18Define Common Procurement Configuration

This chapter contains the following:

Define Basic Catalogs

Create Catalogs

Catalogs: How They Work Together

A catalog is a collection of categories that you use to classify items. You can organize the categories into a hierarchy that represents a taxonomy. You create new categories only in the context of a catalog. You can add existing categories to one or more catalogs, either from another catalog or as shared categories from a source catalog. You can control the assignment of items and categories in the catalog by controlling the catalog content. For example, you can set the value of the Catalog Content field on the Edit Catalog page to Items at all levels, which allows items to be assigned to any level within the category hierarchy, not only to the leaf levels.

This figure shows the relationships of the catalog components to each other.

Catalog Component
Catalog

A catalog is a collection of categories that are organized to define a classification of items. The top most level of a catalog is the catalog root. All categories for the first level in the category hierarchy are associated with the catalog root through the catalog category association component.

Category

A category is a component of a catalog that represents a set of items. You can associate a category to a catalog through the catalog category association. Both the shared category and the native category are associated thorough the catalog category association.

Catalog Category Association

Catalog category association represents the relationship between a catalog and a category, or a parent category and a child category. Each catalog category association represents one relationship between the catalog and a category or one relationship between a parent category and a child category.

Item Category Assignment

Item category assignment represents the assignment of the item to a category in a catalog. Each item category assignment represents the relationship between a category and an item.

Item

An item represents objects such as a product, service or template. An item is assigned through the item category assignment component.

Attachment or Image

Information is associated to the catalog or category through the attachment framework. Multiple attachments are supported but you can only associate a single attachment or attachment type image with a catalog or category for viewing in the UI.

Catalog Formatting: Explained

The format of a catalog is defined at the time the catalog is created and controls the behavior of the catalog at runtime.

When you format a catalog, the layout controls three main areas and includes the following tasks:

  • Catalog configuration

  • Date enablement

  • Category sharing

Some fields are required, and others are optional.

Catalog Configuration

You can configure the catalog, and this affects how the content behaves. The catalog configuration contains a set of attributes that define the catalog configuration. These attributes interact to define the runtime behavior of the catalog.

The configuration functions are:

  • Catalog code: A unique identifier that is used.

  • Controlled at: Controls how items are assigned to categories and has two values. The first value is master level, which enables the automatic assignment of items to all child organizations associated with the master organization, if the current context is a master organization. The second value is organization level, which assigns the item only to the organization in the current context.

  • Default category: A newly created item is automatically assigned to the default category if specific operational attribute values are entered for the new item. The automatic assignment is controlled by the functional area. Each functional area has specific rules about which operational attribute values are used to trigger the automatic assignment process. For example, an item will be assigned to the catalog assigned to the functional area called Purchasing if the Purchased specification is turned on or if the Internal Ordered Item specification is enabled.

  • Assign items to leaf level categories only: Allows items to be added only to the bottom level categories in the hierarchy.

  • Catalog content: Controls what content can be added to the catalog and where the content can be added.

  • Allow multiple item category assignment: When this option is selected, you can assign an item to one or more categories in the catalog. The default is deselected, which means that each item can be assigned to only one category in the catalog.

  • Public Catalog: Select to mark this catalog as public. All users with access to view catalogs will have access to this catalog.

Note: The catalog behavior for functional area catalogs is defined through the combination of fields within the pages and the seeded functional area rules.
Catalog Date Enablement

The date enablement function controls when the catalog is in an active state or inactive state by using the start date and end date attributes.

Category Sharing

The category sharing function enables sharing categories from a designated source catalog.

The sharing function has these attributes:

  • Share by Reference: Catalog elements that are shared by reference are read-only in the target catalog. Multiple source catalogs can be used in this type of sharing.

  • Copy: Content from other catalogs can be added to the current catalog by creating a copy of the content. The copied content can be edited within the current catalog.

    • Include child categories: Indicate whether to copy child categories when copying categories.

    • Copy item category assignments: Indicate whether to copy items assigned to the category into the catalog.

Catalog Details: Explained

You can view and edit a catalog on the Edit Catalog page when you have the appropriate permissions.

The following parts of the Edit Catalog page provide important capabilities for managing and editing catalogs:

  • Catalog header region

  • Catalog details tab

  • Category hierarchy tab

Catalog Header Region

The header region for the Edit Catalog page contains the catalog name and description, the selection of the default category and the start and end date for the catalog.

You can change the default category for a catalog so that the category is used for the item creation process, based on the values of attributes for the item. The choice of default category also enables other Oracle Fusion applications to assign items to a category.

You can modify the start and end dates for a category as you update a catalog in order to control when the category is used .

You can revise or reclassify the category to reflect shifting relationships within the category hierarchy.

Catalog Details Tab

The Details tab contains:

  • The configuration attributes for the catalog, which control the runtime behavior for the catalog.

  • The sharing attributes for the catalog, which control the source catalog that will be used for sharing from and what content can be shared.

  • The additional information for the catalog, which contains the descriptive flexfields that support the catalog metadata.

Category Hierarchy Tab

The Category Hierarchy tab contains the category hierarchy region, in which the category hierarchy can be created and maintained. In addition, items can be assigned, the usage of the category in other catalogs can be viewed, and the attributes for the category and catalog category association can be edited.

Automatic Assignment Catalogs: Explained

The automatic assignment catalog feature is a simple way to create a non-hierarchical catalog because you do not have to add categories manually to the catalog. This feature adds the categories at the root level, so it works with both flat and hierarchical catalogs.

All categories that have the same category structure value as the catalog are automatically assigned and associated to the catalog when you create a catalog category association for each category.

Automatic Assignments

The automatic assignment feature is enabled during catalog creation when you select the Enable automatic assignment of category check box. The categories displayed for auto assignment catalogs are refreshed only at start up and after you save.

Note that if you create a category in another catalog with the same structure value as the automatic assignment catalog, the category is also added to your catalog. The categories displayed for auto assignment catalogs are refreshed only at start up and after you save.

When you open a new catalog, any categories that have the same category structure value as the catalog structure value for the catalog are automatically assigned to the catalog.

For example, Purchasing may maintain a master catalog containing all categories that represent commodities. Each commodity team can create categories for their commodity in their own catalog.

The master catalog for purchasing is named Purchasing and is configured during creation to support the automatic assignment of categories. Because you enabled automatic assignments for the Purchasing catalog, any categories created by the commodity teams are added to the catalog automatically. The purchasing managers can view the collection of all commodities represented as categories in the Purchasing catalog.

Manage Catalogs

Catalog Edits: Explained

The Edit Catalog dialog is a shared page that has two modes, view and update. The view mode displays the selected catalog in a read-only file. The update mode displays the selected catalog in an editable file. You must have edit catalog privileges to access the catalog in update mode. You can edit only an active or future-dated catalog.

The following fields are editable in the catalog:

  • Catalog Name

  • Description

  • Start Date

  • End Date

  • Default Category

  • Allow multiple item category assignment

  • Addition Information

  • Category Hierarchy

  • Category Details

  • Items assigned to category

Default Category

You can edit this field to select another category as the default category for item creation. You cannot remove the default category if the catalog is assigned to a functional area that requires a default category to be specified.

Allow Multiple Item Category Assignment

This check box is editable only until you assign an item to a category in the catalog.

Addition Information

You can edit the values of the descriptive flexfields attributes.

After you make changes, clicking the Save button saves the changes to the database but will does not close the Edit Catalog page. Clicking the Save and Close button saves the changes to the database and closes the Edit Catalog page.

Categories and Catalog Relationships: Explained

Catalogs are used to organize and classify collections of items by associating categories to the catalog. The categories are organized to form a taxonomy and items are assigned to the categories. When a category is associated with the catalog a catalog category association is created which specifies the relationship of the association. The catalog category association may also represent the relationship between two categories, for example a relationship between a parent category and a child category.

Catalog Category Association

The date enabled attribute value is important regarding catalog category association. The catalog category association is date enabled providing the control of when the catalog category association is active in the catalog and when the catalog category association is inactive. The catalog category association has two attributes to support enabling dates; the start date and the end date. The start date is value is the first day that the catalog category association is available or active for use and the end date is the last day the catalog category association can be used, after this date the catalog category association is inactive. The date enabled attribute values are also used to control the visibility of content and the behavior of the category in the catalog. If a category association is inactive or end dated, having the value of the end date attribute past the current date, then the items cannot be assigned to the category.

A catalog category association will be set to inactive state when the category referenced by the catalog category association is set to an inactive state automatically, but the display will not be refreshed automatically.

Date Enablement for Catalogs and Categories: Explained

The catalog, categories, and catalog category association use date enablement to determine if the object specified is active or inactive based on the start date and end date. The following are date enablement definitions:

  • Active An object is active when the current date is later than or equal to the value of the start date, but earlier than or equal to value of the end date.

  • Inactive An object is inactive when the current date is later than the value of the end date.

  • Future dated An object is future dated when the current date is earlier than the value of the start date.

You set the date enablement attributes are used to determine when a catalog, category, or catalog category association is used or visible.

  • On the Manage Catalog page, a table filter determines which catalogs appear. The default value for the choice list is Active, indicating that only active catalogs will be displayed. You can select the value All to view both active and inactive catalogs.

  • On the Edit Catalog page, on the category hierarchy tab, two table filters determine what categories and catalog category associations appear. The default values for the two choice lists are Active, indicating that only active categories and active catalog category associations will be displayed. You can select the value All to view both active and inactive categories and catalog categories associations.

  • Other applications also use the date enablement attributes to filter information retrieved through application programming interfaces or services for catalogs.

The following figure provides the date enablement attributes for these objects. The catalog, category, or the catalog category association has an internal state that is active or inactive.

Date enablement associations for the catalog and catalog
category

The following aspects are important regarding date enablement for catalogs and categories:

  • Start date

  • End date

  • Catalog and category objects

  • Catalog category association

  • Catalog and category rules

Start Date

The start date is defined as the first date that the object can be active. The start date can be future dated by setting the value to a date later than the current date. The start date value defaults to the system date if no date is entered during catalog or category creation.

End Date

The end date is defined as the last date that the object can be active. The object is end dated one second after the date specified by the value of End Date, that is the next day at 12:00:01 a.m. You cannot set the end date in the past. Also, you can change the end date from a condition when the object is ended to a new end date greater than or equal to the system date, causing the object to go from inactive to active. The end date value is optional during catalog or category creation.

Catalog and Category Objects

The start and end dates have been added for the catalog and catalog category association. The inactive date for categories has been renamed as the end date and the start date has been added.

Catalog Category Association

The catalog category association is used to specify the parent and child relationships between catalogs and categories and for category to category relationships. The catalog category association date enablement is independent of the category data enablement, except for the case where the category is end dated; the association is ended automatically as well. The catalog category association dates represents the state of the category for the catalog in which the category is associated.

Catalog and Category Rules

When a catalog is inactive the following rules apply:

  • All operations for the catalog are disabled; the catalog is not able to be edited.

  • The catalog cannot be used in other processes.

  • The catalog can be viewed only if you set filters on the Manage Catalog page to a value of All, enabling you to view active and inactive catalogs.

When a category is inactive the following rules apply:

  • All operations for the category are disabled; the category is not able to be edited.

  • The category cannot be added to other catalogs.

  • The category can be viewed only if you set the filters on the Edit Catalog page to a value of All, enabling you to view active and inactive catalogs.

  • The application sets the catalog category association for the inactive category to inactive.

When a catalog category association is inactive the following rules apply:

  • The category may be inactive or active; if the category is active it can be edited.

  • The catalog category associations and related category can be viewed only if you set the association filter on the Edit Catalog page to a value of All, enabling you to view active and inactive catalogs.

When a catalog is future dated the following rules apply:

  • All the operations of the catalog are enabled and the catalog is able to be edited.

  • The catalog can be used in other processes, if allowed.

  • The catalog can be viewed only if the you set the filters on the Manage Catalog page to a value of All.

Catalog Hierarchies: How They Fit Together

You use catalogs to organize and classify collections of items by associating categories with the catalog. You organize the categories to form a taxonomy and assign items to the categories. When you associate a category with the catalog, a catalog category association is created which specifies the relationship of the association. The catalog category association may also represent the relationship between two categories, for example, a relationship between a parent category and a child category.

The following figure shows the relationships of the category hierarchy components.

Category hierarchy component relationships.
Components

The components of a category hierarchy are:

  • Catalog root: The topmost node in category hierarchy that represents the object called catalog.

  • Category: The catalog component that is used to represent the classification structure.

  • Catalog category association: The line in the diagram represents the relationship between a catalog and category or between a parent category and child category.

  • Item category assignment: The dotted line in the dialog represents the relationship between a category and an item.

  • Reference category: The category, C5 in this diagram, is shared as a reference category from a source catalog.

  • Leaf level category: The lowest or bottom-level category in a category hierarchy. You can assign items to all levels in a category hierarchy if you configure the catalog to support this.

  • Browsing category: The category, C2 in this diagram, is a browsing category. Browsing categories are categories that you add to the category hierarchy for the purpose of classification and do not have items assigned to them.

The category hierarchy does not have a limit on how many levels can be represented. The category hierarchy can have multiple hierarchies within a single category hierarchy.

Category Edits: Explained

Categories can be edited only from within the Edit Catalog page, on the Category Hierarchy tab. To edit a category, expand, or search in, the tree of categories associated with the catalog, then select the row for the category in the category hierarchy table and edit the category's attributes in the category's Details panel. A category can only be edited if the category is active and its associated catalog is active or future dated. If a category is directly shared, the same category can be edited in multiple catalogs, except for the item assignments that are local to the catalog you are editing.

Category information can be edited in both the Details and Items subtabs.

Details and Items Tabs

The following fields are editable in the category:

  • Category name

  • Description

  • Attachments

  • Category start date

  • Category end date

  • Items assigned to category

After changes are made, the Save button saves your changes without closing the Edit Catalog page. The Save and Close button saves your changes and closes the Edit Catalog page.

Catalog Category Association: Explained

The catalog category association assigns the category to the catalog or parent category. This association allows you to manage when a category is assigned to a catalog, by setting the start and end dates for the association. The catalog category association can be edited only within the Edit Catalog page, in the category hierarchy tab. The catalog category association start date and end date attributes can be edited in the details region. The association cannot be deleted, only end dated.

Category Catalog Associations

You select the category in the category hierarchy table for the catalog category association that you are editing, the category details are displayed in the right-hand panel. The association start date and association end date are the only editable fields.

After you make changes, clicking the Save button saves the changes to the database but does not close the Edit Catalog page. Clicking the Save and Close button saves the changes to the database and closes the Edit Catalog page.

Category Details: Explained

You can see category details when you select the row with the category in the category hierarchy table of the Edit Catalog page. The category details are displayed in the right hand pane. You can edit the details of native categories. The category detail region contains information about the category that is associated to the catalog. It also contains the association start and end dates.

You can view and edit a catalog on the category details tab when you have rights to manage catalogs.

The following parts of the Category Hierarchy tab provide are important capabilities for managing and editing category details:

  • Details subtab

  • Items subtab

  • Attachments subtab

Details Subtab

The details tab contains information about the category that has been associated to the catalog. This information appears in all catalogs, since a category can be associated to one or more catalogs. The details tab contains the category configuration, category date enablement, association date enablement, and the additional attributes for the category.

The details tab contains attributes that define a category. Unstructured information is added through attachments. Images are added to a category and are displayed in the category details tab.

Items Subtab

The Items subtab contains item assignments are local to the catalog that the category is associated with. You can add and delete item assignments.

Attachments Subtab

The Attachments tab contains the list of attachments that the category is associated with.

Categories: Explained

You can create categories in the context of a catalog, on the Category hierarchy tab on the Edit Catalog page . When you select the Create icon in the category hierarchy table, the Create Category dialog appears.

Create Category Dialog

After you enter a name and tab out of the field, the category code will be automatically populated. You can update this value if required. Enter a meaningful description of the category. Optionally, you can add an image and an attachment to this category.

Date enablement determines if an object is active or inactive based on the start date and end date. When categories are created, the default start date value is the current date. You can move the category start date beyond the current date to a future date within the category. The end date value is optional.

Select the Restrict category to item assignment only check box to add only items to the category.

