Approval Limits
Use the Approval Limits window to define approval limits for adjustments created in Receivables, requests for credit memos initiated from iReceivables, and write-offs for receipts. Receivables uses approval limits that have a document type of Adjustment when you create an adjustment in the Adjustments, Submit AutoAdjustments, and Approve Adjustments windows.
When you enter an adjustment that is outside your approval limit range, Receivables assigns the adjustment a status of Pending until someone with the appropriate approval limits either approves or rejects it.
The Credit Memo Request Approval Workflow uses approval limits that have a document type of Credit Memo when forwarding credit memo requests from iReceivables. The workflow sends a notification to an approver if the request is within the approval limit range for the currency and reason code specified.
When you write off an unapplied receipt amount, Receivables uses approval limits that have a document type of Receipt Write-off. You cannot write off a receipt amount that is outside your approval limit range. You can only write off positive amounts.
You define Adjustment approval limits by currency and dollar amount. You define Credit Memo approval limits by reason type, currency, and dollar amount. You define Receipt Write-off approval limits by currency and dollar amount. The approval limits for write-offs are separate from, but cannot exceed, the system level write-off maximum amount that you define in the System Options window. You must specify both lower and upper approval limits for each approver.
Use the Approval Limits window to define approval limits for adjustments created in Receivables, requests for credit memos initiated from iReceivables, and write-offs for receipts. Receivables uses approval limits that have a document type of Adjustment when you create an adjustment in the Adjustments, Submit AutoAdjustments, and Approve Adjustments windows.
When you enter an adjustment that is outside your approval limit range, Receivables assigns the adjustment a status of Pending until someone with the appropriate approval limits either approves or rejects it.
The Credit Memo Request Approval Workflow uses approval limits that have a document type of Credit Memo when forwarding credit memo requests from iReceivables. The workflow sends a notification to an approver if the request is within the approval limit range for the currency and reason code specified.
When you write off an unapplied receipt amount, Receivables uses approval limits that have a document type of Receipt Write-off. You cannot write off a receipt amount that is outside your approval limit range. You can only write off positive amounts.
You define Adjustment approval limits by currency and dollar amount. You define Credit Memo approval limits by reason type, currency, and dollar amount. You define Receipt Write-off approval limits by currency and dollar amount. The approval limits for write-offs are separate from, but cannot exceed, the system level write-off maximum amount that you define in the System Options window. You must specify both lower and upper approval limits for each approver.
To define approval limits:
1. Navigate to the Approval Limits window.
2. Enter the Username of the person for whom you are defining approval limits, or select from the list of values. You define valid user names and descriptions in the Users window. For more information, refer to the Oracle Applications System Administrator's Guide.
3. Enter a Currency code. You can define multiple user approval limits for each currency defined in your system.
4. Enter a minimum approval amount in this currency for this user. You can enter either a positive or negative amount, but the From Amount must be less than or equal to the To Amount.
5. Enter a maximum approval amount in this currency for this user. You can enter either a positive or negative amount, but the To Amount must be equal to or greater than the From Amount.
Note: Credit memo approval ranges cannot overlap for limits with the same reason type and currency. For example, the approval range for primary approver JSMITH is from -200 USD to -100 USD and the reason code is Free Product. Therefore, you cannot define a credit memo approval range for primary approver AJONES from -250 USD to -150 USD and specify the same reason code.
6. If you specified a Document Type of Credit Memo, indicate whether this approver is the primary approver for this range by checking the Primary box.
7. Save your work.
1. Navigate to the Approval Limits window.
2. Enter the Username of the person for whom you are defining approval limits, or select from the list of values. You define valid user names and descriptions in the Users window. For more information, refer to the Oracle Applications System Administrator's Guide.
3. Enter a Currency code. You can define multiple user approval limits for each currency defined in your system.
4. Enter a minimum approval amount in this currency for this user. You can enter either a positive or negative amount, but the From Amount must be less than or equal to the To Amount.
5. Enter a maximum approval amount in this currency for this user. You can enter either a positive or negative amount, but the To Amount must be equal to or greater than the From Amount.
Note: Credit memo approval ranges cannot overlap for limits with the same reason type and currency. For example, the approval range for primary approver JSMITH is from -200 USD to -100 USD and the reason code is Free Product. Therefore, you cannot define a credit memo approval range for primary approver AJONES from -250 USD to -150 USD and specify the same reason code.
6. If you specified a Document Type of Credit Memo, indicate whether this approver is the primary approver for this range by checking the Primary box.
