Accounts Payable

A payables system is the last stage of supply-chain management. It allows companies to pay suppliers for merchandise and services. There are several opportunities in Oracle Payables for automation, because the terms and conditions are known at the purchase order (PO) stage and, assuming that the goods are accepted, payment follows at a fixed time later.

Invoices

An invoice is an itemized list of goods shipped or services rendered, with an account of all costs. Oracle Payables lets you capture all the attributes of the real-life invoice documents you receive from your suppliers. When you enter an invoice in Payables, the invoice information is divided between the invoice header and the invoice lines.

Invoice Workbench

You usually enter supplier invoices in either the Invoice Workbench or the Quick Invoices window.

Invoice Workbench
Used to enter any invoice directly into the Payables system. Use this instead of the Quick Invoices when entering complex
invoices or invoices that require online validation and defaulting. Also used when entering an invoice that needs immediate action, such as payment.

Functionality available only by invoice entry in the Invoice Workbench Use the Invoice Workbench to:
• Enter Prepayment type invoices Invoices
• Enter Debit Memo type invoices
• Match Credit Memos to invoices
• Calculate taxes on invoices

Online results seen only in the Invoice Workbench Although the following occurs during import, in the Invoice Workbench you can see online results of the following:
• Tax lines and distributions
• Allocation
• Automatic sequential voucher numbering

AP: Use Invoice Batch Controls
The above profile option needs to be set as Yes to access the AP Batch window, else the syetem would throw the following error

 

 

• Enter invoice defaults at the batch level that override system or supplier site defaults for all invoices in the batch.
• Maximize accuracy by tracking variances between the control invoice count and total and the actual invoice count and total resulting from your invoice entry.
• Easily locate a batch online and review the name of the person who created the batch and the date it was created.

1. Enable the AP: Use Invoice Batch Controls profile option. This profile option is setup to allow creation of invoice either in batch or in single mode. The profile option can be set up in user level and should be NO to create invoice without batch.

Enter Invoices with Matched PO & Receipts

You can match Payables invoices to purchase orders to ensure that you pay only for the goods that you have ordered, or you can match to purchase order receipts to ensure that you pay only for goods that you have received. Purchase order matched invoices are invoices that you match to any of the following:

• Purchase order shipments
• Purchase order receipts
• Purchase order receipt lines
• Purchase order distributions

Entering Basic Invoices in the Invoice Workbench

You can use the Invoice Workbench to enter basic invoices. A basic invoice is a trade invoice you receive from a supplier that will not be matched to a purchase order or receipt.

Prerequisite
Enter the supplier and at least one pay site in the Suppliers window Select Standard or Mixed for the invoice Type.
Note: Standard invoices must have positive lines and Mixed invoices can have positive or negative lines.

Header Information

• Automatically using a Distribution Set. Review the Distribution Set for the line. If the Distribution Set defaulted from the invoice header, you can change the distribution set as required.
• Automatically by Matching to Purchase Order. If the invoice is matched to a purchase order, the distributions default into the invoice from the purchase order. Review the distributions by clicking Distributions.
• Manually in the Distributions Window. To manually enter distributions for the line, click Distributions. You cannot enter distributions manually for the following types of invoice lines: purchase order/receipt matched lines, prepayment applications/unapplications, automatic withholding tax lines, or lines related to corrections.
• Manually by allocating charges. If you are entering a Freight or Miscellaneous line, you can create distributions by allocation. Click Allocation

• Automatically :  Click Calculate Tax and E-Business Tax determines the applicable taxes based on the invoice header and line information and calculates the appropriate tax lines and distributions.
• Manually : If your tax setup permits, you can enter tax lines.

Creating Distributions by Allocation

You can use the Charge Allocations window to automatically create freight or miscellaneous distributions.
The charge distributions you create are allocated Freight or Miscellaneous distributions. Allocation associates a charge with the cost of an item on a receipt. This allocation information is used to record the full cost of a receipt item if you use one of the Periodic Costing options available in Oracle Cost Management.

• The charge amount and type (freight or miscellaneous)
• The distributions to which the charge will be allocated
• The charge amount associated with each distribution. You can either specify an exact amount to allocate to each distribution, or you can prorate the charge amount across all selected distributions.

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 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.

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

Payment Schedules

When you first save the invoice header, Payables automatically schedules payment for each invoice based on the Payment Terms and Terms Date you enter for the invoice. Then during Invoice Validation, the system recreates the scheduled payments and overwrites any manual adjustments if:

1. The Recalculated Scheduled Payment Payables Option is enabled, or
2. The Exclude Tax from Discount Calculation Payables option is enabled and you have made changes to the tax amount on the invoice.

• Payables uses the Payment Terms definition to calculate the due date, discount date, and discount amount for each scheduled payment. For example, if an invoice has Payment Terms of Net 30, Payables calculates the due date as 30 days after the Terms Date.

• You can assign default Payment Terms to a supplier.
• If you enable the Recalculate Scheduled Payment Payables option, Payables will also recalculate your scheduled payments during Invoice Validation. This recalculation is based on your most favorable available payment terms and start dates.
• If you enable the Exclude Tax from Discount Calculation Payables option and the invoice has changes to the tax amount after the invoice is initially saved, Invoice Validation will automatically recalculate the Discountable Amount and recreate the scheduled payments to reflect the new Discount Amount. You can query the invoice to view the new Discount Amount in the Scheduled Payments tab.

• System. System date on day of invoice entry.
• Goods Received. The date you receive goods for invoices you match to purchase orders.
• Invoice. Invoice date.
• Invoice Received. Date you receive an invoice.

Invoice Matching : How and What

1. First you enter the invoice header details and selects the Match option as Purchase order/Recepit/Invoice.

 
 

 

 

 

Prepayments

• 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 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.
• The default ‘Settlement Date’ is calculated based on Prepayment Settlement Days Payables option. You can update this value.
• In the Invoice Workbench you can enter and apply prepayments. In the Quick Invoices window you cannot enter prepayments, but you can apply existing prepayments to invoices you enter.

 

1. On a prepayment, you can enter any number of distributions, either manually, or automatically by purchase order matching, distribution sets, or allocating. You can also take discounts on prepayments.
2. You can apply paid Temporary prepayments on and after the prepayment settlement date. You can apply only Item distributions from the prepayment. The prepayment remains available until you apply the full amount of the prepayment Item distributions to one or more invoices. You can review the Prepayment Status Report to check the status of all prepayments in Payables.
3. When you enter a Standard invoice in the Invoice Workbench, or enter an expense report in the Expense Reports window, Payables notifies you if you have available prepayments for the same supplier.
4. You apply prepayments to invoices and expense reports differently, depending on where you enter them: Invoice Workbench, Quick Invoices, Expense Reports window, or Oracle Internet Expenses

When you enter a prepayment, Payables provides a default repayment account for each Item distribution. During prepayment entry, you can override the accounts Payables provides.
Payables looks in the following order and uses the first valid prepayment account it finds: supplier site, supplier, Financials option.
However, if the prepayment is purchase order matched and if the Build Prepayment Accounts When Matching Payables option is enabled, then Payables builds each account for you and defaults the built account if it is a valid accounting combination.

Applying Prepayments to Invoices and Expense Reports

You can apply the available amount of Item type distributions from a Temporary type prepayment to one or more invoices to offset the amount you pay on the invoice(s). 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.

