Generic Settlement Procedure (Oracle Accounts Receivable Deductions Settlement)

Generic Settlement Procedure

Use the following high level procedure to settle claims, deductions, and overpayments.

Prerequisites:

An existing claim or deduction with a status of Open or Complete.
Oracle Receivables should be set up.
Oracle Payables should be set up for settlement with contra charge

Navigation: From the Claim tab, click the Claims subtab, then the claim. In the Claim Main page, click the Settlement subtab.

Navigate to Claim Lines and verify if the claim has lines. The claim should have at least one claim line with a positive value. If a claim line does not exist, create one now. See Creating Claim Lines for information on creating claim lines. The sum of the claim lines can be less than the total claim amount, as taxes will be added.
Optionally, verify if earnings have been associated to the claim line. You will see a check mark in the Associate Earnings column if earnings are associated.
Navigate to the Settlement page, and complete any additional fields as required.
Submit the claim for approval.

The following table describes the settlement methods and certain specific steps that you may need to complete based on the settlement method that you select.

Claim Settlement Methods and Additional Notes for Settlement

Settlement Method	Claim Class	Additional Notes
On-account credit memo	Used to settle claims and deductions.	-NA-
Check	Used to settle claims.	Post-approval: The claim information is interfaced to Oracle Payables. The Payables Invoice Import Program transfers the interface information into Oracle Payables to create an invoice. The Payables clerk issues checks against the invoice. The Claim Settlement Fetcher program updates the settlement documents with the check payment details. The claim is closed after the invoice is paid.
Invoice-credit	Used to settle claims.	Notes: Verify that an invoice number is entered in a claim line. The tax code used is the one used on the invoice. Post-approval: The invoice credit memo is created and claim is closed under the following conditions: Multiple invoices are credited. Individual claim lines credit in different manners. For example one claim line credits a specific Line Number, whereas another claim line gives credit to specific type or gives credit to Total Amount, and so on. A notification is sent to Receivable role. The Receivables clerk credits the invoice and enters the credit memo transaction number in the notification. The claim is closed if the transaction number is valid.
Debit Memo	Used to settle debit claims and overpayments.	Post-approval: The claim details are interfaced to Oracle Receivables as debit memos. The Autoinvoice Import program transfers this information into Oracle Receivables. The Claims Settlement Fetcher program updates the settlement documents with the debit memo details and closes the claim.
Previous Credit Memo	Used to settle transaction-related and non-transaction related deductions.	Notes: As an additional prerequisite, a credit memo, which can be used to settle the deduction should exist. In the settlement page, from the Previous Open Credit Memo LOV, select a credit memo with a large enough balance to offset the deduction. Use the transaction number, transaction type, location, source, or reference to search for the credit memo. Notice that you can see the balance due, GL date, and transaction dates for the credit memos. Post-approval: The deduction is unapplied, and the previous open credit memo is applied to the receipt. The overpayment is closed online.
Invoice Credit or Invoice Line Credit	Invoice credit is used for settling transaction-related and non-transaction related deductions. It cannot be used to settle promotion-related deductions. Invoice line credit is used to settle transaction-related deductions that occurred because of reasons that can be traced back to specific invoice line items. The deductions cannot be promotion-related.	Notes: If this is an invoice credit, then verify that an invoice number is entered in a claim line, the invoice line is selected, and the line amount is a positive value. If this is not an invoice credit, then create a claim line. For a transaction-related deduction, this invoice number must be the same as the one on which the deduction was created. For a non-transaction-related deduction, this invoice number must be on the same receipt as the deduction. If the invoice numbers do not match, then the settlement is not automated. Instead, a manual settlement workflow is initiated and notification is sent to any Oracle Receivables user with the Receivables Role responsibility. If this is an invoice line credit, then verify that an invoice number is entered in a claim line, Multiple invoice lines can be entered, each as a separate claim line. The sum of the claim line amounts must equal the total claim amount. Post-approval: The invoice credit memo is created and deduction is closed under the following conditions: For transaction related deductions, credit is to a non-source invoice. For non transaction related deductions, credit is to an invoice not on the source receipt. The Receivables clerk receives a notification, credits the invoice and enters the credit memo transaction on the notification. The claim is closed if the transaction number is a valid.
Invoice Tax Only Credit	Used to settle deductions that occurred because of tax calculation errors. The deductions can be transaction-related; they cannot be related to a promotion.	Notes: Verify that an invoice number is entered in a claim line. If not, select an invoice number now. For a transaction-related deduction, this invoice number must be the same as the one on which the deduction was created. Else, the settlement process is not automated. A manual settlement workflow is initiated and notification is sent to any Oracle Receivables user with the Receivables Role responsibility. From the Previous Open Credit Memo LOV, select a credit memo with a large enough balance to offset the deduction. Use the transaction number, transaction type, location, source, or reference to search for the credit memo. Post-approval: The invoice credit memo is created and deduction is closed under the following conditions: For transaction related deductions, credit is to a non-source invoice. For non transaction related deductions, credit is to an invoice not on the source receipt. The Receivables clerk receives a notification, credits the invoice and enters the credit memo transaction on the notification. The claim is closed if the transaction number is a valid.
Chargeback	Used to settle deductions by charging back the customer in case you determine that the deductions are invalid.	Notes: The tax code is not used or passed by Oracle Trade Management. For a transaction-related deduction, the customer on the original transaction is charged. For non-transaction related deductions, the customer on the receipt is charged back. Post-approval: The chargeback is created online and the deduction is closed.
Write-off	Used to settle a transaction-related deductions.	Notes: In the deduction is non transaction-related, a settlement workflow notification is sent to Oracle Receivables. The Oracle Receivables individual must create an adjustment. When complete, the Oracle Receivables individual updates the notification with the adjustment record, and the deduction is closed in Oracle Trade Management. The tax code is not used or passed by Oracle Trade Management. Post-approval: The write-off is created online and the deduction is closed.
Return Materials Authorization	When a customer returns a product, you can use the RMA settlement method in Oracle Trade Management to settle the deduction. When the return is processed and a credit memo is generated, Oracle Trade Management automatically tracks the credit memo and uses it to close the deduction.	Notes: As an additional prerequisite, Order Management must be set up. The RMA transaction types are set up with return order workflows which drive all the processes that the return order must go through. Post-approval: The RMA is created online. You must ensure return is interfaced to Oracle Receivables as a credit memo. The Claims Settlement Fetcher program updates the settlement documents with the credit memo details and closes the claim.
Previous Debit Memo	Used to settle overpayments.	Notes: Verify that at least one claim line with a negative value exists. If a claim line does not exist, create one now. The sum of the claim lines must equal the total claim amount. In the Previous Open Debit Memo field, select a debit memo with a large enough balance to offset the overpayment. Use the transaction number, transaction type, location, source, or reference to search for the debit memo. Post-approval: The claim investigation for the overpayment is closed. The previous open debit memo is applied to the receipt and the overpayment is closed.
Receipt Write-Off	Used to settle overpayments.	Notes: Verify that at least one claim line with a negative value exists. If a claim line does not exist, create one now. The sum of the claim lines must equal the total claim amount. Post-approval: The write-off is created online and the overpayment is closed.
On-account Cash Application	Used to settle overpayments. When a customer has overpaid for various reasons, the overpayment can be placed on account. The overpayment amount can be applied to the customer's transactions.	Notes: Verify that at least one claim line with a negative value exists. If a claim line does not exist, create one now. The sum of the claim lines must equal the total claim amount. Post-approval: The on account cash application is made online and the overpayment is closed.