Manual transaction and billing adjustments are an essential part of financial accounting. They allow businesses to record transactions that are not automated or to make changes to existing ones. In Receivables, the creation of debit memos, credit memos, on-account credits, chargebacks, commitments, and invoices can be defined using transaction types. This enables businesses to customize and accurately record these adjustments, ensuring that their financial records remain accurate and up-to-date.
Receivables determine the default revenue, receivable, freight, tax, unearned revenue, unbilled receivable, finance charges, and Auto Invoice clearing accounts for transactions created using this type if Auto Accounting is dependent on the transaction type. Receivables use the general ledger accounts along with your Auto Accounting rules.
To expedite data entry in the Transaction and Credit Transactions windows, transaction types with invoice sources can be linked in the Transaction Sources window.
Creating a Manual Transaction
- Navigation > Home page > Application Section> Receivables >Billing
Fig 1.1 Home Page
- It will be navigated to the billing work area.
- Click on Task Icon > Create transaction
- Billing Transactions can be invoices, debit memos, or credit memos.
Fig 1.2 Task Associated
- As an example Invoice is created here. A transaction has a header and lines, the header is divided into
- General Information
- Select the Business Unit from the drop-down, and the currency associated with the BU will also be selected.
- Select the other mandatory fields Transaction source, Transaction type and transaction number will be automatically generated
- Select the Bill to Customer name, Account details, and Payment term associated with the Bill to a customer will be automatically selected.
Fig 1.3 Bill to Details
Fig 1.4 Details of an Invoice
- Once the payment term is selected, the due date is calculated.
- Upon the Invoice lines information, Item, description, or memo line should be selected
- The description describes the goods or services that were sold to the customer.
- When creating an invoice, include at least one line.
- All of the required information must be entered to complete the billing transaction.
Select the Dropdown on “Complete and Create Another” and click on “Complete and Review “
Fig 1.5 Transaction Completion
- Completing entails finalizing and validating the preceding activities.
- The invoice now displays the status completely.
Fig 1.6 Review of Transaction
- Now, by clicking the view image, a preview of the image that the customer will receive will be available: Bill to Address, Ship to address, Invoice number, Due amount, and description of the services that have been delivered to the customer.
Fig 1.7 Preview Image of Transaction
Create billing adjustments against Invoice
- A billing adjustment raises or lowers the amount owed on a transaction.
- Navigate to the application section of the homepage and select Receivable> Billing
- Select the transaction number which needs to be adjusted.
- Click on the task Icon > Manage Transactions > Select a specific customer in the bill to customer field, and then click on Execute.
- A list of transactions pertaining to that particular customer will be displayed.
- Select any of the transactions to view the transaction details such as business unit, customer and location, and transaction total.
From the actions menu, select Manage Adjustments > Create.
Fig 2.1 Creating Billing Adjustments
- Adjustment, as well as receivables activity, can be entered (bad debts)
- Choosing an activity will create accounting entries to reflect these billing corrections
- Adjustment type (In this case, line adjustment) and adjustment amount are also included, as well as adjustment reason and comments associated with this correction (information about why we are processing this billing), and then click submit.
Fig 2.2 Billing Adjustments Details
- The information message states that the user cannot approve the adjustments because they exceed the approval limits and the adjustments have been created.
Fig 2.3 Completion of Billing Adjustments
- If an adjustment is created without provisioning for approval limits, or if the amount of the adjustment exceeds our defined approval limits, the adjustment will be subject to approval before it updates the transaction’s balance. Click on OK
- The adjustments’ key information such as amount, comments, and adjustment status are all displayed.
- The adjustment status, in this case, is “Pending approval.”
Fig 2.4 Billing Adjustments Review
- Customers can create their desired transactions according to their requirements.
- Customers may not depend on automatic project contract invoices in case of any discrepancies in the Project setup.
Points to Consider:
- A person with appropriate approvals limits must review the adjustment and decide whether to accept, reject, or request additional information.
- Since Manual transactions are customized transactions the details of the transactions should be checked with the rates for future reconciliation.
Author: Manojkrishnan KS, Oracle ERP Cloud Consultant