• Applying Prepayments in the Invoice Workbench
• Applying Prepayments in the Quick Invoices Window
• Applying Prepayments to Invoice Records in the Payable Open Interface
• Applying Prepayments to Expense Reports

Credit and Debit Memos

Enter a credit or debit memo to record a credit for goods or services purchased.
Credit/debit memos are netted with basic invoices at payment time.

• Credit Memo: Negative amount invoice created by a supplier and sent to you to notify you of a credit.
• Debit Memo: Negative amount invoice created by you and sent to a supplier to notify the supplier of a credit you are recording. Usually sent with a note explaining the debit memo.

• Enter a skeleton Distribution Set.
• Match to the original invoice you entered.
• Match to a purchase order or receipt.

• You match them to invoices you paid using a discount.
• You use the same payment terms that were used on the original invoice
• The credit memo must be paid within the terms of the discount.

Mixed Invoices

Mixed Invoices are invoices or credit/debit memos for which you can perform both positive and negative matching to purchase orders and to other invoices.
For example, you can enter an invoice for -$100 with Invoice Type Mixed. You can match to an invoice for $-200, and match to a purchase order for $100.

To enter a Mixed invoice:
1. In the Invoice Workbench, enter a Mixed invoice Type. Enter all basic invoice information.
You can enter either a positive or negative invoice amount.

Recurring Invoices

You can enter invoices for periodic expenses for which you may not receive invoices, such as rent. To enter recurring invoices, define a recurring invoice template, then create invoices based on that template.
Recurring Invoices can also be used to create debit memos.

Prerequisites
Recurring invoices are affected by the following prerequisites.
1. Supplier Information : Supplier for which invoice 'll be created.

2. Special Calendars and Term Date Basis: Determine the frequency of your recurring invoices. For example, once a week or monthly. In addition, consider how the due date will be determined when you define your special calendar. 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. If the Terms Date Basis is 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, the first day of the period in which the recurring invoice is created.

 

Payment Requests

Payables provides the ability to disburse funds to a party (a payee) who is not defined as a trading partner in your supplier master. E-Business Suite products, such as Oracle Receivables and Oracle Loans, can submit disbursement requests to Payables, where you can disburse the funds and manage the payment process using the payment management features that are available in Payables. When a disbursement request is submitted to Payables, it is recorded as a payment request.

You can submit a payment request from another application, for example, from Receivables to pay a customer for an On Account Credit Memo, or from Loans to disburse funds for a loan, and Payables will verify, account, tax, and approve the
payment request. You can track the progress of the payment request in the originating application. Once the payment request is approved, you can report and audit the payment request in Payables.

You can only submit a payment request from other applications; you cannot enter a payment request for a payee directly in Payables.

The payment request process is as follows:
1. Submit a request to disburse funds from another application, such as Receivables or Loans. Note that you cannot submit a payment request in Payables.
2. Payables automatically creates a payment request, in real-time.
3. Once the payment request is created, you can search for it just as you would search for an invoice. Enter Payment Request in the Type field and enter the payee name in the Trading Partner field. Note that because the payee is not a supplier, do not enter a Supplier Number.
4. If the payment request requires approval, use the Invoice Approval Workflow to approve payment requests.
5. Payables applies holds to the payment request if there are any exceptions.
6. Once the holds are released and the payment request is approved, it can be paid as a single payment or as part of a payment batch.
Once the payment request is paid, your auditors can view the request to disburse funds in the originating application and the payment request in Payables.
Once you enter a payment request, you cannot delete payment request or update payment request fields. If necessary, you can cancel the payment request or void the payment, just as you would for an invoice. Payables notifies the originating application to respond to these actions.

Setting Up Payment Requests:
There are no specific setup steps required to use payment requests; however, the setup steps listed below do affect the payment request process. Review these steps if you plan to use payment requests.

Oracle Applications
Document Sequencing – Payment Request Document Category If the Sequential Numbering profile is set to Partially Used or Always Used, ensure that you have assigned a sequence to the Payment Request document category.

Oracle Payments

• You can use the following Oracle Payments setups to define custom payment methods for payment requests, define defaulting rules, and specify whether you want to manage payment requests separately from other payments.
• Payment Method Controls
• Payment Method Defaulting Rules
• Payment Instruction and Report Formats
• Payment Attribute Validations
• Payment Process Profiles
• Disbursement Option

Validation

Before you can pay or create accounting entries for any invoice, the Invoice Validation process must validate the invoice.

Invoice Validation checks the 

1. period status
2. tax
3. exchange rate
4. distribution information
5. matching(IMO, invoice matching option)
   
6. tollerence

• Online by using either the Validate or the Validate Related Invoices check box in the Invoice Actions window.
• Online by using the Validate button in the Invoice Batches window.
• Batch by submitting the Payables Invoice Validation program from the Submit Request window.

Suppliers

Set up suppliers in the Suppliers window to record information about individuals and companies from whom you purchase goods and services. You can also enter employees whom you reimburse for expense reports.

When you enter a supplier that does business from multiple locations, you store supplier information only once, and enter supplier sites for each location. You can designate supplier sites as pay sites, purchasing sites, RFQ only sites, or procurement card sites. For example, for a single supplier, you can buy from several different sites and send payments to several different sites. Most supplier information automatically defaults to all supplier sites to facilitate supplier site entry. However, you can override these defaults and have unique information for each site.

The system uses information you enter for suppliers and supplier sites to enter default values when you later enter transactions for a supplier site. Most information you enter in the Suppliers window is used only to enter defaults in the Supplier Sites window. When the system enters that information in a later transaction, it only uses supplier site information as a default, even if the supplier site value is null and the supplier has a value. If you update information at the supplier level,
existing supplier sites are not updated.

When you enter a supplier, you can also record information for your own reference, such as names of contacts or the customer number your supplier has assigned to you.

 
 

Expense Reports and Credit Cards

• Expense reports entered in the Payables Expense Reports window.
• Expense reports submitted by your enterprise’s employees using Oracle Internet Expenses.
• Expense reports entered in Oracle Projects and then transferred from Projects to Payables.

• Enable the Create Employee As Supplier Payables option to automatically create suppliers from employees when you submit Expense Report Export.
• Enter the employee as a supplier in the Suppliers window before submitting Expense Report Export for expense reports.

• Payables.
• Oracle Internet Expenses.
• Oracle Projects.

Entering a basic expense report

Expense Report Import

• Expense Report Import (in 11i) and
• Expense Report Export (in R12).

Setting Up Suppliers and Supplier Sites

For every supplier, you can create an unlimited number of sites with different addresses and contacts. For example, for a single supplier, you can buy from several different sites and send the payments to only one site.

• You can designate supplier sites as one of the following types:

• For every supplier site, you can enter contact information (name, address, and telephone number) specific to that site. Contact information is for your reference only and is not used by the system.

• Perform a Find or Query on the supplier name.
• Submit a Suppliers Report.
• Submit a Supplier Audit Report to obtain a listing of suppliers whose names are the same up to a specific number of characters.
• Compare the supplier name with the names on these reports to ensure that the supplier does not already exist in the system.

Entering Basic Supplier Information

1. After verifying that a supplier does not already exist, set up a new supplier with a unique name in the Suppliers Summary or the Suppliers window. Use a naming convention to prevent future duplications (for example, Oracle Corporation, not Oracle Corp.)
2 If you do not enable the Automatic Supplier Numbering option in the Financials Options window, enter a unique supplier number.
3 Optionally, enter the Taxpayer ID, usually the tax identification number (TIN) for a company or the social security number for an individual.
4 If you are entering a value-added tax (VAT) supplier, optionally enter the VAT registration number in the Tax Registration Num field.
5 To prevent invoice or purchase order entry for this supplier after a certain date, enter the inactive date in the Inactive After field.