After you complete the required fields for the catalog, clicking OK creates the category in the database, adds the category to the point of selection in the category hierarchy, and closes the dialog.

Category Moves: Explained

You use the move category function in the category tree table region of the Edit Catalog page. This is a table row action. The dialog is launched when you select an active or future dated category within the catalog and select this action.

Identifying the New Parent

The dialog provides the current category parent and allows you to pick a new category parent. Only the legal category parents are displayed in the choice list.

The category list within the New Parent choice list is filtered by based on a set of rules:

  • The new parent category must be an active or future dated category; the end date value of the category must be later than the current system date.

  • The value of the category content for the new parent category must allow the selected category to be added; the legal values are items and categories and categories only.

  • A selected category associated with the catalog at a level below the categories at the root categories can be moved to the root of the catalog.

  • The new parent category catalog category association must be active; the end date value of the catalog category association must be later than the current system date.

Import Category Hierarchies: Explained

A category hierarchy can be created and maintained through a spreadsheet interface, reducing the amount of time required to create and maintain catalogs. Existing catalog content can be exported and the content used in other catalogs for catalog category hierarchies.

The following aspects are important regarding category hierarchy import used in catalogs:

  • Spreadsheet interface

  • Export category hierarchy

Note: To use this feature, you must install Oracle ADF Desktop Integration (ADFdi), which is described under data management in Oracle Applications Cloud Using Common Features.
Spreadsheet Interface

You can manage the catalog category hierarchy using the ADFdi spreadsheet interface by selecting the Edit in Spreadsheet button on the Category Hierarchy tab of the Edit Catalog page to download existing catalog content. You can then modify this content in the spreadsheet, and upload the content back into the catalog.

Within the spreadsheet, you can use user-defined controls provided by the ADFdi interface to download the existing hierarchy, define new categories, edit the catalog hierarchy, and add categories to the catalog, either as direct or reference categories. You can define the category hierarchy for a catalog in the spreadsheet, by creating or adding categories, then upload it when you create a catalog. If you have an existing hierarchy, you can cut and paste the flattened hierarchy into the spreadsheet.

Export Category Hierarchy

You export a category hierarchy when you need to share its structure, for example, with a product partner. Your partner can import the catalog file using the ADFdi spreadsheet interface.

You can export the category hierarchy from your catalogs so that it can be used by your partners. In the Product Information Management work area, partners can directly import the category hierarchy into their catalogs.

Catalog and Category Attachments: Explained

Catalogs and categories support attachments and use a common component for managing attachment content. You can add attachments on both the Create Catalog and Edit Catalog pages.

The attachment component displays a plus sign icon indicating that no attachments are available for the object. The Attachment dialog appears when you click the plus sign icon. You define the attachment by selecting the attachment type, file name or Uniform Resource Locator (URL), title, description, and by indicating whether the attachment can be shared with other objects. Once you define the attachments and click the OK button, that attachment title appears in the attachment component region of the page along with an X icon that you can click to delete the attachment.

The attachment file types are:

  • File

  • Repository File or Folder

  • Text

  • URL

File

You must provide a title for the file and create a description for the attachment. You select a file to upload from your desktop.

Repository File or Folder

You click the Browse button to attach a repository file or folder from the document repository to a catalog. The attachment repository contains existing attachments and is organized as a set of folders. The Browse button launches the Attachment Repository dialog to enable you to select an attachment. You must provide a title for the repository file or folder and create a description for the attachment.

Text

Enter the text string in the field that you want to appear as an attachment. You must provide a title for the text and create a description for the text attachment.

URL

Enter the URL address to a web page that you want to attach to the catalog. You must provide a title for the URL attachment and create a description for it.

The Share check box alerts users that you added an attachment and the date that you performed the task.

Items to Categories Assignment: Explained

You can assign items to categories on the Edit Catalog page, category hierarchy tab, on the category detail item tab. You can assign items only to active categories. In addition, you can configure catalogs to control item assignment to categories within the catalog by selecting the Allow multiple item category assignment check box on the Create Catalog page, which allows items to be added to all levels of the category hierarchy.

To begin, select the item class and enter search information in either the Item ID, Item description or Keyword fields and click the Search button. You select items from a choice list and add them to the category.

Controlling Item Assignment

You also control item assignment by selecting the value of the Controlled at box. If you select the Master Level value and the organization context is a master organization, the items are automatically assigned to all child organizations that are associated with the master organization.

Catalog Report Publishing: Explained

Other applications can use catalog data if you export the catalog content. For example, you may want to export catalog content to use as a monthly report of all items assigned to a specific catalog. You can use the default publish template provided in hyper text markup language (HTML). You can specify the content and layout of the catalog information. When the catalog is published, you select the format and initiate the creation of the content in the file.

Publish a Catalog

Search for a catalog from the Manage Catalogs page, select the row corresponding to the catalog that you want to publish and select the Publish action. The application generates the report based on the default template in HTML format. You can select a new template or format from the report window. The content displayed for items, categories, catalog categories, and catalog is based on the publish template. The seeded template is called Catalog Listing. The template controls what data is in the report and how it is formatted.

Type of Catalog Content That Can Be Published

The default catalog publish template allows the publication of the catalog header details, category hierarchy, category details, and category item assignments. The order of a published report begins with the catalog header and the catalog category details. If the category has a child relationship, then the catalog category association details for the child category follows. If the child category has a hierarchy, then the complete hierarchy under the category is published with the catalog category association details and categories details.

FAQs for Manage Catalogs

How can I define category hierarchies?

Categories can be organized to represent classification taxonomies. The hierarchy organizations for categories have parent and child relationships that form a tree structure. The category hierarchy is created and maintained within the Edit Catalog page, category hierarchy tab. The category hierarchy is shown in true relationship to the way it is defined.

The category hierarchy can be created using two methods: the first is manually creating the hierarchy by adding referenced categories, duplicating categories or creating category for the catalog.

The second method for creating the hierarchy is by importing the category hierarchy through the spreadsheet interface. The category hierarchy can be exported from another catalog or other sources, edited and imported into a new catalog. The hierarchy can also be added manually to the spreadsheet.

On the toolbar of the Category Hierarchy tab, you can create new categories, using the Create Category button. You can add categories, including shared categories, using the Add Category button. If a catalog is has a category hierarchy, you can edit it using the Move Category button, which opens a dialog box.. You can also modify the hierarchy using drag and drop. The catalog category association cannot be deleted, but can be end dated to make the catalog category association inactive. The category hierarchy table provides a choice list filter that controls what catalog category associations and categories area displayed based on the date enablement.

How can I duplicate categories?

You can select and duplicate a category as a quick way to create a similar category configuration. Selecting the Duplicate icon action launches a Create Category dialog that has attribute fields populated based on the selected category attribute values. The category name is prefixed with Copy_ followed by the name of the selected category. Fill in the required field information in the key flexfield segment values. Once the category attributes are updated and the key flexfield segments values are entered, click the OK button to add the newly created category into the category hierarchy of the selected category you have configured.

How can I add categories?

Categories are catalog components that are associated to a catalog for purpose of classification of items. You can add existing categories to the point of selection, which can be a category in the hierarchy or the root of the catalog. If no category is selected, the default is the root of the catalog.

You can add categories by selecting Add Category and selecting Add Category. You can then search for existing categories based on the value of the catalog structure for the catalog. You can narrow the search for existing categories by using the Advance Search region in the dialog. You can add each selected category by selecting the Apply button and the add category region remains open. The OK button adds a category, if a category is selected, and then closes the dialog.

How can I add shared categories?

Adding a shared category is similar to adding an existing category except the category is selected from the catalog that has been designated as a source catalog. The sharing content attribute value determines what content is shared from the source catalog. A category within a source catalog that has been added to a native catalog is also known as a referenced category. You use the drop list menu from the Add Categories menu. The Shared Category option will be disabled if the catalog has not been configured for category sharing.

How can I add images to a catalog or category?

You can attach an image from your desktop or from a configured repository to a catalog or a category, or both. The image is displayed in the catalog detail and the category detail sections of the catalog page. Only one image can be associated with a catalog or category. To attach an image, select the Attachments control and launch the Manage Attachment dialog. The title you provide for the image attachment will appear under the image that is displayed in the catalog. The description you provide is not displayed. Clicking the Browse button will allow you to select the file to be used as the image for the catalog or category. After the information is entered in to the dialog, click the OK button to load the image. The image will not initially be displayed until the catalog is saved. The image can be replaced with another image by selecting the red X to delete the existing image and adding a new image.

What is catalog mapping?

You can map categories of different catalogs to the reporting categories in other catalogs., by using the Manage Catalog Mapping task in the Setup and Maintenance work area. This feature allows one or more categories within a catalog to be mapped to category in a second catalog. For example, suppose that you want to roll up the costs associated with all items assigned to a set of categories in catalog. Catalog mapping allows you to select a category in a catalog, and map all the categories in the set to that category.

Define Supplier Configuration

Create a Supplier and Supplier Site

Creating suppliers and supplier sites is an essential part of the procurement process. A supplier is modeled as a global entity. It is not created within a business unit or any other organizational context. A procurement business unit establishes a relationship with a supplier through the creation of a site which maintains internal controls for how to procure to pay transactions are executed with the supplier.

  1. Within the application, navigate to Suppliers > Create Supplier task.

  2. On the Create Supplier dialog box, enter:

    • Name

    • Tax Country

    • Tax Registration Number

  3. Click Create.

  4. On the Edit Supplier page, Profile tab, enter:

    • Supplier Type

  5. On the Edit Supplier page, Addresses tabs click the Create icon.

  6. On the Create Address page, enter:

    • Address Name

    • Country

    • Address Line 1

    • City

    • County

    • State

    • Postal Code

    • Language

    • Address Purpose

      Select all applicable boxes. At a minimum select Purchasing.

  7. Click Save and Close.

    Repeat address creation for all addresses you do business with for this supplier.

  8. With your supplier selected, open the Sites tab and click the Create icon.

  9. On the Create Site page, enter:

    • Address Name

      Select the address for this supplier site.

  10. Click Save.

  11. Click the Receiving subtab and enter:

    • Receipt Routing

  12. Click the Site Assignments subtab and click Autocreate Assignments. This may only be appropriate for your first site. Other sites may require manual creation.

  13. Click Save and Close.

  14. With your supplier selected open the Contacts tab and click the Create icon.

  15. On the Create Contact page, enter:

    • First Name

    • Last Name

    • Email

    • Select Administrative contact check box

  16. Click the Create icon.

  17. In the Contact Addresses region, click the Select and Add icon:

    • Select the contact address.

    • Click Apply.

    • Click OK.

  18. In the User Account region, click the Create user account check box. Accept all the applicable roles for this contact.

  19. Click Save and Close.

  20. Click Save and Close.

Supplier Numbering: Explained

The Procurement Application Administrator configures supplier numbering. Suppliers created through the Create Supplier task flow, through the supplier registration process, or through supplier import, are automatically numbered. The starting supplier number is defined in the Specify Supplier Numbering Setup page. The predefined default number is 1. The supplier number increments with each additional supplier created.

The next supplier number can be updated at any time, not just during initial setup. This can be used, for example, to skip a range of supplier numbers. The application validates that the next supplier number specified is not already used.

Supplier Outbound Synchronization Service: Overview

When using Supplier Model as the master supplier data repository it's often necessary to send the supplier record updates to another application that depends on this supplier data.

The Supplier Outbound Synchronization Service allows you to perform real-time synchronization of updates in the supplier master to other applications. This is achieved by generating a snapshot of the supplier profile record whenever it is created or updated. The snapshot output is an XML file that models the supplier data structure. The XML file is then delivered securely over HTTPS to a target destination for use by a downstream application.

For more information refer to the Supplier Outbound Synchronization Service white paper on My Oracle Support.

Configuring Supplier Registration and Supplier Profile Change Request: Points to Consider

Use the Configure Supplier Registration and Profile Change Request page to configure the supplier registration and self service supplier profile change request approval requirements.

Supplier Registration

You can configure the supplier registration process based on the expected supplier business relationship of a supplier.

You can define two separate registration flows based on the intended business relationship.

  • Spend Authorized Supplier requests: Companies already identified for a procurement need are directed by the buying organization to the spend authorized registration flow. The flow captures more rigorous profile information needed before agreements, orders, and invoices can be transacted. For example, a spend authorized company registering can be required to provide bank account information.

  • Prospective Supplier requests: Unknown companies are presented with the prospective supplier flow. They must only provide minimal profile information to participate in the sourcing and supplier qualification activities.

Possible profile components that you can include during a registration flow include:

  • Organization Details: Basic supplier information including the supplier name.

  • Contacts: Supplier contact information.

  • Contact User Account: User accounts control privileges for Supplier Portal contacts.

  • Addresses: Company addresses including associated contacts.

  • Business Classifications: Supplier certifications important to the buying organization such as supplier diversity programs.

  • Bank Accounts: Supplier banking information.

  • Products and Services: Identifies what categories of products and services are provided by the supplier.

  • Qualifications Questionnaire: Additional questions for suppliers.

When you configure the two supplier registration flows you identify which profile attributes the supplier sees. Also you can specify whether the supplier must enter a value for the attribute.

  • Enabled: The attribute is displayed to the supplier, but the supplier is not required to enter information.

  • Required: The supplier must supply information for this attribute.

Note: Your supplier registration configuration applies to suppliers from all registration sources.

Default Business Relationship for Registration Sources

A supplier registration can come from one of the following three sources:

  • Internal Sourcing Invitation: Supplier can be invited to register from a sourcing negotiation.

  • Internal Supplier Request: Supplier can be invited to register by a supplier administrator during the course of defining the supplier..

  • External request from the supplier when self-registering using your organization's external supplier registration website.

In the Default Business Relationship for Registration Sources region, you identify the default business relationship for each registration flow. The default business relationship determines what profile information is included as configured for the registration page.

Post Approval Options

Once a new supplier's registration is approved, or its status promoted to spend authorized, the application automatically creates site assignments for any new sites defined for that supplier. However, you can retain control over how the supplier's site assignments are created by deselecting the check box Autocreate site assignments for spend authorized suppliers. If you deselect this check box, site assignments for a supplier are no longer created automatically. You must create them manually.

Registration URL Encryption

When a prospective supplier saves the registration for later completion, the application sends an email to the prospective supplier containing the registration URL. The URL contains an identifier which is encrypted using an encryption key. This prevents users from altering the URL to view registrations submitted by other companies.

If you suspected that registrations have been tampered with, you can regenerate the encryption key. After the registration key is regenerated, registrations saved for later are no longer accessible to their prospective suppliers.

Supplier Registration URLs

You use different supplier registration URLs for each business relationship type (prospective and spend authorized). Your suppliers can then use the appropriate URL to register with your company. Each URL contains a parameter for the business relationship type that navigates your supplier to a registration page.

You can set the registration URL for each business relationship type on the Configure Procurement Business Function page. You can set URLs for both prospective supplier registration and spend authorized registration.

Supplier Profile Change Request

Use the Supplier Profile Change Request tab to configure the approval requirement settings for changes to supplier profile attributes through a change request. The settings apply to supplier initiated profile change requests and to change requests resulting from Supplier Qualification or Sourcing questionnaires. The values you set here apply to supplier profile change requests from any source: Suppliers, Supplier Qualification, and Supplier Negotiation.

You can specify approval requirements for prospective and spend authorized suppliers for the following entities:

  • Organization Details: Basic supplier information including the supplier name and supplier profile level descriptive flexfields.

  • Contacts: Supplier contact information including supplier contact descriptive flexfields.

  • Contact User Account: User accounts that control account privileges for supplier contacts to use Supplier Portal.

  • Addresses: Company addresses including associated contacts including supplier address descriptive flexfields.

  • Business Classifications: Supplier certifications important to the buying organization such as supplier diversity programs.

  • Bank Accounts: Supplier banking information.

  • Payment Methods The method used to pay the supplier.

  • Products and Services: Identifies what categories of products and services are provided by the supplier.

  • Tax Identifiers: Tax organization, tax country, and taxpayer ID to identify the supplier for tax purposes.

  • Site Details: Site information such as the address and site purpose (spend authorized suppliers only).

For each profile attribute, you can specify:

  • No Approval Required: Change request is approved.

  • Approval Required: Change request is routed for approval.

Configuration of the Site Details attribute for prospective suppliers is not available.

