Accounts Payables

1 of 139Oracle Payables

R12: Oracle Financials

The Changing Face ofOracle Accounts Payable in Release 12


–Invoicing for Service Procurement Complex Terms

–Suppliers Represented in TCA

–New or Improved Workflows

—Line Level and Invoice Level Approval

—Approver entry of unmatched accounting and project information

—Holds Notifications and streamlined resolution

—Invoice Lines and Enhanced Asset Tracking

–Reporting at Operating Unit Level

–New Banking Model

–Enhanced Payment Processing

–MOAC-Multi-Org Access Control

–Multiple Accounting Representations

–AP/AR Netting

R12 Payables – New Features•New Features in Oracle Payables


R12 Suppliers

• In R12, Suppliers join the Trading Community Architecture –Organization Details, Addresses, and Contacts = TCA

–Supplier Terms and Controls = Supplier and Supplier Site

–New AP Tables – Backward Compatible Views

R12 Suppliers & TCA Concepts

• Organization Party • Person Party• Location (Physical Location)• Party Site (Party’s Address)• Relationship Party – Contact• Relationships between Parties


R12 Suppliers: New Tables & Views

• New Payables Tables:–AP_SUPPLIERS

–AP_SUPPLIER_SITES_ALL

–AP_SUPPLIER_CONTACTS

–AP_SUPPLIER_INT_REJECTIONS

• New Views:–PO_VENDORS

–PO_VENDOR_SITES_ALL

–PO_VENDOR_CONTACTS


R12 Suppliers & TCA: Supplier

TCA

Migrating Suppliers to TCA

Suppliers (AP_SUPPLIERS)

Supplier Information

Supplier Profile

Organization Profiles (HZ_ORGANIZATION_PROFILES)

Parties (HZ_PARTIES)

The Party Relationships is populated to transfer the Supplier Hierarchy information. Currently this information isrepresented using the parent_vendor_id column.

After we populated the TCA tables the AP_SUPPLIERS is updated with the PARTY_ID information.

Party Usages (HZ_PARTY_USAGE_ASSIGNMENTS)

(Supplier Usage)

Party Relationships(HZ_RELATIONSHIPS)

(Parent Vendor)

Parentof

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R12 Suppliers & TCA: Trading Partner Information

TCA Party Information Sample

Consolidated Supplies


AP

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R12 Suppliers & TCA: Supplier LocationMigrating Supplier Sites to TCA

AP_SUPPLIER_SITES_ALL

Address

OU

Profile

TCA

Location Profile(HZ_LOCATION_PROFILES)

Site Uses

Location(HZ_LOCATIONS)

UniqueAddresses

Party Sites(HZ_PARTY_SITES)

Combination of

Party, Location &

Duns Number

Party Sites Uses(HZ_PARTY_SITE_USES)

Unique Set of

Site UsesAcrossOUs

Note: All address elements are used in the grouping logic to determine unique addresses.

Address Line1 should be populated, otherwise AP will populate the Site Code for the address line1. We will document this as a part of theUpgrade documentation.

Country is a required field and AP will insert a valid value If one is available at the supplier site. In the absence of that, we will get the country from Default Country profile option or from the country of the OU of the supplier site. Upgrade documentation will have a recommendation for the same.

Upgrade will also stamp the Location ID and Party Site ID in ap_supplier_sites_all table.


R12 Suppliers & TCA: Trading Partner’s Site Address Location

TCA Party Site Sample

Consolidated Supplies 4480 Morning

Star, Dallas, TX


AP

PS

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R12 Suppliers & TCA: Trading Partner ContactsContacts Data Migration Flow

AP_SUPPLIER_CONTACTS

Person

Mail Stop

Department

Contact Points

TCA

HZ_PARTIES(Person Party)

HZ_PARTIES(Relationship Party)

HZ_RELATIONSHIPS(Contact Of)

Contact Of/Contact

Person @Org

HZ_PARTY_SITES(Contact’s Mail Stop within ORG’s Location for Relationship Party)

HZ_ORG_CONTACTS(Contact’s Department Info in the context of Relationship and Org Party Site

ID)

HZ_CONTACT_POINTS(eMail, Phone, Fax, URL, Alt Phone migrated in the context of Relationship

Party)


