P2P and O2C: Procure to Pay and Order to Cash CyclesJune 20, 2008 — Atif Siddiqui 8 Votes Oracle has developed this ERP solution which truly covers these both cycles as well as many others. Oracle EBS comprises of the Standard Core Business Management applications like General Ledger, Payables, Receivables, Purchasing, Order Management, Inventory, Discrete Manufacturing, Process Manufacturing , HRMS and many more. The application I’ve mentioned are so integrated that it handles the beginning to end of both Assets and Liabilities. When I say Assets I am referring to applications like Order Management and Receivables, and when I say Liabilities I am referring to Purchasing and Payables and both of these Assets and Liabilities are finally pushed and calculated in Oracle General Ledger. The base or the heart of Oracle EBS is Oracle General Ledger. Let me call GL an intrinsic. Procure to Pay: First let’s see what the heading itself means? Procure to Pay means Procuring Raw Materials required to manufacture the final or finished Goods to Paying the Supplier from whom the material was purchased. But this is not just two steps. It involves many steps. Let’s see the steps and Oracle Application involved in performing those steps. 1. Oracle Purchasing: You enter Suppliers of different materials and products you want to 2. 3. 4. 5. 6. 7. purchase to manufacture a finished good that your organization plans to sell. Oracle Purchasing: You prepare a Request for Quotation (RFQ) and send it to different suppliers to get the best and/or economical price for the product. Oracle Purchasing: Suppliers sends their quotations and you upload those quotations in Oracle Purchasing to get the best three quotes and further to get the one best quote. Oracle Purchasing: You prepare a Purchase Order(PO) against the best RFQ to buy the goods from the supplier who quoted the suitable price and sends the PO to that supplier Oracle Purchasing: The supplier receives the confirmation of purchase from PO and ships the ordered goods. You receive the goods enter a Goods Received Note (GRN) in Oracle Purchasing. Oracle Inventory / Oracle Assets: It’s up to you whether you want to receive the goods at your head office or you Inventory directly. In either case you move the received goods to your different Raw Material Inventory from Oracle Purchasing to Oracle Inventory and the Item Count increases. If the item is Asset Type then it will move to Oracle Assets at the time of Invoice creation in Oracle Payables. Oracle General Ledger: Once you move the goods to Oracle Inventory, it sends the Material Accounting to Oracle General Ledger. 8. Oracle Payables: After this the supplier sends you the invoice for the purchased goods and you Enter or Match the invoice against the PO from Oracle Purchasing in Oracle Payables. As said before, if the item is Asset in nature then it will move to Oracle Asset. 9. Oracle General Ledger: When you enter the invoice it means that you have created a Liability against that supplier and also you have recorded the expense incurred or asset purchased. Oracle Payables sends the invoice accounting to Oracle General Ledger. 10. Oracle Payables: You pay the invoice and settle the Liability. 11. Oracle General Ledger: The liability is settled and your cash movement account is updated. 12. Oracle Cash Management: As you pay the invoice Oracle Payables sends the payment information to Oracle Cash Management for Bank Reconciliation. Once reconciled, Oracle Cash Management sends the updated Bank/Cash accounting entry to Oracle General Ledger. 13. Oracle General Ledger: Your cash at bank is updated with actual balance. 14. Oracle Process Manufacturing(OPM) / Oracle Discrete Manufacturing(ODM): You start the manufacturing of your final product. Both OPM or ODM requests the different raw materials from you inventory organizations and manufactures a finished good. 15. Oracle Inventory: As the raw materials are issued to OPM and ODM the inventory sends the issuing material accounting to General Ledger and decreases the Item Count from the Raw Material Store. As the finished good is prepared, Oracle Inventory receives the finished good in Finished Good Store and increase the Item Count. Now the final product is ready to be sold in the market and from here the O2C cycle starts. Order to Cash Cycle: Order to Cash means Customer’s Order Placing to Vendor’s Cash Receiving. When your final product is ready to be sold, you market it. The customer gets fascinated with the marketing campaign and decides to buy your product and from here starts the O2C cycle. 1. 2. 3. 4. 5. 6. 7. 8. 9. Oracle Order Management: Customer places the order. Oracle Order Management: You enter the customer order Oracle Inventory: Check the available unit and the quantity ordered by the customer. Oracle Order Management: You ship the product to customer site and decreases the Finished Goods inventory. Oracle Receivables: The customer receives the product and you invoice the customer. Oracle General Ledger: You record your revenue and receivables. Oracle Receivables: The customer pays and you receive the cash/check. Oracle Cash Management: Oracle Receivables sends the customer receipt for Bank Reconciliation. After reconciliation, Oracle Cash Management send the actual bank balance or Oracle General Ledger. Oracle General Ledger: You have the actual bank balance. This is how the P2P and O2C cycle works, but this is not the only way, obviously there are many other applications with different cycles. This is one of them. Procure to Pay Cycle Overview: 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. Enter the Charge Account. . specify the Buyer name. Click the Distributions button.In Source Details tab. The status of the requisition will now be Incomplete. Submit this requisition for Approval by clicking on the Approve button.Save the work. The status will now be updated to In Process . And now the Approve button is highlighted.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 requisition needs to be approved first before proceeding further by the concerned authority. . 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. 3. and estimated cost. quantities. Planned PO: A Planned PO is a longterm agreement committing to buy items or services from a single source.We can also check the Action History of requisition (it will show details about who has submitted. 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. approved and cancelled the requisitions) as below: Navigation: Tools menu > Action History. including charge account. Standard PO: A Standard PO is created for onetime purchase of various items 2. You must specify tentative delivery schedules and all details for goods or services that you want to buy. . but you do not know the detail of your delivery schedules. 