Oracle Fusion Financials Student Guide Part2 PDF

Oracle Financials Cloud:
Financials Implementation for R11
Student Guide - Volume II

D000PTGC10
Edition 1.0 | June 2016
Learn more from Oracle University at oracle.com/education/
Author Copyright © 2016, Oracle and/or its affiliates. All rights reserved.
Disclaimer
Kathryn Wohnoutka
This document contains proprietary information and is protected by copyright and
Publisher other intellectual property laws. You may copy and print this document solely for your
own use in an Oracle training course. The document may not be modified or altered
Sumesh Koshy in any way. Except where your use constitutes "fair use" under copyright law, you
may not use, share, download, upload, copy, print, display, perform, reproduce,
publish, license, post, transmit, or distribute this document in whole or in part without
the express authorization of Oracle.
The information contained in this document is subject to change without notice. If you
find any problems in the document, please report them in writing to: Oracle University,
500 Oracle Parkway, Redwood Shores, California 94065 USA. This document is not
warranted to be error-free.
Restricted Rights Notice
If this documentation is delivered to the United States Government or anyone using

the documentation on behalf of the United States Government, the following notice is
applicable:
U.S. GOVERNMENT RIGHTS

The U.S. Government’s rights to use, modify, reproduce, release, perform, display, or
disclose these training materials are restricted by the terms of the applicable Oracle
license agreement and/or the applicable U.S. Government contract.
Trademark Notice
Oracle and Java are registered trademarks of Oracle and/or its affiliates. Other names
may be trademarks of their respective owners.
Contents
1 Introduction to Oracle Financials Cloud Implementation

Course Objectives 1-2
Course Approach 1-3
Oracle Fusion Implementation Resources 1-4
Oracle Help Center: docs.oracle.com 1-5
Oracle Cloud Application Service Pages 1-6
Video Subject Areas on the Oracle Help Center 1-7
New Reference Guides 1-8
Friendly Search 1-10
Lesson Objectives 1-11
Introduction to Oracle Fusion Applications 1-12
Oracle Financials Cloud: Overview 1-13
Financials Cloud: Key Features 1-14
Implementation Discussion 1-15
Common Applications Configurations: Overview 1-16
Common Application Discussion 1-17
Summary 1-19
2 Introducing Oracle Fusion Navigation

Objectives 2-2
Getting Started in Oracle Fusion Applications 2-3
Simplified Navigation 2-4
New Welcome Springboard 2-5
Favorite and Recent Items 2-6
User Interface 2-7
Dashboards 2-8
General Accounting Dashboard 2-9
Work Areas 2-10
Panel 2-11
Search Panel Overview 2-12
Reports and Analytics Panel 2-13
Practice 2-1 Overview: Getting Started in Oracle Fusion Applications 2-14
Infolets versus Infotiles 2-15
Infolets Overview 2-16
Infolet Repository 2-17
iii
Subledger Infotiles Overview 2-18
Practice 2-2 Overview: Exploring Infolets and Infotiles 2-19
Summary 2-20
3 Introducing Functional Setup Manager

Objectives 3-2
Overview of Functional Setup Manager 3-3
Job Roles 3-4
Implementation Objects Overview 3-5
Setup Objects 3-6
Business Objects 3-7
Offerings 3-8
Offerings, Functional Areas, and Features 3-9
Offerings, Functional Areas, and Features: Example 3-10
Offerings 3-11
About Financials: Overview 3-12
Practice 3-1 Overview: Browsing Offerings 3-14
Configuring Offerings 3-15
Demonstration 3-2 Overview: Configuring Offerings 3-16
Implementation Task Flow 3-17
Implementation Project: Overview 3-18
Assign Tasks 3-19
Rapid Implementation Task List 3-20
Financials Task Lists 3-21
Practice 3-3 Overview: Creating an Implementation Project 3-22
Implementation Project for Ongoing Maintenance 3-23
Setup Data Export and Import: Overview 3-24
Offering Based Export 3-25
Offering Based Import 3-26
Offering Based Export and Import Process 3-27
Additional Information on Oracle Help Center 3-28
Summary 3-29
4 Overview of Security
Objectives 4-2
Oracle Financial Cloud Security Methodology 4-3
Security Reference Implementation 4-4
Points to Consider When Implementing the First Project 4-5
Function and Data Security 4-7
New Data Security for R11 4-8
Assigning Data Scopes to Users for New Customers Only 4-9
iv
Types of Roles 4-10
Role Inheritance 4-11
Security Example with Data Role Added 4-12
Oracle Identity Manager 4-13
Creating Users 4-14
Role Provisioning Tasks 4-15
Using Role Mappings 4-16
Practice 4-1 to 4-3 Overview: Using User Security 4-17
Customizing Roles 4-18
The Security Console 4-19
The Security Console: Copy Feature 4-20
The Security Console: Compare Roles Feature 4-21
Additional Features 4-22
Practice 4-4 Overview: Using the Security Console 4-23
Auditing Security 4-24
Security Resources 4-26
Summary 4-27
5 Discussing the Vision Story and Common Applications

Objectives 5-2
Overview 5-3
Scenario 5-4
Scenario Details 5-5
Vision Corporation Analysis 5-6
Vision Corporation Structure Diagram 5-8
Vision Corporation Enterprise Structure 5-10
Vision Corporation Business Unit and Department Structure 5-11
Vision Corporation Distribution Structure 5-12
Vision Corporation Chart of Accounts Summary 5-13
Define Geographies 5-14
Geographies: Overview 5-15
Geography Structure 5-16
Geography Hierarchy 5-17
Geography Hierarchy Example 5-18
Geography Validations 5-19
Manage Geography Validations 5-20
Address Cleansing 5-21
Geocoding Process 5-22
Importing Geography Options 5-23
Nokia Geography Reference Data Import 5-24
File-Based Import 5-25
v
Managing Geography Lookups 5-26
Tax Zone Types and Zones 5-27
Run Maintain Geography Name Referencing Process 5-28
Quiz 5-29
Summary 5-33
6 Configuring Enterprise Structures

Objectives 6-2
Define Enterprise Structures 6-3
Sharing Ledger Components Across Oracle Applications 6-4
Practice 6-1 Overview: Reviewing Shared Components 6-5
Plan Your Implementation Requirements 6-6
Implementation Simplification 6-7
Rapid Implementation: Overview 6-8
Rapid Implementation Task List 6-9
Rapid Implementation Process 6-10
Chart of Accounts Components 6-11
What Is a Value Set? 6-13
Assigning Segment Labels 6-14
Balancing Segment Labels 6-15
Cost Center Segment Labels 6-16
Other Segment Labels 6-17
Defining Hierarchies: Overview 6-18
Manage Business Units 6-19
Rapid Implementation Workbook 6-20
GL Rapid Implementation Additional Features 6-21
Cross-Validation Rules and Segment Value Security Rules 6-22
Account Combinations 6-23
Account Defaulting 6-24
Country-Specific Document and Journal Sequencing 6-25
Rapid Implementation Spreadsheets 6-26
Completing the Accounting Configuration 6-28
Practice 6-2 Overview: Entering Data in the Rapid Implementation Spreadsheet 6-
30
Completing the Accounting Configuration 6-31
Practice 6-3 to 6-5 Overview: Completing the Rapid Implementation Process 6-33
Other Spreadsheet Uses 6-34
Enterprise Structures Setup Report 6-35
Diagnostic Tests for Enterprise Structures Setup Data 6-36
Define Legal Jurisdictions and Authorities 6-37
Legal Jurisdictions: Overview 6-38
vi
Legal Authorities Overview 6-39
Practice 6-6 to 6-8 Overview: Reviewing a Legal Jurisdictions and Authorities 6-40
Manage Legal Entities 6-41
Legal Entities Definition 6-42
The Role of Your Legal Entity 6-43
Legal Entities in Transactions 6-44
Legal Entity and Business Units 6-45
Legal Entity and Divisions 6-46
Legal Entity and Ledgers 6-47
Legal Entity and Balancing Segments 6-48
Legal Entities and Intercompany Transactions 6-50
Legal Entity and Its Relationship to Intercompany Transactions 6-51
Legal Entity and Consolidation Rules 6-52
Country-Specific Legal Entity Sequences 6-53
Practice 6-9 Overview: Searching for Your Legal Entity 6-54
Manage Legal Reporting Units 6-55
Legal Reporting Units Points to Consider 6-56
Practice 6-10 Overview: Viewing a Legal Reporting Unit 6-57
Summary 6-58
7 Configuring General Ledger Components

Objectives 7-2
Financials Task Lists 7-3
Accounting Configuration Prerequisites 7-4
Creating Chart of Accounts Considerations 7-5
Define Value Sets 7-6
Validation and Value Sets 7-8
Practice 7-1 Overview: Searching for and Reviewing Your Value Sets 7-9
Building the Chart of Accounts Structure 7-10
Chart of Accounts Structure Attributes 7-11
Building the Chart of Accounts Restrictions 7-12
Chart of Accounts Instance 7-13
Account Shorthand Alias 7-14
Practice 7-2, 7-3, and 7-4 Overview: Searching for and Deploying Your Chart of
Accounts 7-16
Define Segment Values 7-17
Assign Segment Attributes 7-18
Control Accounts Benefits 7-20
Control Accounts Explained 7-21
Practice 7-5 Overview: Entering Values 7-22
Defining Hierarchies 7-23
vii
Account Hierarchy Purposes 7-24
Account Hierarchy Example 7-25
Create Account Hierarchies 7-26
Create Account Hierarchies Version 7-27
View Account Hierarchies 7-28
Published Account Hierarchy Example 7-29
Single Account Hierarchy 7-30
Published Account Hierarchy V2 Example 7-31
Troubleshooting 7-32
Practice 7-6 and 7-7 Overview: Searching, Completing, and Publishing Your
Accounting Hierarchy 7-34
Enabling Account Combinations 7-35
Practice 7-8 Overview: Creating an Account Combination 7-36
Manage Segment Value Attributes 7-37
Segment Value Security 7-38
Defining Segment Value Security Rules 7-39
General Points About Segment Value Security 7-40
Segment Value Security Examples 7-41
Segment Value Security Operators 7-42
Segment Value Security Rules and Hierarchies Example 7-43
Segment Value Security Rules with Hierarchies 7-44
Changes to an Account Hierarchy Referenced in Segment Value Security Rules 7-
45
Implementation Considerations 7-46
Implementing Segment Value Security 7-47
Segment Value Versus Data Access Set Security 7-48
Cross-Validation Rules 7-50
Cross-Validation Rules Considerations 7-51
Dynamic Combination Creation Allowed 7-52
Filters Overview 7-53
Filters and Conditions 7-54
Practice 7-9 Overview: Defining Cross-Validation Rules in a Spreadsheet 7-55
Manage an Accounting Calendar 7-56
Accounting Calendar Considerations 7-57
Start Date 7-58
Period Frequency 7-59
Period Name Format 7-60
Calendar Type 7-61
Calendars with Different Period Frequencies 7-62
Adding a Calendar Year 7-64
Practice 7-10 Overview: Verifying Your Calendar 7-65
viii
Calendar Auditing 7-66
Manage Currencies Overview 7-67
Currency Concepts 7-68
Currency in Subledgers 7-69
Define Currencies Overview 7-70
Currencies Overview 7-71
Practice 7-11 Overview: Reviewing and Creating Currencies 7-72
Conversion Rate Types: Overview 7-73
Cross-Currency Functionality 7-74
Explain Cross-Rate Rules 7-75
Practice 7-12 Overview: Creating Conversion Rate Types 7-77
Daily Rates: Overview 7-78
Entering Daily Rates 7-79
Practice 7-13 and 7-14 Overview: Using Currency Rates 7-80
Define Ledgers 7-81
Ledgers and Accounting Configurations 7-82
Define Ledger Components 7-84
Ledgers and Subledger Accounting 7-85
Manage Primary Ledgers 7-86
Practice 7-15 Overview: Searching for Your Ledger 7-87
Specify Ledger Options 7-88
Processes Using Ledger Options 7-89
Practice 7-16 Overview: Verifying Your Ledger Options 7-90
Balancing Segment Value Assignments: Overview 7-91
Balancing Segment Value Assignments to Legal Entities 7-92
Balancing Segment Values Assignments to Ledgers 7-93
Balancing Segment Value Assignment Report 7-94
Practice 7-17 Overview: Verifying Legal Entities and Balancing Segments
Assignments 7-95
Manage Reporting Currencies 7-96
Reporting Currencies Conversion Levels 7-98
Practice 7-18 Overview: Defining Reporting Currencies 7-100
Define Secondary Ledgers 7-101
Secondary Ledgers Scenarios 7-102
Secondary Ledgers Conversion Levels 7-103
Secondary Ledger Example 7-104
Secondary Ledger Example Conclusion 7-105
Secondary Ledgers Mapping 7-106
Chart of Accounts Mapping Feature 7-107
Segment Mapping Rules 7-108
Account Mapping Rules 7-109
ix
Review and Submit Accounting Configuration 7-110
Practice 7-19 Overview: Completing the Ledger Configuration 7-111
Balance Cubes: Overview 7-112
Balance Cubes Naming 7-113
Balance Cube Dimensions 7-114
Manage Ledger Sets 7-115
Practice 7-20 Overview: Creating a Ledger Set 7-116
Data Access Set Security Overview 7-117
Data Access Set Security 7-118
Data Access Set Security: Example 7-120
Practices 7-21 and 7-22: Data Access Set Security 7-121
Overview 7-122
Open and Close Periods Life Cycle 7-123
Accounting Period Statuses 7-124
Accounting Periods Overview 7-125
Period Close with Oracle Financials 7-126
Period Close Section 7-127
Period Close Best Practices 7-128
Practice 7-23 Overview: Opening the First Accounting Period 7-129
Period Close Checklist 7-130
Period Close Components 7-131
Allocations Concepts 7-132
Allocation Components 7-133
Defining Allocations Requirements 7-134
Generation of Allocations 7-135
Cross Ledger Intercompany Allocations 7-136
Step Down Allocation Example One 7-137
Step Down Allocation Example Two 7-138
Allocation Rule Concepts 7-139
Allocation Rule Deployment 7-140
Allocations: Best Practices 7-141
Practice 7-24 Overview: Creating and Generating an Allocation Rule 7-142
Revaluation Overview 7-143
Translation Overview 7-144
Revaluation and Translation Concepts 7-145
Revaluation and Translation Setup 7-146
Revaluation Process 7-147
Revaluation Example 7-149
Practice 7-25 Overview: Creating a Revaluation 7-150
Translation Process 7-151
Translation and Remeasurement Solutions 7-152
x
Historical Rates and Amounts 7-153
Import Journal Entries Overview 7-154
Journal Import Verification Process 7-155
Journal Import Validates 7-156
Reconciliation 7-157
Reconciliation Concepts 7-159
Payables Tax Reconciliation with General Ledger Report 7-160
Summary 7-161
8 Configuring Oracle Fusion Intercompany

Objectives 8-2
Intercompany Overview 8-3
Intercompany Balancing Overview 8-4
Example: Payables Invoice 8-5
Example: Cross Ledger Allocation Journals 8-7
Intercompany Balancing Features 8-8
Balancing Setup 8-10
Balancing Rules: Order of Precedence 8-13
Evaluation of Intercompany Balancing Rules 8-14
Manage Intercompany Balancing Rules 8-15
Manage Secondary and Clearing Company Balancing Options 8-18
Key Decisions and Best Practices 8-20
Demonstration 8-1 Overview: Setting Up a New Rule 8-25
Practice 8-2 Overview: Viewing Intercompany Balancing Rules and Secondary and
Clearing Company Balancing Options 8-26
Intercompany Allocation Overview 8-27
Intercompany Allocation Journals 8-28
Intercompany Allocation Transactions 8-29
Intercompany Allocation Requirements 8-30
Key Setup Tasks: Create Allocation Rules 8-31
Example: Intercompany Allocations 8-32
Intercompany Allocations Example 8-38
Oracle Fusion Intercompany Transactions Overview 8-40
Intercompany General Ledger Integration 8-41
Intercompany Receivables and Payables Integration 8-42
Intercompany Transactions Dashboard 8-43
Manual Intercompany Transaction Processing Steps 8-44
Intercompany Transactions Setup 8-45
Manage Intercompany System Options 8-46
Manage Intercompany Transaction Types 8-47
xi
Manage Intercompany Period Status 8-48
Manage Intercompany Organizations 8-49
Map Intercompany Organizations 8-50
Manage Intercompany Organizations 8-52
Define Invoicing Options 8-53
Manage Intercompany Customer and Supplier Assignments 8-54
Manage Intercompany Customer Supplier Assignments 8-55
Manage Intercompany Receivables Assignments 8-56
Define Transaction Accounts for the Intercompany Transactions 8-58
Transaction Account Types 8-59
Intercompany Transactions Approvals 8-60
Example: Intercompany Transactions Approvals 8-61
Manage Intercompany Balancing Rules 8-62
Key Decisions and Best Practices 8-63
Intercompany Reconciliation 8-64
Reconciliation Reports 8-65
Intercompany Reporting and Analysis 8-66
Practice 8-3 Overview: Creating an Intercompany Batch 8-67
Practice 8-4 Overview: Submitting and Reviewing Reconciliation Reports 8-68
Additional References on My Oracle Support https://support.oracle.com 8-69
Summary 8-70
9 Configuring Financial Reporting

Objectives 9-2
The New Financial Reporting Center Overview 9-3
Other Reporting Tools Overview 9-5
Access to the Financial Reporting Center 9-7
Viewing Financial Reports from the Financial Reporting Center 9-8
Live Reports and Published Snapshot Reports 9-9
Practice 9-1 Overview: Using the New Financial Reporting Center 9-10
Oracle Fusion General Ledger Balances Cube Overview 9-11
Dimension Values in Reporting 9-12
GL Balances Cube: Dimensions 9-13
GL Balances Cube: Default Values 9-15
Dimension Values and Defaults 9-16
Smart View Overview 9-19
Smart View: Ad Hoc Analysis 9-21
Smart View: Query Designer 9-22
Creating Financial Reports 9-23
Financial Reporting Studio Overview 9-24
Installing and Configuring the Financial Reporting Studio 9-25
xii
Report Designer 9-26
Report Designer’s Standard Toolbar 9-27
Financial Reporting Studio Components 9-28
Designer Toolbar 9-30
Grids 9-31
Practice 9-2 Overview: Creating a Report with the Financial Reporting Studio:
Defining a Grid 9-33
Defining Formulas 9-34
Available Formulas 9-35
Practice 10-3 Overview: Creating a Financial Report: Adding a Formula for Total
Expenses 9-36
Using Functions: Range 9-37
Practice 9-4 Overview: Creating a Financial Report: Defining a Rolling 12-Period
Column 9-39
User and Grid Point of View Dimensions 9-40
Selecting Members 9-42
Practice 10-5 Overview: Creating a Financial Report: Defining the Grid and User
Point of View Dimensions 9-43
Property Sheet 9-44
Property Sheet Component Objects and Features 9-45
Practice 9-6 Overview: Creating a Financial Report: Setting Properties 9-46
Text Box Objects 9-47
Image Objects 9-48
Practice 9-7 Overview: Creating a Financial Report: Adding a Logo and Title 9-49
Reviewing a Report 9-50
Practice 9-8 Overview: Reviewing a Report 9-51
Infolets Overview 9-52
Infolet Repository 9-53
General Accounting Infolets 9-54
Budgetary Control Infolets 9-58
Budget Consumed Infolet 9-59
Funds Available Infolet 9-60
Custom Infolets Overview 9-61
Practice 9-9 Overview: Using Infolets Demonstration 9-62
Account Groups Overview 9-63
Viewing Account Groups in the General Accounting Infolets 9-64
Defining Account Groups: Header Region 9-65
Defining Account Groups: Accounts Region 9-67
Practice 9-10 Overview: Setting up the General Accounting Expense Infolet 9-68
Viewing Account Groups from the Financial Reporting Center 9-69
Sunburst Tool 9-70
xiii
Sunburst Icons 9-71
Sunburst Options 9-72
Practice 9-11 Overview: Viewing an Account Group from the Financial Reporting
Center Demonstration 9-73
Oracle Transactional Business Intelligence Overview 9-74
Oracle BI Publisher Overview 9-76
Oracle Business Intelligence Publisher: Overview 9-77
Financial Reporting Center and Oracle BI Publisher 9-79
Summary 9-80
10 Configuring Business Units and Reference Data Sets

Objectives 10-2
Common Applications Configuration for Financials 10-3
Business Units Overview 10-4
Business Unit Structure: Example 10-5
Business Unit Definition Considerations 10-6
Implementing Business Units Overview 10-7
Managing Business Units 10-8
Assigning Business Unit Functions. 10-9
Managing Service Provider Relationships. 10-11
Service Provider Model for Procurement Services 10-12
Service Provider Model for Payables Payment Services 10-13
Payment Services Model: Dedicated 10-14
Payment Services Model: Self-Service 10-15
Payment Services Model: Dedicated and Self-Service 10-16
Practice 10-1 Overview: Viewing Your Business Unit 10-17
Practice 10-2 Overview: Viewing the Assigned Business Unit Functions 10-18
Manage Reference Data Sets 10-19
Reference Data Sharing: Overview 10-20
Practice 10-3 Overview: Creating a Reference Data Set 10-21
Determinant and Determinant Types 10-22
Determinant Types 10-23
Assignments to One Set Only, with Common Values 10-24
Assigning Sets to Business Units 10-25
Manage Reference Data Partitions 10-26
Assignments to One Set Only, with No Common Values 10-27
Assignments to Multiple Sets, with No Common Values 10-28
Payables Payment Terms Example 10-29
Reference Data Set: Examples 10-30
Setting Up Payment Terms for Reference Data Sharing 10-31
Practice 10-4 Overview: Managing your Business Unit Set Assignment 10-33
xiv
Practice 10-5 Overview: Provisioning Data Roles 10-34
Summary 10-35
11 Configuring Oracle Fusion Tax

Objectives 11-2
Understanding Oracle Fusion Tax 11-3
Practice 11-1 Overview: Viewing Calculated Tax on a Payables Transaction
Demonstration 11-5
Tasks to Configure Oracle Fusion Tax 11-6
Define Taxes for Rapid Implementation Task List 11-7
Rapid Implementation Spreadsheets 11-8
Tax Configuration Workbook 11-9
Tax Implementation Workbook 11-10
Tax Setup Spreadsheets 11-12
Define Tax Configuration Task List 11-13
Define Advanced Tax Configuration Task List 11-15
Oracle Fusion Tax Architecture 11-16
Tax Requirements Organization 11-18
Foundation Tax Configuration 11-19
Examples of Foundation Tax Setup 11-20
Setting Up Foundation Tax Components 11-21
Configuration Owners and Options 11-22
Tax Regimes 11-23
Taxes 11-24
Tax Statuses 11-26
Tax Jurisdictions 11-27
Tax Rates 11-28
Tax Recovery Rates 11-29
Practice 11-2 Overview: Creating a US Sales Tax Using the Tax Configuration
Workbook 11-30
Practice 11-3 Overview: Creating a VAT Tax Using the Tax Configuration Workbook
(Optional) 11-31
Setting Up Party Tax Profiles 11-32
Tax Classification Code 11-34
Setting Up Advanced Tax Configuration 11-35
Tax Rule Configuration 11-36
Key Building Blocks of Tax Rules 11-37
Tax Determination Process 11-38
Step 1: Determine Applicable Tax Regimes and Candidate Taxes 11-39
Steps 2 and 3: Determine Place of Supply and Tax Jurisdiction and Tax Applicability
11-41
xv
Step 4: Determine Tax Registration 11-43
Step 5: Determine Tax Status 11-44
Step 6: Determine Tax Rate 11-45
Simplified Tax Line Override Setup 11-46
Step 7: Determine Taxable Basis 11-47
Step 8: Determine Tax Calculation 11-48
Step 9 (if applicable): Determine Tax Recovery 11-49
Setting Up Withholding Tax Configuration 11-50
Calculating Withholding Taxes 11-51
Enabling Withholding Tax Configuration 11-52
Withholding Tax Regime to Rates 11-53
Withholding Tax Rules 11-55
Setting Up Tax Point Basis 11-56
Setting Up Delivery-Based Tax Calculation 11-57
Setting Up Transaction Tax Thresholds 11-59
Calculating Transaction Tax Thresholds 11-60
Setting Up Tax Box Allocations 11-61
Setting Up Tax Reporting Configuration 11-62
Setting Up Global Tax Reporting 11-63
Reporting and Analysis 11-64
Verifying Tax Configuration 11-65
Practice 11-4 Overview: Using the Tax Simulator to Test a Receivables Transaction
11-66
Practice 11-5 Overview: Enabling your Tax for Transactions 11-67
Summary 11-68
12 Configuring Subledger Accounting

Objectives 12-2
Oracle Fusion Subledger Accounting: Overview 12-3
The Create Accounting Process 12-4
Accounting Methods Overview 12-5
Accounting Event Model Example 12-7
Payables Accounting Event Model 12-8
Accounting Methods Overview 12-10
How the Different Types of Rules Fit Together 12-12
Managing Accounting Methods and Rules Flow 12-13
Accounting Methods: Custom Formulas 12-14
Manage Custom Formulas: Explained 12-15
Manage Custom Formulas: Formula definition 12-16
Manage Custom Formulas: Predefined Formula Functions 12-17
Enabling Custom Formulas 12-21
xvi
Accounting Methods: Mapping Sets 12-22
Creating Mapping Sets 12-23
Accounting Methods: Account Rules 12-25
Creating Account Rules: Rule Type 12-26
Creating Account Rules – Value Types 12-27
Account Rules Best Practices 12-28
Conditions 12-29
Practice 12-1 Overview: Creating Three Account Rules. 12-31
Accounting Methods: Description Rules 12-32
Expanded Subledger Journal Entry Descriptions 12-34
Practice 12-2 Overview: Creating a Description Rule. 12-35
Accounting Methods: Supporting References 12-36
Accounting Methods: Journal Line Rules 12-37
Practice 12-3 Overview: Creating Two Journal Line Rules. 12-39
Accounting Methods: Journal Entry Rule Sets 12-40
Creating Journal Entry Rule Sets 12-41
Activating a Subledger Journal Entry Rule Sets 12-43
Practice 12-4 Overview: Creating a Journal Entry Rule Set 12-44
Accounting Methods 12-45
Creating or Modifying Accounting Methods 12-46
Practices 12-5 Overview: Duplicating and Modifying an Accounting Method. 12-48
Accounting Methods: Migrating the Accounting Configuration 12-49
Create Accounting Process 12-50
Create and Process Subledger Journal Entries 12-51
Practices 12-6 Overview: Submitting Create Accounting in Draft and Viewing the
Subledger Journal in Payables. 12-52
Practices 12-7 Overview: Submitting Create Accounting in Final/Post 12-53
Manual Features of Subledger Accounting 12-54
Improved Online Accounting Messages 12-55
Expanded Accounting Lines Window 12-56
Summary 12-57
13 Configuring Oracle Fusion Payables

Objectives 13-2
Required tasks to Configure Payables 13-3
Payables Terminology 13-4
Flow of Default Values 13-6
Managing Procurement Agents 13-7
Practice 13-1 Overview: Defining Your User as a Procurement Agent. 13-8
Managing Payment Terms 13-9
Payment Terms Due Date and Discount Dates 13-10
xvii
Day of Month Payment Term Example 13-11
Defaults and Predefined Payment Terms 13-12
Practice 13-2 Overview: Creating a Payment Term 13-13
Managing Common Options for Payables and Procurement 13-14
Default Distributions 13-15
Automatic Offsets 13-17
Automatic Offset by Primary Balancing Segment 13-19
Automatic Offset by All Segments, Except Natural Account 13-20
Currency Conversion 13-21
Expense Accruals 13-22
Self-Billed Invoices 13-23
Legal Entity Information 13-24
Practice 13-3 Overview: Managing Common Options for Payables and Procurement
13-25
Manage Invoice Options 13-26
Manage Invoice Options: Invoice Entry 13-27
Manage Invoice Options: Matching 13-31
Manage Invoice Options: Discount 13-32
Manage Invoice Options: Prepayment 13-33
Manage Invoice Options: Approval 13-34
Manage Invoice Options: Interest 13-35
Manage Invoice Options: Payment Request 13-36
Manage Invoice Options: Self-Service Invoices 13-37
Practice 13-4 Overview: Managing Invoice Options 13-38
Manage Payment Options 13-39
Practice 13-5 Overview: Managing Payment Options 13-41
Optional Tasks to Configure Payables 13-42
Define Automated Invoice Processing Configuration 13-43
Manage Payables Calendars 13-45
Manage Tax Reporting and Withholding Tax Options 13-46
Income Tax Reporting Options 13-47
Withholding Tax Options 13-48
Manage Payables Lookups 13-50
Manage Payables Descriptive Flexfields 13-51
Manage Payables Document Sequences 13-53
Manage Distribution Sets 13-55
Practice 13-6 Overview: Managing Distribution Sets 13-56
Manage Invoice Tolerances 13-57
Manage Invoice Holds and Releases 13-59
Manage Aging Periods 13-60
Define Payables Tax and Withholding 13-61
xviii
Manage Tax Regions 13-62
Manage Reporting Entities 13-63
Additional Withholding Tax Setups 13-65
Manage Interest Rates 13-66
Manage Bank Charges 13-67
Summary 13-68
14 Configuring Oracle Fusion Payments: Payables

Objectives 14-2
Practice 14-1 Overview: Creating Banks, Branches and Accounts Using a
Spreadsheet. 14-3
Practice 14-2 Overview: Creating a Payment Document for a Bank Account. 14-4
Overview of Oracle Fusion Payments 14-5
Overview of Disbursements for Payments 14-6
The Disbursements Process 14-7
Key Decision and Best Practice for Payment Processing 14-8
Key Decision and Best Practices for Payment Selection Criteria 14-9
Service Provider Model for Payables Payment Services 14-10
Payment Services Model: Dedicated 14-11
Payment Services Model: Self-Service 14-12
Payment Services Model: Dedicated and Self-Service 14-13
Configuring Payment System Connectivity Overview 14-14
Prerequisites for Configuring Payment System Connectivity 14-15
Disbursement Payment File Formats 14-16
Key Decision and Best Practices for Using Formats 14-17
Practice 12-1 Overview: Creating a Disbursement Payment File Format. 14-19
Transmission Configuration Concepts 14-20
Key Decision and Best Practices for Using Transmission Protocols 14-21
Practice 12-2 Overview: Creating the Transmission Configuration. 14-22
Managing Payment Systems 14-23
Practice 14-3 Overview: Creating a Payment System 14-24
Defining Disbursements 14-25
Prerequisites for Defining Disbursements 14-26
Disbursement Payment Methods 14-27
Creating Usage Rules for Payment Methods 14-29
Using Validations 14-30
Creating or Assigning Validations to Payment Methods 14-32
Choosing Predefined Validations 14-33
Creating User-Defined Validations 14-34
Manage Payment Method Defaulting Rules 14-35
Practice 14-4 Overview: Creating a Payment Method. 14-36
xix
Manage Payment Codes 14-37
Manage Payment Process Profiles 14-38
Prerequisites for Defining Payment Process Profiles 14-39
Payment Process Profile Concepts 14-40
Creating a Payment Process Profile 14-41
Payment Process Profiles: Usage Rules Tab 14-42
Payment Process Profiles: Payment System Tab 14-43
Payment Process Profiles: Payment Tab 14-44
Payment Process Profiles: Payment File Tab 14-45
Payment Process Profiles: Grouping Tab 14-48
Payment Process Profiles: Reporting Tab 14-49
Managing Disbursement System Options 14-51
Practice 14-5 Overview: Creating a Payment Process Profile. 14-52
Payment Document and Reference Numbers 14-53
Payment Process Requests 14-54
Payment Process Requests: Selection Criteria Tab 14-55
Payment Process Requests: Payment and Processing Options Tab 14-57
Practice 14-8 Overview: Submit a Payment Process Request 14-61
Summary 14-62
15 Configuring Oracle Fusion Receivables

Objectives 15-2
Order to Cash 15-3
Configuring Receivables: Rapid Implementation 15-4
Configuring Receivables: Complete Your Setup 15-7
Managing the Receivables System Options 15-8
Managing Receivables System Options: Billing and Revenue General information
15-9
Managing Receivables System Options: Billing and Revenue Accounting 15-11
Receivables System Options: Billing and Revenue Transactions 15-12
Receivables System Options: Billing and Revenue Transaction and Statement
Delivery Using E-Mail 15-14
Receivables System Options: Billing and Revenue Late Charges 15-15
Receivables System Options: Billing and Revenue Customers 15-16
Receivables System Options: Billing and Revenue AutoInvoice 15-17
Receivables System Options: Billing and Revenue Tuning Segments 15-18
Receivables System Options: Cash Processing General Information 15-19
Receivables System Options: Cash Processing Application Exception Rule 15-21
Receivables System Options: Cash Processing Accounting 15-22
Receivables System Options: Cash Processing Automatic Receipts 15-23
Receivables System Options: Cash Processing Bills Receivable 15-24
xx
Rapid Implementation and Receivables System Options 15-25
Rapid Implementation: System Option Settings 15-26
Practice 15-1 Overview: Reviewing Receivables System Options 15-29
Managing AutoAccounting Rules 15-30
AutoAccounting Rules: Table Names and Constant Values 15-31
Rapid Implementation: AutoAccounting 15-33
Practice 15-2 Overview: Reviewing AutoAccounting Rules 15-34
Managing Remit-to Addresses 15-35
Remit-to Addresses: Automatic Assignment 15-36
Rapid Implementation and the Remit-to-Address for a Business Unit 15-37
Practice 15-3 Overview: Reviewing Remit-to Addresses 15-38
Managing Receivables Activities 15-39
Receivables Activities: Setup 15-40
Rapid Implementation and Receivables Activities 15-41
Rapid Implementation: Receivables Activities 15-42
Practice 15-4 Overview: Reviewing Receivables Activities 15-43
Managing Statement Cycles 15-44
Statement Cycles 15-45
Rapid Implementation and Statement Cycles 15-47
Practice 15-5 Overview: Reviewing Statement Cycles 15-48
Defining Approval Limits 15-49
Implementation Considerations for Transactions 15-50
Set Up Document Sequences 15-51
Define Users for Credit Memo Workflow 15-52
Set Up Balance Forward Billing 15-54
Manage Value Sets 15-55
Customers and Parties 15-58
The Trading Community Model 15-59
Managing Customers 15-60
Manage Customer Profile Classes 15-61
Defining Profile Classes: Profile Class Tab 15-62
Profile Classes: Late Charges Tab 15-64
Practice 15-6 Overview: Creating a Customer Profile Class. 15-66
Customer Model 15-67
Creating an Organization Customer: Header 15-68
Creating a Customer: Address 15-70
Creating a Customer: Address Business Purposes 15-72
Uploading Customer Data 15-74
Practice 15-7 Overview: Creating a Customer. 15-75
AutoInvoice Process 15-76
xxi
AutoInvoice Interface Tables 15-78
Implement AutoInvoice: Profile Option Settings 15-80
Implement AutoInvoice: Transaction Flexfields 15-82
Implement AutoInvoice: Optional Setups 15-83
AutoInvoice Grouping Rule Transaction Attributes 15-84
Grouping Rules 15-85
Line Ordering Rules 15-86
Import Exceptions Overview 15-87
Define Payment Terms 15-89
Define Transaction Types 15-91
Define Transaction Types: Using Natural Application 15-92
Define Transaction Types 15-93
Practice 15-8 Overview: Defining a Transaction Type 15-95
Define Transaction Sources 15-96
Defining Transaction Sources for AutoInvoice 15-99
Define Transaction Sources for CPQ Cloud Integration 15-100
Practice 15-9 Overview: Defining a Transaction Source 15-102
Define Memo Lines 15-103
Set Up Balance Forward Billing 15-104
Defining Remittance Banks and Bank Accounts 15-105
Practice 15-10 Overview: Creating Banks, Branches, and Accounts Using a
Spreadsheet 15-106
Receipt Class, Receipt Method, and Bank Account Relationship 15-107
Defining Receipt Classes 15-108
Receipt Methods 15-110
Practice 15-11 Overview: Creating a Receipt Class and Receipt Method 15-111
Defining Receipt Sources 15-112
Practice 15-12 Overview: Creating a Receipt Source 15-113
AutoCash Rules 15-114
Define Application Rule sets 15-115
Define Application Rules: Tax Treatment Option 15-116
Define AutoMatch Rules 15-117
Define AutoMatch Rules: Threshold Settings 15-118
Define AutoMatch Rules: AutoMatch Calculation 15-119
Define Receipt Application Exception Rules 15-120
Implementation Considerations for Lockbox 15-122
Implementation Considerations for Lockbox: Receipt Match By and SmartReceipts
15-123
Implementation Considerations for Revenue Management 15-124
Settings for Revenue Recognition 15-125
Revenue Scheduling Rules 15-126
xxii
Revenue Scheduling Rules: Rule Types 15-127
Define Revenue Policies 15-128
Define Revenue Contingencies 15-130
Summary 15-133
16 Configuring Oracle Payments: Receivables

Objectives 16-2
Defining Remittance Banks and Bank Accounts 16-3
Practice 16-1 Overview: Creating Banks, Branches, and Accounts Using a
Spreadsheet 16-4
Receipt Class, Receipt Method, and Bank Account Relationship 16-5
Defining Receipt Classes 16-6
Receipt Methods 16-8
Practice 16-2 Overview: Creating a Receipt Class and Receipt Method 16-9
Defining Receipt Sources 16-10
Practice 16-3 Overview: Creating a Receipt Source 16-11
AutoCash Rules 16-12
Define Application Rule sets 16-13
Define Application Rules: Tax Treatment Option 16-14
Define AutoMatch Rules 16-15
Define AutoMatch Rules: Threshold Settings 16-16
Define AutoMatch Rules: AutoMatch Calculation 16-17
Define Receipt Application Exception Rules 16-18
Implementation Considerations for Lockbox 16-20
Implementation Considerations for Lockbox: Receipt Match By and SmartReceipts
16-21
Summary 16-22
17 Configuring Oracle Fusion Cash Management

Objectives 17-2
Cash Management: Overview 17-3
Cash Management Setups for Automatic Reconciliation Overview 17-4
Set Up Banks, Branches, and Accounts 17-6
Manage and Maintain Banks 17-7
Manage and Maintain Branches 17-8
Manage and Maintain Accounts 17-10
Manage and Maintain Accounts: General Tab 17-11
Manage and Maintain Accounts: Payment Documents 17-12
Manage and Maintain Accounts: Control Tab 17-13
Manage and Maintain Accounts: Security Tab 17-15
Manage and Maintain Accounts: Business Unit Access Tab 17-16
xxiii
Configuring Cash Management Rapid Implementation 17-17
Bank Statement Processing Overview 17-18
Key Setup Tasks for Bank Statement Processing 17-19
Manage Cash Transaction Type Mapping 17-20
Bank Statement Transaction Codes 17-21
Practice 17-1 Overview: Creating Transaction Codes 17-23
Payment Code Map Groups 17-24
Code Map Group Example 17-26
Bank Statement Formats 17-27
Parse Rule Sets 17-28
Parse Rule Set Example 17-29
Bank Statement Transaction Creation Rules 17-31
Practice 17-2 Overview: Managing Bank Statement Transaction Creation Rule 17-
33
Bank Statement Reconciliation Setups 17-34
Bank Statement Reconciliation Matching Rules 17-35
Practice 17-3 Overview: Managing Bank Statement Matching Rules 17-37
Bank Statement Reconciliation Tolerance Rules 17-38
Creating Reconciliation Tolerance Rules 17-39
Practice 17-4 Overview: Managing Bank Statement Tolerance Rules 17-41
Reconciliation Rule Sets 17-42
Practice 17-5 Overview: Managing Reconciliation Rule Sets 17-43
Practice 17-6 Overview: Assigning a Rule Set to a Bank Account 17-44
Defining Subledger Accounting Rules: Cash Management Accounting Event Model
17-45
Performing Bank Statement Reconciliation 17-46
Practice 17-7 Overview: Performing a Bank Statement Reconciliation with
Autoreconciliation. 17-48
Reporting and analysis 17-49
Cash Management Dashboard 17-50
Cash Management Infolets 17-51
Cash Positioning and Forecasting – Cash Balances 17-53
Cash Position Page 17-54
5 Day Forecast Page 17-55
Transactions Cube 17-56
Ready to Use Smart View Templates 17-57
Manual Transactions 17-58
Bank Account Transfers 17-59
Ad Hoc Payments 17-61
Setup Options in Payments 17-62
Intraday Bank Statement Support 17-63
xxiv
External Cash Transactions Attachments 17-64
Summary 17-65
18 Configuring Oracle Fusion Advanced Collections

Objectives 18-2
Advanced Collections Overview 18-3
Data Points and Formulas: Example 18-9
How Data Points, Scoring Formulas, and Strategies Work Together 18-11
Related Fusion Applications Requirements 18-13
Practice 18-1 Overview: Guided Tour of Advanced Collections Demonstration 18-14
Aging Methods Overview 18-15
Creating Aging Methods 18-16
Practice 14-2 Overview: Creating an Aging Method 18-17
Collectors Overview 18-18
Creating Collectors 18-19
Practice 18-3 Overview: Creating a Collector 18-20
Manage Dunning Configurations 18-21
Creating Dunning Configurations 18-22
Predefined Dunning Templates 18-24
Practice 18-4 Overview: Reviewing Dunning Templates Demonstration 18-25
Manage Collections Preferences 18-26
Global Preferences 18-27
Preferences 18-29
Manage Collections Preferences 18-30
Manage Collections Methods 18-31
Manage Collections Scoring Data Points 18-32
Manage Collections Scoring Formula 18-33
Manage Collections Strategy Tasks 18-34
Practice 18-5 Overview: Creating a Strategy Task 18-36
Manage Collections Strategies 18-37
Creating a Strategy 18-39
Practice 14-6 Overview: Creating a Strategy 18-40
Optional Implementation Configurations 18-41
Manage Collections Lookups 18-42
Manage Collections Note Types and Mapping 18-44
Managing Note Descriptive Flexfields 18-45
Advanced Collection Metrics 18-46
Demonstration Overview: Enabling Advanced Collection Metrics 18-48
Advanced Collections Metrics Tips 18-49
xxv
Summary 18-50
19 Configuring Assets
Objectives 19-2
Implementing Assets 19-3
Planning Your Implementation 19-4
Inquiring About Your Company’s History 19-5
Obtaining Existing Asset Information 19-6
Determining the Conversion Period 19-7
Define Fixed Assets Configuration 19-8
Define Fixed Assets Configuration for Rapid Implementation 19-9
Prerequisite Setup 19-10
Creating a New Assets Implementation Spreadsheet 19-11
Updating an Existing Assets Implementation 19-12
Demonstration 19-1 Overview: Updating an Existing Assets Configuration 19-13
Managing Assets Key Flexfields and Value Sets 19-14
Location Key Flexfield Implementation: Considerations 19-15
Category Key Flexfield Implementation: Considerations 19-17
Defining Your Flexfield Segments 19-18
Managing Asset Locations 19-19
Defining Asset Locations 19-20
Asset Key Flexfield Implementation: Considerations 19-21
Defining Your Flexfield Segments 19-22
Practice 19-2 to 19-4 Overview: Reviewing and Defining Asset Key Flexfields 19-
23
Managing System Controls 19-24
Defining Your System Controls 19-25
System Controls Implementation: Considerations 19-27
Practice 19-5 Overview: Review Asset System Control Options Demonstration 19-
28
Managing Fiscal Years and Calendars 19-29
Defining Fiscal Years 19-31
Fiscal Year Implementation: Considerations 19-33
Defining Asset Calendars 19-34
Calendar Implementation: Considerations 19-37
Prorate Conventions: Concepts 19-39
Prorate Conventions: Examples 19-42
Retirement Conventions 19-43
Prorate Convention Implementation: Considerations 19-44
Optional Implementation Steps 19-48
Practice 19-6 Overview: Managing Fiscal Years 19-49
xxvi
Practice 19-7 Overview: Managing Asset Calendars 19-50
Practice 19-8 Overview: Managing Prorate Conventions 19-51
Managing Asset Books 19-52
Corporate Books 19-53
Asset Book Setup 19-54
Asset Book Accounts 19-56
Asset Book Rules 19-57
Practice 19-9 Overview: Managing Asset Books 19-59
Tax Books 19-60
Asset Books and Ledgers, Subledgers, and Business Units 19-61
Asset Book Implementation: Considerations 19-64
Defining Your Asset Book: Multiple Depreciation Requirements 19-66
Defining Your Asset Book: Multiple Currency Representations 19-67
Defining Your Asset Book: Multiple Accounting Representations 19-69
Implementation Questions 19-70
Reference Data Sharing Across Asset Books 19-72
Reference Data Sharing: Overview 19-73
Determinant and Determinant Types 19-74
Reference Data Sharing Across Asset Books 19-75
Assignments to One Set Only, with Common Values 19-76
Assignments to One Set Only, with No Common Values 19-77
Reference Data Sharing: US Company Example 19-78
Reference Data Sharing: Multinational Company Example 19-79
Managing Asset Categories 19-80
Defining Asset Categories 19-82
Defining Default Depreciation Rules 19-84
Defining Oracle Fusion General Ledger Accounts 19-85
Category Implementation: Considerations 19-86
Practice 19-10 Overview: Managing Asset Categories 19-87
Managing Cash-Generating Units 19-88
Cash-generating Units Example 19-89
Managing Distribution Sets 19-90
Defining Distribution Sets 19-91
Managing Profile Options 19-92
Profile Options Settings 19-93
Managing Lookups 19-96
Managing Descriptive Flexfields 19-99
Managing Asset Keys 19-103
Practice 19-11 Overview: Provisioning Data Roles to the User Account 19-105
Summary 19-106
xxvii
20 Configuring Oracle Expenses
Objectives 20-2
Rapid Implementation Overview 20-3
Managing Expenses System Options 20-4
Expenses System Options Concepts 20-5
User Options for Expense Report 20-6
Corporate Options for Expense Report 20-7
Processing Options for Expense Report 20-9
Using Printable Expense Reports 20-10
Assigning a Printable Expense Report to an Existing Business Unit 20-11
Practice 20-1: Managing System Options 20-12
Setting Up Expense Report Templates 20-13
Expense Report Template Concepts 20-14
Defining Expense Report Templates Considerations 20-15
Defining Default Expense Report Templates 20-16
Inactivating Expense Report Templates 20-17
Defining Default Expense Report Templates 20-18
Expense Types Overview 20-19
Create Expense Type 20-20
Itemize Expense Types 20-21
Set Up Project-Enabled Expense Types 20-23
Enable Tax Classification Code 20-24
Modifying Expense Account Segments 20-25
Practice 20-2 Overview: Creating an Expense Report Template 20-26
Configuring Expense Approval Rules Overview 20-27
Expense Approval Rules Overview 20-28
Setting Up Expense Approval Rules 20-29
Manage Expense Report Approval Rules Tasks 20-30
Manage Expense Report Approval Rules 20-31
Defining Conversion Rates 20-34
Selecting a Business Unit 20-35
Defining Conversion Rates and Conversion Rate Types 20-36
Specifying a Conversion Rate Policy 20-37
Practice 20-4 to 20-5 Overview: Viewing a Conversion Rate Policy Warning and
Error 20-38
Define Expense Policies and Rules 20-39
Managing Policies by Expense Category 20-40
Enforcing Expense Policies 20-41
Common Components of Category-Based Expense Policies 20-42
Mandatory Setup Tasks for Category-Based Expense Policies 20-44
xxviii
Practice 20-6 to 20-9: Setting Up Expense Policies and Rules 20-45
Tasks for Setting Up a Mileage Policy 20-46
Setting Up a Mileage Policy 20-47
Creating a Mileage Policy 20-48
Specifying Eligibility Rules 20-49
Specifying Mileage Rate Determinants 20-50
Defining the Add-On Rates 20-51
Practice 20-10: Setting up a Mileage Expense Policy 20-53
Tasks for Setting Up an Entertainment Policy 20-54
Setting Up an Entertainment Policy 20-55
Creating an Entertainment Policy 20-56
Practice 20-11 : Setting up an Accommodations Expense Policy 20-60
Setting Up Corporate Cards 20-61
Configuring Credit Card Data 20-62
Overview of Corporate Card Transaction Processing 20-63
Configuring Corporate Card Issuers 20-65
Managing Corporate Card Programs 20-67
Configuring Corporate Card Programs 20-68
Downloading Corporate Card Transaction Files 20-69
Uploading Corporate Card Transactions with Encrypted Corporate Card Numbers
20-70
Practice 20-12 to 20-13: Setting Up and Creating Corporate Card Programs 20-71
Specifying a Corporate Card Usage Policy 20-72
Practice 20-14: Setting Up a Corporate Card Usage Policy Warning 20-75
Uploading Corporate Card Transactions with Encrypted Corporate Card Numbers
20-76
Processing Expense Reports Containing Both Pay 20-77
Payment Options for Corporate Transactions 20-78
Processing Corporate Issuer Payment Requests for Company Pay Transactions
20-80
Creating Corporate Card Issuer Payment Requests Transactions 20-81
Settings for Corporate Card Issuer Payment Requests 20-82
Processing Corporate Card Issuer Payment Requests for Company Pay
Transactions 20-83
Populating Payables Open Invoice Interface Tables 20-84
Creating Corporate Card Issuer Payment Requests 20-85
Handling Processed and Rejected Expense Reports 20-86
Individual Pay 20-87
Individual Pay Payment Option 20-88
Accounting for Corporate Card Transactions 20-90
Accounting for Corporate Card Transactions: Individual Pay 20-92
xxix
Accounting for Corporate Card Transactions: Both Pay 20-93
Accounting for Corporate Card Transactions: Company Pay 20-94
Setting Up Receipt Management Policies 20-96
Specifying Receipt Management Policies 20-97
Specifying Receipt Management 20-98
Specifying Type of Receipts 20-99
Granularity of Receipt Requirements 20-100
Specifying Receipt Requirements 20-101
Creating Expense Report Receipt and Notification Rule 20-102
Practice 20-15: Creating Receipt and Notification Rules 20-103
Setting Up Travel 20-104
Integrating with GetThere 20-105
Benefits of Integrating with Travel Partners 20-106
Benefits of Setting Up Travel Integration 20-107
Setting Up Travel Integration 20-108
Configuring Travel Partner and Travel Sites 20-109
Scheduling the Import Travel Itinerary Process 20-110
Assigning a Travel Administrator 20-111
Setting Up Optional Travel Tasks 20-112
Enabling Automatic Creation of Trip-Based Expense Reports 20-113
Setting Up Centrally-Billed Travel Cards 20-114
Setting Up Travel Itinerary Validation Rules 20-115
Setting Up Centrally-Billed Travel Cards 20-116
Third-Party Expense Reimbursements 20-117
Processing Third-Party Expense Reimbursements 20-118
Setting Up Third-Party\ Expense Reimbursements 20-121
Exporting Data from Expenses to a Third-Party Application 20-122
Using Mobile Devices to Increase Productivity 20-123
Setting Up the Mobile Device Application 20-126
Enabling Expenses Mobile Application 20-127
Using the Mileage Tracker 20-128
Submitting an Expense Report from a Mobile Device 20-129
Mobile Expense Lines That Cannot Be Included in an Expense Report 20-130
Mobile Expense Report with a Status of Saved 20-131
Mobile Expense Report with a Status of Pending Manager Approval 20-132
Summary 20-133
xxx
11
Configuring Oracle Fusion Tax
Copyright © 2016, Oracle and/or its affiliates. All rights reserved.

Objectives
After completing this lesson, you should be able to:

• Describe Oracle Fusion Tax as a centralized tax solution.
• Use the rapid implementation spreadsheets.
• Explain how tax is calculated on transactions.
• Explain foundation tax configuration.
• Explain advanced tax configuration.
• Explain tax reporting configuration.
• Test and validate your tax configuration.
Oracle Financials Cloud: Financials Implementation for R11 11 - 2

Understanding Oracle Fusion Tax
Oracle Fusion Tax provides a single-point solution for managing your transaction and
withholding tax requirements. In the Define Taxes for Rapid Implementation task list in the
Setup and Maintenance work area, set up your entire tax configuration.
Oracle Fusion Tax
• Provides a single solution for global tax needs.
• Uniformly delivers tax services to all Oracle Fusion application business flows through
one application interface.
• Provides a single source of truth for tax configuration and reporting.
• Provides a single integration point for third-party content providers.
Note: Third-party integration is not supported in the cloud.

You can model your taxes according to the needs of the following local and international tax
requirements:
• Both simple and complex country-specific tax legislation.
• Cross-border transactions, including exports and Intra-European Community
transactions.
• Intercompany transactions.
• Local compliance requirements for recording and reporting.
• Continual changes to tax legislation, such as new taxes, local law changes, special tax
rates, and special exceptions for products and customers.
You can manage the entire configuration and maintenance of tax content from a single Tax
application. Using one application ensures a uniform tax setup across applications, with a
centrally managed system of automated tax services and control over manual intervention
and update.

Practice 11-1 Overview: Viewing Calculated Tax on a
Payables Transaction Demonstration
This demonstration covers viewing calculated US sales tax on a
Payables invoice.

Tasks to Configure Oracle Fusion Tax
• Configuration Owner Tax Options: Optional. If you do not define configuration owner tax
options at payables or purchasing transaction time, the predefined event class mapping
for that event is considered.
• Tax Regimes: Required.
• Taxes: Required. When setting up your taxes, specify tax rule default values that apply
to the majority of your transactions.
• Tax Statuses: Required. Tax statuses do not depend on tax jurisdictions. You can create
tax statuses from tax rates.
• Tax Jurisdictions: Required.
• Tax Rates: Required.
• Party Tax Profiles: Optional. You can edit the tax profile that was automatically created
when the party record was created, but it is not required.
• Tax Rules: Optional. When setting up your taxes, specify tax rule default values that
apply to transactions in the absence of any tax rules. Use tax rules to configure
exceptions.
• Tax Reporting: Optional. Set up your tax reporting configuration based on your tax
reporting needs.
• Tax Simulation: Optional. Use the Tax Simulator to test your tax configuration.

Define Taxes for Rapid Implementation Task List
The primary mechanism for rapid implementation is for you to

create tax setup using a spreadsheet upload.
Navigate to: Setup and Maintenance > Define Taxes for Rapid Implementation.
Use the:
• Define Taxes for Rapid Implementation task list to access the required and most
frequently used setup tasks for implementation scenarios observed in practice.
• Define Tax Configuration task list for the ongoing maintenance of your tax setup and
those tax configurations that cannot be set up using the rapid implementation approach.

Rapid Implementation Spreadsheets
• Use the following workbooks to streamline the organization

of data:
– Tax Configuration Workbook
– Tax Implementation Workbook
• Use the spreadsheets to quickly set up tax details for
managing taxes on transactions.
Tax Configuration Workbook Tax Implementation Workbook
The Tax Configuration Workbook and the Tax Implementation Workbook streamline the
organization of data as well as to include additional information required for configuring tax.
For better data grouping, data related to tax rules is now moved from the tax configuration
workbook to the tax implementation workbook.

Tax Configuration Workbook
Use the tax configuration workbook to upload your common and

organization-specific tax setups.
Workbook Name Worksheets
Tax Configuration • Tax Regimes
• Taxes
• Tax Rates
• Tax Recovery Rates

Tax Implementation Workbook
Workbook Name Worksheets

Tax Implementation • Tax Rules
• Tax Exemptions
• Party Classifications
• Tax Reporting Codes
• Tax Payer Identifiers
• Product Fiscal Classifications
• Payables Tax Determinant Defaults
• Tax Regime Subscriptions
• Tax Registrations
The Implementation Workbook includes these new release 11 worksheets:

• Tax Exemptions: Create tax exemption configuration for third parties and third-party-
sites.
• Party Classifications: Associate party fiscal classifications with the parties.
• Tax Reporting Codes: Create tax reporting codes and tax reporting types for
downstream use in tax reports.
• Tax Payer Identifiers: Define specific taxpayer identifiers for third parties and third party
sites for purposes of reporting.
• Product Fiscal Classifications: Create product fiscal classifications for subsequent use in
tax rules having a product inventory linked determining factor class.
• Tax Rules: Define rules that look for a result for a specific tax determination process,
such as determining place of supply or tax registration, in relation to a tax on a
transaction.
• Payables Tax Determinant Defaults: Utilizes a segment of an existing chart of accounts
to automatically default a specific intended use value on a Payables invoice and define
a tax determination rule based on the intended use value that is defaulted.

Note: The Tax Account Assignments worksheet was removed to avoid possible
inconsistencies in the Ledger Account assignments. You can continue to setup the Ledger
Accounts against a Tax, Tax Rate, and Tax Jurisdiction directly from the corresponding
pages.

Tax Setup Spreadsheets
Task Spreadsheet to Use

Manage Tax Regimes • Manage Tax Regimes
• Manage Tax Regimes Subscriptions
Manage Taxes • Manage Taxes
• Manage Tax Accounts
Manage Tax Rates and Tax • Manage Tax Rates
Recovery Rates • Manage Tax Rate Tax Accounts
• Manage Tax Recovery Rates
• Manage Tax Recovery Rate Accounts
Manage Tax Rules • Manage Tax Rules
Use individual tax setup spreadsheets inside the applicable tax setup spreadsheet templates
to maintain your tax configuration.

Define Tax Configuration Task List
Navigate to: Setup and Maintenance > Define Tax Configuration.

Use the Define Tax Configuration task list or search for task directly for ongoing maintenance
of your tax setup or to set up specific areas to supplement configuration previously created
using the Define Taxes for Rapid Implementation task list.
The Define Tax Configuration task list is logically defined with:
• Core tax configuration tasks: Use these tasks to create a basic tax configuration for
each of your tax regimes.
• Validation configuration task: Use this task to verify tax configuration for taxes that are
enabled for transactions, for simulation, or for both by processing real-time transactions
without affecting active data.
• Advanced setup tasks: Use these tasks to configure tax setup that addresses more
complex tax requirements, such as exceptions to standard tax calculations.
Tax Configuration Task List includes these new tasks:
• Manage Tax Registrations: Use to capture:
- Tax registrations, taxpayer identifiers, and withholding tax registration information
assigned by the tax authorities to customers or suppliers.

- Additional information related to validation digit for the taxpayer identifier.
- Party details such as party name and party number are also displayed to establish
the context of the party for whom the tax registrations are being created or edited.
• Manage Tax Exemptions: Use this task to create or edit details related to Tax
Exemptions and Withholding Tax Exemptions.
Note: You can assign these tasks to different job roles based on the control and security
policies of your organization, similarly to other tax tasks.

Define Advanced Tax Configuration Task List
Navigate to: Setup and Maintenance > Define Tax Configuration > Define Advanced Tax
Configuration.
Set up required tasks that have not been automatically created or created during previous
task setup, such as tax geographies, tax statuses, and tax jurisdictions. You can also manage
the setup of a more complex tax configuration using the Define Advanced Tax Configuration
tasks.

Oracle Fusion Tax Architecture
Oracle Fusion Tax architecture has a centralized data model that provides a single source of
truth for transaction and withholding tax information. It consists of five tiers:
1. Tax Configuration - Foundation: Represents the tax data that you set up for each tax
regime and tax that your company is subject to. A tax authority administers the taxes of
a tax regime. Each tax within a tax regime comprises a certain number of elements
including tax statuses, tax jurisdictions, tax rates, and if applicable, tax recovery rates.
2. Tax Determining Factors: Identifies the factors that participate in determining the tax on
an individual transaction. Tax determining factors can be classified into the parties
involved in a transaction, the products transacted, the places involved in a transaction,
and the process or kind of transaction that takes place. Tax determining factors are the
building blocks for tax rules.

