Basic Concepts in Oracle AP

Basic Concepts in Oracle AP - Part1

Oracle 11i Financials - APThe Payables module in Oracle Applications allows you to pay your suppliers for merchandise and services and enables you to manage your procurement cycle. This module consists of two integrated workbenches, Invoice and Payment.

This ReferencePoint describes Accounts Payable (AP) and explains how to manage payments to vendors and suppliers.

The Payables WorkflowOracle Payables is integrated with Oracle Purchase and Oracle Cash Management. When you purchase goods or services from a supplier, an encumbrance is created. As soon as you receive the goods or services, the encumbrance becomes a liability that remains in your books until you pay for goods or services.

Figure shows the integration of Oracle Payables, Oracle Purchase, and Oracle Cash Management:

Integration of Payables, Purchase, and Cash Management

Oracle Purchase, similar to all other feeder systems, is also integrated with Oracle GL. You can transfer all accounting transactions generated and created in Oracle Payables to Oracle GL through GL_INTERFACE_TABLE.

To integrate Payables with GL:

1. Run Payables Transfer from Oracle Payables to the General Ledger process. Using this process, you can transfer invoice and payment accounting to the GL_INTERFACE table.

2. Run the Journal Import program from Oracle GL to transfer the invoice and payment accounting from the GL_INTERFACE table to GL. This creates unposted journal entries in GL, which can be reviewed and finally posted. The posting process updates account balances.

How to Set Invoice WorkbenchInvoice Workbench enables you to enter, adjust, modify, and review invoices and invoice batches that your customers have raised on you.

You can integrate the Invoice and Payment workbenches through the Invoice Overview and Payment Overview windows. You can use either of these workbenches to review the information in the other workbench.

The Setup options in Oracle allow you to manage the procurement cycle and save money for your organization. You can define the Payables system to:

Pay suppliers on time

Get maximum discounts on payments

Prevent duplicate billing and invoicing

Perform multiple matching of Invoice and Purchase Orders

Avoid overdrafts on bank accounts

Review information online to check the status of payments

There are various options that you can set to work with the invoice feature in Oracle Payables. These include the options for suppliers, invoices, and distribution sets.

Supplier The Suppliers window enables you to enter information about individuals and organizations that supply goods and services. You can enter employees as suppliers to enable the system to make payments against expenses.

If any of the suppliers operate from multiple locations, you need to enter the supplier information only one time. You can assign multiple sites to each of the supplier's locations. A site is a location from where the supplier runs a specific business. Sites can be designated as pay sites, purchasing sites, and REQ only sites. On the basis of supplier definition, you can purchase goods or services and send payments to a site.

How to Define a Supplier

To define a supplier:

1. Log on to Oracle Applications. Select Switch Responsibility -> Payables, from the main menu. Select Suppliers –> Entry. The Suppliers form opens, as shown -The Suppliers Form

2. Enter a name, tax payer ID, and a number signifying your customer ID. Select the Classification tab. In the Type field, select a type from the LOV for the supplier.

3. Open the Accounting tab. Enter a distribution set to automatically enter distributions for an invoice when it does not match a purchase order. For example, you can create a distribution set for stationery supplier. This allocates stationery expense on an invoice to a specific number of end users.

4. Open the Control tab. In the Invoice Match option, select either Purchase Order or Receipt.

If you enable any of the HOLD options for a specific supplier, Payables will withhold payments to that supplier.

5. Click the Payment tab. In the Terms field, select a Payment Term agreed upon by you and your supplier. Select Pay Group to assign to the supplier, as shown earlier in screenshot-2

6. Enter a priority number between 1 and 99 in the Payment Priority window with one having the highest and 99 the lowest priority. Select Terms Date Basis to define the date from which Payables calculates a scheduled payment from a supplier.

7. Select Pay to determine the pay date for a supplier's invoice. Click the Bank Accounts tab to define the supplier's bank accounts.

8. Select Purchasing. Define the organization's Ship-To and Bill-To locations among other options, where the supplier sends the goods to the Ship-To location and the invoices for goods or services to the Bill-To location.

9. Select the Receiving tab. The options to open the Receiving tab are:

Enforce Ship-To Location: Determines whether or not the receiving location is the same as the Ship-To location.

Receipt Routing: Defines the flow of goods after the supplier has delivered the same at the Ship-To location.

Match Approval Level: Allows you to online match receipts and purchase orders to ensure that you pay only for the ordered goods and services.

