O2C CYCLE – (ORDER TO CASH CYCLE)

About O2C:

O2C stands for Order To Cash which starts from the order management where we receive/Import the Purchase Order from the customers. The purchase order contains the information about the requirements details of the products, based on which we would be creating a Sales Order.

Below are the Pre-requisites for raising a Sales order:

The customers who raise the Purchase order are the once that are been defined in the TCA. The Items/Products that are been requested from the customer are the once that are defined in the Item Master which is been maintained in the Inventory Module. The price of the Items are been defined in the Price List along with the Modifiers (Offers and Discounts) which are maintained in Advance Pricing. Warehouses are to be defined where actually we stock the items. How we need to ship the products are been defined under Shipment Methods that are maintained in the Inventory Module. Sales Person information is also maintained in the Accounts Receivable or Order Management Modules.

Note: Customer provides the Request Date (RD) and we define the Schedule Ship Date (SSD)

First when the order is been taken the Order is in Entered State where in all the details of the Order Header and Order Lines are been entered in the system, then the order moves to Booking Stage.

In Booking Stage the scheduled Ship Date is been decided by considering the Ordered Quantity and then matching/comparing with the On Hand Quantity.

If the On Hand Quantity and the Ordered Quantity is same then Scheduled Ship Date and the Requested Date would be the same date else based on the ATP (Availability To Promise) check is done to decide the scheduled ship date. The ATP rules is based on the Demand source (Sales order) and the Supply Source which is nothing but the Purchase Order (Items not available may purchased from another vendor and supplied to the Customer) or another Inventory Organization or Work In Progress (Manufacturing Plant)

Once the booking process is completed all the information on the Product/Items are moved to the Shipping Department.

The task for the Shipping Department starts from actual moving the order from the Warehouse to the point where the Product/Items are been finally delivered to the Customer.

Below is the explanation for the process that is followed by the Shipping Department:

To have a better understanding of this let us consider a Scenario where in an Inventory organization has warehouses that are located at various locations, at each location of the warehouse there are stores where actually the Items are been placed. Items may be located at various stores here the task is to gather all the Items/Products that are required for a Sales Order at one place so that it would be packed and shipped all together. This is done once the details of the Item Quantity, Ship From, Ship To are moved from the Booking Process to the Store for Picking.

Note: Inventory Organization may be a Store, Distribution Center or Manufacturing Plant.

Once all the Items are been placed at one location, then these Items are then moved to the Staging Area where the packing and loading the Items and then to be transferred to the vehicle is been executed to do so the Shipping Department initiates Launch Pick Release here the system creates Move Order Transaction in the warehouse. The warehouse then Allocates Move Order, decides how much quantity are to be moved from one store to another and finally to the Stage Area. The system then generates move order Pick Ship Report based on which the Items are been Moved to the staging area.

This process of moving the Items from the Stores to the staging area is “Picking Process”.

Once the Goods reaches the Stage Area then transit of goods is done using Transact Move Order but here there is no change in the Physical Quantity of the Items which remains the same as the items are still in the stores.

Next step would be Shipping Execution where the Items are loaded in the vehicle for delivery also known as SHIPPED Stage here the delivery details are been created which has the information about the Initial Ship From and Ultimate Ship To location details along with the Items and the Quantity information.

Based on the Delivery Details the TRIP (Travel Plan) is decided, here the delivery Details gets associated to the Trip.

Once the Products/Items are ready for Shipment then the system generates the following reports

1. Commercial Invoice    (This contains information about the Quantity and cost but not the other details like Tax,     Fright charges etc)
2. Bill Of Lading
3. Vehicle Lading Details      (Documents about the Vehicle)

Once the Product/Items are been delivered to the specified destination the Trip is CLOSED, else an exception is been raised. Now when the Trip has closed and the Items are physically moved out of the warehouse then the Inventory is reduced and the “Interface Trip Stop” process runs.

The next process would be the Costing Process

Here only the Purchase Cost (Unit Price or the cost incurred to manufacture the Item) factor information is been entered in the Table MTL_INTERFACE, then a “Workflow Background Process” is initiated which considers the information from table MTL_INTERFACE and moves the cost factor to the Cost management to generate the COGS report (COST OF GOODS).

