Bp-080 Future Process Model-Purchasing v1

AIM
BP.080 FUTURE PROCESS MODEL

Purchasing
Author:
Ms. Yasha Asthana
Last Updated:
24 December, 2009
Document Ref:
/R12/BP.80/PO
Version:
1.0
Approvals:
Approver 1
Approver 2
BP.080 Future Process Model
Doc Ref: /R12/BP.80/PO
Document Control
Change Record
4
Date
24-Dec-09
Author
Yasha Asthana
Version
Draft
1.0
Change Reference
Initial Baseline
Reviewers
Name
Position
Shashank Muley
Gaurav Mathur
Senior Consultant
Project Manager
Distribution
Copy No.
Name
Location
1
2
3
4
Note To Holders:
If you receive an electronic copy of this document and print it out, please write your name
on the equivalent of the cover page, for document control purposes.
If you receive a hard copy of this document, please write your name on the front cover,
for document control purposes.
Purchasing
File Ref: 323116176.doc
Document Control
iii
Contents
Document Control
1.
2.
Acronyms and abbreviations

1
Envisioned business processes for Purchasing
Base Transaction
3.1
3.2
3.3
3.4
3.5
ii
Process Overview: Create New Supplier

3
Process Map: Create New Supplier 4
Process Overview: Approved Supplier List (ASL)
5
Process Overview: Blanket Purchase Agreement & Release Creation
5
Process Map: Blanket Purchase Agreement & Release Creation
7
Requisition to Purchase Order

4.1
4.2
4.3
4.4
4.5
4.6
4.7
4.8
17
Process Overview: Receipt of Material against PO

17
Process Map: Receipt of Material with Inspection against PO
Process Overview Apply BOE to Receipt
20
Process Map Apply BOE to Receipt
21
Purchase Order Maintenance

6.1
6.2
6.3
6.4
8.1
8.2
Appendices
26
28
29
30
Process Overview: View Accounting

Accounting Entry Overview
31
30
33
Appendix A Approval Hierarchy
Purchasing
26
27
28
Process Overview: Claiming VAT

Process Map: Claiming VAT
Accounting Entries
9.1
9.2
24
Process Overview: Return of Rejected Material to Supplier

Process Overview: Return of Rejected Material to supplier
Value Added Tax
19
22
Process Overview: PO Amendment 22

Process Map: PO Amendment
23
Process Overview: Purchase Order Cancellation
Process Map: Purchase Order Cancellation 25
Return to Supplier
7.1
7.2
Process Overview Requisition to PO (Unplanned Items)

8
Process Map: Requisition to PO (Unplanned Items)
10
Process Overview: Auto Requisition to PO (Min-Max Planned Items) 11
Process Map: Auto Requisition to PO (Min-Max Planned Items)
12
Process Overview: Auto Requisition to PO (MRP Planned Items)
13
Process Map: Auto Requisition to PO (MRP Planned Items)
14
Process Overview: Direct Purchase Order
15
Process Map: Direct Purchase Order
16
Receiving Process
5.1
5.2
5.3
5.4
33
Document Control
iii
Open and Closed Issues for this Deliverable

Open Issues
Closed Issues
Purchasing
34
34
34
Document Control
iii
Doc Ref:
1. Acronyms and abbreviations

AP
Accounts Payable
AMC
Annual Maintenance Contract
BOP
Bought Out Products
DFF
Descriptive Flex Field
ERP
FG
LP
MRP
BPA
PO
RM
RFQ
UOM
VAT
MOL
ASL
Enterprise Resource Planning

Finished Goods
List Price
Material Requirement Planning
Blanket Purchase Agreement
Purchase order
Raw Material
Request for Quotation
Unit of Measurement
Value Added Tax
Minimum Order Level
Approved Supplier List
Purchasing
34 of 34
Doc Ref:
2. Envisioned business processes for Purchasing

