AP in Oracle

Oracle Payables business process flow is setup, suppliers, invoices and payments, inquiry and reporting and period-end processing. The Oracles
Payables business flow is setup, supplier entry, invoice entry, payments or disbursements generation, inquiry and reporting and period-end
processing. Each organization must define its specific operating environment.
What are all the Modules Interacting with AP?
Cash Management
Oracle iExpenses
General Ledger
Oracle Assets
Subledger Accounting (R12)
HRMS
Project Accounting
Purchasing/iprocurement
Global Accounting Engine (11i)
Define Payment Terms and their Types
Payment Terms are defined to automatically create payment schedule lines for an invoice. The due date for every invoice shall be determined
by the Payment Term associated with it. Multiple scheduled lines and multiple levels of discount can be defined in payment terms. There is no
limit to number of Payment Terms that can be defined for an organization.
While scheduling, the payment term determines the following with regard to an invoice:
a. Number of installments in which the invoice needs to be settled
b. Amount in each installment
c. Due Date of each installment
d. Discounts available for early payment of each installment.
Navigation: Setup> Invoice> Payment Terms
The due date of every installment is determined by TERMS DATE BASIS. The Terms Date can be any of Invoice Date, Invoice Received Date,
Goods Received Date or Systems Date. In a case where the PO Payment term differs from the Invoice payment term, the payment term which
has better ranking shall take precedence. Changing the Payment Terms in an invoice after the payment lines are scheduled changes the
scheduled payment lines.
What is terms date basis?
Terms Date Basis is to calculate due date.
Due date is calculated 4way. Eg: payment term is 30days

 Due date = Sysdate + 30days

 Due date = Invoice date + 30days
 Due date = Goods Receive Date + 30days
 Due date = Invoice Received date + 30days

How many types of Invoices we can create in Oracle Payables?

A. Standard
B. Debit Memo
C. Credit Memo
D. Pre-Payment
E. Expense Report
F. Withholding Tax Invoice
G. Miscellaneous Invoice
What are the types of Invoice Matching in AP
Invoice matching can be two-way (invoice to PO), three-way (invoice to PO to receipt) and four-way (invoice to PO to receipt to inspection of
goods)
What is the difference between Debit and Credit Memo?
Debit Memo will raise the Customer.
Credit Memo will raise the Vendor.
How many Holds AP have?
System Holds: Tax, Quantity Match, Po amount with Invoice Amount
Manual Holds: Invoice Limit, Hold on Invoice

Can you Release Manual Holds? If Yes, How?

Yes. Holds – Release Holds

How many ways you can pay the Invoice Amount?

