How To Setup And Troubleshoot Invoicing Rules and Accounting Rules (Doc ID 111693!1" In this Docu#ent
Purpos e Troublesh T roubleshooting ooting Steps 1. Overview of Invoicing Rules and Accounting Rules a. Invoicing Rules b. Accounting Rules . Setting up Invoicing and Accounting Rules !. "sing Invoicing and Accounting Rules a. Transactions form b. AutoInvoice #. "nderl$ing table information for Invoicing and Accounting Rules %. Troubleshooting Invoicing and Accounting Rules a. Rule &efaulting issues i. Invoicing and Accounting Rule from setup for an
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Inventor$ Item ii. Invoicing Rule in transactions form b. "ne'pected behavior when using the seeded Accounting Rule ( Immediate when interfacing Sales Orders from Order )anagement *O)+ c. ,'planation of changes to Transaction and - date in transaction form when using Bill in Arrears d. "pdating Invoicing and Accounting Rules e. /hen choosing an Accounting rule get error f. "sing &ail$ Revenue Rate t$pe of periods raises error g. "ne'pected Percentages when using an Accounting rule spread over multiple periods h. Issues with dates0 Transaction or - date i+ ariable Accounting rule with over %2 periods ii+ Other - date issues i. "nable to update 3elds associated to &ail$ Revenue Rate in Interface ines form 4. Please suppl$ both an invoicing rule and an accounting rule for this invoice. 5. The valid values for credit method for accounting rule are0 PRORAT,6 I7O and "8IT 9. :ode Bugs ;. Still
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APPLIES TO: Oracle Receivables ? ersion 11.%.12.2 and later Information in this document applies to an$ platform. ,'ecutable0RA@)TR ? AutoInvoice )aster Program ,'ecutable0RA@TR@ ? AutoInvoice Import Program 7orm0AR@T/)AI.7)B ? Transactions 7orm0RA@S"R".7)B ? &e3ne Invoicing and Accounting Rules
PURPOSE $racle Receivables (AR"% AutoInvoice In&or#ation 'enter Troubleshooting AutoInvoice &or $racle Receivables Release 11!) Through 1* +ote 111693!1 $racle Receivables (AR"% Transactions ,or-bench In&or#ation 'enter +ote 111693!1
Invoicing Rules and Accounting Rules are used b$ Receivables to determine how $ou want to recognie $our Receivable and Revenue. The information $ou setup for Accounting Rules determines the behavior of Revenue Recognition6 and de3nes how the - distributions are created for $our invoices. This note is intended provide an overview of Invoicing and Accounting Rules in Receivables. It will discuss the dierence and relationship between Invoicing Rules and Accounting Rules and provide details on how to set it up as well as troubleshoot issues. Since Invoicing and Accounting Rules are tightl$ integrated with Revenue Recognition6 please also review 8ote 111C##.16 "nderstanding and Troubleshooting Revenue Recognition
If $ou are encountering other issues involving AutoInvoice6 please review 8ote 12;%;%;.16 Troubleshooting AutoInvoice for Oracle Receivables Release 11.% Through 1
TROUBLESHOOTING STEPS 1. Overview of Invoicing Rules n! Accoun"ing Rules . Invoicing Rules
Invoicing Rules allow $ou to determine when $ou should accountDrecognie the Receivable amount for invoices. Eou can assign invoicing rules to invoices that $ou manuall$ enter or import into Receivables through AutoInvoice. Oracle Receivables seeded Invoicing Rules6 $ou cannot create more0 .ill in Advance0 This rule allows $ou to recognie the Receivable amount at the start of the revenue recognition schedule. .ill in Arrears0 This rule allows $ou to recognie the Receivable amount at the end of the revenue recognition schedule. •
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Invoicing Rules are associated to an Invoice at the
Accounting Rules allow $ou to de3ne when $ou should accountDrecognie the Revenue for $our invoices. Accounting rules determine the number of periods and percentage of total revenue to record in each accounting period. Eou can de3ne various accounting rules which can recognie Revenue in one or more accounting periods. Transactions entered either manuall$ or through AutoInvoice can use Accounting Rules
for as long as the$ are associated to an Invoicing Rule. Oracle Receivables seeded 1 Accounting Rule6 $ou can create more as reFuired b$ $our business needs0 I##ediate0 This accounting rule recognies the entire revenue for a transaction in one accounting period. •