QuantityReceived Tolerance: Defines the maximum range of over-receipt in addition to the quantity ordered, based on the percentage you enter.

Tolerance: Defines how the purchase department handles the receipts that exceed the QuantityReceived Tolerance based on the selected value.

Days Early and Days Late Receipt Allowed: Defines how many days before and after the date of receipts of goods, you are ready to accept the delivery.

Receipt Date Exception: Defines how the purchase department handles receipts that exceed the Days Early and Days Late Receipt Allowed.

10. Save and click the Sites button. The Supplier Sites form opens, as -

The Supplier Sites Form

11. Type a site name, EC-NYC in the Site Name text box. Type the address in the Address option. Select the General tab and select the Pay and Purchasing check boxes in the Site Uses option. The concerned supplier uses this site for receiving purchase orders as well as payments. Select the Contacts tab and enter a contact name and information for the supplier.

12. Select the Accounting tab. Enter the default GL accounts that will be updated when you deal with the supplier. Click the Bank Accounts tab and enter the supplier's bank account data. Save and close the Supplier Sites form.

Payment TermsYou need to define Payment Terms to assign them to an invoice. This allows you to automatically create scheduled payments when you submit an invoice for approval. A Payment Term consists of one or more Payment Term lines where each line creates a scheduled payment. Each scheduled payment has an associated due date or a discount date based on:

A specific day of a month, such as the tenth day of the month.

A specific date, such as January 10, 2003.

The number of days added to the terms date, such as 10 days after the terms date.

A special calendar that mentions a due date for the period that includes the invoice terms date. Due dates can be based on a special calendar but not discount dates.

To define a Payment Term:

1. Select Setup –> Invoice -> Payment Terms from the main menu. The Payment Terms form opens, as shown -

The Payment Terms Form

2. Enter a name for the Payment Term.

3. Enter a Cut-off Day if you are entering Day of Month terms. The Cut-off Day defines the day of the month. After the Cut-off Day, due and discount dates will be in a future month depending upon the value entered in the Months Ahead field. For example, the values of Cut-off Day are 10, Months Ahead is 0, and Day of Month is 15. If you enter an invoice with a terms date of March 12, Payables will set the due date to April 15.

Note You can also use Fixed Date or Days terms instead of Day of Month

terms, but you cannot select two different terms.

4. Enter 100% or less if payment is made in installments in the % Due field. Click the First Discount tab.

5. Enter the discount percentage in the % Discount field. Press Tab to go to the Days field. Enter a value 10 in the Days field. This Payment Term will provide a 2% discount if payment is made within 10 days of the Term Date. Define the second and third discounts.

6. Save and close the Payment Terms form.

Distribution SetsA distribution set creates distributions for an invoice where the Purchase Order does not match with the invoice. You need to assign distribution sets to a supplier site where the Payables module uses them for every invoice assigned to the supplier site. If a distribution set has not been assigned to a supplier site, select one when you enter the invoice.

The two types of distribution sets are:

Full distribution set: Contains the percentages in which the distribution of the Invoice amount is created.

Skeleton: Contains no predefined percentages. You need to enter the amount when you enter the invoice.

To define a distribution set:

1. Select Setup –> Invoice –> Distribution Sets. The Distribution Sets form opens, as shown –

The Distribution Sets Form

2. Enter a name for the set.

3. Click the Num field. Type 1 for the first distribution line.

4. Enter the percentage of the invoice amount you want to distribute among the distribution line in the % field.

5. Type the account code to which this distribution line belongs in the Account field. For example, you can enter depart 001.

Note You can create as many distribution lines as you need, but ensure that the total of the values of the % field equals 100.

6. Save and close the Distribution Sets form.

Invoice TolerancesThe Invoice Tolerances window allows the end user to define acceptable tolerances, allow variances between invoices, purchase orders, and obtains receipts and tax information. You can define tolerances in percent or absolute terms.

Tolerances in Payables store a matching or a tax hold in an invoice, if the value exceeds the tolerance levels defined in the Invoice Tolerances window. When you submit an invoice for approval, Oracle Payables checks whether the invoice matches the purchase order or the receipt within the purchase order tolerance limits you have set.

When you submit the invoice with a tax amount for approval, Payables checks whether the invoice tax amount equals the calculated tax amount within the tolerance limits you have defined.

