Oracle Account Receivable

Invoice Adjustment And Receipt Write Off
By Himanshu Madan Evosys

PART I (Adjustments & Approval)

• An Adjustment in AR is an amount added or subtracted from the amount due of an Invoice, Debit Memo, Chargeback, Deposit or Guarantee. • For example, your customer sends payment of $75 for a $100 invoice—you apply the receipt to the invoice, then create a adjustment for the balance due. • You can create multiple adjustments against each transaction, for positive or negative amounts. • You can approve adjustments that are within your approval limits and give pending statuses to adjustments that are outside your approval limits.

Business Need for Adjustment
• If there is any unapplied balance in invoice after application of receipt in small value for rounding off purpose , that will be adjusted while making receipt application. • when Invoice amount is wrongly entered you can also add a line by adding or reducing amount.

Adjustment & Transaction Type
• Receivables uses the transaction type of the transaction you are adjusting to validate the adjustment amount. If the transaction type does not allow over application, you cannot enter an amount that would reverse the sign of the balance of the transaction. • Adjustments do not follow the natural application rules. This lets you adjust transactions in either direction, regardless of the Natural Application setting.

Topics covered for Adjustment & Approval • Define Adjustment Activity • Define Adjustments Approval Limits • Create Adjustments Manual Adjustments Automatic Adjustments API (Application Programming Interface using SQL) (Doc ID 808758.1) • Approve Adjustments • Reports • FAQs .

Adjustment Activity Receivables >> Set up >> Receipts >> Receivable Activity Revenue Nature Account .

e. . separate limit for every currency. i.Adjustment Approval Limit • Account Receivables >> Set Up >> Transactions >> Approval Limits Approval Limits are defined per user per currency.

Create Adjustment Manual Adjustments Transaction Through Form Transaction Summary Receipt .

Manual Adjustment Transaction Form • Enter Transaction or query through Document No. complete it and select Adjust in Action Tab. .

Manual Adjustment Transaction Summary Form • Query transaction through Document No and select Adjust .

Manual Adjustment Receipt Form Open Receipt and click on Apply button Click on Adjustment Button .

Adjustment Window (With in approval Limit) The following screen allows you to enter the adjustment details. between -1000 to 5000 Means can approve . regardless of the navigation used to get here. Balance Updated Choose Activity from List of Values (LOV) defined in precious steps With in Limit . i.e.

Accounting Entry Invoice Entry Adjustment Entry .

Adjustment Window (Not in Approval Limit) Adjustment Date has to be later then Transaction Date Balance not updated as adjustment is not approved .

User with Approval Authority will approve Adjustment Account Receivables >> Controls >> Adjustments >> Approval Adjustments Form .

Adjustment will get approved .

Accounting Entry .

Due Dates. Transaction Types.Automatic Adjustments Account Receivables >> Controls >> Adjustments >> Create Auto Adjustments Form Enter the Low and High range of Remaining Amounts or Percentages. . or Customer Names to adjust only transactions matching that criteria.

Approving Adjustments • Control >> Adjustments >> Approve Auto Adjustments .

• Adjustment Journal Report Use this report to view Adjustment Journals. . • Adjustment Register Use the Adjustment Register to review approved adjustments. reasons.Related Reports • Adjustment Approval Report To see your transaction adjustments with information about their status. creator. GL date and amount.

.FAQs • While entering an adjustment amount you receive the following error "value entered is not valid for current field please re-enter." What should be done? Adjustment Limit for that user have not been defined.

User creating the adjustment doesn’t have approval power. • The adjustment is approved by a user with the proper approval limits and results in error. a receipt or credit memo is created and applied to the Invoice to fully pay/credit it. thus status becomes Pending Approval.FAQs • Invoice Created and Completed • Invoice Type Adjustment Created to bring invoice balance to zero. . • Meanwhile. At this point the balance of the invoice is zero.

due to a payment that was made to the invoice between the time the adjustment was created in pending status and the time the adjustment was approved.• Cause An adjustment of type Invoice indicates that you are adjusting the full balance of the invoice. . However. when in fact the invoice already has a zero balance. the sequence of events causes the process to try to adjust an invoice for the full amount.

