Oracle Purchasing and Payable

Purchasing and Payable

Tell me about P2P (procure to pay) Cycle verbally as well as accounting entries?

First you enter the Requisition in PO module. Supplier sends quotation reply of requisitions or RFQ. You can approve the quotation of a supplier after to record all information received from your supplier such as terms and conditions, shipment and price breaks.

Then you can go ahead for Purchase Agreement. Purchase Agreement has two types: first Blanket and Contract Purchase Agreement. You cans use blanket purchase agreement to communicate to those supplier that are negotiating pricing before actually releasing firm purchases. A blanket purchase agreement must have detailed information besides the header level information. A blanket purchase agreement contains lines for specific terms, quantity, promised date, need-by-date and prices.

You can create a contract purchase agreement with a supplier to agree on terms and conditions without entering into and agreement for specific items or services. A contract purchase agreement can support competitive solicitation through the RFQ process and then through the purchase releases because a contract purchase agreement has only header level information and no detailed information. Header level includes terms, currency Supplier and a supplier site. You can enter Purchase Order for confirms to purchasing services or goods. Purchase order has four types: Standard, Planned, Blanket and Contract.

Whenever you get goods or service that time you enter receipts in system. There are five types of receipts: manual receipts, express receipts, cascade receipts, unordered item receipts and substitute item receipts. That time accounting entry should be debited to Inventory Material Value and credited to Payable Clearing Account.

Whenever you get the invoice in account department, it enters in the system that time accounting entries should be debited Payable Clearing and credited to Payable. Then you make a payment to supplier that time accounting entries should be debited Payable liability and credited to cash clearing account. After reconciliations between cash management and bank, accounting should be debited to cash clearing account and credited to bank or cash account.

Accrual Accounting - Perpetual Accrual (On Receipt)

Enter purchase order (1)

When you enter a purchase order, accounts are created and stored with the purchase order distribution.  The accounts will eventually be used as a basis for creating accounting that is sent to the general ledger.  Creating a purchase order in and of itself generates no accounting that is sent to the general ledger.

Receive (2)

When you accrue on receipt, processing a receiving transaction automatically sends a receipt accrual to the general ledger.  The Receiving Inventory Account is debited (quantity x purchase order line unit price) and the Inventory AP Accrual account (uninvoiced receipts account) is credited the same amount.  Run the Journal Import process with a source of Purchasing to create unposted journals in the general ledger.

Deliver and cost (3)

After delivering to the final destination, the Receiving Inventory Account is cleared and the Material account is debited.  If you use standard costing, the Material account is debited with the standard cost of the item and any difference is charged to the Purchase Price Variance account.

Period end accrual (4)

When items are accrued on receipt, no period-end accrual is generated by the Receipt Accruals - Period-End process.  The receipt accrual is automatically generated when the receipt is processed.

Invoice and match (5)

Entering an invoice and matching creates a debit to the Inventory AP Accrual account to clear the liability for the uninvoiced receipt (you now have an invoice).  The credit is to the AP Liability account that defaults from the supplier site if the invoice unit price is the same as the purchase order line unit price.  Any difference is charged to the Invoice Price Variance account.  For items with destination type of Inventory, the Invoice Price Variance account will be the Invoice Price Variance account specified when you defined Inventory Information for your inventory organizations in the Other Accounts tab.  The AP Liability account is cleared when the invoice is paid.

Accounting for Mass Additions - Periodic Accrual (Period End)

Enter purchase order (1)

When you enter a purchase order, accounts are created and stored with the purchase order distribution.  The accounts will eventually be used as a basis for creating accounting that is sent to the general ledger.  Creating a purchase order in and of itself generates no accounting that is sent to the general ledger.

Receive (2)

For most expenses and asset purchases (other than inventory), receipt accruals are generally processed at period end, so no accounting is transferred to the general ledger at the time the receipt is processed.

Period end accrual (3)

If no invoice is received and matched to the purchase order at period end, the Receipt Accruals - Period End process will generate an accrual that is transferred to the GL Interface.  Run the Journal Import process to create unposted journals in the general ledger.

Reverse accrual (4)

Perpetual accruals (on receipt accruals) are reversed when the invoice entered in Payables is matched to the purchase order.  Periodic accruals (period end accruals) are reversed when a reversing journal is created and posted in the general ledger.

Invoice and match (5)

Entering an invoice and matching creates a debit to the Inventory AP Accrual account to clear the liability for the uninvoiced receipt (you now have an invoice).  The credit is to the AP Liability account that defaults from the supplier site if the invoice unit price is the same as the purchase order line unit price.  Any difference is charged to the Invoice Price Variance account.  For items with destination type of Expense, the Invoice Price Variance account will be the same as the charge account.  In the case of an asset that will be capitalized and depreciated in assets, the charge account is an asset clearing account associated with an asset category in Assets.  The AP Liability account is cleared when a payment is processed.

Post asset to Assets (6)

The Post Mass Additions process places the asset in service.  When the Create Journal Entries process is run in Assets, the charge account (the clearing account on the invoice distribution) is relieved and the cost account associated with the asset category is charged for the cost of the asset.

Enter invoice (1)

A standard, unmatched invoice entered into Payables will generate a credit to the AP Liability account and a debit to the charge account specified on the invoice distribution.  For expenses, this will be an income statement account; for assets that will be capitalized in Assets and depreciated, this account will be a balance sheet account (asset clearing account); for inventory received, the account will be the Inventory AP Accrual account.

Pl. describe the P2P process in terms

Procure to Pay Process

Demand

The procurement process generates and manages requests for the purchase of goods.  The demand for purchase items may be a one-time event or may recur in either predictable or random time intervals.

Source

The procurement sourcing process covers the business activities related to the search, qualification, and selection of suitable suppliers for requested goods and services.

Order

The procurement ordering process includes purchase order placement by the buying organization and purchase order execution by the supplying organization.

Receive

The receipt process acknowledges that a purchase order has been duly executed.  For orders of physical goods, it will typically include the receipt, inspection and delivery of the goods to inventory or to another designated location.  For orders of services, it will typically consist of a notification from the requester or the approving person that the service has been performed as agreed.

Invoice

The invoice process includes entering supplier and employee invoices.

Pay

The payment process consists of those activities involved in the payment for ordered goods and services.

Definitions of Purchasing Document

Blanket Purchase Agreement: It committed amounts for specific date range for service or goods.

Contract Purchase Agreement: It committed amount for certain period of unspecified goods.

Purchase Order types:

Standard: It is regular purchases order to represents your order to the supplier.

Planned: It is a purchase order before you actually order the goods and services.

Blanket: It is entering to against of blanket purchase agreement.

Contract: It is entering to against of contract purchase agreement.

Types of receipts:

Manual: It is for inputting data manually.

Express: It is a quicker method-if you have specified PO then requires fewer keystrokes.

Cascade: It is assists in the distributions of the quantity of a receipt from a single supplier to multiple shipments and distributions.

Unordered: When you are missing a PO or if you’re not sure to which PO the receipt should be matched against, you can enter this type receipt.

Substitute Item: If you do not have any information for the Order Information alternative region then you enter a receipt for substitute item.

Quotation: It is used for quotes from the supplier regarding prices, terms and conditions of items.

RFQ: It is used for soliciting quotes from the supplier regarding prices, terms and conditions of items.

Purchase Release: It is used for releases against other document types, there are two subtypes for this: Blanket and Schedule.

Entering Invoices Overview

You can manually enter supplier invoices in either the Invoice Workbench or the Quick Invoices window. You can match to purchase orders when entering these invoices.

Invoice Workbench

(Invoice Batches window, Invoices window, Distributions window, and the associated windows). Use the Invoice Workbench to enter any invoice directly into the Payables system. You use this instead of the Quick Invoices window when entering complex invoices or invoices that require online validation and defaulting. Also, use this window when entering an invoice that needs immediate action, such as payment.

Quick Invoices window

Use the Quick Invoices window for high–volume invoice entry for invoices that do not require extensive validation and defaults. After entering invoices in the Quick Invoices window, import them into Payables. Validation and defaulting occurs during import.

Creating Invoices Automatically

Recurring Invoices

You can set up your system to automatically create periodic invoices, for example, rent invoices.

RTS Invoices

If you use Return to Supplier feature in Oracle Purchasing, the system creates these debit memos directly in your Payables system.

Retroactive Price Adjustment Invoices.

If Oracle Purchasing users use the Retroactive Pricing of Purchase Orders feature, the system automatically creates Adjustment and PO Price Adjustment invoices.

Payables

1- AP_INVOICES_ALL

2- AP_INVOICE_DISTRIBUTIONS_ALL

3- AP_PAYMENT_SCHEDULES_ALL

4- AP_HOLDS_ALL

5- AP_AE_LINES_ALL

6- AP_AE_HEADERS_ALL

Pl. describes the setup of AP?

Setup steps unique to AP: Ledger Selection, Payment Terms, Invoices Tolerances, Invoice Approval Codes, Distributions Sets, Expense Report Templates, IT Regions, Define Banks, Automatic Payments, Special Calendars, Payable System Options, Payable Options, Financials Options, Profile Options and Open Accounting periods.  

There are many sets up that are unique to Oracle Payables’ implementation. The primary Ledger selection specifies the accounting structure, the functional currency, and the accounting calendar used by Payables. Payment terms define payment schedules and corresponding discounts. Invoice tolerances definitions control the amount of variance allowed between invoices, purchase orders, and receipts when matching is performed. Various codes are defined in Payables. Because invoice approval codes are used to apply or release invoice holds, they should be descriptive and meaningful. Many setups facilitate and speed up data entry, and distribution sets are predefined allocation structures that can be used to populate invoices with preassigned distributions. Expense report templates can be defined and created with commonly used expense items to populate expense report lines. Certain setups relate to tax reporting functionality.

In the financial options setup, you select a Ledger and an inventory organization. You also define accounting, budgetary control, encumbrance, payment, personnel, purchasing, VAT registration, and vendor options. To support payment processing, payment format and banks must be defined, and reporting formats can be defined to provide expense reports and aging reports that better meet the user’s business requirements. Special calendars can be created to further customize the recurring invoices, automatic withholding tax, and key indicators reports. In addition, users can define descriptive flexfields to capture additional data that was not previously captured in Oracle Payables.

Payables options control and set defaults for Payables functions. It should be noted that if the Automatic Offset feature in the Accounting region is enabled, the user cannot allow reconciliation accounting, enable withholding tax, or allow adjustments to paid invoices. In addition, the journal entries creation mode determines whether audit entries will be created for the liability, gain or loss, rounding, discount taken, and cash clearing journals. As in Purchasing, default values can be specified in these options regions. Certain default values will default based on a hierarchy. For example, the tax name will default by a user-defined hierarchical order.

How many types of Invoices?

There are Eleven types of invoices: Standard, Debit Memo, Credit Memo, Expense Report, PO Default, Prepayment (Temporary and Permanent), Quick-Match, Mixed, With-Holding, Interest, Retainage Release, Transportation Invoices and Three Special Type of invoices which generated automatically: Recurring, RTS, Retroactive Price Adjustment.

Standard

An invoice from a supplier representing an amount due for goods or services purchased. Standard invoices can be either matched to a purchase order or not matched.

Credit Memo

A memo from a supplier representing a credit amount toward goods or services.

Debit Memo

An invoice you enter to record a credit for a supplier who does not send you a credit memo.

Mixed

An invoice type you enter for matching to both purchase orders and invoices. You can enter either a positive or a negative amount for a Mixed invoice type.

Prepayment

A type of invoice you enter to pay an advance payment for expenses to a supplier or employee.

Expense Report

An invoice representing an amount due to an employee for business-related expenses.

Withholding Tax

An invoice you enter to remit taxes withheld to the appropriate tax authority.

Interest

If you allow interest invoices, payables will automatically calculate interest for overdue invoices and create interest invoices for selected suppliers.

QuickMatch

This invoice provides you with an alternative way to match an invoice to all PO shipments. To perform a QuickMatch, you must enter the PO number. The PO number defaults the supplier, the supplier number, the supplier site, and the currency. QuickMatch matches an invoice to all PO shipments, while a PO default match allows you to pick and choose.

Retainage Release

Invoices created for complex work and advance contract financing.

Transportation Invoices

Invoices from freight payment.

Creating Invoices Automatically

Recurring Invoices

You can set up your system to automatically create periodic invoices, for example, rent invoices.

RTS Invoices

If you use Return to Supplier feature in Oracle Purchasing, the system creates these debit memos directly in your Payables system.

Retroactive Price Adjustment Invoices.

If Oracle Purchasing users use the Retroactive Pricing of Purchase Orders feature, the system automatically creates Adjustment and PO Price Adjustment invoices.

Tell me about Prepayment / expense Report?

Expense Report is used for invoices that reimburse the employee’s expenses.

Prepayment used for to pay prepayment to suppliers, employees and Government Authorities. There are two types of prepayment: temporary for suppliers and employees, permanent for to pay deposit with government authorities.

Temporary prepayments can be applied to invoices or expense reports you receive. For example, you use a Temporary prepayment to pay a hotel a catering deposit. When the hotel’s invoice arrives, apply the prepayment to the invoice to reduce the invoice amount you pay. Permanent prepayments cannot be applied to invoices. For example, you use a Permanent prepayment to pay a lease deposit for which you do not expect to be invoiced.

Match Approval Level Options

The match approval level defaults to purchase order shipment lines when the purchase order is entered.  You can override the default on the purchase order shipment.  If you find that you are frequently overriding this value, change the default at the supplier site level. 

If an item is used on the PO, the match approval level will default from the item and will override the supplier site. If the Item match approval level for the Item = Receipt required, then it results in a 3-way match. If the Item match approval level for the Item = Inspection required, then it results in a 4-way match.

When quantities and prices exceed specific tolerances you define, the Payables Validation process will place a matching hold on the invoice.  You can configure matching holds so manual override is not possible in the Invoice Holds and Release Names window.

2-Way (Invoice to Purchase Order)

*        Quantity billed vs. quantity ordered on shipment line

*        Invoice unit price vs. purchase order line unit price

3-Way (Invoice to Purchase Order and Receipt)

*        2-Way match criteria AND

*        Quantity billed vs. quantity received

*        Item = Receipt Required

4-Way (Invoice to Purchase Order and Receipt and Inspection)

*        3-Way match criteria AND

*        Quantity billed vs. quantity accepted

Note:  Quantity accepted = (Quantity received - quantity rejected)

*        Item = Inspection Required

How many scenarios of matching invoices in AP?

When an invoice for the PO arrives in the payables department, the supplier invoice is entered into the system and PO shipments/distribution can then be matched to the supplier’s invoice. The matching method ensures you pay suppliers only for the items that you have agreed to purchase and at the price stated on the purchase order within the set tolerances.

Matching invoices to purchase orders by enforce two-way, three-way, and four-way matching. At the simplest level—known as two-way matching—matching compares invoice amount and quantity with the amount and quantity of the matched purchase order. The invoice can only be approved if the amount and quantity match to the purchase order within a predefined tolerance. In addition to requiring two-way matching, users can also enforce matching of the invoice amount and quantity to that received (three-way matching), and to that inspected (four-way matching).

QuickMatch provides you with an alternative way to match an invoice to all PO shipments. To perform a QuickMatch, you must enter the PO number. The PO number defaults the supplier, the supplier number, the supplier site, and the currency. QuickMatch matches an invoice to all PO shipments, while a PO default match allows you to pick and choose.

Purchase order shipment match

Based on the quantity invoiced, Payables prorates the match amount across all non-fully billed purchase order distributions associated with the purchase order shipments you match to.

Receipt match

Reasons to use match to receipt:

*        Matching to receipts allows you to pay only for goods you receive.

*        Any exchange rate variance that results from matching is likely to be smaller because the time between the receipt and invoice will probably be less than the time between the purchase order and invoice.

*        Matching an invoice for freight or miscellaneous charges to a material receipt is required for accurate costing data if you use periodic costing.

Note that you can also only pay for what you receive by using Match to PO and letting the invoice go on hold if the receipt is not in.

Purchase order distribution match

If you are billed for only a portion of a shipment, you may want to match at the distribution level to ensure you charge the correct account.  If you choose not to match to the distributions, Payables prorates the match amount across the available distributions for that shipment.

Price correction

You may want to record a price correction for a purchase order shipment if you receive an invoice from the supplier that is an adjustment to the unit price of an invoice you previously matched to that purchase order shipment. Price corrections adjust the unit price without adjusting the quantity billed on the purchase order. 

Reasons to use price correction:

*        You use a price correction when a supplier sends an invoice for a change in unit price for an invoice you have already matched to a purchase order. If you simply enter an invoice for a unit price increase or a credit/debit memo for a unit price decrease without using price correction, invoice price variances will not be accurate.

*        You can enter and match an invoice to record a price increase, or you can enter and match a credit memo or debit memo to record a price decrease.

*        Use a price correction to adjust the invoiced unit price of previously matched purchase order shipments, distributions, or receipts without adjusting the quantity billed.

Note:  Price corrections are very different from overriding the unit price when matching an invoice to a purchase order.  When you are entering an invoice and matching to a purchase order, you can override the unit price that defaults from the purchase order so it is the same as the unit price on your invoice.  You use price corrections only after the initial match.

Matching to Distributions for Assets

The charge account on the purchase order for an item that will be capitalized and depreciated is a balance sheet account and will be a clearing account associated with an asset category (like COMPUTER-PC) in Assets.  After matching, the asset clearing account will be on the distribution for the invoice.  When the asset is prepared and posted to Assets, the clearing account is cleared and the asset cost account associated with the asset category is charged for the cost of the asset.  Payables will transfer the asset clearing account to the general ledger and Assets will transfer the clearing account clearing entry and the asset cost entry.

