AR FAQS - Accounts Receivable Interview Interview Questions and Answers

 Basic Concepts and Definitions

Q1: What is Accounts Receivable (AR)?

A: Accounts Receivable refers to the amount of money owed to a company by its customers for goods or services provided on credit. It is recorded as an asset on the balance sheet.

 

Q2: How do you record AR in financial statements?

A: AR is recorded as a current asset on the balance sheet. When the payment is received, it reduces the AR balance and increases the cash balance.

 

Q3: What is the difference between AR and AP?

A: Accounts Receivable (AR) is the money owed to a company by its customers, while Accounts Payable (AP) is the money a company owes to its suppliers or vendors.

 

Q4: What is the aging schedule in AR?

A: An aging schedule categorizes AR based on the length of time an invoice has been outstanding. Common categories are 0-30 days, 31-60 days, 61-90 days, and over 90 days.

 

Q5: What is the difference between billing and invoicing?

A: Billing is the process of requesting payment, often on a recurring basis, while invoicing is the act of creating and sending an itemized bill for goods or services rendered.

 

Process and Workflow

Q6: Describe the Accounts Receivable process.

A: The AR process involves invoicing customers, recording payments, reconciling accounts, managing customer disputes, and following up on overdue payments.

 

Q7: How do you handle late payments or overdue invoices?

A: I follow up with the customer via email or phone, send reminders, and escalate the issue if necessary. I also evaluate the need for adjusting payment terms or offering discounts to encourage prompt payment.

 

Q8: What are the steps involved in reconciling AR?

A: The steps include matching payments received to outstanding invoices, identifying discrepancies, investigating variances, and adjusting records as necessary.

 

Q9: How do you manage cash application in AR?

A: Cash application involves matching payments received with the correct customer accounts and invoices. I ensure that payments are applied accurately and promptly, and any discrepancies are resolved.

 

Q10: What is the role of credit management in AR?

A: Credit management involves assessing a customer's creditworthiness, setting credit limits, and monitoring credit terms to minimize the risk of non-payment.

 

Tools and Software

Q11: What AR software or tools have you used?

A: I have experience with ERP systems like SAP, Oracle, and QuickBooks. I am also familiar with AR automation tools and reporting software such as Microsoft Excel and Tableau.

 

Q12: How do you use Excel in AR management?

A: I use Excel for data analysis, creating aging reports, tracking payments, and performing reconciliations. Functions like VLOOKUP, pivot tables, and conditional formatting are particularly useful.

 

Q13: Have you worked with any automated AR systems?

A: Yes, I have experience with automated AR systems that streamline invoicing, collections, and reporting. Automation helps reduce errors and improves efficiency in managing receivables.

 

Q14: How do you ensure data accuracy in AR software?

A: Regular reconciliations, data validation checks, and proper documentation of transactions help ensure data accuracy. I also use automated alerts for any inconsistencies.

 

Q15: How do you handle system errors or discrepancies in AR?

A: I investigate the source of the error, consult with the IT department if necessary, and correct the discrepancy. If it’s a recurring issue, I work on improving the process or system configuration.

 

Reporting and Analysis

Q16: What reports are crucial for AR management?

A: Aging reports, cash flow forecasts, collection reports, and customer account statements are essential for monitoring and managing AR.

 

Q17: How do you analyze AR aging reports?

A: I review the aging report to identify overdue accounts, assess the risk of non-payment, and prioritize collection efforts. I also look for trends or patterns that may indicate underlying issues.

 

Q18: What KPIs do you track in AR?

A: Key performance indicators (KPIs) include Days Sales Outstanding (DSO), aging percentage, collection effectiveness index, and bad debt ratio.

 

Q19: How do you improve DSO (Days Sales Outstanding)?

A: Improving DSO involves faster invoicing, proactive collection efforts, offering early payment discounts, and regularly reviewing credit terms and customer payment behavior.

 

Q20: Can you explain how to calculate bad debt expense?

A: Bad debt expense is calculated based on historical data, either by using the percentage of sales method or the accounts receivable aging method, where a percentage of outstanding receivables is estimated to be uncollectible.

 

Problem-Solving and Scenarios

Q21: How do you handle a situation where a customer disputes an invoice?

A: I first verify the details of the invoice and gather supporting documentation. Then, I contact the customer to understand their concerns and work towards resolving the issue, either by adjusting the invoice or providing clarification.

 

Q22: Can you describe a time when you had to deal with a difficult customer regarding payment?

A: I had a customer who consistently delayed payments. I worked closely with them to understand their financial situation and negotiated a payment plan that worked for both parties, which eventually resolved the issue.

 

Q23: How do you handle a large volume of AR transactions?

A: I prioritize tasks based on due dates and amounts, use automation tools to streamline processes, and regularly review reports to ensure that everything is on track.

 

Q24: What steps do you take to reduce bad debts?

A: I conduct thorough credit checks before extending credit, monitor aging reports, follow up on overdue accounts promptly, and work with customers to set up payment plans if necessary.

 

Q25: How do you handle discrepancies between the AR ledger and the bank statement?

A: I perform a bank reconciliation by comparing the AR ledger to the bank statement, identifying discrepancies, and investigating any unmatched transactions. Corrections are made accordingly.

 

Compliance and Regulations

Q26: How do you ensure compliance with accounting standards in AR?

