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 Lifecycle
Sourcing ->Ordering ->Reporting and Analysis
Oracle Procure to Pay Process
Demand ->Source ->Order -> Receive ->Invoice ->Pay

RFQs and Quotations

Purchasing provides you with request for quotation (RFQ), and

quotation features to handle
your sourcing needs. You can create an RFQ from requisitions,
match supplier quotations to
your 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 Gateway

With 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), Material
Requirements Planning (MRP) and Order Management

May be entered manually through Purchasing windows

May be entered using iProcurement

May be imported from external systems

With 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
involved
Entering into Purchasing Agreements.Theseagreements can be of
two types :

Blanket Purchase Order (BPO)

BPO specifies items

and prices

which

are

negotiated with the supplier. It usually applies for a

given period of time i.e. it has a committed amount
for a specific date range for specific goods and
services. It may also stipulate minimtam and
maximum units and order amounts.

Contract Purchase Order (CPO)

CPO is an agreement between the company and the
supplier. It specifies only the terms and conditions

but no items i.e. it has a committed amount for a

specified date range for unspecified goods and
services.

Purchase Order:
issued to

A purchase order is a document which is

supplier every time when a procurement is done and there is no

Purchasing Agreement entered into between the organization and
the supplier. It
represents the items required to be purchased, the
pricing 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
regarding
prices, terms and conditions of items. Based
on the
RFQ, suppliers present their Quotations
which
contains all the details specified in RFQ and
other
Terms and Conditions if any.

Requisition

Requisition

isusedinternally

withinthe

organization. Requisitions are generated by various

departments in an organization who requires any
items to be purchased. These Requisitions after
approval from necessary approval authorities, will
then be forwarded to the Purchasing Department to
procure the items. Requisitions can be Internal and
Purchase. Internal Requisitions are requests to
purchase goods from an internal organization.
These internal requisitions general internal sales
orders 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
involved
Entering into Purchasing Agreements. These agreements can be
of two types :

Blanket Purchase Order (BPO)

BPO specifies items

and prices

which

are

negotiated with the supplier. It usually applies for a

given period of time i.e. it has a committed amount
for a specific date range for specific goods and
services. It may also stipulate minimtam and
maximum units and order amounts.

Contract Purchase Order (CPO)

CPO is an agreement between the company and the
supplier. It specifies only the terms and conditions
but no items i.e. it has a committed amount for a
specified date range for unspecified goods and
services.
Purchase Order:
issued to

A purchase order is a document which is

supplier every time when a procurement is done and there is no

Purchasing Agreement entered into between the organization and
the supplier. It
represents the items required to be purchased, the
pricing 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 Purchase
Order can be done in different ways such as 2-way matching, 3way 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 --->

(PO) (Invoices) (Payments)

Cash Management

(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-Business
Tax, Ledgers, Banks and other common data model components that are used by Oracle
Payables.
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 invoice
distributions in order to better match the structure of invoice documents and
improve the flow of information like manufacturer, model, and serial number from
Purchasing 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 bank
account 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 prior

releases have been consolidated and migrated into the data models of Oracle
Payables, Oracle Payments and Oracle Cash Management. The architecture of this
solution moves attributes from the GDFs, which are obsolete in Release 12, to
regular fields on the appropriate entity, including the invoice, payment format &
document, supplier site, and bank account. Having a single code base as opposed to
GDFs implemented per country simplifies global implementations and streamlines
transaction processing.
Oracle Subledger Accounting, a new module in Release 12, handles accounting
definitions and all accounting setup associated with a Ledger. (In Release 12, Oracle
General Ledger has replaced Sets of Books with Ledgers.) As part of this change,
centralized accounting reports are available to all applications. Additionally, Oracle
Payables introduces a new Trial Balance report.
Oracle E-Business Tax, a new module, manages transaction tax setup associated
with trading partners and tax authorities, as well as all transaction tax processing
and reporting across the E-Business suite of applications. Part of the architecture of
this solution moves tax attributes from Global Descriptive Flexfields (GDFs), which
are obsolete in Release 12, to regular fields on the appropriate entities.
A Responsibility can be associated with multiple Operating Units using Multi
Organizations Access Control. Due to this change, all processing and some
reporting in Oracle Payables is available across Operating Units from a single
applications responsibility. Hence you can isolate your transaction data by
operating unit for security and local level compliance while still enabling shared
service center processing.
Payables Workbenches
Payables includes two fully 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 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 Workbench
Invoices 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 payme

