Order management Interview Questions

1. What are the various order management processes supported by oracle OM?
Standard orders: This method supports Make to Stock business model where the products are made and kept in stock. The products are then shipped to the customer based on his order.
Configure to orders: this method supports Assemble to Order business model. The product configuration is chosen at the time of sales order entry. WIP job is created based on the requirement of the sales order
Drop ship orders: In this method, your supplier will ship the goods to   your customer on your behalf
Internal sales orders: Internal sales orders are created across two    different organizations of the same business group. Internal requisition is raised first and is converted to an internal sales order where the items are shipped based on the quantity specified in the internal sales order.

2.  Describe the order flow in Order to Cash life cycle

• Enter the sales order
• Book the sales order
• Pick release
• Ship confirm
• Auto Invoice generation
• Creating receipt
• Transfer to GL

3.  Describe the processes involved after entering sales order?

• The items specified on the order are validated in Oracle Inventory
• The price of the items are calculated using the pricing engine
• The availability of the items are checked and may be reserved
• The items are then pick released and shipped to the customer.

4.  What are the different types of sales orders available?

• Standard
• Mixed
• Return

5.  When is an item eligible for customer order?

When the attributes ‘Customer Ordered’ and ‘Customer order enabled’ are checked in the order management tab of Master Items.

6.  Describe the Header status during the sales order process?

• Entering the sales order                               Entered
• Booking the sales order                                Booked
• Pick release the order                                   Booked
• Ship confirm the order                                 Booked
• Running interface trip stop                          Booked

7.  Describe the line status during the sales order process?

• 
  
• Entering the sales order                               Entered
• Booking the sales order                                Awaiting shipping (when  sufficient quantity is available)
• Supply eligible (when sufficient quantity is not available)
• Pick release the order                                    Picked
• Ship confirm the order                                  Shipped
• Running interface trip stop                          Closed

8.  Differentiate available quantity and on-hand quantity?

Available quantity + Reserved quantity = On-hand quantity

9.  Differentiate Supply Eligible Status and Supply Partial Status?
Supply Eligible
When there is no sufficient quantity available.
Example: When user tries to book a sales order for Item ‘Test Item’ for a quantity of 10 but the item contains zero quantity. Then the Sales Order Line Status change to ‘Supply Eligible’.
Supply Partial
when the quantity is partially available.
Example: When user tries to book a sales order for Item ‘Test Item’ for a quantity of 10 but the item contains only 4 quantities. Then the Sales Order Line Status changes to ‘Supply Partial’.

10.  Describe scheduling in sales order?

It is a process of communicating the balance between customer demand and a company’s ability to fulfill an order from current inventory and supply sources
11.  What are the various ways of scheduling the sales order?

Setting Profile option – OM: AutoSchedule to yes
From Tools Menu->Check Autoschedule Checkbox in Sales Order Screen.
Right Click on Sales Order Line ->Scheduling->Schedule.
Schedule Order Concurrent Program.

12.  Differentiate ship set and arrival set?

In the ship set process, the user would like to ship group of order lines from same warehouse to same location. If Order Lines are grouped under ship set, then until all lines in the ship set satisfy the demand, you cannot ship the goods to customer.
In the Arrival Set process, the customer requests specific order lines to arrive together

13.  What are the Process Constraints?

Processing Constraints allow Order Management users the ability to control changes to sales orders, at all stages of its order or line workflows to avoid data inconsistencies and audit problems.
14.  At what stage an order cannot be cancelled?

An order cannot be cancelled when it is Pick confirmed.

15.  What are picking rules?

A user-defined set of criteria to define the priorities Order Management uses when picking items out of finished goods inventory to ship to a customer. Picking rules are defined in Oracle Inventory.

16.  What are Defaulting Rules?

While creating the order, you can define defaulting rules so that the default values of the fields pop up automatically instead of typing all information.

17.  What are validation templates?

A validation template names a condition and defines the semantics of how to validate that condition. Validation templates can be used in the processing constraints framework to specify the constraining conditions for a given constraint.

18.  What is pick slip?

Pick slip is a shipping document that the pickers use to locate items in the warehouse/ inventory to ship for an order.

