oracle ebs oracle purchasing - eton technologies

Oracle EBS

Oracle Purchasing

1

2

Training Agenda

Areas Covered:

– Overview

– Concepts

– Setup

– Use case in ERP

– Q&A

3

Overview:

Account Payables takes care of all payments in Oracle

Applications. This module has active interaction with

Purchasing and General Ledger modules.

The different functionality of the Payables module are:

Set up Supplier.

Enter, review and Approve invoices.

Pay invoices and reconcile payments to bank a/c.

Enter and apply pre-payments.

Create journal entries for posting to GL.

An top level overview of the module can be given as :

4

Overview:

ACCOUNTS PAYABLE

This is the final process of Procure to pay, where in this process, we make the payments, to the supplier and in this

process, and there are 2 work benches,

Invoice Work Bench

Payment Work Bench

Invoice Work Bench

In the Invoice Work Bench, we raise all the invoices against the supplier, for which we have to make the payment and

there are 8 types of invoices.

Standard Invoice

Debit Memo

Credit Memo

Pre Payment

Mixed

Expense report

Retain age release

Transportation invoice

5

Overview:

Apart from these invoices, there are some other invoices like

Adjustment invoice

Recurring invoice

PO match invoice

Quick match invoice

Self billing invoice

Correction invoice

Interest invoice

Hold invoice

Individual tax invoice

Withholding tax invoice

Payment work bench:

In the payment work bench, we make the payments to the invoices which are raised in the invoice work bench. To make

the payment we use the payment document which is defined in our bank account.

6

Payables - Setup:

The mandatory set ups in Payables: (checklist)

Financial option

Payable option

Bank , bank branches and bank accounts

GL periods and payable periods

7

Payables - Setup:

To check the financial option

N---- AP----SET UP---OPTIONS-------FINANCIAL OPTIONS

8

Payables - Setup:

To define the Payable Option

N----AP----SET UP----OPTIONS----PAYABLE OPTION

9

Payables - Setup:

Accounting Methods

Accrual

Cash

Accrual method it creates 2 J.E

ITEM EXPENSES A/C Dr

TO LIABILITY A/C--------------------------INVOICE

LIABILITY A/C Dr

TO CASH CLEARING A/C-----------------PAYMENTS

CASH METHOD

IN CASH METHOD IT CREATES 1 J.E

LIABILITY A/C Dr

TO CASH CLEARING A/C

AUTOMATIC OFFSET

10

Payables - Setup:

Payable Options Setup.

11

Payables - Setup:

Payable Options Setup.

12

Payables – Banks & Branches:

DEFINING BANK, BANK BRANCHES AND BANK ACCOUNTS:

Now a days corporate treasury role has been greatly enhanced

thus picking up a global bank as partner for all banking need is

demand of time in global working model. The recent couple of

years have seen drastic increase in acquisition and merger of

company thus global working as well as global instance get

popularity in ERP areana, and this is one of reason of the

reason bank data model has been significant changes from 11

to 11i and 11i to R12.

In R12,

Suppliers, Banks and Branches are defined as Parties in TCA.

Supplier (party's) payment information and all payment

instruments (Bank Accounts, Credit Cards) moved into Oracle

Payments.

13

Payables – Bank Setup:

Bank Setup:

N----AP---SET UP---PAYMENT---BANK & BANK BRANCHES

14


Bank Setup:


15


Bank Setup:


Create the Bank account respectively.

16

Payables - Invoices:

Invoice Creation:

TO RAISE A STANDARD INVOICE WITHOUT ANY TERMS

N---AP---INVOICES---ENTRY---INVOICES

This consist Setup for:

Distribution Set

Tax

Setup tolerance, matching options

17


Invoice Creation:

Save it and close the distribution form.

Select ACTION

VALIDATE

SELECT ACTION

SELECT CREATE ACCOUTNING

NOTE :

From Invoice WorkBench, We can directly enter into the Payment WorkBench,

by SELCTING PAY IN FULL option.

SELECT ACTION

SELECT PAY IN FULL

18


Invoice Creation:

DRAFT-----DRAFT ACCOUNTING ---ALLOWS

MODIFICATION ----BUT NOT SENT TO GL

FINAL-------FINAL ACCOUNTED-----NOT ALLOWS

MODIFICATIONS ----NOT SENT TO GL

FINALPOST-----FINAL ACCOUNTED----NOT

ALLOWS MODIFICATION---AND SENT TO GL FOR

POSTING

19

Payables - Payments:

Invoice Payments:

This requires set up for payment related dependency

which include ;

Format

Bank

Bank account

Build program

Payment Methods

oManual

oQuick Check

oAutomatic Check

Take a note in manual and Quick check, you have to

simply enter payment details and correlate to

invoices. Automatic check is applicable for batch

payments.

20


Invoice Payments:

SELECT ACTION

SELECT CREATE ACCOUTING

21


Invoice Payments:

SELECT ACTION

SELECT CREATE ACCOUTING

22

Payables - Accounting:

Verify Accounting:

23


Verify Accounting:

ITEM EXPENSE FROM INVOICE DISTRIBUTION

LIABILITY ACCOUNT FROM FINANCIAL OPTION

24


Verify Accounting: TO CHECK THE PAYMENT ACCOUNTING

GO TO THE PAYMENT WORK BENCH Tools View Accounting

LIABILITY ACCOUNT FROM FINANCIAL OPTION

CASH CLEARING ACCOUNT FROM BANK ACCOUNT

25

Payables - Create Journal entries:

Create Journal entries:

Typical flow for creating Journal entries is summarized as:

And here is final note of accounting Entries of AP :

During Invoicing

oExpenses A/C Dr to vendor liability

During Payment

oVendor liability A/C Dr to Cash/Bank A/C

And, This is Four Rule of Payables

You must have a vendor to do anything

Every Invoice must be fully Charged out before paid or posting

to GL.

