Invoice Accounting

For Receivables invoices, the invoice amount is debited to a receivable account and credited to what is referred to as a “partner account” in Joint Venture Management. In Oracle Receivables, this partner account can be viewed under the Revenue accounting class on each invoice line.

The following example illustrates the accounting in Receivables for a joint venture invoice.

Account	Debit	Credit
Receivable Account	30,000 USD	None
Partner Account (Revenue account class)	None	30,000 USD

If partner contributions are used to cover distributed costs, there might be cases where the contribution only partially covers the costs. In this situation, the remaining costs are billed to partners through Receivables invoices. The invoice captures both the partner contribution amount and the billed amount in separate invoice lines. The partner contribution amount is written to the partner contribution account defined for the joint venture.

The following example illustrates the accounting in Receivables when a distributed cost of 50,000 USD is completely covered by the partner contribution, resulting in a zero amount invoice.

Account	Debit	Credit
Joint venture partner contribution account (Revenue account class) (11-1001-49003-11-0001)	50,000 USD	None
Partner Account (Revenue account class) (11-1001-49002-11-0001)	None	50,000 USD
Receivable	0	None

The following example illustrates the accounting in Receivables when a distributed cost of 30,000 USD is partially covered by the partner contribution of 20,000 USD. The Receivable invoice line shows the remaining 10,000 USD to be recovered from the stakeholder.

Account	Debit	Credit
Receivable	10,000 USD	None
Joint venture partner contribution account (Revenue account class) (11-1001-49003-11-0001)	20,000 USD	None
Partner Account (Revenue account class) (11-1001-49002-11-0001)	None	30,000 USD

For Payables invoices, the invoice amount is debited to a partner account and credited to a liability account. In Oracle Payables, the partner account can be viewed under the Item Expense accounting class on each invoice line.

The following example illustrates the accounting in Payables for a joint venture invoice.

Account	Debit	Credit
Partner Account (Item Expense account class)	30,000 USD	None
Liability	None	30,000 USD

If the joint venture is set up to add revenue to partner contributions, each partner's share of the revenue is added to partner contributions instead of being paid to the partner. The following example illustrates the accounting in Payables when a distributed revenue of 30,000 USD is added to a partner contribution, resulting in a zero amount Payables invoice.

Account	Debit	Credit
Partner Account (Item Expense account class)	30,000 USD	None
Liability	0	None
Partner Contribution Account	None	30,000 USD

If you use invoice netting, the process creates either a Receivables or Payables invoice based on the net balance, or it can always create a Receivables invoice depending on your configuration.

The following example illustrates the accounting for a net Receivables invoice with a debit receivable. In this scenario, the distributed revenue is 200 USD and the distributed cost is 600 USD, resulting in a net amount of 400 USD to be recovered from the stakeholder:

Account	Debit	Credit
Receivable	400 USD	None
Partner Account (for distributed revenue) (11-1502-56666-11-0001)	200 USD	None
Partner Account (for distributed cost) (11-1001-49002-11-0001)	None	600 USD

The following example illustrates the accounting for a net Receivables invoice with a credit receivable, when invoice netting is configured to always create a Receivables invoice, regardless of whether the net balance is a debit or a credit. In this case, the distributed revenue of 600 USD exceeds the distributed cost of 200 USD, resulting in a net amount of 400 USD to be credited to the stakeholder.

Account	Debit	Credit
Receivable	None	400 USD
Partner Account (for distributed revenue) (11-1502-56666-11-0001)	600 USD	None
Partner Account (for distributed cost) (11-1001-49002-11-0001)	None	200 USD