Bank Accounts/Accouting/Payment Region

How to Enter Supplier Information in the Bank Accounts Region
Use the Bank Accounts region to record the supplier bank accounts information that you use for making electronic payment transactions.
Prerequisite: In the Bank Accounts window, define the bank accounts for which your supplier is the account holder.
1. In the Name field, select the name of the bank account.
In the Number field, Oracle Payables displays the bank account number.
In the Cur field, Oracle Payables displays the currency for the bank account.
2. Select the Primary check box if you want to use this bank account as a default when you pay this supplier electronically.
3. In the Effective Dates From and To fields, enter dates to limit the time during which a supplier site uses this bank account as the primary bank account for receiving electronic payments.
Oracle Payables displays the supplier’s bank and branch information in the Bank and Branch fields.

Control/ Purchasing and Receiving option

Suppliers: Control Region
(N) Suppliers—>Entry (B) Open

Invoice Tax/Withholding Tax/Tax Reporting Region

Entering Employees as Suppliers

Suppliers: Classification Region
(N) Suppliers—>Entry (B) Open

Merging Suppliers

Although the system prevents you from entering duplicate supplier names, you may inadvertently define the same supplier by using two different names. For example, you might enter ABC Corporation and ABC Corp, or you might enter a contractor under his name and his company name. You might also create duplicate suppliers if you import suppliers from another accounts payable system.

• Use Supplier Merge to combine two or more suppliers that you identify as duplicates. You can update purchase orders and invoices for the old supplier to refer to the new supplier. The Supplier Merge window also enables you to merge supplier sites so that any sites assigned to an old supplier can be reassigned to the new supplier.
• When you merge suppliers, you transfer invoices, purchase orders, or both from one supplier and site to another supplier and site. You can transfer to a new supplier and site unpaid invoices only or all invoices (including paid and partially paid invoices). Oracle Payables will not merge invoices if the merge would create a duplicate invoice for a supplier.
• For best auditing results, transfer both paid and unpaid invoices to a new supplier and site so you can identify duplicate payments easily. Also, transfer both purchase orders and invoices to a new supplier and site so all invoice and purchase order information refers to the same supplier.
• After you have merged suppliers, Oracle Payables automatically prints the Purchase Order Header Updates Report and the Supplier Merge Report as an audit trail of your supplier merge activity. The Supplier Merge Report also lists any duplicate invoices that it did not merge. Research the duplicated invoice. You can then update the invoice number if the invoice has not been paid or posted.

Invoices: Integration with Oracle Projects

Payments

• Distribute funds by using multiple payment methods
• Ensure that duplicate invoice payments never occur
• Pay only invoices that are due, and automatically take the maximum discount available
• Select invoices for payment, using a wide variety of criteria, and create payments automatically
• Print checks online
• Choose from different payment method options including checks, EDI, electronic funds transfer (EFT), and wire
• Record stop payments
• Void payments
• Review information online on the result and status of every payment

Manual Payment

A manual payment is a payment that you create outside of Oracle Payables. The following are two examples of manual payments:

• Handwritten checks
• Wire

• Create the payment outside of Payables.
• The invoice you paid must be approved, uncancelled, without holds, and must have the same currency as the payment.
• The bank account must have at least one payment document that uses the recorded or combined disbursement type.

Future Dated Payments - Manual payment

 

Computer-Generated Payments

You can create and print a computer-generated payment to pay a supplier for one or more invoices.
Examples of computer-generated payments are:

• Check run
• Electronic funds transfer (EFT)

• You can, optionally, change the payment document number, which defaults to the next available number.
• You can, optionally, change the payment currency if you are using a multicurrency bank account with a multicurrency payment document.
• The payment date must be in an open or future period.
• Unless you enable the Allow Pre-Date Payables option, you cannot predate a computer-generated payment.
•  

Recording Stop and Void Payments

 
 

(N) Payments—>Entry—>Payments (B) Actions

•  The accounting and payment records. Your general ledger will then have the correct information, and the status of the paid invoices is then reset to Unpaid.
•  Any realized gains or losses on foreign currency invoices recorded as paid by the payment
•  All related interest invoices when you void a past-due payment for the supplier site (if you enable the Allow Interest Invoices option for a 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 determine when you withhold taxes by the Apply Withholding Tax
  option you select in the Payables Options window.

Refunds

When a supplier or employee sends you a refund for an invoice payment you have made, you can record the refund in Payables. A refund closes out an outstanding credit balance, so you are actually making a negative payment for a credit balance. The credit balance can consist of the outstanding balance of any combination of the following documents, as long as the sum is negative and equals the refund amount: 

• Invoices
• Debit memos
• Credit memos
• Expense report

Accounting in Payables

Now in release 11i, Oracle Payables creates and stores accounting entries in the subledger. You can create accounting entries for invoice and payment transactions in Payables. Each transaction that has accounting impact is called an accounting event.
You can create accounting entries by submitting a batch program(Payables Accounting Process). Or you can create accounting entries from the transaction window for a specific invoice, invoice batch, payment, or payment batch. After Payables creates accounting entries, you can view the accounting entries in the following windows in Payables:

• View Accounting Lines, which also appears with the following names, depending on where you are in the application when you navigate to the window.

• Update Accounting Entries. In this window you can update accounts on any accounting entries that were created with invalid accounts. After you create accounting entries, you can submit the Payables Transfer to General Ledger Program to transfer them to an interface.

Accounting Events

An accounting event is a Payables transaction that has accounting impact. After an accounting event completes, you can create accounting entries for it by creating accounting entries for the category or document class that includes the event. The two document classes in Payables are invoices and payments. The following is the complete list of the accounting events in Payables, listed by document class.
Invoices
– invoice
– invoice adjustment
– invoice cancellation
– prepayment application
– prepayment unapplication

Payments
– payment
– payment adjustment
– payment cancellation
– (future dated) payment maturity
– payment clearing
– payment unclearing
The following descriptions give an overview of the event and the accounting that Payables does for each event. These descriptions assume that you use accrual basis accounting, unless there is a specific reference to cash basis accounting.

Invoice Event
The invoice event occurs when the Invoice Validation process successfully validates a new invoice. Accounting entries for this event are created for the accounts on each invoice distribution, and the liability account of the invoice.

• If you do not use Automatic Offsets, the system creates a single liability entry for the invoice liability account.
• If you use Automatic Offsets, then Payables creates liability entries to offset each distribution on the invoice. It builds the liability account based on your automatic offset method, either balancing segment or account.

• Reversal of an existing distribution for an accounted invoice
• Adding a new distribution to an accounted invoice
• Accounting for the invoice event for this invoice includes only the distributions with the earliest GL date. Payables groups the other distributions by GL Date and accounting for these groups of distributions are recorded for separate accounting events.

•  If you use accrual basis accounting, Payables creates entries to relieve the liability of the invoice accounting entries. Payables will also record any gains and losses if you account for gains and losses at payment issue.
•  For cash basis accounting, accounting for the payment event creates entries for the accounts on the paid invoice distributions. Payables creates accounting entries for this event only if the Account for Payment When Payment is Issued option is enabled in the Payables Options window.

