Procure to pay ppt

PROCURE TO PAY

Procure to Pay

Procurement

1. DETERMINATIONOF REQUIREMENTS

2. SOURCE DETERMINATION

4. POPROCESSING

6. GOODSRECEIPT

8. INVOICEVERIFICATION

9. PAYMENT

5. ORDERMONITORING

3. VENDOR SELECTION

Accounts Payable Originates from the Purchase-to-Pay Cycle

Purchase Req

Purchase Order

Goods Receipt

Invoice Verification

Accounts Payable

Payment

Based on specific request or MRP run

Released to suppliers

Dr. Inventory/Asset XX Cr. GR-IR Clearing Account XX

Dr. GRIR Clearing Account XX Cr. Accounts Payable-Vendor XX

Payment Run

Dr. Accounts Payable-Vendor XX Cr. Cash In Bank XX

Determination of Requirements

Creation of Purchase Requisition (Manual or MRP)

History of changes in Purchase Requisition (Change Log) item

Purchase Requisition status

Release (Approval) Strategy

Request for Quotation (RFQ)

Reference technique in RFQ creation

Price comparison of the quotations

Source Determination and Vendor Selection

Purchase Order Processing and Monitoring

Reference technique in PO creation

Pricing Condition History of changes in Purchase Order

(Change Log) header/item Purchase Order status

Release (Approval) Strategy

Tolerance limit set-up

Goods Receipt with reference to PO

Material document and Accounting document creation after posting

Resulting to: Inventory update Update of G/L accounts Updates in the Purchase Order Update in Material cost (Moving

Average Price)

Goods Receipt

SAP Three-Step Verification

Logistics Invoice Verification

Creates Accounting Document for referencing

Provides 3-way matching (Purchase Order against Goods Receipt and the Vendor Invoice)

It allows credit memos to be processed, either as invoice reversals or return deliveries.

Payments (A/P)

Dual control of master record Simultaneous updating of subsidiary ledger and

general ledger (minimize reconciliation activities) Instant access to details of account balances per

Vendor Drill down facility down to the original document Full audit trail Manual or automatic processing of payment

transactions Check information on payment transactions

Logistics Invoice Verification

Creates Accounting Document for referencing

Provides 3-way matching (Purchase Order against Goods Receipt and the Vendor Invoice)

It allows credit memos to be processed, either as invoice reversals or return deliveries.

•Released •invoice

•1000 •Payment•program

•Payment•program

•Bank

•1000

•Vendor

•Vendor •invoice •?

•Purchase•Order

•10

•20

•30•Invoice

•verification

•Invoice •verification

•Blocked•invoice

PaymentsPayments

Back to Procurement Process

Payments (A/P)

Dual control of master record Simultaneous updating of subsidiary ledger and

general ledger (minimize reconciliation activities) Instant access to details of account balances per

Vendor Drill down facility down to the original document Full audit trail Manual or automatic processing of payment

transactions Check information on payment transactions