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ORACLE PAYABLES
1.What are the modules that are interfaced with Oracle payables?
General Ledger, Purchasing.
2. How does the financial information defaults in payables?
Financial Option > Payables > Supplier > Supplier Site > Invoice > Distribution and
Schedule of Payment.
3. What is a distribution set? What are the types of distribution set?
Distribution Set is to automatically distribute Invoice amount in to different GL
Account code Combination.
Type of Distribution Set
Full Distribution and Skeleton Distribution Set
Full Distribution means we know the exact percentage and exact account code
combination. The sum of the distribution percentages must equal 100 or 0.
Whereas in Skeleton we don’t the percentage but we know the GL Account Code
Combination. So percentage should not be entered here.
4. What are the types of invoices used in payables?
Standard, Credit Memo, Debit Memo, Mixed, Prepayment, Expense Report,
Withholding Tax, PO Default, Quick Match.
5. What are the encumbrance options for AP? How are they used?
Requisition Encumbrance, and PO Encumbrance available in Financial Option.
Encumbrance used to reserve the Funds at the time of raising the Requisition or
creating of PO.
6. What are the different types of supplier sites?
Pay, Primary Pay, RFQ, Purchasing, Procurement Card.
7. What are the types of Accounting Methods?
Accrual, Cash.
8. What is Automatic Offset Methods?
Payables automatically create balancing accounting entries for your invoice and
payment transactions.
Three types of Offset Methods 1. None, 2.Balancing, 3. Account.
9. What is Pay Group?
Pay Group is to group invoices into supplier category for payments.
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Frequently Asked Questions in Oracle Financials
Prepayment Settlement Days. Number of days you want Payables to add to the
system date to calculate a default settlement date for a prepayment. Payables prevent
you from applying the prepayment to an invoice until on or after the settlement date.
12. What are the levels of Tax calculation?
Level at which the tax has to be calculated.
Levels: line level, header level and tax code level
15. What is with holding invoice and what are its steps?
Invoice created on the withheld amount that has to be paid to the tax authority from the
supplier.
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Types: Manual and automatic with holding. Only when allow manual withholding is
enabled manual creation of invoice is possible.
Steps: Enable use withhold invoice, Select option when to apply and to create withhold
invoice.
18. How do you create a foreign currency invoice and a foreign currency payment?
Any invoice that has been created from other than the functional currency.
Steps: Payables option, in currency tab enables use multiple currencies.
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27. What are withholding taxes? How are they applied on invoices in payables?
Used for deducting part of amount from suppliers invoice.
Types:
2. Period: Amount is specified for that period, beyond which the tax is not
withholder with use of special calendar.
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The following are the Payment Programs which is used in the payment batches.
1. Build Payment Programs
2. Format Payment Programs
3. Separate Remittance Programs.
32. What is difference between entering Invoices in Invoice Gateway and Invoice
Work Bench Window?
Invoice Workbench used for entering and maintaining more complex invoices for which
you require extensive online validation and online defaulting where as Invoice Gateway
used 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.
When you use the Invoice Gateway, you enter invoice header and line information in the
same window, and can view only one record at a time. In the Invoice Workbench, you
enter invoice header information in the Invoices window, and the related invoice
distributions in the Distributions window. You can view multiple invoices at the same
time in the Invoices window.
In the Invoice Workbench we can enter and apply prepayments. In the Invoice Gateway
we cannot enter prepayments, but we can apply existing prepayments to invoices you
enter.
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Frequently Asked Questions in Oracle Financials
When you check the Prorate in the Invoice Lines it will prorate expenses and Tax
according to the Proportion of Line amount in the Invoice.
Offset Taxes
Offset tax codes are used to record self–assessed taxes on invoices, while reducing or
completely offsetting tax liability. Offset taxes have negative–amount rates, so when you
use them, you enter negative–amount invoice tax distributions.
It used in European Union, if you are a member of the European Union (EU), you can
report on these zero–rated taxes using the Intra–EU VAT Audit Trail report.
36. What are the types of Holds that are used to prevent the payment of Invoice?
Holds that we can apply manually or that Payables applies, prevent payment and, in some
cases, creation of accounting entries for an invoice. We can remove holds that we apply,
and we can manually release certain holds that Payables applies during Approval.
