Financial Options

Use the Financials Options window to define the options and defaults that you use for your Oracle Financial Application(s). Values you enter in this window are shared by Oracle Payables, Oracle Purchasing, and Oracle Assets. You can define defaults in this window to simplify supplier entry, requisition entry, purchase order entry, invoice entry, and automatic payments.

Navigation

Payables: Setup > Options > Financial Options

Financial Option Regions

• Accounting
• Supplier-Purchasing
• Encumbrance
• Tax
• Human Resource

Accounting

Liability: Payables assigns this account as the default Liability Account for all new suppliers you enter. You can override this value during supplier entry. If you use Accrual Basis accounting, then the Liability Account for an invoice determines the liability account(s) charged when you create accounting entries for invoices.

Prepayment

The Prepayment account and description for a supplier site's invoices. The Financials option value defaults to new suppliers, and the supplier value defaults to new supplier sites.

Future Dated Payment

If you use future dated payments, then enter a value for Future Dated Payment account. This value defaults to all new suppliers and new bank accounts. The supplier value defaults to all new supplier sites. The bank account value defaults to new payment documents.

Discount Taken

If you choose to distribute your discounts to the system Discount Taken Account, Payables uses this account to record the discounts you take on payments

PO Rate Variance Gain/Loss

Payables uses these accounts to record the exchange rate variance gains/losses for your inventory items. The variance is calculated between the invoice and either the purchase order or the receipt, depending on how you matched the invoice. These accounts are not used to record variances for your expense items. Any exchange rate variance for your expense items is recorded to the charge account of the purchase order.

Expenses Clearing

This account is optional when you use the Company Pay payment option of Oracle Internet Expenses. Payables uses this as a temporary account to record credit card transaction activity

Miscellaneous: Used only when importing invoices submitted via iSupplier Portal or XML Gateway.

Retainage: Used for the amounts or percentages of payments that are withheld until work under a contract is completed and accepted

Supplier- Purchasing

The options you define in this region, except for Inventory Organization, are used as default values for the Purchasing region of the Suppliers window. 

The supplier values default to new supplier sites for the supplier, which default to new purchasing documents for the supplier site. 

You can override defaulted values during entry of the supplier, supplier site, and purchasing documents.

RFQ Only Site

Default value for new supplier sites. When this check box is checked for the supplier site, then you cannot create purchase orders for this site, you can only create request for quotations.

Ship-To/Bill-To Location

The name of the ship-to/bill-to location for the system default value. If the name you want does not appear in the list of values, use the Location window to enter a new location. 

Ship Via

Shipping method type. If the type of shipping method you want does not appear in the list of values, use the Define Supplier QuickCodes window to enter a new shipping method.

FOB

If the type of FOB you want is not in the list of values, use the Define QuickCodes window to enter a new FOB.

Inventory Organization

You need to choose an inventory organization if you use Purchasing. You can associate each of your Purchasing installations with one inventory item master organization. When you associate your Purchasing installation with an inventory organization, items you define in this organization become available in Purchasing. You can only choose an inventory organization that uses the same set of books as your Purchasing installation. Do not change the Inventory Organization after you have already assigned one to Purchasing.

Freight Terms

The freight terms for a supplier identify whether you or your supplier pays for freight charges on goods you receive. You can create new freight terms in the QuickCodes window.

Encumbrance

Use this region to enable encumbrance accounting and to specify the default encumbrance types Payables assigns to your invoices, and Purchasing assigns to your requisitions and purchase orders.

If you enable encumbrance accounting or budgetary control, Purchasing creates encumbrance journal entries when you reserve funds for a requisition or purchase order. 

If you use the perpetual accrual method in Purchasing, Purchasing reverses purchase order encumbrances when you inspect, accept, and deliver the units. 

If you are using the periodic accrual method in Purchasing, Payables reverses the purchase order encumbrances when you create journal entries for invoices. Payables creates encumbrance journal entries when you approve an unmatched invoice or when there is a variance between a matched invoice and the purchase order to which it is matched. 

Oracle Financials provides two predefined encumbrance types that you can use to identify requisition, purchase order, and invoice encumbrances: Commitment and Obligation. You can define additional encumbrance types in Oracle General Ledger. 

Use Requisition Encumbrance:

Enable this option to encumber funds for requisitions. If you enable this option, Purchasing creates journal entries and transfers them to General Ledger to encumber funds for purchase requisitions.

Encumbrance Type

If you enable Use Requisition Encumbrance, you must select a requisition type by which you can identify your requisition encumbrance journal entries. Purchasing assigns this encumbrance type to the encumbrance journal entries it creates for purchase requisitions.

Reserve at Requisition Completion

If you enable Use Requisition Encumbrance, indicate whether you want requisition preparers to have the option to reserve funds. If you do not enable this option, only requisition approvers will have the option to reserve funds.

Use PO Encumbrance

Enable this option to encumber funds for purchase orders, purchase order matched invoices, and basic invoices (not purchase order matched). If you enable this option, Purchasing encumbers funds for purchase orders and Payables encumbers funds for variances during Approval for purchase order matched invoices. If you enable this option and enter a non-purchase order matched invoice, Payables will encumber funds for it during Approval. All Payables encumbrances are reversed during Posting. If you enable Use Requisition Encumbrance, you must also enable this option.

PO Encumbrance Type

If you enable Use Purchase Order Encumbrance, select a purchase order encumbrance type by which you can identify your purchase order encumbrance journal entries. Purchasing assigns this encumbrance type to the encumbrance journal entries it creates for purchase requisitions and purchase orders.

Invoice Encumbrance Type

If you use purchase order encumbrance, select an invoice encumbrance type by which you can identify your invoice encumbrance journal entries. Payables assigns this encumbrance type to the encumbrance journal entries that it creates when Approval approves an unmatched invoice or an invoice matched to a purchase order for which there is a variance.

Tax

The options you enter in this region control VAT registration for tax purposes.

Member State

The location of your company or organization.

VAT Registration Number

The value added tax (VAT) registration number for your organization. Your organization is assigned a VAT Registration Number if you register to pay VAT.

Human Resources

Use this region to enter the options and defaults for entering employee information in the Enter Person window.

Business Group

Enter the name of the business group that you want  to associate with Purchasing. If you use Purchasing jointly with Oracle Human Resources, you must reference the business group that you define in Oracle Human Resources. 

If you use Purchasing without Human Resources, you can use the default value. The default for this field is the Human Resources default of Setup Business Group.

The business group determines which employees you can use in Purchasing. In Purchasing, you can see only the employees in this business group.

Expense Reimbursement Address

Select the default address you want to use on payments for employee expense reports: Home or Office. The system uses this default for each new employee you enter. You can override this default during employee entry or expense report entry.

Use Approval Hierarchies

Enable this option to use positions and position hierarchies to determine approval paths for your documents within Purchasing. Disable this option of you want approval paths based on the supervisor structure.

Employee Numbering Method

You can enter your employee numbers manually or let the system generate sequential employee numbers.