You can enter invoices for periodic expenses for which you may not receive invoices, such as rent. To enter recurring invoices, define a recurring invoice template, then create invoices based on that template. With a recurring invoice template, you can do the following:
Specify the intervals in which recurring invoices will be created.
Create up to two special one-time invoice amounts of a non-standard amount, such as a deposit or balloon payment.
Define recurring invoices to increase or decrease by a fixed percentage from period to period.
Recurring Invoices can also be used to create debit memos.
Recurring invoices are affected by the following prerequisites.
Special Calendars and Term Date Basis: Determine the frequency of your recurring invoices. For example, once a week or monthly. In addition, consider how the due date will be determined when you define your special calendar. When Payables creates recurring invoices, the invoice date is the first date of the period in which the recurring invoice is created. The Terms Date depends on the Terms Date Basis setting at the supplier site. If the Terms Date Basis is System Date, then the Terms Date is the same date that the recurring invoice was created. If the Terms Date Basis is set to anything else, then the Terms Date is the invoice date, the first day of the period in which the recurring invoice is created.
Purchase Orders: You can use Purchasing Orders to plan for recurring invoices.
Match option: Recurring invoice processing requires that the purchase order schedules or pay items be defined with a Match Option of Purchase Order to prevent invoice creation conflicts if the receipt or work confirmation has not occurred by the time of invoicing. The Match Approval Level can be 2-way, 3-way, or 4-way.
Attributes Inherited from the Purchase Order: While the Recurring Invoices Template may have several tax fields, the Purchase Order attributes will take precedence over the template. The invoices will inherit the accounting distributions from the purchase order shipment or pay item with the line amount being prorated if there is more than one distribution. The invoice may also inherit the purchase order shipment or pay item descriptive flexfields if the Payables System Option setting for Transfer PO Descriptive Flexfield Information is set to yes.
Quantity: If the purchase order shipment or pay item is quantity based, Payables calculates the quantity by subtracting the calculated tax from the amount then dividing it by the unit price. This is important to evaluate when defining your template amounts to avoid matching holds on the resulting invoices.
Blanket Purchase Orders: If you are using a blanket purchase order, to avoid errors, enter the revision number and verify it each time you create invoices from the template.
Distribution Sets: If not using a purchase order, define a Distribution Set for default accounts, distributions, and line descriptions. For example, define a Distribution Set to split a monthly recurring rent amount to different departments that share the rented space. The line amount to be distributed will be the invoice amount minus calculated tax. The invoices' line description will be inherited from the Distribution Set if one is defined. If the Distribution Set does not have a description, the invoice will inherit the value for Line Description from the Recurring Invoices template. The invoice will also inherit the Descriptive Flexfields from the Distribution Set.
Payment Attributes: By anticipating the attributes needed for payment and fiscal reporting of the recurring invoices, you can either define these on the Supplier Site for defaulting to the Recurring Invoice template or enter them directly on the template. Payment attributes consist of pay group, payment priority, payment method, remit to bank account, delivery channel, bank charge bearer, payment reason, and payment reason comments. Note that the Payment Method may also default based on a company policy.
Withholding Tax: If applicable, the withholding tax group defined on the template will be used as a basis for withholding from invoices created from a template. If the Payables System Option Setting for Apply Withholding Tax has been defined with either At Invoice Validation or Payment, the value will default from the supplier site or can be entered directly in the template.
1099 Reporting: If the supplier is defined as 1099 Reportable, the invoice will inherit the Income Tax Type from the supplier site.
Document Sequencing: If the Document Sequencing profile option is defined as Always Used or Partially Used, you must define a sequence as Automatic. The sequence should be assigned to the Recurring Standard Invoices category for invoices and Debit Memo Invoices for debit memos.
Invoice Approval Workflow: If you want your recurring invoices to go through an approval process, enable the Use Approval Workflow Payables Option and configure approver rules in Approvals Management. If your approver requirements include the requester, enter the requester on the recurring invoice template. If you do not want your recurring invoices to require approval, even though you have enabled the Payables Option, uncheck the Approval Workflow Required check box on the Control tab on the Recurring Invoices template.