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. and control information for purchase orders. . conditions. date you want your supplier to deliver the items on a purchase order line. price etc. Purchasing creates distributions depending on the default information available. Click Currency button to enter and change currency information for purchase orders. quantity. 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. Buyer. Enter the Supplier.4. Click Terms to enter terms. In the Lines tab. RFQs. When you save. specify the line number. shipto organization and location. Click Shipments button to enter multiple shipments for standard and planned purchase order lines Purchase order shipment specifies the quantity. Item. line type. and quotations. and country of origin for the items. accepted. Invoice Close Tolerance percent to set the receiving and invoice close point. Receipt: Payables must match the invoice to the receipt. FourWay: Purchase order. 2. Select an Invoice Match Option: Purchase Order: Payables must match the invoice to the purchase order. receipt. and invoice quantities must match within tolerance before the corresponding invoice can be paid. and invoice quantities must match within tolerance before the corresponding invoice can be paid. Save the work. Enter the Receipt Close Tolerance percent.To enter more shipment information. 1. ThreeWay: Purchase order. select the More tab. receipt. . Select one of the following options for Match Approval Level: TwoWay: Purchase order and invoice quantities must match within tolerance before the corresponding invoice can be paid. 1. Enter the Action for receipt date control. .Enter the Enforce Ship To location option to determine whether the receiving location must be the same as the shipto location. . . . . . Save the work. Inspection Required.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 default Receipt Routing that you assign goods: Direct Delivery.Select Allow Substitute Receipts to indicate that receivers can receive substitute items in place of ordered items. or Standard Receipt. .Enter the Action for Overreceipt Quantity.Enter the maximum acceptable overreceipt Tolerance percent (receipts that exceed the quantity received tolerance). . Click Distributions button to enter distributions for the shipments. . Save the work. Select more tab to enter more details and the requisition number (optional). Click on the Approve button to initiate the Approval process. Underlying Tables: . check the lines you want to receive in the PO. Go to Lines. Navigation: ReceivingReceipts Enter the PO Number and select find button. .PO_HEADERS_ALL PO_LINES_ALL PO_DISTRIBUTIONS_ALL (REQ_HEADER_REFERENCE_NUM in Distributions table is the Requisition number for this PO) PO_LINE_LOCATIONS_ALL 3) Create Receipt: Create a receipt to receive the items in the Purchase Order. .Click on Header button and Save which creates the receipt. Standard. its time to pay the vendor for the goods purchased and hence the invoices are created. Navigation: Payables.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. supplier information and amount. Vision Operations (USA) > InvoicesEntryInvoices Enter type -. 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. it has to be Validated and Accounted before you can pay it. . Click on OK button.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 Accounting. Click on OK button. Validating the Invoice: Click on Actions Button and Select Validate. You can see the Accounting Entries here: Tools View Accounting .Now we can see the Accounted status as Yes. 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. Select Pay in full and click OK. . Click Actions button. Save the Work. .Select the Bank Account and Document. Create Accounting entries for payment. you will the Amount Paid as $4.000.Now that the payment is made.00. Click Actions and select Create Accounting . when you query for the invoice in Invoice window. View Accounting Entries: In the Payments window. Tools menu View 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.Select the void checkbox to cancel the payment. Refer to the article Make AP Payments through Payment Batches . query for the payment. Procure To Pay Cycle Process .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. 1. . See the status of the PO In The header level: It is approved. Give Distributions 4. Give Shipments 3. Create a Standard Purchase order. Approve PO 5. 2. Go to the ReceivingàReceipts 7. 8. Give the sub inv and stock locator where you want store the goods. And Save. View the request status and refresh If not Completed. .6. Run the Program Pay on receipt auto invoice. 11. View the Status of the program and refresh if not completed.9. Go to Payables: InvoiceàEntry àInvoice Query with the Invoice Num ERS% .(Which Generate Invoice Automatically) 10. After Validate Enable the creating Accounting check box. And Pres ok. Enable the check box Pay in full. . Validate the Invoice .12.See The Account 14. 13. 17. . Select the Bank and Go to Actions 16.15. See the Account Created. Enable the check box Create Accounting and press ok. 20. Go to Cash Management: Bank Statementsà Manual clearing. 19.18. Now see the invoice status validated. . accounted and amount paid. Enable the Transaction and press Clear Transaction Button. àClear Transactions Find the Bank Account. enable Create Accounting and press ok. . See the Account created. Go to Payables: PaymentàEntryàPayment Query with Payment Date 22. 23.21. Go to actions. Run: Payables Transfer to General Ledger.Got to GL:JournalàImportàRun .24. 25. 26.View the Request status and refers if not completed. 29.View the request status and refers if not completed. 28. Go to JournalsàEnter .27.Now We can Post the journals. Secondary Tracking Segment .Find with Source as Payables. The secondary tracking segment is used in the revaluation. In Oracle Applications Release 11i. retained earnings.What are the different calendars used in FA Module? 10.What is ment by retire asset? How do we retire assets in Oracle applications? 5.Org Setup Multi-Org is a server-side (applications and database) enhancement that enables multiple business units in an enterprise to use a single installation of Oracle Applications products while keeping transaction data separate and secure. What is the significance of asset books in FA? Types? 4.What is ment by asset revaluation? 24.What is ment by depreciation override? Can we override depreciation? 21.What is ment by Roll back depreciation? 12.10 release.What are the asset types in FA Module? 9. How do we depreciate Assets in Oracle Applications? 3.Secondary Tracking Segment is a Flex field qualified added in the 11.What is ment by projection? 18.What is the use of allow amortized changes check box? 16.Is FA Supports Multi _org? 11.What is ment by physical inventory reconciliation? 