Prepayment Receipt vs. Deposit in Oracle Receivables

Oracle receivables have a “deposit” transaction class and meantime have a “prepayment” receipt type. From business view, it looks the same, but why does Oracle designed “duplicated”? What’s the difference between them? I think it for a long time, and get some points to share with our friends here. Hopefully it is helpful for your implementation and support.

1. When deposit or prepayment created in AR, the actual AR invoice for goods or services have not been generated. This is normal business process for concept of deposit/prepayment. Deposit is created in Oracle Receivables independently for a customer. It is not able to be associated or called matched directly with any prior business documents before AR invoice, like sales order in OM. But Prepayment type receipt is generated from feeder module(like OM), it is associated with sales order in sales order additional information.

2. One AR invoice can apply with only one deposit, but one ar invoice can apply multiple prepayment type receipts. It is also means that one sales order can be prepaid for multiple times before ship confirm. This is very useful for multiple times prepayment/deposit.

3. Payment term flexibility: deposit can have its own payment term, while sales order/AR invoice can have different payment term. It is very flexible for customer balance control. As prepayment is a receipt type and it is auto generated from sales order,  it is must be immediate.  And sales order must have a payment term which is prepayment enable.

At last, I would like to say the offset account for both deposit and prepayment should be set up as an actual liability account.  Some customers use on-account receipt for prepayment business before. It is not recommended, as on-account account is always set up as an actual asset account.

 

One thought on “Prepayment Receipt vs. Deposit in Oracle Receivables

  1. Hi,
    My company takes deposit say 10000 usd as a prepay for 10000 units of one item.1$ for one one unit.If customer orders for 4000 units and sp is 3 usd ,then when invoicing,we should deduct 4000*1 = 4000 usd as prepaid and create an invoice for 8000.Now the deposit balance becomes 6000.
    Next time when customer ordered 2000,then we should take 2000*1 = 2000 from deposit and 4000 as invoice amount.How can we achieve this?
    Thank you,
    Kris

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