AP-SETUP's

Payables

setup's in 11i:

setup → invoice → payment terms

1.payment terms: In payment terms window you define the payment terms that you can assign to an invoice to automatically create scheduled payments when you submit Payables Invoice Validation for the invoice. You can define payment terms to create multiple scheduled payment lines and multiple levels of discounts. You can create an unlimited number of payment terms.

Each payment terms line and each corresponding scheduled payment has a due date or a discount date based on one of the following:

i) A specific day of a month, such as the 15th of the month
ii) A specific date, for example, March 15, 2002. iii) A number of days added to your terms date, such as 14 days after the terms date iv) A special calendar that specifies a due date for the period that includes the invoice

terms date. Only due dates can be based on a special calendar. Discount dates cannot

be based on a special calendar.

The payment terms define the due or discount amount on the scheduled payment.When you define payment terms you specify payment amounts either by percentages or by fixed amounts.

PAYMENT TERMS WINDOW:

1.Enter a unique name and description

2.if you are entering the day of the month terms. you can enter the cut-off date.

3.if you enable automatic interest. you can enter the rank(it takes the terms on rank given basis).

4.If you want the payment terms to be ineffective do enter the “To effective date”.

5.enter the payment term line.

Due tab:

enter either % of due or amount to determine the portion of an invoice due on the scheduled payment.

enter one of the following to determine the due date on the scheduled payment line

calender,days,day's of month,fixed date.

Other tab's:

enter the discount terms if your are using,define the payment terms in the first,second&third discount

Like same enter either due % or amount to determine the portion of the invoice to discount on the scheduled payment.

In the discount region enter the discount %(percent).when you give the discount percent days,day of month columns activates and you can give the details regarding it.

And finally save it.

Name. Payment term name. Use names that make it easy to identify the usage of payment terms. For example, use 1/10 Net 30 to refer to a payment term which indicates you get a 1% discount if you pay within 10 days and the invoice is due in 30 days. This name will appear on a list of values with the description whenever you select a payment term.
Description. Description of payment term.
Cutoff Day. For Day of Month type terms only, the day of month after which the due and discount dates of the scheduled payment will be in a future month. The exact month depends on the value you enter for Months Ahead. Payables compares the invoice terms date to the Cutoff Day. If you leave this field blank, Payables always uses the current accounting month to determine the due and discount dates. For example, your Cutoff Day is 11, your Months ahead is zero, and your Day Of Month due date is 15. If you enter an invoice with a terms date of January 12, Payables will set the due date for February 15.
If you use Due Days or Fixed Date type terms, do not enter a cutoff day.
Rank. If you enable Recalculate Scheduled Payment, enter a unique value to rank your invoice terms. 1 is the highest rank. Payables uses ranks to choose the most favorable payment terms from the invoice and purchase order. During Payables Invoice Validation, Payables recalculates the scheduled payment using the most favorable terms only if the Recalculate Scheduled Payment Payables option is enabled.
% Due. The portion of an invoice due. The total of your scheduled payment lines must equal 100%. You cannot combine percentages due and amounts due for one set of payment terms.
Amount. For amount due terms only, enter the amount due. Typically amount due terms have more than one payment terms line since you must specify zero as the amount on your last payment terms line. Payables uses the zero amount payment line to determine the remaining amount due on the last scheduled payment.

Due or Discount Date Region

Calendar. If you enter a value in the Calendar field, Payables determines due dates for scheduled payments by using a special calendar. A special calendar is divided into periods, and each period has a due date assigned to it. When you assign due dates to the periods of a payment terms calendar, you can avoid weekends, holidays, and so on. You can define special calendars for payment terms in the Special Calendar window.

Note: If you use calendar-based terms, be sure to use calendars with periods defined for any invoice terms date that you will use. You cannot assign calendar-based terms in the Invoices window if there is not a period defined for the terms date. If you do so in the Invoice Gateway, then the system will use the terms date as the due date. If you do so for an expense report, you cannot import it.

Fixed Date. Specific month, day, and year on which payment terms are due.
% Discount. Payables uses the percentage you enter here to calculate the discount amount available for a scheduled payment. Payables multiplies this percentage with the amount due on the scheduled payment line to determine the discount amount available on the scheduled payment line. In the Second and Third Discount regions, you can enter second and third discount percentages for discounts available if you miss the first discount date. Do not enter a value in this field if there is no discount available.



Days. Payables adds this number of days to the invoice terms date to determine the due or discount date on your scheduled payment line. You cannot enter values in the Day of Month and Months Ahead fields for a payment terms line if you enter a value in this field.
Day of Month/Months Ahead.

Day of Month. Payables uses the value you enter here to calculate a due or discount date for a scheduled payment. For example, enter 15 to have Payables schedule payment for the 15th day of the month. Enter 31 if you want to have Payables schedule payment for the final day of the month, including months with less than 31 days.

Months Ahead. For Day of Month type terms only. Payables uses the value you enter here in conjunction with the Cutoff Day you enter to calculate the due or discount date of a scheduled payment line. If you enter zero in this field and the terms date of an invoice is the same as or later than the Cutoff Day, then Payables uses the day in the Day of Month field for the next month as the due date of an invoice payment line. If you enter 1 in this field, Payables uses one month beyond the next month as the due date.

You cannot enter a value in this field if you enter a value in the Due Days field.

Distribution sets

Navigation: setup → invoice → distribution set

If you want to distribute an invoice into various deparments or like ways,you can use this distribution sets.you can use a distribution set as default to a supplier site,so that payables will use it for invoices for that supplier site.even you can assign this set to other invoices when you enter.

There are two distribution sets:

→ full distribution set

→ skeleton distribution set

1.full distribution set:In this set you assign the 100% of the invoice to be distributed to various departments. For example in rent invoice you can assign 70% to revenue department and 30% to Administration department.

Optionally enter an Invoice Tax Code. The Tax Code value will default based on the Tax Code Defaults hierarchy you defined in the Payables Options window. If the source Payables uses is Template, then Payables uses the value from the Distribution Set as the default value for invoice distributions, even if the value is null.

2.skeleton distribution set:by taking the same example in this type of set,the same invoice would create one distribution set for for revenue department and other for Administration department and leaving amount to zero.

Difference:

In FDS:Enter the Account and Description for each distribution and enter the Percentage of the invoice amount that you want to distribute to the Account. You can enter +ve & -ve percentages. Create as many distributions as you need. The sum of the distribution percentages must equal 100 or 0.

In SDS:Enter the Account and Description for each distribution and leave the Percentage at zero. Create as many distributions as you need.

Project related distribution set: if you are installed with Oracle Projects and want to use the D'sets check the project related check box and a window is displayed

To create a project related Distribution Set:

1. Enter either a Skeleton or Full Distribution Set in the Distribution Sets window.

2. If a distribution is project related, check Project Related.

Enter the Project, Task, Expenditure Type, and Organization.

If you use Oracle Grants Accounting, you can enter a value for Award Number, to record the award associated with the project.

3. Save your work.

TOLERANCE:

Navigation:setup → invoices → tolerance

Invoice tolerance is used to define the matching and tax tolerance you want to allow between the receipts,invoices,purchase order and tax information. You can give the tolerance based on the % of the invoice,etc or the amount. Tolerances determine whether Payables places matching or tax holds on an invoice.

When you submit Payables Invoice Validation for an invoice that you have matched to a purchase order or receipt, Payables checks that the invoice matches the purchase order or receipt within the purchase order matching tolerances you define.

When you submit Payables Invoice Validation for an invoice with a tax amount, Payables checks that the actual invoice tax amount equals the calculated tax amount within the tolerances you define.

You can enter even Zero(0%) for the tolerance and enable the tolerance check box. This will make Payables not allow any variance at all

→ if you want a low tolerance, you can enter a very small percentage.

→ If you enter no value , This will make payables to allow infinite tolerance.

If you use a percentage based tolerance, Payables calculates the tolerance based on the invoice amount, including tax. For example, you have a $100 item on an invoice and the tax rate is 8%. You have a 10% tax tolerance. You can enter a tax distribution amount between $7.20 to $8.80 without getting a Tax Variance hold on the invoice.

Creating a Tolerance:

1.Activate the check box for tolerance which you want to use or enforce.

2.Enter the tolerance level for purchase order matching transactions and taxes.

3.Enter the amounts in your functional currency.

4.PO matching applies to the matched purchase order invoice and receipts

5.In maximum qty ordered Enter quantity difference that you allow suppliers to invoice. Here the payables Invoice Validation checks the quantity billed against the quantity ordered without taking price into consideration. Enter a Maximum Quantity Ordered tolerance only if most of your purchase orders are for the same relative value.

6.In max qty received Enter either the percent or quantity received difference that you allow suppliers to invoice. Payables Invoice Validation checks the quantity billed against the quantity received without taking price into consideration. Enter a Maximum Quantity Received quantity tolerance only if most of your purchase orders are for the same relative value.

7.In the price column, you enter the percentage of difference(unit price) you allow suppliers to invoice.

8.Here in exchange rate variance you allow the amount of variance between an invoice amount and the amount of the purchase order shipment to which it is matched. Payables compares the functional currency of each, based on the invoice and purchase order exchange rates.(use if you enter foreign currency in invoices in payables).

9.In shipment amount,the amount of variance you allow between all invoice amounts (in transaction currency) matched to a shipment and the amount of the purchase order shipment. Payables Invoice Validation applies the Maximum Shipment Amount hold if the match exceeds the tolerance.

10.Here in the total amount, you enter the variance you allow for both the Exchange Rate Amount variance and the Shipment Amount combined. If you do not use foreign currency, do not enter a value in this field.

11.Finally in tax group you enter the the amount of variance you allow between the actual invoice tax amount and the invoice calculated tax amount.

Invoice Hold and Release Names

Navigation : setup → invoices → Invoice Hold and Release Names

Invoice Hold and Release Names is used to define the names that you use to manually hold or release invoices,we can define as many hold names you can to assign to an invoice during placing it on hold.

Example : Needs supervisor approval

you can also define release names to remove holds you applied to invoices

Example : supervisor approved

Even you can also determine the accounting entry creation for the hold names,by which until you remove the hold you cannot create a n accounts for that transaction(invoice).

Note:there are many predefined Hold and Release Names

Expense report template

Navigation:setup → invoices → expense report template

Use the Expense Report Template window to define templates based on the expense report forms you regularly use in your enterprise. You can define default values for expense items, and you can then choose those items from a list of values when you enter expense reports.

Payments

Navigation:setup → payments → Banks

Bank window is used to enter information of the banks with which you do the business. Applications like payables and receivables use this information during the various transactions. In a bank, we have various bank branches,accounts and each account is associated with Payables payment documents and Receivables payment methods.
If you use Receivables, use the Banks window to define your internal banks, which you use for receipts, and external banks, which are your customers' banks with which you do business.
If you use Payables, use the Banks window to define your internal bank accounts from which you disburse payments. For each internal bank account, you can define payment documents for checks, electronic payments (EFT and EDI), wire transfers, and other payment methods. You can also define transmission details that are used by the Automatic Bank Transmission feature.
If you are using Oracle Cash Management, you need to define a Bank Errors Account, a Bank Charges Account, and a Cash Clearing Account for each bank account you plan on reconciling by using Cash Management. If you use Payables, you can override these accounts for each payment document you define.












In Bank region:
1.Give the name of the bank and even the alternate name
2.Give the identification number in the number field. It is useful to identify the bank during electronic payment method.
In Bank branch region:
1.Give the name of the branch and the alternative name.
2.Give the bank branch number.
3.In the Type field,give the banking organization to which this branch belongs.(Required-if you use Oracle E-commerce gateway).
4.In institution field enter the bank or clearing house to indicate what type of bank branch you are defining.
5.Inactive on :if you enter the date in it then during transaction entry, after this date the bank's accounts will no longer appear on any lists of values in Payables, and you will not be able to enter the bank accounts when you enter transactions.
6.Enter the EFT number,Bank identification code(BIC)-used to identify bank/branch during the EFT's..
7.Enter the Address.
8.When you click bank accounts button

Automatic Payment Programs

In payables,use the Automatic Payment Programs window to define payment programs. In Receivables, use this window to define additional receipt and remittance format programs.

1. In the Automatic Payment Programs window, enter a unique Name for the program you are defining. This name will appear on a list of values whenever you need to enter the program name. Enter a program Type. Enter the Registered Name. The concurrent manager uses the Registered Name to refer to the payment program.
2. Save your work

FORMATS

Navigation:setups → payment → formats

Automatic payment program is used to define payment programs(In payables) , where as in receivables, to define additional receipt and remittance format programs.

Use the Automatic Payment Programs window to define payment programs that you use to format payment documents and separate remittance advice. You specify whether each program is for building payments, formatting payments, or creating a payment remittance advice.

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



1.Enter the name of the payment format, this name will appear in the list of values in the payments document window.
2.select the type of payment method that this payment format will use.
3.If you want the payment format to pay only zero amount payments, enable “Zero amount payments only” option.
4.If you want this format to group payments by due date, enable the Group by Due Date option.
5.Either enable the format for multiple currency payments, or select a single currency.
6.Specify if you want the payment format to print a remittance advice on a payment stub, and if so, if you want it printed before or after the payment document. Enter the number of invoices you want to appear on your remittance advice for this payment format.
7.Choose a Build Payments Program.
8.Choose a Format Payments Program.
9.If you selected None for the Remittance option, choose a separate remittance program.
10.Save it.

Payment Interest Rates

Navigation:setup → payment → Interest rates

In this window you define the interest rates used to calculate and pay interest on overdue invoices. It is used only when you Enable both “Allow Interest Invoices Payables Option and Allow Interest Invoices Option “ for the supplier of an invoice.
Note:The system uses Zero as rate if it doesn't find a Rate.
1.Enter an Interest rate, and Enter the start and an End date between which the interest rate is Effective.
2.Save it.

Bank charges

Navigation:setup → payment → Bank charges

To transfer the money between the banks,we use Bank charges window. Here we specify the charges between your remittance banks and your suppliers' banks. if you specify a single bank, you have the choice of selecting a particular branch of that bank or all branches.

1.Use the Bank Charges window to specify the fee charged by the customer's bank to transfer money to the supplier's bank.

2.Use the Bank Charges region to specify the transferring from and receiving to banks and branches. 3.Use the Bank Charges Lines region to specify the charge amounts

4.save it.

Types

Navigation:setup → Calender → Accounting → Types(period types)

Period types are used to define the accounting calender to your organization. Each SOB has an assigned Period Type, when you assign it to the SOB then only the periods with the appropriate period type can be accessed. You can create multiple Period Types but a SOB follows only one single Period Type.

1.Enter name for the Period Type.

2.Enter the number accounting periods per year. For example:Week period type=52 periods per year.

3.For fiscal year you can assign 366 periods.

4.Enter the year type to specify whether it is fiscal or calender year type.

5.Save it.

Period

Navigation:setup → Calender → Accounting → Period

Here you can Specify number multiple calenders,for example monthly calender for one SOB and quarterly for another SOB.

1. Navigate to the Accounting Calendar window.
2. Enter a Name and Description for the calendar.
3. Add the periods that make up the calendar year.
4. Save it.

Special calender

Navigation:setup → calender → special calender

It is used to define periods that payables uses for Automatic with holding tax,recurring invoices,payment terms and for Key indicators report.
1.Select the type of calender like Recurring invoice,withholding tax,payment terms,Key indicator.
2.Enter the name and description
3.Enter the number of periods per year.
4.Enter the period name like jan,feb,mar,apr........
5.Enter the year and give the sequence of the month to be used .
6.If you are defining a payment terms calendar, enter a due date for each period. For invoices with terms dates that fall anywhere within the period, a due date defines the date on which these invoices become due. Be sure to define periods with due dates for any terms date for which a user will enter an invoice or expense report.
7.Save it.

Aging Periods

Navigation:setup → calender → Aging Periods

This window is used to define time periods for the Invoice Aging Report. The Invoice Aging Report provides information about invoice payments due during four periods you specify. Payables displays the invoice information in four columns. Each column corresponds to one period. When you submit the Invoice Aging Report, you select the type of aging periods to use for the report.
1.Enter the Name and Description of the type of aging periods you are defining. When you submit the Invoice Aging Report, this value will appear in Type parameter list of values if it is active.
To activate the aging period, choose Active.
2.Enter each aging period i.e.., Enter the range of days for the period. For example, to define a period that reports invoice payments due during the next 7 days, enter From -7 days To 0 days.
3.Save it.

