Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

TOPIC Page No.

General ledger 03-31

Multi Org – MOAC 32-32

Account Payables 33-76

EBT, India Localization, SLA 77-81

Account Receivables 82-119

Fixed Assets 120-151

Cash Management 152-165

R12 New Features 163-174

Period Close Procedure 175-184

Interview Questions 185-208

Accounting Entries 209-207

Tables 208-208

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

1. Opening the periods

2. Enter / Import journals
3. Review journals
4. Post journals – Inquiry
5. If require – Run revaluation
6. If require – Run Translation for consolidation
7. Review results
8. Prepare financials
9. Close the current period
10. Open next period

FLEX FIELDS IN GENERAL LEDGER:

1. Key Flex Fields
2. Descriptive Flex Fields

Key Flex Fields: 38 KFF are available in R12

a. General Ledger:
i. Accounting KFF
ii. Reporting Attribute KFF – For reporting purpose.
iii. GL Ledger KFF – It is a mirror image of Accounting KFF. It is only for internal purpose.
It is used exclusively for certain GL features such as Mass Allocations, Recurring Journals
and FSG Reports.

b. Receivables:
i. Sales Tax Location Flex Field
ii. Territory Flex Field

c. Fixed Assets:
i. Asset Category KFF
ii. Asset Location KFF
iii. Asset key KFF (optional)

d. Payables: No KFF in Payables.

Descriptive Flex Field: If you want to have additional field in standard forms, DFF is used to capture the
additional information of organization.

FLEX FIELD QUALIFIERS (ASSIGN TO SEGMENTS)

1. Balancing Segment FFQ
2. Cost Center Segment FFQ
3. Natural Accounts Segment FFQ
4. Inter Company Segment FFQ
5. Secondary Tracking Segment FFQ
6. Management segment FFQ

1. Balancing Segment: We generally assign these qualifiers for “Company” segment, where usually
balances are maintained.

2. Cost Centre Segment: We generally assign these qualifiers to “Department” segment, where costs are
spend or even gain.

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3. Natural Accounts Segment: We generally assign these qualifiers for “Accounts” segment, where it
consist of accounting categories such as Expenses, Revenue, Assets, Liabilities and ownership.

4. Inter Company Segment: (Optional): We generally assign these qualifiers for “COMPANY” segment,
using these qualifiers we are able to perform intercompany transactions.

5. Secondary tracking Segment: (Optional): Using these qualifiers we are able to identify secondary
tracking segment to process income statement, closing transactions and revaluation.
 If we assign Secondary tracking segment FFQ to any Segment, that segment also will behave as
Balancing Segment.
 In other words, secondary tracking segment FFQ is similar to balancing segment FFQ.
 But we cannot assign Secondary tracking segment FFQ for the segment for which already
Intercompany, Balancing and Natural accounts FFQ are assigned.

6. Management Segment Qualifier: (New in R12)

MSQ is used in Data Access set for allowing privileges to user other than balancing segment values.
But we cannot assign Management segment FFQ for the segment for which already Intercompany,
Balancing and Natural accounts FFQ are assigned.

Segment Qualifiers (Assign to Segment values)

1. Allow Budgeting
2. Allow Posting
3. Account type (Assets / Liability / Expenses / Revenue / Ownership)
4. Third party control
5. Reconcile

Assignment of FFQ to Segments

• Company Balancing Segment FFQ, Intercompany Segment FFQ
• Department Cost Center Segment
• Accounts Natural Accounts Segment FFQ

Note:
One FFQ we can use only one time.
One segment we can assign to more than one FFQ.
We can create maximum 30 segments apart from General Ledger Segment (Total 31).

Note:
11i – Control Account / R12- Third Party Control Account R12 includes new functionality to control
specific natural account segment values by setting the ‘Third Party Control Account’ segment
qualifier. General Ledger (GL) can restrict the posting of manual journals to third party control accounts.
This will ensure that journal lines that post to account codes such as the Supplier Liability Account
or Customer Receivables Accounts are associated with valid third party information in the respective sub
ledger. The creation of transactions against specific accounts can be restricted to the sub ledgers such as
Oracle Payables and Receivables depending on how the qualifier value has been set. Using such account
control will require third party information from the relevant sub ledger.

Let’s now consider a working example. Your organization has a business policy in place to ensure that
Supplier information is captured when raising transactions within Oracle Applications using account 5115
(Miscellaneous Expense). In order to ensure that this business process is adhered to, you will need to set the

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‘Third Party Control Account’ Segment Qualifier, against account 5115, specifying the value ‘Supplier’ (as
shown below).

Once the segment qualifier has been set, direct journal entries within GL will not be permitted. Should an
entry be attempted, the following message will be displayed since no supplier information has been
captured against this transaction.

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Chart of Accounts - Compile Structure
 Enable “Enabled “ in the form
 Segment separator is used to separate the segments in the code combination. (Dash, Period, Pipe and
Custom)
 Cross Validation rules
 Freeze Rollup Groups
 Allow Dynamic Inserts:
If we enable Allow Dynamic inserts, then we are able to enter the all possible code combinations
at the time of transaction entry.
If we want to know how many code combinations in our structure, multiply the number of
values across the segments.
If we disable allow dynamic inserts, we cannot enter all possible code combinations at the time
of transaction entry.
 Enable “Freeze Flex Field Definition” and click on “Compile” button.
 The structure information will get stored in a tabular form GL_Code_Combinations_KFV

Primary Ledger (Set of Books In 11i) – 4 C’s

In 11i we were having only 3C’s
• Chart of Accounts (Structure, Segments & Segment values)
• Currency
• Calendar
• Accounting Convention Method (Accrual / Cash)

Currency: 3 types
Monitory currency: Functional Currency, Foreign Currency
Non Monitory currency: STAT Currency

Calendar: 2 types
Accounting Calendar: Calendar & Fiscal Calendar – Actual Balances will be used
Transaction Calendar – Average balances will be used – Banking domain
Period Type: General ledger has 3 standard period types:
1. Month
2. Quarter
3. Year
• Period types are used in defining Accounting Calendar.
• When you assign a calendar to a ledger using Accounting Setup Manager, the ledger only accesses the
periods with the appropriate period type.
• You can assign up to 366 accounting periods per fiscal year for any period type, and maintain
actual balances for those periods.
• However, for budgets you can only use the first 60 periods.
Year Types
1. Calendar
2. Fiscal

There are 5 types of period status

Status Entry Posting
1. Never opened X X
2. Open √ √
3. Closed X X
4. Future √ X (Reopen possible)

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5. Permanently Closed X X

Pre requisites for Chart of Accounts

• Value Set
• Structure and Segments
• Segment Values

Value Set:
Value set is Set of rules or properties which are going to enforce or attach to segments.
Upon enforcing or attaching value set to the Segment, your segment will behave or act according to the
value set.
Contents of Value Set
List Type Security Type Format type Validation Type
3 Types 3 Types 7 Types 8 Types
1. List of 1. No Security 1. Char 1. Dependent
Values
2. Long List of 2. Hierarchical 2. Date 2. Independent
Values Security
3. Pop List 3. Non 3. Time 3. None (No list of approved values)
Hierarchical
Security
4. Date time 4. Pair
Security rules, 5. Standard 5. Special (provides another Flex field as a
CVR are date value set for a single segment)
applicable on
Value sets
6. Standard 6. Table (lists of approved values from
date and time existing applications tables)
7. Number 7. Translatable Independent (value set can
contain display values that are translated
into different languages.)
8. Translatable dependent ()

Validation Types in Value Set

 Independent: If validation type is independent, we can define values for the value set and we
can use at the time of transaction time.
 Dependent: If validation type is dependent, then we cannot define values for value set.
Dependent values are always depending on the independent value set.
 None: If validation type is none, then we cannot define values for the value set. User can enter
desire value at the time of transactions entry.
 Pair & Special: Used in the programs to add additional pop up window for parameters.
 Table: If validation type is table, then we cannot define values but we can use values from
tables.
 Translate dependent & Independent: We use to translate the segment values into desire
language.

Primary ledger Mandatory Accounts for PL:

1. Retained Earnings Account (Ownership)
2. Translation Adjustment Account (Expenses)
3. Suspense Account (Assets / Liabilities)

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4. Rounding Difference Account (Expenses)
5. Reserve for Encumbrance (Ownership)

Note:
From the above “Retained Earnings account” is mandatory to create primary ledger. Remaining 4 accounts
are optionally mandatory based on the requirement.

1. Retained Earnings:
Retained earnings are accumulated profits. Whereas net income means current year profits
2. Cumulative Translation adjustment account:
It is an adjusted amount while performing the revaluation with respect to translated accounts.
3. Suspense Account:
Whenever, user is going to enter Debit without credit or credit without debit or debit balances are not
matching with credit balances, in this case, system will automatically populate “Suspense” account.
Error: 6 (unbalanced journal entry, suspense not allowed)

Conversion rate types: 4

1. Spot
2. Daily
3. Corporate
4. User (Reporting)
Spot: An exchange rate which you enter to perform conversion based on the rate on a specific date. It
applies to the immediate delivery of a currency.
Daily: Day’s beginning value.
Corporate: This rate is generally a standard market rate determined by senior financial management for use
throughout the organization.
User (Reporting): An exchange rate you specify when you enter a foreign currency journal entry.

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

Journal Source

 It is used to identify the ORIGIN of the journal. Setup  Journal  Sources

 When we import data from legacy systems to GL we require source names.
 Importing journal Reference: To import detailed information from summary journals we use this
option.
 Require Journal approval: This field is used to get the journal approval by higher management for
different journal sources.
 Import using key: This is used to define whether journals will be imported using source key or not.
 Freeze Journals: To freeze the journal source, preventing users from making changes to any
unposted journals from that source, or reversing journals for Sub ledger accounting journal sources.

Effective date Rule:

1. Fail
2. Leave alone
3. Roll Date
Fail: Journal Import will reject transactions when the effective date is not a valid business day. No posting takes
place.
Leave Alone: Journal import will accept all transactions regardless of the effective date.
Roll Date: Journal Import will accept the transaction, but roll the effective date back to the nearest valid business
day within the same period. If there is no prior valid business day within the same period, the effective date is rolled
forward.
Note: The Effective Date Rule field will not appear unless you have average balance processing enabled for
at least one ledger.

Journal category
• Journal Category determines the purpose or type of the journal entry.
• When you enter a journal you specify a journal category.

With Journal Source you can:

 Define intercompany and suspense accounts for specific sources.
 Run Auto Post Program, Auto Reverse Program for specific source
 Import journals by source
 Freeze journals imported from sub ledgers to prevent users from making changes.
 If you have journal approval enabled for your ledger options, you can use journal source to
Enforce management approval of journal before they are posted.

With Journal Categories you can:

 Define intercompany and suspense accounts for specific category.

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 Use document sequence to sequentially number journals by categories.
Journal source and categories is used to differentiate journal entries and to enhance your audit trail.
Journal Sources Journal Categories
Assets AP invoices
Journal entry source
Purchasing Receipts indicates where your
Payables Year end close journal entries
Manual Adjustments originated
Budget Manual
Accruals Journal categories
help you
Revaluation differentiate entries
by purchase or type.
AP Payments

Enter Journals
• It is used to record the day to day business transactions. It contains Dr and Cr lines. Always debit
must be equal to credit. You can enter several types of journal entries, including foreign currency
journals, statistical journals, and intercompany journals.

• Journals can be created in two ways: 1. Manual 2. Import

Manual: Enter journals manually by using navigator (Third party control – In real time)
Import: Import from other modules like AP, AR or WEB ADI etc
Journals can be
Journal Body Two types of journals
created in 2 Balance types
contains 2 areas based on account type
ways
Manual Header Standard journals Actual
Import Lines Average journals Average
Encumbrance

Reverse Journal
• Once the journal is got posted it wouldn’t allow the user to make any changes even if user find any
issue in the journal. (Real-time Examples like Revaluation)
• The only solution or remedy is to reverse the journal.
• In order to reverse the journal, first review the journal, use reverse button available in the journal
window, also indicate the period where the reversal entry should get created.
Navigation: Journal  Entry
• Once we reverse the journal system will create one unposted journal, showing the earlier debit
balance to credit side & earlier credit balance to debit side.
• Post this unposted journal.
• After the journal reversal the particular account in the journal will show the balance Zero.
Reverse is of two types:
• Change sign (Profile option is required GL: Launch AutoReverse After Open Period )
• Switch Dr/Cr.
• We can reverse journals using “Auto Reverse Program”.

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BUDGETS
Budget is used for better planning and controlling of the funds for future usage. In oracle we can define
budgets up to 60 periods. There are 2 types of budgets
1. Planning Budget: (Revenue budget)
This is used for only planning purpose. System will not be controlling under this budget. For
planning budget we cannot create budget journals.
2. Funding Budget: (Expense budget)
Under funding budget we can plan and control the expenses. We can create budget journals in
funding budget.

Balance types: 3
1. Budget
2. Actual
3. Encumbrance
 Budget balances are planned amounts at initial stage.
 Actual balances are paid amounts so far.
 Encumbrance balances are reserved amounts for future payments.

Funds Check Level: 3

1. Absolute
2. Advisory
3. None
If we use absolute we cannot use more than the amount what we specified.
If we use Advisory, system will give caution if we cross the amount given
If we use None, System will not give any caution, and we can enter the more amounts also.

Amount Types: 4
1. PTD: Period to date: One month
2. QTD: Quarter to date: 3 months
3. YTD: Year to date: 1 year
4. PJTD: Project to date: Depends on project beginning date

Budget Rules: 8
1. Divide evenly
2. Repeat per period
3. 4/4/5
4. 4/5/4
5. 5/4/4
6. Prior year budget monetary
7. Current year budget monetary
8. Prior year budget STAT

Setups- BUDGETS
1. Create Reserve for encumbrance account (Liability)
2. Assign “Reserve for Encumbrance account” At Ledger options @ASM
3. Enable:
 Budgetary control
 Require Budgetary journals
4. Define Budget and open next year
5. Define Budget organization
6. Create Budget Journals

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7. Query the budget journals and post
8. Create journal entry using budget account

Navigations:
1. Define Encumberance Account At Natural Account Segment As Liability:
Setup_Financials_Flexfield_Key_Values
2. Enable Budgetory Controls And Map The Code Combination of Encumberance Account At Our
Ledger: Setup_Financials_Accounting Setup Manager_Accounting Setups (Enable Budgetary
Controls & Require Budgetary Journals)
3. Define Budgets: Budgets_Define_Budgets
4. Define Budget Organization: Budgets_Define_Organization
5. Create Budget Journals: Budgets_Enter_ Journals
6. Post The Journals: Journals_Post
7. Create Journals: Journal_Enter_New Journal
8. Check The Status of The Funds Available: Inquiry_Funds

Mass Allocation
Mass allocation means “Allocation of Revenues and cost expenses across any cost center, department or
division by using of parent values by using simple formula”.
Example: Rent paid based on square feet used.

Formula: T = A x B/C
A = Cost pool Amount (Total Cost Amt)
B = Usage factor (Usage Factor for Each Dept)
C = Total Usage (Total Usage)
T = Target Account
O = off set account

Segment types in mass allocation

1. Constant 2. Looping 3. Summing

Mass Allocation Methods

1. Full type allocation 2. Incremental Allocation

Generating Journals Using the Full Allocation Method

Choose the Full allocation method to generate journals that reverse previous allocations or to post new
allocation amounts. We recommend that you use this method only if you are allocating amounts for the first
time, or only once. To replace a previous allocation requires two steps. First, reverse the original allocation.
Second, create a mass allocation for the new amounts.

Generating Journals Using the Incremental Allocation Method

Choose the Incremental allocation method when you want to update allocated balances without reversing
the previous allocation batches. Using this method, you can generate allocation journals as many times as
you wish, provided there is no activity against the target accounts between runs. Note the Offset account is
usually the same account as formula line A to reduce the cost pool by the allocated amount.

We recommend that you do not use the incremental method the first time you generate a MassAllocation
entry. However, if you do generate your first MassAllocation entry using this method, your target balance
must be zero. Before generating incremental allocation journals, post all batches you previously generated
from the same formula batch.

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Setups:
1. Define STAT Currency
2. Create SFT account
3. Create STAT journal with SFT account
4. Set up parent department and set up parent & child relation
5. Prepare mass allocation formula
6. Run mass allocation
7. Review and post journal

Mass allocation formula:

Formula Amount Account Currency
A 100000 - -
*
B - C-L-C-C STAT (Loop is Parent Value)
/
C - C-S-C-C STAT (Sum is Parent Value)
T - C-L-C-C INR (Loop is Parent Value)
O - C-C-C-C INR

R 12 Steps:
Step: 1 Create Usage factor account and Cost pool account
Step: 2 Define Parent and child values for departments
Step: 3 Create cost pool journal and post.
Step: 4 Create and Post Statistical Journal
Step: 5 Define and Generate Mass allocation formula Journals  Define  Allocation
Step: 6 Query mass allocation journal

Types of Journals
1. Functional Currency Journal
2. Foreign Currency Journal
3. Recurring Journal
4. Tax Journal
5. Revaluation Journal
6. Suspense Journal
7. Reverse Journal
8. Mass allocation Journal
9. STAT currency Journal
10. Budget Journal
11. Batch Journal
12. Manual Encumbrance Journal

Suspense Journal
• As per accounting principles Debit amount should always equal to Credit amount for the same
Company Value.
• If both amounts are not equal, the difference amount will go to Suspense Account.

Setup required for Suspense Journal:

1. Create Suspense Account (Expenses / Revenue)
Navigation: Setup  Financials  Flex Fields  Key  Values.
2. Enable suspense account feature at ledger level under journal processing tab
Navigation: Setup  Financials  Accounting setup manager  Accounting setup

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3. Define Suspense account Rules
Navigation: Setup  Accounts  Suspense
4. Create Journal / Review Journal
Navigation: Journal  Enter.

Recurring Journal
Journals which are repeating every accounting period is called a recurring journal.
Recurring journals are 3 types:

Standard Recurring Journal:

Under standard recurring journal method same accounts with the same amounts will be effected
with the each accounting period. We know account and amount already.
Skeleton Recurring Journal:
Under skeleton journal method partial information will be entered at the time of recurring journal
creation. We know the account but do not know the amount.
Formula Recurring Journal:
Using formula recurring method, journal lines amounts will be calculated by recurring journal
program based on simple formula.

Recurring Journal Setup

Step: 1 Define Recurring Journal
Navigation: Journals  Define  Recurring.

Line: 1
Enter Expenses account (Debit Account) and the amount for Standard Recurring Journal
Enter only Debit account for Skeleton recurring, do not enter amount
Enter debit account & enter the formula for the amount for Formula recurring journal

Line: 2
Enter the credit account
We can enter 9999 lines in a recurring journal. In which 9998 lines are for debit lines and only one line is
for credit line. We call this line as offset account line. Hence we have to enter line 2 as a offset line and
key in the number 9999 in line 2.

Do not enter amount for line 2. System will add all the debit lines amount and consider the credit
amount as offset account.
If you wish to enter more credit lines, we have to give negative sign for the lines, for example -9998, -
9997 etc.

Step: 2
Generate the recurring journal = Click on “Generate” button
Say Submit
Schedule the journals for recurring.
Enter parameters
Run program.
Step: 3
Ensure Concurrent program completed Normal View  Request
Step: 4
Query the recurring journal and post. Journal  Enter.
With the above report system will generate unposted journals in GL.,
With the source: recurring.

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Post the journals after review.

Revaluation
Revaluation reflects the changes in the exchange rates.
For example:
Invoice May 5th $1000 Rs 45 Rs 45000
Payment May 10 th $1000 Rs 47 Rs 47000
If paid on May 25th $1000 Rs 43 Rs 43000
In the above example gain or loss is Rs 2000

Setup Steps:
1. Define unrealized gain or loss accounts
2. Define exchange rate type
3. Define daily rates for the date of journal entry (USD  INR)
4. Define daily rates for the date of Payment (USD  INR)
5. Enter foreign currency journal
6. Run revaluation
 Enter name and description for revaluation
 Currency Options: Choose single currency & USD
 Rate Options: Choose Daily Rates & Exchange rate type
 Choose Unrealized gain & loss accounts
Say “Revalue” and Submit request window will open
System choose automatically program as “Program – Revalue balances”

Tax Journal
Steps:
1. Enable “Journal Entry Tax” at Ledger level under “Journaling” tab @ASM
2. Define input tax codes and assign GL account
3. Set up tax options: √ Allow tax code override
4. Enter and post journal

Manual Encumbrance Journal

Encumbrance means is reserve the funds for future usage. We do not do this practice in real time.
Navigation: Journal  Encumbrance
 Category: Expenditure
 Source: Encumbrance
 Balance type: Encumbrance
 Type: Encumbrance
Approval is not applicable

Translation
 Translation is used to convert the accounting balances from Functional Currency to Foreign currency
at Balances level
 This activity is done at a particular period end
 This is an off line activity
 Translation is done at balances level
 We can report in number of currencies – No limit
 We use 3 types of rates:
 Period end rate: Assets & Liabilities (Balance sheet)
 Average rate: Expenses & Revenues (Profit and loss accounts)

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 Historical rate: Ownership
 Translation is part of “Consolidation”
 We cannot run Translation for first period

Setup Steps:
1. Create “Cumulative Translation Adjustment” account
2. Define exchange rate type
3. Define daily rates
4. Assign rate type & CTA account to ledger
5. Run Translation
6. Run Trial balance Translation report
** No journal entries will be created
** Exchange rate type is used to build relationship between the two currencies

There are various exchange rate types

1. Corporate
2. Marketing
3. User
4. Spot
 Corporate type is used for rates which are defined by the higher management in the organization.
 Market rate is at present what the rate in the market is.
 User rate: At the time of transaction entry user can enter applicable exchange rates
 Spot rate is a kind of market rate

MRC – Multi Reporting Currency

To convert the balances from functional currency to foreign currency at transaction level (at journal entry
level) we use reporting currency.
In reporting feature we will be having one primary ledger and unlimited reporting ledgers.

Setup Steps:
1. Define rounding difference account
2. Assign rounding difference tracking asset at ledger level
3. Define exchange rate type
4. Define daily rates
5. Define reporting currency options at primary ledger level
6. Define reporting GL responsibility
7. Assign reporting ledger to responsibility
8. Assign responsibility to user
9. Open periods in reporting ledger
10. Create journal and post in primary ledger

MRC TRANSLATION
Transaction level Balance Level
Up to 8 Currencies No limit of Currencies
On line activity Off line activity
Daily Rates Average, Period end & historical rates
Part of consolidation
We can run at any point of time We cannot run for first period

Auto Post

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• We can post the journals automatically by specifying the some criteria in Auto post criteria set.
(RUN: Program – Auto post)
• Criteria could be: combinations of ledger or ledger set, journal source, journal category, balance type, and
period.
• Once you define an Auto Post criteria set, run the Auto Post program to select and post any journal
batches that meet the criteria defined by the criteria set.
• You can also schedule the Auto Post program to run at specific times and submission intervals.
• You can submit the Auto Post program or schedule Auto Post runs directly from the Auto Post
Criteria Sets window. Alternatively, you can use the Submit Request window.

Steps:
1. Define auto post criteria Navigation: Set up  Journal  Auto Post
2. Enter Journal Navigation: Journal  Enter
Enter Journal lines
Save journal
Check to see Auto post program completed successfully

Auto Reversal
Auto reverse is nothing but, reversing journal automatically based on the criteria that we specify. If you
routinely generate and post large numbers of journal reversals as part of your month end closing and
opening procedures, you can save time and reduce entry errors by using Automatic Journal Reversal to
automatically generate and post your journal reversals.

Criteria could be:

 Journal category
 Reversal Method
 Reversal period

Prerequisites for Auto Reversal:

• The journal balance type is Actual.
• The journal category is enabled to be Auto reversed.
• The journal is posted but not yet reversed.
• The journal reversal period is open or future enterable.

Note: Automatic Journal Reversal reverses posted journals of the balance type Actual. You cannot use
this feature to automate budget or encumbrance journal reversals.

Auto Reverse - Setup steps:

1. Define reversal criteria
Navigation: Set up  Journal  Auto reverse
Choose:
 Category
 Method: Switch Dr / Cr
 Reverse period
 Reversal date
Enable check box:
 Auto reverse
 Auto post reverse
2. Enter one journal with above category
3. Perform inquiry on account balances
4. Run “Program – Automatic reversal”

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Navigation: Reports  Request  Standard
5. Perform inquiry on account balances

Define Auto reversal set and its use in business scenario?

If you routinely generate and post large numbers of journal reversals as part of your month end closing and
opening procedures, you can save time and reduce entry errors by using Automatic Journal Reversal to
automatically generate and post your journal reversals. (Examples: Revaluation, Accrual Concept)

Note: The reversal method for a journal is defaulted from the method defined for the journal category in the Journal
Reversal Criteria set that is attached to the corresponding ledger.
Note: Automatic Journal Reversal reverses posted journals of the balance type Actual. You cannot use this feature to
automate budget or encumbrance journal reversals.

Prerequisites
General Ledger generates and posts reversals for journals that satisfy the following conditions:
 The journal balance type is Actual.
 The journal category is enabled to be Auto reversed.
 The journal is posted but not yet reversed.
 The journal reversal period is open or future enterable.
Revaluation – Revaluation is feature to calculate the current value of the transaction or asset according to FX
rates. So we need to reverse those journals in the same period before we close period. So that it doesn’t effect
the accounts. When we sell the assets then we don’t have to reverse them.
Accrual Concept – We record all transactions as per accrual concept. So when we buy any item we will
record that under LIABILITY account. When we realize the real amount for particular transaction then we
will reverse the journals.
Expense AC Liability AC Accrual Entry
Liability AC Expense AC Reverse Entry

Expense AC Cash AC Actual Entry

Sequential Numbering
 Sequential numbering is used to assign unique number to the various transactions.
 System will assign serial numbers to the data flows in to General Ledger through sub ledger accounts
based on the category.
 The transactions are Journals, AP Invoices, AP payments, Bank accounts, AR invoices and AR receipts
etc.
 Sequencing information is available for querying and display of journals.
 You can call either sequential numbering or Document category or voucher numbers.

SLA provides 2 different sequence mechanisms for sub ledger journal entries:
1. Accounting Sequence
2. Reporting Sequence

Accounting Sequence:
The accounting sequence is assigned to sub ledger accounting journal entries at the time that the journal
entry is completed.

Reporting sequence:

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The reporting sequence is assigned to both sub ledger accounting journal entries & General Ledger journal
entries, when the General Ledger period is closed.
This sequence is used by most of the legal reports required in some countries, as the main sorting criteria to
display the journal entries. Reporting sequence is optional.

