You are on page 1of 10

Extending Functionality in Oracle Payables without Custom Code

Francis J. Breslin
Oracle Corporation
Introduction
Customers will often ask purely functional questions on
the phone support line. These questions are usually on
the order of “How do I ...”. Most times the analyst will
explain how to perform the procedure, then point to the
passage in the manual that describes this functionality in
depth. Sometimes even the most careful reading of the
Topical Essays does not provide an answer. In these
cases the analyst may just have to say: “Payables does
not have this functionality now, but I can log an
enhancement request."
If the desired functionality is critical, you could
customize an existing form or create a whole new form
or process to accomplish your needs. This opens up a
number of possible complications. Customizations
require careful design and coding, and you would have
to re-implement any customizations to a standard
process when you apply a patch from Support to update
that process.
You can explore another avenue when trying to
implement a process that is not explicitly defined in the
manuals. With sufficient knowledge of how the system
works, you can create a workaround that will implement
the functionality required, without actually writing any
custom code.
This paper will examine a workaround for five such
processes: third party payments, internal bank transfers,
manual journal entries made in Payables, supplier
refunds, and 1099 invoice adjustments after payment.
You implement third party payments and internal bank
transfers by manipulating how Oracle Payables posts
invoice and payment information to the General Ledger.
You implement manual journal entries and supplier
refunds by manipulating how Oracle Payables posts
zero amount invoices and Standard Invoice/Debit Memo
pairs.
These four procedures are based on the following
assumption: the ultimate purpose of the Payables
system is to post journals to the General Ledger system
that accurately reflect the Payables activity. If the
Payables system makes correct net accounting entries,
then the process is valid. The 1099 processing
workaround also uses Standard Invoice/Debit Memo
pairs, but does not rely directly on GL Posting.
Posting: The Ten Cent Tour
Since four of the proposed workarounds depend on how
Payables posts journals to the General Ledger, I will
give a quick overview of the AP to GL posting process.
Posting from Payables to the General Ledger is a two
step process. In the first step, the concurrent program
AP to GL Transfer takes information from invoice and
payment distributions and loads it into the
GL_INTERFACE table. The second step, Journal
Import takes the information from GL_INTERFACE
and populates GL_JE_BATCHES,
GL_JE_HEADERS and GL_JE_LINES.
The AP_INVOICE_DISTRIBUTIONS table holds
invoice accounting information. Payables populates
rows in this table through the Invoice Workbench, either
by operator data entry or by PO matching. During
posting, each row in this table generates two rows in the
GL_INTERFACE table. The AMOUNT column
holds the dollar amount for an invoice distribution.
DIST_CODE_COMBINATION_ID holds the Code
Combination ID (CCID) of the expense account entered,
and ACCTS_PAY_CODE_COMBINATION_ID
holds the CCID of the AP Liability account for a
distribution. This CCID defaults from the Supplier Site
record.
If AMOUNT is positive, Payables creates a debit to the
Expense CCID and a credit to the AP liability CCID. If
AMOUNT is negative, Payables makes a debit to the
AP Liability CCID and a credit to the Expense CCID.
The table AP_PAYMENT_DISTRIBUTIONS holds
the payment accounting information. Payables
populates rows in this table when you confirm a
payment batch, or when you create QuickChecks and
Manual Payments. The rows in this table are related to
rows in the AP_INVOICE_DISTRIBUTIONS table
by the column INVOICE_DISTR_LINE_NUMBER.
Each row in this table also generates two journal entries
in the GL_INTERFACE table during posting. The
AMOUNT column holds the amount for the payment
distribution. DIST_CODE_COMBINATION_ID
holds the CCID for the Cash account defined for the
bank account on which the payment is being made. The
column ACCTS_PAY_CODE_COMBINATION_ID
holds the CCID of the AP Liability account for the
distribution and is the same as the AP Liability CCID of
the related Invoice Distribution.
If AMOUNT is positive, Payables creates a debit to the
AP Liability CCID and a credit to the Cash CCID. If
AMOUNT is negative, the system creates a debit to the
Cash CCID and a credit to the AP Liability CCID.