Apply in Full
Schedule Payments
Installments
How many key flexfields are there in Payables?
No key flexfields in PO,AP
What are the mandatory setups in AP?
1- Financial Options
2- Define Suppliers
3- Define Payment Terms
4- Define Payment Methods
5- Define Banks and Banks Accounts And Banks Accounts Documents
6- Open AP Accounts Periods
What is pay date basis?
The Pay Date Basis for a supplier determines the pay date for a supplier’s invoices.
• Due
• Discount
What are the Payment Methods available?
• Check – You can pay with a manual payment, a Quick payment, or in a payment batch.
• Clearing – Used for recording invoice payments to internal suppliers.
• Electronic – You generate an electronic payment file that you deliver to your bank to create payments. Use Electronic if the invoice will be
paid using EFT or EDI.
• Wire – Used to manually record a wire transfer of funds between your bank and your supplier’s bank.
What is the difference between quick payment and manual payment?
Quick Payment: It allows you to make a single payment against one or more invoices at a time to one supplier through payables.
Manual Payment: This is the process of entering the check details which has been paid manually in some emergency requirements into the
payment form and selecting the invoices of the concerned supplier and check whether the total of the invoices and the paid amount at the
header are same and save.
What are Aging Periods?
Aging periods are nothing but the periods that we setup to control and maintain the supplier outstanding bill towards the invoice. From this we
can able to study the due date of the supplier form the generation of invoice.
Steps to transfer the data from AP to GL
R12
a) Run Create Accounting with the parameter Transfer to GL as Yes.
b) Run Create Accounting with the parameter Transfer to GL as No and run Tranfer Journal
Entries to GL.
1. Create Accounting
2. Transfer to GL (includes Journal Import)
3. Post to GL
Parameters:
a. Error Only : Yes (Only erred events will be picked up. Try to use No)
b. Report : In Detail (if we make it detail then it will show with the detail output.)
11i
a) If AX is installed
Submit AX Posting Manager.
1. Translate Events
2. Tranfer to GL
3. Journal Import
4. Post to GL.
b) If AX is not installed
1.Payables accounting process
2.Payables transfer to general ledger
3.Journal import
4.Post journals
Oracle Technical AP Tables
What are the Interface Tables in AP?
AP_INVOICES_INTERFACE
AP_INVOICE_LINES_INTERFACE
AP_INTERFACE_CONTROLS
————————————–
AP_SUPPLIERS_INT
AP_SUPPLIER_SITES_INT
AP_SUP_SITE_CONTACT_INT
AP_SUPPLIER_INT_REJECTIONS
What is the API to cancel single AP Invoice?
AP_CANCEL_PKG.AP_CANCEL_SINGLE_INVOICE
What is the API to find invoice status?
AP_INVOICES_PKG.GET_APPROVAL_STATUS
R12 Oracle Financials – Accounts Receivables

April 1, 2014
by iwarelogic
0likes

Audience

 Finance Executives
 Oracle Finance Consultant
 Oracle – End Users

Summary

 This article will help you to understand what are Auto-Invoices

 Flow of Auto-Invoice in Oracle
 At which level Auto-Invoice comes into picture
 What is Auto-Invoice process
 List of Errors may be faced during Auto-Invoice process

What is mean by Auto-Invoices?

On daily basis, there are multiple sales invoices to be created manually, when we need to create multiple invoices in short time then it becomes
difficulty. However Oracle EBS is providing a very strong mechanism to import the receivables transactions (Sales invoice) within oracle (OM)
and from external system.

Oracle has given functionality to convert the sales orders into sales invoices as well as import ready transaction from non oracle system. Using
the details in Sales Order Oracle system uses the interface tables and concurrent program to import the Invoices.
Auto invoice is the interface between Order management and Account Receivables. Auto invoice picks imported data from AR interface tables,
validate and create transactions in AR.

Auto-Invoice Flow in Oracle

Order to Cash Cycle (OM to AR)

 Sales Order can be entered from number of different sources, one can Enter Sales Order manually or import from CRM, EDI or
other systems.
 Credit management also performs a credit check on the customer, According to your credit management set-up.

After credit check depending upon management decision, you Can Book the Sales Order:

 Once the order is booked , then we will check the ATP, place a demand and reserve on-hand Inventory and we will do the Pick
release

Once the order is picked from the stores and released to staging area, then we need to Ship these inventories to Customer’s Ship to Location
through Carrier

Trigger point where Auto-Invoice process starts:

What is Auto-Invoice Process?

Transaction data originates from Oracle applications and legacy systems. When the data is brought into the Interface Tables, errors are tracked
into the Interface Exceptions Table where they can be corrected. Once the lines are corrected, Auto-Invoices created from the corrected lines.
Corrected data is sent to Receivables via the Auto-Invoice program; this includes corrected data for debit memos, credit memos and Invoices.

Interface Table (Auto-Invoice)

The RA_INTERFACE_LINES interface table stores invoice information. You use SQL*Loader to load invoice information into the interface table
for each invoice that you create. When you initiate importing invoices, the Auto-Invoice open interface validates global attribute columns in the
RA_INTERFACE_LINES table before creating invoice and invoice lines in Oracle Receivables.

