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ORACLE CORPORATION 

Oracle Receivables

Chargeback White Paper

Author: Leslie Phillips

Creation Date: April 2002

Last Updated: April 2002

Version: 1.0

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Contents

Overview..................................................................................................................................1 

Chargeback Setup ...................................................................................................................2 

How to Manually Generate a Chargeback ..........................................................................4 

Reversing a Chargeback.........................................................................................................6 

Viewing Chargeback and Chargeback Reversal.................................................................7 

Accounting for Chargebacks.................................................................................................8 

Chargeback Table Information ...........................................................................................10 

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Overview

In Oracle Receivables version 11i, you can create a chargeback against transactions to which you are applying areceipt. You can create multiple chargebacks against each transaction, for positive or negative amounts. Receivable’slets you enter a chargeback against a credit memo or an on-account credit memo only if they have a positive balance.

When performing the chargeback function, Receivable’s uses the transaction type of the transaction you are adjustingto validate the chargeback amount. If the Transaction Type does not allow overapplication then you will not be able

to enter an amount that will reverse the sign of the transaction. Chargebacks do not follow the natural applicationrules and will allow the adjustment of a transaction in either a positive or negative direction regardless of the naturalapplication flag.

You can use the chargeback functionality to create a new debit item when closing an existing debit item. Receivablerequires that you automatically number your chargeback sequences by updating the Last Invoice Number field forthe chargeback Transaction Batch Source in the Transaction Source Window. This will be covered within the settingup of the chargeback functionality later within this document.

This White Paper will cover the following chargeback information:

Chargeback Functionality Setup

How to Manually Generate a ChargebackReversing a ChargebackViewing ChargebackAccounting for ChargebackChargeback Table InformationChargeback Troubleshooting 

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Chargeback Setup

The following information must be setup prior to processing any chargeback functionality. Oracle provides seededvalues to allow you to perform your initial testing of the application. Listed below are Profile and Seeded OracleSetup Sources and Transaction Types that can be used to perform this functionality. If is recommended to use theseeded setup’s that are provided for your initial testing before generating you own Batch Source, Transaction Type.

1. Profile: Chargeback Due Date

Enter the Chargeback Due Date profile that will be defaulted when running the Chargeback Functionality.Select from the following Options:

a. Open Invoice Due Date – Use the due date of the invoice or debit memo as the default.b. Receipt Date – Use the receipt date as the default. This will be the date receipt was entered.c. Current Date – Today’s date.d. Deposit Date – Use the receipt deposit date as the default.

Navigation: Setup>System>System OptionsTab: Miscellaneous

2. Transaction Batch Source

Transaction Batch Sources controls the transaction type they are assigned in determining whether Receivablesautomatically numbers your transactions and transaction batches. As indicated earlier within this document,Receivables requires that you check the Automatic Transaction Numbering for the batch source that you are settingup. This will allow the instance to automatically number the Chargebacks that are performed using a sequence that iscreated during the initial creation of the batch source.

Receivables has provided a seeded transaction batch source that is used with the Chargeback Transaction Type thatalso seeded for your use or testing purposes.

Navigation: Setup>Transactions>Sources

3. Transaction Type: Chargeback

Transaction types are used to define the accounting for debit memos, credit memos, on-account credits, chargebacks,commitments, invoices, and bills receivable you create. They are also used to determine if balances are posted to theGeneral Ledger or whether the balances of the customers’ accounts are updated. Autoaccounting uses that glaccounts that are setup here based on the AutoAccounting setup that is performed. Oracle has provided a seededTransaction Type: Chargeback to be used in the initial testing phase that you are performing. Note that the creationsign for the seeded value has positive sign and over application checked. If you want to have the transaction that isgenerated be posted to general ledger, you will need to have the post to GL flag checked. If you want to have thetransaction that is generated update with the customer balances for a chargeback transaction that has been generated

when you will need to have Open Receivables checked.

Navigation: Setup>Transactions>Transaction Types

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4. Receivables Activities Setup:

Define receivables activities to default accounting information for this Chargeback Adjustment and ChargebackReversal functionalities that will be talked about later within this document. Activities that you define here appear asa List of Values (LOV) when performing the various functionalities of the Chargeback Transaction generation.

Query the Chargeback Adjustment that is a seeded value and assign a General Ledger Code Combination that youwant to use for this functionality. Save the Receivables Activity after entering the CCID for this activity. This activityis reserved for internal use only.