Format
I will present each of the functionality workarounds in
the following format:
Functionality name: The name and a short description.
Overview: A high level description of the workaround,
explaining in general terms how the process works.
Setup: What one time setup steps are required.
Processing: What transaction processing you need to
do. What GL journals will Oracle Payables create when
the posting concurrent programs are run?
Third Party Payments
A third party payment is when you create an invoice to
one supplier, but ultimately send a payment on this
invoice to another supplier. One of the most common
examples of this functionality would be the use of
procurement cards to handle some purchasing, such as
using a company credit card to purchase office supplies.
An invoice with a distribution to the office supplies
account is created for the office supply vendor, but the
payment made by check is to the credit card company.
This is troublesome in Oracle Payables because in order
to cut a check to the credit card company an invoice
must be created. The supplier invoice is not being paid,
at least not by reducing the cash in a bank account. It
would be possible to zero out the supplier invoice and
create an invoice directly to the credit provider, but
1099 processing makes this non-viable. In order for
Payables to include a 1099 invoice in the 1099 form for
a supplier, you must make a payment on that invoice to
that supplier.
Overview
You implement third party payments using the following
procedure. Create an invoice (the original invoice) to
the supplier from which the purchase was made. Pay the
original invoice using a special “dummy” bank account
that has as its cash account an account of type Liability
(the third party payee liability account). Later you
create an invoice to a supplier that represents the third
party payee. This invoice’s distributions will have the
third party payee liability account as the expense
account. Pay this invoice in a regular payment batch.
Setup
Create Account Segment values. (Required)
GL Responsibility, Segment Values form
[N] > Setup > Financials > FlexFields > Key > Values
In the Find Key Flexfield Segment window, enter
“Oracle General Ledger” in the Application field,
“Accounting” in the Title field, the name of the account
structure you are using in Payables in the Structure field,
and “Account” in the Segment field. Click the [Find]
button. The system displays a list of valid account
values. Create a new account segment value for each
third party payee you want to track separately. If
purchasing is done using one of three credit card
accounts, then you should create three new account
values. The exact value used will be dependent on the
numbering scheme at your site. Each new account value
created must have the qualifiers Allow Posting = “Yes”
and Account type = “Liability”.
Create Accounting Code Combinations (Optional if
Accounting Flexfield allows for dynamic insertions,
required otherwise.)
GL Responsibility, GL Accounts form
[N] > Setup > Accounts > Combinations
Enter the full code combination for each third party
payee you want to track to separately. Use a value
created above in the account segment. The values for
the other segments should be entered according the
account numbering scheme at your site. Accept all the
defaults the system offers for the other fields in this
form.
Create “Dummy” Bank Account (Required)
AP Responsibility, Bank form
[N] > Setup > Payments > Banks
Enter the bank and bank branch Name in such a way as
to identify it as a non-standard bank and bank branch.
The description should explain the exact nature of the
bank. You need to define at least one bank and bank
branch. You should relate all of the various bank
accounts used for your third party payees to one bank
and bank branch.
Click the [Accounts] button. The Accounts window will
display. In the Name field, enter something that will
describe the third party payee. If the third party payee is
a credit card company you could enter the name and
possibly the account number. Leave the other fields in
this region to the default values. You need to create one
account for each third party payee.
Choose GL Accounts in the alternate region drop down
field. In the Cash Account field enter the code
combination created for this third party payee. If you
are using reconciliation accounting, also enter this code
combination as the cash clearing account.
Click the [Payables Documents] button. The Payment
Documents window will display. Enter the Payment
Document Name. This is a free form character field.
You should enter “Combined” as the Disbursement
Type. You can use any Payment Format in the LOV,
since you will not be printing the payments.
Choose Additional Information in the alternate region
drop down field. Enter 0 as Last Used and some very
high number (999999) as the Last Available document
number. You should leave the number of setup
documents and the clearing days blank.
Create New Pay Group (Required)
AP Responsibility, QuickCodes form
[N] > Setup > Quickcodes > Payables
Enter “Pay Group” in the Type field, something
descriptive, such as “CitiBank Credit Card Invoices” in
the Name field, and a meaningful description for
Description field. Let all other fields keep the defaulted
value. You should create one Pay Group One for each
third party payee.