7. Save your work.
AutoInvoice Line Ordering Rules
Define invoice line ordering rules for transaction lines that you import into Receivables using AutoInvoice. AutoInvoice uses these rules to order transaction lines when grouping the transactions it creates into invoices, debit memos, and credit memos. You can assign a line ordering rule to each grouping rule.
You also assign transaction attributes to your line ordering rules. AutoInvoice uses these attributes to order invoice lines. You can assign a priority to these attributes for each of your invoice line ordering rules. You can also specify an ascending or descending order for each transaction attribute assigned to a rule.
Active invoice line ordering rules appear as list of values choices in the Grouping Rules window.
Suggestion: If you are importing transactions from Oracle Order Management, create an invoice line ordering rule with the attribute SALES_ORDER_LINE to list the items on the invoice in the same order as they appear on the sales order.
Define invoice line ordering rules for transaction lines that you import into Receivables using AutoInvoice. AutoInvoice uses these rules to order transaction lines when grouping the transactions it creates into invoices, debit memos, and credit memos. You can assign a line ordering rule to each grouping rule.
You also assign transaction attributes to your line ordering rules. AutoInvoice uses these attributes to order invoice lines. You can assign a priority to these attributes for each of your invoice line ordering rules. You can also specify an ascending or descending order for each transaction attribute assigned to a rule.
Active invoice line ordering rules appear as list of values choices in the Grouping Rules window.
Suggestion: If you are importing transactions from Oracle Order Management, create an invoice line ordering rule with the attribute SALES_ORDER_LINE to list the items on the invoice in the same order as they appear on the sales order.
To define an invoice line ordering rule:
1. Navigate to the AutoInvoice Line Ordering Rules window.
2. Enter the Name of this line ordering rule.
3. Enter a range of Effective Dates for this line ordering rule. The default start date is today's date, but you can change it. If you do not enter an end date, this line ordering rule will be active indefinitely.
4. Enter a Description of this line ordering rule (optional).
5. Enter the priority of the transaction attribute in the Sequence field. Enter a higher number to specify a lower priority transaction attribute for this invoice line ordering rule.
6. Enter the Transaction Attribute to use to order your invoice lines. Receivables uses the transaction attributes you specify to determine how AutoInvoice orders invoice lines when it groups the transactions that it creates into invoices, debit memos, and credit memos.
7. Enter the type of this line ordering attribute. Enter either 'Ascending' or 'Descending' to specify whether you want this transaction attribute to be ordered from least to greatest (Ascending), or greatest to least (Descending).
8. Save your work.
1. Navigate to the AutoInvoice Line Ordering Rules window.
2. Enter the Name of this line ordering rule.
3. Enter a range of Effective Dates for this line ordering rule. The default start date is today's date, but you can change it. If you do not enter an end date, this line ordering rule will be active indefinitely.
4. Enter a Description of this line ordering rule (optional).
5. Enter the priority of the transaction attribute in the Sequence field. Enter a higher number to specify a lower priority transaction attribute for this invoice line ordering rule.
6. Enter the Transaction Attribute to use to order your invoice lines. Receivables uses the transaction attributes you specify to determine how AutoInvoice orders invoice lines when it groups the transactions that it creates into invoices, debit memos, and credit memos.
7. Enter the type of this line ordering attribute. Enter either 'Ascending' or 'Descending' to specify whether you want this transaction attribute to be ordered from least to greatest (Ascending), or greatest to least (Descending).
8. Save your work.
Grouping Rules
Define grouping rules that AutoInvoice will use to group revenue and credit transactions into invoices, debit memos, and credit memos. Grouping rules specify attributes that must be identical for lines to appear on the same transaction.
Grouping rules include mandatory attributes which are always included in all grouping rules, and optional attributes which may be included in a grouping rule. Optional attributes may be added to the mandatory attributes to create new grouping rules. To be included in a group a transaction must always match on all of the mandatory attributes as well as on all of the optional attributes included in a grouping rule. For complete lists of the mandatory attributes and the optional attributes see the section titled "Using Grouping Rules to Create Transactions" in the Transactions chapter. All attributes of the Transaction Flexfield are optional within a grouping rule, and you can assign these attributes as optional grouping characteristics in the Grouping Rules window.
Note: The Grouping Rules window only displays the optional attributes included in a grouping rule. This window does not display any mandatory grouping attributes. The mandatory attributes are the same for all grouping rules. Use the Ordering and Grouping Rules Listing report to view all of the mandatory and optional attributes assigned to your grouping rules. See: Ordering and Grouping Rules Listing Report.
