Oracle Financials

Test No.10
PAYABLES - II

Dt: 4th Feb 2006

01.What are different status in payment batch ?

ANS - Status (Payment Batches window only). Payables displays the status of the payment
batch. Payables displays the status in red if there is an error, for example, if the concurrent
manager goes down during a process.
Suggestion: If you are in the Payment batches window and you want to monitor
the status of a payment batch that is, choose Refresh Status from the Tools
menu.
1. Building. Payables is determining which invoices will be paid by each payment
document.
2. Built. Payables has determined which invoices will be paid with each payment
document. You can now review the Preliminary Payment Register, Modify the Payment
Batch, or Format the Payment Batch.
3. Cancelled. You have cancelled the payment batch.
4. Cancelling. Payables is cancelling the payment batch.
5. Confirmed. You have confirmed the payment batch.
6. Confirming. Payables is either confirming or partially confirming the payment batch
based on the action you selected in the Confirm Payment Batch window.
7. Formatted. Payables has completed formatting your payments and has created the
output file that you can use to print checks or, if you are making electronic payments,
you can deliver the output file to the e-Commerce Gateway or your bank for
processing.
8. Formatting. Payables has created the output file that you can use to print checks or, if
you are making EFT payments, you can deliver the output file to your bank for
processing.
9. Modified. Payables has modified the payment batch based on the modifications you
made in the Modify Payment Batch window.
10. Modifying. Payables is modifying the payment batch based on the modifications you
made in the Modify Payment Batch window.
11. Rebuilding. You have modified a payment batch, and Payables is rebuilding the
modified payment batch.
12. Restarting. You have confirmed a partial payment batch and have chosen Restart
Payment Batch in the Confirm Payment Batch window. Payables is rebuilding and
reformatting the remaining portion of the payment batch.
13. Selected. Payables has selected invoices that match the payment batch criteria you
entered.
14. Selecting. Payables is selecting invoices that match the payment batch criteria you
entered.
15. Unstarted. The payment batch is unstarted.

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Oracle Financials

Test No.10
PAYABLES - II

Dt: 4th Feb 2006

2. Explain The concept of Automatic Offset ?

If you enter invoices for expenses or asset purchases for more than one balancing segment, you
might want to use Automatic Offsets to keep your Payables transaction accounting entries
balanced.
If you do not use Automatic Offsets, Payables creates a single liability accounting entry for
invoice transactions (if you use accrual basis accounting) and a single cash type accounting
entry for payment transactions.
When you use Automatic Offsets, Payables automatically creates balancing accounting entries
for your transactions. The GL account that each of the offsetting accounting entry is charged to
depends on which method you use, Balancing or Account:
o

Balancing. Payables builds the offsetting GL account by taking the balancing

segment (usually the cost center code) from the invoice distribution and
overlaying it onto the appropriate default GL account, for example the Liability
account from the supplier site.

Account. The Account method takes the opposite approach with one segment
(the designated account segment) being retained from the default GL account
and all other segments being retained from the invoice distribution.

Although Payables builds the GL account to which amounts are charged differently depending
on the method you use, in either case Payables automatically allocates the amount across the
following accounting entries for an invoice:
o

Liability

Withholding Tax (if you apply the withheld amount at Approval time)

Payables also allocates the following entries for a payment:

o

Cash (if you use a pooled bank account)

Cash Clearing (if you use a pooled bank account, and if you account for
payments at clearing time)

Discount

Exchange Gain/Loss

Future Dated Payment

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Oracle Financials

Test No.10
PAYABLES - II

Dt: 4th Feb 2006

Rounding

Withholding Tax (if you apply the withheld amount at Payment time)

Bank Charges

Bank Errors

Automatic Offsets affects only accounts listed above. For accounts other than these, for
example, Interest Liability, you must make manual journal entries in your general ledger to
keep the entries balanced at the balancing segment level.

Example
The following diagram illustrates how Payables builds a GL account on a liability distribution
using the two different methods:

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Oracle Financials

Test No.10
PAYABLES - II

Dt: 4th Feb 2006

3.What is an ERS? How is it setup?

