Today world credit cards have become part in the our daily life. Not only have credit cards and different electronic payment options,changed the way that consumers manage their personal finances, these have also enabled companies to reduce the risk associated with receivables and improve their cash flow, and reduce the product delivery timeline.Specially in some sectors where there is direct interaction with Consumer , it is important to manage and do the efficient credit processing and recording hundreds of credit card/ACH remittances in Receivable area.
During in implementation, many times it requires the ability to more efficiently manage receipts for credit card or ACH transactions, therefore this post will brief you on the seeded functionlity offered within EBS.
Oracle Receivables integrates with any feeder system, such as Oracle Order Management, to automatically record and process customer payments made before the delivery of goods or services , such of business Scenario that have company companies who is selling there product through internet channel, which is very similar as buying a Dell laptop from internet and paid most of time credit card transactions or Internet banking. Oracle in there EBS environment refers to these transactions as prepayments.
Oracle receivables creates prepayments as receipts before the related invoices are created. Later, a business event from your feeder system triggers the invoicing process in Receivables, and an AutoInvoice postprocess matches the prepaid receipts to their related invoices.
When you determine that a prepayment is required, you record the payment information in your feeder system, and the information is passed to Oracle Receivables.
What is expected in the setup side is , in Oracle Order Management, if an order is to be evaluated for prepayment, the underline order must utilize both a Payment Term (Collect Credit Card Prepayment check box) at the order level that enables prepayments and a Payment Type of Credit Card, payment terms for an order line are ignored. At the time of order booking, Order Management will determine if the order is Prepaid and make a call to the Oracle Receivables Receipts API for receipt creation.
The Oracle Receivables Receipts API creates a prepayment receipt in Receivables, and processes the receipt using the payment information provided.
Receivables immediately applies all prepayment receipts against the Prepayment application type, and records accounting according to a special prepayment receivables activity. Receivables reserves these receipts for subsequent reapplication to the invoice or invoices that are eventually generated for the order.
When the order is later sent to Receivables for invoicing, AutoInvoice creates an invoice that is marked as prepaid . Additionally, AutoInvoice initiates a postprocess matching program to identify any open prepaid invoices and search for matching prepayment receipts.
Prepayment matching occurs when a prepayment receipt is created from a feeder system such as Order Management. When the subsequent order is shipped and an invoice is created in AR, the AR Automatic Receipts program automatically creates an application of the prepayment against the Transaction. This ONLY occurs if the Prepayment and Transaction stem from the SAME ORDER. If the order is different then a manual application is required to apply the prepayment.
The other functionality for AR Prepayments is , you can also be modified or cancelled for the orders processed. You can:
- Increase the order amount
- Decrease the order amount: For credit card prepayments, you can refund the original credit card for a full or partial refund.
- Change an order without changing the order amount: If an order change does not result in a price change, then Receivables does nothing.
- Cancel an order: For credit card prepayments, Receivables refunds the original credit card using standard credit card refund functionality.For prepayments made with other payment types, Receivables places the refund amount on account.
- Reallocate prepaid funds towards an overdue invoice: You can unapply a prepayment receipt and manually reapply the amount to another invoice. When you later import the order into Receivables using AutoInvoice, Receivables considers the prepaid invoice that was associated with the receipt to be unpaid and treats it as a typical overdue invoice.
What's the difference between Deposits and pre-payments?
In reality , it looks very similar kind of process...
A prepayment is payment in advance of the delivery of goods or services.As discussed above , receivables creates prepayments as receipts before the related invoices are created. Later, a business event from your feeder system triggers the invoicing process in Receivables, and an AutoInvoice postprocess matches the prepaid receipts to their related invoices.
On the other hand Deposit a payment/receipt made against a Transaction or Invoice in advance.
How does a Receipt applied to a Credit Card Prepayment that is created and captured in Oracle Order Management get applied to the Invoice once it has been interfaced via AutoInvoice?
The matching of a Credit Card Prepayment Receipt and the associated Invoice is completed when the Invoice is interfaced into Oracle Receivables via AutoInvoice. The AutoInvoice process will look for all Invoice marked as 'Prepaid'. Once it finds one, it will then unapply the Prepayment from the Receipt that was created via the API AR_PREPAYMENTS_PUB.create_prepayment, and apply the Invoice.