22. and cumulative translation adjustments by unique pairs of balancing segment and secondary tracking segment values.Tell me something about asset insurance? 23. What are the different ways of adding assets in FA? 2. balensing Segment and inter company.What is the profile used to secure asset register? 8.what is internal retairment? 27. The Multi-Org enhancement uses native database views to build a security layer on top of a single installation of Oracle Applications.5.At what level FA is implemented? 7. The system will automatically maintain unrealized gain/loss.What is the difference between Quick addition and detail addition? 17. Assets Frequently Asked Questions 1.What are the depreciation methods used in FA module? 14.What is ment by leased asset? 20. and fiscal year-end close processes.What is ment by prorate convention? 15.what is the difference between initial mass copy and periodic mass copy? 26.What are the mandatory flexfiels used in FA? 13. What are the various Journal Entries generated through fixed assets 6. .What is ment by what-if analysis? 19. you can assign Secondary tracking segment flex field qualifier to an segment which haven’t assigned Natural account. translation.In prepare mass additions window what are available Q names? 25.What experience do you have in FA Module Implementation? 28.What do you know about FA to GL cycle? Multi . Basic Business Needs The Multi-Org enhancement to Oracle Applications provides features necessary to satisfy the following basic business needs. You should be able to: • Use a single installation of any Oracle Applications product to support any number of business units, even if those business units use different sets of books. • Support any number of business units within a single installation of Oracle Applications. • Secure access to data so that users can access only information that is relevant to them. • Procure products from an operating unit that uses one set of book, but receive them from another operating unit using a different set of books. • Sell products from an operating unit that uses one set of books, but ship them from another operating unit using a different set of books, automatically recording the appropriate intercompany sales by posting intercompany accounts payable and accounts receivable invoices. • Report at any level of the organizational structure The Below is the structure of the Multi-Org 1.Login as sysadmin responsibility 2.Ddefine required responsibilities Navigation:security->responsibility->define 3.Define user and assign responsibilities to the user. N:Security->user->define. 4.Login as GL Responsibility 5.Define accounting flexfield N:setup->financials->flexfield->key->segments 6.Give values for your segments N:setup->financials->flexfield->key->values. 7.Define Currency N:setup->Curriencies->define 8.Define Calender. N:Setup->financials->calender->Type/Accounting 9.Create SOB N:Setup->financials->book->define 10.Login as HRMS responsibility. 11.Define a location N:Work Structure->Location 12.Define a Business Group N:Works Structure->organization->description 13.Set the following Profile Options to all your responsibilities HR:security HR:bisiness group HR:User Type GL:Set of books name 14.Login As Inventoruy responsibility 15.Create legal entity N:Setup->organizations->organizations 16.Create Operatiing unit N:Setup->organizations->organizations 17.Set Profile option Mo:Operating unit for all responsibilites which is worked at operating unit level. 18.Create Work day calender 19.Create inventory Organization. N:Setup->organizations->organizations 20.Login as sysadmin and run replicate seed data program. Note On Indian localization Oracle Applications was developed as a Global product.Because of this reason it does not supported by some acts like customs,central excise,vat,cst...etc which are mandatory according to Indian Laws. All other contries are also having some contry specific requirements. To meet the above requirements Oracle developes software named patches.We can add this patches to the base product of the oracle applications. Indian Localization is also one patch which meets the contry specific requirements. What is India Localization Product? India Localization is a solution built over Oracle E-Business Suite, Oracle's e-business applications software product, that provides Clients in India with the most comprehensive solution to comply with the India specific tax requirements as specified by Central Excise, Customs, Sales Tax and VAT, and Income Tax, (to the extent of tax deduction at source and generation of Depreciation Schedule for fixed assets). India Localization product also provides valuable information that can be used for statutory and management reporting. What Does India Localization Product Do?The product uses its own tax engine, for handling taxes applicable across 'Procure to Pay' and 'Order to Cash' transactions. In India Localization, taxes are defaulted based on the pre-determined setup (Tax Defaultation). Tax amounts are calculated based on precedence such as transaction base value, tax on tax, or assessable value as specified by tax authority (Tax Calculation). The Tax Amount is considered for inventory valuation, recoverability and accounting based on the pre-determined recoverability and accounting rules (Tax Accounting and Recoverability). Details of recoverable tax amount are recorded as part of the repository (Tax Recording). This information can further be used to calculate the final tax liability arising on settlement at the end of the tax period (Tax Settlement) and for statutory reporting (Tax Reporting). Components of India Localization Product Tax Defaultation Tax Calculation and Recovery Accounting for India Localization Taxes Recording and Reporting Tax Information Form personalization Introduction to Form personalization Form personalization is a declarative feature that alters the look and behavior of the oracle forms with out changing base code. This concept was introduced in the release 11.5.10. All E-Business suit forms can be personalized By using form personalization you can:1. Display your own terminology. 2. Stream lines the screen interaction. 3. Implement security policies. 