Microsoft Power Point - Accounts Payables

COMPANY CONFIDENTIAL AND PROPRIETARY INFORMATION —

DUPLICATION IS PROHIBITED

5.1

Siebel Systems, Inc.

Analytics: Server Architect for Analytical Applications (Siebel 7.7)

1of 139

Oracle Payables

R12: Oracle Financials



5.2



The Changing Face of

Oracle Accounts Payable in Release 12

Originally presented at OOW 2006 by…

Jayanta Bhowmik, Director, Application Development

Start with a few

ice breaker type questions:

“How m

any of you are in production with 11.5.10, 11.5.9, 11.5.8,etc.?”

That’s great, thanks for participating. I’d like to welcome youto today’s presentation. I’m

Jayanta Bhowmik, a Director in the

Development organization responsible for Payables and it’s a privilege to be here today to share with you “The Changing Face

of Accounts Payable in Release 12”

“Before I begin, I’d like to pose some questions to get you to think about your environment today:

•Does your payables departm

ent spend an excessive am

ount of time resolving invoice disputes?

•Do you want to increase efficiency in your payment processing byprocessing across operating units, legal entities, currencies,

pay groups, and payment methods?

•Are your AP users challenged with having the right skill set or domain expertise to m

anage taxes and accounting on invoices?



5.3



3of 139

Oracle Payables

–Invoicing for Service Procurement Complex Terms

–Suppliers Represented in TCA

–New or Improved Workflows

—Line Level and Invoice Level A

pproval

—Approver entry of unmatched accounting and project inform

ation

—Holds Notifications and streamlined resolution

—Invoice Lines and Enhanced Asset Tracking

–Reprotingat 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



5.4



4of 139

Oracle Payables

R12 Suppliers

•In R12, Suppliers join the Trading Community Architecture

–Organization Details, Addresses, and Contacts = TCA

–Supplier Term

s 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



5.5



5of 139

Oracle Payables

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



5.6



6of 139

Oracle Payables

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 inform

ation. Currently this inform

ation is

represented using the parent_vendor_id column.

After we populated the TCA tables the AP_SUPPLIERS is updated with the PARTY_ID inform

ation.

Party Usages

(HZ_PARTY_USAGE_ASSIGNMENTS)

(Supplier Usage)

Party Relationships

(HZ_RELATIONSHIPS)

(Parent Vendor)

Parent

of

PO_VENDORS

PO_VENDOR_SITES_ALL

PO_VENDOR_CONTACTS

APPS.PO_VENDORS APPS.PO_VENDORS



5.7



7of 139

Oracle Payables

R12 Suppliers & TCA: Trading Partner Inform

ation

TCA Party Inform

ation Sam

ple

Consolidated

Supplies



5.8



8of 139

Oracle Payables

APPS. PO_VENDOR_SITES_ALL APPS. PO_VENDOR_SITES_ALLR12 Suppliers & TCA: Supplier Location

Migrating Supplier Sites to TCA

AP_SUPPLIER_SITES_ALL

Address

OU

Profile

TCA

Location Profile

(HZ_LOCATION_PROFILES)

Site Uses

Location

(HZ_LOCATIONS)

Unique

Addresses

Party Sites

(HZ_PARTY_SITES)

Combination

of

Party,

Location &

Duns Number

Party Sites Uses

(HZ_PARTY_SITE_USES)

Unique

Set of

Site Uses

Across

OUs

Note: A

ll 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 ad

dress line1. W

e will document this as a part of the

Upgrade documentation.

Country is a required

field and AP w

ill 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. U

pgrade 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.



5.9



9of 139

Oracle Payables

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

TCA Party Site Sam

ple

Consolidated

Supplies

4480 M

orning

Star, Dallas, TX



5.10



10of 139

Oracle Payables

APPS.PO_VENDOR_CONTACTS APPS.PO_VENDOR_CONTACTSR12 Suppliers & TCA: Trading Partner Contacts

Contacts Data Migration Flow

AP_SUPPLIER_C

ONTACTS

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 M

ail 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 m

igrated in the context of Relationship

Party)



5.11



11of 139

Oracle Payables

R12 Suppliers & TCA: Trading Partner Contacts

Consolidated

Supplies



5.12



12of 139

Oracle Payables

R12 Suppliers & TCA: Supplier Sites

Terms and Controls between “You” and your Supplier



5.13



13of 139

Oracle Payables

R12 Payables –Payables Invoice Approval

•Line Level and Invoice Level A

pproval

–Matched Invoice Production Rule –allows users to configure whether they would like invoices to

go through approval if matched to a Purchase Order



5.14



14of 139

Oracle Payables

R12 Payables –Unmatched Invoice Approval



5.15



15of 139

Oracle Payables




5.16



16of 139

Oracle Payables




5.17



17of 139

Oracle Payables

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



5.18



18of 139

Oracle Payables

R12 Payables: Payables Holds Resolution –Holds



5.19



19of 139

Oracle Payables

R12 Payables: Payables Holds Resolution Approvals

Management



5.20



20of 139

Oracle Payables

Invoice Lines and Enhanced Asset Tracking

•Item Description

•Manufacturer

•Serial Number



5.21



21of 139

Oracle Payables

Reporting at the Operating Unit Level

Operating

Unit

New Reports / New Reporting Options



5.22



22of 139

Oracle Payables

•Ba

nk a

ccou

nt is

ass

ocia

ted

with

Leg

al E

ntity

rath

er th

an

Ope

ratin

g U

nit

•Si

ngle

ban

k ac

coun

t ser

ves

mul

tiple

Ope

ratin

g U

nits

•An

y an

d al

l Ope

ratin

g U

nits

as

soci

ated

with

a le

dger

ca

nbe

per

mitt

ed to

use

the

bank

acc

ount

Plus

�C

entra

lised

Cre

dit C

ard

Mod

el�

Cre

dit C

ard

Encr

yptio

n�

Supp

lier &

Cus

tom

er B

anks

Centralised Banking and Paym

ents

Funds Disbursements and Capture

LE LELELE

OU

AO

U A

OU

AO

U A

OU

BO

U B

OU

BO

U B

OU

CO

U C

OU

CO

U C

Proj

ects

Proj

ects

Proj

ects

Proj

ects

Proj

ects

Proj

ects

Proj

ects

Proj

ects

Proj

ects

Proj

ects

Proj

ects

Proj

ects

Rec

eiva

bles

Rec

eiva

bles

Rec

eiva

bles

Rec

eiva

bles

Rec

eiva

bles

Rec

eiva

bles

Rec

eiva

bles

Rec

eiva

bles

Rec

eiva

bles

Rec

eiva

bles

Rec

eiva

bles

Rec

eiva

bles

Paya

bles

Paya

bles

Paya

bles

Paya

bles

Paya

bles

Paya

bles

Paya

bles

Paya

bles

Paya

bles

Paya

bles

Paya

bles

Paya

bles

Inve

ntor

yIn

vent

ory

Inve

ntor

yIn

vent

ory

Inve

ntor

yIn

vent

ory

Inve

ntor

yIn

vent

ory

Inve

ntor

yIn

vent

ory

Inve

ntor

yIn

vent

ory

Wor

k in

Pro

cess

Wor

k in

Pro

cess

Wor

k in

Pro

cess

Wor

k in

Pro

cess

Wor

k in

Pro

cess

Wor

k in

Pro

cess

Wor

k in

Pro

cess

Wor

k in

Pro

cess

Wor

k in

Pro

cess

Wor

k in

Pro

cess

Wor

k in

Pro

cess

Wor

k in

Pro

cess

Purc

hasi

ngPu

rcha

sing

Purc

hasi

ngPu

rcha

sing

Purc

hasi

ngPu

rcha

sing

Purc

hasi

ngPu

rcha

sing

Purc

hasi

ngPu

rcha

sing

Purc

hasi

ngPu

rcha

sing

Asse

tsAs

sets

Asse

tsAs

sets

Asse

tsAs

sets

Asse

tsAs

sets

Asse

tsAs

sets

Asse

tsAs

sets

There’s a few key points that I’d like to m

ake sure are understood here.

First, we’ve changed the bank m

odel so that a Legal Entity can own a bank account and different Operating Units can access it orbe serviced by that bank

account, we’ve separated the bank account from the Operating Unit.

Bank accounts are now striped by Legal Entities not by OperatingUnits. Transactions (ap invoices, ap payments) are striped by OU's. So the bank account is used

by OU-based transactions, but OU's are m

eaningless to the bank accountitself.

Second, is the fact that all applications that require paymenting activity will use Oracle Payments (which is included as part of E-Business Suite Financials).

Payments have been separated from payables and centralized. So,all funds disbursem

ent and capture are centralized using OraclePayments.

As the new

central payment engine, Oracle Payments processes invoice payments from Oracle Payables, bank account transfers from Oracle Cash M

anagem

ent,

and settlem

ents against credit cards and bank accounts from Oracle Receivables. Oracle Payments provides the infrastructure needed to connect these applications

and others with third party payment system

s and financial institutions.



5.23



23of 139

Oracle Payables

Bank Model: Example of what you can do

Pay invoices from different OUs with 1 instruction

OU A

OU B

OU C

Bank

Single

Payment

Instruction

Invoices

Payments

Sub

Ledg

er

Sub

Ledg

er

Sub

Ledg

er

Sub

Ledg

er

Acco

untin

gAc

coun

ting

Acco

untin

gAc

coun

ting

Sub

Ledg

er

Sub

Ledg

er

Sub

Ledg

er

Sub

Ledg

er

Sub

Ledg

er

Sub

Ledg

er

Sub

Ledg

er

Sub

Ledg

er

Acco

untin

gAc

coun

ting

Acco

untin

gAc

coun

ting

Acco

untin

gAc

coun

ting

Acco

untin

gAc

coun

ting

•New Payments Module

•New Bank Model

•New Bank & Credit Card

Features



5.24



24of 139

Oracle Payables

OU A

OU B

OU C

Bank

Single

Payment

Instruction

Invoices

Payments

Example: Shared Service Disbursement

1. 1.1.1.Se

tup

acco

untin

g po

licie

sSe

tup

acco

untin

g po

licie

sSe

tup

acco

untin

g po

licie

sSe

tup

acco

untin

g po

licie

s2. 2.2.2.

