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General Ledger
It is the Central repository for all the accounting transactions. It is a reporting entity in
which we record day to day transaction of an organization. It consists of 4 C’s. they are
1. Currency
2. Calendar
3. Chart of accounts.
4. Convention Method.
Along with 6 mandatory accounts.
1. Retained Earnings (Ownership a/c)
2. Suspense ( Expense A/c)
3. Cumulative translation adjustment (Ownership a/c)
4. Net income (Ownership A/c)
5. Reserve for encumbrance (Ownership A/c)
6. Rounding difference ( Expense A/c)

Chart of Accountants: It determines the accounting Flex field structure and segment Values.

Calendar
It is used to identify the dates of the accounting transaction
1. Accounting calendar: There are two types of years. There are calendar year and Fiscal
year.
2. Transaction calendar: It is used for average balance concept to identify the working days
and non working day of an organization

Convention Method
It determines which accounting method we are using in oracle to generate accounting for
transaction. There are two types of methods.
➢ Accrual: In this method journal entities will be created by application for each and every
transaction irrespective of cash.
➢ Cash Method: In this method journals will be created by application when cash is taking
place.

Accounting Structure
It is the representation of the organization structure and the dimension of the business. It is
the collection of segments and collections of code combinations.
Flexfield: These are used to capture the information of an organization. Flexfield have flexible
structure for storing key information like cost center & Accounts.
There are two types FF in oracle finanacials.
1. Key FF.
2. Descriptive FF.
Key FlexFields: They are unique identifier for storing key information used for entering and
displaying key information which is related to your business. it is mandatory one, it capture the
information of your organization about your organization like cost center, Account etc.
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Keyflexfield are 3 types

1) Accounting Flexfield
2) GL Ledger Flexfield
3) Reporting Attributes Flexfield.
Keyflexfield has two types of qualifiers, they are segment qualifier and flexfield qualifier.
Flexfield qualifier: it is used to identify what type of segment it is. There are 6 types of flexfield
qualifiers.
1) Balancing segment qualifier
2) Natural account segment qualifier
3) Cost centre
4) Inter company
5) Secondary Tracking
6) Management segment qualifier
Balancing Segment: It means all the accounting transactions of all debit and credit balances
should be match always at a particular level. i.e at company level.
Natural account segment Qualifier: This segment determines whether an account is assest,
liability, Ownership equity, revenue and Expenses.
Cost Center: If you use you other modules such as oracle assets and oracle projects you must
assign this segment. If indicates the functional area of your organization such as accounting,
facilities,…etc..It will help to calculate depreciation.
Secondary Tracking: If we want to report from other levels other than company level. Then we
can use of secondary tracking flexfield qualifier.
Management segment qualifier: this is one for security purpose. It controls the values. We can’t
assign this segment qualifier to company and accounts.
Segment Qualifier: this is used to identify the segment values. There are five types
1) Allow budgeting
2) Allow posting
3) Control account
4) Reconciliation flag
5) Account type.
Descriptive Flexfields: Where as descriptive flexfields are the optional one. It captures additional
information about your organization like name of the company M.D etc. Where Descriptive FF has
“Context” (optional one). Key flexfield did not give any “Expansion Space” where as descriptive
FF will provide the “Additional Space” to flex field.

Manual Journal
Entering Journal manually in the oracle application is called as manual journal creation.
These can be entered in two ways.
1. Single Journal/ Individual Journal.
2. Journal Batch.
Balance Types: There are 3 types of balances.
1. Actual
2. Budget
3. Encumbrance.
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Journal Reversal
It means cancelling of journal. There are two types.
1. Switch Dr/Cr: It means appilication will create new reversal journal entity with opposite
lines of original journal entity.
2. Change Sign: In this method application will create new reversal journal entity with
negative amounts by running “Journal: override reversal method” program.

Journal Source
It is used to identify the origin of your journal entry transaction. Ie where it is coming
from. It is used when inter Company, suspense accounts, mass allocation and consolidation and also
when you import journals from your sub ledgers like AP, PO, AR, CM and FA.

Journal Categories
It is used to identify the purpose and nature of your journal entry. In payable they include
invoices, payment or receipt, adjustments and purchasing.

Journal
They are used to record the day to day business transaction of an organization. It contains
Dr and Cr lines. It contains two levels of information.
1. Header
2. Lines.

Suspense Journal
Suspense Journal is used to post unbalance journal entries.
Steps:
1. Define suspense a/c at COA level.
2. Enable suspense a/c feature at ledger level.

Recurring Journal
Journals which are repeating in each and every accounting period is known as recurring
journal. These are 3 types. They are
1. Standard Recurring Journals: Journals which are created with same amount and same
accounts is standard recurring journals.
2. Skeleton Recurring Journals: Journals which are repeating with partial information is
called as skeleton recurring journal.
3. Formula Recurring Journals: For this kind of journals, Journal amount will be calculated
by using formulas.

Sequential Numbering
It is used to assign unique no’s to the various oracle concepts. We can define sequential
numbering for journal, AP invoice/payment, AR invoice/Receipt etc. we can even call it as Voucher
number or document Category. The following are steps for sequential numbering.
1. Define profile option “Sequential Numbering” at responsibility level.
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2. Define Sequential numbering.

Nav: System administrator  application  Sequential  Numbering  Define.
3. Assign sequential numbering to the category.

Journal Approval
It is used to define authorization limit to approve the journals for employees.
1. Enable journal approval at ledger level.
2. Enable journal approval at journal Source.
Nav: Setup  Journal  Sources.
3. Define approval limits for employee.
Nav: Setup  Employee  Limits.
4. Define User name for employee.
Nav: system administrator  Security  User  Define.
5. Enter journal and check the result.

Aliases
It is used to define short name for Code combinations.
1. Define Aliases.
Nav: Setup  Financial  Flexfield  key  Aliases.
2. Recompile the COA/ Accouting Struture.
3. Enter journal and check the result.

Mass Allocation:
It means allocation of Revenues or cost expenses across cost center/Department/ Divisions
by using one simple formula.
Formula: T= A * B/C
“A” means Cost pool Amount.
“B” means Usage Factor.
“C” means Total Usage Factor.
“T” means Target Amount.
Segment Types:
1. Constant: This is used Detail account balances associated with the child.
2. Looping: Includes each child Value assigned to the parent values in the formula and the
allocation programs run each formula once for each corresponding child segment values.
3. Summing: This is the sum of all account balances of all child values assigned to parent.
Mass Allocation Methods:
1. Full Type allocation: It is used only when we run the mass allocation method for the first
time. In this method we generate journals that reverse previous allocations or to post
new allocations amount.
2. Incremental Allocation: this method is used for further generation of mass allocation
journal other than first time. This method is used when you want to update allocated
balances without reversing the previous allocation batches.
Steps:
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1. Define cost pool(Exp) a/c and usage factor (Exp) a/c at account segment value.
2. Define Parent value and assign to child ranges.
3. Enter and post cost pool journal.
4. Enter and post Stat journal.
5. Define mass allocation formula( Constant(C ), Looping (L), Summing (S).
6. Validate the formula.
7. Generate the mass allocation formula and submit it
8. Query the journal and Post it.
Note: In real time, Step 1 and Step 3 are not required.

Difference between Intra and Inter Company

Intra Company:A transaction which takes place between the two balancing segment values within
the legal entity is called a Intra company transaction.
Inter Company: A transaction which takes place between the two balancing segment values
between two legal entities is called intercompany transaction.
Illustration:

Indian LE US LE

A C

Intra Company: Companies “A” & “B” are examples for Intra Company because transaction
within the legal entity.
Inter Company: Companies “A” & “C” or “B” & “C” are the examples for inter company because
transaction between two legal entities.
Steps.
1. Define intercompany receivables (revenues) and intercompany payables (Expenses) a/c
at account segment value.
2. Define intercompany flexfield qualifier to the segment at company segment level.
3. Define Legal Entity.
4. Assign the legal Entity to the ledger.
5. Enable “Intra company Balancing” feature at ledger level.
6. Complete Setup step for Operating units, intercompany accounts and intra company
balancing options in ledger.
7. Enter intra company journal and post it.
8. Query the intra company journal to check the result.
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Budget
It is used for better planning and controlling. We can define budget up to maximum 60 periods.
They are two types of budget. They are
1. Planning Budget: In this planning budget we just plan the expenditures but there will
not be any control over it.
2. Funding Budget: In this funding budget we can plan the expenditure or Revenue and
also we can keep the control on budget journal amount.
Budget
Planning Control Journal
Planning Y N N
Funding Y Y Y

Budget periods: There are three types of periods.

