Payment Term on AR Transactions

This post explains how AutoInvoice populates Payment Term on AR transaction when you are using a Payment Term on Sales Order which is different from the Default Payment Term assigned to Customer. For Example: The Payment Term populated on Sales Order is '30 NET' and  you have changed it to 'CREDIT'.
In this kind of scenario, AutoInvoice program checks following conditions to populate the Payment Term on Transaction as on Sales Order.

1. 'Override Terms' check box should be enabled at Customer account and site levels.

Navigation to check this option at Customer Account Level:
Customers -- Customers -- Search for the customer
Click on Account Details.

'Override Terms' check box should be enabled Under 'Account Profile' Tab.


Navigation to check this option at Customer Address Level:
Customers -- Customers -- Search for the customer
Click on Account Details.
Under Sites Tab, Click on Details for 'Bill To' customer site.

'Override Terms' check box should be enabled Under 'Profile' Tab.By checking the Override Terms check box, you are saying that when a user creates an invoice for this customer, he is allowed to change the Payment Term that defaults in. This feature allows you to create
non-balance forward transactions within a BFB-enabled site.

So, the purpose of Override Terms option is to create non-balance forward transactions for a BFB-enabled site. For BFB enabled customer, override functionality work only with NON-BFB payment Terms .

2. If you have Override Terms check box checked, you still cannot override the payment term if the following conditions are true:

-- The customer you are interfacing data for is a Balance Forward Billing (BFB) enabled customer
-- The payment term you are providing in the interface tables is a BFB term that is different from the default payment term you have set up at the Account or Site profile
That means for a BFB enabled customer, we can not override the Default Payment Term with BFB enabled Payment Term.

If you try to override the default payment term with Non-BFB Payment Term, it will work.

For example:

1.Customer - BFB Enabled
Default Payment Term - 30 NET
Override Payment Term - CREDIT (BFB Enabled)

Payment Term on AR Transaction - 30 NET

2. Customer - BFB Enabled
Default Payment Term - 30 NET
Override Payment Term - IMMEDIATE ( NON-BFB Payment Term)

Payment Term on AR Transaction - IMMEDIATE  Note: Receivables uses the following hierarchy to determine the default payment terms, stopping when one is found:

customer Bill-To site level customer address level
customer level
Transaction Type 

How to Debug the error 'Please complete your tax accounting flexfield'

This post explains the process to debug the error 'Please complete your tax accounting flexfield' which appears in Auto Invoicing process.This approach helps you when the Receivables Auto Accounting rules derive the Tax account segments from E Business Tax setups and you have not much idea on EB Tax setups.

Step1: Get the Customer details from Auto Invoice Import program output or from Sales Order.

Step 2: Check the Auto Accounting setup for Tax Account
Responsibility: Any Receivables responsibility
Navigation: Setup > Transactions > Auto Accounting

Notice that the Account segment which is missing in the error has source as 'Taxes'. It means this segment gets derived from EB Tax.Generally Receivables uses Tax accounts which can be defined at any of the 3 levels shown below.
 1. Tax
2. Tax Jurisdiction
3. Tax Rate

Refer to Metalink Note ID 885225.1 for detailed explanation.


Step3: Create a manual AR invoice for same customer in test instances to know the Tax account details.

Responsibility: Any Receivables responsibility
Navigation: Transactions > Transactions

Enter a manual invoice and open Invoice Distributions Window.

 

 Note the distribution amount. Close this window and click on Tax button to open Tax window.

Based on the Distribution amount noted from Invoice Distributions window, find out the tax details in Tax window.

Step 4: Check whether the tax accounts are defined and/or active currently in EB Tax.

(i) Check at Tax Jurisdiction level:

Responsibility: Tax Manager or any Tax responsibility which has access to setups.

Navigation: Tax Configuration > Tax Jurisdictions

Query the form with Tax Jurisdiction code noted from step 3.

