R12 ACCOUNTS PAYABLES

By Pradeep
Accounts Payables – Theory

We maintain the following things at Accounts Payables

Module.

1. Maintaining purchase invoice

2. Making payments to Suppliers
3. Payments reconciliation with bank for cash management

To maintain the purchase invoice the following things are

needed.

1. Name and address of the supplier

2. Date of purchase
3. Quantity of purchase
4. Invoice amount
5. Payment method
6. Payment terms

We contact with the suppliers at different levels:

 Request for Quotation (RFQ)
 Purchase Order
 Payments

We create Supplier definition in two levels:

1. Header
2. Site

Header information of Supplier can be accessed by global level; it

means all other operating unit people can access Supplier Header
information.

Whereas Site information is local level; only specific operating

unit people can access. One supplier can have multiple sites
(Addresses)

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Accounts Payables – Theory

Sites are 3 types based on the purpose: RFQ, P.O and Payment
site.

If you want to record invoice we should have minimum one pay

site.

Payment methods:

We have 4 payment methods in OF.

1. Check
2. Electronic (EFT)
3. Wire
4. Clearing

At the time of creating invoice we have to opt for payment

method and Currency.
 Check : Payment through the regular bank
check

 Electronic : System will create one instruction file

with all the
Details of invoice and payment. This file
will send to bank for payment.

 Wire : It is manual process of sending

instructions to bank.
System will not generate any instruction
file.

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Accounts Payables – Theory

Clearing : In this process we will not make Payment

physically. This is used as adjustment for inter company transfers
and transfer between the branches.

Payment Terms:

Making payment to supplier (due date) immediate or in how

many days referred to Payment terms.

We can set due dates and discount dates through payment terms.

Distribution Set:

Distribution Set is used to automatically enter distributions for an

invoice when you are not matching it to a purchase order.

For example:

Total invoice amount: Rs. 100000

Plant cost : Rs. 90000 90%
Tax : Rs. 5000 5%
Freight : Rs. 5000 5%

If we receive the invoices in future with the same arrangements

we can use the distribution set.

You can assign a default Distribution Set to a supplier site so

Payables will use it for every invoice you enter for that supplier
site.

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Accounts Payables – Theory

If you do not assign a default Distribution Set to a supplier site,

you can always assign a Distribution Set to an invoice when you
enter it.

We have 2 types of distribution sets.

1. Full
2. Skeleton

We use Full Distribution Sets to create distributions with set

percentage amounts.

Skeleton Distribution Sets to create distributions with no set

distribution amounts.

We can enter distribution sets in 2 ways:

1. Manual
2. Automatic (by creation of distribution sets)

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Accounts Payables – Theory

Types of invoices in Accounts Payables

1. Standard invoice
2. Debit Memo
3. Credit Memo
4. Mixed invoice
5. Recurring invoice
6. Pre payment invoice
7. Expenses invoice
8. Interest invoice
9. Withholding tax invoice
10. Retain age Release
11. Transportation

System automatically generated invoices:

1. Recurring invoice
2. Expenses invoice
3. interest invoice
4. Withholding Tax invoice

Remaining all other invoices we have to create manually.

1. Standard invoice:

We can enter only Positive amounts thru standard invoice. We

can assign “Distribution set” to update the lines automatically by
system or we can enter the distributions manually.

2. Debit Memo

Debit Memo is used by Customers only.

This is used for purchase returns.
To reduce the balance payable to supplier we create Debit Memo.
Only negative amounts can be entered through Debit Memo.

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Accounts Payables – Theory

3. Credit Memo

To reduce the supplier balance Credit Memo will be used.

Credit Memo will rise by Supplier and sent to us.

Generally credit memos used, when we get discount on payables

or on any price differences.

We can enter only negative balances through Credit Memos.

4. Mixed Invoice

We can enter Positive and Negative balances also thru Mixed

Invoices.

5. Recurring Invoice.

We require a calendar to create recurring invoice, called “Special

Calendar”.

6. Pre payment invoice.

Pre payment invoice are used when there is advance payment

made to Suppliers against purchases or Employees for Travel
expenses (Imprest amount).

Pre payments are two types: Temporary pre payment &

Permanent pre payment.

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Accounts Payables – Theory

Temporary pre payments are adjusted against the future

purchase invoice.

Whereas we cannot adjust Permanent pre payments against

future purchases. This payment we can receive when the contract
cancelled with the supplier.

We can convert Permanent pre payment into Temporary pre

payment. After conversion we can use that to adjust against
future invoices.

7. Expenses invoice

When employees spent the amount and submit the bills for
reimbursement, that information we have to maintain as
expenditure report in the system.
With the help of this expenses report information we can create
“Expenses Invoice”.

8. Interest invoice

When we make payments after the due date crossed, if interest

penalty is applicable, system will create one invoice for only the
interest portion amount apart from the standard invoice.

9. Withholding tax invoice

If customer want to with hold the tax amount charged by supplier

in the invoice, and he want to pay the tax amount directly to tax
authorities instead of paying to supplier.
System will automatically create a withholding tax invoice.
In this case tax authority would be a supplier.

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Accounts Payables – Theory

Batch Invoice:

We can enter invoices individual one by one or through batch

invoices at a time many.
By default we can enter individual invoices only.

In GL batch journal only control total is there.

But in AP, batch invoices have 2 controls: 1. Control total 2.
Control count.
Control total is grand total of all invoices & Control count is total
number of invoices.

In GL if control total does not match system will not allow user to
save the journal until we change the control total to match with
entered total.

In AP if control total and control count does not match also

system allows us to post the invoice and allows for further
processing. It shows only variance.

Unlike batch journal, we can enter invoices either individual or

batch invoices.
If you want to enter batch journals we have to create profile
option. In that case we cannot enter invoices individually.

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Accounts Payables – Theory

Types of Bank accounts:

We have 3 types of bank accounts:

1. Internal Bank Account

2. Supplier Bank Account
3. Customer Bank Account.

Internal Bank account is maintained by our company to make

payments or receive payments in any mode. (Check, Electronic,
Wire and Clearing).

In electronic and wire payments our company has to maintain

Supplier bank account and Customer bank account.

Payment types:

When we are making payment to supplier we need to have bank

account, Check book.
As per OF we called check leaves as Documents.

We have 3 types of payment:

1. Manual
2. Quick
3. Refund

Manual: We have to write the check manually and then enter

the same details into system and hand over the same check to
Supplier.

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Accounts Payables – Theory

Quick: System will print payment details on the check. In OF

once you save the payment, automatically check will be
printed on pre printed stationary. Then check can be
hand over to Supplier.

Refund: When we received funds return from the suppliers we

record them as refund.

Work Bench:

We maintain Recording invoices and Payments in AP.

We have two work benches in AP:

1. Invoice work bench
2. Payment work bench

In invoice work bench we can enter and maintain invoices.

Payment work bench is to maintain 3 types of payments 1.

Manual 2. Quick 3. Refund.

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Accounts Payables – Theory

Payment Batch:

Payments also can be processed as individual payments or

through batch.
Batch payments are automation.
Automation means if we give instruction to system, system will
make payment automatically.

There are various stages in payment batch:

1. Selection
2. Building
3. Rebuilding
4. Formatting
5. Confirm

Selection: We have to select the invoices for payment.

Building: We can view the invoices that selected for payment

through building.
We can make modifications also.

Rebuilding: If we make modifications system will show as

Rebuilding.

Formatting: Formatting is nothing but for print purpose. If we

format only we can get print the payments.

Confirm: Once we confirm only system considered the payment

has been done and the balances will be updated. If we
do not confirm system will not allow to create one more
payment batch.

** We can cancel the payment batch before confirmation.

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Accounts Payables – Theory

OPTIONS:

We have 3 types of options.

1. Financial Options
2. Payable Options
3. Payables System Setup

Payable options are specific to “Accounts payables” module only.

Financial options we can see across AP, PO and FA modules.

These options will work as heart to application. Using these

options we can set some CONTROLS & DEFAULTS.

We use these options to manage application functionality. We can

set some properties or to set behaviors of the application through
these options.

** Invoice Structure is 2 parts: 1. Header information 2.

Distribution

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Accounts Payables – Theory

Data flow into Application of Accounts Payables:

Financial Options
↓
Payables options
↓
Supplier header
↓
Supplier Sites
↓
Invoice header
↓
Invoice Distribution
↓
Payment

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Accounts Payables – Theory

** In payables also we can enter foreign currency invoices. There

is some setup required. The exchange rate we setup in GL is
applicable to all modules.

** If we record the invoice in one currency, we cannot make

payment other than that invoice currency. Currency should be
same in PO, invoice and payment.
Cross currency payment is not possible in AP. But that is possible
in AR.

** To cancel the invoice we have to enter Credit memo.

** Zero payments: If we cancel the invoice, there is no

balance to pay, but system will show as zero balance. For
elimination of zero balance payments we have to create dummy
bank accounts and dummy checks.

Payables Integration:

1. Purchasing
2. General Ledger
3. Cash Management
4. Accounts Receivables
5. Web Expenses

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Topics in Accounts Payables

1. Create AP Responsibility
2. Setup Options
3. Open Periods
4. Define Payment terms
5. Define Distribution Set
6. Create Supplier
7. Standard Invoice
8. Create Internal Bank
9. Make Payment
10. Credit Memo
11. Debit Memo
12. Prepayment Invoice
13. Expenses report invoice
14. Interest Invoice
15. Withholding Tax Invoice
16. Pay on Receipt
17. Retain age Release invoice
18. Invoice Batch
19. Cancel Invoice
20. Refund
21. Manual Payment
22. Stop payment
23. Reissue
24. Void payment document
25. Holds
26. Supplier Merge
27. Transfer to GL
28. Period end close
29. Important programs in Payables

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1. Crete Accounts Payables responsibility

Step: 1 Create Accounts payables responsibility

Navigation: System Administrator
Security  Responsibility  Define

Step: 2 Assign Profile options to AP Responsibility

Navigation: System administration
Profile  System

1. HR: Business Group B.G

2. HR: Security profile B.G
3. HR: User type HR: User
4. GL: Ledger Name Ledger
5. MO: Security Profile REL MOAC

Step: 3 Assign AP Responsibility to User

Navigation: System Administrator
System  User  Define
2. Set up Options
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Options are controlling features at operating unit level.

There are 3 types of options in AP.

1. Financial Options
2. Payables Options
3. Payables system setup

Define Financial Options

Navigation: Setup  Options  Financial Options

We have 5 tabs in financial options:

1. Accounting
2. Supplier – Purchasing
3. Encumbrance
4. Tax
5. Human Resources

Set up Options – Financial Options

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Set up Options – Financial Options

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Define Payables Options

Navigation: Setup  Options  Payables Options

Tabs in Payables Options:

1. Accounting Option
2. Currency
3. Tax Reporting
4. Invoice
5. Approval
6. Matching
7. Interest
8. Expenses Report
9. Payment
10. Withholding tax
11. Reports

Set up Options – Payables Options

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1. Accounting Option:

2. Currency:

Set up Options – Payables Options

3. Tax Reporting:

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4. Invoice

Set up Options – Payables Options

5. Approval

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6. Matching

Set up Options – Payables Options

7. Interest

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8. Expenses Report

Set up Options – Payables Options

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9. Payment

Set up Options – Payables Options

10. Withholding Tax

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11. Reports

Set up Options – Payables system set up Options

Navigation: Setup  Options  Payables System setup

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Open the Periods in AP

Navigation: Accounting  Control Payables Periods

Select the period

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Change status to Open

Period Status in AP:

1. Open
2. Never Opened
3. Closed

Payment Terms

Payment terms will determine the payment schedules for

invoices.

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There are 2 types of payment terms:

1. Normal Payment Terms

2. Proximal Payment Terms

Normal Payment Terms

Navigation: Setup  Invoice  Payment terms

 Enter name for Payment terms

 Enter % of due and the due dates

 We can set up maximum 3 levels of discount

Payment Terms – Normal Payment Terms

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Payment Terms – Proximal Payment Terms

These payment terms are used for electricity and Telephone bills
payments.

Enter the due date of the month.

Distribution Set

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Navigation: Setup  Invoice  Distribution set

Full Distribution Set:

 Enter the name of the Distribution Set

 Enter % and Account details
 If % is equal to 100% then system display type as “Full”

SUPPLIER CREATION

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Navigation: Suppliers base  Suppliers (PO)
Suppliers Entry (AP)

The person who is supplying goods or services to an organization is called

Supplier.

There are 2 levels of information in supplier window:

1. Supplier Header
2. Supplier Site

Header information is Global & Site information is local operating unit

specific.

Sites are based on the purpose: RFQ, PO & Payment purpose

Supplier Creation – Tabs in Supplier window

Company Profile Terms and Control

 Organization  Accounting
 Tax details  Tax and Reporting
 Address Book  Purchasing
 Contact Directory  Receiving
 Business classification  Payment Details
 Products & Services  Relationship
 Banking Details  Invoice Management
 Surveys

Supplier Creation

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Click on “Create Supplier”

 Enter “Organization” name

 Choose Supplier type as “Standard Supplier”
 Country of origin: India
 Click on “Apply”

Go to “Address Book” tab

Supplier Creation

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Click on “Create” button

 Enter Country
 Address Line 1 and Address Name
 Enable the check box for Address purpose
 Say Continue

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Select the site name and say Apply

Go to “Business Classification” tab

√ Enable “Applicable” against classification

Save.
Go to “products and Services” tab and choose the Product
Save.

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Go to “banking details” tab

Say “Create”
 Enter Supplier Bank Details
 Enter Supplier Bank Branch Details
 Enter Supplier Bank Account details

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Say “Apply”

Go to “Accounting” tab
Choose “Operating unit”

Save
Go to “Purchasing” tab

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Save
Go to “Receiving” tab

Save.

Go to ”Payment Details” tab

Enable check box for default Payment

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Remittance advice is nothing but sending invoice information along with

check to the supplier.

Go to Supplier site and update default payment method

Go to “invoice management” tab

Header information:

 Choose Invoice Currency

 Choose invoice match option
 Choose payment currency

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 Choose terms
 Terms date basis: Invoice
 Pay date basis: Discount
Payment priority is used in the batch payment for select the invoices for
payment based on the priority.

Save.

Go to Supplier Sites and update the fields similar to above.

Save.

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Invoices

 Invoice will be received from the supplier and entering in Oracle

Payables.
 There are 3 levels of information in the invoice:
1. Header
2. Lines
3. Distributions

 There are various types of Invoices in Payables:

1. Standard Invoice
2. Credit Memo
3. Debit Memo
4. Expense Report
5. Pre payment invoice
6. Retain age Release invoice
7. Withholding Tax
8. Transportation invoices
9. Mixed Invoice
10. Interest invoice
11. Recurring invoice

 Invoices can be created in 2 ways

1. Individual invoice
2. Batch invoice

Standard Invoice

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This is a trade invoice which we will receive from supplier and entered into
system.

Step: 1 Create Standard invoice

Navigation: Invoices  Entry  Invoices

 Choose Operating Unit

 Type: Standard
 Trading Partner: Choose Supplier Name
 Enter Invoice number
 Enter Invoice Amount
 Choose Currency
 Choose Payment Terms
 Choose Distribution Set
 Pay group: Standard
 Payment Method: Check

Go to “Lines” tab and enter amount

Standard Invoice

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Go to “Distributions” tab

Save and close this window

Go to “General” tab

See the status: Never validated

Accounted: No

Standard Invoice

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Go to “Scheduled Payment” tab to view installment details

Click on “Actions” √ Validate

Now Status: Validated

Click on “Actions” √ Create Accounting Choose “Final”

Go to Reports  View accounting

Journal Entry:
Item Expenses A/c Dr
Freight A/c Dr
Tax Expenses A/c Dr
To Liability Account

Standard Invoice

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If create accounting not run,

Run a program “Validate Application Accounting Definition” program

Create Internal Bank Account

Step: 1 Granting Banking Access to Legal Entity

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Log in though:
User Name: sysadmin
Password: sysadmin

Navigation: User Management Responsibility  Roles and Role inheritance

Search:
Type: Roles and Responsibilities
Category: Miscellaneous
Name: Len% Say “Go”

Create Internal Bank Account

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Click on “Update” of Role “AP Responsibility”

Click on “Security Wizards” button

Name: CE UMX Security Wizard Click on “Run Wizard”

Create Internal Bank Account

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Enable √ check box for:

 Use
 Bank Account Grants Maintenance
 Bank Account Transfers
Say Apply

Say Apply
Log out from “sysadmin” user.

Create Internal Bank Account

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Step sequence in creation of Banks:
Banks  Bank Branch  Bank Account  Payment document

Step: 2 Define Bank

Navigation: Payables
Setup  Payments  Banks and Bank Branches

Cash Management window will open

Click on “Banks”

Say “Create”

Create Internal Bank Account

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Click on “Save and Next”

Click on “Create”

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Create Internal Bank Account

Say “Apply”

Say “Save and Next”

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Create Internal Bank Account

Go to “Create Contact” button to create contact details

Say “Apply”
Say “Finish”

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Create Internal Bank Account

Step: 3 Create Bank Branch

Navigation: Setup  Payments  Banks and Bank Branches

Click on “Bank Branches”

Click on “Create”

 Choose country
 Choose Bank Name
Say “Continue”

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Create Internal Bank Account

Click on “Save and Next”

Click on “Create”

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Enter address details

Say “Apply”

Click on “Save and Next”

Click on “Create Contact” to update contact details

Say “Finish”

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Create Internal Bank Account

Step: 4 Define Internal bank Account

Navigation: Setup  Payments  Bank Accounts

 Internal Bank account is nothing but, our own organization bank

account. Using this bank account we can make payment to the
external resources and will received receipts.

 Bank account will be defined at legal Entity level.

Click on “Create”

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Create Internal Bank Account

 Choose Country
 Choose Bank Name
 Choose Branch Name
Say “Continue”

 Choose Legal Entity as bank Account Owner

 Select account use for Payables & Receivables
Say “Next”

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Create Internal Bank Account

 Enter Account Name

 Enter Account Number
 Choose Currency
 Enable: Multiple Currency Allowed
 Choose account type: Saving
Say “Save and Next”

Go to General Control’s information under “Account Controls” tab

Choose GL Accounts

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Create Internal Bank Account

Go to “Payables Controls” information

 Enable “Multiple Currency payments” check box

 Enble “Allow Zero Payments”
Say “Save and Next”

Click on “Add organization Access”

 Choose Account use

 Choose Operating unit
Say “Continue”

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Create Internal Bank Account

Say “Apply”

If you want to add one more operating unit to this bank, click on “Add
organization access” button.
Say “Save and Next”

To create contact details click on “Create Contact” button

Say “Finish”

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Create Internal Bank Account

Step: 5 Define Payment Document

Navigation: Setup  Payments  Bank Accounts

Query your Account Name

Say Go

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Create Internal Bank Account