Accounting Rules are associated to an Invoice at the ine level. Once an invoice is associated to an Invoicing Rule6 each of its lines need to be associated to an Accounting Rule. The following table summaries details regarding Invoicing and Accounting Rules0 Rule
Invoicing Rule Accounting Rule
'ontrols accounting Seeded b/ $racle 'an users create #ore Invoice &or rules 2evel
Receivable
Revenue
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In Advance
•
In Arrears
•
Immediate
8o
Ees
ines
8OT,0 If $ou can recognie Revenue for all of $our invoice lines immediatel$6 then there is no need to use Invoicing and Accounting Rules. If however6 $ou have an invoice line for which $ou need to spread out the recognition of Revenue across several periods6 then $ou need to use Invoicing and Accounting Rules. 7or e'ample6 Invoice G1! has ! invoice lines. ine 1 and ine 6 Revenue can be recognied immediatel$. ine !6 Revenue has to be spread over ! periods. Eou would have to associate an Invoicing Rule at the header level. &oing this6 enables $ou to enter a value
in the Accounting Rule for each line. 7or ine 1 and 6 $ou will use the seeded Accounting Rule ( Immediate. 7or ine !6 $ou will use an Accounting Rule that $ou have previousl$ de3ned6 that allocates revenue across ! periods. $. Se""ing u% Invoicing n! Accoun"ing Rules
There is no additional setup reFuired for Invoicing Rules. Receivables seeds the values $ou can use0 In Advance and In Arrears. 7or Accounting Rules6 $ou can setup as man$ rules as reFuired to cover $our various business scenarios involving how $ou want to recognie revenue. Responsibilit/% Receivables )anager +avigation% Setup H Transactions H Accounting Rules
The following screenshots illustrate various Accounting Rule t$pes0 1. Seeded Accounting Rule6 Immediate0 This Accounting Rule is provided b$ Oracle. The onl$ 3eld $ou can modif$ here is the Period t$pe6 and $ou should ensure that the value here matches the Period t$pe used b$ $our edger. I#portant% If $our ledger has an accounting period t$pe that is not Month and $ou use AutoInvoice with Oracle Order )anagement6 $ou should update the Period 3eld to match the same period as $our accounting period t$pe.
. ,'ample for T$pe ( Fixed Schedule6 with Revenue spread out evenl$ over ! periods.
!. ,'ample for T$pe ( Variable Schedule6 with 3rst periods revenue percentage speci3ed.
#. ,'ample for T$pe ( Daily Revenue Rate, All Periods
8ote0 There is no need to 3ll in the Schedule Section for Accounting Rules of this t$pe. The schedule for such rules is provided during data entr$ when $ou specif$ Rule Start &ate and Rule ,nd date or &uration. The same is true for t$pe ( Daily Revenue Rate, Partial Periods %. ,'ample for T$pe ( Speci3c &ate6 for this t$pe of rule the dates in which to recognie revenue are hard? coded into the schedule.
9. ,'ample for &eferred Revenue chec5ed.
8ote0 Eou can chec5 the &eferred Revenue chec5bo' for an$ t$pe of Accounting Rule. The impact of chec5ing the &eferred Revenue chec5bo' is discussed below. 7ollowing describes each of the 3elds in the form0 +a#e% ,nter a uniFue and descriptive name for $our Accounting Rule Description% ,nter te't that describes this Accounting Rule
T/pe% Eou have # options for Rule t$pe •
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i4ed Schedule *formerl$ 7i'ed &uration+6 this t$pe prorates 122J evenl$ across the Number of Periods $ou specif$. 5ariable Schedule *formerl$ ariable &uration+6 this t$pe allows $ou to later specif$6 during invoice data entr$6 the number of periods over which $ou want to recognie revenue.
The ne't t$pes were introduced in 11.%.12 7amil$ Pac5 - via the Patch %9K#1C 0 Partial Period Revenue Recognition Bac5port Pro4ect on 7P.-. 7ollowing are some term de3nitions0 Daily Revenue Rate ( Total Revenue D Total 8umber of &a$s across all periods Partial Period is when the invoice e'ists for onl$ part of the period as opposed to all da$s within the period *see e'ample below+. •
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Dail/ Revenue Rate All 7eriods 6 this t$pe will use a dail$ revenue rate to calculate the precise amount of revenue for all periods whether it is full or partial. "se accounting rules of this t$pe to meet strict revenue accounting standards which reFuire accurate revenue recognition on a per?da$ basis. Dail/ Revenue Rate 7artial 7eriods 6 this t$pe is a h$brid between 7i'ed Schedule and &ail$ Revenue Rate6 All Periods. It will use a dail$ revenue rate to calculate the precise amount of revenue for the partial periods in the schedule6 then prorate the revenue evenl$ across the full periods.
