Oracle® Fusion
Applications
Financials Implementation Guide 11g Release 6 (11.1.6) Part Number E20375-07 |
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This chapter contains the following:
Define Automated Invoice Processing Configuration
Manage Common Options for Payables and Procurement
Manage Tax Reporting and Withholding Tax Options
Define Payables Tax and Withholding
Define Invoicing and Payments Configuration for Rapid Implementation
Paper invoices are still prevalent in today's business world prompting most organizations to implement some form of imaging capability for their payables department to help reduce receipt-to-payment cycle and meet audit requirements. This involves implementing multiple point solutions with the following challenges:
Components from different vendors specializing in scanning, data extraction, storage, and workflow based on proprietary technology require dedicated IT staff to set up, integrate, and maintain, resulting in higher maintenance costs.
Disparate platforms, operating systems, and release and certification cycles increase the risk of incompatibility and maintenance overhead. When an enterprise resource planning (ERP) system is upgraded or patched, reimplementation may even be required.
Given this a la carte selection process, the result is a disjointed bolt-on solution footprint unique to each implementation that cannot leverage native ERP capabilities and efficiencies. Such implementations often rely on custom user interfaces or push raw data directly through open interfaces, and completely bypass native ERP transaction entry and validation.
Oracle is the only vendor in the market today offering a fully integrated invoice imaging solution that provides a seamless user experience, supporting the entire invoice life cycle from scanning, recognition, and routing, to invoice entry, approval, and payment - all based on a unified security model. This end-to-end solution is certified and supported by Oracle on a common provisioning framework, with minimal setup and configuration required, thereby reducing the total cost of ownership.
Note
Imaging is currently not available in Oracle Cloud implementations.
The Oracle Fusion Payables invoice imaging process begins with invoices arriving in the mail room or by e-mail.
For invoices that arrive in the mail room:
Imaging specialists prepare and sort the invoices based on parameters, such as geography, invoice amount, and due date. The imaging specialist then scans the invoices and reviews the images in the batch.
The imaging specialist can use the indexing feature in Oracle Document Capture to enter additional attributes, which can be used to route the invoice images to accounts payables specialists for invoice entry. The attributes are based on business requirements and might not be part of the invoice. Once this done, the imaging specialist commits the batch.
For invoices that are received by e-mail:
Imaging specialists review the invoices received in e-mail attachments. Additional attributes can be included in the e-mail subject to route the invoice images to accounts payables specialists for invoice entry.
The imaging specialist then sends the e-mail, with the invoice image as an attachment, to an e-mail server for import by the Oracle Document Capture Import Server.
Images are then sent over a network file share to a central Oracle Forms Recognition server for intelligent data recognition and extraction. Any invoices that fail data extraction or validation are sent to Oracle Forms Recognition Verifier for manual resolution.
Once data recognition is completed, the invoice images, header attributes, and additional attributes are sent to Oracle Imaging and Process Management for storage and routing to accounts payable specialists using Oracle BPEL Process Manager workflows.
Accounts payable specialists can view the list of scanned images for invoice entry, along with the additional routing attributes, in the Scanned Invoices region of the Invoices work area. Accounts payables specialists proceed with invoice entry using dual monitors, where the invoice entry page is displayed on one monitor, and the image is displayed on the other. During invoice entry, key invoice header attributes are already prepopulated with the data extracted by Forms Recognition, thus reducing entry time and data entry errors.
Document Capture plays the first crucial role in digitizing paper invoices to images to support the automation necessary for streamlining invoice processing. It is designed for high volume, centralized image capture, where batches of invoices can be scanned at a time. The architecture supports implementation scenarios where companies can centrally scan all invoices by having suppliers send invoices to one location, or they can scan documents in field offices using multiple Document Capture instances.
Document Capture runs on desktop personal computers connected to scanners, and converts paper invoices to industry-standard image formats. It supports most enterprise class scanners and the leading high-volume document scanning interfaces: Image and Scanner Interface Specification (ISIS), Kofax Adrenaline, and Kofax VirtualReScan. Document Capture includes instant image processing with built-in features, such as deskew, despeckle, and black border removal to improve scan quality.
Document Capture also provides image thumbnail support during batch review so imaging specialists can quickly review the quality of all images within a batch. Imaging specialists can also append, insert, replace, and delete pages within a batch using drag-and-drop functionality.
Document Capture Import Server imports images, such as documents sent as e-mail attachments.
Once invoices are scanned, and additional attributes entered using the indexing feature, or invoices are imported by Document Capture Import Server, the images are automatically sent to Forms Recognition for intelligent recognition, the next step in invoice processing.
Forms Recognition offers cutting-edge intelligent recognition capabilities for extracting the key invoice header data from scanned images. Forms Recognition also transfers the additional routing attributes that may have been captured in Document Capture to Oracle Imaging and Process Management. This extracted data is later prepopulated directly into the invoice entry user interface.
Unlike other solutions that use supplier-specific templates to extract information, Forms Recognition can intelligently locate data within the invoice, regardless of its location on the image and whether or not it has processed invoices from that supplier before. As new suppliers are added, or an existing supplier changes its invoice layout, Forms Recognition can extract data from these new invoice layouts without additional configuration.
Forms Recognition has self-learning intelligence to improve scan accuracy for suppliers over time, and provides flexibility to define specific rules for attributes, such as format masks on invoice number and PO number, to further boost recognition results. You can also configure validations for the extracted data against the Oracle Fusion Applications database. This results in highly accurate data recognition that dramatically decreases the need for human intervention to correct and resolve exceptions.
For Payables invoice processing, PO number, supplier, invoice number, invoice amount, invoice date, customer taxpayer ID, and business unit are extracted as part of the predefined configurations.
Upon successful data recognition, the invoice images and extracted information are automatically sent to the Imaging and Process Management repository. Imaging and Process Management then stores the invoice images in the content repository and routes them to individual accounts payable specialists. Once the Forms Recognition application is set up, all these steps are executed without human intervention.
Forms Recognition consists of the following components:
Oracle Forms Recognition Designer
Oracle Forms Recognition Runtime Service
Oracle Forms Recognition Verifier
Forms Recognition Designer enables you to customize the invoice recognition process, such as information to be extracted, and verification of the processing results. Such configurations are stored in the Forms Recognition project file and its associated initialization (.ini) file.
The project file contains the definition of the attributes to be recognized, database queries to import list of values for validation, and so on. Payables delivers a preconfigured initialization (.ini) file to be used for your implementation project.
The Forms Recognition Designer is used only during implementation time and is not part of daily processing.
Forms Recognition Runtime Service runs in the background as a server process. Each Forms Recognition Runtime Service instance can be configured to perform specific steps within the overall process, and multiple Forms Recognition Runtime Service instances can be run on a single master server. For scalability purposes, you can set up multiple servers, each running multiple instances of the Forms Recognition Runtime Services that can be centrally managed through the Forms Recognition Runtime Service Management Console.
Each Forms Recognition Runtime Service instance can be configured to either run the Import, Export, and Clean Up service, or the Recognition, Classification, and Extract service. Batches that cannot be completely processed by Forms Recognition Runtime Service are forwarded to the quality assurance application called Forms Recognition Verifier to be corrected manually.
Forms Recognition Verifier is the quality assurance application of the Forms Recognition suite. The application detects all documents with data recognition problems and presents them to the operator for verification.
If Forms Recognition Runtime Service fails to extract and validate an invoice in a batch, the entire batch is marked as failed and will not be exported to the image repository. Recognition failure is most likely due to one of the following:
Extracted values for one or more attributes failed validation. The Payables imaging solution includes a number of attribute-level validations.
Forms Recognition could not find a value with a sufficient confidence level for one or more attributes.
Stamps or notes on the documents make sections illegible for Forms Recognition.
Information is missing from the scanned image.
An accounts payable specialist reviews incomplete batches using Forms Recognition Verifier and resubmits them after correcting the exceptions.
The Forms Recognition Verifier, like Document Capture, is another client application providing multiple deployment options. Forms Recognition Verifier can either be set up on each designated user's workstation, or users can access Forms Recognition Verifier instances using remote desktop technologies.
Imaging and Process Management is part of the Oracle Enterprise Content Management suite. This is where invoice images are stored and routed to accounts payable specialists. For the rest of the invoice life cycle, any reference to the invoice image points to the Imaging and Process Management repository so documents are never replicated.
Images sent by Forms Recognition are imported by the Imaging and Process Management Input Agent, which is a scheduled process. Images must be associated with a data file containing information on the image location, as well as the extracted data. For the invoice imaging solution, the data file is generated by Forms Recognition Runtime Service after successfully completing the data recognition.
Imaging and Process Management and the content server, part of Enterprise Content Management, give you the flexibility to attach configurable storage and security policies to content. For example, for invoices you can set metadata to determine how long the documents will be stored, on what storage device, and who will be able to access and view them. The ability to move images over storage devices as needed maximizes the use of your infrastructure.
After images are stored, Imaging and Process Management creates a BPEL Process Manager task for each invoice, which then routes the images to appropriate accounts payables specialists for data entry using key invoice header and additional attributes. Imaging and Process Management also provides an image viewer embedded within the Payables application, allowing accounts payable specialists to review and annotate the images.
Imaging and Process Management utilizes business process management technologies for image routing. Image routing is done through a BPEL process containing the payload information as well as business rules. A new instance of the BPEL process is generated when an invoice image is saved successfully in Imaging and Process Management, which is then routed based on the configured rules.
Once routing rules are set up, the whole process is automated so accounts payable personnel do not have to worry about keeping track of invoices that need to be assigned to various accounts payable specialists for data entry.
Payables provides a sample approval rule for image routing based on the invoice amount. This rule must be modified for the implementing company's application users. Additional routing rules can also be configured using key invoice header attributes, as well as additional attributes.
The Invoices work area optimizes the operational efficiency by leveraging information driven architecture to push scanned invoices automatically to accounts payable specialists so that they can proceed with invoice entry without searching for the information.
The main user interfaces pertinent to the invoice imaging flow are as follows:
Invoices work area, where invoice images assigned to the accounts payables specialist are shown in the Scanned Invoices region. The Scanned Invoices region also enables the accounts payables specialist to view the additional routing attributes that were captured and may have been used for routing.
Create Invoice and Edit Invoice pages, where the accounts payable specialists reviews the invoice image and completes invoice entry.
During transaction entry, accounts payable specialists can view and annotate the invoice image using the embedded Imaging and Process Management image viewer. Upon saving the invoice, the invoice image is automatically linked to the document as an attachment and will be available throughout the invoice life cycle.
The typical topology for implementing the Oracle Fusion Payables invoice imaging solution usually involves setting up one or more locations for invoice scanning and data recognition depending on throughput, geography, and audit requirements.
Note
There is only one instance of Oracle Imaging and Process Management, image routing Oracle BPEL Process Manager server, and Payables application in any Oracle Fusion Applications implementation.
A critical component in this topology is the network file share, or file system, where invoice images are transferred from scanning locations to the Imaging and Process Management image repository. You must set up a file share for the following folders:
Oracle Forms Recognition Import folder: Location storing images scanned using Oracle Document Capture that Forms Recognition processes.
Forms Recognition Batch folder: Location storing images processed by Forms Recognition including those pending exception resolution.
Forms Recognition Export folder, which is the same as the Imaging and Process Management Input Directory: Location where Imaging and Process Management retrieves images for storage.
Key points to consider for the topology:
Number of scanning locations
Can suppliers send invoices to a central location for scanning? Are there any legal requirements for having invoices processed and stored in the same country that received the invoices?