In the diagram below, the grouping rule specifies that to appear on the same invoice items must match on all of the mandatory attributes, for example currency (CURRENCY_CODE) and bill-to address (ORIG_SYSTEM_BILL_ADDRESS_ID) and must also match on the optional attribute of order type (SALES_ORDER_SOURCE). For example, in the diagram, assume that all mandatory attributes match other than currency and bill-to address. Items A and B share the same currency and order type, so they appear on the same invoice (Invoice 1). Item C has the same currency as A and B, but it has a different order type, so it appears on its own invoice (Invoice 2). Items D and E share the same currency and Order Type, so they appear on the same invoice (Invoice 3).
Define grouping rules that AutoInvoice will use to group revenue and credit transactions into invoices, debit memos, and credit memos. Grouping rules specify attributes that must be identical for lines to appear on the same transaction.
Grouping rules include mandatory attributes which are always included in all grouping rules, and optional attributes which may be included in a grouping rule. Optional attributes may be added to the mandatory attributes to create new grouping rules. To be included in a group a transaction must always match on all of the mandatory attributes as well as on all of the optional attributes included in a grouping rule. For complete lists of the mandatory attributes and the optional attributes see the section titled "Using Grouping Rules to Create Transactions" in the Transactions chapter. All attributes of the Transaction Flexfield are optional within a grouping rule, and you can assign these attributes as optional grouping characteristics in the Grouping Rules window.
Note: The Grouping Rules window only displays the optional attributes included in a grouping rule. This window does not display any mandatory grouping attributes. The mandatory attributes are the same for all grouping rules. Use the Ordering and Grouping Rules Listing report to view all of the mandatory and optional attributes assigned to your grouping rules. See: Ordering and Grouping Rules Listing Report.
In the diagram below, the grouping rule specifies that to appear on the same invoice items must match on all of the mandatory attributes, for example currency (CURRENCY_CODE) and bill-to address (ORIG_SYSTEM_BILL_ADDRESS_ID) and must also match on the optional attribute of order type (SALES_ORDER_SOURCE). For example, in the diagram, assume that all mandatory attributes match other than currency and bill-to address. Items A and B share the same currency and order type, so they appear on the same invoice (Invoice 1). Item C has the same currency as A and B, but it has a different order type, so it appears on its own invoice (Invoice 2). Items D and E share the same currency and Order Type, so they appear on the same invoice (Invoice 3).
AutoInvoice uses the following hierarchy to determine which grouping rule to use for a transaction line:
1) The grouping rule specified in the Transaction Sources window for the batch source of the transaction line
2) The grouping rule specified in the Customer Profile Classes window for the bill-to site use of the transaction line
3) The grouping rule specified in the Customer Profile Classes window for the bill-to customer of the transaction line
4) If you do not specify a rule in either the Transaction Sources or Customer Profile Classes window, AutoInvoice uses the default grouping rule specified in the System Options window.
1) The grouping rule specified in the Transaction Sources window for the batch source of the transaction line
2) The grouping rule specified in the Customer Profile Classes window for the bill-to site use of the transaction line
3) The grouping rule specified in the Customer Profile Classes window for the bill-to customer of the transaction line
4) If you do not specify a rule in either the Transaction Sources or Customer Profile Classes window, AutoInvoice uses the default grouping rule specified in the System Options window.
Receivables provides the DEFAULT grouping rule which contains all of the mandatory attributes. If you upgrade from a previous version of Receivables, the DEFAULT grouping rule initially becomes your default grouping rule. If you use the DEFAULT rule to create transactions, Receivables does not require that you define any additional grouping rules. You can add optional attributes to the DEFAULT grouping rule to create new grouping rules. You cannot delete any mandatory attributes from a grouping rule.
Attention: If you are doing a fresh install of Receivables, you must enter a default grouping rule in the System Options window. You can enter the grouping rule that Receivables provides or one that you create.
Receivables lets you assign an invoice line ordering rule to each of your grouping rules. AutoInvoice uses the invoice line ordering rule to order your transaction lines when grouping revenue and credit transactions into invoices, debit memos, and credit memos.
Attention: If you are doing a fresh install of Receivables, you must enter a default grouping rule in the System Options window. You can enter the grouping rule that Receivables provides or one that you create.
Receivables lets you assign an invoice line ordering rule to each of your grouping rules. AutoInvoice uses the invoice line ordering rule to order your transaction lines when grouping revenue and credit transactions into invoices, debit memos, and credit memos.
To define a grouping rule:
1. Navigate to the Grouping Rules window.
2. Enter a Name for this grouping rule.
3. Enter a Description for this grouping rule (optional).
4. Enter the invoice line ordering rule for this grouping rule (optional). The invoice line ordering rule tells AutoInvoice how to order transaction lines within this grouping rule.
5. Enter a range of Effective Dates for this grouping rule. The default Start Date is today's date, but you can change it. If you do not enter an end date, this grouping rule will be active indefinitely.
