Payment Process Request (PPR) Statuses in Payment Manager Concept- Oracle payables

1) New: This status indicates that the PPR has been successfully submitted for processing, and the AutoSelect program is digesting the criteria provided by the user on the header of the PPR in preparation of the automatic selection the invoices and memos related to that criteria.
2) Selecting Invoices: This status indicates that the AutoSelect program is selecting the eligible invoices/memos for the payment batch based on Due Date, Discount Date, Pay Group, and other criteria provided by the user on the header of the PPR
3) Cancelled – No Invoices Selected: If no invoices or memos met the selection criteria provided by the user on the header of the PPR, the PPR is automatically terminated and the status changes to this status.
4) Invoices Selected: After selecting the documents (invoices/memos), they are locked to prevent other checkruns from selecting the same documents
6) Invoices Pending for Review: This status will only appear if you selected the "Stop Process for Review After Scheduled Payment Selection" option on the Processing tab of the PPR header. This status means that the PPR process has stopped, and is waiting for you to review the invoices and memos that were selected for payment (and make any changes to the batch, as needed). Click on the Take Action icon to be taken to the Review Proposed Payments window
7) Calculating Special Amount: This status will only appear if you selected the "Calculate Payment Withholding and Interest During the Scheduled Payment Selection" option on the Processing tab of the PPR header. This status means that interest and withholding tax are being calculated and applied, as necessary, to the invoices and memos selected for this payment batch
8) Assembling/ Assembled Payments: An "interim" status, it appears after the calculation for interest and withholding has been completed, and the Build Payments program is starting. It may appear again later after the user provides any required bank account and PPP information for the invoices/memos ("documents") selected.
9) Infomation required – Pending Action: This status appears if you did not provide a default Internal (Disbursement) Bank Account and/or PPP on the header of the PPR. In that case, you need to click on the Take Action icon to be taken to a form where you can decide which internal bank account and PPP should be used for each invoice and memo selected for payment
10) Pending proposed Payment Review: This status will only appear if you selected the "Stop Process for Review After Creation of Proposed Payments" option on the Processing tab of the PPR header. In this case, the system is waiting for you to review (and modify, if needed) the proposed payments for this batch. Click on the Take Action icon to be taken to the "Review Proposed Payments" window
11) Formatting: This status indicates that the proposed payments have been turned into payment instruction files. At this point, you will want to click on the Show link to view the new associated payment instruction file(s). Each payment instruction file with have their own PI Reference Number. If you have both electronic and paper ("check") payments involved in this payment batch, you will see a payment instruction file for each type of payment method
12) Confirmed Payment: Once the payment instructions have been transmitted/printed and confirmed, the Status of the PPR changes to this status to indicate a successfully completed payment batch (PPR)
13) Terminated: If the user terminates a PPR anytime prior to confirmation of the payments (using the Terminate icon), the status will change to "Terminated", and the PPR is permanently closed.


The following concurrent Program gets fired during PPR process.

1 .Payment Process Request Program

2. Scheduled Payment Selection Report

3. Build Payments

4. Format Payment Instructions

5. Record Print Status

Retainage Release Invoice Concept and it's Accounting Entry - Oracle Payables

This invoice is used to hold some portion of amount from the supplier Payment.The remaining will be paid to supplier only at the completion of the total work.

Setup Steps:

1. Enter Retainage Account at Financial Options.

2. Enter Retainage Percentage (%) at Supplier level in Invoice Management Tab. 
3. Create Complex Service Agreements PO in Purchasing Module.
4. Create a Standard Invoice by matching with above created Complex Service Agreement PO.
5. Make Payment for above Standard Invoice.
6. When Contract the is completed, Release the Retainage Percentage amount by creating Retainage Release Invoice by matching with the PO.
7. Make payment for Retainage Invoice.
Accounting Entries:
When Invoice is matched with Standard Invoice:
          Accrual A/c.........................Dr.
                         To Liability A/c .............Cr.
                         To Retainage A/c............Cr (Pick from Finacial Options)
For Making Payment for Standard Invoice:
           Liability A/c........................Dr
                         To Cash Clearing A/c.........Cr
When Retainage Invoice is Created:
           Retainage A/c.......................Dr
                         To Liability A/c ....................Cr.
For Making Payment to Retainage Invoice:
           Liability A/c....................... Dr
                         To Cash Clearing A/c..............Cr.