R12 Suppliers & TCA: Trading Partner Contacts

Consolidated Supplies


R12 Suppliers & TCA: Supplier Sites

Terms and Controls between “You” and your Supplier


R12 Payables – Payables Invoice Approval• Line Level and Invoice Level Approval

–Matched Invoice Production Rule – allows users to configure whether they would like invoices to go through approval if matched to a Purchase Order


R12 Payables – Unmatched Invoice Approval


R12 Payables: Payables Holds Resolution

–Streamlined Holds Resolution process

–Any Manually Releasable Hold

–Workflow enabled

–Negotiation collaboration with suppliers for the following holds:

–Price

–Quantity Ordered

–Quantity Received

–Amount Ordered

–Amount Received


R12 Payables: Payables Holds Resolution – Holds


R12 Payables: Payables Holds Resolution Approvals Management


Invoice Lines and Enhanced Asset Tracking

• Item Description

•Manufacturer

•Serial Number


Reporting at the Operating Unit Level

Operating Unit

New Reports / New Reporting Options


• Bank account is associated with Legal Entity rather than Operating Unit

• Single bank account serves multiple Operating Units

• Any and all Operating Units associated with a ledger can be permitted to use the bank accountPlusCentralised Credit Card Model

Credit Card EncryptionSupplier & Customer Banks

Centralised Banking and PaymentsFunds Disbursements and Capture

LE

OU A OU B OU C

ProjectProjectss

ProjectProjectss

ReceivableReceivabless

ReceivableReceivabless

PayablePayabless

PayablePayabless

InventoInventoryry

InventoInventoryry

Work in Work in ProcessProcessWork in Work in ProcessProcess

PurchasinPurchasingg

PurchasinPurchasingg

AssetAssetss

AssetAssetss


Bank Model: Example of what you can doPay invoices from different OUs with 1 instruction

OU A

OU B

OU CBank

Single Payment

Instruction

Invoices

Payments

Sub Ledger Sub Ledger AccountingAccountingSub Ledger Sub Ledger AccountingAccounting

• New Payments Module• New Bank Model

• New Bank & Credit Card Features


OU A

OU B

OU CBank

Single Payment

Instruction

Invoices

Payments

Example: Shared Service Disbursement

1. Setup accounting policies

2. Select invoices from multiple OUs3. Format for bank and

disbursement countries

4. Send single instruction to bank5. Generate separate payments for

each OU

Centralised Centralised AccountingAccountingCentralised Centralised AccountingAccounting


BanksDefine Owner of Bank Account

Legal Entity


BanksGrant OU Access to Bank Account

Operating Units


Multiple Organisation Access ControlSummary of Changes

• Security Profiles for data security– MO: Security Profile– List of operating units for a responsibility– Defined in HR

• OU field on UI– all transactions– setup data specific to OU, like transaction type

• Enhanced Multi-Org Reporting and Processing– Ledger/Ledger Set parameter on accounting reports and processes– OU parameter on other standard reports and processes– For example: submit the Payables Open Interface Import to import all records across

all OUs

Classify Organization as operating

unit

Select Operating Unit classification

Multi-Org Access ControlSetup –Define Security Profile


Reporting at the Operating Unit Level


MOAC - Typical Screen in Daily Use

Select OUs

Select OUs

US GAAPUS GAAPUS COAUS COAUS US CalendarCalendar

EUREUR

Ledger ALedger A

French RulesFrench RulesPlan Plan ComptableComptableFrench French CalendarCalendar

EUREUR

Ledger BLedger B

CentralisCentralised ed

AccountiAccountingng

CentralisCentralised ed

AccountiAccountingng

Single business transactionSingle business transactioncan create multiplecan create multiple

accounting representationsaccounting representationsand in multiple currenciesand in multiple currencies

Single business transactionSingle business transactioncan create multiplecan create multiple

accounting representationsaccounting representationsand in multiple currenciesand in multiple currencies

DrDr CrCr

Payables InvoicePayables InvoicePayables InvoicePayables Invoice

Multiple Accounting RepresentationsParallel Financial Reporting


R12 Other: AP/AR-Netting

• Establish and Maintain Netting Agreements

- Business Rules

- Trading Partner

• Run Automated Netting Process• Request Trading Partner Approval• Inquiry and Reporting

- Proposed Netting Report

- Final Netting Report


R12 Other: AP/AR-Netting

Enter Netting Parameters

Netting Batch: Net_ABC

Netting Agreement: ABC

Settlement Date: 30-Jul-06

Transaction Due date: 20-Jul-06

Find and order AP and AR Transactions (Order Rule: Amount Descending)

