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Oracle Receivables
AutoAccounting White Paper
Overview.................................................................................................................................. 1
Autoaccounting Setup..................................................................................................... 2
Types Of Accounts used in Autoaccounting ............................................................... 3
Autoaccounting Segments – Tables or Constants ....................................................... 4
Example............................................................................................................................. 6
Freight Processing ........................................................................................................... 7
Credit Memo Processing................................................................................................. 8
Validation of Accounts.................................................................................................... 9
Troubleshooting............................................................................................................. 10
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Overview
This document will discuss the setup of Autoaccounting and how the various General
Ledger accounts are derived in Receivables.
Autoaccounting is used by Oracle Receivables to derive the segment values for the GL
accounts. Autoaccounting is called when creating transactions manually or through
Autoinvoice. It is used for Invoices, Credit Memos and Debit Memos. Autoaccounting is
the process that builds the full accounting flexfield account for the various GL accounts
used in Receivables.
Types of Accounts:
· Receivable
· Revenue
· Freight
· Tax
· Unbilled Receivable
· Unearned Revenue
· Autoinvoice Clearing
Types of Tables :
· Transaction Type
· Salesreps
· Standard lines
· Taxes
The key to deriving full account combinations is to ensure the tables you base your
segments on contain GL accounts and that the account combination that Autoaccounting
derives will pass validation.
1
Autoaccounting Setup
The number of segments you define in your GL Accounting Flexfield structure will
match the number of segments that you define in your Autoaccounting setup. The
number of segments is based on your specific business needs and must be determined at
setup time. Once you set up your Accounting Flexfield structure, the number of segments
cannot be changed. You might want to set up an extra segment for future use and base it
on a constant.
In the Autoaccounting setup, you may change the values the segments are based on after
implementation. The setup can be changed to look at a different table or to be a constant.
But keep in mind this will not change any of your existing transactions unless you
manually make a change to the transactions via the form.
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Types Of Accounts used in Autoaccounting
Receivables uses the following types of accounts when creating transactions:
Receivable Account – This account is used to specify your receivable amounts. This
account cannot be based on your inventory item or tax code.
Revenue Account – This account is used to specify your revenue amounts. This account
cannot be based on tax code.
Freight – This account is used to specify your freight amounts. This account cannot be
based on tax code.
Note: If you choose standard item, the Revenue account that you specify in the setup
window is used. Also, if you choose standard item you will not be able to import
invoices with header level freight though Autoinvoice.
Tax – This account is used to specify how you want Receivables to determine the account
for your sales tax lines.
Unbilled Receivable – This account is used for transactions with invoice and accounting
rules. If your accounting rule recognized revenue before your invoicing rule bills it, this
amount will be posted to your unbilled receivable account. This account cannot be based
on tax code.
Unearned Revenue – This account is used for transactions with invoice and accounting
rules. If your accounting rule recognized revenue after your invoicing rule bills it, this
amount will be posted to your unearned revenue account. This account cannot be based
on tax code.
Autoinvoice Clearing – This account is used to specify the clearing account for your
imported transactions. This was formerly referred to as the suspense account. Oracle
Receivables uses this clearing account to hold any difference between the specified
revenue amount and the selling price times the quantity for imported invoice lines.
Oracle Receivables will use this feature if you have enabled this for the batch source of
your imported transactions.
To set this up for the batch source,
Menu: Setup > Transactions > Sources > Autoinvoice Options Tab.
You will see a check box called Create Clearing.
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Autoaccounting Segments – Tables or Constants
Autoaccounting will build a code combination for each account on your transaction
based on your autoaccounting setup. How your GL accounts are created in Receivables
can be based on either tables or constants.
For example, to build your revenue account, you might have setup your Accounting
Flexfield to contain 3 segments. You would then base each of the 3 segments on either a
table or constant. You could use a constant for the company segment, default the account
segment from the invoice transaction type and default the department segment fro the
item being invoiced.
The following explains how the different values are derived for an account segment:
· Transaction Types - This will take the account segment from the Transaction
type that is populated on the Transaction. When you choose this table, make
sure to enter the corresponding accounts for you transaction types.