3. Tax Configuration - Advanced: Consists of the defaults and tax rules used to determine
and calculate tax on a transaction. Create tax rules by translating the tax regulations of a
tax authority into determining factors and tax conditions. For each transaction line, the
tax determination process uses the defaults or tax rules to determine the applicable tax
regimes and taxes, place of supply, tax registration, tax rate, taxable basis to use in tax
calculation, and any tax recovery to the extent applicable.
4. Services: Consists of calculating tax amounts, determining appropriate tax recovery
amounts, exporting and importing designated tax setups, and integrating with third-party
vendor products for transaction tax data upload, calculation, and reporting
considerations where elected.
5. Tax Management: Maintains all of the tax information pertaining to each transaction for
use in tax reporting.
The configuration repository contains all of your tax setup that you can share across multiple
legal entities and multiple business units.
The tax record repository stores the transaction and withholding tax events and attributes for
your country-specific reporting requirements.
These tiers are discussed in further detail throughout this lesson.

Tax Requirements Organization
To determine how to set up your tax configuration, you must:

• Analyze your transaction and withholding tax requirements.
• Make key decisions when you analyze your transaction and withholding tax
requirements.
• Use Oracle Fusion Tax and other Oracle Fusion applications to implement a solution.

Foundation Tax Configuration
Foundation tax configuration components consist of:
Use Oracle Fusion Tax to set up and maintain your transaction and withholding tax
requirements in all geographic locations where you do business. Foundation tax configuration
refers to a collection of tax setup that you use to satisfy your transaction and withholding tax
requirements. It is the minimum required configuration to calculate tax.
At transaction time, Oracle Fusion Tax uses your tax configuration to determine the taxes that
apply to each transaction and to calculate the tax amounts.
Complete the following setup tasks to create a basic tax configuration for each of your tax
regimes by using the applicable spreadsheets or user interfaces:
• Manage Tax Regimes
• Manage Taxes
The following prerequisite setups must be completed for minimum tax configuration:
• First parties, such as legal entities and business units.
• Master geographies.
• Ledger and accounts.

Examples of Foundation Tax Setup
Use Sales and Use Tax Canada GST and HST GB VAT
Regime
US Sales and Use Tax CA GST and HST GB VAT

Taxes
State Sales Tax

CA GST
County Sales Tax GB VAT
CA HST
City Sales Tax
Jurisdictions
IL State Sales Tax Alberta

NV State Sales Tax British Columbia United Kingdom
NV Reno City Tax Nova Scotia
GST Standard Standard

Statuses
Standard GST Zero Reduced

Exempt HST Reduced Exempt
GST Exempt Zero
Standard Rate
IL Standard Rate CA GST Standard Rate
Reduced Rate
Rates
IL Exempt Rate CA GST Zero Rate

Exempt Rate
NV Standard Rate CA HST Reduced Rate
Zero Rate
These data examples are introduced to illustrate the foundation transaction tax configuration
and may not represent the complete tax setup for the country.
How you define your configuration depends on your transaction tax and withholding tax
requirements.

Setting Up Foundation Tax Components
Minimize your effort in creating setup using:

• Defaulting.
• Data-driven controls.
Use defaulting to enter your data once and use the defaults that appear on the subordinate or
child records where applicable. For example, many values you enter on the tax regime appear
as defaults on each tax that is associated with that tax regime. Generally, you can override
the data where necessary if the defaulted value is not correct.
Use data-driven controls to enable and control how tax functionality works. For example, you
are required to set up tax recovery for value-added tax (VAT) processing. Select the Allow tax
recovery option on the tax record so you can set up tax recovery rates for this type of tax.

Configuration Owners and Options
Set up configuration owner tax options for a combination of

configuration owner and application event class. Configuration
owners consist of:
• Tax configuration owner: A business unit, legal entity, or the
global configuration owner that owns the data.
• Global configuration owner: An abstract owner that is used to
define the owner of content that can be shared by any
business unit and first-party legal entity.
Configuration owner tax options let a configuration owner update default tax options on
transactions that belong to a specific application event class. At transaction time, Oracle
Fusion Tax uses the tax option settings of the configuration owner and application event class
instead of the default settings.
This is the appropriate level to:
• Define a business unit or legal entity as a configuration owner.
• Subscribe to a global configuration option.
• Turn tax calculation on or off.
• Define the regime determination method.
• Define tolerances.
• Enforce controls.
• Enable withholding tax.

Tax Regimes
Set up tax regimes in each country and geographical region

where you do business and where a separate tax applies. A tax
regime associates a common set of:
• Default information.
• Regulations.
• Fiscal classifications.
• Registrations, to one or more taxes (optionally).
For example, in the US create a US Sales and Use Tax regime to group taxes levied at the
state, county, and city levels. For the UK create a tax regime for GB VAT.
• Share tax content among legal entities and business units.
• Enable partner integration.
• Define reporting tax authority and collecting tax authority.
• Define features to influence setup task list.
Note: Partner integration is only available on-premise.

Taxes
Set up details for the taxes of a tax regime. Each separate tax in
a tax regime includes records for the:
• Tax statuses.
• Tax rates.
• Tax rules that are used to calculate and report on the tax.
Oracle Fusion Tax applies as defaults tax information from the tax regime to each tax that you
create under a tax regime. You can modify this information at the tax level according to your
needs, as well as add additional defaults and overrides.
For tax rule defaults, specify values that apply to the majority of your transactions. Use tax
rules to configure exceptions to the tax rule defaults.
For example, for US Sales and Use Tax define a tax for each state, county, and city. For the
UK, set up a tax for GB VAT.

You can enable a tax for simulation or for transactions only after you have completed all of the
required setup. Minimum setup for a country-level standard tax with no recovery and always
applicable includes entering:
• Required fields in the Create Tax or Edit Tax pages.
• Direct tax rule defaults with the default values for the direct tax rule types, which include
place of supply, tax applicability, tax registration, tax calculation formula, and taxable
basis formula.
• Indirect tax rule defaults with the default values for the indirect tax rule types, which
include tax jurisdiction, tax status, and tax rate.
• Tax liability account.
You can also use the rapid setup spreadsheets to create your minimum tax configuration.
However, you can enable tax only for simulation or transactions on the Edit Tax page.
• Enable controls to influence tax behavior.
• Specify defaults that are commonly applicable.
• Define default tax applicability.
• Specify party registration defaults.

Tax Statuses
Define a tax status to group one or more tax rates that are the
same or similar in nature. Define a tax status under:
• Tax
• Configuration Owner
A tax status is the taxable nature of a product in the context of a transaction and specific tax
on the transaction.
For example, for US Sales and Use Tax create a tax status for standard and exempt. For the
UK set up separate tax statuses for standard, zero, exempt, and reduced rates.
• Group common tax rates.
• Drive reporting needs.
• Allow manual override to tax rates.

Tax Jurisdictions
Set up tax jurisdictions where a specific tax authority levies a tax

for:
• Geographic regions.
• Tax zones.
A tax jurisdiction specifies the association between a tax and a geographic location. At
transaction time, Oracle Fusion Tax derives the jurisdiction or jurisdictions that apply to a
transaction line based on the place of supply. You must set up at least one tax jurisdiction for
a tax before you can make the tax available on transactions.
For example, for US Sales and Use Tax create a county jurisdiction for every county in the
parent geography type of State and in the parent geography name of California. For the UK,
create a tax jurisdiction for the country of United Kingdom.
• Define location-based tax rates.
• Define tax accounts and tax reporting codes as appropriate.

Tax Rates
Set up tax rates for:

• Tax statuses: Set up a tax rate record for each applicable tax
rate that a tax status identifies.
• Tax jurisdictions: Set up tax rate records to identify the tax
rate variations for a specific tax within different tax
jurisdictions.
For example, for US Sales and Use Tax create a tax rate for each tax jurisdiction (jurisdiction-
based rates). For the UK, set up separate tax rates for standard, zero, exempt, and reduced
(tax status-based rates). In addition to jurisdiction-based tax rates, at least one non-
jurisdiction based default tax rate must be defined for each tax in order to enable a tax for
simulation, transactions, or both simulation and transactions. Thus, in practice, both
jurisdiction-based tax rates and non-jurisdiction based tax rates are typically defined for each
country and both jurisdiction-based default tax rates and non-jurisdiction based default tax
rates are required in a given country.
• Define tax rates by effective periods.
• Specify tax account variations as appropriate.
• Assign default tax recovery rates.

Tax Recovery Rates
• Set up tax recovery rate codes for the recovery types

identified on the taxes within a tax regime.
• A tax recovery rate code identifies the percentage of recovery
designated by the tax authority for a specific transaction.
For example, organizations that produce VAT-applicable goods and services are allowed to
recover 100% of the VAT they pay on typical purchases. They would use a default 100%
recovery rate.
Organizations, such as financial institutions who create services that are exempt from VAT,
are not able to recover VAT on their normal purchases. They would use a default 0% recovery
rate.

Practice 11-2 Overview: Creating a US Sales Tax Using
the Tax Configuration Workbook
This practice covers the following topics:
• Creating tax regime.
• Creating a tax.
• Defining a tax rate.
• Enabling a tax for simulation.

Practice 11-3 Overview: Creating a VAT Tax Using the
Tax Configuration Workbook (Optional)
• Creating tax regime.
• Creating a tax.
• Defining a tax rate.
• Defining a tax recovery rate.
• Enabling a tax for simulation.

Setting Up Party Tax Profiles
Set up tax profiles for the following parties

involved in your transactions:
• First parties: All legal entities, legal
reporting units, and business units
in your organization that have a
transaction tax requirement.
• Third parties: Your customers and
suppliers and their locations and banks.
• Tax authorities: Parties that administer
tax rules and regulations.
Navigate to: Setup and Maintenance > Manage Party Tax Profiles.
A tax profile is the body of information that relates to a party's transaction tax activities. A tax
profile can include main and default information, tax registration, tax exemptions, party fiscal
classifications, tax reporting codes, configuration options, and service subscriptions.
Tax Registrations
A tax registration contains information related to a party's transaction tax obligation with a tax
authority for a tax jurisdiction where it conducts business. In some cases, a single location
may need to file multiple registrations. Set up tax registrations for your first-party legal
reporting units and your third-party customers and customer sites and suppliers and supplier
sites.

Tax Exemptions
A tax exemption is a full or partial exclusion from taxes or a surcharge, based on certain
criteria given by the tax legislation. Many countries allow tax exemptions when certain parties
deal with certain categories of goods and services. Define tax exemptions for the combination
of customer and customer site and items for a period of time. Use rate modifiers, such as
discount or surcharge percentage or special rate percentage to map the preferential or special
tax rate applicability.
Party Fiscal Classifications
Party classification defines the different types of party. Use party classifications to define party
types for tax determination and tax reporting purposes.
Tax Reporting Codes
Tax reporting types capture additional tax information on transactions for your tax reports.
You can use tax reporting types for your internal reporting needs and to fulfill country-specific
reporting requirements. Create tax reporting codes for a tax reporting type to provide
additional granularity for tax reporting.
Configuration Options
The legal entities and business units in your organization are each subject to specific sets of
tax regulations as designated by the tax authorities where you do business. Use configuration
options to associate legal entities and business units with their applicable tax regimes.

Tax Classification Code
NEW
• A new attribute in the Controls and Defaults section.
• Default used on transactions based on the hierarchy specified
in the setup of the tax options.
Navigate to: Setup and Maintenance > Manage Party Tax Profiles > Create > Controls and
Defaults > Tax Classification Code.
• The value you set for this attribute is used as a default on transactions based on the
hierarchy specified in the setup of your tax options.
• When the hierarchy in the tax options is set for supplier or supplier site in payables or
procurement or customer or customer site in receivables or project billing, the value you
set in the Tax Classification Code is used as a default on the transaction, provided there
are no preexisting values available from the party account site.

Setting Up Advanced Tax Configuration
Create a:
• Simple tax model using tax rule defaults that you define in
setting up your foundation tax configuration.
• Complex tax model using tax rules that consider each tax
requirement related to a transaction before making the final
tax calculation.
When running the tax determination process, Oracle Fusion Tax evaluates, in order of priority,
the tax rules that you have defined against the foundation tax configuration setup and the
details on the transactions.
If a tax rule is:
• Successfully evaluated, the result associated with the rule is used.
• Not successfully evaluated, the next rule is evaluated until either a successful evaluation
or a default value is found.
In summary, note that tax rules take precedence over default values in the tax determination
process.

Tax Rule Configuration
Rule Defaults Advanced Tax Configuration
• Define applicability of multiple taxes.
Applicability
Applicability
• Ensure correct processing of cross-border transactions based on
Place of Supply place of supply and applicability rules definitions.
• Define registration rules to drive self-assessment, rounding, and tax
Registration registration number derivation.
Define tax status determination rules to narrow down to specific
Status
tax rate derivation.
• Define rate determination rules.
Rate
• Define third party or third-party site level tax exemptions using a

Rate discount on a tax rate or a special rate.
• Define product exceptions using a discount on a tax rate or a
special rate.
Calculation
Define taxable basis formula using assessable value, tax on tax

Taxable Basis
compounding, and charges.
Tax Calculation Define tax calculation formulas to add or subtract prior tax.
Recovery
Define recovery rate determination rules using accounts,

Tax Recovery
intended
use, and product classifications.
Advanced tax configuration consists of tax rules to define exceptions to the default results.

Key Building Blocks of Tax Rules
Determining factors are the key building blocks of the tax rules. Conceptually they fall into four
groups:
• Party
• Process
• Place
• Product
The determining factors represent the tax-decision criteria that are passed at transaction time
derived from information about the transaction or associated with the transaction.
They are used within tax rules logic to determine the conditions under which specific tax rules
apply to a specific transaction.

Tax Determination Process
The tax determination process consists of the following steps:

• Determine Applicable Tax Regimes and Candidate Taxes.
• Determine Place of Supply and Tax Jurisdiction.
• Determine Tax Applicability.
• Determine Tax Registration.
• Determine Tax Status.
• Determine Tax Rate.
• Determine Taxable Basis.
• Determine Tax Calculation.
• Determine Tax Recovery (if applicable).
The tax rules that are part of the tax determination process are organized into rule
types. Each rule type identifies a particular step in the determination and calculation of taxes
on transactions.
You must either provide a default value for each rule type or set up a tax rule for each rule
type to determine and calculate taxes.
The tax determination process evaluates transaction header and line information to derive tax
lines for taxes applicable to the transactions.

Step 1: Determine Applicable Tax Regimes and
Candidate Taxes
Process Name Activities Components Used

and Rule Type (if
applicable)
Determine Applicable • Determine the first • Party tax profiles

Tax Regimes and party of the • Regime
Candidate Taxes transaction. determination set
(preliminary step) • Identify location types • Configuration
to derive candidate tax options
regimes.
• Identify tax regimes.
• Identify taxes using
subscriber
configuration option.
Tax regimes are considered based on geography and subscription. Either a country or zone
associated with the tax regime definition must be the same as the country or zone identified
from the location that evaluates to true on the regime determination set of the first party of the
transaction. In addition, the tax regime must have a subscription to the applicable
configuration owner.
After the tax determination process identifies the appropriate tax regime or regimes, the list of
candidate taxes can be evaluated based on the configuration option setting of the first party in
the tax regime subscription definition.
Options are:
• Common Configuration: Consider all taxes with the configuration owner of global
• Party Specific Configuration: Consider all taxes with the first party or business unit as

• Common Configuration with Party Overrides: Consider all taxes with the first party or
business unit and the global configuration owner as configuration owner. If a tax is
defined by both the first party or business unit and the global configuration owner, then
the application uses only the tax defined by the first party or business unit.
• Parent First Party Configuration with Party Overrides: Consider all taxes with the first
party and the parent first party as configuration owner. If a tax is defined by the first party
and the parent first party, then the application uses only the tax defined by the first party.

Steps 2 and 3: Determine Place of Supply and Tax
Jurisdiction and Tax Applicability

and Rule Type (if
applicable)
Determine Place of Supply • Identify location type. • Tax rule: Determine

and Tax Jurisdiction • Identify tax jurisdiction. Place of Supply or
the default value for
Place of Supply for
the tax
• Tax jurisdictions
Determine Tax Applicability • Consider candidate Tax rule: Determine Tax
taxes from the previous Applicability and the
process. default value for
• Eliminate taxes based applicability for the tax
on tax applicability rule
of each tax.
Tax applicability of each candidate tax is determined based on:

• Direct rate determination.
• Place of supply.
• Tax applicability.
• Tax jurisdiction.
The first step in tax applicability is to process any direct rate rules defined for a tax regime,
configuration owner, and candidate taxes.
• If a direct rate rule evaluates to true, then place of supply is processed for this
transaction or withholding tax. In addition the tax is applicable and the tax status and tax
rate defined for the direct rate rule are used in the tax calculation.
• If a direct rate rule does not evaluate to true for this tax regime, configuration owner, and
tax, then the tax applicability rules are processed next. After a tax is found applicable
based on an applicability rule or a default value, the process verifies the place of supply
and associated tax jurisdiction. This is required except in the cases of migrated taxes.

The place of supply process identifies the applicable location type and associated tax
jurisdiction where the supply of goods or services is deemed to have taken place for a specific
tax. If the tax determination process cannot find a tax jurisdiction for the location that
corresponds to the place of supply location type, then the tax does not apply and it is removed
as a candidate tax for the transaction.
For example, the place of supply for UK value-added tax (VAT) on goods is generally the
ship-from country. Thus, the place of supply of a sale or purchase within the UK is the UK
itself. However, if a UK legal entity supplies goods from its French warehouse to a German
customer, then the place of supply does not find a jurisdiction for UK VAT in France, and
therefore UK VAT does not apply.

Step 4: Determine Tax Registration

and Rule Type (if
applicable)
Determine Tax Registration Determine the party type • Tax rule: Determine
to use to derive the tax Tax Registration or
registration for each the default value for
applicable tax. the tax.
• Party tax profile
• Tax registration
This process determines the party whose tax registration is used for each tax on the
transaction and, if available, derives the tax registration number. Tax registration is also
important for:
• Triggering the application of self-assessed taxes.
• Driving tax point basis variations.

Step 5: Determine Tax Status

and Rule Type (if
applicable)
Determine Tax Status • Consider tax statuses Tax rule: Determine Tax
of applicable taxes. Status or the default
• Consider tax status value defined for the tax
rules or use default
tax status.
This process determines the tax status of each applicable tax on the transaction. If the
process cannot find a tax status or no default value is defined for an applicable tax, then an
error occurs and Oracle Fusion Tax displays an error message.

Step 6: Determine Tax Rate
and Rule Type (if
applicable)
Determine Tax Rate • Consider tax rates of each • Party tax profiles
applicable tax status of each • Regime determination
applicable tax. set
• Determine the tax rate code to • Configuration options
use for the tax status for each
applicable tax.
• Determine the tax rate
percentage or per unit tax
amount for a quantity-based
tax.
• If a tax exception applies,
update the tax rate for each
applicable tax.
• If a tax exemption applies,
update the tax rate.
This process determines the tax rate code for each tax and tax status derived from the
previous process. First, Oracle Fusion Tax looks for a tax rate based on a rate code and tax
jurisdiction. If these elements are not found, then Oracle Fusion Tax looks for a tax rate
without any tax jurisdiction.
If applicable, the tax rate is then modified by any exception rate or tax exemption that applies.
The result of this process is a tax rate code and tax rate for each applicable tax.

Simplified Tax Line Override Setup
NEW
Minimum setup options simplify the Tax Rate override process.
• No restrictions when you override the tax rate percentage on
a transaction.
• Change to calculated tax amount adjusts the taxable basis of
the transaction line.
• Impacts other tax lines option.
Navigate to: Setup and Maintenance > Manage Configuration Owner Tax Options > Create.
The tax determination process recalculates the taxes on all other tax lines on the same
transaction when there is an override of automatically calculated tax lines on transactions.
Use this option in conjunction with the Transaction Tax Line Override profile option and the
Allow override of calculated tax lines option for the configuration owner tax options to allow
you to update calculated tax lines at transaction time.
Tax setup relating to Tax Rate overrides is now simplified with minimum setup options. These
options were removed at the Tax Rate level to simplify the process:
• Allow Ad Hoc Tax Rate
• Adjustment for Ad Hoc Tax Amounts
You cannot override offset tax lines. However, you can update the tax line calculated for the
original tax. When you update the tax rate percentage or amount or when you cancel the tax
line, the corresponding tax line for the offset taxes is updated.
Note: These setup changes apply only to overriding tax rate percentage and tax amount.
When you setup overriding calculated tax lines, you must enable overrides to tax details on a
transaction.

Step 7: Determine Taxable Basis

and Rule Type (if
applicable)
Determine Taxable Basis • Identify the taxable • Tax rule: Determine

basis formula for each Taxable Basis or the
applicable tax. default values for the
• Determine the taxable tax
basis and • Taxable basis
compounding details formula
based on the taxable • Tax inclusive
basis formula. settings at the tax
• Consider the tax rate level
inclusive settings of
the applicable taxes.
This process determines the taxable basis for each tax rate code. Depending on the tax rate
type, the taxable basis is amount-based or quantity-based. The tax determination process
typically determines the tax by applying the tax rate to the taxable basis amount.
In some cases, the taxable basis either can include another tax or is based on the tax amount
of another tax. Define taxable basis formulas to manage these requirements.

Step 8: Determine Tax Calculation

and Rule Type (if
applicable)
Calculate Tax • Identify the tax • Tax rule: Calculate

calculation formula. Tax Amounts
• Calculate taxes using • Calculate tax
the tax calculation formula, if applicable
formula. • Tax rounding rule
• Perform applicable tax from tax registration,
rounding. party tax profile, or
tax
• Configuration owner
tax options
This process calculates the tax amount on the transaction. In most cases, the application
computes the tax amount by applying the derived tax rate to the derived taxable basis. In
some exceptional cases, the tax amount is altered by adding or subtracting another tax.
Define tax calculation formulas to manage these requirements.

Step 9 (if applicable): Determine Tax Recovery

and Rule Type (if
applicable)
Determine Recovery Rate • Allocate tax amount • Tax rule: Determine

per line distributions. Recovery Rate or
• Determine tax the default value
recovery types. defined for the tax
• Determine tax • Tax recovery rates

recovery rates.
• Determine the tax
recoverable amounts.
• Determine the
nonrecoverable
amount.
This process determines the recovery rate to use on procure-to-pay transactions when the tax
allows for full or partial recovery of the tax amount. The recovery type is defined on the tax
and identifies whether one or two recovery types are available: primary or secondary. For
each tax and recovery type, the application determines the recovery rate based on a tax rule
or default value defined on the tax.
The recovery process impacts the purchase invoice distributions level, tax amounts,
inclusiveness of taxes, and the tax accounting within Oracle Fusion Payables. The resulting
distribution amounts are adjusted as a result of the recovery process.
Examples of recovery rates include:
• For UK manufacturing companies, VAT on normal purchases used for company
business is 100% recoverable.
• For a financial institution that makes VAT exempt only on sales, you are not allowed to
recover any taxes and your recovery rate is zero percent on all purchases.

Setting Up Withholding Tax Configuration
Set up withholding tax using Oracle Fusion Payables or Oracle

Fusion Tax. Which application you use depends on your
withholding tax requirements.
Use:
• Payables withholding tax setup to meet the basic withholding
tax requirements for most countries.
• Oracle Fusion Tax for more complex tax requirements.
Payables withholding tax reports are compatible with both the Payables and Oracle Fusion
Tax withholding tax configurations. The EMEA country-specific withholding reports are
compatible with the Oracle Fusion Tax withholding tax configuration.
Withholding tax configuration in this lesson uses Oracle Fusion Tax setup.

Calculating Withholding Taxes
Withholding tax calculation is based on:

1. Geographic location, such as state, province, or city.
2. Purchases from a supplier across business units.
3. Minimum and maximum taxable and withholding tax amount
thresholds for each document or for all documents in a period
from a supplier.
4. Tax rate schedules for each document or for all documents in
a period from a supplier.
Navigate to: Invoices landing page > Manage Invoices > Search for Supplier: Advanced Corp
> Edit Invoice > Taxes > Withholding Taxes.
View withholding taxes in a separate table on the Edit Invoice page.

Enabling Withholding Tax Configuration
Enable withholding for a business unit or legal entity using:

• Manage Configuration Owner Tax Options task
• Manage Tax Reporting and Withholding Tax Options task.
Navigate to: Setup and Maintenance > Manage Configuration Owner Tax Options > select the
Withholding Tax radio button > Create.
If you enable:
• Withholding tax calculation for transaction taxes, you can turn off withholding calculation
for a specific transaction tax during configuration of transaction taxes.
• Entry of manual withholding tax lines, you can turn off this option for a specific
withholding tax during configuration of withholding taxes.
The Configuration Owner Tax Options page contains a Show tax calculations errors check
box. You can use this option to hide or display calculation related errors on your transactions.

Withholding Tax Regime to Rates
Use withholding tax regime to rates pages to set up your

withholding tax configuration.
Navigate to: Setup and Maintenance > Manage Tax Regimes > select the Withholding Tax
radio button > search for United States > Edit.
When setting up your withholding tax regime, consider the following:
• You must define withholding tax regimes at the country level.
• The Withholding Buckets Level field is used for maintaining the period-based threshold
amounts and period-based rate schedule amounts.

When setting up your withholding taxes, consider the following:
• The Calculation Point field is used to define when the withholding tax should be
calculated. The options are Invoice and Payment.
• The Tax Invoice Creation Point field is used to define when the tax authority invoice
should be created. The options are Invoice and Payment.
• For taxes that have rate schedule tax rates, define the controls, such as whether the
schedule basis is document or period.
• Threshold controls are used to apply minimum, maximum, or both minimum and
maximum limits to taxable amounts or tax amounts. You can also define threshold
controls at the tax jurisdiction level.
• Tax authority details are used to associate the tax authority with the withholding tax. You
can't enable the withholding tax for transactions unless an association exists.
When setting up your withholding tax rates, consider the following:
• Tax rate options include Gross amount rate schedule and Withheld amount rate
schedule, in addition to Percentage. These options enable you to set up rate schedule
details for your withholding tax rate.
• Tax recovery rates aren't applicable to withholding tax.

Withholding Tax Rules
Use withholding tax rules to determine exact withholding tax

applicable to each transaction line.
Navigate to: Setup and Maintenance > Manage Tax Rules > select the Withholding Tax radio
button.
When setting up your withholding tax rules, consider the following:
• Tax determining factors include those factors applicable to withholding tax and don't
include all of those factors applicable to transaction tax.
• Tax rule types include those types applicable to withholding tax and don't include all of
those types applicable to transaction tax.
• Only taxable basis formulas are applicable to withholding tax. No Assessable value is
available as a taxable basis type option.
• Fewer line amount options apply to withholding tax than to transaction tax.

Setting Up Tax Point Basis
Comply with tax regulations by assigning the right tax point basis
for a tax. The value you select determines the event at which the
taxes for an invoice are reported.
The application considers the tax point basis at the first level and,
if the tax point basis is blank, the process moves to the next level
in the hierarchy. The application uses the following order for
processing the tax point basis on a tax line:
• Tax registration rule
• Tax rate
• Tax registration
• Tax
Navigate to:
• Setup and Maintenance > Manage Tax Rules.
• Setup and Maintenance > Manage Tax Rates and Tax Recovery Rates.
• Setup and Maintenance > Manage Party Tax Profiles.
• Setup and Maintenance > Manage Taxes.
The default settlement options you defined for your taxes and tax rates are reflected as the
tax point basis.

Setting Up Delivery-Based Tax Calculation
Navigate to: Setup and Maintenance > Manage Configuration Owner Tax Options > Create.
• Enable the Allow delivery-based tax calculation option for the configuration owner tax
options defined for standard invoices and the relevant configuration owner if you have
specified the tax point basis of Delivery for any tax.
• Specify Receipt as the Report Delivery-Based Taxes on option if your organization
requires the tax recovery for delivery-based taxes to be accounted and reported on
receipt accounting.
- When you specify the Report Delivery-Based Taxes on option as Invoice, the
delivery-based tax is accounted and reported on the invoice, instead of receipt.
- Receipt date or Invoice date refers to the date that should be considered for
calculating the taxes on the invoice.
- The Tax Point Date option is always set to Receipt date if Report Delivery-Based
Taxes on option is set to Receipt.
• If your organization does not require delivery-based tax calculation, no setup changes to
the configuration owner tax options are necessary.

For example, in the configuration owner tax options, your organization specified invoice as to
when to report delivery-based taxes and the tax point date as the receipt date.
Your organization received goods for 1000 EUR from a supplier on February 1, 2015. The
delivery-based tax applicable on that date is 15 EUR. However, no taxes are calculated when
the goods are received because the delivery-based taxes are reported at invoice time.
When an invoice is created on March 1, 2015, the delivery-based taxes are directly captured
on it. Although the tax amount on March 1, 2015 is 20 EUR, it is billed as 15 EUR, which is
the amount applicable on the date when the goods were received. The invoice is treated as a
legal document for reporting the delivery-based tax details to the tax authorities.

Setting Up Transaction Tax Thresholds
Define minimum or maximum tax rate, taxable amount, or tax

amount limits for:
• Tax, if these are evaluated for all transactions to which tax
applies.
• Tax jurisdiction, if these apply to
all purchases and sales that occur in that jurisdiction.
• Tax rule, if these apply only in
certain circumstances.
You can:
• Define tax rate, taxable amount, or tax amount thresholds for taxes and tax jurisdictions.
You can define any or all of these threshold types if these are enforced by the tax
authorities.
• Apply taxable and tax amount thresholds for a transaction line or for the entire
document.
• Define tax rate rules and specify the threshold amounts as result values if tax rate
thresholds are applied only in certain conditions. The same approach applies to the
taxable basis and tax amount thresholds, which you can specify as rule results for
taxable basis and tax calculation rules, respectively.

Calculating Transaction Tax Thresholds
If the tax rate determined for a tax line is:

• Within the range of the minimum and maximum rate
threshold, then it is retained.
• Lower than the minimum value, then it is replaced with 0.
• More than the maximum threshold value, then it is replaced
with the maximum threshold value.
The same approach applies to the taxable and tax amount
thresholds.
During tax calculation:

• If the line amount is inclusive of tax, then the taxable basis and tax amount thresholds
are not considered for the tax lines.
• If you update the transaction tax lines, then the thresholds are not applied on
recalculation. Your updates are retained instead.

Setting Up Tax Box Allocations
Tax box allocation supports definition of tax grouping rules and

complex tax reporting by providing transactional and accounting
information, segregated by tax boxes.
In some countries, companies are often required to submit tax returns in a format that groups
taxable transactions by applying specific grouping rules defined by the tax authorities. In most
cases, the grouping rules are based on transaction domiciliation, transaction type, tax rate,
product type, and tax recoverability.
• Define tax box allocation rules to determine the tax box number under which tax and
taxable amounts of the transaction are reported.
• Run the Tax Allocation Process that assigns transaction tax records to specific tax box
numbers by applying the tax box allocation rules on the transactions. Tax box numbers
are assigned only to the transactions previously selected by the Select Transactions for
Tax Reporting process.
• Run the Tax Allocation Listing Report and Tax Allocation Exceptions Report to verify tax
boxes allocated to the transaction lines, and to check the list of transaction lines that do
not have any tax boxes allocated. Run the Tax Box Return Preparation Report to print
the tax boxes and the details of the transactions associated with each tax box.

Setting Up Tax Reporting Configuration
The global tax reporting feature provides a reporting solution to:

• Capture and report data for country-specific tax reporting
requirements.
• Organize tax report data according to the requirements of
your company and any applicable tax authorities.
Oracle Fusion Tax provides legal, business, and reconciliation reports for tax activity
associated with buying and selling goods and services through Oracle Fusion Payables and
Oracle Fusion Receivables.
You can:
• Produce reports and returns to meet tax reporting requirements for specific countries
and those required for reconciliation and audit of tax calculated on transactions.
• Generate registers with comprehensive information of transactions with tax impact,
which can be used as a basis for creating tax reports required by tax authorities and
meeting the internal reporting needs of the organization.

Setting Up Global Tax Reporting

Reporting and Analysis
Oracle Fusion Tax provides:

• Reporting based on tax point date.
• Central data extraction for tax auditing and reporting.
• Tax reporting by legal entity or VAT group legal entity.
• Multicurrency tax reporting.
• Tax box allocation reporting.
• Tax audit and reconciliation reporting.
• European sales listing.
• Tax reporting for China, France, Italy, Singapore, Spain, UK,
and US.
• Oracle Business Intelligence Publisher reports that you can
modify.
Tax reporting is integrated with Oracle Fusion Tax and supports reporting of tax activities
associated with buying and selling of goods and services. You can access various formats to
satisfy the internal and external reporting needs of tax authorities, auditors, and corporate
stakeholders.

Verifying Tax Configuration
The Tax Simulator is a tool for simulating the tax determination process using your tax setup.
The Tax Simulator lets you preview the workings of your tax configuration before you perform
tax calculations on transactions in a subledger application.
The Tax Simulator also enables you to test new tax configuration in conjunction with existing
tax configuration to preview the resulting tax calculation. The Tax Simulator is a useful tool to
identify the root cause when tax calculation or other tax processing is not what is expected on
active data.
Run taxes from all applicable tax regimes against a sample transaction to verify that your tax
configuration and tax rules were created and applied according to your requirements. You can
either create a sample transaction within Tax Simulator or copy an existing transaction. The
simulated tax calculations do not affect active data.
Use the Manage Simulator Transactions task to access the Tax Simulator.

Practice 11-4 Overview: Using the Tax Simulator to
Test a Receivables Transaction
• Entering a Receivables transaction to test your tax setup.
• Viewing tax lines.

Practice 11-5 Overview: Enabling your Tax for
Transactions
• Entering a Receivables transaction to test your tax setup.
• Viewing tax lines.

Summary
In this lesson, you should have learned to:

• Describe Oracle Fusion Tax as a centralized tax solution.
• Use the rapid implementation spreadsheets.
• Explain how tax is calculated on transactions.
• Explain foundation tax configuration.
• Explain advanced tax configuration.
• Explain tax reporting configuration.
• Test and validate your tax configuration.

12
Configuring Subledger
Accounting

Objectives

• Explain the role of accounting methods in the Create
Accounting process.
• Understand the key features of accounting methods.
• Configure and manage accounting methods.
• Discuss the Create Accounting process.
• Understand manual journal entries and adjustments.
• View the created journal entries.

Oracle Fusion Subledger Accounting: Overview
In Oracle Fusion Subledger Accounting, you can:

• Generate journal entries for subledger transactions.
• Create accounting entries online for a specific transaction
from a transaction view.
• Create accounting for a batch of transactions by submitting an
offline process.
• Create manual adjustment entries.
• Review generated journal entries and projected balances on
views and reports.

The Create Accounting Process
The graphic above illustrates how subledger transactions with financial impact flow from a
subledger to the general ledger using the Create Accounting process.
The Create Accounting process begins with the subledgers completing a transaction.
The Create Accounting process looks for eligible transactions and sends the financial
information to the Oracle Fusion Subledger Accounting engine. The accounting engine
transforms and validates the transactional financial data into a journal with balanced debts
and credits based on the ledger’s accounting method.
The newly created journals are then transferred to the GL Interface table.
The import process then moves the journals to the Oracle Fusion General Ledger journal
entry tables (Batches, Headers, and Lines.)
The posting process creates entries into the GL Balances Cube.
Financial Reports are then generated from the account balances in the GL Balances Cube.

Accounting Methods Overview
Oracle Predefines 3 Accounting Methods:

• Standard Accrual.
• Standard Accrual with Encumbrances.
• Standard Accrual for China.
All primary and secondary ledgers must have a Accounting Method.

Oracle predefines the following 3 Accounting Methods:
• Standard Accrual: This accounting method can be used on most commercial company’s
primary and secondary ledgers using Fusion subledgers.
• Standard Accrual with Encumbrances: This accounting method can be used by public
sector organizations using Fusion subledgers.
• Standard Accrual for China: This accounting method is used exclusively by companies
operating in China.
Some companies may use a mixture of Fusion subledgers and non-Oracle subledgers. In this
case, new accounting rules need to be defined for the non-Oracle subledgers. The accounting
methods that Oracle owns can only be modified to include any new registered non-Oracle
subledgers. However, a best practice is to duplicate a seeded accounting method and then
modify it.
Or some companies may require Fusion subledgers to account for transactions differently
than the seeded methods. In this case, a new accounting method needs to be defined.

Finally, some companies may need a secondary ledger that accounts differently than the
primary ledger. For example, the primary ledger accounts using Generally Accepted
Accounting Practices (GAAP) rules and the secondary accounts using International Financial
Reporting Standard (IFRS) rules. In this case the primary ledger might use the predefined
Standard Accrual accounting method. An accounting method for the IFRS secondary ledger
needs to be defined.

Accounting Event Model Example
The accounting event model is predefined for Fusion subledgers.

The following example shows an accounting event model for
Payables.
Account Methods are built on the accounting event model. Each accounting method includes
the accounting rules for each accounting event.
The accounting event model includes:
• Process Category: Consists of specific event classes and the event types within those
classes. To restrict the events selected for accounting, you can select a process
category when you submit the Create Accounting process. This may be useful for
segmenting events due to processing volumes.
• Accounting Event Classes: Categorizes transaction types and groups event types for
accounting rules.
• Accounting Event Type
- An accounting event type represents a business operation that may have an
accounting impact.
- For accounting event types, specify whether their accounting events have
accounting impact. When the Create Accounting process is submitted, it accounts
only business events that are enabled for accounting.

Payables Accounting Event Model
Event Event Class Event Type Accounting
Category
Payments Future-Dated Payment Matured Yes
Payments Payment Maturity Adjusted Yes
Payment Maturity Reversed Yes
Invoices Credit Memos Credit Memo Adjusted Yes

Credit Memo Canceled Yes
Credit Memo Validated Yes
Invoices Debit Memos Debit Memo Adjusted Yes

Debit Memo Canceled Yes
Debit Memo Validated Yes
Invoices Invoices Invoice Adjusted Yes

Invoice Canceled Yes
Invoice Validated Yes
Payments Payments Manual Payment Adjusted Yes

Payment Adjusted Yes
Payment Canceled Yes
Payment Created Yes

Payables Accounting Event Model
Event Event Class Event Type Accounting
Category
Invoices Prepayment Prepayment Application Adjusted Yes

Applications Prepayment Applied Yes
Prepayment Unapplied Yes
Invoices Prepayments Prepayment Adjusted Yes

Prepayment Canceled Yes
Prepayment Validated Yes
Payments Reconciled Payment Cleared Yes

Payments Payment Clearing Adjusted Yes
Payment Uncleared Yes
Payments Refunds Refund Adjusted Yes

Refund Canceled Yes
Refund Recorded Yes

Accounting Methods Overview
Accounting methods group subledger journal entry rule sets together to define a consistent
accounting convention across all accounting event classes and accounting event types for all
source systems. An Accounting Method is attached to primary and secondary ledgers and is
the 4th C in a ledger configuration.
Accounting Methods include the following required elements:
• Journal Entry Rules Sets: Each subledger application has a unique journal entry rule set
that groups the all rules together for creating journals.
• Journal Line Rules: This rule defines the debit and credit side of the journal. Journal line
rules are attached to journal entry rule sets.
• Account Rules: This rule derives the account or segment for each debit and credit.
Account rules are configured with journal line rules on journal entry rule sets.

Accounting Methods include the following optional elements:
• Mapping Sets: This element maps your 3rd party transactional data to your Oracle
Fusion chart of accounts. It is used on account rules to derive an account combination
or segment.
• Description Rules: This optional rule provides the journal at the header or line level with
transactional detail. For example, it might include an invoice number, customer name,
supplier name. It can provide any information useful for drilldown detail.
• Supporting References: This optional rule can calculate or maintain a balance based on
transactional data source transferred through subledger accounting. For example, you
may maintain a balance of revenue by account manager.
• Conditions: Conditions can be placed on journal line rules, account rules, and
description rules. The rule is only used by Subledger Accounting if the condition is met.
• Custom Formulas: Use their results as sources in subledger accounting rule definitions.
Your goals in defining accounting methods are to:
• Ensure regulatory compliance.
• Facilitate corporate financial reporting.
• Enable audits.
• Facilitate reconciliation to source systems.

How the Different Types of Rules Fit Together
Navigate to: Setup and Maintenance > Select the Financials Offering > Click the Setup button
> Payables > Manage Subledger Journal Entry Rule Set.
This construct is called a journal entry rule set, which determines:
• The debit and credit lines to be generated.
• Which accounts to use.
• How to determine the accounting date.
• The descriptions to stamp on the entries.
• The supporting references to capture on the entries.
Journal line rules and corresponding account rules are mandatory to be able to generate an
entry.
After the accounting rules are all defined, you assign them to a particular event class or type
to determine how a balanced journal entry is generated for that event class or type.
You can define multiple subledger journal entry rule sets for an accounting event class or
accounting event type. A single journal entry is generated per accounting event per ledger
using the line assignments from the journal entry rule set assigned to the accounting event
class or accounting event type.

Managing Accounting Methods and Rules Flow
Following is the order this course takes to demonstrate how to

setup accounting methods and rules:
• Custom Formulas (optional)
• Mapping Sets (optional)
• Account Rules
• Conditions (optional)
• Description Rules (optional)
• Supporting References (optional)
• Journal Line Rules
• Journal Entry Rule Sets
• Subledger Accounting Method
The order this course takes is not necessarily the order that your company takes. However,
some of the rules and rule sets are dependent on each other and need to follow a certain
order.
It is a best practice to create the lowest setting first. For example, since an Account Rule
might need to use a Mapping Set, the Mapping Set needs be defined first.

Accounting Methods: Custom Formulas
• Use results or custom formulas as sources in subledger

accounting rule definitions.
• Facilitates complex derivation logic for subledger journal entry
amounts.
Operators
Navigate to: Setup and Maintenance > Select the Financials Offering > Click the Setup button
> Payables > Manage Custom Formulas.
You can now define custom formulas and use their results as sources in subledger
accounting rule definitions.
This facilitates complex derivation logic for subledger journal entry amounts, accounts, and
descriptions when values are not readily available in the source transaction systems.
Within the formula expressions you can use various operators like addition, subtraction,
multiplication, division, greater than, smaller than, and so on to derive values from standard
source(s) and constants. Calculations can be nested using parenthesis.

Manage Custom Formulas: Explained
• Derive a value that is used in a Journal Entry.

• Used on various accounting rule components.
A custom formula can be used by Subledger Accounting to derive a value that is used in a
journal entry, such as a journal amount or description.
A custom formula can be used to:
• Calculate a numeric value
• Derive an alphanumeric value
• Return a date value
It can also be used in any of the following accounting rule components:
• Journal line rule
• Account rule
• Mapping set
• Description rule
• Supporting reference

Manage Custom Formulas: Formula definition
Define custom formulas using sources for the selected event

class. Predefined functions and conditions can also be used to
derive the resulting value.
• Enter source in double quotes (").
• Enter constant values in single quotes (').
• Enter date values in the format YYYY-MON-DD.

Manage Custom Formulas: Predefined Formula
Functions
Type Function Description Example

Date YearNum Return the year of a YearNum('2012-
date source in 4-digit FEB-28') returns the
format. number 2012.
Return the month of a MonthNum('2012-
Date MonthNum date source in numeric FEB-28') returns the
format. number 2.
Return the day of date DayNum('2012-FEB-
Date DayNum source in numeric 28') returns the
format. number 28.
Return the first day of FirstDayOfYear('201
the calendar year 3-Jul-11') returns '01-
Date FirstDayOfYear
based on the Jan-2013' in date
parameter. format.

Functions

Return the last day of LastDayOfYear('201
the calendar year 3-Jul-11') returns '31-
Date LastDayOfYear
based on the Dec-2013' in date
parameter. format.
FirstDayOfMonth('20
Return the first day of
13-Jul-11') returns
Date FirstDayOfMonth the month based on
'01-Jul-2013' in date
the parameter.
format.
LastDayOfMonth('20
Return the last day of
13-Jul-11') returns
Date LastDayOfMonth the month based on
'31-Jul-2013' in date
the parameter.
format.

Functions

Return the date of AddMonth('2013-
specified number of JUL-11',2) returns
Date AddMonth
months after the date in 11-SEP-2013 in date
parameter. format.
Round(183.1123, 2)
Round a number to a returns 183.11
Arithmetic Round
specific decimal place. Round(183.1123, -1)
returns 180
RoundUp(0.01)
Round up a number to returns 1.
Arithmetic RoundUp
integer. RoundUp(1.50)
returns 2.

Functions

RoundDown(0.01)
Round down a number returns 0.
Arithmetic RoundDown
to integer. RoundDown(1.50)
returns 1.
Return the power of a
Arithmetic Power Power(3,2) returns 9.
number.
Concatenate two Concatenate('This is
Alphanumeric Concatenate strings into one single ', 'a test.') returns
string. 'This is a test'.
Substring('How are
Alphanumeric Substring Extract part of a string. you?', 3,5) returns 'w
are'.

Enabling Custom Formulas
• Users with certain job roles are automatically assigned

Manage Custom Formula and Review Custom Formula
privileges.
• If you are upgrading to Release 11 from an earlier release,
refer to instructions in the Upgrade Guide for Oracle Cloud
Applications Security white paper, Creating Functional
Security Policies Using APM.
Replace the example steps in the white paper with details from
this table:
For new Release 11 implementations, users with the Enterprise Structures Administration,
Financial Application Administrator, or General Accounting Functional Administration job roles
are automatically assigned the Manage Custom Formula and Review Custom Formula
privileges.
The duty role Accounting Hub
Administration(ORA_XLA_ACCOUNTING_HUB_ADMINISTRATION_DUTY) provides access
and is automatically inherited for these job roles.
Customers upgrading to Release 11 from an earlier release, who have not yet transitioned to
the simplified role model introduced in Release 10, need to create policies granting the new
privileges to their existing duty roles. Follow instructions in the Upgrade Guide for Oracle
Cloud Applications Security white paper, Creating Functional Security Policies Using APM.
Replace the example steps in the white paper with details from the table shown the white
paper.

Accounting Methods: Mapping Sets
Mapping sets are used to map input source values to specific

output values.
• Mapping sets are used by account rules to derive segment
values or account combination values.
• Mapping sets use source transaction values as the input.
• Mapping sets can use a segment, account combination, or a
value set as the output.
• Mapping sets can be used by multiple account rules.
Mapping sets are used by account rules to provide an efficient way to derive segment values
or account combination values (output) from one or more source transaction or reference
attribute values (input). Using such input and output mappings is simpler than using complex
conditions on account rules.
For example, a mapping set could derive values for a single segment, such as the cost center
from the source system’s product descriptions. Or a full account combination, such as the
Accounts Receivable account from the customer.
With mapping sets you can:
• Use up to 10 transaction or reference attributes as inputs into a mapping.
• Define a default output value to use when actual input values do not match the
mappings.
• Use wildcards for multiple input mapping sets to indicate that the value of a particular
input should be ignored for certain mappings.
• Enter the mappings directly on the user interface or use the spreadsheet available in the
Export option, and then import. Export allows:
- Exporting a template to create new mappings.
- Exporting all mappings already created to add or edit the current mappings.
• Reuse on more than one account rule.

Creating Mapping Sets
Mapping sets require the following:

• Name and Short Name
• Output Type
• Subledger Application
• Input Sources
• Chart of Accounts or Value Set
• Mapping Input and Output Values
When creating a mapping set the following is required:

• Name and Short Name: Give your mapping sets a meaningful name because it is
available in a list of values on an account rule. The Short Name is used as a code in the
table and cannot have any spaces and must be uppercase.
• Output Type: You can choose Segment, Account Combination or Value Set. The output
type determines what the other elements required. For example, Segment requires a
Chart of Accounts segment to be identified such as Cost Center.
• Subledger Application: Mapping sets are unique to each subledger application in order
to know which input sources to make available. This is scoped at the start of the new
mapping set.
• Input Sources: You must choose based on the subledger application and event class
the source for the values to be used in the input section. Use up to 10 sources as inputs
into a mapping.
• Chart of Accounts or Value Set: The output type determines what is required.
- Segment Output Type: Chart of Accounts name and segment are required.
- Account Combination: Chart of Accounts is required.
- Value Set: Value set name is required. When this is done, the mapping set can be
reused across any chart of accounts that uses that value set.

• Mapping Input and Output Values: You can enter the mappings directly on the user
interface or use the spreadsheet available in the Export option, and then import. With
input and output values you can:
- Map the input source values (Note: no list of values is available) to the output
values (Note: a list of values is available)
- Define a default output value to use when actual input values do not match the
mappings.
- Use wildcards for multiple input mapping sets to indicate that the value of a
particular input should be ignored for certain mappings.

Accounting Methods: Account Rules
Account rules are ultimately used on Journal Entry Rule Sets to

derive the accounts for the debits and credits of an event class.
Account rules have three main elements:
• Rule Type
• Value Type
• Conditions
Account rules are the most critical elements of an accounting method because it derives the
accounts for the debits and credits of an event class.
Multiple account rules are used on an accounting rule set; at least one for the debit and one
for the credit.
You can specify the conditions under which the account rules apply. Using these capabilities,
you can develop complex rules for defining accounts under different circumstances to meet
your specific requirements.
The three elements of an account rule are detailed in subsequent slides.

Creating Account Rules: Rule Type
Account rules must be one of three types:

• Account Rules by Account
• Account Rules by Segment
• Account Rules by Value Sets
The rule types are similar to the mapping set output type. If using a mapping set on the
account rule, the account rule must use the same rule type as the mapping set output type.
Account Rules by Account
• Define account rules by account to determine the entire account combination. If using a
mapping set on the account rule, the mapping set must also be defined with the Account
Combination output type.
Account Rules by Segment
• Define segment rules to derive a specific segment of the general ledger account. If using
a mapping set on the account rule, the mapping set must also be defined with the
Segment output type. Segment-specific rules take precedence over the account rule by
account.
Account Rules by Value Sets
• Define account rules based upon value sets rather than chart of accounts. This enables
you to share the same rule between more than one chart of accounts if the segments in
these charts of accounts share the same value set. If using a mapping set on the
account rule, the mapping set must also be defined with the Value Set output type.

Creating Account Rules – Value Types
Account rules have four Value Types:

• Account Rule
• Constant
• Mapping Set
• Source
• Formula
Value types determine where or how the system finds the account combination value,
segment value, or value set value. There are four choices:
• Account Rules: Use an existing account rule. This is useful if using a condition. If the
condition is not met you can use an existing account rule as the 2nd priority.
• Constant: Use a specific value for the whole combination value, segment value, or value
set value. For example, you need to use a specific liability account for the Invoice event
class. You can have the constant achieve this.
• Mapping Sets: Use to associate specific source values with segment values.
• Source: Use a source where an account combination or segment value exists in the
source table. For example, an external Billing system might have the revenue account
on the invoice it creates. So the source could be the revenue account column of the
staging table.
• Formula: Use a custom formula for more complex rules.

Account Rules Best Practices
Define an account rule once and use it multiple times:

• Define a source or constant-based account combination rule.
• If possible, use an account combination rule rather than
building segment by segment.

Conditions
Conditions are used to refine the details of the results of the

journal created by the accounting method.
The Create Accounting process evaluates conditions based on
the priority of the rule detail. When the condition is met, the rule
is applied.
The following can have a condition:
• Account Rule
• Description Rule
• Journal Line Rule
Conditions can help refine the details needed on the results of the journal generated from the
accounting method during the creating accounting process. You can use sources to create
these conditions.
For example, you might want a specific account number generated for billings dated this year
over next year. The account rule condition could achieve this. When using a condition you
must have at least 2 priority lines on the rule. Priority 1 would be for this year and priority 2 for
next year. The Create Accounting process evaluates conditions based on the priority of the
rule detail. When the condition is met, the rule detail is applied.
• Journal Line Rules
- Journal line rule conditions determine whether a journal line rule and its associated
account rules and description rules are used to create the subledger journal entry
line.
• Account Rules
- Determine the accounts for subledger journal entry lines.
• Description Rules
- Determine both the content and sequence in which the elements of the description
appear.

Conditions
Constant values that are used in any Conditions region must not
contain the following characters:
“ , & | ( ) ‘
For example, in the condition "Project Type" = ABC (123), the constant value following the
equal sign, ABC (123), contains restricted characters ( ), which enclose 123 and are invalid.

Practice 12-1 Overview: Creating Three Account Rules.

• Creating three account rules.
• Adding a condition.

Accounting Methods: Description Rules
Use descriptions rules to define the elements of a description that

appear on the subledger journal entry at the header and/or the
line level.
• The definition determines both content and the sequence the
elements of the description appear.
• Assign conditions to determine that the description is selected
for display if the condition is satisfied. The conditions are
associated with priorities like account rules.
• Descriptions can be transferred to the General Ledger.
• A description rule can be defined with combinations of source and literal values. If
sources are used in the rule, the accounting event class associated with the source
determines in which subledger journal entry rule set the description rule can be selected
and used.
• You can build descriptions using any available source from the application.
• For example, you want to see Supplier Name and Transaction Type on the Header of
the subledger journal. The following are description details that would be entered, using
literals and sources:
- Literal = Supplier:, Source = Supplier Name
- Literal = , (Comma)
- Literal = Transaction:, Source = Transaction Type
• The result on the Journal would be, “Supplier: Advantage Corp, Transaction: Invoice.”
• Descriptions can be transferred to the General Ledger based on the General Ledger
Summarization Options.
- If the value is Group by GL Date or Group by Accounting Period, each line
description for each journal entry transferred to GL in the same group is displayed
and visible.

- If the value is Summarize by GL Date or Summarize by Accounting Period and if
all lines can be summarized, each line description will not be displayed.
- In both cases, when drilling down to subledger, all descriptions will still be
available and displayed.

Expanded Subledger Journal Entry Descriptions
Improved subledger journal entry header and line descriptions.

• New information in journal entry description could include:
– External transactions’ origin.
– Transaction type.
– Source transaction reason.
Subledger applications Cash Management, Accounts Payable, Accounts Receivable, and Tax
have enhanced their predefined subledger journal entry header and line descriptions to
include more meaningful information about the nature and reason for the source transaction.
For example, new and improved information in the journal entry description might include the
external transactions’ origin, transaction type, and reference values.
You can configure the description to display at the journal entry header and line levels using
the subledger description rules feature.
For additional information, refer to Creating Description Rules: Explained (Oracle Fusion
Applications Financials Implementation Guide).

Practice 12-2 Overview: Creating a Description Rule.
This practice covers the following topic:

• Creating a description rule for Payables.

Accounting Methods: Supporting References
• Supporting references are used to store additional source

information about a subledger journal entry either at the line or
header level.
• Supporting references can calculate or maintain a balance
based on a transactional data source transferred through
subledger accounting.
• Supporting reference balances are not transferred to the
General Ledger.
Supporting references can be defined using either of these options (located on tabs):
• With Balances:
- Facilitates reconciliation back to the subledgers and source systems by tagging
journal entries with transaction and reference attributes.
- Creates a report on balances by dimensions not captured in the chart of accounts.
- Enriches Oracle Fusion Business Intelligence Applications reporting on subledger
journals.
- Can be carried forward into the next fiscal year or start over each fiscal year. For
example, you can maintain a balance of revenue each year by account manager.
- There is a limit of thirty supporting references with balances defined. You can
consider adding more source assignments to predefined supporting references,
rather than creating a new one.
• Without Balances:
- Aids in slicing and dicing data of a journal.
- There is no limit to the number of supporting references without balances.
Note: Supporting reference balances are not transferred to the General Ledger and are only
accessible in Subledger Accounting screens or Oracle Transactional BI reports and analysis.

Accounting Methods: Journal Line Rules
The journal line rule determines how each debit and credit entry
are created. It defines:
• Accounting class.
• Side as debit, credit or gain or loss.
• Sources that drive the values on the entry, such as amount.
Accounting attributes link sources to specific journal entry line
values such as the accounted amount.
• Advanced set up features, such as business flows and
summarization options.
Characteristics of journal line rules are as follows:

• Are defined within the context of accounting event classes.
• Are used in a subledger journal entry rule sets that have the same event class.
• Can contain conditions that determine when they are used to create a line.
To create a journal line rule, select values for options such as:
• Side (Debit, Credit, Gain or Loss): For example, to create a journal line rule to capture
revenue, you could create a credit line rule.
• Merge Matching Lines: To summarize or not to summarize subledger journal entry lines
within each subledger entry. This setting does not affect the journal in the General
Ledger. It affects the detail seen in Subledger Accounting from the drilldown . The
choices are:
- No: No summarization of lines.
- All: Lines are only merged if they share the same account combination,
description, supporting reference values, and accounting class. This merges debits
and credits together.
- Debit or Credit: Only merge the Debits together for the same account combination
and only merge the Credits together.

• Accounting Class: To classify journal entry lines. For example, a line used to record the
collection of cash would typically have an accounting class of Asset.
• Conditions: Used to restrict the use of a journal line rule by controlling when a particular
journal line rule is used by the Create Accounting process. For example, generate a
freight expense line if there are freight charges. Or generate a tax line if there is tax
associated with a transaction. The journal line is only created if the conditions evaluate
to true.
Advanced Options:
• Rounding Class: Groups lines together to determine if rounding is necessary.
• Link Journal Lines: Whether or not to copy a line description from another journal line.
• Business Flows: If a business flow is used the Create Accounting process does not use
an account rule to derive the account for the debit or credit. The choices for a business
flow are:
- Same Entry: Tells the Create Accounting process to use an account already
derived in the same journal.
- Prior Entry: Tells the Create Accounting process to use an account from a
dependent or prior journal. For example, you usually want the Payables payment
liability account to use the same liability account as the Payables invoice that it
paid. So, the prior entry for the payment debit line is the invoice credit line account.
Accounting Attribute Assignments: When creating a journal line rule, accounting attribute
assignments are automatically established based on the default accounting attribute
assignments for that journal line rule's accounting event class. You can override this default
mapping of standard sources to accounting attributes. The list of values for the source
override includes all sources assigned to the accounting attribute for the event class
associated with the journal line rule. For example, an accounting attribute can be amount, GL
date, currency, and so on.
Note: Refer to the Oracle Financials Cloud: Implementing Subledger Accounting guide for
more information on Journal Line Rule advanced options.

Practice 12-3 Overview: Creating Two Journal Line
Rules.
These practices covers the following topic:
• Creating two journal line rules.

Accounting Methods: Journal Entry Rule Sets
Each subledger application has a unique journal entry rule set
that contains the rules for creating journals. It contains:
• Event Class and Type.
• Journal Line Rules.
• Account Rules.
• Descriptions (Optional).
• Supporting References (Optional).
A subledger journal entry rule set is a collection of rules that generates a complete journal
entry for an accounting event. Each subledger application has its own journal entry rule set
definitions that join all the other accounting rules together. There must be at least one debit
and one credit line defined for each event class and type combination. Each debit and credit
line must contain:
• A journal line rule.
• An account rule or rules.
Each line can optionally contain:
• A description rule.
• A supporting reference.

Creating Journal Entry Rule Sets
Journal Entry Rule Sets define the:

• Journal Entry Rule Set Header
• Journal Header
• Journal Lines
Before defining the Journal Header and Lines, the journal entry rule set header must be
defined. It contains:
• Name and Short Name.
• Event Class
• Event Type
• Chart of Accounts: This is only required if any account rules to be used in the journal
entry rule set have been defined with a chart of accounts. The two chart of accounts
must be the same.
The Journal Entry Header contains:
• Accounting Date: How to derive the effective date of the journal. The choices are:
- Journal Entry Creation Date: The date the journal is created by the Create
Accounting process.
- Accounting Event Date: The date the journal is transferred to the Accounting
Events table.
- Transaction Date: The date of the transaction in the external subledger application.
• Description Rule (Optional): If you defined a description rule, you may add it here or at
the line level.