Supplier B2B Integration and Collaboration Messaging Framework: Explained

Oracle B2B e-Commerce Gateway and Oracle Fusion Collaboration Messaging Framework are applications for electronic business to business (B2B) communication. You can use them to provide inbound and outbound communication of transactions with trading partners such as suppliers or customers.

You can enable a supplier site for electronic communication using either application as the communication channel.

Oracle B2B e-Commerce Gateway

To use Oracle B2B e-Commerce Gateway, you must first configure the application to receive or send XML documents for a supplier site. The B2B administrator can set up Oracle B2B e-Commerce Gateway using the Configure Oracle B2B e-Commerce Gateway Setups task. You can find the task in the Setup and Maintenance work area. The B2B Supplier Site Code must be unique across suppliers, but can be the same across sites within a supplier. Oracle Fusion Purchasing uses the B2B Supplier Site Code to determine if a purchase order must be communicated through B2B communication. You cannot communicate attachments with purchase orders or change orders using Oracle B2B e-Commerce Gateway.

Similarly, you must configure the supplier site to communicate with Oracle B2B e-Commerce Gateway. To configure the supplier site, use the Sites tab from the Manage Suppliers page. When you configure a supplier site for B2B transactions, you define the supplier site as a trading partner in Oracle e-Commerce B2B Gateway.

Oracle B2B e-Commerce Gateway supports messaging in the OAGIS 7.2.1 format.

Oracle Fusion Collaboration Messaging Framework

Oracle Fusion Collaboration Messaging Framework simplifies setting up business to business communication within the procure-to-pay business flow. The application provides ready-to-use integration with Oracle Supplier Network. Configurations required for a supplier can be achieved within the supplier site setup.

When you use Oracle Collaboration Messaging Framework, no configuration is needed in Oracle B2B e-Commerce Gateway. Instead, you configure the following in the supplier site setup:

  • Set up properties for the supplier site.

  • Select the messages to be exchanged with the partner, and the service provider (if any) used for each message.

  • Enable messaging.

Oracle Collaboration Messaging Framework supports two messaging formats:

  • OAGIS 10.1

  • OAGIS 7.2.1

Once you complete the configuration, you can enable messages for inbound and outbound communication. With Oracle Fusion Collaboration Messaging Framework, you can communicate attachments with your purchase orders and change orders.

The following transaction messaging formats are supported with Oracle Collaboration Messaging Framework:

Outbound Messages -

  • Process Purchase Order

  • Change Purchase Order

  • Cancel Purchase Order

Inbound Messages -

  • Shipment Notification

  • Invoice

  • Receipt Advice

  • Receipt Notification

For details about configuring electronic communications with these applications, see Oracle Procurement Cloud Purchasing Electronic Communication (Document ID 2174649.1), on My Oracle Support.

Enabling Supplier Match: Explained

To enable supplier matching to perform duplicate supplier checks during supplier creation and registration approval, the following setup tasks must be reviewed. These tasks are found in the setup task group, Define Supplier Match Configuration.

  1. Configure Party Relationships for Supplier Match

  2. Manage Data Quality Server Configurations

  3. Manage Enterprise Data Quality Matching Configurations

The supplier match feature leverages Oracle Enterprise Data Quality (EDQ), which provides data quality services for Oracle Cloud applications.

Be aware that making changes to the EDQ setup tasks (tasks 2 and 3 below) can impact other product flows using EDQ, for example customer data management.

Task 1: Configure Party Relationships for Supplier Match

Use this setup task to enable supplier matching by selecting the types of parties to match. If the setup table is empty, the feature is disabled. This setup task also configures the scope for matching, as EDQ can perform matching on parties other than suppliers. The same party can be shared by a supplier, customer and partner record. If you only want to enforce duplicate prevention within supplier parties, then only the party relationship type of Supplier should be added.

Task 2: Manage Data Quality Server Configurations

Use this EDQ setup task to enable the EDQ matching engine by checking the Batch Basic Match option. Server parameters can be ignored as these are configured by Oracle Cloud Operations.

EDQ is used for supplier matching in other Oracle products, so it is advised not to disable it. To disable supplier matching, use only Task 1.

Task 3: Manage Enterprise Data Quality Matching Configurations

Use this EDQ setup task to control the sensitivity level of the matching results impacting the number of possible party matches that are returned during supplier creation. Oracle recommends to use more conservative settings initially, and increase the score threshold if you find too many potential matches are returning due to your data volume.

The following settings are recommended:

  1. Find the configuration named Account Duplicate Identification.

  2. The following predefined settings are in the Real-Time subtab:

    • Cluster Key Level: Typical: When using the Supplier Matching feature, this value is set internally to Exhaustive, which is the desired setting level to produce optimal matching results.

    • Score Threshold: 50.0 This threshold indicates the minimum match score above which results are returned.

    • Match Results Display Threshold: 20.0 This threshold indicates the number of matched records that display during the matching process.

  3. To customize the settings, you must duplicate the predefined configuration. Generally, this is not necessary as the predefined settings described above should return the desired results in the supplier matching process.

  4. Select the configuration and click Duplicate.

  5. Edit the configuration that you duplicated.

    Note: Remember to change the Cluster Key Level to Exhaustive.
  6. Click Rebuild Keys to rebuild all indexes for the new configuration matching to take effect. This process can take a number of hours.

    Note: Note: The Rebuild Keys action must be performed even if you have not customized the predefined configuration. This step is essential in cases where the supplier matching feature is enabled on an existing instance, for example, where parties already exist in the customer instance in order for existing parties to be included in the search for duplicate matches.

To perform a quick test of the configuration and exercise the EDQ matching engine, go to Review Configuration Results and enter the same settings as above:

  • Cluster Key Level - 3 (Exhaustive)

  • Score Threshold - 50

Enter a Party Name that is similar to an existing supplier and click Find to retrieve the match results.

Note: The supplier match feature is available on Oracle Procurement Cloud only. It is not supported on Oracle Fusion Procurement (on-premise).

Define Address Configuration: Explained

Use the following setup tasks, found in the setup task group Define Address Configuration for Define Supplier Configuration, to configure country-specific address definitions for managing supplier address data:

  1. Manage Geographies

  2. Manage Address Formats

These setup tasks are used to optionally modify the default country address format. (Supplier addresses can be entered using the default format). Country-specific address formats can be defined, along with the loading of country geographic location data for performing address validation. If you have a high concentration of suppliers in specific countries, you may want to leverage these setups tasks to streamline supplier address entry and maintenance, by tailoring formats to the specific postal requirements of these countries.

Note: These setup tasks are supported by the Oracle Trading Community Architecture, which manages external party data used by supplier and customer master data. Changes to these setup tasks impact other products using Trading Community Architecture location data.
Note: The job role of Application Implementation Consultant is required to access these tasks.

Task 1: Manage Geographies

Use this task to configure the following geography data setup functions:

  • Load geography data.

  • Define the geography structure per country, which can be organized in a hierarchy. For example, State, Country, City, Postal Code.

  • Map geography data to address fields.

  • Set validations and controls on the address fields.

Task 2: Manage Address Formats

Use this task to configure the following setup functions for address formats:

  • Select and modify the default address style format.

  • Define country-specific address style formats, which include the settings:

    • Address field sequence

    • Address labels

    • Address data standards and validations

    • Required fields

Define Transaction Accounting for Procurement

Transaction Account Builder: Explained

Use the Transaction Account Builder to derive default accounts for Oracle Fusion Common Module: Intercompany and Oracle Fusion Purchasing transactions before they are accounted.

Define Transaction Account Rules

Transaction account definitions are assigned at the ledger and subledger levels. Transaction attributes are used in account rules, which are used in transaction account definitions.

Transaction account types are predefined by the Subledger Accounting application, and categorize different accounts generated for transactions. Sources are assigned to transaction account types.

Transaction account types allow subledger applications to categorize different accounts that are generated for transactions. Accounts that require a consistent derivation throughout the application should share the same transaction account type. This also provides the ability to view or manually override an account on the transaction.

Transaction account types are assigned to transaction account definitions. Assign account combination or segment rules to each transaction account type assignment in a transaction account definition. Assigned sources in each transaction account type are available for use in account rules to derive accounts for a transaction account type.

This setup is accomplished using the Define Transaction Account Rules task list in the Setup and Maintenance work area.

Transaction account rules are used by:

  • Oracle Fusion Common Module: Intercompany

  • Oracle Fusion Purchasing

Transaction Account Builder Components

This figure illustrates the transaction account builder components.

This figure illustrates the transaction account builder
components.
  • Transaction Account Type: Predefined.

  • Account Rules: Users and Predefined.

  • Sources: Predefined.

Account Rules: Explained

Account rules are used to determine the accounts for subledger journal entry lines. In addition, you can specify the conditions under which these rules apply. Using these capabilities, you can develop complex rules for defining accounts under different circumstances to meet your specific requirements. You can define account rules for an account, segment, or value set.

Account Rules by Account

Define account rules by account to determine the entire account combination. For example, an account rule defined by account can be used to determine the complete supplier liability account in Oracle Fusion Payables.

Account Rules by Segment

Define segment rules to derive a specific segment of the general ledger account. For example, a particular segment like the company segment can be determined from the distribution account.

Another segment can be determined with the use of a constant value. Creating the account one segment at a time offers greater flexibility, but also requires more setup.

Use both segment based and account based rules to derive a single account. Segment-specific rules are used, where they are defined, and take the remaining values from an account-based rule. For example, you can use an account rule which is for all segments and also separately use a rule which is for one particular segment. Segment-specific rules take precedence over the all segments account based rule.

Combine account rules with segment rules. In this case, the segment value is derived from the segment rule to override the corresponding segment of the account. If the segment rule has conditions associated with the priorities and none are met, no override occurs and the segment value is derived from the account rule.

Note:
  • If the returned account is end dated with a date that is the same or before the subledger journal entry accounting date, and an alternate account is defined in the general ledger, the alternate account is used. The original account is stored on the journal line for audit purposes

  • If the alternate account is invalid, and the Post Invalid Accounts to Suspense Account option is selected in the Create Accounting process, then a suspense account is used. An error message is displayed if a valid suspense account is not available.

Account Rules by Value Sets

In the absence of a chart of accounts, you may define account rules based upon value sets. This enables you to share the same rule between more than one chart of accounts if the segments in these charts of accounts share the same value set.

Sharing Account Rules across Applications

You may share account rules across applications in the following ways.

  • Assign an account rule from the same or a different application to a journal line rule in the subledger journal entry rule set. For example, to derive an expense account for journal line rule Expense, assign the Projects Cost Account rule owned to the Payables journal line rule Expense.

  • Create an account rule based on an account rule from another application and assign it to a journal line rule. For example, you may create an account rule Invoice Expense Account referencing Project Cost Account assigned in the Priorities region. You may attach the Invoice Expense Account rule to the journal line rule Expense in the journal entry rule set.

Note:
  • To share an account rule across applications, all sources used by the account rule must be available for the event class.

  • If the sources are available, an account rule is assigned to a journal line rule in the journal entry rule set. Verification occurs to confirm that all sources used by the account rule are available for the journal line rule accounting event class. Journal line rules are only available if the sources are shared; such as reference objects.

Account Rules and Mapping Sets

Mapping sets can be used to associate a specific output value for an account or segment. You can use mapping sets in account rules to build the account.

Account Rules Conditions

In the account rules you may specify conditions for each rule detail line. Priorities determine the order in which account rule conditions are examined. When the condition is met, the rule associated with that priority is used. Depending on which of the defined conditions is met, a different account rule detail is employed to create the account.

The Create Accounting process evaluates conditions based on the priority of the rule detail. When the condition is met, the rule detail is applied.

Creating Account Rules: Points to Consider

You can define an account rule using the following rule types:

  • Account combination

  • Segment

  • Value Set

Account Combination Rules

Set up account combination rules based upon the following value types:

  1. Source Value Type: Derive the account combination by specifying a source.

    Sources that have been set up as accounts can be assigned to an account combination rule. Subledger Accounting then obtains the account combination identifier from the source.

  2. Constant Value Type: Establish the account as a constant value.

    For example, the constant could be a completed account combination from the chart of accounts specified. An example is the account combination, 01.000.2210.0000.000. This is the simplest way to derive an account.

  3. Mapping Set Value Type: Derive the account combination by referencing a mapping set.

    Set up a mapping set to determine the complete account combination from the chart of accounts specified.

  4. Account Rule Value Type: Derive the account by referencing another account rule.

    The chart of accounts is optional when defining this type of rule. If the account rule has a chart of accounts assigned, then all the related account rules must use the same or no chart of accounts.

Note: A chart of accounts must be specified for account combination rules using constants.

Segment Rules

Set up segment rules as follows:

  • When a chart of accounts is specified, create a rule to derive the value for a specific segment from the chart of accounts.

  • If the chart of accounts is not specified, create a rule to derive the value for an account segment with a specific qualifier.

Set up segment rules using the same methods discussed in the preceding Account Combination Rules section. By specifying different value types, users can select the way in which the segment value is derived.

Note: A chart of accounts must be specified for segment rules using constants.

Value Set Rules

Value set based rules can be created when a chart of accounts is not specified, enabling you to share the same rule between more than one chart of accounts. But, only if the segments in these charts of accounts share the same value set.

Set up value set based rules using the same methods discussed in the preceding Account Combination Rules section.

Mapping Sets: Explained

Mapping sets provide an efficient way to define a segment or account combination value for one or more transaction or reference attribute values. Using such input and output mappings is simpler than using complex conditions on account rules.

Based on the value of the source input, a single segment or a full account is derived.

Examples of source input value types:

  • Transaction attributes

  • Reference attributes

With mapping sets you can:

  • Use up to 10 transaction or reference attributes as inputs into a mapping.

  • Define default output value to use when actual input values do not match the mappings.

  • Use wildcards for multiple input mapping sets to indicate that the value of a particular input should be ignored for certain mappings.

  • Enter the mappings directly on the user interface or use the spreadsheet available in the Export option, and then import.

    Export allows:

    • Exporting a template to create mappings.

    • Exporting all mappings created for the mapping set to add or edit the current mappings.

Example

Assume a business operates in several regions, including:

  • East

  • South

  • West

The business has a Region segment in their chart of accounts.

The region name can be the input for the mappings to derive the value of the region segment. You can create a mapping set that maps region names to the corresponding region code.

This table contains region names and segment values used in this example.

Input Value (Region Name) Segment Value

East

01

South

02

West

03

Additional transaction information, such as transaction type and salesperson name, could also be used as inputs to help derive a different segment value for each combination of the input values.

Defining Mapping Sets: Examples

Define a mapping set when you have a matrix of input values that produces distinct output values. For each input value, specify a corresponding account combination or segment output value. One or more related pairs of these input values with the segment or account combination output values form a mapping set.

A mapping set definition includes the selection of input sources, output type, and mappings. The mappings section displays how input values are mapped to output values.

To define mapping sets:

  • Specify the output type:

    • The output type for a mapping set can be an account combination, segment, or value set.

    • Use value set:

      • If the value set is used by more than one chart of accounts,

      • And the mapping set can be reused across multiple charts of accounts.

    • Expected input or output combinations are constant across the charts of accounts.

    • Based on the selection, the mapping set provides the value for an account, segment, or value set.

  • Define the input source:

    • Specify the input source for mapping.

      • The input source is provided for predefined mapping sets.

  • Define the chart of accounts and value sets.

  • Specify the output value for the mapping:

    • For a given input value, enter the corresponding output value.

    • The account rule uses this value to populate either the account or the segment.

      • If the output type is a value set, the output value is an individual value from the value set entered.

      • If the output type is segment, the output value is an individual segment value.

      • If the output type is account combination, the output value is an entire account.

Mapping sets are used with account rules:

  • If the output type is account combination or segment, identify the chart of accounts assigned to the mapping set.

  • If the output type is a value set, identify the value set assigned to the mapping set.

  • If defining a mapping set for more than one chart of accounts or value set, it can be assigned to more than one account rule. This increases the ability to share the mapping set.

A mapping set with no associated chart of accounts:

  • Can be assigned to an account rule if:

    • The account rule is not associated with a chart of accounts.

    • The mapping set can have any chart of accounts or no chart of accounts.

