Enter Invoice. Invoice. No Holds. Approve Invoice. Pay Invoice. Reconcile Payments

Transcription

1 Chapter 5 Payables

2 Overview Oracle Payables is a high-productivity accounting solution that provides strong financial control, so you can prevent duplicate payments, pay for only the goods and services you order and receive, and maximize supplier discounts. Oracle Payables is part of Oracle Applications, an integrated suite of business solutions designed to support continuous process improvement for enterprises competing in time-critical markets. Enter Supplier Match to PO Enter Invoice Purchase Order Create PO Invoice No Holds Approve Invoice Create Journal Entries Requisition Enter Requisition Pay Invoice Reconcile Payments Oracle Payables Proactive Supplier Relations Oracle Payables helps resolve business issues quickly by providing immediate and accurate responses to supplier inquiries. Record detailed information about your suppliers, including their purchasing, payment, and invoice processing preferences. Automated Invoice Approvals Oracle Payables supports two-, three-, and four-way matching of purchase orders, invoices, receipts, and requestor acceptance documents. All the information you need to authorize payments is on-line, eliminating the paper flow of purchase orders, invoices, receipts, and requestor documents. Approve invoices on-line during invoice entry or in batch. 2 Oracle Financials Functional Overview

3 Effective Payment Controls Oracle Payables provides the information you need to make effective payment decisions. Stay in control of payments to suppliers and employees, and keep your accounting records up-to-date so you always know your cash position. Oracle Payables handles every form of payment, including automatic checks, manual payments, wire transfers, bank drafts, and electronic funds transfers. Oracle Payables integrates with Oracle Cash Management to support automatic or manual reconciliation of your payments with your bank statements. Cash Requirements Management Oracle Payables saves you money by forecasting your cash requirements and preventing duplicate and unauthorized payments. Analytical reports, as well as system, supplier, invoice, and payment batch options help you determine whether to take available discounts. Oracle Payables 3

4 Key Features Multiple System Options Customize to meet your needs: Accounting Flexfields Descriptive Flexfields Customize your payment calendar Choose from a variety of system options, including: Invoice batching Discount accounting Tax options Apply advances Require purchase order matching Automatic Withholding Sequential Numbering Suppliers Quickly enter suppliers with AutoEntry Record multiple addresses, bank accounts and contacts for each supplier Set up tax reporting and withholding Set limits for invoice amounts Access current balances on-line Hold payment to selected suppliers Automatically format addresses based on supplier s country Invoices Use Invoice Workbench to design custom views of data for each user or workgroup Record sales, use, and VAT with complete tax reporting Quickly enter invoices with AutoEntry Apply prepayments to invoices and expense reports Match credits to originating invoices Automatically generate recurring invoices Automatically check for duplicate invoices Import and validate invoices with Invoice Import Adjust distributions as needed Cancel invoices on demand Set payment terms: Proxima Split Multiple discounts Perform on-line inquiries Purchase Order Matching Perform two-, three-, and four-way purchase order matching Pay on receipt or advance shipment notice Use QuickMatch to automatically create invoice accounting Automatically record price, quantity, and exchange rate variances Set quantity and price tolerances Expenses Percentage-based Value-based Process employee expense reports on-line or over the Web Route expense reports with Oracle Workflow Verify receipts and audit expense reports entered in Oracle Web Employees Payments Use Payment Workbench to design custom views of data for each user or workgroup Choose from a variety of payment methods, including: Electronic payments Checks Wire transfers Bills of Exchange Clearing payments Create a fully EDI compliant outbound payment data file Choose from multiple payment formats including several laser printer compatible formats Create separate checks for selected invoices Stop and void payments Produce single checks on-line Payment Controls Set payment controls by: Pay group Payment priority Payment method Create partial payments 4 Oracle Financials Functional Overview

5 Place holds on payments: By vendor By invoice User-defined holds Reconcile payments Automatically Manually Prevent check fraud with Positive Pay Multicurrency Accounting Enter transactions in any currency Automatically perform currency conversions Record gains and losses Accounting Controls Specify multiple open and future periods Specify separate closing status Choose from several accounting methods, including: Accrual basis Cash basis Combined basis Post to general ledger anytime Define intercompany payables Perform Encumbrance accounting Set Budgetary Controls Purge invoices, purchase orders, purchase requisitions, & suppliers from your database Self-Service Access Supplier inquiries on the Web Employee inquires on the Web Oracle Payables 5