At this stage the Accounting entry would be

COGS A/c

To Inventory Material Cost A/c

Now the next step would be running the “Auto Invoice Master Program” as the Account Receivables are not aware of the sales order transaction. The Auto Invoice Master Program picks all the lines whose shipped status (Trip Status) is closed and inserts a record into AR_TRANS_INTEFACE table. Once this is done another program is initiated that is Auto Invoice program that picks up the records from the interface table and generates the Invoices.

The accounting transaction is

Receivable A/c

To Revenue

The print of the invoice is sent to the customer, customer then makes the payment and for this payment we create a cash receipt.

The accounting entry:

Confirm Cash A/c

To Receivables

Once we remit the cash receipt into the bank for clearance then the entry would be

Remitted A/c

To Confirm Cash

Later the remitted receipt moves to the cash management module and when we reconcile the receipt the entry is

Cash A/c

To Remittance

Following are the Various Statuses in the O2C Cycle

1. Entered
2. Booked
3. Picked
4. Awaiting Shipment
5. Shipped
6. Closed

This ends the Order to cash cycle.

FUNCTIONAL P2P (PROCURE TO PAY) OVERVIEW

What is P2P?

P2P stands for Procure to Pay. It’s a business process which involves the fulfillment of goods, items, resources etc in an organization inventory to keep business running smoothly and it ends with payment followed by reconciliation.

P2P Process:

Lets us consider an Inventory Organization where actually the items or the goods are placed. For any organization the Inventory Org can be located at different places.

Pictorial representation of Inventory Org located at various locations:

Each Inventory Org located at various locations has a Store In-charge whose job is to have a note on the Items in his Store and raise a demand for an item whenever needed in other terms he raises a Indent on the items for his store. Doing so manually becomes difficult so this can be done using some Planning method one of the planning method is “MIN-MAX PLANNING”. Using the MIN-MAX PLANNING he generate a report with the requirements of those items whose On-Hand quantity is minimum.

The Requirement report is then transferred to the Requisition Interface Table to be sent to the next department say the Purchase Department. To avoid or not to disturb the work of the two departments the Indent requirement is first stored in the Interface table. Now the Purchase Department runs a program “Requisition Import Program”. The Requisition Import Program picks up all the records that are available in the Requisition Interface Table and creates the Requisition.

Let us now put some light on the INDENT and REQUISITION before going forward:

Indent is a Term where in we have the details of the Goods/Items that are required where as Requisition is the term where the details of the goods or items are been recorded along with their estimated price quote.

Now coming to Requisition these are of two types:

1. Internal Requisition
2. Purchase Requisition

Internal Requisitions are created if the Items are to be imported from one Inventory location to another location in the same organization. Here the source of the requisition would be INVENTORY. There is no approval process for internal requisition.

Purchase Requisitions are created if the goods are to be imported from external suppliers. Here the source of the requisition would be SUPPLIERS. The purchase requisition are been sent for approvals.

Going ahead we would discuss about the various APPROVAL METHODS for the Requisitions

Why we need requisition approval?

Requisition approval is required to restrict the requisition that has been raised.

Requisition approvals can be done in two ways:

1. EMP/SUPERVISOR Hierarchy
2. POSITION Hierarchy

In EMP/SUPERVISOR Hierarchy, based on the requisition amount that is raised the requisition travels the hierarchy and reached the appropriate person who has the authority to approve or reject the requisition.

Illustration Fig a:

Supervisor 1 is the manager of Emp 1 who has the authority for approval when the requisition amount is 10000 or less, if it’s above 10000 and less than 30000 then Supervisor 2 would approve who is the manager of Supervisor 1 else Supervisor 3 would be approving this is how the approval of pass in the hierarchy from one Supervisor to another and finally gets rejected.

In POSITION Hierarchy, the requisition may reach the appropriate person who has the authority to approve in two ways:

1. Direct
2. Hierarchy

To avoid the confusion between the two approval methods(POSITION Hierarchy and EMP/SUPERVISORHierarchy) ,So in case of POSITION Hierarchy there might be many hierarchies which can be named at one time which is not possible in case of EMP/SUPERVISOR Hierarchy where only one hierarchy is allowed at one time.

This can be better understood with the help of the below diagram (Position Hierarchy):

Illustration Fig b:

Again based on the limitation at every stage the requisition moves from Position Manager if he is authorized to approve a certain amount to Senior Position Manager in case of Position Hierarchy -Hierarchy Method. Where as in case of Position Hierarchy -Direct Method the requisition moves directly to the Senior Position Manager who has the authority to approve as we have defined and structured a hierarchy.