Query the Chargeback Reversal Activity that is a seeded value and assign a General Ledger Code Combination thatyou want to use for this functionality. Save the Receivables Activity after entering the CCID for this activity. Thisactivity is reserved for internal use only.

Note: Once a Receivable Activity is generated you can not change its type. However, you can update an existingactivity’s GL account, even if you have already assigned this activity to a transaction.

Navigation: Setup>Receipts>Receivables Activities

View>Find

Select from LOV Chargeback Adjustment: Enter the GL account that you setup within General LedgerView>FindSelect from LOV Chargeback Reversal: Enter the GL account that you setup within General Ledger

5. Receivable Lookups

Oracle provides seeded Adjustment Reasons that can be used when generating Chargeback Adjustments.Should you want to add additional Adjustment Reasons, perform the following.

Navigation: Setup>System>Quickcodes>Receivables

a. Query the Lookup type ADJUST_REASON. This will indicate the seeded values that come with the

Oracle Application. You can add additional adjustment reasons here if needed.

6. The Chargeback and Adjustment Button within the Receipts Workbench under Applications From.

If these buttons are not available you will need to ensure that the following profile is setup to allow the use of thesebuttons.

Responsibility: System AdministratorNavigation: Profile>System

a. Enter the following to allow the access of these buttons.b. Query the following profile. AR: Cash – Allow Actionsc. Set this Profile to YES and Save.

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How to Manually Generate a Chargeback

Use chargebacks to create a new debit item for your customer when closing an existing debit item. This allows anaged debit item to be re-invoiced to a new debit item using the chargeback adjustment receivables activity setup inprior setup steps above.

To manually generate a chargeback:

1. Navigate to the Receipts Workbench from the Receivable ResponsibilityNavigate: Receipts>Receipts

2. Enter the following information into the Receipts>Receipts form.a. Enter in a Receipt Number if you are using a Manually Receipt Numbering Batch Source.b. Receipt Type should be CASH by default.c. Enter in the receipt amount. Example 100.00 USDd. Receipt Date and GL Date will default based on the system date of entering in this receipt. These can be

changed based on your needs.e. Select a Payment Method. Example using the Manual with Clearance which is a Seeded Payment Method

type. This should give you a Confirm Status for this receipt.f. Click on Customer Name and select Customer that you would like to apply this receipt too. If you know

the Debit Item number (Transaction Number) you can also enter this instead of the Customer Name. Hitthe TAB key. This will fill in the Customer Number and Location for this customer.

g. Click on the Application Button that now should be illuminated.

3. This will now open the Application Form within the Receipts Workbench.a. Using the LOV that is found for the column Apply To select an invoice that is greater than the amount that

you are going to apply. This will leave a Balance Due if you scroll across using the slide bar.b. Save this transaction. This will now have the save and apply check boxes both checked indicating that this

has been applied to this invoice.

4. In generating the Chargeback now on this invoice you will note that both the Chargeback and Adjust button at

the bottom of the Applications Form are now illuminated. Perform the following steps in order to generate thechargeback to this invoice.a. Click on the Chargeback Button at the bottom of the Application Form for the invoice that you want to

generated the new Chargeback invoice for. This will put you into the Chargebacks form.b. Select under Type the transaction type for this Chargeback. This transaction type should be of a Class of

Chargeback. Oracle provides a seeded value for the function so we will select, Chargeback TransactionType.

c. The amount on the chargeback form should match the amount of the invoice balance that you aregenerating this chargeback for. Should you only want to generate for a partial amount of the transactionyou will be able to enter in a value here based on the Balance indicated in the Zone above within this form.

d. Note that the GL account is now shown for the Chargeback function. This is the GL account for theChargeback Adjustment Receivables Activity that was performed in the setup steps above.

e. Click on the Due Date. Note that this is populated based on the setup that was performed within theSetup>System>System Options setup that was performed in the setup steps above.

f. Click on the MORE tab that is available for additional entry. This is not required but does provide a placeto enter the reason that you are generating the Chargeback for the debit item.

g. Select a reason from the LOV for this Chargeback action.h. Enter any additional information within the Comments section of the form.i. Click on the save icon above within the Tool Bar.

