7Disbursements

This chapter contains the following:

Electronic Payments

Watch video

Watch: This video tutorial shows you how to set up and make electronic payments. The content of this video is also covered in text topics.

To pay your suppliers, you can make payments through electronic funds transfer by transmitting payment files to your bank or payment system.

This topic includes the following tasks:

  • Creating an ISO payment process profile

  • Submitting a payment process request

  • Reviewing selected invoices

  • Reviewing proposed payments

  • Transmitting payment files

  • Viewing payments and invoices

Creating an ISO Payment Process Profile

The first step is to set up a payment process profile that contains all the necessary details to manage the payment process. You will create an ISO payment process profile. ISO is a global standard for financial payment formats and messages, which is accepted by most banks. ISO has two versions: SEPA for European countries and CGI for non-European countries.

To create an ISO payment process profile, complete these steps:

  1. Sign in as a setup user.

  2. Click Navigator > Setup and Maintenance.

  3. In the Search field, enter Manage Payment Process Profiles and click Search.

    The Search page appears.

  4. Click the Manage Payment Process Profiles link.

  5. On the Manage Payment Process Profiles page, in the Search Results section, click Add.

  6. On the Create Payment Process Profile page in the Name field, enter ISO_PPP_XXX.

  7. In the Code field, enter ISO_Code_XXX.

    Tip: In place of XXX, enter the appropriate number.
  8. In the From Date field, accept the default setting of today's date.

  9. From the Payment File Format choice list, search and select the ISO20022 Common Global Implementation Format.

  10. From the Processing Type choice list, select Electronic.

  11. From the Payment Confirmation Point choice list, select When the payment file is transmitted.

  12. Select the Usage Rules tab.

  13. Click the All option for Payment Methods, Disbursement Bank Accounts, Business Units, and Currencies so that the payment process profile can be used with any payment.

    Note: You can click the Specify option to limit the use of this profile to payments that have specific payment methods, disbursement bank accounts, business units, or currencies.
  14. Select the Payment System tab.

    You can specify that the payment file is automatically transmitted after formatting. You can also configure the payment file transmission to allow payment file downloading to the Universal Content Management (UCM) folder after the payment file is transmitted.

  15. From the Payment System choice list, select ISO20022 Payment System.

  16. Select the Automatically transmit payment file after formatting check box.

  17. In the Payment System Accounts section, for the payment system account of Settings_CGI, select ISO_UCM_Upload from the Payment File Transmission Configuration choice list.

  18. For the payment system account of Settings_SEPA, enter today's date in the To Date field.

  19. Select the Payment tab.

    On the Payment tab, you can specify attributes for grouping invoices in the same payment if they share the same attribute.

  20. In the Document Grouping Rules section, select these check boxes: Due date, Settlement priority, and Delivery channel.

  21. Select the Payment File tab.

    On the Payment File tab, you can specify rules for grouping payments into payment files.

  22. In the Overrides section, from the Service Level choice list, select the type of payment.

  23. From the Delivery Channel choice list, select the delivery type.

  24. Select the Grouping tab.

    Since you are creating an ISO payment process profile, you must select transaction grouping rules on the Grouping tab. Grouping is based on the ISO standardized method of grouping transactions in each transmission file.

  25. In the Transaction Grouping Rules section, select these check boxes: Payment Date, Disbursement Bank Account, Service Level and Delivery Channel.

  26. Select the Reporting tab.

    On the Reporting tab, you can specify the timing and types of reports to generate.

  27. In the Payment File Register section, from the Format choice list, select Payment File Register Format with Document Detail.

  28. Select the Automatically submit when payments are confirmed check box.

  29. In the Separate Remittance Advice section, from the Format choice list, select Separate Remittance Advice Format.

  30. Select these check boxes: Automatically submit when payments are confirmed and Allow multiple copies for payment file.

  31. From the Condition choice list, select All payments.

  32. From the Delivery Method choice list, select E-Mail.

  33. Click Save and Close. A Confirmation message appears.

  34. Click OK.

  35. Click Done.

  36. Sign out.

Submitting a Payment Process Request

The second step is to submit a payment process request. A payment process request is a grouping of documents payable for which a source product requests payment. The payment process request will make payments of three invoices with different due dates.

To submit a payment process request, complete these steps:

  1. Sign in as a transaction user.

  2. On the Home page, click Payables > Payments.

  3. On the Overview page, click the Tasks icon and then click the Submit Payment Process Request link.

  4. On the Submit Payment Process Request page, select the Selection Criteria tab.

  5. In the Name field, enter ISO_PPRXXX.

  6. From the Invoice Group choice list, search and select 129Group.

    Tip: In place of XXX, enter the appropriate number.
  7. Select the Payment and Processing Options tab.

    On the Payment and Processing Options tab, you can specify payment attributes and processing options. You can select the disbursement bank account from which invoices will be paid, the payment process profile you just created, and several processing options to stop the process for review. If the reviews are satisfactory, payment files are created immediately.

  8. From the Disbursement Bank Account choice list, search and select BofA-204.

    Note: Choose the BofA-204 bank account that has Account Number: 10271-17621-619.
  9. From the Payment Process Profile choice list, search on ISO and select ISO_PPP Settings_CGI .

  10. From the Payment Conversion Rate Type choice list, select Corporate.

  11. In the Processing Options subsection, select these check boxes: Review installments, Review proposed payments, and Create payment files immediately.

  12. In the Validation Failure Handling subsection, from the Document choice list, select Stop process for review.

  13. From the Payment choice list, select Stop process for review.

  14. Click Submit.

    A Confirmation message appears with the process number.

