AR Deposit : Details, setup, Flow, Accounting and API

Posted on September 3rd, 2008 by Sanjit Anand | Print This Post | Email This Post

Oracle AR supports two types of commitments:

• Deposit – This records a customer’s prepayment for goods or services that you will provide in the future.
• Guarantee : This records a contractual agreement with your customer to conduct a specific amount of business over a defined period of time.

Oracle Define these two Receivables Transactions as:

• Deposit :Bill Customers for Contractual Agreements
• Guarantee :A Contractual Agreement that is referenced by invoices.Bill Customers for the items on the invoices not the Guarantee

Therefore ,deposits is Money Received in advance from a Customer for supplying goods to the Customer. Once Invoice is raised on Customer, that Deposit money is adjusted against the Invoices we raise onto Customer.

Standard AR Deposits Procedure

• Step 1 Create Deposit
  Once in the Transactions window the initial entries will be very similar to that required for an invoice. The only differences here are transaction Class should be Deposit and the Type should be Commitment.
• Step 2 Bill Customer for Deposit
  This is the stage when customer needs to make a payment for the deposit.
• Step 3 Create Invoice
  An invoice is created for same or related customer.
• Step 4 Apply Deposit to Invoice
  Deposits can be applied against invoices. Deposit balances refer to the amount due remaining on a deposit. The balance is reduced by receipts and credits.
• Step 5 Collect Deposit from Customer
  Deposits should be collected from customers and applied like any other receipt.

How its work :Accounting Flows and Transactions

1. Lets assume customer agrees to pay 500 as deposit. Deposit for $500 is created. (Not received)
2. Customer billed for deposit. Deposit and commitment balance $500.
3. Invoice for $100 is created for customer.
4. Deposit applied to invoice. Invoice balance =0, Deposit balance=$500, and commitment balance=$400.
5. Customer pays deposit. Invoice balance=$0, Deposit balance=$0, and commitment=$400

• EVENT 1 : Customer agrees to pay deposit:
  Dr Receivables (deposit) 500
  Cr Unearned revenue 500
• EVENT 2 : When an invoice of 100 is applied to the deposit
  Dr Receivables (invoice) 100
  Cr Revenue 100
• EVENT 3
  Dr Unearned revenues 100
  Cr Receivables (invoice) 100
• EVENT 4
  When payment of $500 is received
  Dr Cash 500

Journal Entries

Deposit Application Program Interface (API)

• A new approach for creating deposit commitments
• Assigns non-revenue sales credits

Deposit Application Program Interface benefits

• Control over how and when deposits are created
• Minimize the amount of parameters needed
• Validate to ensure quality data
• Provide messages to aid in exception handling
• Immediate Results

The API’S

Public API’s is AR_DEPOSIT_API_PUB

These APIs provide an extension to existing functionality of creating and manipulating deposits.

• ar_deposit_api_pub.create_deposit: creates a single deposit and completes it.
• ar_deposit_api_pub.insert_non_rev_salescredit: Creates non revenue sales credit for a deposit.

The API’S Availability

This API works both in R11i and R12.You can check the details at irep. Here is sample code for Deposite creation.

Technical Flow

Once you create Commitment(Deposit) , these are Oracle table get affected.

• RA_CUSTOMER_TRX_ALL
• RA_CUSTOMER_TRX_LINES_ALL
• RA_CUST_TRX_LINE_GL_DIST_ALL
• AR_PAYMENT_SCHEDULES_ALL

Lets analyse how data entry affect tables.

Deposit number : HubDep01
Bill to : OracleAppsHub.com
Deposit Date : 15-Jul-2008
Amount : 100

Once you enter these table get affected.

RA_CUSTOMER_TRX_ALL

RA_CUSTOMER_TRX_LINES_ALL

RA_CUST_TRX_LINE_GL_DIST_ALL

AR_PAYMENT_SCHEDULES_ALL

Oracle Documentation

• 11i Oracle Receivables API User Notes - PDF format
• R12 Oracle Receivables API User Notes - PDF format

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