|Oracle Lease and Finance Management User's Guide|
Part Number E13583-05
This chapter covers the following topics:
Disbursements are payments to suppliers or other third parties for the cost of equipment, maintenance, insurance, and other service expenses. Some disbursements, such as passthrough and investor payments, are processed as the result of billing or cash receipt transactions.
Lease and Finance Management processes the following three primary disbursement types:
Payments to suppliers for contract assets, expenses, services, and miscellaneous charges.
Payments related to billing and receipts from customers for fees and services. This includes passthrough payments.
Payments to investors in securitization agreements.
The Lease and Finance Management disbursements business process is outlined in the following table.
|Set Up Vendors and Pay Sites||Oracle Procurement or Oracle iSupplier||Set up new vendors and pay sites.|
|Define Vendor Disbursement Terms||Lease and Finance Management||Define vendor disbursement terms for your new or existing vendors and their pay sites.|
|Generate Disbursements||Lease and Finance Management||You can generate disbursements in Lease and Finance Management either through funding requests or by processing transactions, such as invoices or receipts, which result in related payments to third parties.|
|Consolidate Disbursements and Create Payables Invoices||Lease and Finance Management||Using concurrent programs and the vendors’ disbursements terms, you consolidate and process disbursement transactions to create payable invoices in Oracle Payables.|
|Process Payments||Oracle Payables||Using Oracle Payables, you can review and approve invoices and make cash payments to vendors and suppliers.|
You can set up vendors and pay sites in Oracle Procurement. Vendors are set up as suppliers and the supplier pay sites are included. To set up vendors and pay sites, see Oracle Procurement User's Guide.
If you want to consolidate disbursements to a vendor onto a single payable invoice, schedule disbursements for payment or pre-number the payable invoice tax reference numbers, you must create vendor disbursement rules in Lease and Finance Management and associate them to your vendors’ pay sites.
After you set up vendors and pay sites in Oracle Procurement or Oracle iSupplier, you can create vendor disbursement terms in Lease and Finance Management and associate them to one or more vendors. New vendors can be associated to existing terms or you can create a new term and associate vendors as part of the process. However, you can have only one valid term for the same vendor pay site, date and type of disbursement. This allows Lease and Finance Management to automatically process your disbursements and create payable invoices.
This section consists of the following tasks:
Create Vendor Disbursement Terms
Search Vendor Disbursement Terms
Define Single Vendor Disbursement Term
Search for Single Vendor Disbursement Term
To define vendor disbursement terms, navigate to Setup > Disbursements, click Create and complete the following steps:
Define Term Attributes
Define Consolidation Parameters
When you create a new disbursement term, you first enter term attributes. The following table describes values for disbursement terms.
|Operating Unit||You must select an operating unit for the new term. You can select any operating unit authorized in your security profile. Only vendor pay sites within the same operating unit can be associated to the new term.|
|Term Name||Name of the Term.|
|Term Description||A short description of the term.|
|Effective From Date||The date after which the term can be applied to your disbursement transactions. You can also set an effective date range for each related supplier.|
|Effective To Date||The date after which the term will not apply to your disbursement transactions. The date of the transaction, not the date you prepare your invoices, is compared to the effective date range to determine the applicable term for a vendor pay site.|
Specify the types of disbursements that are subject to the term. For example, you may want to apply the term to only those payments you make for assets and expenses, but not for services. You decide which types of disbursements to include based on the purpose of the stream types associated with your disbursement transactions. The stream type purposes are defined in Lease and Finance Management and you cannot add purposes to the list.
For example, if you want the term to apply to passthrough payments made to third parties associated to your contracts, you select the stream type purpose Passthrough in the term attributes. Then when you associate that term to the vendor passthrough items on a contract that generate disbursement transactions for the vendor will use the term you crated to determine whether to consolidate transactions, when to pay, etc.
Specify the dates for which the term is valid. Lease and Finance Management will prevent you from setting up multiple terms for the same vendor pay site for the same dates and disbursement type. Once your terms are set up, only the disbursement transactions that match the other criteria and fall within the valid dates are subject to the processing rules in the Vendor Disbursement Term.
