In Oracle functionality of standard sales order the Account
receivable invoice is raised as an when the sales order is shipped in OM
module. And if end customer finds the goods not acceptable then a RMA
is created in system to cancel the previous transaction. This process
works fine but has its own overheads of multiple transaction entry and
admin overhead. Customers in some industries have a need to defer
invoicing and/or revenue recognition for shipped goods until their end
customer receives the shipment and formally accepts the material.
Specifically most of Japanese customers do have this specific need.In
this post I will discuss about this new feature as well as will try to
understand the key setup involved.
Till 11i Oracle was not having this option but in Oracle R12 Customer acceptance/rejection can be captured from customers, customer service representatives, or from an external system. With the Introduction of Customer Acceptance feature in Release 12, the order fulfilment flow now has an additional step called “customer acceptance”, where customer accepts the goods either before or after billing happens.
This feature enables customer to defer invoicing and/or revenue recognition for the shipped goods till the customer receives the shipment and accepts the material.
Oracle has broadly classified the acceptance in two categories. One is called explicit acceptance and another one is called as implicit Acceptance. In Explicit acceptance customers or their representative can perform the acceptance by log into the self-service Order Information portal or through import API or recording the same in sales order form. In number of cases these confirmation come through phone or email acknowledgement and acceptance is recorded by sales representative in sales order form. In implicit acceptance an expiration period is pre defined and after the expiration period is over a concurrent request is submitted in oracle to complete the acceptance process.
Oracle Order Management supports only full acceptance or total rejection for each outbound order line.
With the introduction of Customer acceptance, Oracle Order Management process flows are now categorized in two categories.
1 Pre Billing Acceptance: Invoices will only be interfaced to AR once the acceptance is recorded (explicit or implicit)
2. Post Billing Acceptance: Invoices are created but revenue will be recognized after acceptance is recorded. (Explicit or implicit)
By default this feature will come as DISABLED and Oracle provide the option to enable this functionality.
Key Setup
1. Enabling of the fulfilment Acceptance at the Order
OMsystem parameter “Enable Fulfilment Acceptance” (New in R12) at Operating Unit level needs to be enabled by setting its value as ‘Yes’
2. Modify function security for a given responsibility by adding two functions:
a. Sales Orders: Fulfilment Acceptance – This attribute will be available in the Actions LOV.
b. Sales Orders: Update Acceptance Attributes – This should be attached in sales order menu – XXX_ONT_ Sales_Order.
3. Deferral reason setup
This can be done through Revenue Management Super User- Contingency Definition.
For Prebilling deferral reason ‘removal event’ should be specified as ‘Invoicing’ and for postbilling deferral reason the ‘removal event’ should be specified as ‘customer acceptance’.
For a deferral reason to be implicit, we need to specify the optional “Time attribute” fields.OM supports only Ship Confirm date as the Event attribute. The Days added to Event Attribute gets defaulted as Acceptance Expire days inSales Order Line.
Define assignment rules is used to assign the deferral reason to customer, site, item, etc. and The deferral reason defined in AR’s Revenue Management setup page is actually used as Acceptance Name in Order Management
Till 11i Oracle was not having this option but in Oracle R12 Customer acceptance/rejection can be captured from customers, customer service representatives, or from an external system. With the Introduction of Customer Acceptance feature in Release 12, the order fulfilment flow now has an additional step called “customer acceptance”, where customer accepts the goods either before or after billing happens.
This feature enables customer to defer invoicing and/or revenue recognition for the shipped goods till the customer receives the shipment and accepts the material.
Oracle has broadly classified the acceptance in two categories. One is called explicit acceptance and another one is called as implicit Acceptance. In Explicit acceptance customers or their representative can perform the acceptance by log into the self-service Order Information portal or through import API or recording the same in sales order form. In number of cases these confirmation come through phone or email acknowledgement and acceptance is recorded by sales representative in sales order form. In implicit acceptance an expiration period is pre defined and after the expiration period is over a concurrent request is submitted in oracle to complete the acceptance process.
Oracle Order Management supports only full acceptance or total rejection for each outbound order line.
With the introduction of Customer acceptance, Oracle Order Management process flows are now categorized in two categories.
1 Pre Billing Acceptance: Invoices will only be interfaced to AR once the acceptance is recorded (explicit or implicit)
2. Post Billing Acceptance: Invoices are created but revenue will be recognized after acceptance is recorded. (Explicit or implicit)
By default this feature will come as DISABLED and Oracle provide the option to enable this functionality.
Key Setup
1. Enabling of the fulfilment Acceptance at the Order
OMsystem parameter “Enable Fulfilment Acceptance” (New in R12) at Operating Unit level needs to be enabled by setting its value as ‘Yes’
2. Modify function security for a given responsibility by adding two functions:
a. Sales Orders: Fulfilment Acceptance – This attribute will be available in the Actions LOV.
b. Sales Orders: Update Acceptance Attributes – This should be attached in sales order menu – XXX_ONT_ Sales_Order.
3. Deferral reason setup
This can be done through Revenue Management Super User- Contingency Definition.
For Prebilling deferral reason ‘removal event’ should be specified as ‘Invoicing’ and for postbilling deferral reason the ‘removal event’ should be specified as ‘customer acceptance’.
For a deferral reason to be implicit, we need to specify the optional “Time attribute” fields.OM supports only Ship Confirm date as the Event attribute. The Days added to Event Attribute gets defaulted as Acceptance Expire days inSales Order Line.
Define assignment rules is used to assign the deferral reason to customer, site, item, etc. and The deferral reason defined in AR’s Revenue Management setup page is actually used as Acceptance Name in Order Management
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