Procure to Pay Overview

Copyright © 2007, Oracle. All rights reserved.

Objectives

After completing this module you should be able to do the following: • Describe the procure to pay process flow • Describe the key areas in the procure to pay process • Describe how the procure to pay process fits into the Oracle eBusiness suite of applications

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Overview of Application Integration
Depreciation/ Asset Transactions Subledger Assets Accounting Assets Payables/ Expenses/ Payments Payables Accruals Suppliers Subledger Entries

General Ledger

Receivables/ Revenue/ Receipts

Receivables
Invoices

Inventory Activity

Customers

Accounting

Requisitions
Items Purchasing/ iProcurement Inventory Internal Requisitions
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Order Management

Procure to Pay Lifecycle
Requisitions Catalog Content Management Purchase Orders Ordering

RFQs/ Quotations

Receiving
Sourcing Analysis Invoice/ Payment

Supplier management Supplier Performance

Reporting

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Oracle Procure to Pay Process
Demand Source

Purchase requisition

Request for quote (RFQ)

Supplier

Quotation

Order

Receive

Enter

Pay

Purchase order

Receipts

Invoice

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RFQs and Quotations

Imported requisitions

Requisition pool Automatically create

PO

Manual

Print/Send RFQ
Copy Supplier lists

RFQ
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Quotation

Requisitions
Demand

Inventory

WIP

MRP

Order Mgmt

Other Systems

Import/reschedule requisitions Internal Order Mgmt sales order

Approval
Manually create Requisition Requisition pool
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PO

Suppliers

Purchase requisition

Request for quote (RFQ)

Quotation

Supplier

Purchase order

Receipts

Returns

Payment

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Purchase Orders
Approve Manually create PO Maintain documents Requisition pool Automatically create

Accept

Revise

Control

Receive against PO

Match invoices in Payables

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Receiving

Shipment Supplier Transfer Inventory

Receive
Order Entry

Deliver

Shop floor

Inventory

Internal shipment

Inspect

Expense

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Invoicing

Receive invoices If appropriate, match invoice to purchase order or receipt

PO Import/Enter invoice Enter basic information Enter detailed information Maintain invoices

Invoice

File invoices

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Payment
Modify payments: • Remove/add invoices • Modify payment details Format payments: • Print checks • Load EFT data Validate payments: • Confirm checks • Update invoice • Payment history

Select validated invoice Pay invoice Run Pay run

Record manual payment

Create quick payment outside Oracle
Create computergenerated payment

Create single payments

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Summary

You should be able to do the following: • Describe the procure to pay process flow • Describe the key areas in the procure to pay process • Describe how the procure to pay process fits into the Oracle eBusiness suite of applications

Copyright © 2007, Oracle. All rights reserved.

Payables Overview

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Procure to Pay Lifecycle
Requisitions Catalog Content Management Purchase Orders Ordering RFQs/ Quotations Sourcing Analysis Receiving Invoice/ Payment

Supplier management
Supplier Performance

Reporting

Copyright © 2007, Oracle. All rights reserved.

Objectives

After completing this module you should be able to do the following: • Describe the Payables process flow • Describe the key areas in the Payables process • Identify Payables integration points • Identify Payables open interfaces

Copyright © 2007, Oracle. All rights reserved.

Overview of Payables Processes

Enter supplier

Import/Enter invoice

Validate invoice

Pay invoice

A/P 100,000 60,000 10,000 30,000

Transfer information to general ledger

Create accounting entries in Subledger Accounting
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Supplier Entry
Enter supplier
Import/Enter invoice Validate invoice

Pay invoice
A/P 100,000 60,000 10,000 30,000

Transfer information to general ledger

Create accounting entries in Subledger Accounting
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Invoice Entry
Enter supplier

Import/Enter invoice

Validate invoice

Optionally match to PO or receipt

Pay invoice
A/P 100,000 60,000 10,000 30,000

Transfer information to general ledger

Create accounting entries in Subledger Accounting
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Overview of Payment
Modify payments: • Remove/add invoices • Modify payment details Format payments: • Print checks • Load EFT data Confirm payments: • Confirm checks • Update invoice • Payment history

Select validated invoice Pay invoice Run Pay run

Record manual payment

Create manual payment outside Payables
Create computergenerated payment

Create single payments

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Overview of Payables Integration

Purchasing/ iProcurement Receivables

Loans

Cash Management

Projects

Payables

e-Commerce Gateway

Assets

Payments

iSupplier Portal

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Overview of Payables Integration (Cont.)

Human Resources

Subledger Accounting

General Ledger

Workflow

Payables

Alert

Inventory Property Manger

E-Business Tax

iExpense

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Payables Integration with Purchasing

1

Match and Update Qty Billed

Payables

2
POs

Copy Accounting Suppliers

Purchasing/ iProcurement

PCards

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Payables Integration with Receivables and Loans

1
Receivables

AR/AP Netting (AR Only)

Payables

2
Loans

Submit Payment Requests

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Payables Integration with Cash Management

1

Cash Flow Data

Payables

2
Bank Codes

Reconcile Payments Banks

Cash Management

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Payables Integration with e-Commerce Gateway

• • • •

820 - Outbound Payments 810 - Inbound Invoices 824 - Outbound Application Advice 857 - Billing Notice (ASBN)

Payables

e-Commerce Gateway

Suppliers

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Payables Integration with iSupplier Portal

2

Invoice Status

Payables

1

Submit PO-Matched and Unmatched Invoices

iSupplier Portal

Invoice Request

Supplier Info

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Payables Integration with Payments

Payment Methods Payables

Payments

Pay Runs

Payment Documents

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Payables Integration with Assets

1

Create Mass Additions

3

Post Mass Additions

Payables

FA Mass Additions

Assets

2
Suppliers

Prepare Mass Additions

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Payables Integration with Projects

1

Invoice Distributions

Payables

2
Projects

Adjustments and Expense Reports Tasks

Projects

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Payables Integration with Human Resources

Payables

1

Locations

Human Resources

Employees

Locations

Organizations

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Payables Integration with Subledger Accounting and General Ledger

1

Create Accounting

2

Transfer to General Ledger

Payables

Subledger Accounting

General Ledger

Ledger

Rates

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Payables Integration with Alert

• Invoices on Price Hold • Invoices on Quantity Received Hold • Invoices on Quantity Ordered Hold

Payables

Alert

Invoices Invoices

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Payables Integration with iExpense

Payables

1

Expense Reports

iExpense

Employees

Templates

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Payables Integration with E-Business Tax

1

Calculate Tax

2

View Tax Summary and Details

Payables

E-Business Tax Transaction Tax

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Payables Integration with Workflow

• • • • • •

Credit Card Expense Report Approvals Open Interface Import Procurement Card Emp. Verification Procurement Card Mgr. Approval Transaction Invoice Approval Workflow

Payables

Workflow

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Payables Integration with Property Manager

2

Payables Open Interface Import

1

Create Lease Invoices

Payables

Payables Invoice Open Interface Suppliers

Property Manager

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Multiple Organization Access Control

If you implement Multiple Organization Access Control, you can:
• • Enter invoices for multiple operating units without switching responsibilities. Pay invoices for multiple operating units in a single pay run.

BELGIUM Operating Unit

HOLLAND Operating Unit

DENMARK Operating Unit

EMEA Responsibility

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Open Interfaces

Use the following open interfaces to import data into Payables from other applications or third-party solutions: • Payables Open Interface • Payables Expense Report Open Interface • Payables PCard Open Interface • Payables Credit Card Open Interface • Payables Matching Open Interface • Payables Supplier Open Interface

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Payables Invoice Open Interface

ASBN ERS/pay on receipt EDI 810 Open interface

Invoices from external system

Quick Invoices

PCard Invoice Workflow AP Invoice
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Payables Expense Report Open Interface

Employee AP

Open interface Payables Invoice Import

Payment Invoice
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Payables PCard Open Interface

AP_Expense_ Feed_Lines_All

Invoice Open Interface

Open interface

Open interface

Payables Open Interface Import Invoice

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Payables Credit Card Open Interface

AP_Credit_Card Trxns_All

Invoice Open Interface

Open interface

Open interface

Payables Open Interface Import Invoice

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Payables Matching Open Interface

1

Match and Update Qty Billed

Open interface
Payables

2

Copy Accounting

PO Data

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Payables Supplier Open Interface

Open interface Suppliers, Sites, Contacts

Invoice

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Summary

You should now be able to do the following: • Describe the Payables process flow • Describe the key areas in the Payables process • Identify Payables integration points • Identify Payables open interfaces

Copyright © 2007, Oracle. All rights reserved.

Suppliers

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Procure to Pay Lifecycle
Requisitions Catalog Content Management Purchase Orders Ordering RFQs/ Quotations Sourcing Analysis Receiving Invoice/ Payment

Supplier management
Supplier Performance

Reporting

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Objectives

After completing this module, you should now be able to do the following: • Define suppliers and supplier sites • Identify key reports • Understand setup options • Understand additional implementation considerations

Copyright © 2007, Oracle. All rights reserved.

How Oracle Products Use Supplier Information

Payables

Assets

Purchasing

Property Manager

iSupplier Portal Trading Community Architecture

MOAC

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Overview of Suppliers
Enter supplier Import/Enter invoice Validate invoice

Pay invoice
Match to PO Create PO

Enter requisition

Create accounting entries in Subledger Accounting
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Supplier Controls

Control supplier information using: • Security • Numbering • Duplicate Supplier Entry • Setup Options (defaults) • Tax Defaults

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Flow of Default Values
Procurement Flow Payables Flow

Financials options
Purchasing/Receiving /Payables/Payables System Setup options

Supplier
Supplier site

Item

2

Invoice Invoice Lines

1
PO Documents

1

Takes precedence over

2

Distribution line

Scheduled payment line

Copyright © 2007, Oracle. All rights reserved.