  15. Click OK.

  16. Scroll down to the Schedule Requests section to check the status of the request.

  17. Click the Refresh icon until Succeeded displays in the Status column for both Initiate Payment Process Request and Payables Selected Installments Report processes that correspond to your process ID.

  18. On the Overview page, click the Tasks icon.

  19. Click the Manage Payment Process Requests link.

  20. On the Manage Payment Process Requests page, enter ISO_PPRXXX in the Name field.

    Note: In place of XXX, enter the appropriate number.
  21. Click Search.

    Note: The payment process request shows a Status of Pending installment review.
  22. Click the Action icon.

    On the Selected tab, three invoices were selected by the payment process request. Since the selected installments look fine, the process continues.

Reviewing Selected Invoices

The third step is to review selected invoices.

To review selected invoices, complete these steps:

  1. On the Review Installments page, click Submit.

    A Confirmation message appears that states your process ID.

  2. Click OK.

  3. Expand the Search section.

  4. The Name field contains the name of the payment process request, ISO_PPRXXX.

  5. Click Search.

    Note: The status of the payment process request changes to Pending proposed payment review.
  6. Click the Action icon.

Reviewing Proposed Payments

The fourth step is to review proposed payments.

To review proposed payments, complete these steps:

  1. On the Review Proposed Payments page, click Resume Payment Process.

    A Confirmation message appears that states the process was submitted and specifies a process ID.

  2. Click OK.

    Note: In the Payment Summary section, two payments were created and none were rejected or removed. Since the proposed payments are fine, you can continue.

Transmitting Payment Files

The fifth step is to transmit payment files.

To transmit payment files, complete these steps:

  1. Expand the Search section.

  2. Click Search.

    Note: The status of the payment process request is Payments completed. The status of the payment file is now Transmitted.

    The payment process request completed and the payment files were transmitted to the payment system.

  3. In the Name field, enter the payment process request name, ISO_PPR_XXX.

    Note: In place of XXX, enter the appropriate number.
  4. Click the payment file number.

    The Payment File page appears.

  5. In the Payments section, click the Eye glasses icon to view the invoices.

Viewing Payments and Invoices

The final step is to view payments and invoices.

To view payments and invoices, complete these steps:

  1. On the Manage Payment Process Requests page, click the payment file number link.

  2. Scroll down the Payment File page to the Payments section.

    The Payments section contains two payments.

  3. Click the Eye Glasses icon for the $800.00 USD payment.

  4. On the Payment page, select the Documents Payable tab.

    The two invoices within Payment XXX are visible.

  5. Click Done.

Check Payments

Watch video

Watch: This video tutorial shows you how to set up and make check payments. The content of this video is also covered in text topics.

To pay your suppliers, you can make payments by printing checks.

This topic includes the following tasks:

  • Creating the payment document

  • Setting up a payment process profile

  • Submitting the payment process request

  • Reviewing installments and proposed payments

  • Printing checks

  • Recording the print status

  • Reviewing a check

Creating the Payment Document

To make check payments, you must first set up a payment document, or check stock, at the disbursement bank account level.

To create a payment document at the disbursement bank account level, complete these steps:

  1. Sign in as a Cash manager.

  2. In the Setup and Maintenance work area, go to the following:

    • Offering: Financials

    • Functional Area: Cash Management and Banking

    • Task: Manage Bank Accounts

  3. On the Manage Bank Accounts page, in the Account Name field, enter BofA-204 and click Search.

    The record of the bank account appears in the Search Results section.

  4. Select the account and click the Edit icon.

    On the Edit Bank Account page, you can view payment documents that have been previously created for the disbursement bank account. To create a payment document, you must provide a name, select the type of paper stock, format, and specify first and last check numbers.

  5. On the Edit Bank Account page, Payment Documents section, click Create.

  6. In the Create Payment Document dialog box, in the Payment Document field, enter Payments Numbered Check Stock.

  7. From the Paper Stock Type choice list, select Numbered Stock.

  8. From the Format choice list, search and select Standard Check Format (Stub after Payment).

  9. In the First Available Document Number field, enter 373001.

  10. In the Last Available Document Number field, enter 373100.

  11. Click OK.

  12. Click Save and Close.

    An Information message is displayed.

  13. Click OK.

  14. Click Done.

  15. Click Done.

  16. Sign out.

Setting Up a Payment Process Profile

A payment process profile is a setup that contains all the necessary details to manage the payment process. To print checks, you must create a payment process profile with a Processing Type of Printed. You name the profile and enter a code. Then, you select the same disbursement payment file format that you used to create the payment document.

To create a payment process profile for printing checks, complete these steps:

  1. Sign in as a setup user.

  2. In the Setup and Maintenance work area, go to the following:

    • Offering: Financials

    • Functional Area: Payments

    • Task: Manage Payment Process Profiles

  3. On the Manage Payment Process Profile page in the Search results section, click the Add icon.

  4. On the Create Payment Process Profile page, in the Name field, enter PPP_XXX.

  5. In the Code field, enter PPP_XXX_Code.

    Note: In place of XXX, enter the appropriate number.
  6. In the From Date field, accept the default setting of today's date.

  7. From the Payment File Format choice list, search and select Standard Check Format (Stub after Payment).

  8. From the Processing Type choice list, select Printed.

  9. For the Pay File option, accept Send to printer.

  10. Select the Usage Rules tab.

  11. Click the All option for Payment Methods, Disbursement Bank Accounts, Business Units, and Currencies so that the payment process profile can be used with any payment.

    Note: You can click the Specify option to limit the use of this payment process profile to payments that have specific payment methods, disbursement bank accounts, business units, or currencies.
  12. Select the Payment System tab.

    You can configure the payment file transmission to allow electronic transmission of the positive pay report to the payment system or bank.

