ACCOUNT RECEIVABLES:
Transaction Workbench:
Invoices
DR Receivables
CR Revenue
CR Tax (if you charge tax)
CR Freight (if you charge freight)
Invoice Rules: Bills in Arrears, Bills in Advance
Accounting Rules: Fixed, Variable
If you enter an invoice with a Bill in Arrears invoicing rule with a three month fixed duration accounting rule, Receivables creates the following journal entries:
In the first period of the rule:
DR Unbilled Receivables
CR Revenue
In the second period of the rule:
DR Unbilled Receivables
CR Revenue
In the third and final period of the rule:
DR Unbilled Receivables
CR Revenue
DR Receivables
CR Unbilled Receivables
CR Tax (if you charge tax)
CR Freight (if you charge freight)
If you enter an invoice with a Bill in Advance invoicing rule, Receivables creates the following journal entries:
In the first period of the rule:
DR Receivables
CR Unearned Revenue
CR Tax (if you charge tax)
CR Freight (if you charge freight)
DR Unearned Revenue
CR Revenue
In all periods of the rule for the portion that is recognized.
DR Unearned Revenue
CR Revenue
Credit Memos
When you credit an invoice, debit memo, or chargeback through the Credit Transactions window, Receivables creates the following journal entry:
AR: Use Invoice Accounting for Credit Memos is set to No, Receivables uses AutoAccounting to determine the Freight, Receivables, Revenue, and Tax accounts.
DR Revenue
DR Tax (if you credit tax)
DR Freight (if you credit freight)
CR Receivables (Credit Memo)
AR: Use Invoice Accounting for Credit Memos is set to Yes, ceivables credits the accounts of the original transaction.
DR Receivables (Credit Memo)
CR Receivables (Invoice)
When you credit a commitment, Receivables creates the following journal entries:
DR Revenue
CR Receivables
You can delete an incomplete credit memo if the system option Allow Invoice Deletion is set to Yes.
If the profile option AR: Use Invoice Accounting for Credit Memos is set to Yes, Receivables credits the accounts of the original transaction. If this profile option is set to No, Receivables uses AutoAccounting to determine the Freight, Receivables, Revenue, and Tax accounts. Receivables uses the account information for on-account credits that you specified in your AutoAccounting structure to create your journal entries.
Receivables lets you update accounting information for your credit memo after it has posted to your general ledger. Receivables keeps the original accounting information as an audit trail while it creates an offsetting entry and the new entry.
Commitments
When you enter a deposit, Receivables creates the following journal entry:
DR Receivables (Deposit)
CR Offset Account
Use the AR: Deposit Offset Account Source profile option to determine how Receivables derives the Offset Account to credit for this deposit.
AR: Deposit Offset Account Source (Profile)
This option indicates which accounting source to use for a deposit's offset account. Receivables can use either AutoAccounting or the deposit's transaction type as the accounting source for the offset account.
When you enter an invoice against this deposit, Receivables creates the following journal entries:
DR Receivables (Invoice)
CR Revenue
CR Tax (if you charge tax)
CR Freight (if you charge freight)
DR Offset Account (such as Unearned Revenue)
CR Receivables (Invoice)
When you apply an invoice to a deposit, Receivables creates a receivable adjustment against the invoice. Receivables uses the account information that you specified in your AutoAccounting structure to create these entries.
When cash is received against this deposit,
Receivables creates the following journal entry:
DR Cash
CR Receivables (Deposit)
When you enter a guarantee, Receivables creates the following journal entry:
DR Receivables
CR Revenue
You can define multiple transaction types with a class of either Deposit or Guarantee to classify or group your commitments for reporting purposes. Transaction types for commitments also provide additional control features, such as accounting controls, printing controls, and other defaults
When you enter an invoice against this guarantee, Receivables creates the following journal entry:
DR Receivables (Invoice)
CR Revenue
CR Tax (if you charge tax)
CR Freight (if you charge freight)
DR Revenue
CR Receivables
When you apply an invoice to a guarantee, Receivables creates a receivable adjustment against the guarantee. Receivables uses the account information you specified in your AutoAccounting structure to create these entries.