Payment on Receipt enables you to automatically create standard, unapproved invoices for
payment of goods based on receipt transactions. Invoices are created using a combination of
receipt and purchase order information, eliminating duplicate manual data entry and ensuring
accurate and timely data processing. Payment on Receipt is also known as Evaluated Receipt
Settlement (ERS) and Self Billing.
You can automatically create invoices with multiple items and distribution lines, and include
tax.
You define which supplier sites participate in Payment on Receipt and enforce matching rules
to ensure the proper payments are made to the suppliers.
Amount - Payment on Receipt builds invoices with the following information: Determined by
multiplying the Quantity received by the Purchase Order Item Unit Price.
Payment Terms - Defaulted from the purchase order payment terms or from the supplier site
payment terms, depending on your Oracle Public Sector Payables setup.
Tax - Based on Tax Codes on each purchase order shipment, or the default tax hierarchy in
Payables.
If the purchase order currency and the supplier site Payment Currency (in the Supplier Sites
window) are not fixedrate currencies (for example, not eurorelated currencies), Payment on
Receipt builds the invoices this way, regardless of the supplier site Invoice Currency:
Invoice Currency - Defaulted from the purchase order Currency.
Payment Currency - Defaulted from the purchase order Currency.
If the purchase order currency and the supplier site Payment Currency are fixedrate currencies
(for example, eurorelated currencies), Payment on Receipt builds the invoices this way,
regardless of the supplier site Invoice Currency:
Invoice Currency - Defaulted from the purchase order Currency.
Payment Currency - Defaulted from the supplier site Payment Currency. For example, if the
purchase order Currency is francs and the supplier site Payment Currency is the euro, the
Payment Currency on the invoice is the euro.
Defaulted from the supplier site Invoice Currency if no supplier site Payment Currency is
defined and the supplier site Invoice Currency is a fixedrate currency.
Defaulted from the purchase order Currency if the supplier site Invoice Currency is not a
fixedrate currency. If the Alternate Pay Site is populated for the Supplier Site used on the

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Oracle Financials

Test No.10
PAYABLES - II

Dt: 4th Feb 2006

Purchase Order, the invoice created is for the Alternate Pay Site, otherwise the Supplier Site
on the Purchase Order is used. The Supplier Site used for the invoice must be defined as a Pay
Site.
4. Explain the Withholding Tax Accounting.

5.What is the format of Interest Invoice number?

Ans. Interest Invoice format no. is splited into three segments they are Invoice No on which
interest is calculated, INT and no. of times paid the Example as follows
Invoice No. 113 INT- 1
Description 113 is stands for the INT Is the symbol
invoice No. On
for Interest
which interest is
paid or calculated

1 is the suffix attached to the

interest invoice depends on the
No. Of times interest paid on a
particular Invoice e.g. if you paid
interest for second time then the
invoice will generate with suffix 2

6. What are different types of special calendar?

There are four special calendars they are
1.
2.
3.
4.

Recurring Invoice
Withholding Tax
Payment Terms
Key Indicator

7.How the terms date will be calculated for recurring invoices?

When Payables creates recurring invoices, the invoice date is the first date of the period in
which the recurring invoice is created. The Terms Date depends on the Terms Date Basis
setting at the supplier site, but is calculated differently than for regular invoices:
If the Terms Date Basis is set to System Date, then the Terms Date is the same date that
the recurring invoice was created.
If the Terms Date Basis is set to anything else, then the Terms Date is the invoice date,
which is the first day of the period in which the recurring invoice is created.
8.What is the default invoice date for recurring invoices?
Every month first date will be the default date for recurring invoice.