4. Add your own validation and error messages. There are some limitations: 1. You can only change what oracle forms allows to be changed at run time. 2. You can only respond to limited trigger events only. 3. Your changes may be overridden by oracle base code. To Be Continued in the next post......... AIM Documents ............. Hai Friends...as a functional consultant we should know about AIM.Please find the AIM Documents list.............. 030 Map Business requirements BR.070 Create Reporting Fit Analysis BR.020 Prepare mapping environment BR.060 Develop High-Level Process Vision BP.080 Identify Reporting and Information Access Requirements Business Requirements Mapping BR.010 Define Architecture Requirements and Strategy TA.040 Develop Current Process Model BP.100 Define and Propose Architecture Subsystems .060 Define Reporting and Information Access Strategy TA.060 Create Information Model BR.080 Define Application Security Architecture TA.040 Gather Business Volumes and Metrics RD.090 Document Business Procedure Business Requirements Definition (RD) RD.070 Revise Conceptual Architecture TA.Business Process Architecture (BP) BP.060 Determine Audit and Control Requirements RD.010 Analyze High-Level Gaps BR.020 Conduct Current Business Baseline RD.030 Establish Process and Mapping Summary RD.020 Catalog and Analyze Potential Changes BP.080 Develop Future Process Model BP.040 Define Application Architecture TA.090 Define Application and Database Server Architecture TA.050 Gather Business Requirements RD.030 Determine Data Gathering Requirements BP.090 Confirm Integrated Business Solutions BR.010 Identify Current Financial and Operating Structure RD.080 Test Business Solutions BR.070 Develop High-Level Process Design BP.010 Define Business and Process Strategy BP.100 Define Applications Setup BR.040 Map Business Data BR.020 Identify Current Technical Architecture TA.050 Conduct Integration Fit Analysis BR.030 Develop Preliminary Conceptual Architecture TA.050 Define System Availability Strategy TA.070 Identify Business Availability Requirements RD.110 Define security Profiles Application and Technical Architecture (TA) TA.050 Review Leading Practices BP. 130 Convert and verify data Documentation (DO) DO.120 Create Installation routines Data Conversion (CV) CV.060 Design Database extensions MD.020 Define Documentation standards and procedures DO.150 Define System Management Procedures Module Design and Build (MD) MD.090 Publish system management guide .080 Develop conversion programs CV.040 Define Build Standards MD.070 Prepare conversion test plans CV.050 Produce documentation prototypes and templates DO.070 Publish user guide DO.020 Define Conversion standards CV.100 Create Database extensions MD.030 Prepare glossary DO.110 Define System Capacity Plan TA.010 Define Application Extension Strategy MD.070 Create Application extensions technical design MD.110 Perform conversion validation tests CV.060 Publish user reference manual DO.080 Review functional and Technical designs MD.020 Define and estimate application extensions MD.050 Create Application extensions functional design MD.030 Prepare conversion environment CV.100 Perform conversion business objects CV.120 Define Platform and Network Architecture TA.120 Install conversion programs CV.060 Design conversion programs CV.080 Publish technical reference manual DO.010 Define documentation requirements and strategy DO.130 Define Application Deployment Plan TA.140 Assess Performance Risks TA.TA.090 Prepare Development environment MD.010 Define data conversion requirements and strategy CV.040 Perform conversion data mapping CV.110 Create Application extension modules MD.090 Perform conversion unit tests CV.030 Define design standards MD.050 Define manual conversion procedures CV.040 Prepare documentation environment DO. 020 .060 .050 Develop systems integration test script TE.090 perform installation test TE.070 Perform unit test TE.Conduct Initial Project Team Orientation AP.060 .040 .110 .Prepare Project Team Learning Environment AP.130 Perform Acceptance test PERFORMACE TESTING(PT) PT.110 Perform system test TE.Execute Performance Test Adoption and Learning (AP) AP.030 Develop link test script TE.010 .080 .Design Performance Test Data PT.Create Performance Test TransactionPrograms PT.Develop User Learningware AP.130 .120 Perform systems integration test TE.Create Test Database Load Programs PT.Define Performance Testing Strategy PT.Develop Business Unit Managers’Readiness Plan AP.Define Executive Project Strategy AP.Develop Managers’ Readiness Plan AP.060 Prepare testing environments TE.Develop and Execute CommunicationCampaign AP.100 .Conduct Project Team Learning Events AP.120 .020 .100 .050 .Design Performance Test Transaction Programs PT.Design Test Database Load Programs PT.010 .120 .080 Perform link test TE.Develop User Learning Plan AP.Construct Performance Test Database PT.Business System Testing (TE) TE.080 .150 .Prepare User Learning Environment .100 Prepare key users for testing TE.040 Develop system test script TE.050 .140 .Create Performance Test Scripts PT.040 .030 .Identify Business Process Impact onOrganization AP.Develop Project Team Learning Plan AP.Align Human Performance SupportSystems AP.Align Information Technology Groups AP.010 Define testing requirements and strategy TE.Prepare Performance Test Environment PT.Identify Performance Test Transaction PT.Develop Project Readiness Roadmap AP.070 .090 .110 .Identify Performance Test Scenarios PT.160 .020 Develop unit test script TE.070 .090 .Conduct User Learning Needs Analysis AP.030 . 170 . The scope of the AIM is enterprise wide. Business Requirement Definition[RD] This phase explains about the Base line questionnaire and The gathering of information. Business Process Architecture[BP] This phase explains Existing business practices Catalog change practices Leading practices Future practices 2. If all the requirements match with oracle standard (with out customization) functionality then.Implement Production Support Infrastructure PM.Measure System Performance PM.Propose Future Business Direction PM.060 .Decommission Former Systems PM.110 .Conduct Effectiveness Assessment Production Migration (PM) PM.Verify Production Readiness PM.180 .Design Production Support Infrastructure PM.140 .AP.Refine Production System PM.Define Transition Strategy PM.120 . Business Requirement Mapping[BR] In this phase we can match all the requirements of business with the standard functionality of the oracle applications.Propose Future Technical Direction Oracle Implementation Methodalagy SUMMARY NOTES ON AIM Application Implementation Method is a provan approach.020 .010 .090 .040 . 1.030 .130 . There are eleven processes of implementation. which specifies all the activities which are required to implement oracle applications successfully. 3.070 .080 .Begin Production PM.Prepare Production Environment PM.100 .Maintain System PM.Set Up Applications PM.Develop Transition and Contingency Plan PM.050 . it is called as .Conduct User Learning Events AP. . payable builds the offset GL account by taking the . In this phase explains how to design a forms. It is done by a technical team.. database and reports. Adoption and Learning. For example: desktops software hardware people. 11. It is done by a functional consultant. transaction retrieval times. 