Note: Not only Requisition but Purchase order, Invoices and releases also require Approval

Moving ahead once the Requisition is approved the next stage is inviting the Supplier. Suppliers can be invited by raising a RFQ (Request for Quotation). For the required items and the goods we request the Supplier to send us there Quotation and according the best Quotation is been selected and approved.

For all the RFQ that are been sent by the various suppliers we perform Quotation Analysis to choose the best Quotation based on various factors like Price, Accessibility etc and then Approve the Quotation.

The price that is been quoted in the quotation are been considers for further transaction for a period of time.

Once the Quotations are approved a purchase order is created and sent to the supplier.

Below is the Structure of the Purchase Order:

Note:

Person who is defined as a Buyer is the one who creates a Purchase Order and Purchase order is sent to those Suppliers that are defined in the TCA (Trading Community Architecture).

Going ahead for each Shipment we have a receipt routing associated. Receipt routing is a process that is used for Inspection by the receiving dept.

Receipt Routing are broadly classified into 3 ways:

1. Direct Delivery
2. Standard Delivery
3. Instruction Delivery

Below is the Receipt Routing Approach:

Once the goods are received at the stores these are then used for the Manufacturing in the organization or it is moved to the specific department further that may sell the goods or consume it.

For the goods that we have received there is an invoice that is been sent by the supplier. Now the invoice that is sent is been approved by the department that has raised the Purchase order(PO). The approval is done by using matching methods.

There are 2 Matching methods:

1. 2 Way   (In 2 way matching the Invoice Qty and the PO Qty are matched)
2. 3 Way  (In  way matching the Invoice Qty , PO Qty and Received Qty are matched)
3. 4 Way  (In  way matching the Invoice Qty , PO Qty, Received Qty and Accepted Qty are matched)

Moving to the financial part the actual accounting process starts when we have received the goods at the gate where in the journal entry would be:

Receiving Inventory A/c

To Accrual A/c

Note: Accrual Account is a Liability which is not invoiced, where we are not liable to pay at this stage.

Next we receive at the store for this the entry would be:

Material Cost A/c

To Receiving Invoice A/c

Once the Invoiced is raised by the Supplier then the entry would be:

Accrual A/c

Invoice Price Variance A/c

To Liability A/c

NOTE: Invoice Price Variance is accounted when there is a difference in the Invoice sent and the goods actually received by the Purchasing Department.

Once the payment is made then the entry would be:

 Liability A/c

To Cash Clearance A/c

Once we reconcile payments then the entry would be:

Cash Clearance A/c

To Cash A/c

Once the Goods that we have received moves to another department for Manufacturing or consumption of the item then the entry would be:

Expense A/c

To Material A/c

The Final entry in the Ledger would be:

Expense A/c

To Cash A/c

This concludes the complete process of Procure To Pay Cycle.

Reconciling A/P Accrual Accounts Balance

At any given time, the balance of the A/P accrual accounts can account for the following transactions:

• Uninvoiced Receipts

• Over-invoiced Receipts

• Invoice Price Variance (for transactions created using Release 9)

• Errors (Invoices or inventory transactions charged to this Account by mistake)

You need to analyze the balance of the A/P accrual accounts, distinguish accrued receipts from invoice price variances, and identify errors.

Analyzing the A/P Accrual Account Balance

You need to monitor potential problems with purchasing and receiving activities that can affect the accuracy of your A/P accrual accounts. You can use the Accrual Reconciliation Report to identify the following problems in receiving, purchasing, inventory, work in process, or accounts payable transactions:

• Quantities differ between receipts and invoices

• Incorrect purchase order or invoice unit prices (previous releases only)

• Discrepancies in supplier billing

• Invoice matched to wrong purchase order or wrong purchase order line

• Received against the wrong purchase order or order line

• Miscellaneous inventory or work in process transactions that do not belong to the accrual accounts

• Payables entries for sales tax and freight that do not belong to the accrual accounts