1. Open
2. Current
3. Freeze (Close)
First period in the organization is with current Status when define the budget next time you
will get only Open Status. Freeze Status means closing of the budget.
Fund Check levels: There are three types for fund check level.
1. None - It is for planning budget
2. Absolute - We can’t enter amount beyond the budget amount.
3. Advisory – It will pop up a warning message when we enter amount beyond budget
amount.
Funding Budget Steps:
1. Define Reserve for encumbrance (Ownership) account and requires expenses account
A/c at account segment level.
2. Enable “Budgetary control” at ledger level.
3. Define and create Budget.
Nav: Budget  Define  Budget.
4. Query the budget to check the last open period.
Nav: Budget  Define  Budget.
5. Define Budget organization.
Nav: Budget  Define  Organisation.
6. Enter Budget Journal.
Nav: Budget  Define  Journal.
7. Query the budget journal and post it.
8. Enter journal
Nav: Journals  Enter.
9. Check the funds availability.
Nav: Inquiry  Funds.
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Translation
It is used for reporting purpose. It is used to translate balances from functional currency to foreign
currency at account balances level. The difference in translation will be transferred to “Translation
adjustment account”. In translation we use period end rate, historical rates and average rates.

Rates Applicable to
Average Rates Expenses/ Revenues
Period End Rates Assets/ Liabities
Historical Rates Ownership Equity

Rules:
1. Translation should be done in subsidiary companies only.
2. Translation should be done periodically.
3. When you are translating a period the first and after period should be open.
4. Translation can’t be performed for the first period.
Steps:
 Define “Cumulative translation adjustment A/c” at account segment value.
 Define Exchange rate type.
Nav: Setup  Currencies  Rate  Types
 Define Exchange Rate.
Nav: Setup  Currencies  Rate  Daily
 Complete Translation options at ledger level.
 Run Translation
Nav: Currency  Translation.
 Run “Trail balance: Translation” program.
Nav: View  Request  Submit a new request  single request.

Revaluation
It is used to identify unrealized gain/loss amount which occurred due to foreign exchange rate
fluctuations. The difference in revaluation will be transferred to unrealized gain/loss a/c. We run
revaluation in two modules- i.e., GL & FA. In GL we run the revaluation to know the current asset
& liabilities due to fluctuation in the currencies and In assets we run the revaluation to revalue the
assets.
Note: Revaluation can be done only before making the payment or before receiving the amount in
GL.
Steps:
1. Define “Unrealized Gain (revenue) a/c & Unrealized Loss (Expenses) a/c” at account
segment level.
2. Assign profile option “GL: Revaluation: Validate Gain & Loss A/c” at
responsibility Level.
3. Define exchange rate type
4. Define Exchange rate.
5. Enter foreign currency journal & post it.
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6. Change the Exchange Rate.

7. Run Revaluation
8. Nav: Currency  Revaluation.
9. Query revaluation journal and post it.

Reporting Currency
It is used to translate balances from functional currency to foreign currency at transaction
level. Here we use Daily rates. There are three levels are there.
1. Balances level- All the balances will be translated.
2. Journal Level-All the journal entries will be translated
3. Sub –ledger Level- All the journals from AP, AR will be translated.
Steps:
1. Define “Rounding Difference Tracking A/c” at account segment value.
2. Define Exchange rate type
3. Define Exchange rates.
4. Assign rounding difference a/c to ledger.
5. Define Reporting currency Setup’s in setup step at ledger level.
6. Define Reporting GL Responsibility.
7. Assign reporting Ledger to Reporting GL Responsibility.
8. Assign Reporting GL Responsibility to User.
9. Enter Journal in primary ledger and post it.
10. Query the journal in Reporting ledger to check the result.

Roll Up Group
Roll up Groups is used to group the parent values.
Steps:
1. Disable roll up group at COA.
2. Define Roll up group .
Nav: Setup  Financials  Flexfields  Key  Groups.
3. Assign Roll up Group to parent Values.
Nav: Setup  Currencies  Rate  Values

Summary Template
For enquiring balances, in this method we group the accounts with the help of roll up groups.
1. Disable roll up group at COA.
2. Define Roll up group .
Nav: Setup  Financials  Flexfields  Key  Groups.
3. Assign Roll up Group to parent Values.
Nav: Setup  Currencies  Rate  Values.
4. Define Summary Template.
Nav: Setup  Accounts  Summary.
5. Enter and post it.
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6. Enquire the balances. Nav: Enquiry  Account.

Consolidation
It is used to consolidate multiple subsidiary ledger information into single parent ledger.
To consolidate 4 C’s may be same or may not be same.
Let us illustrate with change in currency and all remaining 3 C’s constant.
Parent Subsidiary 1 Subsidiary 2
Country India United States United Kingdom
Currency RIL USD GBP
Calendar RIL Calendar RIL Calendar RIL Calendar
COA RIL COA RIL COA RIL COA
Conventio
n Method Standard Accrual Standard Accrual Standard Accrual

Steps:
1. Define Parent and Required Subsidiary ledgers.
 Parent ledger ( Ril currency)
 Subsidiary ledger 1 (USD currency)
 Subsidiary Ledger 2 (GBP Currency).
2. Define responsibility for Parent and subsidiary Ledgers.
3. Assign ledger to GL Responsibility with profile “GL ledger Name”.
4. Assign the parent and subsidiary responsibility to the user.
5. Open periods in parent and subsidiaries as well.
6. Define Exchange rate types.
7. Define Exchange rates.
8. Complete Translation options in parent and subsidiary ledger.
Nav: Setup  Financials  Accounting setup Manager  Accounting Setup.
9. Define Consolidation mapping
Nav: Consolidation  Define  Consolidation.
 Mapping Subsidiary 1 with parent.
 Mapping Subsidiary 2 with parent.
10. Define Consolidation Set.
Nav: Consolidation  Define  Consolidation Set.
11. Enter Journals in each subsidiary ledger and post it.
12. Run Translation in each Subsidiary
ledger. Nav: Currency  Translation.
13. Run Consolidation transfers.
Nav: Consolidation  Transfer  Data Set.
14. Query journals in parent journal and post them.
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Secondary Ledger
It will represent the primary ledger accounting information in another accounting format. It will be
created when there is change in the following 5 things.
1. Chart of Accounts
2. Calendar.
3. Currency.
4. Convention Method.
5. Accounting Options.
Steps:
 Define Exchange Rate Type.
 Define Exchange Rate.
 Define Secondary Ledger.
Nav: Setup  Financials  Accounting Setup Manager  Accounting Setup.
 Come to Secondary ledger region & complete setup step options.
 Define Secondary ledger to the GL Responsibility with profile options “ GL ledger Name”
 Assign Secondary ledger GL Responsibility to User.
 Open periods in secondary ledger.
 Enter journal in primary ledger and post it.
 Query the journal in secondary ledger and post it.

Security Rule
It works at responsibility level. The list of values are not visible in security rules at the time of
entering journals.
Steps:
1. Enable security rule at value set
Nav: Setup  financial  Flexfield key  Segment.
2. Enable security at segment Level.
Nav: Setup  financial  Flexfields  key  Segment.
3. Define Security Rule
Nav: Setup  Financial Key  Security  Define.
4. Assign security rules to the responsibility.
Nav: Setup  Financial  key  Security  Assign
5. Enter journal to check the result.
Nav: Journal  Enter.

Cross Validation Rule

It works at COA Level. The list of values are visible but will populate an “Error Message” for
invalid code combination.
Steps:
1. Enable Cross validation segment at COA level(Accounting Structure
level). Nav: Setup  financials  Flexfields  key  Segments.
2. Define Cross validation Rule.
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Nav: Setup  Financials  Flexfields  Key  Rules.

3. Enter Journal to check the result.
Nav: Journal  Enter.

Definition Access Set

It is used to provide view or use or modify access to the various gl definitions. It will work at
responsibility level to the various gl definitions/ Functions.

Data Access Set

It is used to provide read only or read & write access to the ledger or balancing segment values or
management segment values.
Steps:
1. Define Data Access Set
Nav: Setup  Financials  Data Access Set.
2. Assign these data access set to a profile option (GL data access Set).

Ledger Set: It is used to access to multiple ledger information from single responsibility. We can
group ledger which have same COA and Calendar.

Financial Statement Generator(FSG)

It is a tool which is used to configure the financial report as per the organization
requirement. It contains five components, they are
1. Row Set
2. Column Set.
3. Order Set.
4. Content Set.
5. Display Set.
Note: Row set & Column set are mandatory. Order Set, Content set & Display Set are optional.
Row Set: It determines format & Content of rows.
Column Set: It Determines format & content of columns.
Order Set: It Determines data should display in what order in the report like ascending/descending
Order.
Content Set: It is used to Generate reports for multiple departments in a single run.
Display Set: It determines what data should be displayed in the reports.
Steps:
1. Define Row Set.
Nav: Reports  Define  Row Set.
2. Define Column Set.
Nav: Reports  Define  Column Set.
3. Define Report.
Nav: Reports  Define  Reports.
4. Define Report Set.
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Nav: Reports  Define  Report Set.