Select your account

Click on “Manage Payment Documents” button

Click on “Create”

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Create Internal Bank Account

 Enter Name for your document

 Choose paper stock type
 Choose number of lines per remittance stub
 Choose format
 Enter available document numbers

Say Apply

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Payments

Payments can be created in 2 ways

1. Individual Payment
2. Batch Payment

Individual Payment

There are 3 types of payments

1. Quick
2. Manual
3. Refund

Individual payment – Quick Payment

Navigation: Payments  Entry  Payments

 Type: Quick
 Choose operating unit
 Choose trading partner
 Enter payment date
 Choose Bank Account
 Choose payment currency
 Choose Payment Method
 Payment document and Document number will choose by system
 Payment Process Profile: Manual

Now Payment status is Negotiable

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Payments

To select unpaid invoices for payment, click on “Enter/Adjust invoices”

 Choose invoice number to make payment

 You will see the number of lines for the invoice; those are nothing but
installments to pay
 Choose one installment line
 Payment amount, Discount amount will be taken by system.

Payments
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 We can modify the payment fields here

 Save and close this window

Status: Negotiable
Accounting: Unprocessed

Go to “Actions”

√ Create accounting Select “Final” Say OK

Payments
Go to Tools  View Accounting

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Or
Go to Tools  View Accounting Events

Journal Entry:
Liability Account Dr
To cash clearing
To Discount

Payments

Check the invoice payment status

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Navigation: Invoices  Entry  Invoices
Query your invoice
Go to General Tab to see payment details

Go to “View Payments tab”

Also go to “Scheduled Payments” tab to view balance due details

Payments

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Credit Memo
 Credit Memo is a negative amount invoice, which will used to reduce
supplier balance.
 We will receive credit memo from supplier to record credit for goods or
services purchased.

Step: 1 Check the Supplier Balances

Navigation: Invoices  Inquiry  Invoices

Choose Trading Partner Name

Click on “Calculate Balance Owed”

 Choose Operating unit

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Credit Memo

√ Take Discount
√ Include outstanding future dated payments
Say “Calculate”

You can view unpaid amount

Step: 2 Create Credit Memo with reference of standard invoice

Navigation: Invoices  Entry  Invoices
 Choose Operating unit
 Type: Credit Memo
 Choose trading partner
 Terms: immediate
 Enter invoice amount in negative (-)
 Match action: Invoice
Go to “Lines” tab
Place the cursor on “Amount field”
Do not enter amount

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Credit Memo

Go to “Corrections” button

Choose invoice number

Say “find”
We are in “invoice correction” window

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Credit Memo
Enable “Select” check box
Enter credit amount in negative figure
Say “Correct”
Note: Starting correction of invoice
Say “OK”
Place cursor on “Amount” field of “Lines”

Go to “Distributions”
You will see the accounts information coming from standard invoice.

Save and Close this window

Go to “General” tab
Status: Never Validated

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Credit Memo

Go to “Actions” Say “Validate” Say “OK”

Now status is: Validated

Go to “Actions” again Say “Create Accounting” “Final”

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Credit Memo
Now Accounted Status: Yes

Go to Reports  View Accounting

Journal Entry:
Liability A/c Dr
To Item Expenses A/c

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Credit Memo

Step: 3 check the supplier balance

Navigation: Invoices  Inquiry  Invoices
Follow the procedure in Step: 1

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Debit Memo

It is also negative amount invoice which will reduce the supplier balances.
It will be created by organization and send to the supplier to record credit
for goods and services purchased.

Step: 1 Create debit memo with reference of standard invoice.

Navigation: Invoices  Entry  Invoices

 Choose Operating unit

 Type: Debit Memo
 Choose trading partner
 Terms: immediate
 Enter invoice amount in negative (-)
 Match action: Invoice
Go to “Lines” tab
Place the cursor on “Amount field”
Do not enter amount

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Debit Memo

Go to “Corrections” button

Choose invoice number

Say “find”
We are in “invoice correction” window

Enable “Select” check box

Enter credit amount in negative figure
Say “Correct”
Note: Starting correction of invoice
Say “OK”
Place cursor on “Amount” field of “Lines”

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Debit Memo

Go to “Distributions”
You will see the accounts information coming from standard invoice.

Save and Close this window

Go to “General” tab
Status: Never Validated

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Debit Memo

Now status is: Validated

Go to “Actions” again Say “Create Accounting” “Final”
Now Accounted: Yes

Go to Reports  View Accounting

Journal Entry:
Liability A/c Dr
To Item Expenses A/c

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Debit Memo

Step: 2 check the supplier balance

Navigation: Invoices  Inquiry  Invoices
Follow the procedure in Step: 1 of Credit Memo

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Prepayment Invoice

Pre payment is an advance payment made by organization to the supplier.

Latter it will be applied against future invoices.

There are 2 types of Prepayments.

1. Permanent
2. Temporary

Step: 1 Create permanent pre payment invoice

Navigation: Invoices  Entry  Invoices

 Choose Operating unit

 Type: Debit Memo
 Choose trading partner
 Enter invoice amount
 Enter invoice number
 Enter payment currency
 Terms: immediate
 Choose payment method
 Prepayment type: Permanent

Go to “Lines” tab
Enter the amount

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Prepayment Invoice

Go to “Distributions”

** Account is coming from supplier site.

No need to enter any fields manually in this window
Save and close this window.

Now the status is “un validated”

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Prepayment Invoice

Go to Actions:
 Validate
 Create Accounting

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Prepayment Invoice
Now the status is: unpaid
Accounted: Yes

Go to Tools  View Accounting

Journal Entry:
Pre paid expenses A/c Dr
To Liability A/c

Go to “Actions” again
Say “Pay in Full” Say OK

Prepayment Invoice
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System will take you to “payments” work bench

Some fields will copied by system

Enter the below fields manually
 Payment date
 Bank account
 Payment Method
 Payment Document
 Payment process profile: Manual

Now Status is Negotiable

Save your work
Up on saving system will copy the invoice details in below fields

Prepayment Invoice

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Save and close this window

Now the status is unpaid.

