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Using Receivables, Payments, Cash, and Collections
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This guide also applies to on-premise implementations

Table of Contents

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5 Manage Accounts Receivable Balances

This chapter contains the following:

FAQs for Manage Inquiries

Process Late Charges

Process Statements

Close Receivables Accounting Period

FAQs for Manage Inquiries

When is a receipt at risk?

You can apply a receipt to an open debit item before cash is actually received from the bank. Receipts with a Standard remittance method are considered at risk if they have been confirmed, but not yet cleared. Receipts with a Factored remittance method are considered at risk if they have not yet been risk-eliminated.

By default Oracle Fusion Receivables displays receipts at risk as part of the customer open balance. Enable the Exclude receipts at risk option to remove these receipt amounts from the open balance calculation.

What is the total open receivables amount?

This is the amount per currency of the amount in the Total Transaction Due Amount column less the amount in the Receipts Pending Application Amount column. This amount provides the current receivables position of a customer account.

What is the last transaction and last receipt?

The contextual area of the Review Customer Account Details page displays information about the most recent transaction and the most recent receipt belonging to the selected customer account. If there were multiple transactions or receipts on the same date, Oracle Fusion Receivables displays the transaction and receipt with the largest amount.

This display is by date and, if applicable, by amount only. The transaction and receipt displayed do not necessarily reference the same business unit or share the same entered currency.

What's the difference between account activity and transaction activity?

Activity against a customer account refers to the transactions and payments that go into the details of the account.

Customer account activities include:

  • Invoice

  • Credit Memo

  • Debit Memo

  • Chargeback

  • Payment (receipt)

Activity against an individual transaction or receipt refers to the specific debits, credits, reversals and adjustments that constitute the history of one receivables item.

Process Late Charges

Late Charge Interest Calculation Methods: Explained

When you set up a late charge profile for your customers, you must decide the method to use to calculate late charges.

Interest Calculation Methods

You select the calculation method in the Late Charge Calculation Method field in the Credit Limits and Late Charges tab of the Customer Profile Class pages, or on the applicable customer or customer site profile.

The interest calculation methods are:

  • Average Daily Balance: Calculate late charges based on the average daily balance of overdue invoices. This method is for balance forward bills only.

  • Late Payments Only: Calculate late charges based on the number of days between the payment due date and the actual payment date. This method uses the paid amount as the overdue invoice amount when calculating the late charge.

  • Overdue Transactions Only: Calculate late charges for transactions based on the number of days a payment is late when you submit the Create Late Charges program.

  • Overdue Transactions and Late Payments: Calculate late charges on both overdue transactions and late payments. This option levies the largest late charge amount on a customer.

    For example, your enterprise calculates late charges on the 15th and 30th of each month. Your customer has an overdue invoice of $100 that falls due on November 16:

    • On November 30, you run the Create Late Charges program. Oracle Fusion Receivables calculates late charges for this overdue invoice.

    • On December 10, your customer pays the invoice.

    • On December 15, you run the Create Late Charges program again. Receivables assesses further charges for the additional 10 days that the payment was overdue.

Late Charge Interest Calculation Formulas: Explained

When you set up a late charge profile for your customers, you must decide the formula to use to calculate late charges.

Interest Calculation Formulas

You select the calculation formula in the Interest Calculation Formula field in the Charge Calculation Setup region in the Credit Limits and Late Charges tab of the Customer Profile Class pages, or on the applicable customer or customer site profile.

The interest calculation formulas are:

  • Flat Rate: Use a flat rate to calculate the late charge amount. Receivables ignores the number of days that a payment is overdue. If you use balance forward billing and the average daily balance calculation method, then this is the calculation formula used. The formula is:

    Amount Overdue * (Interest Rate/100)
    
  • Simple: Calculate late charges on overdue transactions only. If you use interest tiers and charge schedules to create late charges and penalties, then this is the calculation formula used. The formula is:

    Amount Overdue * (Interest Rate/100) * (Number of Days Late/Number of Days in Period)
    
  • Compound: Calculate late charges on the sum of overdue transactions and prior late charges. The formula is:

    (Amount Overdue + Prior Late Charges) * (Interest Rate/100) * (Number of Days Late/Number of Days in Period)
    

Late Charges: How They Are Calculated Using Interest Tiers

Use interest tiers and charge schedules to assess increasingly higher late charges the longer a payment is overdue. You can define interest tiers and charge schedules for late charges and, if applicable, for additional penalty charges.

The interest tier provides period ranges for number of days overdue, and the charge schedule indicates the flat amount or percentage to charge in each overdue period.

Note

The charge schedule approach provides you with a convenient method to update interest rates or amounts when your late charge policy changes, because you can simply apply a new charge schedule to the applicable interest tiers. If you do not use charge schedules, then when your late charge policy changes you must update each of your applicable customer profiles with the new rates.

Settings That Affect Late Charge Calculation Using Interest Tiers

These settings affect late charge calculation using interest tiers:

  • Interest Tiers: Use the Manage Interest Tiers page to define a set of interest tiers based on ranges of late days. Use these settings for each set of interest tiers:

    • Aging Type: Select the value Interest Tier.

    • Sequence Number: Use a numbering scheme to reflect the order in which to consider each period.

    • Detail Type: Select the value Past Due.

    • From Days/To Days: Enter the date range for each period.

  • Charge Schedules: Use the Manage Charge Schedules page to assign late charge rates to the periods of the sets of interest tiers that you have defined. Use these settings for each charge schedule:

    • Charge Method: Select the charge method to use for the interest tier periods:

      • Amount: Apply a flat amount against overdue transactions that fall within the specified period ranges.

      • Percentage: Apply a percentage of the overdue transactions that fall within the specified period ranges.