7eriod% This corresponds to the Period t$pes $ou de3ned in Oracle -eneral edger *see Oracle -eneral edger Implementation -uide6 &e3ning Period T$pes+. Leep in mind that during data entr$ of the invoice lines6 $ou can onl$ use Accounting Rules that have the same Period as $our edger. In addition to period t$pes $ouve de3ned $ou can also pic5 Specic Date6 which enables $ou to enter a speci3c date in the Date 3eld in the Schedule section discussed below. +u#ber o& 7eriods% ,nter the number of periods $ou want this accounting rule to recognie revenue across.
De&erred Revenue 0 If $ou want to dela$ recogniing revenue6 chec5 this chec5 bo'. /hen chec5ed6 invoices using this rule will have its revenue deferred to an unearned revenue account6 and $ou must later use the Revenue Accounting )anagement *RA)+ wiard to recognie the revenue.
8ote0 Invoices that use a &eferred Rule will not appear in the Revenue Recognition Report until Revenue is Scheduled via the Revenue Accounting process. Responsibilit/% Receivables )anager +avigation% :ontrol H Accounting H Revenue Accounting Schedule Section% • •
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7eriod0 Specif$ the seFuence of the Period starting with 1. 7ercent% Indicate the percent of the revenue $ou want to recognie in this period. Total Percent across all periods must eFual 122J for 7i'ed Schedule t$pes. 7or ariable Schedule t$pes6 $ou are allowed to de3ne the percentage for the 3rst period6 which is t$picall$ less than 122J. Date% ,nter a speci3c date6 e.g. 12?M"8?2126 this 3eld is onl$ enabled if the Period $ou speci3ed in the header section is Specic Date
8otes0 If $ou pic5 T$pe ( 7i'ed Schedule6 the Schedule section is automaticall$ populated for $ou with as man$ rows as $ou speci3ed in Number of Periods6 and the percentage will be evenl$ spread across all periods to sum up to 122J. If $ou pic5 T$pe ( ariable Schedule6 $ou do not need to enter an$ details in the Schedule Section.
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The following e'ample from the Oracle Receivables "ser -uide6 illustrates the dierences in Revenue
calculation based upon $our Accounting Rules setup0 Suppose $ou bill a contract for NC226 which starts Manuar$ 1# and ends April 1! *C2 da$s+6 and the accounting period is )onthl$. In this contract period6 Manuar$ and April are partial periods6 and 7ebruar$ and )arch are full periods. This table illustrates the various revenue recognition schedules that Receivables calculates &ail$ Revenue Rate is calculated as NC22 D C2 da$s ( N12 per da$. 82 Date
Man 1#
7eriod
Da/s in 7eriod
Dail/ Revenue Rate All 7eriods
Dail/ Revenue Rate 7artial 7eriods
i4ed Schedule
5ariable Schedule
Manuar$
1K
1K2
1K2
%
1K2
7eb 1# 7ebruar$
K
K2
C%
%
#2
)ar 1#
)arch
!1
!12
C%
%
#2
Apr 1!
April
1!
1!2
1!2
%
#2
8otes0 1. &ail$ Revenue Rate is calculated as NC22 D C2 da$s ( N12 per da$. . 7or &ail$ Revenue Rate6 All Periods0 Revenue is a function of the number of da$s in the period multiplied b$ the &ail$ Revenue Rate !. 7or &ail$ Revenue Rate6 Partial Periods0 the &ail$ Revenue Rate is used for the partial periods Manuar$ and April. The remaining revenue is evenl$ split across the full periods 7ebruar$ and )arch. #. 7or the 7i'ed Schedule6 each period gets %J of the revenue.
%. 7or ariable Schedule6 the setup was de3ned to recognie 2J during the 3rst period6 during data entr$ # periods are speci3ed. 2J will be recognied in Manuar$6 then the remaining K2J will be split evenl$ across 7ebruar$ to April. 7or more information6 please review the section on Accounting Rules in the Oracle Receivables Implementation -uide &. Using Invoicing n! Accoun"ing Rules
Invoicing and Accounting rules are used for Invoices onl/. /hen crediting an invoice with rules6 a credit memo inherits the Invoicing and Accounting rules from the Invoice. Eou specif$ these values via the Transactions form6 when $ou do manual data entr$ of invoices6 or $ou pass in the data associated to these rules via AutoInvoice in the RAI8T,R7A:,I8,SA table. . Trnsc"ions for' Responsibilit/% Receivables )anager +avigation% Transactions H Transactions
/hen $ou create an Invoice6 for which $ou want to specif$ the timing of the recognition of Receivable and Revenue6 $ou should associate an Invoicing Rule at the
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null0 8o Invoicing Rule6 recognies revenue on the - date of the invoice.
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