Understanding the disbursement payment method
You can use the disbursement payment method to pay employees, suppliers, and customers. The disbursement payment method can be printed (a check) or electronic (a wire, bill, or electronic funds transfer [EFT]). You can make a disbursement payment method to do the following:
Use for a new payment
Assign a validation to the payment method, so it will affect all payment files, documents payable, and payments
Specify usage rules to minimize payment method use on certain legal entities, business units, or additional attributes
During the payment method creation process, you will:
Design a usage rule
Make and assign a validation
Before creating payment methods, you will need to decide the level of granularity you need for your payment methods.
Understanding levels of granularity
An important factor to determine before defining your disbursement payment methods is the level of granularity you should designate for your payments.
Least granular payment methods
The least granular payment methods (such as a check or electronic payment) are predefined in Oracle Cloud Payments. This setup lets you link each payment method to multiple payment formats and payment process profiles. The predefined methods don’t require as much knowledge from users (like invoice entry clerks) but may cause more work further along the payment process.
Most granular payment methods
You can set up more granular payment methods than the predefined ones. If you define payment methods, you can add validations targeted to particular transactions.
For example, you could set up a wire for US Citibank with a validation for bank branch number and postal code. The specific validation can help you validate as early as invoice entry, which helps you correct mistakes quickly.
Creating granular payment methods will naturally lead to many additional payment methods. Payment method defaulting rules simplify invoice creation. With defaulting rules, you won’t have to pick a payment method out of the many available, and the system will automatically assign a payment method.
The UI also includes the option to use defaults that are specific to suppliers. You can enable this option from the Manage Disbursement System Options page’s Payment Method Default Basis section.
Designing a usage rule
Creating usage rules lets you enable or disable payment methods for every source product that integrates with Oracle Cloud Payments. Usage rules are helpful if you need to specify when a disbursement payment method becomes available for source products to use with documents payable. You are able to provide various usage rules for different source products.
You can modify if and when a payment method will be made available.
If you go to the Create Payment Method page and click the Usage Rules tab, you can choose whether to assign the payment method to one of the following:
Particular payment process transaction types for Oracle Cloud Cash Management
Particular legal entities, business units, and payment process transaction types for Oracle Cloud Payables or for Oracle Cloud Receivables
All payees
Making and assigning a validation
If you go to the Create Payment Method page and click the Validations tab, you can create user-defined validations, or you can assign predefined validations to this payment method.
Validations are rules that check the validity of payment files, documents payable, or payments.
Understanding the payment method defaulting rule
The application uses a payment method defaulting rule to decide the payment method that automatically populates a customer refund or an invoice. You decide the conditions that cause the system to use a certain payment method as a default when you create payment method defaulting rules.
You may base payment method defaulting on the following:
Domestic or foreign currency or payee location
First-party legal entity
Transaction type
Source product
Business unit
As the following examples show, the priority order you set up will determine how Oracle Cloud Payables uses payment method defaulting rules:
Example 1: The first rule is a match.
In this case, Payments will stop and default the rule’s associated payment method onto the invoice.
Example 2: You make a rule saying the payment method for all documents processed by Oracle Cloud Payables will be Check first, followed by EFT.
Payments will determine whether the invoice’s conditions match the conditions of the payment method Check first. If the conditions match, then the invoice will receive Check as the payment method.
If the conditions do not match, then Payments will determine whether payment method EFT’s conditions match. If they do, then the invoice will automatically receive payment method EFT.
The following options on the Manage Disbursement System Options page can affect payment method defaulting:
Based Only on Payment Method Defaulting Rules Setup
Override Defaulting Rules when Default Method Set for Payee
The following additional factors may affect payment method defaulting:
Default payment method set at supplier site, address, or supplier level
Prioritized order of the payment method defaulting rules
Content of the payment method defaulting rules
The effects of these factors (if any) depend on your data and configuration.