    • Tier Levels Rate: Assign the rate, either a flat amount or percentage of the outstanding balance, to each period in the interest tier.

  • Profile Class: Specify these values on the related profile class, or customer or customer account profile:

    • Use multiple interest rates option: If you set the Use multiple interest rates option, then if the effective dates for two charge schedules occur within the same charge calculation period, both rates apply to late charge calculations during that period.

      Note

      This applies to interest invoices only.

    • Currency Settings: Enter for each currency in which you intend to calculate late charges, the charge schedules to use for late charges and, if applicable, penalty charges:

      • Interest Charge Type field and Penalty Charge Type field: Enter the value Charge Schedule.

      • Interest Charge Schedule field and Penalty Charge Schedule field: Enter the charge schedules that you previously defined to use for late charges and penalty charges.

How Late Charges Using Interest Tiers Are Calculated

Oracle Fusion Receivables uses the active interest tier and charge schedule values to calculate late charges using the Simple calculation formula.

The Simple calculation formula is the amount overdue multiplied by the rate and days overdue in the period:

Amount Overdue * (Interest Rate/100) * (Number of Days Late/Number of Days in Period)

This table provides an example of a charge schedule with four interest tier periods, each with an assigned interest rate.


Days Overdue Tiers

Interest Rate

1-30 days

2%

31-45 days

3%

46-60 days

4%

Over 60 days

5%

In this example:

  • An invoice for $1,000 is 45 days overdue.

  • There are 30 days in the billing period.

The late charges are calculated as follows:

$1,000 * (3/100) * (45/30) = $45

After an additional 15 days (60 days overdue), the late charges are calculated as follows:

$1,000 * (4/100) * (60/30) = $80

Late Charges: How They Are Calculated Using Average Daily Balance

If you use balance forward billing, use the Average Daily Balance charge calculation method to calculate late charges.

Settings That Affect Late Charge Calculation Using Average Daily Balance

These settings affect late charge calculation using average daily balance:

  • Billing and Revenue System Options: Set these system options for late charges in the Late Charges region of the Billing and Revenue tab of the Create System Options page:

    • Assess late charges option: Set the Assess late charges option to indicate that your enterprise assesses late charges on overdue transactions. Oracle Fusion Receivables reviews this option first, before reviewing the various aspects of your late charge policy defined in system options or customer profiles.

    • Average Daily Balance Calculation Basis field: Select a calculation basis to include or exclude as part of the balance calculation any debit items that were billed after the most recently generated balance forward bill:

      • Include Post-Billing Debit Items: The average daily balance formula includes debit items that were created after the previous balance forward bill cutoff date.

      • Exclude Post-Billing Debit Items: The average daily balance includes only those debit items that were already included on the last balance forward bill.

    • Average Daily Balance Calculation Period field: Select the period that Receivables uses to calculate the average daily balance:

      • Due-Date to Run Date: Receivables computes the sum of the applicable debits and credits for each day that falls between the balance forward bill due date and the Create Balance Forward Bill program submission date. To calculate the average daily balance, Receivables divides the sum by the number of days.

      • Run-Date to Run-Date: Receivables computes the sum of the applicable debits and credits for each day that falls between the last submission date and current submission date of the Create Balance Forward Bill program. To calculate the average daily balance, Receivables divides the sum by the number of days.

  • Customer Profile Class: Set these options for late charges in the Credit Limits and Late Charges tab on the Create Receivables Customer Profile Class page, or on the applicable customer or customer site profile:

    • Enable late charges option: Set the Enable late charges option to enable the assessment of late charges for customers assigned this profile.

    • Late Charge Calculation Method field: Select the calculation method Average Daily Balance.

    • Receipt Grace Days field: Enter the number of receipt grace days after the transaction due date before late charges are calculated.

      Note

      After the grace days expire, Receivables calculates the number of days overdue using the original due date.

How Late Charges Using Average Daily Balance Are Calculated

The Average Daily Balance charge calculation method is based on the average daily balance of overdue invoices for balance forward bills. The formula is:

(Daily Balance/Number of Days in Billing Cycle) * (Interest Rate/100)

This table provides an example of an average daily balance calculation. In this example, there are five days in the billing period, and a student enrolls in a class and makes a partial payment two days later.


Date

Activity

Student Balance

June 1

No activity

$0

June 2

Enroll in class

$1,000

June 3

No activity

$1,000

June 4

$250 payment

$750

June 5

No activity

$750

In this example:

  • The beginning balance for this customer is $0 and there is no account activity on the first, third, and fifth day.

  • When the student enrolls in a class on June 2, there is a single charge of $1,000.

  • The student makes a partial payment of $250 against the enrollment fee on June 4.

  • The last column represents the daily balance. The average daily balance is $700.

If the interest rate is 10%, then the total late charge for this billing period is $70. This is calculated as follows:

($0 + $1,000 + $1,000 + $750 + $750 = $3,500) / 5 days = $700
$700 * 10% interest rate = $70 total late charge

Recording and Presenting Late Charges: Critical Choices

During your late charges setup, you must decide how to record and present late charges to your customers.

You can record late charges as one of three documents:

  • Adjustments

  • Debit Memos

  • Interest Invoices

You must complete the entire setup for late charges. In addition, you must complete specific steps for the document that you intend to use.

Note

Because Oracle Fusion Receivables treats interest invoices and debit memos as regular transactions, tax may be calculated on these transaction amounts.

Adjustments

If you record late charges as adjustments, then Receivables combines all interest charges relating to an overdue transaction, and creates a single late charge adjustment against that transaction.

If you also assess penalty charges, then Receivables creates two adjustments.