About this Document
This envisioned end-state document elaborates the final processes of the Purchasing functionalities of Group. The document describes each
process/scenario that has been discussed and would be followed at Group after the ERP is implemented. These processes (together with process flow,
information flow, document flow, responsibilities for carrying out each of the processes) are termed as End-State, and will be deemed as the basic input for
configuration of the ERP package. Thus it is appropriate to state that the processes as documented in the subsequent sections should be carefully reviewed by
Group and finalized so that there are no significant changes to the processes subsequently.
Scope of activities carried out include
Oracle Purchasing
Oracle Inventory
Oracle Order Management
Receivables Management
Accounts Payables
General Ledger
Oracle MRP
Oracle Bill of Materials
Oracle Work in Progress
Oracle Costing
Oracle Quality
Oracle Enterprise Asset Management
The following process maps depict the various purchasing related activities and their sequence when mapped in Oracle Applications.
Purchasing
34 of 34
Doc Ref:
Base Transaction
3.1 Process Overview: Create New Supplier
ID
Description
3.1.1
New supplier can be created centrally through the system by the purchase
department. Supplier can be classified into various categories such as Local
Supplier, Manufacturer, Distributor, Export supplier etc. Set up suppliers to record
information about individuals and companies you purchase goods and services
from. Employees should also be created as a supplier as we need to pay them for
their services. A Supplier can have multiple location & addresses. Define the header
information for the supplier such as supplier name, supplier classification, payment
terms, prepayment account, Liability account and other details.
After defining the supplier header, you need to create supplier site along with the
address details. Multiple sites can be defined for a single supplier. For example, for a
single supplier, you can buy from several different sites and send payments to
several different sites. The information such as payment terms, freight terms and
other information are defaulted from the supplier header level but option is available
to update the information at the supplier site. The contact person details such as
Contact name, phone number, fax number, email ID etc can also be entered for the
supplier sites. The information defined at the supplier site level is automatically
defaulted wherever required.
Assign the supplier site to the relevant organization
Supplier Additional Information for India Localization is mandatory to be defined for
all the supplier sites. Here, you would record the Tax Registration information such
as VAT number, CST number, PAN number, Excise number, Excise range, Excise
Division etc. Supplier TDS related details are also defined for individual supplier to
specify the TDS section applicable and the TDS rates. The information defined here
is used in various reports related to India localization. If the supplier site is a sales
tax registered site located within the state, he should give only his LST Number.
Likewise if the supplier is a sales tax registered site located out side the state LST
field should be null and only his CST details should be recorded.
After you define suppliers, you can use them when you enter invoices and create
purchasing documents
3.1.2
3.1.3
3.1.4
3.1.5
Purchasing
Notes
34 of 34
Doc Ref:
3.2 Process Map: Create New Supplier
Start
Navigate to
supplier menu to
create new
supplier. Define
Supplier Header
Information
Define Supplier
site location,
contact
information and
other relevant
information
Assign Supplier
site to
organizations as
per the
requirement
Define additional
India localization
information for all
the supplier sites
Stop
Purchasing
34 of 34
Doc Ref:
3.3 Process Overview: Approved Supplier List (ASL)

ID
Description
3.3.1
Approved supplier List is a list of items and commodities that have approved sources
from a list of suppliers. While setting up Approved Supplier Lists you can specify the
manufacturer of the product, the distributor of the product or a company that both
sells and distributes.
Select the Type of item & the item code at the ASL header
For ASL Lines specify the Business type, Supplier name, supplier site code, Supplier
status. You can define multiple approved suppliers for a single item. Optionally you
can associate your supplier item code with your internal item code.
Define additional attributes for a item supplier combination. You can associate the
blanket purchase agreement number that exists for the supplier-item combination
and the associated line number for that item. This information will be used to autocreate blanket releases for the supplier when MRP is run.
Sourcing rules and bill of distributions can also be defined for a supplier-item
combination. These rules can be utilized to auto-create purchase order from the
MRP run.
3.3.2
3.3.3
3.3.4
3.3.5
Notes
3.4 Process Overview: Blanket Purchase Agreement & Release Creation