  • Cannot be assigned to an account rule if:

    • The account rule is associated with a chart of accounts. The mapping set must have the same chart of accounts.

Example

In the following example, the chart of accounts is set up with four segments. A mapping set is defined with a value set for Supplier Type as described in the following table.

This table contains examples of input values and output values.

Input Value Output Value

Services

01-100-6120-000

Consulting

01-400-6110-000

Assume that two invoices are entered, one for a supplier with a type of Services and one for a supplier with a type of Manufacturing.

When using the mapping set, the source value Supplier Type is compared with the mapping set input values to determine the account.

In this example, there is a match for the first case; the invoice with a supplier type of Services maps to an input value. However, the invoice with a supplier type of Manufacturing does not map to an input value.

This table contains the derived accounts based on the example.

Invoice Supplier Type Output Value

1

Services

01-100-6120-000

2

Manufacturing

No account generated

Note: To ensure that transaction 2 is accounted, you may want to modify the account rule to which the mapping set is assigned. If not, a separate rule can be defined to provide for the Manufacturing supplier type, or define a default output in the existing mapping set.

Setting Up an Account Mapping Using a Procurement Category Hierarchy: Worked Example

This example shows how to use a procurement category hierarchy to set up an account mapping. The mapping derives an account for purchases of hardware and software.

Use a procurement category hierarchy having the level 2 category, Information Technology, to set up an account mapping set for purchases of computer hardware. This table summarizes key decisions to consider, and the decisions made for this scenario.

Decisions to Consider In This Example

Do you have an existing procurement category hierarchy to use?

Assume the example hierarchy exists.

What procurement category hierarchy level do you want to use for the mapping?

In this example use the level 2 category Information Technology.

Do you have an account set up that you can use in the mapping?

In this example assume the account Purchasing Computer Hardware exists.

Does your organization have an account combination in the Chart of Accounts that you can use in the mapping?

In this example assume that it does.

Example Procurement Category Hierarchy

The example procurement category hierarchy has the following levels:

  • No level number: Root

  • Level 1, under Root: Indirect spending.

  • Level 2, under Indirect: Marketing, IT, and Legal Services

  • Level 3 item categories, under IT: Software, Hardware, and Peripherals

This figure illustrates the structure of the example procurement category hierarchy.

Example procurement category hierarchy for information
technology purchases of software, hardware and peripherals.
Note: You can create more than 10 levels of categories under the root category. You can only set up account mapping sets based on the top 10 levels.

Prerequisites

This example assumes the following prerequisites setups are completed.

  1. A procurement category hierarchy is created, using the Manage Procurement Category Hierarchy setup task. You can find the task in the Setup and Maintenance work area, Procurement offering, Procurement Foundation functional area.

  2. Accounts are created in the Chart of Accounts, using the Define Chart of Accounts task.

  3. Account rules are created, using the Manage Account Rules setup task.

Creating the Account Mapping

  1. In the Setup and Maintenance work area, select the Procurement offering.

  2. On the Setup: Procurement page, click the Procurement Transaction Account Rules functional area, and click the Manage Mapping Sets task.

  3. On the Manage Mapping Sets: Purchasing page, click the Create icon.

  4. On the Create Mapping Set page, complete the fields as shown in this table.

    Field Value

    Name

    Hierarchy Mapping Set

    Short Name

    HIERARCHY_MAPPING

    Output Type

    Account Combination

  5. In the Input Sources section, click the Add icon.

  6. On the Search and Select Input Sources dialog, complete the fields as shown in this table.

    Field Value

    Subledger Application

    Purchasing

    Source

    Procurement Category Hierarchy Level 2

  7. On the Create Mapping Set page, in the Input Sources section, the Number field value is populated with 1. The Source value is Procurement Category Hierarchy Level 2.

  8. In the Chart of Accounts section, click the Add icon.

  9. In the Chart of Accounts field, select an account from the list of values. For example, Purchasing Computer Hardware.

  10. In the Mapping section, click the Add icon. Complete the fields as shown in this table.

    Field Value

    Input

    Enter the exact category name. For example, Information Technology.

    Output

    Click the Output icon. In the dialog enter the chart of accounts values for your account combination: Company, Department, Account, Sub-Account, and Product.

  11. Click OK, and then click Save.

Project Information in Account Derivation for Procurement Transactions: Explained

You can use project information to set up rules to derive accounts, for sponsored project procurement transactions in requisitions and purchase orders.

Use project-related attributes to derive transaction accounts by applying them as:

  • Input sources for creating mapping sets.

  • Values for account rule priorities.

  • Account rule conditions.

Aspects of using project information for account derivation that are covered in this topic are:

  • Example

  • Attributes

  • Setup

Example

For example, you can set up an account rule to select the account to which a project expenditure should be charged. Base the rule on the contract number, or the funding source of an award, or the contract owning organization.

Attributes

The following are some of the project attributes you can use in account rules.

  • Award Owning Business Unit

  • Award Purpose

  • Award Type

  • Contract Number

  • Funding Source

  • Principal Investigator

Setup

Set up account rules using the Setup and Maintenance work area, in the Procurement offering, Procurement Transaction Account Rules functional area.

For more information refer to the following white paper available on My Oracle Support (MOS): Transaction Account Builder in Oracle Fusion Procurement (document ID 1507175.1).

Setting Up an Account Rule for an Outside Processing Purchase: Explained

You can define account rules to derive charge accounts specifically for purchases of outside processing items.

To do this use the following tasks in the Setup and Maintenance work area, Procurement offering, Procurement Transaction Account Rules functional area:

  • Manage Account Rules task

  • Manage Mapping Sets task

Use the Manage Account rules task to review the delivered Purchasing Charge Account Rule. The rule includes the Outside Processing Account rule value. The rule value includes a condition defined for outside processing purchases, where the Outside Processing Indicator value is set to Yes. When the condition is true the charge account is derived from a mapping set.

Use the Manage Mapping Set task to configure the delivered Outside Processing mapping set associated with the Purchasing Charge Account rule. To derive the charge account required for automatic creation of outside processing purchase orders, you must define rules for the delivered mapping set. Outside processing-related Input values include:

  • Inventory Organization Code

  • Work Order Sub Type

  • Purchasing Category Code

  • Item

For each input value select an output charge account to map it to.

You can also use the Manage Account rules task to define a rule with a condition where the Destination Type Code is set to Manufacturing.

Define Transaction Taxes

Define Tax Configuration: Overview

Oracle Fusion Tax provides a single-point solution for managing your transaction and withholding tax requirements. In the Define Tax Configuration activity, you can manage the entire configuration and maintenance of tax content.

Oracle Fusion Tax:

  • Uniformly delivers tax services to all Oracle Fusion application business flows through one application interface

  • Provides a single integration point for third-party tax products and services

  • Is configurable and scalable for adding and maintaining country-specific tax content

  • Ensures control over manual intervention and update

With Oracle Fusion Tax, you can model your taxes according to the needs of the following local and international tax requirements:

  • Both simple and complex country-specific tax legislation

  • Cross-border transactions, including exports and Intra-European Community transactions

  • Intercompany transactions

  • Local compliance requirements for recording and reporting

  • Continual changes to tax legislation, such as:

    • New taxes

    • Local law changes

    • Special tax rates

    • Special exceptions for products and customers

Task Lists

The Define Tax Configuration activity contains the following task lists

  • Define Tax Configuration: Use these tasks to create a basic tax configuration for each of your tax regimes.

  • Define Advanced Tax Configuration: Use these tasks to configure optional tax setup that addresses more complex tax requirements, such as exceptions to standard tax calculations.

Defining Tax Configuration for Transaction Taxes: Critical Choices

With Oracle Fusion Tax, you can model your transaction tax requirements according to the needs of local and international tax requirements. To determine how to set up your tax configuration, you must first analyze your requirements.

Analyzing Your Transaction Tax Requirements

The following table represents key decisions that you must make when you analyze your transaction tax requirements and use Oracle Fusion Tax and other Oracle Fusion applications to implement a solution.

Question Consideration Impact to Tax Configuration

Who am I?

You must first answer questions about yourself and your relationship to the legal and regulatory agencies that enable you to operate in one or more counties.

 

Where do I have operations and businesses?

Identify the countries:

  • Which you operate in

  • Where you are legally registered

  • Where you have subsidiary companies that are legally registered or have a legal presence

Use Oracle Fusion Legal Entity Configurator to capture information about your legal entities and legal registration.

What taxes am I subject to?

Analyze your tax environment for each of the countries in which you operate.

Set up your tax regimes, taxes, and tax jurisdictions according to the tax requirements for each country.

What are the operations and businesses that I have?

Consider the types of operations and businesses in which you are engaged and the countries where you have legal entities or reporting units.

The following may impact your taxability:

  • The type of industries that you work under, for example, mining, telecommunications, and pharmaceuticals

  • The kind of operations in which you engage, for example, trading, manufacturing, and services

  • The scale of your operations, for example, your turnover, company size, and growth

Use the classifications feature to categorize or classify your first parties under various classification schemes.

In analyzing your operations, you can associate the three main classifications of a transaction to:

  • What you do: Use transaction fiscal classifications.

  • What products you buy or sell: Use product fiscal classifications.

  • Who your customers and suppliers are: Use party fiscal classifications.

What do I do?

Identify and classify the transactions that you enter into.

For example, do you primarily sell physical goods? If you do, do you manufacture them, or do you buy and sell them without additional manufacturing? Do you sell these goods in another state or province? Do you export these goods? Do you provide or use services?

Use Oracle Fusion Tax to create fiscal classifications to classify and categorize your transactions in a common manner across your organization. Use these fiscal classifications in tax rules to obtain the appropriate tax result.

What products do I buy or sell?

Determine the products that you buy and sell as they impact the taxes to which you are subject.

For example, you must register for, and therefore collect and remit, service taxes only if you provide taxable services. If you manufacture goods for export, you may not be subject to taxes on the purchases that are part of the manufacture of such goods.

Where Oracle Fusion Inventory is installed use the Inventory Catalog feature with Oracle Fusion Tax product fiscal classifications and intended use functionality to classify the taxable nature and intended use of the items. You can then define tax rules using these classifications to obtain the appropriate tax result.

Define product category and noninventory-based intended use fiscal classifications to address classification needs for transactions that do not use inventory items.

Who are my customers and suppliers?

Determine the types of customers and suppliers with whom you do business. They can impact the taxes to which you are subject or the tax status or tax rate that applies.

For example, let's say that you are a company in the UK that supplies physical goods to another country that is also a member of the European Union. The transaction rate for UK VAT is dependent on whether the customer is registered for VAT in the country to which the supply is made.

Use the party classifications feature to categorize or classify your customers and suppliers. You can use these classifications in your tax rules to derive the appropriate tax result.

You create a party fiscal classification by assigning an Oracle Fusion Trading Community Model class category to a party fiscal classification type code that you define. The Trading Community Model class codes defined under the class category become fiscal classification codes belonging to the party fiscal classification type. You can create a hierarchy of party fiscal classification types to reflect the levels of codes and subcodes within the Trading Community Model classification.

Scope Values for Define Tax Configuration Task List: Explained

The purpose of scope is to define the parameters of your implementation project by setting the context of a task list during initial configuration. When exporting setup data based on setup migration services, the scope values serve as parameters to control the data selected for export to the respective configuration package.

The foundation tax setup is an incremental setup where each step of the foundation configuration builds on the previous step. The task list is organized sequentially to ensure that you perform setup tasks in the order required. You can define scope values at incremental steps in the implementation project to pass to subsequent tasks to ensure:

  • Continuity

  • Ease of setup

Scope is a valuable tool when implementing, but tax scope values are not a required element of the implementation and you do not need to define them.

Defining Scope

When implementing transaction or withholding tax, you can define scope values for taxes, tax jurisdictions, tax statuses, tax rates, tax recovery rates, and tax rules. To set scope, you can:

  • Select and add multiple values

  • Create a new value

When you select the scope value, that value defines the context of that setup. For example, if you select a tax regime to use as a scope value for a tax, that value is automatically populated in the search attributes on the Manage Tax page. That tax regime's attributes are also populated in the Create Tax page. The same logic applies to the next step in the tax setup.

Scope Values

The following table identifies where you define the scope value in the Define Tax Configuration and Define Advanced Tax Setup task lists:

Where Scope is Defined Scope Values

Manage Taxes

Tax regime

Manage Tax Rates and Tax Recovery Rates

  • Tax regime

  • Tax

  • Tax status

Manage Tax Rules

  • Tax regime

  • Tax

Manage Tax Jurisdictions

  • Tax regime

  • Tax

Manage Tax Statuses

  • Tax regime

  • Tax

Foundation Tax Configuration: Points to Consider

Use Oracle Fusion Tax to set up and maintain your transaction and withholding tax requirements in all geographic locations where you do business. Foundation tax configuration refers to a set of tax setup components that you use to satisfy your tax requirements.

At transaction time, Oracle Fusion Tax uses your tax configuration to determine the taxes that apply to each transaction and to calculate the transaction tax and withholding tax amounts.

Foundation tax configuration components consist of:

  • Tax regimes

  • Taxes

  • Tax jurisdictions

  • Tax statuses

  • Tax rates

Foundation Tax Configuration

Complete the setup tasks to create a basic tax configuration for each of your tax regimes. A foundation tax configuration contains the data applicable to the taxes belonging to a tax regime. The following table describes the appropriate levels of specifying setup options for foundation tax components and provides a Canada Goods and Services Tax (GST) and Harmonized Sales Tax (HST) example for each component.

Component Appropriate Level to: Typically, Not Appropriate Level to: Canada GST and HST Example

Tax Regime

  • Share tax content among legal entities and business units.

  • Enable partner integration.

  • Associate fiscal classifications.

  • Define tax reporting types and codes.

  • Define features to influence setup task list.

  • Define configuration owner tax options.

  • Define application tax options.

  • Define party tax profiles.

CA GST and HST

Tax

  • Enable controls to influence tax behavior.

  • Specify defaults that are commonly applicable.

  • Define applicability tax rules.

  • Define customer exemptions.

  • Specify party registrations.

  • Share tax content.

  • Define integration with partners.

  • CA GST

  • CA HST

Tax Jurisdictions

  • Define location-based tax rates.

  • Define customer exemptions and rate exceptions.

Specify tax rule defaults.

  • CA Alberta GST

  • CA BC HST

Tax Status

  • Define common rules for tax rates.

  • Drive reporting needs.

  • Allow manual override to tax rates.

  • Specify tax rule defaults.

  • Define customer exemptions.

  • Specify party registrations.

  • GST Standard

  • HST Standard

  • HST Reduced

Tax Rates

  • Define tax rates by effective periods.

  • Specify tax account variations.

  • Define tax rate exceptions.

  • Define tax recovery rates.

  • Define customer exemptions.

  • Define applicability tax rules.

  • Define taxable calculation formulas.

  • Share tax content.

  • CA GST Standard

  • CA GST Reduced

  • CA GST Exempt

  • CA HST Standard

Tax Rule Configuration: Points to Consider

Create a simple tax model using tax rule defaults that you define in setting up your foundation tax configuration. You can also create tax rules for your complex tax requirements that consider each tax requirement related to a transaction before making the final tax calculation.

When running the tax determination process, Oracle Fusion Tax evaluates, in order of priority, the tax rules that you defined against the foundation tax configuration setup and the details on the transactions. If the first rule is:

  • Successfully evaluated, the result associated with the rule is used.

  • Not successfully evaluated, the next rule is evaluated until either a successful evaluation or a default value is found.

Tax Rule Configuration

The complexity of tax rule setup falls into three general categories:

  • No tax rules required

  • Simple tax rule regimes

  • Complex tax regimes

This table presents the scenarios and actions associated with each of these categories.

Category Scenario Action

No tax rules required

The tax authority levies tax on all sales and purchase transactions at the same rate. Neither tax applicability nor the tax rates and recovery rates vary by the:

  • Parties to the transaction

  • Products or services in the transaction

  • Business processes involved in the transaction

For the tax, define tax rule defaults for the tax status, tax rate, and tax recovery rate.

The tax determination process uses the tax rule defaults to determine the tax.

Simple tax rule regimes

The tax authority levies tax on your transactions at the same rate, with a simple set of identifiable exceptions. The exceptions either apply to:

  • One part of the transaction only, such as to certain parties.