  13. From the Payment System choice list, select BofA File System.

  14. From the Payment File Transmission Configuration choice list, select UCMPut.

  15. In the From Date field, accept the default value of today's date.

  16. Select the Payment tab.

    On the Payment tab, you can specify attributes for grouping invoices in the same payment if they share the same attribute.

  17. In the Document Grouping Rules section, select the Due date check box.

  18. In the Document Limits section, in the Maximum Documents per Payment field, enter 5.

  19. Select the Reporting tab.

    On the Reporting tab, you can specify parameters for the positive pay report. This report lists checks issued by your company with payee names, amounts, and currency. Transmission of the report to your payment system or bank prevents the payment of fraudulent checks, since unauthorized payments are not listed on the report.

  20. In the Positive Pay section, from the Format choice list, select Positive Pay File Format.

  21. Select the Automatically transmit file check box.

  22. Click Save and Close.

    A Confirmation message appears.

  23. Click OK.

  24. Click Done.

  25. Click Done.

  26. Sign out.

Submitting a Payment Process Request

A payment process request is a grouping of documents payable, for which a source product requests payment. You can name the payment process request and select the invoice group.

To submit a payment process request, complete these steps:

  1. Sign in as a transaction user.

  2. Click the Payables icon and select Payments.

  3. On the Overview page, click the Tasks icon and select Submit Payment Process Request.

  4. On the Submit Payment Process Request page in the Name field, enter PPR_XXX.

  5. Select the Selection Criteria tab.

  6. From the Invoice Group choice list, search and select XXXGroup.

    Tip: In place of XXX, enter the appropriate number.
  7. Select the Payment and Processing Options tab.

    On the Payment and Processing Options tab, you can specify payment attributes, processing options, and validation failure handling. You select the disbursement bank account from which the invoices are paid, the payment document and payment process profile you created and other options to stop the process for review and to take action if validations fail. If the reviews are satisfactory, a payment file is created.

  8. From the Disbursement Bank Account choice list, search and select BofA-XXX.

  9. From the Payment Document choice list, select Payments Numbered Stock.

  10. From the Payment Process Profile choice list, select PPP_XXX Positive Pay.

  11. From the Payment Conversion Rate Type choice list, accept Corporate.

  12. In the Processing Options subsection, select these check boxes: Review installments, Review proposed payments, and Create payment files immediately.

  13. In the Validation Failure Handling subsection, from the Document choice list, accept Stop process for review.

  14. From the Payment choice list, accept Stop process for review.

  15. Click Submit.

    A Confirmation message with the process number of the payment process request is displayed.

  16. Click OK.

  17. Scroll down to the Schedule Requests section to check the status of the payment process request.

  18. Click the Refresh icon until Succeeded is displayed in the Status column for the Initiate Payment Process Request and the Payables Selected Installments Report processes that correspond to your process ID.

    The invoice selection process was successfully completed and the Payables Selected Installments report was generated.

Reviewing Installments and Proposed Payments

You opted to stop the process to review invoices and proposed payments.

To review installments and proposed payments, complete these steps:

  1. On the Overview page, Requiring Attention tab, click the Refresh icon. The payment process request appears.

    Note: The payment process request shows a Status of Pending installments review because you opted to stop the process to review the invoices. In the Selected Installments section, five invoices were selected by the payment process request. Since the selection looks fine, you can continue.
  2. Click the Action icon.

  3. On the Review Installments page, review the invoices.

  4. Click Submit.

    A Confirmation message is displayed.

  5. Click OK.

  6. On the Overview page, Requiring Attention tab, click the Refresh icon.

    Note: The payment process request displays the status of Pending proposed payment review because you opted to stop the process to review the proposed payment. Since the proposed payment looks fine, you can continue.
  7. Click the Action icon.

    The Payment Summary section on the Review Proposed Payments page, contains the number of payments created with the total payment amount. Since the payments look fine, you can continue.

  8. On the Review Proposed Payments page, click Resume Payment Process.

    A Confirmation message is displayed.

  9. Click OK.

Printing Checks

The payment process request finished processing. The payment file was automatically formatted and is now ready to print.

To print checks, complete these steps:

  1. On the Overview page, Requiring Attention tab, expand the payment process request icon to display the payment file.

  2. Click the Refresh icon.

    Note: The status of the payment process request is Waiting for payments file processing and the status of the payment file is Formatted and ready for printing.
  3. Click the Action icon.

  4. On the Print Payment Documents page, from the Printer choice list, select PO 407.

  5. Click Print.

    A Confirmation message is displayed.

  6. Click OK.

  7. On the Overview page, Requiring Attention tab, click Refresh to requery the payment process request.

    The payment file status changes to Submitted for printing.

  8. Click the Action icon.

Recording the Print Status

After you print checks, you must examine the printed checks to confirm that they are not spoiled or skipped. If a check is spoiled or skipped, you record the print status.

To record the print status, complete these steps:

  1. On the Payment File page, review the payments and their check numbers. If your checks look fine, click Record Print Status.

  2. On the Record Print Status: Payment File page, click Submit.

    A Warning message is displayed.

  3. Click Record the Print Status.

    A Confirmation message is displayed.

  4. Click OK.

  5. Click Done.

    Note: On the Manage Payment Process Requests page, the payment process request status is Waiting for payment file processing. The payment file status is Printed.
  6. Click Done.

    The Overview page appears.

Reviewing a Check

After printing checks, you can review them.

To review a check, complete these steps:

  1. On the Overview page, scroll down to the Schedule Requests section.

    You can review the schedule requests to verify the status of the positive pay file.

  2. Click Refresh.

  3. On the Create Positive Pay File process row, click the View Output icon to see the output that was transmitted to the payment system or bank.