If you select Credit Items in the Charge Reductions field of the applicable customer profile, then credit items reduce the outstanding overdue amount during late charge calculations.

You must complete these steps to record late charges as adjustments:

  1. Select Adjustment in the Late Charge Type field on the Credit Limits and Late Charges tab of the applicable customer profile.

  2. Define a Late Charges receivables activity and enter an activity GL account.

  3. If you assess penalties in addition to late charges, then define a separate Late Charges receivables activity for penalties and enter an activity GL account. Receivables creates penalties as a separate adjustment against the overdue transaction.

  4. Assign these activities to Billing and Revenue system options:

    • Select the receivables activity for late charges in the Interest Charge Activity field in the Late Charges region.

    • Select the receivables activity for penalties in the Penalty Charge Activity field in the Late Charges region.

Debit Memos

If you record late charges as debit memos, then Receivables creates one debit memo per overdue transaction.

If you also assess penalty charges, then Receivables includes a separate line for penalty charges on the debit memo.

If you select Credit Items in the Charge Reductions field of the applicable customer profile, then credit items reduce the outstanding overdue amount during late charge calculations.

You must complete these steps to record late charges as debit memos:

  1. Select Debit Memo in the Late Charge Type field on the Credit Limits and Late Charges tab of the applicable customer profile.

  2. Define a transaction source for late charges with a type of Imported. Receivables creates a debit memo batch using the Invoice API.

  3. Define a transaction type for late charges:

    • Select a class of Debit Memo.

    • Specify the receivable and revenue accounts for this transaction type. Receivables uses these accounts instead of AutoAccounting when generating late charges.

  4. Assign the transaction source and transaction type to Billing and Revenue system options:

    • Select the debit memo transaction type in the Debit Memo Charge Transaction Type field in the Late Charges region.

    • Select the debit memo transaction source in the Late Charge Transaction Source field in the Late Charges region.

  5. Select payment terms for the applicable customer profiles to indicate the debit memo due date.

Interest Invoices

If you record late charges as interest invoices, then Receivables creates a single interest invoice per customer site and currency. The interest invoice consolidates and itemizes charges for a period, and includes details about charges for each overdue transaction.

If you also assess penalty charges, then Receivables includes a separate line for penalty charges on the invoice.

If you select Credit Items in the Charge Reductions field of the applicable customer profile, then Receivables calculates negative charges on existing credit items, and includes those negative charges as lines on the interest invoice.

You must complete these steps to record late charges as interest invoices:

  1. Select Invoice in the Late Charge Type field on the Credit Limits and Late Charges tab of the applicable customer profile.

  2. Define a transaction source for late charges with a type of Imported. Receivables creates an interest invoice batch using the Invoice API.

  3. Define a transaction type for late charges:

    • Select a class of Invoice.

    • Specify the receivable and revenue accounts for this transaction type. Receivables uses these accounts instead of AutoAccounting when generating late charges.

  4. Assign the transaction source and transaction type to Billing and Revenue system options:

    • Select the interest invoice transaction type in the Interest Invoice Transaction Type field in the Late Charges region.

    • Select the interest invoice transaction source in the Late Charge Transaction Source field in the Late Charges region.

  5. If you use interest tiers and charge schedules to assess increasingly higher late charges the longer a payment is overdue, you can set the Use multiple interest rates option on the related profile class, or customer or customer account profile.

    If you set this option, then if the effective dates for two charge schedules occur within a charge calculation period, both rates apply to late charge calculations during that period.

  6. Select payment terms for the applicable customer profiles to indicate the interest invoice due date.

Using a Minimum Customer Balance with Late Charges: Examples

In situations where it is not cost effective to calculate and collect late charges for small amounts, you can set a minimum customer balance for late charges.

You set a minimum customer balance per currency on the Credit Limits and Late Charges tab of the Create Receivables Customer Profile Class page, or on the applicable customer or customer site profile. Oracle Fusion Receivables only assesses late charges when the minimum balance of the applicable customers is exceeded.

These examples illustrate the difference between calculating the minimum customer balance using the Overdue Transactions Only charge calculation method and the Average Daily Balance charge calculation method. In these examples, the minimum customer balance is $250.

These examples also illustrate how submitting the Create Late Charges program on different dates (May 20 or May 30) can potentially change the activity that is selected for late charge calculation.

This table includes a timeline of debits and credits to a customer account:


Date

Charge Type

Amount

April 10

Debit

$200

April 12

Debit

$200

May 4

Debit

$100

May 6

Credit

$50

May 13

Credit

$25

May 18

Credit

$200

May 24

Credit

$50

May 27

Debit

$100

In these examples:

  • The billing date is May 1 and the billing cycle is from the first day of the month to the last day of month inclusive.

  • The due date is the 10th of the following month.

  • The receipt grace period is three days.

Create Late Charges on May 20: Overdue Transactions Only

The Overdue Transactions Only calculation method compares the minimum customer balance to the sum of all customer debit and credit activities as of the date when you run the Create Late Charges program.

If you submit the Create Late Charges program on May 20, then the customer balance includes 3 overdue invoices (April 10, 12, and May 4) for a total of $500. The balance also includes 3 payments (May 6, 13, and 18) for a total of $275.

The total customer balance is $225, which is below the minimum balance of $250. Therefore, Receivables does not calculate late charges for this customer.

Create Late Charges on May 20: Average Daily Balance

The Average Daily Balance calculation method starts with the ending balance of the last balance forward bill, and subtracts all credits (receipts and credit memos) up through the due date plus receipt grace days to determine if the customer balance is eligible for late charges.

To calculate late charges, Receivables starts with the ending balance of the last balance forward bill and includes only invoices that were on the last bill. In this case, Receivables includes invoices that were created before May 1 (April 10 and 12) for a total of $400.