6. Enter the Transaction Class to define for this grouping rule. Choose from the following classes: Invoice, Debit Memo, or Credit Memo.
Note: If AutoInvoice uses grouping rules and it is processing a transaction class that is not defined for this grouping rule, AutoInvoice will only use the mandatory grouping transaction attributes.
7. Enter any Optional Grouping Characteristics you want to use to group your transactions. For example, if you enter the transaction flexfield attribute 'Attribute2' (order type), only transactions with the same order type can appear together on a transaction. Use the list of values to review the description and sources of each attribute.
Receivables ensures that you do not assign duplicate transaction class grouping characteristics to your grouping rule.
8. Save your work.
1. Navigate to the Grouping Rules window.
2. Enter a Name for this grouping rule.
3. Enter a Description for this grouping rule (optional).
4. Enter the invoice line ordering rule for this grouping rule (optional). The invoice line ordering rule tells AutoInvoice how to order transaction lines within this grouping rule.
5. Enter a range of Effective Dates for this grouping rule. The default Start Date is today's date, but you can change it. If you do not enter an end date, this grouping rule will be active indefinitely.
6. Enter the Transaction Class to define for this grouping rule. Choose from the following classes: Invoice, Debit Memo, or Credit Memo.
Note: If AutoInvoice uses grouping rules and it is processing a transaction class that is not defined for this grouping rule, AutoInvoice will only use the mandatory grouping transaction attributes.
7. Enter any Optional Grouping Characteristics you want to use to group your transactions. For example, if you enter the transaction flexfield attribute 'Attribute2' (order type), only transactions with the same order type can appear together on a transaction. Use the list of values to review the description and sources of each attribute.
Receivables ensures that you do not assign duplicate transaction class grouping characteristics to your grouping rule.
8. Save your work.
Application Rule Sets
Use the Application Rules Sets window to review existing and define new application rule sets. Application rule sets specify the default payment steps for your receipt applications and how discounts affect the open balance for each type of associated charges. By defining your own application rule set, you can determine how Receivables reduces the balance due for a transaction's line, tax, freight, and finance charges.
Receivables provides the following application rules:
1-> Line First - Tax After: Apply to the open line item amount first. Apply any remaining amount in the following order: tax, freight, and then finance charges.
2-> Line and Tax Prorate: Apply a proportionate amount to the open line item amount and the open tax amount for each line. Apply any remaining amount to freight and then to finance charges.
3-> Prorate All: Apply a proportionate amount to the line, tax, freight, and finance charges.
Use the Application Rules Sets window to review existing and define new application rule sets. Application rule sets specify the default payment steps for your receipt applications and how discounts affect the open balance for each type of associated charges. By defining your own application rule set, you can determine how Receivables reduces the balance due for a transaction's line, tax, freight, and finance charges.
Receivables provides the following application rules:
1-> Line First - Tax After: Apply to the open line item amount first. Apply any remaining amount in the following order: tax, freight, and then finance charges.
2-> Line and Tax Prorate: Apply a proportionate amount to the open line item amount and the open tax amount for each line. Apply any remaining amount to freight and then to finance charges.
3-> Prorate All: Apply a proportionate amount to the line, tax, freight, and finance charges.
To define an application rule set:
1. Navigate to the Application Rule Sets window.
2. Enter a Name and Description for this rule set.
3. Enter the Sequence number for this application rule. Receivables applies payments in this sequence, beginning with the lowest sequence number.
Note: You cannot enter a sequence number for the Overapplication rule. By default, this rule is last in the sequence for each application rule set.
4. Enter an application Rule. Each rule will correspond to a line type (for example, lines, freight, or charges), so you should give your rule a descriptive name. Each rule set must have at least one application rule.
Attention: Receivables automatically assigns the Overapplication rule to each application rule set. You cannot delete this rule. The Overapplication rule applies any remaining amount after the balance due for each item has been reduced to zero. If the transaction type of the debit item allows overapplication, this rule prorates the remaining amount between each line and its associated tax amount, making these amounts negative. If the transaction type does not allow overapplication, you can either place the remaining amount on-account or leave it 'Unapplied'.
5. Enter Rule Details for this application rule. This section indicates the type of charges and the tax handling for this rule. Choose a Type of Line, Freight, or Charges. You need to enter at least one type for your rule set.
6. If you chose a Type of 'Line', choose a Tax Treatment. Choose one of the following:
Prorate: Choose this option to proportionately reduce the net amount of the line and associated tax amounts.
Before: Choose this option to first reduce the open tax amount, then apply any remaining amount to the line.
