Auto Invoicing Setup Steps

1) In OM System Parameters Window, For item Validation Organisation assign Master Inventory(MI) or Actual Inventory (AI).

2) Create Transaction Type for line and order.
3) Define Document Sequence for the transaction type.
4) Assign Document Sequence and Document Category in Document Assignment window
5) For OM Responsibility assign " QP Item Validation Organisation".
6) Assign you item in advance pricing form.
7) Define Carrier Method.
8) Define Release Sequence Rule.
9) Define Pick Slip Grouping Rule.
10) Define Release Rules.
11) Define Document Set for Pick Release.
12) Define Document Set for Ship Confirmation.
13) Define Ship Confirmation Rules.
14) Shipping Parameters.
15) Define Picker Role.
16) Define Shipper Role.
17) Define grants to shipper and picker
18) Open Periods in Inventory, Purchasing and General Ledger Modules.
19) Create Receivables Transaction Type
20) Create Imported Transaction Source
21) Assign Receivable transaction type and sources to Transaction type create in OM.

RMA(Return Material Authorization) Concept in Oracle Apps

RMA functionality allows the user to return the goods delivered to customer against Sales Order. Return from customer can occur for various reasons like goods damaged, Defective Product, Product doesn't meet customer expectations, Sampling ...etc.
Note: For internal Order we can't perform RMA transaction.
The following are the different RMA Order Types avaliable in oracle apps.
1. RMA with Credit Memo Only.
2. RMA with Receipt and Credit Memo.
3. RMA with Receipt and No Credit Memo.
RMA with Credit Memo Only: The company issues a credit Memo without the customer returning the product. Examples: For service Item no physical Product is returned, in such a case only Credit memo will be given to customer.
RMA with Receipt and Credit Memo: The Customer returns a product and receives credit Memo as a result of goods Returned. Example: Defective Product, Product don't not meet expections of Customer.
RMA with Receipt and no Credit Memo: The customer returns a product you sent to them on a trial basis or at no charge, therefore they receive no credit memo. Examples: Sample Products.
RMA can be created in two different ways in Oracle: 
1. Create a New Return which will create the RMA from scratch 
2. Copy an original order into an order with an RMA Order Type 
Sales Order Line Status: (For RMA with Receipt and Credit Memo)
1. Entered (Sales is entered or Copies before SO is booked)
2. Awaiting return (When Sales Order is booked, Immediatily the Sales Order line status will be Awating Return)
3. Returned (In Purchasing Module, When enter Receipt, the SO Line status will be"Returned"
4. Closed (After Workflow background process program is completed, the SO line Status will be " Closed")
Setup Steps:
STEP 1: The following Item attributes should be set for an item to perform RMA trasactions 
                 1. Returnable (In OM Tab) 
                 2. Shippable (In OM Tab). 
                 3. Invoice Enable (In Invoice Tab). 
STEP 2:Create OM Transaction Types for "Line" with Order Category as "Return".
STEP 3: Create Om Transaction Types for "Order" with Order Category as "Return".
STEP 4:Assign the Transaction Type Line to Transaction type Order with line workflow assignment window. Select the process name as "Line Flow - Return for Credit with Receipt".
STEP 5:Create Document Sequence for Return Purpose 
STEP 6:Query the Document Category  Which is automatically created from Transaction type created.
STEP 7: Assign Sequence and Category through Assignment Window.STEP 8: Item must be assigned in Price list
STEP 9: Return reason should be defined or use the existing one.
STEP 10: Define Transaction Sources and Transaction Type(Credit Memo) for RMA transaction in AR Module.

COGS in 11i Vs Deferred COGS in R12

Prior to this enhancement, the value of goods shipped from inventory were expensed to COGS upon ship confirm, despite the fact that revenue may not yet have been earned on that shipment. With this enhancement, the value of goods shipped from inventory will be put in a Deferred COGS account. As percentages of Revenue are recognized, a matching percentage of the value of goods shipped from inventory will be moved from the Deferred COGS account to the COGS account, thus synchronizing, the recognition of revenue and COGS in accordance with the recommendations of generally accepted accounting principles. 
Note: Deferred COGS is a mandatory concept to used in R12 Version.
Where do we enter this COGS and Defferred COGS Account
Oracle Purchasing Navigation: Setup --> Organisation --> Organisation.
Select your inventory Organisation and Go to Other Accounts tab
Then you can see COGS and Deffered COGS A/c

Note: In early version like 11i as Defferred COGS concept is not exist, The following is screenshot from 11i Version where you can't find Deferred COGS A/c.

Accounting as per earlier version 11i.
At the time of shipping (Ship Confirmation) the accounting as follows:
         COGS A/c ..............................Dr.
                 To Inventory Valuation A/c..................Cr.
Accounting as per version Release 12 (R12):
At the time of shipping (Ship Confirmation) the accounting as follows:
         Deferred COGS A/c.................Dr.
                 To Inventory Valuation A/c..................Cr.
After AR invoice is generated, As percentages of Revenue are recognized, a matching percentage of the value of goods shipped from inventory will be moved from the Deferred COGS account to the COGS account as follows.
          COGS A/c...........................Dr.
                   To Deferred COGS A/c ......................Cr.
Record Order Management Transactions: Records new sales order transaction activity such as shipments and RMA returns in Oracle Order Management.
Run Collect Revenue Recognition Information program: This program will collect the change in revenue recognition percentage based on AR events within the user specified date range.

Navigation: Cost --> COGS Recognition --> Collect Revenue Recognition Information.

In Parameter, Give Start date and End date and submit it. 

Run Generate COGS Recognition Events: This program will create the COGS recognition transaction for each sales order line where there is a mismatch between the latest revenue recognition percentage and the current COGS recognition percentage. Here the system will credit the Deferred COGS accounting and transfer the relevant amount to COGS A/c. 

Navigation:  Cost --> COGS Recognition --> Generate COGS Recognition Events.
Here, the following accounting will be generated 
           COGS A/c...........................Dr.
                   To Deferred COGS A/c ......................Cr.