Click on update button to open Tax Jurisdiction window.

Click on Tax Accounts button which is on top right. Check whether Tax accounts are defined and/or active.

(ii) Check at Tax Rate level:
Navigation: Tax Configuration > Tax Rates

Query the form with required details noted from step 3.

Click on update button to open Tax Rates window.

Click on Tax Accounts button and check whether Tax accounts are defined and/or active.

(iii) Check at Tax level:

Navigation: Tax Configuration > Taxes

 Click on update button to open Tax window.

Click on Tax Accounts button which is on top right. Check whether Tax accounts are defined and/or active.

Make sure the tax accounts are defined and are active, then re run Auto Invoice program to process errored records.

Transaction Dates for Auto Invoices in Receivables:

If there is no value provided for Transaction Date, the Autoinvoice program populates the Transaction date for Auto Invoices based several facors such as Derive Date option enabled or Disabled for Transaction Source, few colums from RA_INTERFACE_LINES_ALL, Invoice rules and Accounting Rules defind or not, and the default value provided in the parameters of Autoinvoice program.

Let us see how Autoinvoice program derives Transaction date based on Derive Date option for Transaction source and populted columns from RA_INTERFACE_LINES_ALL such as GL_DATE, SHIP_DATE_ACTUAL and SALES_ORDER_DATE.

Case 1: If the Derive Date option is enabled for Transaction Source, Autoinvoice program uses the following order to create Transaction Date.
1. GL_DATE
2. SHIP_DATE_ACTUAL
3. SALES_ORDER_DATE
4. DEFAULT_DATE (Provided in parameters of Autoinvoice program, which is mandatory)

Case2: If the Derive Date check box is disabled for Transaction Source, Autoinvoice program uses following order to populated Transaction Date.
1. GL_DATE
2. DEFAULT_DATE (Provided in parameters of Autoinvoice program, which is mandatory)

Invoice Grouping Rules in Receivables R12

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

Mandatory Attributes:
AGREEMENT_ID
COMMENTS
CONS_BILLING_NUMBER
CONVERSION_DATE
CONVERSION_RATE
CONVERSION_TYPE
CREDIT_METHOD_FOR_ACCT_RULE
CREDIT_METHOD_FOR_INSTALLMENTS
CURRENCY_CODE
CUSTOMER_BANK_ACCOUNT_ID
CUST_TRX_TYPE_ID
DOCUMENT_NUMBER
DOCUMENT_NUMBER_SEQUENCE_ID
GL_DATE
HEADER_ATTRIBUTE1-15
HEADER_ATTRIBUTE_CATEGORY
HEADER_GDF_ATTRIBUTE1-30
INITIAL_CUSTOMER_TRX_ID
INTERNAL_NOTES
INVOICING_RULE_ID
ORIG_SYSTEM_BILL_ADDRESS_ID
ORIG_SYSTEM_BILL_CONTACT_ID
ORIG_SYSTEM_BILL_CUSTOMER_ID
ORIG_SYSTEM_SOLD_CUSTOMER_ID
ORIG_SYSTEM_BATCH_NAME
PAYMENT_SERVER_ORDER_ID
PAYMENT_SET_ID
PREVIOUS_CUSTOMER_TRX_ID
PRIMARY_SALESREP_ID
PRINTING_OPTION
PURCHASE_ORDER
PURCHASE_ORDER_DATE
PURCHASE_ORDER_REVISION
REASON_CODE
RECEIPT_METHOD_ID
RELATED_CUSTOMER_TRX_ID
SET_OF_BOOKS_ID
TERM_ID
TERRITORY_ID
TRX_DATE
TRX_NUMBER

