Invoice Approval Workflow

Michael V. MilanoOracle Corporation

Abstract

Improve your understanding of invoiceapproval workflow. This paper provides anoverview of invoice approval workflow.

Scope

I. Review of AP SetupII. Overview of Approval WorkflowIII. Overview of the Invoice ApprovalIV. Sample Test Case

I. SETUP

Install and setup Oracle ApprovalsManagement (OAM). You must apply APpatchset I and 2198768, 2220334, 2228792,2257526, 2271164 and 2274701.

Note: OAM and its setup are supported byAccounts Payables Support. OAM setup willbe covered in an upcoming white paper.

The setup in Accounts Payable is fairlystraightforward. Navigate to Payables Options.In the ‘Invoice’ tab, enable ‘Use InvoiceApproval Workflow’. There are two additionaloptions, ‘Allow Force Approval’ and ‘RequireValidation Before Approval’. ‘Allow ForceApproval’ allows the Accounts Payable user toforce the invoice to an approved state. The‘Require Validation Before Approval’ optionrequires that the ‘old’ approval process (nowcalled validation) must be run prior to theinvoice approval workflow. Validation as it isnow called, is still the process that will placeholds on invoices and automatically create taxdistributions and invoice price variancecalculations. The new invoice approval

workflow allows for additional constraints tobe applied to an invoice before it’s approvedfor payment. It is not meant to replacevalidation. It is meant to enhance the approvalprocess.

II. OVERVIEW OF APPROVALWORKFLOW

The Invoice Approval Workflow automatesyour invoice approval process. Based on rulesyou define, the workflow determines if aninvoice needs approval, who the approvers are,and in what order approvers should approvepayment of the invoice. The workflow thensequentially asks each approver in the approvallist to approve invoices online. For example,you can define a rule so invoices over$100,000 require CFO approval and then CEOapproval.

If you use Invoice Approval Workflow, thenevery invoice that requires approval must beapproved before you can pay it. Payablesindicates that an invoice requires approval bysetting the value in the Approvalstatus field in the Invoices window toRequired.

When you use this feature, all invoices requireapproval, with the following exceptions.Payables sets the Approval status of thefollowing invoices to Not Required:• expense reports imported through the

Payables Expense Report Import Program(because these expense reports havealready been through an approval process)

• recurring invoices if the recurring invoicetemplate did not have the ApprovalWorkflow Required option enabled

(because recurring invoices are oftenapproved in advance)

• invoices that existed before you enabledthe feature

• Invoices that completed the InvoiceApproval Workflow process and theInvoice Approval Workflow processdetermined that according to the rules setup in Oracle Approvals Management thatno one needs to approve the invoice.

You can set up your system to request andreceive approval through the approver’s e–mail, through the approver’s Oracle WorkflowNotifications Workflow web page, or both.

Approvers can approve or reject the invoice.• If an approver approves the invoice, then

the invoice goes to the next person in theapprover list until all required peopleapprove the invoice.

• If an approver rejects the invoice, then theworkflow program ends.

• If an approver does not respond within thetime you specify, then Workflow willrequest approval from that person’smanager.

If an approver rejects an invoice, then you canperform one of the following actions from theInvoice Actions window:• Use the Force Approval option to manually

approve the invoice (if enabled in PayablesOptions).

• Use the Initiate Approval option toresubmit the invoice to the InvoiceApproval Workflow after correcting anyissue that caused the approver to reject theinvoice

• Use the Cancel Invoice option to cancel theinvoice

Suggestion: We recommend that you schedulethe Invoice Approval Status Report to run

nightly so you can closely monitor yourrejected invoices.

Note: If you have ‘Allow Force Approval’enabled, it will also override the ‘RequireValidation Before Approval’.

You can review the approval status of aninvoice that has started the Invoice ApprovalWorkflow in the following ways:• Invoice Approval History window.• Invoice Approval Status Report.

Invoice Selection CriteriaYou can submit the Invoice ApprovalWorkflow for an invoice either from theInvoice Actions window, or from the SubmitRequests window. An invoice must meet all ofthe following criteria to be processed:• If the Require Validation Before Approval

Payables option is enabled, then theinvoice must be validated.

• The Approval field value in the Invoiceswindow must be:

1. Required, if you submit the workflowprogram from the Submit Requestswindow.

2. Anything except Initiated or ManuallyApproved, if you submit the workflowprogram from the Invoice Actions window.

3. The invoice amount must equal thedistribution total.

4. The Ready for Approval check box in theInvoices window must be enabled.

Approval and ValidationThe Invoice Validation process and InvoiceApproval Workflow Program can be submittedin any order for an invoice, unless the RequireValidation Before Approval Payables option isenabled. You might want to enable this optionif you enter invoices that require the InvoiceValidation process to create tax distributionsfor you. If your approvers need to review tax

details before they approve an invoice, then werecommend that you enable this option.

Handling Exceptions• If the workflow program fails, then the

workflow sends an e–mail or workflownotification (or both) to a designatedperson such as your system administrator.This person can abort the workflowprogram, retry the failed workflow activity,or resolve the problem that caused the errorto occur.

• If you want to override the InvoiceApproval Workflow for an invoice, aPayables user can force approve it. Youmight want to use force approval if there isa problem with the Workflow program andyou need to pay an invoice immediately.To force approve an invoice, select it in theInvoices window, then in the InvoiceActions window choose the ForceApproval option. This stops the workflowprogram for the invoice and sets theapproval status to Manually Approved.This invoice status cannot be updated, evenif the pending approver subsequentlyapproves or rejects the invoice. Also, youcannot resubmit the Invoice ApprovalWorkflow for an invoice that has a statusof Manually Approved.