5. Run Financial Report.
Nav: Reports  Request  Financial.

Retained Earnings
They are undistributed profits of the organization. These are period end process profits that
calculate for each balancing segment value by running retained earnings reports with specific
Segment.

Format Types: Character, Date, Date & Time, Numbering, Standard time & Standard time & Date.

Value Set
It means a set of predefined and validate values assigned to a field that restricts the user from
entering “Junk and invalidated data”. It provides list of values to the end user to accept one of the
values as report parameters value.

Validation Types
The following are Validation Types.
1. Independent: the nature of segment is independent.
2. Dependent: This segment depends on independent segment.
3. None: it is not applicable.
4. Pair: pair means range of segments.
5. Table: table means calculation purpose.
6. Special: Special means based on conditions.
7. Translatable Independent: We use it other than English language.
8. Translatable dependent: We use it other than English language.
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Multi Org Access Control (MOAC).

Release 12 came with a new feature of accessing the multiple Operating Units
with the single responsibility. In R12, this concept is named as Multi-Org Access Control
(MOAC). In earlier versions, we can access only one operating unit with single responsibility, for
"n" no of operating units we need to create "n" no of responsibilities.
Multi-Org Access Control (MOAC) enables companies that have
implemented a Shared Services operating model to efficiently process business transactions by
allowing them to access, process and report on data for an unlimited number of operating units
within a single applications responsibility.
There are two Security profiles:
• Security Profile: It is used for the selection of Operating unit from the same business
group.
• Global Security Profile: It is used for the selection of Operating Units from the
different business group.
Features of Multi Org Access Control:
• User can access the mutiple operating unit data with single responsibility
• Reduces time and can submit single request for mutiple operating unit data.
• Reporting can be managed at different organization levels like, Business Group,
Ledger, Operating unit etc
This Mutli Org Access Access Control (MOAC) should be assigned to the
Profile Option (MO: Security Profile). So that it allows to access mutiple
Operating Units data.
Step 1: Create Mutli Org Access Control Security Profile:
Nav: HRMS Responsibility --> Security --> Profile
• Enter Name
• Enter your Business Group
• Select Security Type: Secure Organisations by Organisation Hierarchy and/or
organisation list.
Step 2: Submit Security List Maintenance Program.
Nav: Processes and Reports --> Submit Processes and Reports.
• Program Name: Security List Maintenance
• Generate Lists for: All Security Profiles
• Process: Current people Only
• Static User Processing: Process all static Users.
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Procure to Pay Cycle (P2P).

1) Requistion.
2) Request For Quotation (RFQ).
3) Receiving Quotations.
4) Quotation Analysis
5) Purchase Order (PO)
6) Receiving
7) Receiving Transaction (Delivery).
8) Invoice
9) Payment.
10) Clear the invoice in Cash Management.
11) Transfer to Geneal Ledger.
Accounting Entry:
At Receipt at Purchasing Module:
Receiving Inventory A/c...................................Dr
To AP Accural A/c.....................Cr
At Delivery at Purchasing Module:
Expenses A/c............................................................Dr
To Inventory Receiving A/c..........Cr
To Purchase Price Variance...........Cr
Note: Purchase Price Variance (PPV) is the difference between PO price and Standard Cost.
Payable invoice when matched to PO:
AP Accural (92001) A/c.......................................................Dr
To Liability A/c.................................Cr
To Invoice Price Variance..................Cr
Note: Invoice Price Variance (IPV) is the difference between Invoice Price and PO Price.
Payment made to Supplier/ Vendor in Payables modules:
Liability A/c.........................................................Dr
To Cash Clearing A/c...................Cr
When Payment is cleared in bank
Cash Clearing A/c................................................Dr
To Cash A/c..................................Cr

Options
Options are controlling features at operating unit level. There are 3 types of options in AP.
1. Financial Options
2. Payables Options
3. Payables system setup
Financial Options
Use the Financials Options window to define the options and
defaults that are shared acrosss the modules like Oracle Payables, Oracle Purchasing, and
Oracle Assets. You can define defaults in this window to simplify supplier entry, requisition
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entry, purchase order entry, invoice entry, and automatic payments. There are five tabs in
Financial Options. They are
1. Accounting
2. Supplier -Purchasing
3. Encumbrance
4. Tax
5. Human Resources.
Payables Options
Payable Options is used to set control options and defaults used throughout
Payables. You can set defaults in this window that will simplify supplier entry, invoice entry,
and automatic payment processing. There are 11 tabs in payables Options. They are
1. Accouting Options
2. Currency
3. Tax Reporting
4. Invoice
5. Approval
6. Matching
7. Interest
8. Expenses Report
9. Payment
10. Withholding Tax
11. Reports
Payables System Setup
Use the Payables System Setup window to define supplier control options and
defaults. Although you need to define these options and defaults only once, you can update
most of them at any time to change controls and defaults for suppliers and future
transactions.

Payment Terms.
Payment terms will be determine in how many days the payment should be made(Due
Date), discount Date and Discount amount.

Distribution Set.
It is used to automatically enter distribution for an invoice. There are two type of
distribution Sets.
Full Distribution Set: It is used to determine accounting and percentages of amount for
each distribution line. When we select distribution set at invoice header, the system will
automatically create line at distribution level with accounting and amount as per the
percentage mentioned.
Skeleton Distribution Set: Here, it is used to determine accounts but percentage should be
left blank. Where we need to enter amount of each distribution line at the time invoice
creation.
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Standard Invoice
It is postive amount invoice. It is regular Invoice, which is used to record for good or
services purchased from the supplier.
Accounting Entry:
Expenses A/c.......................Dr
To Liability A/c.....................Cr.

Debit Memo.
Debit Memo is raised by Customer itself, at the time purchase returns. It is negative
amount invoice which is used reduce the supplier liability.
Accounting Entry:
Liability A/c.................Dr.
To Expenses A/c...............Cr

Credit Memo.
Credit Memo is raised by supplier and send to the customer. It is used at the discounts
received or any price differences. It is a negative amount invoice which is used reduce supplier
liability.
Accounting Entry:
Liability A/c.................Dr.
To Expenses A/c...............Cr.

Mixed Invoice.
We can enter positive or Negative amount in mixed invoice, As standard invoice,
debit memo and credit Memo Invoices.

Prepayment
It is advance payment that we pay to the supplier to supply the goods/ services.
There are two types of Prepayments, they are Permenant and Temparory. In case of Permenant
Prepayment it acts like deposit with the suppliers. It will be adjusted only after converting
Permenant Prepayment to Temparory Prepayment. In case temparory prepayment we adjust the
prepayment amount at the immediate invoice received. The following are the different statuses in
the invoice.
1) Never validated ( Before Validation of Prepayment Invoice)
2) Unpaid ( After Validation of Prepayment Invoice and when payment is not made)
3) Permanent ( Permanent Prepayment) (After Payment to Prepayment Invoice)
4) Avaliable ( Temparory Prepayment) (After Payment to Prepayment Invoice)
5) Fully Applied. ( In case Prepayment Amount is applied fully to a Standard Invoice)
Acounting entries:
Prepayment Invoice:
Prepayment A/c.........Dr
To liability a/c..................Cr
For Payment to Prepayment Invoice
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Liability A/c............Dr
To Cash A/c......................Cr.
In Case Of Standard Invoice
Expenses A/c.............Dr
To Liability A/c..................Cr
Apply the Prepayment to Standard Invoice
Liability A/c...........Dr
To Prepayment A/c.............Cr

Withholding Tax Invoice

If customer want to withhold the tax amount charged by supplier in the invoice, and
customer want to pay the tax amount directly to tax authorities instead of paying to supplier.
For that System automatically create a withholding tax invoice. In this case tax authority would
be a supplier.
Setup Steps:
Step: 1 Enable WHT at payable
options Step: 2 Define WHT
special calendars Step: 3 Define
Supplier as tax authority Step: 4
Create WHT code and group
Step: 5 Assign WHT group at payables options
Step: 6 Enable WHT at supplier header and site level and assign WHT
Group Step: 7 Create Standard invoice
Step: 8 Query WHT invoice for cross verification purpose.
Accounting Entries:
When WHT applied to Standard invoice
Expenses A/c................................Dr
To Liability A/c...........CR
To Withholding Tax A/c..............Cr
For Withholding Tax Invoice ( Auto Generated)
WHT Expenses A/c....................Dr
To WHT Payaables/Liability A/c...............Cr

Retainage Release Invoice.

