Application Payables Questions

Payables Interview Questions

1. Types of Invoices in Oracle Aplns

Answers :
Standard
Prepayment
Expense Report
Mixed Invoice
Credit Invoice
Debit Invoice

2.What is Mixed Type Invoice in Oracle Apps

Answers :
Mixed Invoice is one of the invoice type in the Oracle Payables. You can enter both the Negative and the Positive
Amount for this Mixed Type Invoice. This Payment type is not rigid like Standard, Prepayment, Credit & Debit
Memo Invoices to enter the amount in the specific signs (Positive or Negative) .
3. Difference Between the Manual Hold and the System Hold.
Answers :
System Hold apply to the Invoice if Something Mismatched in the Invoice as per the Standard Process Like Invoice
Header Total and Line Total Should be Equal Other System Hold for Example related to Invoice Matching If
Something goes about the Invoice Tolerance Limit then System Put the Hold. System hold is something related to
setup Controls. But Manual Hold is something which put manually in the Invoice due to any reason like Product
received from the Supplier is Damaged so need to hold the Payment for that Invoice.
4. What is Pay Alone in AP Invoice?
Answers :
Pay alone is something related to Invoice Payment. This is the Flag we set for AP Invoice, It Means this invoice will
be paid alone. For example, Supplier A has 3 Invoices, but for 1 Invoice we have enabled the Pay Alone Flag Then
When we will run the Payment Batch then System will create one Check for two invoices and Separate one Check
for Pay Alone Invoice. This Is the Working of Pay Alone.
5. Can We pay the AP invoice before Due Date?
Answers :
Yes, we can Pay the Invoice Before Due date. For Manual Payment, there is no concern but for Payment Batch,
When we are running the Payment Process Request then we need to Enter the Pay Through Date this Date is Very
Important, If we have set the Pay Through Date “07-Dec” then this Payment Request will pick only those AP
invoices which has been due before “07-Dec-2018”.
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6. How AP Invoice Payment Due Date Calculates in Oracle Payables

Answers :
Invoice Payment Due date depends on the Two Factors.
1.Payment Terms attached to the Invoice
2. Invoice Date.
For Example, if Payment Terms is 30 Days and the Invoice Date is 12-Dec-2018
Then Payment Due Date Will be : 12-Jan-2019
7. What is Primary and Secondary Ledger in Oracle Payables ?
Answers :
Primary Ledger is the Main Ledger and Secondary Ledger is the Replica of the Primary Ledger. We Do transactions
in the Primary Ledger. The main reason of using Primary and Secondary Ledger is the difference in the Organization
Requirment and the Statuary Requirment. For example, One US based company office is in India and as per US
Company, their Calendar works from Oct to Sep but the in India their calendar works from Apr to Mar SO in this
Kind of Requirment, Primary and Secondary Ledger concept comes. Where we can design the Primary calendar as
per the US based but can design the Secondary calendar as per India Statuary Requirment.

8. What is Recurring Invoice in Oracle ?

Answers :
As its name represents ‘Recurring’. Recurring means again and again. If any Organization books the Office rent
invoice every month for the same amount or any other fixed expenses every month then oracle has provided the
Recurring Invoice. We just need to do the recurring Invoice setup for that amount and system will create the
invoice automatically on the First day of the Months.

11. What is the Use of Payables Trial Balance report ?

Answers :
Payables Trial Balance Report shows the Total Liability or the Supplier Outstanding in the System. This Report
shows the Liability in the System supplier and Site Level. This Provide the Summary Information’s for all the Unpaid
amount for the Supplier Invoices which are validated.

12. What we do in the AP and GL reconciliation ?

Answers :
In the AP and GL reconciliation, we try to Match the Total Liability from the Payables with the Liability accounts
total in the GL. We have some set of Liability accounts in the Payables, which we only use in the Invoice Headers to
book the Liability and we match only these Liability GL accounts in the AP and GL reconciliation report.
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We took the help of Payables Trial Balance report to find the Total AP liability and then Run the GL Trial Balance
report to match the Payables Trial Balance Report Total with the GL trial Liability Accounts.