    A Create Positive Pay File, XXXXX, Output dialog box appears.

  4. Click the ESS link.

    A .txt of the positive pay report is displayed.

  5. On the Format Payment Files process row, click the View Output icon to review the .pdf file of the printed checks.

    A Format Payment Files, XXXXX, Output dialog box appears.

  6. Click the ESS link.

    A .pdf of the check is displayed.

The disbursement process starts when a source product calls Oracle Fusion Payments to process disbursements. For example, Oracle Fusion Payables uses the disbursement process to pay supplier invoices and Oracle Fusion Receivables uses it to pay customer refunds. The disbursement process ends when either electronic payments are transmitted to a payment system or financial institution or paper payment documents, such as checks or promissory notes, are printed.

Electronic processing creates a payment file that is transmitted to a payment system or other financial institution. The file contains instructions that tell the payment system or financial institution how to remit funds. In some cases, funds are remitted electronically by an automatic deposit to a bank account. In other cases, the payment file can instruct the payment system or financial institution to issue a check for payment.

Settings That Affect Disbursements

The following settings in the header region on the Create Payment Process Profile page impact electronic disbursements:

  • Payment File Format choice list: You specify the payment file format to use for the electronic payment file.

  • Processing Type choice list: Electronic.

  • Payment Confirmation Point choice list: Point at which a payment is confirmed. Payments can be automatically confirmed, either when the payment file is formatted or when the payment file is transmitted to the payment system.

  • Allow Manual Setting of Payment Confirmation check box: You can manually confirm payments on the following pages:

    • Manage Payment Files

    • Payment File

    • Overview page in the Payments work area

The following settings in the header region on the Create Payment Process Profile page impact printed disbursements:

  • Payment File Format choice list: You specify the payment file format to use for the printed payment file.

  • Processing Type choice list: Printed.

  • Default Payment Document choice list

  • Send to File radio button: Produces a formatted output file, which is printed outside of Oracle Fusion Applications.

  • Send to Printer radio button

  • Automatically Print After Formatting check box

  • Default Printer choice list

How Disbursements Are Processed

The following figure illustrates the flow of the disbursement process.

This figure illustrates the flow of the disbursement
process.

The following figure illustrates the flow of the payment approval process within the disbursement process.

This figure illustrates the flow of the payment
approval process within the disbursement process.

The following table describes the action steps performed by the disbursement process, which starts in Payables and ends in Payments.

Action Description

Create documents

Source product creates documents payable, such as invoices.

Select documents

Source product selects documents. Selected documents are grouped into a payment process request.

Submit payment process request

Payment process request is submitted to Payments for processing.

Assign bank account and payment process profile

Disbursement bank accounts, which are your company's bank accounts, and payment process profiles are assigned to documents payable within the payment process request. Payments automatically assigns these values when possible. When not possible, the application asks you to supply the values on the Assign Payment Process Attributes page.

Validate documents

Payments executes any document level validations set up on the payment method or format. Documents payable that fail validation can be automatically removed and returned to the source product. Valid documents payable continue in the disbursement process, or the payment process request can be stopped for resolution, depending on options set during the submission of the payment process request.

Create and validate payments

Payments groups like documents payable into payments, according to rules set up in the payment process profile. It then executes any payment level validations set up on the payment method or format. Payments that fail validation can be automatically removed and the documents payable returned to the source product. Valid payments continue in the disbursement process, or the payment process request can be stopped for resolution, depending on options set during the submission of the payment process request.

Review and modify payment process request

When the payment process request is submitted, it can be set to stop for review as soon as all payments pass validation. During the review, you can optionally remove payments from the payment process request or documents payable from payments. If you make any changes during the review, validations are executed again.

Approve or reject payment process request

When payment approval is enabled, the payment process stops at the Review Proposed Payments stage, and approvers can optionally remove payments directly from a payment process request and then approve it. The approval process generates and routes payment approval notifications to approvers. Approvers can approve or reject payment process requests directly from e-mails or from the Review Proposed Payments page.

Create payment file

Payments processes payments within each payment process request and groups them according to their disbursement bank accounts, payment process profiles, and other grouping rules to create payment files.

Validate payment file

Payments executes any payment file level validations set up on the format. Payment files that fail validation can be corrected by removing payments or the validation can be overridden.

Create extract and format

An extract, or XML file, is created that contains the data relevant to the payment file. Oracle BI Publisher applies a format template to the data in the extract. The result is a formatted file that contains data specified by the format.

Transmit payment file

If the payment process profile for a formatted payment file specifies electronic processing, the payment file is transmitted to the payment system. The payment system is a bank or other financial institution that processes the file and moves funds from the disbursement bank account to the payee bank account.

Print payment documents

If the payment process profile for a formatted payment file specifies printed processing, the payment file is printed onto payment documents, such as checks. If any checks print incorrectly, they can be reprinted. After checks print successfully, you can record the print status, which allows Payables to account for the payments.

Perform post-processing

After creating payments, you can optionally use reports as follows:

  • Separate Remittance Advice reports can be sent to suppliers, which lists the invoices you paid.

  • Positive Pay reports can be sent to banks to prevent fraud since unauthorized payments are not listed on the Positive Pay report.

  • Payment file registers can be created for internal use. They display details of payments that are included in a payment file. You can retain this report for your records.

A disbursement payment method is a method of payment that your company uses to pay a supplier, customer, or employee. The payment method can be electronic, such as EFT, bill payable, or wire, or printed, such as a check. You can use a payment method to pay one or multiple third-party payees.

The purpose of creating disbursement payment methods is to:

  • Define the disbursement payment methods you want to use to make payments

  • Define usage rules to limit the use of disbursement payment methods to specific business units, legal entities, and other attributes.

