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Invoice Approval Workflow

Michael V. MilanoOracle Corporation

Abstract

Improve your understanding of invoice

approval workflow. This paper provides anoverview of invoice approval workflow.

Scope

I. Review of AP Setup

II. Overview of Approval Workflow

III. Overview of the Invoice ApprovalIV. Sample Test Case

I. SETUP

Install and setup Oracle Approvals

Management (OAM). You must apply APpatchset I and 2198768, 2220334, 2228792,2257526, 2271164 and 2274701.

Note: OAM and its setup are supported byAccounts Payables Support. OAM setup will

be covered in an upcoming white paper.

The setup in Accounts Payable is fairly

straightforward. Navigate to Payables Options.In the Invoice tab, enable Use Invoice

Approval Workflow. There are two additionaloptions, Allow Force Approval and RequireValidation Before Approval. Allow Force

Approval allows the Accounts Payable user toforce the invoice to an approved state. The

Require Validation Before Approval optionrequires that the old approval process (nowcalled validation) must be run prior to theinvoice approval workflow. Validation as it is

now called, is still the process that will placeholds on invoices and automatically create taxdistributions and invoice price variance

calculations. The new invoice approval

workflow allows for additional constraints tobe applied to an invoice before its approvedfor payment. It is not meant to replacevalidation. It is meant to enhance the approval

process.

II. OVERVIEW OF APPROVAL

WORKFLOW

The Invoice Approval Workflow automatesyour invoice approval process. Based on rules

you define, the workflow determines if aninvoice needs approval, whothe approvers are,and in what order approvers should approvepayment of the invoice. The workflow then

sequentially asks each approver in the approvallist to approve invoices online. For example,you can define a rule so invoices over

$100,000 require CFO approval and then CEOapproval.

If you use Invoice Approval Workflow, then

every invoice that requires approval must beapproved before you can pay it. Payablesindicates that an invoice requires approval bysetting the value in the Approval

status field in the Invoices window toRequired.

When you use this feature, all invoices requireapproval, with the following exceptions.Payables sets the Approval status of the

following invoices to Not Required:

expense reports imported through thePayables Expense Report Import Program(because these expense reports havealready been through an approval process)

recurring invoices if the recurring invoicetemplate did not have the Approval

Workflow Required option enabled

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(because recurring invoices are oftenapproved in advance)

invoices that existed before you enabledthe feature

Invoices that completed the InvoiceApproval Workflow process and theInvoice Approval Workflow process

determined that according to the rules setup in Oracle Approvals Management thatno one needs to approve the invoice.

You can set up your system to request and

receive approval through the approvers email, through the approvers Oracle WorkflowNotifications Workflow web page, or both.

Approvers can approve or reject the invoice. If an approver approves the invoice, then

the invoice goes to the next person in theapprover list until all required people

approve the invoice.

If an approver rejects the invoice, then theworkflow program ends.

If an approver does not respond within thetime you specify, then Workflow willrequest approval from that persons

manager.

If an approver rejects an invoice, then you can

perform one of the following actions from theInvoice Actions window:

Use the Force Approval option to manuallyapprove the invoice (if enabled in PayablesOptions).

Use the Initiate Approval option toresubmit the invoice to the Invoice

Approval Workflow after correcting any

issue that caused the approver to reject theinvoice

Use the Cancel Invoice option to cancel theinvoice

Suggestion: We recommend that you schedulethe Invoice Approval Status Report to run

nightly so you can closely monitor yourrejected invoices.

Note: If you have Allow Force Approvalenabled, it will also override the Require

Validation Before Approval.

You can review the approval status of an

invoice that has started the Invoice ApprovalWorkflow in the following ways:

Invoice Approval History window. Invoice Approval Status Report.Invoice Selection Criteria

You can submit the Invoice Approval

Workflow for an invoice either from the

Invoice Actions window, or from the SubmitRequests window. An invoice must meet all of

the following criteria to be processed:

If the Require Validation Before ApprovalPayables option is enabled, then theinvoice must be validated.

The Approval field value in the Invoiceswindow must be:

1. Required, if you submit the workflowprogram from the Submit Requests

window.2. Anything except Initiated or Manually

Approved, if you submit the workflow

program from the Invoice Actions window.3. The invoice amount must equal the

distribution total.

4. The Ready for Approval check box in theInvoices window must be enabled.

Approval and Validation

The Invoice Validation process and InvoiceApproval Workflow Program can be submitted

in any order for an invoice, unless the RequireValidation Before Approval Payables option isenabled. You might want to enable this option

if you enter invoices that require the InvoiceValidation process to create tax distributions

for you. If your approvers need to review tax

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details before they approve an invoice, then werecommend that you enable this option.

