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Below is a comprehensive and detailed document for the Oracle Fusion

Accounts Receivable (AR) module. This document is structured to cover all
aspects of its functionality, configuration, integration, and advanced features.

Detailed Overview of Oracle Fusion Accounts Receivable (AR) Module

1. Introduction to Oracle Fusion Accounts Receivable (AR)
Oracle Fusion Accounts Receivable (AR) is a critical component of the Oracle Fusion
Financials suite that helps organizations manage their receivables, streamline
collections, and ensure that customer payments are processed efficiently. It
automates many aspects of the accounts receivable cycle, from invoice generation
to payment receipt and reconciliation, all while maintaining tight integration with
other Oracle Fusion modules, such as General Ledger (GL), Cash Management (CM),
and Oracle Fusion Billing.
The core function of the AR module is to handle all incoming customer payments
and credit transactions, ensuring that the cash inflow is tracked accurately and that
appropriate customer balances are maintained. The system also supports
automated collections, aging analysis, and detailed reporting.
Key Features of Oracle Fusion Accounts Receivable:
 Invoice Generation: Create and manage customer invoices with flexibility,
supporting multiple billing methods.
 Receipts Management: Manage customer payments via checks, credit
cards, bank transfers, and more.
 Credit Management: Track and manage credit limits and payment terms for
customers.
 Tax Management: Automatically calculate sales tax, VAT, or GST on
customer invoices.
 Collections Management: Automated workflows and tools to track overdue
payments and improve collections efficiency.
 Integration: Tight integration with Oracle Fusion General Ledger, Cash
Management, and Order Management.

2. Key Functional Areas of Oracle Fusion Accounts Receivable

2.1 Customer Setup and Management
In Oracle Fusion AR, managing customer profiles is central to invoicing and payment
processing. Each customer has a profile with critical information that drives
invoicing, payment processing, and collections.
Key Features:
  Customer Accounts: Define customer accounts with relevant details such
as billing address, shipping address, tax registration, and contact information.
 Payment Terms: Set up customer-specific payment terms, such as Net 30,
Net 60, early payment discounts, or custom terms.
 Credit Limits: Establish credit limits for customers and track outstanding
balances to manage risk.
 Tax Information: Configure tax codes, such as sales tax or VAT, to ensure
that transactions are processed with the correct tax rates.
 Currency and Locale: Support for multiple currencies and locale-based
preferences to handle global customers.
 Customer Groups: Organize customers into groups to streamline account
management, reporting, and collections.
2.2 Invoice Management
Invoice creation is a core function in Oracle Fusion AR. It supports various billing
methods, including standard invoices, credit memos, debit memos, and recurring
invoices.
Key Features:
 Invoice Generation: Invoices can be created automatically from sales
orders or manually entered. The system supports different invoice types,
such as standard, debit/credit memos, and advance invoices.
 Invoice Validation: Oracle Fusion AR validates invoices against customer
account settings, including tax, payment terms, and credit limits.
 Recurring Invoices: For customers on subscription or contract-based billing,
recurring invoices can be automatically generated based on a defined
schedule.
 Partial Invoicing: The system allows partial invoicing for partial deliveries or
milestones, ensuring that invoices reflect the correct amounts based on
contract terms.
 Invoice Adjustments: Users can make adjustments to invoices after they
are created, such as applying discounts or correcting errors.
2.3 Receipts Management
Oracle Fusion AR supports the management of incoming customer payments
(receipts) from various payment methods, ensuring timely processing and accurate
reconciliation.
Key Features:
  Receipt Creation: Receipts can be manually created or automatically
generated from customer payments. These can include payments via check,
ACH, wire transfer, credit card, or other payment methods.
 Receipt Matching: Payments are matched to open invoices automatically
using predefined matching rules (e.g., exact match or partial match) to
reduce manual intervention.
 Cash Application: Oracle Fusion AR enables automatic or manual cash
application, ensuring that receipts are applied to the correct invoices or
customer accounts.
 Payment Discounts: The system supports applying early payment
discounts based on payment terms.
 Receipt Write-Offs: For small amounts or old invoices, receipts can be
written off or adjusted as necessary.
2.4 Credit Management
Credit management in Oracle Fusion AR helps track and manage customer credit
limits, ensuring that the organization does not extend too much credit to risky
customers.
Key Features:
 Credit Limits: Credit limits can be set for each customer, and transactions
will be blocked if a customer exceeds their credit limit.
 Credit Hold: If a customer exceeds their credit limit or has overdue
payments, their account can be placed on credit hold, preventing new
invoices or shipments until the issue is resolved.
 Credit Check: A credit check is performed when creating an invoice or a
sales order to ensure that the customer is within their approved credit limit.
2.5 Collections Management
Oracle Fusion AR includes robust tools for managing collections, helping to improve
cash flow by ensuring that overdue invoices are tracked and followed up on
promptly.
Key Features:
 Collections Workbench: A centralized interface for managing overdue
receivables, prioritizing collections efforts, and tracking collection activities.
 Aging Reports: Track outstanding customer balances with detailed aging
reports, showing how long invoices have been overdue (e.g., 30, 60, 90
days).
 Automated Collection Letters: The system can automatically generate
and send collection letters to customers based on overdue periods.
  Payment Promises: When a customer commits to paying an outstanding
invoice, users can record and track these payment promises.
 Collection Tasks: Create and assign collection tasks to collection agents,
with predefined follow-up workflows to ensure prompt action.
2.6 Tax Management
Oracle Fusion AR provides a robust framework for handling various types of taxes
(e.g., VAT, GST, sales tax), ensuring accurate tax calculation on all invoices and
payments.
Key Features:
 Automatic Tax Calculation: The system automatically calculates tax based
on the customer’s location, the items being sold, and applicable tax rules.
 Tax Rates: Tax rates can be configured for various regions, ensuring that
transactions are taxed correctly.
 Tax Reporting: AR data is integrated with the General Ledger (GL) to
produce tax reports such as VAT/GST returns.
2.7 Revenue Recognition
In certain industries, recognizing revenue at the time of invoicing may not be
appropriate. Oracle Fusion AR allows you to manage revenue recognition schedules
to ensure that revenue is recognized when it is earned.
Key Features:
 Recognition Rules: Define revenue recognition rules that specify how and
when revenue is recognized from customer invoices.
 Deferred Revenue: Supports managing deferred revenue where payment is
received but the service or product has not yet been delivered.
 Recognition Adjustments: Adjustments to recognized revenue can be
handled directly in AR, with appropriate updates to GL.

