Exploring Oracle Self Billing (Payment on Receipt)

Self Billing is also known as Evaluated Receipt Settlement (ERS) or Payment on Receipt. When Self Billing is enabled for a particular Supplier Site, standard invoices get created automatically for payment whenever the goods are received. One can automatically create invoices with multiple items and distribution lines that includes tax. We can select Payment method, "Pay On"as follows:
'Receipt'- used for material that is not consigned.
'Receipt and Use'- for material that can be either consigned or non-consigned material.

'Use'- employed for consigned material.One can assign 'Alternate Pay Site' in case we need to pay in that site an not the default supplier site. The supplier site is the default pay site. Invoices can be summarized based on the selection made in 'Invoice Summary Level'. Invoice summary level can be at:'Pay Site' - one invoice is created per supplier pay site.'Packing Slip' - one invoice is created per packing slip per supplier pay site.'Receipt' - one invoice is created per receipt per supplier pay site.

Also, enable the 'Create Debit Memo From RTS Transaction' option if you want the system to automatically create a debit memo in Payables when you enter a Return To Supplier (RTS) in Purchasing. The value for supplier defaults from the Purchasing Options window.
However, the invoice summary levels are dependent on the 'Pay On' method selected earlier. If 'Receipt and Use' has been selected, the invoice summary level available is 'Pay Site'. If 'Use' has been selected, the invoice summary level options are 'Packing Slip', and 'Pay Site'.The Invoice number that gets created is of the format "ERS-X-Seq#", where "ERS" defaults from the Profile Options "PO: ERS Invoice Number Prefix" which is by default set as "ERS" at Site level. X depends on the summary level:- if summary level = Pay Site then X = Invoice Date- if summary level = Packing Slip then X = Packing Slip Number- if summary level = Receipt then X = Receipt NumberAnd, Seq# is a unique system generated number. Once Receiving is done, Run the Program 'Pay On Receipt AutoInvoice' individually or schedule it to run at discrete intervals.
(1) Choose Transaction Source as 'ERS'.

(2) Enter a Commit Interval. The Commit Interval is a numeric representation of the number of invoices evaluated before they are committed. For example, if you have a Commit Interval of 10, after 10 invoices have been processed, they are committed. If you then process another 5, and the process fails, only 5 will not be committed.

(3) Optionally enter a Receipt Number.

Note: If the Receipt Number is null, the program will try to process all the receipts that have not been invoiced successfully. If you enter a Receipt Number, only that receipt will be processed.

(4) Optionally enter an Aging Period.The Aging Period defaults from the PO: ERS Aging Period profile option, but you can change it here. For example, an Aging Period of 2 means that Payment on Receipt processes only those receipts that are 2 or more days old.

(5) Choose OK and then Submit Request to begin the process.

(6) Once the 'Pay On Receipt AutoInvoice' program is submitted the 'Payables Open Interface Import' program also starts running. Ensure that the 'Pay On Receipt AutoInvoice' process and the Payables Open Interface Import process complete successfully. View Output to check the 'Payables Open Interface Audit Report'. Check if there are any invoices rejected in the section 'Payables Open Interface Rejections Report' and accordingly one can go to the Payables Open Interface window and modify the invoice line / distribution and resubmit the Payables Open Interface Import process.

Business case on using Withholding Tax

Business Case:
A large Television broadcasting and production company had the following concern. They take the services of large number of TV artists who are employed for a very short period of time. While making a payment to them the company has to deduct taxes and pay them. They want to know the best way of handling this situation using Oracle Payables. Also, as the number of artist's runs into thousands, they want to know the best way to maintain their bank account and address details for making electronic/check payment.

Solution Steps:
Step1: Setup Withholding tax as per the law. You may/may not create withholding invoices by setting up your payables option 'Create Withholding invoice" accordingly.
Step2: Setup each artist as a supplier and associate the Withholding tax the supplier. However, if we intend to pay them electronically we have to setup supplier bank account for each of the supplier. Once the artist leaves the services of the company, one can easily end date the supplier created. The supplier ID created can be used as a unique number to refer the artist. In case the artist comes back to render his/her services again, only thing that needs to be done is remove the end date to re-activate the supplier.
Step3: Raise invoices for each artist (supplier) and pay them. The invoice automatically calculates the Withholding amount and while making the payment we pay only the balance amount.
Step4: At period end run the "Withholding Tax by Tax Authority" report and pay the tax authority the amount collected in the period.

