Document/Presentation about new enhancements on Oracle R12 AR (Accounts Receivables)
TRANSCRIPT
R12 Receivables Enhancement - Overview
Agenda
R12 AR Enhancement Details– Late Charges
– Line Level Cash Application
– Balance Forward Billing
– New Accounting Rules
– Refund Process Automated
– Customer Enhancement
R12 AR Enhancement Details – Late Charges
Presenter
Presentation Notes
Let’s begin by looking at look at why we decided to create the Advanced Global inter-company System in R12 and the business challenges we wanted to resolve.
Late Charges - Market Drives
• Global Compliance – Late charges and Penalty fees based on government requirements
• Improve Collections – Multi-Format Later Charge support
– Flexible, multi-level Late Charge Policy definitions and assessments
Presenter
Presentation Notes
Benefits include: Assessment of late charges and fees are based on local requirements to provide global compliance. Tailor the setup of your late charges policies to align with the paying history and practices of your customers, thereby improving collections effectiveness In release 11i, setup and maintenance was managed in multiple applications: Core Receivables and localizations for Scandinavia(JG) and Brazil (JL). This meant: Separate Setup for Globalizations Separate Storage of Common Attributes in each product’s datamodel Separate Reporting and Inquiry for each product This functionality is now consolidated in core Receivables.
• Preview Mode & Corrections• Expanded assessment and calculation capabilities
– More control over the Assessment• System Options• Profile Class / Customer Account Profile• Transaction Type
– Tiered charge schedules • Rates dependent on length of time overdue• Effective dates for charge schedule changes
– Calculation performed independent of Dunning and Statement processing
• Integration with Balance Forward Billing• Average Daily Balance calculation
• Leverages MOAC
Presenter
Presentation Notes
You can now manage your late charges policy with: Expanded assessment and calculation capabilities Addition of Late Payment charges calculation – ability to assess prorated late charges based on when payment is received Addition of Penalty charge calculation - automatically apply penalty fees on top of finance charges New setup to support tiered charges – different rates are charged depending on how overdue an item is Integration with Balance Forward Billing – Average Daily Balance calculation Type of late charge transaction: Adjustment, Interest Invoie, Debit Memo Centralized setup and maintenance of late charge policies – Localizations no longer, data stored in GFF migrated to named fields Calculation performed independent of Dunning and Statement processing
Setting up Late Charges
• Define your organization's late charge policy:Enable the check box “Assess Late Charges” at the System Options Level.
• Set up your late charge documents:Record the Late Charges as one of the three document types:
1.Interest Invoice
2.Debit Memo
3. Adjustment
For points 1 and 2 define Transaction Source and Transaction Type and for the point 3 define a receivable activity of the type “Finance Charges”.
• Attach the Transaction Source, Transaction Type and Activity at the System Options Level as shown in the next slide.
Late Charges – System Options
Late Charges – Transaction Type
Presenter
Presentation Notes
We can exclude transactions of a particular Transaction Type from being considered for assessing the Late Charges by checking the check box at the Transaction Type “Exclude from Late Charges Calculation”.
Late Charges – Individual Transaction
Presenter
Presentation Notes
We can also exclude the individual transactions from being considered for Late Charges by checking the Exclude from Late charges check box in the More tab of the Transaction screen.
• Define Payment Terms to assess the due date for the transactions.
• Define Interest Tiers for charging the customers based on the range of late days.
• Define a Charge schedule and assign amounts or percentages to interest tiers in the Charge Schedules window.
Define Late Charges Policy - Customer Profile Class
• Attach the charge Schedule to the Profile Class of the Customer in the “Profile Amounts” tab.
Attach the Profile Class to the Customer
Late Charges – Process Flow
ChangesNeeded?
Automated process
PROCESS
Modify ChargesCorrect Errors
Run Late ChargesCalculationProgram
Dunning Letter
Statements
Interest Invoice
PreviewCharges?