  • Assign validations to disbursement payment methods for running on documents payable, payments, and payment files

The level of granularity that you need for your disbursement payment methods is a factor to consider before you define them. You must decide whether to set up more or less granular disbursement payment methods. The least granular payment methods are those that are predefined in Oracle Fusion Payments, such as Check or Electronic. With this setup, you can associate each payment method with many payment process profiles and payment formats. This approach requires less knowledge from source product users, such as invoice entry clerks, but may involve more work later in the payment process.

Alternately, you can define more granular payment methods. When you do this, you can benefit from adding validations to the payment method, which are very targeted for specific transactions. An example of a very granular payment method is Italian EFT to which you might add a validation that is specific to Italy. With this kind of setup, validations are run as early as during invoice entry and thus, errors can be fixed more quickly.

Since creating very granular payment methods lead to more payment methods, it's important to also set up payment method defaulting rules. Payment method defaulting rules eliminate the burden during invoice entry of manually selecting one appropriate payment method from the many available. You can also use supplier-specific defaults, an option which is enabled on the Payment Method Default Basis section on the Manage Disbursement System Options page.

Creating a disbursement payment method in Payments is composed of the following major tasks:

  • Creating usage rules

  • Creating or assigning validations

Creating Usage Rules

Usage rules specify when a disbursement payment method is available for use by source products for documents payable. By creating usage rules, you enable or disable payment methods for each source product integrated with Oracle Fusion Payments. You can provide different usage rules for different source products and change whether and when the payment method is available.

In the Usage Rules tab on the Create Payment Method page, you decide whether to assign the payment method to one of the following:

  • All payees

  • Specific business units, legal entities, and payment process transaction types for Oracle Fusion Payables

  • Specific business units, legal entities, and payment process transaction types for Oracle Fusion Receivables

  • Specific payment process transaction types for Oracle Fusion Cash Management

Creating or Assigning Validations

In the Validations tab on the Create Payment Method page, you can assign predefined validations to this payment method or create user-defined validations. Validations are rules that check the validity of documents payable, payments, or payment files.

Usage rules specify when a payment method or a payment process profile can be used on a document payable.

You can specify:

  • Usage rules for payment methods

  • Usage rules for payment process profiles

Usage Rules for Payment Methods

A payment method is the medium by which the first-party payer, or deploying company, pays a supplier invoice, customer refund, or employee expense report.

By default, payment methods are available on all transactions. By creating usage rules, you can limit the use of a payment method based on the following transaction conditions:

  • Source product

  • Business unit

  • First-Party legal entity

  • Transaction type

  • Whether domestic or foreign currency or payee location

Not all source products that are integrated with Oracle Fusion Payments have usage rule options. Some products, such as Oracle Fusion Fixed Assets, create transactions that are imported into Oracle Fusion Payables, and are included in Payables usage rules. Other products, such as Oracle Fusion Expenses, have fixed usage rules on supported payment methods.

The payment method that the source product user sees depends on the usage rules specified on the Create Payment Method page, Usage Rules tab. For example, suppose you have a payment method that is specific to one country. You could create a usage rule so that the payment method is available for only the one business unit associated with that country. A user entering an invoice for any other business unit wouldn't see that payment method available to select. Usage rules, combined with payment method defaulting rules and user-definable validations, make straight-though processing possible.

Usage Rules for Payment Process Profiles

A payment process profile specifies the details of the disbursement payment process, such as specifications for document payable grouping, payment grouping, and payment file formatting.

By default, payment process profiles are available on all transactions. By creating usage rules, you can limit the use of a payment process profile based on the following transaction conditions:

  • Payment method

  • Business unit

  • Disbursement bank account

  • Currency

The profile that is applied to a document payable depends on the usage rules specified on the Create Payment Process Profile page, Usage Rules tab. When you submit a payment process request, Payments compares the attributes of each transaction to the profile provided on the Submit Payment Process Request page. Any transaction fails validation whose attributes are in conflict with the profile's usage rules. If no profile is selected, Payments compares each transaction's attributes to all existing profiles to find one with usage rules that match the transaction attributes. If a match doesn't occur, user intervention is required to determine the appropriate payment process profile to use.

To enable straight-through processing, it's important that usage rules are no broader than necessary. For example, having two profiles in which both sets of usage rules could apply to the same document payable leads to user intervention. However, if one profile is specific to business unit X and the other to business unit Y, then there is no ambiguity. The application can uniquely identify which payment process profile to apply to the document payable without user intervention.

A payment method defaulting rule determines which payment method automatically populates an invoice or customer refund. During setup of payment method defaulting rules, you specify conditions under which a payment method acts as a default.

Payment method defaulting can be based on:

  • Source product

  • Business unit

  • First-party legal entity

  • Transaction type

  • Domestic or foreign currency or payee location

Oracle Fusion Payments applies the payment method defaulting rules in the prioritized order you specify. For example, if the first rule is a match, Payments stops and automatically populates that rule's corresponding payment method onto the invoice. Suppose you specify that the payment method for all documents processed by Oracle Fusion Payables is first, Check, and second, EFT. In this case, if the conditions for payment method Check match those on the invoice, then payment method Check automatically populates the invoice.

If the conditions for payment method Check don't match those on the invoice, Payments determines whether the conditions for payment method EFT matches. If the conditions for payment method EFT match those on the invoice, then payment method EFT automatically populates the invoice.

The following factors may, depending on setup and data, influence payment method defaulting:

  • Whether the option Based Only on Payment Method Defaulting Rules Setup or Override Defaulting Rules when Default Method Set for Payee is selected as the payment method default basis on the Manage Disbursement System Options page

  • Prioritized order of the payment method defaulting rules

  • Content of the payment method defaulting rules

  • Default payment method set at supplier site, address, or supplier level

A payment process profile is a setup entity that controls payment processing. The payment method and other invoice attributes drive the assignment of a payment process profile to each document payable. Assigning a payment process profile to each documents payable tells Oracle Fusion Payments how to handle invoices, promissory notes, payments, and payment files during each step of the payment process.