6 Suppliers Oracle Payables provides a variety of flexible and powerful tools for efficient and easy supplier processing. With Oracle Payables, you record complete and accurate supplier information. Business Needs With Oracle Payables you can: Enter supplier information, including payment control features and names and phone numbers of key contacts Use your own supplier numbering system or let Oracle Payables automatically number suppliers for you Maintain supplier history, keeping a record of supplier sites and other details Define additional accounting information to facilitate data entry Let selected users review supplier information without being able to make updates Review your outstanding balance with a supplier, based on a variety of invoice criteria Control supplier payments by defining supplier holds, including a matching required option and an invoice amount limit Define a new supplier while entering an invoice Control duplicate supplier entry and merge any duplicate suppliers and sites with the correct supplier and site Major Features AutoEntry Oracle Payables provides many defaults that you can set up and default to each new supplier you enter. Oracle Payables then uses these supplier values as the default for each new supplier site you enter. Of course, you can always choose to override these defaults. When you enter an invoice for a supplier site, Oracle Payables uses the supplier site's default for the invoice. You can override the default for each invoice as well. Unlimited Supplier Sites and Contacts Oracle Payables lets you record an unlimited number of supplier addresses and contacts. For example, you can buy from and send payments to more than one location for a single supplier and you can keep supplier address and contact history to help you with research. Validation of Tax Registration Number and Taxpayer ID Oracle Payables provides country specific validation of supplier tax registration identification numbers and Taxpayer ID to protect against data entry errors. 6 Oracle Financials Functional Overview

7 Enter as many supplier sites as you require for each supplier Supplier Tokyo San Francisco Paris Purchasing Site RFQ Only Site Purchasing Site Pay Site Pay Site Contacts Contacts Contacts Define an unlimited number of supplier sites and contacts Invoice Amount Limit Define the maximum invoice amount you allow for a supplier. Oracle Payables automatically places a payment hold on invoices entered for this supplier which exceed this amount. Oracle Payables 7

8 Payment Controls Oracle Payables provides the power to control supplier payments. Use a Pay Group or a Payment Priority to choose a select group of suppliers for payment. Select the matching required option for a supplier or supplier site to place a hold on any invoices for a supplier or supplier site that are not matched to a purchase order. Place a hold on a supplier or supplier site if you do not want Oracle Payables to pay any invoices for this supplier or site. Supplier Hierarchy Oracle Payables lets you enter the parent company of a supplier to record a relationship between a parent company and its franchises or subsidiaries. Supplier Inquiry You can review supplier information without being able to change any data. Provide separate access for personnel who do not have supplier update privileges. Oracle Payables gives you maximum control of your supplier data. Supplier Balance On-line View the current unpaid balance for any supplier or supplier site on-line. Oracle Payables displays the total number and amount of outstanding invoices for the supplier or supplier site you choose. Reconcile any difference with your suppliers by reviewing the specific invoices underlying the balance. Oracle Payables displays the balance based on a variety of criteria including approval status, invoice date range, currency, or discount taken. Concurrent Supplier Entry Define a new supplier while you are entering an invoice. Without interrupting invoice entry, you can enter a new supplier and return to invoice entry to complete your data input. SupplierMerge Oracle Payables helps prevent the entry of duplicate suppliers. However, if duplicates exist or one company merges with another, you can merge them into a single supplier or supplier site. Oracle Payables automatically updates the associated purchase orders and invoices for the suppliers so they all refer to the correct supplier. Oracle Payables automatically generates merge reports so you can review the suppliers, sites, invoices, and purchase orders affected by the merge. 8 Oracle Financials Functional Overview

9 1099 Reporting (U.S. Requirement) Oracle Payables provides the tools to meet your 1099 reporting needs. Create and update 1099 supplier payment information and report your accumulated 1099 payment information to your suppliers, the Internal Revenue Service, and other tax authorities. Set up 1099 Reporting Enter 1099 Details for Suppliers Enter and Pay 1099 Invoices Submit 1099 Reports 1096 Forms 1099 Forms 1099 Payments 1099 Tape Identify and Resolve 1099 Exceptions 1099 Supplier Exceptions Report 1099 Invoice Exceptions Report Oracle Payables provides complete 1099 reporting Business Needs With Oracle Payables you can: Maintain 1099 information for 1099 suppliers to comply with all Internal Revenue Service reporting requirements Participate in the Combined Filing Program Automatically produce letters for suppliers who have not provided a Tax Identification Number Identify and fix 1099 supplier and invoice reporting exceptions Oracle Payables 9

10 Major Features 1099 Suppliers Oracle Payables enables you to comply with all Internal Revenue Service reporting requirements for 1099 suppliers. Define a supplier as federal reportable and record its 1099 type. Oracle Payables assigns the income tax type to each invoice for that supplier. Record a supplier's tax region if you participate in the Combined Filing Program. Payments to 1099 suppliers are accumulated and reported by type. Combined Filing System Option Oracle Payables allows you to produce combined federal and state 1099 records. If you enable the Combined Filing system option, Oracle Payables produces K records for all tax regions (or states) participating in the Combined Filing Program that have qualifying payments. Oracle Payables also produces a B record for each supplier to summarize qualifying payments made to a supplier for a particular tax region. When you submit your 1099 Tape, the Internal Revenue Service (IRS) forwards these records to the appropriate tax authority for each tax region Reporting Oracle Payables provides you with supplier, government, and user reports, so that you can comply with all Internal Revenue Service reporting requirements for 1099 suppliers. Tax Information Verification Submit a Tax Information Verification letter for your 1099 suppliers requesting that they submit any missing 1099 information and that they verify previously-submitted 1099 information that you have recorded in Oracle Payables. Review and Update 1099 Supplier and Invoice Details Oracle Payables provides several reports which can help you identify incomplete or inaccurate 1099 suppliers and invoices. With Oracle Payables, quickly and easily update your 1099 suppliers and invoices. Submit the Update Income Tax Details Utility to automatically update invoices missing an income tax type or an income tax region. 10 Oracle Financials Functional Overview