The Journal Entry Lines contain:
• Line Type: Gain, Loss, Gain or Loss, Credit, or Debit.
• Journal Line Rule: The journal lines rules side must match the line type chosen.
• Accounting Class: Defaults from the journal line rule.
• Account Combination Rule and/or Segment Rules: You include both types on the line.
For example, you can put an account combination rule on the revenue or credit line to
derive the complete combination and then put a segment rule on Cost Center to replace
the combination rule’s cost center value with different values. If the rules are defined
with sources, all sources must have been assigned to the same event class that is
associated with the journal entry rule set. A supporting reference can only be used on a
journal entry rule set if it is defined with a source from the event class of that journal
entry rule set.
• Line Description Rule (Optional)
Supporting references: Each journal line can have a supporting reference or multiple
supporting references.

Activating a Subledger Journal Entry Rule Sets
The Journal Entry Rules Set (JERS) must be in the Active status.
• You can activate the JERS from the Manage Subledger
Journal Entry Rule Sets task or the Manage Accounting
Methods task.
• You can also submit the Activate Subledger Journal Entry
Rule Set Assignments process from scheduled processes to
activate your accounting setups.
Before a Subledger Journal Entry Rule Set can be assigned to an Accounting Method, it must
be in the Active status. The process that runs is validating the journal entry rule set to ensure
that there is at least one debit and one credit line in the definition. This ensures that the
journal it creates is balanced.

Practice 12-4 Overview: Creating a Journal Entry Rule
Set
• Creating a journal entry rule set.
• Activating a journal entry rule set.

Accounting Methods
Accounting Methods are required for subledger financial

transactions to be transferred to the General Ledger. You can:
• Modify a predefined accounting method (with restrictions)
• Duplicate an existing or predefined accounting method and
then modify it.
• Create a new accounting method.
In order for an accounting entries to occur, an Accounting Method must be configured and
attached to a Primary and/or Secondary Ledger. The ways to configure an accounting method
are:
• Modify one of the accounting methods that Oracle owns. You are restricted to only
modifying any details for a new registered non-Oracle subledgers.
• Duplicate an existing or defined accounting method and then modify it. This is a best
practice because it ensures that the original accounting method is not corrupted.
• Create a new accounting method without duplicating an existing one. It is recommend to
do this only if you are not implementing any Oracle Fusion Subledger Applications.

Creating or Modifying Accounting Methods
When creating or modifying an accounting method you must:

• Give it a name.
• Optionally attach a chart of accounts.
• Select a subledger application.
• Assign Journal Entry Rule Sets by event class and event type
for each subledger application.
• Change the status to Activate.
• Assign the accounting method to a ledger or ledgers.
• Run the Update Subledger Accounting Options process.
At the time of creation or modification of an accounting method you must:

• Give it a name or new name: Naming conventions are important and must reflect the
nature of the accounting method. For example, if creating an accounting method for a
secondary ledger using GAAP rules you might name it: Standard Accrual SL US.
• Optionally attach a Chart of Accounts: If the Journal Entry Rule Set used is defined with
a chart of accounts then you must attach the same chart of accounts to the accounting
method.
• Select a Subledger Application: All of the Fusion subledger applications are displayed
on the page as tabs. Select the subledger application tab you need to configure.
• Assign Journal Entry Rule Sets: For each event class, event type combination assign a
journal entry rule set. The Create Accounting process uses the rule set to create the
journals. You can assign multiple journal entry rules to an event class or type, using non
overlapping effective dates. This can be used to accommodate changes in accounting
methods due to new regulations or corporate policies.
• Change the Status to Active: The accounting method status must be Active for the
method to be used by the Create Accounting process.

• Assign the new accounting method to a ledger or ledgers: When assigning an
accounting method to a ledger, you must select an accounting method that uses the
same chart of accounts, or an accounting method that does not have an assigned chart
of accounts. Accounting methods are required on both primary and secondary ledgers.
• Run the Update Subledger Accounting Options process: This process Activates the
ledger options for newly registered non-Oracle applications. Ledger options include
things like using suspense accounts upon error during the accounting process, whether
to sequence subledger journals, intercompany processing and so on.

Practices 12-5 Overview: Duplicating and Modifying an
Accounting Method.
• Duplicating the Standard Accrual Method.
• Modifying the new accounting method.
• Activating the new accounting method.
• Attaching the new accounting method to your secondary
ledger.

Accounting Methods: Migrating the Accounting
Configuration
• Migrate setup task lists from one instance to another for
specific subledger applications or all subledger applications.
• Use the export and import functionality in the Setup and
Maintenance work area.
When migrating accounting rules from one instance to another, you must migrate task lists in
their entirety. The migration requirements are:
• Journal entry rule sets and accounting methods must be successfully activated. Invalid
journal entry rule sets or accounting methods causes import failure.
• Ensure that your setup data migration includes all dependent business objects from
other required setup tasks, such as Define Ledgers. The import sequencing of these
dependent business objects must be prior to accounting rules business objects.
Note: See the Introducing Functional Setup Manager lesson for additional information on the
export and import process.

Create Accounting Process
The Create Accounting process can be scheduled to run

periodically or submitted on demand.
The Create Accounting process is a scheduled process that can be submitted dynamically (on
demand) or scheduled to run periodically. The process is submitted separately for each
subledger and can be submitted in one of three modes:
• Draft: This mode transfers the journal only to Subledger Accounting. The journal may
be viewed in Subledger Accounting but not in General Ledger. This mode is useful for
testing new journal entry rule sets.
• Final: This mode transfers the journal through Subledger Accounting and then to
General Ledger into the journal entry tables. The journal needs to reviewed and then
posted either manually or through AutoPost.
• Final/Post: This mode transfers the journal through Subledger Accounting, to the
General Ledger journal entry tables and then posts the Journal. This is also called
straight through processing.

Create and Process Subledger Journal Entries
The Create Accounting process creates subledger journal entries

using:
• Transaction data
• Reference objects data
• Accounting rules.
The Create Accounting process uses the transaction and reference objects data, plus the
accounting rules, to create subledger journal entries.
For example, if a subledger journal entry rule set specifies that the supplier name should
appear in the description of a subledger journal entry line, then the supplier name value is
taken from the supplier name source data provided by the transaction objects.

Practices 12-6 Overview: Submitting Create Accounting
in Draft and Viewing the Subledger Journal in Payables.
• Submitting the Create Accounting Process in draft mode.
• Viewing the subledger journal in Payables.

Practices 12-7 Overview: Submitting Create Accounting
in Final/Post
• Submitting the Create Accounting Process in final/Post mode.
• Viewing the subledger journal in General Ledger.

Manual Features of Subledger Accounting
In Subledger Accounting you can also use these two manual

features:
• Manual Subledger Journal Entries
• Account Override on a Subledger Journal Entry
Oracle Fusion Subledger Accounting also provides two manual features:

• Manual Subledger Journal Entries: This is useful for creating adjustments that cannot or
do not have a transaction associated with it.
- Use the Create Subledger Journal Entry task.
- These journal entries are processed through the Create Accounting process and
then transferred and posted to the Oracle Fusion General Ledger.
- The transferred journals have the a subledger name as the source of the journals.
• Account Override on a Subledger Journal Entry: If you don’t want to use the manual
subledger journal entry feature to make adjustments, you can use the account override
feature on a journal created through the Create Accounting process using the final
mode. This feature:
- Ensures proper accounting and expedites error correction by editing accounts
directly on a completed subledger journal entry.
- Is available from the Review Subledger Journals task and the Manage Journals
task.
- Provides an audit trail by keeping the original entry visible. A reason for the
adjustment is also recorded.
- Does not adjust the original source transaction.

Improved Online Accounting Messages
Click here to see

the error details.
If online accounting fails for a subledger transaction, warning and error messages display in
the Accounting Lines window. To access the Accounting Lines screen, click on View
Accounting. This enhancement eliminates the need to run the Create Accounting process
from the Scheduled Processes page to see the error details.

Expanded Accounting Lines Window
The Accounting Lines screen displays a number of detailed-rich

error messages.
Journal Level Errors
Line Level Errors
Expanded Line Details
Journal level errors display in the Message section. For example, errors due to period status.
Line level errors contain a red exclamation point icon next to the line number. For example, an
error due to a disabled account. Expand the corresponding line details to see more details
about the error.
The same detail-rich accounting messages are also displayed also in the Review Journal
Entries page for all invalid subledger journal entries, including those created by running the
Create Accounting process, not just through online accounting.
Note: You can export the accounting lines with the detailed message text into a spreadsheet
from within the Accounting Lines page.
For additional information, refer to Manage Subledgers: Overview (Oracle Financials Cloud
Using Subledger Accounting).

Summary
In this lesson, you should have learned how to:

• Explain the role of accounting methods in the Create
Accounting process.
• Understand the key features of accounting methods.
• Configure and manage accounting methods.
• Discuss the Create Accounting process.
• Understand manual journal entries and adjustments.
• View the created journal entries.

13
Configuring Oracle Fusion
Payables

Objectives

• Describe Payables terminology.
• Discuss the flow of default values.
• Understand the required tasks to configure Payables.
• Discuss the optional tasks to configure Payables.

Required tasks to Configure Payables
All of the required tasks to configure Payables must be managed by Business Unit. When
managing these tasks, you are required to Scope each task to a Business Unit.
Many of the setups previously discussed are used for these configurations. These include the
chart of accounts, calendar, currency, ledger, and reference data sets. Some of the options
are used as defaults that can be overridden and others cannot be changed.
Some of the options, when activated require additional setups that will be discussed in this
lesson under the Optional Tasks to Configure Payables section.

Payables Terminology
The following terms apply to • Pay Group

Payables: • Payment Process Request
• Invoice Distribution • Payment Request
• Invoice Group • Self-Service Invoice
• Invoice Request • Tolerance
• Matching • Withholding Tax
• Final Matching Classification
• Invoice Distribution: The accounting information for an invoice line, such as accounting
date, amount, and account combination.
• Invoice Group: A collection of invoices that is used as a report parameter, an invoice
validation parameter, and a selection criteria for a pay run.
• Invoice Request: An invoice created through Oracle Fusion Supplier Portal that is not
associated with a purchase order and that is pending approval by the requester.
• Matching: The process of associating an invoice with a purchase order, receipt, or
consumption advice. Ensures that you pay only for goods and services that were
ordered, received, or consumed.
• Final Matching: A process that changes the status of a purchase order schedule to final
close, preventing further invoicing.
• Pay Group: A method for categorizing suppliers for payment processing.
• Payment Process Request: A grouping of installments that are processed for payment in
a batch. For each request you specify selection criteria, payment attributes, and
processing options.

• Payment Request: A request from Oracle Fusion Receivables or Oracle Fusion
Expenses to disburse funds to a payee who is not defined as a supplier. Recorded in
Payables with an invoice type of Payment Request.
• Self-Service Invoice: An invoice that a supplier enters through Supplier Portal.
• Tolerance: The allowed variance between invoice, purchase order, receipt, and
consumption advice information. The invoice validation process places matching holds
on invoices that exceed the allowed variance.
• Withholding Tax Classification: A collection of one or more withholding tax codes. Used
to associate more than one withholding tax code with an invoice.

Flow of Default Values
Since many default values are defined through out many of the configurations or setups tasks
it is very important to understand the flow of default values.
Default values that are set at higher levels flow down to lower levels where you can override
them. The default value at the lowest level wins.
Default values reduce data entry by providing default values based on corporate or business
unit policies. This is the main reason most of the configurations are defined by Business Unit.
Optional defaults should be left blank if users are frequently overriding them.
For example, a default payment term of Net 30 might be defined on the invoice options page.
However, a payment term of 2/10 Net 30 might be set at the supplier site. When an invoice is
created using that supplier site, the invoice will use the 2/10 Net 30 term rather than the Net
30.
This lesson and subsequent lessons detail the Payables Configurations listed on the
Payables Flow above for you to gain a better understanding of the flow of default values.

Managing Procurement Agents
Setup Procurement Agents to have access to:

• Business Units
• Supplier Setups
• Access to Other Agents Documents
Managing Procurement Agents is only required for Payables if you are not implementing
Procurement. This is mainly needed for Payables users to have access to supplier setups.
Otherwise Procurement Agents are created through the Procurement Offering. Procurement
Agents give Payables users access to:
• Business Units
• Supplier Actions
- Manage Suppliers
- Manage Supplier Qualifications
- Manage Approved Supplier List Entries
- Analyze Spend
• For the Supplier Qualifications action you can also give an agent access to other agents’
documents as:
- None
- View
- Full

Practice 13-1 Overview:
Defining Your User as a Procurement Agent.
• Defining you user as a procurement agent.

Managing Payment Terms
Payment terms are used to automatically create installments that determine invoice due dates
and amounts with up to three levels of discounts. You can define payment terms to create
multiple installments and multiple levels of discounts.
Payment terms consist of one or more lines, each of which creates one invoice installment.
Each payment term line and corresponding installment have a due date and up to three
discount dates. Each payment term line and corresponding installment also have due or
discount amounts. When you define payment terms, you specify either percentages or fixed
amounts.
To use a payment term, you must assign it to a set. You can assign payment terms to one or
more reference data sets and share them across business units.
• Predefined Reference Group: Payables Payment Terms
• Determinant Type: Business Unit

Payment Terms Due Date and Discount Dates
Payment terms due dates and discount dates are based on one
of the following types:
• Fixed date
• Days
• Calendar
• Day of Month
You can define different types of payment terms:

• Fixed Date: A specific day, month and year when an installment is due for payment.
• Days: A number of days added to the invoice terms date. For example, A 30 Net
payment term would use 30 days to calculate the invoice due date. The terms date and
due dates will be based on the General Ledger’s Accounting calendar.
• Calendar: Assigns a due date based on a Payables calendar that is divided into periods
different than the General Ledger accounting calendar. You can assign due dates to
avoid weekends, holidays, and so on. Note: You must define a Payables calendar
before using the calendar based type.
• Day of Month: A specific day of the month when an installment is due for payment. For
example, enter 15 to schedule the payment to be due on the 15th of the month. Enter 31
to schedule the payment to be due on the last day of the month to include months with
less than 31 days.

Day of Month Payment Term Example
Example Day of Cutoff Day Months Terms Calculated

Month Ahead Date on Invoice
Invoice Due Date
1 15 11 0 January 10 January 15
2 15 11 0 January 12 February 15
3 15 11 1 January 12 March 15
When using Day of Month, you can also use following:

• Cutoff Day: The day of the month after which the installment due dates and discount
dates advance to a future month. If you do not specify a cutoff day, the current
accounting month is used to determine the due dates and discount dates.
• Months Ahead: If you enter 0 and the invoice terms date is the same as, or later than,
the cutoff day, Payables uses the day of the month in the next month to set the due date
and discount date.
See the examples above.

Defaults and Predefined Payment Terms
• During a Payables implementation, a default record is

automatically created.
• The predefined term of Immediate is defaulted.
The first time that you save the Manage Common Options for Payables and Procurement
page for a business unit, a default record is automatically created for the Manage Invoice
Options task. The Payment Terms field on the Manage Invoice Options page is a required
field and the invoice options record is saved using the predefined payment term of Immediate.
The following payment terms are predefined and assigned to the Common set.
• Immediate: Scheduled for payment immediately or the same date as the terms date.
• 2/10 Net 30: Two percent discount deducted if paid within 10 days, remainder paid 30
days from invoice terms date.
• Net 30: Payment due in 30 days.
• Net Monthly Account: Payment due on last day of the month following the one in which
the invoice is dated.
• End Current Month: Pay by end of current month.

Practice 13-2 Overview: Creating a Payment Term

• Setting the scope for your business unit.
• Creating a payment term with multiple discounts.
• Assigning the your data reference set to the payment term.

Managing Common Options for Payables and
Procurement
• Define the common controls and default values for business
units with the Payables Invoicing and Procurement business
functions.
• Common options are grouped into the following categories:
– Default Distributions
– Automatic Offsets
– Currency Conversion
– Expense Accruals
– Self-Billed Invoices
– Legal Entity Information

Default Distributions
Default distributions provide default accounts for Payables

transaction processing.
Payables uses the distributions defined in the Common Options for Payables and
Procurement for the following account combinations unless they are specified at the supplier
site assignment level, in which case the supplier provides the default distributions on an
invoice:
• Liability: Default liability distribution for an invoice.
• Prepayment: Default distribution for a prepayment invoice.
• Bill Payable (Optional): Default bill payable distribution.
Payables uses the distributions defined in the Common Options for Payables and
Procurement for the following account combinations:
• Conversion Rate Variance Gain and Conversion Rate Variance Loss: Conversion rate
variance gains or losses for inventory items or expense items that were accrued on
receipt. Variance is calculated between the invoice and either the purchase order or the
receipt, depending on how you matched the invoice.
• Discount Taken: Discounts taken on payments if you allocate discounts to a single
distribution.
• Miscellaneous (Optional): Distribution for invoice lines with a type of Miscellaneous. If
you do not specify a value, miscellaneous charges are prorated across invoice item
lines.

• Freight (Optional): Freight for an invoice. You can override this distribution during
invoice entry. If you do not specify a value, freight charges are prorated across invoice
item lines.
• Prepayment Tax Difference (Optional): Tax amount difference between a prepayment
and the invoices that the prepayment is applied to. These differences are usually due to
changes in tax rates between prepayment and invoice creation times. This distribution is
used only if the Applied Amount Handling option on the tax record is set to Recalculate.

Automatic Offsets
• Automatic offsets are a method for automatically balancing

invoice and payment journal entries that cross primary
balancing segment values.
• You can offset by:
– Primary Balancing Segment
– All Segments, Except Natural Account
If you enter invoices for expenses or asset purchases for more than one primary balancing
segment value, you might want to use automatic offsets to keep your Payables transaction
accounting entries balanced. If you do not use automatic offsets, Payables creates a single
liability accounting entry for invoice transactions and a single cash type accounting entry for
payment transactions and the create accounting process then balances the journals using
Intercompany balancing rules.
When you use automatic offsets, Payables automatically creates balancing accounting entries
for your transactions. The general ledger account that each offsetting accounting entry is
charged to depends on which offset segment method you use, Primary balancing segment or
All segments, except natural account.
Payables automatically allocates amounts for the following invoice accounting entries:
• Conversion rate variance gain or loss
• Liability
• Non-recoverable tax for invoices matched to a PO
• Non-recoverable tax for invoices not matched to a PO and where no tax expense
account is defined for the tax rate
• Withholding tax if you apply the withheld amount at invoice validation time

Payables allocates amounts for the following payment accounting entries:
• Cash if you use a pooled bank account
• Cash clearing if you use a pooled bank account and if you account for payments at
clearing time
• Discount
• Realized gain or loss
• Bills payable
• Withholding tax if you apply the withheld amount at payment time

Automatic Offset by Primary Balancing Segment
In the example above, an invoice has two invoice line distribution account combinations using
2 different balancing segment values. To build the liability account for each line, Payables
uses the invoice header liability account combination and overrides the primary balancing
segment value with the primary balancing segment value from the invoice line distribution
account combination.
The resulting invoice liability account combinations will produce a balanced journal entry by
the primary balancing segment value.

Automatic Offset by All Segments, Except Natural
Account
In the example above, an invoice has two invoice line distribution account combinations using
2 different balancing segment values and 2 different cost center values. To build the liability
account for each line, Payables uses all the segments except the natural account of each line
distribution account combination and overrides all the segment values except the natural
account segment value.
The resulting invoice liability account combinations will produce a balanced journal.

Currency Conversion
Currency conversion options provide default settings for

converting foreign currency invoices to the ledger currency.
You select or enter:
• Whether to require conversion rate entry.
• A conversion rate type.
• Realized gain and loss distributions.
The currency conversion options only apply to Payables invoices not payments. The options
provide settings for converting an invoice entered in a foreign currency to the functional or
ledger currency. You must select or enter:
• Require conversion rate entry: If selected, Payables requires a conversion rate
whenever an invoice is entered in a currency other than the ledger currency. You cannot
complete or save the transaction until a currency rate is provided. If a default conversion
rate type is also defined on the common options, the rate is automatically provided
based on the date. If daily rates do not exist for the date and rate type then the user
must provide a conversion rate. If the conversion rate type is User, then you must
always enter a conversion rate. If you do not enable this option, after you have entered
the invoices you can enter conversion rates manually or run the Apply Missing
Conversion Rates process.
• Conversion rate type: Specify the default conversion rate type to automatically provide a
conversion rate when you enter invoices. You can change the conversion rate type at
invoice entry time.
• Realized gain and loss distributions: Specify the realized gain and loss accounts for
payments. If a conversion rate changes between the time the invoice is entered and the
time of payment, the realized gain or loss is calculated and recorded to these accounts.

Expense Accruals
Specify when to accrue for expense items:

• Period End
• Receipt
Payables will create journal entries called Accrued Receipts when expense items have been
received but not yet invoiced. This setting tells Payables when to create the accrual. You must
choose either:
• Period end: During period close, accrual entries are created for all receipts that do not
have invoices. Accrual entries are reversed when the next period is opened.
• Receipt: During receiving, accrual entries are created. You can override this setting on
the purchase order schedule for expense destination types.
Note: Inventory items always accrue at receipt.

Self-Billed Invoices
Self-billed invoices are:

• ERS Invoices
• Debit Memos from Return to Supplier Transactions
• Invoices from Consignment Agreements
• ASBN
Self-Billing Invoicing options are:
• Gapless invoice numbering
• Buying Company Identifier
Self-billed invoices are:

• Evaluated Receipt Settlement (ERS) invoices that are automatically created by the Pay
on Receipt process in Oracle Fusion Receiving.
• Debit memos that are automatically created from a return to a supplier transaction in
Receiving.
• Invoices that the Create Consumption Advice process creates from consignment
agreements that enable the Pay on Use option.
• Advanced Shipment Billing Notices (ASBN): Sent from the supplier for drop shipments.
Set automatic invoice numbering options for self-billed invoices.
• Gapless invoice numbering: Enable gapless invoice number generation. This is
important in countries that require gapless numbering of documents.
• Buying Company Identifier: Enter an identifier to use as part of the automatically
generated invoice number.

Legal Entity Information
Provides extra information for the Legal Entity associated with the
Payables Business Unit.
• VAT Registration Member State
• VAT Registration Number
• Bill-to Location
Subledger applications, like Payables, use the legal entity model to identify the legal entity
that owns an invoice.
Legal entity information is used for:
• Tax calculations.
• Legal reporting.
• Classification - whether an invoice between two entities is an intercompany transaction.
Specify:
• VAT Registration Member State and VAT Registration Number: For business operations
carried out in a member state of the European Union. These values are used in Value
Added Tax (VAT) reporting.
• Bill-to Location: The default bill-to location for purchase orders if a bill-to location is not
already specified on a supplier site assignment.

Practice 13-3 Overview: Managing Common Options
for Payables and Procurement
• Verifying that the scope is set for your business unit.
• Reviewing default distribution combinations for your business
unit.

Manage Invoice Options
• Invoice options control how invoices are processed for

business units with the Payables Invoicing business function.
• Invoice options are grouped into the following categories:
– Invoice Entry
– Matching
– Discount
– Prepayment
– Approval
– Interest
– Payment Request
– Self-Service Invoices

Manage Invoice Options: Invoice Entry
The default options that can • Allow remit-to-supplier

only be set in the Manage override for third-party
Invoice Options task are: payments
• Require invoice grouping • Recalculate invoice
• Allow document category installments
override • Receipt Acceptance Days
• Allow adjustments to paid • Accounting Date Basis
invoices • Budget Date Basis
As discussed on flow of default values slide, some default options can be defined on both the
Manage Invoice Options page or on the supplier setup. The following options control the entry
of invoices and cannot be specified at the supplier level:
• Require invoice grouping: Requires you to enter a name during invoice entry to group
invoices. Can be used to make payments to all the invoices in a particular invoice group.
Invoice groups are user defined and are created dynamically at the time of entry.
Subsequent invoices can then be added to a newly created group.
• Allow document category override: Lets you override the document category that is
automatically assigned to an invoice if the Oracle Fusion General Ledger Sequencing
By ledger option is set to Ledger or Legal entity. If the Sequencing By ledger option is
set to No sequencing:
- No document category is assigned to an invoice.
- You cannot set this invoice option.
- You cannot enter a document category for an invoice.
• Allow adjustments to paid invoices: Lets you cancel or add lines to paid invoices such
that the paid amount remains the same. You can also unmatch an invoice from a
purchase order that is not final matched, and then rematch the invoice to a different
purchase order. You cannot adjust or change the accounting distributions.
• Allow remit-to supplier override for third-party payments: Lets you override the remit-to
supplier name and address on invoice installments for suppliers with third-party
relationships.
• Recalculate invoice installments: This recalculates installment information during the
invoice validation process. Installment recalculation uses the most recent applicable
start date and a more favorable payment term. The most recent start dates might be
Invoice date, Terms date, or Goods received date plus the number of receipt
acceptance days. If the invoice is matched to a purchase order, a more favorable
payment term might be the purchase order payment term rather than the invoice
payment term.
• Receipt acceptance days: Specifies number of days to accept receipts. Receipt
acceptance days are added to the date goods are received when installments are
recalculated.
• Accounting date basis: Sets the default accounting date that will be on the resulting
journal entry. The choices are:
- Goods received or invoice date: If the invoice does not have a date for goods
received then Payables uses the invoice date as the default accounting date.
- Goods received or system date: If the invoice does not have a date for goods
received then Payables uses the system date as the default accounting date.
- Invoice date
- System date
• Budget date basis: Sets the default budget date when you create an invoice. Used with
budgetary control to determine when to encumber the budget. The choices are
Accounting date, Invoice date, or System date.

Manage Invoice Options: Invoice Entry
Options that can also be specified at the Supplier level:

• Hold unmatched invoices
• Invoice Currency
• Payment Currency
• Pay Group
• Payment Priority
• Payment Terms
• Terms Date Basis
• Pay Date Basis
You can specify default values for the following options on both the Manage Invoice Options
page and the supplier site page. If a supplier site does not have a value, the invoice option
setting is used.
• Hold unmatched invoices: Applies a matching required hold during invoice validation to
invoices that are not matched to a purchase order or receipt. This option can be set on a
supplier site to Yes, No, or Default from Payables Options. This invoice option is used
only when the setting on the supplier site is set to Default from Payables Options.
• Invoice currency: This should be set to the functional currency of the associated
business unit and ledger but can be set to a non-functional currency. An invoice can be
entered using a different currency but will be converted to the functional currency of the
associated ledger.
• Payment currency: This should be set to the functional currency of the associated
business unit and ledger but can be set to a non-functional currency. You can pay
invoices in any currency, irrespective of the invoice currency.
• Pay group: Pay groups are defined in Manage Payables Lookups and are used by
Oracle Fusion Payments.

• Payment priority: Set a value from 1 to 99. Use this to prioritize which suppliers get paid
first. For example, if have 100 suppliers in the Standard pay group but only need to pay
50 of them weekly. You can set those 50 with as a priority 1 and the rest as priority 2. At
payment run time, you can submit a payment process for the Standard pay group with
priority 1. Only the 50 with priority 1 get paid.
• Payment terms: Set this to the most favorable payment term for the business unit. Since
payment terms are usually negotiated with each supplier, this is usually set at the
supplier site.
• Terms date basis: Payables uses this date, the payment term, and the pay date basis to
calculate when the installment is due for payment. The choices are:
- Goods received date
- Invoice date
- Invoice received date
- System date
• Pay date basis: Sets the basis for determining whether an installment is scheduled for
payment using the actual due date or the discount date. If a business unit has a policy to
take advantage of discounts, it should be set to discount date.

Manage Invoice Options: Matching
When you match an invoice to a purchase order, the purchase order defaults line and
distribution values to the invoice. The following options are set only on the Manage Invoice
Options page:
• Allow final matching: Lets you perform a final match when matching to a purchase order
or when adjusting a matched invoice distribution. Final matching permanently closes
the purchase order and you cannot perform any further matching to the purchase order.
If any subsequent matching is tried the invoices are placed on a Final Matching hold.
• Allow matching distribution override: Lets you override the invoice distribution that was
created from matching an invoice to a purchase order.
• Transfer PO distribution additional information: Lets you transfer descriptive flexfield
information from a purchase order distribution to an invoice distribution when you match
an invoice to a purchase order.
You can specify default values for the following options on both the Manage Invoice Options
page and the Supplier Site page. If the supplier site does not have a value, the invoice option
setting is used. The tolerances must first be defined in the Manage Invoice Tolerances page
and are detailed later in this lesson. If the invoice exceeds either of the tolerances, it is placed
on hold.
• Quantity tolerances
• Amount tolerances
Manage Invoice Options: Discount
If you use payment terms that include discounts, these settings control what is included in the
calculation and how to allocate the discount. You can set the following options on a supplier
site to Yes, No, or Default from Payables Options: Exclude tax from calculation, Exclude
freight from calculation, and Always take discount.
• Exclude tax from calculation: Excludes tax from an invoice when the discountable
amount for an installment is calculated.
• Exclude freight from calculation: Excludes freight from an invoice when the discountable
amount for an installment is calculated.
• Discount allocation method: Specifies how to distribute discounts: All invoice lines, Tax
lines and single distribution, or Single distribution.
• Always take discount: Takes the available discount, regardless of when the invoice is
paid.

Manage Invoice Options: Prepayment
Prepayment options control advanced payments to a supplier or

employee and includes:
• Payment terms
• Settlement days
• Use distribution from purchase order.
• Show available prepayments during invoice entry.
A prepayment is a type of invoice you enter to pay an advance payment for to a supplier or
employee. For example, you may need to pay a deposit on a lease, or you may need to pay
an employee an advance for travel expenses. You can later apply the prepayment to one or
more invoices or expense reports you receive from the supplier or employee to offset the
amount paid to them.
• Payment terms: Sets the default payment terms for a prepayment. For example, it is
recommended that you use the Immediate payment terms for all prepayments.
• Settlement days: Specifies the number of days to add to the system date to calculate the
default settlement date. You can only apply a prepayment to an invoice on or after the
settlement date. This option can also be set on the supplier setup.
• Use distribution from purchase order: Builds the invoice distribution by taking the
purchase order distribution and overriding the natural account segment with the natural
account segment from the supplier site prepayment distribution or, if not defined, from
the common options prepayment distribution.
• Show available prepayments during invoice entry: Displays the number and amount of
available prepayments when you enter an invoice.

Manage Invoice Options: Approval
Approval options control the automated invoice approval process.

Once enabled you can choose to:
• Require validation before approval.
• Accounting Preferences.
• Allow force approval.
Payables provides configurable predefined invoice approval rules and the ability to add rules
using the Approval Management extensions (AMX) of the Oracle SOA Suite and Oracle
Human Workflow. The invoice approval process determines whether an invoice requires
approval, and if so, automatically routes the invoice to the applicable approvers who then
approve or reject the invoice. Invoices cannot be paid until they are approved.
If enabled, you can choose to:
• Require validation before approval: Sends invoices through the approval workflow only
after the invoices are checked for completeness and holds by the validation process.
• Accounting Preferences: The 3 choices are:
- Account regardless of approval status
- Require accounting before approval
- Require approval before accounting
• Allow force approval: Allows approving managers to override the workflow and manually
approve invoices.
Note: For more information on managing approvals see Appendix A.

Manage Invoice Options: Interest
Interest invoices are invoices that Payables creates automatically

for overdue invoices.
An interest invoice is created and paid while you are paying an overdue invoice. The interest
options are:
• Create interest invoices: Enable to calculate interest on overdue invoices and create
interest invoices. To use automatic interest rate calculation, you must also define
interest rates. You can also set this option on a supplier site to Yes, No, or Default from
Payables Options.
• Minimum interest amount: Enter the minimum amount of calculated interest below which
an interest invoice is not created.
• Interest allocation method: Select the method for allocating interest expense.
- Single distribution: Use the interest expense distribution.
- All invoice lines: Use the natural account segment from the interest expense
distribution.
• Interest expense distribution: Enter the distribution combination for interest expense if
the option Interest allocation method is set to Single distribution.

Manage Invoice Options: Payment Request
Oracle Fusion Receivables can submit payment requests to

Payables when Receivables processes customer non-credit card
refunds.
Oracle Fusion Expenses can submit payment requests for
expense reports.
Oracle Fusion Receivables and Oracle Fusion Expenses can submit requests to Payables to
disburse funds to a payee who is not defined as a supplier. When Receivables processes a
customer non-credit card refund and when Expenses processes an expense report, an
invoice is created in Payables with the invoice type of Payment Request. You can disburse
the funds and manage the payment process using the functionality that is available in
Payments.
The following options default to each payment request:
• Payment terms
• Pay group
• Payment priority

Manage Invoice Options: Self-Service Invoices
Oracle Fusion Supplier Portal lets registered suppliers create

invoices, view invoices, and view payments.
Using the Supplier Portal, a supplier can create invoices, view existing invoices to see the
status, and view the payments. If a supplier creates an invoice that is not matched to a
purchase order, the invoice is initially recorded in Payables as an invoice request. When
approved by the requester, the invoice request becomes an invoice. Payables must validate
the invoice before the payment can be processed.
The self-service invoices options include:
• Limit invoice to single purchase order: Limits an invoice to the schedules belonging to a
single purchase order. If not selected, a supplier can create one invoice for multiple
purchase orders.
• Allow invoice backdating: Lets a supplier enter an invoice for a date in the past.
• Allow unit price change for quantity-based matches: Lets a supplier enter a unit price on
an invoice that is different from the unit price on the purchase order. Select from among
the following values: No, Price decrease only, Price increase only, or Price increase or
decrease.

Practice 13-4 Overview: Managing Invoice Options

• Setting the scope for your business unit.
• Configuring invoice options for your business unit.

Manage Payment Options
Payment options control how payments are processed for

business units with the Payables Payment business function.
They include:
• Payment override options
• Account for Payment options
• Currency conversion options
• Bank Charges
The payment override options are:

• Allow payment date before the system date
• Allow override of the supplier site bank account
• Allow document category override
• Allow payee override for third-party payments
The Account for Payment settings specify when to create accounting entries for a payment.
• At payment issue: Debits the liability account and credits the cash account.
• At payment clearing: Debits the liability account and credits the cash account when the
payment clears. (You should enable this option only if Oracle Fusion Cash Management
is implemented. Otherwise payments are never accounted.)
• At payment issue and clearing: Accounts for each payment at:
- Issue time: Debits the liability account and credits the cash clearing account.
- Clearing time: Debits the cash clearing account and credits the cash account.
(This accounting is created only if Cash Management is implemented.)
Note: Realized gain or loss is calculated at all points where accounting is created.
Implementation Consideration: After you set the Account for Payment option, the only change
you can make is from account At payment issue to account At payment issue and clearing.

The Currency Conversion options are:
• Require conversion rate entry: Requires a conversion rate when you enter a payment in
a currency other than the ledger currency. If you maintain daily rates, the rate is
automatically supplied based on the date and the rate type that you enter. If daily rates
do not exist for the date and rate type, and if this option is enabled, you cannot enter or
save the transaction. If the conversion rate type is User, then you must always enter a
conversion rate. You cannot create accounting entries or pay foreign currency invoices
without conversion rates. If you do not enable this option, after you have created the
payments you can enter conversion rates manually or run the Apply Missing Conversion
Rates process.
• Conversion rate type: Specifies the default conversion rate type when you create
payments. You can change the conversion rate type at payment creation time.
Bank Charges: Bank charges are the fees that a bank charges you for transferring funds from
your disbursement bank accounts to the bank accounts of your suppliers. You can configure
your setup and payment process to automatically deduct bank charges from an invoice
payment. If you enable bank charges you must create a bank charge definition in Manage
Bank Charges. To enable you must select a Bank Charge Deduction Type:
• Standard: A typical rate that a bank charges you to transfer funds from a disbursement
bank account to a supplier bank account.
• Negotiated: A rate that you and your bank agree upon for the transfer of funds.

Practice 13-5 Overview: Managing Payment Options

• Verifying that the scope is set for your business unit.
• Reviewing the default payment option settings.

Optional Tasks to Configure Payables

Define Automated Invoice Processing Configuration
• Use the Payables imaging solution to automate invoice

creation including invoice lines.
• Invoices:
– Are scanned or sent by e-mail for recognition and validation.
– Appear in the Invoices work area for approval, accounting, and
payment.
Automated invoice processing is configured as an external or manual procedure outside the

Setup and Maintenance Work Area. Invoices that cannot be fully recognized due to data or
image quality are created as incomplete invoices. Users can review, correct, and complete
these invoices manually.
You must sign up for the Automated Invoice Processing service. Within 5 days, you will
receive two e-mail accounts for test and production environments.
Set up scanners to produce TIFF images with International Telegraph and Telephone
Consultative Committee (CCIT) Group IV compression at 300 dpi. And enable Adaptive
Thresholding technology on the scanners to remove background colors, gray scaling, and
gradients.
If the invoice is in a:
• Printed, physical format: Scan the invoice and send it by e-mail.
• Digital format: Send it directly by e-mail.

The following file extensions are supported: *.tif, *.tiff, *.png, *.jpg, *.doc, *.docx, and *.pdf.
However, for best recognition results, the application converts other document types into the
TIFF format.
The images can be in color. However, the application converts the color invoice image into a
black-and-white image because black-and-white images provide optimal optical character
recognition accuracy and a reduced image size.
Once processed, the invoices appear in the invoices work area for approval, accounting, and
payment processing.

Manage Payables Calendars
Create Payables calendars for use on:

• Payment Terms
• Automatic Withholding
• Key Indicator Reporting
• Recurring Invoices
You can create Payables calendars for use on payment terms, automatic withholding tax, key
indicator reporting, and recurring invoices that need to use a calendar different from the
general ledger accounting calendar.
When you create a calendar or add years to an existing calendar, the following attributes
control how the periods are generated:
• Calendar Types: The choices are General purpose or Payment terms. Use general
purpose for automatic withholding tax, key indicator reporting, and recurring invoices.
• Period Frequency: Determines the number of periods per year and the period name
format options. The choices are 4-4-5, 4-5-4, 5-4-4, Monthly, Other, Quarterly, and
Weekly. If you select a Period Frequency of Other, you must define calendar periods
manually.
• Periods per Year: Identifies the number of periods per year based on the period
frequency selected.
• Start Date: Represents the first date for the calendar and is the start date for the first
period.
• Period Name Format: Determines the period name. For example, if you choose the
frequency of Monthly, the format can be either MM or MMM. MM would produce a period
name beginning with numbers and MMM would be alpha. MM = 12, MMM = Dec

Manage Tax Reporting and Withholding Tax Options
There are two types of tax related options that may be required
after making payments to certain qualifying suppliers:
• US 1099 Income Tax Reporting
• Withholding Tax
Set up withholding tax using Payables or Oracle Fusion Tax. Which application you use
depends on your withholding tax requirements.
Use:
• Payables withholding tax setup to meet the basic withholding tax requirements for most
countries.
• Tax for more complex tax requirements.
Payables withholding tax reports are compatible with both the Payables and Tax withholding
tax configurations. The EMEA country-specific withholding reports are compatible with the
Tax withholding tax configuration.
Withholding tax configuration in this lesson uses the Define Payables setup.

Income Tax Reporting Options
In the United States, the Internal Revenue Service (IRS) requires

that you file a 1099 form on payments made to certain qualifying
suppliers.
Income tax reporting options control combined federal and state US 1099 filing.
• Use combined filing program: Enable to produce state records for all tax regions
participating in the Combined Filing program that have qualifying payments.
• Use supplier tax region: Enable to use the income tax region on a US 1099 supplier as
the default tax region on invoice distributions.
• Income tax region: Enter the default income tax region for invoice distributions of US
1099 suppliers if you select the Use combined filing program option and do not enable
the Use supplier tax region option.
• Include withholding distributions in income tax reports: Enable to include federal tax
withheld for US 1099 suppliers on US 1099 reports.

Withholding Tax Options
Specify withholding tax option settings and default values to

control how withholding tax is processed.
• Event Class: Apply withholding tax to standard invoices, including credit and debit
memos, or prepayment invoices.
• Apply Withholding: Apply withholding if the tax authority requires your company to
withhold taxes from suppliers.
• Process Transaction Taxes: Calculate withholding tax on transaction tax lines.
• Allow Manual Withholding: Create and adjust manual withholding tax lines for your
invoices.
• Regime Determination Set: Select the template that determines the tax regime to use for
all transactions belonging to this event class. The options include WHTSTCC and
WHTTAXREGIME.
• Calculation Point: Specify the time when withholding tax is applied, that is, Invoice,
Payment, or Both. The options available are controlled by the regime determination set.
• Tax Invoice Creation Point: Specify the time when a tax authority invoice is generated.
The options depend on the value in the Calculation Point field.
- If the calculation point is Invoice, you can select Blank, Invoice, or Payment as the
tax invoice creation point.
- If the calculation point is Payment, you can select Blank or Payment as the tax
invoice creation point.

• Include Discount: Determine whether a deduction of a discount is applied to taxable
basis of all taxes. Select Blank for the deduction of a discount to be applied based on
the taxable basis formula definition.
• Rounding Level: Apply rounding to calculated tax amounts once for each withholding tax
rate per invoice or to the calculated withholding tax amount on each invoice line.
Note: The setups of withholding tax are detailed later in this lesson.

Manage Payables Lookups
Lookups are used as lists of values in applications. Payables

comes with many predefined lookups.
Lookups have 3 customization levels:
• User
• Extensible
• System
Many fields in Payables have a list of values for users to select a valid or qualified value.
Lookup types provide many of those lists of values. For example, Pay Group, Invoice Type,
Prepayment Types, Status, and so on. Each lookup type has a list of lookup codes that create
the actual list of values.
Lookup types are assigned one of three customization levels:
• User: Create or modify all parameters of a lookup type.
• Extensible:
- Modify only certain aspects of the lookup type such as the dates
- Add new lookup codes
- Cannot delete the lookup type
• System:
- Cannot add or delete any aspect of the lookup type.
- Modify only its meaning.
Note: For more information, see the Manage Lookups topic in the appendix.

Manage Payables Descriptive Flexfields
• Descriptive flexfields provide optional expansion in a user

interface for additional required information.
• Customize descriptive flexfields to capture data that wouldn’t
otherwise be tracked by the application.
• Payables provides predefined descriptive flexfields that can be
configured and deployed for use.
Descriptive flexfields are optional but provide implementers with the ability to capture data
required by an industry or business policy that wouldn’t otherwise be captured by the
application.
Following is list of entities or tables in Payables that descriptive flexfields are available to be
configured and deployed:
• Aging Periods
• Aging Period Lines
• Withholding Tax Rates
• Payment Information
• Distribution Sets
• Distribution Lines
• Invoice Holds
• Invoices

• Invoice Gateway Header
• Invoice Distributions
• Invoice Lines
• Invoice Gateway Lines
• Periods for Payables Modules
• Period Type for Payables Modules
• Invoice Payments
• Tax Codes
• Payment Terms
• Payment Terms Details
Note: For more information, see the Manage Flexfields topic in the appendix.

Manage Payables Document Sequences
Use document sequences to assign voucher numbers to invoices

and payments.
Use the Specify Ledger Options to require sequencing for
Payables
You can set up a sequence in two ways:
• Manage Payables document sequences.
• Use the Create Chart of Accounts, Ledger, Legal Entities, and
Business Unit in Spreadsheet task.
Document sequencing can be :
• Automatic
• Manual
• Gapless
You may get two invoices with identical invoice numbers from two different suppliers. If you
assign a voucher number to each invoice, you can locate each invoice based on its unique
voucher number. Voucher numbers provide proof of completeness. If you use sequential
voucher numbers, you can confirm that no document was lost. Furthermore, certain countries
require document sequencing.
In the Specify Ledger Options page, you must select Payables under the Enforce Document
Sequencing.
• When set to Payables, indicates that invoices and payments require voucher numbers.
• Enforce Chronological Order on Document Date: Checks the accounting date on the
invoice header when you save an invoice. The date must be the same as, or later than,
the latest accounting date of an existing invoice with the same legal entity and
sequence.
Note: The Enforce Chronological Order on Document Date option applies only when you
sequence by legal entity. option to require voucher numbers. Then you can use the Manage
Payables Document Sequences task or the Create Chart of Accounts, Ledger, Legal Entities,
and Business Unit in Spreadsheet task to setup the sequencing.

Document sequencing can be assigned by one of the following methods:
• Automatic: Document sequencing assigns a unique number to each document as it is
generated, and this unique number is stored in the database. The numbering is
sequential by date and time of creation. If you define a sequence to automatically
number documents, you can provide an initial value to begin the sequence. In absence
of a custom value, the default value 1 is used.
• Manual: Sequencing requires you to assign a unique number to each document before it
is generated. In manual sequencing, the numerical ordering and completeness of a
transaction is not enforced. Users can skip or omit numbers when entering the
sequence value. However, each time that a number is assigned, the application
validates its uniqueness.
• Gapless: Sequencing is similar to automatic sequencing. It automatically generates a
unique number for each document, but does that only for successfully generated
documents. As a result, the sequence is maintained for all the documents that are
generated, and no sequence numbers are lost due to incomplete or failed document
generation. Additionally, you can control the gapless document sequencing by enforcing
the Transaction Date Validation option. When enabled, this option checks for the
transaction date of a particular document and assigns the sequence number
accordingly, to maintain the chronological order in which the documents are created and
assigned sequence numbers. The sequence numbers and the transaction dates are
chronologically correlated to prevent any mismatch of a new document sequence being
assigned to an older document or vice-versa.

Manage Distribution Sets
• Distribution sets automatically create distributions for invoices

that are not matched to purchase orders.
• Define distribution sets either with or without percentages.
A Distribution sets automatically allocate accounting distributions on invoices that are not
matched to purchase orders. Distribution sets are required if using the spreadsheet entry of
invoices.
For example, create a distribution set that allocates the advertising expense on an invoice to
four advertising departments. Add the distribution set to a supplier site assignment to use the
set on every invoice for that supplier site and business unit.
If you do not assign a distribution set to a supplier site, you can assign a distribution set to an
invoice during invoice entry.
Distribution sets can be defined in one of two ways:
• With Percentages: Use a 100 percent distribution set when the percentage of expenses
to allocate is known. For example, define a fully allocated distribution set for a rent
invoice by assigning 30 percent of the invoice amount to the facilities department, 45
percent to the sales department and 25 percent to the administration department.
• With No Percentages: Use a 0 percent distribution set when the percentage of expenses
to allocate is not known. For example, define a distribution set with no amounts
allocated to the sales facility expense account and the administration facility expense
account. You can then enter amounts for the distributions during invoice entry
depending on variables such as the monthly head count for each department.

Practice 13-6 Overview: Managing Distribution Sets

• Creating a distribution set for miscellaneous expenses.

Manage Invoice Tolerances
Invoice tolerances are the variances that you allow between

invoice information and information from purchase orders,
receipts, and consumption advice documents.
Required to setup if you need to enable tolerances in the Manage
Invoice Options page.
Tolerances can be:
• Amount based
• Quantity based.
Invoices are placed on hold if variances exceed the tolerance.
If you need to enable tolerances in the Manage Invoice Options page then you must setup the
tolerances that are used on that page.
If variances exceed specified tolerances, the invoice validation process places the invoice on
hold. For example, if the billed quantity for an item exceeds the tolerance for quantity, the
validation process applies a hold on the invoice, preventing payment until the hold is
released.
You can define percentage or amount limits for:
• Amount based:
- Order Percentage
- Maximum Ordered
- Received Percentage
- Maximum Received
- Conversion Rate Amount
- Total Amount

• Quantity based:
- Order Percentage
- Maximum Ordered
- Received Percentage
- Maximum Received
- Price Percentage
- Conversion Rate Amount
- Schedule Amount
- Total Amount
- Consumed Percentage
- Maximum Consumed
Note: A percentage tolerance of zero indicates that no variance is allowed. An active
tolerance without a tolerance limit value indicates that unlimited variance is allowed.

Manage Invoice Holds and Releases
• Payables predefines holds for the invoice validation process.

• You can also define holds and releases that you apply
manually or through workflow to an invoice.
Payables predefines holds that the invoice validation process uses. Some predefined holds
can be released manually, others require that you fix the exception before the hold can be
released. For example, if the sum of the distributions on an invoice does not equal the invoice
line amount, a Distribution variance hold is placed on the invoice. You cannot release this
type of hold manually. Instead, you must correct the exception by adjusting the distribution
amounts and validating the invoice again.
You can also define holds and releases that you apply manually or through workflow to an
invoice.
To enable the holds workflow, set the Allow Holds Resolution Routing option for the hold. The
workflow is then initiated when:
• Invoice validation places a hold.
• You manually place a hold on the Create or Edit Invoice pages.
• You void a payment and specify to place the invoice on hold.
• You submit the Import Payables Invoices process and specify to place a hold on all
imported invoices.

Manage Aging Periods
Aging periods define day ranges and column headings for the
Payables Invoice Aging report.
Navigate to: Setup and Maintenance > Select the Financials Offering > Click the Setup Button
> Payables > Show All tasks > Manage Aging Periods > Monthly Aging Periods.
This figure shows an aging period called Monthly Aging Periods.
The first column, which is called 1 Month Overdue, is defined to report invoices due for
payment up through 30 days prior to the day you submit the report. For example, if you run
the report on March 3, the 1 Month Overdue column includes an invoice due on July 3, as well
as an invoice due in February.
The second column, which is called 2 Months Overdue, is defined to report invoices due for
payment 31 through 60 days prior to the day you submit the report. For example, if you run
the report on March 3, the 2 Months Overdue column includes an invoice due on January 11.

Define Payables Tax and Withholding
The Define Payables Tax and Withholding task list includes

setups for United States (US) 1099 income tax reporting and
withholding tax. The task list includes:
• Manage Tax Regions
• Manage Reporting Entities
• Manage Tax Codes
• Manage Withholding Tax Classifications
• Manage Withholding Certificates

Manage Tax Regions
• Use tax regions for United States (US) 1099 electronic media
combined filing reporting.
• Define tax regions with reporting limit amounts and methods.
Navigate to: Setup and Maintenance > Select the Financials Offering > click Setup >
Payables > All Tasks > Manage Tax Regions.
Set reporting limit methods to one of the following:
• Same as federal: Uses the federal reporting limit instead of the region reporting limit
amount.
• Compare individually: Compares the reporting limit amount to the sum of payments for
each US 1099 miscellaneous income tax type. For example, the reporting limit for region
X is 600 USD. If you make a total of two 400 USD payments to a supplier in region X,
and classify each payment as a different 1099 miscellaneous type, Payables does not
report the supplier to region X because neither individual payment type exceeded the
region X reporting limit. In this example, Payables reports the supplier only to the federal
tax authorities.
• Compare sum: Compares the reporting limit amount to the sum of payments for all US
1099 miscellaneous income tax types. For example, the reporting limit for region X is
600 USD. If you make a total of two 400 USD payments to a supplier in region X, and
classify each payment as a different 1099 miscellaneous income tax type, Payables
reports this supplier to the region X tax authority because the sum of the payments
exceeds the region X reporting limit. In this example, Payables reports the supplier to
both federal and state tax authorities.

Manage Reporting Entities
A reporting entity is an organization that has a unique tax

identification number (TIN).
Navigate to: Setup and Maintenance > Select the Financials Offering > click Setup >
Payables > All Tasks > Manage Reporting Entities.
Reporting entities are used for United States (US) 1099 reporting. US 1099 reports
accumulate the totals for all primary balancing segment values that are assigned to a
reporting entity to derive the total amount paid.
Assign one or more primary balancing segment values to each reporting entity.
For example, an enterprise defines a reporting entity called Headquarters, which comprises
Company 1, Company 2, and Company 3. Each company is represented by a primary
balancing segment value. When you submit the US 1099 report, Headquarters is entered as
the reporting entity. The US 1099 Report prints the accumulated payments for companies 1,
2, and 3, and sums up the paid invoice distributions that have these company balancing
segment values in their accounts.

Related Reports
• US 1096 Report
• US 1099 Report
• US 1099 Invoice Exceptions Report
• US 1099 Supplier Exceptions Report
• US 1099 Payments Report
• US 1099 Electronic Media Report

Additional Withholding Tax Setups
The following Withholding Tax setups will be covered in the

Configuring Oracle Fusion Tax for Payables Lesson:
• Managing Withholding Tax Codes
• Using Rate Types
• Managing Tax Classifications
• Managing Withholding Certificates

Manage Interest Rates
Define the rates for calculating and paying interest on overdue

invoices.
If create interest invoices is enabled in Manage Invoice Options, you must define interest
rates. Interest is calculated using the interest rate in effect on the day after the invoice is due.
You can add, change, or delete a rate at any time. When a rate is not defined, no interest is
calculated and no interest invoice is created.

Manage Bank Charges
Configure your setup to have payment process requests deduct

bank charges from supplier payments.
If you enable bank charges on the payment options you must configure a definition that
details which information to use to process the deduction:
• Legal Entity
• Currency
• Settlement Priority: Normal or Express.
• Transferring and Receiving Banks
• Bank Charge Amounts

Summary

• Describe Payables terminology.
• Discuss the flow of default values.
• Understand the required tasks to configure Payables.
• Discuss the optional tasks to configure Payables.

14
Payments: Payables

Objectives

• Set up a bank account.
• Manage payment system connectivity.
• Manage payment methods and defaulting rules.
• Define payment codes and payment process profiles.
• Explain disbursement system options.
• Understand and submit a payment process request.

Practice 14-1 Overview: Creating Banks, Branches and
Accounts Using a Spreadsheet.
• Entering data into a spreadsheet.
• Uploading the spreadsheet data.
• Reviewing the bank, branch and account created from the
upload.
Note: This practice is needed to run a payment process request.
This course covers this setup in another lesson.

Practice 14-2 Overview: Creating a Payment Document
for a Bank Account.
• Creating a Payment Document for a Bank Account.
• Assigning a payment format.
Note: This practice is needed to run a payment process request.
This course covers this setup in another lesson.

Overview of Oracle Fusion Payments
Payments is an Oracle Cloud Application that serves as a

disbursement and funds capture engine for other Oracle Cloud
Applications.
As the central payment engine, Payments:
• Processes invoice payments from Oracle Fusion Payables.
• Settles receipts in Oracle Fusion Receivables against credit
cards and bank account transfers.
• Connects with external organizations like payment systems
and financial institutions for processing.
• Enables you to centralize the payment process across
business units, currencies, and geographical
regions.

Overview of Disbursements for Payments
• The Payments disbursements includes selected disbursement

setups of Payments. Disbursements is the process of paying
funds owed by your company to creditors, such as suppliers
who have provided goods or services.
• A payment can take:
– An electronic form, such as EFT.
– A printed form, such as a check.

The Disbursements Process
The disbursements process flow is as follows:

1. Invoices are entered.
- A payment method is selected or provided on the invoice.
- The invoice is validated.
2. Invoices are selected for payment as a payment process request.
3. Invoices are built into payments and validations are applied.
4. Payments are built into payment files and validations are applied.
- Bank instructions are added to the payment files.
5. Payment files are formatted.
6. If the payment files are printed, they are sent to a printer.
7. If the payment files are electronic, they are transmitted to a payment system or bank.
8. Various reports can be generated for payments transmitted electronically, such as:
- Separate remittance advice
- Payment File Register

Key Decision and Best Practice for Payment
Processing
• Key Decision: How much of the payment process should I
automate?
• Best Practice: Any combination of manual and automated
steps can be used.
– Payments should not be completely automated or completely
manual.
– The best practice is to automate everything and use quick
payment for urgent payments.
Advantages of straight through processing:

• Fewer touch points require less effort.
• Exceptions are handled outside the payment process, whereas good payments are not
held up by the few exceptions.
Advantages of tight manual control:
• Allows manual review and confirmation of payments in process.
• Allows steps to be manually initiated to accommodate specific timing needs.

Key Decision and Best Practices for Payment Selection
Criteria
Key Decision: What invoice selection criteria should I use?
Broad invoice selection criteria:
• Creates as few payment process requests as possible.
• Recommended for a Centralized or Service Provider
Processing model.
• Payment process templates can be fewer and more generic.
Payments can then derive the payment process profile automatically per payment, instead of
forcing all payments in a payment process request to have the same payment process profile.

Service Provider Model for Payables Payment Services
You can implement the following types of payment service

models:
• Dedicated
• Self-Service
• Dedicated and Self-Service
With centralized payment processing, you:

• Have better control of supplier payments. You can:
- Group credit memos from one invoice business unit with standard invoices of other
business units, thereby reducing net cash flows.
- Communicate effectively with your suppliers and reconcile any disputes.
• Develop and use organizational skills effectively.
• Reduce processing costs by generating consolidated payments for invoices across
multiple invoice business units.

Payment Services Model: Dedicated
In the dedicated model, the payment business unit:

• Works solely as an outsourced payment processing unit.
• Services other invoice business units.
In this example, the US Headquarters business unit provides payment services for both the
US West and US East business units.

Payment Services Model: Self-Service
In the self-service model, the invoice business unit:

• Acts as its own payment services provider.
• Services itself.
In this example, the UK business unit processes its own payments.

In a self-service model, the invoice business unit services itself, acting as its own payment
service provider.
Advantages of the self-service model:
• Enables each business unit to create its own payment process.
• Enables each business unit to decide who and when to pay.

Payment Services Model: Dedicated and Self-Service
In the dedicated and self-service model, the payment business

unit:
• Services other invoice business units.
• Services itself.
In this example, the UK business unit processes payments for:

• Its own invoices.
• Invoices for the Japan business unit.

Configuring Payment System Connectivity Overview
The three main components are:

• Disbursement payment file formats
• Transmission configurations
• Payment systems
Successful transmission of a payment file, a positive pay file, or other type of content, requires
coordination between sender (outbound) and receiver (inbound). The sender must format the
message according to a payment system so that the receiver can understand it and process it
correctly.

Prerequisites for Configuring Payment System
Connectivity
You must define the following in the Setup and Maintenance work
area within the Financials offering:
• Legal entities.
• Business units.
• Internal (disbursement) bank accounts.
• Oracle BI Publisher templates.
For information about the Define Legal Entities for Financials task list, see the lesson titled
“Overview of Common Applications Configuration” in this course.
For information about the Define Business Units task list, see the lesson titled “Configuring
Business Units and Reference Data Sets” in this course.
For information about setting up disbursement banks accounts, see the lesson titled
“Configuring Oracle Fusion Cash Management.”
For information about setting up Oracle BI Publisher templates, visit:
http://docs.oracle.com/cd/E25054_01/bi.1111/e13881/toc.htm.

Disbursement Payment File Formats
Banks, payment systems, and countries have electronic

formatting requirements for payment files and settlement
batches.
Each format in Payments is attached to one Oracle BI Publisher
template.
Each format creates an outbound message.
The outbound message created by the disbursement payment file format is data file on which
an Oracle Business Intelligence Publisher (Oracle BI Publisher) template is used. The
template contains prescribed formatting attributes such as data location and must meet the
requirements of financial institutions and countries. Formats enable payment systems or
financial institutions to understand transactional messages.
A format is applied to the data in a data extract and the result is a formatted file, such as a
payment file, positive pay file, or other output. Validations can be associated with formats and
are used to ensure valid transaction data.
To set up Oracle BI Publisher templates, see the guide titled Oracle Fusion Middleware
Report Designer's Guide for Oracle Business Intelligence Publisher, which you can view at
http://docs.oracle.com/cd/E25054_01/bi.1111/e13881/toc.htm.

Key Decision and Best Practices for Using Formats
Key Decision: What formats should I use?

Best Practice: Determine which payment formats your payment
system or financial institution supports.
Consider standards-based payment formats that can be used with
multiple banks:
• EDIFACT formats, such as PAYMUL, MT100, and MT103
• NACHA formats, such as Generic, CCD, PPD
• ISO20020 format

Key Decision and Best Practices for Using Formats
Key Decision: How do I customize templates?

Best Practice: Modify predefined payment formats using
Oracle BI Publisher.
• An XML extract provides Payments data.
• Use .rtf templates to create or modify layouts for checks and
reports.
– Download .rtf files from Oracle BI Publisher and save locally.
– Modify the template.
– Upload the modified template using the Oracle BI Publisher
under custom report.
For a detailed discussion of tailoring formats to your needs, see Working with Fusion
Payments Formats: Article ID 1413989.1 on Oracle Support (http://oracle.support.com).

