Supplier Creation Full Guide in Oracle Fusion Applications
Learn step by step how to register supplier in Oracle Fusion Applications
In today’s article, I will guide you on how to create a supplier in Oracle Fusion Purchasing Cloud Service in very detailed information. I am very sure after reading this article you will definitely have a clear picture of how to register suppliers and you will be aware of all additional steps which we need to take in order to fully register suppliers for purchasing transactions and payments.
So, let’s start right away. Below is our content for full Supplier setup in oracle Fusion Application:
- Create Supplier Profile
- Create Supplier Address
- Create Supplier Site
- Create Supplier Site Assignment
- Create Supplier Bank Account
First of all, let me start with the supplier definition. What is a supplier and what is their role in the Business?
A supplier is a person, organization, or other entity that provides service or goods to our company. A supplier is also known as a vendor.
Let’s say you are running a pizzeria; you will need someone to supply you pizza ingredients or maybe someone to supply you pizza boxes and accessories or perhaps another pizza tool for selling a pizza. Hence, all of your services rely on suppliers.
So in order to proceed with your payments to the supplier for the services, first you need to register the supplier in your system to be able to fulfil the Invoice and the payment details.
Go to Procurement> Suppliers:
Click on <Create Supplier>:
Fill in the below details and click <Create> button:
Supplier: Supplier name
Business Relationship: Spend Authorized or Prospective
Tax Organization Type: the type of organization: Corporation, dealer etc…
Tax Registration Number
Let me explain to you the difference between Spend Authorized and Prospective Suppliers.
Prospective suppliers are limited to sourcing and qualification activities, whereas Spend authorized suppliers are limited to purchase orders and agreements. It means prospective suppliers have a restricted level of access. They can participate in supplier qualification initiatives, and they can view and respond to negotiations.
Spend authorization requires a more complete level of information about the supplier and is subject to approval by the supplier manager. Once the supplier is approved for spend operations, they have access to all the normal capabilities of the application.
Choose the appropriate Supplier type.
Please note that Supplier Type LOV should not have any impact on the downstream flows.
You can see different tabs from Profile Options on the Supplier General Information window. You can click on each tab to see if you need to fulfil the details.
As an example, you need to classify <Tax Classification Code> for the supplier.
Tax classification codes are automatically created when you create a tax rate and you select a subledger to be used e.g. payables. If you do not pick these subledger boxes then no tax classification codes with be
If the user needs to manually create Tax Classification Codes this is done by going into Functional Setup Manager (FSM):
Pick the task ‘Manage Tax Lookup Codes’
The following Lookup Types are used for tax classification codes:
ZX_INPUT_CLASSIFICATIONS = Payables
If Supplier transactions are subject to Withholding tax, then you need to enable this feature from Profile Options> Income Tax> Check Use withholding tax. By WHT, your company reduces the payment amount by the withholding tax proportion. Then you pay the tax withheld directly to the appropriate tax authorities.
As the profile is all set up, you can register Supplier Address by clicking on the “ +” button on Addresses Tab.
The main field I want to bring your attention to is <Address name>. Why I say it is important because when we give a name to the address we are creating we can use this address for different Business Units purchases.
Ordering: The address for your Supplier to use to receive Order
Remit To: Purpose of <Remit to Address > — The address for your Supplier to use to receive payment for their open debit items.
Enter the address of the party designated to receive payment on behalf of the supplier on the invoice.
Save and Close.
The site represents a business relationship between a Procurement Business Unit (BU) and the supplier. The site allows a specific procurement BU to set terms, controls, and policies which govern how procure to pay transactions are executed between its client BUs and the supplier.
The following information defines the site:
Site purposes: Purchasing, Pay, Procurement Card, Primary Pay, and Sourcing Only.
Go to the Sites tab and click on the “+” icon to create a new site.
You need to select Business Unit to which you want to link the address. Please note that you can use the same Address for different Business Units. Address Name is the one that I have defined while creating an address.
I have clicked <Site purpose> as Purchasing and Pay, as I am going to use this supplier in my Purchase Orders and I am also planning to make a payment to this Supplier.
Subtabs on the Sites page include:
- General: User can provide additional identifier information including a customer number, which is the internal number the supplier uses to identify the buying organization, alternate site name, and a tax reporting indicator.
- Purchasing: User can define purchasing terms for this site including communication details, self-billing information, freight, and hold controls.
- Receiving: Provide information relating to receiving controls such as overreceipt tolerance, early receipt tolerance, receipt routing and so on
- Invoicing: Define invoicing controls and terms such as invoice currency, payment currency, invoice-related holds, match approval levels, payment terms, pay date basis and so on.
- Payments: Define supplier bank accounts, preferred payment methods, and other payment processing attributes for the site. Bank account information is used for paying supplier invoices by electronic funds transfer (EFT).
- Site Assignments: Maintain the set of client BUs that can use the site for purchasing and invoicing purposes ( I am talking about this in a much more detailed way below)
Supplier Site Assignment
Every supplier site must have an active assignment to create transactions against the site, such as purchase orders or invoices. In other words, if a site assignment does not exist or is inactive, you cannot create transactions for that supplier site.
Go to Site which you have created for Business Unit and click “+” sign on <Site Assignment> subtab to create a Site Assignment.
In a site assignment, only Client BU and Bill-to BU are required values.
- Client BU: Select the appropriate BU from the list of all requisitioning and invoicing BUs that are serviced by the procurement BU.
- Bill-to BU: If the selected BU performs invoicing, then the same BU can be used as the Bill-to BU.
- Ship-to Location: Identifies the default shipping location used on purchasing documents for the client BU.
- Bill-to Location: Identifies the default billing location used on purchasing documents for the sold-to BU.
- Withholding tax information: Indicate whether withholding tax is enabled for the assignment. Please note that in order to activate WHT on the supplier site, first WHT needs to be allowed on the supplier level. I have mentioned it earlier in Supplier Profile section.
- Liability distribution/Prepayment Distribution: Provide accounting information for the sold-to BUs for defaulting during invoice creation.
Save your work.
Supplier Bank Account Setup
You can set up a supplier’s bank account at the supplier, supplier address, or supplier site level. In our example, I will show you how to set up a bank account for a supplier on the Supplier Site level.
Go to Site> Payments> Bank Accounts and click on <New> button:
> In the Bank Account region, select an option from the Country choice list.
> In the Account Number field, enter the bank account number.
> From the Branch choice list, select the branch where the bank account will reside.
> To make international payments to a supplier’s bank account, select the Allow international payments check box.
> If you are setting up a supplier’s bank account in a European country, enter the International Bank Account Number (IBAN) in the IBAN field.
> From the Currency choice list, select the currency in which payments are made.
Save and Close your work.
The article is quite long and tiring, but I hope you found it useful:) Please share the article to reach more people. Thank you for reading:)
If you are not sure what to read next, here is the next article for you:
Chart Of Accounts Setup In Oracle Fusion
Learn how to set up Chart of Accounts (COA) value sets, values, structure and instances in Oracle Fusion Applications
Receipt/Invoice Close Tolerance explanation in Purchase Order/Oracle Fusion Procurement
Today I am going to take you through detailed information of Receipt/Invoice Close Tolerance explanation and how…
Procure to Pay Process Flow in Oracle Fusion Procurement
Learn the steps that business run for P2P Cycle in Oracle Fusion
I am an Oracle Functional Specialist with more than 6 years of experience. I help clients to understand software capabilities and to analyze business needs. My main goal is to recommend solutions and ultimately guide through all phases of Oracle Cloud Applications. I am also inspired to write about life, improvement and personal growth.