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ACCOUNTS PAYABLES
Amit Modi / Rana Nishant K Singh 14-Jan-2013 11-Mar-2013 RCIL-BP080-AP Version 1.0
Disclaimer:
This document is a confidential document between Wipro Ltd. and RailTel Corporation Of India Limited. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, whether electronic, mechanical, photocopying, recording or otherwise, without the written permission of Wipro / RCIL. This document includes confidential information related to Wipro and RCIL and shall not be distributed to any persons other than those mentioned in the distribution list herein. All product names referenced herein are trademarks of their respective companies
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Document Control
Change Record
3
Author Amit Modi / Rana Nishant Singh Amit Modi / Rana Nishant Singh
Reviewers
Name Prithwish Chatterjee Swarup Ghosal Chaudhury Position Wipro Project Manager Wipro Program Manager
Approver
Name Sh. Rahul Aggrawal Sh. Anuj Kumar Sh. Kumar Bachchan Sh. A K Sablania Sh. S R Kapoor Position AGM Finance Manager Finance Sr. Manager DNM GGM - DNM Additional GM Finance Signature
Distribution
Copy No. 1 2 3 4 5 Name RailTel Project Parivartan Steering Committee RailTel Project Parivartan Core Working Group RailTel Project Parivartan Regional CWG Wipro Onsite Team Wipro Technical Team Location Gurgaon Gurgaon New Delhi/Mumbai/Secunderabad/Kolkata Gurgaon Gurgaon
Note to Holders: If you receive an electronic copy of this document and print it out, please write your name on the equivalent of the cover page, for document control purposes. If you receive a hard copy of this document, please write your name on the front cover, for document control purposes. The copy numbers referenced above should be written into the Copy Number space on the cover of each distributed copy. If the document is not controlled, you can delete this table, the Note To Holders, and the Copy Number label from the cover page.
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Contents
Document Control .....................................................................................................................ii Introduction ............................................................................................................................... 1 About this Document.......................................................................................................... 1 How this document is organized ........................................................................................ 2 Generic Assumptions .......................................................................................................... 3 Payables Business Process ......................................................................................................... 4 AP 01 AP 02 AP 03 AP 04 AP 05 AP 06 AP 07 AP 08 AP 09 AP 10 AP 11 Supplier Creation .................................................................................................. 5 Invoice Creation .................................................................................................... 7 Recurring Invoices ................................................................................................. 9 Advance Payment ............................................................................................... 11 Payment Process ................................................................................................. 13 Creation Debit / Credit Memo ............................................................................ 15 Tax Definition ...................................................................................................... 17 Tax Deduction at Source (TDS) ............................................................................ 18 Work Contract Tax (WCT) ................................................................................... 20 Service Tax .......................................................................................................... 22 Period Close Process ........................................................................................... 24
Open and Closed Issues for this Deliverable ............................................................................ 26 Open Issues....................................................................................................................... 26 Closed Issues ..................................................................................................................... 26
Introduction
About this Document
RAILTEL has appointed Wipro Limited to implement Oracle E-Business Suite. The implementation spans Human Resources, Financials, Manufacturing, Advanced Supply Chain Planning and Supply Chain Management processes. This document describes the Process for RAILTEL. The project is divided into Five Stages viz. Plan, Analyze, Design, Develop and Go-Live. The Analyze Stage covers identifying the gaps in the As-Is processes and re-designing them in order to adopt leading processes as also to harness the capability of the chosen technology. This document contains the RAILTEL Accounts Payable flow that would be configured onto the Oracle E-Business Suite.
Requirement Fulfilment using ERP Approach 1. Solution Type & Description: Used to designate type of solution. The types mentioned here are Screen, Manual and System. The Screen refers to the type where the data is to be entered in the screen or can be viewed in the screen. Manual type is the manual way of doing the process whether the user would be performing the process in the system or otherwise. The System type of solution is referred to when the system performs the step through automation or sub-automation. The following keys can be used for the process in the system. i. S Standard ii. W - Workaround iii. C Extension/Customization 2. Navigation Path: The path to navigate to the relevant functionality in Applications. The following acronyms have been used for navigation type: i. (T) Tab ii. (B) Button iii. (CB) Check Box iv. (F) Field 3. Impact analysis Process Improvements Quality & Customer Service Leading Practices
Generic Assumptions
Any additional information captured in ERP through external systems will be highly dependent on the external systems. Wipro will not be responsible for the functioning or the implementation of the external systems. Customizations identified in the requirement definition document will be developed subject to the scope defined in the approved project charter.
