Application Rule Sets

AR, Version R12

Navigation : Receivables SuperUser > AR_NAVIGATE_GUI : Setup : Receipts > Application Rule Sets

Receipts are applied to transactions. The transactions usually consist of  line items, tax, freight and finance charges or a combination of these. So here application rule sets determine how to apply these receipts ( how to distribute the receipt amount among the different lines).

Hence Application Rule sets let you specify how receivables reduces the balance of your open debit items when you:

1. Apply a receipt to an invoice or debit memo.
2. Run post quick cash.

The application rule can be assigned to the transactions through the Transaction type window or through the system options window.AR decides which rule to be used in the following order :

1. Transaction Type
2. System Option

Predefined rule sets :

1. Line First Tax after : It will first apply the payment to open line amount and then to the associated tax.The remaining (if any) is then applied in following order : Freight, Finance Charges.
2. Line and Tax Prorate : It will first apply to line and associated tax proportionately. The remaining (if any) is then applied in following order : Freight, Finance Charges.
3. Prorate all : It will apply the receipt amount proportionately to all the lines irrespective of line type

Setting Up new Rule :

1. Enter unique name and description
2. Enter the Sequence number of the rule, AR will apply the rules as per the sequence numbers.  Note : Overapplication rule is by default the last and cannot be modified.
3. Enter the application rule . Each rule will be based on one line type (for example, lines, freight, or charges). Note : Overapplication rule gets automatically assigned and it cannot be deleted.
4. The rule details region indicates the type of charge and tax handling of this rule.

Tax Treatments :

Prorate: The receipt amount will be applied proportionately to the line as well as tax.

Before : The amount will be applied to TAX before applying it to the line.

After : The amount will be applied after it is applied to the line.

5. Check rounding Correction box if you want to automatically adjust this line type to account for any rounding corrections

6. Finally click the Freeze box. Once the rule is frozen, it cannot be deleted or modified.