Suppliers Page

• •

Search Company Profile
– – – – – – – – Organization Tax Details Address Book Contact Directory Business Classification Products and Services Banking Details Surveys

• • •

Quick Update To Do List Terms and Control
– – – – – – Accounting Tax and Reporting Purchasing Receiving Payment Details Invoice Management

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Finding Suppliers

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

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Supplier Quick Update

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

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Entering Basic Supplier Information

Standard supplier

• Supplier Type • Name • Number Stevens and Co 46018

FEIN 52-1234567

• Taxpayer ID or • Tax Registration Number

• Inactive On

01-AUG-2010

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Supplier – Organization

• Parent Supplier Name
– Must already be defined to select

• Number
– Parent supplier number

Parent

• Customer Number
Your Company Your Supplier

Child

Child

Cust. #9924

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Supplier – Tax Details

• • • • •

Rounding Rule Set Invoice Values as Tax Inclusive Allow Withholding Tax Withholding Tax Group Tax Registrations

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Supplier – Address Book and Contact Directory

Supplier Tokyo Paris New York

Purchasing site RFQ Only site Sue Taylor, Sales Mgr Bill Wilson, Sales Quotes

Purchasing site

Payment site Primary Pay site Aaron Carr, AR Mgr

Liz Miller, Sales Rep

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Supplier – Business Classification

Name Hal’s Supplies Adams for Board

Type Office Supplies Donations

Minority-Owned

Woman Owned

Small Business

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Suppliers – Products and Services

Computer/ Technical

Manufacturing

Financial
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Supplier – Banking Details

• • • • •

Name Number Primary Currency Start/End Dates
Operating Account #432198-77

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Suppliers – Surveys

Create custom questionnaires that can be used to gather feedback from suppliers' surveys

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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.

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Supplier – Tax and Reporting

• • • • •

Allow Tax Applicability Set for Self Assessment/Reverse Charge Allow Offset Taxes Tax Classification Code Income Tax Reporting Site

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Supplier – Purchasing
• • • • • • • • • • • • • All New Orders Ship-To Location Bill-To Location Ship Via Pay On Receipt Alternate Pay Site Invoice Summary Level Create Debit Memo from RTS Transaction * Gapless Invoice Numbering Free-on-Board (FOB) Freight Terms Transportation Arranged Poor Quality Country of Origin

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Supplier – Receiving

• • • • • • • • •

Enforce Ship-To Location Receipt Routing Match Approval Level Quantity Received Tolerance Quantity Received Exception Days Early/Late Receipt Allowed Receipt Date Exception Allow Substitute Receipts Allow Unordered Receipts

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Supplier Information – Payment Details

• Payment Method

Check
Electronic Outsourced Check Wire • Pay Each Document Alone

1 to 1 Invoice

Check

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Supplier – Invoice Management

• •

Invoice Details Hold from Payment

Payment Terms
– – – – – – Priority Terms Pay Date Basis Pay Group Always Take Discount Exclude Freight From Discount – Create Interest Invoice

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Supplier Site Settings
ABC Corp. Sites Payment Terms Pay Date Basis Ship-To Location Tokyo Office

Tokyo

Net 30

Due

Paris

2/10, Net 30

Discount

Headquarters

New York

Net 30

Due

Headquarters

Copyright © 2007, Oracle. All rights reserved.

Supplier Level Versus Site Level Entry
Tabbed Region Organization Tax Details Address Book Contact Directory Business Classification Products and Services Bank Details Surveys Accounting Tax and Reporting Purchasing Receiving Payment Details Invoice Management Supplier Level Yes Yes No Yes Yes Yes Yes Yes No Yes Yes Yes Yes Yes Site Level No Yes Yes No No No Yes No Yes Yes Yes No No Yes

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Reviewing Suppliers

You can review suppliers in the Suppliers page.

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Maintaining Supplier and Supplier Site Information
• Changed values default only to new documents that you subsequently create • Where to make the change?

Net 30 Supplier 2/10, Net 30

Existing Site A Net 30

Existing Site B Net 30

New Site C 2/10, Net 30

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Adjusting Suppliers: Updating Supplier and Supplier Site Defaults

Remember that when you make changes to values that default to Payables and Purchasing documents, the changed value defaults only to new documents you subsequently enter or create.

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Adjusting Suppliers: Updating Supplier Invoice Holds
Holds are controlled at the supplier site. For example, if you have enabled the Hold All Payments option for a supplier and supplier site, and you disable the option for the supplier, but not the supplier site, all unvalidated invoices for the supplier site will remain held for payment. Use the Quick Update or Invoice Management pages to update the hold status.

Copyright © 2007, Oracle. All rights reserved.

Adjusting Suppliers: Adding a New Supplier Site
Enter the Supplier Site and address information. The Site Name will not appear on documents you send to the supplier; it is for your reference when you select a supplier site from a list of values during transaction entry.

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Adjusting Suppliers: Updating a Supplier’s Tax Status
In the Tax Details page, make any changes to the Taxpayer ID or Tax Registration Number. In the Tax and Reporting page, update the tax profile for the supplier and supplier sites.

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Approving Supplier Requests

Suppliers with iSupplier Portal accounts can request updates to their supplier information. All supplier requests must be approved before the supplier record is updated.

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Avoiding Duplicate Suppliers

• Before setting up a new supplier, verify it doesn’t already exist. • System requires unique supplier names. Relies heavily on strong naming conventions. • Benefits of avoiding duplicate supplier entry

Example #1

Example #2

XYZ Inc.

XYZ Inc

The Sun

Sun Inc

Sun Co

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Merging Suppliers

Run supplier audit report

ABC Identify duplicate Corporation suppliers

ABC Corp

Merge suppliers

Maintain audit trail

Review merge results
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ABC Corporation

Data Example – Supplier Merge

Oracle Corporation Target/Correct Supplier Site Names CA-REDWOOD IL-CHICAGO VA-RESTON FL-ORLANDO

Oracle Corp Incorrect Supplier Site Names CA-REDWOOD FL-ORLANDO

merge

copy

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Merging Suppliers

After you have merged suppliers, Payables automatically prints the following reports: • Purchase Order Header Updates Report • Supplier Merge Report

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Reports

Suppliers Report Supplier Audit Report Supplier Payment History

Supplier Paid Invoice History
Supplier Mailing Labels Purchase Order Header Updates Report

Supplier Merge Report

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Reports

Supplier Customer Netting Report Supplier Open Balance Letter Invalid PO Supplier Notice

Accounts Payable Trial Balance Report Invoice Aging Report
Open Items Revaluation Report

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Financials Options

Supplier-Purchasing RFQ Only Site Ship-To Location Bill-To Location Inventory Organization Ship VIA FOB Freight Terms

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Financials Options

Human Resources Expense Reimbursement Address

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Payables System Setup

Supplier Supplier Number •Entry •Type •Next Automatic Number Control •Invoice Match Option •Hold Unmatched Invoices Payment •Invoice Currency •Pay Group •Terms Date Basis •Pay Date Basis •Payment Terms

•Always Take Discount
•Create Interest Invoices

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Lookup Codes

VENDOR TYPE MINORITY GROUP

PAY GROUP
FREIGHT TERMS SHIP_VIA FOB

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Profile Options
PO: Secondary E-mail Address PO: In File Path PO: Terms and Conditions File Name

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Additional Implementation Considerations Responsibility for Supplier Entry/Maintenance
• Assign responsibility for supplier entry/maintenance • Number of staff required • Consider good internal control and segregation of duties

2 Payables Clerks
Create/adjust suppliers

1 PO Clerk
Add purchasing contacts

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Additional Implementation Considerations Supplier Naming Conventions
• Benefits
– Prevent duplicate invoices and payments – Improve system performance and supplier inquiries – Provide accurate supplier reporting

• Who should develop the naming conventions? • Document with sign-off by authorized approver(s)

Purchasing

Payables

Assets

Others

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Additional Implementation Considerations Supplier Naming Convention Examples
Examples • Exact spelling decided for easily misspelled suppliers • Exact spelling for top ten priority suppliers • Determine use of case (CAPS, Title Case) • List approved abbreviations • Determine use of punctuation and special characters • Site name structure • Address format

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Additional Implementation Considerations Supplier Numbering Options
• Two choices
– Automatic (numbers only) – Manual (alphanumeric or numeric)

• Switch from manual to automatic
– Ensure that Next Automatic Number is larger than the largest number assigned
Automatic 2114 2115 2116 2117 Manual EE103 GV104 ST105 ST106

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Additional Implementation Considerations Supplier Open Interface
You can use the Supplier, Supplier Site and Supplier Contacts Open Interfaces to import supplier information into Payables

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Additional Implementation Considerations Setup of Fax or E-Mail
Options for Communicating Approved Purchasing Documents to Suppliers

Printed Document

Facsimile

E-Mail

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Summary

In this module, you should have learned how to: • Define suppliers and supplier sites • Identify key reports • Understand setup options • Understand additional implementation considerations

Copyright © 2007, Oracle. All rights reserved.

Invoices

Copyright © 2007, Oracle. All rights reserved.

Procure to Pay Lifecycle
Requisitions Catalog Content Management Purchase Orders Ordering RFQs/ Quotations Sourcing Analysis Receiving Invoice/ Payment

Supplier management
Supplier Performance

Reporting

Copyright © 2007, Oracle. All rights reserved.

Objectives

After completing this module you should be able to do the following: • Import/Enter invoices and invoice distributions • Match to purchase orders • Validate invoices • Apply and release holds • Understand invoice approval workflow • Understand key reports • Understand setup options • Understand additional implementation considerations

Copyright © 2007, Oracle. All rights reserved.

Overview of Invoices
Enter supplier Import/Enter invoice Validate invoice

Pay invoice
Match to PO Create PO

Enter requisition

Create accounting entries in Subledger Accounting
Copyright © 2007, Oracle. All rights reserved.

Flow of Default Values
Procurement Flow Payables Flow

Financials options
Purchasing/Receiving /Payables/Payables System Setup options

Supplier
Supplier site

Item

2

Invoice Invoice Lines

1
PO Documents

1

Takes precedence over

2

Distribution line

Scheduled payment line

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Invoice Types

• • • • •

Standard Credit Memo Debit Memo Mixed Prepayment

• • • • •

Expense Report Withholding Tax Interest Retainage Release Transportation Invoices

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Entering Invoices Overview

You can manually enter invoices into Payables using: • Invoice Workbench • Quick Invoices window

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Creating Invoices Automatically

Your system can create the following types of invoices: • Recurring Invoices • RTS Invoices • Retroactive Price Adjustment Invoices

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Adjustment and PO Price Adjustment Invoices

You can use the Invoice Workbench to view and query by example Adjustment and PO Adjustment invoices. • You cannot enter or update these invoices. • You cannot match these invoices to receipts and purchase orders.