The following are the functions that are performed in the Invoice workbench :

Invoice Batches
o

Find Invoice Batches

Invoices
o

Find Invoices

Distributions

Calculate Balance Owed

Find Invoice Distributions

Prorate (Tax, Freight and Miscellaneous)

Scheduled Payments

Invoice Holds
o

Release

Invoice Actions
o

Apply/Unapply Prepayments

Payments

Match to Invoice
o

Find Invoices to Match

Match to Invoice Distribution

Match to PO
o

Find Purchase Orders to Match

Match to PO Distribution

Prorate (Tax, Freight, and Miscellaneous)

Invoice Overview

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

Payment Batches
o

Find Payment Batches

Copy To

Payment Batch Actions

Modify Payment Batch

Confirm Payment Batch

Payments

Find Payments

Select Invoices

View Invoices

Payment Actions

Payment Overview

Payables Set Up
REQUIRED SETUP TASKS
Table below shows the tasks required to set up the Payables applications. The tasks are
listed in the order they should be performed. Many tasks have predecessor tasks for data
validation, so they should be performed in the proper order.

SETUP TASK NAME

Install or Upgrade Payables
Create user sign-ons
Define Chart ofAccounts
Define Period type and Accounting Calendar
Enable Currencies
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 Terms
Define Purchase Order Matching Tolerances
Define Tax Authority type Suppliers
Define Tax Name and Tax Withholding Groups
Define Invoice Approval Codes

REQUIRED
Yes
Yes
Yes
Yes
Optional

Yes
Optional
Conditionally
Optional
Yes

Define Distributions Sets

Define Payables Quick codes
Define Payment Interest Rates
Create Templates for Entering Expense
Reports
Enter Employee Quick Codes
Enter Locations
Enter Employees
Define Reporting entities
Define1099 Income Tax Regions
Define Inventory Organizations
Define Financials Options
Define Payables Options
Define Payment Programs
Define Payment Formats
Update Country and Territory Information
Define Bank Accounts
Open Accounting Period
Define Request Sets

Optional
Yes
Optional
Optional
Optional
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Optional
Optional
Yes
Yes
Optional

INVOICE RELATED SET UPS

Payment Terms: (Navigation: Setup > Invoice > Payment Terms)
You can define an
unlimited number
of
payments that you assign
to
an
invoice
to
automatically
create
scheduled payments. You
can define payment terms
with more than one
payment
line. Each
Payment Line will create
one scheduled payment
lines. We can also define
multiple
levels of
discounts in
Payment
Terms.
Each payment
terms line and each corresponding scheduled

payment has a due date or a discount date based on either a specific day of a
month, such
as 20th of the month, or a number of days added to your terms date, such as 30
days after
the terms date. Each payment terms line also defines the due or discount amount
on a
define
scheduled
payment. When
you
payment
terms,
you
specify payment amoimt
either by percentages or
fixed
amounts.
by
Discount can be defined
by clicking on Tab First
Second
Discount,
Discount
and
Third
Discount
for Multiple
discounts.
After you define your
payment terms, you can
select
default
system
payment
terms that
Payables automatically assigns to the suppliers and supplier sites you enter. The
payment
terms for a supplier site default to the invoices you enter for the site. Oracle
provides a
predefined payment term called Prepayment hnmediate that Payables
automatically
assigns to all prepayments you enter.
TIPS TO REMEMBER:
If you update the payment terms on an invoice, payables recalculate the scheduled
payment for the invoice. You must reenter any manual adjustments you made to
the
previous scheduled payment. For example, if you update the payment priority on a
particular scheduled payment and then change the payment terms. Payables
recalculate
the scheduled payment using the same payment priority defaults as before, and
you will
need to redo your updates.
Distribution Sets: (Navigation: Setup >Invoice>Distribution Sets)
You can use a Distribution Set to
automatically enter distributions
for an invoice when you are not
matching it to a purchase order.
For example, you can create for
an
advertising supplier
a
Distribution Set that allocates
advertising expense on an invoice to four advertising departments. You can assign
a
default Distribution Set to a supplier site so Payables will use it for every invoice
you
enter for that supplier site. If you do not assign a default Distribution Set to a
supplier
site, 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
use
Skeleton Distribution Sets to create distributions with no set distribution amounts.
For
example, a Full Distribution Set for a rent invoice assigns 70% of the invoice
amount to
the Sales facility expense account and 30% to the Administration facility expense
account. A Skeleton Distribution Set for the same invoice would create one
distribution
for the Sales facility expense account and one distribution for the Administration
facility
expense account, leaving the amounts zero. You could then enter amounts during
invoice
entry depending on variables such as that month's headcount for each group.
{Distributions created by distribution sets are always exclusive of tax even ifyou
use
Automatic Tax Calculation and you have checked the Includes Tax check box at the
supplier site)
Tolerances: (Navigation: Setup > Invoice > Tolerances)
Define
the
matching
and tax tolerances you
want to
allow for
variances between
invoice, purchase order,
receipt,
and tax
information. You can
define both percentagebased
and amountbased tolerances.
Tolerances determine
whether
Payables
places matching or tax
holds on an invoice.
When you submit Approval for an invoice you have matched to a purchase order or
receipt, Payables checks that the invoice matches the purchase order or receipt
within the
purchase order matching tolerances you define. When you submit Approval for
invoice with a tax amount. Payables checks that the actual invoice tax amount
equals the
calculated tax amount within the tolerances you define. Payables displays next to
tolerance field the name of the Hold that Payables will apply to your invoice dunng
Approval if the variance exceeds the tolerance you define.

