About Payables Invoices for Nonoperated Joint Venture Costs
This chapter only applies if you're 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 processes to create accounting entries in Oracle Payables and post the invoices in 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.
Criteria for Creating Invoices
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Cost distributions that are associated with operating expenses, capital expenditures, overhead fees and other charges. In the Joint Venture Distributions work area, the cost distributions are recorded using the following account types: Expense, Assets, Overhead, and “Fees and other charges.”
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Distributions in Available to Process status. Note that distributions marked as Distribution Only automatically have a status of Process Complete and aren't available for invoicing.
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Distributions for the operator stakeholder with a stakeholder preference of Create Invoices.
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The distribution amount is equal to or greater than the minimum amount required to create an invoice.
Minimum invoice amounts are specified in the joint venture definition. For example, you could set a minimum of $300 for payables invoice amounts. The process will create invoices only when the distribution amount reaches $300.
Accounting for Payables Invoices
For payables invoices, the process credits the amount in a default Payables liability account or the account specified in the joint venture definition. If you've set up an account override through subledger accounting rules, the posting process will use the liability account override when posting the invoice.
For the offset accounting entry, the process writes the amount to what is referred to as “partner account” in Joint Venture Management. This account is set up using subledger accounting rules and is written in the Item Expense accounting class for payables invoices.
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 pay the remaining amount to the operator through payables invoices using the Create Joint Venture Invoices and Journal Entries process. The invoice captures the consolidated partner contribution amount and the invoice amount in separate invoice lines.
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 posting process will use the account on the subledger accounting rules for the partner contribution invoice line.
Joint Venture Details in Payables Invoices
Payables invoices include the following joint venture information:
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The business unit, supplier information, currency, and distribution amount associated with each distribution.
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If the invoice line description isn't available in the original transaction, then a description for each invoice line is provided by Joint Venture Management. The line description includes the joint venture name and “AP Invoice” or it might include “Partner Contribution” depending on whether you’ve paid for costs using partner contributions.
Distribution Statuses Associated with Invoicing
In the Joint Venture Distributions work area, the status of the distribution indicates the stage and the result of the invoicing process.
| Status | Description |
|---|---|
| Invoicing in Progress | Indicates that the invoicing process has started but isn't complete. |
| Accounting in Progress | Indicates that the distribution has been invoiced but the “Create Accounting” and “Update Accounting for Invoices” processes haven’t completed. |
| Process Complete | Indicates that the distribution has been invoiced and fully accounted. |
| 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.
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Mark the distribution as “Distribution Only” if after analysis, you determine that the distribution shouldn’t have been included in the invoicing process.
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Delete the distribution so you can redistribute the transaction and invoice its distributions again. When you delete a distribution in “Error” status, Joint Venture Management deletes all distributions in “Error”, “Available to Process”, or “On Hold” status that originate from the same transaction. The transaction status automatically changes to “Available to Process” in the Joint Venture Transactions work area.