  • A combination of parties, products, and transaction processes that you can summarize in a simple way.

Create a simple set of rules, for example, to identify place of supply and tax registration, and use the tax rule default values for the other processes.

The tax determination process uses the tax rules and the tax rule defaults to determine the tax.

Complex tax regimes

Tax regimes in certain countries require a complex logic to determine the applicable taxes and rates on a transaction. Both tax applicability and tax rates can vary, for example, by:

  • Place of origin

  • Place of destination

  • Party registration

  • Tax status

  • Service

  • Combination of factors

In some cases, the taxable amount of one tax may depend upon the amount of another tax on the same transaction. And in rare cases, the tax amount itself may depend on the tax amount of another tax.

Set up tax rule to define the logic necessary to identify each step of the tax determination process.

The tax determination process uses the tax rules to determine the tax.

Define Tax Geographies

Place Information: Explained

All tax regimes need information about place or geography. Use place information for determining factors within tax rules in the tax determination process. Also, use place information while defining tax regimes, tax geography, and tax jurisdictions.

Information about place or geography is required to determine:

  • Where the tax is applicable

  • What tax rules to apply to a transaction when goods are:

    • Delivered to another country

    • Delivered inside or outside an economic region such as, the European Community (EC)

  • What the specific regions are, such as:

    • City, county, and state for US Sales and Use Tax

    • Provinces in Canada

To support these requirements, define and use geography regions and tax zones. Geography regions and tax zones provide a conceptual model to use place information on transactions and information related to the transaction.

The following types of places are supported for tax purposes:

  • Country information

  • Geography elements

  • Tax zones

Country Information

Country is a required field in all of the tax-related address locations. The country fields are supported by a predefined ISO 3166 country name and two-character country code. For more information on country names and codes, see http://www.iso.org/iso/english_country_names_and_code_elements.

You don't set up a country as a specific geography level in Trading Community Model geography because country is an inherent part of all tax-related address locations.

Tip: Use the highest level of geography, typically country, wherever possible.
Geography Elements

Define geography elements as part of Trading Community Model geography. They control the use of geography and addresses. Oracle Fusion Tax commonly uses the following features:

  • Geography or tax zones

  • Geography levels

  • Address controls

  • Geography name referencing

Use geography levels to define the levels of geography that are used within a country. It's only relevant elements of the address that are referenced for tax purposes. For example, state, county, and city are used for US Sales and Use Tax. County in the UK isn't relevant from a tax perspective and therefore, you don't need to set it up.

Tip: When address elements are needed for tax purposes, such as county and city for US Sales and Use Tax, set these address levels as mandatory within Trading Community Model geography. This ensures that these elements are always present on all applicable addresses. Setting address levels as mandatory also ensures that amended or newly applicable addresses are validated and that the level is either derived or entered.

When you're setting up migrated addresses ensure that they're compliant with the mandatory levels being present. This should be validated and any address levels added as part of the migration process.

The geography name referencing process within Trading Community Model geography links specific addresses to the levels defined in the geography setup. This process is typically automatic. However, when you encounter issues, you may need to trigger this process to ensure that all addresses are correctly linked to their applicable levels.

Tax Zones

Use the tax zone functionality when you need to identify a group of geography elements while calculating tax. Tax zones are defined as part of Trading Community Model geography.

For example, in the EC it's important to know whether goods and services are being delivered within the EC. Use the tax zone functionality to create a tax zone, which defines the membership to the EC as well as, the dates on which a country became the member.

Tip: Create a generic tax zone so that you create a tax zone type that can be used in multiple situations. For example, for a tax zone type needed to identify EC, create a generic tax zone type for all economic communities, which can later be used in other situations where economic communities or trade agreements affect tax determination.

You can also use the tax zone functionality to group postal codes to provide useful groupings that can identify some higher-level tax regions such as, cities or counties.

Country Information: How It Works in Tax Rules and on Transactions

Use geography determination factors to specify country information in tax rules. A combination of determination factor class, class qualifier, and determining factor represent these determination factors. Specify the taxation country at transaction time which is used, along with the tax rules, during the tax determination process.

Country Information in Tax Rules

To set up tax rules based on country information, use:

  • Geography as the determining factor class

  • Location type on the transaction as the class qualifier

  • Country as the tax determining factor.

You can also use country as a tax rule qualifier.

The tax determining factors for locations are given generic names such as ship-to and bill-from, depending on the transaction types.

The transaction types are

  • Order-to-cash: For Oracle Fusion Order Management and Oracle Fusion Receivables transactions.

  • Procure-to-pay: For Oracle Fusion Purchasing and Oracle Fusion Payables transactions.

These generic locations are mapped into specific locations based on the transaction as shown in the following table:

Generic Party Order-to-Cash Party Procure-to-Pay Party

Bill-from party

Location assigned to the business unit for the transactions

Supplier

Bill-to party

Customer

Location assigned to the business unit for the transactions

Ship-to party

Customer (ship-to) party site

Ship-to location on the line

Ship-from party

Warehouse on the line. If there is no warehouse on the line, such as with services, the location from the item validation organization in the Receivables system parameters is used.

Supplier (ship-from) party site

Point of acceptance party

Customer point of acceptance party

Not applicable

Point of origin party

Customer point of origin party

Not applicable

Country Information at Transaction Time

Specify the taxation country on the transaction to identify the country in which the transaction is deemed to have taken place for taxation purposes. The default value is the country of the legal entity.

Use the country name to search for country defaults, which control the:

  • Fiscal classification defaults

  • Party tax profile defaults

  • Tax regime defaults

  • Tax defaults

Use the country name to select the following fiscal classifications associated with that specific country:

  • User-defined fiscal classifications

  • Product categories

  • Intended use fiscal classifications

  • Transaction business categories

Using Country Information in Tax Rules: Example

For many regimes, it is important to know if the supply of goods is exported. The easiest way of doing this is to ensure that the ship-from location is from the country in question and the ship-to location is a different country.

The following scenario illustrates setting up tax rule components to identify if the goods are exported from the United States.

Creating Tax Rule Components

Create a tax determining factor set as follows:

Determining Factor Class Class Qualifier Determining Factor Name

Geography

Ship from

Country

Geography

Ship to

Country

Create a condition set that refers to this geography determining factor as follows:

Determining Factor Class Class Qualifier Determining Factor Name Operator Value

Geography

Ship from

Country

Equal to

United States

Geography

Ship to

Country

Not equal to

United States

Use this combination of determining factors in any situation where you need to identify exports from the United States.

Geography Elements: How They Work in Tax Rules

Geography determination factors allow you to use geography elements in tax rules. A combination of determination factor class, class qualifier, and determining factor represent these determination factors.

Geography Elements in Tax Rules

To set up tax rules based on geography elements, use:

  • Geography as the determining factor class

  • Location type on the transaction as the class qualifier

  • Geography level, such as county, province, or city, as the tax determining factor

You can also use the geography level as a tax rule qualifier.

The tax determining factors for locations are given generic names such as ship to and bill from, depending on the transaction types. The transaction types are:

  • Order-to-cash: For Oracle Fusion Order Management and Oracle Fusion Receivables transactions.

  • Procure-to-pay: For Oracle Fusion Purchasing and Oracle Fusion Payables transactions.

These generic locations are mapped to the specific location, based on the transaction as shown in the following table:

Generic Party Order-to-Cash Party Procure-to-Pay Party

Bill-from party

First-party legal entity

Supplier

Bill-to party

Customer

First-party legal entity

Ship-to party

Customer (ship to) party site

First-party legal entity

Ship-from party

First-party legal reporting unit

Supplier (ship from) party site

Point of acceptance party

Customer point of acceptance party

Not applicable

Point of origin party

Customer point of origin party

Not applicable

Using Geography Levels in Tax Rules: Example

Use the geography element in tax rules to identify a specific geography region when taxes in a country need to identify geography elements below the country level. For example, in US Sales and Use Tax, you may need to create tax rules for a specific state.

The following scenario describes how you can set up tax rule components to identify when goods are being delivered to a specific state, such as Ohio.

Creating Tax Rule Components

Create a tax determining factor set with the following geography elements:

Determining Factor Class Tax Class Qualifier Determining Factor Name

Geography

Ship to

State

Create a condition set that refers to a specific state value as follows:

Determining Factor Class Class Qualifier Determining Factor Name Operator Value

Geography

Ship to

State

Equal to

Ohio

You can use this combination of determining factors in any situation where you need to identify specific deliveries to a specific state.

Tax Zones: How They Work in Tax Rules

Geography determination factors allow you to use geography elements in the tax rules. The determination factors include a combination of determination factor class, class qualifier, and determining factor.

Tax Zones in Tax Rules

Use geography as the determining factor class, location type on the transaction as the class qualifier, and tax zone type such as county, as the determining factor.

The tax determining factors for locations are given generic names such as ship-to and bill-from, depending on the transaction types.

These generic locations are mapped to the specific location based on the transaction as shown in the following table:

Generic Party Order-to-Cash Party Procure-to-Pay Party

Bill-from party

First-party legal entity

Supplier

Bill-to party

Customer

First-party legal entity

Ship-to party

Customer (ship to) party site

First-party legal entity

Ship-from party

First-party legal reporting unit

Supplier (ship from) party site

Point of acceptance party

Customer point of acceptance party

Not applicable

Point of origin party

Customer point of origin party

Not applicable

You can also use tax zones as tax rule qualifiers.

Using Tax Zones in Tax Rules: Example

For the European Community (EC) or the European Union (EU), it's important to know whether goods and services are being delivered within the EC. Use the tax zone functionality to create a tax zone that defines the membership of the EC and the dates on which a country became a member.

The following scenario describes the use of a partial condition set that you can use within tax rules to define when a delivery is being made to an EC from the United Kingdom.

Scenario

Use geography as the determining factor class, ship-to as the class qualifier, and all economic communities and country as the determining factors of the tax zone type as shown in the following table:

Determining Factor Class Class Qualifier Determining Factor Name

Geography

Ship-to

All Economic Communities

Geography

Ship-to

Country

Geography

Ship-from

Country

Create the condition set as follows:

Determining Factor Class Class Qualifier Determining Factor Name Operator Value

Geography

Ship-to

All Economic Communities

Equal to

European Community

Geography

Ship-to

Country

Not equal to

United Kingdom

Geography

Ship-from

Country

Equal to

United Kingdom

You can use this combination of determining factors in any situation where you need to identify the deliveries that are made from the UK to other EU countries.

Define Tax Regimes

Regimes to Rates: Explained

Regime to rate setup contains the details of a tax regime, including all taxes, tax jurisdictions, tax statuses, and tax rates. You can update existing records or create new records at any point in the tax regime hierarchy.

Regime to rate setup tasks include:

  • Tax regimes

  • Taxes

  • Tax jurisdictions

  • Tax statuses

  • Tax rates

Tax Regimes

Set up tax regimes in each country and geographical region where you do business and where a separate tax applies. A tax regime associates a common set of default information, regulations, fiscal classifications, and optionally, registrations, to one or more taxes. For example, in the US, create a Sales and Use Tax tax regime to group taxes levied at the state, county, and district levels. For the UK, create a tax regime for GB VAT.

Taxes

Set up details for the taxes of a tax regime. Each separate tax in a tax regime includes records for the tax statuses, tax rates, and tax rules that are used to calculate and report on the tax.

For example, for US Sales and Use Tax define a tax for each state, county, and city. For the UK, set up a tax for GB VAT.

Tax Jurisdictions

Set up tax jurisdictions for geographic regions or tax zones where a specific tax authority levies a tax. A tax jurisdiction specifies the association between a tax and a geographic location.

You also use tax jurisdictions to define jurisdiction-based tax rates. A tax jurisdiction tax rate is a rate that's distinct to a specific geographic region or tax zone for a specific tax.

For example, for US Sales and Use Tax create a county jurisdiction for every county in the parent geography type of State and in the parent geography name of California. For the UK, create a tax jurisdiction for the country of United Kingdom.

Tax Statuses

Set up the tax statuses that you need for each tax that you create for a combination of tax regime, tax, and configuration owner. A tax status is the taxable nature of a product in the context of a transaction and specific tax on the transaction.

For example, for US Sales and Use Tax create a tax status for standard and exempt. For the UK set up separate tax statuses for standard, zero, exempt, and reduced rates.

Tax Rates

Set up tax rates for your tax statuses and tax jurisdictions. For tax statuses, set up a tax rate record for each applicable tax rate that a tax status identifies. For tax jurisdictions, set up tax rate records to identify the tax rate variations for a specific tax within different tax jurisdictions.

For example, for US Sales and Use Tax create a tax rate for each tax jurisdiction (jurisdiction-based rates). For the UK, set up separate tax rates for standard, zero, exempt, and reduced (tax status-based rates).

Tax Recovery Rates

Set up tax recovery rate codes for the recovery types identified on the taxes within a tax regime. A tax recovery rate code identifies the percentage of recovery designated by the tax authority for a specific transaction.

For example, organizations that produce VAT-applicable goods and services are allowed to recover 100% of the VAT they pay on typical purchases. They would use a default 100% recovery rate.

Organizations, such as financial institutions, which create services that are exempt from VAT, are not able to recover VAT on their normal purchases. They would use a default 0% recovery rate.

Minimum Tax Configuration: Explained

The minimum tax configuration to meet the basic tax requirements of your transaction and withholding taxes comprise of defining a tax regime and associated taxes.

The two steps in defining the minimum tax configuration are:

  1. Define tax regime: This step includes the tax regime definition as well as the subscription by the appropriate legal entity or business unit.

  2. Define transaction and withholding taxes: This step includes the basic tax definition, controls and defaults, direct and indirect tax rule defaults, and tax accounts.

The following prerequisite setups must be completed for minimum tax configuration:

  • First parties, such as legal entities and business units

  • Tax geographies and zones

  • Ledger and accounts

A legal entity tax profile is automatically created when a legal entity is defined in the implementation. Similarly, a business unit tax profile is automatically created when a business unit is defined. For the business unit, indicate whether it uses the subscription of the legal entity instead of creating its own.

Define Tax Regime

The first step includes the tax regime definition and subscription by an appropriate legal entity or business unit. While creating your tax regime, you can minimize configuration and maintenance costs by creating content that can be shared by more than one entity. For example, legal entities can subscribe to the shared reference data instead of creating separate and repetitive data. If the subscribing legal entities have some variations in their setup, you can create override data to meet the specific exceptions that are applicable to these organizations.

Define Transaction and Withholding Taxes

The second step includes basic tax definition, such as:

  • Geographic information

  • Controls and defaults

  • Direct and indirect tax rule defaults

  • Tax accounts

The basic tax definition includes controls that you can set to provide the override capability at transaction time. For example, allow users to make manual updates on transaction tax lines, select the Allow override for calculated tax lines and the Allow entry of manual tax lines options. However, to enforce automatic tax calculation on transaction tax lines, don't enable these options.

Use the direct and indirect tax rule defaults to specify the values that apply to the majority of your transactions. Create tax rules to address the exceptions or variations to the defaults. For example, for the Goods and Services Tax (GST) that applies to the supply of most goods and services in Canada, set the Tax Applicability default to Applicable. A luxury tax, on the other hand, is a tax on luxury goods or products not considered essential. As it doesn't apply to most goods and services, set the Tax Applicability direct tax rule default to Not Applicable. Then create a tax rule to make the tax applicable when the product in the transaction satisfies the luxury requirement.

Assign your default tax accounts for the taxes in a tax regime to post the tax amounts derived from your transactions. The tax accounts you define at the tax level, populate either the tax rate accounts or tax jurisdiction accounts for the same ledger, and optionally, the same business unit. You can update these default tax accounts in the tax rate or tax jurisdiction setup.

Note: When you create your tax, the tax recoverable account and tax liability account may be prepopulated from default account values defined in the Rapid Implementation for General Ledger spreadsheet upload. You can override these values.

Minimum Tax Configuration: Points to Consider

Define the minimum tax configuration setup to handle the majority of your tax requirements. As part of defining transaction and withholding taxes, decide the direct and indirect tax rule defaults for the tax and set up the associated tax accounts.

For complex tax requirements, create tax rules that consider each tax requirement related to a transaction before making the final tax calculation.