Different Tax amounts on AP Invoices

E-Business Tax provides tax services for the following categories of Payables invoices:
• Standard Invoices - includes Standard, Mixed, PO Price Adjustment, Credit Memos, and Debit Memos
• Prepayment Invoices
• Expense Reports

E-Business Tax does not provide tax services for Withholding Taxes or 1099 Income Taxes.

Invoice Header Tax Amounts
• Total Tax: Total of inclusive and exclusive tax due to the supplier.
• Self-Assessed Tax: Total of self-assessed tax. Self assessed tax amounts are taxes that you are liable for, but that do not appear on the invoice. Self-assessed taxes are also known as reverse charge or use taxes in certain tax regimes. You can view self-assessed tax amounts in the Self Assessed Tax Amount field in the Invoice Header. This field is for reference only; it has no impact on the amount due to the supplier.

Invoice Line Tax Amounts
• Exclusive Tax: Shown in separate, summarized lines on the invoice. Recoverable and Non Recoverable exclusive taxes are shown in separate distributions and are summarized in a tax line. You can view exclusive tax amounts in the Invoice window, the Invoice Workbench, Distributions (All Distributions), or the Tax Lines
Summary window.
• Inclusive Tax: Shown in the Included Tax Amount column for the line. The line amount is the total of the item amount and the inclusive tax amount. The inclusive tax amount is provided for reference only. Recoverable and Non Recoverable inclusive taxes are shown in distributions under a non-tax line. To view the inclusive tax amounts as separate lines, use the Tax Lines Summary window or the Distributions window. For Prepayments, inclusive tax amounts are also shown in the Tax Amount Applied field in the Apply Prepayments window.

When you validate an invoice, E-Business Tax recalculates the tax and places any tax-related holds on the invoice. If you update a tax driver on a validated invoice, you must revalidate it. In general, E-Business Tax automatically calculates all applicable tax amounts for invoices except in the following instances:
• If you import invoices into Payables from another source, then the tax can be imported with the invoice.
• Depending on your tax setup, you can manually enter, update, or cancel some tax lines in E-Business Tax.

AP AR Types of Invoices

AP INVOICES: 11 invoice are there
1)Regular invoice(9)
2)Special invoice(2)

1)Regular Invoice
1. Standard invoice
2. Credit memo
3. Debit memo
4. Prepaid invoice
5. Expence report
6. Quck invoice
7. Mixed invoice
8. PO default
9. Withholding Tax invoice

2)Special Invoice
1. Recurring invoice
2. Interest invoice

AR TRANSACTIONS(Invoice) 7
1. Invoice
2. Credit memo
3. Debit memo
4. Deposit
5. Guaranty
6. Chargeback
7. Bills Receivables

Definitions:
Standard Invoices: Standard Invoice are invoices from a supplier representing an amount due for goods or services purchased. Standard invoices can be either matched to a purchase order or not matched. Standard invoices must be positive amounts.
Mixed Invoices: Mixed Invoices can be matched to both purchase orders and invoices. Mixed invoices can have either positive or negative amounts.
PO Price Adjustment Invoices: PO Price Adjustment Invoices are for recording the difference in price between the original invoice and the new purchase order price. PO price adjustment invoices can be matched to both purchase orders and invoices.
Credit Memo: Credit Memos are memos from a supplier representing a credit amount toward goods or services. Credit memos are always negative amounts.
Debit Memo: Debit Memos are invoices you enter to record a credit for a supplier who does not send you a credit memo.
Prepayment: Prepayments are invoices you enter to record an advance payment for expenses to a supplier or employee.
Expense Reports: Expense Reports are invoices representing an amount due to an employee for business-related expenses.

What is the purpose of Secondary Tracking Flexfeild Qualifier?

Secondary Tracking segment provides better audit and analysis capabilities. You now have more visibility into the detailed components of Retained Earnings, CTA, and unrealized Gains and Losses. Instead of tracking these accounts by a balancing segment alone, you can track them by balancing and another segment of your choice, such as Department, Line of Business, or Cost Center.

It also provides better control and consistency of similar transactions because this option is set at the ledger level instaed of through profile option. By being able to nominate any segment other than your primary balancing segment or natural account segment to act as your secondary segment, you have greater flexibility in tracking accounts by pairs of accounts.

