Major changes in AP - R12
1. Supplier Creation and Maintenance:
In Oracle R12, Suppliers are now part of TCA(Trading Community Architecture), where suppliers are defined as parties and supplier sites as party sites. Each supplier, supplier sites and contact details can be defined globally in TCA level. It means, any changes to supplier/supplier sites/address reflects across Operating Units with out really updating every OU and all the supplier information can be leveraged by multiple Operating Units. Supplier bank information can also be handled at TCA level.
In Release 12, there is a new user interface for suppliers entry and maintenance. When user opens Supplier entry form, Oracle automatically redirects the page to TCA with a jsp form.
Impact of Upgrade:
1. During the upgrade from 11i to R12, TCA party and party sites records are created and updated in TCA for all the existing suppliers and supplier sites.
2. TCA data model requires country and address information for suppliers, which will be used by E-Business Tax. If there is no country or address information specified to a supplier site, Oracle automatically infer the data based on most frequently used site from the supplier's historical transactions.
3.Oracle Payables reviews the supplier sites and determines duplicates, based on supplier,address,city,province, state, country, zip and language and creates only one party site for each distinct supplier site address.
4. In 11i the employees are associated with Payables as internal suppliers to create the payments for their expense reports. During migration of data, for internal suppliers, only party will be created in TCA and employee address will not not be migrated to party site and the data remains in HRMS records for data security.
5. As the supplier objects are moved from AP to TCA, the tables related to supplier, supplier site, and supplier address are obsolete in R12 and views are created with the obsoleted table names to link the information from old tables with information in TCA.
Table Changes:
AP_SUPPLIERS, AP_SUPPLIER_SITES_ALL, AP_SUPPLIER_CONTACTS, AP_SUPPLIER_INT_REJECTIONS are the new tables introduced to replace obsoleted tables PO_VENDORS, PO_VENDOR_SITES_ALL, PO_VENDOR_CONTACTS
2. Invoice Entry & Cancellation:
In Oracle R12, there is an additional level of detail called Invoice lines between Invoice Header and invoice distribution to capture the data related to Items, freight, miscellaneous, Tax, Prepayment or withholding tax. An invoice line can have one or more invoice distributions.
With the introduction of invoice lines, there is lot of significant improvement in the data flow to other modules which are integrated with Payables.
For example: 1. Fixed Assets use the data stored in the Invoice lines fields such as Manufacturer, Model, Serial Number, Warranty Number, Asset Book and Asset Category to track the assets.
2. E-Business tax takes information from the AP invoice lines and creates summary and detail tax lines in E-Business tax repository.
3. Sub ledger Accounting require the invoice distributions should be stored at the maximum level of detail. With additional level in the invoice hierarchy, data flow will be improved to the Sub ledger accounting.
Impact of Upgrade:
During a upgrade one invoice line will be created for every distribution for existing data in 11i.
Cancellation of Invoices:
An invoice line may be discarded on its own or as a part of invoice cancellation. A discarded invoice line will have an amount as 0, marked as discarded and creates a negative respective transaction in the distributions. If a line is discarded as a part of invoice cancellation it will be marked as cancelled.
Recurring Invoice:
In Oracle R12,For Recurring invoices, invoice definition and line definition are introduced in place of template definition. In line definition additional information such as Item description, Manufacturer and Model number are included. This will be helpful in smooth data flow to the integrated modules. In addition to Invoice definition and line definition few more tabs are introduced namely Tax, Control and Payment. E-business tax uses the data in Tax ad Payment module uses the data from payment tab on recurring invoices window.
Table Changes:
AP_INVOICE_LINES_ALL New table introduced to represent the data stored in invoice lines
AP_CHRG_ALLOCATIONS_ALL Obsolete and now distributions itself represent the allocation of charges
3. Payment Process:
In R12, Oracle Payments is a new module introduced to centralize the payment process into one payment engine, so that multiple applications can leverage the same functionality. In R12 Payables, user can find Payments manager under payment entry, which will re-direct the page to a OAF page. So unlike in 11i, user need to use Payables Payments dashboard to begin the payment process.