Payables provide some generic invoice holds for our use, and we can define our own,
based on our invoice approval needs. We can also prevent payment of supplier invoices
by placing a hold on the supplier rather than on each individual invoice.
There are two major category of hold 1] Manual Hold 2] System Hold.
Manual hold we can create and release manually where as system hold is created by
system and normally released by system after due rectification.
There are three types of holds we can use to prevent payment of an invoice
Invoice Hold. We can manually apply one or more Invoice Hold Reason Approvals
(”holds”) to an invoice using the Invoice Holds window of the Invoice Workbench.
Scheduled Payment Hold. We can hold payment on part of an invoice by placing one or
more of the scheduled payments on hold in the Scheduled Payments window of the
Invoice Workbench.
Supplier Hold. In the Supplier Sites window, we can enable the Hold All Payments,
Hold Unapproved Invoices, or Hold Unmatched Invoices options. We also have the
option of
Specifying an Invoice Amount Limit for a supplier site.
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2) Receipts Matching
3–Way. Control checks 1 and 2, plus:
3. Quantity billed <= Quantity received
3) Invoice Matching
4–Way. Control checks 1, 2, and 3, plus:
4. Quantity billed <= Quantity accepted
43. What is the Prepayment Invoice? What are the Types of Prepayment Invoice?
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Auto Install automatically installs these and other necessary Oracle Purchasing
application tables when you install Payables.
2. The bank account must have at least one payment document that uses the
Recorded or Combined disbursement type.
Building. Payables are determining which invoices will be paid by each payment
document.
Built. Payables have 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.
Cancelled. You have cancelled the payment batch.
Cancelling. Payables are cancelling the payment batch.
Confirmed. You have confirmed the payment batch.
Confirming. Payables is either confirming or partially confirming the payment batch
based on the action you selected in
The Confirm Payment Batch window.
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.
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.
Modified. Payables have modified the payment batch based on the modifications you
made in the Modify Payment Batch window.
Modifying. Payables are modifying the payment batch based on the modifications you
made in the Modify Payment Batch window.
Rebuilding. You have modified a payment batch, and Payables is rebuilding the
modified payment batch.
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Frequently Asked Questions in Oracle Financials
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.
Selected. Payables have selected invoices that match the payment batch criteria you
entered.
Selecting. Payables are selecting invoices that match the payment batch criteria you
entered.
Unstated. The payment batch is UN started.
Oracle Receivables
1. What are the two key flex fields in Oracle Receivables and what is its purpose?
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Frequently Asked Questions in Oracle Financials
• Line First - Tax After: Apply to the open line item amount first.
Apply any remaining amount in the following order: tax, freight, and
then finance charges.
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Receivables creates default accounts for revenue, receivable, freight, tax, unearned
revenue, unbilled receivable, finance charges, bills receivables accounts, and Auto
Invoice clearing (suspense) accounts using this information.
When you enter transactions in Receivables, you can override the default general
ledger accounts that Auto Accounting creates.
You can control the value that Auto Accounting assigns to each segment of your
Accounting Flex field, such as Company, Division, or Account.
You must define Auto Accounting before you can enter transactions in Receivables.
8. What are the different classes of Transactions available in Receivables?
(I) Chargeback (ii) Debit Memo (iii) Credit Memo (IV) Deposit (v) Guarantee (VI)
Invoice
9. What are Transaction Sources?
Receivables uses transaction sources to control the transaction and transaction batch
numbering, provide default transaction types for transactions in batch, and to select
validation options for imported transactions. Receivables provide the following
predefined transaction sources: MANUAL–OTHER, DM Reversal, and Chargeback.
10. What are Adjustment Approval Limits? Where & why are they used?
Approval limits, defined in the approval limits window are used for adjustments
created in receivables and request for credit Memos initiated from I-Receivables.
Receivables use transactions that have a document type of Adjustment when we
create an adjustment in the Adjustments, Submit Auto Adjustments and Approve
Adjustments windows.
When you enter an adjustment that is outside the approval limit range, Receivables
assigns the adjustment a status of pending until someone with the appropriate
approval limits either approves or rejects it.
11. What are the pre-requisites for entering a standard invoice in Receivables?
Transaction source and Transaction Type, Customer with Business purpose usage
and payment terms should have been predefined. And the class should be selected as
Invoice.
