Oracle Fusion Receivables Implementation and Configuration Considerations Sept, 2011

1. Oracle Fusion ReceivablesImplementation and Configuration ConsiderationsSept, 2011

2. Pre-requisite Readings • Fusion Financials Overview & Concepts • Oracle Fusion Financials Financial Enterprise Structures • Oracle Fusion Financials Security

3. Agenda • Implementation Overview • Order Fulfillment Business Process at a Glance • Business Process Mapping to Setup Activities • Minimal Configuration to Make Receivables Operational • Key Implementation Concepts and Considerations • Security in Fusion Receivables • Business Unit, Ledger, and Legal Entity in Receivables • Reference Data Sharing Across Receivables Business Units • Accounting in Receivables • Customer Billing • Customer Payments • Revenue Management • Late Charges • Receivables to General Ledger Reconciliation • Deltas with EBS • Additional Resources

4. Agenda • Implementation Overview • Order Fulfillment Business Process at a Glance • Business Process Mapping to Setup Activities • Minimal Configuration to Make Receivables Operational • Key Implementation Concepts and Considerations • Security in Fusion Receivables • Business Unit, Ledger, and Legal Entity in Fusion Receivables • Reference Data Sharing Across Receivables Business Units • Accounting in Receivables • Customer Billing • Customer Payments • Revenue Management • Late Charges • Receivables to General Ledger Reconciliation • Deltas with EBS • Additional Resources

5. Order Fulfillment Business Process at a Glance Manage Customer Inquiries Customers Banks • Manage Revenue ProcessPayments ManageReceivables Transact Invoice / Bill PaymentProcessors Record Accounting Entries Business Intelligence Analytics

6. Manage Accounts Receivable Balances Bill Customers Manage Revenue • Manage Inquiries • Process Late Charges • Process Statements • Adjust Customer Balances • Process Receipts • Apply Customer Payments • Process Bank Deposits • Clear Accounts Receivables Transactions • Process Refunds Order Fulfillment Business Process at a GlanceFusion Receivables - Order Fulfillment With End-to-End Automation Process Customer Payments • Create and Process Bill • Present Bill • Process Billing Adjustments • Process Revenue • Process Revenue Adjustments SLA Accounting, GL Reconciliation and Period Close Activity Business Intelligence Analytics (OBIA) and Transactional Business Intelligence (OTBI) • Automated flow with minimal manual intervention • Easy, intuitive manual alternatives

7. Fusion Receivables Order Fulfillment Business Process Detailed Business Process Manage Accounts Receivable Balances Process Customer Payments Manage Revenue Bill Customers • Manage Inquiries • Process Late Charges • Process Statements • Adjust Customer Balances • Process Receipts • Apply Customer Payments • Process Bank Deposits • Clear Accounts Receivables Transactions • Process Refunds • Create and Process Bill • Present Bill • Process Billing Adjustments • Process Revenue • Process Revenue Adjustments Activities SLA Accounting, GL Reconciliation and Period Close Activity Business Intelligence Analytics (OBIA) and Transactional Business Intelligence (OTBI) • Automated flow with minimal manual intervention • Easy, intuitive manual alternatives

8. Business Process Mapping to Setup Activities Detailed Business Process Manage Accounts Receivable Balances Process Customer Payments Manage Revenue Bill Customers • Define Common Accounts Receivable Configuration • Define Subledger Accounting Rules • Define Customer Billing Configuration • Define Basic Items • Define Customer • Define Common Accounts Receivable Configuration • Define Subledger Accounting Rules • Define Revenue Management Configuration • Define Common Accounts Receivable Configuration • Define Subledger Accounting Rules • Define Customer Payments • Define Funds Capture • Configure Payment System Connectivity • Define Payments Security • Define Cash Management and Banking Configuration • Define Common Accounts Receivable Configuration • Define Subledger Accounting Rules • Define Accounts Receivable Balance Monitoring Setup Activities Note: Refer to Define Receivables Configuration presentation for additional details

9. Business Process Mapping to Setup Activities • Functional Setup Manager (FSM) • Fusion setups are accessible via Functional Setup Manager (FSM) • Receivables setups available as part of Financials offering

