Procure to Pay Life Cycle Overview

Prepared by:- Senthil Kumar Kaliyamurthy

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Objectives
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

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Overview of Application Integration

The following Applications Integrated Purchasing Payables Assets General Ledger Inventory Order Management

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Purchasing
Purchasing captures accounting information on requisitions and purchase orders. Purchase orders are sent to suppliers who respond by delivering goods or services and sending invoices that are processed in Payables. During the accounting period, accruals for goods set to accrue a liability on receipt are sent to General Ledger. At the end of the accounting period, accruals for goods and services set to accrue a liability at period end can be sent to General Ledger. Any suppliers set up in Purchasing are shared with Payables and vice versa. Payables Supplier invoices are entered into Payables and if appropriate, matched to purchase orders in Purchasing. During the matching process, the invoice distribution is copied from the purchase order (in the case of an expense) or the appropriate liability account (in the case of an inventory item). Payables, expenses and payments are interfaced to General Ledger. Invoices for asset purchases can be interfaced to Assets.

Assets
Assets from Payables and other sources are maintained in Assets. Assets are added, processed, depreciated and eventually retired. At the end of each asset period, accounting information is interfaced directly to General Ledger.

General Ledger
General Ledger receives accounting information from many Oracle applications. Once accounting information is imported, journals can be posted and account balances updated. When implementing Oracle Applications, creating a set of books consisting of an accounting calendar, currency and chart of accounts is one of the first steps that must be completed before setting up other applications.

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Inventory
Order Management and Purchasing as well as other Oracle applications can use items defined in Inventory. If the item is designated as a planned item, demand can be generated in the form of requisitions and sent to Purchasing where purchase orders or blanket releases can be created to replenish inventory levels

Order Management
Customer purchase orders can be recorded in Order Management. Goods are shipped to customers as defined by the sales order. After goods are shipped, customer invoices are sent to Receivables and inventory levels are updated. Any customers that are set up in Order Management are shared with Receivables and vice versa. `

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Procure to Pay Lifecycle

Requisitions Catalog Content Purchase Orders Ordering

RFQs/ Quotations

Receiving
Sourcing Analysis Invoice/ Payment

Supplier management Supplier Performance

Reporting

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Demand

Source

Purchase requisition

Request for quote (RFQ)

Supplier

Quotation

Receive Order

Inventory

Invoice

Payment

Purchase order

Receipts

Inventory

Invoice

Payment

Transfer to General Ledger

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Requisition represent the demand for goods or service

Request for Quotation (RFQ) feature handle your sourcing needs Create an RFQ from Requisition, match the supplier Quotation your RFQ and automatically copy the quotation Information to Purchase Order Creating Purchase Order Method of Purchase Order Types of Purchase Order Manual Creation 1. Standard Purchase Order Search approved requisition and them to PO 2. Planned Purchase Order 3. Blanket Purchase Agreement 4. Contract Purchase Agreement Receipt of the material Creating the Invoice Match the Invoice with PO Approve and validate the Invoice Pay the Invoice

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Standard Po:
Generally Create the Standard Purchase Order for One Time Purchase Of Various items.

Blanket Purchase Agreement:

Create the Blanket Purchase Agreement when you know the details of The goods or services you plan to buy from the specific supplier in a Period, but you do not know the details of your delivery schedule.

Planned PO
Create the Planned Purchase Order is a long-term agreement committing To buy the item or service from the single source. Must specify the Tentative delivery schedule and details of goods.

Contract Purchase Agreement

Create the Contract Purchase Agreement with your supplier to agree on Specify terms and conditions without indicating the goods and service That you will be purchasing.

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Receipt of Material:
Using Purchasing, you can process receipt from supplier.
Using Purchasing you can receipts from other warehouse or Inventory Organization, In-transit shipments and receipt due the customer returns.

PURCHASHING USING THE FOLLOWING ROUTING CONTROL FOR RECEIPT OF THE MATERIAL.
TWO WAY --- FROM GATE TO DIRECT SUB-INVENTORY. THREE WAY --- FROM GATE TO RECEIVINGAREA TO SUB INVENTORY FOUR WAY FROM GATE TO RECEIVING AREA TO INSPECTION AREA TO SUB- INVENTORY.

