Oracle Payables_D49300GC10 R12

Copyright © 2007, Oracle. All rights reserved.

Procure to Pay Overview


Objectives

After completing this module you should be able to do the following:

• Describe the procure to pay process flow

• Describe the key areas in the procure topay process

• Describe how the procure to pay process fits into the Oracle eBusiness suite of applications


Overview of Application Integration

Assets

Accounting

Depreciation/ Asset Transactions

Suppliers

InvoicesPayables

Purchasing/ iProcurement

Assets

Order Management

Receivables

General Ledger

Inventory

Payables/ Expenses/ Payments

Receivables/Revenue/ Receipts

Accruals Customers

Internal Requisitions

Requisitions

Inventory Activity

Items

Subledger Accounting

Subledger Entries


Procure to Pay Lifecycle

Requisitions

Purchase Orders

Receiving

Reporting

Invoice/ Payment

Supplier Performance

Supplier management

RFQs/ Quotations

CatalogContent

Management

Sourcing

Ordering

Analysis


Oracle Procure to Pay Process

InvoicePurchase order

SupplierRequest for quote (RFQ)

Receipts

Purchaserequisition

Demand Source

Order Pay

Quotation

Receive Enter


RFQs and Quotations

Requisitionpool

PO

Quotation

Manual

Print/Send RFQ

RFQ

Copy

Automatically create

Supplierlists

Importedrequisitions


Requisitions

Approval

Inventory WIP MRP

Demand

Requisition

Requisitionpool

Order MgmtInternal

sales order

Manuallycreate

Order Mgmt

PO

Other Systems

Import/reschedulerequisitions


Suppliers

PaymentPurchase

order

Supplier

Request for quote (RFQ)

Receipts

Purchaserequisition Quotation

Returns


Purchase Orders

Requisitionpool

Receive against PO Match invoices in Payables

Automatically create

Maintain documents

Accept Revise Control

PO

Manually create

Approve


Receiving

Inventory

Order Entry

Internal shipment Inspect

Transfer

Shop floor

InventorySupplier

Shipment

Expense

Receive Deliver


Invoicing

Receiveinvoices

Enter basic information

Enter detailedinformation

File invoicesMaintain invoices

If appropriate, match invoiceto purchase order

or receipt

PO Invoice

Import/Enter invoice


Payment

Pay invoice

Record manualpayment Validate payments:

• Confirm checks• Update invoice • Payment history

Create quickpayment outside

Oracle

Create computer-generated payment

Format payments:• Print checks• Load EFT data

Modify payments: • Remove/add invoices• Modify payment details

Run Pay run

Createsinglepayments

Select validated

invoice


Summary

You should be able to do the following:

• Describe the procure to pay process flow

• Describe the key areas in the procure topay process

• Describe how the procure to pay process fits into the Oracle eBusiness suite of applications


Payables Overview



Requisitions

Purchase Orders

Receiving

Reporting

Invoice/ Payment


Supplier management

RFQs/ Quotations

Catalog Content

Management

Sourcing

Ordering

Analysis


Objectives


• Describe the Payables process flow

• Describe the key areas in the Payables process

• Identify Payables integration points

• Identify Payables open interfaces


Overview of Payables Processes

100,000

A/P

60,000

10,00030,000

Validate invoice Enter supplier Import/Enter invoice

Pay invoice

Create accountingentries in Subledger

Accounting

Transfer informationto general ledger


Supplier Entry

100,000

A/P

60,000

10,00030,000

Validate invoice

Pay invoice


Accounting


Enter supplier Import/Enter invoice


Invoice Entry

Enter supplier Import/Enter invoice Validate invoice


Accounting


Optionally match to PO

or receipt

100,000

A/P

60,000

10,00030,000

Pay invoice


Overview of Payment

Pay invoice

Record manualpayment Confirm payments:

• Confirm checks• Update invoice • Payment history

Create manualpayment outside

Payables

Create computer-generated payment

Format payments:• Print checks• Load EFT data

Modify payments: • Remove/add invoices• Modify payment details

Run Pay run

Createsinglepayments

Select validated

invoice


Overview of Payables Integration

CashManagement

e-Commerce Gateway


Assets

Projects

iSupplier Portal

Payables

Payments

Receivables

Loans


Overview of Payables Integration (Cont.)

Payables

HumanResources

Alert

Inventory

GeneralLedger

Workflow

Property Manger iExpense


E-Business Tax


Payables Integration with Purchasing

Match and Update Qty

Billed

POs PCards


1

2 Copy Accounting

Payables

Suppliers


Payables Integration with Receivables and Loans

Submit Payment Requests

Payables

1

Loans

Receivables

2

AR/AP Netting (AR Only)


Payables Integration with Cash Management

Payables

Cash FlowData1

2 ReconcilePayments

CashManagement

Bank Codes Banks


Payables Integration with e-Commerce Gateway

• 820 - Outbound Payments

• 810 - Inbound Invoices

• 824 - Outbound Application Advice

• 857 - Billing Notice (ASBN)

Payables

Suppliers

e-CommerceGateway


Payables Integration with iSupplier Portal

InvoiceStatus2

1 Submit PO-Matched and Unmatched Invoices

Payables iSupplier Portal

Supplier Info

Invoice Request


Payables Integration with Payments

Payment Methods

Pay Runs

Payables Payments

Payment Documents


Payables Integration with Assets

2Prepare

Mass Additions

Create Mass

Additions

Post Mass

Additions1 3

Suppliers

AssetsPayables FA Mass Additions


Payables Integration with Projects

InvoiceDistributions 1

2 Adjustmentsand Expense Reports

Projects Tasks

Payables Projects


Payables Integration with Human Resources

Payables HumanResources

1 Locations

Employees Locations Organizations


Payables Integration with Subledger Accounting and General Ledger

Ledger Rates

Create Accounting

Transfer to General Ledger

1 2

GeneralLedger

PayablesSubledger

Accounting


Payables Integration with Alert

• Invoices on Price Hold

• Invoices on Quantity Received Hold

• Invoices on Quantity Ordered Hold

Invoices

Payables

Invoices

Alert


Payables Integration with iExpense

Payables iExpense1 ExpenseReports

Employees Templates


Payables Integration with E-Business Tax

E-Business Tax

Payables

Calculate Tax1

View Tax Summary

and Details2

TransactionTax


Payables Integration with Workflow

• Credit Card

• Expense Report Approvals

• Open Interface Import

• Procurement Card Emp. Verification

• Procurement Card Mgr. Approval Transaction

• Invoice Approval Workflow

Payables Workflow


Payables Integration with Property Manager

Payables Property Manager

1 Create LeaseInvoices

Suppliers

2 Payables Open Interface Import

Payables Invoice Open Interface


Multiple Organization Access Control

If you implement Multiple Organization Access Control, you can:• Enter invoices for multiple operating units without switching

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

EMEA Responsibility

BELGIUMOperating Unit

HOLLANDOperating Unit

DENMARKOperating Unit


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

ASBN

ERS/pay onreceipt

EDI810

Invoices from

external system

Workflow

PCard Invoice

Openinterface

AP Invoice

Quick Invoices


Payables Expense Report Open Interface

AP

PayablesInvoice Import

Invoice

Employee

Payment

Openinterface


Payables PCard Open Interface

AP_Expense_ Feed_Lines_All

Openinterface

Invoice

Openinterface

Invoice Open Interface

Payables Open

Interface Import


Payables Credit Card Open Interface

AP_Credit_Card Trxns_All

Openinterface

Openinterface

Invoice Open Interface

Invoice

Payables Open

Interface Import


Payables Matching Open Interface

Openinterface

PO Data

Match andUpdate Qty

Billed

1

2 CopyAccounting

Payables


Payables Supplier Open Interface

Openinterface

Suppliers, Sites, Contacts

Invoice


Summary

You should now be able to do the following:

• Describe the Payables process flow

• Describe the key areas in the Payables process

• Identify Payables integration points

• Identify Payables open interfaces


Suppliers



Requisitions

Purchase Orders

Receiving

Reporting

Invoice/ Payment


Supplier management

RFQs/ Quotations

Catalog Content

Management

Sourcing

Ordering

Analysis


Objectives

After completing this module, you should now be able to do the following:

• Define suppliers and supplier sites

• Identify key reports

• Understand setup options

• Understand additional implementation considerations


How Oracle Products UseSupplier Information

Payables

Purchasing

Assets

Property Manager

iSupplier Portal

MOAC

Trading Community Architecture


Overview of Suppliers

Enter supplierImport/Enterinvoice Validate invoice


Accounting

Pay invoice

Create PO

Enter requisition

Match to PO


Supplier Controls

Control supplier information using:

• Security

• Numbering

• Duplicate Supplier Entry

• Setup Options (defaults)

• Tax Defaults


Flow of Default ValuesProcurement Flow Payables Flow

Financials options

Purchasing/Receiving /Payables/Payables System Setup options

Supplier

Scheduled payment line

Item

PO DocumentsDistribution

line

1

2

1 Takes precedence over 2

Supplier site

Invoice Lines

Invoice


Suppliers Page

• Search • Company Profile

– Organization

– Tax Details

– Address Book

– Contact Directory

– Business Classification

– Products and Services

– Banking Details

– Surveys

• Quick Update• To Do List• Terms and Control

– Accounting

– Tax and Reporting

– Purchasing

– Receiving

– Payment Details

– Invoice Management


Finding Suppliers

You can find suppliers by using the Search region of the Suppliers page.


Supplier Quick Update

You can use Quick Update for routine maintenance of supplier information.


Entering Basic SupplierInformation

• Name• Number

Stevens and Co

46018

• Inactive On 01-AUG-2010

• Taxpayer ID or• Tax Registration Number

FEIN 52-1234567

• Supplier TypeStandard supplier


Supplier – Organization

• Parent Supplier Name– Must already be defined to select

• Number– Parent supplier number

• Customer Number

Your SupplierCust. #9924

Your Company

Parent

ChildChild


Supplier – Tax Details

• Rounding Rule

• Set Invoice Values as Tax Inclusive

• Allow Withholding Tax

• Withholding Tax Group

• Tax Registrations


Supplier – Address Book and Contact Directory

Purchasing site RFQ Only site

Tokyo New York

Purchasing site

Paris

Sue Taylor, Sales Mgr

Bill Wilson, Sales Quotes

Liz Miller, Sales Rep

Aaron Carr, AR Mgr

Payment site Primary Pay site

Supplier


Supplier – Business Classification

Hal’s Supplies Office Supplies

Adams for Board Donations

TypeName

Woman Owned Small Business

Minority-Owned


Suppliers – Products and Services

Computer/Technical

Manufacturing

Financial


Supplier – Banking Details

• Name

• Number

• Primary

• Currency

• Start/End Dates

Operating Account #432198-77


Suppliers – Surveys

Create custom questionnaires that can be used to gather feedback from suppliers' surveys


Supplier – Accounting

Supplier accounting values default to all new supplier sites you enter for the supplier. Supplier site accounting values default to all new invoices for the supplier site. You can override any accounting defaults during supplier site entry and invoice entry.