In the Disbursements search page, click Create to create a new term. Enter disbursement term attributes and click Next to move to Step 2.
After you define the basis for applying the Vendor Disbursement Term, you can set up a schedule for consolidating disbursement transactions onto a single payable invoice. The following table describes the criteria by which disbursement transactions are automatically grouped
There are two types of criteria used to group invoices: automatic and user-defined. The automatic criteria are applied because there are implicit rules in Oracle Payables about the types of disbursements that can be consolidated into an invoice. The other criteria are criteria you set up in your Vendor Disbursement Terms
The following table describes the criteria used automatically to group your disbursement transactions.
|Vendor and Pay Site||You can only group transactions together for a single vendor pay site and may not consolidate transactions for different vendors or pay sites onto a single payable invoice.|
|Payment Method and Payment Term||A consolidated payable invoice can only have one payment method and one payment term. Each disbursement transaction is associated with a payment method and payment term derived from the vendor or transaction you set up in Lease and Finance Management on a contract, agreement, request, etc. Only transactions with the same method and term can be grouped for consolidation.|
|Liability Account||Oracle Payables uses only one liability account per invoice. So only disbursement transactions set up to derive the same liability account based on your accounting setups can be grouped together for a consolidated invoice.|
|Currency||Only disbursement transactions with the same currency can be grouped together on a consolidated invoice.|
|Funding Type and Insurance Policy Number||Disbursement transactions from funding requests or associated to insurance policies cannot be consolidated with other types of disbursements.|
|Contract Number||Only used for disbursement transactions from Borrower Payments for Revolving Loans. Disbursements of this type cannot be consolidated across contract numbers.|
In addition to automatic consolidation, you can also set up a schedule for additional consolidation across disbursement transaction dates and disbursement types. For example, you can also specify values that will automatically consolidate on a particular schedule
The following table describes criteria to group your disbursement transactions.
|Consolidate Across Invoice Dates||The enabled check box allows you to set up a disbursement schedule that may span multiple transaction dates for your eligible disbursements.|
|Frequency||Determines how often a payable invoice is generated to consolidate your eligible disbursement transactions.|
|Scheduled Month||Indicates the first month to begin the consolidation schedule.|
|Scheduled Day of the Month||Determines the day of the month to generate a consolidated invoice for your eligible disbursement transactions.|
|Consolidate Across Disbursement Types||The enabled checkbox allows you to group disbursement transactions of different types onto a single invoice. If you do not enable this option, you can still consolidate across transaction dates, but each eligible disbursement type you selected in Step 1 will appear on a separate invoice. Some disbursement types cannot be consolidated. See Disbursement Transaction Grouping Criteria in Step 2 above.|
Click Next to move to Step 3.
To simplify the setup process, you can define the vendor disbursement term once, and then apply it to multiple vendor pay sites. You first select a vendor, and then you select each pay site you want to associate for the new term. You can specify the date range that the term applies to each vendor pay site and reserve a tax reference invoice number range. Lease and Finance Management tracks the numbers assigned, in order, and sends the next available number as the Supplier Tax Invoice Number when importing invoices into Oracle Payables.
Note: Oracle Payables assigns an actual invoice number and you can set up numbering ranges and rules to generate logical invoice sequences.
You must select at least one vendor and one vendor pay site to create the new term. However, you will also be able to associate the term to a specific vendor as you add new vendor relationships
Click Next to move to Step 4.
After you review your work, click Finish to save the new term
You can search and view vendor disbursement rules from the Disbursements page by navigating to Setup > Disbursements, entering search parameters, and clicking Go. You can also start the creation of new rules or view and update existing rules.
Your search views rules that span more than one operating unit, and include multiple vendors and pay sites.
You can also associate an existing disbursement term to a single vendor or vendor pay site by navigating to Vendors > Disbursement Terms.