Accounting period statuses and its meaning in GL

Never Opened: You can not enter or post journals

Future Enterable: You can enter journals, but you can not post. The number of future enterable periods is a fixed number defined in a Ledger window. You can change the number of future enterable periods at any time.
Open: You can enter and post journals to any open period. An unlimited number of periods can be open, but doing so many slow the posting process and can confuse users entering journals.
Closed: You must reopen closed periods before you post the journals. You should manually close periods after finishing your month end processing.
Permanently Closed: Permanently Closed periods can not be reopened. This status is required to archive and purge data.

MOAC Basic

-Multi-Org Access Control feature allows you to enter, process data and generate reports from a single responsibility.
-This is achieved by providing the Operating Unit field on the forms/pages and while running the concurrent processes.
-To Set this feature you need to define the security profile containing operating units and set it at MO: Security Profile.
-You can default the Operating Unit on forms/pages by setting the MO: Default Operating Unit profile.

1)Business Group (Which dealt with HRMS Module) It is the Higest level in the ORG structure.
2)Legal Entity ( Dealt with Tax entities, Govt reporting authorities)
3)Set of Books ( Dealt with 4 C's that is Chart of Account, Currencies and Calender, Accounting Convention)
4)Operating Unit (Dealt with 5 sub ledger modules by name AP/AR/GL/PO/OM
5)Inventory Organization (Dealt with INV/BOM/WIP/MS_MRP)

You can assign any no of Organization under a Operatin Unit.

What is Cross-Validation of accounting flexfield?

Cross-validation (also known as cross-segment validation) controls the combinations of values you can create when you enter values for key flexfields. A cross-validation rule defines whether a value of a particular segment can be combined with specific values of other segments. Cross-validation is different from segment validation, which controls the values you can enter for a particular segment.

You use cross-validation rules to prevent the creation of combinations that should never exist (combinations with values that should not coexist in the same combination). For example, if your organization manufactures both computer equipment and vehicles such as trucks, you might want to prevent the creation of "hybrid" part numbers for objects such as "truck keyboards" or "CPU headlights".

More>>http://download.oracle.com/docs/cd/A60725_05/html/comnls/us/fnd/crossval.htm#e_cvrl

Define different types of segments in account structure

Natural account segment:
A natural account segment contains values representing account types, such as cash, accounts receivable, product revenue and salary expense. Enter Yes or No to indicate whether the segment you are defining is your natural account segment. You define only one natural account segment in your account. Prefer define segment2 as natural segment.

Balancing segment:
General Ledger uses your balancing segment to ensure that all journals balance for each value of your balancing segment. General Ledger also use your balancing segment to ensure that entries that impact more than one balancing segment use the appropriate intercompany or interfund accounting.

Indicate whether the segment you are defining is a balancing segment. You can define only one balancing segment for an account. The segment you use as a balancing segment must be an independent segment (it cannot use a dependent value set). Most users of General Ledger designate company/organization or fund as their balancing segment.

Cost Center segment:
Cost centers indicate functional areas of your organization, such as Accounting, Facilities, Shipping, and so on. Enter Yes or No to indicate whether the segment you are defining is a Cost Center segment. Oracle Assets and Oracle Projects require you to qualify a segment as cost center in your account.

Dependent segments to create context-sensitive segments.
Context-sensitive segment values can have one meaning when combined with a particular segment value, and have a different meaning when combined with a different segment value. You can define more than one dependent segment for an independent segment. You can also define more than one independent segment to have different dependent segments. You cannot, however, define a dependent segment for any segment with validation type other than Independent nor have multiple levels of dependency for the same segment.

What if client does not need a balancing segment?What if they want to keep the whole ledger balanced (DEBIT=CREDIT) rather than each company within a ledger?

The client is one single company. There no balancing entities in reality. Client doesn'tt want to create one dummy company 01 as a work around. As this would cause a noise in data entry?.  There is no other segment that could be designated as a balancing segment like Department or Cost Center etc. This is what we want:ACCOUNT-UNIT-PROJECT Any suggestions?

Adding a company segment as your balancing segment and always having it as '01' is probably a good idea to future proof your chart of accounts.  If you acquire another company or decide to split into multiple companies later you will need this and for now having that extra segment doesn't really do any harm does it?