Financials Options
Liability. Payables assigns this account as the default Liability Account for all new suppliers you enter. You can override this value during supplier entry. If you use Accrual Basis accounting, then the Liability Account for an invoice determines the liability account(s) charged when you create accounting entries for invoices.
Prepayment. The Prepayment account and description for a supplier site's invoices. The Financials option value defaults to new suppliers, and the supplier value defaults to new supplier sites.
Future Dated Payment. If you use future dated payments, then enter a value for Future Dated Payment account. This value defaults to all new suppliers and new bank accounts. The supplier value defaults to all new supplier sites. The bank account value defaults to new payment documents.
When Payables accounts for future dated payments, it uses the Future Dated Payment Account from either the supplier site or the payment document, depending on the option you select in the Payment Accounting region of the Payables Options window.
If you relieve liability payment time, this should be an asset account. If you relieve liability at future dated payment maturity, then this should be a liability account.
Discount Taken. If you choose to distribute your discounts to the system Discount Taken Account, Payables uses this account to record the discounts you take on payments. Use the Payables Options window to select your method for distributing discounts for your invoices.
PO Rate Variance Gain/Loss. Payables uses these accounts to record the exchange rate variance gains/losses for your inventory items. The variance is calculated between the invoice and either the purchase order or the receipt, depending on how you matched the invoice. These accounts are not used to record variances for your expense items. Any exchange rate variance for your expense items is recorded to the charge account of the purchase order. Payables calculates these amounts during Payables Invoice Validation.
Expenses Clearing. This account is required when you use the Company Pay payment option of Oracle Internet Expenses. Payables uses this as a temporary account to record credit card transaction activity. Payables debits this account when you create an invoice to pay a credit card issuer for credit card transactions. Payables credits this account with offsets to the original debit entries when you submit Expense Report Import for an employee expense report entered in Internet Expenses that has credit card transactions on it.
Miscellaneous. Used only when importing invoices submitted via iSupplier Portal or XML Gateway.
If you enter a value here then the system uses this account for all Miscellaneous charges on invoices your suppliers enter in iSupplier Portal. If you do not enter a value here then the system prorates Miscellaneous charges across Item lines on iSupplier Portal invoices.
The system also uses this value for any miscellaneous charges your suppliers send in XML invoices. If you do not enter a value here then import prorates miscellaneous charges across Item lines for XML invoices.
2.1 Supplier Entry Financials Options
RFQ Only Site. Default value for all new suppliers. You cannot create purchase orders in Purchasing for a supplier site which is an RFQ Only Site.
Hold Unmatched Invoices. If you enable this option for a supplier site, Payables applies a Matching Required hold to an invoice if it has Item type distributions that are not matched to either a purchase order or receipt. Payables applies the hold during Payables Invoice Validation. You cannot pay the invoice until you release the hold. You can release this hold by matching the invoice to either a purchase order or receipt, and resubmitting Payables Invoice Validation, or you can manually release the hold in the Holds window of the Invoice Workbench. Payables will not apply a hold if the sum of the invoice distributions by accounting code combination is zero.
Invoice Match Option. Indicate how you want to match most invoices. Defaulting is in the following order but can be overridden at any level: Financials options > supplier > supplier site > purchase order shipment. The value at the purchase order shipment controls to which purchasing document type you can match an invoice.
- Purchase Order. Match invoices to purchase orders.
- Receipts. Match invoices to purchase order receipts.
Automatic. The system automatically assigns a unique sequential number to each supplier when you enter a new supplier.
Manual. You enter the supplier number when you enter a supplier.
Attention: Be careful if you switch from manual to automatic entry. Each supplier number must be unique. When you use manual entry, you can assign any number and in any order. If you switch to automatic after entering supplier numbers manually, the system may try to assign a number that you already assigned. If you switch from manual to automatic entry, make sure the next available number for automatic entry is larger than the largest number you have already recorded.
Supplier Number Type. Type of supplier number you want Payables to use for supplier number entry.
Alphanumeric. Numbers, characters, or a combination.
Numeric. Numbers only.
After you begin entering suppliers, you can change your Number Type from numeric to alphanumeric at any time; however, you can change your Number Type from alphanumeric to numeric only if all your current supplier numbers are numeric.