A: I stay updated on relevant accounting standards (e.g., IFRS, GAAP) and ensure that AR processes, including revenue recognition and bad debt provisioning, comply with these standards.

 

Q27: What is the role of internal controls in AR?

A: Internal controls in AR help prevent errors and fraud. These controls include segregation of duties, approval processes for credit terms, and regular audits of AR transactions.

 

Q28: How do you handle AR in a multi-currency environment?

A: I use the company’s ERP system to manage multi-currency transactions, ensuring that foreign exchange rates are accurately applied and that currency gains or losses are recorded appropriately.

 

Q29: What are the tax implications of AR?

A: Depending on the jurisdiction, AR can have tax implications such as sales tax or VAT. It’s important to ensure that the correct tax is applied to invoices and that tax returns reflect AR balances accurately.

 

Q30: How do you manage AR during an audit?

A: I ensure that all documentation, such as invoices, payment records, and reconciliations, is organized and readily available. I also prepare detailed reports and explain any discrepancies or adjustments during the audit process.

 

Teamwork and Collaboration

Q31: How do you collaborate with other departments to manage AR?

A: I work closely with the sales, credit, and finance teams to ensure that credit terms are appropriate, invoicing is accurate, and any disputes or payment issues are resolved efficiently.

 

Q32: How do you handle conflicts between the sales and AR teams?

A: I mediate discussions to ensure both sides understand each other’s priorities. For example, I work with sales to balance the need for customer satisfaction with the importance of timely payments.

 

Q33: Can you describe a time when you improved communication within the AR team?

A: In a previous role, I introduced regular team meetings and status reports to improve transparency and coordination. This helped reduce errors and ensured that everyone was on the same page.

 

Q34: How do you train new team members on AR processes?

A: I provide comprehensive training that covers the AR workflow, software, and reporting tools. I also pair new hires with experienced team members for hands-on learning.

 

Q35: How do you handle a high workload within the AR team?

A: I prioritize tasks, delegate responsibilities, and, if necessary, suggest hiring temporary help. I also look for ways to streamline processes to reduce manual work.

 

Strategic and Advanced Questions

Q36: How do you assess the creditworthiness of a customer?

A: I review the customer’s financial statements, credit scores, payment history, and industry reputation. I also assess their ability to meet payment terms based on their current financial situation.

 

Q37: What strategies do you use to optimize AR collections?

A: I implement proactive collection efforts, offer payment plans, negotiate early payment discounts, and maintain strong relationships with customers to encourage timely payments.

 

Q38: How do you handle AR during periods of economic downturn?

A: During economic downturns, I closely monitor AR aging, adjust credit terms, and work with customers to set up flexible payment plans. I also increase communication with customers to manage expectations.

 

Q39: How do you handle high-risk customers in AR?

A: I monitor high-risk customers more closely, set stricter credit limits, and require more frequent payment schedules or advance payments. I also review their accounts regularly for any signs of financial distress.

 

Q40: What is your approach to continuous improvement in AR?

A: I regularly review AR processes for inefficiencies, seek feedback from team members, and implement automation where possible. I also stay informed about industry best practices and emerging technologies.

 

9. Advanced Process and Technical Questions

Q41: How do you calculate Days Sales Outstanding (DSO), and what does it indicate?

A: DSO is calculated by dividing the total accounts receivable by the total credit sales and then multiplying by the number of days in the period. It indicates the average number of days it takes a company to collect payment after a sale. A lower DSO is preferred as it shows efficient collection.

 

Q42: What steps do you take to resolve unapplied cash in AR?

A: I review the payment details, match them with open invoices, communicate with the customer if needed, and apply the cash to the correct invoice. If necessary, I research further to find the correct allocation or escalate the issue.

 

Q43: How do you handle a situation where a customer consistently delays payments despite multiple follow-ups?

A: I assess the customer’s payment history, communicate directly to understand any challenges, renegotiate payment terms if needed, and possibly escalate the issue to the credit department or consider withholding further credit until the account is settled.

 

Q44: What is the impact of AR on the cash flow statement?

A: AR impacts the cash flow from operating activities. An increase in AR indicates that revenue is recorded but not yet collected in cash, which reduces cash flow. Conversely, a decrease in AR boosts cash flow as payments are collected.

 

Q45: How do you handle overpayments from customers?

A: I first verify the overpayment, then decide whether to apply the excess amount to future invoices, issue a refund, or hold the credit on the customer’s account, depending on the customer’s preference and company policy.

 

Q46: What is a chargeback in AR, and how do you handle it?

A: A chargeback is a return of funds to a customer, often due to disputes or errors. To handle it, I verify the validity of the chargeback, adjust the AR records, and work with the customer and internal departments to prevent future issues.

 

Q47: How do you manage AR for a company with multiple subsidiaries or locations?

A: I ensure that each subsidiary/location has a clear AR process and that records are consolidated accurately. I use an ERP system that supports multi-entity accounting and regularly reconcile intercompany transactions.

 

Q48: Can you explain the concept of factoring in AR?

A: Factoring is the sale of a company's receivables to a third party (factor) at a discount. This provides immediate cash flow, but at the cost of a fee. It’s commonly used when a company needs to improve liquidity quickly.

 

Q49: How do you handle intercompany transactions in AR?

A: I ensure that transactions between related entities are accurately recorded and reconciled. This involves eliminating intercompany balances during consolidation and ensuring that all entries are properly documented.

 

Q50: What is the significance of the Allowance for Doubtful Accounts, and how do you calculate it?