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Invoice Import
You can import invoices or invoice information to create invoices in Payables. • Oracle Internet Expenses expense reports • Payables expense reports • Credit Card invoices • EDI invoices • XML Invoices • Invoices from external systems • Oracle Property Manager invoices • Oracle Assets lease payments
Copyright © 2007, Oracle. All rights reserved.

Assigning a Default GL Date
GL Date Basis Payables Option Invoice date, system date, or invoice received date Determines default Invoice GL date Defaults to

Distribution GL date

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Overview of Entering Batches
Receive invoices Batch invoices Prepare a batch control form

Update the batch control form Review batch control reports File invoice Enter a batch of invoices

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Creating Batch Control Forms

Batch Name : JS03042007

Date: 03/04/07

Batch Control Form
Control Invoice Count: 20 Control Invoice Total: $2,600.78

Actual Invoice Count: 19
Count Difference: 1

Actual Invoice Total: $2,200.78
Total Difference : $ 400.00

Entered by: John Smith Entry Time (elapsed): 15 minutes Notes: Invoice #300941 for supplier ABC Corporation was a duplicate.

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Invoice Structure
• Type • Supplier • Number

Invoice Header

• Currency • Terms • Type • Amount • Accounting • Product Integration • Type • Amount • Charge Acct.

Invoice Lines

• Amount • Pay Date

Scheduled Payments

Distributions

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Invoice Workbench

Invoices Window • Invoice Header • General • Lines • Holds • View Payments • Scheduled Payments • View Prepayment Applications

Other Features • Actions • Calculate Tax • Tax Details • Corrections • Quick Match • Match • Distributions

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Entering Basic Invoices in the Invoice Workbench

Invoice Header

Invoice Lines

Scheduled Payments

Distributions

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Entering Invoice Header Information

• • • • • • • • • •

Invoice Type Trading Partner Supplier Number Supplier Site Invoice Date Invoice Number Amount Description Payment Terms Payment Method

Invoice Header

Invoice Lines

Scheduled Payments

Distributions

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Entering Invoice Line Information – Line Types
• Type
– – – – Item Freight Miscellaneous Tax

Invoice Header

Invoice Lines

• Amount
Scheduled Payments

Distributions

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Entering Invoice Line Information – Other Attributes
• • • • • • • GL Date Account Track as Asset Description Status Accounted Project/Task/ Expenditure

Invoice Header

Invoice Lines

Scheduled Payments

Distributions

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Entering Distributions

Manual

Distribution Set

Matching Allocation Invoice Validation

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Distribution Sets

Use a Distribution Set to automatically enter distributions for an invoice when you are not matching it to a purchase order. You can create: • Full Distribution Sets • Skeleton Distribution Sets

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Entering Distribution Types

• Type:
– – – – – – Item Freight Miscellaneous Tax Withholding Prepayment
Scheduled Payments

Invoice Header

Invoice Lines

• Amount

Distributions

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Entering Freight Distributions

There are three ways to create freight distributions: • Enable the Automatically Create Freight Distribution Payables Option • Allocate freight across invoice distributions • Manually enter freight distributions

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Tax Distributions

Tax distributions are automatically created when you click Calculate Tax or when you validate the invoice. Withholding Tax distributions are automatically created when you validate the invoice.

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Allocating Freight and Miscellaneous Distributions

Item

Miscellaneous

Freight

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Creating Distributions by Allocation in the Invoice Workbench
You can use the Charge Allocations window to automatically create freight or miscellaneous distributions.

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Allocation Restrictions

• • • • •

Cancelled invoices Paid invoices Applied prepayments Items matched to multiple PO distributions Accounted allocations

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Scheduled Payments

• • • •

Scheduled Payment Holds Due Date Gross Amount Priority

Invoice Header

Invoice Lines

Scheduled Payments

Distributions

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Entering Purchase Order and Receipt Matched Invoices
Match invoices to: • Purchase order • Purchase order shipments • Purchase order distributions • Purchase order receipts and receipt lines

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Match Approval Level Options

Invoice Quantity Billed

PO Quantity Ordered PO Line Price Quantity Received Quantity Accepted

2-Way
Unit Price

3-Way 4-Way

Quantity Billed Quantity Billed

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Matching to a Purchase Order
Header PO information Detail Item line 1 Supplier information

Shipment line 1
Distribution line 1 Distribution line 2

Shipment line 2
Distribution line 1 Item line 2 Shipment line 1 Distribution line 1

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Matching to Purchase Order Shipments

10 Items on Scheduled Shipment, to be shipped to department 110

6 Delivered 6 Items Actually Shipped
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110

6 Items Charged

Matching to Purchase Order Distributions

10 Items on Scheduled Shipment • 7 to be sent to Dept 110 • 3 to be sent to Dept 120 0 Delivered

120
0 Items Charged

6 Delivered 6 Items Actually Shipped

110
6 Items Charged

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Matching to Receipts and Receipt Lines

10 Items on Scheduled Shipment • 10 to be shipped to Dept 110

Search for PO Receipts

Match Details Recorded on PO

Must have Receipt to Match Invoice
Copyright © 2007, Oracle. All rights reserved.

PO

Matching to Purchase Orders or Receipts in the Invoice Workbench
To match an invoice to a purchase order or receipt: • Use the Match to Purchase Order/Receipts window • Enter the PO number in the invoice header • Enter the PO Distribution, PO Shipment, or Receipt information in the invoice line • Use Quick Match

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Corrections

You can enter price, quantity, or amount corrections, depending on the type of purchase order line you are correcting: • Goods • Services • Rate Services

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Price Correction Example
1
Match Invoice 5 Units @ $12/Unit PO 5 units @ $10/Unit IPV = $10 Qty Billed = 5

Total QTY Billed = 5 Total IPV = 0

2
Match & Price Correct IPV = -$10Total Qty Billed = 0

Credit Memo 5 Units @ $-2/Unit

PO 5 units @ $-2/Unit

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Final Matching

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

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Types of Accounting Flows

• Asset account • Expense account • Accrual account

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Matching to Distributions for Assets

1
Match
Invoice PO 01-000-1570-0000-000 Asset Clearing

01-000-1570-0000-000
Asset Clearing

2
Copy Computer-PC Asset

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Matching to Distributions for Expenses

1
Match
Invoice PO 01-110-7740-0000-000 Expense

01-110-7740-0000-000
Expense

2
Copy Office Supplies
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Matching to Distributions for Inventory

1
Match
Invoice PO 01-000-1410-0000-000 Material

01-000-2215-0000-000
Inventory AP Accrual

2
Copy Inventory

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Define Purchase Order Matching Tolerances (Optional)
• • • • • • • • Quantity ordered % Maximum quantity ordered Quantity received % Maximum quantity received Price % Exchange rate amount Shipment amount Total amount

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Define Tax Tolerances (Optional)

• Tax % • Tax amount range

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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 window

Payables Open Interface Table

Invoice

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Quick Invoice Process

Enter invoices in Quick Invoices window

Data is stored in Payables Open Interface Tables

Import Invoice Records

Payables creates invoices with distributions and scheduled payments

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Quick Invoice Batches

Assign a batch name to group the invoice records in the Quick Invoices window. Payables assigns the batch name to each invoice record you enter.

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Entering Purchase Order Matched Invoice Records in Quick Invoices
When you enter a purchase order matched invoice record, the import process automatically creates invoice distributions for you based on your match.

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Finding Invoice Records in Quick Invoices

You can query any invoice record in the Quick Invoices window if you entered it in the Quick Invoices window and you have not yet purged the invoice record from the Payables Open Interface tables.

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Modifying Invoice Records in Quick Invoices

In the Quick Invoices window, you can modify any invoice record you entered in the Quick Invoices window but have not successfully imported.

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Adding Invoice Records to an Existing Quick Invoices Batch
You can add invoice records to a Quick Invoices Batch at any time. Either query an existing batch and add invoice records to it, or add invoice records to an existing batch by using the same Source and Batch Name when you enter new invoice records.

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Creating Invoices From Quick Invoices Invoice Records (Import)
Import invoices records you entered in the Quick Invoices window using the Create Invoices window, or by submitting the Payables Open Interface Import Program. You can view and modify imported invoice records in the Invoice Workbench.

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Entering 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

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Self Service Invoices
Payables Launches Workflow

Without PO

Supplier enters invoice in iSupplier Portal

Invoice Request

Account payables department approves request

With PO

Payables User enters invoice in Invoice Actions page

Invoice

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Payment Requests
If requires approval, Payables Launches Workflow Payment Request No approval required Loans Payables applies holds, if necessary Account payables department approves request

submits Receivables

Pay

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Invoice Validation Process
Enter or import invoices Receive invoices electronically or in the mail Validate invoice Optionally match to PO or receipt

View invoice

Create subledger accounting AP 100,000 60,000 10,000 30,000
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Pay invoice

Levels of Invoice Validation

• System level validation • Batch level validation • Invoice level (online) validation

Validate invoice

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Approval

The Invoice Approval Workflow Program can be submitted before or after validation, unless the Require Validation Before Approval Payables option is enabled.

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Invoice Approval Levels

You can define the approval rules in Oracle Approvals Management in one of the following ways: • Line-level rules only • Document-level rules only • Line-level and document-level rules

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Invoice Approval Workflow

The Invoice Approval Workflow automates your invoice approval process. Based on rules you define, the workflow determines if an invoice needs approval, who the approvers are, and in what order approvers should approve payment of the invoice.

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System Setup

You can set up your system to request and receive approval through the approver’s e–mail, through the approver’s Oracle Workflow Notifications Workflow web page, or both.

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Invoice Approval Workflow Program

Status of approval:

"Future"

"Pending"

Decision

Notification has been sent, but not acted on during this stage.

Approved

Rejected
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Invoice Approval Workflow Program Parameters
Trading Partner

Invoice Number

From/To Invoice Date

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Invoice Approval History

You use the Invoice Approval History window to review the approval progress of any invoice that has started or completed the Invoice Approval Workflow process.

