Transaction Classes in Oracle Receivables

Transaction Classes in Oracle Receivables 

 
Transaction Classes in Oracle Receivables (AR) define the type and business purpose of a receivable transaction. They control how a transaction behaves, how it affects customer balance and how it is accounted for in the system.

There are 6 transaction class in Oracle Receivables into which a transaction can be classified. 

These are:
1. Invoice
2. Debit memo
3. Credit Memo
4. Chargeback
5. Deposit
6. Guarantee

Invoice: It is a document which is sent to the customers to let them know that a transaction has been recorded and the customer balance due related to the transaction.

Debit Memo: It is sent to the customers to let them know that they were undercharged for a transaction. For eg: if you forget to charge your customer for freight amount for a transaction , you would send a debit memo to your customer rather than creating a new invoice for the same. Debit memo increases the liability (balance due) of the customer.

Credit Memo: This document is sent to the customers to let them know that they have been overcharged for a transaction. Credit Memo would bring down the liability(balance due) of the customer. Credit Memo has a negative amount. Eg: Suppose your customer returns back a defective item which you have shipped, you will send a credit memo to the customer to let them know the amount they have to pay less for returning the item.

Chargeback: This is sent to the customers to let them know of the balance due after only a part of an existing transaction has been paid. For eg : Suppose an invoice amount is 1000 PKR and your customer has paid you 800 PKR. You would chargeback an amount of 200 PKR to the customer.

Deposit: This document is created when your customer deposits an amount with you as a commitment before having any transaction with you. You have to create a receipt for the deposit and apply the deposit to the future transactions of the customer.

Guarantee: This document is created when your customer has promised to have transactions worth a certain amount but has not paid for it. In this case, you would record a guarantee first. Then you would create receivable transactions for the customer and apply receipt and guarantee document to the transaction.

Transaction classes in Oracle Receivables define the nature of receivable transactions and determine how they impact customer balances and accounting.