Supplier – Tax and Reporting

• Allow Tax Applicability

• Set for Self Assessment/Reverse Charge

• Allow Offset Taxes

• Tax Classification Code

• Income Tax Reporting Site


Supplier – Purchasing

• All New Orders• Ship-To Location• Bill-To Location• Ship Via• Pay On Receipt• Alternate Pay Site • Invoice Summary Level • Create Debit Memo from RTS Transaction *• Gapless Invoice Numbering• Free-on-Board (FOB)• Freight Terms• Transportation Arranged• Country of Origin

Poor Quality


Supplier – Receiving

• Enforce Ship-To Location

• Receipt Routing

• Match Approval Level

• Quantity Received Tolerance

• Quantity Received Exception

• Days Early/Late Receipt Allowed

• Receipt Date Exception

• Allow Substitute Receipts

• Allow Unordered Receipts


Supplier Information – Payment Details

• Payment Method

• Pay Each Document Alone

Check

Electronic

Outsourced Check

Wire

Invoice Check

1 to 1


Supplier – Invoice Management

• Invoice Details• Hold from Payment

• Payment Terms– Priority

– Terms

– Pay Date Basis

– Pay Group

– Always Take Discount

– Exclude Freight From Discount

– Create Interest Invoice


Supplier Site Settings

Tokyo

New York

Paris

Net 30

2/10, Net 30

Net 30

Due

Discount

Due

Tokyo Office

Headquarters

Headquarters

Payment Terms Pay Date Basis Ship-To Location

ABC Corp. Sites


Supplier Level Versus Site Level Entry

Tabbed Region Supplier Level Site LevelOrganization Yes NoTax Details Yes YesAddress Book No YesContact Directory Yes NoBusiness Classification Yes NoProducts and Services Yes NoBank Details Yes YesSurveys Yes NoAccounting No YesTax and Reporting Yes YesPurchasing Yes YesReceiving Yes NoPayment Details Yes NoInvoice Management Yes Yes


Reviewing Suppliers

You can review suppliers in the Suppliers page.


Maintaining Supplier and Supplier Site Information

• Changed values default only to new documents that you subsequently create

• Where to make the change?

Supplier

Existing Site A Existing Site B New Site C

Net 30

2/10, Net 30

Net 30 2/10, Net 30Net 30


Adjusting Suppliers:Updating Supplier and Supplier Site Defaults

Remember that when you make changes to values that default to Payables and Purchasing documents, the changed value defaults only to new documents you subsequently enter or create.


Adjusting Suppliers:Updating Supplier Invoice Holds

Holds are controlled at the supplier site.

For example, if you have enabled the Hold All Payments option for a supplier and supplier site, and you disable the option for the supplier, but not the supplier site, all unvalidated invoices for the supplier site will remain held for payment.

Use the Quick Update or Invoice Management pages to update the hold status.


Adjusting Suppliers:Adding a New Supplier Site

Enter the Supplier Site and address information. The Site Name will not appear on documents you send to the supplier; it is for your reference when you select a supplier site from a list of values during transaction entry.


Adjusting Suppliers:Updating a Supplier’s Tax Status

In the Tax Details page, make any changes to the Taxpayer ID or Tax Registration Number.

In the Tax and Reporting page, update the tax profile for the supplier and supplier sites.


Approving Supplier Requests

Suppliers with iSupplier Portal accounts can request updates to their supplier information. All supplier requests must be approved before the supplier record is updated.


Avoiding Duplicate Suppliers

• Before setting up a new supplier, verify it doesn’t already exist.

• System requires unique supplier names. Relies heavily on strong naming conventions.

• Benefits of avoiding duplicate supplier entry

XYZ Inc. XYZ Inc The Sun Sun Inc Sun Co

Example #1 Example #2


Merging Suppliers

Run supplier audit report

ABC Corp

ABC Corporation

Review merge results

ABC Corporation

Merge suppliers

Identify duplicate suppliers

Maintain audit trail


Data Example – Supplier Merge

Oracle Corporation

Target/Correct Supplier

Site Names

CA-REDWOOD

IL-CHICAGO

VA-RESTON

FL-ORLANDO

Oracle Corp

Incorrect Supplier

Site Names

CA-REDWOOD

FL-ORLANDOmerge

copy


Merging Suppliers

After you have merged suppliers, Payables automatically prints the following reports:

• Purchase Order Header Updates Report

• Supplier Merge Report


Reports

Suppliers Report

Supplier Audit Report

Supplier Payment History

Supplier Paid Invoice History

Supplier Mailing Labels

Purchase Order Header Updates Report

Supplier Merge Report


Reports

Supplier Customer Netting Report

Supplier Open Balance Letter

Invalid PO Supplier Notice

Accounts Payable Trial Balance Report

Invoice Aging Report

Open Items Revaluation Report


Financials Options

Supplier-Purchasing

RFQ Only Site

Ship-To Location

Bill-To Location

Inventory Organization

Ship VIA

FOB

Freight Terms


Financials Options

Human Resources

Expense Reimbursement

Address


Payables System Setup

Supplier

Supplier Number

•Entry

•Type

•Next Automatic Number

Control

•Invoice Match Option

•Hold Unmatched Invoices

Payment

•Invoice Currency

•Pay Group

•Terms Date Basis

•Pay Date Basis

•Payment Terms

•Always Take Discount

•Create Interest Invoices


Lookup Codes

VENDOR TYPE

MINORITY GROUP

PAY GROUP

FREIGHT TERMS

SHIP_VIA

FOB


Profile Options

PO: Secondary E-mail Address

PO: In File Path

PO: Terms and Conditions File Name


Additional Implementation ConsiderationsResponsibility for Supplier Entry/Maintenance

• Assign responsibility for supplier entry/maintenance

• Number of staff required

• Consider good internal control and segregationof duties

2 Payables Clerks

Create/adjust suppliers

1 PO Clerk

Add purchasing contacts


Additional Implementation Considerations - Supplier Naming Conventions

• Benefits– Prevent duplicate invoices and payments– Improve system performance and supplier inquiries– Provide accurate supplier reporting

• Who should develop the naming conventions?

• Document with sign-off by authorized approver(s)

Purchasing Payables Assets Others


Additional Implementation Considerations -Supplier Naming Convention Examples

Examples

• Exact spelling decided for easilymisspelled suppliers

• Exact spelling for top ten priority suppliers

• Determine use of case (CAPS, Title Case)

• List approved abbreviations

• Determine use of punctuation andspecial characters

• Site name structure

• Address format


Additional Implementation Considerations -Supplier Numbering Options

• Two choices– Automatic (numbers only)– Manual (alphanumeric or numeric)

• Switch from manual to automatic– Ensure that Next Automatic Number is larger than

the largest number assigned

Automatic 2114 2115

2116

2117

Manual EE103 GV104

ST105

ST106


Additional Implementation Considerations -Supplier Open Interface

You can use the Supplier, Supplier Site and Supplier Contacts Open Interfaces to import supplier information into Payables


Additional Implementation Considerations Setup of Fax or E-Mail

Options for Communicating Approved Purchasing Documents to Suppliers

Printed Document Facsimile E-Mail


Summary

In this module, you should have learned how to:

• Define suppliers and supplier sites





Invoices



Requisitions

Purchase Orders

Receiving

Reporting

Invoice/ Payment


Supplier management

RFQs/ Quotations

Catalog Content

Management

Sourcing

Ordering

Analysis


Objectives


• Import/Enter invoices and invoice distributions

• Match to purchase orders

• Validate invoices

• Apply and release holds

• Understand invoice approval workflow

• Understand key reports




Overview of Invoices

Enter supplierImport/Enterinvoice Validate invoice


Accounting

Pay invoice

Create PO

Enter requisition

Match to PO


Flow of Default ValuesProcurement Flow Payables Flow

Financials options

Purchasing/Receiving /Payables/Payables System Setup options

Supplier

Scheduled payment line

Item

PO DocumentsDistribution

line

1

2

1 Takes precedence over 2

Supplier site

Invoice Lines

Invoice


Invoice Types

• Standard

• Credit Memo

• Debit Memo

• Mixed

• Prepayment

• Expense Report

• Withholding Tax

• Interest

• Retainage Release

• Transportation Invoices


Entering Invoices Overview

You can manually enter invoices into Payables using:

• Invoice Workbench

• Quick Invoices window


Creating Invoices Automatically

Your system can create the following types of invoices:

• Recurring Invoices

• RTS Invoices

• Retroactive Price Adjustment Invoices


Adjustment and PO Price Adjustment Invoices

You can use the Invoice Workbench to view and query by example Adjustment and PO Adjustment invoices.

• You cannot enter or update these invoices.

• You cannot match these invoices to receipts and purchase orders.


Invoice Import

You can import invoices or invoice information to create invoices in Payables.

• Oracle Internet Expenses expense reports

• Payables expense reports

• Credit Card invoices

• EDI invoices

• XML Invoices

• Invoices from externalsystems

• Oracle Property Manager invoices

• Oracle Assets lease payments


Assigning a Default GL Date

DistributionGL date

GL Date Basis Payables Option

Invoice date,system date, orinvoice received

date

Defaults to

Determines default

Invoice GLdate


Overview of Entering Batches

Batch invoices

Enter a batch of invoices

Prepare a batch control form

Review batch control reports

Update the batch control form

Receive invoices

File invoice


Creating Batch Control Forms

Batch Control Form

Batch Name : JS03042007 Date: 03/04/07

Control Invoice Count: 20 Control Invoice Total: $2,600.78

Actual Invoice Count: 19 Actual Invoice Total: $2,200.78

Count Difference: 1 Total Difference : $ 400.00

Entered by: John Smith Entry Time (elapsed): 15 minutes

Notes: Invoice #300941 for supplier ABC Corporation was a duplicate.