Setting Up Direct Tax Rule Defaults

The direct tax rule defaults are the default values for the direct tax rule types, which include:

  • Place of supply

  • Tax applicability

  • Tax registration

  • Tax calculation formula

  • Taxable basis formula

The following table describes the direct tax rule defaults and examples:

Direct Tax Rule Default Usage Example

Place of Supply

Indicates the specific tax jurisdiction where the supply of goods or services is deemed to have taken place.

In Canada, the place of supply for Goods and Services Tax (GST) is typically the ship-to location. To handle the majority of GST transactions, select Ship to as your default place of supply.

Note: The corresponding place of supply differs based on the type of transaction. For example, a place of supply of Ship to corresponds to the location of your first-party legal entity for Payables transactions. For Receivables transactions, Ship to corresponds to the location of your customer site.

Tax Applicability

Indicates whether the tax is typically applicable or not applicable on transactions.

The GST in Canada is a tax that applies to the supply of most property and services in Canada. When you create the GST tax, select Applicable as your default tax applicability.

Tax Registration

Determines the party whose tax registration status is considered for an applicable tax on the transaction.

With a direct default of bill-to party, the tax registration of the bill-to party is considered. The application stamps their tax registration number onto the transaction, along with the tax registration number of the first-party legal reporting unit.

Tax Calculation Formula

Represents the typical calculation of tax for a transaction line.

A common formula, STANDARD_TC, is predefined, where the tax amount is equal to the tax rate multiplied by the taxable basis.

Taxable Basis Formula

Represents the amount on which the tax rate is applied.

The following common formulas are predefined:

  • STANDARD_TB: The taxable basis is equal to the line amount of the transaction line.

  • STANDARD_QUANTITY: The taxable basis is equal to the quantity of the transaction line.

  • STANDARD_TB_DISCOUNT: The taxable basis is the line amount of the transaction line less the cash discount.

Note: Use the Manage Tax Rules task to define exceptions to the direct tax rule defaults you define for the tax.
Setting Up Indirect Tax Rule Defaults

The indirect tax rule defaults for a tax include:

  • Tax jurisdiction

  • Tax status

  • Tax recovery rate

  • Tax rate

The following table describes the indirect tax rule defaults and examples:

Indirect Tax Rule Default Usage Example

Tax Jurisdiction

Indicates the most common geographic area where a tax is levied by a specific tax authority.

Value-added tax (VAT) is applicable to the supply of most goods and services in Portugal. For the tax PT VAT, create the default tax jurisdiction as the country of Portugal. To address specific tax regions such as Azores and Madeira, which have lower VAT rates than Portugal, define jurisdiction rates with different VAT rates.

Tax Status

Indicates the taxable nature of the majority of your transactions.

If your operations primarily include zero-rated transactions, select the default tax status as Zero instead of Standard. This setting facilitates tax determination when multiple zero rates are defined to handle different reporting requirements for zero rate usage, such as intra-EU, zero-rated products, or zero-rated exports.

Tax Recovery

Indicates the recovery rate to apply to each recovery type for each applicable tax on a purchase transaction.

In Canada, both federal and provincial components of Harmonized Sales Tax (HST) are 100% recoverable on goods bought for resale. In this case, with two recovery types, you can set up two recovery rate defaults for the HST tax.

Tax Rate

Specifies the default tax rate that is applicable to the majority of your transactions associated with this tax. You can create additional tax setup, such as jurisdiction rates, or create tax rules to set alternate values as required.

HST in Canada is applied at a 13% rate in most provinces that have adopted HST. The exceptions are British Columbia where the rate is 12% and Nova Scotia where the rate is 15%. To satisfy this requirement:

  • Define a single rate of 13% with no jurisdiction.

  • Define a 12% rate and associate it with the British Columbia jurisdiction.

  • Assign a 15% rate to Nova Scotia.

This minimizes the setup required by creating an exception-based setup.

Note: Use the Manage Tax Rules task to define exceptions to the indirect tax rule defaults you define for the tax.
Setting Up Tax Accounts

Set up tax accounts at the tax level. The application automatically copies the tax account combination to the tax rate accounts or tax jurisdiction accounts that you create for the tax for the same ledger and optionally, the same business unit. Any subsequent changes you make to existing tax accounts at the tax level aren't copied to the tax rate or tax jurisdiction level.

Define tax accounts at any of the following levels. The defaulting option is only available at the tax level.

  • Tax

  • Tax jurisdiction

  • Tax rate

  • Tax recovery rate

Note: When you create your tax, the tax recoverable account and tax liability account may be prepopulated from default account values defined in the Rapid Implementation for General Ledger spreadsheet upload. You can override these values.

Set up tax accounts for the following:

Account Description

Ledger and Business Unit

The ledger and business unit for which you are creating the tax accounts.

Interim Tax

An account that records tax recovery or liability until the event prescribed by the statute is complete. Generally, the payment of the invoice is the event that triggers the generation of the tax recovery or liability. You must set up an interim tax account for taxes and tax rates that have a deferred recovery settlement. Once you set up an interim tax account for this tax rate, you can't change the recovery settlement to Immediate.

Tax Recoverable Account

An account that records tax recovery amounts. If you set up recovery rates for a tax that you also self assess, then define a tax recovery account for the associated recovery rates.

Tax Liability Account

An account that relieves tax liability amounts. If you set up recovery rates for a tax that you also self assess, then define a tax liability account for the associated tax rates.

Finance Charge Tax Liability

An account that records the tax liability associated with finance charges that is used as a deduction against overall tax liability.

Nonrecoverable Tax Accounts

Accounts that record tax amounts on earned and unearned discounts and adjustments that you can't claim as a deduction against tax liability.

Expense and Revenue Accounts

Accounts that record net changes generated by adjustments, earned and unearned discounts, and finance charges. Receivables activities such as discounts and adjustments reduce the receivable amount, and are therefore considered an expense.

Defining a Minimum Tax Configuration: Worked Example

The following example illustrates the minimum tax configuration setup to meet the basic requirements in Canada for the Goods and Services Tax (GST). Set up a tax regime for both GST and Harmonized Sales Tax (HST). Create one recovery type for the fully recoverable status of the transaction.

In Canada, GST is a tax that applies to the supply of most property and services in Canada. The provinces of British Columbia, Ontario, New Brunswick, Nova Scotia, and Newfoundland and Labrador, referred to as the participating provinces, combine their provincial sales tax with GST to create HST. Generally, HST applies to the same base of property and services as the GST. Every province in Canada except Alberta has implemented either provincial sales tax or the HST. In countries like Canada, some or all taxes on business transactions for registered companies are recoverable taxes.

The following table summarizes key decisions for this scenario:

Decision to Consider In This Example

What province does ABC Corporation do business in?

Alberta

What taxes are applicable?

GST

Do you want to set up tax accounts at the tax level?

Yes

The tax implications in this scenario are:

  • Five percent (5%) GST is applicable on the sale of goods in Alberta

  • Neither the HST nor provincial sales tax applies in Alberta

  • Place of supply for GST tax is generally based on the place of delivery or ship-to location.

To determine the GST tax in Alberta, perform the following steps:

  1. Define the tax regime

  2. Define the transaction taxes

  3. Create the direct tax rule defaults

  4. Create the indirect tax rule defaults

  5. Enable the tax

Defining the Tax Regime
  1. In the Setup and Maintenance work area, search for the Manage Tax Regimes task. Click Go to Task.

  2. Click Create.

  3. On the Create Tax Regime page, complete the fields as shown in this table:

    Column Value

    Tax Regime Code

    CA GST and HST

    Regime Level

    Country

    Country

    Canada

    Start Date

    1/1/01

    Note: Consider your tax planning carefully before entering the start date. This date must accommodate the oldest transaction that you want to process within this tax regime. After you create the tax regime, you can only update this date with an earlier date. If you enter an end date, you can't update this date after you save the record.

    Tax Currency

    CAD

    Allow cross regime compounding

    Select

  4. On the Configuration Options tab, select the party name that identifies either the legal entity or the business unit or both for which you define the configuration options.

  5. For the Configuration of Taxes and Rules, select the subscription that defines the configuration owner setup that is used for transactions of the legal entity and business unit for this tax regime.

  6. Enter the effective start date for this configuration option. Enter a date range that is within the date range of both the party tax profile and the tax regime.

  7. Click Save and Close.

Defining the Transaction Taxes
  1. In the Setup and Maintenance work area, search for the Manage Taxes task. Click Go to Task.

  2. Click Create.

  3. On the Create Tax page, complete the fields as shown in this table:

    Column Value

    Tax Regime Code

    CA GST and HST

    Configuration Owner

    Global configuration owner

    Tax

    CA GST

    Geography Type

    Province

    Parent Geography Type

    Country

    Compounding Precedence

    10

    Allow override of calculated tax lines

    Select

    Allow multiple jurisdictions

    Select

    Allow creation of multiple of jurisdictions

    Select

    Allow tax recovery

    Select

    Allow tax recovery rate override

    Select

    Primary Recovery Rate

    Standard

Assigning the Tax Accounts
  1. Navigate to the Tax Accounts tab and click Create.

  2. Complete the fields as shown in this table:

    Column Value

    Primary Ledger

    CA Ledger

    Business Unit

    CA Operations

    Tax Recoverable Account

    0001-1500-1100-1000

    Tax Liability Account

    0001-1500-1100-1000

Creating the Direct Tax Rule Defaults
  1. Navigate to the Tax Rule Defaults tab and click Create.

  2. Complete the fields as shown in this table:

    Column Value

    Place of Supply

    Ship to

    Tax Applicability

    Applicable

    Tax Registration

    Ship-from party

    Tax Calculation Formula

    STANDARD_TC

    Taxable Basis Formula

    STANDARD_TB

Creating the Indirect Tax Rule Defaults
  1. On the Tax Rules Defaults tab, select Tax Jurisdiction as your rule type and click Create Default.

  2. On the Create Tax Jurisdiction page, complete the fields as shown in this table:

    Column Value

    Tax Jurisdiction Code

    CA Alberta

    Geography Type

    Province

    Geography Name

    AB

    Set as default jurisdiction

    Select

    Default Start Date

    1/1/01

  3. Click Save and Close.

  4. Select Tax Status as your rule type and click Create Default.

  5. On the Create Tax Status page, complete the fields as shown in this table:

    Column Value

    Tax Status Code

    CA GST STD

    Set as default tax status

    Select

    Default Start Date

    1/1/01

  6. Click Save and Close.

  7. Select Tax Recovery Rate as your rule type and click Create Default.

  8. On the Create Tax Recovery Rate page, complete the fields as shown in this table:

    Column Value

    Tax Recovery Rate Code

    CA GST STD REC RATE

    Recovery Type

    STANDARD

    Rate Percentage

    100

    Effective Start Date

    1/1/01

    Set as Default Rate

    Select

    Default Start Date

    1/1/01

  9. Click Save and Close.

  10. Select Tax Rate as your rule type and click Create Default.

  11. Complete the fields on the Create Tax Rate page as shown in this table:

    Column Value

    Tax Status Code

    CA GST STD

    Tax Rate Code

    CA GST STD RATE

    Tax Rate Type

    Percentage

    Rate Percentage

    5

    Set as Default Rate

    Select

    Default Start Date

    1/1/01

  12. Click Save and Close.

Enabling the Tax
  1. On the Create Tax page, click the Enable tax for simulation option. This lets you verify the tax configuration using the Tax Simulator.

  2. Once you have verified your tax configuration with simulated transactions, click the Enable tax for transactions option. This lets you use this tax in transaction processing.

  3. Click Save and Close.

    For ABC's transactions in the province of Alberta, the following is determined by default:

    • GST tax is applicable and is calculated at a percentage rate of 5%.

    • 100% of the GST can be recovered.

Associated Taxes Setup for a Tax Regime: Explained

When you create a tax regime, you specify the options and defaults available to the taxes associated with the tax regime. You also enable the features that apply to the tax regime and its taxes.

The options appearing in the Associated Taxes Setup Information region on the Edit Tax Regime page result from the features enabled and the options selected at the tax level. These options include:

  • Allow multiple jurisdictions

  • Allow tax recovery

  • Allow tax exceptions

  • Allow tax exemptions

The preceding options always appear as read-only check boxes in the Associated Taxes Setup Information region. The option appears as selected if you selected the option in one of the taxes within this tax regime. If you didn't select the option in one of the taxes, the option appears as not selected.

For example, suppose you have a California county sales tax that applies to all counties, so you need a tax with multiple jurisdictions. In this case, enable the Multiple Jurisdictions feature at the tax regime level and select the Allow multiple jurisdictions option at the tax level. When you open the Edit Tax Regime page, Associated Taxes Setup Information region for this tax regime, the Allow multiple jurisdictions option appears as selected.

Manage Controls and Defaults

Tax Regime Controls and Defaults: Points to Consider

A tax regime associates a common set of default information, regulations, fiscal classifications, and optionally, registrations, to one or more taxes. Set up tax regimes in each country and geographical region where you do business and where a separate tax applies.

The tax regime setup details include:

  • Designating the geography to which taxes within a tax regime apply

  • Defining the controls and defaults that apply to taxes and associated lower level information

  • Specifying configuration options and service subscriptions

Designating the Geography

The common tax regime setup is one tax regime per country per tax type. However, you can also have tax regimes based on parts of a country or more than one country. Select the regime level as:

  • Country: The tax regime is applicable to a specific country.

  • Tax zone: The tax regime is applicable to parts of a country or multiple countries. Enter the tax geography type and tax geography name associated with the group of countries or the tax zone that you want. The tax geography type and tax geography name correspond to the tax zone type and tax zone respectively.

If applicable, designate the tax regime as a parent regime or indicate the parent regime name if the tax regime belongs to a parent regime. Use a tax regime defined as a parent tax regime to group other nonparent tax regimes for reporting purposes.

Defining Controls and Defaults

Set tax-level controls to enable the options that you want to make available to the taxes in this tax regime. If necessary, you can disable the options that you enable here for individual taxes within the tax regime. Enter default values for the taxes in this tax regime. You can update the default values at the tax level. If you disable a controlled option at the tax regime level it is not available as an option at the tax level.

The following table describes the defaults and controls available at the tax regime level.

Defaults Region

Field Description Default Derived from Default Appears on Controls

Tax Currency

The default currency of the taxes within this tax regime

None

Tax

None

Minimal Accountable Unit

The minimal unit of currency that is reported to the tax authority, for example, 0.05 GBP indicates that 5 pence is the minimal unit

None

Tax

None

Tax Precision

A one digit whole number to indicate the decimal place for tax rounding

None

Tax

None

Tax Inclusion Method

A method that describes whether the line amount includes tax or excludes tax

None

Tax

None

Conversion Rate Type

The specific exchange rate table that is used to convert one currency into another. For example, the Association of British Travel Agents exchange rate used in the travel industry

None

Tax

None

Rounding Rule

The rule that defines how rounding is performed on a value. For example, up to the next highest value, down to the next lower value, or to the nearest value

None

Tax

None

Allow tax rounding override

Allow the override of the rounding defined on the tax registration records

None

Tax

None

Reporting Tax Authority

The default tax authority to whom the tax reports are sent

None

  • Tax

  • Tax registration

None

Collecting Tax Authority

The default tax authority to whom the tax is remitted

None

  • Tax

  • Tax registration

None

Use legal registration number

Option that controls whether the tax registration number is the same as the legal registration number of the party

None

Tax

None

General Controls Region

Field Description Default Derived from Default Appears on Controls

Allow override and entry of inclusive tax lines

Option that controls whether you can override and enter inclusive or exclusive line amounts

None

Tax

None

Use tax reporting configuration

Option that controls whether the tax reporting details are available on the first-party tax registration record for this tax regime

None

None

Controls whether you can enter tax reporting configuration details on the tax registration for this tax regime for your first parties

Compounding Level Controls Region

Field Description Default Derived from Default Appears on Controls

Allow cross regime compounding

Option that controls whether cross regime compounding is needed for this tax regime

None

None

Controls whether this tax regime is compounded based on the tax calculated from another tax regime

Compounding Precedence

Defines the order in which taxes within the compound tax regimes need to be calculated. A tax within a tax regime with a lower value is calculated first.