Using the Accrual Reconciliation Report

Use the Accrual Reconciliation Report to analyze the balance of the Accounts Payable (A/P) accrual accounts. To submit this report, you must have Purchasing and Payables installed. You can accrue both expense and inventory purchases as you receive them. When this happens, you temporarily record an accounts payable liability to your Expense or Inventory A/P accrual accounts. When Payables matches and approves the invoice, Payables clears the A/P accrual accounts and records the liability from the supplier site. See: Accrual Reconciliation Report. Typically, you run this report at month end. After you have entered your receipt transactions and matched your invoices, you can run the Accrual Reconciliation Report for any transaction date range and identify any differences between your PO Receipts and A/P Invoices. This report also displays any miscellaneous transactions recorded in error to your accrual accounts. These miscellaneous transactions or transactions unrelated to purchase order receipts may be from Payables, Inventory, or Work in Process (depending on your installation). After you have researched the reported accrual balances, you can use the Accrual Write-Off form to indicate which entries you wish to remove and write off from this report. And, after you have written off these entries, you can use the Accrual Write-Off Report as supporting detail for your manual journal entry.

Resolving Quantity Differences

The Accrual Reconciliation Report lets you easily identify quantity differences (i.e., when the quantity received for a purchase order shipment is smaller than the quantity invoiced). Such differences leave residual balances that never clear from the A/P accrual accounts. You should investigate the cause of these differences and take corrective actions before closing your period. Common causes of quantity differences include late inventory receipts, incorrect receipt quantities, and supplier overbilling. To correct late receipts, ensure that receivers enter all receipts into inventory. To correct receipt quantities, enter receipt corrections. To correct overbilling errors, follow your standard procedure for supplier debit memos to clear the difference.

Resolving Price Differences

The Accrual Reconciliation Report lets you determine how much you should have paid and whether the PO or invoice is correct. Such differences leave residual balances that never clear from the A/P accrual accounts. You should investigate the cause of these differences and take corrective actions before closing your period.

Glossary Oracle Apps

A

Account segment

One of up to 30 different sections of your Accounting Flexfield, which together make up your general ledger account code. Each segment is separated from the other segments by a symbol you choose (such as -, /, or \). Each segment typically represents an element of your business structure, such as Company, Cost Center or Account.

One of the sections of an Accounting Flexfield, separated from the other sections by a symbol you choose (such as -, /, or \). You can have up to 30 different Accounting Flexfield segments. Each segment can be up to 25 characters long. Each Accounting Flexfield segment typically captures one element of your agency's structure, such as Fund, Division, Department, or Program.

Account segment value

A series of characters and a description that define a unique value for a particular value set.

Accounting Flexfield

The code you use to identify a general ledger account in an Oracle Financials application. Each Accounting Flexfield segment value corresponds to a summary or rollup account within your chart of accounts.

Accounting Flexfield structure

The account structure you define to fit the specific needs of your organization. You choose the number of segments, as well as the length, name, and order of each segment in your Accounting Flexfield structure.

Accounting Flexfield value set

A group of values and attributes of the values. For example, the value length and value type that you assign to your account segment to identify a particular element of your business, such as Company, Division, Region, or Product.

A group of values and attributes of the values. For example, the value length and value type that you assign to your Accounting Flexfield segment to identify a particular element of your business, such as Company, Division, Region, or Product.

Accounting Flexfield value set

A group of values and attributes of those values. For example, the value length and value type that you assign to your account segment to identify a particular element of your business, such as Company, Division, Region, or Product.

A group of values and attributes of the values. For example, the value length and value type that you assign to your Accounting Flexfield segment to identify a particular element of your organization, such as Agency, Division, Region, or Project.

accounting period

A time period making up your fiscal year, used on financial statements. They can be of any length, but are usually a month, quarter, or year. Periods are defined in Oracle General Ledger.

ad hoc

Concerned with or formed for a particular purpose. For example, ad hoc tax codes or an ad hoc database query.

agent

The customer name or supplier name on a bank statement line.

AutoClear

Formerly an Oracle Payables feature, this was replaced by Oracle Cash Management features in Release 10SC.

AutoReconciliation

An Oracle Cash Management feature that allows you to reconcile bank statements automatically. This process automatically reconciles bank statement details with the appropriate batch, journal entry, or transaction, based on user-defined system parameters and setup. Oracle Cash Management generates all necessary accounting entries. See also reconciliation tolerance.

available transactions

Receivables and payables transactions that are available to be reconciled by Cash Management.

