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1 of 139Oracle Payables
R12: Oracle Financials
The Changing Face ofOracle Accounts Payable in Release 12
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–Invoicing for Service Procurement Complex Terms
–Suppliers Represented in TCA
–New or Improved Workflows
—Line Level and Invoice Level Approval
—Approver entry of unmatched accounting and project information
—Holds Notifications and streamlined resolution
—Invoice Lines and Enhanced Asset Tracking
–Reporting at Operating Unit Level
–New Banking Model
–Enhanced Payment Processing
–MOAC-Multi-Org Access Control
–Multiple Accounting Representations
–AP/AR Netting
R12 Payables – New Features•New Features in Oracle Payables
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R12 Suppliers
• In R12, Suppliers join the Trading Community Architecture –Organization Details, Addresses, and Contacts = TCA
–Supplier Terms and Controls = Supplier and Supplier Site
–New AP Tables – Backward Compatible Views
R12 Suppliers & TCA Concepts
• Organization Party • Person Party• Location (Physical Location)• Party Site (Party’s Address)• Relationship Party – Contact• Relationships between Parties
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R12 Suppliers: New Tables & Views
• New Payables Tables:–AP_SUPPLIERS
–AP_SUPPLIER_SITES_ALL
–AP_SUPPLIER_CONTACTS
–AP_SUPPLIER_INT_REJECTIONS
• New Views:–PO_VENDORS
–PO_VENDOR_SITES_ALL
–PO_VENDOR_CONTACTS
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R12 Suppliers & TCA: Supplier
TCA
Migrating Suppliers to TCA
Suppliers (AP_SUPPLIERS)
Supplier Information
Supplier Profile
Organization Profiles (HZ_ORGANIZATION_PROFILES)
Parties (HZ_PARTIES)
The Party Relationships is populated to transfer the Supplier Hierarchy information. Currently this information isrepresented using the parent_vendor_id column.
After we populated the TCA tables the AP_SUPPLIERS is updated with the PARTY_ID information.
Party Usages (HZ_PARTY_USAGE_ASSIGNMENTS)
(Supplier Usage)
Party Relationships(HZ_RELATIONSHIPS)
(Parent Vendor)
Parentof
PO
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S.P
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R12 Suppliers & TCA: Trading Partner Information
TCA Party Information Sample
Consolidated Supplies
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AP
PS
. PO
_VE
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OR
_SIT
ES
_AL
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PP
S. P
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R12 Suppliers & TCA: Supplier LocationMigrating Supplier Sites to TCA
AP_SUPPLIER_SITES_ALL
Address
OU
Profile
TCA
Location Profile(HZ_LOCATION_PROFILES)
Site Uses
Location(HZ_LOCATIONS)
UniqueAddresses
Party Sites(HZ_PARTY_SITES)
Combination of
Party, Location &
Duns Number
Party Sites Uses(HZ_PARTY_SITE_USES)
Unique Set of
Site UsesAcrossOUs
Note: All address elements are used in the grouping logic to determine unique addresses.
Address Line1 should be populated, otherwise AP will populate the Site Code for the address line1. We will document this as a part of theUpgrade documentation.
Country is a required field and AP will insert a valid value If one is available at the supplier site. In the absence of that, we will get the country from Default Country profile option or from the country of the OU of the supplier site. Upgrade documentation will have a recommendation for the same.
Upgrade will also stamp the Location ID and Party Site ID in ap_supplier_sites_all table.