Matching to Distributions for Expenses

The charge account on the purchase order for an item that will be expensed (for example, office supplies) is an income statement account.  After matching, the expense account is transferred to the invoice distribution if you are accruing at period end.  When accounting is transferred to the general ledger, the amount charged to the expense account can be reported on the income statement.

Matching to Distributions for Inventory

The charge account on the purchase order for an item that will be capitalized as inventory is a balance sheet account and will be a material clearing account associated with an inventory organization in Inventory.  After matching, the Inventory AP Accrual Account will be on the distribution for the invoice.  When the receipt is processed the AP Accrual Account (uninvoiced receipts account) is credited.  When booking the invoice and matching, the receipt is now invoiced and the balance in the AP Accrual Account must be cleared.  At receipt, Purchasing will transfer the accrual to the AP Accrual Account (a credit) and after matching, Payables will transfer the clearing entry to the AP Accrual Account as part of the Transfer Journals to GL process.

Multiple Organization Access Control

Oracle Payables leverages Oracle Applications' Multiple Organization Access Control feature. Multiple Organization Access Control (MOAC) lets you define multiple organizations and the relationships among them in a single installation of Oracle Applications. These organizations can be ledgers, business groups, legal entities, operating units, or inventory organizations.

Implement Multiple Organization Access Control

*        If you implement MOAC, you can enter invoices for multiple operating units without switching responsibilities. To enter an invoice for an operating unit, enter a value in the Operating Unit field of the Invoices window (part of the Invoice Workbench). Each invoice must be for a single OU, but you can enter multiple invoices for different OUs, without changing responsibilities.

*        Pay invoices for multiple operating units in a single pay run.

Set Up Multiple Organization Access Control

To set up MOAC, define the following profile options:

*        MO Security Profile. This option controls the list of operating units that a responsibility or user can access. So you would assign the Security Profile that you just created to this profile option. If you set the this option at the responsibility level, then all users using that responsibility will have access to only the operating units available in the security profile. If you set this option at the user level, then the user will have access to only those operating units, irrespective of the applications responsibility that they log into.

*        MO: Default Operating Unit. This option allows you to specify a default operating unit that will be the default when you open different subledger applications (Payables, Receivables, and so on) pages. Because users can access multiple operating units, you may want to set up a default one instead of forcing users to constantly have to choose one. With User Preferences, you can also specify a default operating unit at the user level. This profile option is optional.

*        MO: Operating Unit. This option provides backwards compatibility and supports products that do not use MOAC. If you specify a security profile for the MO: Security Profile, then those products that use MOAC will ignore this option.

New Payment Terminology in R12

Key concepts that are new to Payables in R12 include the following:

Document Payable. A document to be paid by the deploying company (Payer) and it may represent, for example, a Payables invoice or scheduled payment.

Pay Run/Payment Process Request. A pay run is a broad term, which describes the process by which a group of invoices is selected and processed for payment. It is roughly equivalent to the Release 11i concept of a payment batch. The term Pay Run is often used interchangeably with the term Payment Process Request. A payment process request is technically a request created by a source product for Oracle Payments payment services. The payment process request, which originates in the source product during the invoice selection process, contains one or more documents payable to be paid. During the payment process, the documents payable in the payment process request are built into payments.

Payee. The person or organization that is being paid, for example, the supplier, employee, or customer to whom the payment is made.

Payment Instruction. A payment instruction is a collection of payments, along with aggregate payment information, that is formatted. Depending on the setup, a payment instruction may be converted into a file to be printed onto checks or into a payment file that is transmitted to a payment system for further processing and disbursement.

Payment Process Profile. A payment process profile is a payment attribute assigned to documents payable, which specifies handling of the documents payable, payments, and payment instructions. Payment process profiles including specifications for payment instruction formatting and transmission.

Payment process profiles contain the following information:

*        payment instruction formatting information

*        transmission information

*        payment grouping

*        payment limits

*        payment sorting details

Payment Process Request Template. A blueprint that simplifies and expedites pay runs by preselecting pertinent payment data, such as general header information, payment selection criteria, payment attributes, processing instructions, and how validation failures are handled.

Payment Format. A set of rules that determine how a payment instruction or settlement batch is converted into a payment file, readable by a payment system. Payment formats are registered and maintained in Oracle XML Publisher.

Payment Method. A payment attribute on a document payable. The payment method indicates the medium by which the deploying company (first party payer) makes a payment to a supplier (third party payee). Examples of payment methods are checks printed in-house by the payer, checks outsourced to the bank for printing, and wires.

Open Interfaces

Use the following open interfaces to import data into Payables from other applications or third-party solutions:

*        Payables Open Interface

*        Payables Expense Report Open Interface

*        Payables PCard Open Interface

*        Payables Credit Card Open Interface

*        Payables Matching Open Interface

*        Payables Supplier Open Interface

*                    Payables Invoice Open Interface

Use the Payables Invoice Open Interface to load invoices from a variety of sources including invoices generated from the Pay on Receipt Autoinvoice process, EDI invoices generated by the e-Commerce Gateway, invoices from credit card and procurement card transactions and invoices from external systems.  You can load standard invoices as well as credit memos using the Payables Invoice Open Interface.  Once invoices are loaded, use the Payables Open Interface Import process to validate them and load them into Payables.

Payables Expense Report Open Interface

Accounts Payable teams can key paper invoices using the expense reports form or employees can submit their own expense reports using iExpenses.  Run the Payables Invoice Import process to validate expense report data and create expense reports in Payables.

Payables PCard Open Interface

You can streamline your procure-to-pay process by implementing a procurement card program.  Employees purchase items directly from suppliers using a credit card and then the credit card issuer sends transaction files directly to your company. You can import credit card transaction files from your card issuer directly into Payables helping you reduce transaction costs and eliminate low dollar value invoices.

etty cash is one of the process that used in Pakistan and even in other countries but Oracle Application does not have a Standard Feature to cater to this process.

When I say “does not” it means that there is no standard functionality of petty cash. Obviously Oracle has suggested its workaround.

I am writing or explaining my workaround for handling petty expense and payments made from petty cash.

According to my knowledge, I know two ways or workarounds to handle petty cash in Oracle Payables:

Workaround 1:

1. Create bank account named Petty Cash
2. Create a Supplier named Petty Cash Supplier.

Use the Cash Management Module to Reimburse your Petty Cash Bank Account from your actual bank account.

Use the Petty Cash Supplier for entering the invoice with expense accounts. You can use the multiple Supplier Sites if you have petty cash administration at different sites.

You can also use the petty cash bank account for Payments made using Cash method.

Workaround 2:

1. Create employee as a Petty Cash Supplier, give advance to that employee, and apply petty cash standard invoices.

In this case you cannot actually pay your Expense Report or Reimburse your Employee Expenses.

I use both of the above methods. But I personally suggest the first method. Though it may be a lengthy one but still it keeps details of every transaction and payment made using petty cash bank account.

Payables Credit Card Open Interface

Use SQL*Loader scripts to load credit card transactions for corporate credit (travel) cards into the open interface if you are using a credit card program.  Corporate credit (travel) cards are similar to procurement cards but are generally used for travel expenses.  After transactions are validated, you include them in expense reports you enter through the Self Service Web Applications.

The following predefined SQL*Loader control files come delivered with Oracle Applications:

*        American Express

*        Diner’s Club

*        GE Capital MasterCard

*        US Bank Visa

*                    Payables Matching Open Interface

*              Use SQL*Loader to load the required information into the purchasing interface tables. You will need to create a SQL*Loader control file to format the information you want to load. The file you write will vary greatly depending on the nature and format of the flat file you use.  You match invoices to purchase order shipments during invoice entry.

*                    Payables Supplier Open Interface

*              Use the Payables Supplier Open Interface to load supplier data from external systems.  You can load suppliers, supplier sites, and supplier contacts using the Payables Supplier Open Interfaces.  Once supplier data is loaded, use the Payables Supplier Open Interface Import process to validate them and load them into Payables.

Supplier - Accounting

Use the Supplier : Accounting page to define the default accounting information for your suppliers and supplier sites.

Liability

The Liability Account and description for a supplier site’s invoices. If you use the Multiple Organization Support feature, you can enter a value in this field only at the supplier site level.

Prepayment

The supplier default for this field is the Financials option for the Prepayment account. If you use the Multiple Organization Support feature, you can enter a value in this field only at the supplier site level.

Bills Payable

If you use bills payable (future dated payments), enter the account you want to use. The Financials option value defaults to new suppliers, and the supplier value defaults to new supplier sites. You can override these defaults. When Payables creates a future dated payment, it uses the future dated payment account from either the supplier site or the payment document, depending on which option you select in the Payment Accounting region of the Payables Options window.

If you relieve liability for future dated payments when the payment is issued, then use an asset account. If you relieve liability at clearing time, then use a liability account.

If you use the Multiple Organization Support feature, you can enter a value in this field only at the supplier site level.

Distribution Set

The default Distribution Set for all invoices entered for the supplier site. Distribution Sets are used to expedite entry of distribution lines on invoices.

*        Full distribution sets will automatically create distribution lines with both account numbers and currency amounts.

*        Skeleton distribution sets will automatically create distribution lines with only account numbers and you must provide the currency amounts.

Define additional Distribution Sets for the list of values in the Distribution Set window. If you use the Multiple Organization Support feature, you can enter a value in this field only at the supplier site level.

Invoice Workbench

The Invoice Workbench is a group of windows that you can use to enter complex invoices or invoices that require online validation and defaulting. Also, use the Invoice Workbench when entering an invoice that needs immediate action, such as payment.

The primary window in the Invoice Workbench is the Invoices window. The Invoices window is divided into the following regions:

*        Invoice Header

*        General

*        Lines

*        Holds

*        View Payments

*        Scheduled Payments

*        View Prepayment Applications

These regions are described in detail in this presentation.

From the Invoices window you can also access the other invoice-related features and windows that comprise the Invoice Workbench:

*        Actions. Opens the Invoice Actions window for a selected invoice(s) which you can use to perform actions such as validating, approving, cancelling, or printing.

*        Calculate Tax. Automatically generates the tax lines for the invoice based on the E-Business Tax setup.

*        Tax Details. Opens the Tax Lines Summary window, which displays the tax lines on the invoice.

*        Corrections. Opens the Corrections window, which allows you to enter a price, quantity, or amount correction.

*        Quick Match. Automatically matches the selected invoice to open, unbilled purchase order lines for the specified supplier.

*        Match. Allows you to start one of the following matches, based on the invoice you select. Select the invoice you want to match to from the poplist, then choose the Match button. If you enter a positive amount invoice, then Payables defaults either Purchase Order or Receipt, based on the Invoice Match option of the supplier site.

-          Purchase Order. Match a selected invoice to a purchase order.

-          Receipt. Match a selected invoice to a purchase order receipt.

-          Credit Memo. Match a selected credit/debit memo to an invoice.

*        All Distributions. Opens the Distributions window to view all distributions for a selected invoice.

*                    Distribution Sets

*              You can assign a default Distribution Set to a supplier site so Payables will use it for every invoice you enter for that supplier site. If you do not assign a default Distribution Set to a supplier site, you can always assign a Distribution Set to an invoice when you enter it.

*              For example, you can create a Distribution Set for an advertising supplier that allocates advertising expense on an invoice to four advertising departments.

*              Full Distribution Sets

*              Use Full Distribution Sets to create distributions with set percentage amounts, or use Skeleton Distribution Sets to create distributions with no set distribution amounts. For example, a Full Distribution Set for a rent invoice assigns 70% of the invoice amount to the Sales facility expense account and 30% to the Administration facility expense account.

*              Skeleton Distribution Sets

*              A Skeleton Distribution Set for the same invoice would create one distribution for the Sales facility expense account and one distribution for the Administration facility expense account, leaving the amounts zero. You could then enter amounts during invoice entry depending on variables such as that month’s headcount for each group.

*              If you enable and use a descriptive flexfield with your distribution set lines, the data in the flexfield will be copied to the invoice distributions created by the Distribution Set.

*              Importing Invoices with Distribution Sets

*              If you are importing invoices, enter a Distribution Set before you import the invoice record.

*              You can provide account information from only one of the following sources or the invoice will be rejected during import: Distribution Set, purchase order, Account field, allocation of a non–Item type line, or Projects information. Import will reject the invoice record if you use a Skeleton Distribution Set and use the Allocate feature for the same line.

*                    Invoice Distribution Types

*              Type

*              Select a distribution Type. Each invoice distribution will have one and only one distribution type. If you are using periodic costing and need to include the cost of freight and miscellaneous charges with a receipt, you must use the Allocation window to allocate those distributions to a distribution line created by the matching process.

*              In addition to the Item, Freight, Miscellaneous, and Tax types, described previously, you can also have the following distribution types.

*              Withholding

*              Records the amount of taxes withheld from an invoice.

*              Prepayment

*              Records the amount of a prepayment applied to an invoice.

*              Amount

*              The amount of the distribution.

Adjustment and PO Price Adjustment Invoices

The two types of adjustment invoices are:

PO Price Adjustment Invoice

This invoice is for the difference in price between the original invoice and the new purchase order price. PO price adjustment invoices can be matched to both purchase orders and invoices.

Adjustment Invoice

This invoice effectively reverses any outstanding regular Payables price corrections and PO Price Adjustment invoices. This is so the PO Price Adjustment document can be for only the price difference between the original invoice and the new PO price.

These adjustment invoices can be positive, negative, or zero amount. When the original invoice and its related adjustment documents are paid, the net effect is as if the original invoice had always had the new price. The supplier is paid the appropriate amount, and the accounting is adjusted accordingly.

You cannot manually enter these types of invoices, nor can you adjust or cancel them. You can view, report on, validate, account for, and pay them.

Invoice Import

Oracle Internet Expenses expense reports

Expense reports your employees enter using a Web browser.

Payables expense reports

Expense reports entered in the Payables Expense reports window by the Payables department.

Credit Card invoices

Invoices for employee credit card expenses. The credit card company sends you these invoices as a flat file.

EDI Invoices

Electronic invoices transferred from Oracle e–Commerce Gateway.

XML Invoices

Electronic invoices transferred from the Oracle XML Gateway. See: XML Invoices, Oracle Payables Implementation Guide.

Invoices from external systems

Invoices, such as invoices from legacy systems, loaded using SQL*Loader.

Oracle Property Manager invoices

Lease invoices transferred from Oracle Property Manager.

Oracle Assets lease payments

Lease payments transferred from Oracle Assets.

Invoice Workbench

The Invoice Workbench is a group of windows that you can use to enter complex invoices or invoices that require online validation and defaulting. Also, use the Invoice Workbench when entering an invoice that needs immediate action, such as payment.

The primary window in the Invoice Workbench is the Invoices window. The Invoices window is divided into the following regions:

*        Invoice Header

*        General

*        Lines

*        Holds

*        View Payments

*        Scheduled Payments

*        View Prepayment Applications

These regions are described in detail in this presentation.

From the Invoices window you can also access the other invoice-related features and windows that comprise the Invoice Workbench:

*        Actions. Opens the Invoice Actions window for a selected invoice(s) which you can use to perform actions such as validating, approving, cancelling, or printing.

*        Calculate Tax. Automatically generates the tax lines for the invoice based on the E-Business Tax setup.

*        Tax Details. Opens the Tax Lines Summary window, which displays the tax lines on the invoice.

*        Corrections. Opens the Corrections window, which allows you to enter a price, quantity, or amount correction.

*        Quick Match. Automatically matches the selected invoice to open, unbilled purchase order lines for the specified supplier.

*        Match. Allows you to start one of the following matches, based on the invoice you select. Select the invoice you want to match to from the poplist, then choose the Match button. If you enter a positive amount invoice, then Payables defaults either Purchase Order or Receipt, based on the Invoice Match option of the supplier site.

-          Purchase Order. Match a selected invoice to a purchase order.

-          Receipt. Match a selected invoice to a purchase order receipt.

-          Credit Memo. Match a selected credit/debit memo to an invoice.

*        All Distributions. Opens the Distributions window to view all distributions for a selected invoice.

Match Approval Level Options

The match approval level defaults to purchase order shipment lines when the purchase order is entered.  You can override the default on the purchase order shipment.  If you find that you are frequently overriding this value, change the default at the supplier site level. 

If an item is used on the PO, the match approval level will default from the item and will override the supplier site. If the Item match approval level for the Item = Receipt required, then it results in a 3-way match. If the Item match approval level for the Item = Inspection required, then it results in a 4-way match.

When quantities and prices exceed specific tolerances you define, the Payables Validation process will place a matching hold on the invoice.  You can configure matching holds so manual override is not possible in the Invoice Holds and Release Names window.

2-Way (Invoice to Purchase Order)

*        Quantity billed vs. quantity ordered on shipment line

*        Invoice unit price vs. purchase order line unit price

3-Way (Invoice to Purchase Order and Receipt)

*        2-Way match criteria AND

*        Quantity billed vs. quantity received

*        Item = Receipt Required

4-Way (Invoice to Purchase Order and Receipt and Inspection)

*        3-Way match criteria AND

*        Quantity billed vs. quantity accepted

Note:  Quantity accepted = (Quantity received - quantity rejected)

*        Item = Inspection Required

Recurring Invoice Template

With a recurring invoice template, you can do the following:

*        Specify the intervals in which invoices based on the recurring invoice template will be created.