One instance of Document Capture is required for each scanner, and each instance must be installed and configured individually, so minimizing the number of scanning locations is recommended.
While it is possible to have Forms Recognition servers running in different locations, to minimize network load while transferring images, it is recommended to have one central cluster of Forms Recognition servers colocating with the document folders.
The Forms Recognition Import and Batch folders should be a Windows file system, while the Forms Recognition Export folder, also known as the Imaging and Process Management Input Directory, should be a Linux file system with Common Internet File System (CIFS) enabled. The file system used as the Forms Recognition Export folder must support the Uniform Naming Convention (UNC) so Forms Recognition can recognize it as an export folder.
The Forms Recognition Export folder can be set up so only IT staff has access to it. However, the Forms Recognition Import and Batch folder must be accessed from multiple locations and by different users for saving images and processing recognition exceptions. In a Software as a Service (SaaS) model, this means that the Forms Recognition Import and Batch folders must be in the (DMZ) and clients must be granted privilege to access them.
Install Document Capture on a machine with minimum duo-core processor and 4 GB RAM.
Each scanner requires a dedicated Document Capture instance to support the scanning process. Following are key implementation recommendations:
Enable Adaptive Thresholding on scanners to remove background colors and gradients for pure black-and-white images.
When evaluating hardware scanning throughput, plan for 60 percent efficiency of maximum throughput to account for image quality review.
Use TIFF image format with International Telegraph and Telephone Consultative Committee (CCIT) Group IV compression at 300 dpi for optimal balance between scan quality and image size. JPEG format is not recommended as the lossy compression logic results in loss of image details affecting recognition accuracy. This configuration should already be set up in the predefined Document Capture scan profiles.
For the image batch size, less than 25 images per batch is recommended to avoid delay caused by recognition exception, as Forms Recognition only pushes a batch to Imaging and Process Management when all images in the batch are processed successfully.
To optimize for high volume scanning, set up the Document Capture Commit Server to schedule image export to the Forms Recognition Import folder every ten to fifteen minutes.
Forms Recognition consists of Oracle Forms Recognition Runtime Service, Oracle Forms Recognition Designer, and Oracle Forms Recognition Verifier, each with different implementation considerations.
Forms Recognition Runtime Service is the data recognition component, and each Forms Recognition Runtime Service instance can perform one of the following tasks:
Import, Export, and Clean Up of image batches
Optical character recognition (OCR), Classification, and Extraction
Hardware Requirement
Forms Recognition Runtime Service should be installed on a machine with minimum duo-core processor at 2 GHz and 2 GB RAM per core. In most cases, a server with quad-core processor and minimum 8 GB RAM is recommended so more Forms Recognition Runtime Service instances can be dedicated to the resource intensive recognition task.
Note
The number of Forms Recognition Runtime Service instances running on a server must not exceed the number of processor cores. For example, you should run up to four Forms Recognition Runtime Service instances on the typical quad-core server.
Scalability Considerations
If one server is not sufficient for your processing throughput requirement, you can set up multiple servers running Forms Recognition Runtime Service to be managed by the same Form Recognition Runtime Service Manager.
Consider the following points when determining the number of Forms Recognition Runtime Service instances needed for your implementation:
Each Forms Recognition Runtime Service instance should either be dedicated to the Import, Export, and Clean Up task, or the OCR, Classification, and Extraction task. It is not recommended for a Forms Recognition Runtime Service instance to perform both tasks.
For Forms Recognition Runtime Service instance dedicated to data recognition can process up to 250 invoices per hour. Each additional instance can achieve near linear scalability depending on scan volume, document complexity, and the number of attributes validated.
For processing volume up to 300,000 invoices per day, it is sufficient to set up only one Forms Recognition Runtime Service instance for the Import, Export, and Clean Up task.
In a typical quad-core server, this means that you will have a total of three Forms Recognition Runtime Service instances - one running Import, Export, Clean Up, and three running data recognition.
Other best practices include:
Enabling autorestart every four hours on Forms Recognition Runtime Service instances for optimal stability.
Setting the logging level to Info for all instances.
Setting up the Import, Batch, and Export folders on dedicated file servers.
Colocating Forms Recognition servers with the Import, Batch, and Export folders to minimize network traffic.
The Forms Recognition Designer is a client tool for configuring implementation details, known as a project, and its initialization (.ini) file. A preconfigured initialization (.ini) file is installed as part of Oracle Fusion Applications to be used for your customized project. You must modify the project and the .ini file on site to update the Oracle Fusion Applications database connection information, the Forms Recognition Import, Batch, and Export folder locations, and any additional data validation to be performed.
Since the number of users performing this task is limited, it is recommended that remote desktops or Citrix accounts be provided for Forms Recognition Designer access to centralize installation and maintenance effort.
The Forms Recognition Verifier is a client tool for resolving recognition exceptions, which in most cases are handled by the payables department. Each Forms Recognition Verifier instance must access the Forms Recognition Batch folder and should be colocated with the Forms Recognition Batch folder to minimize image loading time.
Since the number of users performing this task is limited, it is recommended that remote desktops or Citrix accounts be provided for Forms Recognition Verifier access to centralize installation and maintenance effort.
The common provisioning framework installs and preconfigures the Imaging and Process Management image repository, but prior to running the provisioning process, the file system for the Imaging and Process Management Input Directory, which is the same as the Forms Recognition Export folder, must be set up. It is recommended that the Imaging and Process Management image repository be colocated with the Imaging and Process Management Input Directory to minimize network traffic when transferring images.
The average size of a black-and-white invoice image saved in TIFF format with CCIT Group IV compression at 300 dpi is 40 KB per page. It is critical that invoices are digitized using the Adaptive Thresholding technology to remove gray scaling, otherwise the image size can go up to 300 KB per page. You can use this sizing information, together with the estimated invoice volume, to determine the amount of storage needed for Imaging and Process Management.
A default image routing rule, based on the invoice amount assigned to individual users, is delivered as part of the provisioning process. You must modify these routing rules using the BPM Worklist application to achieve the desired specialization within the payables department. For example, routing can be based on supplier, PO prefix, or invoice number prefix, to ensure the right group of payables specialists process invoices based on their specific assignments. Moreover, to achieve optimal load balancing among specialists, and to avoid task reassignment, routing rules should be set up to assign invoices to a user group instead of an individual accounts payable specialist.
As an alternative to receiving invoices through conventional mail, you can automate the invoice imaging process further by receiving invoice images through e-mail. The process begins when an imaging specialist reviews the invoice received in an e-mail attachment. Additional attributes can be included in the e-mail subject to route the invoice images to accounts payables specialists for invoice entry.
Consider the following when receiving and routing invoice images that are received through e-mail.
Invoice images can be included in e-mail attachments in the following ways:
Single page invoice in one attachment.
Multipage invoice in one attachment.
Multiple invoices in one attachment, each invoice is separated by blank page.
Single and multipage invoices in multiple attachments.
Note
A single invoice cannot be represented by multiple attachments.
Use the Oracle Document Capture Email Provider setup to specify the types of attachment that can be processed. For example, if JPEG is the attachment type specified in the setup, and an e-mail has both a JPEG and a PNG attachment, only the JPEG attachment is processed.
You can specify up to five attributes in an
e-mail subject, which can be used to route the invoice image to an
accounts payable specialist for entry. Use the number sign (#)
followed by a tilde (~)
as separators to indicate the start of routing attribute
information.
For example, you may want the predefined attributes to represent invoice priority, supplier category, manufacturing plant number, storage bin number, and processing queue.
This table lists the categories and their possible values.
Category |
Valid Values |
---|---|
Invoice priority |
Regular, Urgent |
Supplier category |
Regular, Supply chain related |
Manufacturing plant number |
Plant-1, Plant-2, Plant-3 |
Storage bin number |
Bin#1, Bin#2, Bin#3 |
Processing queue |
Section1, Section2, Section3 |
The supplier sends an invoice with the e-mail subject: Invoice-1234 attached. The imaging specialist reviews the e-mail and provides additional routing information in the e-mail subject. The revised e-mail subject is: Invoice-1234 attached#~Urgent#~Supply chain related#~Plant-1#~Bin#1#~Section1.
This table shows how the content in the e-mail subject is mapped to the routing attributes.
E-Mail Subject Content |
Routing Attribute Mapping |
---|---|
Invoice-1234 attached |
Not applicable. General text is not used for routing. |
Urgent |
Routing attribute 1. |
Supply chain related |
Routing attribute 2. |
Plant-1 |
Routing attribute 3. |
Bin#1 |
Routing attribute 4. |
Section1 |
Routing attribute 5. |
Each of the five predefined routing attributes has a maximum length of 40 characters and supports alphanumeric data. You can modify the maximum length of each attribute to meet your requirements however, the sum of the attribute values should not exceed the limit.
This limit is calculated as follows, assuming that all five attributes are used:
Total number of characters in an e-mail subject: 255
Number of characters reserved for internal use as a unique reference number: 40
Number of separator characters multiplied by the number of attributes used (2*5): 10
Total characters minus reserved characters minus separator characters (255-40-10): 205
Note
The limit changes if you use fewer than five attributes, because fewer separators are needed.
If the value of an attribute in an e-mail subject exceeds the maximum length specified for that attribute, Oracle Document Capture's scan and commit will error.
The Oracle Fusion Payables integrated invoice imaging solution provides predefined configurations for Oracle Document Capture, Oracle Forms Recognition, Oracle Imaging and Process Management, and routing rules.
Document Capture is a Windows based application that must be installed on every Windows machine that is connected to the scanner.
Payables provides a predefined configuration (a File Cabinet) for invoice processing. You can modify the configuration according to your requirements.
A Document Capture file cabinet defines how documents are scanned, processed, and saved. It encapsulates the following information:
Attribute definitions: To be captured as part of the scanning process either through manual entry or by zonal recognition
Commit profile: Specifies how the image is saved
Scan profile: Specifies how invoices should be scanned and other processing options, such as deskewing and noise removal
Index profile: Specifies how attributes are captured and indexed
The following table provides details on the Payables
predefined file cabinet, called Payables Invoice with OFR, with the
artifact name of ApInvoiceOfrCabinet.zip
.
File Cabinet Component |
Details |
---|---|
Attribute Definitions |
Unique Reference Number (URN) generated automatically by Document Capture Other attributes are recognized by Forms Recognition so there is no need to have other attributes |
Commit Profiles |
AP_INV_OFR
|
Scan Profile Name |
Payables Invoice with OFR |
Index Profile Name |
Fusion Payables Invoice With OFR, Fusion Payables Invoice Without OFR |
For more information on configuring Document Capture for Oracle Fusion Payables, see the Oracle Fusion Applications Post-Installation Guide. For more information on administering Oracle Document Capture, see the Oracle Document Capture Administrator's Guide.
The predefined Payables initialization (.ini) file supports optical character recognition (OCR) and extraction of the following invoice header attributes:
Purchase order number
Supplier
Invoice number
Invoice amount
Invoice date
Customer taxpayer ID
Business unit
For invoice line attributes, accounts payable specialists must provide line information manually during invoice entry.
Caution
Do not update the export section of the .ini file as it is critical for proper integration with Imaging and Process Management.
For more information on the additional attributes that are supported, see the Oracle Forms Recognition AP Solution Guide. For more information on installing the Payables .ini file, see the Oracle Fusion Applications Post-Installation Guide.
Imaging and Process Management is installed as part of Oracle Fusion Applications and the Payables Invoice Application, Input, and Search definitions are predefined. As part of the provisioning process, you must specify the location of the input directory from where Imaging and Process Management imports images.