Withholding Tax Invoice Concept

If customer want to withhold the tax amount charged by supplier in the invoice, and customer want to pay the tax amount directly to tax authorities instead of paying to supplier. For that System automatically create a withholding tax invoice. In this case tax authority would be a supplier.
Setup Steps:
Step: 1 Enable WHT at payable optionsStep: 2 Define WHT special calendars
Step: 3 Define Supplier as tax authority
Step: 4 Create WHT code and group
Step: 5 Assign WHT group at payables options
Step: 6 Enable WHT at supplier header and site level and assign WHT Group
Step: 7 Create Standard invoice
Step: 8 Query WHT invoice for cross verification purpose.
Accounting Entries:
When WHT applied to Standard invoice
             Expenses A/c ................................Dr
                         To Liability A/c .........................Cr
                         To Withholding Tax A/c ..............Cr
For Withholding Tax Invoice ( Auto Generated)
             WHT Expenses A/c ....................Dr
                         To WHT Payaables/Liability A/c................Cr

Zero Payment Concept and it's Setup's in Payables Module

If you cancel an invoice (or) Invoices with offsetting credit or debit memos. In such case there is no need pay any amount, but system will show these invoices in Invoice Aging Report as they are not paid. If you create dummy bank A/c and Dummy Check's and  make payment to those invoice, those invoices will no longer appear in Invoice aging Report.

Set up for zero Payment: 

1. Create a Zero Payment bank, bank branch and bank account.

2. Enable the Allow Zero-Amount Payments option in zero payment bank account.

Process for Zero Payment:
1. Create Standard Invoice in Payables with Some "X"Amount.
2. With the same negative "X" amount create credit memo and match to the standard invoice.
3. Run invoice aging Report. You can see both Standard and Credit memo invoices.
4. To eliminate the same. Make Payment to the above Standard Invoice and Credit Memo.
5. Now, Re-run invoice aging Report. Standard invoice and credit memo invoice will not appear in the Report.

Distribution Set Concept in Oracle Payables

It is used to automatically enter distribution for an invoice. There are two type of distribution Sets.
Full Distribution Set: It is used to determine accounting and percentages of amount for each distribution line. When we select distribution set at invoice header, the system will automatically create line at distribution level with accounting and amount as per the percentage mentioned.
Skeleton Distribution Set: Here, it is used to determine accounts but percentage should be left blank. Where we need to enter amount of each distribution line at the time invoice creation.

Oracle Advanced Global Intercompany System (AGIS) Concept and it's Process.

A transaction which takes place between the two balancing segment values between two legal entities is called AGIS.
AGIS  is a new module that allows companies to streamline intercompany processing and facilitates the reconciliation of intercompany transactions.  It replaces global intercompany system(GIS) feature provided by General Ledger in  Release 11i. All setup and transaction data is moved to a new data model and all oracle forms in the global intercompany systems are replaced by browser based user interface pages. changes include:

• Subsidiaries are replaced by intercompany organisations. The Represent trading partners  and can be used as initiators and receipts of Advanced Global Intercompany System Transactions.
• As part of the Grant-based Security Model, intercompany trading partner are mapped to users instead of responsibilites. A user may be given access to many different intercompany trading partners regardless of the responsibility used to log in.
• The intercompany accounts set up in GIS are upgraded as the new intracompany balancing Rules set up in GIS are not upgraded and need to be set up in the new subledger accounting transaction account builder.
• All GIS new and completed Transactions are upgraded as AGIS transacton batches. Generally, for each GIS Transactions, a batch is created.
• Interaction with subledgers facilitating Invoicing using Receivables and payables. 
• Facilitates transactions processing between different legal entities, under one or more ledgers.

