Basic Concepts in Oracle AP - Part1

Oracle 11i Financials - AP

The Payables module in Oracle Applications allows you to pay your suppliers for merchandise
and services and enables you to manage your procurement cycle. This module consists of two
integrated workbenches, Invoice and Payment.
This ReferencePoint describes Accounts Payable (AP) and explains how to manage payments to
vendors and suppliers.

The Payables Workflow

Oracle Payables is integrated with Oracle Purchase and Oracle Cash Management. When you
purchase goods or services from a supplier, an encumbrance is created. As soon as you receive
the goods or services, the encumbrance becomes a liability that remains in your books until you
pay for goods or services.
Figure shows the integration of Oracle Payables, Oracle Purchase, and Oracle Cash
Management:

Integration of Payables, Purchase, and Cash Management

Oracle Purchase, similar to all other feeder systems, is also integrated with Oracle GL. You can
transfer all accounting transactions generated and created in Oracle Payables to Oracle GL
through GL_INTERFACE_TABLE.
To integrate Payables with GL:
1. Run Payables Transfer from Oracle Payables to the General Ledger process. Using this
process, you can transfer invoice and payment accounting to the GL_INTERFACE table.
 2. Run the Journal Import program from Oracle GL to transfer the invoice and payment
accounting from the GL_INTERFACE table to GL. This creates unposted journal entries
in GL, which can be reviewed and finally posted. The posting process updates account
balances.

How to Set Invoice Workbench

Invoice Workbench enables you to enter, adjust, modify, and review invoices and invoice
batches that your customers have raised on you.
You can integrate the Invoice and Payment workbenches through the Invoice Overview and
Payment Overview windows. You can use either of these workbenches to review the information
in the other workbench.
The Setup options in Oracle allow you to manage the procurement cycle and save money for
your organization. You can define the Payables system to:
Pay suppliers on time
Get maximum discounts on payments
Prevent duplicate billing and invoicing
Perform multiple matching of Invoice and Purchase Orders
Avoid overdrafts on bank accounts
Review information online to check the status of payments
There are various options that you can set to work with the invoice feature in Oracle Payables.
These include the options for suppliers, invoices, and distribution sets.
Supplier
The Suppliers window enables you to enter information about individuals and organizations that
supply goods and services. You can enter employees as suppliers to enable the system to make
payments against expenses.
If any of the suppliers operate from multiple locations, you need to enter the supplier information
only one time. You can assign multiple sites to each of the supplier's locations. A site is a
location from where the supplier runs a specific business. Sites can be designated as pay sites,
purchasing sites, and REQ only sites. On the basis of supplier definition, you can purchase goods
or services and send payments to a site.
How to Define a Supplier
To define a supplier:
1. Log on to Oracle Applications. Select Switch Responsibility -> Payables, from the main
menu. Select Suppliers –> Entry. The Suppliers form opens, as shown -
The Suppliers Form
 2. Enter a name, tax payer ID, and a number signifying your customer ID. Select the
Classification tab. In the Type field, select a type from the LOV for the supplier.
3. Open the Accounting tab. Enter a distribution set to automatically enter distributions for
an invoice when it does not match a purchase order. For example, you can create a
distribution set for stationery supplier. This allocates stationery expense on an invoice to
a specific number of end users.
4. Open the Control tab. In the Invoice Match option, select either Purchase Order or
Receipt.
If you enable any of the HOLD options for a specific supplier, Payables will withhold payments
to that supplier.
5. Click the Payment tab. In the Terms field, select a Payment Term agreed upon by you
and your supplier. Select Pay Group to assign to the supplier, as shown earlier in
screenshot-2
6. Enter a priority number between 1 and 99 in the Payment Priority window with one
having the highest and 99 the lowest priority. Select Terms Date Basis to define the date
from which Payables calculates a scheduled payment from a supplier.
7. Select Pay to determine the pay date for a supplier's invoice. Click the Bank Accounts tab
to define the supplier's bank accounts.
8. Select Purchasing. Define the organization's Ship-To and Bill-To locations among other
options, where the supplier sends the goods to the Ship-To location and the invoices for
goods or services to the Bill-To location.
9. Select the Receiving tab. The options to open the Receiving tab are:
Enforce Ship-To Location: Determines whether or not the receiving location is the
same as the Ship-To location.
 Receipt Routing: Defines the flow of goods after the supplier has delivered the same
at the Ship-To location.
Match Approval Level: Allows you to online match receipts and purchase orders to
ensure that you pay only for the ordered goods and services.
QuantityReceived Tolerance: Defines the maximum range of over-receipt in addition
to the quantity ordered, based on the percentage you enter.
Tolerance: Defines how the purchase department handles the receipts that exceed the
QuantityReceived Tolerance based on the selected value.
Days Early and Days Late Receipt Allowed: Defines how many days before and after
the date of receipts of goods, you are ready to accept the delivery.
Receipt Date Exception: Defines how the purchase department handles receipts that
exceed the Days Early and Days Late Receipt Allowed.
10. Save and click the Sites button. The Supplier Sites form opens, as -