Next Automatic Number. If you select the Automatic Supplier Number Entry method, enter the starting value you want the system to use for generating unique sequential supplier numbers. After you enter a number and save your changes, the system displays the number that it will assign to the next new supplier you enter.
2.2 Supplier-Purchasing
The options you define in this region, except for Inventory Organization, are used as default values for the Purchasing region of the Suppliers window. The supplier values default to new supplier sites for the supplier, which default to new purchasing documents for the supplier site.
Note: If you use the Multiple Organizations Support feature, values you enter in this window will default to both the Supplier and Supplier Site.
You can override defaulted values during entry of the supplier, supplier site, and purchasing documents.
2.3 Supplier-Payables
Payment Terms. Payables uses payment terms to automatically calculate due dates, discount dates, and discount amounts for each invoice you enter. If the terms you want to use are not on the list of values, you can define additional terms in the Payment Terms window. See: Scheduling Invoice Payments.
Payment Method. The invoice payment method you use most frequently. See: Defining and Maintaining Payables Payment Documents.
- Check. You can pay with a manual payment, a Quick payment, or in a payment batch.
- Clearing. Used for recording invoice payments to internal suppliers.
- Electronic. You generate an electronic payment file that you deliver to your bank to create payments.
- Wire. Used to manually record a wire transfer of funds between your bank and your supplier's bank.
Always Take Discount. Enable this option to have Payables always take an available discount for a supplier, regardless of when you pay the invoice. See: Discounts.
Pay Alone. If an invoice has the Pay Alone option enabled, Payables creates a separate payment for each invoice. If the Pay Alone option is not enabled for an invoice, the invoice will be paid with other invoices for the same supplier site on a single payment.
3. Encumbrance
To use encumbrance accounting or budgetary control, you must install Payables, Purchasing, and General Ledger. Use this region to enable encumbrance accounting and to specify the default encumbrance types Payables assigns to your invoices, and Purchasing assigns to your requisitions and purchase orders.
If you enable encumbrance accounting or budgetary control, Purchasing creates encumbrances when you reserve funds for a requisition or purchase order. If you use the perpetual accrual method in Purchasing, Purchasing reverses purchase order encumbrances when you inspect, accept, and deliver the units. If you are using the periodic accrual method in Purchasing, Payables reverses the purchase order encumbrances when you create accounting entries for invoices.
Payables creates encumbrances when there is a variance between a matched invoice and the purchase order to which it is matched, and when the invoice encumbrance type is different from the Purchasing encumbrance type. See also: Encumbrances in Payables.
Oracle Financials provides two predefined encumbrance types that you can use to identify requisition, purchase order, and invoice encumbrances: Commitment and Obligation. You can define additional encumbrance types in Oracle General Ledger in the Encumbrance Types window.
Use Requisition Encumbrance. Enable this option to encumber funds for requisitions. If you enable this option, Purchasing creates journal entries and transfers them to General Ledger to encumber funds for purchase requisitions.
Encumbrance Type. If you enable Use Requisition Encumbrance, you must select an encumbrance type by which you can identify your requisition encumbrance journal entries. Purchasing assigns this encumbrance type to the encumbrance journal entries it creates for purchase requisitions.
Reserve at Completion. If you enable Use Requisition Encumbrance, indicate whether you want requisition preparers to have the option to reserve funds. If you do not enable this option, only requisition approvers will have the option to reserve funds.
Use PO Encumbrance. Enable this option to encumber funds for purchase orders, purchase order and receipt matched invoices, and basic invoices (not matched). If you enable this option, Purchasing encumbers funds for purchase orders and Payables encumbers funds for variances during Payables Invoice Validation for purchase order and receipt matched invoices. If you enable this option and enter a non-purchase order matched invoice, Payables will encumber funds for it during Payables Invoice Validation. All Payables encumbrances are reversed when you create accounting entries. If you enable Use Requisition Encumbrance, you must also enable this option.
PO Encumbrance Type. If you enable Use Purchase Order Encumbrance, select a purchase order encumbrance type by which you can identify your purchase order encumbrance journal entries. Purchasing assigns this encumbrance type to the encumbrance journal entries it creates for purchase requisitions and purchase orders.
Invoice Encumbrance Type. If you use purchase order encumbrance, select an invoice encumbrance type by which you can identify your invoice encumbrance journal entries. Payables assigns this encumbrance type to the encumbrance journal entries that it creates. We recommend that you use an encumbrance type different from the Purchasing encumbrance type so you can identify invoice encumbrances.
4. Tax Financials Options
Rounding Rule. Select the method you want the system to use to round the tax amount when it calculates tax in Payables and Purchasing. For example, the calculated tax is 5.988 and your precision is 2 decimal places. If your rounding rule is Up and the currency is USD, then the system will enter 5.99 for the tax amount.
Payables uses the rounding rule you select to calculate tax on invoices, recurring invoices, expense reports, and purchase orders. The value you enter here defaults to new suppliers. You can override this value at any level. If you update it in the Financials Options window, it will not affect existing suppliers and will default only to new suppliers.
Payables rounds to the Minimum Accountable Unit if you entered a value for that field. Otherwise, it rounds to the precision you enter. The examples below assume you are using a Minimum Accountable Unit of .01 and the currency is USD.
Up. Round up. For example, round $5.988 to $5.99
Down. Round down. For example, round $5.988 to $5.98
Nearest. Round to the nearest number, and if the difference between Up and Down is equal, round Up. For example, round $5.988 to $5.99
Payables also uses the rounding rule you select to calculate the splitting of tax between recoverable and nonrecoverable tax lines. See: Calculation of Tax Distributions.
Precision. Enter a one-digit whole number to indicate to which decimal place you want to round automatically-calculated tax amounts in Payables and Purchasing. For example, the calculated tax amount is $121.011 and you round Nearest. If the precision is 2, the system will enter $121.01. If the precision is 0, the system will enter $121.00.
The system will use the lower of the precision entered here and the default precision for the currency. For example, if your functional currency is USD, and you enter a precision of 3, the system will use a precision of 2.
The system uses the value you enter for this option for all new tax amounts that are calculated automatically. This is the precision value for tax calculation throughout the system and you cannot override it anywhere else.
The system will disregard any value you enter for Precision if you enter a value in the Min Accountable Unit field.
Min Accountable Unit. Indicate the smallest monetary unit to which you want to round the tax amount. For example, the currency is USD, the calculated tax is 5.541, and your Rounding Rule is Nearest. If your Minimum Accountable Unit is .01 (one cent), the system will enter 5.54. If your Minimum Accountable Unit is .05 (five cents), the system will enter 5.55.
Attention: Do not enter a minimum accountable unit that has more decimal places than your functional currency or your invoice distribution amounts may not match your invoice amount after rounding. This may cause a distribution hold on your invoice.
The system uses the value you enter for this option for all new tax amounts Payables calculates automatically. The precision used in tax calculations will be the same number of decimal places as your Minimum Accountable Unit. This is the precision value for tax calculation throughout the system and you cannot override it anywhere else.
Default Tax Code. Tax code default value for the Invoice Tax Code option in the Suppliers window. In addition, you can include this tax code value in your Tax Code Defaults hierarchy that you define in the Payables Options window if you select Financials Option as a hierarchy source. This hierarchy is used throughout Payables to default tax code values to documents. See: Defaulting Tax In Payables.
If you choose a tax code for which you have defined different tax rates for different effective date ranges, (or include such a tax code in a tax group), Payables automatically uses the appropriate rate during invoice entry based on the invoice date, or for an expense report, the receipt date.
Member State. The location of your company or organization. Payables uses this country name to determine if your company or organization is located in a member state of the European Union (EU).
VAT Registration Number. The Value-Added Tax (VAT) registration number for your organization. Your organization is assigned a VAT Registration Number if you register to pay VAT. The first two characters of a VAT registration number are the country code for the country or state where the registered company or organization is located. Payables prints this number on the header of the Intra-EU VAT Audit Trail Report.
Enable Recoverable Tax. Enable this option if you want Payables to do any of the following:
- flag tax type distributions as recoverable for reporting purposes
- split taxes into separate recoverable and nonrecoverable lines. For more details, see: Partially Recoverable Tax.
- automatically calculate tax and prorate it back to the GL account of the taxable distribution. See: Using the Automatic Tax Calculation Feature to Prorate Tax in the Invoice Workbench.
5. Human Resoure
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