Payables Options sets the controls and defaults used throughout Payables. E.g. Defaults Payment terms during supplier definition, Method of Accounting, Invoice Matching Level, etc.
Few of the values entered here will default during Supplier entry, Invoice entry and Payment processing.
Most of the values entered in the payable options are updateable at any point of time. However, it is recommended to amend the values only after considering the impact of the change on various processes.
This region is used to control Accounting information of payables.
Primary Accounting Method: This field explains the method of Accounting being followed. The lists of values for this field are “Accrual” and “Cash”. The value entered here is not updateable.
Primary Set of Books: This field refers to the Set of Books name and will default from “Choose Set of Books window” and the field is not updateable.
Secondary Accounting Method & Secondary Set of Books: These fields are not applicable in general.
Automatic Offset Method: Automatic Offset Method is used to decide the detailed level in which the liability account needs to be generated.
Transfer to General Ledger
This region is used to set defaults for submission of the Payables Transfer to General Ledger Process.
Transfer to GL Interface: Select the level at which you want to summarize accounting entries when you submit the Payables Transfer to General Ledger program. If Payables creates summarized journal entries, Payables combines all the invoice or payment transactions for a particular account or date into a single journal entry line. If you do not create summarized journal entries, then Payables creates a journal entry line for each accounting entry.
Transfer Reporting Books: This field only if is applicable if you use MRC (Multiple Reporting Currency).
Submit Journal Import: Enable this option if you want to submit journal import when you submit Payables Transfer to General Ledger. Journal Import imports accounting entries from the GL Interface into Oracle General Ledger.
Allow Override at Program Submission: If this option is enabled, then when users submit the Payables Transfer to General Ledger Process, they can change the defaults that you set in this region.
This region is used to set up the time for Payment Accounting, Account for gain/loss etc.
Note: Please note the values in this tabbed region should not be changed after you have saved your selection because that could result in the creation of inconsistent accounting entries in your system.
Account for Payment: This option specifies the time when payment needs to be accounted i.e. when payment is issued or when payment is cleared or both.
- When Payment is issued: Payables accounts for each payment once, after payment is issued. After you issue the payment, Payables creates the following accounting entry:
Dr Liability Account
Cr Cash Account
- When Payment Clears: If you select only this option, Payables accounts for each payment once after clearing in Oracle Cash Management. After you clear the payment in Oracle Cash Management, Payables creates the following accounting entry:
Dr Liability Account
Cr Cash Account
- Both (When Payment is Issued and When Payment Clears): Payables accounts for each payment you issue twice, once as an unreconciled payment and once again as a cleared payment.
After you issue the payment, Payables creates the following accounting entry:
Dr Liability Account
Cr Cash Clearing Account
Once the payment is cleared in Oracle Cash Management, Payables creates the following accounting entry:
Dr Cash Clearing Account
Cr Cash Account
Account for Gain/Loss: Select the time at which you will record currency gains or losses for foreign currency payments.
Calculate Gain/Loss: Select the transaction level at which you want to calculate foreign currency gains and losses.
- For Each Invoice: Calculate the gain or loss for each invoice on the payment.
- For Total Payment: Calculate the gain or loss for the entire payment.
Use Future Dated Payment Account: You can define a future dated payment account at both the supplier site and the payment document level. This option controls which account Payables will use to create accounting entries for future dated payments.
- From Payment Document
- From Supplier Site
This region is used to setup the options for foreign currency transactions.
Use Multiple Currencies: Enable this option if you want to enter and pay invoices in a currency different from your functional currency.
Require Exchange Rate Entry: Enable to require entry of an exchange rate whenever you enter an invoice or a payment in a currency other than your functional currency. If you enable this option you need to have exchange rate defined for the Exchange rate type entered at transaction level.
Calculate User Exchange Rate: If this option is enabled, then when you enter a foreign currency invoice, if you select the exchange rate type of User and you provide the functional currency amount, then Payables calculates and enters the exchange rate. You still have the option of entering a foreign currency invoice amount and exchange rate so Payables will calculate and enter the functional currency amount.
Exchange Rate Type: The value entered here will default to invoice workbench and payment workbench when you enter foreign currency invoices or make foreign currency payments.
Realized Gain/Loss Account: Payables uses these accounts as the default realized gain and loss accounts for payments from each of your bank accounts. If the exchange rate changes between invoice entry and payment, Payables automatically calculates the realized gain or loss and records it in this account.
Rounding Account: This account is used to account rounding differences. E.g. If you use multiple currencies and the payment currency does not round within the payment currency precision. For example, if payment rounds to OMR 100.001 , the payment will be for OMR 100.000 and the rounding error of .001 will be recorded in this account.