Build Payment Batch:
The first step in the payment process is to submit a Payment Process Request(PPR), which replaces Build payment Batch in Release 11i. The Payments Process Request form enable users to set invoice selection criteria. This form consists of various tabs such as Scheduled payment Selection Criteria, Payment Attributes, User Rates, Processing, Validation failure result and additional Information to specify the required criteria for payment processing.
Format Payment Batch:
Payment Process Request will be formatted automatically after submitting the Payment Process Request form. Users can check the status of PPR under Payment Process Request status.
Confirm Payment Batch:
When users click on start action icon, the form takes user to Payment Process Instructions tab, where users can confirm the batch if it is printed correctly, by clicking on 'Record Print Status' button. Here the module name changes from Payables to Payments.
> There are no different processes for payment and payment batch in R12. Same screen and process can be used for both .
> If user selects Payee under Scheduled payment Selection Criteria tab in the Payment Process Request then single payment will be done for a selected payee. If user leaves it blank, payment will be done to all suppliers.
> All Payment related setups are now moved to Oracle Payments.
4. Create Payment Instructions:
In R12 there are two programs to create payment instructions:
Create Electronic Payment Instructions for Electronic Payments
Create Printed Payment Instructions for Check payments
We can run these programs automatically or manually by selecting an option in the Build Payment process.
5. Transmit Payment File to Banks:
As part of R12 , there is a check box in the "Payment System" set up . When enabled the check box " Automatic Transmit of File" - This would transfer the file to bank automatically.
There are few new set ups that needs to be done in the R12.
1. Payment System - External organization ( Internal bank) needs to be set up.
2. Transmission Configuration - This includes the ftp details and how to pull the flat file from a particular location.
6. Banks:
> Bank accounts are moved into TCA architecture which needs to be defined in R12
> Cash Management now owns Banks Set up Definition.
> All the internal bank accounts of 11.5.10, will be migrated into Centralized Bank model automatically during the upgrade.
7. Transfer journal entries to General Ledger:
Users can transfer journal entries to General Ledger in two ways.
1. Run Create Accounting Program with Transfer to GL option as Yes.
2. Run Transfer Journal Entries to GL after running Create Accounting Program with Transfer to GL parameter set to NO or after create accounting online in Final mode.
Create Accounting Program:
Payables Accounting Process is obsolete in R12 and is replaced with Create Accounting program. The create accounting program creates sub ledger journal entries by processing eligible accounting events. The Create Accounting program uses application accounting definitions, which are created in Accounting Method Builder(AMB) to create sub ledger journal entries.
The Create Accounting program
1. Creates and validates sub ledger journal entries.
2. Transfers the final journal entries in the current batch run to General Ledger and starts General Ledger Posting Process.
3. Generates Sub ledger Accounting Program Report.
The create Accounting program creates journal entries in three modes.
Draft: Users can create the journal entries in SLA in draft mode and can review and make changes again.
Final: With this option users can create journal entries in SLA which can not be modified again. Here users need to run Transfer Journal Entries to GL to post the subledger journal entries to GL.
Final Post: With this options users can create the journal entries and post to GL with out using Transfer Journal Entries to GL program.
Transfer Journal Entries to GL:
Payables Transfer to General Ledger program is obsolete in R12 and is replaced with Transfer Journal Entries to GL. The Transfer Journal entries to GL program enables users to transfer eligible journal entries to GL, including those from the previous run that have not yet been transferred to GL.
This program is used when the Create Accounting program is run with Transfer to GL parameter set to NO or after create accounting online in Final mode.
8. Invoice Approval Workflow:
Invoice work flow has been enhanced to include line level invoice approval. Based on rules setup for Payables Invoice Approval Transaction Type in AME, the work flow determines if the invoice Header (invoice document) needs approval or invoice lines needs approval or both. If both invoice lines and document need approval, all the lines of the invoice requiring approval must be approved before the invoice document can be approved.
The approval status both at header level as well as line level shows whether the invoice document or invoice lines need approval or not.
Setup:
> The item class provided in defining rule in AME determines whether this rule effects the invoice document approval or invoice line approval.
> If item class is given as Header, this rule govern the invoice document approval and if given as line item, would govern the invoice line approval. Remaining all setups in AME are same as in 11i.
