If your enterprise uses Oracle Purchasing's Retroactive Price Update on Purchasing Documents feature, your purchasing department can retroactively adjust the price of a previously invoiced items and in Payables.
The following text applies only if your purchasing department uses this optional feature.
Attention: In certain countries, unless you receive special dispensation from the fiscal authorities, this feature may not be appropriate because it automatically generates invoices without first receiving a corresponding invoice document from a supplier.
If your Oracle Purchasing system is set up to use this feature, when an Oracle Purchasing user updates the price on an item that has already been invoiced, and then the user submits the Create Adjustment Documents in Payables program, the program adjusts the total invoiced amount to the final negotiated purchasing price. The two types of adjustment invoices are:
PO Price Adjustment: This invoice is for the difference in price between the original invoice and the new purchase order price. Also, the accounting for this invoice effectively moves any invoice price variance amount from the original invoice to the charge account.
Adjustment invoice: This invoice effectively reverses any outstanding regular Payables price corrections and PO Price Adjustment invoices. This is so the PO Price Adjustment document can be for only the price difference between the original invoice and the new PO price.
These adjustment invoices can be positive, negative, or zero amount. When the original invoice and its related adjustment documents are paid, the net effect is as if the original invoice had always had the new price. The supplier is paid the appropriate amount, and the accounting is adjusted accordingly.
You cannot manually enter these types of invoices, nor can you adjust or cancel them. You can view, report on, validate, account for, and pay them.
If you want to effectively cancel one of these invoices, the Purchasing user can set the price back to the original price on the purchase order and resubmit the Create Adjustment Documents in Payables program. This will generate new adjustment documents to net to zero any outstanding adjustment documents.
If positive, credits payment to the supplier.
If negative, debits against future or unpaid invoices.
Can be zero in some cases.
When appropriate, tax is automatically calculated.
Cannot be manually entered or updated.
Read the Oracle Purchasing User Guide section, Retroactive Price Update on Purchasing Documents for complete information on setting up and using this feature.
Before using this feature, enable the Allow Zero Payments option in the Payables Options region of the Bank Accounts window. This will allow you to pay zero amount invoices that might be generated only to adjust invoice price variance accounting.
For project-related invoices the system always exactly copies the account from the original distribution to keep the original and adjustment invoices consistent.
If the exchange rate type on the original invoice is User, then the system copies the exchange rate from the original invoice to the adjustment documents.
If the Create Adjustment Documents in Payables program cannot generate an adjustment invoice for some reason, then the program produces the Create Adjusting Documents in Payables Exceptions report. For example the exchange rate type of the original invoice is not User and there is no exchange rate defined in the daily rates table for the exchange date. The report will list this as an exception.
Note: The system produces the Create Adjusting Documents in Payables Exceptions report only when there are exceptions generated in the Create Adjustment Documents in Payables program.
Original invoices must complete Invoice Validation before Invoice Validation will process the related Adjustment and PO Price Adjustment invoices.
If you submit Supplier Merge for a supplier for which you might use the feature for, then merge all invoices, not just unpaid ones.
Extended withholding is not supported with this feature. If you use this localization, then you should not use this feature.
Because this is an Oracle Purchasing feature, most documentation for this feature resides in the Oracle Purchasing user guide and online help.
Other Sources
Retroactive Price Update on Purchasing Documents, Oracle Purchasing User Guide