Expense Report Templates

(Navigation: Setup > Invoice > Expense Report)

Use

Report

the

Expense

Template window to define

templates based on the expense
report forms you regularly use
in your company. You can
define default values for
expense items, and you can
then choose those items from a
list of values when you enter
expense

reports.

During

Payables

Invoice

Import,

Payables uses the expense item

information to create invoice
distributions.

You

define expense

report

templates for types of expense reports you use in your company. For example, define a
Salesperson template to use when you enter expense reports for your salespeople. On that
template, 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 salespeople
have car allowances.

Payment Related Set Ups

Banks: (Navigation: Setups > Payments > Banks)
Use

the

Bank

for to input the details of the

bank such as its

location,

address

and

other

all

Header informa
tion. Also identify
whether the insti
tution is a Bank or
a Clearing House.

Click on

Bank

Accounts

and

identify

whether

the

is

bank

Internal, Customer
or

Supplier.

Internal

is

used

for payments by the company, Supplier is used to input details of the Suppliers bank for
EFT transfer and Customer is used by Receivable Module. It is to be noted that the same
Bank form is used for both Accounts Payable and Accounts Receivable. Thus if the Bank
has 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 in
Account Contact, information about the ownership of account in Accoxint Holder,
Receivable setup in Receivable Options & More Receivable Options and Payable Setups
in Payable Options.
Next Click on Payable

Documents Tab and the

Payable Documents being
used by the company and
attach to each Payable Document
predefine Payment format and
Payment Methods. Click
on

Tab

Additional

Information to

provide

Document Sequence Numbers for the

payable documents, GL Account
Tab to provide GL
Accounting Information and Future Dated Payments information.

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

Payment Programs

(Navigation: Setup > Payments > Programs)

Use the Automatic Payment Programs window to define payment programs that
you use
to format payment documents and separate remittance advice. You specify
whether each
program is for building payments, formatting payments, or creating a payment
remittance
advice. Payables predefines one program for building payments and many standard
programs for formatting payments. Payables also predefines a program for creating
a
separate remittance advice for payments. You can select these predefined
programs when

you define a payment format, or you can use these programs as templates for
creating
your own custom payment programs.
Payment Formats

(Navigation: Setup > Payments > Formats)

Payment
Formats
are
used to
define
Payment Documents in Bank window. Use
the Payment Formats window to define the
payment
formats.
You
define payment
formats for the four payment methods that
Payables uses. You can define as many
payment formats as you require for each
payment method; however, each payment
format must be unique for that payment
method.
To each Payment format you
choose a Build Payments program, a Format
PajTnents
program
and optionally
Remittance Advice Program.
You can define a separate payment format
for each of your payment currencies. If you
assign a currency to a payment format, you
can use that format only with a bank account
whose bank account currency is the same as the format currency. If you use a
payment format to
pay multiple currency invoices and do not assign a currency to the payment format,
you can only
use that format with a bank account for which you also allow payment of multiple
currency
invoices. When you define a bank account, you can only allow payment of multiple
currency
invoices if the bank account currency is your fimctional currency.
You can also specify the number of invoices allowed per payment, the invoice
grouping, the
position of the check stub (for payment formats using payment programs that
produce a stub), and
whether 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 overdue
invoices. Payable uses these rates to create interest invoices when a payment is
being for
an overdue invoice. In the Payment Interest Rates window, you define interest rates
Payables uses to calculate and pay interest on overdue invoices. Payables
calculates
interest on overdue invoices only if you enable both the Allow Interest Invoices
Payables
option, 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
money
between banks. If you use Payables you specify charges between your remittance
banks
and your suppliers' banks. If you use Receivables you specify charges between your
customers' banks and your banks. You can define charges:
o