*        Create up to two special one–time invoice amounts of a non–standard amount, such as a deposit or balloon payment.

*        Define recurring invoices to increase or decrease by a fixed percentage from period to period.

When Payables creates recurring invoices, the invoice date is the first date of the period in which the recurring invoice is created. The Terms Date depends on the Terms Date Basis setting at the supplier site, but is calculated differently than for regular invoices:

*        If the Terms Date Basis is set to System Date, then the Terms Date is the same date that the recurring invoice was created.

*        If the Terms Date Basis is set to anything else, then the Terms Date is the invoice date, which is the first day of the period in which the recurring invoice is created.

Special Calendar

You use the Special Calendar window to define periods that Payables uses for automatic withholding tax, recurring invoices, payment terms, and for the Key Indicators Report. For example, if you monitor staff productivity weekly, use this window to define weekly periods for the Key Indicators calendar type.

The Report Run display–only check box indicates that a Key Indicators Report has been run for this period. The check box is not applicable to Payment Terms, Withholding Tax, or Recurring Invoices calendar types.

Note: The periods you define in the Special Calendar window are completely separate from the periods you define in the Accounting Calendar window for your AP Accounting Periods.

How many Levels of Invoice Validation

System level validation

Manually submit the Payables Invoice Validation process or schedule it to run periodically from the Submit Request window. Submit the Payables Invoice Validation process right before you process payments to update the status on all invoices. Payables will use the Option parameter to select unvalidated invoices for validation.  Enter All to ensure you release any existing holds on invoices as well as place new holds. Otherwise, Invoice Validation reviews only those invoice distributions that were not already reviewed by Invoice Validation. Optionally, enter other criteria to submit Invoice Validation for specific groups of invoices.

Batch level validation

Submit Invoice Validation for one or more invoice batches from the Invoice Batches window. Batch level validation is only allowed if the Allow online validation Payables option is enabled also.

Invoice level (online) validation

If the Payables option to allow online validation is enabled, you can submit online validation for one or more individual invoices when an invoice must be validated and paid immediately. You can also validate related invoices for credit and debit memos by choosing Validate Related Invoices in the Actions window after you enter a credit or debit memo.

Invoice level (online) validation is only allowed if the Allow online validation Payables option is enabled also.

Validation and Approval

The order of the Invoice Validation process and Invoice Approval Workflow Program is based on the Approval Processing Sequence Payables option. For example, you might want to validate before you approve to create tax lines and distributions for your invoices.

Approval

You might want to enable the Require Validation Before Approval Payables option if your approvers need to review tax details before they approve an invoice.

Invoice Selection Criteria

An invoice must meet all of the following criteria to be processed:

1.   If the Require Validation Before Approval Payables option is enabled, or if the invoice was submitted by a Supplier using iSupplier Portal, then the invoice must be validated.

2.   The Approval field value in the Invoices window must be:

-          Required, if you submit the workflow program from the Submit Requests window

-          Anything except Initiated or Manually Approved, if you submit the workflow program from the Invoice Actions window

3. The invoice amount must equal the distribution total.

Approving Invoices at the Line Level

Line-level approval is the approval of one specific line or set of lines within an invoice, rather than approving the entire document. Approvers have access to the Notification Detail and Interactive Line Details pages to review the invoice details. The pages display only the appropriate level of information for the approver to view. That is, approvers view only the information that they can approve or reject. Furthermore, no additional login or privileges are required for the approver to approve. The self-service login that an approver uses to view the notifications is sufficient to review the invoice information.

The system does not initiate document level approval until all lines have been approved. If an approver rejects one line, the remaining line level approvals continue to go through approval. This allows the continuation of the line level approval process while the rejected line is being resolved. However, the system does not continue to document level approvals unless all lines are approved.

Tell me about Invoice Approval Workflow

The workflow then sequentially asks each approver in the approval list to approve invoices online. For example, you can define a rule so invoices over $100,000 require CFO approval and then CEO approval.

If you use Invoice Approval Workflow, then every invoice that requires approval must be approved before you can pay it. Payables indicates that an invoice requires approval by setting the value in the Approval status field in the Invoices window to Required.

When you use this feature, all invoices require approval, with the following exceptions. Payables sets the Approval status of the following invoices to Not Required:

*        expense reports imported through the Expense Report Export program (because these expense reports have already been through an approval process)

*        recurring invoices if the recurring invoice template did not have the Approval Workflow Required option enabled (because recurring invoices are often approved in advance)

*        invoices that existed before you enabled the feature

*        invoices that completed the Invoice Approval Workflow process and the Invoice Approval Workflow process determined that according to the rules set up in Oracle Approvals Management that no one needs to approve the invoice  

You can submit the Invoice Approval Workflow for an invoice either from the Invoice Actions window, or from the Submit Requests window.

System Setup

Notification from Approvers

Approvers can approve or reject the invoice.

*        If an approver approves the invoice, then the invoice goes to the next person in the approver list until all required people approve the invoice.

*        If an approver rejects the invoice, then the workflow program ends.

*        If an approver does not respond within the time you specify, then Workflow will request approval from that person’s manager.

If an approver rejects an invoice, then you can perform one of the following actions from the Invoice Actions window:

*        Use the Force Approval option to manually approve the invoice

*        Use the Initiate Approval option to resubmit the invoice to the Invoice Approval Workflow after correcting any issue that caused the approver to reject the invoice

*        Use the Cancel Invoice option to cancel the invoice

Suggestion: We recommend that you schedule the Invoice Approval Status Report to run nightly so you can closely monitor your rejected invoices.

You can review the approval status of an invoice that has started the Invoice Approval Workflow in the following ways:

*        Invoice Approval History window

*        Invoice Approval Status Report

Invoice Approval Workflow Program

When you start this program, it updates the approval status of the invoice to Initiated. The invoice is then placed in the WF_DEFERRED queue.

The next time the Workflow Agent Listener runs, the system initiates Invoice Approval Workflow for the invoice.

Prerequisites:

*        Define all your invoice approval rules in Oracle Approvals Management (OAM).

*        Set up, and optionally customize, the Invoice Approval Workflow.

*        Enable the Use Invoice Approval Workflow Payables option.

*        Each invoice meets all selection criteria.

*        In the Submit Requests window your system administrator should schedule the Workflow Agent Listener to run regularly.

Invoice Approval History

(N) Invoices > Inquiry  (M)  Reports > View Invoice Approval History

This window shows you all the approvers for an invoice in the order that the workflow requests approval from them. You can see who has reviewed the invoice, whether the approver approved or rejected it, the response date, what the invoice amount was when the approver reviewed it, and any comments the approver entered. You also see who the pending approver is and who the planned approvers are. If an invoice is force approved, then you see the username of the person who approved the invoice.

Invoice Approval History Window Reference

*        Action Date. Date that the approval action occurred. For example, the date an approver rejected the invoice.

*        Action. The window shows the action associated with each approver.

-          Approved. The invoice was approved by this approver.

-          Rejected. The invoice was rejected by this approver.

-          Pending. The invoice is in this approver’s queue.

-          Future. The invoice is not yet in the approval queue of the approver.

-          Manually Approved. An accounts payable processor manually approved the invoice by using the Force Approval feature.

*        Approver. Name of the approver who is assigned to perform an action in response to a request for approval notification or escalation notification. You set up approvers in Oracle Approvals Management (OAM). If an invoice was force approved, this field shows the username of the accounts payable processor who force approved the invoice.

*        Amount Approved. Invoice total at the time of approval or rejection. This field serves as an audit trail because the invoice amount can change between approvers.

*        Comments. As an invoice goes through the Invoice Approval Workflow process, the approver can enter comments about the approved or rejected invoice. If the invoice is force approved then this field is blank.

*                    Tell me about the Reports in AP

*              Batch Control Report by Batch Name

*              Lists invoice batches in order of batch name and batch date. Also sorts by entry name.

*              Batch Control Report by Entered By

*              Lists invoice batches in order of entry person. Also sorts by batch name.

*              Credit Memo Matching Report

*              This report lists credit memos and debit memos that match the supplier and date parameters you specify.  The report also lists the total of the distribution line amounts of each credit memo in your entered currency and your functional currency.

*              Invoice Aging Report

*              Use this report to view your unpaid invoices. This report provides information about invoice payments due within four time periods you specify in the Aging Periods window.  This report does not included cancelled invoices.

*              Invoice Audit Listing by Voucher Number

*              Use this report to review your invoices with assigned sequential voucher numbers. Either you or Payables can assign a unique, sequential number to an invoice during invoice entry, if you enable the Sequential Numbering profile option.

*              Invoice Audit Listing

*              Use the Invoice Audit Listing to audit invoices for duplicates. You should audit invoices periodically to ensure control of invoice payments. You can sort this listing in six different ways. You can also use this report to obtain a listing of your invoices by invoice type.

*              Invoice Audit Report

*              Use the Invoice Audit Report to audit invoices for duplicates. The report lists invoices that appear as potential duplicates according to several criteria. One criterion you specify is the number of characters in the invoice number which two or more invoices have in common. The report lists invoices that meet this criterion and have the same invoice amount, the same invoice date, and the same supplier.  You can limit the search by checking for duplicate invoices within a time period you specify.  Payables sorts the report alphabetically by supplier name, and lists possible duplicates together on consecutive lines.

*              Invoice History Report

*              The Invoice History Report is needed to justify the balance for a given range of invoices. It helps you to quickly identify and review a detailed list of all activities pertaining to a specific invoice including all payments, gain/loss, credit/debit memos, and discounts. The balance of the invoices is then summed for each supplier site, for each supplier, and for the entire report.

*              Invoice on Hold Report

*              Use the Invoice on Hold Report to review detailed information about invoices on hold. You can submit the Invoice Validation process before submitting this report to obtain the most up-to-date hold information.  To obtain additional detail for invoices on matching hold, you can submit the Matching Hold Detail Report.

*              Invoice Register

*              Use the Invoice Register to review detailed information about invoices. You can also use this report to view the offsetting liability accounts that Payables creates for each invoice distribution when you validate an invoice.  Payables orders the report by invoice currency and, if you use batch control, the invoice batch name then by supplier name and invoice number.

*              Matching Detail Report

*              Use this report to see the detail of how an invoice, purchase order, or receipt was matched. This report is especially helpful when an invoice is on hold and you are trying determine why the hold was placed.

*              Matching Hold Detail Report

*              Use the Matching Hold Detail Report to review detailed accounts payable and purchasing information for invoices with matching holds and matching hold releases. You can print this report before initiating a payment batch to determine whether to manually release any invoices for payment.

*              Use this report to review recurring invoice templates you defined during a specific time period. You can review this report to determine the amount you have authorized for a recurring invoice template, how much you have released, and the next amount you have scheduled.

*              Matching Hold Agent Notice

*              Use the Matching Hold Agent Notice to print a notice informing a purchasing agent of any matching holds due to a variance between an invoice and the agent’s purchase order. When you submit this report, Payables prints a notice to each purchasing agent who has issued a purchase order that has a variance with its matched invoice.

*              Print Invoice Notice

*              Generate a standard invoice notice to send to a supplier to inform them about one or more invoices you have entered. For credit/debit memos, the notice informs the supplier of outstanding credit or debit memos that you will apply to future invoices.  You can generate this report from either the Invoices window or the Submit Requests window.  You can use Reports to change the boilerplate text.

*              Supplier Paid Invoice History

*              You can submit the Supplier Paid Invoice History Report by supplier or supplier type to review payment history, discounts taken, and frequency of partial payments.

*              Matching Holds by Buyer

*              View matching holds placed on invoices by buyer associated with the purchase order.

*                    Reports

*              Receiving Hold Requestor Notice

*              Use the Receiving Hold Requestor Notice to print a notice informing a requestor of an invoice hold because the requestor has not acknowledged the receipt of invoiced items.

*              Distribution Set Listing

*              Use the Distribution Set Listing to review a complete list of all the Distribution Sets you have defined. Distribution Sets simplify and speed invoice entry by automatically generating invoice distributions for invoices that have assigned Distribution Sets.

Pl. Describe the new terms in R12 Payables

Key concepts that are new to Payables in R12 include the following:

Document Payable. A document to be paid by the deploying company (Payer). It may represent, for example, a Payables invoice or scheduled payment.

Pay Run/Payment Process Request. A pay run is a broad term, which describes the process by which a group of invoices is selected and processed for payment. It is roughly equivalent to the Release 11i concept of a payment batch. The term Pay Run is often used interchangeably with the term Payment Process Request. A payment process request is technically a request created by a source product for Oracle Payments payment services. The payment process request, which originates in the source product during the invoice selection process, contains one or more documents payable to be paid. During the payment process, the documents payable in the payment process request are built into payments.

Payee. The person or organization that is being paid. For example, the supplier, employee, or customer to whom the payment is made.

Payment Instruction. A payment instruction is a collection of payments, along with aggregate payment information, that is formatted. Depending on the setup, a payment instruction may be converted into a file to be printed onto checks or into a payment file that is transmitted to a payment system for further processing and disbursement.

Payment Process Profile. A payment process profile is a payment attribute assigned to documents payable, which specifies handling of the documents payable, payments, and payment instructions. Payment process profiles including specifications for payment instruction formatting and transmission.

Payment process profiles contain the following information:

*        payment instruction formatting information

*        transmission information

*        payment grouping

*        payment limits

*        payment sorting details

Payment Process Request Template. A blueprint that simplifies and expedites pay runs by preselecting pertinent payment data, such as general header information, payment selection criteria, payment attributes, processing instructions, and how validation failures are handled.

Payment Format. A set of rules that determine how a payment instruction or settlement batch is converted into a payment file, readable by a payment system. Payment formats are registered and maintained in Oracle XML Publisher.

Payment Method. A payment attribute on a document payable. The payment method indicates the medium by which the deploying company (first party payer) makes a payment to a supplier (third party payee). Examples of payment methods are checks printed in-house by the payer, checks outsourced to the bank for printing, and wires.

Using the Payments Manager

Using the Payments Manager, you can complete a pay run from start to finish. A pay run is the process by which a group of invoices is selected and processed for payment.

Note: A pay run is roughly equivalent to the Release 11i concept of a payment batch.

The Payments Manager enables you to perform the following payment actions:

*        Create payment process request templates by specifying invoice selection criteria.

*        Use templates to automatically select invoices to pay that meet the criteria for payment.

*        Schedule pay runs.

*        Modify invoice selection and payment amounts.

*        Automatically submit invoices for processing and payment by scheduling payment process requests.

*        Initiate payment instructions.

*        View the status of payments.

*        Void or record stop payments.

Seeded Payment Methods

These payment methods are seeded, but deploying companies can create their own payment methods.

Check. A paper check is printed and used as:

*        one payment in a group of multiple payments

*        a Quick payment

*        a Manual payment

Outsourced check. This payment method is used to transmit payment information to an external party, such as your bank, that will print checks on your behalf.

Electronic. You use the Electronic payment method to create instructions for your bank to make payment to a supplier bank account. Typically, this communication is an electronic file that instructs your disbursement bank to pay your suppliers, and is in the specific format that your bank requires. Validations ensure that you have recorded supplier bank account information when you use the Electronic payment method.

Wire. You can use the Wire payment method to manually record payment when you have used a process outside of your Oracle Payables system to instruct your disbursement bank to pay a supplier.

Payables does not require supplier bank account information when you use the Wire payment method. When you define payment documents for these payments, Oracle recommends you use the Recorded disbursement type because you are simply recording a payment made outside of the system. Note: It is recommended that you record the transaction with a Manual payment.

The system allows you to use any disbursement type. For example, some users who regularly record Wire payments for multiple suppliers use payment documents with the Computer Generated disbursement type, create an electronic pay run, and then delete the resulting electronic file.

Bank Account Model

Payables leverages Oracle Trading Community Architecture and Oracle Cash Management to set up the bank accounts that you use to do business (internal bank accounts). Banks and Bank Branches are created as parties in Trading Community Architecture via the user interface in Oracle Cash Management. Bank Accounts are defined in Oracle Cash Management. Each bank can have multiple branches and each branch can have multiple accounts.

When you enable a bank account for use with Payables, you can associate the account with multiple payment documents.

When you set up your suppliers in Oracle iSupplier, you can also set up supplier bank accounts (external bank accounts).

Multiple Currency Payments. If you have enabled the Use Multiple Currencies Payables option and you want to use this bank account to pay invoices entered in multiple currencies, enable this option.

Pooled Account. If you use Automatic Offsets and you want to associate multiple companies with this bank account, then enable this option.  When you enable the Automatic Offsets Payables option, Payables creates one offsetting liability distribution for each invoice distribution.  If you pay an invoice from a pooled bank account, then when Payables accounts for the invoice payment, Payables creates one corresponding cash accounting entry for each liability distribution.

*        In addition, Payables builds the cash account based on the Cash Account defined for the bank account and the account segments of the liability lines.

*        If you do not use a pooled account, then when the payment is accounted, a single accounting entry is created for the Cash account, using the Cash Account that is defined for the bank account without modifying any account segments.

*                    Defining Payment Documents

*              To define payments documents:

*        1.         Query the bank account.

*        2.         Click the Manage Payment Documents button.

*        3.         Click Create.

*        4.         In the Name field, enter a name for the payment documents.

*        5.         In the Paper Stock Type field, select Blank Stock for non-numbered check stock or Prenumbered Stock from the drop-down list.

*        6.         If your check stock has an attached remittance stub, select the Attached Remittance Stub check box.

*        7.         If your check stock has an attached remittance stub, specify the number of lines per remittance stub in the Number of Lines per Remittance Stub field.