This invoice is used to hold some portion of amount from the supplier Payment.The
remaining will be paid to supplier only at the completion of the total work.
Setup Steps:
1) Enter Retainage Account at Financial Options.
2) Enter Retainage Percentage (%) at Supplier level in Invoice Management Tab.
3) Create Complex Service Agreements PO in Purchasing Module.
4) Create a Standard Invoice by matching with above created Complex Service
Agreement PO.
5) Make Payment for above Standard Invoice.
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6) When Contract the is completed, Release the Retainage Percentage amount by

creating Retainage Release Invoice by matching with the PO.
7) Make payment for Retainage Invoice.
Accounting Entries:
When Invoice is matched with Standard Invoice:
Accural A/c........................Dr.
To Liability A/c.............Cr.
To Retainage A/c............Cr (Pick from Finacial Options)
For Making Payment for Standard Invoice:
Liability A/c.......................Dr
To Cash Clearing A/c........Cr
When Retainage Invoice is Created:
Retainage A/c......................Dr
To Liability A/c....................Cr.
For Making Payment to Retainage Invoice:
Liability A/c.......................Dr
To Cash Clearing A/c.............Cr.

Expenses Report Invoice

An Invoice which is used to reimburse the business related expenses which are
incurred by employees.
Setup Step:
Step1: Define Expenses Report Template (Expenses report template is used to list out all
the expenses items which are reimbursed by organization employee).
Step 2 : Assign Expense template created in the payable options.
Step 3: Enter Expenses Report Invoice.
Step 4: Run Expenses Report Export Program.
Step 5: Now go to the Supplier Window, You can see employee is created as supplier
automatically by the system. Now, Query your employee and update Payment
details as " Check".
Step 6: Now again run the same Report " Expenses Report Export" Report.
Step 7: Now Query you expenses invoice in invoice window which is automatically created
by the system and validate it and make payment for the expense Invoice.
Accounting Entries:
For Expenses Invoice
Expenses A/c...................Dr.
To Liability A/c Cr.
For Payment to Expense Invoice
Liability A/c.......................Dr
To Cash A/c................Cr.
 19

Interest Invoice
An invoice which is created by system automatically to record the interest charges on
late payment where due date has crossed. In such a case, System will create one more invoice for
only the interest portion amount apart from the standard invoice.
Setup Steps:
Step 1: Define "Interest" tab at payables Option.
Step 2: Enable "Create Interest Invoices" in payables system setup Options.
Step 3: Enable "Create Interest Invoices" at supplier " Invoice Management" Tab.
Step 4: Define Interest Rates.
Step 5: Query the Standard invoice with old date where due date is crossed, Validate
the invoice.
Step 6: Make payment for the Standard invoice, at that system will show a note "
Invoice is past due" and " Interest is due on this Invoice".
Step 7: Query the interest Invoice in invoice work bench to check the interest Amt.
Accounting Entry:
Interest Invoice entry while making Payment.
Interest Expenses A/c.............Dr
Liability A/c............................Dr
To Cash A/c.......................Cr.

Payment Manager
Payment can be made for single invoice or for group of invoices. For making payment
for gourp of invoices can be done by using payment manager. It is an automation process.
Automation means giving standard instruction to the system to make the payment
automatically. Through payment manager window we have sumbit Payment Process Request.
PPR involves 4 steps.
1) Selection
2) Build
3) Formatting
4) Confirmation.
Before we create PPR we need to create
1) XML Template
2) Payment Format
3) Payment Method
4) Payment Documents (It is asssumed that Bank, Bank a/c and bank a/c is
created)
5) PPP (Payment Process Profile).
PPR statuses.
1) New
2) Selecting Invoice
3) request canceled -No Invoice selected
4) Invoice pending for Review.
5) Calculating Special Amount
 20

6) Pending Proposed Payments Review

7) Formatting
8) Confirmation.
9) Terminatted.

Zero Payments:
If you cancel an invoice, In such case there is no need pay any amount, but system will
shows zero balance, to eliminate the zero balance, we need to create dummy bank A/c and Dummy
Check's and to make payment for the cancel invoices to eliminate the zero balance.

Difference between ETF and Wire ?

ETF: System create an instruction file with details of invoices and Payments.
The same file will be send to bank for Payment. It method is used at the time of domestic Payments.
Wire: It is manual process of sending instructions to bank. System will not generate any
instruction file. It method is used at the time of international Payments.

Pay On Receipt:
Under pay on receipt method invoice will be created by system automatically when we
create receipt.
Setup Steps:
Step: 1 Enable pay on receipt at Supplier from Purchasing Module
Step: 2 Create purchase order
Step: 3 Receive the goods
Step: 4 Query the invoice in the invoice work bench.

Refund.
Refund is nothing but get back the money from the supplier. Refund activity can be
done with reference to Debit Memo or Credit Memo.
1) In Invoice Workbench, Create Credit Memo or Debit Memo with Match action as Invoice
with negative amount.
2) In Payment Workbench, Select Payment type as " Refund" , Suplier Name, and click on
Enter and Adjust Invoice, Select the above created Debit or Credit Memo.
Accounting Entry:
At Invoice Workbench Level:
Liability A/c........................Dr.
To Expenses/ AP....................Cr.
At Payment WorkBench Level:
Cash Clearing A/c.................Dr.
To Liability A/c......................Cr.

Reissue:
It is used cancel the old payment Document and create payment Document in payment
workbench. Reissue concept is used when we cancel the cheque and reissued a new cheque to the
 21

supplier, for such cases we used reissue concept to change Old payment document number to
new payment Document.
1) In Payment Workbench, Query the payment Document which you want to reissue,
Click on Action button and enable reissue and give the payment date and New Payment
Document Number, Click on Ok Button.
2) Now query with the New payment Document and check it.
Accounting Entry:
For Old Payment Document No:
Cash Clearing A/c.....................Dr.
To liability A/c.................................Cr.
For New Payment Document No:
Liability A/c...............................Dr.
To Cash Clearing A/c.......................Cr.

Void:
Void Concept is used to cancel the Payment Document. In Payment Workbench, Query
the payment Document which you want to Void, Click on Action button and enable Void and
give the Date, GL Date and give the Invoice Action. Now, Click on Ok Button.
Accounting Entry:
For Void Payment Document No:
Cash Clearing A/c.....................Dr.
To liability A/c.................................Cr.

Holds.
Holds are used to prevent further action on invoices. Action Like validating, Payment and
create accounting. There are two types of Holds.
1) Manual Hold.
2) System Hold.
Manual Hold: In case of Manual Hold, Hold will be manually placed by the user and manually
released by the user after settlement.
Setup Step's:
1) Define reason for the hold with name and Description.
2) Define Invoice hold release reason with name and description.
3) Now Query the invoice, Go to hold Tab, and place the hold manually and validate
the invoice.
4) Give Release hold by select release hold name and validate the invoice.
System Hold: In case of System Hold, Hold will be automatically placed by the system at
the time of validation. We can't release system hold, Unless the error is recified.

Debit Memo from RTS Transaction:

RTS means " Return to Supplier" nothing but Purchase Returns. Debit Memo from RTS
Transaction feature is used to create debit memo automatically by system when we return goods to
supplier.
 22

Setup Step:
1) Enable " Create Debit Memo from RTS Transaction" at supplier & Supplier
Site level.
2) Return goods to Supplier in purchasing Modules.
3) Ensure concurrent request completed normal check Debit Memo
invoice in payables module.

Automatic offset Method:

It is used to create multiple liabilities in payables in such a way that all balancing
segment values of debit and credit are equal. There are three type of automatic offset Method
1) Balancing Account.
2) Natural Account.
3) None
Balancing: The balancing segment part accounting will be picked from Invoice Distribution a/c and
rest all code combination will be picked from Supplier Liability a/c.
Natural Account: The natural a/c part accounting will be picked from Supplier Liability a/c and
rest all code combination will be picked from Invoice Distribution a/c.
None: It means automatic offset method is not applicable.
 23

Auto Invoice Setup.

1) In OM System Parameters Window, For item Validation Organisation assign Master
Inventory(MI) or Actual Inventory (AI).
2) Create Transaction Type for line and order.
3) Define Document Sequence for the transaction type.
4) Assign Document Sequence and Document Category in Document Assignment window
5) For OM Responsibility assign " QP Item Validation Organisation".
6) Assign you item in advance pricing form.
7) Define Carrier Method.
8) Define Release Sequence Rule.
9) Define Pick Slip Grouping Rule.
10) Define Release Rules.
11) Define Document Set for Pick Release.
12) Define Document Set for Ship Confirmation.
13) Define Ship Confirmation Rules.
14) Shipping Parameters.
15) Define Picker Role.
16) Define Shipper Role.
17) Define grants to shipper and picker
18) Open Periods in Inventory, Purchasing and General Ledger Modules.
19) Create Receivables Transaction Type
20) Create Imported Transaction Source
21) Assign Receivable transaction type and sources to Transaction type create in OM.