After: Choose this option to reduce the open line amount, then apply any remaining amount to the associated tax.
Note: The default Tax Treatment for your Freight and Charges types is None. This option ignores tax, since you cannot tax freight and charges in Receivables. You cannot choose None for your Line type.
7. To automatically adjust this line type to account for any rounding corrections within this rule set, check the Rounding Correction box. When an amount is prorated among several line types, Receivables must use one of the line types to account for the rounding adjustment. Each application rule set must have one and only one rounding correction line type.
Suggestion: Assign the Rounding Correction to the line type that is usually the largest portion of your invoices. By doing this, the rounding correction will have the least effect on the overall remaining and applied amounts for this line type.
8. Repeat the previous steps for each rule you want to add to this rule set.
9. Save your work.
10. When you are satisfied with this rule set definition, check the Freeze box. Receivables verifies that your application rule set is defined properly and that it does not violate any basic application guidelines. If this rule set fails validation, Receivables displays an error message. In this case, modify your rule set definition, then check the Freeze box again to revalidate it.
Attention: A rule set must be 'frozen' before you can assign it to a transaction type or use it as your default rule it in the System Options window. Additionally, after you freeze an application rule set, you cannot update or delete it.
1. Navigate to the Application Rule Sets window.
2. Enter a Name and Description for this rule set.
3. Enter the Sequence number for this application rule. Receivables applies payments in this sequence, beginning with the lowest sequence number.
Note: You cannot enter a sequence number for the Overapplication rule. By default, this rule is last in the sequence for each application rule set.
4. Enter an application Rule. Each rule will correspond to a line type (for example, lines, freight, or charges), so you should give your rule a descriptive name. Each rule set must have at least one application rule.
Attention: Receivables automatically assigns the Overapplication rule to each application rule set. You cannot delete this rule. The Overapplication rule applies any remaining amount after the balance due for each item has been reduced to zero. If the transaction type of the debit item allows overapplication, this rule prorates the remaining amount between each line and its associated tax amount, making these amounts negative. If the transaction type does not allow overapplication, you can either place the remaining amount on-account or leave it 'Unapplied'.
5. Enter Rule Details for this application rule. This section indicates the type of charges and the tax handling for this rule. Choose a Type of Line, Freight, or Charges. You need to enter at least one type for your rule set.
6. If you chose a Type of 'Line', choose a Tax Treatment. Choose one of the following:
Prorate: Choose this option to proportionately reduce the net amount of the line and associated tax amounts.
Before: Choose this option to first reduce the open tax amount, then apply any remaining amount to the line.
After: Choose this option to reduce the open line amount, then apply any remaining amount to the associated tax.
Note: The default Tax Treatment for your Freight and Charges types is None. This option ignores tax, since you cannot tax freight and charges in Receivables. You cannot choose None for your Line type.
7. To automatically adjust this line type to account for any rounding corrections within this rule set, check the Rounding Correction box. When an amount is prorated among several line types, Receivables must use one of the line types to account for the rounding adjustment. Each application rule set must have one and only one rounding correction line type.
Suggestion: Assign the Rounding Correction to the line type that is usually the largest portion of your invoices. By doing this, the rounding correction will have the least effect on the overall remaining and applied amounts for this line type.
8. Repeat the previous steps for each rule you want to add to this rule set.
9. Save your work.
10. When you are satisfied with this rule set definition, check the Freeze box. Receivables verifies that your application rule set is defined properly and that it does not violate any basic application guidelines. If this rule set fails validation, Receivables displays an error message. In this case, modify your rule set definition, then check the Freeze box again to revalidate it.
Attention: A rule set must be 'frozen' before you can assign it to a transaction type or use it as your default rule it in the System Options window. Additionally, after you freeze an application rule set, you cannot update or delete it.
Receivables Application Rule Sets
Application Rule Sets determine the steps Receivables uses to apply partial payments to your customer's open debit items and how discounts affect the open balance for each type of associated charges. Transactions usually consist of line items, tax, freight, and finance charges, or a combination of these. Depending on your business needs, you can reduce each associated charge proportionately, close the outstanding tax amount first, or apply a payment to the line and tax amounts and use any remaining portion to reduce the freight and finance charges.
Application Rule Sets let you specify how Receivables reduces the balance of your open debit items when you:
1-> Apply a receipt to an invoice or debit memo
2-> Run Post QuickCash
You can assign a rule set to each of your transaction types and enter a default rule set in the System Options window. Receivables uses the following hierarchy to determine which application rule set to use, stopping when one is found:
1. Transaction Type
2. System Options
Application Rule Sets determine the steps Receivables uses to apply partial payments to your customer's open debit items and how discounts affect the open balance for each type of associated charges. Transactions usually consist of line items, tax, freight, and finance charges, or a combination of these. Depending on your business needs, you can reduce each associated charge proportionately, close the outstanding tax amount first, or apply a payment to the line and tax amounts and use any remaining portion to reduce the freight and finance charges.