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5. This will have generated a Chargeback Number that is now the new debit item for the remaining balance thatwas entered for this transaction. You will now be able to exit this form and the debit item that was used togenerate this Chargeback will now be closed and the new debit Chargeback will be generated for the remainingbalance of the invoice.

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Reversing a Chargeback

Like other conditions, you may have generated a Chargeback and want to reverse the Chargeback that was generatedagainst an Invoice. Listed below are the steps to reverse the Chargeback that was generated using the receiptsworkbench.

To reverse a chargeback generated via the Receipts Workbench:

1. Navigate to the Receipts window (Receipts>Receipts or Receipts>Batches).

2. Query the existing cash receipt.3. Choose the Applications button.4. Select the Transaction that the Chargeback was generate against by clicking on the transaction.5. Click on the Chargeback Button.6. This should bring up the Chargeback form within the Receipt Workbench and indicate the Chargeback that you

want to reverse. Perform the following steps.a. Click on the Chargeback that you want to reverse. Remember that you can have multiple

chargebacks for the same Debit Itemb. Click on the red ‘X’ within the Tool Bar that indicates Delete. This should remove the Chargeback

information that was generated for this debit item.c. When exiting from the form you will be asked to save your changes. Click Yes.d. This will bring you back to the Applications form within the Receipts Workbench.

e. If you click on the adjustments button for this debit item (Invoice) you will notice 2 adjustment rowswere generated for this debit item. One is the Chargeback Adjustment that would have closed thisdebit item and generated the original Chargeback and the other is a Chargeback Reversal Adjustmentthat reverses the original and puts the Debit Item (Invoice) back to its original condition prior toperforming the Chargeback.

f. You can verify the effects of the Chargeback Reversal by Querying up the Chargeback that wasoriginally generated and see that it is now closed as well via the following navigational steps.Collections>Account DetailsQuery on Class Chargeback and Status closed. You will find the Chargeback that was generated isnow closed.

7. Save your work.8. See the Section on Viewing a Chargeback to see how this was performed.

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Viewing Chargeback and Chargeback Reversal

Listed below are the steps involved to view the original invoice and the chargeback that was generated. We will alsodrill down and indicate the adjustments below that were generated when the Chargeback was generated and whenthe Chargeback was reversed.

To review the Original Debit Item where the Chargeback Adjustment was Performed:

1. Navigate to the Collections Workbench and perform the follow to query the Original Invoice.a. Navigation Steps: Collections>Account Detailsb. Query the Debit Item (Invoice) that Chargeback was generated against by entering in the invoice number

under the Trans Num Column. NOTE: If this debit item was closed by the Chargeback you will need toensure that you select Status Closed prior to Clicking on the Find button

c. This will bring up the original Debit Item. Click on the Activities Button to show all activities that weregenerated against this Debit Item.

d. Notice that prior to the Reversal there is one adjustment generated against this debit item. This is theChargeback Adjustment that was setup in prior steps within the Setup Section of this paper.

e. If reversal was performed you will see two adjustments have been performed. One will be the ChargebackAdjustment to close out the original invoice and the other is the Chargeback Reversal to put the original DebitItem back to its original state prior to performing the Chargeback.

To review Chargeback that was generated:

2. Navigate to the Collections Workbench and perform the follow to query the Chargeback that was generated.

a. Navigation Steps: Collections>Account Detailsb. Query the Chargeback that was generated against by entering the Chargeback Number under the Trans Num

Column. NOTE: If this Chargeback was reversed by a Chargeback Reversal you will need to ensure that youselect Status Closed prior to Clicking on the Find button

c. This will bring up the original Chargeback. Click on the Activities Button to show all activities that weregenerated against this Debit Item.

d. Notice that prior to the Reversal there is no activities. This is because the Chargeback is considered a new debititem and no adjustment rows where generated. It is like a new invoices was generated but is linked to theoriginal invoice. If you click on Details Button for this Chargeback you will get the Header Record of theChargeback via the Transaction Workbench. By clicking on the MORE tab you will see the OriginalTransaction Column that indicates where this Chargeback was generated from.

e. If Chargeback reversal was performed you will see one adjustment. The Chargeback Reversal Adjustment willclose out this Chargeback and reopen the Original Debit Item that the Chargeback was generated against.

