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Implementing Lockbox Your step-by-step guide for implementing Oracle Receivables Lockbox functionality Product: Oracle Receivables Version: Release 12

Anil R. Patil

Implementing Lockbox

oracle.anilrpatil.com

Contents

Objective ....................................................................................................................................................... 3

Overview of Lockbox ..................................................................................................................................... 3

Implementing Oracle Receivables Lockbox functionality ............................................................................. 4

Setup Overview ......................................................................................................................................... 4

Bank and Bank Accounts ........................................................................................................................... 5

Receipt Class & Receipt Method ............................................................................................................... 7

Receipt Method – Bank Accounts ............................................................................................................. 9

Receipt Source ........................................................................................................................................ 10

Lockbox ................................................................................................................................................... 11

Transmission Formats ............................................................................................................................. 15

Transmission Fields ................................................................................................................................. 17

AutoCash Rule Sets ................................................................................................................................. 20

Control File .............................................................................................................................................. 21

Data File .................................................................................................................................................. 22

Lockbox Processing Steps ........................................................................................................................... 25

Submit Lockbox Process .............................................................................................................................. 26

Maintain Transmission Data ....................................................................................................................... 28

Identifying Customers for Receipts ............................................................................................................. 30

Conclusion ................................................................................................................................................... 31

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Objective The Objective of this document is to explain how to use the Oracle Receivables Lockbox functionality. This document will explain some of the key setups required for implementing Lockbox and will guide you for setting up the Lockbox format and also generating a sample lockbox file for testing purpose.

Overview of Lockbox Lockbox is a service offered by banks to companies in which the company receives payments from their customers by mail to a post office box and the bank picks up the payments and deposits it in the company’s bank account. In a way, the company is outsourcing its AR function of collecting the checks and depositing it in the bank. The bank then informs the company of all the payments received. They normally send a Flat file (text file) to the company that gives all the details of the deposits made in the bank account. The details captured in the flat file depend on the arrangement between the bank and the company. This flat file is referred to as the Lockbox file. The company can then import this Lockbox file in their system to create receipts and apply these receipts to the open invoices. Oracle Receivables provide a standard functionality to import the lockbox file to create the receipts. It also provides you with the flexibility to define customized lockbox formats to enable you to accept the lockbox file in any format for any of the banks. The Oracle Lockbox functionality can also be extended to convert Receipts information from any other legacy system or from the remittance advice the company gets directly from their customers.

Implementing a lockbox solution by importing a lockbox file from the bank goes beyond just Oracle Receivables configurations. You need to contact the bank, discuss and agree on the lockbox file format before you start your work on Oracle Receivables. You need to decide how much information you want the bank to capture, how the bank will capture the information and so on. In most cases, the bank captures the remittance information by scanning the scan-line included in the payment coupon. This payment coupon is sent to the customers along with the Invoice (Generally the bottom of the first page of the Invoice). The scan-line will include information such as Account number, remittance amount, invoice number and so on. This is how a typical payment coupon looks like

Once the bank receives the payment along with the payment coupon, the bank scans the Scan line to capture the required information to be included in the Lockbox file. Each digit in the scan line indicates some important information. For e.g. the last 5 digits in the scan line above indicate the amount.




Implementing Oracle Receivables Lockbox functionality

Setup Overview You need to setup the following before running the Lockbox process

1) Bank and Bank Accounts: You define your internal bank accounts in Accounts Receivables. This is the bank account where the customer payments are deposited.

2) Receipt Class: The Receipt Class determines the processing steps for the receipts and you assign Receipt Methods to your Receipt Class. The processing steps for any Receipt include confirmation, remittance and reconciliation.

3) Receipt Method: Receipt Method is assigned to a receipt class and it determines how to account for the receipts using the Receipt Class. For one Receipt Class, you can have more than one Receipt Methods. You associate bank accounts and the GL account combinations for Cash, Remittance, and Bank Charges etc with the Receipt Method.

4) Receipt Source: You define Receipt Batch Sources to provide default values for Receipt Class, Receipt Method and the Remittance Bank Account. Your Receipt Source also determines if the batch numbering system is manual or automatic.

5) Lockbox: Define a lockbox for your Lockbox service from each bank. The lockbox setup includes a Lockbox number (You get a Lockbox number from your bank).

6) Lockbox Transmission Formats: Oracle Receivables AutoLockbox uses the Transmission format while importing the data from the lockbox file into Receivables. Transmission formats indicate how the data in the Lockbox file is organized.

7) AutoCash Rule Sets: AutoCash Rule Sets determines the sequence of AutoCash Rules that Post QuickCash program uses to apply the receipt amount to the customer account open items.