A: The Allowance for Doubtful Accounts is a contra-asset account that estimates the amount of receivables that may not be collected. It’s calculated based on historical data, industry standards, and specific customer circumstances using methods like percentage of sales or aging of receivables.

 

10. Customer and Dispute Management

Q51: How do you manage disputes regarding early payment discounts?

A: I verify the terms of the discount, check if the payment was made within the eligible period, and communicate with the customer to resolve any discrepancies. If the customer is not eligible, I provide a clear explanation and adjust the invoice accordingly.

 

Q52: What is your approach to resolving disputes that arise due to pricing discrepancies?

A: I review the original sales agreement and invoice details, communicate with the sales department, and discuss the issue with the customer. If a mistake was made, I correct the invoice; if not, I provide the customer with documentation to justify the pricing.

 

Q53: How do you handle situations where a customer claims they never received an invoice?

A: I first confirm that the invoice was sent and check the contact details. Then, I resend the invoice and follow up with the customer to ensure they receive it. I may also discuss alternative ways to send invoices, like electronic billing, to prevent future issues.

 

Q54: How do you prioritize collections from different customers?

A: I prioritize based on factors such as the aging of the receivables, the customer’s payment history, the amount owed, and the impact on cash flow. High-risk and high-value accounts usually get the most attention.

 

Q55: How do you handle a situation where a customer’s payment is consistently short?

A: I discuss the issue with the customer to understand why the payments are short. If it’s due to disputes or cash flow issues, I work to resolve the underlying problem. If it’s a recurring issue, I may adjust payment terms or escalate the matter.

 

Q56: What is your approach to managing customer disputes that escalate into legal issues?

A: I gather all relevant documentation, involve the legal department, and try to resolve the issue through negotiation. If litigation is necessary, I provide the legal team with all necessary support and continue to monitor the situation closely.

 

Q57: How do you maintain good relationships with customers while ensuring timely payments?

A: Clear communication, understanding customer needs, and being flexible within reason help maintain good relationships. I ensure that customers are aware of payment terms and deadlines, and I offer solutions like payment plans if needed.

 

Q58: How do you handle a customer who disputes a late fee?

A: I review the invoice and payment history to confirm whether the late fee is valid. If it is, I explain the reason for the fee to the customer. In some cases, I may offer to waive the fee as a goodwill gesture if the customer has a good payment history.

 

Q59: How do you deal with a customer who refuses to pay because of dissatisfaction with the product or service?

A: I coordinate with the sales or customer service department to address the customer’s concerns. If a resolution is reached, I negotiate a payment plan or settlement. If no resolution is possible, I may need to escalate the issue.

 

Q60: How do you handle partial payments from customers?

A: I apply the partial payment to the invoice and then follow up with the customer to arrange payment of the remaining balance. If necessary, I discuss the reason for the partial payment and work out a plan to collect the full amount.

 

11. Reporting and Analysis

Q61: How do you prepare an AR aging report, and what information does it provide?

A: An AR aging report categorizes receivables based on the length of time they have been outstanding. I generate the report using accounting software, which helps identify overdue accounts and prioritize collections.

 

Q62: How do you use AR reports to identify trends and improve collections?

A: I analyze aging reports, collection reports, and customer payment histories to identify patterns in late payments, high-risk customers, or inefficiencies in the collection process. This information helps me adjust strategies to improve collections.

 

Q63: What metrics do you monitor in AR to ensure efficiency?

A: Key metrics include Days Sales Outstanding (DSO), aging percentage, collection effectiveness index (CEI), bad debt ratio, and average days delinquent (ADD). These metrics provide insight into the efficiency of the AR process.

 

Q64: How do you calculate the Collection Effectiveness Index (CEI)?

A: CEI is calculated by dividing the total amount collected during a period by the total receivables at the beginning of the period plus new sales, and then multiplying by 100. It measures how effective the company is at collecting receivables.

 

Q65: How do you analyze customer payment behavior?

A: I review payment histories, aging reports, and customer account trends to identify any changes in payment behavior. I also consider external factors like industry conditions or economic factors that may influence behavior.

 

Q66: How do you create cash flow forecasts based on AR?

A: I use historical AR data, sales projections, and aging reports to estimate future cash inflows. I factor in expected payment delays and potential bad debts to create a realistic forecast.

 

Q67: How do you prepare an AR reconciliation report?

A: I compare the AR ledger with supporting documentation, such as invoices and bank statements, to ensure that all transactions are recorded correctly. Any discrepancies are investigated and corrected.

 

Q68: What strategies do you use to reduce bad debt expenses?

A: I implement thorough credit checks, monitor aging reports closely, follow up on overdue accounts promptly, and work with customers to set up payment plans if needed. I also review and adjust credit policies regularly.

 

Q69: How do you ensure accurate AR reporting at month-end close?

A: I ensure that all transactions are recorded, reconciliations are completed, and any discrepancies are resolved before closing the books. I also prepare detailed AR reports and review them for accuracy.

 

Q70: How do you report AR performance to management?

A: I provide management with regular reports that include key metrics (e.g., DSO, aging analysis), trends, and any issues affecting collections. I also make recommendations for improving AR performance.

 

12. Compliance and Regulations

Q71: How do you ensure compliance with Sarbanes-Oxley (SOX) requirements in AR?