(Currency) Define

Navigation:setup → currency → define

1.Enter the code,name,issuing territory(country),symbol,precisions,effective dates.....
2.Save it.

Countries

Navigation:setup → countries

This window is used to maintain country and territory information in Oracle Financials. You cannot enter a new country or territory in this window, but you can update the name, description, VAT member state code, or address style for any of the more than 200 predefined countries or territories.

To adjust:

1.Adjust any of the following four fields like Country,description,Vat member state code,address style

2.Save it.

DEFINE(SOB)

Navigation:setup → Set of books → define

This window is used to assign a functional currency, an account structure, and an accounting calendar for your company or group of companies. When you define a set of books, you can also choose to enable budgetary control for the set of books. If you choose this option, encumbrances will be created automatically for your transactions in General Ledger, Oracle Purchasing and Oracle Payables. Enabling budgetary control is the first step in setting up funds checking. When defining a set of books, you can also choose to enable average balance processing. If you choose this option, General Ledger will track and maintain average and end-of-day balances.
1.Enter the name of SOB,description,short-name...
2.Enter the name of any enabled Chart of Accounts, or account structure, for this set of books.
3.Enter the functional currency or primary currency.
4.Assign an Accounting Calendar and Period Type to the set of books. General Ledger uses the calendar periods that have the period type you specify for journal entry, budgeting, and reporting with this set of books.
5.Enter the number of Future Periods to allow for journal entry within this set of books.
6.Assign the default Retained Earnings account for your set of books under the Closing Tab
7.Complete the remaining options for your set of books under the Closing, Journaling, Average Balances, Budgetary Control, and Multiple Reporting Currencies tabs
8.Save it.

Journaling tab:

Balance Intercompany Journals: Allows users to post out-of-balance intercompany journal entries (debits do not equal credits for a particular company or balancing entity), and automatically balance intercompany journals against an intercompany account you specify. If you enable this option, you must specify intercompany account's in the Intercompany Accounts window.

Journal approval:Allows you to use General Ledger's Journal Approval feature in your set of books. When Journal Approval is enabled and a journal entry's journal source requires approval, the journal must be approved by the appropriate level of management before any further action can be taken. If Journal Approval is not enabled, approval is not required, even if the journal source requires approval.

Journal Entry Tax: Allows you to manually enter taxable journal entries in General Ledger. When you enable this feature for a set of books, the system will automatically calculate associated tax amounts and generate tax journal lines.

Suspense: If you choose to allow suspense posting of out-of-balance journal entries, General Ledger automatically posts the difference against this account. If you have multiple companies or balancing entities within a set of books, General Ledger automatically creates a suspense account for each balancing entity.

Rounding Differences: Allows you to track penny differences in currency conversions. If you enable this option, you must enter a rounding differences account for the set of books. Enable this feature if your foreign currency transactions include different balancing segments to represent multiple companies. General Ledger will automatically create a rounding differences account for each balancing segment

CHOOSE(SOB)

Navigation:setup → set of books → choose

1.Navigate to the Choose Set of Books window.

2.Enter the name of the Set of Books you want to use.

3.Save it

Here SOB's define the chart of accounts,functional currency,accounting calendar your organization uses to record transactions in Payables.

FINANCIALS(OPTIONS)

Navigation:setup → options → financials

This window is used to define the options and defaults that we use in Oracle Financial Applications, it uses the values in payables,purchasing,Assets

Accounting Tab:

1.Give the default Future periods you use in your SOB.

2.GL accounts for various transactional accounts.

Supplier-Entry Tab:

This tab is used to control supplier entry and purchase order matching

RFQ Only Site. Default value for all new suppliers. You cannot create purchase orders in Purchasing for a supplier site which is an RFQ Only Site

Hold Unmatched Invoices. If you enable this option for a supplier site, Payables applies a Matching Required hold to an invoice if it has Item type distributions that are not matched to either a purchase order or receipt. Payables applies the hold during Payables Invoice Validation. You cannot pay the invoice until you release the hold.