Sele

ct in

voic

es fr

om m

ultip

le O

Us

Sele

ct in

voic

es fr

om m

ultip

le O

Us

Sele

ct in

voic

es fr

om m

ultip

le O

Us

Sele

ct in

voic

es fr

om m

ultip

le O

Us

3. 3.3.3.Fo

rmat

for b

ank

and

disb

urse

men

t Fo

rmat

for b

ank

and

disb

urse

men

t Fo

rmat

for b

ank

and

disb

urse

men

t Fo

rmat

for b

ank

and

disb

urse

men

t co

untri

esco

untri

esco

untri

esco

untri

es4. 4.4.4.

Send

sin

gle

inst

ruct

ion

to b

ank

Send

sin

gle

inst

ruct

ion

to b

ank

Send

sin

gle

inst

ruct

ion

to b

ank

Send

sin

gle

inst

ruct

ion

to b

ank

5. 5.5.5.G

ener

ate

sepa

rate

pay

men

ts fo

r eac

h O

UG

ener

ate

sepa

rate

pay

men

ts fo

r eac

h O

UG

ener

ate

sepa

rate

pay

men

ts fo

r eac

h O

UG

ener

ate

sepa

rate

pay

men

ts fo

r eac

h O

U

Cen

tralis

ed

Cen

tralis

ed

Cen

tralis

ed

Cen

tralis

ed

Acco

untin

gAc

coun

ting

Acco

untin

gAc

coun

ting

Cen

tralis

ed

Cen

tralis

ed

Cen

tralis

ed

Cen

tralis

ed

Cen

tralis

ed

Cen

tralis

ed

Cen

tralis

ed

Cen

tralis

ed

Acco

untin

gAc

coun

ting

Acco

untin

gAc

coun

ting

Acco

untin

gAc

coun

ting

Acco

untin

gAc

coun

ting

So, combining the centralized banks and payments, let’s take a look at an exam

ple where you can pay bills in different OUs with

one bank instruction, which is key for a shared service environment.

1.Now looking at a shared service center payment, some setup is required. You’ll need to define the intercompany payment

and connect it to the intercompany API. Since we have various options here and we don’t know how you’ve set that up, we

don’t do that out of the box. You do need to setup your subledger accounting to do this.

2.You’ll next select the invoices from different Operating Units. So the shared service center person, using M

OAC will go

into different Operating Units and select different invoices.

3.Will create payment batches for each OU and then send off to Payments

4.Payments will combine those payment batches into one instructionto the bank (with the correct form

atting for that bank)

which will disburse the money.

5.Separate payment will be processed in each operating unit



5.25



25of 139

Oracle Payables

Banks

Define Owner of Bank Account

Legal Entity



5.26



26of 139

Oracle Payables

Banks

Grant OU Access to Bank Account

Operating Units



5.27



27of 139

Oracle Payables

Multiple OrganisationAccess Control

Summary 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



5.28



Classify

Organization

as operating

unit

Select

Operating Unit

classification

Multi-Org Access Control

Setup –Define Security Profile

Now, I’m going to explain how to define a security profile. Using O

racle H

RMS, you can define your security profile using two forms: The Security

Profile form or the G

lobal Security Profile form that is shown here. Both forms look alm

ost identical.

The Security Profile Form allows you to select operating units from only one Business G

roup. The G

lobal Security profile Form allows you to select

operating units from m

ultiple Business G

roups.

The decision on which form

to use is really up to you and depends on your H

R implementation and how you want to partition data. All you need to do

is enter a name, and select the Security Type called “Secure organizations by organization hierarchy and/or organization list”. This allows you to

assign m

ultiple O

Us. W

hen assigning operating units, first select classification O

perating Unit, and then select the organization or O

perating Unit

name. You can assign as many operating units as you want.



5.29



29of 139

Oracle Payables

Reporting at the Operating Unit Level

Here is an example of an Accounts Payable report called SupplierAudit. Notice the new O

perating Unit field. When submitting this report, you can

select any operating unit that you have access to.



5.30



30of 139

Oracle Payables

MOAC -Typical S

creen in Daily Use

Select

OUs

Select OUs



5.31



US

GAA

PU

S G

AAP

US

GAA

PU

S G

AAP

US

GAA

PU

S G

AAP

US

GAA

PU

S G

AAP

US

CO

AU

S C

OA

US

CO

AU

S C

OA

US

CO

AU

S C

OA

US

CO

AU

S C

OA

US

Cal

enda

rU

S C

alen

dar

US

Cal

enda

rU

S C

alen

dar

US

Cal

enda

rU

S C

alen

dar

US

Cal

enda

rU

S C

alen

dar

EUR

EUR

EUR

EUR

EUR

EUR

EUR

EURLedg

er A

Ledg

er A

Ledg

er A

Ledg

er A

Ledg

er A

Ledg

er A

Ledg

er A

Ledg

er A

Fren

ch R

ules

Fren

ch R

ules

Fren

ch R

ules

Fren

ch R

ules

Fren

ch R

ules

Fren

ch R

ules

Fren

ch R

ules

Fren

ch R

ules

Plan

Com

ptab

lePl

an C

ompt

able

Plan

Com

ptab

lePl

an C

ompt

able

Plan

Com

ptab

lePl

an C

ompt

able

Plan

Com

ptab

lePl

an C

ompt

able

Fren

ch C

alen

dar

Fren

ch C

alen

dar

Fren

ch C

alen

dar

Fren

ch C

alen

dar

Fren

ch C

alen

dar

Fren

ch C

alen

dar

Fren

ch C

alen

dar

Fren

ch C

alen

dar

EUR

EUR

EUR

EUR

EUR

EUR

EUR

EURLe

dger

BLe

dger

BLe

dger

BLe

dger

BLe

dger

BLe

dger

BLe

dger

BLe

dger

B

Cen

tralis

ed

Cen

tralis

ed

Cen

tralis

ed

Cen

tralis

ed

Acco

untin

gAc

coun

ting

Acco

untin

gAc

coun

ting

Cen

tralis

ed

Cen

tralis

ed

Cen

tralis

ed

Cen

tralis

ed

Cen

tralis

ed

Cen

tralis

ed

Cen

tralis

ed

Cen

tralis

ed

Acco

untin

gAc

coun

ting

Acco

untin

gAc

coun

ting

Acco

untin

gAc

coun

ting

Acco

untin

gAc

coun

ting

Sing

le b

usin

ess

trans

actio

nSi

ngle

bus

ines

s tra

nsac

tion

Sing

le b

usin

ess

trans

actio

nSi

ngle

bus

ines

s tra

nsac

tion

can

crea

te m

ultip

leca

n cr

eate

mul

tiple

can

crea

te m

ultip

leca

n cr

eate

mul

tiple

acco

untin

g re

pres

enta

tions

acco

untin

g re

pres

enta

tions

acco

untin

g re

pres

enta

tions

acco

untin

g re

pres

enta

tions

and

in m

ultip

le c

urre

ncie

san

d in

mul

tiple

cur

renc

ies

and

in m

ultip

le c

urre

ncie

san

d in

mul

tiple

cur

renc

ies

Sing

le b

usin

ess

trans

actio

nSi

ngle

bus

ines

s tra

nsac

tion

Sing

le b

usin

ess

trans

actio

nSi

ngle

bus

ines

s tra

nsac

tion

Sing

le b

usin

ess

trans

actio

nSi

ngle

bus

ines

s tra

nsac

tion

Sing

le b

usin

ess

trans

actio

nSi

ngle

bus

ines

s tra

nsac

tion

can

crea

te m

ultip

leca

n cr

eate

mul

tiple

can

crea

te m

ultip

leca

n cr

eate

mul

tiple

can

crea

te m

ultip

leca

n cr

eate

mul

tiple

can

crea

te m

ultip

leca

n cr

eate

mul

tiple

acco

untin

g re

pres

enta

tions

acco

untin

g re

pres

enta

tions

acco

untin

g re

pres

enta

tions

acco

untin

g re

pres

enta

tions

acco

untin

g re

pres

enta

tions

acco

untin

g re

pres

enta

tions

acco

untin

g re

pres

enta

tions

acco

untin

g re

pres

enta

tions

and

in m

ultip

le c

urre

ncie

san

d in

mul

tiple

cur

renc

ies

and

in m

ultip

le c

urre

ncie

san

d in

mul

tiple

cur

renc

ies

and

in m

ultip

le c

urre

ncie

san

d in

mul

tiple

cur

renc

ies

and

in m

ultip

le c

urre

ncie

san

d in

mul

tiple

cur

renc

ies

Dr

DrDr

Dr

Dr

DrDr

Dr

Cr

CrCr

Cr

Cr

CrCr

Cr

Paya

bles

Invo

ice

Paya

bles

Invo

ice

Paya

bles

Invo

ice

Paya

bles

Invo

ice

Paya

bles

Invo

ice

Paya

bles

Invo

ice

Paya

bles

Invo

ice

Paya

bles

Invo

ice

Paya

bles

Invo

ice

Paya

bles

Invo

ice

Paya

bles

Invo

ice

Paya

bles

Invo

ice

Multiple Accounting Representations

Parallel Financial Reporting



5.32



32of 139

Oracle Payables



5.33



33of 139

Oracle Payables



5.34



34of 139

Oracle Payables



5.35



35of 139

Oracle Payables



5.36



36of 139

Oracle Payables



5.37



37of 139

Oracle Payables



5.38



38of 139

Oracle Payables



5.39



39of 139

Oracle Payables



5.40



40of 139

Oracle Payables

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



5.41



41of 139

Oracle Payables

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:



5.42



42of 139

Oracle Payables

Payables Setup Steps

•Choosing a Ledger

•Defining Financial Options

•Defining Payables System Setup

•Defining Payable Options

•Defining Paym

ent Term

s

•Control Payables Periods

Setup Steps need to complete in Payables



5.43



43of 139

Oracle Payables

Choose your

Operating Unit

Number of future periods you

can maintain in the Control

Payables Periods window

Paym

ents 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



5.44



44of 139

Oracle Payables

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



5.45



45of 139

Oracle Payables

The options you enter in this region control V

AT registration for tax purposes



5.46



46of 139

Oracle Payables

Payables System Setup window to define supplier control options and defaults Payables uses as the

paym

ent term

s start date

when Payables calculates the

due and discount dates for

invoice scheduled paym

ents.

