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/ Receiving
Quotations Sourcing
Invoice/
Analysis Payment

Supplier
management Reporting

Supplier
Performance

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 Demand Source

Purchase Request for Quotation

Supplier
requisition quote (RFQ)

Receive Inventory Invoice Payment

Order

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

Types of Purchase Order Method of Purchase Order
1. Standard Purchase Order Manual Creation
2. Planned Purchase Order Search approved requisition and them to PO
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 --- PO QTY, RECEIVED QTY, INSPECTED QTY WITH
INVOICE QTY

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 INVOICE:-
Once you’ve received the goods or service from the supplier, you’ll 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. Match the Invoice with Purchase Order.
3. Schedule the payment.
4. Approve the Invoice
5. Validate the Invoice
6. Create accounting Entries
7. Pay the Invoice as per schedule.
8. Transfer the Accounting entries to GL.
9. 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) RFQ’s and Quotation  RFQ’s

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 (N) RFQ’s and Qu`otation  RFQ’s
(B)  Currency

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 (N) RFQ’s and Quotation  RFQ’s

(B)  Terms

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(N) RFQ’s and Quotation  RFQ’s

(B)  Price Breaks

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 (N) RFQ’s and Quotation  RFQ’s
(T)  More

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 (N) RFQ’s and Quotation  RFQ’s
(T)  Supplier

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 Create an Quotation.

(N) RFQ’s 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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