Receivables then subtracts all credits that were recorded before May 13 (the due date plus receipt grace days). Credits include the receipts from May 6 and 13 for a total of $75.

In this case, the total customer balance is $325, which is higher than the minimum balance of $250. Therefore, Receivables calculates late charges for this customer, using the applicable Average Daily Balance calculation method.

Create Late Charges on May 30: Overdue Transactions Only

If you submit the Create Late Charges program on May 30, then the customer balance includes 4 overdue invoices (April 10, 12, and May 4, 27) for a total of $600. The balance also includes 4 payments (May 6, 13, 18, and 24) for a total of $325.

The total customer balance is $275, which is higher than the minimum balance of $250. On this day, Receivables calculates late charges for this customer.

Create Late Charges on May 30: Average Daily Balance

In this example, submitting the Create Late Charges program on May 30, as opposed to May 20, does not change the customer balance calculation.

To determine the customer balance, Receivables still starts with the ending balance of the last balance forward bill (May 1), and subtracts all credits (receipts and credit memos) up through the due date plus receipt grace days (May 13).

Setting Up a Late Charge Policy: Worked Example

This example demonstrates how to set up a late charge policy for the customer Business World. The example includes the setup of late charge documents, the Business World customer profile, and customized settings.

This table summarizes key decisions for this scenario.


Decisions to Consider

In This Example

Which document will record late charges?

Adjustments

What period basis is used for late charge calculations?

Monthly

Which currencies?

US dollar and British pound sterling

Are there exceptions to the general policy?

Yes, for the customer account site and customer transactions.

Summary of the Tasks

The calculation of late charges is determined by your late charge policy. The late charge policy comprises the late charge document, Receivables system option settings, and customer profile settings.

  1. Set up the late charge document.

  2. Set Receivables system options for late charges.

  3. Set up the Business World customer profile for late charges.

  4. Customize the customer site and customer transactions for late charges.

Setting Up the Late Charge Document

To record late charges as adjustments, define a receivables activity for late charges:

  1. Open the Create Receivables Activity page.
  2. Complete the fields, as shown in this table:

    Field

    Value

    Name

    Name that identifies this receivables activity as a late charge adjustment.

    Activity Type

    Late Charges

    Activity GL Account

    General ledger account for late charges.


Setting Receivables System Options for Late Charges

Set Receivables system options for late charges:

  1. Open the Create Receivables System Options page.
  2. Complete the fields in the Late Charges region of the Billing and Revenue tab, as shown in this table:

    Field

    Value

    Assess late charges

    Enable this option.

    Interest Charge Activity

    Name of the Late Charges receivables activity you previously defined.


Setting Up the Customer Profile

Set up the customer profile for Business World for late charges:

  1. Open the Create Receivables Customer Profile Class page.
  2. Complete the general required field for the profile class.
  3. Click on the Credit Limits and Late Charges tab.
  4. Complete the fields in the Late Charges region, as shown in this table:

    Field

    Value

    Enable late charges

    Enable this option.

    Late Charge Calculation Method

    Overdue Invoices and Late Payments

    Charge Reductions

    Credit Items

    Late Charge Type

    Adjustment

    Interest Calculation Formula

    Compound

    Interest Calculation Period

    Monthly

    Receipt Grace Days

    2

    Interest Days Period

    30

    Assess Late Charges Once

    No


  5. In the Currency Settings region, click on the Add icon.
  6. Complete the fields, as shown in this table:

    Field

    Value

    Currency

    USD (US Dollar)

    Minimum Invoice Balance Overdue Type

    Percent

    Minimum Invoice Balance Overdue Percent

    15

    Minimum Customer Balance Overdue Type

    Percent

    Minimum Customer Balance Overdue Percent

    15

    Interest Charge Type

    Fixed Rate

    Interest Charge Rate

    9


  7. Repeat steps 4 and 5 for British pound sterling.
  8. Assign this profile class to the Business World bill-to site.

Customizing the Customer Site and Transactions

Customize the Business World customer site and transactions for late charges:

  1. Open the Statement, Dunning, and Late Charges Site Profiles Used profile option.
  2. Set the profile option to No.

    By setting this profile option to No, the Create Late Charges program uses the late charge policy assigned to the bill-to site.

  3. Open the Create Transaction Type page and create a transaction type that excludes invoices from late charges.
  4. Complete the fields, as shown in this table:

    Field

    Value

    Name

    Late charges exemption

    Transaction Class

    Invoice

    Transaction Status

    Open

    Exclude from late charges calculation

    Enable this option.


  5. Assign this transaction type to the applicable invoice transactions.

FAQs for Process Late Charges

Why didn't late charges appear on transactions?

You must ensure that you assign an interest charge to each currency that you do business in for the applicable customer profiles. If you do not assign an interest charge to a currency, then Oracle Fusion Receivables does not calculate late charges for past due items in that currency.

To ensure that late charges appear on transactions, enter values in the Interest Charge Type field and either the Interest Charge Rate, Interest Charge Amount, or Interest Charge Schedule field for each currency in the Late Charge Rates and Conditions region of the Currency Settings region of the Credit Limits and Late Charges tab.

If applicable, complete the related fields for penalty charges.

Process Statements

Cross Site and Cross Customer Receipts on Statements: Examples

Customer statements accurately record and report on receipts that were applied across customers and customer sites.

Oracle Fusion Receivables displays each cross-customer or cross-site receipt on the statement of the customer or customer site associated with the transaction to which the receipt was applied, as well as on the statement of the customer or customer site that owns the receipt. The Reference column on the statement includes the amount of each receipt, and the corresponding Transaction column displays the amount of each receipt applied to a specific transaction.