Select the date that Payables

uses to select invoices for

paym

ent

Select the term

s that

Payables uses to schedule

paym

ents for an invoice

Payables System Setup



5.47



47of 139

Oracle Payables

Defining Payables Options

Payables to automatically create

balancing accounting entries for your

invoice and paym

ent transactions

Payables to use for distributing

the discounts you take when

making paym

ents



5.48



48of 139

Oracle Payables

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



5.49



49of 139

Oracle Payables

Payables subtracts the tax amount

from the invoice amount when it

calculates the discountable amount

for a scheduled paym

ent

create paym

ents with a paym

ent date

before the system date

allow users to deduct bank

charges from paym

ent



5.50



50of 139

Oracle Payables

Cutoff Day. For Day of Month type term

s only, the day of month after whichthe due and discount

dates of the scheduled paym

ent will be in a future m

onth. The exact month depends on the value

you enter for Months Ahead. Payables compares the invoice term

s date to the Cutoff Day

Payables uses ranks to choose the

most favorable paym

ent term

s from

invoice and purchase order


charges from paym

ent

Defining paym

ent term

s



5.51



51of 139

Oracle Payables

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

Perm

anently Closed

Control P

ayables Periods



5.52



52of 139

Oracle Payables

Suppliers



5.53



53of 139

Oracle Payables

How Oracle Products Use Supplier Inform

ation

Payables

Purchasing

Assets

Property Manager

iSupplier

Portal

MOAC

Trading Community

Architecture

How Oracle Products Use Supplier Inform

ation

Suppliers can be set up from m

any different applications, but the data is stored in a single repository called the Trading

Community Architecture (TCA). TCA provides a single, common definition that can be used to identify customers,

suppliers, and organizations that provide you with goods or services, and are in turn, a customer of your own products

or services. The TCA repository stores the key elements that define an organization, identity, business locations, and

key contacts, so that different Oracle products use a common trading partner definition.

Applications that share supplier inform

ation are:

Purchasing

Purchasing uses supplier defaults, such as freight term

s and shipping details, on requisitions, purchase orders, requests

for quotations, etc.

Payables

Payables uses supplier defaults, such as method of payment and bank account inform

ation, during invoice entry and

payment processing.

Assets

Assets maintains the supplier nam

e and number for each asset record.



5.54



54of 139

Oracle Payables

Flow of Default Values

Procurement Flow

Payables Flow

Financials options

Purchasing/Receiving /Payables/Payables System Setup options

Supplier

Scheduled

paym

ent line

Item PO Documents

Distribution

line

1

2

1Takes precedence over2

Supplier site

Invoice Lines

Invoice

Flow of Default Values

Defaults set at higher levels flow down to lower levels where you can override them

.

Defaults reduce data entry by providing default values based on corporate policy. Optional defaults (especially

the higher level ones) should be left blank if you frequently override them

.

Purchase order m

atched invoices will receive defaults from the purchase order you specify when you m

atch.

Note:Changes to default values affect only new

records, not existing records. For exam

ple, if payment term

s in the

Payables Options window are reset to Net 30 from Net 45, new

suppliers will have a default of Net 30. Existing

suppliers will have term

s of Net 45.



5.55



55of 139

Oracle Payables

•Search: You can find suppliers by using the Search region of theSuppliers

page.

•Quick Update: You can use Quick Update for routine maintenance of

supplier inform

ation.

•Organisation:

Parent Supplier Name & Number

–Customer Numbe

–Supplier Type, Taxpayer ID/Tax Registration Number

•Tax Details:

Rounding Rule

Set Invoice Values as Tax Inclusive

Allow W

ithholding Tax

Withholding Tax Group

Tax Registrations

•Address Book and Contact Directory

Suppliers Page

Finding Suppliers

Use the Search region of the Suppliers page to enter a wide variety of search criteria including:

Supplier Nam

e

Supplier Number

Supplier Type

Tax Registration

DUNS number

From the Suppliers page, you can review, update, or create new

suppliers.



5.56



56of 139

Oracle Payables

•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…



5.57



57of 139

Oracle Payables

•Record inform

ation about individuals and companies from whom youpurchase goods and services,

and also to record inform

ation about employees whom you reimburse for expense reports

•Define supplier addresses in your address book

Defining supplier



5.58



58of 139

Oracle Payables

•You can click on continueon address book window and define sites for this, you can create sites for

use when processing transactions with your suppliers

•click on m

anage site for update of site details



5.59



59of 139

Oracle Payables

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

Use the Supplier M

erge program to m

aintain your supplier records. You can use it to m

erge duplicate suppliers into a

single, consolidated supplier and to m

erge transactions within the same supplier from one supplier site to a different

supplier site. You can choose to m

erge all transactions for a supplier into a new

supplier, or you can just choose to

merge unpaid invoices. This option is useful in the case of an acquisition. In that case, you m

ight want to leave all of

the transaction history with the original supplier and only m

erge unpaid invoices to the new

supplier who now wants to

receive the payments.

Note:Merging suppliers is an irreversible action. You cannot reverse the merge once it has completed. Before you

initiate the merge program, you should be sure that the action you want to take is final.

Once the merge process is complete, the resulting site nam

es foreach supplier at the end of the process m

ust be unique

within that supplier. For exam

ple, the request to copy a site nam

ed “TX-D

ALLAS” to a supplier with a site with the

same nam

e would not be successful as it would result in duplicate site nam

es for the same supplier after the merge.

Where this situation exists, renam

e one of the sites to completethe merge.

In addition, you need to decide the effect the merge will have on existing purchase orders and invoices.

For purchase orders, you indicate whether you want all or none of the existing purchase orders to be updated

with the new

supplier/site nam

es.



5.60



60of 139

Oracle Payables

Merging Suppliers

•After you have merged suppliers, Payables automatically prints the

following reports:

–Purchase Order Header Updates Report

–Supplier Merge Report

Merging Suppliers

The Supplier M

erge Report will list invoices that could not be merged because they would result in duplicate invoice

numbers for the same supplier. You’ll need to research these invoices and adjust them

as appropriate. Consider

attaching both reports to each supplier record for future reference. Additionally consider creating an attachment to be

placed on both supplier records documenting the discovery and research that supports how the merge was carried out in

the system

.



5.61



61of 139

Oracle Payables

Financials Options

Financials Options

(N) Setup > Options > Financial Options

Use Financials Options to define Supplier defaults across all Oracle Financials applications, including Payables. You

can define supplier-and supplier site-specific defaults in the Suppliers page.

RFQ O

nly Site

Indicates that you can create RFQs in Purchasing for this site. You cannot, however, create purchase orders using an

RFQ Only site.

Ship-To Location and Bill-To Location

These locations are your addresses where suppliers generally send either shipments for goods or services or where they

send the invoice. These locations are often not the same.

Inventory O

rganization

The Purchasing inventory organization.

Ship Via

Indicates the preferred freight carrier your company uses.



5.62



62of 139

Oracle Payables

Profile Options

PO: Secondary E-m

ail Address

PO: In File Path

PO: Term

s and Conditions File Name

Profile Options

System

Administrator Responsibility

(N) Profiles > System

PO: Secondary E-m

ail Address

This profile option allows you to send a copy of the e-mail PO to your company. If you wish to resend the e-mail, you

will need to log into this secondary e-m

ail account and resend it from there.

PO: In File Path

Enter the absolute path of the directory where the generic termsand conditions file is placed.

PO: Terms and Conditions File Name

Enter the nam

e of the generic terms and condition file that willbe printed on your purchase documents.



5.63



63of 139

Oracle Payables

Invoices



5.64



64of 139

Oracle Payables

Overview of Invoices

Enter supplier

Import/Enter

invoice

Validate invoice

Create accounting

entries in Subledger

Accounting

Pay invoice

Create PO

Enter requisition

Match to PO

Overview of Invoices

Note:The Payables product fits within the procure to pay process flow. Entering suppliers should have been covered

at this point.

An invoice is an itemized list of goods shipped or services rendered, with an account of all costs. Oracle Payables lets

you capture all the attributes of the real-life invoice documents you receive from your suppliers. You can import

invoices from external sources (other Oracle applications or Third Party applications) using the Payables Open

Interface, or you can enter them

in Payables, using the Invoice Workbench or Quick Invoices windows.



5.65



65of 139

Oracle Payables

Invoice Types

–Standard

–Credit Memo

–Debit Memo

–Mixed

–Prepaym

ent

–Expense Report

–Withholding Tax

–Interest

–RetainageRelease

–Transportation Invoices

Invoice Types

Standard

An invoice from a supplier representing an amount due for goods or services purchased. Standard invoices can be either

matched to a purchase order or not matched.

Credit M

emo

A m

emo from a supplier representing a credit amount toward goodsor services.

Debit M

emo

An invoice you enter to record a credit for a supplier who does not send you a credit m

emo.

Mixed

An invoice type you enter for matching to both purchase orders and invoices. You can enter either a positive or a

negative am

ount for a Mixed invoice type.

Prepayment

A type of invoice you enter to pay an advance payment for expenses to a supplier or em

ployee.

Expense Report



5.66



66of 139

Oracle Payables

Creating Invoices Manually

•You can m

anually enter invoices into Payables using:

–Invoice W

orkbench

–Quick Invoices window

Creating Invoices Automatically

•Your system can create the following types of invoices:

–Recurring Invoices

–RTS Invoices

–Retroactive Price Adjustment Invoices



5.67



67of 139

Oracle Payables

Assigning a Default GL Date Distribution

GL date

GL Date Basis

Payables Option

Invoice date,

system date, or

invoice received

date

Defaults to

Determ

ines default

Invoice GL

date

Assigning a Default GL Date

Payables determines the accounting period in which an invoice orpayment will be included by comparing the invoice

or payment GL date to the ranges of dates you have defined for your accounting periods in your accounting calendar.

The default invoice GL date is based on the GL Date Basis Payables option. Payables automatically defaults this GL

date to new

invoice distributions added to the invoice. If you specify a GL date on the invoice batch, that GL date will

default to invoices you enter into the batch. You can change the GL date for individual invoice lines. The GL date is

stored at the invoice header so if you were to add additional invoice lines, the GL dates on the lines would be the same

as the date on the invoice header.

The GL Date Basis Payables option determines what date is used as the GL date. The GL date for each invoice will

default based on one of the following options:

Invoice date

System

date

Receipt/Invoice

Receipt/System

(Payables uses the payment date as the GL date for your payments.)