If you want to see the table details the check the link below:
http://docs.oracle.com/cd/A60725_05/html/comnls/us/jlnew/bup00010.htm

Auto-Invoice Import Process:

Once the data is inserted into the Interface table, we are ready to submit the Auto-Invoice Import Process:
Responsibility: Receivables Manager
Navigation: Interfaces > Auto-Invoice
 1. Submit “AutoInvoice Master Program” program.
2. Once the request is submitted wait for request to be completed successfully.
3. Then go to Transactions> Transactions.
4. Click on to find the customer.
5. Enter the customer & sales Order number & click on Find Button.
6. You can view your transaction online.
7. There is a button circle in Red which is BPA (Bill Presentment Architecture), clicking on which you can see your sales invoice online.

Submit “AutoInvoice Master Program” program:

Check concurrent Request Statu

Transactions > Transactions

Enter the customer and sales Order number and click on Find Button:

You can view your transaction online:

List of Errors may be faced during Auto-Invoice process:

Responsibility: Receivables Manager Navigation: Control > Auto-Invoice > Interface Line

Below mentioned are the few examples of errors in Interface lines for AutoInvoice:
  Invalid Warehouse ID (WAREHOUSE_ID)
 Unable to derive a gl date for your transaction. Please ensure that your transaction is in a gl period which you have defined
 The CUSTOMER_BANK_ACCOUNT_ID column is obsolete. You are not allowed to pass a value to this column.
 The supplied receipt method must be defined and active for the bill-to customer or site.
 When the receipt method is of type Automatic, you must either supply a valid bank account or ensure that a primary bank account
for the currency code of the transaction has been set up for the Bill To customer.
 Please supply both an invoicing rule and an accounting rule for this invoice.
 Please define all periods in which revenue is to be recognized or credited.
 Invalid sales credit type name (SALES_CREDIT_TYPE_NAME)

Account Receivables

1. Invoice
Invoice in AR is used to bill the customer for the goods and the services offered (rendered).

2. Debit Memo
Debit Memos in AR have the similar concept as that of an invoice. A debit memo could be used to invoice the customer for certain
miscellaneous expenses incurred which were not included in the actual invoice for the product/service. Debit memo information is stored in
ra_customer_trx_all, the type of transaction a particular row represents can be found out from the field class of ar_payment_schedules_all by
linking the customer_trx_id field in the two tables.

Debit Memo is not created like credit memo. Debit memo is usually not linked to any other Invoice like credit memos; the whole idea behind
creating a debit memo is to increase the customer outstanding balance.

Why create a debit memo instead of invoice then,

Debit memo would mean that we billed you short in our invoice and with reference our previous transaction we are billing you with
the remaining amount. You can enter the source invoice number in “Reference field”

3. Credit Memo
Credit Memos with negative amount are typically used for crediting the customer’s account with some balance. Credit memo information is
also stored in ra_customer_trx_all

Credit memo can be created in two different ways; the idea behind creating a credit memo is to reduce the customer invoice balance.

Credit Memo can be created in two ways

1. Manually creating a credit memo like any other AR manual invoice.

i. Invoice Class: Credit Memo

ii. Invoice Type: OM Credit Memo, Credit Memo

2. Querying an existing AR Invoice and calling the Credit function from Actions menu

Query the AR Invoice for which you want to create a credit memo

i. Click on “Actions menu”

 ii. Specify the “Reason for Credit Memo”

iii. Enter the Line % for Credit memo (Eg: 25% entered)

iv. Enter the Tax % for Credit memo (Eg: 10% entered)

v. Click the Save button

4. Deposit/Advance Creation Process and Apply to Invoices

Deposits are entered in the AR system to capture the customer advances and apply them to the AR invoices.

APPLY DEPOSITS TO AR INVOICES

Query or Enter the AR Invoice for which you want to apply the deposit

a. Click on Actions menu

b. Click Apply Deposit, Select the Deposit , Click Ok

c. Deposit is applied to the Invoice.