Re query the invoice: Status is Permanent Prepayment

Prepayment Invoice

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Go to Tools  View Accounting

Journal Entry:
Pre paid expenses A/c Dr
To Liability A/c

Step: 2 Convert permanent prepayment to temporary pre payment

Navigation: Invoices  Entry  Invoice

Query pre payment invoice

Prepayment Invoice

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Status is: Permanent Pre payment

Change the type to: Prepayment

Save your work
Now the status is “Available”

Step: 3 create one standard invoice and apply pre payment

Navigation: Invoices  Entry  Invoices

Create one standard invoice as usual with payment terms Immediate

At the time of Choosing supplier name system will give note that: Pre
payment is available for this supplier.

Prepayment Invoice

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Go to “Line” tab
Enter the amount

Go to the “Distributions”
Save and close this window

Go to “Actions”
Validate the invoice
Now the status is “validated”

Go to “Actions” again

Choose “Apply/Un apply prepayment”

Say OK

Prepayment Invoice

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System will take you to “Payments work bench”

Enable √ Apply check box

Amount to apply field will be copied by system

Say “Save”
Upon saving the above information will be moved to below “Existing
prepayment application”

Prepayment Invoice

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To reverse prepayment use “Apply / Un apply” button

Save and Close this window

Go to “Actions”
 Validate
 Create Accounting

Go to Tools  View Accounting:

Journal Entries are:

1. Item Expenses account Dr

To Liability Account

2. Liability Account Dr
To Prepaid expenses

Prepayment Invoice

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Step: 4 Query prepayment invoice to check the status

Navigation: Invoices  Entry  Invoices

Query Prepayment invoice

Now Status is: Available

Prepayment Invoice

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Go to “View pre payment Application” tab to see amount applied

Step: 5
Create one more standard invoice for balance amount and apply the pre
payment
Navigation: Invoices  Entry  Invoice

 Enter one standard invoice and apply to prepayment

 Query prepayment invoice to see the status

Now the status is “Fully applied”

Expenses Report Invoice

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An Invoice which is used to reimburse the business related expenses which
are incurred by employees.

Step: 1 Define Expenses report template

Navigation: Setup  Invoices  Expenses report templates

Expenses report template is used to list out all the expenses items which are
reimbursed by organization employee.

 Choose Operating unit

 Enter Expenses report template name and Description

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 Enter expenses name
 Choose Expenses Category
 Choose GL Account
Save your work

Step: 2 Define Expenses report options at payables options

Navigation: Setup  Options  Payables options

Go to “Expenses Report” tab

 Choose Default template

 Enable” Apply Advances” check box
 Enable” Automatically Create Employee as Supplier”
 Choose Payment Terms
 Choose Pay Group & Payment priority

Step: 3 Enter Expenses Report

Navigation: Invoices  Entry  Expenses Report

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 Choose Operating unit

 Choose Employee name
 Send to: home
 Choose GL Account
 Enter invoice number and Amount
 Choose Items and GL accounts
 Enable check boxes: Management & Payables
Say “Save”

Step: 4 run “Expense report Export” program

Navigation: view  Request

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Program Name: Expenses report export

Parameters:
 Batch name: N/A
 Source: Payables Expenses report
 Transfer DFF: Yes
 Enter GL date
 Debug switch: No
 Organization name: Choose operating unit
 Send notifications to: Choose Employee name
Submit
View  request  Find
Ensure program completed normal
Step: 5 Query invoice in the invoice work bench
Navigation: invoices  Entry  Invoices

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Query the expenses report invoice in the invoice work bench, validate and
make payment.

Interest Invoice

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An invoice which is created by system automatically to record the interest
charges on late payment.

Step: 1 Define Interest invoice option at payable Options

Navigation: Setup  Options  Payables Options

Go to “Interest” tab

 Enable “Allow Interest Invoices” check box

 Enter Minimum interest amount
 Choose Interest invoice Accounts for Expenses & Liability
Say “Save”

Step: 2 Enable allow interest invoice at payables system setup options

Navigation: Setup Options  Payables system setup

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Enable check box “Create Interest Invoices”

Save

Step: 3 Define interest rates

Navigation: Setup  Payments  Interest rates

Enter interest % and dates.

Save

Step: 4 Enable interest invoice at supplier level

Navigation: Supplier  Entry

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Choose your supplier name

Say “Go”
Go to “invoice management” tab

At header level
Enable “Create interest invoice” check box
Save
Step: 5 create one standard invoice with old date
Navigation: Invoices  Entry  Invoices

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Enter standard invoice with payment terms “immediate” with old date

Validate and create accounting through actions button

Step: 6 Make payments against the above invoice

Navigation: Payments  Entry  Payments

Choose:
 Type: Quick
 Choose Supplier name
 Choose bank details
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Click on “Enter / Adjust Invoices

Choose invoice number

System will display note as: This invoice is past due. Interest is due on this
invoice.
Say “OK”
Then system will calculate the interest amount

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Save
System will make the payment with interest amount

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Step: 7 Query interest invoice in invoice work bench
Navigation: Invoices  Entry  Invoices

F11
Enter interest invoice number
CTL F11

You can see the description as interest 76 days @ 5%

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Recurring Invoice

Recurring invoice is nothing but invoices which are repeating every

accounting period.

Step: 1 Define special Calendar

Navigation: Setup  Calendar  Special Calendar

Enter the name for special Calendar

Enter Description
Enter periods per year
Enter periods
Save

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Step: 2 Define recurring invoice template
Navigation: Invoices  Entry  Recurring Invoices

 Choose Operating unit

 Choose Supplier name
 Choose Special Calendar
 Enter number of periods

Choose First period

Go to Invoice Definition tab:
Enter invoice number
Choose Currency
Choose Liability account

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Choose Distribution set name under “Line Definition” tab

Go to “Amounts” tab
Enter the first amount

If you want a change in every month amount, we have to give the % in

change field.
You can setup amount:

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- Constant
- Increased
- Decreased
- Special
Special is setup for 2 invoices through:
1. Special invoice amount 1 enter the period
2. Special invoice amount 2 enter the period

Go to “payment” tab
Choose Terms
Choose Pay group
Choose payment method

Enter number of Invoices

Click on “Create recurring invoices”

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You can see number of invoices in “create invoice window”

Say OK

Step: 3 Query recurring invoice in the invoice work bench

Navigation: Invoices  Entry  Invoice

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 Validate invoice
 Create Accounting

Mixed Invoice

Mixed invoice type is used to create either Positive (+) or Negative (-)
amount invoices.