A payment process profile controls payment processing for the disbursement flow. It provides the blueprint to:

  • Link setups

  • Control usage

  • Specify payment formatting, printing, and transmission behavior

  • Control creation of payments and payment files

  • Automate report generation

To set up a payment process profile, in the Setup and Maintenance work area, go to the following:

  • Offering: Financials

  • Functional Area: Payments

  • Task: Manage Payment Process Profiles

Then, on the Manage Payment Process Profiles page, click Create. The Create Payment Process Profile page appears.

Link Setups

Before you can set up a payment process profile, you must set up the following:

  • Payment formats

  • Payment system and its payment system account

  • Transmission configuration

Control Usage

You can set up a payment process profile to be used only with specific variables that appear on the Usage Rules tab:

  • Payment method

  • Disbursement bank account

  • Business unit

  • Currency

For example, if the payment format associated with the payment process profile only allows a specific currency, then you can specify that currency in the usage rules. The payment process profile is then only used on documents payable of the applicable currency.

Specify Payment Formatting, Printing, and Transmission Behavior

In the header of the Create Payment Process Profile page, you can specify the following attributes:

  • Whether the payment process profile can be used for electronic or printed payment processing

  • Payment file format to be used with the payment process profile

  • Payment confirmation point

If the payment process profile is used for electronic payments, you select a payment system and enter details for the payment system account. This action allows Payments to electronically transmit files to the payment system.

If the payment process profile is used for printed payments, a payment system isn't required, but you can optionally select a payment system and transmission details so that Payments can electronically transmit positive pay files to your bank.

Control Creation of Payments and Payment Files

On the Payment and Payment File tabs of the Create Payment Process Profile page, you can control the creation of payments and payment files by:

  • Grouping invoices into payments

  • Grouping payments into payment files

On the Payment tab, an enabled grouping rule for an attribute means that two documents payable that share the same value for an attribute are grouped into the same payment. If values are different, the documents payable are in separate payments. A disabled grouping rule for an attribute means that the attribute won't apply when documents payable are built into payments.

On the Payment File tab, you specify payment grouping rules that determine which attributes are considered when grouping payments into payment files.

Additionally, you can specify the following.

  • Batch booking: One debit entry is posted for a group, rather than for each credit transaction

  • Overrides: If you select an override option, the payment file contains the service level and delivery channel combination you select, rather than those specified in supplier setup. If you don't select any override options, the payment file can contain multiple combinations.

  • Payment limits: Limit for the number of payments in a payment file

  • Payment sorting: Payments within a payment file are ordered as specified, which also determines the ordering of payments in the payment file register

  • Bank instructions: Text that you want to include in all payment files created using this payment process profile

  • Periodic sequences in format: Sequential numbering of payment files according to a payment system or bank's requirements.

Automate Report Generation

On the Reporting tab, you can specify whether you want the following reports to be automatically generated:

  • Payment file register

  • Positive pay

  • Separate remittance advice

Setting Up Payment Approval: Explained

Payment approval allows management to control payments by prioritizing available funds. You can send payments to approvers for review before final payments are made to suppliers or employees. If enabled, the payment process stops at the Review Proposed Payments stage. Approvers can then optionally remove payments directly from a payment process request and approve it. Payment approval supports payments created only by the payment process request process and not those created on the Create Payments page.

The approval process generates and routes payment approval notifications to approvers. Approvers can approve or reject payment process requests directly from e-mails. They can also perform other approval actions from payment approval worklist notifications.

Setting up payment approval includes the following actions.

  • Enabling payment approval

  • Defining payment approval policy

  • Configuring payment approval rules

Enabling Payment Approval

On the Manage Disbursement System Options page, select the Enable payment approval option.

To enable payment approval, in the Setup and Maintenance work area, use the following:

  • Offering: Financials

  • Functional Area: Payments

  • Task: Manage Disbursement System Options

Defining a Payment Approval Policy

Before you can configure payment approval rules, your company must define a payment approval policy. The payment approval policy defines:

  • When to initiate the payment approval process

  • Criteria for triggering the payment approval process, such as payment amount, bank account, or pay group

  • A list of approvers who review payments and make final payment decisions

Your company's payment approval policy:

  • Determines which payments must go through the payment approval process

  • Allows approvers to review payments and decide whether or not to approve the payment.

Configuring Payment Approval Rules

To configure payment approval rules, navigate to the BPM Worklist. In the Setup and Maintenance work area, use the following:

  • Offering: Financials

  • Task: Manage Task Configurations for Financials

Complete these steps:

  1. Click the Task Configuration button.

  2. In the Tasks to be configured pane, click the PaymentApproval (11.1.12.0.0) task.

  3. Click the Assignees tab.

  4. Click the Switch to Vertical Layout link.

  5. Click the diamond icon in the Payment Approval box.

  6. Click Go to rule.

  7. Click the Edit task icon to create the payment approval rules.

Note: Payment approval rules are configured to route payment approval notifications to approvers in sequential order only.

Granting Payment Function Access is an optional Oracle Fusion Payments setup task in Setup and Maintenance. To disburse payments, the Oracle Fusion Payables administrator grants you access to the predefined duty role called Disbursement Process Management Duty. You perform the Granting Payment Function Access set up task only to restrict the Disbursement Process Management Duty role.