The Supplier Sites Form

11. Type a site name, EC-NYC in the Site Name text box. Type the address in the Address
option. Select the General tab and select the Pay and Purchasing check boxes in the Site
Uses option. The concerned supplier uses this site for receiving purchase orders as well
as payments. Select the Contacts tab and enter a contact name and information for the
supplier.
12. Select the Accounting tab. Enter the default GL accounts that will be updated when you
deal with the supplier. Click the Bank Accounts tab and enter the supplier's bank account
data. Save and close the Supplier Sites form.
Payment Terms
You need to define Payment Terms to assign them to an invoice. This allows you to
automatically create scheduled payments when you submit an invoice for approval. A Payment
Term consists of one or more Payment Term lines where each line creates a scheduled payment.
Each scheduled payment has an associated due date or a discount date based on:
A specific day of a month, such as the tenth day of the month.
A specific date, such as January 10, 2003.
The number of days added to the terms date, such as 10 days after the terms date.
A special calendar that mentions a due date for the period that includes the invoice terms
date. Due dates can be based on a special calendar but not discount dates.
To define a Payment Term:
1. Select Setup –> Invoice -> Payment Terms from the main menu. The Payment Terms
form opens, as shown -

The Payment Terms Form

2. Enter a name for the Payment Term.
3. Enter a Cut-off Day if you are entering Day of Month terms. The Cut-off Day defines the
day of the month. After the Cut-off Day, due and discount dates will be in a future month
depending upon the value entered in the Months Ahead field. For example, the values of
Cut-off Day are 10, Months Ahead is 0, and Day of Month is 15. If you enter an invoice
with a terms date of March 12, Payables will set the due date to April 15.
Note You can also use Fixed Date or Days terms instead of Day of Month
 terms, but you cannot select two different terms.
4. Enter 100% or less if payment is made in installments in the % Due field. Click the First
Discount tab.
5. Enter the discount percentage in the % Discount field. Press Tab to go to the Days field.
Enter a value 10 in the Days field. This Payment Term will provide a 2% discount if
payment is made within 10 days of the Term Date. Define the second and third discounts.
6. Save and close the Payment Terms form.
Distribution Sets
A distribution set creates distributions for an invoice where the Purchase Order does not match
with the invoice. You need to assign distribution sets to a supplier site where the Payables
module uses them for every invoice assigned to the supplier site. If a distribution set has not been
assigned to a supplier site, select one when you enter the invoice.
The two types of distribution sets are:
Full distribution set: Contains the percentages in which the distribution of the Invoice amount
is created.
Skeleton: Contains no predefined percentages. You need to enter the amount when you enter
the invoice.
To define a distribution set:
1. Select Setup –> Invoice –> Distribution Sets. The Distribution Sets form opens, as shown
–

The Distribution Sets Form

2. Enter a name for the set.
 3. Click the Num field. Type 1 for the first distribution line.
4. Enter the percentage of the invoice amount you want to distribute among the distribution
line in the % field.
5. Type the account code to which this distribution line belongs in the Account field. For
example, you can enter depart 001.
You can create as many distribution lines as you need, but ensure that
Note
the total of the values of the % field equals 100.
6. Save and close the Distribution Sets form.
Invoice Tolerances
The Invoice Tolerances window allows the end user to define acceptable tolerances, allow
variances between invoices, purchase orders, and obtains receipts and tax information. You can
define tolerances in percent or absolute terms.
Tolerances in Payables store a matching or a tax hold in an invoice, if the value exceeds the
tolerance levels defined in the Invoice Tolerances window. When you submit an invoice for
approval, Oracle Payables checks whether the invoice matches the purchase order or the receipt
within the purchase order tolerance limits you have set.
When you submit the invoice with a tax amount for approval, Payables checks whether the
invoice tax amount equals the calculated tax amount within the tolerance limits you have
defined.
If you define a percentage-based tolerance, Payables calculates the tolerance, based on the
invoice amount including the tax. For example, the invoice amount is USD 100, the tax rate is
10%, and the tax tolerance is 5%. In this case, an Invoice will not be raised on a Tax variance
hold if the tax distribution amount entered ranges from USD 9.5 to USD 10.5.
To define Invoice Tolerances, select Setup –> Invoice –> Tolerances from the main menu. The
Invoice Tolerances form opens, as shown-
The Invoice Tolerances Form
Invoice Approvals
The Invoice Approvals window defines the rules that manually hold or release invoices. You can
create hold rules, such as APPROVAL REQUIRED, and release rules, such as APPROVED.
You can define as many approval rules as you need.
To define Invoice Approval code:
1. Select Setup –> Invoices –> Approvals, from the main menu. The Invoice Approvals
form opens, as shown -

