Receipt class and methods in Fusion Receivables

Define Receipt Classes:

Receipt Class determines the flow of the Customer Receipt in the system. It determines receipt creation method, remittance method, clearance method and which receipt method associated, and bank account details will use for receipt.

Receipt classes specifies whether receipts are created manually or automatically. For manual receipts, you can specify whether to automatically remit it to the bank and/or clear your accounts. For automatic receipts, you can specify a remittance and clearance method, and whether receipts using this class require confirmation. The processing step for any receipt includes – confirmation, remittance, and reconciliation. Receipt class determines processing steps for the receipts. Receipt methods are assigned to the receipt class.

 

Receipt Creation Methods:

Remittance Methods:

Remittance method decides when to treat a receipt as remittance.
Use the remittance method to determine the accounts to use for receipts that you create using the receipt method assigned to this receipt class.

Standard

When we select remittance method as Standard means we need to create remittance batch to tell oracle that the receipts has remitted.

This remittance method is a straightforward remittance, where you request for X amount as payment, and X amount is withdrawn from your customer's account and transferred to your account. When the remittance method is Standard, GL distributions for the receipt will use the GL account defined for Remittance in the Bank Accounts form. 

Factoring

In this remittance method, you sell to the bank your receipts in exchange for cash. GL distributions for receipts using this remittance method will use the Factoring GL account defined for Factoring in the Bank Accounts form (see Assign Remittance Banks below). Note that the GL account for Factoring will not be enabled, unless the Remittance method is Factoring or Standard and Factoring.

Note: What is factoring in simple words?

Definition of Factoring: Factoring is a financial service in which the business entity sells its bill receivables to a third party at a discount in order to raise funds.

Standard and Factoring

Receivables selects receipts assigned to this receipt class for remittance regardless of the batch remittance method. In this case, you can specify either of these remittance methods Standard or factoring when creating your remittance batches.

No Remittance

No Remittance means a receipt is remitted as soon as it is entered. For Manual receipts only. Remittance is not required for manual receipts assigned to this receipt class.

How to Clear Receipts:

The clearance method determines the clearing behaviour for receipts with a given receipt class. Which method makes the most sense for the receipt class? Your options are to clear it Directly, By Automatic Clearing, or By Matching.

Keep in mind the following scenarios:

• If you're using Cash Management to reconcile your receipts, you can use the methods By Automatic Clearing and By Matching. These methods require receipts to be reconciled prior to posting them to the general ledger cash account.
• The clearance method Directly assumes receipts are cleared at the time of receipt entry and require no further processing. This is the method for the kids who enjoy clearing the chalkboard after class.

Clearance Methods:

Directly:

This method is for receipts that you don't expect to be remitted to the bank and subsequently cleared.

It is assumed that these receipts are cleared at the time of receipt entry and require no further processing.

By Automatic Clearing:

Use this method to clear receipts using the Clear Receipts Automatically program.

Note: You can also clear receipts using this method in Cash Management.

By Matching:

Choose this method if you want to clear your receipts manually in Oracle Cash Management, so first the status of receipt would be confirmed and once reconciled in cash management then receivables will change the status to be cleared.

Create the New receipt method with the '+' icon as created below.

Receipt Method and Remittance bank account:

Receipt Method Associates with the Receipt Class. Receipt Method basically used to determine the Banking information for the Customer Receipt. With Receipt Method, We attach Bank Accounts and associates GL accounts with that bank.

Receivables uses receipt methods to account for your receipt entries and applications. Receipt methods also determine a customer's remittance bank information.

You can assign multiple remittance banks to each receipt method, but only one bank account can be the primary account for each currency.

Receipt methods are assigned to receipt classes and perform the following functions:

• Specify accounting for receipt entries and applications
• Determine customer remittance bank account information
• Configure automatic receipt processing and fund transfer error handling

You can assign multiple remittance banks to each receipt method, but only one bank account can be the primary account for each currency. For each remittance bank branch account assigned to a receipt method, you must define all of your receipt accounts. You can then assign your receipt methods to your receipt sources to use with your AutoLockbox and manually entered receipts.

You remit receipts in several currencies for a single receipt method, then you must enter at least one remittance bank per currency. At least one of these remittance banks must be primary.

The receipt class you assign to each of your receipt methods determines the processing steps that Receivables requires for receipts that you create using this receipt method. These steps include whether to require confirmation, remittance, and bank clearance for receipts that you create with a specific receipt class.

Different information required for different creation methods: