Payment on Receipt enables you to automatically create standard, unapproved invoices for payment of goods based on receipt transactions. Invoices are created using a combination of receipt and purchase order information, eliminating duplicate manual data entry and ensuring accurate and timely data processing. Payment on Receipt is also known as Evaluated Receipt Settlement (ERS) and Self Billing.
You can automatically create invoices with multiple items and distribution lines, and include tax.
You define which supplier sites participate in Payment on Receipt and enforce matching rules to ensure the proper payments are made to the suppliers.
Payment on Receipt builds invoices with the following information:
| Amount | Determined by multiplying the Quantity received by the Purchase Order Item Unit Price. |
| Payment Terms | Defaulted from the purchase order payment terms or from the supplier site payment terms, depending on your Oracle Payables setup. |
| Tax | Based on Tax Codes on each purchase order shipment, or the default tax hierarchy in Payables. |
If the purchase order currency and the supplier site Payment Currency (in the Supplier Sites window) are not fixed-rate currencies (for example, not euro-related currencies), Payment on Receipt builds the invoices this way, regardless of the supplier site Invoice Currency:
| Invoice Currency | Defaulted from the purchase order Currency. |
| Payment Currency | Defaulted from the purchase order Currency. |
If the purchase order currency and the supplier site Payment Currency are fixed-rate currencies (for example, euro-related currencies), Payment on Receipt builds the invoices this way, regardless of the supplier site Invoice Currency:
| Invoice Currency | Defaulted from the purchase order Currency. |
| Payment Currency | Defaulted from the supplier site Payment Currency. For example, if the purchase order Currency is francs and the supplier site Payment Currency is the euro, the Payment Currency on the invoice is the euro. Defaulted from the supplier site Invoice Currency if no supplier site Payment Currency is defined and the supplier site Invoice Currency is a fixed-rate currency. Defaulted from the purchase order Currency if the supplier site Invoice Currency is not a fixed-rate currency. |
If the Alternate Pay Site is populated for the Supplier Site used on the Purchase Order, the invoice created is for the Alternate Pay Site, otherwise the Supplier Site on the Purchase Order is used. The Supplier Site used for the invoice must be defined as a Pay Site.
You can choose to automatically generate debit memos for Return To Supplier transactions once Payment on Receipt creates the invoice. To enable this functionality, enable the supplier site as a Pay Site (or indicate an Alternate Pay Site) and select Create Debit Memo from RTS Transaction in the Supplier Sites window. Once you enable this functionality, a debit memo is created for each return line you enter in the Returns window. When you create the return, make sure the Create Debit Memo option is selected in the Returns window. (The Aging Period profile option and field in Payment on Receipt do not account for returns for which a debit memo was already created, so that duplicate debits are not made. Likewise, a debit memo will not be created if the Aging Period functionality already handled the debit.) See: Debit Memos.
When Payment on Receipt runs, it automatically performs invoice matching to the purchase order or receipt, depending on which Invoice Match Option was chosen in the purchase order Shipments window. (The Invoice Match Option on the shipment defaults from the Supplier Sites window, but you can change it on the shipment.) See: Entering Purchase Order Shipments.
If matching invoices to receipts, Payment on Receipt uses the exchange rate information on the receipt. If matching invoices to purchase orders, Payment on Receipt uses the exchange rate information on the purchase order.
You can enable Payment on Receipt for individual purchase orders and releases, for any purchase order or release type, by using the Pay On field in the Terms and Conditions window. (The Pay On value on a blanket purchase agreement is defaulted onto all the releases created against it.) The Pay On field defaults to Receipt for all documents whose supplier site is set up as a Payment on Receipt site in the Supplier Sites window, meaning that Payment on Receipt creates the invoices. Changing the Pay On field to Null means that Payment on Receipt does not create an invoice for that document, even if the supplier site is a Payment on Receipt site. If the supplier site is not a Payment on Receipt site, the Pay On field is disabled. See: Entering Purchase Order Detail Information.
The Pay On field also shows up on the Printed Purchase Orders Report, so your supplier knows that you will create an invoice upon receipt, and the supplier does not need to submit an invoice.
You may want to allow time for corrections or returns against the receipts before using Payment on Receipt to automatically convert the receipts into invoices. The profile option PO: ERS Aging Period enables you to specify this delay period between the receipt date and the invoice creation date.
When you run Payment on Receipt, it processes only those receipts whose dates are past the aging period. Payment on Receipt invoices include the sum of all corrections or returns made against a receipt during that aging period. Any adjustments you make after that aging period, you must process manually-by adjusting the invoice itself, or creating a debit memo.
The aging period does not include returns for which debit memos have already been automatically created. See: Debit Memos.
Example
Your aging period is two days. You receive 100 items on Monday, but on Tuesday discover that two items were missing from the shipment. You enter a correction to adjust the amount received to 98. When run on Wednesday (or later), Payment on Receipt generates an invoice for 98 items.
See: Purchasing Profile Options.
You can find Payment on Receipt invoices by using the Find Invoices window in Oracle Payables to search for any invoice in your system containing the prefix 'ERS-.' However, you can change this prefix, using the profile option PO: ERS Invoice Number Prefix. For example, shortening this prefix allows extra spaces for longer packing slip or receipt numbers. See: Purchasing Profile Options.
Self-billing invoices (SBI) is an automated invoicing process where the buying company creates an invoice on behalf of the supplier. Oracle Purchasing supports gapless invoice numbering for all self-billing invoice types including: payment on receipt, debit memos, and purchase price adjustment. See: Define Document Control Options.
You can create a single invoice for one or more items on a single purchase order as long as the items have not been previously invoiced and matched to a purchase order or a receipt. If you are creating an invoice from the receipt transaction and purchase order, you are able to create an invoice for all ordered and received items. In the event of a partial shipment or multiple delivery dates, you are able to create multiple invoices for a single purchase order.
In addition, if your purchase order contains multiple distribution lines, you can create an invoice in Oracle Payables with the same multiple distribution lines.
When creating multiple distribution lines for invoices with partial receipt quantities, the Pay on Receipt AutoInvoice program will either prorate the charges across all your purchase order distribution lines (for the received item) or use the FIFO method if you utilize Cascading Receipts. After the invoice has been created, you are able to make changes to the invoice distribution in accordance with the current Oracle Payables system functionality.
Invoices created automatically are subject to the same match approval levels as standard invoices to ensure proper payment. Two-, three- and four-way match approval levels are enforced by Oracle Payables if you specify two-, three-, or four-way for the supplier site Match Approval Level. Two-way match approval is the process of verifying that the purchase order and invoice information match within accepted tolerance levels. Three-way match approval is the process of verifying that the purchase order, invoice, and receiving information matches within accepted tolerance levels. The three-way match approval level is available with the Receipt Required option.
Four-way match approval is the process of verifying that the purchase order, receipt, inspection, and invoice information matches within accepted tolerance levels. The four-way match approval level is available with the Inspection Required purchasing option.
Oracle Payables requires that you approve invoices before you create accounting entries for them or pay them. Approvals can be submitted for selected invoices in the Invoice Workbench or by batch process. All discrepancies and/or adjustments must be handled manually using the appropriate online Oracle Purchasing, Receiving, and/or Payables windows.
Payment on Receipt invoices include tax, which is based on each purchase order shipment and the setup in Oracle E-Business Tax. See: Tax Information in Purchasing.
Tax on Payment on Receipt invoices is not calculated until invoice approval in Oracle Payables, or until tax calculation is performed in the Invoice Distributions window in Oracle Payables.
Oracle Payables creates scheduled payments for each invoice based on the payment terms and the invoice terms date. After the invoice has been created, you can use the Scheduled Payments window to modify information such as due dates, and to change payment and discount amounts.
You can enter supplier information in the Suppliers and Supplier Sites windows to identify which of your suppliers are eligible for Payment on Receipt and can have their invoices automatically created using the Pay on Receipt AutoInvoice program. In addition, you can specify an alternate Payment on Receipt pay site if the supplier's pay site address is different from the purchasing address. For invoices created based on receipt transactions, you can set up invoice consolidation levels for an individual pay site. You also define the default Payment Currency in the Suppliers and Supplier Sites windows.
See: Defining Standard Suppliers.
The level of invoice consolidation determines how an invoice will be created for each run of Pay on Receipt AutoInvoice program. For invoices created based on receipt transactions, you set up invoice consolidation levels for an individual pay site in the Supplier Sites window. The levels are:
'Pay Site' -- one invoice is created per supplier pay site for all the transactions that have the same transaction date.
'Packing Slip' -- one invoice is created per packing slip per supplier pay site for all the transactions that have the same transaction date.
'Receipt' -- one invoice is created per receipt per supplier pay site.
Invoice numbers are created based on the summary level. The invoice number is of the following format:
'ERS'-< X >-< Seq# >
where:
- ERS is the default prefix for Pay On Receipt invoices or any prefix you specify in the profile option PO: ERS Invoice Number Prefix. See: Profile Options in Purchasing.