Receipts that have cross-site or cross-customer applications are reported on statements after the On-Account and Unapplied receipts. These entries display the amount applied to transactions of other sites in the Transaction Amount column and have no effect on the balance of the statement.

Scenario

In this example two sites, SF and CA, pay each other's invoices. Every receipt is recorded against the invoice to which it is applied. It is also reported on the statement of the site that owns the receipt as a cross-site entry, with the amount applied to the other site displayed as the transaction amount. If the receipt is not fully applied, the portion not applied is entered as an unapplied receipt.

This table illustrates the statement that the SF site receives:


Invoice

Transaction

Reference

Site

Transaction Amount

Amount

Invoice 1

Invoice

SF

200.00

Invoice 1

Payment

check p1 200.00

CA

-150.00

50.00

Invoice 5

Invoice

SF

1200.00

Invoice 5

Payment

check p5 700.00

SF

-600.00

Invoice 5

Payment

check p6 600.00

CA

-600.00

0.00

Unapplied

Payment

check p2 500.00

SF

-100.00

Unapplied

Payment

check p5 700.00

SF

-100.00

-200.00

Cross Receipt

Payment

check p2 500.00

SF

400.00

Cross Receipt

Payment

check p3 500.00

SF

500.00

Cross Receipt

Payment

check p4 100.00

SF

100.00

This table illustrates the statement that the CA site receives:


Invoice

Transaction

Reference

Site

Transaction Amount

Amount

Invoice 2

Invoice

CA

500.00

Invoice 2

Payment

check p2 500.00

SF

-400.00

100.00

Invoice 3

Invoice

SF

600.00

Invoice 3

Payment

check p3 500.00

CA

-500.00

Invoice 3

Payment

check p4 100.00

SF

-100.00

0.00

Unapplied

Payment

check p1 200.00

CA

-50.00

-50.00

Cross Receipt

Payment

check p1 200.00

CA

150.00

Cross Receipt

Payment

check p6 600.00

CA

600.00

0.00

Close Receivables Accounting Period

Receivables Accounting Event Model: Explained

An accounting event is a business event in Oracle Fusion Receivables that has an accounting impact. For example, creating or applying a receipt is an accounting event.

Not all business events have an accounting impact, but you can decide which events you want to monitor as accounting events. You can modify the accounting setup to create accounting for some events and not for others.

In Oracle Fusion Subledger Accounting, accounting events are categorized into event types. Event types are grouped into event classes that in turn are grouped into event entities. The overall grouping of these components is called an event model. The Oracle Fusion Receivables accounting event model is predefined for you, and includes each Receivables event class and its life cycle. This accounting event model forms the basis for creating subledger accounting.

As the foundation of the event model, Receivables predefines event entities. An event entity enables Subledger Accounting to handle the accounting for similar business events in a consistent manner. The event entities for Receivables are:

  • Transactions

  • Receipts

  • Adjustments

Each event entity is associated with one or more event classes. An event class represents a category of business events for a particular activity or document. Event classes group similar event types and enable the sharing of accounting definitions.

An event type represents a business operation that you can perform for an event class. An accounting event has both an event class and an event type that affect how the Create Receivables Accounting program determines the subledger accounting for it. Event types provide the lowest level of detail for storing accounting definitions.

Transactions Event Entity

This table describes the event classes and event types that Receivables predefines for the Transactions event entity.


Event Class

Event Types

Chargeback

Chargeback Created

Credit Memo

Credit Memo Created

Credit Memo Updated

Debit Memo

Debit Memo Created

Debit Memo Updated

Invoice

Invoice Created

Invoice Updated

Receipts Event Entity

This table describes the event classes and event types that Receivables predefines for the Receipts event entity.


Event Class

Event Types

Miscellaneous Receipt

Miscellaneous Receipt Created

Miscellaneous Receipt Reverse

Miscellaneous Receipt Updated

Receipt

Receipt Created

Receipt Reverse

Receipt Updated

Adjustments Event Entity

This table describes the event classes and event types that Receivables predefines for the Adjustments event entity.


Event Class

Event Types

Adjustment

Adjustment Created

Setting Up for Receivables to General Ledger Reconciliation: Points to Consider

Periodically you need to reconcile the transactions in your accounts receivable system, both before and after you post to the general ledger. The Receivables to General Ledger Reconciliation extract and report help to simplify this process and reduce the amount of manual reconciling activity required.

The automated activities in the reconciliation process function according to the way you have set up your Financials environment. A review of some of these setups can help improve the overall reconciliation process.

There are these points to consider when setting up for Oracle Fusion Receivables to general ledger reconciliation:

  • Business Unit vs. Ledger Reconciliation

  • Assigning the Financial Category

  • Setting Profile Options

  • User Security

Business Unit vs. Ledger Reconciliation

If you implicitly map primary balancing segment values to your business unit, you can reconcile based on business unit. This allows employees from different business units to balance their respective organization activity.

If you do not implicitly map primary balancing segment values to business unit, you must reconcile based on ledger. In this case, you will need access to all business units associated with the ledger to perform a thorough reconciliation.

Important

Implicit mapping means that there is no specific setup in the system to assign the business unit to a primary balancing segment. This is a business decision, and your setup in Receivables should be such that the default accounting assigned to activities for that business unit should be the primary balancing segment value that was decided.

Assigning the Financial Category

You must assign the financial category of Accounts Receivable to all of your receivables natural account values. This is a required setup step for Receivables to general ledger reconciliation. You perform this task under the Manage Chart of Accounts Value Sets activity.