from a single bank to a single bank

o
including the transferring
bank)

from a single bank to all banks (i.e., to all banks

o
banks except the
transferring bank)

from a single bank to all other banks (i.e., to all

from all banks to a single bank

from all banks to all banks

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

Creating A Set Of Books Change for R12

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

If you choose to enable budgetary control, encumbrances will be created

automatically
for 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 to
define 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, you
need to define period types and accounting calendar.

Currencies
If 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)

R12
In Payables, you must select a
primary

Set

of

Books. After

Change for

choosing the primary set of books, if

needed,

use

the

Application

Developer responsibility to set the

GL Set of Books ID profile option to
updateable. Then use the system
administrator responsibility to set the
GL Set of Books profile option. For
a single set of books installation, set
the options at application level for
Oracle Payables. For a multiple set of books installation, set the option for each unique
combination of organization and responsibility. The responsibility you choose when you
log on detemiines the set of books you use.

Tax Authority Type Suppliers

To use automatic withholding tax, you need to define the Tax Authority type suppliers
used by automatic withholdings tax.

Defining Tax Names And Groups

You define the tax names you use on invoices to record invoice taxes you pay to your
suppliers and to your tax authorities. Each tax name has a tax type, tax rate, and account
to 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 are
correct.
The withholding Tax type tax names can have multiple rates, effective date ranges, tax

amounts limits, and taxable amount limits. You can also link a tax authority supplier to a
withholding Tax type tax name so you create invoices to pay taxes you withheld from
your suppliers.

To have Payables calculate the invoice sales tax and automatically create tax distributions
when you enter a Sales type tax name during invoice entry, enable automatic tax
calculation. Payables uses the tax rate of the tax name to calculate the sales tax. Do not
define special tax names for distributions that include tax. Simply check the Includes Tax
Distribution Check box, when you enter the distribution, and payables adjusts the
calculation.

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 Interface
Import.

> 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. You
can create as many QuickCodes for each item as you require. You can update the
description and inactive date of a QuickCode at any time, but you cannot change the type
or 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 can
also define Employee QuickCodes in Payables.

Defining Locations

(Navigation: Employees > Locations)

In Oracle Human Resources, you set up each physical site where your employees work as
a separate location. You can also enter the addresses of extemal organization that you
want to maintain in your system. When you are setting up internal or extemal
organizations, you pick from a list of these locations. This approach enables you to enter
information about each location only once, saving data entry time. It provides for central
maintenance of locations to ensure consistency of address standards.

Defining Employees
You can enter, maintain, and view basic personal information and addresses for

employees. You can also enter work assignment information, which includes
organization, job, position, work location, and supervisor's name.

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

Signing Limits(Navigation: Employees > Signing Limits)

Enter the Managers name's who are authorize to approve AP Expenses Reports submitted
by employees. Each Manager will be assigned upto what amount they can approve a
document 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 on
invoices to record invoice
taxes you pay to suppliers
and tax authorities. Each
tax code has a tax type, a
tax rate, and an account to
which you

charge tax

amounts.

Tax code can be defined in

Payable Options Window

to define the hierarchy of
default or to expense or
asset accounts.

If you use automatic tax calculation, Payables calculates the invoice sales tax and
automatically creates tax distributions. You do not need to define special tax codes for
distributions that include tax. Simply select the Includes Tax check box when you enter
the 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 Offeet
taxes with Sales or User-defined taxes. When you use the Sales or User-defined tax on an
invoice, you record the tax, but the associated Offset tax reduces or eliminates your tax
liability. To associate an Offset tax with a Sales or User-defined tax, first define the
Offset tax. Then when you define the Sales or User-defined tax, enter the Offset tax code
in the Offset Tax field in the Other Tab.

Withholding Tax type tax codes can have multiple rates, effective date ranges, tax
amount limits, and taxable amount limits. You can also link a tax authority supplier to a
Withholding Tax type tax code so you can create invoices to pay taxes you withheld from
your 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 Form
1099 Forms
1099 Invoice Exceptions Report
1099 Supplier Exceptions Report
1099 Payments Report
1099 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 balancing
segment values their accoimts.