These two sequences are not mutually exclusive, and, can coexist in the same journal entry

Setup Steps
1. Define “Sequential numbering” profile option at responsibility level
Navigation: System administrator Profile  System
2. Define sequential numbering
Navigation: System administrator Application  Sequence numbering  Define
3. Assign sequential number to the Category
Navigation: System administrator Application  Sequential numbering  Assign
4. Create Journal
Navigation: General ledger Journals  Enter

** Automatic: System generate number after saving journal

** Manual: user has to enter number manually
** Gapless: No gap for the journals from different sources

JOURNAL APPROVAL
Journal approval is an additional security feature to post the journals using this feature we can define
approval limits for employees.

Setup steps:
1. Enable journal approval at ledger level
Setup  Financials  Accounting setup manager  Accounting setup
2. Enable journal approval at journal source
Setup  Journal  Sources
3. Define approval limits for employees
Setup  Employees  Limits
4. Create user and assign employee to user
Navigation: System Administrator
Security  User  Define
5. Log in with employee user and create journals
Journals  Enter
** In 11i: we have to assign profile option to GL Responsibility, that is, “Journals: Allow preparer approval”
through system administrator Navigation: Profile  System

Approver Methods:
1. Go up management chain
2. Go Direct
3. One Stop then go direct

Difference between Security rules and cross validation rules

Security Rules (SR) Cross validation rules (CVR)
SR enabled at Responsibility level CVR enabled at structure & chart of accounts
level

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List of values are not displayed for those All list of values are displayed, but we will get
combination where SR was enabled error message for invalid code combination
No error message will displayed in SR Error message will displayed in CVR
SR restrict permission for segment values CVR restrict user for invalid code combination

Security Rules
Security rules are used to restrict the user from entering segment values. It will work at responsibility level.
Step: 1 Enable security at value set
Step: 2 Enable securities at segment level
Step: 3 Define Security rules
Step: 4 Assign Security rules to the responsibility
Step: 5 try to create Journal with 03 Company segment value
If you try to enter restricted segment value, system will through error message

Cross Validation Rules

It is used to restrict the end users from entering code combinations. It will work at structure level. I.e. COA
level
Step: 1 Enable cross validation rules at structure
Step: 2 Define cross validation rules
Step: 3 Enter journals using restricted code combination
System will through error message after you select the restricted code combination

ALIASES
Aliases are used to define the short name for account code combinations

Step: 1 Define Aliases

Navigation: Setup  Financials  Flex Fields  Key  Aliases
Go to “Alias, Descriptions” tab
Enter alias name
Choose values for Template

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Go to “Aliases, Effective” tab ---- Save
Step: 2 Compile Accounting Structure Set up  Financials  Flex Fields  Key  Values
Step: 3 Enter Journal to check the Alias result Journals  Enter

Definition Access Set

Definition access set will work at Responsibility level. (Recurring Journals)
DAS is used to provide access in 3 ways to the users for various definitions:
1. Use
2. View
3. Modify
Step: 1 Define Definition Access Set Setup  Financials  Definition Access sets  Define
Step: 2 Assign Definition Access set Setup  Financials  Definition Access Sets  Assign
Step: 3 Enable Security for accounting Calendar Setup  Financials  Calendars  Accounting

Query your accounting calendar

Select check box “Enable Security”
Say “Assign Access”
Choose Definition Access set

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LEDGER SET
Ledger set is used to access multiple Ledgers information from single responsibility. Using Ledger set we
can group only Ledgers which are having same Chart of Accounts and same Calendars.
Step: 1 Define ledger sets
Navigation: Setup  Financials  Ledger Sets
Enter Name and Choose:
 Chart of Accounts
 Calendar
 Default Ledger
 All other ledgers you want to group

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Step: 2 Assign Ledger set to responsibility Profile  System
Choose responsibility
Profile Option: GL: Data Access Set
Choose Ledger set
If you assign both the profile options: GL Ledger Name & GL Data Access Set
System will choose first Data Access set

DESCRIPTIVE FLEX FIELD

If you want to have additional field in standard forms, DFF is used to capture the additional information
of organization.

Step: 1 Enable and Define DFF fields

Navigation: Setup  Financials  Flex Fields  Descriptive  Segments
 Query Application: General Ledger
 Title: Enter Journals: Journals
 Prompt: Context or Enter DFF
 Enable check boxes: Required & Displayed
Click on Segments ---- Say “Compile”

Step: 2 Enter Journal to view DFF

Navigation: Journal  Enter
New Journal
Enter Journal as usual
Click on DFF check box to enter DFF fields

CONSOLIDATION
 Consolidation is used to consolidate the multiple subsidiary ledger information into parent ledger.

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 In other words, Consolidation is used for preparation of financial reports of parent and subsidiary
companies.
 If both companies are using different currencies, translation is required.
 After translation data will be remain in the same ledgers.
 By using consolidation concept, we transfer data from subsidiary to Parent SOB.
 For Translation of fixed assets balances, revaluation is required.
 The difference will go to “unrealized gain / loss” account.
 The difference of 3 rates will go to “CTA Account” (Cumulative Translation adjustment account)

There are 2 types of consolidation methods:

1. Balance
2. Transaction

** Transaction method is used when we have same currency for parent and subsidiary ledger
** Balancing method is used when we have different currency in parent and subsidiary ledger (That’s
why TRANSLATION will come into picture)

Consolidation Rules: 2
1. Segment Rules
2. Account Rules

Segment Rules again classified in to 3

1. Use roll up rule from
2. Use copy value from
3. Assign single value

** If codes are different: Co2  Co1 Use roll up rule from

** If codes are same: Do1  Do1 Use copy value from
** If structure is different Assign single value

Setup Steps:
1. Define Parent Ledger and required Subsidiary Ledgers
2. Define Parent and Subsidiary GL Responsibilities
3. Assign Ledgers to Responsibilities
4. Assign responsibilities to users
5. Define Exchange Rate type
6. Define Daily Rates
7. Complete currency translation options
8. Define consolidation mapping in the Parent ledger
9. Open periods in parent and subsidiary ledgers
10. Define Consolidation set
11. Enter and post journals in each subsidiary ledger
12. Run translation
13. Transfer data in to Parent ledger
14. Query the Consolidation journals in the Parent Ledger and post

Elimination Sets
An Elimination Set typically defines a related group of intercompany (or intracompany) accounts. If you
are consolidating at the Business Unit level, you would choose "Business Unit" for the Entity Field on
the Elimination Set page, and you would NOT specify Business Unit under Entity Fields on the
Elimination Lines page, but rather the intercompany Accounts you wish to include. If you use the Affiliate

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method of intercompany accounting, you would check the Match Affiliate Value box. In all likelihood you
will define a single Elimination Set.

The Consolidation Set ties the above two items together and specifies the details of the Elimination journal
entries that are generated during the process. Note that there is a place to specify the Consolidation Ledger
Set and, on the Set Options page, a place to specify that you want to use all Elimination Sets or just the ones
you wish to include. If you only define one Elimination Set, you could go either way here.

If you use the Affiliate method, intercompany journals are going to create balancing lines, using the
intercompany accounts, with the related Business Unit in the Affiliate field. When the Consolidations
process runs, it will create entries that are the opposite of the balances of those intercompany Accounts and
post them in the Elimination Business Unit. That means that if you include all Business Units, including the
elimination BU in a report or query, those Accounts will each net to zero.

 Create An Elimination Set: Conslidation_Elimination_Define

 Generate Elimination Set: Consolidation_Elimination_Generate

Average Balances (Transaction calendar is needed)

 Average balances are in General used by banking sectors.
 Through this we will find out the account balances for working days only
 We have to setup working days and non working days through “Transaction Calendar” in general
ledger.
 If you choose transaction calendar, system will not allow user to record any type of transaction on non
working days, and we can see the balances on daily basis also.

Steps:
1. Set up Transaction calendar
2. Create new set of books, assign this transaction calendar to new SOB
3. At SOB √ Enable average balances and assign “Net income account” (No, No, Revenue, No, No)
4. Create new responsibility for general ledger average balances
5. Assign profile option “GL Ledger name” to the GL responsibility
6. Assign this responsibility to user
7. Enter journal to see whether non working days enabled or not
8. We can inquiry the balances by specific day wise (Only for Balance sheet items)

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Financial Statement Generator – FSG

 FSG is dynamic tool in General Ledger to build reports such as Balance Sheet and Income Statement.
 Through FSG we can build reports in simple manner without writing any codes.
 The report is consist of Rows and Columns, and is used Row set & Column set to define rows and
columns.

Steps:
1. Define row set
2. Define Column set
3. Define Report
4. Run Report

Oracle Advanced Global Inter-company System

Basically, Advanced Global Inter-company System enables you to create, resolve and reconcile inter-
company transactions.

Most important thing to remember is while preparing the consolidated financial statement, the balances of
the inter-company transactions must be eliminated or adjusted otherwise it might result in overstated
financial results & failure to eliminate these inter-company transactions can lead to errors.

To avoid this we can use specific accounts to record these transactions. Defining these transactions that
are identified as inter-company transactions in the specific accounts. But the question is that where or
when to define these accounts? These accounts must be defined as a part of the General Ledger Setup
Process.

Intercompany Reporting:
Advanced Global Intercompany System provides extensive reports that help you in reviewing and
reconciling transactions reports. Intercompany reports are built using Oracle XML Publisher technology
which enables you to easily change the layout and publishing format of the reports thus allowing you to
customize the reports to suite your requirements. The reports available in Intercompany are:

1. Oracle Inter-company Transaction Summary Report

2. Oracle Inter-company Account Details Report

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3. Inter-company Reconciliation Report

Oracle Inter-company Transaction Summary Report: The Inter-company Transaction Summary report
includes all appropriate transaction columns. This report provides information about inter-company
transaction lines grouped by outbound and inbound transactions. You can customize this report for one
or more inter-company organizations. Specifically, use this report to find if a period contains open
transactions in it by listing the transactions for a particular batch or transaction status.

Oracle Inter-company Account Details Report: The Inter-company Account Details report provides
information about accounting details (outbound and inbound transactions) of inter-company transactions.
Outbound transaction accounts include initiator distribution and initiator receivables accounting.
Inbound transaction accounts include recipient distribution and recipient payables accounting.

Inter-company Reconciliation Report: Reconciliation is the process of ensuring an inter-company

transaction is accounted in Receivables for the initiator legal entity and Payables for the recipient legal
entity. The Inter-company reconciliation report enables you to check any discrepancies or missing
transactions.

Secondary Ledgers

Additional ledgers called secondary ledgers can optionally be assigned to an accounting setup to maintain
multiple accounting representations for the same legal entity. We can assign an unlimited number of
secondary ledgers to each primary ledger of an accounting setup. Secondary ledgers are used for multiple
purposes, such as statutory reporting, adjustments, or consolidation.

Each secondary ledger can be maintained at one of the following data conversion levels:

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 The sub ledger level secondary ledger maintains sub ledger journals, general ledger journal entries,
and balances in the additional accounting representation. This data conversion level uses both Sub
ledger Accounting and the General Ledger Posting program to create the necessary journals in both
the primary and secondary ledgers simultaneously.

 The journal level secondary ledger maintains primary ledger journal entries and balances in an
additional accounting representation. This type of secondary ledger is maintained using the General
Ledger Posting program. Every time a journal is posted in the primary ledger, the same journal can be
automatically replicated and maintained in the secondary ledger for those journal sources and categories that are
set up for this behavior.

 The balance level secondary ledger maintains primary ledger account balances in another accounting
representation. This type of secondary ledger requires Oracle General Ledger Consolidation to transfer
primary ledger balances to this secondary ledger.
Using Secondary Ledgers (Same or Different COA, Same or Different currency, same or different calendar with
same no. of periods – Same or Different accounting method)

Reporting Currency ledger (same COA, same Calendar, same SLA, same Ledger options as PL) – Only
different CURRENCY
If you only need a different currency representation of the primary or secondary ledgers, assign
reporting currencies to them.
Unlike secondary ledgers, reporting currencies must share the same chart of accounts, accounting
calendar/period type combination, subledger accounting method, and ledger processing options as
their source ledger.

As a general rule, always use reporting currencies instead of secondary ledgers if you only need to maintain
an accounting representation that differs in currency alone.
You can assign reporting currencies to both primary and secondary ledgers. Reporting currencies are
maintained at one of the following currency conversion levels:

 The journal level reporting currency maintains General Ledger journal entries and balances in
another currency representation. Journal level reporting currencies are maintained using the General
Ledger Posting program. Every time a journal is posted in the source ledger, such as the primary or
secondary ledger, the journal is automatically converted to the respective currency of the journal level
reporting currency.

 The balance level reporting currency only maintains balances in another currency. (translation is
needed) It maintains the translated balances of the source ledger. Every time general ledger translation
is run in the source ledger, such as the primary or secondary ledger, the translated balances are
reflected in the balance level reporting currency.

 Sub ledger level

Following are scenarios that may require different combinations of primary and secondary ledgers:
 The primary and secondary ledgers use different charts of accounts to meet varying accounting
standards or methods. A chart of accounts mapping is required to instruct the application how to
propagate balances from the source (primary) chart of accounts to the target (secondary) chart of
accounts.
 The primary and secondary ledgers use different accounting calendars to comply with separate
industry and corporate standards.

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 For example, you maintain a secondary ledger for your International Financial Reporting Standards
(IFRS) accounting requirements, while your primary ledger uses US Generally Accepted Accounting
Principles (GAAP).

My Observations
 Data access set – Error Message: “You do not have access to this account”.
 Cross validation rule – Error Message: “Invalid code combination” – OUR OWN MESSAGE.
 If CVR and DATA ACCESS SET prevail on same code combination then CVR will override DAS.
 If Inter company rule and Suspense journal condition prevail on same journal then SUSPENSE
JOURNAL will override INTERCOMPANY rule.
 Ledger set (gl%data%)
 Data access set (gl%data%)
 Revaluation accounting entry
Unrealized loss account Dr ----------- Cumulative translation adjustment account Cr
 Revaluation accounting entry
Cash account/Accounts payable account Dr ----------- Unrealized Gain account Cr
Or
Unrealized Loss Cr ------------ Cash account/Accounts payable account Cr
 While assigning balancing segment value (BSV) to Legal entity or Ledger; If you do not mention
START DATE, then it will take SYSTEM DATE as default.
 Data access set (Balancing segment value, Management segment value, Full ledger access) is defined at
USER level.
 Security rules are defined at RESPONSIBILITY level. (After defining security rules we will assign
them value set, which is maintained at Responsibility level)
 Cross validation rules are defined at COA level – All users

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Multi Org structure is used to implement or capture the multiple organization information in single point
of instance or single responsibility. So that it provides more security.
Structure:

Business Group
↓
Primary Ledger
↓
Legal Entity
↓
Operating Unit
↓
Inventory Org
↓
Sub inventory

Business Group:
It is a highest level organization in multi org structure. It serves human resources information. One BG may
contain multiple ledgers.

Ledger:
 It is a reporting entity in which we will record business transactions.
 One ledger may contain multiple legal entities.
 But one ledger must be associated with one Business group.
 To create one ledger we need to have calendar, currency.

Legal Entity:
 It is a tax authority. One LE contains multiple operating units.
 But one LE must associate with one Ledger.

Operating unit:
 It is a major business division. One OU contains multiple inventory organizations. (LE, OU)
 But it must be associated with one legal entity only.

Inventory organization:
 It is a warehouse or a plant where goods are stored.
 One inventory org may contain multiple sub inventories.
 But always inventory org must be associated with one OU only.

Sub inventory:
 It is a part in the inventory organization.
 Each sub inventory must be associated with one inventory organization.

Multi Org Setup steps

Step: 1 Define Location in HRMS
Step: 2 Define Business Group and enter Business group information
Step: 3 Define Currency in GL
Step: 4 Define Ledger through Account Setup Manager (INCLUDING LEGAL ENTITY)
Step: 5 Define Responsibilities (AP, PO, INV --- AR, OM, and Pricing)

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Step: 6 Assign Profile options to responsibilities (gl%led%, mo%oper%, mo%def%, bus%gr%)
Step: 7 Define users
Step: 8 Assign Responsibilities to user
Step: 9 Define Legal Entity
Step: 10 Assign legal Entity to Ledger
Step: 11 Define operating unit
Step: 12 Define work day calendar
Step: 13 Define inventory organizations
Step: 14 Define sub inventory
Step: 15 Open periods in GL
Step: 16 Run “Replicate seed data” program
Step: 17 Run “Multi org validation report”

No. Resp. Application Data Menu Request Application

1 AP Payables Standard AP_NAVIGATE_ All Reports Payables
GUI12
2 AR Receivables Standard AR_NAVIGATE_G Receivables All Receivables
UI
3 CM Cash Standard CE_SUPERUSER All Reports Cash
Management Management
4 FA Assets Standard FA_MAIN All Reports Assets
5 GL General Standard GL_SUPERUSER GL Concurrent General Ledger
Ledger Program Group
6 HRM Human Standard US HR Navigator US HRMS Human
S Resources Reports & Resources
Processes
7 INV Inventory Standard INV_NAVIGATE All Inclusive Inventory
GUI
8 OM Order Standard ADS_OM_SUPER OM Concurrent Order
Management MENU Programs Management
9 PO Purchasing Standard Purchasing Super All Reports Purchasing
User GUI

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MOAC is used to get access into multiple operating units from single responsibility.
We will use “MO: Security profile” profile option to assign MOAC to the responsibility.
To get access into one operating unit from single responsibility we will use “MO: Operating unit” profile
option.

Step: 1 Define MOAC security profile

Navigation: Human Resources
Security  Profile

 Name your security profile

 Choose Business group
 Choose security type: Secure organization by organization hierarchy and/or organization list.

Classification Organization name

Operating unit Choose your Operating unit
Inventory Organization Choose your inventory organization

Save your work.

Step: 2 Run “Security list maintenance” program

Navigation: Human Resources
Process and reports  Submit process and Reports

Program name: Security list maintenance

Parameters:
Generate list for: All security profiles
 Ensure program completed normal.

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Important concepts of AP
 Options
 P2P
 Supplier
 Bank
 EBT
 Invoice (Workbench, types, setups)
 Payment (Workbench, Payment Method, Payment format)
 Multiple Payments (Batch Payments)
 Mass additions
 SLA

Overview of AP Cycle

We maintain the following things at Accounts Payables Module.

1. Maintaining purchase invoice
2. Making payments to Suppliers
3. Payments reconciliation with bank for cash management

To maintain the purchase invoice the following things are needed.

1. Name and address of the supplier
2. Date of purchase
3. Quantity of purchase
4. Invoice amount
5. Payment method
6. Payment terms

We contact with the suppliers at different levels:

 Request for Quotation (RFQ)
 Purchase Order

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 Payments

OPTIONS:
We have 4 types of options.
1. Financial Options
2. Payable Options
3. Payables System Setup
4. User operating unit preferences

Setups:
 Create AP Responsibility

 Assign MOAC Profile options

 Assign AP responsibility to the User

Financial Options

Accounting:
Future Periods: Payables uses this value to limit the number of future periods you can maintain in the
Control Payables Periods window. You can enter invoices in future periods.

Liability: Payables assign this account as the default Liability Account for all new suppliers you enter. You
can override this value during supplier entry.

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Future Dated Payment: When Payables accounts for future dated payments, it uses the Future Dated
Payment Account from either the supplier site or the payment document, depending on the option you
select in the Payment Accounting region of the Payables Options window.

Discount Taken: If you choose to distribute your discounts to the system Discount Taken Account,
Payables uses this account to record the discounts you take on payments. Use the Payables Options window
to select your method for distributing discounts for your invoices.

PO Rate Variance Gain/Loss: Payables use these accounts to record the exchange rate variance gains/losses
for your inventory items. These accounts are not used to record variances for your expense items. Any
exchange rate variance for your expense items is recorded to the charge account of the purchase order.
Payables calculate these amounts during Payables Invoice Validation.

Expenses Clearing: This account is required when you use the Company Pay payment option of Oracle
Internet Expenses. Payables use this as a temporary account to record credit card transaction activity.
Payables debit this account when you create an invoice to pay a credit card issuer for credit card
transactions. Payables credits this account with offsets to the original debit entries when you submit
Expense Report Import for an employee expense report entered in Internet Expenses that has credit card
transactions on it.

Miscellaneous: Used only when importing invoices submitted via iSupplier Portal or XML Gateway.

Supplier – Purchasing:

Encumbrance

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Tax:

Human Resources:

Business Group: Enter the name of the business group that you want to associate with Purchasing. If you
use Purchasing without Human Resources, you can use the default value. The default for this field is the
Human Resources default of Setup Business Group.
The business group determines which employees you can use in Purchasing. In Purchasing, you can see
only the employees in this business group.

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Expense Reimbursement Address: Select the default address you want to use on payments for employee
expense reports: Home or Office. The system uses this default for each new employee you enter. You can
override this default during employee entry or expense report entry.

Payable Options

Accounting Option:
Automatic Offset Method: Enable Automatic Offsets by selecting Balancing or Account as your Offset
Method if you want Payables to automatically create balancing accounting entries for your invoice and
payment transactions.
 None. Do not use Automatic Offsets. For your invoice transactions, Payables creates one liability
accounting entry, and for your payment transactions, Payables creates one cash type accounting
entry.
 Balancing. Payables use the supplier site’s default liability account and overwrite the balancing
segment (usually the company code) with the balancing segment from the expense distribution
GL Account.
 Account. When creating the offsetting liability account, Payables uses the expense GL Account
from the invoice distribution and overwrites the account segment with the default liability
account from the supplier site.

Currency:

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Tax Reporting:

Invoice:

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Allow Adjustments to Paid Invoices: Enable this option if you want to allow users to update the
distributions of a paid invoice. If you enable this option you can also reverse a match to a purchase order
document and then match to another purchase order document that is not final matched.

GL Date Basis: The date you want Payables to use as the default accounting date for invoices during
invoice entry.
 Invoice Date. Invoice date you enter during invoice entry.
 System Date. Current date for your Payables system. The date you enter the invoice.
 Goods Received/Invoice Date. Date that you enter in the Date Goods Received field. If no value
is entered, then the invoice date is used.
 Goods Received/System Date. Date that you enter in the Date Goods Received field. If no value
is entered, then the system date is used.

Interest

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Expense Report:

Payment:

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Withholding Tax:

Reports:

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Bank Accounts

Click on Create

Continue

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Select the Bank Account Owner i.e. Legal entity name and Click on NEXT

Click on Save and Next.

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Enter Cash and Cash Clearing Account code combination

Click on Save and Next button

Click on Finish button

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Query the account name and select the “IVAS_SOL_CURRENT” Account. Click on Manage Payment
Documents
Then click on Create button

Enter the data and Apply

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By this bank account has been defined and can use this account for the payments of the invoices

SUPPLIER
Navigation: Supplier/ Entry

Click on Create Supplier button

Click APPLY

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

Address Book: Supplier Site/ Click on CREATE

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

AP flow in Oracle
Step 1: Entering or importing the supplier invoice
The first step in the Invoice to Payment process will be to enter the invoice information into the
Payables module. You can perform this step a number of different ways. You can manually enter the
invoice into the Invoice Workbench form or the Quick Invoice form. You can interface and then import
the invoice. You can also generate invoices based on your PO receipts. To generate invoices from PO
receipts, you need to run the “Pay on Receipt Auto Invoice Program” in the Purchasing module.

Step 2: Matching the invoice to a purchase order or receipt

If your invoice has an associated purchase order, you can match the invoice quantity and price to that
purchase order. If your purchase order is setup as a 2 –way match, then you match the invoice to the
purchase order lines. If your purchase order is setup as a 3-way match, then you match the invoice to
the inventory receipts.

Step 3: Validating the Invoice

Once the invoice is entered into the system, you will need to run the invoice validation process. This
process can be run from the Invoice Workbench form (by clicking the Actions button) or you can
validate invoices by running the invoice validation concurrent program. The validation process
performs a couple of different checks. First, it checks to see if should apply any matching holds. Then
it will calculate and apply taxes, verify the GL period status, verify exchange rates, and verify
distribution information is valid.

Step 4: Resolving Invoice Holds

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When the validation process places an invoice on hold, you must either resolve the hold or release the
hold before payment can be made. Some holds can be released (like price and quantity holds) and
other need to be resolved. These holds are called system holds and are need to be resolved to make the
invoice valid.

Step 5: Running the invoice approval process and approving invoices

After we have a valid invoice, you will need to run the invoice approval process. This process can be
tailor to your specific business needs with the Approval Management Engine (AME). If the invoice
meets the rules to require approval, AME will determine the approver(s) and send a notification. The
approver can then approve or reject the invoice online.

Step 6: Creating and Approving payment

After we have an approved invoice, you are ready to pay the supplier. You can create a manual
payment for this invoice or you can batch all the invoices that are due for payment. To create a
payment batch, you use the Payments Process Request and select a template. This template will
identify the invoices to be paid and determines if approval is necessary. If approval is not necessary,
the payment documents will be formatted for printing (for checks) or electronic transmission.

Invoice Workbench:

Enter LINES and DISTRIBUTIONS OR Click on MATCH and query with PO and then Validate and
Create Accounting.

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Payments (Single):

ACTIONS

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EXPENSE REPORTS

1) Expense report Template Invoice-> Expense Report Templates

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2) Payable Options  “Expense Report” Tab

3) Prepare Expense report invoice

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4) RUN: Expense report export program

5) RUN: Payables Open Interface Import

Payment methods:
We have 4 payment methods in OF.
1. Check
2. Electronic (EFT)
3. Wire
4. Clearing
At the time of creating invoice we have to opt for payment method and Currency.
 Check : Payment through the regular bank check
 Electronic : System will create one instruction file with all the details of
invoice and payment. This file will send to bank for payment.
 Wire : It is manual process of sending instructions to bank. System will
not generate any instruction file.
 Clearing : In this process we will not make Payment physically. This is used
as adjustment for inter company transfers and transfer
between the branches.
Payment Terms: Making payment to supplier (due date) immediate or in how many days referred to
Payment terms. We can set due dates and discount dates through payment terms.

Distribution Set: (Which is used for Recurring Invoices)

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Distribution Set is used to automatically enter distributions for an invoice when you are not matching it to a
purchase order.

For example: Total invoice amount: Rs. 100000

Plant cost : Rs. 90000 90%
Tax : Rs. 5000 5%
Freight : : Rs. 5000 5%

If we receive the invoices in future with the same arrangements we can use the distribution set. You can
assign a default Distribution Set to a supplier site so Payables will use it for every invoice you enter for that
supplier site. If you do not assign a default Distribution Set to a supplier site, you can always assign a
Distribution Set to an invoice when you enter it.

