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R12 = AP THEORY
Accounts Payables Theory
Payment methods:
We have 4 payment methods in OF.
1.
2.
3.
4.
Check
Electronic (EFT)
Wire
Clearing
At the time of creating invoice we have to opt for payment method and
Currency.
Check
:
Payment through the regular bank check
Electronic
Wire
bank.
Clearing :
In this process we will not make Payment physically. This is
used as adjustment for inter company transfers and transfer between the
branches.
Payment Terms:
Making payment to supplier (due date) immediate or in how many days
referred to Payment terms.
We can set due dates and discount dates through payment terms.
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R12 = AP THEORY
Accounts Payables Theory
Distribution Set:
Distribution Set is used to automatically enter distributions for an invoice
when you are not matching it to a purchase order.
For example:
Total invoice amount:
Plant cost :
Tax
:
Freight
:
Rs. 100000
Rs. 90000 90%
Rs. 5000 5%
Rs. 5000 5%
If we receive the invoices in future with the same arrangements we can use
the distribution set.
You can assign a default Distribution Set to a supplier site so Payables will
use it for every invoice you enter for that supplier site.
If you do not assign a default Distribution Set to a supplier site, you can
always assign a Distribution Set to an invoice when you enter it.
We have 2 types of distribution sets.
1. Full
2. Skeleton
We use Full Distribution Sets to create distributions with set percentage
amounts.
Skeleton Distribution Sets to create distributions with no set distribution
amounts.
We can enter distribution sets in 2 ways:
1. Manual
2. Automatic (by creation of distribution sets)
R12 = AP THEORY
Accounts Payables Theory
Types of invoices in Accounts Payables
1. Standard invoice
2. Debit Memo
3. Credit Memo
4. Mixed invoice
5. Recurring invoice
6. Pre payment invoice
7. Expenses invoice
8. Interest invoice
9. Withholding tax invoice
10.
Retain age Release
11.
Transportation
System automatically generated invoices:
1. Recurring invoice
2. Expenses invoice
3. interest invoice
4. Withholding Tax invoice
Remaining all other invoices we have to create manually.
1. Standard invoice:
We can enter only Positive amounts thru standard invoice. We can assign
Distribution set to update the lines automatically by system or we can
enter the distributions manually.
2. Debit Memo
Debit Memo is used by Customers only.
This is used for purchase returns.
To reduce the balance payable to supplier we create Debit Memo.
Only negative amounts can be entered through Debit Memo.
R12 = AP THEORY
Accounts Payables Theory
3. Credit Memo
To reduce the supplier balance Credit Memo will be used.
Credit Memo will rise by Supplier and sent to us.
Generally credit memos used, when we get discount on payables or on any
price differences.
We can enter only negative balances through Credit Memos.
4. Mixed Invoice
We can enter Positive and Negative balances also thru Mixed Invoices.
5. Recurring Invoice.
We require a calendar to create recurring invoice, called Special Calendar.
6. Pre payment invoice.
Pre payment invoice are used when there is advance payment made to
Suppliers against purchases or Employees for Travel expenses (Imprest
amount).
Pre payments are two types: Temporary pre payment & Permanent pre
payment.
Temporary pre payments are adjusted against the future purchase invoice.
Whereas we cannot adjust Permanent pre payments against future
purchases. This payment we can receive when the contract cancelled with
the supplier.
We can convert Permanent pre payment into Temporary pre payment. After
conversion we can use that to adjust against future invoices.
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R12 = AP THEORY
Accounts Payables Theory
7. Expenses invoice
When employees spent the amount and submit the bills for reimbursement,
that information we have to maintain as expenditure report in the system.
With the help of this expenses report information we can create Expenses
Invoice.
8. Interest invoice
When we make payments after the due date crossed, if interest penalty is
applicable, system will create one invoice for only the interest portion
amount apart from the standard invoice.
9. Withholding tax invoice
If customer want to with hold the tax amount charged by supplier in the
invoice, and he want to pay the tax amount directly to tax authorities
instead of paying to supplier.
System will automatically create a withholding tax invoice.
In this case tax authority would be a supplier.
R12 = AP THEORY
Accounts Payables Theory
Batch Invoice:
We can enter invoices individual one by one or through batch invoices at a
time many.
By default we can enter individual invoices only.
In GL batch journal only control total is there.
But in AP, batch invoices have 2 controls: 1. Control total 2. Control count.
Control total is grand total of all invoices & Control count is total number of
invoices.
In GL if control total does not match system will not allow user to save the
journal until we change the control total to match with entered total.
In AP if control total and control count does not match also system allows us
to post the invoice and allows for further processing. It shows only variance.
Unlike batch journal, we can enter invoices either individual or batch
invoices.
If you want to enter batch journals we have to create profile option. In that
case we cannot enter invoices individually.