Payables Setup

Distribution Sets

You can use a Distribution Set to automatically enter distributions for an invoice when you are not matching it to a purchase order. For example, you can create for an advertising supplier a Distribution Set that allocates advertising expense on an invoice to four advertising departments.

• Assign a default distribution set to a supplier site so that Oracle Payables will use it for every invoice you enter for that supplier site, or assign a distribution set to an invoice when you enter it.
• Enter a name that describes the use of the Distribution Set, and identify the distribution set as either full (with all percent amounts totaling 100%) or skeleton (with all percent amounts equaling 0%).

• Define an unlimited number of distribution lines for a distribution set.
• Optionally, assign an iIncome tax type or an invoice tax name to distribution sets.

Voucher Numbers and Document Sequences

You can assign a unique voucher number to each invoice and payment document in your Payables system so you have a unique identifier for each document. For example, you may get two invoices with identical invoice numbers from two different suppliers. If you assign a voucher number to each, you can locate each invoice based on its unique voucher number.

• Not used :The system does not enforce sequential numbering. It does ensure that any numbers entered are unique but it does not require the next available number. You cannot enable the Allow Document Override Payables Option. You cannot enter a document category or sequence name.
• Partially Used : The system enforces sequential numbering for all of the sequences that are assigned to a document category. If you create a document and no active sequence has been assigned to its document category, then Payables displays a warning message that a sequence does not exist. You can proceed without a sequence, or you can define and assign the sequence before you proceed.
• Always Used :The system enforces sequential numbering for all document categories. If you attempt to create a document and no active sequence has been assigned to its document category, then you cannot proceed until you define and assign a sequence.

• When a document is created, Payables automatically assigns the default document category to the document.

• You can use the document categories that Payables provides and you can define additional categories. If you enable Document Category Override in the Invoices and Payments regions of the Payables Options window, you can override the default document category that Payables automatically assigns to invoices or payments. If you enable this Payables option for payments you can also override the document category in the Payment Documents window.

Choosing a Set of Books

Payables Options

Use this window to set control options and defaults used throughout Payables. You can set defaults in this window that will simplify supplier entry, invoice entry, and automatic payment processing. Although you need to define these options and defaults only once, you can update most of them at any time to change controls and defaults for future transactions.

 

• Cash Basis Accounting You account only for cash transations. 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.
  Payables uses the payment date as the accounting date for your expense and cash journal entries.
• Accrual Basis Accounting 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.

• Combined Basis Accounting You maintain one set of books for cash accounting and one set of books for accrual accounting.
  You choose which will be your primary and your secondary set of books. Invoice accounting entries are recorded for your
  accrual set of books, and payment accounting entries are recorded in both your cash set of books and accrual set of books.
  Combined basis accounting allows you to produce financial reports for either your cash or accrual set of books. 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.
• 1. Primary Accounting Method Accounting method you use for your primary set of books. Although Primary Accounting Method is not a required field, you cannot create accounting entries until you have entered a primary accounting method. Payables creates accounting entries according to the accounting method you choose.

• 2. Secondary Accounting Method If you want to use combined basis accounting, choose Accrual or Cash for the accounting method you use for your secondary set of books. If you do not want to use combined basis accounting, choose None.

• 3. Set of Books (Primary/Secondary) Payables displays the primary set of books you selected in the Choose Set of Bookswindow. If you use a secondary set of books, select its namefrom the list of values. Your secondary set of books must have the same currency, chart of accounts, and calendar as your primary set of books.
• 4. Automatic Offset Method Enable Automatic Offsets by selecting Balancing or Account as your Offset Method if you want Payables to automatically create balancing accounting entries for your invoice and payment transactions.

• 5. Prevent Prepayment Application Across Balancing Segments. If you use Automatic Offsets, you can enable this option to prevent the application of a prepayment amount to an invoice or expense report amount that is charged to a different balancing segment.

Transfer to GL/Mathcing/Currency

Transfer to GL Payables Options
Use this region to set defaults for submission of the Payables Transfer to General Ledger Process. If you use Oracle General Ledger you can also set defaults for submitting Expense Report Import, which transfers accounting lines to Oracle General Ledger.

Transfer to GL Interface
Select the level at which you want to summarize accounting entries when you submit the Payables Transfer to General Ledger program. If Payables creates summarized journal entries, Payables combines all the invoice or payment transactions for a particular account or date into a single journal entry line. If you do not create summarized journal entries, then Payables creates a journal entry line for each accounting entry. The original accounting entries remain in Payables until you purge them.

•  In Detail. Do not summarize the entries.
•  Summarize by Accounting Date. Summarize the accounting lines by account and date.
•  Summarize by Accounting Period. Summarize the accounting lines by account and accounting period.

If this option is enabled, then when users submit the Payables Transfer to General Ledger Process, they can change the defaults that you set in this region. Choose this option if you want users to change the Transfer to GL Interface parameter when submitting the report for individual journal  categories.

• You use multiple currencies and the payment currency does not round within the payment currency precision. For example, if a payment rounds to 100.001 GBP, the payment will be for 100.00 GBP, and the rounding error of .001 will be recorded in this account.
• The functional currency amounts of payments do not equal the amount recorded as the liability. The system charges the remaining amount to the rounding account to fully relieve liability. This happens when you make the final payment of an invoice that is already partially paid.
• You have enabled automatic offsets and the cash account is pooled, and you have rounding errors. The system charges the remaining amount to the rounding account to fully relieve the cash clearing account. This happens when you make the final payment of an invoice that is already partially paid.

Invoice/Expense Report/Interest/Withholding Tax

Invoice Payables Options

•  Invoice Date. Invoice date you enter during invoice entry.
•  System Date. Current date for your Payables system. The date you enter the invoice.
•  Goods Received/Invoice Date. Date that you enter in the Date Goods Received field. If no value is entered, then the invoice date is used.
•  Goods Received/System Date. Date that you enter in the Date Goods Received field. If no value is entered, then the system date is used.
•  

•  the natural (charge) account segment from the supplier site’s prepayment account, and
•  all other account segments from the corresponding purchase order or receipt distribution. Payables validates the built account, and if the resulting GL account is not valid and active, then Payables instead defaults the supplier site’s prepayment account. Therefore, if you use this option, you might have some Item distributions that use a built account and some that use the supplier site’s prepayment account, even on the same invoice.
• If you do not enable this option then Payables always defaults the supplier site’s prepayment account to prepayment Item distributions.

• the natural (charge) account segment from the interest invoice expense account that you enter below, and
• all other account segments from the corresponding item distribution of the overdue invoice.
•  

Minimum Interest Amount: If you enable the Allow Interest Invoices option, you must enter a value in this field that represents the minimum interest amount Payables will pay. If the calculated interest amount is less than this amount, Payables does not create an interest invoice.

Withholding Tax Payables Options

Use Withholding Tax. Select this option to enable Automatic Withholding Tax. If you enable this option, you have the option to allow your suppliers and supplier sites to be subject to withholding tax.

Allow Manual Withholding. Enable this option to allow manual creation and adjustments of Withholding Tax type distributions for your invoices.

Tax Group. The name of the withholding tax group that you would like to use as the default withholding tax group for the new suppliers you enter.

Apply Withholding Tax. Select the time at which you would like Payables to apply withholding taxes to your supplier's invoices:

• Never.
• At Invoice Validation Time. Note: If Payables withholds tax at Invoice Validation, it calculates withholding only once. If you adjust an invoice after you submit Invoice Validation, then you need to manually adjust the withholding tax.
• At Payment Time. When you create payments in a payment batch or with a Quick payment.