- Seq# is a unique system generated number.
- X depends on the summary level:
- if summary level = Pay Site then X = Invoice Date
- if summary level = Packing Slip then X = Packing Slip Number
- if summary level = Receipt then X = Receipt Number
If gapless self-billing invoice (SBI) numbering is enabled, the SBI buying company identifier and selling company identifier are included in the invoice number following the prefix as shown below. See: Self-Billing Invoices.
<Prefix>-<SBI Buying Company Identifier>-<Selling Company Identifier>-<Invoice Type Code>-<Seq #>
The Pay on Receipt AutoInvoice program automatically creates an invoice batch depending on the options in the Payables Options window. Invoice count and invoice total are calculated automatically.
Prerequisites:
The supplier and supplier site must be set up correctly. Specifically, the supplier site must be set up as a Pay on Receipt site.
Attention: Check that the receipts that you are interested in have been created successfully before running this program. You can do this by locating the receipt in the Receiving Transactions Summary window.
Enter an Invoice Currency and a Payment Currency in the Supplier Sites window.
If you need to calculate tax on the invoices, enable Automatic Tax Calculation and set the Calculation Level to Line or Tax Code in the Supplier Sites window.
If the profile option Sequential Numbering is set to Partially Used or Always Used, ensure that document sequences have been defined for your invoices and have been set to automatic numbering. Otherwise, Payment on Receipt may not be able to complete because it cannot generate document numbers for the invoices. See: Common User Profile Options. See: Voucher Numbers.
To run Payment on Receipt:
Navigate to the Submit Requests window.
Choose Requests as the Type.
Choose Pay on Receipt AutoInvoice as the Name.
Choose the Transaction Source ERS.
Enter a Commit Interval. The Commit Interval is a numeric representation of the number of invoices evaluated before they are committed. For example, if you have a Commit Interval of 10, after 10 invoices have been processed, they are committed. If you then process another 5, and the process fails, only 5 will not be committed.
Optionally enter a Receipt Number.
Note: If the Receipt Number is null, the program will try to process all the receipts that have not been invoiced successfully. If you enter a Receipt Number, only that receipt will be processed.
Optionally enter an Aging Period.
The Aging Period defaults from the PO: ERS Aging Period profile option, but you can change it here. For example, an Aging Period of 2 means that Payment on Receipt processes only those receipts that are 2 or more days old.
Select Yes or No for the Pick OTL Corrections for Invoiced Receipts parameter.
If you select Yes, then the program creates either a debit memo invoice or a standard invoice for those timecard corrections made in Oracle Time and Labor (OTL), in addition to the original receipt invoice created for to the original time card receipt.
If there is a positive adjustment to the timecard amount in OTL, then a standard invoice is created. For example, an original timecard is for $100 and an invoice is created for $100 for the timecard receipt. When the amount is changed to $130 in OTL on the same timecard, this change creates a correction transaction with +$30 in the inventory receiving application. When the Pay on Receipt AutoInvoice program is run for this correction with receipt number as the input parameter, the program creates a standard invoice for $30.
If there is a negative adjustment to the timecard amount in OTL, then a debit memo is created. For example, an original timecard is for $100 and an invoice is created for $100 for the timecard receipt. If the amount is changed to $80 in OTL on the same timecard, this change creates a correction transaction with -$20 in the inventory receiving application. When the Pay on Receipt AutoInvoice program is run for this correction with receipt number as the input, the program creates a debit memo for $20.
If you select 'No', then the program does not generate invoices for corrections of receipts created off OTL timecards if receipt have been invoiced.
Attention: This parameter is applicable only for invoicing OTL corrections and not for any other business cases. It is applicable for ERS and ERS_AND_USE source parameters only.
Choose OK and then Submit Request to begin the process.
Make sure the Payment on Receipt process and the Payables Open Interface Import process complete successfully.
After this process completes, it calls the Payables Open Interface Import process to complete invoice creation. Therefore, note the following in the View Output screen for the Pay on Receipt process:
The Request ID for the Payables Open Interface Import process. Use this ID to check the status of the Payables Open Interface Import process to be sure it also completes successfully. If not, fix the errors in the Open Interface Invoices window and resubmit the Payables Open Interface Import process. See: Payables Open Interface Import. See: Open Interface Invoices Window.
The Group ID for the invoice batch number. If you need to query this invoice batch to fix errors, use the Group ID to query this invoice batch.