Sign in to Imaging and Process Management with a user having the FUN_FINANCIAL_APPLICATION_ADMINISTRATOR_JOB role to access the predefined configuration details.
Imaging and Process Management configurations that are pertinent for Payables include:
Payables Invoice Application
Payables Invoice Input
Payables Invoice Search
Payables Invoice Application
The Payables Invoice Application definition captures details on how invoice images are stored, such as application security, document security, and workflow configuration, as described in the following table.
Property |
Property Component |
Details |
---|---|---|
Application Security |
Not applicable |
Application security captures the roles, also called security groups, that can access the application definition and modify the details. By default, the FUN_FINANCIAL_APPLICATION_ADMINISTRATOR_JOB role is given access to the Payables Invoice Application definition. |
Document Security |
Roles |
The following roles are given access to view, write, and delete invoice images:
|
Document Security |
Document Access |
In addition to view, write, and delete, Imaging and Process Management lets you annotate the image. To annotate, you must have access to either Annotate Standard or Annotate Restricted. If you have the Annotate Restricted access, you can create annotations that can be hidden from users without Annotate Restricted access. Users with the FUN_FINANCIAL_APPLICATION_ADMINISTRATOR_JOB role can only view document and grant document access to other job roles or users. |
BPEL Configuration |
NA |
BPEL configuration stores the details of the services initiated by Imaging and Process Management that publishes the invoice data and images to the scanned invoices table. Caution Do not modify this configuration since it is critical for routing invoices to the invoice entry user interface. |
Payables Invoice Input
The Payables Invoice Input definition captures details of the data files associated with scanned images, such as order of fields and file format masks, as described in the following table.
Property |
Property Component |
Details |
---|---|---|
Field Mapping |
Input Mapping |
The order and type of data in the input data file. The predefined input mapping fields are supplier, purchase order, invoice number, invoice amount, invoice date, tax registration number, and business unit. The input data file is created by Document Capture and Forms Recognition and the mapping defined here is in sync with the mapping defined in the Document Capture and Forms Recognition configurations, so this should not be modified unless all three configurations are modified together. |
Field Mapping |
Input Mask |
The file naming pattern consisting of a file name prefix and an extension. The predefined input mask is APINV*.001. The asterisk is a wild card representing one or more characters. The predefined Document Capture and Forms Recognition configurations already follow this naming format so this should not be modified unless all three configurations are modified together. |
Field Mapping |
Delimiter |
The character used as a field delimiter within the input data file. The predefined delimiter is the vertical bar (|). The predefined Document Capture and Forms Recognition configurations already follow this delimiter format so this should not be modified unless all three configurations are modified together. |
Input Security |
Not applicable |
The roles that can modify the input definition. By default, the FUN_FINANCIAL_APPLICATIONS_ADMINISTRATOR_JOB role is given access to the input definition. |
Payables Invoice Search
The Payables Search definition captures details on how to search invoices, such as fields to search, and which roles can search, as described in the following table.
Property |
Description |
---|---|
General |
The search name, description, instructions, and the maximum number of search results. The predefined search name is Payables Invoice Search with a maximum of 200 search result rows. |
Results Formatting |
Labels assigned to each column in the result table. The predefined column labels are Invoice Number, Invoice Date, Invoice Amount, Supplier, Purchase Order, Tax Registration Number, Document ID, and Document Creation Date. |
Conditions |
Filtering expression used to limit search results. |
Parameters |
Attributes that users can search on. The predefined search columns are Supplier, Purchase Order, Invoice Number, and Document Creation Date. |
Security |
The predefined roles and permissions are as follows:
|
When an invoice is stored in Imaging and Process Management, it is sent to accounts payable specialists for invoice entry completion, based on defined routing rules. In addition to routing invoice images using key invoice header attributes, routing rules can be defined for five additional attributes, based on your business requirements. When you access Payables, the Invoices work area displays the list of assigned images.
Payables provides a predefined approval rule called FinApImageTransferRequestForAction
. The approval
rule assigns the image to a user if the amount is greater than 1000,
otherwise the image is assigned to a different user. Since the rule
definition includes sample users, you must reconfigure the rule before
using it.
For more information on configuring routing rules, see the Oracle Fusion Middleware Modeling and Implementation Guide for Oracle Business Process Management.
Common Options for Payables and Procurement are setup options that are used by features throughout the procure-to-pay business flow, such as default accounts, additional legal entity information, accounting options, and self-billed invoices.
Set options for the following:
Default distributions
Offset segments
Currency conversion
Expense accruals
Self-billed invoices
Legal entity information
Default distributions are used to define the various accounts applicable for accounting for payables transactions. Invoices may get some distributions from supplier site assignments and others from the common options setup.
If you enter invoices for expenses or asset purchases for more than one primary balancing segment value, you might want to use automatic offsets to keep your Oracle Fusion Payables transaction accounting entries balanced. If you do not use automatic offsets, Payables creates a single liability accounting entry for invoice transactions and a single cash type accounting entry for payment transactions.
This tables lists the options you can set for currency conversion.
Option |
Description |
---|---|
Require conversion rate entry |
Require a conversion rate whenever you enter an invoice or a payment in a currency other than your ledger currency. If you maintain daily rates, Payables populates the rate automatically based on the date and the rate type you enter. If daily rates do not exist for the date and rate type, and if this option is enabled, you cannot enter or save the transaction. If the conversion rate type is User, then Payables always requires that you enter the conversion rate. You cannot create accounting entries for, or pay foreign currency invoices without conversion rates. If you do not enable this option, after you have entered invoices or created payments, you can enter conversion rates manually or by using the Apply Missing Conversion Rates program. When you create a bills payable, you are required to enter a maturity rate, rate type, and date. |
Conversion rate type |
Default conversion rate type when you enter invoices or create payments. You can change it at invoice entry or payment creation time. |
Realized Gain or Loss Distributions |
Default realized gain and loss accounts for payments from each of your bank accounts. If the conversion rate changes between invoice entry and payment, the application automatically calculates the realized gain or loss and records it in these accounts. |
Determine when to accrue for expense items.
This tables lists the options you can set for self-billed invoices.
Option |
Description |
---|---|
Gapless invoice numbering |
Enable gapless, that is, no breaks in numbering, invoice number generation for your buying organization during pay on receipt processing. You can enable gapless numbering for the entire business unit with this setting or limit it to a supplier site. |
Buying Company Identifier |
A unique identifier for the business unit that is included in the invoice number created by the pay on receipt process and in the debit memo number resulting from return receipts. |
This tables lists the options you can set for legal entity information.
Option |
Description |
---|---|
VAT Registration Member State |
If your company operates in a member state of the European Union, select the name of the country. |
VAT Registration Number |
If your company operates in a member state of the European Union, enter the value-added tax (VAT) registration number for your organization. Your organization is assigned a VAT Registration Number if you register to pay VAT. The first two characters of a VAT registration number are the country code for the country or state where the registered company or organization is located. |
Bill-to Location |
Enter the bill-to location to provide default values. The application uses the Bill-to Location to derive legal entity information. |
Default distributions are used to define the various accounts applicable for accounting for payables transactions. Invoices may get some distributions from supplier site assignments and others from the common options setup.
The following default distributions are defined on the Manage Common Options for Payables and Procurement page.
Liability: The default liability distribution for new invoices, unless you enter a different liability distribution for the supplier site assignment. Only distributions with an account type of Liability are available for use.
Prepayment: The default distribution for prepayments, unless you enter a different prepayment distribution for the supplier site assignment.
Bill Payable: The default distribution for a bill payable, unless you enter a different bill payable distribution for the supplier site assignment.
Conversion Rate Variance Gain and Conversion Rate Variance Loss: These distributions record conversion rate variance gains or losses for inventory items or expense items that were accrued on receipt. The variance is calculated between the invoice and either the purchase order or the receipt, depending on how you matched the invoice. These distributions do not record variances for expense items that were not accrued on receipt.
Discount Taken: If you allocate discounts to a single distribution, this account records the discounts you take on payments. Use the Manage Invoice Options page to select the method for distributing discounts for your invoices.
Miscellaneous: This default distribution is used for invoices lines with a type of Miscellaneous. If you do not enter a value, Oracle Fusion Payables prorates miscellaneous charges across the invoice item lines.
Freight: The default freight distribution for an invoice. You can override this distribution during invoice entry. If you do not enter a freight distribution, Payables prorates freight charges across the invoice item lines.
Prepayment Tax Difference: This distribution records any tax amount difference between a prepayment and the invoices that it is applied to. These differences are usually due to changes in tax rates between prepayment and invoice creation times. This distribution is used only if the Applied Amount Handling option in the tax record is set to Recalculate.
If you enter invoices for expenses or asset purchases for more than one primary balancing segment value, you might want to use automatic offsets to keep your Oracle Fusion Payables transaction accounting entries balanced. If you do not use automatic offsets, Payables creates a single liability accounting entry for invoice transactions and a single cash type accounting entry for payment transactions.
When you use automatic offsets, Payables automatically creates balancing accounting entries for your transactions. The general ledger account that each offsetting accounting entry is charged to depends on which offset segment method you use, Primary balancing segment or All segments, except natural account.
Although Payables builds the general ledger accounts to which amounts are charged differently, depending on the method you use, in either case Payables automatically allocates amounts for the following invoice accounting entries:
Conversion rate variance gain or loss
Liability
Nonrecoverable tax for invoices matched to a PO
Nonrecoverable tax for invoices not matched to a PO and no tax expense account is defined for the tax rate
Withholding tax if you apply the withheld amount at invoice validation time
Payables allocates amounts for the following payment accounting entries:
Cash if you use a pooled bank account
Cash clearing if you use a pooled bank account and if you account for payments at clearing time
Discount
Realized gain or loss
Bills payable
Withholding tax if you apply the withheld amount at payment time
If you want Oracle Fusion Payables to create balanced accounting entries for your invoice and payment transactions without having to define intercompany or intracompany rules, select the segments you want to override on the offset entry lines. Consider this option carefully before setting it. Changing automatic offsets after creating accounting entries can result in accounting inconsistencies or slow performance. This option is also used by Oracle Fusion Receiving to derive the receiving inspection account based either on the accrual distribution at the time of receipt, or on the charge distribution at time of delivery.
More complex offsetting requirements can be met by disabling automatic offsets and setting up intracompany or intercompany rules at the ledger level in Oracle Fusion General Ledger.
Note
If you enable additional balancing segments for your chart of accounts, you must define intracompany or intercompany rules if you want the intercompany engine to balance the journal entry by these additional balancing segments.
Select how to offset segments from the following options:
None
Primary balancing segment
All segments, except natural account
Payables uses the invoice liability distribution as the liability entry line account without overriding any segments. Receiving uses the receiving inspection distribution defined for the destination organization. If you anticipate creating invoices that cross balancing segment values, then either set up automatic offsets in Oracle Fusion Payables or intracompany or intercompany rules in Oracle Fusion General Ledger.
Payables uses the invoice liability distribution and overrides the primary balancing segment with the one from the charge distribution to build the liability entry line account. The resulting journal entry is balanced by the primary balancing segment. Receiving uses the receiving inspection distribution for the destination organization, and overrides the primary balancing segment with the one from the PO charge distribution to build the receiving inspection entry line account.
This figure shows how an invoice liability entry line account is built when the offset segment method is set to Primary balancing segment. The invoice distribution combination provides the primary balancing segment value and the liability distribution on the invoice header provide the remaining segment values.