Practice 12-1 Overview: Creating a Disbursement
Payment File Format.
• Creating a Disbursement Payment File Format.

Transmission Configuration Concepts
The following concepts apply to payments transmission:

• Transmission Protocol
• Transmission Configuration
• Tunneling Configuration
If your company wants to transmit payments to a payment system or bank, you must set up
transmission configurations. Transmission values tell the system how to transmit a message.
• Transmission Protocol: Defines the method of transmission. Examples include File
Transfer Protocol and HTTP Put.
• Transmission Configuration: Transmission details such as FTP Server IP Address,
Account User Name and Password, and remote directory which must be associated with
one transmission protocol.
• Tunneling Configuration: A type of transmission configuration that helps transmit data
through a transmission servlet that can securely connect to your payment system
without exposing internal data.

Key Decision and Best Practices for Using
Transmission Protocols
Key Decision: Which transmission protocols should I use for
payment processing?
Best Practice:
• Find out what your payment system or financial institution
supports.
• Favor transmission protocols that are predefined in Payments.

Practice 12-2 Overview: Creating the Transmission
Configuration.
• Selecting the Protocol for the Transmission Configuration
• Creating the Transmission Configuration.

Managing Payment Systems
The purpose of setting up payment systems is to process and

transmit payment files.
You must include a:
• Processing model
• Bank name
• Transmission servlet base URL
• Disbursement type
• Disbursement payment file format
• Transmission protocol
• Payment system account
If your company needs to transmit electronic disbursement payments to financial institutions,

you must set up a payment system. The set ups include:
• Processing Model: The choices are:
- Processor: A service provider that interacts directly with banks .
- Gateway: A service provider that acts as an intermediary between your company
and a payment processor.
• Bank Name: The name of the financial institution that receives the electronic payment
instruction.
• Transmission Servlet Base URL: The URL used for the transmission.
• Disbursement Type: Select electronic funds transfer and positive pay.
• Disbursement Payment File Format: The file format previously defined in this lesson.
• Transmission Protocol: The protocol previously defined in this lesson.
• Payment System Account: Used to capture your relationship with the financial
institution. It captures specific identification information required by your bank in
payment messages. For example, the financial institution may require a submitter ID
and submitter password to be included in any message You must set up these values to
avoid payment file rejections by your bank.

Practice 14-3 Overview: Creating a Payment System

• Creating a payment system.
• Creating a payment system account.

Defining Disbursements
The Define Disbursements activity enables implementers to

configure the disbursement of funds, such as:
• Managing payment methods.
• Managing payment method defaulting rules.
• Managing payment codes.
• Managing payment process profiles.
• Managing disbursement system options.

Prerequisites for Defining Disbursements
Define the following prerequisites in the Setup and Maintenance

work area within the Financials offering:
• Define legal entities.

• Define business units.
• Define internal bank accounts of the deploying company.
• Define payment system.
• Define formats.
• Define transmission configuration.
• Set up Oracle Business Intelligence Publisher templates.
For information about the Define Legal Entities for Financials task list, see the lesson titled
“Overview of Common Applications Configuration” in this course.
For information about the Define Business Units task list, see the lesson titled “Configuring
Business Units, Reference Data Sets” in this course.
For information about the Set Up Banks, Branches, and Accounts task list, see the lesson
titled “Configuring Oracle Fusion Cash Management” in Oracle Financials Cloud: Financials
Implementation, Part II.
To define payment systems, see the section titled “Setting Up Payment Systems” in this
lesson. You have already completed this setup.
To define formats, see the section titled “Setting Up Formats” in this lesson. You have already
completed this setup.
To define transmission configurations, see the section titled “Setting Up Transmission
Configurations” in this lesson. You have already completed this setup.
To set up Oracle Business Intelligence Publisher templates, see the guide titled Oracle
Fusion Middleware Report Designer's Guide for Oracle Business Intelligence Publisher, which
you can view at http://docs.oracle.com/cd/E25054_01/bi.1111/e13881/toc.htm.

Disbursement Payment Methods
Setting up disbursement payment methods is optional because

Payments predefines many payment methods.
A disbursement payment method is a method of payment that
your company uses to pay a supplier, customer, or employee.
The payment method can be:
• Electronic, such as EFT or wire.
• Printed, such as a check.
Payments predefines the following Disbursement Payment Methods:

• Check
• Electronic
• Electronic – SEPA
• Outsourced
• Wire
The purpose of creating disbursement payment methods is to define granular usage rules to
limit the use of disbursement payment methods to specific business units, legal entities, and
other attributes and to assign validations for validating the invoices, payments, and payment
files.

The level of granularity that you need for your disbursement payment methods is a factor to
consider before you define them.
The least granular payment methods are the predefined payment methods. With this
approach, you can associate each payment method with many payment process profiles and
payment formats. This approach requires less knowledge from source product users, such as
invoice entry clerks, but may involve more work later in the payment process.
Alternatively, you can define more granular payment methods. An example of a very granular
payment method is Italian EFT, to which you might add a validation that is specific to Italy.
With a more granular setup, validations are run early during invoice entry and errors can be
fixed more quickly.

Creating Usage Rules for Payment Methods
Usage rules specify when a disbursement payment method is

available for use.
You can limit the use of a payment method based on the following
transaction conditions:
• Business Units
• Legal Entities
• Payment Process Transaction Types
By default, payment methods are available on all payment process transactions.

Usage rules specify when a disbursement payment method is available for use by source
products on documents payable. By creating usage rules, you enable or disable payment
methods for each source product integrated with Oracle Fusion Payments. You can provide
different usage rules for different source products and change whether and when the payment
method is available.
In the Usage Rules tab on the Create Payment Method page, you decide whether to assign
the payment method to one of the following:
• All payees
• Specific business units, legal entities, and payment process transaction types for Oracle
Fusion Payables
• Specific business units, legal entities, and payment process transaction types for Oracle
Fusion Receivables
• Specific payment process transaction types for Oracle Fusion Cash Management

Using Validations
• Validations are rules that ensure that transactions are valid

before they are printed or submitted electronically to payment
systems. Validations ensure that disbursement transactions,
such as invoices, payments, and payment files meet specific
conditions before they can be paid.
• You can assign validations to:
– Payment methods.
– Payment formats.
• A validation can be performed at the invoice level, payment
level, or payment file level.
In payment processing, ensure that payment files sent to payment systems and financial
institutions are valid and correctly formatted. If this is not done, the payment process is
slowed, which results in additional time and cost due to problem resolution. Oracle Fusion
Payments helps you achieve straight-through processing by ensuring that payment-related
details are valid.
Payments always validates as early as possible for a given object and setup. Document
payable validations that are associated with payment methods are enforced earlier in the
process than those associated with formats. If you want validation failures to be handled by
the same person who is entering the invoice, you can associate the validation with the
payment method. This is ideal for business processes in which each person has full
ownership of the items entered. However, if you want focused invoice entry while validation
failures are handled centrally by a specialist or a more knowledgeable user, you can
associate the validation with the format.

Using Validations
This table shows the objects you can validate and when
validations are performed for the applicable setup.
Object Payment Method- Payment File Format-

Driven Validations are Driven Validations are
Enforced When… Enforced When…
The invoice is saved in The invoice installment
Document Payable
the source product. is selected for payment.
The payment is created The payment is created
by building related by building related
Payment
documents payable documents payable
together. together.
Payment File Not applicable. The payment is created.
Add comprehensive validations for any transaction attribute to ensure that you catch errors
before they are sent to the bank.
• Layer them on top of predefined validations when formats or regulations change.
• Use them to create entirely new validations for your own formats.
Associate validations with a payment method so that documents payable are validated during
invoice entry.
• Provides immediate feedback.
• Resolves errors and makes payments quickly.
• Requires knowledgeable invoice entry personnel.
• Requires a larger number of payment methods with different, associated validations.
Validate after the payment process request submission if the validation is associated with a
format.
• Allows a specialized payment process manager to resolve errors.
• Allows fewer payment methods.
• Requires less knowledgeable invoice entry personnel.

Creating or Assigning Validations to Payment Methods
Validations can be associated with the payment method. They

catch errors during data entry on documents payable. When
creating a disbursement payment method in Payments, you
create or assign validations on the Validations tab of the Create
Payment Method page.
You can:
• Select from a library of predefined validations.
• Create user-defined validations for this payment method.

Choosing Predefined Validations
• Payments provides a library of predefined validations. You

can associate these predefined validations with any payment
method or payment file format you create.
• Predefined validations are groups of individual validations that
work together for a specific purpose. Many of the predefined
validations are country-specific.
• You cannot modify predefined validations, although some
have parameters you can set to define specific values.

Creating User-Defined Validations
User-defined validations are basic validations that correspond to

simple operations. They can be used as components to build
more complex validations.
A user-defined validation specifies the object to which the
validation applies:
• Document payable
• Payment
• Payment file
For example, user-defined validations enable you to validate the following conditions:
Length of a value: Payment Detail must be fewer than 60 characters for your bank-specific
payment file format.
Whether a field is populated: Remit-to bank account is required when payment method is
Electronic.
Whether content of a field is allowed: Currency must be USD when using your domestic
payment file form.

Manage Payment Method Defaulting Rules
A payment method defaulting rule determines which payment

method needs to be defaulted on Payables invoices. Defaulting
rules have:
• Priorities
• Defaulting conditions
Oracle Fusion Payments applies the payment method defaulting rules in the prioritized order
you specify based on the defined conditions.
The conditions include:
• Business Units
• First Party Legal Entities
• Payment Process Transaction Types
• Currency
• Payee Location
If the first rule is a match, Payments provides that rule's corresponding payment method on
the invoice. Suppose you specify that the payment method for all documents processed by
Payables is first, Check, and second, EFT. If the conditions for payment method Check match
the conditions on the invoice, then payment method Check is provided on the invoice.
If the conditions for payment method Check do not match the invoice, then Payments
determines whether the conditions for payment method EFT match. If the conditions for
payment method EFT match the conditions on the invoice, then payment method EFT is
provided on the invoice.
Note: If the supplier, address, or supplier site has a default payment method selected, the
invoice defaults with the supplier defined payment method.
Practice 14-4 Overview: Creating a Payment Method.

• Creating a payment method.
• Creating usage rules.

Manage Payment Codes
Payments enables you to specify payment codes that are

required by financial institutions.
Payment codes provide details to banks or payment systems
about transaction handling, bank charges, or payment reasons.
Payments provides many predefined types of payment codes,
which include:
• Bank instruction codes.
• Delivery channel codes.
• Payment reason codes.
• Service level.
• Local instrument.
Setting up payment codes are optional. During invoice entry, the user can select an
applicable payment code or it is provided by default from the applicable supplier or supplier
site. Following are the predefined payment codes:
• Bank Instruction Codes: Bank instruction codes are values that contain information or
instructions that need to be passed to a bank or financial institution at the payment file
level.
• Delivery Channel Codes: Delivery channel codes are instructions that tell the bank how
to make the payment to the payee. A default delivery channel value can be set on the
supplier or supplier site. A value is provided by default on the invoice in Oracle Fusion
Payables.
• Payment Reason Codes: Payment reason codes are generally country-
specific identifiers provided by a country's government or central bank. These codes
provide the payment system or bank with additional details about the reason for the
payment for regulatory reporting purposes.
• Service Level: A service level code represents an agreement between you and the bank
or financial institution that specifies the level of payment services it provides.
• Local Instrument: A local instrument code is a payment instrument, such as credit card
or bank account, that is unique to a geographical area.

Manage Payment Process Profiles
A payment process profile is a required setup that is assigned to payment process requests. It
manages documents payable, payments, and payment files during the payment process.
Payment process profiles include several types of information, such as specifications for
payment file formatting and transmission. The payment method and other invoice attributes
drive the assignment of a payment process profile to each document payable, and the
payment process profile drives every subsequent step of the payment process.
The payment process profile ties together the following setups:
• Transmission configuration
• Payment system
• Payment system accounts
Payment process profiles also:
• Control usage of the payment process profile.
• Specify payment formatting, printing, and transmission behavior.
• Control creation of payments and payment files.
• Automate report generation.

Prerequisites for Defining Payment Process Profiles
Mandatory prerequisite setups in the Setup and Maintenance

work area within the Financials offering:
• Configure Payment System Connectivity
– Manage Formats.
– Manage Transmission Configurations.
– Manage Payment Systems.
— Set up payment system accounts
• Define Disbursements
– Manage Payment Methods.

Payment Process Profile Concepts
The following terms are associated with Payment Process

Profiles:
• Document Payable
• Payment Process Request
• Separate Remittance Advice
• Payment
• Payment File
• Payment File Register
• Positive Pay
• Regulatory Report
• Payment Document
Document payable: A transaction, such as an invoice, that is selected for payment.

Payment process request: A request to submit a grouping of documents payable for
processing.
Separate remittance advice: A notice sent to an external payee that lists the invoices your
company has electronically paid to the external payee's bank account.
Payment: A transfer of funds to a supplier, customer for refunds, or employee for expense
reimbursement.
Payment file: A grouping of payments to be paid the same way. The payment file is
transmitted to a bank for further processing and payment or printed as a check run.
Payment file register: An internal report for keeping a register of payments generated.
Positive pay: A document sent by your company to its payment system or bank that lists
payments made by check.
Regulatory report: Reports required by a regulatory body, such as a level of government, the
central bank, or an individual bank.
Payment document: Check stock in the format and serial number as prescribed by your
disbursement bank account.

Creating a Payment Process Profile
A Payment Process Profile includes:

• Usage Rules
• Payment System
• Payment
• Payment File
• Grouping
• Reporting
• Additional Information
A payment process profile has header information and the seven tabs. The header defines:
• Name and Code
• Description
• From Date and To Date
• Payment File Format
• Processing Type: This determines what type of file is be transmitted.
- Electronic: A payment file is transmitted.
- Printed: A positive pay file is transmitted.
• Default Payment Document (Optional)
• Payment Confirmation Point: When the payment file is formatted, When the payment file
is transmitted, or Manual confirmation only.

Payment Process Profiles: Usage Rules Tab
A payment process profile can be created generically for use with

all payments. By creating usage rules, you can limit the use of a
payment process profile based on the following transaction
conditions:
• Payment Method
• Disbursement Bank Account
• Business Unit
• Currency
When you set up a payment process profile, you specify the values on a transaction that are
compatible with it. You can specify whether the payment process profile can be used on a
document payable (invoice) based on its payment method, disbursement bank account,
business unit, or currency. For example, if the payment format associated with the payment
process profile allows only a specific currency, then enter that currency in the usage rules so
that the payment process profile can be used only on documents payable with the appropriate
currency.
The payment process profile that is applied to a document payable depends, in part, on the
usage rules specified on the Usage Rules tab of the Create Payment Process Profile page.
When you submit a payment process request, Payments compares the attributes of each
transaction to the payment process profile provided on the Submit Payment Process Request
page. Any transactions whose attributes are in conflict with that payment process profile's
usage rules fails validation. If no payment process profile has been selected, Payments
compares the attributes of each transaction to all existing payment process profiles to
determine whether one payment process profile is available for which the usage rules are a
match with the transaction attributes. If a match does not occur, a customized implementation
or user intervention may be needed to determine the appropriate payment process profile to
use.

Payment Process Profiles: Payment System Tab
A payment system is:

• Required for electronic payment processing.
• Optional for printed payment processing.
If the payment process profile is used for electronic payment processing, you select a
payment system and enter details that enable the application to electronically transmit files to
that payment system within the context of a payment system account. You can also select
Automatically transmit payment file after formatting to facilitate straight through processing.
If the payment process profile is used for printed payment processing, a payment system is
not required for payment file handling, but you can optionally select a payment system and
transmission details so that the system can electronically transmit positive pay files to your
bank.

Payment Process Profiles: Payment Tab
The Payment tab controls:

• Document grouping
• Document limits
The Payment tab controls options for documents payables become payments. It controls:
• Document Grouping: Specify document grouping options to define rules that are used to
group documents payable into payments when this payment process profile is used. For
example, if you select the due date, only payments with the same due date is grouped
into a single payment. Documents can be grouped by:
- Unique remittance identifier
- Remittance message
- Due date
- Bank charge bearer
- Payment reason
- Settlement Priority
- Delivery channel
- Ultimate Debtor
• Document Limits: Enumerates the maximum documents per payment.

Payment Process Profiles: Payment File Tab
The Payment File tab specifies:

• File formats, payment file prefix, directory, and extension.
• Payment grouping rules
• Payment limits
• Payment sorting
• Bank instructions
The payment file tab specifies information about the electronic payment file that is transmitted
to the bank. It determines:
• Payment File Accompanying Letter Format
• Outbound Payment File Directory
• Outbound Payment File Prefix
• Outbound Payment File Extension
The payment file tab also controls:
• Payment Grouping Rules: Specify how payment files are created when this payment
process profile is used. For example, if you select Payment Date, only payments that
have the same payment dates are grouped into a single payment file. Payments can be
grouped by:
- Business Unit
- First party legal entity
- Payment currency
- Payment date
- Payment function
- Payment reason

- Disbursement bank account
- Payment process request
- Bills payable
- RFC identifier
• Payment Limits: You can limit payments by:
- Currency
- Number of Payments
- Conversion Type
• Payment Sorting: When you specify sort order, payments within a payment file are
ordered as specified. Sort order also determines the ordering of payments in the
payment file register. You can specify up to 3 sort orders.
• Bank Instructions: The formatting process maps the information you want included in all
payment files to payment file positions according to the payment file format specification.
You can include:
- 2 Bank Instructions
- Bank Instruction Details
- 2 Payment Text Messages

Payment Process Profiles: Payment File Tab
The Payment File tab also specifies:

• Batch booking
• Overrides
• Periodic sequences in format
• Batch Booking: Select Yes if you want to use this feature.

• Overrides: Decide whether you want this payment process profile to contain one or
multiple service level and delivery channel combinations. If you select an override
option, the payment file contains the service level and delivery channel combination you
select, rather than those specified in supplier setup. If you do not select any override
options, the payment file can contain multiple combinations.
• Periodic Sequences in Format: If your payment system or bank requires sequencing of
the payments or payment files you transmit, you must specify the numbering sequence
in the payment format that is used to make the payment. You must include:
- Sequence Identifier: Enter the same value that you entered in the payment format
for the Define Sequence field for payment files.
- Reset Sequence Value: Specify the value at which the sequence should restart
when the sequence is reset.
- Last Used Number: Sequence number that was actually used in the last payment
file.

Payment Process Profiles: Grouping Tab
The grouping tab is used to create multiple groups of payments

for:
• ISO SEPA payment files
• ISO CGI payment files
Specify the grouping parameters to create multiple groups of payments within an ISO SEPA
or ISO CGI payment file when this payment process profile is used. The transaction grouping
rules can be based on:
• Payment Date
• Disbursement Bank Account
• Ultimate Debtor
• Charge Bearer
• Service Level and Delivery Channel
• Category Purpose
• Settlement Priority

Payment Process Profiles: Reporting Tab
The reporting tab holds the formats and other options for various
reports like:
• The Payment File Register
• The Positive Pay File
• The Separate Remittance Advice
• Regulatory Reporting
You specify the formats for the generation of payment reports for:
• The Payment File Register: A report that is created for each payment file. The register
lists details of each payment that is contained in that payment file. You can select the
format with or with out detail and whether to automatically submit when payment is
confirmed.
• The Positive Pay File: Once payment documents are recorded as printed, a positive pay
file can be generated if you set up this optional feature. Positive pay prevents fraud by
sending your bank a list of payments made by check. You must specify:
- Format
- File Prefix, Extension, and Directory.
- Whether to automatically transmit file.
• The Separate Remittance Advice: Separate Remittance Advice is a report, which is an
optional feature initiated by the first party payer sent to a payee, that lists the documents
payable paid as part of each payment. You must specify:
- The Format and whether to automatically submit when payment is confirmed and
whether to allow multiple copies for payment file.

- Conditions: Whether to create the report for All payments, Number of payments, or
Payments detail length.
- Delivery Method: Select either e-mail, fax, or printed.
• Regulatory Reporting: You must select either:
- No Reporting
- Report directly to central bank
- Reporting made by bank

Managing Disbursement System Options
Disbursement System Options provide default values for

submitting payment process requests. They can be set at two
levels:
• Enterprise
• Business unit
To help drive consistency and save time, Payments can provide default values that automatically
populates certain fields on the payment process request. They can be set at two levels:
• Enterprise: These are system wide settings and apply to all Business Units. You can set the
following default options:
- System Settings: Set the payment method default basis, the separate remittance advice
from e-mail, and separate remittance advice subject.
- Validation Failure Results: Set the default for both the documents and the payments.
- Payment Review: Whether to stop the process to review the proposed payments after
creation.
- Payment Process Request Status Report Format: Define the format and whether to
automatically submit at payment process request completion.
- Payment Files: Whether to save the payment files in the database.
• Business Unit: Business Unit defaults override the enterprise level defaults. They include:
- Setting the payment method default basis, the separate remittance advice from e-mail, and
separate remittance advice subject.
- Default payment specifications for Payee’s bank bearer charge format and whether to pay
each document alone.

Practice 14-5 Overview: Creating a Payment Process
Profile.
• Creating a payment process profile.

Payment Document and Reference Numbers
Payments enables you to generate payment document numbers

and payment reference numbers for:
• Checks
• Electronic payments
You can meet a region or country-specific requirement if the
required number of digits for payment reference numbers is
different from the number of digits in the Payments-generated
payment reference numbers.
When Payments processes a payment process request, it generates a unique number, known
as a payment reference number, which identifies each payment. The payment reference
number starts with 1 and increments for every payment.
For checks you can choose:
• Blank Stock: If you select blank stock you only need to supply the first available
document number.
• Prenumbered Stock:
This identifier is transmitted to your payment system or bank.
If you do not enable numbering for electronic payments, then the application-generated
payment reference numbers are stamped on electronic payments and passed to Oracle
Fusion Payables as the reference numbers.
If you do enable payment document numbering for electronic payments, then payment
document numbers, as well as payment reference numbers, are generated for electronic
payments. The payment document numbers are then passed to Payables as the reference
numbers.

Payment Process Requests
A Payment process request is a batch process submitted for the

selection of invoices, grouping of invoices in to payments and
grouping of payments in to payment file.
You can submit a payment process request on the Submit
Payment Process Request page. You can also create a template
on the Create Payment Process Request Template page and
schedule the template to submit the payment process request
later.
For each payment process request, you can specify:
• Selection criteria
• Payment attributes
• Processing options
When your organization submits a pay run, it is done through a payment process request. A
best practice is to set up templates for the most common or recurring type payments. For
instance, you might set up a template for each business unit and for each payment method. In
other words, have a template for the electronic payment method and another one for check
method payments. If there is not a template for a particular pay run, the pay run can also be
dynamically created.

Payment Process Requests: Selection Criteria Tab
Navigate to: Payables > Payments > Tasks pane tab > Create Payment > Selection Criteria
tab.
Selection Criteria: This tab determines which installments are selected for payment. It can
include one or a combination of the following:
• Pay through date: Latest due date for an installment.
• Pay from date: Earliest due date for an installment.
• From and To Payment Priority: Lowest and highest payment priority assigned to an
installment.
• Date Basis: Basis for the date that affects installment selection and whether to take a
discount.
• Include zero amount invoices: Include invoices that have a zero amount due.
• Pay groups: Invoice categorization for payment. The default setting includes all pay
groups, but you can specify one or more pay groups.
• Currencies: Currencies for invoices and payments. The default setting includes all
currencies, but you can specify either one or more invoice currencies, or one or more
payment currencies.

• Business units: Business units for invoices and payments. The default setting includes
all business units. If you specify:
- A payment business unit, the selection process finds installments for the invoice
business units that the payment business unit services.
- An invoice business unit, the selection process finds installments for that invoice
business unit.
• Legal entities: Legal entity associated with an invoice. The default setting includes all
legal entities, but you can specify one or more legal entities.
• Supplier type: Supplier classification, such as tax authority or contractor.
• Payment method: Method of payment for an installment.
• Invoice conversion rate type: Type of rate that converts the invoice currency to the
ledger currency.
• Supplier or party: Supplier or party on an invoice.
• Invoice group: User-defined name assigned to one or more invoices.

Payment Process Requests: Payment and Processing
Options Tab
Navigate to: Payables > Payments > Tasks pane tab > Create Payment > Payment and
Processing Options tab.
Payment Attributes:
• Payment Date: The effective date of the payment.
• Disbursement Bank Account: The internal bank account that will be used for the
payment.
• Payment Document: This will limit the process to one type of document, either printed or
electronic.
• Payment Process Profile: Provides many defaults for the payment process.
• Payment Conversion Rate Type: If processing a payment in a currency other than the
functional currency the conversion rate type will be used to convert the payment to the
functional currency.
• Settlement Priority Override: Use this to override the payment process profile’s
settlement priority.

• Bank Charge Bearer Override: The party that agrees to assume the liability for bank
charges assessed on a transaction can be overridden with another party.
• Starting Voucher Number: If using voucher numbers, you can include the starting
number for the payment.
• Cross Currency Rate Type: If using cross currency, provide the conversion rate type.
Note: These attributes don’t affect installment selection.

Payment Process Requests: Payment and Processing
Options Tab
Navigate to: Payables > Payments > Tasks pane tab > Create Payment > Payment and
Processing Options tab.
The processing options for a payment process request determine the level of automation for
that request. For example, you can set options that submit the request through to completion
without stopping, or you can stop the request to review selected installments. The options are:
• Apply credits up to zero amount payment: Applies credits and creates a zero amount
payment if the sum of the selected installments is negative after the installments are
grouped for payment.
• Review installments: Stops the payment process request after selecting the installments.
You can:
- Review installments
- Add or remove installments
- Edit payment and discount amounts
- Specify user conversion rates
- Calculate withholding and interest
• Review proposed payments: Stops the payment process request after grouping
installments into payments and before building the payments.

• Create payment files immediately: Creates payment files for the submitted request
instead of waiting to combine payments from other requests into payment files.
• Validation failure handling for documents: Specifies processing instructions for handling
document validation failures.
• Validation failure handling for payments: Specifies processing instructions for handling
payment validation failures.

Practice 14-8 Overview: Submit a Payment Process
Request
• Submitting a payment process request.
• Confirming generation of electronic payment numbering.

Summary

• Set up a bank account.
• Manage payment system connectivity.
• Manage payment methods and defaulting rules.
• Define payment codes and payment process profiles.
• Explain disbursement system options.
• Understand and submit a payment process request.

15
Receivables

Objectives

• Understand key concepts in Oracle Fusion Receivables.
• Understand how the Rapid Implementation spreadsheet
creates setups for Receivables.
• Understand required and optional setups for Receivables.
• Understand implementation considerations for setting up:
– Customers and parties.
– Transactions.
– Receipts.
– Revenue management.

Order to Cash
Oracle Fusion Receivables provides a streamlined and user-friendly interface for Receivables
professionals both to create invoices and other transactions and to manage the entire cycle of
billing customers and processing customer payments.
This lesson describes the setups necessary to enable transaction, receipt, and revenue
processing for a new business unit in Oracle Fusion Receivables.

Configuring Receivables: Rapid Implementation
The following required tasks are completed during the General

Ledger Rapid Implementation spreadsheet upload process:
• Set Receivables System Options.
• Define AutoAccounting Rules.
• Define Receivables Activities.
• Define Remit-to Address.
• Define Statement Cycles.
The following tasks also appear in the Define Receivables Configuration for Rapid
Implementation task list, but are not required to enable Receivables for transactions and
receipts:
• Manage Standard Memo Lines
• Manage Funds Capture Payment Methods
• Manage Funds Capture Process Files
• Manage Internal Payees
• Manage Payment Systems
• Manage Lockbox
• Manage Transmission Formats for Lockbox
• Define Approval Limits
• Upload Customer Data

Use the Natural Accounts tab to enter Receivables accounts:

• Asset - Cash
• Asset - Confirmed Receipts
• Asset - Remitted Receipts
• Asset - On Account Payments
• Asset - Unapplied Cash
• Asset - Accounts Receivable
• Asset - Unbilled Receivables
Using the detailed account types enables the system to populate the required account
combinations for many of the required setup tasks.
Note: The account combinations must exist in the combinations table.

• Expense - Discounts Given

• Expense - Freight
• Expense - Realized Gain/Loss on Foreign Currency
Conversions
• Expense - Rounding Difference and Balancing Adjustments
• Liability - Unearned Revenue
• Revenue - AutoInvoice Clearing
• Revenue - Revenue
• Liability - Tax Payable

Configuring Receivables: Complete Your Setup
After you upload the GL Rapid Implementation Spreadsheet,

perform these tasks to complete your Receivables setup:
• Review the automatically created setups.
• Manually perform the remaining required setups.
• Perform any optional tasks.
• Open an accounting period.
Even though the Rapid Implementation spreadsheet configured some of the tasks, you must
also perform these steps to complete your Receivables setup:
• Open and review the setup objects that were created automatically:
- Receivables System Options: Review and update the default settings to meet your
needs.
- AutoAccounting Rules: Creates accounts for transactions. Review your
AutoAccounting structure.
- Remit-to Address: Verify that the address of the default legal entity appears as the
remit-to address.
- Receivables Activities: Creates accounts for activities that are not transactions or
payments. Verify the account assignments for the Earned Discounts, Unearned
Discounts, and Adjustments activities.
- Statement Cycles: Creates the statement cycle dates for each business unit using
the three predefined statement cycles of Quarterly, Monthly, and Weekly.
• Manually perform the remaining required setups: Create a receipt method that creates
accounts for payments and assign a remittance bank account; define approval limits for
your users; create or upload your customer data.
• Perform any optional tasks that your company may require, such as transaction types,
transaction sources, standard memo lines, and so on.
• Open an accounting period. After your setup is complete, you must open an accounting
period before you can create transactions and generate accounting.
Managing the Receivables System Options
The system options are divided • Cash Processing

into two main tabs: – General Information
• Billing and Revenue – Application Exception
– General Information Rule
– Accounting – Accounting
– Transactions – Automatic Receipts
– Transaction Delivery – Bills Receivable
Using E-Mail
– Statement Delivery Using
E-Mail
– Late Charges
– Customers
– AutoInvoice
– Tuning Segments
One of the setups that the GL Rapid Implementation spreadsheet upload creates is the
Receivables System Options. You need to review what was created and if necessary edit
these options.

Managing Receivables System Options: Billing and
Revenue General information
The required fields include:
• Split Amount
• Days in Days Sales Outstanding Calculation
• Application Rule Set
• Discount Basis
The General section of the Billing and Revenue tab includes:

• Split Amount: Used to determine the number of invoices over and under this amount, as
well as the total amounts remaining.
• Days in Days Sales Outstanding Calculation: Used when calculating your conventional
days sales outstanding.
• Sales Credit Percent Limit: Enter a value in this field to limit the percentage of revenue
plus nonrevenue sales credit that a salesperson can have on any transaction line.
Note: If you do not enter a value in the Sales Credit Percent Limit field, then no sales
credit limit validation is performed during revenue accounting.
• Require Salesperson: Enable this option to require that you enter salespersons when
entering transactions.
Note: If you intend to use revenue accounting, you must enable the Require
Salesperson system option. Revenue accounting requires that you assign sales credits
to all transactions that can be adjusted for either revenue or sales credits.
• Print Remit-to Address: Option to print your remit-to address on customer statements.

• Print Home Country: Option to print your home country on customer statements that
refer to addresses in that country. Enabling this option is required to run the Create
Customer Statements program.
• Default Country
• Application Rule Set: Determines how to reduce the balance of line, tax, freight, and late
charge amounts on a transaction when a receipt or credit memo is applied. Receivables
uses the Application rule set assigned to the transaction type of the open debit item to
process payment applications. If no Application rule set is assigned to the transaction
type, then Receivables uses the Application rule set assigned to System Options.
• Discount Basis: Default discount basis for all payment terms. You can update this value
on individual payment terms. The discount basis determines what transaction amounts
Receivables uses to calculate discounts for payment terms.
• Allow Unearned Discounts: Allows discounts to be taken after the discount period
passes. You define discount periods when defining your payment terms. Important: The
Receivables System Options record is the only place that determines whether you can
accept unearned discounts for the given business unit.
• Discount on Partial Payment: Allow or disallow discount if a customer does not pay in
full. If this option is enabled, you can still choose not to allow discounts on partial
payments at the transaction level when defining payment terms.
• Allow any Business Unit to Process Receipts
• Exception Rule Adjustment Activity
• Exception Rule Adjustment Reason
• Credit Card Receipt Method
• Credit Card Remittance Bank Account
• Credit Card Receipt Business Unit
• Bank Account Receipt Method
• Bank Account Remittance Bank Account
• Bank Account Receipt Business Unit

Managing Receivables System Options: Billing and
Revenue Accounting
• Tax Account
• Cross-Currency Rounding Account
• Realized Gains Account
• Realized Losses Account
• Header Rounding Account
• Days per Posting Cycle
The Accounting section on the Billing and Revenue tab includes:

• Tax Account
• Unallocated Revenue Account
• Cross-Currency Rounding Account
• Realized Gains Account
• Realized Losses Account
• Automatic Journal Import
• Header Level Rounding: Enable the Use header level rounding option and assign a
Header Rounding account to maintain rounding differences when converting foreign
currency transactions to the ledger currency. If you enable the Use header level
rounding option, Receivables displays a rounding distribution line for all transactions,
regardless of currency. If the transaction is in the ledger currency, then the amount of
this line is zero.
Important: You cannot disable this option after you enable it and save your system
options.
• Days per Posting Cycle:: Enable this option to post transactions in smaller groups. This
ensures that you do not run out of rollback space during posting. For example, if your
accounting period is 30 days and you set this value to 30, the posting program uses only
one cycle. If your accounting period is 30 days and you set this value to 17, the posting
program uses two cycles. Best practice is to set this field to a value that is less than the
number of days in your accounting period.
Receivables System Options: Billing and Revenue
Transactions
• Tax Invoice Printing Options
• Document Number Generation Level
• Tax Invoice Printing Options: The choices are:

- European Tax Format: Does not itemize tax information for each line, but does
print tax rates as the last column of invoice lines. Prints freight items last. At the
end of the invoice, the Tax Summary by Tax Name section includes a summary of
taxable amounts and tax charged for each tax rate code.
- Itemize and Sum: Itemizes tax information for each invoice line. At the end of the
invoice, the Tax Summary by Tax Name section includes a summary of the tax
charged for each tax rate code. At the end of the invoice, Receivables prints the
invoice subtotal, tax, shipping, and invoice total.
- Itemize Taxes: Itemizes tax information for each invoice line.
- Itemize with Recap: Itemizes tax information for each invoice line. At the end of the
charged for each tax rate code.
- Recap: Does not itemize tax information for each line. At the end of the invoice, the
Tax Summary by Tax Name section includes a summary of the tax charged for
each tax rate code.
- Summarize by Tax Name: Does not itemize tax information for each line. At the
end of the invoice, the Tax Summary by Tax Name section includes a summary of
the tax charged for each printed tax name and rate.
- Sum Taxes: Does not itemize tax information for each line. At the end of the
charged for each tax rate code. At the end of the invoice, Receivables prints the
invoice subtotal, tax, shipping, and invoice total.
- Total Tax Only: Displays only the total tax amount at the bottom of the document.
• Document Number Generation Level: The choices are:
- When Saved
- When Completed
- None
• Item Validation Organization: The Master Organization for Items defined in the Item
Master tables.
• Allow Change to Printed Transactions: Enable this option to allow updates to printed
transactions. This option also determines whether you can update a customer address
when printed, posted, or applied transactions are assigned to that address. Important:
You cannot update a transaction if it has activity against it, regardless of how you set
this option. Examples of activity include payments, credit memos, adjustments,
accounting, and inclusion of the transaction on a balance forward bill.
• Allow Transaction Deletion: Enable this option to allow a transaction to be deleted from
Receivables after it has been saved. If you do not enable this option, all Receivables
users are prevented from deleting transactions. Important: If an installation is legally
required to use document sequences with gapless numbering for transactions, then you
should not enable this option.

Transaction and Statement Delivery Using E-Mail
You can set Receivables system options to send transactions and statements as a PDF file to
the designated e-mail addresses of customer accounts and sites. Enter the appropriate
settings in the Transaction Delivery Using E-Mail section of Billing and Revenue System
Options:
• From E-Mail: E-mail address of your enterprise.
• From Name: Name of your enterprise.
• Reply-to E-mail: E-mail address that your customers can send an e-mail to.
Note: You must enter an e-mail address in either the From E-Mail field or the Reply-to E-
Mail field. All other fields are optional.
• E-Mail Subject: Text of the e-mail subject line.
• Include Business Unit in E-Mail Subject: Option to include the name of your business
unit in the subject line.
• Include Transaction Number in E-Mail Subject: Option to include the transaction number
in the subject line.
• E-Mail Body: Text of the e-mail message that accompanies transactions.
Note: Set up the customer account and site profile for each relevant customer.

Receivables System Options: Billing and Revenue Late
Charges
If enabled, provide:
• Average Daily Balance Calculation Basis
• Average Daily Balance Calculation Period
• Interest Invoice Transaction Type
• Debit Memo Charge Transaction type
• Interest Charge Activity
• Penalty Charge Activity
• Late Charge Transaction Source

Customers
Determines:
• Grouping Rule
• Create Reciprocal Customer
The customer’s section determines:

• Grouping Rule: Used by AutoInvoice to group revenue and credit transactions into
invoices, debit memos, and credit memos. Grouping rules specify attributes that must be
identical for lines to appear on the same transaction. Oracle predefines a default
grouping rule.
• Create Reciprocal Customer: If enabled the system allows the creation of reciprocal
relationship between customers. Reciprocal customers are allowed to pay each other’s
bills.

AutoInvoice
• Purge Interface Tables option
• Maximum Memory in Bytes field
• Log File Message Level field
• Accounting Dates Out of Order
Use the AutoInvoice section of the Billing and Revenue tab of the Receivables System
Options pages to set these system options:
• Purge Interface Tables: If enabled, the system automatically purges the AutoInvoice
Interface tables after import of records successfully transferred to Receivables. Do not
enable this option if you want to purge the table manually.
• Maximum Memory in Bytes field: Amount of memory to allocate to AutoInvoice for
validation. The default is 65535 bytes. For best results, enter a value that is the
maximum number of records that you import—rounded to an even number—multiplied
by 1024.
• Log File Message Level field: Enter a value from 0 to 5 to indicate the amount of detail
to display in the AutoInvoice log file. For day-to-day business needs and to improve
performance, set the level to 0. If you experience errors while running AutoInvoice, you
can set the output to a higher level to review more detailed information in the log about
the errors.
• Accounting Dates Out of Order: If the accounting dates are out of order choose whether
to reject or adjust the transactions.

Tuning Segments
To increase the performance of AutoInvoice for the
MTL_SYSTEM_ITEMS table.
If you want to increase the performance of AutoInvoice and indices already exist for the
MTL_SYSTEM_ITEMS table, use the value that you specified for your index as your System
Items Flexfield tuning segment. If you defined a concatenated index, use the first column of
your concatenated index.
If no indices exist for the MTL_SYSTEM_ITEMS table, enter the segment with the most
distinct values for your System Items Flexfield tuning segment.

Receivables System Options: Cash Processing General
Information
For receipt processing, you can include:
• AutoCash Rule Set
• Match Receipts By
• AutoMatch Rule Set
• Days to AutoApply a Receipt
• Chargeback Due Date
• AutoCash Rule Set: Default rule for applying receipts to transactions when no
transaction reference is available for the receipt. Receivables looks for the AutoCash
rule set defined in the profile either at the site or customer level to apply the receipt. If no
AutoCash rule set is assigned to a profile, then Receivables applies the receipt using
the AutoCash rule set assigned to System Options and the number of discount grace
days defined in the site or customer profile. The discount grace days value is used when
a discount is available on the payment terms and the number of discount days has
expired.
• Match Receipts By (4): Set up to 4 levels of what the system matches the receipts by.
The choices are:
- Balance Forward Billing Number
- Contract Number
- Transaction Number
- Purchase Order
- Sales Order
- Shipping Reference

• AutoMatch Rule Set: Used with AutoApply to evaluate the references belonging to
transactions and the receipts applied to them. Setting up AutoMatch is discussed in
more detail later in the course. It is required for SmartReceipts. The settings in the
AutoMatch rule set provide these recommendations:
- Use AutoApply: AutoApply matches customers to receipts with incomplete
customer information, and matches transactions to receipts and either applies
receipts automatically or presents transaction recommendations for receipt
application to you for manual processing. Enable this option to use AutoApply to
process receipts entered manually, uploaded by spreadsheet, and created through
lockbox. It is required for SmartReceipts.
Important: If you do not enable AutoApply, and if you do not set up an AutoCash
Rule Set to indicate how to apply receipts, all receipts that you create are left
unapplied.
- Days to AutoApply a Receipt field: Enter in this field the number of days that
AutoApply attempts to apply a receipt to a transaction. This is often used for
customers that pay for transactions before they are created.
- Require Billing Location for receipts: Enable this option to require that a bill-to site
be associated with a receipt. If enabled, Receivables does not create receipts that
do not have a bill-to site. If you enable this option, you should also enable the
Require Billing Location option in the lockbox. Note: Use this option for customers
without statement sites. If you do not enable this option, and you have receipts for
customers without statement sites or a bill-to site, the unapplied amount of the
receipt does not appear on any statements for this customer.
- Allow Payment of Unrelated Transactions: Allows a customer to pay another
customer’s invoice. There must be a relationship between the two customers.
• From and To Write-Off Limit per Receipt: Sets the range for write-offs.
• Minimum Refund Amount: Set a limit to refunds to prevent system generated small
amount refunds.
• Chargeback Due Date: Enter in this field the default due date to use when creating a
chargeback. Use chargebacks to create a new debit item for a customer when closing
an existing debit item. For example, a customer sends a payment of $75 for a $100
invoice. You apply the receipt to the invoice, and create a chargeback for the balance
due. Select the default due date to use when creating a chargeback:
- Current Date: The system date.
- Deposit Date: The receipt deposit date.
- Open Invoice Due Date: The due date of the invoice or debit memo.
- Receipt Date: The date that the receipt was entered.
• Allow Payment Deletion: Allows a user to delete and payment. If gapless numbering is
required this setting should not be enabled.

Receivables System Options: Cash Processing
Application Exception Rule
This includes:
• Application Exception Rule Set
• Exception Rule Write-Off Activity
• Exception Rule Refund Payment Method
Application Exception Rules Set: Used to manage remaining amounts after AutoApply
processing. The AutoApply process uses the details of the Receipt Application Exception
Rules either to process overpayment and underpayment events automatically or to present
them for user review.
Exception Rule Write-Off Activity: The receivables write-off activity that provides the General
Ledger account.
Exception Rule Refund Payment Method: If the exception generates a refund, this payment
method is included with the payment request created for payables.

Accounting
Use the Accounting section of Cash Processing Receivables System Options to specify
accounts for conversion rate activities and rounding errors:
• Realized Gains Account: Records gains on foreign currency conversion rate fluctuations
between the time the transaction is entered and the time the receipt is applied.
• Realized Losses Account: Records losses on foreign currency conversion rate
fluctuations between the time the transaction is entered and the time the receipt is
applied.
• Cross-Currency Rate Type: The default rate type for daily rates used in the currency
conversion calculation.
• Cross Currency Rounding Account: Records any rounding error amounts created during
a cross-currency receipt application.

Automatic Receipts
If using automatic receipts these options improve performance:
• Receipt Confirmation Threshold Amount
• Invoice per Commit
• Receipts per Commit
Receipt Confirmation Threshold Amount: An automatic receipt batch with a total amount
below the value you enter does not require confirmation.
Invoice and Receipts per Commit: Enter values large enough to avoid intermediate saves in
the program. You should use values that can handle your largest automatic receipt and
remittance batches.
To help determine the values to use, refer to the end of the log file of your largest automatic
receipt batch and remittance batch to see the number of receipts marked for the batch. Assign
these values as Invoices per Commit and Receipts per Commit.
You should only reduce these numbers if you run out of rollback segments.

Receivables System Options: Cash Processing Bills
Receivable
If enabled, include:
• Bills Receivable Transaction Source
• Allow Factoring of Bills Receivable without resource

Rapid Implementation and Receivables System Options
The tables on the next three slides indicate the settings and data
created by the Rapid Implementation spreadsheet upload.
• All options not included in these tables are not enabled.
• All fields not included in these tables contain no values.

Rapid Implementation: System Option Settings
System Option Value

Split Amount field 2500
Discount Basis field Invoice Amount
Days in Days Sales Outstanding 30
Calculation field
Print remit-to address option Enabled
Print home country option Enabled
Tax Account field Liability - Tax Payable default account
for the business unit
Automatic journal import option Enabled
Days per Posting Cycle field 15

System Option Value

Tax Invoice Printing Options field Total Tax Only
Document Number Generation Level When Completed
field
Grouping Rule field DEFAULT
Purge Interface Tables option Enabled
Maximum Memory in Bytes field 3145728
Log File Message Level field 0
AutoCash Rule Set field Oldest transaction first
Application Rule Set field Line and Tax Prorate

System Option Value

Match Receipts By field Transaction Number
Chargeback Due Date field Current Date
Realized Gains Account field Expense - Realized Gain/Loss on
Foreign Currency Conversions default
account for the business unit
Realized Losses Account field Expense - Realized Gain/Loss on
Foreign Currency Conversions default
Cross Currency Rate Type field Corporate
Cross Currency Rounding Account Expense - Rounding Difference and
field Balancing Adjustments default
Invoices per Commit field 500
Receipts per Commit field 500

Practice 15-1 Overview: Reviewing Receivables
System Options
This practice covers topics:
• Reviewing the Billing and Revenue options for your Business
Unit.
• Reviewing the Cash Processing options for your Business
Unit.

Managing AutoAccounting Rules
Another setup created by the GL Rapid Implementation Spreadsheet are AutoAccounting

rules. They provide default accounting information for transactions that you enter manually or
import using AutoInvoice. You must define AutoAccounting before you can enter transactions
in Receivables. When you enter or update a transaction, you can override the default general
ledger accounts that AutoAccounting creates.
Define an AutoAccounting record for each account type. You can then assign either a table
name or constant value to each segment of the account.
Following are the available account types:
• AutoInvoice Clearing: Clearing account for imported transactions. Holds any difference
between the specified revenue amount and (Sale Price * Quantity).
• Freight: Freight account for transactions.
• Receivable: Receivable account for transactions.
• Revenue: Revenue account for transactions, including late charges of type invoice or
debit memo.
• Tax: Tax account for transactions.
• Unbilled Receivable: Unbilled receivable account for transactions that use the In Arrears
invoicing rule.
• Unearned Revenue: Unearned revenue account for transactions that use the In
Advance invoicing rule.

AutoAccounting Rules: Table Names and Constant
Values
AutoAccounting rules use either the table name or constant value to retrieve information for
each accounting flexfield segment of a given account type.
Use a constant value if you want AutoAccounting to always use the same value for a given
segment. You must ensure that you enter information that is valid for this segment. For
example, if you defined your Company segment as a two-character segment with valid values
ranging from 00 to 10, you must enter a two-character value within this range.
When you use a table name, make sure that general ledger accounts are defined for the
source. For example, if you select the Company segment to be derived from the transaction
type for Revenue, the revenue account must be entered for all transaction types.
The table names are:
• Bill-to Site: Receivables uses the account value associated with the customer’s bill-to
site.
• Salesperson: Receivables uses the account value associated with the salesperson on
the transaction. Exception: If the transaction has a line type of Line with an inventory
item of Freight, AutoAccounting uses the revenue scheduling rules for the freight
revenue account rather than the salesperson’s account value.
• Standard Lines: Receivables uses the revenue account associated with the memo line
item or inventory item. Exception: If the transaction has a line type of Line with an
inventory item of Freight, AutoAccounting uses the revenue scheduling rules for the
freight account rather than the revenue account on the standard lines.
• Tax: Tax account assigned to the transaction tax rate codes.
• Transaction Types: A best practice is to use this table for the Natural Account segment
value. Exception: If the transaction has a line type of Line with an inventory item of
Freight, AutoAccounting uses the revenue scheduling rules for the freight account rather
than the revenue account on the transaction type.

Rapid Implementation: AutoAccounting
Account Type Value

Receivable Asset - Accounts Receivable
Revenue Revenue - Revenue

Tax Liability - Tax Payable
Freight Expense - Freight

AutoInvoice Clearing Revenue - AutoInvoice Clearing
Unearned Revenue Liability - Unearned Revenue

Unbilled Receivable Asset - Unbilled Receivables
The table above shows the Constant values that the Rapid Implementation Spreadsheet
created for each account type for a Business Unit. No table names are used for the creation of
an AutoAccounting Rule from the spreadsheet upload.

Practice 15-2 Overview: Reviewing AutoAccounting
Rules
This practice covers topic:
• Reviewing the AutoAccounting Rules for your Business Unit.

Managing Remit-to Addresses
The remit-to address is the address that customers use to send payment for their open debit
items. You must assign a remit-to address to all transactions either entered manually or
imported using AutoInvoice. During the import process, AutoInvoice rejects all invoices for
which it cannot determine a remit-to address.

Remit-to Addresses: Automatic Assignment
Automatically assign remit-to addresses to bill-to sites in one of

these ways:
• Country only: All customer bill-to sites in the selected country
are assigned the specified remit-to address.
• Country and state/region: All customer bill-to sites in the
selected state or region of the country are assigned the
specified remit-to address.
• Country and state/region, and postal codes: All customer bill-
to sites in the designated postal code or range of postal codes
in the selected state or region are assigned the specified
remit-to address.
Automatically assign default remit-to addresses to bill-to sites to ensure that:

• Receivables provides a default remit-to address when you enter transactions.
• AutoInvoice does not reject transactions because it cannot determine a remit-to
address.
For United States remit-to addresses, you can have only one default remit-to address for each
country and state combination. For example, you can have one default remit-to address for
the United States/California, one for the United States/Nevada, and so on.
Tip: Define lockbox addresses as remit-to addresses to let customers know where to send
payment.

Rapid Implementation and the Remit-to-Address for a
Business Unit
Review the Rapid Implementation setup to ensure that:
• The address used is that of the default legal entity for the
applicable business unit.
• The Remit-to Address set is the Common set.
• The Receipt From Criteria section uses the default values for
Country and State.

Practice 15-3 Overview: Reviewing Remit-to Addresses

• Reviewing the Remit-to Address for your Business Unit.

Managing Receivables Activities
Receivables Activities provide default accounting for:

• Adjustments
• Bank Errors
• Credit Card Chargebacks
• Earned Discounts
• Unearned Discounts
• Late Charges
• Miscellaneous Cash
• Refunds
• Receipt Write-Offs
Receivables activities provide default accounting information for all activities other than
transactions and receipts. You must create at least one Adjustment, Earned Discount,
Refund, and Unearned Discount receivables activity.
• Adjustment: Use for adjustments to transactions.
• Bank Error: Needed for reconciling bank statements in Cash Management and for
miscellaneous receipts.
• Credit Card Chargeback: Indicates the clearing account for chargebacks. The account is
credited when you apply the credit card chargeback, and debited after the negative
miscellaneous receipt is generated.
• Credit Card Refund: Indicates the clearing account for credit card refunds. You must
create at least one activity to process credit card refunds.
• Earned Discount: Use to adjust a transaction when payment is received within the
discount period, as determined by the payment terms.
• Unearned Discount: Use to adjust a transaction when payment is received after the
discount period.
• Late Charges: Required if you record late charges as adjustments against overdue
transactions. If you also assess penalties, define a separate activity for penalties.
• Miscellaneous Cash: Required if you plan to enter and record miscellaneous receipts.
• Refund: Use to process non-credit card refunds. Required if you plan to pay the refund
through Oracle Fusion Payments.
• Receipt Write-Off: Indicates the account for crediting write-offs.

Receivables Activities: Setup
• Select a business unit

• Select an Activity Type
• Select GL Account Source:
Activity GL Account
Distribution Set
Revenue on Invoice
Tax Rate Code on Invoice
• Select Tax Rate Code Source:
None
Activity
Invoice
GL Account Source: Derives the accounts for the expense or revenue generated:
• Activity GL Account: Allocate to the specified general ledger account.
• Distribution Set: Allocate to the specified distribution set. (Miscellaneous Cash only)
• Revenue on Invoice: Allocate the expense or revenue net of any tax to the revenue
account or accounts specified on the invoice. (Adjustment, Earned Discount, or
Unearned Discount activity types only)
• Tax Rate Code on Invoice: Allocate the net portion using the expense/revenue accounts
specified by the tax rate code on the invoice. (Adjustment, Earned Discount, or
Unearned Discount activity types only)
Tax Rate Code Source: Determines how Receivables calculates and accounts for tax on
adjustments, discounts, and miscellaneous receipts:
• None: Select this option if you do not want to separately account for tax.
• Activity: Allocate the tax amount to the asset or liability tax accounts specified.
• Invoice: Distribute the tax amount to the tax accounts specified by the tax rate code on
the invoice. You cannot choose this option for Miscellaneous Cash or Late Charges.

Rapid Implementation and Receivables Activities
The table on the next slide indicates the three activity types and
corresponding account values created by the Rapid
Implementation spreadsheet upload.
• All accounts are for the given business unit.
• The Active option is enabled for all activity types.
• The Tax Rate Code Source and Distribution Set fields are not
used.

Rapid Implementation: Receivables Activities
Activity Type Field Value

Earned Discount
GL Account Source Activity GL Account
Activity GL Account Expense - Discounts
Given
Unearned Discount
GL Account Source Activity GL Account
Activity GL Account Expense - Discounts
Given
Adjustment
GL Account Source Revenue on Invoice
Activity GL Account None

Practice 15-4 Overview: Reviewing Receivables
Activities
• Reviewing the Receivables Activities for your Business Unit.

Managing Statement Cycles
Statement cycles determine when to send statements to your customers. To define a

statement cycle:
• Assign the interval to use for the cycle: weekly, monthly, quarterly. The Rapid
Implementation upload created one statement cycle for each interval.
• Enter the dates on which to print statements for the cycle.
• Indicate whether to skip certain statement dates.
• Optionally enhance statements by creating custom messages.
• Optionally enable the Print remit-to address system option. If you enable this option,
Receivables prints the remit-to address on the related statements.

Statement Cycles
In order to send statements based on a statement cycle you

must:
• Enable the Send Statement option on Customer Profile
Classes
• Define Customer Statement Sites
• Submit the Create Customer Statements program
Several other setups must be done before the system sends statements based on a
statement cycle. You must:
• Enable Send Statement: All customers have a profile class defined at both the customer
account level and the site level. This setting on the profile class ensures that statement
is generated. Once enabled, you must also:
- Enter the statement cycle.
- Enter a value in the Minimum Statement Amount field. Statements are printed for
customers with a minimum outstanding balance greater than this value.
• Define Statement Sites: You can only define one active statement site per customer.
This generates a single, consolidated statement for all bill-to sites belonging to a
customer, rather than a separate statement for each site. If you don’t define a statement
site then all bill-to sites each have separate statements.
• Submit the Create Customer Statements program: This prints the statements. The
program prints statements based on:

- If you defined a statement site for the customer, Receivables uses the statement
cycle defined in the customer account profile as the default statement cycle to use
for all Send Statement enabled bill-to sites.
- If you did not define a statement site, Receivables uses the statement cycle
defined in the customer site profile for each applicable bill-to site included in the
print run.
- If you do not select a customer, then Receivables prints statements for all
customers that have a statement cycle that matches the statement cycle you enter
for the print run.

Rapid Implementation and Statement Cycles
• Three statement cycles provided: Weekly, Monthly, Quarterly.

• Statement date used:
– Weekly: Date of the previous Friday from the system date.
– Monthly: Last date of the previous month from the system date.
– Quarterly: Last date of the previous quarter from the system
date.

Practice 15-5 Overview: Reviewing Statement Cycles

• Reviewing the Statement Cycles for your Business Unit.

Defining Approval Limits
Define approval limits for Credit Memo on-account refunds, Adjustments, and Write-offs for
each of your applicable users. You define approval limits for each user for specific
transactions and amount ranges per currency. You can only assign approval limits to valid
users that are defined in your system. The combination of user, document type, and currency
identify a specific approval limit record. You can, for example, define multiple approval limit
ranges for the same user and document type in each currency defined in your system. The
document types are:
• Adjustment: Approval limit for both creating and approving adjustments.
• Credit Memo Refund: Approval limit for refunding both on-account credit memos and
receipts.
• Receipt Write-off: Approval limit for writing off an unapplied receipt amount.
Note: The approval limits for write-offs are separate from, but cannot exceed, the Receivables
system options write-off limits.

Implementation Considerations for Transactions
Depending on your requirements, you may need to configure or

update these setups related to transactions:
• Transaction Types
• Payment Terms
• Transaction Sources
• Document Sequences
• Memo Lines
• Users for Credit Memo Workflow
• Balance Forward Billing
• Value Sets
• Specify Ledger Options

Set Up Document Sequences
Use document sequences to assign an additional unique document number to Receivables

transactions, receipts, and adjustments.
Document sequences can be set in Receivables at the edger level or legal entity in the
Specify Ledger Options task.
Set the Document Number Generation Level system option to generate a document number
either when the transaction is saved or when the transaction is completed.
Define document sequences.
• Assign document sequences to document categories.
• Receivables creates a document category for every receipt method, transaction type,
and receivables activity that you define.

Define Users for Credit Memo Workflow
There are two seeded rule sets for credit memo workflow:
• Collection agent rule set
• Non-collection agent rule set
These two seeded rule sets refer to two approval groups that are
not seeded. The approval groups are:
• Collection_Manager_Approval_Group
• Billing_Manager_Approval_Group
The Credit Memo Request Approval process is managed by the Approval Management
extensions (AMX) to the human workflow services of Oracle SOA Suite. The approval
process makes use of approval groups that contain either static or dynamically generated lists
of approvers.
An approval group consists of a name and a predefined set of users configured to act on a
task in a certain pattern. Approval groups are configured and managed with the Oracle BPM
Worklist.

Define Users for Credit Memo Workflow
You must define two seeded approval groups and assign users to
the groups.
• Create one approval group called
Collection_Manager_Approval_Group and one approval group
called Billing_Manager_Approval_Group.
• Assign the users that you want to each approval group.
Note: You must assign the user with the Billing Manager role
to the Billing_Manager_Approval_Group, and the user with the
Collection Manager role to the
Collection_Manager_Approval_Group.

Set Up Balance Forward Billing
Balance forward billing provides customers with a complete

picture of their beginning balance, activities during the billing
period, and current outstanding balance. The single bill with
single payment terms also simplifies the process of customer
payment.
To set up balance forward billing:

• Define a balance forward billing cycle.
• Define balance forward billing payment terms.
Set up the related customer account and customer site profiles for balance forward billing:
• Set the Enable balance forward billing option.
• Set the Bill Level and Bill Type.
• Assign each profile a balance forward billing cycle and balance forward billing payment
terms.

Manage Value Sets
Receivables to General
Ledger Report
Financial Category = Accounts Receivable
Assign the Accounts Receivable Financial Category

Navigate to: Setup and Maintenance > All Tasks > Search > Manage Value Sets > Go to Task
> Manage Chart of Account Value Sets > Value Set Code Search > Click Manage Values
button > Value Search > Click the Edit button.
Receivables provides the Receivables to General Ledger Reconciliation extract and report to
help you reconcile the transactions in your accounts receivable system, both before and after
posting to general ledger. To use the Receivables to General Ledger Reconciliation extract
and report, assign the financial category of Accounts Receivable to the receivables natural
account values that you want to include for reconciliation.
If the financial category of Accounts Receivable is not included, the Receivables to General
Ledger Reconciliation report does not select any data. When you run the extract program, if
you try to select general ledger natural account values that do not have this category
assigned, the extract program displays an error indicating that the financial category was not
assigned.