Create Distribution Set (Optional)
AP Responsibility, Distributions Sets form
[N] > Setup > Invoices > Distribution Sets
If the invoice to the third party payee will only have one
distribution for the full amount of the invoice, then a
distribution set should be assigned to the supplier site to
speed up data entry.
In the top portion of the Distribution Sets form enter
something descriptive in the Name and Description
field. These are free form character fields. Leave the
other fields as defaulted. In the lower portion, enter “1”
in the Num field and “100” in the Percent field. Enter
the third party payee liability code combination for the
third party payee in the Account field. Leave the other
fields as the defaults.
Create New Supplier and Supplier Site (Required)
AP Responsibility, Suppliers form
[N] > Suppliers > Entry
Enter the Supplier and Supplier Site records for the third
party payee as any other supplier. The actual values for
the various fields are dependent on the policies at your
site. Ordinarily there would be one Supplier and
Supplier site per third party payee, but there could be
situations where you would have more than one supplier
site to a supplier. You could have several credit card
accounts with the same credit card provider. In that case
you could create Supplier record (CitiBank Visa), and
multiple Supplier Site records (Account #1, Account #2,
Account #3, etc.). Unfortunately the Supplier site name
only allows for 15 characters and most credit card
account numbers are 16 digits. If you are using a
distribution set, you assign it in the Accounting alternate
region of the Supplier Site window.
Processing
I will use the following business scenario to illustrate
third party payment processing. You have made a
$100.00 credit card purchase, on a CitiBank Visa Card,
for office supplies. You have already done all required
setup.
Create Original Invoice
AP Responsibility, Invoice WorkBench
[N] > Invoices > Entry > Invoices
Processing of third party payments begins with the
Invoice to the original supplier. You should enter this
invoice according to your ordinary procedures with two
exceptions. The Pay Group for the invoice should be
the Pay Group that you created for CitiBank Visa (as the
third party payee). You should enter “Immediate” for
the terms. This assures that AutoSelect will pick up the
invoice in the correct payment batch. Approve this
invoice using normal procedures.
The $100.00 invoice will generate the following
journals in the General ledger:
Account Debit Credit
Office Supplies 100.00
AP Liability 100.00
Pay Original Invoice on “Dummy” Bank Account
AP Responsibility, Payments WorkBench
[N] > Payments > Entry > Payments or Payment Batches
Now pay the original invoice on the bank account
created for CitiBank Visa. If you are only paying one
supplier, you should use a manual payment. This is one
place where you must be careful. The system has no
way to validate that the invoice being paid is actually for
the third party payee associated with the bank account.
Since you are not actually sending this payment to the
vendor, you do not want to include any invoices that are
not being paid by the third party payee.
If you are paying more than one supplier at a time, you
should use a payment batch. Start the Payment
WorkBench as usual and begin to enter a payment batch.
Enter the bank account and pay group that you set up for
CitiBank Visa. You should enter all other options in the
Payment Batches form as usual.
Process the payment batch as usual with the following
exception. You should not print the file created by this
payment batch. After you confirm the payment batch,
Payables will post the following journals:
Account Debit Credit
AP Liability 100.00
CitiBank Visa 100.00
Create Invoice to Third Party Payee
AP Responsibility, Invoice WorkBench
[N] > Invoices > Entry > Invoices
You do the rest of the processing after you receive the
bill from CitiBank. Create an invoice to the Supplier
and Supplier Site you setup for CitiBank Visa. If you
only want one distribution for the full amount of the
invoice, you can use a distribution set to speed data
entry. If you need to record each item on the bill
separately as an invoice distribution, you can use a
descriptive flexfield on the Invoice Distribution table to
track reference numbers. In either case you MUST use
the third party payee liability account set up for
CitiBank Visa as the distribution account. You then
approve this invoice as usual.
Assuming that there is only one item in the CitiBank bill
this time, The invoice will generate the following
journals in the General ledger:
Account Debit Credit
CitiBank Visa 100.00
AP Liability 100.00
Pay Invoice to Third Party Payee
AP Responsibility, Payment WorkBench
[N] > Payments > Entry > Payments or Payment Batches
Based on the invoice’s payment terms, AutoSelect will
eventually select the second invoice for payment, or you
can pay it using a Manual Payment or a QuickCheck.
There is no special processing for the payment to the
third party payee. After you confirm the payment,
Payables will post the following journals:
Account Debit Credit
AP Liability 100.00
Cash 100.00
The net accounting is
Account Debit Credit
Office Supplies 100.00
Cash 100.00
All of the AP Liability entries and CitiBank Visa entries
cancel each other out leaving the correct net journal
entry. The accounting code combination used in the
third party payee’s bank account must be of type
Liability for the interim accounting to be correct. This
is because even though you have paid the original
invoice (reduced the AP Liability), you are still liable
for the amount.
Internal Bank Transfers
Many Payables operations use several bank accounts to
make payments. From time to time it may be necessary
to transfer funds from one bank account to another. You
do this by calling the sending bank and directing them to
transfer funds between accounts in the same bank, or to
wire funds to an account with a different bank.
Oracle Payables does not directly support this kind of
transaction. You could use a manual journal entry in
GL, but it could take some time.
Overview
You implement internal bank transfers by creating an
invoice to a Supplier and Supplier Site that represents
the receiving bank account, then paying it on a wire
payment from the sending bank account. The account
on the invoice distribution is the cash account for the
bank account receiving funds in the transfer.
Setup
Create Distribution Set (Required)
AP Responsibility, Distributions Sets form
[N] > Setup > Invoices > Distribution Sets
This distribution set will hold the accounting code
combination for the cash account in the receiving bank.
In the top portion of the Distribution Sets form enter
something descriptive in the Name and Description
field. These are free form character fields. Leave the
other fields as defaulted. In the lower portion, enter “1”
in the Num field and “100” in the Percent field. Enter
the code combination of the cash account of the bank
account for the receiving bank. Leave the other fields as
the defaults. You should create one distribution set for
each bank account in your system.
Create Supplier and Supplier Site (Required)
AP Responsibility, Suppliers form
[N] > Suppliers > Entry
Enter the Supplier and Supplier Site records that
represent the receiving bank account. The actual values
for the various fields are dependent on the policies at
your site with the following exceptions. The default
Terms should be “Immediate”, the Payment Method
should be “Wire” and the default distribution set should
be the one created for the receiving bank account. You
assign the terms and the payment method in the Payment
alternate region. You assign the distribution set in the
Accounting alternate region. You should create one
supplier for each bank, and one supplier site for each
bank account.
Create Payment Document in Sending Bank
(Optional)
AP Responsibility, Banks form
[N] > Setup > Payment > Banks
Since you are not going to send any payments to
suppliers, you should make the payment on a document
created specifically for that purpose.
Open the Banks form and query the sending bank. Click
the [Accounts] button. This will display the Accounts
window. Query up or use the down arrow to display the
sending bank account. Click the [Payables Documents]
button.
In the Payment Document window enter a new payment
document. Make the name descriptive, such as “Bank
Transfers". The Disbursement type should be
“Recorded” and the Payment Format should be one of
type “Wire”.
In the Last Used field enter a number that is greater than
the largest number in Last Available for any other
payment document for this account.
You need to do this for each bank account that will be
receiving bank transfers.
Processing
I will use the following business scenario to illustrate
internal bank transfers. You need to transfer $1,000.00
from the Sun Trust Operating account to the Sun Trust
Reserve account. You have already done all required
setup.
Create Invoice to Receiving Bank
AP Responsibility, Invoice Workbench
[N] > Invoices > Entry > Invoices
After you contact Sun Trust and the transfer of funds has
been done, you create an invoice for $1000.00 to the
Supplier and Supplier Site set up for the Sun Trust
Reserve account. Due to the Supplier Site defaults, this
invoice will have Terms of “Immediate” and single
Distribution for $1,000.00 to the cash account for Sun
Trust Reserve. Approve the invoice as usual.
The Invoice will generate the following GL journals:
Account Debit Credit
Cash: Sun Trust Reserve 1,000.00
AP Liability 1,000.00
Pay Invoice From the Sending Bank
AP Responsibility, Payments WorkBench
[N] > Payments > Entry > Payments
You should pay this invoice immediately after you enter
it. Use the Payments form to enter a Manual Payment.
Enter “Sun Trust Operating” as the Bank Account,
“Bank Transfer” as the Document Name, “1,000.00” as
the Amount and “Sun Trust Reserve” as the Supplier
and Supplier Site. Click the [Enter/Adjust Invoices]
button. In the Select Invoices window enter the invoice
you created in the previous step.
The payment will generate the following GL journals:
Account Debit Credit
AP Liability 1,000.00
Cash: Sun Trust Operating 1,000.00
The net accounting is
Account Debit Credit
Cash: Sun Trust Reserve 1,000.00
Cash: Sun Trust Operating 1,000.00
This is the exact manual journal you would that have
made in this situation.
Manual Journal Entries
From time to time it may be necessary for you to make a
manual journal entry to correct some problem. Possibly
you used an incorrect account while creating an invoice
or a payment and it is too late to change them. If the
ordinary procedure of requesting such a journal entry
would cause unwanted delays, it is possible to emulate a
manual journal entry with Payables activity.
Overview
You implement a manual journal entry by creating either
a zero amount invoice or a Standard Invoice/Debit
Memo pair.
With a zero amount invoice, you create one or more
positive distributions to the accounts you want to debit,
and one or more negative distributions that sum to the
negative of the same amount to the accounts you want to
credit. You can use any supplier and supplier site for
this invoice, though you should create a special dummy
supplier for this purpose.
In a Standard Invoice/Debit Memo pair, you create a
Standard Invoice to the accounts you want to debit, and
a Debit Memo to the accounts you want to credit. It is
crucial that Standard Invoice and the Debit Memo sum
to zero.
In either case, you will use a zero amount manual
payment to “pay” the invoices so they do not show up in
aging reports. The bank account used to make the
manual payment must allow zero amount checks.
If the Payables Option Automatic Offset method is not
“None”, then you must use the Standard Invoice/Debit
Memo method. This is due a problem with zero amount
invoices and the Trial Balance report.
Set up
Create Supplier & Supplier Site for Manual
Journals (Optional)
AP Responsibility, Suppliers form
[N] > Suppliers > Entry
Enter the Supplier and Supplier Site records for a
“dummy” supplier you will use to make manual journal
entries. Take the system defaults for all fields except
Payment Terms which should be “Immediate”. There
should not be a need for more than one supplier site.
Set Bank Account to Pay Zero Amount Checks
(Required if not already set up this way)
AP Responsibility, Bank form
[N] > Setup > Payments > Banks
Open the Banks form and query the bank that will be
making the zero amount payment. Click the [Bank
Accounts] button. This will display the Accounts
window. Query up or use the down arrow to display the
correct bank account. Choose Payables Options in the
alternate region drop down field. Check the Allow Zero
Payments check box.
Since you will not be sending the checks made in the
manual journal process to a supplier, you should use a
special payment document so that you do not use valid
check numbers. Click the [Payables Documents] button.
In the Payment Document window enter a new payment
document. Make the name descriptive, such as “Manual
Journals”. The Disbursement type should be
“Recorded” and the Payment Format should be one of
type “Check”.
Choose Additional Information in the alternate region
drop down field. In the Last Used field enter a number
that is greater than the largest number in Last Available
for any other payment document for this account.
You need to do this for each bank account that will be
receiving bank transfers.
Processing
I will use the following business scenario illustrate
manual journal entries. You want to debit $500.00 to
the Office Supply account, $250.00 to the Freight
account and credit $750 to the Office Furnishings
account. Sun Trust Operating will be the payment bank
account. You have already done all the setup.
Create Zero Amount Invoice
AP Responsibility, Invoice WorkBench
[N] > Invoices > Entry > Invoices
Zero Amount Invoice Method: Create an invoice for
$0.00 to the Manual Journals supplier and supplier site.
Accept all system defaults. In the Distributions window
enter a distribution of $500.00 using the code
combination for Office Supplies, a distribution for
$250.00 using the code combination for Freight, and a
distribution for -$750.00 using the code combination for
Office Furnishings.
Standard Invoice / Debit Memo Method: Create a
Standard type invoice for $750.00 to the Manual
Journals supplier and supplier site. Accept all system
defaults. In the Distributions window enter a distribution
of $500.00 using the code combination for Office
Supplies, a distribution or $250.00 using the code
combination for Freight.
Create a Debit Memo type invoice for -$750.00 to the
Manual Journals supplier and supplier site. Accept all
system defaults. In the Distributions window enter a
distribution for -$750.00 using the code combination for
Office Furnishings.
In either case when you approve the invoices, Payables
will post the following journals to the GL:
Account Debit Credit
Office Supplies 500.00
AP Liability 500.00
Freight 250.00
Account Debit Credit
AP Liability 250.00
AP Liability 750.00
Office Furnishings 750.00
Pay invoices on a zero amount manual check
AP Responsibility, Payments WorkBench
[N] > Payments > Entry > Payments
You should make this payment immediately after
creating the invoices. Enter “Manual” in the Type field,
“Sun Trust Operating” in the Bank Account field,
“Manual Journals” in the Document Name field, “0” in
the Amount field and “Manual Journals” in the Supplier
and Supplier Site fields.
Click the [Enter/Adjust Invoices] button. In the Select
Invoices window, enter the zero amount invoice, or the
Standard Invoice and the Debit Memo depending on the
method used.
The payment of a zero amount invoice does not generate
any accounting information (that is part of the reason
why you can not use this method if you use Automatic
Offsets.) The payment of a Standard Invoice / Debit
Memo pair will generate the following GL journals:
Account Debit Credit
AP Liability 500.00
Cash: Sun Trust Operating 500.00
AP Liability 250.00
Cash: Sun Trust Operating 250.00
Cash: Sun Trust Operating 750.00
AP Liability 750.00
All of the AP Liability and Cash: Sun Trust Operating
cancel each other out leaving:
Account Debit Credit
Office Supplies 500.00
Freight 250.00
Office Furnishings 750.00
Which is the manual journal you would have created in
GL.
Supplier Refunds
In the ordinary operation of a Payables shop, there will
come times that a supplier will want to refund some
money. Perhaps they inadvertently overcharged for an
invoice or possibly there was a return of goods. The
usual processing would be to create a Credit Memo
invoice that would reduce the amount of the next
payment to the supplier. However, if the supplier sends
a check there can be a problem.
Oracle Payables does not handle receipts. The problem
is that there is no standard form or process that will
Debit the cash account of a payment bank.
Overview
Supplier refunds process is an example of a specific type
of manual journal entry.
If you are using the zero amount invoice method, you
enter a positive distribution to the cash account of the
bank account where you deposited the check. You will
also enter one or more negative distributions that sum to
the same amount to some expense accounts. If the
supplier identifies the invoices the refund is related to,
you can derive the expense accounts from that
information. It may be necessary to define a new
account and code combination to record miscellaneous
supplier refunds.
If you are using a Standard Invoice/Debit Memo pair,
you should make the Standard invoice to the cash
account of the bank account where you deposited the
check. The Debit Memo should be the negative amount
of the Standard Invoice to one or more expense
accounts.
Setup
Supplier and Bank
See Setup for manual journal entries.
Create Account Segment Values. (Optional)
GL Responsibility, Segment Values form
[N] > Setup > Financials > FlexFields > Key > Values
In the Find Key Flexfield Segment window, enter
“Oracle General Ledger” in the Application field,
“Accounting” in the Title field, the name of the account
structure you are using in Payables in the Structure
field, and “Account” in the Segment field. Click the
[Find] button. The system displays a list of valid
account values. Create a new account segment value for
miscellaneous supplier returns. This new account value
created must have the qualifiers Allow Posting = “Yes”
and Account type = “Expense”. The exact value you
use is dependent on the numbering scheme at your site.
Create Accounting Code Combinations (Required if
setting up an accounting code for miscellaneous supplier
refunds and dynamic insertions are not allowed.)
GL Responsibility, GL Accounts form
[N] > Setup > Accounts > Combinations
Enter the full code combination for the miscellaneous
supplier refund account. Accept all he defaults the
system offers for the other fields in this form.
Processing
I will use the following business scenario to illustrate a
supplier refund. ACME Office Supplies issued you a
check for $50.00 as a refund for an invoice to the
Office Supplies account. Sun Trust Operating is the
bank account that where you deposited the check. Sun
Trust Operating is also the payment bank account. You
have already done all required setup.
Create Zero Amount Invoice
AP Responsibility, Invoice WorkBench
[N] > Invoices > Entry > Invoices
Zero Amount Invoice Method: After you deposit the
check into Sun Trust Operating, create an invoice for
$0.00 to the supplier and supplier site that sent the
check. Accept all system defaults. In the Distributions
window enter a distribution of $50.00. Use the code
combination for bank account where you deposited the
check. Also create a distribution for -$50.00 using the
code combination for Office Supplies.
Standard Invoice/Debit Memo Method: Create a
Standard invoice for $50.00 to the supplier and supplier
site that sent the check. Accept all system defaults. In
the Distributions window enter a distribution of $50.00
using the code combination for bank account where you
deposited the check.
Create a Debit Memo invoice for -$50.00 to the supplier
and supplier site that sent the check. Accept all system
defaults. In the Distributions window enter a
distribution for -$50.00 using the code combination for
Office supplies.
In either case when you approve the invoices, Payables
will post the following journals the following journals to
the GL:
Account Debit Credit
Cash: Sun Trust Operating 50.00
AP Liability 50.00
AP Liability 50.00
Office Supplies 50.00
Pay invoices on a zero amount manual check
AP Responsibility, Invoice WorkBench
[N] > Payments > Entry > Payments
You should make this payment immediately after
creating the invoices. Enter “Manual” in the Type field,
“Sun Trust Operating” in the Bank Account, “Manual
Journals” in the Document Name, “0” in the Amount
and “Manual Journals” in the Supplier and Supplier Site.
Click the [Enter/Adjust Invoices] button. In the Select
Invoices window enter the zero amount invoice, or the
Standard Invoice and the Debit Memo depending on the
method used.
The payment of a zero amount invoice does not generate
any accounting information(and that is part of the reason
why you can not use this method if you use Automatic
Offsets.) The payment of a Standard Invoice / Debit
Memo pair will generate the following GL journals:
Account Debit Credit
AP Liability 50.00
Cash: Sun Trust Operating 50.00
Cash: Sun Trust Operating 50.00
AP Liability 50.00
All of the AP Liability entries and all but one debit entry
to Cash: Sun Trust Operating cancel each other out
leaving:
Account Debit Credit
Cash: Sun Trust Operating 50.00
Office Supplies 50.00
1099 Invoice Adjustments
During 1099 season, from about the beginning of
November through the following February, it may
become necessary to correct the 1099 information on an
invoice that you have long since paid and posted. If the
only change is to correct the 1099 type on an invoice
distribution, then you can change the old posted invoice
distributions directly. This is because this has no
accounting impact. However if the amount on a 1099
invoice distribution is wrong then you will have to do
some additional processing.
Overview
To adjust the amounts on a 1099 Invoice requires
creating a Standard Invoice / Debit Memo pair in the GL
period of the original invoice, even if you have to
reopen the period. You use the Debit Memo to back
out the original Invoice information. You do this by
creating negative distributions for each positive
distribution in the invoice that needs to be adjusted. The
Standard invoice has distributions with the correct
amounts. You then pay these invoices on a zero amount
check with a payment date in the original period. Then
you post everything and close the period.
You must use a Standard Invoice/Debit Memo pair
rather than a zero amount invoice due to how Oracle
Payables chooses which paid invoices to are included in
a supplier’s 1099 form. Oracle Payables includes an
invoice distribution on a supplier’s 1099 form if the
following conditions are met. The distribution’s invoice
is for the supplier in question. The invoice distribution
has a 1099 type. The balancing segment of the cash
account on the associated payment distribution is in the
list of balancing segments for the Reporting Entity
parameter, and the payment date is within the date range
parameters. Since payments made on zero amount
invoices generate no payment distributions, you can not
use a zero amount invoice to adjust a paid 1099 invoice.
Setup
There is no special setup required for adjusting paid
1099 invoices.
Processing
I will use the following business scenario to illustrate
adjusting a paid 1099 invoice. Able Consulting installed
a new computer network for you and was paid
$10,000.00. You entered an invoice in the May period
for $10,000.00 with a single distribution for $10,000.00
to the Consulting Services account. You used the 1099
type of MISC3 for this distribution. You generated the
1099s and sent them to your suppliers. A call is
received from Able Consulting indicating that $6,000.00
of the invoice was for hardware and software, thus not
1099 reportable. Able Consulting needs to get a 1099
form that only reflects $4,000.00.
Open May Period
GL Responsibility, Open and Close Periods form
[N] > Setup > Open/Close
Query MAY-97 in the Period field, or use the down
arrow until the cursor is in the MAY-97 period. In the
Status field enter “Open”. Commit.
AP Responsibility, AP Accounting Periods
[N] > Setup > Calendar > Accounting > AP Accounting
Periods.
Query MAY-97 in the period field or use the down
arrow until the cursor is in the MAY-97 period. In the
Status field enter “Open”. Commit.
Create Debit Memo
AP Responsibility, Invoice WorkBench
[N] > Invoices > Entry > Invoices
Create a Debit Memo for the negative amount of the
original invoice (-10,000.00). The Terms should be
Immediate and the GL Date should be the GL date of
the original invoice. You should create the distributions
by matching the Debit Memo to the original invoice.
This will assure that you use the correct accounting and
1099 type.
Create Standard Invoice
Create a Standard Invoice for the same amount as the
original invoice ($10,000.00). The Terms should be
Immediate and the GL Date should be the GL date of
the original invoice. You should create the distributions
with the correct amounts and 1099 types. In this case
you would enter a $4,000.00 distribution to the
Consulting Services account with a MISC3 1099 type.
You would also enter a $6,000.00 distribution to the
Consulting Services account with a NULL 1099 type.
The net amount must be the same as the original invoice
since you have already made this payment to the
supplier.
Pay Invoices on a Zero Amount Manual Payment
AP Responsibility, Payment WorkBench
[N] > Payments > Enter > Payments
Since you are not sending a payment to the supplier, a
manual check would be best way to pay these invoices.
You should pay these invoices immediately after you
create them to avoid the chance that AutoSelect will
pick them up in a payment batch. The Payment date
should be some date in the original period, other than
that you should make the manual payment as usual using
an appropriate bank account and payment document.
Post Journals
AP Responsibility, Submit Requests form
[N] > Other > Requests > Run
Run the AP to GL Transfer concurrent program to post
these journals to the GL. To be sure that only journals
created in this process are posted use the last day of the
original period as the post through date.
Close Original Period.
GL Responsibility, Open and Close Periods form
[N] > Setup > Open/Close
Query MAY-97 in the Period field, or use the down
arrow until the cursor is in the MAY-97 period. In the
Status field enter “Closed”. Commit.
AP Responsibility, AP Accounting Periods
[N] > Setup > Calendar > Accounting > AP Accounting
Periods.
Query MAY-97 in the Period field, or use the down
arrow until the cursor is in the MAY-97 period. In the
Status field enter “Closed”. Commit.
Conclusion
The goal of this paper is two fold.: to give you an idea
of the flexibility of Oracle Payables and to provide a few
concrete examples of this flexibility. You should always
seek a non-customized solution to a problem before
resorting to fiddling with the code. It is easier to
maintain and much easier to support.
About the Author
Francis Breslin has been working as a Support Analyst
for over three years in the Orlando, Florida Support
Center. He has about eight years experience with
designing, implementing, and supporting financial
systems using Oracle databases, forms and reports.