6. This is called customization. If we enable balancing as a automatic offset. Data Conversion:[CV] Is the process of converting or transferring the data from legacy system to oracle applications? This is called as data migration. In this phase we have to prepare user manuals. Ex: transferring the closing balances of the previous year as an opening balances to next year.etc 5. you might want to use automatic offset method to keep your payables transaction accounting entries balanced. Application and Technical Architecture [TA] Explains the infrastructure requirements to implement oracle applications.vanilla implementation). 9.. The entire user should be trained with new oracle applications. Build and Module Design[MD] In this phase concentrate on developing the new functionality which is required by the client. Documentation:[DO] I n this phase we have to prepare module wise user guides and implementation manuals which helps in the implementation. 10.[AP] This phase explains about the removal of the legacy system of the client. Use Of Automatic Offset Method In Payable Options If you enter an invoice for expenses or asset purchases for more than one balancing segment. 4. Production Migration[PM] A process of decommissioning of legacy system and the usage of new oracle application system begins in this phase. Business System Testing:[TE] A process of validating the setup’s and the functionality by a tester to certify its status is allied business system testing. 7.. 8. Performance Testing:[PT] Performance testing means evaluation of transaction saving time. Examples For Categories: Accruals Adjustment Receipts Revaluation Payments. Run auto post program for specific source Import journals by source Freeze journals imported from sub ledgers to prevent users from making changes.e liability account from the supplier site. i..balancing segment value from the invoice distribution and overlaying it on to the appropriate GL account. Use document sequence to sequentially number journals by categories..Etc. you can use journal source to enforce management approval of journal before they are posted. Journal entry source indicates where your journal entries originate Journal categories help you differentiate entries by purchase or type. .. Examples for Sources: Assets Purchasing Payables Manual Budget ….Categories With Journal Source you can: Define inter company and suspense accounts for specific sources. With Journal Categories you can: Define inter company and suspense accounts for specific category. If you have journal approval enabled for your set of books. it takes the opposite approach with one segment being retained from the default GL account and all other segments being retained from the invoice distribution Journal source and categories Journal source and categories is used to differentiate journal entries and to enhance your audit trail.Etc. But you can define with your sauce and categories by using the following navigation: GL:Setup->Journal->Source Setup->journal-. Oracle applications provided required source and categories with default.. If we enable account as automatic offset. and the remaining asset information defaults from the asset category. Enter a Description of the asset.Choose Assets > Asset Workbench from the Navigator window.Assets Additions Asset Setup Processes (Additions) Quick Additions Use the Quick Additions process to quickly enter ordinary assets when you must enter them manually. To add an asset quickly accepting default information: 1. . 3. The following screen appears. 2. You can enter minimal information in the Quick Additions window. book. and the date placed in service.Choose Quick Additions from the Find Assets window. Enter the asset Category.4. the functional currency is always the primary functional currency. SQL*Loader supports various load formats. Click on the Done Button. System displays the following Message. and the one you use for legal reporting. The primary functional currency is the currency you use to record transactions and maintain your accounting data within the Oracle E-Business Suite. and is a significant aspect of a globalization strategy. 5. 10. if necessary. While the reporting set of books has the same chart of accounts and accounting calendar as the primary set of books. 9. By using MRC concept we can maintain up to Eight Reporting Set Of Books. Assign the asset to an Employee Name (optional). 8. Select the Asset Type of the asset. Multiple Reporting Currencies The Multiple Reporting Currencies (MRC) is the set of unique feature embedded in Oracle applications. which allows you to report on and maintain accounting at the transaction level in more than one functional currency. you can update them here. and a Location. Assign your asset to a corporate depreciation Book. Optionally update the Date Placed In Service. MRC is based on the Multi-Org Architecture. 7. The depreciation method and prorate convention are defaulted from the category default rules. However. a general ledger depreciation Expense Account. 11. A reporting set of books is a financial reporting entity associated with a primary set of books. see: Asset Descriptive Details 6. the primary functional currency is the currency in which you perform most of your business transactions. Usually. Its syntax is similar to that of the DB2 Load utility. but comes with more options. You must define a separate set of books for each of your reporting functional currencies. Update the depreciation method and prorate convention. selective loading. Enter the current Cost. In the primary set of books. What is SQL*Loader and what is it used for? SQL*Loader is a bulk loader utility used for moving data from external files into the Oracle database. and multi-table loads . For a description of the assets types. its use of a different functional currency (reporting functional currency) allows you to report in a different functional currency than that of your primary set of books. area code. From the below picture you can find the diffrence between purchase orders. account type. account number etc Types Of Purchase Orders Hai Friends. where each segment has both a value and a meaning.” Most organizations use ”codes” made up of meaningful segments to identify general ledger accounts. part numbers. consider an account number for a bank. Each segment of the code can represent a characteristic of the entity. and other business entities.. city code. For example. branch code.. . You can think of a key flexfield as an “intelligent” field that your business can use to store information represented as “codes.key flexfield key flexfield is a field made up of segments. A complete bank number may consists of various segments like the country code. What do you mean by controlling buyers workload? 17. and allocations. such as accruals. What are the types of PO? 10. What is ment by pay on receipt auto invoice? 16. What is ment my PO? 9. Why are expenses items typically accrued at period end. What are the types of receipts? 