Chapter 5

Payables

Overview
Oracle Payables is a high-productivity accounting solution that provides strong financial control, so you can prevent duplicate payments, pay for only the goods and services you order and receive, and maximize supplier discounts. Oracle Payables is part of Oracle Applications,™ an integrated suite of business solutions designed to support continuous process improvement for enterprises competing in time-critical markets.

Enter Supplier

Match to PO

Enter Invoice

Purchase Order

Invoice No Holds

Create PO Approve Invoice

Create Journal Entries
Requisition

Pay Invoice Enter Requisition

Reconcile Payments

Oracle Payables

Proactive Supplier Relations
Oracle Payables helps resolve business issues quickly by providing immediate and accurate responses to supplier inquiries. Record detailed information about your suppliers, including their purchasing, payment, and invoice processing preferences.

Automated Invoice Approvals
Oracle Payables supports two-, three-, and four-way matching of purchase orders, invoices, receipts, and requestor acceptance documents. All the information you need to authorize payments is on-line, eliminating the paper flow of purchase orders, invoices, receipts, and requestor documents. Approve invoices on-line during invoice entry or in batch.
2 Oracle Financials Functional Overview

Effective Payment Controls
Oracle Payables provides the information you need to make effective payment decisions. Stay in control of payments to suppliers and employees, and keep your accounting records up-to-date so you always know your cash position. Oracle Payables handles every form of payment, including automatic checks, manual payments, wire transfers, bank drafts, and electronic funds transfers. Oracle Payables integrates with Oracle Cash Management to support automatic or manual reconciliation of your payments with your bank statements.

Cash Requirements Management
Oracle Payables saves you money by forecasting your cash requirements and preventing duplicate and unauthorized payments. Analytical reports, as well as system, supplier, invoice, and payment batch options help you determine whether to take available discounts.

Oracle Payables

3

Key Features Multiple System Options • Customize to meet your needs: Accounting Flexfields Descriptive Flexfields Purchase Order Matching • • • Customize your payment calendar Choose from a variety of system options. bank accounts and contacts for each supplier Set up tax reporting and withholding Set limits for invoice amounts Access current balances on-line Hold payment to selected suppliers Automatically format addresses based on supplier’s country • • Process employee expense reports on-line or over the Web Route expense reports with Oracle Workflow Verify receipts and audit expense reports entered in Oracle Web Employees Payments • • Use Payment Workbench to design custom views of data for each user or workgroup Choose from a variety of payment methods. and exchange rate variances Set quantity and price tolerances Percentage-based Value-based Expenses • • • • • • • • • Suppliers Quickly enter suppliers with AutoEntry Record multiple addresses. including: Electronic payments Checks Wire transfers Bills of Exchange Clearing payments Invoices • • • • • • • • • • • Use Invoice Workbench to design custom views of data for each user or workgroup Record sales. and four-way purchase order matching Pay on receipt or advance shipment notice Use QuickMatch to automatically create invoice accounting Automatically record price. three-. and VAT with complete tax reporting Quickly enter invoices with AutoEntry Apply prepayments to invoices and expense reports Match credits to originating invoices Automatically generate recurring invoices Automatically check for duplicate invoices Import and validate invoices with Invoice Import Adjust distributions as needed Cancel invoices on demand Set payment terms: Proxima Split Multiple discounts • • • • • Create a fully EDI compliant outbound payment data file Choose from multiple payment formats including several laser printer compatible formats Create separate checks for selected invoices Stop and void payments Produce single checks on-line Payment Controls • Set payment controls by: Pay group Payment priority Payment method • Create partial payments • Perform on-line inquiries 4 Oracle Financials Functional Overview . quantity. including: Invoice batching Discount accounting Tax options Apply advances Require purchase order matching Automatic Withholding Sequential Numbering • • • • Perform two-. use.

• • Place holds on payments: By vendor By invoice User-defined holds • Specify separate closing status Choose from several accounting methods. purchase orders. & suppliers from your database Self-Service Access • • Supplier inquiries on the Web Employee inquires on the Web Accounting Controls • Specify multiple open and future periods Oracle Payables 5 . including: Accrual basis Cash basis Combined basis • Reconcile payments Automatically Manually • • • • • Prevent check fraud with Positive Pay Multicurrency Accounting • • • • • Enter transactions in any currency Automatically perform currency conversions Record gains and losses Post to general ledger anytime Define intercompany payables Perform Encumbrance accounting Set Budgetary Controls Purge invoices. purchase requisitions.

including a matching required option and an invoice amount limit Define a new supplier while entering an invoice Control duplicate supplier entry and merge any duplicate suppliers and sites with the correct supplier and site • • • • • • • • Major Features AutoEntry Oracle Payables provides many defaults that you can set up and default to each new supplier you enter. When you enter an invoice for a supplier site. Validation of Tax Registration Number and Taxpayer ID Oracle Payables provides country specific validation of supplier tax registration identification numbers and Taxpayer ID to protect against data entry errors. including payment control features and names and phone numbers of key contacts Use your own supplier numbering system or let Oracle Payables automatically number suppliers for you Maintain supplier history. With Oracle Payables. Business Needs With Oracle Payables you can: • Enter supplier information. you can always choose to override these defaults.Suppliers Oracle Payables provides a variety of flexible and powerful tools for efficient and easy supplier processing. you can buy from and send payments to more than one location for a single supplier and you can keep supplier address and contact history to help you with research. based on a variety of invoice criteria Control supplier payments by defining supplier holds. For example. You can override the default for each invoice as well. 6 Oracle Financials Functional Overview . Of course. you record complete and accurate supplier information. Unlimited Supplier Sites and Contacts Oracle Payables lets you record an unlimited number of supplier addresses and contacts. Oracle Payables uses the supplier site's default for the invoice. Oracle Payables then uses these supplier values as the default for each new supplier site you enter. keeping a record of supplier sites and other details Define additional accounting information to facilitate data entry Let selected users review supplier information without being able to make updates Review your outstanding balance with a supplier.

Oracle Payables automatically places a payment hold on invoices entered for this supplier which exceed this amount.Enter as many supplier sites as you require for each supplier Supplier Tokyo San Francisco Paris Purchasing Site RFQ Only Site Purchasing Site Pay Site Pay Site Contacts Contacts Contacts Define an unlimited number of supplier sites and contacts Invoice Amount Limit Define the maximum invoice amount you allow for a supplier. Oracle Payables 7 .

Without interrupting invoice entry. invoices. Oracle Payables automatically updates the associated purchase orders and invoices for the suppliers so they all refer to the correct supplier. Oracle Payables automatically generates merge reports so you can review the suppliers. Supplier Inquiry You can review supplier information without being able to change any data. SupplierMerge Oracle Payables helps prevent the entry of duplicate suppliers. Supplier Balance On-line View the current unpaid balance for any supplier or supplier site on-line. Supplier Hierarchy Oracle Payables lets you enter the parent company of a supplier to record a relationship between a parent company and its franchises or subsidiaries. Oracle Payables displays the total number and amount of outstanding invoices for the supplier or supplier site you choose. Concurrent Supplier Entry Define a new supplier while you are entering an invoice. or discount taken. 8 Oracle Financials Functional Overview . Select the matching required option for a supplier or supplier site to place a hold on any invoices for a supplier or supplier site that are not matched to a purchase order. Reconcile any difference with your suppliers by reviewing the specific invoices underlying the balance. Place a hold on a supplier or supplier site if you do not want Oracle Payables to pay any invoices for this supplier or site. currency.Payment Controls Oracle Payables provides the power to control supplier payments. Oracle Payables displays the balance based on a variety of criteria including approval status. sites. you can enter a new supplier and return to invoice entry to complete your data input. Provide separate access for personnel who do not have supplier update privileges. Use a Pay Group or a Payment Priority to choose a select group of suppliers for payment. you can merge them into a single supplier or supplier site. invoice date range. However. if duplicates exist or one company merges with another. Oracle Payables gives you maximum control of your supplier data. and purchase orders affected by the merge.

Requirement) Oracle Payables provides the tools to meet your 1099 reporting needs. Create and update 1099 supplier payment information and report your accumulated 1099 payment information to your suppliers. and other tax authorities.1099 Reporting (U. the Internal Revenue Service.S. Set up 1099 Reporting Enter 1099 Details for Suppliers Enter and Pay 1099 Invoices Submit 1099 Reports 1096 Forms 1099 Forms 1099 Payments 1099 Tape Identify and Resolve 1099 Exceptions 1099 Supplier Exceptions Report 1099 Invoice Exceptions Report Oracle Payables provides complete 1099 reporting Business Needs With Oracle Payables you can: • Maintain 1099 information for 1099 suppliers to comply with all Internal Revenue Service reporting requirements Participate in the Combined Filing Program Automatically produce letters for suppliers who have not provided a Tax Identification Number Identify and fix 1099 supplier and invoice reporting exceptions • • • Oracle Payables 9 .

