Oracle Fusion Financials - Accounts Payables

Invoice options are settings that control how the invoice process works. By setting these options, you can impact the way invoice entries are processed. In this chapter, you will:

• Learn how to define invoice options

• Understand the effects of each configured option on the invoice entry process

Understanding payment options is essential as they impact your payment process settings. By configuring these options, your payment process can be customized to suit your needs.

• Payment options influence your payment process settings.

• Configuring payment options will change how your payment process operates.

• In this chapter, you will gain insights into setting up payment options.

• You will learn the business purposes of each payment option.

Common options affect the overall Accounts Payable process.

In this chapter, you will learn how to confirm common options and also business purpose for configuring each option.

Withholding tax refers to the tax deducted by the payer on behalf of the tax authority prior to making payment to the supplier. The process involves obtaining a certificate from the organization detailing the deduction, followed by the organization depositing the withheld tax to the tax authority.

Key points covered in this chapter include:

• Understanding the purpose of withholding tax

• Configuring withholding tax options

• Exploring the business reasons behind setting up each option

Distribution sets are a time-saving feature for entering invoices efficiently by reducing data entry time. They enable you to:

• Define a set of accounts

• Assign percentage allocations for expenses

By attaching distribution sets for non-PO matched invoices, distributions can be defaulted automatically. This chapter will guide you on:

• Defining distribution sets

• Utilizing distribution sets effectively

In a business setting, payment terms are set for invoices to establish when they are due. Examples include 30 days, 60 days, or 90 days from the invoice date.

When a payment is made after the due date, it is considered late. Some suppliers may apply late payment interest charges for delayed payments.

In this chapter, you will learn how to:

• Assign payment terms to invoices

• Calculate the due date for invoices

• Define different payment terms such as 30 days, 60 days, etc.

Invoice tolerances are a crucial tool utilized during the matching of invoices with purchase orders. Here is an overview of how they function:

• When invoices are being aligned with purchase orders, any discrepancies detected may be permitted to proceed only if they fall within the pre-set tolerances.

• If the discrepancies surpass the defined tolerances, the system will halt the transaction and put the invoice on hold.

This chapter will guide you through the process of establishing and defining invoice tolerances to manage these situations effectively.

Invoice holds are mechanisms put in place to ensure that an invoice isn't processed further if there are any problems associated with it. These holds serve to flag issues within the invoice, preventing it from continuing through the processing workflow.

Here are some key points about invoice holds:

• They may be triggered if tolerances are exceeded for purchase order (PO) matched invoices.

• Holds can also be manually added for specific business-related reasons.

• Once a hold is imposed on an invoice, it must be released before the invoice can proceed to the next stage of processing.

Throughout this chapter, you will gain an understanding of how to define holds and releases, crucial processes in effectively managing and resolving invoice-related issues.

An aging report breaks down overdue invoices into different aging periods for analysis. The system generates the report based on predefined aging buckets. Here is a summary of defining aging buckets:

• Aging periods are different categories for organizing overdue invoices in the aging report.

• Defining aging buckets determines how the system will group and display overdue invoices in the aging report.

• This chapter will guide you on how to set up and define aging buckets for generating an accurate aging report.

In order for the system to make payments to suppliers, setting up banks, bank branches, and bank accounts is crucial. The following are key points covered in this chapter:

• Setting up a bank is essential for payment processes.

• Defining bank branches further refines the payment capabilities.

• Creating bank accounts completes the setup for making supplier payments efficiently.

Payables calendars in Oracle are utilized for various functions within Payables. They can serve specific purposes such as Payment terms or more general tasks like managing withholding tax, recurring invoices, or key indicator reporting.

Here is a summary of the key points covered in this chapter:

• Payables calendars play a crucial role in managing Payment terms, withholding tax, recurring invoices, and key indicator reporting.

• These calendars provide specific functionalities and options tailored for Payables processes.