When cash is received against this guarantee, Receivables creates the following journal entry:
DR Cash
CR Receivables (Invoice)
Receipts
When you enter a receipt, Receivables creates the following journal entries:
DR Cash
CR Receivables
When you fully apply a receipt to an invoice, Receivables creates the following journal entry:
DR Cash
DR Unapplied Cash
CR Unapplied Cash
CR Receivables
Note: These examples assume that the receipt has a Remittance Method of No Remittance and a Clearance Method of Directly.
When you enter an unidentified receipt, Receivables creates the following journal entry:
DR Cash
CR Unidentified
When you enter an on-account receipt, Receivables creates the following journal entry:
DR Cash
CR Unapplied
DR Unapplied
CR On-Account
When your receipt includes a discount, Receivables creates the following journal entry:
DR Receivables
CR Revenue
DR Cash
CR Receivables
DR Earned/Unearned Discount
CR Receivables
Receivables uses the default Cash, Unapplied, Unidentified, On-Account, Unearned, and Earned accounts that you specified in the Remittance Banks window for this receipt class.
When you enter a receipt and combine it with an on-account credit (which increases the balance of the receipt), Receivables creates the following journal entry:
DR Cash
CR Unapplied Cash
To close the receivable on the credit memo and increase the unapplied cash balance, Receivables creates the following journal entry:
DR Receivables
CR Unapplied Cash
When you enter a receipt and combine it with a negative adjustment, Receivables creates the following journal entries:
DR Cash
CR Receivables (Invoice)
DR Write-Off
CR Receivables (Invoice)
If you set up a Write-Off account when defining your Receivables Activity.
When you enter a receipt and combine it with a positive adjustment, Receivables creates the following journal entries:
DR Cash
CR Receivables (Invoice)
DR Receivables (Invoice)
CR Write-Off
When you write off the unapplied amount on a receipt, Receivables creates the following journal entries:
DR Unapplied Cash
CR Write-off
When you enter a receipt and combine it with a Chargeback, Receivables creates the following journal entries:
DR Cash
CR Receivables (Invoice)
DR Receivables (Chargeback)
CR Chargeback (Activity)
DR Chargeback (Activity)
CR Receivables (Invoice)
You set up a Chargeback account when defining your Receivables Activity.
To move funds between receipts, you can apply one receipt to another open receipt (also called netting receipts). For example, you can move funds from Receipt 1 to Receipt 2 by opening Receipt 2 in the Applications window, and selecting Receipt 1 in the Apply To field.
You can net receipts in Receivables. To net receipts, you apply a receipt against another open receipt, and then apply the resulting unapplied receipt balance to a transaction.
Open receipts include receipts that have:
Unapplied cash
On-account cash
Open claim investigation applications
You can also apply one receipt against another receipt that has an open claim investigation application. A claim investigation application results from either a noninvoice-related deduction or an overpayment.
Note: Receivables automatically updates Trade Management when you make a receipt application against a second receipt that has an open claim investigation.
Attention: When netting receipts, both receipts must be in the same currency.
Following the example above, Receivables creates these journal entries:
DR Unapplied Cash (Receipt 1)
CR Netting (Receipt 1)
DR Netting (Receipt 2)
CR Unapplied Cash (Receipt 2)
After this receipt-to-receipt application completes, Receipt 2 gains additional funds that you can then apply to a debit item.
You set up a Netting account when defining your Receivables Activity.
If both receipts are in a foreign currency, however, then you could have an exchange gain or loss when you net the receipts. The exchange gain or loss is realized on the main receipt (Receipt 2) at the time of receipt application (netting).
If you later adjust the exchange rate on Receipt 1 or 2, then Receivables:
Rolls back all accounting for both receipts.
Re-creates the accounting, including the netting application, using the adjusted exchange rate.
Recalculates the exchange gain or loss on whichever receipt is open in the Applications window.