11. What is the purpose of receiving transactions? 13. What is ment by receipt routing? Types? 14.Purchasing FAQ’s 1. What is the use of defining security hierarchy? 19. What are the types of RFQ”S? 7. Define Requition? 2. What are the types of requitions? 3. What is ment by quatation and quotation analysis? 8. What is ment by receipt routing? 12. What is ment by RFQ? 6. depreciation charges. and why are inventory items always accrued on receipt? Recurring Journals Define recurring journal formulas for transactions that you repeat every accounting period. What is Matching? What are the various methods of matching? 18. . What is the use of auto creat? 15. What is the procedure for qequition import? 5. What is the use of requition template? 4. What is the difference between accrue at period end and accrue on receipt? 20. You can change the status. You cannot .You can use recurring journals to create three types of journal entries: Skeleton Journal Entries: Skeleton journals have varying amounts in each period. Permanently Closed: In this status Journal entry and posting not allowed. For Example: Record monthly lease expenses with constant amounts charged to the same account. Recurring Journal Formula Entries: Formula entries use formulas to calculate journal amounts that vary from period to period. Never Opened: Journal entry and posting are not allowed. You define a recurring journal entry with out amounts. Closed: In this status Journal entry and posting not allowed until accounting period is reopened. For example. calculate commotion to sales representative based on the sales of the month. There are no formulas to enter. and then enter the appropriate amounts each accounting period. Period status in General Ledger Open: In the Open status you can enter and post Journals. or to any period that has been defined. Reporting and inquiry allowed. For example.. Reporting and inquiry allowed. but is not yet future-enterable. you can record temporary labor expenses in the same account combination every month with varying amount due to fluctuations in hours. only account combinations. General Ledger assigns this status to any period preceding the first period ever opened in your calendar. Standard Recurring Journal Entries: Standard recurring journal entries use the same accounts and amounts each period. You cannot change this period status. Your period is not yet open. Use of Distribution set? 13. Types of Prepayments? And difference between them? 22. each with one or more installations and implementations of the Oracle Applications.change this period status. You cannot change this period status without using the concurrent process to open the period.Multiple installations. 3 way and 4 way matching? . Future-Entry: Journal entry is allowed. but falls within the range of future-enterable periods you designated in the Set of Books window. Steps for payment batch? 8. an instance is the combination of background processes and memory structures that allow the user to access data in an Oracle database. instance and database are often used interchangeably. What are the mandatory setups in AP? 5. In an applications context. Purpose of Payable invoice open interface? 9. Multi Currency payments? 11.Multiple databases or instances refer to a scenario in which there may exist numerous databases. Use of automatic offset method? 15. Accounting Methods? 14. What is the program to transfer data from AP to GL? 18. What is the difference between PO default and quick match? 6. Can we implement MRC at Payables? 12. What is meant by with-holding tax invoice? 4. Payable open interface import? (Expense Report Import) 10. How to approve ‘n’ no. What is meant by matching and what are the types of matchings available? 21. Use of recurring invoice? 7. or "installs" means that Oracle Applications are installed multiple times on a single database. and multiple installations? In Oracle database terminology. What is meant by void payments? 19. What are the types of journal categories available in the AP? 20. Accounts Payables Frequently Asked Questions 1. What is Proxima Payment Terms? 26. but posting is not. What is a Hold and Release 23. Which interface tables are used for Invoice Import? 28. What is difference between debit memo and credit memo? 3. What reports should I run before closing the period? 17. What does the Unaccounted Transaction Sweep Report do? 16. What are the tables associated with Invoice? 27. Difference between multiple databases. What are the types of invoices? 2. What is Zero-Payment in AP 25. of invoices 24. multiple instances. What is 2 way. Invoice Approval Process? 44. Period closing Process for Payables Period closing Process for Payables You cannot close a period in Payables if any of the following conditions exist: . Can I find out which invoices are matched to a PO? 45. Payable And Financial options? 41. Tell me steps for Period closing Process in AP? 40. to increase corporate responsibility and the usefulness of corporate financial disclosure. Difference between quick payment and manual payment? 38. Use of Future dated payments? 39. How many key flexfields are there in Payables? 31. Can you cancel the invoice? If yes. What is meant by accrual write off? 37. What is pay date basis? 33. What is Intercompany Invoicing? 46. What is terms date basis? 34. is a United States federal law enacted on July 30. and for other purposes Data Load Data load is the tool to Load data into any application running in Windows. 2002.To improve quality and transparency in financial reporting and independent audits and accounting services for public companies.29. What are the steps to define a Bank? 50. What is the report used to identify duplicate suppliers? 35. to strengthen the independence of firms that audit public companies. also known as the Public Company Accounting Reform and Investor Protection Act of 2002 and commonly called SOx or Sarbox. ERS Invoice means? 47. Difference between header level tax calculation and line level tax calculation? 36. to improve Securities and Exchange Commission resources and oversight. and contains extra functionality for loading data and setup into Oracle Applications. How to transfer funds between your internal banks? 43. Payment Methods? SOX The Sarbanes-Oxley Act of 2002. explain? 32. What is meant by RTS transactions? 49. What is Interest Invoice and how it can be created? 30. Use of Pay on receipt auto invoice? 48. Means we can load data through front end forms. to create a Public Company Accounting Oversight Board. to protect the objectivity and independence of securities analysts. Non technical users can also use this tool. to enhance the standard setting process for accounting practices. What is meant by third party payments? 