*        8.         In the Number of Setup Documents field, specify the number of checks you want to allow for testing check stock setup.

*        9.         In the Format field, select a check format from the list of values.

*        10.       In the Payment Document Category field, select the type of payment document from the list of values.

*        11.       If your check stock is prenumbered, enter the first and last document numbers in the fields under the Document Numbers region.

*        12.       If your organization uses a company checkbook, enter the appropriate information in the Checkbooks region.

Manual Payment Overview

When you create a payment outside of Payables, such as a typed check or wire transfer, you can record the payment within Payables and update the invoice or invoices that you paid.

With a Manual payment, you can override some payment controls of Payables. You can record a single Manual payment for multiple Pay Alone invoices. You can record payment for invoices that are associated with any payment method except Electronic. You can also pay an invoice for a supplier that has the Hold All Payments option enabled.

Prerequisites for processing Manual payments in Payables are:

*        Create the payment outside of Payables.

*        Each invoice you paid must be validated, uncanceled, without holds and must have the same currency as the payment.

Creating Manual Payments

*              When you create a payment outside of Payables by typing a check or performing a wire transfer, you can record the payment within Payables and update the invoices that you paid. You can also use this method to pay invoices with the Clearing payment method.

*              Note: A Manual payment is typically used to record a wire transfer. However, you can also use pay runs and Quick payments.

Recording a Manual Payment

Payables Responsibility

(N) Payments > Entry > Payments

1. In the Payments window, select Manual in the Type field.

2. Enter a Trading Partner. The Supplier Number is automatically displayed. If there are multiple Supplier Sites, select the appropriate site from the list.

3. Enter the Payment Date. The date must be in an open or future period. You can only predate a computer generated payment if the Allow Pre-Date option is enabled in the Single Payment region of the Payment tab within the Payables Options window.

4. Enter the Bank Account from which you want to make the payment.

5. Select a Payment Method.

6. If Printed is selected as the Payment Process Profile, select the type of Payment Document.

7. Select a Payment Process Profile.

8. If you enabled the Allow Remit-to Account Override option in the Invoice tab of the Payables Options window, then you can select a different, active Remit-To account. The list of values includes bank accounts assigned to the supplier that have the same payment currency.

9. If the Bills Payable payment method is selected, enter a Maturity Date.

10. Select a Rate Type.

11. If necessary, enter or adjust other information:

*        If you created the payment for an address different from the supplier site and the Allow Address Change option is enabled in the Single Payment region within the Payment tab of the Payables Options window, adjust the address. For example, you may need to send an expense check to a consultant working at a site away from home.

*        If you record voucher numbers either manually or using Sequential Numbering, enter or review voucher information.

*        If the payment currency was different from your functional currency, enter exchange rate information.

12. Choose Enter/Adjust Invoices to navigate to the Select Invoices window. Select the invoices you paid. The sum of the invoices must equal the payment Amount you entered. Optionally click the Invoice Overview button to see detailed information about an invoice.

13. Save your work.  Payables records your payment and updates the invoices as paid. If you have selected the wrong invoice, you can select the invoice, and then click the Reverse Payment button. This automatically creates a reversal, which disassociates the invoice from the Manual payment. You can now select the correct Invoice.

Initiating Manual Payments from the Invoice Workbench

In the Invoice Workbench, you can initiate Manual payment of one or more invoices or one or more scheduled payments.  You do this by selecting the invoices you want to pay manually, clicking the Actions button and selecting the Pay in Full option to navigate to the Payments window.  You then select Manual as the Payment Type. Payables automatically enters most of the payment information for you (such as payment amount and supplier/site name), and you skip the invoice selection step you would perform if you were to initiate the Manual payment from the Payment Workbench (Payments window).

Overriding Payment Controls

With a Manual payment, you can override some payment controls. You can:

*        record a single payment for multiple Pay Alone invoices

*        record payment for invoices that are associated with any Payment Method type, except Electronic

*        pay an invoice for a supplier that has the Hold All Payments option enabled

Future Dated Manual Payments

For future dated Manual payments, if the Payables option Use Future Dated Payment Account is set to Supplier Site, then you can select invoices for payment only if the supplier site Future Dated Payment Account is the same as that of the supplier site in the payment header.

Withholding Taxes

If you withhold taxes at payment time, Payables does not automatically withhold taxes if you pay with a Manual payment.

Prerequisites

*        Create the payment outside of Oracle Payables.

*        Each invoice you want to pay must be validated, uncanceled, and without holds.

*        If you use Invoice Approval Workflow, then each invoice that requires approval must be approved before you can pay it.

*        Each invoice must have either the same currency as the payment or use an associated fixed-rate currency.

*        The bank account must have at least one payment document.

*        The payment method is not electronic.

*        For future dated payments, if the Payables option Use Future Dated Payment Account is set to Supplier Site, then you can select invoices for payment only if the supplier site Future Dated Payment Account is the same as that of the supplier site in the payment header

Creating Quick Payments

You can create and print a computer generated payment to pay a supplier for one or more invoices. You can also create a check, save it, then print it later.

When you create a quick payment, you can select an invoice regardless of the payments’ terms and due date. For example, you can create a Quick payment for an invoice that is not yet due.

Prerequisites

*        Invoices must be validated, uncanceled, and without holds.

*        If you are creating an electronic payment, you must assign supplier banks to your supplier.

Creating a Quick Payment

Payables Responsibility

(N) Payments > Entry > Payments

1.   In the Payments window, if you have access to more than one Operating Unit, select the appropriate operating unit, otherwise the default operating unit is automatically entered.

2.   Enter a Trading Partner. The Supplier Number is automatically displayed. If there are multiple Supplier Sites, select the appropriate site from the list.

3.   Enter the Payment document Date. The date must be in an open or future period. You can only predate a computer generated payment if the Allow Pre-Date option is enabled in the Single Payment region of the Payment tab within the Payables Options window.

4.   Enter the Bank Account from which you want to make the payment.

5.   Select a Payment Method.

6.   If Printed is selected as the Payment Process Profile, select the type of Payment Document.

7.   Select a Payment Process Profile.

8.   If you have enabled the Allow Remit-To Account Override option in the Invoice tab of the Payables Options window, then you can select a different, active Remit-To account. The list of values includes bank accounts assigned to the supplier that have the same payment currency.

Important: The system ensures that Quick payments cannot be created for payment to inactive bank accounts.

9.   Enter a Maturity Date if the Bills Payable payment method is selected.

10. Select a Rate Type.

11. Click the Enter/Adjust Invoices button to navigate to the Select Invoices window. Select the invoices you want to pay.

12. Optionally click the Invoice Overview button to review more information about an invoice.

13. Save your work. If any invoices are subject to withholding tax, a message is displayed. You can choose to proceed, change your selection, or cancel the process. If applicable, any Japanese bank charges are then calculated.

Formatting and optionally printing the Check

*        To format and print, first verify the payment document is in your printer, then select Print Now, optionally change the printer name, and choose OK.

*        To format only and print the check later, select Format and choose OK. When you are ready to print, print from the Submit Requests window. You can use the Print Now option in the Actions window to print only if you print immediately after formatting.

Quick Payment Restrictions

*        NUMBER OF INVOICES. You can only pay as many invoices as you defined for the remittance advice of the payment document.

*        SAME SUPPLIER SITE. You can only select invoices that have the same supplier site as the payment supplier site you enter. You can, however, change the payment mailing address if the Allow Address Change option is enabled in the Single Payment region of the Payment tab of the Payables Options window.

*        PAY ALONE INVOICES. The system adjusts the list of values to ensure that you don't pay a Pay Alone invoice when you pay multiple invoices. If you have selected an invoice for payment and then select more invoices for payment, then Payables does not include Pay Alone invoices on this list of values. If you select a Pay Alone invoice for Payment, you cannot select more invoices.

*        PAYING IN A FOREIGN CURRENCY. You must pay in the same currency as the invoice. You can enter and pay a foreign currency invoice only if the Use Multiple Currencies option is enabled in the Currency tab of the Payables Options window, and you have defined a multi-currency or foreign currency denominated bank account.

*        CANNOT STOP FORMATTED QUICK PAYMENTS. You cannot stop a Quick Payment before it has been formatted.

Processing Stop Payments for Single Payments in the Payment Workbench

(N) Payments > Entry > Payments > Payments window

After you call your bank to initiate a stop payment on a payment document, you can record the stop payment status. You can void the payment to reverse the accounting and payment records (assuming the bank has confirmed that the payment has not cleared), or you can release the stop payment to reset the payment status to negotiable (assuming the bank has notified you that the payment has cleared or the supplier has contacted you that they located the payment document). 

You can review all current stop payments in the Stop Payments Report. You can query all payments with a status of Stop Initiated by selecting that status in the Find Payments window and then selecting the Find button.

Stopping a Payment

*        Contact bank and request stop payment.

*        Find the payment online. In the Payments window, select the payment and choose the Actions button.

*        In the Payment Actions window, select Initiate Stop.

*        Choose the OK button to update the payment status to Stop Initiated.

Releasing a Stop on a Payment

*        Find the payment online. In the Payments window, select the payment and choose the Actions button.

*        In the Payment Actions window, select Release Stop.

*        Choose the OK button to release the stop on the payment and reset the status to Negotiable.

Stop Payment Restrictions

*        PREPAYMENTS. You cannot initiate a stop payment on a payment document that pays a prepayment that you have applied to an invoice. You must first unapply any prepayments, and then you can stop payment.

*        QUICK PAYMENTS. You cannot initiate a stop payment on a Quick Payment that has been formatted.

Voiding Single Payments in the Payment Workbench

(N) Payments > Entry > Payments > Payments window

When you void a payment, Payables automatically reverses the accounting associated with the payment. The status of the paid invoices is also reset to Unpaid or Cancelled depending on the Invoice Action you select when you void the payment.  Payable also reverses any realized gains or losses on foreign currency invoices recorded as paid by the payment.

When you void a payment, you can select the action you want Payables to take on the invoices paid by the void payment. You can choose to:

*        place the invoices on hold

*        cancel the invoices

*        do nothing with the invoices, thereby leaving them available for payment

Note: Since you cannot reverse a void on a void payment, you should have the payment you want to void in your possession or proof that it has not cleared the bank or has been destroyed before you record it as voided. You may also want to review the invoices paid by that payment before you void it, to ensure that you are voiding the correct payment. You can review these invoices in the Invoice Workbench.

Prerequisites

*        Call your bank to initiate a stop payment if the payment has been sent to an employee or supplier. 

*        Wait until you get confirmation of the stop payment before you void the payment (optional but recommended).

Voiding a Payment

Find the payment online, and from the Payments window, select the payment and choose the Actions button. In the Payment Actions window, select Void. Review and optionally change the void Date and the GL Date you want Payables to use for the accounting distributions.

*        If you want to change the status of the related invoices to Unpaid, select None for the Invoice Action. The invoices will be available for payment on a new payment.

*        If you want to apply a hold to the related invoices, select Hold for the Invoice Action and select a Hold Name in the Hold window. Payables voids the payment, resets the status of the related invoices to Unpaid, and applies the hold you selected to the related invoices.

*        If you want to cancel all related invoices and reset their Amounts to zero, select Cancel for the Invoice Action. Payables voids the payment and cancels the related invoices.

Voiding and Reissuing Quick Payments

You can:

*        void a Quick payment and automatically reissue payment for the same invoices

*        void the original payment and reissue a new Quick payment

Prerequisites

Enable the Allow Void and Reissue option in the Single Payment region of the Payment tab within the Payables Options window. To void and reissue a Quick payment:

*        Load and properly align your payment document in the printer.

*        Find the Quick payment online, and from the Payments window select the payment and choose the Actions button.

*        In the Payment Actions window, select Reissue. Enter the Payment Date and  confirm the New Check Number. Payables automatically selects Void for you. Review and optionally update the void dates. Payables voids the selected Quick payment and creates a new Quick payment to pay the invoices.

Restrictions

INVOICES PAID BY ANOTHER PAYMENT. When you void a payment, you cannot cancel a related invoice if it was partially paid by a second payment. Instead, when you choose Cancel Invoice, the system applies an ”Invoice Cancel” hold to the invoice for your reference. You can release the hold manually in the Invoice Holds window.

CANCELLING ASSOCIATED INVOICES. If you attempt to cancel an invoice that has been partially paid by another payment by using the Cancel Invoice Action, instead of cancelling the invoice, Payables applies an Invoice Cancel hold to the invoice. This hold is manually releasable.

CLEARED PAYMENTS. You cannot void a payment that the bank has already cleared.

PREPAYMENTS. You cannot void payment on a payment document that pays a prepayment that you have applied to an invoice. You must first unapply any prepayments, and then you can void the payment.

Setting Up Bills Payable

The following setups must be done to use bills payable in Payables.

Funds Disbursement Payment Method Setup

Oracle Payments Payment Administrator responsibility

(N) Oracle Payments Setup > Funds Disbursement Setup > Click Go To Task icon for Payment Methods > Payment Methods page

1.   Click the Create button. The Create Payment Method: General page appears.

2.   In the Bills Payable region, select the Use Payment Method to Issue Bills Payable check box.  When you enable this check box, the payment method is used only for creating bills payable.

3.   In the Maturity Date Override field, specify the number of days to add to the payment date to determine the maturity date.

Note: Payments created with a bills payable payment method will have a maturity date that is based on the earliest available discount or due date when the payment is created. You can optionally override this calculation by entering a value for the number of days in the Maturity Date Override field. The maturity date is then calculated by adding that number of days to the payment date.

Payment Process Profile Setup

Oracle Payments Payment Administrator responsibility

(N) Oracle Payments Setup > Funds Disbursement Setup > Click Go To Task icon for Payment Process Profile > Payment Process Profiles page

To ensure that a payment instruction contains only bills payable:

1.   Click the Create button. The Create Payment Process Profile page appears.

2.   In the Payment Grouping region, select the Bills Payable check box so only bills payable will be grouped into a single payment instruction.

Prepayments Overview

A supplier might send an invoice that references a prepayment. If a supplier reduces the invoice amount by the amount of the prepayment and associated tax, you can use the Prepayment on Invoice feature to enter the invoice.

You can enter two types of prepayments: Temporary and Permanent.

Temporary Prepayments

Temporary prepayments can be applied to invoices or expense reports you receive. For example, you use a Temporary prepayment to pay a hotel a catering deposit. When the hotel’s invoice arrives, apply the prepayment to the invoice to reduce the invoice amount you pay.

Permanent Prepayments

Permanent prepayments cannot be applied to invoices. For example, you use a Permanent prepayment to pay a lease deposit for which you do not expect to be invoiced.

Applying Prepayments to Invoices and Expense Reports

Pay a prepayment just as you would any other invoice. However, you cannot partially pay a prepayment; you must fully pay it. You must fully pay a prepayment before you can apply the prepayment to an invoice.

If you entered the prepayment as a Permanent type and want to apply it, you can query the prepayment in the Invoices window and change the Prepayment Type to Temporary.

If you use Automatic Offsets then your setting for the Prevent Prepayment Application Across Balancing Segments Payables option controls whether you can apply a prepayment to an invoice or expense report with a different balancing segment.

Reconciling Payments with Cash Management

If you enable the Account for Payment When Payment Clears option in the Payables Options window, Accounting Option tab, the following accounting events generate reconciliation accounting entries when you submit the Create Accounting process:

*        the delay in the bank clearing of payments from the time of issuance to the time of reconciliation

*        differences between the original payment amount and the cleared payment amount due to exchange rate fluctuations, bank charges, or bank errors

*        reconciled payments

*        unreconciled payments

Important: You can reconcile foreign currency payments that have no exchange rates. However, Oracle Subledger Accounting will not create reconciliation accounting entries. If you enter the exchange rate in the GL Daily Rates table and then submit the AutoRate program, the reconciliation accounting entries are created for payments that were reconciled without exchange rates.

Reports

Bank Account Listing

Use this report to review information for each internal bank account you use. Payables provides detail information about each bank, bank branch, bank account, and payment document that you have defined.

Cash Requirement Report

Use the Cash Requirement Report to forecast your immediate cash needs for invoice payments. You can submit this report before every pay run to determine your cash requirements for the run. You can also submit this report for the next two or three pay runs to forecast your cash requirements for the future and improve your cash management.

Discounts Available Report

Use the Discounts Available Report to identify payments where you can take advantageous discounts. If you find that you are losing discounts, you can change your system and supplier defaults and modify your pay run selection criteria to make sure that you take all valid discounts.

Discounts Taken and Lost Report

Use the Discounts Taken and Lost report to identify payments for which you could have taken a discount, but did not. If you find that you are losing discounts, you can change your system and supplier defaults and modify your pay run selection criteria to make sure that you take all valid discounts.

Final Payment Register

Use the Final Payment Register to list each payment that was included in a pay run. The report lists each payment in a pay run, including setup, overflow, and subsequently voided payment documents, in ascending order by payment number.

Payment Audit by Voucher Number Report

Use the Payment Audit by Voucher Number Report to review payments with assigned sequential voucher numbers. If you enable the Sequential Numbering profile option, either you or Payables can assign a unique, sequential number to each payment you create. You can also use this report to review assigned and available voucher numbers for the sequence name you specify, as well as sequential numbers that have been deleted.

Payment Exceptions Report

Use this report to review exception payments in Payables. This report provides you with a state-of-the-system listing of the exception payments in Payables at any time.  Exception payments are payments that your bank has: Not yet cleared, Cleared for an amount different from the payment amount, Cleared before the payment date, Cleared, but the payment is void in Payables.