O2C Cycle.
1) Enter Sales Order.
2) Book Sales Order.
3) Stock Reservation.
4) Pick Release.
5) Ship Confirmation.
6) Workflow background Process Engine Program.
7) Autoinvoice Import Program.
8) Query the transaction in AR and complete the transaction.
9) Create Receipt against imported transaction.
10) Clear the transaction in Cash Management.
11)Transfer to General Ledger.
Accounting Entries for O2C Cycle.
At Pick Release:
Inventory Stage A/c...............Dr.
To Inventory Finished Goods A/c.................Cr.
At Shif Confirmation:
COGS A/c..............................Dr.
 24

To Inventory Organisation A/c........................Cr.

At Transaction in AR:
Receivable A/c......................Dr.
To Revenve A/c................................................Cr.
To Tax A/c........................................................Cr.
To Freight A/c..................................................Cr.
At Receipt in AR:
Cash A/c...............................Dr.
To Receivable....................................................Cr.

System Options (AR)

Define system options to customize your Receivables environment. Is is used to
set some default and control on receivables module. You can specify your accounting infomation,
customer and invoice parameters, and how the AutoInvoice and Automatic Receipts programs will
run.
Customer Profile Class
Profile class is used to group the customers based on certain parameters like with
similar creditworthiness, business volume, payment cycles, and late charge policies. The pre-
requiste for creation of Customer Profile Class are Payment Terms, Collectors and Statement Cycle.

Application Rule Set

It will determine, How to apply receipt amount aganist invoice components.The invoice
components are item, tax, freight, Financail Charges.
Oracle provides by default three appliction rule set. We can define as per our
requirement. The three default one are:
• Line First--Tax Prorate
• Line First--Tax After
• Prorate All.

Transaction Types
Transaction type will determine the following features that defaults to the transactions.
They are
• The Accounting Information for the debit memos, credit memos, on-account
credits, chargebacks, commitments, invoices, and bills receivable you create in
Receivables.
• Whether to Post in General ledger or not.
• Whether we can print the invoice or not.
• Amount Sign "+ " or "-".
• Tax Information.
• Frieght Information.
• Natural Application Only or Allow Over application.

Transaction Sources
 25

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.
1) Manual Transaction Source.
2) Imported (Automatic) transaction source is used to import the transactions into AR
using Auto Invoice

Receivable Activities
Receivable activities are used to default the accounting information for various activities.
The activities are like Adjustment, Bank Error, Earned Discount, Endorsment, Finance Charges
Miscellaneous Cash, Short term Debt, Unearned Discount, Receipt Write Off.

Auto Accounting.
Auto accounting is used to default the accounting information into various
transactions. Auto accounting will be defined for:
• Receivables Account
• Revenue Account
• Tax
• Freight
• Unearned Revenve
• Unbilled Receivablesetc.

Receipt Class
Receipt class will determine the:
• Receipt creation method
• Remittance method
• Clearance method
• Receipt method for various receipts
Creation Methods:
• Manual
• Automatic
• AP / AR Netting
• Bills receivables
• Bills receivables remittance
Remittance Method:
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:
• No Remittance
• Standard
• Factoring
• standard and factoring.
 26

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
• By Matching
• By Automatic clearing
Directly: Choose this method if you do not expect the receipts to be remitted to the bank and
subsequently cleared. These receipts will be assumed to be cleared at the time of receipt entry and
will require no further processing. Choosing this method is the same as setting Require Bank
Clearance to No in previous releases of Receivables.
By Automatic Clearing: Choose this method to clear receipts using the Automatic Clearing
program. (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 Method:
• Check
• EFT
• Wire
• Clearing.
Receipt Source
Receipt Source will determine:
• Receipt class
• Payment method
• Numbering for receipt batches
• Bank Account
There are 2 types of receipt sources
• Manual Receipt Source.
• Automatic Receipt Souce.

Remit to Address
Remit to address is an address where customer is sending the receipt details of checks
and Payments to.
 27

Aging Buckets
Aging buckets are time periods you can use to review and report on your open
receivables. For example, the 4-Bucket Aging bucket that Receivables provides consists of four
periods: -999 to 0 days current, 1 to 30 days past due, 31-61 days past due, and 61-91 days past due.
When you create your Collections reports, you can specify an aging bucket and 'as of date', and
Receivables will group the transactions and their amounts in the appropriate days past due period.
There are two types:
 Four Aging Buckets
 Seven Aging Bukets.
Four Aging Buckets allows to define an aging bucket with four periods. Wheres as Seven
Aging Buckets allows to define an aging bucket with Seven periods.

Statement Cycle
Statement cycle will determine when to send statements to customer. For example:
Montly, quaterly, half-yearly or Yearly.

Earned Discount & UnEarned Discount

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 is the reason we are
receiving money on.

Invoice ( Sales Invoice)

When you sell goods to record normal sales we use Invoice.
Accounting Entry:
Receivables A/c........................Dr
To Revenve............................Cr.
To Freight A/c........................Cr.
To Tax A/c.............................Cr.

Debit Memo
When the customer is undercharged to increase customer balance we use Debit Memo.
Debit Memo is Positive sign invoice.
Accounting Entry:
Receivables A/c........................Dr
To Revenve............................Cr.
To Freight A/c........................Cr.
To Tax A/c.............................Cr.

Credit Memo.
When the customer returns goods or overcharged to decrease customer balance we use
Credit Memo. Debit Memo is Negative sign invoice.
Accounting Entry.
 28

Revenve A/c..................Dr.
Tax A/c..........................Dr.
Frieght A/c....................Dr
To Receivables A/c.................Cr.

Deposits.
If we received advance from our customer, to record the same we use “Deposit”
Transaction. Lather it will be adjusted against future invoices or future Liability. We call it as
Commitment Transaction.
Steps:
1) Define Deposit Transaction Type.
2) Define Deposti Transaction Source.
3) Create a Deposit Transaction and enter detials in commitment Tab
4) Record the Receipt against deposit transaction.
5) Enter Standard Transaction and apply against Deposit Transaction Number.
6) Query the Deposit Transaction and check on Details button to check Commitment Amt.
Accounting Entry:
When you enter a deposit, Receivables creates the following journal entry:
Receivable A/c.....................Dr.
To Unearned Revenve A/c.............Cr.
When you enter an invoice against this deposit, Receivables creates the following journal entries:
Receivables A/c.....................Dr.
To Revenve A/c............................Cr.
To Tax A/c....................................Cr.
To Freight A/c...............................Cr.
Unearned Revenve A/c.............Dr
To Receivables A/c.......................Cr.

Guarantee
Guarantee Transaction means that our customer will agree to purchase from us for a
particular amount to avail some discount. It is known as commitment Transaction.
Steps:
1) Define Guarantee Transaction Type.
2) Define Guarnatee Transaction Source.
3) Create a Guarnatee Transaction and enter detials in commitment Tab
4) Enter Standard Transaction and apply against Guarantee Transaction Number.
5) Record the Receipt against Standard Transaction.
6) Query the Guarantee Transaction and check on Details button to check Commitment Amt.
Accounting Entry:
When you enter a guarantee transaction, Receivables creates the following journal entry:
Unbilled Receivable A/c...................Dr.
To Unearned Revenve A/c...................Cr
 29

When you enter an invoice against this Guarantee Transaction, Receivables creates the following
journal entries:
Receivables A/c........................Dr
To Revenve A/c............................Cr.
To Tax A/c.....................................Cr.
To Freight A/c...............................Cr.
Unearned Revenve A/c..................Dr.
To Unbilled Receivables A/c.........Cr.

Chargeback Transaction
Charge back transactions are used to close the open invoice and to open new transaction
with new terms. 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 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 amount.
Steps:
1) Define Chargeback Transaction Type
2) Define Chargeback Transaction Source.
3) Define Chargeback Receivable Activity.
4) Create Standard Invoice
5) Record Paritial Receipt against Standard invoice and create chargeback transaction for
remaing amount.
6) Query the Chargeback invoice No.