A: I ensure that AR processes include proper internal controls, such as segregation of duties, authorization of transactions, and documentation of all actions. Regular audits and reviews also help maintain compliance.

 

Q72: How do you stay updated on changes in accounting standards that affect AR?

A: I regularly review updates from accounting bodies (e.g., FASB, IASB), attend webinars and training, and participate in industry forums to stay informed of any changes that affect AR.

 

Q73: What is the importance of internal controls in AR, and how do you implement them?

A: Internal controls help prevent errors and fraud in AR. I implement controls such as segregation of duties, authorization requirements, regular reconciliations, and automated alerts for unusual transactions.

 

Q74: How do you handle AR under different revenue recognition standards (e.g., ASC 606 or IFRS 15)?

A: I ensure that revenue is recognized when control of goods or services is transferred to the customer, as per the contract. This may require adjusting AR processes to align with performance obligations and timing of revenue recognition.

 

Q75: How do you manage AR for government contracts or grants?

A: I ensure compliance with government regulations, track contract-specific billing requirements, and maintain detailed documentation to support audits and compliance checks.

 

Q76: How do you handle AR in different tax jurisdictions?

A: I ensure that AR processes comply with local tax regulations, such as VAT or sales tax, by properly calculating and reporting taxes on invoices. I also work with tax professionals to ensure compliance in complex scenarios.

 

Q77: How do you handle AR for export sales?

A: I ensure that AR records reflect the correct exchange rates, taxes, and duties for export sales. I also monitor foreign receivables closely to manage any currency risk.

 

Q78: How do you manage AR in compliance with anti-money laundering (AML) regulations?

A: I implement controls to ensure that customer payments are legitimate, such as verifying customer identities, monitoring payment patterns, and reporting suspicious activities as required by AML regulations.

 

Q79: What are the implications of the General Data Protection Regulation (GDPR) on AR processes?

A: GDPR requires that customer data is handled securely and with consent. In AR, this means ensuring that customer payment information is stored securely, access is restricted, and customers are informed of their data rights.

 

Q80: How do you prepare for an AR audit?

A: I ensure that all AR records, such as invoices, payment receipts, and reconciliations, are organized and readily available. I also prepare reports and explanations for any significant discrepancies or adjustments.

 

13. Teamwork and Collaboration

Q81: How do you collaborate with the sales team to ensure accurate invoicing?

A: I maintain clear communication with the sales team to ensure that all necessary information, such as pricing, terms, and customer details, is accurate before invoicing. Regular meetings and cross-functional reviews help prevent errors.

 

Q82: How do you work with the finance team to ensure accurate AR reporting?

A: I collaborate with the finance team to ensure that AR data is accurately recorded in the general ledger and that any discrepancies are resolved before financial reports are generated.

 

Q83: How do you handle conflicts between AR and other departments?

A: I approach conflicts with a problem-solving mindset, seeking to understand the perspectives of all parties involved. I facilitate discussions to find a solution that aligns with both operational goals and financial objectives.

 

Q84: How do you manage communication between the AR team and customers?

A: I ensure that communication with customers is clear, professional, and timely. Regular follow-ups, consistent messaging, and addressing customer concerns promptly help maintain positive relationships.

 

Q85: How do you ensure that the AR team meets its targets and deadlines?

A: I set clear goals, track progress regularly, and provide the team with the necessary resources and support. I also encourage collaboration and continuous improvement to meet targets efficiently.

 

Q86: How do you handle training new AR team members?

A: I provide comprehensive training on AR processes, systems, and company policies. I also assign a mentor or buddy to help new hires adjust and encourage ongoing learning and development.

 

Q87: How do you handle a high workload within the AR team?

A: I prioritize tasks based on deadlines and importance, delegate responsibilities effectively, and look for ways to streamline processes. If necessary, I consider bringing in temporary help or redistributing tasks across the team.

 

Q88: How do you motivate the AR team to improve performance?

A: I set clear performance targets, provide regular feedback, and recognize achievements. I also create opportunities for team members to learn new skills and take on challenging projects.

 

Q89: How do you handle a situation where the AR team is understaffed?

A: I reassess the team’s workload, prioritize critical tasks, and seek temporary or additional support if necessary. I also communicate the situation to management and request resources to address the staffing shortfall.

 

Q90: How do you foster a culture of continuous improvement in the AR team?

A: I encourage the team to regularly review processes, suggest improvements, and adopt new technologies or methods. I also provide opportunities for professional development and learning.

 

14. Strategic and Advanced Questions

Q91: How do you assess and mitigate the risk of bad debts in AR?

A: I assess risk by reviewing customer credit scores, payment history, and industry conditions. To mitigate risk, I implement credit controls, monitor accounts closely, and negotiate payment plans for high-risk customers.

 

Q92: What strategies do you use to improve the efficiency of the AR process?

A: I look for opportunities to automate routine tasks, streamline workflows, and reduce manual errors. I also regularly review and update AR policies to reflect best practices and changing business needs.

 

Q93: How do you handle AR during a period of rapid company growth?

A: I scale AR processes to handle increased volume, invest in automation tools, and ensure that the team is adequately staffed and trained. I also monitor cash flow closely to manage any challenges that arise from rapid growth.

 

Q94: How do you manage AR in a volatile economic environment?

A: I closely monitor customer payment behavior, adjust credit terms as needed, and maintain strong communication with customers. I also work with management to implement strategies that protect cash flow, such as tightening credit policies or offering discounts for early payment.

