Invoice Approval Workflow

Michael V. Milano Oracle Corporation Abstract Improve your understanding of invoice approval workflow. This paper provides an overview of invoice approval workflow. Scope I. Review of AP Setup II. Overview of Approval Workflow III. Overview of the Invoice Approval IV. Sample Test Case I. SETUP Install and setup Oracle Approvals Management (OAM). You must apply AP patchset I and 2198768, 2220334, 2228792, 2257526, 2271164 and 2274701. Note: OAM and its setup are supported by Accounts Payables Support. OAM setup will be covered in an upcoming white paper. The setup in Accounts Payable is fairly straightforward. Navigate to Payables Options. In the Invoice tab, enable Use Invoice Approval Workflow. There are two additional options, Allow Force Approval and Require Validation Before Approval. Allow Force Approval allows the Accounts Payable user to force the invoice to an approved state. The Require Validation Before Approval option requires that the old approval process (now called validation) must be run prior to the invoice approval workflow. Validation as it is now called, is still the process that will place holds on invoices and automatically create tax distributions and invoice price variance calculations. The new invoice approval workflow allows for additional constraints to be applied to an invoice before its approved for payment. It is not meant to replace validation. It is meant to enhance the approval process. II. OVERVIEW OF APPROVAL WORKFLOW The Invoice Approval Workflow automates your invoice approval process. Based on rules you define, the workflow determines if an invoice needs approval, who the approvers are, and in what order approvers should approve payment of the invoice. The workflow then sequentially asks each approver in the approval list to approve invoices online. For example, you can define a rule so invoices over $100,000 require CFO approval and then CEO approval. If you use Invoice Approval Workflow, then every invoice that requires approval must 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 imported through the Payables Expense Report Import Program (because these expense reports have already been through an approval process) recurring invoices if the recurring invoice template did not have the Approval Workflow 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 Workflow process and the Invoice Approval Workflow process determined that according to the rules set up in Oracle Approvals Management that no one needs to approve the invoice.

nightly so you can closely monitor your rejected invoices. Note: If you have Allow Force Approval enabled, it will also override the Require Validation Before Approval. You can review the approval status of an invoice that has started the Invoice Approval Workflow in the following ways: Invoice Approval History window. Invoice Approval Status Report. Invoice Selection Criteria You can submit the Invoice Approval Workflow for an invoice either from the Invoice Actions window, or from the Submit Requests window. An invoice must meet all of the following criteria to be processed: If the Require Validation Before Approval Payables option is enabled, then the invoice must be validated. The Approval field value in the Invoices window must be: 1. Required, if you submit the workflow program from the Submit Requests window. 2. Anything except Initiated or Manually Approved, if you submit the workflow program from the Invoice Actions window. 3. The invoice amount must equal the distribution total. 4. The Ready for Approval check box in the Invoices window must be enabled. Approval and Validation The Invoice Validation process and Invoice Approval Workflow Program can be submitted in any order for an invoice, unless the Require Validation Before Approval Payables option is enabled. You might want to enable this option if you enter invoices that require the Invoice Validation process to create tax distributions for you. If your approvers need to review tax

You can set up your system to request and receive approval through the approvers e mail, through the approvers Oracle Workflow Notifications Workflow web page, or both. Approvers can approve or reject the invoice. If an approver approves the invoice, then the invoice goes to the next person in the approver list until all required people approve the invoice. If an approver rejects the invoice, then the workflow program ends. If an approver does not respond within the time you specify, then Workflow will request approval from that persons manager. If an approver rejects an invoice, then you can perform one of the following actions from the Invoice Actions window: Use the Force Approval option to manually approve the invoice (if enabled in Payables Options). Use the Initiate Approval option to resubmit the invoice to the Invoice Approval Workflow after correcting any issue that caused the approver to reject the invoice Use the Cancel Invoice option to cancel the invoice Suggestion: We recommend that you schedule the Invoice Approval Status Report to run