If you define a percentage-based tolerance, Payables calculates the tolerance, based on the invoice amount including the tax. For example, the invoice amount is USD 100, the tax rate is 10%, and the tax tolerance is 5%. In this case, an Invoice will not be raised on a Tax variance hold if the tax distribution amount entered ranges from USD 9.5 to USD 10.5.

To define Invoice Tolerances, select Setup –> Invoice –> Tolerances from the main menu. The Invoice Tolerances form opens, as shown-

The Invoice Tolerances Form

Invoice ApprovalsThe Invoice Approvals window defines the rules that manually hold or release invoices. You can create hold rules, such as APPROVAL REQUIRED, and release rules, such as APPROVED. You can define as many approval rules as you need.

To define Invoice Approval code:

1. Select Setup –> Invoices –> Approvals, from the main menu. The Invoice Approvals form opens, as shown -

The Invoice Approvals Form

2. Enter a name and description for the code.

3. Select a predefined type in the Type field.

4. Select the Accounting Allowed option if you are defining a hold code.

5. Enable the Manual Release Allowed option manually if you are defining the release code. It releases the hold on an invoice.

6. Save and close the Invoice Approvals form.

InvoicesOracle Payables enables the end user to enter and work with the following types of invoices:

Standard: Indicates the basic form of invoice that represents a payment due to a supplier for goods or services purchased.

Credit Memo: Indicates a negative amount invoice that is received from the supplier for goods and services purchased. You can use it as a price correction tool.

Debit Memo: Represents a credit amount, which the supplier owes you. This document is created and sent to the supplier.

Purchase Order Default: Enables you to match the invoice against the purchase order. While you enter an invoice, the purchase order number entered automatically copies supplier related information from the purchase order to the invoice.

Mixed: Allows the ordered quantity against purchase orders and other invoices, both in excess and in deficit.

Quick Match: Enables you to match an invoice against all shipment or receipt lines in a purchase order.

Prepayment: Enables you to enter an advance payment for expenses to a supplier or an employee. For example, you may need to make a deposit when placing an order or make advance payments for travel expenses.

Withholding Tax: Enables you to remit taxes invoice withheld from the tax authority.

Expense Report: Enables you to enter amounts due to an employee for business-related expenses.

Interest: Enables you to calculate the interest for overdue invoices and create interest invoices for relevant suppliers. You need to enable the Allow Interest Invoice option in the Payables options window.

Figure shows the invoicing process:

Overview of the Invoicing Process

Invoice Gateway vs. Invoice Workbench

You can enter invoice information using either the Invoice Workbench or the Invoice Gateway.

The Invoice Gateway enables you to enter large volumes of standard and credit memo invoices that are not complex and do not require extensive online validation or change in values during data entry.

The Invoice Gateway enables Purchase Order matching and applying prepayments to invoices being entered.

The Invoice Workbench enables you to enter complex invoices that require extensive online validation and change of values that appear by default during data entry. You can also use the Invoice Workbench to perform an action on the invoice immediately after entering it. For example, you may need to apply a payment immediately upon entering the invoice information and you can do it from the same window.

How to Enter an Invoice

To create a Purchase Invoice batch and to enter a Purchase invoice:

1. Log on to the system. Select Switch Responsibility -> Payables, from the main menu.

2. Select Invoices –> Entry –> Invoice Batches, from the main menu. The Invoice Batches form opens, as shown -

The Invoice Batches Form

3. Enter a batch name and a Payment Term. Click the Invoices button. The Invoices form opens, as shown -

The Invoices Form

4. Select Type as Standard. Select a Supplier. When you select a Supplier, the Supplier Number and Site is automatically populated.

5. Enter an invoice date in the Invoice Date column. Enter the invoice number as 100.

6. Select the Invoice Currency as USD. Enter the invoice amount as 10, 000.

7. Type GL Date = System Date and Terms Date = System Date.

8. Change the Payment Term if needed. The default value defined will be similar to the Invoice Batches form.

9. Select a payment method such as Check. Select Pay Group, if needed.

10. Save the date in the Invoices form. Do not close the Invoices window.

How to Enter Invoice Distributions

You may need to distribute the entered invoice to various departments in your organization. For example, you have an expense item, Furniture. You may need to allocate its cost to three departments.