Invoice Structure

• Currency

• Terms

• Amount

• Pay Date

• Type

• Amount

• Charge Acct.

• Type

• Supplier

• Number

ScheduledPayments

Distributions

Invoice Header

Invoice Lines

• Type

• Amount

• Accounting

• Product Integration


Invoice Workbench

Invoices Window• Invoice Header• General• Lines• Holds• View Payments• Scheduled Payments• View Prepayment

Applications

Other Features• Actions• Calculate Tax• Tax Details• Corrections• Quick Match• Match• Distributions


Entering Basic Invoices in the Invoice Workbench

ScheduledPayments

Distributions

Invoice Header

Invoice Lines


Entering Invoice Header Information

• Invoice Type

• Trading Partner

• Supplier Number

• Supplier Site

• Invoice Date

• Invoice Number

• Amount

• Description

• Payment Terms

• Payment Method

ScheduledPayments

Distributions

Invoice Header

Invoice Lines


Entering Invoice Line Information – Line Types

• Type– Item – Freight– Miscellaneous– Tax

• Amount

ScheduledPayments

Distributions

Invoice Header

Invoice Lines


Entering Invoice Line Information – Other Attributes

• GL Date

• Account

• Track as Asset

• Description

• Status

• Accounted

• Project/Task/Expenditure Scheduled

PaymentsDistributions

Invoice Header

Invoice Lines


Entering Distributions

Invoice Validation

Manual

Allocation

Matching

Distribution Set


Distribution Sets

Use a Distribution Set to automatically enter distributions for an invoice when you are not matching it to a purchase order. You can create:

• Full Distribution Sets

• Skeleton Distribution Sets


Entering Distribution Types

• Type:– Item– Freight– Miscellaneous– Tax– Withholding– Prepayment

• Amount ScheduledPayments

Distributions

Invoice Header

Invoice Lines


Entering Freight Distributions

There are three ways to create freight distributions:

• Enable the Automatically Create Freight Distribution Payables Option

• Allocate freight across invoice distributions

• Manually enter freight distributions


Tax Distributions

Tax distributions are automatically created when you click Calculate Tax or when you validate the invoice.

Withholding Tax distributions are automatically created when you validate the invoice.


Allocating Freightand Miscellaneous Distributions

Miscellaneous Freight

Item


Creating Distributions by Allocation in the Invoice Workbench

You can use the Charge Allocations window to automatically create freight or miscellaneous distributions.


Allocation Restrictions

• Cancelled invoices

• Paid invoices

• Applied prepayments

• Items matched to multiple PO distributions

• Accounted allocations


Scheduled Payments

• Scheduled Payment Holds

• Due Date

• Gross Amount

• Priority

ScheduledPayments

Distributions

Invoice Header

Invoice Lines


Entering Purchase Order and Receipt Matched Invoices

Match invoices to:

• Purchase order

• Purchase order shipments

• Purchase order distributions

• Purchase order receipts and receipt lines


Match Approval Level Options

2-Way

3-Way

4-Way

Quantity Billed

Unit Price PO Line Price

Quantity Ordered

Quantity Billed Quantity Received

Quantity AcceptedQuantity Billed

Invoice PO


Matching to a Purchase Order

Detail

Header

Item line 2

Item line 1

Distribution line 1

Shipment line 2

PO information Supplier information

Shipment line 1

Distribution line 1

Distribution line 2

Distribution line 1

Shipment line 1


Matching to Purchase Order Shipments

6 Items

Actually

Shipped

6 Items

Charged

6 Delivered

10 Items on Scheduled Shipment,

to be shipped to department 110

110


Matching to Purchase Order Distributions

10 Items on Scheduled Shipment

• 7 to be sent to Dept 110

• 3 to be sent to Dept 120 120

0 Items Charged

0 Delivered

110

6 Items

Charged

6 Items

Actually

Shipped

6 Delivered


Matching to Receipts and Receipt Lines

10 Items on Scheduled Shipment

• 10 to be shipped to Dept 110

Search for PO

Receipts

Match Details

Recorded on PO

Invoice PO

Must have Receipt to Match


Matching to Purchase Orders or Receipts in the Invoice Workbench

To match an invoice to a purchase order or receipt:

• Use the Match to Purchase Order/Receipts window

• Enter the PO number in the invoice header

• Enter the PO Distribution, PO Shipment, or Receipt information in the invoice line

• Use Quick Match


Corrections

You can enter price, quantity, or amount corrections, depending on the type of purchase order line you are correcting:

• Goods

• Services

• Rate Services


Price Correction Example

5 units @ $10/Unit

5 Units @ $12/Unit

Invoice

IPV = $10

Qty Billed = 5

PO

5 units @ $-2/Unit

5 Units @ $-2/Unit

Credit Memo PO

IPV = -$10Total Qty Billed = 0

Total QTY Billed = 5

Total IPV = 0

Match

Match & Price

Correct

1

2


Final Matching

During matching, select the Final Match option to indicate that no more invoices should be matched to the purchase order.


Types of Accounting Flows

• Asset account

• Expense account

• Accrual account


Matching to Distributions for Assets

PO

01-000-1570-0000-000

Match

1

2

01-000-1570-0000-000

Computer-PC

Asset

Asset Clearing

Asset Clearing

Invoice

Copy


Matching to Distributions for Expenses

01-110-7740-0000-000

01-110-7740-0000-000

Expense

Expense

Office

Supplies

POMatch

1

Invoice

2Copy


Matching to Distributions for Inventory

01-000-1410-0000-000

01-000-2215-0000-000

Material

Inventory AP Accrual

Inventory

POMatch

1

Invoice

2Copy


Define Purchase Order Matching Tolerances (Optional)

• Quantity ordered %

• Maximum quantity ordered

• Quantity received %

• Maximum quantity received

• Price %

• Exchange rate amount

• Shipment amount

• Total amount


Define Tax Tolerances (Optional)

• Tax %

• Tax amount range


Quick Invoices

Use the Quick Invoices window to enter a large volume of invoices that do not require extensive online validation or extensive online defaulting of values.

Quick Invoices window

Invoice Payables Open Interface Table


Quick Invoice Process

Enter invoices in Quick Invoices

window

Data is stored in Payables Open Interface Tables

Import Invoice Records

Payables creates invoices with

distributions and scheduled payments


Quick Invoice Batches

Assign a batch name to group the invoice records in the Quick Invoices window.

Payables assigns the batch name to each invoice record you enter.


Entering Purchase Order Matched Invoice Records in Quick Invoices

When you enter a purchase order matched invoice record, the import process automatically creates invoice distributions for you based on your match.


Finding Invoice Records in Quick Invoices

You can query any invoice record in the Quick Invoices window if you entered it in the Quick Invoices window and you have not yet purged the invoice record from the Payables Open Interface tables.


Modifying Invoice Records in Quick Invoices

In the Quick Invoices window, you can modify any invoice record you entered in the Quick Invoices window but have not successfully imported.


Adding Invoice Records to an Existing Quick Invoices Batch

You can add invoice records to a Quick Invoices Batch at any time.

Either query an existing batch and add invoice records to it, or add invoice records to an existing batch by using the same Source and Batch Name when you enter new invoice records.


Creating Invoices From Quick Invoices Invoice Records (Import)

Import invoices records you entered in the Quick Invoices window using the Create Invoices window, or by submitting the Payables Open Interface Import Program.

You can view and modify imported invoice records in the Invoice Workbench.


Entering 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 special calendar

• Define a recurring invoice template

• Create invoices based on the template


Self Service Invoices

Supplier enters invoice in

iSupplier Portal

Invoice Request

Account payables department approves

request

Without PO

Invoice

PayablesLaunches Workflow

With PO

Payables User enters invoice

in Invoice Actions page


Payment Requests

Receivables

Loans

Payment Request

Account payables department approves

request

submits

If requires approval, PayablesLaunches Workflow

Payables applies holds, if necessary Pay

No approval required


Invoice Validation Process

Enter or import invoices

Validate invoice

Optionally match to PO

or receipt

View invoice

Pay invoice

Receive invoices electronically or

in the mail

Createsubledger accounting

100,000

AP

60,00010,00030,000


Levels of Invoice Validation

• System level validation

• Batch level validation

• Invoice level (online) validation

Validate invoice


Approval

The Invoice Approval Workflow Program can be submitted before or after validation, unless the Require Validation Before Approval Payables option is enabled.


Invoice Approval Levels

You can define the approval rules in Oracle Approvals Management in one of the following ways:

• Line-level rules only

• Document-level rules only

• Line-level and document-level rules


Invoice Approval Workflow

The Invoice Approval Workflow automates your invoice approval process. Based on rules you define, the workflow determines if an invoice needs approval, who the approvers are, and in what order approvers should approve payment of the invoice.


System Setup

You can set up your system to request and receive approval through the approver’s e–mail, through the approver’s Oracle Workflow Notifications Workflow web page, or both.


Invoice Approval Workflow Program

Status of approval:

"Future" "Pending"

Notification has been sent,but not acted on during this stage.

Decision

Approved Rejected


Invoice Approval Workflow ProgramParameters

Trading Partner

Invoice Number

From/To Invoice Date


Invoice Approval History

You use the Invoice Approval History window to review the approval progress of any invoice that has started or completed the Invoice Approval Workflow process.