AutoLockbox

See lockbox.

automatic reconciliation

See AutoReconciliation.

AutoReduction

An Oracle Applications feature in the list window that allows you to shorten a list so that you must scan only a subset of values before choosing a final value. Just as AutoReduction incrementally reduces a list of values as you enter additional character(s), pressing [Backspace] incrementally expands a list.

AutoSelection

A feature in the list window that allows you to choose a valid value from the list with a single keystroke. When you display the list window, you can type the first character of the choice you want in the window. If only one choice begins with the character you enter, AutoSelection selects the choice, closes the list window, and enters the value in the appropriate field.

B

BAI

An acronym for the Banking Administration Institute. This organization has recommended a common format that is widely accepted for sending lockbox data. If your bank provides you with this type of statement, you can use Bank Statement Open Interface to load your bank statement information into Oracle Cash Management. See also Bank Statement Open Interface, .

bank file

The electronic statement file you receive from your bank (for example, BAI format or SWIFT940). It contains all transaction information that the bank has processed through your bank account.

bank statement

A report sent from a bank to a customer showing all transaction activity for a bank account for a specific period of time. Bank statements report beginning balance, deposits made, checks cleared, bank charges, credits, and ending balance. Enclosed with the bank statement are cancelled checks, debit memos, and credit memos. Large institutional banking customers usually receive electronic bank statements as well as the paper versions.

bank statement tables

The primary database tables Oracle Cash Management works with for each bank statement. Bank statement tables are populated manually or by importing data from Bank Statement Open Interface. There are two tables for each bank statement--a bank statement headers table and a bank statement lines table. See also bank statement.

Bank Statement Open Interface

The database interface tables that must be populated when you automatically load an electronic bank file into Oracle Cash Management. The Bank Statement Open Interface consists of one header and multiple detail lines for each bank statement.

bank transaction code

The transaction code used by a bank to identify types of transactions on a bank statement, such as debits, credits, bank charges, and interest. You define these codes for each bank account using the Cash Management Bank Transaction Codes window.

Bankers Automated Clearing System (BACS)

The standard format of electronic funds transfer used in the United Kingdom. You can refer to the BACS User Manual, Part III: Input Media Specifications, published by the Bankers Automated Clearing System, for the exact specifications for BACS electronic payments.

Bill of Exchange

(BOE) A method of payment involving the transfer of funds between bank accounts, where one party promises to pay another a specified amount on a specified date.

business group

The highest level of organization and the largest grouping of employees across which a company can report. A business group can correspond to an entire company, or to a specific division within the company.

C

Cash Clearing Account

The cash clearing account you associate with a payment document. You use this account if you integrate Oracle Payables with Oracle Cash Management, or if you generate future dated payment documents. Oracle Payables credits this account instead of your Asset (Cash) account and debits your Liability account when you post uncleared payments. Oracle Payables debits this account and credits your Asset (Cash) account once you clear your payments in Oracle Cash Management. You must enable the Allow Reconciliation Accounting Payables option to be able to enter a cash clearing account for a bank account and payment document.

cash flow

Cash receipts minus cash disbursements from a given operation or asset for a given period.

cash forecast

Projection or estimate of cash position based on estimated future sales, revenue, earnings, or costs.

chart of accounts structure

A classification of account segment values that assigns a particular range of values a common characteristic. For example, 1000 to 1999 might be the range of segment values for assets in the account segment of your accounting flexfield.

check

A bill of exchange drawn on a bank and payable on demand. Or, a written order on a bank to pay on demand a specified sum of money to a named person, to his or her order, or to the bearer out of money on deposit to the credit of the maker.
A check differs from a warrant in that a warrant is not necessarily payable on demand and may not be negotiable. It differs from a voucher in that a voucher is not an order to pay.

clearing

A process that assigns a cleared date and status to a transaction and creates accounting entries for the cash clearing account. See also manual clearing, reconciliation.

clearing account

An account used to ensure that both sides of an accounting transaction are recorded. For example, when you purchase an asset, your payables group creates a journal entry to the asset clearing account. When your fixed assets group records the asset, they create another journal entry to the asset clearing account to balance the entry from the payables group.

