Third party payment is that payment which a company makes to an external partner on behalf of its supplier. In normal cases only supplier is paid directly but if the supplier wants any specific party to be paid from the company itself, Fusion Financial Payable module helps in this too. Here the user will assign the third party to get payment on supplier’s behalf. Company gets the freedom in this module to define the reason of any such third party payment. For example a supplier becomes bankrupt and he is supposed to make payment to someone; in this case one request can be filed that all payments should be made directly to the third party. Another case could be where supplier has cash flow problem and request the company to make the payment.
Oracle Fusion Financial offers this feature at user level. It can be done from a central location for all the business units. There are certain terminologies used in this module which are very important to understand.
- The supplier is said to be the Invoice Supplier in the system.
- Invoice Supplier Site is the Suppliers site.
- Remit-to Supplier is the third party who receives the payment
- Remit-to address is the supplier’s site and it will be referred as third party.
- There will be an agreement signed between all the parties for the payment; participating units will the supplier, the third party and buying organization.
- The supplier issues a purchase invoice to the buying organization with remit -to details and third party.
- The buying organization makes a payment to the third party
Oracle Fusion Financial is infused this new feature to meet the diverse requirement of the businesses. With this facility the user gets more freedom of handling their purchase, invoice handling and payments. Relationship with the supplier also becomes healthy and strong as a result.