How Payments Are Escheated

When checks issued for payments to suppliers, or to employees for expense payments, haven’t been presented for clearing during a specific time period, you should escheat them and transfer the amount to the appropriate local authority.

Oracle Payables lets you identify and escheat unclaimed checks and transfer their value to the appropriate escheatment authority. You can also generate a report with a list of payments that are escheated or initiated for escheatment.

Only payments done using a payment process profile configured with the processing type Printed are eligible for escheatment. You can’t escheat the following types of payments.

• Cross-business unit payments
• Manual payments
• Refunds
• Prepayments
• Netting payments

How You Escheat a Payment

Identify payments that have gone stale and escheat them. Here’s how you do it.

• Go to Navigator > Payables > Payments.
• In the Tasks panel tab, click Manage Payments.
• Use the Payment Date criteria to identify checks that haven’t been cleared for more than or equal to the minimum number of days defined in the payment options.
  Note: You can only escheat payments that are in ledger currency with the status as Negotiable.
• Select the payments and then click Initiate Escheat in the Actions menu.
  Note: You can initiate escheatment for one payment at a time or multiple payments simultaneously.
• Send stop payment instructions to the corresponding banks for all payments in the Escheatment Initiated status.
• After performing due diligence on all stale dated payments, go to the Manage Payments page and search for the payments with status as Escheatment Initiated.
• Select the payments and then click Actions > Escheat.

How You Transfer Funds to Escheatment Authority

After escheatment is completed, the payment status changes to Escheated. As a next step, run an accounting process for the escheated payments to transfer the amount from Cash or Cash clearing account, to an Unclaimed Fund account.

Next, create a Payables invoice for transferring the payment to the escheatment authority.

Accounting entries for the payments and escheated payments differ, based on the offset segments and when to account payment options.

This is how accounting is done when Offset Segments option is set to None and Account for Payment option is set to Payment Issue and Clearing.

Event	Debited to	Credited to
When payment is accounted	Supplier Liability Account	Cash/Cash Clearing Account
When payment is escheated	Cash/Cash Clearing Account	Unclaimed Fund Account
Create invoice manually on Escheatment Authority	Unclaimed Fund Account	Escheatment Authority Liability Account