2.2 Supplier Controls: Registration, Income Tax Details, Site Holds and Third-Party Payments
Key Takeaways
The supplier site Invoicing tab offers four holds: invoice amount limit, hold all invoices, hold unmatched invoices and hold unvalidated invoices.
An invoice over the site's invoice amount limit gets an Amount hold during validation, and the hold can be released manually.
The site's all-invoices payment hold places no hold on the invoices; it stops the site from being selected in a payment process request or a Quick payment.
Hold unvalidated invoices places a Supplier hold only on invoices created after the option is enabled; previously validated invoices can still be paid.
A third-party remit-to party needs a Remit to address, and the relationship is entered on the supplier site's Invoicing tab with from and to dates.
Setting up a supplier is not only data entry. Supplier-level controls decide whether invoices validate cleanly, whether they can be paid, and where the money goes. The published objective (describe the Supplier Master Data) includes these controls, and they are easy to test in a hands-on environment: open a site, look at its Invoicing tab, and predict what happens to the next invoice.
Registration and spend authorization
Suppliers enter Oracle Fusion in two main ways:
- Internal supplier registration requests, created by employees such as buyers or requesters.
- External supplier self-registration, through a registration page or the Supplier Portal.
Both are approved through the supplier registration approval workflow. Approved registrations become prospective suppliers, which can be used in sourcing. A prospective supplier must be spend authorized before it can be used on purchase orders and invoices.
Note
Oracle added Redwood: Validate Supplier Bank Accounts in update 25C. It checks bank accounts entered during supplier registration against J.P. Morgan's Account Validation Service and shows a Verified, Failed or Inconclusive status to approvers. It needs a paid J.P. Morgan subscription, the embedded banking promotion code and the Redwood supplier registration experience. It supports US-based accounts only. The status is informational and doesn't block payments. Section 11.2 covers what Redwood opt-ins like this change.
Income tax and 1099 details
The supplier's Income Tax tab holds the US 1099 information:
- Tax organization type, for example corporation, individual or partnership.
- Taxpayer ID.
- Federal reportable, with a default federal income tax type, for example MISC1 for rents or NEC1 for nonemployee compensation.
- State reportable.
When you enter invoices, each distribution carries an income tax type and income tax region. These default from the supplier or from a distribution set that has its own income tax types. At year end, Payables reports paid amounts by type. Section 7.3 covers the reporting options, the exceptions reports and the $2,000 IRS threshold that applies from tax year 2026.
The site's General tab carries the tax reporting indicator, which marks the site used for income tax reporting.
The four supplier site holds
On the supplier site's Invoicing tab, Oracle provides four hold controls. Learn exactly what each does, because the differences are a favorite exam trap.
| Site option | What happens | Released how? |
|---|---|---|
| Invoice amount limit | Invoice validation places an Amount hold on any invoice above the limit | Manually releasable. Or adjust the invoice or raise the limit and revalidate. Accounting is allowed. |
| Hold all invoices | No hold is placed on the invoice. The supplier site can't be selected for payment in a payment process request or a Quick payment. Oracle's predefined hold list describes the same control as the site's Hold All Payments option. Sites with this hold appear in the Supplier Sites on Payment Hold section of the Payments landing page. | Not manually releasable on the invoice. Turn the option off on the site. |
| Hold unmatched invoices | Validation places a Matching Required hold on invoices not matched to a PO, receipt or consumption advice. The site value can be Yes, No or Default from Payables Options. | Match the invoice and revalidate, or release manually. Accounting is allowed. |
| Hold unvalidated invoices | Validation places a Supplier hold on invoices created after you enable the option. Invoices already validated before then can still be paid. | Release manually, and switch the option off to stop future holds. Accounting is allowed. |
Notice that none of the four stops accounting. The all-invoices option only blocks payment selection. If you need an invoice that is fully accounted but can't be paid, for example while a supplier dispute is open, the site-level payment hold gives you exactly that. Use an invoice-level manual hold (section 4.1) when only one invoice is affected.
You can also place a hold on a single installment. For example, you might split an installment and hold one part until the rest of an order arrives.
Third-party payments
A third-party payment is a payment you make to one party on behalf of a supplier. Examples are a factoring company that bought the supplier's receivables, or a parent company that collects for its subsidiaries. Oracle's setup steps are:
- Create the third party in the Suppliers work area. Complete the Profile and Address tabs and set the address purpose to Remit to. Optionally attach a bank account and default payment method to the address. You don't need a supplier site unless the third party also sends you its own invoices.
- Define the relationship. On the supplier's site, go to the Invoicing tab and add the third party in the Third-Party Payment Relationship section.
| Relationship attribute | Purpose |
|---|---|
| Remit-to Supplier | The party paid on behalf of the supplier on the invoice |
| Address Name | The remit-to party's address |
| From Date / To Date | An inclusive date range. Invoice and payment dates decide whether the relationship is valid. |
| Description | Text included in the payment file, for example to print as a reference on the payment document |
| Default | Marks the relationship as the default for new invoices and payments |
Optionally, the invoice option Allow remit-to supplier override for third-party payments lets users override the remit-to supplier and address on invoice installments.
Two cautions from Oracle:
- When you end-date a relationship, review the unpaid and partially paid invoices that use it.
- The Merge Supplier process doesn't merge third-party payment relationships.
The invoice itself keeps the original supplier, so matching, receipt accrual and expense accounting are unchanged. Only the installment's remit-to details point to the third party, and the payment is issued to that party.
During a supplier dispute, the controller wants this supplier's invoices to keep validating and accounting normally, but no payment process request or Quick payment may pay the site. Which supplier site setting does this?
Hold unmatched invoices set to Yes on the supplier site's Invoicing tab
Hold unvalidated invoices on the supplier site's Invoicing tab
Hold all invoices, which blocks payment without invoice holds
An invoice amount limit of zero on the supplier site
On 1 March an administrator enables Hold unvalidated invoices on a supplier site. Invoice A was validated on 20 February. Invoice B is entered on 5 March. What happens?
Both invoices are placed on a Supplier hold the next time validation runs
Neither invoice is affected until the next Payables period is opened
Invoice A is placed on a Matching Required hold and Invoice B on an Amount hold
Invoice B gets a Supplier hold at validation, while Invoice A can still be paid
A factoring company must receive payments for a supplier's invoices from 1 January to 31 December. The factor never sends its own invoices. What is the minimum setup?
Create the factor as a Remit to supplier and add a third-party payment relationship for those dates
Create the factor with a Pay site and assign the site to every client BU, then change the supplier on each invoice
Replace the original supplier's bank account with the factor's account on the supplier site Payments tab
Create a distribution set that sends the liability to the factor's balance sheet account
Sections you finish are checked off in the contents.