11i10 AP Training Presentation

Oracle Payables
Release 11.5.10
TCS Internal
What is this training all about
 This training will help Associates in understanding Payables functions in

Financials area.
 This training will help Associates in understanding how to Implement

Oracle Payables Modules considering the real life case studies.
TCS Internal 3 December 2019

Agenda
 Glossary (Related Business Terminology)

 General Introduction to AP Module
 Run Through of End to End Business Processes
 Integration with other Modules and Related Setups
 Setup & Master Data
 Payables Tables , APIs/Interfaces
 Standard Reports & Online Inquires
 Workplan and Major Activities of Implementation
 Sample Process Analysis Questions
 Trouble Shooting
 Business Case Study

Glossary (Related Business Terminology)
Supplier/Vendor
A Supplier is a person or a entity which suppliers materials needed by the organization to manufacture or sell its products.
Employee
An employee is any person hired by an employer to do a specific "job". Employee refers to a specific defined relationship between
an individual and a corporation, which differs from those of customer, or client
Invoice
An invoice/Bill is a commercial document issued by a seller to a buyer, indicating the products, quantities and agreed prices for
products/services with which the Seller has already provided the Buyer. An invoice indicates that, unless paid in advance, payment
is due by the buyer to the seller, according to the agreed terms.
Payments
A payment is the act of transferring money into another person or company usually in return of due consideration. There are
several types of payment possible- Check, Bank Transfer (ECS), Credit giving

Pre Payment
A pre payment is a payment made to supplier before the goods are delivered. As Payments cannot be made in Oracle without a
invoice a special type of invoice called pre payment invoice is raised to make the payment to supplier. Payments are issued against
Pre-Payment Invoice
Credit Memo
Negative amount Invoice created by a supplier and sent to you to notify you of a credit
Debit Memo
Negative amount Invoice created by you and sent to a Supplier to notify the Supplier of a credit you are recording. Usually sent
with a Note explaining the Debit memo
Purchase Order
Purchase Order is a commercial document issued by a buyer to a seller, indicating the item, quantities and agreed prices for
products or services that the seller will provide to the buyer. Sending a PO to a supplier constitutes a legal offer to buy products or
services. Acceptance of a PO by a seller usually forms a one-off contract between the buyer and seller

Goods Receipt Note (GRN)
Goods Receipt Note is a noting done by the receiving department on receipt of a purchase order confirming the item and quantity
received with the purchase order. It is used internally by the Payables Department as a proof that the item received matched the
one mentioned in the PO.
Matching
2 Way, 3 Way, 4 Way matching refers to matching of Invoice with PO(2 Way), with PO and GRN (3 Way), with PO, GRN and Quality
Inspection Report (4 Way)
Employee Expense Reimbursement
Often Organizations authorize employees to make low cost stationary purchase or pay their hotel and travel bills through their own
credit cards. This allows the company to avoid associated overhead expenses. Employees on return from their trip can submit bills
and claim expense from the organizations.
Payment Term
It is terms which a organization has agreed with its vendors for payment of a invoice. It can typically be Immediate, Due 30 days,
or 2/10 Net 30 days. The last one means that invoice is payable in 30 days but if payment is made within 10 days then you get 2
percent discount

General Introduction- Payables Module
What is AP all about
Let us take example of Amit. He is a trainer in a Gym. The owner asks

him to get a Music System for the Gym so that people working-out can
hear good music. Lured by the better facilities compared to the next door
Gym, more people will come and the owner’s profit will increase.
Amit goes to a shop Music World. He selects the model. Places a order
for it, provides the Gym’s address and asks it to be delivered the next
day. The salesman makes a bill for Music System and informs Amit that
deliver charges are extra. Amit agrees. He makes the payment by credit
card and returns.
The music system gets delivered to the Gym the next day. The delivery
person checks the original bill to verify he has come to correct address,
produces a challan for Amit to sign. Amit inspects the item to make sure
it is the correct item, tests that it is working. Satisfied he signs the
challan. The deliver man takes the signed receipt and gives Amit a copy
and departs. Amit informs his boss that they are a proud owner of a
music system.
General Introduction- Payables Module
What is AP all about (Contd..)
He asks his credit card bill to be reimbursed. Boss asks him to provide his
Credit Card bill voucher and get reimbursed from the person handling
cash. Amit goes to the Cashier. Submits the credit card payment voucher
and the delivery challan. Cashier checks it and makes payment by check.
Owner himself reconciles the bank statement and checks that amount of
check is same as the invoice amount.
Can you identify the elements of Payables Process involved in the above
fictitious transaction ?
Supplier Item Emp. Expense Reimbursement

Purchase Order Buyer Payment
Payment Terms Goods Receipt Note
Freight Charges Shipping Location
Employee Concept of Matching
. TCS Internal 3 December 2019