11 Audit of Suppliers and Invoices Oracle Payables provides the tools you need to ensure maximum control over your suppliers and invoices. Use Oracle Payables auditing tools with other Oracle Payables controls to maintain the integrity of supplier and invoice data. Business Needs With Oracle Payables you can: Identify possible duplicate suppliers Combine suppliers the way you want Identify possible duplicate invoices and payments Resolve duplicate invoices Major Features Supplier and Invoice Audit Reports Oracle Payables provides audit reports of possible duplicate suppliers and invoices. Use these reports to maintain the integrity of your suppliers and invoices. Invoice Audit Listings Oracle Payables provides complete invoice listings, sorted the way you want. Oracle Payables makes it easy for you to review invoices. SupplierMerge Use SupplierMerge to automatically transfer invoices and purchase orders from a supplier and site to another supplier and site, or to a different site of the original supplier. Oracle Payables provides you with audit reports of your SupplierMerge activity. Oracle Payables 11

12 Invoices Oracle Payables provides the high-productivity tools you need to process invoices efficiently, and puts you in complete control of your invoice payments. With Oracle Payables, you can spend less time entering invoices and more time managing your cash position. Business Needs With Oracle Payables you can: Define invoice entry defaults which simplify and speed invoice processing Enter invoices in batches Control payment and posting of invoices with payment terms and hold reasons you define Automatically prorate tax, freight, and miscellaneous expenses across selected invoice distribution lines Create one or more invoice notes which you can send internally or to suppliers Attach images, sound, text, and video to invoices; for example, you can scan an invoice and automatically attach it to the related invoice Enter foreign currency invoices Adjust an invoice, even after payment and posting Automatically record voucher numbers on each invoice Apply prepayments to invoices during invoice entry Match invoices to purchase orders View additional purchase order information and purchase order notes while entering an invoice Record invoice price and exchange rate variances between an invoice and its matched purchase order Match debit and credit invoices to their originating invoice Designate an invoice as requiring its own payment document Enter employee expense reports quickly and easily Automatically create invoices and payments for recurring expenses Automatically create invoices based on purchase order information and receipt transactions Automatically create invoices based on advance shipment and billing notice information 12 Oracle Financials Functional Overview

13 Major Features Invoice Types Oracle Payables supports your different invoice types, including Standard, Credit Memo, Debit Memo, and Expense Report. Enter all types of invoices using the powerful Invoice Workbench AutoEntry Oracle Payables allows you to define financials, system, and supplier site defaults which speed invoice entry. With AutoEntry, you can enter just a supplier name, invoice number and amount to completely process an invoice since Oracle Payables automatically enters the remaining fields using supplier site and system defaults. Invoice Batches Use invoice batch controls to proactively manage invoice entry. Enter invoice values at the batch level which automatically default to all invoices in the batch. You can override these defaults. Oracle Payables 13

14 Mail Group a Batch of Invoices Complete a Batch Control Form File by Batch Enter Batch of Invoices Update Batch Control Window Review Batch Control Reports Use invoice batches to control invoice entry Invoice Notes Define standard notes to send to your suppliers to inform them of actions you take which affect invoice payment. Use invoice notes internally as well. Distribution Sets Distribution Sets enable you to automatically create invoice distribution lines during invoice entry. A Distribution Set is a set of predefined accounting distribution lines which you can optionally assign to a supplier or supplier site. Automatic Voucher Numbers Oracle Payables automatically assigns a unique, sequential voucher to each invoice you enter when you enable the Automatic Voucher Numbers profile option. Review each voucher number on-line or in a report. Apply Prepayments During invoice entry, Oracle Payables notifies you if there are outstanding prepayments for a supplier. Oracle Payables allows you to apply an approved and paid prepayment to an invoice during invoice entry. Credit Matching Easily match a credit or debit invoice to its original invoice. If you matched the original invoice to a purchase order shipment, match the credit or debit invoice to the purchase order shipment and Oracle Payables automatically updates the quantity invoiced and the amount on the purchase order shipment. 14 Oracle Financials Functional Overview

