Procure To Pay Cycle in Oracle Apps R12 (P2P Cycle) Procure To Pay Cycle in Oracle Apps R12 (P2P Cycle) Here in this post, I tried to explain the steps involved in Procure to Pay Cycle. 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. The screenshots given below are taken from R12.1.1 apps instance. Stage 1: Choosing an Item Let us choose an item to be procured in our example. Go to Purchasing Responsibility and follow the below navigation to check for the suitable item. The item picked for our example should be purchasable item as above. Click on tools and choose “Categories” to view the below screen. Stage 2: Creation of Requisition Follow the below Navigation to reach Requisition Form. Create a new Requisition for the item viewed in Stage 1. Click on Distributions to View the charge Account. Save and Submit for Approval Requisition number is: 14855 Stage 3 : Checking the Status of Requisition . For our Example.Now note down the Requisition number and open the “Requisition Summary Form” to view the status of it. Query for the Requisition Number and click Find. . To see the approval status. . I kept the submitted and approved person has same and hence it shows the status as approved. please follow the below navigation.Here for our example purpose. Stage 4 : Creation of Purchase Order For creating a Purchase order. let us use the “Autocreate Documents” Form. 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 “2-Way”. . 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 .Click the “Header Button” to view the Receipt Number. .Query for our Receipt and make sure the Organization is the same as we received. Below screen will show that our inventory has been increased by 5 quantities. . Stage 7: Check the Material Transactions Follow the below Navigation to reach “Material Transactions” Form . Query for the item and date as below . Below screen shows the source and transaction Type . . 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.Below screen shows you the Serial Numbers of the items received. .Check the status of the program. . Query for the Purchase order as below.Stage 9: Checking the Invoice Change to any Payables Responsibility and open the invoices Form. Click “Actions” Button then tick the “Validate Check Box” and press “Ok” to validate the invoice . Below screenshot will give you the status of the invoice . we can “Create Accounting” and “Create Payments” via “Action” Button in the “Invoice Form” as we validated the invoice. Let’s see the steps and Oracle Application involved in performing those steps. But this is not just two steps. 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. 1. changes in 11i and R12 in P2P cycle 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. . It involves many steps.Stage 10: Creation of Accounting and Payment Once invoice got approved. Thus the brief description of P2P cycle came to end. 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. 8. 3. 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 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. 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. Oracle Payables: You pay the invoice and settle the Liability.2. 9. You receive the goods enter aGoods Received Note (GRN) in Oracle Purchasing. As said before. 10. Oracle Payables sends the invoice accounting to Oracle General Ledger. 6. Oracle General Ledger: Once you move the goods to Oracle Inventory. 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 Purchasing: The supplier receives the confirmation of purchase from PO and ships the ordered goods. If the item is Asset Type then it will move to Oracle Assets at the time of Invoice creation in Oracle Payables. . 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. it sends the Material Accounting to Oracle General Ledger. 4. 7. if the item is Asset in nature then it will move to Oracle Asset. 13. Both OPM or ODM requests the different raw materials from your inventory organizations and manufactures a finished good. Once reconciled. Oracle Inventory receives the finished good in Finished Good Store and increase the Item Count. office supplies etc) needed for the enterprise. As the finished good is prepared. Oracle General Ledger: Your cash at bank is updated with actual balance. Oracle Cash Management: As you pay the invoice Oracle Payables sends the payment information to Oracle Cash Management for Bank Reconciliation. 1) Create Requisition 11i Requisition is nothing but a formal request to buy something (like Inventory material. Oracle Process Manufacturing(OPM) / Oracle Discrete Manufacturing(ODM): You start the manufacturing of your final product. Oracle Cash Management sends the updated Bank/Cash accounting entry to Oracle General Ledger. Now the final product is ready to be sold in the market. Only an employee can create one.11. 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. There are two types of requisitions: Internal Requisition: Internal requisitions provide the mechanism for requesting and transferring material from . Oracle General Ledger: The liability is settled and your cash movement account is updated. 15. 12. 14. 