The Invoice Approvals Form

2. Enter a name and description for the code.
 3. Select a predefined type in the Type field.
4. Select the Accounting Allowed option if you are defining a hold code.
5. Enable the Manual Release Allowed option manually if you are defining the release code.
It releases the hold on an invoice.
6. Save and close the Invoice Approvals form.

Invoices
Oracle Payables enables the end user to enter and work with the following types of invoices:
Standard: Indicates the basic form of invoice that represents a payment due to a supplier for
goods or services purchased.
Credit Memo: Indicates a negative amount invoice that is received from the supplier for
goods and services purchased. You can use it as a price correction tool.
Debit Memo: Represents a credit amount, which the supplier owes you. This document is
created and sent to the supplier.
Purchase Order Default: Enables you to match the invoice against the purchase order. While
you enter an invoice, the purchase order number entered automatically copies supplier
related information from the purchase order to the invoice.
Mixed: Allows the ordered quantity against purchase orders and other invoices, both in
excess and in deficit.
Quick Match: Enables you to match an invoice against all shipment or receipt lines in a
purchase order.
Prepayment: Enables you to enter an advance payment for expenses to a supplier or an
employee. For example, you may need to make a deposit when placing an order or make
advance payments for travel expenses.
Withholding Tax: Enables you to remit taxes invoice withheld from the tax authority.
Expense Report: Enables you to enter amounts due to an employee for business-related
expenses.
Interest: Enables you to calculate the interest for overdue invoices and create interest
invoices for relevant suppliers. You need to enable the Allow Interest Invoice option in
the Payables options window.

Figure shows the invoicing process:

Overview of the Invoicing Process
Invoice Gateway vs. Invoice Workbench
You can enter invoice information using either the Invoice Workbench or the Invoice Gateway.
The Invoice Gateway enables you to enter large volumes of standard and credit memo invoices
that are not complex and do not require extensive online validation or change in values during
data entry.
The Invoice Gateway enables Purchase Order matching and applying prepayments to invoices
being entered.
The Invoice Workbench enables you to enter complex invoices that require extensive online
validation and change of values that appear by default during data entry. You can also use the
Invoice Workbench to perform an action on the invoice immediately after entering it. For
example, you may need to apply a payment immediately upon entering the invoice information
and you can do it from the same window.
How to Enter an Invoice
To create a Purchase Invoice batch and to enter a Purchase invoice:
1. Log on to the system. Select Switch Responsibility -> Payables, from the main menu.
2. Select Invoices –> Entry –> Invoice Batches, from the main menu. The Invoice Batches
form opens, as shown -

The Invoice Batches Form

 3. Enter a batch name and a Payment Term. Click the Invoices button. The Invoices form
opens, as shown -

The Invoices Form

4. Select Type as Standard. Select a Supplier. When you select a Supplier, the Supplier
Number and Site is automatically populated.
5. Enter an invoice date in the Invoice Date column. Enter the invoice number as 100.
6. Select the Invoice Currency as USD. Enter the invoice amount as 10, 000.
7. Type GL Date = System Date and Terms Date = System Date.
8. Change the Payment Term if needed. The default value defined will be similar to the
Invoice Batches form.
9. Select a payment method such as Check. Select Pay Group, if needed.
10. Save the date in the Invoices form. Do not close the Invoices window.

