3.1 Invoice Options and Common Options for Payables and Procurement

Many hands-on items open one of two business-unit-scoped pages and ask what an invoice will do:

• Manage Invoice Options controls how invoices are entered, matched, discounted and approved.
• Manage Common Options for Payables and Procurement provides default accounts and cross-module options.

These pages answer two published objectives: Manage Invoice options and Set up common configurations.

Manage Invoice Options

Invoice options are settings and default values that control how invoices are processed for an invoice business unit. Many can also be set on the supplier site. Where a supplier value exists, it wins.

Invoice entry options

The terms date basis values are Goods received, Invoice, Invoice received and the system (current) date. The pay date basis is Due or Discount. It decides which date a payment process request compares to the pay-through date.

How installments are recalculated

Installments are created at entry from the payment terms and terms date. If Recalculate invoice installments is enabled, validation rebuilds them:

• Start date: the most recent of the invoice date, the terms date and the goods received date plus receipt acceptance days.
• Terms on an unmatched invoice: the invoice's payment terms.
• Terms on a PO-matched invoice: the more favorable of the invoice and PO payment terms, compared by the terms' rank.
• Manual edits win: installments aren't recalculated if a user has manually edited or split them.
• Forced recalculation: installments are recalculated regardless of the option when Exclude tax from calculation is enabled and a user manually changes the tax.

Worked example. An invoice is dated 2 March, matched to a PO, and the goods arrive on 10 March. Receipt acceptance days is 5 and the payment terms are Net 30. Recalculation starts from the latest of 2 March and 15 March (10 March + 5 days), so it uses 15 March. The due date becomes 14 April.

Matching, discount and prepayment options

• Matching: Allow final matching, Allow matching distribution override, Transfer PO distribution additional information, and the default quantity and amount tolerance sets (section 4.1).
• Discounts:
  • Exclude tax from calculation and Exclude freight from calculation shrink the discountable amount.
  • Always take discount takes the discount whenever you pay.
  • Discount allocation method has three values:
    • All invoice lines: prorates across all lines. For receipt-accrued PO lines the discount goes to the price variance account.
    • Tax lines and single distribution: prorates the tax share across tax lines and sends the rest to the Discount Taken distribution. Not allowed when tax is excluded from the calculation.
    • Single distribution: credits the Discount Taken distribution from Common Options. Use it with automatic offsets when you want the discount spread across balancing segments.
• Prepayments:
  • Default payment terms for prepayments.
  • Settlement days, added to the system date to set the settlement date. A prepayment can't be applied before its settlement date.
  • Use distribution from purchase order: the natural account comes from the supplier's prepayment distribution and the other segments from the PO.
  • Show available prepayments during invoice entry.

Approval and other options

• Enable invoice approval and Require validation before approval.
• Accounting preference:
  • Account regardless of approval status
  • Require accounting before approval
  • Require approval before accounting
• Allow force approval, used with the Force Approve privilege (section 4.2).
• Interest: create interest invoices, minimum interest amount, and the interest allocation method.
• Payment request defaults and self-service invoice options for Supplier Portal invoices: limit an invoice to one PO, allow backdating, allow unit price changes, require attachment.

Manage Common Options for Payables and Procurement

This page serves invoice and requisitioning business units. It has six groups of options.

Default distributions

Automatic offsets (offset segments)

Without offsets, an invoice has a single liability entry and a payment a single cash entry, even when the expense lines span several companies. Offset segments has three values:

Offsets also apply to conversion rate variance, nonrecoverable tax, withholding, and on payments to cash for pooled accounts, discount, realized gain or loss and bills payable. Oracle warns that changing offsets after accounting exists can cause inconsistencies, so decide early. Receiving uses the same option to derive the receiving inspection account.

Other common options

• Currency conversion:
  • Require conversion rate entry. Without a rate, foreign-currency invoices can't be accounted or paid. You can run Apply Missing Conversion Rates to fill gaps.
  • The default conversion rate type.
  • The realized gain and loss distributions.
  • The page's currency settings affect invoices. Manage Payment Options affects payments. The conversion rate type is shared by both pages.
• Expense accruals: Accrue expense items at Receipt or at Period end. Inventory items always accrue at receipt.
• Self-billed invoices: gapless numbering and a buying company identifier for pay on receipt.
• Legal entity information: VAT registration member state and number, and the bill-to location.