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Holds and Releases

• System holds • Manual holds
– Supplier hold – Invoice hold – Scheduled payment hold

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Apply Holds to Supplier Sites

San Diego

New York

Hold All Payments Hold Unvalidated Invoices Hold Unmatched Invoices Amount Limit = $15,000

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Apply Holds to Invoices

Hold Types Acct Hold Reason Funds Hold Reason Insufficient Information Invoice Hold Reason Matching Hold Reason Period Hold Type PO Req Hold Reason Variance Hold Reason

Predefined

User Definable

Manually Releasable No Sometimes No Yes Sometimes No No Sometimes

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Apply Holds to Scheduled Payments

$1000.00

Invoice

Hold

Due Date 04-APR-2007 04-MAY-2007

Gross Amount 900 100

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Release Supplier Site Holds

San Diego

New York

Hold All Payments Hold Unvalidated Invoices Hold Unmatched Invoices Amount Limit = $15,000

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Release Invoice Holds
Hold Release Types Acct Release Reason Funds Release Reason Sufficient Information Predefined User Definable

Invoice Release Reason
Matching Release Reason Period Release Type Variance Release Reason Hold Quick Release Reason Invoice Quick Release Reason

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Release Scheduled Payment Holds

$1000.00

Invoice

Hold

Due Date 04-APR-2007 04-MAY-2007

Gross Amount 900 100

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Reports

Batch Control Report by Batch Name Batch Control Report by Entered By Credit Memo Matching Report

Invoice Aging Report
Invoice Audit Listing by Voucher Number Invoice Audit Listing

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Reports

Invoice Audit Report Invoice History Report Invoice on Hold Report

Invoice Register
Matching Detail Report Matching Hold Detail Report

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Reports

Recurring Invoices Report Matching Hold Agent Notice Print Invoice Notice

Supplier Paid Invoice History
Matching Holds by Buyer

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Reports

Receiving Hold Requestor Notice Distribution Set Listing Key Indicators Report

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Setup Options

• • • •

Payables System Setup Options Payables Options Purchasing Options Profile Options

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Payables System Setup Options
Payables System

Invoice Match Option
Hold Unmatched Invoices Invoice Currency Pay Group

Terms Date Basis Pay Date Basis Payment Terms Always Take Discount Create Interest Invoices

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Payables Options
Invoice Allow Force Approval Require Validation Before Approval

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Payables Options (Continued)
Invoice Use Invoice Approval Workflow Allow Online Validation Receipt Acceptance Days

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Payables Options (Continued)
Invoice Confirm Date as Invoice Number Allow Adjustments to Paid Invoices Recalculate Scheduled Payment

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Payables Options (Continued)
Invoice Allow Document Category Override Freight Account GL Date Basis Prepayment Settlement Days

Prepayment Payment Terms

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Payables Options (Continued)
Interest Matching Allow Final Matching Allow Distribution Level Matching Allow Matching Account Override Transfer PO Descriptive Flexfield Information

Allow Interest Invoices

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Purchasing Options

Match Approval Level

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Profile Options

PO: ERS Aging Period PO: ERS Invoice Number Prefix AP: Use Invoice Batch Controls

AP: Notification Recipient e-Mail

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Additional Implementation Considerations

Tips to speed up data entry • Use Folder Tools • Use Quick Invoices • Use Account Aliases • Use Keyboard Shortcuts • Use Pay on Receipt • Use Procurement Cards • Use Distribution Sets • Use Recurring Invoices • Set Up Default Values (System and Supplier Site)

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Additional Implementation Considerations

• • • • •

Invoice conversion Data mapping Data cleanup Report mapping Training and cutover

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Summary

You should now be able to do the following: • Import/Enter invoices and invoice distributions • Match to purchase orders • Validate invoices • Apply and release holds • Understand invoice approval workflow • Identify key standard reports • Understand setup options • Understand additional implementation considerations

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Payments

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Objectives
After completing this module, you should be able to do the following: • Describe the payment process • Set up banks and bank accounts • Enter single payments • Process multiple payments • Review and adjust payments • Set up and create bills payable • Create, apply, and release holds on prepayments

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Objectives

• • • •

Reconcile payments with Oracle Cash Management Use key standard reports Understand key setup options Understand additional implementation considerations

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Procure to Pay Lifecycle
Requisitions Catalog Content Management Purchase Orders Ordering

RFQs/ Quotations

Receiving
Sourcing Analysis Invoice/ Payment

Supplier management Supplier Performance

Reporting

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Invoice Payment Overview
Enter supplier Enter invoice Validate invoice

Pay invoices
A/P 100,000 60,000 10,000 30,000 Transfer information to General Ledger Create accounting entries
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New Payment Terminology in R12
Key Concepts
Document Payable Pay Run/ Payment Process Request Payee

Payment Instruction
Payment Process Profile Payment Process Request Template Payment Format Payment Method

Key Concepts New to Oracle Payables

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Using the Invoice Workbench

The Invoice Workbench is used to:


Enter, adjust, review one or more invoices Initiate payment of one or more invoices Initiate payment of one or more scheduled payments

Fully Integrated Invoice Workbench
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Using the Payment Workbench

The Payment Workbench, (Payments window) accessible through the Invoice Workbench, is used to generate: - Manual payment - Quick payment - Refund
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Using the Payments Manager
Payments Manager
The Payments Manager is used to create and process multiple payments and is comprised of the following components: • Payments Dashboard (home) • Payment process requests templates • Payment process requests • Payment instructions • Payments

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Seeded Payment Methods
Payment Method

Definition

Check
Outsourced Check Electronic Wire

A paper check to print and send to a supplier
Transmission of payment information to an external party, such as your bank, that prints checks on your behalf An EFT, EDI, or XML payment to the bank of a supplier A funds transfer initiated by contacting the bank and requesting wire payment to the bank of a supplier

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Bank Account Model
Trading Community Architecture (TCA)

Cash Management

Bank

Payables

Receivables Bank Branch Bank Account Payroll Treasury

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Entering Bank and Bank Branch Information
Country Bank Name Address Contact

Bank

Bank Branch

Country & Bank Branch Name Branch Type & Details Address Contact

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Entering Bank Account Information

Owner

Bank Account Owner (LE) Account Use

Name

Information

Number

Currency

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Entering Bank Account Information
General Controls
– Cash, Cash Clearing
– Bank Charges, Bank Errors – Foreign Exchange Charges, Agency Location Code

– Netting Account

Payables Controls
– – – Multiple Currency Payments, Pooled Account Minimum/Maximum Payment, Allow Zero Payments Maximum Outlay

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Entering Bank Account Information

Access

Account Use Organization Accounts Document Category/ Payment Method

Contact

Contacts

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Defining Payment Documents

Payment documents are check stock on which checks and promissory notes can be printed or written. They usually have security features, such as watermarks to prevent fraud. Before you can use a bank account with a processing type of Printed, you must: • Create at least one payment document. • Assign the payment document to a specific:
– bank account name – bank account number – bank and branch

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Manual Payment Overview

Payments made outside of Payables

Handwritten/Typed Checks

Wire Transfers Your Bank Supplier’s Bank

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Creating Manual Payments
Payments Type Bank Account Payment Document Preprinted Checks Num Payment Amount Trading Partner/Site

Manual 1st National

2107 200.10

ABC Co/Boston

Enter/Adjust Invoices

Select Invoices Invoice Number Payment Amount Discount Amount Unpaid Amount Discount Available

29097
31077

88.10
112.00

0.00
0.00

88.10
112.00

0.00
0.00

Invoice Overview
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Creating Quick Payments
Payments Type Bank Account Payment Document Laser Checks Num Payment Amount Trading Partner/Site

Quick

1st National

7240

3510.00

XYZ Inc/Dallas

Enter/Adjust Invoices

Select Invoices Invoice Number Payment Amount Discount Amount Unpaid Amount Discount Available

9097
10038

2850.00
660.00

0.00
0.00

2850.00
660.00

0.00
0.00

Invoice Overview
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Processing Stop Payments for Single Payments in the Payment Workbench

Contact Bank Request Stop Payment

Yes

Release stop

Bank Confirms Cleared?
Query Payment Initiate Stop No Proceed with void

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Voiding Single Payments in the Payment Workbench

Query Payment Actions Void Invoice Action

Invoice Available for Payment Invoice on Hold Cancel Invoice

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Processing Multiple Payments Overview
Payments Manager
The Payments Manager enables you to perform the following payment actions:
• •

• •


• •

Create payment process request templates Use templates to automatically select invoices to pay Schedule pay runs Modify invoice selection and payment amounts Initiate payment instructions View the status of payments Void or record stop payments

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Payments Manager Overview
The Payments Manager’s payment process is as follows: • Invoices are grouped into a payment process request. • The Build Payments program validates the invoices, groups them into payments, and validates those payments. • The Create Payment Instructions program groups the payments into payment instructions. • Each payment instruction results in one payment file that contains information on one or more payments. • Payments are made by printing checks or electronically transmitting payment instructions to a financial institution or external payment system.

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Creating Payment Process Request Templates

• Payment process request templates are created in the Templates tab of the Payments Manager to simplify pay run processing.
A template is used to select invoices for a pay run and specifies: • header information • payment selection criteria • payment attributes • processing instructions • how validation failures will be handled
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Specifying Payment Process Request Template Header Information
Template Header Information The first step in creating a payment process request template is to specify template header information. The information in a header uniquely defines the template, making it easy to query. Defines the Template

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Specifying Payment Process Request Template Payment Selection Criteria
Invoice Payment Criteria The second step in creating a payment process request template is to specify invoice payment selection criteria. Selection criteria determine which invoices will be selected for payment in the pay run. Defines Invoices for Payment

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Specifying Payment Process Request Template Payment Attributes
The third step in creating a payment process request template is to specify payment attributes. For a pay run, you can specify one of the following: – a single bank account and a single payment process profile – multiple bank accounts using different payment instruments Different Payment Instruments
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Single Payment Process Profile

Automating the Payment Process Request Template Process
The fourth step in creating a payment process request template is to specify the degree of pay run automation. The pay run process can specify whether to:

Select Elements of Pay Run Automation

– group credit payments for a
supplier together – stop for selected invoice review – stop for proposed payments review – initiate payment instructions after pay run/wait for review

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Specifying Validation Failure Criteria for the Payment Process Request Template
The fifth and final step in creating a payment process request template is to specify how the system handles validation failure on the: – document level – payment level Documents are invoices grouped together to form a payment. A payment contains one or more documents.