This region is used to default values to new suppliers.
Pay Group: The Pay Group you want to assign to any new suppliers you enter. You can choose any Pay Group you have defined in the Oracle Purchasing Lookups window
Invoice Currency: The currency that you use as default for each new supplier you enter.
Terms Date Basis: The date that Payables uses as the payment terms start date when Payables calculates the due and discount date for invoice scheduled payments.
- System: Current date of your Payables system.
- Goods Received: The date you receive goods for invoices you match to purchase orders.
- Invoice: The date of the invoice.
- Invoice Received: The date you received the invoice.
Pay Date Basis: The Pay Date Basis entered in this field will default to each new supplier you enter. The Pay Date Basis for a supplier defaults to the new supplier sites you enter for the supplier. You can override the default for each supplier and supplier site.
- Discount: Payables selects invoices for payment based on the scheduled payment discount date.
- Due: Payables selects invoices for payment based on the scheduled payment due date, regardless of any available discounts.
Bank Charges Bearer: This field is not generally used
Tax Reporting: This field is not generally used outside USA.
This region is used to set defaults for the Invoice Workbench.
Confirm Date as Invoice Number: If you enable this option, then during invoice entry when you accept the invoice date as the default for invoice number, Payables displays a pop-up window that reads, "Use the Invoice Date as the Invoice Number?".
Allow Online Validation: Enable this option if you want to allow users to submit Payables Validation in the Invoices window and the Invoice Batches window.
Allow Adjustments to Paid Invoices: Enable this option if you want to allow users to update the distributions of a paid invoice.
Recalculate Scheduled Payment: If you enable the Recalculate Scheduled Payment Payables option, Payables automatically recalculates scheduled payments of invoices during Validation.
Allow Document Category Override: Enable this option if you want to allow users to override the default Document Category assigned to an invoice by Payables.
Automatically Create Freight Distribution: If you enable this option, Payables checks the Create Freight Distribution check box in the Invoices window and automatically creates a single freight distribution using the Freight Amount and Freight Account you enter for an invoice.
Freight Account: If you enable the Automatically Create Freight Distribution Payables option, you must enter a freight account. Payables uses this account as the default freight account for an invoice. You can override this account during invoice entry.
GL Date Basis: The date you want Payables to use as the default accounting date for invoices during invoice entry.
- Invoice Date: Invoice date you enter during invoice entry.
- System Date: Current date for your Payables system. The date you enter the invoice.
- Goods Received/Invoice Date: Date that you enter in the Date Goods Received field. If no value is entered, then the invoice date is used.
- Goods Received/System Date: Date that you enter in the Date Goods Received field. If no value is entered, then the system date is used.
Prepayment Settlement Days: Number of days you want Payables to add to the system date to calculate a default settlement date for a prepayment. Payables prevents you from applying the prepayment to an invoice until on or after the settlement date.
Prepayment Payment Terms: Payment terms that you want to use for all prepayments. For example, you may want to have immediate payment terms for all prepayment type invoices. Note that this value does not exist at the supplier or supplier site level; the value you enter here defaults to all prepayment invoices.
If you do not enter a value here, then Payables will default the supplier site value for invoice payment terms to prepayments you enter.
This region is used to set defaults for matching Invoices with Purchase Orders.
Allow Final Matching: Enable this option to allow final matching of purchase order matched invoices during Invoice Entry.
Allow Distribution Level Matching: Enable this option if you want to allow matching to purchase order distributions.
Allow Matching Account Override: Enable this option if you want to allow override of the account for an invoice distribution created from matching to a purchase order. However, you cannot override the account for a matched invoice distribution if you use encumbrance accounting.
Transfer PO Descriptive Flexfield Information: Enable this option if you want to transfer the DFF values in PO Distributions to Invoice Distribution at the time of matching.
Payables automatically creates invoices to pay interest for overdue invoices if you enable automatic interest calculation for a supplier. The new invoices are in the amount of the interest owed, and the interest invoice number is the same number as the overdue invoice number, but with the prefix, "INV". The payment terms are Immediate. The interest invoices have the same invoice currency and payment currency as the overdue invoices
Expense Report functionality in payables ensure that invoices are automatically created based on the expense report created by the Employees in payables.
This region is used to set defaults for payments.
Bank Account: This account refers to internal bank account you use to disburse funds. The value entered here will default to the Payment Batches window and the Payments window.
Payment Batch Limit: The default maximum outlay amount Payables will pay for each payment batch. If a payment batch exceeds the maximum outlay, Payables displays a warning message that you are exceeding your maximum outlay, but allows you to proceed with the payment batch.
EFT User Number: This refers to the number which identifies you as a user of electronic funds transfer services to your bank or clearing organization.