Payables uses the charge distribution combination from the invoice distribution and overrides the natural account segment with the one from the invoice liability distribution to build the liability entry line account. The resulting journal entry is balanced by all segments, except the natural account segment. Receiving uses the charge distribution and overrides the natural account segment with the one from the receiving inspection distribution for the destination organization to build the receiving inspection entry line account.
This figure shows how the liability entry line account is built when the offset segment method is set to All segments, except natural account.
This example uses a single invoice with two items to illustrate how to build liability accounts against different companies.
A supplier sends you an invoice for two items. Each item should be charged to a different company.
The invoice details are as follows:
Invoice total of 100 USD
Item 1 for 60 USD
Item 2 for 40 USD
The accounting flexfield structure consists of the following segments:
Primary balancing segment
Account
Cost center
Each primary balancing segment value represents a company. The default liability account for the supplier site in this example is 00-LIAB-000. The offset segments method on the Manage Common Options for Payables and Procurement page is set to Primary balancing segment.
This table lists the distribution combination information that you enter for each item line on the invoice.
Invoice Distribution Combination |
Debit |
Credit |
---|---|---|
01-EXP1-111 |
60 |
|
02-EXP2-222 |
40 |
This table lists the liability accounts and amounts that are automatically created when you account for the invoice.
Liability Account |
Debit |
Credit |
---|---|---|
01-LIAB-000 |
60 |
|
02-LIAB-000 |
40 |
This example uses a single invoice with two lines to illustrate how to build the liability accounts using the All segments, except natural account offset segments method.
A supplier sends you an invoice for two items. The offsetting account must retain all segments but the distribution's account segment.
The invoice details are as follows:
Invoice total of 100 USD
Item 1 for 60 USD
Item 2 for 40 USD
The accounting flexfield structure consists of the following segments:
Primary balancing segment
Account
Cost center
Each primary balancing segment value represents a company. The default liability account for the supplier site in this example is 00-LIAB-000. The offset segments method on the Manage Common Options for Payables and Procurement page is set to All segments, except natural account.
This table lists the distribution combination information that you enter for each item line on the invoice.
Invoice Distribution Combination |
Debit |
Credit |
---|---|---|
01-EXP1-111 |
60 |
|
02-EXP2-222 |
40 |
This table lists the liability accounts and amounts that are automatically created when you account for the invoice.
Account |
Debit |
Credit |
---|---|---|
01-LIAB-111 |
60 |
|
02-LIAB-222 |
40 |
The Accrue Expense Items option on the Manage Common Options for Payables and Procurement page determines when to accrue for expense items. Select from one of the following:
At receipt
Period end
Note
Inventory items are always accrued at receipt.
Accrue for expense items when receipts are created. You can override this setting on the PO schedule for expense destination types.
Accrue for expense items at period end. Select this method if the expenses must be booked at the end of the period. While closing the period, expense accruals will be created for all receipts that do not have invoices. These accrual entries will be reversed when the next period is opened.
Conversion rate gain or loss distributions represent rate variances for inventory items or expense items that accrue on receipt. The invoice validation process calculates the variance between the invoice and either the purchase order or the receipt, depending on the match option.
Realized gain or loss distributions represent rate variances between invoice entry and payment. The gain or loss is calculated at payment issue, maturity, or clearing depending on the Account for Payment option setting, as well as at prepayment application.
At payment issue. Realized gain or loss is calculated at payment creation and, for bills payable, at payment maturity.
At payment clearing. Realized gain or loss is calculated only at payment clearing, for both regular payments and bills payable.
At payment issue and clearing. Realized gain or loss is calculated at all points mentioned under the previous options.
Realized gain or loss is always calculated at foreign currency prepayment application time, regardless of the Account for Payment setting.
Invoice options are settings and default values that control how Oracle Fusion Payables processes invoices for a business unit. You can specify options for the following invoice areas on the Manage Invoice Options page:
Invoice entry and matching
Discounts
Prepayments
Approvals
Interest
Payment requests
Self-service invoices
This table lists the options you can set for invoice entry and matching.
Option |
Description |
---|---|
Require invoice grouping |
Requires that you enter the name of a group when creating an invoice. |
Allow document category override |
Allows override of the document category that is automatically assigned to an invoice if the Sequential Numbering Enforced profile is set to Partially Used or Always Used. If the profile is set to Not Used, the application does not assign a document category to an invoice, and you cannot set this option or enter a document category for an invoice. |
Allow adjustments to paid invoices |
Lets you cancel or add lines to paid invoices. In addition, you can unmatch an invoice from a purchase order that is not finally matched, and match the invoice to a different purchase order. You cannot modify distributions because it would affect the accounting. |
Recalculate invoice installments |
Recalculates installments during the invoice validation process. |
Hold unmatched invoices |
Applies a Matching required hold during invoice validation on invoices that are not matched to a purchase order or receipt. This option can be set on a supplier to one of the following values: Yes, No, or Default from Payables Options. The invoice option is used only when the setting on a supplier site is Default from Payables Options. |
Receipt acceptance days |
Specifies the number of days added to the Goods Received date when recalculating installments. |
Accounting date basis |
Provides the basis for the default accounting date. If you select Goods received or invoice date, and the invoice does not have a date for goods received, then the application uses the invoice date as the default accounting date. If you select Goods received or system date, and the invoice does not have a date for goods received, then the application uses the system date as the default accounting date. |
Allow final matching |
Lets you perform a final match when you match an invoice to a purchase order, or when you adjust a matched invoice distribution. You cannot perform a final match when matching invoices to receipts. |
Allow matching distribution override |
Allows override of the invoice distribution created from matching an invoice to a purchase order. You cannot override the distribution for a matched invoice if you accrue at receipt. In addition, you cannot override the distribution if the purchase order is projects-related, and the item destination for the purchase order distribution is inventory. |
Transfer PO distribution additional information |
Transfers descriptive flexfield information from the purchase order distribution to the invoice distribution when you match an invoice to a purchase order. If you enable this option, make sure that the flexfield structure is the same for the purchase order distributions and the invoice distributions. |
In addition to the options previously listed, you can specify default values for the following attributes on both the Manage Invoice Options page and on the supplier setup. Payables uses the default values from the Manage Invoice Options page, unless you specify a different value for the supplier.
Currency
Pay group
Payment priority
Payment terms
Terms date basis
Pay date basis
Quantity tolerances
Amount tolerances
This table lists the options you can set for discounts. You can also set these options on the supplier setup, except for Discount Allocation Method. The values for these options on the supplier setup are: Yes, No, Default from Payables Options.
Option |
Description |
---|---|
Exclude tax from calculation |
Subtracts the tax amount from the invoice amount during invoice entry, when calculating the discountable amount for an installment. If you enable this option, you cannot select a Discount Allocation Method of Tax lines and single distribution. |
Exclude freight from calculation |
Subtracts the freight amount from the invoice amount during invoice entry, when calculating the discountable amount for an installment. |
Discount allocation method |
Allocates discounts across distributions. |
Always take discount |
Takes the available discount for a supplier, regardless of when you pay the invoice. |
This table lists the options you can set for prepayments.
Option |
Description |
---|---|
Payment terms |
Represents default payment terms. For example, you may want to have immediate payment terms for all prepayment type invoices. |
Settlement days |
Specifies the number of days to add to the system date to calculate the default settlement date for a prepayment. You cannot apply a prepayment to an invoice until on or after the settlement date. You can also set this option on the supplier setup. The value for the supplier setup determines if this option is used. |
Use distribution from purchase order |
Builds the distribution combination for the matched invoice distribution by taking the purchase order distribution combination and overriding the natural account segment with the one from the supplier site prepayment distribution or, if not defined, from the common options prepayment distribution. |
Show available prepayments during invoice entry |
Displays the number and amount of available prepayments during invoice entry. |
You can use the invoice approval workflow to automate your invoice approval process. The workflow determines if an invoice requires approval, and if so, automatically routes the invoice to the applicable approvers who then approve or reject the invoice.
This table lists the options you can set for the invoice approval process.
Option |
Description |
---|---|
Enable invoice approval |
Processes invoices through the approval workflow. The approval workflow is automatically initiated for payment requests and self-service invoices that are created in Oracle Fusion Supplier Portal and not matched to a purchase order. |
Require validation before approval |
Processes only invoices that are validated. Enable this option if you need the invoice validation process to create tax distributions for an invoice before approvers review it. Payment requests and self-service invoices created in Supplier Portal that are not matched to a purchase order always require approval before validation, regardless of the option selected. |
Require accounting before approval |
Processes invoices that are accounted. |
Allow force approval |
Allows managers to override the workflow and manually approve invoices. For example, you might want to force approval of an invoice if the invoice approval workflow does not complete, or if you have authority to pay an invoice without using the workflow process. |
This table lists the options you can set for interest on overdue invoices.
Option |
Description |
---|---|
Create interest invoices |
Calculates interest on overdue invoices and creates interest invoices. You can also set this option on the supplier setup. The values for this option on the supplier setup are: Yes, No, Default from Payables Options. |
Minimum interest amount |
Minimum amount of calculated interest below which an interest invoice is not created. |
Interest allocation method |
Allocates interest across distributions. |
Interest expense distribution |
Distribution combination used if allocating interest expense to a single distribution. |
You can specify the following default values for a payment request:
Payment terms
Pay group
Payment priority
This table lists the options you can set for invoices created in Supplier Portal.
Option |
Description |
---|---|
Limit invoice to single purchase order |
Limits an invoice to the schedules belonging to a single purchase order. |
Allow invoice backdating |
Allows a supplier to enter an invoice for a date in the past. |
Allow unit price change for quantity-based matches |
Allows a supplier to enter a unit price on the invoice that is different from the unit price on the purchase order. |
During invoice entry, Oracle Fusion Payables creates installments automatically using the payment terms and terms date. You can optionally have Payables recalculate invoice installments during the invoice validation process.
Payables recalculates installments during invoice validation when you set the Recalculate invoice installments option on the Manage Invoice Options page.
Restriction
Installments are recalculated unless you have manually updated any of the invoice installments or split the installment.
Installments are also recalculated if you set the Exclude tax from discount calculation option on the Manage Common Options for Payables and Procurement page and you manually change the tax amount. This re-creation of invoice installments is not based on the Recalculate invoice installments setting.
Payables uses the most recent of the available start date options and the most favorable of the available payment terms. Payables determines which payment terms are more favorable by comparing the ranks assigned to the terms.
This table shows the start dates and payment terms that installment recalculation uses for matched and unmatched invoices.
Matched to a PO |
Start Date |
Payment Terms |
---|---|---|
No |
Most recent of the following:
|
Invoice payment terms |
Yes |
Most recent of the following:
|
More favorable of the following:
|
Determine the method to use for distributing the discounts you take when making payments. Select one of the following options:
All invoice lines
Tax lines and single distribution
Single distribution
Oracle Fusion Payables automatically prorates any discounts across all invoice lines. Payables assigns the discount to the charge account unless the invoice is matched to a purchase order with Accrue at receipt enabled, in which case the discount is assigned to the price variance account.
Note
If you exclude tax from the discount calculation and select this method , Payables allocates discounts only to expense lines and not to the tax lines.
Payables automatically prorates a percentage of the discount across the tax lines. The percentage of discount prorated is equal to the percentage of the tax lines. Payables credits the remaining discount amount to the Discount Taken distribution on the Manage Common Options for Payables and Procurement page. For example, if your tax distributions are 10 percent of the total invoice amount, Payables prorates 10 percent of the discount amount across the tax distributions and credits the remaining 90 percent of the discount amount to the Discount Taken distribution.