Type: Mixed

PO MATCHING

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Step: 1 create standard invoice
Navigation: Invoice  Entry  Invoice

Enter standard invoice

Type: Standard
Choose PO number
Match action: Purchase order
DO NOT GO to “Lines” tab
Do not enter amount

Say “Match”

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Choose PO number
Say “Find”

Enable “Match” check box

Details will be updated by system automatically
Save

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Again find purchase orders for matching window will open

Say Cancel

Go to “Lines” tab
You can see PO information and amount updated by system

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Go to “General” tab

Now status is “never validated”

Go to “Actions” button
 Validate
 Create Accounting

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QUICK MATCHING

Step: 1 Create standard invoice

Navigation: Invoice  Entry  Invoice

 Choose operating unit

 Type: Standard
 Choose PO number: supplier name will copied by system
 Enter invoice number and amount
 Match action: Purchase Order

Go to “lines” tab
Enter amount
Save

Go to “Actions” button
Validate
Create Accounting

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WITHHOLDING TAX INVOICE

WHT invoice will be created by system to pay WHT amount to the tax
authority.

Setup steps:
Step: 1 Enable WHT at payable options
Step: 2 Define WHT special calendars
Step: 3 Define Supplier as tax authority
Step: 4 Create WHT code and group
Step: 5 Assign WHT group at payables options
Step: 6 Enable WHT at supplier header and site level and assign WHT
Group
Step: 7 Create Standard invoice
Step: 8 Query WHT invoice for cross verification purpose

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Step: 1 Enable WHT at payable options
Navigation: Setup  Options  Payables options

Go to “Withholding Tax” tab

Choose:
 Use withholding Tax
 Apply withholding Tax: At invoice validation time (System will
automatically select “Include Discount Amount” under withholding
amount basis
 Create withholding invoice: At Invoice validation time

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Step: 2 Define WHT special calendars
Navigation: Setup  Calendar  Special Calendar

 Name special calendar

 Enter description
 Enter periods per year
 Type of Calendar: Withholding Tax
 Enter periods for 12 months
Save

Step: 3 Define Supplier as tax authority

Navigation: Suppliers  Entry

You can create a new supplier

Choose your supplier

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Go to “Organization” tab

Choose type: Tax Authority

Save

Step: 4 Create WHT code and group

Navigation: Setup  Tax  Codes

 Choose Operating unit

 Choose tax Authority (Step 3)
 Enter Tax code
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 Choose GL Account
 Choose Rate structure: Flat rate
 Choose WHT special Calendar

Enable check boxes for:

 Don’t create zero amount accounting or Invoices
 Create withholding tax group (System will create one WHT group)

Choose tax rate type: Standard

Enter tax rate
Save

Note: To create WHT group manually Setup  Tax  Groups

Step: 5 Assign WHT group at payables options

Navigation: Setup  Options  payables options

Go to “Withholding tax” tab

Choose Tax group

Say “Save”

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Step: 6
Enable WHT at supplier header and site level and assign WHT group
Navigation: Suppliers  Entry

Query your supplier

Go to “tax details” tab

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Enable “Allow withholding tax” check box
Choose: Invoice withholding tax group & Payment withholding tax group

Go to Supplier Site level

Enable “Allow withholding tax” check box

Choose: Invoice withholding tax group
Save

Step: 7 Create Standard invoice

Navigation: Invoices  Entry  Invoices

Type: Standard
Go to Lines tab and enter amount

Go to Distributions tab and enter the account & amount details

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Save your work

Go to “Actions”
Validate invoice
You can see the withholding tax amount

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Create accounting

View Journal entry:

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Step: 8 Query WHT invoice for cross verification purpose
Navigation: Invoices  Entry  Invoices

F11
Type: Withholding tax% CTL F11

Validate Invoice
Create Accounting

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PAY ON RECEIPT
Under pay on receipt method invoice will be created by system automatically
when we create receipt.

Setup Steps:
Step: 1 Enable pay on receipt at Supplier from Purchasing Module
Step: 2 Create purchase order
Step: 3 receive the goods
Step: 4 query the invoice in the invoice work bench

------------------------------- xxx--------------------------------------------

Step: 1 Enable pay on receipt at supplier

Navigation: Purchasing
Supplier base  Suppliers

Query your supplier

Say Go

Go to “Purchasing” tab
Go to “Self Billing”

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 Pay on: Receipt
 Invoice Summary level: Receipt
** These options are for: when the invoice created and how many invoices
have to be created.

Save
See for confirmation

Step: 2 Create purchase order

Navigation: Purchase Order  Purchase Order

Create a standard purchase order as usual

Approve the PO

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Step: 3 receive the goods
Navigation: Receiving  receipts

Choose your inventory organization

“Find expected receipts” window will open

Source type: Supplier

Choose PO number
Say “Find”

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Receipt header window will open

Close this window

Enable “quantity” check box

Choose Sub inventory
Save

** Ensure periods are open in PO and Inventory

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** To create invoice “Pay on receipt auto invoice” program will run by
system to create invoice automatically in system.

Ensure program completed normal

View output:

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Step: 4 query invoice in the invoice work bench from AP module

Navigation: Invoices  Entry  Invoices

F11
Invoice number: ERS% CTL F11

 Validate
 Create accounting

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RETAINAGE RELEASE INVOICE
Retain age is nothing but holding the portion of the amount from Supplier
payment. It will be paid to the supplier after completion of total work.

Setup Steps:

Step: 1 Enter retain age account at financial options

Navigation: Setup  Options  Financial Options

Go to Accounting Tab

Choose retain age account

Save

Step: 2 Enter retain age % at supplier

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Navigation: Suppliers  Entry

Query your supplier

Go to “Invoice management” tab

At supplier site level

Go to “Terms” tab

Enter Retain age Rate%

Save

See for confirmation

Step: 3 Create “Complex service agreement” in purchasing module

Navigation: Buyer work center  Orders

Choose “Complex Services (Actual) PO

Say GO

Go to “Header” tab

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Choose:

 Supplier
 Buyer

Go to “Lines” tab

Choose:

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 Type: Fixed price services
 Enter Description
 Category: Misc
 Enter price
 Enter need by date

Say Update

Now details screen will open

Say “Apply”

Go to “pay items” tab

Click on “Split” icon under Actions button

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Enter amounts for installments

Go to “Distributions” tab
Enter PO charge account in both lines

Say Submit

See for confirmation

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In the same above window

Choose view: My open orders

Say GO

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You can view the status approved