14. Distribution Set in Oracle Payables

Answers :
Distribution set is the combination of multiple Distribution lines using different -2 GL accounts Combination. For
Example , We booked most of the AP invoices in two different GL accounts combination so each time we need to
enter two lines in the invoice distributions to book the AP invoices expenses in these two GL accounts but this
process can be make query quickly and easy. Oracle have functionality like Distributions set in oracle payables
where we can any number of GL accounts line for a Given Distribution sets and then in the Oracle Payables
Invoices we don’t need to create Distribution lines manually. We just need to enter the Distributions Set in the Ap
invoice Lines and oracle system automatically creates the Invoice distribution lines with GL accounts given in the
distribution set in oracle payables r12.

16. Types of Calendar In Oracle Payables

Answers :
Accounting Calendar: - Accounting Calendar is related to the Ledger which we attach the GL Ledger during
creation. Accounting calendar is the system calendar, If we need to enter any transaction in the System for Specific
period then that period in the Accounting Calendar should be open. If the Period is Closed we cannot do any
transaction for that period. This Totally controls the system.

Special Calendar: Special Calendar does not have any link with the Accounting. We define this Calendar to be used
by Recurring Invoices, Payables Tax Setups and in the Payments Terms too.
For Example, With the help of Special Calendar we determine the Tax Authority Invoices Dates or For Recurring
invoices, System create the Recurring invoice from first day of the Month but if we have an Requirment to create
around 10 of each month then we can design the Special calendar for Recurring Invoices in which each month will
be start from 10th.

18. Special Calendar Types

Answers :
1. Recurring Invoice
2. Withholding Tax
3. Payment Terms
4. Key Indicator

20. Can we Do Cross Currency Payment in Oracle Payables r12 ?

Answers :
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Cross currency is If I have received the Supplier Invoice in USD but I will pay this Invoice with my Base Currency
INR. So this Is Called Cross currency in Oracle Payables. In Oracle apps r12 we have no option to use Cross
currency.
21. Can we do Multi Site Payment for the Same Supplier in Oracle Payables r12 ?
Answers :
Yes, we can do the single payment for the multiple sites invoices for the Same Supplier in Payables r12. This
Feature in available in the Oracle r12

1.Explain about Accounts Payable.

Ans)The Accounts Payable application component records and manages accounting data for all
vendors. It is also an integral part of the purchasing system: Deliveries and invoices are
managed according to vendors. The system automatically triggers postings in response to the
operative transactions. In the same way, the system supplies the Cash Management application
component with figures from invoices in order to optimize liquidity planning.

2.What is the meaning of invoice?

Ans)An invoice or bill is a commercial document issued by a seller to the buyer, indicating the products, quantities,
and agreed prices for products or services the seller has provided the buyer. An invoice indicates the buyer must
pay the seller, according to the payment terms.

In the rental industry, an invoice must include a specific reference to the duration of the time being billed, so
rather than quantity, price and discount the invoicing amount is based on quantity, price, discount and duration.
Generally speaking each line of a rental invoice will refer to the actual hours, days, weeks, months etc being billed.

3) Can you give a sample Process Flow for Procure to Pay Cycle?

Ans) Process flow for Procure to pay will go through two departments
(Commercial & Finance)
Procure - Commercial Department The following steps invovle to prcure any item
1. Received Requsition from concern Department
2. Request for Quotation from Suppliers at least three
3. Finalize the best Quotation by keeping in mind about our companies standard
4. Check the Budget for the same
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5. Negociate with supplier for more economic pricing and finalize the payment terms
6. Process the PO and forward to the supplier to supply the goods and services

Pay Cycle - Finance Department

The following steps need to be fulfil
1. Invoice should be match with PO
2. Invoice should has all the supporting documents such as PO copy,Delivery note duly signed by reciever (our staff
who authorized to received goods / store keeper)
3. If the invoice is for services then it should be forwarded to the concern department head or project manager for
his confirmation of work done and his approval
4. Even if it not the services invoice, it should forwarded to the concern person's approval who request the PO for
the same
5. Finance can reject the invoice if it is not budgeted and ask for the reasons.
6. After receiving all the confirmation and approvals from the concern department heads the invoice will be update
in to the accounting system first in order to avoid any duplication of Invoice and PO (it shown on accounting
package if the invoice is duplicate if not, altelast it tells you if the PO already used or cancel)
7. Finance approved the invoice and process the payment base on payment terms with the supplier.

5)What is the difference between EFT & Wire?

Ans)EFT and WIRE are the most popular form of electronic payment method. EFT stands for electronic fund
transfer and it is one of the fastest mode of electronic payment after WIRE. EFT is a batch oriented mechanism for
transfering funds from one bank to another because of which clearing & settlement takes around 2 to 4 days. On
the other hand, WIRE is a RTGS i.e. real time gross settlement system of making the fund transfer on real time and
gross basis. Clearing and settlement happens on the same day. WIRE is more expensive and faster than EFT.

6) What Is Meant By Distribution Sets:

Ans)You can use a Distribution Set to automatically enter distributions for an invoice when you are not matching it
to a purchase order. For example, you can create for an advertising supplier a Distribution Set that allocates
advertising expense on an invoice to four advertising departments.
You can assign a default Distribution Set to a supplier site so Payables will use it for every invoice you enter for that
supplier site. If you do not assign a default Distribution Set to a supplier site, you can always assign a Distribution
Set to an invoice when you enter it.

Use Full Distribution Sets to create distributions with set percentage amounts, or use Skeleton Distribution Sets to
create distributions with no set distribution amounts. For example, a Full Distribution Set for a rent invoice assigns
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70% of the invoice amount to the Sales facility expense account and 30% to the Administration facility expense
account. A Skeleton Distribution Set for the same invoice would create one distribution for the Sales facility
expense account and one distribution for the Administration facility expense account, leaving the amounts zero.
You could then enter amounts during invoice entry depending on variables such as that month's headcount for
each group.

7)What is the meaning of GRN?

Ans) GOODS RECEIPT NOTE MEANS IT PROVES THAT MATERIAL IS DELIVERED AT STORES DEPARTMENT. GRN IS
THE BASE DOCUMENT AND IMPORTANT DOCUMENTS FOR PROOF OF RECEIPT OF MATERIAL AT WARE HOUSE.THIS
CAN BE PREPARED BY STORES DEPARTMENT AND APPROVED BY PLANT HEAD. GRN CONTAINS ORDERED
QTY,RECEIVED QTY AND ACCEPTED QTY. BILL WILL BE PASSED BASED THE GRN NOTE. ONCE THE GRN IS PREPARED
AUTOMATICALLY INVENTORY WILL BE UPDATED AND ACCORDINGLY PAYMENT WILL BE RELEASED TO THE
VENDOR.

GRN contains the following details.

1.Ordered quantity .
2.Received Quantity.
3.Defective quantity in received quantity .
4.Quality standards details.

8) How does the payment mechanism work?

Ans) The open items of an account can only be cleared once you post an identical offsetting amount to the
account. In other words, the balance of the items assigned to each other must equal zero.During clearing, the
system enters a clearing document number and the clearing date in these items. In this way, invoices in a vendor
account are indicated as paid, and items in a bank clearing account are indicated as cleared.

You generally use the payment program to clear invoices. Manual clearing of open items is therefore not usually
necessary. However, you will sometimes have to clear items manually if, for example, you receive a refund from
your vendor or you have set up a direct debit procedure.

9) Difference between interface tables and base tables?

Ans) The difference between the interface and base tables is as below

Interface table: is the table where the data gets validated before data get posted to the base tables. There are
many interfaces which are seeded with Oracle. You can consider as the entry point of the data, and the interface
checks the sanity of data.
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Base tables: As told earlier once the data is validated will get updated in the base tables, and is considered as the
data which is in the base table is accurate and used in many ways. (Reporting..etc..)

The base tables in AP are as follows:

1) ap_invoices_all
2) ap_invoice_payments_all
3) ap_invoice_distibutions_All
4) ap_payment_schdules
5) ap_payment_dustributions_all
6) ap_checks_all
7) ap_accounting_events_all
8) ap_bank_accounts_all
9) ap_bank_accounts_uses_all

10) What is the process of creating an Invoices and transferring it to GL?

Ans)
1. create batch
2. create invoice
3. create distribution
4. validate the invoice
5. actions -à approve
6. if individual create accounting click ok
7. If batch go to batch create accounting.
8. Create accounting hits Payable Accounting(Transfer) ??Program which will create accounting.
9. Run Transfer to GL Concurrent Program
10. Journal Import
11. Post journals
12. Hits balances.