We have 2 types of distribution sets.

1. Full
2. Skeleton
 We use Full Distribution Sets to create distributions with defined percentage amounts.
 Skeleton Distribution Sets to create distributions with not set distribution amounts.

We can enter distributions for invoices in 2 ways:

1. Manual
2. Automatic (by creation of distribution sets)
Types of invoices in Accounts Payables
1. Standard invoice
2. Debit Memo
3. Credit Memo
4. Mixed invoice
5. Recurring invoice
6. Pre payment invoice
7. Expenses report invoice
8. Interest invoice
9. Withholding tax invoice
10. Retain age Release
11. Transportation

System automatically generated invoices:

1. Recurring invoice
2. Expenses invoice
3. interest invoice
4. Withholding Tax invoice

1. Standard invoice: We can enter only Positive amounts through standard invoice.

2. Debit Memo
 Debit Memo is used by Customers only.
 This is used for purchase returns.
 To reduce the balance payable to supplier we create Debit Memo.
 Only negative amounts can be entered through Debit Memo.

3. Credit Memo
 To reduce the supplier balance Credit Memo will be used.

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 Credit Memo will rise by Supplier and sent to us.
 Generally credit memos used, when we get discount on payables or on any price differences.
 We can enter only negative balances through Credit Memos.

4. Mixed Invoice: We can enter Positive and Negative balances also through Mixed Invoices.

5. Recurring Invoice: We require a calendar to create recurring invoice, called “Special Calendar”.

6. Pre payment invoice.

 Pre payment invoice are used when there is advance payment made to Suppliers against purchases
or Employees for Travel expenses (Imprested amount).
 Pre payments are two types: Temporary & Permanent
 Temporary pre payments are adjusted against the future purchase invoice.
 Whereas we cannot adjust Permanent pre payments against future purchases.
We can convert Permanent pre payment into Temporary pre payment. After conversion we can use that to
adjust against future invoices.

7. Expenses invoice
When employees spent the amount and submit the bills for reimbursement, that information we have to
maintain as expenditure report in the system.
With the help of this expenses report information we can create “Expenses Invoice”.

8. Interest invoice
When we make payments after the due date crossed, if interest penalty is applicable, system will create one
invoice for only the interest portion amount apart from the standard invoice.

9. Withholding tax invoice

If customer want to with hold the tax amount charged by supplier in the invoice, and he want to pay the tax
amount directly to tax authorities instead of paying to supplier.
System will automatically create a withholding tax invoice.
In this case tax authority would be a supplier.
Invoice components: There are 4 types
1. Line
2. Tax
3. Freight
4. Miscellaneous

Batch Invoice
 We can enter invoices individual one by one or through batch invoices at a time many.
 By default we can enter individual invoices only.
 In GL batch journal only control total is there.
 But in AP, batch invoices have 2 controls: 1. Control total 2. Control count.
 Control total is grand total of all invoices & Control count is total number of invoices.

Unlike batch journal, we can enter invoices either individual or batch invoices.

If you want to enter batch journals we have to create profile option. In that case we cannot enter invoices
individually. (AP: Use Invoice batch control) Create accounting option does not work for invoice batch
level. So we need to run the program for individual invoice.

Accounts Payables – Theory

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Types of Bank accounts:
We have 3 types of bank accounts
1. Internal Bank Account
2. Supplier Bank Account
3. Customer Bank Account
Internal Bank account is maintained by our company to make payments or receive payments in any mode.
(Check, Electronic, Wire and Clearing). In electronic and wire payments our company has to maintain
Supplier bank account and Customer bank account.

Payment types:
When we are making payment to supplier we need to have bank account, Check book. As per OF we called
check leaves as Documents.
We have 3 types of payment:
1. Manual
2. Quick
3. Refund
Manual: We have to write the check manually and then enter the same details into system and hand
over the same check to Supplier.
Quick: System will print payment details on the check. In OF once you save the payment,
automatically check will be printed on pre printed stationary. Then check can be hand over
to Supplier.
Refund: When we received funds return from the suppliers we record them as refund.

Work Bench:
We maintain Recording invoices and Payments in AP.
We have two work benches in AP:
1. Invoice work bench
2. Payment work bench
In invoice work bench we can enter and maintain invoices.
Payment work bench is to maintain 3 types of payments 1. Manual 2. Quick 3. Refund.

Payment Batch
Payments also can be processed as individual payments or through batch.
Batch payments are automation.
Automation means if we give instruction to system, system will make payment automatically.
There are various stages in payment batch:
1. Selection
2. Building
3. Rebuilding
4. Formatting
5. Confirm

Selection: We have to select the invoices for payment.

Building: We can view the invoices that selected for payment through building.
We can make modifications also.
Rebuilding: If we make modifications system will show as Rebuilding.
Formatting: Formatting is nothing but for print purpose. If we format only we can get print the payments.
Confirm: Once we confirm only system considered the payment has been done and the balances will
be updated. If we do not confirm system will not allow us to create one more payment batch.

Steps in R12 payments:

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Step 1 : Create a Payment Method & Payment Format- used by Payable Document & Payment
Process Profile
Step 2 : Create a Payment Process Profile
Step 3:Create a Bank Account and assign the Owner & Organization acess
Step 4: Create a Payable document to be used by bank
Step 5 : Create Invoices
Step 6 : Create a payrun – Select the Invoices, Build Payments, Format Payment instructions
Step 7 : Record the Print status

Step 1 : Create a Payment Method

Navigation : Payments Setup Administrator> Payments Setup :Fund Disbursement Setup : Payment
Methods : Payment Method

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Create a Payment Format Payments Setup :Shared Setup : Formats

Step 2 : Create Payment Process Profiles

Payments Setup :Fund Disbursement Setup :Payment Process Profiles

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Step 3 : Create Bank Account: AP > Setup : Payments : Bank Accounts
Assigning Bank Account Owner
Access to Organizations

Step 4 : Create a Payable Document

AP Responsibility > Setup : Payments : Bank Accounts : Manage /update Payable Documents

Step 5 : Create Invoices

Navigation : AP Responsibility> Invoices: Entry: Invoices

Step 6 : Create a Pay Run

Navigation : AP Responsibility>Payments>Entry>Payments Manager>Payment Process Requests>Submit
Single Request

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Selection of Bank Account, Payables Document & Payment Process Profile in a Pay Run

Processing options for this Pay Run

Document Failure Options for this Pay Run

Status of Pay Run – Invoices Review

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Review of Invoices Selected

Review of Pay Run before freezing Payments

Sample of the Payment Schedules Report

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Funds Disbursement Dashboard – Status of Payment Instruction

Step 5 : Record the Print status

The concurrent programs are

 Auto select
 Build payment
 Format payment instructions

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 Remittance
 Positive pay program

Positive pay program

A positive pay file is a security measure in the form of a document that the deploying company sends to its
payment system or bank to inform it of payments made by check.
When you print checks, you can electronically transmit a list of payments to the bank or payment system
that indicates the checks you printed, so the bank or payment system knows what checks to pay. This list
prevents the payment system or bank from paying fraudulent checks, since such checks are not listed on the
positive pay file.
Once payment documents are recorded as printed, a positive pay file is generated and transmitted if you set
up this optional feature in the Update Payment Process Profile page.

Separate Remittance Advice

 Oracle Financials automatically generates a message (regarding payment) to the receiver (Supplier)
that contains one line with the invoice number and the amount for each invoice.
 GiroBank Domestic format supports a maximum of 40 lines; other formats support a maximum of 4
lines. If you exceed the 40 line maximum, Oracle Financials generates a separate remittance advice
through the standard Separate Remittance Advice program. Send this advice to the supplier.

Data flow into Application of Accounts Payables:

Financial Options
↓
Payables options
↓
Supplier header
↓
Supplier Sites
↓
Invoice header
↓
Invoice Distribution
↓
Payment

** In payables also we can enter foreign currency invoices. There is some setup required. The exchange rate
we setup in GL is applicable to all modules.
** If we record the invoice in one currency, we cannot make payment other than that invoice currency.
Currency should be same in PO, invoice and payment.

Cross currency payment is not possible in AP. But that is possible in AR.
** To cancel the invoice we have to enter Credit memo.

** Zero payments: If we cancel the invoice, there is no balance to pay, but system will show as zero
balance. For elimination of zero balance payments we have to create dummy bank accounts and dummy
checks. (Setup in Bank accounts)

Payables Integration:

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PROCURE TO PAY CYCLE

Requisition
RFQ
Quotation
Quotation Analysis
Purchase Order
Goods Receipt Note
Invoice
Payment
Reconciliation

Requisition:
Requisition is raised by employee and send to the buyer of the organization.
Requisitions are 2 types:
1. Internal Requisition
2. Purchase Requisition

RFQ:
Buyer will send Request for Quotation to supplier.
RFQ’s are 3 types:
1. Catalog RFQ
2. Standard RFQ
3. Bid RFQ

Quotation:
Upon receiving RFQ from Buyer, supplier will send Quotation to Buyer.
Quotations are 3 types:
1. Catalog
2. Standard

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3. Bid

Purchase Order:
After Quotation analysis buyer will raise Purchase Order to Supplier.
Purchase orders are 4 types:
1. Standard PO
2. Planned PO (everything is planned)
3. Blanket PO Agreement (quantity, supplier, deliveries yet to decide)
4. Contract Purchase Agreement (long term)

Goods Receiving/ Delivery:

There are 3 stages in goods receiving.
1. Direct Delivery (2 way)
2. Standard Receipt (3 way)
3. Inspection (4 way)

P2P Process

Requisitions
Underlying Tables:
PO_REQUISITION_HEADERS_ALL
PO_REQUISITION_LINES_ALL
PO_REQ_DISTRIBUTIONS_ALL

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Purchase Orders

Match invoices in
P
O

Automatically

Maintain documents

Acce Revis

Manu
Appr
C ally
ove
o creat
e
Requisition Receive against PO

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To enter more shipment information, select the more tab.

 Enter the Receipt Close Tolerance percent, Invoice Close Tolerance percent to set the receiving and
invoice close point.

 Select one of the following options for Match Approval Level

Two–Way: Purchase order and invoice quantities must match within tolerance before the
corresponding invoice can be paid.
Three–Way: Purchase order, receipt, and invoice quantities must match within tolerance before the
corresponding invoice can be paid.
Four–Way: Purchase order, receipt, accepted, and invoice quantities must match within tolerance
before the corresponding invoice can be paid.

 Select an Invoice Match Option

Purchase Order: Payables must match the invoice to the purchase order.
Receipt: Payables must match the invoice to the receipt.

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Underlying Tables:
PO_HEADERS_ALL
PO_LINES_ALL
PO_DISTRIBUTIONS_ALL (REQ_HEADER_REFERENCE_NUM in Distributions table is the Requisition
number for this PO)

Receiving – Create receipts

Underlying Tables
RCV_SHIPMENT_HEADERS
RCV_SHIPMENT_LINES (Lines Table has PO_HEADER_ID)

Invoicing

Receive
invoices

E Enter
nt detail

Maintain invoices
File invoices

Invoice Tables
AP_INVOICES_ALL
AP_INVOICE_DISTRIBUTIONS_ALL

Accounting Entries Tables

AP_ACCOUNTING_EVENTS_ALL
AP_AE_HEADERS_ALL
AP_AE_LINES_ALL

Payments

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Import/Enter
invoice

R Pay invoice
e
c
o
r
If appropriate, match
d
invoice m
to a
purchase order n
u
a
PO l
p
a
y
m

Invoice

Underlying Tables
AP_INVOICE_PAYMENTS_ALL
AP_PAYMENT_SCHEDULES_ALL
AP_CHECKS_ALL
AP_CHECK_FORMATS
AP_BANK_ACCOUNTS_ALL
AP_BANK_BRANCHES
AP_TERMS

Transfer to GL
Journal import will happen to GL from Accounts payables
Underlying tables
GL_JE_BATCHES
GL_JE_HEADERS
GL_JE_LINES

Post in GL
GL_BALANCES

JOURNAL ENTRIES IN ACCOUNTS PAYABLES – P2P CYCLE

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Transaction Dr Cr
Requisition - -
Purchase Order - -
Create Receipt Receiving inventory A/C AP Accrual A/C
Inspection - -
Move Goods to Inventory Inventory Valuation A/C Receiving inventory A/C
Create Invoice AP Accrual A/C Liability A/C
Make Payment Liability A/C Cash Clearing A/C
Reconcile Cash Clearing A/C Cash A/C
Move Goods to Department Expense A/C Liability A/C

**Final Match
When you enter an invoice and match it to a purchase orders, you can indicate that it is a final match(at
invoice distribution level). A final match is one in which you do not expect any more invoices from a
supplier against a particular purchase order shipment. A supplier might indicate that an invoice is final or
you might decide that an invoice is final.

The advantage of using a final match is that you can automatically liquidate excess encumbrances and
therefore increase available funds. Especially for service contracts where actual expenses might be less than
the purchase order amount, you can now easily close the purchase order.

You can indicate that an invoice is a final match when you match it to a purchase order shipment. Oracle
Payables defaults the final match designation to the invoice distributions Oracle Payables creates from the
match. You can overwrite the final match designation at the distribution level. When you indicate that a
shipment is final, Oracle Payables marks the shipment in Oracle Purchasing for closure. You can change a
final match designation until you approve the invoice using Approval.

The close process closes all purchase order shipments that contain distributions that were final matched,
liquidates any encumbrances associated with the shipment, and updates the closed status of the shipment.

Example
 You issue a purchase order for documentation publication services for $15,000 based on
estimated print quantities.
 You receive an invoice from the supplier for $11,000 in actual services provided.
 You enter an invoice for $11,000, match it to a purchase order, and indicate that this is a final
match.
 When you approve the invoice, Oracle Payables automatically closes the purchase order (in this
case there is only one shipment) and creates a reversing encumbrance entry for $4,000. When
you post the invoice, Oracle Payables creates a reversing encumbrance entry for $11,000 and
actual journal entry for $11,000.

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Approval Hierarchy

 Define jobs
 Define positions
 Define Position hierarchy
 Define Employees
 Define approval groups
 Assign approval groups to employees
 Document Types/Buyer
 Go to user and assign employee to the user
 RUN: Fill employee hierarchy

AP INVOICE STATUS
1. Standard invoice:

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 Before validation : Never validated
 After validation : Validated
2. Prepayment invoice
 Before validation : Un validated
 After validation : Un paid
 After pay in full : Un paid
 After conversion to temporary pre payment(part amount): Available
 If applied full amount : Fully applied
 After apply to invoice : Validated

MASS ADDITION OF ASSETS

Mass addition process is used to convert the AP invoice information as a fixed asset.

Step: 1 Create Standard Invoice in Accounts Payables

Navigation: Invoices  Entry  Invoices

 Enter all the information as it is for standard invoice

 Choose Account as “Asset clearing Account” in the distribution
*** (Asset clearing Account in the Asset category & Invoice distribution account should be same)
Place the Cursor on Account field
Go to “Folder  Show field”----Track as asset----Say OK
 Save your work.
 Validate, Create accounting from Actions button

Step: 2 Transfer the data to GL

Step: 3 Run Journal Import program from GL
Navigation: Journal  Import  Run
Source: Payables

Step: 4 Run mass Additions create in AP

“Mass additions create” program will run to transfer AP data to FA.
Program Name: Mass Additions Create
Choose Asset Book
Ensure program completed normal

Step: 5 Prepare Mass additions in F.A.

Navigation: Mass Additions  Prepare mass Additions
 Choose your Book and query
 Change Queue New to: Post
 Invoice number
 Choose Asset Category & Location
 Enter Description
 Done

Step: 6 Run Post mass additions program

Navigation: Mass Additions  Post Mass additions

 Program Name: Mass additions post

 Parameters: Choose your asset book and say Submit

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Step: 7 Query the Asset in the Asset work bench
Navigation: Assets  Asset work bench
Choose your asset book and say Find.

AP vs. GL Reconciliation
 Before doing Reconciliation, we have to run the concurrent program “Payable Transfer to General
Ledger” where this program will transfer data from AP to GL.
 For this whenever we are doing setups in “payable option” in payable module, one check box is
there (payable invoice transfer GL) that check box we must enable after that in payable level, we run
the report Payable transfer to GL.
“OR”
 In GL responsibility import screen (Navigation:-GL Responsibility->journal->Import) we will import
the data from payable to GL.
 Month End reconciliation between GL and AP is mandatory. If AP is interfaced to GL, verifying the
balance between the two modules is usually done through comparing account balances of the
liability account.

To reconcile your accounts payable activity for 30-Nov-12, make the following calculation:
Sign Particulars
Opening "Accounts Payable Trial Balance" as of 31-Oct-12
Balance
+ "Posted Invoice Register" for the period between 1-Nov-12 and 30-Nov-12
- "Posted Payment Register" for the period between 1-Nov-12 and 30-Nov-12
= "Accounts Payable Trial Balance" as of 30-Nov-12

If total is not matching you will need to find out the root cause of difference:
(Invalidated Invoice for the period) For the PTD activity check the "period Close Exception" if there are any
invoices and payments which are not transferred to GL.

If the current period does not reconcile, please complete the reconciliation process for all prior periods from
the most recent to the earliest until you get to one that reconciles.

Reconciling AP to GL is accomplished with the use of the following reports.

 “Posted Invoice Register”
 “Posted Payment Register”
 “Accounts Payable Trial Balance” (current and last period)

These reports ensure that your Trial Balance accurately reflects your accounts payable liability by matching
the Posted invoices and payments with the AP liability account. You can also compare your AP liability
accounts to GL by doing a query of the accounts in GL to identify the account or accounts out of balance.
The trial balance total should be the same as your GL liability account.

If not:
Run the GL “Account Analysis” report for the liability account and for the date range in question. Look for
transactions with a source other than Payables. This can quickly pinpoint any transactions incorrectly
charged to the account. Make sure that you have not made manual
Journal entries to your liability account in General Ledger. When you identify the accounts you go back to
AP and do a query on the account to find the invoices out of balance.
The last step is to create a journal entry in GL to balance the account or accounts that is out of balance.

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Common Reasons for balance mismatch between AP & GL

1. If the AP batch is still in the GL Interface, it will not be reflected in the GL reports and this will cause
a difference between AP and GL.

2. If you have deleted any AP batches or lines from AP batches out of the GL Interface, this will cause
AP and GL to be out of balance.

3. Any AP batches that are UN posted in GL will cause a difference between AP and GL

4. You performed a data fix in the past where you used the undo accounting script and swept a
transaction forward from a closed period to re account it; this will cause an imbalance between AP
and GL. The imbalance will be corrected in the period in which you made a GL adjustment to
account for the fix.
5. Any correction you make during the journal import process will result in the line being changed in
the general ledger, but not in AP

6. Manual journal entries in the general ledger that involve an AP liability account will cause the AP
Trial balance not to reconcile to the GL. These entries are not included in the AP sub ledger so they
will not be reflected on the AP Trial Balance Report.

7. Run the "GL Account Analysis" report for the liability account and for the date range in question.
Look for transactions with a source other than Payable. This can quickly pinpoint any transactions
incorrectly charged to the account.

Customized Reports for reconciliation:

1. Supplier Ledger
2. Supplier Trial Balance
3. Supplier Advance (Pre payment) Register
4. Supplier Advance Adjustment (Pre payment) Register
5. Supplier Liability Report
6. Supplier Aging Report
7. AP Reconciliation Report

With the help of this new customized reports, we can reconcile AP and make 100% reconciliation in oracle
payable R12
Sign Particulars Rs.
= Supplier Trial Balance 100
= Supplier Ledger 100
+ Supplier Liability Report 120
- Supplier Advance Adjustment (Pre payment) Register 20
= Supplier Aging Report 100
= AP Reconciliation Report Rs.100(GL(Rs.110) and SLA 100
(Rs.100)

If GL SLA then displays all the information of rest of Transaction for Rs.10)
These reports are very accurate (100%) even we can fire with back dated also.

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How is the as-of-date used in the “Accounts Payable Trial Balance” report?
A: The as-of-date is used to determine which invoices and payments should be included on the report. Any
invoices or payments with an accounting date AFTER the entered as-of-date will not be displayed on this
report.

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My Observations:
1. Price Breaks: Price break is feature in PURCHASING module. Which will be used while raising RFQ
i.e. Requisition for quotation. It is helpful to supplier to quote prices effectively.
Quantity Price Inventory Org Discount
100 100 JKI -
200 90 JKI 10%
500 80 JKI 20%

2. Pay on receipt is also called as Self-billing invoices. “Payable open interface program” will run at
backend when receive the goods at receiving point (using receiving/receipts). As a result of that
program Invoice will be created in AP with the name of ERS - Evaluated Receipt settlement.
3. Invoice Batches – Profile Option is AP: Use invoice batch controls
4. To Perform inspection we need to assign profile option QA: PO Inspection – Oracle Purchasing.
5. We can delete PO @AP: Workflow
6. We can delete INVOICE @ ACTIONS/Cancel Invoice
7. First party organization can be Legal Entity and/or operating unit- while creating Payment process
profile.
8. Special Calendar is used for (Recurring Invoices, Withholding tax, Payment Terms, Key Indicator)

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

 EBT is Enterprise business tax, which provides centralized tax solution for all kind of tax
requirements.
 EBT is dedicated module in R12 for complex tax situations.
 EBT helps us to define at country specific or product specific level.
 The tax calculation in EBT is depends upon 4 P’s
1. Party (TCA, LE)
2. Place (Country or State)(bill to, ship to, bill from, ship from, ship to; use bill to if ship to
not found)
3. Product
4. Process (Sale or Purchase)

ABC Corporations Ltd – Texas Legal Entity

Purchase Invoice PROCESS
Invoice From XYZ Ltd PARTY
India – Hyderabad PLACE
Particulars Quantity Price Amount
Laptops 10 10000 100000 PRICE
Tax @ 10% 10000
Total 110000

E Business Tax is used to configure the tax related things as per the country specific.
Tax is classified as 2 types.
1. Direct Tax
2. Indirect Tax
The mandatory setups for EBT is “Tax Regime to Tax Rate”

Regime to rate flow

 Define Geographical Codes (Home/External dependencies/create geographical code)
 Define First party Legal entity party for profile (Operating Unit)
 Create Tax Regime
 Create Tax
 Create Tax Status
 Define Tax Jurisdictions
 Define Tax rate
 Define tax Rules
 Make Tax available on transactions

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 To determine the tax amount, standard tax formulas are seeded in the EBT system.
Tax amount = Transaction line amount * Tax rate

Tax rules
 Direct tax rate determination
 Determine place of supply (ship to; use bill to if ship to not found)
 Determine tax applicability (Applicable)
 Determine registration (ship to; use bill to if ship to not found)
 Determine tax status
 Determine tax rate
 Determine taxable basis (Standard)
 Calculate tax amounts (Standard)

Create E Business tax responsibility

Navigation: System Administrator
Security  Responsibility  Define
Application: E Business tax
Menu: E Business tax Responsibility Menu
Request group: Oracle E Business tax Request

Assign Profile options to responsibility

Navigation: System Administrator
Profile  System
Profile Options:
1. HR: Business Group

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2. HR: Security Profile
3. HR: User type
4. GL Ledger Name
5. MO: Operating unit

Note: Tax status (Enable ‘default tax status’)

VAT and TDS

 Full form of TDS is tax deducted at source, which is deducted for the parties by company and it is a
expense for company. TDS is any amount paid by way of salary, fees, commission, Rent, interest etc
is taxed at the time of payment by the source. This is referred as tax deducted at source.
 Full form of TCS is tax collection source. It is the tax which has to be collected by company from
others and it is a income for the company.
 If VAT is charged means physical material is supplied so there is no TDS to be deducted. But if any
amount is charged for works contract that is charges for any work done then TDS to be deduct on
that amount. VAT is the tax levied to the material in the process of making the final good or product.
Since the tax is levied only on the value added to the product and not on the whole material. It is
referred to as Value Added tax. TDS is a direct tax, whereas VAT is an indirect tax.
 Some goods are exempted to VAT but there is no exemption to TDS.

Note On Indian localization

 Oracle Applications was developed as a Global product. Because of this reason it does not supported
by some acts like customs, central excise, vat and CST etc. but which are mandatory according to
Indian Laws.
 All other countries are also having some country specific requirements. To meet the above
requirements Oracle developed software named patches. We can add these patches to the base
product of the oracle applications.
 Indian Localization is also one patch which meets the country specific requirements.

What is India Localization Product?

India Localization is a solution built over Oracle E-Business Suite, Oracle's e-business applications software
product, that provides Clients in India with the most comprehensive solution to comply with the India
specific tax requirements as specified by Central Excise, Customs, Sales Tax and VAT, and Income Tax, (to
the extent of tax deduction at source and generation of Depreciation Schedule for fixed assets). India
Localization product also provides valuable information that can be used for statutory and management
reporting.

What Does India Localization Product Do?

The product uses its own tax engine, for handling taxes applicable across 'Procure to Pay' and 'Order to
Cash' transactions.
 In India Localization, taxes are defaulted based on the pre-determined setup (Tax Defaultation).
 Tax amounts are calculated based on precedence such as transaction base value, tax on tax, or assessable
value as specified by tax authority (Tax Calculation).
 The Tax Amount is considered for inventory valuation, recoverability and accounting based on the pre-
determined recoverability and accounting rules (Tax Accounting and Recoverability).
 Details of recoverable tax amount are recorded as part of the repository (Tax Recording).
 This information can further be used to calculate the final tax liability arising on settlement at the end of
the tax period (Tax Settlement) and for statutory reporting (Tax Reporting).

Components of India Localization Product

 Tax Defaultation

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 Tax Calculation and Recovery
 Accounting for India Localization Taxes
 Recording and Reporting Tax Information

SUB LEDGER ACCOUNTING

SET UP STEPS:

1. Define Journal Line Type (JLT)

2. Define Journal Entry Description (JED)
3. Define Accounting Derivation Rule (ADR)
4. Define Journal Line Definitions (JLD)
5. Define Application Accounting Definition (AAD)
6. Define Sub Ledger Accounting Method (SLAM)

 Event Entity – AP

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 Event Class – Invoice
 Event Type – Validated
Tables involved in SLA:
XLA_EVENTS
Various Create
Sub accounting XLA_AE_HEADERS transferred to GL
ledgers XLA_AE_LINES
XLA_DISTRIBUTIONS_LINKS

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Receivables are used to maintain Customer information, Sales invoices and receipts from customers. Any
form of money coming into the organization will be recorded in the Account receivables.

We maintain the following in Accounts Receivables: Customer, Transaction, and Receipt

 Customers information
 Sales invoice information
 Receipts information

Key Flex Fields in AR: 2

1. Sales Tax Location KFF  (Mandatory)
2. Territory KFF (Optional)

 Sales tax location KFF is used to calculate tax based on the different locations. In general we have
different tax rates in different states. Sales tax location KFF is mandatory.