Define a supplier as federal reportable and record its 1099 type. the Internal Revenue Service (IRS) forwards these records to the appropriate tax authority for each tax region.Major Features 1099 Suppliers Oracle Payables enables you to comply with all Internal Revenue Service reporting requirements for 1099 suppliers. Combined Filing System Option Oracle Payables allows you to produce combined federal and state 1099 records. When you submit your 1099 Tape. Tax Information Verification Submit a Tax Information Verification letter for your 1099 suppliers requesting that they submit any missing 1099 information and that they verify previously-submitted 1099 information that you have recorded in Oracle Payables. 1099 Reporting Oracle Payables provides you with supplier. Record a supplier's tax region if you participate in the Combined Filing Program. Submit the Update Income Tax Details Utility to automatically update invoices missing an income tax type or an income tax region. Oracle Payables produces K records for all tax regions (or states) participating in the Combined Filing Program that have qualifying payments. and user reports. If you enable the Combined Filing system option. so that you can comply with all Internal Revenue Service reporting requirements for 1099 suppliers. 10 Oracle Financials Functional Overview . Review and Update 1099 Supplier and Invoice Details Oracle Payables provides several reports which can help you identify incomplete or inaccurate 1099 suppliers and invoices. Oracle Payables assigns the income tax type to each invoice for that supplier. government. quickly and easily update your 1099 suppliers and invoices. Payments to 1099 suppliers are accumulated and reported by type. With Oracle Payables. Oracle Payables also produces a B record for each supplier to summarize qualifying payments made to a supplier for a particular tax region.

Business Needs With Oracle Payables you can: • • • • Identify possible duplicate suppliers Combine suppliers the way you want Identify possible duplicate invoices and payments Resolve duplicate invoices Major Features Supplier and Invoice Audit Reports Oracle Payables provides audit reports of possible duplicate suppliers and invoices. Use Oracle Payables auditing tools with other Oracle Payables controls to maintain the integrity of supplier and invoice data. sorted the way you want. or to a different site of the original supplier. Oracle Payables provides you with audit reports of your SupplierMerge activity. Use these reports to maintain the integrity of your suppliers and invoices. Oracle Payables 11 . SupplierMerge Use SupplierMerge to automatically transfer invoices and purchase orders from a supplier and site to another supplier and site. Invoice Audit Listings Oracle Payables provides complete invoice listings. Oracle Payables makes it easy for you to review invoices.Audit of Suppliers and Invoices Oracle Payables provides the tools you need to ensure maximum control over your suppliers and invoices.

Business Needs With Oracle Payables you can: • • • • Define invoice entry defaults which simplify and speed invoice processing Enter invoices in batches Control payment and posting of invoices with payment terms and hold reasons you define Automatically prorate tax. and puts you in complete control of your invoice payments. for example. sound. even after payment and posting Automatically record voucher numbers on each invoice Apply prepayments to invoices during invoice entry Match invoices to purchase orders View additional purchase order information and purchase order notes while entering an invoice Record invoice price and exchange rate variances between an invoice and its matched purchase order Match debit and credit invoices to their originating invoice Designate an invoice as requiring its own payment document Enter employee expense reports quickly and easily Automatically create invoices and payments for recurring expenses Automatically create invoices based on purchase order information and receipt transactions Automatically create invoices based on advance shipment and billing notice information • • • • • • • • • • • • • • • 12 Oracle Financials Functional Overview . text. you can spend less time entering invoices and more time managing your cash position. With Oracle Payables.Invoices Oracle Payables provides the high-productivity tools you need to process invoices efficiently. freight. and video to invoices. and miscellaneous expenses across selected invoice distribution lines Create one or more invoice notes which you can send internally or to suppliers Attach images. you can scan an invoice and automatically attach it to the related invoice Enter foreign currency invoices Adjust an invoice.

system. and supplier site defaults which speed invoice entry. Oracle Payables 13 . invoice number and amount to completely process an invoice since Oracle Payables automatically enters the remaining fields using supplier site and system defaults. including Standard. With AutoEntry. you can enter just a supplier name. Debit Memo. You can override these defaults.Major Features Invoice Types Oracle Payables supports your different invoice types. Credit Memo. and Expense Report. Enter all types of invoices using the powerful Invoice Workbench AutoEntry Oracle Payables allows you to define financials. Enter invoice values at the batch level which automatically default to all invoices in the batch. Invoice Batches Use invoice batch controls to proactively manage invoice entry.

Oracle Payables notifies you if there are outstanding prepayments for a supplier. Oracle Payables allows you to apply an approved and paid prepayment to an invoice during invoice entry. If you matched the original invoice to a purchase order shipment. Apply Prepayments During invoice entry. match the credit or debit invoice to the purchase order shipment and Oracle Payables automatically updates the quantity invoiced and the amount on the purchase order shipment. sequential voucher to each invoice you enter when you enable the Automatic Voucher Numbers profile option.Mail Group a Batch of Invoices Complete a Batch Control Form File by Batch Enter Batch of Invoices Update Batch Control Window Review Batch Control Reports Use invoice batches to control invoice entry Invoice Notes Define standard notes to send to your suppliers to inform them of actions you take which affect invoice payment. Credit Matching Easily match a credit or debit invoice to its original invoice. A Distribution Set is a set of predefined accounting distribution lines which you can optionally assign to a supplier or supplier site. Automatic Voucher Numbers Oracle Payables automatically assigns a unique. 14 Oracle Financials Functional Overview . Use invoice notes internally as well. Distribution Sets Distribution Sets enable you to automatically create invoice distribution lines during invoice entry. Review each voucher number on-line or in a report.

Approve an invoice on-line during invoice entry or approve invoices in batch using Approval. Invoice Adjustments Make adjustments to an invoice. uses a combination of the receipt and purchase order information to create the invoice. and miscellaneous expenses across selected invoice distribution lines. If you matched the original invoice to a purchase order shipment. An invoice which Oracle Payables creates based on a receipt transaction. Alternatively. You have the option to choose to create invoices either at the time you receive your ordered goods or when you receive an Advance Shipment and Billing Notice from your trading partner. For a sales type tax name. you can prorate your tax expense across selected invoice distribution lines. you can cancel the invoice.Price Corrections Enter price correction invoices that you receive from suppliers. Tax Distribution Lines Enter sales. Pay Alone Designate an invoice as Pay Alone to have Oracle Payables pay the invoice on its own payment document rather than combining it with other due invoices for the same supplier site. using the tax name Accounting Flexfield that you define. freight. Apply an unlimited number of holds to an invoice to prevent payment and/or posting. Approval Codes Hold payment and posting of invoices with approval codes that Oracle Payables predefines as well as approval codes and tolerances you define. An invoice which Oracle Payables creates based on an advance shipping and billing notice. Oracle Payables records your hold reasons and provides authorized users the ability to release holds. use. Use offset taxes for suppliers in the European Economic Community (EEC). even if you have paid or posted the invoice. match the price correction to the same purchase order shipment and Oracle Payables automatically updates the unit price on the purchase order shipment to reflect the price correction. Oracle Payables 15 . You can define which suppliers participate in Payment on Receipt. Prorate Prorate tax. Payment on Receipt Oracle Payables automatically creates standard invoices for payment of goods either based on receipt transactions or advance shipping and billing notices. and offset tax names and tax amounts for invoices. If you have not paid the invoice. uses a combination of the notice and the purchase order information to create the invoice. Oracle Payables automatically creates a tax invoice distribution line. and easily match them to the original invoices. Invoice Approval Oracle Payables prevents posting and payment of an invoice until you approve the invoice.

Oracle Payables notifies you if there are outstanding advances for an employee when you enter an expense report. define a recurring invoice to automatically create invoices and payments. Recurring Invoices If you have regular payments.Expense Report Templates Define expense report templates with selected expense items for your employee expense reports. or a certain maximum amount of advances to an expense report. You can calculate a supplier's outstanding balance and review all components of an invoice. that you make to a supplier who does not provide an invoice. Invoice Import Import invoices from other accounting systems with Invoice Import. Invoice Reporting Review on-line all the invoice information you need to respond to supplier and internal inquiries. including holds and payment information. one specific advance. Apply Employee Advances to Expense Reports Enter employee advances and later apply them to expense reports. 16 Oracle Financials Functional Overview . you can associate a purchase order with a recurring invoice. Use to create default accounting information for expense items. You can specify if you want Oracle Payables to apply all outstanding advances. If necessary. such as rent.

