A receipt write-off is a receipt activity that cancels a small unapplied amount remaining on a receipt which your organization considers to be immaterial.
There are two methods available to create these receipt write-offs:
- Manual - a write-off is created from the Accounts Receivables Work Area
- Automatic - A write-off would be automatically created by running the Create Automatic Receipt Write-offs Program. It would look at the approval limits that are assigned to the user of running the process.
Does Receipt Write-Off support multi-currency processing?
The receipt write-off functionality in Receivables supports multi-currency processing. This means when you write off a foreign currency receipt, Receivables uses the conversion rate information from the original receipt for the write-off record. For scenarios when you adjust the conversion rate of a foreign currency receipt, Receivables will reverse the write-off with the original conversion rate, and then apply the new conversion rate to the write-off.
Receipt Write-off Configurations
The following are required to configure Receipt Write Offs:
Manage Receivables Activities
- Go to Functional Setup Manager > look for the Financials offering > Manage Receivables Activities
- Select a Business Unit and look for the activity type "Receipt Write-off" and click on Search
- Observe the GL account that Receivables is going to use to credit the receipt write-off amount.
For more information on Manage Receivables Activities, check out the article: "Overview of Managing Receivables Activities in Oracle Fusion Applications"
Users are going to be assigned approval limits in order to process receipt write-offs. This means is that there's a minimum and maximum approval amount that users can be provisioned with, so that they can process receipt write-offs accordingly. Now, these limits are going to be as specific to a currency as well.
Receivables System Options
- Go to Functional Setup Manager > Look for the Financials offering > Receivables Functional Area > Manage Approval Limits
- Search for the desired user and see that there are two different document types: Adjustment and then Receipt Write-off.
The below video shows how to set Receivables Approval Limits:
Receivables System Options
In the Receivables System Options, there are settings that that will be specific to a business unit. We would need to define write-off limit ranges per receipt, and receipt balances that are less or greater than this range will not be written off.
- Go to Functional Setup Manager > Look for the Financials offering > Receivables Functional Area > Manage Receivable System Options
- Select the Appropriate Business Unit and Go to the Cash Processing tab
- Take a look to the right towards the top, we see a range from write-off limit per receipt to write-off limit per receipt.
For more information on Managing Receivable System Options, check out the article: Overview of Managing Receivable System Options in Oracle Fusion Applications
Application Exception Rule Set
There are additional considerations regarding Lockbox functionality. After Lockbox processes and applies receipts, the AutoApply process uses the Application Exception Rule Set to determine how to manage over and underpayments. This configuration is used to manage remaining amounts after Lockbox has run.
If there is an overpayment, the Application Exception Rule indicates whether to refund the amount to the customer, place the amount on account, write off the amount, or leave the amount unapplied.
To View the "Application Exception Rule Set", Navigate to the Functional Setup Manager > Customer Billing > Manage Receipt Application Exception Rules.
There is an option there to require a user review. Perhaps there are certain overpayments that your organization considers to be immaterial, and you decide that you want to review their write-off before it is final.
Create Automatic Receipt Write-offs Program
This program will write off unapplied amounts and closed receipts. This program will still look at the approval limits of the user who is running the process. In addition to that, this program will look at the write-off limit ranges that have been established in the system options configuration. This process can be scheduled periodically to adjust for small remaining balances. The is also an option to create write-offs only for specific currencies and customers and an option to generate a report after the process has completed.
This process can be executed in Draft mode ("Generate Report Only") to see what the adjustments would before running the process in Final mode. It generates a report that allows you to review, and once confirmed, run the process again in Final mode. A Receivable activity needs to be specified to generate accounting distributions and credit the write-off amounts when running in Final Mode.
The below video demonstrates how to create a Manual Receipt Write-Off:
- Navigate to Receivables > Accounts Receivables
- In the Accounts Receivables work area, click on the Task panel and select Manage Receipts
- Search and Select for a receipt with a small, unapplied amount.
- Go down to the Receipt Details section and select the receipt application
- Click on Actions > More > Create Write-Off and specify the amount you want to Write-Off and click OK and proceed to Save.
- Verify that the unapplied amount is now $0.
- Go to Tools > Scheduled Processes > Schedule New Process
- Search and Select the process "Create Automatic Receipt Write-Off"
- Fill up the Mandatory Parameters such as Business Unit and Receipt Currency
- You can also fill up optional parameters, such as the Unapplied Amount or Percentage Receipt Date
For more full-detailed Tutorials and Tips, check out #TheOracleProdigy at https://lifeofanoracleprodigy.blogspot.com/
Follow The Oracle Prodigy on Facebook (https://www.facebook.com/theOracleProdigy/) and Twitter (https://twitter.com/D_OracleProdigy)