 

Q95: How do you balance the need for strong collections with maintaining positive customer relationships?

A: I focus on clear communication and flexibility, working with customers to resolve issues while ensuring that payments are collected. Building trust and offering solutions that meet both parties’ needs is key to maintaining positive relationships.

 

Q96: How do you handle AR for a company that is expanding internationally?

A: I ensure that AR processes comply with local regulations, manage currency risk through proper hedging or currency adjustments, and establish clear communication with international customers.

 

Q97: How do you prepare AR for a company going through a merger or acquisition?

A: I ensure that AR records are accurate and up-to-date, prepare detailed reports on outstanding receivables, and work with the finance team to integrate AR processes with those of the acquiring or merging company.

 

Q98: How do you handle a situation where the company’s AR policy needs to be revised?

A: I assess the current policy, gather input from relevant stakeholders, and propose changes that address any issues or inefficiencies. I also ensure that the revised policy is communicated clearly to the AR team and implemented effectively.

 

Q99: How do you evaluate the effectiveness of the AR team?

A: I track performance metrics, such as DSO, collection rates, and accuracy of reporting, and provide regular feedback. I also conduct performance reviews and identify areas for improvement or professional development.

 

Q100: How do you align AR goals with the overall financial strategy of the company?

A: I ensure that AR goals support the company’s financial objectives, such as optimizing cash flow, reducing bad debt, and improving customer satisfaction. I also work closely with the finance team to align AR strategies with broader financial planning and decision-making.

PROC FAQs - Procurement Fusion Tax Best Practices and General Questions

 1. Why tax is not calculated on Purchase Order?

The reasons for that a tax is not calculated on a Purchase Order are multiples.

One of this reason is tax regime is subscribed to Legal entity and Use subscription of Legal entity checkbox in Party tax profile screen of Business Unit tax content is not checked.

Explanation:

When tax regime is subscribed to Operating unit, then the Use subscription of Legal entity checkbox in Party tax profile screen of Business Unit tax content should not be Checked.

When tax regime is subscribed to Legal entity, then the Use subscription of Legal entity checkbox in Party tax profile screen of Business Unit tax content should be checked.

If the checkbox values are not as per the above description, tax will not be calculated.

 

2. How to create a default tax setup?

Please see Practice 1 for this setup.

 

3. Is it possible to override the defaulted tax code?

Yes, it is possible to override the default tax code.

We have many possibility to do this.

For example we can use: Product Fiscal Classification, Product Category, User-Defined Fiscal Classification, Intended Use, Tax Classification.

In the next two points we show how exactlly the default tax can be overriden using Tax Classification and Fiscal Classification.

 

4. How to override tax using Tax Classification?

Please see Practice 2 for this setup.

 

5. How to override Tax using User-Defined Fiscal Classification?

Please see Practice 3 for this setup.

 

6. How make tax not be calculated on Purchase Order?

In order for the tax not to be calculated on Purchase Order, we can use Tax Classification setup or User Defined Fiscal Classification setup.

In the next two points it will be shown how to do such a setup in order that tax to not be calculated on Purchase Order.

 

7. How to use Tax Classification that no tax applied?

Please see Practice 4 for this setup.

 

8. How to use User-defined Fiscal Classification to make sure no tax is applied?

Please see Practice 5 for this setup.

 

9. How to have a different tax on specific item categories?

Please see Practice 6 for this setup.

 

10. How make tax not be calculated on specific item categories?

Please see Practice 7 for this setup.

 

11. How to default tax from Supplier or from Supplier Site?

Please see Practice 8 for this setup.

 

12. How to default tax from Items?

Please see Practice 9 for this setup.

 

13. How to make tax not be calculated for one supplier?

Please see Practice 10 for this setup.

 

14. How to create more than one Supplier/ Customer with the same Tax Registration Number?

Receiving this error message when trying to create a Supplier:

This Tax Registration Number is already in use for Party Type: Third Party and party name: XXXXXX for the same period.

STEPS TO REPRODUCE

1. Find a supplier 'XXXXXX'
2. In Tax Details page, have a Tax Registration with registration number "EXEMPT" assigned.
3. As per Oracle explanation, customer now needs to create a new Tax Registration in the context of a Tax Regime.
4. They have attempted to delete the existing registration but the option is not available.
5. While they can end-date the registration, an attempt to create a new Supplier with the same Tax Registration results in the above error.

The only way to enter duplicate Tax Registration Number (TRN) is to have this setup:

1) “Allow Duplicate Registration Number” to be enabled for tax used (in this case for TAX 1 that we defined in Practice 1 from above)

2) In Mange Tax Registration for Third Party Tax Profile for one supplier  we need to enter the required details and choose the regime and tax as defined in Practice 1 from above
Make the registration as default registration
Save the registration details
Save the party tax profile information.
Now the duplicate tax registration number can be used in the context of this tax.

This script can be used to see registration number for a supplier site:

SELECT *

  FROM zx_registrations

 WHERE     party_tax_profile_id IN (&siteID, &SupplierSiteIDs)

       AND registration_number = &tax_reg_number;

 

15. Which are the main Fusion tax tables that will contain the setup information that will help support in troubleshooting Fusion tax information?