Application Rule Sets let you specify how Receivables reduces the balance of your open debit items when you:
1-> Apply a receipt to an invoice or debit memo
2-> Run Post QuickCash
You can assign a rule set to each of your transaction types and enter a default rule set in the System Options window. Receivables uses the following hierarchy to determine which application rule set to use, stopping when one is found:
1. Transaction Type
2. System Options
Application Rule Sets
Receivables provides the following predefined Application Rule Sets. You can view these rule sets and create your own rule sets in the Application Rule Sets window.
Receivables provides the following predefined Application Rule Sets. You can view these rule sets and create your own rule sets in the Application Rule Sets window.
Line First - Tax After
This rule set first applies the payment to the open line amount, and then applies the remaining amount to the associated tax. If the payment is greater than the sum of the line and tax, Receivables attempts to close each open item by applying the remaining amount in the following order, stopping when the payment has been fully applied:
1. Freight
2. Finance charges
Any remaining receipt amount is applied using the Overapplication Rule. This is the default application rule set in the System Options window.
This rule set first applies the payment to the open line amount, and then applies the remaining amount to the associated tax. If the payment is greater than the sum of the line and tax, Receivables attempts to close each open item by applying the remaining amount in the following order, stopping when the payment has been fully applied:
1. Freight
2. Finance charges
Any remaining receipt amount is applied using the Overapplication Rule. This is the default application rule set in the System Options window.
Line and Tax Prorate
This rule set applies a proportionate amount of the payment to the open line and tax amount for each line. If the payment is greater than the sum of the open line and tax amounts, Receivables attempts to close each open item by applying the remaining amount in the following order, stopping when the payment has been fully applied:
1. Freight
2. Finance charges
Any remaining receipt amount is applied using the Overapplication Rule.
This rule set applies a proportionate amount of the payment to the open line and tax amount for each line. If the payment is greater than the sum of the open line and tax amounts, Receivables attempts to close each open item by applying the remaining amount in the following order, stopping when the payment has been fully applied:
1. Freight
2. Finance charges
Any remaining receipt amount is applied using the Overapplication Rule.
Prorate All
This rule set applies a proportionate amount of the payment to each open amount associated with a debit item (for example, any line, tax, freight, and finance charge amounts for this item).
Receivables uses the following formula to determine the applied amount:
Applied Amount = open application line type amount / sum of application line types in rule details * Receipt Amount
Any remaining receipt amount is applied using the Overapplication Rule
This rule set applies a proportionate amount of the payment to each open amount associated with a debit item (for example, any line, tax, freight, and finance charge amounts for this item).
Receivables uses the following formula to determine the applied amount:
Applied Amount = open application line type amount / sum of application line types in rule details * Receipt Amount
Any remaining receipt amount is applied using the Overapplication Rule
Overapplication Rule
Each application rule set includes an Overapplication Rule by default. This rule applies any remaining receipt amount after the balance due for all charges has been reduced to zero. If the transaction type for the debit item has the Allow Overapplication check box set to Yes, Receivables applies the remaining amount to the lines, making the balance due negative. If the item's transaction type has Allow Overapplication set to No, you can either place the remaining amount on-account or leave it 'Unapplied'.
Each application rule set includes an Overapplication Rule by default. This rule applies any remaining receipt amount after the balance due for all charges has been reduced to zero. If the transaction type for the debit item has the Allow Overapplication check box set to Yes, Receivables applies the remaining amount to the lines, making the balance due negative. If the item's transaction type has Allow Overapplication set to No, you can either place the remaining amount on-account or leave it 'Unapplied'.
Application Rule Sets Example
This example shows how Receivables applies a payment using each predefined application rule set.
You have the following invoice:
Invoice #123
Line = $1,000
Tax = $140
Freight = $200
Total = $1,340
Your customer remits a partial payment of $1040 for this invoice. The table below shows how Receivables applies the payment using each of the three predefined application rule sets.
This example shows how Receivables applies a payment using each predefined application rule set.
You have the following invoice:
Invoice #123
Line = $1,000
Tax = $140
Freight = $200
Total = $1,340
Your customer remits a partial payment of $1040 for this invoice. The table below shows how Receivables applies the payment using each of the three predefined application rule sets.
Calculations for Applying Payments Using Application Rules:
Line First - Tax After
First apply payment to open line amount; apply any remaining amount to tax.
