An R12 perspective - O2C Cycle - WordPress.com

O2C Cycle: An R12 perspective

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The attached document is a personal asset of the author and has nothing to do with any

author.

O2C Cycle : An R12 perspective

By Ritwik Kumar Mishra

Oracle Apps Finance Functional Consultant Table of Contents

1. INTRODUCTION ...................................................................................................... 2

2. Phases in O2C Cycle .............................................................................................. 2

3. Phase 1: Sales order entry and Booking .............................................................. 2

3.1 Sales Order Information ............................................................................................... 3

3.2 Line Items: ................................................................................................................... 4

4. Phase 2: Shipping of the Order ............................................................................. 6

4.1 Auto-Create Delivery: ................................................................................................... 8

4.2 Launch Pick Release: .................................................................................................. 9

4.3 Ship Confirm: ..............................................................................................................11

5. Phase 3: AR Invoicing Phase............................................................................... 16

5.1 Auto-Invoice Master Programme .................................................................................17

5.2 Viewing of the Invoice .................................................................................................21

5.3 Receipts ......................................................................................................................24

5.4 Remittances ................................................................................................................24

6. Phase 4: Cash Management Activities ............................................................... 27

6.1 Clearing of the Receipts ..............................................................................................28

6.2 Reconciling of the transactions: ..................................................................................29

7. Phase 5 : Transfer to GL: ..................................................................................... 35

8. CONCLUSION: ...................................................................................................... 36


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1. INTRODUCTION

O2C refers to Order to Cash Cycle. This refers to a process which starts with booking of order

to generating auto-invoice and then finally making up of the receipts to clearing and finally bank

reconciliation.

2. Phases in O2C Cycle

As mentioned above O2C cycle or order to cash cycle goes through various phases. These

phases are as given below

Phase 1 : Sales order entry and booking

Phase 2 : Shipping of the order

Phase 3 : AR invoicing phase

Phase 4 : Cash Management Activities

Phase 5 : Transfer to GL and close

3. Phase 1: Sales order entry and Booking

In this phase the sales order details are entered in the application. This task is done in the order

management module in oracle EBS in the form called Order organizers. Sales order details are

entered in two places i.e. Order information and Line Items.

Order Information:

In turn order information is entered in two windows i.e. Main and Other information

Main section has basically all the details pertaining to the order like name of the customer the

sales person and others details .

Other Information : this section has information like payment terms and warehouse related

information.

Line items:

After entering the main and other details we need to enter the Line Items which has information

about the order like the


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Ordered item

Ordered quantity

UOM

Unit selling price and other details

Responsibility : Order Management SuperUser

Navigation: Orders , Returns > Sales Orders

3.1 Sales Order Information

Enter all the details pertaining to the order like name of the customer the sales person and

others details . Also enter the Price list from where the system will capture the price for the item

to be ordred as shown below.

Since we did the set up with “Acomrede” as the customer so we will take “Acomrede” as the

customer to test the settings.

As we can see that we have selected the price list . This is required so that the moment we

enter the line items the system should automatically populate and pick the price of the item

provided the price for that item has been defined in the inventory module.

Enter other items


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3.2 Line Items:

After entering the main and other details we need to enter the Line Items

Click

Save it

So after saving you can see that the sales order number has been generated by the system.


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Booking of Order

After all the above mentioned details are entered the status of the order is “Entered” and once

the details are saved the order number is generated by the system.

Click

Now you can see the status of the order is turned to


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4. Phase 2: Shipping of the Order

After the SO is booked the next step in the process is to get it shipped. This activity is done in

the order organizer form in OM module.

Responsibility: Order Management

Navigation: Shipping > Transaction

In order to start the process we need to first query the SO booked by us in previous steps in the

order organizer form.

At the initial stage of shipping phase the status of the SO would be “Ready to release”. So at

this stage we need to generate the delivery number in order to start the process. This process is

achieved via process called auto-create delivery. Post that the release of the SO needs to be

done by process called Launch pick release.