R12 = AP THEORY
Accounts Payables Theory
Payment types:
When we are making payment to supplier we need to have bank account,
Check book.
As per OF we called check leaves as Documents.
We have 3 types of payment:
1. Manual
2. Quick
3. Refund
Manual:
We have to write the check manually and then enter the same
details into system and hand over the same check to Supplier.
Quick:
Refund:
Work Bench:
We maintain Recording invoices and Payments in AP.
We have two work benches in AP:
1. Invoice work bench
2. Payment work bench
In invoice work bench we can enter and maintain invoices.
Payment work bench is to maintain 3 types of payments 1. Manual 2. Quick
3. Refund.
R12 = AP THEORY
Accounts Payables Theory
Payment Batch:
Payments also can be processed as individual payments or through batch.
Batch payments are automation.
Automation means if we give instruction to system, system will make
payment automatically.
There are various stages in payment batch:
1.
2.
3.
4.
5.
Selection
Building
Rebuilding
Formatting
Confirm
R12 = AP THEORY
Accounts Payables Theory
OPTIONS:
We have 3 types of options.
1. Financial Options
2. Payable Options
3. Payables System Setup
Payable options are specific to Accounts payables module only.
Financial options we can see across AP, PO and FA modules.
These options will work as heart to application. Using these options we can
set some CONTROLS & DEFAULTS.
We use these options to manage application functionality. We can set some
properties or to set behaviors of the application through these options.
2. Distribution
Payables options
Supplier header
Supplier Sites
Invoice header
Invoice Distribution
Payment
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R12 = AP THEORY
Accounts Payables Theory
Purchasing
General Ledger
Cash Management
Accounts Receivables
Web Expenses
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R12 = AP THEORY
PERIOD CLOSING PROCEDURES
1
Accounts Payables
YES).
This report gives the details of invoices entered into the system,
but no action is taken i.e. the status of the invoice is Never
Validated.
b)
This report gives details of all the invoices that are on hold in the
system. Pass the Parameters as shown in the Screen Shot below,
give the period end date in the To Entered Date field.
Resolve the Holds in the period end so that no Invoices are carried
forward to the next period during the Year End Close. In the Month
End Closing you can also choose to Sweep the Invoices in the next
period. .
2.
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R12 = AP THEORY
4.
After
running
the
Payables
Accounting
Process
Program
R12 = AP THEORY
1.
2.
Module: AP Module.
Navigation: Accounting > Control Payables Periods.
1.
Select the period to close. Select Closed from list of values in the
reports are not approved, these will be swept into the next or decided
open/future period. If sweep is required, future period should be
opened before sweeping is done.
4.
Select the Next period to open. Select Open from list of values in
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R12 = AP THEORY
PROCURE TO PAY CYCLE
Requisition
RFQ
Quotation
Quotation Analysis
Purchase Order
Goods Receipt Note
Invoice
Payment
Reconciliation
Requisition:
Requisition is raised by employee and send to the buyer of the
organization.
Requisitions are 2 types:
1. Internal Requisition
2. Purchase Requisition
RFQ:
Buyer will send Request for Quotation to supplier.
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R12 = AP THEORY
RFQs are 3 types:
1. Catalog RFQ
2. Standard RFQ
3. Bid RFQ
Quotation:
Upon receiving RFQ from Buyer, supplier will send Quotation to Buyer.
Quotations are 3 types:
1. Catalog
2. Standard
3. Bid
Purchase Order:
After Quotation analysis buyer will raise Purchase Order to Supplier.
Purchase orders are 4 types:
1. Standard PO
2. Planned PO
3. Blanket PO Agreement
4. Contract Purchase Agreement
Goods Receiving:
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R12 = AP THEORY
There are 3 stages in goods receiving.
1. Direct Delivery
2. Standard Receipt
3. Inspection
R12 = AP THEORY
AP INVOICE STATUS
1. Standard invoice:
Before validation:
After validation:
Never validated
Validated
Journal Entry:
Item Expenses A/c
Dr
Freight A/c
Dr
Dr
To
Liability Account
Un validated
Un paid
Un paid
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R12 = AP THEORY
After conversion to temporary pre payment(part amount)
:
Available
If applied full amount: Fully applied
After apply to invoice: Validated
Journal Entry:
Pre paid expenses A/c Dr
To Liability A/c
Navigation:
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R12 = AP THEORY
Say OK
Save your work.
Validate, Create accounting from Actions button
Step: 2
Step: 3
Navigation:
Source:
Payables
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R12 = AP THEORY
Step: 5
Navigation:
Post
Invoice number
Choose Asset Category & Location
Go to Asset details
Enter Description
Done
Step: 6
Navigation:
Program Name:
Parameters:
Step: 7
Navigation:
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R12 = AP THEORY
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