AP/AR Netting.
AP/ AR netting allows you to net off the payable invoice balances against receivable
invoice balances for whose customers who is also your supplier. For example, If you have a
customer who is also your supplier, then rather than him paying you and then you paying him,
AP/AR netting allows you to pay the net difference between how much you owe the supplier and
how much he owes you. After establishing a netting agreement with such trading partners, you set
up the agreement and the rules associated with it in eBusiness Suite and you can then start to net AP
and AR transactions.
Setup Steps:
1) Netting Bank A/c and create PPP.
2) Enable "Allow payment to unrelated transaction" in Receivable Options.
3) Create Receipt Class for AP/ AR Netting and give bank account Details.
4) Define Document Sequence and assign Document Catergory to Document Sequence in
assignment window for Payable and receivables.
5) Define Netting Agreement.
6) Create Netting Batch.
 30

Revenve Recognisation
In Revenue Recognisation we have two concept in oracle apps.
1. Invoicing Rule.
2. Accounting Rule.
Invoicing Rule:
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. In
case of Bill in advance " Unearned Revenue " will come into the picture.
If you enter an invoice with a Bill in Advance invoicing rule, Receivables creates
the following journal entries.
In first Period:
Receivables A/c.....DR
To Unearned Revenue A/c.....CR
To Tax A/c...........................CR
To Freight A/c......................CR
In all periods of the rule for the portion that is recognized:
Unearned Revenue A/c......DR
To Revenue..........CR
Bills in Arrears: System will recognize amount at the end of the contract or project. In case of
Bills in Arrears " Unbilled Receivable" will come into the picture.
If you enter an invoice with a Bill in Arrears invoicing rule, Receivables creates the
following journal entry:
In first Period:
Unbilled Receivable A/c......DR
To Revenue..............CR
In all periods of Rule, for the portion that is recognized:
Receivables A/c.............DR
To Unbilled Receivables A/c............CR
To Tax........................................CR
To Freight..................................CR
Accounting Rules:
Accounting Rules will determined the Accounting Period in which Revenues are recognized.
There are 2 types of accounting rules:
1. Fixed Schedule
2. Variable Schedule
Fixed Schedule:
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.
 31

Step: 2 Create Invoice with Fixed Schedule accounting rule with Bills in advance invoice rule.
Now system will automatically pic the " Unearned Revenue" & Revenve A/c from autoAccounting
setup.
Save and complete the transaction
Step -3: Run Revenue Recognisation program
Now, Run create accouting program and see the ouput in subledger accounting.
Variable Schedule:
 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 – 2:
Create Invoice with Fixed Schedule accounting rule with Bills in advance invoice rule.
Step -3: Run Revenue Recognisation program
Now, Run create accouting program and see the ouput in subledger accounting.

Deferred COGS
Prior to this enhancement, the value of goods shipped from inventory were expensed to
COGS upon ship confirm, despite the fact that revenue may not yet have been earned on that
shipment. With this enhancement, the value of goods shipped from inventory will be put in a
Deferred 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, thus synchronizing, the recognition of revenue and COGS in accordance with the
recommendations of generally accepted accounting principles.

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.

Customer Refund
Refund is noting returning back excess receipt amount recevied more than transaction amount.
Steps:
1) Define Refund Receivable Activity
2) Create Standard Transaction.
3) Create receipt with excess amount and adjust invoice and keep remaining amount as
unapplied or on account.
4) Complete Remittance Process like create, approve and format.
5) Query the receipt which you need to refund excess amount to customer. Apply the
excess amount to Refund. Now, click on refund attributes and give refund payment method (I.e
check, wire)
6) Copy Invoice No in receipt window from Refund Status.
7) Query the invoice in AP and make payment to it.
 32

Receipt Write-off
You can write off unapplied cash receipt balances. Receipt write off functionality is
Provided to account for small overpayments that you do not intend to refund or maintain as
unapplied amounts or On account balance.
Steps:
1) Define write off limits in receivables system options window.
2) Define Receipt write off receivables activity.
3) Set Write off limit for particular user.
4) Create transaction in AR
5) Create Receipt with access amount then transation amount and apply against receipt
amount against transaction invoice.
6) Now place curser in "Applied To" tab and press down arrow, apply unapplied amount to
receipt write-off and save it.

Remittance.
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.
Steps:
1) Create a remittance batch, by giving remittance Method, Receipt Class, Receipt Method,
bank, bank branches, bank account.
2) Now click on " Manual Create" Button, Now status will change form "Started Create" to
" Create Completed".
3) In Main Tab, Place cursor on Receipt Method, Press "Ctrl+F11" and Select the checks
you wish to send to bank and click on " Approve" Button. Now status will be " Started Approve" ,
when
" Automatic remittance execution" concurrent request completed, Status will change to "completed
Approval"
4) Click on "Format" Button, Status will be " Started Format", when Print remittance program
completed status will change to "Completed Format".

Transaction Batch
Transaction batch is used to enter group of transactions based on the certain parameters.
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
 33

Miscellaneous Receipts
Non invoice related receipts is called miscellaneous receipts, such as interest on investment,
dividend etc. For creating miscellaneous receipt, we have create Miscellaneous account and give
GL account in Receivable activities window.

Auto Cash Rule Set

Receivables provides five AutoCash rules that we can use to create our own AutoCash
rule sets. When we run Post QuickCash to apply customer's receipts, Receivables tries to use each
AutoCash rule within an AutoCash rule set. If the first rule in the set does not find a match,
Receivables uses the next rule in the sequence, and so on until it can apply the receipt. Auto cash
rule set is used to apply receipt amount against invoices. The following are the five Rules:
1. Clear the account
2. Clear the past due invoices
3. Clear the past due invoices grouped by payment terms
4. Match payment with invoice
5. Apply to the oldest invoice first

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 that receipt will get reversed.
Debit Memo Reversal: When we reverse receipt using debit memo reversal all associated
transactions will not get reversed, but new debit Memo get created with same amount.

Auto Lockbox
Lockbox is a service offered by banks to companies in which the company receives
payments from their customersby mail to a post office box and the bank picks up the payments and
deposits it in the company’s bank account. In away, the company is outsourcing its AR function of
collecting the checks and depositing it in the bank. The bankthen informs the company of all the
payments received. They normally send a Flat file (text file) to the company that gives all the
details of the deposits made in the bank account. The details captured in the flat file depend on the
arrangement between the bank and the company. This flat file is referred to as the Lockbox file. The
company can then import this Lockbox file in their system to create receipts and apply these
receipts to the open invoices. Oracle Receivables provide a standard functionality to import the
lockbox file to create the receipts. It also provides you with the flexibility to define customized
lockbox formats to enable you to accept the lockbox file in any format for any of the banks. The
Oracle Lockbox functionality can also be extended to convert Receipts information from any other
legacy system or from the remittance advice the company gets directly from their customers.
Setup's
You need to setup the following before running the Lockbox process
1) Bank and Bank Accounts: You define your internal bank accounts in Accounts
Receivables. This is the bank account where the customer payments are deposited.
 34

2) Receipt Class: The Receipt Class determines the processing steps for the receipts and you
assign Receipt Methods
to your Receipt Class. The processing steps for any Receipt include confirmation, remittance
and reconciliation.
3) Receipt Method: Receipt Method is assigned to a receipt class and it determines how to
account for the receipts
using the Receipt Class. For one Receipt Class, you can have more than one Receipt
Methods. You associate bank
accounts and the GL account combinations for Cash, Remittance, and Bank Charges etc with
the Receipt Method.
4) Receipt Source: You define Receipt Batch Sources to provide default values for
Receipt Class, Receipt Method
and the Remittance Bank Account. Your Receipt Source also determines if the batch
numbering system is manual or
automatic.
5) Lockbox: Define a lockbox for your Lockbox service from each bank. The lockbox setup
includes a Lockbox
number (You get a Lockbox number from your bank).
6) Lockbox Transmission Formats: Oracle Receivables AutoLockbox uses the
Transmission format while importing
the data from the lockbox file into Receivables. Transmission formats indicate how the data
in the Lockbox file is
organized.
7) AutoCash Rule Sets: AutoCash Rule Sets determines the sequence of AutoCash Rules
that Post QuickCash
program uses to apply the receipt amount to the customer account open items.
8) Control file: A Control file is a sql loader file to load the lockbox file in Receivables
payment interface table(ar_payments_interface_all). This file should have the ‘.ctl’
extension and should be placed in the $AR_TOP/bin directory.
Lockbox Processing Steps:
• Start the lockbox processing by copying lockbox data file in required Folder.
• Run Submit lockbox process.
• Data is imported to AR_Payments_Interface_all tables. Validation process starts, If
any errors found, Recify the same using Maintain transimission Data window.
• If no error found, it will completed validation and quick cash batch is created.
• Post quick cash program will run
• Finally receipts applied and customer balances updated. Here end the process.
 35

Assets

Asset Category Key Flexfield: Explained

Define the Asset Category key flexfield so that you can create categories and group assets by financial
information in relevant categories. Define your Asset Category flexfield segments to fit the specific needs of
your organization. You must define at least one subcategory segment to allow for distinctions within a major
category.

You can define up to seven segments for your Asset Category key flexfield. Since Oracle Fusion Assets only
displays a limited number of characters on its forms and reports, you may want to use only two or three
segments so that all of them can be displayed. Also, since you must define depreciation rules for each
category flexfield combination, more segments require more setup and maintenance effort.

Enterprise Name

The enterprise name establishes the name that appears on Oracle Fusion Assets reports.

Oldest Date Placed in Service

The oldest date placed in service controls dates are valid to place assets in service and on what date to
begin your calendars. You can only update the oldest date placed in service before you assign any calendars to
depreciation books.

Flexfield Structures

Define your company's Category, Location, and Asset Key flexfields structures, which will be used to record
transactions.