5.68



68of 139

Oracle Payables

Invoice W

orkbench

Invoices Window

–Invoice Header

–General

–Lines

–Holds

–View Paym

ents

–Scheduled Paym

ents

–View Prepaym

ent

Applications

Other Features

–Actions

–Calculate Tax

–Tax Details

–Corrections

–Quick Match

–Match

–Distributions

Invoice Workbench

The Invoice Workbench is a group of windows that you can use to enter complex invoices or invoices that require

online validation and defaulting. Also, use the Invoice Workbench when entering an invoice that needs im

mediate

action, such as payment.

The primary window in the Invoice Workbench is the Invoices window. The Invoices window is divided into the

following regions:

Invoice Header

General

Lines

Holds

View Payments

Scheduled Payments

View Prepayment Applications

These regions are described in detail in this presentation.



5.69



69of 139

Oracle Payables

Invoice W

orkbench



5.70



70of 139

Oracle Payables

Match Approval Level O

ptions

2-W

ay

3-W

ay

4-W

ay

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

Match Approval Level Options

The match approval level defaults to purchase order shipment lines when the purchase order is entered. You can

override the default on the purchase order shipment. If you find that you are frequently overriding this value, change

the default at the supplier site level.

If an item is used on the PO, the match approval level will default from the item

and will override the supplier site. If

the Item

match approval level for the Item

= Receipt required, then it results in a 3-w

ay m

atch. If the Item

match

approval level for the Item

= Inspection required, then it results in a 4-w

ay m

atch.

When quantities and prices exceed specific tolerances you define, the Payables Validation process will place a

matching hold on the invoice. You can configure m

atching holds so m

anual override is not possible in the Invoice

Holds and Release Nam

es window.

2-W

ay (Invoice to Purchase O

rder)

Quantity billed vs. quantity ordered on shipment line

Invoice unit price vs. purchase order line unit price

3-W

ay (Invoice to Purchase O

rder and Receipt)

2-W

ay m

atch criteria AND



5.71



71of 139

Oracle Payables

Final M

atching

•During m

atching, select the Final Match option to indicate that no m

ore

invoices should be m

atched to the purchase order.



5.72



72of 139

Oracle Payables

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 Q

TY Billed = 5

Total IPV = 0

Match

Match &

Price

Correct

1 2

Price Correction Exam

ple

For exam

ple, you m

ay want to record a price correction for a purchase order shipment if you receive an invoice from

the supplier that is an adjustment to the unit price of an invoice you previously m

atched to that purchase order

shipment. Price corrections adjust the unit price without adjusting the quantity billed on the purchase order.

In this exam

ple, the original invoice is overbilled by $2/unit. The invoice was within tolerance so it was m

atched and

paid. After the invoice price variance (IPV) was discovered, the buyer contacted the supplier who agreed to issue a

credit m

emo to offset the over billed amount. The credit m

emo could be entered into the system

without using the

price correct functionality, but the invoice price variance offset would not be reflected. Using the price correction

functionality corrects the invoice price variance but does not increm

ent the quantity billed against the purchase order

shipment.

Note:The IPV is calculated as (invoice unit price -purchase order line unit price) x quantity invoiced.



5.73



73of 139

Oracle Payables

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

You use the Quick Invoices window for your everyday entry of invoice records. You use this window for rapid, high–

volume entry of Standard and Credit M

emo invoices that are not complex and do not require extensive online

validation or defaulting of values during entry. You can use this window for purchase order m

atching and for applying

prepayments to the invoice you are entering.

The inform

ation entered in the Quick Invoices window is stored in the Payables Open Interface tables. Because the

system

perform

s limited validation and defaulting of invoice values while you are entering invoices, you can enter

invoices m

ore quickly in the Quick Invoices window than you can in the Invoice Workbench.

You can use the Quick Invoices window if you want to use the Open Interface Workflow. You can customize the Open

Interface Workflow to process your invoice records before you import them

. For exam

ple, you can perform

custom

validation of cost center inform

ation before you submit import.

Note: Speed up invoice record entry by customizing Quick Invoices folders. You can resize, renam

e, m

ove, and hide

fields to m

eet your needs.



5.74



74of 139

Oracle Payables

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

Entering Recurring Invoices

Recurring Invoice Template

With a recurring invoice template, you can do the following:

Specify the intervals in which invoices based on the recurring invoice template will be created.

Create up to two special one–time invoice am

ounts of a non–standard amount, such as a deposit or balloon

payment.

Define recurring invoices to increase or decrease by a fixed percentage from period to period.

When Payables creates recurring invoices, the invoice date is the first date of the period in which the recurring invoice

is created. The Terms Date depends on the Terms Date Basis setting at the supplier site, but is calculated differently

than for regular invoices:

If the Terms Date Basis is set to System

Date, then the Terms Date is the same date that the recurring invoice

was created.

If the Terms Date Basis is set to anything else, then the Terms Date is the invoice date, which is the first day of

the period in which the recurring invoice is created.

Special Calendar



5.75



75of 139

Oracle Payables

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



5.76



76of 139

Oracle Payables

Self Service Invoices

Supplier enters

invoice in

iSupplierPortal

Invoice Request

Account payables

department approves

request

Without PO

Invoice

Payables

Launches

Workflow

With PO

Payables User

enters invoice in

Invoice Actions

page

Self Service Invoices

Suppliers who have been granted an iSupplier

Portal user account, can enter invoices using iSupplier

Portal.

Payables integrates with Oracle iSupplier

Portal to enable suppliers to create, submit, and view self service invoices.

Suppliers with an iSupplier

Portal account can create invoices for:

Open, approved, standard, or blanket purchase orders that are not fully billed

Item

s from m

ultiple purchase orders

Item

s for which there is no purchase order

Suppliers can also use iSupplier

Portal to enter credit m

emos against a fully billed purchase order. Depending on the

supplier setup, suppliers can use iSupplier

Portal to view self service invoices, including any retainageand recoupment

inform

ation for Contract Financing Invoices. In addition, iSupplier

Portal also allows suppliers to request advances.

Suppliers can only request advances if the advances were pre-approved on the purchase order. Even if you don't

implement Oracle iSupplier

Portal, you can also allow internal users to enter self serviceinvoices using the Invoice

Actions page.

If the supplier submits an invoice that is matched to a purchaseorder, the invoice is entered directly in Payables. It is

considered a liability and can be updated and validated in Payables.



5.77



77of 139

Oracle Payables

Paym

ent Requests

Receivables

Loans

Paym

ent Request

Account payables

department approves

request

submits

If requires

approval,

Payables

Launches

Workflow

Payables applies

holds, if necessary

Pay

No approval

required

Payment Requests

You can use Payables to disburse funds to a party (a payee) who is not defined as a trading partner in your supplier

master. E-Business Suite products, such as Oracle Receivables and Oracle Loans, can submit disbursem

ent requests to

Payables, where you can disburse the funds and m

anage the payment process using the payment managem

ent features

that are available in Payables. W

hen a disbursem

ent request is submitted to Payables, it is recorded as a payment

request.

Using payment requests you can:

Approve payment requests using the Invoice Approval W

orkflow

Account for payment requests, through Payables' integration withOracle Subledger Accounting

Calculate and m

anage tax, through Payables' integration with Oracle E-Business Tax

Pay and report on payment requests

You can submit a payment request from another application, for exam

ple, from Receivables to pay a customer for an

On Account Credit M

emo, or from Loans to disburse funds for a loan, and Payables will verify, account, tax, and

approve the payment request. You can track the progress of the payment request in the originating application. Once

the payment request is approved, you can report and audit the payment request in Payables.



5.78



78of 139

Oracle Payables

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

Create

subledgeraccounting

100,000AP

60,000

10,000

30,000

InvoiceValidation Process

Before you can pay or account for an invoice (including prepayments), you m

ust submit Invoice Validation for the

invoice in one of three ways:

System

.Submit the Invoice Validation program from the Submit Request window.

Batch.Use the Validate button in the Invoice Batches window.

Online. Use the Validate button in Invoice Actions window.

Invoice Validation validates the matching, tax, period status, exchange rate, and distribution inform

ation for invoices

you enter and automatically applies holds to exception invoices.It checks the supplier site to determine which invoice

tolerance tem

plate to use. If no invoice tolerance tem

plate is specified, tolerance checking is not perform

ed. If an

invoice tolerance tem

plate is specified, Invoice Validation willcheck against the specific invoice tolerances template

stored in the Invoice Tolerances window to determine if the invoice falls within the defined tolerances and

automatically applies holds to exception invoices.

If an invoice has a hold, you can release the hold by correctingthe exception and then resubmitting Invoice Validation.

Correct exceptions by updating the invoice or the purchase order, or change your Invoice Tolerances. Payables

automatically releases the hold when the exception is no longer an issue. You can m

anually release certain invoice

holds even if you have not resolved the matching error condition. You can do this in the Invoice Holds window.



5.79



79of 139

Oracle Payables

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



5.80



80of 139

Oracle Payables

Approval

•The Invoice Approval W

orkflow Program can be submitted before orafter

validation, unless the Require Validation Before Approval P

ayables option is

enabled.

Invoice Approval Levels

•You can define the approval rules in Oracle Approvals Managementin one of the

following ways:

–Line-level rules only

–Document-level rules only

–Line-level and document-level rules

Approval You m

ight want to enable the Require Validation Before Approval Payables option if your approvers need to review

tax details before they approve an invoice.

Invoice Selection Criteria

An invoice must m

eet all of the following criteria to be processed:

1.

Ifthe Require Validation Before Approval Payables option is enabled, or if the invoice was

submitted by a Supplier using iSupplier

Portal, then the invoice must be validated.

2.

TheApproval field value in the Invoices window m

ust be:

Required, if you submit the workflow program from the Submit Requests window

Anything except Initiated or Manually Approved, if you submit the workflow program from the Invoice

Actions window

3.

Theinvoice am

ount must equal the distribution total.



5.81



81of 139

Oracle Payables

Invoice Approval W

orkflow

•The Invoice Approval W

orkflow automates your invoice approval process.

Based on rules you define, the workflow determ

ines if an invoiceneeds

approval, who the approvers are, and in what order approvers should approve

paym

ent 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 W

orkflow Notifications

Workflow web page, or both.

Invoice Approval W

orkflow

The workflow then sequentially asks each approver in the approval list to approve invoices online. For exam

ple, you

can define a rule so invoices over $100,000 require CFO approvaland then CEO approval.

If you use Invoice Approval W

orkflow, then every invoice that requires approval m

ust be approved before you can pay

it. Payables indicates that an invoice requires approval by setting the value in the Approval status field in the Invoices

window to Required.