Remittances
When you create a receipt that requires remittance to your bank, Receivables debits the Confirmation account instead of Cash. An example of a receipt requiring remittance would be a check before it was cashed. Receivables creates the following journal entry when you enter such a receipt:
DR Confirmation
CR Receivables
You can then remit the receipt to your remittance bank using one of the two remittance methods: Standard or Factoring. If you remit your receipt using the standard method of remittance, Receivables creates the following journal entry:
DR Remittance
CR Confirmation
When you clear the receipt, Receivables creates the following journal entry:
DR Cash
DR Bank Charges
CR Remittance
If you remit your receipt using the factoring remittance method, Receivables creates the following journal entry:
DR Factor
CR Confirmation
When you clear the receipt, Receivables creates a short-term liability for receipts that mature at a future date. The factoring process let you receive cash before the maturity date, and assumes that you are liable for the receipt amount until the customer pays the balance on the maturity date. When you receive payment, Receivables creates the following journal entry:
DR Cash
DR Bank Charges
CR Short-Term Debt
On the maturity date, Receivables reverses the short term liability and creates the following journal entry:
DR Short-Term Debt
CR Factor
Adjustments
When you enter a negative adjustment against an invoice, Receivables creates the following journal entry:
DR Write-Off
CR Receivables (Invoice)
When you enter a positive adjustment against an invoice, Receivables creates the following journal entry:
DR Receivables (Invoice)
CR Write-Off
Debit Memos
When you enter a debit memo in the Transactions window, Receivables creates the following journal entries:
DR Receivables
CR Revenue (if you enter line amounts)
CR Tax (if you charge tax)
CR Freight (if you charge freight)
DR Receivables
CR Finance Charges
On-Account Credits
When you enter an on-account credit in the Applications window, Receivables creates the following journal entry:
DR Revenue (if you credit line amounts)
DR Tax (if you credit tax)
DR Freight (if you credit freight)
CR Receivables (On-account Credit)
Receivables uses the Freight, Receivable, Revenue, and Tax accounts that you specified in your AutoAccounting structure to create these entries.
Once the on-account credit is applied to an invoice, the following journal entry is created:
DR Receivables (On-account Credit)
CR Receivables (Invoice)
Credit Card Refunds
When you unapply a receipt and reapply the receipt to a credit card refund, Receivables creates these journal entries:
DR Receivables
CR Unapplied
DR Unapplied
CR Receivable Activity (Clearing Account)
After you apply the receipt to a credit card refund, Receivables automatically creates a negative miscellaneous receipt in the amount of the refund and creates this journal entry:
DR Receivable Activity (Clearing Account)
CR Cash
Reversing a credit card refund
When you reverse a credit card refund, either by reversing the negative miscellaneous receipt or by unapplying the credit card refund activity, Receivables creates this journal entry for the negative miscellaneous receipt:
DR Cash
CR Receivable Activity (Clearing Account)
and Receivables creates this journal entry for the original payment receipt:
DR Receivables Activity (Clearing Account)
CR Unapplied
Claims
Creating an invoice related claim
When you record an invoice related short payment as a claim in the Applications window, Receivables creates the standard accounting entries for the invoice and for the receipt application. There are no additional accounting entries for the invoice related claim.
Creating a non-invoice related claim
When you record a non-invoice related short payment or over payment as a claim investigation application in the Applications window, Receivables creates these journal entries:
DR Claim Investigation
CR Unapplied Cash
Receivables derives the accounting flexfield for the claim investigation application from the receivable activity that you assigned in the Applications window.
AR: Default Exchange Rate Type (Profile)
This option determines the default exchange rate to use when converting foreign currency transactions to your functional currency. Valid values are:
Corporate Exchange Rate - An exchange rate you define to standardize rates for your company. This rate is usually a standard market rate determined by senior financial management for use throughout the organization.
Spot Exchange Rate - An exchange rate you enter to perform a conversion based on the rate on a specific date.
User Specified Rate - An exchange rate you specify when entering a foreign currency transaction.