8) Control file: A Control file is a sql loader file to load the lockbox file in Receivables payment interface table (ar_payments_interface_all). This file should have the ‘.ctl’ extension and should be placed in the $AR_TOP/bin directory.

Input Data

1) Lockbox file: The only input data you need for the lockbox process is the Lockbox file (flat file). You receive this file from the bank. If you are using the Lockbox functionality to convert AR receipts from legacy system, you can generate this file yourself.




Bank and Bank Accounts

Navigation: Setup => Receipts => Banks (You could also setup Banks from Cash Management responsibility)

You define your internal bank accounts in Accounts Receivables. This is the bank account where the customer payments are deposited. Please note that the Bank setup and the bank security access have changed in Release 12. For more details on bank security access, you can refer the following metalink document

NOTE:403975.1 - How to Setup Bank Account Access Security In Release 12

You also need to run the CE UMX Security Wizard to be able to provide Bank Account access to Legal entities. Follow the following steps to run the wizard

1) Log in as Sysadmin.

2) Go to the User Management Responsibility.

3) Path: Roles & Role Inheritance

4) In the Type field select Roles and Responsibilities

5) Wait until a new field appears, you will see the category field, please select Miscellaneous

6) In the Application select 'Cash Management' and click on GO button.

7) Search your Cash Management responsibility (Hit go) and look for role <Cash Management Responsibility Name>

8) Click on the update icon for role <Cash Management Responsibility Name>

9) A new window will be displayed, please click in the Security wizard Tab. Hit ‘Save and Proceed”

10) For CE UMX Security wizard click on the Run Wizard.

11) In this window you should add the legal entities that you want to grant the access to all the bank accounts within a legal entity and choose the privileges that you want to assign to this role on the bank accounts such as: USE, MAINTENANCE and BANK ACCOUNT TRANSFERS.


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12) Click “Add Legal Entities”. Click “Go” and then select the legal entities from the list. Next screen select all required options for the legal entities and hit “Apply”. On the next screen also hit “Apply”

13) Save and apply the changes and then verify in Cash management responsibility if you now are able to see that legal entity in the bank account creation form.




Receipt Class & Receipt Method

Navigation: Setup => Receipts => Receipt Classes

The Receipt Class determines the processing steps for the receipts and you assign Receipt Methods to your Receipt Class. The processing steps for any Receipt include confirmation, remittance and reconciliation.

Receipt Method is assigned to a receipt class and it determines how to account for the receipts using the Receipt Class. For one Receipt Class, you can have more than one Receipt Methods. You associate bank accounts and the GL account combinations for Cash, Remittance, and Bank Charges etc with the Receipt Method.

Receipt Class fields:

Creation Method:

• Use Creation method ‘Manual’ to use the Receipt Class for Lockbox. If the creation method is Manual, you can use the Receipt Class for creating manual receipts using the Receipts or Quickcash window or by importing the receipts using AutoLockbox.

• Use Creation method ‘Automatic’ to create receipts using the Automatic receipt program.

Since you want to use this receipt class for Lockbox, you will select the Clearance method ‘Manual’.

Remittance Method: If the Creation method is Manual, set the Remittance method to ‘No Remittance’. Remittance Method is used only if the Creation Method is ‘Automatic’. The Remittance method determines the accounts to be used for automatic receipts.

Clearance Method:




• Use Clearance Method ‘Directly’, if you want the receipts to be cleared at the time of receipt entry.

• Use Clearance Method ‘By Automatic Clearing’, if you want to clear the receipt using the Automatic Clearing Program.

• Use Clearance Method ‘By Matching’, if you want to clear the receipt by matching the receipt to Bank Statement line in Cash Management.

For the Receipt Class, enter a Receipt Method name, printed name and effective dates and click ‘Bank Accounts’ to assign a Bank Account and GL Account Combinations to the Receipt Method.




Receipt Method – Bank Accounts

Navigation: Setup => Receipts => Receipt Classes => (B) Bank Accounts

Select the required bank account and provide the required GL Account combinations. These accounts are used in receipt accounting whenever a receipt is created using the Receipt Method.




Receipt Source

Navigation: Setup => Receipts => Receipt Sources

You define Receipt Batch Sources to provide default values for Receipt Class, Receipt Method and the Remittance Bank Account. Your Receipt Source also determines if the batch numbering system is manual or automatic. To be able to use Batch Source in Lockbox, the Batch Numbering should be set to ‘Automatic’.




Lockbox

Navigation: Setup => Receipts => Lockboxes => Lockboxes

Define a lockbox for your Lockbox service from each bank. You can also define a lockbox to convert receipt information from your legacy system.

1) Lockbox Number: You get a Lockbox Number from your bank. If you are implementing Lockbox for converting receipt information from other sources, you can specify your own Lockbox Number.

