Transfer Program

In Oracle Applications, modules such as AP, AR, PO, INV ,PA and WIP have concurrent processes that take the information from database structures in which the business activity is stored and inserts it into the GL_INTERFACE table.

Here are the list of some of the transferring concurrent programs are:

• Payables Transfer to General Ledger aka APPPST (AP)
• Create Journal Entries aka FAPOST(FA)
• General Ledger Transfer Program ak ARGLTP(AR)
• AX Transfer to GL akaAXXPSTGL(AX)
• Interface Burden Cost to GL PADTBC(PA)
  • PRC: Interface Labor Costs to General Ledger PAGGLT(PA)
  • PRC: Interface Usage Costs to General Ledger PASGLT(PA)
  • PRC: Interface Revenue to General Ledger PATTGL(PA)
• Transfer transactions to GL INCTGL(Inv)
• Payroll Transfer to GL(PAY)

Journal categories used while AP to GL Transfer

As you know journal categories classifications used to indicate the purpose or nature of your journal entry.Therefore in Payable the categories which are used are Invoices (also called Purchase Invoices), Payments, and All (both Invoices and Payments) and Reconciled Payments (for Payment Clearing and Payment Unclearing Events).

More Important the type of journal category you can select depends on the accounting method that you have selected for your set of books.

Doing a Transfer to GL from AP

After you create accounting entries in Payables, submit the Payables Transfer to General Ledger program which send invoice and payment accounting entries to the general ledger interface which is triggered with Journal Import program.

How and what Payables Populates into GL

Except Oracle Fixed Assets module, most of subledger transfer program moved via GL_Interface table.

Once you submit the payables transfer to General Ledger program , the data get populates into GL Interface table with accounting information for Payables transactions.

If you use Oracle General Ledger, then Journal Import uses the data in the GL Interface to create journal entries and populates the General Ledger GL_JE_BATCHES, GL_JE_HEADERS,GL_JE_LINES, and GL_IMPORT_REFERENCES tables.

When the Payables Transfer to General Ledger program transfers accounting information to the GL Interface, it always populates the following columns:

• GL_SL_LINK_ID: value is a unique, sequential number
• GL_SL_LINK_TABLE: value is APECL for Payables actuals, and APENCL for Payables encumbrances.

When you submit the Payables Transfer to General Ledger program you specify whether you want to transfer accounting information in summary or detail, and you specify the journal category. The parameters you select affect what is transferred to GL Interface columns REFERENCE21–REFERENCE30.

Read the rest of this entry »

Hard Time this week for me ,struggling with Finance user from another entity to see unexpected things reported , Out of the box File -> export function was not working properly, some of them reported Browser crashing some of them reported data not exported 100% from form, some of them reported longer duration to export for nearly 500 records from Invoice Inquiry or Invoice Entry form.

There are few cases which user can experience

• File - Export does not bring up a Save As prompt
• File -Export may leads to Browser crashes
• File - Export takes long time to export into Excel
• File - Export not exporting 100% data from form
• File - Export creates zero byte file
• File -Export on selecting "Continue to End" causes system to hang

More less, these problems are encountered by some additional setup requirement in IE . Here are few troubleshooting points, if you are using IE 6 or 7.

1. Make sure your browser will have setup completed for these 2 categories:

You should follow these Steps:

• Go to IE Tools menu - Internet Options - Security - Custom Level
• Adjust all the settings for ActiveX Controls and Downloads to be either 'enable' or prompt for zones Internet, Local Intranet, and Trusted Zones
• Restart the browser and now test if the export process works

2. Make sure if users desktop are using a proxy server to access the web via MSIE. If you set "Bypass proxy server for local addresses" in Internet Options -> Connection -> LAN Settings check if the File > Export works without error.

