Oracle Fusion Applications Accounts Payables

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Transcript of Oracle Fusion Applications Accounts Payables

Page 1: Oracle Fusion Applications Accounts Payables

Copyright © 2011, Oracle and/or its affiliates. All rights reserved. Oracle Proprietary and Confidential1

Oracle Online Training Materials – Usage Agreement

Use of the information, documents and online training courses (collectively, “Materials”) found on this area of the Site constitutes agreement with the following terms and conditions (as well as those set forth in the Purpose and Disclaimer sections below):

1. Oracle is pleased to allow its business partner (“Partner”) to download and copy the Materials found on this area of the Site. The Materials are proprietary information of Oracle. Partner or other third party at no time has any right to resell, redistribute or create derivative works from the Materials. The use of the Materials is restricted to the non-commercial, internal training of the Partner’s employees only. The Materials may not be used for training, promotion, or sales to customers or other partners or third parties.

2. Oracle is a registered trademark of Oracle Corporation and/or its affiliates. Other names may be trademarks of their respective owners.

3. Oracle disclaims any warranties or representations as to the accuracy or completeness of any Materials.  Materials are provided "as is" without warranty of any kind, either express, implied or statutory, including without limitation the implied warranties of merchantability, satisfactory quality, fitness for a particular purpose, accuracy, timeliness and non-infringement of third-party rights. The information contained herein is subject to change without notice.

4. Under no circumstances shall Oracle be liable for any loss, damage, liability or expense incurred or suffered which is claimed to have resulted from use of these Materials. As a condition of use of the Materials, Partner agrees to indemnify Oracle from and against any and all actions, claims, losses, damages, liabilities and expenses (including reasonable attorneys' fees) arising out of Partner’s use of the Materials.

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Purpose:This document provides an overview of features and enhancements included in Oracle Fusion Applications 11gR1 Release 11.1.1.5.0

and applicable updates. It is intended solely to help you assess the business benefits of upgrading your existing Oracle Products to this release, or implementing completely new Oracle developed products, and planning your I.T. Projects.

Disclaimer:This document in any form, software or printed matter, contains proprietary information that is the exclusive property of Oracle. Your

access to and use of this confidential material is subject to the terms and conditions of your Oracle Software License and Service Agreement or other applicable contract with Oracle, with which you agree to comply. This document and information contained herein may not be disclosed, copied, reproduced or distributed to anyone outside Oracle without Oracle’s prior written consent. This document is not part of your license agreement nor can it be incorporated into any contractual agreement with Oracle or its subsidiaries or affiliates.

 This document is intended to outline our general product direction. It is intended for informational purposes only and solely to assist you

in planning for the implementation and upgrade of the product features described. Release information contained in this document is not a firm development plan. Release information published here should not be used as the basis for customer delivery commitments, as part of marketing efforts, or during contract negotiations. This is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality, and inclusion or not thereof in the commercially available version of the Software, if any, is subject to change at any time and is always at Oracle’s sole discretion. This document is not considered part of the applicable program documentation.

 Due to the nature of the product architecture, it may not be possible to safely include all features described in this document without

risking significant destabilization of the code.

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Oracle Fusion PayablesImplementation and Configuration Considerations

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Agenda

• Procure-to-Pay Overview and Prerequisite Setups

• Key Implementation Considerations

• Function and Data Security

• Business Units and Shared Service Centers

• Invoicing

• Integrated Imaging Solution

• Multiple Invoice Entry Methods

• Match Options and Match Approval Levels

• Tolerances and Holds

• Invoice Approval

• Centralized Tax Engine

• Multiple Accounting Representations

• Payment Processing Options

• Payables to Ledger Reconciliation Report

• Additional Resources

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Procure-to-Pay Overview

Requisition Purchase

Goods/Services Receive

Goods/ServicesRecordInvoice

IssuePayments

• Identify requirement

• Authorize purchase request

• Negotiate/select vendor

• Request/receive/

evaluate quotation

• Create purchase order

• Receive shipment notice

• Receive goods

• Inspect goods

• Ensure goods match PO quantity

• Record invoice

• Match invoice to purchase order or receipt

• Approve invoice

• Schedule payment

• Pay supplier

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Oracle Fusion PayablesDetailed Business Processes and Activities

Manage Invoices

• Receive and Process Invoices• Submit Invoices• Approve Invoices• Audit Invoices• Record Accounting for Invoices

• Prepare and Record Payments• Record Accounting for Payments

Manage Payments Manage Accounts Payable Balances

• Analyze Accounts Payable Balances• Close Payables Period• Manage Accounts Payable Disputes

