusion Receivables.

Using Automatic Transaction Numbering

To automatically number new transactions you create using a transaction source, enable the Automatic transaction numbering option and enter a number in the Last Number field.

For example, to start numbering transactions with 1000, enter a last number of 999. Receivables automatically updates the Last Number fields on transaction sources, so you can review the transaction source later to see the last transaction number that was generated.

Note

The last transaction number on the transaction source is an approximation only, due to caching.

You can use automatic transaction numbering with both Imported and Manual transaction sources.

Copying Document Number to Transaction Number

If you are using document sequences and you want to use the same value for both the document number and the transaction number for transactions assigned to a transaction source, enable the Copy document number to transaction number option.

If you are using Gapless document sequences, you should enable this option if you require gapless transaction numbering. This ensures that transaction numbers are generated sequentially and that there are no missing numbers.

Allowing Duplicate Transaction Numbers

Enable the Allow duplicate transaction numbers option to allow duplicate transaction numbers within a transaction source.

You cannot use this option with automatic transaction numbering.

Using the Credit Memo Transaction Source

Assign a credit memo transaction source to an invoice transaction source, if you want to number credit memos differently from the invoices that they credit.

Sales Credits on Imported Transactions: Explained

During AutoInvoice processing, whether you must provide sales credit information on imported transaction lines depends on the settings of the Allow sales credits option on the transaction source and the Require salesperson system option.

Requirements for Sales Credit Information

These are the requirements for passing sales credit information on imported transaction lines:

Validating Imported Transactions: How It Works

Use the AutoInvoice Options and Import Information regions of an Imported transaction source to define how AutoInvoice validates imported transaction lines assigned a particular transaction source.

You do not have to pass values for all of the fields that are referenced in the transaction source. If you do not want AutoInvoice to pass certain data, then where available you can set the related option to None.

Note

Even if you set a transaction source data option to None in order not to import this information into the interface tables, AutoInvoice can still validate and reject transaction lines with invalid data.

Settings That Affect the Validation of Imported Transactions

These settings affect the validation of imported transactions:

How Imported Transactions Are Validated

AutoInvoice validates imported data based on the settings of the applicable Imported transaction source. Transactions that fail validation appear in the Import AutoInvoice Validation report.

AutoInvoice ensures that certain column values agree with each other. These values can be within an interface table or multiple interface tables. For example, if the transaction source indicates not to use a revenue scheduling rule, AutoInvoice ignores any values passed for invoicing rule, revenue scheduling rule, and revenue scheduling rule duration.

AutoInvoice performs these validations on transaction lines with revenue scheduling rules:

FAQs for Transaction Sources

What do I create before creating transaction sources?

You may want to create certain records before creating your transaction sources.

You can optionally create these objects for all transaction sources:

You can optionally create these objects for Imported transaction sources:

How can I manage credit memos with transaction sources?

Special conditions may apply to the creation of transaction sources for credit memos.

Review these considerations for transaction sources assigned to credit memos:

What happens if I don't enter an AutoInvoice grouping rule?

Assign the AutoInvoice grouping rule to Imported transaction sources that AutoInvoice uses to group imported transaction lines.

If you do not assign a grouping rule to an Imported transaction source, AutoInvoice uses the following hierarchy to determine which rule to use:

  1. Grouping rule assigned to the transaction source of the transaction line.

  2. Grouping rule assigned to the bill-to customer site profile of the transaction line.

  3. Grouping rule assigned to the bill-to customer profile of the transaction line.

  4. Grouping rule assigned to system options.

What happens if I don't create a clearing account?

If you do not use an AutoInvoice clearing account and enable the Create clearing option on the transaction source, AutoInvoice requires that the revenue amount be equal to the selling price times the quantity for all of the transactions it processes. AutoInvoice rejects any transaction line that does not meet this requirement.