End to End Business Process - Payables Module
Payment clerk
Invoice Received and
reviews the invoice
Date is Stamped
for due dates and
by Mail Room
discounts dates
Invoice Sent to Payments are booked

Payables Department Files are sent to Banks
Or Checks are printed
Invoice Entered Any checks which are

By Payables Clerk Spoilt are reissued
Invoice Matched to
Receipts and Remittance Advice is
Inspection Reports Generated and mailed
Invoice is Booked Payments are Reconciled

and Approved with Bank Statements

End to End Business Process – Application Perspective
Procure to Pay Business Process
Master Setup
Vendor Item Payment

Bank Setup
Defined Defined Terms
.
.
.
Payment .
Requision Invoices
Batch or Batch .
Created Accounted
Sets .
.
.
.
Purchase Payments Built/ .
Holds Payment .
Order Invoices
Month End
Removed Reconciled .
Created Selected
Process
.
.
.
.
Receipts Month End
Payment .
against Invoice Payment Reconciliation
Formatted> .
Purchase Validated Accounted with GL and
Checks Printed .
Order Period Close
.
.
.
Invoice .
Generated Invoice Payment Remittance .
by Matching to Approved Confirmed Advice Generated .
PO or Receipt
Credit Memo
Invoice or
Generated for
Supplier Site Void Payments
Sub Processes
Return to Vendor
Placed on Hold
RTV
Witholding Tax
Invoice Cancelled
Invoices

End to End Business Process ..(contd.)
Case Covered - PO raised > Items Received> Invoice Prepared

Manually> Quick Payment Made
A supplier is selected
PO Raised by using
a Expense Item.
Here a Category is
used instead of a
Item.
Things to Note
• Supplier
•Ship to / Bill to
•Buyer
•Currency
•Match Approval Level
•Invoice Match Option
. TCS Internal 3 December 2019


Note the
Accounting
•Charge Account
•Accrual Account
•The payment
term is 45 days
•No Acceptance is
required


•Note the PO
Number here
which is
required for
creating
receipts
•Note the
status
•Submit it for
Approval
•Check that the

status is
Approved


In the Receipts
screen query
with the PO
Number. Press
Find
Note you can also
add to existing
receipt
Here we are
making a new
Receipt. Receipt
Number is generated
after checking the
check box and saving
the record
Note the Receipt
Number 9637
It will be used to
Create a Invoice
Matched to
Receipt


We create
Standard Invoices.
Select the Standard
Type of Invoice,
Select the Supplier,
Site, fill the Invoice
Date, Invoice
Currency, Invoice
Amount
Select Match Type

of Receipt. Press
Match.
Fill the PO number

and Receipt
Number. Press
Find. Information of
the receipt from PO
is displayed.
Select Matching Type of Receipt.
Remember we selected the same
option for PO.


The information
from the receipt
is displayed.
Verify the same
and check the
Match Checkbox.
You can change
the quantity if
you like.
Changing the
Unit Price/Match
Amount will lead
to Invoice Price
Variance
Hold(IPV). Press
the match button
to create the
distributions
automatically


Invoice
Distribution is
populated.
We press the
Distribution
Button.
The Charge
account which
you see is
automatically
populated from
the PO. Status of Invoice never Validated
The Liability Invoice is not Accounted .
account will
There are no holds.
come from the Distribution Total is now 230.
Supplier Site Distibutions can be viewed pressing the distribution button .
once Invoice is
accounted.


You can initiate
payment from the
Invoice Screen
itself by selecting
the Actions> Pay
in Full Option
A separate form –
Payments Form
Opens up.
It gives a
message about
reserving the
payment number
or the check
number. No other
payment can use
that series till this
payment is
processed.

Save the record
and note the
payment number.
Note that invoice
with the amount is
also displayed.
If one document is
used to pay for
multiple invoices,
all of them will be
listed here
You can click the

actions button to
Format the
payment.
Formatting
physically prints
checks if the
system is
configured for
check printing

Now you can
Create Accounting
for the Payment
Document. Actions
> Create
Accounting
generates the
accounting for the
payment.
When the status of

the payment
becomes
accounted use
Tools>View
Accounting to see
the accounts which
are generated.


This is how a
Fully Paid
Invoice looks
like.
After this you

have to Transfer
the entries to GL
to complete the
whole cycle

Integration with Other Modules
Oracle Cash Management

Employee for Oracle HR Oracle Projects
Expense Payments
Reports
Oracle EDI/XML Interface with
Third Party
Oracle Oracle Payables
Workflow
Notification
for Events Journals
Oracle Oracle Oracle
ERS, Purchasing Assets General ledger
Receipt/
PO Info
Mass
Additions

Setup and Master Data
How do we Setup Payables Module so that all the steps which we

saw above happen?
Oracle Payables is a versatile product which allows you to configure

the product to suit the business needs of the Organization.
Configuring the Setup Correctly is a vital step to ensure the success

of the Implementation.
So let us examine the steps in of Setups in the following slides.