Process of AGIS Transaction.
1. Through outbound Transaction window, The initiator will initiate the intercompany transaction. Enter the Transction Type, Initiator Organisation, GL Date, Currency, recipient name with Debit/ Credit amount is entered.
2. Completion of accounting from the Initiator Side and sumbit the batch
3. Through inbound transaction window, The Recipient will complete the accounting for Received AGIS batch Transaction.
4. Then the Recipient will the approve the AGIS batch.
In the Invoicing is opted for, in transaction type setups then,
1. Switch to inititors Receivable Responsibility, Run the auto invoice master Program to process the invoice in Receivables
2. Switch to Recipient Payables Responsibility, Run payables Open interface Import program to Process the invoice in Payables.
3. Create the accounting for your invoice and Transfer to GL.
Setup Steps:
1. Organization Creation

2. Security Set Up for users
3. Transaction Type creations
4. Period Control.
5. Invoicing Option – Receivables Assignment.

6. Invoicing Option – Customer/Supplier Association Definition.
7. Defining system Options

Pay On Receipt/ Self Billing

Under Pay on Receipt/Self Billing method invoice will be created by system automatically when we create receipt.
Setup Steps:

Step: 1 Enable Pay On as 'Receipt' and Invoice Summary Level as 'Receipt'  at Supplier site in Purchasing tab
Step: 2 Create purchase order and in Terms tab select Pay On as 'Receipt'.
Step: 3 Receive the goods (Receipt Process).

Step: 4 Deliver the goods (Receiving Transaction Process).

Ensure Payables Open Interface Import Program Request completes with normal status.

Step: 5 Query the invoice in the invoice work bench.

Prepayment Concept, Prepayment Statuses, Accounting Entries for Prepayment Concept.

It is advance payment that we pay to the supplier to supply the goods/ services. There are two types of Prepayments, they are Permanent and Temporary  In case of Permanent Prepayment it acts like deposit with the suppliers. It will be adjusted only after converting Permanent Prepayment to Temporary Prepayment. In case temporary prepayment we adjust the prepayment amount at the immediate invoice received. The following are the different statuses in the invoice.
1. Never validated ( Before Validation of Prepayment Invoice)
2. Unpaid ( After Validation of Prepayment Invoice and when payment is not made)
3. Permanent ( Permanent Prepayment) (After Payment to Prepayment Invoice)
4. Avaliable ( Temparory Prepayment) (After Payment to Prepayment Invoice)
5. Fully Applied. ( In case Prepayment Amount is applied fully to a Standard Invoice)
Accounting Entries:
For Prepayment Invoice:
               Prepayment A/c..........Dr
                            To liability a/c...................Cr
For Payment to Prepayment Invoice
               Liability A/c ............Dr
                            To Cash A/c.......................Cr.
In Case Of Standard Invoice
               Expenses A/c .............Dr
                            To Liability A/c...................Cr
Apply the Prepayment to Standard Invoice
               Liability A/c ...........Dr
                            To Prepayment A/c .............Cr

AutoCash Rule Set.