• You will learn how to define and set up a Payables calendar to meet the requirements of your organization and streamline Payables operations effectively.

Disbursement system options are used to default payment-related options at different stages such as supplier sites or payment process profile level. These settings can be adjusted or customized as required. Below are the key points to consider when configuring disbursement system options:

• Disbursement system options help in setting default payment-related configurations.

• These options can be managed at different levels, such as supplier sites or payment process profiles.

• Adjustments to these settings can be made to meet specific requirements.

Payment methods are utilized to pay suppliers, customers, or employees. They can take various forms, with some common examples being:

• Cheque

• Electronic transfers

This chapter provides insights on defining payment methods and understanding their business purposes.

Payment method defaulting rules are configured to setup priority for different payment methods.

In this chapter, you will learn how to define payment method defaulting rules.

Payment formats are essential outputs in the payment process. These formats determine how payments are presented for various purposes, such as issuing cheque printouts or creating electronic payment files for bank transactions. In the following chapter, you will acquire knowledge on defining and customizing payment formats to suit your specific requirements.

Payment system configuration is used to transmit payments to external parties like banks.

In this chapter, you will learn how to configure payment systems.

In Payment system configuration, we define where we are going to send the payment file. Detail configuration of the transmission is done through transmission configuration.

In this chapter, you will learn how to configure transmission configuration.

Payment Process Profiles are a critical setup for payments as they connect all the related payment configurations. In this chapter, you will learn:

• How to define payment process profiles

• The business purposes behind configuring each option

Introduction to invoice entry is to share all the processes available to create invoices in Payables.

In this chapter, you will learn many ways to generate Payables invoice and also different features available in Payables invoice.

In the Payables module, it is crucial to ensure that the accounting period is open before carrying out any transactions. Below are the key points covered in this chapter:

• Opening Payable's accounting period is necessary before initiating transactions.

• Learn the step-by-step process of opening Payable's accounting period.

Accounts Payables mainly involve receiving invoices from suppliers and making payments to them. The supplier is a crucial master in the Accounts Payables system. In this chapter, you will understand the complete process of defining a supplier in the system:

• Accounts Payables focus on receiving invoices from suppliers and making payments to them.

• The supplier is a critical master in the Payables system.

• This chapter will cover the complete process of defining a supplier in the system.

Manually entering the invoice is the most frequently used option by Payables accountant. This is one of the ways to enter invoice in the system.

In this chapter, you will learn how to enter invoice in Payables manually.

Using a Spreadsheet is an alternative method for entering invoices into Oracle applications, different from the FBDI process typically used for data migration. The Excel-based plug-in provided by Oracle is integrated with the application, offering a more simplified approach to invoice creation in Payables.

Here is how to use/populate the spreadsheet to create invoices in Payables:

• Utilize the Oracle-provided Excel plug-in integrated with the application.

• Follow the guidelines outlined in this chapter to effectively create invoices using the spreadsheet.

• This method offers a simpler way to input invoice data compared to the traditional methods like the FBDI process.

Invoices can be entered in Payables by matching them with the Purchase order in the following ways:

• Depending on the matching controls (2-way, 3-way, 4-way), the system will complete the matching process.

• The accounting information will be automated based on the Purchase order.

In this chapter, you will learn how to create a Purchase order matched invoice in Payables.

Sometimes, businesses need to provide advances to suppliers for goods or services they will supply. This advance payment is later reconciled against the invoices submitted by the supplier. Within the realm of Payables, you will dive into creating prepayment (advance) invoices. In this chapter, you will gain an understanding of:

• The concept of giving advances to suppliers.

• How to manage advance payments in business transactions.

• The process of adjusting advance payments against supplier invoices.

• Creating prepayment invoices in Payables.

In Payables, invoices can be created for:

• Expense

• Asset related transactions

When an invoice is created for an asset-related transaction:

• The invoice is interfaced to the Fixed Asset module

• This allows for the recognition and processing of the asset as a Fixed Asset

This chapter provides guidance on how to create an invoice specifically for asset purchases in Payables.

