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Steps to Setup Accounts Payables

Setup Steps [39]

1. Check GL Prerequisites 
2. Define Profiles 
3. Choose Set of Books 
4. Define Payment Terms 
5. Define Payables Lookups – Pay Group, Vendor Types, Source, TAX TYPE 
6. Define Tax Codes 
7. Define Financial Options
8. Define Payables Options 
9. Define Withholding Tax Groups 
10. Maintain Tax Certificates and Exceptions 
11. Define Tolerances 
12. Define Invoice Approvals 
13. Maintain Distribution Sets 
14. Define Automatic Payment Programs 
15. Define Payment Formats 
16. Define Payment Interest Rates 
17. Define Countries & Territories 
18. Set Up Bank Information 
19. Define Expense Report Template 
20. Run Template Update Script 
21. Define Locations 
22. Enter Employees 
23. Define Reporting Entities 
24. Define Income Tax Regions 
26. Set Up Aging Periods 
27. Define Special Calendars
28. Define Report Sets 
29. Control Period Statuses 
30. Implement Sequential Numbering 
31. Descriptive Flexfields
32. Enter Suppliers 
33. Assigning Benefits Defaults
34. Set-up P-Card for Procurement 
35. Define Recovery Rules 
36. Define Tax Groups 
37. Define Reporting Rules (Regional Localizations) 
38. Define VAT Registers (Regional Localizations) 
39. Define Bank Charges 

Step 1 [Oracle Required / ERP Required]
Check GL Prerequisites
Level: Enterprise &Operating Unit
Purpose: To define AP system guidelines to control how AP works.

Step 2 [Oracle Required / ERP Required]
Define Profiles 

Level: Enterprise

Change responsibility to System Administrator
Navigator: Profile > System
Purpose: To set profile options.

Step 3 [Oracle Required / ERP Required]

Choose Set of Books

Level: Operating Unit

Change responsibility to Payables Manager

Navigator: Setup > Set of Books > Choose
Purpose: This is to ensure AP can use the accounting calendar for day to day transactions.

Step 4 [Oracle Required / ERP Required ]

Define Payment Terms 

Level: Enterprise
Navigator: Setup > Invoice > Payment Terms
Purpose: Define payment terms to reflect the way your business is done

Step 5.1 [Oracle Required / ERP Required]
Define Payables Lookups – Pay Group

Level: Enterprise
Navigator: Setup > Lookups > Purchasing
Purpose: Create and maintain Lookups for PAY GROUP. Create additional lookups as business requires.

Step 5.2 [Oracle Required / ERP Required]

Define Payables Lookups – Vendor Types

Level: Enterprise
Navigator: Setup > Lookups > Purchasing
Purpose: Create and maintain Lookups for VENDOR TYPE – this step is already completed for standard Oracle Vendor Types.

Step 5.3 [Oracle Required / ERP Required]
Define Payables Lookups – Source 

Level: Enterprise
Navigator: Setup > Lookups > Payables
Purpose: Create and maintain Lookups for SOURCE – this step is already completed for standard Oracle Source Types.

Step 5.4 [Oracle Required / ERP Required]
Define Payables Lookups – TAX TYPE 

Level: Enterprise
Navigator: Setup > Lookups > Payables
Purpose: Create and maintain Lookups for TAX TYPE – this step is already completed for standard Oracle Tax Types.

Step 6 [Oracle Optional / ERP Mandatory ]

Define Tax Codes 

Level: Operating Unit
Navigator: Setup > Tax > Codes
Purpose: To define the taxes used to record invoice taxes paid to vendors and to tax authorities

Step 7 [Oracle Required / ERP Required ]
Define Financial Options 

Level: Operating Unit
Navigator: Setup > Options > Financials
Purpose: Define the options and defaults used throughout Oracle Applications such as Accounts Payable, Purchasing, and Assets. Defaults can be overridden at the time thevendors, employees and other information are entered.

