Apr 142011
 

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.

Navigation: 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.

Click the Distributions button. Enter the Charge Account.

Save the work. The status of the requisition will now be “Incomplete”. And now the Approve button is highlighted. The requisition needs to be approved first before proceeding further by the concerned authority. Submit this requisition for Approval by clicking on the Approve 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.

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, approved and cancelled the requisitions) as below:

Navigation: Tools menu > Action History.

Underlying Tables:

PO_REQUISITION_HEADERS_ALL

PO_REQUISITION_LINES_ALL

PO_REQ_DISTRIBUTIONS_ALL

2) Create Purchase Order:

There are 4 types of Purchase Orders:

1. Standard PO: A Standard PO is created for one–time purchase of various items

2. Planned PO: A Planned PO is a long–term agreement committing to buy items or services from a single source. You must specify tentative delivery schedules and all details for goods or services that you want to buy, including charge account, quantities, and estimated cost.

3. 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, but you do not know the detail of your delivery schedules.

4. 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

Choose type as Standard Purchase Order. Enter the Supplier, Buyer. In the Lines tab, specify the line number, line type, Item, quantity, price etc.

Click Terms to enter terms, conditions, and control information for purchase orders.

Click Currency button to enter and change currency information for purchase orders, RFQs, and quotations.

Click Shipments button to enter multiple shipments for standard and planned purchase order lines Purchase order shipment specifies the quantity, ship–to organization and location, date you want your supplier to deliver the items on a purchase order line, and country of origin for the items. When you save, Purchasing creates distributions depending on the default information available.

To enter more shipment information, select the More tab.

  • Enter the Receipt Close Tolerance percent, Invoice Close Tolerance percent to set the receiving and invoice close point.
  • 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.

Three–Way: Purchase order, receipt, and invoice quantities must match within tolerance

before the corresponding invoice can be paid.

Four–Way: Purchase order, receipt, accepted, and invoice quantities must match within

tolerance before the corresponding invoice can be paid.

  • 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.

Save the work.

Click the Receiving Controls button to enter receiving control information for purchase orders.

- Enter the maximum acceptable number of Days Early and Days Late for receipts.

- Enter the Action for receipt date control.

- Enter the maximum acceptable over–receipt Tolerance percent (receipts that exceed the quantity received tolerance).

- Enter the Action for Overreceipt Quantity.

- Select Allow Substitute Receipts to indicate that receivers can receive substitute items in place of ordered items.

- Enter the default Receipt Routing that you assign goods: Direct Delivery, Inspection Required, or Standard Receipt.

- Enter the Enforce Ship To location option to determine whether the receiving location must be the same as the ship–to location.

Save the work.

Click Distributions button to enter distributions for the shipments.

Select more tab to enter more details and the requisition number (optional).

Save the work.

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.

Navigation: ReceivingàReceipts

Enter the PO Number and select find button.

Go to Lines, check the lines you want to receive in the PO.

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.

Navigation: Payables, Vision Operations (USA) > InvoicesàEntryàInvoices

Enter type — Standard, supplier information and amount.

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.

Select the lines required and click on Match button.

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”. it has to be Validated and Accounted before you can pay it.

Validating the Invoice:

Click on Actions Button and Select “Validate”. Click on OK button.

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 àView Accounting

Invoice Tables:

AP_INVOICES_ALL

AP_INVOICE_DISTRIBUTIONS_ALL

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. You would see Amount paid as 0.00 before you make a payment.

Click Actions button. Select “Pay in full” and click “OK”.

Select the Bank Account and Document. Save the Work.

Now that the payment is made, when you query for the invoice in Invoice window, you will the Amount Paid as $4,000.00.

Create Accounting entries for payment.

Click Actions and select “Create Accounting”

Select the void checkbox to cancel the payment.

View Accounting Entries:

In the Payments window, query for the payment.