Configure flexfield segments to capture data that represents the values of attributes. You can define any
number of segments for each flexfield, but Assets supports only one structure. The administrator must choose
a structure for each key flexfield that will be used to record transactions.

Automatic Asset Numbering

The starting asset number defines the number to begin automatically numbering your assets. Note that some
asset numbers may be skipped.

When you use automatic numbering, then manual numbering must be less than the starting asset number
that you have established. In other words, if you start automatic numbering at 50,001, manual numbering
must be between 1 and 50,000. Asset numbers with a letter in them are not reserved for automatic asset
numbering, since the automatic numbers are a numerical sequence.

If you are converting from another system, you can enter a starting number greater than the number of assets
you want to convert so converted assets keep the same number from the previous system. For example, if
you are converting 75,000 assets, you can enter 100,001 as the starting number to reserve the numbers 1 to
100,000 for manual asset numbering. Note that adding the 75,000 assets will increment the automatic
numbering sequence by 75,000 (automatically numbered assets will begin at 175,001).
 36

Fiscal Years: Explained

A fiscal year is a standard set of periods used to prepare annual financial statements for reporting and tax
purposes. Normally its twelve months period, this will vary from business to business and also country to
country. A fiscal year can also be referred to as a financial year or a budget year.

You need to define the start date and end date for each of your fiscal years starting from the earliest date
placed in service through at least one fiscal year beyond the current fiscal year. You need to define at least
one calendar for each fiscal year to break the fiscal year into multiple reportable periods, such as months.

Note

Depreciation will fail if the current fiscal year is the last fiscal year you have set up.

Consider the following when setting up your fiscal years.

Multiple Fiscal Years

You can set up multiple fiscal years and assign different fiscal years to your different corporate books to meet
the various reporting and tax requirements.

Tax Books

The fiscal year should be the same for a corporate book and all its associated tax books. In other words, the
calendar for a tax book must use the same fiscal year name as the calendar for its associated corporate book.

Asset Key Flexfield: Explained

Use the Asset Key flexfield in Oracle Fusion Assets to group your assets by non-financial information. You
design your Asset Key flexfield to record the information you want. You can assign the same asset key to many
assets to easily find similar assets. All Assets transaction pages allow you to query assets using the asset key,
and help you find your assets without an asset number.

Even If you choose not to track assets using the asset key, you must define at least one segment Asset Key
flexfield without validation because the Asset Key flexfield structure is required to set up the system controls.

Plan your flexfield carefully. Once you begin entering assets using the flexfield, you cannot change it.

Asset Categories: Explained

Asset categories let you define information that is common to a group of assets, such as the depreciation
method and the prorate convention.

General category information includes a description of the category, and default information such as whether
assets in this category are leased or owned, personal or real property, and whether they are capitalized. You
can also specify if assets by default are in physical inventory or are enabled in Oracle Fusion Assets.
 37
Asset categories also contain:

 General Ledger accounts

 Default depreciation rules
 Tax book depreciation rules
 Default subcomponent depreciation rules
 Group asset depreciation rules

General Ledger Accounts

You assign General Ledger accounts to your category during category setup.

Assign the following General Ledger accounts when defining asset categories:

 Asset Cost account: Reconcile asset costs to your general ledger. Assets creates journal entries for this
account to reflect additions, retirements, cost changes, transfers, reclassifications, and capitalizations.
 Asset Clearing account: Reconcile your payables system and Assets for manual asset additions and
cost adjustments. For mass additions, Assets uses the complete account combination that comes over
with a mass addition line to reconcile the asset addition or cost adjustment with your payables
system.
 Depreciation Expense account: Charge depreciation for assets in this category and book to this
account.
 Accumulated Depreciation account: Use this account as the contra account for the asset cost account
for this category.
 Bonus Expense account: Use this account if you have set up bonus rates. If you do not enter a value in
the bonus expense account, it defaults to the depreciation expense account.
 Bonus Reserve account: Use this account to post bonus reserves. If you do not enter a value for the
bonus reserve account, it defaults to the accumulated depreciation account.
 CIP Cost account: Reconcile construction-in-process (CIP) asset costs to your general ledger.
 CIP Clearing account: Use this account if you entered a CIP cost account.
 Unplanned Depreciation Expense account: Charge unplanned depreciation for assets in this category
and book to this account.

Default Depreciation Rules

Set up default depreciation rules 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. Oracle Fusion Assets
defaults the 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.

Set up the following default depreciation rules when defining asset categories:

 Placed in service range: When you add an asset, the depreciation rules default according to the date
placed in service of the asset, the category, and the book. You can specify as many ranges of default
depreciation rules as you need. If you leave the end date blank, Assets uses that set of depreciation
rules indefinitely.
 Depreciate: The Depreciate check box specifies whether assets are normally depreciated in this book
and category.

Note

Expensed assets are not depreciated, even if the Depreciate check box is checked.
 38
 Method: Specifies the default depreciation method for assets in this book and category:
o If you enter a life-based method, you must enter the asset life in years and months. The table-
based method you enter must have the same number of periods as the prorate calendar for
this book.
o If you enter a flat-rate method, you must enter default values for the basic rate and adjusted
rate that you normally use to depreciate assets in this book and category. If you are defining
this category for a tax book, you also can enter a bonus rule.
 Depreciation limit type: Specifies whether to depreciate an asset beyond the recoverable cost in the
years following the useful life of the asset.
 Bonus rule: Specifies the default bonus rule for assets in this book and category. You can use bonus
rules for corporate books and tax books, using all depreciation methods.
 Prorate convention and retirement convention: Specifies the default prorate and retirement
conventions assigned to assets in this book and category.
 Default salvage value: Specifies a default salvage value percentage for this category, book, and range
of dates placed in service. This rule is valid only if you chose to use the default percentage from the
salvage value for this book.

For example, if you want the salvage value to default to 10 percent of the cost, enter 10. When you
perform transactions affecting asset cost, Assets uses this default percentage to calculate the salvage
value according to the following formula:

Salvage Value = Cost * Default Percentage

For tax books, optionally enter either a depreciation expense or cost ceiling.

 Depreciation ceiling: Specifies the depreciation expense limit to be used for assets in this tax book
and category.
 Capital gains threshold: Specifies the minimum time you must hold an asset for Assets to report it as
a capital gain when you retire it.
 Mass property eligible: Specifies whether assets added to this category are eligible to be mass
property assets. A mass property asset contains multiple assets with the same category, book, and
fiscal year combination.

Tax Book Depreciation Rules

The following depreciation rules are specific only to tax books:

 Straight line for retirements: Specifies that a straight-line depreciation method is used to determine
the gain or loss resulting from the retirement of 1250 (real) property.
 Method: Specifies the default depreciation method for assets in tax books.
 Life: Specifies the default number of years and months for assets in tax books.

Location Flexfield: Explained

Oracle Fusion Assets uses the Location flexfield to group and track your assets by physical location. Define the
Location flexfield structure to fit the specific needs of your organization. Choose the number of segments, the
length of each segment, the name, and the order of each segment in your Location flexfield. You must define
a state segment and up to six other location segments.

For example, if you do business internationally (or plan to do so in the future), you may want to track the
country an asset is in. You may also want to include segments for state, city, and site. If you track asset
 39
locations in more detail, for example, if you use barcodes, you can also add segments for the building and
room number.

The location name (all segments concatenated) appears on forms and reports, which display only a limited
number of characters. You may want to abbreviate some location segment values.

Warning

Plan your flexfield carefully. Once you begin entering assets using the flexfield, you cannot change it.

Creating Calendars: Points to Consider

Calendars break down your fiscal year into accounting periods. Define your calendars with as many periods as
necessary for your reporting and tax regulation requirements. Each book you set up requires a depreciation
calendar and a prorate calendar. You can use one calendar for multiple depreciation books and as both the
depreciation and prorate calendar for a book.

Corporate books can share the same calendar. A tax book can have a different calendar than its associated
corporate book. The calendar for a tax book must use the same fiscal year name as the calendar for the
associated tax book.

Important

You must initially set up all calendar periods from the period corresponding to the oldest date placed in
service to the last day of the current fiscal year. You must set up at least one period before the current period.
At the end of each fiscal year, Oracle Fusion Assets automatically sets up the periods for the next fiscal year.

Define calendars according to your needs. For example, to define a 4-4-5 calendar, set up your fiscal years,
depreciation calendar, and prorate calendar with different start and end dates, and fill in the uneven periods.
You can divide annual depreciation proportionately according to the number of days in each period or evenly
in each period.

Before you can set up a calendar, you must have completed setting up the following:

 System controls
 Fiscal years

Depreciation Calendar

The depreciation calendar determines the number of accounting periods in your fiscal year.

Important

If you assign the depreciation calendar to a book from which you create journal entries and transfer it to your
general ledger, you must set up your depreciation calendar with the same period names you set up in your
general ledger.