When you use this feature, all invoices require approval, with the following exceptions. Payables sets the Approval

status of the following invoices to Not Required:

expense reports im

ported through the Expense Report Export program (because these expense reports have

already been through an approval process)

recurring invoices if the recurring invoice template did not have the Approval W

orkflow Required option

enabled (because recurring invoices are often approved in advance)

invoices that existed before you enabled the feature

invoices that completed the Invoice Approval W

orkflow process and the Invoice Approval W

orkflow process

determined that according to the rules set up in Oracle Approvals Managem

ent that no one needs to approve the

invoice



5.82



82of 139

Oracle Payables

Apply Holds to Invoices

User

Manually

Hold Types

Predefined

Definable

Releasable

Acct Hold Reason

No

Funds Hold Reason

Sometim

es

Insufficient Inform

ation

No

Invoice Hold Reason

Yes

Matching Hold Reason

Sometim

es

Period Hold Type

No

PO Req Hold Reason

No

Variance Hold Reason

Sometim

es

Apply Holds to Invoices

(N) Setup > Invoice > Hold and Release Nam

es

You can m

anually apply one or more Invoice Hold Reasons (”holds”) to an invoice using the Holds tab of the Invoices

window. Use any of the default hold reasons or define your own.



5.83



83of 139

Oracle Payables

Apply Holds to Scheduled Paym

ents

Invoice

Hold

Due Date

Gross Amount

04-APR-2007

900

04-M

AY-2007

100

$1000.00

Apply Holds to Scheduled Payments

You can hold payment of part of an invoice by placing one or more of the scheduled payments on hold in the

Scheduled Payments window. For exam

ple, to pay 90% of an invoice now and 10% of an invoice at a future date, enter

the invoice and create a split payment schedule; one representing 90% of the invoice am

ount and the other representing

10% of the invoice am

ount. Enable the Hold check box for the payment schedule representing the 10%.



5.84



84of 139

Oracle Payables

Setup Options

–Payables System Setup Options

–Payables Options

–Purchasing Options

–Profile Options



5.85



85of 139

Oracle Payables

Payables System Setup Options

Payables System Setup window to define supplier control options and defaults

Payables uses as the

paym

ent term

s start date

when Payables calculates the

due and discount dates for

invoice scheduled paym

ents.

Select the date that Payables

uses to select invoices for

paym

ent

Select the term

s that

Payables uses to schedule

paym

ents for an invoice

Payables System

Setup Options

(N) Setup > Options > Payables System

Setup

Use the following options to define supplier-related invoice and payment default values.

Invoice M

atch O

ption.Select Purchase Order or Receipts to indicate how you want to m

atch m

ost invoices.

Defaulting is in the following order, but can be overridden at any level: Payables System

Setup > supplier > supplier

site > purchase order shipment. The value at the purchase order shipment controls which purchasing document type that

you can m

atch to an invoice.

Hold Unmatched Invoices.If you enable this option for a supplier site, Payables applies

a Matching Required hold to

an invoice if it has Item type distributions that are not matched to either a purchase order or receipt. Payables applies

the hold during Invoice Validation. You cannot pay the invoice until you release the hold. You can release this hold by

matching the invoice to either a purchase order or receipt, and resubmitting Invoice Validation. You can m

anually

release the hold in the Holds tab of the Invoice Workbench or through W

orkflow. Payables does not apply a hold if the

sum of the invoice distributions by accounting code combination is zero. Payables does not apply this hold to

Prepayment or Interest invoices.

Invoice Currency.Select the currency to use as a default for new

suppliers that you enter.

Pay G

roup.Select the pay group to use as a default for new

suppliers thatyou enter.



5.86



86of 139

Oracle Payables

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

PayablesOptions

(N) Setup > Options > Payables Options

Allow Force Approval. Enable this option if you use the Invoice Approval W

orkflow Program and want to allow

accounts payable processors to override the workflow and m

anually approve invoices by using the Force Approval

option in the Invoice Actions window. You m

ight want to force approve an invoice if the Invoice Approval W

orkflow

does not complete for an invoice, or if you have authority to pay an invoice without using the workflow process.

Require Validation Before Approval. If you enable this option, then Invoice Approval W

orkflow does not select any

invoice for processing unless the invoice status is Validated. You m

ight want to enable this option if you need the

Invoice Validation process to create tax distributions for an invoice before approvers review it.



5.87



87of 139

Oracle Payables

Payables Options (Continued)

Payables Options (Continued)

(N) Setup > Options > Payables Options : (T) Matching

Allow Final Matching. Enable this option to allow final m

atching of purchase order m

atched invoices. You can

indicate a final m

atch when you m

atch an invoice to a purchase order during invoice entry or when you adjust a

matched invoice distribution. You cannot final m

atch when you m

atch invoices to receipts. If you final m

atch to a

purchase order, subsequent invoices m

atched to the purchase order will be placed on hold during Invoice Validation.

You cannot manually release a final m

atch hold.

Allow Distribution Level Matching. Enable this option if you want to allow m

atching to purchase order distributions.

If you enable this option, you can m

atch an invoice to one or more purchase order distributions. If you do not enable

this option, Payables allows you to m

atch an invoice only to a purchase order shipment.

Allow M

atching Account Override. Enable this option if you want to allow overriding of the invoice distribution

account created from m

atching to a purchase order. You can override the account for a matched invoice distribution in

the Distributions window of the Invoice Workbench, or on any imported invoices. You cannot override the account for

a matched invoice distribution if you use encumbrance accounting, or perpetual receipt accrual. In addition, you cannot

override the account if the purchase order is projects related and the item

destination for the purchase order distribution

is Inventory. If you m

atch to an item you are receiving into inventory, the accrual account is used for the invoice



5.88



88of 139

Oracle Payables

Profile Options

PO: ERS Aging Period

PO: ERS Invoice Number Prefix

AP: Use Invoice Batch Controls

AP: Notification Recipient e-M

ail

Profile Options

System

Administrator Responsibility

(N) Profile > System

PO: ERS Aging Period. The value in this profile option indicates the number of days between the receipt date and the

Payment on Receipt automatic invoice creation date. For exam

ple, a value of 2 m

eans that Payment on Receipt creates

invoices only for receipts that are 2 or more days old. Any corrections or returns you m

ake against a receipt during that

2-day period are included on the Payment on Receipt invoice.

PO: ERS Invoice Number Prefix. “E

RS-” is the prefix that appears before all invoices that you createautomatically

using Pay on Receipt (although it is called Pay on Receipt, the Pay on Receipt functionality automates the creation of

invoices). This profile option allows you to change this prefix. For exam

ple, shortening this prefix allows extra spaces

for longer packing slip or receipt numbers.

AP: Use Invoice Batch Controls. Enable this option to enable use of the Invoice Batches window, which you can use

to specify batch defaults that help speed and control invoice entry in the Invoice Workbench. Enabling this option also

allows you to specify an invoice batch nam

e to a group of invoice records when you submit Payables Open Interface

Import. When this option is enabled, you cannot enter invoices directly in the Invoices window.

AP: Notification Recipient e-M

ail. Specify the full e–mail address of the person who will receive notifications from



5.89



89of 139

Oracle Payables

Defining Interest Rates

•Enable the Allow Interest Invoices Payables option

In the Paym

ent 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 tim

e



5.90



90of 139

Oracle Payables

Defining Aging Periods

Aging Report provides inform

ation about invoice paym

ents 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



5.91



91of 139

Oracle Payables

Key Indicators Report

Use Key Indicators Report to review Payables transaction activity, and review the current number of

suppliers, invoices, paym

ents and matching holds in your Payables system:

Prerequisites

•Define key indicator calendars



5.92



92of 139

Oracle Payables

Expense Reports and

Credit Cards



5.93



93of 139

Oracle Payables

Expense Reporting Process

Employee creates

expense report

Manager approves

report

Accounts

Payables

department

approves report

Approved:

Creates paym

ent; notifies

employee

Rejected:Workflow

notifies employee

Adjusted:

Creates paym

ent; notifies

employee

Internet

Expenses

Payables

Expense Reporting Process

You create and submit an expense report using Oracle Payables orOracle Internet Expenses. The basic expense

reporting process is as follows:

1. The Employee submits an expense report.

2. The Expenses Workflow notifies the approving authority for online review.

3. If the report is rejected, the Rejection process notifies the em

ployee by email. You can access and update

the rejected expense report from Payables, if you submitted the expense report from Payables, or from Internet

Expenses if you submitted the expense report from Internet Expenses.

4. For Payables approvals, the Payables Approval process determines

whether a report requires audit. It

automatically approves if audit is not needed. The audit rules determine whether audit is required. If required

receipts are m

issing or there are questions about policy compliance, auditors can request more inform

ation,

shortpay, reject or adjust the expense report. For all cases, notifications are sent to the preparer.

5. After m

anager and/or accounts payable departm

ent approval, the Expense Report Export program converts

the expense report into an invoice. In Oracle Payables, the system

either creates the payment or it prints the

Invoice Export Exceptions Report for expense reports that cannotbe im

ported and have to be resubmitted.

6. The em

ployee is notified and receives payment by check or direct deposit, depending on the company policy



5.94



94of 139

Oracle Payables

Expense Report Templates

•You use the Expense Report Template window to define templates based on

the expense report form

s 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 (prepaym

ents) that have the same currency as

the expense report.

Expense Report Tem

plates

During Expense Report Export, Payables uses the expense item inform

ation to create invoice distributions.

You define expense report tem

plates for types of expense reportsyou use in your enterprise. For exam

ple, a company

might define a Salesperson tem

plate that salespeople use to enter expense reports. That tem

plate would include expense

item

s that are reimbursable, such as meals, airfare, and hotel. However, it would not include a mileage expense item

because salespeople have car allowances.

Use the Expense Report Payables Options to define the default inform

ation for expense reports, including the default

expense report tem

plate used in the Expense Reports window.



5.95



95of 139

Oracle Payables



5.96



96of 139

Oracle Payables

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 paym

ent

Rejected:Workflow

notifies employee

Adjusted:

Create invoices;

ready for validation and

paym

ent

Procurement Card Process

The flow pictured in the slide above illustrates the procurementcard process:

1.Use a SQL*Loader script to load the procurement card transactions into the AP_Expense_Feed_Lines_All

2.Validate the transactions by submitting the Procurement Card Transaction Validation program. This program creates

default accounting distributions for procurement card transactions. It also validates imported transactions and identifies

exceptions. Exceptions include: Transaction loaded for an employee who is not defined in Oracle Payables; Transaction

loaded for a card number that is not defined in Oracle Payables;Duplicate reference numbers of transactions posted by

your card issuer (the reference number is the unique number assigned to each transaction by the card issuer).

