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Friday, December 10, 2010

Pre-Payment Receipt Creation Setups and Process Steps

This post is exclusively shared by Mr. Sidhartha Anireddy (Oracle Finance expert).

Setups Overview

The following setups are required for the purpose of being able to create a Prepayment Receipt for a customer from Order Management.
1          Update OM System Parameters
2         Define Customer Bank Account
3         Define New Payment Method (Optional)
4          Define Receivable Activity
5          Define Payment Terms
6          Assign Bank Account to Customer Site
7          Define/Assign Document Sequences


Process Steps Overview

Please follow the following steps to:-
-          Create a Prepayment Automatic Receipt from Order Management
o   Enter and Book Order
o   Create & View Prepayment Receipt
o   Ship Order
-          Apply the Receipt to An invoice created from the Order
o   Run Autoinvoice Program
o   Review the Receipt and Accounting Entries

1.     Update OM System Parameters

Navigation > Order Management Super User > Setup > System Parameters > Define
Define the system parameter if it is not defined. Query it, enable ‘Allow Multiple Payments’ and click on OK
Navigation > Order Management Super User > Setup > System Parameters > Values
Enter the name of the Operating Unit name and enable the “Show All” check box. Place your cursor in the field “Parameter” and query for “Allow Multiple Payments”. If the value for this parameter is not set to “Yes” update the value to “Yes”. The setup change once made cannot be updated later. Please refer the below screen shot.

2.     Define Customer Bank Account

Navigation >   Payables Super User > Setup > Payment > Banks
If the Bank is already created, query for the bank and click on the Bank Account button. Click on the new button from the menu options and enter the following fields
(a)    Bank Account Name
(b)   Account Use – Should be “Customer”
(c)    Bank Account Number
(d)   Currency – The default currency will be currency of the set of books assigned to the operating unit from which you are trying to create the bank account.
(e)   Save the record after entering the above information. Please refer the below screen shot.

3.     Define a New Payment Method

A new payment method is required if you wish to use the Credit Card Payment Type when creating the prepayment receipt from Order Management. If any other payment type is to be used from Order Management for creation of Prepayment Receipt a new Payment Method is not required to be created. However if you wish to create a new payment method for any other reason please follow the steps mentioned below.
Navigation >   Receivables Super User > Setup > Receipts > Receipt Classes
I have used an existing Receipt Class and only created a new Payment Method. Query for the payment method “XXX Manual Receipts” and place your cursor in the “Payment Method Name” field and click on new button from the menu options. To create a new payment methods enter the following detail:-
(a)    Payment Method Name
(b)   If you want a different name to be printed then enter a different name in the “Printed Name” field. Please refer the below screen shot.
(c)    Click on Bank Accounts and assign an internal bank account. The effective dates in the bank account default to the current system date. If you are entering back dated transactions when testing please ensure that this date is changed accordingly. Enter all the required information if it does not default from Bank Account Setup. Please refer the below screen shot.
(d)   Save the record, the new payment method is created.

4.     Define Receivable Activity

For creating automatic receipt from Order Management a new Receivable Activity of type prepayment has to be created. Accounting entries will also be generated using the account assigned to this Receivable Activity. You can define as many prepayment receivable activities as you want. Only one prepayment receivable activity can be active at any point in time. The accounting entries that get generated in the process are also provided elsewhere in this document.
Navigation >   Receivables Super User > Setup > Receipts > Receivable Activity

5.     Define Payment Terms

There should be at least one payment term which has the “Prepayment” check box enabled. If a payment term is already available then skip this step else create a new payment term or update an existing payment term. When testing we may have to manually enter the payment term in Order Header. However when we move the solution to Production we can agree on a process of defaulting the Prepaid Payment Term on Order Header
Navigation >   Receivables Super User > Setup > Transactions > Payment Terms
Please refer the screen shot below.                               

6.     Assign Bank Account to Customer Site

Navigation >   Receivables Super User > Customers > Standard
Assign the bank account created in #2 above to the customer site. Enable the Primary check box in the bank accounts window and ensure that the effective date is earlier than the date when you want to process transactions. Please refer to the screen shot below.