If the financial category of Accounts Receivable is not included in the chart of accounts setup, the Receivables to General Ledger Reconciliation report will not select any data. When you run the extract program, if you try to select general ledger natural account values that do not have this category assigned, the extract program displays an error indicating that the financial category was not assigned.

Once you assign the Accounts Receivable financial category, you can leave the Account parameter blank when you run the extract, in order to include all accounts that have the Accounts Receivable financial category in the ledger. You can alternatively enter specific natural account values to limit the report to reconciling only a subset of the receivables accounts in the ledger, but these values must have the Accounts Receivable financial category assigned.

If you set up accounts for unidentified, unapplied and on-account receipts and on-account credit memos, you must also assign the Accounts Receivable financial category to these accounts in order to include them in reconciliation. If you want to exclude these accounts during reconciliation, then you must exclude them from both the account range parameter and the related unidentified and unapplied receipts and on-account items parameters.

Setting Profile Options

Review the setting of these profile options:

  • Reconciliation Data Purge Frequency

  • Zero Amount Journal Lines Displayed

Use the Reconciliation Data Purge Frequency profile option to indicate the number of days to keep reconciliation extract data in the tables. Enter a value for the number of days so as not lose prior extracts that you may need for comparison purposes.

Every time you run the extract program, it refers to the value of the Reconciliation Data Purge Frequency profile option. If there are any reconciliation data extract requests in the table older than the number of days specified in the profile option, these requests are purged.

For example, if a reconciliation data extract is run on January 1, and the value of this profile option is set to 30 days, then the data from January 1 is not purged if you run another extract on January 29. However, the data is purged if you run another extract on February 1.

The Zero Amount Journal Lines Displayed profile option affects whether journal lines with zero amounts display in the Not Transferred to GL Detail report. If this profile option is set to Yes, the Summary report may equal zero and the detail report will list these zero amount journal lines. This does not prevent Period Close and does not cause reconciling issues as the net effect on the report is zero.

User Security

This section includes considerations for segment security and data access set.

Segment security applies to Detail reports only. If you do not have segment security access, then summary and detail report totals may not match.

Typically General Ledger users are secured by a data access set, and Receivables users by business unit security. This means that for the Receivables to General Ledger Reconciliation report:

  • General Ledger users can see general ledger data for the balancing segment values in their data access set, as well as the Receivables and Subledger Accounting data for all business units linked to the ledger.

  • Receivables users can see the Receivables and Subledger Accounting data for business units in their security definition, as well as general ledger data for all balancing segment values in the ledger.

However, if security is configured such that the data role for the General Ledger or Receivables job roles also have FND grants to specific business units for General Ledger users or specific data access sets for Receivables users, then the reconciliation report will only include:

  • For General Ledger users, the Receivables and Subledger Accounting data for those business units in the ledger to which the user has access.

  • For Receivables users, general ledger data for those balancing segment values included in the data access set to which the user has access.

This does not present a problem for the Receivables to General Ledger Reconciliation report if there is an implicit mapping between business units and balancing segment values. Users can simply filter the report for the balancing segment values that are mapped to the business units to which they have access, and the report should work properly.

However, if there is not an intentional and implicit mapping between balancing segment values and business units, then this can cause the Receivables to General Ledger Reconciliation report to display undesirable results:

  • For General Ledger users, the report will include general ledger data for all balancing segment values in the data access set, while Receivables and Subledger Accounting data are limited to the business units to which a user is granted access.

  • For Receivables users, the report either will not include any general ledger data, or it will include general ledger data that is not properly mapped to the Receivables and Subledger Accounting data for the business unit.

You can resolve this issue by removing the FND grants from specific business units for the General Ledger job roles, and from specific data access sets for the Receivables job roles.

Extract Reconciliation Data from Receivables to General Ledger

Run the Extract Reconciliation Data from Receivables to General Ledger program to select data for the Summary section of the Receivables to General Ledger Reconciliation Report. The extract must run successfully in order to see the most current Summary report, and before you can run the Receivables to General Ledger Reconciliation Report.

Extract Reconciliation Data from Receivables to General Ledger Parameters

Request Name

Enter a name that is descriptive of this extract. Consider using name that indicates the accounting period, date, and time, especially if you are planning to create multiple extracts.

Ledger

The ledgers available for selection are based on your security assignment.

Business Unit

Use this parameter if you need to reconcile by a specific organization.

Note

The business unit must be mapped to balancing segment. If not, you must reconcile by ledger. If you have implicitly mapped your business unit to one or more primary balancing segment values, you will also need to select these values when you run the extract.

Accounting Period

You can select either Open or Closed accounting periods.

Include Intercompany Transactions

You can include or exclude Intercompany transactions, or you can reconcile by Intercompany activity only.

Include On-Account Items

You can include or exclude on-account activities, unapplied receipts, and unidentified receipts.

You may want to exclude these activities if they typically post to non-receivable accounts. If you include activities that post to non-receivable accounts, this can cause an accounting difference.

Account

You can select values from any of the segments of the accounting flexfield. The Natural Account segment values must have the Financial Category of Accounts Receivable assigned in your general ledger setup in order for the extract and report to work properly.

If you are reconciling by business unit, select the range of balancing segment values implicitly mapped to your business unit.

If you are reconciling Intercompany activity, select the range of Intercompany accounts. These accounts must have the Financial Category of Accounts Receivable assigned.

If you are reconciling everything, you do not need to select any values. The report automatically selects data for Receivables accounts that have the Financial Category of Accounts Receivable assigned.

Receivables to General Ledger Reconciliation Report: Points to Consider

Use the Receivables to General Ledger Reconciliation report to facilitate the reconciliation of receivables data to the general ledger.

The interactive reporting capability of the Receivables to General Ledger Reconciliation report provides both summarized and detailed reconciling data for review. The Summary report lets you see receivables and accounting beginning and ending balances, as well as summarized activity for the period and how this activity was accounted.

