Allocation Concept

You can allocate charges other than the cost of goods to invoice distributions. Allocation records the amount of the tax, freight, or miscellaneous charge that is associated with an invoice distribution. If you allocate a freight or miscellaneous charge to a distribution that has been matched to a receipt, then the charge is included in the cost of the item on the receipt. This enables you to accurately record all costs associated with a receipt item.

You allocate the freight cost to the computer and printer, but not to the distribution for service. You can specify the freight amounts allocated to each invoice distribution, or you can have the system prorate the allocated amounts based on the Item distribution amounts.

The following table shows the charge distribution types that you can allocate, and to which distribution types you can allocate them. You cannot allocate Item, Prepayment, or Withholding Tax distributions to other distributions.

Automatic Allocation by Payables
Payables automatically records the charge allocation for freight or miscellaneous charge distributions when the charge distributions are created by any of the following methods:

  • You prorate freight or miscellaneous charges during a match of a material invoice to a purchase order or receipt.
  • You create Freight or Miscellaneous distributions by allocating to other distributions.
  • You match a credit memo or debit memo to an invoice for the full amount of the invoice.

Payables does not automatically record freight, or miscellaneous charge allocations when it creates distributions in any other way, including:

  • You match a credit memo or debit memo to an invoice for less than the full amount of the invoice.

During Invoice Validation, if the amount of a Freight, Miscellaneous, or Tax distribution is not fully allocated (either not allocated, or a corresponding distribution was reversed or deleted) and is not associated with a receipt, then Payables prorates the allocation to all eligible distributions on the invoice.

Oracle Applications Fusion Cloud - Inventory

Oracle Cloud/Fusion Procurement training will help you develop the fundamental skills required to set up and use the Procurement module. This training covers all the tasks, setups, forms and reports used in Procurement and related modules