Prepayments
Oracle Payables provides the high-productivity tools you need to process prepayments efficiently and gives you complete control over the application of prepayments to invoices. Enter a prepayment if a supplier requires payment before sending you an invoice. For example, a supplier may require a deposit, or an employee may request an advance. Before you send a supplier or employee a check, record that payment in Oracle Payables. When the supplier later sends you an invoice, you want to ensure that you apply the prepayment already sent so that you do not overpay your supplier.

Enter Prepayment

Approve Prepayment

Pay Prepayment

Select Prepayment and Apply to One or More Invoices

Select Invoice and Apply One or More Prepayments Against It

Oracle Payables makes it easy to enter and apply prepayments

Business Needs
With Oracle Payables you can:
• •

Enter prepayments and advances in any currency Associate a prepayment with a purchase order and apply the prepayment only to invoices matched to the associated purchase order Specify a date before which you cannot apply a specific prepayment or advance Record and manage tax information for a prepayment Designate a prepayment or advance as requiring its own payment Review prepayments or advances for a supplier or an employee on-line
Oracle Payables 17

• • • •

• •

Apply or unapply a prepayment or advance to any approved invoice or expense report Notify a supplier of the prepayments you applied to an invoice

Major Features
Multi-Currency
Enter a prepayment in any currency you choose. Oracle Payables automatically calculates realized gains and losses due to fluctuations in your foreign currencies.

Purchase Order Association
When you enter a prepayment, you can associate a purchase order with the prepayment. If you do so, Oracle Payables allows you to apply the prepayment only to invoices matched to the associated purchase order.

Tax Name and Calculation
Optionally enter sales or use tax names and tax amounts for prepayments. For a sales type tax name, Oracle Payables automatically creates a tax distribution line.

Pay Alone
Designate a prepayment as Pay Alone to have Oracle Payables pay the prepayment on its own payment rather than combining it with other invoices for the same supplier site.

On-line Review and Application
Review on-line all the outstanding prepayments and advances for a supplier or employee. Apply a prepayment, part of a prepayment, or multiple prepayments to an invoice or expense report.

18

Oracle Financials Functional Overview

Select a prepayment and apply it to one or more invoices

Prepayment Remittance
Print a letter, addressed to a supplier, which details all the information about a prepayment that you applied to an invoice.

Oracle Payables

19

so you always know what your authorized recurring invoice amount is.Recurring Invoices Oracle Payables provides a variety of recurring invoice capabilities to enable you to pay periodic business expenses for which you do not receive invoices. Business Needs With Oracle Payables you can: • • • Make recurring invoices at intervals you specify Define the item and tax expense distributions you want to use for each invoice you create Define recurring invoices which increase or decrease by a fixed percentage from period to period Authorize a fixed amount and enter an expiration date for a recurring invoice Associate a purchase order with a recurring invoice Handle special payments like a deposit or balloon payment Generate recurring invoices in foreign currencies Create recurring invoices in open or future accounting periods • • • • • Oracle Payables lets you define recurring invoices at intervals you specify 20 Oracle Financials Functional Overview . and how much you have spent against it. Oracle Payables provides online access to your recurring invoice information.

you may choose to associate a purchase order with your recurring invoice. Purchasing Integration You can associate a purchase order with a recurring invoice.Major Features Invoice Creation Oracle Payables creates invoices automatically from your recurring invoice. Oracle Payables automatically creates a tax distribution line. quarters. Oracle Payables uses accounting information from the purchase order when creating the invoice distribution lines for the recurring invoice. Instead. Create invoices all at once or one at a time. or other period types. even if they are in a future accounting period. Choose an existing 100% Distribution Set or define a new Distribution Set to use with your recurring invoice. For a sales type tax name. Tax Name and Calculation Optionally enter sales or use tax names and tax amounts for prepayments. you may choose to associate a Distribution Set with your recurring invoice. Define your recurring invoices to increase or decrease by a fixed percentage from period to period over the duration of the recurring invoice. Instead. Special Payments Specify special payments to handle non-standard payment amounts such as deposits or balloon payments as part of your recurring invoice. Invoice Distributions You can define a Distribution Set for Oracle Payables to use when it creates a recurring invoice. Recurring Invoice Periods Define recurring invoice periods of any length and type you want: months. Oracle Payables 21 .

Oracle Payables lets you define interest rates and effective date ranges so you can automatically pay interest on overdue invoices. You no longer have to calculate payment due dates and interest charges on past due invoices because Oracle Payables does it for you. Business Needs With Oracle Payables you can: • Calculate interest charges on overdue invoices at payment time based upon due date and payment date Review your interest payments on-line and report on them Print your check and remittance advice document separately • • Major Features Automatic Interest Payments Oracle Payables automatically calculates interest amounts on overdue invoices when you pay them. Reports and Inquiries Use inquiries in Oracle Payables to review how much interest you paid to a supplier.Automatic Interest Invoices Oracle Payables provides the features you need to automatically pay interest on overdue invoices. Query all invoices or just interest invoices for a supplier. 22 Oracle Financials Functional Overview . Oracle Payables also provides you with listings of how much interest you paid on an invoice and the associated interest rate. Flexible Interest Rates Oracle Payables calculates interest amounts based on interest rates you provide. Review all interest invoices you paid with a particular check.

review. freight. you enter a tax type. Oracle Payables automatically creates a tax distribution line to record the tax charge. and Miscellaneous. tax rate. Business Needs With Oracle Payables you can: • • Define the tax names and rates you use in your organization Record tax charges on invoices to distinguish between the tax portion of your invoices and the portion representing the goods and services you purchased Automatically create invoice distributions for tax charges Prorate your tax charges across one or all invoice distribution lines Enter multiple taxes for an invoice Distinguish between sales tax and use tax charges Automatically calculate a tax amount for a tax name you enter on an invoice Verify that the tax amount for an invoice is correct according to the tax rates you define and within the tolerances you define Use offsetting taxes to record zero-rate taxes on which you need to report Automatically withhold taxes for your supplier invoices and employee expense reports • • • • • • • • Major Features User-Defined Tax Names Define as many tax names or tax authorities as you require. Tax. and miscellaneous distribution lines can be taxable.Taxes Oracle Payables provides the functions you need to easily record. Freight. Invoice Distribution Line Types Oracle Payables provides four types of invoice distribution lines: Item. Automatic Tax Distribution Lines When you enter a default tax name for an invoice and the tax name has a sales or user-defined tax type. For each tax name you define. Oracle Payables 23 . and report on the taxes you pay to your suppliers. and default tax expense account number. All item.

a use tax liability report. and a listing of your defined tax names. Tax Exceptions Oracle Payables’ automatic invoice approval (Approval) automatically performs tax variance checking and places tax exception holds on any invoice with a tax amount that does not match the calculated invoice tax amount(s) as determined by the tax rates you define for the tax names 24 Oracle Financials Functional Overview . you can manually enter the tax amount or you can have Oracle Payables automatically calculate the tax amount. You define VAT taxes in the same method as any other sales tax. You can easily enter invoices with VAT taxes and Oracle Payables provides complete VAT reporting. the Intra-EU VAT Audit Trail Report. Tax Type Tax Name Tax Rate Define Tax Names Define EEC Suppliers and Assign Tax Name to Supplier Site Enter VAT Charges for Invoices Review VAT Charges Tax Declaration Report Intra EC VAT Audit Trail Oracle Payables makes it easy for you to define and record taxes Gross Method Taxation When you enable the Automatic Tax Calculation system option and you enter a tax name for the invoice that has a sales or user-defined tax type. These reports include a tax audit trail report.Invoice Tax Reporting Oracle Payables provides standard reports for reporting on your invoice taxes. VAT Taxes You can define an unlimited number of VAT (Value Added Tax) taxes. You can assign a VAT tax as a supplier site default.

You can define percentage and amount tolerances to determine the amount of tax variance you allow on your invoices. You have flexibility in defining your withholding tax rate structures using effective date and taxable amount ranges. Flexible Tax Rounding You can control how Oracle Payables rounds tax calculations to meet varying country requirements.on your invoice. Oracle Payables performs the appropriate tax calculations. based on the item. Using withholding tax groups. Expense Report Tax Items You can easily record tax charges on your employee expense reports. Tax Inclusive or Exclusive Item Amounts You can specify whether supplier invoice items or employee expense report items include tax in their pricing. Automatic Tax Withholding You can automatically withhold taxes for your supplier invoices and employee expense reports. you can withhold multiple taxes for an invoice or expense report. Down or Nearest as a system default and optionally change this default at the supplier or supplier site. Choose the rounding rule Up. Oracle Payables 25 . and single invoice limits or period limits.