MATCHING METHODS:TWO WAY MATCHING --- PO QTY WITH INVOICE QTY PO AMOUNT WITH INVOICE AMOUNT THREE WAY MATCHING --- PO QTY AND RECEIVED QTY WITH INVOICE QTY FOUR WAY MATCHING INVOICE QTY --- PO QTY, RECEIVED QTY, INSPECTED QTY WITH

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INVOICE:Once youve received the goods or service from the supplier, youll also receive an invoice. Using Oracle Payables you can record invoice in a number of different ways . With Payable you can: 1. Import / Enter invoice manually, either individually or in batches.

2.
3. 4. 5. 6. 7. 8. 9.

Match the Invoice with Purchase Order.

Schedule the payment. Approve the Invoice Validate the Invoice Create accounting Entries Pay the Invoice as per schedule. Transfer the Accounting entries to GL. Payments are integrated with Cash Management.

10. Reconcile the payment with bank statement.

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Create an Requisition (N) Requisition Requisition.

Base Table: PO_REQUISITIONS_HEADERS_ALL (requisition_header_id) Stored all Requisition header information.

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Base Table: PO_REQUISITIONS_LINES_ALL (requisition_lines_id) Stored in requisition Lines Information.

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Query the Requisition from Requisition Summary Window

(N)Requisition Requisition Summary.

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Create an Requisition For Quote.

(N) RFQs and Quotation RFQs

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(N) RFQs and Qu`otation RFQs (B) Currency

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(N) RFQs and Quotation RFQs

(B) Terms

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(N) RFQs and Quotation RFQs

(B) Price Breaks

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(N) RFQs and Quotation RFQs (T) More

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(N) RFQs and Quotation RFQs (T) Supplier

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Create an Quotation.
(N) RFQs and Quotation Quotation.

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Create an Purchase Order. (N) Purchase Order Purchase Order

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(N) Purchase Order Purchase Order (B) Catalog

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(B) Currency

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(B) Terms and Condition

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(B) Shipments (T) Shipments

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(T) More

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(T) Status

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(B) Receiving Controls

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(T) Distributions

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Approve the Purchase Order

(B) Approve

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Status of the Purchase Order is Approved

Base Tables:- PO_HEADER_ALL (po_header_id) PO_LINES_ALL (po_lines_id) PO_DISTRIBUTION_ALL(po_distribution_id)

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Receiving the Material (N) Receiving Receipt Choose Your Inventory Organization

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Enter Your Purchase Order and item

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Choose the New Receipt and Save your work

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Responsibility: Inventory, Vision Operation: (N) On-hand, Availability On-hand Quantity Choose your Inventory Organization

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Give your Item in Item field

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Check your On- hand Quantity Is Increased

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Responsibility: Payables, Vision operations (USA)

(N) Invoice Entry Invoice Select Po Default Invoice Type

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Match the Invoice in PO. (N) Invoice Entry Invoice (B) Match

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Enable the Match Check Box (B) Distribute the Po Lines in the Invoice Line

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(N) Invoice Entry Invoice (B) Action Select the Validate Validation of Invoice

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Accounting Entries (M) Tool View Accounting

Base Tables: AP_INVOICE_ALL AP_DISTRIBUTION_ALL

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Payment to Invoice (N) Invoice Entry Invoice

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Payment to the Invoice

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(N) Invoice Entry Invoice

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Account the Payment

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Base Tables: AP_CHECK_ALL

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PAYMENT ACCOUNTING ENTRIES

(M) Tools View Accounting

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Payables Transfer to General Ledger Run the Request: Payables Transfers to General Leder

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Payables Transfer to GL Report

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Journal Import Execution Report

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Responsibilities: General Ledger, Vision Super user (N) Journal Enter Review the Journal Batch

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Review the Journal Batch

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Post the Journal Batch

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Review the Posted Journals

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Base Tables: GL_JE_HEADERS GL_JE_LINES GL_JE_BATCHES

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Responsibility: Cash Management, Vision Operation (USA) (N) Bank Statement Manual Clearing Clear Transations
Manual Clearing for Payment

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