How to Enter Invoice Distributions

You may need to distribute the entered invoice to various departments in your organization. For
example, you have an expense item, Furniture. You may need to allocate its cost to three
departments.
Use the invoice created in the earlier exercise. To enter invoice distributions:
1. Click the Invoice line and then click the Distributions button. The Distributions form
opens, as shown –

The Distributions Form

2. Type one in the Number field. Select Item in the Type field.
3. In the Amount field, type 3500.
4. Type a GL Date or accept the system date.
5. Type the account combination for the first department for which the cost is being
allocated in the Account field.
6. Type 2 in the Num field. In the Type field, select Item. In the Amount field, enter 4000.
Type a GL Date and the account combination for the second department, as shown in the
Screenshot above.
7. Repeat the steps for the third number. Ensure that the Invoice Total matches the
Distribution Total.
8. Save and close the Distributions form.
How to Enter Distributions Using a Distribution Set
Prerequisite: Create a distribution set.
To enter an invoice distribution using a distribution set:
1. Open the Invoice Batches window.
 2. Select View -> Find, from the top menu. The Find Invoice Batches window opens. Enter
the name of your invoice batch. Click the Find button. The Invoice Batches form opens
with the invoice batch.
3. Click the Invoice button. The Invoices form opens.
4. Enter Type as Standard.
5. Enter your supplier and press Tab to go to the Invoice Date field. Type an invoice date.
6. Enter the invoice number and invoice amount.
7. Click the Distribution Set field. Select the distribution set that you have created earlier
and save.
8. Click the Distribution button. The Distributions window opens where you can see that the
distribution for your invoice is complete.
9. Save and close the Invoice Batches form.
How to Create a Scheduled Payment
After entering an Invoice, the Payables module uses the Payment Terms and the Term date
specified to automatically schedule payments. The Payment Terms parameters enable you to
calculate the due date for the invoice, the discount date, and the discount amount for each
scheduled payment.
To create a scheduled payment for an invoice:
1. Open the Invoice Batches window. Select Invoices –> Entry –> Invoice Batches. The
Invoice Batches window opens.
2. Select View –> Find to query the Invoice Batch from the top menu.
3. Click the Invoices button in the Invoice Batches window. The Invoice form opens.
4. Enter a Standard invoice using a distribution set. Save date in the Invoice form.
5. Click the Scheduled Payments button. The Scheduled Payments form opens, as -

T
he Scheduled Payments Form
 6. Enter 70% of your invoice amount in the Gross Amount field.
7. Click the Split Schedule button. A scheduled payment new line is automatically created
in the Scheduled Payments form.
8. Ensure that the invoice amount matches the gross amount total.
9. Save the date in the Scheduled Payments form.
How to Create Freight Distribution
To create freight distribution in Oracle Payables:
Enable the Automatically Create Freight Distribution option when you parameterize the
Payable options. You can enable this option in the Invoice tab embedded in the Payable
Options form.
Allocate freight across invoice distributions.
Manually enter freight distributions.
To create freight distribution:
1. Open the Invoice Batches window and select Query to find the invoice batch option.
2. Select your batch. Click the Invoices button.
If you cannot view the Freight Amount field and the Create Freight
Note Distribution check box, select Folder –> Show Field from the top
menu.
3. Create a Standard invoice in the Invoices form.
4. Enter the invoice number and invoice amount in the Invoices form. The Invoice Amount
here includes Freight.
5. Enter a value in the Freight Amount field.
6. Select the Create Freight Distribution check box. The Freight window opens. Type your
Freight distribution account here. Click OK.
If you have already entered a Freight distribution account when
Note configuring the Payable option then that account code will appear by
default.
7. Save the Invoices form.
8. Click the Distributions button to verify the freight distribution. The Freight line appears,
by default.
9. Add another distribution line. Save and close the Invoices form.
How to Allocate Freight
To enter freight distribution and allocate it across two departments or divisions:
1. Open the Invoice Batches window and select Query to find the invoice batch.
2. Click the Invoices button. The Invoices form opens. Enter an invoice.
3. Set Type as Standard and select a supplier name.
 4. Enter an Invoice number and the Invoice amount. The invoice amount includes the
freight amount.
5. Click the Distributions button. The Distributions form opens.
6. Enter a two-line distribution for your invoice.
The amount distributed here will be net freight amount. The
distribution is being made across two different departments. While
Note
entering the account code, ensure that different values are selected for
the Department segment.
7. Save the date. Click the Allocate button. The Charge Allocations form opens, as shown -

The Charge Allocations Form

8. Select Freight in the Type field and select the Prorate check box.
9. Enter the Freight amount to be allocated to each department in the Amount field. Click
the Select/Unselect All button.
10. Click the OK button. You will automatically return to the Distributions window. The
Freight allocation is prorated on the basis of the amounts in the two item distribution
lines. Save and close the Charge Allocations form.
How to Match Invoices with Purchase Orders
Best business practices include payment for the goods that have been ordered. For this, you need
to match your invoice against the payments made and the original purchase order.
Oracle Payables allows you to either match a single invoice against multiple purchase orders or
distributions or match multiple invoices with a single purchase order or distribution.
Using Oracle Payables, you can create Holds on invoices where you are being billed in excess of
the amount and quantity tolerances that you define. You will not be able to make a payment on
the invoices unless the hold is removed.
There are three Match Approval levels:
2-Way:
The quantity billed is matched against the quantity ordered.
The invoice unit price is matched against the purchase order line unit price.