Close this window

Step: 4 create standard invoice and match with the above PO (Step 3)
Navigation: Payables
Invoices  Entry  Invoices

Create one standard invoice as usual

Type: Standard

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Choose PO number, system will automatically copy supplier fields

Enter invoice amount for 1st installment
Payment terms: Immediate

Go to Lines tab
Enter amount
Choose PO line & PO shipment

Go to General Tab
You can see retain age amount

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Go to Actions
 Validate
 Create accounting

Step: 5 Make payment

Navigation: Payments  Entry  Payments

Type: Quick
Enter payment date
Choose bank account

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Say “Enter / adjust Invoices

Choose invoice number Save

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Step: 6 Create retain age release (Contract completed)
Navigation: Invoices  Entry  Invoices

Choose operating unit

Type: Retain age release

Enter invoice number and invoice amount

Release amount net of tax: 0 (Zero)

Say “Match”

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Choose PO number
Say “Find”

Select the check box of release amount

Say “Release”

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Go to “Actions”
 Validate invoice

Select “Pay in Full” option

Go to Actions button
Create Accounting
If online accounting not completed, run create accounting concurrent
program

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INVOICE BATCH

Invoice batch is used to group the invoices, based on certain parameters.

We can enter at a time either invoice batch or individual invoices.

Step: 1 Set profile option “AP: Use invoice batch controls”

Navigation: System administrator
Profile  System

Say “find”

Choose “Yes” Save

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Step: 2 Create Invoice Batch
Navigation: Payables
Invoices  Entry  Invoice Batches

Enter:
 Batch Name
 GL Date
 Control count
 Control Amount
 Invoice type: standard

Click on “Invoices” button

Enter the standard invoice lines as usual

Go to distribution
Save

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Minimize this window

Go to Invoice Batch window

Click on Validate 1 button

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Say OK

Say OK

Go to View  Request
Ensure “invoice validation program” completed normal

Step: 3 query the invoice batch to check the status

Navigation: Invoices  Entry  Invoice Batches

F11 Query invoice batch CTRL F11

Click on “invoices” button

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CANCEL INVOICE

Only unpaid invoices will be cancelled

Navigation: Invoices  Entry  Invoices

Query the invoice which you want to cancel

Status should be validated

Click on “Actions”

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Select “Cancel invoice” check box

Say OK

Say OK

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Now Accounted status is: No
Go to Actions button
Choose Create accounting – Final
Say OK

Now accounted status is “Yes”

Go to Lines tab
Place the cursor on amount field
Click on “Distributions” button
You can see the reversal amounts for the same accounts

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REFUND

Refund is used to get back money from the supplier.

Refund can be done with reference of either Credit memo or Debit memo

Step: 1 Define Credit memo

Navigation: Invoices  Entry  Invoices

Step: 2 Enter the refund

Navigation: Payments  Entry  Payments

Type: Refund
Choose Trading partner
Enter payment date
Choose Bank account
Payment method

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Click on “Enter/Adjust Invoices”

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Choose the credit memo invoice
Save

Go to Actions button
Create Accounting

Go to Tools  View accounting

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MANUAL PAYMENT

Manual payment type is used to record the payments which have done
outside the Oracle.
Example: Issuing check manually
In this case, payment document number will be entered by user

Navigation: Payments  Entry  Payments

Type: Manual

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STOP PAYMENT

Step: 1
Query the payment document which you want to initiate to stop
Navigation: Payments  Entry  Payments

Go to “Actions” button

Choose “Initiate Stop”

Choose GL date

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Say OK

Say OK

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Now the payment status is “Stop initiated”

We have to inform to the bank the stop payment details

Step: 2 release stop payment

Navigation: Payments  Entry  Payments

Query the payment document which you want to release from stop initiated

Place the cursor on Payment Document number

Click on “Actions” button

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Select “Release Stop”

Enter Date
Say OK

Say OK

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Now status changed to “Negotiable”

REISSUE

Reissue feature is used to cancel the old payment document and also issue
new payment document

Step: 1 Query payment document

Navigation: Payments  Entry  Payments

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Now the status is Negotiable

Go to Actions

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Choose reissue
System will assign New paper document number
Say OK

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Now the status is Voided

Step: 2 Query the new payment document number to see the status
Navigation: Payments  Entry  Payments

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Now the status is “negotiable”

Go to Actions
Create Accounting

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VOID PAYMENT DOCUMENT
Void is nothing but cancelling the payment document

Step: 1 Query the payment document which you want to Void

Navigation: Payments  Entry  Payments

Now Status is negotiable

Place the cursor on Payment document

Go to “Actions”

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Select “Void” check box

Invoice Action: None
Say OK

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Say OK

Now the status is “Voided”

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HOLDS

Holds are used to prevent further action on invoices.

The actions are like validating the invoices, payment, Accounting etc.

There are 2 types of holds:

1. Manual holds
2. System holds

MANUAL HOLDS

In case of Manual holds, holds will be placed on invoices manually by user.

And also holds will be manually released by user after settlement.

Step: 1 Define reason for the hold

Navigation: Setup  Invoice  hold and release names

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Enter name and description
Choose type: Invoice hold reason
Select check box “Manual release allowed”
Save

Step: 3 Define invoice hold release reason

Navigation: Setup  Invoices  Hold and release names

Enter name and description

Choose type: Invoice release reason
Enable check box “Manual release allowed”
Save

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Step: 3 Create invoice and place hold manually
Navigation: Invoices  Entry  Invoices

Create one standard invoice as usual

Enter header information
Go to lines tab and enter amount
Complete Distribution window
Save

Now the status is “never validated”

Go to “Holds” tab
Choose Hold name

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Go to Actions button
Validate invoice
Now status: needs revalidation

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Step: 4 Release the holds
Navigation: Invoices  Entry  Invoices

Query the invoice for which you want to release the hold

Go to “Holds” tab
Choose release name & release reason
Save

Go to General tab

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Now status is “validated”

Holds: 0

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SYSTEM HOLDS
System holds are placed by system at the time of invoice validation.
We cannot release manually system holds
These holds are released by system only when we rectify the error

Step: 1 Create invoice and place system hold

Navigation: Invoices  Entry  Invoices

Create one standard invoice as usual

Enter header information

Enter amount in the line tab
Go to Distribution
Enter the different amount with line tab amount
Choose account
Save

Go to Actions

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Validate

Now status: Needs revalidation

Holds: 1

Go to Holds tab

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System will choose the fields automatically

We cannot release this holds manually

Step: 2 release the system hold from invoice

Navigation: Invoices  Entry  Invoices

Query the hold invoice number

Go to Distributions
Enter correct amount
Save
Close the distributions window

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Go to Actions
Validate

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Supplier Bank Account

Define Supplier Bank account

Navigation: Supplier  Entry
Query your supplier

Say Go Go to “Banking Details” Tab

Click on “create” button

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Choose Country
Enable check box for “Allow international payments”
Enter Bank details
Enter Branch Details
Enter Bank account details
Choose “primary” check box (For each currency one bank is primary)

Say Apply

“Bank account and assignment details” window will open

Account Assignment level: Site

Choose site: supplier site

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Say Go

Click on Add

Select the account

Say Select

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Save

See for confirmation

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SUPPLIER MERGE

Supplier merge is used to transfer the transactions from one supplier to

another supplier when acquisitions or take over is happened.