Use the invoice created in the earlier exercise. To enter invoice distributions:

1. Click the Invoice line and then click the Distributions button. The Distributions form opens, as shown –

The Distributions Form

2. Type one in the Number field. Select Item in the Type field.

3. In the Amount field, type 3500.

4. Type a GL Date or accept the system date.

5. Type the account combination for the first department for which the cost is being allocated in the Account field.

6. Type 2 in the Num field. In the Type field, select Item. In the Amount field, enter 4000. Type a GL Date and the account combination for the second department, as shown in the Screenshot above.

7. Repeat the steps for the third number. Ensure that the Invoice Total matches the Distribution Total.

8. Save and close the Distributions form.

How to Enter Distributions Using a Distribution Set

Prerequisite: Create a distribution set.

To enter an invoice distribution using a distribution set:

1. Open the Invoice Batches window.

2. Select View -> Find, from the top menu. The Find Invoice Batches window opens. Enter the name of your invoice batch. Click the Find button. The Invoice Batches form opens with the invoice batch.

3. Click the Invoice button. The Invoices form opens.

4. Enter Type as Standard.

5. Enter your supplier and press Tab to go to the Invoice Date field. Type an invoice date.

6. Enter the invoice number and invoice amount.

7. Click the Distribution Set field. Select the distribution set that you have created earlier and save.

8. Click the Distribution button. The Distributions window opens where you can see that the distribution for your invoice is complete.

9. Save and close the Invoice Batches form.

How to Create a Scheduled Payment

After entering an Invoice, the Payables module uses the Payment Terms and the Term date specified to automatically schedule payments. The Payment Terms parameters enable you to calculate the due date for the invoice, the discount date, and the discount amount for each scheduled payment.

To create a scheduled payment for an invoice:

1. Open the Invoice Batches window. Select Invoices –> Entry –> Invoice Batches. The Invoice Batches window opens.

2. Select View –> Find to query the Invoice Batch from the top menu.

3. Click the Invoices button in the Invoice Batches window. The Invoice form opens.

4. Enter a Standard invoice using a distribution set. Save date in the Invoice form.

5. Click the Scheduled Payments button. The Scheduled Payments form opens, as -

The Scheduled Payments Form

6. Enter 70% of your invoice amount in the Gross Amount field.

7. Click the Split Schedule button. A scheduled payment new line is automatically created in the Scheduled Payments form.

8. Ensure that the invoice amount matches the gross amount total.

9. Save the date in the Scheduled Payments form.

How to Create Freight Distribution

To create freight distribution in Oracle Payables:

Enable the Automatically Create Freight Distribution option when you parameterize the Payable options. You can enable this option in the Invoice tab embedded in the Payable Options form.

Allocate freight across invoice distributions.

Manually enter freight distributions.

To create freight distribution:

1. Open the Invoice Batches window and select Query to find the invoice batch option.

2. Select your batch. Click the Invoices button.

Note If you cannot view the Freight Amount field and the Create Freight Distribution check box, select Folder –> Show Field from the top menu.

3. Create a Standard invoice in the Invoices form.

4. Enter the invoice number and invoice amount in the Invoices form. The Invoice Amount here includes Freight.

5. Enter a value in the Freight Amount field.

6. Select the Create Freight Distribution check box. The Freight window opens. Type your Freight distribution account here. Click OK.

Note If you have already entered a Freight distribution account when configuring the Payable option then that account code will appear by default.

7. Save the Invoices form.

8. Click the Distributions button to verify the freight distribution. The Freight line appears, by default.

9. Add another distribution line. Save and close the Invoices form.

How to Allocate Freight

To enter freight distribution and allocate it across two departments or divisions:

1. Open the Invoice Batches window and select Query to find the invoice batch.

2. Click the Invoices button. The Invoices form opens. Enter an invoice.

3. Set Type as Standard and select a supplier name.

4. Enter an Invoice number and the Invoice amount. The invoice amount includes the freight amount.

5. Click the Distributions button. The Distributions form opens.

6. Enter a two-line distribution for your invoice.

Note

The amount distributed here will be net freight amount. The distribution is being made across two different departments. While entering the account code, ensure that different values are selected for the Department segment.

7. Save the date. Click the Allocate button. The Charge Allocations form opens, as shown -

The Charge Allocations Form

8. Select Freight in the Type field and select the Prorate check box.

9. Enter the Freight amount to be allocated to each department in the Amount field. Click the Select/Unselect All button.

10. Click the OK button. You will automatically return to the Distributions window. The Freight allocation is prorated on the basis of the amounts in the two item distribution lines. Save and close the Charge Allocations form.