Setup Steps Sequence Automatic Payment Program
Choose Set of Books Payment Interest Rate

Payment Format
Payment Terms Expense Report Templates

Banks
Invoice Tolerance
Employee Lookup Code
AP Accounting Periods
Tax Names Employees Report Format
Withholding Group Reporting Entity Special Calendars
Invoice Approvals Income Tax Regions Descriptive Flex field
Distribution Sets Financial Options Profile Options
Payables Lookup Code Payables Options Suppliers

Setup Steps Sequence
Choose Set of Books

For each installation of Oracle Payables, you must select one primary Set of Books. This defines the Chart of Accounts
structure, the functional currency, and the accounting calendar used by Oracle Payables. Navigation path Setup : Set of
Books > Choose.
Payment Terms
Payment terms define payment schedules with the corresponding discounts. For example, you can have a payment
term that allows the payer to pay an invoice in 30 days. A different payment term could specify that if an invoice is paid
within the first 10 days, it is given a 2-percent discount. Navigation path Setup : Invoice : Payment Terms.
Invoice Tolerances
Invoice tolerances define the matching and tax tolerances that vary between invoice, tax, purchase order, and receipt.
These tolerances can be by percentage or by amount. Navigation path Setup : Invoice : Tolerances.
Tax Code
The Names you assign to Tax codes of your system. You assign Name, Type, Rate and accounting with tax name.
Navigation path Setup : Tax : Tax Codes.
Withholding Tax Groups

Each withholding tax group can have one or more withholding tax types. When creating invoices with a withholding tax
group, the withholding tax amount based on all of the withholding types is calculated automatically. Navigation path
Setup : Tax : Withholding : Groups.

Setup Steps Sequence ..2
Invoice Approvals
Oracle Payables comes with a list of predefined invoice approval codes, and you can define additional codes as needed.
Invoice approval codes are used to apply or release invoice holds. Navigation path Setup : Invoice : Approval.
Distributions Sets
A distributions set is a predefined allocation structure with or without percentages that you can use on invoices to
facilitate faster data entry. Navigation path Setup : Invoice : Distributions Sets.
Payables Lookup Codes

Oracle Payables uses the following lookup types for Payables lookup codes:
AWT Certificate Type, AWT Rate Type, FOB, Freight Terms, Minority Group, Pay Group, Disbursement type, Don’t Pay
Reason, Source, Tax Type, and Supplier Type. It also comes with predefined lookup codes for each lookup type, and you
can add your own user-defined lookup codes. Navigation path Setup : Quickcodes : Payables
Expense Report Template

You can define expense report templates, which contain commonly used expense items, to be used when your users
enter expense reports. Your users can enter expense reports through the Oracle Applications Enter Expense Report form
or through the Web using Oracle Web Employees. Navigation path Setup : Invoice : Expense Report Templates.
Employee Lookup Codes

Oracle Payables has the following lookup types for employee lookup codes: GB_COUNTY, SEX, TITLE, and US_STATE.
Oracle Payables comes with predefined lookup codes for each lookup type, and you can add your own if necessary.
Follow the navigation path Setup : Quick codes : Employee to set up employee lookup codes. Review the seeded lookup
codes to determine if you need to set up your own codes.
Reporting Entity
A reporting entity is any individual or organization with a tax identification number (TIN). Navigation path Setup : Tax :
Reporting Entities. Determining the number of TINs you have will drive how many reporting entities you have.
Automatic Payment Programs

Automatic payment programs are programs that build the payment runs, format checks, and create remittance advice.
Oracle Payables has one seeded automatic payment program of type Build Payment and several seeded automatic
payment programs of type Format Payments. Navigation path Setup : Payment : Programs.
Payment Formats
You must set up payment formats by selecting the build program, format program, and remittance advance program.
Attach the payment formats to payment documents when you set up your banks. You need one payment format for each
payment method in Oracle Payables, and the payment method includes check, wire, and EFT (electronic funds transfer).
Navigation path Setup : Payment : Formats.
Banks
Set up banks to make payments. Oracle Payables and Receivables share the bank information, and you can have
external banks with suppliers or customers as account holders. For each internal bank, you must enter all of the bank
branches, bank accounts, and payment documents that come out of each bank. Navigation path Setup : Payment :
Banks.

