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Oracle Receivables Fundamentals and How it Fits Into the Quote to Cash Process

Cathy Cakebread Consultant Cathy Cakebread cathyc@cathycakebread.com www.cathycakebread.com Session ID#8755


Copyright 2011 Cathy Cakebread

Agenda
Quote to Cash Flows Customers/Parties Shared Setups Orders to Receivables Oracle Receivables Processes
Transactions Payments Adjustments Accounting
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Questions??
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Introduction
Independent Consultant Since 1990 One of the Original Designers of Oracle Receivables and Revenue Accounting Worked With Over 70 Companies in:
Implementing Upgrading (Managed 6 Upgrades) Optimizing Utilization of Oracle Receivables

Created and Coordinate AR SIG


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Basic Premise
The Oracle E-Business Suite is comprised of many different applications performing various business functions. A key aspect of this is that most of these applications share setups with other applications and data is often passed from one application to others. What this means is that what you do in your application may have an impact on many other applications, in ways that you may not be aware of. The purpose of session is to provide attendees with the details of how the data flows in and out of Oracle Receivables, how certain setups are shared across multiple applications and to see how Oracle Receivables fits in the Big Picture.
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Collaborative SIG Presentations


CS - Business Case Overview for Quote to Cash and Procure to Pay Process Hans Klobe Celantra Systems Monday April 11 10:30am Room W315B CS - Business Flow Overview and Master Data Management in Quote to Cash Process Robin Walker Caliber Services Monday April 11 1:15pm Room W315B CS - CRM/ Fundamentals: Opportunity to Quote Process Ravi Kambhaladinne CAP Gemini Monday April 11 2:30pm Room W315B Order Management Fundamentals: Quote to Ship Process Scott Engel Camelback Products, Inc (Written by Maggie Coleman) Monday April 11 3:45pm Room W315B CS - Oracle Receivables Fundamentals: AR to Collect Process Cathy Cakebread Consultant Tuesday April 12 - 8:00am - Room W315B CS Accounting in R12: Quote to Cash Process Mohan Iyer FSCP Solutions Tuesday April 12 9:15am Room W315B CS - Town Hall Meeting: Quote to Cash and Procure to Pay - Q&A Panel Mohan Dutt Verisign Wednesday April 13 4:00pm Room W315B

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Target Audience
Folks Who Use Oracle Receivables To Learn More About Where Their Data Comes From And, to Learn About Shared Setups Folks Who Use Applications That Pass Data to Oracle Receivables To Learn More About Where Their Data Goes To Learn The Impact of Their Activities And, to Learn About Shared Setups e.g., CRM, Order Management, Contracts and Projects Folks
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Quote to Cash Flows

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Quote to Cash Applications

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Standard Quote to Cash Flow


Create an Opportunity
CRM Verify Customer Credit OCM

Create a Customer
OM/AR

Create a Quote OM

Create a Sales Order


OM

Price Sales Order OM

Credit Check the Sales Order OM

Remove Order Holds OM/OCM

Schedule Order - Pass Demand to Planning


OM/VCP

Make/Buy Product - ATO, Drop Ship


WIP/PO

Plan Trip and Delivery Shipping Recognize Revenue AR

Pick and Stage Sales Order Shipping Remove product qty & value from Inventory INV

Ship Sales Order Shipping Recognize COGS INV

Update Install Base/Service Contracts


Service

Invoice Customer AR

Transfer accounting entries to GL


AR to GL
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Copyright 2011 Maggie Coleman

One Way Only!!!

Tip: Make Corrections in the Source System, Whenever Possible


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Shared Setups

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Items

Tip: Have an Items Team to control item information Copyright 2011 Cathy Cakebread 12

Items and Receivables

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Payment Terms (Orders, Invoices, Contracts, Projects)

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Banks and AR

Shared With Accounts Payable


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Oracle Customers
Trading Community Architecture
Three Levels: Party, Customer Account, Site Can Be:
Customer, Suppliers, Employees, Anyone/Business That Interacts With Your Company

One Customer May be All Three Party


Highest Level Global Entity Used More By CRM Applications Than Back Office

Customer Account
Made Up of One or More Legal Entities Made Up of One or More Addresses /Sites Entity for Orders and Invoices

Customer Site
Address and How You Interact With the Address Specific to an Operating Unit

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Customer Components
Party
Account