Tools menuàView Accounting

Payment Tables:

AP_INVOICE_PAYMENTS_ALL

AP_PAYMENT_SCHEDULES_ALL

AP_CHECKS_ALL

AP_CHECK_FORMATS

AP_BANK_ACCOUNTS_ALL

AP_BANK_BRANCHES

AP_TERMS

You can also pay the invoices using Payment Batch screen. 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.

Journal Import:

Refer to the Article “Order to Cash Cycle”.

Posting:

Refer to the Article “Order to Cash Cycle”.

  109 Responses to “Procure to Pay Cycle”

  1. Hi All,

    Kindly help me for project accounting in Oracle apps.

    Regards,
    Bidyakar

  2. Hi All,

    Kindly help me for Project Accounting data flow in Oracle apps.

    Regards,
    Bidyakar

  3. Really Amazing..the way of Presentation..the way it seems..very nice…

  4. Very nice website. thanks for help us by the website

  5. Excellent supportive document for P2P

  6. excellent document.very easy to understand

  7. hi
    sir
    1.can we create contract purchase order across operating units?if yes?how.plz send me answer.
    2.how to create raw material item?what are the attributes enabled?

  8. hi
    sir
    plz send me P2P and O2C end to end cycle with explanations.it is very useful to me.

    regrad
    ahmad

  9. Hey, extraordinary work.

  10. great job. its very easy to understand.
    Thanks alot.

  11. Awesome job. Congratulations!!!

  12. hi good work easy to understand thank u

  13. good work but also give forms user manual

  14. Really Good work.. It is very useful..

  15. Very nice post. Thanks a lot for the elaborate explanation. It is indeed of great help to freshers. Keep Continuing the good work.

  16. Thank you SO MUCH :)

  17. that's very good
    documents are very helpful to understand the process of p2p., both functionally and Technically

  18. General overview of the document. Nice.

  19. Thanks for giveing nice information about the P2P.

  20. it being a great source or informative for freshers as well as for experienced one to crack the interview.

  21. Awesome :-)

  22. I am a fresher of Oracle, this document is helpful for me. Thanks a lot!

  23. nice document!!Thanks!

  24. Excellent presentation with screen shot

  25. Hi,

    Thanks for sharing the information….

    Really helpful for Oracle Apps beginners….

    -Thanks
    Shaikshavali

  26. Excellent

  27. Thnks for ur valuble gride lines……….

  28. VERY NICE DOCUMENT…VERY EASY 2 UNDERSTAND PROCESS CLEARLY.

  29. Thanks for this nice and precise article

  30. A very useful guide…

  31. please update all the technical flow of p2p,o2c with r12 tables and also mention the standard concurrent programs that run at back end.. I feel it would be helpful….thanks a million… i would thankful if u mention all the details…

  32. hi.

    i need more things regarding P2P.

  33. hi,

    I am really happy after reading these whole P2P Cycle.
    I want to learn more and more regarding the P2P,so please sent me a some more things like PPT.

  34. Very helpful for beginners..thanks a lott

  35. Hi,

    Excelent document !!!!!

    Thanks

  36. A very nice explanation and precise explanation. Thank you.

  37. Excellent tutorial for beginers & apps user

  38. awesome and the best document.

  39. Nice presentation ……..

  40. ohh shubham bro….its gl_code_combinations_kfv…. thanks for correction

  41. Navin , Its gl_code_combination_klv or gl_code_combinations_kfv …?

  42. we get separated Charge Account data in gl_code_combinations table…..but we get concatinated Charge Account data in gl_code_combination_klv table….

  43. USE THIS TABLE TO GET THAT INFO : gl_code_combinations_kfv

  44. Its really helpful for Beginners….. Thanks Prudhvi

  45. it is helpful

  46. Hi, we have a situation where the Charge Account data on some of the lines on a Purchase Order just disappear. (r12)
    Would you be able to provide some information on this.

  47. Very good Article.Thanks A lot
    Keep up the good work
    Manav

  48. EXCELLENT

  49. nice document………..