Line and Tax Prorate
1 (1040/1140) * 1000 = 912.28
(Receipt Amount / Total Line and Tax) * Line Amount = Line Amount Applied
2 (1040/1140) * 140 = 127.72
(Receipt Amount / Total Line and Tax) * Open Tax Amount = Tax Amount Applied
Prorate All
3 (1040/1340) x 1000 = 776.12
(Receipt Amount / Invoice Total) x Open Line Amount = Line Amount Applied
4 (1040/1340) x 140 = 108.66
(Receipt Amount / Invoice Total) x Open Tax Amount = Tax Amount Applied
5 (1040/1340) x 200 = 155.22
(Receipt Amount / Invoice Total) x Open Freight Amount = Freight Amount Applied
Line First - Tax After
First apply payment to open line amount; apply any remaining amount to tax.
Line and Tax Prorate
1 (1040/1140) * 1000 = 912.28
(Receipt Amount / Total Line and Tax) * Line Amount = Line Amount Applied
2 (1040/1140) * 140 = 127.72
(Receipt Amount / Total Line and Tax) * Open Tax Amount = Tax Amount Applied
Prorate All
3 (1040/1340) x 1000 = 776.12
(Receipt Amount / Invoice Total) x Open Line Amount = Line Amount Applied
4 (1040/1340) x 140 = 108.66
(Receipt Amount / Invoice Total) x Open Tax Amount = Tax Amount Applied
5 (1040/1340) x 200 = 155.22
(Receipt Amount / Invoice Total) x Open Freight Amount = Freight Amount Applied
Accounting Rules
Define accounting rules to create revenue recognition schedules for your invoices. Accounting rules determine the number of periods and percentage of total revenue to record in each accounting period. You can use accounting rules with transactions that you import into Receivables using AutoInvoice and with invoices that you create manually in the Transaction windows. You can define an unlimited number of accounting rules.
Depending on your business needs, you may require deferred accounting rules, which you can create by selecting the Deferred Revenue check box during rule definition. Deferred accounting rules let you defer revenue to an unearned revenue account until you are ready to specify the revenue recognition schedule.
Define accounting rules to create revenue recognition schedules for your invoices. Accounting rules determine the number of periods and percentage of total revenue to record in each accounting period. You can use accounting rules with transactions that you import into Receivables using AutoInvoice and with invoices that you create manually in the Transaction windows. You can define an unlimited number of accounting rules.
Depending on your business needs, you may require deferred accounting rules, which you can create by selecting the Deferred Revenue check box during rule definition. Deferred accounting rules let you defer revenue to an unearned revenue account until you are ready to specify the revenue recognition schedule.
You can assign a default accounting rule to your items in the Master Item window (Invoicing tabbed region) and to your Standard Memo Lines in the Standard Memo Lines window.
Attention: Invoicing and Accounting Rules are not applicable if you are using the Cash Basis method of accounting. If you use the Cash Basis method, AutoInvoice will reject any transaction lines that are associated with invoice or accounting rules.
If you want to credit an invoice that uses invoice and accounting rules to schedule revenue and billed receivable recognition, you can specify how you want to adjust this invoice's revenue account assignments by choosing a Rules Method in the Credit Memos window.
If you want to credit an invoice that uses invoice and accounting rules to schedule revenue and billed receivable recognition, you can specify how you want to adjust this invoice's revenue account assignments by choosing a Rules Method in the Credit Memos window.
To define an accounting rule:
1. Navigate to the Invoicing and Accounting Rules window.
2. Enter a Name for this accounting rule.
3. Enter an accounting rule Type. Enter 'Accounting, Fixed Duration' to prorate revenue recognition evenly over a predefined period of time. The revenue recognition schedule is always the same every time you choose this accounting rule. For example, if you have four schedules for your rule with this type, you will recognize twenty-five percent of your revenue at the end of each schedule.
Enter 'Accounting, Variable Duration' to be able to specify the number of periods over which you want to recognize revenue for invoices to which you assign this rule. You can assign this type of accounting rule to invoices that you manually enter in the Transaction window or import into Receivables using AutoInvoice. The revenue recognition schedule changes for invoices that are assigned this type of accounting rule depending upon the value that you either pass through AutoInvoice or specify when you manually enter an invoice.
4. Enter the Period to use for your accounting rule schedule. You can choose from any of the Period Types you defined, but you can only choose a period type that has overlapping dates if it is an adjusting period. In addition, you can only choose 'Specific Date' as your period type for accounting rules to which you have assigned a type of 'Accounting, Fixed Duration.' You can only update this field for the accounting rule 'IMMEDIATE.' See: Defining Period Types.