15 Price Corrections Enter price correction invoices that you receive from suppliers, and easily match them to the original invoices. If you matched the original invoice to a purchase order shipment, match the price correction to the same purchase order shipment and Oracle Payables automatically updates the unit price on the purchase order shipment to reflect the price correction. Tax Distribution Lines Enter sales, use, and offset tax names and tax amounts for invoices. For a sales type tax name, Oracle Payables automatically creates a tax invoice distribution line, using the tax name Accounting Flexfield that you define. Alternatively, you can prorate your tax expense across selected invoice distribution lines. Use offset taxes for suppliers in the European Economic Community (EEC). Prorate Prorate tax, freight, and miscellaneous expenses across selected invoice distribution lines. Payment on Receipt Oracle Payables automatically creates standard invoices for payment of goods either based on receipt transactions or advance shipping and billing notices. An invoice which Oracle Payables creates based on a receipt transaction, uses a combination of the receipt and purchase order information to create the invoice. An invoice which Oracle Payables creates based on an advance shipping and billing notice, uses a combination of the notice and the purchase order information to create the invoice. You have the option to choose to create invoices either at the time you receive your ordered goods or when you receive an Advance Shipment and Billing Notice from your trading partner. You can define which suppliers participate in Payment on Receipt. Invoice Approval Oracle Payables prevents posting and payment of an invoice until you approve the invoice. Approve an invoice on-line during invoice entry or approve invoices in batch using Approval. Approval Codes Hold payment and posting of invoices with approval codes that Oracle Payables predefines as well as approval codes and tolerances you define. Apply an unlimited number of holds to an invoice to prevent payment and/or posting. Oracle Payables records your hold reasons and provides authorized users the ability to release holds. Pay Alone Designate an invoice as Pay Alone to have Oracle Payables pay the invoice on its own payment document rather than combining it with other due invoices for the same supplier site. Invoice Adjustments Make adjustments to an invoice, even if you have paid or posted the invoice. If you have not paid the invoice, you can cancel the invoice. Oracle Payables 15

16 Expense Report Templates Define expense report templates with selected expense items for your employee expense reports. Use to create default accounting information for expense items. Apply Employee Advances to Expense Reports Enter employee advances and later apply them to expense reports. Oracle Payables notifies you if there are outstanding advances for an employee when you enter an expense report. You can specify if you want Oracle Payables to apply all outstanding advances, one specific advance, or a certain maximum amount of advances to an expense report. Invoice Import Import invoices from other accounting systems with Invoice Import. Recurring Invoices If you have regular payments, such as rent, that you make to a supplier who does not provide an invoice, define a recurring invoice to automatically create invoices and payments. If necessary, you can associate a purchase order with a recurring invoice. Invoice Reporting Review on-line all the invoice information you need to respond to supplier and internal inquiries. You can calculate a supplier's outstanding balance and review all components of an invoice, including holds and payment information. 16 Oracle Financials Functional Overview

17 Prepayments Oracle Payables provides the high-productivity tools you need to process prepayments efficiently and gives you complete control over the application of prepayments to invoices. Enter a prepayment if a supplier requires payment before sending you an invoice. For example, a supplier may require a deposit, or an employee may request an advance. Before you send a supplier or employee a check, record that payment in Oracle Payables. When the supplier later sends you an invoice, you want to ensure that you apply the prepayment already sent so that you do not overpay your supplier. Enter Prepayment Approve Prepayment Pay Prepayment Select Prepayment and Apply to One or More Invoices Select Invoice and Apply One or More Prepayments Against It Oracle Payables makes it easy to enter and apply prepayments Business Needs With Oracle Payables you can: Enter prepayments and advances in any currency Associate a prepayment with a purchase order and apply the prepayment only to invoices matched to the associated purchase order Specify a date before which you cannot apply a specific prepayment or advance Record and manage tax information for a prepayment Designate a prepayment or advance as requiring its own payment Review prepayments or advances for a supplier or an employee on-line Oracle Payables 17

18 Apply or unapply a prepayment or advance to any approved invoice or expense report Notify a supplier of the prepayments you applied to an invoice Major Features Multi-Currency Enter a prepayment in any currency you choose. Oracle Payables automatically calculates realized gains and losses due to fluctuations in your foreign currencies. Purchase Order Association When you enter a prepayment, you can associate a purchase order with the prepayment. If you do so, Oracle Payables allows you to apply the prepayment only to invoices matched to the associated purchase order. Tax Name and Calculation Optionally enter sales or use tax names and tax amounts for prepayments. For a sales type tax name, Oracle Payables automatically creates a tax distribution line. Pay Alone Designate a prepayment as Pay Alone to have Oracle Payables pay the prepayment on its own payment rather than combining it with other invoices for the same supplier site. On-line Review and Application Review on-line all the outstanding prepayments and advances for a supplier or employee. Apply a prepayment, part of a prepayment, or multiple prepayments to an invoice or expense report. 18 Oracle Financials Functional Overview

19 Select a prepayment and apply it to one or more invoices Prepayment Remittance Print a letter, addressed to a supplier, which details all the information about a prepayment that you applied to an invoice. Oracle Payables 19

20 Recurring Invoices Oracle Payables provides a variety of recurring invoice capabilities to enable you to pay periodic business expenses for which you do not receive invoices. Oracle Payables provides online access to your recurring invoice information, so you always know what your authorized recurring invoice amount is, and how much you have spent against it. Business Needs With Oracle Payables you can: Make recurring invoices at intervals you specify Define the item and tax expense distributions you want to use for each invoice you create Define recurring invoices which increase or decrease by a fixed percentage from period to period Authorize a fixed amount and enter an expiration date for a recurring invoice Associate a purchase order with a recurring invoice Handle special payments like a deposit or balloon payment Generate recurring invoices in foreign currencies Create recurring invoices in open or future accounting periods Oracle Payables lets you define recurring invoices at intervals you specify 20 Oracle Financials Functional Overview

