How to use Pooled Account in Oracle Payables

In most of the Government Organizations as well as few other companies might have a requirement they want to manage multiple Funds with Single Bank account. In that case you cannot create two bank accounts in Oracle Applications, but you need to ensure the Expense and Accounting distribution lines are created with Multiple Lines for each Expense as well as Liability Accounts and Bank Account.

Example: You have a Fund Account which needs to be managed for Operational Expenses separately and Capital Expenditure related separately with a single Bank Account. I have defined my Key Flexfield Segment as follows

Segment1: Entity (Balancing Segment)

Segment2: Fund (01- Opex Fund and 02-Capex Fund)
Segment3: Cost center
Segment4: Account (Natural Account)
Segment5: Future

The Set up required for achieving this are as follows

Step:1 Navigation Path
Accounts Payable Responsibility
Setup    Options    Payables

In the automatic Offset Method, Enable the Account Radio button. The Functionality of Automatic Offset is as follows

•       If you enable Account and when you create Invoice with Multiple Distribution Lines, the system will keep the Liability Account picked up from Supplier site Constant and replace all other segment values with Expense Distribution Lines in the Liability account.

•       If you Enable the Balancing Segment Radio button, then the system will keep the Balancing segment value from Expense Distribution and the Account segment value of the Liability Account picked up from Supplier site as Constant and replace all other segment with Expense Distribution Lines.

Note: The Accounting Entries will be generated only on approval of Invoice if you enabled AME approval workflow.

Step2:

Navigation Path: Accounts Payable Responsibility

Set up    Payments    Banks

In Payables Option Tab Enable the Pooled Account Check Box

The Pooled Account will segregate and distribute the Payment Entries from One Bank Account Distribution Entries to Multiple Bank Account Distribution Entries according to the Liability Entries

Step3:

Navigation Path: Accounts Payables Responsibility

Invoices    Entry    Invoices

You create an Invoice and Enter the Distribution Lines as follows Charge Account

First Line 0001.01.000.5001.000 - Amount 1000

Second Line 0001.02.000.5001.000 – Amount - 500

save the record and validate the transaction and approve the transaction. In Normal circumstance where the automatic Offset is not enabled in Payable Option you will find only One Liability Entry picked up from Supplier site. Since we enabled automatic Offset set to Account it has created two Liability Distribution Lines as shown in the screen shot keeping the Natural Account code picked up from Supplier site constant and replaced all other segments from Expense Distribution Lines

Step 4:

Navigation Path: Accounts Payables Responsibility

Payments    Entry    Payments

Create a Payment for the above Invoice and you will find two Distribution Lines for Liability and Cash Account. This is from the Pooled account set up in Bank. If you do not enable the pooled account in Bank Payable Options Tab, You will find only one accounting distribution line picked up from the Bank defined for Cash Account segment values.

Conclusion: This will help you to monitor and control the Fund kept in Single Bank Account and manage for multiple Funds like opex (01 of Second segment in this case) and capex funds (02 of Second segment in this case).

Note: You may not be able to get Multiple Distribution Lines in the above manner in Receivables Module for Receivables Account and Bank Account till 11.5.10. In R12 using Subledger Accounting, Account derivation Rules, You should be able to achieve Multiple Distribution Lines for Receivables Account and Bank Account.