Step: 1 Define new supplier

Navigation: Suppliers  Entry

Click on Create Supplier

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Supplier type: Standard supplier
Enter Organization name
Choose country of origin

Say Apply
Go to “Address book” tab

Say Create

Enter address details

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Enable check box for address purpose

Say “Continue”

Select Site
Say Apply

Go to Invoice management tab

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Choose Invoice currency at both header and site level

Go to “payment” tab

Choose Payment priority and pay group

Say Save
See for confirmation

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Step: 2 merge the supplier
Navigation: Suppliers  Supplier merges

Invoices: All
√ Po
Choose from Supplier name and site
Choose to supplier name and address

Say “Merge”

Say OK

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Say OK
For multiple sites use another line
Close this window

View  Request
Ensure program completed normal

View output

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Step: 3
Query invoice in the invoice work bench to check supplier merge result
Navigation: Invoices  Entry  Invoices

F11
Enter supplier name
CTRL F11

Note:
If merge program run successfully system will automatically assign inactive
date to Tata supplier (Old suppler)

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DEBIT MEMO FROM RTS TRANSACTION

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RTS transaction means “Return to Supplier” is nothing but Purchase returns.

If we use “Debit memo from RTS transactions” feature, debit memo will be
created by system automatically when we return the goods to supplier.

Step: 1

Enable “create debit memo from RTS transactions” at supplier & Supplier
site level

Navigation: Supplier  Entry

Query your supplier

Go to “Purchasing” tab

Enable “Create Debit Memo from RTS Transaction”

Go to Supplier Sites

Self billing tab

Enable “Create Debit Memo from RTS Transaction”

Save

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Step: 2 Return goods to the Supplier

Navigation: Purchasing

Receiving  Return

Organization window will open

Select your inventory organization

Say OK

Find returns window will open

Choose Supplier

Go to Internal tab

Choose Operating unit

Choose PO

Say Find

Error: No records meet your search criteria

Receiving returns window will open

Select Qty check box

Save

Go to view  Request  Find

Ensure program completed normal

Step: 3 check the debit memo in the AP invoice window

Navigation: Payables

Invoices  Entry  Invoices

CTRL F11

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You will see Description: return to Supplier Transaction

Save

TRANSFER TO GL

Step: 1 Run “Transfer journal Entries to GL” program

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Navigation: View  Request

Program Name: Transfer Journal entries to GL

Parameters:
Choose ledger
Choose end date
Post in general ledger: No

Say OK
Say Submit

Ensure Program completed normal

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Step: 2 Query the journals in GL
Navigation: GL
Journals  Enter

Choose Ledger
Choose Source: Payables

Say “Find”
You can see purchase invoices and payments un posted journals
Review Journals
Post journals

Click on Review Journal

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Post

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PERIOD CLOSING PROCEDURES

1 Accounts Payables

1.1 Before submitting the Payables Accounting Process

1. Run the following Standard reports.

a) Invoice Register (with Unvalidated Invoices parameter as “YES”).

This report gives the details of invoices entered into the system, but no
action is taken i.e. the status of the invoice is Never Validated.
b) Invoice on hold Report.
This report gives details of all the invoices that are on hold in the system.
Pass the Parameters as shown in the Screen Shot below, give the period
end date in the To Entered Date field.

Resolve the Holds in the period end so that no Invoices are carried forward to
the next period during the Year End Close. In the Month End Closing you can
also choose to Sweep the Invoices in the next period. .

2. Based on the information from above reports, take necessary action on

invoices. Approve the Unvalidated Invoices, Account for the Unaccounted
Invoices, Release Holds where ever the Invoices are placed on Hold.

3. If payment batches are used, confirm all the Payment Batches.

4. Submit the Payables Accounting Process Program to account for

transactions. All the transactions needs to be accounted before transferred to
General Ledger.

5. Run and Review the Standard report Unaccounted Transactions Report.

Review any unaccounted transactions and correct data as necessary. Then
resubmit the Payables Accounting Process to account for transactions corrected.

6. Unposted Payable Journal entries will be found in the GL and it will be

posted into the General ledger.

7. This will be queried in the Journal Entry form with source as “Payables” and
posting status as “Unposted”. These Journal entries will be reviewed and Posted
into the GL. If Autopost is scheduled for Payables Invoices, query for any

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unposted journals that are remaining after the programe runs. Review and post
the remaining entries.

8. After running the “Payables Accounting Process Program” program, run

‘Create Mass Additions’ program from Account Payables responsibility. This
program transfers all the account lines that are marked as ‘Track as Asset’ and
have corresponding Clearing Account set up in Fixed Assets. (You cannot run
this program before Payable Transfer to General Ledger program is run, as it
considers all lines to be interfaced to the Fixed Assets must be transferred to the
General Ledger).

9. Reconcile with the General Ledger .The following standard reports from
payables module can be used for reconciliation.

1. Account Payables Trial Balance.

2. Posted Invoice Register.
3. Posted Payment register.

1.2 Opening/Closing of AP periods

Module: AP Module.

Navigation: Accounting > Control Payables Periods.

1. Complete the Transfer to General Ledger from the Payables for the period to
be closed.
2. Select the period to close. Select ‘Closed’ from list of values in the Period
Status and save the record. I
3. If any invoice/s, debit/credit memo, prepayment, expenses reports are not
approved, these will be swept into the next or decided open/future period. If
sweep is required, future period should be opened before sweeping is done.
4. Select the Next period to open. Select ‘Open’ from list of values in the period
status and save the record.

By

Pradeep

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