How to Match Invoices with Purchase Orders

Best business practices include payment for the goods that have been ordered. For this, you need to match your invoice against the payments made and the original purchase order.

Oracle Payables allows you to either match a single invoice against multiple purchase orders or distributions or match multiple invoices with a single purchase order or distribution.

Using Oracle Payables, you can create Holds on invoices where you are being billed in excess of the amount and quantity tolerances that you define. You will not be able to make a payment on the invoices unless the hold is removed.

There are three Match Approval levels:

2-Way:

The quantity billed is matched against the quantity ordered.

The invoice unit price is matched against the purchase order line unit price.

3-Way:



The quantity billed is matched against the quantity received.

4-Way:



The quantity billed is matched against the quantity received.

The quantity billed is matched against the quantity accepted.

You need to create an Invoice and match it against the original Purchase Order.

Prerequisite: You need to create a Purchase Order using the Oracle Purchasing module. Remember to note the Purchase Order Number.

To understand the three Match Approval Levels:

1. Select Switch Responsibility -> Oracle Payables, from the main menu.

2. Select Invoices –> Entry –> Invoice Batches.

3. Query your invoice batch. Select View –> Find, from the top menu.

4. Click the Invoices button. In the Invoices window, enter an invoice.

5. Set Type as PO Default. The PO Number window will appear. Enter your purchase order number here. Click OK.

6. Enter an invoice number and an invoice amount.

7. Click the Match button. The Find Purchase Orders for Matching form opens, as -

The Find Purchase Orders for Matching Form

8. Accept the default PO number. Click the Find button. The Match to Purchase Orders form opens, as shown-

The Match to Purchase Orders Form

9. Select the Match check box and click the Match button. Save and close the Match to Purchase Orders form.

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How to Apply Holds

You can apply holds on invoices, scheduled payments as well as on supplier sites. Holds on an invoice prevent you from generating a payment referencing that invoice. Holds can be applied either by the system or manually as:

Manual Holds: Indicate user-defined holds. You can define manual holds to prevent payment of the invoice or even prevent the account for the invoice. Manual holds cannot be released automatically and need to be released manually.

System Holds: Indicates a hold other than a user-defined hold. If Payables applies a system hold on an invoice, you need to rectify it before the hold is released.

Invoice Holds: Applies one or more Invoice Hold Reason Approvals or holds manually to an invoice using the Invoice Holds window of the Invoice Workbench.

To apply an Invoice Hold:

i. Open the Invoice Batches window and Query and select the invoice batch.

ii. Click the Invoices button. In the Invoices form, select the invoice to which you want to apply an invoice hold.

iii. Click the Holds button. Apply a hold by selecting a Hold name.

iv. Save and close the Invoices form.

Scheduled Payment Hold: Holds the payment on a part of an invoice by placing one or more of the scheduled payments on hold in the Scheduled Payments window of the Invoice Workbench.

To apply a Scheduled Payment Hold:

i. Open the Invoice Batches window and Query and select the invoice batch.

ii. Click the Invoices button. In the Invoices form, select the invoice to which you want to apply a scheduled payment hold.

iii. Click the Scheduled Payments button. Select the Hold check box to apply a hold to this scheduled payment. If you want to partially pay an invoice that has only one scheduled payment, choose Split to break the scheduled payment into two. In this way, you can place one of the lines on hold, while leaving the other free for payment. Save and close the Invoices form.

Supplier Hold: You can enable the Hold All Payments, Hold Unapproved Invoices, or Hold Unmatched Invoices option in the Supplier Sites window. You can also specify an Invoice amount limit for a supplier site.

To apply a Hold on a Supplier Site:

i. Select Suppliers –> Entry from the main menu.

ii. Query the Supplier to whom a Hold needs to be applied.

iii. Select the Control tab.

iv. Select the relevant Hold options check boxes. You can also specify an invoice amount limit for a supplier. Save and close the form.

How to Release Holds

You can release holds to make payments and allow the system to create accounting entries for invoices. By submitting concurrent requests such as the Invoices on Hold and Matching Hold Detail reports, you can list the invoices with holds.

Manual holds must be released manually. Payables do not automatically release holds that you apply to invoices. During the Approval process, Payables automatically release system holds from invoices by releasing invoice holds, scheduled payment holds, and supplier holds.