Invoices that are matched to purchase orders (POs) usually do not require budget checking at the invoice stage because the budget would have been reserved when the PO was created. However, for non-PO matched invoices, budget checking at the invoice stage is essential as this is when the expense will be verified against the budget. Below are key points to understand about budget checking at the invoice stage:

• For PO matched invoices, budget checking is typically not necessary as the budget would have been allocated during PO creation.

• Non-PO matched invoices require budget verification at the invoice stage to ensure expenses align with the budget.

• Performing budget checking at the invoice stage helps in controlling and monitoring expenses effectively.

When operating in a particular country, suppliers follow the local tax regulations when charging tax on their invoices. The tax collected by the supplier is later paid to the tax authority after being received. In this chapter, you will be guided on how to calculate tax on a payable invoice:

• Suppliers charge tax on invoices as per local tax requirements

• Tax collected by the supplier is paid to them and then deposited to the tax authority

• This guide will help you learn how to calculate tax on payable invoices

In the realm of financial transactions, similar to transaction taxes, there exist regulatory mandates that necessitate withholding a specified portion of payments made to suppliers. This withheld amount is then remitted to the tax authority. This chapter delves into the procedure of withholding funds from payments to suppliers in compliance with these regulatory requirements.

In the chapter on invoice processing, users will explore the following:

• Invoice creation access given to Payable users

• Requirement of approval for every invoice before payment eligibility

• Learning to set up approval rules to route invoices for approval

When an invoice is received for a non-PO-based invoice, accountants typically send the physical invoice to the receiving department for necessary account details to book the invoice. However, the account coding feature enables this process to be done electronically, eliminating the need to physically send the invoice out of the Finance department.

In this chapter, you will explore how to route invoices for account coding, a feature that streamlines the process and enhances efficiency within the Finance department.

In this chapter, various features related to the invoice process are discussed to help users understand the additional functionalities available. Some of the key points covered include:

• Explanation of miscellaneous features of the invoice process.

• Understanding all the available functions related to invoices.

In this chapter, you will learn how to use Recurring Invoices in a spreadsheet to generate invoices automatically. This feature allows you to input details and set periods for invoice generation.

• Recurring invoices can be generated through a spreadsheet tool.

• Input the necessary details in the spreadsheet for the invoices.

• The system will automatically generate the invoices at the set periods.

Multi-period accounting is a feature that enables you to spread the cost of prepaid expenses over the periods in which the related services are utilized. It allows for a more accurate reflection of expenses over time, instead of booking the entire expense in the period when it is paid.

In this chapter, you will be introduced to the following key points about multi-period accounting:

• Definition and purpose of multi-period accounting

• Amortization of prepaid expenses over the relevant periods

• How to set up multi-period accounting details in an invoice

In the system, invoices can be entered in any currency, which may be the functional currency or a non-functional currency (foreign currency). Here’s what you need to know:

• Foreign currency invoices need exchange rate details for conversion to the functional currency.

• When entering an invoice in foreign currency, the user must provide exchange rate information.

• This process allows the invoice amount to be converted into the functional currency.

By learning how to create a foreign currency invoice, you’ll understand the steps involved in handling non-functional currency transactions in the system.

Automatic interest invoices can be created for overdue invoices when the payment for the overdue invoice is made. This process is essential when dealing with Government organizations in certain geographies, as it is a requirement.

Key points covered in this chapter include:

• Explanation of how automatic interest invoices are generated.

• The system's ability to automatically create and pay the interest invoice in addition to the original invoice.

• The necessity of this feature, particularly when dealing with Government entities in specific regions.

• Step-by-step guidance on how to generate automatic interest invoices effectively.

Accountants may need to create debit notes or credit notes in addition to invoices to adjust the invoice amount based on the business requirement. This chapter will cover the process of creating debit notes and credit notes.