Drill down on any amount in the Summary report Difference column to display the Differences Detail report for that item. The Differences Detail reports display the real-time details that make up balances from the Summary report, and indicate potential causes for differences between actual and reconciling amounts.

Note

For a more efficient reconciliation, do not allow general ledger sources other than Oracle Fusion Receivables to post to Receivables accounts.

There are these points to consider when using the Receivables to General Ledger Reconciliation report:

  • Using the Spreadsheet

  • Differences between Transactional and Accounted Amounts

  • Differences between Summary and Detail Amounts

  • Extract of Limited Account Information

  • Differences between the Reconciliation Report and the Aging Report

  • Recommendations for Reconciling by Business Unit

  • Recommendations for Reconciling Intercompany Activity

Using the Spreadsheet

If you are downloading a large amount of data to a spreadsheet and you plan to perform a number of data manipulations, use the CSV format. If you are downloading data for reference purposes only, use the Excel or PDF format.

Differences between Transactional and Accounted Amounts

Ideally the Summary report should display no differences between receivables transactional amounts and accounted amounts. In addition, the beginning and ending receivables balances should agree with the Receivables Aging by Account report.

Important

It may happen that the Summary report will contain variance amounts. If the Summary report contains variance amounts, contact your system administrator.

Any differences that you find require further investigation and possible correction. Common reasons for differences between transactional amounts and accounted amounts include:

  • Transactions that are not accounted.

  • Transactions with subledger accounts that fall outside the account range of the report.

  • Transaction amounts do not agree with the subledger journal line amounts.

  • Journals are posted to the subledger or general ledger that did not come from Receivables.

  • Subledger journals were not transferred or posted to general ledger.

After finding and correcting discrepancies, you must re-run the Extract Reconciliation Data from Receivables to General Ledger program and review the Summary report.

Note

Some differences may be valid. For example, if you included unapplied and unidentified receipts in your extract, but you do not post these receipts to a receivables account, then these receipts appear as a difference that is outside the account range of the report. In this case, you may wish to rerun the extract and exclude these items.

Differences between Summary and Detail Amounts

The Non-Receivables Begin Balance amount is any portion of a general ledger account beginning balance that did not originate from Receivables transactions. You can drill down on this amount to see a list of general ledger journal lines that have an accounting date that falls within the current fiscal year but prior to the period of the reconciliation report; and that have an account combination that falls within the account range of the report.

The drilldown page does not include non-Receivables journal lines dated in previous fiscal years, which means that these journal lines will not the match the Non-Receivables Begin Balance amount. The drilldown page is only intended to provide current fiscal year journals that might have posted erroneously to the receivables account.

The journal source of these journals is typically not Receivables. However, you may see manual subledger journal entries that were entered for the Receivables source directly into the subledger but not necessarily linked to a specific Receivables transaction. Most of these entries represent adjustment journal entries.

Manual subledger journals created during the current reconciling period display in the Summary report under Other Accounting, and become part of the Non-Receivables Begin Balance amount in subsequent periods. Manual general ledger journals that may affect receivables accounts are created directly in the general ledger and do not display under Other Accounting on the Summary report, but display instead under the Non-Receivables Activity amount.

Summary amounts may not reflect totals on detail pages because:

  • Data was modified after the data extract was run for a given accounting period. If transactions or accounting were created or modified between the time the extract was executed and the moment you drill down from a summary amount to its detail amounts, the summary amount will not reflect the detail page totals.

    To limit discrepancies between the summary and detail reports, set the Receivables accounting period status to Close Pending or Closed.

  • Security rules in your setup may restrict you from seeing data from certain business units or segment values.

    Ensure that appropriate security is given to users for all business units and accounting flexfield segment values that each user is responsible for reconciling.

Extract of Limited Account Information

If you restrict the number of general ledger accounts that you include in a run of the Extract Reconciliation Data from Receivables to General Ledger program, this can affect the display of data in the detail reports and may be the cause of a difference between the accounted amount of a transaction and the reconciling amount.

For example, if Receivables transactions are recorded against balancing segment values 1, 2, 3 or natural accounts A, B, C, and the account range you used excluded some of these values, then these transactions would show up as differences on the report.

Differences between the Reconciliation Report and the Aging Report

You may find differences between the data displayed in the Receivables to General Ledger Reconciliation report and the Receivables Aging by Account report. This list provides the principle reasons why this occurs and recommendations for working with these differences:

  • Intercompany Transactions: You cannot limit the display of intercompany transactions on the Receivables Aging by Account report. If the reconciliation extract either excludes intercompany transactions or displays intercompany transactions only, then the Receivables to General Ledger Reconciliation report and the Receivables Aging by Account report will not display compatible data.

  • Transaction Types: If you have transactions assigned to transaction types that have both the Open Receivable and Post to GL options set to No, the Receivables Aging by Account report and the Receivables End Balance of the Receivables to General Ledger Reconciliation report may not agree. This is because the Aging report displays a subtotal for items that are Not Accountable, whereas these items do not appear on the Reconciliation report.

    The Receivables End Balance of the Receivables to General Ledger Reconciliation report (Receivables Amount) should agree with the Accounted Balance of the Aging Report. It may also agree with the Receivables End Balance of the Receivables to General Ledger Reconciliation report (Accounting Amount), but only if:

    • There is no Other Accounting Amount. Other Accounting includes items that do not display on the Aging report, such as manual journals and offset accounting for Intercompany activity.

    • Unapplied and Unidentified Receipts post to a receivables account. Unapplied and Unidentified receipts that do not post to a receivables account may display in the difference column of the Reconciliation Report, unless they are excluded when you run the report.