Prorate Calendar

The prorate calendar determines what rate Assets uses to calculate annual depreciation by mapping each
date to a prorate period, which corresponds to a set of rates in the rate table.
 40
The Depreciation process uses the prorate calendar to determine the prorate period that is used to choose
the depreciation rate.

Prorate and Retirement Conventions: Explained

Oracle Fusion Assets uses prorate and retirement conventions to determine how much depreciation to take in
the first and last year of an asset's life.

To determine depreciation, set up:

 Prorate conventions
 Retirement conventions

Prorate Conventions

Define prorate conventions to determine depreciation in the first and last year of an asset's life, based on
when you place the asset in service. Since assets can be acquired at any time in a given period, prorate
conventions must account for every date in the fiscal year for assets to depreciate properly. The prorate
convention and the date placed in service determine the prorate date. Assets uses the prorate date to
determine the prorate period in your prorate calendar.

Important

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, Assets
automatically sets up your prorate conventions for the next fiscal year.

Assets prorates the depreciation taken for an asset in its first fiscal year of life according to the prorate date.
For example, if you use the half-year prorate convention, the prorate date of all assets using that convention
is simply the midpoint of your fiscal year. So assets acquired in the same fiscal year take the same amount
(half a year's worth) of depreciation in the first year. If however, you use the following month prorate
convention, the prorate date is the beginning of the month following the month placed in service, so the
amount of depreciation taken for assets acquired in the same fiscal year varies according to the month they
were placed in service.

Your reporting authority's depreciation regulations determine the amount of depreciation to take in the
asset's first year of life. For example, some governments require that you prorate depreciation according to
the number of months you hold an asset in its first fiscal year of life. In this case, your prorate convention has
twelve rate periods, one for each month of the year. Other reporting authorities require that you prorate
depreciation according to the number of days that you hold an asset in its first year of life. This means that the
fiscal year depreciation amount would vary depending on the day you added the asset. Thus, your prorate
convention contains 365 prorate periods, one for each day of the year.

Retirement Conventions

If you do business in a country that requires you to use a different prorate convention for retirements than for
additions, set up retirement conventions to determine how much depreciation to take in the last year of life,
based on the retirement date.

If you retire the asset before it is fully reserved, then Assets uses the prorate date from the retirement
convention to determine how much depreciation to take in the asset's last year of life.
 41
Depreciation Methods: Explained

Depreciation methods specify how to allocate the asset cost. Use Oracle Fusion Assets predefined
depreciation methods or define additional depreciation methods to accommodate your financial and
accounting needs.

Consider the following when using or customizing depreciation methods.

Custom Depreciation Methods

Your financial and accounting needs may require that you set up additional depreciation methods other than
the predefined methods Assets includes. For example, once a depreciation method is in use, it cannot be
modified. Therefore, any modification to existing rates within a method requires that you define a new
depreciation method.

Define the following types of depreciation methods:

 Calculated (straight-line): Calculates the annual depreciation rate by dividing the life (in years) into
one. Calculated methods spread the asset value evenly over the life of the asset.
 Table-based: Calculates the annual depreciation using the depreciation method and life to determine
which rate table to use. Then, it uses the prorate period and year of life to determine which of the
rates in the table to use.
 Flat-rate: Calculates the annual depreciation as the depreciation rate multiplied by the recoverable
cost or net book value, multiplied by the fraction of a year the asset was held.

Defining Corporate Books

An asset can belong to any number of tax books, but must belong to only one corporate book. New or existing
assets must first be added to a corporate book and then can be easily copied to all the associated tax books.

You can set up multiple corporate books that create journal entries for different ledgers, or for the same
ledger. In either case, you must run depreciation and create journal entries for each book. For each corporate
book, you can set up multiple tax books and associate all of them to the corporate book.

Defining Tax Books

A tax book must be associated with a corporate book so that the assets and transactions are easily copied
from the corporate book. This helps to maintain multiple accounting and depreciation representations for
assets with minimal effort.

Tax books can have different calendars than their associated corporate books, as long as both calendars uses
the same fiscal year. You can use the tax rules to control what transactions need to be copied from the
corporate book to the tax book.

You can associate the tax book to ledger of its corporate book or to a different ledger. You can also optionally
create journal entries and transfer to your general ledger. The different ledger must be a secondary ledger of
the ledger assigned to the corporate book and the following conditions must be satisfied:

 Enable Oracle Fusion Subledger Accounting and set Use Primary Ledger Amounts to No in the
accounting options of the secondary ledger setup.
 Enable Assets for Subledger Accounting for the secondary ledger.
 42
Note

When setting up a tax book that is linked to a secondary ledger, the chart of accounts and currency must be
the same as the primary ledger that is linked to the corporate book.

Mass Addition in Oracle Fusion

In this post , We will be discuss about Mass Addition Process in Oracle Fusion. Mass Addition in Oracle fusion
helps to add assets and cost adjustments directly into Oracle Assets from invoice information in Oracle
Payables. In Mass addition process in oracle fusion , We do run Create Mass Additions program which sends
valid invoice line distributions and associated discounts from Payables to an interface table in Oracle fusion
fixes Assets module. Then you review them in Oracle Assets and determine whether to create assets from the
lines. In Mass addition , We do transfer the Fixed assets Payables Invoice Lines from AP to FA Module. Here
below we will describe in detail about Mass Addition Process in Oracle Fusion.

Account Type Must Be Asset

You must register the clearing accounts you want to use as Asset accounts in the Segment Values window.
The create mass additions process selects Payables invoice line distributions charged to clearing accounts with
the type of Asset.
Define Valid Clearing Accounts in Oracle Assets
For each asset category in Oracle Assets for which you want to import invoice line distributions from Payables,
define valid asset clearing and construction-in-process clearing accounts. These accounts must be of type
Asset. The create mass additions process only imports lines charged to accounts that are already set up in
your asset categories.

Step 2 :- Enter Invoices in Payables

When you enter a new invoice in Payables, if you want the invoice line to be imported to Oracle Assets, you
must charge the distribution to a clearing account that is already assigned to an asset category. The line
amount can be either positive or negative.

Invoice Description Field

Any additional information you enter in the Description field in the Invoices Summary window in Payables
appears in the Description field in the Mass Additions window in Oracle Assets.
Discount line distributions brought over to Oracle Assets automatically have a description of DISCOUNT.

Units
If you enter a purchase order in Purchasing with multiple units and match it completely to an invoice in
Payables, the Create Mass Additions process uses the number of units specified by the original purchase order
for the mass addition line. Mass addition lines created from invoices entered directly into Payables without
matching to a purchase order default to one unit. You can update the number of units in the
Mass Additions window.
After you approve and post the invoice in Payables, run the Create Mass Additions for Oracle Assets process
to send valid invoice line distributions to Oracle Assets.

Handle Returns
You can easily process and track returns using mass additions. For example, you receive an invoice, post it,
and create an asset using mass additions. You then discover that the asset is defective and you must return it.
First you reverse the invoice in Payables, charging the credit invoice line distribution to the same asset
clearing account. Then you run mass additions to bring over the credit line. Add this line to the existing asset
to bring the asset cost to zero. Now you can retire the asset. The asset does not affect your balance sheet, but
its audit trail remains intact.
 43

Step 3:- Conditions For Asset Invoice Line Distributions To Be Imported

For the mass additions create process to import an invoice line distribution to Oracle Assets, these specific
conditions must be met:

o The line is charged to an account set up as an Asset account

o The account is set up for an existing asset category as either the asset clearing account or the
CIP clearing account

o The Track As Asset check box is checked. (It is automatically checked if the account is an
Asset account)

o The invoice is approved

o The invoice line distribution is posted to Oracle General Ledger from Payables

o The general ledger date on the invoice line distribution is on or before the date you specify for
the create program

o Your installation of Payables must be tied to the same general ledger set of books as the
corporate book for which you want to create mass additions

Step 4:- Conditions For Expensed Invoice Line Distributions To Be Imported

You can create expensed items from expensed invoice line distributions in Oracle Payables. Oracle Assets does
not depreciate or create journal entries for expensed items. You cannot change an expensed item to a
capitalized or CIP asset.
The create mass additions process imports an expensed line only if:

o The invoice line distribution is charged to an Expense account

o Track as Asset is checked

o The invoice is approved

o The invoice line distribution is posted to Oracle General Ledger from Payables

o The general ledger date on the invoice line distribution is on or before the date you specify for
the create program

o Your installation of Payables must be tied to the same general ledger set of books as the
corporate book for which you want to create mass additions

Submit the Mass Additions Process

Navigator > Payables> Invoices
From the Tasks List: Assets > Create Mass Additions
Attention: Verify that you are creating mass additions for the correct corporate book in Oracle Assets,
because you cannot undo the process and resend them to a different book.