R12 Payments

2. <Insert Picture Here> R12 Payments Annette Dall, Principal Product Strategy Manager

3. Agenda • New Module in R12 • Disbursements • Funds Capture • Cross-function • Upgrade • SEPA payment format • Summary

4. Oracle Payments: New in Release 12 • Single point of integration, excluding Payroll Transmit to Financial Institutions Oracle Payables Oracle Payments Other applications Print Payments Oracle Receivables © 2008 Oracle Corporation – Proprietary and Confidential

5. Common Practices Decentralized Payables and Payments Invoice Entry Invoice Selection Payment Processing Operating Unit Vision Spain Operating Unit Vision Spain Operating Unit Vision Spain Operating Unit Vision Italy Operating Unit Vision Italy Operating Unit Vision Italy © 2008 Oracle Corporation – Proprietary and Confidential

6. Implement Global Best Practices Decentralized Payables and Centralized Payments Invoice Entry Invoice Selection Payment Processing Operating Unit Vision Spain Operating Unit Vision Spain Shared Service Center Operating Unit Vision Italy Operating Unit Vision Italy © 2008 Oracle Corporation – Proprietary and Confidential

7. Implement Global Best Practices Centralized Payables and Payments Invoice Entry Invoice Selection Payment Processing Shared Service Center Shared Service Center Shared Service Center Invoice Spain Invoice Italy © 2008 Oracle Corporation – Proprietary and Confidential

8. <Insert Picture Here> Disbursements © 2008 Oracle Corporation – Proprietary and Confidential

9. Disbursement Process Before Release 12 • For each unique combination of payment method, currency, and operating unit, there has to be a complete process and a separate resulting batch Payment Oracle Payables Payment Build File User Select Invoices © 2008 Oracle Corporation – Proprietary and Confidential

10. Disbursement Process in Release 12 • Payment file is taken from an intermediary pool of built payments so selection criteria no longer has to include payment method, currency, and operating unit. Payment File Oracle Payables Payment Build User Pool of Built Payments Payment File Select Invoices • Fewer files to transmit or print © 2008 Oracle Corporation – Proprietary and Confidential

11. Disbursement Process Multiple Processes Behind the Scenes • Selecting invoices to be paid • Still occurs in Payables – selection based on business reasons for payment like due date, discounts available, etc. • Building invoices into payments • Payments groups invoices within selection batches into payments according to configurable attributes – like due date, or payment reason • Building payments into payment instructions (files) • Takes payments from the pool of built payments (regardless of which Payment Process Request they came from) and aggregates them into payment instructions • Formatting the file • Automatically kicked off at the completion of the payment instruction creation process • Printing or transmission © 2008 Oracle Corporation – Proprietary and Confidential

12. Payment Process Request (PPR) New Payment Run Submission Template Use Template Payment Method Legal Entities Payment Currencies Operating Units © 2008 Oracle Corporation – Proprietary and Confidential

13. Enhanced Check Printing Process • Check printing process changes • Error recovery improved (reprinting from UI) • Recording print results • Enhanced check stock setup in Oracle Cash Management aids printing in Oracle Payments • Support for both preprinted and blank stock (laser checks) © 2008 Oracle Corporation – Proprietary and Confidential

14. Disbursement Configuration Options Enhanced Payment Method • User-extensible • Combination of validations and usage rules enables exception-based straight-through processing • Configurable usage rules • Based on operating unit, first party legal entity, transaction type, and cross-border attributes (foreign or domestic currency or payee) • Configurable defaulting rules • Expanded options from 11i • Create efficient end-user experience © 2008 Oracle Corporation – Proprietary and Confidential

15. Disbursement Configuration Options Payment Method Extensibility Example Payment Method Code ELEC_US ELEC_FR Payment Method Name Electronic Electronic Usage Rule US OU only French OU only Validations 1) Must have supplier bank account 1) Must have supplier bank account 2) Must have payment reason code • US and France users each see Electronic payment method but validations are different © 2008 Oracle Corporation – Proprietary and Confidential

16. Disbursement Configuration Options Understanding validations • What is validated? • Invoices • Payments • Payment Instructions • When is it validated? • Upstream: during invoice validation so Payables Clerk sees it • Downstream: during payment build and/or payment instruction creation, as appropriate • Where are the validations? • Set up on payment method or format © 2008 Oracle Corporation – Proprietary and Confidential

17. Disbursement Configuration Options Payment Process Profile (PPP) • Payment process profiles control processing • Tie other setup together (payment method, format, payment system, etc.) • Control creation of payments and payment instructions • Specify formatting, printing, and transmission behavior • Control usage • Automate report generation © 2008 Oracle Corporation – Proprietary and Confidential

