Oracle Payables Overview

Payables architecture in oracle is concerned with all the activities related to all the liabilities of the business. It is concerned with all the expenses/payments that the business incurs in course of Operation. Payables keeps a track of the the payments to be made and also the related entities involved in the whole cycle

Oracle Payables are used for 5 main functions

1.       Supplier Entry

2.       Invoice Entry/Import

3.       Invoice Validation

4.       Invoice Payment

5.       Invoice and payment Accounting

To enter and pay invoices, first enter suppliers and supplier sites.  Payables processes many different invoice types including standard invoices, credit memos, debit memos and expense reports.  After invoices are entered and validated, they can be paid.  After invoices are validated or paid, subledger accounting entries are generated in Subledger Accounting and those entries are transferred to General Ledger.

Supplier Entry

In order to proceed in payables suppliers need to be setup in the system. Users need to enter

·        Enter suppliers, their addresses, and business information such as payment terms, payment              method, and supplier bank account information.

·         Enter supplier sites and related data, which defaults to invoices entered for that site.

·         Review supplier information online, such as supplier balance.

·         Merge duplicate suppliers

Major Tables Affected

·         Po_vendors_all

·         Po_vendor_sites

Invoice Entry

Once the Suppliers have been entered in the system the user can enter the invoices and related information

There are different ways of entering invoices in the system

Manual Entry: Manually enter invoices  from the invoices screen. When entering invoices manuall users can choose to create invoice batches or create individual invoices.

Import: System can use the Payables import program to import invoices into the system.This can be done to electronically invoices sent by the suppliers.

Automatically generated.  Oracle Payables automatically generates some invoice types including:  withholding tax invoices to pay tax authorities, interest invoices, and payment on receipt invoices. 

Recurring invoices. You can set up Oracle Payables to generate regularly scheduled invoices such as rent.

Major Tables Affected

·         Ap_invoices

·         Ap_invoice_distributions

·         Ap_holds

·         Additional tables affected for invoice  import:

o   Ap_invoices_interface

o   Ap_invoice_lines_interface

Invoice Matching

Oracle provides an option of Invoice Matching. Invoice Matching is a process in which users/business has an option of matching the invoice details against the purchase order or Receipt. In case the invoices are created via  the invoice import program business might want to perform the matching of the invoice against the PO or PO Receipt before proceeding further in invoice processing. In invoice matching the details of the invoice are matched against the PO or PO receipt to check for data correctness.

During invoice matching accounted stored in purchase order/purchase order receipt are copied to the invoice

Invoice Validation

Once the invoice is entered the data validity needs to be performed by Oracle by Applying the standard rules to confirm that all the details are valid and in sync with the data present in the system.Oracle has defined a standard invoice validation Program to Validate all the invoices. This program when run will validate the invoices and in case any validation fails the invoice is put in hold with the respective  hold details.

When an invoice is placed on hold , we need to release them. Some holds might be released manuall but for some the users need to perform corrective action then only the holds will be released. These checks help  oracle maintain the integrity of the system

Invoice Payment

Once invoices are validated, they can be paid.  Payables provides the information that you need to make effective payment decisions, stay in control of payments to suppliers and employees, and keep your accounting records up-to-date so that you always know your cash position.  Payables handles every form of payment, including checks, manual payments, wire transfers, EDI payments, bank drafts, and electronic funds transfers. Payables integrates with Oracle Payments to define payment methods, and integrates with Oracle Cash Management to support automatic or manual reconciliation of your payments with bank statements sent by the bank.  With Payables you can:

·         Ensure duplicate invoice payments never occur

·         Pay only invoices that are due, and automatically take the maximum discount available

·         Select invoices for payment using a wide variety of criteria

·         Record stop payments

·         Record void payments

·         Review information on line on the status of every payment

·         Process positive pay

Invoice and Payment Accounting

Once the invoice has been created and validated or payments have been done for the invoice the data needs to be transferred to GL for reporting and reconciliation purposes. When transferring the data to GL 2 activities need to be performed

·         Create Accounting : when an invoice Is created a business event occurs which will affect the business financially, thus which type of financial activity has taken place and how will it affect the business needs to be ascertained. The Create Accounting action will take care of this

When Create Accounting is performed data is populated into the tables :

o   ap_ae_headers

o    ap_ae_lines

·         Run Payables Transfer to General Ledger Program : This program is run for a particular set of books and when the program is run the data from pyables is interface to General Ledger. When running the program there is a parameter : ‘Submit Journal Import’ If the value of this parameter is passed to YES then oracle will run the journal import for the records transferred to GL and also create journals for them if the parameter = ‘NO’ then Oracle will only transfer the data to GL and not submit journal import, thuse data will be present in GL_INTERFACE

Tables Affected

·         ‘Submit Journal Import’ = ‘YES’ (Journal entries will be created for the transferred data)

o   Gl_je_headers

o   Gl_je_lines

·         ‘Submit Journal Import’ = ‘NO (Journal entries will not be created for the transferred data)

o   Gl_interface