Specify Ledger Options
Foreign Currency Legal Entity

Transactions Document Sequences
Specify Ledger Options for Receivables

Foreign Currency Transactions
If you process foreign currency transactions, complete these steps for out of balance amounts
as the result of foreign currency conversions.
In the Journal Processing: Balancing section:
• Select the Enable Expense General Ledger option.
• Complete the Entered Currency Balancing Account field.
Legal Entity Level Document Sequencing
You can set up your primary ledger to allow document sequencing at the legal entity level
instead of at the ledger level. If you have more than one legal entity assigned to the same
ledger, you can assign separate document sequences to transactions, adjustments, and
receipts belonging to each legal entity. This helps, for example, to conform to local and
governmental authority requirements, while still being able to organize multiple legal entities
under the same primary ledger.

If you intend to set up document sequencing at the legal entity level, then in the Sequencing
section:
• Set the Sequencing By option to Legal Entity.
• Enable the Enforce Document Sequencing option for Receivables: Required for gapless
document sequencing.
• Enable the Enforce Chronological Order on Document Date option: Required for
gapless document sequencing. This option enforces the correlation between the
document sequence accounting date and the transaction accounting date.

Customers and Parties
Create customers to properly record and account for sales

transactions, as well as identify other attributes of the selling
relationship.
Key concepts related to customers and customer activities
include:
• Party
• Customer
• Customer Account
• Site
• Relationship
• Contact
A party is an organization or a person that can enter into a business relationship with another
party. A party exists separately from the business relationship in the Trading Community
Model.
A customer is a party with whom you have a selling relationship, such as the purchase of
products and services, or the negotiation of terms and conditions for future purchases.
A customer account represents the attributes of the business relationship that a party can
enter into with another party. The customer account has information about the terms and
conditions of doing business with the party.
A site is a point in space described by an address. A party site is the place where a party is
physically located. An account site is a party site used in the context of a customer account.
A party relationship is the role of the party in the context of another party, such as affiliate,
subsidiary, or partner. An account relationship between different customer accounts of a party
allows for the sharing of billing, shipping, and payment information.
A contact is a person who communicates for or acts on behalf of a party or customer account.

The Trading Community Model
Customers are part of the Trading Community Model. They are global entities and are not
created within a business unit or within any other organizational context. However, the
customer sites are assigned to business units and can be assigned to more than one
business unit.
The TCM allows the creation of one entity being used for multiple purposes in the Cloud
applications.
There is a matching engine supported by the Fusion Enterprise Data Quality application
which can perform matching checks against all external parties including customers, legal
entities, suppliers, banks and branches. You can configure the types of parties to consider for
matching, such as customers and suppliers, to be checked for similar and exact name
matches. For example, if a company exists as a supplier, the user is informed so they can
decide if the party can be used as a Customer. If selected the existing party is used to
establish the supplier.
The graphic above illustrates that the IBM Corporation entity can be created as both a
supplier and a customer. The customer ship-to site address can be created from the supplier
purchasing site purpose and the customer bill-to site can created from the pay site purpose.
The Trading Community model insures the integrity of your Master tables.

Managing Customers
Managing customers includes these activities:

• Create customer profile classes.
• Create customer, customer account, and customer site records. Create at least one
customer account for each customer record, and at least one customer site with a bill-to
site business purpose for each customer account.
Note: You must have a bill-to site to create transactions under the customer account.
• Assign profile classes to customer accounts and customer bill-to sites.
• Define relationships between parties and between customer accounts (both reciprocal
and nonreciprocal). You use customer account relationships to manage the sharing of
billing and shipping services and payment activities between two accounts.
• Review and update customer information. If you use the Oracle Fusion Trading
Community Model, you can also manage the control of duplicate and redundant party
information.

Manage Customer Profile Classes
Profile classes are a required element for defining customer accounts and sites. Use profile
classes to organize customer accounts and sites into categories that reflect the needs of your
enterprise. The profile class record contains generic options that you can set in different ways
to group your customers into broad categories, such as by industry, location, size,
creditworthiness, business volume, or payment cycles.
After you assign a profile class to an account or site, you can customize details of the
customer account or site profile to meet specific requirements for that account or site. For
example, a particular site may transact business in a separate currency, or the site may be
subject to additional late charges or penalty charges. These updates apply only to that
particular account or site and do not affect the profile class record itself.
You manage profile class updates and assignments by means of effective date ranges. Each
profile class that you assign or update supersedes the previous profile class for the given date
range. In this way you can manage over time the changes that take place in customer
behavior or customer requirements.

Defining Profile Classes: Profile Class Tab
A Profile Class tab defines:

• Credit and Collections options
• Balance Forward Billing Options
• Terms
• Receipt Matching
• Statement and Dunning
• Invoicing
The Profile Class tab defines the following:

• Credit and Collections: Define the following:
- Collector
- Credit Classification
- Credit Limit
- Tolerance
- Conversion Rate Type
- Include in Credit Check
- Expiration Offset Days
• Balance Forward Billing:
- Enable
- Bill Level: Customer or Account.
- Bill Type: Daily, Weekly, Monthly and so on.
• Terms:
- Payment Terms
- Discount Grace Days
- Allow Discount
- Override Terms

• Receipt Matching:
- Match Receipts By: The choices are Balance Forward Billing Number, Contract
Number, Purchase Order, Sales Order, Shipping Reference, or Transaction
Number.
- AutoMatch Rule Set
- Automatically Update Receipt Match By
- AutoCash Rule Set
- Remainder Rule Set
- Application Exception Rule Set
- AutoReceipts Include Disputed Items
• Statement and Dunning: If enabled, include:
- Statement Cycle
- Whether to Send credit balance
- Whether to Send dunning letters
- Preferred Contact Method: E-mail, fax, or print.
- Statement Preferred Delivery Method: E-mail, fax, or print.
• Invoicing: Grouping Rule.

Profile Classes: Late Charges Tab
The Late Charges tab includes:

• Charges and Reductions
• Charge Calculation Setup
• Currency Settings
If late charges are enabled, you must define:

Charges and Reductions:
• Late Charge Calculation Method
• Charge Reductions
Charge Calculation Setup
• Late Charge Type
• Payment Terms
• Interest Calculation Formula
• Interest Calculation Period
• Use Multiple Interest Rates
• Receipt Grace Days
• Interest Days Period
• Assess Late Charge Once
• Charge Start Date
• Message Text

Currency Settings:
• Currency
• Conversion Rate Type
• Minimum Receipt Amount
• Minimum Statement Amount
• Minimum Dunning Amount
• Minimum Dunning Invoice Amount

Practice 15-6 Overview: Creating a Customer Profile
Class.
• Creating a customer profile class for a moderate risk
customer.

Customer Model
The graphic above illustrates all the different information that can be part of the customer
record. This lesson covers the required information needed to create invoices and record
receipts.

Creating an Organization Customer: Header
The header information includes:

• Organization Information
• Account Information
Navigate to: Receivables > Billing > Tasks panel tab > Customers > Create Customer.
The header information applies to all the sites under the Customer and Customer Account. It
includes:
Organization Information
• Name: To avoid duplicates, the Data Quality process checks for similar parties. You can
also do a search for a customer or party before creating a new name.
• Registry ID: This represents the organization’s party number. No Receivables
transactions are performed with the registry ID. A Customer is assigned two numbers,
the party number and the Account number.
• D-U-N-S Number: If you have a Dun and Bradstreet service you can provide the
customer’s qualified number.
• Taxpayer Identification Number: This is needed for tax reports.

Account Information
• Account Number: A Customer party can have more than one account. You need to
create at least one account and one account site with a bill-to purpose under the
customer record in order to properly record and account for both sales transactions with
the party and other attributes of the selling relationship with the party. This can be
system generated or manually created.
• Account Description
• Account Type:
- External: Third Party Customers not associated with your company.
- Internal: Used for Intercompany billing. Your Legal Entity parties can be created as
internal customers.
• Customer Class: Used for Federal Agencies and Public Sector companies.
• Account Established and Termination Dates

Creating a Customer: Address
There are these points to consider when entering and updating

customer address information:
• Reference Data Set for Account Sites
• Update Sharing
• Account Site Details
• Address Business Purposes
• Reference Accounts
When you create a customer, you must enter account and address information. This address
becomes an account site record of the customer.
When you create additional customer accounts for the customer, you can either enter new
address information to create a new account site, or you can use an existing account site. If
you assign an existing account site to the new account, you can modify the address
information itself, but you receive a warning if this address is shared by other parties.
Reference Data Set for Account Sites: Before creating or importing customers, you must
create a reference data set for use with customer account sites. You can share this reference
data set across one or more business units, according to your requirements. To access the
new reference data set on customer account sites, provision the appropriate data role to the
designated users in order to grant them access to the job role for the given business units and
reference data sets.
Update Sharing: If you update an address due to incorrect or missing information, these
updates are shared with all account sites that use this address. Update sharing applies to
address information only, and not to account address details or business purposes.

Account Address Details: Use the Account Address Details subsection to identify these
values for the account site:
• Customer Category Code: Used to classify this customer according to the needs of your
enterprise. You define these category codes under the Oracle Fusion Trading
Community Model.
• Translated Customer Name: Used to enter the customer name in another language. The
translated name replaces the customer name on external documents.
Address Business Purposes: See the next slide for more details.
Reference Accounts: Assign distributions for revenue, freight, receivable, AutoInvoice
clearing, tax, unbilled receivable, and deferred revenue accounts to customer bill-to sites. If
AutoAccounting depends on Bill-to Site, then Receivables uses the bill-to site of the
transaction to determine the related segment for these distributions.

Creating a Customer: Address Business Purposes
Used to Identify the functions performed by each particular

customer account site. The most common are:
• Bill-to
• Ship-to
• Deliver-to
• Bills of lading
• Dunning
• Late Charge
Assign address business purposes to account sites to identify the functions performed by
each particular customer account site. You can designate one account site as Primary for
each address business purpose.
Common address business purposes include:
• Bill-to: Assign the bill-to business purpose to account sites designated to receive and
process bills. You must create at least one bill-to site to process transactions for a
customer.
• Ship-to: Assign the ship-to business purpose to account sites designated to receive
goods purchased by the customer account. If you create a ship-to business purpose,
you must indicate the related bill-to site that processes the bills for the shipped goods.
Bill-to sites available for association with ship-to sites either belong to the same
customer account or to related customer accounts.
• Deliver-to: Assign the deliver-to business purpose to sites that receive all or part of
goods sent to a ship-to site.
• Bills of lading: Assign the bills of lading business purpose to sites that manage contracts
for carriers that ship customer goods.
• Dunning: Assign the dunning business purpose to sites that receive dunning letters from
you.

• Late Charge: Assign the late charge business purpose to the site that is assigned the
late charge policy for this customer account.
If the Statement, Dunning, and Late Charges Site Profiles Used profile option is set to Yes,
then Receivables uses the late charge policy assigned to the late charge site to calculate late
charges on transactions. If the profile option is set to No, then receivables uses the late
charge policy assigned to the bill-to site assigned to the transaction.

Uploading Customer Data
Use the Upload Customers from Spreadsheet task to open the Manage Customer Uploads
page to transfer large amounts of customer data using a spreadsheet template:
1. Download the customer spreadsheet template. The spreadsheet template contains four
worksheets: Customers, Contacts, Reference Accounts, and Customer Bank Accounts.
2. Populate the template with your customer data and generate the zip file.
3. Upload the zip file. The upload process prompts you for a batch name that you can use
to track the status of the upload.
4. Track upload errors using the Unsuccessful Records column on the Manage Customer
Uploads page.
5. Click the link to open the error correction spreadsheet.
6. Correct the errors and resubmit the batch.

Practice 15-7 Overview: Creating a Customer.

• Creating a customer.
• Creating an address and site.
• Creating a reference account
• Attaching a profile class.

AutoInvoice Process
AutoInvoice imports and validates large numbers of transaction data. It integrates with
Configure, Price, and Quote (CPQ) Cloud, Distributed Order Orchestration, Projects, and
Intercompany and creates invoices, debit memos, credit memos, and on-account credits in
Receivables.
AutoInvoice also integrates with external systems. You must use a custom program to transfer
transaction data from an external system into the AutoInvoice interface tables.
When imported transactions are processed through the AutoInvoice program, the following
events happen:
• Line, accounting, and sales credit information populates the three Receivables interface
tables.
• Transaction lines are ordered and grouped by the grouping and line ordering rules
defined.
• If the Contingencies for the Invoice lines are passed in the
AR_INTERFACE_CONTS_ALL table, then a contingency is created on the appropriate
line. Additionally, in the process of creating an invoice line through AutoInvoice, all the
enabled rules for Revenue Contingencies get evaluated. If the matching criteria of the
rules are met, the default contingencies are assigned to the invoice line. The Revenue
Management Engine immediately defers revenue for invoice lines that have
contingencies assigned.

• Transaction is stamped with legal entity information. Because each transaction can only
belong to one legal entity, when multiple legal entities exist, the system optionally
defaults a legal entity from the transaction type or transaction source, if defined. If legal
entity defaults are not defined, then the user must enter the legal entity manually. Oracle
provides an Interface Program to load data from other Oracle applications. You must
write a SQL loader to load data from third parties.
• Accounting date is determined by the accounting rules or, if rules are not used, from the
ship or sales order date.
• GL accounts are assigned using AutoAccounting, except where accounting is provided
on the transaction.
• Tax, freight, and credit memos are linked to transaction lines based on the Reference ID
or Reference flexfield.
• Validated lines are used to create the transactions.
• Transactions that fail the import process are transferred to the
RA_INTERFACE_ERRORS_ALL table. You can correct these errors in a spreadsheet
and upload again.

AutoInvoice Interface Tables
RA_INTERFACE_LINES_ALL
RA_INTERFACE_DISTRIBUTIONS_ALL
RA_INTERFACE_SALESCREDITS_ALL
Every line must use the RA_INTERFACE_LINES_ALL table. The

RA_INTERFACE_DISTRIBUTIONS_ALL and RA_INTERFACE_SALESCREDITS_ALL
tables are optional.
AutoInvoice also uses the AR_INTERFACE_CONTS_ALL table to store imported contingency
information and the RA_INTERFACE_ERRORS_ALL table to store information about
interface data that failed validation.
RA_INTERFACE_LINES_ALL Table: This table contains information related to all
transactions to be processed by AutoInvoice. Transactions include invoices, debit memos,
credit memos, and on-account credits. This table holds the key data, such as bill-to customer,
ship-to customer, and transaction date.
• Each record contains line, tax, freight, or late charges information.
• The Line Type field identifies the type of information contained in the record.
• A record can be a parent record: Line, Header Freight, or Charges; or a child record:
Tax or line-level Freight.
• A child record is linked to the parent record using the Link-To Transaction flexfield.

RA_INTERFACE_DISTRIBUTIONS_ALL Table: Oracle Fusion Order Management does not
use this table because AutoAccounting creates the distributions in Receivables.
• This table contains accounting distributions to be used by the transactions defined in
RA_INTERFACE_LINES_ALL.
• Accounts defined in this table override any accounts created using AutoAccounting.
• You can choose to pass some or all account information to AutoInvoice. Any accounts
that are not passed are derived using AutoAccounting.
• Records in this table are linked to records in the RA_INTERFACE_LINES_ALL table
using the Transaction flexfield.
RA_INTERFACE_SALESCREDITS_ALL Table: This table contains all sales credit

information for the transactions in the RA_INTERFACE_LINES_ALL table.
• The two tables are linked using the Transaction flexfield.
• This table is required to track sales credits.

Implement AutoInvoice: Profile Option Settings
• ID Accounting Flexfield Code: Specify the ID of the flexfield

code used by AutoInvoice.
• Maximum Lines per AutoInvoice Worker: Specify the
maximum number of lines per AutoInvoice worker.
• Source Code: Specify the source code.
• Use Parallel Hints: Enable parallel hints.
• AutoInvoice Gather Statistics Allowed: Let AutoInvoice
analyze the interface tables before import.
ID Accounting Flexfield Code: Specify the accounting flexfield identifier that AutoInvoice uses
to process accounting information for transaction distributions. Account IDs process
information faster than account names.
Maximum Lines per AutoInvoice Worker: Multiple workers help AutoInvoice process data in
parallel for better performance. The maximum number of transaction lines that you specify
determines how much data can be processed by each worker. Depending on how many lines
need to be processed, you can use this parameter setting to determine how many parallel
workers are needed to process data.
Source Code: Specify the source system data that is transferred to the AutoInvoice tables.
Use Parallel Hints: Specify whether to use parallel hints while running AutoInvoice. Parallel
hints are instructions that enable a SQL statement to be simultaneously processed by multiple
threads or processes.

AutoInvoice Gather Statistics Allowed: If you set this profile option to Yes, then when you
submit AutoInvoice, the program first analyzes the interface tables
(RA_INTERFACE_LINES_ALL, RA_INTERFACE_DISTRIBUTIONS_ALL, and
RA_INTERFACE SALESCREDITS_ALL) and gathers statistics to determine how best to
perform the transaction import. If the number of records to be imported and the number of
worker processes are approximately the same as the previous submission of AutoInvoice,
then you can set this profile option to No and skip this analysis.

Implement AutoInvoice: Transaction Flexfields
• Transaction flexfields uniquely identify each imported

transaction and transaction line.
• Define both a Line-level and Header-level transaction flexfield.
• Optionally define a Reference and Link-to transaction flexfield.
Receivables uses the transaction flexfield to uniquely identify each transaction and
transaction line you import using AutoInvoice. Transaction flexfields are also used to refer to
and link transaction lines.
You must define both a line-level and a header-level transaction flexfield. All segments in the
line-level transaction flexfield that refer to header information must also exist in the header-
level transaction flexfield. For example, if you define a line-level transaction flexfield with four
segments, and only the last two segments refer to line-level information, define the header-
level transaction flexfield using the first two segments.
If you do not create Reference and Link-to transaction flexfields, then Receivables uses the
line-level transaction flexfield structure to link and reference different lines. You do not have to
define separate Reference and Link-to transaction flexfields in this case.
However, if you are planning to create a customized form to enter interface data to display the
Reference and Link-to transaction flexfields, then you must define these transaction flexfields.
These flexfields must have the same flexfield structures as the line-level transaction flexfield.

Implement AutoInvoice: Optional Setups
• AutoInvoice Line Ordering Rules: Line ordering rules define

how to order transaction lines within transactions created by
AutoInvoice.
• AutoInvoice Grouping Rules: Grouping rules define how to
group transactions created by AutoInvoice. You assign a line
ordering rule to a grouping rule.
• AutoInvoice Clearing Account: Define this account, if you
enable the Create clearing option, to hold any difference on a
transaction between the revenue amount and (Selling price *
Quantity).

AutoInvoice Grouping Rule Transaction Attributes
Currency
Bill-To Address
Accounting Date
Tax Rate Salesperson

Code
Sales Order
Receivables provides two different types of transaction attributes: required and optional.
• You cannot add or delete required transaction attributes, but you can always add
optional ones.
• A default grouping rule is provided with Receivables, which groups lines using required
transaction attributes.
• Optional transaction attributes are available to create custom grouping rules.
• Grouping and Ordering Rules must include required attributes and may include optional
attributes.

Grouping Rules
AutoInvoice Records Transaction Flexfields

Currency Bill-to Item Attr1: Order Attr2: Order Type
Number
USD Acme A 5001 Domestic
USD Acme B 5002 Domestic
USD Acme C 112 No Ship
USD Acme D 601 International
USD Acme E 602 International
AutoInvoice grouping rules contain transaction attributes that must be identical for all items on
the same transaction. For example, transaction number (TRX_NUMBER) is a mandatory
attribute of all grouping rules. If you have two records in the interface tables with different
transaction numbers, AutoInvoice creates separate transactions for each record.
Oracle Fusion Receivables provides both mandatory and optional transaction attributes for
imported transactions. You cannot delete a mandatory attribute from any grouping rule, but
you can add optional attributes to the mandatory attributes to create a new grouping rule.

Line Ordering Rules
Ascending
or
Descending
Sales Order
or Sales
Order Line
Ship Via
Ship Date
AutoInvoice uses line ordering rules to determine how to order and number each line after
your transactions have been grouped into invoices, debit memos, and credit memos. You can
specify a line ordering rule for each grouping rule.
Transaction Attributes
Oracle Fusion Receivables provides transaction attributes from the
RA_INTERFACE_LINES_ALL table that you can use for AutoInvoice line ordering rules.

Import Exceptions Overview
Records that fail validation remain in the AutoInvoice interface

tables. You can display AutoInvoice errors in an Excel workbook
by:
• Using the Manage AutoInvoice Lines task
• Using the Import Exceptions Infotile.
Records that pass validation are transferred to the Receivables tables. Records that fail
validation remain in the AutoInvoice interface tables. Before AutoInvoice can validate these
records and create transactions, you must correct invalid data and run AutoInvoice again.
Each time that you run AutoInvoice, the process generates a list of records that fail validation.
You can display AutoInvoice exception in an Excel workbook in either of two ways:
• Click the Manage AutoInvoice Lines task to open an Excel workbook with all error
records.
• Click a Number of Exceptions link from the Import Exception Infotile to open a workbook
for these specific error records.
Every workbook has three tabbed worksheets. You can use the tools available in the
workbook to manage the display of information.
The three tabbed worksheets arrange AutoInvoice information in this way:
• AutoInvoice lines and line distributions
• Tax and freight distributions
• Sales credits and revenue contingencies

A workbook presents existing records for update or deletion only. You cannot enter new
transaction information into a workbook. Each column in a given worksheet corresponds to
the columns in the respective interface tables. Five additional columns manage the
processing of your updates:
• Changed: Tracks changes made to a given row. The upload only processes rows
marked in this column.
• Flagged for Deletion: Indicates rows marked for deletion. When a row is flagged for
deletion, all the corresponding lines in all the related tables are also deleted.
• Update Status: Displays the results of each update to the interface tables.
• Number: Displays the row number.
• Import Errors: Displays the import rejection reason.
When you have finished updating a workbook, click the Save and Run AutoInvoice button to
display the parameters for AutoInvoice submission. Once the process is successfully
submitted, AutoInvoice provides a concurrent request ID.

Define Payment Terms
Use payment terms to identify due dates, discount dates, and installment details for customer
open items. You assign payment terms to customer profiles or to customer information on
transactions.
The formula used to determine the amount due is:
Amount Due = Relative Amount/Base Amount * Invoice Amount
For example: Relative Amount = 60%/Base Amount = 100% would be 60% of the invoice
amount.
The base amount is the denominator for the ratio Receivables uses to determine the amount
due for installments on transactions. The sum of the relative amounts for all of the payment
schedules that you define for payment terms must equal the value that you specify as the
base amount.

Define Payment Terms
• Print Lead Days field: The number of days before the due
date that the invoice should be printed.
• Allow discount on partial payments option: Lets customers
take discounts for partial payments on items associated with
payment terms.
Note: Ensure that the Discount on partial payment
Receivables system option is also enabled.
• Discount Basis field: Designates the amount to use to
calculate discounts.
• Installment Option field: Determines how to allocate the freight
and tax charged to transactions with split terms. You can
either distribute tax and freight charges across all installments,
or allocate all freight and tax charges to the first installment.

Define Transaction Types
Transaction types provide a number of default settings that help to characterize your
transactions.
Use transaction types to:
• Set up specific transaction details for each transaction class: debit memo, credit memo,
on-account credit, chargeback, and invoice.
• Assign a legal entity to the transaction.
• Define accounting for transactions, including whether transaction entries update
customer balances and whether Receivables posts transactions to general ledger.
• Determine the natural application setting.
• Define transactions for late charges, freight, and tax classification code.
• Determine the creation sign.

Define Transaction Types: Using Natural Application
Applications of receipts or credit memos to transactions are processed differently, depending

on the settings of the Natural Application Only and Allow Overapplication options on the
transaction type:
• Natural Application Only Selected, Allow Overapplication Not Selected
- Receivables allows any application that reduces the transaction amount toward or
to zero without changing the sign of the transaction. For example, if the transaction
amount is +$500, Receivables allows the application as shown in the top section
of the diagram.
• Natural Application Only Not Selected, Allow Overapplication Selected or Not Selected
- Receivables allows any application that either reduces or increases the transaction
amount, even if the application changes the sign of the transaction, as shown in
the bottom section of the diagram.

Define transaction types in this order to properly associate one

transaction type with another:
• Credit memo
• Invoice
• Debit memo
• Chargeback
Note: Defining credit memo transaction types first lets you assign
a credit memo to the Invoice transaction type. When you create a
credit memo for the invoice, the credit memo transaction type is
used by default.
Exclude Late Charges Calculation

Enable the Exclude from late charges calculation option to exclude specific categories of
transaction from late charges.
Tax Classification Code Assignment
You can optionally enable the Default tax classification code option to assign a tax
classification code to the transaction line. You use tax classification codes as determining
factors in tax calculation.

If you are using a shared accounting environment, you can assign

a legal entity to a transaction type to appear by default on the
transaction. Receivables looks for and assigns a legal entity to a
transaction according to this hierarchy:
• Legal entity of the transaction type assigned to the
transaction.
• Legal entity of the transaction source assigned to the
transaction.
• Default legal entity assigned to the business unit.

Practice 15-8 Overview: Defining a Transaction Type

• Defining a transaction type for your Business Unit.

Define Transaction Sources
Transaction sources have these uses and recommendations:

• Enable transaction batching and numbering, where applicable.
• Assign default values to transactions.
• Assign a legal entity to transactions.
• Select validation options for imported transactions.
• Create a transaction source for late charges, if applicable.
• Set up for automated non-credit card refunds.
• Enable the Copy Document Number to Transaction Number option to use the same
value for both the document number and the transaction number for transactions
assigned to this source. You must enable this option if you are using Gapless document
sequences.

Depending on your requirements, create these setup objects

before creating your transaction sources:
• Transaction Types: Define the transaction types that you want
to appear by default on transactions.
• Invoice Transaction Flexfield: Define the reference information
that you want to capture in the invoice transaction flexfield and
display on imported transactions, such as a purchase order
number.
• Credit Memo Transaction Source: Define a transaction source
for credit memos before you define a transaction source for
invoices. Use this transaction source to number the credit
memos created against invoices differently from the invoices
they are crediting.
If the late charge policy for any of your business units is to create either Interest Invoices or
Debit Memos, then create a separate transaction source for late charges. Create a transaction
source for Interest Invoice or Debit Memo late charges with Type Imported. The transaction
source type is Imported because the Interest Invoice and Debit Memo creation is done as a
batch process that calls the Invoice API. You then assign this source on the Receivables
System Options pages.
Automated Non-Credit Card Refunds
You can set up Receivables to automate the refund process for non-credit card transactions.
Receivables submits the refund request to Payables, and Payables in turn transacts refunds
using Payments.
To set up for automated refunds:
• Create a Refund receivables activity.
Use the Credit Card Refund activity type for credit card refunds.
• Set the Receipt Handling for Credits field to Refund in the transaction source. You set
this option to Refund for both credit card and non-credit card automated refunds.

If you are using a shared accounting environment, you can assign

a legal entity to a transaction source to appear by default on the
transaction. Receivables looks for and assigns a legal entity to a
transaction according to this hierarchy:
• Legal entity of the transaction type assigned to the
transaction.
• Legal entity of the transaction source assigned to the
transaction.
• Default legal entity assigned to the business unit.

Defining Transaction Sources for AutoInvoice
Unit Price
Quantity Revenue
Amount
Passed = Calculated Revenue Amount
AutoInvoice
Clearing
Difference Account
Create transaction sources of type Imported to use with the AutoInvoice program. Use the
AutoInvoice Options and Import Information sections of an Imported transaction source to
define how AutoInvoice validates imported transaction lines assigned a particular transaction
source.
In the Import Information section, where applicable, select Number, Value, Segment, or ID for
each option to indicate how AutoInvoice validates information.
• Select Number to import a record into the interface tables using its assigned number.
• Select Value to import a record into the interface tables using its actual name. Use
Value if you intend to use the transaction source to import data from a non-Oracle
system.
• Select Segment to use the flexfield segment.
• Select ID to use the internal identifier of the record. If you use an Oracle system, then ID
is quicker because of the shorter character length.
• Select Amount or Percent to indicate how AutoInvoice validates Sales Credits and
Revenue Account Allocations on transaction lines.

Define Transaction Sources for CPQ Cloud Integration
Oracle Configure, Price, and Quote (CPQ) Cloud integrates with the Create Invoice public
service to create and process Receivables transactions from CPQ Cloud orders using
AutoInvoice.
Receivables provides an Imported transaction source under the Common reference set to use
to configure the CPQ Cloud/Receivables integrated service. Use this transaction source to:
• Manage the transfer of transaction information from CPQ Cloud to the AutoInvoice
interface tables.
• Manage the Call Back service to send Receivables transaction information to CPQ
Cloud after the transactions are created.
In the Oracle CPQ Cloud Integration section of the Create or Edit Transaction Source page,
select the Enabled option and then click the Define button to open the Define Endpoint Policy
window:
• In the URL field, enter the URL to use to contact the Call Back service.
• In the Security Policy field, enter oracle/wss_username_token_over_ssl_client_policy.
• In the User Name field, enter the user name to use for the Call Back service.

• In the Password field, enter the accompanying password for the valid user.
• Click the Save and Close button to exit the Define Endpoint Policy window.
• Save and close the Create or Edit Transaction Source page.

Practice 15-9 Overview: Defining a Transaction Source

• Reviewing a Transaction Source for your Business Unit.

Define Memo Lines
Use memo lines to define goods or services that are sold frequently, but have not been
defined as inventory items, such as Annual Maintenance Contracts or Consulting Services.
You can assign memo lines to debit memos, on-account credits, debit memo reversals,
chargebacks, and invoices.
Use the line type of Line to create a memo line for non-inventory items. If the price is constant,
you can enter a default unit price to use when this memo line is selected.
Use line types of Charges, Freight, or Tax to create memo lines specific to these transaction
details. You can use tax memo lines on transactions if your tax definition lets you enter
manual tax lines on transactions. After you enter a tax memo line on a transaction, you can
specify the amount of tax to assign to the transaction line.

Set Up Balance Forward Billing
Balance forward billing provides customers with a complete

picture of their beginning balance, activities during the billing
period, and current outstanding balance. The single bill with
single payment terms also simplifies the process of customer
payment.
To set up balance forward billing:

• Define a balance forward billing cycle.
• Define balance forward billing payment terms.
Set up the related customer account and customer site profiles for balance forward billing:
• Set the Enable balance forward billing option.
• Set the Bill Level and Bill Type.
• Assign each profile a balance forward billing cycle and balance forward billing payment
terms.

Defining Remittance Banks and
Bank Accounts
Define all of the banks and bank accounts that you use to remit payments. You can define
multiple currency bank accounts to accept payments in more than one currency.
You define banks and bank accounts in Oracle Fusion Cash Management. This course
covers in more detail defining banks, branches and bank accounts in the Configuring Oracle
Fusion Cash Management lesson.

Practice 15-10 Overview: Creating Banks, Branches,
and Accounts Using a Spreadsheet
• Creating banks, branches, and accounts using a spreadsheet.

Receipt Class, Receipt Method,
and Bank Account Relationship
The receipt class and related receipt methods provide default accounting information for
receipts.
Receipt Class and Receipt Method Relationship
The relationship between receipt class, receipt method, and bank account allows for
accounting defaults during receipt processing.
When you create a receipt:
• Specify the receipt method and one of the remittance bank accounts assigned to the
receipt method to use for the receipt.
• Accounting for the receipt is derived from the general ledger accounts assigned to the
remittance bank account.
• Receivables processes the receipt according to the receipt class that the receipt method
is associated with.
• For automatic receipts, Receivables uses the automatic processing settings on the
receipt method.

Defining Receipt Classes
Receipt Classes provide:

• Creation Method
• Remittance Method
• Clearance Method
• Receipt Method
The receipt class determines the processing steps that are required for receipts. These steps
include automatic or manual creation, the remittance method, the bank clearance method,
and whether receipts require confirmation by the customer.
Specify for each receipt class:
Creation Method: How to create receipts:
• Manual: Standard, batch, and lockbox receipts
• Automatic: Bank account transfer and credit card receipts. Oracle Fusion Payments
processes funds capture.
Remittance Method: How to derive the remittance account for automatic receipts:
• No Remittance: Receipts that are not remitted.
• Standard: Regular remittance.
• Factoring: Factored remittance.
• Standard and Factoring: Use the receipt class for either standard or factored
remittance.

Clearance Method: How to reconcile receipts before posting to general ledger:
• Direct: Clear at the time of receipt entry. Use this method if you do not expect the
receipts to be remitted to the bank and subsequently cleared. Receipts are assumed to
be cleared at the time of receipt entry and requires no further processing. This is the
equivalent of No Clearing Method.
• By Automatic Clearing: Clear using the Clear Receipts Automatically program.
• By Matching: Clear receipts manually in Cash Management.
This is the preferred method of clearing receipts. Receipts cleared through Cash Management
automatically generate reconciliation accounting entries that are posted to general ledger.

Receipt Methods
Receipt Methods associate to the Receipt Class:

• A Bank Account
• General Ledger Accounts
You can assign more than one remittance bank to each receipt class and receipt method
combination.
Specify the bank name, branch, account, and currency for your remittance bank. You must
designate one remittance bank account as Primary for each currency.
Specify the general ledger accounts that Receivables uses when you enter or apply receipts
using this remittance bank account.
Legal entities are linked to remittance bank accounts. All receipts inherit the legal entity from
the bank account, and all refunds inherit the legal entity of the original receipt.

Practice 15-11 Overview: Creating a Receipt Class and
Receipt Method
• Creating a receipt class and receipt method.
• Associating your bank account to the receipt method.

Defining Receipt Sources
Determine:
• Receipt Source Type
– Automatic
– Manual
• Batch Numbering
– Automatic
– Manual
• Defaults
– Receipt Class
– Receipt Method
– Bank Account
Define a receipt source to determine:

• Creation method (automatic or manual)
• Batch numbering (automatic or manual)
• Default receipt class, receipt method, and bank account

Practice 15-12 Overview: Creating a Receipt Source

• Creating a receipt source.

AutoCash Rules
The receipts can be applied by using:

• Clear the Account
• Clear Past Due Invoices Grouped by Payment Terms
• Combo Rule
• Apply to the Oldest Invoice First
• Match Payment with Invoice
• Clear Past Due Invoices
Receivables uses the AutoCash rule set, if one is available, to apply a receipt when no
transaction information is available for the receipt. The AutoCash rule set determines how to
apply a receipt to customer open debit items and update the customer account balance. The
AutoCash rule set consists of general settings and a combination of the five available rules for
applying receipts.
When you apply a receipt, Receivables uses the first rule in the AutoCash rule set. If the first
rule in the set does not find a match, Receivables uses the next rule in the sequence, and so
on until it can apply the receipt. If none of the rules in the AutoCash rule set apply,
Receivables places the remaining amount either unapplied or on-account, depending on the
setting of the Remaining Remittance Amount option in the AutoCash rule set.
• Match Payment with Invoice: Apply a receipt to a single invoice, debit memo, or
chargeback only if the receipt amount exactly matches the amount of the debit item.
• Clear the Account: Apply a receipt only if the receipt amount exactly matches the
customer open balance.
• Clear Past Due Invoices: Apply a receipt only if the receipt amount exactly matches the
customer past due account balance.
• Clear Past Due Invoices Grouped by Payment Terms: Apply a receipt only if the receipt
amount exactly matches the sum of the customer credit memos and past due invoices.
• Apply to the Oldest Invoice First: Apply receipts to customer debit and credit items,
starting with the item with the oldest due date.

Define Application Rule sets
Receivables predefines the following:

• Line First – Tax After
• Line and Tax Prorate
• Prorate All
• Overapplication
An Application rule set determines how Receivables reduces the balance due on line, tax,
freight, and late charge amounts when you apply a payment or credit memo to a transaction.
You can use a predefined application rule set or set up one to assign it to Receivables system
options. You can also assign Application rule sets to transaction types to indicate how to
process payment applications for the related transactions. During receipt processing, if no
Application rule set is assigned to a transaction type, Receivables uses the Application rule
set assigned to Receivables system options.
You can arrange the order of the line types and application rules in an Application rule set
according to your requirements. Each line type must appear in an Application rule set, and
appear only once. The Overapplication rule is always last in the sequence.
Following are the predefined rules:
• Line First - Tax After: Applies the payment to the open line amount, and then applies the
remaining amount to the associated tax.
• Line and Tax Prorate: Applies a proportionate amount of the payment to the open line
and tax amount for each line.
• Prorate All: Applies a proportionate amount of the payment to each open amount
associated with a debit item.

Define Application Rules: Tax Treatment Option
The Tax Treatment option determines how to reduce the tax

amount in relation to the line amount:
• Prorate: Proportionately reduce the net amount of the line and
associated tax amounts.
• Before: First reduce the open tax amount, and then apply any
remaining amount to the line.
• After: Reduce the open line amount, and then apply any
Note: You must enable the Rounding Correction option for one of
the line types in your Application rule set. Receivables adjusts the
line amount of the line type that has the Rounding Correction
option enabled to account for the rounding adjustment.

Define AutoMatch Rules
The AutoMatch rule set contains the parameters used by AutoApply to evaluate the
references belonging to transactions and the receipts applied to them. The settings in the
• Customer recommendations: The matching process recommends customers for lockbox
receipts that have invalid customer information.
• Transaction recommendations: When a match between a receipt and transactions does
not fall within the defined thresholds, the matching process recommends one or more
transactions for receipt application for both lockbox and manual receipts.
Note: For AutoMatch and Application Exception Rules, you must enable AutoApply in the
Receivables System Options.

Define AutoMatch Rules: Threshold Settings
• Customer Recommendation Threshold: The qualifying

percentage necessary to add customer information to a
receipt.
• Minimum Match Threshold: The qualifying percentage
necessary to automatically apply a receipt to a transaction.
• Combined Weighted Threshold: The qualifying percentages
that define the relative importance of customer, transaction,
and amount matches when deciding the final match score.
The sum of the qualifying percentages must equal 100%.
• Days of Closed Invoices Threshold: Determines which closed
transactions to include in the AutoMatch process.
The AutoMatch threshold settings have the following meanings:

• Customer Recommendation Threshold: The qualifying percentage necessary to add
customer information to a receipt. If the calculated score for a customer account number
is above this threshold, then the AutoApply process adds this customer information to
the receipt. If the calculated score is below this threshold, then the AutoApply process
recommends customer matches for manual update.
• Minimum Match Threshold: The qualifying percentage necessary to automatically apply
a receipt to a transaction. If the calculated score for one or more transactions is below
this threshold, the AutoApply process recommends transactions for receipt application,
in order of the highest percentage match.
Note: The minimum match threshold must be less than the customer recommendation
threshold and the combined weighted threshold.
• Combined Weighted Threshold: The qualifying percentages that define the relative
importance of customer, transaction, and amount matches when deciding the final
match score. The sum of the qualifying percentages must equal 100%.
• Days of Closed Invoices Threshold: Determines which closed transactions to include in
the AutoMatch process. All transactions that were closed on or before the number of
days provided as the threshold value are considered for application or recommendation.

Define AutoMatch Rules: AutoMatch Calculation
The threshold qualifying percentages are compared to the

resulting scores of each customer account number or transaction
number that is analyzed by the matching process:
1. If applicable, remove characters and spaces from the number
as defined by the AutoMatch rule string handling.
2. Apply the formula (Levenshtein algorithm) to the resulting
string to obtain the score. This formula is:
1 - (number of changes required to make the recommended
string match the provided string / length of the larger string).
3. Compare the resulting score to the applicable threshold.
For example, transaction number 10010 is provided by lockbox for a receipt application. This
number does not exist, but AutoMatch finds the number AR10001. The recommendation for
this number is calculated in this way:
1. The AutoMatch rule set string handling settings indicate that the first two characters are
to be removed from a string under consideration.
Receivables removes AR, leaving the number 10001.
2. It takes one transposition (shifting the final 1 and the preceding 0) for 10001 to match
10010. Therefore, the score for this match is (1 - 1/5) = 80%.
3. The 80% score exceeds the Combined Weighted Threshold value of 70%, so the receipt
is automatically applied to transaction AR10001.
Note: An algorithm can also use an edit rather than transposition to shift numbers. In this
example, an edit change would require 2 steps rather than 1.

Define Receipt Application Exception Rules
Use Receipt Application Exception Rules to manage remaining amounts after AutoApply
processing.
The AutoApply process uses the details of the Receipt Application Exception Rules either to
process overpayment and underpayment events automatically or to present them for user
review:
• If an overpayment exists, the application exception rule indicates whether to refund the
amount to the customer, place the amount on account, write off the amount, or leave the
amount unapplied.
• If an underpayment exists, the application exception rule indicates whether to allow
write-off of the remaining open balance amount on the transaction.

Each exception rule consists of a condition, the amount and

percentage that apply to the condition, and the action to take
when this condition arises:
• Action field: The receivables activities that you have defined
for Adjustment, Receipt Write-off, or Refund.
• Underpayment or overpayment amount is accounted for in
general ledger accounts belonging to the applicable
receivables activity.
• User Review Required option: Indicates whether the action is
processed automatically or requires manual review and
approval.
For example, the exception rule:

Over Payment >= 100 Refund
means that after the receipt is applied, if the remaining overpayment is greater than $100,
then a refund is generated for the customer. The refund is automatic, unless user review is
required.
The exception rule:
Under Payment < 5 Write-off
means that if a receipt application results in an underpayment of less than $5, then the
remaining amount is written off. The write-off is automatic, unless user review is required.

Implementation Considerations for Lockbox
Manage Lockbox
Receipt Sources and Receipt Class
Receipt sources assign the receipt class, receipt methods, and remittance banks for lockbox.
Lockbox Transmission Formats
Specify the lockbox transmission format in the Process Receipts Through Lockbox: Import
program. The transmission format ensures that data is correctly transferred from the bank file
into the AR_PAYMENTS_INTERFACE_ALL table.
Lockbox Batch Size
If you do not want the lockbox process to separate your lockbox submission into multiple
receipt batches:
• In the Batch Size field, enter a value larger than the number of receipts in the lockbox
transmission.
• Enable the Complete batches only option when you submit the lockbox transmission.

Implementation Considerations for Lockbox:
Receipt Match By and SmartReceipts
Use the Receipt Match By section of Lockbox to enter settings for
SmartReceipts:
• AutoApply option: Enable this option both in the lockbox and
in Receivables system options.
• AutoMatch Rule Set: Enter the AutoMatch rule set to use for
customer and transaction recommendations for receipt
applications in the lockbox.
• Match Receipts By rule: Use this rule to identify the document
type to use to match receipts to open debit items: Transaction
number, Sales order number, Purchase order number,
Balance forward billing number, Shipping reference, Contract
number.
Using Receipt Match By

• Assign document types to the Match Receipts By rules on customer and site profiles,
lockbox records, and Cash Processing Receivables system options.
• During lockbox processing, Receivables attempts to match receipts to the reference
numbers provided, such as a transaction number. When a matching document is found,
Receivables then looks for the Match Receipts By rule to use. Receivables searches for
a Match Receipts By rule in the following order: Customer Site, Customer, Lockbox, and
System Options.
• If a rule is found that matches the document reference, Receivables matches and
applies the receipt to the transaction. If a rule is not found, Receivables applies the
receipt using the AutoCash rule set defined for the customer.
• If the AutoCash rule set is unable to apply the receipt, Receivables assigns the receipt a
status of Unapplied. In addition, if no Match Receipt By setup exists anywhere in the
system, Receivables also assigns the receipt a status of Unapplied. You must then
manually apply the receipt.

Implementation Considerations for Revenue
Management
Depending on your requirements, you may need to configure or
update these setups related to revenue management:
• Settings for Revenue Recognition.
• Revenue Scheduling Rules.
• Define Revenue Policies.
• Define Revenue Contingencies.

Settings for Revenue Recognition
These settings influence revenue recognition on your

transactions:
• Salesperson System Options.
• Revenue Adjustment Reason Lookup Type.
• AutoAccounting based on Standard Line.
Salesperson System Options

Enable the Require Salesperson system option for revenue accounting to assign sales credits
to all transactions that can be adjusted for either revenue or sales credits. If you do not
normally track sales credits, and you want to use revenue accounting for revenue adjustments
only, use the default salesperson value of No Sales Credit.
Enter a value in the Sales Credit Percent Limit field to limit the percentage of revenue plus
nonrevenue sales credit that a salesperson can have on any transaction line. If you do not
enter a value, then no sales credit limit validation is performed during revenue accounting.
Revenue Adjustment Reason Lookup Type
Use the Revenue Adjustment Reason lookup type to define reasons specific to your
requirements for making revenue adjustments.
AutoAccounting based on Standard Line
If AutoAccounting is based on standard line, the transaction line must be either an inventory
item or a memo line, and not a user-entered line.

Revenue Scheduling Rules
Revenue scheduling rules determine the accounting period or periods in which to record
revenue distributions for transactions.
Assign revenue scheduling rules to transactions according to your requirements. Each
transaction line must have revenue scheduling rule information, including the rule name, rule
type, revenue period and number of revenue periods, date to start recognizing revenue, and,
where applicable, an end date.

Revenue Scheduling Rules: Rule Types
• Daily Revenue Rate, All Periods: Uses a daily revenue rate to

accurately calculate revenue distributions across all
accounting periods, including both full and partial periods.
• Daily Revenue Rate, Partial Periods: Uses a daily revenue
rate to accurately calculate the revenue for partial periods
only.
• Fixed Schedule: Requires both a period type (such as weekly
or monthly) and the number of periods over which to
recognize revenue.
• Variable Schedule: Requires a period type, but not the
number of periods.
The rule type on the revenue scheduling rule calculates the revenue distributions on the
transaction:
• Daily Revenue Rate, All Periods: This rule type provides the most precise revenue
recognition schedule.
• Daily Revenue Rate, Partial Periods: This rule provides an even, prorated revenue
distribution across the full periods of the schedule.
• Fixed Schedule: With this rule type, revenue is evenly divided across the periods.
• Variable Schedule: The number of periods is calculated automatically either when you
enter a transaction manually or import using AutoInvoice.

Define Revenue Policies
Navigate to: Setup and Maintenance > All Tasks > Search field: select Task lists > Name
field: enter Receivables > Search > Define Receivables Configuration > Define Revenue
Management Configuration > Manage Revenue Policies > Go to Task.
Use the revenue policy to make automatic revenue recognition decisions for manually entered
and imported transactions.
You specify revenue policies for each applicable business unit. When you enter transactions
either manually or using AutoInvoice, Receivables evaluates each transaction according to
the revenue policy. If a transaction or transaction line exceeds the policy definitions,
Receivables:
• Assigns a revenue contingency to the transaction line.
• Defers revenue on the transaction or transaction line.
• Recognizes revenue on the transaction or transaction line according to the details of the
contingency.

Define Revenue Policies
Revenue policies provide contingency monitoring in these areas:

• Credit Classification: Assign up to three levels of risk.
Receivables compares these risk levels to the credit
classification assigned to the profile of the customer on the
transaction. A contingency is assigned to the transaction if the
customer has a credit classification that matches one of the
credit classifications defined in your revenue policy.
• Payment Terms: Enter the maximum time period in days
before payment terms become extended. The contingency is
assigned to the transaction if its payment terms exceed the
payment terms threshold of your revenue policy.

Define Revenue Contingencies
Navigate to: Setup and Maintenance > All Tasks > Search field: select Task lists > Name
field: enter Receivables > Search > Define Receivables Configuration > Define Revenue
Management Configuration > Manage Revenue Contingencies > Go to Task.
When you enter or import transactions, Receivables evaluates each transaction and decides
whether to immediately recognize revenue, or temporarily defer revenue to an unearned
revenue account based on the contingencies assigned to the transaction. Revenue is
subsequently recognized according to the removal event assigned to each contingency.
Contingencies can expire automatically based on specific events. Examples include:
• Payment: The contingency on a transaction is removed when payment is received.
• Time: A predefined time period has elapsed, after which the contingency expires and
revenue can be recognized.
• User Action: An event is recorded, such as proof of delivery, which allows for the
removal of a contingency.
You can also expire contingencies manually at any time. When a contingency expires,
Receivables can recognize revenue on the related transaction or transaction lines.

Receivables provides predefined revenue contingencies to assign

to your customer transactions. You can also define your own
contingencies based on the predefined contingencies, and you
can define revenue contingency assignment rules to control which
contingencies are assigned to which transactions.
The table on the next slide describes the predefined revenue
contingencies and their corresponding contingency removal
events.

Contingency Name Contingency Removal Event

Cancellation Contingency expiration date or period
Customer Creditworthiness Receipt application
Delivery Proof of delivery
Doubtful Collectability Receipt application
Explicit Acceptance Customer acceptance
Extended Payment Terms Receipt application
Forfeitures Contingency expiration date or period
Installation Customer acceptance
Pre-Billing Acceptance Invoicing
Refund Contingency expiration date or period

Summary
In this lesson, you should have learned:

• Understand key concepts in Oracle Fusion Receivables.
• Understand how the Rapid Implementation spreadsheet
creates setups for Receivables.
• Understand required and optional setups for Receivables.
• Understand implementation considerations for setting up:
– Customers and parties.
– Transactions.
– Receipts.
– Revenue management.

16
Configuring Oracle Payments:
Receivables

Objectives

• Understand Remittance Banks and Bank Accounts.
• Describe Receipt Classes and Receipt Methods.
• Explain Receipt Sources.
• Define AutoCash Rules.
• Define Application Rules.
• Understand AutoMatch Rules.
• Define Receipt Application Exception Rules.
• Explain the Implementation Considerations for Lockbox.

Defining Remittance Banks and
Bank Accounts
Define all of the banks and bank accounts that you use to remit payments. You can define
multiple currency bank accounts to accept payments in more than one currency.
You define banks and bank accounts in Oracle Fusion Cash Management. This course
covers in more detail defining banks, branches and bank accounts in the Configuring Oracle
Fusion Cash Management lesson.

Practice 16-1 Overview: Creating Banks, Branches, and
Accounts Using a Spreadsheet
• Creating banks, branches, and accounts using a spreadsheet.

Receipt Class, Receipt Method,
and Bank Account Relationship
The receipt class and related receipt methods provide default accounting information for
receipts.
Receipt Class and Receipt Method Relationship
The relationship between receipt class, receipt method, and bank account allows for
accounting defaults during receipt processing.
When you create a receipt:
• Specify the receipt method and one of the remittance bank accounts assigned to the
receipt method to use for the receipt.
• Accounting for the receipt is derived from the general ledger accounts assigned to the
remittance bank account.
• Receivables processes the receipt according to the receipt class that the receipt method
is associated with.
• For automatic receipts, Receivables uses the automatic processing settings on the
receipt method.

Defining Receipt Classes
Receipt Classes provide:

• Creation Method
• Remittance Method
• Clearance Method
• Receipt Method
The receipt class determines the processing steps that are required for receipts. These steps
include automatic or manual creation, the remittance method, the bank clearance method,
and whether receipts require confirmation by the customer.
Specify for each receipt class:
Creation Method: How to create receipts:
• Manual: Standard, batch, and lockbox receipts
• Automatic: Bank account transfer and credit card receipts. Oracle Fusion Payments
processes funds capture.
Remittance Method: How to derive the remittance account for automatic receipts:
• No Remittance: Receipts that are not remitted.
• Standard: Regular remittance.
• Factoring: Factored remittance.
• Standard and Factoring: Use the receipt class for either standard or factored
remittance.

Clearance Method: How to reconcile receipts before posting to general ledger:
• Direct: Clear at the time of receipt entry. Use this method if you do not expect the
receipts to be remitted to the bank and subsequently cleared. Receipts are assumed to
be cleared at the time of receipt entry and requires no further processing. This is the
equivalent of No Clearing Method.
• By Automatic Clearing: Clear using the Clear Receipts Automatically program.
• By Matching: Clear receipts manually in Cash Management.
This is the preferred method of clearing receipts. Receipts cleared through Cash Management
automatically generate reconciliation accounting entries that are posted to general ledger.

Receipt Methods
Receipt Methods associate to the Receipt Class:

• A Bank Account
• General Ledger Accounts
You can assign more than one remittance bank to each receipt class and receipt method
combination.
Specify the bank name, branch, account, and currency for your remittance bank. You must
designate one remittance bank account as Primary for each currency.
Specify the general ledger accounts that Receivables uses when you enter or apply receipts
using this remittance bank account.
Legal entities are linked to remittance bank accounts. All receipts inherit the legal entity from
the bank account, and all refunds inherit the legal entity of the original receipt.

Practice 16-2 Overview: Creating a Receipt Class and
Receipt Method
• Creating a receipt class and receipt method.
• Associating your bank account to the receipt method.

Defining Receipt Sources
Determine:
• Receipt Source Type
– Automatic
– Manual
• Batch Numbering
– Automatic
– Manual
• Defaults
– Receipt Class
– Receipt Method
– Bank Account
Define a receipt source to determine:

• Creation method (automatic or manual)
• Batch numbering (automatic or manual)
• Default receipt class, receipt method, and bank account

Practice 16-3 Overview: Creating a Receipt Source

• Creating a receipt source.

AutoCash Rules
The receipts can be applied by using:

• Clear the Account
• Clear Past Due Invoices Grouped by Payment Terms
• Combo Rule
• Apply to the Oldest Invoice First
• Match Payment with Invoice
• Clear Past Due Invoices
Receivables uses the AutoCash rule set, if one is available, to apply a receipt when no
transaction information is available for the receipt. The AutoCash rule set determines how to
apply a receipt to customer open debit items and update the customer account balance. The
AutoCash rule set consists of general settings and a combination of the five available rules for
applying receipts.
When you apply a receipt, Receivables uses the first rule in the AutoCash rule set. If the first
rule in the set does not find a match, Receivables uses the next rule in the sequence, and so
on until it can apply the receipt. If none of the rules in the AutoCash rule set apply,
Receivables places the remaining amount either unapplied or on-account, depending on the
setting of the Remaining Remittance Amount option in the AutoCash rule set.
• Match Payment with Invoice: Apply a receipt to a single invoice, debit memo, or
chargeback only if the receipt amount exactly matches the amount of the debit item.
• Clear the Account: Apply a receipt only if the receipt amount exactly matches the
customer open balance.
• Clear Past Due Invoices: Apply a receipt only if the receipt amount exactly matches the
customer past due account balance.
• Clear Past Due Invoices Grouped by Payment Terms: Apply a receipt only if the receipt
amount exactly matches the sum of the customer credit memos and past due invoices.
• Apply to the Oldest Invoice First: Apply receipts to customer debit and credit items,
starting with the item with the oldest due date.

Define Application Rule sets
Receivables predefines the following:

• Line First – Tax After
• Line and Tax Prorate
• Prorate All
• Overapplication
An Application rule set determines how Receivables reduces the balance due on line, tax,
freight, and late charge amounts when you apply a payment or credit memo to a transaction.
You can use a predefined application rule set or set up one to assign it to Receivables system
options. You can also assign Application rule sets to transaction types to indicate how to
process payment applications for the related transactions. During receipt processing, if no
Application rule set is assigned to a transaction type, Receivables uses the Application rule
set assigned to Receivables system options.
You can arrange the order of the line types and application rules in an Application rule set
according to your requirements. Each line type must appear in an Application rule set, and
appear only once. The Overapplication rule is always last in the sequence.
Following are the predefined rules:
• Line First - Tax After: Applies the payment to the open line amount, and then applies the
• Line and Tax Prorate: Applies a proportionate amount of the payment to the open line
and tax amount for each line.
• Prorate All: Applies a proportionate amount of the payment to each open amount
associated with a debit item.

Define Application Rules: Tax Treatment Option
The Tax Treatment option determines how to reduce the tax

amount in relation to the line amount:
• Prorate: Proportionately reduce the net amount of the line and
associated tax amounts.
• Before: First reduce the open tax amount, and then apply any
remaining amount to the line.
• After: Reduce the open line amount, and then apply any
Note: You must enable the Rounding Correction option for one of
the line types in your Application rule set. Receivables adjusts the
line amount of the line type that has the Rounding Correction
option enabled to account for the rounding adjustment.

Define AutoMatch Rules
The AutoMatch rule set contains the parameters used by AutoApply to evaluate the
references belonging to transactions and the receipts applied to them. The settings in the
• Customer recommendations: The matching process recommends customers for lockbox
receipts that have invalid customer information.
• Transaction recommendations: When a match between a receipt and transactions does
not fall within the defined thresholds, the matching process recommends one or more
transactions for receipt application for both lockbox and manual receipts.
Note: For AutoMatch and Application Exception Rules, you must enable AutoApply in the
Receivables System Options.

Define AutoMatch Rules: Threshold Settings
• Customer Recommendation Threshold: The qualifying

percentage necessary to add customer information to a
receipt.
• Minimum Match Threshold: The qualifying percentage
necessary to automatically apply a receipt to a transaction.
• Combined Weighted Threshold: The qualifying percentages
that define the relative importance of customer, transaction,
and amount matches when deciding the final match score.
The sum of the qualifying percentages must equal 100%.
• Days of Closed Invoices Threshold: Determines which closed
transactions to include in the AutoMatch process.
The AutoMatch threshold settings have the following meanings:

• Customer Recommendation Threshold: The qualifying percentage necessary to add
customer information to a receipt. If the calculated score for a customer account number
is above this threshold, then the AutoApply process adds this customer information to
the receipt. If the calculated score is below this threshold, then the AutoApply process
recommends customer matches for manual update.
• Minimum Match Threshold: The qualifying percentage necessary to automatically apply
a receipt to a transaction. If the calculated score for one or more transactions is below
this threshold, the AutoApply process recommends transactions for receipt application,
in order of the highest percentage match.
Note: The minimum match threshold must be less than the customer recommendation
threshold and the combined weighted threshold.
• Combined Weighted Threshold: The qualifying percentages that define the relative
importance of customer, transaction, and amount matches when deciding the final
match score. The sum of the qualifying percentages must equal 100%.
• Days of Closed Invoices Threshold: Determines which closed transactions to include in
the AutoMatch process. All transactions that were closed on or before the number of
days provided as the threshold value are considered for application or recommendation.

Define AutoMatch Rules: AutoMatch Calculation
The threshold qualifying percentages are compared to the

resulting scores of each customer account number or transaction
number that is analyzed by the matching process:
1. If applicable, remove characters and spaces from the number
as defined by the AutoMatch rule string handling.
2. Apply the formula (Levenshtein algorithm) to the resulting
string to obtain the score. This formula is:
1 - (number of changes required to make the recommended
string match the provided string / length of the larger string).
3. Compare the resulting score to the applicable threshold.
For example, transaction number 10010 is provided by lockbox for a receipt application. This
number does not exist, but AutoMatch finds the number AR10001. The recommendation for
this number is calculated in this way:
1. The AutoMatch rule set string handling settings indicate that the first two characters are
to be removed from a string under consideration.
Receivables removes AR, leaving the number 10001.
2. It takes one transposition (shifting the final 1 and the preceding 0) for 10001 to match
10010. Therefore, the score for this match is (1 - 1/5) = 80%.
3. The 80% score exceeds the Combined Weighted Threshold value of 70%, so the receipt
is automatically applied to transaction AR10001.
Note: An algorithm can also use an edit rather than transposition to shift numbers. In this
example, an edit change would require 2 steps rather than 1.

Use Receipt Application Exception Rules to manage remaining amounts after AutoApply
processing.
The AutoApply process uses the details of the Receipt Application Exception Rules either to
process overpayment and underpayment events automatically or to present them for user
review:
• If an overpayment exists, the application exception rule indicates whether to refund the
amount to the customer, place the amount on account, write off the amount, or leave the
amount unapplied.
• If an underpayment exists, the application exception rule indicates whether to allow
write-off of the remaining open balance amount on the transaction.