Review Late Charges Batch
No = Final Mode
Yes = Draft Mode
Yes
No
Generate Charges
Invoice API
AdjustmentAPI
Presenter
Presentation Notes
The process flow for deriving charges begins by running the Generate Late Charges program, which looks to the enterprise’s Late Charges Policy to determine what items to include, and what types of charges to generate. Charges are created in a late charge batch. To preview the batch and makes changes, run the program in draft mode. Then go to Late Charges Batch maintenance form and query your batch. Review the batch and determine if any changes need to be made. The batch name is a system derived sequence. Make changes in the form, or modify setup. Changes made directly to the individual charges may include deleting specific charges or modifying the currency exchange rate type for charges of type nterest invoice and debit memo. Once changes are made or errors are corrected, submit your changes for final calculation If you do not need to preview and modify charges, you can run the program in Final mode and the charges are automatically generated. For interest invoice or debit memo, the charges are created via the Invoice API For interest and penalty adjustments, the charges are created via the Adjustment API. Once created, the charges are available to be displayed on documents such as the interest invoice, customer Statements, and Dunning Letters.
Charge Interest Days
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Presentation Notes
After submitting the “Generate Late Charges” program, go to Batch maintenance form, query the batch, Press view document to view the customers for which Late charges have been calculated. Then click on the Lines tab to see the details.
Late Charges : View Interest Invoices
11
Presenter
Presentation Notes
Here we are seeing the lines on a interest invoice Navigation: Transactions : Transactions To see the items for which an interest invoice was created, query up the interest invoice and navigate to lines. Each line will include information about the overdue invoice in the line description. Charges generated as debit memos can be viewed the same way. Charges generated as adjustments can be viewed as activity against overdue invoices. This is the same as in 11i.
Late Charge 11i V/S R12
• Finance Charges
• No Preview / Correction possibility
• Setups and calculation at multiple products and localizations
• Tiered of Charges not possible
• Fixed Amount (Penalty / Admin Charges) not supported
• Not possible to exclude of Disputed Amounts
• No Flexibility for Mode of Charging
• Late Charges
• Allows Preview / Correction possibility
• Centralized Late Charges Setup
• Allows charging Tiered looking at how old the amount due is!
• Fixed Amount charge is supported
• Exclusion of Disputed Amounts supported OOTB
• Flexible Mode of Charging
• Interest Invoice
• Debit Memo
• Adjustment
11i R12
R12 AR Enhancement Details Line Level Cash Application
• Vision Computers sends a bill to a customer
• He wants to dispute the charges for “Monitor“ at the same time pays the remaining amount for the other lines ($410)
• Manual Receipt Application in Detail– Apply specific lines,
– Group of lines
– Type (Line, Tax, Freight)
Click Apply in Detail for line level applications
Select the invoice to Apply
Line Level Cash Application - Apply at transaction or detail level
Presenter
Presentation Notes
Navigation: Receipts : Receipts : Apply : Apply in Detail After choosing the invoice to apply, click the Apply in Detail button to make line level applications If an upgraded invoice has activity against it, it cannot be selected for LLCA (activity is considered: credit memo, deposit, guarantee, adjustment; it must be applied using the standard invoice level application). And error message will appear indicating that activity exists.This happens because line level information was not stored prior to R12.0 The Apply in Detail button is enabled only for invoices, debit memos and chargebacks with line details. It is disabled for all the other transactions, including invoices with installments.
“Select All Lines” for all lines to display
Select line and enter amounts
Expand Tree to apply specific Lines
Discounts calculate automatically
Line Level Cash Application - Flexible Line Level Application
Presenter
Presentation Notes
Navigation: Receipts : Apply : Apply in Detail : Transactions : All Lines By expanding the Tree and selecting All Lines, you can apply the receipt directly to specified lines Select the specific line in the Apply To field and then enter amounts Tax is calculated automatically. If tax was not paid, or paid for a different amount, enter the new amount. Allocated Receipt amount allows for application of cross currency and non-functional currency application. Discounts are viewed in the Row Details region Earned Discounts are calculated automatically and defaulted Unearned discounts will need to be entered manually If you need to apply the receipt to most lines of the invoice, use Select All Lines button. All lines will appear as selected and then you just deselect the lines that should be excluded.
R12 AR Enhancement DetailsBalance Forward Billing
Presenter
Presentation Notes
Let’s begin by looking at look at why we decided to create the Advanced Global inter-company System in R12 and the business challenges we wanted to resolve.
Balance Forward Billing - Market Drivers
• Enhanced consolidated billing for those industries that bill their customers on a regular, cyclical basis.
• Enable billing policies consistent with organizational needs
• Improved communication with Customer
• Enhanced viewing and printing of bills
• Better integration with feeder systems
• Fewer processes to manage
• Synchronize bills with Aging
Balance Forward Billing - Steps Required
• Defining Billing Cycle – There are 3 Types of Billing Cycle as shown in the billing slides.