Report Formatting
There are two kinds of special report formatting you can perform in Oracle Payables (both are optional). The first is for
expense reporting, while the second is for aging periods. Use the account segments for expense reporting to determine
the format and sorting sequence of your Expense Distribution Detail report. Use aging periods to determine your aging
buckets for your Invoice-Aging report. To set up account segments for expense reporting, Navigation path Setup :
Invoice : Distribution Detail Report. To set up aging periods for the Invoice-Aging report, Navigation path Setup :
Calendar : Aging Periods.
Special Calendars
You can define special calendars for recurring invoices, automatic withholding tax, and the Key Indicators report. The
Key Indicators report is used to measure individual performances, and special calendars comprise periods that you
define. Periods can be weekly, monthly, or any other format that you customize. To set up special calendars for recurring
invoices, automatic withholding tax, and the Key Indicators report, Navigation path Setup : Calendar : Special Calendar.
Descriptive Flexfield
Set up all necessary descriptive flexfields, which are expansions of the Oracle Applications table.
Profile Options
Profile options direct how Oracle Payables controls access to, and how Oracle Payables processes, system data.
Suppliers
Suppliers need to be setup in the system before you can create invoices against them. You can do supplier conversion to
bring the master data from the setup or define it via the front end.

Choose Set of Books
For each installation

of Oracle Payables,
you must select one
primary Set of
Books

Payment Terms
Payment terms
define payment
schedules with the
corresponding
discounts. You can
define up to three
discounts in a AP
Payment term.

Invoice Tolerance
Invoice tolerances
define the matching
and tax tolerances
that vary between
invoice, tax,
purchase order, and
receipt. These
tolerances can be
by percentage or by
amount.
To set up invoice
tolerances, follow
the navigation path
Setup : Invoice :
Tolerances.

Payment Terms
Payment terms
define payment
schedules with the
corresponding
discounts. You can
define up to three
discounts in a AP
Payment term.

Financial Options
Financial Options
Information entered
here is shared
between Oracle
Payables, Oracle
Purchasing, and
Oracle Assets. You
define defaults in
this window to
simplify supplier
entry, requisition
entry, purchase
order entry, invoice
entry, and automatic
payments

Payables Options
Payable Options defaults

values to simplify supplier
entry, invoice entry, and
automatic payment
processing. Important
Considerations for this
Option are
Accounting Methods:
Primary / Secondary
Payment Accounting:
Account for Payment
Account for Gain/Loss
Calculate Gain Loss

Payment Formats
Payment terms
define payment
schedules with the
corresponding
discounts. You can
define up to three
discounts in a AP
Payment term.

Banks
Banks
You define internal,
Customer and
Supplier Banks in
your system to make
payments
You define Bank

Branch,
Bank Account with all

the accounts (Cash,
Clearing, Confirmed Receipts
Future Dated Payments)
Bank Payables
Documents (accounting,
document names, numbers)

Brief Overview of Tax
Oracle Payables offers Five types of Tax to configure
Sales : is that you pay to supplier for your Purchase

Use Tax : is the tax you pay to Tax Authority , not supplier
User Defined : is defined in the lookup. VAT is a user-defined tax. This tax is also
paid directly to the supplier
Offset Tax : is a negative tax to offset VAT tax in order to create a Zero Tax Rate
Automatic Withholding Tax : is the tax you withhold from Supplier
You have three ways to enter tax in invoice

• Manually > Enter it directly as a tax line in the distribution
• Prorate Tax > Enter it in the distribution screen by selecting a distribution line and
prorating the tax
• Create Automatically > By Entering the tax code in the invoice header

Some Tables of Payables Modules and Common APIs
PAYMENTTABLES
INVOICE TABLES
AP_INVOICES_ALL contains one record each for each invoices you enter.
AP_INVOICE_DISTRIBUTIONS_ALL
AP_SELECTED_INVOICES_ALL - It is holds the distribution
a temporary information
table that that is manually
stores information about entered
invoices or system-for
selected
generated.
payment in a payment batch. Your Oracle Payables application inserts into this table after you initiate a
AP_INVOICE_PAYMENTS_ALL
payment batch. contains records one row each of each invoice payments that you made to
suppliers. Payables updates this table when- you
AP_SELECTED_INVOICE_CHECKS_ALL When confirm an automatic
you build paymentspayment batch,batch,
in a payment enteryour
a manual
Payables
payment, or process a Quick payment. When you void
uses information in this table to create rows in this table a payment, your Oracle Payables application inserts
an additional payment
AP_CHECKS_ALL line information
stores that is the negative of the original
about payments issuedpayment line or refunds received from suppliers.
to suppliers
AP_HOLDS_ALL
You need one row contains information
for each payment youabout
issueholds applied on
to a supplier the invoice
or refund received from a supplier
AP_ACCOUNTING_EVENTS_ALL -Every accounting entry needs to be identified with the event that
created it. Conceptually, an event provides information about the timing and the reason for which the
document created the accounting entries
AP_AE_HEADERS_ALL - An accounting entry header is an entity grouping all accounting entry lines created
for a given accounting event and a particular set of books. An accounting entry header can either be
transferred over to GL or not at all
AP_AE_LINES_ALL – An accounting entry line is an entity containing a proper accounting entry with debits or
credits both in transaction currency as well as functional currency along with an account and other reference
information pointing to the transaction data that originated the accounting entry line.
AP_LIABILITY_BALANCE contains de-normalized information about liability accounting entry lines
associated with invoices and payments that have been transferred to GL. The Accounts Payable Trial
Balance report uses this information to report on outstanding invoice liability
Common APIs of Payables Modules
Payables Open Interface Import - Used to import Invoices, Credit Memos, Debit Memos. Prepayments
cannot be imported using this interface.
Tables Used AP_INVOICES_INTERFACE and AP_INVOICE_LINES_INTERFACE.
Supplier Open Interface Import - Used to import Suppliers