ID
Description
3.4.1
Blanket Purchase Agreements are generally used to create open price agreements
with the supplier. Blanket agreement can be created by specifying the Item code,
item rate, payment terms, freight terms, effective dates and other terms. Item
quantity is not specified on the Blanket purchase agreements. On saving, a system
generated number is assigned automatically to the Blanket purchase Agreement.
India Localization taxes are attached to the BPA by selection the tax category
relevant for that supplier.
Blanket Purchase Agreement is then forwarded to the approver based on the
Approval hierarchy designed in the system. A notification is forwarded to the
approver which contains all the relevant details related to the Purchase order. Once
the BPA is forwarded for approval, it cannot be modified and the purchase order
status is changed to in Process.
Approver opens the Notification summary Form to view all the pending notifications
received from various sources. Approver has the option to open the notification and
verify the details available on the notification. Option is available to the approver to
Approve/Reject/Forward/Request more Information against a single notification. On
approval the Purchase order status is changed to Approve
3.4.2
3.4.3
3.4.4
Purchasing
Notes
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Doc Ref:
ID
Description
3.4.5
Once the blanket purchase agreement is approved, Blanket Releases can be created
as and when required. While creating the Blanket release, you can specify the
quantity required, need-by date and other details but you cannot change the Price and
item details at the blanket release. For any amendments other than quantity, need-by
date, you have to amend the blanket Purchase Agreement and get it approved based
on the approval hierarchy. Multiple blanket releases can be created against a single
blanket purchase agreement.
The India Localization tax details are defaulted automatically on the Blanket release
from the tax category attached at the BPA.
The Blanket release is send for approval based on the Approval Hierarchy or you can
decide to have No Approval flow for Blanket Release.
Once the blanket release is approved, it can be received. System provides detail of
amount released, Amount Invoiced at the BPA as well as the Blanket release level.
3.4.6
3.4.7
3.4.8
Purchasing
Notes
34 of 34
Doc Ref:
3.5 Process Map: Blanket Purchase Agreement & Release Creation

Blanket Purchase Agreement
Start
Create Blanket
purchase Agreement
for the Supplier
India Localization
taxes are attached to
the BPA by selecting
the relevant tax
category
Approval Notification
is forwarded to the
approval based on the
approval hierarchy
Approver opens the

Notifications to review
the PO details and
approve/Reject/Forward
Blanket Release
Receiving
Process
Purchasing
Blanket Release is
approved based on
the approval hierarchy
India Localization taxes

are automatically
defaulted from the BPA
On Approval, Blanket
release can be created
by specifying the quantity
and need-by date
34 of 34
Doc Ref:
Requisition to Purchase Order

4.1
Process Overview Requisition to PO (Unplanned Items)
ID
Description
4.1.1
Department will raise a Purchase requisition for the item along with the quantity and
need-by date. Additional details can also be captured in the respective fields
provided. Purchase Requisition will be assigned a unique number. Purchase
Requisition will be saved and send for approval. The status of the Purchase
requisition is changed to In Process
Once the Purchase requisition is saved and forwarded, a notification is send to the
approver based on the approval hierarchy designed. The notification contains all the
item-wise details for the Purchase requisition.
Approver opens the Notification screen and clicks on the approve button. Approver
has options to approve, reject & forward the requisition as per the requirement. On
approval the Notification disappears from the notification screen and the Purchase
Requisition status is automatically changed to Approved.
Once the Purchase Requisition is approved, Purchase department has the option to
create a Request for Quotation (RFQ) for the requested items and send it across to a
list of suppliers. Option is available to make various list of suppliers to save time &
effort. You can also specify the last effective date for your RFQ. Purchase
department has the option to create the RFQ directly without referring the Purchase
requisition.
RFQ is printed and can be send across to the suppliers through courier or mail.
Quotations are received from various suppliers. On receiving the quotations,
purchase department has the option to auto-create the Quotation by referring the
RFQ number. The quantity, price, payment term, shipment method, taxes applicable
and other terms can be entered in the Quotation form. Same process is repeated to
enter the quotation received from multiple suppliers.
After entering the quotations, the next step is to perform a Quote Analysis and select
the best quote. This process is done through the Form Quote Analysis, whereby the
system will show all the quotations in a Comparative format.
4.1.2
4.1.3
4.1.4
4.1.5
4.1.6
4.1.7
ID
Description
Purchasing
Notes
Notes
34 of 34
Doc Ref:
4.1.8
4.1.9
After Quote Comparison, the best quote is approved and the Purchase order is
awarded to the Supplier. Provision is available to auto-create purchase order from
the approved quotes. Approved quote can also be converted to a Blanket Purchase
agreement. If the Localization tax details are specified on the approved quote, then
the details can be automatically copied to the purchase orders. Option is available to
attach/modify the taxes on the purchase order. Tax categories can also be structured
to save time & effort.
The Purchase order is approved and ready to be received.
Purchasing
34 of 34
Doc Ref:
4.2
Process Map: Requisition to PO (Unplanned Items)
Start
Receiving
Process
Purchasing
Purchase Requisition
is created online
through the system
and forwarded for
approval
India Localization
taxes and other details
can be added to the
Purchase order and
approved
is approved based on
Approval Hierarchy
Purchase order is
auto-created from the
Approved Quote
RFQ is created by
referring the approved
purchase requisition
Quote Analysis is
done and the best
quote is approved
Created RFQ is send