42. To load data using Data Load you setup Data Load to load into the forms and the forms load the data into your system. Then resubmit the Payables Accounting Process to account for transactions you corrected. If you use future dated payments. o Submit the Unaccounted Transactions Sweep Program. o Payables Accounting Process. 8. o Future dated payments for which the Maturity Date is within the period but that still have a status of Issued. accrue uninvoiced receipts. 6. In the Control Payables Periods window. o Posted Payment Register. Validate all invoices. Transfer invoices and payments to the General Ledger and resolve any problems you see on the output report: o Payables Transfer to General Ledger Program. o Posted Invoice Register. close the period in Payables. run the Mass Additions Create Program transfer capital invoice line distributions from Oracle Payables to Oracle Assets. To complete the close process in Payables: 1. or submit the Unaccounted Transaction Sweep to move any remaining unaccounted transactions from one period to another. This will update the status of matured future dated payments to Negotiable so you can account for them. o Unaccounted transactions. Confirm or cancel all incomplete payment batches.o Outstanding payment batches. Submit the Payables Accounting Process to account for transactions. 2. Reconcile Payables activity for the period. Review the Unaccounted Transactions Report. 9. Confirm or cancel all incomplete payment batches. 5. If you use Oracle Assets. 4. Or move any unresolved accounting transaction exceptions to another period (optional). Submit the Payables Accounting Process to account for all unaccounted transactions. 10. Review any unaccounted transactions and correct data as necessary. submit the Update Matured Future Dated Payment Status Program. 7. 3. Run Invoice Validation Concurrent program. Submit the Payables Transfer to General Ledger process to transfer accounting entries. o Accounted transactions that have not been transferred to general ledger. You will need the following reports: o Accounts Payable Trial Balance Report (this period and last period). . Resolve all unaccounted transactions. If you use Oracle Purchasing. Post journal entries to the general ledger and reconcile the trial balance to the General Ledger. o Controlling the Status of Payables Periods. resulting in increased productivity and reduced training and support.Fewer errors and 8.Lower Costs 7.R12 Features Release12 introduces a better user experience. Examples of a better user experience include: 1.Reduced pop-ups and duplicate screens 2.Improved look & feel and visual style 5.Re-designed and streamlined entire work flows 3.Reduced the number of steps to complete key tasks 4.Stronger Internal Controles Whats New in Release 12 Ledgers and Ledger Sets Legal Entity Configurator Rules-based Accounting Engine Global Tax Engine Global IntercompanySystem Unified Bank Account Model Single Sign-On Across Operating Units .Increased personalization capabilities 6. You receive the goods enter a Goods Received Note (GRN) in Oracle Purchasing. Oracle Purchasing: You prepare a Purchase Order(PO) against the best RFQ to buy the goods from the supplier who quoted the suitable price and sends the PO to that supplier 5. 7. Oracle Inventory:It’s upto you whether you want to receive the goods at your head office or you Inventory directly.Oracle Procure to Pay Life Cycle: Procure to Pay Process flow: -------------------------------------Let’s see the steps involved in performing using Oracle Applications 1. Oracle Purchasing: You prepare a Request for Quotation (RFQ) and send it to different suppliers to get the best and/or economical price for the product. Oracle Payables: After that the supplier sends you the invoice for the purchased goods and you Enter or Match the invoice against the PO from Oracle Purchasing in Oracle Payables. 8. . Oracle Purchasing: You enter Suppliers of different materials and products you want to purchase to manufacture a finished good that your organization plans to sell. Oracle General Ledger: Once you move the goods to Oracle Inventory. it sends the Material Accounting to Oracle General Ledger. 2. 4. Oracle Purchasing: The supplier receives the confirmation of purchase from PO and ships the ordered goods. 3. In either case you move the received goods to your different Raw Material Inventory from Oracle Purchasing to Oracle Inventory and the Item Count increases. 6. Oracle Purchasing:Suppliers sends their quotations and you upload those quotations in Oracle Purchasing to get the best three quotes and further to get the one best quote. Payables Intergration: ------------------------------ Payables Processes: -------------------------- . 12. Oracle General Ledger: The liability is settled. Both OPM or ODM requests the different raw materials from you inventory organizations and manufactures a finished good. Oracle Process Manufacturing(OPM) / Oracle Discrete Manufacturing(ODM): You start the manufacturing of your final product. your expense is recorded.9. 10. Oracle Inventory: As the raw materials are issued to OPM and ODM the inventory sends the issuing material accounting to General Ledger and decreases the Item Count from the Raw Material Store. Oracle General Ledger: When you enter the invoice it means that you have created a Liability against that supplier. Oracle Inventory receives the finished good in Finished Good Store and increase the Item Count. 13. Oracle Payables: You pay the invoice and settle the Liability 11. As the finished good is prepared. You cannot create purchase orders for an RFQ Only site. you can use them when you import/enter invoices and create purchasing documents Define how supplier sites can be used with the following options: • Pay . and you enter supplier sites for each location. However.If a supplier has multiple pay sites. Most supplier information defaults to supplier sites. address. helping to speed the invoice entry process.You can purchase goods or services using a procurement card. • Primary Pay . Also. .You can import/enter invoices for and make payments to the site. you enter header information only once. The primary pay site defaults in the Invoices window. Designate a site as an RFQ Only site during the beginning of negotiations with a supplier. • Primary Pay . telephone) specific to that site. designate the supplier site as a Purchasing site by deselecting the RFQ Only option and selecting the Purchasing Site option.Default pay site for invoice entry and import. Contact information is for your reference only.You can create request for quotations in Purchasing for the site. • RFQ Only . If you decide to use the supplier.Overview of Suppliers: ----------------------------When you enter a supplier that does business from multiple locations. For each supplier site. you can override the values that default if necessary. • Procurement