Oracle Receivables

1. What are the two key flexfields in Oracle Receivables and what is its purpose ?

Location Flexfield : - Mandatory

This Flexfield is used for calculating the Location based tax (i.e) Sales tax.

Territory Flexfield : (Max 20 segments) - Optional

This Flexfield is used for tracking the location in which the sale is taking place.
This Flexfield is for ascertaining the profitability of each of the sales location
through generating reports.

2. What are the modules that are interfaced with Oracle Receivables ?

i. General Ledger
ii. Order Management
iii. Fixed Asset
iv. Inventory

3. What is Auto invoice ? What are its related setup steps ?

Auto invoice is the process used for importing the transactions from feeder moudles
like project accounting, order entry etc.
and also from exisiting applications/systems if the receivable moudle is installed for the first
time.

To invoke auto invoicing the navigations is

Interfaces : Auto Invoices
Run a program called AutoInvoice Master Program and specify the Invoice source
and submit it.
if any error occured during validation all the transactions will be stored in the below
mentioned tables

RA_INTERFACE_ERRORS_ALL

4. What are the database tables involved for performing Autoinvoice ?

1. RA_INTERFACE_LINES_ALL
2. RA_INTERFACE_SALESCREDITS_ALL
3. RA_INTERFACE_DISTRIBUTIONS_ALL

5. What is an Application Rule set ?

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:

•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.
 •Line First - 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.

•Prorate All: Apply a proportionate amount to the line, tax, freight, and finance
charges.

6. What is a flexible address format ? How can a user-defined format be defined

and where will this be affected ?

Oracle Applications let you enter customer, supplier, bank, check, and remit–to addresses in
country–specific formats. For example, if you have customers in Germany, you can enter
German addresses in the format recommended by the Bundespost, or you can enter
addresses for customers in the United Kingdom in the format recommended by the Royal
Mail.
This is done by using descriptive flexfields to enter and display address information in the
appropriate formats. The flexfield window opens if the country you enter has a flexible
address style assigned to it, which lets you enter an address in the layout associated with
that country. If there is no address style associated with the country, Oracle Receivables
uses the standard address format.
Attention: (Receivables users only) If you use a Sales Tax Location Flexfield that contains a
segment other than country and wish to set up a flexible address format for your home
country, every component in your Sales Tax Location Flexfield structure must also exist in
your flexible address style for that country.

7. What do you mean by Auto Accounting ?

It helps the Receivables to determine the general ledger accounts for transactions
that are entered manually or import using AutoInvoice.
Receivables creates default accounts for revenue, receivable, freight, tax, unearned
revenue,unbilled receivable, finance charges, bills receivables accounts, and
AutoInvoice clearing (suspense) accounts using this information.
When you enter transactions in Receivables, you can override the default general
ledger accounts that AutoAccounting creates.
You can control the value that AutoAccounting assigns to each segment of your
Accounting Flexfield, such as Company, Division, or Account.
You must define AutoAccounting before you can enter transactions in Receivables.
8. What are the different classes of Transactions available in Receivables ?

(i) Chargeback (ii) DebitMemo (iii) Credit Memo (iv) Deposit (v) Guarantee (vi)
Invoice

9. What are Transaction Sources ?

Receivables uses transaction sources to control the transaction and
transaction batch numbering, provide default transaction types for transactions in batch,
and to select validation options for imported transactions. Receivables provides the following
predefined transaction sources: MANUAL–OTHER, DM Reversal, and Chargeback.
10. What are Adjustment Approval Limits ? Where & why are they used ?

Approval limits, defined in the approval limits window are used for adjustments
created in receivables and request for credit Memos initiated from I-Receviables.
 Receivables uses transactions that have a document type of Adjustment when we
create an adjustment in the Adjustments, Submit Auto Adjustments and Approve
Adjustments windows.

When you enter an adjustment that is outside the approval limit range,
Receivables assigns the adjustment a status of pending until someone with the
appropriate approval limits either approves or rejects it.