• Define Payables

Set Up Procurement

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Prerequisite SetupsPayables Prerequisites

• Required prerequisites enforced through Functional Setup Manager

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Prerequisite SetupsSetup Task Lists

Define Synchronization of Users and Roles from LDAP Define Implementation Users Define Enterprise Structures for Financials Define Ledgers Define Business Units Define Facilities for Financials Define Resource Organization Information Define Security for Financials Define Approval Management for Financials

Define Common Application Configuration for Financials

Define Supplier Configuration Define Payables Define Disbursements Configure Payment System Connectivity Define Payments Security Define Subledger Accounting Rules Define Cash Management and Banking Configuration

Define Transaction TaxesDefine Common

Financials Configurations

Define Invoicing and Payments Configuration

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Payables SetupFinancials Implementation Project

Payables setup available with Financials and Procurement offering

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Payables Function and Data Security

• Function security implemented using Job Role and data security using Data Roles

• Three predefined job roles to meet Payables job functions:

– Accounts Payable Specialist, Accounts Payable Supervisor, and Accounts Payable Manager

– Payables job roles are configured to maintain segregation of duties for managing suppliers, creating invoice, force approving invoice and creating payment

• Generate data roles for business units using seeded data role template• Predefined job roles and the assigned duties can be customized using Oracle Identity Manager (OIM) and Access Provisioning Manager (APM)

Refer to Oracle Fusion Financials Security Implementation and Configuration Considerations for more details.

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Payables Function and Data Security

Duty Role APSpecialist

APSupervisor

APManager

App. Implementation Consultant

Payables Administration Duty

Payables Invoice Creation Duty

Payables Invoice Inquiry Duty

Payables Invoice Processing Duty

Payables Invoice Hold Resolution Duty

Payables Invoice Management Duty

Payables Payment Creation Duty

Payables Payment Processing Duty

Payment File Management Duty

Disbursement Process Management Duty

Disbursement Data Management Duty

Subledger Accounting Duty

Mass Asset Additions Creation Duty

Payables Period Close Duty

Payables Balance Analysis Duty

Payables Withholding Tax Reporting Duty

Payables to Ledger Reconciliation Transaction Analysis Duty

Accounts Payable Period Status Management Duty

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Business Units and Shared Service Centers

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Business Units and Shared Service Centers

Business UnitUnit of an enterprise that performs one or many business functions that can be rolled up in a management hierarchy

• Can support one or many business functions• Can process transactions on behalf of many legal entities• Assigned to one primary ledger

– Ledger assignment is mandatory for BUs with business functions that produce financial transactions

Refer to Oracle Fusion Financial Enterprise Structures Implementation and Configuration Considerations training for more details.

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• Share services to reduce cost and enforce company policies and procedures consistently

• Shared Service Centers modeled using business units in two ways:

Service Provider Model – Define relationships between business units for a business function,

identifying one business unit in the relationship as a service provider and others as clients

Business Unit Data Security– Allow shared service center personnel to process transactions for

other business units(This is referred to as Multi Org Access Control in the Oracle E-Business Suite)

Business Units & Shared Service Centers Shared Service Centers

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Business Units & Shared Service Centers Business Functions in Procure-to-Pay Flow

• Requisitioning - Raises requisitions for products or services needed for day to day activities• Procurement - Processes requisitions, negotiate supplier terms and manage relationships• Payables Invoicing – Processes supplier invoices and financially responsible for purchasing transactions

BU 1

SourceRequest Buy Pay

BU 2

BU 3

Decentralized

BU 1

SourceRequest Buy Pay

Shared

Service

BU 2

Central Sourcing, Local Execution

BU 1

SourceRequest Buy Pay

SharedService

BU 2

Automatedfinancialreconciliation

Complete Shared Services

BU 1

SourceRequest Buy Pay

SharedService

BU 2

Automated financial

reconciliation

Separate Procurement and Invoicing Service Providers

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Business Units & Shared Service Centers Shared Service Centers: Best Practice

• Centralize Procurement function using service provider model

– Negotiate supplier terms for multiple client business units

– Sharing and usage of supplier sites and centrally authored catalog content

– Process requisitions from multiple Requisitioning BU

• Consolidate Payables operations from multiple business units into single shared service center using data security

– Centralize invoice receipt by having suppliers send invoice directly to AP department instead of Buyers to ensure timely processing

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Business Units & Shared Service Centers Procurement via Subsidiary – Implementation Consideration