Card . you can enter contact information (name.You can create purchase orders for the site. After you define suppliers. Payables Open Interface Import uses this site when it imports an external invoice with no specified site. one can be designated as the primary. • Purchasing . if payment terms in the Payables Options window are reset to Net 15 from Net 30.Flow of Default Values(P2P): ---------------------------------------- • Defaults set at higher levels flow down to lower levels where you can override them. Existing suppliers will have terms of Net 30. Invoice Entry: -------------------- You can enter invoices through: • Manual entry: Manually enter invoices in the Invoice Gateway and Invoices windows. • Defaults reduce data entry by providing default values based on corporate policy. Note: Changes to default values affect only new records. For example. new suppliers will have a default of Net 15. This table is loaded by many sources including invoices . • Purchase order matched invoices will receive defaults from the purchase order you specify when you match. not existing records. Optional defaults (especially the higher level ones) should be left blank if you frequently override them. • Import: The Payables Open Interface Import program imports invoices from the Payables Open Interfaces table. You can group manually entered and imported invoices in invoice batches. Credit Card invoices: Invoices for employee credit card expenses. in all the case the purchase is made for basic element called Items. • Recurring invoices: You can set up Oracle Payables to generate regularly scheduled invoices such as rent. Inventory Asset Item/Inventory item-PO Related 2. • Matching: You can match most invoices to purchase orders or receipts. Oracle Property Manager invoices: Lease invoices transferred from Oracle Property Manager. Inventory Asset Item/Inventory item-PO Related : ---------------------------------------------------- . such as invoices from legacy systems. Invoices from external systems: Invoices. and Oracle applications that load invoices into the Open Interfaces Table such as Oracle Property Manager and Oracle Assets. • Automatically generated: Oracle Payables automatically generates the following invoice types: withholding ax invoices to pay tax authorities. The credit card company sends you these invoices as a flat file. Oracle Assets lease payments: Lease payments transferred from Oracle Assets. interest invoices.PO Related 3. Inventory Expense Item/Inventory Expenses . loaded using SQL*Loader. Oracle Projects expense reports: Project–related expense reports entered in Oracle Projects. invoices sent by suppliers in EDI or XML formats. EDI invoices: Electronic invoices transferred from Oracle e–Commerce Gateway. There are three types of items: 1.entered online by suppliers in iSupplier Portal. and payment on receipt invoices. Oracle Procure to Pay Accounting: ------------------------------------------As you know “procure to pay” Business Flow start Purchasing requisition till paying to supplier and most important. Invoice import: --------------------Oracle Internet Expenses expense reports: Expense reports your employees enter using a Web browser. Expense item/Non-PO Invoice. Payables expense reports: Expense reports entered in the Payables Expense reports window by the Payables department. Inventory Expense Item/ Expense Item-PO Related: .2. ------------------------------------------------------------- 3. Expenses items/ Non-PO Invoice: . Go to Purchasing Responsibility and follow the below navigation to check for the suitable item. This is a pure functional Stuff and helps you to understand the navigation steps. I tried to keep as simple as Possible for clear understanding.-------------------------------------- Procure To Pay Cycle in Oracle Apps R12 (P2P Cycle) Here in this post. Stage 1: Choosing an Item Let us choose an item to be procured in our example.1. The screenshots given below are taken from R12.1 apps instance. I tried to explain the steps involved in Procure to Pay Cycle. . .The item picked for our example should be purchasable item as above. Stage 2: Creation of Requisition Follow the below Navigation to reach Requisition Form. Click on tools and choose “Categories” to view the below screen. Create a new Requisition for the item viewed in Stage 1. Click on Distributions to View the charge Account. Save and Submit for Approval . For our Example. . Requisition number is: 14855 Stage 3 : Checking the Status of Requisition Query for the Requisition Number and click Find.Now note down the Requisition number and open the “Requisition Summary Form” to view the status of it. please follow the below navigation. To see the approval status.Here for our example purpose. Stage 4 : Creation of Purchase Order . I kept the submitted and approved person has same and hence it shows the status as approved. let us use the “Autocreate Documents” Form.For creating a Purchase order. Follow the below Navigation Query for the Requisition Click on Automatic as shown in the above figure to create a Purchase Order Click on “Create” button to create a Purchase order . View the shipment screen to change the “Match Approval Level” to “2Way”. Click the “Receiving Controls” to make sure that the “Routing” is made as “Direct Routing” . Click Save and submit for Approval. Note down the PO Number. Stage 5: Creation of Receipts . .Query with the Purchase order created in the above stage. Check the check box near to the lines that are received and click save. Stage 6: Checking the On Hand Go to any Inventory Responsibility and follow the below Navigation Query for our Receipt and make sure the Organization is the same as we received. .Click the “Header Button” to view the Receipt Number. Stage 7: Check the Material Transactions Follow the below Navigation to reach “Material Transactions” Form .Below screen will show that our inventory has been increased by 5 quantities. .Query for the item and date as below Below screen shows the source and transaction Type Below screen shows you the Serial Numbers of the items received. Check the status of the program. .Stage 8: Creation of Invoice Navigate to any Purchasing Responsibility and view Requests Submit the below requests by providing the Receipt number as Parameter to create an invoice. Query for the Purchase order as below. Click “Actions” Button then tick the “Validate Check Box” and press “Ok” to validate the invoice .Stage 9: Checking the Invoice Change to any Payables Responsibility and open the invoices Form. Below screenshot will give you the status of the invoice Stage 10: Creation of Accounting and Payment Once invoice got approved. we can “Create Accounting” and “Create Payments” via “Action” Button in the “Invoice Form” as we validated the invoice. . Thus the brief description of P2P cycle came to end.