2) Batch Source: Select one of your pre-defined Batch Source. To be able to use Batch Source in Lockbox, the Batch Numbering should be set to ‘Automatic’. The Bank Account information is defaulted from the Batch Source definition.

3) Bank Origination Number: The Bank Origination Number is provided by your bank. This number uniquely identifies the bank branch that sends you the Lockbox information. If you are implementing Lockbox for converting receipt information from other sources, you can specify your own Bank Origination Number.

4) Accounting Flexfield: The Accounting Flexfield displays the Cash Account of the Receipt Method.




1) Batch Size: Enter the batch size you want the Lockbox validation program to assign to each receipt batch. If there is more number of receipts in the lockbox file than the batch size, the receipts are created in more than one batch.

2) GL Date Source: This source determines the GL date for the receipts created by the Lockbox program. You can select one of the following values for the GL Date Source

• Constant Date: The GL Date you enter while submitting the Lockbox process is used as the GL date for your receipts

• Deposit Date: The deposit date from the Lockbox file will be considered as the GL date for your receipts

• Import Date: The date on which you import the receipts becomes the GL date of the receipt.

3) Exchange Rate Type: If there are foreign currency receipts in your lockbox file without the exchange rate type, this Exchange Rate Type is used for conversion

4) Receipt Method: This defaults from the Batch Source you have assigned to the Lockbox. You can change the default Receipt Method.

5) Require Billing Location: If the system option ‘Require Billing Location for receipts’ is set to ‘Yes’, the ‘Require Billing Location’ check box should be checked, else the Lockbox process will display an error message. This option determines if Lockbox process should be able to create receipts with or without billing location.

6) Match Receipts By: This option determines how the receipts will be matched (to which number). You can select one of the following options




• Transaction Number: Receipts are matched using the transaction number

• Balance Forward Billing Number: Receipts are matched using the Balance Forward Billing Number. The customer needs to be enabled for Balance Forward Billing if you want to use this option.

• Sales Order Number: Receipts are matched using the Sales Order Numbers. The Lockbox process uses the Sales Order Number to determine the corresponding Invoice Number.

• Purchase Order Number: Receipts are matched using the Sales Order Numbers. The Lockbox process uses the Purchase Order Number to determine the corresponding Invoice Number.

• Hook: Hook is a custom matching method that you define. Using Hook, you can match the receipt using any other matching number that is passed in the lockbox file. The Lockbox process uses this Number to determine the corresponding Invoice Number. Oracle Receivables supplies the packaged procedure arp_lockbox_hook.cursor_for_matching_rule which you can use to add your own custom matching rule with AutoLockbox.

7) Match on Corresponding date: Determines if you want to match on corresponding date for transaction in the lockbox process. You can select one of the following options

• Always: This option will always verify that the date of the transaction is the same as the date in the lockbox transmission

• Duplicates Only: This option will verify the matching date only if there is duplicate matching numbers.

• Never: The lockbox process never matches the date. This is the default option.




1) Auto Associate: The Auto Associate option if checked determines the Customer based on the debit item number (Invoice number) mentioned in the Lockbox file. If there is no MICR number or Customer number in the lockbox file and if Auto Associate is set to Yes, Lockbox process will identify the Customer based on the debit item number given in the Lockbox file. This option is also useful when you have scenarios wherein customer A makes payment for Customer B’s invoices. If you are using Auto Associate, when applying payment from Customer A to open invoices of Customer B, the receipt will be identified as paid by Customer B.

2) Invalid Transaction Number Handling: This option determines how the lockbox process will handle receipts that were identified by the MICR or Customer number but could not be applied because of invalid transaction number

• Post Partial Amount as Unapplied: If this option is enabled, Lockbox process applies the Receipt to valid transactions and the remaining receipt amount that could not be applied because of invalid transaction numbers is considered as unapplied amount. This option is generally set to Yes.

• Reject Entire Receipt: If there are any invalid transaction numbers in the Lockbox file, the entire receipt is rejected. The receipts data remains in the ar_payments_interface_all table. You can update the invalid record using the Maintain Lockbox Transmission Data window.

3) Line Level Cash Application: Default value is set to None.




Transmission Formats

Navigation: Setup => Receipts => Lockboxes => Transmission Formats

Oracle Receivables AutoLockbox uses the Transmission Format while importing the data from the lockbox file into Receivables. Transmission formats indicate how the data in the Lockbox file is organized. A Lockbox file contains multiple types of records and each record has different fields. In the Transmission Format header screen, you define the different type of records your lockbox file will contain. Each record is identified by an Identifier. For each of these records, you define the Transmission Fields. You may define as many formats as you need.

