PROCURE TO PAY CYCLE

What Is Procuring?

Procure Means Purchasing

Purchasing Module Is A Multi Org Module. So All The Tables In Purchasing Ends
With _All.

The Purchasing Information Or Purchasing And Buying The Goods We Can Do In

The Purchasing Module.

Pre Requisites:

1. Multi Org Set Up or MOAC Setup

2. Supplier Set Up
3. Buyer Set Up
4. Item Set Up
5. Choosing Set Of Book OR Ledger

Once The Setup Is Completed Now We Are Ready To Go To The Procure To Pay
Cycle

The Flow Of The P2P Is

Requisiti RFQ Quotation Quote Purchas Receip Create Posting in to

on Analysis e order ts invoice general ledger

Requisition: Requisition Is Nothing But A Formal Request For The Goods And
Services

Based On The Requirement Manufacturing Manager Or Inventory Manager Will

Create The Purchase Requisition To Purchase Department.
We Are Having 2 Types Of Requisitions.

1. Internal Requisition

2. Purchase Requisition

Internal Requisition(This Requisition Always Deals With In The

Organization.)
 A Requisition From The Purchasing System That Will Directly Result In The
Generation Of A Sales Order In The Order Management System Through
The Order Import Process In Order Management.

Purchase Requisition(This Requisition Directly Deal With Supplier.)

 The Purchase Requisition Is The Procedural Method By Which Different
Departments Of Organization May Request The Purchase Of Good.

Purchase Requisition Will Be Approved Based On The Approval Hierarchy In The

Company.
Once Purchase Requisition Is Get Approved These Following Base Tables Are Get
Populated.

PO_REQUISITION_HEADERS_ALL
PO_REQUISITION_LINES_ALL
PO_REQ_DISTRIBUTIONS_ALL

Based On The Requisition Purchase Department People Will Send The RFQ To All
The Suppliers.

RFQ : RFQ Is Nothing But Request For Quotation.

There Are 3 Types Of RFQ S Are There

1. Bid RFQ
2. Catalog RFQ
3. Standard RFQ

Quotation : A Quotation Is The Supplier’s Response To That RFQ.

There Are 3 Types of Quotations Are There
 1. Bid Quotation
2. Catalog Quotation
3. Standard Quotation

There Are Three Types of Quotations and RFQ’S That Come With Purchasing By
Default:

Bid: Used For A Specific, Fixed Quantity, Location, And Date. For Example, A Bid
Would Be Used For A Large Or Expensive Piece Of Equipment That You’ve
Never Ordered Before, Or For An Item That Incurs Transportation Or Other Special
Costs. You Cannot Specify Price Breaks For A Bid Quotation Or RFQ.

Standard: Used For Items You’ll Need Only Once Or Not Very Often, But Not
Necessarily For A Specific, Fixed Quantity, Location, And Date. For Example, You
Could Use A Catalog Quotation Or RFQ For Office Supplies, But Use A Standard
Quotation Or RFQ For A Special Type Of Pen You Don’t Order Very Often. A
Standard.

Quotation Or RFQ Also Includes Price Breaks At Different Quantity Levels.

Catalog: Used For High–Volume Items Or Items For Which Your Supplier Sends
You Information Regularly. A Catalog Quotation Or RFQ Also Includes Price Breaks
At Different Quantity Levels.

The Quotation And The RFQ Both Stored In Same Tables

PO_HEADERS_ALL

PO_LINES_ALL

with Type_lookup_code=’RFQ’

and Type_lookup_code=’QUOTATION’

Once Quotations Are Received From The Supplier Purchase Department People
Will Do The Quote Analysis And They Will Select The Best Quotation.
Once Quotation Is Selected Then Purchase Department People Will Create The
Purchase Orders And The Purchase Order Get Approved Based On The Approval
Hierarchy.

While Creation Of Purchase Order Based On The Goods And Services We Have To
Select Receipt Routings And Matching Levels.

Receipt Routing: The Way Of Receiving The Goods And Services To The Inventory
Organization.

There Are 3 Types Of Routings Are There

1. Direct Receipt
2. Standard

3. Inspection Requires

Direct Receipt: Without Checking And Without Counting The Material Directly
Dump In To The Main Inventory.

Diagram

Standard Receipt: Before Dump Into Main Inventory Org First It Will Dump In To
Staging Inventory And Count The Material And Lastly Dump In To Main Inventory.

Diagram

Inspection Requires: Before Dump Into Main Inventory Org First It Will Dump In To
Staging Inventory And Count The Material And Check The Goods Whether
Working Properly Or Not And Lastly Dump In To Main Inventory.

Diagram

Now The Matching Levels:

There Are 3 Types Of Matching Levels Are There.

> 2-Way

> 3-Way
> 4-Way

2-Way: In 2 Way Matching Purchase Order Quantity And The Amount Should Be
Match With Invoice Quantity And Amount.

 If We Select The Matching As 2-Way ,Receipt Routing Is Direct.

3-Way: In 3 Way Matching Received Quantity Or Receipts And Amount Match

With Invoice Quantity And Amount.

 If We Select The Matching As 3 Way, Receipt Routing Is Standard.

4-Way: In 4 Way Matching Invoice Quantity And Amount Match With Accepted
Quantity Or Inspected Quantity And Amount.

 If We Select The Matching As 4 Way, Receipt Routing Is Inspection.