21 Major Features Invoice Creation Oracle Payables creates invoices automatically from your recurring invoice. Create invoices all at once or one at a time, even if they are in a future accounting period. Recurring Invoice Periods Define recurring invoice periods of any length and type you want: months, quarters, or other period types. Special Payments Specify special payments to handle non-standard payment amounts such as deposits or balloon payments as part of your recurring invoice. Define your recurring invoices to increase or decrease by a fixed percentage from period to period over the duration of the recurring invoice. Invoice Distributions You can define a Distribution Set for Oracle Payables to use when it creates a recurring invoice. Choose an existing 100% Distribution Set or define a new Distribution Set to use with your recurring invoice. Instead, you may choose to associate a purchase order with your recurring invoice. Purchasing Integration You can associate a purchase order with a recurring invoice. Oracle Payables uses accounting information from the purchase order when creating the invoice distribution lines for the recurring invoice. Instead, you may choose to associate a Distribution Set with your recurring invoice. Tax Name and Calculation Optionally enter sales or use tax names and tax amounts for prepayments. For a sales type tax name, Oracle Payables automatically creates a tax distribution line. Oracle Payables 21

22 Automatic Interest Invoices Oracle Payables provides the features you need to automatically pay interest on overdue invoices. You no longer have to calculate payment due dates and interest charges on past due invoices because Oracle Payables does it for you. Business Needs With Oracle Payables you can: Calculate interest charges on overdue invoices at payment time based upon due date and payment date Review your interest payments on-line and report on them Print your check and remittance advice document separately Major Features Automatic Interest Payments Oracle Payables automatically calculates interest amounts on overdue invoices when you pay them. Flexible Interest Rates Oracle Payables calculates interest amounts based on interest rates you provide. Oracle Payables lets you define interest rates and effective date ranges so you can automatically pay interest on overdue invoices. Reports and Inquiries Use inquiries in Oracle Payables to review how much interest you paid to a supplier. Query all invoices or just interest invoices for a supplier. Review all interest invoices you paid with a particular check. Oracle Payables also provides you with listings of how much interest you paid on an invoice and the associated interest rate. 22 Oracle Financials Functional Overview

23 Taxes Oracle Payables provides the functions you need to easily record, review, and report on the taxes you pay to your suppliers. Business Needs With Oracle Payables you can: Define the tax names and rates you use in your organization Record tax charges on invoices to distinguish between the tax portion of your invoices and the portion representing the goods and services you purchased Automatically create invoice distributions for tax charges Prorate your tax charges across one or all invoice distribution lines Enter multiple taxes for an invoice Distinguish between sales tax and use tax charges Automatically calculate a tax amount for a tax name you enter on an invoice Verify that the tax amount for an invoice is correct according to the tax rates you define and within the tolerances you define Use offsetting taxes to record zero-rate taxes on which you need to report Automatically withhold taxes for your supplier invoices and employee expense reports Major Features User-Defined Tax Names Define as many tax names or tax authorities as you require. For each tax name you define, you enter a tax type, tax rate, and default tax expense account number. Invoice Distribution Line Types Oracle Payables provides four types of invoice distribution lines: Item, Tax, Freight, and Miscellaneous. All item, freight, and miscellaneous distribution lines can be taxable. Automatic Tax Distribution Lines When you enter a default tax name for an invoice and the tax name has a sales or user-defined tax type, Oracle Payables automatically creates a tax distribution line to record the tax charge. Oracle Payables 23

24 Invoice Tax Reporting Oracle Payables provides standard reports for reporting on your invoice taxes. These reports include a tax audit trail report, a use tax liability report, the Intra-EU VAT Audit Trail Report, and a listing of your defined tax names. VAT Taxes You can define an unlimited number of VAT (Value Added Tax) taxes. You define VAT taxes in the same method as any other sales tax. You can assign a VAT tax as a supplier site default. You can easily enter invoices with VAT taxes and Oracle Payables provides complete VAT reporting. Tax Type Tax Name Tax Rate Define Tax Names Define EEC Suppliers and Assign Tax Name to Supplier Site Enter VAT Charges for Invoices Review VAT Charges Tax Declaration Report Intra EC VAT Audit Trail Oracle Payables makes it easy for you to define and record taxes Gross Method Taxation When you enable the Automatic Tax Calculation system option and you enter a tax name for the invoice that has a sales or user-defined tax type, you can manually enter the tax amount or you can have Oracle Payables automatically calculate the tax amount. Tax Exceptions Oracle Payables automatic invoice approval (Approval) automatically performs tax variance checking and places tax exception holds on any invoice with a tax amount that does not match the calculated invoice tax amount(s) as determined by the tax rates you define for the tax names 24 Oracle Financials Functional Overview

25 on your invoice. You can define percentage and amount tolerances to determine the amount of tax variance you allow on your invoices. Expense Report Tax Items You can easily record tax charges on your employee expense reports. Automatic Tax Withholding You can automatically withhold taxes for your supplier invoices and employee expense reports. You have flexibility in defining your withholding tax rate structures using effective date and taxable amount ranges, and single invoice limits or period limits. Using withholding tax groups, you can withhold multiple taxes for an invoice or expense report. Tax Inclusive or Exclusive Item Amounts You can specify whether supplier invoice items or employee expense report items include tax in their pricing. Oracle Payables performs the appropriate tax calculations, based on the item. Flexible Tax Rounding You can control how Oracle Payables rounds tax calculations to meet varying country requirements. Choose the rounding rule Up, Down or Nearest as a system default and optionally change this default at the supplier or supplier site. Oracle Payables 25