• If you want to resubmit an invoice forapproval then you can resubmit InvoiceApproval Workflow from the InvoiceActions window. You can resubmit theinvoice if the approval status is Required,Not Required, Rejected, or Approved.Because the workflow program selectsonly invoices that require approval andhave never started the approval process(approval status is Required), you can’t usethe Submit Request window to resubmitapproval for an invoice.

• You cannot delete an invoice if the InvoiceApproval Workflow is processing or hasprocessed it. (bug 2386392).

III. WORKFLOW PROCESS FLOW

The first step in the Invoice ApprovalWorkflow is to enter and invoice in Payables(Invoices Entry Invoices).

Once the invoice has been entered, select the‘Actions’ button from the invoice workbench.Select the ‘Initiate Approval’ option. Click‘OK’. The approval field should now display‘Initiated’. Note the original value of this fieldwhen the invoice was entered was ‘Required’.

Once the invoice approval is ‘Initiated’, arequest is placed in the WF_DEFERREDqueue. You can log into the self-service webapplication ‘Workflow Administrator WebApplications responsibility. Select ‘EventQueue Summary. Select WF_DEFERREDQueue.

In the System Administrator responsibility, runthe ‘Workflow Agent Listener’ (RequestsRun). This launches the Invoice ApprovalWorkflow and moves the request from theWF_DEFERRED queue.

The Workflow checks to see if the invoice ismatched to a purchase order. This activity isdisabled by default because a constant value of‘No’ is seeded for the Exclude PO MatchedInvoices attribute in workflow. When thisactivity is enabled, if all distributions on theinvoice are purchase order matched, then thisactivity sets the Invoice Approval status to NotRequired.

Note: To enable this function, bring up theworkflow builder. Select attributes. Open theattribute ‘Exclude PO Matched Invoices’. Setthe default value to ‘Yes’. Save the changes tothe database.

Workflow calls OAM to get the identity of thetransaction’s first approver. OAM compiles alist of all the approver’s who need to approve atransaction. OAM sends each approver anotification to approve the transaction.

If no first approver is found, the workflowends and the approval field is update to ‘NotRequired’.

If the first approver is found, a notification issent to the approver. The approver can eitherapprove or reject the transaction.

If rejected, an update is made to ApprovalHistory and the approval field changes to‘Rejected’.

If approved, an update is made to ApprovalHistory and workflow calls OAM to get thenext approver in the approval list.

If no other approvers exist, then the workflowends and the approval field is updated to‘Approved.

If the next approver is found, then thisapprover is sent a notification to approve orreject the transaction. They’re actions areupdated in Approval History. This continuesuntil there are no approvers in the approval listwho have not been notified. If all approversapprove the transaction, the approval field ischanged to ‘Approved’.

IV. SAMPLE TEST CASE

Log into the self-service web application’sAME Application Administratorresponsibility. Select Approvals. Click ‘AddRule’ button. Enter a description. Do not enterany constraints. Enter a condition (i.e.0USD<=SUPPLIER_INVOICE_AMOUNT<=1000USD). Enter approval (i.e. RequirePre-Approval From Approval Group). Enter an

approval type (i.e. group approvals beforechain of authority). Start date is today’s date.End date is NULL.

Click on the Groups tab. Enter a name anddescription for the group (i.e. Test ApprovalGroup, Test Approval Group respectively).Add a member to the group (i.e. MichaelMilano, James Norton).

In Accounts Payables, enter and invoice withan amount between 0 and 1000 USD (this iswithin the condition defined with the rulecreated in OAM).

Click the ‘Actions’ button on the invoiceworkbench.

Select ‘Initiate Approval’. Approval fieldshould now say ‘Initiated’.

Log into the self-service web applicationWorkflow Administrator Web Applications.Select Event Queue Summary. Select theWF_DEFERRED queue. The Item Key is theinvoice id. Verify the invoice id appears in thequeue.

Log into the System Administratorresponsibility and run the ‘Workflow AgentListener’. This launches the workflow.

Log into the self-service web applicationWorkflow Administrator Web Applications asthe approver. Select ‘Find Notifications’. Clickon the notification. Approve the invoice.

Back in Payables, query the invoice and verifythe approval field has changed to ‘Approved’.

You can also test to OAM as a standaloneprocess.

Log into self-service web application AMEApplication Administrator.

Click ‘Approvals’. Select the ‘Test’ tab.

Select ‘Create a Test Transaction’.

Choose ‘Person’ as Test-TransactionRequestor Type’.

Search for the requestor.

If the approver is found you should get a listthe test transaction attribute values.

Make any necessary changes to the values andclick the ‘View Approval Process’ button. Ifan error appears the error is within OAM. Ifthe approval completes without any errors,then OAM is setup correctly.

Conclusions

It is my desire that this paper has helped youunderstand the fundamentals of InvoiceApproval Workflow. I hope that you are nowbetter equipped to troubleshoot problems anddetermine what needs to be done to resolve theissue.

In addition, if you encounter a problem thatrequires assistance, please remember to callOracle Support. They may have seen the issuebefore and may already have a solution for theissue!

About the Author

Michael Milano is a Technical Analyst withthe Oracle Support financials group. He hasbeen working for Oracle Support forapproximately 4 1/2 years.