Ex:

Po Qty*Price = Invoice Qty + Am Here We Pay For Order Qty

Laptops(1000)*20000 20000000

Received(900) Here We Pay For Received Qty

900*20000=18000000 = 20000000

Here We Pay For Accepted Qty

Working(800)

800*20000=16000000 = 20000000
We Have 4 Types Of Purchase Orders Are There.

1. STANADRD PURCHASE ORDER: Standard Po S Are Created For One Time

Purchase Of VariousItems. We Create Standard Pos When We Know The Details Of
Goods And Services,Quantities &Delivery Schedules.

2. BLANKET PURCHASE ORDER: When We Know The Details Of Goods And

Services We Plan To Buy From Specific Supplier In A Period.But We Don’t Know
The Delivery Schedules. Using Blanket Purchase Order Agreements We Can
Specify Negosiated Prices For The Items.

BLANKET RELEASE: Against Blanket Po We Have To Crete Blanket Release.In This

We Have To Specify Item Quantity And Delivery Schedules And Discount

3. CONTRACT PURCHASE ORDER: If We Create The Contract Purchase Agreements

With Supplier To Agree On Specific Terms And Conditions Without Indicating
Goods And Services.

Against Contract Purchase Order Agreement We Have To Create Standard

Purchase Orders.In The Standard Purchase We Have To Specify Goods And
Services

4. PLANNED PURCHASE ORDER: A Planned Po Is A Long Term Agreement

Commiting To Buy Goods And Services By Single Source.We Have To Specify
Delivery Schedules And Details Of Goods And Services In The Planned Purchase
Order

Against Planned Pos We Have To Create Schedules Releases.

Once Purchase Order Is Get Approved These Following Base Tables Are Populated.

PO_HEADERS_ALL

PO_LINES_ALL

PO_DISTRIBUTIONS_ALL

PO_LINE_LOCATIONS_ALL

The Releases Information We Can Find Out In The

PO_RELEASES_ALL table

While Receiving The Goods To The Inventory Org In The Back End Two Interfaces
Will Run.

1. Material Transaction Interface

2. Receiving Open Interface

The Purchase Order Is Approved Now The Receipt Part Will Be Coming To The
Picture.

Here The Following Base Tables Are Get Populated.

RCV_SHIPMENT_HEADERS

RCV_SHIPMENT_LINES

RCV_TRANSACTON

MTL_ONHAND_QUANTITIES_DETAIL

MTL_MATERIAL_TRANSACTIONS

Now We Are Going To Create The Invoices. Here The Account Payables Will
Coming To The Picture.

Invoce:Invoice Is Nothing But Payment.

Types Of Invoices

1. Standard Invoice

2. Credit Memo

3. Debit Memo

4. Expense Report

5. Po Default

6. Pre Payment
7. Quick Match

8. With Holding Tax

9. Mix

10.Recurring

Standard: An Invoice From A Supplier Representing An Amount Due For

Goods Or Services Purchased (Standard Invoices Can Be
Matched To Either A PO Or Receipt, Or Not Matched)

Credit Memo: A Memo From A Supplier Representing A Credit Amount

Toward Goods Or Services For Which You Have Already Been
Invoiced
Debit Memo: An Invoice You Enter To Record A Credit For A Supplier Who
Does Not Send You A Credit Memo
Expense Report: An Invoice Representing An Amount Due To An Employee For
Business-Related Expenses
PO Default: We Will Give The PO Number As Per The PO Amount
Invoice Will Be Generated.

Prepayment: A Type Of Invoice You Enter To Pay An Advance Payment For

Expenses To A Supplier Or Employee

Quick Match We Will Match The Invoice Either With PO Or Invoice With
Invoice: Receipt, As The Matching Payments Will Be Done.

Withholding Tax This Is The Invoice Created On An Original Invoice To

Invoices: Withhold Certain Amount From The Original Invoice And Pay
This Amount To A 3rd Party (Usually Government) Later.

Mixed Type For Company Miscellaneous Expenses We Will

Invoice: Create Mixed Type.
Once The Invoice Is Validated The Following Base Tables Are Get
Populated

AP_INVOICES_ALL

AP_INVOICE_LINES_ALL

AP_INVOICE_DISTRIBUTIONS_ALL

The Accounting Tables As Per 11.5.10

AP_AE_HEADERS

AP_AE_LINES

The Accounting Tables As Per R12

XLA_AE_HEADERS

XLA_AE_LINES

Payment Table

 AP_INVOICE_PAYMENTS_ALL
 AP_INV_SELECTION_CRITERIA_ALL
 AP_CHECKS_ALL

Accounting Table

 AP_ACCOUNTING_EVENTS
 AP_AE_HEADERS_ALL
 AP_AE_LINS_ALL

Payment terms table

 AP_TERMS
 AP_TRMS_LINE

Hold_Tables
  AP_HOLDS_ALL
 AP_HOLD_LINES
 AP_REALEASE

Tolerance table

 AP_TOLRANCE.

Reporting Table

 AP_REPORTING_NTITIES
 AP_REPORTING_ENTITIES_LINES

Distribution Set Table

 AP_DISTRIBUTION_SETS
 AP_DISTRIBUTION_SET_LINES_ALL

Bank table

 AP_BANNKS_BRANCHES_ALL
 AP_BANK_ACCOUNTS_ALL
 AP_BANK_ACCOUNT_USES_ALL

Once Invoice Get Approved The Information Will Be Moved To The

General Ledger. Then The Following Base Tables Are Get
Populated

The Base Tables Are

GL_JE_HEADERS

GL_JE_LINES
GL_CODE_COMBINATIONS

GL_JE_CATEGORIES

GL_JE_SOURCES