11. What are the pre-requisites for entering a standard invoice in Receivables ?

Transaction source and Transaction Type, Customer with Business purpose usage
and payment terms should have been predefined. and the class should be
selected as Invoice.

12. What are the types of tax methods in Receivables ?

(i) Location Based Tax (i.e) Sales Tax (ii) VAT Tax

13. What is an Autocash Rules ?

Autocash rule set provides a set of rules which Receivables should follow for applying
the receipts against the transactions.The default autocash rule set can be specified in
the System Option.

14. What are Accounting Rules and Invoicing Rules ? Where it is used ?

Accounting rules is to create revenue recognition schedules for the invoices.

Accounting rules determine the number of periods and
percentage of total revenue to record in each accounting period. It can be used with
transactions that are imported into Receivables using AutoInvoice and with invoices that
was created manually in the Transaction windows.

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.
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.
15. What is revenue recognition ?
Run the Revenue Recognition program to generate the revenue distribution
records for your invoices and credit memos that use
Invoicing and Accounting Rules. You assign accounting rules to recognize revenue over
several accounting periods. The Revenue Recognition program will create distribution
records for the invoices and credit memos that you create in Receivables and import using
AutoInvoice.
The Revenue Recognition program uses the accounting distribution sets that you specify in
the Transactions window or import into Receivables
using AutoInvoice to determine the accounts of your newly created revenue distribution
records.

There are two Revenue Recognition programs: Revenue Recognition and Revenue
Recognition Master. The Revenue Recognition Master program is for parallel processing only
and takes advantage of the Oracle scalability feature to reduce processing time by running
on multiple processors, or workers. The Revenue Recognition Master program determines
the maximum number of parallel processors needed for your transaction volume and
uniformly distributes the processing over these workers. You can set a maximum number of
processors for the Revenue Recognition Master program to use at runtime. This scheduling
capability allows you to take advantage of off–peak processing time. You choose the
Revenue Recognition program that you want to use at runtime.
16. What are the pre-requisies for entering a Manual receipt in AR ?

Invoices should have been defined against which the receipts will be applied and
the payment method should be predefined and attached to the receipts.

17. What is a Receivable Activity ?

It is an activity specific to the organisational needs for Miscellaneous Receipts,

Finance Charges, Bank Errors and Adjustment transactions.

18. What are Receipt Classes and Receipt Sources ?

Receipt Class : It is to define the processing steps, payment method name,

remittance bank for processing the payments received from customers.

Receipt Source : It will be used to enter receipts in batches for both manual and
automatic receipts. It is a grouping of Receipt class, Payment method and
Remittance bank account.

19. What are Statement Cycles ? How can you print a Statement for a customer ?
Statement cycles is to determine when to send statements to the customers.
You assign these cycles to your customer and site level profiles. Receivables lets you
generate statements for all customers associated with a specific statement cycle.
20. What is Autolockbox ? What are its related steps ?
AutoLockbox (or Lockbox) is a service that commercial banks offer corporate
customers to enable them to outsource their accounts receivable payment processing. An
AutoLockbox operation can process millions of transactions a month.

AutoLockbox eliminates manual data entry by automatically processing receipts that are
sent directly to your bank. You specify how you want this information transmitted and
Receivables ensures that the data is valid before creating QuickCash receipt batches. You
can automatically identify the customer who remitted the receipt and optionally use
AutoCash rules to determine how to apply the receipts to your customer’s outstanding debit
items.

You can also use AutoLockbox for historical data conversion. For example, you can use
AutoLockbox to transfer receipts from your previous accounting system into Receivables.
AutoLockbox ensures that the receipts are accurate and valid before transferring them into
Receivables.

AutoLockbox is a three step process:

1. Import: During this step, AutoLockbox reads and formats the datafrom your bank file into
the AutoLockbox table using an SQL*Loader script.

