Oracle Fusion Receivables Process & Setups at a glance.

This series of articles aims to be a quick launchpad into Fusion Receeivables without spending hours going through numerous pages of user/implementation guides.We will do three 20minutes recap into Fusion Receivables starting with this fisrt on in series.

Simply put under receivables process Invoice is generated Amount against which payment is received & revenue recognized. However basic business process remaining the same, Oracle Fusion Receivables provides considerable business efficiency over earlier releases. Lets see how?

1.    Bill Customer, which includes the creation and processing of invoices and billing adjustments, as well as template-based bill presentment options

2.    Manage Revenue, which includes the processing of revenue and revenue adjustments with timely, accurate and event-based revenue recognition

3.    Process Customer Payments, which includes the processing and application of customer payments, processing of bank deposits and clearing accounts receivables transactions, and processing refunds

4.    Mange Accounts Receivable, which includes managing customer inquiries, processing late charges and customer statements, as well as, adjusting customer balances through automated or manual write-offs of invoices and receipts.

5.    Managing Accounts Receivable also provides quick access to generating Subledger Accounting for all accounting events, reconciling receivables to the general ledger, and performing period close activities

6.    To assist users with their daily and period-end activities, integration with Business Intelligence Analytics and Transactional Business Intelligence provides easy-to-use predefined reports, embedded analytics and user-configurable reporting.

•          Automated creation of billing in a variety of formats to suit your company needs

•          Automation of customer payment processing with new Smart Receipts engine for more efficient cash application

•          Receivables management that includes interactive reporting for quicker reconciliation and period close cycle

•          Contingency based Revenue Management

•          Easy access to billing and payment information for managing customer inquiries and performing account adjustments

Fusion Receivables can be configured to seamlessly integrate with banks and payment processors for quicker settlement of customer payments. Oracle Business Intelligence Analytics provides Real-time as well as data warehouse based analytics embedded within the application.

Business process Vs Set-up in Fusion Receivables

Each detailed business process carries its own setup activities. However, Define Common Accounts Receivable Configuration and Define Subledger Accounting Rules cross all four of the Receivables detailed business processes.  Fusion setups are accessible via Functional Setup Manager (FSM) Receivables setups available as part of Financials offering

Various roles that can perform Receivables business activities mentioned above are defined in oracle fusion are as follows, these roles inherit necessary access to perform necessary activities

There are seven configuration(+ONE for autoinvoice) tasks necessary to create an operational Receivables environment,Perform these seven tasks in the order indicated:

Set Receivables System Options: Set Receivables system options to customize your Receivables environment. During Receivables setup, you specify your accounts,customer and invoice parameters, and how the AutoInvoice and Automatic Receipts programs operate.

Define Receivables Activities :  Define receivables activities to default accounting information for the activities you need, such as miscellaneous cash, discounts, late charges, adjustments, and receipt write-off applications, Bank Error,Credit Card Chargeback/refund, Earned Discount, Payment Netting

Prepayment, unearned Discount

Define Auto Accounting Rules:Defining Auto Accounting is a required configuration task for processing customer billing.

Define Auto Accounting to specify how you want Receivables to determine the default general ledger accounts for transactions.Receivables creates default accounts for revenue, receivable, freight, tax, unearned revenue, unbilled receivables, late charges, and AutoInvoice clearing (suspense) accounts using this information.

Define Receipt Classes and MethodsDefining receipt classes and receipt methods is a required configuration task for processing customer payments. Receipt classes determine the required processing steps for receipts to which you assign receipt methods with this class. These steps include confirmation, remittance, and clearance. Receipt methods specify accounting for receipt entries and applications, determine customer remittance bank account information, and configure automatic receipt processing and fund transfer error handling.

Define Remit-to AddressesDefine remit-to addresses to let your customers know where to send payment for open receivables. Receivables uses the addresses to provide default remit-to information when you enter transactions. You must provide a remit-to address to complete a transaction. If you use AutoInvoice, but have not defined a remit-to address for a particular customer site, AutoInvoice rejects all transactions for which it could not determine a remit-to address.

Define Approval LimitsDefine approval limits to determine whether a Receivables user can approve adjustments or credit memo requests. You define approval limits by document type, amount, reason code, and currency.

Define Statement CyclesDefine statement cycles to control when you create customer statements. You assign statement cycles to customer profiles

Setting Up Data for AutoInvoice To ensure that the AutoInvoice process works properly, you need to prepare Oracle Fusion Receivables for any new data that you want to import. If your original system uses any setup data which is not yet defined in Receivables, you must define this data within Receivables before using AutoInvoice. There are these points to consider when setting up data for AutoInvoice:

1 Data Checklist Ensure that you have set up and updated the appropriate records in Receivables and related applications.Add or update this setup data:

• Add or import customers, if your original system contains data for customers that are not yet defined in Receivables.

