Creating an Implementation Project for Oracle Financials Cloud

Overview of Payable Transactions in Oracle Fusion Applications

This article will discuss an overview of Payable Transactions in Oracle Fusion Applications. Before you can create Payable transactions in Oracle Fusion Applications, make sure all configurations are complete. Check out a separate article "Overview of Payables Configurations in Oracle Fusion Applications" for more information on the configurations.

Once everything is configured, you may proceed to create payables transactions in multiple approaches. There are four approaches to create a Payables Invoice:

Manual

1. Manual Invoice created from the Payables Work Area - allows you to create invoices by using an invoice work area within the application. There is a dedicated user interface where you can navigate and you can start recording your invoices by capturing header level information, line level information, and distribution level information.
2. Integrated Imaging
3. Manual Invoice created from Spreadsheets - Oracle provides functionality to upload invoices in bulk using Spreadsheets with the use of File-Based Data Import (FBDI) templates. This allows the user to be more efficient in getting their invoices in the application. Check out the video demonstration below on how to create invoices from an Excel Spreadsheet:

Self-Service

1. Matched Invoices - This involves a process where you can match the invoices against purchase orders or maybe against receipts, depending on what type of matching level you are going to use.
2. Unmatched Invoices - Invoices that are not matched to purchase orders can be routed to workflow approval rules that you configure
3. Advanced Shipment Notices (ASNs) - A document which allows you to generate invoices automatically, which will be created when supplier create an ASN for drop shipments.

Automated

1. Integrated Imaging - This will use Oracle Integrated Invoice Imaging solution to support integrated imaging of scanned invoices for paperless processing and routing. It then uses the import process to match to purchase order or receipts. If it's a PO based invoice, you can view invoice information including invoice status, installments, holds, payments, and applied prepayments against these invoices as well. You can also drill down to the original purchase order or receipt if required. And if errors are found during the process, manual intervention may be required to resolve the import errors.
2. Self-Billed - In the application we have a feature called Evaluated Receipt Settlement, also known as Pay-On-Receipt. You can use the Pay On Receipt feature to help you in automatically generating an invoice the moment you create a receipt against a purchase order. You can use the predefined jobs, schedule them, and enable your supplier for Pay On Receipt functionality. When you do that, the moment you will create a receipt against a purchase order, based on the scheduled jobs system will automatically keep on creating an invoice against those receipts which you can access from the Payables application. Apart from that, we have also got something called Return to Supplier feature, or sometimes called as Return to Vendor (RTV). This basically helps you in automatically generating a debit memo the moment you create an RTV transaction in the Purchasing application. The moment you create an RTV transaction, that becomes the base to automatically generate a debit memo in the Payables application.
3. Expense Reports - Expense reports are Invoices created from Employee Expenses that need to be reimbursed to them. It can be either done electronically through their registers bank accounts or in the form of a physically printed check. Whenever the expense reports are approved by both the manager as well as the Payables team, they become eligible for import into the Payables application. There is a job which you need to submit to export the expense reports from the Expense application into the Payables application, because from the Expense application you cannot directly process the payments. The type of invoice that is used for these expense reports is now known as Payment Requests. Whenever you will export the invoice from Expenses to the Payables application, you need to search with the invoice type as Payment Request. 
4. Customer Refunds - Similar to Expense Reports, customer refunds can be triggered whenever there are any credit balance in Receivables that require a refund. Once approved, they will flow to Payments as Payment Requests.
5. Inter-company invoices - An intercompany transaction that requires invoicing is imported to Payables for payment processing for internal suppliers

Electronic

1. Business to Business (B2B) Web Service - Used to import invoices in an electronic format via a Web Service

Check out a separate article for more information on how to create Expense reports: Creating an Expense Report in Oracle Fusion Applications or check out the below step-by-step video demonstration:

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Overview of Payables Configurations in Oracle Fusion Applications

What are the required Configurations to use Payables in Oracle Fusion Applications?

These are some of the basic setups that we need to deal with first when it comes to Payables-to-Cash process. Some of the setups will be common, including enterprise structures, reference data sets. And some of the setups are specific to invoicing and payment process, and some of the setups are specific for reconciliation related requirements.