3-Way:
The quantity billed is matched against the quantity ordered.
The invoice unit price is matched against the purchase order line unit price.
The quantity billed is matched against the quantity received.

4-Way:
The quantity billed is matched against the quantity ordered.
The invoice unit price is matched against the purchase order line unit price.
The quantity billed is matched against the quantity received.
The quantity billed is matched against the quantity accepted.

You need to create an Invoice and match it against the original Purchase Order.
Prerequisite: You need to create a Purchase Order using the Oracle Purchasing module.
Remember to note the Purchase Order Number.
To understand the three Match Approval Levels:
1. Select Switch Responsibility -> Oracle Payables, from the main menu.
2. Select Invoices –> Entry –> Invoice Batches.
3. Query your invoice batch. Select View –> Find, from the top menu.
4. Click the Invoices button. In the Invoices window, enter an invoice.
5. Set Type as PO Default. The PO Number window will appear. Enter your purchase order
number here. Click OK.
6. Enter an invoice number and an invoice amount.
 7. Click the Match button. The Find Purchase Orders for Matching form opens, as -

The Find Purchase Orders for Matching Form

8. Accept the default PO number. Click the Find button. The Match to Purchase Orders
form opens, as shown-

The Match to Purchase Orders Form

9. Select the Match check box and click the Match button. Save and close the Match to
Purchase Orders form.
Basic Concepts in Oracle AP - Part2
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How to Apply Holds
You can apply holds on invoices, scheduled payments as well as on supplier sites. Holds on an
invoice prevent you from generating a payment referencing that invoice. Holds can be applied
either by the system or manually as:
Manual Holds: Indicate user-defined holds. You can define manual holds to prevent payment
of the invoice or even prevent the account for the invoice. Manual holds cannot be
released automatically and need to be released manually.
System Holds: Indicates a hold other than a user-defined hold. If Payables applies a system
hold on an invoice, you need to rectify it before the hold is released.
Invoice Holds: Applies one or more Invoice Hold Reason Approvals or holds manually to an
invoice using the Invoice Holds window of the Invoice Workbench.
To apply an Invoice Hold:
i. Open the Invoice Batches window and Query and select the invoice batch.
ii. Click the Invoices button. In the Invoices form, select the invoice to which you
want to apply an invoice hold.
iii. Click the Holds button. Apply a hold by selecting a Hold name.
iv. Save and close the Invoices form.
Scheduled Payment Hold: Holds the payment on a part of an invoice by placing one or more
of the scheduled payments on hold in the Scheduled Payments window of the Invoice
Workbench.
To apply a Scheduled Payment Hold:
i. Open the Invoice Batches window and Query and select the invoice batch.
ii. Click the Invoices button. In the Invoices form, select the invoice to which you
want to apply a scheduled payment hold.
iii. Click the Scheduled Payments button. Select the Hold check box to apply a hold
to this scheduled payment. If you want to partially pay an invoice that has only
one scheduled payment, choose Split to break the scheduled payment into two. In
this way, you can place one of the lines on hold, while leaving the other free for
payment. Save and close the Invoices form.
Supplier Hold: You can enable the Hold All Payments, Hold Unapproved Invoices, or Hold
Unmatched Invoices option in the Supplier Sites window. You can also specify an
Invoice amount limit for a supplier site.
To apply a Hold on a Supplier Site:
i. Select Suppliers –> Entry from the main menu.
ii. Query the Supplier to whom a Hold needs to be applied.
 iii. Select the Control tab.
iv. Select the relevant Hold options check boxes. You can also specify an invoice
amount limit for a supplier. Save and close the form.
How to Release Holds
You can release holds to make payments and allow the system to create accounting entries for
invoices. By submitting concurrent requests such as the Invoices on Hold and Matching Hold
Detail reports, you can list the invoices with holds.
Manual holds must be released manually. Payables do not automatically release holds that you
apply to invoices. During the Approval process, Payables automatically release system holds
from invoices by releasing invoice holds, scheduled payment holds, and supplier holds.
To release invoice holds:
1. Open the Invoice Batches form. Query the invoice batch.
2. Click the Invoices button. In the Invoices window, select the invoice from which the hold
needs to be released.
3. Click the Holds button to open the Invoice Holds window.
4. Select the hold you want to release. Click the Release button to move to the Release
window.
5. Select a Release Name. Click OK. Save and close the Invoices form.
To release Scheduled Payment holds:
1. Complete Step 1 from the earlier exercise.
2. Select the Invoice to which a Scheduled Payment hold has been applied.
3. Click the Scheduled Payments button to go to the Scheduled Payments window.
4. Clear the Hold check box to remove the hold.
5. Save and close the Invoice Batches form.
To release a Supplier Site hold:
1. Open the Suppliers window.
2. Go to the Control tab and clear the hold Options.
3. Save and close the Supplier window.