concurrent manager

A unique facility that manages many time-consuming, non-interactive tasks within Oracle Applications for you, so you do not have to wait for their completion. When you submit a request in Oracle Applications that does not require your interaction, such as releasing shipments or running a report, the Concurrent Manager does the work for you, enabling you to complete multiple tasks simultaneously.

concurrent process

A non-interactive task that you request Oracle Applications to complete. Each time you submit a non-interactive task, you create a new concurrent process. A concurrent process runs simultaneously with other concurrent processes (and other interactive activities on your computer) to help you complete multiple tasks at once.

concurrent queue

A list of concurrent requests awaiting completion by a concurrent manager. Each concurrent manager has a queue of requests waiting to be run. If your system administrator sets up your Oracle Application to have simultaneous queuing, your request can wait to run in more than one queue.

concurrent request

A request to Oracle Applications to complete a non-interactive task for you. You issue a request whenever you submit a non-interactive task, such as releasing a shipment, posting a journal entry, or running a report. Once you submit a request, Oracle Applications automatically takes over for you, completing your request without further involvement from you or interruption of your work.

conversion

A process that converts foreign currency transactions to your functional currency.

corporate exchange rate

An exchange rate you can optionally use to perform foreign currency conversion. The corporate exchange rate is usually a standard market rate determined by senior financial management for use throughout the organization. You define this rate in Oracle General Ledger.

D

database table

A basic data storage structure in a relational database management system. A table consists of one or more units of information (rows), each of which contains the same kind of values (columns). Your application's programs and windows access the information in the tables for you.

descriptive flexfield

A field that your organization can extend to capture extra information not otherwise tracked by Oracle Applications. A descriptive flexfield appears in your window as a single character, unnamed field. Your organization can customize this field to capture additional information unique to your business.

document sequence

Used to uniquely number documents, such as bank statements in Cash Management and invoices in Receivables. A Document Sequence has a sequence name, an initial value, and a type of either Automatic or Manual.

document sequence number

A number that is manually or automatically assigned to your documents to provide an audit trail. For example, you can choose to sequentially number invoices in Oracle Receivables or journal entries in Oracle General Ledger. See also voucher number.

E

EFT

See Electronic Funds Transfer (EFT).

Electronic Funds Transfer (EFT)

A method of payment in which your bank transfers funds electronically from your bank account into another bank account. In Oracle Payables, your bank transfers funds from your bank account into the bank account of a supplier you pay with the Electronic payment method.

exchange rate

A rate that represents the amount of one currency that you can exchange for another at a particular point in time. Oracle Applications use the daily, periodic, and historical exchange rates you maintain to perform foreign currency conversion, revaluation, and translation.

exchange rate type

A specification of the source of an exchange rate. For example, a user exchange rate or a corporate exchange rate. See also corporate exchange rate, spot exchange rate.

exchange rate variance

The difference between the exchange rate for a foreign-currency invoice and its matched purchase order. Payables tracks any exchange rate variances for your foreign-currency invoices.

F

folder

A flexible entry and display window in which you can choose the fields you want to see and where each appears in the window. See: Customizing the Presentation of Data.

foreign currency

A currency that you define for your set of books for recording and conducting accounting transactions in a currency other than your functional currency. See also exchange rate, functional currency.

foreign currency exchange gain or loss

The difference in your functional currency between the invoiced amount and the payment amount when applying a receipt to an invoice. A realized gain exists if the receipt amount in your functional currency exceeds the invoice amount; a loss exists if the invoice amount in your functional currency exceeds the amount of the payment. Such gains and losses arise from fluctuations in exchange rates of the receipt currency between the invoice date and the payment date. See also realized gain or loss, unrealized gain or loss.

function security

An Oracle Applications feature that lets you control user access to certain functions and windows. By default, access to functionality is not restricted; your system administrator customizes each responsibility at your site by including or excluding functions and menus in the Responsibilities window.

functional currency

The principal currency you use to record transactions and maintain accounting data within Cash Management. The functional currency is usually the currency in which you perform most of your business transactions. You specify the functional currency for each set of books in the Set of Books window.

G

gain

See realized gain or loss, unrealized gain or loss.

general ledger

The accounting system that tracks the journal entries that affect each account.

GL Date

The date used to determine the correct accounting period for your accounting transactions.

