When Entering A Gross of Retainage Invoice, The System Requires The Invoice Header Amount To Be Entered The Same As A Net Of Retainage Invoice (Doc ID 2001995.1)

Last updated on MARCH 08, 2017

Applies to:

Oracle Payables - Version 12.0.0 to 12.2.4 [Release 12.0 to 12.2]
Information in this document applies to any platform.

Goal

For Net of Retainage invoices, a supplier would only invoice for the Item amount - retainage + tax.

For Gross of Retainage invoices, the AP Invoice Workbench expects an invoice for the full amount with tax only calculated on the portion that is not retained.

For example, for a complex PO for $2,000 with 25% retention and 10% tax:

Invoice Amount = $2,150 (a "gross" invoice would not be for $2,150)
Items = $2,000
Retainage = $500
Tax = $150

Why does the system require gross invoices to be entered this way?

Is there a workaround? Actions tried without satisfaction:
- Enter the invoice as a net invoice, which again is a process change.
- Force the tax amount, but this then makes all GST payable upfront, and the retainage gst is not due til the retainage is paid.

Potential issue
The concern is that suppliers who invoice gross of retainage will invoice for the full amount (including tax) and not even acknowledge retainage. So in the above example, if a supplier is invoicing the GROSS amount then they will invoice $2,200 instead of $2,150 but Payables will not validate the invoice unless we enter $200 in the Tax Control Amount field.
 

Solution

Sign In with your My Oracle Support account

Don't have a My Oracle Support account? Click to get started

My Oracle Support provides customers with access to over a
Million Knowledge Articles and hundreds of Community platforms