12. What are the types of tax methods in Receivables?
(I) Location Based Tax (i.e.) Sales Tax (ii) VAT Tax
13. What is an Auto cash Rules?
Auto cash rule set provides a set of rules which Receivables should follow for
applying the receipts against the transactions. The default auto cash rule set can be
specified in the System Option.
14. What are Accounting Rules and Invoicing Rules? Where it is used?
Accounting rules is to create revenue recognition schedules for the invoices.
Accounting rules determine the number of periods and
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Frequently Asked Questions in Oracle Financials
Percentage of total revenue to record in each accounting period. It can be used with
transactions that are imported into Receivables using Auto Invoice and with invoices that
was created manually in the Transaction windows.
If you want to credit an invoice that uses invoice and accounting rules to schedule
revenue and billed receivable recognition, you can specify
How you want to adjust this invoice’s revenue account assignments by choosing a Rules
Method in the Credit Memos window.
You can assign a default accounting rule to your items in the Master Item window
(Invoicing tabbed region) and to your Standard Memo
Lines in the Standard Memo Lines window.
Attention: Invoicing and Accounting Rules are not applicable if you are using the Cash
Basis method of accounting. If you use the Cash Basis method, Auto Invoice will reject
any transaction lines that are associated with invoice or accounting rules.
15. What is revenue recognition?
Run the Revenue Recognition program to generate the revenue distribution records for
your invoices and credit memos that use
Invoicing and Accounting Rules. You assign accounting rules to recognize revenue over
several accounting periods. The Revenue Recognition program will create distribution
records for the invoices and credit memos that you create in Receivables and import
using Auto Invoice.
The Revenue Recognition program uses the accounting distribution sets that you specify
in the Transactions window or import into Receivables
Using Auto Invoice to determine the accounts of your newly created revenue distribution
records.
There are two Revenue Recognition programs: Revenue Recognition and Revenue
Recognition Master. The Revenue Recognition Master program is for parallel processing
only and takes advantage of the Oracle scalability feature to reduce processing time by
running on multiple processors, or workers. The Revenue Recognition Master program
determines the maximum number of parallel processors needed for your transaction
volume and uniformly distributes the processing over these workers. You can set a
maximum number of processors for the Revenue Recognition Master program to use at
runtime. This scheduling capability allows you to take advantage of off–peak processing
time. You choose the Revenue Recognition program that you want to use at runtime.
16. What are the pre-requisites for entering a Manual receipt in AR?
Invoices should have been defined against which the receipts will be applied and
the payment method should be predefined and attached to the receipts.
17. What is a Receivable Activity?
It is an activity specific to the organizational needs for Miscellaneous Receipts,
Finance Charges, Bank Errors and Adjustment transactions.
18. What are Receipt Classes and Receipt Sources?
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Receipt Class: It is to define the processing steps, payment method name, and
remittance bank for processing the payments received from customers.
Receipt Source: It will be used to enter receipts in batches for both manual and
automatic receipts. It is a grouping of Receipt class, Payment method and Remittance
bank account.
19. What are Statement Cycles? How can you print a Statement for a customer?
Statement cycles are to determine when to send statements to the customers. You
assign these cycles to your customer and site level profiles. Receivables let you generate
statements for all customers associated with a specific statement cycle.
20. What is Auto lockbox? What are its related steps?
Auto Lockbox (or Lockbox) is a service that commercial banks offer corporate
customers to enable them to outsource their accounts receivable payment processing. An
Auto Lockbox operation can process millions of transactions a month.
Auto Lockbox eliminates manual data entry by automatically processing receipts that are
sent directly to your bank. You specify how you want this information transmitted and
Receivables ensures that the data is valid before creating Quick Cash receipt batches.
You can automatically identify the customer who remitted the receipt and optionally use
Auto Cash rules to determine how to apply the receipts to your customer’s outstanding
debit items.
You can also use Auto Lockbox for historical data conversion. For example, you can use
Auto Lockbox to transfer receipts from your previous accounting system into
Receivables. Auto Lockbox ensures that the receipts are accurate and valid before
transferring them into Receivables.
Auto Lockbox is a three step process:
1. Import: During this step, Auto Lockbox reads and formats the data from your bank file
into the Auto Lockbox table using an SQL*Loader script.
2. Validation: The validation program checks data in theAutoLockbox tables for
compatibility with Receivables. Once validated, the data is transferred into QuickCash
tables. At this point, you can optionally query your receipts in the QuickCashwindow and
change how they will be applied before submitting the final step, Post QuickCash.