to a list of suppliers
Quotation is created
by referring the RFQ
number. The relevant
details are entered for
all the quotations
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Doc Ref:
4.3
Process Overview: Auto Requisition to PO (Min-Max Planned Items)
ID
Description
4.3.1
For Min-Max Planning, first step is to define the item as Min-Max Planned in the
Item Master and define the Minimum and maximum levels at the item level.
Min-Max Planning report is run, which shows the item code, Item description,
Minimum Level, Maximum level, on-hand quantity and the suggested Re-stock
quantity for items falling below the Minimum Level. The output of this report can be
analyzed by the concerned person to validate the shortages suggested by the MinMax planning Report. There are other report parameters which can be used to fine
tune the shortages such as Net WIP, Include Open POs, Net Reservation etc. This
Report can be run on daily/weekly/monthly basis based on the requirements.
After validating the output of the Min-Max Planning report, the report is submitted
again with the Restock parameter as Y and the system auto-creates the purchase
requisitions for the item shortages. The Purchase Requisitions are created in
Approved status.
The Purchase Requisitions created can be viewed through the Requisition
Summary Form. Purchase department has the option to create RFQ referring the
approved purchase requisition and thereafter follow the process of creating quotequote analysis and finally create purchase order based on the approved quote.
Purchase orders can also be auto-created by selecting the requisition lines and
specifying the supplier name from the List of values. If we define the approved
suppliers for items then system recommends the supplier for that item. Other details
such as India Localization taxes, payment Terms, Freight terms, Insurance can be
amended at the Purchase order level.
Purchase order is send for approval based on the approval hierarchy
4.3.2
4.3.3
4.3.4
4.3.5
4.3.6
Purchasing
Notes
34 of 34
Doc Ref:
4.4
Process Map: Auto Requisition to PO (Min-Max Planned Items)
Start
Receiving
Process
Purchasing
Item is defined as MinMax Planned in the

Item Master and
Minimum & Maximum
level are defined
Min-Max Planning
Report is run to view
the item shortages
Report output is
validated by the
concerned department
Min-Max Planning
report is Re-run with
Restock parameter
to generate Purchase
Requisitions
Purchase Order is
approved based on
India Localization
can be added to the
Purchase and
approved
Purchase Order is
created automatically
by selection
requisition lines.
Purchase requisitions
auto-created can be
viewed through the
Requisition
Summary Form.
34 of 34
Doc Ref:
4.5
Process Overview: Auto Requisition to PO (MRP Planned Items)
ID
Description
4.5.1
For MRP Planning, first step is to define the item as MRP Planned in the Item
Master. MRP planning is run for items which are included in the Bill of material
(BOM) of finished goods and sub-assembly items. MRP is run against a demand
specified in the MDS. The demand can be automatically derived from the system
based on the firm sales order already available or it can be a forecasted demand
which can be added manually.
On running the MRP, the system will show the recommendations for item
requirements based on the factors which are selected at the time of MRP run. Some
of the factors which affect the outcome of the MRP are WIP Net, Sub-inventory
netting, open Pos etc. More details about the MRP process are covered in the ToBe Document for Manufacturing.
Option is available to release the suggested planned orders as Purchase requisitions
based on the various selection criteria from the MRP workbench.
If approved suppliers, sourcing rules & blanket purchase agreement exists for item,
then system will automatically create Blanket release. The blanket release can then
be further approved based on the approval hierarchy.
Alternatively if Blanket Agreement does not exist, Purchase orders can be autocreated by selecting the pre-approved requisitions lines and specifying the supplier
name from the List of Values.
India Localization taxes can be attached to the purchase order by selecting the tax
category structures defined in the system. Option is also available to default the tax
category structure automatically based on the Supplier selected at the time of
creating Purchase order.
4.5.2
4.5.3
4.5.4
4.5.5
Purchasing
Notes
34 of 34
Doc Ref:
4.6
Process Map: Auto Requisition to PO (MRP Planned Items)
Start
Receiving
Process
Purchasing
Item is defined as
MRP Planned in the
Item Master
MRP is run based on

the Demand stipulated
in the MDS
On MRP run,
Suggested Planned
Orders are created
Suggested Planned
Orders can be
selected based on
various criteria to auto
create purchase
Requisitions/
Purchase release
Purchase Order is
approved based on
India Localization
can be added to the
Purchase and
approved
Auto-create Purchase
Orders by selecting
the approved
Requisition lines
can be viewed using
the Requisition
Summary Form
34 of 34
Doc Ref:
4.7 Process Overview: Direct Purchase Order