To associate a vendor to a term, first select the operating unit of the term and vendor you want to associate then click Create. On the Create page, you first select a term you want to use for the vendor, then you select a vendor and at least one of the vendor’s pay sites. You can apply the term to each pay site for a different date range. This allows you to add or remove pay sites from using the term for disbursement processing.
You can also set up a specific supplier tax invoice numbering sequence range for each site. See Step 3 for a description of the invoice number sequence range.
After you create terms for your vendors, you can search for a term for a single vendor or pay site by navigating to Vendors > Disbursement Terms. From the search results, you can start the creation of a new association or view and update existing associations. You must select an operating unit value and enter at least one other search criteria value to conduct your search.
To generate disbursements you must use one of the following processes:
Complete and approve a funding request
Set up and process a passthrough schedule on a contract, for fees, services, or evergreen
Set up eligible investor agreement with a disbursement schedule
Generate disbursements for insurance policies you purchase for your lessees from insurance providers
Important: Not all disbursement types can be consolidated. Please see Automatic Disbursement Transaction Grouping Criteria.
Lease and Finance Management uses the Vendor Disbursement Terms you set up and associate to your vendors and vendor pay sites to process the disbursement transactions you generate. For example, suppliers may request that you raise invoices on their behalf when certain types of payments, like passthrough payments, become due. Unless you want to group disbursements only for a specific contract, you must set up Vendor Disbursement Terms for those vendors in Lease and Finance Management to specify the processing rules to generate supplier invoices automatically. You can set up passthrough payment rules for a specific contract.
You can also specify conditions on how to consolidate different types of disbursements into a single invoice. Using Oracle Payables invoice line functionality, the details of each disbursement are available for each invoice line, such as contract number, stream type, asset number, and insurance policy number.
After you generate disbursement transactions, you must run a concurrent program to apply the Vendor Disbursement Terms you setup for your vendors and vendor pay sites, along with the implicit invoice consolidation parameters to create payable invoice records and populates the payable interface table. In order to complete the transfer of these records to Oracle Payables and create actual invoice transactions, you must run a concurrent program.
Lease and Finance Management defines funding as the payment for assets and expenses associated with the origination of a contract. The funding process allows you to generate payable invoices and make payments to vendors and suppliers for the items you add to your lease and loan contracts.
In Lease and Finance Management, the funded amount cannot exceed the inherent value of the contract at booking, excluding Manual Disbursement and Supplier Retention type fundings. In other words, you can fund the total cost of the underlying value of the contract, but not more than the total cost at the time of booking. The inherent value of a lease or loan contract includes the cost of the equipment assets financed on the contract plus any related expenses for fees and services. The inherent value does not include accrued interest paid prior to the start date or other such costs not included in the capital cost. Some items reduce the inherent value, such as trade-ins and down payments retained by a supplying vendor. This validation does not apply to fundings for revolving type loans.
If you also disburse funds to vendors prior to contract booking, through a pre-funding type request, you may temporarily have disbursed more than the inherent value of the contract. You should reverse the pre-funding amount by creating and approving an Adjustment funding request.
To avoid overfunding at booking or funding, you may configure your booking or funding request approval rules, or configure a checklist item on your funding or booking checklist. Once you create and approve funding requests, Lease and Finance Management creates disbursement transactions. You can associate rules to your vendors and vendor pay sites in Lease and Finance Management that are used to process the transactions and create invoices in Oracle Payables. To make cash payments to your vendors, you process and approve payments in Oracle Payables once you generate invoices for your disbursement transactions.
The following table describes Lease and Finance Management funding types to request funding for contracts.
|Pre-Funding||You create Pre-Funding Type requests to disburse amounts before booking (activating) a contract. You can create pre-funding requests for any amount and for any contract status. Later, prior to booking, you can create an adjustment by creating a pre-funding request for a negative amount. You can setup rules on the contract to charge interest for any amounts that are pre-funded.|
|Asset Funding||You create Asset Type funding requests to pay equipment-supplying vendors. In order to fund assets, you must associate a Lease Vendor party to the asset on the Asset Details page of the contract in the Supplier Invoice section. Assets with no Lease Vendor cannot be funded. You may pay for all or a partial amount of an asset on a funding request, but you cannot pay for more than the asset cost. Subsidies associated to an asset can be netted from the funding total. For more information, See Subsidies. |
You can only fund assets on contracts with new assets and not re-leased assets or real estate assets.
