Whitepaper:

Customer Acceptance feature with Pre-billing

Explicit Acceptance in Release 12

Oracle EBS R12 Order Management

Version: 1.0

06-Jun-2011

Author: Amol Pachpande

Oracle EBS Division, Pune (India)

Arihant Adroit InfoSystems Pvt. Ltd.

Email: info@arihantinfosystems.com

Page 1 of 8
 Whitepaper on R12 Customer Acceptance
Functionality

Customer Acceptance feature with Pre-billing Explicit Acceptance

in Release 12

Functional Overview: Why it is required?

In the common Sales Order, the invoice is raised as soon as the goods are shipped to
the customer and in case if the goods are damaged or is unacceptable to the customer,
customer sends the goods back and an RMA is created to reverse the original sales
order. The drawback in the above process is that there is an administrative work and
cost involved. To counter the drawback, the first thing that comes into one's mind is
what if the invoice is generated once the goods are accepted by the customer. The
same is implemented in the form of a new functionality in the Release 12 of Oracle
Applications and the functionality is called "Customer Acceptance"
Acceptance is not applicable for service lines that are not a part of an ATO/PTO Model
or Kit.

Types of Customer acceptance

These are the two broad flows that OM supports – the Pre-billing and Post-billing
acceptances

Pre-Billing Acceptance:
In case of the pre-billing acceptance, the acceptance comes into picture before the
Invoicing activity.
The list of activities in pre-billing acceptance is as follows.
-> Record Acceptance – explicit or implicit
-> Line status moves to closed and line gets interfaced to AR
-> Invoice generation and Revenue Recognition happen subsequently.
Another feature that can be observed in this flow is that the Sales Order Line will be in
a new status called "Pending Pre-billing Acceptance"

Post-Billing Acceptance:
In case of the post-billing acceptance, the acceptance comes into picture after the
Invoicing activity.
The list of activities in post billing acceptance is as follows.
-> Invoice generation –> Revenue recognition
-> Record Acceptance  – explicit or implicit
Line status moves to closed
Revenue Recognition happens once acceptance is completed
Another feature that can be observed in this flow is that the Sales Order Line will be in

Email: info@arihantinfosystems.com; Phone: +91 20 32402026 Page 2 of 8

 Whitepaper on R12 Customer Acceptance
Functionality
a new status called “Pending Post-billing Acceptance”.

Apart from the above, there are two more kinds of Acceptance viz.

Explicit acceptance
Implicit acceptance

In Explicit Acceptance Customer or Customer Sales Representative (CSR) logs into the
Order Information Portal or uses order import to record acceptance explicitly.

In Implicit acceptance after a specific expiration period a request set is submitted to

record the acceptance. Deferral reason has to be defined in AR with event attribute as
Ship Confirm date and expiration days. There is Implicit Acceptance Request Set, which
is part of OM’s standard concurrent programs for recording implicit acceptance.

–Request Set has two concurrent requests

I.  Generate Pre-billing Acceptance Program for Pre-billing, Implicit Acceptance
II. Revenue Contingency Analyzer for Post-billing, Implicit Acceptance

Once the expiration date has got elapsed, the above set of concurrent programs are
submitted and the Acceptance is recorded

Setup and Process flow

The following diagram Diag1 will give you a clear picture of the Set up and the detailed
flow of Customer Acceptance.

Email: info@arihantinfosystems.com; Phone: +91 20 32402026 Page 3 of 8

 Whitepaper on R12 Customer Acceptance
Functionality

Set up
======
There are two important setups that are required for the Customer Acceptance.
1. Enabling of the fulfillment Acceptance at the Order
   Management System parameters form.
   Navigation: Order Management Super User-> Setup->Parameters->Values.  

Look for the Enable Fulfillment Acceptance parameter and set

the value to 'Yes' from the List of values.