Holds and Releases

• System holds

• Manual holds– Supplier hold– Invoice hold– Scheduled payment hold


Apply Holds to Supplier Sites

San Diego New York

Amount Limit = $15,000

Hold All Payments

Hold Unvalidated Invoices

Hold Unmatched Invoices


Apply Holds to Invoices

User Manually Hold Types Predefined Definable Releasable

Acct Hold Reason No

Funds Hold Reason Sometimes

Insufficient Information No

Invoice Hold Reason Yes

Matching Hold Reason Sometimes

Period Hold Type No

PO Req Hold Reason No

Variance Hold Reason Sometimes


Apply Holds to Scheduled Payments

Invoice

Hold Due Date Gross Amount

04-APR-2007 900

04-MAY-2007 100

$1000.00


Release Supplier Site Holds

San Diego New York

Amount Limit = $15,000

Hold All Payments

Hold Unvalidated Invoices



Release Invoice Holds

Acct Release Reason

Funds Release Reason

Sufficient Information

Invoice Release Reason

Matching Release Reason

Period Release Type

Variance Release Reason

Hold Quick Release Reason

Invoice Quick Release Reason

Predefined User DefinableHold Release Types


Release Scheduled Payment Holds

Invoice

Hold Due Date Gross Amount

04-APR-2007 900

04-MAY-2007 100

$1000.00


Reports

Batch Control Report by Batch Name

Batch Control Report by Entered By

Credit Memo Matching Report

Invoice Aging Report

Invoice Audit Listing

Invoice Audit Listing by Voucher Number


Reports

Invoice History Report

Invoice Register

Invoice on Hold Report

Invoice Audit Report

Matching Detail Report

Matching Hold Detail Report


Reports

Recurring Invoices Report

Print Invoice Notice

Matching Hold Agent Notice

Supplier Paid Invoice History

Matching Holds by Buyer


Reports

Distribution Set Listing

Key Indicators Report

Receiving Hold Requestor Notice


Setup Options

• Payables System Setup Options

• Payables Options

• Purchasing Options

• Profile Options


Payables System Setup Options

Payables System

Invoice Match Option


Invoice Currency

Pay Group

Terms Date Basis

Pay Date Basis

Payment Terms

Always Take Discount

Create Interest Invoices


Payables Options

Allow Force Approval

Require Validation Before Approval

Invoice


Payables Options (Continued)

Use Invoice Approval Workflow

Allow Online Validation

Receipt Acceptance Days

Invoice



Confirm Date as Invoice Number

Allow Adjustments to Paid Invoices

Recalculate Scheduled Payment

Invoice



Allow Document Category Override

Freight Account

GL Date Basis

Prepayment Settlement Days

Prepayment Payment Terms

Invoice



Allow Final Matching

Allow Distribution Level Matching

Allow Matching Account Override

Transfer PO Descriptive Flexfield Information

MatchingInterest

Allow Interest Invoices


Purchasing Options

Match Approval Level


Profile Options

PO: ERS Aging Period

PO: ERS Invoice Number Prefix

AP: Use Invoice Batch Controls

AP: Notification Recipient e-Mail


Additional Implementation Considerations

Tips to speed up data entry

• Use Folder Tools

• Use Quick Invoices

• Use Account Aliases

• Use Keyboard Shortcuts

• Use Pay on Receipt

• Use Procurement Cards

• Use Distribution Sets

• Use Recurring Invoices

• Set Up Default Values (System and Supplier Site)



• Invoice conversion

• Data mapping

• Data cleanup

• Report mapping

• Training and cutover


Summary


• Import/Enter invoices and invoice distributions

• Match to purchase orders

• Validate invoices

• Apply and release holds

• Understand invoice approval workflow

• Identify key standard reports




Payments


Objectives

After completing this module, you should be able to do the following:

• Describe the payment process

• Set up banks and bank accounts

• Enter single payments

• Process multiple payments

• Review and adjust payments

• Set up and create bills payable

• Create, apply, and release holds on prepayments


Objectives

• Reconcile payments with Oracle Cash Management

• Use key standard reports

• Understand key setup options




Requisitions

Purchase Orders

Receiving

Reporting

Invoice/ Payment

Supplier management

RFQs/ Quotations

CatalogContent

Management

Sourcing

Ordering

Analysis



Invoice Payment Overview

Entersupplier

Enterinvoice

Validateinvoice

Transfer information to

General Ledger

Create accounting

entries

A/P100,000

60,00010,00030,000

Pay invoices


New Payment Terminology in R12

Payment Method

Payment Format

Payment Process Request Template

Payment Process Profile

Payment Instruction

Payee

Pay Run/ Payment Process Request

Document Payable

Key Concepts

Key Concepts New to Oracle Payables


Using the Invoice Workbench

The Invoice Workbench

is used to:

• Enter, adjust, review one or more invoices

• Initiate payment of one or more invoices

• Initiate payment of one or more scheduled payments

Fully Integrated Invoice Workbench


Using the Payment Workbench

The Payment Workbench, (Payments window) accessible through the Invoice Workbench, is used to generate:- Manual payment- Quick payment- Refund


Using the Payments Manager

Payments Manager

The Payments Manager is used to create and process multiple payments and is comprised of the following components:

• Payments Dashboard (home)

• Payment process requests templates

• Payment process requests

• Payment instructions

• Payments


Seeded Payment Methods

Payment Method

Definition

Check A paper check to print and send to a supplier

Outsourced Check

Transmission of payment information to an external party, such as your bank, that prints checks on your behalf

Electronic An EFT, EDI, or XML payment to the bank of a supplier

Wire A funds transfer initiated by contacting the bank and requesting wire payment to the bank of a supplier


Bank Account Model

BankBank

Bank BranchBank Branch Bank AccountBank Account

Trading Community Architecture (TCA)

Trading Community Architecture (TCA) Cash ManagementCash Management

TreasuryTreasury

PayablesPayables

ReceivablesReceivables

PayrollPayroll


Entering Bank and Bank Branch Information

Country & Bank

Branch Name

Branch Type & Details

Address

Contact

Country

Bank Name

Address

Contact

Bank

Bank Branch


Entering Bank Account Information

Bank Account Owner (LE)

Account Use

Name

Number

Currency

Owner

Information



Payables Controls

– Multiple Currency Payments, Pooled Account

– Minimum/Maximum Payment, Allow Zero Payments

– Maximum Outlay

General Controls

– Cash, Cash Clearing

– Bank Charges, Bank Errors

– Foreign Exchange Charges, Agency Location Code

– Netting Account



Account Use

Organization

Accounts

Document Category/Payment Method

Access

ContactsContact


Defining Payment Documents

Payment documents are check stock on which checks and promissory notes can be printed or written. They usually have security features, such as watermarks to prevent fraud.

Before you can use a bank account with a processing type of Printed, you must:

• Create at least one payment document.

• Assign the payment document to a specific:– bank account name– bank account number – bank and branch


Manual Payment Overview

Payments made outside of Payables

Wire Transfers

Your Bank

Supplier’s Bank

Handwritten/Typed Checks


Payments

Type Bank

AccountPayment

Document Num

Payment Amount

Trading Partner/Site

Manual 1st NationalPreprinted Checks

2107 200.10 ABC Co/Boston

Select Invoices

Invoice Number

Payment Amount

Discount Amount

Unpaid Amount

Discount Available

29097 88.10 0.00 88.10 0.00

31077 112.00 0.00 112.00 0.00

Invoice Overview

Creating Manual Payments

Enter/Adjust Invoices


Creating Quick Payments

Payments

Type Bank

Account Payment Document

Num Payment Amount

Trading Partner/Site

Quick 1st NationalLaser Checks

7240 3510.00 XYZ Inc/Dallas

Select Invoices

Invoice Number

Payment Amount

Discount Amount

Unpaid Amount

Discount Available

9097 2850.00 0.00 2850.00 0.00

10038 660.00 0.00 660.00 0.00

Invoice Overview

Enter/Adjust Invoices


Processing Stop Payments for Single Payments in the Payment Workbench

Proceed with void

Query Payment

Contact Bank

Request Stop Payment

Initiate Stop

Bank Confirms Cleared?

Release stopYes

No


Voiding Single Payments in the Payment Workbench

Query Payment

VoidActions

Invoice Action

Invoice Available for Payment

Cancel Invoice

Invoice on Hold


Processing Multiple Payments Overview

Payments Manager • Create payment process request templates

• Use templates to automatically select invoices to pay

• Schedule pay runs

• Modify invoice selection and payment amounts

• Initiate payment instructions

• View the status of payments

• Void or record stop payments

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


Payments Manager Overview

The Payments Manager’s payment process is as follows:

• Invoices are grouped into a payment process request.

• The Build Payments program validates the invoices, groups them into payments, and validates those payments.

• The Create Payment Instructions program groups the payments into payment instructions.

• Each payment instruction results in one payment file that contains information on one or more payments.

• Payments are made by printing checks or electronically transmitting payment instructions to a financial institution or external payment system.


Creating Payment Process Request Templates

A template is used to select invoices for a pay run and specifies:• header information• payment selection criteria• payment attributes• processing instructions• how validation failures will be handled

• Payment process request templates are created in the Templates tab of the Payments Manager to simplify pay run processing.


Specifying Payment Process Request Template Header Information

The first step in creating a payment process request template is to specify template header information.

The information in a header uniquely defines the template, making it easy to query.

Template Header Information

Defines the Template


Specifying Payment Process Request Template Payment Selection Criteria

The second step in creating a payment process request template is to specify invoice payment selection criteria.

Selection criteria determine which invoices will be selected for payment in the pay run.

Invoice Payment Criteria

Defines Invoices for Payment


Specifying Payment Process Request Template Payment Attributes

The third step in creating a payment process request template is to specify payment attributes.

For a pay run, you can specify one of the following:

– a single bank account and a single payment process profile– multiple bank accounts

using different payment instruments

Single Payment Process Profile

Different Payment Instruments


Automating the Payment Process Request Template Process

The fourth step in creating a payment process request template is to specify the degree of pay run automation.

The pay run process can specify whether to:

– group credit payments for a supplier together

– stop for selected invoice review

– stop for proposed payments review

– initiate payment instructions after pay run/wait for review

Select Elements of Pay Run Automation


Specifying Validation Failure Criteria for the Payment Process Request Template

The fifth and final step in creating a payment process request template is to specify how the system handles validation failure on the:

– document level– payment level

Documents are invoices grouped together to form a payment. A payment contains one or more documents.

A Payment Contains One or More Documents


Submitting the Cash Requirement Report

Cash Requirement

ReportReport Can Be

Submitted

• Used to forecast your immediate cash needs for invoice payments

• Before every pay run to determine cash requirements for the pay run

• For next two or three pay runs to forecast cash requirements and improve cash management


Submitting an Expedited Single Payment

Using the

Payment Workbench, a single invoice is printed or transmitted in seconds.

An expedited single payment is a payment process where the following occurs:

The system does not wait for scheduled payment instruction creation and ignores invoices or payments that may be waiting for further processing.

A single invoice is processed in a payment process request, resulting in one payment/one payment instruction containing the single invoice.