Transaction Workbench:
Invoices
DR Receivables
CR Revenue
CR Tax (if you charge tax)
CR Freight (if you charge freight)
Invoice Rules: Bills in Arrears, Bills in Advance
Accounting Rules: Fixed, Variable
If you enter an invoice with a Bill in Arrears invoicing rule with a three month fixed duration accounting rule, Receivables creates the following journal entries:
In the first period of the rule:
DR Unbilled Receivables
CR Revenue
In the second period of the rule:
DR Unbilled Receivables
CR Revenue
In the third and final period of the rule:
DR Unbilled Receivables
CR Revenue
DR Receivables
CR Unbilled Receivables
CR Tax (if you charge tax)
CR Freight (if you charge freight)
If you enter an invoice with a Bill in Advance invoicing rule, Receivables creates the following journal entries:
In the first period of the rule:
DR Receivables
CR Unearned Revenue
CR Tax (if you charge tax)
CR Freight (if you charge freight)
DR Unearned Revenue
CR Revenue
In all periods of the rule for the portion that is recognized.
DR Unearned Revenue
CR Revenue
Credit Memos
When you credit an invoice, debit memo, or chargeback through the Credit Transactions window, Receivables creates the following journal entry:
AR: Use Invoice Accounting for Credit Memos is set to No, Receivables uses AutoAccounting to determine the Freight, Receivables, Revenue, and Tax accounts.
DR Revenue
DR Tax (if you credit tax)
DR Freight (if you credit freight)
CR Receivables (Credit Memo)
AR: Use Invoice Accounting for Credit Memos is set to Yes, ceivables credits the accounts of the original transaction.
DR Receivables (Credit Memo)
CR Receivables (Invoice)
When you credit a commitment, Receivables creates the following journal entries:
DR Revenue
CR Receivables
You can delete an incomplete credit memo if the system option Allow Invoice Deletion is set to Yes.
If the profile option AR: Use Invoice Accounting for Credit Memos is set to Yes, Receivables credits the accounts of the original transaction. If this profile option is set to No, Receivables uses AutoAccounting to determine the Freight, Receivables, Revenue, and Tax accounts. Receivables uses the account information for on-account credits that you specified in your AutoAccounting structure to create your journal entries.
Receivables lets you update accounting information for your credit memo after it has posted to your general ledger. Receivables keeps the original accounting information as an audit trail while it creates an offsetting entry and the new entry.
Commitments
When you enter a deposit, Receivables creates the following journal entry:
DR Receivables (Deposit)
CR Offset Account
Use the AR: Deposit Offset Account Source profile option to determine how Receivables derives the Offset Account to credit for this deposit.
AR: Deposit Offset Account Source (Profile)
This option indicates which accounting source to use for a deposit's offset account. Receivables can use either AutoAccounting or the deposit's transaction type as the accounting source for the offset account.
When you enter an invoice against this deposit, Receivables creates the following journal entries:
DR Receivables (Invoice)
CR Revenue
CR Tax (if you charge tax)
CR Freight (if you charge freight)
DR Offset Account (such as Unearned Revenue)
CR Receivables (Invoice)
When you apply an invoice to a deposit, Receivables creates a receivable adjustment against the invoice. Receivables uses the account information that you specified in your AutoAccounting structure to create these entries.
When cash is received against this deposit,
Receivables creates the following journal entry:
DR Cash
CR Receivables (Deposit)
When you enter a guarantee, Receivables creates the following journal entry:
DR Receivables
CR Revenue
You can define multiple transaction types with a class of either Deposit or Guarantee to classify or group your commitments for reporting purposes. Transaction types for commitments also provide additional control features, such as accounting controls, printing controls, and other defaults
When you enter an invoice against this guarantee, Receivables creates the following journal entry:
DR Receivables (Invoice)
CR Revenue
CR Tax (if you charge tax)
CR Freight (if you charge freight)
DR Revenue
CR Receivables
When you apply an invoice to a guarantee, Receivables creates a receivable adjustment against the guarantee. Receivables uses the account information you specified in your AutoAccounting structure to create these entries.