Optional Attributes:
ACCOUNTING_RULE_DURATION
ACCOUNTING_RULE_ID
ATTRIBUTE1-15
ATTRIBUTE_CATEGORY
INTERFACE_LINE_ATTRIBUTE1-15
INTERFACE_LINE_CONTEXT
INVENTORY_ITEM_ID
REFERENCE_LINE_ID
RULE_START_DATE
SALES_ORDER
SALES_ORDER_DATE
SALES_ORDER_LINE
SALES_ORDER_REVISION
SALES_ORDER_SOURCE
TAX_CODE
TAX_RATE

The following Ship-To fields were mandatory grouping attributes in release 11i, but are optional in release 12 ORIG_SYSTEM_SHIP_CUSTOMER_ID
ORIG_SYSTEM_SHIP_ADDRESS_ID
ORIG_SYSTEM_SHIP_CONTACT_IDThis is because ship to information is now stored at the line level in R12. Therefore a single invoice could have different ship to information for each line.
Autoinvoice program matches all the mandatory parameters and group the transactions into invoices. If all the mandatory parameters are matched for two or more similar transactions, they will fall in a same invoice. If we define any optional attribute, Autoinvoice program matches optional attributes in addition to the mandatory attributes to group the transactions.

For Example: SALES_ORDER is the optional attribute assigned to a grouping rule, there Autoinvoice program matches all mandatory attributes + Sales Order for the transactions. For any two or more transactions, if all the mandatory attributes and Sales Order(optional attribute) are matching, only one invoice will be created for those transactions.

If your Grouping rule doesn't include Sales Order and Ship To fields in Optional attributes, similar sales orders with different ship-to addresses but same bill to will be grouped into one invoice and AR transaction form will not show any value in Ship-To address as it can not determine which ship-to value to be picked from multiple sales orders.

Steps to create a Grouping Rule:

Responsibility: Receivables Manager
Navigation: Setup -> Transactions -> Auto Invoice -> Grouping Rules

Select Line Ordering Rules if you are using any. Optional grouping characteristics are optional. If we are not giving any optional Grouping Characteristics, Autoinvoice will only matches mandatory characteristics. We can assign Optional characteristics for Invoices, Credit Memos and Debit Memos.
 

If  we want to assign optional attributes for all invoices, credit memos and debit memos, First assign optional characteristics for invoice class and the place the cursor on Class Invoices ad use Down Arrow to define  attributes for other classes(Credit Memo and Debit Memo) as well.

Accounting entries in Purchasing, Payables and Receivables

When we enter transactions in Purchasing, the accounting entries will get generated with respect to the following accounts.

1. When Creating a receipt:
Inventory Receiving A/C DR
Accrual Account CR

2. At the time of Receiving transactions:
Asset clearing A/c or Inventory valuation a/c DR
Inventory Receiving A/c CR

3. When a Payables invoice matched with PO:
Accrual A/C DR
Liability A/c

4. when asset addition done:
Asset A/c DR
Asset Clearing A/c CR(Asset item)
           (OR)
expense a/c DR
inventory Valuation A/C(Inventory item)


When we enter transactions in Payables, the accounting entries will get generated with respect to the following accounts.

1. Invoice: When we create accounting for an invoice, the accounting will be generated with respect to the following accounts.

Item Expense A/C      DR
Liability  A/C             CR

2. Payment: There are two stages in which the accounting may generate, based on the accounting option that we setup in Payables.
  
> Direct Pay-No Clearance: In this stage, there will be no clearance process separately and the cash account will get credited directly.

Liability  A/C    DR
Cash  A/C         CR

> Pay and Clear: In this stage, the payment and clearance process will have separate accounting entries.

At the time of Payment:

Liability A/C               DR
Cash Clearing A/C      CR

At the time of Clearance:

Cash Clearing A/C    DR
Cash A/C                  CR

 When we enter transactions in Receivables, the accounting entries will get generated with respect to the following accounts.

1. Accounting for invoice:
Receivables A/C DR
Revenue Account Cr

2. Credit memo:
Revenue Dr
Receivables A/C CR

3. Receipts:
Cash A/C DR
Receivables A/c CR