2. Validation: The validation program checks data in theAutoLockbox tables for compatibility
with Receivables. Oncevalidated, the data is transferred into QuickCash tables. At this point,
you can optionally query your receipts in the QuickCashwindow and change how they will be
applied before submitting thefinal step, Post QuickCash.

3. Post QuickCash: This step applies the receipts and updates yourcustomer’s balances.
21. What is an Aging Bucket ?

Aging Bucket are time periods that are used to review and report on open
receivables. For example. The 4 bucket aging buket that receivables provides
consists of 4 periods :

(i) -999 - 0 past due

(ii) 1 - 31 days past
due
(iii) 31 - 61 days past due

(iv) 61 - 91 days past due

When we create our collection reports or view our customer accounts, we can specify
an Aging Bucket and 'as of date' and Receivables will group the transaction and their
amounts in the appropriate days past due period.

22. What are Tax Exemptions, Tax Exceptions and Tax Groups ?

Exemptions : It is to reduce the gross tax associated with a tax code and enables us
to arrive at the effective tax rate. It can be applied on customers,items and Range of
items. It can be restricted to the specific locations of the customers. The tax
authorities can specify excemptions for Location based taxes and Vat.

Exceptions : When the tax authorities provides a different Location based tax rate for
the inventory items sent to specific Locations, this rate is refered to as Tax Exception
rates. It can be applicable for individual Inventory or range of Items and not for
customers.

Tax Groups : It is used to group multiple VAT codes. Hence we can apply multiple
VAT codes to a single distribution line. For Example :
Grouping GST and Ontario PST and apply that tax group to a distribution line. The
tax calculation creates two tax lines, one for GST and other for Ontario PST.

23. What are Dunning Letters ?

Dunning Letters are the Warning/Reminder letters to the customers for their
overdues.

24. What are Grouping Rules and Line Ordering Rules ?

Grouping Rules : It specifies how the lines, which have been imported from
external sources should be grouped into Invoices, Debit memo and Credit
memos. Auto Invoices requires mandatory grouping of certain transactions
 attributes. Receivables automatically applies this mandatory transactions to any
grouping rule which have been defined. Therefore the grouping rules specify the
attributes, which should be identical across the lines, so that they can form part
of one transactions.

Line Ordering Rules : It specifies the order and number in which the lines will
appear in the transaction after it is grouped. We can attach the Line Ordering
Rule to the same grouping rule . Line ordering Rule is optional.

25. What are Bill Receivable Transactions ? What are its related setup steps ?
A bill receivable is a document that your customer formally agrees to pay at
some future date (the maturity date). The bill receivable
document effectively replaces, for the related amount, the open debt exchanged for the bill.
Bills receivable are often remitted for collection and used to secure short term funding.
Related Setup Steps :

26. What are taxable Basis available for a Tax Code ?

(i) Before Tax (ii) After Tax (iii) Prior Tax (iv) Quantity Based Tax.

27. What are the various Discount basis available for defining a payment term ?
Invoice Amount: Calculate the discount amount based on the sum of the tax, freight
charges, and line amounts of your invoices.
Lines Only: Calculate the discount amount based on only the line amounts of your invoices.
Lines, Freight Items and Tax: Calculate the discount amount based on the amount of line
items, freight, and tax of your invoices, but not freight and charges at the invoice header
level.
Lines and Tax, not Freight Items and Tax: Calculate the discount amount based on the
line items and their tax amounts, but not the freight items and their tax lines, of your
invoices.
28. What are Natural Application Only and Allow Over Application options in
transaction types ?

Natural Application Only : Receivables does not allow the creation sign (Positive,
Negative or any sign) of the transaction to be changed by virtue of receipt
application or any other activity against the transaction. For Example : if the
Receipt is $1500 against the Invoice value of $1000 then the Receivable allows
only $1000 to be applied against the transaction and thus the balance is brought
down to 0.

Allow Over Application : Receivables will allow the transactions to be overapplied.

If the Receipt is $1500 against the Invoice value of $1000 then the receivables
will allow the entire balance and the due for the transaction will become -$500.
(i.e) It will allow the creation sign to be violated.

