Define system options to customize your Receivables environment. During Receivables setup, you specify your accounting method, set of books, tax method and accounts, customer and invoice parameters, and how the AutoInvoice and Automatic Receipts programs will run. If you are planning to use the Bills Receivable Workbench, then you need to perform the necessary implementation steps and enable Bills Receivable.

Prerequisites
❑ Define your set of books.
❑ Define your AutoCash Rule sets.
❑ Define Grouping Rules.
❑ Define Key Flexfield Segments - Location, Territory.

 

Use the Accounting tabbed region to specify an accounting method and set of books and define your accounting flexfields. You can also choose whether to use automatic journal import, enable header level rounding, and specify how many days should be included in each posting cycle.

1. Enter the Accounting Method to use for your set of books. Enter ’Accrual’ if you want your billing system to record revenue from invoices, debit memos, and chargebacks. When you use this method, Receivables debits your cash account and credits your receivables account upon payment of a debit item.
Enter ’Cash Basis’ to recognize revenue at the time you receive payment for an invoice, debit memo, or chargeback. Receivables debits cash and credits revenue when using the Cash Basis method.
Attention: Once you enter and save this information, you cannot update your Accounting Method.

2. If your accounting method is Accrual, enter your Realized Gains and Realized Losses Accounts. Receivables posts changes in your functional currency to your Realized Gains or Losses account in your general ledger if there are differences in exchange rate gains or losses.
For example, if the exchange rate for a foreign currency invoice is 1.7 and the exchange rate of your payment for this invoice is 2.0, Receivables posts the difference as a gain to your Realized Gains account. Receivables provides descriptions of each segment, verifies that all flexfield segments are active, and ensures that you enter a valid combination.

3. Enter the Tax Account to use as the default value in the Tax Codes and Rates window.

4. If your accounting method is Cash Basis, enter your Unallocated Revenue Account. Receivables uses this account when you apply a cash receipt with a balance other than zero to an invoice with a zero balance.

5. Enter a Cross Currency Rounding Account. Receivables uses this account to record any rounding error amounts created during a cross currency receipt application for currencies that have a fixed rate relationship. You need to define a rounding error account if you create cross currency receipts.

6. Define a Header Rounding Account and enable Header Level Rounding (optional). Receivables uses this account to record any rounding differences that occur when converting foreign currency transactions to your functional currency.
Warning: After you enable Header Level Rounding and save your work, you cannot disable the feature.

7. To import the batches of transaction records that you post into your general ledger, check the Automatic Journal Import box. The value you enter becomes the default value for the Run GL Journal Import field in the Run General Ledger Interface window.

8. Enter the number of Days per Posting Cycle. This lets you process the transactions you are posting in smaller groups to ensure that you do not run out of rollback space during posting. For example, if your accounting period is 30 days and you set this value to 30, the posting program uses only one cycle. If your accounting period is 30 days and you set this value to 17, the posting program uses two cycles. We recommend that you set this field to a value that is less than the number of days in your accounting period.