How Payments Are Escheated
When checks issued for payments to suppliers, or to employees for expense payments, haven’t been presented for clearing during a specific time period, you should escheat them and transfer the amount to the appropriate local authority.
Oracle Payables lets you identify and escheat unclaimed checks and transfer their value to the appropriate escheatment authority. You can also generate a report with a list of payments that are escheated or initiated for escheatment.
- Cross-business unit payments
- Manual payments
- Refunds
- Prepayments
- Netting payments
How You Escheat a Payment
Identify payments that have gone stale and escheat them. Here’s how you do it.
- Go to .
- In the Tasks panel tab, click Manage Payments.
- Use the Payment Date criteria to identify checks that
haven’t been cleared for more than or equal to the minimum number of days
defined in the payment options. Note: You can only escheat payments that are in ledger currency with the status as Negotiable.
- Select the payments and then click Initiate Escheat in
the Actions menu. Note: You can initiate escheatment for one payment at a time or multiple payments simultaneously.
- Send stop payment instructions to the corresponding banks for all payments in the Escheatment Initiated status.
- After performing due diligence on all stale dated payments, go to the Manage Payments page and search for the payments with status as Escheatment Initiated.
- Select the payments and then click .
How You Transfer Funds to Escheatment Authority
After escheatment is completed, the payment status changes to Escheated. As a next step, run an accounting process for the escheated payments to transfer the amount from Cash or Cash clearing account, to an Unclaimed Fund account.
Next, create a Payables invoice for transferring the payment to the escheatment authority.
Accounting entries for the payments and escheated payments differ, based on the offset segments and when to account payment options.
This is how accounting is done when Offset Segments option is set to None and Account for Payment option is set to Payment Issue and Clearing.
Event | Debited to | Credited to |
---|---|---|
When payment is accounted | Supplier Liability Account | Cash/Cash Clearing Account |
When payment is escheated | Cash/Cash Clearing Account | Unclaimed Fund Account |
Create invoice manually on Escheatment Authority | Unclaimed Fund Account | Escheatment Authority Liability Account |