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Procure to Pay Cycle

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In this article, we will see the steps involved in Procure to Pay Cycle. Here is the diagrammatic representation:

1) Create 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.


Purchasing Vision Operations (USA) > Requisitions > Requisitions

Choose the requisition type and enter the Item, quantity, Price details in the Lines tab.

In Source Details tab, specify the Buyer name.

Enter the Charge Account.Click the Distributions button. .

The status will now be updated to ―In Process‖ .The workflow then will send an Approval notification to the concerned person (derived based on hierarchy used—Position or Supervisor hierarchy) using which he can Approve or Reject the requisition. The status of the requisition will now be ―Incomplete‖. .Save the work. The requisition needs to be approved first before proceeding further by the concerned authority. And now the Approve button is highlighted. Submit this requisition for Approval by clicking on the Approve button.

At any time the status of requisition can be checked using the Requisition summary window. . Navigation: Requisitions > Requisition Summary Enter requisition number and click on the find button.

We can also check the Action History of requisition (it will show details about who has submitted. Underlying Tables: . approved and cancelled the requisitions) as below: Navigation: Tools menu > Action History.

quantities. 4. Standard PO: A Standard PO is created for one–time purchase of various items 2. and estimated cost.PO_REQUISITION_HEADERS_ALL PO_REQUISITION_LINES_ALL PO_REQ_DISTRIBUTIONS_ALL 2) Create Purchase Order: There are 4 types of Purchase Orders: 1. Planned PO: A Planned PO is a long–term agreement committing to buy items or services from a single source. 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. 3. 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 Navigation for creating a standard PO: Purchase Orders > Purchase Orders . You must specify tentative delivery schedules and all details for goods or services that you want to buy. including charge account. but you do not know the detail of your delivery schedules.

line type. . Click Terms to enter terms. Buyer. Enter the Supplier. quantity. Item.Choose type as Standard Purchase Order. Purchasing creates distributions depending on the default information available. conditions. and control information for purchase orders. ship–to organization and location. In the Lines tab. specify the line number. and country of origin for the items. and quotations. Click Currency button to enter and change currency information for purchase orders. price etc. RFQs. Click Shipments button to enter multiple shipments for standard and planned purchase order lines Purchase order shipment specifies the quantity. When you save. date you want your supplier to deliver the items on a purchase order line.

and invoice quantities must match within tolerance before the corresponding invoice can be paid. Invoice Close Tolerance percent to set the receiving and invoice close point. . receipt.  Select one of the following options for Match Approval Level: Two–Way: Purchase order and invoice quantities must match within tolerance before the corresponding invoice can be paid.To enter more shipment information. Three–Way: Purchase order. select the More tab.  Enter the Receipt Close Tolerance percent.

Four–Way: Purchase order. Click the Receiving Controls button to enter receiving control information for purchase orders. receipt. accepted. . Save the work. .  Select an Invoice Match Option: Purchase Order: Payables must match the invoice to the purchase order. Receipt: Payables must match the invoice to the receipt.Enter the maximum acceptable number of Days Early and Days Late for receipts. and invoice quantities must match within tolerance before the corresponding invoice can be paid.

. . .. Inspection Required. .Enter the Action for receipt date control.Enter the default Receipt Routing that you assign goods: Direct Delivery. .Enter the maximum acceptable over–receipt Tolerance percent (receipts that exceed the quantity received tolerance). or Standard Receipt.Select Allow Substitute Receipts to indicate that receivers can receive substitute items in place of ordered items. Save the work.Enter the Enforce Ship To location option to determine whether the receiving location must be the same as the ship–to location.Enter the Action for Overreceipt Quantity. .

Select more tab to enter more details and the requisition number (optional). Save the work. .Click Distributions button to enter distributions for the shipments.

Click on the Approve button to initiate the Approval process. .

Underlying Tables: PO_HEADERS_ALL PO_LINES_ALL PO_DISTRIBUTIONS_ALL (REQ_HEADER_REFERENCE_NUM in Distributions table is the Requisition number for this PO) 3)Create Receipt: Create a receipt to receive the items in the Purchase Order. .

check the lines you want to receive in the PO. Go to Lines.Navigation: ReceivingReceipts Enter the PO Number and select find button. .

Click on Header button and Save which creates the receipt. .

.Receipt Tables are: RCV_SHIPMENT_HEADERS RCV_SHIPMENT_LINES (Lines Table has PO_HEADER_ID) 4)Create Invoice in Payables: Once the goods are received. it’s time to pay the vendor for the goods purchased and hence the invoices are created.

Vision Operations (USA) > InvoicesEntryInvoices Enter type — Standard. Click the Match button to match to either Purchase Order or Receipt (depending on the Invoice Match option specified on the PO) and avoid manually entering the invoice. Enter the PO Number you want match to and click Find.Navigation: Payables. . supplier information and amount.

.Select the lines required and click on Match button.

. Validating the Invoice: Click on Actions Button and Select ―Validate‖. Click on OK button. it has to be Validated and Accounted before you can pay it.Click on Distribute button to navigate to the Match to Purchase Order Distributions window. This creates the invoice and you can see the status of the invoice as ―Never Validated‖.

Now you can see the status of the invoice as ―Validated‖. if there are no issues during validation. Create Accounting Entries: .

.Click on Actions Button and Select ―Create Accouting‖. Click on OK button. Now we can see the Accounted status as ―Yes‖.

You can see the Accounting Entries here: Tools View Accounting Invoice Tables: AP_INVOICES_ALL AP_INVOICE_DISTRIBUTIONS_ALL .

Select ―Pay in full‖ and click ―OK‖. You would see Amount paid as 0.Accounting Entries Tables: AP_ACCOUNTING_EVENTS_ALL AP_AE_HEADERS_ALL AP_AE_LINES_ALL 5)Making a Payment: Go to the Invoice window and query the invoice you want to pay. Click Actions button.00 before you make a payment. .

Save the Work.Select the Bank Account and Document. .

Click Actions and select ―Create Accounting‖ . you will the Amount Paid as $4.Now that the payment is made. when you query for the invoice in Invoice window. Create Accounting entries for payment.000.00.

Tools menuView Accounting . View Accounting Entries: In the Payments window. query for the payment.Select the void checkbox to cancel the payment.


Refer to the article ―Make AP Payments through Payment Batches‖ 6)Transfer to General Ledger: Navigation: Payables Responsibility > View Requests Run the concurrent program ―Payables Transfer to General Ledger‖ with the required parameters.You can also pay the invoices using Payment Batch screen. ++++++++++++++++++ .