3. Make sure you have set System Profile Options 'Export: Mime type' to 'text/tab-separated-values' or or 'application/vnd.ms-excel'

4.Delete Browser Cache > Tools > Internet Options > zone=temporary internet files : delete files {checked offline content}

5. You should also delete C:program files/oracle/jinitiator<version>/jcache/*

6. Make sure you disable Pop-up Blocker

7. If you have still an issue , try this based out of note :338545.1

• Make sure you have checked step 1,2,3.
• Login to AP responsibility and try exporting from the data from Invoice workbench after search for invoice batch.
  Are you able to export?
• If not ,Go to (Tool Bar) Help -> Diagnostics -> Examine
  Set Block = ENVIRONMENT
  Set Field = FND_EXPORT_DEBUG
  Set Value = TRUE
• Export and observe the messages that are generated during the export process.
  What is the last pop up message ?
• Try to run the following piece of code in SQLPLUS*

declare
db_file number;
mime_type varchar2(255) :='text/plain' ;
out_string varchar2(32767) :='Just some plain text that is stored' ;
web_server_prefix varchar2(500);
url varchar2(500);
begin
fnd_global.apps_initialize(user_id => <put your user id>,resp_id => <put your resp id>,resp_appl_id => <put your appl id>);
DBMS_SESSION.SET_NLS('NLS_LANGUAGE','AMERICAN');
db_file :=fnd_gfm.file_create(content_type =>mime_type,program_name=> 'export');
fnd_gfm.file_write_line(db_file,out_string);
db_file :=fnd_gfm.file_close(db_file);
url:=fnd_gfm.construct_download_url(fnd_web_config.gfm_agent,db_file,TRUE);
dbms_output.put_line(url);
end;

If still not able to fix, ask Oracle for further resolution.

8.If you are not able to 100% export in excel do a quick check

Run this query immediatly after Export get completed
select count(*) from fnd_lobs where program_name='export';

If counts not matches then you need to recreate the index using script $FND_TOP/sql/aflobbld.sql. This is because the File/Export functionality of EBS uses system LOB columns to store temp data before it is outputed to a browser. If that temp data becomes large enough as the result of large export query set, then the max_extents limitation of the column is reached thereby causing the export to fail.

Most of my user experinces these issues with WIN2K or XP SP1 and SP2, but not with SP3.No clue for me with service pack.

Is there any linkage with window XP or 2000 .Net Framework installation and Service pack in client desktop for this feature? Do share some thoughts if anyone got such kind of issue in past.

This kind of business normally you will find in Project intensive companies, where retainage refers to a portion of the payment that is withheld until the completion of a project.

In that case the client doesn't pay the contractor/party the retainage until all work on the project is complete.

Retainage is negotiated upfront and is stated as a percentage or amount of the overall cost of the project.

There is no limit for retainage.

Example

Example 1

For example, a lets you company may hire a IT contractor for a $100,000 project. The contract stipulates 10% retainage. Over the course of the project, the client pays the contractor $90,000 for the work. But 10% of the total cost, $10,000, is withheld until the completion of the project. Once the project is completed, all the final details have been wrapped up, and the client is satisfied with the results, the client will pay the contractor the retainage amount.

Example 2

There may be other case you can have this way , the contract can specify that you will retain 20 percent from all payments until 25 percent of work is complete. Therefore, whenever the contractor sends you an invoice, you retain 20 percent of each payment until the overall progress reaches 25 percent.

Accounting Treatment

Retainage is recorded on the balance sheet.

When the voucher is processed, the following accounting transaction is generated:
DR) Expenditure(Expense)
CR) Voucher payable (Liability)
CR) Retainage payable (Retainage)

When the voucher is released by audit for payment, the following transaction is generated:
DR) Vouchers payable(Liability)
CR) Cash

To release the retainage after successful completion of the contract the following transaction is generated:
DR) Retainage payable (Retainage)
CR) Cash

Payables retainage @Oracle R12

These are two mandatory set up required in R12 to get retainage Function.

1)Retainage Account Setup
You need to first define the retainage account for the operating unit in the GL Accounts region on the Accounting tab of the Financials Options.

Setup > Options > Financials Options> Accounting tab

Oracle Payables uses this account to record the distribution on progress invoices and subsequent retainage release invoices for funds withheld from suppliers.

2)Supplier Terms and Controls Setup
You need to do Set up for your supplier's terms and control defaults using the Suppliers page.

