Pre-requisites, --COA is defined --Set of Books defined --Legal entity, Operating unit, Inventory Orgs defined --Payable setup responsibility defined with all the required profiles assigned
1. Setup Financial Options-
2. Setup Payable options-
3. Define Payment terms-
4. Disbursement Bank setup-
a> Setup Payment programs (optional)
b> Setup Payment format (Optional), If you have custom/specific bank payment format then define payment formats,
c> Setup Disbursement bank (Required), You must setup your disbursement bank (internal bank) through which you are going to pay your suppliers,
This concludes your Oracle payable setup. You are ready to create Invoices and pay your suppliers.
Assuming your employees are setup in Oracle with valid assignments.
Step 1 - Choose Setup of Books (This is the most important setup and can not be undo once setup. So, pay special attention while doing this setup)
Choose the Correct Setup of Book name. Once setup, this can not be changed. So, be very careful while choosing the set of book name.
Step 2 - Setup Purchasing Options
Receipt Accounting (Key fields)- Accrue Expense Items ("Period End") AP Expense Accrual account -Liability account type Accrue inventory items (Here it has been set up as "At Receipt")
Step 2 - Setup Purchasing Document Types
For more details on each field, you can go to the help screen of this page. Security level - This option gives you control to set at which level you want this document to be accessible.
Step 3 - Setup Purchasing Approval Groups Define the approval groups for your documents. Document total -Enter the $ limit for this approval group. Account range -Enter the same $limit and complete account range starting from 000 to ZZZ for all segments.
Step 4 - Assign PO Approval Groups to Job or Position depending upon setup in Purchasing options
Assign the approval groups defined in step 3 to Jobs / Positions (depending on the Purchasing options/ Human resources setup).
Step 5 - Setup Buyers Setup new Buyers.
Step 6 - Setup Inventory items or/and Purchasing categories Setup Purchasing Categories/Inventory items (if you have Inventory setup, optional) to be used while creating POs.
Step 7 - Define Default accounts for Purchasing categories (Optional) This is an optional setup. If setup then when a purchasing category is chosen while creating the PO, the charge or expense account automatically gets defaulted to the PO at PO distribution level. Work with your business users to get the default accounts for each category to set this up.
Step 8 - Define any custom PO Line types (Optional)
That concludes Purchasing setup. You can now create POs.
In this post we will see how to setup a new Set of books in Oracle. We will set of a new set of books for a company called IPL for it's India operations.
Pre-requisite for setting up Set of Books in Oracle is, 1. Chart of Accounts (COA) setup Check out the earlier video on COA setup video. I have considered a 5 segment chart of accounts as part of our DEMO setups for a company called IPL.
2. Calender
3. Currency
This is the well known 3C (chart of accounts, calender, currency) for SOB setup in Oracle. Once the above pre-requisites are setup, set of book can be defined.
Some other key elements for setting up of SOB apart from the above are,
a. Retained earnings account: This is the share holders / equity account. Oracle GL make necessary updates to this account whenever you do transactions in expense / income account through journals / subledgers etc. The account type for this account should be "Ownership/Stockholder's Equity"
b. Translation Adjustment account: This is the account used by Oracle GL for any difference happen (like difference due to rounding) while you translate your account level transactions from functional Currency to any other currency to make your journal balanced at account level in your translated currency. Again the account type for hti saccount is "Ownership/Stockholder's Equity"
Check out the following video for setting up Calender, currency and set of books,
Chart of Accounts setup in Oracle financials is the most important setup. Thorough analysis, consideration must be done before finalizing the chart of accounts of any organization with inputs from finance department such as reporting requirement, level at which transaction details are required etc.
Following video shows how to setup Chart of Accounts in Oracle EBS 11i,
I have been trying to post this since long but due to current workload and bandwidth issues was not able to post this. Here I am going to explain the steps to setup a new entity / operating unit in Oracle EBS 11i. This is from my experience of setting up new books and subledger and is completely practical. I was at a client site, one of the top internet companies which has businesses spanning almost all of the countries in the world for which we had to setup GL books and subledger for the newly added business regions.
Steps to define a New Entity in Oracle EBS 11i,
Step 1 - Define Set of Books (SOB) Before defining SOB, you have to setup followings- 1.1 Define "Chart of Accounts" >Define "Value sets" for Accounting Segments >Define "Chart of Account structure" >Define "Chart of Account Segments" >Define "Segment Values" Check out this video for setting up Chart of Accounts,
1.2 Define "Calender" for the SOB
1.3 Define "Currency" for the SOB
1.4 Define Set of Books (SOB) Check out the following video for 1.2, 1.3, 1.4
Step 2 - Define GL responsibilities and assign following profile values, a> Assign profile "GL Set of Books Name", value: Enter the new SOB name at responsibility level b> Assign profile "HR: User Type", value:"HR User" at responsibility level
Step 3 - Define New Legal Entity 2.1 Define Location for New Legal Entity 2.2 Define the New Legal Entity
Step 4 - Define Opearting Unit
Step 5 - Define Inventory Organization Define Receiving options (Pay special attention while assigning accounting code combinations)
Step 6 - Navigate to "System Administrator" responsibility > Go to submit request screen > Run "Replicate Seed Data" request > Enter the new operating unit name as the parameter for the request
Step 7 - Define subledger responsibilities (Setup, Transaction, Manager, Inquiry) for the new operating unit and assign following profiles at responsibility level,
a> "GL Set of Books Name", value: Enter the new SOB name b> "HR: User Type", value:"HR User" c> "MO: Operating Unit", value:Enter the new OU name d> "MO: Top Reporting Level", value:"Operating Unit" e> Optionally setup profile "AP: Use Invoice Batch Controls" if you want to use Invoice Batch workbench f> Optionally setup profile "Sequential Numbering"
Step 8 - Define Cross validation rules
Step 9 - Define Security rules and assign to newly created responsibilities
Here we will be discussing about, What is "Zero Payament" payment Why is "Zero Payment" payment required What are the required setups for "Zero Payment" payments in Oracle payables How to do "Zero Payment" payments in Oracle payables
What is "Zero Payment" Payment?
As the name suggests, a "Zero Payment" payment is a payment having value 0 (zero) i.e. the payment can be 0 USD / EUR / INR etc depending on the payment currency.
Why is "Zero Payment" payment required?
There can be various reasons to make a "Zero payment". Few possibles reasons are, --Legal requirements of the country There can be a legal requirements in countries (like EMEA) where business is being carried out / transactions are booked, wherein you just can not cancel an accounted invoice. To cancel such invoices you need to generate an internal DEBIT memo or CREDIT memo (for paid invoices) and then apply to the invoice which needs to be canceled. In such case the original invoice is not canceled and you are just making ZERO liability to the supplier for the invoice. By doing so, the invoice remains unpaid and also the accounting transaction does not flow through all the events like payment, cash clearing. For all invoices the transactions need to flow through all the events as mentioned above if it has not been canceled. In order to acheive that you make a "Zero Payment" payment just to record the transaction. This payment would not go to the supplier.
--Accounting segment values getting deactivated If any of the charge account segment is deactivated (like cost center / natural account etc) then an accounted invoice can not be canceled and the only alternative to make the liability zero is to create a debit memo or CREDIT memo (for paid invoices) and then apply to the invoice which needs to be canceled as mentioned above.
Below video shows, --Required setup to be done in Oracle for creating "Zero Payment" payments --Creating a "Zero Payment" payment