Payment Gain & Loss Report

For each payment that has both a gain and a loss, Payables lists each currency exchange rate gain and loss included in the payment.  Use this report if you need to know the exact gain or loss for an invoice in a payment, or how the total gain and loss of the payment is distributed across a payment’s invoices.

Payment Register

Use the Payment Register to review payments created for each bank account you use during a time period you specify. The report lists each payment, as well as the total payment amount and cleared amount of all payments.

Positive Pay File

A positive pay file is a security measure in the form of a document that the deploying company sends to its payment system or bank to inform it of payments made by check. When you print checks, then you can electronically transmit a list of payments to the bank or payment system that indicates the checks you printed, so the bank or payment system knows what checks to pay. This list prevents the payment system or bank from paying fraudulent checks, since such checks are not listed on the positive pay file.

To generate and transmit the positive pay file when checks are printed, select the Automatically Transmit File check box under the Positive Pay Region, Reporting subtab, of the Update Payment Process Profile page.

Payment Process Request Status Report

Use the Payment Process Request Status Report to review the payments Payables will create when you format payments for the invoices in a pay run.

Separate Remittance Advice

Separate remittance advice is a document that lists the invoices paid with a particular payment. You can specify the format for the separate remittance advice document and the delivery method.

To specify when or for which payments remittance advice is generated, select an option from the Condition drop-down list under the Separate Remittance Advice Region, Reporting subtab, of the Update Payment Process Profile page.

*        Number of Documents option: indicates the number of payments that must be included in a payment instruction for the system to generate separate remittance advice for the included payments.

*        The Payment Detail Length option: indicates the minimum payment detail length required to generate separate remittance advice for a payment.

Stop Payments Report

Use the Stop Payments Report to review all current stop payments. Payables does not list any stop payments which were initiated, but then released, or voided at a later time.

Supplier Payment History Report

Use the Supplier Payment History Report to review the payment history for a supplier, or a group of suppliers with the same supplier type.

Unclaimed Property Report

This report identifies uncleared payments and is useful where you need to identify unclaimed property that must be escheated to a designated authority.

Void Payment Register

Use the Void Payment Register to obtain a listing of void payments. The Void Payment Register provides you with payment and supplier information for each void payment.

Payment Terms

Payables Responsibility

(N) Setup > Invoice > Payment Terms

Using Payment Terms

In the Payment Terms window, you can create an unlimited number of payment terms. Payment terms have one or more payment term lines, each of which creates one scheduled payment.  Each payment term line and each corresponding scheduled payment have a due date or a discount date based on one of the following:

*        a specific day of a month, such as the 15th of the month

*        a specific date, such as August 15, 2007

*        the number of days added to your terms date, such as 14 days after the terms date

*        a special calendar that specifies a due date for the period that includes the invoice terms date. Only due dates can be based on a special calendar. Discount dates cannot be based on a special calendar.

Each payment term line also defines the due or discount amount on a scheduled payment. When you define payment terms, you specify payment amounts by percentages or by fixed amounts. After you define payment terms, you can select default payment terms that Payables automatically assigns to the suppliers and supplier sites you enter. The payment terms for a supplier site default to the invoices you enter for the site.

Defining Payment Terms

Name. Enter a unique payment term name and a description. Use names that make it easy to identify the usage of payment terms. For example, use 1/10 Net 30 to refer to a payment term which indicates you receive a 1% discount if you pay within 10 days and the invoice is due in 30 days. This name will appear on a list of values with the description whenever you select a payment term.

Description. Description of payment term.

Cut-off Day. For Day of Month terms only, the day of the month, after which the due and discount dates of the scheduled payment will be in a future month. The exact month depends on the value you enter for the Months Ahead field.  Payables compares the invoice terms date to the Cut-off Day. If you leave this field blank, Payables always uses the current accounting month to determine the due and discount dates.

For example, suppose your Cut-off Day is 11, your Months Ahead is 0 (zero), and your Day Of Month due date is 15. If you enter an invoice with a payment term date of January 12, Payables will set the due date for February 15.

Note: If you use due Days or Fixed Date terms, do not enter a cut-off day.

Rank. If you enable Recalculate Scheduled Payment, enter a unique value to rank your invoice terms.  One is the highest rank.  Payables uses ranks to choose the most favorable payment terms from the invoice and purchase order.  During Invoice Validation, Payables recalculates the scheduled payment using the most favorable terms only if the Recalculate Scheduled Payment Payables option is enabled.

Effective Dates Region [From To]. If you want to make this payment term valid on a certain date, enter that date in the Effective Dates From field. If you want to make this payment term invalid on and after a certain date, enter that date in the Effective Dates To field.

Due Subtab

Enter one of the following to determine the portion of an invoice due on the scheduled payment:

*        % Due - The portion of an invoice due. The total of your scheduled payment lines must equal 100%.  You cannot combine percentages due and amounts due for one set of payment terms.

*        Amount - For amount due terms only, enter the amount due. Typically amount due terms have more than one payment term line since you must specify zero as the amount on your last payment term line.  Payables uses the zero amount payment line to determine the remaining amount due on the last scheduled payment.

 Enter one of the following to determine the due date on the scheduled payment line:

*        Calendar - If you enter a value in the Calendar field, Payables determines due dates for scheduled payments by using a special calendar. A special calendar is divided into periods, and each period has a due date assigned to it. When you assign due dates to the periods of a payment terms calendar, you can avoid weekends and holidays. You can define special calendars for payment terms in the Special Calendar window.

*        Fixed Date - Specific month, day, and year on which a payment term is due.

*        Days - Payables adds this number of days to the invoice terms date to determine the due or discount date on your scheduled payment line.  Note: You cannot enter values in the Day of Month and Months Ahead fields for a payment term line if you enter a value in this field.

*        Day of Month/Months Ahead

-          Day of Month - Payables uses the value you enter to calculate a due or discount date for a scheduled payment.  For example, enter 15 to have Payables schedule payment for the 15th day of the month.  Enter 31 if you want Payables to schedule payment for the final day of the month, including months with less than 31 days.

-          Months Ahead - For Day of Month terms only. Payables uses the value you enter in conjunction with the Cut-off Day you enter to calculate the due or discount date of a scheduled payment line. If you enter zero (0) in this field and the terms date of an invoice is the same as or later than the Cut-off Day, then Payables uses the day in the Day of Month field for the next month as the due date of an invoice payment line. If you enter 1 in this field, Payables uses one month beyond the next month as the due date.  Note: You cannot enter a value in this field if you enter a value in the due Days field.

First Discount, Second Discount, and Third Discount Subtabs

If you are using discount terms, define payment term lines in the First, Second, and Third Discount subtabs.  Define discounts so that the first discount has an earlier discount date than the second, and so on. You can realize only one discount on a payment term line.

Enter one of the following to determine the portion of the invoice to discount on the scheduled payment: % Due or Amount.

In the % Discount field, enter the discount percent. Payables uses the percentage you enter to calculate the discount amount available for a scheduled payment. Payables multiply this percentage with the amount due on the scheduled payment line to determine the discount amount available on the scheduled payment line.

Note: In the Second and Third Discount subtabs, you can enter second and third discount percentages for discounts available if you miss the first discount date. Do not enter a value in this field if there is no discount available.

Enter one of the following to determine the due date on the scheduled payment line: Days, Day of Month, or Months Ahead.

Internet Expenses Overview

Oracle Internet Expenses helps employees to enter and submit expense reports using a computer or standard Web browser, Web-enabled mobile device, or Excel spreadsheet.

*        Oracle Internet Expenses integrates with Oracle Payables to provide quick processing of expense reports for payment.

*        Oracle Workflow automatically routes expense reports for approval and enforces reimbursement policies.

Internet Expenses Overview

Advantages of Using Oracle Internet Expenses

Internet Expenses streamlines and automates expense management for a higher return on investment.

*        It reduces administrative costs and data entry errors since data entry is streamlined and accessible anywhere online (mobile, desktop, browser) or offline (spreadsheet).

*        It enforces spend policy to control expenses, showing any policy deviations.

*        It eliminates expensive IT customizations through global accommodation for local statutory regulations and automates audit management, conserving staff for analytical work and providing better information to management.

*        It increases productivity when employees can flexibly create expense reports using a standard Web browser, a connected Web-enabled mobile device, a disconnected spreadsheet, and/or downloaded credit card transactions.

*        It improves cycle times by routing expense reports via workflow.

*        It increases employee satisfaction when their status-related questions can be self-answered within the application.

*                    Expense Reporting Process

*              You create and submit an expense report using Oracle Payables or Oracle Internet Expenses. The basic expense reporting process is as follows:

*        1.   The Employee submits an expense report.

*        2.   The Expenses Workflow notifies the approving authority for online review.

*        3.   If the report is rejected, the Rejection process notifies the employee by email.  You can access and update the rejected expense report from Payables, if you submitted the expense report from Payables, or from Internet Expenses if you submitted the expense report from Internet Expenses.

*        4.   For Payables approvals, the Payables Approval process determines whether a report requires audit. It automatically approves if audit is not needed.  The audit rules determine whether audit is required.  If required receipts are missing or there are questions about policy compliance, auditors can request more information, shortpay, reject or adjust the expense report.  For all cases, notifications are sent to the preparer.

*        5.   After manager and/or accounts payable department approval, the Expense Report Export program converts the expense report into an invoice. In Oracle Payables, the system either creates the payment or it prints the Invoice Export Exceptions Report for expense reports that cannot be imported and have to be resubmitted.

*        6.   The employee is notified and receives payment by check or direct deposit, depending on the company policy or setup.

*                    Entering Expense Reports

*              You can enter expense reports in either Oracle Payables or Oracle Internet Expenses. This module focuses on entering expense reports in Payables only.

*              It is important to note that although the expense report process is similar in these applications, that if you enter expense reports in Payables, you can only view and modify those expense reports in Payables; if you enter expense reports in Internet Expenses, you can only view and modify those expense reports in Internet Expenses.

*              To enter expense reports in the Payables Expense Reports window:

*                     

*        1.         Either enters the employee name in the Employee field or the employee number in the Number field.

*        2.   Optionally change the GL Account, which defaults from the employee record.

*        3.   In the Send to field, optionally change the location to which you want to send payment for the expense report. You control the default expense address in the Financials Options window.

*        4.   In the Date field, enter the period ending date for the expense report. Payables uses this date as the GL Date for invoice distributions created from the expense report. When you submit Expense Report Export you have the option to override this date.

*        5.   Enter an Invoice Number, or Payables will enter the invoice date or the expense report date as the Invoice Number. Enter a Description of the expense report. This will become the invoice description, and it will appear on reports.

*        6.   Enter the total Amount of the expense report. Payables will confirm that the sum of the item amounts matches this amount.

*        7.   If you enable the Reviewed By Payables check box, this indicates that receipts are not required for this expense report. Consequently, the Receipt Verified check box in the Expense Audit tabbed region becomes non-updatable.

*        8.   Enter the expense report Template you want to use. If a default template is defined in the Payables Options window and the template is active, then Payables displays that default template. The template determines which items you can select. The template also might provide default values for Type, Includes Tax, and GL Account. During Expense Report Export, Payables creates invoice distributions from the lines.

*        9.   For each line on the expense report, select the line and enter the amount. Optionally update the GL Account. The default GL Account for each item line is the GL Account for the employee overlaid with any segments defined on the template for the expense item. As with invoices, taxes are automatically calculated for the Expense report using the Oracle E-Business Tax setup.

*        10.   Save your work.

*              To enter an expense reports in Payables’ Invoices window, ensure that invoice Type = Expense Report.

*              You must use the Invoices window to enter project-related expense reports in the Invoices window. This window captures the necessary project and task related information required for project-related expense reports.

*              Oracle Internet Expenses is a self-service application that helps employees to enter and submit expense reports using a standard Web browser or Excel spreadsheet.

*        Procurement Card Process

*        The flow pictured in the slide above illustrates the procurement card process:

*        1.            Use a SQL*Loader script to load the procurement card transactions into the AP_Expense_Feed_Lines_All

*        2.            Validate the transactions by submitting the Procurement Card Transaction Validation program. This program creates default accounting distributions for procurement card transactions. It also validates imported transactions and identifies exceptions. Exceptions include: Transaction loaded for an employee who is not defined in Oracle Payables; Transaction loaded for a card number that is not defined in Oracle Payables; Duplicate reference numbers of transactions posted by your card issuer (the reference number is the unique number assigned to each transaction by the card issuer).

*        3.            Verify the transactions with the employee by submitting the Procurement Card Transaction Verification program. This program initiates the Employee Verification Workflow program and runs based on the level of notification you define at the card profile level. If verification is required at the profile level, the employee is able to verify transactions directly from the workflow notification (for all or none).  Alternatively, the employee can use Oracle Web Employees to verify transactions individually. With Oracle Web Employees, you can also verify transactions using different statuses, update the default cost center, account for a transaction, and split a transaction. If verification is not required at the profile level, the employee receives a notification that requires no action (unless notification level is set to None).

*        4.            Send the transactions for management approval by submitting the Procurement Card Transactions Approval Process. This program initiates the Manager Approval Workflow program and runs based on the level of notification you define at the card profile level. If approval is required at the profile level, the manager can only approve or reject transactions directly from the workflow notification. If approval is not required, the manager receives a notification that requires no action (unless notification level is set to None).

*        5.            If the transactions need to be adjusted, procurement card administrators can adjust them or create transaction distributions using the Procurement Card Transactions window.

*        6.            Once the transactions are approved, create invoices for the transactions by submitting the Create Procurement Card Issuer Invoice program. This program moves the transaction data from the AP_EXPENSE_FEED_DISTS_ALL table to the AP_INVOICES_INTERFACE and AP_INVOICE_LINES_INTERFACE tables. Then, submit the Payables Open Interface Import program to move invoices into Oracle Payables where they can be validated and paid.

*                    Setting Up Procurement Cards and Credit Cards

*              Use the Card Programs window and the Credit Cards window to set up your credit cards, which are used for employee expense reports, and your procurement cards, which are used by qualified employees to purchase items directly from suppliers. If you are using Internet Expenses, there are additional setup steps. See: Establishing Corporate Credit Cards, Oracle Internet Expenses Implementation and Administration Guide.

*                    Code Sets Window

*              Your card issuer maintains card codes, for example, Standard Industry Classification (SIC) codes or Merchant Category Codes (MCC), to identify suppliers and supplier types for the transactions that your employees incur when using a procurement card.

*              You can assign a default account to a card code so that when you import a transaction for that card code, you can create a default accounting distribution for the transaction based on the card code for the transaction.

*              You define sets of credit card codes in this window. You assign credit card code sets to credit card profiles. You then assign credit card profiles to credit cards.

*                     

Key Processes

Create Accounting Process

The parameters you use when you submit the Create Accounting program determine how accounting entries are transferred to the ledgers in your general ledger.  Accounting can be created in draft or final mode. You can transfer subledger accounting entries in summary or detail. Regardless of the option you choose, you can always drill down to the subledger to view the details that build the general ledger balances.

Create Accounting – Draft

If you submit the Create Accounting in Draft mode, you can review the subledger accounting entries generated for your Payables transactions. If any accounting is incorrect, you can update the transaction in Payables to correct the accounting before you create final accounting.

Create Accounting – Final

Run the Create Accounting process in Final mode to generate your final subledger accounting entries. Once you generate final accounting, you cannot correct the accounting. Instead, you must enter correcting transactions in Payables.

Integration with Other Applications

Other applications that integrate with Oracle Payables such as Oracle Assets, Oracle Procurement, Oracle Projects, and Oracle Inventory now provide Payables-related accounting information to Oracle Subledger Accounting. Invoice Lines and Distribution details continue to be provided to Payables directly.

Transfer Journal Entries to GL

Submit the Transfer Journal Entries to GL process to transfer accounting information from Oracle Subledger Accounting to the GL Interface. The Transfer Journal Entries to GL process transfers summary or detail accounting activity for any open period into the general ledger interface. When more than one period is open, the transfer selects transactions from the first open period up to the entered transfer date, and passes the correct accounting date and financial information into the general ledger interface.

Journal Import

Once subledger accounting entries are transferred to the GL Interface table, use the Journal Import process to import accounting information from the GL Interface to the general ledger. 

Posting Journals

Use the post journals process to update the account balances of your detail and summary accounts. You can post actual, budget, or encumbrance journal batches.

Overview of the Period Close

*        At the end of each accounting period, companies must complete the closing process in Payables and reconcile Payables activity for the period.

*        You close a Payables period after you have completed subledger accounting for transactions for the period and you have transferred the subledger accounting entries to general ledger.

A week before your first period close, create a copy of the production database and then do a dry run following your period close procedures.  The dry run will help you identify problems and issues well in advance of the actual period close.

Prepare for Period Close

Complete all receipt processing

Process all possible receiving transactions so when remaining invoices are matched, Invoice Validation will place fewer matching holds.  Use the Transaction Status Summary window to ensure all receipts were processed and that none have a status of Error.  This form looks like a view only form, however, you can delete records so they may be re-processed.  Receipt Accruals are not generated for errored transactions so make sure you do not skip this step.

Confirm or cancel all pending pay runs

Pay runs must be either confirmed or canceled or you will not be able to close the period.  After all activities relating to pay runs are completed, process any manual payments, and Quick Payments.  Also, process any stop or void payments.

Update matured bills payable

If you use bills payable (future dated payments), either manually update the payment status or use the Update Mature Bills Payable Status program to update the status of any bills payable that have reached their maturity date, but still have a status of Issued.