Each exception rule consists of a condition, the amount and

percentage that apply to the condition, and the action to take
when this condition arises:
• Action field: The receivables activities that you have defined
for Adjustment, Receipt Write-off, or Refund.
• Underpayment or overpayment amount is accounted for in
general ledger accounts belonging to the applicable
receivables activity.
• User Review Required option: Indicates whether the action is
processed automatically or requires manual review and
approval.
For example, the exception rule:

Over Payment >= 100 Refund
means that after the receipt is applied, if the remaining overpayment is greater than $100,
then a refund is generated for the customer. The refund is automatic, unless user review is
required.
The exception rule:
Under Payment < 5 Write-off
means that if a receipt application results in an underpayment of less than $5, then the
remaining amount is written off. The write-off is automatic, unless user review is required.

Implementation Considerations for Lockbox
Manage Lockbox
Receipt Sources and Receipt Class
Receipt sources assign the receipt class, receipt methods, and remittance banks for lockbox.
Lockbox Transmission Formats
Specify the lockbox transmission format in the Process Receipts Through Lockbox: Import
program. The transmission format ensures that data is correctly transferred from the bank file
into the AR_PAYMENTS_INTERFACE_ALL table.
Lockbox Batch Size
If you do not want the lockbox process to separate your lockbox submission into multiple
receipt batches:
• In the Batch Size field, enter a value larger than the number of receipts in the lockbox
transmission.
• Enable the Complete batches only option when you submit the lockbox transmission.

Implementation Considerations for Lockbox:
Receipt Match By and SmartReceipts
Use the Receipt Match By section of Lockbox to enter settings for
SmartReceipts:
• AutoApply option: Enable this option both in the lockbox and
in Receivables system options.
• AutoMatch Rule Set: Enter the AutoMatch rule set to use for
customer and transaction recommendations for receipt
applications in the lockbox.
• Match Receipts By rule: Use this rule to identify the document
type to use to match receipts to open debit items: Transaction
number, Sales order number, Purchase order number,
Balance forward billing number, Shipping reference, Contract
number.
Using Receipt Match By

• Assign document types to the Match Receipts By rules on customer and site profiles,
lockbox records, and Cash Processing Receivables system options.
• During lockbox processing, Receivables attempts to match receipts to the reference
numbers provided, such as a transaction number. When a matching document is found,
Receivables then looks for the Match Receipts By rule to use. Receivables searches for
a Match Receipts By rule in the following order: Customer Site, Customer, Lockbox, and
System Options.
• If a rule is found that matches the document reference, Receivables matches and
applies the receipt to the transaction. If a rule is not found, Receivables applies the
receipt using the AutoCash rule set defined for the customer.
• If the AutoCash rule set is unable to apply the receipt, Receivables assigns the receipt a
status of Unapplied. In addition, if no Match Receipt By setup exists anywhere in the
system, Receivables also assigns the receipt a status of Unapplied. You must then
manually apply the receipt.

Summary

• Understand Remittance Banks and Bank Accounts.
• Describe Receipt Classes and Receipt Methods.
• Explain Receipt Sources.
• Define AutoCash Rules.
• Define Application Rules.
• Understand AutoMatch Rules.
• Define Receipt Application Exception Rules.
• Explain the Implementation Considerations for Lockbox.

17
Configuring Oracle Fusion Cash
Management

Objectives

• Understand the key features of Cash Management.
• Define banks, branches, and accounts using the Rapid
Implementation process.
• Configure Bank Statement Processing and Reconciliation.
• Perform Automatic Reconciliation.
• Describe the New Features for R11.

Cash Management: Overview
Cash management integrates with several Oracle Fusion Applications. You can Import bank
statements in to the Cash Management and reconcile either manually or automatically.
Following are the applications and transaction types:
• Oracle Fusion Receivables: Receipts
• Oracle Fusion Payables and Payments: Payments
• Oracle Fusion Payroll: Payroll payments
• Oracle Fusion General Ledger: Miscellaneous cash transactions such as bank charges,
interest, and fees.

Cash Management Setups for Automatic Reconciliation
Overview
Before you can perform automatic bank statement reconciliation you must complete the
following setups. Note: You must have the Cash Manager role to perform the Cash
Management setups. The setups include:
• Banks, Branches, and Accounts
• Parse Rule Sets: Parsing rules are used to parse inbound addenda and other fields into
more granular constituent fields. A parsing rule set is associated to a bank account and
used as reference data for the parsing batch job or concurrent program.
• Transaction Codes: Extend or modify existing delivered transaction codes or create new
transactions codes as required. Transaction codes must match your bank’s transactions
codes.
• Transaction Type Mapping: Based on the payment method, identify the transaction
types for Payables and Receivables and provide a description.
• Matching Rules: Flexible matching rules determine how to match Bank Statement Lines
and system transactions.
• Tolerance Rules: Tolerance rules include date, amount and percentage options. Manual
reconciliation can have a tolerance rule assigned to a bank account. Automatic
reconciliation can have a tolerance rule applied if the matching rule matches on the
date, amount or both.

• Matching Rule Set: Bank statement reconciliation rule sets are a group of matching rules
and tolerance rules. They are assigned to a bank account and used to reconcile bank
statement lines with transactions.
• Transaction Creation Rules: Used to identify an unreconciled or external bank statement
line or lines and create an account for a transaction. For example, bank fees and
interest.
• Define Subledger Accounting Rules: You can customize predefined accounting rule
setups for accounting-enabled events by creating custom rules for the external entry
transactions.

Set Up Banks, Branches, and Accounts
Banks, branches, and accounts fit together on the premise of the Bank Account model. Banks
and Branches are in the Trading Community Model.
The Bank Account model enables you to define and keep track of all bank accounts in one
place and explicitly grant account access to multiple business units, functions, and users.
This eliminates the redundant duplicate bank account setup under different business units
when these business units share the same bank account.
Oracle recommends that you use the Rapid Implementation Spreadsheet to create your
Banks, Branches, and Accounts.
However, to maintain them you use the Manage Banks, Manage Branches, and Manage
Accounting tasks from the Functional Setup Manager.

Manage and Maintain Banks
Required information for Bank setup:

• Country
• Bank Name
Creating a bank is the first step in the bank account creation. You can create a new bank from
an existing party. If a party with the same name for the same country is found after the bank
name is entered, a message asks whether you want to use that party to create the bank. The
option is available only after the existing party has been found with the same name and
country.
Create, edit, or update bank information:
• Country: There may be some country specific requirements for setting up a bank.
• Bank Name: Must be unique within a country.
• Addresses (Optional)
• Contacts (Optional)

Manage and Maintain Branches
Required information for Branch setup:

• Bank Name
• Branch Name
After you have created your bank, the next step is to create a branch or branches associated
with the bank. The matching option is also available when you are creating branches. To
create a new branch without using the matching option, manually enter the information
required. You can define other branch-related attributes on the page. If you do not use the
matching option when an existing party is found, a branch with the same party name is
created.
Create, edit, or update branch information:
• Bank: The bank associated with this branch.
• Branch Name: Must be unique within a bank.
Optional Details:
• Alternate Branch Name
• Routing Transit Number
• Description
• BIC Code
• Branch Number Type
• Bank Branch Type
• EDI ID Number

• EFT Number
• EDI Location
• RFC Identifier
• Addresses (Optional)
• Contacts(Optional)

Manage and Maintain Accounts
Four area are associated with defining an account:

• General Information
• Control of the Account
• Security Access to the Account
• Business Unit Assignment
When the bank and branch are created, you can proceed to the bank account setup. Select
the bank branch you want to associate with your bank account. Four areas are associated
with defining the account: general information, control of the account, security access to the
account, and business unit assignment. If this bank account is for Payables or Receivables,
the Business Unit Access needs to be added first for the business units to use this bank
account.
The Header section provides:
• The Account Name: Due to the sensitivity of bank account numbers, the bank account
name is often used to identify a particular bank account and must be unique across the
system. Oracle recommends that you use defining attributes such as account use,
bank, and currency in the bank account name.
• Account Number: Issued by the bank.
• Currency: Usually the currency of the Ledger and owning Legal Entity.
• Legal Entity Name: The owning legal entity of the bank account. The legal entity must
have a primary ledger associated with it before it shows up in the Legal Entity list of
values.
• Account Use: Select Payables, Payroll, and/or Receivables.

Manage and Maintain Accounts: General Tab
The General tab provides:

• GL Accounts
• Additional Information
• Contacts
• Payment Documents
The General tab provides:

• GL account information: Consider assigning a unique GL Cash account and Cash
Clearing to each bank account and using it to record all cash transactions to facilitate
book to bank reconciliation. If you are using bank statement reconciliation, all subledger
cash transactions initially account to the Cash Clearing account. When the bank
statement reconciliation process is complete, the cash transaction is then moved from
the Cash Clearing account to the Cash account.
• Additional information: Provides information such as Alternate Account Name, Account
Holder, Alternate Account Holder, EFT Number, Agency Location Code. You can also
select whether the account is Active, can use multiple currencies, and is a netting
account.
• Contacts
• Payment Documents: Used during the Payment Process Request process to create a
check, EFT, wire, or file. See the next slide for more details.

Manage and Maintain Accounts: Payment Documents
Used during the Payment Process Request process to create a

check, EFT, wire, or payment file. Payment documents include:
• Payment Document Name
• Paper Stock Type
• First Available and Last Available Document Number
• Format
Every bank account that is used in the Payment Process Request process must have a
Payment Document defined. The definition includes:
• Payment Document Name: Consider using a name that reflects the type of payment, for
example BofA Printed Check.
• Paper Stock Type: The choices are
- Blank Stock: The format for this type creates the check or electronic file and the
system numbers or sequences the payments.
- Numbered Stock: These are preprinted checks. The format for this type fills in the
check and the numbers must be synchronized with the system’s numbering.
- Number of Setup Documents: This is useful if you are using Numbered Stock and
need to run a few test documents to ensure that the format fits the preprinted
check.
- Format: The BI Publisher format setup in Payments used to create the payment
document.
- First Available Document Number: This is required for blank stock and numbered
stock. This keeps the documents in synchronization with the system numbering.
- Last Available Document Number: This is only required for numbered stock.

Manage and Maintain Accounts: Control Tab
Cash Management Controls:

• Reconciliation
• Bank Statement Processing
• Bank Statement Transaction Creation Rules
• Cash Positioning and Forecasting
Payables Controls
The control tab provides control information for Cash Management and for Payables. Note:
This course covers the Cash Management setups for this tab later in this lesson.
Assign the following items for Cash Management Controls:
• Reconciliation:
- Manual Reconciliation Tolerance Rule
- Bank Exchange Rate type
- Automatic Reconciliation Rule Set
- Reconciliation Start Date
• Bank Statement Processing:
- Parsing Rule Set
- Bank Statement Transaction Creation Rules
• Cash Positioning and Forecasting:
- Target Balance
- Transaction Calendar

Assign the following items for Payables Controls:
• Pooled Account
• Minimum Payment
• Maximum Payment
• Allow zero payments
• Maximum Outlay

Manage and Maintain Accounts: Security Tab
Further secure Bank Accounts by:

• Users
• Roles
You can further secure the bank account so that it can be used only by certain users and
roles.
The default value for secure bank account by users and roles is No. In Payables and
Receivables, even if the secure bank account by users and roles is no, you must have proper
access to the bank account.
If the secure bank account by users and roles is set to Yes, you must be named or you must
carry a role that is named expressly on the bank account to use it.

Manage and Maintain Accounts: Business Unit Access
Tab
One or more Business Units must be granted access to the Bank
Account before it can be used in:
• Payables
• Receivables
Payables and Receivables account access is secured by business unit. In addition to the
appropriate application use or uses being selected, one or more business units must be
granted access before the bank account can be used by Payables and Receivables. Only
business units which use the same ledger as the owning legal entity of the bank account can
be assigned access.

Configuring Cash Management Rapid Implementation
• Create Banks, Branches, and Accounts in Spreadsheet.

• Upload Banks, Branches, and Accounts.
The Define Financials Configuration for Rapid Implementation task list provides the required
and most frequently used setup tasks for implementation scenarios observed in practice. The
primary mechanism for rapid implementation is to create and upload Banks, Branches, and
Accounts setup using a spreadsheet upload.
Note: Use the standard Set Up Banks, Branches, and Accounts list for the ongoing
maintenance and for those configurations that cannot be set up using the rapid
implementation approach.
Prepare your bank, branch, and account information to enter into the spreadsheet template.
• Bank information requires the country, name, and number.
• Branch information requires name, number, and BIC code.
• Account information requires name, number, currency, and legal entity.
• After you finish preparing the data in the spreadsheet, click the Generate Banks,
Branches, and Accounts File button. Save the generated XML file.
Upload the XML file into Fusion.

Bank Statement Processing Overview
Before reconciling a bank statement, you must first process the

bank statement into Cash Management by:
• Loading and importing electronic bank statements.
• Using the Parse Rule Set to transform information on the bank
statement into attributes used for reconciliation.
Cash Management supports the following protocols:
• BAI2
• SWIFT (Society for Worldwide Interbank Financial
Telecommunication)
• FINSTA
• ISO20022
Manage bank statements and validate them against cash account balances in the general
ledger and subledgers to maintain an accurate picture of the organization's cash position.
Tasks include:
• Processing electronic bank statements.
• Reporting on bank account balances.
• Recording first presentment items like bank fees and charges to the general ledger.
• Reconciling bank statements to payments paid and received.
• Defining parse rule sets to transform data during the bank statement import process.

Key Setup Tasks for Bank Statement Processing
For Bank Statement Processing, create and assign:

• Cash Transaction Type Mapping for Payables, Receivables,
and Payroll.
• Transaction Codes
• Code Map Groups
• Bank Statement Formats
• Parsing Rule Set
• Transaction Creation Rules
For bank statement processing to occur, you must first create a Cash Transaction Type
Mapping for Payables, Receivables and Payroll. Then set up or edit predefined Transaction
Codes using the mapped transaction types. Transaction codes are then used to create Code
Map Groups and Code Map Groups are used to create Bank Statement Formats.
When a bank statement comes through the interface the Parsing Rule Set is used to
transform data from the bank statement file.
Finally, if there are any external transactions like bank fees, the Transaction Creation Rule
creates a transaction that can be reconciled and accounted.

Manage Cash Transaction Type Mapping
The transaction type mapping enables you to associate a Cash

Management transaction type with a payment or receipt method
or a Payroll payment type.
Create this association by mapping Cash Management
Transaction Types to:
• Payables Payment Methods
• Receivables receipt methods
• Payroll Payment Types
Mapping payment, receipt method, or Payroll payment types to Cash Management

transaction types can be helpful for bank statement reconciliation.
When a transaction code is created, a transaction type needs to be associated with it. A bank
statement line that has the transaction code has a corresponding transaction type.
If a system transaction payment, receipt method, or Payroll payment type is mapped to the
transaction type, the transaction type matching criteria can be used during autoreconciliation.
Payables and Receivables Payment Method Mapping:
• Identify the type, transaction type, and method.
• To map payable payment methods to cash transaction types, use disbursement type.
• To map Receivables receipt methods to cash transaction types, use Receipt type.

Bank Statement Transaction Codes
Bank statement transaction codes are the internal codes that are
used on a bank statement line to identify the type of transaction
being reported.
You can create or edit predefined Bank Statement Transaction
Codes.
You can use the predefined transaction codes or create your own if required. When you
create the Transaction Code, it is available for all Bank Accounts (without restriction.)
As soon as you create one Bank Statement, and assign the transaction code to a bank
statement line, the Bank Account appears in the Bank Account usage panel.
Bank Account usage indicates the list of Bank Accounts that are using a specific transaction
code in any Bank Statement Line.
To create a transaction code you must provide:
• The Transaction Code: This is typically numeric.
• Description
• Transaction Type: The choices are:
- Automated Clearing House
- Bank Adjustment
- Check
- Electronic Funds Transfer
- Fee

- Interest
- Lockbox
- Miscellaneous
- Zero Balancing
Transaction Codes are used on Code Map Groups, Bank Statement Transaction Creation
Rules and on the Bank Statements themselves.

Practice 17-1 Overview: Creating Transaction Codes

• Creating a transaction code for EFT Disbursements and Bank
Fees.

Payment Code Map Groups
• There are two types of Codes that can be created in the map
groups:
• Balance: Opening and Closing book balances.
• Transaction: Used on bank statement lines.
A single set of internal balance and transaction codes is maintained within the Oracle Fusion
Cash Management application. The balance codes are defined in the lookup
CE_INTERNAL_BALANCE_CODES and the transaction codes are defined through the
Manage Bank Statement Transaction Codes task. Externally reported balance and
transaction codes are the ones that appear in the data files provided by the banks. The
externally reported codes can be transformed to the internally defined codes using Oracle
Fusion Payments Code Map Groups.
When setting up the Code Map Group in Payments for Balance code mapping, use
CE_BALANCE_CODE for the Field attribute of the Mappings section; for transaction code
mapping, enter CE_TRX_CODE for the Field attribute. The input value is the external code,
and the output value is the internal code. The value you enter in the Output Value field must
be a valid internal code. By mapping an input value to the output value, you are mapping the
external code to the internal code.
For example, sometimes different banks may use the same external transaction code
differently. Bank of America may use BAI2 transaction code 174 to mean incoming wire
transfer, but Citibank may use the same code to mean check deposit. In such a case, you
create two code map groups. One is for Bank of America and it maps external transaction
code 174 to internal code ‘WIRE IN’. The other code map group is created for Citibank and it
maps 174 to ‘CHECK DEPOSIT’.

Oracle predefines two code map groups. One for mapping the BAI2 opening and closing
booked balances codes and the other for mapping the EDIFACT opening and closing booked
balance codes to the internal balance codes.
SWIFT940 does not require a balance code mapping because it is position-based, but a code
map group can be created to map the transaction codes to the internally defined transaction
codes.
Bank statement codes that are defined as internal codes do not require a code map group.
For example, the transaction codes created for bank fee, charges, and interest don’t need a
code map group.

Code Map Group Example
Bank of America and Citibank use the same Transaction Code

174 for different types of transactions.
Code Map Group Field Value Mapping

Name
BofA BAI2 Code CE_TRX_CODE Input Value: 174
Map Output Value: WIRE IN
Citibank BAI2 CE_TRX_CODE Input Value: 174
Code Map Output Value: DEPOSIT

Bank Statement Formats
Bank statement formats are defined in Fusion Payments and

used during the bank statement processing job.
Format Name Code Map Group

BofA BAI2 Format BoA BAI2 Code Map
Citibank BAI2 Format Citibank BAI2 Code Map
There are predefined formats that can be edited and used for the bank statement process job.
The predefined formats are:
• BAI2
• EDIFACT FINSTA
• ISO20022
• SWIFT MT940
For the example above, you would need to create two formats in Oracle Fusion Payments
using the Manage Formats task. Assign the two different code map groups to the two formats.
You can copy all the other values from the seeded BAI2 format.
When you submit the bank statement processing job, you can choose the corresponding
format depending on whether the bank statement is from Bank of America or Citibank. When
the statements are processed, the same 174 transaction code is mapped to different internal
codes.

Parse Rule Sets
Parse Rule Sets are used to transform data during the bank
statement import process.
When defining Parse rule sets, consider defining rules for
statement line attributes such as reconciliation reference that are
used for reconciliation matching and identifying statement lines
for external cash transaction creation and accounting.
Parse rules move data from one field to another and are most commonly used to parse data
from the statement line addenda field into more specific statement line fields.
Each parse rule within a Parse rule set consists of the following fields:
• Sequence: Determines the order in which to process the rules.
• Transaction Code: The code used to determine the statement line type.
• Source: The interface table field that contains the data to be parsed.
• Target: The statement line field that the data is parsed to.
• Rule: Contains the syntax for determining the data within the source field that is parsed.
• Overwrite: Used to control whether to overwrite existing data in a target field or skip
parsing the data.

Parse Rule Set Example
Description Source Data Rule Target Data

Extract numeric EST/TRX RTE RTE (N.NN 3.76
rate data. 3.76
USD/LIBOR
CPTY: PRU
Extract the ?26/OCMT/GBP ?26/OCMT/GBP 13949.25

original amount 13949,25/? (NNNNN,NN)/?
from Additional
entry
information.
Extract the EST/TRX/RTE RTE(7-9) USD

currency from 3.76
the same source USD/LIBOR
field using CPTY:PRU
positional
matching.
The Parse rule syntax is described here:

[LITERAL](<[MATCHING TOKEN],[START-END]>)[LITERAL]
Where
LITERAL = A string or character value represented by an identifier that should match the
source data exactly.
MATCHING TOKEN = A token (or set of tokens) which describes the data to extract. Valid
tokens are:
1. N = Extract a valid number
2. . = Decimal position
3. X = Extract an alpha numeric
4. ~ = Extract everything in the source field from the parse position to either the end of the
data or up to the next literal.
5. START = A position to begin extracting data, offset by the parse position. It must be a
valid numeric.
6. END = A position to stop extracting data. END can be either a valid numeric or the ~
token.

Parse Rule Set Example
Description Source Data Rule Target Data

Extract the EST/TRX RTE CPTY: (X~) PRU
counterparty of an 3.76 USD/LIBOR
unknown string length CPTY: PRU
from the same source
field
Extract Transaction ID CustRef # CustRef # A.23@orlc

from Customer A.23@orlc.com (X~).com
Reference. (Customer
Reference)

Bank Statement Transaction Creation Rules
External cash transactions are transactions related to cash

activity that have not been recorded within the system. Four
sources of external transactions exist:
• Manual entry
• Import
• Balancing transactions created during reconciliation for
amount variances.
• Bank statement transactions created when you are using the
Bank Statement Transaction Creation program. External cash
transactions can optionally be accounted.
Bank Statement Transaction Creation is a program that identifies unreconciled bank

statement lines and creates transactions and an account for first notice items such as bank
charges, fees, or interest and reconciles the bank statement transaction. Oracle recommends
that you first run Autoreconciliation and perform any manual reconciliation on a bank
statement before running the Bank Statement Transaction Creation program to avoid creating
external transactions from bank statement lines which already have transactions recorded in
the application. You create the rules to identify the statement lines from which to create
transactions and specify some of the attributes, including accounting options, of the created
transactions.
Create a rule by entering:
• Name
• Legal Entity: When the legal entity is assigned, the Cash and Offset Accounts appear
under the Accounting check box.
• Statement Line Identification criteria: The criteria are used to identify the statement lines
from which to create transactions. This includes:
- Type: The same Transaction types as used on Transaction Codes.
- Transaction Code: You need to create a transaction code for each type of external
transaction expected.

• Transaction Details:
- Type: The same Transaction types as used on Transaction Codes.
- Business Unit
- Cash Account
- Offset Account

Practice 17-2 Overview: Managing Bank Statement
Transaction Creation Rule
• Creating a transaction creation rule for a bank fee.
• Assigning the appropriate general ledger accounts.

Bank Statement Reconciliation Setups
For Reconciliation, assign the following:

• Reconciliation Tolerance Rules
• Matching Rules
• Automatic Reconciliation Rule Sets
Bank Statement Reconciliation is the process of matching bank statement lines with
transactions to ensure that all bank account activity is recorded within the application. You
can manually match the statement lines and transactions or set up reconciliation rules to be
performed automatically.
Following are the key setups for bank statement reconciliation:
• Matching Rules: Flexible matching rules determine how to match Bank Statement Lines
and system transactions.
• Tolerance Rules: Tolerance rules include date, amount and percentage options. Manual
reconciliation can have a tolerance rule assigned to a bank account. Automatic
reconciliation can have a tolerance rule applied if the matching rule matches on the
date, amount or both.
• Matching Set Rule: Bank statement reconciliation rule sets are a group of matching rules
and tolerance rules. They are assigned to a bank account and used to reconcile bank
statement lines with transactions.

Bank Statement Reconciliation Matching Rules
Matching rules enable you to determine how to match bank

statement lines and application transactions, and help to achieve
a higher match rate in Autoreconciliation, minimizing the need for
manual intervention.
You can select a Match Type of:
• One to One
• One to Many
• Many to One
• Many to Many
Create, edit, copy, and delete matching rules to be used for reconciliation. For each rule,
specify:
• Matching Rule name.
• Transaction source or sources.
• Match Type:
- One to one: Match one bank statement line to one system transaction.
- One to many: Match one bank statement line to many system transactions in
summary.
- Many to one: Match many bank statement lines in summary to one system
transaction
- Many to many: Bank statement lines that do not match up with any system
transactions except for in aggregate.
• Group by attributes for bank statement or source depending upon match type.
• Matching Criteria: Includes a list of commonly used matching attributes. You can simply
check the attributes to include in their matching rule. Only group by and amount fields
are available for matching if grouping is used.

Additional Matching Criteria: Enables you to specify additional matching logic or filtering
conditions that must be true for the bank statement line or lines and transaction or
transactions to be matched successfully. Only group by and amount fields are available for
matching if grouping is used. You can select one or multiple transaction sources in a rule.
Matching Type Considerations:
• If multiple sources are selected in a one to one or many to one matching rule, then the
autoreconciliation program looks for a matching transaction across the selected sources.
• If multiple sources are selected in a one to many or many to many matching rule, then
the program first finds all available transactions across the selected sources and then
applies grouping rules to the whole data pool. This means that statement lines can be
reconciled to a group that includes transactions across the different sources.
• If you want transactions included in a group to be from the same transaction source,
then you can specify Transaction Source as a grouping attribute.

Matching Rules
• Creating a bank statement matching rule.

Bank Statement Reconciliation Tolerance Rules
Tolerance rules enable you to specify date, amount, and

percentage tolerances that prevent or warn you when
reconciliation would be a breach of a defined tolerance.
Before creating reconciliation tolerance rules, consider the following guidelines:

• Amount tolerances are most often used when you are reconciling foreign currency
transactions where differences may exist due to rounding or fluctuations in the exchange
rate. They can also be used if a bank includes a processing fee in the bank statement
line amount.
• Date tolerances are primarily used for checks that may be issued on one day and do not
clear the bank until days or weeks later. By applying tolerances you can automate the
reconciliation and accounting for these types of transactions.
• If no date or amount tolerance is defined within a rule, the date or amount tolerance
requires an exact match.
• For manual reconciliation, a tolerance rule can optionally be assigned to a bank
account.
• For automatic reconciliation, a tolerance rule can be associated with a matching rule in
the Rule Set setup and can be applied if the matching rule matches on date and amount
or both.
• The one exception occurs when you assign a tolerance rule that includes amount
tolerances to a match type matching rule that is not a one to one match. In this match
type matching rule that is not a one to one match, the amount tolerance is ignored and
amounts must match exactly.
Creating Reconciliation Tolerance Rules
Tolerance rules include:

• Date Tolerance
• Amount Tolerance
• Percentage options
Date Tolerance:
• Reconciliation date tolerances are defined as day ranges. The date tolerances are to
validate that the source transaction date or dates are within a certain number of days
before and after the bank statement line date or dates.
• In manual reconciliation, if a date tolerance is specified in the tolerance rule assigned to
the bank account, it applies to all matching scenarios. If a date tolerance breach occurs,
a warning message appears, but the user can reconcile the statement line or lines and
the transaction or transactions.
• If no date tolerance is assigned or specified, an exact date match is required and a
warning message appears.
• In automatic reconciliation, a tolerance rule that includes date tolerances can be
associated with a matching rule. If the matching rule matches the date, then the date
tolerance is applied. In this scenario a date tolerance breach prevents reconciliation.

Amount Tolerance:
• Reconciliation amount tolerances can be used only in one-to-one matching scenarios for
both manual and automatic reconciliation. No reconciliation amount tolerances are
allowed in one-to-many, many-to-one, or many-to-many matching scenarios. In these
scenarios, the amount of the bank statement line or lines must equal the amount of the
transaction or transactions. Reconciliation amount tolerances can be defined as
percentage or amount ranges or both.
• If both percentages and amounts are applied, the application uses the most
conservative tolerance depending upon the statement line amount. For example, if the
amount tolerance equals plus or minus $5, the percentage tolerance equals plus or
minus 1%, and the statement line amount is $100, the application first calculates the
percentage amount (1% of $100 dollars = $1). It then compares this to the $5 amount
and uses the smaller amount. In this case it is $1 dollar, so to reconcile a transaction to
this line it must be between $99 and $101.
Exception:
• In automatic reconciliation, a tolerance rule that includes percentage, amount, or both,
tolerance ranges can be associated with a matching rule. But remember, it can be
applied only if the matching rule is a one-to-one match type rule.
• In this scenario of a one-to-one type match for both manual and autoreconciliation, any
amount difference within tolerance is automatically created as an external transaction in
Cash Management.

Tolerance Rules
• Creating a bank statement tolerance rule.

Reconciliation Rule Sets
• Bank statement reconciliation rule sets are a group of

matching rules and tolerance rules.
• They are assigned to a bank account and used to reconcile
bank statement lines with transactions.
When creating reconciliation rules sets, provide the following information:

• Enter the name of the rule set.
• Provide a detailed description.
• Accept the default for sequence 1.
• Enter a matching rule. Accept the default matching type, which is based on the matching
rule.
• Optionally enter a tolerance rule.
You build the rule set and the rule set detail as a parent/child relationship. Each rule set
consists of one or more matching rules that can be prioritized or sequenced. The rules should
be ordered to achieve a greater reconciliation success rate.
Oracle strongly recommends that one-to-one rules be sequenced above rules of other types.
To provide an optimum reconciliation rate, you should change the sequence number
depending on how accurately the given rule is likely to reconcile against the correct bank
transactions.
For example, transactions from sources for which the bank provides you a reference ID are
likely to have a higher reconciliation rate. These rules should be placed at the top with a lower
sequence number. Conversely, transactions with no reference ID are likely to have duplicates
or lower reconciliation rates, and you should place them at the bottom with a higher sequence
number.
Practice 17-5 Overview: Managing Reconciliation Rule
Sets
• Creating a rule set to combine the matching and tolerance
rule.

Practice 17-6 Overview: Assigning a Rule Set to a Bank
Account
• Assigning the rule set to your bank account.

Defining Subledger Accounting Rules: Cash
Management Accounting Event Model
Oracle Fusion Cash Management provides a predefined
accounting event class and accounting event types.
Event Class Event Type Accounting

External Transaction Reconciled Yes
External Transactions
External Transaction Unreconciled Yes
You can customize predefined accounting rule setups for accounting-enabled events by
creating custom rules.

Performing Bank Statement Reconciliation
There are two ways to perform a Bank Statement Reconciliation:

• Manual
• Automatic
Bank Statement Reconciliation is the process of matching bank statement lines with
transactions to ensure that all bank account activity is recorded within the application.
There are two ways to perform bank statement reconciliation:
• Manual: Through the user interface, match the statement lines and transactions. This is
useful for exceptions to the autmatic process
• Automatic: After the bank statement has been loaded, submit the Autoreconciliation
process.
Once Autoreconciliation has completed any exceptions are visible from the user interface.
Automatic reconciliation exceptions are bank statement lines and system transactions that
remain unreconciled and unmatched.
For each unreconciled statement line the application tries to provide a list of possible
transaction matches. Matching exceptions that are ambiguous (more than one matching
statement line per system transaction) and matches, for which there are date and amount
tolerance violations are identified are considered possible matches. If any possible matches
have been identified they are presented to the user in the exceptions UI. Review the bank
statement line and the appropriate matching system transaction, select, and reconcile.

After all exceptions are reconciled, run the Generate Cash Transactions process to created
the external cash transactions.
You can also view the status the reconciled payments in Payables.

Practice 17-7 Overview: Performing a Bank Statement
Reconciliation with Autoreconciliation.
• Creating a Bank Statement.
• Submitting Autoreconciliation.
• Generating a Cash Transaction for Bank Charges.
• Viewing the reconciled payment in Payables.

Reporting and analysis
The Four Key Reports in Cash Management are:

• Cash to General Ledger Reconciliation Report
• Bank Statement Report
• Cash in Transit Report
• Bank Statement Analysis Report
Reporting and Analysis

• Cash to General Ledger Reconciliation Report: Lists the subledger transactions that are
accounted in GL but are not reconciled in Cash Management.
• Bank Statement Report: Displays bank account balances and transaction information for
specific bank statements.
• Cash in Transit Report: Lists, for a specific bank account, all transactions that have been
remitted to the bank but have not been cleared. This report excludes all voided
transactions. It also excludes all reversed transactions that have a reversal date on or
before the effective date.
• Bank Statement Analysis Report: Displays bank statements used to analyze balances
and transaction details.

Cash Management Dashboard
The Cash Management Dashboard is infolet based and provides

access to the relevant pages and functions where you can
address highlighted issues.
As a cash manager, you can now view a concise snapshot of your cash position, cash
forecast, missing bank statements, and bank statement reconciliation status on the infolets-
based Cash Management Dashboard.

Cash Management Infolets
Infolet Name Description Icon

Cash Balance Provides visibility into overall cash
balance across all of your accounts.
Missing Shows the number of bank accounts that

Statements are missing a bank statement
At Risk Shows bank accounts which fail to meet

their target balance.
Use infolets to view information at a glance from different sources in an efficient and timely
way directly from the Welcome Springboard. You have the right information instead of just
more data to sift through.
Mobile device support is available to take your work on the go enabling you to see real time
information. Three Infolets are provided for Cash Management:
• Cash Balance - gives you visibility into your overall cash balance across all of your
accounts. The currency in which the amount displayed is configurable and is indicated
by the symbol. All the balances used on the infolets are the last known balances
reported on the bank statements, where the last known balance is the balance code
defined on the setup page.
• Missing Statements - The Missing Statements infolet shows the number of bank
accounts that are missing a bank statement. A bank account is included in the count on
this infolet when the difference between the last known bank statement date and the
current date is more than the threshold specified on the setup page.

• At Risk - You can set a target balance for each bank account to indicate the desired
minimum balance to maintain for the account. Bank accounts which fail to meet their
target balance are highlighted on the At Risk infolet. The expanded view shows the top
five bank accounts in descending order of variance highlighting the accounts which are
most at risk. The blue portion of a bar on the graph represents the current balance and
the red portion represents the deficit for the bank account. The currency used on the
graph is the reporting currency specified on the setup page.
You can drill down from any of the infolets to the Cash Balances page where you can initiate
transactions to address any issues you notice. For more information about Cash Management
Infolets, refer to the Oracle Financials Cloud: What’s New in Release 11.

Cash Positioning and Forecasting – Cash Balances
On the Cash Balances landing page you can:

• See an overview of all your bank accounts.
• View highlighted bank accounts without up to date statements.
• Filter bank accounts on currency, bank, legal entity, and so
on.
On the Cash Balances landing page you can review your bank accounts balances, cash
projections, forecasts, and create transactions in the Cash Balances work area.
The Cash Balances landing page provides an overview of your bank accounts and you can
also review the variance of the bank account balance compared to the target balance. Any
bank accounts not having up to date statements are highlighted. You may filter the bank
accounts displayed based on currency, bank, legal entity, last bank statement date, or
balance ranges.
Any combination of filters used can be saved and are available on the Bank Account Group
choice list for querying at a later date.

Cash Position Page
• Shows the cash position for your bank accounts.

• Use various data to determine projections.
You can view the cash position for your bank accounts for the current date on the Cash
Position page. The projections on this page take into account:
• Intraday statement data
• External cash Transactions
• Manual transactions.

5 Day Forecast Page
You can use the information and data on the 5 day Forecast page
to assess the 5 day forecast for your legal entities.
This data helps you to manage liquid assets in the short term.
You can assess the 5-day cash forecast for your legal entities based on the bank statement
balances and transactions entered in Cash Management, Payables, Payroll, and
Receivables.
Based on the projected excesses or shortfalls in cash holdings, you can then plan short term
liquidity management activities such as cash transfers or payments.

Transactions Cube
The Cash Balances work area uses a multidimensional database

(Transactions cube) to analyze:
• Bank account balances
• Bank statement lines
• Transactions affecting your cash positions
Cash Management Transaction Cube in Smart View
Ready to use dimensions include Bank, Legal Entity, Business Unit, Currency, Currency
Type, Source of the Transaction, Reconciliation Status of the transaction, and Flow indicator
for the bank statement line.
The Transactions cube can re-use any existing Accounting calendars on the Time dimension
reducing the setup required.
For more complex analytics requirements, you can add new dimensions to the cube at any
time.
Using the flexible setup pages and cube maintenance processes you can:
• Delete the existing cube
• Add dimensions
• Extract data
• Recreate the cube
The cube maintenance processes also perform automatic updates when new bank
statements are loaded or external transactions created.
In the Transactions cube, you can perform ad hoc analysis in a spreadsheet using Oracle
Hyperion Smart View (Smart View).
Note: You can add new dimensions but you cannot delete seeded dimensions.

Ready to Use Smart View Templates
• Review cash position for multiple bank accounts.

• Forecast short term cash projections for a bank account.
Ready to Use Smart View Template Report
To seamlessly investigate the source of the balances displayed on the reports:

• Drill down to a page displaying the corresponding transactions.
You can exclude any of the transactions from your cash position on this page.
Manual Transactions
You can create Manual Transactions to quickly adjust cash projections by adding inflows or
outflows for transactions which are not available within the application. These transactions are
saved to another multidimensional database (Manual cube) you can view them at any time
using Smart View.

Manual Transactions
• Adjust cash projections quickly.

• Save transactions to a Manual cube.
• View at any time with Smart View.
You can create Manual Transactions to quickly adjust cash projections by adding inflows or
outflows for transactions which are not available within the application. These transactions are
saved in a multidimensional database (Manual cube) and you can view the transactions at
any time using Smart View.
Note: Manual transactions are used only for reporting purposes and have no accounting
impact.

Bank Account Transfers
Transfer funds between your bank accounts to:

• Maintain target balances.
• Meet financial obligations without overdraft.
• Deploy excess funds.
Bank Account Transfers generate External Cash Transactions for the:

• Provider bank account.
• Receiver bank account.
These transactions generate the accounting entries when reconciled with bank statement
lines.
The transactions leverage the balancing rules provided by Oracle Fusion Intercompany to
generate the accounting distributions for both the sender and receiver bank accounts.
You can seamlessly process the transfer using the Payment Methods defined in Oracle
Fusion Payables setup pages. You can configure flexible approval rules to authorize the
transfers in Oracle BPM Worklist.
Enabling Bank Account Transfer
To enable the Bank Account Transfer:
• Assign the duty role Cash Positioning and Forecasting Management Duty.
• Bank Account Transfer Guidelines

Bank Account Transfer Guidelines
Depending on the legal entities associated with the bank accounts, you can generate
accounting distributions using either the Intercompany Balancing Rules or the
Secondary/Clearing Company Balancing rules.
You must configure rules for either of these type of setups:
• For transfers between bank accounts belonging to the same legal entity.
• Between bank accounts belonging to different legal entities.
To distinguish your Cash Management balancing rules from others, Oracle recommends
setting up intercompany balancing rules with:
• Source as Cash Management.
• Category as Bank Account Transfer.
Bank Account Transfers which are settled through Payments are always routed for approval
and you must configure at least one approval rule for such transactions.
Additional configuration for Cash Management is available on Payment Methods and
Payment Method Defaulting setup pages. Only electronic payments are supported in Release
11.
For additional information, refer to Bank Transfers and Ad Hoc Payments in Oracle Cash
Management TOI.

Ad Hoc Payments
• Address low-volume payments not associated with an invoice

or purchase order.
• Use Payment Methods and options defined in Oracle Fusion
Payables setup pages.
You can create and maintain payees who receive the payment without having to setup a
supplier. You can also define flexible approval rules to authorize these transactions in Oracle
BPM Worklist.
External cash transaction generated for the Ad Hoc payment generates the required
accounting when reconciled.
To enable and create Ad Hoc payments:
• Assign the duty role Cash Positioning and Forecasting Management Duty.
Guidelines
Ad Hoc Payments settled through Payments are always routed for approval and you must
configure at least one approval rule for these transactions.
Additional configuration for Cash Management is available on the setup pages related to
Payment Methods and Payment Method Defaulting.
The initial release of Ad Hoc Payments supports only electronic payment methods.
For additional information, refer to Bank Transfers and Ad Hoc Payments in Oracle Cash
Management TOI.

Setup Options in Payments
In the Payments setup options you can:

• Configure the setup options for payments for cash
transactions.
• Specify whether you want to use a particular Payment Method
for a certain type of cash transaction.
• Configure the Payment Method Defaulting Rules for cash
transactions.
When creating new users, assign the Payment duty role Payments Disbursement
Administration Duty to create setup options for payments.
The Cash Manager job role already has the Payments Disbursement Administration Duty role
assigned.

Intraday Bank Statement Support
Use Intraday Bank activity to provide real time cash flow

information on your cash position pages and reports.
Bank statement processing programs can now:

• Handle intraday statement loads.
• Provide native support for these formats:
- ISO20022 CAMT052 V2
- SWIFT MT942, BAI2
- EDIFACT FINSTA
In the Intraday Bank Statement you can:
• Upload either incremental or cumulative intraday statements.
• Create intraday statements manually.
• Use intraday statement search.
Enabling Intraday Bank Statements
If you can currently create intraday statements you also have the required duty and privilege
to create intraday statements.
When creating new users, assign the duty role Bank Statement and Reconciliation Duty to
perform intraday bank statement processing.
Note: You cannot load or create an intraday bank statement on a date which already has an
existing prior bank statement.
For additional information, refer to the Cash Positioning and Forecasting TOI.
External Cash Transactions Attachments
When you create External Cash Transactions you can:

• Attach multiple documents to provide additional context or
reference information.
• Add or delete attachments for unreconciled external
transactions.
Note: You cannot add or delete attachments on reconciled or voided External Cash
Transactions.
Enabling External Cash Transactions
If you can currently create external cash transactions you can also upload attachments to
external cash transactions.
When creating new users, assign the duty role Bank Statement and Reconciliation Duty to
create External Cash Transactions.
For additional information, refer to the Cash Positioning and Forecasting TOI.

Summary

• Understand the key features of Cash Management.
• Define banks, branches, and accounts using the Rapid
Implementation process.
• Configure Bank Statement Processing and Reconciliation.
• Perform Automatic Reconciliation.
• Describe the New Features for R11.

18
Advanced Collections

Objectives

• Set up and maintain Collections.
• Define aging methods.
• Create collectors.
• Configure dunning.
• Define Collections preferences.
• Manage strategy tasks and strategies.
• Manage scoring data points and formulas.
• Configure notes.
• Describe Advanced Collections Matrix

Advanced Collections Overview
Oracle Fusion Advanced Collections provides a streamlined and user-friendly user interface
for collections professionals to easily identify delinquent customers and manage collections
activities for which they are responsible.
Collectors can navigate easily from the Collections work area to the Customer work area
where the focus is on collecting for specific delinquent customers. The information provided
enables collectors to treat each customer uniquely. In turn, this helps improve customer
relations that can directly relate to higher collectability and a lower Days Sales Outstanding
(DSO).
Real-time tools facilitate the tasks of managing assigned work, sending dunning
correspondence, taking a payment, and processing a dispute and an adjustment. This
simplifies the collector's job and promotes restoring the customer back into good standing.
Managers can schedule background processes to refresh the Collections work area data,
automatically identify delinquent bills, update customer transactional data, and send dunning
letters to customers.

Implementation Considerations
Collection Preferences and Methods:

• Difference between Global and Preferences settings.
• Configure to meet business requirements.
• Select one type of collections method.
– Strategy
– Dunning
The two required setup sections are:

• Global Preferences: Are not business unit specific and they impact the entire Collections
system, such as the display of closed or open transactions and settings of date range
parameters.
• Preferences: Can be unique for a specific business unit. Preferences impact default
settings such as what method to send notifications.
Points to Consider:
• Review and verify your enterprise structure prior to configuring Collections.
• Determine the number of employees to define as collectors and how they are going to
be assigned.
• Verify that all integrating applications such as Oracle Fusion Receivables, Oracle Fusion
Payments, Oracle Fusion Human Capital Management, and Oracle BI Publisher have
been configured and are functional.
• Define the collections method for each business unit set. Select either strategies or
dunning plans as the method to manage your delinquencies.

Dunning Configuration:
• Review for aged and staged dunning
• Customize letters to reflect business need
• Review the letter severity for each aging bucket
• Define details of the aging bucket prior to enabling dunning
Customize the dunning letters and assign the appropriate aging buckets accordingly. If
changes are needed in the Aging Method Detail, you must delete the last row first and move
up. The delete icon is enabled only when you are on the last record. This prevents you from
deleting rows in the middle of the sequence.
If your Dunning process ends in error, verify that:
• The Business Intelligence Publisher (BIP) server has been set properly.
• The customer information under the Profile tab is accurate and up-to-date.
• A customer contact has been configured.
If the Dunning process ends successfully, but no dunning letter is sent, verify that:
• Minimum dunning amount is set properly. (This is the total amount set for all overdue
transactions to have correspondence generated.)
• Minimum dunning invoice amount is set properly. (This is the amount set for an overdue
transaction to have correspondence generated.)
• Customers are set up properly. (Run the Validation Dunning Setup Report for customer
dunning setup.)

Collections Dashboard Data:

• Collectors must be employees.
• Collectors can be assigned to customers.
• Submit scheduled processes regularly.
To display delinquent customers on the Collections Dashboard, verify that the following:
• The collector has been hired as an employee in HCM and set up as a collector.
• The collector has been assigned to the customer or customers.
• The customer contact information is up-to-date.
Submit the following scheduled processes in the order listed:
• Refresh Receivables Transactional Events for Summary Tables.
• Determine Delinquency Using Scoring.
• Update Collections Summary Data in data mode.

Manage Scoring and Strategies:

• Review the delivered scoring formulas.
• Create data points, and then new formulas.
• Review delivered strategies and modify accordingly.
• Run scheduled process to score customers and assign
strategy to collect from them.
Formulas
Collections delivers formulas in which a higher score indicates a better chance of collectability
and a lower score indicates a lower chance of collectability.
You can configure formulas in which higher scores result in lower chance of collectability and
lower scores a higher chance of collectability.
Scoring formulas are created with data points. To create a new scoring formula, you must first
define data points.
Data points are weighted to determine scoring and are either a select statement or a
database function. You must have PL/SQL knowledge to create both types. Assemble your
data points into a scoring formula in which the weighted total equals 1.0.
Oracle recommends that you test your data points and formulas in a test environment before
creating them in your production environment.
Note: Creating and editing data points is not available in the Cloud.

Strategies
Strategies are a series of work items a collector performs after the customer has been scored.
Consider using the delivered strategies Collections provides prior to creating or modifying a
strategy. After the strategies have been defined, run the following scheduled process in the
order listed:
• Score collections customers by running the Collections Scoring concurrent program.
• Aggregate customer data by running the Update Collections Summary Data concurrent
program.
• Run the Strategy Management concurrent program to create a strategy for each
delinquent customer.

Data Points and Formulas: Example
Data Points Weighted Past Due 30 Past Due 31+ Data

Value Data Point Point Mapping
Mapping
Number of .5 1-20 21+
Delinquencies
Number of 80 20
Delinquencies Score
Amount Over Due .5 $1-100 $100 +
Amount Over Due 70 30
Score
Formula Results
Number of Delinquencies Score X .5 + Amount Over Due Score X .5 = Customer

Score
Data points are used in formulas to calculate a score given to customers. The score
generated for each customer enables the application to apply a strategy to the customer.
Advanced Collections delivers a set configured data points designed to give customers with a
high score a better chance to collect and a lower score to customers who are at risk for
collecting on their past due transactions. The above example is used to convey the concept of
data points but does not give an accurate measure of collectability from the customer.
The table above illustrates 2 very simple data points and provides the formula results based
on them. The 2 data points are weighted equally at .5, the weighted total must equal 1.0. The
Past Due 30 and the Past Due 31+ are the mappings defined in the data points. Customers
having 1-20 over due transactions are given a score of 80 and customer having 21 or more
past due transactions are given a score of 20. This makes up half of the scoring formula. The
overdue amount makes up the other half of the scoring formula. Customers owing less than
$100 are given the score of 70 and those owing more than $100 are given the score of 30.

Result Examples:
• A customer having 10 past due transactions but owing more than $100 is given the
score of 55: (10 past due score = 80/.5) 40 + 15 (>$100 amount due score = 30/.5) = 55
• A customer having 22 past due transactions but owing less than $100 is given the score
of 40: (22 past due score = 10/.5) 5 + 35 (<$100 amount due score = 70/.5) = 40

How Data Points, Scoring Formulas, and Strategies
Work Together
Strategy Range of Score Work Item 1 Work Item 2
Easy 50-100 Call Customer Reminder Letter
Difficult 1-49 Legal Action Escalate to Legal

Letter` Dept.
Two strategies are defined, each covering a range of scores, and with different tasks or work
items assigned to them:
• Easy Strategy covers the range of 50 to 100 with 2 work items:
- Call Customer
- Reminder Letter
• Difficult Strategy covers the range of scores from 1-49 with 2 work items:
- Legal Action Letter
- Escalate to Legal Dept.
Based on the scoring formula example:
• The customer with the score of 55 = Easy Strategy
• The customer with the score of 40 = Difficult Strategy
Oracle recommends you to use a combination of meaningful data points to determine scores
for your customers. Define strategies to cover the range of scores and have the application
apply them to customer accordingly.

Customer Data and Notes:

• Review and verify Receivables settings for transactions.
• Set aging attributes for open credits and receipts at risk.
• Only transactions posted to GL are included in the open
balance.
• Note that the mapping type that is available is Customer
Account.
Check the following if transaction data is excluded:

• The date range displayed, it may need to be expanded.
• If the current and closed transactions are included.
• The transactions have been posted in the general ledger.
• The Receivables transaction type on those transactions is set for Open Receivables.
Although there are four different business objects available to which to map the notes, the
Customer Account business object is the only mapping type currently available.

Related Fusion Applications Requirements
• Oracle Fusion Human Capital

• Oracle Fusion Common Application Configuration for
Financials
• Oracle Fusion Common Financials Configuration
• Oracle Fusion General Ledger
• Oracle Fusion Receivables
• Oracle Fusion Payments
Oracle Fusion Human Capital Management: Required to create employees, jobs, and roles.
These must be created and configured before you start a Financials implementation project.
Oracle Fusion Common Application Configuration for Financials: Used to create the
enterprise model, such as legal entities and business units.
Oracle Fusion Common Financials Configuration: Used to define transaction taxes, such as
tax regimes and authorities.
Oracle Fusion General Ledger: Used to configure the financial structures, such as the Chart
of Accounts.
Oracle Fusion Receivables: Used to configure transaction types, receipts, payment methods,
and adjustment approval limits.
Oracle Fusion Payments*: Used to configure funds capture settings to support payment
processing.
Currently Credit Card processing for Cloud customers is not available at this time.

Practice 18-1 Overview: Guided Tour of Advanced
Collections Demonstration
This Demonstration covers the following topics:
Collections Customer Work Area:
• Aging method
• Collectors
• Collection Preferences
• Business Level from the tasks list
• Tabs
Collections Dashboard:
• Activities
• Customer Search
• Process Monitor

Aging Methods Overview
• Aging methods are periods of time used to group receivables,

debit, and credit items to achieve an understanding of a
customer's delinquency profile.
• Grouping transactions by buckets of time creates an aging
view of the customer.
• Oracle Fusion Advanced Collections groups overdue debt by
time and assigns work based on buckets of debt items. For
example, aging categorizes receivables into buckets such as
current, 30 days, 60 days, 90 days, and 120 days and over.
Aging is the concept of calculating a customer's past due and current transactions.
• Aging shows the amounts owed to the company by its customers and includes the
length of time the amounts have been outstanding.
• Aging is a view of transaction or receivables data that helps a collector understand the
overdue amounts viewed over time. This helps the collector prioritize which transactions
to focus their collection efforts.
The Aging Method Set controls access to data and is defined in the Setup Manager under the
Common Applications Configuration for Financials task list.
Aging Methods are used during the creation of aged dunning plans. Collections delivers 4
predefined aging methods:
• 4-Bucket Aging
• 5-Bucket Aging
• 7-Bucket Aging
• Statement
You can create new aging methods based on company requirements. You cannot modify
these delivered aging methods. However, you can copy any delivered aging method and the
application renames it with the prefix Copy which enables you to modify the copied aging
method.

Creating Aging Methods
The Manage Aging Methods page consists of two sections:

• Aging Methods
• Aging Method Details
The Aging Method’s two sections are:

• Aging Methods: Where you name, select the type, enable, assign the set, and provide a
description of the method.
• Aging Method Details: Where you order your sequence and bucket type, set your day
ranges, and provide your display information for reporting.
The following validation rules are in place when creating or modifying an aging method:
• A bucket must contain at least 2 bucket lines and at most 7 lines.
• A bucket must have Aging Days From less than Aging Days To.
• All buckets must cover the range from -9999 to 9999 and there is no way to update a
field with the value of -9999 or 9999. The first bucket must have Aging Days From = -
9999 and the last bucket must have Aging Days To = 9999
• Aging buckets cannot have any gaps between -9999 to 9999.

Practice 14-2 Overview: Creating an Aging Method

• Create a 7 Bucket Aging Method.
• Review the delivered Aging Methods.
• Review the copy and edit process for changing existing Aging
Methods.

Collectors Overview
• Are individuals or a group of individuals assigned to a

customer to conduct various collections work.
• Need to be created as employees in Oracle Fusion Human
Capital Management (HCM) before you create them in
Collections.
• Can optionally be created as a resource in Oracle Fusion
Customer Relationship Management (CRM) applications to
create tasks under the Activities tab.
Points to consider when setting up individuals as collectors:

• A collector can individually be assigned to one or more customers.
• Evaluate what are the most appropriate collection needs for your organizations.
• Collectors can be assigned at the customer, account, or site level.
• Determine the business level at which your organization normally collects from
customers.
• Research how your organization divides the work and tasks among collectors. Tasks
include sending correspondence, reviewing customer history, and collecting payment
from customers.
• Collections organization structures can be created in several ways based on the number
of customers. For example, you can group customers according to size, small to large,
or divide customers regionally or by the monetary volume you do with a customer.
• For workload balancing and performance purposes, consider how many collectors are
assigned to customers.
• A collector must also have the Collections Agent role.

Creating Collectors
Include the following to set up collectors:

• Name
• Type
• Employee or Group Name.
• Enable
• Collector Set
The setup of collectors determines the work assignment on the Collections Dashboard.
Collectors can be assigned to customers on the Profile History tab of the customer workspace
or on Profile Classes. The following is need to set up collectors:
• Collector Name: Determines the collector name used in the closure section of a dunning
correspondence. You can use either a real name or an alias.
• Type: Employee. You must create individuals as employees before you can set them up
as users, resources, or collectors.
• Employee Assignment: The name of the employee.
• Enable: Yes or no. To terminate or Disable a collector, select No and enter an inactive
date as the termination date.
• Collector Set: The reference data set assigned for security purposes.

Practice 18-3 Overview: Creating a Collector
This practice covers the following:

• Creating yourself as a collector.
• Reviewing the Profile tab where collectors are assigned.

Manage Dunning Configurations
Dunning is the business practice of advising delinquent

customers about their overdue payments, usually through
correspondence of print, fax, or e-mail.
Dunning configurations include:
• Dunning Address
• Dunning Notice
• Dunning Template
• Dunning Contact
• Dunning Method
• Business Intelligence Publisher (BIP)
Dunning targets collections correspondence to the right customer contact at the right time.
Dunning notices are sent to contacts at the bill-to sites.
• Dunning Address: The customer address where the dunning notice is sent. The notice
can be sent to the customer, account, or bill-to site level.
• Dunning Notice: The correspondence sent to a delinquent customer notifying them of
one or more overdue payments.
• Dunning Template: A form letter or series of form letters escalating the need to pay.
Oracle predefines two.
• Dunning Contact: The name of the individual who is contacted during the Dunning
process. The default is the Account Payables manager.
• Dunning Method: The correspondence method of print, fax, or e-mail for sending
Dunning notices.
• Business Intelligence Publisher (BIP): The technology used to create dunning letters
and generate reports for dunning correspondence.

Creating Dunning Configurations
• Create new Dunning Configurations if the delivered

configurations do not meet your business needs.
• Both Aged and Staged dunning are supported.
• Attach Dunning Letter Templates.
Creating Dunning Configurations includes:

Type:
• Aged Dunning Type: Aged dunning methods are based on the oldest aged transaction.
- Delinquent transactions are identified automatically when the Delinquency
Identification concurrent process is run.
- As the oldest aged transaction moves into the next aging bucket, the content of the
dunning letter can change.
• Staged Dunning Type: Staged dunning is based on the number of days since the last
dunning letter was sent, rather than the number of days transactions are past due.
- Delinquent transactions are identified automatically when the Delinquency
Identification concurrent process is run.
- Staged dunning letters are sent at delayed intervals defined in the Dunning
Configuration process. These intervals control the timing of each letter.
• Name and Description.
• Data set: Can be configured by one business unit or multiple business units.

• Whether to include:
- Current Invoices
- Disputed Invoices
- Credit Memos.
• Enable: Yes or No.
• Dunning Configuration Detail: Displays the dunning letter templates used for a specific
dunning configuration.

Predefined Dunning Templates
Use the Send Dunning Letter process to perform and send

correspondence.
Dunning letter templates are stored in the Business Intelligence
Publisher (BIP) server.
Collections predefines four dunning letter templates.
Predefined dunning letter templates are available, or the deploying company can create their
own dunning notice templates.
The templates are associated with aging buckets or stages in the dunning configuration
process.
Oracle recommends that you use the copy feature to edit a predefined dunning template. This
feature automatically prefixes the name with the word Copy. You can then use the Edit icon to
make the appropriate changes.
Dunning also supports the ability to create different dunning configurations for different
reference data sets, depending on operational and business requirements.
A single consolidated letter can be sent to eliminate sending multiple aged dunning letters to
the same customer who has more than one delinquent transaction.
The four predefined templates are:
• Soft Dunning Letter
• Medium Dunning Letter
• Hard Dunning Letter
• Final Demand Letter

Practice 18-4 Overview: Reviewing Dunning Templates
Demonstration
This demonstration covers the following:
• Copying the predefined report .
• Viewing the four predefined templates.
• Modifying a template.
• Uploading a template.

Manage Collections Preferences
Manage Collection Preferences consists of three sections:

• Global Preferences
• Preferences
• Correspondence
This is a required setup.

• Global preferences: The are not business unit specific, and they affect the Collections
Customer work area, such as the display of closed or open transactions and the setting
of date range parameters.
• Preferences: These configurations are applied to a specific preference set. Preferences
impact the default settings, such as default method to send notifications, collections
business levels, aging, and exchange rate.
• Correspondence: Configurations for contact-specific data sets. If no other data sets are
set up, these values come from the Common Set.

Global Preferences
Navigate to: Setup and Maintenance > select the Financials offering > Setup > Collections >
Manage Collections Preferences.
Selections made in the Global Preferences section define:
• Default transaction class that appears in the Collections work area.
• Display of closed transactions that appears on the Transactions tab in the Collections
work area.
• Display of current transactions that appears on the Transactions tab in the Collections
work area.
• Number of days for prior and future transactions that appears on the Transactions tab in
the Collections work area.
• Maximum number of days to reschedule work that appears on the Collections
Dashboard.
• Default aging method that appears on the Collections Aging tab.
• Delimiter used to separate data that appears on the Collections Dashboard.
• The number of characters required to do a search (using fewer than three impacts
performance).
• Return e-mail address for dunning correspondence.

Complete these steps in the Global Preferences section:
• Enter the number of grace days before a promise is considered broken.
• Enter the maximum number of day for a promised due date.
• Enable bankruptcy.

Preferences
Selections made in the Preference region define the following:
• Preferences applied to a specific preference set.
• Collection Business Level. Three business levels—customer, account, and bill-to—
determine how collectors see their assigned work on the Collections Dashboard, how
collectors manage their customers, and the content of dunning letters.
• Open credit aging default on the Aging tab.
• Exchange rate for currency conversion.
• Default dunning send method.
• Default dunning contact name.
You can use the pre configured Collections Preferences for initial proof of concept,
conference room pilots or other pre-production projects to quickly get the system up and
running.