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R12 Suppliers & TCA: Trading Partner’s Site Address Location
TCA Party Site Sample
Consolidated Supplies 4480 Morning
Star, Dallas, TX
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AP
PS
. PO
_VE
ND
OR
_CO
NT
AC
TS
AP
PS
. PO
_VE
ND
OR
_CO
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AC
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R12 Suppliers & TCA: Trading Partner ContactsContacts Data Migration Flow
AP_SUPPLIER_CONTACTS
Person
Mail Stop
Department
Contact Points
TCA
HZ_PARTIES(Person Party)
HZ_PARTIES(Relationship Party)
HZ_RELATIONSHIPS(Contact Of)
Contact Of/Contact
Person @Org
HZ_PARTY_SITES(Contact’s Mail Stop within ORG’s Location for Relationship Party)
HZ_ORG_CONTACTS(Contact’s Department Info in the context of Relationship and Org Party Site
ID)
HZ_CONTACT_POINTS(eMail, Phone, Fax, URL, Alt Phone migrated in the context of Relationship
Party)
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R12 Suppliers & TCA: Trading Partner Contacts
Consolidated Supplies
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R12 Suppliers & TCA: Supplier Sites
Terms and Controls between “You” and your Supplier
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R12 Payables – Payables Invoice Approval• Line Level and Invoice Level Approval
–Matched Invoice Production Rule – allows users to configure whether they would like invoices to go through approval if matched to a Purchase Order
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R12 Payables – Unmatched Invoice Approval
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R12 Payables – Unmatched Invoice Approval
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R12 Payables – Unmatched Invoice Approval
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R12 Payables: Payables Holds Resolution
–Streamlined Holds Resolution process
–Any Manually Releasable Hold
–Workflow enabled
–Negotiation collaboration with suppliers for the following holds:
–Price
–Quantity Ordered
–Quantity Received
–Amount Ordered
–Amount Received
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R12 Payables: Payables Holds Resolution – Holds
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R12 Payables: Payables Holds Resolution Approvals Management
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Invoice Lines and Enhanced Asset Tracking
• Item Description
•Manufacturer
•Serial Number
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Reporting at the Operating Unit Level
Operating Unit
New Reports / New Reporting Options
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• Bank account is associated with Legal Entity rather than Operating Unit
• Single bank account serves multiple Operating Units
• Any and all Operating Units associated with a ledger can be permitted to use the bank accountPlusCentralised Credit Card Model
Credit Card EncryptionSupplier & Customer Banks
Centralised Banking and PaymentsFunds Disbursements and Capture
LE
OU A OU B OU C
ProjectProjectss
ProjectProjectss
ReceivableReceivabless
ReceivableReceivabless
PayablePayabless
PayablePayabless
InventoInventoryry
InventoInventoryry
Work in Work in ProcessProcessWork in Work in ProcessProcess
PurchasinPurchasingg
PurchasinPurchasingg
AssetAssetss
AssetAssetss
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Bank Model: Example of what you can doPay invoices from different OUs with 1 instruction
OU A
OU B
OU CBank
Single Payment
Instruction
Invoices
Payments
Sub Ledger Sub Ledger AccountingAccountingSub Ledger Sub Ledger AccountingAccounting
• New Payments Module• New Bank Model
• New Bank & Credit Card Features
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OU A
OU B
OU CBank
Single Payment
Instruction
Invoices
Payments
Example: Shared Service Disbursement
1. Setup accounting policies
2. Select invoices from multiple OUs3. Format for bank and
disbursement countries
4. Send single instruction to bank5. Generate separate payments for
each OU
Centralised Centralised AccountingAccountingCentralised Centralised AccountingAccounting
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BanksDefine Owner of Bank Account
Legal Entity
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BanksGrant OU Access to Bank Account
Operating Units
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Multiple Organisation Access ControlSummary of Changes
• Security Profiles for data security– MO: Security Profile– List of operating units for a responsibility– Defined in HR
• OU field on UI– all transactions– setup data specific to OU, like transaction type
• Enhanced Multi-Org Reporting and Processing– Ledger/Ledger Set parameter on accounting reports and processes– OU parameter on other standard reports and processes– For example: submit the Payables Open Interface Import to import all records across
all OUs
Classify Organization as operating
unit
Select Operating Unit classification
Multi-Org Access ControlSetup –Define Security Profile
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Reporting at the Operating Unit Level
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MOAC - Typical Screen in Daily Use
Select OUs
Select OUs
US GAAPUS GAAPUS COAUS COAUS US CalendarCalendar
EUREUR
Ledger ALedger A
French RulesFrench RulesPlan Plan ComptableComptableFrench French CalendarCalendar