3.Verify the transactions with the em

ployee by submitting the Procurement Card Transaction Verification program. This

program initiates the Employee Verification W

orkflow program andruns based on the level of notification you define at

the card profile level. If verification is required at the profile level, the em

ployee is able to verify transactions directly

from the workflow notification (for all or none). Alternatively, the em

ployee can use Oracle Web Employees to verify

transactions individually. With Oracle Web Employees, you can also verify transactions using different statuses, update

the default cost center, account for a transaction, and split a transaction. If verification is not required at the profile level,

the em

ployee receives a notification that requires no action (unless notification level is set to None).

4.Send the transactions for managem

ent approval by submitting the Procurement Card Transactions Approval Process. This

program initiates the Manager Approval W

orkflow program and runsbased on the level of notification you define at the



5.97



97of 139

Oracle Payables

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.

Setting Up Procurement Cards and Credit Cards

Use the Card Programs window and the Credit Cards window to set up your credit cards, which are used for em

ployee

expense reports, and your procurement cards, which are used by qualified employees to purchase item

s directly from

suppliers. If you are using Internet Expenses, there are additional setup steps. See: Establishing Corporate Credit Cards,

Oracle Internet Expenses Implementation and Administration Guide.



5.98



98of 139

Oracle Payables

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

•You use the Code Sets window to define sets of credit card codesfor your procurement

cards.

Setup Steps



5.99



99of 139

Oracle Payables

•You use the GL Account Sets window to create a list of values ofGL accounts

that your employees can use to correct account inform

ation for their

procurement card transactions.

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



5.100



100of 139

Oracle Payables

Transaction Taxes

in Payables



5.101



101of 139

Oracle Payables

Overview of Transaction Taxes in Payables

•Payables leverages E-Business tax to setup, calculate, and manage

transaction taxessuch as:

–Sales

–VAT

–Excise

–Customs Duty

–Environmental

–Offset

–Recoverable Tax

Overview of Transaction Taxes in Payables

Payables leverages E-Business Tax to set up, calculate, and m

anage transaction taxes, such as Sales, VAT, and Offset

taxes.

Withholding taxes and 1099 taxes are set up, calculated, and m

anaged by Payables. For more inform

ation on these

taxes see the Withholding Tax or the 1099 m

odules.



5.102



102of 139

Oracle Payables

Overview of Tax Calculation on Invoices

Enter

Invoice

E-Business Tax

Validate

Invoice

Click

Calculate Tax

Change Tax

Driver

View Tax Lines

and Distributions

Calculates

Tax

Calculates

Tax

Recalculate Taxes

Overview of Tax Calculation on Invoices

To calculate tax for an invoice:

1. Enter the invoice. If your set up permits, you can m

anually enter tax lines on the invoice.

2. To calculate taxes on the invoice before validation, click the Calculate Tax button on the Invoices window. E-Business

tax uses the tax drivers on the invoice (such as the supplier, place of supply, type of invoice and transaction), along with the

tax setup in E-Business tax to determine which taxes are applicable and to calculate and distribute the tax lines appropriately.

3. View the calculated tax lines and distributions in the Tax Lines

Summary and Tax Lines Details windows. The tax line

summary and detail inform

ation is provided to Payables by E-Business Tax.

4. If you change a tax driver on the invoice, you can click Calculate Tax at anytime to recalculate the tax lines and view the

impact of the change on the invoice.

5. When you validate an invoice, E-Business Tax automatically recalculates the tax lines, creates the distributions, allocates

tax amounts, and places any tax-related holds on the invoice. If you adjust the invoice after validation, when you revalidate

the invoice, E-Business Tax will recalculate the tax as necessary.

In general, E-Business Tax automatically calculates all applicable tax amountsfor invoices except in the following instances:

If you import invoices into Payables from another source, then the tax can be im

ported with the invoice.



5.103



103of 139

Oracle Payables

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 Prepaym

ent lines,

complete the following fields:

–Tax regime

–Tax

–Tax status

–Tax rate

–Tax amount

–Place of supply (supplier site)

Entering M

anual Tax Lines

(N) Invoices > Entry > Invoices

When you enter a manual tax line, enter an amount in the Tax Control Amount field in the invoice header. E-Business Tax

uses the Tax Control Amount to prorate automatically calculated tax amounts. For exam

ple, if you enter a Tax Control

Amount of $10 and E-Business Tax calculates a total tax amount of $12, then E-Business Tax will prorate the calculated tax

amounts so the total tax amount matches the Tax Control Amount you entered.



5.104



104of 139

Oracle Payables

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 cannot enter or change detail tax lines while you have unsaved changes to summary tax lines. E-Business Tax perform

s

a limited evaluation of tax rules on certain updates to a tax line.



5.105



105of 139

Oracle Payables

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

Self-Assessed Taxes

Self assessed tax amounts are taxes that you are liable for, butthat do not appear on the invoice. Self-assessed taxes are also

known as reverse charge or use taxes in certain tax regim

es.

You can view self-assessed tax amounts in the Self Assessed Tax Amount field in the Invoice Header. This field is for

reference only; it has no impact on the am

ount due to the supplier.

To use Self Assessed Taxes, enable the Set for Self Assessm

ent/Reverse Chargeoption when you define the tax registration

inform

ation in the Party Tax Profile for any First Party Legal Entity, First Party Legal Establishment, or Third Party. If you

enable self-assessed taxes for Third Parties, then the taxes will only be assessed for the supplier at the level specified

(Regim

e; Regim

e, Tax; Regim

e, Tax, Tax Jurisdiction) and not forother suppliers in that tax regim

e, tax, or jurisdiction.

The following exam

ple illustrates how E-Business Tax applies self-assessed taxes to invoices.

Assume you enter an invoice from a supplier for $1000.00. The supplier did not charge tax on the invoice; however, assume

that according to tax rules, as the purchaser you are liable to pay a 5% tax on the item

to your tax authority.

When you click Calculate Tax or validate the invoice, E-Business Tax uses the tax drivers on the invoice, such as Ship To,

Product Type, Primary Intended User, Business Category and Product Fiscal Classification to calculate taxes and determines

if any self-assessed tax should be applied.

In this case, provided the tax setup allows, a Self-Assessed Tax Amount of $50.00 is applied to the invoice. The Self



5.106



106of 139

Oracle Payables

Set Tax Registration

Details:

Check to mark

associated tax on all

supplier invoices as

Self Assessed.

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



5.107



107of 139

Oracle Payables

Supplier’s Tax is $0

and the amount due

to the Supplier is

$1,000.00

Self Assessed Tax Amount

Process –Calculate Tax



5.108



108of 139

Oracle Payables

Considerations for Taxes on Prepaym

ents

•To calculate taxes on Prepaym

ent Invoices, enable the following option for the

Prepaym

ent 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

Considerations for Taxes on Prepayments

To apply taxes to Prepayments, enable the Allow Tax Applicability option for the Prepayment Event Class in E-Business

Tax. Taxes can be set up for Prepayments in general, or for specific types of prepayments such as contract financing,

advances and automatic and m

anual prepayment applications.

You can define tax rules to set up specific tax rates for different types of prepayments. For exam

ple, to tax Contract

Financing prepayments but not Advances, you can create a tax rule which will look specifically for line classes of P2P

Advance or P2P Contract Financing to assign a specific tax rate.Tax rules also affect how taxes are applied to a prepayment.

In particular, the taxes are affected by how you set the Applied

Amount Handling option for the tax. You can set this option

to either Recalculated or Prorate.

Recalculated Examples

If the Applied Amount Handling option is set to Recalculated, then when a Prepayment is applied to a Standard Invoice the

tax is recalculated and, if there is a difference in tax rates no liability rem

ains.

Assume that you enter a Prepayment for $240.00, with a 20% Tax Rate.

After the prepayment is paid, the tax rate changes from 20% to 25%.

Next, assume you enter a Standard Invoice for $250.00, the 25% tax rate is automatically applied to the invoice.



5.109



109of 139

Oracle Payables

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 Tolerances and Tax-Related Holds

Use the Invoices Payables Options to define the tax tolerances for the entry of tax override values on Payables event class

transactions belonging to a configuration owner. Tax tolerances are used to determine whether E-Business Tax places a tax

hold on an invoice due to the override of calculated tax lines.

A tax tolerance is the acceptable variance between the calculated tax amount on an invoice and the override tax amount

entered by the user. If the variance between these two amounts exceeds the tolerances you specify, then E-Business Tax

places the invoice on hold.

To define tax tolerances, you m

ust first set the Allow Override for Calculated Tax Lines option. Setting the Allow Override

for Calculated Tax Lines option lets you override automatically calculated tax lines on transactions. You use tax tolerances to

define the limits of user override.

If an invoice exceeds these tolerances, E-Business Tax will apply a hold to it during Invoice Validation.



5.110



110of 139

Oracle Payables

Offset Taxes

•Existing Oracle Payables im

plementations 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 im

plementations, use E-Business Tax’s Self Assessed tax

feature instead.

OffsetTaxes

When you enter an invoice, if a tax has an associated offset taxand if you enable the Use Offset Taxes check box for

the supplier site, Payables creates a default offsetting tax distribution for each tax distribution on an invoice. You can

use offset taxes to record the value added tax (VAT) nam

e and amount without paying VAT to the supplier (the tax

distribution and the offset tax distribution net to zero). For exam

ple, in the Tax Codes window, you can define an offset

tax code nam

ed Offset 10 that has a negative 10% rate. You can then define a user–defined tax called VAT 10 that has

a 10% rate. You can assign the Offset 10 tax to the VAT 10 tax. You can always override the default offset tax

distribution on an invoice or manually enter additional offsetting tax distributions.

If you delete the Invoice Tax Code for a supplier, the system

deletes the offset tax code from the supplier and supplier

site and does not automatically assign any default tax to any new

supplier sites you enter. If you use the Multiple

Organization Support feature, you can enable this option only atthe supplier site level.



5.111



111of 139

Oracle Payables

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 W

ithholding Tax option

•If you enter a purchase order for a 1099 supplier, then Oracle Purchasing

retains the Income Tax Type inform

ation at the purchase order line level.