To set these up Menu: Setup > Transactions > Transaction Types and enter
valid accounts for Receivable, Revenue, Freight, Tax, Unbilled Receivable and
Unearned Revenue.
· Salesreps – This will take the account segment from the Salesperson attached to
your transaction. When you choose this table, make sure to enter the
corresponding revenue and receivable accounts in the Salesperson form.
To set these up Menu: Setup > Transactions > Salespersons. When you query
the Salesperson, the accounts can be seen in the ‘Receivables’ tab.
When you create your transaction if you do not have a salesperson attached your
autoaccounting will fail if your autoaccounting is based on salesperson.
Note: A Salesperson will only have a receivable and revenue accounts.
If you choose Salesperson for your Autoinvoice Clearing, Tax or Revenue
accounts, then autoaccounting will use the Revenue account associated with the
Salesperson.
If you choose Salesperson for your Unbilled Receivable account, then
autoaccounting will use the Receivable account associated with the Salesperson.
· Standard Lines – This will take the account segment from the inventory item or
the standard memo line item. This account cannot be used for the Receivable
account. For the other accounts the revenue account of the inventory item or
sales account from the standard memo line will be used for the account segment.
To set up the sales accounts for an inventory item,
Menu: Setup > Transactions > Items > Define Items > Invoicing Tab.
To set up the revenue accounts for the standard memo line,
Menu: Setup > Transactions > Memo Lines
Note: For the unbilled receivable account and unearned revenue accounts, the
revenue account that is setup in your system options will be used for standard
lines.
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· Taxes – This will take the account segment from the tax code or in the case of a
location based tax code, the tax location.
If a tax code is used on a Transaction, the account segment will be derived from
the account that you enter on the tax code form.
Menu: Setup > Tax > Codes > More Tab.
If a location based tax code is used on a Transaction, the account segment will be
derived from the account on the Tax Location and Rates form.
Menu: Setup > Tax > Locations.
The ship-to address of the transaction will be used to determine which location
to pull the tax account from the Tax Location and Rates window. The tax account
flexfield qualifier is used to determine which ship-to location (state, county or
city) to pull the segment from.
· Bill-to Site - This will take the account segment from the transactions bill-to
customer location. Make sure the bill-to location for the customer has accounts
define. Navigate: Customers > Standard >
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Example
Menu: Setup > Financials > Flexfields > Key > Segments.
Query on Flexfield Title = Accounting Flexfield
For the Company Segment , enter a Constant value of 01. For the Account Segment enter
the table name of Transaction Type and for the Department Segment enter the table name
of Standard Lines.
Note: The size of the segment will be determined by the maximum size that you set up in
the value set for the segment when you define your Accounting Flexfield. In this case
let’s assume that it is a maximum size of 2.
Autoaccounting would build the following account for revenue on your invoice:
00-04-08.
The account or code combination of 00-04-06 must be valid in GL and must be enabled
and postable.
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Freight Processing
Freight and Standard Lines:
When freight autoaccounting is based on standard lines it will only use this when freight
is entered against a line. An error will be raised if freight is entered at the header level.
When you setup freight's autoaccounting as standard lines it builds the freight revenue
account from the item on the line. If the freight is entered at the header level
autoaccounting will not be able to build the account since it is not attached to a line. You
will have to manually enter the account or change your autoaccounting setup for freight.
If you are using autoinvoice and you are importing freight at the header level then you
cannot setup your autoaccounting to derive the freight based on standard lines.
If the transaction has a line type of “LINE” and the inventory item of type freight “FRT”,
then Autoaccounting will use the accounts from the freight type of autoaccounting rather
than the revenue account.
When you base your autoaccounting on Standard Lines for the Revenue account,
normally the revenue account is pulled from the sales account of the item. However
when this is freight the account is pulled from the Freight account that you setup in
autoaccounting.