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. Purchase requisitions are used for requesting material from suppliers. quantity. And now the Approve button is highlighted. Purchase requisition: Unlike Internal requisitions. specify the Buyer name.one inventory to other inventory. The status will now be updated to In Process . Price details in the Lines tab. . Save the work. Submit this requisition for Approval by clicking on the Approve button. Click the Distributions button. The status of the requisition will now be Incomplete. In Source Details tab. Enter the Charge Account. Navigation: Purchasing Vision Operations (USA) > Requisitions > Requisitions Choose the requisition type and enter the Item. Navigation: Requisitions > Requisition Summary Enter requisition number and click on the find button.At any time the status of requisition can be checked using the Requisition summary window. Underlying Tables: PO_REQUISITION_HEADERS_ALL PO_REQUISITION_LINES_ALL PO_REQ_DISTRIBUTIONS_ALL R12 . 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. . Save and Submit for Approval Check the status of the Requisition.Click on Distributions to View the charge Account. HZ_PARTY_USG_ASSIGNMENTS : This table stores the Party Usages. Here for our example purpose. From R12 onwards supplier have been moved in to the TCA Data Model.Architecture in R12 : Prior to R12 the suppliers information is stored in PO_VENDORS. Note: 1. Operating Unit extra field in the R12 forms due to MOAC. Without changing Responsibility and without closing windows buyers will now be able to view consolidated requisition demand spanning multiple operating units. please follow the below navigation. 4. The Supplier Details in R12 : Many changes were happened in supplier details in R12. 2. I kept the submitted and approved person has same and hence it shows the status as approved. Base tables are same as 11i but more than 15 extra columns in R12 for the table PO_REQUISTION_HEADERS_ALL. Suppliers into TCA . To see the approval status.Query for the Requisition Number and click Find. for the suppliers it captures the fact that the . The operating units that buyers can transact on behalf of will be controlled by the security profile associated with their responsibilities. for example. 3. PO_REQUISTION_LINES_ALL and PO_REQ_DISTRIBUTIONS_ALL for tax etc. HZ_PARTIES : This is the master table for suppliers. given party_id is of type SUPPLIER. Similarly. and Tax Accounts etc have been moved from AP into ZX. Who bears the bank charges when lets say SWIFT payment is made? Note : This information can be set up at the supplier level or supplier site level. for example. 2) Create Purchase Order 11i There are 4 types of Purchase Orders: .VENDOR_ID and HZ_PARTIES. that joins AP_SUPPLIERS & HZ_PARTIES. ZX_PARTY_TAX_PROFILE : The taxation related details like Tax Codes. PO_VENDOR_SITES and PO_VENDOR_SITES_ALL are also views based upon AP_SUPPLIER_SITES_ALL. It stores the supplier specific attributes. This is useful in cases whereby two vendors effectively belong the same HZ_Party Record. Like how should the supplier's remittance advice must be sent. HZ_ORGANIZATION_PROFILES : This table captures additional Supplier information.PARTY_ID. PO_VENDORS : PO_VENDORS is a view in R12. POS_SUPPLIER_MAPPINGS : This table holds the mapping between the AP_SUPPLIERS. IBY_EXTERNAL_PAYEES_ALL : It captures payment related details of the supplier. AP_SUPPLIERS : This is another master table that replaces the PO_VENDORS table. credit scoring details of Supplier or the Number of Employees working in Supplier Organization. ZX is the name of a new Application "E-Business Tax". default Payment method Code for this supplier. . but you do not know the detail of your delivery schedules. RFQs. Planned PO: A Planned PO is a longterm agreement committing to buy items or services from a single source. Click Shipments button to enter multiple shipments for standard and planned purchase order lines Purchase order shipment specifies the quantity. Click Terms to enter terms. Standard PO: A Standard PO is created for onetime purchase of various items 2. and quotations. Purchasing creates distributions depending on the default information available. You must specify tentative delivery schedules and all details for goods or services that you want to buy. line type. Item. 4. price etc. Enter the Supplier. conditions. and estimated cost. including charge account. and control information for purchase orders. In the Lines tab. 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. date you want your supplier to deliver the items on a purchase order line.1. Buyer. and country of origin for the items. 3. Click Currency button to enter and change currency information for purchase orders. specify the line number. 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. quantities. When you save. shipto organization and location. quantity. and invoice quantities must match within tolerance before the corresponding invoice can be paid.To enter more shipment information. receipt. Click the Receiving Controls button to enter receiving control information for purchase orders. receipt. Invoice Close Tolerance percent to set the receiving and invoice close point. select the More tab. Select an Invoice Match Option: Purchase Order: Payables must match the invoice to the purchase order. -Enter the maximum acceptable over receipt Tolerance percent (receipts that exceed the quantity received tolerance). 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. ThreeWay: Purchase order. Receipt: Payables must match the invoice to the receipt. 1. Enter the Receipt Close Tolerance percent. accepted. 1. and invoice quantities must match within tolerance before the corresponding invoice can be paid. -Enter the Action for Over receipt Quantity. 