After sending the invoice lines.Fixed Assets Integration Mass Additions lets you add assets and cost adjustments to assets directly into Oracle Assets from invoices in your Oracle Payables system. Business Needs With Oracle Payables and Oracle Assets you can: • • • • Add items from Oracle Payables directly into Oracle Assets Minimize data entry Manipulate invoice lines before they become assets in Oracle Assets Transfer discount taken information on asset purchases 26 Oracle Financials Functional Overview . The Mass Additions Create process sends valid invoice distribution lines from Oracle Payables to an interface table in Oracle Assets. you can review them and determine whether to create assets from any of the lines in Oracle Assets.

or exchange rate variance between an invoice and its matched purchase order Match an invoice at the purchase order shipment line level or the distribution line level Review purchase order details and purchase order notes when matching an invoice Assign a match as final and have Oracle Payables permanently close the matched purchase order Associate a purchase order with a recurring invoice • • • • • • • • Major Features Matching to Purchase Orders Oracle Payables allows you to match the invoices you enter to the purchase orders (and related receipts) in your purchasing system. Oracle Payables supports the level of matching (2-way. 3way. or four-way matching. and 4-way) that your organization requires for matching invoices to purchase orders and receipts. Oracle Payables 27 . Business Needs With Oracle Payables you can: • Share supplier information with your purchasing department. so that you do not have to enter the same data twice Require matching for selected suppliers to ensure their invoices are matched to purchase orders Match invoices to purchase orders and automatically hold those invoices that exceed your matching tolerance. quantity. This allows you to access your purchasing information on-line and automatically match invoices to purchase orders using two-. whether you use Oracle Purchasing or another purchasing system Define amount-based and percentage-based matching tolerances Record a price.Purchasing Integration Oracle Payables fully integrates with Oracle Purchasing and other purchasing systems. three-.

Receipt Required Inspection Required Supplier To Receiving Receipt Invoice Invoice Bikes Quantity Price 2 $150.00 ea.00 To Inspection Quantity Accepted 4-Way Match Purchase Order Bikes Quantity Price 2 $150.Match an invoice to one or more purchase orders Purchase Order 2 Bikes@ $150.00 Receiving Bikes Quantity 2 Accepted Bikes Quantity 2 Use 2. 3. or 4-way matching for optimal control over your purchases 28 Oracle Financials Functional Overview .

Manual Matching Hold Release You can manually release an invoice that has a matching hold to pay the invoice. Approval places an invoice on matching hold when the purchase order and invoice information do not match within the tolerances you define.Approval An Oracle Payables process you initiate to automatically perform two-. Oracle Payables 29 . three-. and four-way matching for unapproved invoices.

incomplete information. you can immediately review any invoice holds Approval creates due to matching exceptions. or both Prevent payment and posting of invoices that do not meet your invoice approval criteria Access invoice hold and release information on-line Notify accounts payable supervisors and purchasing agents automatically when an invoice fails approval for a specific reason Selectively approve invoices for posting and payment after reviewing the original reasons for failing approval Report on approved invoices. ordered or accepted. Approval in Batch and On-line Submit Approval on-line for an invoice during invoice entry or approve invoices in batch.Invoice Approval Oracle Payables provides a wide variety of powerful. Oracle Payables is fully integrated with Oracle General Ledger. You can enter invoice selection criteria for Approval. 30 Oracle Financials Functional Overview . accounting. Oracle Purchasing and Oracle Alert to provide a complete solution for your invoice approval needs. matching. Approval automatically places a hold on an invoice when a supplier overcharges you or bills you for items you have not received. invoices on hold. currency. on-line. When you approve an invoice on-line. easy-to-use features to approve invoices. Business Needs With Oracle Payables you can: • • • • • Create your own approval cycle based on your organization's invoice approval process Approve invoices in batch. and other invoice exceptions. or data entry errors. Daily Approval Resubmission Oracle Payables helps you automate your approval cycle through automatic Approval resubmission. Approval also validates invoices for tax. For example. then specify the time you want to automatically initiate Approval each day. and invoices released from hold • • Major Features Approval Approval validates your invoice information and places holds on invoices that do not meet approval criteria.

Invoice Holds Oracle Payables lets you define your own holds. You can apply an unlimited number of invoice holds to an invoice during invoice entry. paid or posted. based on your invoice approval needs. and message distributions to focus attention on time-sensitive or critical information and streamline the approval process. messages. Invoice Adjustments Authorized users can always correct an invoice. Define an invoice amount limit for a supplier site so that Oracle Payables places a hold on invoices for the supplier site that exceed the amount you specify. Exception Reporting Oracle Alert provides an integrated system of alerts. Oracle Payables records your hold reasons and allows authorized users to manually release invoice holds from invoices. Approval also creates the necessary adjusting journal entries to keep your accounting records accurate and complete. Supplier Controls Define a supplier or supplier site control that causes Oracle Payables to place a hold on all invoices you enter for the supplier site from the time you enable the control. You can define your holds to only prevent payment of an invoice or you can prevent both payment and posting of an invoice. Oracle Payables 31 . even if the invoice is approved. Exception reporting in Oracle Alert is accomplished using either electronic mail or paper reports.

you must correct the invoice and resubmit Approval to remove the hold(s).QuickRelease Oracle Payables lets you manually remove all holds that you place on an invoice and most holds that Approval places on an invoice. payment. including hold. Review supplier balance and invoice detail information. For those holds that you cannot manually release. distribution. and currency information. 32 Oracle Financials Functional Overview . Easily release one or more holds from selected invoices Invoice Inquiry Oracle Payables provides on-line access to all the invoice information you need.

Invoice Import Oracle Payables integrates with Oracle Projects and other accounting systems by allowing you to import expense reports and invoices so that you can pay them using Oracle Payables. Use Invoice Import to create invoices from expense reports you enter in Oracle Payables. Use these reports to review the invoices that Invoice Import successfully created from your expense report and invoice information and to identify the expense reports and invoices that Invoice Import was unable to import. Invoice Import does not create an invoice from the information and reports the exception so that you can easily fix the problem. Oracle Projects or Oracle Web Employees Report on the invoices created as well as any exceptions for the imported expense reports and invoices • Major Features Invoice Import An Oracle Payables process you initiate to automatically create invoices from expense reports or invoices from other accounting systems. Oracle Projects or Oracle Web Employees. Oracle Payables 33 . Business Needs With Oracle Payables you can: • • Import and pay invoices from other accounting systems Create invoices in Oracle Payables to pay expense reports you entered in Oracle Payables. If the expense report or invoice information fails validation. Invoice Import Reporting Oracle Payables automatically produces the Invoice Import Report and the Invoice Import Exceptions Report when you submit Invoice Import. fully-distributed invoices. Invoice Import verifies all your expense report and invoice information to ensure it creates valid. ready for approval and payment. Integration with Oracle Projects and Oracle Web Employees Oracle Payables fully integrates with Oracle Projects and Oracle Web Employees so that you can easily create and pay invoices for expense reports entered in these applications.

restart your check printing where the printer left off Print a check on-line Laser print checks on blank check stock Automatically create standard invoices for payment of goods either based on receipt transactions or advance shipping and billing notices Record a stop payment Void a payment and cancel or hold all invoices on the void payment Review on-line information regarding the result and status of every payment Reconcile your bank account with Oracle Payables' payment history Automatically clear your payments made with future dated payment documents • • • • • • • • • • • • • • • • • 34 Oracle Financials Functional Overview . recorded checks. including computer-generated checks. controlled payment processing. and wire transfers Ensure that duplicate invoice payments never occur Pay only those invoices which are due and automatically take the maximum discount available Select invoices using a wide variety of criteria and create payments automatically Ensure that you always take the better of the invoice payment terms or the purchase order payment terms when you match an invoice to a purchase order Modify the payment amount or discount taken on a particular invoice before creating the payment Create payment documents in any format you want Reduce expenses by distributing payment discounts you take to the proper accounts Pay an invoice on its own separate payment document If your printer jams. Business Needs With Oracle Payables you can: • Disburse funds using multiple payment methods.Payments Oracle Payables provides a variety of features for fast. electronic payments.