Changes in Tables:
In R12, there are 2 history tables for invoice approval.
1. AP_APINV_APPROVERS Stores the line level approval history
2. AP_INV_APRVL_HIST_ALL Stores both Header and line level history.
Bank model in Cash Management - R12
In R12, banks are moved into Trading Community Architecture(TCA). Now Cash Management owns the internal bank setup definition.
Benefits of new Bank Account model:
· There is a central place to define internal bank accounts. So with centralized user interface, users can reduce the number of access points to manage bank accounts
· With the help of Multi-Org Access Control, we can explicitly grant account access to multiple operating units/functions and users, which improves the visibility and control of bank accounts
· A single Legal Entity is granted ownership of each internal bank account and One or more Organizations are granted usage rights. So, a single bank statement can be reconciled across multiple Operating Units, which helps to simplify reconciliation process.
· Reconciliation options can now be defined at the bank account level, which provides more flexibility and control to the reconciliation process.
Bank structure in 11i:
Bank structure in R12:
In R12, Banks are part of TCA and the same bank accounts can be used in Payables, Receivables, Payroll and Treasury.
Impact of Upgrade:
All the internal bank accounts of 11.5.10, will be migrated into Centralized Bank model automatically during the upgrade.
Tables to store the bank information in R12:
The new tables that store bank information are now under Cash Management as follows:
CE_BANK_ACCOUNTS Contains Legal Entity Level bank account information. Each bank
account must be affiliated with one bank branch.
CE_BANK_ACCT_USES_ALL Stores Operating Unit level bank account use information.
CE_PAYMENT_DOCUMENTS Stores payment Documents to be used for Printed type Payments
CE_BANK_BRANCHES_V View: Bank/Branches Info
CE_BANK_ACCT_USES_OU_V View: Internal Bank Account Uses Info
The following tables were obsoleted in R12, in which Bank Data was stored in R11i:
AP_BANK_BRANCHES
AP_BANK_ACCOUNTS_ALL
AP_BANK_ACCOUNTS_USES_ALL
In R12, Internal bank accounts can be created in Cash Management (Setup -> Banks). Where can we define Supplier (or External) bank accounts?
Supplier (or External) bank accounts can be created in Payables, by using Supplier Entry forms. In the Payables Manager responsibility:
1. Navigate to Suppliers -> Entry.
2. Query or create your supplier.
3. Click on Banking Details and then choose Create.
After creating the bank account, we can assign the bank account to the supplier site.
1. Navigate to Suppliers -> Entry.
2. Query or create your supplier.
3. Click on Banking Details and then choose Create.
After creating the bank account, we can assign the bank account to the supplier site.
Types of Invoices in Oracle Payables
Types of Invoices in AP:
The different types of invoices available in Payables are:
1. Standard Invoices: Standard invoices are the invoices issued by a supplier to the buyer, representing the amount due for the products or services the supplier has provided to the buyer.
Standard invoices can be either matched to a purchase order or not matched.
A standard invoice must be positive amount.
2. Mixed Invoices: Mixed invoices are the invoices which can have either positive or negative amounts and can be matched to both purchase orders and invoices.
For example, if there is a mixed invoice for $-1000, you can either match it to an invoice with $-1000 or to a purchase order with an amount $1000.
3. Credit Memo: Credit memo is an invoice raised by the supplier to the buyer with negative amount. It reduces the supplier balance and reduces the liability.
For example the customer has returned some of the goods that he purchased, the supplier sends a credit memo to the buyer to adjust the balance.
4. Debit Memo: Debit memo is an invoice raised by the customer to supplier with negative amount.
The functionality of Debit Memo is same as Credit Memo. Both are to reduce the liability.
The purpose of Debit Memos is to record a credit for a supplier who does not send you a credit memo.
Unlike in AR, both Credit memo and Debit memo are with negative signs in Payables.
5. Prepayment: Prepayments are the invoices raised to record advance payments to a supplier or employee.
6. Expense Reports: Expense reports are the invoices that represent amount due to an employee for all his business related expenses.