With access to the Disbursement Process Management Duty, you can make the following types of payments:

  • Customer refunds

  • Supplier payments

  • Reimbursement of employee expense reports

When you're granted access to the Disbursement Process Management Duty, you can perform the following actions in Authorization Policy Manager:

  • View the Disbursement Process Management Duty.

  • View children duty roles of the Disbursement Process Management Duty.

  • Restrict or expand the Disbursement Process Management Duty.

  • Assign the Disbursement Process Management Duty to job roles.

To restrict the Disbursement Process Management Duty role for an employee, you must first perform the following high-level prerequisite steps in Oracle Identify Manager. Then perform the steps listed in this topic in APM:

  1. Create a new user.

  2. Assign existing job roles to the new user.

  3. Create a new job role.

  4. Assign new job roles to the new user.

After you perform the steps listed in this topic in APM, then complete the steps by assigning the role of fscm to the Disbursement Process Management Duty role in APM.

Note: Oracle Fusion Applications and APM use different terms to describe the same security elements.

The following table lists two equivalent security terms.

Oracle Fusion Applications Security Reference Manuals Authorization Policy Manager

Job role

External role

Duty role

Application role

View the Disbursement Process Management Duty

To view the Disbursement Process Management Duty, perform the following steps in APM:

  1. Sign in to your home page.

  2. In the address bar of your browser, delete all characters after the domain name and append the URL with /apm.

  3. Select the Authorization Management tab.

  4. In the Search section, select Application Roles from the For choice list.

  5. In the Search section, select fscm from the In choice list.

  6. In the blank search field, enter Disbursement Process Management Duty and click the arrow icon.

  7. In the Search Results section, the following duty roles display:

    • Disbursement Process Management Duty for Employee PII

    • Disbursement Process Management Duty

  8. In the Search Results section, select Disbursement Process Management Duty.

  9. Click the Actions list and select Open.

  10. The Disbursement Process Management Duty displays in the General tab, along with its role name and description as follows:

    • Display Name = Disbursement Process Management Duty

    • Role Name = IBY_DISBURSEMENT_PROCESS_MANAGEMENT_DUTY

    • Description = Assigns payment process attributes to documents payable, resolves document and payment validation errors, and reviews proposed payments. Views items that were rejected or removed from a payment process request.

View Children Duty Roles of the Disbursement Process Management Duty

The Disbursement Process Management Duty contains children duty roles. If you have access to the Disbursement Process Management Duty, you can also perform the duties of each of its children.

To view the children duty roles of the Disbursement Process Management Duty, perform the following steps in APM:

  1. Select the Application Role Hierarchy tab.

  2. Click the Inherits link. The following children duty roles display:

    • Party Information Inquiry Duty (FSCM)

    • Disbursement for Customer Refund Data Management Duty: Allows customer refunds

    • Disbursement for Employee Expense Data Management Duty: Allows employee expense report payments

    • Disbursement for Payables Data Management Duty: Allows supplier payments

To view the parent duty roles that inherit the Disbursement Process Management Duty, click the Is Inherited By link.

Note: The Disbursement Process Management Duty role doesn't have a parent duty role.

Restrict or Expand the Disbursement Process Management Duty

Given your company's security needs, you can restrict or expand the Disbursement Process Management Duty by performing the following steps:

  1. Remove child duty roles from or add child duty roles to the predefined Disbursement Process Management Duty.

  2. Remove privileges from or add privileges to the predefined Disbursement Process Management Duty.

  3. Create a new Disbursement Process Management Duty role. The new Duty role can have more or less child duty roles or privileges as compared with the predefined Disbursement Process Management Duty.

Assign the Disbursement Process Management Duty to Job Roles

A job role consists of multiple duty roles. Duty roles determine access to functions appropriate to the job role. For example, the job roles of Accounts Payables Manager and Accounts Payable Supervisor inherit the Disbursement Process Management Duty. You can add job roles to or remove job roles from the Disbursement Process Management Duty.

To view the predefined job roles that are assigned to the Disbursement Process Management Duty, select the External Role Mapping tab in APM.

The Disbursement Process Management Duty is assigned to the following predefined job roles:

  • Accounts Payable Supervisor

  • Accounts Payable Manager

Any user who is assigned the preceding job roles has access to the following payment functions that are associated with the Disbursement Process Management Duty:

  • Customer refunds

  • Supplier payments

  • Reimbursement of employee expense reports

Each format in Oracle Fusion Payments corresponds to one Business Intelligence Publisher Enterprise (BI Publisher Enterprise) template. Payments uses BI Publisher Enterprise templates to format funds capture and funds disbursement transactions according to the formatting requirements of financial institutions and payment systems. Each template contains prescribed formatting attributes, such as data location. Banks, payment systems, and countries have specific electronic formatting requirements for payment files and settlement batches.

You can use existing BI Publisher Enterprise templates or modify them with minimal effort by using a standard text editor, such as Microsoft Word. For example, when a payment system requires a change to its payment file format, you can quickly make the change by modifying the appropriate template.

Whether you modify an existing template or create a new one, determines whether you also create a new format and a new payment process profile. Each payment process profile is associated with a format. The following table lists two template scenarios and indicates the resulting action you take.

Actions Scenario 1 Scenario 2

Create a new template or modify an existing template.

Create a new template.

Modify an existing template.

Name the template.

Rename the template.

Keep the same name.

Where to save the new or modified template.

Payments folder by the Custom folder or Payments folder by the Financials folder.

Payments folder by the Custom folder.

Create a new format.

Yes

No

Create a new payment process profile.

Yes

No

To modify a template, you can:

  • Download a copy of the applicable template.

  • Upload a copy of the modified template.