Multi-Currency Enter and pay an invoice in any currency you want. Alternatively. you cannot pay the invoice until you release the hold. you can combine invoice selection and payment formatting into a single step if you do not intend to modify any of the invoices selected for payment. If Approval places a hold on an invoice. or change the payment amount of invoices selected for payment. you then print the checks.Major Features Payment Methods Oracle Payables allows multiple methods of payment. future dated payment documents. Decide how you want to perform invoice approval. Oracle Payables produces your payments in several steps to give you optimal control over automatic payments. add. to match your approval process with your company policy and your computing resources. The last step is to confirm your printed payment documents against your payment records. Oracle Payables 35 . If the payment batch is for checks. including computer-generated checks and electronic payments. Approval Oracle Payables prevents payment or posting of an invoice until you submit it for approval. You have the option to modify the selected invoices so you can delete. Payment Batch Oracle Payables produces payments for invoices you select and records the results so that you have accurate and timely payment information. either on-line. You first select the invoices for your payment batch. in batch or both. For more information on electronic payments. Initiate a payment batch to create checks or electronic funds transfer files. Oracle Payables automatically tracks any realized foreign exchange gains or losses on your payments. please see the Electronic Payments section within this document. You then format the payments for these selected invoices. and recorded payments.

When you pay a Pay Alone invoice. Select the invoices you want to pay and Oracle Payables prints your check. payment priority. Quick Payment Use a Quick Payment to create an individual check on demand. payment amount limits and several other criteria. Pay Group. 36 Oracle Financials Functional Overview . Oracle Payables ensures that the invoice payment is separate from any other invoice payments for the supplier site.Invoice Select Invoices Initiate Payment Batch Modify Invoice Selection (Optional) Confirm Payment Batch Format Payments Create Payments (Checks or EFT’s) Oracle Payables provides optimal control over your automatic payments Invoice Selection for Payment Automatically pay invoices using rules you establish for pay-through-date. Select invoices for payment based on criteria you specify Pay Alone Oracle Payables provides the ability to control payments to suppliers that require separate payment for an invoice. Optionally designate an invoice as a Pay Alone invoice when you enter the invoice.

Simply identify the spoiled checks and Oracle Payables does the rest. Decide the type of payment for which you want to use a payment document. Oracle Payables 37 . Oracle Payables allows you any number of setup checks for aligning your printer. Credit a payment discount to a single Discount Taken Accounting Flexfield or prorate your discount amount across your invoice distribution lines.Payment Schedule Recalculation Ensure that you always take the better of invoice terms or purchase order terms when you match an invoice to a purchase order. You have the option to choose to create invoices either at the time you receive your ordered goods or when you receive an Advance Shipment and Billing Notice from your trading partner. and Oracle Payables schedules the remainder for future payment. Payment on Receipt Oracle Payables automatically creates standard invoices for payment of goods either based on receipt transactions or advance shipping and billing notices. Payment Document Creation You have several options for ordering payment documents. Partial Payments You have complete control over the amount you pay and take as discount for invoices on any payment. Partial payments automatically reduce the balance due. Payment Hold In addition to holds that Oracle Payables automatically places during Approval. Oracle Payables displays the next available document number when you format payments. Automatic Discount Proration Oracle Payables lets you decide how you want to distribute any discounts you take. Oracle Payables automatically recalculates your payment schedule to reflect the best terms. define your own invoice holds to prevent payment. supplier number or postal code to order your payments the way you want. Choose supplier name. Check Print Restart Easily restart your payment batch if your printer malfunctions. and automatically records them as nonnegotiable setup checks. You can define which suppliers participate in Payment on Receipt. Payment Document Control Oracle Payables helps you manage multiple payment documents. and warns you before you run out of payment documents.

please refer to the Bank Statement Reconciliation with Oracle Cash Management section within this document. For more information about Oracle Cash Management. highlighting exceptions. As checks clear your bank. Automatic Clearing of Future Dated Payments Oracle Payables automatically clears your payments made with future dated payment documents based on their maturity date and the number of clearing days you specify for the payment document. variable fonts. Load a bank reconciliation file from a tape or diskette and Oracle Cash Management records a cleared date and cleared amount on each payment that matches the bank information. Payment Reconciliation Automatically reconcile your bank account with Oracle Payables payment history using Oracle Cash Management. and custom objects into your checks. you can incorporate scanned signatures. you can create a list of checks issued to suppliers and employees called a Positive Pay file. When you create a payment batch or individual payment in Oracle Payables. the bank identifies exceptions which you can choose to process or exclude from payment. place a hold on the invoice. Void Payment Oracle Payables automatically reverses the payment and accounting records after verifying that the payment has not already cleared the bank. Laser Printed Payment Documents Oracle Payables allows you to laser print checks on blank check stock. or cancel the invoice. MICR encoding. Oracle Cash Management automatically prints a reconciliation report. Oracle Payables keeps your stop payment status up-to-date. Use a third party product of your choice to format and electronically transmit this file to your bank. You can then repay the invoice on a new payment. then void the payment or release the stop payment. Positive Pay Work with your bank to prevent check fraud by using Positive Pay.Stop Payment Record a stop payment on any payment. 38 Oracle Financials Functional Overview . With this feature. Oracle Payables also provides a report that you can use to review all current stop payments.

Custom Payment Formats Create your own electronic payment programs and formats to generate electronic funds transfer files that meet the specific format needs of your bank. Oracle Payables 39 . Oracle Payables fully integrates with Oracle EDI Gateway to produce electronic payments and remittance advice information for suppliers of your choice.12 820. EDI Payments Oracle Payables fully integrates with Oracle EDI Gateway to produce electronic payments and remittance advice information for suppliers of your choice.12 820. EDIFACT equivalent or other outbound payment data file. Oracle Payables automatically creates electronic payments for all approved invoices with the Electronic Payment Method that are available for payment on or before the pay-through date you specify when you initiate a payment batch. or create your own. EDIFACT equivalent or other outbound payment data file Use any of the standardized electronic funds transfer payment formats that Oracle Payables provides to create electronic payments. Customize the electronic payment programs Oracle Payables provides. or create your own custom payment format Keep a complete audit trail of Electronic payments you make • • • Major Features Automatic Payment Oracle Payables creates electronic payments automatically when you initiate a payment batch using an electronic payment document. Business Needs With Oracle Payables you can: • Create Electronic payments quickly and accurately whether you are using Oracle EDI Gateway or Oracle Payable’s standard electronic funds transfer process Transfer payment data through Oracle EDI Gateway to the EDI translator of your choice to create an ASC X.Electronic Payments You can pay your suppliers electronically by using either the Oracle EDI Gateway or by delivering to your bank an electronic funds transfer output file. Oracle EDI Gateway extracts payment information from Oracle Payables to be processed by the EDI translator of your choice to create an ASC X.

the supplier and invoices it pays. You can define your own remittance advice formats or use a standard format that Oracle Payables provides. 40 Oracle Financials Functional Overview . what discounts you took.Audit Trail As with checks or wire transfers. The audit trail includes when you make a payment. Separate Remittance Advice Print your payment remittance information separately from electronic funds transfer payments. and other payment information. Oracle Payables maintains a complete audit trail of all EFT payments. any realized gains or losses.

sometimes referred to as the Bills of Exchange payment method. Quick payment. The agreement calls for payment of one or more invoices on the future date. also known as Bills of Exchange Business Needs With Oracle Payables you can: • Create a payment batch. the first when you create a payment. Oracle Payables 41 . Use the Future Dated payment method to control the timing of your payments and therefore maximize your cash flow. and the second after you record that the bank has cleared the payment • Major Features Future Dated Payment Method A payment method which indicates your agreement with a supplier to transfer funds from your bank account to the supplier's bank account on a specific future date.Future Dated Payments You can optionally pay your suppliers with the Future Dated payment method. or manual payment with the future dated payment method Automatically create two sets of accounting entries for future dated payments. Manual Future Dated Payment Request Enter Invoice Enter Invoice Approve Request and Enter Manual Future Dated Payment Create Future Dated Payment Send Manual Future Dated Payment back to Supplier Send to Supplier Supplier Submits to Bank Bank Distributes Funds on Future Date Create future dated payments.

