Payables Overview

Accounts Payable is the last stage of Supply Chain Management which is part of theProcurement process in any organization which is initiated by the Purchasing module.Purchasing is usually considered the first phase in supply chain cycle. Its major functionsare Sourcing, Requisitioning, Purchasing and Receiving. The procurement process beginswith Requisition. Suppliers or Vendors needs to be set up before a buyer can create aPurchase Order (P.O). Information entered for the supplier will become the default for allPurchase Orders entered for that supplier. Accounts and Purchasing modules share thesame supplier or vendor files.The goal of Supply Chain Management is to keep the stock level low but simultaneouslyensuring that sufficient stock should be made available against demand. The stock levelshould neither be too low or too high because stock sitting idle in a warehouse equates tomoney tied up unproductively. The purpose of Accounts Payable is to help manage theprocurement process by allowing process of high volume transactions and also keepingcontrol over cash flow.Procure to Pay LifecycleSourcing ->Ordering ->Reporting and AnalysisOracle Procure to Pay ProcessDemand ->Source ->Order -> Receive ->Invoice ->Pay

RFQs and QuotationsPurchasing provides you with request for quotation (RFQ), and quotation features to handleyour sourcing needs. You can create an RFQ from requisitions, match supplier quotations toyour RFQ, and automatically copy quotation information to purchase orders. Purchasing provides complete reporting to control your requests for quotations and evaluate supplier responses.Quotations can be: Entered manually Copied from an RFQ Imported using the Purchasing Documents Open Interface Imported using the e-Commerce GatewayWith Purchasing, you can: Identify requisitions that require supplier quotations and automatically create an RFQ.Create an RFQ with or without approved requisitions so that you can plan ahead for your future procurement requirements. Record supplier quotations from a catalog, telephone conversation, or response from your request for quotation. You can also receive quotations electronically.Review, analyze, and approve supplier quotations that you want available to reference on purchase orders and requisitions. You are also able to evaluate your suppliers based on quotation information.Receive automatic notification when a quotation or request for quotation approaches expiration.Review quotation information online when creating purchase orders or requisitions and copy specific quotation information to a purchase order or requisition.Source the items for which you negotiated purchase agreements automatically. If you created Sourcing Rules and Approved Supplier List entries for the items, supplier information can be entered automatically in the Requisitions window when you create requisitions. You can also place supplier information for items onto blanket purchase order releases.

Requisitions

Requisitions represent demand for goods or services. Whether you want to provide online requisitions to everyone in the organization or limit the number of users who have access to the system, Purchasing is flexible enough to meet the needs of your organization. With online requisitions, you can centralize your purchasing department, source your requisition with the best suppliers, and ensure that you obtain the appropriate management approval before creating purchase orders from requisitions.Requisitions for goods and services: Are generated by applications including Inventory, Work in Process (WIP), MaterialRequirements Planning (MRP) and Order Management May be entered manually through Purchasing windows May be entered using iProcurement May be imported from external systemsWith Purchasing, you can:Create, edit, and review requisition information on-line. Enter suggested supplier information, delivery instructions, multiple accounting distributions, and notes to buyers, approvers, and receivers. Review the current status and action history of your requisitions. Know who approves requisitions and whether they are in the approval, purchasing, receiving, or delivery stage.Route requisitions according to your approval structure. Set authorization limits by amount, charge account, item category, and location.Review and approve requisitions that need your approval. See the full requisition detail and review the action history before you approve a requisition.Print requisitions (with a status of Approved, Cancelled, Rejected, In Process, Pre- Approved, and Returned) for off-line review and approval. Track the status of requisitions through the approval process.Automatically source requisitions from outstanding blanket purchase agreements or quotations you have received from suppliers. Create requisitions quickly and easily for commonly purchased items. Provide attachments as notes on requisition headers and lines. Assign requisition lines to buyers and review buyer assignments for requisition lines. Forward all requisitions awaiting approval from one approver to an alternate approver.Within your security and approval constraints, you are also able to reroute requisitions from one approver to another whenever you want. Source goods from your own inventory with internal requisitions.There are different document types which are being used forprocurement. Thesedocuments are as under:Purchasing Agreement :Long Term supplier relationship usually involvedEntering into PurchasingAgreements.Theseagreements can be of two types :

Blanket Purchase Order (BPO)BPOspecifiesitemsandpriceswhicharenegotiated with the supplier. It usually applies for agiven period of time i.e. it has a committed amountfor a specific date range for specific goods andservices. It may also stipulate minimtam andmaximum units and order amounts.

Contract Purchase Order (CPO)CPO is an agreement between the company and thesupplier. It specifies only the terms and conditionsbut no items i.e. it has a committed amount for aspecified date range for unspecified goods andservices.

Purchase Order:A purchase order is a document which is issued tosupplier every time when a procurement is done and there is no Purchasing Agreement entered into between the organization and the supplier. Itrepresents the items required to be purchased, thepricing and the total amount.

Quotations

Quotations are documents between the organization and the supplier. Itrepresents the items required to be purchased, thepricing and the total amount.Quotations are documents forwarded by the suppliers totheorganizationgivingtheircompetitive pricing quotes for the items proposed tobe procured by the organization. It is a sales offerfrom the supplier which can be in form of a Catalogor a Tender Bid or a Standard document.

Request for Quotation ;Request for Quotation (RFQ) is used in Purchasing.It solicits quotes from the suppliers regardingprices, terms and conditions of items. Based on theRFQ, suppliers present their Quotations whichcontains all the details specified in RFQ and otherTerms and Conditions if any.

Requisition:Requisitionisusedinternallywithintheorganization. Requisitions are generated by variousdepartments in an organization who requires anyitems to be purchased. These Requisitions afterapproval from necessary approval authorities, willthen be forwarded to the Purchasing Department toprocure the items. Requisitions can be Internal andPurchase. Internal Requisitions are requests topurchase goods from an internal organization.These internal requisitions general internal salesorders automatically. Purchase Requisitions arerequests to purchase goods and services from anoutside supplier.There are different document types which are being used for procurement. These documents are as under:Purchasing Agreement :Long Term supplier relationship usually involvedEntering into PurchasingAgreements. These agreements can be of two types :

Blanket Purchase Order (BPO)BPOspecifiesitemsandpriceswhicharenegotiated with the supplier. It usually applies for agiven period of time i.e. it has a committed amountfor a specific date range for specific goods andservices. It may also stipulate minimtam andmaximum units and order amounts.

Contract Purchase Order (CPO)CPO is an agreement between the company and thesupplier. It specifies only the terms and conditionsbut no items i.e. it has a committed amount for aspecified date range for unspecified goods andservices.Purchase Order:A purchase order is a document which is issued tosupplier every time when a procurement is done and there is no Purchasing Agreement entered into between the organization and the supplier. Itrepresents the items required to be purchased, thepricing and the total amount.

After supplier received the Purchasing Agreement, it supplies the goods to the companywhich is also received by the Purchasing Module. Receiving is a function of acceptinggoods from the supplier and delivering them to its destination within the company i.e. theDepartment which has sent the Requisition. It usually involves checking the receipt ofgoods to make sure that the quality is satisfactory, quantity is correct. The supplier thenforwards an Invoice for payment against the goods supplier. Accounts Payable (AP)receives that Invoice and manually enters that in the AP module. This Invoice is thenmatched to the Original Purchase Order against which the good were supplied, forpayment terms of that invoice and other details. The Matching of Invoice to the PurchaseOrder can be done in different ways such as 2-way matching, 3-way matching, 4-waymatching etc.

Thus when an invoice is received from the supplier, it is first entered in AP and thenapproved. Once entered and approved it is now available for payment. Once the Paymentis made from, then from Accounts Payable point of view, the invoice is considered paidand the end of Payable cycle is reached. The Payment will eventually appear on thecompany bank statement after it is withdrawn from the bank account. At that stage itshould be reconciled within Oracle Cash Management. Reconciling the payment removesit from the list of payments issued but not yet cleared or paid. Cash Management createsposting from a cash clearing account to reconcile the payment.

Purchasing Payables Payables --->Cash Management(PO)(Invoices)(Payments)(Bank Statement)

As soon as a company agrees to purchase goods or services from a supplier it has anencumbrance whether the company choose to account for it or not. Encumbrance is theliability or payment which the company has to pay to the supplier at a later date uponreceipt of goods. Companies who are using Budget Accounting needs to passEncumbrance Accounting entries against any purchases. Encumbrance process reservesfunds for pajinent after ensuring that sufficient funds ai"e a\'ai]ab1e in the budget to placethe purchase order and make the payment when the goods are received.

As the goods or services are received, the encumbrance converts into a liability to pay theagreed price for the goods to the supplier. The liability remains on the Balance Sheet untilthe goods or services has been paid for. Payment terms will be agreed upon at thepurchasing stage and the supplier should quote these terms when sending the invoice forthe goods or services supplier. The Payment Terms can be 30 days Net etc. etc. Paymentcan be made by a Check or Bank to Bank Electronic Funds Transfer (EFT) and otherpayment methods. Once the Invoice is paid the liability in the Balance Sheet is Zero. Thetiming of liability can be recorded from the date the invoice is received, or the date thegoods are received whichever is beneficial to the company.Oracle Accounts Payable gets Purchase Order information from the Oracle PurchasingModule so that the company pay only for the goods ordered and received and do not paymore than the price quoted by the supplier. It shares receipt information with Purchasingso that the payment is made only for the items that are received and do not pay for thoseitems which are broken, faulty and substandard. It fully integrates with Oracle Assets in away that allows you to account for Fixed Assets purchases. It also integrates with OracleHuman Resources to ensure that employee expenses are paid efficiently and with OracleCash Management to enable you to reconcile your payments against bank statements.

AP Module 12 Release New Features

In Release 12, the Oracle E-Business Suite introduces Subledger Accounting, E-BusinessTax, Ledgers, Banks and other common data model components that are used by OraclePayables.

The following are new in Release 12:

Suppliers are defined as Parties within Oracle Trading Community Architecture.

Invoice Lines are introduced as an entity between the invoice header and invoicedistributions in order to better match the structure of invoice documents andimprove the flow of information like manufacturer, model, and serial number fromPurchasing through to Assets.

Banks, bank branches and internal bank accounts are defined centrally and managed in Oracle Cash Management.

Document sequencing of payments has moved to the Cash Management bankaccount uses setup

Payments, and all funds disbursement activities, are handled by a new module,Oracle Payments

Payment features controlled by Global Descriptive Flexfields (GDF) in priorreleases have been consolidated and migrated into the data models of OraclePayables, Oracle Payments and Oracle Cash Management. The architecture of thissolution moves attributes from the GDFs, which are obsolete in Release 12, toregular fields on the appropriate entity, including the invoice, payment format &document, supplier site, and bank account. Having a single code base as opposed toGDFs implemented per country simplifies global implementations and streamlinestransaction processing.

Oracle Subledger Accounting, a new module in Release 12, handles accountingdefinitions and all accounting setup associated with a Ledger. (In Release 12, OracleGeneral Ledger has replaced Sets of Books with Ledgers.) As part of this change,centralized accounting reports are available to all applications. Additionally, OraclePayables introduces a new Trial Balance report.

Oracle E-Business Tax, a new module, manages transaction tax setup associatedwith trading partners and tax authorities, as well as all transaction tax processingand reporting across the E-Business suite of applications. Part of the architecture ofthis solution moves tax attributes from Global Descriptive Flexfields (GDFs), whichare obsolete in Release 12, to regular fields on the appropriate entities.

A Responsibility can be associated with multiple Operating Units using MultiOrganizations Access Control. Due to this change, all processing and somereporting in Oracle Payables is available across Operating Units from a singleapplications responsibility. Hence you can isolate your transaction data byoperating unit for security and local level compliance while still enabling sharedservice center processing. Payables WorkbenchesPayables includes two fully integrated workbenches :_Invoice Workbench_Payment WorkbenchUsing these two workbenches you can perform most of the transactions. You can enter,adjust, and review invoices and invoice batches in the Invoice Workbench. You cancreate, adjust, and review payments and payment batches in the Payments workbench.Use the Invoice Overview and Payments Overview windows to review information fromtheir respective workbenches. Moreover, these windows acts as bridges between the twoworkbenches such as from theinvoice Overview window, we can navigate into Paymentswindow by checking the Payments button.Payables workbenches lets you find critical information in a flexible way. Ex: In theInvoice workbench, you can find an invoice based on supplier, purchase order, status orcriteria. Then for that Invoice, you can review distributions, scheduled payments,payments, holds, and other details invoice information. You can also perform matching,submit approval, apply and relese holds, or initiate payments. All the windows you need are accessible from just one form i.e. you can query an invoice then perform severaltransactions without having to find the invoice again. Moreover, in Payables, the InvoicesWindow, Distributions Window, Payments Window and Payment Batches Window eachhas an associated Actions Window you can use to perform available actions on one ormore records.Payables Workbenches

Payables includes two fiilly integrated workbenches :_Invoice Workbench_Payment Workbench

Using these two workbenches you can perform most of the transactions. You can enter,adjust, and review invoices and invoice batches in the Invoice Workbench. You cancreate, adjust, and review payments and payment batches in the Payments workbench.Use the Invoice Overview and Payments Overview windows to review information firomtheir respective workbenches. Moreover, these windows acts as bridges between the twoworkbenches such as from the hivoice Overview window, we can navigate into Paymentswindow by chcking the Payments button.Payables workbenches lets you find critical information in a flexible way. Ex: In theInvoice workbench, you can find an invoice based on supplier, purchase order, status orcriteria. Then for that Invoice, you can review distributions, scheduled payments,payments, holds, and other details invoice information. You can also perform matching, submit approval, apply and relese holds, or initiate payments. All the windows you needare accessible from just one form i.e. you can query an invoice then perform severaltransactions without having to find the invoice again. Moreover, in Payables, the InvoicesWindow, Distributions Window, Payments Window and Payment Batches Window eachhas an associated Actions Window you can use to perform available actions on one ormore records.Invoice WorkbenchInvoices are entered in Oracle Payables using the Invoice Workbench. Invoices can be :Standard

An invoice from a supplier representing an amount due for goods or services purchased.

Standard invoices can be either matched to a purchase order or not matched.

Credit Memo

A memo from a supplier representing a credit amount toward goods or services.

Debit Memo

An invoice you enter to record a credit for a supplier who does not send you a credit memo.

Mixed

An invoice type you enter for matching to both purchase orders and invoices. You can enter

either a positive or a negative amount for a Mixed invoice type.

Prepayment A type of invoice you enter to pay an advance payment for expenses to a supplier or employee.Expense Report

An invoice representing an amount due to an employee for business-related expenses.Withholding Tax

An invoice you enter to remit taxes withheld to the appropriate tax authority.

Interest

If you allow interest invoices, payables will automatically calculate interest for overdue

invoices and create interest invoices for selected suppliers.

Retainage Release

Invoices created for complex work and advance contract financing.

Transportation Invoices

Invoices from freight paymeThe following are the functions that are performed in the Invoice workbench :

Invoice BatchesoFind Invoice Batches

InvoicesoFind InvoicesCalculate Balance OwedoDistributionsFind Invoice DistributionsProrate (Tax, Freight and Miscellaneous)

Scheduled Payments

Invoice HoldsoRelease

Invoice ActionsoApply/Unapply Prepayments

Payments

Match to InvoiceoFind Invoices to MatchoMatch to Invoice Distribution

Match to POoFind Purchase Orders to MatchoMatch to PO DistributionoProrate (Tax, Freight, and Miscellaneous)

Invoice Overview

Payments WorkbenchUsing Payment workbench we can create, adjust, and review payments and paymentbatches. The following is the window hierarchy in the Payment Workbench ;

Payment BatchesoFind Payment BatchesoCopy TooPayment Batch ActionsModify Payment BatchConfirm Payment Batch

Payments

oFind PaymentsoSelect InvoicesoView InvoicesoPayment Actions

Payment Overview

Payables Set UpREQUIRED SETUP TASKSTable below shows the tasks required to set up the Payables applications. The tasks arelisted in the order they should be performed. Many tasks have predecessor tasks for datavalidation, so they should be performed in the proper order.

SETUPTASKNAMEREQUIRED

Install or Upgrade PayablesYes

Create user sign-onsYes

Define Chart ofAccountsYes

Define Period type and Accounting CalendarYes

Enable CurrenciesOptional

Define set ofbooks

Assign Set ofBooks to a Responsibility

Enter Conversion Rate Types and Rates

Define the transaction Fle:3field structure

Select primary set ofbooks

Define Payment TermsYes

Define Purchase Order Matching TolerancesOptional

Define Tax Authority type SuppliersConditionally

Define Tax Name and Tax Withholding GroupsOptional

Define Invoice Approval CodesYes

Define Distributions SetsOptional

Define Payables Quick codesYes

Define Payment Interest RatesOptional

Create Templates for Entering Expense ReportsOptional

Enter Employee Quick CodesOptional

Enter LocationsYes

Enter EmployeesYes

Define Reporting entitiesYes

Define1099 Income Tax RegionsYes

Define Inventory OrganizationsYes

Define Financials OptionsYes

Define Payables OptionsYes

Define Payment ProgramsYes

Define Payment FormatsOptional

Update Country and Territory InformationOptional

Define Bank AccountsYes

Open Accounting PeriodYes

Define Request SetsOptional

INVOICERELATEDSETUPS

PaymentTerms: (Navigation: Setup > Invoice > Payment Terms)

Youcandefineanunlimitednumberofpayments that you assigntoaninvoicetoautomaticallycreatescheduled payments. Youcan define payment termswithmorethanonepaymentline.EachPayment Line will createone scheduled paymentlines. We can also definemultiplelevelsofdiscountsinPaymentTerms.Eachpaymentterms line and each corresponding scheduledpayment has a due date or a discount date based on either a specific day of a month, suchas 20th of the month, or a number of days added to your terms date, such as 30 days afterthe terms date. Each payment terms line also defines the due or discount amount on ascheduledpayment. Whenyoudefinepaymentterms,youspecifypaymentamoimteitherbypercentagesorbyfixedamounts.DiscountcanbedefinedbyclickingonTabFirstDiscount,SecondDiscountandThirdDiscountforMultiplediscounts.After youdefine yourpayment terms, you canselectdefaultsystempaymenttermsthatPayables automatically assigns to the suppliers and supplier sites you enter. The paymentterms for a supplier site default to the invoices you enter for the site. Oracle provides apredefined payment term called Prepayment hnmediate that Payables automaticallyassigns to all prepayments you enter.

TIPS TO REMEMBER:If you update the payment terms on an invoice, payables recalculate the scheduledpayment for the invoice. You must reenter any manual adjustments you made to theprevious scheduled payment. For example, if you update the payment priority on aparticular scheduled payment and then change the payment terms. Payables recalculatethe scheduled payment using the same payment priority defaults as before, and you willneed to redo your updates.

Distribution Sets: (Navigation: Setup >Invoice>Distribution Sets)

You can use a Distribution Set toautomatically enter distributionsfor an invoice when you are notmatching it to a purchase order.For example, you can create foranadvertisingsupplieraDistribution Set that allocatesadvertising expense on an invoice to four advertising departments. You can assign adefault Distribution Set to a supplier site so Payables will use it for every invoice youenter for that supplier site. If you do not assign a default Distribution Set to a suppliersite, you can always assign a Distribution Set to an invoice when you enter it.

Use Full Distribution Sets to create distributions with set percentage amounts, or useSkeleton Distribution Sets to create distributions with no set distribution amounts. Forexample, a Full Distribution Set for a rent invoice assigns 70% of the invoice amount tothe Sales facility expense account and 30% to the Administration facility expenseaccount. A Skeleton Distribution Set for the same invoice would create one distributionfor the Sales facility expense account and one distribution for the Administration facilityexpense account, leaving the amounts zero. You could then enter amounts during invoiceentry depending on variables such as that month's headcount for each group.

{Distributions created by distribution sets are always exclusive of tax even ifyou useAutomatic Tax Calculation and you have checked the Includes Tax check box at thesupplier site)

Tolerances: (Navigation: Setup > Invoice > Tolerances)

Definethematchingand tax tolerances youwanttoallowforvariancesbetweeninvoice, purchase order,receipt,andtaxinformation. You candefine both percentage-basedandamount-based tolerances.

TolerancesdeterminewhetherPayablesplaces matching or taxholds on an invoice.When you submit Approval for an invoice you have matched to a purchase order orreceipt, Payables checks that the invoice matches the purchase order or receipt within thepurchase order matching tolerances you define. When you submit Approval for invoice with a tax amount. Payables checks that the actual invoice tax amount equals thecalculated tax amount within the tolerances you define. Payables displays next totolerance field the name of the Hold that Payables will apply to your invoice dunngApproval if the variance exceeds the tolerance you define.

Expense Report Templates(Navigation: Setup > Invoice > Expense Report)

UsetheExpenseReport Template window to definetemplates based on the expensereport forms you regularly usein your company. You candefinedefaultvaluesforexpense items, and you canthen choose those items from alist of values when you enterexpensereports.DuringPayablesInvoiceImport,Payables uses the expense iteminformation to create invoicedistributions.

Youdefineexpensereporttemplates for types of expense reports you use in your company. For example, define aSalesperson template to use when you enter expense reports for your salespeople. On thattemplate, define expense items that are reimbursable, such as meals, airfare, and hotel.However, you do not need to define a mileage expense item because your salespeoplehave car allowances.

PaymentRelatedSetUpsBanks: (Navigation: Setups > Payments > Banks)UsetheBankfor to input the details of thebank such as itslocation,addressandallotherHeaderinformation. Also identifywhether the institution is a Bank ora Clearing House.

ClickonBankAccountsandidentifywhetherthebankisInternal, CustomerorSupplier.Internalisusedfor payments by the company, Supplier is used to input details of the Suppliers bank forEFT transfer and Customer is used by Receivable Module. It is to be noted that the sameBank form is used for both Accounts Payable and Accounts Receivable. Thus if the Bankhas already been set up in Receivable Module then the Payable Options has to be defined.Define all the GL Account Combinations in GL Accounts Tab, Bank contact persons inAccount Contact, information about the ownership of account in Accoxint Holder,Receivable setup in Receivable Options & More Receivable Options and Payable Setupsin Payable Options.Next Click on PayableDocuments Tab and thePayable Documents beingused by the company andattach to each Payable Documentpredefine Payment format and Payment Methods. ClickonTabAdditionalInformation toprovideDocument Sequence Numbers for the payable documents, GL Account Tab to provideGLAccounting Information and Future Dated Payments information.

Click on Bank Codes to define the Bank Codes and Description being used by the Bankin their environment. Each Bank Code may have an activity assigned to it and forPayment Bank Codes, payment Methods to be used for that particular code.

PaymentPrograms(Navigation:Setup>Payments>Programs)

Use the Automatic Payment Programs window to define payment programs that you useto format payment documents and separate remittance advice. You specify whether eachprogram is for building payments, formatting payments, or creating a payment remittanceadvice. Payables predefines one program for building payments and many standardprograms for formatting payments. Payables also predefines a program for creating aseparate remittance advice for payments. You can select these predefined programs whenyou define a payment format, or you can use these programs as templates for creatingyour own custom payment programs.

Payment Formats(Navigation: Setup > Payments > Formats)

PaymentFormatsareusedtodefinePayment Documents in Bank window. Usethe Payment Formats window to define thepaymentformats.Youdefine paymentformats for the four payment methods thatPayables uses. You can define as manypayment formats as you require for eachpayment method; however, each paymentformat must be unique for that paymentmethod.To each Payment format youchoose a Build Payments program, a FormatPajTnentsprogramandoptionallyRemittance Advice Program.