 Territory means Place or location. Territory KFF is used to track sales information location wise. This
KFF is optional.

Work Benches in AR: 4

1. Transaction work bench
2. Receipt work bench
3. Bills receivables work bench
4. Collections work bench

a) Transaction work bench is used to maintain all types of transaction information.

b) Receipts work bench is used for all receipts information such as cash and check receipts.
c) Through Bills Receivables work bench we maintain bills receivables information.
d) Collections work bench is used for follow up with customers such as collection process information,
reminder letters and Collector’s information.

TRANSACTION WORK BENCH

Transaction types: 7 (To define transaction Type we need OU and LE)
Based on the transaction class, transactions are classified into 7 types
1. Invoice transaction type (Sales invoice)
2. Credit Memo (-)
3. Debit Memo (+)
4. Deposit (Commitment)
5. Guarantee (Commitment)
6. Charge back transaction type
7. Bills receivables

For each and every invoice type we have to create one transaction type. Through the transaction type we
use the transactions and also we can determine that:

a. Natural Application refers to the type of application, either positive or negative, that a transaction
requires becoming closer to zero. For example, invoices have a positive balance, so to reduce the balance
due you need to create a negative application (such as apply a receipt).

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b. Over application indicates whether you can over apply transactions using this type. For example, if you
apply a $500 receipt to a $400 invoice, you over apply the invoice and reverse its sign (from positive to
negative).

c. Receivables Application Rule Sets

Application Rule Sets determine the steps Receivables uses to apply partial payments and credit memos
to your customer's open debit items, and how discounts affect the open balance for each type of
associated charges.

d. Open Receivable
If this transaction type's class is not Deposit or Guarantee, indicate whether you want transactions with
this type to update your customer balance by checking or unchecking the Open Receivable box.
If Open Receivable is set to Yes, Receivables updates your customer balances each time you create a
complete debit memo, credit memo, chargeback, or on-account credit with this transaction type.
Receivables also include these transactions in the standard aging and collection processes.
If you are defining a 'void' transaction type, set Open Receivable to No.

e. Post to GL
To be able to post transactions with this type to your general ledger, check the Post to GL box. The
default is the value you specified for the Open Receivables option. If you leave this box unchecked, then
no accounting will be generated for transactions with this type.
If you are defining a 'void' transaction type, do not check this box.

f. Exclude from Late Charges Calculation

Select the Exclude from Late Charges Calculation box if you do not want to assess late charges on
overdue transactions using this transaction type.
g. If this transaction type's class is Invoice, Chargeback, Credit Memo, Debit Memo, or Guarantee, then
define the accounting for this transaction type in the Accounts tabbed region.

h. If this transaction type's class is Bills Receivable, then define the accounting for this transaction type in
the Bills Receivable tabbed region.

i. If this transaction type's class is Deposit, then define the accounting for this transaction type in the
Deposit tabbed region.

j. Enter the Receivable Account for transactions with this transaction type. Receivables use this
information, along with your Auto Accounting definition, to determine the receivable accounts for
transactions with these types. Receivables creates a receivables transaction record using this account so
you can transfer to your general ledger and create a journal entry if Post To GL is Yes for this transaction
type.

Guarantee Transaction Receivables account Unbilled receivable

type account
Guarantee Transaction Revenue account Unearned revenue
type account
Chargeback Transaction Receivables account Receivable
Type chargeback account

Suggestion: For Guarantee transaction types, enter the Accounting Flex field for your Unbilled
Receivable account in the Receivable Account field. Receivables only use the Unbilled Account field to
determine the Unbilled Receivable account for invoices with the rule 'Bill in Arrears.'

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Suggestion: For Chargeback transaction types enter the Receivable Chargeback account. The offset to
the Receivable account on the original debit transaction will be generated by the chargeback adjustment.
Note: Receivables does not require you to enter a Receivable account for Credit Memo transaction types
if the profile option Use Invoice Accounting for Credit Memos is set to Yes; otherwise, you must enter a
Receivable Account.

k. Enter a Freight Account for transactions with this transaction type. Receivables use this information,
along with your Auto Accounting definition, to determine the freight account for transactions with this
transaction type. Receivables skip this field if this transaction type's class is Guarantee or if Allow
Freight is set to No.

l. Enter a Revenue Account for transactions with this transaction type. Receivables skip this field if
Allow Freight is set to No. Receivables use this information, along with your Auto Accounting
definition, to determine the revenue account for transactions with this transaction type.

Suggestion: For Guarantee transaction types, enter the Accounting Flex field for your Unearned
Revenue account in the Revenue Account field. Receivables only use the Unearned Account field to
determine the Unearned Revenue account for invoices with the rule Bill In Advance.
Note: Receivables does not require you to enter a Revenue Account for Credit Memo transaction types if
the profile option Use Invoice Accounting for Credit Memos is set to Yes. Otherwise, you must enter a
Revenue Account.

m. If this transaction type's class is Invoice or Debit Memo, enter a Clearing Account for transactions with
this transaction type. Receivables uses this account to hold any difference between the revenue amounts
specified for the Revenue account and the selling price times the quantity for imported invoice lines.
Receivables only use the clearing account if you have enabled this feature for transaction sources that
you use for your imported transactions.
n. If this transaction type's class is Invoice or Credit Memo, enter an Unbilled Receivable Account. When
you use the Bill in Arrears invoicing rule, Receivables uses this information, along with your Auto
Accounting definition, to determine the Unbilled Receivable account for transactions with this
transaction type.

o. If this transaction type's class is Invoice or Credit Memo, enter an Unearned Revenue Account.
Receivables use this information, along with your Auto Accounting definition, to determine the
unearned revenue account for transactions with this transaction type. Receivables only use this account
when your transaction's invoicing rule is Bill In Advance.

Suggestion: For transaction types with a class of Guarantee, enter the Accounting Flex field for your
Unearned Revenue account in the Revenue Account field, as described above.

p. If this transaction type's class is Invoice, Credit Memo, or Debit Memo, enters a Tax Account.
Receivables use this information along with your Auto Accounting definition to determine the tax
account for transactions with this transaction type.

q. If this transaction type's class is Deposit, then complete these fields in the Deposit tabbed region:
 In the Allocation Basis field, indicate how you want to apply the balance of deposits with this
transaction type to transactions.

r. You can select Lines only to apply deposits to invoice lines only. Or, you can select Lines, Tax and Freight
to include tax and freight amounts on invoices when applying deposits to transactions.
 Enter a Receivable Account for deposits with this transaction type.

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 Enter an Offset Account for deposits with this transaction type.

s. If you set the AR: Deposit Offset Account Source profile option to Transaction Type, then Receivables
uses the Offset Account that you specify here to derive the offset account for deposits. Otherwise,
Receivables uses Auto Accounting to derive the deposit's offset account.

Few points
 When you sell goods to record normal sales we use Invoice transaction type.
 When customer return goods, to reduce customer balance we use Credit Memo (-) sign.
 To increase customer balance we use Debit Memo (+) sign.
 If we received advance from our customer, to record the same we use “Deposit”
 “Guarantee” means that our customer will agree to purchase from us for a particular amount to
avail some discount.
 Deposit & Guarantee we call as “Commitment”
 “Charge back transactions” are used to close the open invoice and to open new transaction with
new terms. Charge back transactions are automatically created by system.

For example: Customer agreed to pay the total invoice amount on a particular date but failed to pay
total invoice amount.

But customer is able to pay part of the invoice amount on agreed date and requested for to extend the
due date without charging any interest on balance amount.

In this case we have to close the existing invoice and to open a new invoice for balance amount with
extended due date without charging any interest on the balance amounts.

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Transaction source:
Transaction source is used to set the (automatic) numbering to the transaction types.
Transaction source will determine the numbering for individual transactions and batch transactions. And
also it will determine “Transaction type”.
There are 2 types of transaction Source.
 Manual
 Imported (Automatic)
Imported transaction source is used to import the transactions in to AR

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

To make Transaction in AR, we need to follow below diagram for basic setups

1) Auto cash rule set

Auto cash rule set is used to apply receipt amount against invoices. Define Auto Cash Rule Sets to
determine the sequence of Auto Cash Rules that Post QuickCash uses to update your customer's account
balances. You specify the sequence and the Auto Cash Rules for each Auto Cash Rule Set. Post QuickCash
first checks the customer site, then the customer profile class, and finally at the system options level to
determine the Auto Cash Rule Set to use.

You should assign Auto Cash rule set to the customer’s credit profile. I.e. Customer Profile class. If you do
not assign an Auto Cash Rule Set to a customer's credit profile, and you enter a receipt for this customer,
Receivables uses the Auto Cash Rule Set that you entered in the System Options window along with the
number of Discount Grace Days you specified in this customer's credit profile to apply the receipt.
If you have set up your system to use bank charges and a tolerance limit, Post QuickCash will also consider
these amounts if the current Auto Cash rule fails (this is true for all rules except 'Apply to the Oldest Invoice
First'). If it finds a match, Post QuickCash applies the receipt; otherwise, it looks at the next rule in the
sequence. You can disable an existing Auto Cash Rule Set by changing its status to Inactive and then saving
your work.

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Prerequisites Define system options

Earned Only: Your customer can take earned discounts according to the receipt terms of sale. You negotiate
earned discount percentages when you define specific receipt terms. You can enter this option if Allow
Unearned Discounts is set to Yes in the System Options window. In this case, Receivables only allows
earned discounts for this Auto Cash Rule Set.
Earned and Unearned: Your customer can take both earned and unearned discounts. An unearned discount
is one taken after the discount period passes. You cannot choose this option if the system option Unearned
Discounts is set to No.
None: Your customer cannot take discounts (this is the default).

Rules:
Apply to the Oldest Invoice First: This rule matches receipts to debit and credit items starting with the
oldest item first. This rule uses the transaction due date when determining which transaction to apply to
first.

Clear the Account: Post QuickCash uses this rule only if your customer's account balance exactly matches
the amount of the receipt. If the receipt amount does not exactly match this customer's account balance, Post
QuickCash uses the next rule in the set.
Open Balance = Original Balance + Late Charges - Discount
Receivables then add the balance for each debit item to determine the customer's total account balance. The
'Clear the Account' rule uses this equation for each invoice, chargeback, debit memo, credit memo, and
application of an Unapplied or On-Account receipt to a debit item.

Clear Past Due Invoices: This rule is similar to the 'Clear the Account' rule because it applies the receipt to
your customer's debit and credit items only if the total of these items exactly matches the amount of this
receipt. However, this rule only applies the receipt to items that are currently past due. A debit item is
considered past due if its due date is earlier than the receipt deposit date.

Clear Past Due Invoices Grouped by Payment Term: This rule is similar to the 'Clear Past Due Invoices'
rule, but it first groups past due invoices by their payment term, and then uses the oldest transaction due
date within the group as the group due date.

Match Payment with Invoice: This rule applies the receipt to a single invoice, debit memo, or chargeback
that has a remaining amount due exactly equal to the receipt amount. This rule uses the values that you
enter for this Auto Cash Rule Set's open balance calculation to determine the remaining amount due of this
customer's debit items.

Define Auto Cash Rule Set

Navigation: Setup  Receipts  Auto cash rule set
Enter Name for Auto cash rule set
Discounts: Earned and unearned
Remaining Remittance amount: Unapplied
Choose the sequence of Auto cash rule set

2) Payment Terms
If you do not want to let your customers take discounts for partial payments on items associated with this
payment term, then uncheck both the Allow Discount on Partial Payments check box as well as the check
box for the Discount on Partial Payment system option.

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Enter the Base Amount for this payment term. The default is 100, but you can change it. The base amount is
the denominator for the ratio Receivables uses to determine the amount due for installments of invoices to
which you assign this payment term. The sum of the relative amounts for all of the payment schedules that
you define for these payment terms must be equal to the value that you specify as a base amount.
If you want to use this payment term for balance forward billing, select an appropriate balance forward
billing cycle from the Billing Cycle LOV.

Any value entered in Base Amount defaults to 100.

Installment Options becomes disabled and any data entered before selecting a cycle defaults to include tax
and freight in first installment.

You can populate only one row in the Payment Schedule section and the Sequence Number and Relative
Amount values for the row default respectively to 1 and 100.

Date Due becomes disabled. However, you can populate Days, Day of Month, and Months Ahead.
If you want transactions assigned to this payment term to be printed before the due date, enter a number of
Print Lead Days. Receivables will print this transaction x number of days before the due date, where x is the
number of days you enter here.

Enter the Discount Basis you want Receivables to use when calculating discounts for your invoices. Choose
one of the following discount methods:
Invoice Amount: Choose this option to calculate the discount amount based on the sum of the tax, freight
charges, and line amounts of your invoices.
Lines Only: Choose this option to calculate the discount amount based on only the line amounts of your
invoices.
Lines, Freight Items and Tax: Choose this option to 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: Choose this option to 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.

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3) Statement Cycle

4) Collectors

5) Auto Accounting
Auto Accounting is used to create accounting entries for all type of transactions which are entered
manually and also imported transactions from other applications.
Define Auto Accounting to specify how you want Receivables to determine the default general ledger
accounts for transactions that you enter manually or import using Auto Invoice.
Receivables integrates with Oracle Subledger Accounting, the E-Business Suite's centralized accounting
engine, which accepts the default accounts that Auto Accounting derives without change. You must define

Auto Accounting before you can enter transactions in Receivables. When you enter transactions in
Receivables, you can override the default general ledger accounts that Auto Accounting creates.
 Auto Invoice Clearing
 Bills Receivable
 Factored Bills Receivable
 Freight
 Receivable
 Remitted Bills Receivable
 Revenue

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 Tax
 Unbilled Receivable
 Unearned Revenue
 Unpaid Bills Receivable

Navigation: Setup Transactions  Auto accounting

 Choose operating unit
 Type: Receivables
 Choose values for segments from “table name” or “Constant”

Is there any way link between auto accounting and SLA?

You will need AR auto accounting setup to be done. If you do not alter the standard SLA setups, SLA will
use the same accounts as AR auto accounting.
If you define your own SLA setups, they will override the AR auto accounting for account derivation.

6) Customer Profile class

Based on the past history customers are segregated into classes. These classes are called customer profile
classes. We maintain collector, statement cycle, payment terms and dunning letters through profile
classes.
At the time of creating Customer, if you assign the customer profile class to Customer, all information
maintained through customer profile class will be copied to Customer account.

Profile class is used to group the customers based on certain parameters.

We can classify the customers as Good, Average and below average.
Define Profile class: Customers  Profile Classes
 Name your Customer Profile class
 Enable √ Active Check box
 Grouping rule: Default
 Choose Payment terms
 Choose Statement cycle
 Choose collector
 Choose Auto cash rule set
 Choose profile class amounts

Making Transaction

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Details required maintaining invoice in Accounts Receivables

1. Customer name and address
2. Transaction date and amount
3. Item details & quantity
4. Sales account
5. Remit to address
6. Payment terms
7. Collector details (person who collect amount from customers, could be our employee or a third
party agent)
8. Ship to address

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9. Bill to address

Comparison of AR with AP
AP invoice types AR Invoice types
Standard invoice = Sales Invoice/Transaction
Debit Memo = Credit Memo
Credit Memo = Debit Memo
Prepayment = Deposit

We can classify the customer information into two:

1. Customer header
2. Customer address
Customer header information is Global, address information is local.
Header information of Customer & Supplier is called as master data.

System Options
System options are used to set the behavior of Receivables application.
During Receivables setup, you specify your accounting method, set of books, tax method and accounts,
customer and invoice parameters, and how the Auto Invoice and Automatic Receipts programs will run.

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Standard memo lines

Items are maintained at Inventory module. If an item is not maintained at inventory module, for example
“Service charges”, which is a non inventory item, can be maintained in “Receivables” module only.

 Standard memo lines are lines that you assign to a transaction when the item is not an inventory item
(for example, 'Consulting Services'). You can assign memo lines to debit memos, on-account credits,
debit memo reversals, chargeback, commitments, and invoices.
 Receivables display your standard memo lines as list of values choices during credit memo entry in
the Credit Transactions window and during invoice entry in the Lines window.
 When you create charge backs and debit memo reversals, you can either use the standard line that
Receivables provides or enter your own.
 You can create an unlimited number of standard memo lines.
 If Auto Accounting depends on standard line items, Receivables uses the revenue account that you
enter here along with your Auto Accounting setup to determine the default revenue, freight, Auto
Invoice Clearing, Tax, Unbilled Receivable, Unearned Revenue, and Receivable accounts for invoices
with this line item.

RECEIPTS WORK BENCH

(In Receipts workbench, Receipts can be created in 2 ways. i.e. individual/ batch)
We maintain two types of Receipts in Receipts work bench.
1. Standard Receipt/Cash Receipts
2. Miscellaneous Receipt
 Standard receipts are used for the amounts received from the customers against the standard sales
invoices raised. (here customer is known)
 Miscellaneous receipts are used for the amounts received for scrap sales are other incomes which are
received without raising a standard invoice. (here customer is unknown)
 If we receive miscellaneous income also, if we raise a standard Invoice against that, we have to use
Standard receipt only.

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Receipt Class
Through receipt class we can specify payment method, bank account details and generating receipt
automatic or Manual.
Receipt class will determine the:
- Receipt creation method
- Remittance method
- Clearance method
- Receipt method for various receipts
Creation Methods: Remittance Method:
1. Manual 1. No Remittance
2. Automatic 2. Standard
3. AP / AR Netting 3. Factoring
4. Bills receivables 4. standard and factoring
5. Bills receivables remittance
Clearance Method: Receipt Method:
1. Directly 1. Check
2. By Matching 2. EFT
3. By Automatic clearing 3. Wire
4. Clearing

Choose a Creation Method.

 If you choose Automatic, you can create receipts with this receipt class using the Automatic Receipt
program.
 In addition, for these receipts, Oracle Payments is responsible for the funds capture process.
 If you choose manual, receipts using this receipt class must either be entered manually in the
Receipts or QuickC ash window, or imported into Receivables using Auto Lockbox.
 If you choose Bills Receivable or Bills Receivable Remittance, Receivables enables the Bills
Receivable or Bills Receivable Remittance tab.

Choose a Remittance Method.

The remittance method determines the accounts that Receivables uses for automatic receipts that you create
using the receipt method assigned to this receipt class. Choose one of the following methods:
 Standard: Use the remittance account for automatic receipts or for standard bills receivable assigned
to a receipt method with this receipt class.
 Factoring: Use the factoring account for automatic receipts or for factored bills receivable assigned to
a receipt method with this receipt class.
 Standard and Factoring: Choose this method if you want Receivables to select receipts assigned to
this receipt class for remittance regardless of the batch remittance method. In this case, you can
specify either of these remittance methods when creating your remittance batches.
 No Remittance: Choose this method if you do not require receipts assigned to this receipt class to be
remitted.
Note: If the creation method is Automatic, then you cannot select No Remittance as the Remittance Method.

Clearance Method
To require receipts created using a receipt method assigned to this receipt class to be reconciled before
posting them to your cash account in the general ledger, choose one of the following Clearance Methods:
 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.

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 By Automatic Clearing: Choose this method to clear receipts using the Automatic Clearing
program.
 (Receipts using this method can also be cleared in Oracle Cash Management.)
 By Matching: Choose this method if you want to clear your receipts manually in Oracle Cash
Management.

Receipt Class: Automatic

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 Name your Receipt class
 Creation method: Automatic
 Remittance method: Standard and Factoring
 Clearance method: By matching
 Receipt Method: Check

Receivable Activities Setup  Receipts  Receivable Activities

Receivable activities are used to default the accounting information for various receivable activities.
Those are:
1. Adjustment
2. Bank Error
3. Endorsement
4. Earned Discount
5. Unearned Discount
6. Finance Charge
7. Miscellaneous Cash
8. Short term Debt

Steps:
 Name your Receivable Activity
 Type: Choose type from the above 8 types
 GL Account Source: Activity GL Account
 Tax rate code source: None
 Activity GL Account: Discount taken (Earned) Account

Earned Discount & Unearned Discount – Receivable activities

Earned discount you will receive if payment made within the due date. In some situations you will receive
discount if you are not paid within due date also, this is called unearned discount.
We have to create receivable activity for the other income stating that what the reason that we
Are receiving money is.

Receipt source
Receipt source is used to create numbering for the receipts. It will determine:
 Receipt class

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 Payment method
 Numbering for receipt batches
 Bank Account
There are 2 types of receipt sources
 Manual
 Automatic

Create receipt:

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Receipt Status
A receipt can have one of the following statuses:
1. Approved: This receipt has been approved for automatic receipt creation. This status is only
valid for automatic receipts.
2. 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.
3. Remitted: This receipt has been remitted. This status is valid for both automatic and manually
entered receipts.
4. 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.

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5. 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
transactions.

Approval limits:
Use the Approval Limits window to define approval limits for:
Adjustments: 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.
Receivable uses approval limits that have a document type of Adjustment when you create an
adjustment in the Adjustments, Submit Auto Adjustments, and Approve Adjustments windows.

Credit Memo Requests: 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.
Define Credit Memo approval limits by reason type, currency, and amount.

Credit Memo Refunds: When you attempt to electronically refund an on-account credit memo,
Receivables uses approval limits that have a document type of Credit Memo Refund.
Define Credit Memo Refund approval limits by currency and amount.

Receipt Write-Offs: When you write off an unapplied receipt amount or an underpayment on a
receipt, 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.
Define Receipt Write-off approval limits by currency and amount.
The approval limits for write-offs are separate from, but cannot exceed, the system level write-off amounts
that you define in the System Options window.

AR Integration with Other Modules

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Order to Cash Cycle (O2C)

Order to Cash Cycle - Process

OM - Process

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And AR Process shown in the next picture

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O2C Setups
1. System Parameters in OM

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2. OM Transaction Type – Line

3. OM Transaction Type – Order

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Confirm payment batch:

• Confirm checks
• Update invoice
• Payment history

4. Define document sequence

5. Define Shipping Parameters

6. Define Shipping execution Grants – Upgrade Role

7. Define Shipping Method – Assign Inventory Org to Method
8. Define Pricelist @ ADVANCED PRICING Responsibility
9. Assign shipping Method and Pricelist details @ Customer

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O2C Process
1. Booking – Sales order

2. Shipping/transaction: Query with SALES ORDER then you will be navigated to below
window

Action: Launch Pick release then Move Order number will be created.

3. Transact Move Order  Nav: Inventory/Move Order/Transact move order

4. Shipping/transaction: Query with SALES ORDER then Auto Create deliveries
5. Shipping/transaction: Query with SALES ORDER then Auto Create trip
6. Shipping/transaction: Query with SALES ORDER then SHIP CONFIRM
7. Auto Invoice master Program
8. Work Flow back ground process
9. Go to AR Module, Create Transaction and Receipt (Once you receive the payment from
Customer)

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10. Apply the receipt to the Transaction; then reconcile in Cash management.

Modules used in O2C cycle:

 Sales Order, Pick release and shipping: Order Management
 Invoices and Receipts: AR
 Reconciliation: Cash Management

Auto Log Box

Every day we receive several receipts from customers. To avoid manual work, with auto log box concept,
by using the file sent by bank, automatically system will create:
1. Automatically create receipts
2. Automatically apply to transactions also.
For that base we have to set rules:
1. Auto cash rule set
2. Application rule set

Auto cash rule set:

Setting up rules or we specify how to apply the receipts to which invoices, oldest invoices, after that recent
invoices

Application rule set:

To set up rules to apply partial amount to which account to applicable, whether? Item, Tax, Freight line
items or prorate on all the lines.
Steps:
1. Import the file from bank
2. Validate the imported file
3. Post quick cash (Balance will updated in the system)

Auto Invoice
To transfer data from AR interface table to AR, we have to run “Auto invoice master Program”.
Steps:
1. Basic setup to be completed in AR and OM
2. Define Imported transaction source
3. Define Grouping Rules
4. Define Line Ordering Rules
5. Descriptive flex field (Invoice transaction flex field)
6. Run Program – Auto invoice master
** To group the multiple lines of sales invoice into one group is grouping rules
** Setting order for grouped lines is line ordering rules

***Invoice Grouping Rules in Receivables R12

Grouping Rules group Revenue and Credit transactions into Invoices, Credit memos and Debit Memos.
Auto invoice program uses the Grouping Rules to group similar sales orders into a single invoice.
We need to assign matching attributes while defining the Grouping Rules. These attributes include
mandatory and optional parameters. Mandatory parameters are pre-defined by Oracle, where as optional
attributes are optional and can be assigned based on the business requirements. Following is the list of all
Mandatory and Optional attributes which can be assigned to the Grouping Rules.

Grouping Rules

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Define grouping rules that Auto Invoice 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.
Auto Invoice requires mandatory grouping on the transaction attributes Currency Code and Bill-To Customer (only
one of each attribute is allowed per invoice). Receivables automatically apply these required grouping
rules to any additional transaction attributes that you assign to your grouping rules. All attributes of the
Transaction Flex field are optional within a grouping rule and you can assign these attributes as optional
grouping characteristics in the Grouping Rules window.
In the figure below, the grouping rule specifies that items must have the same currency, Bill-To address,
and Order Type to appear on the same invoice. 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).

***Line Ordering Rules:

 Auto Invoice 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.
 Auto Invoice 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.

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Application Rule Set: Setup  Receipts  Application Rule Sets

Application rule set is determined, how to apply the receipt amount against various invoice components.
Invoice Components are:
- Item
- Tax
- Freight
- Financial Charges
Steps:
 Name your Application rule set
 Enter application rules & rule details.

Application rules Rule details

Seq Rules Type Tax Treatment Rounding
Over application rule
1 Line Line before √
2 freight Freight None √
3 Finance Charges Charges None √

Over application rule = Excess amount received.

Save
√ Freeze
Save your work.

What are the Auto Invoice setups

 Auto accounting
 Profile class
 Auto accounting rules
 Transaction type - Invoice
 Transaction source – Manual, Imported
 Auto invoice line ordering rules
 Auto invoice grouping rules
 Receivables payment terms
 Receipt classes, Receipt Methods
 Run: Auto invoice master program

Debit Memo
Debit Memo will be created when customer is under charged.
Memo lines are used to create transactions without item information.
Steps:
1. Define Memo lines (Setup  Transactions  Memo Lines)
2. Define Debit memo transaction type (Positive Sign)
3. Define Debit Memo Transaction Source
4. Create Debit Memo

Credit Memo
When customer return goods, to reduce customer balance we use Credit Memo (-) sign.
Steps:
1. Define Memo lines (Setup  Transactions  Memo Lines)
2. Define Credit memo transaction type (Negative Sign)

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3. Define Credit Memo Transaction Source
4. Assign Credit Memo source to the Invoice Source
5. Create Credit Memo against specific transaction.