3. Post QuickCash: This step applies the receipts and updates your customer’s balances.
21. What is an Aging Bucket?
Aging Bucket are time periods that are used to review and report on open
receivables. For example. The 4 bucket aging bucket that receivables provides
consists of 4 periods:
(I) -999 - 0 past due (ii) 1 - 31 days past due (iii) 31 - 61 days past due (IV) 61 - 91
days past due
When we create our collection reports or view our customer accounts, we can
specify an Aging Bucket and ‘as of date’ and Receivables will group the transaction
and their amounts in the appropriate days past due period.
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22. What are Tax Exemptions, Tax Exceptions and Tax Groups?
Exemptions: It is to reduce the gross tax associated with a tax code and enables us
to arrive at the effective tax rate. It can be applied on customers, items and Range of
items. It can be restricted to the specific locations of the customers. The tax
authorities can specify exceptions for Location based taxes and Vat.
Exceptions : When the tax authorities provides a different Location based tax rate
for the inventory items sent to specific Locations, this rate is referred to as Tax
Exception rates. It can be applicable for individual Inventory or range of Items and
not for customers.
Tax Groups: It is used to group multiple VAT codes. Hence we can apply
multiple VAT codes to a single distribution line.
For Example: Grouping GST and Ontario PST and apply that tax group to a
distribution line. The tax calculation creates two tax lines, one for GST and
other for Ontario PST.
23. What are Dunning Letters?
Dunning Letters are the Warning/Reminder letters to the customers for their overdues.
24. What are Grouping Rules and Line Ordering Rules?
Grouping Rules: It specifies how the lines, which have been imported from external
sources, should be grouped into Invoices, Debit memo and Credit memos. Auto
Invoices requires mandatory grouping of certain transactions attributes. Receivables
automatically apply these mandatory transactions to any grouping rule which have
been defined. Therefore the grouping rules specify the attributes, which should be
identical across the lines, so that they can form part of one transaction.
Line Ordering Rules: It specifies the order and number in which the lines will
appear in the transaction after it is grouped. We can attach the Line Ordering Rule to
the same grouping rule. Line ordering Rule is optional.
25. What are Bill Receivable Transactions? What are its related setup steps?
A bill receivable is a document that your customer formally agrees to pay at some
future date (the maturity date). The bill receivable
Document effectively replaces, for the related amount, the open debt exchanged for the
bill. Bills receivable are often remitted for collection and used to secure short term
funding.
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Lines Only: Calculate the discount amount based on only the line amounts of your
invoices.
Lines, Freight Items and Tax: Calculate the discount amount based on the amount of
line items, freight, and tax of your invoices, but not freight and charges at the invoice
header level.
Lines and Tax, not Freight Items and Tax: Calculate the discount amount based on the
line items and their tax amounts, but not the freight items and their tax lines, of your
invoices.
28. What are Natural Application only and Allow over Application options in
transaction types?
Natural Application Only: Receivables does not allow the creation sign (Positive,
Negative or any sign) of the transaction to be changed by virtue of receipt application
or any other activity against the transaction. For Example : if the Receipt is $1500
against the Invoice value of $1000 then the Receivable allows only $1000 to be
applied against the transaction and thus the balance is brought down to 0.
Allow Over Application: Receivables will allow the transactions to be over applied.
If the Receipt is $1500 against the Invoice value of $1000 then the receivables will
allow the entire balance and the due for the transaction will become -$500. (i.e.,) It
will allow the creation sign to be violated.
29. What are Transmission Formats? What are the transmission formats provided
by receivables?
Transmission format window is used to define the transmission formats that auto
lockbox uses when importing data into receivables. Transmission formats specify
how data in the lockbox bank file is organized so that it can be successfully imported
into the receivables interface tables.
1. Example (arxmpl.ctl): A format that contains an example of lockbox header
information, several receipt records, and overflow receipt records
2. Default (ardefd.ctl): A standard BAI (Bank Administration Institute) format used
by most banks.
3. Convert (arconv.ctl) : A standard format used for transferring payment
information from other systems.
4. Cross Currency (arxcurr.ctl) : A default format used for importing cross currency
receipts.