5. Lockbox

Auto Lockbox automatically creates receipts in Receivables using electronic information that your bank provides. Receivables let you specify the
payment method for each Lockbox you define. Payment methods provide the default accounting information for receipts you create through
Auto Lockbox. Receivables display active Lockboxes as list of values choices in the Submit Lockbox Processing window. You can disable a
Lockbox by un-checking the Active box, and then saving your work.

Remittance - Payment

6. Adjustments

An adjustment as the name signifies is used for adjusting some of the amount in invoices. For e.g. if some insignificant amount is outstanding a
particular invoice, it can be adjusted for the purpose of closing the invoice. Adjustment information is stored in the table ar_adjustments_all
and can be linked to ra_customer_trx_all by the field customer_trx_id.

7. Aging buckets

Aging buckets are time periods we 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 past due, 1 to 30 days past due, 31–61 days past due, and 61–91 days past due.
When you create your Collections reports or view your customer accounts, 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. You can define an unlimited number of aging buckets
and lines (time periods) within an aging bucket. However, all Receivables aging reports include a maximum of the first seven time periods for an
aging bucket. If you want to report on additional time periods, you must create custom aging reports. You can also customize the aging buckets
that Receivables provides.

8. Dunning Letters

These are letters that are used to chase up receivables from customers. Receivables let you create dunning letters using two different methods.
You can use one of the ten dunning letters that Receivables provides, or create your own, custom dunning letters in the Dunning Letters
window. The ten dunning letters that Receivables provides include text files that you can customize to suit your dunning needs. Each of these
letters (entitled USER1 – 10) includes two flat files: one for the body of your dunning letter text and the other for footer information. These files
reside in the Receivables $AR_TOP/reports directory. For example, the dunning letter USER1 has a body file of ardl1b.txt and a footer file of
ardl1f.txt. The ’b’ and the ’f’ identify these files as body and footer files, respectively.
 9. Memo Lines

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, charge backs, 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.

AR Technical Process
Start with creating customers in Accounts Receivables. Customers in AR (or Accounts Receivables) can be of two types namely:

1. Person
2. Organization

As is evident from the names a customer type is defined as a Person when the customer is a single person and while creating a customer, which
is organization, the customer type is kept as Organization. From the back-end point of view, a customer can be distinguished as a person or
organization from the field party_type of the table hz_parties which is linked to the table hz_cust_accounts by the field party_id.

The main attributes of a customer are:

1. Customer Name (Stored as party_name in the table hz_parties, first name, middle name and last name are also present for a
customer type as Person)
2. Customer Number (Stored as account_number in the table hz_cust_accounts)
3. Address: There can be multiple addresses defined for any customer and these addresses can be for various purposes for eg. Billing or
Shipping the goods. Also, we can specify if a particular address is active at any point of time or not. The primary flag indicates
whether a particular address is primary or not. Moreover, within an operating unit there can be only one primary bill to address
(active) for any customer. Information regarding all this can be derived from the tables hz_cust_site_uses_all and
hz_cust_acct_sites_all, where the cust_account_id of hz_cust_accounts acts as a foreign key.
Main Tables

hz_parties -> hz_cust_accounts -> hz_cust_acct_sites_all -> hz_cust_site_uses_all

A. Creating Invoice

Transaction lines, tax, Freight and Discount

Now since we are ready with a customer in AR, we need to Invoice him/her for the goods/services rendered. This brings us to the next step of
AR i.e. invoicing the customers.

