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Automatic Offset Method. Enable Automatic Offsets by selecting Account or Balancing as your Offset Method if you want Payables to automatically create balancing entries for your invoice and payment transactions.

If you enable Automatic Offsets, for your invoice transactions, Payables creates one offsetting liability distribution for each invoice distribution, according to the Offset Method you choose. For your payment transactions, Payables creates a corresponding cash type payment distribution for each liability distribution when you pay an invoice from a pooled bank account. Payables creates one cash type payment distribution for each invoice distribution when you pay an invoice from an unpooled bank account. Payables uses the Asset account of the bank account for these cash distributions.

If you enable this option, you cannot enable any of the following Payables options: Allow Reconciliation Accounting, Enable Withholding Tax, or Allow Adjustments to Paid Invoices.

Suggestion: If you enable Automatic Offsets, you should always choose to post audited invoices and payments and have Journal Import create detailed journal entries so that General Ledger can create the necessary detail balancing journal entries.

• None. Do not use Automatic Offsets. For your invoice transactions, Payables creates one liability distribution, and for your payment transactions, Payables creates one cash type payment distribution.

• Account. When creating the offsetting liability account, Payables uses the expense GL Account from the invoice distribution and overwrites the account segment with the default liability account from the supplier site.

• Balancing. Payables uses the supplier site's default liability account and overwrites the balancing segment (usually the cost center code) with the balancing segment from the expense distribution GL Account.

• Allow Reconciliation Accounting. Enable this option if you want Payables to create reconciliation accounting entries for cash clearing, bank charges, bank errors, and exchange rate gain/loss when you reconcile payments using Oracle Cash Management. When this option is enabled, Payables posts each payment you issue twice: once as an unreconciled payment, and again as a reconciled payment. When you create a payment, Payables creates accounting entries for unreconciled payments to debit the AP Liability account and credit the Cash Clearing account you specify. When you reconcile the payment using Oracle Cash Management, Payables creates accounting entries to debit the Cash Clearing account and credit the Cash account. When you reconcile the payment, Payables also creates accounting entries to record bank charges, bank errors, and exchange rate gains or losses that occur between payment issuance and payment reconciliation. See also: Accounting Methods

If you do not enable this option, you can still reconcile payments using Oracle Cash Management. However, Payables creates no reconciliation accounting entries.

When this option is not enabled, Payables posts each payment once. When you create a payment, Payables creates accounting entries to debit the AP Liability account and credit the Cash account.

If you enable this option, you cannot enable Automatic Offsets.

• Allow Future Payment Method. Enable this option if you want to use the Future Dated and Manual Future Dated Payment methods in Payables. If you use the Future Payment Method, you can create a payment document with a future date (maturity date). The payment document instructs your bank to disburse funds to your supplier's bank on the maturity date. An example of a future payment document is a Bill of Exchange. See also: Future Dated Payment Method.

• Primary Accounting Method. Accounting method you use for your primary set of books. Although the Primary Accounting Method is not a required field, you cannot transfer invoice and payment information to your general ledger until you have entered a primary accounting method. If you use General Ledger with Payables, Payables creates journal entries according to the accounting method you choose. You cannot change your primary accounting method after you create any journal entries.

• Accrual

• Cash

• Secondary Accounting Method. If you want to use combined basis accounting, choose Accrual or Cash for the accounting method you use for your secondary set of books. If you do not want to use combined basis accounting, choose None.

• Accrual

• Cash

• None

• Set of Books (Primary/Secondary). Payables displays the primary set of books you selected in the (Choose) Set of Books window. If you use a secondary set of books, select its name from the list of values. Your secondary set of books must have the same currency, chart of accounts, and calendar as your primary set of books.

• Liability

• Audit. Payables maintains detail audit information for your liability transactions, when you post to your Accrual set of books.

• Partial Audit. Payables maintains audit information and invoice level accounting records for your liability transactions, when you post to your Accrual Set of Books. This option groups liability lines by invoice, and does not include the distribution level detail that the Audit option includes.

• No Audit. Payables maintains summary records of the invoice and payment transactions for each unique liability account, when you post to your Accrual set of books.

• Gain or Loss. Method for maintaining audit information for your foreign currency gains and losses if you use multiple currencies.

• Audit. Payables maintains detail audit information for your gain or loss transactions, when you post payments to your Accrual set of books.

• No Audit. Payables maintains summary records of the invoice and payment transactions for each unique foreign currency gain or loss account, when you post payments to your Accrual set of books.

• Discount Taken. Method for maintaining audit information for your discount distributions.

• Audit. Payables maintains detail audit information for your invoice discount transactions, when you post payments to your Accrual and/or Cash set of books.

• No Audit. Payables maintains summary records of the invoice and payment transactions for each unique discount taken account, when you post payments to your Accrual and/or Cash set of books.

• Cash Clearing. You only need to enter a value in this field if you enable either the Allow Future Payment Method Payables option or the Allow Reconciliation Accounting Payables option.

• Audit. Payables maintains audit information and detail accounting records for your future payment and cash clearing transactions, when you post payments to your Accrual and/or Cash set of books.

• No Audit. Payables maintains only summary records of the transactions for each unique future payment or cash clearing account, when you post payments to your Accrual and/or Cash set of books.

• Rounding. You need to enter a value in this field if you use multiple currencies.

• Audit. Payables maintains audit information and detail accounting records for your multiple currency transactions, when you post payments to your Accrual and/or Cash set of books.

• No Audit. Payables maintains only summary records of the transactions for each unique rounding errors account, when you post payments to your Accrual and/or Cash set of books.

• Create Summarized Journal Entries. If Payables creates summarized journal entries, Payables combines all the invoice or payment transactions for a particular account into a single journal entry line when you submit the Payables Transfer to General Ledger program. If you do not create summarized journal entries, Payables creates a journal entry line for each invoice or payment distribution.

You cannot enter a value in this field if General Ledger is not installed. If General Ledger is not installed, Payables transfers the accounting information to your general ledger, but does not create journal entry batches, headers, or lines.

See Also

Accounting Methods

Defining Sets of Books

Posting when you Use Oracle Cash Management

Automatic Offsets