Suppliers Subject to Income Tax Reporting

For more inform

ation on 1099 reporting, see the 1099 Reporting m

odule.



5.112



112of 139

Oracle Payables

Financials Options

Financials Options

(N) Setup > Options > Financials Options > (T) Tax

Member State

The location of your company or organization. Payables uses thiscountry nam

e to determine if your company or

organization is located in a m

ember state of the European Union (EU).

VAT Registration Number

The value added tax (VAT) registration number for your organization. Your organization is assigned a VAT

Registration Number if you register to pay VAT. The first two characters of a VAT registration number are the country

code for the country or state where the registered company or organization is located. Payables prints this number on

the header of the Intra–EU VAT Audit Trail Report.



5.113



113of 139

Oracle Payables

Payables Options: Paym

ent

Payables subtracts the tax

amount from the invoice amount

when it calculates the

discountable amount for a

scheduled paym

ent

create paym

ents with a paym

ent

date before the system date


charges from payment

Payables Options: Payment

(N) Setup > Options > Payables Options >(T) Payment

Exclude Tax From Discount Calculation. If you enable this option, when you enter an invoice, Payables subtracts the

tax amount from the invoice am

ount when it calculates the discountable amount for a scheduled payment.

If you enable this option, you cannot select Prorate Tax for your Discount Distribution M

ethod Payables option. Note

that even if you enable this option, taxes with corresponding offset taxes, such as VAT taxes, will be excluded from

discount calculation to the extent not offset.

If you do not enable this option, Payables uses the gross amount(including the tax amount) of an invoice as the invoice

amount applicable to discount. W

hen you enter an invoice you can

always override the default invoice am

ount

applicable to discount.

However, we recommend that you do not modify that amount to reduce it by the tax amount if your Exclude Tax From

Discount Calculation Payables option is enabled.



5.114



114of 139

Oracle Payables

Withholding Tax



5.115



115of 139

Oracle Payables

Withholding Tax Overview

•You may be required to withhold taxes from your employee expensereports

and supplier invoices.

•Once you set up Payables to automatically withhold tax, you can withhold tax

either during Invoice Validation or during paym

ent processing.

•You can control all withholding tax options in the W

ithholding Tax region of the

Payables Options window.

Withholding Tax Overview

To perform

automatic withholding, assign a withholding tax groupto an invoice or invoice line. Accept the default

withholding tax group from the supplier site or select another from a list of values. To withhold tax, Payables creates

one or more W

ithholding Tax type invoice distributions. These distribution amounts are not included in the

Distribution Total field. For each invoice, Payables automatically updates the Withheld Amount field, and updates

scheduled payments to reflect the withholding. For exam

ple, for a Standard type invoice with an amount of 100 and a

withholding tax amount of 20, Payables creates Withholding Tax type invoice distributions that total –20. The

Distribution Total remains 100, and Payables updates the Withheld Amount field to 20. Payables also updates the

scheduled payments.

Review withheld amounts online or submit standard reports. For foreign currency invoices, the withheld amount is

calculated based on the functional currency amount of the invoice, and is then converted back into the foreign currency.

Therefore, due to rounding, it m

ay be different from the foreigncurrency invoice am

ount multiplied by the withholding

tax rate.

Payables creates an invoice number for the tax authority’s invoice by concatenating the following: ”W

ithholding Tax–”

(the system

’s internal identifier number of the invoice) –(first W

ithholding Tax distribution included on that invoice),

The description of that invoice will be: ”Withholding Tax”–(supplier nam

e) –(invoice number) / (first W

ithholding

Tax distribution included on that invoice). For exam

ple, ABC Company’s invoice number 22–MAY–2007 has an



5.116



116of 139

Oracle Payables

Withholding Tax Payables Options

Use W

ithholding Tax

•Select the Use W

ithholding Tax option to enable Automatic W

ithholding 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 C

alendar

Withholding Tax Payables Options Use W

ithholding Tax

In addition to the Use W

ithholding Tax option, you can specify the following withholding tax options.

Allow M

anual Withholding

Enable this option to allow m

anual creation and adjustments of Withholding Tax type distributions for your invoices.

Tax G

roup

The nam

e of the withholding tax group that you would like to use

as the default withholding tax group for the new

suppliers you enter.

Apply W

ithholding Tax

Select the time at which you would like Payables to apply withholding taxes to your supplier’s invoices:

Never

At Invoice Validation Tim

e

At Payment Tim

e

Note: If Payables withholds tax at Invoice Validation, it calculates withholding only once. If you adjust an invoice after

you submit Invoice Validation, then you need to m

anually adjust the withholding tax.



5.117



117of 139

Oracle Payables

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 W

ithholding Tax type tax codes. You can assign the sametax 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.

Defining Tax Codes for Withholding Taxes

Period Lim

it

After you pay a certain amount for withholding tax in a period, Payables stops withholding taxes. For exam

ple, for each

special calendar period, Payables will withhold no m

ore than $10,000.

Flat Rate

The withholding tax has no amount or period lim

its.

Amount Ranges

The tax rate depends on how m

uch you have already paid during a tim

e period. Base the paid amount on the gross

amount of total paid invoice am

ounts, or on the total am

ount of tax withheld. The time period can be either per

withholding tax calendar period or per invoice. For exam

ple, define a tax that for each year will withhold at a rate of

10% until you pay $100,000 in invoices, and then it withholds ata rate of 15% after you pay $100,000.

In addition to these controls, the same withholding tax code canhave different rates depending on the effective date.

For exam

ple, a withholding tax has a rate of 10% one year and 11% the following year.



5.118



118of 139

Oracle Payables



5.119



119of 139

Oracle Payables

Withholding Tax Payables Options

Select this option

to enable

Automatic

Withholding Tax



5.120



120of 139

Oracle Payables

Withholding Tax Certificates and Exceptions

•You use the W

ithholding 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 W

ithholding 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 supplieror supplier site.

Withholding Taxes for Suppliers

Withholding Tax Certificates and Exceptions

You can define a certificate to specify a rate exception for a Withholding Tax type tax code for all invoices of a

supplier site.

You can also define a rate exception for a Withholding Tax type tax code for a single invoice.



5.121



121of 139

Oracle Payables

Withholding Tax Reports

•Payables provides the following income tax form

s 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



5.122



122of 139

Oracle Payables


•You use the W

ithholding 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 withholdingsmade for a

supplier, summarized either by tax type and tax rate or by supplier site.


Payables lists only withholding tax certificates that have been used to calculate tax amounts withheld for invoices. Use

the inform

ation in this report to satisfy m

anagem

ent, supplier and tax authority reporting requirem

ents.



5.123



123of 139

Oracle Payables


•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.


Creating the Withholding Tax report is a two step process. In the first step, you submit the report from the Submit

Request window. This step extracts your withholding tax inform

ation and stores the inform

ation in the

AP_WITHHOLDIN

G_TAX_ITF interface table. You can then publish thereport either by choosing Publish RX

Reports from the Submit Request window or by using a third party

reporting program.

Note: This is an RXi report, which m

eans that you can customize the report form

at, content, and output file type.



5.124



124of 139

Oracle Payables

1099 Reporting



5.125



125of 139

Oracle Payables

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.

Entering Invoices for Suppliers Subject to Income Tax Reporting Requirem

ents

You can override the default Income Tax Type for an invoice linein the Lines tab of the Invoices window. You can

also use the Update Income Tax Details utility to m

ake income tax type updates at any tim

e before running your

reports.

In the United States, you m

ust report to the Internal Revenue Service certain types of payments you m

ake to 1099

reportable suppliers. W

ithin Payables, you can designate suppliers as federally reportable, classify their invoice

distributions by 1099 M

ISC Type, then at the end of the year when you submit your 1099 reports, Payables lists

payments of reportable distributions made to 1099 suppliers.

For exam

ple, you enter an invoice for a 1099 reportable supplier. The supplier’s hourly fees are reportable for U.S.

1099 reporting purposes, but reim

bursable expenses, such as travel, are not. In the Lines tab for the fee distribution you

assign an Income Tax Type; however for the travel distribution, you clear the Income Tax Type field.



5.126



126of 139

Oracle Payables

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 W

ithholding Tax option

•If you enter a purchase order for a 1099 supplier, then Oracle Purchasing

retains the Income Tax Type inform

ation at the purchase order line level.

Suppliers Subject to Income Tax Reporting Requirem

ents

(N) Suppliers > Entry > (L) Tax Details

The purchase order value always defaults to invoices m

atched to a purchase order, (even if the purchase order value is

null and the Supplier has a value).

For unmatched invoices, if you do not use a Distribution Set to create invoice distributions, Payables uses the supplier’s

income tax type as the default value. If you use a DistributionsSet to create invoice distributions, Payables uses the

default income tax type from the Distributions Set as the default value.

Also, to set up a federally reportable supplier, select a site to be the income tax reporting site by enabling the Reporting

Site option in the Tax Reporting region of the Supplier Sites window.

If you participate in the United States Internal Revenue Service(IRS) Combined Filing Program, you can also define a

supplier as state reportable by enabling the State option in theTax Reporting region of the Suppliers window. Payables

uses the state reportable status of a supplier for reporting purposes only. You can create custom reports to satisfy a tax

authority’s reporting requirem

ents.

If the tax reporting nam

e is different from the supplier nam

e, enter it in the Reporting Nam

e field in the Tax Reporting

Region. Payables uses the Reporting Nam

e to produce documents for the IRS. If you report electronically, select an

Organization Type in the Tax Reporting region.



5.127



127of 139

Oracle Payables

Updating 1099 Inform

ation

•You can update 1099 inform

ation 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

Apdating1099 Inform

ation

The following are suggestions for adjusting transactions for 1099 suppliers. If you need to add an amount to a 1099

supplier, for exam

ple if you paid the supplier through another system

, you can adjust an invoice paid during the year in

the Lines tab of the Invoice workbench. Add a line for the am

ount you want to add for 1099 purposes, including the

Income Tax Type. Also add an offsetting line with a null Income Tax Type.



5.128



128of 139

Oracle Payables

Recording a Refund From a One–Time 1099 Supplier

•If you get a refund from a one–tim

e 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.



5.129



129of 139

Oracle Payables

1099 Reporting

1096 Form

1099 Form

s

1099 Invoice Exceptions Report

1099 Paym

ents Report

1099 Electronic Media

1099 Supplier Exceptions Report

Tax Inform

ation Verification Letter



5.130



130of 139

Oracle Payables

Payables Options: Tax Reporting

Payables Options: Tax Reporting

(N) Setup > Options > Payables > (T) Tax Reporting

Combined Filing Program. Enable this option if you are using 1099 Combined Filing Program

reporting. When you

submit the 1099 Electronic M

edia report, Payables will produce K-records for all tax regions participating in the

Combined Filing Program that have qualifying payments.