You cannot select this method if you exclude tax from discount calculation.
Payables credits all discounts to the Discount Taken distribution on the Manage Common Options for Payables and Procurement page. If you enable automatic offsets, and want to distribute discount taken amounts across balancing segments, select the Single distribution method.
Oracle Fusion Payables automatically creates invoices to pay interest for overdue invoices if you enable automatic interest calculation for a supplier, and if you pay an overdue invoice in a payment process request or with a Quick payment. The interest invoice is automatically paid along with the overdue invoice.
To use automatic interest rate calculation, define the interest rates and enable the Allow interest invoices option on the Manage Invoice Options page and the Allow interest invoices option for the supplier. You can add, change, or delete a rate at any time. If a rate is not defined, a zero rate is used.
Note
Payables does not create interest invoices when you pay overdue invoices with a Manual payment.
Interest invoices have the following components:
Number
Terms
Amount
Currency
The interest invoice number is the same as the overdue invoice number, but with the suffix -INTx, where x is the count of interest invoices that were created for the overdue invoice. For example, the third interest invoice created for an overdue invoice has the suffix -INT3.
The payment terms on an interest invoice are Immediate. If you do not have Immediate terms defined, the interest invoice payment terms are the same as the overdue invoice.
The amount of the interest invoice is the interest amount owed. Payables calculates interest based on the rate you enter on the Manage Interest Rates page in accordance with the United States Prompt Payment Act. The formula used compounds monthly, up to a maximum of 365 days interest.
Interest invoices have the same invoice currency and payment currency as the overdue invoice.
Oracle Fusion Payables creates and accounts for interest invoices based on one of the following options:
Single distribution
All invoice lines
Payables creates interest invoices with a single distribution using the Interest Expense distribution on the Manage Invoice Options page.
Payables uses the natural account segment from the Interest Expense distribution on the Manage Invoice Options page when it builds expense distributions for an interest invoice.
Oracle Fusion Receivables and Oracle Fusion Expenses can submit requests to Oracle Fusion Payables to disburse funds to a payee who is not defined as a supplier. Payables records these requests as payment requests. You can disburse the funds and manage the payment process using the payment management functionality that is available in Payables.
Create a payment request from Receivables for a customer refund or from Expenses for an expense report. Expenses submits payment requests to request reimbursement of employee expenses to the employee or directly to the corporate credit card provider. Once the Expense Report Auditor has completed their review and determined the expense report is ready for reimbursement, they will submit the Process Expense Reimbursement program to create the payment request real time in Payables. Any exceptions to this process are managed in Expenses.
Note
You can only submit a payment request from other applications; you cannot enter a payment request for a payee directly in Payables.
There are no specific setup steps required to use payment requests however, the following setups do affect the payment request process. Review these setups if you plan to use payment requests.
Invoice options. Set the default options to be considered for payment requests such as payment terms, pay group, and payment priority.
Payment request document category. Comply with document sequencing policies using the predefined payment request category or override the document category, if allowed. If the Sequence Numbering Enforced profile is set to Partially Used or Always Used, ensure that you have assigned a sequence to the payment request document category.
You can use the following Oracle Fusion Payments setups to manage payment requests separately from other payments:
Payment method controls
Payment method defaulting rules
Payment file and report formats
Payment attribute validations
Track progress of the payment request in the originating application. Once the payment request is approved, you can report on and audit the payment request in Payables using the following reports:
Payables Invoice Aging
Payables Invoice Audit by Voucher Number Listing
Payables Open Items Revaluation
Payables Cash Requirement
Determine when Oracle Fusion Payables creates payment accounting entries.
Important
Carefully consider this setting at implementation time. After you set this option, the only change you can make is from accounting At payment issue to accounting At payment issue and clearing.
Select from the following options:
At payment issue and clearing
At payment issue
At payment clearing
Payables accounts for each payment twice as follows:
Issue time. Debit the liability account and credit the cash clearing account. For bills payable, debit the liability account and credit the bills payable account. Then, at payment maturity, debit the bills payable account and credit the cash clearing account.
Clearing time. Debit the cash clearing account and credit the cash account.
Realized gain or loss is calculated at all points mentioned.
Debit the liability account and credit the cash account. For bills payable, debit the liability account and credit the bills payable account. Then, at payment maturity, debit the bills payable account and credit the cash account. Realized gain or loss is calculated at payment creation and, for bills payable, at payment maturity.
Debit the liability account and credit the cash account when the payment clears. Realized gain or loss is calculated only at payment clearing for both regular payments and bills payables.
Withholding tax options are settings and default values that control how Oracle Fusion Payables process withholding for a business unit.
You can set the following withholding tax options:
Use withholding tax
Allow manual withholding
Include withholding distributions in income tax reports
Tax group
Apply withholding tax
Create withholding tax
Withholding amount basis
Use withholding tax if the tax authority requires your company to withhold taxes from suppliers.
Create and adjust manual withholding tax lines for your invoices.
Report on federal income tax withheld, for 1099 suppliers.
When Payables automatically creates withholding tax distributions for 1099 reportable suppliers, Payables provides the following values:
Income tax type value of MISC4 for reporting in box 4 on the 1099-MISC form.
Income tax region value, if the Use combined filing program tax reporting option is enabled.
Note
Payables provides these values only for distributions it creates automatically. If you create manual withholding tax lines, then you must enter the income tax type and income tax region manually.
When you enable this option, Payables initiates the Update 1099 Withholding Tax Distributions program, which updates these values on existing withholding tax distributions. The program selects distributions to update as follows:
If the current date is before March 1 of the current calendar year, then the program updates distributions with a payment date of January 1 of the previous calendar year or later.
If the current date is March 1 of the current calendar year or later, then the program updates distributions that have a payment date of January 1 of the current year or later.
The name of the default withholding tax group for the invoices you enter if there is no withholding tax group at the supplier site assignment level and the Use withholding tax option is enabled.
The time when Payables applies withholding taxes to supplier invoices.
The time when Payables automatically creates withholding tax invoices to remit withheld taxes to tax authorities.
This setting indicates whether discount and tax amounts are included in the calculation of withholding tax.
Determine the time to apply withholding taxes to supplier invoices.
Important
Carefully consider these settings. Changing this option after it is set may impact withholding calculation and you may need to make manual adjustments.
Never
At invoice validation
At payment
Oracle Fusion Payables will not automatically withhold taxes. You must create withholding tax lines manually.
Taxes are automatically withheld at invoice validation. If you select this option, Oracle Fusion Payables calculates withholding only once. If you adjust an invoice after it was validated, you must adjust the withholding tax manually and the Allow manual withholding option must be enabled.
Taxes are also withheld from prepayments. If you select this option, you might want to time the entry of the prepayment application before the invoice is validated. If you apply the prepayment before the invoice is validated, Payables creates a withholding tax distribution net of the prepayment amount. If you validate the invoice first, Payables creates a withholding tax distribution based on the taxable invoice amount. When the prepayment is applied, then you will have to manually adjust the withholding tax amount and the withholding invoice if the Create Withholding Invoice option is at validation or payment time.
Taxes are automatically withheld when you create payments in a payment process request or with a Quick payment.
Determine when to automatically create withholding tax invoices to remit withheld taxes to tax authorities. Set the Create Withholding Invoice option on the Manage Tax Reporting and Withholding Tax Options page to one of the following:
Never
At invoice validation
At payment
If you change this option from Never to At payment or At invoice validation, you must ensure that each withholding tax code has an associated tax authority.
Oracle Fusion Payables will not automatically create withholding tax invoices. You must create withholding tax lines manually, run the withholding tax reports to determine the amounts to remit to your tax authorities, and create the withholding tax invoices.
You can create withholding type tax codes without entering a tax authority.
A withholding invoice is automatically created when an invoice subject to withholding tax is validated. You can enable this option only if withholding is applied at invoice validation time.
A withholding invoice is automatically created when an invoice subject to withholding tax is paid. You can enable this option if withholding is applied either at invoice validation or at payment.
Use the Withholding Amount Basis option on the Manage Tax Reporting and Withholding Options page to specify whether to include discount and transaction tax amounts in the calculation of withholding tax. Select from the following options:
Include discount amount
Include tax amount
Include the invoice discount amount when calculating withholding tax amounts for an invoice.
For example, assume you have an invoice for 100 USD. The discount amount taken is 5 USD and the automatic withholding tax rate is 10 percent. If the discount amount is included, the automatic withholding tax amount is 10 percent of 100 USD or 10 USD. If the discount amount is not included, the automatic withholding tax amount is 10 percent of 95 USD or 9.50 USD.
Note
This setting applies only to payment time withholding. You cannot disable this setting if the option Apply Withholding Tax is set At invoice validation. At the time of invoice validation the discount amount that will be taken is unknown, so withholding tax is calculated on the entire invoice amount.
Include the transaction tax amount when calculating withholding tax amounts for the invoice.
For example, assume you have an invoice for 105 USD. The transaction tax amount is 5 USD and the automatic withholding tax rate is 10 percent. If the tax amount is included, the automatic withholding tax amount is 10 percent of 105 USD or 10.50 USD. If the tax amount is not included, the automatic withholding tax amount is 10 percent of 100 USD or 10 USD.
Set the following income tax reporting options for a business unit:
Use combined filing program
Use supplier tax region
Income tax region
Enable this option if you are using 1099 Combined Filing Program reporting. When you submit the US 1099 Electronic Media report, Oracle Fusion Payables will produce K records for all tax regions participating in the Combined Filing Program that have qualifying payments.
Note
If you use electronic filing to file your tax information with the Internal Revenue Service and you are not participating in the Combined Filing Program, do not enable this option.
Enable this option if you want to use a US 1099 supplier tax region as the default tax region for the invoice distributions. You can override this default region for each invoice distribution on the Manage Distributions page. You can enable this option only if you enable the Use combined filing program option.
Do not enable this option if you do not want to use a supplier site tax region as the default tax region. You must then enter the default tax region you want to use for all invoices in the Income Tax Region field.
The default region you select here determines how many K records the application will produce on your 1099 Electronic Media. The application produces one K record for each tax region. If you are participating in the Combined Filing Program, the application forwards your 1099 qualifying payment information to all the tax regions that participate in the Combined Filing Program. If you enable this option, you may have as many K records as you have different supplier tax regions.
If you enter a default value for the Income Tax Region, you may have only one K record. This would be a K record for that one default tax region. You can override the default tax region for each invoice distribution. In this case, the application will then produce additional K records on your 1099 Electronic Media, one K record for each tax region. The application only produces K records for tax regions that participate in the Combined Filing Program and that you have entered, either as a default value or manually, on a paid distribution for a US 1099 supplier. You can also select to have your US 1099 payment information forwarded to only one tax region regardless of which region your US 1099 suppliers do business from. You do this by entering a value in the Income Tax Region field.
Enter the tax region you want to use as the default region for the invoice distributions of your US 1099 suppliers. You can enter an income tax region only if you enable the Use combined filing program option and did not enable the Use supplier tax region option. You can override the default region for each invoice distribution.
In the United States, you must report to the Internal Revenue Service certain types of payments you make to 1099 reportable suppliers. In the supplier setup, you can designate suppliers as federally reportable. When you enter invoices for the supplier, you classify invoice distributions by 1099 miscellaneous type using the Income Tax Type field. At year end, you can then report, in standard formats, your accumulated 1099 payment information to the Internal Revenue Service, other tax agencies, and your suppliers.
For each reporting entity, you assign one or more balancing segment values. When you submit 1099 reports for a tax entity, Oracle Fusion Payables sums up the paid invoice distributions that have these company balancing segment values in their accounts.