How to Set Up the Payment Workbench

Payment Workbench enables you to create, adjust, and review the payments and payment
batches that you make against invoices. The Payables module also allows you to define a bank or
a clearinghouse. You use the Banks window to define internal banks where either you or your
organization is the account holder. You can also define external bank accounts where your
suppliers are the account holders.
You need to define a clearinghouse to record information pertaining to banks that process the
receipt information that you send in an electronic format. Clearinghouses create copies of the
customer receipt information and forward the same to each of your remittance banks.
To define a bank and bank accounts:
2. Select Setup –> Payment –> Banks, from the main menu. The Banks form opens, as
shown –

The Banks Form

4. Type a name for your bank in the Name field. Optionally, type an Alternate Name.
The value that you typed in the Number field is the identification number of the bank. The
system uses this number to identify the bank in payment formats that use electronic payment
methods.
3. In the Branch Name field, type the name of the bank branch with whom you do business.
4. Select either Bank or Clearing House in the Institution field. Enter a description for the
bank or the branch in the Description field.
If you enter an Inactive Date in the Inactive On field, then after this date, you will be unable to
select this bank account from the List of Values while entering transactions. The following is the
List of Values:
i. The Electronic Data Interchange (EDI) ID: Used only by Oracle Energy module.
ii. EDI Location: Indicates the Electronic Data Interchange location code for the
bank.
iii. EFT Number: Used by the organization's Electronic Fund Transfer module. This
number identifies the organization on any EFT transmissions with the bank.

5. Type the Address and then type the contact and clearinghouse information after selecting
the relevant option from the list that shows the address.
6. Click the Bank Accounts button. The Bank Accounts window opens. Enter a name for
your Account, such as Checking in the Name field.
7. Select either Internal or Supplier in the Account Use field. Enter the type of bank
account, such as electronic in the Account Type field. Enter the bank account number in
the Number field.
8. Enter the account code for your Cash Account in the GL Account tab. You may also
enter combinations for your cash clearing, bank charges, bank errors, confirmed receipts,
and Future dated payment accounts. Enter the name of the contact person for your bank
account in the bank in the Account Contact tab.
9. Enter values in the following fields of the Account Holder tab:
i. Account Holder: Indicates the name of the organization or the employee who is
responsible for this account.
ii. Alternate Account Holder: Indicates an alternate name of a person or an
organization that is responsible for this bank account.
iii. EFT Requestor ID: Indicates a number assigned by the bank and represents the
numeric identifier of the person or the organization that is responsible for
generating the account's electronic payment.

10. Enter values for the following fields in the Payables tab:
i. Maximum Outlay: Indicates the largest currency outlay that you allow for a
payment batch for this bank account. If the total outlay of a payment batch
exceeds its maximum outlay, Payables shows a warning but allows you to process
the payment batch.
ii. Maximum Payment: Indicates the largest payment amount that you allow in a
payment batch. When you start a payment batch using the bank account, Payables
uses this value as the default value that can be overridden.
iii. Minimum Payment: Indicates the lowest payment amount that you allow in a
payment batch.
iv. Realized Gain: Enables you to enter the GL account where you need to record the
gains realized while making payments denominated in the non-functional
currency.
v. Realized Loss: Enables you to enter the GL account where you need to record the
losses realized while making payments denominated in the non-functional
currency.
vi. Multiple Currency Payments: Allows you to pay invoices in foreign currencies if
this option is enabled. You can only enable this option if you have enabled Use
Multiple Currencies while defining Payable Options and this bank account is in
your functional currency.
vii. Allow Zero Payments: Allows you to generate zero-amount payments from this
bank account if this option is enabled.
 viii. Pooled Account: Enables you to use Automatic Offsets and to associate
multiple organizations with this bank account if this option is enabled.

