Procure to Pay Life Cycle OverviewPrepared by:- Senthil Kumar Kaliyamurthy FUJITSU CONSULTING 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 FUJITSU CONSULTING Overview of Application Integration The following Applications Integrated Purchasing Payables Assets General Ledger Inventory Order Management FUJITSU CONSULTING 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. FUJITSU CONSULTING 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. ` FUJITSU CONSULTING Procure to Pay Lifecycle Requisitions Catalog Content Purchase Orders Ordering RFQs/ Quotations Receiving Sourcing Analysis Invoice/ Payment Supplier management Supplier Performance Reporting FUJITSU CONSULTING Demand Source Purchase requisition Request for quote (RFQ) Supplier Quotation Receive Order Inventory Invoice Payment Purchase order Receipts Inventory Invoice Payment Transfer to General Ledger FUJITSU CONSULTING 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 Method of Purchase Order Types of Purchase Order Manual Creation 1. Standard Purchase Order Search approved requisition and them to PO 2. Planned Purchase Order 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 FUJITSU CONSULTING 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. FUJITSU CONSULTING 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 INVOICE QTY --- PO QTY, RECEIVED QTY, INSPECTED QTY WITH FUJITSU CONSULTING 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. 3. 4. 5. 6. 7. 8. 9. Match the Invoice with Purchase Order. Schedule the payment. Approve the Invoice Validate the Invoice Create accounting Entries Pay the Invoice as per schedule. Transfer the Accounting entries to GL. Payments are integrated with Cash Management. 10. Reconcile the payment with bank statement. FUJITSU CONSULTING Create an Requisition (N) Requisition Requisition. Base Table: PO_REQUISITIONS_HEADERS_ALL (requisition_header_id) Stored all Requisition header information. FUJITSU CONSULTING Base Table: PO_REQUISITIONS_LINES_ALL (requisition_lines_id) Stored in requisition Lines Information. FUJITSU CONSULTING FUJITSU CONSULTING Query the Requisition from Requisition Summary Window (N)Requisition Requisition Summary. FUJITSU CONSULTING Create an Requisition For Quote. (N) RFQ’s and Quotation RFQ’s FUJITSU CONSULTING (N) RFQ’s and Qu`otation RFQ’s (B) Currency FUJITSU CONSULTING (N) RFQ’s and Quotation RFQ’s (B) Terms FUJITSU CONSULTING (N) RFQ’s and Quotation RFQ’s (B) Price Breaks FUJITSU CONSULTING (N) RFQ’s and Quotation RFQ’s (T) More FUJITSU CONSULTING (N) RFQ’s and Quotation RFQ’s (T) Supplier FUJITSU CONSULTING Create an Quotation. (N) RFQ’s and Quotation Quotation. FUJITSU CONSULTING Create an Purchase Order. (N) Purchase Order Purchase Order FUJITSU CONSULTING (N) Purchase Order Purchase Order (B) Catalog FUJITSU CONSULTING (B) Currency FUJITSU CONSULTING (B) Terms and Condition FUJITSU CONSULTING (B) Shipments (T) Shipments FUJITSU CONSULTING (T) More FUJITSU CONSULTING (T) Status FUJITSU CONSULTING (B) Receiving Controls FUJITSU CONSULTING (T) Distributions FUJITSU CONSULTING Approve the Purchase Order (B) Approve FUJITSU CONSULTING 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) FUJITSU CONSULTING Receiving the Material (N) Receiving Receipt Choose Your Inventory Organization FUJITSU CONSULTING Enter Your Purchase Order and item FUJITSU CONSULTING Choose the New Receipt and Save your work FUJITSU CONSULTING FUJITSU CONSULTING FUJITSU CONSULTING FUJITSU CONSULTING FUJITSU CONSULTING Responsibility: Inventory, Vision Operation: (N) On-hand, Availability On-hand Quantity Choose your Inventory Organization FUJITSU CONSULTING Give your Item in Item field FUJITSU CONSULTING Check your On- hand Quantity Is Increased FUJITSU CONSULTING Responsibility: Payables, Vision operations (USA) (N) Invoice Entry Invoice Select Po Default Invoice Type FUJITSU CONSULTING Match the Invoice in PO. (N) Invoice Entry Invoice (B) Match FUJITSU CONSULTING Enable the Match Check Box (B) Distribute the Po Lines in the Invoice Line FUJITSU CONSULTING (N) Invoice Entry Invoice (B) Action Select the Validate Validation of Invoice FUJITSU CONSULTING Accounting Entries (M) Tool View Accounting Base Tables: AP_INVOICE_ALL AP_DISTRIBUTION_ALL FUJITSU CONSULTING Payment to Invoice (N) Invoice Entry Invoice FUJITSU CONSULTING Payment to the Invoice FUJITSU CONSULTING (N) Invoice Entry Invoice FUJITSU CONSULTING Account the Payment FUJITSU CONSULTING Base Tables: AP_CHECK_ALL FUJITSU CONSULTING PAYMENT ACCOUNTING ENTRIES (M) Tools View Accounting FUJITSU CONSULTING FUJITSU CONSULTING Payables Transfer to General Ledger Run the Request: Payables Transfers to General Leder FUJITSU CONSULTING FUJITSU CONSULTING Payables Transfer to GL Report FUJITSU CONSULTING Journal Import Execution Report FUJITSU CONSULTING Responsibilities: General Ledger, Vision Super user (N) Journal Enter Review the Journal Batch FUJITSU CONSULTING Review the Journal Batch FUJITSU CONSULTING Post the Journal Batch FUJITSU CONSULTING Review the Posted Journals FUJITSU CONSULTING Base Tables: GL_JE_HEADERS GL_JE_LINES GL_JE_BATCHES FUJITSU CONSULTING Responsibility: Cash Management, Vision Operation (USA) (N) Bank Statement Manual Clearing Clear Transations Manual Clearing for Payment FUJITSU CONSULTING FUJITSU CONSULTING FUJITSU CONSULTING FUJITSU CONSULTING FUJITSU CONSULTING FUJITSU CONSULTING FUJITSU CONSULTING