The main attributes of creating an invoice in AR are:

1. Number (can be entered manually or can be generated automatically based on the source of the invoice).
2. Date
3. Currency
4. Source
5. Class (Invoice)
6. Type (Transaction type name e.g. INV_TRX_TYPE1)
7. Ship to Customer (Ship to address of the customer).
8. Bill to Customer (Customer to be invoiced)
9. Payment Terms (The system generates Due Date based on this).
Each invoice can have multiple lines describing the Item, Quantity, Price of the product/services for which the customer is being invoiced. The
system calculates line Amount based on the Quantity and Price. The sum of line amounts of all the lines in an invoice makes the Invoice
Amount.
After entering the lines for an invoice and saving it, an invoice needs to be completed for it to appear for any payment application. Pressing the
Complete button at the lower most left corner of the transaction screen does this. Any further changes to the invoice can only be done by again
incompleting the invoice.

The invoice information is stored in the table ra_customer_trx_all where the trx_number corresponds to the invoice number entered from the
front end. Once an invoice is completed the record appears in ar_payment_schedules_all table, where the customer_trx_id from
ra_customer_trx_all acts as a foreign key.

B. Creating manual receipts

Now since we have invoiced our customer, we expect to receive payment from the customer against an invoice. This brings us to the next step
of AR, where we have to create receipts in AR for the payment that we received from the customer in form of Check, DD etc.

The main attributes of receipt in AR are: -

1. Receipt Number
2. Currency
3. Net Receipt Amount
4. Receipt Date
5. GL Date
6. Payment Method
7. Transaction Number (to which the payment has to be applied)
C. Receipt application

After entering this information we proceed to applying the receipt to the invoice, here we can change the amount to be applied to the invoice
and also the apply date on which the receipt should be applied. Also we have control over the transaction to which the receipt should be
applied, a receipt can also be kept unapplied or onaccount if so desired. After entering the information in the applications screen, save the
application.

Receipts information is stored in table ar_cash_receipts_all, where receipt_number corresponds to the receipt number entered from the front
end. Each receipt record is also stored in ar_payment_schedules_all where cash_receipt_id from ar_cash_receipts_all acts as a foreign key.

A receipt created in AR can have any one of the following statuses: -

1. Unidentified - When the receipt is created without linking it to customer or invoice. Unidentified receipts could be created when the
source of the incoming payment is unclear.
2. Unapplied – When the payment is linked to a particular customer but has not been applied to any of the transactions.
3. Onaccount - When the amount of the receipt is not applied to any of the transactions and is kept on-account of the customer.

A receipt can also have some amount as applied, some as unapplied and some as on-account or a combination of any two of these.

This completes one basic cycle of AR i.e.

1. Creating a customer
2. Invoicing the customer
3. Applying payment to the invoice and closing it.
Note: While this illustrates the brief functionality of AR, appropriate accounting entries need to be passed by setting the accounts for the
customer.

The application of a receipt to an invoice can take various other forms for e.g.

1. To an invoice of amount $100, a receipt of amount $50 is applied. In this case the invoice remains open with an outstanding amount
of $50 while the receipt amount gets exhausted.
2. A receipt of amount $200 is applied to an invoice of amount $100. In this case the remaining receipt amount i.e. $100 can be kept
unapplied or on-account.

10. Receipt reversal

If you apply a receipt against an invoice whose revenue was automatically deferred upon import, and you later reverse that receipt, then the
impact of the receipt reversal differs depending on the original reason for the revenue deferral:

If revenue on an invoice was deferred due to unmet header level collectability requirements, then Receivables initiates revenue recognition
whenever you apply a receipt to the invoice. If you reverse a previously applied receipt, then Receivables automatically unearns the previously
earned revenue. In some cases, you might apply a receipt against an invoice line, but Receivables cannot recognize revenue for that line due to
unmet line level collectability requirements. Therefore, Receivables leaves the receipt amount as unearned revenue, but flags the amount as
pending revenue recognition at a later date. If you later reverse the receipt, then Receivables reflects the receipt reversal by simply removing
that pending flag from the receipt amount.

If revenue on an invoice was deferred due to unmet line level collectability requirements only, then the reversal of a receipt does not impact
the amount and timing of revenue recognition.