  • Unaccounted Amounts: The Receivables Aging by Account report does not display unaccounted activity. Unaccounted amounts display as differences in the Summary Reconciliation report. In this case, compare the Accounting End Balance with the Receivables Aging by Account report. You will need to subtract out any amount in Other Accounting, as this is not included in the Receivables Aging by Account report.

  • Receipts at Risk: The Receivables Aging by Account Report has the option to display or ignore Receipts at Risk. The Receivables to General Ledger Reconciliation report does not use this option, and always excludes receipts at risk. For reconciliation purposes, be sure to exclude receipts at risk when running the Receivables Aging by Account report.

  • Open Credits: The Receivables Aging by Account report has the option to Age, Summarize or Exclude open credits. For reconciliation purposes, it is recommended that you Age or Summarize open credits.

Recommendations for Reconciling by Business Unit

To reconcile by Business Unit, you need to have an implicit mapping of the business unit to one or more primary balancing segment values. When you run the Extract Reconciliation Data from Receivables to General Ledger program, you must specify both the business unit to reconcile and the balancing segment value or range of values assigned to that business unit. The business unit parameter selects the receivables activity and the balancing segment value selects the accounting data.

Recommendations for Reconciling Intercompany Activity

You have three options for reconciling Intercompany activity:

  • Include Intercompany activity with other Receivables activity.

  • Exclude Intercompany activity from reconciliation.

  • Include only Intercompany activity.

If you want to include Intercompany activity with other Receivables activity, set the Include Intercompany parameter to Yes and include the Intercompany account in the range of account values to extract. By default, if no account range is selected, all accounts with the Financial Category of Accounts Receivable are included in the extract.

If you want to exclude Intercompany activity from reconciliation, set the Include Intercompany parameter to No, and also exclude the Intercompany range of accounts from the extract.

If you are reconciling only the Intercompany activity, set the Include Intercompany parameter to Intercompany Only, and select the account range for your Intercompany Receivables accounts.

FAQs for Close Receivables Accounting Period

How are accounts reconciled to general ledger?

The Receivables to General Ledger Reconciliation report only reconciles accounts receivable for accrual basis accounting, and only reconciles accounting in the primary ledgers.

The Receivables to General Ledger Reconciliation report reconciles the transaction types that impact the accounts receivable in general ledger. These include:

  • Invoice

  • Debit memo

  • Credit memo

  • On-account credit memo

  • Chargeback

  • Adjustment

  • Applied receipt

  • On-account receipt

  • Unapplied receipt

  • Unidentified receipt

Note

On-account credit memo refund amounts and on-account credit memo gain or loss amounts are included in the Invoices section of the Reconciliation report, because they affect the open balance of the receivable amount of the credit memo. In all cases the intent is to close the credit memo, so both the original credit memo and the activity against it are displayed.

The report also reconciles manual journal entries created in the Receivables subledger.

If your business unit is implicitly mapped to the primary balancing segment value in the chart of accounts, you can run the report to reconcile by either business unit or ledger. If there is no implicit mapping, then you must reconcile by ledger.

Note

This mapping is not defined anywhere in Oracle Fusion Receivables or Oracle Fusion General Ledger.

What happens to accounting periods during reconciliation?

When you drill down in the Receivables to General Ledger Reconciliation report, you see real-time details that make up balances from the summary report. In order to guarantee that the summary balance for each type of activity agrees with the drilldown detail, you must ensure that you limit access to an accounting period when you run the Extract Reconciliation Data from Receivables to General Ledger program. Otherwise additional activity might be added to that period after the extract has run.

Set the accounting period status to Closed or Close Pending. You typically set the accounting period to Close Pending during the review process, and then reopen the period if adjusting entries need to be added. You must ensure that the subsequent accounting period is open, in order that business operations continue during the reconciliation process.

If the period status is set to Closed, Oracle Fusion Receivables checks for incomplete invoices and orphan accounting lines. These validation checks are not performed under a Close Pending status.

Either status will prevent additional entries in the closed period.

Note

You cannot reopen a Closed or Close Pending Receivables accounting period once the general ledger accounting period has been closed. This guarantees that the subledger is properly synchronized to the general ledger.

What's a variance amount?

A variance amount is a line in the Receivables to General Ledger Reconciliation report that displays the total amount of variance between transactional and accounted amounts.

Variance amounts are due to some type of data corruption. There are two types of variance amounts: receivables variance and accounting variance. A receivables variance is the result of data corruption in the Receivables tables. An accounting variance is the result of data corruption either in subledger accounting or the general ledger. Variance amounts do not display in any other section of the summary or detail reports.

The Receivables to General Ledger Reconciliation Accounting variance report captures information related to these two causes of data corruption:

  • Accounting entries in general ledger sourced from subledger accounting that are present in the general ledger tables, but not available in the subledger accounting tables.

  • Accounting entries transferred from the subledger to general ledger that are present in the subledger accounting tables, but are not available in the general ledger tables.

Why can't I close an accounting period?

One or more exceptions are preventing you from closing the accounting period.

Set the period status to Close Pending and run the Subledger Period Close Exceptions report. This report provides detailed information about your accounts, including any exceptions that may prevent you from closing an accounting period. After you clear the exceptions, you can close the accounting period.

What's the difference between a closed and close pending accounting period?

To set an accounting period to the Closed status, you must first clear any unposted items. Once an accounting period is closed, journal entry, transaction entry, and posting are not allowed unless you reopen the accounting period.

The Close Pending status differs from the Closed status in two ways:

  • This status does not validate for unposted items.

  • You can still create journal entries for activity that existed in the accounting period prior to setting it to Close Pending.