5. Zinging (arzeng.ctl): A format used to import bank files in the Japanese Zen gin
format (Alternate Names Receipt Matching Window)
30. What are various Business Purpose Usages given by receivables, which can be
assigned to a customer?
Ship-to, Bill-to, Statement, Dunning, Legal, Marketing Etc. are the various Business
purpose Usages given by Receivables. The Bill-to site is mandatory for customers. Others
are Optional.
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Once rules have been associated with an invoice, Receivables creates the revenue
distributions for the invoice when you run the Revenue Recognition
program for the period in which the rules fall.
35. What is the difference between Deposit and Guarantee Transactions?
Deposit: It is the pre-payments made by a customer that should be adjusted against
the future debit transactions that are raised with respect to these pre-payments.
Guarantee: It is a documentation of the promise made by the customer to obtain the
goods from the organization. This promise is documented as a guarantee. The
customer does not make payment for the guarantee.
36. What are the methods of creating credit transactions?
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Frequently Asked Questions in Oracle Financials
Debit Memo Reversal: When you create this type of reversal, Receivables does not
update any of the receipt activity associated with the original receipt. The new debit
memo reversal is actually a new receivable that replaces the item closed by the original
receipt. Receivables require that you create a debit memo reversal if:
– You are reversing a receipt that you previously applied to a chargeback and this
chargeback has had any activity against it (for example, another receipt, credit
memo, or adjustment), or
– the chargeback or adjustment was posted to your general ledger When you create
a debit memo for a receipt reversal, Receivables creates a line on your debit memo
that displays the original receipt number associated with the debit memo. In
addition, when you save your reversal, Receivables assigns a unique transaction
number to your new debit memo.
Attention: You cannot create a debit memo reversal for a miscellaneous (non–invoice
related) receipt.
43. What are Cross Currency Receipts? How do you create them?
When your customer remits payment for an invoice, debit memo, or chargeback, the
receipt is usually in the same currency as the transaction. However, there may be times
when your customer remits payment in a currency that is different than the currency of
the open debit item. For these occasions, Receivables lets you create cross currency
receipt applications to let you fully or partially process the payment.
For example, you create Invoice 101 in Canadian dollars (CAD) but your customer sends
a receipt in Deutsche marks (DEM) as payment.
Using the remittance information provided by your customer, you can either fully or
partially apply this receipt to Invoice 101. Receivables automatically calculate the open
balance on the invoice (if any) and the foreign exchange gain or loss (FXGL) for this
application.
You can apply receipts to transactions using any currency defined in Oracle General
Ledger.
44. What are the setups related to Automatic Receipts?
Receivables automatic receipts feature to automatically generate receipts for customers
with whom you have predefined agreements. These agreements let you collect payments
on time by transferring funds from the customer’s bank account to yours on the receipt
maturity date. You can also manage your cash flow by deciding when, where, and how
much you should remit to your bank.
Creating automatic receipts involves three steps:
Create: Select the invoices to include in your automatic receipts.
Approve: Update, delete, and approve the receipts that you have selected.
Format: Format your automatic receipts onto paper to send to your customer for
confirmation or notification before remitting them to your bank on either paper or
magnetic media. This step is optional, as it depends upon the type of automatic receipt
you create.
45. What are the clearance methods in Receivables and how are they used?
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Directly: Choose this method if you do not expect the receipts to be remitted to the bank
and subsequently cleared. These receipts will be assumed to be cleared at the time of
receipt entry and will require no further processing. Choosing this method is the same as
setting Require Bank Clearance to No in previous releases of Receivables.
By Automatic Clearing: Choose this method to clear receipts using the Automatic
Clearing program.
By Matching: Choose this method if you want to clear your receipts manually in Oracle
Cash Management.
ORACLE GL QUESTIONS
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Frequently Asked Questions in Oracle Financials
5. What is a value Set? What are the format types and validation types available in
value set?
Value set
A group of values and related attributes assigned to an account segment or to a
descriptive flex field segment. Values in each value set have the same maximum
length, validation type, alphanumeric option, and so on.
Format types:
Character
Date
Date time
Standard Date
Standard Date time
Time
Validation types:
Dependent
Independent
None
Pair
Special
Table
Translatable Independent
Translatable Dependent
Segment Qualifiers:
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Frequently Asked Questions in Oracle Financials
For Account : Allow Posting, Allow Budgeting, Account type, Control Account &
Reconciliation Flag
Security Rules
Security Rule to limit the access of different segment values for different responsibilities
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Frequently Asked Questions in Oracle Financials
3. Flexfield Qualifier
4. Values
5. Segment Qualifier
13. What are period types? What are period types provided in GL?
Period
A unit of time, such as one week, two weeks, or a month, on which your accounting
calendar is based.