Step 8 [Oracle Required / ERP Required]

Define Payables Options

Level: Operating Unit
Navigator: Setup > Options > Payables
Purpose: Set control options and defaults used throughout, the system of AP, which will simplify vendor entry, invoice entry, and initiating automatic payment processing.
Defaults can be overridden at the time that vendors, invoices, expense report, or payments are entered.

Step 9 [Oracle Optional / ERP Optional]

Define Withholding Tax Groups

Level: Operational
Navigator: Setup > Tax > Withholding > Groups
Purpose: To define a Withholding Tax Group to be used to assign one or more Withholding Tax type tax names to an invoice or distribution line. Must use this form if there is more than one Withholding Tax type tax name to a tax group, otherwise choose Yes in the Create Tax Group in the Withholding Tax Details region of the Define Tax Names form.

Step 10 [Oracle Optional / ERP Required]
Maintain Tax Certificates and Exceptions

Level: Operational
Navigator: Setup > Tax > Withholding > Certificates
Purpose: Define a Withholding Tax type tax name rate exception for a vendor site. Define a certificate to specify a rate exception for the Withholding Tax type tax name for all invoices of a vendor site.

Step 11 [Oracle Optional / ERP Required ]

Define Tolerances

Level: Operating Unit
Navigator: Setup > Invoice > Tolerances
Purpose: Define the matching and tax tolerances to be used to allow for variances between invoice, purchase order, receipt, and tax information. Tolerances determine whether or not the system places matching or tax holds on an invoice during the AutoApproval process.

Step 12 [Oracle Optional / ERP Required ]

Define Invoice Approvals

Level: Enterprise
Navigator: Setup > Invoice > Hold and Release Names
Purpose: Define the invoice approval codes that are used to hold or release invoice payments. Oracle has many seeded values. Use this form to add any additional approval codes that you will need to run your business.

Step 13 [Oracle Optional / ERP Optional ]

Maintain Distribution Sets

Level: Operating Unit
Navigator: Setup > Invoice > Distribution Sets
Purpose: Create and maintain Distribution Sets. Distribution Sets are used to facilitate invoice entry by reducing or eliminating manual entry of invoice distribution lines.

Step 14 [Oracle Required / ERP Required ]

Define Automatic Payment Programs

Level: Enterprise
Navigator: Setup > Payment > Programs
Purpose: Define and view payment programs that are used to create payment documents such as check, or electronic funds transfers (EFT).

Step 15 [Oracle Required / ERP Required]

Define Payment Formats

Level: Enterprise
Navigator: Setup > Payment > Formats
Purpose: Define the payment formats needed to create payment documents

Step 16 [Oracle Optional / ERP Required ]
Define Payment Interest Rates

Level: Enterprise
Navigator: Setup > Payment > Interest Rates
Purpose: Define the interest rate the system uses to calculate and pay interest on overdue invoices.

Step 17 [Oracle Optional / ERP Required]
Define Countries & Territories

Level: Enterprise
Navigator: Setup > Countries
Purpose: Define the interest rate the system uses to calculate and pay interest on overdue invoices.

Step 18 [Oracle Required/ERP Required ]
Set Up Bank Information

Level: Operating Unit WAVE 1 and 2 SITES ONLY!!
Navigator: Setup > Payment > Banks
Purpose: To enter bank branches, bank accounts, and payment documents for your set of books. If you are a Titan site, please refer to the COS/Titan/Financials AP Setup Document for details on mandatory bank setup for use with Titan. Any other additional banks can be defined here.

Step 19 [Oracle Optional / ERP Optional]
Define Expense Report Template

Level: Operating Unit
Navigator: Setup > Invoice > Expense Report Templates
Purpose: To define expense report templates.

Step 20 [Oracle Optional / ERP Optional ]

Run Template Update Script

Level: Operating Unit
Purpose: To set the includes tax flag on the custom expense report templates created using dataload.