you cannot go back to the adjustment and attempt to change the adjustment type. • If the applications are valid. • If the applications are not valid. you can unapply them to restore the full balance of the invoice. if an adjustment is Pending Approval.• Recommended Action Review the applications done to the Invoice and determine if you want to retain them. then you can just reject the adjustment. if you do this the form will just raise the error: . then you can approve the adjustment. Note.

you will need to create an offsetting adjustment instead.FAQs • You can create full adjustments on Invoices but when making partial adjustments you get the error: APP-AR-11503: Invoice type adjustment must make the balance due zero. • If you already saved the adjustment. . Freight or Charges Recommended Action • If you have not yet saved the adjustment. you can just modify the adjustment type. the form will not allow you to change the Adjustment type. use the other Adjustment types: Line. To make partial amount adjustments. which requires you to adjust for the full balance. The Adjustment Type chosen was Invoice. Tax.

the adjustment receivable activity is not appearing in the list of values for the Category field under System Administrator responsibility. . Cause The Document Category for Adjustment Receivable Activity was not created.FAQs • When attempt to assign the Adjustment Receivable Activity to the Document Sequence. Solution Under System Administrator responsibility navigate to Application. Categories Create new category for the adjustment receivable activity. Document.

. Document. Assign and assign the new Category 'Write-Off' to the Document Sequence you already have setup. • Application = Receivables Code = 'Write-Off' (note: must be identical spelling/case of adjustment Receivable Activity name) Name = 'Write-Off' (can be anything you choose) Description = Adjustment Write Off (can be anything you choose) Table Name = AR_RECEIVABLES_TRX_ALL • Navigate to Application.setup Document Category for 'Write-Off' adjustment receivable activity.Example .

1) Receipt write-off functionality is provided to account for small overpayments that you do not intend to refund or maintain as unapplied amounts. The write-off amount is credited to an account. . Receipt write-offs can be processed for standard receipts only. You can only write off unapplied amount. Adjustments are related to Invoice component and write offs are related to Receipt component. and no longer reflects as an unapplied amount. In short . Write Off (203243. such as a miscellaneous revenue account. debit memo. You cannot write off amounts from miscellaneous receipts. chargeback.1 ) Create adjustments to increase or decrease the balance due on an invoice. or commitment.FAQs • Difference between Adjustment & Write off? Adjustment ( 188070.

PART II (Write Off) .

• You can also write off balances of multiple receipts in mass using the Create Receipt Write-off option. at any time using the Applications window. • you can choose to write off an unapplied cash receipt amount to a specific general ledger account such as a miscellaneous revenue account. • Receipt write-offs do not change receipt amounts nor do they affect customer balances or general ledger Cash account entries. . You cannot write off amounts from miscellaneous receipts.Write Off • Receipt write-off functionality is provided to account for small overpayments that you do not intend to refund or maintain as unapplied amounts. • You can write off individual unapplied receipt amounts during receipt application or later. and no longer reflects as an unapplied amount on the receipt or on the customer’s account. • Receipt write-offs can be processed for cash receipts only.

Topics covered for Adjustment & Approval • Receipt Write off Setup • Write off Foreign Currency Receipt • Receipt Write off • Reversing Receipt write off • Accounting for Receipt Write off Manual Write off Mass Write off .

• Receipt Write-off User Approval Limits Define approval limit ranges for document type Receipt Writeoff for all users who will be allowed to write off unapplied receipt amounts. .Receipt Write off Setup • Receipt Write-off Receivable Activity Define one or more receivable activities with an activity type of Receipt Write-off. • Receipt Write-off Maximum System Limit Define the system level Maximum Write-off Amount for a single receipt in your functional currency. No users can write off unapplied receipt amounts that are greater than the system maximum even if their user limits allow it.

Receipt Write-off Receivable Activity .

.Receipt Write-off Receivable Activity Approval Limits are defined per user per currency. separate limit for every currency. i.e.

Receipt Write-off Maximum System Limit .