Submitting a Standard Payment Process Request

Using the Payments Manager, you can manage a large group of documents payable associated with:

• multiple operating units

• multiple legal entities

• multiple currencies and pay groups

• multiple bank accounts

• different payment instruments


Scheduling a Payment Process Request

You can schedule a payment process request that selects invoices using a specific payment process request template, which will run:

• as soon as possible

• on a specific date and time

• periodically or only once


Reviewing or Modifying Selected Invoices

By reviewing and modifying invoices that are selected for a pay run, you can:

• change the invoice amount or the discount taken

• remove selected invoices from the payment process request

• add selected invoices to the payment process request

• review unselected invoices

• recalculate interest, payment withholding, or exchange rates


Reviewing the Scheduled Payment Selection Report

The payment process request automatically initiates the Scheduled Payment Selection Report where you can review:

• invoices selected for a pay run

• invoice selection criteria

• immediate cash requirements for the pay run

• credits missed

• available prepayments

• unselected invoices


Reviewing Proposed Payments

You can review and approve them to

confirm that the right payments are being

made.

After the Build Payments program has

created proposed payments --


Building Payments

After you submit a payment process request, the Build Payments program groups invoices together to build payments.

The Build Payments Program:

• validates invoice information required for payment• groups invoices into payments• assigns disbursement bank accounts and payment

process profiles to the payments• validates the payments


Creating Payment Instructions Overview

A payment instruction is a group of payments that is created from one or more payment process requests. This information is formatted and, depending on your setup, is converted to a payment file that is:

-- printed onto in-house checks

-- transmitted to a financial institution or payment system for further

processing and disbursement


Creating and Transmitting Electronic Payment Instructions

Payment instructions are a collection of payments that are created by one of the following ways:

• created automatically by the Create Payment Instructions program

• created after manual submission by you


Creating and Printing Printed Payment Instructions

Payment instructions are a collection of payments that are created by one of the following ways:

• created automatically by the Create Payment Instructions program

• created after manual submission by you


Printing Payments

Schedule Request: Parameters page

Print Now

Submit Requests

Concurrent Program Name: Create Printed Payment Instructions

Setup for Printed Payments:

Processing Type of Printed in the Create Payment Process Profile page


Reprinting Payment Documents

If you find no problems with the initial print run, you can record the print status of your payment documents.

If, after printing has been submitted, you discover printing problems and wish to reprint particular payment documents or even the complete payment instructions, you can reprint:

• individual payment documents

• ranges of payment documents

• the complete payment instruction


Recording Print Status of Prenumbered Payment Documents

Document Number

Status

12014-12016

Printed

12017-12018

Spoiled

Restart Batch

Document Number: 12019


Marking Payments Complete

When printed and electronic payments are complete, source products are notified so they can perform any necessary accounting actions. Printed and electronic payments are considered complete as follows:

• Printed payments are complete when payment documents are recorded as Printed.

• Electronic payments are automatically or manually marked complete at points specified during the setup of payment process profiles.


Recording Stop Payment Requests in Payments Manager

Release Stop Payment

Query Payment

Contact Bank

Request Stop Payment

Record Stop Payment Request

Bank Confirms Cleared

Payment? Void Payment and Confirm Stop Payment

Yes

No


Voiding Payments in Payments Manager

Query Payment Click Void Icon

Record Voided Payment

Confirm Success of Stop Payment


Finding and Reviewing Payments

Payment Workbench

Invoice Workbench

The Payment Overview window is helpful for reviewing the status of a payment quickly and is a bridge between the Payment Workbench and the Invoice Workbench.

In the Payment Overview window:– query a payment

– review the status of a payment and its related high-level information


Updating Payments Using the Payment Window

You can use the Payments window to:

• adjust selected invoices for Manual payments

• update Manual payment addresses

You cannot perform the following update payment actions:

• adjust a Manual payment used to pay a prepayment that was applied to an invoice

• make any changes to cleared or voided payments

• make adjustments to selected invoices on matured bills payable if accounting exists for the maturity event


Processing Refunds

When a supplier or employee sends you a refund for an invoice payment you have made, you can record the refund. A refund closes 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


Entering Refunds

The Payments window is used to record a refund payment for one or more outstanding Payables documents. This enables you to close an open credit balance and maintain a full transaction history for the supplier.


Recording Refunds for InvoicesWhen a Credit Balance Exists

You pay debit balance with refunds in the Payments window.

If you know the credit or debit memo you want to pay, you can query it in the Invoices window, select the Scheduled Payments tab, and then choose the Pay button.


Refunds for Prepayments

You may receive refunds from suppliers for prepayments you have made to them, such as a refund for a deposit or repayment of a travel advance.

If you receive a refund for a prepayment, enter an invoice and apply the prepayment to it. Enter a debit memo for the invoice. You can then pay the debit memo with the refund.


Voiding Refunds

You can void a recorded refund just as you void any other payment. Select the refund in the Payments window, choose the Actions button, and use the Void option in the Payment Actions window.

You can then re–enter the refund and pay any open invoices or prepayments for the supplier.


Canceling Payment Process Requests in the Payments Manager

You can cancel a request for invoice selection by taking one of these actions in the Payment Process Requests tab of the Payments Manager.

In the Payment Process Request: Selected Scheduled Payments page, click the Terminate Request button.


Bills Payable Overview

Formerly known as a future dated payment, bills payable instruct your bank to disburse funds to your supplier's bank on a specific date, known as the maturity date.

You can use bills payable to:

– control the timing of your payments

– control cash flow


Setting Up Bills Payable

To use bills payable in Payables, you must perform the following setups:

Funds Disbursement

Payment Method Setup

Payment Process Profile Setup


Prepayments Overview

A prepayment is a type of invoice you enter to make an advance payment to a supplier or employee.

For example, you need to pay a deposit on a lease, or pay an employee an advance for travel expenses.

You can later apply the prepayment to one or more invoices or expense reports you receive from the supplier or employee to offset the amount paid to them.


Entering Prepayments

You can enter a Prepayment type invoice only in the Invoices window. You cannot enter a Prepayment type invoice in the Quick Invoices window.


Applying and Releasing Holds on Prepayments

To prevent payment of a prepayment, you can apply one or more holds to the prepayment or you can hold the scheduled payment.

You apply these holds as you would for any other invoice.

You release holds from a prepayment just as you would for any other invoice.


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 invoices.


Canceling Prepayments

You can cancel prepayments if one of the following is true:

• they have not been paid

• they have not been applied to invoices

To cancel an applied prepayment, you must:

• unapply the prepayment

• void the payment document that paid the prepayment


Reconciling Payments with Cash Management

With Oracle Cash Management, you can reconcile payments created in Payables to your bank statements. When you reconcile payments using Oracle Cash Management, Cash Management updates the status of payments to Reconciled.

Oracle Cash Management

Reconciles payments from Payables.

Updates status of reconciled payments.


Clearing Restrictions

Oracle Cash Management cannot clear bills payable that have a payment status of Issued.

Oracle Cash Management clears bills payable only if the payment status is Negotiable. On or after the maturity date of the payment, you can update the status to Negotiable.


Reports

Bank Account Listing

Cash Requirement Report

Discounts Available Report

Payment Audit by Voucher Number

Discounts Taken and Lost Report

Final Payment Register


Reports (continued)

Payment Exceptions Report

Payment Gain & Loss Report

Payment Process Request Status Report

Positive Pay File

Payment Register


Reports (continued)

Separate Remittance Advice

Unclaimed Property Report

Stop Payments Report

Supplier Payment History

Void Payment Register


Key Payables System Setup Options

The key Payables systemsetup options include the following in the Payment region of the Supplier tab.

– Pay Group

– Terms Date Basis

– Pay Date Basis

– Payment Terms

– Always Take Discount

– Create Interest Invoices


Key Payables Setup Options

The key Payables setup options include the following in the Single Payment region of the Payment tab:

• Allow Pre-Date

• Allow Void and Reissue

• Allow Address Change


Payment Terms

Payment terms are defined to:

• assign them to an invoice to automatically create scheduled payments when you submit Invoice Validation for the invoice

• create multiple scheduled payment lines and multiple levels of discounts


Key Lookup Codes

PAY GROUP

DONT PAY REASON


Setting Up XML Publisher Formatting Templates

The system uses Oracle XML Publisher formatting templates to format payment instructions. Oracle XML Publisher:

• provides ready-to-use formatting templates

• enables you to configure your own formatting templates

The purpose of setting up formatting templates is to:

• enable the system to use the formatting templates to format payment instructions


Setting Up Payment Formats

A payment format is an entity that associates the XML Publisher Template with the payment process. The purpose of setting up payment formats is to:

• assign validation sets

• associate each payment format with an XML Publisher formatting template

The system provides one payment format for each of the formatting templates in Oracle XML Publisher.


Setting Up Transmission Configurations

A transmission configuration:

• implements a specific transmission protocol

• enables the delivery of a transaction to a specific payment system or financial institution

This setup is only required for sending:

• electronic payments to a payment system

• positive pay files


Setting Up Payment Systems

A payment system is an organization that provides financial settlement services, such as a:

• bank at which the deploying company has its bank accounts

• third party processor that connects deploying companies with financial institutions


Setting Up Funds Disbursement Payment Methods

A funds disbursement payment method is a medium by which the deploying company makes a payment to one or more suppliers.

Payments supports the following payment methods for funds disbursement:

Payment Methods

– – Checks– Electronic Funds Transfer

– – Outsourced Checks– Wire


Setting Up Payment Method Defaulting Rules

Payment method defaulting rules determine how payment methods default onto a document payable, such as an invoice.

A payment method defaults onto an invoice when all specified conditions are met.

Payment

method rules

Applies to invoice


Setting Up Payment Process Profiles

A payment process profile is a blueprint assigned to documents payable, which specifies:

• all the rules for creating and disbursing payments

• how payments are processed

• instructions for payment formatting and transmission

The purpose of setting up payment process profiles is to specify the details of the payment process.


Setting Up Disbursement System Options

Disbursement system options are system-wide payment options that control disbursements made by the deploying company to suppliers.