A Payment Contains One or More Documents

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Submitting the Cash Requirement Report

Cash Requirement Report
• • Used to forecast your immediate cash needs for invoice payments

Report Can Be Submitted
Before every pay run to determine cash requirements for the pay run For next two or three pay runs to forecast cash requirements and improve cash management

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Submitting an Expedited Single Payment

An expedited single payment is a payment process where the following occurs:

Using the Payment Workbench, a single invoice is printed or transmitted in seconds. A single invoice is processed in a payment process request, resulting in one payment/one payment instruction containing the single invoice.

The system does not wait for scheduled payment instruction creation and ignores invoices or payments that may be waiting for further processing.

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Submitting a Standard Payment Process Request
Using the Payments Manager, you can manage a large group of documents payable associated with: • multiple operating units • multiple legal entities • multiple currencies and pay groups • multiple bank accounts • different payment instruments

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Scheduling a Payment Process Request
You can schedule a payment process request that selects invoices using a specific payment process request template, which will run:

• as soon as possible • on a specific date and time • periodically or only once

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Reviewing or Modifying Selected Invoices

By reviewing and modifying invoices that are selected for a pay run, you can: • change the invoice amount or the discount taken • remove selected invoices from the payment process request • add selected invoices to the payment process request • review unselected invoices • recalculate interest, payment withholding, or exchange rates

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Reviewing the Scheduled Payment Selection Report
The payment process request automatically initiates the Scheduled Payment Selection Report where you can review: • invoices selected for a pay run • invoice selection criteria • immediate cash requirements for the pay run • credits missed • available prepayments • unselected invoices

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Reviewing Proposed Payments

After the Build Payments program has created proposed payments -You can review and approve them to confirm that the right payments are being made.

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Building Payments
After you submit a payment process request, the Build Payments program groups invoices together to build payments.

The Build Payments Program:
• • • • validates invoice information required for payment groups invoices into payments assigns disbursement bank accounts and payment process profiles to the payments validates the payments

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Creating Payment Instructions Overview

A payment instruction is a group of payments that is created from one or more payment process requests. This information is formatted and, depending on your setup, is converted to a payment file that is: -- printed onto in-house checks -- transmitted to a financial institution or payment system for further processing and disbursement

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Creating and Transmitting Electronic Payment Instructions
Payment instructions are a collection of payments that are created by one of the following ways: • created automatically by the Create Payment Instructions program • created after manual submission by you

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Creating and Printing Printed Payment Instructions
Payment instructions are a collection of payments that are created by one of the following ways: • created automatically by the Create Payment Instructions program • created after manual submission by you

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Printing Payments

Schedule Request: Parameters page

Print Now

Submit Requests Concurrent Program Name: Create Printed Payment Instructions Setup for Printed Payments: Processing Type of Printed in the Create Payment Process Profile page

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Reprinting Payment Documents

If you find no problems with the initial print run, you can record the print status of your payment documents. If, after printing has been submitted, you discover printing problems and wish to reprint particular payment documents or even the complete payment instructions, you can reprint: • individual payment documents • ranges of payment documents • the complete payment instruction

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Recording Print Status of Prenumbered Payment Documents

Document Number

12014-12016

12017-12018

Status

Printed

Spoiled

Restart Batch
Document Number: 12019

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Marking Payments Complete

When printed and electronic payments are complete, source products are notified so they can perform any necessary accounting actions. Printed and electronic payments are considered complete as follows: • Printed payments are complete when payment documents are recorded as Printed. • Electronic payments are automatically or manually marked complete at points specified during the setup of payment process profiles.

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Recording Stop Payment Requests in Payments Manager

Contact Bank Request Stop Payment

Yes Release Stop Payment

Bank Confirms Cleared Void Payment Payment? No and Confirm Record Stop Query Payment Stop Payment Payment Request

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Voiding Payments in Payments Manager

Record Voided Payment Query Payment Click Void Icon Confirm Success of Stop Payment

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Finding and Reviewing Payments
In the Payment Overview window: – query a payment – review the status of a payment and its related high-level information

Payment Workbench

Invoice Workbench

The Payment Overview window is helpful for reviewing the status of a payment quickly and is a bridge between the Payment Workbench and the Invoice Workbench.

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Updating Payments Using the Payment Window

You can use the Payments window to: • adjust selected invoices for Manual payments • update Manual payment addresses You cannot perform the following update payment actions: • adjust a Manual payment used to pay a prepayment that was applied to an invoice • make any changes to cleared or voided payments • make adjustments to selected invoices on matured bills payable if accounting exists for the maturity event

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Processing Refunds
When a supplier or employee sends you a refund for an invoice payment you have made, you can record the refund. A refund closes an outstanding credit balance, so you are actually making a negative payment for a credit balance. The credit balance can consist of the outstanding balance of any combination of the following documents, as long as the sum is negative and equals the refund amount: • Invoices • Debit memos • Credit memos • Expense report

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Entering Refunds

The Payments window is used to record a refund payment for one or more outstanding Payables documents. This enables you to close an open credit balance and maintain a full transaction history for the supplier.

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Recording Refunds for Invoices When a Credit Balance Exists
You pay debit balance with refunds in the Payments window. If you know the credit or debit memo you want to pay, you can query it in the Invoices window, select the Scheduled Payments tab, and then choose the Pay button.

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Refunds for Prepayments

You may receive refunds from suppliers for prepayments you have made to them, such as a refund for a deposit or repayment of a travel advance. If you receive a refund for a prepayment, enter an invoice and apply the prepayment to it. Enter a debit memo for the invoice. You can then pay the debit memo with the refund.

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Voiding Refunds

You can void a recorded refund just as you void any other payment. Select the refund in the Payments window, choose the Actions button, and use the Void option in the Payment Actions window. You can then re–enter the refund and pay any open invoices or prepayments for the supplier.

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Canceling Payment Process Requests in the Payments Manager

In the Payment Process Request: Selected Scheduled Payments page, click the Terminate Request button.

You can cancel a request for invoice selection by taking one of these actions in the Payment Process Requests tab of the Payments Manager.

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Bills Payable Overview

Formerly known as a future dated payment, bills payable instruct your bank to disburse funds to your supplier's bank on a specific date, known as the maturity date.

You can use bills payable to: – control the timing
of your payments

– control cash flow

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Setting Up Bills Payable
To use bills payable in Payables, you must perform the following setups:

Funds Disbursement Payment Method Setup

Payment Process Profile Setup

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Prepayments Overview

A prepayment is a type of invoice you enter to make an advance payment to a supplier or employee. For example, you need to pay a deposit on a lease, or pay an employee an advance for travel expenses. You can later apply the prepayment to one or more invoices or expense reports you receive from the supplier or employee to offset the amount paid to them.

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Entering Prepayments

You can enter a Prepayment type invoice only in the Invoices window. You cannot enter a Prepayment type invoice in the Quick Invoices window.

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Applying and Releasing Holds on Prepayments

To prevent payment of a prepayment, you can apply one or more holds to the prepayment or you can hold the scheduled payment. You apply these holds as you would for any other invoice. You release holds from a prepayment just as you would for any other invoice.

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Applying Prepayments to Invoices and Expense Reports
You can apply the available amount of Item type distributions from a Temporary type prepayment to one or more invoices to offset the amount you pay on the invoices.

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Canceling Prepayments

You can cancel prepayments if one of the following is true: • they have not been paid • they have not been applied to invoices To cancel an applied prepayment, you must: • unapply the prepayment • void the payment document that paid the prepayment

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Reconciling Payments with Cash Management

With Oracle Cash Management, you can reconcile payments created in Payables to your bank statements. When you reconcile payments using Oracle Cash Management, Cash Management updates the status of payments to Reconciled.

Oracle Cash Management
Reconciles payments from Payables. Updates status of reconciled payments.
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Clearing Restrictions

Oracle Cash Management cannot clear bills payable that have a payment status of Issued. Oracle Cash Management clears bills payable only if the payment status is Negotiable. On or after the maturity date of the payment, you can update the status to Negotiable.

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Reports
Bank Account Listing Cash Requirement Report Discounts Available Report

Discounts Taken and Lost Report
Final Payment Register Payment Audit by Voucher Number

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Reports (continued)

Payment Exceptions Report Payment Gain & Loss Report Payment Register

Positive Pay File
Payment Process Request Status Report

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Reports (continued)
Separate Remittance Advice Stop Payments Report Supplier Payment History

Unclaimed Property Report
Void Payment Register

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Key Payables System Setup Options

The key Payables system setup options include the following in the Payment region of the Supplier tab.

– Pay Group – Terms Date Basis – Pay Date Basis – Payment Terms – Always Take Discount – Create Interest Invoices

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Key Payables Setup Options

The key Payables setup options include the following in the Single Payment region of the Payment tab: • Allow Pre-Date • Allow Void and Reissue • Allow Address Change

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Payment Terms

Payment terms are defined to: • assign them to an invoice to automatically create scheduled payments when you submit Invoice Validation for the invoice • create multiple scheduled payment lines and multiple levels of discounts

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Key Lookup Codes

DONT PAY REASON

PAY GROUP

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Setting Up XML Publisher Formatting Templates

The system uses Oracle XML Publisher formatting templates to format payment instructions. Oracle XML Publisher: • provides ready-to-use formatting templates • enables you to configure your own formatting templates The purpose of setting up formatting templates is to: • enable the system to use the formatting templates to format payment instructions

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Setting Up Payment Formats
A payment format is an entity that associates the XML Publisher Template with the payment process. The purpose of setting up payment formats is to: • assign validation sets • associate each payment format with an XML Publisher formatting template The system provides one payment format for each of the formatting templates in Oracle XML Publisher.

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Setting Up Transmission Configurations

A transmission configuration: • implements a specific transmission protocol • enables the delivery of a transaction to a specific payment system or financial institution This setup is only required for sending: • electronic payments to a payment system • positive pay files

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Setting Up Payment Systems

A payment system is an organization that provides financial settlement services, such as a: • bank at which the deploying company has its bank accounts • third party processor that connects deploying companies with financial institutions

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Setting Up Funds Disbursement Payment Methods
A funds disbursement payment method is a medium by which the deploying company makes a payment to one or more suppliers. Payments supports the following payment methods for funds disbursement:
Payment Methods
– – Checks – – Outsourced

Checks

– Electronic Funds Transfer

– Wire

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Setting Up Payment Method Defaulting Rules

Payment method defaulting rules determine how payment methods default onto a document payable, such as an invoice. A payment method defaults onto an invoice when all specified conditions are met.
Payment method rules

Applies to invoice

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Setting Up Payment Process Profiles

A payment process profile is a blueprint assigned to documents payable, which specifies: • all the rules for creating and disbursing payments • how payments are processed • instructions for payment formatting and transmission The purpose of setting up payment process profiles is to specify the details of the payment process.