you can manually reconcile your bank statements. Oracle Cash Management. Any adjustments needed to account for differences between the sum of the transaction and the statement line amount can be generated using Oracle Cash 42 Oracle Financials Functional Overview . methods to handle foreign exchange fluctuations. The system will automatically verify accuracy. automatically or manually Reconcile foreign currency invoices and account for corresponding exchange loss or gain Use a cash clearing account for timely recognition of cash Reconcile bank statement lines to journal entries. generates all necessary accounting entries during automatic reconciliation. You can control the reconciliation process by specifying acceptable tolerance levels for reconciliation. and effectively manage your cash flow. handle exceptions and generate all necessary accounting entries and reports. journal entries and batches available for reconciliation Manually create a payment or receipt for any bank statement line Create miscellaneous transactions. and also provides an open interface for external systems. Business Needs With Oracle Cash Management you can: • Automatically or manually import your bank statement View all transactions. such as bank charges.Bank Statement Reconciliation with Oracle Cash Management Oracle Cash Management is a high-powered. bank charge handling. journal entry. and appropriate GL accounts for accounting entries. bank statement details are automatically matched and reconciled with appropriate accounting transactions. Oracle Payables and Oracle General Ledger. This method allows you to match each statement line against the appropriate batch. or transaction to ensure accuracy. create necessary miscellaneous and accounting entries. receipts and batches Create all necessary accounting entries View and print your bank statements and all reconciliation reports • • • • • • • • Major Features Automatic Reconciliation With Automatic Reconciliation. payments. financial management solution for global enterprises. With Oracle Cash Management you can reconcile your bank statements manually or automatically. flexible. Manual Reconciliation With Oracle Cash Management. Oracle Cash Management gives you the ability to efficiently reconcile bank statements. Oracle Cash Management is integrated with Oracle Receivables.

payments. cash position. For example. miscellaneous transactions. journal entries. batches. You can also use manual reconciliation to reconcile any bank statement details which could not be reconciled automatically.Management. see the Oracle Cash Management Functional Overview. or external sources. Cash Management Tools With Oracle Cash Management’s manual clearing functionality. Oracle Payables 43 . Search For Available Transactions When using manual reconciliation. you reconcile each statement line with available receipts. and transactions available for reconciliation. you can use Oracle Cash Management to handle any bank charges or NSF transactions. with the find available window. Oracle Cash Management helps you quickly find and review any of these transactions that meet the criteria you specify. you have the flexibility to recognize cash prior to receiving your bank statement to know your cash position at any time during your accounting cycle. Full reporting and inquiry capabilities of Oracle Cash Management allow you to review and analyze your company’s bank statements. For more information. Oracle Cash Management’s reconciliation open interface allows you to easily reconcile payments and receipts from external systems.

44 Oracle Financials Functional Overview . by specifying defaults for suppliers and invoices. Oracle Payables keeps track of the total count and amount. or defining suppliers. Business Needs With Oracle Payables you can: • • Enter data with a few keystrokes Use defaults that you control and enter a supplier or invoice. Batch Controls You can use batch controls to increase productivity. Oracle Payables fills in the rest of the field for you or displays the field choices in a List of Values pop-up window.High Productivity Oracle Payables offers many features which help you to process invoices and payments efficiently to obtain higher productivity. or PayGroup. invoice amount. For example. Batch Control reports help you analyze productivity and resolve batch imbalances quickly. you can enter as little as supplier name. and invoice number to create an invoice. or create payments with minimal data entry Enter invoices in batches for control and efficiency Attach notes. Oracle Payables fills in most fields for you with the values from defaults you specified. images or other objects to invoices on-line so you do not need to rely on the original paper invoice to research invoice history Measure productivity Create complex invoice distributions automatically as you enter invoices Approve invoices for payment and posting automatically Automatically select invoices for payment and create payment documents in one step Create and print a check on-line • • • • • • • Major Features List of Values Enter the first several letters of a value for a field such as supplier name. Specify the batch size and the control total. terms. AutoEntry Whether entering invoices. processing automatic payments. and warns you of imbalances when you exit.

Oracle Payables requires no further data entry. Load a bank reconciliation file from a tape or diskette and automatically verify that your bank information is complete and accurate. spreadsheets. Approval automatically releases invoices for payment when you correct the errors or adjust the tolerance. Matching Distributions You can create invoice distribution lines automatically from purchase order distribution lines when you match an invoice to one or more purchase order lines. up to 240 characters. You can even select invoices and create payments in one step. or video to your invoices. you need only enter your payment batch name to select invoices for payment. Key Indicators Key Indicators tell you how many invoices you enter and how accurately you enter them. Approval Oracle Payables increases your productivity by identifying matching errors for you without slowing up invoice entry. word processing documents. Payment Batch Initiation When you initiate a payment batch. Complete Descriptions Enter as long a description as you need. Save time by never needing to refer to a paper invoice or a hand-written note. Cash Management Reconcile your bank account with Oracle Payables payment history using Oracle Cash Management. The payment initiation uses defaults for other payment batch criteria. so you have room for all your comments. Define invoice distribution lines in a Distribution Set and assign the Distribution Set to one or more suppliers or supplier sites. you can create invoice distribution lines automatically as you enter invoices. and update Oracle Payables payment history.Attachments Link non-structured data such as images. Distribution Sets Using Distribution Sets. Oracle Payables 45 . Oracle Payables automatically creates invoice distribution lines from the Distribution Set. Approval automatically holds invoices for payment when the invoices do not match purchase order and receipt information within tolerances you specify.

Customizable Messages and Distribution Lists Oracle Alert can send different messages to different people for the same alert condition. Oracle Alert can request the purchasing agent to expedite the order. For example. and Oracle Office. For example. You can increase the effectiveness of your receipt. With that information your purchasing agent can contact your supplier to prepare replacement items while the item is being returned.Oracle Alert Oracle Alert provides automated exception reporting fully integrated with Oracle Payables. matching. and send messages for them to as many individuals in your organization as you want. and improves your productivity. if a supplier delivery is overdue. Modify Oracle’s pre-coded conditions or create your own. Customize messages to reflect specific responsibilities. 46 Oracle Financials Functional Overview . and send messages when events occur to as many individuals in your organization as you want. Oracle Alert can immediately send a message to a purchasing agent if an item is rejected after receipt from the supplier. Periodic Alerts Oracle Alert periodically notifies you of key information and events on a schedule you choose. reduces your paper flow. messages. increases the quality of your information. Oracle Alert can help you manage your invoices on receipt hold by sending daily or weekly reminders to the purchasing agents or requestors to verify receipt. Oracle Purchasing. Oracle Alert automatically notifies you of important and unusual matching events as soon as they occur. Modify Oracle’s pre-coded conditions or create your own. and payment processes using the powerful message capabilities of Oracle Alert. and can inform the requestor of the delay. Business Needs With Oracle Payables and Oracle Alert you can: • Set goals for your payables managers and employees and measure their performance against these goals Automatically remind employees of incomplete or upcoming payables tasks Respond immediately to messages with electronic mail Receive messages through both electronic mail and printer facilities Customize Alert. For example. and reports quickly and easily without support from data processing professionals • • • • Major Features Immediate Alerts Oracle Alert immediately notifies you of events as they occur with event-triggered messages.

Everyone can receive Alert information quickly and directly. as opposed to receiving many individual mail messages. choose to suppress duplicate messages. Then. For example. Electronic Mail Interface Oracle Alert is completely integrated with Oracle Office and. Completely Customizable System With Oracle Alert. through Oracle Office gateways. it will not send another message. you can always modify messages.Summary Reports Oracle Alert lets you use summary reports to receive a single list of exceptions matching an alert. Oracle Payables 47 . Printing Capability Oracle Alert lets you print messages for those who do not use electronic mail. if Oracle Alert detects an uncorrected condition. business agent conditions and distribution lists to meet your unique or changing needs. Use your mail system to further communicate with your organization following a business agent message. Duplicate Message Suppression If you do not want Oracle Alert to send repeated or escalated messages. Escalated Messages Oracle Alert lets you send escalated messages to remind recipients of uncorrected conditions. increase the severity of an expediting reminder message to a payables agent until receipt of payment is recorded in Oracle Payables. with most other electronic mail systems. Performance Goals Use Oracle Alert to monitor performance against accounts payable performance goals.

