P2P Cycle

Presentation by :

Sreekanth Reddy M

P2P Cycle

Procure to Pay Lifecycle Overview

After completing this module you should be able to do the following:

• Describe the procure to pay process flow• Describe the key areas in the procure to

pay process• Describe how the procure to pay process fits into the Oracle

eBusiness suite of applications

Objectives :

Procure to Pay Lifecycle :

The steps involved in Procure to Pay Cycle :

Oracle Modules Involved in P2P Cycle :

S. No Step Defined At Module

1 Define items Inventory

2 Enter item information Purchase Order

3 Raise requisition Purchase Order

4 Request For Quotation(RFQ) raised Purchase Order

5 Quotation received Purchase Order

6 Quote analysis Purchase Order

7 Raise purchase order Purchase Order

8 Receive materials Inventory

9 Enter invoice Accounts payable

10 Payment process Accounts payable

11 Transfer to general ledger General ledger

Requisition:

• Requisition is nothing but a formal request to buy something (like Inventory material, office supplies etc) needed for the enterprise. Only an employee can create one.

There are two types of requisitions:

• Internal Requisition: Internal requisitions provide the mechanism for requesting and transferring material from one inventory to other inventory.

• Purchase requisition: Unlike Internal requisitions, Purchase requisitions are used for requesting material from suppliers.

Create Requisition:

Approve Requisition:

Types of RFQ :

• Catalog: Used for items that will be ordered regularly• Standard: Used for one off items or items that are ordered

infrequently• Bid : used to source a specific quantity of an item to be

delivered at a certain site on a certain date.

RFQ Status :• In Process: Being created• Active: Ready to print• Printed : At least one copy• Closed : When you change the status to closed, the system will

delete all follow-up notifications. Change the RFQ to this status when you do not want any more responses to the RFQ.

Purchase Order:

There are 4 types of Purchase Orders:

• Standard PO: A Standard PO is created for one–time purchase of various items.

• Planned PO: A Planned PO is a long–term agreement committing to buy items or services from a single source. You must specify tentative delivery schedules and all details for goods or services that you want to buy, including charge account, quantities, and estimated cost.

• Blanket agreement: A Blanket PO is created when you know the detail of the goods or services you plan to buy from a specific supplier in a period, but you do not know the detail of your delivery schedules.

• Contract agreement: Contract purchase agreements are created with your suppliers to agree on specific terms and conditions without indicating the goods and services that you will be purchasing.

Create Purchase Order :

Types of Match Approval Level :

• Two–Way: Purchase order and invoice quantities must match within tolerance before the corresponding invoice can be paid.

• Three–Way: Purchase order, receipt, and invoice quantities must match within tolerance before the corresponding invoice can be paid.

• Four–Way: Purchase order, receipt, accepted, and invoice quantities must match within tolerance before the corresponding invoice can be paid.

If you enter an item, the default value for this field comes from the item information at the organization level. If not defined there, the default comes from the item information at the master level. If you do not enter an item, the default is from your Purchasing Options.

Invoice Match Option:

• Purchase Order: Payables must match the invoice to the purchase order.

• Receipt: Payables must match the invoice to the receipt.

Choose Receipt if you want to update exchange rate information on the receipt or if you want your accounting to use exchange rate information based on the receipt date. (If you use PeriodicCosting, you must match to the receipt to ensure accurate cost accounting.)The Invoice Match Option defaults from the Supplier Sites window. You can change the Invoice Match Option on the shipment until you receive against the shipment.

Note: The Invoice Match Option and the Match Approval Level are independent options. You can perform whichever Invoice Match Option you want regardless of the Match Approval Level.

Approve Purchase Order :

Transmit PO to Supplier :

Receipts:

Invoicing :

Payment :

Invoice Payment – Overview :

Using the Payment Workbench :

Payment Methods :

Summary :

You should be able to do the following:• Describe the procure to pay process flow• Describe the key areas in the procure to

pay process• Describe how the procure to pay process fits into the Oracle

eBusiness suite of applications