AP Transactions

Inv Amount Due Date AP01 200 10-Jul-06

AP03 100 20-Jul-06

AP02 50 15-Jul-06

AR Transactions

Inv Amount Due Date

AR01 100 8-Jul-06

AR02 50 10-Jul-06

AR03 50 12-Jul-06

Compare AP and AR Balances

AP Balance = 350, AR Balance = 200

So the Netting Amount = 200

Transactions Selected For Netting

AP Transactions

Inv Amount Due Date AP01 200 10-Jul-06

AR Transactions

Inv Amount Due Date

AR01 100 8-Jul-06

AR02 50 10-Jul-06

AP03 50 12-Jul-06

Example:


Payables Setup Steps

• Choosing a Ledger• Defining Financial Options• Defining Payables System Setup• Defining Payable Options• Defining Payment Terms• Control Payables Periods

Setup Steps need to complete in Payables


Choose your Operating Unit

Number of future periods you can maintain in the Control Payables Periods window

Payments that are withheld until work under a contract is completed and accepted

•The Operating Unit popup window will allow you to select the Operating Unit which is tied to your

Ledger and Business Group

Choosing a Ledger


The options you define in Supplier-Purchasing region, except for Inventory Organization, are used as default values for the Purchasing region of the Suppliers window

Purchasing creates journal entries and transfers them to GL to encumber funds for purchase requisitions

Payables will encumber funds for it during Payables Invoice Validation

requisition preparers to have the option to reserve funds

Defining Financials Options


The options you enter in this region control VAT registration for tax purposes


Payables System Setup window to define supplier control options and defaults

Payables uses as the payment terms start date when Payables calculates the due and discount dates for invoice scheduled payments.

Select the date that Payables uses to select invoices for payment

Select the terms that Payables uses to schedule payments for an invoice

Payables System Setup


Defining Payables Options

Payables to automatically create balancing accounting entries for your invoice and payment transactions

Payables to use for distributing the discounts you take when making payments


Payables to use as the default accounting date for invoices during invoice entry

Allow users to update the distributions of a paid invoice

Allow users to select Invoice Validation from the Invoice Actions


Payables subtracts the tax amount from the invoice amount when it calculates the discountable amount for a scheduled payment

create payments with a payment date before the system date

allow users to deduct bank charges from payment


Cutoff Day. For Day of Month type terms only, the day of month after which the due and discount dates of the scheduled payment will be in a future month. The exact month depends on the value you enter for Months Ahead. Payables compares the invoice terms date to the Cutoff Day

Payables uses ranks to choose the most favorable payment terms from invoice and purchase order


Defining payment terms


The period statuses available in Payables are Never Opened, Future, Open, Closed, and Permanently Closed

Control Payables Periods


Suppliers


How Oracle Products Use Supplier Information

Payables

Purchasing

Assets

Property Manager

iSupplier Portal

MOAC

Trading Community Architecture


Flow of Default Values

Procurement Flow Payables Flow

Financials options

Purchasing/Receiving /Payables/Payables System Setup options

Supplier

Scheduled payment line

Item

PO DocumentsDistribution

line

12

1 Takes precedence over 2

Supplier site

Invoice Lines

Invoice


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

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

• Organisation:

Parent Supplier Name & Number–Customer Numbe–Supplier Type, Taxpayer ID/Tax Registration Number

• Tax Details:̶* Rounding Rule̶* Set Invoice Values as Tax Inclusive ̶* Allow Withholding Tax̶* Withholding Tax Group̶* Tax Registrations

•Address Book and Contact Directory

Suppliers Page


• Business Classification: Classification, Minority Type

• Suppliers Products and Services: Manufacturing, Financial

• Supplier Banking Details: Name, Number, Primary, Currency, Start/End Dates

• 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 Change, Allow Offset Taxes, Tax Classification Code & Income Tax Reporting Site.