3. Configuration and Setup

Setting up Oracle Fusion AR requires configuration of various components to align
the system with the organization’s business needs.
3.1 Customer Setup
 Customer Profile: Set up customer profiles with information such as name,
billing/shipping addresses, tax identification, and payment terms.
 Customer Classifications: Group customers into classifications to facilitate
reporting and streamline processing (e.g., domestic vs. international
customers).
  Credit Setup: Configure credit limits, credit checks, and payment terms to
ensure effective management of customer balances.
3.2 Invoice Configuration
 Invoice Types: Set up different types of invoices (standard, credit memo,
debit memo, advance payment) to handle various billing scenarios.
 Tax Setup: Configure tax rates and tax jurisdictions for different regions to
ensure that invoices are taxed correctly.
 Invoice Matching Rules: Set up rules to automatically match customer
payments to open invoices (e.g., exact match, partial match, or overpayment
tolerance).
3.3 Receipt Configuration
 Receipt Methods: Define payment methods (e.g., checks, ACH, wire, credit
card) and ensure they are integrated with payment systems for automated
processing.
 Cash Application: Configure cash application rules to automatically apply
receipts to invoices based on predefined criteria.
 Bank Integration: Set up integration with bank accounts to automate the
receipt process, enabling seamless reconciliation between AR and Cash
Management.
3.4 Credit and Collections Configuration
 Credit Rules: Define rules for credit limits, credit checks, and credit hold
conditions to ensure proper control over customer risk.
 Collections Workflows: Set up workflows for collection agents, including
follow-up actions, automated reminders, and escalation procedures.

4. Integration with Other Modules

Oracle Fusion AR integrates seamlessly with various other modules to provide a
unified solution for managing financial processes.
4.1 General Ledger (GL)
 Invoice Posting: Invoices and receipts are posted to the General Ledger for
accurate financial reporting.
 Revenue Recognition: Integration with GL ensures that revenue is
recognized according to the established recognition rules.
4.2 Cash Management (CM)
 Receipt Integration: Receipts processed in AR are automatically reflected
in the Cash Management module for cash flow visibility and reconciliation.
  Bank Reconciliation: Payments from customers are reconciled with bank
statements in Oracle Fusion CM.
4.3 Order Management (OM)
 Sales Order Integration: AR is integrated with Order Management,
allowing for invoices to be automatically created from sales orders and
ensuring consistency between order fulfillment and invoicing.
4.4 Procurement and Payables (AP)
 Customer Credit from AP: Integration with Oracle Fusion AP allows you to
manage credit from customers who may have vendor relationships (e.g
., offsetting amounts between accounts).

5. Advanced Features of Oracle Fusion AR

5.1 Automated Invoicing and Collections
Oracle Fusion AR provides automated features for invoice creation and collections
follow-ups, significantly reducing manual intervention and improving cash flow.
 Automatic Invoice Generation: Invoices can be automatically generated
from sales orders, contracts, or recurring billing schedules.
 Automated Collection Notifications: AR can automatically send collection
reminders, emails, or letters when payments are overdue.
5.2 Mobile Access
Oracle Fusion AR supports mobile access, allowing credit controllers, collection
agents, and managers to view customer details, approve invoices, and take actions
on receivables from anywhere.
5.3 Customer Self-Service Portal
Customers can access their own accounts via a self-service portal to view invoices,
make payments, check payment history, and resolve disputes. This reduces
administrative overhead and enhances the customer experience.
5.4 Reporting and Analytics
 AR Aging Reports: Track outstanding balances with aging reports that
provide insights into overdue invoices and help prioritize collections efforts.
 Cash Flow Forecasting: With integration to CM, AR helps forecast cash flow
based on expected customer payments.
 Receivables Dashboard: Dashboards provide real-time views of key
performance indicators (KPIs), such as open receivables, overdue amounts,
and collections performance.
6. Audit and Compliance
6.1 Audit Trail
Oracle Fusion AR maintains a complete audit trail for every transaction, from invoice
creation to receipt application, ensuring transparency and compliance with
regulatory standards.
6.2 Segregation of Duties (SoD)
Oracle Fusion AR ensures segregation of duties by assigning different roles to users,
such as invoice creation, receipt application, and collections, reducing the risk of
fraud or errors.