When cash is received against this guarantee, Receivables creates the following journal entry:
DR Cash
CR Receivables (Invoice)
Receipts
When you enter a receipt, Receivables creates the following journal entries:
DR Cash
CR Receivables
When you fully apply a receipt to an invoice, Receivables creates the following journal entry:
DR Cash
DR Unapplied Cash
CR Unapplied Cash
CR Receivables
Note: These examples assume that the receipt has a Remittance Method of No Remittance and a Clearance Method of Directly.
When you enter an unidentified receipt, Receivables creates the following journal entry:
DR Cash
CR Unidentified
When you enter an on-account receipt, Receivables creates the following journal entry:
DR Cash
CR Unapplied
DR Unapplied
CR On-Account
When your receipt includes a discount, Receivables creates the following journal entry:
DR Receivables
CR Revenue
DR Cash
CR Receivables
DR Earned/Unearned Discount
CR Receivables
Receivables uses the default Cash, Unapplied, Unidentified, On-Account, Unearned, and Earned accounts that you specified in the Remittance Banks window for this receipt class.
When you enter a receipt and combine it with an on-account credit (which increases the balance of the receipt), Receivables creates the following journal entry:
DR Cash
CR Unapplied Cash
To close the receivable on the credit memo and increase the unapplied cash balance, Receivables creates the following journal entry:
DR Receivables
CR Unapplied Cash
When you enter a receipt and combine it with a negative adjustment, Receivables creates the following journal entries:
DR Cash
CR Receivables (Invoice)
DR Write-Off
CR Receivables (Invoice)
If you set up a Write-Off account when defining your Receivables Activity.
When you enter a receipt and combine it with a positive adjustment, Receivables creates the following journal entries:
DR Cash
CR Receivables (Invoice)
DR Receivables (Invoice)
CR Write-Off
When you write off the unapplied amount on a receipt, Receivables creates the following journal entries:
DR Unapplied Cash
CR Write-off
When you enter a receipt and combine it with a Chargeback, Receivables creates the following journal entries:
DR Cash
CR Receivables (Invoice)
DR Receivables (Chargeback)
CR Chargeback (Activity)
DR Chargeback (Activity)
CR Receivables (Invoice)
You set up a Chargeback account when defining your Receivables Activity.
To move funds between receipts, you can apply one receipt to another open receipt (also called netting receipts). For example, you can move funds from Receipt 1 to Receipt 2 by opening Receipt 2 in the Applications window, and selecting Receipt 1 in the Apply To field.
You can net receipts in Receivables. To net receipts, you apply a receipt against another open receipt, and then apply the resulting unapplied receipt balance to a transaction.
Open receipts include receipts that have:
Unapplied cash
On-account cash
Open claim investigation applications
You can also apply one receipt against another receipt that has an open claim investigation application. A claim investigation application results from either a noninvoice-related deduction or an overpayment.
Note: Receivables automatically updates Trade Management when you make a receipt application against a second receipt that has an open claim investigation.
Attention: When netting receipts, both receipts must be in the same currency.
Following the example above, Receivables creates these journal entries:
DR Unapplied Cash (Receipt 1)
CR Netting (Receipt 1)
DR Netting (Receipt 2)
CR Unapplied Cash (Receipt 2)
After this receipt-to-receipt application completes, Receipt 2 gains additional funds that you can then apply to a debit item.
You set up a Netting account when defining your Receivables Activity.
If both receipts are in a foreign currency, however, then you could have an exchange gain or loss when you net the receipts. The exchange gain or loss is realized on the main receipt (Receipt 2) at the time of receipt application (netting).
If you later adjust the exchange rate on Receipt 1 or 2, then Receivables:
Rolls back all accounting for both receipts.
Re-creates the accounting, including the netting application, using the adjusted exchange rate.
Recalculates the exchange gain or loss on whichever receipt is open in the Applications window.