Import invoices

Process any invoices that are loaded through the Payables Open Interface with the Payables Open Interface Import program.  Review the exceptions report and resolve any invoice related issues.  Typical types of invoices that are imported through this open interface include:

*        EDI inbound invoices (810)

*        Invoices from external systems

*        Invoices created from credit card transactions if using procurement cards

*        Advance Shipment and Billing Notices (ASBNs)

Export and process expense reports

Process any expense reports that are entered using the Payables Expense Reports window as well as invoices coming from external sources. 

Interface adjustments to supplier invoices to payables

If you are using Projects, you will most likely be updating project balances with invoices entered in Payables through the accounting period.  Final adjustments to supplier invoices like reclassifying from project to project or task to task, should be interfaced back to Payables using the PRC: Interface Supplier Invoice Adjustment Costs to Payables program. For adjustments to expense reports, use the PRC: Interface Expense Reports from Payables in Oracle Projects program. These programs are submitted in Projects.

Reconcile bank statements

Reconcile any outstanding bank statements.  Depending on how your Payables Options are set up, you may generate clearing events when you reconcile payments.  When you run the Create Accounting process, the accounting will be generated and subsequently sent to the General Ledger during the Transfer Journal Entries to GL process.

Run Validation/Review and Resolve Holds

Run the Invoice Validation Process

The Invoice Validation process attempts to validate invoices and remove any existing holds.  Some invoices may be placed on hold and not validated.  If an invoice contains a system hold manually correct the problem that caused the hold and then rerun the Invoice Validation process to remove the hold.  All user defined holds must be manually removed.

Resolve Invoice Holds

*        Matching Hold Detail Report - Use the Matching Hold Detail Report to review detailed accounts payable and purchasing information for invoices with matching holds and matching hold releases.

*        Invoice on Hold Report - Use the Invoice on Hold Report to review detailed information about invoices on hold. You can submit the Validation process before submitting this report to obtain the most up-to-date hold information.

Rerun the Invoice Validation Process if Necessary

For many system holds it will be necessary to fix the problem that caused the hold.  Rerun the Invoice Validation process after resolving any invoice hold issues to update the status of the invoice to Validated.

Create Subledger Accounting

Create subledger accounting entries for invoice and payment transactions in Payables using Oracle Subledger Accounting.

Before you can account for transactions, the following conditions must be met:

*        Invoices must complete Invoice Validation and must have no holds that prevent accounting. You can define whether a hold prevents accounting in the Invoice Hold and Release Names tab. The system also defines several holds that prevent accounting. You can review these holds in the Invoice Hold and Release Names tab.

*        Payments must have all their invoices accounted first.

There are two ways to create subledger accounting entries for invoice and payment transactions:

*        Create online accounting for a single transaction, invoice batch, or pay run. To do this, select the transaction, and use the Actions button to launch the Create Accounting process.

*        Submit the Create Accounting process from the Submit Requests window. You can schedule this process to run periodically. If you set the process to provide Detailed information, the process lists any transactions that accounted with errors. Review all unaccounted transactions, correct the problems, and resubmit the accounting process.

After you create subledger accounting entries, you can view them in the View Accounting window.

You can update subledger accounting entries in Payables only if you create draft accounting entries. If you review the draft accounting entries and notice that the accounting is incorrect, you can correct the underlying transaction, and recreate the subledger accounting entries. You cannot adjust accounting once you create final accounting entries. Instead, create an adjusting transaction or create a manual journal entry.

Create Accounting Program

The Create Accounting program:

*        Validates and creates subledger journal entries

*        Transfers the final journal entries in the current batch run to General Ledger and starts the General Ledger posting process

*        Generates the Subledger Accounting Program Report, which documents the results of the Create Accounting program

The program has the following parameters:

Ledger. Required; limits accounting events selected for processing to those of a particular ledger.

Process Category. Optional; restricts the events selected for accounting to a particular process category.

End Date. Required; end date for the Create Accounting program; processes only those events with event dates on or before the end date

Mode. Required; determines whether the subledger journal entries are created in Draft or Final mode

Errors Only. Required; limits the creation of accounting to those events for which accounting has previously failed

Report. Required; determines whether to generate a report showing the results of the Subledger Accounting program in summary or detail format

Transfer to General Ledger. Required if Mode is set to Final; determines whether to transfer the subledger journal entries to General Ledger.

Post in General Ledger. Required if Mode is set to Final or Create Accounting is set to No; determines whether to post subledger journal entries in General Ledger.

General Ledger Batch Name. Optional; user-entered batch name that appears on the transferred General Ledger subledger journal entries. Transfer to GL option must be set to Yes.

Include User Transaction Identifiers. Required; controls whether the report displays user identifiers' names and values.

This program generates the Subledger Accounting Program Report. This report lists the following:

*        Successful events and the subledger journal entries created for those events

*        Errors for failed events

You can run the report in summary or detail mode as follows:

*        Summary mode provides a summary of events processed and detailed information about their errors.

*        Detail mode provides details of subledger journal entries generated from the processing of completed events and a detailed error report.

*                    Transfer and Review

*              Run Transfer Journals to General Ledger

*              The Transfer Journal Entries to GL program is used to transfer accounting entries from Subledger Accounting to General Ledger.

*              The Transfer Journal Entries to GL process automatically generates the Transfer Journal Entries to GL report.  It shows the results of the Transfer Journal Entries to GL process.

*              To obtain a detailed report of accounting entries that were transferred to the general ledger, use the Journal Entries Report with the appropriate date range and GL Transfer Status parameters.

*              Review Transfer Results

*              You can use the Subledger Accounting Program Report, the Transfer to Journal Entries to GL Report, and the Period Close Exception report to review the subledger accounting entries and review any unaccounted transactions.

*              Run Import Journal

*              Run the Import Journal process after submitting Transfer Journal Entries to GL, in order to create unposted journal entries in General Ledger. This process must be submitted from General Ledger.

*              Review Account Analysis Report

*              Run the Account Analysis report in General Ledger to review and analyze accounting entries.  You can use the report parameters to limit the report to just the accounting information you want to review.

Transfer Journal Entries to GL Program

The Transfer Journal Entries to GL program consists of a subset of parameters used in the Create Accounting program as listed below:

*        Ledger

*        Process Category

*        End Date

*        Post in General Ledger

*        General Ledger Batch Name

The Transfer to Journal Entries to GL Report is generated by the Transfer Journal Entries to GL program and lists the following:

*        Transfer to GL Summary

*        General errors

*                    Post Journal Entries in GL

*              Post Journals in GL

*              Once journals are imported into General Ledger, post them.

*              Create Remaining Mass Additions

*              Run the Mass Additions Create program after Payables subledger accounting entries have been transferred to General Ledger (the journals do not need to be posted).  Especially if the volume of your asset purchases is high, the Mass Additions Create program will typically be run several times throughout the accounting period so distributions associated with the purchase of assets may be processed.  Subledger accounting entries (based on information in the invoice lines and distributions) are transferred, and they become journal entries in GL.  Keep in mind that it is not mandatory that all invoices for asset purchases be processed during the period in which the asset was purchased.  For example, invoices entered in May for assets purchased in January will be processed in Assets as prior period additions if they were actually placed in service in January.

Reconcile AP to GL

Use the following reports to reconcile your transferred invoices and payments to your Accounts Payable Trial Balance to ensure that your Trial Balance accurately reflects your accounts payable liability:

*        Accounts Payable Trial Balance (for last day of prior period)

*        Payables Posted Invoice Register - Invoice journals must be posted in general ledger to appear on this report.

*        Payables Posted Payment Register - Payment journals must be posted in general ledger to appear on this report.

*        Accounts Payables Trial Balance (for last day of current period)

This balancing process will help you ensure that all liabilities recorded in Payables are reflected in the general ledger AP liability accounts.  If the balance reported by the accounts payables trial balance does not equal the balance in the AP liability account, you can use the Account Analysis report and the General Ledger reports to determine what journals are being posted to that account.  Before running your reports, run the Transfer Journal Entries to GL Program for all transactions in the period that you are reconciling.  Also, be sure to post the transactions in the general ledger.

Close the AP Period

Period Close Exceptions Report

Use the Period Close Exceptions report to review a complete list of exceptions that are preventing the close of a selected accounting period. Submit this report to review a complete list of exceptions that are preventing you from closing a Payables accounting period. This report lists, for each organization within the set of books, the following exceptions:

*        Outstanding Pay Runs

*        Accounting Entries not Transferred to General Ledger

*        Bills Payable Requiring Maturity Event and Accounting

*        Unaccounted Invoices

*        Unaccounted Payments 

Correct any exceptions before you close the AP period.

Close the AP Period

Use the Control Payables Periods window to close the AP period.

Close the PO Period

Review the Unnoticed Receipts report

The Uninvoiced Receipts Report should be run before the Receipt Accrual - Period-End process. With this report, you can review all or specific uninvoiced receipts for both period end and online accruals.  Uninvoiced receipts are goods and services you have received that your supplier did not invoice yet. This report indicates exactly what you have to accrue and for what amount, and helps you analyze your receipt accrual entries. The accrual amount is the difference between the quantity received and the quantity billed multiplied by the unit price of the item.

Process period-end receipt accruals

Use the Receipt Accruals - Period-End process to create period-end accruals for your uninvoiced receipts for Expense distributions.  Purchasing creates an accrual journal entry in your general ledger for each uninvoiced receipt you choose using this window. Each time you create accrual entries for a specific uninvoiced receipt, Purchasing marks this receipt as accrued and ignores it the next time you run the Receipt Accrual - Period-End process. Purchasing creates accrual entries only up to the quantity the supplier did not invoice for partially invoiced receipts.

Once the Receipt Accruals - Period-End process completes, use Transfer Journal Entries to GL program from Receiving to transfer the subledger journal entries to General Ledger. The journal is assigned a reversal period based on the category setup. This journal must be reversed in the subsequent period and posted.  If the journal is not reversed and posted, your uninvoiced receipt liability will be overstated.

Close the purchasing period

Use the Control Purchasing Periods window to control the purchasing periods defined in the Accounting Calendar window.  Purchasing lets you create journal entries only for transactions you enter in an open purchasing period.  Use the Control Purchasing Periods window to change the status of the period to Closed.  Once the Purchasing period is closed, the corresponding Payables period cannot be re-opened unless the purchasing period is re-opened.  Each period in the purchasing calendar will have one of the following statuses:

*        Closed - When you close a purchasing period, Purchasing does not allow further accruals during the period. Purchasing reverses the status of accrued purchase order lines that are set to accrue at period end so that you can accrue them in the next period if you need to.

*        Future - Use this option if you want to open the purchasing period in the future. This option is available only when the current status is Never Opened.

*        Never Opened - Purchasing displays this default status if you have not opened the period in the past.

*        Open - Use this option to open the purchasing period.

*        Permanently Closed - Use this option if you do not want to re-open the period in the future. This option is irreversible.

Process remaining inventory transactions

Process any remaining inventory transactions and close the inventory accounting period.

Run Accrual Reports

Run the accrual reconciliation load program and then use the following reports to analyze the balance of the accrual accounts.
1.  Summary Accrual Reconciliation Report
2.  AP and PO Accrual Reconciliation Report
3.  Miscellaneous Accrual Reconciliation Report
4.  Accrual Write-Off Report
5.  WIP Accrual Write-Offs Report. Note that this report only shows WIP write-offs that were performed in prior releases.

You can also use the following windows to view write-off details:

1.  AP and PO Accrual Write-Off
2.  Miscellaneous Accrual Write-Off
3.  View Write-Off Transactions
Write off accrued transactions as necessary

After you have researched the reported accrual balances, you can use the Accrual Write-Offs window to indicate which entries you wish to remove and write off from this report.

Do not create manual journal entries for write offs since the journal entries will be automatically created against the write off transaction in the costing subledger.

Key Accounts

Receiving Inventory Account

The Receiving Inventory Account is a clearing account.  The account is used for perpetual (on receipt) accruals.  After receiving transactions are processed and the Transfer Transactions to GL process is run, the Receiving Inventory Account is cleared and the Material account is charged with the cost of the capitalized inventory.  Specify this account when you define Receiving Information for your inventory organizations.

Inventory AP Accrual

This is the account used by Purchasing to accrue your payable liabilities when you receive items you will capitalize as inventory. This account represents your uninvoiced receipt liability and is usually part of your Accounts Payable Liabilities in the balance sheet. Payables relieves this account when the invoice is matched and validated.  Specify this account when you define Inventory Information for your inventory organizations in the Other Accounts tab.

AP Liability

This defaults from the supplier site and is credited when a standard invoice is entered or debited when a credit memo or debit memo is entered.  The account is relieved when the invoice is paid.

Expense AP Accrual

This is the account used by Purchasing to accrue your payable liabilities when you receive items you will expense.  This account represents your uninvoiced receipt liability when you run the Receipt Accruals - Period End process.  Specify this account on the Accrual tab when you set up Purchasing Options.

Material

An asset account that tracks material cost. For average costing, this account holds your inventory and in transit values. Once you perform transactions, you cannot change this account.  Specify this account when you define Inventory Information for your inventory organizations in the Valuation Accounts region for the Costing Information tab.

Charge Account

This is the charge account is the account that will be charged for the purchase on either the balance sheet or income statement.  If the destination type for the distribution is Inventory, this account will be the Material account associated with the subinventory and you cannot override it.  This is the balance sheet account that will be charged after inventory is capitalized.  If the destination type is expense, you can specify this account (provided it isn’t project related) and override any defaults.  This account will be either an asset clearing account that will be included on the balance sheet or an expense account that will be included on the income statement.  This account is either created or specified when you create a purchase order.

Purchase Price Variance

This account is used to record differences between purchase order line price and standard cost. The Purchase Price Variance is calculated when items delivered to inventory are costed.  This account is not used with the average cost method.  For example, assume the purchase order line price for an item was set at $10 per item but standard cost was set to $12 per item and you purchased 10 items.  The Purchase Price Variance would be $20. Specify the Purchase Price Variance account when you define Inventory Information for your inventory organizations in the Other Accounts tab.

Invoice Price Variance

The variance account used to record differences between purchase order price and invoice price. This account is used by Payables to record the invoice price variance for inventory items.  For expense items, the account generator uses the charge account to record any invoice price variance. For example, assume the purchase order line price for an item was set at $10 per item but you were charged $12 per item and you purchased 10 items.  The Invoice Price Variance would be $20.  Specify this account when you define Inventory Information for your inventory organizations in the Other Accounts tab.

Reports

Accounts Payable Trial Balance

Use the Accounts Payable Trial Balance Report to verify that total accounts payable liabilities in Payables equal those in the general ledger. To reconcile these balances you can compare the cumulative total liability provided by this report with the total liability provided by your general ledger.

Accrual Rebuild Reconciliation Report

Use the Accrual Rebuild Reconciliation Report to analyze the balance of the Accounts Payable (A/P) accrual accounts. You can accrue both expense and inventory purchases as you receive them. When this happens, you temporarily record an accounts payable liability to your Expense or Inventory A/P accrual accounts.  When Payables creates the accounting for the matched and validated invoice, Payables clears the A/P accrual accounts and records the liability from the supplier site.  Run this report at period end.

Accrual Write-Off Report

Use the Accrual Write-Off Report to provide supporting detail for your write-off journal entries. The process is as follows. First, you analyze the Accrual Reconciliation Report for transactions that you should expense out of the accrual accounts. After you have researched the reported accrual balances, you then use the Accrual Write-Off window to indicate which entries you wish to remove and write off from this report. And, after you have written off these entries, you use the Accrual Write-Off Report as supporting detail for your manual journal entry.

Matched and Modified Receipts Report

After you automatically create invoice distributions by matching an invoice for goods to a receipt, that receipt can be modified in Purchasing. For example, you might need to adjust a receipt because the quantity received was incorrectly recorded, or the product was defective and returned to the supplier. Use this report to identify receipts that have been changed after invoice matching, and for which no users have seen modifications.

Account Analysis Report

Run the Account Analysis report to review and analyze subledger accounting entries from Payables.  You can use the report parameters to limit the report to just the accounting information you want to review.  The Account Analysis report is helpful when you reconcile your accounts with your general ledger. 

Payables Posted Invoice Register

Use the Payables Posted Invoice Register to review accounting lines, summarized by invoice, that have been transferred to the general ledger. Because it presents amounts that have been charged to liability accounts, this report is valid only for an accrual ledger.  The Payables Posted Invoice Register is primarily a reconciliation tool. Use this report along with the Posted Payment Register and the Accounts Payables Trial Balance Report to reconcile balances between Payables and your general ledger.

Payables Posted Payment Register

Use the Posted Payment Register to review accounting lines, summarized by payments that have been transferred to the general ledger.  Because it presents amounts that have been charged to liability accounts, this report is valid only for an accrual ledger. You can submit the Posted Payment Register for one payment journal entry batch or all payment journal entry batches.  The Posted Payment Register is primarily a reconciliation tool. Use this report along with the Payables Posted Invoice Register and the Accounts Payables Trial Balance Report to reconcile balances between Payables and your general ledger.

Receipt Accruals - Period End

Use the Receipt Accruals - Period-End process to create period-end accruals for your uninvoiced receipts for expense distributions.  Purchasing creates an accrual journal entry in your general ledger for each uninvoiced receipt you choose using this window.

Receiving Account Distribution Report

The Receiving Account Distribution Report lists the accounting distributions for your receiving transactions. This report supports the distributions created for the following transactions:

*        Purchase Order Receipts

*        Purchase Order Receipt Adjustments

*        Purchase Order Returns to Supplier

*        Deliver to Expense Destinations

*        Return to Receiving from Expense Destinations

*        Match Unordered Receipts

This report helps you reconcile your receiving accounting to your general ledger.

