Saturday, 15 November 2014

Basic Terms in Accounts Receivable

1. Invoice

Invoice in AR is used to bill the customer for the goods and the services offered (rendered).

2. Debit Memo

Debit Memos in AR have the similar concept as that of an invoice. A debit memo could be used to invoice the customer for certain miscellaneous expenses incurred which were not included in the actual invoice for the product/service.

3. Credit Memo

Credit Memos with negative amount are typically used for crediting the customer’s account with some balance.The idea behind creating a credit memo is to reduce the customer invoice balance.

4. Deposit/Advance Creation Process and Apply to Invoices

Deposits are entered in the AR system to capture the customer advances and apply them to the AR invoices
5. Lockbox

Auto Lockbox automatically creates receipts in Receivables using electronic information that your bank provides. Receivables let you specify the payment method for each Lockbox you define. Payment methods provide the default accounting information for receipts you create through Auto Lockbox. Receivables display active Lockboxes as list of values choices in the Submit Lockbox Processing window.

6. Adjustment

An adjustment as the name signifies is used for adjusting some of the amount in invoices. For e.g. if some insignificant amount is outstanding a particular invoice, it can be adjusted for the purpose of closing the invoice.

7. Dunning Letters

These letters are used to chase up receivables from customers. These letters are used to remind the customer about the due payments.

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  1. Regards
    Sridevi Koduru (Senior Oracle Apps Trainer
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