EUREUR
Ledger BLedger B
CentralisCentralised ed
AccountiAccountingng
CentralisCentralised ed
AccountiAccountingng
Single business transactionSingle business transactioncan create multiplecan create multiple
accounting representationsaccounting representationsand in multiple currenciesand in multiple currencies
Single business transactionSingle business transactioncan create multiplecan create multiple
accounting representationsaccounting representationsand in multiple currenciesand in multiple currencies
DrDr CrCr
Payables InvoicePayables InvoicePayables InvoicePayables Invoice
Multiple Accounting RepresentationsParallel Financial Reporting
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R12 Other: AP/AR-Netting
• Establish and Maintain Netting Agreements
- Business Rules
- Trading Partner
• Run Automated Netting Process• Request Trading Partner Approval• Inquiry and Reporting
- Proposed Netting Report
- Final Netting Report
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R12 Other: AP/AR-Netting
Enter Netting Parameters
Netting Batch: Net_ABC
Netting Agreement: ABC
Settlement Date: 30-Jul-06
Transaction Due date: 20-Jul-06
Find and order AP and AR Transactions (Order Rule: Amount Descending)
AP Transactions
Inv Amount Due Date AP01 200 10-Jul-06
AP03 100 20-Jul-06
AP02 50 15-Jul-06
AR Transactions
Inv Amount Due Date
AR01 100 8-Jul-06
AR02 50 10-Jul-06
AR03 50 12-Jul-06
Compare AP and AR Balances
AP Balance = 350, AR Balance = 200
So the Netting Amount = 200
Transactions Selected For Netting
AP Transactions
Inv Amount Due Date AP01 200 10-Jul-06
AR Transactions
Inv Amount Due Date
AR01 100 8-Jul-06
AR02 50 10-Jul-06
AP03 50 12-Jul-06
Example:
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Payables Setup Steps
• Choosing a Ledger• Defining Financial Options• Defining Payables System Setup• Defining Payable Options• Defining Payment Terms• Control Payables Periods
Setup Steps need to complete in Payables
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Choose your Operating Unit
Number of future periods you can maintain in the Control Payables Periods window
Payments that are withheld until work under a contract is completed and accepted
•The Operating Unit popup window will allow you to select the Operating Unit which is tied to your
Ledger and Business Group
Choosing a Ledger
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The options you define in Supplier-Purchasing region, except for Inventory Organization, are used as default values for the Purchasing region of the Suppliers window
Purchasing creates journal entries and transfers them to GL to encumber funds for purchase requisitions
Payables will encumber funds for it during Payables Invoice Validation
requisition preparers to have the option to reserve funds
Defining Financials Options
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The options you enter in this region control VAT registration for tax purposes
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Payables System Setup window to define supplier control options and defaults
Payables uses as the payment terms start date when Payables calculates the due and discount dates for invoice scheduled payments.
Select the date that Payables uses to select invoices for payment
Select the terms that Payables uses to schedule payments for an invoice
Payables System Setup
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Defining Payables Options
Payables to automatically create balancing accounting entries for your invoice and payment transactions
Payables to use for distributing the discounts you take when making payments
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Payables to use as the default accounting date for invoices during invoice entry
Allow users to update the distributions of a paid invoice
Allow users to select Invoice Validation from the Invoice Actions
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Payables subtracts the tax amount from the invoice amount when it calculates the discountable amount for a scheduled payment
create payments with a payment date before the system date
allow users to deduct bank charges from payment
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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
Payables uses ranks to choose the most favorable payment terms from invoice and purchase order
allow users to deduct bank charges from payment
Defining payment terms
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The period statuses available in Payables are Never Opened, Future, Open, Closed, and Permanently Closed
Control Payables Periods
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Suppliers
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How Oracle Products Use Supplier Information
Payables
Purchasing
Assets
Property Manager
iSupplier Portal
MOAC
Trading Community Architecture
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Flow of Default Values
Procurement Flow Payables Flow
Financials options
Purchasing/Receiving /Payables/Payables System Setup options
Supplier
Scheduled payment line
Item
PO DocumentsDistribution
line
12
1 Takes precedence over 2
Supplier site
Invoice Lines
Invoice
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• Search: You can find suppliers by using the Search region of the Suppliers page.