Manage Collections Preferences
• Define the Collections Preference Set
• Indicate whether a dispute notice is sent
- If a dispute notice is sent, what letter template is used
• Indicate whether a payment notice is sent
- If a payment notice is sent, what letter template is used
• Indicate whether a promise notice is sent
- If a promise notice is sent, what letter template is used

Manage Collections Methods
Determine the method to be used for collections:

• Strategies
• Dunning
Select one or the other, not both. If you select Strategies, you can
create a strategy task to send dunning letters.
This is a required setup. Set the collections methods for each business unit to either
Strategies or Dunning. Selecting Strategies requires you to create:
• Scoring formulas with multiple data points; weight totals must = 1.
• Scoring formulas to score customers and assign a strategy.
• Strategy tasks as either manual or automatic.
• Strategies by assigning the task or tasks you create to the strategy applied to a
delinquent customer.

Manage Collections Scoring Data Points
• Use delivered data points

• Create custom data points
• Used to score a customer and determine strategy
Scoring Data Points

• Each of these data points indicates how to score the number of days late (1-30 days,
31-60 days, and so on) for the customer and assigns a weight to each value. In this
case, the higher the delinquency rate (for example 91+ days) the more weight is
assigned to it. Custom data points can be created and added to the scoring formula.
Scoring Ranges
• Four scoring ranges exist for each assigned data point, and each range has a score
value assigned. For example, for transactions in the 1-30 day late bucket, a score of
100 is assigned to the earliest rate, lowest rate, or both and a score of 1 is assigned to
the latest or worst rate. The lower the score in the delivered ranges, the higher the
delinquency rate (that is, is bad).
• Data point ranges and weight are assigned when you create a formula.
Note: Scoring data points can be created only with On-Premises customers. Cloud customers
must file a service request to add or modify data points. The functionality is not available to
Cloud customers.

Manage Collections Scoring Formula
• Based on data points

• Total weight must =1
You can increase collections efficiency by assigning unique scores to customers based on a
specific company’s scoring requirements. You can use common data points and formulas
that are provided by the application or configure your own data points and formulas that are
specific to your industry when applying a score to your customers.
During your implementation, you determine how you look at your customer. This means
whether you collect on a customer, account, site, or individual transaction level and which
collectors to assign to those. Scoring and strategies operate and assign ownership of tasks at
this level.
Custom data points are created and added to the scoring formula. When you create your own
scoring formula, the total weight must total 1.
• Each data point must be mapped across the high and low range of the scoring formula.
• The values calculated by a data point are weighted.
• Test your scoring.

Manage Collections Strategy Tasks
• Manual
• Automated
• Grouped into strategies
• Assigned to the collector
• Used to increase efficiency and proactive follow-up
Each strategy is made up of one or more tasks. A task executed manually or automatically is
driven by a workflow. The workflow notifies the collector to perform a task or initiates the
automated process. Every task has an associated workflow.
Oracle Fusion Advanced Collections Strategy Management enables you to configure tasks
that are unique to your business and to group tasks into a strategy and apply that strategy to a
customer based on the customer's collection score. Create a task or tasks to assign to
strategies and include:
• Name: the name the task.
• Type and Category:
- Manual: A task to be completed by a collector or specialist. When you complete
the task it is closed from the queue. The categories for this type are Phone Call,
Personal Visit, or Review.
- Automated: The categories for this type are Send E-mail, Send Fax, or Send to
Printer.
• Correspondence Template: Attach a Dunning template.

• Wait for: Determine and enter the wait times for:
- How Long Will the Strategy Wait Until It Executes Task in either UOM of Day,
Hour, Minute, Month, Week, or Year.
- How Long Will the Strategy Wait After It Executes Task in either UOM of Day,
Hour, Minute, Month, Week, or Year.
• Optional
• Escalate the task

Practice 18-5 Overview: Creating a Strategy Task

• Assigning a Manual task.
• Assigning an Automatic task.
• Executing and timing of task is driven by workflow.

Manage Collections Strategies
• Determined by the collection method

• Assigned at the business level
• Based on scoring
Strategies are a series of manual or automated tasks linked together in the order they are to
be executed.
• Strategies can be more effectively used than dunning plans by allowing both automated
and manual tasks to be combined into a strategy. Managers can define strategies to
different collection situations and categories of customers at one of the following levels:
- Customer
- Account
- Bill-to site
• Scoring contains criteria used to analyze customers and score them using data points.
Managers relate scoring to strategies.
Analysis
• If the Strategy Management program cannot find a strategy to match the exact score, it
uses the default Catch All strategy.

• If the delinquency score returned by the scoring engine is 35, then the selection module
in the program looks for strategies ranked 35, and if not found, looks for 34, then 33,
until a valid score if found. In this example, the program assigns the Hard Strategy to the
delinquent object.
• If the scoring engine cannot find a strategy to assign, the Catch All Strategy is applied.
The Catch All Strategy is a delivered strategy covering any gaps found by the scoring
engine.

Creating a Strategy
A strategy consists of the following:

• Create Strategy Template Group
• Customer Segment
• Strategies
• Tasks
Oracle recommends using the predefined strategies or copy and modify the provided sample
strategies.
A strategy consists of the following:
• Create Strategy Template Group: Used to define your general information about the
strategy
• Customer Segment: Identifies the grouping and unique attribute for this strategy
• Strategies: Lists the various stages and scores for your strategy
• Tasks: Lists the tasks in sequential order and defines the details for each

Practice 14-6 Overview: Creating a Strategy

• Creating a Strategy Template Group.
• Creating a Customer Segment.
• Creating a Strategy.
• Assigning Task either manual or automatic or both to a
strategy.
• Assigning Task - manual, automatic, or both - to a strategy.

Optional Implementation Configurations
You can implement the following optional setup steps in Oracle

Fusion Advanced Collections:
• Manage Collections Lookups.
• Manage Collections Note Type.
• Manage Collections Note Type Mapping.
• Manage Collections Note Descriptive Flexfields.

Manage Collections Lookups
• Oracle Fusion Advanced Collections comes with predefined

lookups.
• You can define additional lookups if required for your
business.
• Lookups are containers for the list items that appear in an
application.
• Users select one of the items from such lists to enter a value
on the application UI.
Lookups consist of:

• Lookup Type: A static list of values users use to make entries in the application. This is
the name of the field that appears on the setup UI and not on the application UI where
you make the selection.
• Lookup Code: An internal application code for each lookup that is not visible to users.
• Meaning: The actual UI term associated with the lookup code. It is the item that appears
in the list on the application UI against the specific field name, and can be selected by
the users to indicate their choice.
• Tag: A label associated with that lookup. Certain product offerings use lookup tags for
functionality that is specific to that product. Refer to the product offering-specific
documentation for more information. If no such use of tag is documented, the tag is
ignored.
• Enabled: A status that determines the availability of the meaning (the value or the item)
within the selection list for that lookup type. If you do not enable it, the value does not
appear in the selection list at run time.

Three categories of lookups exist:
• Standard Lookups: These are the simplest form of lookup types consisting of lookup
codes and their meanings.
• Common Lookups: These lookups are available for internal system administrative use
and are used by more than one application.
• Set-Enabled Lookups: These lookups contain lookup codes that are part of a reference
data. You can use sets to enable different values in that lookup for different sets of
users. At run time, a selected attribute determines which set-enabled lookup is visible to
the users. For example, the attribute east-coast or west-coast in the determinant
location determines whether it is the east-coast or the west-coast location, depending
upon the selected lookup.
Lookup codes and their meanings are valid for a specified date range. If a date range is not
specified, the lookup codes and meanings have indefinite validity from the time they are
created.

Manage Collections Note Types and Mapping
A note is a record attached to an account that is used to capture

nonstandard information received while you are conducting
business. When setting up notes for Collections, consider the
following points:
• Note Types
• Note Type Mappings
Note Types: Are assigned to notes at creation to categorize them for future reference. During
setup you can add new note types, and you can restrict them by business object type through
the process of note type mapping.
Note Type Mappings: After note types are added, you must map them to the business objects
applicable to your product area. Select a business object other than Default Note Types. You
see only the note types that are applicable to that object. If the list is empty, note type
mapping doesn't exist for that object, and default note types are used. Select Default Note
Types to view the default note types in the system.
Modifying default note types affect all business objects without a note type mapping. For
example, you have decided to add a new note type of Analysis for your product area of Sales-
Opportunity Management. Use the note type mapping functionality to map Analysis to the
Opportunity business object. This results in the Analysis note type being an available option
when you are creating or editing a note for an opportunity. When deciding which note types to
map to the business objects in your area, consider the same issues you considered when
deciding to add new note types. Decide how you would like users to be able to search for,
filter, and report on those notes.
Extensibility features are available on the Note object. For more information refer to the article
Extending CRM Applications: How it Works.
For more information, see the Extensibility topic in Appendix A, Common Applications Topics.

Managing Note Descriptive Flexfields
Use Oracle Fusion Advanced Collections descriptive flexfields to

record additional information that is not included in the standard
information about notes.
For more information about defining descriptive flexfields, see the Descriptive Flexfields topic
in the Appendix.

Advanced Collection Metrics
• Calculated using industry standard formulas.

• View Metrics in improved user interface.
• View Metrics across many dimensions.
Using Advanced Collections metrics you can measure and view the performance of the
collections organization at various levels. It uses industry standard formulas to calculate these
metrics and also tracks metrics historically.
You can view the metrics across many dimensions which you can use to aggregate or
delineate the calculations. These dimensions include time, spatial / location, customer
hierarchy and so on. Using these metrics enables organizations to better understand:
• Health of their outstanding receivables
• Efficiency of their collections organization
• Potential problem areas to apply more collections resources or alter collections
strategies
You can also view metrics across various time dimensions such as Month, Quarter, and Year.
Advanced Collections compares the current values with the prior period values (month,
quarter, or year) and displays a green or red arrow. In most cases a higher value indicates a
negative performance change shown with a red up arrow, however, in some cases a higher
value indicates a positive change and is shown with a green up arrow.

For example, a collections manager can evaluate individuals, subgroups, and overall groups
by viewing the Collections Effectiveness Index (CEI). CEI measures collections effectiveness,
or amounts that are collectible compared to those actually collected.
This percentage expresses the effectiveness of collection efforts over time.
When viewing the Promise metrics, a green down arrow indicates a higher current value due
to more effective collection efforts while a red up arrow indicates an increase in the current
value and increase in broken promise count, amount, and percentage.

Demonstration Overview: Enabling Advanced
Collection Metrics
This demonstration covers the following topics:
• How to set the Collections preferences
• How to schedule new processes
• How to view metrics across month / quarter / year dimensions.

Advanced Collections Metrics Tips
Advanced Collections Metrics tips:

• The past date used for calculations (inception date)
determines how much history the metrics engine stores.
• Do not enter a date older than your oldest transaction in the
system.
• Once the Initialize and Load Collections Metrics process runs,
you only need to run the Incremental Load Collections
Metrics.
The farther back in time you enter the inception date, the more you can examine metrics in
the past. However, depending on the number of transactions in your system, it could take
additional time for the Initialize and Load Collections Metrics process to run.
Customers typically enter an inception date for the prior one or two calendar years.
Scheduling the Incremental Load Collections Metrics ESS job allows your metrics to remain
up-to-date. Oracle recommends that you run this job on a daily basis.
If metrics data becomes stale (for example, parties are merged or renamed), run the Initialize
and Load Collections Metrics process again.

Summary
In this lesson, you should have learned:

• Set up and maintain Collections.
• Define aging.
• Create collectors.
• Configure dunning.
• Define Collections preferences.
• Manage strategy tasks and strategies.
• Manage scoring data points and formulas.
• Configure notes.
• Describe Advanced Collections Matrix

19
Configuring Assets
Oracle Financials Cloud: Financials Implementation 19 - 1

Objectives
After completing this lesson, you should be able to explain:

• Planning Your Assets implementation.
• Managing Assets key flexfields.
– Asset Category
– Asset Key
– Asset Location
• Defining system controls.
• Managing fiscal year and calendars.
• Manage asset books and categories.
• Understand implementation considerations.

Implementing Assets
Consider these four implementation phases when planning

your Assets implementation:
Implementing Assets requires:

• Planning and setting up Assets-specific information, such as: key flexfields, system
controls, fiscal years, calendars, categories, locations, depreciation rules, and asset
books.
• Converting and reconciling existing asset information from and with the previous
system.
Consider these four implementation phases when planning your Assets implementation:
• Planning the Implementation
• Setting Up Assets
• Converting Existing Asset Information
• Reconciling with the Previous System

Planning Your Implementation
When planning your implementation:

• Consider your organizational structure and business dimensions.
• Carefully evaluate your business needs so you can design and set up Assets to take
advantage of its flexible tools for recording and maintaining asset information.
• Ask the following questions:
- Ask about the company’s history.
- Obtain information about the company’s assets.
- Determine the conversion period.
- Decide on the Assets setups.

Inquiring About Your Company’s History
Before implementing Assets, ensure that you have answered the

following questions:
• What accounting changes have occurred in the company's
history?
• Have the calendar, fiscal year, or prorate rules changed?
• Has the company been acquired or have there been any
mass adjustments?
• What are the future plans of the company?
• What is the strategic plan of the company?
• How may future events affect the accounting procedures of
the company?

Obtaining Existing Asset Information
• Decide how to bring the information into Assets.

• Obtain and review the existing asset information and how the
company is currently maintaining its asset inventory.
• Determine the location of the data, how to access it, the type
of format it is in, and who has the authority to access the
information.
• Use the Mass Additions interface table
FA_MASS_ADDITIONS to import the information into Oracle
Fusion Assets.
• Utilize the Assets features of the Oracle Application
Development Framework (ADF) Desktop Integration.

Determining the Conversion Period
Determine the best time to convert your assets. For example,

should you:
• Convert at fiscal year-end ?
• Convert in mid-fiscal period ?
Decide if it is convenient to convert at fiscal year-end because year-end numbers are easy to
reconcile, and year-to-date figures are correct in the new year.
If you convert in mid-fiscal period, use the previous asset system as well as Assets to report
for the fiscal period.

Define Fixed Assets Configuration
Required Optional
Manage Key Flexfield Value Sets Manage Depreciation Method

Manage Asset Category Manage Bonus Rule
Manage Fixed Asset Location Manage Ceiling
Manage Asset Key Flexfield Manage Cash-Generating Units
Manage System Controls Manage Distribution Set
Manage Fiscal Years Manage Profile Options
Manage Calendars Manage Lookups
Manage Prorate Conventions Manage Descriptive Flexfields
Manage Asset Books Manage Asset Key
Oracle Fusion Assets configuration consists of:

• Required Steps: Must be completed before you can account for your assets.
• Optional Steps: You need to perform optional steps only if you plan to use the related
feature or complete certain business functions.

Define Fixed Assets Configuration for Rapid
Implementation
Setup and Maintenance > Define Fixed Assets Configuration for Rapid Implementation
Use the Define Assets for Rapid Implementation task list to:
• Create a new Assets implementation
• Update an existing Assets implementation
• Upload Assets implementation information to Assets

Prerequisite Setup
The following steps are prerequisites before implementing

Assets:
• Oracle Fusion General Ledger
– Ledgers
– Currencies
– Currency Rates
– Conversion Rate Types
– Cost Center as a segment in the chart of accounts (optional)
• Human Capital Management (HCM): Employees
• Oracle Fusion Payables: Suppliers
• Financials Common Module: Reference Data Sets
• Oracle Fusion Subledger Accounting: Accounting Methods

Creating a New Assets Implementation Spreadsheet
Use the Create Fixed Assets Configuration spreadsheet to rapidly implement the required
tasks.
Note: You can use this task only when you implement Assets for the first time. Use the
Update Fixed Assets Configuration spreadsheet to update an existing Assets implementation.
• Review the instructions on the Rapid Setup instructions tab.
• Enter your categories, locations, and asset books on the appropriate tab.
Note: System controls, depreciation calendars, and prorate conventions, the category
and location structures, oldest date placed in service, and starting asset number are
defined automatically.
• Validate your data.
• Generate your configuration file.
• Upload your configuration file.

Updating an Existing Assets Implementation
Use the Update Fixed Assets Configuration spreadsheet to update an existing Assets
implementation.
• Review the instructions on the Rapid Setup instructions tab.
• On the tabs where you plan to make changes, click the Download button to import your
existing configuration data to the spreadsheet.
• Update the spreadsheet.
• Validate your data.
• Generate your configuration file.
• Upload your configuration file

Demonstration 19-1 Overview: Updating an Existing
Assets Configuration
This demonstration covers the following topics:
• Opening an Update spreadsheet.
• Updating an existing Assets configuration.
• Validating your data.
• Generating a configuration file.
• Uploading your data.

Managing Assets Key Flexfields and Value Sets
You must define the following three key flexfields:
• Asset Category Flexfield: Groups assets by financial information.

• Asset Location Flexfield : Groups and tracks assets by physical location.
• Asset Key Flexfield: Groups assets based on non-financial information.
Value Sets
Before defining key flexfields, you must first define value sets for each segment you plan to
use for your flexfields.
Note: Assets flexfields are explained in later topics.

Location Key Flexfield Implementation: Considerations
Planning your location flexfield structure

• Choose the number of segments, the length of each segment, the name, and the order
of each segment in your Location flexfield.
• Define the Location flexfield structure based on the asset tracking requirements of your
enterprise.
• Important: Plan your flexfield carefully. Once you begin entering assets using the
flexfield, you cannot change it.

Location Key Flexfield Implementation: Considerations
Defining your flexfield segments:

• You must define a state segment and up to six other location
segments.
• Follow the considerations if you do business internationally.
• Optionally, include segments such as country, state, city, and
site.
• Ability to track asset locations in more detail.
• Use abbreviations if the location names are too long.
You must define a state segment and up to six other location segments.
If you do business internationally, you should create a segment for Country to track the
country an asset is in.
If you track asset locations in more detail, for example, if you use barcodes, you can also add
segments for the building and room number.
The location name (all segments concatenated) appears on forms and reports, which display
only a limited number of characters. You may want to abbreviate some location segment
values

Category Key Flexfield Implementation: Considerations
Planning Your Asset Category Flexfield Structure

• Define the structure after reviewing your company’s business needs to ensure assets
are grouped according to depreciation rules.
• Define your Asset Category key flexfield so that you can create categories and group
assets by financial information in relevant categories.
• Plan your flexfield carefully. Once you begin entering assets using the flexfield, you
cannot change it.
Note: The combination of segment values and segment value separators must be 30
characters or less, because the combination is used as a context field value for the Asset
Category descriptive flexfield. For example, VEHICLE.DELIVERY is a valid combination
because it contains 16 characters, including the segment separator.

Defining Your Flexfield Segments
• Organize category hierarchies so that valid subcategory

values depend on a major category value. For example, in the
category Vehicle-Owned, the second segment can be used as
a minor segment.
• Define at least one subcategory segment to allow for
distinctions within a major category.
• Define up to seven segments for your Asset Category key
flexfield.
Assets displays only a limited number of characters on its forms and reports. You can use
only two or three segments so that you can display all of them.
Because you must define depreciation rules for each category flexfield combination, more
setup and maintenance effort is required for more segments.

Managing Asset Locations
Asset locations track the physical location of assets. Assets can be reported on and
transferred based on their locations.
• Define locations based on the current and anticipated future assignments of assets.
• Ideally, use standardized location names or abbreviations where the names are too
long, since locations are used for grouping, tracking and reporting purposes.

Defining Asset Locations
Define location combinations by using Location flexfield segment

values.
Navigate to: Setup and Maintenance > Define Fixed Assets Configuration > Manage Asset
Locations.

Asset Key Flexfield Implementation: Considerations
Planning Your Asset Key Flexfield Structure

• Define the Asset Key flexfield structure based on your asset tracking requirements.
• You can assign the same asset key to many assets to easily find similar assets.
• Asset key setup is required even though it is not required that you capture this
information during entry.
Note: Plan your flexfield carefully. Once you begin entering assets using the flexfield, you
cannot change it.

Defining Your Flexfield Segments
• Define up to ten segments.

• If you choose not to track assets using the asset key, you
must define at least one segment without validation, because
the Asset Key flexfield structure is required to set up the
system controls.

Practice 19-2 to 19-4 Overview: Reviewing and
Defining Asset Key Flexfields
This demonstration and these practices cover the following topics:

• Practice 19-2: Review Asset Key Flexfields Demonstration
• Practice 19-3: Define Values for Major and Minor Category
• Practice 19-4: Define Values for Asset Clearing and CIP
Clearing Accounts.

Managing System Controls
System controls provide information about the structure of your company.

Note: System controls setup is a one-time setup. Once you set up your system controls, you
cannot modify them.
When setting up system controls, you need to set up the following:
• Enterprise name
• Oldest date placed in service
• Flexfield structures
• Automatic asset numbering

Defining Your System Controls
Manage System Controls

Setup and Maintenance work area > Define Fixed Assets Configuration > Manage System
Controls
• Enterprise Name: The enterprise name establishes the name that appears on Assets
reports.
• Oldest Date Placed in Service: The oldest date placed in service controls the following:
- The dates that are valid to place assets in service
- The date to begin your calendars
- Note: You can only update the oldest date placed in service before you assign any
calendars to depreciation books.
• Flexfield Structures: Define your company's Category, Location, and Asset Key flexfields
structures which are used to record transactions before defining system controls.
- Configure flexfield segments to capture data that represents the values of
attributes.

- Define any number of segments for each flexfield, but Assets supports only one
structure.
- Note: The administrator must choose a structure for each key flexfield that will be
used to record transactions.
• Automatic Asset Numbering: Define the starting asset number to begin automatically
numbering your assets.
Note: Some asset numbers may be skipped. Be aware of the rules for entering asset
numbers manually.

System Controls Implementation: Considerations
Before setting up system controls, consider the following:

• Define certain flexfields before defining system controls.
• Define the enterprise name appropriately.
• Understand which type of dates the oldest date placed in
service controls.
• Ensure that the starting number is appropriate.
Define your Category, Location, and Asset Key flexfields before defining system controls.
Ensure you define the enterprise name appropriately, because the enterprise name displays
on all reports.
Keep in mind that the oldest date placed in service controls the valid dates on which assets
can be placed in service and the date on which calendars begin.
Because automatic numbering of assets begins with the starting number defined in your
system controls, ensure that the starting number is appropriate

Practice 19-5 Overview: Review Asset System Control
Options Demonstration
This demonstration covers the following topic:
• Reviewing the Manage System Controls page.

Managing Fiscal Years and Calendars

Managing Fiscal Years and Calendars
You must first define fiscal years. You then define asset
calendars based on those fiscal years.
• Fiscal years group your accounting periods.
• Calendars are based on the fiscal years that you set up.
– Depreciation calendar: Determines the number of accounting
periods in a fiscal year.
– Prorate calendar: Determines what rate is used to calculate
annual depreciation by mapping each date to a prorate period.

Defining Fiscal Years
A fiscal year is:

• A standard set of periods used to prepare annual financial
statements for reporting and tax purposes.
• Also referred to as a financial year or budget year.
• Normally a twelve-month period, but this varies from business
to business and country to country.

Defining Fiscal Years
Consider the following when defining fiscal years:

• Define the start date and end date for each of your fiscal
years.
• Define at least one calendar for each fiscal year.
• Set up multiple fiscal years.
• Assign different fiscal years to your different corporate books.
• Define the start date and end date for each of your fiscal years starting from the earliest
date placed in service through at least one fiscal year beyond the current fiscal year.
• Define at least one calendar for each fiscal year to break the fiscal year into multiple
reportable periods, such as months.
• Set up multiple fiscal years and assign different fiscal years to your different corporate
books to meet the various reporting and tax requirements.
Note: At the end of each fiscal year, the Calculate Depreciation program automatically
generates the dates for the next fiscal year and calendars, if they are not defined

Fiscal Year Implementation: Considerations
Before defining fiscal years, consider the following:

• Prepare a list of all the assets that need to be entered.
• Sort the assets in the order of the date placed in service.
• Ensure the calendar for the tax book uses the same fiscal
year name as the calendar for its associated corporate book.

Defining Asset Calendars
Calendars break down your fiscal year into accounting periods.

Define your calendars with as many periods as necessary for
your reporting and tax regulation requirements.
Asset books:
• Must have a depreciation calendar and a prorate calendar.
• Can use the same calendar as both the depreciation and
prorate calendar.

• Initially set up all calendar periods.

• Set up at least one period before the current period.
Note: You can divide annual depreciation proportionately
according to the number of days in each period or evenly in each
period.
• Initially set up all calendar periods from the period corresponding to the oldest date
placed in service to the last day of the current fiscal year.
• Set up at least one period before the current period. At the end of each fiscal year,
Assets automatically sets up the periods for the next fiscal year.
For example, to define a 4-4-5 calendar, set up your fiscal years, depreciation calendar, and
prorate calendar with different start and end dates, and fill in the uneven periods.

Understand what each calendar determines:

• Depreciation calendar
• Prorate calendar
• Calculate Depreciation
• The depreciation calendar determines the number of accounting periods in your fiscal
year.
• The prorate calendar determines what rate Assets uses to calculate annual depreciation
by mapping each date to a prorate period, which corresponds to a set of rates in the rate
table.
• The Calculate Depreciation process uses the prorate calendar to determine the prorate
period that is used to choose the depreciation rate.

Calendar Implementation: Considerations
Before defining calendars, consider the following:

• Corporate books can share the same calendar.
• Multiple books can use a single calendar.
• Tax books can have different calendars than their associated corporate books.
• Depreciation and prorate calendars must be defined before defining asset books.
• Different calendars can be set up for reporting and tax purposes, depending upon
statutory requirements.

Calendar Implementation: Considerations
• All calendar periods must be set up from the period

corresponding to the oldest date placed in service to the last
day of the current fiscal year.
• At least one period must be set up after the current period.
• Define calendars only after you have finished defining system
controls and fiscal years.

Prorate Conventions: Concepts
Prorate and retirement conventions:

• Determine how much depreciation to take in the first and last
year of an asset’s life.
• Must account for every date in the fiscal year for assets to
depreciate properly, because assets can be acquired at any
time in a given period.

Other considerations:
• The prorate convention and the date placed in service
determine the prorate date.
• Assets uses the prorate date to determine the prorate period
in your prorate calendar.
• Assets prorates the depreciation taken for an asset in its first
fiscal year of life according to the prorate date.

The following shows examples of prorate conventions and their prorate dates when the date
placed in service is 01-JUN-2016:
• Following Month convention: Prorate Date is 01-JUL-2016
• Mid-Month convention: Prorate Date is 15-JUN-2016
• Month convention: Prorate Date is 01-JUN-2016
• Half-Year convention: Prorate Date is 01-JUL-2016

Prorate Conventions: Examples
Review these prorate conventions and examples:

• Half-year prorate convention.
• Following month prorate convention.
Example 1: Half-year prorate convention

You use the half-year prorate convention. The prorate date of all assets using that convention
is the midpoint of your fiscal year, so assets acquired in the same fiscal year take the same
amount (half a year's worth) of depreciation in the first year.
Example 2: Following month prorate convention
You use the following month prorate convention. The prorate date is the beginning of the
month following the month placed in service, so the amount of depreciation taken for assets
acquired in the same fiscal year varies according to the month they were placed in service.

Retirement Conventions
Understand how retirement conventions are applied in these

situations:
• If you do business in a country that requires you to use a
different prorate convention for retirements than for additions.
• If you retire the asset before it is fully reserved.
If you do business in a country that requires you to use a different prorate convention for
retirements than for additions, define retirement conventions to determine how much
depreciation to take in the last year of life, based on the retirement date.
If you retire the asset before it is fully reserved, then Assets uses the prorate date from the
retirement convention to determine how much depreciation to take in the asset’s last year of
life.

Prorate Convention Implementation: Considerations
• Initially set up all your prorate conventions in the correct

sequence.
• Review your reporting authority’s depreciation regulations.
• Initially set up all your prorate conventions from the convention period corresponding to
the oldest date placed in service through the end of the current fiscal year.
Note: At the end of each fiscal year, Assets automatically sets up your prorate
conventions for the next fiscal year.
• Review your reporting authority’s depreciation regulations.
Note: Your reporting authority's depreciation regulations determine the amount of
depreciation to take in the asset's first year of life.

Review these examples of how prorate conventions are applied:

• Regulations require that you prorate depreciation according to
the number of months you hold an asset in its first fiscal year
of life.
• Regulations require that you prorate depreciation according to
the number of days that you hold an asset in its first year of
life.
Examples
Example 1:
Regulations require that you prorate depreciation according to the number of months you hold
an asset in its first fiscal year of life. In this case, your prorate convention has twelve rate
periods, one for each month of the year.
Example 2:
Regulations require that you prorate depreciation according to the number of days that you
hold an asset in its first year of life. In this case, the fiscal year depreciation amount would
vary depending on the day you added the asset. Thus, your prorate convention contains 365
prorate periods, one for each day of the year

Align the prorate convention with the prorate calendar.
Convention Prorate Calendar
Month 12 Periods
Mid-Month 24 Periods
Daily 365 Periods

In this example, you use the mid-month prorate convention

Optional Implementation Steps
You can implement the following optional setup steps in Assets:

• Manage cash-generating units.
• Manage distribution sets.
• Manage profile options.
• Manage lookups.
• Manage descriptive flexfields.
• Manage asset keys.

Practice 19-6 Overview: Managing Fiscal Years

• Creating a fiscal year by using the Manage Fiscal Years page
from the Setup and Maintenance work area.

Practice 19-7 Overview: Managing Asset Calendars

• Create a monthly calendar by using the Manage Calendars
page from the Setup and Maintenance work area.

Practice 19-8 Overview: Managing Prorate Conventions
This practice cover s the following topic:

• Creating a Prorate Convention by using the Manage Prorate
Conventions page from the Setup and Maintenance work
area.

Managing Asset Books
In Oracle Fusion Assets, user access to the data is secured at the asset book level.
• Each user can view and update the assets only in the asset book to which they have
access. You can set up an unlimited number of independent asset books.
• Each book has its own set of depreciation rules, accounts, and calendars to organize
and implement your fixed assets accounting policies more effectively.
• An asset can have different financial information and depreciation rules in each book.
For example, you can make the asset cost in your tax book different from the cost in the
associated corporate book. Because the books are independent, you can run
depreciation for each book on a different schedule.
• When you define a tax book, you must specify an associated corporate book.
Note: After a book is created, roles are automatically created and can be assigned to users to
provide access to the asset books.

Corporate Books
When defining asset books, remember that corporate books:

• Hold all asset information
• Are used to post journal entries for all accounting activity,
including depreciation to the relevant primary ledger in
accordance with corporate policy and business practices.
• Must be assigned to a primary ledger.

Asset Book Setup
Navigate to: Setup and Maintenance > Manage Asset Books > Create
To create a corporate book, enter the following fields:
• Name and Description: Use a name that represents your book correctly on reports.
• Book Class: Select Corporate. Other choice is Tax. When you select Tax, enter an
associate corporate book.
• Ledger: Select the ledger to record the asset transactions.
• Depreciation Calendar: Enter the calendar to use for depreciation. The Fiscal Year
Name and Prorate Calendar default in.
• Current Period: Enter the current period. The Oracle Fusion Assets system updates the
current period field each time the current period is closed and the next period is opened.
Keep in mind there can be only one open period at a time for each asset book.
• Divide Depreciation: Select the method for dividing the annual depreciation amount
over the periods in your fiscal year for this book.
- Choose Evenly to divide depreciation evenly in each period
- Choose By Days to divide it proportionally based on the number of days in each
period

• Last Depreciation: Initially defaults to the current date. Assets updates this date when
you run depreciation.
• Last Depreciate Run Status: Shows the status of the last run.
• Depreciate if retired in the first year: Select to depreciate an asset you purchase and
retire in the first year of the asset’s life.
• Allow amortized changes: Select to allow amortized changes the asset book.
• Allow cost sign changes: Check this check box if you want to allow the cost amount to
change from a positive to a negative amount, or from a negative to a positive amount.
• Allow impairment: Check this check box if you want to allow impairment. An asset is
impaired when the carrying amount of the asset exceeds its recoverable amount.
• Allow ledger posting: Check this check box if you want to allow posting to the General
Ledger.
• Allow physical inventory: Check this check box if you want to allow physical inventory.
• Use Payable invoice date as date placed in service: Select this option to use the date
on the payables invoice as the date placed in service.
• Use NBV threshold for depreciation:
• Capital Gain Threshold Years: Enter the number of years and months to use as the
minimum time you must hold an asset for Assets to report it as a capital gain when you
retire it. If you want Assets to report a capital gain for all assets when you retire them,
enter zero for the threshold.
• Inactive On: Enter a date to inactivate the book.
• Annual Depreciation Rounding: Select Always or With Restrictions to

Asset Book Accounts
Navigate to: Setup and Maintenance > Manage Asset Books > Create
In the Account section of the Create Book page, enter the Account Default . The segments in
the Account Default are used to create the account number for the other types of asset
transactions.
Enter the account number that represent each of these asset transactions and is combined
with the other segments defined in the Account Default:
• Net Book Value Retired Gain and Loss
• Proceeds of Sale Gain and Loss
• Proceeds of Sale Clearing
• Cost of Removal Gain or Loss
• Cost of Removal clearing
• Deferred Depreciation Expense and Reserve

Asset Book Rules
Reference Data Groups
Advanced Rules
Revaluations
Navigate to: Setup and Maintenance > Manage Asset Books > Create.
Complete the asset book setup by entering the rules your asset book will use in operating
Assets:
Reference Data Groups: Enter the Reference Data Set Code that is used for each type of
object.
Revaluations: Select the following options:
• Allow revaluation by Cost or Net book value
• Revalue depreciation reserve
• Revalue YTD depreciation
• Amortize revaluation reserve
• Retire revaluation reserve
• Include current period depreciation
• Revalue fully reserved assets
• Life Extension Factor
• Maximum Revaluations
• Life Extension Ceiling
• Allow capital fund accounting

• Life Extension Ceiling:
• Allow capital fund accounting:
Advanced Rules:
• Allow group depreciation:
• Allow CIP members:
• Allow CIP depreciation:
• Allow member tracking:
• Allow intercompany member:

Practice 19-9 Overview: Managing Asset Books

• Creating a Corporate Depreciation Book

Tax Books
When defining asset books, remember that tax books:

• Comply with statutory rules for depreciating assets.
• Can use a different calendar than their associated corporate
book, if both calendars use the same fiscal year.
• Can optionally be used to post journal entries to either the
corporate book's primary ledger or to its secondary ledger.
Data can be copied from the corporate book on a regular basis, excluding depreciation
information.
Note: Use the Perform Periodic Mass Copy process to transfer assets and transactions from
the corporate book to the tax book.

Asset Books and Ledgers, Subledgers,
and Business Units
When defining asset books, keep in mind the asset books'
relationship to ledgers, subledgers, and business units.
• Asset books are linked to ledgers.
• Asset books are not directly linked to business units.
• Business units are assigned to primary ledgers.
• Business units can interact with corporate asset books
assigned to the same ledger.
• Asset tax books provide alternative asset accounting.

Asset Books and Ledgers, Subledgers, and Business
Units
In this example:
• The corporate book is populated by the Oracle Fusion Payables business units
assigned to the same primary ledger.
• The tax book is populated by Oracle Fusion Assets.
• The tax book uses alternate accounting.
• The tax book can post accounting entries to the corporate book's primary ledger or to its
secondary ledger, as required.

Asset Books and Ledgers, Subledgers, and Business
Units
Primary Ledger Secondary Ledger

Ledger Currency: USD Ledger Currency: USD
Chart of Accounts: Corp Chart of Accounts: Corp
Accounting Method: Corp Accounting Method: Corp
Business Corporate
Unit Book Tax
Book
Payables Assets
Assets

Asset Book Implementation: Considerations
Consider the following when defining asset books:

• Access to asset data is secured at the asset book level.
• Define asset books according to your depreciation and
accounting requirements.
• Set the default accounts for retirement and deferred
depreciation transactions at the book level.

Asset Book Implementation: Considerations
Consider the following when defining asset books:

• Select the reference data set for each setup object to restrict
their values during transaction entry.
• Define tax book rules to copy transactions from the corporate
book.
• Enable group assets for your book and select the group asset
rules.

Defining Your Asset Book: Multiple Depreciation
Requirements
In this example, your company has operations in the United States only, and you need to
prepare financial statements for reporting purposes. Additionally, your company must meet
depreciation requirements under federal and state laws.
Oracle recommends creating a corporate book and two associated tax books.

Defining Your Asset Book: Multiple Currency
Representations
In this example, your company has operations in Singapore, and the company is a subsidiary
of a US company. Your company must prepare its financial statements in Singapore dollars
(SGD) for reporting purposes, and in United States dollars (USD) to fulfill the parent
company's US generally accepted accounting principles (GAAP) and consolidation
requirements.
• Primary currency: SGD
• Reporting currency: USD
Oracle recommends creating a corporate book that is assigned to the primary ledger with the
primary currency SGD and the reporting currency USD.

Defining Your Asset Book: Multiple Currency
Representations
When you define the corporate book for the primary ledger with
reporting currencies:
• Assets automatically creates a reporting book for each
reporting currency of the ledger.
• Perform transactions only in the primary currency.
• View transaction details, run reports, and create accounting
entries.
Assets automatically generates currency representations for the transactions in all the
reporting currencies.
You can view transaction details, run reports, and create accounting entries in both the
primary and reporting currencies.

Defining Your Asset Book: Multiple Accounting
Representations
In this example, your company has operations in the United States. Your company needs to
prepare its financial statements under both US Generally Accepted Accounting Principles
(GAAP) and International Financial Reporting Standards (IFRS).
Oracle recommends creating a corporate book for the US GAAP primary ledger and an
associated tax book for the IFRS secondary ledger. Both the primary and secondary ledgers
should use the same chart of accounts and currency.

Implementation Questions
Implementation Question Recommendations and Best

Practices
Can I create journal entries from the No. The corporate book can be
corporate book to the secondary ledger? associated only to the primary ledger.
Can I create more than one corporate Yes. You can create an unlimited
book for a ledger? number of corporate books for a primary
ledger.
How do I create journal entries for asset You can create journal entries and
accounting activities in a tax book? optionally post them to the assigned
primary ledger or secondary ledger by
setting the Allow ledger posting check
box to Yes.

Implementation Questions
Implementation Question Recommendations and Best

Practices
Can I assign any secondary ledger to No. Only secondary ledgers with the
a tax book? following settings can be assigned to a tax
book:
• The primary ledger must be assigned to
the associated corporate book.
• Both the primary and secondary ledgers
must use the same chart of accounts and
currency.
• The subledger level accounting must be
enabled for the secondary ledger.
• The secondary ledger must have the
following Oracle Fusion Subledger
Accounting settings for Assets:
‒ Subledger Accounting Enabled: Yes
‒ Use Primary Ledger Amounts: No

Reference Data Sharing Across Asset Books
Assets contains a common set of predefined set-enabled objects

to meet the business needs of sharing reference data across
books.
• Use reference data sets to share reference data across books
and to restrict access to reference data by book.
• Optionally, create new reference data sets to limit the access
to certain setup objects in one or more books.
Oracle Fusion Applications contains two predefined sets:
• Common
• Enterprise
You can create more reference data sets based on your business
and data sharing requirements.

Reference Data Sharing: Overview
• Create reference sets across tables or lookup types.

• Share information and data processing options among the
determinant types, such as business unit or asset book.
• Create separate and common sets and subsets for each
business unit or to share across several business units
depending upon its business requirement.
Manage Reference Data Sets: Use this page to create the Set Code, Set Name, and
Description fields that can then be assigned to reference data.
Manage Set Assignments for Set Determinant Type: Use this page to assign the reference
data sets to relevant reference objects.
• Select Common Set to share it across the organization.
• For multiple assignments, you can classify different types of reference data sets into
groups and assign them to reference entity objects.
• The assignment takes into consideration the determinant type, determinant, and
reference group, if any.

Determinant and Determinant Types
• Determinant Type: The point of reference used in the data

assignment process. You can share the partitioned reference
data based on a business context setting called the
determinant type.
• Determinant: The value that qualifies the selected determinant
type.
For example, when managing set assignments for the set determinant type, if you select
Business Unit as the determinant type, you must provide the name of the business unit as the
corresponding determinant.
Asset Book is the determinant type in Oracle Fusion Assets. An asset book:
• Records information about assets including their acquisition, depreciation, and
retirement.
• Is tied to a ledger.

Reference Data Sharing Across Asset Books
The following set-enabled objects are available in Assets:

• Depreciation methods:
• Prorate conventions
• Bonus rules
• Depreciation ceilings
• Asset lookups:
– Queue names
– Asset descriptions
– Retirement types
– Unplanned types
Method of Sharing:
• Assignment to one set only, no common values allowed used for:
- Prorate conventions
- Bonus rules
- Depreciation ceilings
- Asset Descriptions
• Assignment to one set only, with common values:
- Depreciation Methods
- Queue names
- Retirement types
- Unplanned types

Assignments to One Set Only, with Common Values
• Most commonly used method.

• Allows defining reference data object instance across all sets.
• For example, Receivables Payment Types are assigned
to a:
– Common set that is available to all the business units. With the
common set, you do not have to explicitly assign transaction
types to each business unit.
– Business unit–specific set of transaction types.
– At transaction entry, the list of values for transaction types
includes transaction types from the set assigned to the
business unit, as well as transaction types assigned to the
common set that is shared across all business units.
EXAMPLE

Assignments to One Set Only, with No Common Values
• Simplest form.
• Allows assigning a reference data object instance to one and
only one set.
• For example, Asset Prorate Conventions are defined and:
– Assigned to only one reference data set.
– Shared across multiple asset books, but all the values are
contained in only one set.
EXAMPLE

Reference Data Sharing: US Company Example
In this example, your company is headquartered in the United States and has two
subsidiaries. There are three corporate books and your company wants to eliminate
duplication of reference data.
Oracle recommends the predefined reference data set Common to share reference data
across all the books.

Reference Data Sharing: Multinational Company
Example
In this example, your company is a multinational company with operations in the United
States and Japan. The company has two corporate books: US CORP and JAPAN CORP.
Because the depreciation methods used in these two countries are different, US depreciation
methods should not be available to JAPAN CORP and Japanese depreciation methods
should not be available to US CORP.
Oracle recommends two reference data sets and segregating the methods.

Managing Asset Categories
Use categories to group assets for transaction and reporting

purposes.
Asset categories considerations:
• Group assets.
• Must be assigned to asset books with default accounts and
depreciation rules.
• Use the default account values.
• Automatically default the depreciation rules to assets when
they are added.
Asset categories:
• Group assets that share financial accounts and usually depreciate using the same rules.
• Must be assigned to asset books with default accounts and depreciation rules.
• Use the default account values to account asset transactions in this category.

Managing Asset Categories
In this graphic, assets are:

• Attached to asset categories
• Assigned to asset books
• Depreciated using a specified depreciation method

Defining Asset Categories
Navigate to: Setup and Maintenance > Manage Asset Categories

General category information includes a description of the category, and default information
such as whether assets in this category are leased or owned, personal or real property, and
whether they are capitalized. You can also specify if assets are by default in physical
inventory or are enabled in Oracle Fusion Assets.

Defining Asset Categories
Asset categories also contain:

• General Ledger accounts.
• Default depreciation rules.
• Tax book depreciation rules.
• Default subcomponent depreciation rules.
• Group asset depreciation rules.

Defining Default Depreciation Rules
Define depreciation rules carefully for each category, because

Assets automatically defaults the rules to assets when they are
added.

Defining Oracle Fusion General Ledger Accounts
When defining General Ledger accounts, use the following

guidelines:
• You cannot change balance sheet accounts once assets are
added to the category.
• Define asset clearing accounts that are used in the processing
of invoices from Oracle Fusion Payables.
• If you have more than one book per ledger, enter a unique
clearing account for each book.
Define the balance sheet accounts carefully, because they cannot be changed once assets
are added to the category.
If you have more than one book per ledger, best practice is to enter a unique clearing account
for each book.

Category Implementation: Considerations
When implementing asset categories, define and organize the

following appropriately:
• Category flexfield.
• Category hierarchies.
• Depreciation rules.
• Define the Category flexfield such that assets are grouped according to depreciation
rules.
• Organize category hierarchies such that valid subcategory values depend on a major
category value.
• Ensure that the category is compliant with the chart of accounts
• Set up default accounts and rules for each Category flexfield combination and for each
book.
• Define depreciation rules with care for each category, because they will be automatically
defaulted to assets.
• Assign a category to an asset book before entering assets with that category in that
book.

Practice 19-10 Overview: Managing Asset Categories

• Defining a category with a major category of Office Supplies
and a minor category of Printer.

Managing Cash-Generating Units
• A cash-generating unit is the smallest identifiable group of

assets that generates cash inflows from continuing use.
• Define as many cash-generating units as necessary to:
– Group assets by cash-generating units.
– Calculate and report the impairment loss at the cash-generating
unit level.
Setup and Maintenance work area > Define Fixed Assets Configuration > Manage Cash
Generating Units
A cash-generating unit is largely independent of the cash inflows from other assets or groups
of assets.

Cash-generating Units Example
Problem Solution Implementation

It isn't possible to The entity needs to Create a cash-
estimate the estimate the generating unit
recoverable amount of recoverable amount of representing the entire
the private railway the cash generating mining enterprise so
because its value in unit to which the that the impairment
use cannot be railway provides loss can be calculated
determined, and service (the mine as a for the mine as a
probably is different whole). whole and allocated to
from its value as scrap. all assets in that cash-
generating unit.
Example: How to use cash-generating units for a mining enterprise.

• A mining enterprise owns a private railway to support its mining activities.
• The private railway can be sold only for scrap value and the private railway doesn't
generate cash inflows from continuing use that are largely independent of the cash
inflows from the other assets of the mine.

Managing Distribution Sets
Distribution sets enable you to automatically assign a

predefined set of one or more distributions to a new asset mass
addition.
Navigate to: Setup and Maintenance > Manage Asset Distribution Sets

Defining Distribution Sets
When defining distribution sets, use the following guidelines:

• Define distribution sets to allocate percentages of asset units
to different depreciation expense accounts.
• Define one or more distributions in a set.
• Change the distribution information for a distribution set at any
time.
Note: If you change the distribution information for a distribution set, it does not affect assets
already assigned to that distribution set.

Managing Profile Options
Set profile options to specify how Assets controls access to and

processes data, such as:
• Number of requests you can run in parallel.
• Timing diagnostic message value.
• Amount of database information retained in a concurrent
process.
• Cache reset value.
• Batch size used for bulk processing in mass processes.
• Book selected by default in Assets pages.

Profile Options Settings
The following tables display profile option names and default

values, as well as the effect that each profile option has on your
Assets setup:
Profile Option Default Effect

Display Name Value
Parallel Request 1 You can enter a number between 1 and 20 to
Number specify the maximum number of parallel requests
you want to allow. If you set a value that is greater
than 1, you can run multiple processes at the
same time.
Batch Size 200 The value indicates the number of records in a
batch.
Parallel Request Number Example: For example, if you set the value to 5, you can run
multiple Depreciation processes.
Batch Size Example: For example, if you use the default value of 200, each batch contains
200 records. The value can be between 1 and 10,000.

Profile Option Default Value Effect

Display Name
Cache Sizing 25 Set a value from 0 to 25. The number you

Factor enter controls the amount of information
that can be stored in the cache.
A value of 0 retains only one record in the
cache.
A value of 25 retains a large amount of
data in the cache.
Cache Sizing Factor

In general, a small cache size works better for a very simple data structure. A large cache
size works well for a more complex data structure (for example, setup data that uses many
depreciation methods, bonus rules, depreciation ceilings, and retirement conventions).

Profile Option Default Effect of Enabling Effect of Disabling

Display Name Value
Timing No value Enables printing of Disables printing of timing
Diagnostics (No) timing information. information.
Depreciation No value Cache is reset after Cache is reset after every
Single (No) every asset. 20 assets.
Default Book None The default book You must select a book
appears as the value in from the menu in all Assets
all Assets pages where pages where the Book field
the Book field appears. appears.

Managing Lookups
• Lookups are containers for the list items that appear in an

application.
• Users select one of the items from such lists to enter a value
on the application user interface.

Managing Lookups
Oracle Fusion Assets comes with the following predefined

lookups. You can define additional lookups, if required, for your
business requirements.
Lookup Type Lookup Name Description
FA_ASSET_ Asset Description Displays the descriptions assigned to

DESCRIPTION the assets. Helps standardize asset
descriptions by ensuring that similar
assets have similar descriptions.
FA_PROPERTY_TYPE Asset Property Classifies the property as real or
Type personal.
FA_QUEUE_NAME Queue Name Classifies the status of mass
additions lines as new, on hold, split,
merged, cost adjustment, post, or
posted.

Managing Lookups
Lookup Type Lookup Name Description
FA_RETIREMENT_TYPE Retirement Type Specifies the reason for retirement,

such as stolen, destroyed, retired, or
scrapped.
FA_UNPLANNED_DEPRN Unplanned Specifies the reason for additional
Depreciation depreciation expense.
Information: For more information, see the Manage Lookups in Appendix B: Common
Applications Topics.

Managing Descriptive Flexfields
Use Assets descriptive flexfields to:

• Record additional information about assets.
• Collect information relevant to your business.
• Hold additional information for a new asset in a category.
Use Assets descriptive flexfields to record additional information about assets that is not
included in the standard information on Assets pages.
For example, you can set up a descriptive flexfield for each asset category to collect
information relevant to your business, such as the license number for cars and the square
footage for buildings.
When you assign a new asset to a category, you enter the additional information in a
descriptive flexfield
For more information on defining descriptive flexfields, see the Descriptive Flexfield topic in
the Appendix B: Common Application Topics.

Assets provides the following descriptive flexfields:
Descriptive Flexfield Associated Assets Page

Asset Category Add Asset, Edit Source Line, Add Assets and Prepare
Source Lines spreadsheets
Assets Invoices Add Asset, Edit Source Line, Add Source Lines, Change
Source Lines, Source Line Retirement, Add Assets, and
Prepare Source Lines spreadsheets
Bonus Rates Create Bonus Rule, Edit Bonus Rule
Bonus Rules Create Bonus Rule, Edit Bonus Rule
Book Controls Create Book, Edit Book
Calendar Types Create Calendar, Edit Calendar
Categories Create Category, Edit Category


Category Book Defaults Create Category, Edit Category
Ceilings Create Ceiling, Edit Ceiling
Convention Types Create Prorate Convention, Edit Prorate Convention
Fiscal Year Create Fiscal Year, Edit Fiscal Year
Flat Rates Create Depreciation Method, Edit Depreciation Method
Locations Manage Locations
Methods Create Depreciation Method, Edit Depreciation Method
Retirements Cost Retirement, Unit Retirement, Source Line
Retirement


System Controls Manage System Controls
Transactions Add Asset, Edit Source Line, Preview Add to Asset,
Change Financial Details, Suspend Depreciation, Add
Source Lines, Change Source Lines, Transfer Source
Lines, Change Category, Perform Unplanned
Depreciation, Transfer Reserve, Change Group Asset,
Cost Retirement, Source Line Retirement, Unit
Retirement, Transfer Asset, Adjust Units, Add Assets,
and Prepare Source Lines spreadsheets

Managing Asset Keys
• Define asset keys to group assets.

• Define asset key combinations.
• Assign the same asset keys to multiple assets. to easily
identify similar assets.
• Provide additional descriptive data to group assets by project
or other functional group.
Define asset keys to group assets or to identify groups of assets quickly.

Define asset key combinations. You must first define Asset Key flexfield segment values
before defining asset keys.
Assign the same asset keys to multiple assets to easily identify similar assets.

Managing Asset Keys
Asset keys are similar to asset categories; they enable you to

group assets. However, asset keys have no financial impact.

Practice 19-11 Overview: Provisioning Data Roles to
the User Account
• Provisioning data roles for the asset book to your user
account.
In this practice you are an asset accounting manager at your company and will be assigning
the Data Role for the Asset Book to your User Account.

Summary

• Planning Your Assets implementation.
• Managing Assets key flexfields.
– Asset Category
– Asset Key
– Asset Location
• Defining system controls.
• Managing fiscal year and calendars.
• Manage asset books and categories.
• Understand implementation considerations.

20
Configuring Oracle Expenses

Objectives
• Explain Expense Policies and Rules
– Configure Expense Templates
– Discuss Expense System Options
– Enforce Expense Policies
– Set up Receipt Management
• Configure Corporate Card Programs
• Understand Travel Integration
• Integrate with External Systems for Expense
Reimbursement
• Configure Mobile Devices

Rapid Implementation Overview
Use the Define Expenses Configuration for Rapid Implementation

task list to:
• Streamline your setup configuration to focus only on the
critical setup steps.
• Minimizes the time needed for you to complete your key
setups.
Navigate to: Setup and Maintenance > Define Expenses Configuration for Rapid
Implementation
Use these Rapid Implementation tasks to begin your Expenses configuration:
• Manage Expenses System Options
• Manage Expense Report Templates
• Manage Expense Approval Rules
• Manage Conversion Rates and Policies
Note: You can:
• Navigate through the Define Expenses Configuration for Rapid Implementation task list or
by searching directly on the task.
• You can manually add the rapid implementation or standard Expenses task lists and
tasks to your rapid implementation project to change and update your setup.

Managing Expenses System Options
On the Manage Expenses System Options page, you can set

application options that control various processes in expense
reporting across all business units or for specific business units.
Navigate to: Setup and Maintenance > Manage Expenses System Options
Use the Manage Expenses System Options page:
• To manage expense entry and processing for all business units.
• To confirm that the default settings are aligned with your business practices.

Expenses System Options Concepts
The following terms apply to system options:

• Payment method: A method of payment, such as check, cash,
or credit.
• Terms and agreements: Expense report policies and rules
that employees are typically asked to accept before submitting
their expense reports.
• Bar code: A printable bar code that uniquely identifies each
employee's expense report.
• Reimbursement currency: The currency in
which the employee is reimbursed.

User Options for Expense Report
• Enable Payment Method: Controls whether users can select a reimbursement payment
method in the expense report. To allow users to select the payment method for
reimbursement of each expense report, set the option to Yes.
• Allow Reimbursement Currency Section: Select Yes to allow choice of reimbursement
currency during expense entry. By default, this option is set to No. The application uses
the default payment method, such as check or EFT, that was set up for the users'
reimbursement.
• Enable Attachments: Controls whether you want to allow attachments. You can select
No, Header Only, or Both Header and Lines
• Allowing Overriding Approver: Controls whether an approver can override an expense
report.
• Enable Prepaid Cash Expense: Controls whether a user can use a prepaid cash expense
card.
• Enable Travel: Controls whether your business unit can see the Travel tab in the
Expenses work area.
• Enable Recurring Expenses: Controls whether you can mark expenses as recurring in the
Create Expenses page.
Note: You can enable descriptive flex fields using Expenses.

Corporate Options for Expense Report
• Display Bar Code: Controls whether a barcode that uniquely identifies an employee's
expense report displays on the printed copies. This system option enables you to fax
receipts and the expense report cover sheet with the barcode on it to a server. The server
attaches the receipts to the expense reports.
• Enable Descriptive Flexfields: Controls whether you want to display descriptive flexfields
in an expense report.
• Printable Expense Report Format: Your company can create printable expense report
formats in BI Publisher Enterprise to meet legal or expense report formatting
requirements. The report name in the catalog cannot have spaces.
• Enable Terms and Agreements: You can enforce expense terms and agreements for all
or specific business units. For enforcement, select Yes. This choice list controls whether
employees are required to select the I have read the company policies before submitting
expense reports check box.

• Terms and Agreements URL: Enter the URL for your Terms and Agreements page. You
can enter between 1 and 240 characters.
• Enable corporate card transaction age limit: Stop cash-only expense reports until
transaction older than limit are reported.
• Corporate Card Transaction Age Limit in Days
• Require Project Fields for Project Users: Select Yes to make project teams mandatory for
users when they complete their expense report.
• Expense Report Number Prefix: If you chose alphanumeric prefixes for expense report
numbers, then you must enter the Expense Report Number Prefix as a setup option. This
selection applies to all business units, and you can specify exceptions for specific
business units or define the prefix for each business unit in the Create System Options:
Specific Business Unit dialog box.

Processing Options for Expense Report
• Enable Payment Notification to Employee: Notify employee when payment is created for
reimbursement to entity.
• Enable Automatic Travel Expense Report Creation: Controls whether your company
chooses to automate expense reports from trips.
• Expense Report Audit Approval: Controls when the expense report is approved – either
after manager approval or in parallel with manager approval.
• Processing Days Allowed After Termination: Choose number of days after employee
termination date that expense report processing is allowed.
• Pay Expense Reports through Third Party: Controls whether expense reports are paid
through a third party or through Payables. A third-party application may be a legacy
application within your company or an outside supplier. The default option processes
employee expenses through Oracle Fusion Payables.
• Specific Business Units: This is a list of specific business units to which you can apply
your selected options.

Using Printable Expense Reports
You can enable a printable expense report and then assign it to a

business unit.
• Create printable expense report formats in BI Publisher
Enterprise.
• Assign the formats to any of the business units on the Manage
Expenses System Options page.
Your company can create printable expense report formats in BI Publisher Enterprise to meet
legal or expense report formatting requirements. You can then assign the formats to any of the
business units on the Manage Expenses System Options page.
Note: The report name in the catalog cannot have spaces.

Assigning a Printable Expense Report to an Existing
Business Unit
Printable
Expense Report
Specific
Business
Unit
Steps to assign a printable Expense report to an existing business unit:

1. Navigate to: Setup and Maintenance > Manage Expenses System Options.
2. Select a value from the Printable Expense Report Format list.
3. Select your business unit from the Business Unit list.
4. If the business unit doesn't exist in the Specific Business Units section, click Create and
select an applicable Business Unit from the Create System Options: Specific Business
Unit page.
5. Click Save and Close.
6. Verify your newly selected business unit displays in the Specific Business Units section
on the Manage Expenses System Options page.
7. Select a value from the Printable Expense Report Format.

Practice 20-1: Managing System Options

• Review the Expenses System Options.
• Assigning a Printable Expense Report to an Existing Business
Unit.
• Select Options for a Specific Business Unit.

Setting Up Expense Report Templates
Expense report templates enable companies to control the

expense types visible to each business unit.
Navigate to: Setup and Maintenance > Manage Expense Report Templates.
Additionally, if your company processes corporate card transactions and you want the expense
types to be automatically assigned during corporate card transaction processing, you must set
one expense report template as a default expense report template.

Expense Report Template Concepts
The following terms apply to expense report templates:

• Expense type: A potential expense that you can incur that was
defined by the administrator during setup.
• Expense report template: A grouping of related expense types
that are defined for a specific business unit. Examples include
expense report templates for travel, education, and relocation.
• Expense item: The actual expense that was incurred and is
always associated with an expense type during expense entry
on an expense report.

Defining Expense Report Templates Considerations
To ensure you are selecting the correct expense report template,

consider the following questions:
• What kind of expense report template is required?
• Do you need multiple expense report templates?
• Do you use multiple languages within a business unit?
• What are your expense category requirements?
• What expense types are required within the categories?
• What are your receipt requirements?
• What type of itemization is required for your expense types?

Defining Default Expense Report Templates
• A default expense report template is the first template that you

create on the Create Expense Report Template page.
• Expenses automatically sets the default expense report
template, whether or not you select the Set as default check
box.
Navigate to: Set up and Maintenance > Manage Expense Report Templates > Create.
The purpose of a default expense report template is to:
• Define the items relevant for corporate cards.
• Provide default expense report templates for mobile expense entry.
You can also change the default template from one to another template.
The dates that you enter in the Effective Start Date and Effective End Date impact whether you
can use that template. If the date is outside of the range of effective dates, you cannot use that
template.