11) How do u Transfer from AP to GL?

Ans)“Payables transfer to GL program” is used to transfer from AP to GL.
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12) How many types of invoices are there in AP.

Ans)
1. Standarad invoice
2. Debit Memo
3. Credit Memo
4. Mixed Invoice
5. Retain age Invoice
6. Transportation invoice
7. Prepayment invoice
8. Expenses Report Invoice
9. Payment Request Invoice
10. Po default

13) How many types of purchase order types/agreements are there?

A) Standard Purchase Order: You generally create standard purchase orders for one-time purchase of various
items. You create standard purchase orders when you know the details of the goods or services you require,
estimated costs, quantities, delivery schedules, and accounting distributions. If you use encumbrance accounting,
the purchase order may be encumbered since the required information is known

B) Planned PO : A planned purchase order is a long-term agreement committing to buy it

items or services from a single source. You must specify tentative delivery schedules and all details for goods or
services that you want to buy, including charge account, quantities and estimated cost.
EX: Buying goods for Christmas from a specific dealer.

C) Contract PO : You create contract purchase agreement with your supplier to agree on specific terms and
conditions without indicating the goods and services that you will be purchasing i.e. for $ amount you must supply
this much quantity. You can later issue standard PO referencing your contracts and you can encumber these
purchase orders if you use encumbrance accounting.

D) Blanket PO : You create blanket purchase agreements when you know the detail of goods or services you plan
to buy from a specific supplier in a period , but you do not yet know the detail of your delivery schedules. You can
use blanket purchase agreements to specify negotiated prices for your items before actually purchasing them.
A Blanket Purchase Agreement is a sort of contract between the you and ur supplier about the price at which you
will purchase the items from the supplier in future. Here you enter the price of the item not the quantity of the
items. When you create the release you enter the quantity of the items. The price is not updatable in the release.
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The quantity * price makes the Released Amount. Now suppose your contract with your supplier is such that you
can only purchase the items worth a fixed amount against the contract.

14.Payment Method
A funds disbursement payment method is a medium by which the first party payer, or deploying company, makes a
payment to a third party payee, such as a supplier. You can use a payment method to pay one or more suppliers.
Oracle Payments supports several payment methods for funds disbursement, including the following:

Check
Electronic
wire
Clearing
Check:
You can pay with a manual payment, a Quick payment, or in a payment batch.

Electornic:

Electronic An electronic funds transfer to the bank of a supplier.You create electronic payments either through the
e- Commerce Gateway, or by delivering a payment batch file to your bank. For both methods, Payables creates a
file during payment batch creation. If you are using the e-Commerce Gateway to create the file of payments, an
EDI translator is required to create the EDI Formatted file prior to delivering it to your bank.For electronic funds
transfers, the file is formatted and delivered to your ap.out directory for delivery to your bank.

Wire:

Wire Funds transfer initiated be contacting the bank and requesting wire payment to the bank of a suplier.A
payment method where you pay invoices outside of Payables by notifying your bank that you want to debit your
account and credit your supplier’s account with appropriate funds. You provide your bank with your supplier’s
bank information, and your bank sends you confirmation of your transaction. Your supplier’s bank sends your
supplier confirmation of the payment. You then record the transaction manually.

Clearing:

Clearing Payment for invoices transferred from another entity within the company without creating a payment
document.Payment method you use to account for intercompany expenses when you do not actually disburse
funds through banks. You do not generate a payment document with the Clearing payment method. When you
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enter the invoice, you enter Clearing for the payment method.You can record a Clearing payment using a Manual
type payment only.

15.What id recurring invoices? What are AP setup steps?

Ans) some times suppliers would not be sending any invoices. but still the payment have to made to home: rent,
lease rentals. in this situation we have to create invoice every period wise. For that purpose we have to create one
recurring invoice template. Template means with one master copy creating the multiple invoices is called
template. Here we are creating the one invoice master copy is formally known as recurring invoice or recurring
invoice template.
SET UP:
1)we have to create one special calendar
2)we have to create one full distribution set
3)we have to enter payment terms in the recurring invoice window
4)enter the template no, first invoice amount, special invoice amounts