ap concepts part1 oracle 11

7/31/2019 AP Concepts Part1 Oracle 11

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

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

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

Pay suppliers on time

Get maximum discounts on payments

Prevent duplicate billing and invoicing

Perform multiple matching of Invoice and Purchase Orders

Avoid overdrafts on bank accounts

Review information online to check the status of payments

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

Supplier

The Suppliers window enables you to enter information about individuals and organizations thatsupply goods and services. You can enter employees as suppliers to enable the system to makepayments against expenses.

If any of the suppliers operate from multiple locations, you need to enter the supplier information

only one time. You can assign multiple sites to each of the supplier's locations. A site is a locationfrom where the supplier runs a specific business. Sites can be designated as pay sites, purchasingsites, and REQ only sites. On the basis of supplier definition, you can purchase goods or servicesand send payments to a site.

How to Define a Supplier

To define a supplier:

1. Log on to Oracle Applications. Select Switch Responsibility -> Payables, from the main

menu. Select Suppliers > Entry. The Suppliers form opens, as shown -


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The Suppliers Form

2. Enter a name, tax payer ID, and a number signifying your customer ID. Select theClassification tab. In the Type field, select a type from the LOV for the supplier.3. Open the Accounting tab. Enter a distribution set to automatically enter distributions for aninvoice when it does not match a purchase order. For example, you can create a distribution set forstationery supplier. This allocates stationery expense on an invoice to a specific number of end users.4. Open the Control tab. In the Invoice Match option, select either Purchase Order or Receipt.

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

5. Click the Payment tab. In the Terms field, select a Payment Term agreed upon by you and

your supplier. Select Pay Group to assign to the supplier, as shown earlier in screenshot-26. Enter a priority number between 1 and 99 in the Payment Priority window with one having thehighest and 99 the lowest priority. Select Terms Date Basis to define the date from which Payablescalculates a scheduled payment from a supplier.7. Select Pay to determine the pay date for a supplier's invoice. Click the Bank Accounts tab todefine the supplier's bank accounts.8. Select Purchasing. Define the organization's Ship-To and Bill-To locations among otheroptions, where the supplier sends the goods to the Ship-To location and the invoices for goods orservices to the Bill-To location.9. Select the Receiving tab. The options to open the Receiving tab are:o Enforce Ship-To Location: Determines whether or not the receiving location is the

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

at the Ship-To location.o Match Approval Level: Allows you to online match receipts and purchase orders to

ensure that you pay only for the ordered goods and services.o QuantityReceived Tolerance: Defines the maximum range of over-receipt in addition

to the quantity ordered, based on the percentage you enter.o Tolerance: Defines how the purchase department handles the receipts that exceed

the QuantityReceived Tolerance based on the selected value.o Days Early and Days Late Receipt Allowed: Defines how many days before and after

the date of receipts of goods, you are ready to accept the delivery.o Receipt Date Exception: Defines how the purchase department handles receipts that

exceed the Days Early and Days Late Receipt Allowed.

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


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The Supplier Sites Form

11. Type a site name, EC-NYC in the Site Name text box. Type the address in the Addressoption. Select the General tab and select the Pay and Purchasing check boxes in the Site Usesoption. The concerned supplier uses this site for receiving purchase orders as well as payments.Select the Contacts tab and enter a contact name and information for the supplier.12. Select the Accounting tab. Enter the default GL accounts that will be updated when you dealwith the supplier. Click the Bank Accounts tab and enter the supplier's bank account data. Save andclose the Supplier Sites form.

Payment Terms

You need to define Payment Terms to assign them to an invoice. This allows you to automatically

create scheduled payments when you submit an invoice for approval. A Payment Term consists ofone or more Payment Term lines where each line creates a scheduled payment. Each scheduledpayment has an associated due date or a discount date based on:

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

A specific date, such as January 10, 2003.

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

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

To define a Payment Term:

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


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The Payment Terms Form

2. Enter a name for the Payment Term.

3. Enter a Cut-off Day if you are entering Day of Month terms. The Cut-off Day defines

the day of the month. After the Cut-off Day, due and discount dates will be in a future month

depending upon the value entered in the Months Ahead field. For example, the values of Cut-

off Day are 10, Months Ahead is 0, and Day of Month is 15. If you enter an invoice with a

terms date of March 12, Payables will set the due date to April 15.

Note You can also use Fixed Date or Days terms instead of Day of Monthterms, but you cannot select two different terms.

4. Enter 100% or less if payment is made in installments in the % Due field. Click the FirstDiscount tab.5. Enter the discount percentage in the % Discount field. Press Tab to go to the Days field.Enter a value 10 in the Days field. This Payment Term will provide a 2% discount if payment is madewithin 10 days of the Term Date. Define the second and third discounts.6. Save and close the Payment Terms form.

Distribution Sets

A distribution set creates distributions for an invoice where the Purchase Order does not matchwith the invoice. You need to assign distribution sets to a supplier site where the Payables moduleuses them for every invoice assigned to the supplier site. If a distribution set has not beenassigned to a supplier site, select one when you enter the invoice.

The two types of distribution sets are:

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

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

To define a distribution set:


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

The Distribution Sets Form

2. Enter a name for the set.3. Click the Num field. Type 1 for the first distribution line.4. Enter the percentage of the invoice amount you want to distribute among the distribution linein the % field.

5. Type the account code to which this distribution line belongs in the Account field.

For example, you can enter depart 001.

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

6. Save and close the Distribution Sets form.

Invoice Tolerances

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

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

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

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

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


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The Invoice Tolerances Form

Invoice Approvals

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

To define Invoice Approval code:

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

The Invoice Approvals Form

2. Enter a name and description for the code.3. Select a predefined type in the Type field.4. Select the Accounting Allowed option if you are defining a hold code.5. Enable the Manual Release Allowed option manually if you are defining the release code. Itreleases the hold on an invoice.6. Save and close the Invoice Approvals form.