Purchase Order’s Sold-to BU can be different from the Requisitioning BU to facilitate buying through subsidiaries• Set up subsidiaries in some countries to meet legal requirements even

though the primary operations are located elsewhere• Take advantage of favorable tax regime

Vision Services buying goods via subsidiary Vision Germany

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Integrated Imaging Solution

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Integrated Imaging Solution for Invoice Entry Third Party Solutions versus Oracle’s Imaging Solution

• Bolt on capabilities disjoint from core ERP application, operating in a peripheral fashion, using proprietary technologies

• Components from different vendors for scanning, data extraction, storage and workflow require dedicated IT staff to set up, integrate and maintain, resulting in higher cost of ownership

• Disparate platforms, certification and release cycles increase the risk of incompatibility and maintenance overhead

• Fully integrated “out-of-the-box” solution supporting the entire lifecycle of invoice processing from scanning, recognition, image routing to invoice entry and approval

• Integrated solution installed and maintained by a common provisioning framework, with minimal configuration and setup needed

• All components certified and supported by Oracle

Third Party Solutions Oracle’s Imaging Solution

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Integrated Imaging Solution for Invoice EntryProcess Flow

Field Office 1ODC

Image Repository IPM

Image RoutingBPEL

AP Specialist 1Invoice Entry

Exception HandlingOFR Verifier

Field Office 3ODC

Field Office 2ODC

AP Specialist 2Invoice Entry

Forms RecognitionOFR

Scanning

Shared Services

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Integrated Imaging Solution for Invoice Entry Oracle Document Capture (ODC)

• Digitize paper invoices to industry standard image formats with built-in deskew, despeckle and black border removal features

• Support for enterprise class scanners and leading high-volume document scanning interfaces: ISIS and Kofax Adrenaline/VirtualReScan

• Flexible implementation options for scanning invoices at multiple field offices

ApproveEnterRouteRecognizeCapture

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Integrated Imaging Solution for Invoice Entry ODC – Implementation Considerations and Recommendations

• Request suppliers to send invoices to one central location for scanning or decentralize ODC at each invoice receipt location

– Consider legal requirements which may require invoices to be processed and stored in the same country as receipt

• Install ODC on machine with at least dual CPU cores at 2 GHz and 4 GB RAM

• When evaluating hardware scanning throughput, plan for 60% efficiency of maximum throughput to account for image quality review

• Enable Adaptive Thresholding on scanners to remove background colors and gradients for pure black-and-white images

• Use TIFF image format with CCIT Group IV compression at 300 DPI for optimal balance between scan quality and image size

– JPEG format not recommended due to lossy compression

• We recommend less than 25 images per batch to avoid delay caused by recognition exceptions

• To optimize high volume scanning we recommend you implement ODC commit server to schedule the export of images to OFR import directory every 15-20 min

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Integrated Imaging Solution for Invoice Entry Oracle Forms Recognition (OFR)

• Intelligent data extraction without using supplier-specific templates

• Pre-configured to capture attributes regardless of location on the invoice

• Self-learning intelligence to improve scan accuracy over time

• Flexibility to define rules such as format masks for invoice and PO number• User-configurable validation of image data against Payables and Procurement system

ApproveEnterRouteRecognizeCapture

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• OFR RTS runs in the background as a server process. Multiple RTS instances can run on a server

• Each RTS instance can perform one of following :– Import, Export and Cleanup of image batches

– OCR, Classification and Extraction

• Designate 1 RTS instance for Import/Export/Cleanup for every 2-4 instance of RTS running data recognition

• Number of RTS instances running on a machine must not exceed the number of CPU cores available

• RTS instance dedicated to data recognition can process up to 250 invoices per hour

– Each additional instance can achieve near linear scalability depending on scan volume, document complexity and the number of attributes validated

Hardware Recommendations• A quad CPU core server with minimum 8 GB RAM so more OFR RTS instances can be

dedicated to the resource intensive recognition task– You can either use a single server with enough CPU cores or scale by setting up

multiple OFR RTS servers (slave server)

Integrated Imaging Solution for Invoice EntryOFR Runtime Service (RTS) – Implementation Considerations

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OFR Designer • A client tool for configuring implementation details (known as a “project”) and its

initialization (INI)– A pre-configured initialization (INI) file is installed as part of Fusion Applications to be

used for customizing your project– Modify the project and the .ini file on site to update the Fusion Applications database

connection information, OFR Import/Batch/Export folder locations and any additional data validation to be performed

