Oracle Fusion Procure to Pay – Setup and Cycle Testing (Part 2: Accounts Payable)

In Part 1, we configured the Procurement Business Unit and executed an end-to-end Procurement test scenario, which resulted in the creation of an Accounts Payable invoice using ERS (Evaluated Receipt Settlement).

In this Part 2 article, we focus on configuring the Accounts Payable function for the same Business Unit (DXB Support) and completing the remaining Procure-to-Pay (P2P) process steps, including invoice validation, accounting, and payment.

This article covers process activities 7 and 8 of the Oracle Modern Best Practice Procure-to-Pay flow.

To review Procurement setup and transactional testing, please refer to Part 1 – Procurement.

All configuration and setup activities in this article are performed from the Setup and Maintenance page.

 Task Summary

• Enabled Financials, Payables, and Payments offerings to activate Accounts Payable functionality
• Configured Common Options for Payables and Procurement to ensure consistent accounting and accrual behavior
• Defined Invoice Options to control invoice validation, adjustments, and audit compliance
• Configured Payment Options to manage payment scheduling and processing rules
• Set up Payment Terms including due dates, discounts, and instalment structures
• Reviewed Ledger Options for document sequencing and compliance requirements
• Created Payables Document Sequence Categories and Sequences for invoices and payments
• Defined and validated Payment Methods for invoice settlement
• Configured Banks, Bank Branches, and Bank Accounts for payment processing
• Assigned Business Unit Access to bank accounts and defined payment usage
• Configured Payment Process Profiles (PPP) to control payment execution logic
• Reviewed ERS (Evaluated Receipt Settlement) invoices created from Procurement receipts
• Validated and accounted Accounts Payable invoices
• Posted invoice accounting to the General Ledger
• Processed invoice payment using Pay in Full action
• Posted payment accounting and reviewed cash clearing entries
• Verified end-to-end Procure-to-Pay completion from receipt to payment

 

Enable Offering and Opt-In Features

From Setup and Maintenance, navigate to Offerings.

Ensure that the following offerings are enabled:

• Financials
• Payables
• Payments

These offerings activate Accounts Payable setup tasks and transactional pages required for invoice processing, accounting, and payment execution.

 

 

Manage Common Options for Payables and Procurement

 

This task controls shared configuration options used by both Procurement and Accounts Payable.

It includes key setup areas such as:

• Default liability and expense accounts
• Automatic offsets and balancing
• Expense accrual options
• Currency conversion behaviour
• Self-billed invoice controls

These configurations ensure accounting consistency with Finance and Business Teams and smooth integration across the Procure-to-Pay lifecycle.

 

 

Manage Invoice Options

Invoice options define how invoices are processed for the Business Unit.

It is mandatory to disable “Allow adjustments to paid invoices” to ensure accounting integrity and audit compliance.

Additional options include:

• Default invoice and payment currency
• Pay groups
• Payment terms defaults
• Tolerances and validation controls

These settings must align with business and finance policies.
For detailed descriptions, refer to Oracle documentation.

 

Manage Payment Options

Payment options define when and how payments are created and processed.

These settings control:

• Payment scheduling behaviour
• Validation rules
• Grouping of invoices into payments

Proper configuration ensures accurate and controlled payment execution.

 

Manage Payment Terms

Payment Terms define automatic rules for invoice due dates, discount dates, and installment amounts (percentages or fixed), enabling flexible early payment incentives (like "1/10 Net 30") or staggered payments for customer/supplier transactions

There are many pre defined payment terms available, however, there always requirement of new terms according to business requirement. We can configure accordingly.

In this test I am using pre defined available.

 

 

Payment terms can also support:

• Multiple installments (e.g., partial payments)
• Early payment discounts (e.g., 10% discount within 10 days)

 

 

              

Manage Payables Document Sequences

Accounts Payable document sequencing is configured at the Ledger or Legal Entity level.