• Add units of measure, if your original system uses units of measure not yet defined.

• Add or update in Oracle Fusion General Ledger this data:

• Currencies, if your original system uses currencies not yet defined.

• Accounting flexfield segment values, if your original system uses values not yet defined.

• Add or update in Oracle Fusion Tax this tax data:

• Tax rates assigned to tax rate codes that are not yet defined.

• Tax rates associated with products shipped to specific locations.

• Full or partial customer and item tax exemptions.

• Add or update these Receivables lookup codes:

• Free on Board (FOB) lookup codes, if your original system uses FOB point codes not yet defined.

• Freight carrier lookup codes.

• Add or update this Receivables data:

• AutoAccounting (This is a required setup to use AutoInvoice)

• Payment terms

• Transaction types

• Transaction sources

• Salespersons

• Revenue scheduling rules

2 AutoInvoice Setup

3 Transaction Flexfield

Fusion Receivables with inherent integration with Fusion SubledgerAccounting provides accounting engine that allows organizations to establish their own accounting rules and procedures as well as supports multiple accounting representations and currency treatments.  This integration enables an organization to support multiple geography and reporting requirements with little to no additional effort.

Receivables have defined the event classes.  An event class is equivalent to a Receivables document such as Invoice or Credit Memo. For each event class, we have event types.  For all event classes, with the exception of event class Receipt event type Create and Update is provided.An accounting event for an AR invoice, for example, would be the creation or adjustment of the invoice.  Similarly, for an AR receipt, accounting events would be the creation, application, or reversal of the receipt.  Any time one of these actions is taken on a receipt transaction, an accounting event will be created.  Based on the rule setup, there may or may not be a resulting journal entry

You can update auto accounting setups under setup & maintenance

Quick Process steps after Fusion Receivables setups are done

1 Create Customer

2 Bill Customer/Create Invoice

3 Print Bills using Standard Pre-Defined Templates

Use Pre-defined templates for your bill presentment with minimum personalization

•          Update with your company logo

•          Verify the default attributes to be included in the printed document

•          Set your  template as a Default Template in BI Publisher

•           List of pre-defined templates

•            Default Invoice Template

•            Default Credit Memo Template

•            Default Debit Memo Template

•            Default Chargeback Template

•            Default Balance Forward Bill Detail Template

•            Default Balance Forward Bill Summary Template

As & when needed Retrieve Printed Invoice in Application

No more following up with IT support on invoicing errors, business users can Correct Auto invoice errors by downloading error data in excel, correct errors & upload corrected invoices!

4 Receive & Apply Payments

•          Lockbox eliminates manual data entry by automatically processing receipts that are sent directly to the bank. Specify how this information is transmitted and how Receivables validates the data and creates receipt batches. Lockbox can also automatically identify the customer who remitted the receipt and determine how to apply the receipts to the customer's outstanding debit items.

•          Receipts via Spreadsheet integrates with Microsoft Excel to efficiently capture Receipts data while offline in a field office. The spreadsheet can be later uploaded to the system to create receipt batches.

•          Intuitive and efficient manual standard receipt entry uses sophisticated defaulting to reduce the amount of data that needs to be entered to create a receipt. It also leverages the enhancements to the automatic receipt application engine to immediately match the entered remittance advice information to open receivables transactions and apply the receipts.

•          Automatic Receipts integrates with Oracle Fusion Payments to provide convenient processing and management of Credit Card and Bank Account Transfer payments.   It automatically generates receipts for customers with whom you have predefined agreements that let you collect payments on time by transferring funds from the customer's bank account to yours on the receipt maturity date.

Most Frequently used method like lockbox are easier to manage as users can correct errors using ADFdi integration & even create receipts using spreadsheet.

•          multiple lockbox transmission file formats

•          error correction via spreadsheet for ease of use

•          The SmartReceipts application engine to increase the hit rate based on remittance advice from your customer, and also factors related to customer payment history when remittance advice is missing or incorrect

Leverage the new SmartReceipts engine

•          Increases the receipt application hit rate based on customer remittance advice

•          Generates recommendations based on receipt reference information when receipt cannot be automatically applied

Receipt Remittance Reference information can be uploaded for an existing receipt in Receivables via excel upload. The Excel integration leverages the “Apply Receipts using AutoMatch” process to automatically match and apply receipts to invoices based on the uploaded remittance advice information, drastically reducing the time required for manual data entry and receipt application

Automatic Receipts: Errors Needing Manual Correction Pushed for User Review

Key Differences from R12

More for later in this series stay tuned for next Article on this subject!!

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