Period types
1. Month
2. Year
3. Quarter
4. Half yr
5. Half month
6. Week
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Where it is used:
It must be assigned for set of books for which average balancing is enabled to control
transaction posting.
18. Monetary currency:
Monetary currency is a currency which has monetary value
Eg: USD,INR etc...
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Statistical journal
Suspense journal
Recurring journal
Foreign currency journal
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Frequently Asked Questions in Oracle Financials
29 Encumbrances:
An entry is made to record anticipated expenditures of any type. We can create
requisition encumbrances and purchase order encumbrances automatically .We can have
manual encumbrances also.
Encumbrance type
Commitment
Obligation
Invoice
Labor
PO
Internal trading
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Frequently Asked Questions in Oracle Financials
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Frequently Asked Questions in Oracle Financials
We can define budget organization for the co then assign the appropriate a/c to each
budget organization.
Then that budget organization becomes responsible for entering and maintaining budget
data.
38. Budget Formulas
A mathematical expression used to calculate budget amounts based on actual results,
other budget amounts and statistics.
With Budget formulas we can automatically create budgets using complex equations,
calculations and allocations.
39. Mass Budget
Mass Budgeting gives you the flexibility to allocate budget amounts to
Ranges of accounts throughout your organization using simple
Formulas.
Process Steps:
GL/Budgets/Define/Mass
40. Difference between budget journal and budget amount
We use budget journal for funding budget
We can have audit trail only if we enter budgets thru budget journals
Budget amount is used for non-funding budget
41) How to transfer budget amounts
Under a budget we can opt to transfer budget amount from one organization to another
organization (account wise also)
Gl/Budget/transfer/select the budget from which budget we have to transfer, then choose
from budget organization
And TO organization, then allocate the a/c code combination and click transfer amounts.
42) Upload Budget
We can upload amounts from budgets developed from an outside source (eg spread sheet)
and transfer it to the GL Budget Interface table.
The utility used is ADI Application Desktop Integrator. We can upload budget amounts
to your budget organization from any existing a/c that falls
Within the a/c ranges assigned to your budget organization. At your request, gl uploads
your budget interface data and automatically updates your financial records
To include this budget information.
Once u uploads your budget data u can review the budget spread sheet upload execution
report for the status of your uploaded budget information.
43. Budgetary Control
It is an option used to control actual and anticipated expenditure against a budget
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Frequently Asked Questions in Oracle Financials
Absolute: If this is selected the transactions are rejected unless funds are available
Advisory: If this is selected the transactions are approved even when no funds or
insufficient funds available (with warnings)
None : ------------------------------do------------then all transactions are approved.
45) Budgetary control group
We define one or more budget control groups to attach to sites or users. We can create
budget control groups by specifying funds check level.
By journal source and category, together with tolerance %, amount, and an override
amount (per journal) allow for insufficient funds transactions.
We can also create additional budgetary control groups to give people different budgetary
control tolerances and abilities to override
Insufficient funds transactions.
46) What do you meant by encumbrance Accounting? What are its related setup
steps? What are the types of encumbrance?
Encumbrance
An entry made to record an anticipated expenditure of any type the primary purpose of
tracking encumbrances is to avoid overspending a budget.
Setup Step
Enable the budgetary control flag for a set of books. When you enable budgetary control
flag in set of books, the system automatically creates encumbrance from requisition,
purchase orders and other transaction from feeder system such as purchase and payable.
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When you do not enable budget control flag, you can still enter manually encumbrance
via journal entry. You cannot do encumbrance from requisition and purchase order.
Encumbrance Type
Obligation: An encumbrance you record when we turn the purchase requisition into
purchase.
47. How do you create encumbrance?
You can create encumbrance either manual or automatic
48) How to view funds available for Budget Transactions?
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Navigation path
Inquiry / account
By giving the date, account number, we can see the account balance for period.
51. What is step-down Auto Allocation?
You must create journal batches in a specific sequence when using step -down auto
allocation. Order your journal batches so that the posted result of one step are used in the
next step of the Auto Allocation set.