Receivables provides five AutoCash rules that we can use to create our own AutoCash rule sets. When we run Post QuickCash to apply customer's receipts, Receivables tries to use each AutoCash rule within an AutoCash rule set. If the first rule in the set does not find a match, Receivables uses the next rule in the sequence, and so on until it can apply the receipt. Auto cash rule set is used to apply receipt amount against invoices. The following are the five Rules: 
             1. Clear the account 
             2. Clear the past due invoices 
             3. Clear the past due invoices grouped by payment terms 
             4. Match payment with invoice 
             5. Apply to the oldest invoice first.
The importance of the five rules are explained below.
Clear the Account: Post QuickCash uses this rule only if your customer's account balance exactly matches the amount of the receipt. If the receipt amount does not exactly match this customer's account balance, Post QuickCash uses the next rule in the set.
Apply to the Oldest Invoice First: This rule matches receipts to debit and credit items starting with the oldest item first. This rule uses the transaction due date when determining which transaction to apply to first.
Clear Past Due Invoices: This rule is similar to the 'Clear the Account' rule because it applies the receipt to your customer's debit and credit items only if the total of these items exactly matches the amount of this receipt. However, this rule only applies the receipt to items that are currently past due.
Clear Past Due Invoices Grouped by Payment Term: This rule is similar to the 'Clear Past Due Invoices' rule, but it first groups past due invoices by their payment term, and then uses the oldest transaction due date within the group as the group due date. When using this rule, Receivables can only apply the receipt if the receipt amount exactly matches the sum of your customer's credit memos and past due invoices.
Match Payment with Invoice: This rule applies the receipt to a single invoice, debit memo, or chargeback that has a remaining amount due exactly equal to the receipt amount.
If none of the AutoCash Rules apply, the remaining amount is placed as Unapplied or On-Account depending on the Remaining Remittance Amount option specified in your AutoCash Rule Set.

Auto Lockbox

Lock box is a service offered by banks to companies in which the company receives payments from their customers and deposits the same company’s bank account. The bank then informs the company of all the payments received. They normally send a Flat file (text file) to the company that gives all the details of the deposits made in the bank account. The details captured in the flat file depend on the arrangement between the bank and the company. This flat file is referred to as the Lockbox file. The company can then import this Lock box file in their system to create receipts and apply these receipts to the open invoices. Oracle Receivables provide a standard functionality to import the lock box file to create the receipts. It also provides you with the flexibility to define customized lock box formats to enable you to accept the lock box file in any format for any of the banks. The Oracle Lock box functionality can also be extended to convert Receipts information from any other legacy system or from the remittance advice the company gets directly from their customers. You need to setup the following before running the Lockbox process
1) Bank and Bank Accounts: You define your internal bank accounts in Accounts Receivables. This is the bank account where the customer payments are deposited.
2) Receipt Class: The Receipt Class determines the processing steps for the receipts and you assign Receipt Methods to your Receipt Class. The processing steps for any Receipt include confirmation, remittance and reconciliation.
3) Receipt Method: Receipt Method is assigned to a receipt class and it determines how to account for the receipts using the Receipt Class. For one Receipt Class, you can have more than one Receipt Methods. You associate bank accounts and the GL account combinations for Cash, Remittance, and Bank Charges etc with the Receipt Method.
4) Receipt Source: You define Receipt Batch Sources to provide default values for Receipt Class, Receipt Method and the Remittance Bank Account. Your Receipt Source also determines if the batch numbering system is manual or automatic.
5) Lockbox: Define a lockbox for your Lockbox service from each bank. The lockbox setup includes a Lockbox number (You get a Lockbox number from your bank).
6) Lockbox Transmission Formats: Oracle Receivables AutoLockbox uses the Transmission format while importing
the data from the lockbox file into Receivables. Transmission formats indicate how the data in the Lockbox file is organized.
7) AutoCash Rule Sets: AutoCash Rule Sets determines the sequence of AutoCash Rules that Post QuickCash
program uses to apply the receipt amount to the customer account open items.
Control file: A Control file is a sql loader file to load the lockbox file in Receivables payment interface table(ar_payments_interface_all). This file should have the ‘.ctl’ extension and should be placed in the $AR_TOP/bin directory.
Lock box Processing Steps:
Start the lockbox processing by copying lockbox data file in required Folder. Run Submit lockbox process. Data is imported to AR_Payments_Interface_all tables. Validation process starts, If any errors found, Recify the same using Maintain transimission Data window. If no error found, it will completed validation and quick cash batch is created. Post quick cash program will run
Finally receipts applied and customer balances updated. Here end the process.