10. Minimal Configuration to Make Receivables Operational

11. Agenda • Implementation Overview • Order Fulfillment Business Process at a Glance • Business Process Mapping to Setup Activities • Minimal Configuration to Make Receivables Operational • Key Implementation Concepts and Considerations • Security in Fusion Receivables • Business Unit, Ledger, and Legal Entity in Fusion Receivables • Reference Data Sharing Across Receivables Business Units • Accounting in Receivables • Customer Billing • Customer Payments • Revenue Management • Late Charges • Receivables to General Ledger Reconciliation • Deltas with EBS • Additional Resources

12. Security in Fusion Accounts Receivables Job Roles and Duty Roles for Performing Receivables Activities (1 of 4) • Fusion Receivables has pre-defined the following job roles to meet most organizations’ business needs * Note: These job roles have access to sub-set of tasks with in the associated activities

13. Security in Fusion Accounts Receivables Job Roles and Duty Roles for Performing Receivables Activities (2 of 4)

14. Security in Fusion Accounts Receivables Job Roles and Duty Roles for Performing Receivables Activities (3 of 4) • The pre-defined job roles have the following duty roles associated to them • Custom Security needs can be met by managing the duty role assignments

15. Security in Fusion Accounts Receivables Job Roles and Duty Roles for Performing Receivables Activities (4 of 4)

16. Security in Fusion Accounts Receivables Custom Security Examples (1 of 3) Points to Consider • Evaluate security requirements of your enterprise before deciding to create custom Job Roles • When considering creating new Job Roles, be pragmatic and consider the following dimensions • Number of Users • Convenience • Sternness of Security • Following two slides contains five examples of custom security Note: Custom job roles can be created by following instructions in Oracle Fusion Financials Security

17. Security in Fusion Accounts Receivables Custom Security Examples (2 of 3)

18. Security in Fusion Accounts ReceivablesCustom Security Examples (3 of 3)

19. Agenda • Implementation Overview • Order fulfillment business process at a glance • Business process mapping to setup activities • Minimal configuration to make Receivables operational • Key implementation concepts and considerations • Security in Fusion Receivables • Business Unit, Ledger, and Legal Entity in Fusion Receivables • Reference Data Sharing across Receivables Business Units • Accounting in Receivables • Customer Billing • Customer Payments • Revenue Management • Late Charges • Receivables to General Ledger Reconciliation • Deltas with EBS • Additional Resources

20. Business Unit, Legal Entity(LE) and Ledger in Fusion Receivables Example Legend InFusionCorp. (Holding Co) Legal entity PrimaryBSV InFusion USA East Inc. InFusion USA West Inc. InFusion (UK) Ltd. InFusion USA Fin Services SA Ledger Co 04 Co 02 Co 01 Co 03 Co 05 Business unit InFusion UK InFusion USA Corporate InFusion USA Financial Services AQM UK AQM USA Corporate SSC Financial Svc Additional Information • Legal Entities can be mapped to Ledgers and/or to Primary Balancing Segments of the Ledger • Business Units manage transactions and are associated to a ledger • Operating units in the Oracle E-Business Suite are replaced with business functions enabled on a business unit Note Your LE, BU and Ledger structures are determined by your enterprise level requirements. Refer to Oracle Fusion Financials Financial Enterprise Structures for additional details

21. Business Unit, Legal Entity(LE) and Ledger in Fusion ReceivablesSetup To Process Receivables, enable these two business functions Assign default Legal Entity Assign Primary Ledger

22. Business Unit, LE and Ledger in Fusion Receivables Determination on Receivables Transactions Note • Set up the profile option “Default Business Unit” at user level to default the BU automatically • Set up the Legal Entity value in transaction source definition • If your BU typically services single LE, you setup default LE in BU • If your BU services multiple LEs and you have clearly segregate order fulfillment flows, then setup the LE at the transaction source • Business Unit Security was referred to as Multi Org Access Control in the Oracle E-Business Suite .