• Quick Update: You can use Quick Update for routine maintenance of supplier information.
• Organisation:
Parent Supplier Name & Number–Customer Numbe–Supplier Type, Taxpayer ID/Tax Registration Number
• Tax Details:̶* Rounding Rule̶* Set Invoice Values as Tax Inclusive ̶* Allow Withholding Tax̶* Withholding Tax Group̶* Tax Registrations
•Address Book and Contact Directory
Suppliers Page
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• Business Classification: Classification, Minority Type
• Suppliers Products and Services: Manufacturing, Financial
• Supplier Banking Details: Name, Number, Primary, Currency, Start/End Dates
• Suppliers – Surveys: Create custom questionnaires that can be used to gather feedback from suppliers' surveys
• Supplier – Accounting: Supplier accounting values default to all new supplier sites you enter for the supplier. Supplier site accounting values default to all new invoices for the supplier site. You can override any accounting defaults during supplier site entry and invoice entry. • Supplier – Tax and Reporting: Allow Tax Applicability, Set for Self
Assessment/Reverse Change, Allow Offset Taxes, Tax Classification Code & Income Tax Reporting Site.
• Supplier – Purchasing: All New Orders, Ship-To Location, Bill-To Location, Ship via, FOB…
• Supplier – Receiving: Enforce Ship-To Location, Receipt Routing, Match Approval Level, Quantity Received Exception…
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•Record information about individuals and companies from whom you purchase goods and services, and also to record information about employees whom you reimburse for expense reports
•Define supplier addresses in your address book
Defining supplier
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•You can click on continue on address book window and define sites for this, you can create sites for use when processing transactions with your suppliers
•click on manage site for update of site details
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Merging Suppliers
Run supplier audit report
ABC Corp
ABC Corporation
Review merge results ABC Corporation
Merge suppliers
Identify duplicate suppliers
Maintain audit trail
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Merging Suppliers
• After you have merged suppliers, Payables automatically prints the following reports:
–Purchase Order Header Updates Report–Supplier Merge Report
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Financials Options
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Profile Options
PO: Secondary E-mail Address
PO: In File Path
PO: Terms and Conditions File Name
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Invoices
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Overview of Invoices
Enter supplierImport/Enterinvoice Validate invoice
Create accountingentries in Subledger
Accounting
Pay invoice
Create PO
Enter requisition
Match to PO
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Invoice Types
–Standard
–Credit Memo
–Debit Memo
–Mixed
–Prepayment
–Expense Report
–Withholding Tax
–Interest
–Retainage Release
–Transportation Invoices
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Creating Invoices Manually
• You can manually enter invoices into Payables using:–Invoice Workbench –Quick Invoices window
Creating Invoices Automatically
• Your system can create the following types of invoices:–Recurring Invoices–RTS Invoices –Retroactive Price Adjustment Invoices
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Assigning a Default GL Date
DistributionGL date
GL Date Basis Payables Option
Invoice date,system date, orinvoice received
date
Defaults to
Determines default
Invoice GLdate
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Invoice Workbench
Invoices Window
–Invoice Header
–General
–Lines
–Holds
–View Payments
–Scheduled Payments
–View Prepayment Applications
Other Features
–Actions
–Calculate Tax
–Tax Details
–Corrections
–Quick Match
–Match
–Distributions
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Invoice Workbench
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Match Approval Level Options
2-Way
3-Way
4-Way
PO Line Price
Quantity Ordered
Quantity Received
Quantity Accepted
Quantity Billed
Unit Price
Quantity Billed
Quantity Billed
Invoice PO
Entering Purchase Order and Receipt Matched Invoices
• Match invoices to:–Purchase order–Purchase order shipments–Purchase order distributions –Purchase order receipts and receipt lines
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Final Matching
• During matching, select the Final Match option to indicate that no more invoices should be matched to the purchase order.