• Daily Cycle:
• Weekly Cycle:
Presenter
Presentation Notes
Balance Forward Billing replaces Consolidated Billing feature with enhancements to bill creation and presentation. Billing Cycles Billing cycles are no longer just monthly. Can be: daily, weekly, monthly, bi-monthly, quarterly, and annual billings Bill on specific days of the month, or even multiple days like “every 15th and last day of month”. User can also elect to bill on a specific day of the week, such as every Friday. Choose to exclude weekends, so billing dates only fall on workdays For importing transactions from legacy system with specific dates, there is a seeded External Billing Cycle Consolidate invoices at different customer levels Activity can be consolidated across account sites, or by each billing site. This means one bill can be sent for each billing location, or a single bill can be sent for all invoices for that customer account within an organization Not all billing sites must consolidate their invoices. If a site prefers to receive individual invoices, that site can be excluded from balance forward billing even if BFB is set at Account Level. specific invoices can be excluded from the Balance Forward Bill, by simply using a different payment term. Enhanced viewing and printing: Balance Forward Billing integrates with Oracle Bill Presentment Architecture, which provides more appealing layouts that can be easily modified. Two templates are delivered for summary or detail formats that tie to the customer profile, but can be linked to other attributes of the customer.
• Monthly Cycle:
Presenter
Presentation Notes
11i: Proxima Payment Term: If this payment term uses proxima terms, enter the day to start the new billing cycle for the next month in the Day of Month field (Cutoff Day region). Customers who have invoices that fall due before the cutoff day of the invoice payment terms receive invoices on the day that you specify in the Due: Day of Month field for the current month. Customers who have invoices with payment terms that fall due after the terms¿ cutoff day receive invoices on the day that you specify in the Due: Day of Month field for the next month of each of these terms. To create a payment term to use with consolidated billing invoices that includes all transactions created during the month you specify, check the Last Day of Month check box.
• Monthly Cycle:
• Assigning the Billing cycle to Payment Term:
Enhanced Feature in R12
Balance Forward Billing - External Billing Cycle
• Billing can be done in legacy system, without predefined cycles, and imported
– Bill date cannot be determined by payment term with external cycle
– So, billing date must populated because it is required for due date calculation
Balance Forward Billing – Steps required
– Assigning the Payment Term to the Customer Profile Class and attaching the profile class to the Customer.
Attaching the Payment Term
Presenter
Presentation Notes
Navigation: Customer : Profile Classes The customer profile class can be updated with the Balance Forward Billing information, which can then default to the profile on the customer account record. This region replaces the Consolidated Bill region in 11i. Enable Checkbox must be checked to select a payment term with a Balance Forward Billing cycle. Balance Forward Bills can be created in summary or detail format: summary is at invoice total level; detail is at invoice line level. Imported is used for the Imported Billing Number feature that was introduced in 11i. NOTE: The default print formats use this customer profile. If you do not want to use this option, you can create rules in BPA to ignore this value. When creating a rule, use the attribute “Display Format” to look at the value in this field. See the BPA TOI for information about creating rules and print formats. The Payment Term field will allow you to choose either a Balance Forward if the Enabled checkbox is selected, or a Non-balance forward term if the Enable checkbox is not selected. The Override Terms checkbox means that the the default Balance Forward bill payment term on an invoice can be changed. The user can only select a non-balance forward payment term if they are overriding the default. Changing the payment term on the invoice means that the user does not want this invoice to be included on the bill. Note: this is different functionality then 11i Consolidated billing which included all in voices on the bill regardless of the payment term assigned if consolidated billing was enabled.