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Setting Up Disbursement System Options

Disbursement system options are system-wide payment options that control disbursements made by the deploying company to suppliers. Payables provides two levels of system options: Levels of System Options
• • Enterprise level Organization level

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Additional Implementation Considerations

Additional implementation considerations include: • Managing Cash Requirements • Internal Controls for Payment Processing • Integration Partners

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Managing Cash Requirements

• Run Cash Requirement Report • Narrow Selection of Invoices in Pay Run

Payment Selection Criteria Name Pay Through Date (current date Feb-5) Payment Priorities High/Low Include Only Due

Original Payment Selection Criteria Feb-25 None No Max Outlay $5M Max Pmt $500K

Revised Payment Selection Criteria Feb-15 1-5 Yes Max Outlay $2.5M Max Pmt $300K

Payment Limits

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Internal Controls for Payment Processing

Proper Segregation of Duties

Enter Suppliers Approve POs

Import/ Enter Invoices

Sign Checks Process Payments Mail Payments

Reconcile Cash Account

Credentials of Payment Processing Staff

Physical Security

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Summary

In this lesson, you should have learned how to: • Describe the payment process • Set up banks and bank accounts • Enter single payments • Process multiple payments • Review and adjust payments • Set up and create bills payable • Create, apply, and release holds on prepayments

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Summary

• • • •

Reconcile payments with Oracle Cash Management Use key standard reports Understand key setup options Understand additional implementation considerations

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Expense Reports and Credit Cards

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Objectives

After completing this module, you should be able to do the following: • Describe the expense report process • Enter expense report templates • Enter expense reports • Apply advances • Identify key expense related reports • Set up credit card programs

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Expense Reports

An Expense Report is an invoice representing an amount due to an employee for business-related expenses.

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Internet Expenses Overview
Oracle Internet Expenses is a self-service application for employees to manage expense reports online

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Internet Expenses Overview
Oracle Internet Expenses is a tool that helps meet top management goals.
Controls cost and errors

Streamlines expense reporting

Improves employee productivity

Accessible anywhere

Enforces policies/ statutory regulations compliance

Advantages of Using Oracle Internet Expenses
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Expense Reporting Process
Employee creates expense report Approved: Accounts Creates payment; Payables Manager notifies employee department approves report approves report

Payables

Internet Expenses Rejected: Adjusted: Workflow notifies Creates payment; employee notifies employee
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Entering Expense Reports
You can enter expense reports in these products:

Oracle Payables

Oracle Internet Expenses

Expense Reports Window

Invoices Window

Web

Spreadsheet

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Entering Project-Related Expense Reports

Enter Project-Related Expense Reports in the Invoices Window

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Expense Report Export Program

Converts expense reports created in the following applications into Payables invoices:
• •

Payables Internet Expenses

Expense Report Export Program
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Expense Report Templates

You use the Expense Report Template window to define templates based on the expense report forms you regularly use in your enterprise. You can define default values for expense items, and you can then choose those items from a list of values when you enter expense reports.

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Expense Report Templates for Internet Expenses
If Internet Expenses is implemented, employees can enter expense reports using a standard Web browser. Only templates that have the Enable for Internet Expenses option enabled are available for use with Internet Expenses.

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Taxes on Expense Reports

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

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Entering Foreign Currency Expense Reports
Foreign currency expense reports are subject to the same system requirements as foreign currency invoices. You can only apply advances (prepayments) that have the same currency as the expense report.

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Applying Holds to Expense Reports

At any time before you submit Expense Report Export for an expense report, you can apply a single User– defined hold to an expense report. This prevents payment of the invoice Payables creates from the expense report. Subledger accounting entries are not created if you select a hold that prevents accounting.

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Applying Advances Against Expense Reports
You can pay an employee an advance (prepayment) and later apply the advance against an expense report to reduce the amount you pay for an expense report.

Expense Report $1500 $500 Travel Advance
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$1000 Unpaid Balance

Modifying and Reviewing Existing Expense Reports
You can review and modify Payables expense reports in the Expense Reports window or the Invoices window. If you have successfully exported an expense report using Expense Report Export, then you can view it but you cannot modify it. Use the Audit module in Internet Expenses to review Internet Expenses expense reports

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Paying Expense Reports

Payables will pay invoices only. Submit the Expense Report Export program to have Payables create invoices from expense reports. You can then create payments for the invoices.

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Procurement Cards

Procurement cards allow qualified employees to purchase items directly from suppliers. You can use procurement cards to streamline your Procure-to-Pay process, reduce transaction costs, and eliminate low-amount invoices.

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Procurement Card Process
Validate and Verify Procurement Card Transactions Send for Management Approval Approved: Create invoices; ready for validation and payment

Load AP_EXPENSE_FEED _LINES_ALL Rejected: Workflow notifies employee

Adjusted: Create invoices; ready for validation and payment

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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.

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Code Sets Window

You use the Code Sets window to define sets of credit card codes for your procurement cards. Payables uses these codes to create default accounting distributions for transactions that you import from your credit card issuer.

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Card Programs Window

You use this window to define your credit card programs for each card issuer. You define the supplier and supplier site for your card program. You also specify which transaction statuses to exclude when you automatically create an invoice for your card issuer.

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GL Account Sets Window

You use the GL Account Sets window to create a list of values of GL accounts that your employees can use to correct account information for their procurement card transactions, if you allow your procurement card holders to update transaction accounts.

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Profiles Window

You use this window to define profiles for the various types and levels of spending you allow for procurement card holders. You assign a credit card profile to each card that you assign to a card holder.

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Credit Cards Window

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.

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Summary

In this module, you should have learned how to: • Describe the expense report process • Enter expense report templates • Enter expense reports • Apply advances • Identify key expense related reports • Set up credit card programs

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Period Close

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Objectives

After completing this module you should be able to do the following: • Describe the period closing process in Payables and Purchasing • Reconcile accounts payable transactions for the period • Identify key programs and reports • Understand setup options • Understand additional implementation considerations

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Key Processes

Create Accounting Final Subledger Accounting

Transfer to GL GL Interface Import to GL Post in GL

Payables Create Accounting Draft

Distributions

Accounting Details

Review/Correct Accounting

Oracle Assets, Projects, Procurement, Inventory
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General Ledger

Overview of the Period Close

Prepare for period close

Run Validation/ Review and resolve holds

Create accounting Transfer & review unaccounted transactions

Close the GL period

Reconcile AP activity for the period

Post journal entries in GL

Close the period

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Prepare for Period Close

• • • • • •

Complete all receipt processing Confirm or cancel all pending pay runs Update matured bills payable Import invoices Export and process expense reports Interface adjustments to supplier invoices and expense reports • Reconcile bank statements

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Run Validation/Review and Resolve Holds

Run the Invoice Validation Process

Resolve Invoice Holds

Rerun Validation if Necessary

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Create Subledger Accounting

Enter an Invoice

Make a Payment

Create Accounting

View Accounting

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Create Accounting Program

The Create Accounting program processes eligible accounting events to create subledger journal entries. The program applies the application accounting definitions that are created in the Accounting Methods Builder (AMB). The following report is generated by this program: • Oracle Subledger Accounting Program Report

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Transfer and Review

Run Transfer Journals to General Ledger

Review Transfer Results

Review Account Analysis Report

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Transfer Journal Entries to GL Program

The Transfer Journal Entries to GL program enables you to transfer any eligible journal entries to General Ledger, including those from previous batch runs that have not yet been transferred to General Ledger. The following report is generated by this program: • Transfer to Journal Entries to GL Report

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Post Journal Entries in GL

Post Journals in GL

Create Remaining Mass Additions

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Reconcile AP to GL

March Accounts Payable Trial Balance + April Payables Posted Invoice Register - April Payables Posted Payment Register - April Accounts Payable Trial Balance =0

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Close the AP Period

Period Close Exceptions

Close the AP Period

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Close the PO Period

Close the purchasing period

Write off accrued transactions as necessary

Review the Uninvoiced Receipts report

Process remaining inventory transactions

Process period-end accruals

Run the Accrual reports

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Key Accounts

• • • • • • • •

Receiving Inventory Account Inventory AP Accrual AP Liability Expense AP Accrual Material Charge Account Purchase Price Variance Invoice Price Variance

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Accrual Accounting – Perpetual Accrual (On Receipt)
Receiving Inventory Acct Inventory AP Accrual Material AP Liability Expense/ Clearing

01-000-1412 01-000-2221 01-000-1410 01-000-2210 01-000-1570

100 100

100 100

1 2 3 4

100

100

5
-0-

-0-

-0-

100

100

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Accrual Accounting – Periodic Accrual (Period End)
Receiving Inventory Acct Expense AP Accrual Material AP Liability Expense/ Clearing

01-000-1412 01-000-2221 01-000-1410 01-000-2210 01-000-1570

1 2 3
200 200 200 200 200 200

4

5
6

-0-

-0-

-0-

200

200

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Accounting for Mass Additions – Periodic Accrual (Period End)
Expense AP Accrual
01-000-2221

Asset Cost

AP Liability

Expense/ Clearing 01-000-1570

01-000-1560

01-000-2210

1 2
200 200 200 200 200 200 200 200

3 4

5
6
-0-

-0-

200

200

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Accounting for Payments with Cash in Transit (Cash Clearing)
Cash Cash in Transit 01-000-1150 AP Liability Expense/ Clearing/ Accrual 01-000-1570

01-000-1110

01-000-2210

400 400 400 400 400

400

1 2 3

400

-0-

-0-

400

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Accounting for Payments without Cash in Transit (Cash Clearing)
Cash Cash in Transit 01-000-1150 AP Liability Expense/ Clearing/ Accrual 01-000-1570

01-000-1110

01-000-2210

400 400 400

400

1 2

400

-0-

400

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Reports

Accounts Payable Trial Balance Accrual Rebuild Reconciliation Report

Accrual Write-Off Report
Matched and Modified Receipts Report Account Analysis Report

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Reports

Payables Posted Invoice Register

Payables Posted Payment Register
Receipt Accruals - Period End Receiving Account Distribution Report