Site

Tip: Have an Customers Team to control customer information

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Customer Examples
Customer (Party) Customer Relationship Customer Account 1 Site Address 1 Bill To Site Address2 Ship To Site Address3 Ship To Customer Account 2 Site Address201 Bill To Site Address303 Ship To Customer Account 3 Site Address304 Bill To Ship To Customer (Party) Customer Account Site Address 1 Bill To

Marketing

Bill To

Ship To

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Typical Customer Creation (Who)


Complete Credit Application (Salesrep/Customer)
Approve Credit Application (Credit and Collections)

Add New Customer (Credit and Collections / Salesrep / Order Entry / Accounts Receivable)

Update Credit Details (Credit and Collections)

Add New Relationships (as Needed) (Credit and Collections / Accounts Receivable)

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Order To Receivables
(Invoices and Credit Memos)

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Orders Workflow Example

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Assemble to Order Workflow

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Order Transaction Types and AR

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Order Holds - Define

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Credit Check Rules

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Customers/Sites Profile Classes

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Projects to Receivables
Projects Passes Invoices and Credit Memos to Receivables Based on Completion of Project Tasks and Activities
Note: The Accounting For Items Passed From Projects To AR Is Not Like The Standard Accounting. In Projects: Debit Credit Unbilled Receivables Revenue In AR: Debit AR

Credit Unbilled Receivables

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Contracts to Receivables

Note: A Contract May Generate an Order and/or Pass Data Directly to AR

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Receivables Transactions
Invoices Credit Memos Debit Memos Deposits Guarantees

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Transactions Flow / Sources

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Transactions Example - Invoice

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Transaction Header
Who and Where?
Source: Orders Contracts Projects Manual Entry

Note: Ship to Location Determines Tax Rates

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Transaction Lines
What?

Source: Order Lines Contract Lines Project Activities Manual Entry

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Transaction Distributions
Accounting Details

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Transactions Setup
Payment Terms (Shared Defines When Payment is Due) **Transaction Types (Business and Accounting Grouping and Default GL Accounts, Reporting) Sources (Where Transactions Come From & Numbering Rules) Items (Shared Parts) Memo Lines (Used for Debit Memos) Accounting Rules (Derive How Revenue and Receivables Are Accounted For, Revenue Recognition) **AutoAccounting (Derive Accounting Values) AutoInvoice
Line Ordering Rules (Rules for Sequencing Transaction Lines) Grouping Rules (Rules for What Goes on the Same Transaction)

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Receipts (Payments)

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Receipts
Payments for Non-Accounts Receivable Activity Miscellaneous Receipts
Payments for Company Events, T-Shirts, COBRA Payments, Utility Refunds...

Payments from Customers For Accounts Receivable Activity (Paying for Open Transactions) Forms of Payment:
Checks Cash Credit Card Payments Letters of Credit ACH/Wires Bills of Exchange
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Receipt Sources

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Receipt

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Receipt Applications

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Receipt Statuses
Applied Unapplied On-Account Unidentified

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Receipts Setup
**Receivable Activities (Base Activity and Miscellaneous Cash Definitions) AutoCash Rule Sets (Rules for How to Apply Cash Through Lockbox) Application Rule Sets (Rules for Partial Payments) Distribution Sets (For Miscellaneous Cash with Multiple Accounts) Receipt Sources (Where Receipts Came From and Rules) **Receipt Classes (Key Accounting Setup) Bank Charges (Rules for Bank Charges) Lockboxes
Lockboxes (Bank and Processing Rules) Transmission Formats (Layouts of Data From Bank)

Banks (Banks, Branches and Associated GL Accounts)


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Adjustments

Credit Memo Terminology: 1) Credit Memo - Tied to an Invoice When Created or 2) On-Account Credit Not Tied to an Invoice When Created
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Payables and Receivables

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Accounting (Basics)

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Conclusion
Oracle Receivables Does Not Stand Alone, Data Is Passed From Other Applications To Receivables And Accounting Entries Are Passed From Receivables To General Ledger. Many Of The Key Setups Are Shared With Other Applications and Thus Should Be Handled in a Coordinated Manner. It Is Critical To Work Together With Folks from Other Applications and to Understand How Each Applications Pieces Fits Into The Big Picture.
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Questions and Answers


Questions? Additional Resources: My Oracle Support AR+ Newsletters

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