Attention: If you have an accounting period type that is not 'Month' and you use AutoInvoice with Oracle Order Management, you should update the Period field for the 'IMMEDIATE' accounting rule to the same period as your accounting period type.
5. If this accounting rule type is 'Accounting, Fixed Duration,' enter the Number of Periods to use for your accounting rule schedule. For example, if you entered a period of 'Weekly' and you enter '3' here, Receivables creates a rule schedule for three weekly periods.
6. If you want to delay specifying the revenue recognition schedule for this rule, check the Deferred Revenue check box. If you select this check box, then revenue is deferred to an unearned revenue account, and you must later use the Revenue Accounting wizard to recognize the revenue. See: Deferred Accounting Rules.
7. Define your revenue recognition schedule for this accounting rule. Enter the percentages of revenue to recognize within each period of your accounting rule.
If this accounting rule type is 'Accounting, Fixed Duration,' Receivables displays a rule schedule according to the period and number of periods you entered. Receivables determines the schedule by evenly prorating all the revenue across all periods (you can change this information). The sum of all periods for this type must equal 100 percent.
If this accounting rule type is 'Accounting, Variable Duration,' you do not need to enter any information. Receivables does not display the default rule schedule for an accounting rule of this type because the number of periods is unknown. However, if you want to recognize a specific revenue percentage in the first period, you can enter that percentage here. In this case, Receivables prorates the remaining revenue percentage across the remaining periods. Receivables uses the number of periods that you either pass through AutoInvoice or enter manually in the Transaction window to determine the payment schedule of your accounting rule.
8. If this accounting rule type is 'Accounting, Fixed Duration,' and you choose Specific Date as your period, enter specific dates for each period of the revenue recognition schedule for this rule.
9. Save your work.
1. Navigate to the Invoicing and Accounting Rules window.
2. Enter a Name for this accounting rule.
3. Enter an accounting rule Type. Enter 'Accounting, Fixed Duration' to prorate revenue recognition evenly over a predefined period of time. The revenue recognition schedule is always the same every time you choose this accounting rule. For example, if you have four schedules for your rule with this type, you will recognize twenty-five percent of your revenue at the end of each schedule.
Enter 'Accounting, Variable Duration' to be able to specify the number of periods over which you want to recognize revenue for invoices to which you assign this rule. You can assign this type of accounting rule to invoices that you manually enter in the Transaction window or import into Receivables using AutoInvoice. The revenue recognition schedule changes for invoices that are assigned this type of accounting rule depending upon the value that you either pass through AutoInvoice or specify when you manually enter an invoice.
4. Enter the Period to use for your accounting rule schedule. You can choose from any of the Period Types you defined, but you can only choose a period type that has overlapping dates if it is an adjusting period. In addition, you can only choose 'Specific Date' as your period type for accounting rules to which you have assigned a type of 'Accounting, Fixed Duration.' You can only update this field for the accounting rule 'IMMEDIATE.' See: Defining Period Types.
Attention: If you have an accounting period type that is not 'Month' and you use AutoInvoice with Oracle Order Management, you should update the Period field for the 'IMMEDIATE' accounting rule to the same period as your accounting period type.
5. If this accounting rule type is 'Accounting, Fixed Duration,' enter the Number of Periods to use for your accounting rule schedule. For example, if you entered a period of 'Weekly' and you enter '3' here, Receivables creates a rule schedule for three weekly periods.
6. If you want to delay specifying the revenue recognition schedule for this rule, check the Deferred Revenue check box. If you select this check box, then revenue is deferred to an unearned revenue account, and you must later use the Revenue Accounting wizard to recognize the revenue. See: Deferred Accounting Rules.
7. Define your revenue recognition schedule for this accounting rule. Enter the percentages of revenue to recognize within each period of your accounting rule.
If this accounting rule type is 'Accounting, Fixed Duration,' Receivables displays a rule schedule according to the period and number of periods you entered. Receivables determines the schedule by evenly prorating all the revenue across all periods (you can change this information). The sum of all periods for this type must equal 100 percent.
If this accounting rule type is 'Accounting, Variable Duration,' you do not need to enter any information. Receivables does not display the default rule schedule for an accounting rule of this type because the number of periods is unknown. However, if you want to recognize a specific revenue percentage in the first period, you can enter that percentage here. In this case, Receivables prorates the remaining revenue percentage across the remaining periods. Receivables uses the number of periods that you either pass through AutoInvoice or enter manually in the Transaction window to determine the payment schedule of your accounting rule.
8. If this accounting rule type is 'Accounting, Fixed Duration,' and you choose Specific Date as your period, enter specific dates for each period of the revenue recognition schedule for this rule.
9. Save your work.
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