29. What are Transmission Formats ? What are the transmission formats provided
by receivables ?

Transmission format window is used to define the transmission formats that auto
lockbox uses when importing data into receivables. Transmission formats specify
how data in the lockbox bank file is organised so that it can be successfully
 imported into the receivables interface tables.

1. Example (arxmpl.ctl) : A format that contains an example of lockbox header

information, several receipt records, and overflow receipt records

2. Default (ardefd.ctl) : A standard BAI (Bank Administration Institute) format

used by most banks.

3. Convert (arconv.ctl) : A standard format used for transferring payment

information from other systems.

4. Cross Currency (arxcurr.ctl) : A default format used for importing cross

currency receipts.

5. Zengin (arzeng.ctl) : A format used to import bank files in the japanese Zengin
format (Alternate Names Receipt Matching Window)

30. What are various Business Purpose Usages given by receivables, which can be
assigned to a customer ?

Ship-to, Bill-to, Statement, Dunning, Legal, Marketing Etc. are the various
Business purpose Usages given by Receivabels. The Bill-to site is mandatory for a
customers. Others are Optional.

31. What are Customer Profile Classes ?

The Customers are categorized in terms of thier credit worthiness, credit limits
offered to them, payment terms, finance charges percentage etc. This process of
setting the profile parameters for each category of customers is refered to as the
profile class.

32. What are the Customer Interface Tables provided in AR ?

1. RA_CUSTOMER_INTERFACE
2.
RA_CUSTOMER_PROFILES_INTERFACE
3.
RA_CUSTOMER_BANKS_INTERFACE
4.
RA_CUST_PAY_METHOD_INTERFACE
5.
RA_CONTACT_PHONES_INTERFACE

33. What are Standard Memo Lines ?

Memo lines are used to increase the customer balance which could be due to omission
of tax, freight, charges, consultanting charges.

34. What is the Transaction Process of invoices with Rules ?

Invoicing rules let you determine when to recognize your receivable for invoices that
span more than one accounting period. You can assign invoicing rules to invoices that you
manually enter or import into Receivables through AutoInvoice. Receivables provides the
following invoicing rules:

• Bill in Advance: Use this rule to recognize your receivableimmediately.

 • Bill in Arrears: Use this rule to recognize the receivable at the end of the
revenue recognition schedule.

Once rules have been associated with an invoice, Receivables creates therevenue
distributions for the invoice when you run the Revenue Recognition program
for the period in which the rules fall.

35. What is the difference between Deposit and Gurantee Transactions ?

Deposit : It is the pre-payments made by a customer that should be adjusted

against the future debit transactions that are raised with respect to this pre-
payments.

Gurantee : It is a documentation of the promise made by the customer to obtain the

goods from the organisation. This promise is documented as a gurantee. The
customer does not make payment for the guarantee.

36. What are the methods of creating credit transactions ?

37. What are methods of creating batch receipts ?

There are three methods of creating batch receipts:

1. Manual Entry 2. Manual Quick 3. Automatic

38. What are Standard and Factoring Methods of Remittance ?

Standard remittance : The supplier remits the bills of exchange to the bank for
collection and the same will be collected on the maturity date of the note.

Factored remittance : It means dicounting the bills of exchange with the bank
before the maturity date. The onus of collection could be with recourse or
without recourse.

39. What are Standard Remittances and Bills Receivable Remittances ?

Standard remittance is remitiing the cheque/dd to the bank for collection.

Bills Receivable remittances means remitting the Bills Receivable to the bank for
collection on maturity date.