OFR Verifier• Quality assurance application that detects image batches with invoices failing recognition

or validation. Payables specialist reviews and re-submits batches after correcting exceptions– Verifier instance should be co-located with the OFR Batch folder to minimize image

loading time• We recommend using remote desktops or Citrix accounts for OFR Designer and Verifier

since number of users using these will be limited and also to centralize installation and maintenance

Integrated Imaging Solution for Invoice EntryOFR Designer and Verifier – Implementation Considerations

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Integrated Imaging Solution for Invoice EntryImaging and Process Management (IPM)

• Common image repository where invoice images are stored and then routed to payables specialists

• Flexibility to attach configurable storage and security policies to content E.g. You can configure storage device, duration of storage, and users who can

access and view invoice images

• Embedded image viewer within Fusion Payables application allowing payables specialists to review and annotate images

ApproveEnterRouteRecognizeCapture

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• We recommend IPM image repository to be co-located with IPM Input Directory to minimize network traffic when transferring images

• Average size of a black-and-white invoice image saved in TIFF format with CCIT Group IV compression at 300 DPI is 40 KB per page

– We recommend scanners with Adaptive Thresholding technology to remove gray scaling, otherwise the image size can go up to 300 KB per page

– Use this sizing information along with estimated invoice volume to determine the amount of storage needed for IPM

Integrated Imaging Solution for Invoice EntryIPM – Implementation Considerations and Recommendations

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• Payables provides a default image routing rule based on invoice amount to specific seeded users that must be modified for your application users

• Configure image routing rules to achieve desired specialization within the Payables department using Worklist application

– Routing can be based on supplier, PO prefix, invoice number prefix to ensure invoice entry by right group of AP specialists

• Configure routing rules to assign invoice to a user group instead of individual specialists to achieve optimal load balancing and to avoid task re-assignment

Integrated Imaging Solution for Invoice EntryImage Routing – Implementation Considerations

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Manual Invoice Entry

Invoice Scanning and Imaging

Robust Workbench with Sophisticated Matching

Spreadsheet Invoice Entry

Open Interface

Automated Invoicing

ERS (Self-Billing) Invoices

Return to Supplier (RTS)

Expense Reports

Customer Refunds

Intercompany Invoices

Electronic Invoices

Web Service

B2B Invoice

Self-Service Invoice Entry

Supplier Portal

Payables Invoicing

Foreign Currency Conversion PO/Receipt Matching Prepayment Application Automatic Tax Calculation (Sales, Use, VAT, and

Withholding Taxes)

Invoice Validation

Invoice Approval

Online or Batch Accounting

Multiple Accounting Representations

Multiple Invoice Entry Methods

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Multiple Invoice Entry MethodsConsiderations

Type Implementation Consideration

Supplier Portal Invoice Entry• Have suppliers enter their own invoices and inquire on PO agreements, invoices and payment s to reduce paper and transaction processing costs

Evaluated Receipt Settlement

Automate invoice creation for payment of goods upon receipt in Logistics

• Best suited for inventory purchases as ERS can work if there is a PO• POs should include all costs to produce and ship the product, including freight charges and miscellaneous charges• POs must have firm pricing that should not be affected by unexpected charges

Spreadsheet Invoice Entry• For invoices having similar lines to utilize spreadsheet features like copy/ paste, drag/drop, hide/unhide cells etc.• Not ideal for payables specialist performing high volume invoice entry in a shared service center

Open Interface • For importing invoices into Payables from other sources

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Invoice Approval Implementation Considerations and Recommendations

Standard Invoices• Allow few selected users to force approve on exception basis

• Define different approval rules for PO matched and unmatched invoices

• Setup position, job and supervisory hierarchy depending on approval needs

• Consider implementing approval before validation to reduce days payable outstanding (DPO) or alternatively require validation before approval to ensure data accuracy

• Consider auto-approving specific invoices that need little review E.g. If your utility bill invoices are always under $500, consider setting up an

auto- approval

• Supplier Portal Unmatched Invoices• Require approval for non-PO matched invoices entered by suppliers

• Payment Requests• For expense report and customer refund payment requests, you need not configure approval rules as upstream transactions are pre-approved

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Invoice ApprovalRule Configuration

Invoice Approval Rules• Defined in Worklist application• Data driven conditions having effective

dates and priorities• Can be activated or de-activated

Example Rule• Invoice type ‘Standard’

– For amount greater than 2000, require approval by Manager

– For amount less than 2000, require approval by Supervisor

• Invoice type ‘Payment Request’

– Auto-approval• Others

– Supervisory one level approval

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Match Approval Levels

3-Way

2-Way

4-Way

InvoicePO

Inspection

PO Receipt

• Enforce internal control and fiscal discipline to ensure that payment is made only for goods and services ordered or received

