RELEASE 12 : PAYABLES

Trading Community Architecture

Agenda

Suppliers Banks Retainage Recoupment Payments Manager AP/AR Netting

Suppliers
In 11i Suppliers defined in AP. Supplier contacts replicated for each supplier site.

In R12

Supplier becomes as TCA Party. Suppliers Sites as TCA Party Site for each distinct address. Contacts for each supplier/address , it means Single supplier address and contact can be leveraged by multiple sites, for each OU A single change to an address can be seen instantly by all OUs No longer need to manually push updates across OUs.This can be best understood by the figure below.

Creating Supplier

Creating Supplier

Select

Click Apply to continue

Enter Header Level Info

Select Address book to Insert Site Address

New Address

Site Name

Click on Create to Create a new Supplier Bank A/c

Banks and Bank Details The Bank Account model in R12 provides a single access point for defining and managing internal bank accounts for Oracle Payables, Oracle Receivables, Oracle Payroll, Oracle Cash Management, and Oracle Treasury. A single Legal Entity is granted ownership of each internal bank account. One or more Organizations are granted usage rights.

Ownership of internal bank account Each Legal Entity is granted ownership for each internal bank account. For Granting Access to the Legal Entities log In to Sys Admin Go to User Management Responsibility Click on Roles & Role Inheritance

Give Required Information

Click on Go

Click on Update

Select

Click on Run Wizard

Select Add Legal Entities to Give access to Bank Accounts

Click on apply after Adding Legal Entities

Creating Bank and Bank Branches in Payables

Navigation for Defining Banks

Select

Select

Click on Create

Enter Bank information

Select

Click on Create to Add Address

Click on Apply to Save the informatio n entered

Click

Click Finish after entering contact info

Click on Create to enter a Contact info

Creating Bank Branches

Click on Bank Braches Tab

Create new Bank Branches

Enter Bank Name and Country

Click Continue

Enter Branch Information

Select Save and Next

Select Create to Fill Bank Branch Address

Enter Branch information

Click on Apply

Select

Click Finish after entering Contacts

Click on Create Contact to add Contact

Creating Bank Accounts

Navigation

Select

Create New Bank Accounts

Enter Bank And Branch Name

Click Continue

Enter your Legal Entity in Bank Account Owner

Select Next to Continue Note:- If Legal Entity Is not Granted Access at the Sys admin Level in User Management Responsibility, you can not View your Legal Entity in the above Bank Account Owner Field.

Select Save and Next to Continue

Enter Bank Account Information

Select Save and Next to Continue

Enter Required Information rest all are Optional

Select to Grant Access to Operating Units

Enter Account use and Operating Unit

Select Continue

Enter Payment Method and Category

Select Apply to continue

Click on Add Organization Access to Give bank account access to Multiple Operating Units

Click Save and Next to Continue

Select Finish to Save your work

Click on Create Contact to enter Contact info of Bank account

Select

Select the Bank Account

Select

Select Apply

Enter Required Information

Payment Doc got Created

Retainage and Retainage Release

Retainage is the common practice of withholding a fixed amount / percentage of payment until all work under a contract is complete and accepted. Retainage is also called retention or contractual withholds. At the end of the project or when agreed events have occurred, the supplier requests the amount retained and payment is made to release it. Retainage comes under Complex Payments

Contract with Subway

Contract amount 15,000, Retainage 20%

1. Stage 2. Stage 3. Stage Total AMT Invoice 8000 8000 4000 4000 3000 3000 15,000 Retain Amount 1600 800 600 3,000 Amount Paid 6400 3200 2400 12,000

Release the Retained Amount, Once an Agreed event Occurred by Retainage Release Invoice

Required Setups

Enter Retainage A/c in Financial Options

1. Navigate to Suppliers Window

3. Select

2. Select

4. Give Retainage Rate

Create Complex Service Agreement in Purchasing

Navigation

Select

Select Complex Service Agreement from list of Values

Click

Enter Supplier and Supplier Site

Go To

Enter Contract Amount

Click on Update

Enter Type as Fixed Price Services

Enter Contract Need by Date

Select

Enter Retainage Rate

Enter Charge Account

Select

Select Split to Split the Contract into Stages

After completion move to the Distributions Tab

Give the Need by Date

Enter Type as Lump Sum

Split the Contract amt

After Completion select Submit

Complex Service Agreement has been Approved. Agreement NO is- 5546

Navigate to Invoice Workbench to Raise Invoice

Enter the Agreement No

Enter the Invoice Amt

Match Invoice with the Agreement

Select the Match Amount

Click on Match after Selecting

10 percent of the Total amt got automatically got Retained

Go to Actions and Pay the Invoice

Out of 25,000 invoice amt 2,500 got retained and amount paid to Supplier is 22,500