• Debit notes and credit notes are used to adjust the invoice amount.

• Accountants create debit notes and credit notes as needed.

• This adjustment is necessary to reflect accurate financial transactions.

Subledger adjustment journals in Payables module provide a way to record adjustments in the Payables control account without directly impacting the General Ledger. This process helps in maintaining accuracy and consistency between the subledger and the GL reconciliations. Within this chapter, you will receive guidance on:

• Understanding and utilizing subledger adjustment journals

• Creating subledger adjustment journals in the Payables module

When transferring accounting information from Payables to the GL module, the system usually generates a journal line description. However, this default description may not always be sufficient for the GL team's needs. They typically require more details in the journal line to ensure that they have adequate information about the source of each transaction when generating General Ledger reports.

In this chapter, you will learn how to modify the journal line description for journals that are transferred from Payables to the GL. This customization allows you to provide the GL team with the level of detail they need for accurate reporting.

In this chapter, you will learn about automatic offset in Oracle Financials. Automatic offset enables you to manage liability accounts based on balancing segments within invoice distribution details. Here's what you can do with automatic offset:

• Break liability account by each balancing segment in the invoice distribution details.

• Choose to replace all segments except for the account code.

By understanding and setting automatic offset options, you can efficiently handle liability accounts and streamline processes within Oracle Financials.

Once an invoice is approved, it becomes eligible for payment on the due date. There are two main methods of payment:

• Single Payment: Allows the user to pay a specific invoice individually.

• Batch Payment: Typically used by organizations to pay multiple invoices in a batch on a regular basis, often weekly. This involves picking all eligible payments and processing them together.

Sometimes, there may be a requirement for a one-off payment to a supplier, which can be done by making a single invoice payment. In this chapter, you will discover how to initiate a payment for a single invoice to a supplier.

Payment process request templates are predefined values utilized when creating a payment process. These templates automatically set default values for the payment process being created. In this chapter, you will gain insight into the process of defining a payment process request template:

• Payment process request templates contain predefined values for use in creating a payment process.

• These templates automatically apply default values to the payment process being created.

• In this chapter, you will learn how to define a payment process request template.

Payment Process Request (PPR) is a crucial tool used by organizations to create payment batches for settling invoices that are due. Here's a breakdown of the process:

• PPR facilitates the generation of payment process batches.

• Organizations typically create payment batches on a weekly basis to clear all invoices due by the specified date.

• The payment batch contains all the necessary information to execute payments efficiently and accurately.

This chapter will guide you through the steps involved in creating a payment batch effectively.

When a payment needs to be canceled after it has been generated, you can utilize the payment voiding process to cancel the payment. This process allows for the cancellation of both single payments and multiple payments. In this chapter, you will discover the steps involved in voiding a payment:

• Utilize the payment voiding process to cancel a payment after generation.

• Cancel both single payments and multiple payments using the voiding process.

• Learn the detailed steps required to void a payment effectively.

AP to GL reconciliation process aims to align the balances of Payable control accounts in the Accounts Payable (AP) module with the corresponding balances in the General Ledger (GL) module. This reconciliation is necessary to verify that all transactions from AP have been accurately transferred to GL.

Key points covered in this chapter include:

• Understanding the importance of reconciling AP to GL balances

• Identifying discrepancies between AP and GL balances

• Utilizing reconciliation tools and reports to streamline the process

• Resolving discrepancies and ensuring accurate financial reporting

Fusion tax is used to implement Regime2Rate flow for Transaction tax and Withholding tax.

In this chapter, you will learn how to implement Regime2Rate flow.

Once all the activities for the month in the accounts payable (AP) are completed, and reconciliation of AP with the general ledger (GL) is done, the accountant can proceed to close the AP period and generate periodic reports. Here is what you will learn in this chapter:

• The process of closing the AP period upon completion of activities

• How to reconcile AP with the GL

• Generating periodic reports for AP