When you enable the combined filing option, the electronic format of your US 1099 information includes K records for all tax regions or states participating in combined filing that have qualifying payments. The output also includes B records for suppliers with US 1099 payment amounts that equal or exceed the tax region's reporting limit in qualifying states.
Note
If you use electronic filing to file your tax information with the Internal Revenue Service, and you are not participating in the Combined Filing Program, do not enable this option.
This figure shows the steps for US 1099 tax reporting from setup to output.
Set up Payables for 1099 reporting.
Enter 1099 details for suppliers.
Enter and pay 1099 invoices. When you enter invoices for 1099 suppliers, enter an income tax type and income tax region for appropriate invoice distributions, or accept the default values from the supplier.
Enter distributions automatically by entering a distribution set or by matching to a purchase order, or enter distributions manually. If you are entering distributions by using a distribution set that does not include an Income Tax Type for any distribution, Payables automatically enters the supplier's default Income Tax Type. If the distribution set has an Income Tax Type other than the supplier's default type, the distribution set overrides the supplier default type.
Optionally adjust or review the Income Tax Type and Income Tax Region for each distribution. Clear the Income Tax Type field of any distribution that is not federally reportable. Enter a region to identify a distribution as applicable to US 1099 reporting requirements. If you enabled the Use supplier tax region option, the default region is the state in the address for the supplier site for the invoice. Alternatively, you can also enter a default Income Tax Region on the Manage Tax Reporting and Withholding Tax Options page. Payables uses this information to group distributions by type and region on the 1099 reports. If you enable the Use combined filing program option, when you run your 1099 reports, Payables groups all reportable distributions by state.
Identify and resolve 1099 exceptions. Submit the US 1099 Invoice Exceptions Report and the US 1099 Supplier Exceptions Report. Generate a Tax Information Verification Letter for each supplier who has not yet furnished or confirmed its tax identification number or tax reporting region.
Optionally withhold tax from suppliers if they have a missing or invalid Tax Identification Number (TIN) and if you have not met the legal requirements of requesting a valid TIN from them.
Update 1099 payment information. Adjust invoice distributions manually on the Manage Distributions page or use the Update and Report Income Tax Details utility.
Generate 1099 reports.
Report |
Description |
---|---|
US 1099 Forms |
Reports the total 1099 miscellaneous payments for a particular 1099 supplier, and generates 1099 forms for each tax reporting entity in an organization. |
US 1096 Form |
Summarizes each 1099 form type that is transmitted on paper, as required by the United States Internal Revenue Service. The report is generated on a preformatted Internal Revenue Service form. |
US 1099 Electronic Media |
Generates summarized 1099 information in electronic format as required by the United States Internal Revenue Service. |
US 1099 Payments Report |
Lists payments made to US 1099 reportable suppliers. |
This figure shows the steps for setting up Payables US 1099 Reporting.
If you want to use the combined federal and state 1099 filing and produce K records and B records, set the Use combined filing program option on the Manage Tax Reporting and Withholding Tax Options page.
Set the Include withholding distributions in income tax reports on the Manage Tax Reporting and Withholding Tax Options page. If this option is enabled, then when Payables automatically creates withholding tax distributions it enters MISC4 as the income tax type, and enters the income tax region value if you use combined filing.
If you use combined federal and state filing, define your tax regions.
Define your tax reporting entities.
Distribution sets automatically create distributions for invoices not matched to purchase orders. For example, you can create a distribution set for an advertising supplier that allocates the advertising expense on an invoice to four advertising departments. Specify a default distribution set at the supplier site assignment level to use for every invoice you enter for that supplier site. If you do not assign a distribution set to a supplier site, you can assign a set to an invoice when you enter it.
If you are creating a distribution set for a federally reportable supplier, you can enter an income tax type.
If you have Oracle Fusion Project Costing installed, you can associate a project with a distribution by entering project information on invoice distributions. If you use a project-related distribution set, the project information on the set is automatically entered on the invoice distribution. You can override project fields on the distribution.
If you enable and use a descriptive flexfield with your distribution set lines, the information is copied to the invoice distributions created by the set.
Define distribution sets either with or without percentages. Percentage distribution sets can include both positive and negative percentages.
Use a 100 percent distribution set when the percentage of expenses to allocate is already known. For example, define a fully allocated distribution set for a rent invoice by assigning 70 percent of the invoice amount to the sales facility expense account and 30 percent to the administration facility expense account.
Use a 0 percent distribution set when the percentage of expenses to allocate is not known. For example, define a distribution set with no amounts allocated to the sales facility expense account and the administration facility expense account. You can then enter amounts for the distributions during invoice entry depending on variables such as the monthly head count for each department.
Payment terms are used to automatically create installments on an invoice with up to three levels of discount. You can define payment terms to create multiple installments and multiple levels of discounts. Share payment terms across business units through set assignment.
Payment terms consist of one or more lines, each of which creates one invoice installment. Each payment term line and corresponding installment have a due date and up to three discount dates. Each payment term line and corresponding installment also have due or discount amounts. When you define payment terms, you specify either percentages or fixed amounts.
This figure shows the components of a payment term. Each payment term consists of one or more lines, and each line can have up to three discounts. Assign payment terms to one or more sets to share them across business units.
Important
If you update the payment terms on an invoice, Oracle Fusion Payables immediately recalculates the installments for the invoice. You must re-enter any manual adjustments you made to the previous installment.
Payment terms due dates and discount dates are based on one of the following:
Fixed Date: A specific day, month, and year when an installment is due for payment.
Days: A number of days added to the invoice terms date.
Calendar: A Payables calendar that is divided into periods. Assign a due date to the period that includes the invoice terms date. You can assign due dates to avoid weekends, holidays, and so on. You cannot assign calendar-based terms to an invoice if a period is not defined for the terms date.
Day of Month: A type of payment term with the following attributes:
Day of Month: A specific day of the month when an installment is due for payment. For example, enter 15 to schedule payment on the fifteenth day of the month. Enter 31 to schedule payment for the last day of the month, including months with less than 31 days.
Cutoff Day: The day of the month after which the installment due dates and discount dates advance to a future month. If you do not specify a cutoff day, the current accounting month is used to determine due dates and discount dates.
Months Ahead: If you enter 0 and the invoice terms date is the same as, or later than, the cutoff day, Payables uses the day of the month in the next month to set the installment due date.
For example, if the Cutoff Day is 11, Day of Month is 15, and Months Ahead is 0, and you enter an invoice with a terms date of January 12, the installment due date is February 15. If Months Ahead is 1, the installment due date is March 15. If the Cutoff Day is 11, Day of Month is 15, and Months Ahead is 0, and you enter an invoice with a terms date of January 10, the installment due date is January 15.
Note
Only due dates, not discount dates, can be based on a calendar.
If you enter an Identifying PO on an invoice, the purchase order provides the default payment terms. If you do not enter an Identifying PO, the supplier site provides the default payment terms. If there are no payment terms for the supplier site, the payment terms from the Manage Invoice Options page are used. You can override the default payment terms on any invoice.
This figure shows the payment term defaulting flow during invoice entry.
Payment terms are enabled for reference data sharing using the method of assignment to multiple sets, no common values allowed. The predefined reference group is called Payables Payment Terms and the determinant type for the reference group is business unit. A payment term must be assigned a reference data set before you can use the payment term.
This figure shows how payment terms Net 45 and Net 30 are shared across different business units.
The payment term Net 45 is assigned to the reference data set North America. The reference data set North America is assigned to business units United States and Canada. Invoices for these business units can use the payment term Net 45. The payment term Net 30 is assigned to reference data sets North America and Europe. The reference data set Europe is assigned to business unit France. Invoices for business units United States, Canada, and France can use the payment term Net 30.
Setup for payment term reference data sharing includes:
Assigning a reference data set to a business unit: When you define a business unit, you assign the business unit a reference data set for the reference group Payables Payment Terms.
Generating a data role for a reference data set: To assign a reference data set to a payment term, you must first generate a data role for that reference data set. Generate the data role using the predefined data role template called Financials Common Module Template for SetID.
Provisioning a data role to the implementor: Assign the reference data set data role to the implementor who creates payment terms.
Creating a payment term: When you create a payment term, assign one or more reference data sets to the payment term in the Set Assignment region on the Manage Payment Terms page.
Important
You must assign the predefined payment term Immediate to the reference data set that is assigned to the business unit before you can define common options for Payables and Procurement.
Note
You can assign payment terms to the predefined common set, which works like any other set. However, these payment terms will only be available to business units using the common set as the reference data set, unless you assign the payment terms to other reference data sets as well.
This example demonstrates how to create payment terms that are based on a certain number of days from the invoice terms date.
This table summarizes key decisions for the scenario.
Decisions to Consider |
In This Example |
---|---|
Are terms based on amounts or percentages? |
Percentages |
How many installments and discounts does this payment term have? |
The installments and discounts are as follows:
|
Field |
Value |
---|---|
Due Percent |
40 |
Days |
10 |
First Discount Percent |
5 |
First Discount Days |
7 |
Field |
Value |
---|---|
Due Percent |
35 |
Days |
20 |
First Discount Percent |
3 |
First Discount Days |
15 |
Field |
Value |
---|---|
Due Percent |
25 |
Days |
30 |
First Discount Percent |
2 |
First Discount Days |
25 |
Invoice tolerances determine whether matching holds are placed on an invoice for variances between invoice, purchase order, and receipt information. When you run the invoice validation process for an invoice matched to a purchase order or receipt, validation checks that the invoice matches the purchase order or receipt within the matching tolerances you define.
For example, if the billed amount for an item exceeds the amount or quantity tolerances, then invoice validation applies holds to the invoice and prevents payment until the holds are released.
There are two types of tolerances. You can define tolerances based on quantity or amount. For each type of tolerance, specify percentages or amounts. Once you define your tolerances, assign them to a supplier site.
Note
If you specify a percentage tolerance of zero, no variance is allowed. If you want a low tolerance, specify a small percentage. If an active tolerance does not have a value, then infinite variance is allowed.
Quantity-based tolerances apply to invoices that you match to a purchase order where the match basis on the invoice is quantity. You can define the following quantity-based tolerances:
Ordered Percentage: The percentage difference above the purchase order schedule line ordered quantity that you allow suppliers to invoice. The invoice validation process checks the billed quantity against the ordered quantity without taking price into consideration.
Maximum Ordered: The quantity difference above the purchase order schedule line ordered quantity that you allow suppliers to invoice. The invoice validation process checks the billed quantity against the ordered quantity without taking price into consideration. Enter a maximum ordered quantity tolerance only if most of your purchase orders are for the same relative value.
Received Percentage: The percentage difference above the purchase order schedule line received quantity that you allow suppliers to invoice. The invoice validation process checks the billed quantity against the received quantity without taking price into consideration.
Maximum Received: The quantity difference above the purchase order schedule line received quantity that you allow suppliers to invoice. The invoice validation process checks the billed quantity against the received quantity without taking price into consideration. Enter a maximum quantity tolerance only if most of your purchase orders are for the same relative value.
Price Percentage: The percentage difference above the purchase order schedule line unit price that you allow suppliers to invoice.
Conversion Rate Amount: The amount of variance you allow between an invoice amount and the amount of the purchase order schedule that it is matched to. Invoice validation compares the ledger currency of each, based on the invoice and purchase order conversion rates respectively. Enter a conversion rate amount tolerance only if you enter foreign currency invoices in Oracle Fusion Payables.