Remittances
When you create a receipt that requires remittance to your bank, Receivables debits the Confirmation account instead of Cash. An example of a receipt requiring remittance would be a check before it was cashed. Receivables creates the following journal entry when you enter such a receipt:
DR Confirmation
CR Receivables
You can then remit the receipt to your remittance bank using one of the two remittance methods: Standard or Factoring. If you remit your receipt using the standard method of remittance, Receivables creates the following journal entry:
DR Remittance
CR Confirmation
When you clear the receipt, Receivables creates the following journal entry:
DR Cash
DR Bank Charges
CR Remittance
If you remit your receipt using the factoring remittance method, Receivables creates the following journal entry:
DR Factor
CR Confirmation
When you clear the receipt, Receivables creates a short-term liability for receipts that mature at a future date. The factoring process let you receive cash before the maturity date, and assumes that you are liable for the receipt amount until the customer pays the balance on the maturity date. When you receive payment, Receivables creates the following journal entry:
DR Cash
DR Bank Charges
CR Short-Term Debt
On the maturity date, Receivables reverses the short term liability and creates the following journal entry:
DR Short-Term Debt
CR Factor
Adjustments
When you enter a negative adjustment against an invoice, Receivables creates the following journal entry:
DR Write-Off
CR Receivables (Invoice)
When you enter a positive adjustment against an invoice, Receivables creates the following journal entry:
DR Receivables (Invoice)
CR Write-Off
Debit Memos
When you enter a debit memo in the Transactions window, Receivables creates the following journal entries:
DR Receivables
CR Revenue (if you enter line amounts)
CR Tax (if you charge tax)
CR Freight (if you charge freight)
DR Receivables
CR Finance Charges
On-Account Credits
When you enter an on-account credit in the Applications window, Receivables creates the following journal entry:
DR Revenue (if you credit line amounts)
DR Tax (if you credit tax)
DR Freight (if you credit freight)
CR Receivables (On-account Credit)
Receivables uses the Freight, Receivable, Revenue, and Tax accounts that you specified in your AutoAccounting structure to create these entries.
Once the on-account credit is applied to an invoice, the following journal entry is created:
DR Receivables (On-account Credit)
CR Receivables (Invoice)
Credit Card Refunds
When you unapply a receipt and reapply the receipt to a credit card refund, Receivables creates these journal entries:
DR Receivables
CR Unapplied
DR Unapplied
CR Receivable Activity (Clearing Account)
After you apply the receipt to a credit card refund, Receivables automatically creates a negative miscellaneous receipt in the amount of the refund and creates this journal entry:
DR Receivable Activity (Clearing Account)
CR Cash
Reversing a credit card refund
When you reverse a credit card refund, either by reversing the negative miscellaneous receipt or by unapplying the credit card refund activity, Receivables creates this journal entry for the negative miscellaneous receipt:
DR Cash
CR Receivable Activity (Clearing Account)
and Receivables creates this journal entry for the original payment receipt:
DR Receivables Activity (Clearing Account)
CR Unapplied
Claims
Creating an invoice related claim
When you record an invoice related short payment as a claim in the Applications window, Receivables creates the standard accounting entries for the invoice and for the receipt application. There are no additional accounting entries for the invoice related claim.
Creating a non-invoice related claim
When you record a non-invoice related short payment or over payment as a claim investigation application in the Applications window, Receivables creates these journal entries:
DR Claim Investigation
CR Unapplied Cash
Receivables derives the accounting flexfield for the claim investigation application from the receivable activity that you assigned in the Applications window.
AR: Default Exchange Rate Type (Profile)
This option determines the default exchange rate to use when converting foreign currency transactions to your functional currency. Valid values are:
Corporate Exchange Rate - An exchange rate you define to standardize rates for your company. This rate is usually a standard market rate determined by senior financial management for use throughout the organization.
Spot Exchange Rate - An exchange rate you enter to perform a conversion based on the rate on a specific date.
User Specified Rate - An exchange rate you specify when entering a foreign currency transaction.
