Accounts Payable Setup - Financials Options

Platform: R12

Prerequisite: Inventory Calendar and Inventory Organization must have been set up.

Refer to the following documents:

Define Inventory Calendar

Setup Inventory Organization

Payables Manager --> Setup --> Options --> Financial Options

Based on your profile options, your ‘Operating Unit’ is automatically picked up.

Refer to the following documents:

System Profile Values for GL

Define Operating Unit (Document to follow)

You have to fill in the following tabs to configure the Financials Options:

1. Accounting


2. Supplier - Purchasing


3. Encumbrance


4. Tax


5. Human Resources

1. Accounting

[caption id="" align="alignnone" width="756" caption="Financial Options: Accounting"][/caption]

Specify the number of ‘Future Periods’. Fill in the GL Accounts where required.

Note: If during the defining of our Accounting Key Flexfield Structure, we have allowed dynamic insert, we can enter the accounts directly without having to create the accounts first. If that is not the case, then we need to create all the valid accounts combinations before we can use them here.

Refer to the following documents:

Define Accounting KFF - Create Chart of Accounts

2. Supplier – Purchasing

[caption id="" align="alignnone" width="754" caption="Financials Options: Supplier-Purchasing"][/caption]

Specify the Ship-to Location and Bill-to Location. Inventory Organization is mandatory.

Note that we need to create the Inventory Organization and define the Additional Organization Information Details.

3. Encumbrance

[caption id="" align="alignnone" width="755" caption="Financials Options: Encumbrance"][/caption]





Specify the options for encumbrance if you are using encumbrance accounting.

4. Tax

[caption id="" align="alignnone" width="755" caption="Financials Options: Tax"][/caption]





Specify your VAT Registration information if applicable.

5. Human Resources

[caption id="" align="alignnone" width="756" caption="Financials Options: Human Resources"][/caption]





Based on your profile options, your Business Group is automatically picked up.

Specify your ‘Expense Reimbursement Address’. The Employee generation method is automatically picked up from the Extra Information configured on your Business Group.

Refer to the following documents:

Define Business Group (Document to follow)

Shameem Bauccha

24 June 2009

Inventory Organization - Receiving Options

Platform: R12, 11.5

Refer to document ‘Create Inventory Organization‘.

[caption id="" align="alignnone" width="891" caption="Receiving Options"][/caption]

You also need to configure your Receiving Options and input your Accounting for Receiving.

Note, now you have configured your inventory organization. You need to do the same thing for all your inventory orgs (that is you need to configure the Additional Organization Information for all your inventory orgs).

Shameem Bauccha

24 June 2009

Inventory Organization - Organization Parameters

Platform: R12, 11.5

Refer to document ‘Create Inventory Organization‘.

Define Organization Parameters

1. Inventory Parameters

[caption id="" align="alignnone" width="716" caption="Inventory Parameters"][/caption]

Before defining any Inventory Organization, we need to have a Master Inventory Organization which acts as a central repository for items. After we have defined the Master Inventory Organization, we need to define its organization parameters. Generally we give the code 'IMM' to denote the Inventory Item Master Organization.

We need to attach the Master Organization in the Organization parameters. Attach the Inventory Calendar.

Refer to document 'Define Inventory Calendar'.

Configure the Inventory Parameters including locator control.

2. Costing Information

[caption id="" align="alignnone" width="717" caption="Costing Information"][/caption]

The Operating Unit is automatically picked up as the Costing Organization.

Choose the appropriate 'Costing Method' (FIFO, Standard, Average). Specify whether to Transfer to GL.

Input the valuation Accounts.

3. Revision, Lot, Serial and LPN

[caption id="" align="alignnone" width="716" caption="Revision, Lot, Serial and LPN"][/caption]

If you are using Lot, Serial and/or LPN control, configure this window, otherwise accept the default values.

4. ATP, Pick, Item-Sourcing

[caption id="" align="alignnone" width="717" caption="ATP, Pick, Item-Sourcing"][/caption]

If you are using iProcurement, configure the ATP defaults, Picking defaults and Item-Sourcing rules.

5. Inter-Org Information

[caption id="" align="alignnone" width="716" caption="Inter-Org Information"][/caption]

Configure this section for Inter-org transfers.