Unaccounted Transactions Report

Use this report to identify and review all unaccounted invoice and payment transactions and see the reason that Payables cannot account for a transaction.  Run this report after you have run the Create Accounting process.  The report will then show only transactions that had problems that prevented accounting. You can then correct the problems and resubmit the accounting process. Note that this report does not include invoices that have no distributions.

Uninvoiced Receipts Report

The Uninvoiced Receipts Report should be run before the Receipt Accrual - Period-End process. With this report, you can review all or specific uninvoiced receipts for both period end and online accruals.  Uninvoiced receipts are goods and services you have received that your supplier did not invoice yet. This report indicates exactly what you have to accrue and for what amount, and helps you analyze your receipt accrual entries. The accrual amount is the difference between the quantity received and the quantity billed multiplied by the unit price of the item.

Tell me about invoices workbench?

Invoices workbench used for to adjust or pay invoices after search. Also, It’s used for either apply or release holds to invoices and approve or cancel invoices.

To approve invoices online, you must enable Allow Online Approval. You can select one or more invoices online to be approved online in the Invoice Workbench. You can use the Approve Related Invoices option to approve debit/credit memos together with their associated invoices. You can approve the entire invoice if you allow online approval and you enter invoices by batch.

Sometimes, you can make adjustments to invoice distribution, scheduled payments, or invoice details even though the transactions have been paid and posted to the General Ledger. All changes can be made from the Invoice Workbench. You can change the invoice amount and change the distribution amounts and scheduled payments to match the adjusted amount. If you are using PO matching, you can reverse the matching and rematch to correct an error.

To cancel an invoice, use the Invoice Workbench and select the Actions button. The Invoice Actions form will give you several options to choose from. Select Cancel Invoice and the invoice distributions will be reversed. The invoice amounts and scheduled payments will be set to zero. Once the invoice is cancelled, you cannot make any more changes to it.

From the Invoice Workbench, select the invoice or invoices you wish to pay and choose the Actions button. The Invoice Actions form will display. Select the Pay in Full checkbox and then click on the OK button. The Payment Workbench will be invoked and you can create either a quick payment or manual payment. Also, if you do not want to pay in full, you can select scheduled payment(s) to be paid as a quick payment or a manual payment.

After you enter invoice records in the Quick Invoices window, you can submit a customized workflow program to automate your processes for managing invoices. For example, you can customize the workflow program to validate the cost center on all invoices before you import them.

You then submit the Payables Open Interface Import Program to validate the values you entered, provide any default values, and then create invoices with distributions and scheduled payments in the regular Payables tables. After import, Payables provides a report that lists invoice records that were successfully imported and any that could not be imported because they had invalid or missing information. You can query the rejected invoice records in the Quick Invoices window, correct them, and then resubmit them for import. When you import invoice records successfully, Payables creates regular invoices that you can view, modify, and validate in the Invoice Workbench.

Describe the close process in Payables:

1. Validate all invoices.

2. Confirm or cancel all incomplete payment batches.

3. If you use future dated payments, submit the Update Matured Future Dated Payment Status Program. This will update the status of matured future dated payments to Negotiable so you can account for them.

4. Resolve all unaccounted transactions. Submit the Payables Accounting Process to account for all unaccounted transactions. Review the Unaccounted Transactions Report. Review any unaccounted transactions and correct data as necessary.

Then resubmit the Payables Accounting Process to account for transactions you corrected. Or move any unresolved accounting transaction exceptions to another period (optional).

5. Transfer invoices and payments to the General Ledger and resolve any problems

6. In the Control Payables Periods window, close the period in Payables.

7. Reconcile Payables activity for the period. See: Reconciling Payables Activity,

• Accounts Payable Trial Balance Report, (this period and last period).

• Posted Invoice Register,

• Posted Payment Register,.

8. If you use Oracle Purchasing, accrue uninvoiced receipts.

9. If you use Oracle Assets, run the Mass Additions Create Program transfer capital invoice line distributions from Oracle Payables to Oracle Assets.

10. Post journal entries to the general ledger and reconcile the trial balance to the General Ledger.

Bank Account Model

Payables leverages Oracle Trading Community Architecture and Oracle Cash Management to set up the bank accounts that you use to do business (internal bank accounts). Banks and Bank Branches are created as parties in Trading Community Architecture via the user interface in Oracle Cash Management. Bank Accounts are defined in Oracle Cash Management. Each bank can have multiple branches and each branch can have multiple accounts.

When you enable a bank account for use with Payables, you can associate the account with multiple payment documents.

When you set up your suppliers in Oracle iSupplier, you can also set up supplier bank accounts (external bank accounts).

Entering Bank and Bank Branch Information

Cash Management, Vision Operations (USA) Responsibility

(N) Setup > Banks

Entering Banks

You can create a new bank or add bank details to an existing party defined in your Trading Community.

For each bank, define the country in which the bank operates, the name of the bank, the bank address(es), and contacts. Optionally, you can define additional bank information: Alternative Bank Name, Short Bank Name, Bank Number, Description, Taxpayer ID, Tax Registration Number, XML Messages Email, Inactive Date, and Context Value.

Entering Bank Branches

(N) Setup > Banks : (T) Branches

Each Bank can have more than one bank branch. When you create a bank branch, you can create a new branch or add branch details to an existing party defined in your Trading Community.

For each bank branch, define the country in which the bank operates, the bank the branch belongs to, the branch name, the branch type, address(es), and contacts.

In addition to defining the branch type, you can define additional bank branch details: Alternate Branch Name, Routing Transit Number, BIC, Bank Code, EDI Location, EFT Number, Description, RFC Identifier, Inactive Date, and Context Value.

Entering Bank Account Information

Cash Management, Vision Operations (USA) Responsibility

(N) Setup: Banks > Bank Accounts > Create > Create Bank Account page > Create Bank Account: Account Owner and Use page > Create Bank Account: Account Information page

Bank Account Owner. The bank account owner is the legal entity that owns the account.

Account Use. Account use refers to the applications that are going to use this internal bank account: Payables, Payroll, Receivables, and/or Treasury. If the Treasury option is enabled, you must link this bank branch to the counterparty in Treasury.

Information. You enter the name of the account, account number, currency, and description.  You should have the name of the account match the name on the bank’s records and then use the description field to indicate how the account is used, for example, main disbursement account.  The account type is a free-form field that you might use to indicate whether the account is a savings or checking account or whether it’s a corporate or division account.

Optionally, enter or select the Alternate Account Name, Short Account Name, Check Digit, Multiple Currencies Allowed, International Bank Account Number (IBAN), Account Type, Account Suffix, EFT Number, Secondary Account Reference, Account Holder, Alternate Account Holder, Description, Start Date, and End Date.

Entering Bank Account Information

Cash Management, Vision Operations (USA) Responsibility

(N) Setup: Banks > Bank Accounts > Create > Create Bank Account page > Create Bank Account: Account Owner and Use page > Create Bank Account: Account Information page > Create Bank Account: Account Controls page

General Controls Region

Enter the cash account number that should be charged for payments made from this bank account. You can also enter accounts for cash clearing, bank charges, bank errors, foreign exchange charges, and agency location code that will be used when you reconcile with Oracle Cash Management. If you specify these codes in the General Controls region, the accounts you specify will be used as the default accounts for all applications that use this account. You can also specify whether the bank account you are creating is a netting account. Note that you can specify Payables-specific accounts later on.

Payables Controls Region

Multiple Currency Payments. If you have enabled the Use Multiple Currencies Payables option and you want to use this bank account to pay invoices entered in multiple currencies, enable this option.

Pooled Account. If you use Automatic Offsets and you want to associate multiple companies with this bank account, then enable this option.  When you enable the Automatic Offsets Payables option, Payables creates one offsetting liability distribution for each invoice distribution.  If you pay an invoice from a pooled bank account, then when Payables accounts for the invoice payment, Payables creates one corresponding cash accounting entry for each liability distribution.

*        In addition, Payables builds the cash account based on the Cash Account defined for the bank account and the account segments of the liability lines.

*        If you do not use a pooled account, then when the payment is accounted, a single accounting entry is created for the Cash account, using the Cash Account that is defined for the bank account without modifying any account segments.

Minimum/Maximum Payment. Minimum/Maximum payment refers to the smallest and largest payment amounts that you allow in a pay run. When you initiate a pay run using the bank account, Payables uses the bank account’s Maximum Payment as a default.  You can override this default.

Allow Zero Payments. If you allow zero-amount payments from this bank account, enable this option.

Maximum Outlay. Maximum outlay is the largest currency outlay that you allow for a pay run for this bank account.  If the total outlay of a pay run exceeds the maximum outlay for the pay run, Payables displays a warning, but allows you to continue processing the pay run. The Maximum Outlay for a bank account defaults from the Payables Options window.  When you initiate a pay run using the bank account, Payables uses the bank account’s Maximum Outlay as a default.  You can override this default.

Entering Bank Account Information

Cash Management, Vision Operations (USA) Responsibility

Account Use. Select the types of functions that this internal bank account is going to be used for: Payables, Payroll, Receivables, and/or Treasury. Internal banks are the bank accounts for which you are the account holder. Receivables uses internal bank accounts to receive payments from customers. Payables uses internal bank accounts to disburse funds to suppliers.

Organization. Enter or select the Organization that can access the account.

Accounts. For each payables document category and payment method combination you can update the following accounts that default from the bank account:  cash clearing, bank charges, bank errors, realized gain, loss accounts, and future dated payments.

Defining Payment Documents and Payment Methods. You must create at least one payment document before you can use a bank account to create invoice payments. When you define payment documents, you can only select payment methods that use the same currency as the bank account currency. If the bank account is a multiple currency bank account, you can choose foreign currency payment methods or multiple currency payment methods. 

Contact

You can enter the prefix, name, title, and telephone for a contact specific to this bank account.

Defining Payment Documents

To define payments documents:

1.   Query the bank account.

2.   Click the Manage Payment Documents button.

3.   Click Create.

4.   In the Name field, enter a name for the payment documents.

5.   In the Paper Stock Type field, select Blank Stock for non-numbered check stock or Prenumbered Stock from the drop-down list.

6.   If your check stock has an attached remittance stub, select the Attached Remittance Stub check box.

7.   If your check stock has an attached remittance stub, specify the number of lines per remittance stub in the Number of Lines per Remittance Stub field.

8.   In the Number of Setup Documents field, specify the number of checks you want to allow for testing check stock setup.

9.   In the Format field, select a check format from the list of values.

10. In the Payment Document Category field, select the type of payment document from the list of values.

11. If your check stock is prenumbered, enter the first and last document numbers in the fields under the Document Numbers region.

12. If your organization uses a company checkbook, enter the appropriate information in the Checkbooks region.

Tell me about online approving invoices?

The workflow begins by finding the first approver on the ordered list of approvers. If the invoice requires no approvers to approve it, then the invoice’s approval status is set to Not Required and the workflow program ends.

If the invoice has a first approver, then the workflow program sends an invoice approval request to the approver’s e-mail or Oracle Workflow Notifications Worklist web page (or both). If that approver approves the invoice, the workflow program then looks for the next approver on the ordered list. If there is another approver, the workflow requests approval from that person. The workflow completes when all persons on the ordered list approve the invoice, or if an approver rejects the invoice.

If an approver does not respond within the specified time period, the workflow removes the original notification from the approver’s Notifications Worklist and sends a reminder notification to the approver. If the approver still does not respond, then the workflow removes the reminder notification from that approver’s Notifications Worklist and sends that person’s manager an escalation notification.

Whenever an invoice is approved or rejected, Payables updates the approval record of the invoice, which you can review in the Invoice Approval History window or the Invoice Approval History Status Report. See: Invoice Approval History Window. The invoice approval status is updated when the workflow completes. You can initiate the Invoice Approval Workflow Program in the following ways:

• Schedule regular submission of the Invoice Approval Workflow concurrent program

• Initiate the Invoice Approval Workflow Program from the Submit Request window

• Manually initiate the workflow by selecting one or more invoices in the Invoices window and then from the Invoice Actions window selecting Initiate Approval

Tell me about Payment batches?

A payment batch set groups several payment batches together so you can simultaneously submit the selection, build, or format process for each payment batch in the set. With a payment batch set you can submit several payment batches with different payment currencies simultaneously.

You define a payment batch set by entering invoice selection criteria for one or more payment batches in the Payment Batch Sets window. Once you define a payment batch set you can use it as a template to regularly manage and submit similar groups of payment batches. You can also set up payment batch sets to automatically submit at regular intervals. For example, you can set up a payment batch set and schedule it to automatically run every Friday.

• Select/Build: If you want to review and modify the invoices selected in the payment batch before you format payments, choose Select Invoices and Build

Payments to have Payables select invoices and build payments. (Payable automatically builds payments when you initiate invoice selection.)  After the build process is complete, you continue to process the individual payment batches in the Payment Batches window.

 • Format: If you want to format the payments without modifying them, also select Format Payments to have Payables automatically format payments. After formatting is complete, continue to process the individual payment batches in the Payment Batches window. or, if you are creating electronic payments, proceed with Confirming Payment Batches.

 • Confirm: Select Confirm Payment Batch to confirm electronic payments. You cannot select this option if any payment batches in the set use payment documents set up for checks. Confirming is the final step in processing a payment batch. This step is very important because it updates the payment history of invoices paid in a payment batch and associates payment document numbers with the invoices and invoice payments. Also, if you have any unconfirmed payment batches, you cannot close a period or use the same payment document for any other payments until you confirm the payment batch. If all the documents in a payment batch are damaged, you cannot confirm the batch and must cancel the entire payment batch. You will assign one of four status types to each document:

• Setup. Payable automatically displays the setup checks used to align your printer. Payable automatically voids these checks when you confirm a payment batch. You control the number of setup checks in the Payment Document region of the Bank Accounts window.

• Printed. Either the checks printed properly or the Electronic payments formatted correctly. Ranges of Printed documents must end on a negotiable document.

• Skipped. The printer skipped over these checks and nothing printed on them. You can reuse these documents.

• Spoiled. These documents are ruined and you cannot reuse them. For example, the printer malfunctioned and ruined the documents. Payable automatically voids these documents when you record them as spoiled.

You may have check overflow, a situation where there are more invoices paid by a check than can fit on the remittance stub of one check. If you use the check overflow method Void except Last, Payables voids all checks except the last one for the supplier site. You should record the status of all the checks as Printed.

How to void payment after print and send a check?

Stopping Payments

After you call your bank to initiate a stop payment on a payment document, you can record the stop payment status in Payables. You can then either void the payment to reverse the accounting and payment records, or you can release the stop payment to reset the invoice status to negotiable. You can review all current stop payments in the Stopped Payments

Voiding Payments

When you void a payment, Payables automatically reverses the accounting and payment records so your general ledger will have the correct information, and so the status of the paid invoices is reset to Unpaid. Payable also reverses any realized gains or losses on foreign currency invoices recorded as paid by the payment.

When you void a payment, you can select the action you want Payables to take on the invoices paid by the void payment. You can choose to place the invoices on hold, cancel the invoices, or do nothing with the invoices, leaving them available for payment. If you enable the Allow Interest Invoices option for a supplier site, Payables automatically reverses all related interest invoices when you void a past-due payment for the supplier site. If you withhold taxes at payment time and you void a payment that paid an invoice with an associated withholding tax invoice, then Payables automatically creates a negative (reversing) invoice for the tax authority supplier to offset the amount of the tax withholding invoice. You

Void Payment Restrictions:

INVOICES PAID BY ANOTHER PAYMENT: When you void a payment, you cannot cancel a related invoice if it was partially paid by a second payment. Instead, when you choose Cancel Invoice, the system applies an "Invoice Cancel" hold to the invoice for your reference. You can release the hold manually in the Invoice Holds tab.

CANCELLING ASSOCIATED INVOICES. If you attempt to cancel an invoice that has been partially paid by another payment by using the Cancel Invoice Action, instead of canceling the invoice, Payables applies an Invoice Cancel hold to the invoice. This hold is manually releasable.

CLEARED PAYMENTS: You cannot void a payment that the bank has already cleared.

PREPAYMENTS: You cannot void payment on a payment document that pays a prepayment that you have applied to an invoice. You must first unapply any prepayments, and then you can void the payment.

What is payment / payable document?

Payable or Payment document is a order to pay amounts to supplier like Cheques, Demand Draft, Electronic Payment etc. Use the Payment Documents window to define payment documents for an internal bank account. Examples of payment documents are checks or electronic payments. You must create at least one payment document before you can use a bank account to create invoice payments. You can create an unlimited number of payment documents for an internal bank account.

When you define payment documents, you can only select payment formats that use the same currency as the bank account currency. If the bank account is a multiple currency bank account, you can choose foreign currency payment formats or multiple currency payment formats.

GL Accounts Region of the Bank Accounts Window

You cannot enter GL Account information for Supplier bank accounts.

Cash. Enter the cash account you are associating with a bank account. This account must be an asset account.

When you create a payment, Payables creates accounting entries to credit this cash account. For future dated payments, on the payment’s maturity date, Payables credits the cash account and debits either the future dated payment account or the clearing account (depending on how you account for payments).

If you set up Payables to account for payments at clearing time, then Payables creates accounting entries for your unreconciled invoice payments to credit your cash clearing account, instead of your cash account, using the cash clearing account defined in the next field. After you reconcile your payments using Oracle Cash Management, when you create accounting entries for the reconciled invoice payments, you debit your cash clearing account and credit the cash account you enter here.

