Third party Payment in Oracle Fusion Payables
Jun 2020
Madhavi Godbole
What is a Third-Party Payment?
This is a new enhancement feature in Fusion Financials. Now let us discuss the terminology used in this enhanced feature.
A third-Party payment is a payment that a company makes to a designated party on behalf of the supplier on the invoice. Payments are generally made to the original supplier providing the goods or services. However, there can be specific arrangements made wherein suppliers can specify a different party to be paid on their behalf.
Payments made to other parties on behalf of the suppliers are called Third-Party Payments.
Following are a few instances where third-party payments are made:
- A supplier files for bankruptcy. Let’s say the supplier has some outstanding receivables from certain customers. The court or the collection agency then sends a notification to all the customers saying that any outstanding payments that are due should be paid to them instead of to the supplier.
- A supplier has a cash flow problem. Here, the supplier sells all of their receivables to a third party. The third party then notifies the customers about this change.
Third-Party Payment Process:
- A third-party payment agreement is signed between the parties that is, the buying organizations’ supplier and a party.
- The buying organization receives a purchase invoice for the goods and services rendered by the supplier. The invoice may have remit-to information, which would be the third party.
- The buying organization makes an invoice payment to the third party.
| How You Set Up Third-Party Payments: Below are the steps in order to complete the Third-Party Payments: Creating the Third-Party: Create Supplier Set the Address Purpose field to ‘Remit to’. You may create a supplier site if the third party is a supplier that sends you invoices. Defining the Relationship Between the Third Party and the Supplier Add the third party to the Third-Party Payment Relationship section on the Invoicing tab on the Edit Site page. Consider marking the relationship as the default relationship for new invoices and payments. This table describes each attribute of a third-party payment relationship.AttributeDescriptionRemit-to Supplier Enter the party designated to receive payment on behalf of the supplier on the invoice. Address Name Enter the address of the party designated to receive payment on behalf of the supplier on the invoice. From Date, To Date Specify an inclusive date range for the relationship. When you create an invoice or payment, the invoice and payment dates are used to identify valid third-party payment relationships for the supplier site. Note: When you end date an existing relationship, you must review all unpaid or partially paid invoices for that relationship.DescriptionEnter text to include in the payment file. For example, you can enter text to print on the payment document as reference information. This image is from Oracle Fusion Help. Setting the Remit-to Supplier Override Option (Optional)In the Setup and Maintenance work area, go to Task: Manage Invoice Options, with the business unit scope set Select the Allow remit-to supplier override for third-party payments option to allow override of the remit-to supplier on the invoice. Setting the Payee Override OptionIn the Setup and Maintenance work area, go to Task: Manage Invoice Options, with the business unit scope setSelect the Allow payee override for third-party payments option to allow override of the payee on the payment. |
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