Following are the main Fusion tax tables that will contain the setup information that will help support in troubleshooting Fusion tax information:
a. Tax Regimes: ZX_REGIMES_B
b. Taxes: ZX_TAXES_B
c. Tax Status: ZX_STATUS_B
d. Tax Rates: ZX_RATES_B
e. Tax Jurisdictions: ZX_JURISDICTIONS_B
f. Tax Rules: ZX_RULES_B
 
To get a dump of the Tax setups, you can use the following set of queries.  
Please provide the tax regime code when prompted. If the issue is limited to a tax then provide the tax name when prompted else please leave it blank.

SELECT * FROM zx_regimes_b
WHERE tax_regime_code = '&tax_regime_code';
 
SELECT * FROM zx_taxes_b
WHERE DECODE('&tax_name',null,'xxx',tax) = nvl('&tax_name','xxx')
AND tax_regime_code = '&tax_regime_code';
 
SELECT * FROM zx_status_b
WHERE tax = '&tax_name'
AND tax_regime_code = '&tax_regime_code';
 
SELECT * FROM zx_rates_b
WHERE tax = '&tax_name'
AND tax_regime_code = '&tax_regime_code';
 
SELECT * FROM zx_jurisdictions_b
WHERE DECODE('&tax_name',null,'xxx',tax) = nvl('&tax_name','xxx')
AND tax_regime_code = '&tax_regime_code';
 
SELECT * FROM zx_rules_b
WHERE tax = '&tax_name'
AND tax_regime_code = '&tax_regime_code';

 

16. Which are the main Fusion tax tables that will contain the transaction information that will have the tax details after tax is calculated?

Following are the main Fusion tax tables that will contain the transaction information that will have the tax details after tax is calculated:
 
a. ZX_LINES: This table will have the tax lines for associated with PO schedules.  
TRX_ID: Transaction ID. This is linked to the PO_HEADERS_ALL.PO_HEADER_ID
TRX_LINE_ID: Transaction Line ID. This is linked to the PO_LINE_LOCATIONS_ALL.LINE_LOCATION_ID

Requisition information is not present in this table
 
b. ZX_REC_NREC_DIST: This table will have the tax distributions for associated with PO distributions.
TRX_ID: Transaction ID. This is linked to the PO_HEADERS_ALL.PO_HEADER_ID
TRX_LINE_ID: Transaction Line ID. This is linked to the PO_LINE_LOCATIONS_ALL.LINE_LOCATION_ID
TRX_LINE_DIST_ID: Transaction Line Distribution ID. This is linked to the  PO_DISTRIBUTIONS_ALL.PO_DISTRIBUTION_ID
RECOVERABLE_FLAG: Recoverable Flag. If the distribution is recoverable then the flag will be set to Y and there will be values in the RECOVERY_TYPE_CODE and RECOVERY_RATE_CODE.
 
c. POR_REQ_DISTRIBUTIONS_ALL: This table will have the tax distributions for associated with Requisition distribution.
RECOVERABLE_TAX: Recoverable tax amount
NONRECOVERABLE_TAX: Non Recoverable tax amount
 
d. ZX_LINES_DET_FACTORS: This table holds all the information of the tax line transaction for both the requisitions as well as the purchase orders
TRX_ID: Transaction ID. This is linked to the POR_REQUISITION_HEADERS_ALL.REQUISITION_HEADER_ID / PO_HEADERS_ALL.PO_HEADER_ID

TRX_LINE_ID: Transaction Line ID. This is linked to the POR_REQUISITION_LINES_ALL.REQUISITION_LINE_ID / PO_LINE_LOCATIONS_ALL.LINE_LOCATION_ID

 

17. What Are The Primary Purchasing and Tax Tables Populated for Requisitions and Purchase Orders?

Some common queries that can be used:

Purchase Order:

SELECT poh.segment1,
poh.po_header_id,
pol.line_num,
poll.shipment_num,
zxd.input_tax_classification_code,
zxd.user_defined_fisc_class
FROM ZX_LINES_DET_FACTORS zxd,
zx_lines zxl,
po_headers_all poh,
po_lines_all pol,
po_line_locations_all poll
WHERE poh.po_header_id = pol.po_header_id
AND pol.po_line_id = poll.po_line_id
AND zxd.trx_id = zxl.trx_id
AND zxl.trx_id = poll.po_header_id
AND zxd.entity_code = 'PURCHASE_ORDER'
AND poh.segment1 = '&po_number';

Note the po_header_id:

 
SELECT * FROM PO_HEADERS_ALL
WHERE PO_HEADER_ID = &po_header_id;

SELECT * FROM PO_LINES_ALL
WHERE PO_HEADER_ID = &po_header_id;

SELECT * FROM PO_LINE_LOCATIONS_ALL
WHERE PO_HEADER_ID = &po_header_id;

SELECT * FROM PO_DISTRIBUTIONS_ALL
WHERE PO_HEADER_ID = &po_header_id;

SELECT * FROM ZX_LINES_DET_FACTORS
WHERE APPLICATION_ID = 201
AND ENTITY_CODE = 'PURCHASE_ORDER'
AND EVENT_CLASS_CODE = 'PO_PA'
AND TRX_ID = &po_header_id;

SELECT * FROM ZX_LINES
WHERE APPLICATION_ID = 201
AND ENTITY_CODE = 'PURCHASE_ORDER'
AND EVENT_CLASS_CODE = 'PO_PA'
AND TRX_ID = &po_header_id;