Payables provides two levels of system options:

Levels of System Options

• Enterprise level

• Organization level



Additional implementation considerations include:

• Managing Cash Requirements

• Internal Controls for Payment Processing

• Integration Partners


Managing Cash Requirements

• Run Cash Requirement Report

• Narrow Selection of Invoices in Pay Run

Payment Selection Criteria Name

Original Payment Selection Criteria

Revised Payment Selection Criteria

Pay Through Date (current date Feb-5)

Feb-25 Feb-15

Payment Priorities High/Low

None 1-5

Include Only Due No Yes

Payment LimitsMax Outlay $5M Max Pmt $500K

Max Outlay $2.5M Max Pmt $300K


Internal Controls for Payment Processing

Physical Security

Proper Segregation of Duties

Credentials of Payment Processing Staff

Enter Suppliers

Import/Enter

Invoices Process Payments

Mail Payments

Reconcile Cash

AccountApprove

POs

Sign Checks


Summary

In this lesson, you should have learned how to:

• Describe the payment process

• Set up banks and bank accounts

• Enter single payments

• Process multiple payments

• Review and adjust payments

• Set up and create bills payable

• Create, apply, and release holds on prepayments


Summary

• Reconcile payments with Oracle Cash Management

• Use key standard reports

• Understand key setup options



Expense Reports and Credit Cards


Objectives


• Describe the expense report process

• Enter expense report templates

• Enter expense reports

• Apply advances

• Identify key expense related reports

• Set up credit card programs


Expense Reports

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


Internet Expenses Overview

Oracle Internet Expenses is a self-service application for employees to manage expense reports online


Internet Expenses Overview

Oracle Internet Expenses is a tool that helps meet top management goals.

Streamlines expense reporting

Controls cost and

errors

Accessible anywhere

Enforces policies/ statutory regulations

compliance

Improves employee

productivity

Advantages of Using Oracle Internet Expenses


Expense Reporting Process

Employee creates expense

report

Manager approves report

Accounts Payables department approves report

Approved: Creates payment; notifies employee

Rejected: Workflow notifies

employee

Adjusted: Creates payment; notifies employee

Internet ExpensesPayables


Entering Expense Reports

You can enter expense reports in these products:

Oracle Payables

Oracle Internet Expenses

Web SpreadsheetExpense Reports

WindowInvoices Window


Entering Project-Related Expense Reports

Enter Project-Related Expense Reports in the Invoices Window


Expense Report Export Program

Converts expense reports created in the following

applications into Payables invoices:

• Payables

• Internet Expenses

Expense Report Export Program


Expense Report Templates

You use the Expense Report Template window to define templates based on the expense report forms you regularly use in your enterprise.

You can define default values for expense items, and you can then choose those items from a list of values when you enter expense reports.


Expense Report Templatesfor Internet Expenses

If Internet Expenses is implemented, employees can enter expense reports using a standard Web browser. Only templates that have the Enable for Internet Expenses option enabled are available for use with Internet Expenses.


Taxes on Expense Reports

Expense reports use E-Business Tax to automatically calculate the applicable taxes during Expense Report Export.


Entering Foreign CurrencyExpense Reports

Foreign currency expense reports are subject to the same system requirements as foreign currency invoices.

You can only apply advances (prepayments) that have the same currency as the expense report.


Applying Holds to Expense Reports

At any time before you submit Expense Report Export for an expense report, you can apply a single User–defined hold to an expense report.

This prevents payment of the invoice Payables creates from the expense report.

Subledger accounting entries are not created if you select a hold that prevents accounting.


Applying Advances AgainstExpense Reports

You can pay an employee an advance (prepayment) and later apply the advance against an expense report to reduce the amount you pay for an expense report.

$500 Travel Advance

Expense Report$1500

$1000

Unpaid Balance


Modifying and Reviewing Existing Expense Reports

You can review and modify Payables expense reports in the Expense Reports window or the Invoices window.

If you have successfully exported an expense report using Expense Report Export, then you can view it but you cannot modify it.

Use the Audit module in Internet Expenses to review Internet Expenses expense reports


Paying Expense Reports

Payables will pay invoices only. Submit the Expense Report Export program to have Payables create invoices from expense reports. You can then create payments for the invoices.


Procurement Cards

Procurement cards allow qualified employees to purchase items directly from suppliers.

You can use procurement cards to streamline your Procure-to-Pay process, reduce transaction costs, and eliminate low-amount invoices.


Procurement Card Process

Load AP_EXPENSE_FEED

_LINES_ALL

Validate and Verify Procurement Card

Transactions

Send for Management

Approval

Approved: Create invoices; ready for validation and payment

Rejected: Workflow notifies

employee

Adjusted: Create invoices;

ready for validation and payment


Setting Up Procurement Cards and Credit Cards

Set up credit card programs to manage your enterprise’s credit card and procurement card requirements.

• Travel = Employees who enter credit card transactions on expense reports.

• Procurement = Employees who use procurement cards to purchase items directly from suppliers.


Code Sets Window

You use the Code Sets window to define sets of credit card codes for your procurement cards. Payables uses these codes to create default accounting distributions for transactions that you import from your credit card issuer.


Card Programs Window

You use this window to define your credit card programs for each card issuer. You define the supplier and supplier site for your card program. You also specify which transaction statuses to exclude when you automatically create an invoice for your card issuer.


GL Account Sets Window

You use the GL Account Sets window to create a list of values of GL accounts that your employees can use to correct account information for their procurement card transactions, if you allow your procurement card holders to update transaction accounts.


Profiles Window

You use this window to define profiles for the various types and levels of spending you allow for procurement card holders. You assign a credit card profile to each card that you assign to a card holder.


Credit Cards Window

You use the Credit Cards window to define the credit cards distributed to your employees. Enter an employee name and credit card number, and assign a card profile.


Summary


• Describe the expense report process

• Enter expense report templates

• Enter expense reports

• Apply advances

• Identify key expense related reports

• Set up credit card programs


Period Close


Objectives


• Describe the period closing process in Payables and Purchasing

• Reconcile accounts payable transactions for the period

• Identify key programs and reports




GL Interface

Key Processes

Payables

Create Accounting -

Final

Transfer to GL


GeneralLedger

Import to GL

Post in GL

Accounting Details

Oracle Assets, Projects, Procurement, Inventory

Create Accounting -

Draft

Review/Correct Accounting

Distri-butions


Overview of the Period Close

Run Validation/ Review and

resolve holds

Create accounting

Close the period

Reconcile AP activity for the period

Post journal entries in GL

Transfer & review

unaccounted transactions

Prepare for period

close

Close the GL period


Prepare for Period Close

• Complete all receipt processing

• Confirm or cancel all pending pay runs

• Update matured bills payable

• Import invoices

• Export and process expense reports

• Interface adjustments to supplier invoices and expense reports

• Reconcile bank statements


Run Validation/Review and Resolve Holds

Resolve Invoice Holds

Rerun Validation if Necessary

Run the Invoice ValidationProcess


Create Subledger Accounting

Create Accounting

View Accounting

Make a Payment

Enter an Invoice


Create Accounting Program

The Create Accounting program processes eligible accounting events to create subledger journal entries. The program applies the application accounting definitions that are created in the Accounting Methods Builder (AMB).

The following report is generated by this program:

• Oracle Subledger Accounting Program Report


Transfer and Review

Run Transfer Journals to

General Ledger

Review TransferResults

Review Account Analysis Report


Transfer Journal Entries to GL Program

The Transfer Journal Entries to GL program enables you to transfer any eligible journal entries to General Ledger, including those from previous batch runs that have not yet been transferred to General Ledger.

The following report is generated by this program:

• Transfer to Journal Entries to GL Report


Post Journal Entries in GL

Create Remaining Mass Additions

Post Journalsin GL


Reconcile AP to GL

March Accounts Payable Trial Balance+ April Payables Posted Invoice Register- April Payables Posted Payment Register

- April Accounts Payable Trial Balance= 0


Close the AP Period

Close the AP Period

Period Close Exceptions


Close the PO Period

Review the Uninvoiced

Receipts report

Process period-end

accruals

Close the purchasing

period

Process remaining inventory

transactions

Run the Accrual reports

Write off accrued

transactions as necessary


Key Accounts

• Receiving Inventory Account

• Inventory AP Accrual

• AP Liability

• Expense AP Accrual

• Material

• Charge Account

• Purchase Price Variance

• Invoice Price Variance


Accrual Accounting – Perpetual Accrual (On Receipt)

Receiving Inventory

Acct

Inventory AP Accrual

Material AP Liability

01-000-141001-000-222101-000-1412 01-000-2210 01-000-1570

100 100

100 100

100 100

Expense/ Clearing

-0- -0- 100 100 -0-

1

3

4

2

5


Accrual Accounting – Periodic Accrual (Period End)

Receiving Inventory

Acct

Expense AP Accrual

Material Expense/ Clearing

200

200 200

200

200 200

-0- 200 200-0- -0-

1

3

4

2

5

6

AP Liability

01-000-141001-000-222101-000-1412 01-000-2210 01-000-1570


Accounting for Mass Additions –Periodic Accrual (Period End)

1

Expense AP Accrual

Asset Cost

01-000-156001-000-2221 01-000-2210

3

4

2

5

200

200

6

200

200

01-000-1570

200 200

200200

-0- 200 200 -0-

Expense/ Clearing

AP Liability


Accounting for Paymentswith Cash in Transit (Cash Clearing)

Cash Expense/ Clearing/ Accrual

01-000-1110 01-000-2210 01-000-1570

Cash in Transit

01-000-1150

400400

400400

400400

-0- -0-400 400

1

3

2

AP Liability


Accounting for Paymentswithout Cash in Transit (Cash Clearing)

400400

400400

-0-400 400

1

2

Cash Expense/ Clearing/ Accrual

Cash in Transit

01-000-1110 01-000-2210 01-000-157001-000-1150

AP Liability


Reports

Accounts Payable Trial Balance

Accrual Rebuild Reconciliation Report

Accrual Write-Off Report

Matched and Modified Receipts Report

Account Analysis Report


Reports

Payables Posted Invoice Register

Payables Posted Payment Register

Receipt Accruals - Period End

Receiving Account Distribution Report


Reports

Unaccounted Transactions Report

Uninvoiced Receipts Report


Financials Options

Miscellaneous

Retainage

Accounting

Future Periods

Liability

Prepayment

Future Dated

Discount Taken

PO Rate Variance Gain/Loss

Expenses Clearing


Payables Options

Accounting

Account for Payment

Account for Gain/Loss

Future Dated Payment

Account Source

Interest

Prepayment Account

Automatic Offset Method

Discount Method


Payables Options: Currency

Currency

Use Multiple Currencies

Require Exchange Rate

Entry

Calculate User Exchange Rate

Exchange Rate Type

GL Accounts:

–Realized Gain

–Realized Loss

–Rounding


Purchasing Options

Accrue Expense Items

Accrue Inventory Items

Expense AP Accrual Account

Receipt Accounting

Automatic Offset

Method



• Running the Invoice Validation process

• Running the Create Accounting process

• Level of detail for Create Accounting process

• Running the Transfer Journal Entries to GL process

• Determine number of clearing accounts to use for projects, assets, and cash management


Summary


• Describe the period closing process in Payables and Purchasing

• Reconcile accounts payable transactions for the period

• Identify key programs and reports




Withholding Tax


Objectives


• Identify the withholding tax process

• Use withholding tax options

• Process manual withholding tax invoices

• Create withholding tax invoices

• Process automatic withholding tax invoices

• Identify standard key reports


Withholding Tax Overview

You may be required to withhold taxes from your employee expense reports and supplier invoices.