11. Click the Payable Documents button. The Payment Documents window opens. In the
Document Information tab, define values for the following fields:
i. Document Name: Type a name for the document.
ii. Disbursement Types.
iii. Computer Generated: Used for payment batches or quick payments. The
documents are of two types, recorded and combined.
iv. Recorded Document: Is a payment document that is used only for manual
payments. Use this type for payments that you generate outside Payables but need
to record in Payables.
v. Combined Document: Is a payment document that uses both manual and
computer generated payments.
vi. Payment Format: Used by Payables to format payments for a payment document.
vii. Payment Method: Used by Payables to select the payment method associated with
the format type selected by you.

12. Define values for the following fields in the Additional Information tab:
i. Last Used: Defines the last payment number you used to create a payment. When
the next payment is created, it will have a number immediately succeeding the
Last Used number. Every time a payment is created, Payables automatically
updates this field.
ii. Last Available: Indicates the last payment number available for a payment
document. If you have typed 1000 in this field, the payment you create will bear
the number 1000.
iii. Setup Checks: Enables the system to print a certain number of checks at the
beginning of each payment batch or Quick payment. The value in this field allows
alignment of the printer.
iv. Document Category: Enables Payables to predefine a document category for each
payment method for a payment document if the Sequential Numbering System
Profile option is enabled.

In the GL Accounts tab, enter the GL account code for your Cash Clearing, Bank Charges, and
Bank Errors accounts.
In the Future Dated Payments tab, in the Future Date Use field, select among the Not Allowed,
Allowed, and Mandatory options. If you select Allowed or Mandatory, you can enter the future
dated payment account in the Account field.
How to Define Automatic Payment Programs
Payment programs enable you to create payment documents. The programs determine how
Payables creates and formats payable documents. You need to assign a payment program to a
payment format and then assign the payment format to a payment document for a bank account.
The Payment Programs window enables you to define whether a program is for building
payments, creating a payment, or creating a payment remittance advice.
Payables predefine one program for building payments and many standard programs for
formatting payments. It also predefines a program for creating a separate remittance advice for
payments. You can select the predefined programs when you define a payment format, or use the
programs as templates for creating your own custom payment programs.
You can define payment programs using the Automatic Payment Programs window. Select Setup
–> Payment –> Programs from the main menu.
Oracle Payables supports three payment program types:
Build Payments
Format payments
Remittance Advice
Each payment format requires a Build Payments and a Format Payments program. You can
attach a Remittance Advice program to a payment format, if required.
If you use the predefined payment programs provided by Payables, you do not need to perform
the set up steps. To use a custom payment program, you must create one payment program using
Oracle Reports, register it, and finally define it in Payables.
How to Define Payment Formats
You need to define and attach a payment format to the payment document in the Bank window.
Define Payment Formats for the four payment methods used by Oracle Payables. While each
payment method can have multiple formats, each payment format has to be unique for that
payment method.
To define a Payment Format:
3. Select Setup –> Payment –> Formats from the main menu. The Payment Formats form
opens, as shown -
The Payment Formats Form
2. Enter the name of the payment format you are defining in the Payment Format field. This
name will appear in a list of values in the Payment Documents window.
3. Select the required payment method in the Payment Method field.
4. Enables Zero Amount Payments check box only if you want the payment format to pay
zero amount payment.
5. Enable the Group by Due Date check box, if you want to group payments by due date.
6. Enable the format for multiple currency payments, or select a single currency.
7. Specify whether you need the payment format to print a remittance advice on a payment
by the radio button. Also mention if you want it printed before or after the payment
document.
8. Enter the number of invoices that should appear on your remittance advice for this
payment format.
9. Select a Build Payments Program and a Format Payments Program. If you selected none
for remittance advice, select a separate remittance program.
How to Create a Manual Payment
Prerequisite: You need to create an Invoice. While saving, note the Invoice number.
To create a manual payment:
1. Log on to the system. Switch responsibility to Oracle Payables.
2. Select Payments –> Entry –> Payments from the main menu. The Payments window
opens, as shown -
The Payments Form
3. Select Manual in the Type field.
4. Select the bank account you created in the Bank Account field.
5. Select the document you created from the Banks window in the Document field.
When you select a document type, payables reserves that type and no
Note other user can use that document type until you complete the payment
process. The Document Number field will populate automatically.
6. Type a Payment Date. In the Supplier field, enter the supplier to whom this payment is
being made.
7. Click the Enter/Adjust Invoices button. The Select Invoice window opens.
8. In the Invoice Number field, select the number of invoice that you created and against
which you are making this payment. Save and close the Payments form.
How to Create a Quick Payment Feature
The Oracle Payable feature allows you to create an automatic payment program on demand.
Quick Payment allows the selection of specific invoices that you need to pay. It then prints the
checks on a printer that you choose.
Prerequisite: Create an Invoice and note the invoice number.
To create a quick payment:
10. Select Invoices –> Entry –> Invoice Batches, from the main menu.
11. Query the invoice batch. Click the Invoices button
12. In the Invoices window, select the Invoice on which Quick Payment is to be made.
 13. Click the Actions button. Select the Pay in Full check box and then click OK. The
Payments window is displayed.
14. Select Quick in the Type field and select your bank account In the Bank Account field.
15. Click the Actions button. Select the Format check box and then click OK. A concurrent
request is activated. Note the ID number of the request and click OK.
16. Select View –> Requests to view the output of the concurrent request generated. Click
the Find button.
17. Click the Refresh Data button and then click the View Output button to view the output
online.
How to Create a Payment Batch
Prerequisite: Explore to the Invoice Batches window. Create a new invoice batch. Select Pay
Group in the Pay Group field. This will enable you to identify the invoices that will be included
in the Payment Batch.
Click the Invoices button. In the Invoices window, create a few invoices.
To create a payment batch:
6. Select Payments –> Entry –> Payment Batches. The Payment Batches window opens, as
shown –