SELECT * FROM ZX_REC_NREC_DIST
WHERE APPLICATION_ID = 201
AND ENTITY_CODE = 'PURCHASE_ORDER'
AND EVENT_CLASS_CODE = 'PO_PA'
AND TRX_ID = &po_header_id;

 

_______________________________________________________________________

 

Requisition:

select prh.segment1,
prl.line_num,
prd.recoverable_tax,
prd.nonrecoverable_tax,
zd.*
from
por_requisition_headers_all prh,
por_requisition_lines_all prl,
por_req_distributions_all prd,
zx_lines_det_factors zd
where
prh.requisition_header_id = prl.requisition_header_id and
prl.requisition_line_id = prd.requisition_line_id and
prl.requisition_line_id = zd.trx_line_id and
prl.requisition_header_id = zd.trx_id and
prh.segment1 = '&req_number';

 

select * from zx_lines_det_factors
where trx_id = &por_requisition_header_id;

_______________________________________________________________________

Checking vendor tax information:

select
ap.vendor_name vendor_name,
ap.vendor_id vendor_id,
aps.vendor_site_code vendor_site_code,
aps.vendor_site_id,
aps.party_site_id party_site_id_site,
zx.party_type_code,
zx.process_for_applicability_flag process_for_app_flag
from
POZ_SUPPLIERS_INT ap,
POZ_SUPPLIER_SITES_INT aps,
zx_party_tax_profile zx
where
ap.vendor_name = '&vendor_name' and
ap.vendor_id = aps.vendor_id and
aps.party_site_id = zx.party_id and
zx.party_type_code in ('THIRD_PARTY_SITE', 'THIRD_PARTY');

 

18. Which table is stored the tax classification of Suppliers?

For finding Fiscal classification code on the supplier please use this script:

SELECT HZ_CODE_ASSIGNMENTS.*

FROM

(SELECT HzCodeAssignmentEO.*

FROM HZ_CODE_ASSIGNMENTS HzCodeAssignmentEO,

HZ_CLASS_CATEGORY_USES hccd,

zx_fc_types_b zft

WHERE HzCodeAssignmentEO.CLASS_CATEGORY = hccd.CLASS_CATEGORY

AND HzCodeAssignmentEO.CLASS_CATEGORY = zft.OWNER_ID_CHAR) HZ_CODE_ASSIGNMENTS ,

ZX_PARTY_TAX_PROFILE,

HZ_PARTY_SITES ,

POZ_SUPPLIER_SITES_INT

WHERE HZ_CODE_ASSIGNMENTS.OWNER_TABLE_NAME = 'ZX_PARTY_TAX_PROFILE'

AND HZ_CODE_ASSIGNMENTS.OWNER_TABLE_ID = ZX_PARTY_TAX_PROFILE.PARTY_TAX_PROFILE_ID

AND ZX_PARTY_TAX_PROFILE.PARTY_ID = HZ_PARTY_SITES.PARTY_SITE_ID

AND POZ_SUPPLIER_SITES_INT.PARTY_SITE_ID = POZ_SUPPLIER_SITES_INT.PARTY_SITE_ID

AND POZ_SUPPLIER_SITES_INT.VENDOR_SITE_CODE = '&SupplierSiteCode';

 

 

select * from POZ_SUPPLIER_SITES_INT where party_site_id in

(SELECT party_id FROM zx_party_tax_profile WHERE party_type_code = 'THIRD_PARTY_SITE' AND tax_classification_code is not null);

 

19. Can we have INCLUSIVE TAX on Purchase Order?

Inclusive tax is supported in fusion in Procurement from 18C.
Please refer the whats new URL as below
https://www.oracle.com/webfolder/technetwork/tutorials/tutorial/cloud/r13/wn/r13-2018-procurement-wn.htm#F2698

Please see Practice 13 for this setup.

 

20. How to stop calculations for all taxes on Purchase Order?

 Please see Practice 11 for this setup.

 

21. How to stop a tax from applying in Procurement but still in other modules?

Please see Practice 12 for this setup.

 

22. When using the register supplier function, the system require us to enter a value for at least one of these fields: D-U-N-S Number, Taxpayer ID, or Tax Registration Number.
      Is that any way to disable this restriction?

At this time there is no way to made those fields non-mandatory.

NOTE: The explanation for the non-display of the "*"-mandatory-  for those three fields is because "*" is for single mandatory field -- in this case at least one is required.

This issue has been identified as an Enhancement. Please create a new idea in Idea Lab on Customer Connect to have this functionality considered in the future.
For more details, please refer to: How To Log An Enhancement Request (in Idea Labs) (Note: 2254478.1)

Using the Idea Lab, you will be able to:
- Socialize with Customer Community
- Voting Capability which allows you to vote on ideas that are important to your business
- More clear statuses on your ideas, including the ability to communicate with our Product Management team.
- Visibility to see other customer ideas

 

23. On Supplier Self Service Registration Page: Company Details - There should be Tax Registration number validation for UAE. There should be a field 'Are you UAE tax registered'    Yes/  No , if yes, the TRN field should be mandatory.
      How to do this?

 Product Management team confirmed that this is not feasible: One of the three fields (DUNS, TRN or Taxpayer ID) are required.

 

24. The user made the tax registration number in supplier to mandatory. But the system is validating the mandatory check only if user go to the particular tab Transaction Tax>Tax Registrations>Registration Number.
      If don't enter the registration number also it allows user to save the records, unless user go to the above navigation.
      Why this is happen?