With Oracle Payables. You can define any additional exchange rate types you require. User-Maintained Exchange Rate Types Oracle Payables predefines the following exchange rate types: Corporate. and User. Oracle Payables automatically performs conversion using the daily exchange rates you specify. With Oracle Payables. User-Maintained Daily Exchange Rates You can maintain any type of daily exchange rate you require. Oracle Payables uses the daily exchange rate that you define for the exchange rate type to convert the amount of your invoice to your functional currency. meet the increasing demands of international business without the complexity you often associate with multi-currency accounting. you maintain daily exchange rates for foreign currency conversion. 48 Oracle Financials Functional Overview . Business Needs With Oracle Payables you can: • • • • • • • Define multiple currencies to meet your invoice. You specify an exchange rate type when you enter a foreign currency invoice. payment. and reporting needs Enter and maintain daily exchange rates on-line for foreign currency conversion Enter and pay foreign currency invoices Calculate unrealized gains and losses at period-end or after a severe currency movement Calculate realized gains or losses after payment of a foreign currency invoice Match a foreign currency invoice to a purchase order Report on accounts payable activity by currency using standard reports Major Features Multiple Currency Definitions You can define multiple currencies for financial reporting. Spot. including spot rates.Multi-currency Oracle Payables provides powerful and easy-to-use multiple currency features to help you manage your international transactions and operations. And.

cash.General Ledger Integration Oracle Payables fully integrates with Oracle General Ledger and other general ledger systems so you can easily update your general ledger with accounts payable activity. Posted Payments and Trial Balance Reports Submit Posting Holds Report and Resolve Posting Holds Close Accounts Payable Period Create Journal Entries Oracle Payables fully integrates with Oracle General Ledger and other general ledger systems Business Needs With Oracle Payables you can: • • • Define your set of books and create journal entries for that set of books Open and close your accounts payable period independently of your general ledger Validate your accounts payable accounts directly against your general ledger chart of accounts Record statistical quantity information for invoice distribution line items which you can transfer to your general ledger Oracle Payables 49 • . Oracle Payables lets you validate your expense. Enter Invoices and Payments for the Period Submit Expense Detail Report Open Accounts Payable Period Submit Posted Invoices. You can use standard Oracle Payables reports to reconcile your posted invoices and payments to your Accounts Payable Trial Balance. and other accounts against your chart of accounts. You can use your Accounts Payable Trial Balance to reconcile to the accounts payable liability in your general ledger system. resulting in fewer data entry errors. liability.

Oracle General Ledger automatically creates intercompany journal entries to balance your accounts. Multiple Sets of Books Your set of books defines the account structure. 50 Oracle Financials Functional Overview . Audit Information Optionally choose to maintain detailed audit information for the invoice and payment information you transfer to your general ledger.• • • • • Transfer journal entry records of payment and invoice activity to your general ledger Maintain detail or summary invoice and payment audit information in your general ledger Create journal entries using the accrual. cash basis. Intercompany Accounting When you post Oracle Payables journal entries. Multiple Accounting Methods When you install Oracle Payables. If you have Oracle General Ledger. a few simple steps allow you to fully integrate with Oracle Payables. accounting calendar. Full Integration Oracle Payables fully integrates with your general ledger system. and functional currency that your organization uses to record transactions in Oracle Payables. everything is ready for you to access your accounting data. or combined basis of accounting Create journal entries for multi-currency invoices and payments Automatically balance your intercompany journal entries to keep each company in proper balance Reconcile your invoice and payment activity to your Accounts Payable Trial Balance and to your general ledger system • Major Features Flexible Accounting Structure Define your accounting structure according to the way you do business. Oracle Payables provides you with pop-up windows that make entering accounting information quick and easy. choose whether you wish to record journal entries and report on an accrual basis. If you are using your own general ledger system. or combined basis of accounting. cash.

Posting Reports Oracle Payables provides several standard reports that you can use to review your unposted and posted invoice and payment information. define the units of measure you use to record statistics on invoice distribution lines. payment entry. Closed. Future. posted accounts payable liabilities. Submit reports that let you review all your posted invoices and payments. Oracle Payables allows invoice entry. you can define a different unit of measure for each account. Accounting Period Statuses Open and close accounting periods in Oracle Payables independently of your general ledger. In Oracle General Ledger. The period statuses available in Oracle Payables are Never Opened. Open. Never Open Future (Optional) Permanantly Closed (Optional) Open Closed Oracle Payables lets you control the status of your accounting periods Oracle Payables 51 . and Permanently Closed. Oracle Payables then lets you enter a statistical quantity for each invoice distribution line that has an account defined with a unit of measure. and payment voiding in an open accounting period. You can enter invoices in a Future accounting period but you cannot pay or post any invoices in a Future period until you open the period. as well as the trial balance for your unpaid.Invoice Distribution Statistics If you use Oracle General Ledger. Submit a report to review invoices that Oracle Payables does not allow you to post because they have posting holds or have not been approved.

Combined Basis Accounting In addition to the accrual basis and cash basis accounting methods. gain/loss and cash clearing distributions. Payables automatically maintains audit information for all expense and cash transactions. Each time you transfer accounting entries from Oracle Payables to your general ledger. For each accounting method. cash or accrual. Journal Entry Audit Options Within each set of books you can choose to maintain various levels of audit detail for your invoice and payment transactions. Oracle Payables creates journal entries for both sets of books simultaneously. Oracle Payables creates accounting entries for both sets of books so that you can report under each accounting method. however you can optionally choose to store full or partial audit information on your liability distributions and audit information for your discount. You can override these defaults each time you initiate the Payables Transfer to General Ledger program. you choose to transfer activity for your primary. With Combined Basis Accounting. Business Needs With Oracle Payables you can: • • Define two sets of books. secondary. you can choose to create either summary or detail journal entries based on the invoice and payment transactions you transfer from Oracle Payables. or both sets of books. You can create summarized journal entries even if you want to maintain detailed audit information for drilldown purposes. for cash and accrual accounting methods Use one set of books to manage your business and use the other set of books for reporting purposes Choose your accounting method each time you transfer accounting entries from Oracle Payables to your general ledger • Major Features Multiple Accounting Methods Choose primary and secondary accounting methods for creating accounting entries in Oracle Payables. Create Summary or Detail Journal Entries If you use Oracle General Ledger. Oracle Payables also supports a combination of both methods called Combined Basis Accounting. 52 Oracle Financials Functional Overview . choose a set of books.

Oracle Payables 53 . so you do not have to enter them every time you create a supplier or enter an invoice. Balancing Segment B. and Balancing Segment C Create multiple accounts payable liability accounts and selectively assign them as supplier defaults Specify a bank account as a pooled account or as a non-pooled account Create multiple cash entries automatically when paying an invoice from a pooled bank account Create all necessary balancing entries when you use a non-pooled account to pay an invoice Prorate discounts across invoice distributions. you can specify that you want to automatically create balancing entries (both liability and cash accounts) Create multiple liability accounts automatically for an invoice. Balancing Segment B. such as whether to create balancing entries automatically. your cash and liability accounts all default from your system defaults. or use one discount taken account • • • • • • Major Features System Options and Defaults Oracle Financials gives you multiple system options and defaults which increase your control and make data entry easier. give you the accounting controls you need. System options. Of course. Oracle Financials also lets you record balance sheet effects across multiple balancing segments. for example. Business Needs With Oracle Payables you can: • Specify system options and defaults which reflect your business practices. For example. With Oracle Financials you can support a complete set of accounts for each balancing segment. You can automatically record liability entries for Balancing Segment A. you can always override a default. and Balancing Segment C. you can enter an invoice and distribute it to Balancing Segment A. For example. Oracle Financials provide the flexibility for the way your company does business.Automatic Offsets Oracle Financials provides a number of flexible accounting capabilities to control your expenses.

Intercompany Balancing Entries Oracle General Ledger enables you to create intercompany balancing entries quickly and easily. specify whether you centrally pool cash or not. Multiple Receipt Accrual Accounts Oracle Purchasing makes it easy for you to record accruals for your unbilled receipts. You can create balancing entries manually. Use a pooled account to pay invoices for multiple balancing segments. Posting Options Oracle General Ledger gives you the option of ensuring that your entries balance by balancing segment. according to your invoice distributions. Automatically accrue receipts as often as you need. If you specify Automatic Offsets as a system option. Set up Oracle Purchasing to automatically accrue receipts to the correct balancing segment when you run your receipt accrual process. 54 Oracle Financials Functional Overview .Multiple Liability Accounts Oracle Payables gives you the flexibility to record multiple liability accounts for your invoices. If you do not specify Automatic Offsets as a system option. Oracle Payables automatically allocates your liability amounts across multiple balancing segments. Use a non-pooled bank account to pay a single balancing segment's invoices. or a current period. or let Oracle General Ledger create them for you automatically when you post a payment transaction which does not balance by balancing segment. Accrue receipts to the next period. Multiple Discount Accounts Choose how Oracle Payables distributes the discounts you take when making payments. Oracle General Ledger automatically creates intercompany entries for your journal entries that are not balanced by balancing segment. Multiple Cash Accounts When you define a bank account. Oracle Payables credits your liability to one account. Prorate any discounts across your invoice distribution lines or credit all discounts to one Discount Taken account.