40. What are the various statuses for a receipt ?

Approved : This receipt has been approved for automatic receipt creation. This status is
only valid for automatic receipts.
Confirmed : For manually entered receipts, this status indicates the receipt belongs to a
receipt class that requires remittance. For
automatic receipts, this status indicates the receipt has been confirmed.
Remitted : This receipt has been remitted. This status is valid for both automatic and
manually entered receipts.
Cleared : The payment of this receipt was transferred to your bank account and the
bank statement has been reconciled within
Receivables. This status is valid for both automatic and manually entered
receipts.
Reversed : This receipt has been reversed. You can reverse a receipt when your customer
stops payment on a receipt, if a receipt comes
from an account with non–sufficient funds or if you want to re–enter and
reapply it in Receivables. You can reverse cash receipts and miscellaneous receipts.
41. What are chargebacks and adjustments ? How to create them ?

Chargeback is postpoment of payment date.It can be done only in the receipts

workbench.In this process the old invoice is cancelled and a new transaction is
created for the postponed date.

42. What are Standard Reversal and Debit memo Reversal in receipts ?

Standard Reversal: When you create this type of reversal, Receivables automatically
creates reversal journal entries for your general ledger and reopens all of the debit and
credit items that were closed with the original receipt. You can create a standard reversal
for a transaction related to a chargeback if there is no activity against the chargeback and
the chargeback has not been posted to the general ledger. If the chargeback has been
posted to the general ledger, you must create a debit memo reversal (see below).
If you create a standard reversal for a receipt that you have applied, Receivables reverses
any adjustments or chargebacks that you created, as long as you have not posted these
adjustments to your general ledger.
Debit Memo Reversal: When you create this type of reversal, Receivables does not
update any of the receipt activity associated with the original receipt. The new debit memo
reversal is actually a new receivable that replaces the item closed by the original receipt.
Receivables requires that you create a debit memo reversal if:
– you are reversing a receipt that you previously applied to a chargeback and this
chargeback has had any activity against it (for example, another receipt, credit memo, or
adjustment), or
– the chargeback or adjustment was posted to your general ledger When you create a debit
memo for a receipt reversal, Receivables creates a line on your debit memo that displays
the original receipt number associated with the debit memo. In addition,when you save your
reversal, Receivables assigns a unique transaction number to your new debit memo.
Attention: You cannot create a debit memo reversal for a miscellaneous (non–invoice
related) receipt.
43. What are Cross Currency Receipts ? How do you create them ?
When your customer remits payment for an invoice, debit memo, or chargeback, the receipt
is usually in the same currency as the transaction. However, there may be times when your
customer remits payment in a currency that is different than the currency of the open debit
item. For these occasions, Receivables lets you create cross currency receipt applications
to let you fully or partially process the payment.
For example, you create Invoice 101 in Canadian dollars (CAD) but your customer sends a
receipt in Deutsche marks (DEM) as payment.
Using the remittance information provided by your customer, you can either fully or partially
apply this receipt to Invoice 101. Receivables automatically calculates the open balance on
the invoice (if any) and the foreign exchange gain or loss (FXGL) for this application.
You can apply receipts to transactions using any currency defined in Oracle General Ledger.
44. What are the setups related to Automatic Receipts ?
Receivables automatic receipts feature to automatically generate receipts for customers
with whom you have predefined agreements. These agreements let you collect payments on
time by transferring funds from the customer’s bank account to yours on the receipt
maturity date. You can also manage your cash flow by deciding when, where, and how
much you should remit to your bank.
Creating automatic receipts involves three steps:
Create: Select the invoices to include in your automatic receipts.
Approve: Update, delete, and approve the receipts that you have selected.
Format: Format your automatic receipts onto paper to send to your customer for
confirmation or notification before remitting them to your bank on either paper or magnetic
media. This step is optional, as it depends upon the type of automatic receipt you create.
45. What are the clearance methods in Receivables and how are they used ?
Directly: Choose this method if you do not expect the receipts to be remitted to the bank
and subsequently cleared. These receipts will be assumed to be cleared at the time of
receipt entry and will require no further processing. Choosing this method is the same as
setting Require Bank Clearance to No in previous releases of Receivables.
By Automatic Clearing: Choose this method to clear receipts using the Automatic
Clearing program.
By Matching: Choose this method if you want to clear your receipts manually in Oracle
Cash Management.