The various Record Types available are as follows

1) Batch Header: A Batch Header marks the beginning of a specific batch. Batch Headers usually contain information such as batch number, deposit date, and lockbox number.

2) Batch Trailer: A Batch Trailer marks the end of a specific batch. Batch Trailers usually contain information such as batch number, lockbox number, batch record count, and batch amount.

3) Lockbox Header: A Lockbox Header marks the beginning of a specific lockbox. Lockbox Headers usually contain information such as destination account and origination number.

4) Lockbox Trailer: A Lockbox Trailer marks the end of a specific lockbox. Lockbox Trailers usually contain information such as lockbox number, deposit date, lockbox amount, and lockbox record count.

5) Overflow Payment: An Overflow Payment usually contains invoice information for a specific payment such as batch number, item number, sequence number, overflow indicator, invoice number, debit memo number, or chargeback number, and debit item amounts. Oracle Receivables combines the overflow and payment records to create a logical record to submit payment applications.




6) Payment: A Payment usually contains information such as MICR number, batch number, item number, check number, and remittance amount.

7) Service Header: Service Header records contain general information about your transmission. 8) Transmission Header: A Transmission Header marks the beginning of a specific data file. Transmission

Headers usually contain information such as destination account, origination number, deposit date, and deposit time.

9) Transmission Trailer: A Transmission Trailer marks the end of a specific data file. Transmission Trailers usually contain information such as total record count.

Note: Your bank file might not contain all of these record types. You should define your transmission format to only include the record types that are actually used in the transmission format. You will get the Lockbox file format details from your bank. If you are using Lockbox to convert AR Receipts from other source, you can define your own format. The Transmission format shown above is a custom format. Oracle Receivables provides you with the following seeded formats

• Example (arxmpl.ctl): A format that contains an example of lockbox header information, several receipt records, and overflow receipt records.

• Default (ardeft.ctl): A standard BAI (Bank Administration Institute) format used by most banks. • Convert (arconv.ctl): A standard format used for transferring payment information from other

systems. • Cross Currency (arxcurr.ctl): A default format used for importing cross currency receipts. • Zengin (arzeng.ctl): A format used to import bank files in the Japanese Zengin format.

These files are located in the $AR_TOP/bin directory and are compatible with corresponding standard SQL*Loader control files.




Transmission Fields Record Type = Lockbox Header Identifier = 2

Record Type = Overflow Payment Identifier = 4

Record Type = Payment Identifier = 6

You can choose one of the following Transmission fields in your format

When defining your transmission fields, you can choose from the following field types: • Account: Your customer's bank account. The bank account number and the transit routing number make up

your customer's MICR number.




• Alternate Name: The alternate name for this customer. • Amount Applied 1 to 8: The amount applied to each invoice, debit memo, or chargeback. Each payment

or overflow payment record can accommodate up to eight debit item numbers. For cross currency applications, this is the amount to apply in the transaction currency and corresponds to the Amount Applied field in the Applications window.

• Amount Applied From 1 to 8: Used for cross currency receipt applications, this is the amount applied to each transaction in the receipt currency. Each payment or overflow payment record can accommodate up to eight debit item numbers. This field corresponds to the Allocated Receipt Amount field in the Applications window.

• Attribute 1 to 15: Use attributes to enter Descriptive Flexfield segments. Attributes can only be assigned to Payment records, and they become the Descriptive Flexfield data in the QuickCash, Receipts, and Applications windows.

• Bank Transaction Code: A code defined for each account that is used by your bank to uniquely identify the kind of transaction in a bank statement (for example, debit, credit, void). This is also used by Oracle Cash Management to determine a receipt's effective date.

• Batch Amount: The total receipt batch amount for a specific bank batch. • Batch Name: The name of the batch for a specific bank batch. • Batch Record Count: The total number of payment records in a specific bank batch. The total number of

all batch record counts equals the Lockbox Record Count. This does not include overflow payments, headers, or trailers.

• Billing Location: Your bank will be able to transmit the billing location of the payment. You must only specify the field name and the field positions that the billing location occupies in the transmitted data file.

• Comment: Any comments you want to associate with this transmission. • Currency Code: The currency of the payment. For cross currency payments, you can also enter the

Invoice Currency Code (see below). If you do not enter a value in this field, AutoLockbox derives the currency code from the information that is provided in the Amount Applied and Amount Applied From fields.