Withholding Amount Basis.

• Include Discount Amount. Payables includes the invoice discount amount when it calculates withholding tax amounts for the invoice.
• Include Tax Amount. Payables includes the invoice tax amount when it calculates withholding tax amounts for the invoice.

Create Withholding Invoice. Select the time at which you would like Payables to automatically create withholding tax invoices to remit withheld taxes to tax authorities:

• Never. You can create a withholding type tax code without entering a tax authority. However, if you change to an option other than Never, you will need to manually ensure that each withholding type tax code has an associated tax authority.
• At Invoice Validation Time.
• At Payment Time.

Include Income Tax Type on Withholding Distributions. If you enable this option then you can report on federal income tax withheld (MISC4) for 1099 suppliers.
When this option is enabled, then when Payables automatically creates distributions of type Withholding Tax for 1099 reportable suppliers, Payables automatically provides the following values:
Income Tax Type value of MISC4.
Income Tax Region value, if the Combined Filing Payables option is enabled.
Note: Payables provides these values only for distributions it creates automatically. If you create a Withholding Tax distribution manually, then you need to enter these values manually.

When you enable this option, Payables initiates the Update 1099 Withholding Tax Distributions program, which updates these values on existing Withholding Tax distributions. The program selects distributions to update as follows:

If the current date is before March 1 of the current calendar year then the program updates distributions with a payment date of January 1 of the previous calendar year or later.
If the current date is March 1 of the current calendar year or later, then the program updates distributions that have a payment date of January 1 of the current year or later.
 

Payment accounting/Payment

Bank Account:  The internal bank account you use to disburse funds. Payables uses this value as a default in the Payment Batches window, and the Payments window.

Payment Batch Limit: The default maximum outlay amount Payables will pay for each payment batch. If a payment batch exceeds the maximum outlay, Payables displays a warning message that you are exceeding your maximum outlay, but allows you to proceed with the payment batch.

EFT User Number The number which identifies you as a user of electronic funds transfer services to your bank or clearing organization. Payables includes this information in some EFT payment formats.

Additional Pay Through Days Number of days between your regular payment batches. Payables uses the additional pay through days to determine the default Pay Through Date when you initiate a payment batch. For example, if you define 5 as the value in this field, Payables adds 5 days to the system date to calculate the default Pay through Date when you initiate a payment batch.

Allow Document Category Override Enable this option if you want to allow users to override the default document category assigned to a payment document by Payables. If your Sequential Numbering profile option is Partially Used or Always Used, Payables automatically assigns a document category to a payment document when you define a payment format for the payment document. Payables predefines a document category for each payment method. Your system
administrator can define additional document categories for a payment method. You can then use these additional document categories to override the default document category for a payment document, only if you enable this Payables option.

If your Sequential Numbering profile option is set to Not Used, Payables does not assign a document category to a payment document and you cannot enter a value in this field. Payables also does not allow you to enter a document category for a payment.

Exclude Tax From Discount Calculation If you enable this option, when you enter an invoice, and if you use Header level tax calculation, Payables subtracts the tax amount from the invoice amount when it enters the invoice amount applicable to discount in the Invoices window. If you enable this option, you cannot select Prorate Tax for your Discount Distribution Method Payables option. Note that even if you enable this option, taxes with corresponding offset taxes, such as VAT taxes, will not be excluded from discount calculation.

If you do not enable this option, Payables uses the gross amount (including the tax amount) of an invoice as the invoice amount applicable to discount. When you enter an invoice you can always override the default invoice amount applicable to discount.

Discount Method The method you want Payables to use for distributing the discounts you take when making payments.
If you leave this field blank, Payables uses the System Account method for distributing your discounts.

Prorate Expense: Payables automatically prorates any discounts across all the invoice distributions. Payables assigns the
discount to the charge account unless the invoice is matched to a purchase order with Accrue on Receipt enabled, in which case it is assigned to the price variance account.
If your Exclude Tax From Discount Payables option is enabled in this window and you enable this option, then the discount is prorated only to the expense lines and not the tax lines. 

Prorate Tax: Payables automatically prorates a percentage of the discount amount across the tax distributions. Payables only prorates the percentage of discount amount equal to the percentage of your tax distributions. Payables credits the
remaining discount amount to the Discount Taken account you enter in the Financials Options window.
For example, if your tax distributions are 10 percent of the total invoice amount, Payables prorates 10 percent of the discount amount across the tax distributions. Payables credits the remaining 90 percent of the discount amount to the Discount Taken account.
You cannot select Prorate Tax if your Exclude Tax From Discount Payables option is enabled in this window.

System Account: Payables credits all discounts to the system Discount Taken account you define in the Financials Options
window. If you enable Automatic Offsets, and you want to have Payables distribute Discount Taken amounts across balancing segments, choose this method.
If you enable the Use Bank Charges option in the payment region, the Discount Distribution Method defaults to System
Account and you cannot update it.

Allow Print: If you enable this option, then you can print Quick payments. You print a Quick payment by selecting the Print Now option in the Payment Actions window.
Suggestion: If you are going to print Quick payments, you may want to have a fast, dedicated concurrent manager queue
and a dedicated printer with checks ready to print.

Allow Pre–Date: If you enable this option, Payables allows you to create payments with a payment date before the system date for any payment except a manual payment.

Allow Void and Reissue: If you enable this option, you can reissue a Quick payment. You may need to reissue a check for a Quick payment if it is spoiled during printing. When you reissue a check, Payables voids the old check and creates a replacement check. The checks are identical except that the new check has a new check number, payment date, and payment exchange rate if you are using multiple currencies.
You cannot select the Void and Reissue option for future dated payments.

Allow Address Change Enable this option if you want to allow users to address a payment to an address other than the invoice’s supplier site’s address.

XML Payments Automatic Confirmation Enable this option if you use the XML Payments feature and want the system to automatically confirm payment batches that generate Process Payment Request XML messages. If you enable this option, then when your system receives a Confirm Business Object Document XML message from your bank that indicates that the XML payment transmission was successful, the system automatically confirms the payment batch that generated the
payment XML message. When the system automatically confirms a payment batch, the user who formatted the payment batch receives a workflow notification that the payment batch was confirmed.

Allow Remit–to Account Override: Check this check box if you want to allow users to change the default primary supplier site bank account during Quick payment and payment batch creation. If you enable this option, you can override the Payables default of the Remit–to field of the Payments window and the Modify Payment Batch window. You can then select an alternate Remit–to account from a list of the supplier site’s active bank accounts that use the same payment currency. If you do not enable this option, you can override the Remit–to Bank Account only in the Scheduled Payments window.

Use Bank Charges: If you want to use the Bank charge feature, enable this option.
If you enable this option, you must enter a value for the Bank Charge bearer field in the Supplier region of the Payables Options window. Also, if you enable this feature, Payables will enter System Account as the value for the discount distribution method field in the Payment region of the Payables Options window, and you cannot override this value.

If you enable this option, you cannot take discounts on invoices.

Account For Payment
Choose when you want to create payment accounting entries. You can select one or both options.
Payables creates the following accounting entries, depending on how the Account for Payment option is set. This accounting assumes you use accrual basis accounting. You specify the GL accounts when you define the payment document. Any accounting entries for gain and loss are controlled by the Account for Gain/Loss Payables option, so they are not included here.