23. Agenda • Implementation Overview • Order Fulfillment Business Process at a Glance • Business Process Mapping to Setup Activities • Minimal Configuration to Make Receivables Operational • Key implementation Concepts and Considerations • Security in Fusion Receivables • Business Unit, Ledger, and Legal Entity in Fusion Receivables • Reference Data Sharing Across Receivables Business Units • Accounting in Receivables • Customer Billing • Customer Payments • Revenue Management • Late Charges • Receivables to General Ledger Reconciliation • Deltas with EBS • Additional Resources

24. Reference Data Sharing Across Receivables Business Units Set Enabled Setup Objects • Reference Data Set allows sharing of the same reference data across Business Units and will not have to be redundantly defined/maintained when they are applicable to multiple Business Units • “Common Set” is seeded in Fusion for all the set-enabled objects (except Customer), to meet the business needs of most organizations Example • If an Enterprise has 10 Business Units and 20 Transaction Types, in EBS you create 200 Transaction Types but in Fusion, you only create 20 Transaction Types shared by all 10 Business Units • Revenue Scheduling Rules • Aging Buckets (Collections) • Auto Cash Rules • AutoMatch Rule Sets • Collectors (Collections) • Customer Site (TCA) • Customer Account Relationships (TCA) • Payment Terms • Receipt Application Lockbox • Exception Rules • Remit to Address • Revenue Contingencies • Sales Persons (TCA) • Standard Memo Lines • Transaction Sources • Transaction Types Set EnabledEntities Note: Refer to Oracle Fusion Financials Enterprise Structures Implementation and Configuration Considerations for additional details

25. Reference Data Sharing Across Receivables Business Units Things to Consider • Reference Data Set is a mandatory attribute for set enabled objects • The List of Values for the Reference Data Set are determined by the user’s BU access • “Common Set” is available to use by all users* • Since the “Common Set” is pre-defined, a new Reference Data Set is needed only to limit the access to certain setup objects to one or more BUs • Note::Pre-defined “Common Set” is not available for assignment in the Customer setups. • Consider defining a Global Reference Data Set to provide access to customer site to all BUs • AGM, Inc has two Business Units (US and EMEA) and some of the payment terms are unique to EMEA customers. AGM ,Inc will create “EMEA” Reference Data Set to support this business need • CIT Group has several lines of businesses supporting various customers. Transaction Sources and Transaction Types for each line of business have unique set of attributes and cannot be shared. CIT Group will need to create one Reference Data Set per each line of business Example

26. Agenda • Implementation Overview • Order Fulfillment Business Process at a Glance • Business Process Mapping to Setup Activities • Minimal Configuration to Make Receivables Operational • Key implementation Concepts and Considerations • Security in Fusion Receivables • Business Unit, Ledger, and Legal Entity in Fusion Receivables • Reference Data Sharing across Receivables Business Units • Accounting in Receivables • Customer Billing • Customer Payments • Revenue Management • Late Charges • Receivables to General Ledger Reconciliation • Deltas with EBS • Additional Resources

27. Accounting in Receivables Journal Import and Post CreateAccounting Fusion Subledger Accounting AR Distributions Fusion General Ledger Accounting Entries GL • Receivables generates distributions based on AutoAccounting Rules, Receipt Classes, Receipt Methods and Receivables Activities and passes to SLA • SLA generates accounting entries, including multiple accounting representations, based on SLA Rules AR Transactions Tr Tr • Distributions generated by AutoAccounting is interim accounting and used as a source to generate final accounting by SLA • AutoAccounting can derive transaction distributions from the following pre-defined sources • Bill To Site • Salesperson • Standard Lines • Taxes • Transaction Type • Constant

28. Accounting in Receivables AutoAccounting Sources

29. Accounting in Receivables Example AutoAccounting Setup for Receivable Account: CO: Bill To Site CC: Salesperson ACCT: Transaction Type Invoice: 7/1/2010 Acme, Inc 3 Hrs Consulting $3,000 Salesperson: Bill Brown Transaction Type: US-W AR Transaction Distributions

30. Accounting in ReceivablesBest Practices • Use pre-defined SLA rules to create accounting based on the distributions generated in Receivables to avoid future maintenance complexity • Modify the seeded SLA rules or create new rules only if distributions as a source do not meet your accounting needs • Receivables seeded approximately 800 sources to support flexible SLA rules • Schedule Create Receivables Accounting batch process to generate accounting at regular intervals • Use on-line accounting, if needed, to generate accounting in exceptional cases • In addition to the scheduled runs, run Create Receivables Accounting batch process during period close to capture any last minute transactions Note: Refer to Oracle Subledger Accounting Implementation and Configuration Considerations Training for detailed information.