ID
Description
4.7.1
Option is also available to create standard purchase order directly without referring
the Purchase Requisition. In this case, the user has to specify the item, quantity,
need-by date, payment terms and other terms in the purchase order directly. Their is
no restriction on the number of item in a single purchase Order. On saving a system
generated number is assigned to the Purchase order.
After entering the purchase order, the India Localization taxes are applied by
selecting the specific tax category from the list of tax category structures already
defined in the system. System also provided the option to default the tax category
automatically based on the supplier selected on the Purchase order.
After finalizing the Purchase Order, the purchase department clicks on the Approve
button. A notification is forwarded to the approver based on the approval hierarchy
designed in the system. The Notification contains all the relevant details of the
purchase order item-wise along with the quantity and purchase price. The purchase
order status is changed to In-Process.
Approver opens the Notification summary Form to view all the pending notifications
received from various sources. Approver has the option to open the notification to
verify the details available on the notification and perform the action stated
Approve/Reject/Forward/Request more Information. On approval the Purchase order
status is changed to Approve
4.7.2
4.7.3
4.7.4
Purchasing
Notes
34 of 34
Doc Ref:
4.8 Process Map: Direct Purchase Order
Start
Create Standard
Purchase order by
specifying the relevant
details
India Localization
taxes are attached to
the Purchase order by
selecting the Tax
category structure
Approval Notification
is forwarded to the
approval based on the
approval hierarchy
Receiving
Process
Purchasing
Approver opens the

Notifications to review
the PO details and
approve/Reject/Forward
On Approval, the
Purchase order status is
changed to Approved
and is ready to be
received
34 of 34
Doc Ref:
Receiving Process
5.1
Process Overview: Receipt of Material against PO
ID
Description
5.1.1
Receiving Process starts by creating the MRN when the goods are received at the factory
gate. Purchase order is a prerequisite for creating a MRN and the status of the Purchase
order should be Approve. While entering the receipt the person has to enter the
Purchase order number against which the receiving has to be done. Various search
options are available to filter the required purchase order such as supplier name, PO
number, Item code, need-by date etc.
On entering the search option, system will show the relevant line items based on the
search criteria. The receipt header level details such as Supplier Invoice number, Invoice
date and other details can be entered based on the requirement. Additional fields can
also be added at the receipt header to capture additional details if required.
System will automatically show all the line items along with the open quantity. Option is
available to select the line and change the quantity based on the quantity specified on the
supplier Invoice. On saving, a system generated number is assigned to the Receipt.
Multiple receipts can be made against a single purchase order. The purchase lines
displays the actual pending quantity while entering the next receipt.
Once the Receipt number is generated, the localization screen is opened automatically
which displays the taxes already attached at the purchase order level. Option is available
to modify/add the taxes while entering the receipt. You can also add insurance, freight or
other misc. charges as taxes, based on percentage of the line value or on amount basis.
RG Registers are automatically updated once the localization screen is closed after saving
the receipt data.
Next step is perform Quality inspection based on the quality collection plan defined in the
system. Quality person has to enter the Receipt number to see the item received. Various
filtering options are available to display the required lines based on the search criteria.
The Quality person selects the line item and enter the relevant results as per the quality
collection plan. Quality person has the option to Accept/Reject the item quantity and enter
the rejection reasons for same. This process is repeated for all the line items. After
inspection the line status is changed to Accepted.
After the Inspection is done, the stores person performs a physical verification of the
inspected items. Option is available to stores for making adjustments for any short and
excess quantity found during physical verification.
5.1.2
5.1.3
5.1.4
5.1.5
5.1.6
Purchasing
Notes
34 of 34
Doc Ref:
ID
Description
5.1.7
After physically verifying the item quantity, stores person will deliver the item quantities to
the inventory by selecting the sub-inventory location, stock locators. At the time of
delivery a system generated Lot Number is assigned to the received item quantity and
then delivered.
The delivery location and stock locators can be defaulted automatically through the
system if the information is defined for individual items in the Item Defaults setup.
On delivery, the stock is updated and can be seen through on-hand availability screen.
You can also deliver the rejected materials to the rejection store or keep the rejected
stock in the receiving sub-inventory as long as it is not sent back to the supplier.
If the Purchase order line is fully received, the PO line status is automatically updated to
Closed for Receiving
After the receipt has been created, payment to the supplier will be done from
Account Payables module against the receipt no. generated (Refer to the To Be
Process for AP Module)
5.1.8
Purchasing
Notes
34 of 34
Doc Ref:
5.2
Process Map: Receipt of Material with Inspection against PO
Start
Enter the Search

criteria (PO number,
Supplier, Item) to
locate the relevant
lines to be received
Payment
Process
Purchasing
Enter the Receipt