To release invoice holds:

1. Open the Invoice Batches form. Query the invoice batch.

2. Click the Invoices button. In the Invoices window, select the invoice from which the hold needs to be released.

3. Click the Holds button to open the Invoice Holds window.

4. Select the hold you want to release. Click the Release button to move to the Release window.

5. Select a Release Name. Click OK. Save and close the Invoices form.

To release Scheduled Payment holds:

1. Complete Step 1 from the earlier exercise.

2. Select the Invoice to which a Scheduled Payment hold has been applied.

3. Click the Scheduled Payments button to go to the Scheduled Payments window.

4. Clear the Hold check box to remove the hold.

5. Save and close the Invoice Batches form.

To release a Supplier Site hold:

1. Open the Suppliers window.

2. Go to the Control tab and clear the hold Options.

3. Save and close the Supplier window.

How to Set Up the Payment WorkbenchPayment Workbench enables you to create, adjust, and review the payments and payment batches that you make against invoices. The Payables module also allows you to define a bank or a clearinghouse. You use the Banks window to define internal banks where either you or your organization is the account holder. You can also define external bank accounts where your suppliers are the account holders.

You need to define a clearinghouse to record information pertaining to banks that process the receipt information that you send in an electronic format. Clearinghouses create copies of the customer receipt information and forward the same to each of your remittance banks.

To define a bank and bank accounts:

2. Select Setup –> Payment –> Banks, from the main menu. The Banks form opens, as shown –

The Banks Form

4. Type a name for your bank in the Name field. Optionally, type an Alternate Name.

The value that you typed in the Number field is the identification number of the bank. The system uses this number to identify the bank in payment formats that use electronic payment methods.

3. In the Branch Name field, type the name of the bank branch with whom you do business.

4. Select either Bank or Clearing House in the Institution field. Enter a description for the bank or the branch in the Description field.

If you enter an Inactive Date in the Inactive On field, then after this date, you will be unable to select this bank account from the List of Values while entering transactions. The following is the List of Values:

i. The Electronic Data Interchange (EDI) ID: Used only by Oracle Energy module.

ii. EDI Location: Indicates the Electronic Data Interchange location code for the bank.

iii. EFT Number: Used by the organization's Electronic Fund Transfer module. This number identifies the organization on any EFT transmissions with the bank.

5. Type the Address and then type the contact and clearinghouse information after selecting the relevant option from the list that shows the address.

6. Click the Bank Accounts button. The Bank Accounts window opens. Enter a name for your Account, such as Checking in the Name field.

7. Select either Internal or Supplier in the Account Use field. Enter the type of bank account, such as electronic in the Account Type field. Enter the bank account number in the Number field.

8. Enter the account code for your Cash Account in the GL Account tab. You may also enter combinations for your cash clearing, bank charges, bank errors, confirmed receipts, and Future dated payment accounts. Enter the name of the contact person for your bank account in the bank in the Account Contact tab.

9. Enter values in the following fields of the Account Holder tab:

i. Account Holder: Indicates the name of the organization or the employee who is responsible for this account.

ii. Alternate Account Holder: Indicates an alternate name of a person or an organization that is responsible for this bank account.

iii. EFT Requestor ID: Indicates a number assigned by the bank and represents the numeric identifier of the person or the organization that is responsible for generating the account's electronic payment.

10. Enter values for the following fields in the Payables tab:

i. Maximum Outlay: Indicates the largest currency outlay that you allow for a payment batch for this bank account. If the total outlay of a payment batch exceeds its maximum outlay, Payables shows a warning but allows you to process the payment batch.

ii. Maximum Payment: Indicates the largest payment amount that you allow in a payment batch. When you start a payment batch using the bank account, Payables uses this value as the default value that can be overridden.

iii. Minimum Payment: Indicates the lowest payment amount that you allow in a payment batch.

iv. Realized Gain: Enables you to enter the GL account where you need to record the gains realized while making payments denominated in the non-functional currency.

v. Realized Loss: Enables you to enter the GL account where you need to record the losses realized while making payments denominated in the non-functional currency.

vi. Multiple Currency Payments: Allows you to pay invoices in foreign currencies if this option is enabled. You can only enable this option if you have enabled Use Multiple Currencies while defining Payable Options and this bank account is in your functional currency.

vii. Allow Zero Payments: Allows you to generate zero-amount payments from this bank account if this option is enabled.

viii. Pooled Account: Enables you to use Automatic Offsets and to associate multiple organizations with this bank account if this option is enabled.