Invoices


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

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

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

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

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

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

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

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

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

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

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

Figure shows the invoicing process:

Overview of the Invoicing Process

Invoice Gateway vs. Invoice Workbench

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

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

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

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

do it from the same window.


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How to Enter an Invoice

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

1. Log on to the system. Select Switch Responsibility -> Payables, from the main menu.2. Select Invoices > Entry > Invoice Batches, from the main menu. The Invoice Batches form

opens, as shown -

The Invoice Batches Form

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

The Invoices Form

4. Select Type as Standard. Select a Supplier. When you select a Supplier, the SupplierNumber and Site is automatically populated.5. Enter an invoice date in the Invoice Date column. Enter the invoice number as 100.6. Select the Invoice Currency as USD. Enter the invoice amount as 10, 000.7. Type GL Date = System Date and Terms Date = System Date.8. Change the Payment Term if needed. The default value defined will be similar to the Invoice

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


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

How to Enter Invoice Distributions

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

departments.

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

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

shown -The Distributions Form

2. Type one in the Number field. Select Item in the Type field.3. In the Amount field, type 3500.4. Type a GL Date or accept the system date.5. Type the account combination for the first department for which the cost is being allocated inthe Account field.6. Type 2 in the Num field. In the Type field, select Item. In the Amount field, enter 4000. Type aGL Date and the account combination for the second department, as shown in the Screenshot above.7. Repeat the steps for the third number. Ensure that the Invoice Total matches the DistributionTotal.8. Save and close the Distributions form.

How to Enter Distributions Using a Distribution Set

Prerequisite: Create a distribution set.

To enter an invoice distribution using a distribution set:

1. Open the Invoice Batches window.2. Select View -> Find, from the top menu. The Find Invoice Batches window opens. Enter thename of your invoice batch. Click the Find button. The Invoice Batches form opens with the invoicebatch.3. Click the Invoice button. The Invoices form opens.4. Enter Type as Standard.5. Enter your supplier and press Tab to go to the Invoice Date field. Type an invoice date.6. Enter the invoice number and invoice amount.

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


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8. Click the Distribution button. The Distributions window opens where you can see that thedistribution for your invoice is complete.9. Save and close the Invoice Batches form.

How to Create a Scheduled Payment

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

To create a scheduled payment for an invoice:

1. Open the Invoice Batches window. Select Invoices > Entry > Invoice Batches. The InvoiceBatches window opens.2. Select View > Find to query the Invoice Batch from the top menu.3. Click the Invoices button in the Invoice Batches window. The Invoice form opens.4. Enter a Standard invoice using a distribution set. Save date in the Invoice form.

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

The Scheduled Payments Form

6. Enter 70% of your invoice amount in the Gross Amount field.7. Click the Split Schedule button. A scheduled payment new line is automatically created in theScheduled Payments form.8. Ensure that the invoice amount matches the gross amount total.9. Save the date in the Scheduled Payments form.

How to Create Freight Distribution

To create freight distribution in Oracle Payables:

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

Allocate freight across invoice distributions.

Manually enter freight distributions.

To create freight distribution:

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


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2. Select your batch. Click the Invoices button.

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

3. Create a Standard invoice in the Invoices form.4. Enter the invoice number and invoice amount in the Invoices form. The Invoice Amount hereincludes Freight.5. Enter a value in the Freight Amount field.

6. Select the Create Freight Distribution check box. The Freight window opens. Type

your Freight distribution account here. Click OK.

Note If you have already entered a Freight distribution account whenconfiguring the Payable option then that account code will appear bydefault.

7. Save the Invoices form.8. Click the Distributions button to verify the freight distribution. The Freight line appears, bydefault.9. Add another distribution line. Save and close the Invoices form.

How to Allocate Freight

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

1. Open the Invoice Batches window and select Query to find the invoice batch.2. Click the Invoices button. The Invoices form opens. Enter an invoice.3. Set Type as Standard and select a supplier name.4. Enter an Invoice number and the Invoice amount. The invoice amount includes the freightamount.5. Click the Distributions button. The Distributions form opens.

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

Note The amount distributed here will be net freight amount. The distribution isbeing made across two different departments. While entering the accountcode, ensure that different values are selected for the Departmentsegment.

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

The Charge Allocations Form

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


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9. Enter the Freight amount to be allocated to each department in the Amount field. Click theSelect/Unselect All button.10. Click the OK button. You will automatically return to the Distributions window. The Freightallocation is prorated on the basis of the amounts in the two item distribution lines. Save and closethe Charge Allocations form.

How to Match Invoices with Purchase Orders

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

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

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

There are three Match Approval levels:

2-Way:

o The quantity billed is matched against the quantity ordered.

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

3-Way:


o

The invoice unit price is matched against the purchase order line unit price.o The quantity billed is matched against the quantity received.

4-Way:


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

o The quantity billed is matched against the quantity received.

o The quantity billed is matched against the quantity accepted.

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

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

To understand the three Match Approval Levels:

1. Select Switch Responsibility -> Oracle Payables, from the main menu.2. Select Invoices > Entry > Invoice Batches.3. Query your invoice batch. Select View > Find, from the top menu.

4. Click the Invoices button. In the Invoices window, enter an invoice.5. Set Type as PO Default. The PO Number window will appear. Enter your purchase ordernumber here. Click OK.


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6. Enter an invoice number and an invoice amount.7. Click the Match button. The Find Purchase Orders for Matching form opens, as -

The Find Purchase Orders for Matching Form

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

The Match to Purchase Orders Form

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

ap concepts part1 oracle 11

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