Invoices

An invoice is an itemized list of goods shipped or services rendered, with an account of all costs. Oracle Payables lets you capture all the attributes of the real-life invoice documents you receive from your suppliers. When you enter an invoice in Payables, the invoice information is divided between the invoice header and the invoice lines.

Invoice Types

• Standard An invoice from a supplier representing an amount due for goods or services purchased. Satandard invoices can be either mathced to a purchase order or not matched.
• Credit Memo A memo from a supplier representing a credit amount toward goods or services
• Debit Memo An invoice you enter to record a credit for a supplier who does not send you a credit memo.
• Mixed An invoice type you enter for matching to both purchase orders and invoices. You can enter either a positive or a negative amount for Mixed invoice type.
• Prepayment A type of invoice you entr to pay an advance payment for expenses to a supplier or employee.
• Expense Report An invoice representing an amount due to an employee for business-related expenses.
• Withholding Tax An invoice you enter to remit taxes withheld to the appropriate tax authority.
• Retainage Release An invoice created for complex work and advance contract financing

Invoice Structure

Invoice Header

The invoice header defines the common information about the invoice: invoice number and date, supplier information, remittance information, and payment terms. Information specified at the invoice header level defaults down to the line level. You can override the header level information for individual lines, as required.

Invoice Lines

The invoice lines define the details of the goods and services as well as the tax, freight, and miscellaneous charges invoiced by the supplier. There can be multiple invoice lines for each invoice header. The Lines tab of the Invoice Workbench captures all of the details for the invoice line necessary for accounting, as well as for cross-product integration with other Oracle E-Business Suite applications, such as Assets, Grants Accounting, Inventory, Projects, Purchasing, Property Manager, and Receivables.

For each invoice, you can manually enter invoice lines, or you can automatically generate lines by matching the invoice to a purchase order shipment, pay item, or receipt. See: Matching to Purchase Orders.

Each invoice line can have multiple distributions tied to each line. Each distribution serves as the source for an accounting entry generated from the invoice. See: Distributions.

If you need to enter a price or quantity correction, you can do so for the specific line. See: Price Corrections.

You can set up line-level approvals using the Invoice Lines Approval workflow. Requesters must approve all lines before they can approve the invoice header. See: Invoice Lines Approval Workflow.

The following different types of invoice lines are supported:

Item Lines

Item lines capture the details of the goods and services billed on your invoice.

Freight and Miscellaneous Lines

Freight lines capture the details of your freight charges. Freight charges can be allocated to Item lines as required.

Miscellaneous lines capture the details of other charges on your invoices such as installation or service. Like Freight lines, Miscellaneous lines can be allocated to Item lines.

Tax lines

Payables integrates with Oracle E-Business Tax to automatically determine and calculate the applicable tax lines for your invoices. E-Business Tax uses your tax setup, plus fields on the invoice header and lines, known as tax drivers, to determine which taxes should be applied to the invoice, to calculate the tax using the appropriate tax rates, and to determine whether or not the tax is recoverable or non-recoverable. E-Business tax creates the necessary tax lines and distributions for the invoice and allocates tax. If your tax setup permits, you can update the tax lines or manually enter tax lines. See: Taxes on Invoices

Invoice Types

Payables provides the following invoice types:

• Standard
• Mixed
• PO Price Adjustment
• Credit Memo
• Debit Memo
• Prepayment
• Expense Report

You can use these invoice types to enter any type of invoice document you receive from a supplier. For example, you can enter basic invoices that are not matched to purchase orders or more complex invoices that matched to purchase orders at the header, lines, shipping or receipt levels. You can enter invoices in foreign currency or enter invoices for suppliers who are subject to income tax reporting requirements (1099). The characteristics of each invoice type are described below.

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.

Scheduled Payments

Scheduled payments are created based on payment terms when the invoice header is saved. An invoice header can have one or more scheduled payments.

Distributions

Distribution details include invoice accounting details, the GL date, charge accounts, and project information. An invoice line can have one or more invoice distributions.