Schedule Amount: The amount of variance you allow between all invoice amounts in the transaction currency matched to a schedule, and the amount of the purchase order schedule.
Total Amount: The total amount of variance you allow for both the Conversion Rate Amount variance and the Schedule Amount combined. If you do not use foreign currency, do not enter a value for this tolerance.
Amount-based tolerances apply to invoices that you match to a purchase order where the match basis on the invoice is amount. You can define the following amount-based tolerances:
Ordered Percentage: The percentage difference above the purchase order schedule line ordered amount that you allow suppliers to invoice. The invoice validation process checks the billed amount against the ordered amount.
Maximum Ordered: The amount difference above the purchase order schedule line ordered amount that you allow suppliers to invoice. The invoice validation process checks the billed amount against the ordered amount.
Received Percentage: The percentage difference above the purchase order schedule line received amount that you allow suppliers to invoice. The invoice validation process checks the billed amount against the received amount.
Conversion Rate Amount: The amount of variance you allow between an invoice amount and the amount of the purchase order schedule that it is matched to. Invoice validation compares the ledger currency of each, based on the invoice and purchase order conversion rates, respectively. Enter a conversion rate amount tolerance only if you enter foreign currency invoices in Payables.
Total Amount: The total amount of variance you allow for both the Conversion Rate Amount variance and the Schedule Amount combined. If you do not use foreign currency, do not enter a value for this tolerance.
Use the Manage Invoice Holds and Releases page to define the names that you use to manually place and release holds on invoices. Associate names of holds with an invoice hold type and names of releases with an invoice release type. Assign the hold name you define to an invoice to place the invoice on hold. You cannot pay an invoice that has a hold applied to it. Use release names to remove the holds you applied.
Determine whether to allow accounting entry creation for the hold names you define. For example, if you assign a hold name that does not allow accounting to an invoice, you cannot create accounting entries for the invoice until you remove the hold. If you want to use the holds and releases you define in the Holds Resolution workflow process, specify additional hold and release name attributes.
Oracle Fusion Payables predefines hold and release types along with hold and release names that it uses during the invoice validation process. You can query the predefined types and names on the Manage Invoice Holds and Release page, but you cannot modify them.
This table lists the predefined hold types and whether you can define hold names for them.
Hold Type |
Allow User-Defined Hold Name |
---|---|
Account Hold Reason |
No |
Future Period Hold Type |
No |
Insufficient Information |
No |
Invoice Hold Reason |
Yes |
Invoice Line Reason |
Yes |
Matching Hold Reason |
No |
Variance Hold Reason |
No |
This table lists the predefined release types and whether you can define release names for them.
Release Type |
Allow User-Defined Release Name |
---|---|
Account Release Reason |
No |
Future Period Release |
No |
Hold Quick Release Reason |
Yes |
Invoice Quick Release Reason |
Yes |
Invoice Release Reason |
Yes |
Matching Release Reason |
Yes |
Sufficient Information |
No |
Variance Release Reason |
Yes |
When you create a calendar, you must select a period frequency. Period frequencies determine the number of periods per year and the period name format.
Select from among the following frequencies:
4-4-5: Twelve periods where all periods have four weeks except the third, sixth, ninth, and twelfth periods that have five weeks
4-5-4: Twelve periods where all periods have four weeks except the second, fifth, eighth, and eleventh periods that have five weeks
5-4-4: Twelve periods where all periods have four weeks except the first, fourth, seventh and tenth periods that have five weeks
Monthly: Twelve periods where each month is a period
Other: Manually-defined calendar
Quarterly: Quarterly calendar where each quarter consists of three months
Weekly: Weekly calendar with fifty-two weeks where each week is a period comprised of seven days
Oracle Fusion Payables can generate periods automatically when you define a Payables calendar.
When you create a calendar or add years to an existing calendar, the following attributes control how periods are generated:
Period frequency
Periods per year
Start date
Period name format
Note
If you select a Period Frequency of Other, you must define calendar periods manually.
This table lists and describes the calendar attributes that are used to generate periods.
Calendar Attribute |
Description |
---|---|
Period frequency |
Determines the number of periods per year and period name format options. |
Periods per year |
Identifies the number of periods per year based on the period frequency selected. |
Start date |
Represents the first date for the calendar and will be the Start Date for the first period. |
Period name format |
Used along with the period frequency and year to determine the period name.
|
This example shows the periods generated for a calendar with a period frequency of 4-4-5, a start date of 1/1/2011, and a period name format of MMM.
Period Name Prefix |
Year |
Sequence |
Start Date |
End Date |
Period Name |
---|---|---|---|---|---|
Jan |
2011 |
1 |
1/1/11 |
1/28/11 |
Jan-11 |
Feb |
2011 |
2 |
1/29/11 |
2/25/11 |
Feb-11 |
Mar |
2011 |
3 |
2/26/11 |
4/1/11 |
Mar-11 |
Apr |
2011 |
4 |
4/2/11 |
4/29/11 |
Apr-11 |
May |
2011 |
5 |
4/30/11 |
5/27/11 |
May-11 |
Jun |
2011 |
6 |
5/28/11 |
7/1/11 |
Jun-11 |
Jul |
2011 |
7 |
7/2/11 |
7/29/11 |
Jul-11 |
Aug |
2011 |
8 |
7/30/11 |
8/26/11 |
Aug-11 |
Sep |
2011 |
9 |
8/27/11 |
9/30/11 |
Sep-11 |
Oct |
2011 |
10 |
10/1/11 |
10/28/11 |
Oct-11 |
Nov |
2011 |
11 |
10/29/11 |
11/25/11 |
Nov-11 |
Dec |
2011 |
12 |
11/26/11 |
12/30/11 |
Dec-11 |
A Payables calendar is a calendar that you define in Oracle Fusion Payables for automatic withholding taxes, payment terms, and key indicator reporting. Payables calendar periods are completely separate from the accounting periods you define on the Create Accounting Calendar page.
The reporting limit amount is the minimum amount used to determine whether to report on payments to a supplier. If you do not enter a reporting limit amount, the limit is assumed to be zero. If you are doing business within the United States, refer to federal or state tax publications to obtain information regarding the US 1099 reporting requirements for each participating tax region.
Select from one the following methods to compare payments to the reporting limit amount:
Same as federal
Compare individually
Compare sum
Use the federal reporting limit instead of the region reporting limit amount, which Oracle Fusion Payables has predefined as 600 USD.
Compare the reporting limit amount to the sum of payments for each 1099 miscellaneous income tax type. For example, the reporting limit for region X is 600 USD. If you make a total of two 400 USD payments to a supplier in region X and classify each payment as a different 1099 miscellaneous type, Payables will not report this supplier to region X because neither individual payment type exceeded the region X reporting limit. In this case, Payables only reports the supplier to the federal tax authorities.
Compare the reporting limit amount to the sum of payments for all 1099 miscellaneous income tax types. For example, the reporting limit for region X is 600 USD. If you make a total of two 400 USD payments to a supplier and classify each payment as a different 1099 miscellaneous income tax type, Payables will report this supplier to the region X tax authority because the sum of the payments exceeds the region X reporting limit. In this case, Payables reports the supplier to both federal and state tax authorities.
A reporting entity is any person or organization that has a unique tax identification number. Oracle Fusion Payables uses reporting entities for US 1099 reporting. US 1099 reports accumulate the totals for all primary balancing segment values assigned to a reporting entity to derive the total amount paid.
For each reporting entity, assign one or more primary balancing segment values. Typically, primary balancing segment values represent different legal entities. For example, an enterprise defines a reporting entity called Headquarters which is comprised of Company 1, Company 2, and Company 3. Each company is represented by a primary balancing segment value. When submitting a US 1099 report, Headquarters is entered as the reporting entity for the report. Payables prints the accumulated payments for Companies 1, 2, and 3 on the US 1099 report. Payables sums up the paid invoice distributions that have these company balancing segment values in their accounts.
Note
Primary balancing segment values must be unique across reporting entities.
You can submit the following US 1099 reports for a specific reporting entity:
US 1096 Report
US 1099 Report
US 1099 Invoice Exceptions Report
US 1099 Supplier Exceptions Report
US 1099 Payments Report
US 1099 Electronic Media Report
You may be required to withhold tax from your supplier invoices and employee expense reports, and pay it to a tax authority on behalf of the supplier. Set withholding tax options on the Manage Tax Reporting and Withholding Tax Options page and on the supplier setup.
The withheld amount is calculated according to how you set the Apply Withholding Tax option. If you apply withholding tax at invoice validation, then the withheld amount is based on the invoice amount. On the other hand, if you apply withholding tax at payment, then the withheld amount is based on the payment amount.
Review withheld amounts online or run the standard reports.
To automatically withhold tax, perform the following steps:
Enable the Use withholding tax option and set the other withholding tax options in the Withholding Tax region on the Manage Tax Reporting and Withholding Tax Options page.
Create each tax authority as a supplier with a supplier type of Tax Authority.
Create withholding tax codes.
Create withholding tax groups.
Specify withholding tax details for suppliers.
Define withholding tax certificates to handle rate exceptions.
To perform automatic withholding, you assign a withholding tax group to an invoice line. You can accept the default withholding tax group or select another group. When applying withholding tax, Payables creates one or more withholding tax type invoice lines, updates the withheld amount on the invoice, and updates the unpaid amount on the installment.
For example, if an invoice for 100 USD has withholding tax of 20 USD, Payables creates a withholding tax type invoice line for -20 USD. The withheld amount is -20 USD, and the unpaid amount on the installment is 80 USD.
Restriction
Automatic withholding tax is calculated only once.
Automatic withholding tax is not calculated:
After you enter a manual withholding line.
If you pay an invoice with a manual payment or a refund, and the option to apply withholding is at payment time.
After you apply withholding tax to an invoice, you can optionally create invoices to remit the withheld tax to a tax authority. Payables can automatically create withholding tax invoices, or you can perform this task manually. To create withholding tax invoices automatically, set the Create Withholding Invoice option to specify whether to create withholding invoices at invoice validation or at payment.
You can run the following reports to satisfy tax authority, supplier, and management reporting requirements:
Withholding Tax Reports by Invoice, Payment, and Supplier
Payables Withholding Tax by Tax Authority Report
Payables Withholding Tax Letter
A withholding tax code is the name for a withholding tax. Withholding tax codes can have multiple rates, effective date ranges, tax amount limits, and taxable amount limits. You must associate a supplier with a type of Tax Authority to a withholding tax code so you can create withholding invoices to pay taxes you withheld from your suppliers.
Each tax code has a rate structure to specify amount or rate controls. To define rates for the withholding tax code, you must select a rate type. Oracle Fusion Payables uses the rate type of Standard.
To use withholding tax codes, assign them to one or more withholding tax groups. When you define a withholding tax code, you can enable the Create withholding tax group option to automatically create a group for that tax code. To handle rate exceptions, define withholding tax certificates for a withholding tax code.
When you define a withholding tax code, specify amount or rate controls by selecting one of the following rate structures:
Flat rate
Period limit
Amount ranges
A flat rate structure has no amount or period limits. Select this option if you do not want to control the tax based on amounts paid. For example, if withholding tax is deducted at a specified rate of 10 percent, create a flat rate tax code with a tax rate of 10 percent.
A period limit structure restricts the amount of tax withheld during a calendar period for a supplier. Withholding stops after you pay a certain amount within the withholding tax period. For example, for each withholding calendar period, no more than 10,000 USD is withheld. Attributes of the period limit rate structure include Calendar and Period.
