1. Using Financials for the Americas
  2. How You Pay Enhancements for Brazil

How You Pay Enhancements for Brazil

Use Oracle Fusion Cloud Financials to manage your Payables transactions and comply with the local Brazilian business practices and government regulations.

You can manage the collection documents received from the supplier and associate it with an invoice or payment schedule in order to pay invoices or installments. If any invoices are paid late, interest is calculated and added to the invoice amount according to the agreed terms between the seller and buyer and in compliance with the locally legislated business calendar.

You can:

  • Enter a collection document manually or import an electronic collection document and associate it with one or more invoices or installments.

  • Place holds on invoices or installments that are not associated with any collection document and automatically release holds after assignment.

  • Calculate and pay interest for late payments based on predefined rules from suppliers. The interest is calculated based on rules that govern penalties, grace periods, and interest calculation methods. Use local business calendars to determine the number of days for interest calculation.

  • Process payments by banks using electronic files. Use the Manual Bank Return and Import Bank Return processes to identify and process rejected payments, corrections, and maintain invoice associations.

Use these features to record a manual collection document or import an electronic collection document, and associate it with one or more installments:

  • Create a Payables invoice.

  • Associate collection documents with invoices.

  • Calculate interest and pay through Payment Process Request.

  • Manual Bank Return and Import Bank Return

Create Payables Invoice

Create a Payables invoice based on the information received from supplier. When creating an invoice, update the global descriptive flexfields. To update the global descriptive flexfields, click the Additional Information tab. You will have to select the Invoices for Brazil option for the Regional Information field. Select Yes for the Enable Collection Document Processing field.

After an invoice is created, an installment is generated for the invoice with due dates and payment amounts. It also includes the information updated in the global descriptive flexfields for the collection document.

When an invoice is validated, the installment is placed on hold until it is associated with a collection document.

For interest calculation, update the relevant information for payment schedules. To update the relevant information, click the Manage Installments from Invoice Actions list and then click the Details button. Select Payment Installment Information for Brazil from the Regional Information list. Provide the interest calculation details and save it.

Associate Collection Documents with Invoices or Installments

Once the collection document is entered into the application either manually or imported, the next step is to associate it with the installments. The collection document includes information such as barcode number, supplier name, supplier site, gross amount, due date, the details of bank where payment is to be made, document details, discount details, and so on. This association can be automatic or manual.

There are predefined setups and tolerance limits for automatic association, based on these setups and tolerances automatic association is done by the application. If the application cannot perform automatic association, then manual association is to be done by the user at a later stage. You can dissociate an installment from a collection document, if you think the current installment can't go with the current collection document.

Once the association of the installment is complete, the hold applied on the invoice is removed automatically.

Calculate Interest and Make Payments

When invoices are paid after the due date, interest and penalties are charged on the invoices according to the agreed terms between the buyer and the seller. The interest can be simple interest or compound interest and penalty can be amount or percentage. You can define some grace days based on the type of interest that is charged.

Define a business day calendar and local holidays for the city based on which the due date is determined. Interest is calculated on the overdue invoices based on the due date.

Based on settings, interest can be calculated for late payments on invoices taking into consideration the number of grace days that are defined and whether the payment due date falls on a non-business day.

For the interest calculated, a new interest invoice is automatically created and the same is included in the next batch for payment.

To ensure the correct interest is collected, a local business day calendar with the correct local holidays for the city of the supplier must be defined. Interest is calculated on the overdue invoices based on the due date and taking into consideration the number of grace days that are defined and whether the payment due date falls on a non-business day.

Process Bank Returns

The bank sends an electronic fund transfer file that gives the status of the payments made against invoices for the submitted collection documents. The electronic fund transfer file provides information on whether the payment was successful or rejected.

When a payment is rejected, the reasons for rejection are recorded against each invoice. Codes and reasons for rejection are maintained in the application.

Once the EFT file is imported into the application, the application associates the rejected invoice with the relevant reason for return. This enables further action like making a payment for the same in future.