Entering Invoices Overview

You can enter and import invoices into Payables in many ways:

Manual Invoice Entry

You usually enter supplier invoices in either the Invoice Workbench or the Quick Invoices window. You can match to purchase orders when entering these invoices. For information on the differences between these windows, see the following section, Differences Between Entering Invoices in the Quick Invoices Window and the Invoice Workbench.

• Invoice Workbench: (Invoice Batches window, Invoices window, Distributions window, and the associated windows). Used to enter any invoice directly into the Payables system. Use this instead of the Quick Invoices when entering complex invoices or invoices that require online validation and defaulting. Also used when entering an invoice that needs immediate action, such as payment. See: Entering Basic Invoices in the Invoice Workbench, and Entering Invoice Batches.
• Quick Invoices window: 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. See: Entering Invoice Records in the Quick Invoices window.

The following features highlight the differences between the Invoice Workbench and Quick Invoices:

• Enter Prepayment type invoices
• Enter Debit Memo type invoices
• Match Credit Memos to invoices
• Calculate taxes on invoices

Online results seen only in the Invoice Workbench Although the following occurs during import, in the Invoice Workbench you can see online results of the following:

• Tax lines and distributions
• Allocation
• Automatic sequential voucher numbering

Tasks performed during invoice entry only in the Invoice Workbench Although you can perform the following tasks in the Invoice Workbench after you have imported Quick Invoices, use the Invoice Workbench if you want to perform any of these tasks during invoice entry:

• Use invoice attachments
• Apply holds to single invoices
• Apply holds to scheduled payments
• Override default payment priority from supplier
• Override the Terms Date
  • Create payments
  • Calculate taxes

  Automatic Invoice Creation

  You can set up your system to automatically create periodic invoices, for example, rent invoices:

  • Recurring Invoices. See: Entering Recurring Invoices.
  • RTS Invoices. If you use Return to Supplier feature in Oracle Purchasing, the system creates these debit memos directly in Payables.
  • Retroactive Price Adjustment Invoices. If Oracle Purchasing users use the Retroactive Pricing of Purchase Orders feature, the system automatically creates Adjustment and PO Price Adjustment invoices.

  Invoices Import

  You can import invoices or invoice information to create invoices in Payables. See: Expense Report Export Program and Payables Open Interface Import Program.

  • Oracle Internet Expenses expense reports: Expense reports your employees enter using a Web browser.
  • Payables expense reports: Expense reports entered in the Payables Expense reports window by the Payables department. See: Expense Reports and Credit Cards, Oracle Payables Implementation Guide.
  • Credit Card invoices: Invoices for employee credit card expenses. The credit card company sends you these invoices as a flat file. See: Procurement Card Integration.
  • EDI invoices. Electronic invoices transferred from Oracle e-Commerce Gateway. See: Running the EDI Invoice Inbound Program, Oracle e-Commerce Gateway User's Guide.
  • XML invoices. Electronic invoices transferred from the Oracle XML Gateway. See: XML Invoices, Oracle Payables Implementation Guide.
  • Invoices from external systems. Invoices, such as invoices from legacy systems, loaded using SQL*Loader. See: Using SQL*Loader to Populate the Payables Open Interface Tables, Oracle Payables Implementation Guide.
  • Oracle Property Manager invoices: Lease invoices transferred from Oracle Property Manager. See: Oracle Property Manager Integration.
  • Oracle Assets lease payments: Lease payments transferred from Oracle Assets. See: Assets Integration.

  Supporting Third Party Payment

  Financial settlement is one of the key components of a business process. It is the final step in completing the business transaction. In the Procure to Pay cycle, suppliers send invoices to customers after delivering goods or rendering services. Once the invoices are received, the accounts payables department of the customer validates the invoices and approves them for payments.