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Accounting for Chargebacks

Utilizing the release 11i application functionalities you can view the accounting that was performed on the abovetransactions with the following navigational steps. This will give you a detail look at the Accounting that wasperformed for both the Original Debit Item and the Chargeback that was generated including the drilling down to thechargeback adjustment and chargeback adjustment reversal levels. Please follow the following navigational steps tosee both the Accounting and T-Accounts.

Original Invoice Accounting: 

1. Original Invoice Accounting:

a. Navigation Steps: Collections>Account Detailsb. Enter the Original Invoice number in the Trans Num column and click Find.c. Click on Details for this Original Invoice.d. Click within the Tool Bar Tools>View Accountinge. If you wish to see the T-Accounts for this Transaction click on T-Accounts Button.

2. Original Invoice Receipt Application Accounting

a. Navigation Steps: Collections>Account Details

b. Enter the Original Invoice number in the Trans Num column and click Find.c. Click on Activities for this Original Invoice.d. Select the Receipt that was applied to the invoice.e. Click on Detailsf. Click within the Tool Bar Tools>View Accountingg. If you wish to see the T-Accounts for this Transaction click on T-Accounts Button.

3. Original Invoice Chargeback Adjustment Accounting

a. Navigation Steps: Collections>Account Details b. Enter the Original Invoice number in the Trans Num column and click Find.c. Click on Activities for this Original Invoice.d. Select the Chargeback Adjustment that was applied to the invoice.e. Click on Detailsf. Click within the Tool Bar Tools>View Accountingg. If you wish to see the T-Accounts for this Transaction click on T-Accounts Button.

4. Original Invoice Chargeback Reversal Accounting

a. Navigation Steps: Collections>Account Detailsb. Enter the Original Invoice number in the Trans Num column and click Find.c. Click on Activities for this Original Invoice.d. Select the Chargeback Adjustment Reversal if this original invoice had a Chargeback reversal performede. Click on Detailsf. Click within the Tool Bar Tools>View Accountingg. If you wish to see the T-Accounts for this Transaction click on T-Accounts Button.

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Chargeback (Invoice) Accounting: 

1. Chargeback Accounting:

a. Navigation Steps: Collections>Account Detailsb. Enter the Chargeback number in the Trans Num column and click Find.c. Click on Details for this Chargeback.d. Click within the Tool Bar Tools>View Accountinge. If you wish to see the T-Accounts for this Transaction click on T-Accounts Button

2. Chargeback Adjustment Reversal against the Chargeback:

a. Navigation Steps: Collections>Account Detailsb. Enter the Chargeback number in the Trans Num column and click Find.c. Click on Activities for this Chargeback.d. Select the Chargeback Adjustment Reversal for this Chargeback.e. Click within the Tool Bar Tools>View Accountingf. If you wish to see the T-Accounts for this Transaction click on T-Accounts Button.

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Chargeback: Table Information

Chargebacks when generated are stored like a regular invoice within the Oracle Receivable’s Tables. What isimportant is the linking of the Chargebacks that are generated to the Original invoice via the Chargeback Adjustmentand the Chargeback Reversal. Listed below are the tables and columns that are effected and the columns that areimportant when a Chargeback is Generated and when a Chargeback is Reversed.

- AR_ADJUSTMENTS_ALL: One adjustment record is created against the Original Invoice when the

Chargeback is created. Listed below are the relevant columns of the adjustment that indicates it is anadjustment against the original invoice but is tied to a Chargeback Transaction as well. One adjustment rowis generated against the original invoice and the Chargeback that was generated when a Chargeback Reversalis generated.

Adjustment_Number Adjustment Number generated from sequenceAR_ADJUSTMENT_NUMBER_S

Adjustment_Id Adjustment Identifier generated from sequenceAR_ADJUSTMENTS_S

Customer_Trx_Id Identifier of customer transaction associated with this adjustment

Postable Indicates whether this adjustment is postable – it should be nullvalued to ‘Y’

Status Approval_Type indicated from AR_LOOKUPS with thefollowing values :A ApprovedM More ResearchR RejectedU Unaccrued ChargesW Waiting Approval

Adjustment_Type Invoice – Manual for generated transactions for Chargebacks

Chargeback_Customer_Trx_Id Identifier of Chargeback Transaction associated by thisadjustment

Org_id Operating Unit Identifier

REFERENCES:

Oracle Receivables User’s Guide for Release 11ITable of Contents: Technical Perspective: Transactions> Chargebacks

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