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Reports

Unaccounted Transactions Report Uninvoiced Receipts Report

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Financials Options
Accounting Future Periods Liability Prepayment Future Dated Discount Taken PO Rate Variance Gain/Loss Expenses Clearing Miscellaneous Retainage

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Payables Options
Accounting Account for Payment Account for Gain/Loss Automatic Offset Method

Interest
Prepayment Account

Discount Method

Future Dated Payment Account Source

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Payables Options: Currency
Currency Use Multiple Currencies Require Exchange Rate Entry Calculate User Exchange Rate Exchange Rate Type GL Accounts: –Realized Gain –Realized Loss –Rounding

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Purchasing Options
Receipt Accounting Accrue Expense Items
Accrue Inventory Items Expense AP Accrual Account

Automatic Offset Method

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Additional Implementation Considerations

• • • •

Running the Invoice Validation process Running the Create Accounting process Level of detail for Create Accounting process Running the Transfer Journal Entries to GL process • Determine number of clearing accounts to use for projects, assets, and cash management

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Summary

You should now be able to do the following: • Describe the period closing process in Payables and Purchasing • Reconcile accounts payable transactions for the period • Identify key programs and reports • Understand setup options • Understand additional implementation considerations

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Withholding Tax

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Objectives

After completing this module, you should be able to do the following: • Identify the withholding tax process • Use withholding tax options • Process manual withholding tax invoices • Create withholding tax invoices • Process automatic withholding tax invoices • Identify standard key reports

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Withholding Tax Overview

You may be required to withhold taxes from your employee expense reports and supplier invoices. Once you set up Payables to automatically withhold tax, you can withhold tax either during Invoice Validation or during payment processing. You can control all withholding tax options in the Withholding Tax region of the Payables Options window.

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Setting Up Withholding Tax (Optional)

You may want to customize Automatic Withholding Tax (AWT) to perform special behavior based on your local requirements.

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Withholding Tax Payables Options Use Withholding Tax
Select the Use Withholding Tax option to enable Automatic Withholding Tax. If you enable this option, you have the option to allow your suppliers and supplier sites to be subject to withholding tax.

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Defining Tax Codes for Withholding Taxes

Payables provides flexibility in defining withholding tax rates with specific controls. 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

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Withholding Tax Groups

You use this window to define withholding tax groups that include multiple Withholding Tax type tax codes. You can assign the same tax code to more than one group. When you assign a withholding tax group to an invoice or distribution, Payables calculates invoice withholding tax based on every tax code in the withholding tax group.

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Withholding Tax Certificates and Exceptions

You use the Withholding Tax Certificates and Exceptions window to define Withholding Tax type tax code rate exceptions for a supplier site.

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Withholding Taxes for Suppliers

You enable withholding taxes for a supplier and supplier sites in the Tax Details region of the Suppliers page. Select Allow Withholding Tax option if you want to enable withholding for a supplier or supplier site, and select a default Withholding Tax Group that Payables will default to all invoices you enter for the supplier or supplier site.

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Tax Details for Suppliers and Supplier Sites

You use the Tax Details region to enter withholding tax information for a supplier and supplier site. If your Use Withholding Tax Payables option is not enabled, you will not be able to enable the Allow Withholding option. The options you select for a supplier default to the new supplier sites you enter, then default to invoices you enter for that site.

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Withholding Taxes from Recurring Invoices

To withhold taxes from a recurring invoice: • When you define a recurring invoice template, enter the Withholding Tax Group. This group will be applied to all invoices you create for that template.

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Withholding Tax When Applying Prepayments

If you use automatic withholding tax, Payables creates the correct withholding tax lines and distributions. If your Withholding Tax Payables option is set to Apply Withholding Tax at Invoice Validation Time, then you might want to time the entry of the prepayment application before the invoice is validated.

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Creating Withholding Tax Invoices

After you apply withholding tax to an invoice, you can optionally create invoices to remit withheld tax to the tax authority.

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Projected Withholding Tax

You use the Projected Withholding Tax window to review projected withholding tax invoice distributions for an invoice. Payables creates one Withholding Tax type invoice distribution for each Withholding Tax type tax code per withholding tax group assigned to an invoice distribution. Information in this window is display only.

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View Period–To–Date Withheld Amounts

You use this window to review period–to–date withheld amounts for a Withholding Tax type tax code for a supplier. You can review the amount subject to withholding and the period–to–date withheld amount. This window shows automatically withheld amounts, and does not show amounts that you withhold manually.

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Withholding Tax Reports

Payables provides the following income tax forms and reports:
Withholding Tax By Invoice Report Withholding Tax By Payment Report Withholding Tax By Tax Authority Report Withholding Tax By Supplier Report Withholding Tax Certificate Listing Withholding Tax Letter Withholding Tax Report

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Withholding Tax By Invoice Report

You use the Withholding Tax By Invoice Report to review detailed invoice withholding tax information for a supplier, including invoice number, amount subject to withholding, and tax amounts withheld.

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Withholding Tax By Payment Report

You use the Withholding Tax By Payment Report to review detailed invoice withholding tax information for a supplier, including invoice number, amount subject to withholding, and tax amounts withheld.

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Withholding Tax By Tax Authority Report

You use the Withholding Tax By Tax Authority Report to review detailed withholding tax information for Withholding Tax type tax codes assigned to a Tax Authority type supplier.

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Withholding Tax By Supplier Report

You use the Withholding Tax By Supplier Report to review detailed invoice withholding tax information for a supplier, including invoice number, amount subject to withholding, and tax amounts withheld.

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Withholding Tax Certificate Listing

You use the Withholding Tax Certificate Listing to review withholding tax certificates for a supplier or all suppliers.

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Withholding Tax Letter

You use this report to create a withholding tax letter to mail to your suppliers on a periodic basis. This letter contains a list of withholdings made for a supplier, summarized either by tax type and tax rate or by supplier site.

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Withholding Tax Report

You use this report to create a withholding tax report for your company’s internal reporting needs. This report contains a list of withholdings made on behalf of your suppliers, summarized either by tax type and tax rate or by supplier site, and grouped by supplier.

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Summary

In this module, you should have learned how to: • Identify the withholding tax process • Use withholding tax options • Process manual withholding tax invoices • Create withholding tax invoices • Process automatic withholding tax invoices • Identify standard key reports

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R12 Oracle Payables Management Fundamentals

Practices

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Advances and Progressive Contract Financing

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Objectives

After completing this module, you should be able to: • Describe the purpose of complex service contracts • Identify advances, contract financing and progress payment invoices • Calculate retainage • Recoup prepaided amounts for complex service contract

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Advances and Progressive Contract Financing
Oracle Projects

Cost Collection

Budget / Deliverables Request for Services Procurement for Complex Services

Retainage Release
Oracle Payables

Negotiate

Invoice / Payments Track Progress

Control
Advanced Procurement

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Advances and Contract Financing
iSupplier Portal: Invoice Request is approved; Prepayment Invoice created

Purchase Order/ Contract for Services: $1,000,000

Supplier requests prepayment: $50,000

Additional approvals ?

Invoice is validated; Payment Issued

Payables: Prepayment Invoice Entered
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Progress Payments

Approved
Advance Resurface Lot Road Work Landscape Final Painting 200,000 500,000 250,000 50,000 1,000,000

Billed

Advance/ Retained Recoupment 50,000

200,000 500,000 250,000 50,000 1,000,000

<20,000> <50,000> <25,000> < 5,000> <100,000>

<50,000>

0

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Entering Advances and Contract Financing Invoices
An advance prepayment invoice is not matched for an advance, since an advance is paid once before any work commences and is not based on performance. A contract financing prepayment invoice is matched to pay items (shipments).

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Tolerances and Holds on Advances and Contract Financing
During validation, invoices are checked for: • Quantity-based tolerances for goods procurement • Amount-based tolerances for services procurement • Milestone holds • Matching holds

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Work Confirmation

A work confirmation confirms that work was delivered by a certain supplier at a specific price on a specific date as specified by a specific work confirmation number, which is associated with a purchase order number.

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Funds Checking and Encumbrance for Advances and Contract Financing
If Budgetary Control is enabled, the system verifies that sufficient funds are available to pay an invoice. If Encumbrances is also enabled, Purchasing and Payables create encumbrances and encumbrance reversals against the budgets defined in Oracle General Ledger.

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Taxes for Complex Service Contract Invoices
Invoice Type
Prepayments

Invoice Purpose
Advance

Tax Calculation Based On
Invoice Amount, based on Tax Rules for Advances Invoice Amount, based on Tax Rules for Contract Financing Invoice Amount, Net of Retainage Invoice Amount Retained Amount, based on Tax Drivers on Original Invoice

Contract Financing (Progress Payment) Standard Progress Payment Final Delivery Retainage Release Release Retained Amounts

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Retainage Amount for Complex Service Contracts

Retainage is the act of withholding a portion of a payment until a substantial portion or all of the work is completed.

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Retainage Lines for Complex Service Contracts

The retainage information for each pay item is stored in the Retained Amount field for the matched invoice line. The system creates negative retainage distributions prorated to the item distributions.

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Retainage Release for Complex Service Contracts

Once the release criteria are met, suppliers request a release of the retained amount .

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Recouping Advances and Contract Financing Payments
Recoupment is the automatic process of recovering prepaid amounts when invoicing for progress or for the final delivery of goods or services, based on specific terms specified in the services procurement contract.

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Recoupment Amounts

Recoupment amounts are automatically calculated for every progress payment invoice line that is matched to a service procurement purchase order delivery pay item or shipment. Recoupment amounts are based on the total available amount of the financed pay items or shipments for the contract line item.