26 Fixed Assets Integration Mass Additions lets you add assets and cost adjustments to assets directly into Oracle Assets from invoices in your Oracle Payables system. The Mass Additions Create process sends valid invoice distribution lines from Oracle Payables to an interface table in Oracle Assets. After sending the invoice lines, you can review them and determine whether to create assets from any of the lines in Oracle Assets. Business Needs With Oracle Payables and Oracle Assets you can: Add items from Oracle Payables directly into Oracle Assets Minimize data entry Manipulate invoice lines before they become assets in Oracle Assets Transfer discount taken information on asset purchases 26 Oracle Financials Functional Overview

27 Purchasing Integration Oracle Payables fully integrates with Oracle Purchasing and other purchasing systems. This allows you to access your purchasing information on-line and automatically match invoices to purchase orders using two-, three-, or four-way matching. Business Needs With Oracle Payables you can: Share supplier information with your purchasing department, so that you do not have to enter the same data twice Require matching for selected suppliers to ensure their invoices are matched to purchase orders Match invoices to purchase orders and automatically hold those invoices that exceed your matching tolerance, whether you use Oracle Purchasing or another purchasing system Define amount-based and percentage-based matching tolerances Record a price, quantity, or exchange rate variance between an invoice and its matched purchase order Match an invoice at the purchase order shipment line level or the distribution line level Review purchase order details and purchase order notes when matching an invoice Assign a match as final and have Oracle Payables permanently close the matched purchase order Associate a purchase order with a recurring invoice Major Features Matching to Purchase Orders Oracle Payables allows you to match the invoices you enter to the purchase orders (and related receipts) in your purchasing system. Oracle Payables supports the level of matching (2-way, 3- way, and 4-way) that your organization requires for matching invoices to purchase orders and receipts. Oracle Payables 27

28 Match an invoice to one or more purchase orders Purchase Order 2 Bikes@ $ ea. Receipt Required Inspection Required Supplier Invoice To Receiving Receipt Invoice Bikes Quantity 2 Price $ To Inspection Quantity Accepted 4-Way Match Purchase Order Bikes Quantity 2 Price $ Receiving Bikes Quantity 2 Accepted Bikes Quantity 2 Use 2, 3, or 4-way matching for optimal control over your purchases 28 Oracle Financials Functional Overview

29 Approval An Oracle Payables process you initiate to automatically perform two-, three-, and four-way matching for unapproved invoices. Approval places an invoice on matching hold when the purchase order and invoice information do not match within the tolerances you define. Manual Matching Hold Release You can manually release an invoice that has a matching hold to pay the invoice. Oracle Payables 29

30 Invoice Approval Oracle Payables provides a wide variety of powerful, easy-to-use features to approve invoices. Oracle Payables is fully integrated with Oracle General Ledger, Oracle Purchasing and Oracle Alert to provide a complete solution for your invoice approval needs. Business Needs With Oracle Payables you can: Create your own approval cycle based on your organization's invoice approval process Approve invoices in batch, on-line, or both Prevent payment and posting of invoices that do not meet your invoice approval criteria Access invoice hold and release information on-line Notify accounts payable supervisors and purchasing agents automatically when an invoice fails approval for a specific reason Selectively approve invoices for posting and payment after reviewing the original reasons for failing approval Report on approved invoices, invoices on hold, and invoices released from hold Major Features Approval Approval validates your invoice information and places holds on invoices that do not meet approval criteria. For example, Approval automatically places a hold on an invoice when a supplier overcharges you or bills you for items you have not received, ordered or accepted. Approval also validates invoices for tax, currency, accounting, matching, and other invoice exceptions. Approval in Batch and On-line Submit Approval on-line for an invoice during invoice entry or approve invoices in batch. When you approve an invoice on-line, you can immediately review any invoice holds Approval creates due to matching exceptions, incomplete information, or data entry errors. Daily Approval Resubmission Oracle Payables helps you automate your approval cycle through automatic Approval resubmission. You can enter invoice selection criteria for Approval, then specify the time you want to automatically initiate Approval each day. 30 Oracle Financials Functional Overview

31 Invoice Holds Oracle Payables lets you define your own holds, based on your invoice approval needs. You can define your holds to only prevent payment of an invoice or you can prevent both payment and posting of an invoice. You can apply an unlimited number of invoice holds to an invoice during invoice entry. Oracle Payables records your hold reasons and allows authorized users to manually release invoice holds from invoices. Supplier Controls Define a supplier or supplier site control that causes Oracle Payables to place a hold on all invoices you enter for the supplier site from the time you enable the control. Define an invoice amount limit for a supplier site so that Oracle Payables places a hold on invoices for the supplier site that exceed the amount you specify. Exception Reporting Oracle Alert provides an integrated system of alerts, messages, and message distributions to focus attention on time-sensitive or critical information and streamline the approval process. Exception reporting in Oracle Alert is accomplished using either electronic mail or paper reports. Invoice Adjustments Authorized users can always correct an invoice, even if the invoice is approved, paid or posted. Approval also creates the necessary adjusting journal entries to keep your accounting records accurate and complete. Oracle Payables 31