Once you set up Payables to automatically withhold tax, you can withhold tax either during Invoice Validation or during payment processing.

You can control all withholding tax options in the Withholding Tax region of the Payables Options window.


Setting Up Withholding Tax (Optional)

You may want to customize Automatic Withholding Tax (AWT) to perform special behavior based on your local requirements.


Withholding Tax Payables OptionsUse Withholding Tax

Select the Use Withholding Tax 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.


Defining Tax Codes for Withholding Taxes

Payables provides flexibility in defining withholding tax rates with specific controls.

When you define a withholding tax code, you indicate first whether you will have any amount or rate controls by selecting one of the following rate structures:

• Period Limit

• Flat Rate

• Amount Ranges


Withholding Tax Groups

You use this window to define withholding tax groups that include multiple Withholding Tax type tax codes. You can assign the same tax code to more than one group.

When you assign a withholding tax group to an invoice or distribution, Payables calculates invoice withholding tax based on every tax code in the withholding tax group.


Withholding Tax Certificates and Exceptions

You use the Withholding Tax Certificates and Exceptions window to define Withholding Tax type tax code rate exceptions for a supplier site.


Withholding Taxes for Suppliers

You enable withholding taxes for a supplier and supplier sites in the Tax Details region of the Suppliers page.

Select Allow Withholding Tax option if you want to enable withholding for a supplier or supplier site, and select a default Withholding Tax Group that Payables will default to all invoices you enter for the supplier or supplier site.


Tax Details for Suppliers and Supplier Sites

You use the Tax Details region to enter withholding tax information for a supplier and supplier site.

If your Use Withholding Tax Payables option is not enabled, you will not be able to enable the Allow Withholding option.

The options you select for a supplier default to the new supplier sites you enter, then default to invoices you enter for that site.


Withholding Taxes from Recurring Invoices

To withhold taxes from a recurring invoice:

• When you define a recurring invoice template, enter the Withholding Tax Group. This group will be applied to all invoices you create for that template.


Withholding Tax When Applying Prepayments

If you use automatic withholding tax, Payables creates the correct withholding tax lines and distributions.

If your Withholding Tax Payables option is set to Apply Withholding Tax at Invoice Validation Time, then you might want to time the entry of the prepayment application before the invoice is validated.


Creating Withholding Tax Invoices

After you apply withholding tax to an invoice, you can optionally create invoices to remit withheld tax to the tax authority.


Projected Withholding Tax

You use the Projected Withholding Tax window to review projected withholding tax invoice distributions for an invoice.

Payables creates one Withholding Tax type invoice distribution for each Withholding Tax type tax code per withholding tax group assigned to an invoice distribution. Information in this window is display only.


View Period–To–Date Withheld Amounts

You use this window to review period–to–date withheld amounts for a Withholding Tax type tax code for a supplier.

You can review the amount subject to withholding and the period–to–date withheld amount.

This window shows automatically withheld amounts, and does not show amounts that you withhold manually.


Withholding Tax Reports

Payables provides the following income tax forms and reports:

Withholding Tax By Invoice Report

Withholding Tax By Payment Report

Withholding Tax By Tax Authority Report

Withholding Tax By Supplier Report

Withholding Tax Certificate Listing

Withholding Tax Letter

Withholding Tax Report


Withholding Tax By Invoice Report

You use the Withholding Tax By Invoice Report to review detailed invoice withholding tax information for a supplier, including invoice number, amount subject to withholding, and tax amounts withheld.


Withholding Tax By Payment Report

You use the Withholding Tax By Payment Report to review detailed invoice withholding tax information for a supplier, including invoice number, amount subject to withholding, and tax amounts withheld.


Withholding Tax By Tax Authority Report

You use the Withholding Tax By Tax Authority Report to review detailed withholding tax information for Withholding Tax type tax codes assigned to a Tax Authority type supplier.


Withholding Tax By Supplier Report

You use the Withholding Tax By Supplier Report to review detailed invoice withholding tax information for a supplier, including invoice number, amount subject to withholding, and tax amounts withheld.


Withholding Tax Certificate Listing

You use the Withholding Tax Certificate Listing to review withholding tax certificates for a supplier or all suppliers.


Withholding Tax Letter

You use this report to create a withholding tax letter to mail to your suppliers on a periodic basis. This letter contains a list of withholdings made for a supplier, summarized either by tax type and tax rate or by supplier site.


Withholding Tax Report

You use this report to create a withholding tax report for your company’s internal reporting needs. This report contains a list of withholdings made on behalf of your suppliers, summarized either by tax type and tax rate or by supplier site, and grouped by supplier.


Summary


• Identify the withholding tax process

• Use withholding tax options

• Process manual withholding tax invoices

• Create withholding tax invoices

• Process automatic withholding tax invoices

• Identify standard key reports


R12 Oracle Payables Management Fundamentals

Practices


Advances and Progressive Contract Financing


Objectives

After completing this module, you should be able to:

• Describe the purpose of complex service contracts

• Identify advances, contract financing and progress payment invoices

• Calculate retainage

• Recoup prepaided amounts for complex service contract


Advances and Progressive Contract Financing

Negotiate

TrackProgress

Invoice /Payments

Budget /Deliverables

Request for Services

RetainageRelease

CostCollection

Oracle Projects

Procurement for Complex

Services

ControlAdvanced

Procurement

Oracle Payables


Advances and Contract Financing

Purchase Order/Contract

for Services: $1,000,000

Supplier requests

prepayment: $50,000

Additional approvals ?

Payables: Prepayment Invoice Entered

iSupplier Portal: Invoice Request is approved; Prepayment Invoice created

Invoice is validated; Payment Issued


Progress Payments

Billed RetainedAdvance/

RecoupmentApproved

Advance

Resurface Lot

Road Work

Landscape

Final Painting

50,000

200,000 200,000 <20,000> <50,000>

500,000 500,000 <50,000>

250,000 250,000 <25,000>

50,000 50,000 < 5,000>

1,000,000 1,000,000 <100,000> 0


Entering Advances and Contract Financing Invoices

An advance prepayment invoice is not matched for an advance, since an advance is paid once before any work commences and is not based on performance.

A contract financing prepayment invoice is matched to pay items (shipments).


Tolerances and Holds on Advances and Contract Financing

During validation, invoices are checked for:

• Quantity-based tolerances for goods procurement

• Amount-based tolerances for services procurement

• Milestone holds

• Matching holds


Work Confirmation

A work confirmation confirms that work was delivered by a certain supplier at a specific price on a specific date as specified by a specific work confirmation number, which is associated with a purchase order number.


Funds Checking and Encumbrance for Advances and Contract Financing

If Budgetary Control is enabled, the system verifies that sufficient funds are available to pay an invoice.

If Encumbrances is also enabled, Purchasing and Payables create encumbrances and encumbrance reversals against the budgets defined in Oracle General Ledger.


Taxes for Complex Service Contract Invoices

Invoice Type Invoice Purpose Tax Calculation Based On

Prepayments Advance Invoice Amount, based on Tax Rules for Advances

Contract Financing(Progress Payment)

Invoice Amount, based on Tax Rules for Contract Financing

Standard Progress Payment Invoice Amount, Net of Retainage

Final Delivery Invoice Amount

Retainage Release Release Retained Amounts

Retained Amount, based on Tax Drivers on Original Invoice


Retainage Amount for Complex Service Contracts

Retainage is the act of withholding a portion of a payment until a substantial portion or all of the work is completed.


Retainage Lines for Complex Service Contracts

The retainage information for each pay item is stored in the Retained Amount field for the matched invoice line. The system creates negative retainage distributions prorated to the item distributions.


Retainage Release for Complex Service Contracts

Once the release criteria are met, suppliers request a release of the retained amount .


Recouping Advances and Contract Financing Payments

Recoupment is the automatic process of recovering prepaid amounts when invoicing for progress or for the final delivery of goods or services, based on specific terms specified in the services procurement contract.


Recoupment Amounts

Recoupment amounts are automatically calculated for every progress payment invoice line that is matched to a service procurement purchase order delivery pay item or shipment.

Recoupment amounts are based on the total available amount of the financed pay items or shipments for the contract line item.


Summary


• Describe the purpose of complex service contracts

• Identify advances, contract financing and progress payment invoices

• Calculate retainage

• Recoup prepaided amounts for complex service contract


Transaction Taxes in Payables


Objectives


• Describe how transaction taxes are calculated for invoices

• Insert manual tax lines and update transaction tax lines

• View tax summary and details


• Understand set up options


Overview of Transaction Taxes in Payables

Payables leverages E-Business tax to setup, calculate, and manage transaction taxes such as:

• Sales

• VAT

• Excise

• Customs Duty

• Environmental

• Offset

• Recoverable Tax


Overview of Tax Calculation on Invoices

Enter Invoice

E-Business Tax

Validate InvoiceClick

Calculate Tax

Change Tax Driver

View Tax Lines and

Distributions

Calculates Tax

Calculates Tax

Recalculate Taxes


Viewing Tax Amounts on Invoices

Exclusive Tax

Inclusive Tax

Total Tax

Self Assessed Tax

Invoice Header

Invoice Lines


Working with Transaction Taxes in Payables

Enter manual tax lines

Update tax lines

Exclude tax from discounts

Self-assess taxes

Employ taxes with deferred recoverability


Entering Manual Tax Lines

To enter manual tax lines, enable the following options for the configuration owner or event class:

• Allow Entry of Manual Tax Lines

• Allow Manual Tax Only Lines (optional)


Entering Manual Tax Lines

To manually enter tax details for Item, Freight, Miscellaneous, or Prepayment lines, complete the following fields:

• Tax regime

• Tax

• Tax status

• Tax rate

• Tax amount

• Place of supply (supplier site)


Entering Tax Only Lines

If you are entering a Tax Only line on an invoice:

• Ensure that line Type = Tax

• Enter the tax amount in the Amount field, not the Tax Amount field

• Complete all of the fields required for manual tax lines, plus these additional fields:– GL date– Tax jurisdiction


Updating Tax Lines

To update tax lines, enable the following options for the configuration owner or event class:

• Allow Entry of Manual Tax Lines

• Allow Recalculation for Manual Tax Lines

• Tax Line Override Impacts Other Tax Lines


Updating Tax Lines

You can update the following fields for calculated tax lines:

• Tax Status

• Tax Jurisdiction

• Tax Rate

• Tax Amount

• Percentage Rate or Quantity Rate

• Self Assessed option

• Inclusive option


Exclude Tax from Discounts

To exclude tax from discounts, enable the Exclude Tax From Discount Calculation Payables Option

Invoice Amount

-Total Tax Amount

Discountable Invoice Amount


Self-Assessed Taxes

Enable the following option in the Party Tax Profile:

• Set for Self Assessment/Reverse Charge option

You can enable this option at the following levels:

• Regime

• Regime, Tax

• Regime, Tax, Tax Jurisdiction


Taxes with Deferred Recoverability

Level Allow Tax Recovery

Default Recovery Settlement

Tax Accounts

Regime Deferred

Tax Deferred •Tax Expense•Recoverable Tax•Interim Tax (used for Accrual Based accounting only)

Tax Status Deferred

Tax Rate Deferred


Taxes with Deferred Recoverability

DR CR

Item Expense 1000.00

Liability 1100.00

Recoverable Tax 55.00

Non-Recoverable Tax 45.00

Once the invoice is paid, the deferred recoverable tax amount, 55.00, is credited and debited to the Deferred Recoverable Tax account.


Considerations for Taxes on Prepayments

To calculate taxes on Prepayment Invoices, enable the following option for the Prepayment event class:

• Allow Tax Applicability

Tax calculation is affected by how the Applied Amount Handling option is set up. You can set this option as:

• Recalculated

• Prorate


Tax Variances

• Tax Exchange Rate Variance (TERV)

• Tax Invoice Price Tax Rate Variance (TIPV)

• Tax Rate Variance (TRV)

• Tax Quantity Variance (TQV)


Tax Tolerances and Tax-Related Holds

To define tax tolerances:

• Enable the Allow Override for Calculated Tax Lines option for the configuration owner or event class

Tax Tolerances define the limits of user override

If an invoice exceeds the Tax Tolerances, then a Tax-Related Hold is applied during Invoice Validation


Tax Lines Summary and Tax Details

You can use the Tax Lines Summary and Tax Details windows to view, enter, and change the tax lines and distributions for an invoice.


Tax Distributions and Allocations

Use the Tax Distributions window to review and update tax distributions. You can review tax distributions and, if applicable, update the tax recovery rate on a tax distribution.

Use the Allocate Summary Tax Lines page to review and allocate your manual summary tax lines to specific transaction lines.


Tax Amount Verification During Invoice Validation

During Invoice Validation, E-Business Tax automatically verifies that you have correctly entered all tax drivers on an invoice. If tax exceptions exist, one or more tax holds are placed on the invoice.


Setting Up Taxes in E-Business Tax

Tax Regime

Tax Tax

Status

TaxRate

TaxJurisdiction

Recovery Rate

OU TaxAccounts

Tax Authority


US Sales Tax Example

Tax Regime

Tax Tax Jurisdiction

Tax Status

Tax Rate

Operating Unit Tax Account

CA Sales Tax

State Sales Tax

California State Sales Tax

Standard 7.25% 01.005.004.033

County Sales Tax

San Mateo County Sales Tax

Standard 1.0% 01.005.004.033

City Sales Tax

Belmont City Sales Tax

Standard 0.0% 01.005.004.033


UK VAT Example

Tax Regime

Tax Tax Jurisdiction

Tax Status Tax Rate Recovery Rate

UK VAT UK VAT UK VAT Standard 17.5% 100%

Inter-EU 15% 100%

Reduced 5.0% 100%

Zero Rated 0.0%

Exempt 0.0%


Offset Taxes

Existing Oracle Payables implementations that use Offset Taxes can setup and manage Offset Taxes in E-Business Tax.

• Ensure that the Set as Offset Tax option is enabled for the tax.

For new taxes and new implementations, use E-Business Tax’s Self Assessed tax feature instead.


Setting Up Tax for Suppliers

Third Party –Suppliers

Party Tax Profile

Main Information

Tax Registrations

Classifications

Tax Reporting Codes

Account Tax Details (migrated data only)


Suppliers Subject to Income Tax Reporting

To define a supplier as subject to income tax reporting requirements:

• Enter a Taxpayer ID

• Enable the Federal option and select an Income Tax Type (1099 MISC Type).

• Enable the State option, if applicable

• Enable the Allow Withholding Tax option

If you enter a purchase order for a 1099 supplier, then Oracle Purchasing retains the Income Tax Type information at the purchase order line level.


Financials Options

Tax

Member State

VAT Registration Number


Payables Options: Payment

Payment

Exclude Tax from Discount


Summary


• Describe how transaction taxes are calculated for invoices

• Insert manual tax lines and update transaction tax lines

• View tax summary and details


• Understand set up options


1099 Reporting


Objectives


• Describe how to enable 1099 suppliers

• Enter invoices for 1099 suppliers

• Update 1099 information

• Understand 1099 reporting

• Understand 1099 set up options



Entering Invoices for Suppliers Subject to Income Tax Reporting Requirements

If you set up a supplier as federally reportable and assign a default income tax type to the supplier, then that value defaults down to each invoice distribution you enter for that supplier.


Suppliers Subject to Income Tax Reporting Requirements

To define a supplier as subject to income tax reporting requirements:

• Enter a Taxpayer ID

• Enable the Federal option and select an Income Tax Type (1099 MISC Type).

• Enable the State option, if applicable

• Enable the Allow Withholding Tax option

If you enter a purchase order for a 1099 supplier, then Oracle Purchasing retains the Income Tax Type information at the purchase order line level.


Federal Region

Reportable to the United States Internal Revenue Service for 1099 purposes.

In the United States, you must report to the Internal Revenue Service certain types of payments you make to 1099 reportable suppliers.


Income Tax Type Region

Income tax type for a United States 1099 reportable supplier.

You choose from a list of 1099 Miscellaneous Tax types.

Purchasing retains the Income Tax Type at the purchase order line level for a supplier’s purchase orders.


State Region

You enable this option if you participate in the United States Internal Revenue Service Combined Filing Program and the supplier is reportable to a state taxing authority.

Payables uses this status for reporting purposes only.


Reporting Name Region

Tax reporting name for a supplier subject to United States Internal Revenue Service (IRS) income tax reporting requirements.

Required only if the tax reporting name for the supplier is different from the supplier name.

In accordance with IRS requirements, Payables prints this name, instead of the supplier name, on all 1099 reports for the supplier.


Reporting Site Region

This reporting supplier site’s address is printed on the 1099 form and included in the 1099 Electronic Media report.

Payables displays the income tax reporting site for the supplier if you have already defined a supplier site as the tax reporting site in the Tax Reporting region in the Supplier Sites window.


Updating 1099 Information

You can update 1099 information for your suppliers. If you paid a supplier before you set up the supplier as a 1099 supplier, run the Update Income Tax Details Utility.

Or, if you need to update only a few invoices, you can update the 1099 types in the Lines tab


Recording a Refund From a One–Time 1099 Supplier

If you get a refund from a one–time 1099 supplier, you need to record the refund in Payables so that the 1099 reports are accurate.

Enter a credit memo that you match to the original invoice.


1099 Reporting

1096 Form

1099 Forms

1099 Invoice Exceptions Report

1099 Payments Report

1099 Electronic Media

1099 Supplier Exceptions Report

Tax Information Verification Letter


1096 Form

The United States Internal Revenue Service requires that you send a 1096 form as a summary of each 1099 form type you transmit on paper.

Payables generates the report on a preformatted form from the Internal Revenue Service.


1099 Reporting Overview

In the United States, you must report to the Internal Revenue Service certain types of payments you make to 1099 reportable suppliers. In the supplier window, you can designate suppliers as federally reportable.


1099 Forms

1099 forms report on the total 1099 MISC payments for a particular 1099 supplier.

You generate 1099 forms for each tax reporting entity in your organization.

You can use either of the 1099 Forms reports in Payables:

• 1099 Forms report

• 1099 Forms—Comma Delimited Format report


1099 Invoice Exceptions Report

You use the 1099 Invoice Exceptions Report to review paid invoice distributions with inaccurate or missing 1099 income tax information.


1099 Payments Report

You use this report to review payments made to your 1099 reportable suppliers. You can use this report to reconcile to your 1099 Forms, or to prepare additional reporting.


1099 Electronic Media

You submit the 1099 Electronic Media report to generate your summarized 1099 information in electronic format as required by the Internal Revenue Service. You can create this file in a format to either send electronically or store on a diskette or magnetic tape to send to the Internal Revenue Service.


1099 Supplier Exceptions Report

You use the 1099 Supplier Exceptions Report to review suppliers with inaccurate or incomplete 1099 income tax information.

You can run the 1099 Supplier Exceptions Report before you submit your 1099 reports to identify suppliers that Payables will treat as exceptions in your 1099 reports.


Tax Information Verification Letter

This report generates the Tax Information Verification Letter, which requests a supplier to furnish or confirm tax information.

Payables generates this standard letter for each supplier that meets the criteria you select.

Payables does not generate this letter for suppliers with the Type set to Employee in the Suppliers window.


Tax Allocation During Invoice Validation

E-Business Tax automatically creates the appropriate distributions and allocations for Tax lines when you validate the invoice.


Tax Amount Verification During Invoice Validation

During Invoice Validation, E-Business Tax automatically verifies that you have correctly entered all tax drivers on an invoice. If tax exceptions exist, one or more tax holds are placed on the invoice.


Payables Options: Tax Reporting

Tax Reporting

Combined Filing Program

Use Pay Site Tax Region

Income Tax Region


Summary


• Describe how to enable 1099 suppliers

• Enter invoices for 1099 suppliers

• Update 1099 information

• Understand 1099 reporting

• Understand 1099 set up options


Oracle Payables_D49300GC10 R12

Documents

multiple operating

complex service

internal revenue

complex service

post journal

credit card

additional

tax amounts