2. -Enter the maximum acceptable number of Days Early and Days Late for receipts. . FourWay: Purchase order. Save the work. -Enter the Action for receipt date control. Click Distributions button to enter distributions for the shipments. Save the work. 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. 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) PO_LINE_LOCATIONS_ALL R12 . -Enter the default Receipt Routing that you assign goods: Direct Delivery. Click on the Approve button to initiate the Approval process. Select more tab to enter more details and the requisition number (optional).-Select Allow Substitute Receipts to indicate that receivers can receive substitute items in place of ordered items. 0 allows finer control of how blanket agreements are enabled for automatic document sourcing. Follow the below Navigation and Query for the Requisition. Click the “Receiving Controls” to make sure that the “Routing” is made as “Direct Routing” Click Save and submit for Approval. 3. Note down the PO number. Note: 1. 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 “2-Way”. With Release 12. In Release 11i10 generation of purchasing documents in Adobe PDF format required organizations to create layout templates in the form of XSL-FO style sheets. Base tables are same as 11i but few extra columns. 2. Release 12.0 organizations can also use RTF or PDF layout templates which require little training to configure and maintain.For creating a Purchase order. Buyers can now choose to enable them only in specific inventory organizations. let us use the “Autocreate Documents” Form. . Click the “Header Button” to view the Receipt Number. Check the check box near to the lines that are received and click save. Click on Header button and Save which creates the receipt.(8457) . check the lines you want to receive in the PO. Now can check the Inventory in the same subinventory for the item's on-hand quantity. Receipt Tables are: RCV_SHIPMENT_HEADERS RCV_SHIPMENT_LINES (Lines Table has PO_HEADER_ID) R12 Navigate to RECEIVING-->RECEIPTS Query with the Purchase order created in the above stage. Navigation: Receiving--Receipts Enter the PO Number and select find button.3) Create Receipt 11i Create a receipt to receive the items in the Purchase Order. Go to Lines. 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.Note: 1) Base tables are same as in 11i but few extra columns. Enter the PO Number you want match to and click Find. 4) Create Invoice in Payables 11i Once the goods are received. 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. . supplier information and amount. its time to pay the vendor for the goods purchased and hence the invoices are created. Vision Operations (USA) > InvoicesEntryInvoices Enter type --Standard. Select the lines required and click on Match button. Click on Distribute button to navigate to the Match to Purchase Order Distributions window. Navigation: Payables. if there are no issues during validation. we have seen invoices: .Validating the Invoice: Click on Actions Button and Select Validate. debit memo. Click on OK button. credit memo and do payments for the suppliers. Create Accounting Entries: Click on Actions Button and Select Create Accounting. The information regarding these invoices are stored into ap_invoices_all and also in in to ap_invoice_lines_all Till 11i version. 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 R12 Payables : Creating invoices. Now you can see the status of the invoice as Validated. Click on OK button. Invoice distributions created at the maximum level of detail similar to 11i.Tax line Payment . But in R12 .Asset Tracking Business Tax .Payment SubLedger Accounting – Accounting Navigate to any Purchasing Responsibility and view -->Requests Submit the below requests by providing the Receipt number as Parameter to create an invoice. (pay on receipt auto invoice). 1. Allocate freight and special charges are captured to the lines on the invoice 3. Invoice Lines as a new additional line accommodated in Invoice data model. . Checking the Invoice Change to any Payables Responsibility and open the invoices Form. • • • • Check the status of the program. Because of introduction of invoice lines there is significant improvement of data flow with n other oracle modules Fixed Asset . Allocation of freight and special charges are captured at the distribution level only Tax and payment and Project accounting Payment was captured through global Descriptive Flexfields. 2. Query for the Purchase order as below.• • • Had only distributions line. You would see Amount paid as 0. when you query for the invoice in Invoice window. . 5) Making a Payment 11i Go to the Invoice window and query the invoice you want to pay.000. Save the Work. An invoice line represents goods (direct or indirect materials). Select the bank account and Document. generated automatically or imported from the Open Interface tables. AP_INVOICE_LINES_ALL holds invoice lines records entered manually.00 before you make a payment. Click Actions button. Creation of Accounting and Payment Once invoice got approved. Create Accounting entries for payment. Now that the payment is made.Click “Actions” Button then tick the “Validate Check Box” and press “Ok” to validate the invoice and will change the status of invoice.00. service(s). Note: 1. click actions so that we can “Create Accounting” and “Create Payments” via “Action” Button in the “Invoice Form” as we validated the invoice. Select Pay in full and click OK. you will the Amount Paid as $4. An invoice can have one or more invoice lines and an invoice line can have one or more invoice distributions. and/or associated tax/freight/miscellaneous charges invoiced from a supplier. Click Actions and select Create Accounting. Select the void checkbox to cancel the payment. Supplier (party’s) payment information and all payment instruments (Bank Accounts. Suppliers. Base tables are same as 11i but Suppliers Bank Accounts 11i 1. Bank accounts often replicated in multiple OUs Before R12 1. View Accounting Entries: In the Payments window. Banks and Branches are defined as Parties in TCA 2. query for the payment. click actions so that we can “Create Accounting” and “Create Payments” via “Action” Button in the “Invoice Form” as we validated the invoice. 