The payment method that defaults onto the invoice or is entered in the invoice is what controls whether that invoice is paid as a bill payable. You can create bills payable using any payment method if it is enabled for bills payable creation.
To enable payment methods for bills payable creation, see Setting Up Bills Payable.
Once the payments are built into proposed payments, the maturity date is calculated and populated on the payment.
The Build Payments program first checks the payment method setup to see if the option to calculate a maturity date was specified on the payment method. If this is set, then the maturity date is calculated according to the payment method setting, that is, payment date plus the number of days.
Note: If you specify the maturity date calculation option on the payment method, then do not specify the option to group documents into payments by due date. You may want to use the due date grouping option to calculate maturity date by due date. In this case, you may want to issue multiple payments to the same supplier, but with different maturity dates. However, if the payment method has the maturity date calculation setting provided, then all bills payable payments created with that method in the same payment process request will have the same maturity date. Therefore, multiple payments would be issued to the same payee.
The following examples show how Oracle Payables determines the maturity date.
The table below shows invoices grouped into a payment with a payment date, or issue date, of 28-FEB-06. The maturity date for this payment will be 18-MAR-06 because it is the earliest available discount date
| Invoice Number | Discount Date | Due Date |
|---|---|---|
| 1 | 20-MAR-06 | 31-MAR-06 |
| 2 | 20-MAR-06 | 31-MAR-06 |
| 3 | 18-MAR-06 | 29-MAR-06 |
The table below shows invoices grouped into a payment with a payment date, or issue date, of 28-FEB-06. The maturity date for this payment will be 29-MAR-06 because it is the earliest available due date.
| Invoice Number | Discount Date | Due Date |
|---|---|---|
| 1 | none | 31-MAR-06 |
| 2 | none | 31-MAR-06 |
| 3 | none | 29-MAR-06 |
The table below shows invoices grouped into a payment with a payment date, or issue date, of 18-MAR-06. The maturity date for this payment will be set to 19-MAR-06 because it is the earliest available discount date since the discount on the 17th was missed.
| Invoice Number | Discount Date | Due Date |
|---|---|---|
| 1 | 17-MAR-06 | 27-MAR-06 |
| 2 | 19-MAR-06 | 29-MAR-06 |
| 3 | 20-MAR-06 | 30-MAR-06 |
When the selected invoices include credits, the system does the following to maximize use of your credits, even when the Group by Due Date option is enabled.
First, the system groups all credits, regardless of their due dates, with the first group of positive amount invoices. If the sum for the payment is negative, then the system will continue to add the next due positive amount invoice until the payment amount is positive. The maturity date for that group of invoices is the earliest maturity date of the positive amount invoices in the group, to ensure that no discounts are missed and no invoices are paid late.
For example assume the Payment Batch Payment Date = August 31, the Group By Due Date = enabled, the Pay Through Date = September 30, and the Pay Date Basis = Discount. The table below illustrates a set of invoices and discounts for these dates.
| Invoice Number | Discounted Amount | Invoice Amount | Discount Date | Due Date |
|---|---|---|---|---|
| 1 | 90 | 100 | September 15 | September 15 |
| 2 | 150 | September 18 | ||
| 3 | -150 | (not relevant for grouping) | ||
| 4 | 200 | September 25 |
The system will first group Invoice 3 ($-150) with Invoice 1 ($90). Because the sum is negative amount, it adds the next due invoice, which is Invoice 3 ($150). Because the amount is positive now ($90), it stops. It determines the Maturity Date by using the first discount or due date, which is September 15.
Since Group by Due Date is enabled, the system groups the remaining invoices as usual. So the invoices in this example result in the following payments:
Payment A $90, Maturity Date: September 1, includes Invoice 1, 2, 3
Payment B $200, Maturity Date: September 25, includes Invoice 4
Before you can create bills payable in a pay run or as single payments, you must perform the following prerequisites.
Set up your system for bills payable. See: Setting Up Bills Payable.
Create a payment process request template that uses a payment method for bills payable. See: Creating Payment Process Request Templates.
Enter the invoice received from your supplier.
Validate the invoice. See: Validation.
If you use Invoice Approval Workflow and the invoice requires approval, it must be approved before you can pay it.
To create a bills payable in a pay run, in the Scheduled Payment Selection Criteria subtab within the Payment Process Requests tab, select a Payment Method created for bills payable.
Continue entering applicable data in the remaining subtabs and submit the pay run.
To create a bills payable as a single payment, in the Payments window, select a payment method created for bills payable from the Payment Method list of values. A value from the payment method defaults into the Maturity Date field.
Continue entering applicable data in the remaining fields and save.
At any time, you can check the supplier's balance by using the Calculate Supplier Balance function. This window shows you all current liabilities. See: Calculating a Supplier or Supplier Site Balance.
To review the amounts of outstanding bills payable due to mature on a certain date, submit the Bills Payable Maturity Date Report. See Bills Payable Maturity Date Report.
Your bank disburses funds to your supplier on the Maturity Date specified on the payment document.
To update the status of your bills payable from Issued to Negotiable, submit the Update Matured Bills Payable Status program See: Update Matured Bills Payable Status Program.
Your bank sends you payment reconciliation information.
When a supplier initiates a bills payable, the supplier includes with an invoice a payment notice with a supplier-specified maturity date. You approve the payment notice and return it to the supplier. Because you do not generate a payment document, record this transaction as a manual payment using a bills payable enabled payment method.
Set up your system for bills payables. See: Setting Up Bills Payable.
Enter the invoice received from your supplier, along with a bills payable request.
Submit Invoice Validation for the invoice. See: Validation.
If you use Invoice Approval Workflow, then if the invoice requires approval, it must be approved before you can pay it.
Approve the supplier's payment notice through your organization's internal approval process.
Return the supplier's payment notice to the supplier according to your agreement.
In the Payments window, specify the invoice Type as a Manual Payment.
In the Payment Method field, select a payment method that has been enabled for bills payable.
The Maturity Date defaults from the payment method into the Maturity Date field.
At any time, you can check the supplier's balance by using the Calculate Supplier Balance window. This window shows you all current liabilities, including issued, but not yet matured (not yet negotiable) future dated payments. See: Calculating a Supplier or Supplier Site Balance.
You can review the amounts of outstanding bills payable due to mature on a certain date by submitting the Bills Payable Maturity Date Report. See: Bills Payable Maturity Date Report.
The supplier submits the approved payment notice to the bank.
The bank disburses funds on the maturity date that the supplier specified on the payment notice.
To update the status of your matured payments from Issued to Negotiable, submit the Update Matured Bills Payable Status program. See: Update Matured Bills Payable Status Program.
Your bank sends you payment reconciliation information.