The required Configurations to use Payables are divided into four categories:

1. Common Application Configurations
2. Invoicing and Payments Configurations
3. Cash Management and Banking
4. Suppliers and Supplier Site Configurations

Common Application Configurations

• Common Application Configurations are mostly configurations to be done in the General Ledger. Firstly, you need to establish legal structures such as Enterprise details, Legal Entities, Business Units, Ledgers, etc. Secondly, you need to configure Reference Data Sets (RDS).
• Enterprise Structures basically represents the entities through which you are managing your business. It includes a top entity called the Enterprise and under it you can have Legal Entities, ledgers, business units, inventory organizations, cost of books, etc. This includes Final reporting Structures, which is where the role of ledgers comes into the picture. For more information on Enterprise Structures, check out a separate article, Overview of Enterprise Structures in Oracle Fusion Applications
• Reference Data Sets allows either the sharing of Master Data Objects (i.e. Payment Terms, Set of Books, etc.) across Business Units or makes it exclusive to a specific Business Unit or shared across multiple business units. It basically partitions the Master Data Objects on which Business Units get access to it. For more information on Reference Data Sets, check out a separate article: Overview of Reference Data Sets in Oracle Fusion Application.

Invoicing and Payments Configurations

• To manage invoices and payments within Payables and Payments, you need to manage and maintain setups that are common to the Payables application.
• For example, you will maintain common Payable and Procurement options. They will govern how the transactions are processed within the Payables and Payments application. Common Payment and Procurement Options are also used to default certain attributes directly on the invoices that you will process. Do note that there are certain Payment and Procurement Option attributes than can also be overridden at the supplier level.
• Configurations such as allowing Invoice approvals and accounting for the payment transaction is driven through Invoice Options and Payment Options, respectively.
• Setups required for Payment Processing such as design payment formats, payment systems, payment transmission configurations for electronically transmitting the payment files to your banks for disbursement purposes.
• You may have to configure tax rules based on which the taxes should be calculated automatically.
• You may have to set up Subledger Accounting Rules based on which the accounting entries at the Subledger level for these transactions will be generated. For more information on Subledger Accounting, check out a separate article: Overview of Subledger Accounting in Oracle Fusion Applications

Cash Management and Banking

• The primary role of Cash Management is for bank statement reconciliations and for bank account transfers.
• You need to manage the Bank, Bank's branches and Bank Accounts. To know more about Managing the Bank, Bank's branches and Bank Accounts, check out a separate in-depth article: Creating Banks, Bank Branches and Bank Accounts in Oracle Fusion Applications
• You also need to ensure that you have established a proper mechanism to upload the bank statements electronically. To know more about Cash Management and Bank Statements, check out a separate article: Overview of Cash Management in Oracle Fusion Applications

Once these basic setups have been completed, you need to maintain your supplier and supplier site data. 

Supplier and Supplier Sites

Suppliers are used in different applications including Procurement, Payables, and Payments. You will use suppliers in the Procurement application for managing purchase orders as you cannot create a purchase order without a supplier. You need suppliers in the Payables application for processing supplier invoices. You need supplier in the Payments application for disbursing payments against the invoices that were recorded within the Payables application.

Supplier sites are basically used for establishing a relationship between a business unit and other attributes that will govern how the invoices related to those suppliers will be processed. This allows the system to know which business unit is authorized for recording transactions as far as a particular supplier site is concerned. You have have got an option to assign one site to multiple business units if necessary.

Supplier Sites also provide many defaults, controls and policies. Supplier Sites can default accounts combinations related to liability, advances automatically on the invoices. If it is not provided in the Site-Level, then system will retrieve those details straightaway from the common Payable and Procurement options.There is also a mechanism to specify a default withholding tax code, a default distribution set. Supplier Sites also controls whether to put holds on the invoices, default payment term, default terms date basis, etc.

Once all of these are setup and done, you can now proceed to create Payable Transactions in Oracle Fusion Applications.

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