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Manage Common Options For Payables and Procurement

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328 views5 pages

Manage Common Options For Payables and Procurement

Uploaded by

ishaan0643.be21
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Manage Common Options for Payables and Procurement

Links

YouTube
we can set options common to the procure-to-pay business flow on the Manage Common Options for Payables and
Procurement page.

The categories of the common options:

Default distributions

Automatic offsets

Currency conversion

Expense accruals

Self-billed invoices

Legal entity information

Navigation

Setup and Maintenance > Payables > Manage Common Options for Payables and Procurement

Default distributions

Default distributions are used to define accounts for payables transactions. Invoices might get some
distributions from supplier sites and others from common options setup.

*Liability account

The default liability distribution for new invoices, unless the Site Assignments tab on the Supplier
page has a different distribution. You can only specify a distribution with an account type of Liability.

*Prepayment

The default distribution for prepaid expenses, unless the Site Assignments tab on the Supplier page
has a different distribution.

Bill Payable

The default distribution for future-dated payments, unless the Site Assignments tab on the Supplier
page has a different distribution.

*Conversion Rate Variance Gain and *Conversion Rate Variance Loss

Records conversion rate variance gains and losses for inventory items that are accrued on receipt.
Variance is calculated between an invoice and purchase order or, an invoice and receipt, depending
on how you matched the invoice.

*Discount Taken

Records discounts taken if the Discount Allocation Method option on the Manage Invoices page is
set to Single distribution.

Miscellaneous

Records charges for invoice lines with a type of Miscellaneous. If you don't enter a value,
miscellaneous charges are prorated across invoice item lines.

Freight
Records charges for freight lines. If you don't enter a value, miscellaneous charges are prorated
across invoice item lines.

Prepayment Tax Difference

Records tax amount differences between a prepayment and the invoices that the prepayment is
applied to. These differences are usually due to changes in tax rates between the times of creation
of prepayment and the invoice.

This distribution is used only if the Applied Amount Handling option in the tax record is set to
Recalculate.

Retainage.

The amount withheld in a contract until the whole process ends and completes.

Unclaimed Fund

When you escheat and unclaimed check, its payable amount must be stored in an account before it’s
transferred to the escheatment authority.

Difference between conversion rate variance gain & loss and Realized gain and loss?

Conversion Rate Variance occurs when the exchange rate changes after the invoice was recorded but before the
payment is made. Realized account refers to the gain or loss that is actually recognized when a foreign currency
liability is settled (i.e., paid).

Automatic offsets

When we enter invoices for expenses or asset purchases with more than one primary balancing segment value,
consider using automatic offsets. It automatically allocates an invoice's liability amount across multiple balancing
segments according to the balancing segments on the invoice distributions. This ensures that invoices always
balance by balancing segment.

If you do not enable Automatic Offsets, Payables records the invoice liability using the liability account on the
invoice, which defaults from the supplier site. When you distribute invoice distributions across multiple balancing
segments, the invoice will not balance by balancing segment. However, General Ledger can automatically create
intercompany balancing entries when you post the invoice if you have enabled the Balance Intercompany Journals
option for your set of books

Example:

The expense is debited to two legal entities, Company1 and Company2, while a single liability account is credited.
This creates an issue in the General Ledger (GL). The issue is resolved through automatic offsetting entries.
Offset Segments options:
None
The invoice liability distribution provides the liability entry line account, without any segment
override
Primary balancing segment
The charge distribution provides the primary balancing segment value and the liability distribution
on the invoice header provides the remaining segment values. The resulting journal entry is
balanced by the primary balancing segment. Only primary balancing segment is from charge
distribution.

All segments, except natural account


The liability distribution on the invoice header provides the natural account segment and the
charge distribution provides the remaining segment values. The resulting journal entry is balanced
by all segments, except the natural account segment. Basic difference is of other segments
AUTOMATIC OFFSETS RESTRICTIONS
ADJUSTMENTS TO INVOICES. When an invoice is paid or partially paid, you cannot adjust any
accounting information on the invoice. Payables prevents you from updating or reversing any of the
invoice distributions for paid or partially paid invoices because Payables has already created the
payment distributions based on the current invoice accounting lines.
RECONCILIATION ACCOUNTING. If you enable Automatic Offsets within Payables, you cannot
enable the Allow Reconciliation Accounting Payables option or enter the reconciliation accounts in
the Banks window. You can still clear payments using Oracle Cash Management. However, Payables
creates no reconciliation accounting entries.
AUTOMATIC WITHHOLDING TAX. You cannot use Automatic Withholding Tax if you have enabled
Automatic Offsets in Payables.
One time Payments
This section provides default Liability and Expense accounting combinations for one time payments.
The One Time Payments feature enables you to import transactions from external systems as payment
requests. Use the File Based Data Import (FBDI) template and make payments through Oracle Fusion
Cloud.
Currency Conversion
Require conversion rate entry
On enabling this option, you must provide a conversion rate while entering an invoice or a
payment in a currency other than the ledger currency.

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, it
results in automatic calculation of the realized gain or loss. The realized gain and loss accounts
automatically record these values.
Expense Accruals
Determine when to accrue for expense items i.e. record the expense.
At Receipt
Accrue when receipts are created. You can override this setting on the PO schedule for expense
destination types.
Note: Inventory items are always accrued at receipt.
Period End
Accrue at the end of a period. During period close, expense accruals are created for all receipts that
don't have invoices. Accrual entries are reversed when the next period is opened.
Self-Billed Invoices
A self-billed invoice can be one of the following:
An invoice that the Pay on Receipt process creates
A debit memo that a return to supplier transaction creates
An invoice that the Create Consumption Advice process creates from a consignment agreement that has
the Pay on Use option enabled
Gapless invoice numbering
You can enable gapless, that's, 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 included in the invoice number created by the pay on receipt process.

Legal Entity Information


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.

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