. • If you adjust the exchange rate of a foreign currency receipt. • Receivables completes this process only if the converted amount does not exceed the user approval limit for receipt write-offs or the system Maximum Write-off Amount. Receivables uses the same exchange rate as used for original receipt. Receivables reverses the write-off with the original exchange rate and then applies the new exchange rate to a new writeoff application record. • If the converted amount exceeds either of these limits.Write off Foreign Currency Amount • At the time of write off an unapplied amount on a foreign currency receipt. then the write-off amount is left as an unapplied amount.

• You can enter multiple Receipt write-off lines in the Applications window for a single receipt provided that the write off amount is with in your approval limit and system maximum write off amount.Manually Write off Receipt Amounts • You can write off unapplied amounts when you enter and apply a receipt. or later at any time. .

Manually Write off Receipt Amounts Receivables >> Receipts >> Receipts Form Select Receipt Write Off Select Activity Defined in previous steps .

Manually Write off Receipt Amounts .

Mass Write off Receipt Amounts • you can write-off multiple unapplied receipt amounts with minimal manual intervention to individual receipt records. • You can only reverse write-off receipt amounts by manually unapplying each receipt write off from the Applications window. . • Always use the Generate Report Only option to preview the receipt amounts you want to write off before submitting the update.

Mass Write off Receipt Amounts Control>Create Receipt Write-off Enter Search Criteria System will select all unapplied Receipts which are <= 10.000 Error comes if Amount entered is not in approval limit of the user .

Pre Write off Report Write off Report .

unapply the original write-off application by unchecking the Apply check box on the Applications window for the write-off amount. . • To reverse a receipt write-off.Reversing Receipt write off • Receipt write-off amounts can be reversed at any time and the write-off amount will be added to the Unapplied total for the receipt.

Reversing Receipt write off Receivables >> Receipts >> Receipts Form Query Existing Applied Receipt Untick this check box and save your work .

Accounting for Receipt Write off Entry for General Receipt of GBP 8000 GBP 7800 Applied to transaction and GBP 200 Write off .

FAQs • How to setup an AR responsibility with disabled "Reverse " button in the receipts form? Solution Navigate to System Administrator Responsibility Security>Responsibility>define Query your responsibility name In Menu exclusion tab. select functions • Receipt Reversal Standard • Receipt Reversal Debit Memo .

FAQs • When creating Receipt write-off activities against a receipt. noted that the Balancing Segment for the GL account does not match the original setup value? Solution [ID 1068133.1] Setup > Receipts > Receivables Activities (Original Set up) Review the settings for Type = Receipt write-off Activity GL Account 01-000-4150-0000-000 Set ups >> Receipts >> Receipt Classes >> Bank Account Button Unapplied Receipt Account for Receipt Method 05-000-1240-0000-000 The value 05 from this setup is used to replace the balancing segment value default from activity GL account When Create accounting run for Write off the account shows GL account write off 05-000-4150-0000-000 .

Receivables derives the balancing segment value from the receivable account that is associated with the transaction.The existing behavior is intended functionality and is not a bug. which says • For transaction-related activities such as adjustments and discounts. • For receipt-related activities such as receipt write-off activity. (Read Oracle Receivables Implementation Guide - Disabling the Balancing Segment Substitution Process for Activities) . It is a predefined workflow as described in Oracle Receivables Implementation Guide-Deriving Balancing Segment Values. Disable Balancing Segment Substitution Process for Activities Profile Option AR: Disable Receivable Activity Balancing Segment Substitution. Receivables derives the balancing segment from the Unapplied Cash account that is associated with the receipt method bank account.

Need to write off this Small pending Amount. the Receipts get applied to Invoice. . Due to this Receipt remain open and appear in Unapplied and Unresolved Receipts Register.FAQs • How To Write-Off Prepayments Amount in case of Excess Amounts? Prepayment Received 100 Invoice Amount 98.5 When Prepayment Matching program is run.

• First Unapply the Prepayment Amount. .Solution • If we directly Write Off Prepayment. • Then Apply to "Receipt Write-Off“ The Receipt won't appear in Unapplied and Unresolved Receipts Register. Also the Receipt's Balance will be Closed. it won't work.

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