• Customer Bank Branch Name: The name of your customer's bank branch. • Customer Bank Name: The name of your customer's bank. • Customer Number: The identification number of the customer who submitted a payment. • Customer Reason 1 to 8: The customer's reason why their payment shows a discrepancy (used by Oracle

Trade Management). • Customer Reference 1 to 8: Customer comments about this payment. • Deposit Date: The date the bank receives and deposits your customer's payment. • Deposit Time: The time at which the bank receives and deposits your customer's payment. • Destination Account: Your business's bank account. Your business may have more than one bank account. • Effective Date: The date on which the bank determines a customer's balance to apply interest (used by

Oracle Cash Management's Cash Forecasting feature). • Exchange Rate: The exchange rate associated with this payment if you are using AutoLockbox to import

foreign currency receipts. • Exchange Rate Type: The exchange rate type used to convert a foreign currency receipt to your functional

currency. Values include Corporate, Spot, or User. • Invoice 1 to 8: The invoices, debit memos, and chargebacks to which you apply your payment. Each

payment or overflow payment record can accommodate up to eight debit item numbers. • Invoice 1 to 8 Installment: The installment number for this invoice. • Invoice Currency Code 1 to 8: The currency of the transaction. This field is used for cross currency

receipt applications. This field is optional. • Item Number: A sequence number that your bank assigns to a specific payment. This number associates

an invoice with a receipt. • Lockbox Amount: The total payment amount in a specific lockbox.

• Lockbox Batch Count: The total number of bank batches in a specific lockbox.

• Lockbox Number: The identification number for a specific lockbox.




• Lockbox Record Count: The number of payment records in a specific lockbox (this does not include overflow payments, headers, or trailers).

• Matching Date 1-8: The dates to use to match receipts with transactions if you are using the Match on Corresponding Date option for this Lockbox.

• Origination: The bank origination number provided by your bank. This number uniquely identifies the bank branch that sends you lockbox information.

• Overflow Indicator: This type indicates whether there are any additional overflow records for this payment.

• Overflow Sequence: A sequence number that your bank assigns to each overflow payment. • Receipt Method: The receipt method associated to this lockbox. • Payment Number: The identification number of a payment. For example, a check number. • Receipt Date: The date your customer made a payment. • Record Identifier: A number that identifies the kind of transmission record. You specify this number in

the Identifier field in the Transmission Formats window. • Remittance Amount: The amount of a payment. • Remittance Bank Branch Name: The name of the bank branch from which this payment originated. • Remittance Bank Name: The name of the bank from which this payment originated. • Status: The status of this payment. • Total Record Count: The total number of transmission records in a bank file. This includes headers,

trailers, payments, and overflow records. • Trans to Receipt Rate 1 to 8: The exchange rate used to convert the receipt amount from the receipt

currency to the transaction currency. This field is used for cross currency receipt applications when the receipt and transaction currencies do not have a fixed exchange rate (the euro and all NCUs have fixed exchange rates with each other). If the currencies have a fixed rate, this field is optional (AutoLockbox derives the rate to use in this case).

• Transit Routing Number: The number that uniquely identifies your customer's bank. The transit routing number and the customer bank account number make up your customer's MICR number.

• Transmission Amount: The total amount of payments for a bank file.




AutoCash Rule Sets

Navigation: Setup => Receipts => AutoCash Rule Sets

AutoCash Rule Sets determines the sequence of AutoCash Rules that Post QuickCash program uses to apply the receipt amount to the customer account open items. If none of the AutoCash Rules apply, the remaining amount is placed as Unapplied or On-Account depending on the Remaining Remittance Amount option specified in your AutoCash Rule Set.

You can provide more than one AutoCash Rule with a sequence number. Oracle Receivables will try to apply the AutoCash Rules in the order of the Sequence Number.

The available AutoCash Rules are as follows

• Clear the Account: Post QuickCash uses this rule only if your customer's account balance exactly matches the amount of the receipt. If the receipt amount does not exactly match this customer's account balance, Post QuickCash uses the next rule in the set.

• Apply to the Oldest Invoice First: This rule matches receipts to debit and credit items starting with the oldest item first. This rule uses the transaction due date when determining which transaction to apply to first.

• Clear Past Due Invoices: This rule is similar to the 'Clear the Account' rule because it applies the receipt to your customer's debit and credit items only if the total of these items exactly matches the amount of this receipt. However, this rule only applies the receipt to items that are currently past due.

• Clear Past Due Invoices Grouped by Payment Term: This rule is similar to the 'Clear Past Due Invoices' rule, but it first groups past due invoices by their payment term, and then uses the oldest transaction due date within the group as the group due date. When using this rule, Receivables can only apply the receipt if the receipt amount exactly matches the sum of your customer's credit memos and past due invoices.

• Match Payment with Invoice: This rule applies the receipt to a single invoice, debit memo, or chargeback that has a remaining amount due exactly equal to the receipt amount.