None

None

Controls the order in which taxes within tax regimes are calculated

Note: Oracle Fusion Tax provides features at the tax regime level to streamline your implementation by selecting the features that are applicable to the tax regime in scope. You must enable the features to use that functionality for the tax regime and related taxes.
Specifying Configuration Options and Service Subscriptions

Set up configuration options to associate tax regimes with the parties in your company that have a tax requirement under these tax regimes. You can set up tax configuration options when you create a tax regime or when you create a party tax profile for a first-party legal entity or business unit. Both tax regime and party tax profile setup flows appear and maintain the same party and tax regime association. Configuration options only apply to tax regimes directly linked to taxes and not to tax regimes that are used to group other tax regimes.

Oracle Fusion Tax lets you use the tax services of external service providers for tax calculation of US Sales and Use Tax on receivables transactions. The setup for provider services is called a service subscription. A service subscription applies to the transactions of one configuration option setup for a combination of tax regime and legal entity or business unit.

Note: The level of detail of tax rounding definitions for the taxes in the tax regime must equal or exceed the level of detail of the service provider tax rounding definitions.

Inclusive Taxes: Explained

Calculating tax on a transaction as inclusive of the line amount is generally a business decision. This decision is based on the relationship between the transacting parties and the items or taxes involved.

Taxes applicable on a transaction are made inclusive of the item line amount either:

  • Manually

  • Automatically

Manual Approach

In the manual approach, you access the calculated tax lines on a transaction and select the Inclusive option. This action includes the calculated tax amount with the item value.

However, this option is controlled through two factors:

  • Privileges are assigned to the users for accessing and editing the calculated tax lines.

  • Setup restrictions are applied to edit the Inclusive option on the calculated tax lines.

Automatic Approach

In the automatic approach, you can configure the tax setup and calculate the tax on a transaction as inclusive of the item line amount. Since the tax legislation and the business relationship between the transacting parties primarily drive this requirement, the option for configuring the inclusiveness is made available on the tax and tax rate definition and the third party and legal reporting unit tax profiles on the tax registration and general data tabs. The tax determination process uses a hierarchy approach to evaluate the defined setup and applies the inclusiveness option on the transaction.

In tax setup, the options to choose for applying the inclusiveness on a transaction are:

  • Standard noninclusive handling: This option calculates the taxes as exclusive of the given transaction line amount.

  • Standard inclusive handling: This option calculates the taxes as inclusive of the given transaction line amount.

  • Special inclusive handling: This option calculates the taxes as inclusive of the given transaction line amount, but the calculation methodology differs from the standard inclusive process.

The following table illustrates the calculation methodology used with each of these options when a transaction line amount is 1000 USD and the applicable tax rate is 10% of the taxable basis amount. For example, line amount:

Method Calculation Taxable Basis Amount Tax Amount Transaction Line Amount

Standard Noninclusive

1000 USD * 10/100

1000 USD

100 USD

1100 USD

Standard Inclusive

1000 USD * 10/110

909.09 USD

90.91 USD

1000 USD

Special Inclusive

1000 USD * 10/100

900 USD

100 USD

1000 USD

Manage Configuration Options and Service Subscriptions

Configuration Options: Explained

Set up configuration options to associate tax regimes with the parties in your company that have a tax requirement under these tax regimes.

There are two fundamentally different approaches to tax configuration options, namely:

  • Using tax configuration setup defined within Oracle Fusion Tax.

  • Using an external tax service provider.

Using Tax Configuration Setup Defined Within Oracle Fusion Tax

Use the tax configuration setup in Oracle Fusion Tax to calculate, record, and account for transaction taxes on transaction taxable transactions.

The following concepts control how this setup is managed, used, and shared:

  • Tax configuration owner

  • Tax content subscription

  • Existing tax option

Tax Configuration Owner

The tax configuration owner is a business unit, legal entity, or the global configuration owner that owns the data. The global configuration owner is an abstract owner. It is used to define the owner of content that can be shared by any business units and first-party legal entities.

Identify a specific first-party legal entity as a parent first-party organization. This allows the configuration to be owned by a specific first party and shared by other parties. You can then share this setup with another first-party legal entity or business unit for their transactions. Use a parent first-party organization tax configuration to share among a group of first-party organizations. However, you still have the tax setup managed by a single first-party organization.

For global configuration owner, if you're assigned the Create Tax Regime privilege, you have update rights to all tax configuration data maintained by the global configuration owner.

Tax Content Subscription

Use tax content subscriptions to define which configuration owner's setup is used for transactions for a specific first-party legal entity or business unit for a specific tax regime. Also, use tax content subscriptions to specify whether any shared content can be overridden by the subscribing party to allow unique, separate setup for certain tax content.

Party override is permitted for the following setup:

  • Tax

  • Tax status

  • Tax rate

  • Tax recovery rate

  • Tax rules

    Do this indirectly by adding higher priority rules specific to the subscribing first-party legal entity or business unit.

The content subscription options are:

Tax Content Subscription Description

Common configuration

For tax processing, the tax determination process uses the shared tax content defined and maintained by the global configuration owner.

Party-specific configuration

The specified first-party organization defines and maintains its own tax content. For tax processing, the tax determination process uses only the tax content owned by the specific first-party legal entity or business unit.

Common configuration with party overrides

This option is similar to the common configuration because it lets you use the tax content owned by the global configuration owner. However, you can also maintain party-specific content which is used in preference to the common configuration content. In the absence of tax content owned by the specific first-party organization, the tax determination process uses the tax content owned by the global configuration owner.

Parent first-party organization with party overrides

This option is similar to the common configuration with party override subscription with one difference. The tax content here is owned by a specific first-party legal entity instead of the global configuration owner.. You can override the specific first-party setup.

A similar concept is used to define where you use tax exceptions for a specific tax configuration. The tax subscription option available for product exceptions is dictated to some extent by the main tax content subscription as follows:

Options Defined for Tax Content Subscription Content Subscription Options Available for Product Exceptions Description

Common configuration

Common configuration

For tax processing, the tax determination process uses tax exceptions defined and maintained by the global configuration owner.

Party-specific configuration

Party-specific configuration

The specified first-party organization defines and maintains its own tax exceptions. For tax processing, the tax determination process uses only the tax exceptions owned by the specific first-party organization.

Common configuration with party overrides

Common configuration

For tax processing, the tax determination process uses tax exceptions defined and maintained by the global configuration owner.

Common configuration with party overrides

Party-specific configuration

The specified first-party organization defines and maintains its own tax exceptions. For tax processing, the tax determination process uses only the tax exceptions owned by the specific first-party organization.

Parent first-party organization with party overrides

Party-specific configuration

The specified first-party organization defines and maintains its own tax exceptions. For tax processing, the tax determination process uses only the tax exceptions owned by the specific first-party organization.

Set up tax configuration options when you create a tax regime or when you create a party tax profile for a first-party legal entity or business unit. Both setup flows display and maintain the same party or regime definitions. Specify effective start and end dates to identify which configuration should be used based on the transaction date. You can enable the business unit so that Oracle Fusion Tax automatically uses the configuration of the legal entity. Once you set this option the application records the date it occurred as the start date. This date is used and compared to the transaction dates to identify if the application uses the legal entity subscription in preference to the subscription of the business unit. The specific first-party legal entity that is used is defined by the legal entity associated with the transaction.

Existing Tax Option

Copy a tax from an existing tax in the Manage Taxes page to share tax registrations and tax jurisdictions. This will create two versions of the same tax, owned by two different tax configuration owners each with their own tax statuses, tax rates, and tax rules. For example, this is useful when you set up US sales and use tax that requires a significant number of tax registrations and tax jurisdictions.

Using External Tax Service Provider

Oracle Fusion Tax lets you use the tax services of external service providers for tax calculation of US Sales and Use Tax on Receivables transactions. Oracle Fusion Tax provides transparent integration between the external provide tax service and Oracle Fusion Receivables.

You can use the tax services of these external service providers:

  • Taxware, LP: a First Data Company

  • Vertex, Inc.

The setup for provider services is called a service subscription. A service subscription applies to the transactions of one configuration option setup for a combination of tax regime and legal entity or business unit. Set up service subscriptions when you create a tax regime or when you create a party tax profile for a first-party legal entity or business unit. Specify effective start and end dates to identify which configuration should be used based on the transaction date.

Content Subscriptions: Critical Choices

Select which of the following tax content subscription options to use to optimize your tax setup:

  • Whether to use service subscriptions versus Oracle Fusion tax content.

  • What type of tax configuration options to use.

  • When to change from business unit to using tax configuration at the first party legal entity.

  • When to use create from an existing tax option.

Using a Service Subscription Versus Oracle Fusion Tax Content

Use the tax services of external service providers when you require tax content for Receivables transactions for a significant number of tax jurisdictions. Do not use a service provider if their use isn't needed to support US Sales and Use Tax regimes or you need to create and maintain tax regimes outside of the Unites States.

You can use the tax services of these external service providers:

  • Taxware, LP: a First Data Company

  • Vertex, Inc.

Using Tax Configuration Options

Create and maintain your tax content in Oracle Fusion Tax if you decide not to use an external service provider or you need to create tax content for tax regimes outside the US.

Once the decision is made to use Oracle Fusion Tax, you must choose the level of tax configuration options. Sharing tax content prevents the need for duplicate maintenance with its inefficiencies and potential inconsistencies. Consider these scenarios and options:

Scenario Option

You have a single central corporate tax center responsible for maintenance of tax setup for all legal entities and business units.

Use the common configuration with party override option. This allows a single tax setup to be created and maintained by the corporate tax center.

You need strict control over who can maintain the tax content.

Use the common configuration option. By not allowing party override, you restrict the access to the global configuration owner to an authorized user who can maintain all of the tax content.

You have regional centers responsible for tax content.

Use the parent first party configuration with party override option. This permits a regional setup with an actual or logical parent legal entity to be created and maintained by each regional center.

Even if there is no obvious need to share tax configuration, for example, there is only a single first party legal entity operating in each tax regime, significant business events such as takeovers or mergers may mean that there could be a future need to share content. In this case, the original first party legal entity can act as the configuration owner and then any subsequent first party can subscribe to the first party's content using the parent first party configuration with party override. Alternatively, set up the original tax content using global configuration owner to prepare for any future business event that requires tax content to be shared.

Changing from Business Unit to Using Tax Configuration at the First Party Legal Entity

If you standardize your tax setup across all business units for a given legal entity, consider configuring and using tax setup at the legal entity level. Set the Use subscription of the legal entity option on the business unit tax profile. Oracle Fusion Tax records the date this occurs and compares it to the transaction date to identify if the legal entity subscription should be used in preference to the subscription to the business unit.

Using Create from an Existing Tax Option

Create a tax from an existing tax when you need to share tax jurisdictions and tax registrations. Maintain the tax jurisdictions and tax registrations once for taxes with the same name within the same tax regime owned by different configuration owners.

Tax Configuration Options in the Tax Determination Process: How They're Used

At transaction time, the owner of the transaction derives the configuration options that are used.

When you enter a transaction for a given first-party organization, the tax data applied to that transaction is determined by the:

  • Configurations defined for the combination of that first-party organization (business unit or first-party legal entity)

  • Tax regime derived from the addresses or from the tax classification codes used on the transaction

Settings That Affect the Application of Tax Data on Transactions

Use tax content subscriptions to define which configuration owner's setup is used for transactions for a specific first-party legal entity or business unit for a specific tax regime. Also, use tax content subscriptions to specify whether any shared content can be overridden by the subscribing party to allow unique, separate setup for certain tax content.

Tax content subscription options are:

  • Common configuration

  • Party-specific configuration

  • Common configuration with party overrides

  • Parent first-party organization with party overrides

How Tax Data Is Determined

Based on the defaults and tax rules you have defined, tax data is applied to transactions as follows:

Configuration for Taxes and Rules Option Tax Content Available

Common configuration

  • The tax determination process uses only the tax content owned by the global configuration owner.

  • If you manually override tax information on the transaction, only the tax content owned by the global configuration owner is displayed in the list of valid values available.

Party-specific configuration

  • The tax determination process uses only the tax content owned by the first-party organization, business unit or fist party legal entity, for whom the transaction is being entered.

  • If you manually override tax information on the transaction, only the tax content owned by the first-party organization is displayed in the list of valid values available.

Note: For the first-party organization it can be the business unit owning the tax content or the first-party legal entity-owned setup depending on the specific subscription being used.

Common configuration with party overrides

  • The tax determination process uses any tax content owned by the first party for whom the transaction is being entered. In the absence of tax content owned by that first-party organization, the tax determination process uses tax content owned by the global configuration owner.

  • If you manually override tax information on the transaction, both the override tax content owned by the specific first party and the tax content owned by the global configuration owner that you have not overridden are displayed in the list of valid values available.

Parent first-party organization with party overrides

  • The tax determination process uses any tax content owned by the first party for whom the transaction is being entered. In the absence of tax content owned by the first-party organization, the tax determination process uses tax content owned by the parent first-party organization.

  • If you manually override tax information on the transaction, both the override tax content owned by the specific first party and the tax content owned by the designated parent first-party organization that you haven't overridden are displayed in the list of valid values available.

If you are using product exceptions, those exceptions are applied to the transactions as shown in the following table:

Configuration for Product Exceptions Tax Exceptions Available

Common configuration

The tax determination process uses only the tax exceptions defined and maintained by the global configuration owner.

Party-specific configuration

The tax determination process uses only the tax exceptions owned by the specific first-party organization

Setting Up Tax Configuration Options: Worked Example

This example demonstrates how you set up the appropriate tax configuration options for your company that has three regional centers. These centers are responsible for tax setup and maintenance among other corporate activities. Each of these regional corporate centers is associated with a first-party legal entity and business unit.

Your company has their regional centers in:

  • North America (NAM), based in Redwood City, California, US

  • Asian and Pacific (APAC), based in Melbourne, Australia

  • Europe, Middle East, and Africa (EMEA), based in London, UK

Each country has a single first-party legal entity with a single business unit, except for:

  • Countries with the regional corporate centers have a first-party legal entity and business unit for each corporate center.

  • Sales, marketing, and manufacturing organization have a first-party legal entity and business unit.

Create tax regimes for each country and the appropriate tax configuration options.

Prerequisites

To create the appropriate tax configurations, you must set up the following:

  1. The legal entities for:

    First-Party Legal Entity Country

    EMEA LE

    UK

    GB LE

    UK

    FR LE

    FR

    DE LE

    DE

    APAC LE

    AU

    AU LE

    AU

    SI LE

    SI

    NZ LE

    NZ

    NAM LE

    US

    US LE

    US

    CA LE

    CA

  2. The sales, marketing, and manufacturing organization's business unit uses the tax configuration of the legal entity.

  3. The relevant tax regimes for each country's tax include:

    Region Country Tax Regime Tax

    EMEA

    United Kingdom

    GB VAT

    GB VAT

    EMEA

    France

    FR VAT

    FR VAT

    EMEA

    Germany

    DE VAT

    DE VAT

    APAC

    Australia

    AU GST

    AU GST

    APAC

    Singapore

    SI VAT

    SI VAT

    APAC

    New Zealand

    NZ VAT

    NZ VAT

    NAM

    United States

    US SALES TAX

    • US STATE SALES TAX

    • US COUNTY SALES TAX

    • US CITY SALES TAX

    NAM

    Canada

    CA HST and GST

    • CA HST

    • CA GST

Setting Up Tax Configuration Options
  1. On the Create Legal Entity Tax Profile page, select EMEA LE in the Legal Entity field. In the Configuration Options tab enter:

    Field Value

    Tax Regime Code

    GB VAT

    Configuration for Taxes and Rules

    Party-specific configuration

    Configuration for Product Exceptions

    Party-specific configuration

    Parent First-Party Organization

    Blank

    Effective Start Date

    01-Jan-01

    Click Save and Create Another.

  2. Select GB LE in the Legal Entity field. In the Configuration Options tab enter:

    Field Value

    Tax Regime Code

    GB VAT

    Configuration for Taxes and Rules

    Parent first-party with party overrides

    Configuration for Product Exceptions

    Parent first-party organization

    Parent First-Party Organization

    EMEA LE

    Effective Start Date

    01-Jan-01

    Click Save and Create Another.

  3. Select FR LE in the Legal Entity field. In the Configuration Options tab enter:

    Field Value

    Tax Regime Code

    FR VAT

    Configuration for Taxes and Rules

    Parent first-party with party overrides

    Configuration for Product Exceptions

    Parent first-party organization

    Parent First-Party Organization

    EMEA LE

    Effective Start Date

    01-Jan-01

    Click Save and Create Another.

