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Why “Alternative Payee” is missing in Oracle Payable/Payment

Posted on July 2nd, 2008 by Sanjit Anand |Print This Post Print This Post |Email This Post Email This Post

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One quick question from non Oracle user ..

Do we have any functionality in Oracle for handling "Alternative Payee" in payable ?

check

My answer is NO , at least I have never seen any seeded out-of-box, though Customer asked many times..

 

Does anyone have any answer from Oracle side?

In the real business environment, there are many cases where the vendor name used for procurement purposes may be different than the name that the vendor must be paid to. Instead of using the vendor name as the payee name, it required to have an alternate field where we can state the payee name.

The good is that SAP does has capability to handle such functionality as they maintain an alternative payee at the supplier master level and wherever you need to pick either of them just pass the information and print the name of Check. So simple...That's why user coming from SAP product really hates Oracle, and complaining why Oracle does not have such small things, but they don't have choice.

Minor Customization or work around is not always a choice for SME's as cost be major driving for the implementation.No comment on this..

I tried to explore by asking to core user, how they are achieving this in SAP. They simply run through few steps and demonstrated how they achive this. Within SAP this consist of few steps as:

  • Created a vendor master record for the alternative payee. Block this account against posting.
  • Specify the account number of the alternative payee in the Alternative payee field within the payment transactions section of the vendor master record.
  • While making payments for this vendor, the payment program access the name and address of the alternative payee.Cool..

dgreybarrow-2Oracle Approach

Some things called "Factoring Arrangements"

What is Factoring Arrangements ?

Exploring in accounting books and google , A factoring arrangement is basically a purchasing agreement under which a person or entity such as a big Corporation acquires outstanding debts, invoice or account receivable at a discount from another entity, usually a company.This was very common in US specially in textile industry. [Adopted]

Let see how Oracle trying to handle this in payable:

When the check is going to a factor or for a garnishment you can create a pay site and indicate the payee's name on the first address line starting with "OR Factor".

This is what 11i/R12 payable/Payment documentation says :

If a vendor A sells its receivables to a factor (ie third part for your Oracle), you can enter invoices for the supplier A and make payments to the factor by creating a pay site defined for the factor. On the first address line enter the name of the factor preceded by the word "and" or "or." On the remaining two address lines, enter the address of the factor. Payables then addresses the payment to the supplier and/or the factor, since Payables prints the vendor name and the three address lines on each payment.

How Oracle explain this case

Supplier ABC has sold their receivables to Factor B, and you want to send payments directly to Factor B.

Case (i) You want your payment document to be made out to "ABC or Factor B."
Case (ii) You want your payment document to be made out to"ABC AND Factor B."

Define a pay site for supplier ABC called Factor B.
On the first address line enter "OR Factor B." for case (i)
On the first address line enter " AND Factor B." for case (ii)

On the remaining two address lines enter Factor B's address.

If you select the Factor B supplier site when you enter and pay an invoice for ABC, the first two lines of the payment will read "Payable to: ABC OR Factor B" if setup is as case (i) or "Payable to: ABC AND Factor B." if setup is case (ii).

And this way the factor can endorse and cash the payment.

I tried and tested , but this does not serve the purpose.Any one have some better idea , Please ...

Don't tell customization , I have 2-3 options ready to fit but customer want $0 solution.

dgreybarrow-2Finally

Is this a totally different things not any work around with alternate payee.

Lets hope, Oracle payment is new family in R12 might,consider this an enhancement request to cater the need for those user who is moving from SAP to Oracle.

Any thoughts welcome :)

Disclaimer : SAP Functionality which is discussed is based out of Personal observation and discussion with SAP user, which they are using bit older version.Any Conflicts with SAP functionlity must be validated. Oracle Version which is used for reference is 11.5.10.2/R12.

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Posted in Oracle Payable | 10 Comments »Email This Post Email This Post | Print This Post Print This Post

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10 Responses
  1. Sandeep Says:

    Cant v enable DFF in payment workbench eg:”Is Payee Different” v will have two options(Yes or NO) > If yes enter the third party name otherwise select NO”.
    While check printing it will take the third party name and if there is no third party name then it will take supplier name. (This DFF is workaround solution and Check printing will be Report Customaziation).

    (picked this from another site…)

  2. sanjit Says:

    Thanks Sandeep,

    DFF is always a good solutions, to capture additional information, but on that Customer does not requires any customazation, as they want $0 Solutions.

    Out of 2-3 options of handling these DFF is definetly a good choice , but there are some additional things which should be considered from Business side.

  3. Krishanu Bose Says:

    I had faced the same issue in one our implementations and we had gone ahead with a small customization. This is a common business requirement and i wish Oracle comes up with an enhancement.

  4. Sanjit Anand Says:

    thats true Krishanu,

    this should be there….I have listed …around 30-35 basic points on which Oracle does not have capability as compare of SAP.

    I currently involved in SAP -> Oracle implemenatation, and hoping I will bring some thoughts on it.

    thanks for stopping by
    sanjit

  5. Phanupong Says:

    Regarding Distribution Set, when should we use Skeleton, and when should we use Full distribution set?

    thanks…

  6. Jaya Says:

    Hi,

    Please provide the list of 30-35 basic points on which Oracle does not have capability as compare of SAP.

    This should be an interesting read!

  7. Sanjit Anand Says:

    Jaya, I will do it , once i get some bandwidth free, for not in next 3-4 weeks as pre-occupied with other activity.

    There are more than 50+ features that I can figure out, which I learn from SAP while replacing with Oracle. Oracle is still on missing side, if end user is concern.

    sanjit

  8. PS Says:

    Just wondering, if we pay the original invoice by using a dummy bank account that has an account of type Liability. Then create an invoice to the supplier(who has factored the receivables). The debit will be to the dummy account used to pay the original invoice. Then pay this invoice thru the regular bank account.

    This is just a work around

  9. Shankar Ganesh C T Says:

    This functionality is available in R12.1.1.

    Check the metalink note : Is there a Way to Link an Alternative Payee to a Supplier for Payments? [ID 949183.1]

  10. Sanjit Anand Says:

    Thanks Shankar for pointing this node. Hoping payable department have no more complain about lacking functionlity.

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