Navigation: Transactions  Credit transactions

Step: On Account Credit Memo

Navigation: Transactions  Transactions
** On Account credit memo will be created against customer account.

Deposit
Deposit is an advance payment made by customer to the Organization.
Latter it will be adjusted for future invoice or apply to future liability.
Step: 1 Define Deposit transaction type
Step: 2 Define Deposit Source
Step: 3 Create Deposit Transactions
Step: 4 Record the Receipt against Deposit
Step: 5 Check the Deposit Balance Status
Step: 6 create one standard invoice and adjust against deposit amount

Guarantee
It is an assurance from the Customer to buy goods or services from the Organization.
Under guarantee transactions, amount will be collected from customers when we create invoice transactions
only.
Step: 1 Define Guarantee transaction type
Step: 2 Define Guarantee Transaction Source
Step: 3 Create and Complete Guarantee Transaction
Step: 4 Create invoice transaction with reference of Guarantee
Step: 5 Receive money from the customer against invoice transaction

Charge Back
Charge back is nothing but closing the existing invoice and creating new invoice with new due dates.
Charge back means decreasing the liability of a customer. It will be done if the customer has done some
payments towards the invoices. There are some other options are there. I.e. creation of credit memo. But it
can be apply only when the customer has not done payment.
Receivable lets you create adjustments and chargeback’s against transactions to which you are applying a
receipt. You can create multiple chargebacks and adjustments against each transaction, for positive or
negative amounts. Receivables let you enter a chargeback against a credit memo or an on-account credit
if they have a positive balance.

Receivables uses the transaction type of the transaction you are adjusting to validate the adjustment or
chargeback 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 debit item.

Chargebacks and adjustments do not follow the Natural Application rules; this lets you adjust transactions
in either direction, regardless of the Natural Application flag.
If the profile option AR: Allow Actions is set to No, the Chargebacks and Adjustments buttons are not
available in the Applications window.

Creating a Chargeback

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Use chargeback to create a new debit item for your customer when closing an existing debit item. For
example, your customer sends payment of $75 for a $100 invoice. You can apply the receipt to the invoice,
and then create a chargeback for the balance due.
Receivable requires that you automatically number your chargebacks. You can change the base number for
your chargeback numbering sequences by updating the Last Invoice Number field for this chargeback
batch source in the Transaction Sources window.

Step: 1 Define charge back receivable activity

Step: 2 Define charge back transaction type
Step: 3 Define charge back transaction source
Step: 4 Create Standard invoices
Step: 5 enter the receipt for partial amount and create charge back for remaining amount
Step: 6 Query the charge back invoice number
Step: 7 Query old invoice (Standard original invoice)

Invoice Rules
Invoice rules will be determined the accounting period in which receivables are recognized.
There are 2 types of Invoice Rules:
1. Bills in advance
2. Bills in Arrears

Bills in advance: System will recognize the invoice amount as a advance or starting of a project.
Bills in Arrears: System will recognize amount at the end of the contract or project.

Accounting Rules
Accounting Rules will determined the Accounting Period in which Revenues are recognized.
There are 4 types of accounting rules:
1. Daily Revenue Rates, All periods
2. Daily Revenue Rates, Partial Period
3. Fixed Schedule
4. Variable Schedule

Fixed Schedule – Accounting Rule

We will define duration of the project and % of Revenue of each accounting period, at the time of fixed
scheduled accounting rule setup.
Step: 1 Define Fixed Schedule Accounting Rule
Step: 2 Create Invoice with Fixed Schedule accounting rule with Bills in advance invoice rule.

Variable Schedule - Accounting Rules

At the time of set up the Variable Schedule Rule we will not enter duration of the project & % of
Revenue for each accounting period.
We enter only first period Revenue % at the time of accounting rule set up.
Duration of the project will be entered at the time of invoice entry.

Step: 1 Define Accounting Rule

Step: 2 Create invoice with variable Schedule accounting Rule with Bills in Arrears invoice Rule

Transaction Batch
Transaction batch is used to group the transactions based on the certain parameters.
Navigation: Transactions  Batches

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Receipt Batch
Receipt batch is used to group the Receipts based on certain parameters.
There are 3 types of Receipts batches:
1. Manual Regular
2. Manual Quick
3. Automatic

Manual Regular – Receipt Batch

Customer balances will be updated as soon as you save the receipts.
Create Manual Regular batch
Navigation: Receipts  Batches

Manual Quick – Receipt Batch

Customer balances will not be updated when we save the receipt information.
Customer balances will be updated when we run Post Quick cash program with the help of auto cash rule
set.
Define Manual Quick Batch
Navigation: Receipts  Batches
Ensure program completed Normal.

Miscellaneous Receipt
Non invoice related receipts is called miscellaneous receipts, such as interest on investment, dividend etc.
Step: 1 Define Miscellaneous receivable activity
Navigation: Setup Receipts  Receivable activities
Step: 2 Receipt of miscellaneous cash
Navigation: Receipts  Receipts

Receipt Reversal
Receipt reversal is nothing but a kind of cancellation of Receipt.
There are 2 types of Receipt Reversal Methods:
1. Standard Reversal
2. Debit Memo Reversal

Standard Reversal
When we reverse receipt with the standard reversal, all the transactions which are associated with the
receipt will get reversed.
Step: 1 Query the invoice to check the balance due
Step: 2 reverse the receipt

Debit Memo reversal

When we reverse receipt using debit memo reversal all associate transactions WILL NOT get reversed, but
new debit get created with same amount.
Step: 1 Query the receipt which you want to reverse
Navigation: Receipts  Receipts
Step: 2 Query Debit memo transactions Transactions  Transaction
Query debit memo transaction created by system

Remittance

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Remittance is nothing but sending receipt information to the bank for collection.
There are 2 types of Remittance Method.
1. Manual
2. Automatic (Refund)
There are 3 steps in the remittance process.
1. Create
2. Approve
3. Format
Step: 1 Create remittance batch
Navigation: Receipt  Remittance
Batch type: Remittance

Place the cursor on “Receipt Method” Say CTL F11

Select the checks you wish to send to bank
 Save
 Approve
Close this window
Now process status is: Started Approval

Go to View Request
Ensure program completed normal View output

Step: 2 Format the remittance batch

Navigation: Receipts  Remittances

Query approved remittance batch number

Click on “Format”
Now Process status is: Started Format

Go to View  Request
Ensure “Print Remittance” program completed normal

Step: 3 query the remittance batch t see the process status

Navigation: Receipts  Remittances
Now the process status is: Completed Format

Refund process
Refund is returning the receipt amount back to the Customer.

Step: 1 Define Refund receivable activity

Navigation: Setup  Receipts  Receivable Activity

Step: 2 create one invoice

Navigation: Transactions  Transactions
Choose payment terms: Immediate
Complete the invoice
Step: 3 Create receipt with excess amount and adjust invoice and keep remaining Amount as
unapplied or on account
Navigation: Receipts  Receipts

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Step: 4 Create remittance receipt to Bank (Automatic Remittance)
Navigation: Receipts  Remittances
Click on “Auto Create”
Go to View  Request
Ensure “Automatic Receipts Remittances Execution report” program completed normal.
View output.

Step: 5 Approve and Format Remittance batch

Navigation: Receipts  Remittances
Query your remittance batch
Now status is: Completed creation
Click on “Receipts”
You will see system will selected the receipts automatically
Click on “Format”
Now system will approve & Format also.

Step: 6
Query the receipt which you received excess to refund to customer
Navigation: Receipts  Receipts

Click on “Apply”
Apply Apply to Amount applied Activity
√ Refund 50000 RIL Ltd Refund
√ On-Account 0

Place cursor on Refund

Click on “Refund attributes”

 Choose Customer
 Choose Refund payment method: Check
Click on “Apply”
Save.
System will generate invoice in AP. One more button will come “Refund”. Validate the invoice
Make payment.
Dr Cr Amount
Transaction Receivables AC Revenue AC 10000
Receipt Confirmed cash AC Receivables AC 8000
Unapplied AC 2000
Confirmed cash
Remittance Remittance Ac
AC 10000
Refund Unapplied AC Refund AC 2000
Payment
Refund AC Liability AC
Request 2000
Payment Liability AC Cash Clearing AC 2000
Reconcile Cash Clearing AC Cash AC 2000

Transfer to GL
For each and every transactions or receipts we have to create accounting.
Step: 1 Run create accounting program

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Step: 2 Query the unposted journals in GL and post
Step: 3 to run import program in GL

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FA Integration

Introduction: Fixed Assets is a standalone application.

 This will come at PL level (We will give ledger at asset book)
 Key Flex Fields in Fixed Assets:
1. Category KFF
2. Asset Location KFF
3. Asset Key KFF (Optional)
 We can create only one structure by using the combinations of above KFFs.
 Based on the asset life we have to create Fiscal Calendar. For example 1976 to 2030.
 Depreciation calendar is used to calculate depreciation.
 Prorate convention calendar is used to prorate the depreciation from which date to which date we
have to consider.

 Mass additions: It is a Process of transferring fixed assets related data from Accounts Payables to
Fixed Assets is called Mass additions. After transferring data from AP, data will store in interface
tables.
AP -- FA Mass additions interface tables ---- FA
The data which is there in “FA Mass additions interface tables” can be seen from FA application.
If you want to convert the invoices information to Assets, we can add necessary data at interface
tables, then the data will store in FA base tables. (RUN: Mass additions create program)
 For Quick addition of Assets, only basic information is required.
 For detailed additions: list of information is required like: Asset category, Asset name, cost of asset
and depreciation of Asset.

Assets can be created following methods

1. Detailed addition
2. Quick addition
3. Mass addition
4. WEB ADI

Difference between: Detailed addition and Quick addition:

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• As mentioned above for detailed additions we have to navigate several windows to enter an asset.
(Additions, Book and Assignments)
• Whereas through quick addition button asset information will be maintained by navigating single
window only. Latter detailed information would be updated.

 Depreciation calculation is in 3 methods:

1. Straight line method/ flat
2. Table
3. Production based
4. Calculated method

 Straight line method: We will set a fixed amount for a fixed period as depreciation. For example:
Asset cost 1 Lac, asset life 5 years, so depreciation per year 1 Lac / 5 = 20000
 Table method: depreciation will be calculated based on values given in a table.
 Production base: Depreciation will be calculated on the production units

Mass transactions:
 Asset transfer can be done between Locations, Employees, and Accounts.
 Asset Changes: through this changes we can change the:
- Depreciation
- Prorate Convention
- Cost Adjustment
- Life time of Assets
 Asset reclassification is used to reclassify the assets from one category to another category.
 Projection: Through the projections we can have an idea of the future depreciation. We can see the
depreciation of an asset for the future period also.
 What if analysis: with if analysis we can analyze the differences between two different depreciation
methods.
 Over ride depreciation: Example: A plant is running in 2 shifts in a month producing 2000
units. If one month they used the plant per day 3 shifts then the production is 3000 units. As per the
regular calculation system will consider depreciation only for 2000 units.
But if you want to consider depreciation for 3000 units we have to over ride the depreciation. Over
ride the depreciation where there is unplanned activity takes place. System will consider first over
ride depreciation and then original depreciation.
 Retirement: For every asset there will be a useful life of period. Once this period completed every
asset should be retired. Some other reasons for retirement: Sale of Asset, Theft, Life of asset and
Damage of asset.
 Roll back depreciation: If we run the depreciation without period close, then we cannot make any
modifications. Then if we want to do any modifications we have to do “Roll back depreciation”.
 Calendars: FA – depreciation calendar & GL – Accounting Calendar. While transferring the
information from FA to GL, the period name should be same in the both calendars; otherwise data
cannot be transferred.

Types of Books:
• For Assets, Journals will be created based on the asset book.
• This Asset book will be associated with the particular Ledger.
• Asset book will determine the:
- Calendar
- Accounting Rules
- Natural Accounts
- Ledger for various Fixed Assets.

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Pre requisites to create Asset Book:

- Specify System Controls
- Define Calendars
- Set up your Account segment values and combinations
- Set up your journal entry formats.

Asset book Types:

In Fixed Assets we have 3 types of books:
1. Corporate Book
2. Tax Book
3. Budget Book

Corporate Book:
 This is also called Depreciation book, Asset book and Asset Register.
 Corporate book is used to maintain the Asset information and to maintain Depreciation information.
 Depreciation information will be maintained by following The Companies Act.

Tax Book:
 We will maintain the depreciation information by following the Income tax Act.
 We will copy the Asset information from the corporate book to Tax book.
 We maintain companies Act and IT Act for depreciation, if the % of depreciation is different for
companies act and IT act.
 We will copy the asset information from the corporate book to the tax book.
 We have 2 options to copy the information:
1. Initial mass copy
2. Periodic mass copy

Budget book:
 We will maintain capital Budget information.
 The Asset information also required in the tax book.
 It is an automatic activity

Type of Assets:
Assets are again 3 types as per Fixed Assets
1. Capitalized
2. CIP
3. Group Assets
4. Expense

Capitalized: Which Asset is started for using and Assets placed for service.
CIP: Construction in process: An asset which is under construction, for example building
under construction. CIP asset will changed to capitalized when it starts service.
Group Assets: Grouping the assets related to same group.

 Accumulated Depreciation: Total depreciation from beginning of the asset to till date.
 YTD depreciation: For particular year
 Depreciation: For particular period.
 Physical Inventory: Process of verification assets information in the Oracle system with the Physical
assets.
 Split: Split is dividing the Assets into individual units of assets.

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Example:
We purchased 5 plants at a time for Rs 5 Laths. We received only one invoice for all the plants. We
enter this invoice through Accounts payables. Now we are sending this information to FA through
Mass Additions. Now we want that 5 plants information differently. So we will split that into 5
plants.

 Merge: Merge is a process of adding multiple assets to a single Asset.

Example:
We have one asset like Computer.
Now we are purchasing first monitor and then CPU.
Now we are having 2 invoices I AP.
Now this will be transfer to FA through Mass addition.
These two invoices should be merged because they are single Asset.

Depreciation Calendar (Asset Calendar)

• You can set up as many calendars as you need.
• Each book you set up requires a depreciation calendar and a prorate calendar.
• The depreciation calendar determines the number of accounting periods in a fiscal year.
• The prorate calendar determines the number of prorate periods in your fiscal year.
• You can use one calendar for multiple depreciation books and as both the depreciation and prorate
calendar for a book.
• Period name as per Accounting Calendar in GL should be same as in the FA otherwise we cannot
transfer information from FA to GL.

Specifying the dates for Calendar periods

• Your corporate books can share the same calendar.
• A tax book can have a different calendar than its associated corporate book.
• The depreciation program uses the prorate calendar to determine the prorate period which is used
to choose the depreciation rate.
• You must initially set up all calendar periods from the period corresponding to the oldest date
placed in service to the current period.
• You must set up at least one period before the current period. At the end of each fiscal year, Oracle
Assets automatically sets up the periods for the next fiscal year.

Fixed Asset Mandatory setups

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CALENDER
a. Fiscal Year
Specify the start and end dates of each fiscal year for a fiscal year name. Create fiscal years from the oldest
date placed in service through at least one fiscal year beyond the current fiscal year. Depreciation will fail if
the current fiscal year is the last fiscal year.
You can set up multiple fiscal years in this window. You can assign different fiscal years to your different
corporate books. The calendar for a tax book must use the same fiscal year name as the calendar for the
associated tax book.
N: Setup -> Asset System -> Fiscal Years

b. Calendar Periods
You can set up as many calendars as you need. Each book you set up requires a depreciation calendar and a
prorate calendar. The depreciation calendar determines the number of accounting periods in a fiscal year,
and the prorate calendar determines the number of prorate periods in your fiscal year. You can use one
calendar for multiple depreciation books and as both the depreciation and prorate calendar for a book.
Your corporate books can share the same calendar. A tax book can have a different calendar than its
associated corporate book.
Attention: If you use this depreciation calendar in a depreciation book from which you create journal entries for your
general ledger, you must make the period names identical to the periods you have set up in your general ledger.
N: - Setup-> Asset System-> Calendars

c. Prorate Conventions

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You can set up or review prorate and retirement conventions in the Prorate Conventions window.
You must initially set up all your prorate conventions from the convention period corresponding to the
oldest date placed in service through the end of the current fiscal year. At the end of each fiscal year, Oracle
Assets automatically sets up your prorate conventions for the next fiscal year.
1. Same period
2. Following period
3. Pre period
4. Half period
N: - Setup-> Asset System-> Prorate Conventions

BOOK CONTROLS
Defining Depreciation Books
You can define corporate, tax, and budget depreciation books. You must set up your depreciation books
before you can add assets to them. You can set up multiple corporate books that create journal entries for
different ledger, or to the same ledger. In either case, you must both run depreciation and create journal
entries for each depreciation book. For each corporate book, you can set up multiple tax and budget books
that are associated with it.

a. Defining Corporate Book

N: - Setup -> Asset System -> Book Controls

Optionally enter a disable date for the depreciation book.

Note: Once a book has been disabled, you cannot re-enable it.

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Accounting Rules
Choose Allow Mass Changes to allow mass changes in this book.
Note: Oracle Assets does not allow mass change to assets for which you have entered unplanned depreciation.

b. Defining Tax Book

N: - Setup-> Asset System-> Book Controls

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3. System control
System Control is used to specify company name, asset numbering scheme, and key Flexfield structures.
N: - Setup -> Asset System -> System Control
Key Flex Fields in Fixed Assets:
1. Category KFF
2. Asset Location KFF
3. Asset Key KFF (Optional)

d. Defining Assets Categories

Category information is common for a group of assets. Oracle Assets defaults these depreciation rules when
you add an asset, to help you add assets quickly. If the default does not apply, you can override many of the
defaults for an individual asset in the Asset Details or Books windows. You set up default values for each
category in each book. The default depreciation rules that you set up for a category also depend upon the
date placed in service ranges you specify.
• Asset Category is used to group the Assets based on the Depreciation method and Rate, and also
building a relationship with the Asset book.
• Category information is common for a group of assets.
• Oracle Assets defaults these depreciation rules when you add an asset, to help you add assets
quickly.
• The default depreciation rules that you set up for a category also depend upon the date placed in
service ranges you specify.

N: - Setup-> Asset System-> Asset Categories

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Similarly enter the General Ledger Accounts for Tax Book also
N: - Setup-> Asset System-> Asset Categories

Asset Work Bench

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Click on Additions

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Continue

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Click on Quick Additions

3. Asset Assignments (Transfers)

Assign assets to employees, general ledger depreciation expense accounts, and locations.
You can transfer an asset between employees, expense accounts, and locations. Changing the location or
employee information, however, has no financial impact because Oracle Assets uses them solely for
property tax and responsibility reporting.
N: - Assets -> Asset Workbench

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Click on Assignments

To Change the Asset Location: Enter the Unit Change in Negative value as ‘-1’ shown in below screen

Source Line:

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Financial Inquiry:
Check the Cost, Recoverable Cost, Depreciation and Cost History of Asset then Close the form

Books: (Revaluation or Cost Adjustment)

Change the Current cost from 10,000 $ to 15,000 $ if required can change the Depreciation Method also then
Click on Done

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Asset Open:

Here we can change the Asset category and Asset Number.

Retirements:

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Choose Retirements.
Select the depreciation Book from which you want to retire the asset.

Click on DONE

After the Asset Retirement, run Calculate Gains and Losses program
Then go to ASSET WORKBENCH – Click on Finance Enquiry
Calculating Gains and Losses for Retirements
Run the calculate gains and losses program to:
 Calculate gains and losses resulting from retirements
 Correct the accumulated depreciation for reinstated assets
 Calculate Investment Tax Credit recapture for retired assets in a tax book, if necessary
Suggestion: Although the depreciation program automatically processes retirements, you can run the Calculate Gains
and Losses program several times during the period to reduce period end processing time.

N: - Depreciation -> Calculate Gains and Losses

Note: If you are using Multiple Reporting Currencies (MRC), you can run the Calculate Gains and Losses
program only from your standard Fixed Assets responsibility. You cannot calculate gains and losses from
an MRC reporting responsibility. Consequently, when you run depreciation from an MRC reporting
responsibility, the Calculate Gains and Losses program does not run automatically, as it does when you run
depreciation from your standard Fixed Assets responsibility.

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After successful completion of the program, VIEW OUTPUT to see the gains and losses.

Asset Reinstate (To correct a retirement error)

You cannot reinstate assets retired in the previous fiscal year. You can reinstate only the most recent partial
retirement. You can reinstate both individual and mass retirement transactions.
N: - Assets -> Asset Workbench
Find and select the same asset for which you have done RETIREMENTS earlier.

 Choose Retirements.
 Query the retirement transaction you want to undo.
 If the retirement has a status of PROCESSED, choose Reinstate. If it is PENDING, choose Undo
Retirement.
 If the retirement has a status of PROCESSED, calculate gains and losses to reinstate the asset. If it is
PENDING, Oracle Assets deletes the retirement

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Click on Reinstate

Click on OK and close. After the Asset Reinstate, run Calculate Gains and Losses program
 Then go to ASSET WORKBENCH – Click on Finance Enquiry
N: - Depreciation -> Calculate Gains and Losses

Mass Transactions
 Mass Additions
 Mass Transfer
 Mass Changes
 Mass Revaluations
 Mass Reclassifications
 Mass Retirements
 Mass Reinstate

Mass Additions:
Defining Items – Asset items
There are two ways you can define items from the Master Items window. You can use the Attribute Groups
tab, or the Item Folder tab. The Attributes Group tab allows you to select individual attributes, and use the

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tool menu to apply templates and assign organizations The Item Folder tab enables you to create an item,
apply a default template, and assign the item to an organization all in one window.
Most of the item information is optional. You define only the information you need to maintain the item.
If an application is not installed on your system, the tab is not enabled. For example if Oracle Order
Management is not installed on your system, you cannot access the Order Management tab.

At Inventory Module

PO

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Invoice – Match with PO

At distributions, Track as Asset check box is enabling if yes then Save and Close the Form
Enable Validate and Force Approval check box and Click on OK

Step2:
 Run – Mass additions create - program
 Mass additions create report – program

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Step 3:
Go to assets module
N: - Mass Additions -> Prepare Mass Additions

Mass Addition Queues

Enter the Category of Asset, Expense Account and Location of Asset then Click on Done
To check the Queue as POST

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Step 4:
N: - Mass Additions-> Post Mass Additions
If any errors occurred

Mass Transfers

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Use this form to transfer a group of assets between general ledger expense accounts, employees, and
locations.
N: Mass Transactions > Transfers

Mass Changes

Changing Asset Details

You can change descriptive information for an asset at any time. Changing asset descriptive information
other than category and units has no financial impact on the asset.

N: - Mass Transactions -> Changes

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Mass Reclassifications
Reclassify assets to update information, correct data entry errors or when consolidating categories. You
cannot reclassify fully retired assets.

Note: When you reclassify an asset in a period after the period you entered it, Oracle Assets creates journal
entries to transfer the cost and accumulated depreciation to the asset cost and accumulated depreciation
accounts of the new asset category. This occurs when you create journal entries for your general ledger.
Oracle Assets also changes the depreciation expense account to the default depreciation expense account for
the new category, but does not adjust for prior period expenses.

N: - Mass Transactions-> Reclassifications

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Mass Revaluations

PREVIEW and then RUN

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Revalue assets to adjust the value of your capitalized assets in a highly inflationary economy. You can
revalue all categories in a book, all assets in a category, or individual assets.
The Mass Revaluation process includes the following steps:
 Create Mass Revaluation Definition
 Preview Revaluation
 Run Revaluation
 Optionally Review Revaluation
N: - Mass Transactions -> Revaluations

Mass Retirements
Use this form to retire a group of assets. You can also use this form to reinstate a mass retirement
transaction.

Retiring a group of assets

You can retire a group of assets at one time. You enter selection criteria in the Mass Retirements window to
choose the group of assets you want to retire.
When you define a mass retirement, you can choose to immediately submit the concurrent request to retire
the selected assets, or you can save the mass retirement definition for future submission. You can change
the details of any mass retirement before you submit the concurrent request.
You can also reinstate a mass retirement transaction.

Note: When you perform a mass retirement, Oracle Assets creates PENDING transactions that are not
PROCESSED until you run the Calculate Gains and Losses program.

N: - Mass transactions -> Retirements -> Create and Reinstate

Enter one or more of the following selection criteria for your mass retirement:
 General Ledger Depreciation Expense Account range
 Location
 Employee Name and Number
 Asset Category
 Asset Key
 Cost Range
 Asset Number range
 Dates in Service range

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Then “Create mass retirements” program will run. And TRANSACTION NUMBER will be created.
N: - Mass Transactions -> Revaluations

Query the Mass Transaction Number as 393 then Click on Retire. Then “Mass retirements report” will run
at backend.

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After the Mass Retirements, run Calculate Gains and Losses program. Then go to ASSET WORKBENCH –
Click on Finance Enquiry
N: - Depreciation -> Calculate Gains and Losses

Mass Reinstate
N: - Mass Transactions -> Retirements -> Create and Reinstate
Query the reinstatement transaction in the Retirements window and choose the Undo Reinstatement button
To undo/reinstate a mass retirement transaction:
Note: If you reinstate a mass retirement after you have run the Calculate Gains and Losses program, you
must rerun the Calculate Gains and Losses program to process the mass reinstatement.

Then “Mass reinstate program” will run. After the Mass Reinstatements, run Calculate Gains and Losses
program
N: - Depreciation -> Calculate Gains and Losses
Then go to ASSET WORKBENCH – Click on Finance Enquiry

Tax Book Maintenance

You can copy your assets and transactions from your corporate book to your tax books automatically using
Mass Copy. You must allow Mass Copy and choose whether to copy additions, cost adjustments,
retirements, and salvage value for your tax book in the Book Controls window before you can run mass
copy. You also specify which corporate book mass copy uses as the source. You cannot copy assets from one
corporate book into another corporate book.
Use Initial Mass Copy once to set up your tax book with assets from your corporate book. Then use Periodic
Mass Copy each period to update the tax book with new assets and transactions. You also can manually
add a single asset to a tax book.
Oracle Assets defaults the depreciation rules you defined for the category and date placed in service in the
tax book. For assets depreciating under the units of production method, Oracle Assets automatically copies
the cost, date placed in service, and capacity from the corporate book.