You can define a separate payment formatfor each of your payment currencies. If youassign a currency to a payment format, youcan use that format only with a bank accountwhose bank account currency is the same as the format currency. If you use a payment format topay multiple currency invoices and do not assign a currency to the payment format, you can onlyuse that format with a bank account for which you also allow payment of multiple currencyinvoices. When you define a bank account, you can only allow payment of multiple currencyinvoices if the bank account currency is your fimctional currency.

You can also specify the number of invoices allowed per payment, the invoice grouping, theposition of the check stub (for payment formats using payment programs that produce a stub), andwhether the payment format can be used for multiple currencies and zero-amount payments only.

Interest Rates: (Navigation: Setup > Payment > Interest Rates) Define the Interest Rates which are to be used for calculating interest on overdueinvoices. Payable uses these rates to create interest invoices when a payment is being foran overdue invoice. In the Payment Interest Rates window, you define interest ratesPayables uses to calculate and pay interest on overdue invoices. Payables calculatesinterest on overdue invoices only if you enable both the Allow Interest Invoices Payablesoption, and the Allow Merest Invoices option for the supplier site of an invoice.

Bank Charges(Navigation: Setup > Payment > Bank Charges)

Use the Bank Charges window to specify charges associated with transferring moneybetween banks. If you use Payables you specify charges between your remittance banksand your suppliers' banks. If you use Receivables you specify charges between yourcustomers' banks and your banks. You can define charges:

ofrom a single bank to a single bank

ofrom a single bank to all banks (i.e., to all banks including the transferringbank)

ofrom a single bank to all other banks (i.e., to all banks except thetransferring bank)

ofrom all banks to a single bank

ofrom all banks to all banks

Any time you specify a single bank, you have the choice of selecting a particular branchof that bank or all branches. Payables and Receivables users use tliis window. If you useboth of these products, bank charges information you enter is shared between theproducts.

Other Set Ups

Creating A Set Of Books Change for R12

A set of books determines the functional currency, account structure, and accountingcalendar for each company or group of companies. If you need to report on your accountbalances in multiple currencies, you shotald set up one additional set of books for eachreporting currency. Your primary set of books should use your functional currency. Eachreporting set of books should use one of your reporting currencies.

If you choose to enable budgetary control, encumbrances will be created automaticallyfor your transactions in general Ledger, Oracle Purchasing and Oracle Payables.

Defining Chart Of Accounts:If you are using General Ledger, the chart of accounts is defined there. If not, you need todefine a chart of accounts.

Accounting Period Types And The Accounting Calendar:In General Ledger, the accounting period types and calendar are defined there. If not, youneed to define period types and accounting calendar.

CurrenciesIf you are not using General Ledger, you must enable the currencies that you plan to use.

Choosing A Set Of Books: (Navigation: Setup > Set of Books > Choose) Change for R12

In Payables, you must select a primarySetofBooks.Afterchoosing the primary set of books, ifneeded,usetheApplicationDeveloper responsibility to set theGL Set of Books ID profile option toupdateable. Then use the systemadministrator responsibility to set theGL Set of Books profile option. Fora single set of books installation, setthe options at application level forOracle Payables. For a multiple set of books installation, set the option for each uniquecombination of organization and responsibility. The responsibility you choose when youlog on detemiines the set of books you use.

Tax Authority Type SuppliersTo use automatic withholding tax, you need to define the Tax Authority type suppliersused by automatic withholdings tax.

Defining Tax Names And GroupsYou define the tax names you use on invoices to record invoice taxes you pay to yoursuppliers and to your tax authorities. Each tax name has a tax type, tax rate, and accountto which you charge tax amounts. If you assign tax names to expense or asset accovints,Payables automatically enters the appropriate tax name when you enter an account.During Approval, Payables uses the Tax Name to validate that tax distributions arecorrect.The withholding Tax type tax names can have multiple rates, effective date ranges, taxamounts limits, and taxable amount limits. You can also link a tax authority supplier to awithholding Tax type tax name so you create invoices to pay taxes you withheld fromyour suppliers.

To have Payables calculate the invoice sales tax and automatically create tax distributionswhen you enter a Sales type tax name during invoice entry, enable automatic taxcalculation. Payables uses the tax rate of the tax name to calculate the sales tax. Do notdefine special tax names for distributions that include tax. Simply check the Includes TaxDistribution Check box, when you enter the distribution, and payables adjusts thecalculation.

