Function of Commitment Guarantee [ID 1084975.

1] Modified 15-APR-2010 PUBLISHED In this Document Goal Solution Type HOWTO Status

Applies to:
Oracle Receivables - Version: 11.5.10.2 to 12.1.2 - Release: 11.5 to 12.1 Information in this document applies to any platform. ARXTWMAI

Goal
This will provide a Functional Overview of the Commitment Guarantee.

Solution
Commitment Guarantee Two Different Types of Commitments: Deposit and Guarantee This is functionality of the Guarantee Commitment Only. References: Oracle Receivables User Guide Release 12 Part No. B31211-01 Basic Definition of Guarantee Commitment: Guarantee Commitment is a commitment from the customer to record a contractual agreement with your customer to conduct business over a specified period of time. Two Different balances are maintained for a Commitment. 1st Balance is the Guarantee Balance. 2nd Balance is the Commitment Balance. List below will be the explanation of these balances for future use. Reports: Commitment Balance Report can be run via Receivables Responsibility. Access the Commitment Balance Report by Control>Request>Run, LOV Commitment Balance Report. Running this report for the Commitment Number Generated will allow you to see the Activity Performed against this Commitment in order to determine if the Balance of the Commitment is correct. Recommend to be run in Format Mode: Detailed to see all activity performed. Generation of Guarantee: Access the Receivables Responsibility to generate Guarantee Manually. Guarantee can also be imported via Auto-invoice. When Generated manually you will need to access the Transactions>Transactions navigational process. The Class that you enter must be Guarantee and you can then select the Transaction Type that you have setup or use the Seeded Transaction Type that has been supply by Oracle Corporation. To enter in the value of the Guarantee it will be necessary to use the Commitment Tab that is present within the Transaction>Transaction Form. After selecting the Commitment Tab you will be required to enter the Amount and Description of the Commitment that was entered. A seeded value of Generic Commitment is available under the Description Setting. After you have entered all the info you will still have to save and complete the commitment to have it available for use.

Generation of the Guarantee does not mean that they have received the money for the Guarantee it just indicated the company has created a Guarantee as a contractual agreement. Balance of the Commitment: 1st Guarantee Balance is the balance that is maintained for the Guarantee itself under the table ar_payment_schedules_all when the Guarantee is first Generated. The payment schedule table of the Guarantee maintains the Guarantee Balance and reflects any Invoices that have been generated against a Guarantee (See Invoice Generated Against Guarantee). The amount due remaining column under the ar_payment_schedules_all table of the Guarantee will indicate the balance of the Guarantee based on activity performed directly to the Guarantee itself. The Guarantee Balance under the ar_payment_schedules_all is affected by the following activity, invoice application to Guarantee and or Adjustment made directly to the Guarantee. Invoices Generated and applied to the Guarantee WILL affect the Balance of the Guarantee. 2nd Commitment Balance: The commitment Balance with can be seen via the form by querying the Commitment via Transactions>Transactions and clicking on the Details Button of the Balance Due Field. This will show both the Guarantee Balance under the Total and the Commitment Balance separated under the same Form. These totals are usually the same for a Guarantee. Commitment Balance is calculated from the Beginning Balance of the Guarantee minus any activity that was generated via Invoices that have been applied to the Guarantee for any purchases Generated. Invoice Generated Against the Guarantee Commitment: When a Guarantee Commitment is generated the column customer_trx_id is populated within the ra_customer_trx_all table. This is the primary key for the table ra_customer_trx_all and is used when creating Invoices, Credit Memos, Deposits, Guarantee, and Debit Memos etc. There are 2 different ways to apply Invoices to a Guarantee we will discuss them below. 1. Invoice is Created Manually via the Transaction>Transaction Form and during generation the Column Commitment is accessed and the Guarantee Commitment that was generated is select during Invoice Generation. 2. When Sales Order is generated via Order Management the User can select which Commitment they want the Sales Order to be applied to. When the Sales Order is processed and booked the Autoinvoice process is kicked off and an Invoice is created directly against the Commitment in question. When an Invoice is applied to the Guarantee the following happens. 1. The column initial_customer_trx_id is populated on the Invoice that is generated. The column initial_customer_trx_id is used to point to the Guarantees customer_trx_id, this provides the link between the invoice and the commitment and allows the Commitment Balance Report to show the activity performed against the Guarantee. To find all invoices that have been applied to Guarantee, you can run the following. select customer_trx_id, org_id, initial_customer_trx_id from ra_customer_trx_all where initial_customer_trx_id = &customer_trx_id_of_the_Guarantee; 2. An adjustment record is generated via an API against the Guarantee that was selected when the Invoice is completed. The adjustment generated will have an Adjustment Type of C. If the adjustment, in the ar_adjustments_all table has an adjustment type other than C then this adjustment is not a commitment adjustment. Adjustment types:

C - Commitment Adjustment M - Manual A - Automatic X - Bill Receivables Adjustment Statuses: A - Approved U - Unearned R - Rejected W - Pending 3. The adjustment when generated is applied to the Guarantee Balance and the Commitment Balance. This will reduce the balance of the Guarantee and will NOT reduce the balance of the Invoice. This is the difference between the Guarantee and the Deposit. ACCOUNTING EXAMPLE: 1. Commitment Generated for 2000.00 Transaction Number of the Guarantee: 13903 Select customer_trx_id from ra_customer_trx_all where trx_number in (&num_of_guar); Balance of Guarantee prior to Invoice Application: Guarantee Balance: 2000.00 Commitment Balance: 2000.00 Guarantee Balance can be found from following Select amount_due_original , amount_due_remaining from ar_payment_schedules_all Where customer_trx_id = &ctidofguar; 2. Invoice is Generated and applied to the Guarantee for 500.00 Invoice Number: 102085 Select customer_trx_id , initial_customer_trx_id from ra_customer_trx_all where trx_number in (&num_of_inv); Above Script shows the customer trx id of the invoice and shows the Initial_customer_trx_id of the Guarantee that it is applied to. Check the Adjustment that was created against the Guarantee Select adjustment_number, customer_trx_id, adjustment_type, amount From ar_adjustments_all where customer_trx_id = &ctidofguar; Above script will show the adjustment type of C for commitment. Balance of Invoice applied to Guarantee: Invoice Balance: 500.00 Note that with the Invoice Balance applied to a Guarantee is not affected. Reason is when a Guarantee Commitment is used the Adjustment Created by the invoice is applied to the Guarantee and not the Invoice. The Invoice remains open and is closed by Receipt application when payment is sent for goods purchased.

Guarantee Balance: Guarantee is affected by application of the Invoice. Guarantee Balance : 2000.00 <Prior to Invoice Application> Commitment Balance: 2000.00 <Prior to Invoice Application> Commitment Balance = Commitment (Current Value of Commitment) Adjustments Via Invoice application Amount Acctd Amount Guarantee Generated: GUAR 2000.00 2000.00 Commitment Balance: 2000.00 2000.00 Invoice applied to GUAR - 500.00 -500.00 <from adjustment> ====================== New Guarantee Balance 1500.00 1500.00 New Commitment Balance 1500.00 1500.00 Invoice that was Generated To the Guarantee ================= Balance of Invoice Amount 500.00 500.00 Acctd Amount 500.00 500.00

DIFFERNCES BETWEEN DEPOSIT AND GUARANTEE: Invoice when applied to Deposit has the adjustment applied to the Invoice which closes the Invoice. Receipt is applied to Deposit to close the Deposit Balance. Deposit Commitment Balance is reduced by the Adjustments generated against the Invoice. Invoice when applied to Guarantee has the adjustment applied to the Guarantee. Receipt is applied to the Invoice to show payment and Invoice is closed by application of Receipt Payment. Guarantee will be closed by Adjustments Generated via Invoice applications. Troubleshooting: 11.5.10. Use NOTE: 215969.1 for Receipt Diagnostic Capture Use NOTE: 223834.1 for Invoice and Guarantee Diagnostic Capture 12.0 Use NOTE: 431367.1 for Receipt Diagnostic Capture Use NOTE: 431370.1 for Invoice, Deposit, Guarantee, Credit Memo Diagnostic Capture Use NOTE: 431371.1 for Adjustment Diagnostic Capture

Related Products Oracle E-Business Suite > Financial Management > Credit to Cash > Oracle Receivables

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