32 QuickRelease Oracle Payables lets you manually remove all holds that you place on an invoice and most holds that Approval places on an invoice. For those holds that you cannot manually release, you must correct the invoice and resubmit Approval to remove the hold(s). Easily release one or more holds from selected invoices Invoice Inquiry Oracle Payables provides on-line access to all the invoice information you need. Review supplier balance and invoice detail information, including hold, distribution, payment, and currency information. 32 Oracle Financials Functional Overview

33 Invoice Import Oracle Payables integrates with Oracle Projects and other accounting systems by allowing you to import expense reports and invoices so that you can pay them using Oracle Payables. Use Invoice Import to create invoices from expense reports you enter in Oracle Payables, Oracle Projects or Oracle Web Employees. Business Needs With Oracle Payables you can: Import and pay invoices from other accounting systems Create invoices in Oracle Payables to pay expense reports you entered in Oracle Payables, Oracle Projects or Oracle Web Employees Report on the invoices created as well as any exceptions for the imported expense reports and invoices Major Features Invoice Import An Oracle Payables process you initiate to automatically create invoices from expense reports or invoices from other accounting systems. Invoice Import verifies all your expense report and invoice information to ensure it creates valid, fully-distributed invoices, ready for approval and payment. If the expense report or invoice information fails validation, Invoice Import does not create an invoice from the information and reports the exception so that you can easily fix the problem. Integration with Oracle Projects and Oracle Web Employees Oracle Payables fully integrates with Oracle Projects and Oracle Web Employees so that you can easily create and pay invoices for expense reports entered in these applications. Invoice Import Reporting Oracle Payables automatically produces the Invoice Import Report and the Invoice Import Exceptions Report when you submit Invoice Import. Use these reports to review the invoices that Invoice Import successfully created from your expense report and invoice information and to identify the expense reports and invoices that Invoice Import was unable to import. Oracle Payables 33

34 Payments Oracle Payables provides a variety of features for fast, controlled payment processing. Business Needs With Oracle Payables you can: Disburse funds using multiple payment methods, including computer-generated checks, electronic payments, recorded checks, and wire transfers Ensure that duplicate invoice payments never occur Pay only those invoices which are due and automatically take the maximum discount available Select invoices using a wide variety of criteria and create payments automatically Ensure that you always take the better of the invoice payment terms or the purchase order payment terms when you match an invoice to a purchase order Modify the payment amount or discount taken on a particular invoice before creating the payment Create payment documents in any format you want Reduce expenses by distributing payment discounts you take to the proper accounts Pay an invoice on its own separate payment document If your printer jams, restart your check printing where the printer left off Print a check on-line Laser print checks on blank check stock Automatically create standard invoices for payment of goods either based on receipt transactions or advance shipping and billing notices Record a stop payment Void a payment and cancel or hold all invoices on the void payment Review on-line information regarding the result and status of every payment Reconcile your bank account with Oracle Payables' payment history Automatically clear your payments made with future dated payment documents 34 Oracle Financials Functional Overview

35 Major Features Payment Methods Oracle Payables allows multiple methods of payment, including computer-generated checks and electronic payments, future dated payment documents, and recorded payments. For more information on electronic payments, please see the Electronic Payments section within this document. Approval Oracle Payables prevents payment or posting of an invoice until you submit it for approval. If Approval places a hold on an invoice, you cannot pay the invoice until you release the hold. Decide how you want to perform invoice approval, either on-line, in batch or both, to match your approval process with your company policy and your computing resources. Multi-Currency Enter and pay an invoice in any currency you want. Oracle Payables automatically tracks any realized foreign exchange gains or losses on your payments. Payment Batch Oracle Payables produces payments for invoices you select and records the results so that you have accurate and timely payment information. Initiate a payment batch to create checks or electronic funds transfer files. Oracle Payables produces your payments in several steps to give you optimal control over automatic payments. You first select the invoices for your payment batch. You have the option to modify the selected invoices so you can delete, add, or change the payment amount of invoices selected for payment. You then format the payments for these selected invoices. If the payment batch is for checks, you then print the checks. The last step is to confirm your printed payment documents against your payment records. Alternatively, you can combine invoice selection and payment formatting into a single step if you do not intend to modify any of the invoices selected for payment. Oracle Payables 35

36 Invoice Select Invoices Initiate Payment Batch Modify Invoice Selection (Optional) Confirm Payment Batch Format Payments Create Payments (Checks or EFT s) Oracle Payables provides optimal control over your automatic payments Invoice Selection for Payment Automatically pay invoices using rules you establish for pay-through-date, Pay Group, payment priority, payment amount limits and several other criteria. Select invoices for payment based on criteria you specify Pay Alone Oracle Payables provides the ability to control payments to suppliers that require separate payment for an invoice. Optionally designate an invoice as a Pay Alone invoice when you enter the invoice. When you pay a Pay Alone invoice, Oracle Payables ensures that the invoice payment is separate from any other invoice payments for the supplier site. Quick Payment Use a Quick Payment to create an individual check on demand. Select the invoices you want to pay and Oracle Payables prints your check. 36 Oracle Financials Functional Overview