19.  What is packing slip?

It is a shipping document that is sent along with the shipment which details the contents that are sent in that shipment.

20.  What is shipping exceptions report?

Shipping exceptions report prints the exceptions messages during ship confirmation.

21  Explain Bill of Lading?

It is a legal document between the shipper of a particular item and the carrier detailing the type, quantity and destination of the good being carried
The bill of lading also serves as a receipt of shipment when the good is delivered to the predetermined destination. This document must accompany the shipped goods, no matter the form of transportation, and must be signed by an authorized representative from the carrier, shipper and receiver.

22.  What is Interface trip stop?

ITS is triggered at the time of shipping if the option ‘defer interface’ is not checked. When this report is run, it performs two main things:
Update the order management (OE_ORDER_LINES_ALL)
Trigger the inventory interface (TO UPDATE Inventory tables)

23.  When is drop ship order created?

Customer requires an item that is not stocked normally
Customer requires large quantities of the item that is not available with you
It is more economical when the supplier sends the item directly to the customer

24.  What is ASN?

It is an advanced Shipment Notice which is transmitted via Electronic Data Interchange (EDI) from a supplier to let the receiving organization know that the shipment is arriving.The ASN contains the shipment date, time, identification number, packing slip data, freight information etc

25.  What is Autoinvoice?

It is a concurrent program which is used to perform the invoice processing. Once the order or lines are eligible for invoicing, the invoice interface workflow activity interfaces the data to reeivables

26.  Explain the difference between a credit memo and an invoice?

Credit memo is raised to partially or fully reverse an original invoice amount
An invoice is generated in receivables which show the amount owed by the customers for the purchase of goods or services. It may also contain tax and freight charges

27.  What is FOB?

The term FOB means Freight (or free) on Board is commonly used when shipping goods to indicate who pays loading and transportation costs, and/or the point at which the responsibility of the goods transfers from shipper to buyer.
“FOB shipping point” or “FOB origin” indicates the buyer pays shipping cost and takes responsibility for the goods when the goods leave the seller’s premises. “FOB destination” designates the seller will pay shipping costs and remain responsible for the goods until the buyer takes possession.

28.  What are the different RMA Order Types?

RMA with Credit is used when the customer returns the physical product and also receives credit as a result of the return.
RMA no Credit is used when the customer will return the product but will not be receiving a credit as a result of the return.
RMA Credit only is used when the customer will receive a credit, but the physical return of the product is not required.

29.  What are the necessary setups to perform Internal Sales Order?

Internal Order and Internal Ordered Enabled set to ‘Yes’.
Shipping Network(Intransit or Direct) must be defined.
Internal Customer must be defined

30.  What are Modifiers and Qualifiers?

Modifiers are discount, surcharge or special charge that may be applied to the base price and may alter the value of the item. It can be applied either at order level or at the line level.
A qualifier helps you define who is eligible for a price list or modifier. A qualifier can be a customer name, a customer class, an order type, or an order amount that can span orders.

31.  What are the possible reasons for Interface trip stop to complete with Error?

Few reasons may be
1) Order is on Hold
2) Tax is not applied properly
3) On-Hand qty is not available in the Inventory
4) Inventory Period is not open
5) Make sure Schedule Ship Date or Requested Date is within the range of order Date

ACCOUNTING ENTRIES IN ORACLE

                                                            PAYABLES

NOTE: We don’t have Accounting Entries for PO & Requisition

P2P ENTIRES:

When we receive the Goods in the staging area the accounting entry would be (GRN):

Receiving Inventory --- Dr-----It will pick from receiving options.

Ap Accrual --- Cr---It will pick from Purchasing Options.