Step 21 [Oracle Optional/ERP Required]

Define Locations

Level: Enterprise
Navigator: Employees > Locations
Purpose: Enter each physical site where employees work, and/or addresses for other organizations

Step 22 [Oracle Required / ERP Required ]

Enter Employees

Level: Operating Unit
Navigator: Employees > Enter Employees
Purpose: Enter, maintain, and view basic personal employee information and addresses. Can only use this form if Oracle HRMS is not fully installed.

Step 23 [Oracle Optional / ERP Optional ]

Define Reporting Entities

Level: Operating Unit
Navigator: Setup > Tax > ReportingEntities
Purpose: Define as many reporting entities as your business needs. A reporting entity is any person or organization that has a unique Tax Identification Number (TIN).

Step 24 [Oracle Optional / ERP Optional ]

Define Income Tax Regions

Level: Operating Unit
Navigator: Setup > Tax > Regions
Purpose: Define tax regions if using 1099 Combined Filing Program Reporting. This is only applicable to the US.

Step 26 [Oracle Required / ERP Required ]

Set Up Aging Periods

Level: Enterprise
Navigator: Setup > Calendar > Aging Periods
Purpose: Define the aging periods to use for the Invoice aging Report

Step 27 [Oracle Optional / ERP Optional ]

Define Special Calendars

Level: Enterprise
Navigator: Setup > Calendar > Special Calendar
Purpose: Define period types which the system uses for special functions such as Key Indicator Reporting, recurring payment, period definitions, or period-to-date reporting for withholding taxes. This is completely separate from the periods defined in the Accounting Calendar window for the AP Accounting periods.

Step 28 [Oracle Optional / ERP Optional ]

Define Report Sets

Level: Operating Unit – operational specific to user and country
Navigator: Other > Requests > Set
Purpose: Define and maintain private report sets. A report set consists of reports that you specify to run as a group, either one at a time in order (sequential), or at the same time in any order (parallel). You can view and update your private report sets. Private reports sets are report sets with a defined owner.

Step 29 [Oracle Required / ERP Required ]

Control Period Statuses

Level: Operating Unit – operational – initial set-ups must show the current period all future periods are controlled within country.
Navigator: Accounting > Control Payables Periods
Purpose: Change and review the status of the accounting periods in AP or your set of books.

Step 30 [Oracle Optional / ERP Optional ]

Implement Sequential Numbering

Level: Operating Unit

Change Responsibility to Sysadmin

Navigator:
Purpose: Assigns sequential numbers as voucher numbers to the invoices and payments created. A voucher number is a unique reference to an invoice or payment.
Must be completed by an associate with a System Administrator responsibility.

Step 31 [Oracle Optional / ERP Optional ]

Descriptive Flexfields

Level: Enterprise
Navigator: Setup > Flexfields > Descriptive > Segments

Step 32 [Oracle Required / ERP Required ]

Enter Suppliers

Level: Operating Unit

Change Responsibility to Payables Manager

Navigator: Suppliers > Entry
Purpose: Enter vendors, vendor sites, and vendor site contacts. Define multiple vendor sites for each vendor and multiple personal contacts for each vendor site.

Step 33 [Oracle Optional / ERP Required]

Assigning Benefits Defaults

Level: Enterprise
Navigator: Setup > Organizations
Purpose: To add a default value of NCR Payroll Default to the Setup Business Group organization

Step 34 [Oracle Optional / ERP Required] — for countries with multiple taxes on a single expense receipt

Set-up P-Card for Procurement
Level: Inventory Org
Navigator: Suppliers > Entry
Purpose: To enable the use of Procurement Cards In order to use P-Cards for Internet Procurement, you must check the box for ‘Procurement Card’ by site under the General Tab.