18. Deriving the Payment Process Profile Every Payment Needs a PPP • For each invoice that is passed to Payments to be paid, the system will determine which PPP is appropriate: 1. From the originating PPR (entered by a Payables user or defaulted from a template). 2. Derived from invoice attributes: payment method, disbursement bank account, OU, currency (must be exactly one meeting the conditions). 3. Custom code (Payments provides a hook) 4. Manually entered by user. © 2008 Oracle Corporation – Proprietary and Confidential

19. Disbursement Configuration Options Tying it all together – PM and PPP in the process • Payment method (PM) drives upstream validations and which payment process profile is used • Payment process profile (PPP) gives system direction throughout the payment process PM defaults or is entered PPP defaults or is entered Validations from format Validations from format Separate remittance advices Printer Format Positive Pay File transmitted or printed Payment file formatted Auxiliary reporting Invoices built into payments Payments built into payment file(s) Invoice entered and validated Invoices selected for payment Central bank reporting Payment creation rules Validations Bank instructions Transmission details Bank (payment system) Payment file creation rules Payment Instruction Register © 2008 Oracle Corporation – Proprietary and Confidential

20. Oracle Payments Disbursements Benefits ? Configurable setup improve efficiency ? Simplify user procedures ? Improve straight-through processing ? Lower cost of payment processing © 2008 Oracle Corporation – Proprietary and Confidential

21. <Insert Picture Here> Funds Capture © 2008 Oracle Corporation – Proprietary and Confidential

22. Funds Capture Process Request Request Authorization Settlement Settlement Acknowledgement Acknowledgement • Routing rules drive how the transaction will be processed and which third party payment system will be used • Payments automatically queries payment system for acknowledgement of transaction success • Upstream products call Payments to authorize transaction with third party payment system • Payments calls payment system in individual or batch mode to request settlement © 2008 Oracle Corporation – Proprietary and Confidential

23. Funds Capture Configuration Options Funds Capture Process Profile • Controls transaction lifecycle in funds capture process flow • Rules manage various processes • Authorization and validation • Aggregation of settlements into batches • Format and transmission © 2008 Oracle Corporation – Proprietary and Confidential

24. Funds Capture Configuration Options Validations Upstream Product Oracle Payments Downstream Validation Upstream Validation Shopping Cart Checkout Order Booking Authorization … Receipt Remittance Settlement © 2008 Oracle Corporation – Proprietary and Confidential

25. Funds Capture Configuration Options Payee (Merchant) Change from 11i: Selection of Payee used to be in calling products © 2008 Oracle Corporation – Proprietary and Confidential

26. Funds Capture Configuration Options Routing Rules Change from 11i: Routing rules used to determine only Payment System Account © 2008 Oracle Corporation – Proprietary and Confidential

27. Oracle Payments Funds Capture Benefits ? All setup done via setup screens ? Easier implementation and maintenance ? Consistent and seamless processing ? Lower cost of payment © 2008 Oracle Corporation – Proprietary and Confidential

28. <Insert Picture Here> Cross-Function © 2008 Oracle Corporation – Proprietary and Confidential

29. Oracle Payments Dashboards • Accounts Payable Manager • Manage individual payment batches • Payments Administrator • Manage payment process across selection batches Funds Disbursement Process Home Payables Payment Dashboard Dashboards Funds Captures Process Home • Payments Administrator • Monitor settlement batch status © 2008 Oracle Corporation – Proprietary and Confidential

30. Dashboard Example Tab structure enables detailed research <Enter slide note> Processes that require user intervention © 2008 Oracle Corporation – Proprietary and Confidential

31. Bank Account Structure and Setup Changes • Internal bank accounts are centralized in Cash Management • Legal entities own bank accounts – think Taxpayer ID Number • External bank accounts (supplier and customer) are centralized in Payments • Centralization gives a single point of control for encryption and masking © 2008 Oracle Corporation – Proprietary and Confidential

32. Secure Payment Data Repository Oracle Applications Payment Data Repository in Oracle Payments • Encrypted Customer Bank Accounts, Credit Cards, Debit Cards • Encrypted Supplier Bank Accounts Masked values ************124 Applications Applications Applications © 2008 Oracle Corporation – Proprietary and Confidential

33. Advanced Formatting Framework XML Publisher offers significant benefits for formatting XML Publisher Data Sources Output Formats Destination Publishing Engine • Email • Printer • Fax • FTP • AS/2 PDF RTF HTML XML EDI XML Disbursements Credit Card Payments Templates Direct Debits Remittance Advice Remittances Checks Fund Transfers EFT Payments Business User Payment Reports Credit Card Auths © 2008 Oracle Corporation – Proprietary and Confidential

34. Advanced Formatting Framework eText for Electronic Formats © 2008 Oracle Corporation – Proprietary and Confidential

35. Electronic Transmission Capability • Seamless electronic processing from invoice entry to transmission to bank • Transmission protocol defines transmission parameters: • Out of the box: FTP, secure FTP, HTTP, HTTPs, AS2 • Transmission configurations give implementation- specific values to the parameters in the protocol • Transmission configurations are associated with the Payment System Account (the entity representing the relationship with the bank or payment processor) © 2008 Oracle Corporation – Proprietary and Confidential