7.     Define/Assign Document Sequences

If a new payment method is created then document sequences have to be defined and assigned for the new payment method. In my process steps I have not defined a new sequence; hence I am referring directly to assigning of document sequences. Document sequence is an important step since the receipt number will be same as the document sequence number assigned to Prepayment Receipt.
Navigation > System Administrator > Application > Document > Assign
Enter the following information to complete the assignment of document sequences to the payment method:-
(a)    Application – Enter Receivables
(b)   Category – Enter the name of the new payment method created. If a new payment method is not created then ensure that the payment method that you are using has a document sequence assigned to it.
(c)    Set of Books – Enter the name of the new set of books associated with the operating unit where you would be entering transactions.
(d)   Method – Assign the document sequence to both manual and automatic methods.
(e)   Start Date – The start date entered here should be earlier than the date on which you wish to perform transactions.
(f)     Sequence – Enter the name of the sequence that would be generating numbers for your payment method. Please refer to the below screen shots.
Document Sequence Assignment – Document Tab

Document Sequence Assignment – Assignment Tab

Process Steps

1.     Enter and Book Order

Navigation > Order Management Super User > Orders, Returns > Sales Order
Enter the following information to create and book the order:-
(a)    Customer Name – Enter the name of the customer for whom the bank account was assigned in the setups.
(b)   Navigate to Other tab on Order Header and change the payment term to the new payment defined in #5 above.
(c)    Enter the order lines and book the order.

2.     Create & View Prepayment Receipt

After the order is booked click on Actions button on Order Header. From the list of values choose payment. The payment window will open. Follow the below steps to create a prepayment receipt
(a)    Enter the Payment Type as Cash.
(b)   Enter the Percent as 100 to create a receipt equal to the Order Header Amount.
(c)    Enable the Prepay Check box.
(d)   Scroll towards the right side using the scroll bar and choose the receipt method.
(e)   Click on Process Payments. This will call the Prepayment Receipt Creation API to create the receipt.
(f)     Click on View receipt to view the Prepayment Receipt.

3.     Ship Order

Navigation > Order Management Super User > Release Sales Order > Release Sales Order.
Enter the sales order number which has to be released. After releasing the sales order ship confirm and submit the workflow background process to interface Order to Receivables.

From Receivables responsibility submit the Autoinvoice program for the order. The “Prepayment Matching Program (Prepayments Matching Program)” will automatically get fired. This program applies the prepayment receipt to the invoice that gets created by Autoinvoice program.

Receipt Accounting Entries when the Receipt is created.

Cash A/c                                                               Dr.
Unapplied Receipts A/c                                 Cr.
Unapplied Receipts A/c                                 Dr.
Prepayment A/c                                                Cr.

Accounting Entries when the receipt is applied to an Invoice by the Prepayment Matching Program.

Prepayment A/c                                               Dr.
Unapplied Receipts A/c                                 Cr.
Unapplied Receipts A/c                                 Dr.
Receivables A/c                                                 Dr.


  1. I appreciate your post, thanks for sharing the post, i would like to hear more about this in future

  2. Any possibility to use this with Import process.In our system, sales orders in oracle are created through POS import or Web import.

    Do you have any API or code which will help in creating bulk orders in oracle and also prepayment receipts for the same. All automatically through Programs.

  3. Hi Krishna,
    You can use OE_order_pub.process_order for creating pre-payment receipt. There is a function "OE_ORDER_PUB.G_MISS_HEADER_PAYMENT_REC" to which you need to give certain parameter, you can use it at the time of order import as well. Just call it after booking the order.


  4. Hi Thanks for sharing the post.
    Can anybody help on this issue.
    I want 100% prepayment before book or ship the order.If customer pay the 100% prepayment, i can sell the goods.If they will not pay(100%), hold will apply for that order.
    How can solve this issue.What are steps need.


    1. How did you solve this? We have a similar situation and wondering what the solution could be?

  5. Thanks Devendra,

    How can we address the following:
    a. Can tax be applied to the prerpayment amount? This is a requirement for most EU countries - VAT has to be applied at the time of receiving the payment (as against on the Invoice)
    b. Can we have multiple payments?

  6. Hi
    a. I need check this and get back to you.
    b. Certainly we can have multiple payments.


  7. Hi Anonymous,
    a. Could you please let us know what account entries you are looking for ? If the invoice is not prepared how do you handle accounting entries for tax?


  8. Hi Devendra

    document is good but i have problem when we insert prepayment in om header form and than press action bution and select payment so system give s massage "this function not available for this responcibilities"

    can you help me on this


  9. 'This function not available for this responsibilities' is usually due to your custom_top entry missing in default.env file. Ask your DBA to add this entry to default.env file.

  10. Hi, I can't find the 'Payment' option in user action, what have I did wrong?

  11. Devendra,
    When enabling ‘Allow Multiple Payments’ System Parameter, I am getting "Field is protected against update".. Is there a profile option to enable this?
    Please help.



  12. Hi Devendra,
    I am not able to apply prepayment to invoice in oracle apps R12. Can you please help on this ?

  13. This Blog is interesting we should undersatnd it click on: compare prepaid credit cards

  14. Nice..can you please share transaction docs regarding GST


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