7. Retainage Release Invoices: Retainage release is the act of releasing, or paying, that portion of a payment that was withheld until a substantial portion or all of the service procurement work is completed. The amounts retained during the life of the contract must be released and paid to the supplier or sub-contractor once all or a substantial portion of the work is completed.
Oracle Payables uses the Retainage Release Request to create a type of invoice called Retainage Release. A retainage release invoice has lines, which are copied from the original standard progress invoices, which show an amount left to be released.
Retainage release invoices can only be entered manually in the Invoice Workbench window.
8. Withholding Tax: After you apply withholding tax to an invoice, you can optionally create invoices to remit withheld tax to the tax authority.
Payables can automatically create withholding tax invoices, or you can perform this
task manually. If you choose to automatically create withholding tax invoices, you must choose whether to do this during Invoice Validation or during payment processing.
9. PO Price Adjustment Invoices: PO Price Adjustment Invoices are used for recording the difference in price between the original invoice and the new purchase order price.
For example, If a supplier sends an invoice for a change in unit price for an invoice you have matched to a purchase order, PO Price Adjustment Invoices can be used to adjust the invoiced unit price of previously matched purchase order shipments or distributions without adjusting the quantity billed.
PO price adjustment invoices can be matched to both purchase orders and invoices.
10. Quick invoices: Used for quick, high-volume invoice entry for invoices that do not require extensive validation and defaults. After entry, you import these into the Payables system. Validation and defaulting occur during import
The different types of invoices available in Payables are:
1. Standard Invoices: Standard invoices are the invoices issued by a supplier to the buyer, representing the amount due for the products or services the supplier has provided to the buyer.
Standard invoices can be either matched to a purchase order or not matched.
A standard invoice must be positive amount.
2. Mixed Invoices: Mixed invoices are the invoices which can have either positive or negative amounts and can be matched to both purchase orders and invoices.
For example, if there is a mixed invoice for $-1000, you can either match it to an invoice with $-1000 or to a purchase order with an amount $1000.
3. Credit Memo: Credit memo is an invoice raised by the supplier to the buyer with negative amount. It reduces the supplier balance and reduces the liability.
For example the customer has returned some of the goods that he purchased, the supplier sends a credit memo to the buyer to adjust the balance.
4. Debit Memo: Debit memo is an invoice raised by the customer to supplier with negative amount.
The functionality of Debit Memo is same as Credit Memo. Both are to reduce the liability.
The purpose of Debit Memos is to record a credit for a supplier who does not send you a credit memo.
Unlike in AR, both Credit memo and Debit memo are with negative signs in Payables.
5. Prepayment: Prepayments are the invoices raised to record advance payments to a supplier or employee.
6. Expense Reports: Expense reports are the invoices that represent amount due to an employee for all his business related expenses.
7. Retainage Release Invoices: Retainage release is the act of releasing, or paying, that portion of a payment that was withheld until a substantial portion or all of the service procurement work is completed. The amounts retained during the life of the contract must be released and paid to the supplier or sub-contractor once all or a substantial portion of the work is completed.
Oracle Payables uses the Retainage Release Request to create a type of invoice called Retainage Release. A retainage release invoice has lines, which are copied from the original standard progress invoices, which show an amount left to be released.
Retainage release invoices can only be entered manually in the Invoice Workbench window.
8. Withholding Tax: After you apply withholding tax to an invoice, you can optionally create invoices to remit withheld tax to the tax authority.
Payables can automatically create withholding tax invoices, or you can perform this
task manually. If you choose to automatically create withholding tax invoices, you must choose whether to do this during Invoice Validation or during payment processing.
9. PO Price Adjustment Invoices: PO Price Adjustment Invoices are used for recording the difference in price between the original invoice and the new purchase order price.
For example, If a supplier sends an invoice for a change in unit price for an invoice you have matched to a purchase order, PO Price Adjustment Invoices can be used to adjust the invoiced unit price of previously matched purchase order shipments or distributions without adjusting the quantity billed.
PO price adjustment invoices can be matched to both purchase orders and invoices.
10. Quick invoices: Used for quick, high-volume invoice entry for invoices that do not require extensive validation and defaults. After entry, you import these into the Payables system. Validation and defaulting occur during import
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