11. Auto invoice open interface

The process for creating invoices in AR manually has been demonstrated in the earlier sections. However, considering the volume of
transactions involved, it is not always feasible to create all the invoices manually. To overcome this AR provides a standard program called
‘Autoinvoice Master Program’. Whenever shipment of certain items happen from the Order Management Module, Workflow background
process is run to populate data into the interface tables provided by AR and then the autoinvoice program can be run to automatically generate
invoices in AR. Optionally, data from some legacy systems (if applicable) can also be populated into the interface tables by building customized
interfaces. The following interface tables need to be populated before running autoinvoice

1. RA_INTERFACE_LINES_ALL
2. RA_INTERFACE_DISTRIBUTIONS_ALL (Optional depending on the specific project requirements)
3. RA_INTERFACE_SALESCREDITS_ALL (Optional depending on the specific project requirements)
Autoinvoice program can also be used for creating debit memos and credit memos apart from invoices. Also, applying a credit memo to invoice
can also be done using autoinvoice

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

Auto-Invoice

Navigation: Receivable >> Interface >> Auto-Invoice

Chargeback Creation Process

Chargeback is postponement of payment date. It can be done only in the receipts workbench. In this process the old invoice is cancelled and a
new transaction is created for the postponed date.

Or, Adjusting remaining balance of the existing debit item to zero, and create a new debit item to bill customer for unpaid balance of original
invoices.

After apply the receipts to any invoice, if you want to re-activate the Invoice by also keeping the Receipt in place. Then click the Chargeback
button.

Adjustment Creation Process

Adjustments are created for Receipts in case of applying some extra value to the transaction, like Bank charges, bad debts etc. Click the
Adjustment button on the Receipt apply window.

Credit Memo Usage

In order Management, sometimes goods may return to supplier because of damage. To refund that material amount, supplier will create Credit
Memo to customer, to credit customer balance.

Auto Invoice

Create invoices from other sources like Order Management, Service Contracts, Projects Billing, etc,. This will be done using Auto Invoice master
program.

Tables in AR

1. The RA_CUSTOMER_TRX_ALL table stores invoice, debit memo, commitment, bills receivable, and credit memo header
information. Each row in this table includes general invoice information such as customer, transaction type, and printing
instructions. One row exists for each invoice, debit memo, commitment, bill receivable, and credit memo that you create
in Oracle Receivables. Invoices, debit memos, credit memos, bills receivable, and commitments are distinguished by their
associated transaction types, which are stored in the RA_CUST_TRX_TYPES_ALLtable.

2. The RA_CUSTOMER_TRX_LINES_ALL table stores information about invoice, debit memo, credit memo, bills receivable,
and commitment lines. For example, an invoice can have one line for Product A and another line for Product B. Each line
requires one row in this table.

3. The RA_CUST_TRX_LINE_GL_DIST_ALL table stores the accounting records for revenue, unearned revenue, and
unbilled receivables for each invoice or credit memo line. Oracle Receivables creates one row for each accounting
distribution, and at least one accounting distribution must exist for each invoice or credit memo line. Each row in this
table includes the General Ledger account and the amount of the accounting entry. The AMOUNT column is required
even though this column is null allowed. Receivable uses this information to post the proper amounts to General Ledger.

4. The RA_CUST_TRX_LINE_SALESREPS_ALL table stores sales credit assignments for invoice lines. If Receivables bases
your invoice distributions on sales credits, a mapping exists between the sales credit assignments in this table with the
RA_CUST_TRX_LINE_GL_DIST_ALL table

5. The RA_CUST_TRX_TYPES_ALL table stores information about each transaction type that is used for invoices,
commitments, bills receivable, and credit memos. Each row includes Auto Accounting information as well as standard
defaults for the invoices that result.

6. AR_PAYMENT_SCHEDULES_ALL holds the payment schedules for the transactions