H

I

import journal entry

A journal entry from a non-Oracle application, such as accounts payable, accounts receivable, and fixed assets. You use Journal Import to import these journal entries from your feeder systems.

interface table

A temporary database table used for transferring data between applications or from an external application. See also database table.

invoice

A document that you create in Oracle Receivables that lists amounts owed for the purchases of goods or services. This document also lists any tax, freight charges, and payment terms.

invoice number

A number or combination of numbers and characters that uniquely identifies an invoice within your system. Usually generated automatically by your receivables system to avoid assigning duplicate numbers.

J

journal entry

A debit or credit to a general ledger account. See also manual journal entry.

Journal Import

A Oracle General Ledger program that creates journal entries from transaction data stored in the Oracle General Ledger GL_INTERFACE table. Journal entries are created and stored in GL_JE_BATCHES, GL_JE_HEADERS, and GL_JE_LINES.

K

L

lamp

A one-word message that Oracle Applications displays in the message line of any window to notify you that a particular feature is available for a particular field.

lockbox

A service that commercial banks offer corporate customers to enable them to outsource their accounts receivable payment processing. Lockbox processors set up special postal codes to receive payments, deposit funds and provide electronic account receivable input to corporate customers.

M

manual clearing

The process where, prior to receiving their bank statement, users mark transactions that are known to be cleared through the bank, which creates an up-to-date cash position. These cleared transactions are still available for the actual reconciliation process. Once the bank statement is received, Oracle Cash Management can automatically perform all appropriate reconciliation steps. See also clearing.

manual reconciliation

The process where you manually reconcile bank statement details with the appropriate batch or detail transaction. Oracle Cash Management generates all necessary accounting entries. See also AutoReconciliation, reconciliation.

manual journal entry

A journal entry you enter at a computer terminal. Manual journal entries can include regular, statistical, intercompany and foreign currency entries.

A journal entry you create online using the Enter Journals window. Manual journal entries include regular, statistical, interfund, and foreign currency journal entries.

matching

The process where batches or detailed transactions are associated with a statement line based on the transaction number, amount, currency and other variables, taking Cash Management system parameters into consideration. In Oracle Cash Management, matching can be done manually or automatically. See also clearing, reconciliation.

message line

A line on the bottom of a window that displays helpful hints or warning messages when you encounter an error.

miscellaneous receipts

A feature that lets you record payments that you do not apply to debit items, such as refunds and interest income.

multi-org

See multiple organizations

multiple organizations

The ability to define multiple organizations and the relationships among them within a single installation of Oracle Applications. These organizations can be sets of books, business groups, legal entities, operating units, or inventory organizations.

Multiple Reporting Currencies

An Oracle General Ledger feature that allows you to report in your functional currency and in one or more foreign currencies.

N

NACHA

National Automated Clearing House Association. This is the US system for making direct deposit payments to employees.

O

open interface transaction

Any transaction not created by an Oracle Financial Applications system. See also Reconciliation Open Interface.

organization

A business unit such as a company, division, or department. Organization can refer to a complete company, or to divisions within a company. Typically, you define an organization or a similar term as part of your account when you implement Oracle Financials. See also business group.

other receipts

See miscellaneous receipts.

P

payment

Any form of remittance, including checks, cash, money orders, credit cards, and Electronic Funds Transfer.

payment date

The date on which the status of an invoice is updated to 'Paid.' Cash Management uses the payment date as the GL Date for each payment.

payment method

In Payables, you can assign a payment method to suppliers, supplier sites, invoice payment schedule lines, and payment formats. You can then assign one or more payment formats to a bank account. You can have multiple payment formats for each payment method. Receivables payment methods let you associate receipt class, remittance bank and receipt account information with your receipt entries. You can define payment methods for both manual and automatic receipts. In Payroll, there are three standard payment types for paying employees: check, cash and direct deposit. You can also define your own payment methods corresponding to these types.

payroll

A group of employees that Oracle Payroll processes together with the same processing frequency, for example, weekly, monthly or bimonthly. Within a Business Group, you can set up as many payrolls as you need. See also payroll run.

payroll run

The process that performs all of the payroll calculations. You can set payrolls to run at any interval you want. See also payroll.

Positive Pay Program

Third party or custom software that formats the output file of the Payables Positive Pay Report into the format required by your bank, and transmits it electronically to your bank. This prevents check fraud by informing the bank which checks are negotiable or non-negotiable and for what amount.

posting

The process of updating account balances in your general ledger from journal entries. You can initiate posting in Oracle Payables and Oracle Receivables. You must use your general ledger to create journal entries and post the journal entries to update your account balances. Note that Oracle Applications sometimes use the term posting to describe the process of transferring posting information to your general ledger.