6. Other Accounts

[caption id="" align="alignnone" width="716" caption="Other Accounts"][/caption]





Specify the following Accounts:

• Receiving Accounts


• Profit and Loss Accounts


• Other Accounts

When you are done, save and click on 'OK'. You will get the following warning:





[caption id="" align="alignnone" width="412" caption="Note-Costing Method"][/caption]

Bauccha Shameem

24 June 2009

Inventory Organization - Customer/Supplier Association

Platform: R12, 11.5

Refer to document ‘Create Inventory Organization‘.

Customer/Supplier Association



[caption id="" align="alignnone" width="769" caption="Customer/Supplier Association"][/caption]

This is important to define if you will allow internal requisition and sales between your inventories.

Detailed explanation to follow during preparation of Inventory Tutorial.

Shameem Bauccha

24 June 2009

Inventory Organization - Accounting Information

Platform: R12, 11.5

Refer to document 'Create Inventory Organization'.

Accounting Information



[caption id="" align="alignnone" width="769" caption="Accounting Information"][/caption]



Attach your primary leder.

Based on your Primary Ledger, your Legal Entity i automatically picked up.

Optionally if you have defined an Operating or have multiple units on the same insrtallation, attach the Operating Unit.

Save and Click on 'OK'.

Shameem Bauccha

24 June 2009

Create Inventory Organization

Platform: R12, 11.5

Define Organization and classify organization as ‘Inventory Organization’

Refer to the following documents:

Setting up Organizations

Create Organization

Additional Organization Information

You can access the Additional Organization Information by selecting the classification and clicking on the 'Others' button.



Select appropriate Extra Information to configure.

[caption id="" align="alignnone" width="391" caption="Additional Organization Information"][/caption]

In the case of Inventory Organization, 4 Extra Info are defined:

• Accounting Information


• Customer/Supplier Association


• Inventory Information


• Receiving Information

Shameem Bauccha

24 June 2009

Create Organizations

Platform: R12, 11.5

Understanding the ‘Organization’ window

[caption id="" align="alignnone" width="617" caption="The Organization window"][/caption]

The ’Organization’ window consists of the following sections:

1. Name: The name of the Organization
2. Type: This is a lookup that you user can define (ORG_TYPE)

(Document on Lookups to follow)

3. Date: Effective Date. This can also be changed manually while creating the organization.
4. Location: Location Details and Address
5. Descriptive Flexfield: You can configure the ‘Location Address’ Descriptive Flexfield if required.

Refer to document ‘Identify Descriptive Flexfield’ to know which DFF to setup.

6. Organization Classifications: This will determine what type of organization this is and how the entity will behave in the application depending on the role it plays. An organization may have several classifications attached to it.

For example, an organization may have people registered for it and may at the same time be maintaining stock and act as a training center. In that case, the organization will have to be classified as:

1. HR Organization so that employees may be assigned there


2. Inventory Organization so that items may be assigned to it


3. Training Organization so that the organization may be available as a training center.

(More to follow on each Organization type – refer to respective applications).

7. Others: Depending on the classification, Additional Information may have to be entered.

Setup Organization

1. Create Location

Inventory --> Setup --> Organizations --> Locations



[caption id="" align="alignnone" width="632" caption="Location"][/caption]





Location is a shared between HRMS, Inventory and Purchasing. Some of the fields not used by HRMS are disabled when Inventory and Purchasing is not installed.

Setting the scope as ‘Global’ means the location is shared across all Business Groups. Setting the location as ‘Local’ will make the location available only for the Business Group in question.

Select the scope and give the location a name.



Address Details



[caption id="" align="alignnone" width="605" caption="Address Details"][/caption]





Choose the appropriate address style and enter the address of the location. If you have defined your own address style then you can choose it here.

Refer to the following document:

Create Custom Address Style (Document to follow)



Shipping Details



[caption id="" align="alignnone" width="604" caption="Shipping Details"][/caption]





This tab is important if you are using Inventory and Purchasing. Otherwise accept the default values.



Other Details



[caption id="" align="alignnone" width="605" caption="Other Details"][/caption]

2. Create Organization

Inventory --> Setup --> Organizations --> Organizations






[caption id="" align="alignnone" width="707" caption="Organization"][/caption]




Alter effective date to a default date in the past or the organization creation date. Give a name to the Organization. Attach the location previously created. The location address gets automatically populated

Save the Organization.

3. Organization Classification

Look up the Organization classification. Ensure the 'enabled' checkbox is checked. Save. Click on other to enter the Extra Information (Additional Organization Details) as appropriate.

Shameem Bauccha

24 June 2009