Profile Options
If you are using Oracle Order Management, this profile option determines how freight
amounts are passed to Receivables during AutoInvoice. If this option is Yes, a line item of
type 'LINE' will be created for the freight amount. When Receivables prints the invoice,
the freight amount will be printed last with the invoice lines under the heading 'Freight.'
Receivables will use the Freight AutoAccounting rule to determine the freight amount. If
this option is No, Receivables will create a line item on the invoice using the inventory
item name.
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Credit Memo Processing
There are two types of credit memos, Applied Credit Memos and On-Account Credit
Memos.
For Credit Memos applied to an invoice, the autoaccounting depends on the profile
option “AR: Use Invoice Accounting for Credit Memos”.
If you set this profile to YES, Receivables will credit the accounts of the original
transaction. If this profile is set to NO, Receivables will use Autoaccounting to determine
the accounts for the credit memo.
When you create an on-account credit memo, the accounts will be determined by
autoaccounting, but they may be manually overridden in the form.
It would now use the receivable account from the invoice. It would debit the receivables
account using the on-account credit memo receivable account and credit the receivable
account that is on the invoice.
Credit Memos with No Line Items and Autoaccounting is Based on Standard Lines:
If your autoaccounting revenue segment is based on standard lines and you do not enter
an item, this will cause an error message when you create a credit memo.
If you enter a manual credit memo without any items, you just enter adescription, unit
price and quantity. There is no way for the system to determine these segments from the
inventory item table since there are no items.
The system cannot just default these segments to zero, since this can result in the wrong
accounts being generated. The error message Please correct revenue account assignment
is a warning to the user so that the revenue account can be correctly entered at time of
input.
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Validation of Accounts
Once the code combination is built based on your autoaccounting setup, it is then
validated to ensure it is a valid code combination. Combinations are all your segments
combined together, such as Company, Account and Department.
Autoaccounting will check the code combination and ensure that it is a valid
combination, has not been disabled and is within the start and end dates if any. This
combination must exist in GL and be enabled and postable.
The code combination is stored internally as a CCID on the Receivable and GL tables.
The General Ledger account number that is displayed in the forms or on the reports is
the exploded value from the Key Accounting flexfield. This value is stored in the tables
as the code_combination_id from the GL_CODE_COMBINATIONS table.
You have to set up the code combinations in GL first, unless you are using dynamic
insertion. Menu: Setup > GL Account Combinations
In order to use the account in Receivables you would need to check the enabled box and
the allow posting box.
In this case, you would set up validation rules. These validation rules such as cross
validation and security must be passed in order for the code combination to be valid.
Dynamic insertion only refers to the dynamic creation of valid combinations of values; it
must still be a valid combination in GL.
Dynamic insertion is an Accounting Flexfield feature where by you can allow users to
create new combinations upon entering a flexfield combination. For every new flexfield
combination entered, a unique code combination id is also created which is used to enter
and retrieve data. You may enable or disable this Accounting Flexfield feature at any
time, on the Accounting Flexfield form.
Menu: Setup > Financials > Flexfields > Key > Segments.
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Troubleshooting
Please correct the account assignment or Invalid account assignment messages:
When Autoinvoice or manual transactions give these errors, it will show the account
with the missing segment(s) either on the Autoinvoice Validation Report or in the form.
If it is based on Salesperson:
Menu: Setup > Transactions > Salespersons, verify that all accounts are populated.
If it is based on Taxes:
Menu: Setup > Tax > Codes and verify that account is populated in 'Tax' column under
the 'More' Tab.
If the tax code is location based tax, Menu: Setup > Tax > Locations and verify that the
ship-to location has a valid tax account. Check the tax account flexfield qualifier to
determine what segment to check, the default for State, County, City would be the State
segment. Make sure this is checked.
Naviagate to Setup > Financials > Flexfields > Key > Segments.
Query on Flexfield Title = Sales Tax Location Flexfield
Click on the structure that is assigned in your System Options. (Ex. State,County,City)
Click on Segments. Click on State. Click on Flexfield Qualifiers. You should see the
enabled box checked for Tax Account.
Once you verify that all these accounts are setup correctly, the code combination that
autoaccounting creates must be valid in GL.
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