Header details such
as Supplier Invoice
Number, Invoice Date
and other misc. details
After Deliver, the stock is

updated and can be seen
through the On-hand
availability workbench
Select the line items

and modify the
quantity based on the
supplier invoice.
Stores will deliver the

inspected material to
various sub-inventory
locations
India Localization taxes

defaults from PO which
can be Modified based
on the taxes applied on
the Supplier Invoice
Quality inspection is
performed by the quality
department and results
can be entered for
individual lines.
34 of 34
Doc Ref:
5.3
Process Overview Apply BOE to Receipt
ID
Description
5.3.1
For Imported Purchase, the first step is to enter the Bill of Entry into the system
through the Purchasing Module. On saving, the system automatically creates a BOE
Invoice for the Customs Authority. The customs duty is paid in advance to the
Customs Authority through a BOE Invoice created in AP Module.
In all receipts where tax of type customs duty or additional Customs duty is defined
in the tax lines, the system will not allow to create Receipt without applying Bill of
Entry (BOE). BOE button will be enabled only when the receipts tax lines have tax
type like Customs Duty, Additional Customs Duty
At the time of receipt, Items need to be matched with the payment of customs duty
paid on the item. This is done by matching the BOE invoice with the receipt.
Matching is done on item to item basis. Each item where Customs type of taxes is
attached, choose 'Apply BOE' to indicate against which Bill Of Entry the duty
amount was paid.
All BOE expenses shall be tracked through separate account defined at Org
level. Accumulated expenses (PTD/ YTD) against an account code can be queried
in Oracle General Ledger
5.3.2
5.3.3
5.3.4
Purchasing
Notes
34 of 34
Doc Ref:
5.4
Process Map Apply BOE to Receipt
Start
Purchasing
Enter Bill of Entry

details into the
system. BOE Invoice
is automatically
created in AP
Payment is made to
the Customs
Authorities against the
BOE Invoice
While Entering the

Receipts the BOE is
applied at Line level
Inspection
& Deliver
34 of 34
Doc Ref:
Purchase Order Maintenance

6.1
Process Overview: PO Amendment
ID
Description
6.1.1
Once the desired purchase order has been approved, you still can make necessary
changes to the document by opening the relevant purchase order to be amended
through the purchase order screen. Purchase order can be amended to adjust
quantities, Price, shipping addresses, need-by dates, distributions, etc. You can also
amend a purchase order to add/delete the items.
On saving the changes, the Purchase order is forwarded for re-approval based on
the approval hierarchy. The status of the purchase order is changed to Requires ReApproval and a revision number is assigned to the purchase order. The revision
number is incremented every time the purchase order is changed. All revisions begin
at 0 and Oracle Purchasing increments this revision number by 1. A Notification is
send for approval based on the approval hierarchy.
Approver opens the Notification Summary form to approve/reject/forward the
purchase order notification. On approval the status of the purchase order is changed
to Approved.
After the Purchase is approved, it is ready to be received.
6.1.2
6.1.3
6.1.4
Purchasing
Notes
34 of 34
Doc Ref:
6.2
Process Map: PO Amendment
Start
Query the Purchase to

be amended through
the Purchase order
Entry screen
Change the PO detail as per

the requirements. On saving
the PO status is changed to
Requires Re-approval and
revision is created for PO
Receiving
Process
Purchasing
Click the Approve

button to forward the
purchase order for
approval based on
approval hierarchy
After Approval, the PO

status is changed to
Approved
A notification is
forwarded to the
approver which
displays the PO
changes
Approver opens the