Supplier Sites Open Interface Import - Used to import Supplier Sites
Tables Used AP_SUPPLIERS_INT, AP_SUPPLIER_SITES_INT and AP_SUP_SITE_CONTACT_INT
Expense Report Import - Used to Import Expense Reports

Tables Used - AP_EXPENSE_REPORT_HEADERS_ALL
Invoice Validation Program – Used to Validate Invoices

Payables Accounting Program – Used to Account for Invoices , Payments, Pre payments, Debit/Credit
Memos
Payment Batch Confirmation – Used to Confirm Payment Batch
Supplier Merge Program – Used to Merge Duplicate Suppliers
Unaccounted Transaction Sweep – Sweep unaccounted transactions to next period to faciliate period close
Update Matured Future Payment Status – Update status of Future Dated Payments to Mature Status
Mass Additions Create Program – Used to transfer Invoices to be capitalized as Assets
Payables Transfer to GL Program – Used to transfer Payables activity to General Ledger

Standard Reports
Accounting
Transaction
Listing Reports
Reports
•Payables
•Accounts
•Invoice Aging Report - UseLookups
Payable Trial
this reportListing
toBalance
view- Use
yourthisReport
report
unpaid - invoices
Use
to obtain
the report
a listing
to verify
of allthat
•Invoice on Holdtotal
predefined
accounts
Report lookup
- Use payable
thevalues,liabilities
report and
to allinlookup
identify Payablesvalues
invoices equal
on you
holdthose
defined
in the in the
general
Oracle
Payables Lookups window
ledger
•Matching Detail•Posted
•Tax Codes
Report Invoice
- UseListingRegister
this - Usetothe
report Use
– seeTaxtheitCodes
todetail
review
Listing
accounting
of how toanreview lines
invoice,ratepurchase
for
and
invoices
order, or receipt
was matched. This account
transferred
reportinformation
is to GL forhelpful
especially tax codes
when an invoice is on hold and you are trying determine why
•Posted Payment Register - Use it review accounting lines for payments
the hold was placed
•Matching Hold transferred
Detail Report to GL- Use the Matching Hold Detail Report to review detailed accounts payable
•Payables Account
and purchasing information for invoices Analysis Reportholds
with matching - Useand this matching
report to review and
hold releases.
analyze accounting entries in Payables.
•Use Tax Liability•Period
ReportClose
- UseExceptions
this report toReport
determine - Submit this report
the amount to review
of use tax you owe to each tax
exceptions
authority for invoices you enter thatduring
are preventing
a period closing a Payables accounting period.
•Withholding Tax There can-be
Report Use following exceptions:
this report to create Outstanding
a withholdingPayment
tax reportBatches,
for your company’s internal
reporting needs Accounting Entries not Transferred , Future Dated Payments Requiring
Maturity, Unaccounted Invoices, Unaccounted Payments
•Invoice Audit Listing by Voucher Number - Use this report to review your invoices with assigned
sequential voucher numbers. Either you or Payables can assign a unique, sequential number to an invoice
during invoice entry, if you enable the Sequential Numbering profile option.

Workplan
Phases & Activities Month 1 Month 2 Month 3 Month 4
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Project Initiation 3
Process Analysis
Business Process Analysis & Mapping 3 2 0
Key Process Ow ners Training 1
Conference Room Pilot
Design Configuration 1
Setup and Validation 1 1
Build
Design, Dev. of Interface & Custom Reports 1 2 2 2 2
Testing
Integration Testing 3 2 2
End User Training 1 1
User Acceptance Test Support 2 2
Data Migration
Data Preparation & Cleansing
Data Migration /Entry
Go-Live
Prepare Production Env. (Data Migration 1 1
support)
Stabilization
Post im plem entation Support 2 2

Major Activities of Functional Consultants in
Implementation Project
1. Preparation of Business Process Study Document
2. Preparation of Business Process Mapping Document
3. Perform Setups
4. Identify Gaps and finalized Workarounds/Customization
5. Preparation of Functional Specification for Customizations
6. Help Technical Team to prepare Technical Specification & Test

developed code for Customization (Forms, Reports, Interface)
7. Collect Business Scenarios from Client
8. Perform Testing

Sample Process Analysis Questions
1. What In how many different ways you pay your suppliers?
2. What is the taxation system followed in your company’s particular payable site ? ( VAT or Sales Tax )
3. What are the statutory reports which you have to publish from Payables ? (e.g. TDS Certificates at the end of
year)
4. Do you have any other IT system from where you interface Invoice or Payment data?
5. How do you account for Payments while paying and while clearing?
6. Do you record employees expenses in Payables?
7. Do you have large number of invoices each month which are of recurring type ? (E.g. Lease Payment,
Royalty Payment)
8. How do you reconcile your Payables data at the month end.
9. Do you close books every month?