Control File There are several seeded control files provided by Oracle for each of the seeded Transmission formats. These control file are located in the $AR_TOP/bin directory. If you define your own Transmission Format, you must create a control file that matches with the Transmission format before you import data into Receivables. The control file should have an extension of .ctl

Below is a sample Control File that matches with the Transmission Format mentioned above -- $Header: arplbox.ctl 120.1 2009/11/20 10:37:58 apatil noship $ -- Loads Lockbox flat file in to oracle /************************************************************************************************ --* arplbox.ctl script * ************************************************************************************************* --Program : Manual AutoLockBox US --Description : This is a Customized Control File for Auto Lockbox US.It Imports Receipt -- data from the flat file in to ar_payments_interface_all table --Notes : This Control file should be in Sync with Transmission format defined. --Author : Anil Patil ************************************************************************************************* --Version Date Author Modifications --1.0 11/20/2009 Anil Patil Initial Version ************************************************************************************************/ LOAD DATA APPEND -- Type 2 - Lockbox Header INTO TABLE AR_PAYMENTS_INTERFACE WHEN RECORD_TYPE = '2' ( STATUS CONSTANT 'AR_PLB_NEW_RECORD' ,RECORD_TYPE POSITION(01:01) CHAR ,DESTINATION_ACCOUNT POSITION(02:11) CHAR ,ORIGINATION POSITION(12:21) CHAR ,LOCKBOX_NUMBER POSITION(22:27) CHAR ) -- Type 6 - Payment record INTO TABLE AR_PAYMENTS_INTERFACE WHEN RECORD_TYPE = '6' ( STATUS CONSTANT 'AR_PLB_NEW_RECORD' ,RECORD_TYPE POSITION(01:01) CHAR ,LOCKBOX_NUMBER POSITION(02:05) CHAR ,BATCH_NAME POSITION(06:08) CHAR ,ITEM_NUMBER POSITION(09:11) CHAR ,REMITTANCE_AMOUNT POSITION(12:21) DECIMAL external ,TRANSIT_ROUTING_NUMBER POSITION(22:30) CHAR ,ACCOUNT POSITION(31:44) CHAR ,CHECK_NUMBER POSITION(45:54) CHAR ,DEPOSIT_DATE POSITION(55:60) DATE 'YYMMDD' NULLIF DEPOSIT_DATE=BLANKS ) -- Type 4 - Overflow INTO TABLE AR_PAYMENTS_INTERFACE WHEN RECORD_TYPE = '4' ( STATUS CONSTANT 'AR_PLB_NEW_RECORD' ,RECORD_TYPE POSITION(01:01) CHAR ,LOCKBOX_NUMBER POSITION(02:05) CHAR ,BATCH_NAME POSITION(06:08) CHAR ,ITEM_NUMBER POSITION(09:11) CHAR ,OVERFLOW_SEQUENCE POSITION(12:14) CHAR ,OVERFLOW_INDICATOR POSITION(15:15) CHAR ,INVOICE1 POSITION(16:30) CHAR ,CUSTOMER_NUMBER POSITION(34:41) CHAR ,AMOUNT_APPLIED1 POSITION(42:51) DECIMAL external "DECODE(:AMOUNT_APPLIED1,0,NULL,:AMOUNT_APPLIED1)" )




Data File If you have a Lockbox service arrangement with the bank, you get the Lockbox data file from the bank. If you are using Lockbox to convert Receipts data from other system, you can generate your own data file. Below is a sample data file that was manually generated.

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ee http://www.anilrpatil.com/oracle/lockbox_file_creation_template.xls for a sample lockbox data file creation template as per the Transmission Format mentioned above. You can use the Excel file to generate the Lockbox data file. In the Data Sheet of the Excel file, enter/copy your receipts data. This data will be converted in the transmission format in the Text sheet. (Note: Do not insert/delete any columns in the Data sheet as the formula in the Text sheet will become invalid. If you insert/delete any columns, you will have to update the formula in the Text sheet as well). You can change the data as required. After you enter your data, save the Text sheet as a .csv file. Open this .csv file in wordpad to make sure that that file has been created properly.


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Reading the Data file: The data for record type 4 has been highlighted in different columns to explain how to make sure that the data in the Lockbox File and the Transmission Format are in sync.

• The first column (Position 01:01) indicates the record identifier. In this case, the value is 4 since this is the value we gave to the record type Overflow Payment.




• The second column (Position 02:05) indicates the Lockbox Number. (Value = L820).

• The third column (Position 06:08) indicates the Batch Name. (Value = ZXC).

• The fourth column (Position 09:011) indicates Item Number. The Item Number would remain the same value for one receipt.

• The fifth column (Position 12:14) indicates Overflow Sequence. The overflow sequence is normally a sequential numbering.

• The sixth column (Position 15:15) indicates Overflow Indicator. This type indicates whether there are any additional overflow records for this payment. In this case the overflow indicator value is gives as 0. When the Lockbox process gets a value of 0, it will go to the next record for overflow payment application. A non-zero value (in this case 9) indicates end of Overflow Payments.

• The seventh column (Position 16:30) indicates the Invoice number. Note that the Invoice number is Left justified and the fill symbol is Blank. Hence you see blank spaces after the Invoice number.

• The eighth column contains data that you do not need in your Lockbox process and hence you have not included it in the Transmission Format.

• The ninth column (Position 34:41) indicates the Customer Number. Note that the Customer number is Right justified and the fill symbol is Zero. The Customer Number in this case is 1031 and since it is right justified with zero fill symbol, the value in the file for the customer number should be 00001031.

• The tenth column (Position 42:51) indicates the amount that needs to be applied to the Invoice. Note that the value of 48294 would actually mean 482.94 because the Format Amount is set to Yes. If the format amount is Yes, Oracle Receivables will round the amount to the same degree of precision and the same number of decimal places as your functional currency format.




Lockbox Processing Steps The following Flowchart shows the Lockbox Processing Steps

Start

Copy Lockbox

Data file in required

folder

Run Submit Lockbox Process

Step 1: Import

Data is imported in AR_PAYMENTS_INTERFACE_ALL

table

Run Submit Lockbox Process Step 2: Validation

Any Errors?

Rectify errors using Maintain

Transmission Data window

QuickCash Batch CreatedAR_INTERIM_CASH_RECEIPTS_ALL

AR_INTERIM_CASH_RCPT_LINES_ALL

YES

NO

Run Submit Lockbox Process Step 3: PostQuick

Cash

Receipts applied and Customer Balances updated

AR_CASH_RECEIPTS_ALLAR_CASH_RECEIPT_HISTORY_ALL

AR_DISTRIBUTIONS_ALLAR_RECEIVABLE_APPLICATIONS_ALL

AR_PAYMENT_SCHEDULES_ALL

End

Lockbox Processing Steps




Submit Lockbox Process

Navigation: Interfaces => Lockbox

You submit the Lockbox Process to create receipts and apply them as per the Lockbox data file. The Lockbox is a three step process. Step 1 is importing the data file into Oracle Receivables. Step 2 is validation of the data and Step 3 is the PostQuick Cash process. You can run all these three steps individually or at the same time.

Step 1: Import Process

• New Transmission: If you are importing a new file, check the New Transmission check box. If you are re-submitting an existing transmission, leave this check box unchecked.

• Transmission Name: Provide a transmission name to your Lockbox Submission. If it is not a new transmission, select the Transmission Name from the List of values.

• Submit Import: Check the Submit Import check box to import the lockbox file.

• Data File: Provide the entire path of the location where the Lockbox file is placed.

• Control File: Name of the control file. Do not suffix the file name with .ctl. The control file should be present in the $AR_TOP/bin directory

• Transmission Format: Select the required Transmission Format from the List of values.

Step 2: Validation Process

• Submit Validation: Check this check box if you want to submit the Validation process.

• Lockbox: Specify the lockbox number if Submit Validation is Yes and the lockbox number is not specified in your lockbox file. If your transmission format includes the Lockbox Number, Oracle Receivables skips this field.




• GL Date: Enter the date to post the receipt and batch records in this lockbox transmission to your general ledger in the GL Date field. If you defined your GL Date as 'Constant Date' in the Lockboxes window, you must enter a GL Date; if you specified a GL Date of 'Deposit Date' or 'Import Date', Receivables uses this as the GL date.

• Report Format: Specify All if you want a detail validation report of all records. Specify Rejects Only if you only want details of the records that failed validation

• Complete Batches Only: Check this option if you want Receivables to create receipts only if all the receipt records of the batch are valid. If this option is unchecked, receivables will create receipts for the valid records and the non valid records will be rejected.

• Allow Payment of Unrelated Invoices: Check this option if you want Receivables to apply Payments to unrelated Invoices (Invoices belonging to unrelated Customers)

• Post Partial Amount as unapplied: If this option is enabled, Lockbox process applies the Receipt to valid transactions and the remaining receipt amount that could not be applied because of invalid transaction numbers is considered as unapplied amount. This option is generally set to Yes.

• Reject Entire Receipt: If there are any invalid transaction numbers in the Lockbox file, the entire receipt is rejected. The receipts data remains in the ar_payments_interface_all table. You can update the invalid record using the Maintain Lockbox Transmission Data window.

Step 3: PostQuick Cash Process

• Submit PostQuick Cash: Check the Submit PostQuick Cash check box, if you want the Lockbox process to run PostQuick Cash process. When Receipts are created using AutoLockbox, Receivables stores the receipt information in interim tables. Running PostQuick Cash applies the receipt and updates your customer’s receivable balance.




Maintain Transmission Data

Navigation: Receipts => Lockbox => Maintain Transmission Data

You use the Lockbox Transmission Data window to delete and edit transmission data imported into Receivables from your bank using Lockbox. You can correct your lockbox data in this window for receipts that fail validation, then resubmit the validation step to import these receipts. You can use the Lockbox Execution report to help you determine which transmission records you need to correct to ensure that your validation processes succeed. Within each transmission, Receivables displays the lockbox and batch records first, followed by the receipts and overflow records. The lockbox import program assigns a date to transmission records that you import into Receivables and displays transmissions by date when you query them in this window. Check the error messages in the Status field. If the error is contained in the control, receipt, or application information, you can make changes to the invalid records by selecting the record, then choosing one of the following:

• Receipt : Choose this button to review and edit specific receipt information. You can change the values of fields that are included in your transmission format

• Receipt Attributes: Choose this button to review and maintain receipt descriptive flexfield information imported with your lockbox transmission. You can change the values of fields that are included in your transmission format




• Applications: Choose this button to review and maintain application information for each receipt within this transmission.

• Control: Choose this button to review the lockbox transmission control information that corresponds to this transmission record. You can change the values for fields that are included in your transmission format




Identifying Customers for Receipts Now that you are able to do the required setups and successfully import a Lockbox file to create Receipts, let’s look in detail how Receivables identifies Customers for the Receipts. There are several ways by which the lockbox process identifies the Customer for receipts that are imported into Receivables using the Lockbox process. Depending on the Transmission Format and the input data, AutoLockbox can identify and validate the customer and if no customer is identified, it can still create the receipt and assign it the status of Unidentified.

Following are the different method

1) Customer Number

If a Customer Number is provided in the Lockbox File that you import through AutoLockbox, Receivables will try to apply the receipts using whatever application information is provided in your Transmission Format. E.g. If you have a customer number in the Overflow Payment record type (Record Identifier = 6 in the example shown above), Receivables will apply the receipt to the Customer Number mentioned in your Lockbox File.

2) MICR Number

MICR stands for Magnetic Ink Character Recognition). A MICR number consists of two segments. The first segment is the Transit Routing Number and the second segment is the Customer’s Account Number. The Transit Routing Number identifies the bank from which your Customer draws the Check. In Oracle Receivables, this number should be entered in the Bank Branch Number of the Banks window. The Customer Account Number should be entered in the Bank Account Number field of the Banks window. AutoLockbox uses the MICR number to identify and associate the Customer with a receipt only if both the following conditions are True

• The MICR number is included in the transmission.

• The Customer number is not included in the transmission.

In the Transmission Format example shown above, you will notice that you have the Transit Routing Number and Account Number transmission fields included in your Payment record type. You also have the Customer Number field in your Overflow Payment record type. However in the Lockbox data file, you only have values for Customer Number and therefore Receivables associates the Customer based on the Customer Number mentioned in the Overflow Payment records.

If you had values in the Lockbox data file for both i.e. MICR number of Payment record type (Transit Routing Number + Account Number) and Customer Number of Overflow Payment record type, Receivables will ignore the MICR number and associate the Customer based on the Customer Number of your Overflow Payment record.

3) AutoAssociate

If Receivables cannot determine the Customer based on the MICR number or the Customer number, you can use AutoAssociate to determine the Customer based on the debit item number (Invoice number) mentioned in the Lockbox file. If there is no MICR number or Customer number in the lockbox file and if Auto Associate is set to Yes, Lockbox process will identify the Customer based on the debit item number given in the Lockbox file. This option is also useful when you have scenarios wherein customer A makes payment for Customer B’s invoices. If you are using Auto Associate, when applying payment from Customer A to open invoices of Customer B, the receipt will be identified as paid by Customer B.




If the MICR number and Customer number is not included with the receipt record and if AutoAssociate is set to No, the Receipts are created by Lockbox with a status of Unidentified.

Conclusion This document gives you an overview of the Oracle Receivables Lockbox Process and also gives you step by step instructions on implementing Lockbox functionality from scratch. You should now be able to implement Lockbox either for a Lockbox service from Bank or for converting Receipts information from any other sources. Many companies do not utilize the Lockbox service from the bank but would still like to use the Lockbox functionality for the ease to use approach of the Lockbox design for converting Receipts. This document gives you all the required information for doing that.

References Oracle Receivables User Guide Release 12 (Part No: B31211-01) Oracle Receivables Implementation Guide Release 12 (Part No: B31212-01)


Implementing Lockbox Nov 2009 Author: Anil Patil Email: [email protected]

Appreciate your feedback. Please leave your comments on http://oracle.anilrpatil.com



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