I. Both (When Payment is Issued, and When Payment Clears):
Payables accounts for each payment you issue twice—once as an unreconciled payment and once again as a cleared payment. If you select both options you have the same functionality as the Allow Reconciliation Accounting option provided in previous releases.
Payables creates the following accounting entries after payment issue:
1. unreconciled payment: debit the AP Liability account and credit the Cash Clearing account
For future dated payments, debit the AP Liability account and credit the Future Dated Payment Account. Then, at payment maturity, debit the Future Dated payment Account and credit the Cash Clearing account.

2. Payables then creates the following accounting entries after payment reconciliation or clearing in Cash Management:
2.1 reconciled payment: debit the Cash Clearing account and credit the Cash account
2.2 bank charges: debit the Bank Charges account and credit the Cash account
2.3 bank errors: account in Cash account and Bank Errors account. Debits and credits depend whether the bank error was a positive or negative amount

II. When Payment is Issued: Payables accounts for each payment once, after payment issue. After you issue the payment, Payables creates the following accounting entries.
- unreconciled payment: debit the AP Liability account and credit the Cash account.
For future dated payments, debit the AP Liability account and credit the Future Dated Payment Account. Then, at payment maturity, debit the Future Dated payment Account and credit the Cash account.

Although you can reconcile the payment in Cash Management, Payables does not create accounting entries for payment reconciliation, bank charges, or bank errors, or gain and loss at reconciliation.

III. When Payment Clears If you select only this option, Payables accounts for each payment once, after clearing. After you clear the payment in Oracle Cash Management, Payables creates the following accounting entries.
– reconciled payment: debit the AP Liability account and credit the Cash (asset) account.
– bank charges: debit the Bank Charges account and credit the Cash account.
– bank errors: account in Cash account and Bank Errors account. Debits and credits depend whether the bank error was a positive or negative amount.

Supplier Payables Options

1.  System. Current date of your Payables system.
2.  Goods Received. The date you receive goods for invoices you match to purchase orders.
3.  Invoice. Invoice date.
4.  Invoice Received. Date you receive an invoice.

•  Discount. Payables selects invoices for payment based on the scheduled payment discount date.
•  Due. Payables selects invoices for payment based on the scheduled payment due date, regardless of any available discounts.

1.   Internal. You will pay bank charges.
2.  Supplier/Negotiated. Your supplier will bear any bank charges at a negotiated rate.
3.  Supplier/Standard. Your supplier will bear any bank charges at a standard rate.

Invoice Tax/Witholding Tax/Tax Defaults and Rules

Tax Defaults and Rules Payables Options

Use this region to set a hierarchy for Payables to use when it provides default values for Tax Code fields. Payables searches the sources you enable, in the order you designate until it finds a valid active Tax Code value (tax code or tax group). When it finds a tax value, it stops searching and defaults the tax value to the document you are creating.

Enable each source you want to use by checking its check box. For each source, enter a rank (1 is searched first), and give each source a unique, consecutive number starting with 1.
Note: Two Payables options supersede the hierarchy you define. If you enable the Enforce Tax from Purchase Order option, Payables always searches first at the Purchase Order Level for purchase order matched documents. If you enable the Enforce Tax From Account option, Payables always searches next at the Natural Account. If the invoice is not purchase order matched or if you have not enabled the Enforce Tax from Purchase Order option, Payables checks the Natural Account first.

Enforce Tax From Account : Enable this option if you want to enforce the relationship between the tax code and the expense or asset account for distributions. If the following conditions are true then Invoice Validation checks that for every account to which you have assigned a tax code, that the tax code matches:

•  You have enabled the Enforce Tax From Account option.
•  You have assigned tax codes to accounts in the Tax Options window in General Ledger.
•  You have disabled the Allow Tax Code Override option in the Tax Options window in General Ledger.

If the tax code does not match the account then Invoice Validation will place the invoice on Natural Account Tax hold.
If you enable the Enforce Tax From Account option, then during Expense Report Import and Payables Open Interface Import the system checks the tax codes of all accounts that have tax codes assigned to them. If the tax code is incorrect, Payables will not import the invoice or expense report and will list it as an exception.

If you enable this option we recommend that you rank Account at or near the top of your source hierarchy to minimize holds.

Enforce Tax From Purchase Order :Enable this option if you want Payables to honor the Taxable flag on the purchase order shipment, and if you want Invoice Validation to verify that the invoice Tax Code value matches the Tax Code value on the purchase order document that the invoice is matched to. If this option is enabled, the system looks at the Taxable flag on the purchase order shipment during matching. If the shipment is nontaxable, then the system does not use your Tax Code Defaults hierarchy, and enters no Tax Code value on the invoice distribution. If the purchase order shipment is taxable, then the system defaults the Tax Code value from the shipment, regardless of the rank you assign to the PO for Matched Invoices source in your Tax Code Defaults hierarchy.

If this option is not enabled, then even though the purchase order shipment is nontaxable, the system continues searching in your Tax Code Defaults hierarchy if it finds no Tax Code value on the purchase order shipment.
If the purchase order shipment to which you matched is defined in Purchasing as taxable, and the Tax Code values on the invoice and the purchase order are not the same, then Invoice Validation automatically applies a Tax Difference hold to the invoice. Invoice Validation also applies a Tax Difference hold to an invoice if the invoice and purchase order Tax Code values are the same and the purchase order shipment to which you matched is non–taxable. Payables releases the hold when
you submit Invoice Validation after correcting the Tax Code on the invoice or on the purchase order you matched to. You can also manually release a Tax Difference hold in the Holds window and the Invoice Actions window.
Note: If you enable this option we recommend that you do not also enable the Enforce Tax From Account Payables option in the Tax Defaults and Rules tabbed region.

• Header. Automatically create tax distributions based on the Invoice Amount and Tax Code in the Invoices window:
• Tax Code. Automatically create tax distributions based on the distribution Amount, Tax Code, and Includes Tax check box in the Distributions window. When calculating tax amounts, group lines with the same tax code and Includes Tax check box setting together, calculate tax, and then round the tax amount.
• Line. Automatically create tax distributions based on the distribution Amount, Tax Code, and Includes Tax check box in the Distributions window. When calculating tax amounts, calculate tax for each distribution, round the tax amount, then add the tax amounts. Allow Calculation Level Override. Enable this option if you want to allow users to adjust the default value of the Calculation Level option for new and existing suppliers.

Payment Terms

1.  a specific day of a month, such as the 15th of the month
2.  a specific date, for example, March 15, 2002.
3.  a number of days added to your terms date, such as 14 days after the terms date
4.  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.

• You enter a PO Default or QuickMatch invoice in the Invoice Workbench, in which case the terms default from the purchase order.
• You import an invoice record that has payment terms specified on the record, or the import process can derive terms from purchase order matching.

Invoice Tolerances

Use the Invoice Tolerances window to define the matching and tax tolerances you want to allow for variances between invoice, purchase order, receipt, and tax information. You can define both percentage–based and amount–based tolerances.

Tolerances determine whether Payables places matching or tax holds on an invoice. When you submit Payables Invoice Validation for an invoice that you have matched to a purchase order or receipt, Payables checks that the invoice matches the purchase order or receipt within the purchase order matching tolerances you define. When you submit Payables Invoice Validation for an invoice with a tax amount, Payables checks that the actual invoice tax amount equals the calculated tax amount within the tolerances you define.