11. Click the Payable Documents button. The Payment Documents window opens. In the Document Information tab, define values for the following fields:

i. Document Name: Type a name for the document.

ii. Disbursement Types.

iii. Computer Generated: Used for payment batches or quick payments. The documents are of two types, recorded and combined.

iv. Recorded Document: Is a payment document that is used only for manual payments. Use this type for payments that you generate outside Payables but need to record in Payables.

v. Combined Document: Is a payment document that uses both manual and computer generated payments.

vi. Payment Format: Used by Payables to format payments for a payment document.

vii. Payment Method: Used by Payables to select the payment method associated with the format type selected by you.

12. Define values for the following fields in the Additional Information tab:

i. Last Used: Defines the last payment number you used to create a payment. When the next payment is created, it will have a number immediately succeeding the Last Used number. Every time a payment is created, Payables automatically updates this field.

ii. Last Available: Indicates the last payment number available for a payment document. If you have typed 1000 in this field, the payment you create will bear the number 1000.

iii. Setup Checks: Enables the system to print a certain number of checks at the beginning of each payment batch or Quick payment. The value in this field allows alignment of the printer.

iv. Document Category: Enables Payables to predefine a document category for each payment method for a payment document if the Sequential Numbering System Profile option is enabled.

In the GL Accounts tab, enter the GL account code for your Cash Clearing, Bank Charges, and Bank Errors accounts.

In the Future Dated Payments tab, in the Future Date Use field, select among the Not Allowed, Allowed, and Mandatory options. If you select Allowed or Mandatory, you can enter the future dated payment account in the Account field.

How to Define Automatic Payment ProgramsPayment programs enable you to create payment documents. The programs determine how Payables creates and formats payable documents. You need to assign a payment program to a payment format and then assign the payment format to a payment document for a bank account.

The Payment Programs window enables you to define whether a program is for building payments, creating a payment, or creating a payment remittance advice.

Payables predefine one program for building payments and many standard programs for formatting payments. It also predefines a program for creating a separate remittance advice for payments. You can select the predefined programs when you define a payment format, or use the programs as templates for creating your own custom payment programs.

You can define payment programs using the Automatic Payment Programs window. Select Setup –> Payment –> Programs from the main menu.

Oracle Payables supports three payment program types:

Build Payments

Format payments

Remittance Advice

Each payment format requires a Build Payments and a Format Payments program. You can attach a Remittance Advice program to a payment format, if required.

If you use the predefined payment programs provided by Payables, you do not need to perform the set up steps. To use a custom payment program, you must create one payment program using Oracle Reports, register it, and finally define it in Payables.

How to Define Payment FormatsYou need to define and attach a payment format to the payment document in the Bank window. Define Payment Formats for the four payment methods used by Oracle Payables. While each payment method can have multiple formats, each payment format has to be unique for that payment method.

To define a Payment Format:

3. Select Setup –> Payment –> Formats from the main menu. The Payment Formats form opens, as shown -

The Payment Formats Form

2. Enter the name of the payment format you are defining in the Payment Format field. This name will appear in a list of values in the Payment Documents window.

3. Select the required payment method in the Payment Method field.

4. Enables Zero Amount Payments check box only if you want the payment format to pay zero amount payment.

5. Enable the Group by Due Date check box, if you want to group payments by due date.

6. Enable the format for multiple currency payments, or select a single currency.

7. Specify whether you need the payment format to print a remittance advice on a payment by the radio button. Also mention if you want it printed before or after the payment document.

8. Enter the number of invoices that should appear on your remittance advice for this payment format.

9. Select a Build Payments Program and a Format Payments Program. If you selected none for remittance advice, select a separate remittance program.

How to Create a Manual PaymentPrerequisite: You need to create an Invoice. While saving, note the Invoice number.

To create a manual payment:

1. Log on to the system. Switch responsibility to Oracle Payables.

2. Select Payments –> Entry –> Payments from the main menu. The Payments window opens, as shown -

The Payments Form

3. Select Manual in the Type field.

4. Select the bank account you created in the Bank Account field.

5. Select the document you created from the Banks window in the Document field.

Note When you select a document type, payables reserves that type and no other user can use that document type until you complete the payment process. The Document Number field will populate automatically.

6. Type a Payment Date. In the Supplier field, enter the supplier to whom this payment is being made.

7. Click the Enter/Adjust Invoices button. The Select Invoice window opens.

8. In the Invoice Number field, select the number of invoice that you created and against which you are making this payment. Save and close the Payments form.