  The payments made to the suppliers during the settlement process are generally dependent on the agreement entered into between the customers and suppliers for carrying on the business transactions. Payments are generally made to the original supplier providing the goods or services, however there can be specific arrangements made wherein the suppliers can specify a different party to be paid on their behalf. The payments made to other parties on behalf of the suppliers are termed as Third Party payments.

  Third Party payments help parties involved in business to set off their liabilities without directly paying them. This reduces the direct funds movements and transactions are settled easily.

  When customers make payments from their Payables system, there might be instructions from the supplier to make the payment to a different party, that is the Third Party. In that case, the remittance of the payment goes to the Third Party. For all legal purpose including 1099, it is treated as a payment to the original supplier.

  The Payables department maintains the Supplier information. Establishing Third Party Payment relationship is part of the supplier maintenance activity.

  The Payables clerk may also have information of the Third Party at the time of entering the invoices. The Payables clerk can have the right to override the Third Party defaulted at the time of invoice entry.

  The Payments clerk processes the payment for the invoices that are due for payment. Generally the payments clerk is aware of the Third Party suppliers to whom the payments can be released on behalf of the supplier. The Payment's department have the right to override the actual party to whom the payment can be made at the time of making payments.

  This functionality lets you do the following:

  • Establish Third Party relationship
  • Default Third Party supplier information when creating invoice and processing payments
  • Override Third Party supplier information on the Invoice and Payments windows
  • Default Remit To Bank Account for the Third Party supplier on Invoice and Payment windows
  • While processing payments to Third Party Supplier:
    • Uses the address of the Third Party supplier, when the Payment Process Type is Printed
    • Uses the Bank and Bank Account information of the Third Party supplier, when the Payment Process Type is Electronic to transfer funds

    Related Topics

    Differences Between Entering Invoices in the Quick Invoices Window and the Invoice Workbench

    You can enter invoices in either the Quick Invoices window or the Invoice Workbench. The following discussion outlines the differences between entry in the two windows to help you decide when to use a particular window for invoice entry.

    When You Should Use Quick Invoices For Invoice Entry

    Use the Quick Invoices window for your everyday entry of invoice records. Use this window for rapid, high-volume entry of Standard and Credit Memo invoices that are not complex and do not require extensive online validation or defaulting of values during entry. You can use this window for purchase order matching and for applying prepayments to the invoice you are entering. See below for a list of invoice entry tasks that cannot be performed in the Quick Invoices window, and that you should perform in the Invoice Workbench instead.

    Use the Quick Invoices window if you want to use the Open Interface Workflow. You can customize the Open Interface Workflow to process your invoice records before you import them. For example, you can perform custom validation of cost center information before you submit import.

    When You Should Use the Invoice Workbench For Invoice Entry

    Use the Invoice Workbench for entering and maintaining more complex invoices for which you require extensive online validation and online defaulting. You may also want to use the Invoice Workbench if you need to perform an action on the invoice immediately after entering it. For example, if you need to enter an invoice and create a payment for it, then enter the invoice in the Invoice Workbench so the record is immediately accessible for validation and payment.

    Functionality available only by invoice entry in the Invoice Workbench

    Use the Invoice Workbench to:

    • Enter Prepayment type invoices
    • Enter Debit Memo type invoices
    • Match Credit Memos to invoices
    • Calculate taxes on invoices

    Online results seen only in the Invoice Workbench

    Although the following occurs during import, in the Invoice Workbench you can see online results of the following:

    • Tax lines and distributions
    • Allocation
    • Automatic sequential voucher numbering

    Tasks performed during invoice entry only in the Invoice Workbench

    Although you can perform the following tasks in the Invoice Workbench after you have imported Quick Invoices invoices, use the Invoice Workbench if you want to perform any of these tasks during invoice entry:

    • Use invoice attachments
    • Apply holds to single invoices
    • Apply holds to scheduled payments
    • Override default payment priority from supplier
    • Override the Terms Date
    • Create payments
    • Calculate taxes

    Entering Invoice Batches in the Invoice Workbench

    You can use invoices batches to:

    • Enter invoice defaults at the batch level that override system or supplier site defaults for all invoices in the batch.
    • Maximize accuracy by tracking variances between the control invoice count and total and the actual invoice count and total resulting from your invoice entry.
    • Easily locate a batch online and review the name of the person who created the batch and the date it was created.

    Prerequisites

    • Enable the AP: Use Invoice Batch Controls profile option. See: Profile Options in Payables, Oracle Payables Implementation Guide.
    • Group unentered invoices into batches.
    • Establish a systematic naming convention to help you locate batches. For example, you may want to include in your invoice batch name the date or the initials of the person who entered the batch. Tip: If you file physical documents by invoice batch name, a systematic naming convention will facilitate retrieval.

    To enter an invoice batch:

    1. In the Invoice Batches window enter a unique value in the Invoice Batch Name field. The Invoice Batch Name must be unique across all operating units. This name appears on your reports and helps you locate the batch online.
    2. Enter the number of invoices in the batch in the Control Count field. Enter the sum of invoice amounts in the batch in the Control Total field. Payables tracks variances between the Control Count and Total and the Actual Count and Total as you enter invoices. Note: If there is a discrepancy between the invoice amount and batch amount, Payables warns you when you exit a batch but it does not prevent Invoice Validation and payment of the individual invoices within a batch. You can make a correction immediately, or you can adjust the invoice batch later.
    3. Enter any Invoice Defaults you want for the invoices. Defaults include: Currency, Type, Document Category, Hold Name, Liability Account, Payment Terms, Pay Group, GL Date, and Hold Reason. These values you enter for defaults override any system and supplier site defaults for the invoices. For example, if you want the purchase order to provide the default value for Payment Terms on the invoice, then leave the Payment Terms field here blank. When you enter individual invoices you can override any values that default from the batch.
    4. Choose the Invoices button and enter the invoices.
    5. Save your work.

    Related Topics

    Entering Invoices in the Invoice Workbench

    Use the Invoice Workbench to enter and maintain complex invoices for which you require extensive online validation and online defaulting. Also, use the Invoice Workbench if you need to perform an action on the invoice immediately after entering it. For example, if you need to enter an invoice and create a payment for it, then enter the invoice in the Invoice Workbench so the record is immediately accessible for validation and payment.

    Related Topics

    Entering Basic Invoices in the Invoice Workbench

    You can use the Invoice Workbench to enter basic invoices. A basic invoice is a trade invoice you receive from a supplier that will not be matched to a purchase order or receipt.

    Prerequisite

    • Enter the supplier and at least one pay site in the Suppliers window. See: Entering Supplier Information, Oracle iSupplier Portal User Guide.

    To enter an unmatched (basic) invoice:

    1. Navigate to the Invoice Workbench.
    2. Enter or accept the default for Operating Unit.
    3. Select Standard or Mixed for the invoice Type. Note: Standard invoices must have positive lines and Mixed invoices can have positive or negative lines.
    4. Enter or accept defaults for the basic invoice header information such as the Trading Partner, Supplier Number, Supplier Site, Invoice Date, Invoice Number, Invoice Currency, and Invoice Amount. Payables prints the address for the Supplier Site on the payment. Payables may use the invoice date you enter as the Terms Date and GL Date default for an invoice, depending on how your Payables Options and Defaults are set up.
    5. Review and update the Payment Terms, Payment Terms Date, Pay Group, Payment Method, as necessary.
    6. Payables automatically schedules payment of the invoice using the following header fields: Invoice Amount, Terms, and Terms Date. Enter or review the defaults for these fields.
    7. Optionally, enter a Distribution Set. The distribution set does not populate the distribution account on the invoice lines window. It only creates distribution lines, not invoice lines.
    8. Enter other invoice header information as required.
    9. To enter invoice lines, select the Lines tab. Enter an invoice line for each line that appears on a supplier's invoice. Note: The Gross Total for the invoice lines must be the same as the Invoice Amount for the invoice header, or the invoice will not pass validation.
    10. Enter the line Type. Possible types are: Item, Freight, Miscellaneous, or Tax. You can only enter tax lines if your tax setup permits. See: Taxes on Invoices.
    11. Optionally, enter the Quantity Invoiced, UOM, and Unit Price of the item you are invoicing.
    12. Enter the total Amount of the invoice line as shown on the supplier's invoice.
    13. Optionally enter a Description of the item you are invoicing.
    14. Optionally, enter a Requestor if you are using the Invoice Approval Workflow. See: Invoice Approval Workflow.
    15. Accept the default GL Date or change as necessary.
    16. If you are entering a Freight or Miscellaneous line and you want to allocate the charge equally across all item lines, check the Prorate Across All Item Lines check box. You can allocate Freight or Miscellaneous lines to specific Item lines, or allocate a specific amount or percent by clicking the Allocate button. See: Allocation. Tax lines are automatically allocated. See: Taxes on Invoices.
    17. Enter Remit to Supplier Name and Remit to Supplier Site if you want to pay to the Third Party. These fields are mandatory and enable you to record the Third Party supplier to whom the payments are to be made. After you select the Trading Partner (Invoicing Supplier), Supplier Site and enter the Invoice Date in the invoice header and tab out, the values in the Remit to Supplier Name and Remit to Supplier Site fields are defaulted on the invoice header based on the relationship defined for the Trading Partner (Invoicing Supplier) at the supplier site level.
    18. Enter distribution information for the line. You can enter distributions in the following ways:
        • Automatically using a Distribution Set. Review the Distribution Set for the line. If the Distribution Set defaulted from the invoice header, you can change the distribution set as required.
        • Automatically by Matching to Purchase Order or Receipt. If the invoice is matched to a purchase order, the distributions default into the invoice from the purchase order or receipt . Review the distributions in the Distributions window.
        • Manually. Enter the distribution account information directly in the Distribution Account field, or enter them in the Distributions window. See Entering Invoice Distributions. The Distribution Account is used only for defaulting. Once it has been defaulted onto the distributions and if the account on the distributions is overridden, it is not corrected or reflected on to the lines.
        • Manually by allocating charges. If you are entering a Freight or Miscellaneous line, you can create distributions by allocation. See:Creating Distributions by Allocation.
    19. If you want to overlay the default distribution information for the line, complete any of the following fields as necessary:
        • Distribution Account
        • Default Account Description
        • Overlay Account
        • Balancing Segment
        • Cost Center Segment
        • Account Segment

    The values you enter in these fields (for example, balancing segment, cost center, and account), will overlay the defaulted account information. When you overlay account information, use the account flexfield structure of your organization.

    For example, assume that the default distribution account for a line is: 01.002.2200.003. The first segment represents the balancing segment, the second segment is the cost center, the third segment is the account, and the last segment is the sub-account. If you enter a different cost center (034) in the Cost Center Segment field, then the system will overlay the Cost Center Segment on top of the default distribution account, resulting in the following account: 01.034.2200.003.

    The overlay information may be ignored in favor of the defaulted account information if:

    • project information is provided and the Project Account Override option is turned off;
    • the invoice is matched to a purchase order or receipt and the system is accruing on receipt or the Allow Account Override option is turned off;
    • the line is for a price or quantity correction and the system is accruing on receipt or the Allow Account Override option is turned off.

    For more information on the Account Overlay feature, see: Account Overlay in Payables Open Interface Import, Oracle Payables Reference Guide.

    For a detailed description of these fields, see: Invoices Window Reference.

    • Automatically. Click Calculate Tax and E-Business Tax determines the applicable taxes based on the invoice header and line information and calculates the appropriate tax lines and distributions. See: Taxes on Invoices.
    • Manually. If your tax setup permits, you can enter tax lines. See: Taxes on Invoices.

    Related Topics

    Attachments in Payables, Oracle Payables Implementation Guide