Handling Exceptions

If the workflow program fails, then theworkflow sends an email or workflownotification (or both) to a designated

person such as your system administrator.This person can abort the workflowprogram, retry the failed workflow activity,

or resolve the problem that caused the errorto occur.

If you want to override the InvoiceApproval Workflow for an invoice, aPayables user can force approve it. You

might want to use force approval if there is

a problem with the Workflow program andyou need to pay an invoice immediately.

To force approve an invoice, select it in theInvoiceswindow, then in the Invoice

Actions window choose the ForceApproval option. This stops the workflowprogram for the invoice and sets the

approval status to Manually Approved.This invoice status cannot be updated, evenif the pending approver subsequently

approves or rejects the invoice. Also, you

cannot resubmit the Invoice ApprovalWorkflow for an invoice that has a status

of Manually Approved.

If you want to resubmit an invoice forapproval then you can resubmit InvoiceApproval Workflow from the InvoiceActions window. You can resubmit the

invoice if the approval status is Required,Not Required, Rejected, or Approved.Because the workflow program selects

only invoices that require approval andhave never started the approval process(approval status is Required), you cant use

the Submit Request window to resubmitapproval for an invoice.

You cannot delete an invoice if the InvoiceApproval Workflow is processing or has

processed it. (bug 2386392).

III. WORKFLOW PROCESS FLOW

The first step in the Invoice Approval

Workflow is to enter and invoice in Payables(Invoices Entry Invoices).

Once the invoice has been entered, select theActions button from the invoice workbench.Select the Initiate Approval option. Click

OK. The approval field should now displayInitiated. Note the original value of this fieldwhen the invoice was entered was Required.

Once the invoice approval is Initiated, a

request is placed in the WF_DEFERREDqueue. You can log into the self-service webapplication Workflow Administrator Web

Applications responsibility. Select EventQueue Summary. Select WF_DEFERREDQueue.

In the System Administrator responsibility, runthe Workflow Agent Listener (Requests

Run). This launches the Invoice ApprovalWorkflow and moves the request from the

WF_DEFERRED queue.

The Workflow checks to see if the invoice ismatched to a purchase order. This activity is

disabled by default because a constant value ofNo is seeded for the Exclude PO MatchedInvoices attribute in workflow. When this

activity is enabled, if all distributions on theinvoice are purchase order matched, then thisactivity sets the Invoice Approval status to Not

Required.

Note: To enable this function, bring up theworkflow builder. Select attributes. Open theattribute Exclude PO Matched Invoices. Set

the default value to Yes. Save the changes tothe database.

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Workflow calls OAM to get the identity of thetransactions first approver. OAM compiles a

list of all the approvers who need to approve atransaction. OAM sends each approver anotification to approve the transaction.

If no first approver is found, the workflowends and the approval field is update to Not

Required.

If the first approver is found, a notification is

sent to the approver. The approver can eitherapprove or reject the transaction.

If rejected, an update is made to ApprovalHistory and the approval field changes to

Rejected.

If approved, an update is made to Approval

History and workflow calls OAM to get thenext approver in the approval list.

If no other approvers exist, then the workflowends and the approval field is updated toApproved.

If the next approver is found, then this

approver is sent a notification to approve orreject the transaction. Theyre actions areupdated in Approval History. This continuesuntil there are no approvers in the approval list

who have not been notified. If all approversapprove the transaction, the approval field ischanged to Approved.

IV. SAMPLE TEST CASE

Log into the self-service web applicationsAME Application Administrator

responsibility. Select Approvals. Click AddRule button. Enter a description. Do not enterany constraints. Enter a condition (i.e.

0USD

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Click Approvals. Select the Test tab.

Select Create a Test Transaction.

Choose Person as Test-TransactionRequestor Type.

Search for the requestor.

If the approver is found you should get a list

the test transaction attribute values.

Make any necessary changes to the values and

click the View Approval Process button. Ifan error appears the error is within OAM. If

the approval completes without any errors,then OAM is setup correctly.

Conclusions

It is my desire that this paper has helped you

understand the fundamentals of InvoiceApproval Workflow. I hope that you are nowbetter equipped to troubleshoot problems and

determine what needs to be done to resolve theissue.

In addition, if you encounter a problem thatrequires assistance, please remember to call

Oracle Support. They may have seen theissuebefore and may already have a solution for theissue!

About the Author

Michael Milano is a Technical Analyst with

the Oracle Support financials group. He hasbeen working for Oracle Support for

approximately 4 1/2 years.