PO

Invoice

InvoiceReceipt

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Match Approval LevelsImplementation Considerations

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Tolerances and HoldsImplementation Considerations

• Prevent payment for invoices violating policies by defining tolerances

• Define tolerances centrally and apply them to multiple supplier sites

• Define percentage or amount based matching tolerances for goods and services

Invoice

PO

Receipt

Atlanta

Paris

Supplier Sites

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Invoice Processing Implementation Considerations and Recommendations

Implementation ConsiderationsSetup Tasks/

Implementation Step

Setup default accounts to speed transaction entry and implement internal control

• Common Options for Payables and Procurement• Supplier Configuration• Distribution sets

Implement early pay discounts with multiple discount dates to avoid missing discount period

• Payables Invoicing Options • Payment Terms

Apply available prepayments during invoice entry

• Payables Invoicing Options - Show available prepayments during invoice entry

Schedule invoice validation and create accounting to process daily

• Schedule Create Accounting process to run daily

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Oracle Fusion Tax Centralized Tax Engine

Tax Setup

• Quickly set up tax with pre-seeded content

• Adapt to changing tax rules with date-effective tax content

• Simulate tax changes with Tax Simulator

Tax Sales and Use Tax

Recoverable & Non-Recoverable Tax

Deferred Tax

Tax on Freight

Duty Tax

Tax on Intercompany Movements

Inclusive or Exclusive Tax

Offset TaxesTax Reporting

•Standardized and simplified reporting using BI Publisher

•Modify/extend reporting templates

Tax Calculation

•Automatically and accurately calculate tax

•Allow certain individuals to override tax calculation

Refer to Oracle Fusion Tax Implementation and Configuration Considerations training for more details.

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Subledger Accounting (SLA) Multiple Accounting Representations

Payables Invoice

Payables Invoice

Centralized AccountingCentralized Accounting

Dr Cr

Single invoice can create multiple accounting representations in multiple currencies

French Fiscal Plan Compatible Std Calendar EUR

SSC France(Secondary Ledger)

Reporting Currency

Refer to Oracle Fusion Subledger Accounting Implementation and Configuration Considerations training for more details.

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Payment Processing Options

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Payment Processing OptionsImplementation Considerations and Recommendations

• Use Single Payment for off-cycle payments such as during period close and supplier inquiries on due payments

• Optimize check run frequency based on organization’s size to aid in availing early pay discounts and to avoid off-cycle single payments

• Schedule Cash Requirements Report to run before Payment Process Request to forecast cash needs

• For employee expense reimbursement based on expense policy consider Payment Process with straight through processing.

– Results in prompt payment for invoices based on policy and strict payment terms

Refer to Oracle Fusion Payments Implementation and Configuration Considerations training for more details.

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Analyze Account Payables BalancesPayables to General Ledger Reconciliation Report

• Streamline your reconciliation process by comparing Payables transaction activity, Subledger Accounting and General Ledger data.

– Identify reconciliation exceptions automatically

– Identify beginning and ending balances that matches Payables Trial Balance

– Drilldown to journal and transaction reports for detailed analysis

– Download and analyze report output in a spreadsheet

– Reconcile by ledger, specific business unit or account balancing segment

• The reconciliation report is available to both for General Ledger and Payables users

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• Set Payables Profile Option for data purge frequency– Purge old extract files based on days set in profile when new extract is run– Set interval so that it does not interfere with the reconciling timeline– All extract requests that do not fall within this interval are saved and can be

selected from the Recon Report OBIEE

• Assign financial category of Accounts Payables to all liability natural account values– Financial Category must be assigned, or the extract will error and not select

any data

Payables to General Ledger Reconciliation Implementation Considerations

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Payables to General Ledger Reconciliation Best Practices

• Run the Payables to General Ledger Reconciliation report after the Payables period is set to Closed because drilldown data is real-time and summary data is static

• Make sure the next period is open for entry of new activity

• General Ledger sources other than Payables should not be allowed to post to Payables accounts

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Additional Resources

Implementation Trainings• Oracle Fusion Payments Implementation and Configuration Considerations• Oracle Fusion Subledger Accounting Implementation and Configuration Considerations• Oracle Fusion Tax Implementation and Configuration Considerations• Oracle Fusion Common Procurement Implementation and Configuration Considerations

Functional TOIs• Fusion 1.0 TOI: Set Up Procurement – Define Payables• Fusion 1.0 TOI: Set Up Procurement – Define Disbursements

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