• Payment Term defaults– from Site profile if Bill Level =
Site
– from Account profile if Bill Level = Account
• Billing Date – derived from transaction date
and billing cycle
• Due Date – derived from billing date and
payment term
• Optionally select – non-Balance Forward term if
Override is allowed
Balance Forward Billing -Transaction Processing
Presenter
Presentation Notes
Navigation: Transactions : Transactions When creating transactions, the payment terms that default to the invoice will determine whether that invoice is included on a bill. If Balance Forward Billing is enabled, the Payment Term defaults depending on Bill Level value of the customer account profile Defaults from Site profile if Bill Level = Site Defaults from Account profile if Bill Level = Account Billing Date is derived from the transaction date and the billing cycle. It populates with next scheduled bill date. Due Date is derived from the billing date and payment term. Non-Balance Forward invoices due date derives from the transaction date and payment term. If the invoice should not be included in a Balance Forward Bill, you can change the defaulted payment term on the invoice to any non-Balance Forward term as long as the customer profile Allow Override of Terms = Yes
Balance Forward Billing - Derivation of Date
Txn. Date
15-May-2005
Billing Date
25-May-2005
Due Date
24-Jun-2006
Customer
CustomerSite
Customer
BFB Cycle
Payment Term
Due Date
25th30 Days
BFB Cycle
---------------------------------
Balance Forward Billing Process Overview
Manually Create Transactions
Import Transactions
Automated process
PROCESS
Run GenerateBalance ForwardBill Program
Run ConfirmBalance ForwardBills Program
Run BPABalance ForwardPrint Program
Draft or Final
Accept or Reject
Presenter
Presentation Notes
The process executes as follows: Enter transactions or import them using AutoInvoice or Transaction API Run the Generate Balance Forward Bill Program to create the bills as either draft or final, or set it up to run automatically The generate program will kick off the print program in BPA to create the bills. If the process is mature, you may elect to run Generate Balance Forward Bill Program in the create Final Bill format. In which case, the BPA program will create final bills. If you create bills in draft mode, you can either reject or accept the bills using the Confirm Balance Forward Bills Program. In Draft format, they can be reviewed before sending. Reasons to Reject the bill: need to change billing date on specific invoices to be on later bill. Need to exclude specific invoices by changing the payment term. You can do this if the invoice can be incomplete. You can choose to reprint draft bills via the BPA Print Program by selecting the concurrent request ID.
Balance Forward BillingUtilize BPA – Seeded Summary Bill Format
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Presentation Notes
This is a screenshot of Balance Forward Bill in Summary Format presented by BPA. It has links to drill down to transaction details for each transaction on the bill.
Balance Forward Billing Utilize BPA – Seeded Detailed Bill Format
Presenter
Presentation Notes
This is a screenshot of Balance Forward Bill in Detail Format presented by BPA. It displays the details for each transaction on the bill.
R12 AR Enhancement DetailsDaily Revenue Recognition
Daily Revenue Recognition--Market Drivers
• Distribute revenue in a more granular fashion including full and partial periods.
• Accurate revenue distribution for service and subscription industries – Accuracy to the number of days in the accounting period
– Support of partial period revenue recognition
• Compliance– Fulfill stringent accounting standards introduced by the US GAAP and
SOX for recognizing revenue Enhanced Revenue Contingencies
Daily Revenue Recognition -New Features
• Two new types of Accounting Rules Introduced– Daily Revenue Rates, All Periods
– Daily Revenue Rates, Fully Period
• Allows accurate calculation of Periodic Revenue based on just “Start” and “End” dates.
Presenter
Presentation Notes
Daily Rate on all periods: Netscout Red Hat Oracle Even distribution on full periods: Novell Unisys NCR Fixed ScheduleAll periods have fixed duration and fixed percentage. Variable ScheduleFirst period is optionally fixed, remaining periods are prorated. Daily Revenue Rate, All PeriodsAll periods use daily revenue rate. Daily Revenue Rate, Partial PeriodsPartial periods use daily revenue rate, full periods are prorated.
Daily Revenue Recognition - Example
A sample contract valid from 14th January to 15th April
• How do we calculate daily revenue rate?
Total RevenueDaily Rate = ------------------------------------------------------
Apr 17 Month of Apr 100 45.92 45.92 14May 17 Month of May 100 101.68 100.32 31June 17 Month of Jun 100 98.40 100.32 30July 17 Month of July 100 101.68 100.32 31Aug 17 Month of Aug 100 101.68 100.32 31Sept 17 Month of Sept 100 98.40 100.32 30Oct 16 Month of Oct ----- 52.24 52.48 16
600 600 600 183
New R12 daily revenue types
Select a rule type
From R11i rule types
Daily Revenue Recognition - Set Up Accounting Rule
Presenter
Presentation Notes
Accounting Rules form: Accounting rule type: 2 new accounting rule types have been added for Daily Revenue: Daily Revenue Rate, All Periods Daily Revenue Rate, Partial Periods 2 existing accounting rule types have been renamed to: Fixed Schedule Previously named Fixed Duration Variable Schedule Previously named Variable Duration Note: The difference between the 2 choices for Daily Revenue is on the revenue distribution for the middle complete periods. For “Daily Revenue Rate, All Periods”, the revenue amount is prorated based on the number of days in each period. The revenue amount may varies for each period. For “Daily Revenue Rate, Partial Periods”, the revenue is equally distributed for the full periods. You see more of even distribution with this choice. When a daily revenue rate rule type is selected, the following are disabled: Schedule region ‘Number of Duration’ field in the header region Attention: Rounding catch up is done at the last period.
