How to Create an Invoice Related Short Payment Deduction and Settle with Credit Memo? (Doc ID 1504281.1)

Last updated on MAY 20, 2024

Applies to:

Goal

Oracle Receivables (AR) Information Center: Using Receipts Workbench In Oracle Receivables > How to Associate Application Reference Reasons in Receivables(AR) to Claims in Trade Management? > Note: 1504281.1

Process Flow for Claims
    
         

 The purpose of this note is to show how to create a Invoice Related Short Pay Deduction and Settle with Credit Memo in Receivables(AR).
 There are 4 claim classes:
 Claim
 Debit Claim
 Deduction (The note will demonstrate a deduction)
 Overpayment

Deductions:
Deductions are created in Oracle Receivables and you can view and settle these deductions in Oracle Trade Management. Deductions are used to handle situations
where customers short pay invoices for various reasons such as to claim compensation for shipping errors, pricing errors, and to claim promotional earnings.
When a deduction is created, all the pertinent information such as receipt numbers, dates and amounts, customer and transaction information, customer debit memo
numbers and claim reasons, which is entered in Oracle Receivables, is available in Oracle Trade Management.
For example, you send an invoice for $10,000 to a customer. But the customer remits only $8,000 for this invoice, citing a deduction of $2,000 for promotional earnings
that the customer has not received. A deduction for $2,000 is automatically created in Oracle Receivables. You can view and settle this deduction in Oracle Trade
Management.
Deductions can be of one of the following types:
• Transaction-related: deductions can be traced back to a specific transaction such as an invoice, a debit memo or a charge back.
• Non transaction-related: deductions cannot be traced back to a specific transaction.
• Promotion-related: deductions have associated promotional earnings.

Customers make these deductions to claim discounts that have been given them for such activities as slotting fees or that are accrued when they place orders.
Settlement methods for deductions include invoice credit memo, on-account credit memo, previous on-account credit memo, write-off, charge back, RMA, and contra
charge.


 For the purpose of this demonstration Promotional will be used for  the ‘Application Reference Reason’ .
 There are others available, but remember on the setup to ensure what is chosen relates to a ‘Credit Memo’ for this purpose.

The assumption for this document is that Trade Management and Receivables have already been set up, and if not Reference: How to Set up Trade Management for use of Claim Investigation in Receivables?

Also for this scenario the system has been set to pass the claim directly to Receivables after claim has been approved.
a) no need to run AutoInvoice to pass claim to Receivables
b) no need to run Claim Settlement Fetcher to close claim

Solution

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