Product Management team confirmed us that this is the behavior i.e. if user do not access a tab, it will not enforce users for any required validation.

 

25. Why tax is not getting calculated while Uploading Purchase Orders (POs) through FBDI template?

In FBDI template: Purchase Orders Import there are some fields in po_line_locations_interface related tax:

Tax Classification Code, Intended Use, Product Category Code, Product Fiscal Classification.

If any of these fields are used tax on PO imported will be calculated.

For example let use Tax Classification field for tax to be calculated on a PO imported through FBDI template.

For this is necessary to have this setup:

• Setup for Tax Classification Code (see Practice 2 from this note)
• In FBDI template in field: Tax Classification is necessary to insert exactly the name for tax classification defined above in order that tax to be calculated. It is recommended to check a PO already created manually and take from there exactly the name for Tax Classification in order to insert the correct information in FBDi template.

 

26. How to Allow Suppliers With Duplicate Taxpayer ID?

Allowing Tax Payer ID sharing across suppliers in the same parent-child hierarchy will allow to same Supplier Tax Identification Number for child supplier. This only works if parent supplier and child supplier relationship established.
Enabling this feature will not impact sharing of tax payer ID if parent-child hierarchy is not established.
Tax Identification number is unique, and same number is not allowed for any other suppliers.
There is no such task to allow duplicate tax payer ID except this procurement new offering, but this new offering doesn't support duplicate tax payer id (it supports only parent-child suppliers).
Please see these notes for more details:
-Implication Of Selecting Opt In Feature --Allowing Tax Payer ID Sharing Across Suppliers (Doc ID 2391181.1)
-How to Allow Suppliers With Duplicate Taxpayer ID? Can We Use Supplier Registration Process For Creating Suppliers With Duplicate Taxpayer ID? (Doc ID 2488369.1)
Instead you can create more than a supplier with the same Tax Registration Number.
For this setup please see this note:  FAQs - Procurement Fusion Tax Best Practices and General Questions (Doc ID 2377199.1)
Section: 14. How to create more than one Supplier/ Customer with the same Tax Registration Number?

 

27. How to create a supplier from an existing party (customer)?

When it is created a supplier from an existing party, the party type  has to be an organization to ensure supplier creation is successful.  When a supplier is created, the party_type mapped to the supplier is 'Organization'.
It is possible to create a  supplier via FBDI for an existing party (customer) with the party type=Organization. Supplier and customer need to have the same register id.

 

28. It is possible to have a different tax classification code (TCC) for a supplier and a customer that have the same name and the same register_id?

It is not possible to have different TCC for a supplier and a customer that have the same name and the same register_id.
But as a workaround  it can be sugessted to have the TCC setup as:
At the Supplier Site Level, set the TCC as 'AP TAX: Offset Tax'
And at the Customer Level, set the TCC as 'AR TAX: Regular Tax'

Now setup the defaulting hierarchy at the application tax options as:
For AP:
Default Heirarchy1 - Supplier Site
Default Heirarchy2 - Supplier

For AR:
Default Heirarchy1 - Customer
Default Heirarchy2 - Customer Site

 

29. How to update by spreadsheet tax classification code (TCC) for a supplier?

The TCC it is possible to be imported through spreadsheet.
The following attributes can be uploaded:
1. Allow Tax Applicability
2. Allow offset Taxes
3. Tax Classification Code

Process:
1.Navigate to Set up and Maintenance
2.Choose the ‘Manage Tax Regimes’ Task.
3.In the ‘Transaction Tax Regimes’, Select the Download Tax Implementation Workbook.

4.Save the file on the local folder.

5.Open the excel sheet, select the Tax registrations tab

6.Right click on the tab, and select Unhide.

7.The ‘Party Tax Profile Controls’ tab opens, where you can find

8.Enter the required data and save the file and generate the csv, as per the ‘Tax Impl Workbook Instructions’ tab.

9.After filling the excel up, Navigate to Transaction tax regimes, Choose ‘Upload Tax Implementation Workbook’.

10.Browse the file and select upload

Please see this note: Classification Code, Allow Tax Applicability, Allow Offset Taxes (Doc ID 2247576.1) , for more details.

 

30) How it is validation of Tax Registration Number (TRN)?

Validation for TRN is made in this order:
1) Tax
2) Tax Regime
3) Country Default Control

If at Manage Tax we don't have set nothing to Registration Number Control and defaults for Validation Level then is going to Manage Tax Regime.
If at Manage Tax regime we don't have nothing is going to the last source: Manage country Default Control.

Validation type behavior it is in this way :
Blank = to allow to fill any TRN Valid or invalid and Save the information at supplier level ( working as expected)
Warning =to validate the TRN ,to provide a warning message if TNR is invalid and to Save the information at supplier Level (not working as expected)
Error = to validate the TRN ,to provide a Error message if TRN is invalid and to Not Save the information at supplier Level until the TRN is Valid ( working as expected)
Warning configuration is not supported in Suppliers flow. In Supplier flow it is necessary to use Error or no validation.

 

31) How it is the correct way to insert Tax Registration Number (TRN) on supplier?

The correct ways to insert a TRN is to insert Registration number with Tax Regime Code and Tax using Suppliers UI or from  Manage Tax Registration.

 

32) Which is the functionality of field Registration Number from Supplier UI ?

 The field Registration Number from Supplier UI showing the last TRN inserted from Manage Tax Registration task.