2. Setting up of the Deferral reason in the Receivables Revenue Management setup.

Navigation:
Revenue Management Super User- Contingency Definition. This launches this HTML
page.
In the deferral reason setup, by setting the value for the 'Removal event', you can

Email: info@arihantinfosystems.com; Phone: +91 20 32402026 Page 4 of 8

 Whitepaper on R12 Customer Acceptance
Functionality
specify the kind of Acceptance (pre-billing or post-billing) you would like to use.
OM supports pre-billing and post-billing acceptance.

For a pre-billing deferral reason, choose the Removal Event as "Invoicing".

For a post-billing deferral reason, choose the Removal Event as "Customer Acceptance".

To specify a deferral reason to be implicit, we need to specify the optional "Time

attribute" fields. OM supports only Ship Confirm date as the Event attribute.
The setup of the deferral reason can be seen as mentioned in the Diag3.

Process flow:
To explain the functionality in detail for Custom acceptance we will take up three
different flows.

A. Pre-billing Explicit Acceptance

B. Post-billing Explicit Acceptance
C. Pre-billing Implicit Acceptance

Email: info@arihantinfosystems.com; Phone: +91 20 32402026 Page 5 of 8

 Whitepaper on R12 Customer Acceptance
Functionality
A.Pre-billing Explicit Acceptance:
In this scenario the Invoice is generated after the Acceptance of the goods has been
completed explicitly. Customer or CSR logs into the Order Information Portal or uses
order import to record acceptance explicitly.

The detailed flow of Pre-billing Explicit Acceptance is as follows.

Step 1.
Deferral reason in Receivables Revenue Management should be setup.
Revenue Management Super User -> Contingency Definition

Makes sure that the Removal event is set to "Invoicing".

Step 2.
Enter the sales order from the Order Management Super User responsibility and select
the Acceptance name from the 'Others' tab of the sales order line.
Book the order, Pick-release the order and Ship-confirm the same.

Step 3.
After the line has been shipped run the Workflow Background Process for the OM order
Email: info@arihantinfosystems.com; Phone: +91 20 32402026 Page 6 of 8
 Whitepaper on R12 Customer Acceptance
Functionality
Line. A new status of the sales order line "Pending pre-billing acceptance" can be seen.

Step 4.
Explicit Acceptance can be done from Actions-> Fulfillment Acceptance. The same is
shown in Diag7.

The Fulfillment Acceptance action attribute has to be clicked to launch the OIP to record
explicit acceptance of goods and services.

Step 5.
Fulfillment Acceptance action attribute launches the OIP page.
In this page Acceptance Date is not populated and the Acceptance Status is 'Pending'.
To initiate Acceptance click on 'Go' button.

Step 6.
On the click of 'Go'
The user can enter information related to acceptance like Acceptance comments and
signature. The details given here will be available in Sales Order on re-querying.

Step 7.
On click of the Submit button, a confirmation message comes up indicating that
Acceptance/ rejection have been completed successfully.

After the confirmation the change in Acceptance date and Acceptance status is reflected
on the OIP, the Acceptance status is changed to 'Accepted' and the 'Acceptance Date' is
Email: info@arihantinfosystems.com; Phone: +91 20 32402026 Page 7 of 8
 Whitepaper on R12 Customer Acceptance
Functionality
populated with date value on which the Acceptance was done.

Step 8.
Customer Acceptance information recorded in the OIP page can be found on the others
tab of the sales order line. The same is shown in Diag12

Step 9.
After the Auto invoice concurrent program is run in Receivables responsibility, the
Invoice can be generated and the revenue recognition would follow.

Summary
With the Introduction of Customer Acceptance feature in Release 12, the order
fulfillment flow now has an additional step called "customer acceptance", where
customer accepts the goods either before or after billing happens.

This feature enables customer to defer invoicing and/or revenue recognition for the
shipped goods till the customer receives the shipment and accepts the material.

This paper deals with the setups for various Customer Acceptance set ups in AR's
Revenue Management module and Order Management where OM defaults the customer
acceptance deferral reason and its attributes from Receivables onto the sales order line

Email: info@arihantinfosystems.com; Phone: +91 20 32402026 Page 8 of 8