.

Here is the quick note for Banking Details for Supplier in Release 12, which can be assigned at the following four levels:

1. Supplier
2. Site
3. Address
4. Address-Operating Unit

New accounts can be created using existing bank and branch details or new bank/branches can also be entered.

Banking Details page to define the bank accounts used for making payments to suppliers.

You can select the name and number of the bank account from the list of values that includes all active supplier type bank accounts or you can create a new bank account. For each supplier and supplier site that has bank account assignments, you must designate a primary bank account. The primary bank account is used by Payables as a default when you pay this supplier electronically.You may override the default if necessary.

You can also do setup for bank accounts for a supplier can also be setup from iSupplier portal

Using iSupplier Portal, suppliers can access their banking information and, if given the appropriate security privilege, make changes to the details. The buyer administrator can either approve the account or set the status to Verify. You can use the Verify status while you prenote the account or perform other activities for verifying an account with your bank.

You can find more details for supplier bank here.

Similar Post

• R12 Supplier Bank - Techno Functional Guide
• R12 : Bank & Trading Community Architecture(TCA)
• R12 : EBS Banking Model in demanding and Changing World
• Welcome to R12 Account Payable
• A bit on SEPA - IBAN & BIC

Three banks you can manage in EBS

• House Bank or internal bank
• External bank for supplier and Customer
  • Supplier (or External) bank accounts are created in Payables, in the Supplier Entry forms. Navigate to Suppliers -> Entry. Query or create your supplier. Click on Banking Details and then choose Create. After you have created the bank account, you can assign the bank account to the supplier site.
• Intermediary bank for SEPA payment : An intermediary bank is a financial institution that as a relationship with the destination bank (in this case the supplier bank account you are setting up) which is not a direct correspondent of the source bank (the disbursement bank in AP/Payments), which facilities the funds transfer to the destination bank.

You can enter intermediary bank accounts on Suppliers->Entry->Banking Details->Bank Account Details

This is important when paying a foreign supplier from a domestic disbursement account, there may be an intermediary bank used, and it would be set up on the supplier bank account. Although the intermediary bank UI is owned by Payments, the implementation is as embeddable UI components in pages owned by i-supplier Portal (suppliers) and AR/Collections (customers).

Some information

1. The supplier bank account information is in the table: IBY_EXT_BANK_ACCOUNTS, the bank and bank branches information is in the table HZ_PARTIES.
2. Creating a supplier in AP now creates a record in HZ_PARTIES. In the create Supplier screen, you will notice that that Registry_id is the party_number in HZ_Parties.
3. The table hz_party_usg_assignments table stores the party_usage_code SUPPLIER, and also contains the given party_id for that supplier. Running this query will return if customer was a SUPPLIER or CUSTOMER
4. Payment related details of supplier are also inserted in iby_external_payees_all as well as iby_ext_party_pmt_mthds
5. IBY_EXT_BANK_ACCOUNTS, the bank and bank branches information is in the table: HZ_PARTIES.
6. The master record that replaces PO_VENDORS is now AP_SUPPLIERS. PO_VENDORS is a view that joins AP_SUPPLIERS and HZ_PARTIES.
7. The table that hold mappings between AP_SUPPLIERS.VENDOR_ID and HZ_PARTIES.PARTY_ID is PO_SUPPLIER_MAPPINGS. Query by party_id.
8. The bank branch number can be found in the table: HZ_ORGANIZATION_PROFILES .The HZ_ORGANIZATION_PROFILES table stores a variety of information about a party. This table gets populated when a party of the Organization type is created.

ER Diagram(Bank Model)

Oracle Table Involved

• IBY_EXTERNAL_PAYEES_ALL : This stores supplier information and customer information
• IBY_EXT_BANK_ACCOUNTS : This storage for bank accounts
• IBY_EXT_PARTY_PMT_MTHDS : This storage for payment method usage rules.
• IBY_CREDITCARD : stores the credit card information for a customer
• IBY_EXT_BANK_ACCOUNTS :This Stores external bank accounts . These records have bank_account_type = Supplier
• IBY_ACCOUNT_OWNERS :stores the joint account owners of a bank account
• IBY_PMT_INSTR_USES_ALL : This stores data from AP_BANK_ACCOUNT_USES_ALL for payment instruments assignments .This information is stored in the following iPayment (IBY) tables:

Read the rest of this entry »

Nine months since the launch of SEPA, Oracle has finally released patch for SEPA Credit Transfer (SCT) for much demanded need for European EBS customer.

High Points of SEPA Project

Lets recap some of high points of SEPA project.

• Objective: Harmonize electronic payment schemes according ISO 20022 rules.
• Countries: Euro zone countries
• Transactions: Only Euro transactions.
• Period: From January 1, 2008.The goal of EPC is to make SEPA mandatory from 2011

SEPA support at Oracle

• Oracle plan is support in major product(EBS,Fusion, Enterprise) lines
• Oracle plan is to support only two types of SEPA messages in most of these products:
  • Customer Credit Transfer Initiation
  • Customer Direct Debit Initiation
    • For Availability of these functionality , check out documentation of respective products.

SEPA@ EBS

Oracle EBS functionality for SEPA messages customer credit transfer initiation (pain.001.001.02) is based on the ISO20022 format. ISO20022 format have these benefits;

• Batch booking
• Grouping : This reduce the number of transmitted files
• Remittance message
• End to end id . This will ease reconciliation and referencing

SEPA messages with Oracle EBS Release dates for 11.5.10 and 12

These are summary of different SWIFT message.

Fig 1: SEPA swift Message

Out of these list Oracle EBS supports for both Customer Credit Transfer(pain.001.001.02 ) as well as Customer Direct Debit (pain.008.001.01)

Here are the summary of information for SEPA out-of-box Functionality in EBS.

Fig 2: Oracle Support for SEPA

SEPA availability in EBS

The SEPA Credit Transfer Initiation Message is available for R11.5.10 via Patch 6741280.Customer using 11.5.10 can get the functionality enable by applying patch.

Wrapping up

• The SEPA out-of-box functionality will be released as patches
• Jan 2008 – Jan 2010 is a official transition period
• Extensive test is required with bank when you are utilizing this functionality.

Will keep you posted for any updates.:)

Similar Post

• THE SINGLE EURO PAYMENTS AREA (SEPA)
• A bit on SEPA - IBAN & BIC

Oracle white paper

• Note:738361.1 :Supporting SEPA Credit Transfer in Oracle Payables for Oracle Applications Release 11.5.10

SEPA in system context have things which is really important.

1. IBAN Code
2. BIC Validation
3. SEPA customer credit transfer, based on the ISO20022 format (XML)

So lets see why IBAN and BIC is so important.Take a note, SEPA schemes use BIC and IBAN codes to uniquely identify bank accounts

IBAN (International Bank Account Number)

The IBAN is provided by the bank servicing the account.

It should not contain any spaces when it is stored electronically. When printed on paper, however, it is usually expressed in groups of four characters, the last group being of variable length.

It consists of:

• The ISO code (two letters) of the country in which the bank account is held and a two-digit check number;
• The domestic Basic Bank Account Number (BBAN) (up to 30 alphanumeric characters).

Total IBAN length may not exceed 34 characters.

BIC (Bank Identifier Code)

The BIC is the unique identifier for banks within the European Union.The BIC is regulated by ISO 9362

It consists of 8 or 11 characters, which include:

• A bank code (four characters)
• A country code (two characters)
• A location code (two characters)
• if applicable, a branch code (three characters)

Similar Post

• THE SINGLE EURO PAYMENTS AREA (SEPA)
• A bit on SEPA - IBAN & BIC

Banks and their corporate customers are about to enter an era of profound global business change.

In January 2008, foundations were laid for a Single Euro Payments Area (SEPA) – a process that aims to deliver harmony in all financial transactions across Europe, and create the conditions for much greater standardization in the movement of money across the world. With this note, lets take a insight view of SEPA.