Trouble Shooting
Sl Problem Cause Resolution
1 Unable to Validate Invoice • Invoice has Holds • Check Holds

• Correct invoice details if holds are due to
invalid data
• Release holds
• Re-Validate
2 Cannot select invoice for manual payment • Invoice not Validated • Validate Invoice
• Invoice payment method is wrong • Update invoice payment method
• Invoice payment currency is incorrect • Update invoice payment currency
3 Invoice not selected for payment by auto • Invoice not yet in Oracle • Check Interface Reports
payment run • Invoice not Validated • Validate Invoice
• Invoice payment method is wrong • Update invoice payment method
• Invoice not yet due • Check due date for payment
• Supplier pay group is incorrect • Check Supplier pay group

Trouble Shooting
Sl Problem Cause Resolution
4 Unable to select prepayment to apply • Prepayment not yet paid • Prepayment must be paid before it can be
applied. Pay Prepayment
• Invoice not yet interfaced from Oracle • Check Prepayment Status Report
• Invoice not yet Validated • Validate Invoice
• Invoice already paid • If error, void payment
5 Invoice rejections in interface • No supplier in Oracle • Add a supplier

• Add a bank Detail
• Missing supplier bank details
6 Unable to close period Unposted Items • Check for unposted items using Unposted
Invoice and Payment Sweep report. Run GL
Transfer program for any unposted items

Business Case Study
Procure to Pay Cycle
Type of Business
Ink Manufacturing Industry

Business Requirement
A raw material is required to be procured by 10 July'06.There is no MRP environment. For
this material the company likes to invite quotations from different suppliers. A new supplier is
offering the most favourable price and the Purchase Order is awarded to him.The company
follows moderate control regarding the receipt date tolerance and a tolerance of 1 day is
allowed beyond which it wants to show the warning message but allows to receive the
material.However the company follows a strict control on over receipt and no over receipt is
allowed against the PO. The material is to be supplied in two shipments.The first shipment
should reach on 8th July'06 and the second shipment should reach on 10th July’06.But in
reality the two shipments reached on the same day (on 7th July’06) and material is
subsequently received in two separate GINs. In the receipt of first shipment, the
transportation charge for transporting the material is borne by the supplier.However in
second shipment, freight charge is to be given to a 3rd party transporter. Raw material
supplier presents two separate invoices.Invoices are matched to the receipt and PO before
payment. 3rd party supplier presents separate invoice. Raw material supplier is paid through
a single cheque for the presented two invoices. Separate cheque is issued for the third party
supplier. The payment to all 3rd party suppliers is subjected to TDS. Generate the
TDS certificate for the payment made to the 3rd party supplier.

Business Process Mapping
Process Oracle Standard

Business Process/Gap/Customization
1. The company follows moderate control 1. Define ‘Receiving Options’ for the
regarding the receipt date tolerance and a Organization where material is to be
tolerance of 1 day is allowed beyond which it received.
wants to show the warning message but a)Set Days Early & Days Late =1 under
allows it to receive the material.However the 'Receipt Date' block.
company follows a strict control on over b)Set Tolerance=0% and Action=Reject
receipt and no over receipt is allowed against under ‘Over Receipt Control’ block.
the PO. Navigation: Purchasing > setup > Organizations >
Receiving Options

2. Material is to be procured from the supplier. 2. Check if the supplier is already existing in the
Supplier Master. If it is not then Define
supplier (header & site).
Navigation: Purchasing > Supply Base > Suppliers
3. The purchase requisition is raised by the 3. Purchase Requisition is generated by the

requester with an indication of requirement of requester with the requested qty. and the
material by 10th July’06. Need By date.Approve the requisition.
Navigation: Purchasing > Requisitions >
Requisitions(Localized)

4. The company likes to invite quotation from 4. Autocreate RFQ from requisition.
different suppliers. Navigation: Purchasing > Autocreate

5. Request for quotation is sent to different 5. Mention two suppliers in the RFQ and
suppliers. change the status to active.
Navigation: Purchasing > RFQ’s and Quotations >
RFQ’s(Localized)
6. Suppliers respond with the offer price 6. Prices are recorded in 2 separate quotations.
Quotations(Localized)
7. Identify the most favourable Quotation 7. Run ‘Quote Analysis (Localized)’ to identify
the most favourable price bid.
Quote Analysis(Localized)

8. Purchase Order is awarded to the supplier of 8. Create PO from the Quotation. The PO type
most favourable quotation. The material is to will be ‘Standard Purchase Order’. In
be supplied in two shipments.The first ‘Shipments’ create two shipment lines of 100
shipment should reach on 8th July'06 and qty. & 200 qty with Need-By date 8th july’06 &
the second shipment should reach on 10th 10th July’06 resp. Check applicable taxes
July’06. and approve the PO.
Navigation: Purchasing > Purchase Orders >
Purchase Orders(Localized)

9. The supply against two shipments reached 9. Receive the material against the first shipment
on the same day (on 7th July’2006) and line (scheduled on 8th July’06). After
material is subsequently received in two generation of receipt no.,confirm taxes and
separate GINs. post the receipt. In this shipment the
transportation charge is borne by the supplier.
Note as the receipt date (7th July’06) is well
within the acceptable limit mentioned in
Receiving Option(Receipt Date tolerance), no
warning message is shown.
Navigation: Purchasing > Receipts >

Receipts(Localized)
Make another receipt for for the second

shipment (scheduled on 10th July’06). In this
shipment the transportation charge is borne
by the third party transporter.In Freight tax
line, change the vendor name to the third
party name and set the vendor site to the
related vendor site (Refer the screenshot).
Note as the receipt date (7th July’06) is
beyond the acceptable limit mentioned in
Receiving Option, warning message is
shown.

10. Invoice against the first receipt is presented 10. Enter invoice in Invoice batches in AP.
by the supplier. Here he is also charging for Match the invoice against the first receipt.
transportation.Invoice is to be matched Validate the invoice
against the receipt and PO. Navigation: Payables > Invoices > Entry > Invoice
Batches/Invoices
Note that in Distributions, freight component

is flowing from the receipt.

Oracle Standard
Process
11. Invoice against the second receipt is 11. Enter invoice in Invoice batches in AP.
presented by the supplier. Here he is not Match the invoice against the second receipt.
charging for transportation.Invoice is to be Validate the invoice.
matched against the receipt. Navigation: Payables > Invoices > Entry > Invoice
Batches/Invoices
Note that in Distributions, freight component

is not flowing from the receipt.

12. Pay the supplier through a single cheque for 12. Pay the supplier through Payments /
the two presented invoices. Payment Batches against the two matched
invoices.
Navigation: Payables > Payments > Entry >
Payments

Oracle Standard
Process
13. Third party supplier (transporter) presents an 13. Submit the ‘India Concurrent for 3rd Party
invoice for the transportation charges of Invoices’
second receipt. Navigation: Purchasing > Requests > ‘India
Concurrent for 3rd Party Invoices’
Please note that another subsequent request

(Third party Invoices - Payables open
interface Import) is automatically run after
the completion of the ‘India Concurrent for
3rd Party Invoices’ request. In ‘View Output’
of ‘Payables open interface Import’
successful generation of the 3rd party invoice
TCS Internal is indicated. 3 December 2019
Oracle Standard
Process
14. TDS is to be deducted from the invoice 14. Check the third party invoice in AP
amount Navigation: Payables > Invoices > Entry > Invoices
In the distribution, open the DFF with the

context ‘India Distributions’. Enter the
appropriate TDS tax. Now save and validate
the invoice. After validation one credit memo
and one std. invoice on the Commissioner of
Income Tax will be automatically generated.

Oracle Standard
Process
15. Pay the 3rd party through cheque for an 15. Select the std. invoice and credit note and
amount equal to invoice amount less the pay in full to the 3rd party through cheque.
TDS amount for the second receipt. Pay the Navigation: Payables > Payments > Entry >
Income tax authority also through cheque. Payments
Follow the same process to pay the Income

Tax Authority.

Oracle Standard
Process
16. Generate TDS certificate 16. Run the following concurrent programs in
sequence- India - Process TDS Payments
and India - Generate TDS Certificates with
the required parameters.
Run the concurrent program “India - TDS
Certificates” with necessary parameters.
This will generate the printable format of the
TDS certificate.