  4. Select DE LE in the Legal Entity field. In the Configuration Options tab enter:

    Field Value

    Tax Regime Code

    DE VAT

    Configuration for Taxes and Rules

    Parent first party with party overrides

    Configuration for Product Exceptions

    Parent first-party organization

    Parent First-Party Organization

    EMEA LE

    Effective Start Date

    01-Jan-01

    Click Save and Create Another.

  5. Select APAC LE in the Legal Entity field. In the Configuration Options tab enter:

    Field Value

    Tax Regime Code

    AU GST

    Configuration for Taxes and Rules

    Party-specific configuration

    Configuration for Product Exceptions

    Party-specific configuration

    Parent First-Party Organization

    Blank

    Effective Start Date

    01-Jan-01

    Click Save and Create Another.

  6. Select AU LE in the Legal Entity field. In the Configuration Options tab enter:

    Field Value

    Tax Regime Code

    AU GST

    Configuration for Taxes and Rules

    Parent first party with party overrides

    Configuration for Product Exceptions

    Parent first-party organization

    Parent First-Party Organization

    APAC LE

    Effective Start Date

    01-Jan-01

    Click Save and Create Another.

  7. Select SI LE in the Legal Entity field. In the Configuration Options tab enter:

    Field Value

    Tax Regime Code

    SI VAT

    Configuration for Taxes and Rules

    Parent first party with party overrides

    Configuration for Product Exceptions

    Parent first-party organization

    Parent First-Party Organization

    APAC LE

    Effective Start Date

    01-Jan-01

    Click Save and Create Another.

  8. Select NZ LE in the Legal Entity field. In the Configuration Options tab enter:

    Field Value

    Tax Regime Code

    NZ VAT

    Configuration for Taxes and Rules

    Parent first party with party overrides

    Configuration for Product Exceptions

    Parent first-party organization

    Parent First-Party Organization

    APAC LE

    Effective Start Date

    01-Jan-01

    Click Save and Create Another.

  9. Select NAM LE in the Legal Entity field. In the Configuration Options tab enter:

    Field Value

    Tax Regime Code

    US SALES TAX

    Configuration for Taxes and Rules

    Party-specific configuration

    Configuration for Product Exceptions

    Party-specific configuration

    Parent First-Party Organization

    Blank

    Effective Start Date

    01-Jan-01

    Click Save and Create Another.

  10. Select US LE in the Legal Entity field. In the Configuration Options tab enter:

    Field Value

    Tax Regime Code

    US SALES TAX

    Configuration for Taxes and Rules

    Parent first party with party overrides

    Configuration for Product Exceptions

    Parent first-party organization

    Parent First-Party Organization

    NAM LE

    Effective Start Date

    01-Jan-01

    Click Save and Create Another.

  11. Select CA LE in the Legal Entity field. In the Configuration Options tab enter:

    Field Value

    Tax Regime Code

    CA GST and PST

    Configuration for Taxes and Rules

    Parent first party with party overrides

    Configuration for Product Exceptions

    Parent first-party organization

    Parent First-Party Organization

    NAM LE

    Effective Start Date

    01-Jan-01

    Click Save and Close.

FAQs for Define Tax Regimes

What's a service subscription?

A service subscription is the setup for provider services. It applies to the transactions of one configuration option setup for a combination of tax regime and legal entity or business unit. You can use the tax services of certain external service providers like Taxware LP and Vertex Inc.for tax calculation of US Sales and Use Tax on Oracle Fusion Receivables transactions.

Why are controls and defaults important?

Throughout Oracle Fusion Tax care is taken to minimize your effort in creating setup. One way of doing this is the extensive use of defaulting so that you can enter your data once and use the defaults that appear on the subordinate or child records where applicable. For example, many values you enter on the tax regime appear as defaults on each tax that is associated to that tax regime. Generally, you can override the data where necessary if the defaulted value isn't correct.

Also, to ensure maximum flexibility, as well as to ensure that the accuracy and integrity of the data and transactions are maintained, Oracle Fusion Tax makes extensive use of data-driven controls that enable and control how tax functionality works. For example, you have the requirement to set up tax recovery for value-added tax (VAT) processing. Enable the Allow tax recovery option on the tax record so you can set up tax recovery rates for this type of tax.

Manage Payment Terms

Payment Terms: Explained

Payment terms are used to automatically create invoice installments. You can define payment terms to create multiple installments and multiple levels of discounts.

Payment terms consist of one or more lines, each of which creates one invoice installment. When you define a payment term, you can specify either percentages or fixed amounts. A payment term line can have up to three discounts. Each line and corresponding installment have a due date and up to three discount dates. Each line and corresponding installment also have due or discount amounts. You can assign a payment term to one or more sets to share that payment term across business units.

This figure shows the components of a payment term.

Payment term components

Tip: If you change the payment terms on an invoice, the installments are automatically recalculated and you must reenter any manual adjustments made previously.

Payment Terms Due Dates and Discount Dates

Payment terms due dates and discount dates are based on one of the following methods:

  • Fixed Date: A specific day, month, and year that an installment is due for payment.

  • Days: A number of days added to the invoice terms date.

  • Calendar: A Payables calendar that's divided into periods. You can assign a due date to the period that includes the invoice terms date. You can assign due dates to avoid weekends, holidays, and so on. You can't assign calendar-based terms to an invoice if a period isn't defined for the terms date.

  • Day of Month: A type of payment term with the following attributes:

    • Day of Month: A specific day of the month when an installment is due for payment. For example, enter 15 to schedule payment on the fifteenth day of the month. Enter 31 to schedule payment for the last day of the month, including months with less than 31 days.

    • Cutoff Day: The day of the month after which the installment due and discount dates advance to a future month. If you don't specify a cutoff day, the current accounting month is used to determine due and discount dates.

    • Months Ahead: The number that's used to determine the month the installment is due. If you enter 0 and the terms date is the same as, or later than, the cutoff day, the installment is due the following month.

      For example, a payment term has a Cutoff Day of 11, the Day of Month is 15, and Months Ahead is 0. If you enter an invoice with a terms date of January 12, the installment is due February 15. If you enter an invoice with a terms date of January 10, the installment is due January 15. If the terms date is January 12 and Months Ahead is set to 1, the installment is due March 15.

Note: Only due dates, not discount dates, can be based on a calendar.

Default Payment Terms

If you enter an Identifying PO on an invoice, the purchase order provides the default payment terms for the invoice. If you don't enter an Identifying PO, the supplier site provides the default payment terms. If the supplier site doesn't have payment terms, the payment terms from the Manage Invoice Options page are used. You can override the default payment terms on any invoice.

This figure shows how payment terms flow to the invoice.

Payment terms flow for an invoice

Manage Units of Measure

Units of Measure, Unit of Measure Classes, and Base Units of Measure: How They Fit Together

Define units of measure, unit of measure classes, and base units of measure for tracking, moving, storing, and counting items.

The figure below shows that the unit of measure class named 'Quantity' contains the units of measure: Box of 8, Box of 4, and Each. The unit of measure named Each is assigned as the base unit of measure.

Relationship between a unit of measure class and its
units of measure, one of which is defined as the base unit of measure

Units of Measure Classes

Units of measure classes represent groups of units of measure with similar characteristics such as area, weight, or volume.

Units of Measure

Units of measure are used by a variety of functions and transactions to express the quantity of items. Each unit of measure you define must belong to a unit of measure class.

Base Units of Measure

Each unit of measure class has a base unit of measure. The base unit of measure is used to perform conversions between units of measure in the class. The base unit of measure should be representative of the other units of measure in the class, and must be the smallest unit. For example, you could use CU (cubic feet) as the base unit of measure for a unit of measure class called Volume.

Assigning Base Units of Measure to Unit of Measure Classes: Examples

Each unit of measure class must have a base unit of measure.

Scenario

This table lists examples of unit of measure classes, the units of measure in each unit of measure class, and base unit of measure. Note that each base unit of measure is the smallest unit of measure in its unit of measure class.

Unit of Measure Class Units of Measure Base Unit of Measure

Quantity

dozen

box

each

each

Weight

pound

kilogram

gram

gram

Time

hour

minute

second

second

Volume

cubic feet

cubic centimeters

cubic inches

cubic inches

Defining Unit of Measure Standard Conversions: Examples

A unit of measure standard conversion specifies the conversion factor by which the unit of measure is equivalent to the base unit of measure.

Scenario

This table lists examples of unit of measure classes, one unit of measure included in each class, the base unit of measure for the unit of measure class, and the conversion factor defined for the unit of measure.

Unit of Measure Class Unit of Measure Base Unit of Measure Conversion Factor

Quantity

dozen

each

12

(1 dozen = 12 each)

Weight

pound

gram

454

(1 pound = 454 grams)

Time

minute

second

60

(1 minute = 60 seconds)

FAQs for Units of Measure

What's a unit of measure standard conversion?

A unit of measure standard conversion defines the conversion factor by which the unit of measure is equivalent to the base unit of measure that you defined for the unit of measure class. Defining a unit of measure standard conversion allows you to perform transactions in units other than the primary unit of measure of the item being transacted. The standard unit of measure conversion is used for an item if an item-specific unit of measure conversion has not been defined.

What's a UOM interclass conversion?

A UOM interclass conversion defines the conversion between the source base unit of measure ("From Base UOM") in one unit of measure class ("From Class") and the destination base unit of measure ("To Base UOM") in a different unit of measure class ("To Class").

For example, the item is gasoline. The From Base UOM (of the From Class called "volume") is liters. The To Base UOM (of the To Class called "quantity") is Barrels. The conversion is 158.76 liters (volume) to 1 barrel of oil (quantity).

You cannot create the interclass and intraclass conversions when building the standard conversions. The UOM must be defined prior to creating Items. Items must be defined prior to creating interclass or intraclass conversions.

What's a UOM intraclass conversion?

A UOM intraclass conversion specifies the conversion between a unit of measure (the "From UOM") and the base unit of measure of the same class.

For example, the item is soda pop. The unit of measure class is Quantity. The From UOM is Case (CS). The base unit of measure is Each (EA). The conversion is 24, to specify that 1 CS = 24 EA.

Define Corporate Procurement Cards

Creating Corporate Cards: Points to Consider

You can create corporate cards in two ways. You can choose either of the following actions at different points in time or you can do both at the same time:

  • Automatic corporate card creation

  • Manual corporate card creation

Automatic Corporate Card Creation

Automatic corporate card creation applies only to corporate cards that are issued to employees and used primarily for travel expenses. New employees are typically given new corporate cards, but the information on the cards isn't manually entered into the application at that time.

You can create corporate cards automatically by selecting an employee matching rule for new cards on the Upload Rules tab of the Create Corporate Card Program page. Then, when the corporate card transaction file containing transactions for the new card is uploaded to Expenses for the first time, the corporate card transaction upload and validation process uses the matching rule to match the new corporate card to the new employee.

Using the specified employee matching rule, the application automatically enters the transaction data for the new corporate card and associates it with the applicable employee. If the employee matching rule fails to identify a match, the application leaves the corporate card unassigned.

Note: If desirable, each corporate card program can have a different matching rule.
Tip: To reduce or eliminate manual effort, automatic corporate card creation is recommended.

Manual Corporate Card Creation

You can manually create corporate cards for employees in the Create Corporate Card dialog box where you enter the following data:

  • Corporate card program

  • Company account name

  • Corporate card number

  • Employee name and number

  • Expiration date

  • Maximum amount per transaction: Applicable for procurement cards only

  • Maximum amount per billing period: Applicable for procurement cards only

Note: Manual creation of corporate cards is the exception, rather than the rule.

Corporate cards are company account-specific. For example, if an employee transfers to another organization within your company and the organization belongs to another company account, you must create the corporate card again with the applicable company account name.

Define Common Payables and Procurement Options

Common Options for Payables and Procurement: Critical Choices

For invoice business units, you can set options common to the procure-to-pay business flow on the Manage Common Options for Payables and Procurement page.

The common options are grouped into the following categories:

  • Default distributions

  • Automatic offsets

  • Currency conversion

  • Expense accruals

  • Self-billed invoices

  • Legal entity information

Default Distributions

Default distributions are used to define accounts for payables transaction accounting.

Note: You can also specify some default distributions for a supplier on the Edit Site page.

Offset Segments

If you enter invoices for expenses or asset purchases with more than one primary balancing segment value, consider using automatic offsets. Automatic offsets balance accounting entries for Oracle Fusion Payables transactions. If you don't use automatic offsets, an invoice transaction has a single liability accounting entry and a payment transaction has a single cash accounting entry.

Currency Conversion

This table describes the options you can set for currency conversion.

Option Description

Require conversion rate entry

If enabled, you must provide a conversion rate whenever you enter an invoice or a payment in a currency other than the ledger currency. If you maintain daily rates, the rate is automatically supplied based on the date and rate type that you enter. If daily rates don't exist for that date and rate type, you can't enter or save the transaction. If the conversion rate type is User, then you must enter a conversion rate. You can't create accounting entries for, or pay foreign currency invoices without conversion rates.

If you don't enable this option, you can enter conversion rates manually on invoices and payments, or submit the Apply Missing Conversion Rates process. When you create a bills payable document, you must still provide a maturity rate, rate type, and date.

Conversion rate type

This setting provides the default conversion rate type when you enter invoices or create payments. You can change the conversion rate type at invoice entry or payment creation time.

Realized Gain or Loss Distributions

These distributions represent the default realized gain and loss accounts for payments from each of your bank accounts. If the conversion rate changes between invoice entry and payment time, the realized gain or loss is automatically calculated and recorded to these accounts.

Expense Accruals

Determine when to accrue for expense items.

Self-Billed Invoices

This table lists the options for self-billed invoices.

Option Description

Gapless invoice numbering

You can enable gapless, that is, no breaks in numbering, invoice number generation for your buying organization during pay on receipt processing. You can enable gapless numbering for the entire business unit with this setting or limit it to a supplier site.

Buying Company Identifier

A unique identifier that's included in the invoice number created by the pay on receipt process and in the debit memo number from returned receipts.

Legal Entity Information

This table describes the options for legal entity information.

Option Description

VAT Registration Member State

If your company operates in a member state of the European Union, select the country.

VAT Registration Number

If your company operates in a member state of the European Union, enter the value-added tax (VAT) registration number for your organization.

Bill-to Location

Enter the bill-to location to provide default values. The application uses the bill-to location to derive legal entity information.

Note: You can use the Create Chart of Accounts, Ledger, Legal Entities, and Business Units in Spreadsheet task to automate common options setup.

Manage Procurement Document Numbering

Define Procurement Document Numbering: Critical Choices

Organizations need the ability to define procurement document numbers based on document type. The sequence may differ by legal entity or business unit. Here are some considerations when defining a document numbering sequence.

If a document number sequence is not defined in advance, the application creates it when the first transaction is created for that document type and legal entity or business unit combination. The application starts the document number with 1.

You can define procurement document numbering using the Manage Procurement Document Numbering page. You can find the page from the Setup and Maintenance work area, in the Procurement offering, Procurement Foundation functional area, Manage Procurement Document Numbering task.

Determinant Type

Document numbers are typically based on the sold-to legal entity, the procurement business unit, or the requisition business unit. On the Manage Procurement Document Numbering page this is the Determinant Type.

The determinant type is fixed for a given document type. This table lists procurement document types and their respective determinant types.

Document Type Determinant Type

Purchase Order

Sold-to Legal Entity

Purchase Agreement

Procurement BU

Requisition

Requisitioning BU

Negotiation

Procurement BU

Assessment

Procurement BU

Initiative

Procurement BU

Qualification

Procurement BU

Determinant Value

You can define a unique document number sequence for a combination of document type, determinant type and the determinant value, where determinant value represents a specific legal entity or business unit.

Manage Procurement Category Hierarchy

How can I use the procurement category hierarchy to create reports?

Use the Reports and Analysis work area to create a business intelligence report. You can use the Category dimension to set up reports based on the levels of the procurement category hierarchy. The dimension is available in reporting subject areas for requisitions, purchasing documents, and negotiations.

Note: You can only set up reports based on the top 10 levels of the hierarchy.