or use the Oracle Applications Multiple Organization Support feature to use multiple sets of books within one Payables installation. Oracle General Ledger automatically creates intercompany journal entries to balance your accounts. With the Multiple Organization Support feature. Use one set of books for each installation of Oracle Payables. such as supplier information. Oracle Payables 55 . accounting calendars. Define additional intercompany accounts for Oracle General Ledger to use for balancing different types of journal entries. including having one company pay for the expenses of another company Perform intercompany accounting to automatically balance your intercompany transactions • Major Features Multiple Sets of Books Oracle Payables allows you to define different sets of books for companies with different currencies. Business Needs With Oracle Payables you can: • Create accounting entries for invoice and payment transactions that reflect activity across multiple companies. chart of accounts. you can assign a unique set of books (with its unique calendar. set up as many companies as you need. between organizations so the information needs to be entered only once. Maintain multiple companies and create expense distributions and payments on behalf of any combination of those companies. Multiple Companies Within each set of books. Specify the intercompany balancing account you want to use for each company.Intercompany Accounting Manage your accounts payable information within any company structure you define. Intercompany Journal Entries Oracle Payables is completely integrated with Oracle General Ledger. Add new companies whenever you want. without any complicated restructuring. When you transfer journal entries for invoices and payments. and functional currency) to each organization you define. When you assign responsibilities using function security you can limit a user to one organization's set of books. With the Multiple Organization Support feature you can segregate transactions by operating unit but you can still choose to share certain information. and chart of account structures.

purchase order. easy-to-use budgetary control capabilities to control your expenses and prevent you from spending beyond your budgets. Business Needs With Oracle Financials you can: • • Ensure that your actual and planned expenditures do not exceed your available funds Check funds on-line for all transactions which affect available funds. Oracle Payables. invoice. flexible. or journal entry Choose the degree of budgetary control you want over your expenditures Choose the degree of budgetary control you want by type of document Check funds and reserve funds at multiple levels within your organization Control your expenses based on the period you want Control your expenditures regardless of your accounting method or currency Specify the budget you want to use for budgetary control Choose the detail accounts for which you want to enforce budgetary control Perform budgetary control by journal entry source. for example. Oracle Purchasing and Oracle Inventory are fully integrated to give you a complete solution to your budgetary control needs. for example. you may want to allow transactions for which there are insufficient funds available if the transactions exceed available funds by $1000 or less Override transactions selectively for which there are insufficient funds available Reserve funds for your journal entries Import journal entries from other non-Oracle applications and check funds for these imported journal entries Reserve funds for invoices by approving them on-line or in batch Liquidate excess encumbrances easily Record cancellations of encumbrances differently from reversals • • • • • • • • • • • • • • • • 56 Oracle Financials Functional Overview . Oracle General Ledger. category. and responsibility.Budgetary Control Oracle Financials provide a variety of powerful. you may want to perform budgetary control on Payroll journal entries. at any level of a transaction Update your funds available balances immediately when you reserve funds for a requisition. but not Accrual-type journal entries Specify tolerances for budgetary control.

Absolute or Advisory Budgetary Control With Oracle Financials. Multiple Levels of Funds Checking and Funds Reservation You can define unlimited funds checking levels for budgetary control. Oracle Financials automatically create encumbrances in your functional currency. We use the term purchase order encumbrance to refer to the journal entry Oracle Financials creates when you approve a purchase order. Your funds available balances are always up-to-date. pre-commitment and commitment. or pre-lien and lien. Oracle Financials provides you with on-line notification that you do not have available funds. You may define an unlimited number of encumbrance types in Oracle General Ledger. purchase order. but reserves funds for your transaction anyway. You can check funds at any level of a journal entry. And. We use the term requisition encumbrance to refer to the journal entry Oracle Financials creates when you reserve funds for a requisition. educational.Major Features Many government. as well as many corporations. requisition. Each of these organizations may use different terminology for budgetary control. so you can call these journal entries commitment and obligation. Immediate Update of Funds Available Oracle Financials automatically updates your funds available balances when you successfully reserve funds for a transaction. Oracle Financials notifies you on-line whether you have enough funds available for a transaction. or invoice. You can also decide to check funds at both a summary and detail level. If you use advisory budgetary control. On-line Funds Checking You can check funds on-line independently of reserving funds for your transaction. Choose whether your boundaries are hard (you do not have access to available funds over the boundary) or soft (you automatically have access to funds available past period boundaries). Multiple Interval Types Specify the interval for which you want Oracle Financials to exercise budgetary control. Oracle Financials does not allow you to reserve funds for a transaction unless you have funds available. and not-for-profit agencies use budgetary control. Oracle Payables 57 . you decide whether to allow transactions which exceed your available funds. You may choose to have Oracle Financials check your funds at the detail level of an Accounting Flexfield or at a summary level of a group of Accounting Flexfields. If you use absolute budgetary control. Multi-Currency Encumbrances Oracle Financials perform funds checking based on the functional currency equivalents of your multi-currency purchase order distributions or invoice distributions.

Oracle Payables also creates an encumbrance reversal for an unmatched invoice which it previously encumbered. Tolerances For each journal entry source and category for which you perform budgetary control.Funds Reservation Options Oracle Financials provide the flexibility you need to control your expenses the way you want. The tolerance percent is the percent by which you can exceed your budget per transaction that fails budgetary control. Cancellations and Reversals Oracle Financials treat cancellations of encumbrances different from reversals. so you can easily report on gross encumbrances-to-date (gross obligations-to-date or gross commitments-to-date) as well as net encumbrances (net obligations or net commitments). Oracle Payables automatically creates an entry in Oracle General Ledger to reverse the purchase order encumbrance. You can define the range or ranges of accounts for which you want to perform budgetary control. Oracle Payables also creates encumbrances when you successfully approve an invoice having a quantity or price variance with the purchase order to which you matched it. specify a tolerance amount and a tolerance percent. Document Controls Oracle Financials provide complete control over your purchase and accounts payable documents. Invoice Budgetary Control Oracle Payables provides budgetary control on invoices and prepayments. Oracle Payables automatically creates an encumbrance entry in Oracle General Ledger when you successfully approve an invoice or prepayment which you do not match to a purchase order. you can allow manual override of transactions that have insufficient funds. and responsibility. Oracle Financials make it easy for you to liquidate excess encumbrances and increase your funds available. you can specify an override amount (in functional currency) by which you want to limit manual overrides. You can record a final invoice. If you match an invoice to a purchase order. You can define budgetary control options by journal entry source. 58 Oracle Financials Functional Overview . which liquidates excess encumbrances associated with purchase orders matched to the invoice. The tolerance amount is the amount per transaction in functional currency by which you can exceed your budget. Funds Check Override For each journal entry source and category for which you perform budgetary control. category. And. Oracle Payables creates a detailed journal entry of invoice activity for posting to the general ledger.

purchase requisitions. Oracle Payables Database Review Purge Candidates Submit Purge Back Up Oracles Payables Database Preliminary Purge Candidates Invoice Listing Abort a Purge or Submit Purge Confirm Purge Submit Purge Export and Import the Database Tables and Indexes Review Purge Results Contact the DBA Final Purge Register Listing Rejected Invoices Listing Final Purge Statistics Report Oracle Payables lets you purge suppliers. and suppliers that you no longer need to review on-line so you can maintain better access to your current transactions. purchase orders. you can easily purge invoices. and payments from your database Oracle Payables 59 . invoices. With Oracle Payables.Purge Oracle Payables provides a powerful and easy-to-use purge feature to help control your accounts payable and purchasing data.

and a last activity date. Oracle Payables only selects records which you have not updated since the last activity date you specify and which do not have any dependencies with other records you are not purging.Business Needs With Oracle Payables you can: • • • • • • Purge invoices and related records from your database Purge purchase orders. purchase order. invoice. except during the actual deletion of records. and Oracle Payables automatically selects all records and their related records which match your criteria to purge from the database. You can abort or restart a purge at any stage of the purge process. Oracle Payables selects records to purge based on criteria you specify. Oracle Payables provides information on the status of a purge during each stage of the process. including the invoice. receipt. payment. payment. requisition. receipt. a purge category. and supplier records that Oracle Payables selects to purge. and supplier records which you purged and summary statistics on the number of records you purged from each table. Specify a purge name. purchase order. 60 Oracle Financials Functional Overview . requisitions and related records from your database Purge unused and inactive suppliers from your database Specify criteria by which to purge data and review purge data before and after you purge Abort or restart a purge during any stage of the purge process Maintain summary information for records you purge Major Features Purge Submission An Oracle Payables feature you use to initiate a purge. Preliminary Purge Reports Oracle Payables automatically prints the Preliminary Purged Listings which let you review all requisition. Final Purge Reports Oracle Payables automatically prints several audit reports when it completes a purge.

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