To release the Hold: You can release this hold by matching the invoice to either a purchase order or receipt, and resubmitting Payables Invoice Validation, or you can manually release the hold in the Holds window of the Invoice Workbench. Payables will not apply a hold if the sum of the invoice distributions by accounting code combination is zero

Invoice Match Option. Indicate how you want to match most invoices. Defaulting is in the following order but can be overridden at any level: Financials options --> supplier --> supplier site --> purchase order shipment. The value at the purchase order shipment controls to which purchasing document type you can match an invoice.

1.match invoices to Purchase order=if you select Purchase order from list

2.match invoices to Receipts=if you select receipt from the list of options.

Supplier number entry:You can enter your supplier numbers manually or let Payables automatically generate sequential supplier numbers for you. You can change the number entry method at any time

→ In automatic the system automatically assigns a unique sequential number to each supplier when you enter a new supplier

→In manual you need to enter the number when you enter the supplier.

Supplier number Type: can give the type of supplier number like numeric and Alpha-numeric .

Suppliers-payable Tab:

This tab is used as default values for the Payment region of the Suppliers window.

Payment Terms:When you give the payment term here the system will automatically calculates the due dates,discount availed dates and discount amount.

Payment Method: Here you give the organization's most frequently used pay method like check(cheque),electronic,wire,Clearing(for recording payments to internal suppliers)

Receipt Acceptance Days: If you create interest invoices for late payment, enter the number of days in your receipt acceptance period. If you enable the Recalculate Scheduled Payment Payables option, then Payables Invoice Validation recalculates your invoice due date based on this value.

Always take discount: if you enable this option Payables always take an available discount for a supplier, regardless of when you pay the invoice.

Pay alone:Payables creates a separate payment for each invoice. If the Pay Alone option is not enabled for an invoice, the invoice will be paid with other invoices for the same supplier site on a single payment.

Supplier-purchasing Tab:

Except for Inventory Organization, other options defined here are used as default values for the Purchasing region of the Suppliers window.

1.Enter the default ship to , Bill to location.

2.Enter the Inventory organization : when you assign as operating unit to an inventory organization

items you define in this organization become available in Purchasing.

3.Enter the Ship-via:the freight carrier you use with suppliers.

4.The freight terms for a supplier identify whether you or your supplier pays for freight charges on goods you receive.

Human Resources Tab:

Here you can give the business group , Expense reimbursement address ,employee number method.

If you check the use approval hierarchies,for approvals it uses the supervisor or employee hierarchies

and if unchecked it uses the positional hierarchies.

Tax Tab:

you can enter the default tax code to be used , location of your company(in member state),vat registration number of your company,etc...,

Encumbrance Tab(budgetory control):

1.If you check use req. encumbrance the Purchasing creates journal entries and transfers them to General Ledger to encumber funds for purchase requisitions.

2.Reserve at Completion. If you enable Use Requisition Encumbrance, indicate whether you want requisition preparers to have the option to reserve funds. If you do not enable this option, only requisition approver's will have the option to reserve funds.

3.If you enable use PO Encumbrance option, Purchasing encumbers funds for purchase orders and Payables encumbers funds for variances during Payables Invoice Validation for purchase order and receipt matched invoices. If you enable this option and enter a non-purchase order matched invoice, Payables will encumber funds for it during Payables Invoice Validation. All Payables encumbrances are reversed when you create accounting entries. If you enable Use Requisition Encumbrance, you must also enable this option.

PAYABLES(OPTIONS)

Navigation:setup--->options--->Payables

Accounting method Tab

Transfer to GL Tab

Payment accounting Tab:

Currency Tab:

Supplier Tab:

Invoice Tab:

Matching Tab:

Interest Tab:

Expense Report Tab:

Payment Tab:

Invoice Tab:

With holding tax Tab:

Tax defaults and Rules Tab:

Look-ups

A lookup is a predefined value that wasn't defined in a setup window. simply a lookup is nothing but a set of codes and their meanings. A simple Example is lookup type of Gender

code Meaning

M Male

F Female

U Unknown

By this,instead of using original value we can store a look up codes. Most lookups cant be modified.

PAYABLES LOOKUP:

Navigation:setup → lookups → payables

Purchasing Look-ups :

Navigation:setup → lookups → purchasing

Employee Lookups :

Navigation:setup → lookups → Employee

Not disclosed Topics

1.flexfields

2.rates

3.Matter on payables option

4.Matter on Lookups