37 Payment Schedule Recalculation Ensure that you always take the better of invoice terms or purchase order terms when you match an invoice to a purchase order. Oracle Payables automatically recalculates your payment schedule to reflect the best terms. Automatic Discount Proration Oracle Payables lets you decide how you want to distribute any discounts you take. Credit a payment discount to a single Discount Taken Accounting Flexfield or prorate your discount amount across your invoice distribution lines. Payment Document Creation You have several options for ordering payment documents. Choose supplier name, supplier number or postal code to order your payments the way you want. Oracle Payables allows you any number of setup checks for aligning your printer, and automatically records them as nonnegotiable setup checks. Check Print Restart Easily restart your payment batch if your printer malfunctions. Simply identify the spoiled checks and Oracle Payables does the rest. Partial Payments You have complete control over the amount you pay and take as discount for invoices on any payment. Partial payments automatically reduce the balance due, and Oracle Payables schedules the remainder for future payment. Payment Hold In addition to holds that Oracle Payables automatically places during Approval, define your own invoice holds to prevent payment. Payment Document Control Oracle Payables helps you manage multiple payment documents. Decide the type of payment for which you want to use a payment document. Oracle Payables displays the next available document number when you format payments, and warns you before you run out of payment documents. Payment on Receipt Oracle Payables automatically creates standard invoices for payment of goods either based on receipt transactions or advance shipping and billing notices. You have the option to choose to create invoices either at the time you receive your ordered goods or when you receive an Advance Shipment and Billing Notice from your trading partner. You can define which suppliers participate in Payment on Receipt. Oracle Payables 37

38 Stop Payment Record a stop payment on any payment, then void the payment or release the stop payment. Oracle Payables keeps your stop payment status up-to-date. Oracle Payables also provides a report that you can use to review all current stop payments. Void Payment Oracle Payables automatically reverses the payment and accounting records after verifying that the payment has not already cleared the bank. You can then repay the invoice on a new payment, place a hold on the invoice, or cancel the invoice. Positive Pay Work with your bank to prevent check fraud by using Positive Pay. When you create a payment batch or individual payment in Oracle Payables, you can create a list of checks issued to suppliers and employees called a Positive Pay file. Use a third party product of your choice to format and electronically transmit this file to your bank. As checks clear your bank, the bank identifies exceptions which you can choose to process or exclude from payment. Payment Reconciliation Automatically reconcile your bank account with Oracle Payables payment history using Oracle Cash Management. Load a bank reconciliation file from a tape or diskette and Oracle Cash Management records a cleared date and cleared amount on each payment that matches the bank information. Oracle Cash Management automatically prints a reconciliation report, highlighting exceptions. For more information about Oracle Cash Management, please refer to the Bank Statement Reconciliation with Oracle Cash Management section within this document. Laser Printed Payment Documents Oracle Payables allows you to laser print checks on blank check stock. With this feature, you can incorporate scanned signatures, MICR encoding, variable fonts, and custom objects into your checks. Automatic Clearing of Future Dated Payments Oracle Payables automatically clears your payments made with future dated payment documents based on their maturity date and the number of clearing days you specify for the payment document. 38 Oracle Financials Functional Overview

39 Electronic Payments You can pay your suppliers electronically by using either the Oracle EDI Gateway or by delivering to your bank an electronic funds transfer output file. Oracle Payables fully integrates with Oracle EDI Gateway to produce electronic payments and remittance advice information for suppliers of your choice. Business Needs With Oracle Payables you can: Create Electronic payments quickly and accurately whether you are using Oracle EDI Gateway or Oracle Payable s standard electronic funds transfer process Transfer payment data through Oracle EDI Gateway to the EDI translator of your choice to create an ASC X , EDIFACT equivalent or other outbound payment data file Use any of the standardized electronic funds transfer payment formats that Oracle Payables provides to create electronic payments, or create your own custom payment format Keep a complete audit trail of Electronic payments you make Major Features Automatic Payment Oracle Payables creates electronic payments automatically when you initiate a payment batch using an electronic payment document. Oracle Payables automatically creates electronic payments for all approved invoices with the Electronic Payment Method that are available for payment on or before the pay-through date you specify when you initiate a payment batch. EDI Payments Oracle Payables fully integrates with Oracle EDI Gateway to produce electronic payments and remittance advice information for suppliers of your choice. Oracle EDI Gateway extracts payment information from Oracle Payables to be processed by the EDI translator of your choice to create an ASC X , EDIFACT equivalent or other outbound payment data file. Custom Payment Formats Create your own electronic payment programs and formats to generate electronic funds transfer files that meet the specific format needs of your bank. Customize the electronic payment programs Oracle Payables provides, or create your own. Oracle Payables 39