Retainage Release
Select PO Number

Select Invoice Type as Retainage Release Go to Match and Match the Agreement

Enter Invoice Amt to be Released

Select The Po line to be Matched

Release the Amount

After Release go to Payment work Bench and Pay the Amount

Contract with Subway

Contract amount- 35000, Prepaid amount-7000 Recoupment Rate 20% Amount Stage 1 20,000 Stage 2 15000 Total 35,000 Invoice Prement Applied Amount paid 20,000 4,000 16,000 15,000 3,000 12,000 7,000 28,000

Select Complex Service Agreement from list of Values

Click

Enter Supplier and Supplier Site

Go To

Enter Contract Amount

Click on Update

Enter Type as Fixed Price Services

Enter Contract Need by Date

Select

Advance amount is Prepaid amt Paid to Supplier

Recoupment rate is 7000/35000*100

Select

After completion move to the Distributions Tab

Give the Need by Date

Enter Type as Lump Sum

Split the Contract amt

Give Prepaid Account

Click on

Complex Service Agreement has been Approved. Agreement NO is- 5547

Navigate to Invoice Workbench to Raise Prepaid Invoice

Enter the Agreement No

Enter the Invoice Amt

Match Invoice with the Agreement

Select the Match Amount

Click on Match after Selecting

After Matching Pay the Invoice

Raise a Standard invoice and match with Agreement

Enter the Agreement No

Enter the Invoice Amt

Match Invoice with the Agreement

Select the Match Amount

Click on Match after Selecting

Prepayment Automatically applied according to Recoupment Rate

Pay the Invoice

Total amount paid to Supplier is 20,000

Payments Manager
The Payments Manager enables you to complete a pay run from start to finish Payments. The Payments Manager is comprised of the following components: Payments Dashboard Templates Payment Process Requests Payment Instructions Payments

Creating Payments through Payment Manager

Navigation Select

Select

Select to create a new template

Enter Template Name

Enter Supplier Name

Select Pay group

After Completion click on Payment Attributes Tab

After Completion click on Process Automation Tab

Select Bank A/c and Exchange rate Type

View

Select Apply When Initiate Payment Process Request is complete is selected System will Automatically create Format for the Payments Selected

Go to

Select

Enter Request Name and Select Template from list of values Select User Rates Tab

Information gets defaulted from Template

Enter exchange rate

Select Submit Requests gets Generated

Report Gets Generated

Go back to

Query the Process Request

Click on

Click on submit Request gets generated

Select to Add or Remove Payments

3. Go to Payment Instructions Tab to complete the Payment

1. Query the Process Request

2. Status changes to Formatting

Query by Process Request Name and Creation Date

Select

Select Continue the Apply

Go to Query Process Request Name

Status got Confirmed

Navigate to Payments Overview to view Payments Made

AP/AR Netting
The Payables and Receivables Netting feature enables the automatic netting of Payable and Receivable transactions within a business enterprise. You can predefine a netting agreement that incorporates the netting business rules and transaction criteria needed to run your tailored netting process. The netting process automatically creates the Payables payments and Receivables receipts required to clear a selected number of Payables and Receivables transactions.

Prerequisites for AP/AR Netting Define a netting control account in GL. Define a netting bank account. Associate the bank account with the AP/AR Netting receipt class. Enable the Allow Payment of Unrelated Transactions Receivables System Option. Define Document Sequence for Receipts and Payments.

Defining Netting Agreement

Navigation

Select

Select

Enter Operating Unit And Agreement Name

Select Bank A/C name and Rules

Select Invoice and Transaction Types Once Finished Click on Next

Select Supplier and Customer

Select Finish to Complete

Creating Netting Batch

Navigation

Select

Select

Select the Required Information and give the Batch Name

Once Submitted go back to Netting Batch window and Query the Netting Batch

Once Finished Click on Submit

Status got Complete

Click on To View the Transactions Netted