Notification summary
form to Approve/Reject
/forward the PO after
validating the information
34 of 34
Doc Ref:
6.3
Process Overview: Purchase Order Cancellation
ID
Description
6.3.1
Provision is available to cancel a purchase order or purchase order line after you
have approved it. When you cancel a purchase order or purchase order line, you pay
only for those goods you received before cancellation. Purchase orders that are inprocess (pending for approval) cannot be cancelled. When you cancel a Purchase
order, the requisition lines associated with the purchase order can also be cancelled
if the Cancel Requisitions check box is selected. If the Cancel Requisitions check
box is not selected, the requisition lines are not cancelled and are returned to the
pool of available requisitions.
On canceling a purchase order or a purchase order line, the cancelled lines will not
appear while doing the receiving transaction.
6.3.2
Purchasing
Notes
34 of 34
Doc Ref:
6.4
Process Map: Purchase Order Cancellation
Start
Purchasing
Query the Purchase to

be cancelled through
the Purchase order
Entry screen
Navigate to Control
Document Window form PO
Screen to cancel complete
PO or selectively PO lines
On Cancellation of
PO, modification
cannot be done.
Receiving
Process
34 of 34
Doc Ref:
Return to Supplier
7.1
Process Overview: Return of Rejected Material to Supplier
ID
Description
7.1.1
During Quality Inspection process, if t h e material is found to be def ective then

quality person has the option to reject the partial/full quantity and enter the reason of
rejection and additional comments as per the quality collection plan. The line is split
into accepted quantity and the rejected quantity.
After quality inspection, the rejected material is delivered to the rejection store by the
store department. A separate sub-inventory will be defined to stock the rejected
material.
Next process is to return the rejected material lying in the rejection store to the
supplier. Rejection return is done against the MRN number against which the receipt
has been done. Enter the Receipt number against which the item quantity needs to
be returned.
On entering the receipt number the receipt lines against the MRN are displayed.
Select the relevant line item, return quantity, supplier name to return the item back to
the supplier. On saving the date the stock of the item is automatically adjusted and a
debit note is created automatically for the supplier based on the attributes defined at
the supplier Master.
System generated Excise Invoice number is assigned for rejected material through
the India Return to vendor Form.
The Excise Registers are automatically updated with the return quantity and excise
amount. The accounting entries relevant to the return transactions are automatically
generated to reflect the correct account balances.
Supplier challan is printed through the system. Option is also available to mail the
copy of supplier challan to the supplier.
7.1.2
7.1.3
7.1.4
7.1.5
7.1.6
7.1.7
Purchasing
Notes
34 of 34
Doc Ref:
7.2
Process Overview: Return of Rejected Material to supplier
Start
Quality Inspection is
done against the
Receipt to record the
rejected item quantity
and relevant details
Stop
Purchasing
Rejected items are

delivered to the
rejection stores
Supplier Challan is printed

through the system and
the rejection letter which
needs to be send to
supplier
Query the Receipt

number in the Return
to Vendor Form to
view the Receipt
Lines
Stock is updated
automatically and a Debit
note is created for the
supplier. Excise registers
and accounting entries are
updated accordingly
Select the relevant

line and specify the
quantity to be
rejected to supplier
Generate the Excise

Invoice Number for
the Rejected Material
34 of 34
Doc Ref:
Value Added Tax

8.1 Process Overview: Claiming VAT
ID
Description
8.1.1
VAT Tax amounts included in the purchase transaction can be recovered on receipt
of VAT Invoice from the Supplier. This document can be received either with the
receipt of material or at a later stage. If the document is received along with the
material then, the user has an option to enter the VAT Invoice details by opening the
Claim Details window through the Receipts India Localization window
To open the Claim Details window while creating the receipt, click on the Claim
VAT button on the Receipt India Localization window
If the VAT Invoice details are not entered while creating the receipt, option is
available to enter these details by accessing the Claim VAT screen through the
menu option. The options available would be the same as those when the form
is opened through the Receipts localized screen. However, here the user has an
option to query for multiple receipts based on the options in the query-find Screen
8.1.2
8.1.3
Purchasing
Notes
34 of 34
Doc Ref:
8.2 Process Map: Claiming VAT
Start
Purchasing
Navigate to the
Receipt (Localized)
Screen
Choose Claim VAT

to indicate user
want to claim VAT
during PO receipt
Enter the Details in

Claim VAT screen
e.g. VAT invoice
number, VAT
invoice date
Stop
34 of 34
Doc Ref:
Accounting Entries
9.1 Process Overview: View Accounting
ID
Description
9.1.1
An option to view the accounting entries for tax accounting generated during the
receipt is being provided. Through this option, user can confirm that accounting
entries are generated for the receipt properly. User need to navigate to this
window through View accounting. Following details are shown in view accounting
screen
Account Type: The user can look for accounting entries generated for different
account types like Receiving , Excise, tax etc.
UOM: This field displays the Unit of measurement in which the transaction was
recorded
Transaction Date: This field displays the date on which accounting transaction is
recorded
Quantity : This field displays the quantity received against the transaction
9.1.2
9.1.3
9.1.4
9.1.5
Purchasing
Notes
34 of 34
Doc Ref:
9.2 Accounting Entry Overview