• Supplier – Purchasing: All New Orders, Ship-To Location, Bill-To Location, Ship via, FOB…

• Supplier – Receiving: Enforce Ship-To Location, Receipt Routing, Match Approval Level, Quantity Received Exception…


•Record information about individuals and companies from whom you purchase goods and services, and also to record information about employees whom you reimburse for expense reports

•Define supplier addresses in your address book

Defining supplier


•You can click on continue on address book window and define sites for this, you can create sites for use when processing transactions with your suppliers

•click on manage site for update of site details


Merging Suppliers

Run supplier audit report

ABC Corp

ABC Corporation

Review merge results ABC Corporation

Merge suppliers

Identify duplicate suppliers

Maintain audit trail


Merging Suppliers

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

–Purchase Order Header Updates Report–Supplier Merge Report


Financials Options


Profile Options

PO: Secondary E-mail Address

PO: In File Path

PO: Terms and Conditions File Name


Invoices


Overview of Invoices

Enter supplierImport/Enterinvoice Validate invoice

Create accountingentries in Subledger

Accounting

Pay invoice

Create PO

Enter requisition

Match to PO


Invoice Types

–Standard

–Credit Memo

–Debit Memo

–Mixed

–Prepayment

–Expense Report

–Withholding Tax

–Interest

–Retainage Release

–Transportation Invoices


Creating Invoices Manually

• 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


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


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


Invoice Workbench


Match Approval Level Options

2-Way

3-Way

4-Way

PO Line Price

Quantity Ordered

Quantity Received

Quantity Accepted

Quantity Billed

Unit Price

Quantity Billed

Quantity Billed

Invoice PO

Entering Purchase Order and Receipt Matched Invoices

• Match invoices to:–Purchase order–Purchase order shipments–Purchase order distributions –Purchase order receipts and receipt lines


Final Matching

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


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


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.


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

•Use the Special Calendar window to define periods that Payables uses for automatic recurring invoices


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

•Use Full Distribution Sets to create distributions with set percentage amounts•Use Skeleton Distribution Sets to create distributions with no set distribution amounts

Entering Recurring Invoice


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 RequestAccount 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


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


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.


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


Setup Options

–Payables System Setup Options–Payables Options–Purchasing Options–Profile Options


Payables System Setup Options

Payables System Setup window to define supplier control options and defaults

Payables uses as the payment terms start date when Payables calculates the due and discount dates for invoice scheduled payments.

Select the date that Payables uses to select invoices for payment

Select the terms that Payables uses to schedule payments for an invoice


Payables Options

• Payables to use as the default accounting date for invoices during invoice entry

Allow users to update the distributions of a paid invoice

Allow users to select Invoice Validation from the Invoice Actions


Payables Options (Continued)


Profile Options

PO: ERS Aging Period

PO: ERS Invoice Number Prefix

AP: Use Invoice Batch Controls

AP: Notification Recipient e-Mail


Defining Interest Rates

•Enable the Allow Interest Invoices Payables option

In the Payment Interest Rates window, you define interest rates Payables uses to calculate and pay interest on overdue invoices. You can add or change a rate at any time


Defining Aging Periods

Aging Report provides information about invoice payments due during four periods you specify

• Enter the Name and Description of the type of aging periods you are defining• Enter First and Second lines you want them to appear on your report• Aging Report uses only the four lowest numbered periods


Key Indicators Report

Use Key Indicators Report to review Payables transaction activity, and review the current number of suppliers, invoices, payments and matching holds in your Payables system:

Prerequisites•Define key indicator calendars


Expense Reports and Credit Cards


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


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.

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

• 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.


Procurement Card Process

Load AP_EXPENSE_FEED_LINE

S_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.


• Card program window to define your credit card programs for each card issuer.

• You use the Code Sets window to define sets of credit card codes for your procurement cards.

Setup Steps


• 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.

• You assign a credit card profile to each card that you assign to a card holder.

• 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.


Transaction Taxes in Payables


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


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)

• 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)


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


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


Set Tax Registration Details:

Check to mark associated tax on all supplier invoices as

Self Assessed.

Set Up – First Party, Party Tax Profile (eBTax)


Supplier’s Tax is $0 and the amount due to the Supplier is $1,000.00

Self Assessed Tax Amount

Process – Calculate Tax


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 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


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.


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


Payables Options: Payment

Payables subtracts the tax amount from the invoice amount when it calculates the discountable amount for a scheduled payment

create payments with a payment date before the system date



Withholding Tax


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.


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 Special Calendar


Defining Tax Codes & Groups

• 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

• You use Tax Groups 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 Payables Options

Select this option to enable Automatic

Withholding Tax


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.

• 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.

Withholding Taxes for Suppliers


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 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.


1099 Reporting


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.


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


Payables Options: Tax Reporting


Advances and Progressive Contract Financing


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).


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.


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.


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.


Thank You

Accounts Payables

Documents

Transcript of Accounts Payables