If you use a percentage based tolerance, Payables calculates the tolerance based on the invoice amount, including tax. For example, you have a $100 item on an invoice and the tax rate is 8%. You have a 10% tax tolerance. You can enter a tax distribution amount between $7.20 to $8.80 without getting a Tax Variance hold on the invoice. If you enter a zero for a percentage tolerance and enable the check box for that tolerance, Payables will not allow any variance at all. If you want a low tolerance, you can enter a very small percentage. If you enter no value, then Payables will allow infinite variance.
Payables displays next to the tolerance field the name of the hold that Payables Invoice Validation applies to your invoice if the variance exceeds the tolerance you define.

PO Matching Purchase order matching tolerances apply to any purchase order matched invoice, including invoices matched to receipts.

• Maximum/Quantity Ordered. Enter either the percent or quantity difference above purchase order shipment line quantity ordered that you allow suppliers to invoice. Payables Invoice Validation checks the quantity billed against the quantity ordered without taking price into consideration. Enter a Maximum Quantity Ordered tolerance only if most of your purchase orders are for the same relative value.

• Maximum/Quantity Received. Enter either the percent or quantity difference above purchase order shipment line quantity received that you allow suppliers to invoice. Payables Invoice Validation checks the quantity billed against the quantity received without taking price into consideration. Enter a Maximum Quantity Received quantity tolerance only if most of your purchase orders are for the same relative value.

• Price. The percentage difference above purchase order shipment line unit price that you allow suppliers to invoice.

• Exchange Rate Amount. The amount of variance you allow between an invoice amount and the amount of the purchase order shipment to which it is matched. Payables compares the functional currency of each, based on the invoice and purchase order exchange rates, respectively. Enter a value in this field only if you enter foreign currency invoices in Payables.

• Shipment Amount. The amount of variance you allow between all invoice amounts (in transaction currency) matched to a shipment and the amount of the purchase order shipment. Payables Invoice Validation applies the Maximum Shipment Amount hold if the match exceeds the tolerance.

• Total Amount. The total amount of variance you allow for both the Exchange Rate Amount variance and the Shipment Amount combined. If you do not use foreign currency, do not enter a value in this field.

Invoice Hold and Release Names

• You can define as many invoice hold and release names as you need.
• You can also determine whether to allow accounting entry creation for the hold names you define. If you assign to an invoice a hold name that does not allow accounting, then you cannot create accounting entries for the invoice until you remove the hold.

 

• Invoice Quick Release Reason. You can use names with this release type to release all manually releasable holds for one invoice in the Invoice Holds window.
• Hold Quick Release Reason. In the Invoice Actions window, you can use the release name with this release type to release all holds from invoices that you query in the Invoice Workbench. In the Invoice Actions window, you can use only release names with this release type. Payables releases only the type of hold you entered as part of your search criteria.
• Matching Release Reason. You can use release names with this release type to release a Matching hold that Payables automatically applies to an invoice during Invoice Validation.
• Variance Release Reason. You can use this type of release name to release Variance Holds that Invoice Validation automatically applies to invoices that have a tax variance.

1. Acct Release Reason. For an invoice, Payables releases an account hold when you correct the invalid account and submit Invoice Validation.
2. Amount Lowered Reason. When you submit Invoice Validation, Payables releases a Prepaid Amount hold after you have unapplied a prepayment that, after tax calculation, exceeded the amount of the invoice to which is was applied
3. Funds Release Reason. Payables uses these releases for funds checking if you use budgetary control. Payables releases a Funds hold on an invoice during Invoice Validation if sufficient funds exist for an invoice or if Payables can perform funds checking.
4. Sufficient Information. Payables predefines one release name with the Sufficient Information type. Payables places a Sufficient Information release name on an invoice after you enter an exchange rate for a foreign currency invoice.
5. Variance Release Reason. Payables predefines two release names with the Variance Release Reason type.

Interest Rates

Tax Recovery Rules

• Distribution account
• Invoice date
• Condition (for example, supplier type)

1. the nature of the business or the organization
2. the nature of the goods or services purchased
3. the intended usage for the items purchased

Tax Codes

Tax Groups

Bank Charges

• from a single bank to a single bank
• from a single bank to all banks (i.e., to all banks including the transferring bank)
• from a single bank to all other banks (i.e., to all banks except the transferring bank)
• from all banks to a single bank
• from all banks to all banks 

Payment Formats

• Check Payment in a payment batch, Quick payment, or manual payment.
• Electronic You pay electronic payments either through the e–Commerce Gateway, or by delivering a payment batch file to your bank. For both methods, Payables creates a file during payment batch creation. For e–Commerce Gateway payments, the file is processed through the e–Commerce Gateway and delivered to your bank to create payments. For electronic funds transfers, the file is formatted and delivered to your ap.out directory for you to deliver to your bank.
• Wire A payment method where you pay invoices outside of Payables by notifying your bank that you want to debit your account and credit your supplier’s account with appropriate funds. You provide your bank with your supplier’s bank information, and your bank sends you confirmation of your transaction. Your supplier’s bank sends your supplier confirmation of the payment. Typically, you then record the transaction with a manual payment. However, you can also use a payment batch or Quick payment.
• Clearing Payment method you use to account for intercompany expenses when you do not actually disburse funds through banks. Generally, you do not generate a payment document with the Clearing payment method. When you enter the invoice, you enter Clearing for the payment method. You can record a clearing payment using a Manual type payment only.

1. Multiple. Select Multiple if you want to use a payment format to pay invoices of different currencies. You can select Multiple only if you enable the Use Multiple Currencies Payables option. You can only use a multiple currency format with a bank account whose bank account currency is the same as your functional currency.
2. Single. Select Single if you want to use a payment format to pay invoices of only one currency. You must select the currency you want to pay with this format in the next field. You can then use this format for either a multiple currency bank account or a bank account that uses the currency you define for this payment format.

Aging Periods

Signing Limits

Managers can approve an expense report only if the total amount of the expense report does not exceed their signing limit. The Manager (Spending) Approval Process in the Expense Reporting workflow uses the signing limits you define to determine which manager has authority to approve expense reports. You assign signing limits in your primary functional currency.

When you assign signing limits to a manager, you also specify a cost center to which this signing limit applies. You can give managers signing limits for multiple cost centers.

Expense Report Template

Creating Accounting Entries in Payables

You can create accounting entries for Payables accounting events in two ways:

• Submit the Payables Accounting Process.
• Create accounting entries for a single transaction or batch.

• Accounting Entries Audit Report. The audit report provides, in detail or summary, a listing of accounting entries created by the accounting process.
• Accounting Entries Exceptions Report. The exception report lists in detail all accounting entries that were created with an error status and a description of that error. The Accounting Entries Exception Report is generated only when the accounting process encounters entries that fail validation.

1. Purchase Invoices. Assigned to journal entries originating from invoice accounting events. Invoice Accounting Events belong to the Invoice Document Class.
2. Payments. Assigned to journal entries originating from payment accounting events, excluding payment reconciliation events.Payment Accounting Events belong to the Payments Document Class.
3. Reconciled Payments. Assigned to journal entries originating from payment reconciliation events. Payment ReconciliationEvents belong to the Payments Document Class.

Automatic offset method

If you enter invoices for expenses or asset purchases for more than one balancing segment, you might want to use Automatic Offsets to keep your Payables transaction accounting entries balanced.

If you do not use Automatic Offsets, Payables creates a single liability accounting entry for invoice transactions (if you use accrual basis accounting) and a single cash type accounting entry for payment transactions.