When we are moving the Goods from Staging area to Sub-Inv (Recv Trans):

Material A/C --- Dr-----It will pick from Inventory Options

Receiving Inv --- Cr----It will pick from Receiving Options

While Creating Invoice:

Ap Accrual --- Dr

Liability ---- Cr-----It will pick from supplier Liability

While Making Payment:

Liability – Dr

Cash Clearing – Cr-----It will pick from Bank

Reconciliation: Cash Clearing --- Dr

Cash – Cr

tandard Invoice Entry :

Ap Accrual --- Dr

Liability ---- Cr

Debit and Credit Memo Entries:

Liability --- Dr

Ap Accrual --- Cr

Prepayment Entries:

While Creating Prepayment Invoice:

Prepayment --- Dr----It will pick from supplier

Liability – Cr----It will pick from supplier

While Making Payment to Prepayment:

Liability – Dr

Cash – Cr

While applying Prepayment on Standard Invoice:

Liability --- Dr

Prepayment – Cr

INTEREST INVOICE ENTRY WHILE MAKING PAYMENT :

Interest expenses –- Dr-----It will pick from Financial options

Liability ---------------- Dr

Cash ---------------------Cr

EXPENSE REPORT ENTRY :

Item Expense A/C --- Dr

Liability --- Cr

PAYMENT REQUEST INVOICE ENTRY :

Item Expense --- Dr

Liability – Cr

FUTURE DATED PAYMENT ENTRY :

When Bills Issued:

Item Expense – Dr

Bills Payable --- Cr

When Maturity Date Confirmed:

Bills Payable – Dr---It will pick from Supplier or Financial options

Liability – Cr

WITH HOLDING TAX ENTRY :

When Withholding tax applied on standard Invoice:

Item Expense --- Dr

Liability --- Cr

Withholding --- Cr-----It will pick from WHT codes

 Auto Generated WHT Entry:

Item Expense – Dr

Liability --- Cr

RETAINAGE RELEASE ACCOUNTING ENTRY:

When Invoice matched with PO accounting entry would be:

Accrual ------ Dr

Liability ---- Cr

Retainage ---Cr----It will pick from financial options

While making payment to the invoice matched with PO:

Liability ---- Dr

Cash --------Cr

When Retainage Release Invoice Matched with PO accounting entry would be:

Retainage --------Dr

Liability ----------- Cr

While making Payment to Retainage Release:

Liability ---Dr

Cash -------Cr

           

                                                 RECEIVABLES

O2C ENTRIES:

Pick Release:

Receiving Inventory ---- Dr

Item Expense/Material ac ---- Cr

Ship Confirmation:

COGS ---- Dr----It will pick from Inv Information

Receiving Inv (Sub-Inv) ---- Cr

While Creating Transaction:

Receivable ---- Dr

Revenue ------- Cr

Freight --------Cr

Tax -------------Cr

While Recording Receipt: WHEN STATE IS CONFIRMED

Confirmed Cash--------------Dr

Receivables ----Cr

When Remitted: WHEN STATE IS REMITTED

Remitted Cash ---- Dr

Confirmed Cash--------Cr

When Reconciled: WHEN STATE IS CLEARED

Cash -------Dr

Remitted Cash --- Cr

DEPOSIT ACCOUNTING ENTRY:

When we create DEPOSIT invoice the accounting entry would be:

Receivable --- Dr

Accrual (Unearned Revenue) -------- Cr

When we create Sales Invoice:

Receivable---Dr

Revenue----- Cr

When Deposit adjusts with actual transaction invoice the entry would be:

Unearned Rev (Accrual) -----Dr

Receivables-------Cr

GAURANTEE ACCOUNTING ENTRY:

When we crate Guarantee transaction:

Unbilled receivable----Dr

Unearned Revenue ---Cr

When we create sales Invoice:

Receivable ----Dr

Revenue -------Cr

When Guarantee transaction adjusts with sales invoice:

Unearned Revenue ---Dr

Unbilled Receivable—Cr

REVENUE RECOGNISATION:

INVOICE ADVANCE:

When we create sales invoice and set invoicing rule as INADVANCE(FIXED SCH):

Receivables ---- Dr

Unearned Revenue -------- Cr

Once we recognize the Revenue the accounting entry would be:

Unearned Revenue ---- Dr

Revenue------------------Cr

And the final entry would be:

Receivable ------Dr

Revenue ---------Cr

INVOICE ARREARS:

REVENUE RECOGNISATION using Invoice Arrears Schedule:

Unbilled Receivables—Dr

Revenue-----------------Cr

Once we have billed the customer

Receivables---------------Dr

Unbilled Receivables--Cr

ONACCOUNT ACCOUNTING ENTRY:

When we created the Receipt and applied to OnAccount :

Cash ---Dr

Receivables ----CR, ONACCOUNT -----Cr

CUSTOMER REFUND ACCOUNTING ENTRY :

When we release the On account and Refund the Amount:

Cash ----Dr

Receivables----Cr

On Account Cash ---Cr

Unapplied Cash -----Dr

Refund----------------Cr

Assets:

Asset Addition :

The process of adding a Fixed Asset either through detailed, quick or mass addition is called asset addition. Detail and quick addition are carried out only in Oracle Assets.

The journal entry in Oracle Assets during detailed or quick addition is

Dr. Asset Cost

Cr. Asset clearing account

Asset clearing account is used to reconcile the transactions between Oracle Payables and Oracle Assets. When an asset is added through detailed or quick additions, the credit goes to the asset clearing account. Also for mass addition process, oracle assets use Asset Clearing account for reconciliation.

In Oracle Assets the journal entry remains the same

Dr. Asset Cost

      Cr. Asset clearing account

In AP

Dr Asset Clearing Account

Cr Accounts Paya

Changes:

Changes refer to change in Asset Cost or Depreciation method or Depreciation rate for one or more assets. Oracle Assets would use the new cost or depreciation method or rate from the period of change to arrive at the depreciation amount. Also it recalculates the depreciation that should have been calculated so far, compares with the actual depreciation and passes an adjusting entry.

If the transaction results in addition to the cost of asset, then the journal entry created is

Dr. Asset Cost

Cr. Asset Clearing

Hence an adjusting entry to incorporate depreciation as per the new cost of the asset should be incorporated. Also due to change in method or rate the new depreciation calculated may be lower or greater than the depreciation calculated so far.

If the accumulated depreciation recalculated is lower than the accumulated depreciation calculated until now,

Dr. Accumulated Depreciation

Cr. Depreciation Expense (Adjustment)

If it is greater than the Accumulated depreciation until now,

Dr. Depreciation Expense (Adjustment)

Cr. Accumulated Depreciation

 Transfers

Transfers refer to change in Location, expense account, and employee assignment. If there is a change in expense account, for e.g. If an asset is transferred from department 001 to department 002,

The journal entry for accounting the asset cost is

Dr. Asset Cost (002)

Cr. Asset Cost (001)

The journal entry for accounting the accumulated depreciation is

Dr. Accumulated Depreciation (001)

Cr. Accumulated Depreciation (002)

Revaluation

Revaluation is a process so as to reflect current market price of the Asset. The journal entry created by revaluing a fixed asset is as follows:

Revalue Accumulated Depreciation is enabled at the Book Controls level:

The amount of revaluation would be credited to Accumulated Depreciation and Revaluation reserve in the same proportion as the existing Accumulates Depreciation and Net Book value.

Dr. Asset Cost

      Cr. Accumulated Depreciation

      Cr. Revaluation Reserve

Revalue Accumulated Depreciation is disabled at the Book Controls level:

To the extend of the revaluation amount, the following journal entry would be passed.

Dr. Asset Cost

      Cr. Revaluation Reserve

Also the existing depreciation reserve would also be transferred to the Revaluation Reserve

Dr. Accumulated Depreciation

      Cr. Revaluation Reserve

Retirements

Oracle Assets passes the following journal entry for retirement.

If the retirement transaction resulted in a Gain, the journal entry passed would be.

Dr. Accumulated Depreciation

Dr. Proceeds of sale

Cr. Asset Cost

Cr. Gain / Loss

If the retirement transaction resulted in a Loss, the journal entry passed would be.

Dr. Accumulated Depreciation

Dr. Proceeds of sale

Dr. Gain / Loss

Cr. Asset Cost

Depreciation:

Running depreciation (as applicable to a particular asset) during the period end would pass a journal entry

Dr. Depreciation Expense

      Cr. Accumulated Depreciation