Enter rule end date
Enter Daily Revenue rule Enter rule end
date
Daily Revenue Recognition - Create Invoice Lines
Presenter
Presentation Notes
Create invoice line: Import invoice via AutoInvoice or Invoice API Manual invoice via Transaction Workbench. For Daily Revenue rule, you must enter Rule End Date.
R12 AR EnhancementsRefund Process Automated
Automated Refund
• Automate refund process for non-credit card transactions• Leverage AP workflow approval• AP transacts refunds via Oracle Payments• Credit Memo based Refund Automation:
– Create credit memos via Auto Invoice– Refunds are automated– View refund status in AP workbench
• Manual:– Manually refund from Receipts – Application window– Refunds are automated– View refund status in AP workbench
Presenter
Presentation Notes
Prior to R12, there are a number of steps involved to do check refunds. Below is an example for creating a check refund when Allow Over-application is selected. Create Credit Memo. Un-apply the receipt by the credit memo total. Create a Debit Memo (for the amount of the credit memo). Apply debit memo to receipt. This causes the unapplied balance on the Receipt to go to zero. Generate a check from Oracle Payables to Customer. In R12, we have automated the refund process for non-credit card transactions. Receivables submits the refund request to AP, and in turn AP transacts refunds via Oracle Payments. Note: automated credit card refunds are available in R11i as well as in R12.
Automated Refund Set up
Receipt Handling = Refund
Transaction Sources Setup
Presenter
Presentation Notes
Prior to R12, there are a number of steps involved to do check refunds. Below is an example for creating a check refund when Allow Over-application is selected. Create Credit Memo. Un-apply the receipt by the credit memo total. Create a Debit Memo (for the amount of the credit memo). Apply debit memo to receipt. This causes the unapplied balance on the Receipt to go to zero. Generate a check from Oracle Payables to Customer. In R12, we have automated the refund process for non-credit card transactions. Receivables submits the refund request to AP, and in turn AP transacts refunds via Oracle Payments. Note: automated credit card refunds are available in R11i as well as in R12.
Automated Refund Set up
Automated Refund Process Example
• A simple process is demonstrated where we have receipt of 1000 USD out of which 600 USD has been applied to an Invoice and the balance 400 USD has been refunded on account of return of goods by the customer.
Refund Attributes Tab
Automated Refund Process Example
• In the Apply to region of the receipt select the activity “Refund”. A new tab Refund Attribute will come up where you enter the refund disbursement details Payables requires for example customer, Payment Method and indicate where to send the refund.
Refund Status Tab
Automated Refund Process Example
When you save the receipt, Receivables sends a refund request to Payables, which
uses its workflow approval process to validate the information before sending apayment request to Payments. After you create a refund, you can view the refundstatus by selecting Refund Status in the Applications window.
Automated Refund Process Example
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Presentation Notes
Invoice created in AP for the refund request from AR.
Automated Refund Process Example
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Presentation Notes
Payment made can be viewed here.
The standard customer form has been replaced with a new HTML form for creation and updates to customer information.
• Addresses usability concerns
• Backwards compatible with standard customer form
• Includes personalization features
Customer Enhancements
Presenter
Presentation Notes
The Customer Standard form that existed in 11i has been replaced with a brand new HTML user interface The new user interface: addresses many of the concerns we have received over the years about the form is fully backwards compatible with the form includes more features than the form
Customer Enhancements
Presenter
Presentation Notes
The venerable Customer Standard form that existed in 11i has been replaced with a brand new HTML User Interface The new HTML User Interface: Addresses many of the usability concerns we have received over the years about the Customer Standard form Is fully backwards compatible with the Customer Standard form Includes more features than the form. All initiatives that we are introducing in this release, such as the EBusiness Tax product, our new Payments architecture and our new Late Charges functionality have been included in the new pages. The new pages are also more flexible than the Customer Standard form since end users or system administrators are able to personalize the pages (hide/show fields, rename fields and so on).