“The Single Euro Payments Area (SEPA) will be the area where citizens, companies and other economic actors will be able to make and receive payments in Euros, within Europe, whether between or within national boundaries under the same basic conditions, rights and obligations, regardless of their location.”

What is all the fuss about SEPA?

As its well known, Europe has had a common currency and monetary policy since the Euro was introduced in 1999 and Since 1 January 2002, consumers have been making cash Euro payments everywhere in the Eurozone.However, non-cash payments between countries - mainly credit transfers, and credit and debit cards have been expensive and complicated to transact, and a barrier to European monetary integration. There is currently no robust mechanism for a direct debit
between countries.

Therefore, The Single Euro Payments Area (SEPA) project is designed to eliminate national differences in payment instruments and processing infrastructures in Europe,and harmonies fees for cross-border and domestic Euro transactions.

SEPA Journey

It all started in the year 2002 as an initiative to transform European banking Infrastructure by creation of a European Payments Council (EPC). The purpose of such initiative was to define new rules and frameworks and simplify cross border complex payments process across Europe. This project aimed at achieving harmony between national and international payments in non-cash mode. European banking industry used to face severe losses in the process of cross border transactions. This led the banks to create the EPC.

SEPA aims at providing a common platform for all the associated members to make and receive payments in a single currency (i.e. euro) within Europe irrespective of their base location. SEPA project involves key members like European Commission (EC) and European Central Bank (ECB) supported by the European Payment Council (EPC).

About European Payments Council (EPC)

It is a European governing body, which consists of more than 50 banking institutions formed to standardize the payments mechanisms in Europe. It is the decision-making and coordinating body, which is responsible for issues related to payment systems in the European Banking industry.

Mission SEPA

• It aims to provide a single area for all payments across Europe.
• Single Account, single card mechanisms irrespective of country

SEPA Project

As per website note, SEPA implementation schedule was split into three (overlapping) phases from a banking perspective:

• Design Phase (January 2004 -June 2006)
  • Establishment of the rules, practices and standards for new payment instruments.
• Implementation Phase (June 2006 –November 2009)
  • The banks design and test new product offerings under SEPA
  • Participating countries have to set up national implementation and migration bodies to ensure smooth roll out of the SEPA infrastructure
  • Launched in January 2008:
  • SCT (SEPA Credit Transfer)
  • SCF (SEPA Cards Framework)
  • Scheduled for launch at end of 2009:
  • SDD (SEPA Direct Debit).
• Migration Phase (January 2008 – December 2010)
  • The cross-over period between the old and new instruments, ensuring a gradual market-driven migration to SEPA
  • This phase includes set-up of PEACHs (Pan-European Automated Clearing House).

Therefore this third phase is more meaningful to corporate who are running there accounting system in ERP and they must be make sure they should not impacted by product limitation and avoid penalties as there is Europe wide mandatory requirement for non-compliance. These penalties would be leveled for each individual payment, which would be substantial across 16 countries.

SEPA Consist of:

• The single currency
• A single set of euro payment instruments – credit transfers, direct debits and card payments
• Efficient processing infrastructures for euro payments
• Common technical standards & business practices
• A harmonized legal basis
• Ongoing development of new customer-oriented services

SEPA coverage area

As SEPA will be introduced on a phased basis. Thirty-one countries are currently committed to SEPA: the 27 EU member states, the three other European Economic Area countries (Norway, Iceland and Liechtenstein) and Switzerland.[source Website]

Currently only 16 counties under coverage area.

• Austria
• Belgium
• Germany
• Spain
• Finland
• France
• Greece
• Ireland
• Italy
• Luxembourg
• Netherlands
• Poland
• Portugal
• Sweden
• Slovenia
• United Kingdom

What are the different payment Instrument that cover in SEPA

There are four types of payment Instrument

1. SEPA Credit Transfer
2. SEPA Direct Debit
3. SEPA Card
4. SEPA Cash

Standardization -Addressing the SEPA schemes Requirements

The SEPA payment platform supports different schemes for both credit transfers and direct debits.