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N: - Tax -> Initial Mass Copy

DEPRECIATION
When you run depreciation, Oracle Assets gives you the option of closing the current period if you check
the Close Period check box on the Run Depreciation window. If all of your assets depreciate successfully,
Oracle Assets automatically closes the period and opens the next period for the book. If you do not check
the Close check box when you run depreciation, Oracle Assets does not close the period.
Once depreciation has been processed for an asset in the current open period, you cannot perform any
transactions on those assets unless depreciation is rolled back or the current period is closed.
Attention: Ensure that you have entered all transactions for the period before you run depreciation. Once the program
closes the period, you cannot reopen it.
N: - Depreciation -> Run Depreciation

ROLL BACK DEPRECIATION

Rollback depreciation in 11i
Rollback Depreciation program (R11i) is now obsolete. We need to run program called ‘Rollback
depreciation’ in 11i for making transactions with that particular asset in the corporate asset book.

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Depreciation rollback restores assets to their state prior to running depreciation. For example, you may have
outstanding adjustments or transactions that you need to process for a period. However, you have already
run depreciation for that period. If the Close Period check box was not checked when you ran
depreciation, depreciation is automatically rolled back when you process transactions on these assets.

Rollback depreciation in R12

Depreciation is rolled back automatically by Oracle Assets provided the following conditions are met:
 Depreciation has been processed in that period
 The period is not Closed
N: - Rollback Depreciation

Create Accounting N: Create Accounting

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IMPORTANT REPORTS IN FIXED ASSETS

1. Asset Additions by cost center report
2. Asset transfers report
3. Asset retirement report
4. Asset retirement by cost center report
5. Property Tax report
6. Transaction history report
7. Mass additions posting report
8. Delete mass additions posting report
9. Delete mass additions preview report
10. Asset reclassification report
11. Asset by category report
12. Mass additions validity report
13. Cost adjustment report
14. CIP Asset report
15. CIP capitalization report
16. Unplanned depreciation

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Cash Management model is used to manage liquidity and control cash, some techniques like Cash pooling
will help organizations to use idle funds and reduce external borrowing which will help organizations use
cash optimally. Some enhancements like Bank Accounts transfers are very useful features for those who deal
with multiple accounts.

Multi-Org Access Control (MOAC) Supports MOAC and users can work on multiple organizations from a
single responsibility.

Sub-Ledger Accounting (SLA) Cash management is tightly integrated with SLA and all cash management
accounting is handled using SLA.

Bank Account Transfers

Balances can be transferred between internal bank accounts manually or automatically using physical cash
pools, this feature earlier supported from treasury is now supported in Cash Management. However payment
processing is handled using Oracle Payments and accounting using SLA.

Cash pooling
Oracle Supports following cash pooling techniques
a. Self Initiated Physical Cash Pools
b. Bank Initiated Physical Cash Pools or Zero Balance Accounts (ZBA)
c. Notional Cash Pools

Banks and Bank Accounts

In 11i, the banks, bank accounts were owned by AP. However in R12, the banks are owned by Cash
Management; however the banks forms can still be accessed from AP or AR.

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Also the functionality of bank account transfer was part of the Treasury Module, which is now available as
part of the Cash Management.

Bank Account transfer is a functionality in which we can initiate a balance transfer between two intra bank
accounts i.e. transfer between two accounts.

So basically there is no direct interface from cash management to GL. All the entries that cash management
creates are in either AP or AR. So to move the transaction you need to do a GL transfer from AP, AR and then
run the Journal Import, Posting etc.

New Bank Account Model

Banks are now taken into Trading Community Architecture (TCA) which will give several benefits when
customers are using shared services models for disbursements and collections. Benefits from the new bank
account module are
 Bank Account access for each application is made explicit (allow/open) for security and internal
control purposes.
 Each bank account is defined for Bank & Bank Branch combination which is defined in TCA.
 A single Legal Entity is granter ownership for the Bank Account and user rights are provided for
organizations.
 Since the bank account is at legal entity level reconciliation made easy as it is one account against
multiple in previous models, reconciliation options are defined at bank account level.

Cash Transactions in Cash management

There are two types of cash Transactions in cash management
1. Bank Account Transfer
2. Cash flow Transaction.

Bank Account Transfer In order for the banks to show up in the Create bank account transfer, it is important
to set the profile option "CE Bank Account Transfers" to Cash management. By default it is begin set to
"Treasury".
And once the Reconciliation completes, we can run the following out-of-the-box reports,
 Cash in Transit Report
 GL Reconciliation Report
 Bank Statement Summary Report
 Transaction Available for Reconciliation Report

Reconciliation
We use the Oracle CM for the main purposes of reconciliation. Basically reconciliation is process of matching
and clearing the transactions that happened with Payables, Receivables, Payroll and Treasury.

This is how it works

Let us say we have made a payment using Payables for a particular invoice. Then typically this payment goes
through the standard process of Build, Formatted and confirmed and then finally to GL. It is important to
understand that this payment is always associated with a bank account number.

Now when the Bank periodically sends the statements detailing all the payments and receipts, we enter this
information into the Oracle Cash Management using the Bank statement workbench. Now we can reconcile
these bank statements against our regular payments and receipts transactions. This is what is called
Reconciliation.

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There are two major steps involved in reconciliation and they are
 Matching
 Clearing
The Bank Statement transferred will consist of the following types of transactions,
 AP Payments
 AR Receipts
 GL Journal Entries
 Bank Charges (Bank Originated)
 Interest (Bank Originated)
 Payroll entries (Bank Originated)
 Treasury Settlements (Bank Originated)

Matching is the process by which

Case 1
 Go the Accounts payable system and do the following.
 Create an invoice batch, an invoice and then distributions, and go through the process of validating,
accounting, approving etc.
 Create a payment batch, a payment in it and build the payments. (Remember for simplicity purposes
enter exactly the same amount for payments as for the invoice)
 Run the program "Payables Transfer to GL' and post the transactions.

 Come to the Oracle Cash Management application using the OCM responsibility.
 Enter a bank statement, for say 'Commercial bank' with the amount exactly same as payment created
above. (A bank statement typically has header and line and line amount should be same as payment
amount).
 While entering the line information, enter in the TRANSACTION NUMBER SAME AS THE
PAYMENT BATCH NUMBER (this is very important Matching criteria for reconciling the transactions
for the payable transactions)
 Call the Auto Reconciliation program from the tools menu (look for the errors and reconciliations).
Case 2
 We can do the same process for the Receivables transactions as well.
 The important thing is that, we need to give the TRANSACTION NUMBER AS THE RECEIPT
BATCH NAME.
 select * from ce_statement_headers_int
 select * from ce_statement_lines_int
 You can reconcile the bank statements in Cash Management either automatically or manually.
 The Automatic Reconciliation process can be setup to create miscellaneous transactions automatically.
Setups:
1. Define cash management responsibility
2. Assign profile options to the OCM responsibility (MO, Ledger, Hr_user, Business group)
3. Assign OCM responsibility to the users.

Open CM responsibility,

1. Define System Parameters

Navigation: Setup/system/system parameters

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Manual reconciliation:
N: Bank statements/ Manual clearing/ clear transactions

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

Then Run: Create accounting program

Auto Reconciliation:
1. We need to map the bank account statements
N: setup/ banks/ bank statement mapping
Bank statement mapping is useful to map bank statement given by the banks with our format file which has to be
uploaded in to the bank

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

2. We need to define Transaction codes

N: Setup/Banks/Bank Transaction Codes
Give your own transaction code for Payments and receipts

3. We need to run : Bank statement loader program

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

4. Run: Bank statement import program

5. Run: Auto Reconciliation program

Bank Account Transfers

1. Define payment template

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
N: Setup/system/payment template

Click on PAYMENT DETAILS

2. Define transaction subtype

N: Setup/System/Transaction subtype
Click on CREATE

3. Bank Transfers

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
N: Bank transfer

So, we need to define Intra company setups. And then re do process.

Now ‘Authorize the bank statements’

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

4. Reconciliation
N: Bank statements/ Manual clearing/ clear transactions

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

Then Run: Create accounting program

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

1. Key Flex Fields

2. Accounting Setup Manager
3. Primary Ledger
4. MSQ – Management Segment Qualifier
5. Reporting Ledger – MRC
6. Sub ledger
7. Ledger Set
8. Data Access Set
9. Data Definition Set
10. Legal Entity
11. Operating Units
12. Intra company
13. Intercompany balancing rules
14. Open / Close periods
15. Journal Options
16. Sequencing: Accounting & Reporting

Key Flex Field

New Key Flex Field is added in R12 – GL Ledger Flex Field.
Now we have 3 KFF in GL.
1. Accounting KFF
2. Reporting Attribute KFF
3. GL Ledger FF

 If you have created your “COA Structure” by using Accounting KFF with the 4 Segments i.e.
Company, department, Accounts and Location.
 The same structure will be copied to “GL Ledger FF” by adding one more segment called “Ledger”.
 GL Ledger FF is used for internal purpose.
 We use majorly in: Mass Allocation & FSG

General Ledger 3
Assets 3
Receivables 2
Inventory 7
HR 8
Payroll 3
EBT 1
Etc 11
Total 38

Accounting Setup Manager – ASM

 In 11i Set of Books is similar to ASM in R12.

 ASM is a centralized place where we can perform several activities.
Those are,
1. Primary ledger creation
2. Reporting ledger (Multi Reporting currency) setup

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
3. Secondary Ledger
4. Legal entity creation
5. Operating unit creation
6. Intercompany balancing rules
7. Intra company

Primary Ledger
11i Set of Books = R12 Primary Ledger
 In 11i Set of Books determines 3 C’s i.e. Currency, Calendar & Chart of Accounts.
 4th C added in R12 i.e. Accounting Method.
 4 C’s:
1. Calendar
2. Currency
3. Chart of Accounts
4. Accounting Method

 Accounting method determines which method organization opt for accounting whether Accrual or
Cash basis.
 Ledger is where we record the actual day to day business transactions.
 Primary Ledger is created in General Ledger responsibility through “ASM”.

Reporting Ledger

Reporting Ledger is used for Multi reporting currency purpose.

 In 11i we have to perform several steps to define MRC through Set of Books.
 We have to create 2 set of books and have to manually choose the SOB as reporting or primary.
 We have to manually assign reporting SOB to primary SOB.
 Journals transferred to reporting SOB in unposted mode.
 Calendar and Chart of accounts should be same.
 Where as in R12 steps are minimized to perform MRC
 Once you assign reporting currency to Primary Ledger, system will automatically create
reporting Ledger
 And also Reporting Ledger is assigned by system automatically to Primary Ledger.
 Journals will transfer to Reporting Ledger in Posted mode.
 To perform MRC in R12 through Reporting Ledger Calendar, Chart of Accounts and
Accounting method should be same.

If any C is different apart from Currency:

 If Chart of accounts, Calendar and Accounting Method is different, we have to use Secondary Ledger
concept to perform MRC.
 For internal management reporting purpose also we can use secondary ledger concept, when we
have Accounting Method is different.

Legal Entity
 In 11i we create Legal Entity in HRMS Responsibility.

 In R12, Legal Entity is created through “ASM” from GL Responsibility.

 We can create Legal Entity address also from “ASM”
 No need to classify the Legal Entity information.

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 After creation of Legal Entity the same we assign to Primary Ledger through “ASM”
 Then we assign Balancing Segment Values (BSV) (Company) to Legal Entity what are all the
companies are maintained under one legal registration.
 For AGIS (Advanced Global Intercompany system) purpose also we have to assign Legal Entity to
Primary Ledger

Operating Unit
 11i Operating unit is created in “HRMS responsibility” through Organization window.

 Where as in R12 we can create Operating unit in 2 ways:

1. Through ASM from GL Responsibility
2. “HRMS responsibility” through Organization window

 To create OU through ASM, the prerequisites are Business group & Legal Entity.

11i OU assigned to LE R12 OU assigned to Primary Ledger

Sequencing
 Sequencing is used to assign gapless numbering for the transactions which are manually entered
and also imported from SLA journals.
 Sequencing is 2 types:
1. Accounting Sequencing
2. Reporting Sequencing
 Accounting Sequencing: When you post the journal, number will be assigned to transaction (e.g.:
Manual Journals & SLA Journals)
 Reporting Sequencing: Number will be assigned to transactions at the time of closing the period.
This is used as a legal compliance for gapless numbering.

Inter Company Accounts

Inter Company transactions means:
Transactions between the Companies under the same Legal Entity

Intra Company (AGIS)

Intra Company transactions means:
 Transactions between the Companies under the different Legal Entities
 This concept is also called as AGIS (Advanced Global Inter Company Systems).

Ledger Set
 Collection of Ledgers is called Ledger Set.
 We can group the ledgers as a set who’s Calendar and Chart of accounts should be same.

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 In general to access single ledger we will assign “GL Ledger Name” profile option to GL
Responsibility.
 To access Ledger Set we have to assign “Data Access Set” profile option to GL responsibility.

Advantage of Ledger Set:

 No need to create several GL responsibilities for each Ledger, we can access multiple ledgers from
single responsibility without switching responsibility.
 We can open / Close periods at a time for all the ledgers.
 We can perform the activities like Revaluation, Translation and consolidation reports from single
responsibility for all the ledgers at a time.

Open / Close Period

 In 11i we have to open the periods one by one each period.
 In R12, once we open first period, system will ask for the target period.
 System will automatically open the periods which are between first period and target period, by
running a program.

Management Segment Qualifier

In 11i we have 5 FFQ, R12 added 6th FFQ i.e. Management FFQ
Management Segment Qualifier: MSQ is used in Data Access set for allowing privileges to user other
than balancing segment values. But we cannot assign Management segment FFQ for the segment for
which already Intercompany, Balancing and Natural accounts FFQ are assigned.

Data Access Set

 It is a kind of security to access data.
 Through data access set we can set privileges to user to access the data in 2 modes.
1. Read only
2. Read and write
 We can set privileges to access for balancing segment values where we assign balancing segment
FFQ.
1. Balancing Segment values (BSV)
2. Ledger
3. Ledger Sets
 If customer required to give access through data Access Set to other than BSV (for example
Location), then we have to assign “management Segment qualifier to that Location.

Definition Access Set

 Definition access set is also used to set privileges as a security.
 Through this we can set privileges or level of permission to users for specific functions.
 Definition access set is used for only General ledger functions.
 We can set privileges like:
- Use
- View
- Modify

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
New features in Accounts Payables
1. Lines in the invoice
2. Two new invoices
3. Changes in the supplier
4. Changes in the banks
5. TCA (Trading Architecture Community)
6. AP / AR Netting
7. Payment Manager
8. MOAC (Multi Org Access Control)
9. SLA (Sub ledger Accounting)
10. Create Accounting
11. Changes in the invoice work bench
12. Asset Invoices
13. Change in the AP report names
14. Options

1. Lines in the invoice

In 11i invoice body contain header and distribution only.
R12 added “Lines” in the invoice body.
We can enter several line items in one invoice and assign distributions to each line separately.

2. Two new invoices

Added two more invoice types in R12.
 Retain age Release Invoice
 Transportation Invoice
Retain age Release invoice; in general we use this invoice more in contracts. Customer will retain some
amount from the periodical payment up to the contract get completed for security purpose. And release
that retained amount after the completion of contract.
For this purpose we use “Complex PO entry form”. This is an HTML page. We have to match the
invoice with this PO.
Transportation Invoice is used in general, where goods purchased from one supplier and the same
goods transported by another supplier. To record this transportation separately we use Transportation
invoice.

3. Changes in the Supplier

 In 11i, Supplier header is Global (master Record) and Supplier site is Local (specific to OU).
 In R12, if you give access at supplier site level, this will become Global.
 Other operating units also can access Supplier site information.
 This is a HTML web page called JSP page (Java Screen Page).

4. Changes in the Bank

 We have only one form to create all 3 types of bank accounts (Internal, Supplier and Customer) in
11i.
 Here the bank account is Operating unit specific.
 In R12 bank accounts are created separate forms for each type of account.
 Here bank & bank branch account information can be accessed by all operating units if we give
access, which are under same Legal entity.
 Legal Entity is owner of the Bank in R12.
 Bank and branches are become parties of TCA.
Internal Bank account creation only defined in the banks window.

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
Whereas Supplier Bank account will be created in Supplier creation window and Customer bank account
will be created in Customer creation window.

5. TCA – Trading Community Architecture

If the users of different applications need the same data, the same definition we store in common data
storage area. This concept is called “Trading community Architecture” (TCA). Such data we called “Party”.
TCA Parties 11i: Legal Entity, Customer
TCA Parties R12: Legal Entity, Customer, Supplier, Bank and bank branches.

In R12, Legal Entity is owner to Bank, hence Bank also become a party of TCA.
Use of TCA is data can be accessed at Global level.
TCA table starts with HZ.

6. AP / AR Netting
 This concept we called as “Contra” in 11i.
 We can cancel the customer and supplier contra balances for only one party at a time at balances
level only.
 We have to add one more functionality called “Contra charging menu” to contra
 Navigation: System Administration  Application  Menu
Query: AP_NAVIGATE_GUI12.
 R12 introduced this concept as “AP/AR Netting”.
 With this we can net amount customer and supplier contra balances for several parties at a time at
transaction level.
 Site level netting also possible in R12.
 System will automatically update the account balances.
AP/AR netting accounting entry:
 Liability account to Netting account

7. Payment Manager
11i R 12
 Payment batch  Payment Manager
 Form based  Web page
 From front end we cannot see  It is a dash board environment. We can create some
the payment details in the Batch templates with more options.
 We can stop the batch payment process at certain point.
 We can process multiple currency payments.
 Payments multiple operating units of one legal entity are
 Multiple currency payments are possible.
not possible.  Payments of multiple operating units under multiple
Legal entities possible.

8. MOAC – Multi Org Access Control

 In 11i we have to switch responsibility to access other operating unit.
 Through MOAC concept in R12:
 From single responsibility we can access multiple organizations.
 We can access all operating units without switching one responsibility to other.
 We can grouped different operating units to one “security profile” and then assigned to
Responsibility.

 These are 2 types:

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1. Security profile (MO: Security Profile & HR: Security Profile)
2. Global security profile
 Through “Global security profile” we can access the operating units though they belong to different
business groups.
 MOAC is used to the applications which works at operating unit level (Example: AP, AR etc.)

9. SLA – Sub Ledger Accounting (Read Notebook)

1. We can do some modifications in the standard process for sub ledger account transactions.
2. Transaction type is called event class
3. Event type are specific action on the invoice (validation, cancellation etc)
4. Multiple accounting representation can be achieved through SLA
5. Multiple period accounting representation also possible
6. SLA is used to set up derivation rules to pick up the fields for accounting
7. Classification wise liability account, such as: Regular supplier, Tax Authority, Contract Supplier or
Employee. If you set derivation rule for supplier classification, system will automatically taking the
classification.
8. Accounting Generator is helping SLA to create accounting
9. Reconciliation of month end process is easy
10. As and when create invoices, SLA immediately generate journal entries
11. Detailed drill down of information is possible

10. Create Accounting

 11i we use “Payables transfer to General Ledger” program to transfer AP data to GL.
 R12 to transfer data from AP to GL, program name is “Create Accounting”.
 We have 3 modes in create accounting program.
i) Draft
ii) Final
iii) Final Post

 Draft : This is only for review purpose. No real entries generated.

 Final : Real entries are generated. Transfer data as un posted based on the parameters.
 Final Post : Real Entries are generated; data transferred to GL and posted the
Entries based on the parameters.

 Data will transfer to GL through SLA, interface tables by default not available.

11. Changes in the invoice work bench

11i we have separate invoice type for PO Default & Quick Match.
R12 included this concept in the standard invoice itself.

12. Asset invoice process

 11i to create Asset invoice
 We have to choose track as asset from Folder.
 We have to give distribution account as “Asset Clearing” or “CIP Clearing”.
 R12 no need track as asset, only we have to choose distribution account as “Asset clearing” or “CIP
clearing”.

13. Options in Accounts payables

Options in 11i: 2
1. Financial options

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2. Payables Options
Options in R12: 4
1. Financial Options
2. Payable options
3. User operating preferences
4. Payable system setups (Global information)

AR NEW FEATURES
1. MOAC
2. Line level Cash Application
3. Refund process automation
4. Revenue recognition
5. Sub ledger accounting
6. Customer screen
7. Late charges
8. AP/AR Netting
9. Balance forward billing
10. Create accounting
11. Collections work bench

Refund process automation

If customer paid excess amount, that can be paid back (Refund) to customer or can be keep as ON-
ACCOUNT in customer account.
11i
 Enter a debit memo for excess amount received
 Apply the excess amount to debit memo
 Create Customer as supplier in AP
 Create one standard invoice in AP for customer
 Distribution account (Clearing Account) should be same in both debit memo and standard invoice
 Make payment
R12
 Receivable activity - Refund attributes will get enabled in invoice work bench
 System will ask for payment method
 Once you save, system will automatically create customer as supplier
 Query invoice in AP and make payment

Revenue Recognition
It is a process of recognizing the revenue of a project.
We have to set up Invoice rules & Accounting rules
 Invoice rules: To recognize revenue schedules
 Accounting rules: for % of revenue (Fixed duration, Variable duration, Daily)
Total cost is booked to Deferred COGS account; if you run a program balance will transfer from deferred
COGS to COGS

Customer Creation
Customer creation is done through HTML page or web page.
Customer bank account can be created in customer definition.

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
Late Charges / Financial Charges / Interest
Late charges / financial charges / Interest charges are specific to operating unit in 11i
R 12:
Late charges are global and centralized & fixed amount of interest can be chargeable.

Balance forward billing

 This concept is called as “Consolidated billing” in 11i
 For credit card or telephone bills, all transactions together billed at one cutoff date, this is called
consolidated billing.
 This can be generated at customer site level or specific customer account level.
R12:
Balance forward billing can be generated Daily, Weekly or Monthly through Bill Presentation Architecture
(BPA)

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

Accounts Payable
Payable Particulars R12 11i
Invoice Operating Unit at Header Yes No
Invoice Invoice Lines as a new additional line Yes No
added in Invoice screen.

Invoice All distribution option Yes No

Invoice Tax details option Yes No
Invoice Tax calculation option Yes At invoice header
Invoice Allocate freight and special charges are Yes No
define to the lines on the invoice

Invoice Allocation of freight and special charges No Yes

are define at the distribution level only

Invoice Match Action come to Header Header level Near to Match

Invoice DFF at Header Yes No

Invoice DFF at Distribution Yes No
Invoice Create Accounting Draft, Final, Final Only
Post
Invoice Multi Organization Access Yes No
Control(MOAC)
Invoice Sub ledger (SLA) Yes No
Payment Payment Process Profile Yes No
Payment Operating Unit at Header Yes No
Payment Payment manager Yes Payment Batch
Supplier HTML Form Yes No(Java Form)
Supplier MOAC Access Yes No
Supplier become as a TCA Party Yes No
Supplier Supplier Define in AP. No Yes
Supplier Supplier Site as a TCA Party Site for each Yes No
distinct Address

Supplier Supplier Contact copy For Each Supplier No Yes

Site
Payable Accounting, Method, Transfer to GL No Yes
Option

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
Payable About Supplier related info (Supplier Yes At financial
system set numbering) option
up

Accounts Receivable
AR Particulars R12 11i
Invoice Auto GL date Yes Customized
Invoice Copy invoice Yes No
Invoice Create Accounting Draft, Final, Final Only
Post
Receipt Customer master Yes No
Receipt AP-AR Netting Yes No
Receipt Balance forward billing Consolidated
billing (Proxima
payment term)
Receipt Credit card Charge back Yes No
Set Up EB tax Yes No
Receipt Automated Refunds Yes No
Receipt Daily revenue Yes No
Receipt Revenue Contingencies Yes No
Receipt Deferred COGS and Revenue matching Yes No

Set Up Sub ledger Accounting(SLA) Yes No

Set Up Multi Organization Access Control Yes No

(MOAC)
Set Up Legal Entity at transaction type and Batch Yes No
source and Auto invoice

General Ledger
GL Particulars R12 11i
Journal Tax Batch option Yes No
Journal Approve option Yes No
Journal Auto Copy option Yes No
Ledger 4c, Currency, COA, Calendar, Account Yes 3C Currency,
convention COA, Calendar
(Set of books)
Ledger Sub ledger Accounting(SLA) Yes No

Ledger Multi Organization Access Control Yes No

(MOAC)

Fixed Asset

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FA Particulars R12 11i
Depreciation Roll back depreciation Auto Manual

Ledger Sub ledger Accounting(SLA) Yes No

Ledger Multi Organization Access Control Yes No

(MOAC)

Cash Management
CM Particulars R12 11i
Set up Bank and Branch become part of TCA Yes Internal Banks
Parties defined in AP and
that is shared by
AP,AR,CE,
Payroll and
Treasury and they
are bank accounts
often copy in
multiple
Operating Units
Set up Internal Bank Account in Cash Yes Bank Define At
Management which is defines by a Legal Operating Unit
Entity. Here the Operating units have Level
their own rights

Ledger Multi Organization Access Control Yes No

MOAC

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

Module Month End Activity

AP Complete All invoices ,Cr memos, Dr Memos, Prepayment invoices for the period
Run the payable Approval process for All invoices
Review the invoice on hold report ----Hold and release invoice untick on accounted
Review the Unaccounted Transaction report
Optionally run a payment process request at the month end
Transfer all approved invoices and payments to the GL
Review the payable to GL posting process after completion
The sub ledger accounting program report generated by the create accounting program
The posted invoices register
The posted payment register
Submit the Unaccounted Transactions sweep Program
Reconcile payments to Bank statement activity for the period as described in cash
management.
Run mass addition transfer to Oracle Asset
AR Complete all transactions for the period being closed
Review the unapplied receipt register
Reconcile receipts to bank statement Activity for the period
Post to the GL
Review the sub-ledger period close exception report and unposted transaction report
Asset Complete prepare and post mass addition
Complete Manual Addition, Adjustments, Retirements
Run Depreciation
Create Accounting
GL Complete Oracle Sub ledger interfaces to Oracle GL
Complete recurring journals and journal reversals
Complete mass allocation journals
Verify any unposted journals and post all journal batches
Run sub ledger period close exception report
Reconcile all intercompany accounts
Run the consolidation process
Run 'Post all journals"
Then close the period.
Purchase Complete PR, PO & Releases, Receipts and returns
Identify and review Uninvoiced Receipts
Run the receipt accruals

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
Period Close Process in GL
1. Set the status of the first accounting period in the new fiscal year to Future Entry.
Note: The first period of the new fiscal year should not be opened until all of the year–end processing
for the last period of the current year has completed.

2. Transfer data from all of your sub ledgers and feeder systems to the GL_INTERFACE table.

3. Run the Journal Import process to populate the GL_JE_BATCHES, GL_JE_HEADERS, and the
GL_JE_LINES tables. This can be done automatically from the sub ledgers systems, or manually
from Oracle General Ledger.

