What is Future Dated Payment/Bills Payables in Oracle Fusion Applications?

Future dated payments or Bills Payable in Fusion Application is used to control the timing of your payments, and therefore control your cash flow. A future dated payment helps bank to disburse funds to your supplier's bank on a specific date which is known as the maturity date. For future dated payments, Payables creates journal entries in two stages, first to recognize the payment (reduction of liability), and the second to recognize the clearing of the payment (reduction of cash).

Bills Payables (it’s like Post Dated Cheque) with maturity date on the check. Future dated payments are payments that mature in future, eg bills payable or postdated check.

What are the different accounting entries involved in Future Dated Payment/Bills Payables?

Below are the different accounting entries which happens in Oracle Fusion application during Bills Payable.

1. At the time Payment Issue (Status Issued)

                AP Liability A/c Dr

                                     Bills Payable/Future Dated Payment A/c Cr

2. At the time of Payment Maturity (Status Maturity)

                    Bills Payable/Future Dated Payment A/c Dr

                                          Cash Clearing A/c Cr

3. During Bank Reconciliation (Status Cleared)

                 Cash Clearing A/c Dr

                                           Cash A/c Cr

Below are the steps to configure functionality for Future Dated Payment/Bills Payables in Oracle Fusion Application-

1. Provide Bills Payable Account in Common Options

2. Create Payment Method in Bills Payables

3. Create Standard Invoice for Desired Amount

4. Make Payment and include Maturity date

Provide bills payable account in the common options. Only after maturity date supplier can encash the check we are going to issue.

Search for Task- Manage Common Option for Payables and Procurement through project, Click on Go to Task and enter bills payable account-save and close.

Search for Manage Payment Method- go to task and create separate payment method for bills payables.

Provide required details, enter start date and enable- For Use in Payable

Under Bills Payable Tab- enable- “Bills Payable” check box.

Move to Cash Management Tab –enable “Enable for use in Cash Management”

And click “Use payment method to issue bills payable”

Save and Close and Click done.

Create standard invoice now for USD 5000, Enter invoice details and under invoice action go to “Manage Instalments” to override default payment method to bills payable method.

Save and close, validate this invoice and choose post to ledger.

Now make payment , go to payment and create payment –enter details and select payment method as Bills payable-

Specify maturity date under tab “Advanced” enter date-

Select invoice now on same screen to pay.

Apply and OK.

Now navigate to “Schedule Process” and search for “Update Matured Bills Payable Status”

Enter Business Unit and Maturity details.

Run this job.

Check Status for Payment just done, Status should be “Negotiable”

Run create accounting for Payment document number 5085

Check Accounting for Payment done.

Surinder

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