Note: If you use electronic filing or magnetic m

edia to file your tax inform

ation with the Internal Revenue Service and

you are not participating in the Combined Filing Program, do notenable this option. The Internal Revenue Service may

return your 1099 m

agnetic tape if the tape contains K records.

Use Pay Site Tax Region. You can enable this option only if you enable the Combined Filing Program Payables

option. Enable this option if you want to use a 1099 supplier's tax region as the default tax region. If you enable this

option, Payables uses the 1099 supplier site's region as the default tax region for the invoice distributions. You can

override this default region for each invoice distribution in Distributions window.

Do not enable this option if you do not want to use a supplier site's tax region as the default tax region. You m

ust then

enter the default tax region you want to use for all invoices inthe next field, the Income Tax Region Nam

e field.

The default you choose here determines how m

any K records Payables will produce on your 1099 Electronic M

edia.

Payables produces one K record for each tax region. If you are participating in the Combined Filing Program, Payables



5.131



131of 139

Oracle Payables

Advances and Progressive

Contract Financing



5.132



132of 139

Oracle Payables

Advances and Contract Financing

Purchase Order/

Contract

for Services:

$1,000,000

Supplier

requests

prepaym

ent:

$50,000

Additional

approvals ?

Payables: Prepaym

ent

Invoice Entered

iSupplierPortal: Invoice Request is approved;

Prepaym

ent Invoice created

Invoice is validated;

Paym

ent Issued

Advances and Contract Financing

Suppliers can request an advance or a contract financing prepayment, using iSupplier

Portal. Invoice requests submitted

through iSupplier

Portal m

ust go through an approval process before the Invoice Request becomes a Prepayment Invoice.

An Accounts Payables clerk can also m

anage the prepayment request by entering a Prepayment Invoice in Payables.

The system

ensures that the Prepayment invoice is m

atched to theContract Advance, which prevents over billing beyond the

negotiated value. The purchase order is then updated with the am

ount billed.

The invoice can either be paid immediately or you m

ay wish to require that the invoice go through another set of approvals

prior to issuing payment. Note that all prepayments m

ust be paid in full before any amounts can be liquidated on subsequent

delivery invoices.



5.133



133of 139

Oracle Payables

Progress Paym

ents

Billed

Retained

Advance/

Recoupment

Approved

Advance

Resurface Lot

Road W

ork

Landscape

Final P

ainting

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

Progress Payments

Once work on the contract begins, the Supplier submits work confirm

ations for the work that has been completed on the

contract. W

ork confirm

ations are submitted using iSupplier

Portal and, like other invoices submitted through iSupplier

Portal, the work confirm

ation is considered an Invoice Request until it is approved and converted into a Standard Invoice in

Payables. The resulting invoice is created using a combination of the work confirm

ation and purchase order inform

ation and

is referred to as the Progress Payment.

For projects that use advances and progressive contract financing, the purchase order is set to Pay on Receipt (Self Billing).

Once work is confirm

ed or goods are received, then the invoice can be paid. For exam

ple, assume on a $1,000,000 project,

that a Supplier submits a work confirm

ation for resurfacing a parking lot for $200,000. The invoice breakdown is as follows:

Item

s = $200,000

Retainage= <$20,000>

Recoupment= <$50,000>

Total = $130,000

Retainageis set on the contract. Retainageis a portion of the invoice that is retained and held as a liability (from an

accounting perspective) until it is released at the end of the project or when agreed events have occurred. In this exam

ple the

retainagerate is 10% of the invoice total. The invoice am

ount is reducedby the retained amount.



5.134



134of 139

Oracle Payables

Entering Advances and Contract Financing Invoices

•Anadvanceprepaym

ent invoice is not matched for an advance, since an advance

is paid once before any work commences and is not based on perform

ance.

•A contract financingprepaym

ent invoice is matched to pay items (shipments).

Entering Advances and Contract Financing Invoices

An advance prepayment invoice is m

atched to a purchase order number, line numbers, and distributions. Pay items are not

matched for an advance, since an advance is paid once before anywork commences and is not based on perform

ance.

A contract financingprepayment invoice is m

atched to a purchase order number, line numbers, pay items (shipments), and

distributions.

Note: Oracle Payables ensures that the am

ounts financed and later recovered never exceed the allowable amounts designated

by the specific terms captured in the purchase order.

The inform

ation in the Payment Type field of the Match to Purchase Orders window indicates whether the service

procurement purchase order row is an advance or contract financing. The Shipment Item

Description field provides a

description of the item

ordered on the purchase order for which the Advance was provided. The Shipment Item

Description

field provides a description of the pay item on the purchase order for contract financing.



5.135



135of 139

Oracle Payables

Work Confirmation

•A work confirm

ationconfirm

s that work was delivered by a certain supplier at

a specific price on a specific date as specified by a specific work confirm

ation

number, which is associated with a purchase order number.

Work Confirm

ation

For contract financingprepayments, you can use 2-w

ay or 3-w

ay m

atching. Three-way m

atching verifies that the purchase

order, the invoice, and receiving inform

ation m

atch within accepted tolerance levels. The work confirm

ation receipt is the

only type of receipt allowed for complex service contracts.

If the am

ount of work completed is equal to the am

ount billed onthe invoice, then the invoice is eligible for payment. If the

amount of work completed is less than the am

ount of work billed on the invoice, then the invoice is placed on a m

atching

hold.

Advance prepayments can only be 2-w

ay m

atched, that is, verifying that the purchase order and the invoice match within

accepted tolerance levels, since there is no work or deliverableassociated with an advance.



5.136



136of 139

Oracle Payables

Taxes for Complex Service Contract Invoices

Invoice Amount, Net of

Retainage

Progress Paym

ent

Standard

Invoice Amount

Final D

elivery

Retained Amount, based

on Tax Drivers on Original

Invoice

Release Retained

Amounts

RetainageRelease

Invoice Amount, based on

Tax Rules for Contract

Financing

Contract Financing

(Progress Paym

ent)

Invoice Amount, based on

Tax Rules for Advances

Advance

Prepaym

ents

Tax Calculation Based On

Invoice Purpose

Invoice Type

Taxes for Complex Service Contract Invoices

Payables integrates with E-Business Tax to provide tax services for your invoices. The table in the slide above indicates what

amount and tax set up is used to calculate tax for your complex service contract-related invoices.

Prepayment Invoices

If you enter a prepayment invoice for an advance or contract financing, then the taxes on those invoices are calculated based

on the prepayment invoice am

ount, using the tax rules defined for Advances or Contract Financing respectively. Tax rules

are defined in E-Business Tax. Note that if you recoup your prepayment, then the tax is reversed on the prepayment

recoupmenteither by recalculating the prepaid tax based on today's rates or by prorating the prepaid tax based on the

recoupmentam

ount.

Standard Invoices

If you enter a standard invoice for progress payment, then the taxes are calculated based on the invoice am

ount, net of

retainage.

If you enter a standard invoice which is for a final delivery, then tax is calculated base on the invoice am

ount.

If your invoice contains retainage, then tax is calculated on the invoice am

ount net of retainage. For exam

ple if the progress

payment invoice is $100.00 and the retainageis 15%, the invoice am

ount will be $85.00 plus tax at 10% of ($8.50). The total

invoice due the supplier of $93.50.



5.137



137of 139

Oracle Payables

RetainageAmount for Complex Service Contracts

•Retainageis the act of withholding a portion of a paym

ent until a substantial

portion or all of the work is completed.

RetainageAmount for Complex Service Contracts

The retained amount on progress payment invoices is based on thecontractual terms defined in the service procurement

contract or purchase order line. The percentage withheld is negotiated, defined in the contract, and is based on the risk factors

involved. These risk factors include the perform

ance and reliability of the supplier.

A contract line can be associated with one or more progress payments. After perform

ing a portion of the contractual work,

the supplier sends a progress payment invoice to the buying organization, requesting payment against the service

procurement contract line or purchase order. The progress payment invoices submitted by a supplier are recorded as Standard

Invoices in Payables. Oracle Payables withholds a portion of theinvoice during m

atching to these payment lines (2-w

ay

matching) or to the receipts of these payment lines (3-w

ay m

atching). The retained amount is represented as negative

distribution amounts of type Retainageto the matched invoice line.

Note: You cannot override calculated retained amounts and you cannot enter retained amount manually.

Oracle Payables supports progress invoices with the following invoice am

ounts:

Netof Retainage. If the Net of Retainagecheck box is enabled, during validation, the invoice am

ount netof retainage

($85.00) is compared to the invoice am

ount entered in the invoice header region to determine if the invoice should be

placed on a line variance hold.

Gross

of Retainage. If the Net of Retainagecheck box is disabled, the invoice validation process compares the gross



5.138



138of 139

Oracle Payables

Recouping Advances and Contract Financing

Paym

ents

•Recoupmentis the automatic process of recovering prepaid amounts when

invoicing for progress or for the final delivery of goods or services, based on

specific term

s specified in the services procurement contract.

Recouping Advances and Contract Financing Payments

When the supplier or contractor submits invoices for the project, any prepayments are recouped from the previous advances

or contract financing. Recoupmentrules present in the service procurement contract enable Payables to automatically draw

against the prepayments and reduce the am

ount due on the delivery invoice.

Automatic recoupmentoccurs as part of the matching process at the following event points in Oracle Payables:

header-level m

atching,

line-level m

atching,

open interface im

port.

Advances and contract financing prepayments are automatically deducted from the standard invoice delivery payments for

the contract line. The advanced or financed prepayment item

s arematched to a specific contract line in a service procurement

purchase order. They are applied to, or recouped from, the same contract line with the delivery of the item

, up to the unpaid

invoice am

ount.

Recoupmentam

ounts are automatically calculated for every standard invoiceitem

line that is matched to a service

procurement purchase order delivery pay item or shipment. It is based on the total available amount of financed pay items or

shipments for that sam

e contract line. Recoupmenttreats advances and contract financing prepayments differently.



5.139



139of 139

Oracle Payables

Thank You

Microsoft Power Point - Accounts Payables

Documents

Transcript of Microsoft Power Point - Accounts Payables