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Price Correction Example
5 units @ $10/Unit
5 Units @ $12/Unit
Invoice
IPV = $10
Qty Billed = 5
PO
5 units @ $-2/Unit
5 Units @ $-2/Unit
Credit Memo PO
IPV = -$10Total Qty Billed = 0
Total QTY Billed = 5
Total IPV = 0
Match
Match & Price
Correct
1
2
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Quick Invoices
• Use the Quick Invoices window to enter a large volume of invoices that do not require extensive online validation or extensive online defaulting of values.
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Recurring Invoices• You can enter invoices for periodic expenses for which you may not receive invoices,
such as rent. • To enter recurring invoices:
–Define a special calendar–Define a recurring invoice template–Create invoices based on the template
•Use the Special Calendar window to define periods that Payables uses for automatic recurring invoices
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You can use a Distribution Set to automatically enter distributions for an invoice when you are not matching it to a purchase order
•Use Full Distribution Sets to create distributions with set percentage amounts•Use Skeleton Distribution Sets to create distributions with no set distribution amounts
Entering Recurring Invoice
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Self Service Invoices
Supplier enters invoice in
iSupplier Portal
Invoice Request Account payables department approves
request
Without PO
Invoice
PayablesLaunches Workflow
With PO
Payables User enters invoice in Invoice Actions
page
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Payment Requests
Receivables
Loans
Payment RequestAccount payables
department approves request
submits
If requires approval, PayablesLaunches Workflow
Payables applies holds, if necessary
Pay
No approval required
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Invoice Validation Process
Enter or import invoices
Validate invoice
Optionally match to PO or
receipt
View invoice
Pay invoice
Receive invoices electronically or
in the mail
Createsubledger accounting
100,000
AP
60,00010,00030,000
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Overview of Entering Batches
Batch invoices
Enter a batch of invoices
Prepare a batch control
form
Review batch control reports
Update the batch control form
Receive invoices
File invoice
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Approval
• The Invoice Approval Workflow Program can be submitted before or after validation, unless the Require Validation Before Approval Payables option is enabled.
Invoice Approval Levels
• You can define the approval rules in Oracle Approvals Management in one of the
following ways:–Line-level rules only
–Document-level rules only
–Line-level and document-level rules
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Invoice Approval Workflow
• The Invoice Approval Workflow automates your invoice approval process. Based on rules you define, the workflow determines if an invoice needs approval, who the approvers are, and in what order approvers should approve payment of the invoice.
System Setup• You can set up your system to request and receive approval through the
approver’s e–mail, through the approver’s Oracle Workflow Notifications Workflow web page, or both.
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Apply Holds to Invoices
User Manually Hold Types Predefined Definable Releasable
Acct Hold Reason No
Funds Hold Reason Sometimes
Insufficient Information No
Invoice Hold Reason Yes
Matching Hold Reason Sometimes
Period Hold Type No
PO Req Hold Reason No
Variance Hold Reason Sometimes
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Apply Holds to Scheduled Payments
Invoice
Hold Due Date Gross Amount
04-APR-2007 900
04-MAY-2007 100
$1000.00
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Setup Options
–Payables System Setup Options–Payables Options–Purchasing Options–Profile Options
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Payables System Setup Options
Payables System Setup window to define supplier control options and defaults
Payables uses as the payment terms start date when Payables calculates the due and discount dates for invoice scheduled payments.