|Expense Funding||You create Expense Type requests to pay for expenses you setup on contract fees and services. You may pay for all expenses or partial amounts but you may not pay for more than the total expense amount. If you set up an expense schedule (expenses due periodically for more than one period), you cannot pay for more expenses than are due as of the funding date you entered.|
|Supplier Retention||You create Supplier Retention Type funding requests to off set other funding amounts if a supplier has retained cash payments you would normally bill for a contract. The supplier retention does not reduce the fundable amount, but you can use the adjustment invoice in Payables to offset your final cash payments.|
|Manual Disbursement||You create Manual Disbursement Type funding requests to make payments to a vendor or supplier that you want related to the contract, but are not specific to any equipment asset or expense. A manual disbursement can be made while the contract is active or not, can be for any amount and is not included in the total fundable amount for the contract.|
|Borrower Payments||Applies only to Revolving Loans when a revolving loan is authored, associated to the credit line type Revolving, and booked. The revolving loan does not have any asset lines or payments defined, only the variable interest billing schedule and variable interest rates that apply. The customer on the contract is also set up as a Vendor.|
As the customer requests funds against the revolving loan, the funding request type Borrower Payment should be selected, with the supplier as the customer on the revolving loan. On approval the funding request creates a payable invoice in Oracle Payables and is paid through Payables. Upon payment, the principal balance is updated on the Revolving Loan contract.
Based on your role, you may search, view, create, update, and approve funding requests from two locations in the Lease and Finance Management. Users who typically review and approve funding requests can access the funding summary from the Risk Management Funding Requests tab by navigating to Risk Management > Funding Requests.
Users who process contracts for activation can access the funding summary from the contracts detail page in the Funding subtab. You can select a contract and view the funding subtab by searching for a contract in the following menu locations: Customers > Contracts, Operations > Contracts, Asset Management > Contracts. The Funding Summary page displays the current funding status of a contract, the funding totals by category and allows you to create, view, update or submit a funding request.
To find a funding request, you must first search for and select a contract. Select the contract and click the contract name hyperlink to view the contract details page. Click the Funding tab to view the funding summary.
Any existing funding requests are displayed in a summary table. From the summary table, you can perform the following actions:
View a request
Submit a request for approval
Cancel the request
Create a new request
To view a request, click on the hyperlink request number. The view page displays all pertinent information about the request. For Asset Type funding requests, you can also see a table of assets on the request.
To update a request, click Update. Submitted or cancelled requests cannot be updated. Use the Asset Lines tab in the Funding Request details page to search for assets, update, delete, and add assets associated with the contract. You can change the request amount on the Update page.
Click Apply to save your update changes.
To initiate the funding approval workflow for a completed request, you can either click Submit for a funding request from the funding summary table or click Submit from the request details page.
When you submit a funding request, any related funding checklist items are evaluated and marked as Pass/Fail. The details of the pass or fail status of the checklist items is passed to the seeded workflow so the funding request approver can view them. You can associate checklist items to your contract template, a lease application template used to create your contract or to a credit line associated to your contract or the master lease agreement associated to your contract.
You can configure the funding approval flow to route the approval to an approval hierarchy including a hierarchy you have setup in Oracle Approvals Manager.
If you decide you want to discard a request, you can cancel it. You cancel a request by clicking Cancel for the request in the funding summary table. Once you cancel a request it cannot be updated or submitted for approval. Amounts on a cancelled request are not counted in the funding total. You cannot cancel requests that have already been approved.
Before creating a funding request, you must have completed the following prerequisites:
Created vendors and associated pay sites.
If required by your process, you have setup and associated a Vendor Disbursement Term to the vendor and pay site in Lease and Finance Management.
Created a contract header, assets, fees or expenses as required by the funding type.