Defining Quickcodes For AP And Vendors(Navigation: Setup>Lookups>Payables)

Create and maintain QuickCodes for the following items:> A WT Certificate Type. Used to define withholding tax certificates.> A WT Rate Type. Used to define Withholding tax certificates.> FOB. Used as supplier default for all new purchase orders.> Freight Terms. Used as supplier default for all new purchase orders.> Minority Group. Used to classify suppliers for reporting. Pay Group. Used to initiate payment batches.> Disbursement Type. Used to define payment documents.> Don't Pay reason. Used to modify payment batches.> Source. Used to submit Payables Invoice Import and Payables Open InterfaceImport.> Tax Type. Used to define tax names.> Supplier Type. Used for supplier reporting.

Payables displays QuickCodes in the list of values for fields that require these codes. Youcan create as many QuickCodes for each item as you require. You can update thedescription and inactive date of a QuickCode at any time, but you cannot change the typeor name after you enter and save it.

Defining Employee Quickcodes(Navigation: Setup>Lookups>EmpIoyees)If you define your employees in Payables rather than Oracle human Resovirces, you canalso define Employee QuickCodes in Payables.

Defining Locations(Navigation: Employees > Locations)In Oracle Human Resources, you set up each physical site where your employees work asa separate location. You can also enter the addresses of extemal organization that youwant to maintain in your system. When you are setting up internal or extemalorganizations, you pick from a list of these locations. This approach enables you to enterinformation about each location only once, saving data entry time. It provides for centralmaintenance of locations to ensure consistency of address standards.

Defining EmployeesYou can enter, maintain, and view basic personal information and addresses foremployees. You can also enter work assignment information, which includesorganization, job, position, work location, and supervisor's name.

(You cannot use this form if Oracle Human Resources is fully installed at your site. Youmust use the HR Person form, which maintains a date-tracked history ofany changes youmake to employee records.)

Signing Limits(Navigation: Employees > Signing Limits)Enter the Managers name's who are authorize to approve AP Expenses Reports submittedby employees. Each Manager will be assigned upto what amount they can approve adocument and they are also assigned a Cost Centre Segment value.Tax Codes: (Navigation: Setup > Tax > Codes)

In the Tax Codes window,you define the tax names,or tax codes, you use oninvoices to record invoicetaxes you pay to suppliersand tax authorities. Eachtax code has a tax type, atax rate, and an account towhichyouchargetaxamounts.

Tax code can be defined inPayable Options Windowto define the hierarchy ofdefault or to expense orasset accounts.

If you use automatic tax calculation, Payables calculates the invoice sales tax andautomatically creates tax distributions. You do not need to define special tax codes fordistributions that include tax. Simply select the Includes Tax check box when you enterthe distribution, and Payables adjusts the calculation. During the Approval process,Payables uses the tax code to validate that you have entered tax distributions correctly.Offset taxes are negative-rate taxes. In the Tax Codes window you can associate Offeettaxes with Sales or User-defined taxes. When you use the Sales or User-defined tax on aninvoice, you record the tax, but the associated Offset tax reduces or eliminates your taxliability. To associate an Offset tax with a Sales or User-defined tax, first define theOffset tax. Then when you define the Sales or User-defined tax, enter the Offset tax codein the Offset Tax field in the Other Tab.

Withholding Tax type tax codes can have multiple rates, effective date ranges, taxamount limits, and taxable amount limits. You can also link a tax authority supplier to aWithholding Tax type tax code so you can create invoices to pay taxes you withheld fromyour suppliers.Defining Reporting Entities(Navigation: Setup > Tax > Reporting Entities)

A reporting entity is any person or organization that has a Tax Identification Number(TIN). You can submit the following 1099 reports for a specific reporting entity.1096 Form1099 Forms1099 Invoice Exceptions Report1099 Supplier Exceptions Report1099 Payments Report1099 Tape.

For each reporting entity, you need to assign one or more balancing segment values.Payables sums up the paid invoice distributions that have these company balancingsegment values their accoimts.