Select the date that Payables uses to select invoices for payment
Select the terms that Payables uses to schedule payments for an invoice
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Payables Options
• Payables to use as the default accounting date for invoices during invoice entry
Allow users to update the distributions of a paid invoice
Allow users to select Invoice Validation from the Invoice Actions
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Payables Options (Continued)
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Profile Options
PO: ERS Aging Period
PO: ERS Invoice Number Prefix
AP: Use Invoice Batch Controls
AP: Notification Recipient e-Mail
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Defining Interest Rates
•Enable the Allow Interest Invoices Payables option
In the Payment Interest Rates window, you define interest rates Payables uses to calculate and pay interest on overdue invoices. You can add or change a rate at any time
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Defining Aging Periods
Aging Report provides information about invoice payments due during four periods you specify
• Enter the Name and Description of the type of aging periods you are defining• Enter First and Second lines you want them to appear on your report• Aging Report uses only the four lowest numbered periods
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Key Indicators Report
Use Key Indicators Report to review Payables transaction activity, and review the current number of suppliers, invoices, payments and matching holds in your Payables system:
Prerequisites•Define key indicator calendars
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Expense Reports and Credit Cards
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Expense Reporting Process
Employee creates expense report Manager approves
report
Accounts Payables department approves report
Approved: Creates payment; notifies employee
Rejected: Workflow notifies employee
Adjusted: Creates payment; notifies
employee
Internet ExpensesPayables
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Expense Report Templates
• You use the Expense Report Template window to define templates based on the expense report forms you regularly use in your enterprise.
• Expense reports use E-Business Tax to automatically calculate the applicable taxes during Expense Report Export.
• Foreign currency expense reports are subject to the same system requirements as foreign currency invoices.
• You can only apply advances (prepayments) that have the same currency as the expense report.
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Procurement Card Process
Load AP_EXPENSE_FEED_LINE
S_ALL
Validate and Verify Procurement Card
Transactions
Send for Management Approval
Approved: Create invoices; ready for validation and payment
Rejected: Workflow notifies employee
Adjusted: Create invoices;
ready for validation and payment
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Setting Up Procurement Cards and Credit Cards
• Set up credit card programs to manage your enterprise’s credit card and procurement card requirements.
–Travel = Employees who enter credit card transactions on expense reports. –Procurement = Employees who use procurement cards to purchase items
directly from suppliers.
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• Card program window to define your credit card programs for each card issuer.
• You use the Code Sets window to define sets of credit card codes for your procurement cards.
Setup Steps
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• You use the GL Account Sets window to create a list of values of GL accounts that your employees can use to correct account information for their procurement card transactions.
• You assign a credit card profile to each card that you assign to a card holder.
• You use the Credit Cards window to define the credit cards distributed to your employees. Enter an employee name and credit card number, and assign a card profile.
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Transaction Taxes in Payables
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Overview of Transaction Taxes in Payables
• Payables leverages E-Business tax to setup, calculate, and manage transaction taxes such as:
–Sales–VAT–Excise–Customs Duty–Environmental–Offset–Recoverable Tax
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Overview of Tax Calculation on Invoices
Enter Invoice
E-Business Tax
Validate InvoiceClick
Calculate Tax
Change Tax Driver
View Tax Lines and
Distributions
Calculates Tax
Calculates Tax
Recalculate Taxes
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Entering Manual Tax Lines
• To enter manual tax lines, enable the following options for the configuration owner or event class:
–Allow Entry of Manual Tax Lines–Allow Manual Tax Only Lines (optional)
• To manually enter tax details for Item, Freight, Miscellaneous, or Prepayment lines, complete the following fields:
–Tax regime–Tax–Tax status–Tax rate–Tax amount–Place of supply (supplier site)
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Updating Tax Lines
• To update tax lines, enable the following options for the configuration owner or event class:
–Allow Entry of Manual Tax Lines–Allow Recalculation for Manual Tax Lines–Tax Line Override Impacts Other Tax Lines
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Self-Assessed Taxes
• Enable the following option in the Party Tax Profile:–Set for Self Assessment/Reverse Charge option
• You can enable this option at the following levels:–Regime–Regime, Tax–Regime, Tax, Tax Jurisdiction
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Set Tax Registration Details:
Check to mark associated tax on all supplier invoices as
Self Assessed.
