ORACLE

R12

PAYABLES

INTERVIEW QUESTIONS

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
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.
4)What are the journals entries in Procure to Pay Cycle.
Ans)
Description
A) Po creation

DR
No Entry

CR
No Entry

B) While Receiving the goods

Accurval

Material Receiving

Ap

C) While Inspection

No Entry

No Entry

D) While Trans ford the good to Inventory

Receiving

Inv Org Material

Material

Purchase price Varience

F) While Po Is Matching to Invoices

Ap Accurval

Liability

G) While Making the Payment

Clearing

Liability

Cash

H) Ofter Reconciliation

Cash Clearing

Cash

I) Final Entry

Inv Org Material

Cash

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 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.
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 - 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.

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. 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 eCommerce 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 suppliers account with appropriate funds.
You provide your bank with your suppliers bank information, and your bank sends you
confirmation of your transaction. Your suppliers 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 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 recurringinvoice 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

How many types of Invoices we can create in Oracle Payables?

A. Standard
B. Debit Memo
C. Credit Memo
D. Pre-Payment
E. Expense Report
F. Withholding Tax Invoice
G. Miscellaneous Invoice

Describe the 4-Way Matching?

2 Way Matching: The Invoice Amount Should match with PO, (Invoice with PO)
3 Way Matching: The Receipts Should match with Invoice, (Invoice, PO with Receipts)
4 Way Match: The Goods Should match with Inspection/Accepted (Invoice, PO, Inspections &
Receipts)
2-Way (Invoice to Purchase Order)
Quantity billed vs. quantity ordered on shipment line
Invoice unit price vs. purchase order line unit price
3-Way (Invoice to Purchase Order and Receipt)
2-Way match criteria AND
Quantity billed vs. quantity received
Item = Receipt Required
4-Way (Invoice to Purchase Order and Receipt and Inspection)
3-Way match criteria AND
Quantity billed vs. quantity accepted
Note: Quantity accepted = (Quantity received quantity rejected)
Item = Inspection Required
How many Holds we have?
System Holds: Tax, Quantity Match, Po amount with Invoice Amount
Manual Holds: Invoice Limit, Hold on Invoice
Can you Release Manual Holds? If Yes, How?

Yes. Holds Release Holds

How many ways you can pay the Invoice Amount?
Apply in Full
Schedule Payments
Installments
What is the difference between Debit and Credit Memo?
Debit Memo will raise the Customer
Credit Memo will raise the Vendor
Can you create a Duplicate Vendor ?
No
Vendor Number Should be Generate Automatic or Manually?
Both, Manual And Automatic
How many key flexfields are there in Payables?
No key flexfields in PO,AP
What are Payment Terms?
Payables uses payment terms to automatically calculate due dates, discount dates, and discount
amounts for each invoice you enter. Payment terms will default from the supplier site. If you need to
change the payment terms and the terms you want to use are not on the list of values, you can
define additional terms in the Payment Terms window.
What are the Payment Methods available?
Check You can pay with a manual payment, a Quick payment, or in a payment batch.
Clearing Used for recording invoice payments to internal suppliers.
Electronic You generate an electronic payment file that you deliver to your bank to create
payments. Use Electronic if the invoice will be paid using EFT or EDI.
Wire Used to manually record a wire transfer of funds between your bank and your suppliers
bank.
What are the line types of an Invoice?
Item: Item lines capture the details of the goods and services billed on your invoice.
Freight: Freight lines capture the details of your freight charges.
Miscellaneous: Miscellaneous lines capture the details of other charges on your invoices such as
installation or service.
Tax: Payables integrates with Oracle E-Business Tax to automatically determine and calculate the
applicable tax lines for your invoices.
What are the Invoice Distribution Types?
Item
Freight
Miscellaneous
Tax

Withholding
Prepayment
What are Holds in AP?
Holds can be placed by the system and some holds can be placed manually. Holds prevent payment
and, sometimes, accounting of an invoice. Payables applies holds to invoices that fail the Invoice
Validation process. Release holds from invoices to allow payment and accounting entry creation for
the invoices.
What are the Interface Tables in AP?
AP_INVOICES_INTERFACE
AP_INVOICE_LINES_INTERFACE
AP_INTERFACE_CONTROLS

AP_SUPPLIERS_INT
AP_SUPPLIER_SITES_INT
AP_SUP_SITE_CONTACT_INT
AP_SUPPLIER_INT_REJECTIONS
What is the API to cancel single AP Invoice?
AP_CANCEL_PKG.AP_CANCEL_SINGLE_INVOICE
What is the API to find invoice status?
AP_INVOICES_PKG.GET_APPROVAL_STATUS
Give some of the Oracle Payables interface?
a) Credit Card Transaction Interface
b) Invoice Import Interface
c) Payables Open Interface
d) Purchase Order Matching
What are the key tables where supplier bank information are stored?
IBY_EXTERNAL_PAYEES_ALL
IBY_EXTERNAL_PAYERS_ALL
IBY_EXT_BANK_ACCOUNTS
IBY_PMT_INSTR_USES_ALL
What is meant by with-holding tax invoice?
A separate tax invoice generated for withholding tax amount. Later this invoice will be knocked of
when making the payment made to the authority.
What are all the Modules Interacting with AP?
Cash Management
Oracle iExpenses
General Ledger
Oracle Assets

Subledger Accounting (R12)

HRMS
Project Accounting
Purchasing/iprocurement
Global Accounting Engine (11i)
What are the mandatory setups in AP?
1- Financial Options
2- Define Suppliers
3- Define Payment Terms
4- Define Payment Methods
5- Define Banks and Banks Accounts And Banks Accounts Documents
6- Open AP Accounts Periods
What is pay date basis?
The Pay Date Basis for a supplier determines the pay date for a suppliers invoices.
Due
Discount
What is the difference between quick payment and manual payment?
Quick Payment: It allows you to make a single payment against one or more invoices at a time to
one supplier through payables.
Manual Payment: This is the process of entering the check details which has been paid manually in
some emergency requirements into the payment form and selecting the invoices of the concerned
supplier and check whether the total of the invoices and the paid amount at the header are same
and save.
What is terms date basis?
Terms Date Basis is to calculate due date.
Due date is calculated 4way. Eg: payment term is 30days

Due date = Sysdate + 30days

Due date = Invoice date + 30days

Due date = Goods Receive Date + 30days

Due date = Invoice Received date + 30days

How you will transfer payables to general ledger?
When the payable accounting entries are created, then run the program called Payables Transfer to
GL Program, which sends the invoice entries and payable entries to GL interface. Then submit a
request called Journal import to import journal entries to GL.
What are Aging Periods?
Aging periods are nothing but the periods that we setup to control and maintain the supplier
outstanding bill towards the invoice. From this we can able to study the due date of the supplier form
the generation of invoice.

What is a Mixed Invoice and how do I enter one?

Mixed Invoices are invoices or credit/debit memos for which you can perform both positive and
negative matching to purchase orders and to other invoices.
For example, you can enter an invoice for -$100 with Invoice Type Mixed. You can match to an
invoice for $-200, and match to a purchase order for $100.
To enter a Mixed invoice:
1. Enter the invoice or credit/debit memo in the Invoices Summary, and enter Mixed as the invoice
Type. You can enter either a positive or negative invoice amount.
2. Match to purchase orders, and/or invoices.