During receipt application, you can allocate cash against an entire transaction. Or, use Oracle Receivables' line-level cash application functionality to apply cash against specific transaction lines, according to your customer's remittance advice. For example, if your customer received only Item A, but not Item B, then you can apply your customer's payment to Item A. Later, after your customer receives Item B and remits payment, you can apply the payment to Item B.

Receivables lets you apply receipts in these ways:

• To an entire transaction

  See: Applying Receipts.

• To a specific transaction line type, such as lines only, tax, freight, or late charges, or any combination of these types

• To specific transaction lines

• To groups of transaction lines

The line-level cash application functionality does not use application rule sets, because you make application decisions according to your customer's remittance advice.

You can update existing line-level cash applications. For example, after applying a receipt against an entire transaction, you later learn that the customer only wanted to partially pay the transaction. In this case, you can unapply the original receipt application and reapply the receipt to specific transaction lines. See: Reapplying Receipts.

You can also unapply line-level cash applications and reapply a receipt against an entire transaction. In this case, Receivables automatically removes all existing line-level cash applications, before applying cash at the transaction level.

After applying a partial payment against a specific transaction line, you can later apply a second payment against the remaining balance of the transaction. Receivables prorates the second receipt amount across all remaining transaction lines.

Applying Receipts in Detail

Prerequisites:

1. If necessary, modify the AR: Always Default Transaction Balance for Applications profile option.

   See: Overview of Receivables User Profile Options.

2. Optionally modify the various system options that control discounts. For example, set the Allow Unearned Discounts or Discount on Partial Payment system options.

   See: Miscellaneous System Options.

3. Optionally modify the discount options for your customer profile classes. For example, enable discounts for a customer profile class, and set the number of discount grace days.

   See: Customer Profile Class and Customer Account Profiles Field Reference.

To apply receipts in detail:

1. Navigate to the Receipts window.

2. Enter or query the receipt to apply. See: Entering Receipts.

3. Choose Apply.

4. In the Apply To field, from the list of values, select the transaction to which you want to apply this receipt.

5. Choose Apply in Detail to navigate to the Detailed Applications window.

   Attention: You cannot apply receipts in detail to invoices from Release 11i, if activity already exists on those invoices. Examples of invoice activity include credit memos, deposits, guarantees, or adjustments.

   The Detailed Applications window includes four regions:

   • Receipt Application region

     Provides an overview of receipt details, including the available unapplied receipt amount.

   • Transaction region

     Provides an overview of transactions details, including amount applied to the invoice, and current balance due.

   • Application Tree region

     Displays the application levels at which you can apply this receipt to the selected transaction. See next step.

   • Detailed applications region

     Displays application details according to the application level that you selected in the Application Tree region.

6. In the Application Tree region, select the application level for this receipt. Your selection controls which transaction details are made available for application in the Detailed Applications region.

   • Transaction

     Select this option to apply cash at a summary level.

     You can enter amounts by line type: Line, Tax, Freight, or Charges. If you enter a Line or Tax amount, then Receivables prorates the application across all transaction lines.

   • All Lines

     Select this option to apply cash to specific lines.

     You can select one or more transaction lines. Receivables enters the Amount Applied for this receipt and updates the Balance Due for this transaction, but you can change the amount applied.

     Suggestion: If you want to apply cash to most, but not all, transaction lines, then choose Select All Lines. Receivables applies the receipt to all transaction lines; you can then deselect the unwanted transaction lines.

   • All Groups

     Select this option if you want to apply cash to a selected group's transaction lines. This option displays only if group attributes were imported into Receivables from a feeder system, such as Oracle Service Contracts.

     You can select one or more groups. Receivables prorates the application across all transaction lines assigned to the selected group.

     Suggestion: If you want to apply cash to most, but not all, groups, then choose Select All Groups. Receivables applies the receipt to all transaction lines in all groups; you can then deselect the unwanted groups.

   • Specific Groups

     Select a group to apply cash to selected transaction lines within the selected group. Specific groups display only if group attributes were imported into Receivables from a feeder system, such as Oracle Service Contracts.

     You can select one or more transaction lines assigned to the selected group.

   • Freight and Charges

     Select this option to apply cash to freight and charges at the invoice level only.

     You can apply cash to freight and charges either before or after you apply cash to transaction lines. When you select this option, Receivables displays freight and charges on separate lines, if they exist.

   Receivables automatically calculates earned discounts. You must manually enter unearned discounts.

7. When you are satisfied with all applications, save your work. Receivables updates your customer's account balances.