You can assign Input tax - AP and Output tax - AR, for general ledger journal entry
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54.What is Mass Maintenance? What are the business Rules for Mass Maintenance?
Use Mass maintenance to move balance by period from one account to another or merger
balance by period from multiple accounts into a single account... The moved / merged
balances are added to the existing balance in your target accounts.
Achieve and purge account balance, as well as journal batches, entries, lines, and
associated journal reference for one or more accounting periods, provided the periods are
permanently closed.
You can achieve and purge actual, budget, or encumbrance balances. In addition, for
translated actual and budget balances
One set of books will have functional currency, when we want Multi-currency
accounting; we have set foreign currency in another set of books. Same company will
have two set of books, one for functional currency, and another foreign currency.
Setup step
1) Create a set of books with chart of account, calendar, and currency. (Currency other
than functional currency)
2) Go to the Multiple Reporting currencies tap, enable as Reporting set of books
3) Assign the reporting set of books to primary set of books; define conversion type, rate,
and application.
Consolidation Process
To consolidate your financial results in an orderly manner, the table below lists our
recommended consolidation steps. For detailed information on consolidating multiple
Oracle Applications and Non-Oracle Applications instances, carefully review the Global
Consolidation System.
Define a Consolidation Chart of Each subsidiary will require their own set of books or
Accounts: their own applications instance to meet their operational
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Frequently Asked Questions in Oracle Financials
Define and maintain flexible charts or local accounting needs. You must define a standard
of accounts to accommodate your consolidation chart of accounts for the consolidated
unique business needs. parent set of books.
Map Data:
Define how your subsidiaries’ Mapping determines how your subsidiary balances roll up
accounts map to the parent set of into the consolidated parent ledger.
books.
Transfer Data:
Transfer subsidiary financial Simplify transfer balances or transactions from your
information to the consolidated subsidiaries to the consolidated parent set of books.
parent set of books.
Eliminate Balances:
Use automatic intercom any eliminations to generate
Eliminate intercom any balances and
elimination sets. For formula-based eliminations, you can
minority interests related to internal
also use recurring journals.
transactions.
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Frequently Asked Questions in Oracle Financials
GIS
Prerequisites
. Define your GIS subsidiaries.
. Define a responsibility for each of your GIS subsidiaries and have your system
administrator set the transaction security for each responsibility.
. Define transaction types.
. Define your subsidiaries’ intercom any clearing accounts.
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Frequently Asked Questions in Oracle Financials
List of values
List of values is used when values are between 10 to 200
Long List of Value
The Long List feature requires a user to enter a partial segment value before the list of
values retrieves all available values
It contains more than 200 values
68. In Value set, how will you restrict wrong entry of values and also ensure security
rules?
Using format validation we can specify the format type, Maximum size, Maximum &
Minimum value, Precision and so on to restrict the wrong entry of values
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Frequently Asked Questions in Oracle Financials
70. What is Year -end closing steps? How will you get Opening balances for a new
year?
1) Run “Post all Journals”
2) Run “Close process - Create Income statement closing Journals “
3) Run “Close process - Create Balance Sheet closing Journals “
4) Close the period - Nag to Setup - Open/close, Select the period as close
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Frequently Asked Questions in Oracle Financials
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Frequently Asked Questions in Oracle Financials
Mandatory setups: A R
1. Defining party tax profile and e-business tax setups
2. Defining system options
3. Payment terms
4. Statement cycle
5. Collector
6. Auto cash rule set
7. Customer
8. Define frieght & carrier
9. Item valid org
10. Receivables activities
11. Auto accounting
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Frequently Asked Questions in Oracle Financials
Month End reconciliation between GL and AP is highly recommended. If AP is interfaced to GL, verifying the
balance between the two applications is usually done through comparing account balances of the liability
(A/P) account.
To reconcile your accounts payable activity for April, make the following calculation:
"Accounts Payable Trial Balance" as of March 31 +
"Posted Invoice Register" for the period between April 1 and April 30 -
"Posted Payment Register" for the period between April 1 and April 30 =
"Accounts Payable Trial Balance" as of April 30
> If total is not matching you will need to find out the root casue of difference:
Eg. Invalidated Invoice for the period
> For the PTD activity check the "period Close Exception" if there are any invoices and payments which are
not transferred to GL.