All Payments must have an invoice

Every Invoice must run through approval process.

26

Payables – Period Close(CheckList):

Period Close Processing Checklist:

These are the Closure Checklist for Payables Period end.

1. Complete Transactions : that means Completing all transactions for Oracle Payables:

Complete Invoicing and Credits

Complete Prepayments

Complete Expense Reports

Complete Invoice Import

Invoices On Hold Report can also be used.

2. Approve Invoices :The Payables Approval process is run to try to approve all unapproved invoices in the

system, so that they can be paid by Oracle Payments and posted to the General Ledger

3. Complete Payments

4. Reconcile Payments/Bank Statements

5. Resolve Potential Accounting Issues

Create Accounting

Journal Entries Report

Unaccounted Transactions Report

27



6. Post (GL) Payables Transactions

7. Review Accounting

Payables Accounting Process Report

Posted Invoices Register

Posted Payments Register

8. Unaccounted Transactions Sweep

9. Close Payables Period

Subledger Period Close Exceptions Report

10. Accrue Un-invoiced Receipts

11. Reconcile Payables Activity to GL

AP Trial Balance Report (Account definition, Data Mgr Program)

Third Party Balances Report

Account Analysis Report

12. Mass Addition Transfer to Assets

28



Some notes as per the best Practice,

It always encouraged to include all LIABILITY accounts in Open Account Balances Report

Definition.

Explore the Control Account feature with Third Party Balances report.

You should avoid reversing batches (or modifying Journals) in GL, if transferred by SLA.

Always use Period Close Exception report prior to closing Periods in GL and reconciling to

Account Analysis & Trial Balance reports.

You can use only SLA or GL (not both) to create manual journal entries for subledger transaction

corrections.

29

Payables – Invoice Aging Report:

Payables Invoice Aging Report:

Why called Aging Report?

Aging comes from the word Age. “Age” is the chronological representation of any phenomenon. Be it a person, an organization. Invoice Aging is the calculation of Unpaid or Outstanding Invoice’s Age. In Oracle Payables this calculation is

done using the Invoice Aging standard report. The calculation is represented in Days.

Where is the Aging report used?

It is used to calculate the Due and Overdue days of any outstanding supplier’s or invoice’s payment. Using this aging information the cash outflow is determined. And many other decision can be taken.

How does the Aging report works?

Oracle Payables uses the Invoice Date, Payment Terms and Term Date attached to it for calculating the invoice’s age. GL Date has no effect on the aging.

Following are the setup steps required to implement Invoice Aging report:

1) Define Aging Period

Aging Period is a user defined slabs of days. User can define one to many aging calendars.

2) Run the Standard Request using the defined aging period.

30


Payables Invoice Aging Report: Example:

Let’s take a scenario to define the Aging Period. Suppose I want to know the payments Overdue by 30 days and payments Due in 30 days i.e. if Today is 1-April then this aging period will display the payments due from 2-March to 1-May. So here

is how to define such periods.

Setup:

Step 1:

Navigation: AP>Setup>Calendar>Aging Period

1) Enter the Name, let’s suppose “Monthly Aging Period”. 2) Enter the Description(optional), like “30 days due and overdue aging period”. 3) The Column Order will be by default 1, let it be.

4) Enter 16 in Days From and 30 in Days To. (Yes, number of days in positive will pick the past due payments)

5) Give the First Column Heading as 30 – 16 and Overdue in Second Column Heading, though it is optional. These column

headings will appear on the aging report.

6) Go to next row, the column order will be automatically generated.

31



7) Enter 0 in Days From and 15 in Days To.

8) Give the First Column Heading as 15-0 and Overdue in Second Column Heading.

9) Go to next row.

10) Enter -15 in the Days From and 1 in Days To.

11) Give the First Column Heading as Due In and give 1-15 Days in Second Column Heading.

12) Go to next row i.e 4th or the last row, as the aging report has only four columns.

13) Enter -16 and -30 respectively in both columns.

14) Give the First Column Heading as Due In and give 16-30 Days in Second Column Heading.

15) Save the period.

Step 2: Now you have run the standard request name Invoice Aging Report. Give the following parameters

32


Payables Invoice Aging Report: Parameters:

Sort Invoice By:

Trading Partner: All invoices will be sorted and grouped by Supplier’s Name

Invoice Type: All the invoices will be sorted by the Invoice Type, like Standard, Prepayments, Credit Memos etc.

Include Invoice Detail:

Yes: The invoice information will be displayed in detail like Invoice Number, Due Date, Unpaid%, Amount Remaining.

No: A summarized view of the

Include Site Details:

Yes: The invoices will be categorized supplier site wise.

No: There will be no site information.

Minimum Amount Due:

There is no need to define this parameter.

Maximum Amount Due:


Invoice Type:


Aging Period Name: Give the name of the period of which you want to have the due calculate.

33



Sample Output:

34

Q&A:

Manish Misra

Email: [email protected]

Phone: +1-614-453-2074

35

Contact Info:

oracle ebs oracle purchasing - eton technologies

Documents