Addendum - A
Accounting Entries with Source
PO Module Setup AP Module Setup

Purchasing Options / Accural Payables Options / Accounting Methods
Accrue Expense Items Automatic Offset Method
Accrue Inventory Items Payables Options / Currency
Expense AP Accrual Account Realized Gain/ Loss
Receiving Options Rounding (ROUNDING)
Receiving Inventory Account Payables Options / Invoice Region
Freight Distribution Account (FREIGHT)
INV Module Setup Financial Options / Accounting
Liability (LIABILITY)
Organization Parameters / Receiving Accounts Prepayment (PREPAYMENT)
Purchase Price Variance (PPV) Discount Taken (DISCOUNT)
Invoice Price Variance (IPV) PO Rate Variance Gain/Loss -Unrealized
Financial Options / Supplier Entry
Inventory AP Accrual (INVAPAC) Invoice Match Option
Banks
Bank Accounts (Ext. Supplier payments)
Bank Accounts (Internal Bank Accounts)
Holds
All AP invoices are accounted immediately
Only the holds below are not accounted for
PO Not Approved/ PO Match required
Currency Differences/ Distribution Variances
Addendum - A
Accounting Entries with Source
Expense Item, 3 Way Match, Invoice (unit price = 9) <= to PO (unit price = 10) Qty = 10
Tax 5%, Line Item, Freight = 30, Misc. = 20, Discount 2 %
PO is raised No accounting
PO Receiving (PO Module) No accounting
Supplier Invoice Recorded (AP Module)
DR PO Distribution Account Invoice Qty * PO Unit Price = 100

DR TAX Tax = 5
DR MISC Misc. = 20
DR FREIGHT Freight = 30
CR IPV (Booked to PO Dist. Account) (Invoice Unit Price-PO Unit Price) * Qty = 10
CR LIABILITY Invoice = 145
Supplier Invoice Paid (AP Module)
DR LIABILITY Invoice Amount = 145

CR DISCOUNT Discount = 2.9
CR CASH Payment (Invoice – Discount) = 142.1

Addendum - A
Accounting Entries with Source ..contd
Expense Item, 3 Way Match, Invoice (unit price = 9) <= to PO (unit price = 10) Qty = 10
Tax 5%, Line Item, Freight = 30, Misc. = 20, Discount 2 %
Since this is a Expense Item , the Put away to Inventory did not happen in the Inventory.
Usually the accounting entry for Put Away is
DR Inventory Item Account

DR/CR PPV
CR Receiving Inventory Account
In our case we have month end accruals
We pass this Journal entry to GL with reversal period set to next month. We pass it only for the Receipts which are un-
invoiced i.e. where Received qty > Invoiced Qty for a Particular Expense Item PO.
DR PO Distribution Account
CR Expense AP Accrual Account
REMEMBER : a) This entry is reversed in the next period.

b) This entry is passed for Expense Items. For normal Inventory Items we do not pass this entry at all.

Questions?

Thank You
TCS Internal

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Oracle Payables

 This training will help Associates in understanding Payables functions in

 This training will help Associates in understanding how to Implement

TCS Internal 3 December 2019

 Glossary (Related Business Terminology)

TCS Internal 3 December 2019

TCS Internal 3 December 2019

TCS Internal 3 December 2019

Goods Receipt Note (GRN)

Employee Expense Reimbursement

TCS Internal 3 December 2019

What is AP all about

Let us take example of Amit. He is a trainer in a Gym. The owner asks

What is AP all about (Contd..)

Supplier Item Emp. Expense Reimbursement

Payment Terms Goods Receipt Note

Freight Charges Shipping Location

Employee Concept of Matching

. TCS Internal 3 December 2019

Invoice Sent to Payments are booked

Invoice Entered Any checks which are

Invoice is Booked Payments are Reconciled

TCS Internal 3 December 2019

Vendor Item Payment

TCS Internal 3 December 2019

Case Covered - PO raised > Items Received> Invoice Prepared

. TCS Internal 3 December 2019

Case Covered - PO raised > Items Received> Invoice Prepared

TCS Internal 3 December 2019

Case Covered - PO raised > Items Received> Invoice Prepared

•Check that the

TCS Internal 3 December 2019

Case Covered - PO raised > Items Received> Invoice Prepared

TCS Internal 3 December 2019

Case Covered - PO raised > Items Received> Invoice Prepared

Select Match Type

Fill the PO number

TCS Internal 3 December 2019

Case Covered - PO raised > Items Received> Invoice Prepared

TCS Internal 3 December 2019

Case Covered - PO raised > Items Received> Invoice Prepared

TCS Internal 3 December 2019

Case Covered - PO raised > Items Received> Invoice Prepared

Case Covered - PO raised > Items Received> Invoice Prepared

You can click the

Case Covered - PO raised > Items Received> Invoice Prepared

When the status of

TCS Internal 3 December 2019

Case Covered - PO raised > Items Received> Invoice Prepared

After this you

TCS Internal 3 December 2019

Oracle Cash Management

TCS Internal 3 December 2019

How do we Setup Payables Module so that all the steps which we

Oracle Payables is a versatile product which allows you to configure

Configuring the Setup Correctly is a vital step to ensure the success

So let us examine the steps in of Setups in the following slides.

TCS Internal 3 December 2019

Choose Set of Books Payment Interest Rate

Payment Terms Expense Report Templates

Tax Names Employees Report Format

Withholding Group Reporting Entity Special Calendars

Invoice Approvals Income Tax Regions Descriptive Flex field

Distribution Sets Financial Options Profile Options