> If the current period does not reconcile, please complete the reconciliation process for all prior periods
from the most recent to the earliest until you get to one that reconciles.
1) Manual journal entries in the general ledger that involve an AP liability account will cause the AP Trial
balance not to reconcile to the GL. These entries are not included in the AP sub ledger so they will not be
reflected on the AP Trial Balance Report.
Run the "GL Account Analysis" report for the liability account and for the date range in question. Look for
transactions with a source other than Payables. This can quickly pinpoint any transactions incorrectly
charged to the account.
2) You performed a data fix in the past where you used the undo accounting script and swept a
transaction forward from a closed period to re-account it, this will cause an imbalance between AP
and GL. The imbalance will be corrected in the period in which you made a GL adjustment to
account for the fix.
3) Any correction you make during the journal import process will result in the line being changed in the
general ledger, but not in AP
4) If you have deleted any AP batches or lines from AP batches out of the GL Interface, this will cause AP
and GL to be out of balance
5) If the AP batch is still in the GL Interface, it will not be reflected in the GL reports and this will cause a
difference between AP and GL.
6) Any AP batches that are un posted in GL will cause a difference between AP and GL.
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Frequently Asked Questions in Oracle Financials
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Frequently Asked Questions in Oracle Financials
Run the Accounts Payable Trial Balance Report - This report will list only those
invoices/payments which has already been transferred to GL (posted and un posted) This
report is used to facilitate reconciliation of the total accounts payable liabilities in Oracle
Payables, with the Oracle General Ledger Creditors Control Account, for a specific
accounting period. These invoices represent the outstanding accounts payable liability for
the organization.
To obtain the most up-to-date trial balance for a given period, journal entries should be
posted for the invoice and payment activity for the period, prior to running the report.
To the previous periods Accounts Payables Trial Balance, add the current period's
posted invoices (total amount from the Posted Invoices Register) and subtract the
current period's posted payments (total cash plus discounts taken, from the Posted
Payments Register) . The calculated amount should equal the balance for the current
period's Accounts Payables Trial Balance.
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Frequently Asked Questions in Oracle Financials
AR to GL Reconciliation Report
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Frequently Asked Questions in Oracle Financials
If other sub ledgers post to these accounts, then you might need
to make corrections in those sub ledgers, make manual
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Frequently Asked Questions in Oracle Financials
MOAC is a new feature in Oracle R-12.MOAC is a feature which facilitates the user
to access Multiple Operating Units from a single responsibility with in a Business
group or across the Business Groups.
In order to Setup MOAC SECURITY PROFILES are to be defined in HRMS
Responsibility.There are two types of Profiles.They are : (1) LOCAL PROFILE
(2) GLOBAL PROFILE
LOCAL PROFILE-With this security profile the USER can access to Multiple
Operating Units with in the BUSINESS GROUPS.
GLOBAL PROFILE-With this profile the User Can access to multiple Operating Units
from different Business Groups.
Switch to SYSTEM ADMINISTRATOR and set Profile options for all the
responsibilities which are performed at Operating Unit level... i.e Order
Management,Receivables,Purchasing and Payables etc..
Navigation:SYSTEM ADMINISTRATOR-PROFILE_SYSTEM
select responsibility and in Value mention MO%SEC%
set LOCAL or GLOBAL SECURITY PROFILE depending on the requirement
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Frequently Asked Questions in Oracle Financials
Segment qualifier:
segment qualifier will identify the type of the account.
steps
-----
setup>payment>format
1.payment format describes in which method u want to make
payment to the supplier
2.how many invoices are to printed in a cheque.
3.how the cheque has to be printed
after defing this save ur work.
step 2
------
setup>payment>bank
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Frequently Asked Questions in Oracle Financials
It is a rule based account derivation system . Based on the Legal entity we can over
ride the sla Accounts.
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Frequently Asked Questions in Oracle Financials
In SLA actually delete actual debit other wise its creates 2 debits and
1 credit.
two types.
1)system profile options
2)user profile options.
profile options can define in following ways .
1)site
2)application
3)responsibility
4)userThe profile option can be set at below 4 levels
User has the highest precedence over responsibility, application and site.
What is Payment Process Profile? and What is use of Payment process profile
payment process profile says, how you are going to process your payment, whether
through check or electronic.
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Frequently Asked Questions in Oracle Financials
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