Additional Pay Through Days: Payables uses the additional pay through days to determine the default Pay Through Date when you initiate a payment batch. For example, if you define 5 as the value in this field, Payables adds 5 days to the system date to calculate the default Pay through Date when you initiate a payment batch.
Allow Document Category Override: Enable this option if you want to allow users to override the default document category assigned to a payment document by Payables.
Exclude Tax From Discount Calculation: If you enable this option, when you enter an invoice, and if you use Header level tax calculation, Payables subtracts the tax amount from the invoice amount when it enters the invoice amount applicable to discount in the Invoices window.
Method: The method you want Payables to use for distributing the discounts you take when making payments. If you leave this field blank, Payables uses the System Account method for distributing your discounts.
- Prorate Expense: Payables automatically prorates any discounts across all the invoice distributions.
- Prorate Tax: Payables automatically prorates a percentage of the discount amount across the tax distributions. Payables only prorates the percentage of discount amount equal to the percentage of your tax distributions. Payables credits the remaining discount amount to the Discount Taken account you enter in the Financials Options window.
- System Account: Payables credits all discounts to the system Discount Taken account you define in the Financials Options window.
Allow Print: If you enable this option, you can create Quick payments.
Allow Pre-Date: If you enable this option, Payables allows you to create payments with a payment date before the system date for any payment except a manual payment.
Allow Void and Reissue: If you enable this option, you can reissue a Quick payment
Allow Address Change: Enable this option if you want to allow users to address a payment to an address other than the invoice's supplier site's address.
Allow Remit-to Account Override: Check this check box if you want to allow users to change the default primary supplier site bank account during Quick payment and payment batch creation. If you enable this option, you can override the Payables default of the Remit-to field of the Payments window and the Modify Payment Batch window. You can then select an alternate Remit-to account from a list of the supplier site's active bank accounts that use the same payment currency.
This region is used to set defaults for Invoice Tax.
Require Tax Entry at Header: If you enable this option, Payables requires you to enter a Tax Code and Tax Amount in the Invoices window when you enter an invoice. This option does not apply to any imported invoices or to credit and debit memos that are entered in the Invoice Workbench. If you have enabled this option and the invoice has no tax, in the Invoices window you enter a Tax Code with a zero-percent tax rate assigned to it.
Use Automatic Tax Calculation: Select this option if you want to enable Payables to automatically calculate and enter tax on invoices.
Calculation Level: If you enable the Use Automatic Tax Calculation option, select the level at which you want Payables to automatically calculate tax.
- Header: Automatically creates tax distributions based on the Invoice Amount and Tax Code in the Invoices window.
- Tax Code: Automatically creates tax distributions based on the distribution Amount, Tax Code and Includes Tax check box in the Distributions window.
- Line: Automatically creates tax distributions based on the distribution Amount, Tax Code and Includes Tax check box in the Distributions window.
Allow Calculation Level Override: Enable this option if you want to allow users to adjust the default value of the Calculation Level option for new and existing suppliers.
Distribution Amounts Include Tax: Enable this option if you use Automatic Tax Calculation at the Line level or Tax Code level, and you want the Distribution Amounts Includes Tax check box to be enabled by default for all new suppliers you enter.
Allow Override: If you enable the Allow Override option, you can override the Distribution Amounts Include Tax check box default value for all suppliers.
With holding Tax
Withholding tax refers to withholding certain amount towards tax out of supplier invoices i.e. Tax Deduction at Source. The tax deducted from supplier payments will have to be paid to appropriate authorities. If you enable this option Oracle Payables automatically withholds the tax amount and create an invoice for the amount deducted on the tax authorities based on the setup made in this option.
Tax Defaults and Rules
This region is used to set hierarchy in payables to default tax codes during invoice entry.
Enforce Tax from Account: Enable this option if you want to enforce the relationship between the tax code and the expense or asset accounts for distributions.
Enforce Tax from Purchase Order: Enable this option if you want Payables to verify that the tax code assigned to an invoice matches the tax code on the purchase order document to which you matched. If you enable this option, the primary tax code default will be from the purchase order, if the purchase order has a tax code. This is regardless of the rank you assign to the PO for Matched Invoices source in your Tax Code Defaults hierarchy.
Assign a hierarchy to the Tax code defaults.
Relieve Future Dated Payment Liability: This region controls whether the Accounts Payable Trial Balance report includes as liabilities invoices that you have paid with future dated payments.
Sort By Alternate Field: Enable this feature if you want Payables to use the Alternate fields when it sorts reports by any of the following values: supplier name, supplier site name and bank account name. Although Payables sorts by the alternate name, it prints the standard name on the report.