Set Up – First Party, Party Tax Profile (eBTax)
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Supplier’s Tax is $0 and the amount due to the Supplier is $1,000.00
Self Assessed Tax Amount
Process – Calculate Tax
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Considerations for Taxes on Prepayments
• To calculate taxes on Prepayment Invoices, enable the following option for the Prepayment event class:
– Allow Tax Applicability• Tax calculation is affected by how the Applied Amount Handling option is set up.
You can set this option as:–Recalculated–Prorate
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Tax Tolerances and Tax-Related Holds
• To define tax tolerances: –Enable the Allow Override for Calculated Tax Lines option for the configuration
owner or event class• Tax Tolerances define the limits of user override• If an invoice exceeds the Tax Tolerances, then a Tax-Related Hold is applied during
Invoice Validation
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Offset Taxes
• Existing Oracle Payables implementations that use Offset Taxes can setup and manage Offset Taxes in E-Business Tax.
–Ensure that the Set as Offset Tax option is enabled for the tax.• For new taxes and new implementations, use E-Business Tax’s Self Assessed tax
feature instead.
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Suppliers Subject to Income Tax Reporting
• To define a supplier as subject to income tax reporting requirements:–Enter a Taxpayer ID–Enable the Federal option and select an Income Tax Type (1099 MISC
Type).–Enable the State option, if applicable–Enable the Allow Withholding Tax option
• If you enter a purchase order for a 1099 supplier, then Oracle Purchasing retains the Income Tax Type information at the purchase order line level.
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Financials Options
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Payables Options: Payment
Payables subtracts the tax amount from the invoice amount when it calculates the discountable amount for a scheduled payment
create payments with a payment date before the system date
allow users to deduct bank charges from payment
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Withholding Tax
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Withholding Tax Overview
• You may be required to withhold taxes from your employee expense reports and supplier invoices.
• Once you set up Payables to automatically withhold tax, you can withhold tax either during Invoice Validation or during payment processing.
• You can control all withholding tax options in the Withholding Tax region of the Payables Options window.
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Withholding Tax Payables OptionsUse Withholding Tax
• Select the Use Withholding Tax option to enable Automatic Withholding Tax.• If you enable this option, you have the option to allow your suppliers and supplier
sites to be subject to withholding tax.
Defining Special Calendar
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Defining Tax Codes & Groups
• When you define a withholding tax code, you indicate first whether you will have any amount or rate controls by selecting one of the following rate structures:
–Period Limit–Flat Rate–Amount Ranges
• You use Tax Groups window to define withholding tax groups that include multiple Withholding Tax type tax codes. You can assign the same tax code to more than one group.
• When you assign a withholding tax group to an invoice or distribution, Payables calculates invoice withholding tax based on every tax code in the withholding tax group.
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Withholding Tax Payables Options
Select this option to enable Automatic
Withholding Tax
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Withholding Tax Certificates and Exceptions
• You use the Withholding Tax Certificates and Exceptions window to define Withholding Tax type tax code rate exceptions for a supplier site.
• You enable withholding taxes for a supplier and supplier sites in the Tax Details region of the Suppliers page.
• Select Allow Withholding Tax option if you want to enable withholding for a supplier or supplier site, and select a default Withholding Tax Group that Payables will default to all invoices you enter for the supplier or supplier site.
Withholding Taxes for Suppliers
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Withholding Tax Reports
• Payables provides the following income tax forms and reports:
Withholding Tax By Invoice Report
Withholding Tax By Payment Report
Withholding Tax By Tax Authority Report
Withholding Tax By Supplier Report
Withholding Tax Certificate Listing
Withholding Tax Letter
Withholding Tax Report
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Withholding Tax Certificate Listing
• You use the Withholding Tax Certificate Listing to review withholding tax certificates for a supplier or all suppliers.