New schemes have been developed for credit transfers and direct debits that describe the technical and functional protocol for exchanging credit transfers and direct debits between two banks using formats and procedures. The formats are based on the ISO 20022 XML standard developed by SWIFT.

SEPA requires common information (‘data elements’) for SCTs and SDDs, outlined in the SEPA Credit Transfer Rulebook and SEPA Direct Debit Scheme Rulebook respectively.

SEPA within ERP

SEPA will make it possible for ERP systems to be better integrated and to communicate better with the bank.

SEPA@Oracle

SEPA support is required in Oracle in these products;

• EBS 11.5.10, 12, 12+
• Fusion

Out of these EBS support started a few days back, which will be discussed in other post.

Possible changes with SEPA

• Euro BankAccounts :
• Cash Management Structures
• Banking Interfaces

Further References

• SEPA Vision
• Making SEPA a reality
• Roadmap towards SEPA

One quick question from non Oracle user ..

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

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..

Oracle 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.

Finally

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.

Yes, that true, this is one of the functionality that Payable managers are expecting in EBS. The Oracle payable still requires enhancement in few area where this is one called is 'Stale Cheque management. This is very common trends seen by APAC entities , forced to do customization to automate this process.

What is Stale cheque ..

When payment cheques remain unpresented after certain period of drawing, the cheque has become stale and thereby should not be honoured by the bank. All entries made to the general ledger in respect of the stale cheque will need to be reversed by completing the necessary vouchers.

Is there any stipulated time when is a cheque considered stale-dated, and is it no longer valid after that point?

Yes, Checked with Financial controller and found as per CPA Rule A4, Section 21, a cheque is considered stale-dated after six months, unless it has been certified . Although it may be returned through the clearing for that reason, there is no obligation to do so, and the payers financial institution may still accept it as a valid payment item. An institution accepting a cheque that is dated more than six months earlier may choose to contact the payor’s financial institution to confirm whether the cheque will still be accepted.

What is the difference between cancelling or Voiding a payment and reversing it?

Payments should only be cancelled or voided if the goods or services have not been supplied or where the cheque is to be re issued due to some reason.

Where the goods and services have been received but the payment has not been processed within 6 months of issue, this becomes a Stale cheque. Stale cheques are reversed by receipting the same amount back into the system.

Why this is Need in Oracle ?

In the new world most of entity payment is processed by there banking partner, therefore important aspect for entity in term of managing this is bit challenging for.

1. Reconciliation AP with CM bank statement?
2. Internal Control which is subject to query by auditors?

As mention there is no automated way to manage such process, still we might can club with these manual intervention which consist of :

1. To Void the payment and choose No Action on the invoice if its to be paid again.
2. Place an appropriate hold on invoice if investigation is required, or cancel invoice from void screen.

Does Oracle Recommend a process for handling stale checks?

No not yet , as of latest 12.0.4.

The only information that Oracle has for there EBS customers is based out of metalink note:147077.1,Oracle does not have a recommended process for handling stale checks. Each business should define how they would handle this process.

One suggestion is to print on the Check that they are only valid for so many days and then to void the check after that time period if they have not come in.

There was something called "Escheating Checks" in Earlier Releases..

Don't get confused with this functionality with stale checks. This is what Oracle documentation mention in section 5.86;

In the U.S.A., each state has different rules regarding checks that have been issued by which have not cleared the bank. In most cases, the organization that issued the check is required to remit the funds (escheat) to a state tax authority. You can use the following method to create payments for the tax authority.

Prerequisite

Complete the due diligence required by the state. To pay escheated checks to the state tax authority:

1. For each supplier for which you will escheat payments, create a new supplier site. Use the tax authority's name and address for the pay site.
2. Void each payment. You may want to add a note in the description of the invoice that it was escheated to the relevant tax authority. Change the invoice pay site to the new tax authority site. Optionally assign a unique Payment Priority or Pay Group. This will help allow you to create a Payment Batch for just the escheated checks.
3. Pay the invoices and provide the necessary documentation to the tax authority.

So now, it is time to comment, share your thoughts .should this functionality is real need or customer should still manage by customization...