Download a Copy of the Applicable Template

To download a copy of a predefined template, perform the following steps:

  1. Sign in to Oracle BI Publisher Enterprise.

  2. On the Home tab, click the Catalog Folders link. The Catalog tab appears with a hierarchy of folders.

  3. Expand the Financials folder.

  4. Expand the Payments folder.

  5. Locate the predefined template type that you want to modify and click the More link.

  6. From the menu, select Customize. All the templates that are associated with the predefined template type that you want to modify are copied to a folder by the Custom folder.

  7. You can now download the files from the Custom folder and modify them or you can continue with step 8.

    Note: Do not modify predefined templates. When you apply a new patch or a new release, it overrides any changes you made to the predefined template. You can, however, copy a predefined template and then modify it.
  8. On the Data Model tab, to copy a predefined template and save it to your local drive as a RTF file, click the Edit link of the applicable template. Then click the Save button.

  9. Navigate to the location where you want to save the copy of the template and click the Save button.

  10. Navigate to the saved RTF file and open it.

Upload a Copy of the Modified Template

To upload a copy of a modified template, perform the following steps:

  1. Using a text editor, modify the RTF file on your local drive.

  2. Save as Other Formats, change the file name, click the Save button, and close the file.

  3. To upload a copy of your modified template to Oracle BI Publisher Enterprise, navigate to the applicable tab, and click the Add New Layout link.

  4. Click the Upload icon. The Upload Template File dialog box appears.

  5. In the Layout Name field, enter a name for the template you modified.

  6. In the Template File field, browse to the location of the modified template on your local drive and click the Open button.

  7. From the Type choice list, select RTF Template.

  8. From the Locale choice list, select the language for the modified template.

  9. Click the Upload button. The modified template appears on the Data Model tab of the applicable tab.

    Note: The modified template is also copied to the Payments folder that is within the Custom folder.
  10. To open the modified template, click the Edit link.

  11. To confirm that the modified template is saved, click the Catalog link. The Catalog tab appears with a hierarchy of folders.

  12. Navigate as follows: Custom folder > Financials folder > Payments folder.

  13. Select the Payments folder.

  14. For the applicable template, click the Edit link. Your modified template appears.

This example demonstrates how to set up two user-defined validations. You must set up two validations when you want your user-defined validations to:

  • Compare values

  • Ensure that a value always appears in the field you want to validate

The first condition ensures that the validation checks a value, which meets your specified condition and value. The second condition ensures that the field the validation checks is not empty.

Note: You aren't required to set up two user-defined validations. A scenario can exist where you only want to create a user-defined validation that ensures that the field the validation checks is not empty.

The following table summarizes key decisions to consider before setting up a user-defined validation.

Decisions to Consider In This Example

Do you want to compare a value that the user enters against a specified condition and value?

You want to validate that the Document pay group field is equal to the string Domestic when generating an invoice.

Do you want to ensure that the validated field is not empty?

You want to validate that the Document pay group field is not empty when generating an invoice.

User-Defined Validation That Checks a Specific Condition and Value

  1. In the Setup and Maintenance work area, go to the following:

    • Offering: Financials

    • Functional Area: Payments

    • Task: Manage Payment Methods

    Then, on the Manage Payment Methods page, click the Create icon.

  2. On the Create Payment Method page in the User-Defined Validations section, complete the fields as shown in this table for Validation 1.

    If you save the invoice without entering any value in the Document pay group field, Validation 1 alone, won't keep the invoice on hold.

    Field Value

    Field

    Document pay group

    Condition

    Equal to String

    Value

    Domestic

User-Defined Validation That Checks for an Empty Field

  1. On the Create Payment Method page in the User-Defined Validations section, complete the fields as shown in this table for Validation 2.

    To include the scenario in the validation where no value is entered in the Document pay group field, you must set up a second validation. If you save the invoice without entering any value in the Document pay group field, the application then keeps the invoice on hold.

    Field Value

    Field

    Document pay group

    Condition

    Required

    Value

    Not applicable

FAQs for Disbursements

Oracle Fusion Payments enables you to specify payment codes that are required by financial institutions. Payment codes can provide details to banks or payments systems about transaction handling, bank charges, or payment reasons for regulatory reporting purposes.

Payment code types include:

  • Bank instruction codes

  • Delivery channel codes

  • Payment reason codes

Bank instruction codes are values that contain instructions that must be passed to a bank or financial institution at the payment file level. Up to two bank instructions can be entered on a payment process profile. When that payment process profile is used during the creation of a payment file, the bank instruction values are copied directly to it. The values are made available to the formatting process by the extract. If the payment format specifies the use of bank instructions, the values are passed to the bank in the header level of the payment file.

Oracle Fusion Payments provides many predefined bank instruction codes.

Delivery channels are instructions that tell the bank how to make the payment to the payee. A default delivery channel value can be set on the supplier, supplier address, or supplier site. A value automatically populates from the lowest of these levels to the invoice in Oracle Fusion Payables. On the invoice, it's displayed with the installments and can be manually overridden there.

When an installment is paid, the delivery channel is copied from the document payable to the payment when payment documents have the same delivery channel. If you select delivery channel as a grouping rule on the profile, all documents that share the same delivery channel are grouped into a payment.

Oracle Fusion Payments provides many predefined delivery channel codes.

Payment reason codes are generally country-specific identifiers provided by a country's government or central bank. These codes provide the payment system or bank with additional details about the reason for the payment for regulatory reporting purposes. The purpose of entering payment reason codes required by a country's payment system or central bank is to specify the reason for the payment.

Oracle Fusion Payments provides many predefined payment reason codes.

When do I need to add a second condition to a user-defined validation that runs against a payment file format or a payment method?

If you want your field validation to raise an error when the field is empty, you must select Required from the Condition choice list. Then, if applicable, create a second validation for the same field and select any other condition.