Set up the vendor as a Lease Vendor party for the contract. For Asset Type fundings, you have associated the vendor to the asset on the asset details page in the contract in the Supplier Invoice section.
In order to approve requests, you must have meet all of the conditions for any associated checklist.
To create a funding request, complete the following steps.
From the funding summary page, select the funding type you wish to create and click Go to launch the Funding Request Creation train. After you save your work in the first step, you can cancel the train and return to complete the request later. Enter the required and optional fields to create the funding request. The fields you enter depend on the funding request type you selected.
The following table describes funding request fields and types:
|Field Name||Description||Funding Request Type|
|Funding Request||The name of the funding request.||All|
|Vendor Number||The payable account number of the vendor you want to pay. |
If you are making a Borrower Payment (ie, paying a customer), you must have setup a supplier account in the Disbursement Details for your Lessee party on the contract. That vendor is used automatically as the vendor for your request.
|Vendor Site||The pay site for the vendor to which you will make the payment.|
If you are making a Borrower Payment (ie, paying a customer), you must have setup a supplier account in the Disbursement Details for your Lessee party on the contract. That vendor pay site is used automatically as the vendor pay site for your request.
|Payment Method||Select the payment method you will use to make the cash payment to the vendor.||All|
|Pay Group||If you intend to group payable invoices together for payment processing purposes, you may assign a Pay Group. For more information on using Pay Groups, see Oracle Payables User Guide.||All|
|Payment Term||Determines the basis on which you calculate the date you intend to make a payment to the vendor. Select a term based on your agreement with the vendor. |
Select a term that is not Immediate may impact the payment processing dates in Oracle Payables in addition to the Due Date you enter for the disbursement transaction.
|Date Due||The date the payment to the vendor is due. This is the disbursement transaction date. The disbursement transaction date determines the valid disbursement terms that may apply for the selected vendor and vendor pay site.||All|
|Amount||Enter the amount you want to pay for this funding request. For expenses related to fees and services, the amount may not exceed the value of the expenses due based on the due date you enter (ie, you cannot overfund expenses).||Expense, Manual Disbursement, Pre-Funding, Supplier Retention, Borrower Payment|
|Stream Type||Select the stream type to associate to the funding request. |
For pre-funding and borrow payment type requests, you setup a single stream type on your stream generation template for the purpose associated with the funding request type. The single stream type associated is automatically selected for your requests.
For more information on setting up Stream Generation Templates and Stream Types, see the Oracle Lease and Finance Management Implementation Guide.
|Expense, Manual Disbursement, Supplier Retention|
|Quick Fund Checkbox||Select Quick Fund Assets to fund the full amount of all the assets associated to a contract. You will see a summary of the assets and amounts on the next train step and can make adjustments. If you do not select Quick Fund, then you must select specific assets.||Fund Asset|
If you are funding assets, the second step of the train allows you to view and update the list of assets to fund. Otherwise, the train goes directly to the Funding Checklists page. If you selected the Quick Fund checkbox on the funding request step, you can view the assets and amounts. Otherwise, click Add Assets.
On the Add Assets page, you can search for and select assets from the contract to fund. Once you add assets to your funding list, you can enter the amount you want to pay. You can fund any partial amount up to the full cost of the asset. By default an amount for any subsidy related to the asset with the method Net is automatically calculated for you proportionally to the funding amount you entered. You can update the subsidy amount for any partial subsidy amount up to the total amount of subsidy to be collected for the asset. You can update or remove assets from the list by selecting the assets and clicking Remove or Update.
Click Apply to save your changes.
Even if you selected Quick Fund, you can update the assets and amounts you want to fund. To update the amount, select the assets you want to update and click Update, then enter the new amount and click Apply. To remove assets from the list, select the assets and click Remove.
Click Next to go to the next step.
From the checklists page, you can view and update the items of the checklist applicable to the contract. Any related funding checklist items are evaluated and marked as Pass/Fail. The details of the pass or fail status of the checklist items is passed to the seeded workflow so the funding request approver can view them. Only checklist items designated for funding are displayed on the checklist. You can associate checklist items to your contract template, a lease application template used to create your contract or to a credit line associated to your contract or the master lease agreement associated to your contract.
