In this article you will know about, how to define Payment Options in Oracle Cloud Payables.

What are the Prerequisites?

To define Payment Terms, it is assuming that, you have completed following prerequisites:

  • Creating an Implementation Project
  • Defining Business Units
  • Provision a Data Role
  • Create a Payment Term
  • Manage Common Options for Payables and Procurement
  • Manage Invoice Options

Navigation:

Setup and Maintenance work area > Implementation Projects > XX(Your) Implementation Project > Define General Payables Options > Set business unit scope > Manage Payment Options

OR: Setup and Maintenance > Financials > Setup > Payables > Manage Invoice Options

Steps:

  1.  Click the Go to Task icon

How to define Payment Options in Oracle Cloud Payables

2.  On the Manage Payment Options page, Your business unit should appear under the page title.

  • Review the default payment options.
The payment options are:
  • Allow payment date before the system date.
  • Allow override of the supplier site bank account.
  • Account for payment.
Account for Payment

Here, you need to specify when to create payment accounting entries by setting the Account for Payment option.

What will be the accounting entries?

  1. At the time of payment issue
  • It will debit the liability account and credit the cash account. For a bills payable, debit the liability account and credit the bills payable account.
  • At payment maturity, debit the bills payable account and credit the cash account.
  • Realized gain or loss is calculated at payment creation and, for bills payable, at payment maturity.
  1. At the time of payment clearing
  • It will debit the liability account and credit the cash account when the payment clears.
  • Realized gain or loss is calculated only at payment clearing for both regular payments and bills payables.

Remember: You should enable this option only if Oracle Fusion Cash Management is implemented. Otherwise, payments will never be accounted.

  1. At payment issue and clearing

Payables accounts for each payment at:

Issue time:

  • It will debit the liability account and credit the cash clearing account. For bills payable, debit the liability account and credit the bills payable account.
  • At payment maturity, debit the bills payable account and credit the cash clearing account.

Clearing time:

  • It will debit the cash clearing account and credit the cash account. This accounting is created only if Cash Management is implemented.

Realized gain or loss is calculated at all points where accounting is created.

Very important Implementation Consideration

After you set the Account for Payment option, the only change you can make is from account At payment issue to account At payment issue and clearing.

define Payment Options Oracle Cloud Payables

Set Payment options according to your project requirement, Then click Save and Close.

Check Relevant Article:

How to define Invoice options in oracle Cloud Payables

How to Create Payment Terms in Oracle Cloud Payables

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