When you use Automatic Offsets, Payables automatically creates balancing accounting entries for your transactions. The GL account that each of the offsetting accounting entry is charged to depends on which method you use, Balancing or Account:

1. Balancing. Payables builds the offsetting GL account by taking the balancing segment (usually the cost center code) from the invoice distribution and overlaying it onto the appropriate default GL account, for example the Liability account from the supplier site.
2. Account. The Account method takes the opposite approach with one segment (the designated account segment) being retained from the default GL account and all other segments being retained from the invoice distribution.

• Liability
• Withholding Tax (if you apply the withheld amount at Invoice Validation time)

• Cash (if you use a pooled bank account)
• Cash Clearing (if you use a pooled bank account, and if you account for payments at clearing time)
• Discount
• Exchange Gain/Loss
• Future Dated Payment
• Rounding
• Withholding Tax (if you apply the withheld amount at Payment time)
• Bank Charges
• Bank Errors

Viewing Accounting Entries

• View Accounting Lines. You can navigate to this window from the Navigator.
• View Invoice Accounting. You open this window from one of the following places: Invoices window, Update Accounting Entries window, or drilling down from Oracle General Ledger. This window limits you to viewing invoice accounting entries.
• View Payment Accounting. You open this window from one of the following places: Payments window, Update Accounting Entries window, or drilling down from Oracle General Ledger. This window limits you to viewing payment accounting entries.

Transferring Accounting Entries to Your General Ledger

Adjusting Purchase Order Matched Invoices

• If you accidentally matched to the wrong purchase order shipments or distributions, you can reverse matched distributions and create new distributions by matching to new purchase order shipments or distributions of the same purchase order or of another purchase order. If you add or reverse invoice distributions you must also change the scheduled payment amounts to match the new invoice total, or Oracle Payables will place holds on the invoice during approval.

• You can adjust the GL Date, Income Tax Type, and Account fields of a purchase order matched invoice distribution. You can change the Account only if you have not yet posted the invoice and if you have selected the Allow Matching Account Override Payables option.

• If a supplier submits a supplementary invoice for a change in unit price for an invoice you have matched to a purchase order, use a price correction to adjust the invoiced unit price of previously matched purchase order shipments or distributions without adjusting the quantity billed.

Recurring Invoices in 11i

Creating Recurring Invoices

Navigation : Invoices—>Entry—>Recurring Invoices (B) Create Invoices

1. Determine how many invoices to create.
2. Enter the number of invoices, and click Create Invoices. A period must be an open or future period for Oracle Payables to create an invoice.
3. Optionally, create recurring invoices into an existing batch of similar invoices; for example, group all recurring rent invoices into one batch, and then add to the batch on a quarterly basis.
4. Use the Create Invoices window to view summary information about the invoices created. Oracle Payables appends the payment number with the period name in which an invoice is created to create invoice numbers for recurring payments.
5. Use the Invoices Summary

Voiding and Reissuing Quick Payments

• Enable the Allow Void and Reissue Payables option.
• The payment is a Quick payment.
• The payment method of the invoices paid is Check.
• The payment is not a future dated payment.

Payment Documents

Other Topics

This topic describes the following specialized features in Payables:

1. Period Close
2. AuditTrail
3. Positive Pay Integration
4. Interest Invoices
5. Automatic Withholding Tax
6. Automatic Offsets
7. Automatic Tax Calculation
8. Budgetary Control and Encumbrance
9. Intercompany Accounting
10. Petty Cash Funds

Month End Close and Reconciliation

1. Run the program ‘Expense Report Import’ program.

2. Run the ‘Invoice Validation’ program for all parameters - This will validate all the invoices entered in the Operating Unit.

3. Run the ‘Invoice On Hold Report’ for the period to verify if any invoice is put on hold.
Submit the program with default parameters.
If there is any invoice on hold, resolve the issue and remove the hold.

4. Run 'Payable Accounting Process'.

5. Run ‘Unaccounted Transactions Report’ program to find out any unaccounted transaction for the period. Enter Period Name and submit the report.

6. For the previous month, run:
a) Account Payable Trial Balance Report

For the month just closed, run:
a) Posted Payment Register
b) Posted Invoice Register
c) Account Payable Trial Balance Report

Reconcile using:
Previous month Account Payable Trial Balance
+  Current Month Posted Invoice Register 
-  Current Month Posted Payment Register
= Current Month Account Payable Trial Balance

7. Transfer accounting transactions to GL by running 'Payables Transfer to General Ledger' program.

8.  Run ‘Account Analysis Report with Sub Ledger Detail’ for your AP Liability Account in GL.
The grand totals should match with AP Trial Balance Report.

9. To Close period in AP and open the next period:
Navigate to Accounting > Control Payables Periods
Close the current period and then open the next period

Setting Up Oracle Payables to Enter Expense Report

Query the bank account of a Supplier Site

SELECT BANK_ACCOUNT_NAME, BANK_ACCOUNT_NUM
FROM IBY_EXT_BANK_ACCOUNTS
WHERE EXT_BANK_ACCOUNT_ID IN
(SELECT EXT_BANK_ACCOUNT_ID
FROM IBY_ACCOUNT_OWNERS
WHERE ACCOUNT_OWNER_PARTY_ID IN
(SELECT party_id
FROM hz_party_sites
WHERE party_site_name = '<site name>'))
;

Reason for invoices rejected by Payables Open Interface Import

Below simple code can be used to check reason for invoices rejected by  Payables Open Interface Import.

Select aii.Invoice_num , air.PARENT_TABLE, air.REJECT_LOOKUP_CODE, air.parent_id
From apps. AP_INTERFACE_REJECTIONS air,
apps. AP_INVOICE_LINES_INTERFACE aili,
apps. AP_INVOICES_INTERFACE aii
WHere aii.invoice_id=aili.invoice_id
AND  aili.invoice_id=air.parent_id
AND aii.Invoice_num = 'Invoice Number'

Supplier , Supplier Bank and Supplier bank branch - Oracle Apps 11i

Select a.bank_account_name, a.bank_account_num, a.iban_number, a.bank_account_type,
a.currency_code, a.bank_account_name_alt, a.org_id, a.creation_date,
b.bank_name, b.bank_branch_name, b.bank_num , b.eft_swift_code,
b.address_line1, b.address_line2, b.city, b.county, b.state, b.zip,
b.country, c.vendor_id,d.vendor_name,d.segment1 AS SUPPLIER_NUM

from apps.ap_bank_accounts_all a,
apps.ap_bank_branches b,
apps.ap_bank_account_uses_all c,
apps. PO_VENDORS d

where a.org_id=xxxx
AND a.bank_branch_id = b.bank_branch_id
AND a.bank_account_id = c.external_bank_account_id
AND c.vendor_id=d.vendor_id
 AND c.end_date IS NULL
 

Simple supplier & supplier site

Select pvs.creation_date, pv.segment1 as "Supplier num", pv.Vendor_name, pv.vendor_id, pv.vendor_type_lookup_code, pvs.vendor_site_id, pvs.vendor_site_code, pvs.vendor_site_code_alt, pvs.address_line1, pvs.city, pvs.country, pvs.attribute1, pvs.vat_registration_num from apps. PO_VENDOR_SITES_ALL pvs, apps. PO_VENDORS pv where pv.vendor_id=pvs.vendor_id and pvs.org_id=xxx Order by pvs.creation_date DESC