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 1
Agenda Quote to Cash Flows Customers/Parties Shared Setups Orders to Receivables Oracle Receivables Processes Transactions Payments Adjustments Accounting Questions?? Copyright 2011 Cathy Cakebread 2
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 Copyright 2011 Cathy Cakebread 3
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. Copyright 2011 Cathy Cakebread 4
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 Copyright 2011 Cathy Cakebread 5
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 Copyright 2011 Cathy Cakebread 6
Quote to Cash Flows Copyright 2011 Cathy Cakebread 7
Quote to Cash Applications Copyright 2011 Cathy Cakebread 8
Standard Quote to Cash Flow Create an Opportunity Verify Customer Credit Create a Customer Create a Quote Create a Sales Order CRM OCM OM/AR OM OM Price Sales Order Credit Check the Sales Order Remove Order Holds OM OM OM/OCM Schedule Order - Pass Demand to Planning OM/VCP Make/Buy Product - ATO, Drop Ship WIP/PO Plan Trip and Delivery Recognize Revenue Pick and Stage Sales Order Remove product qty & value from Inventory Ship Sales Order Recognize COGS Update Install Base/Service Contracts Transfer accounting entries to GL Invoice Customer Shipping Shipping Shipping Service AR AR INV INV AR to GL Copyright 2011 Maggie Coleman 9
One Way Only!!! Tip: Make Corrections in the Source System, Whenever Possible Copyright 2011 Cathy Cakebread 10
Shared Setups Copyright 2011 Cathy Cakebread 11
Items Tip: Have an Items Team to control item information Copyright 2011 Cathy Cakebread 12
Items and Receivables Copyright 2011 Cathy Cakebread 13
Payment Terms (Orders, Invoices, Contracts, Projects) Copyright 2011 Cathy Cakebread 14
Banks and AR Shared With Accounts Payable Copyright 2011 Cathy Cakebread 15
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 Copyright 2011 Cathy Cakebread 16
Customer Components Party Account Site Tip: Have an Customers Team to control customer information Copyright 2011 Cathy Cakebread 17
Customer Examples Customer (Party) Customer (Party) Customer Relationship Customer Account Customer Account 1 Customer Account 2 Customer Account 3 Site Address 1 Site Address 1 Site Address2 Site Address3 Site Address201 Site Address303 Site Address304 Bill To Bill To Ship To Ship To Bill To Ship To Bill To Ship To Marketing Bill To Ship To Copyright 2011 Cathy Cakebread 18
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) Copyright 2011 Cathy Cakebread 19
Order To Receivables (Invoices and Credit Memos) Copyright 2011 Cathy Cakebread 20
Orders Workflow Example Copyright 2011 Cathy Cakebread 21
Assemble to Order Workflow Copyright 2011 Cathy Cakebread 22
Order Transaction Types and AR Copyright 2011 Cathy Cakebread 23
Order Holds - Define Copyright 2011 Cathy Cakebread 24
Credit Check Rules Copyright 2011 Cathy Cakebread 25
Customers/Sites Profile Classes Copyright 2011 Cathy Cakebread 26
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 Copyright 2011 Cathy Cakebread 27
Contracts to Receivables Note: A Contract May Generate an Order and/or Pass Data Directly to AR Copyright 2011 Cathy Cakebread 28
Receivables Transactions Invoices Credit Memos Debit Memos Deposits Guarantees Copyright 2011 Cathy Cakebread 29
Transactions Flow / Sources Copyright 2011 Cathy Cakebread 30
Transactions Example - Invoice Copyright 2011 Cathy Cakebread 31
Transaction Header Who and Where? Source: Orders Contracts Projects Manual Entry Note: Ship to Location Determines Tax Rates Copyright 2011 Cathy Cakebread 32
Transaction Lines What? Source: Order Lines Contract Lines Project Activities Manual Entry Copyright 2011 Cathy Cakebread 33
Transaction Distributions Accounting Details Copyright 2011 Cathy Cakebread 34
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) Copyright 2011 Cathy Cakebread 35
Receipts (Payments) Copyright 2011 Cathy Cakebread 36
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 Copyright 2011 Cathy Cakebread 37
Receipt Sources Copyright 2011 Cathy Cakebread 38
Receipt Copyright 2011 Cathy Cakebread 39
Receipt Applications Copyright 2011 Cathy Cakebread 40
Applied Unapplied On-Account Unidentified Receipt Statuses Copyright 2011 Cathy Cakebread 41
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) Copyright 2011 Cathy Cakebread 42
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 Copyright 2011 Cathy Cakebread 43
Payables and Receivables Copyright 2011 Cathy Cakebread 44
Accounting (Basics) Copyright 2011 Cathy Cakebread 45
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 Application s Pieces Fits Into The Big Picture. Copyright 2011 Cathy Cakebread 46
Questions? Questions and Answers Additional Resources: My Oracle Support AR+ Newsletters Copyright 2011 Cathy Cakebread 47