details before they approve an invoice, then we recommend that you enable this option. III. WORKFLOW PROCESS FLOW Handling Exceptions If the workflow program fails, then the workflow sends an email or workflow notification (or both) to a designated person such as your system administrator. This person can abort the workflow program, retry the failed workflow activity, or resolve the problem that caused the error to occur. If you want to override the Invoice Approval Workflow for an invoice, a Payables user can force approve it. You might want to use force approval if there is a problem with the Workflow program and you need to pay an invoice immediately. To force approve an invoice, select it in the Invoices window, then in the Invoice Actions window choose the Force Approval option. This stops the workflow program for the invoice and sets the approval status to Manually Approved. This invoice status cannot be updated, even if the pending approver subsequently approves or rejects the invoice. Also, you cannot resubmit the Invoice Approval Workflow for an invoice that has a status of Manually Approved. If you want to resubmit an invoice for approval then you can resubmit Invoice Approval Workflow from the Invoice Actions window. You can resubmit the invoice if the approval status is Required, Not Required, Rejected, or Approved. Because the workflow program selects only invoices that require approval and have never started the approval process (approval status is Required), you cant use the Submit Request window to resubmit approval for an invoice. You cannot delete an invoice if the Invoice Approval Workflow is processing or has processed it. (bug 2386392). The first step in the Invoice Approval Workflow is to enter and invoice in Payables (Invoices Entry Invoices). Once the invoice has been entered, select the Actions button from the invoice workbench. Select the Initiate Approval option. Click OK. The approval field should now display Initiated. Note the original value of this field when the invoice was entered was Required. Once the invoice approval is Initiated, a request is placed in the WF_DEFERRED queue. You can log into the self-service web application Workflow Administrator Web Applications responsibility. Select Event Queue Summary. Select WF_DEFERRED Queue. In the System Administrator responsibility, run the Workflow Agent Listener (Requests Run). This launches the Invoice Approval Workflow and moves the request from the WF_DEFERRED queue. The Workflow checks to see if the invoice is matched to a purchase order. This activity is disabled by default because a constant value of No is seeded for the Exclude PO Matched Invoices attribute in workflow. When this activity is enabled, if all distributions on the invoice are purchase order matched, then this activity sets the Invoice Approval status to Not Required. Note: To enable this function, bring up the workflow builder. Select attributes. Open the attribute Exclude PO Matched Invoices. Set the default value to Yes. Save the changes to the database.

Workflow calls OAM to get the identity of the transactions first approver. OAM compiles a list of all the approvers who need to approve a transaction. OAM sends each approver a notification to approve the transaction. If no first approver is found, the workflow ends and the approval field is update to Not Required. If the first approver is found, a notification is sent to the approver. The approver can either approve or reject the transaction. If rejected, an update is made to Approval History and the approval field changes to Rejected. If approved, an update is made to Approval History and workflow calls OAM to get the next approver in the approval list. If no other approvers exist, then the workflow ends and the approval field is updated to Approved. If the next approver is found, then this approver is sent a notification to approve or reject the transaction. Theyre actions are updated in Approval History. This continues until there are no approvers in the approval list who have not been notified. If all approvers approve the transaction, the approval field is changed to Approved. IV. SAMPLE TEST CASE Log into the self-service web applications AME Application Administrator responsibility. Select Approvals. Click Add Rule button. Enter a description. Do not enter any constraints. Enter a condition (i.e. 0USD<=SUPPLIER_INVOICE_AMOUNT <=1000USD). Enter approval (i.e. Require Pre-Approval From Approval Group). Enter an

approval type (i.e. group approvals before chain of authority). Start date is todays date. End date is NULL. Click on the Groups tab. Enter a name and description for the group (i.e. Test Approval Group, Test Approval Group respectively). Add a member to the group (i.e. Michael Milano, James Norton). In Accounts Payables, enter and invoice with an amount between 0 and 1000 USD (this is within the condition defined with the rule created in OAM). Click the Actions button on the invoice workbench. Select Initiate Approval. Approval field should now say Initiated. Log into the self-service web application Workflow Administrator Web Applications. Select Event Queue Summary. Select the WF_DEFERRED queue. The Item Key is the invoice id. Verify the invoice id appears in the queue. Log into the System Administrator responsibility and run the Workflow Agent Listener. This launches the workflow. Log into the self-service web application Workflow Administrator Web Applications as the approver. Select Find Notifications. Click on the notification. Approve the invoice. Back in Payables, query the invoice and verify the approval field has changed to Approved. You can also test to OAM as a standalone process. Log into self-service web application AME Application Administrator.

Click Approvals. Select the Test tab. Select Create a Test Transaction. Choose Person as Test-Transaction Requestor Type. Search for the requestor. If the approver is found you should get a list the test transaction attribute values. Make any necessary changes to the values and click the View Approval Process button. If an error appears the error is within OAM. If the approval completes without any errors, then OAM is setup correctly. Conclusions It is my desire that this paper has helped you understand the fundamentals of Invoice Approval Workflow. I hope that you are now better equipped to troubleshoot problems and determine what needs to be done to resolve the issue. In addition, if you encounter a problem that requires assistance, please remember to call Oracle Support. They may have seen the issue before and may already have a solution for the issue! About the Author Michael Milano is a Technical Analyst with the Oracle Support financials group. He has been working for Oracle Support for approximately 4 1/2 years.