Inactivating Expense Report Templates
• Deploying companies do not typically inactivate expense

report templates because they cannot use them after the
end date.
• Leave the Effective End Date field blank on the Create
Expense Report template unless you intend to retire the
expense template.
• Any expenses that are incurred after an end date cannot
be reported using an inactivated expense report
template.
Note: In most cases you would probably inactivate individual expense types, rather than
inactivating an entire expense report template.
To inactivate an expense report template, enter a date in the Effective End Date field on the
Create Expense Report Template page.
You can also inactivate individual expense types in the same way on the Create Expense Type
or the Edit Expense Type page, but the expense report template end date overrides the end
date for individual expense types.
Note: If the current date is past the expense template end date, an employee can still use the
inactivated template to enter expenses on the expense report for the period in which the
expense report template was active.
Caution: If you decide to inactivate a default expense template, then no corporate card
mapping occurs if no other default expense template is identified.

Defining Default Expense Report Templates
The following rules apply to default expense report templates.

• Each business unit can have only one default expense report
template associated with it.
• For any business unit, you can have one or more expense
report templates in addition to the default expense report
template.
• You cannot share expense report templates across business
units.
Note: You cannot implement Expenses if an expense report
template is not associated with a business unit.
A default expense report template with a corporate card expense type mapping is required for
each business unit that processes corporate card transactions.
Note: If your company is established in multiple countries, you must create one expense report
template per business unit. If your users use multiple languages within a business unit, then
you must implement the expense report templates in each of those languages.

Expense Types Overview
An expense type is a potential expense that employees or

contingent workers can incur.
• Expense types fall into expense categories.
• Expense types are granular expenses.
• For example, if Accommodations is an expense category, the
possible expense types could be:
– Hotel
– Motel
– Bed and Breakfast
Setting up expense types in Expenses involves:

• Creating expense types.
• Itemizing expense types.
• Enabling project-enabled expense types.
• Enabling automatic population of the tax classification code.

Create Expense Type
When you create an expense type:

• Assign an account to the expense type. This enables the
application to allocate expenses to a specific account.
• Specify whether receipts are required when users submit
expense reports for approval.
• Optionally require itemization.
• Set up submission receipt requirements for:
– Cash expenses
– Corporate card expenses
– Or both.
• Associate expense types with corporate card expense types.
You can assign the natural account in the expense report template.
After creating expense types, associate them with corporate card expense types on the Card
Expense Type Mapping tab of the Create Expense Report Template page.
• Corporate card expense types come predefined with Expenses or you can add them as
additional lookups.
• Associating defined expense types with corporate card expense types enables Expenses
to correctly derive expense types during the corporate card transaction upload process.

Itemize Expense Types
Itemizing expenses:
• Breaks down charges granularly so you can apply them to
specific accounts.
• Applies expense types to both corporate card expense types
and cash.
• Note: When itemization is set up as Required or Enabled,
include at least one expense type on the Itemization tab of the
Create Expense Type page.
Set up itemization on the Itemization tab of the Create or Edit Expense Type page according to
your company's requirements.
• You can create expense types that are use for itemization only.
• A parent type cannot be an itemized expense type.
• You can also decide whether to enable, disable, or require itemization by employees or
contingent workers when they create an expense item during expense entry.
During itemization setup, you can determine whether the expense types you define are:
• Eligible during expense entry for itemization only.
• Available as an independent, single expense type.
Note: When itemization is set up as Required or Enabled, include at least one expense type on
the Itemization tab of the Create Expense Type page.

A default itemization expense type is one to which expenses are automatically populated when
they are outside the defined itemization. For example:
• A deploying company maps corporate card expense types to expense types and
identifies a default itemization expense type called Miscellaneous.
• When the corporate card feed file is uploaded to Expenses, any unmapped expense
types default to the Miscellaneous expense type.
Note: If you do not want an expense type automatically itemized, you can disable automatic
itemization.

Set Up Project-Enabled Expense Types
• Project-enabled expense types are associated with a project

expenditure type in Oracle Fusion Project Costing.
• For example, a project-enabled expense type enables a
consultant to allocate his consulting expenses to a specific
project and tasks when the expense report is created.
Navigate to: Set up and Maintenance > Manage Expense Report Templates > Select a
Template > Create > Project Expenditure Type Mapping tab.
To set up project-enabled expense types:
• Select the Enable projects check box.
• Select a default project expenditure type, which is a project expense type to which
unspecified project unit expenses are assigned.
• Specify whether receipts are required for project expenses when the user submits an
expense report.
• You can map project-enabled expense types to a specific project unit and a project
expenditure type on an exception basis.
• The association of a project-enabled expense type with a project unit and a project
expenditure type derives accounting in Oracle Projects Costing. Note: Before you can
project-enable expense types, you must perform the following prerequisite setup in
Oracle Fusion Project Foundation:
- Project unit: A unique identifier of a group of projects that are managed as a unit.
- Project expenditure type: A classification of cost.

Enable Tax Classification Code
• You can specify the tax classification code that applies to the
expense type.
• The tax classification code specified during the setup of an
expense type is automatically populated onto the Create
Expense Item page during expense entry.
If necessary, the user can override the specified tax classification code when creating an
expense item if the tax field is enabled on the report.

Modifying Expense Account Segments
You can modify all of the expense account segment values of

your expense items to reflect accurate charge allocations when
creating an expense item or report.
Yes
Navigate to: Setup and Maintenance > Search Tasks: Manage Administrator Profile Values >
Search: EXM_ALLOW_FULL_ACCT_OVERRIDE
Enabling Expense Account Segments
User the EXM_ALLOW_FULL_ACCT_OVERRIDE profile option to capture accurate charge
allocation by enabling all users or specific users to update all expense account segments of
their expense items.
The Override Expense Account Allocation privilege allows users to see the accounting
segments in an expense entry:
1. Search for profile option code EXM_ALLOW_FULL_ACCT_OVERRIDE.
2. Set this profile option to Yes at the site level or at a specific user level.
3. View and update the full accounting segments in the expense entry.
4. Create an Expense Item.
Key Resources
For additional details on enabling full accounting segments update, go to Oracle Applications
Help (fusionhelp.oracle.com) and review the following topics:
• How Can I enable All Account Segments for Expense Report Users?

Practice 20-2 Overview: Creating an Expense Report
Template
• Creating an expense report template.
• Creating four expense types.
• Specifying receipt requirements.
• Confirming that created expense types appear in the created
expense report template.

Configuring Expense Approval Rules Overview
Expense Approval Rules are configurable rules used for expense

report approval.
• Expenses supports configurable approval rules using the
Approvals Management Extensions (AMX).
• Oracle Business Process Management Suite (BPM) provides
the interface to administer the approval rules.
Expenses supports flexible and configurable approval rules for expense report approval
using the Approvals Management Extensions (AMX) and Oracle Business Process
Management Suite (BPM).
BPM provides the interface to administer the approval rules. A BPM Worklist
administrator who is assigned the role of Financial Application Administrator
(FUN_FINANCIAL_APPLICATION_ADMINISTRATOR) can access the approval rules in
the BPM Worklist.
When you submit an expense report, Expenses:
1. Uses a set of approval rules is created in AMX to build the list of approvers.
2. Sends approval notifications to approvers.
3. Continues sending approval notifications to the next set of approvers in the
approval list until all approvals are complete.

Expense Approval Rules Overview
Expenses provides the following predefined rule sets to support

various approval scenarios:
• Approval by supervisor based on report amount.
• Approval by cost center owners in parallel or serial mode.
• Approval by project managers in parallel or serial mode.
• Approval by a specialist based on expense types in
parallel or serial mode.
The following information applies to predefined rule sets:

• Each rule set contains one or more approval rules.
• Each approval rule has an approval condition and a list of approvers.
• The list of approvers derived for each rule set is called a participant.
• To generate the list of approvers, each rule requires a list builder to be associated
with it.
Approval in:
• Parallel mode means that more than one person can approve the expense report at the
same time.
• Serial mode means that only one person at a time can approve the expense report.
Note: Each expense report can satisfy only one rule within a rule set. If an expense report
does not satisfy any rule in a rule set, an error occurs during the approval process.

Setting Up Expense Approval Rules
Navigate to: Set up and Maintenance > Manage Expense Approval Rules

Manage Expense Report Approval Rules Tasks
• Click on the task you want

to configure pane:
FinExmWorkflowExpenseA
pproval (11.1.11.1.0)
Navigate to: Set up and Maintenance > Manage Expense Approval Rules > Oracle BPM
Worklist
The approval rules are managed through the BPM Worklist application. If you are authorized to
manage the approval rules, you'll see an Administration link displayed in the upper right corner
of the application.
Note: When the workflow patch is applied, the version of the composite changes to a number
that is different than
11.1.11.1.0. You can also identify the active composites from the Enterprise Manager (EM)
console.

Manage Expense Report Approval Rules
Approval rules are configurable rules for expense report approval.
1. Assignees Tab 2. Switch to Vertical

2. Horizontal Layout
Layout
3. Click Diamond
1. Click the Assignees tab.
2. Click the Switch to Vertical Layout link.
3. Click the diamond icon in the left-most Expense Report rectangle.

3. Expand
2. Click
1. Go To Rule
1. Click Go to Rule.
2. Click on the ExpenseReportManagerRuleSet.
3. Expand the ExpenseReportManagerApprovalRule.

Expand
Expand the ExpenseReportManagerApprovalRule to see the current definitions for the rule.

Defining Conversion Rates
Navigate to: Setup and Maintenance > Manage Conversion Rates and Policies
A conversion rate is a ratio at which the principal unit of one currency can be converted into
another currency. After selecting a business unit, you use the Edit Conversion Rates and
Policies page to specify certain conversion rate behavior such as:
• Type of conversion rate you want to use.
• Whether to display conversion rate policies warnings
• Other important considerations.

Selecting a Business Unit
All business units accessible to the user are displayed on the

Manage Conversion Rates and Policies page.
Navigate to: Setup and Maintenance > Manage Conversion Rates and Policies
Select the Business Unit from the list on the Manage Conversion Rates and Policies page.
You can define conversion rate behavior for each business unit in your company to:
• Enforce conversion rate policies.
• Validate conversion rates that employees enter for foreign currency receipts.

Defining Conversion Rates and Conversion Rate Types
Prerequisite:
• Define conversion rates and conversion rate types in Oracle
Fusion General Ledger.
Navigate to: Set up and Maintenance > Manage Conversion Rates and Policies > Select a
Business Unit > Edit
On the Edit Conversion Rates and Policies page, enter:
• Type of conversion rate, whether Corporate or Spot.
• Check the Default conversion rate to default the conversion rate onto a newly created
expense report. This applies to cash transactions only.
• Optionally set warning and error tolerance percentages for specific currencies. The
application warns the user of a conversion rate policy violation or an error that prevents
submission of the expense report.
• Check to display conversion rate policy warnings.
Note: If you enter a conversion rate value in an expense report, or override a defaulted value,
the value you enter is validated against the current conversion rate definitions.

Specifying a Conversion Rate Policy
• In this example, the employee reports expenses on the

expense report in GBP, but is reimbursed in USD.
• The table illustrates how warning and error tolerance
percentages work with conversion rate policies.
Conversion Warning Warning Error Error

Rate Tolerance Tolerance Tolerance Tolerance
Percentage Percentage
Conversion 5% 1.579 + 10% 1.579 +
Rate Type = .07895 = .1579 =
Corporate 1.65795. 1.7369.
where 1 GBP
= 1.579
USD.
• The warning tolerance is 1.579 USD up to 1.65795. If the user enters a conversion rate
above 1.65795, a warning appears.
• The error tolerance is over 1.65795 up to 1.7369. If the user enters a conversion rate
above 1.7369, the application prevents the user from submitting the expense report.
• If the employee enters a cash amount for a meal of 25 GBP on the expense report and
indicates a conversion rate above 1.65795, a warning appears that reminds the employee
to use a conversion rate less than 1.65795. Warnings are tracked by the application. You
can view them in the Expense Items region on the Edit Expense Report page.
• If the employee enters a cash amount for a meal of 25 GBP on the expense report and
indicates a conversion rate above 1.7369, the application prevents submission of the
expense report. Consequently, errors are not tracked by the application.
Note: To prevent an employee from entering any conversion rate value over the conversion
rate definitions, enter 0 (zero) as a warning tolerance percentage and as an error tolerance
percentage.

Practice 20-4 to 20-5 Overview: Viewing a Conversion
Rate Policy Warning and Error
This demonstration and practice and cover the following topics:
• Practice 20-4: Set warning and error limits on a conversion
rate demonstration.
• Practice 20-5: Viewing a warning for a conversion rate used in
an expense report.

Define Expense Policies and Rules
Navigate to: Set up and Maintenance > Define Expense Policies and Rules.
The Define Expense Policies and Rules tasks enable companies to define their expense
policies that determine, for example:
• How expense approval rules are configured.
• How to manage expense audit list rules.
• How to manage expense audit list membership.

Managing Policies by Expense Category
To enforce company policies, you can create the following

category-based expense policies:
• Airfare
• Accommodations
• Car Rental
• Entertainment
• Meals
• Mileage
• Miscellaneous expenses
Navigate to: Setup and Maintenance > Manage Policies by Expense Category.
You can set up and enforce a variety of expense policies to help control, manage, and reduce
employee spending. The types of policies you can set up in Expenses are highlighted in the
Create Policy box.
To increase compliance with company policies:
• Managers can view policy violations in approval notifications.
• Expense reports can be automatically selected for audit when policy violations exist.

Enforcing Expense Policies
There are two types of category-based policies:

• Rate enforcement policies
– These policies enforce expenses to be within specified rate
limits.
– Examples include accommodations, airfare, meals,
miscellaneous, and entertainment policies.
• Rate calculation policies
– These policies calculate the applicable expense
reimbursement.
– An example is a mileage policy.
The following options are available to use when defining policies:

• Rate Enforcement Policies
- Rate Limits
- Rate Determinants
- Policy Enforcements
• Rate Calculation Policies
- Rates
- Rate Determinants

Common Components of Category-Based Expense
Policies
The table shows the components that category-based expense
policies have in common.
Accommodations Entertainment Meals Mileage
Rate Limit X X X
Rate Currency X X X X
Rate Determinants X X X X
Policy Enforcement X X X
A mileage policy is a rate-calculated policy, whereas the others are rate-enforced policies.

Common Components of Category-Based Expense
Policies
The table shows the components that additional category-based
expense policies have in common.
Miscellaneous Airfare Car

Rental
Rate Limit X X X
Rate Currency X X X
Rate Determinants X X X
Policy Enforcement X X X

Mandatory Setup Tasks for Category-Based Expense
Policies
• Manage Policies by Expense Category Task
– Define accommodations, entertainment, meals, mileage,
miscellaneous, airfare, and car rental policies.
– Activate policies for use.
– Assign a single policy to multiple expense types when
applicable.
• Manage Expense Report Templates Task
– Define expense types and assign policies.
– Assign expense type at:
— Parent level.
— Itemization expense type level.
Navigate to: Setup and Maintenance > Manage Policies by Expense Category.
Navigate to: Setup and Maintenance > Manage Expense Report Templates.
Define expense types and assign policies:
• When an expense type is itemized, you can assign a policy at the parent expense type
level or at the itemization expense type level. Note: You cannot assign a policy at both
levels.

Practice 20-6 to 20-9: Setting Up Expense Policies and
Rules
• Practice 20-6: How to setup a car rental expense policy and
policy violations and activate the car rental expense policy.
• Practice 20-7: How to setup an airfare expense policy and
policy violations and activate the airfare expense policy.
• Practice 20-8: How to setup a miscellaneous expense policy
and policy violations and activate the miscellaneous expense
policy.
• Practice 20-9: How to setup a meals expense policy and
policy violations and activate the meals expense policy.

Tasks for Setting Up a Mileage Policy
Mandatory setup tasks found in the Define Expense Policies and

Rules task list:
• Manage Policies by Expense Category
Optional setup tasks found in the Define Expense Policies and
Rules task list:
• Manage Expense Fields by Category
• Manage Cumulative Mileage Determinants
Define Expense Policies and Rules Task List

Navigate to: Setup and Maintenance > Define Expenses Configuration > Define Expense
Policies and Rules > Manage Policies by Expense Category.
Policies and Rules > Manage Expense Report Templates.

Setting Up a Mileage Policy
Set up a mileage expense policy:

• For each country.
• To allow employees to claim mileage reimbursement for travel
expenses incurred by using their personal vehicles for
business activities.
– In most countries, mileage reimbursement rates are determined
by the central government.
Based on government mileage regulations and your company
policy, you can set up a simple or complex mileage policy.
Navigate to: Setup and Maintenance > Manage Policies by Expense Category > Expense
Category: Mileage > Search > Create Policy: Mileage.
Mileage reimbursement is automatically calculated by the application based on your definition
of the eligibility rules, rates determinants, and add-on rates.
On the Create Policy: Mileage page you can set up a mileage expense policy by defining:
• Mileage Eligibility Rules
• Mileage Rate Determinants
• Add-On Rates

Creating a Mileage Policy
To define simple mileage rates, such as US mileage rates, select

the rate currency on the Create Mileage Policy page and enter
mileage rates in the Create Rates dialog box.
In the Create Rates Dialog box:
• Enter a description in the Description field.
• Select a country from the Country field
• Select either Multiple currencies or Single currency from the Rate Currency field.
• Select a Unit of Measure.
Click the Create Rates button.
• The page downloads a spreadsheet for entering mileage rates.
- Enter the rates in the spreadsheet.
- Upload the spreadsheet.
Expenses automatically calculates mileage reimbursement based on definition of:
• Eligibility rules
• Rate determinants
• Add-on rates

Specifying Eligibility Rules
Use the Mileage Eligibility Rules region on the Create Mileage

Policy page to specify the rules that determine whether
employees can claim mileage reimbursement for using their
personal or company provided vehicles.
In the Mileage Eligibility Rules section, enter:
• Standard mileage deduction: Deduct a specified number of miles from the total miles
traveled before applying the mileage rate calculation.
• Minimum distance for mileage eligibility: Specify the minimum number of miles required
for mileage eligibility.

Specifying Mileage Rate Determinants
Use the Mileage Rate Determinants region to specify the

determinants on which the mileage reimbursement policy is
based.
When you use a mileage rate determinant, you must set up a rate
for all others.
Note: Mileage policies can be defined with or without rate
determinants. When
If your mileage rates vary by the total distance traveled in a specific time period, then you can
define that time period and other attributes that determine the mileage rates applicable to that
time period.
In the Mileage Rate Determinants section, define:
• Mileage rates, based on an employee's grade, position, or job in the Role box.
• Define the location by selecting either geographical type or zone type locations.
• Distance Threshold: Define mileage rates for distance ranges. Mileage rates are based
on the distance traveled in a single trip or during a period of time. For example, if
traveling less than 50 miles, the rate is 20 cents a mile. For 50 miles or more, the rate is
15 cents.
• Select a Vehicle Category and Type, and a Fuel Type.
- Vehicle Category – Mileage rates are based on vehicle category, such as Company
or Private.
- Vehicle Type – Mileage rates are based on vehicle type, such as a car, motorcycle,
or van.
- Fuel Type – Mileage rates are based on fuel type, such as diesel, petrol, hybrid, or
electric.

Defining the Add-On Rates
Use the Add-On Rates region to add passenger rates and

company-specific rates for inclusion in the mileage
reimbursement policy
In the Add On Rates section, enter:
• A rate type such as rates by mileage or rates by range of passengers.
- Single rate per passenger : One mileage reimbursement rate that applies to each
passenger, regardless of the number of passengers in the vehicle
- Rates by mileage determinants: Mileage rate reimbursed per passenger varies by
multiple mileage rate determinants that you defined, such as Vehicle Category,
Vehicle Type, or Role
- Rates by range of passengers: Mileage rate reimbursed per passenger varies by
the number of passengers in the vehicle. For example, the mileage reimbursement
rate is $ .25 per mile for the first three passengers and $ .20 per mile thereafter.
- Rate by mileage determinants and range of passengers: Mileage rate reimbursed
per passenger varies by multiple mileage rate determinants that you defined and by
the number of passengers in the vehicle. For example, the mileage reimbursement
rate is $ .10 for the first two passengers traveling in a diesel car and $ .07 for the
remaining passengers. Similarly, $ .08 for the first two passengers traveling in a
hybrid car and $ .05 for the remaining passengers.

• Include the passenger name in the report.
• Calculate passenger rate by distance traveled by passenger. The rate can vary based on
how many miles the passenger travels.
• Enter the maximum number of passengers allowed for reimbursement. Use if you
reimburse employees for transporting passengers as part of a mileage-eligible trip.
• Use if you have company-specific or local criteria for reimbursing additional amounts.
Company-specific mileage rate types that you can add to the mileage reimbursement
calculation, such as $ .30 for hauling a trailer and $ .50 for driving on forest roads.

Practice 20-10: Setting up a Mileage Expense Policy

• How to set up a mileage expense.
• Defining mileage eligibility rules.
• Specifying mileage rate determinants.
• Determining mileage add-on rates.

Tasks for Setting Up an Entertainment Policy
Mandatory setup tasks found in the Define Expense Policies and

Rules task list:
• Manage Policies by Expense Category
Define Expense Policies and Rules Task List

Policies and Rules > Manage Policies by Expense Category.
Policies and Rules > Manage Expense Report Templates.

Setting Up an Entertainment Policy
An entertainment expense policy is a policy that you define to

manage entertainment and gift expenses for which employees
are reimbursed.
To comply with laws and regulations and to protect against
inappropriate expenditures that may arise when employees
entertain or give gifts to customers, you can:
• Define entertainment spending rules.
• Define entertainment policy violations.
• Capture information about event attendees
and gift recipients.
Category: Entertainment > Search > Create Policy: Entertainment.

Creating an Entertainment Policy
To comply with laws and regulations and to protect against inappropriate expenditures that
may arise when employees entertain or give gifts to customers, you can use the Create
Entertainment Policy page to:
• Define entertainment spending rules.
• Define entertainment policy violations.
• Capture information about event attendees and gift recipients.

Use the Rate Definition region to define a rate limit, rate

determinants and an enforcement policy.
Note: Attendee types is the only rate detriment for an
entertainment expense policy.
Rate Definition
• Select a type of rate limit, whether yearly, by instance, or both.
• Enter the period start month and day.
• Specify whether the expense policy rate is defined by a single currency or multiple
currencies.
Rate Determinants
Attendee types is the only rate detriment for an entertainment expense policy.
You can define different rates for different attendee types, such as:
- Public sector attendees
- Private sector attendees
Note: You can create entertainment policies for enforcing policy rates, capturing attendee
information, or both.
To capture additional company specific information, you can use the Expense Attendee
descriptive flexfield.

Policy Enforcement
In the Policy Enforcement section select how you want to enforce you expense policy:
• Reimburse upper limit amount when an expense exceeds the defined rate.
• Generate a policy violation when an expense exceeds the defined rate.
- Enter a warning policy percentage and select if you want to display a warning to the
user.
- Select Prevent report submission and enter an error tolerance percentage.

• In the Capture Attendee Information region, determine which

event attendee information to capture.
In the Capture Attendee Information:
• Select whether you require an attendee amount.
• Select whether you want to display attendee or nonemployee information.
• Click Save and Close when you entries are complete.

Practice 20-11 : Setting up an Accommodations
Expense Policy
Practice 20-13 covers the following topics:
• Setting up an accommodations policy.
• Setting up policy violations.
• Completing the accommodations rate spreadsheet.
• Associating the accommodations expense policy
with an expense type.

Setting Up Corporate Cards
To enforce compliance with your company’s corporate card usage

policies, Expenses provides the Define Credit Card Data setup.
Navigate to: Setup and Maintenance > Define Credit Card Data.
The Define Credit Card Data activities on the task list are part of the flow that uploads and
processes corporate card transactions for reimbursement to employees and card issuers.

Configuring Credit Card Data
The Manage Credit Card Data activity:

• Supports the setup required to process card transactions.
• Uploads and processes card transactions for reimbursements.
You can perform these functions in the following two work areas:
• Setup and Maintenance: For setting up corporate card programs, corporate cards, and
related details.
• Corporate Cards: Provides an overview of all corporate card processes and the actions to
be taken.

Overview of Corporate Card Transaction Processing
The Define Credit Card Data activity is part of the flow that uploads and processes corporate
card transactions for reimbursement to employees and card issuers.
Prerequisite
Before you can manage credit card data activity, you must work with your corporate card
issuers to establish connectivity and to determine the transaction file format and its delivery
frequency.
Uploading and Validating Corporate Card Transactions
After establishing a secure connection, your company can start receiving the corporate card
transaction files. Expenses loads the corporate card transaction file and validates the
transactions. If they are present in the file, Expenses loads summary and detail transactions.
All valid corporate card transactions are created as expense items and are available for
inclusion in employee expense reports.
All invalid corporate card transactions are available for corporate card administrators to review
and correct. After correction, these transactions go through the validation process again and
become available for expense reporting.

Overview of Corporate Card Transaction Processing
To set up corporate card transaction processing:

1. Create card issuers.
2. Set up corporate card program.
3. Set up download profile.
4. Define corporate cards.
5. Define download of corporate card transaction process.
Employees submit corporate card transactions in their expense reports.

The expense reports containing corporate card transactions are processed to determine the
reimbursement amounts to employees and corporate card issuers.
A separate payables document is created to pay corporate card issuers for Both Pay
transactions. Both Pay transactions are those for which:
• The employee pays the corporate card issuer for personal expenses.
• Your employer pays the corporate card issuer for business expenses.
To pay corporate card issuers for Company Pay transactions, for which your company pays the
corporate card issuer for corporate card and cash business expenses, but the employee does
not pay the corporate card issuer for personal expenses, a payables document is created for
corporate card issuers from the valid transactions.
The Manage Invoices activity creates the necessary accounting and the Manage Payments
activity processes the payables documents and pays the corporate card issuers and
employees.

Configuring Corporate Card Issuers
• A corporate card issuer is a bank that issues corporate cards.

• Set up a corporate card issuer on the Manage Corporate Card
Issuers page by entering the card issuer's name and site
information.
2.
1. 4.
3.
Navigate to: Setup and Maintenance > Define Credit Card Data > Manage Corporate Card
Issuers > Edit
To enable your company to pay a corporate card issuer:
1. Select a default payment method, whether check, Electronic, Electronic-SEPA,
Outsourced Check, or wire, in the Payment Methods region on the Edit Corporate Card
Issuer page.
2. Enter bank account information in the Address region on the Edit Corporate Card Issuer
page.
3. Associate the newly created card issuer with your company account on the Create
Company Account page.
a. Navigate to: Define Credit Card Data > Manage Corporate Card Programs > Edit >
Edit Corporate Card Program.
b. In the Company Accounts region on the Create Corporate Card Program page,
click Create to open the Create Company Account dialog box
Note: Setting up corporate card issuers is mandatory if you want to implement
corporate cards.

4. Select a payment currency and payment terms on the Create Company Account page, to
complete the payment information necessary to pay the corporate card issuer.
The card issuer can set up your company account at any of the following levels:
• Division level.
• Cost center level.
• Other level.
Corporate cards are then issued against each company account. The company can receive the
transactions by a transaction feed file that is uploaded into Expenses.

Managing Corporate Card Programs
A corporate card program is an agreement between the corporate

card issuer and your company that governs the issuance of
corporate cards to your employees and payment to the card
issuer.
Your company can have:
• A single card provider that provides corporate cards for
employees globally, which is called a global card program.
• Multiple card providers that provide corporate cards for
employees based on the region and the services needed.
Note: If you want to implement corporate cards, you must set up corporate card programs.
A corporate card program consists of one or more company accounts that represent a specific
organizational hierarchy in your company. Corporate cards are issued under each company
account.
Each company account is associated with:
• A card issuing bank, known as a card issuer.
• Payment terms.
• Other agreements.
Your company can choose to receive electronic files containing the corporate card transactions
of its employees on a regular basis. The file format and method of delivery are agreed to and
set up before your company starts processing the corporate card transaction files through
Expenses.

Configuring Corporate Card Programs
• To receive and process corporate card transaction files from a

corporate card issuer, you must set up a corporate card
program.
• To set up card programs, you must have the Corporate Card
Administrator role.
Navigate to: Setup and Maintenance > > Manage Corporate Card Programs > Create > Create
Corporate Card Program page.

Downloading Corporate Card Transaction Files
Before you can download corporate card transaction files from

the applicable server, you must set up download connection data
in Expenses, known as a download profile.
• The download profile stores connection details that you use to
access the server.
To download your company's corporate card transaction files
from the server, use the Upload Corporate Card Transaction File
program.
Navigate to: Setup and Maintenance > Manage Corporate Card Programs > Transfer
Parameters Tab > Create > Create Transfer Parameter dialog box.

Uploading Corporate Card Transactions with Encrypted
Corporate Card Numbers
Using encrypted corporate card numbers when uploading
corporate card transactions:
• Prevents fraudulent activity by employees or administrators.
• Protects your corporate cards from hackers.
Employees’ corporate card charges are included in a data file
which is sent electronically to your company. You can:
• Upload MasterCard CDF3 files and American Express
GL1025 files with encrypted corporate card numbers.
No setup or process change is necessary to receive corporate card transaction files from
MasterCard or American Express with encrypted card numbers

Practice 20-12 to 20-13: Setting Up and Creating
Corporate Card Programs
• Practice 20-12: Setting up a corporate card program.
• Practice 20-13: Creating a corporate card program.

Specifying a Corporate Card Usage Policy
• You can set up corporate card usage policies to enforce the

use of corporate cards.
• These policies increase your control of the cards by enforcing
compliance with the usage policies.
Navigate to: Setup and Maintenance > Manage Corporate Card Usage Policies

• You specify corporate card usage policies in the Edit

Corporate Card Usage Policy dialog box by initially specifying
cash limits for expense categories.
• A cash limit is a cash ceiling, above which an employee must
pay the expense by using a corporate card.
Navigate to: Setup and Maintenance > Manage Corporate Card Usage Policies > Edit > Edit
Corporate Card Usage Policy
An expense category represents a grouping of expense types. For example, the expense
category of Airfare represents the following group of expense types: International Air and
Domestic Air.

• In addition to the cash limit, you must also specify tolerance

percentages for warnings or errors as they relate to the cash
limits for the expense categories.
• The following table illustrates how the warning and error
tolerance percentages work for corporate card usage policies.
Cash Limit Warning Warning Error Error

for Tolerance Amount Tolerance Amount
Expense Percentage Percentage
Category of
Car Rental
$100 5% $100 + $5 = 10% $100 + $10 =
$105. $110.
Warning Amount: The warning tolerance is $100 up to $105. Above $105, the user sees a
warning.
Error Amount: The error tolerance is over $105 up to $110. Above $110, the application
prevents the user from submitting the expense report.
If the employee enters a cash amount over $105 for a car rental, a warning appears, if opted,
that reminds the employee to use a corporate card, instead of cash, for car rental charges over
$100. Warnings are tracked by the application. You can view them in the Expense Items region
on the Edit Expense Report page.
If the employee enters a cash amount over $110 for a car rental, the application prevents
submission of the expense report. Consequently, errors are not tracked by the application.
Note: If no cash limits are defined, you can submit cash expenses of any amount.

Practice 20-14: Setting Up a Corporate Card Usage
Policy Warning
This demonstration covers the following topic:
• Setting up a policy warning to enforce corporate card usage.

Uploading Corporate Card Transactions with Encrypted
Corporate Card Numbers
Oracle Expenses supports the following formats for encrypted
corporate card numbers:
. Corporate Card Supported Stored in Secured Corporate
Name Formats Card Store as:
MasterCard CDF3 Last four digits Last eight digits of the employee
files unmasked. number is concatenated with the
four unmasked digits.
American Express Last five digits Employee number is concatenated
GL1025 files unmasked. with the unmasked digits. The total
Last six digits corporate card number is truncated
unmasked. to 12 digits.
Last seven digits
unmasked.
You can upload MasterCard CDF3 files and American Express GL1025 files with encrypted
corporate card numbers.
Transactions without employee numbers are rejected when corporate card numbers are
encrypted. You must ask your card issuer to include an employee number for each transaction
in the file.
When encrypted American Express GL1025 files are uploaded to Expenses, they are stored as
follows:
• A new encrypted corporate card number is created by concatenating an employee ID
number with unmasked digits.
• If the new encrypted corporate card number is more than 12 digits, the last 12 digits are
used as the card number.
• If the new encrypted corporate card number is less than 12 digits, the application adds
zeros in front to total 12 digits.
• The new encrypted corporate card number is then stored against the employee.

Processing Expense Reports Containing Both Pay
The Both Pay processing creates corporate card issuer expense

reports to pay the card issuers.
• After the expense report approval process completes, Both
Pay expense reports are automatically processed according to
rules.
• Certain information from the original expense report isn’t
copied into the corporate card issuer expense report.
Processing for Both Pay Expense Reports:

All Both Pay corporate card transactions in the expense report are copied into a new expense
report and a .1 is appended to the report number.
If corporate card transactions exist for more than one card in the report, a new expense report
is created that is appended as .1, .2.
The following information from the original expense report isn't copied into the corporate card
issuer expense report:
• Project and task information
• Tax classification codes
• Accounting distributions
The accounting distributions for the corporate card issuer expense report are created against
the expense clearing account defined for the company accounts of the corporate card
transactions.
The original expense report and the newly created corporate card issuer expense report are
now ready for reimbursement processing.

Payment Options for Corporate Transactions
The following table describes payment options for corporate card

transactions in expense reports and the reimbursement
processes that are run to generate payment requests.

Payment Options for Corporate Transactions
The following table describes additional payment options for

corporate card transactions in expense reports and the
reimbursement processes that are run to generate payment
requests.

Processing Corporate Issuer Payment Requests for
Company Pay Transactions
The Create Corporate Card Issuer Payment Requests process:
• Generates payment requests for corporate card issuers when
there are corporate cards that use the Company Pay payment
option.
• Runs only when the Company Pay payment option is used.
• Allows you to pay the corporate card provider at any time;
payment is not dependant on expense submission.

Creating Corporate Card Issuer Payment Requests
Transactions
The following diagram shows the Create Corporate Card Issuer
Payment Requests process.
Create Corporate Card Issuer Payment Requests Process

• Create Corporate Card Issuer Payment Requests process generates payment requests
to pay corporate card issuers when corporate cards use the Company Pay payment
option.
• Process Expense Reimbursement process generates payment requests to pay
employees when corporate cards use the Company Pay Plus Cash payment option.

Settings for Corporate Card Issuer Payment Requests
The following table describes the settings that impact expense

payment requests:
Setting Description
Employee Liability Account Set up as a system option on the
Edit Expenses System Options
page.
Corporate Card Issuer Payment Set up in Payables.
Liability Account
Expense Clearing Account and Set up in the Create Company
Payment Option Account dialog box. Note: See
Configuring Corporate Card Issuers
in this chapter.

Processing Corporate Card Issuer Payment Requests
for Company Pay Transactions
You can use the Create Corporate Card Issuer Payment
Requests process to:
• Populate Payables Open Invoice Interface tables.
• Create corporate card issuer payment requests.
• Handle processed and rejected expense reports.

Populating Payables Open Invoice Interface Tables
For each corporate card, the Create Corporate Card Issuer

Payment Requests process creates:
• One invoice header record in the Payables Open Invoice
Interface table.
• Child lines for all corporate card transactions for the corporate
card.
The accounting distributions for the transactions are created
using the Expense Clearing Account for the corporate card.
First Step: Populate Payables Open Invoice Interface tables

The first step in the processing the corporate card issuer payment requests for company pay
transactions is populating the Payables Open Interface tables.
Note: An invoice is generated for each invoice.

Creating Corporate Card Issuer Payment Requests
• The Create Corporate Card Issuer Payment Requests

process invokes the Import Payables Invoices process in
Payables.
• Payables then creates payment requests using the
information in the Payables Open Invoice Interface table.
Note: Tax processing isn't applicable for corporate card issuer
payment requests.
Second Step: Creating corporate card issuer payment requests

The second step in processing the corporate card issuer payment requests for company pay
transactions is for Payables to create payment requests.

Handling Processed and Rejected Expense Reports
• During payment request creation, Payables rejects records in

the Payables Open Invoice Interface table if errors exist.
• The Create Corporate Card Issuer Payment Requests
process removes any rejected records from the interface
table.
• You must then reprocess the corporate card transactions for
reimbursement.
• Finally, all expense items corresponding to the corporate card
transactions, for which payment requests are created, are
updated with a corresponding payment request identifier.
Third Step: Handle processed and rejected expense reports

The third step in processing the corporate card issuer payment requests for company pay
transactions handles processed and rejected expense reports.
During payment request creation, Payables rejects records in the Payables Open Invoice
Interface table if certain types of errors exist such as:
• Dates in closed accounting periods.
• Invalid payment methods

Individual Pay
The following actions occur with the individual pay payment option:
• Set up company account and download data file _

Individual Pay Payment Option
The Individual Pay payment option is simpler than Both Pay or

Company Pay.
• The employee pays the corporate card issuer for both
business and personal expenses.
• When the employee creates an expense report, both business
and personal transactions are reported.
• The employee is, however, reimbursed by your employer for
the corporate card business expenses.

Individual Pay Payment Option
The following actions occur with the individual pay payment

option.
Action Description
Set up company Obtain the corporate card transactions data file
account and from your corporate card provider.
download data
file.
Upload data file Upload and validate your corporate card
into expenses. transactions file.
Create and submit
expense report.

Accounting for Corporate Card Transactions
Accounting entries that you created vary depending on which

payment option is used. To illustrate the accounting entries,
assume that you create an expense report with these details:
• Cash and Other Expenses: $500
• Corporate Card Business Expenses: $650
• Corporate Card Personal Expenses: $299
• Corporate Card Transactions from Corporate Card Provider:
$949
(the sum of the business and personal expenses)
.
Also assume that there are no employee advances applied to the expense report.

Accounting for Corporate Card Transactions
This table summarizes who will be invoiced based on the

payment scenario:
Payment Amount Due Amount Due
Scenario Report Total Employee Corporate Card
Company
Individual Pay 1,150.00 1,150.00 0.00
Both Pay 1,150.00 500.00 650.00
Company Pay 1,150.00 201.00 949.00
Note: The Report total only includes cash, other expenses, and
corporate card business.
When the employee's invoice is first exported into Payables, the invoice amount at the header
level will equal the Amount Due Employee as noted in the table above.

Accounting for Corporate Card Transactions: Individual
Pay
Account Debit Credit

Out of Pocket Business Expenses 500.00
Corporate card business expenses 650.00
Employee Liability 1,150.000.00
This table describes the complete accounting for all invoices created (note that all lines shown
as expense lines, whether business or personal, represent the invoice distribution lines for the
invoices).

Accounting for Corporate Card Transactions: Both Pay
User Invoice and Corporate Card Provider Invoice:

User Invoice
Cash and Other Expenses 500.00
Liability (due to employee) 500.00
Corporate Card Expenses 650.00
Expense Clearing Account 650.00
Corporate Card Provider
Invoice
Expense Clearing Account 650.00
Liability (due to corporate card 650.00
provider)
The user invoice contains accounting distributions for both the Cash and Other Expenses and
Credit Card Expenses. The credit card provider invoice contains a single accounting
distribution for all credit card expenses.

Accounting for Corporate Card Transactions: Company
Pay
his is an example of an invoice due to a corporate card provider.
Note that all corporate card transactions are always charged to
the Expenses Clearing account.
Expense Clearing 949.00

Account
Liability (due to 949.00
corporate card provider)

Accounting for Corporate Card Transactions: Company
Pay
This table summarizes the user invoice based on the payment
scenario:
Out of pocket business expense 500.00
Corporate card business expense 650.00
Corporate card business Expenses 650.00

Clearing a/c offset
Corporate card business Expenses 299.00
Clearing a/c offset
Liability (due to employee) 201.00
As outlined above, when the Company Pay payment scenario is used, there are two different
points in the proves when accounting entries are created in relation to the clearing account.
The first accounting entry is created when the invoice due to the corporate card provider is
created.
The second accounting entry is created once a user submits their expense report and it is
exported into Payables by running Expense Report Export. The first four lines in the accounting
entry are the actual lines that you will see in the invoice Distributions window in Payables for
the invoice due to the employee.

Setting Up Receipt Management Policies
Receipt management policies:

• Ensure all employees submit their required expense report
receipts.
• Specify receipt requirements for expense types.
• Create receipt and notification rules to address issues.
• Assign receipt and notification rules to each business unit to
reflect your business policies.
When you set up receipt and notification rules according to your company's policies,
employees are not reimbursed for expense report expenditures until missing or overdue
original or imaged receipts are submitted.
Receipt management policies create receipt and notification rules to determine:
• When to send notifications to employees.
• When to place payment holds on expense reports due to missing or overdue receipts.

Specifying Receipt Management Policies
Receipt rules enable you to specify when a receipt is required.

You can specify receipt rules at all, any, or none of the following
levels:
• Expense type level.
• Template level.
• Organizational level.

Specifying Receipt Management
Receipt management ensures that all required expense report

receipts are submitted by employees.
Create receipt and notification rules to determine:
• When to send notifications to employees.
• When to place payment holds on expense reports due to
missing or overdue receipts.
Specify specific receipt parameters when you set up receipt
management rules.
Navigate to: Setup and Maintenance > Manage Expense Report Receipt and Notification Rules
> Create > Create Expense Report Receipt and Notification Rule.
You can assign receipt and notification rules to each business unit in your company to reflect
your business policies. When you set up receipt and notification rules according to your
company's policies, employees aren't reimbursed for expenditures until missing or overdue
original or imaged receipts are submitted.
When you set up receipt management rules for your company, you can specify the following:
• Type of receipts
• Granularity of receipt requirements
• Receipt requirements

Specifying Type of Receipts
Specify the type of receipt your company requires for expense

report submission:
• Original receipts.
• Imaged receipts.
• Both.
• None.
Note: Your selection is applicable to all expense types in the
applicable business unit. You cannot set up varying receipt types
by expense types.
First Receipt Management Decision
The first and most important receipt management decision is to specify the type of receipt your
company requires for expense report submission. You can require:
• Imaged receipts: Expense receipts that have been converted to a digital image by a
camera, scanner, or fax machine so they can be attached to the online expense report.
Note: If you specify that imaged receipts are required, you must also specify the point in
the expense report process at which their attachment to the expense report is required.
• Original receipts: Paper receipts that employees receive after making a purchase by
cash, check, or corporate card.

Granularity of Receipt Requirements
• The table indicates the sequence in which Expenses

processes receipt and notification rules. It starts with the
lowest level and moves to the highest level.
Sequence in Which Expenses Level
Processes Receipt and
Notification Rules
Lowest level Expense Type
Middle level Template
Highest level Organization
Second Receipt Management Decision

The second receipt management decision is to specify the level on which you want to define
receipt rules. You can specify receipt rules at all, any, or none of the following levels.
The table indicates the sequence in which Expenses processes receipt and notification rules. It
starts with the lowest level and moves to the highest level.
Organizational Level
Note: If you don't select a required type of receipt on the Create Receipt and Notification Rule
page, then Expenses selects Originals only as the default type of receipt required.
> Create > Create Expense Report Receipt and Notification Rule
Template Level
Navigate to: Setup and Maintenance > Manage Expense Report Templates > Create > Create
Expense Report Template > Receipt Requirement tab
Expense Level
Navigate to: Setup and Maintenance > Manage Expense Report Template > Create > Create
Expense Report Template > Expense Types > Edit Expense Type page

Specifying Receipt Requirements
Specify receipt requirements by defining them on the Receipt

Requirement tabs of the Create Expense Template page or the
Edit Expense Type page.
Third Receipt Management Decision

The third receipt management decision is to specify receipt requirements. You can define them
on the Receipt Requirement tab or the Expenses Types tab on the Manage Expense Report
Template page.
For the Template level navigate to: Setup and Maintenance > Manage Expense Report
Template > Create > Receipt Requirement tab.
For the Expense level navigate to: Setup and Maintenance > Manage Expense Report
Template > Create > Expense Types tab.
You can specify receipt requirements for:
• Cash expense lines
• Corporate card expense lines
• Negative expense lines
• Disallowance of missing receipts
• Display of missing receipt warning

Creating Expense Report Receipt and Notification Rule
Create Expense Report Receipt and Notification Rule page.
Define the type of expense

report receipts required.
When imaged receipts

must be attached to the
expense report by the
employee.
When missing and overdue

expense report receipts are
considered overdue.
When expense report

payments should be placed
on hold due to pending
receipts.
Enable expense report receipt and notification functionality by setting up receipt and
notification rules on the Create Expense Report Receipt and Notification Rule page.

Practice 20-15: Creating Receipt and Notification Rules

• Creating an expense report receipt and notification rule.

Setting Up Travel
Navigate to: Setup and Maintenance > Financials > Define Travel>
From Define Travel, you can access the following tasks:
• Manage Travel Partner Integrations
• Manage Travel Itinerary Validation Rules
• Manage Travel Policy Lookup Types

Integrating with GetThere
Your system administrator can integrate with the travel partner,

GetThere, with Expenses so employees can:
• Book travel easily.
• Connect to the GetThere booking application from Expenses.
• Download itinerary data from GetThere based on setup.
– Your travel administrator corrects itineraries.
The integration helps the Expenses application:
• Create or update trips after itinerary download.
• Create expense reports from trip data.
GetThere is an online booking tool that provides travel reservations to corporations.

Benefits of Integrating with Travel Partners
You can integrate with your travel partner to:

• Improve employee travel booking experience.
• Provide visibility to travel actions and patterns.
• Facilitate reporting on noncompliant travel.
• Make cost-effective travel decisions.
• Assist with travel supplier negotiations.

Benefits of Setting Up Travel Integration
When you enable travel integration:

• Itinerary data is imported into Expenses.
• Trips are automatically created for valid itineraries.
• Updates to itineraries are imported into Expenses.
• Travel administrator corrects itineraries with validation errors.
• Employees manage their trips.
• Expense reports are automatically created.
• Approvers and auditors can view policy violations.
When you enable travel integration, the following actions can occur:
• Itinerary data is imported into Expenses from your travel partner and trips are
automatically created for valid itineraries.
• Updates to itineraries are imported into Expenses from your travel partner until the
employee takes the trip.
• Expense reports are automatically created and appear in the Expenses work area.
• Approvers and auditors can view the difference between booked and actual travel
expenses, booking policy violations, and justifications provided by users.

Setting Up Travel Integration
On the Manage Expenses System Options page, set the Enable

Travel option to Yes.
Set to Yes
You can enable travel integration for the entire company or for selected business units.
If your business unit has not enabled travel integration, you will not see the Travel tab in the
Expenses work area.

Configuring Travel Partner and Travel Sites
On the Manage Travel Partner Integration page:

• Specify connection information to GetThere, such as user
name, password, and super site name for itinerary import.
• Specify travel sites for your company as defined in GetThere’s
system.
• Specify booking site links so employees can access a booking
site from the Expenses work area.
• Associate your employees with booking sites.

Scheduling the Import Travel Itinerary Process
To view trip data in the Expenses work area, you must download
itinerary data into Expenses.
• You can schedule the Import Travel Itineraries process to
automatically download the itinerary data periodically.
– This process creates or updates trips based on the downloaded
itineraries and makes them visible to employees.

Assigning a Travel Administrator
A travel administrator monitors imported itineraries and resolves

itinerary data errors.
To provide the travel administrator with access to the Travel
Administration work area:
• Assign him or her the job role of Travel Manager.
Navigation: Setup and Maintenance > Expenses > Manage Users

Setting Up Optional Travel Tasks
You can optionally perform the following tasks to improve travel

data quality and make travel expense entry easier for employees:
• Set up automatic creation of trip-based expense reports.
• Define itinerary validation rules.
• Implement centrally billed travel cards.

Enabling Automatic Creation of Trip-Based Expense
Reports
Schedule the Create Trip Expense Report process to
automatically create expense reports from trips. The process:
• Creates expense reports from corporate card transactions that
match those transacted over the trip's duration.
Each employee's preference, as specified on the Expenses
Preferences page, determines when the expense report is
created.
Navigation: Navigator > Tools > Scheduled Processes > Schedule New Process > Job >
Name: Create Trip Expense Report.
When automatic creation of expense reports is enabled, employees can choose to generate
expense reports:
• When their trips are completed.
• When they receive the first corporate card transaction.
Employees can also choose to manually initiate creation of expense reports.
.

Setting Up Centrally-Billed Travel Cards
Expenses supports centrally-billed travel cards with American

Express. With centrally-billed travel cards:
• Your company is issued one corporate travel card.
• Employees typically charge high value travel charges, such as
airfare, to the corporate travel card.
• Expenses are not reimbursed to employees, but instead paid
directly to the card issuer.
.
Your company can define centrally-billed travel cards and load these corporate card
transactions so employees can submit them in their expense reports.

Setting Up Travel Itinerary Validation Rules
Using travel validation rules you can:

• Set up validation rules on the Manage Travel Itinerary
Validation Rules page.
• Enable validations that act on itineraries when you import
them.
• Enforce validation rules by assigning them to a travel partner
or to a specific booking site.
Your reliance on accurate travel data to make strategic company-wide travel decisions is
essential to:
• Improve the accuracy of travel data.
• Provide visibility of policy violations to approvers and auditors.
There are two types of itinerary validation rules:
• Validations that always occur.
• Validations that you can enable.

Setting Up Centrally-Billed Travel Cards
To set up centrally-billed travel cards on the Create Corporate

Card page, select the following options from choice lists:
Navigate to: Setup and Maintenance > Manage Corporate Cards.

Third-Party Expense Reimbursements
Expense reports can be reimbursed through:

• Oracle Fusion Payables
• Any legacy or third-party application using the third-party
expense reimbursement process.
A third-party application may be a legacy application within your
company or a supplier.

Processing Third-Party Expense Reimbursements
The following table describes the first two steps in the flow of
expense report data when you use a legacy or third-party
expense report reimbursement application.

The following diagram illustrates how third-party expense

Reimbursements are processed:
• Expense report data exported from Oracle Universal Content

Management (UCM) to a legacy or third-party application.
• Legacy or third-party application issues reimbursement
payments.
• Reimbursement payment data imported back to Expenses.
.

The following table describes additional steps in the flow of

expense report data when you use a legacy or third-party
expense report reimbursement application.

Setting Up Third-Party\ Expense Reimbursements
To set up third-party payments:

• Navigate to the Manage Expenses System Options page.
• Select Third Party from the Pay Expenses Reports Through
choice list.
Pay Expenses
Reports Through
Navigate to: Setup and Maintenance > Manage Expenses System Options.

Exporting Data from Expenses to a Third-Party
Application
To automatically export the expense report data from Expenses
to your legacy or third-party application in XML format, schedule
the following processes:
• Process Expense Reimbursements and Cash Advances to
process expense reports.
• Create Card Issuer Invoices if your company uses
corporate cards with company pay liability.
After your legacy or third-party application issues expense report reimbursements:

• Schedule the Update Expense Report Status process to update the status of expense
reports in Expenses as paid and to update the cash advance statuses.

Using Mobile Devices to Increase Productivity
The Expenses mobile applications for Apple and Android mobile

phones increases your productivity because you can use them to:
• Enter expenses quickly anytime, anywhere.
• Charge expenses to projects and cost centers.
• Download corporate card transactions for review and update.
• Submit expense reports directly from mobile devices.
• Approve expense reports.

Use your Apple or Android mobile device to:

• Create expenses from voice recordings, receipt images, and
calendar entries.
• Charge expenses to project and cost centers.
• Enter mileage expenses.
• Download corporate card transactions, update itemizations,
and tag personal transactions.
You can also use your Apple or Android mobile device to:
• Add event attendees from calendar events and your address book or create new
attendees.
• Review automatically matched items for elimination of duplicates.
• Submit expense reports with cash expenses and corporate card transactions.
Before submitting expense reports to Expenses from your mobile device, they are validated for
policy compliance and required information. Validated expense reports can then be submitted
to the web-based application for approval.
Invalid expense reports are stored as saved reports on the mobile device and users can take
corrective action in Expenses.

You can also use your mobile device to approve expense reports:
• Review expenses, receipts, and itemizations.
• Review policy violations.
• Approve, reject, or request more information.
Note: The Expenses mobile device application is currently available for the iPhone and Android
phones and the iPad.

Setting Up the Mobile Device Application
No additional setup is required to use the Oracle Fusion

Expenses mobile applications. For both the mobile applications
and the web-based application:
• The same setup data is used.
• The same security setup is used.

Enabling Expenses Mobile Application
1. Using your mobile device, download and install the latest

Expenses mobile application from the Apple’s App Store at
http://www.apple.com/iphone/from-the-app-store/ or from
Google Play at http://play.google.com
2. In the Settings screen enter information for these fields:
– In the Host URL field, enter the URL provided by your
administrator.
– In the User Name and Password fields, enter the same user
name and password that you use to access the Expenses web-
based application.
3. On connection, you are asked to accept an agreement.
4. After accepting the agreement, you are presented with the
Expenses mobile application springboard.
Obtain the Host URL:

• If your company has a specific URL for the Oracle Fusion Financials domain, then the
host URL is the one for the Financials domain.
Example URL: https://fusion-fin.mycompany.com:7002.
• If your company has a single URL for the entire Oracle Fusion Applications, then the URL
is the one for Fusion Applications.
Example URL: https://fusion.mycompany.com. The server must use an https connection.
Note: If your company does not enable Fusion applications outside its firewall, you must
connect to your company's network by using a Virtual Private Network (VPN) for the initial
connection and to upload expense items to Expenses web-based application. For
convenience, you can enter expenses on the mobile device when you are not connected to
VPN.

Using the Mileage Tracker
You can use the mobile Expenses application to track your travel
and automatically create a mileage expense. To start tracking
mileage:
Click the mileage tracker Click the stop button when

icon on the springboard your trip is complete.
grid.
1. 2.
The mileage tracker:

• Keeps track of your route.
• Automatically pauses when you stop.
• Captures the start and end locations.
• Calculates the mileage when you click the stop button.
You can add additional details according to your business and travel requirements.
This mileage tracker is automatically available when you download the latest Oracle Fusion
Expenses application from Apple’s AppStore at http://www.apple.com/iphone/from-the-app-
store/ or from Google Play at http://play.google.com.

Submitting an Expense Report from a Mobile Device
When you submit your eligible expense items from a mobile

device:
• Your expense report is passed to the Expenses web-based
application.
• The Expenses web-based application saves your expense
report and invokes the expense report validations.
If your expense report passes all validations, it is:

• Submitted to approvers in your approval hierarchy.
• Assigned a status of Pending Manager Approval.
If your expense report fails validations due to missing information, it:
• Remains as a Saved report in the Expenses web-based application.
You must then correct the errors and resubmit the expense report in the Expenses web-based
application.

Mobile Expense Lines That Cannot Be Included in an
Expense Report
To submit an expense report from your mobile device:
• Click the Submit icon on the Springboard.
Only eligible expense lines are displayed in the Submit Expenses
screen.
The following expense items are ineligible for inclusion in an
expense report because they are missing:
• Descriptions when a description is required by the applicable
business unit.
• Justifications.
• Project and task information for a project user when project
information is required.
To make ineligible expenses eligible, you must provide any missing information. You can,
however, upload the ineligible expenses to the Expenses web-based application without
providing the missing information.

Mobile Expense Report with a Status of Saved
When you submit an expense report from a mobile device with

invalid or missing information, the Expenses web-based
application saves the expense report with a status of Saved if:
• The expense type requires itemization.
• The expense type selected for the expense is not applicable
for the date selected.
• The project assigned to Expenses is invalid.
• Tax fields are required for expense items.
Additional Conditions
If you submit an expense report from a mobile device with invalid or missing information, the
Expenses web-based application saves the expense report with a status of Saved under the
following additional conditions:
• The expense report violates a policy that is above the allowed limit and company policy
prevents submission of an expense report if a policy violation occurs.
• The company policy prevents submission of the expense report if required imaged
receipts are not attached during submission.
• The cost center for one or more expenses does not exist in the Expenses web-based
application and the cost center account cannot be created automatically.
• The descriptive flex field is required for expense items.
• Category-specific fields are required for expense items.

Mobile Expense Report with a Status of Pending
Manager Approval
If the expense report that you submit from a mobile device passes
all validations:
• The Expenses web-based application submits the report to
approvers in your approval hierarchy.
• The expense report is assigned a status of Pending Manager
Approval.

Summary
• Explain Expense Policies and Rules
– Configure Expense Templates
– Discuss Expense System Options
– Enforce Expense Policies
– Set up Receipt Management
• Configure Corporate Card Programs
• Understand Travel Integration
• Integrate with External Systems for
Expense Reimbursement
• Configure Mobile Devices

Oracle Fusion Financials Student Guide Part2 PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Oracle Fusion Financials Student Guide Part2 PDF

Uploaded by

Copyright:

Available Formats

Oracle Financials Cloud:

Financials Implementation for R11

Student Guide - Volume II

Restricted Rights Notice

If this documentation is delivered to the United States Government or anyone using

U.S. GOVERNMENT RIGHTS

1 Introduction to Oracle Financials Cloud Implementation

2 Introducing Oracle Fusion Navigation

3 Introducing Functional Setup Manager

5 Discussing the Vision Story and Common Applications

6 Configuring Enterprise Structures

7 Configuring General Ledger Components

8 Configuring Oracle Fusion Intercompany

9 Configuring Financial Reporting

10 Configuring Business Units and Reference Data Sets

11 Configuring Oracle Fusion Tax

12 Configuring Subledger Accounting

13 Configuring Oracle Fusion Payables

14 Configuring Oracle Fusion Payments: Payables

15 Configuring Oracle Fusion Receivables

16 Configuring Oracle Payments: Receivables

17 Configuring Oracle Fusion Cash Management

18 Configuring Oracle Fusion Advanced Collections

Copyright © 2016, Oracle and/or its affiliates. All rights reserved.

After completing this lesson, you should be able to:

Copyright © 2016, Oracle and/or its affiliates. All rights reserved.

Oracle Financials Cloud: Financials Implementation for R11 11 - 2

Copyright © 2016, Oracle and/or its affiliates. All rights reserved.

Oracle Financials Cloud: Financials Implementation for R11 11 - 3

Oracle Financials Cloud: Financials Implementation for R11 11 - 4

Copyright © 2016, Oracle and/or its affiliates. All rights reserved.

Oracle Financials Cloud: Financials Implementation for R11 11 - 5

Copyright © 2016, Oracle and/or its affiliates. All rights reserved.

Oracle Financials Cloud: Financials Implementation for R11 11 - 6

The primary mechanism for rapid implementation is for you to

Copyright © 2016, Oracle and/or its affiliates. All rights reserved.

Oracle Financials Cloud: Financials Implementation for R11 11 - 7

• Use the following workbooks to streamline the organization

Tax Configuration Workbook Tax Implementation Workbook

Copyright © 2016, Oracle and/or its affiliates. All rights reserved.

Oracle Financials Cloud: Financials Implementation for R11 11 - 8

Use the tax configuration workbook to upload your common and

Copyright © 2016, Oracle and/or its affiliates. All rights reserved.

Oracle Financials Cloud: Financials Implementation for R11 11 - 9

Workbook Name Worksheets

Copyright © 2016, Oracle and/or its affiliates. All rights reserved.

The Implementation Workbook includes these new release 11 worksheets:

Oracle Financials Cloud: Financials Implementation for R11 11 - 10

Oracle Financials Cloud: Financials Implementation for R11 11 - 11

Task Spreadsheet to Use

Copyright © 2016, Oracle and/or its affiliates. All rights reserved.

Oracle Financials Cloud: Financials Implementation for R11 11 - 12

Copyright © 2016, Oracle and/or its affiliates. All rights reserved.

Navigate to: Setup and Maintenance > Define Tax Configuration.

Oracle Financials Cloud: Financials Implementation for R11 11 - 13

Oracle Financials Cloud: Financials Implementation for R11 11 - 14

Copyright © 2016, Oracle and/or its affiliates. All rights reserved.

Oracle Financials Cloud: Financials Implementation for R11 11 - 15

Copyright © 2016, Oracle and/or its affiliates. All rights reserved.

Oracle Financials Cloud: Financials Implementation for R11 11 - 16

Oracle Financials Cloud: Financials Implementation for R11 11 - 17

Copyright © 2016, Oracle and/or its affiliates. All rights reserved.

To determine how to set up your tax configuration, you must: