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Oracle AR Invoicing & Accounting Rule

The document discusses invoicing and accounting rules in Oracle AR. Accounting rules determine the period when revenue for an invoice line is recorded, while invoicing rules determine when the receivable is recorded. There are different types of accounting and invoicing rules that can be used, including fixed schedule, variable schedule, and daily revenue rates. Invoices can be created using these rules, then revenue recognition and accounting entries are generated.

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1K views7 pages

Oracle AR Invoicing & Accounting Rule

The document discusses invoicing and accounting rules in Oracle AR. Accounting rules determine the period when revenue for an invoice line is recorded, while invoicing rules determine when the receivable is recorded. There are different types of accounting and invoicing rules that can be used, including fixed schedule, variable schedule, and daily revenue rates. Invoices can be created using these rules, then revenue recognition and accounting entries are generated.

Uploaded by

سرفراز احمد
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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  • STEP 1: Create an Accounting/Invoicing Rule
  • Introduction to Oracle AR Invoicing & Accounting Rule
  • STEP 2: Create an Invoice Using the Above Rule
  • STEP 3: Run Revenue Recognition Program
  • STEP 4: Run Create Accounting and Check the Accounting Entries

Oracle AR Invoicing & Accounting Rule

Invoicing and Accounting Rules Let you create invoice span over several accounting periods. Accounting rules
determine the accounting period or periods in which the revenue distributions for an invoice line are recorded.

Invoicing rules determine the accounting period in which the receivable amount is recorded.

STEPS-:
I. Create an Accounting/invoicing rule.
II. Create an invoice using the above rule.
III. Run revenue recognition Program.
IV. Run Create Accounting Program and Check Accounting Entries.

Assumption: - We are following accrual basis of accounting and not cash basis of accounting.
Invoicing /Accounting rules are not applicable for an oracle system where we are using cash basis of
accounting

STEP 1-: Create an Accounting/invoicing rule

Accounting Rules-:
1. Fixed Schedule
2. Variable Schedule
3. Daily Revenue Rate, All Periods
4. Daily Revenue Rate, Partial Periods

Note-: Accounting rules are assigned at invoice line level. If required, you can have different
accounting rule for each invoice line.

1) Fixed Schedule:-

NAV-: Receivables > Setup > Transactions > Accounting Rule


2) Variable Schedule:-

NAV-: Receivables > Setup > Transactions > Accounting Rule

3) Daily Revenue Rate, All Periods-:

NAV-: Receivables > Setup > Transactions > Accounting Rule


4.) Daily Revenue Rate, Partial Periods:-

NAV-: Receivables > Setup > Transactions > Accounting Rule

Invoicing Rules-:
1. Bill In Arrears
2. Bill In Advance

1.) Bill in Arrears:-


We Use this rule. If we want to record the receivable at the end of revenue
recognition schedule.

2.) Bill in Advance:-


We use this rule if we want to record receivable immediately

Note-: Invoicing rules are assigned at invoice header level. If required, you can have only one
invoicing rule for each invoice (Irrespective of lines in an invoice)
STEP2 -: Create an Invoice using the above rule-:

1.) Invoice with ‘In Advance’ invoicing Rule-:


1.) Invoice with ‘In Arrears’ invoicing Rule-:
STEP3 -: Run Revenue Recognition Program-:

STEP4 -: Run Create Accounting and check the accounting entries-:

1. Bill in Advance-: With 5 Month Fixed Rule (Fixed Schedule) Dr. Cr.

1 st month Account Receivable 15,000


Unearned Revenue 15,000

Unearned Revenue 3,000


Revenue 3,000
2ndmonth Unearned Revenue 3,000
Revenue 3,000

3rdmonth Unearned Revenue 3,000


Revenue 3,000

4thmonth Unearned Revenue 3,000


Revenue 3,000

5thmonth Unearned Revenue 3,000


Revenue 3,000

1. Bill in Arrears-: With 5 Month Fixed Rule (Fixed Schedule) Dr. Cr.

1 st month Unbilled Receivable 3,000


Revenue 3,000

2ndmonth Unbilled Receivable 3,000


Revenue 3,000

3rdmonth Unbilled Receivable 3,000


Revenue 3,000

4thmonth Unbilled Receivable 3,000


Revenue 3,000

5thmonth Unbilled Receivable 3,000


Revenue 3,000

Receivable 15,000
Unbilled Receivable 15,000

Oracle AR Invoicing & Accounting Rule Invoicing and Accounting Rules Let you create invoice span over several accounting peri
2) Variable Schedule:- NAV-: Receivables > Setup >
4.) Daily Revenue Rate, Partial Periods:- NAV-: Receivables > Setup > Transactions >
STEP2 -: Create an Invoice using the above rule-: 1.) Invoice with ‘In Advance’ invoicing Rule-:
1.) Invoice with ‘In Arrears’ invoicing Rule-:
STEP3 -: Run Revenue Recognition Program-: STEP4 -: Run Create Accounting and check the accounting entries-: 1.
2ndmonth Unearned Revenue 3,000

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