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Summary

In this module, you should have learned how to: • Describe the purpose of complex service contracts • Identify advances, contract financing and progress payment invoices • Calculate retainage • Recoup prepaided amounts for complex service contract

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Transaction Taxes in Payables

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Objectives

After completing this module, you should be able to: • Describe how transaction taxes are calculated for invoices • Insert manual tax lines and update transaction tax lines • View tax summary and details • Identify key reports • Understand set up options

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Overview of Transaction Taxes in Payables

Payables leverages E-Business tax to setup, calculate, and manage transaction taxes such as: • Sales • VAT • Excise • Customs Duty • Environmental • Offset • Recoverable Tax

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Overview of Tax Calculation on Invoices
Recalculate Taxes

Enter Invoice

Click Calculate Tax

View Tax Change Tax Lines and Driver Distributions

Validate Invoice

Calculates Tax Calculates Tax E-Business Tax

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Viewing Tax Amounts on Invoices

Invoice Header

Total Tax Self Assessed Tax

Invoice Lines

Exclusive Tax Inclusive Tax

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Working with Transaction Taxes in Payables

Enter manual tax lines

Update tax lines

Employ taxes with deferred recoverability

Exclude tax from discounts

Self-assess taxes

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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)

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Entering Manual Tax Lines

To manually enter tax details for Item, Freight, Miscellaneous, or Prepayment lines, complete the following fields: • Tax regime • Tax • Tax status • Tax rate • Tax amount • Place of supply (supplier site)

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Entering Tax Only Lines

If you are entering a Tax Only line on an invoice: • Ensure that line Type = Tax • Enter the tax amount in the Amount field, not the Tax Amount field • Complete all of the fields required for manual tax lines, plus these additional fields:
– GL date – Tax jurisdiction

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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

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Updating Tax Lines

You can update the following fields for calculated tax lines: • Tax Status • Tax Jurisdiction • Tax Rate • Tax Amount • Percentage Rate or Quantity Rate • Self Assessed option • Inclusive option

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Exclude Tax from Discounts

To exclude tax from discounts, enable the Exclude Tax From Discount Calculation Payables Option

Invoice Amount
-Total Tax Amount

Discountable Invoice Amount

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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

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Taxes with Deferred Recoverability

Level

Allow Tax Recovery

Default Recovery Settlement Deferred Deferred

Tax Accounts

Regime Tax

•Tax Expense •Recoverable Tax •Interim Tax (used for Accrual Based accounting only)

Tax Status Tax Rate

Deferred Deferred

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Taxes with Deferred Recoverability

Item Expense Liability Recoverable Tax Non-Recoverable Tax

DR 1000.00 55.00 45.00

CR 1100.00

Once the invoice is paid, the deferred recoverable tax amount, 55.00, is credited and debited to the Deferred Recoverable Tax account.
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Considerations for Taxes on Prepayments

To calculate taxes on Prepayment Invoices, enable the following option for the Prepayment event class: • Allow Tax Applicability Tax calculation is affected by how the Applied Amount Handling option is set up. You can set this option as: • Recalculated • Prorate

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Tax Variances

• • • •

Tax Exchange Rate Variance (TERV) Tax Invoice Price Tax Rate Variance (TIPV) Tax Rate Variance (TRV) Tax Quantity Variance (TQV)

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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 TaxRelated Hold is applied during Invoice Validation

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Tax Lines Summary and Tax Details
You can use the Tax Lines Summary and Tax Details windows to view, enter, and change the tax lines and distributions for an invoice.

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Tax Distributions and Allocations

Use the Tax Distributions window to review and update tax distributions. You can review tax distributions and, if applicable, update the tax recovery rate on a tax distribution.

Use the Allocate Summary Tax Lines page to review and allocate your manual summary tax lines to specific transaction lines.

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Tax Amount Verification During Invoice Validation

During Invoice Validation, E-Business Tax automatically verifies that you have correctly entered all tax drivers on an invoice. If tax exceptions exist, one or more tax holds are placed on the invoice.

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Setting Up Taxes in E-Business Tax

Tax Authority

Tax Regime

Tax

Tax Jurisdiction

Tax Status OU Tax Accounts

Tax Rate

Recovery Rate

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US Sales Tax Example

Tax Regime CA Sales Tax

Tax

Tax Jurisdiction

Tax Status

Tax Rate

Operating Unit Tax Account

State California Sales Tax State Sales Tax

Standard 7.25% 01.005.004.033

County San Mateo Sales Tax County Sales Tax
City Belmont City Sales Tax Sales Tax

Standard 1.0%

01.005.004.033

Standard 0.0%

01.005.004.033

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UK VAT Example

Tax Regime UK VAT

Tax UK VAT

Tax Tax Status Tax Rate Jurisdiction UK VAT Standard Inter-EU 17.5% 15%

Recovery Rate 100% 100%

Reduced

5.0%

100%

Zero Rated 0.0% Exempt 0.0%

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Offset Taxes

Existing Oracle Payables implementations that use Offset Taxes can setup and manage Offset Taxes in E-Business Tax. • Ensure that the Set as Offset Tax option is enabled for the tax. For new taxes and new implementations, use E-Business Tax’s Self Assessed tax feature instead.

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Setting Up Tax for Suppliers

Party Tax Profile
Main Information Tax Registrations Classifications

Third Party – Suppliers

Tax Reporting Codes Account Tax Details (migrated data only)

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Suppliers Subject to Income Tax Reporting
To define a supplier as subject to income tax reporting requirements: • Enter a Taxpayer ID • Enable the Federal option and select an Income Tax Type (1099 MISC Type). • Enable the State option, if applicable • Enable the Allow Withholding Tax option

If you enter a purchase order for a 1099 supplier, then Oracle Purchasing retains the Income Tax Type information at the purchase order line level.

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Financials Options
Tax Member State VAT Registration Number

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Payables Options: Payment
Payment Exclude Tax from Discount

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Summary

In this module, you should have learned how to: • Describe how transaction taxes are calculated for invoices • Insert manual tax lines and update transaction tax lines • View tax summary and details • Identify key reports • Understand set up options

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1099 Reporting

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Objectives

After completing this module, you should be able to: • Describe how to enable 1099 suppliers • Enter invoices for 1099 suppliers • Update 1099 information • Understand 1099 reporting • Understand 1099 set up options • Understand additional implementation considerations

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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.

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Suppliers Subject to Income Tax Reporting Requirements
To define a supplier as subject to income tax reporting requirements: • Enter a Taxpayer ID • Enable the Federal option and select an Income Tax Type (1099 MISC Type). • Enable the State option, if applicable • Enable the Allow Withholding Tax option

If you enter a purchase order for a 1099 supplier, then Oracle Purchasing retains the Income Tax Type information at the purchase order line level.

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Federal Region

Reportable to the United States Internal Revenue Service for 1099 purposes. In the United States, you must report to the Internal Revenue Service certain types of payments you make to 1099 reportable suppliers.

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Income Tax Type Region

Income tax type for a United States 1099 reportable supplier. You choose from a list of 1099 Miscellaneous Tax types. Purchasing retains the Income Tax Type at the purchase order line level for a supplier’s purchase orders.

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State Region

You enable this option if you participate in the United States Internal Revenue Service Combined Filing Program and the supplier is reportable to a state taxing authority. Payables uses this status for reporting purposes only.

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Reporting Name Region
Tax reporting name for a supplier subject to United States Internal Revenue Service (IRS) income tax reporting requirements. Required only if the tax reporting name for the supplier is different from the supplier name. In accordance with IRS requirements, Payables prints this name, instead of the supplier name, on all 1099 reports for the supplier.

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Reporting Site Region

This reporting supplier site’s address is printed on the 1099 form and included in the 1099 Electronic Media report. Payables displays the income tax reporting site for the supplier if you have already defined a supplier site as the tax reporting site in the Tax Reporting region in the Supplier Sites window.

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Updating 1099 Information

You can update 1099 information for your suppliers. If you paid a supplier before you set up the supplier as a 1099 supplier, run the Update Income Tax Details Utility. Or, if you need to update only a few invoices, you can update the 1099 types in the Lines tab

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Recording a Refund From a One–Time 1099 Supplier
If you get a refund from a one–time 1099 supplier, you need to record the refund in Payables so that the 1099 reports are accurate. Enter a credit memo that you match to the original invoice.

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1099 Reporting

1096 Form 1099 Forms 1099 Invoice Exceptions Report 1099 Payments Report 1099 Electronic Media

1099 Supplier Exceptions Report
Tax Information Verification Letter

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1096 Form

The United States Internal Revenue Service requires that you send a 1096 form as a summary of each 1099 form type you transmit on paper. Payables generates the report on a preformatted form from the Internal Revenue Service.

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1099 Reporting Overview

In the United States, you must report to the Internal Revenue Service certain types of payments you make to 1099 reportable suppliers. In the supplier window, you can designate suppliers as federally reportable.

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1099 Forms

1099 forms report on the total 1099 MISC payments for a particular 1099 supplier. You generate 1099 forms for each tax reporting entity in your organization. You can use either of the 1099 Forms reports in Payables: • 1099 Forms report • 1099 Forms—Comma Delimited Format report

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1099 Invoice Exceptions Report

You use the 1099 Invoice Exceptions Report to review paid invoice distributions with inaccurate or missing 1099 income tax information.

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1099 Payments Report

You use this report to review payments made to your 1099 reportable suppliers. You can use this report to reconcile to your 1099 Forms, or to prepare additional reporting.

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1099 Electronic Media

You submit the 1099 Electronic Media report to generate your summarized 1099 information in electronic format as required by the Internal Revenue Service. You can create this file in a format to either send electronically or store on a diskette or magnetic tape to send to the Internal Revenue Service.

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1099 Supplier Exceptions Report

You use the 1099 Supplier Exceptions Report to review suppliers with inaccurate or incomplete 1099 income tax information. You can run the 1099 Supplier Exceptions Report before you submit your 1099 reports to identify suppliers that Payables will treat as exceptions in your 1099 reports.

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Tax Information Verification Letter

This report generates the Tax Information Verification Letter, which requests a supplier to furnish or confirm tax information. Payables generates this standard letter for each supplier that meets the criteria you select. Payables does not generate this letter for suppliers with the Type set to Employee in the Suppliers window.

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Tax Allocation During Invoice Validation

E-Business Tax automatically creates the appropriate distributions and allocations for Tax lines when you validate the invoice.

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Tax Amount Verification During Invoice Validation

During Invoice Validation, E-Business Tax automatically verifies that you have correctly entered all tax drivers on an invoice. If tax exceptions exist, one or more tax holds are placed on the invoice.

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Payables Options: Tax Reporting
Tax Reporting Combined Filing Program Use Pay Site Tax Region

Income Tax Region

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Summary

In this module, you should have learned how to: • Describe how to enable 1099 suppliers • Enter invoices for 1099 suppliers • Update 1099 information • Understand 1099 reporting • Understand 1099 set up options • Understand additional implementation considerations

Copyright © 2007, Oracle. All rights reserved.

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