31. Agenda • Implementation Overview • Order Fulfillment Business Process at a Glance • Business Process Mapping to Setup Activities • Minimal Configuration to Make Receivables Operational • Key implementation Concepts and Considerations • Security in Fusion Receivables • Business Unit, Ledger and Legal Entity in Receivables • Reference Data Sharing across Receivables Business Units • Accounting in Receivables • Customer Billing • Customer Payments • Revenue Management • Late Charges • Receivables to General Ledger Reconciliation • Deltas with EBS • Additional Resources

32. Customer BillingCreation Methods for Billing Documents

33. Customer Billing AutoInvoice - Overview Upstream Applications AutoInvoice Import Send Data Errors • Invoices • Credit Memos • Debit Memos • Interface Table • Exception Management- • Correct Errors • in Excel and upload

34. Customer BillingAutoInvoice – Transaction Source - Key Considerations (1 of 2)

35. Customer BillingAutoInvoice - Transaction Source - Key Considerations (2 of 2) If your accounting practice is to reject transactions in closed accounting period, set the value as “Reject” which means that you will need to re-open the period to process these lines Consider to set the value as reject Invoice to avoid creating multiple invoices Verify the default values of Import Information and update if needed

36. Customer BillingConfigurationRecommendations (1 of 5)

37. Customer Billing ConfigurationRecommendations (2 of 5) - Fusion Customer Data Model Location Party Site • Define key information in your customer setup so that the information will be defaulted during manual transaction and also derived by AutoInvoice. Example • Payment Terms • Receipt Methods • Receipt Matching criteria • Reference Accounts (Used by Auto Accounting) Tip Points to Note PARTY Person or Organization Account Relationship Customer Profile Account Date Effective Account • Manage Customers provides single page overview about customers, accounts, and sites • In EBS Customer Site and Account Relationships are Operating Unit striped but in Fusion both are reference data set striped, which will enable sharing of these entities across BUs • In Fusion, Profile Class association to a Customer Account or Site is Date Effective Points to Note Site 3 Site 2 Site 1 Site Purposes Bill-to, Ship-to Statement Site Purposes Bill-to, Ship Site Purposes Bill-to

38. Customer Billing ConfigurationRecommendations (3 of 5) • When do I create multiple Customer Accounts? • Define multiple customer accounts for one party if you market, sell to, and service that company as one entity, but have different selling relationships with that party • Your customer purchases your products for their own personal use as well as for government project use. For their government purchases, GSA pricing exists, whereas when they purchase directly for their use, they have a globally established discounted price. In this case, you may want to create two accounts (one for GSA and one for direct) under the same party Example • When should I create multiple Customer Account Sites? • Define one active Bill-to Site per Customer Account where possible. However, if multiple bill-to addresses have same terms and conditions ,create multiple bill-to sites under same account • You sell widgets to ABC Co., which has locations across the world. ABC Co. has established countrywide purchasing agreements with you, whereby every location in each respective country receives the exact same discount and contractual agreements when making a purchase.Given the business model, the best practices will be to create one Party and one Customer Account for each domestic HQ of ABC Co. (e.g. ABC Co. US), create multiple Bill-to Sites for each account. Example

39. Customer BillingConfigurationRecommendations (4 of 5) Business Cases

40. Customer BillingConfigurationRecommendations – Present Bill (5 of 5) • Use Pre-defined templates for your bill presentment with minimum personalization • Update with your company logo • Verify the pre-defined attributes in the template and add more if needed. Examples of pre-defined attributes are • Bill To • Remit To • Invoice Number etc. • Set your template as a Default Template in BI Publisher • List of pre-defined templates • Default Invoice Template • Default Credit Memo Template • Default Debit Memo Template • Default Chargeback Template • Default Balance Forward Bill Detail Template • Default Balance Forward Bill Summary Template Invoice based on the pre-defined Default Invoice Template 40

41. -% Customer Billing Centralized Tax Engine- Simplify Global Tax Compliance • Tax Setup • Quickly set up tax with pre-seeded content • Adapt to changing tax rules with date-effective tax content • Simulate tax changes with Tax Simulator Tax • Sales and Use Tax • Recoverable & Non-Recoverable Tax • Deferred Tax • Tax on Freight • Duty Tax • Tax on Intercompany Movements • Inclusive or Exclusive Tax • Offset Taxes • Tax Calculation • Automatically & accurately calculate tax • Allow certain individuals to override tax calculation • Tax Reporting • Standardized and simplified reporting using BI Publisher • Modify/extend reporting templates Note: Refer to Oracle Fusion Tax Implementation and Configuration Considerations Training for detailed information on tax related functionality and configuration in Receivables