See also Journal Import.

profile option

A set of changeable options that affect the way your applications run. In general, profile options can be set at one or more of the following levels: site, application, responsibility, and user. Refer to the Cash Management Profile Option appendix for more information.

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R

realized gain or loss

The actual gain or loss in value that results from holding an asset or liability over time. Realized gains and losses are shown separately on the Income Statement. See also unrealized gain or loss, foreign currency exchange gain or loss.

receipt class

Automatic receipt processing steps that you relate to your payment methods. You can choose whether to confirm, remit, and clear automatic receipts.

receipts

Payment received in exchange for goods or services. These include applied and unapplied receipts entered within the GL date range that you specified.

receivable activities

Predefined Oracle Receivables activities used to define the general ledger accounts with which you associate your receivables activities.

reconciliation

The process of matching bank statement lines to appropriate batches and detail transactions and creating all necessary accounting entries. See also reconciliation tolerance, AutoReconciliation.

Reconciliation Open Interface

This interface lets you reconcile with payments and receipts from external systems.

reconciliation tolerance

A variance amount used by Cash Management's AutoReconciliation program to match bank statement lines with receivables and payables transactions. If a transaction amount falls within the range of amounts defined by a bank statement line amount, plus/minus the reconciliation tolerance, a match is made. See also AutoReconciliation.

remittance bank

The bank in which you deposit your receipts.

report set

A group of reports that you submit at the same time to run as one transaction. A report set allows you to submit the same set of reports regularly without having to specify each report individually. For example, you can define a report set that prints all of your regular month-end management reports.

S

shorthand flexfield entry

A quick way to enter key flexfield data using shorthand aliases (names) that represent valid flexfield combinations or patterns of valid segment values. Your organization can specify flexfields that will use shorthand flexfield entry and define shorthand aliases for these flexfields that represent complete or partial sets of key flexfield segment values.

spot exchange rate

A daily exchange rate you use to perform foreign currency conversions. The spot exchange rate is usually a quoted market rate that applies to the immediate delivery of one currency for another.

status line

A status line appearing below the message line of a root window that displays status information about the current window or field. A status line can contain the following: ^ or v symbols indicate previous records before or additional records following the current record in the current block; Enter Query indicates that the current block is in Enter Query mode, so you can specify search criteria for a query; Count indicates how many records were retrieved or displayed by a query (this number increases with each new record you access but does not decrease when you return to a prior record); the <Insert> indicator or lamp informs you that the current window is in insert character mode; and the <List> lamp appears when a list of values is available for the current field.

supplier

A business or individual that provides goods or services or both in return for payment.

SWIFT940

A common format used by many banks to provide institutional customers with electronic bank statements. If your bank provides you with this type of statement, you can use Bank Statement Open Interface to load your bank statement information into Oracle Cash Management. See also Bank Statement Open Interface, bank statement.

T

tablespace

The area in which an Oracle database is divided to hold tables.

tolerance

See reconciliation tolerance.

transaction code

You define transaction codes that your bank uses to identify different types of transactions on its statements. For example, your bank may use transaction codes T01, T02, and T03 to represent debit, credit, and stop payment.

transaction type

Transaction types determine how Cash Management matches and accounts for transactions. Cash Management transaction types include Miscellaneous Receipt, Miscellaneous Payment, Non-Sufficient Funds (NSF), Payment, Receipt, Rejected, and Stopped.

U

unrealized gain or loss

The measured change in value of an asset or liability over time. Oracle Payables provides a report (the Unrealized Gain and Loss Report) that you can submit from the standard report submission form at any time to review your unrealized gains and losses. See also realized gain or loss.

V

value

Data you enter in a parameter. A value can be a date, a name, or a code, depending on the parameter.

value set

A group of values and related attributes you assign to an account segment or to a descriptive flexfield segment. Values in each value set have the same maximum length, validation type, alphanumeric option, and so on.

vendor

See supplier.

voucher number

A number used as a record of a business transaction. A voucher number may be used to review invoice information, in which case it serves as a unique reference to a single invoice.

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X

Y

Z