Receive Invoice from Supplier & Enter.Invoice(in case PO/LOA Invoices will be created automatically)
Validate invoice
Pay invoice
A/P 100,000 60,000 10,000 30,000 Transfer information to general ledger Create accounting entries
AP 01
Supplier Creation
ERP Manual Email
Start
Other Departments
Yes
Finance Department
Yes
No
Supplier is Created by entering necessary information like address , bank details PAN,TAN etc..
End
Process Number: AP01 Event Description: This process is triggered whenever a new supplier has to be created in the system Source: RAILTELFinance Team
AS IS Process
AS IS Process ID #
Process ID #
Description
Mode
None
N/A
AP01.04
Supplier Creation Form will be received from Any Department based on their requirement. Form is verified and if required clarification is taken from respective department. Create Supplier record in the system with appropriate classification, site information of address, contact details. Enter necessary Liability/Prepayment account of the supplier/Employee.Bank account number can be made as a mandatory field by a customization. Enter the Supplier additional information like PAN Number, Vendor Type Etc. Confirmation sent of supplier Creation sent to requestor.
InternalSystem
AP 02
Invoice Creation
ERP
Manual
Other Departments
Any Department (Initiator) PO-01- Online Purchase Requisition Process IE04- Expense Claim Reimbursement
Any Department (Initiator) Respective department will sent additional data or clarification on mail to finance dept.
No
The distribution charge account and Tax codes(TDS , WCT etc) will be entered./ Necessary Correction will be done.
Finance Department
Yes
No
Default Charge Accounts are verified and Tax codes (TDS, WCT etc..) are entered.
Yes
END
Accounting Process and Transfer to GL can be run for invoices separately or can be run along with the period closing process . AP11 Period Close Process
Validation will create two separate invoices. Please Refer AP08 Tax Deduction at Source (TDS)
Description: This process covers the creation of Standard invoice for Non Po related items like all expenses related payments. Description: This process is triggered when supplier submits invoices which are PO or Non PO Based. Source: RAILTELFinance Team AS IS Process ID # Process ID # Requirement Fulfilment using ERP Approach(Y/ N) Y
AS IS Process
Description
Mode
FIN_AP_INVOICING
13
AP02.01
13 13 13 13 1-3 NA
Receive the original invoice from any Department (Non PO Based expense) or from Procurement Department (along with the PO) or Other Departments (along with Reimbursement Bills) Check whether it PO/RFQ/Employee Claim If Yes Match invoice with PO/bills , verify Default charge accounts & enter Tax (TDS, WCT etc.,) st details and sent for validation i.e. 1 level approver If No Create Standalone invoice Enter charge accounts & Tax (TDS, WCT etc.,) details and sent st for validation i.e. 1 level approver nd Invoice is validated and sent for accounting i.e. 2 level of approving and if not validated then Clarification communication is sent to respective Department. Invoice is Accounted and if not then will be revalidated. Transfer the journal entries to General Ledger
System
System
Y Y Y Y Y Y
AP 03
Recurring Invoices
ERP Manual Email
Finance Department
Start
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RAILTEL Process: Recurring Invoices Control Number: AP03 Process Number: AP03 Event
Description: This process covers the process flow for creation of Recurring InvoicesE.g. Rent, electricity payment. Description: This process is triggered for creating Recurring Invoices Source: RAILTELFinance Team Process ID # Requirement Fulfilment using ERP Approach(Y/N) Y Y Y Y
AS IS Process
AS IS Process ID # NA NA NA NA
Description
Mode
Enter Monthly recurring invoice template of recurring payments. Enter details like supplier name, supplier site, payment method, recurrence rule, amount per recurring period and other details. Invoices are created periodically as per the requirement. Follow Invoice Creation Process AP02.04
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AP 04
Advance Payment
ERP Manual Email
Any Department (Initiator) PO-01- Online Purchase Requisition Process IE04- Expense Claim Reimbursement
Finance Department
Advance Payment details are recorded as a Prepayment Invoice. Tax information (TDS,WCT etc.) are entered with other details
Start The paid Prepayment Invoice is adjusted with the forthcoming invoices
Accounting Process and Transfer to GL can be run for invoices separately or can be run along with the period closing process . AP11 Period Close Process
End
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RAILTEL Process: Advance Payment Control Number: AP04 Process Number: AP04 Event
of prepayments, which are treated as advance payment to Suppliers/ employees. Description: This process is triggered when an authorization received from Purchase department/HR/Line managers to Make advance payment to the suppliers. Source: RAILTELFinance Team AS IS Process ID # 5 5 5 5 5 5 Process ID # Requirement Fulfilment using ERP Approach(Y/N) Y Y Y Y Y Y
AS IS PROCESS
Description
Mode
Finance department receive a copy of Approved purchase orders with office memo requesting finance to make the advance payment from other departments. Create Prepayment invoice. Enter details like supplier, supplier site, Purchase Order Number, pre-payment invoice number, invoice date, amount, distribution etc. Approve &Validate the Advance Invoice The Advance is paid to the Suppliers Account The Invoice is adjusted against the Advance Invoice. Accounting Process and Transfer to GL can be run for invoices separately or can be run along with the period closing process. AP12 Period Close Process.
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AP 05
Payment Process
ERP Manual Email
AP 05 Payment Process
Start
All Type of Invoices were identified for Payment. Credit Memo against respective are Selected & adjusted in Payment
The invoices to be paid are chosen manually or by the batch payment logic
Once the details are provided the payment is processed and confirmed
Finance Department
Yes
Print the cheque/ DD and send it to the supplier Payment advice needs to be sent for the successful payments In case of TDS Payments, the payment deposit date, challan number and branch of deposit details should be captured once the payment is done. All Accounting are created & transferred to General ledger GL06 Sub Ledger Enteries
No
A flat file having payment information will be uploaded to bank Site End
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RAILTEL Process: Payment Process Control Number: AP05 Process Number: AP05 Event
Description: This process covers the process flow for Bank Debit and Check payment process Description: This process is triggered for making payments to suppliers/Employees Source: RAILTELFinance Team AS IS Process ID# 1 -2 1 -2 1 -2 1 -2 1 -2 1 -2 Process ID # AP05.01 AP05.02 AP05.03 AP05.04 AP05.05 AP05.06 Requirement Fulfilment using ERP Approach(Y/N) Y Y Y Y Y Y
AS IS PROCESS
Description Payments are done through cheques/ Demand Drafts or through electronic payments Payments are done either individually or in batches Selection of invoices for payment Scheduled batch for payment through online bank service to suppliers as per the payment term Confirm payment batch. If the payment is done by Cheque, the Cheque is printed and issued to the supplier. In case of online payments, the payment information is uploaded in the bank website and approved in the bank website as per Schedule of Power. A Payment advice needs to be sent to the payments successfully processed. In case of TDS Payments, the challan number, deposit date and branch information needs to be captured in the payment additional information once the payment is done. All Accounting is created & Transferred to general ledger.
Mode
System System System System System System
FIN_AP_PAYMENT PROCESSING FIN_AP_PAYMENT PROCESSING FIN_AP_PAYMENT PROCESSING FIN_AP_PAYMENT PROCESSING FIN_AP_PAYMENT PROCESSING FIN_AP_PAYMENT PROCESSING
FIN_AP_PAYMENT PROCESSING
1 -2
AP05.07
System
None
N/A
AP05.08
System
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AP 06
Procurement Department
Yes
No
Yes
No Material continue to exist in the respective locaiton Purchase Order Will be Updated Accordingly for generating Debit memo / Credit Mem
Finance Department
Yes
Debit Memo will be created and will be adjusted against Original Invoice During Payment. Please Refer AP05 Payment Process
End
NOC
All Necessary Information will sent to Finance for charging Penalty to Supplier
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RAILTEL Process: Debit Memo Control Number: AP06 Process Number: AP06 Event
Description: This process covers the process of Debit memo transactions Description: Debit Memos which will actually reduces supplier balances this is for returns and to cover additional charge on Invoices. Source: RAILTELFinance Team Process ID # Description AP06.01 AP06.02 AP06.03 AP06.04 Return material to supplier using a Return To Vendor Transaction. Debit Memo is raised against the supplier. Reverse the Cenvat credit obtained. Adjust the Debit memo with the payments. Mode
System System System System
17
AP 07
Tax Definition
Business Function: RAILTEL -Accounts Payable Mapping Team: Wipro Date:14-Jan-2013 Process Owner: RAILTEL.
RAILTEL Process: Tax Definition Control Number: AP07 Process Number: AP07 Event
Description: This process covers the process of Taxes Definition Description: This process is triggered when the Taxes are to be defined. Source: RAILTELFinance Team Process ID # Description AP07.01 AP07.02 AP07.03 AP07.04 AP07.05 Define the Vendor Types, TDS Section types, TDS Section codes used for deductions Define the Tax codes. TDS Exemption needs to be captured as separate tax codes with separate Threshold setups. Define the TDS Thresholds. Define Tax categories Mode System
System System System System
AS IS Process
AS I
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AP 08
Start
PO Invoice
During Payment Credit Memo will be adjusted against Original Invoice. Please refer AP05 Payment Process
After Validation of Original Invoice in AP02 Invoice Creation two Separate Invoices will be Generated.
Accounting will be done and all journals will be transferred to GL during Period Close Process. Please refer AP11 Period Close Process
Finance Finance
2 Non PO Invoice Standard Invoice against TDS Authority will be Created Invoice will be Validated and will be ready for payment
Payment will be done as per scheduled date. Please refer AP05 Payment Process
End
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Description: This process covers the creation of Standard invoice with TDS Description:creation of Standard invoice with TDS Source: RAILTELFinance Team. AS IS Process ID # Process ID # Description Mode Requirement Fulfilment using ERP Approach(Y/N ) Y Y Y Y
AS IS Process
FIN_AP_INVOICING FIN_AP_INVOICING
FIN_AP_PAYMENT PROCESSING
FIN_AP_INVOICING
5 5 4 5
Based on the nature of Payment & vendor type TDS tax rate is defined. The TDS attached to the invoice. TDS is deducted on every invoice that is paid. The TDS deducted is paid to the Income Tax Authority on a monthly basis. TDS Certificates are processed and issued.
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AP 09
Start
PO Invoice
During Payment Credit Memo will be adjusted against Original Invoice. Please refer AP05 Payment Process
After Validation of Original Invoice in AP02 Invoice Creation two Separate Invoices will be Generated.
Accounting will be done and all journals will be transferred to GL during Period Close Process. Please refer AP11 Period Close Process
Finance Finance
Non PO Invoice
Payment will be done as per scheduled date. Please refer AP05 Payment Process
End
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RAILTEL Process: Work Contract Tax (WCT) Control Number: AP09 Process Number: AP10 Event
Description: This process covers the Generation of Work Contract Tax Description: This process is triggered when the Work Contract Tax is recorded in the system Source: RAILTELFinance Team AS IS Process ID# 5 5 4 5 Process ID # Requirement Fulfilment using ERP Approach(Y/N) Y Y Y Y
AS IS Process
Description
Mode
FIN_AP_INVOICING FIN_AP_INVOICING
FIN_AP_PAYMENT PROCESSING
FIN_AP_INVOICING
Based on the state of registration the WCT tax rate is defined The WCT tax attached to the invoice. WCT Tax is deducted on every invoice that is paid. The WCT Tax deducted is paid to the state government on a monthly basis. WCT Certificates are processed and issued.
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AP 10
Service Tax
Procurement Procurement
PO Invoice
Start
Finance Finance
Finance Finance
Non PO
End
23
Description: This process covers the Generation & Settlement of Service Tax Description: This process is triggered when the Work Contract Tax is recorded in the system Source: RAILTEL Finance Team AS IS Process ID # Process ID # Requirement Fulfilment using ERP Approach(Y/ N) Y Y
AS IS Process
Description
Mode
FIN_AP_INVOICING FIN_AP_INVOICING
5 5
AP10.01 AP10.02
FIN_AP_PAYMENT PROCESSING
FIN_AP_INVOICING
4 5
AP10.03 AP10.03
Service tax rate will be defined System as per Current Tax Rate by Law. The Service tax attached to the PO invoice / Non PO Invoice. Service Tax is captured at PO / Invoice Level. CENVAT information is capture at this level as per new guidelines. The Service Tax deducted is paid to the state government. After Settlement Process If CENVAT is available it is claimed and if payable then Invoice will be created in the system for the same and will be paid.
System System
System System
Y Y
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AP 11
ERP
Manual
Start
No
Yes
AP Data is Transfered to GL
Finance Department
End
25
Description: This process is triggered to make month end process. Source: RAILTEL Finance Team.
Description Check & verify the completeness of all Transaction(Invoice & Payment) After Verified Completeness, Correction will be Validated & accounted All the transactions i.e. invoice and payments are transferred to Main Ledger(General ledger). Preparation of Reports from Payables Close the period.
Mode
System System System System System
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ID
Issue
Resolution
Responsibility
Target Date
Impact Date
Closed Issues
ID
Issue
Resolution
Responsibility
Target Date
Impact Date