First, review the ledger options associated with Business Unit DXB Support.

Task: Specify Ledger Options

 

 

Task: Specify Ledger Options

Scroll to the Sequencing By option.

The current setup is No Sequencing, which can be changed to Ledger or Legal Entity level sequencing if required.

The option Enforce Document Sequencing must be enabled for document sequencing to function.

This configuration should be reviewed and approved by the Finance team.
For this test scenario, the existing configuration is retained.

 

 

To define sequencing for invoices and payments, the following tasks are required:

• Manage Document Sequence Categories
• Manage Payables Document Sequences

 

Manage Payment Methods

Task: Manage Payment Methods

This task is used to define payment methods such as checks, electronic funds transfer, or wire payments.

For this test scenario, predefined payment methods are used.

 

 

 

 

Manage Banks

Banks must be configured to support payment processing.

Bank setup is performed at the Legal Entity level.

For this test scenario, a bank is created for the Business Unit DXB Support.

Task: Manage Banks

Click Create to define a new bank.

 

Manage Bank Branches

Create a bank branch associated with the newly created bank.

 

 

Manage Bank Accounts

Create new bank account

Under General Tab, we have Payment Documents.

Create a bank account and associate it with the bank and branch.

Under the General tab, configure Payment Documents as shown in the screenshots.

A check book can also be defined if required.

 

Under Business Unit Access, create a Business Unit access record and default:

• Payment Category
• Payment Method

Ensure that Account Use options are selected; otherwise, the bank account will not be available during payment processing.

Manage Payment Process Profiles

Task: Manage Payment Process Profile

A Payment Process Profile (PPP) controls how payments are processed.

The payment method, bank account, currency, and Business Unit determine which payment process profile is applied to invoices.

Payment Process Profiles help control and restrict payment execution based on business rules.

 

Test Scenario

In this section, we process the ERS invoice created in Part 1 through Accounts Payable.

From the Payables Home page, navigate to Invoices.

 

This is the Invoices landing page.
You can view recent invoices or search manually.

The ERS invoice appears under the Recent invoices list.

Click the Invoice Number.

The invoice has been successfully created from the Purchase Order receipt.

The Purchase Order number is visible at the invoice line level, confirming ERS processing.

The first step is to validate the invoice.

From Invoice Actions, select Validate.

 

Invoice is validated now.

After validation, create accounting.

From Invoice Actions, select Post to Ledger.

You can also choose Draft Accounting to review before Posting to Ledger

 

A confirmation message indicates that accounting is complete.

Click View Accounting.

 

The accounting lines show:

• Expense account – Debit
• Liability account – Credit

 

 

Click the Validated link to return to the invoice summary.

The invoice status now shows Validated and Accounted.

 

 

Invoice Payment

From Invoice Actions, select Pay in Full.

The payment dialog displays:

• Bank Account
• Payment Process Profile
• Payment Document

These values are defaulted based on earlier configuration.

Click Submit to process the payment.

 

A confirmation message appears, and the invoice status changes to Fully Paid.

 

 

You can see the invoice ins showing Fully Paid

 

Navigate to Payments from the Payables Home page.

Select Manage Payments.

From the Actions menu, select Post to Ledger.

A confirmation message appears.

Click View Accounting.

 

 

You can observe:

• Liability account cleared
• Offset posted to the Cash Clearing Account

The cash clearing account will be reconciled later in Cash Management.

 

Click the payment number to review detailed payment information.

 

Conclusion

This Part 2 article completed the Accounts Payable configuration and testing, finalizing the Procure-to-Pay lifecycle initiated in Part 1.

It demonstrated invoice validation, accounting, and payment processing for ERS invoices using Oracle Fusion.

Together, Part 1 (Procurement) and Part 2 (Accounts Payable) provide a complete, end-to-end Procure-to-Pay implementation and testing guide aligned with Oracle Modern Best Practices.