Restriction
Oracle Fusion Payables will not create a payment for a foreign currency invoice if the invoice has a withholding tax group that uses a period rate structure.
An amount ranges structure applies the tax rate to either the amount of the total invoices paid to date, or to the amount of tax withheld to date for a supplier. For example, define a tax that for each year will withhold at a rate of 10 percent until you pay 100,000 USD in invoices, and then withhold at a rate of 15 percent after you pay the 100,000 USD. In addition to these controls, the same withholding tax code can have different rates depending on the effective date. For example, a withholding tax has a rate of 10 percent one year and 11 percent the following year.
Amount rate structures have the following attributes:
Amount Basis. Select whether the amount range applies to the gross amount of total paid invoice amounts or to the total withheld amount. Enter one or both amount range values to set upper and lower amount limits for taxable amounts or the tax withheld amount.
Period Basis. Select whether the amount range applies to the withholding tax calendar period or to the invoice. If you use period basis, select the calendar that you created for withholding tax use.
Restriction
Payables will not create a payment for a foreign currency invoice if the invoice has a withholding tax group that uses an amount ranges structure.
Withholding tax groups include one or more withholding tax codes. Define withholding tax groups to associate more than one withholding tax code to a single transaction. For example, assign a withholding tax group to an invoice line or distribution if you need to withhold taxes at both the local and country level, each tax withheld at different rates and remitted to different tax authorities.
You can edit a withholding tax group to add more tax codes if needed.
Rank the tax codes in a withholding tax group. When you enter an invoice with a withholding tax group that consists of multiple tax codes, taxes are calculated in order of rank.
Lower ranked taxes are applied to the amount of the invoice or distribution less the previous withholding tax amounts. The highest rank is 1. For example, define a withholding tax group with two tax codes. Tax A for 10 percent has a rank of 1, and tax B for 5 percent has a rank of 2. Payables calculates the withholding tax for a 100 USD invoice as follows: tax A is 10 USD, tax B is 4.50 USD (.05(100 - (100 * .10))).
You can assign the same rank to more than one tax code if you want to use the gross invoice amount to calculate withholding amounts for each tax code. For example, define a tax group with two codes, both with a rank 1 and a rate of 10 percent. On an invoice for 100 USD, two automatic withholding tax lines, each for 10 USD are generated. This is because both automatic withholding tax codes of 10 percent are applied to 100 USD.
If you do not specify a withholding tax group at the supplier site assignment level, the default tax group on the invoice will come from the tax group in the Withholding Tax region on the Manage Tax Reporting and Withholding Tax Options page. You can override any default withholding tax group at any time.
Withholding tax certificates specify withholding tax code rate exceptions that are granted by a tax authority. You can define withholding tax code rate exceptions for all invoices of a supplier site or for specific invoices of that site. A tax code can have one or more certificates.
Before defining withholding tax certificates and exceptions, you must:
Enable the Use withholding tax option.
Create withholding tax codes.
Enter withholding details for suppliers.
To define a withholding certificate, you must specify a certificate number, type, and priority.
A certificate number can be user-defined or it can be a number assigned to a certificate issued to a supplier by the tax authority.
Oracle Fusion Payables predefines a certificate type of Standard. You can define additional certificate types on the Manage Payables Lookups page.
Only one certificate can be enforced at a time. If you have one or more certificates for the same withholding tax code and the date ranges overlap, Payables applies the certificate with the highest priority, where 1 is the highest priority. If a certificate specifies that the supplier site is exempt from the tax code, then enter 0 as the tax rate.
Note
The tax rate for a withholding certificate overrides all rates for the withholding tax code.
To define an exception for an invoice, specify the invoice number.
Note
The tax rate for an exception overrides all rates for the withholding tax code.
Invoice approval rules are the policies that describe an invoice approval flow. Oracle Fusion Payables provides configurable predefined invoice approval rules as well as the ability to add rules using the Approval Management extensions (AMX) of the Oracle SOA Suite and Oracle Human Workflow. The Oracle Business Process Management (BPM) Worklist Application provides the interface to administer the rules.
When you initiate approval for an invoice, Payables invokes the invoice approval task, which in turn invokes a set of approval rules created in AMX to build the list of approvers. AMX then sends out approval notifications to the first set of approvers, and every time it receives a response to an approval notification, AMX sends out approval notifications to the next set of approvers on the approval list. This process is repeated until all approvals are complete.
A BPM Worklist administrator can access the rules in the BPM Worklist. A user who belongs to the FUN_FINANCIAL_APPLICATION_ADMINISTRATOR_JOB role will be a BPM Worklist Administrator. To access the BPM Worklist for Financials, select View - Servers - Financials from the Worklist table on the Oracle Fusion Applications home page. To access the invoice approval task, click the Administration link, click the Task Configuration tab, and then click the task FinApInvoiceApproval from the left hand pane named Tasks to be configured.
The FinApInvoiceApproval task configuration has event-driven and data-driven settings. The event-driven settings include assignment and routing policies. The data-driven settings include the approval rules.
To modify the event-driven settings for the FinApInvoiceApproval task, select the Event Driven tab.
The following table lists the predefined assignment and routing policy settings for the FinApInvoiceApproval task.
Field |
Predefined Value |
---|---|
Task Aggregation |
None |
On Error Notify |
Not applicable |
Allow all participants to invite other participants |
Not enabled |
Allow participants to edit future participants |
Not enabled |
Allow initiator to add participants |
Not enabled |
Enable auto claim |
Not enabled |
Complete task when participant chooses |
Enabled, REJECT; HtOutcmeForceApproveForceApproveInvoice Important Do not remove the value HtOutcmeForceApproveForceApproveInvoice. Removing HtOutcmeForceApproveForceApproveInvoice will affect the force approval functionality. |
Enable early completion of parallel subtasks |
Enabled |
Complete parent tasks of early completing subtasks |
Enabled |
Expiration and Escalation Policy |
Never Expire |
Reminders |
No reminders |
The following table lists the predefined e-mail notification settings for the FinAPInvoiceApproval task.
Field |
Predefined Value |
---|---|
Task Status, Recipient, Notification Header |
Assign, Assignees, null |
Task Status, Recipient, Notification Header |
Complete, Initiator, null |
Task Status, Recipient, Notification Header |
Error, Owner, null |
Make notifications secure (exclude details) |
Not enabled |
Make notifications actionable |
Enabled |
Send task attachments with e-mail notifications |
Enabled |
The following table lists the predefined task content settings for the FinAPInvoiceApproval task.
Task Content |
Individuals with Read Access |
Individuals with Write Access |
---|---|---|
Payload, Flexfields |
Admin; Approvers; Reviewers |
Assignees; Creator; Owner |
Attachments, Comments |
Admin; Approvers |
Assignees; Creator; Owner, Reviewers |
Assignees, Dates, History, Reviewers |
Admin; Approvers; Assignees; Creator; Owner; Reviewers |
None |
For more information on task configuration, see the Oracle Fusion Middleware Modeling and Implementation Guide for Oracle Business Process Management.
An invoice request is an invoice without a purchase order that was created using Oracle Fusion Supplier Portal and that is pending approval by the requester on the invoice. Once the requester approves the invoice request, the invoice request becomes an invoice. You cannot disable or configure this initial approval flow.
To set up additional approvals for an invoice request after the initial approval by the requester, configure the InvoiceRequestApprovalRuleSet ruleset. The FinApInvoiceApproval task includes the InvoiceRequestApprovalRuleSet ruleset, which you access on the Data Driven tab. The ruleset contains an empty rule called IgnoreInvoiceRequestApprovalRuleSetRule, which you can modify as needed.
When you initiate invoice approval, the invoice approval task determines whether an invoice requires approval. Every invoice that requires approval must be approved before the invoice can be paid unless the invoice is force approved, in which case approval is not required and the invoice can be paid even though it has been requested for approval.
The FinApInvoiceApproval task includes the InvoiceApprovalRuleSet ruleset. The InvoiceApprovalRuleSet ruleset contains the following predefined rules, which you access on the Data Driven tab.
ManagerApprovalRule rule: Approval of invoice with invoice amount greater than or equal to 1000 by an immediate supervisor
AutoApprovalRule rule: Automatic approval of invoice with invoice amount less than 1000
Note
Rules must be granular such that one rule must be evaluated to true at run time.
The following table lists the parameters for the predefined ManagerApprovalRule rule.
Field |
Predefined Value |
Description |
---|---|---|
Condition |
Task.payload.getInvoiceHeader1Response.result.invoiceAmount same or more than 1000 |
Activates the rule when the amount of the invoice is greater than or equal to 1000. To use other invoice attributes, select from the condition browser. |
List Builder |
Supervisory |
Determines the list of approvers using the employee supervisory hierarchy, which is defined in Oracle Fusion Human Capital Management. |
Response Type |
Required |
Indicates that approval notification requires a response. |
Number of levels |
1 |
Specifies that one supervisory level is required to complete invoice approval. |
Starting Participant |
HierarchyBuilder.getManager("supervisory",Task.creator,-1,"","") |
Identifies the first participant in the list of approvers. For this rule, the first participant is the supervisor of the user who submitted the invoice. |
Top Participant |
HierarchyBuilder.getPrincipal("FINUSER30",-1,"","") |
Specifies the user name of the last approver. Approval does not go beyond this participant in the hierarchy. To use this predefined rule, you must change the user name to the highest approver in the supervisory hierarchy to whom the invoice approval must be sent. |
Auto Action Enabled |
False |
Indicates that automatic approval is not enabled. |
Auto Action |
Null |
Identifies the outcome to be set. The value is null because automatic approval is not enabled. |
The following table lists the parameters for the predefined AutoApprovalRule rule.
Field |
Predefined Value |
Description |
---|---|---|
Condition |
Task.payload.getInvoiceHeader1Response.result.invoiceAmount less than 1000 |
Activates the rule when the amount of the invoice is less than 1000. To use other invoice attributes, select from the condition browser. |
List Builder |
Supervisory |
Determines the list of approvers using the employee supervisory hierarchy, which is defined in Oracle Fusion Human Capital Management. |
Response Type |
Required |
Indicates that approval notification requires a response. |
Number of levels |
1 |
Specifies that one supervisory level is required to complete invoice approval. |
Starting Participant |
HierarchyBuilder.getManager("supervisory",Task.creator,-1,"","") |
Identifies the first participant in the list of approvers. For this rule, the first participant is the supervisor of the user who submitted the invoice. |
Top Participant |
HierarchyBuilder.getPrincipal("FINUSER30",-1,"","") |
Specifies the user name of the last approver. Approval does not go beyond this participant in the hierarchy. To use this predefined rule, you must change the user name to the highest approver in the supervisory hierarchy to whom the invoice approval must be sent. |
Auto Action Enabled |
True |
Indicates that automatic approval is enabled. |
Auto Action |
"APPROVE" |
Identifies the outcome to be set, which is to approve the invoice. |
For more information on how to change rules, see the Oracle Fusion Middleware Modeling and Implementation Guide for Oracle Business Process Management.
List builders determine the actual list of approvers. You can configure the invoice approval rules to use different list builders.
For more information on using list builders, see the Oracle Fusion Middleware Modeling and Implementation Guide for Oracle Business Process Management.
The Define Invoicing and Payments Configuration for Rapid Implementation task list provides the setup tasks that are critical for Oracle Fusion Payables. These setup tasks are either mandatory or frequently used. Setups that are not listed under this task list can be accessed from the standard implementation template.
Invoice options and payment options are automatically created with default values when the common options for Payables and Procurement are defined for a new business unit. To update the default values, access the invoice and payment options setups from the standard implementation template.