The Payment Batches Form

2. Enter a name for the Payment Batch in the Batch Name field and enter the Payment Date
as today's date.
3. In the Pay Group field, select the Pay Group that you used to create the invoice batch.
4. Select the name of your bank account in the Bank Account field.
5. Select the name of your document in the Document field.
6. Enter a date that is 60 days in advance to the Current date in the Pay Through Date field.
Save the data.
 7. Click the Actions button. The Payment Batch Action window opens. Select the following
check boxes in this window:
i. Select Invoices
ii. Build Payments
iii. Print Preliminary Register

2. Click OK. A concurrent request is activated. You can view the output of this concurrent
request.
3. Go back to the Payment Batches window. Query your Payment Batch. The Status field
should have changed from the NEW to the BUILT option.
To Format and print the Payment Batch:
1. Open the Payment Batches window. Query your Payment Batch.
2. Click the Actions button. The Payment Batch Actions window opens. The Format check
box appears selected.
3. Select the Print Now check box. Click OK. A concurrent request is activated. Note the
request ID number and then click OK.
4. Select View –> Requests from the main menu. Click the Find button.
5. Click the Refresh Data button and then click the View Output button to view the output
online. View the Checks online and note the last Check number.
6. Go back to the Payment Batches window. Re-query your Payment Batch.
7. The Status field should now have been updated from the BUILT option to the
FORMATTED option. Click the Actions button.
Ensure that In the Payment Batch Actions window, the Confirm check
Note
box is already selected.
8. Click OK. The Confirm Payment Batch window opens. The Status field should have the
value, Printed.
9. In the To field, type the last Check number that you noted. Click the Confirm button and
then click OK.
10. Open the Payment Batches window. Re-query your Payment Batch. In the Status field,
the FORMATTED option changes to the CONFIRMED option.

How to Process Stop Payments

To stop a payment, you need to contact your bank and request a stop payment.
To record a stop payment in Oracle Payables:
7. Open the Payments window by selecting Payments –> Entry –> Payments. Query the
form for the Payment line on which a stop payment is to be made.
 8. Click the Actions button.
9. Select the Initiate Stop check box in the Payments Action window. Save and click Ok.
To release a Stop Payment made earlier on a payment line:
1. Open the Payments window.
2. Query the form to find the payment line on which a stop payment has been applied
earlier.
3. Click the Actions button.
4. Select the Release Stop check box in the Payment Actions window. Save and click OK.
Voiding Payments
Voiding a payment automatically reverses the accounting and payment records. This method
resets the status of the invoice to Unpaid.
To make a payment void:
1. Open the Payments window. Search for payment records.
2. Click the Actions button.
3. Select the Void check box in the Payment Actions window. You may also need to change
the Void and the GL date that you want Payables to use for the accounting distributions.
To change the Void and the GL date that are used for accounting distributions:
i. Select None from the Invoice Action field to change the status of the related
invoice to Unpaid.
ii. Select Hold for Invoices Action and select a hold name in the Hold window to
apply a hold to the related invoices.
iii. Select cancel for the Invoice action to cancel all related invoices and reset the
amounts to zero.

4. Save and then click OK.