How to Create a Quick Payment FeatureThe Oracle Payable feature allows you to create an automatic payment program on demand. Quick Payment allows the selection of specific invoices that you need to pay. It then prints the checks on a printer that you choose.

Prerequisite: Create an Invoice and note the invoice number.

To create a quick payment:

10. Select Invoices –> Entry –> Invoice Batches, from the main menu.

11. Query the invoice batch. Click the Invoices button

12. In the Invoices window, select the Invoice on which Quick Payment is to be made.

13. Click the Actions button. Select the Pay in Full check box and then click OK. The Payments window is displayed.

14. Select Quick in the Type field and select your bank account In the Bank Account field.

15. Click the Actions button. Select the Format check box and then click OK. A concurrent request is activated. Note the ID number of the request and click OK.

16. Select View –> Requests to view the output of the concurrent request generated. Click the Find button.

17. Click the Refresh Data button and then click the View Output button to view the output online.

How to Create a Payment BatchPrerequisite: Explore to the Invoice Batches window. Create a new invoice batch. Select Pay Group in the Pay Group field. This will enable you to identify the invoices that will be included in the Payment Batch.

Click the Invoices button. In the Invoices window, create a few invoices.

To create a payment batch:

6. Select Payments –> Entry –> Payment Batches. The Payment Batches window opens, as shown –

The Payment Batches Form

2. Enter a name for the Payment Batch in the Batch Name field and enter the Payment Date as today's date.

3. In the Pay Group field, select the Pay Group that you used to create the invoice batch.

4. Select the name of your bank account in the Bank Account field.

5. Select the name of your document in the Document field.

6. Enter a date that is 60 days in advance to the Current date in the Pay Through Date field. Save the data.

7. Click the Actions button. The Payment Batch Action window opens. Select the following check boxes in this window:

i. Select Invoices

ii. Build Payments

iii. Print Preliminary Register

2. Click OK. A concurrent request is activated. You can view the output of this concurrent request.

3. Go back to the Payment Batches window. Query your Payment Batch. The Status field should have changed from the NEW to the BUILT option.

To Format and print the Payment Batch:

1. Open the Payment Batches window. Query your Payment Batch.

2. Click the Actions button. The Payment Batch Actions window opens. The Format check box appears selected.

3. Select the Print Now check box. Click OK. A concurrent request is activated. Note the request ID number and then click OK.

4. Select View –> Requests from the main menu. Click the Find button.

5. Click the Refresh Data button and then click the View Output button to view the output online. View the Checks online and note the last Check number.

6. Go back to the Payment Batches window. Re-query your Payment Batch.

7. The Status field should now have been updated from the BUILT option to the FORMATTED option. Click the Actions button.

Note Ensure that In the Payment Batch Actions window, the Confirm check box is already selected.

8. Click OK. The Confirm Payment Batch window opens. The Status field should have the value, Printed.

9. In the To field, type the last Check number that you noted. Click the Confirm button and then click OK.

10.Open the Payment Batches window. Re-query your Payment Batch. In the Status field, the FORMATTED option changes to the CONFIRMED option.

How to Process Stop PaymentsTo stop a payment, you need to contact your bank and request a stop payment.

To record a stop payment in Oracle Payables:

7. Open the Payments window by selecting Payments –> Entry –> Payments. Query the form for the Payment line on which a stop payment is to be made.

8. Click the Actions button.

9. Select the Initiate Stop check box in the Payments Action window. Save and click Ok.

To release a Stop Payment made earlier on a payment line:

1. Open the Payments window.

2. Query the form to find the payment line on which a stop payment has been applied earlier.


4. Select the Release Stop check box in the Payment Actions window. Save and click OK.

Voiding PaymentsVoiding a payment automatically reverses the accounting and payment records. This method resets the status of the invoice to Unpaid.

To make a payment void:

1. Open the Payments window. Search for payment records.


3. Select the Void check box in the Payment Actions window. You may also need to change the Void and the GL date that you want Payables to use for the accounting distributions. To change the Void and the GL date that are used for accounting distributions:

i. Select None from the Invoice Action field to change the status of the related invoice to Unpaid.

ii. Select Hold for Invoices Action and select a hold name in the Hold window to apply a hold to the related invoices.

iii. Select cancel for the Invoice action to cancel all related invoices and reset the amounts to zero.

4. Save and then click OK.