After completing the checklist items, you can either save your request or submit it to the approval workflow. You can cancel a request at any step of the train before you submit the request for approval.
Lease and Finance Management allows you to set up and execute checklists to track activities and action items during the process leading up to funding approval. You determine the items in the checklists and control who can update the checklist based on roles and responsibilities in the credit and funding process.
If you are the credit manager, you can create a checklist of required activities (for example, tasks, documents, and approvals) to be completed prior to approval of a funding request.
Lease and Finance Management uses the following types of checklists:
Funding Request Checklist
Funding Checklist for a Lease Application Template
Credit Line Checklist
You associate a funding request checklist template to a credit line prior to credit line activation. Each time you create a funding request for a contract associated to the credit line, a copy of the funding request checklist template is created and you perform the action items on the funding request checklist prior to approval of funding.
A funding checklist can also be attached to a Lease Application Template. For information on Lease Application Templates, see Create And Manage Lease Application Templates. When you use a Lease Application as the source for a new contract, any funding items on the checklist associated to the Lease Application’s template are performed for funding requests you create for that contract.
At the time of funding approval, the funding approver receives a notification informing them that a funding request is ready for their approval. The notification contains a status for items on the checklist. The notification shows an error message if any mandatory items are not checked off. The funding approver receives a warning message if all mandatory items are checked off but any recommended items are not checked off. You can configure your approval workflow to take specific actions, if necessary, based on the status of checklist items.
When the final funding approver approves a funding request, it is made available to the Lease and Finance Management disbursement process, which occurs when the Pay Invoice Transfer concurrent program is run.
You can set up checklists that are used to track items required to activate a credit line. When you create a new credit line, you associate a checklist. The checklist items are evaluated when you submit the credit line for approval to activate it.
For more information Credit Line Checklists, see Credit.
To set up a credit checklist, see Set Up Credit Checklist, Oracle Lease and Finance Management Implementation Guide.
For information on passthrough disbursements, see Passthroughs
For information on disbursements in investor agreements, see Disbursement Processing, Investor Agreements.
After you have set up vendor disbursement rules and generated disbursements, the disbursement programs you run will use the new rules you created to consolidate, process, and generate payables invoices that can be viewed in Lease and Finance Management or the Oracle Payables Invoice Workbench. Once your invoices are created in Payables, you can use Payables to process payments for your invoices.
Lease and Finance Management integration with Oracle Payables allows multiple options for viewing invoices for disbursement transactions. You have the following options to view invoices generated and imported into Payables.
Payables Invoice Workbench
Investor Management Tab
Vendor Disbursement Center
Your vendors can search for and view invoices for their accounts when you set them up to use Vendor Self-Service. Once disbursements have been processed and invoices generated and imported into Oracle Payables, a vendor can search for them in the Vendor Self Service portal.
To search for an invoice, navigate to Sales > Disbursements and enter search criteria.
After searching for an invoice, the vendor can view invoice details such as invoice line details and payment information.
You can search for and view Lease and Finance Management invoices in the Oracle Payables Invoice Workbench.
You can search for and view invoices generated for investors by navigating to Investor Management > Transactions > Payables Invoices. Search criteria include invoice number, invoice date, investor agreement number, of investor name.
You still use existing consolidation rules on your investor agreements to consolidate investor disbursements into a single invoice. You can view the contract number for each line on the consolidated investor disbursement payable invoice.
You can search for and view invoices for vendors in the Vendor Disbursement Center, which allows you to view the details of an invoice line from the Disbursements view. To view an invoice, you can search by date or pay site.
After searching for a vendor’s invoice, you can click on an invoice to see invoice line details. The disbursement type, asset number, contract number, and contract line type are shown for each invoice line. You can also view payment details for the invoices you paid using Oracle Payables payment processing.
You can view invoice transaction accounting by navigating to Operations > Transactions. The invoice line view shows details for each line in addition to the accounting entries.
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