Post pick release the delivery status of the SO would be open. In order to complete the process

we need to perform a task called Ship confirms which would change the status to Closed. At this

stage ideally if everything is fine the status of the SO would be “Interfaced”.

Responsibility: Order Management

Navigation: Shipping > Transaction

Enter the sales order number in the Query Manager as shown below


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Click


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4.1 Auto-Create Delivery:

Now the status of the shipping shows and so we will do the delivery , so

place the cursor near the detail bar and press right click of mouse as shown and the delivery

number is generated


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As can be observed from the above post auto-create delivery is done the delivery number for

the SO would be generated.

4.2 Launch Pick Release:

So now do Pick Release


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Click and run the concurrent request

So for that go to View > Requests

Click


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So here you can see that the process is complete as you saw above

Again get back to query manager and query with your sales order number and see the status

4.3 Ship Confirm:

Navigation:

Click


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So here you could see the status has been changed to

Click TAB

So you can see the status is

Click


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Click and review the delivery status of SO which would have truned to Closed.

Now the status shows


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So now in order to be sure about the process we will again go to Query manager and query with

your sales order number

Click

So now no shipping information is there so it’s shipped

Now we need to run a request called Workflow background Process

Go to View > Request and then enter the name of the report you want to run


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Click


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Click

So you can see the process is complete as shown below

5. Phase 3: AR Invoicing Phase

Now that the SO has been shipped, so the next step is to generate an invoice for the SO. This

activity is done in this phase and is achieved by running a concurrent programme from AR


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module called Auto-invoice Master programme. This would lead to creation of an AR invoice

automatically in the application based on the SO information.

So once the above step is done the regular AR module activities are done like

Completing of AR invoice and then

Performing create accounting and then

Creation of receipt and applying the AR invoice against the receipt

Remitting the receipt.

5.1 Auto-Invoice Master Programme

Switch responsibility to Receivables

Responsibility: Receivables

Navigation: Interfaces > Auto-invoice

Select : Autoinvoice Master Program


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Click

Click


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Refresh until the request completes


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In order to view the output click after taking the cursor

to the request name

5.2 Viewing of the Invoice


Navigation:

Click find


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Click

Click


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Click


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5.3 Receipts


Navigation :

Save it

5.4 Remittances


Navigation:


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Click


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Click

Click


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Click

6. Phase 4: Cash Management Activities

This is the final phase in the O2C cycle. In this phase the cash management related activities

are taken up. Post completion of AR activities other activities like clearing of the receipts and the

reconciliation of the transaction in CM is done which completes the process of the revenue or

O2C cycle.


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6.1 Clearing of the Receipts

Manual Clearing

Responsibility: Cash Management

Navigation:

Click

Click


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6.2 Reconciling of the transactions:

Navigation:

Click


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In order to check the avialability of any transactions for reconcliation.

Click

Click “Find”


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Select the required receipt

Click


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Click

In the above screenshot you can see that the selected receipt is not present in the list. This is

the evidence of the fact that the selected receipts has been succesfully reconciled.


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Here we can see that the “Receipt Control Totals” and “Receipt Line Totals” don’t match

So let’s match both the sides


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So now you can see that both the line Total and the Control Totals are matching as shown in

the above screenshot.

Click


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So here you can see that the previously selected receipt transaction is not in the list. This is the

evfidence of the fact that the selected receipt transaction is reconciled.

Save it

7. Phase 5 : Transfer to GL:

Now that all activities pertaining to order to cash cycle have been done and also

reconciliation in cash management is done so the entries passed so far need to be

transferred to GL where the final reconciliation of all modules happens.


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Switch Responsibility to Receivables Manager

Submit a request for transfering the transactions performed as part of O2C cycle to the General

Ledger (GL)

8. CONCLUSION:

Thus I feel that the document gives a step by step description of the Order to Cash Cycle. This

document can be taken as a manual for underatnding of the O2C process. I hope that the

document comes handy to all the users.

Any feedbacks and comments are welcomed heartily . Please mail to [email protected]

mailto:[email protected]

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