3. Credit Cards) moved into Oracle Payments. Banks/Branches defined in AP 2. Refer to the article Make AP Payments through R12 Once invoice got approved. 6) Transfer to General Ledger . Note: 1. 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. 11i Navigation: Payables Responsibility > View Requests Run the concurrent program Payables Transfer to General Ledger with the required parameters. Enter one of the following Selection Criteria: No Group ID: To import all data for that source that has no group ID. run the Journal Import program from Oracle General Ledger. Choose Create Summary Journals to have journal import create the following: • one journal line for all transactions that share the same account. Use this option to import multiple journal batches for the same source with varying group IDs. Define the Journal Import Run Options (optional) Choose Post Errors to Suspense if you have suspense posting enabled for your set of books to post the difference resulting from any unbalanced journals to your suspense account. period. and currency and that has a credit balance. Choose a specific group ID from the List of Values for the Specific Value field. If you do not specify a Group ID. • • • Journal Import:To transfer the data from General Ledger Interface table to General Ledger. period. Navigation: General Ledger > Journal> Import> Run Parameters: Select the appropriate Source. and currency and that has a debit balance • one journal line for all transactions that share the same account. . Specific Group ID: To import data for a specific source/group ID combination. where the Group_ID is null. Use this option if you specified a NULL group ID for this source. General Ledger imports all data from the specified journal entry source. All Group IDs: To import all data for that source that has a group ID. you can create accounting in Final or Draft mode and if Final mode is selected. Note: . If there is accounting created by the online option = Final or a previous Create Accounting program that was not transferred.• • Enter a Date Range to have General Ledger import only journals with accounting dates in that range. and whether to import them with validation. that accounting will not be transferred. the Transfer to GL parameter can be used to automatically transfer the accounting created by the corresponding run. If you do not specify a date range. Click on Import button.. The Transfer Journal Entries to GL program needs to be ran separately to transfer any accounting created online or created by a previous Create Accounting process that did not transfer the entries.. Choose whether to Import Descriptive Flexfields.etc The Create Accounting process has similar options. Mode= Final Post in GL = yes. General Ledger imports all journals data. When the Create Accounting process transfers the journal entries to GL it only transfers the accounting created by the process that calls it. Navigation: General Ledger> Journals > Enter Query for the unposted journals for a specific period If you know the batch name to be posted you can directly post using the Post window Navigation: General Ledger> Journals> Post R12 Navigation: Payables Responsibility > View -->Requests Run the concurrent program "create accounting" with the required parameters.. Posting: We have to Post journal batches that we have imported previously to update the account balances in General Ledger. No manual journal is required. especially if you have altered your subledger accounting rules. You can still reconcile transaction reports to accounting reports.1. 3. In the accounting reports in Release 11i you’d see the balances but not the transactional information. The Sub-Ledger Accounting ( SLA ) Flow Chart in R12 . 2. The new accounting reports in Release 12 now also contain more comprehensive information not just on balances but also on suppliers. customers and transactions. RECONCILIATION CASH MANAGEMENT-DIFFERENCE BETWEEN 11i AND R12. The create accounting program and Transfer to GL program will transfer the write off journals automatically to General Ledger.The point to note is that when you do account balance reconciliation you should ignore distributions in Release 12. In Release 11i you reconciled your transactions and distributions to General Ledger through transactional reports. From a reconciliation perspective the picture above shows what’s changes between R11i and R12. In R12 the adjustment in GL is automated. In Release 12 there is no reason to reconcile distributions on transactions to General Ledger. . There is a one-to-many relationship between accounting events and journal entry headers. XLA_AE_LINES : Stores Journal entry lines XLA_DISTRIBUTION_LINKS : Links b/w transactions and sub-ledger journal entries.Some of the SLA TABLES : XLA_AE_HEADERS : stores subledger journal entries.