36. Multi-Org Access Control Uptake All UI respects Security Profile • For Disbursements • Multi-OU Payments = NO • Multi-OU PPRs = YES • Multi-OU Payment Files = YES • For Funds Capture • Multi-OU Settlement Batch = YES • Multi-OU Authorization/Settlement = NO © 2008 Oracle Corporation – Proprietary and Confidential

37. What About Subledger Accounting? • Payment transactions pushed back to Payables and Receivables • Payables and Receivables do the accounting • Payments SLA uptake = NO (because there is no accounting in Payments) © 2008 Oracle Corporation – Proprietary and Confidential

38. Oracle Payments Cross-Function Benefits ? Visibility and control ? Sensitive information secured ? Easy creation or update of payment formats © 2008 Oracle Corporation – Proprietary and Confidential

39. <Insert Picture Here> Upgrade © 2008 Oracle Corporation – Proprietary and Confidential

40. Prior to the upgrade • Review the Best Practices (Metalink Note 580299.1) • Review the R12 Upgrade: Functional Upgrade Impacts Document for Oracle Payments (FINANCIALS) (Metalink Note 734012.1 ) • Schedule time for training end users • Set all check stocks to point to Oracle supplied formats • Have somebody versed in BI Publisher • Plan time to evaluate all custom check and electronic payment formats © 2008 Oracle Corporation – Proprietary and Confidential

41. Configuration • Setup and defaulting • EFT process changed • Do not use stocks • No supplied formats for signature printer cartridges • Remittance advice delivery © 2008 Oracle Corporation – Proprietary and Confidential

42. What if there are problems? • Stay up to date on critical patches (Metalink Note 557869.1) • The Oracle eBusiness Suite Diagnostics (Metalink Note 167000.1) • Profile options: ‘FND: Diagnostics’ & ‘FND: Debug’ • About this page -> Bug Report • Tracing © 2008 Oracle Corporation – Proprietary and Confidential

43. Oracle E-Business Suite Release 12 Resources • Release 12 documentation via Oracle MetaLink (Note 394692.1) • Upgrade process and tools required • Number and types of tasks involved • How your system and products will look in Release 12 • Best Practices for Adopting Oracle E-Business Suite, Release 12 (Note 580299.1) • Release Update Packs 12.0.6 for Financials Available (Note 742890.1) • Five Key Resources for Upgrading to E-Business Suite Release 12 • Oracle E-Business Suite Upgrade Resources Roadmap (Note 461705.1) • Oracle Applications Upgrade Guide: Release 11i to Release 12 • Oracle Maintenance Wizard (Note 215527.1) • Release 12 Install/Upgrade (OTN - Oracle Technology Network) Forum • Best Practices for Securing E-Business Suite Release 12 (Note 403537.1) © 2008 Oracle Corporation – Proprietary and Confidential 43

44. <Insert Picture Here> Single European Payments Area © 2008 Oracle Corporation – Proprietary and Confidential

45. SEPA Impact and Benefits After SEPA Before SEPA • Common standards and procedures • National and local solutions with different schemes, formats • Removal of disparities in cross border payments • Different country implementations • Minimum execution time • Higher processing/ execution time © 2008 Oracle Corporation – Proprietary and Confidential

46. SEPA Scope • The single currency - Euro • A single set of Euro payment instruments • Credit Transfers • Direct Debits • Credit and Debit card payments • Common standards and business practices • Efficient processing infrastructure for Euro payments • One harmonized legal basis © 2008 Oracle Corporation – Proprietary and Confidential

47. SEPA Release dates for 11.5.10 and 12 Customer Credit Transfer Initiation (pain.001.001.02) Customer Direct Debit Initiation (pain.008.001.01) (Planned) Releases EBS 11.5.10 September, 2008 (Released) Calendar year 2009 EBS 12 (from RUP 4) November, 2008 (Released) Calendar year 2009 © 2008 Oracle Corporation – Proprietary and Confidential

48. SEPA Release Information 12.0.4 and beyond • Please apply patch no. 7552541 • Transfer Of Information session for SEPA release 12 • Note 403349.1 • Chose the following path after login to Oracle University • E-Business Suite > Financials > Oracle Financials > Payments • Documentation • Oracle Payments Note 748434.1 • Oracle Cash Management Note 564995.1 © 2008 Oracle Corporation – Proprietary and Confidential

49. <Insert Picture Here> Summary © 2008 Oracle Corporation – Proprietary and Confidential

50. Summary Disbursements Implementation • Know thy payment method • Know thy payment process profile • Know thy payment formats and validations …and you will be rewarded with seamless straight-through processing © 2008 Oracle Corporation – Proprietary and Confidential