42. Agenda • Implementation Overview • Order Fulfillment Business Process at a Glance • Business Process Mapping to Setup Activities • Minimal Configuration to Make Receivables Operational • Key implementation Concepts and Considerations • Security in Fusion Receivables • Business Unit, Ledger, and Legal Entity in Receivables • Reference Data Sharing across Receivables Business Units • Accounting in Receivables • Customer Billing • Customer Payments • Revenue Management • Late Charges • Receivables to General Ledger Reconciliation • Deltas with EBS • Additional Resources

43. Customer PaymentsOverview Customer Payments provides versatile methods of payment creation and cash application • Multiple receipt creation methods support a variety of business needs • Lockbox • Automatic Receipt • Excel Upload • Manual • Smart Receipts - robust receipt application engine enables you to apply cash efficiently and effectively with minimal manual intervention • Generates recommendations for receipts that cannot be automatically applied

44. Customer PaymentsCreation Methods for Receipts Lockbox Receipts Loads lockbox bank files to create and apply receipt efficiently Receipts via Spreadsheet Allows fast data entry in bulk and can be used offline Customer Receipts Automatic Receipts Manual Receipt Entry Integrates with Oracle Fusion Payments to process Credit Card and Bank Account Transfer payments Supports fast and efficient manual receipt creation with tools to facilitate manual receipt application

45. Customer PaymentsLockbox Receipt Processing - Overview Implementing Company • Supports multiple lockbox transmission file formats • Supports lockbox error correction via spreadsheet • Leverages the new SmartReceipts engine • Increases the receipt application hit rate based on customer remittance advice • Generates recommendations based on receipt reference information when receipt cannot be automatically applied Customer Invoice(s) Billing Department Payment sent to Financial Institution Lockbox Correct error in Excel and Re-run Lockbox Lockbox file with customer payment details Receivables Department Financial Institution

46. Customer PaymentsAutomatic Receipts - Overview Implementing Company Clearance Automatic Receipts (creation, approval, confirmation) Invoice(s) Cash Receipt(s) Billing Department Customer Payment Arrangement using credit card or bank account transfer Remittance (funds capture is processed by Oracle Fusion Payments) Bank statement (funds settlement is processed by Oracle Fusion Payments) • Automatically generates receipts for customers with predefined agreements by transferring funds from the customer's bank account to yours on the receipt maturity date • All required processing steps can be scheduled to run automatically with minimal manual intervention Receivables Department Receivables Department Financial Institution

47. Customer PaymentsSmartReceipts - Overview • SmartReceipts increases the receipt application hit rate when payments contain inaccurate reference data • Automatically applies the receipt or generate recommendations • Supports both invalid customer and transaction references • Allows users to specify threshold scores above which recommendations are generated and automatically accepted • SmartReceipts also streamlines exception cases when the Customer has either overpaid or underpaid

48. Customer Payments Choosing a Creation Method - Recommendations

49. Customer Payments Implementation Overview Features Manual Receipts via Lockbox Automatic Setups Receipt Spreadsheet Receipts X X X X Receipt Classes & Methods X Lockboxes X Transmission Format SmartReceipt SmartReceipt SmartReceipt AutoMatch Rule Sets SmartReceipt SmartReceipt SmartReceipt Application Exception Rule Sets X X X Receipt Sources X X X X Application Rule Sets X AutoCash Rule Sets X Receivables Activities X Funds Capture Processing* X Document Sequencing X Payment Instruments * Funds Capture and Payment System Connectivity configurations are required pre-requisites for automatic receipts. Refer to Oracle Fusion Payments Implementation Training Guide for details

50. Customer PaymentsImplementation Overview - Receipt Classes and Methods – Key Decisions (1 of 2) Receipt Classes & Methods • Determine • Whether receipts are created manually, via lockbox, or through automatic receipts with the receipt class • Which bank account(s) to use to remit receipts • What is the minimum receipt amount required for remitting to each bank account • What clearing method to use