About Payables Invoices for Nonoperated Joint Venture Costs
The chapter only applies if you are a partner in a joint venture that you don’t operate.
As a nonoperator partner in a joint venture, you receive receivables invoices from the managing partner (operator) for your portion of the costs. You can use Oracle Joint Venture Management to set up the joint venture as nonoperated, designate yourself as a nonoperator stakeholder, and re-create your portion of the costs using an ownership definition that reflects your share in the joint venture. You can then create payables invoices or internal transfer journals to pay the managing partner for your share of the costs.
You must run these initial Joint Venture Management processes before you can run the process to create payables invoices:
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Identify Joint Venture Transactions - default mode
This mode identifies transactions for joint ventures.
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Create Joint Venture Distributions - default mode
This mode creates distributions for your share of the costs from the joint venture transactions.
After creating your distributions, you then run the following modes of the “Create Joint Venture Invoices and Journal Entries” process to create payables invoices for the distributions:
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Create Invoices for Joint Venture Distributions
This mode creates payables invoices for your cost distributions.
Note: After the invoices are created, an accounts payable manager must complete the standard process of posting the invoices to Oracle General Ledger. -
Update Accounting for Invoices
This mode stores information to retrieve the partner account and the liability account from the posted invoices back to the joint venture.
The process creates payables invoices for only the cost distributions that meet the following criteria:
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The distributions are at the "Available to Process" status in the Joint Venture Distributions work area.
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The distributions are created from transactions that are recorded in account type Assets and Expense, or are created from overhead and other transactions generated from Joint Venture Management.
These are recorded as distribution types E (Expense), A (Assets), H (Overhead), and F (Fees and other charges) in the Joint Venture Distributions work area.
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The distributions for the operator stakeholder that was set up with the invoicing preference “Create Invoices.”
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The distribution amount is equal to or greater than the minimum amount required to create an invoice, if a minimum payables amount is specified in the joint venture definition.
For example, if $500 is specified as the minimum amount, the process will create invoices only when the distributed cost reaches $500.
Invoice Liability Account
The process creates the liability accounting entry for each invoice using a default liability account. If you’ve set up a liability account override on the joint venture definition or through subledger accounting rules, the posting process will use the liability account override when posting the invoice. If you have set up the account override in both places, the account specified in the subledger accounting rules will be used for the joint venture payables invoice.
Partner Contribution Invoice Lines
If you’ve paid partner contributions to fund the upfront costs of the joint venture, you can use the partner contribution application to create the partner contribution you paid to the operator and perform the draw process to account for the amount drawn. If the partner contribution only covers your cost distributions partially, you must create a payables invoice to pay the remaining amount to the operator. The invoice captures the partner contribution amount and the net invoice amount, which is the amount to be paid.
The process creates the partner contribution invoice line using the partner contribution account that you’ve specified when you created the partner contribution or the account that you derived using subledger accounting rules. If you’ve set up the account in both, the process will use the account on the subledger accounting rule instead.
Joint Venture Information in Payables Invoices
The payables invoice includes the following joint venture information:
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The joint venture name, business unit, account type, and distribution ID associated with each distribution.
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If the line description isn't available in the original transaction, the invoice lines associated with the transaction use the description sent by Joint Venture Management, which is in the format "<joint venture name> – AP Invoice." The line description for partner contribution invoice lines is in the format "<joint venture name> – Partner Contribution."
Distribution Statuses Associated with Invoicing
In the Joint Venture Distributions work area, you can check the status of distributions to determine where they are in the invoicing process.
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Invoicing in progress. Indicates that the invoicing process has started but is not complete
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Process complete. Indicates that an invoice is created for the distribution
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Error. Indicates that the distribution wasn't invoiced due to an error
Manage Distributions in Error
The process generates logs that you can use to review the details of any errors and take corrective action. After you correct the error, you can make the distribution available for processing in the next scheduled run of the process.
Or after you review the error, you might need to take one of the following actions:
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Change the distribution status from “Error” to “On hold” if the error can’t be resolved sooner, for example, the distribution is pending analysis and approval.
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Mark the distribution as “Distribution Only” if after analysis, you found that the distribution must not be included in the invoicing process.
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Delete the distribution so you can redistribute the transaction and invoice again. When you delete a distribution at “Error” status, the application deletes all distributions at status “Error”, “Available to process”, or “On hold” that originate from the same transaction. The transaction status automatically changes to “Available to process” in the Joint Venture Transactions work area.