  50. i appriciate this document

  51. Excellent Document on P2P cycle

  52. thanks for providing informations it very good document .

  53. it is very helpful to the beginer,everybody can understand easily
    thank you ..

  54. very helpful document

  55. good and understandable

  56. very easy to understand thanku….

  57. GOOD INFORMATION, REALY VERY GOOD…..

  58. i am agree with these comments.

  59. It’s very helpful for all freshers in P2P Accounts Payable. A great help to understand P2P process of Accounts payable.

  60. It’s very good Document

  61. Really very good and easy understanding bro

  62. Superb document, i have ever seen earlier. Thanks for the helpful document.

  63. Dear sir,

    The article is very good,but actually am stuck at one point. at stage of creating invoice,after matching with po when i click on validate it shows me need revalidation , tell me what can be the issue?

  64. Easy n simply explained.. thnx !

  65. We have deleted incomplete POs in ERP 12i.
    We require details, how many POs are deleted in system

  66. excellent document

  67. It is a nice doc very easy to understand and more useful for the beginners.

  68. Great work…..superb document to learn basics of P2P cycle….

  69. thank you very much for helping us to easily understand the P2P process by this document.
    your help is much appreciated.

  70. Dear Sir,
    We follow procedure for payment: 1) GOOD – 4 WAY & 2) Service – 2 WAY match in PO.
    How to set the setup in ERP 12i.
    Pls help.

    Regards,Jignesh

  71. Thank you very much. It was very helpful. I request you to update the same process for item creation, subinventory, oganization assignment etc. Hoping for your good work.

  72. Really very very nice.Really hands up to u Mr.boss why i am saying that Share of knowledge is Really Great thought.it is sooooooo helpful to every body and especially to me.thanks a lot…..

  73. it is very nice&easly understand
    but i want to some more clarification on the invoice tables
    in that tables having which information is stored(AP_ACCOUNTING_EVENTS_ALL,
    AP_AE_HEADERS_ALL,
    AP_AE_LINES_ALL, etc)
    and pls entered gl tables

  74. It is very use full doc.., i have ever seen

  75. it is a great way to help student to understand order processing. Thank you sir good bless you..

  76. Absolutely Brilliant

  77. very good document. very helpful to me

  78. Gr9 Work, Nice Document.. is it the same with R12 ledger name instead of Sets of Books. or are any changes in the P2P Process. Please do share your thoughts ,

    Thanks of +++ to share this Useful document.. :)

  79. Great Article on this Topic!!! Thanks

  80. its very nice sir keep posting new things

  81. its…….really a good……no more talking…

  82. Superb document, i have ever seen earlier. Thanks for the helpful document.

  83. Nice Document and can u prepare in R12

  84. It’s simply superb i ever seen these types of posting.
    These are very useful for beginners and as well as experienced.

  85. this artical is really help full to freshers

  86. very beautiful document

  87. Excellent document. It was very easy to understand. Keep up the good work!!!

  88. Better than the BEST

  89. very nice

  90. I CAN UNDERSTAND VERY EASY. IT’S A GOOD DOCUMENT.

  91. Thanks a Lot…It was very helpful….

  92. Excellent doc

  93. A good presentation and easy to understand. and i want one thing in R12 how to transfer the payable to the general ledger. thanks in advance

  94. Excellent doc

  95. A good presentation and easy to understand.
    Could be more specific with relations between Requisition,Purchase Order,……tables?

  96. Nice document to create the p2p

  97. very good,this is lot of use how to say interviews and get more knowledge…………….

  98. The Documents i have Ever seen for the P2P Cycle
    thanks for ur valiable guide lines

  99. What about transaction taxes like sales/use tax or VAT?

  100. BETTER THAN THE BEST DOCUMENTATION

    Thanks a lot,

  101. fantastic documentation…
    thanks a ton

  102. These documents are very helpful to understand the process of procure to pay.

  103. very nice

  104. Good for the Beginner..

    Thank you.

  105. good dosument i have ever seen

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