Withholding Tax Letter
• You use this report to create a withholding tax letter to mail to your suppliers on a periodic basis. This letter contains a list of withholdings made for a supplier, summarized either by tax type and tax rate or by supplier site.
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Withholding Tax Report
• You use this report to create a withholding tax report for your company’s internal reporting needs. This report contains a list of withholdings made on behalf of your suppliers, summarized either by tax type and tax rate or by supplier site, and grouped by supplier.
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1099 Reporting
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Entering Invoices for Suppliers Subject to Income Tax Reporting Requirements
• If you set up a supplier as federally reportable and assign a default income tax type to the supplier, then that value defaults down to each invoice distribution you enter for that supplier.
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Suppliers Subject to Income Tax Reporting Requirements
• To define a supplier as subject to income tax reporting requirements:–Enter a Taxpayer ID–Enable the Federal option and select an Income Tax Type (1099 MISC
Type).–Enable the State option, if applicable–Enable the Allow Withholding Tax option
• If you enter a purchase order for a 1099 supplier, then Oracle Purchasing retains the Income Tax Type information at the purchase order line level.
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Updating 1099 Information
• You can update 1099 information for your suppliers. If you paid a supplier before you set up the supplier as a 1099 supplier, run the Update Income Tax Details Utility.
• Or, if you need to update only a few invoices, you can update the 1099 types in the Lines tab
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Recording a Refund From a One–Time 1099 Supplier
• If you get a refund from a one–time 1099 supplier, you need to record the refund in Payables so that the 1099 reports are accurate.
• Enter a credit memo that you match to the original invoice.
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1099 Reporting
1096 Form
1099 Forms
1099 Invoice Exceptions Report
1099 Payments Report
1099 Electronic Media
1099 Supplier Exceptions Report
Tax Information Verification Letter
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Payables Options: Tax Reporting
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Advances and Progressive Contract Financing
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Advances and Contract Financing
Purchase Order/Contract
for Services: $1,000,000
Supplier requests
prepayment: $50,000
Additional approvals ?
Payables: Prepayment Invoice Entered
iSupplier Portal: Invoice Request is approved; Prepayment Invoice created
Invoice is validated; Payment Issued
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Progress Payments
Billed RetainedAdvance/
RecoupmentApproved
Advance
Resurface Lot
Road Work
Landscape
Final Painting
50,000
200,000 200,000 <20,000> <50,000>
500,000 500,000 <50,000>
250,000 250,000 <25,000>
50,000 50,000 < 5,000>
1,000,000 1,000,000 <100,000> 0
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Entering Advances and Contract Financing Invoices
• An advance prepayment invoice is not matched for an advance, since an advance is paid once before any work commences and is not based on performance.
• A contract financing prepayment invoice is matched to pay items (shipments).
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Work Confirmation
• A work confirmation confirms that work was delivered by a certain supplier at a specific price on a specific date as specified by a specific work confirmation number, which is associated with a purchase order number.
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Taxes for Complex Service Contract Invoices
Invoice Type Invoice Purpose Tax Calculation Based On
Prepayments Advance Invoice Amount, based on Tax Rules for Advances
Contract Financing(Progress Payment)
Invoice Amount, based on Tax Rules for Contract Financing
Standard Progress Payment Invoice Amount, Net of Retainage
Final Delivery Invoice Amount
Retainage Release Release Retained Amounts
Retained Amount, based on Tax Drivers on Original Invoice
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Retainage Amount for Complex Service Contracts
• Retainage is the act of withholding a portion of a payment until a substantial portion or all of the work is completed.
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Recouping Advances and Contract Financing Payments
• Recoupment is the automatic process of recovering prepaid amounts when invoicing for progress or for the final delivery of goods or services, based on specific terms specified in the services procurement contract.
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Thank You