4. Close the period for each sub ledgers. This prevents future sub ledger transactions from being
posted to General Ledger in the same period.

5. Review the imported journal entries in Oracle General Ledger. You can review them online or in
reports. Reviewing journal entries before posting minimizes the number of corrections and changes
that need to be made after posting.
i. Below is a list of useful reports:
ii. Journal Batch Summary Report
iii. General Journal Report
iv. Journal Entry Report
v. Journal Line Report
vi. Journal Source Report
vii. Journals by Document Number Report (when document sequencing is used)
viii. Unposted Journals Report.

6. Post the imported journal entries. You can also schedule Autopost to pick up and post journals
transferred from subledgers on a regular basis. This reduces the volume of posting done at month
end.

7. Revalue balances to update foreign currency journals to your functional currency equivalents.

8. Post all journal entries, including: manual and reversals.

9. Update any unpostable journal entries and then post them again.

10. Common reasons for unpostable batches include:

a. Control total violations
b. Posting to unopened periods
c. Unbalanced journal entries
11. Run General Ledger reports, such as the Trial Balance reports, Account Analysis reports, and
Journal reports.
12. Create and post adjusting entries and accruals in the adjusting period.
13. Run Trial Balance reports and other General Ledger Reports in the adjusting period after
adjustments are made.
14. Close the last period of the fiscal year using the Open and Close Periods window.
15. Open the first period of the new fiscal year to launch a concurrent process to update account
balances. Opening the first period of a new year automatically closes your income statement and
posts the difference to your retained earnings account specified in the Set of Books form.
16. Run FSG reports for the last period of the year.

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
AP - PERIOD CLOSING PROCEDURES

Complete transactions:
To close the AP period we have to complete all transactions. So to find out the incomplete transactions we
have to run the following Standard reports.
a) Invoice Validation report
b) Invoice on hold Report - This report gives details of all the invoices that are on hold in the
system. Pass the Parameters as shown in the Screen Shot below, give the period end date in the
To Entered Date field. Resolve the Holds in the period end so that no Invoices are carried
forward to the next period during the Year End Close. In the Month End Closing you can also
choose to Sweep the Invoices in the next period.
c) Sub ledger period close exception report
And
XML report publisher (Sub ledger period close exception report)
d) Period close exception report
e) Unaccounted transaction report
f) Update bills payable report
g) Bills payable maturity date report

Exception handling:
Unprocessed Create accounting
Final Transfer journal entries to GL - Program

Notes:

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
Based on the information from above reports, take necessary action on invoices. Approve the
Unvalidated Invoices, Account for the Unaccounted Invoices, Release Holds where ever the Invoices
are placed on Hold.
If payment batches are used, confirm all the Payment Batches.
Submit the Payables Accounting Process Program to account for transactions. All the transactions
needs to be accounted before transferred to General Ledger.
Run and Review the Standard report Unaccounted Transactions Report. Review any unaccounted
transactions and correct data as necessary. Then resubmit the Payables Accounting Process to
account for transactions corrected.
Unposted Payable Journal entries will be found in the GL and it will be posted into the General
ledger.
This will be queried in the Journal Entry form with source as “Payables” and posting status as
“Unposted”. These Journal entries will be reviewed and Posted into the GL. If Auto post is
scheduled for Payables Invoices, query for any unposted journals that are remaining after the
program runs. Review and post the remaining entries.
After running the “Payables Accounting Process Program” program, run ‘Create Mass Additions’
program from Account Payables responsibility. This program transfers all the account lines that are
marked as ‘Track as Asset’ and have corresponding Clearing Account set up in Fixed Assets. (You
cannot run this program before Payable Transfer to General Ledger program is run, as it considers
all lines to be interfaced to the Fixed Assets must be transferred to the General Ledger).

Reconcile AP to GL:
a) Internal reconciliation – With in AP
Reconcile with the General Ledger .The following standard reports from payables module can be
used for reconciliation.
Account Payables Trial Balance.
XML publisher report (Account Payables Trial Balance)
Posted Invoice Register.
Posted Payment register.

Formula = Previous closing balance + Posted invoice register – Posted payment register

Accounts payable trial balance- program:

To run this program we need to define “Report Definition” To fill in the parameters of program.
Report definition:
o AP: setup/Accounting setup/SLA setups/open account balance report definition
Here you need to assign the PAYABLE ACCOUNT which you wanted to be taken in the report.
Payable posted invoice register - program
Payable posted payment register - program

b) External reconciliation – AP with GL:

Go to GL responsibility

Run: Trial balance – Detail program

Parameters:
Page break segment: Company
Period type: YTD
Now check whether the amounts of AP formula and GL trial balance should be same.

If not, then run program Accounts analysis – 136 characters and then check manually whether any
journals has been entered manually which impacts the AP accounts.

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

Create manual
payment outside
Payables

Closing of AP periods
Module: AP Module.
Navigation: Accounting > Control Payables Periods.
1. Select the period to close. Select ‘Closed’ from list of values in the Period Status and save the record.
2. Select the Next period to open. Select ‘Open’ from list of values in the period status and save the
record.

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
Period Close Procedure in AR

Impoer the Complete

Invoices Reconcile Close the period
transactions

Import all invoices from OM to AR

Complete all transactions for the period being closed
Review the unapplied receipt register
Reconcile receipts to bank statement Activity for the period
Post to the GL
Review the sub-ledger period close exception report and unposted transaction report

The "AR Reconciliation Report" shows the summary amounts of various AR reports that are used to
reconcile AR. This report mainly has 3 parts
a) Period Beginning Balance
b) Period Activity in different Areas and their differences
c) Period Ending Balance

AR is reconciled when the

"Aging on the beginning of the Period" +
"The Total Activity in the Period" =
"Aging on the end of the Period"
AR Reconciliation Report
GL Date from 01-JAN-2012 to 31-JAN-2012

Sign Particulars Rs.

Beginning Balance as of 31-DEC-2011 10,000.00
+ Transaction Register 500.00
- Applied Receipts Register 2,500.00
- Unapplied Receipts Register 3,500.00
+ Adjustments Register 20
- Invoice Exceptions 0.00
+ Credit Memo Gain/Loss (*) 0.00
+ Rounding (*) 0.00
= Totals for the Period 4,520.00
= Ending Balance as of 31-JAN-2012 4,520.00

(*) These can occur only in the case of foreign currency transactions.

Oracle [Link] Standard Reconciliation can be done at the Operating Unit level alone.

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
 Run the AGING - 7 BUCKETS report as of the closing of previous month for taking the opening balance
for the current month.
 Run TRANSACTION REGISTER to identify the Invoices, Credit memos, Debit Memos and
Supplementary Invoice details.
 Run APPLIED RECEIPT REGISTER to identify the receipts which are adjusted against invoices/Debit
memo.
 Run UN APPLIED RECEIPT REGISTER to identify the receipts which are lying unapplied to any
invoice/Debit memo.
 Run ADJUSTMENT REGISTER to identify the small balance adjustments those were done on invoices.
 Run INVOICE EXCEPTION REPORT to adjust the Transaction Register for any transactions that are not
opens to Receivables and therefore do not show up on your Aging.
 Run the AGING - 7 BUCKETS report as of the current months closing for closing balance.

The Arithmetic process for reconciling Oracle Receivables

Open Aging
+ Transaction Register balance
+/- Adjustment Register balance
(-) Invoice Exception balance
(-) Unapplied Receipts balance
(-) Applied Receipts balance
Arithmetic total should be equal to Closing Aging.

Now compare the AGING - 7 BUCKETS – GL ACCOUNT with the TRIAL BALANCE to see if the
balance in the Sub Ledger as shown by the Aging report is the same as in the Trial Balance.

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
FA - Period close procedure

Complete Transactions
Completing all transactions for Oracle Assets:
 Prepare and Post Mass Additions
 Complete Manual Additions, Adjustments, Transfers, Retirements, and Reinstatements

Ensure that:
 All transactions have been entered for the period being closed
 Once a depreciation period in Oracle Assets has been closed, it cannot be re-opened
 All assets have been assigned to a distribution line. Otherwise, period end Depreciation Process will
not complete, and will not close the period.

Run Depreciation
 Run Depreciation process is performed independently for each asset book
When the process is run, Oracle Assets automatically calculates depreciation for all assets, calculates gains
and losses for all retirements, and then runs the appropriate Reserve Ledger Report.
Ensure to:
 Run Depreciation without closing the period
 Review Journal Entry Reserve Ledger Report for Cost, calculated depreciation expense, and
accumulated depreciation
 Make necessary activities
 Re-Run Depreciation without closing the period and review the Reserve Ledger Report again
 Run Depreciation with closing the period

Create, Transfer, and Post Journals

 Run Accounting after processing all postable records.
 The following approach may be applied After an asset addition:
 Run Create Accounting - Assets for the Addition Process Category to send Cost and Cost Clearing
lines to GL
 Run Depreciation without closing the period
 After depreciation runs, you can run the Create Accounting for the Depreciation Process Category to
get the Depreciation Expense and Reserve lines sent to GL
 If needed you can later update the asset and enter whatever transaction is needed. (For example:
cost adjustment). For this particular asset, the depreciation data is automatically rolled back
 And then run Create Accounting to send to GL the adjustment journal and the reversal journal for
Rollback Depreciation (in which the prior depreciation expense is credited and the reserve is
debited)
 Rerunning depreciation will then depreciate again this asset And Create Accounting will send to GL
new Depreciation lines

Reconciling Journals Transfer Process

 Sub ledger Accounting Program report:

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
o Is produced by Create Accounting program
o Shows sub ledger journal entries created for successful accounting events
 Journal Entries report (in Posted status mode): Includes all transactions that should be posted to
General Ledger (i.e. associated transaction type has Post to GL set to Yes) displays: Details of what is
or will be posted to each GL account for a specific period and Journals by receivables categories
 Ensure the following is correct “Sub ledger Accounting Program report total should equal Journal
Entries report total “

Reconciling Journals Import Process (GL)

 Journal Import Execution report: Is produced by (GL) journal import process
 Shows total debits and credits for the journals it created
 Posting Execution report: Is produced by (GL) journal posting journals process
 Unposted Journals report
 General Journals report
 Ensure the following is correct: total of these report should equal (what is transferred by Receivables
= what is posted by GL)

Note:
If we run DEPRECIATION in DRAFT mode, Journal entries will not be created. Until we run CREATE
ACCOUNTING program in ASSETS no journal entries will be created.

In draft mode, we can details in JOURNAL ENTRY RESERVE LEDGER REPORT.

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
CM Period Close procedure

Ensure the following before closing the Payables & Receivables.

 Any reconciliation transactions created by Cash Management are properly entered.
 Account balances are updated.
 Reports include accurate information.

Specifically the following steps are recommended.

1. Reconcile all your bank statements.
2. Transfer all transactions from Payables to your General Ledger interface tables.
3. Run Journal Import in General Ledger.
4. Post journals in General Ledger.
5. Run the GL Reconciliation Report from Cash Management for each bank account. This report
compares the statement balance you specify to the General Ledger ending balances.
6. Review the report for errors.
7. If there are errors in the report, correct them in Cash Management, as needed. Repeat the above
steps until there are no more errors.

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
Oracle General Ledger Real time Interview Question with Answer
Question Answer

What is MRC? Multiple reporting currencies are a set of unique feature which permits
an organization to report in multiple functional currencies.

What are the Responsibility Data group, Menu group, Request group
setups?
How to prepare FSG? Row set, Column set
What is a Roll up Group? It is to identify a group of parent values for reporting or other
application Purposes. It is used to create summary accounts for
reporting purposes.
What is Translation? Translation is the process which picks up the foreign currency
balances and converts them into functional currency balances (for a
particular period, SOB etc). So basically the translation process will
generate additional records in the GL_Balances table. It only operates
at the balances level and not on the transactions/journals level. It picks
up the periods rate defined for that period.(not the daily rates).

What is Revaluation? Revaluation is a process which is typically run periodically to account

for the loss/gain in the foreign currency. As an ex, if there is a
transaction is foreign currency and it could have gained some value
due to the economic differences. So revaluation process will take
notice of this and create the new journals which account for the net
loss/gain. So these journals will have to post again. Revaluation
process will not update the GL_Balances.

What is Cumulative translation It is to account the net difference needed to balance the translated
Adjustment Account? COA while doing the translation.

What is Recurring journal? A recurring journal is a journal entry that should be entered and
Types of Recurring journal? posted periodically. Each time the journal should have the same
accounts but the amounts could be different. To create a recurring
journal, you define a recurring journal template that you use to
generate almost automatically the journals periodically. Recurring
Journal templates can include fixed amounts or formulas to find
amounts based on balances of pre-determined accounts.
Types:- Regular, Skeleton, Formula

What is the difference in 3C in 11i whereas 4C in R12,SLA,MOAC

structure between R12 and 11i?

On what basis we create Ledger and legal entity

operating units?
What is org_id and Org_Id means OU Id and organisation_id means Inventory Org ID
organisation_id?

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
What is BR 100 and which stage It’s a document for all set up .Before User Manual it has to sign off.
we are preparing?
What is Flexfield? A Flexfield is a field made up of sub fields or segments.

What is KFF (Key Flexfield)? It builds unique entity identifiers (Data stored in the SEGMENT
fields.).Its mandatory Flexfield for arranging code of combination
which consists of 38 [Link]-3,AP-3,FA-3,AR-6,HR-7

What is Key Flexfield name in Accounting Key Flexfield

GL?
What is DFF (Descriptive To store the additional information (Data stored in ATTRIBUTES
Flexfield)? fields)
How to create DFF? Go to DFF query as based on application and create DFF.

Why Allow Dynamic Inserts? Allow dynamic option is to create new code combination and also
modify the code combination can be done otherwise not possible.

Use of Cross Validate Segments? controls the combinations of values you can create when you enter
values for key flex fields
What is segment? How many no. A segment is a single sub field within a flexfield. A segment is
of segments in Accounting represented in database as a single table column. Maximum 30
Flexfield? segment,14 Attribute in DFF

How many Flexfield structures In Oracle GL, We can create N no. Of Flexfield structures.
can you create for GL?
What is value set? It is a set of values
Why do we need value sets? You do not always want a user to enter junk free text into all the fields.
Hence, Oracle Apps uses value set to validate that correct data is being
entered in the fields in screen.

Is value set attached to all the No

fields that require validations?
Where lies the usage of value Value sets are attached to segments in Felxfileds. You can argue that
sets? value sets are also attached to parameters of concurrent program(but
in reality oracle treats parameters as Descriptive Felxfileds)

How many Different Security No security, Hierarchical, Non-Heirarchical

Type in value set?
What is the field in Creation of Name, Security type, maximum no,indepedent, list of values, Upper
Value set? case, Char

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
What are the format types and Format type:-Character, Date ,Date time, Standard date, standard
validation types available in datetime and Time
value set? Validation Type:-
Dependent,Indepedent,None,Pair,Special,table,Translatable
indepedent,Translatable dependent

What is Flexfield qualifiers? A Flexfield qualifier identifies a particular segment of a key Flexfield.

Types and Purpose of Flexfield Balancing segment,Natural Account,Cost

Qualifier? centre,management,Secondary tracking,Intercompany

What is the use of Management This would qualify a segment to be the management segment if that
Flexfield Qualifier? segment has management responsibility and you can facilitate setting
of Read, Write access permissions while defining Data access set in GL.

What is the use of Secondary This attribute is used to identify the secondary tracking segment to
Tracking Flexfield Qualifier? process income statement closing, translation and revaluation.

What is Segment qualifiers? A segment qualifier identifies a particular type of value in a single
segment of a key Flexfield
What are types of Segment For Company and cost center:-Allow posting ,Allow budgeting
Qualifier? For Natural Account:-Allow posting ,Allow budgeting,Account
Type,Third party Control Account,Reconcile

What are types of Account types Asset,Expense,Liability,Ownership/Stockholder Equity,Revenue

in Natural Account Segment
Qualifier?
How do you define parent Child In segment value enable the parent value, define the child range and
relationship for segment values? enter the low high ranges of child value.

What is Security Rule? It restricts the access of different segment values for different
responsibilities.
What is CVR (Cross validation CVR restricts particular code of combination at COA level.
rule)?
What are the period types? What A Unit of time ,such as one week ,two weeks or a month on which
are the period types provided in your accounting calender is based.
GL? Types:-Month,Year,Quarter,Half Yr,Half month,Week

What are period status in GL? Never Opened,Open,Closed,Permanently closed,future

What is an Accounting calender? It is to specify the no. Of periods in the year for the purpose of
transaction and maintaining accounting data.

How to Creating Calender? Name, Prefix month, type, year, Num, from, To, If adjustment then
click on Adjusting

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
What is transaction calendar? This calendar determines which days in a week are business days and
specifies other non business days such as holidays. Use:-It must be
assigned to PL for which average balancing is enabled to control
transaction posting.
What is monetary currency? It is currency which has a monetary value.
What is conversion type? A process that converts foreign currency transaction in to functional
currency. I.e. Corporate, reporting, spot, user

What is journal Source? It is an indicator by which GL identifies and Differentiates the origin of
journal entries which is mandatory to create a new journal.

What is journal Category? Journal categories specify what kind of transaction the Journal entry
represents. It determines the nature of journal entry Like purchase,
payable, receivable etc which is mandatory to create a journal.

How to create New Journal Set up, journal, category

Categories?
How to setup Journal Approval? In ledger tick on enable journal approval, then source enable journal
approval
How we can post subledger Go to ledger -sub ledger application then assign post in GL as yes for
entries to GL without any module wise.
concurrent?
How to Post all Journals in Run Program - Automatic Posting, Else go to setup-journal-Auto post
single stroke?
What is Ledger Sets? Ledgers sets allow you to group multiple ledgers together to achieve
processing efficiencies. For example, you can open or close periods for
multiple ledgers simultaneously; translation/Revaluation balances for
all ledgers in a ledger set, run recurring journals that update balances
for multiple ledgers, or run consolidated financial reports and FSG
report that summarize balances across multiple ledgers in a ledger set.
All ledgers in a ledger set must share the same chart of accounts and
accounting calendar/period type combination.

What is Data Access Sets? Data Access Sets enable you to specify read only or read and write
access for a legal entity, ledger, Balancing Segment Value or
Management segment Value.
How to define Document Sys admin, Application create and assign as automatic and manual
Sequence for Journals?
How to find Journals Entered Journal find screen, click more, dates created from ,to
today?
Reverse a Journal - Options Yes, At journal screen ,reverse tab else setup-journal-Auto reverse
available?
Can I correct sub ledger entries Yes, at journal import ,correct option
from GL?

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
Can I delete sub ledger entries? Run request Program - Delete Journal Import Data, parameter Source,
request ID, Ledger
3 Key reports in GL? Trial balance, Account Analysis report(180), FSG reports,

5 Tables relating to GL? GL_BUDGET

GL_BUDGET_types
GL_DAILY_RATES
GL_Consolidation
GL_Balances
What is mass allocation? A single journal entry formula that allocates revenues and expenses
across a group of cost centers , departments, divisions etc.
Steps:-[Link] value set for parent and child ,[Link] journal STAT
Category,[Link],[Link],[Link]
How many Account type? Asset, Liability, Expense, revenue, Owners Equity

What is security rule and Cross We are restricting the code combination at responsibility level for
validation rule? security rule and COA level for Cross validation rule.
What is drilldown in GL? We can see the original entry through this option at gl

What is COA? Chart of Account (COA) is one of the building blocks of Ledger. It is
an important as well as a mandatory step to setup a ledger. It is
important because the structure of COA determines the level or depth
of financial reporting. The Accounting Structure your organization
uses to record transaction and maintain account balances.
What are the pre requisite of Segment, Value set, Flexfield qualifier, Values, Segment Qualifier
COA?
How we will arrive Business Through segment created in COA.
structure and operating
structure?
What is Retain earning account? It will carry forward the last year balance to the current year.

What are the accounts mandatory Retain Earning Account, Suspense Account, Rounding off difference
to define in set of books? account, Reserve for encumbrance
What is Suspense Account? It is a balancing account which is used to post out of balance Journal
entries, GL automatically posts journal difference against summary
accounts. A suspense account is an account in the general ledger in
which amounts are temporarily recorded. The suspense account is
used because the proper account could not be determined at the time
that the transaction was recorded.
When the proper account is determined, the amount will be moved
from the suspense account to the proper account.
What is Encumbrance Account? With General Ledger you can record pre-expenditures commonly
Types? known as encumbrances. The primary purpose of tracking
encumbrances is to avoid overspending a budget. Encumbrances can
also be used to predict cash outflow and as a general planning tool.
Predefined Types:-[Link],[Link]

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
Can Contra entry passed for No
suspense and encumbrance
journal entry?
How can we create We can create either Automatic or manual.
encumbrance?
What is Budget? Types of It is used to have control over the amount spent against budget.
Budget? Types:-1. Account Wise [Link] entry source and category
What is SLA and how it AP->SLA->GL
function?
What are the pre requisite [Link] ledger update sub ledger accounting in default
required for SLA? [Link] methods builder-Event type .Event Class Mapping Sets
,Account Derivation Rules, Journal Line Definition, Application
Accounting Definition, Subledgers Accounting Methods, Assign the
custom SAM to Primary Ledger Accounting Setup, Create an invoice
for supplier type ‘Contractor’ and create accounting
In the case of modification of Modified Entry from SLA
entry, What account taking from
payable to GL?
SLA entry Whether it’s Yes if it’s in draft mode.
modifiable?
If drill down what account entry Original Entry
will be seen whether its
modified entry or original entry
made at SLA?
What is the pre requisite for a Period, currency, Category, Source
journal?
What are different types of Reverse journal, Tax journal, Suspense journal, Statistical journal,
journal? Recurring Journal, Foreign currency journal
What is journal import? A general ledger program that creates journal entries from transaction
data stored in the GL_INTERFACE table.
Steps:-GL->Journal->Import->Run
How to Validate a Journal Validation can do through [Link] level Validation,[Link] level
import? How to track errors validation,[Link] entry line level validation,[Link]
during import journal? validation,[Link] date validation,[Link] validation
Errors we can track through Batches, Accounts, reference, Journal
lines, DFF
Name few GL interface tables? GL_BUDGET_INTERFACE
GL_DAILY_RATES_INTERFACE
GL_IEA_INTERFACE
GL_INTERFACE
GL_INTERFACE_CONTROL
GL_INTERFACE_HISTORY

Oracle Payable Real time Question with Answer

Question Answer

What are the types of invoices? Standard, Debit memo, Credit memo, Prepayment, Retainage,
Withholding invoice, Expense Report

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
What is Prepayment and A prepayment is a type of invoice you enter to make an advance
Process? payment. We can adjust prepayment against standard invoice in future.
What are Types of Prepayment? Permanent -This is used for long term deposit. Ex:-Fixed deposit, Term
deposit. Temporary-which is used for short term advance. Ex:-Advance
to supplier
What is the use of permanent Ex: Term deposit for long term
prepayment and Accounting Advance to supplier Dr 100
entry? To Supplier Cr 100
Batch payment process It’s a 11i bulk payment for multiple supplier
Standard concurrent program in Create Accounting, period close exception report, India-Creditor ledger
AP
Difference between invoice and It’s either, or relation. We have to activate profile option batch% as
invoice batch and what setup yes. It will disable the new button at find screen at invoice.
required?
Can we change invoice if we Yes we can change if it’s not accounted and if the amount exceeding the
made the payment? previous amount otherwise can’t change.

What are the criteria for entering Supplier, Supplier site, payment term, payment method, distribution
a standard invoice? account
What are the modules interfaced Purchasing, GL
through AP module?

What is the work of payment We can make payment supplier category wise and for multiple supplier
manager? payment in a one struck.
Can we sweep invoice which is No, We have hold and release that then we can close the period.
in hold position?
What do you mean of retention It means holding some part of payment for a contract suppler. Retain
in AP? value will be release at the end of the contract. We can make through
Retain age invoice.

What are the encumbrance PO encumbrance and requisition encumbrance available in Financial
options for AP? How are they options.
used? Encumbrance used to reserve the funds at the time of raising PR or PO.
What are the different types of Purchasing, Pay, Primary pay, RFQ only, Procurement card
supplier site?
How can we default supplier site Enable primary pay check box in supplier site for that particular site.
at invoice level?
What is the use of Withholding Income tax returns purpose we use it.
invoice and which scenario?
What is the entry for AP invoice? Expenses Ac Dr 100
To Supplier Ac Cr 100
What is recurring invoice? What Repeatedly incurring invoice for expenses that occurs regularly.
is the scenario we are using this? Example: Rent for every month and lease payment

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
What are the methods of Accrual and Cash method
accounting?
What is special calendar & why Use the Special Calendar window to define periods that Payables uses
it’s required? for automatic withholding tax, recurring invoices, payment terms, and
for the Key Indicators Report. For example, if you monitor staff
productivity weekly, use this window to define weekly periods for the
Key Indicators calendar type.
What types of Distribution Set Use Full Distribution Sets to create distributions with set percentage
and what’s the use of skeleton amounts or Skeleton Distribution Sets to create distributions with no set
DS? distribution amounts. For example, a Full Distribution Set for a rent
invoice assigns 70% of the invoice amount to the Sales facility expense
account and 30% to the Administration facility expense account.

A Skeleton Distribution Set for the same invoice would create one
distribution for the Sales facility expense account and one distribution
for the Administration facility expense account, leaving the amounts
zero. You could then enter amounts during invoice entry depending on
variables such as that month's headcount for each group.
What is EB Tax and set up? How 1. Define party tax profiles 2. Define regime 3. Create Tax 4. Create tax
it’s linking to the AP and AR Status [Link] tax rate [Link] tax configuration options
module?
How to create tax rates? Create tax in EB tax
Withholding tax and utilization It’s like TDS concept in India.
What is the use of Offset Three types i.e. None, Balance, Account
Account method If we selecting None then Supplier account will be same for all OU ,If
we selecting Balancing then supplier account will segregate for OU
wise , if we select Account then its segregate All Code combination as
based on real distribution account we have entered for OU wise.
How many types of payment 5 type’s i.e. Bills payable, Check, Electronic, Outsourced Check, Wire
method.
What is pay group? It is to group invoices in to supplier category for payments.
What is prepayment settlement Number of days you want Payables to add to the system date to
date in payable option? calculate a default settlement date for a prepayment. Payables prevents
you from applying the prepayment to an invoice until on or after the
settlement date.
What is GL date basis in payable The date you want Payables to use as the default accounting date for
option? invoices during invoice entry.
Invoice Date-Invoice date you enter during invoice entry.
System Date-Current date for your Payables system. The date you
enter the invoice.
Goods Received/Invoice Date-Date that you enter in the Date Goods
Received field. If no value is entered, then the invoice date is used.
Goods Received/System Date-Date that you enter in the Date Goods
Received field. If no value is entered, then the system date is used.