If you enable the Automatic Offsets Payables option and enable the Pooled Account option in the Payables Options region of the Bank Accounts window, then when you create a payment, Payables creates a corresponding cash accounting entry for each liability distribution that you pay using this bank account. Payable uses the cash account you define here together with the Automatic Offset Method you choose in the Payables Options window to create the cash accounting entry.

Cash Clearing. If you set up Payables to account for payments at clearing time, enter the cash clearing account you are associating with a bank account. When you create accounting entries for your unreconciled invoice payments, you credit your cash clearing account using this account. After you reconcile your invoice payments using Oracle Cash Management, when you create accounting entries for the cleared payments, you debit this cash clearing account and credit this bank account’s cash account. The account you enter here defaults to the Cash Clearing Account field in the GL Accounts region of the Payment Documents window.

Confirmed Receipts. If you use Automatic Receipts in Receivables and are required to send receipt information to your customer before applying the receipt, the receivable is maintained in the Accounts Receivable account until it is confirmed by the customer. Upon confirmation, it is reversed from the Accounts Receivable account and placed into the Confirmed Receipts account. If you are not required to send receipt information to your customer, the receivable is automatically reversed from Accounts Receivable and placed into Confirmed Receipts.

Future Dated Payment. If you will use this bank account to disburse future dated payments, enter the default value for the future dated payment account. This value will default to payment documents you enter for this bank account. When Payables accounts for future dated payments, it uses the future dated payment account from either the payment document or supplier site, depending on how the Use Future Dated Payment Account Payables option is set.

Multiple Currency Payments. Enable this option if you want to use this bank account to pay invoices entered in multiple currencies. You can select this option only if the Use Multiple Currencies Payables option is enabled and if the bank account is in your functional currency.

Prepayments Overview

A supplier might send an invoice that references a prepayment. If a supplier reduces the invoice amount by the amount of the prepayment and associated tax, you can use the Prepayment on Invoice feature to enter the invoice.

You can enter two types of prepayments: Temporary and Permanent.

Temporary Prepayments

Temporary prepayments can be applied to invoices or expense reports you receive. For example, you use a Temporary prepayment to pay a hotel a catering deposit. When the hotel’s invoice arrives, apply the prepayment to the invoice to reduce the invoice amount you pay.

Permanent Prepayments

Permanent prepayments cannot be applied to invoices. For example, you use a Permanent prepayment to pay a lease deposit for which you do not expect to be invoiced.

Key Processes

Create Accounting Process

The parameters you use when you submit the Create Accounting program determine how accounting entries are transferred to the ledgers in your general ledger.  Accounting can be created in draft or final mode. You can transfer subledger accounting entries in summary or detail. Regardless of the option you choose, you can always drill down to the subledger to view the details that build the general ledger balances.

Create Accounting – Draft

If you submit the Create Accounting in Draft mode, you can review the subledger accounting entries generated for your Payables transactions. If any accounting is incorrect, you can update the transaction in Payables to correct the accounting before you create final accounting.

Create Accounting – Final

Run the Create Accounting process in Final mode to generate your final subledger accounting entries. Once you generate final accounting, you cannot correct the accounting. Instead, you must enter correcting transactions in Payables.

Integration with Other Applications

Other applications that integrate with Oracle Payables such as Oracle Assets, Oracle Procurement, Oracle Projects, and Oracle Inventory now provide Payables-related accounting information to Oracle Subledger Accounting. Invoice Lines and Distribution details continue to be provided to Payables directly.

Transfer Journal Entries to GL

Submit the Transfer Journal Entries to GL process to transfer accounting information from Oracle Subledger Accounting to the GL Interface. The Transfer Journal Entries to GL process transfers summary or detail accounting activity for any open period into the general ledger interface. When more than one period is open, the transfer selects transactions from the first open period up to the entered transfer date, and passes the correct accounting date and financial information into the general ledger interface.

Journal Import

Once subledger accounting entries are transferred to the GL Interface table, use the Journal Import process to import accounting information from the GL Interface to the general ledger. 

Posting Journals

Use the post journals process to update the account balances of your detail and summary accounts. You can post actual, budget, or encumbrance journal batches.

How many types of accounting methods in Payable?

When you set up Payables you choose a primary accounting method. In the Payables Options window you can also choose a secondary accounting method. The accounting method determines the types of accounting entries Payables creates. For each accounting method, cash or accrual, you choose a Ledger in which you will account for transactions.

 You account only for payments, and do not record liability information for invoices. The payment accounting entries typically debit your expense or asset account and credit your cash or cash clearing account. When you create accounting entries, Payables might also create entries for discount taken and foreign currency exchange gain or loss.

You create accounting entries for invoices and payments. The invoice accounting entries generally debit your expense or asset account and credit your liability account. For prepayments, Payables creates accounting entries that debit your prepayment account and credit your liability account. For prepayment applications, Payables creates accounting entries that debit your liability account and credit your prepayment account.

Payment accounting entries typically debit the liability account and credit the cash or cash clearing account. Payables might also create accounting entries for discount taken and foreign currency exchange gain or loss.

When you reconcile payments using Oracle Cash Management, Payables might also create accounting entries for cash clearing, bank charges, bank errors, and foreign currency exchange gain or loss between payment and reconciliation time. You maintain one Ledger for cash accounting and one Ledger for accrual accounting. You choose which will be your primary and your secondary Ledger. Invoice accounting entries are recorded for your accrual Ledger, and payment accounting entries are recorded in both your cash Ledger and accrual Ledger.

Combined basis accounting allows you to produce financial reports for either your cash or accrual Ledger. For example, you may want to manage your company on an accrual basis, but require cash basis accounting information for certain regulatory reporting on a periodic basis.

 How many accounting options in Financials Options in AP?

Liability. Payable assigns this account as the default Liability Account for all new suppliers you enter. You can override this value during supplier entry. If you use Accrual Basis accounting, then the Liability Account for an invoice determines the liability account(s) charged when you create accounting entries for invoices.

Prepayment. The Prepayment account and description for a supplier site’s invoices. The Financials option value defaults to new suppliers, and the supplier value defaults to new supplier sites.

Future Dated Payment. If you use future dated payments, then enter a value for Future Dated Payment account. This value defaults to all new suppliers and new bank accounts. The supplier value defaults to all new supplier sites. The bank account value defaults to new payment documents.

When Payables accounts for future dated payments, it uses the Future Dated Payment Account from either the supplier site or the payment document, depending on the option you select in the Payment Accounting region of the Payables Options window.  If you relieve liability payment time, this should be an asset account. If you relieve liability at future dated payment maturity, then this should be a liability account.

Discount Taken. If you choose to distribute your discounts to the system Discount Taken Account, Payables uses this account to record the discounts you take on payments. Use the Payables Options window to select your method for distributing discounts for your invoices.

PO Rate Variance Gain/Loss. Payable uses these accounts to record the exchange rate variance gains/losses for your inventory items. The variance is calculated between the invoice and either the purchase order or the receipt, depending on how you matched the invoice. These accounts are not used to record variances for your expense items. Any exchange rate variance for your expense items is recorded to the charge account of the purchase order. Payable calculates these amounts during Payables Invoice Validation.

Expenses Clearing. This account is optional when you use the Company Pay payment option of Oracle Internet Expenses. Payable uses this as a temporary account to record credit card transaction activity. Payable debits this account when you create an invoice to pay a credit card issuer for credit card transactions. Payables credits this account with offsets to the original debit entries when you submit Expense Report Import for an employee expense report entered in Internet Expenses that has credit card transactions on it. If you enter an expenses clearing account in this field and in the Expenses Clearing Account field of the Card Programs window, the account entered in the Expenses Clearing Account field of the Card Programs window takes precedence

Foreign Currency Transactions

You can enter all types of invoices, including prepayments, expense  reports, and recurring invoices, in a foreign  currency and then pay them in that currency. When you enter an invoice, Payables uses the exchange rate you select to convert the invoice distributions into functional currency. You define your functional currency during setup for your Ledger. When you create a payment for a foreign currency invoice, Payables uses the exchange rate you enter at that time to convert the payment lines into your functional currency. Any difference in functional currency between invoice entry and invoice payment is recorded as realized Gain/Loss.

When you reconcile your payments using Oracle Cash Management, Payables also creates Gain/Loss accounting entries to record differences between the original payment amount and the cleared payment amount due to exchange rate fluctuations. Transactions must have any necessary exchange rates before you can account for them. Payables creates accounting entries for your invoices and payments in both the functional and foreign currency. To make a foreign currency payment, use a bank account with a  payment document that uses a payment format that is either multi–currency or defined for the foreign currency. The following diagram shows the general steps you follow to enter and pay a foreign currency invoice.

System Setup for Multiple Currency

* In the Currencies window, enable the foreign currencies you want to use.

* Choose your functional currency in the Ledger window.

* Define your Payables options in the Payables Options window.

Enable the Allow Multiple Currency Payables option. Enable the Require Exchange Rate Entry Payables option for foreign currency invoice entry. (optional) Define a default exchange rate type which defaults to all foreign currency invoices. (optional) Define a default invoice and payment currency which defaults to all supplier sites you enter. (optional) Select one or both options for Account for Gain/Loss: When Payment is Issued, When Payment Clears. (optional) Select an option for Calculate Gain/Loss: For Each Invoice or For Total Payment.* Define PO Rate Variance Gain/Loss Accounts when you define Financials Options or during bank setup.* Define Conversion Rate Types. See: Defining Conversion Rate Types (Oracle General Ledger User Guide).q Enter Daily Exchange Rates. See: Entering Daily Rates (Oracle General Ledger User Guide) (optional)* Define foreign currency bank accounts and payment documents.

Defining Foreign Currency Bank Accounts

Prerequisites

* Enable the Use Multiple Currencies Payables option. * Enable the currencies you need in the Currencies window. See:

To define a foreign currency bank account:

1. Define a basic bank account for receipts or disbursements. If you are defining a bank account for disbursements, in the Payables Options tabbed region, enter Realized Gain and Realized Loss Accounts. Proceed with Defining and Maintaining Payables Payment  . Choose a payment document that uses a payment format with the same foreign currency as the bank account.

2. Save your work.

Defining and Maintaining Payables Payment Documents

Use the Payment Documents window to define payment documents for an internal bank account. Examples of payment documents are checks or electronic payments. You must create at least one payment document before you can use a bank account to create invoice

Defining Multiple Currency Bank Accounts

A multiple currency bank account is an account that accepts payments in more than one currency. If you define a multiple currency bank account for payments, the currency of the bank account must be the same as your functional currency.

Prerequisites

* Enable the Use Multiple Currencies Payables option. (Oracle Payables) * Enable the currencies you need in the Currencies window.

To define a multiple currency bank account:

1. Define a basic bank account for receipts or disbursements.

If you are defining a bank account for receipts, in the Receivables Options region, enable the Multiple Currency Receipts option. If you are defining a bank account for disbursements, in the Payables Options region, enable the Multiple Currency Payments option and enter Realized Gain and Realized Loss accounts. Proceed with Defining and Maintaining Payables Payment  . You can define payment documents that use a payment format with any currency.

2. Save your work.

Monthly Pay Integration with banks to credit salary

If you use a third party or custom positive pay program to notify your bank of negotiable and non–negotiable checks, you can submit the Positive Pay Report in Payables to create a flat file that contains information for checks you specify. You can then use your positive pay program to format the payment data in the format required by your bank and transmit the data electronically to your bank. You set up your positive pay program to periodically dial up your bank and download a list of exceptions. An exception is a check that is listed on the file you submitted to your bank that is presented to the bank for cashing twice, or is not on the list, or has an amount different from the amount listed.

If you do not approve or reject an exception, the bank will pay the check as presented. Future dated payments are included as negotiable payments even if they have not yet matured.

Setting-Up Your System for Positive Pay _To set up Payables for integration with Positive Pay:

1. In your positive pay program, specify the path for the output of Payables flat file. The file will be in your ap_out directory.

2. Optionally prevent certain users from creating positive pay files from the Payment Batches Actions window by hiding the Create Positive Pay check box for their responsibility. 

3. Set your third party or custom positive pay program to automatically dial the bank at regular intervals and download exceptions.

4. For each bank account you will include on positive pay files, confirm that the Bank Account number and Branch number in the Banks window is correct. The positive pay file must contain accurate bank information. For U.S. based banks, enter the 9–digit ABA transit routing code in the Bank Branch Number field.

Prerequisite

In the Banks window, enter the Branch Number and Bank Account Number for the bank you are using for the payment batch. The positive pay file must contain accurate bank information. For U.S. based banks, enter the 9–digit ABA transit routing code in the Bank Branch Number field.

Mass Additions Create Program

Run the Mass Additions Create program to transfer capital invoice line distributions from Oracle Payables to Oracle Assets.

For foreign currency assets, Payables sends the invoice distribution amount in the converted functional currency. The mass addition line appears in Oracle Assets with the functional currency amount. Oracle Assets creates journal entries for the functional currency amount, so you must clear the foreign currency amount in your general ledger manually.

After you create mass additions, you can review them in the Prepare Mass Additions window in Oracle Assets. Prerequisites

* Set up your corporate book in Oracle Assets.* Set up your asset categories in Oracle Assets for the corporate book you want to use with mass additions. * Enter invoices in Oracle Payables Create accounting entries for the invoices. * Transfer accounting entries to general ledger.* Ensure your invoice line distributions meet the necessary criteria to be imported from Payables to Oracle Assets.

_ To create mass additions for Oracle Assets:

1. Navigate to the Submit Request window.

2. Choose Mass Additions Create from the request Name list of values.

3. In the Parameters window, enter a GL Date and Book.

GL Date: Payables creates mass additions from invoice distribution lines with GL dates that are on or before the date you enter in this field. You must enter a date on or before the current date. Book: Enter the name of the Oracle Assets corporate book for which you want to create mass additions.

4. Choose Submit to submit the concurrent request Payables automatically runs the Mass Additions Create report so you can review a list of the mass additions created.

5. Review the log files and report after the request completes.

There are basically 2 types of items: expense and inventory items.
To get an expense item over to FA these steps are necessary:

1. Attached asset category to item in Master Items (PO).
2. Created a Purchase order with the expense account as an existing asset clearing account in an FA category. When Accrual Upon Receipt is turned On, AP realizes that the account it is dealing with is really an Asset Account from PO, so it checks the Track as Asset flag to 'Y' and allows the Mass Additions Create process to run.
3. Perform Receiving activity in PO.
4. Match Invoice to the PO.
5. Run Program Payables transfer to GL.
6. Run Program Create Mass Additions.
7. Prepare Mass Additions in FA.
8. Post the mass addition.

Automatic Payment Programs

If you use Oracle Payables, use the Automatic Payment Programs window to define payment programs. If you use Oracle Receivables, use this window to define additional receipt and remittance format programs.

Payables users:

Use the Automatic Payment Programs window to define payment programs that you use to format payment documents and separate remittance advice. You specify whether each program is for building payments, formatting payments, or creating a payment remittance advice.

Payable predefines one program for building payments and many standard programs for formatting payments. Payable also predefines a program for creating a separate remittance advice for payments. You can select these predefined programs when you define a payment format, or you can use these programs as templates for creating your own custom payment programs.

Receivables users:

Use the Automatic Payment Programs window to define additional receipt format programs you use to create receipt documents such as checks or bills of exchange. You can define as many receipt programs as you want. Payable already provides sample receipt programs that you can use to create and format receipt and remittance documents. If you need a different automatic receipt program, then you should copy the sample program and modify it. You specify whether each program is for the creation, printing, or transmission of automatic receipts or remittances.

Defining Payment Programs for Payables and Defining Receipt and Remittance Programs for Receivables

Payables Prerequisites

* If you are not using Payables predefined payment programs, define a payment program using Oracle Reports.* Register your program in the System Administrator’s Concurrent Programs window. Optionally assign a default printer to the program. If you do not assign a default printer then when you use the payment program, Payables will use the printer you defined as your default as the Printer profile option.

Receivables Prerequisites

* Create a receipt program using Oracle Reports.* Register your program in the System Administrator’s Concurrent Programs window.

To define payment, receipt, or remittance programs:

1. In the Automatic Payment Programs window, enter a unique Name for the program you are defining. This name will appear on a list of values whenever you need to enter the program name. Enter a program Type. Enter the Registered Name. The concurrent manager uses the Registered Name to refer to the payment program.

2. Save your work.

Automatic Payment Programs Window Reference Name. The name of the program you are defining. This name will appear on a list of values when you need to enter the name of the program. If you use Receivables, since you use both a format receipts and a transmit receipts program with a single receipt format, you should give both the same name. You can use the same name if the program type is different.

Payables Types:

Build Payments. A program Payables uses to build payments for the invoices in a payment batch. Payables submits this program during payment batch selection to calculate the payment totals for your payments and determine on which payment documents the payment appears.

Payables provides a predefined Build Payments program called the Standard Build Payments Program. Payables uses this standard build program to group the selected invoices for each payment, order the payments using the order option you specify in the Payment Batches window, create any necessary overflow documents, and determine the total number and amount of payments for a payment batch.

You do not need to define any additional Build Payment programs. Use the Standard Build Payments Program that Payables provides.

Format Payments. A program Payables uses to format your payment documents. During the Format Payments program, Payables uses your payment format to create the layout of your checks or electronic payments.

Remittance Advice. A program Payables uses to format a separate remittance advice document. For example, you can use a remittance program to create separate remittance advice documents for your electronic funds transfers.