On Receipt of Material against PO
Account
Inventory Receiving A/C
Debit
Credit
With PO Price + Total Tax Amount
AP Accrual A/C
With PO Price + Total Tax Amount
On Claiming Cenvat Credit

Account
Cenvat A/C
Debit
Credit
With Cenvatable Amount
AP Accrual A/C
With Cenvatable Amount
Delivery of Material against PO

Account
Material A/C
Debit
Credit
With PO price + All Non Claimable Tax amount
With PO price + All Non Claimable Tax amount
Return to Supplier after Inspection

Account
Debit
AP Accrual
Item PO price + total Tax Amount
Credit
Item PO Price + All Non Claimable Tax amount
Cenvat A/C
Total Cenvat Amount
Purchasing
34 of 34
Doc Ref:
Purchasing
34 of 34
Doc Ref:
Appendices
Appendix A Approval Hierarchy
Approval Role / Limit

Document Types :
Standard Purchase order
Blanket Purchase order
Blanket Release
Director
General Manager
Manager
Associate
Purchasing
Above 10,000
Below 10,000
Review & Forwarder
Approval Initiator
34 of 34
Doc Ref:

Open Issues
ID
Issue
Resolution
Responsibility
Target Date
Impact Date
Closed Issues
ID
Issue
Resolution
Responsib Target
ility
Date
Impact
Date
34 of 34

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BP.080 FUTURE PROCESS MODEL

Ms. Yasha Asthana

BP.080 Future Process Model

Doc Ref: /R12/BP.80/PO

BP.080 Future Process Model

Doc Ref: /R12/BP.80/PO

Acronyms and abbreviations

Process Overview: Create New Supplier

Requisition to Purchase Order

Process Overview: Receipt of Material against PO

Purchase Order Maintenance

Process Overview: View Accounting

Appendix A Approval Hierarchy

Process Overview: Claiming VAT

Process Overview: Return of Rejected Material to Supplier

Value Added Tax

Process Overview: PO Amendment 22

Process Overview Requisition to PO (Unplanned Items)

BP.080 Future Process Model

Doc Ref: /R12/BP.80/PO

Open and Closed Issues for this Deliverable

1. Acronyms and abbreviations

Annual Maintenance Contract

Bought Out Products

Descriptive Flex Field

Enterprise Resource Planning

Open and Closed Issues for this Deliverable

2. Envisioned business processes for Purchasing

Open and Closed Issues for this Deliverable

Open and Closed Issues for this Deliverable

3.2 Process Map: Create New Supplier

Open and Closed Issues for this Deliverable

3.3 Process Overview: Approved Supplier List (ASL)

3.4 Process Overview: Blanket Purchase Agreement & Release Creation

Open and Closed Issues for this Deliverable

Open and Closed Issues for this Deliverable

3.5 Process Map: Blanket Purchase Agreement & Release Creation

Approver opens the

India Localization taxes

Open and Closed Issues for this Deliverable

Requisition to Purchase Order

Process Overview Requisition to PO (Unplanned Items)

Open and Closed Issues for this Deliverable

Open and Closed Issues for this Deliverable

Process Map: Requisition to PO (Unplanned Items)

Created RFQ is send

Open and Closed Issues for this Deliverable

Process Overview: Auto Requisition to PO (Min-Max Planned Items)

Open and Closed Issues for this Deliverable

Process Map: Auto Requisition to PO (Min-Max Planned Items)

Item is defined as MinMax Planned in the

Open and Closed Issues for this Deliverable

Process Overview: Auto Requisition to PO (MRP Planned Items)

Open and Closed Issues for this Deliverable

Process Map: Auto Requisition to PO (MRP Planned Items)

MRP is run based on

Open and Closed Issues for this Deliverable

4.7 Process Overview: Direct Purchase Order

Open and Closed Issues for this Deliverable

4.8 Process Map: Direct Purchase Order

Approver opens the