7.1 The Payment Process and Payment Process Request Templates
Key Takeaways
A PPR runs these steps: select documents, assign bank account and profile, validate documents, build and validate payments, optional review and approval, create, validate and format the payment file, then transmit or print.
Selection criteria decide which installments are chosen; payment attributes such as payment date, bank account and profile don't affect selection.
With a date basis of Pay Date and a site pay date basis of Discount, an installment is selected once the pay-through date reaches its first discount date, and the payment date decides which discount is taken.
Processing options include Apply credits up to zero amount payment, Review installments, Review proposed payments, Create payment files immediately, and validation failure handling for documents and for payments.
A transaction calendar on the PPR template moves pay-through dates and payment dates that fall on weekends or holidays to the next business day.
The published objectives are Understand the Payment process and Manage Payment Process Request Templates. Payment questions often ask why an installment wasn't selected, why a discount was or wasn't taken, or where a run stopped.
The disbursement process step by step
Oracle describes the flow from Payables into Payments:
| Step | What happens |
|---|---|
| 1. Create documents | Payables creates documents payable (invoice installments) |
| 2. Select documents | The PPR selects installments that meet its criteria |
| 3. Submit PPR | The request is passed to Payments |
| 4. Assign bank account and profile | Taken from the PPR, or derived from usage rules. If that isn't possible, the user supplies them on Assign Payment Process Attributes. |
| 5. Validate documents | Document-level validations from the payment method and format. Failures are removed or stop the request, depending on the options. |
| 6. Create and validate payments | Documents are grouped into payments using the profile's rules, then payment-level validations run |
| 7. Review and modify | Optional stop: remove payments or documents, after which validations run again |
| 8. Approve or reject | When payment approval is enabled (section 6.3) |
| 9. Create payment file | Payments are grouped into files by bank account, profile and grouping rules |
| 10. Validate payment file | File-level validations. Failures can be fixed by removing payments, or overridden. |
| 11. Create extract and format | Oracle Analytics Publisher applies the format template to an XML extract |
| 12. Transmit or print | Electronic files go to the payment system. Printed files go to check stock, and you record the print status. |
| 13. Post-processing | Separate remittance advice, positive pay and payment file register |
If anything needs your input, the process pauses, whatever the processing options say.
How selection and discounts work
The date basis on the PPR is Pay Date or Due Date. With Pay Date, the supplier site's pay date basis (Discount or Due) decides which installment date is compared with the pay-through date. Oracle's example installment has these dates:
- due 30 August;
- first discount on 15 July (USD 150);
- second discount on 30 July (USD 100).
The site's pay date basis is Discount.
| Pay-through date | Payment date | Always take discount | Selected? | Discount taken |
|---|---|---|---|---|
| 14 July | 17 July | Either | No: the pay-through date is before the first discount date | None |
| 15 July | 17 July | Either | Yes | USD 100: the payment date is after the first discount date but before the second |
| 15 July | 31 July | Off | Yes | None: the payment date is after both discount dates |
| 15 July | 31 July | On | Yes | USD 150: always take discount takes the first discount |
| 15 July | 31 August | On | Yes | USD 150, and interest may be calculated |
If the date basis is Due Date, or the site's pay date basis is Due, the installment is selected only when the pay-through date is on or after the due date.
Payment process request templates
You can submit a PPR directly, or define a template on Create Payment Process Request Template. Templates let you:
- reuse settings;
- run the Payables Cash Requirement report against the template before submitting, to see the cash needed;
- schedule the PPR to run regularly.
A template has three tabs.
Selection criteria (these decide which installments are chosen)
| Criterion | Meaning |
|---|---|
| Pay through date / Pay from date | Latest and earliest installment due date. Scheduled templates calculate these relative to the run date, for example with pay-through days. |
| From / To payment priority | Range of installment payment priorities |
| Date basis | Pay Date or Due Date (see above) |
| Include zero amount invoices | Selects zero-amount installments |
| Pay groups | All by default, or specific pay groups |
| Currencies | Invoice or payment currencies |
| Business units | A payment BU finds installments for the invoice BUs it services. An invoice BU finds only its own installments. |
| Legal entities, supplier type, payment method, invoice conversion rate type, supplier or party, invoice group | Further filters |
Payment attributes (these don't affect selection)
Payment date, disbursement bank account, payment process profile, bank charge bearer and similar values. They apply to the documents selected. Bank charge bearer values are Payee, Payer, Shared, Following Service Level and Payee Pays Express Charges.
Processing options (how automated the run is)
| Option | Effect |
|---|---|
| Apply credits up to zero amount payment | Applies credits and creates a zero-amount payment if the grouped installments would otherwise be negative. If bank charges apply, those installments are rejected. |
| Review installments | Stops after selection so you can add or remove installments, edit payment and discount amounts, enter user conversion rates, and calculate withholding and interest |
| Review proposed payments | Stops after installments are grouped into payments, before the payments are built |
| Create payment files immediately | Creates files for this request instead of waiting to combine its payments with other requests' payments |
| Validation failure handling for documents and for payments | Whether failing items are removed and the rest continue, or the request stops for resolution |
Transaction calendars
A transaction calendar on the template skips weekends and holidays. Define it with Manage Transaction Calendars (Financial Reporting Structures): name the calendar, set the default business days, generate it, and clear the Business Day box on holidays. Then select it in the template's Transaction Calendar field. Pay-through dates and payment dates that fall on non-business days move to the next available date. In Oracle's example, a payment date on Saturday 7 October that is a holiday in the calendar moves to Monday 9 October.
Payment process request status reports
When the Payment Process Request Status Report is set to submit automatically at completion (Manage Disbursement System Options), each finished request produces a report of its contents and status.
An installment is due 30 August with a first discount of USD 150 by 15 July and a second of USD 100 by 30 July. The PPR uses date basis Pay Date, the site's pay date basis is Discount, the pay-through date is 15 July, the payment date is 17 July, and Always take discount is off. What happens?
The installment isn't selected because the payment date is after the first discount date
The installment is selected and the USD 100 second discount is taken
The installment is selected and the USD 150 first discount is taken
The installment is selected with no discount, because it is paid before the due date
A payables supervisor wants each run to stop after installments are chosen, so the team can add or remove installments, change discount amounts and calculate withholding before payments are built. Which processing option does this?
Review proposed payments
Create payment files immediately
Apply credits up to zero amount payment
Review installments
A scheduled PPR template calculates a payment date that falls on a public holiday. Which setup moves the payment date to the next business day?
The cutoff day on the supplier's payment terms for each selected invoice
A Payables calendar assigned to the payment term line's Calendar field
A transaction calendar in the template's Transaction Calendar field
The pay date basis on the supplier site, set to Discount or Due
Sections you finish are checked off in the contents.