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Oracle Financials

Test No.10
PAYABLES - II

Dt: 4th Feb 2006

9.How to define foreign currency recurring Invoice Template ? What are the additional
considerations?
Optionally change the invoice currency, which is your functional currency unless you have a
supplier site default. If you enter a foreign currency, enter exchange rate information when you
create invoices based on the template.
10. What are the prerequisites for auto creation of Debit Memo of RTS transactions?
Check the check box Create Debit memo for RTS transactions under purchasing Tab page in
Supplier site. And in purchase module in Returns Form Check the Check Box Create debit
memo.
11.What is the number format of invoice generated based on ERS? Name the profile
option related to this.
The Name of the Profile is PO: ERS invoice Number Prefix.
The number format of invoice generated are,
Default Profile name.
Depends upon the Invoice summery level (Purchasing Tab page in Supplier site) the
number will vary either Receipt No. or Packing slip No. Or Supplier No.
System generated No.
12.What reports will be shown if you run concurrent program for Expense report?
Payables Invoice Import Audit Report
Payables Invoice Import Exceptions Report
Payables Invoice Import Prepayments Applied Report
13.What is the relevance of Withholding tax group?
Use this window to define withholding tax groups that include multiple Withholding Tax type
tax codes. You can assign the same tax code to more than one group. When you assign a
withholding tax group to an invoice or distribution, Payables calculates invoice withholding tax
based on every tax code in the withholding tax group. For example, you assign a withholding
tax group to an invoice or distribution if you need to withhold taxes at both the local and
country level, each withheld at different rates and remitted to different tax authorities. You
define and assign to the invoice or distribution a Withholding Tax Group that includes both
taxes.
You rank all of the tax codes in a withholding tax group when you define the group. When you
enter an invoice and enter a withholding tax group, Payables calculates the taxes in order of

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Oracle Financials

Test No.10
PAYABLES - II

Dt: 4th Feb 2006

rank. Lower ranked taxes are applied to the amount of the invoice or distribution amount less
the previous withholding tax amounts.
14. What are different rate structure for Withholding Tax ?
Period Limit. After you pay a certain amount for a withholding tax in a period, Payables does
withhold further taxes. For example, for each special calendar period, Payables withholds no
more than $10,000.
If you select this value you must enter values for the Period Limit, and Calendar fields. You
cannot enter values for the Amount Basis and Period Basis fields.
Flat Rate. The withholding tax has no amount or period limits. If you select this value you
cannot enter a value in the Amount Basis, Period Basis, and Period Limit fields.
Amount Ranges. The tax rate depends on how much you have already paid during a time
period. Base the paid amount on either the gross amount of total paid invoice amounts, or on
the total amount of tax withheld. The time period can be per withholding tax calendar period or
per invoice. For example, define a tax that for each invoice that withholds at a rate of 10% until
you have paid $1000 in tax, after which it withholds at 15%. If you select this value you must
enter values for the Amount Basis and Period Basis fields. If you select Period as your Period
Basis, you must also select a Calendar. You cannot enter a value for Period Limit.
15. What is the relevance of Period Basis field in withholding tax details from and when
it can be chosen?
Period Basis. To enter amount ranges in the Tax Rates region, select Amount Ranges as the
Rate Type, and specify an Amount Basis and a Period Basis.
Invoice. Select Invoice if you want to apply an amount range to each invoice.
Period. Select Period to apply an amount range to a Withholding Tax period. If you
enter a value here, then specify the name of the special calendar that uses the periods
you want to use.
16. What are the Pre requisites for Withholding Tax Invoices?

Tax authority to defined as supplier

Tax codes & Tax groups to be defined
Special calendar to be defined
Enable the Check box Use withholding Tax under Withholding Tab page in payables
options.

17. How to view supplier Balance?

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Oracle Financials

Test No.10
PAYABLES - II

Dt: 4th Feb 2006

(N) Invoices Inquiry Invoices, here you can find out balance of supplier (B) Calculate
Balance Owed by providing supplier information at Header.
OR
Go to the Invoice work bench and go to the Menu - View - Find the screen will be opened as
find invoice in that give your supplier name and site and click on the Calculate Balance
Owed
18.What is the format of Withholding Tax Invoice Number?
Withholding Tax System Generated No. Invoice distribution Line No.
19. What are there any payable options related to expense Report.

Default Template
Payment Terms
Pay Group
Payment priority
Apply advance
Automatically Create employee as supplier
Hold unmatched Expense Report

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