Step 35 [Oracle Optional / ERP Required] — for countries with multiple taxes on a single expense receipt

Define Recovery Rules

Level: Operating Unit
Navigator: Setup > Tax > Recovery Rules (MUST BE DONE PRIOR TO TAX CODES (STEP 6)
Purpose: Use a tax recovery rule if the recovery rate varies or there are multiple tax rates on a single receipt or invoice, depending on the following distribution attributes: Distribution account, Invoice date, or Condition (for example, supplier type)

Step 36 [Oracle Optional / ERP Required] — for countries with multiple taxes on a single expense receipt

Define Tax Groups
Level: Operating Unit
Navigator: Setup > Tax > Groups
Purpose: Use the Tax Groups window to group multiple, conditional taxes. Tax groups let countries with multiple taxes automatically calculate each applicable tax within Payables, Receivables and Oracle Order Management.

Step 37 [Oracle Required / ERP Required ]

Define Reporting Rules (Regional Localizations)

Level: Operating Unit

Change Responsibility to Belgian AP Localizations

Navigator: VAT > Reporting Rules

Purpose: OU specific VAT reporting rules. Load the rules using the dataload sheet attached.

Step 38 [Oracle Required / ERP Required ]

Define VAT Registers (Regional Localizations)

Level: Operating Unit
Change Responsibility to Italian AP Localizations

Navigator: VAT Register
Purpose: OU specific VAT registers. Enter the 4 different VAT Registers.

Step 39 [Oracle Required / ERP Required]

Define Bank Charges

As Payables Manager responsibility

Level: Operating Unit
Navigator: Setup > Payment > Bank Charges
Purpose: OU specific bank charges. Enter the bank charge transfer rules as documented below.

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Reconciliation with GL – Accounts Payable Trial Balance

Q:  What formula should I use to balance AP to GL? 
A:  Use the following as an example of how to balance. In this example, you are closing your accounting period for April and you have just posted your final invoice and payment batches to your general ledger system.

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 
Reconciling AP to GL is accomplished with the use of the following reports.
“Posted Invoice Register”
“Posted Payment Register”
“Accounts Payable Trial Balance” (current and last period)
These reports ensure that your Trial Balance accurately reflects your accounts payable liability by matching the Posted invoices and payments with the AP liability account. You can also compare your AP liability accounts to GL by doing a query of the accounts in GL to identify the account or accounts out of balance. The trial balance total should be the same as your GL liability account.
If not:

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. Make sure that you have not made manual journal entries to your liability account in General Ledger.When you identify the accounts you go back to AP and do a query on the account to find the invoices out of balance.

The last step is to create a journal entry in GL to balance the account or accounts that is out of balance.

Q: How is the as-of-date used in the “Accounts Payable Trial Balance” report? 

A: The as-of-date is used to determine which invoices and payments should be included on the report.  Any invoices or payments with an accounting date AFTER the entered as-of-date will not be displayed on this report. 
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Metalink Introduction

What is My Oracle Support?My Oracle Support provides personalized, proactive, and collaborative support across all Oracle products.

Metalink is a knowledge base for Oracle, it provides access to a vast amount Oracle resources such as: Articles, Notes, Forum, Patches, Support and a whole lot more. In order to get access to Oracle Metalink you must be a customer or partner. 
The great aspect of Metalink is that it allows one to find resources for troubleshooting purposes. I have resolved many issue ranging from functional setup to complex database issues.
Another, great feature is Oracle Support via Metalink. You can raise an SR or Support Request (previously known as a TAR) to Oracle Support for issues. As an Orace customer you can send an SR on almost every topic. I have taken advantage of this, for example I once submitted an SR on how to find a particular patch.
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Oracle vs. SAP in five points!