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
What is difference between debit Debit Memo: A negative change in invoiced amount identified by
memo and credit memo? customer and sent to supplier. Ex. Purchase return
Credit Memo: A negative change in invoiced amount identified by
supplier and sent to customer. Ex: TDS payable
What is meant by with-holding After you apply withholding tax to an invoice, you can optionally
tax invoice? create invoices to remit withheld tax to the tax authority.
What are the mandatory setups Financial option, Payable option, System setup option, Create payment
in AP? term, Create payment administrator, Creation of supplier, Open
payable period, Open GL period, Open Inventory period, Open
Purchase period,
Can we make foreign currency Yes, but in payable option we have to enable use multiple currency and
invoice and payment? in bank, enable multi currency payments

Purpose of Payable invoice open It can use the Payables Open Interface Import program to create
interface? Payables invoices from invoice data in the Payables Open Interface
Tables
Payable open interface import? Use Payables Open Interface Import to import invoices from the
Payables Open Interface Tables.

What is a Multi Currency Multi currency is possible but we have to set up at the time of Bank
payment? Creation.
Can we implement MRC at Yes
Payables?
What does the Unaccounted It will sweep the transaction to next period.
Transaction Sweep Report do?

What reports should I run before Period close exception report, Unposted transaction
closing the period?
What is meant by void payments? When you void a payment, Payables automatically reverses the
accounting and payment records so your general ledger will have the
correct information, and so the status of the paid invoices is reset to
Unpaid. Payables also reverses any realized gains or losses on foreign
currency invoices recorded as paid by the payment
What are the types of journal Payable
categories available in the AP?

What is meant by matching and 2 way-Invoice and PO, 3 way-Invoice, PO and Receipt and 4 way-
what are the types of matching’s Invoice, PO, Receipt and Inspection
available?
What is a Hold and Release? Hold means restriction in invoice for further processing. User can
Types of hold? define any kind of holds to hold the invoice for further processing.
Type:-Manual and System hold

How to approve ‘n’ no. of You can be Approved n number of invoices using the Request "Invoice
invoices? Validation"
What is Zero-Payment in AP? Create zero-amount payments to pay basic invoices with offsetting
credit or debit memos, or to record cancelled invoices as paid so they
are no longer included on the Invoice Aging Report. Before you make
a zero-amount payment, you must enable the Allow Zero-Amount

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
Payments option for the bank account you will use to create the
payment.
What is Proxima Payment Cut off day
Terms?
What are the tables associated AP_INVOICES
with Invoice?
Which interface tables are used RA_INVOICE_INTERFACE_ALL
for Invoice Import?
What is Interest Invoice and how Payables automatically create invoices to pay interest for overdue
it can be created? invoices if you enable automatic interest calculation for a supplier, and
you pay an overdue invoice for the supplier in a payment batch or
with a Quick payment. The new interest invoices are ready for
Approval and payment.
How many key flex fields are No
there in Payables?
Can you cancel the invoice? If Yes, but before create accounting
yes, explain?
What is pay date basis? Due, Discount, None
What is terms date basis? From which date the payment term will be calculated.
Types:- System, Goods Received, Invoice, Invoice Received, Null
What is the report used to "Supplier Audit Report" can be used to help identify potential duplicate
identify duplicate suppliers? suppliers.
What is meant by accrual write If you choose the Perpetual Accrual Method within Purchasing,
off? Purchasing records an accounts payable liability to an AP accrual
account for goods received but not invoiced. When Payables matches
and approves the invoice for the received goods, Payables clears the
accounts payable accrual account and records the actual liability
amount to the invoice accounts payable liability account. After you
have entered your receipt transactions and matched and approved
your invoices, you can run the Accrual Reconciliation Report to
identify any differences between your Purchasing receipts and
Payables invoices.
Use of Future dated payments? You can use future dated payments to control the timing of your
payments, and therefore control your cash flow. A future dated
payment instructs your bank to disburse funds to your supplier's
bank on a specific date (the maturity date)
What are the period statuses in Never opened, Future, Open, Closed, Permanently closed
AP?
What is meant by third party Payments are generally made to the supplier providing the goods or
payments? services, however sometimes there is requirement when supplier ask
you to made payments to different party on supplier’s [Link] the
payments made to other parties on behalf of the supplier is termed as
Third Party Payments.

How to transfer funds between Fund transfer

your internal banks?
Can I find out which invoices are Yes
matched to a PO?

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
ERS Invoice means? Evaluated Receipt settlement, Which makes auto invoice in payable.

What is meant by RTS Return to supplier which has to assign at the time of creating supplier.
transactions?
What are the steps to define a 1. User management-Role-Security wizard through Sys Admin [Link]
Bank? branch 3. Bank Account [Link] Document assignment
How to assign Cash clearing While doing bank creation, we have to give cash clearing account.
Account

Q. What Are The Tables That Replaced AP_BANK_ACCOUNTS_ALL, AP_BANK_ACCOUNT_USES_ALL

and AP_CHECK_STOCKS_ALL ?
A. Now Bank functionality moved to Cash Management.
Following tables on the left are replaced with the tables on the right
AP_BANK_ACCOUNTS_ALL => CE_BANK_ACCOUNTS
AP_BANK_ACCOUNT_USES_ALL => CE_BANK_ACCT_USES_ALL
AP_CHECK_STOCKS_ALL => CE_PAYMENT_DOCUMENTS

OAF Real Time Interview Question with Answer for O2C Flow
Question Answer
What are the issues for not 1. The document sequencing feature is enabled, but no 'Automatic' document
routing Auto invoice Master sequence exists within Oracle Receivables for this document category and
Program? date.
[Link] sales credit type name (SALES_CREDIT_TYPE_NAME)
[Link] salesrep number (SALESREP_NUMBER)
[Link] bill to customer reference
(ORIG_SYSTEM_BILL_CUSTOMER_REF)
[Link] transaction type name (CUST_TRX_TYPE_NAME)
[Link] Bill To address reference must exist in Oracle Receivables, and it must
be assigned to the Bill To customer You must supply
[Link] terms for your non-credit transaction
[Link] Bill To address id must exist in Oracle Receivables, and it must be
assigned to the Bill To customer
[Link] supply both an invoicing rule and an accounting rule for this
invoice.
10. You must supply an invoice number when your batch source indicates
manual invoice numbering; otherwise you must leave invoice number blank
[Link] Warehouse ID (WAREHOUSE_ID)
[Link] to derive a gl date for your transaction. Please ensure that your
transaction is in a gl period which you have defined
[Link] total amount of your credit memo cannot exceed the balance of the
debit item it is crediting
[Link] can not apply more than the original line amount
[Link] cannot apply a transaction with a negative amount to another
transaction with a negative balance and vice versa.

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
What are the Major tables in RA_CUSTOMER_TRX_ALL ,
AR? RA_CUSTOMER_TRX_LINES_ALL,
RA_CUST_TRX_LINE_GL_DIST_ALL ,
AR_PAYMENT_SCHEDULES_ALL

What is mean by Transaction source-Automatic or manual, It provides transaction and batch

Transaction Source & Auto numbering
Receipt Source? Receipt Source-Automatic or Manual, Provides auto numbering through
receipt class
What is Auto accounting? The Accounts in receivables picked from auto accounting. It will decide from
where the account has to pick whether From customer site, Transaction type,
Memo line or Salesperson.
When exactly revenue is When you ship confirm one or more order lines in Oracle Order
recognized at O2C flow? Management and then run the applicable Cost Management cost and
accounting processes, the cost of goods sold associated with the sales order
line is immediately debited to a Deferred COGS account pending the
invoicing and recognition of the sales order revenue in Oracle Receivables.
When Oracle Receivables recognizes all or part of the sales revenue
associated with a sales order line, you run a cost process that calculates the
percentage of total billed revenue recognized. Oracle Inventory then creates
a cost recognition transaction that adjusts the Deferred COGS and regular
COGS amount for the order line. The proportion of total shipment cost that is
recognized as COGS will always match the proportion of total billable
quantity that is recognized as revenue.
Cuncurrent we have to run for revenue recognition:-Record Order
Management Transactions, Collect Revenue Recognition Information,
Generate COGS Recognition Events
How revenue recognition While we are defining Order transaction type->Finance Tab we have to
linked AR to Order assign Accounting rule and Invoicing rule
management?
What is the Entry in O2C? Receivable Ac Dr Cash / Bank Ac Dr
To Revenue Ac Cr To Receivables Ac Cr
What are Deferred COGS The value of goods shipped from inventory will be put in a Deferred
and COGS? COGS account. As percentages of Revenue are recognized, a matching
percentage of the value of goods shipped from inventory will be moved
from the Deferred COGS account to the COGS account

What is Aging Bucket? Ageing report for debtor whether 4 bucket,7 bucket
AR Transaction Type? Invoice, Debit Memo, Credit Memo, Deposit, Bills receivable, Chargeback,
Guarantee
What are the checkbox Allow open receivable, Post to GL, Allow over application, default tax
available in Transaction classification, Allow freight
Type?
Scenario which affect the Discount / offer / Sample
customer balance not to GL?
What are the receivable Earned/Unearned discount, Refund, TDS receivable
activities?

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
What is Auto lockbox? Lockbox is a tool service offered by banks to companies in which the
company receives payments from their customers. The Bank informs the
company of all the payments received normally sends a Flat file which has
all the information of customer payments.
Auto lockbox Setups? Internal Bank AC in Receivable, Receipt Clause, Receipt Method, Receipt
source, Lockbox (Lockbox number), Lockbox Transmission format,
Auto cash rule
How Auto lockbox Its functions through the auto cash rule that post program to apply the
functions in Oracle? receipt account to customer account open items. In transition format
importing the data from lock box file to receivable through control file in to
the interface.
What are the events for Incomplete, Unaccounted, Not posted to GL
close the AR period?
What is AP & AR netting? Net for payable and receivable transaction for a same supplier and customer
Can we sweep AR No, Sweep option is not available in AR ,It’s at AP level
incomplete transaction to
close the period?
Can U Merge the Yes we can merge.
Customers?
What is Accounting Rules? Determines the period in which the revenue is to be recognized. We can
create Fixed and Variable.
What is Invoicing Rules? Determines when to bill the customers in relation to Accounting Rule period.
Two types are Billing in Advance and Billing in Arrears.
Can we apply accounting NO
rule without opening AR
and GL period?
Accounting for Billing Receivables Ac Dr xx 1000
Billing in Arrears To Unbilled Receivables xx 750 (Invoice rule – in Arrear)
To Revenue xx 250 (Accounting Rule-4 Monthly)
Accounting for Billing in Receivables Ac Dr xx 1000
Advance To Unearned Revenue xx 750 (Invoice rule – in advance)
To Revenue xx 250 (Accounting Rule-4 Monthly)
What is Deferred Revenue Deferred Revenue is Unearned Revenue actually a liability for the company.
or Unearned Revenue? (The company is liable to provide the goods or services for which cash is
received or will be received in advance). As and when the goods or services
are delivered, the Deferred Revenue is reduced (debited) and revenue is
recognized.
What is the use of System It will allow us to delete the transaction at any point of time.
Options - Allow Invoice
Deletion?
What is the use of System To allow receipt applications to debit items of unrelated customers, check the
Options - Allow Payment of Allow Payment of Unrelated Invoices check box. If you check this check box,
Unrelated Transactions? Receivables lets you select debit items for unrelated customers and apply
your receipts to them in the Applications window. AP/AR Netting is
possible for this.

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
What is the use of System To allow changes to be made to transactions that have already been printed,
Options - Allow change to check the Allow Change to Printed Transactions check box. This option also
printed Transactions? determines whether you can update a customer's address when printed,
posted, or applied transactions are assigned to that address.

What is the use of System To automatically create a reciprocal relationship between two customers
Options - Create Reciprocal when you are defining customer relationships, check the Create Reciprocal
Customers? Customer check box. A reciprocal relationship is one in which related
customers can apply payments to each other’s invoices.

What is the use of System To purge the Auto Invoice Interface tables, check the Purge Interface Tables
Options – Purge Interface check box. If you check this check box, Receivables only deletes the records
tables? that have successfully transferred into permanent Receivables tables. If you
check this check box, you will not have to run the Auto Invoice Purge
program after running Auto Invoice
Grouping Rule.--system Enter the default Grouping Rule Name you want Auto Invoice to use. Auto
option we have to attach Invoice uses grouping rules to group revenue and credit transactions into
mandatorily, why? invoices, debit memos, and credit memos.
What is the use of Line We will attach this to grouping rule
ordering Rule?
What is the use of Realized At the time currency fluctuation, the difference amount will impact this
Gain / loss - get impacted? account
Overdue Interest - create one Late charge
invoice
How Cancelling an Invoice? Remove at transaction type -open receivable and post to GL
on account Unapplied and on account is same but if we will do on-account ,it will hit the
customer balance.
Unapplied Pending amount not applied to receipt
Unidentified No customer
How to Cancel Receipt. Its not possible to cancel receipt, we have reverse the receipt.
Chargeback: What is the We can extend the due date for customer payment.
actual due date and entry? At Transaction
Receivables (Invoice) Dr 100
Revenue Ac Cr 100
At Receipt Apply Chargeback
Cash Ac Dr 50 Receivables (Chargeback) Dr 50
Receivables (Invoice) Cr 50 Receivables (Invoice) Cr 50
Knock up Entry When chargeback receive
Chargeback Dr 50 Cash Ac Dr 50
Receivables (Chargeback) Cr 50 Chargeback Cr 50
What is mean by Write-off When you enter a receipt and combine it with a positive adjustment, Any
and entry? excess nominal amount at the time of receipt we will write off.
Receivable Ac Dr 100
To Write off Ac Cr 100

Adjustments - Approval User wise we have to assign for approval limit for receipt write off,
Limits - Process adjustment, credit memo,
Credit Note - RMA - We will tick the Allow over application at transaction type, It will create
Approval Process automatically credit memo to the invoice already made.

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
What is Earned Discount and Receivable activity,-Earned discount is one taken inside the discount
Entry? period.
Earned/Unearned Discount Dr 100
To Receivable Ac Cr 100
What is Un earned Discount Receivable activity, An unearned discount is one taken after the discount
and entry? period passes. You cannot choose this option if the system option
Unearned Discounts is set to No.
Earned/Unearned Discount Dr 100
To Receivable Ac Cr 100
Where should the customers Remit to address
send the payments of
Invoices?. Where the setups
to be done.
What is the Transaction Credit Transactions: Invoice: Debit Memo: Charge back: Guarantee: Deposit
Type? What is the different
transaction Type? What is
the impact if Customer
address is not falling in the
range defined in setup?
How can i reduce the Invoice We will raise the credit memo
amount?
What are the Accounts to be Revenue, Receivables, Freight, Tax, Clearing, Unearned, Unbilled
use in Transaction Types?
How can i Assign a Deposit In transaction form ,we will apply deposit in action tab
amount to an Invoice?
Whether multiple deposit
can be adjusted in single
invoice.
What is the Guarantee? It is agreement between both sides for goods or services in the future ,
specific range of periods
Consolidated Billing Cycle - Its for 11i which has changed to BFB in R12.
PROXIMA Payment terms.
What is Balance forward 1. A balance forward bill includes all of a customer's transactions for the
Billing? billing period and any balance carried forward from the previous billing
period.
2. A balance forward bill can have a daily, weekly, or monthly billing period
depending on the balance forward billing cycle assigned to the payment
term.

What is Proxima payment This was in 11i which has abolished from R12 where we are giving the cut off
term? day for the payment term.
Statement of Define statement cycles to determine when to send statements to your
Account. Generate a customers. You enter statement cycles when you define or modify individual
customer statement report customer and site profile classes in the Customer Profile Classes window
Dunning - generate a Use dunning letters to inform your customers of past due invoices, debit
dunning letter for a memos, and chargebacks. When you print your dunning letters, Receivables
customer. prints a copy of each invoice which has line items that are past due.
Application Rule set Line after tax

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
Receipt Application Automatic and manual
methods
Whether Batch Invoices in Yes
AR possible?
Whether Batch Receipt in Yes
AR possible?
Can we Copy INVOICES in Yes, Its new function in [Link] to transaction-> copy invoice
AR?
How to refund for a In receipt form, click on Refund attribute and provide the payment method
customer who returns goods and save
and wants a refund for $600
in R12 In above scenarios
customer does not want
Credit Memo or On-
Account Credit, he wants
refund check. and as we
know we do not issue check
from AR. How can we issue
Check from AP and how
offsetting is done for the
same in R12?
What are the setups required Receipt Source-Automatic and Receipt Class-Automatic
for Automatic Receipts?

Can we create manual Anything Either Manual or Automatic we can create.

Customer Number -
options?
Custom Object creation - Customer wise TDS report, Debtor ageing report
MD50 / 70
how to assign a tax to a Attach tax category in Item Category then attach item category in Supplier
specific vendor ?not tax additional information
category
Back Orders stock does not exist @ sellers warehouse

Drop Shipment • A orders item x from B

• B orders item x from C
• C ships Item x to A.
• B bills A for the order, C bills B for the order
Back to Back Orders In Back to Back order the shipment process is also completed through OM
as a standard order after the item is received against a PO.
What is the major difference • In B2B the source will be internal but the item would be procured after the
between drop shipment and order is created or after the demand is made.
back to back order? • In Drop Ship the source will be external
• In Drop Ship orders, material is directly shipped to the customer from the
supplier. Thus, inventory is not affected. In this case, only logical receiving is
done. But in the case of Back-to-Back orders, material is taken from
inventory.
• Drop Ship orders may have many Purchase Orders connected to them. In

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
Back-to-Back orders one PO is tied to one Sales Order

Configurator It will create * item for all sum item created at BOM for that particular FG.

Modifier Used for discount, surcharge etc.

Qualifier Used for modifier ,its customer wise
What flow of O2C? Create Order ,Book the order, Do lunch Pick release, Transact move order,
Ship confirm, Run Workflow background process, Auto invoice master
program, Transaction, Receipt
What are the pre-requisites Transaction type, Transaction source, Order type
of O2C flow? major set ups

How we are linking from In order type ,finance tab give the AR transaction type and source
order management to AR
What are transaction type in Invoice, BR, DM, CM, Guarantee, Deposit
AR?
What is set up for Bills Transaction type, Customer as a drawee
receivable ?
What is refund process and Receivable activity, Receipt -payment attribute
set ups required?
How Refund linking to AP Through Payment method
module?
Whether customer as a No
supplier we have to set up
in case of refund process?
Which source is taking to Credit memo source
payable invoice from AR?
What is the entry for AR Receivable to revenue
invoice
What is credit profile and To restrict the user to over application amount at SO order level
how its function?
Whether credit profile at Order level credit check uses the credit profile attached to the customer
order management level or Bill-to site
AR invoice level?
How credit profile used defined at order (header) level. Credit checking will use order totals.
customer Account level and
Site level and whats the pre
requisite?
What is major changes in MOAC,SLA,AP/AR Netting, Deferred COGS, Chargeback, Refund process,
AR in R12? Legal Entity, BFB, day wise revenue recognition

What is document To reduce manual work and make user friendly. Each document will get
sequence? serial numbered.
How We Define document In Sys Admin->Application based on transaction type wise
sequence for AR?

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
How many types of receipt? Automatic Receipt and Manual receipt

What is Unapplied Receipt Whenever the receipt is not applied to transaction it will be in Unapplied
and Entry? Status.
Cash A/C Dr 100
To Unapplied Receipt Ac Cr 100
What is Unidentified Whenever the receipt without customer applied to transaction it will be in
Receipt and Entry? Unidentified Status.
Cash A/C Dr 100
To Unidentified Receipt Ac Cr 100
What is On account Receipt Whenever the receipt is fully applied to transaction it will be in On account
and Entry? Status.
Cash A/C Dr 100
To On-account Receipt Ac Cr 100

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
Accounting Entries
Topic Journal Entries Dr Cr

P2P Purchase Requisition

Charge/Expenses Account xxxxx
Accrual Account xxxxx
Purchase Order
Charge/Expenses Account xxxxx
Accrual Account xxxxx
Receiving
Accrual Account xxxxx
Receiving Inventory Account xxxxxx
standard invoice
Expense/Charge Account xxxxx
AP liability Account xxxxxx
making a payment
AP liability Account xxxxx
Cash Clearing Account xxxxxx
Reconciling the payment
Cash Clearing Account xxxxx
Cash Account xxxxxx
Prepayment Invoice
Prepayment Account xxxxx
AP Liability account xxxxxx
Making the Advance payment
AP Liability account xxxxx
Bank/Cash account xxxxxx
applying the prepayment
AP Liability xxxxx
Prepayment account xxxxxx
Debit / Credit memo
AP Liability a/c xxxxxx
Expense Account xxxxxx
Exchange rate gain on foreign currency payment
AP Liability a/c xxxxxx
Bank a/c xxxxxx
Realised gain a/c xxxxxx
Exchange rate Loss on foreign currency payment
AP Liability a/c xxxxxx
Realized Loss a/c xxxxxx
Bank a/c xxxxxx
Discount received
AP Liability a/c xxxxxx

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
Bank a/c xxxxxx
Discount taken a/c xxxxxx
Future date payment
1)At the time of issue of payment
Accounts Payables xxxxxx
Future dated account xxxxxx
2)At the time when the Cheque gets matured
Future dated account xxxxxx
Cash Clearing Account xxxxxx
3)On reconciling the payment in Cash Management
Cash clearing a/c xxxxxx
Bank Account xxxxxx

O2C Invoice Entry

Accounts Receivable xxxxxx
Revenue Account xxxxxx
Tax Account xxxxxx
Payment from the Customer thru Bank Transfer
Bank Account – Remittance xxxxxx
Accounts Receivable xxxxxx
Same payment is cleared in the Cash Management
Bank Account xxxxxx
Bank Account – Remittance xxxxxx
Payment from the Customer thru Cash
Cash in Hand xxxxxx
Accounts Receivable xxxxxx
When you deposit the same in Bank
Bank Account xxxxxx
Cash in Hand Account (Pass Manual JV in GL) xxxxxx
When you receive payment from the Customer thru
Cheque
Bank Account xxxxxx
Accounts Receivable xxxxxx
When the cheque has been deposited in Bank
Bank Account – Remittance xxxxxx
Bank Account xxxxxx
When the same Cheque is cleared in the Cash
Management
Bank Account xxxxxx
Bank Account – Remittance xxxxxx
When the receipt is prepared without identifying the
Customer
Bank Account xxxxxx
Unidentified Receipts

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
When the Receipt is prepared but Invoice not yet
identified
Bank Account xxxxxx
Unidentified Receipts xxxxxx
Unidentified Receipts xxxxxx
Unapplied Receipts xxxxxx
When the receipt is prepared by applying to an Invoice
Bank Account xxxxxx
Unapplied Receipts xxxxxx
Unidentified Receipts xxxxxx
Unidentified Receipts xxxxxx
Unapplied Receipts xxxxxx
Accounts Receivables
Receivables interfacing
Customer Account XXXXX
Income XXXXX
Invoicing in Advance
Bank/Cash Account XXXXX
Accounts Receivables XXXXX
Revenue is Recognised
Accounts Receivables XXXXX
Income from so & so XXXXX

FA while adding assets thru Mass Addition from AP

Asset Clearing Account xxxxxx
Accounts Payable xxxxxx
Assets during detailed or quick addition
Asset Cost xxxxx
Asset clearing account xxxxxx
charging depreciation
Depreciation Expense xxxxx
Accumulated Depreciation xxxxxx
Asset Transfers
1)The journal entry for accounting the asset cost is
Asset Cost (002) xxxxxx
Asset Cost (001) xxxxxx
2)The journal entry for accounting the accumulated
depreciation is
Accumulated Depreciation (001) xxxxxx
Accumulated Depreciation (002) xxxxxx
Asset Revaluation
Asset xxxxx
Accumulated Depreciation xxxxxx
Revaluation Reserve xxxxxx

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials
writing off the revaluation reserve
Revaluation Reserve xxxxxx
Revaluation Amortization xxxxxx
Asset Retirements
Accumulated Depreciation xxxxx
Proceeds of sale xxxxxx
Asset Cost xxxxxx
Gain / Loss xxxxxx

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Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

Interface Tables Base Tables

GL_INTERFACE GL_JE_BATCHES
GL_BUDGET_INTERFACE GL_JE_LINES
GL_JE_HEADERES
GL_JE_SOURCES
GL
GL_JE_CATEGORIES
GL_DAILY_RATES
GL_BALANCES
GL_PERIODS
GL_CODE_COMBINATIONS
Interface Tables Base Tables
AP_INVOICE_INTERFACE AP_INVOICE_ALL
AP
AP_INVOICE_LINES_INTERFACE AP_INVOICE_DISTRIBUTIONS_ALL
AP_PAYMENTS_SCHEDULES_ALL
Interface Tables Base Tables
PO SUPPLIERS PO_VENDORS
PO_VENDOR_SITES_ALL
Interface Tables Base Tables
PO PO_REQUISTITION_INTERFACE_ALL PO_REQUI_HEADERS_ALL
REQUISTITIONS PO_REQ_DIST_INTERFACE_ALL PO_REQUI_LINES_ALL
PO_REQUI_DISTRIBUTIONS_ALL
Interface Tables Base Tables
PURCHASE PO_HEADERS_INTERFACE PO_HEARDERS_ALL
ORDERS PO_LINES_INTERFACE PO_LINES_ALL
PO_DISTRIBUTIONS_INTERFACE PO_DISTRIBUTIONS_ALL
Interface Tables Base Tables
FA_INV_INTERFACE FA_ADDITIONS
FA_PRODUCTION_INTERFACE FA_BOOKS
FA
FA_MASS_ADDITIONS FA_DEPM_SUMMARY
FA_DEPM_HISTORY
FA_RETIREMENTS
Interface Tables Base Tables
RA_CUSTOMER_INTERFACE_ALL HZ_PARTIES
AR CUSTOMERS HZ_CUST_ACCOUNTS
HZ_CUSTOMER_PROFILES
HZ_LOCATIONS
Interface Tables Base Tables
RA_INTERFACE_LINES_ALL RA_CUSTOMER_TRANS_ALL
AR INVOICE RA_INTERFACE_DISTRIBUTIONS_ALL RA_CUSTOMER_TRANS_LINES_ALL
RA_CUSTOMETR_TRANS_TYPES_ALL
RA_TERMS

RAJU CHINTHAPATLA
Oracle R12 Financials (GL, AP, AR, CE, FA, MOAC and EB Tax) Training Manual Financials

RAJU CHINTHAPATLA