Oracle Accounts Payables Automatic Offset Accounting -oracleappshelp.com

Oracle Accounts Payables R12 provides the feature of Automatic Offset Accounting in Oracle Payables which means that when automatic offset accounting is enabled and the invoice is submitted for approval, then Oracle Payables automatically allocates an Invoice’s Liability Account to the balancing segment on the Invoice Distribution Line based on default liability account defaulted from the Supplier Site.

Invoices submitted for approval cannot overwrite the accounts as Oracle Payables does not reflect the offset account for each invoice distribution.

Automatic Offset Accounting could be useful when an organization is using the same Operating Unit to make purchases with multiple balancing segments and thus in such cases creating different liability accounts for different distribution accounts becomes difficult.

Automatic Offset Accounting Methods

The Automatic Offset Accounting can be defined in 2 ways:

The Automatic Offset Accounting methods varies the Accounting entries for the defined Accounting Flexfield structure – Balancing Segment-Cost Center-Account

Accounts defined in Oracle Payables

Distribution Account
         balseg01.123.DistAcct01 DR 50
         balseg01.345.DistAcct02 DR 70
Liability Account
         balseg99.999.LiabAcct99 CR 120

Balancing as Automatic Offset Method: Performs the below actions

Payables takes the default liability account for the invoice
Substitutes the balancing segment from the invoice distribution
Use the balancing segment as distribution’s offsetting liability account

Accounting with Balancing Automatic Offset Method
        balseg01.999.LiabAcct99 DR 50
        balseg01.999.LiabAcct99 DR 70

Account as Automatic Offset Method: Performs the below actions

Payables takes the account used for the invoice distribution
Substitutes the account segment from the Invoice’s default liability account,
Retains the other segment values

Accounting with Account Automatic Offset Method
        balseg01.123.LiabAcct99     DR      50
        balseg01.345.LiabAcct99     DR      70

Automatic Offset Accounting Setup in Oracle Payables

Navigate to Setup -> Option- > Payable Option
In Accounting Option Tab , Select Automatic Offset Method as ‘Balancing’

Payable Invoice Creation using Automatic offset Accounting

Perform the below steps to create Invoice with Automatic Offset Accounting

Enter the Invoice Details
Click on Invoice Distribution button
Enter multiple balancing segment for Invoice Line

Type    Amount      GL Date             Account
Item    700         04-JAN-2021    01.200.7112.00
Item    1000        04-JAN-2021    02.200.7112.00

Save the Invoice
Validate the Invoice
Ensure Invoice Accounted and Journal Entry created
The Accounting entries have been subsituted with Liability Account . Consider your liability account is 2400 , then entry should change to

01.200.2400.00

02.200.2400.00

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