As an ORACLE EBS consultant, we should aware of its counterpart –SAP and a few range of prospects that differentiate these two giants in today’s ERP market. Both SAP and Oracle eBusiness Suite (EBS) have strengths, weaknesses, and tradeoffs. Different clients have different needs, ranging from functional requirements, technical maturity, tolerance for risk, budget, and a host of other factors. 
So what are the differences between these two solutions? Although there are numerous variances in the detailed workflows and functionality of the solutions, there are five key high-level variables that we should aware of.
  1. Best of breed functionality vs. more tightly integrated modules. The software strategy of the two vendors could not be much different. While SAP has built a solution primarily from the ground up, Oracle has grown primarily through acquisition of best-of-breed point solutions. For example, Oracle has acquired Demantra for advanced sales and operations planning, Hyperion for financial reporting, and Siebel for CRM, while SAP has built much of this functionality into its core ECC and All in One ERP solutions.
  2. Product roadmap. SAP continues to build upon and enhance its core product offering, while Oracle is moving toward Fusion. While some may suggest that Oracle is more innovative or visionary in its technology direction, it also means that there may be more uncertainty with Oracle’s product lines. This is especially true for clients considering Oracle’s JD Edwards and Peoplesoft solutions.
  3. Flexibility. Although very powerful, SAP can be more difficult to change as a business evolves. This is both a strength and a weakness: it is tightly integrated and helps enforce standardized business processes across an enterprise, but it can be more difficult to modify the software to adjust to evolutions to core processes and requirements. Oracle’s best of breed approach, on the other hand, can allow for more flexibility to accommodate changing business needs, but this strength can become a weakness when it becomes harder to enforce standardized processes across a larger organization.
  4. Implementation cost, duration, and risk. Although both solutions typically cost more and take longer to implement than most Tier II ERP software, there are distinct differences between the two. Oracle has a slight advantage in average implementation duration and an even larger advantage in average implementation cost, at 20% less than SAP. SAP, on the other hand, has the lowest business risk of the two, measured via the probability of a material operational disruption at the time of go-live.
  5. Business benefits and satisfaction. This is perhaps SAP’s greatest strength. Although Oracle has the highest executive satisfaction level of all ERP vendors across the globe, SAP leads the pack in actual business benefits realized. Assuming the #1 reason most companies implement ERP software is to achieve tangible business benefits, this can be enough to justify SAP as a solid solution for many companies.
The key takeaway here is that, as with any ERP solution, SAP and Oracle both have their strengths and weaknesses. One solution may be the best fit for one organization, while not a good fit for others, even within the same industry. The only way to make sense of the pros and cons in a way that is meaningful to your organization is to engage in a robust ERP software selection process that considers your requirements, priorities, and competitive advantages to find the right fit.
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A.I.M. Methodology Summary

Application Implementation Method is a proven approach for all the activities required to implement oracle applications.
The scope of the AIM is focused on an enterprise as a whole.
There are eleven processes of implementation.
1. Business Process Architecture [BP]
This phase outlines:

  • Existing business practices
  • Catalog change practices
  • Leading practices
  • Future practices

2. Business Requirement Definition[RD]
This phase explains about the initial baseline questionnaire and gathering of requirements.
3. Business Requirement Mapping[BR]
In this phase the requirements of business are matched with the standard functionality of the oracle applications.
4. Application and Technical Architecture [TA]
This outlines the infrastructure requirements to implement oracle applications.
5. Build and Module Design [MD]
This phase emphasizes the development of new functionality (customization) required by the client. It mainly details how to design the required forms, database and reports.
6. Data Conversion [CV]
Data Conversion is the process of converting or transferring the data from legacy system to oracle applications.
Ex. Transferring customer records from the legacy to the Customer Master.
7. Documentation [DO]
Documentation prepared per module that includes user guides and implementation manuals.
8. Business System Testing [TE]
A process of validating the setup’s and functionality by QA(functional consultant) to certify status.
9. Performance Testing [PT]
Performance testing is the evaluation of transactions saving time, transaction retrieval times, workflow background process, database performance, etc…
10; Adoption and Learning [AP]
This phase explains the removal of the legacy system and oracle application roll out enterprise wide.
11. Production Migration [PM]
The process of “decommissioning” of legacy system and the usage(adoption) of oracle application system.

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