Procure to PayFirst 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. Show
Now the final product is ready to be sold in the market. 1) Create Requisition 11i Requisition is nothing but a formal request to buy something (like Inventory material, office supplies etc) needed for the enterprise. Only an employee can create one. There are two types of requisitions: Internal Requisition: Internal requisitions provide the mechanism for requesting and transferring material from one inventory to other inventory. Purchase requisition: Unlike Internal requisitions, Purchase requisitions are used for requesting material from suppliers. Navigation: Purchasing Vision Operations (USA) > Requisitions > Requisitions Choose the requisition type and enter the Item, quantity, Price details in the Lines tab. In Source Details tab, specify the Buyer name. Click the Distributions button. Enter the Charge Account. Save the work. The status of the requisition will now be Incomplete. And now the Approve button is highlighted. The requisition needs to be approved first before proceeding further by the concerned authority. Submit this requisition for Approval by clicking on the Approve button. The status will now be updated to In Process .The workflow then will send an Approval notification to the concerned person (derived based on hierarchy used Position or Supervisor hierarchy) using which he can Approve or Reject the requisition. At any time the status of requisition can be checked using the Requisition summary window. Navigation: Requisitions > Requisition Summary Enter requisition number and click on the find button. We can also check the Action History of requisition (it will show details about who has submitted, approved and cancelled the requisitions) as below: Navigation: Tools menu > Action History. Underlying Tables: PO_REQUISITION_HEADERS_ALL PO_REQUISITION_LINES_ALL PO_REQ_DISTRIBUTIONS_ALL R12 Click on Distributions to View the charge Account. Save and Submit for Approval Check the status of the Requisition. Query for the Requisition Number and click Find. Here for our example purpose, I kept the submitted and approved person has same and hence it shows the status as approved. To see the approval status, please follow the below navigation. Note:
The Supplier Details in R12 : Many changes were happened in supplier details in R12. Suppliers into TCA - Architecture in R12 : Prior to R12 the suppliers information is stored in PO_VENDORS. From R12 onwards supplier have been moved in to the TCA Data Model. HZ_PARTIES : This is the master table for suppliers. HZ_PARTY_USG_ASSIGNMENTS
: This table stores the Party Usages, for example, for the suppliers it captures the fact that the given party_id is of type SUPPLIER. IBY_EXTERNAL_PAYEES_ALL : It captures payment related details of the supplier. Like how should the supplier's remittance advice must be sent, default Payment method Code for this supplier, 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. AP_SUPPLIERS : This is another master table that replaces the PO_VENDORS table. It stores the supplier specific attributes. POS_SUPPLIER_MAPPINGS : This table holds the mapping between the AP_SUPPLIERS.VENDOR_ID and HZ_PARTIES.PARTY_ID. ZX_PARTY_TAX_PROFILE : The taxation related details like Tax Codes, and Tax Accounts etc have been moved
from AP into ZX. PO_VENDORS : PO_VENDORS is a view in R12, that joins AP_SUPPLIERS & HZ_PARTIES. 2) Create Purchase Order 11i There are 4 types of Purchase Orders: 1. Standard PO: A Standard PO is created for onetime purchase of various items 2. Planned PO: A Planned PO is a longterm agreement committing to buy items or services from a single source. You must specify tentative delivery schedules and all details for goods or services that you want to buy, including charge account, quantities, and estimated cost. 3. Blanket agreement: A Blanket PO is created when you know the detail of the goods or services you plan to buy from a specific supplier in a period, but you do not know the detail of your delivery schedules. 4. Contract agreement: Contract purchase agreements are created with your suppliers to agree on specific terms and conditions without indicating the goods and services that you will be purchasing Navigation for creating a standard PO: Purchase Orders > Purchase Orders Choose type as Standard Purchase Order. Enter the Supplier, Buyer. In the Lines tab, specify the line number, line type, Item, quantity, price etc. Click Terms to enter terms, conditions, and control information for purchase orders. Click Currencybutton to enter and change currency information for purchase orders, RFQs, and quotations. Click Shipments button to enter multiple shipments for standard and planned purchase order lines Purchase order shipment specifies the quantity, shipto organization and location, date you want your supplier to deliver the items on a purchase order line, and country of origin for the items. When you save, Purchasing creates distributions depending on the default information available. To enter more shipment information, select the More tab. 1. Enter the Receipt Close Tolerance percent, Invoice Close Tolerance percent to set the receiving and invoice close point. 2. 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, and invoice quantities must match within tolerance before the corresponding invoice can be paid. FourWay: Purchase order, receipt, accepted, and invoice quantities must match within tolerance before the corresponding invoice can be paid. 1. Select an Invoice Match Option: Purchase Order: Payables must match the invoice to the purchase order. Receipt: Payables must match the invoice to the receipt. Save the work. Click the Receiving Controls button to enter receiving control information for purchase orders. -Enter the maximum acceptable number of Days Early and Days Late for receipts. -Enter the Action for receipt date control. -Enter the maximum acceptable overreceipt Tolerance percent (receipts that exceed the quantity received tolerance). -Enter the Action for Overreceipt Quantity. -Select Allow Substitute Receipts to indicate that receivers can receive substitute items in place of ordered items. -Enter the default Receipt Routing that you assign goods: Direct Delivery, Inspection Required, or Standard Receipt. -Enter the Enforce Ship To location option to determine whether the receiving location must be the same as the shipto location. Save the work. Click Distributions button to enter distributions for the shipments. Select more tab to enter more details and the requisition number (optional). Save the work. Click on the Approve button to initiate the Approval process. Underlying Tables: PO_HEADERS_ALL PO_LINES_ALL PO_DISTRIBUTIONS_ALL (REQ_HEADER_REFERENCE_NUM in Distributions table is the Requisition number for this PO) PO_LINE_LOCATIONS_ALL R12 For creating a Purchase order, let us use the “Autocreate Documents” Form. Follow the below Navigation and 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. Note:
3) Create Receipt 11i Create a receipt to receive the items in the Purchase Order. Navigation: Receiving--Receipts Enter the PO Number and select find button. Go to Lines, check the lines you want to receive in the PO. Click on Header button and Save which creates the receipt. 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. Check the check box near to the lines that are received and click save. Click the “Header Button” to view the Receipt Number.(8457) Note: 1) Base tables are same as in 11i but few extra columns. 4) Create Invoice in Payables 11i Once the goods are received, its time to pay the vendor for the goods purchased and hence the invoices are created. Navigation: Payables, Vision Operations (USA) > InvoicesEntryInvoices Enter type --Standard, supplier information and amount. Click the Match button to match to either Purchase Order or Receipt (depending on the Invoice Match option specified on the PO) and avoid manually entering the invoice. Enter the PO Number you want match to and click Find. Select the lines required and click on Match button. Click on Distribute button to navigate to the Match to Purchase Order Distributions window. This creates the invoice and you can see the status of the invoice as Never Validated. it has to be Validated and Accounted before you can pay it. Validating the Invoice: Click on Actions Button and Select Validate. Click on OK button. Now you can see the status of the invoice as Validated, if there are no issues during validation. Create Accounting Entries: Click on Actions Button and Select Create Accounting. Click on OK button. 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, debit memo, credit memo and do payments for the suppliers. The information regarding these invoices are stored into ap_invoices_all and also in in to ap_invoice_lines_all Till 11i version, we have seen invoices:
But in R12 ,
Because of introduction of invoice lines there is significant improvement of data flow with n other oracle modules
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). Check the status of the program. Checking the Invoice Change to any Payables Responsibility and open the invoices Form. Query for the Purchase order as below. Click “Actions” Button then tick the “Validate Check Box” and press “Ok” to validate the invoice and will change the status of invoice. Creation of Accounting and Payment Once invoice got approved, click actions so that we can “Create Accounting” and “Create Payments” via “Action” Button in the “Invoice Form” as we validated the invoice. Note:
5) Making a Payment 11i Go to the Invoice window and query the invoice you want to pay. You would see Amount paid as 0.00 before you make a payment. Click Actions button. Select Pay in full and click OK. Select the bank account and Document. Save the Work. Now that the payment is made, when you query for the invoice in Invoice window, you will the Amount Paid as $4,000.00. Create Accounting entries for payment. Click Actions and select Create Accounting. Select the void checkbox to cancel the payment. View Accounting Entries: In the Payments window, query for the payment. Tools 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. Refer to the article Make AP Payments through R12 Once invoice got approved, click actions so that we can “Create Accounting” and “Create Payments” via “Action” Button in the “Invoice Form” as we validated the invoice. Note:
Suppliers Bank Accounts 11i
R12
6) Transfer to General Ledger 11i Navigation: Payables Responsibility > View Requests Run the concurrent program Payables Transfer to General Ledger with the required parameters. Journal Import:To transfer the data from General Ledger Interface table to General Ledger, run the Journal Import program from Oracle General Ledger. Navigation: General Ledger > Journal> Import> Run Parameters:
No Group ID: To import all data for that source that has no group ID. Use this option if you specified a NULL group ID for this source. All Group IDs: To import all data for that source that has a group ID. Use this option to import multiple journal batches for the same source with varying group IDs. Specific Group ID: To import data for a specific source/group ID combination. Choose a specific group ID from the List of Values for the Specific Value field. If you do not specify a Group ID, General Ledger imports all data from the specified journal entry source, where the Group_ID is null.
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. Choose Create Summary Journals to have journal import create the following: • one journal line for all transactions that share the same account, period, and currency and that has a debit balance • one journal line for all transactions that share the same account, period, and currency and that has a credit balance.
Click on Import button. Posting: We have to Post journal batches that we have imported previously to update the account balances in General Ledger. 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. Mode= Final Post in GL = yes....etc The Create Accounting process has similar options, you can create accounting in Final or Draft mode and if Final mode is selected, the Transfer to GL parameter can be used to automatically transfer the accounting created by the corresponding run. When the Create Accounting process transfers the journal entries to GL it only transfers the accounting created by the process that calls it. If there is accounting created by the online option = Final or a previous Create Accounting program that was not transferred, that accounting will not be transferred. 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. Note:
RECONCILIATION CASH MANAGEMENT-DIFFERENCE BETWEEN 11i AND R12. The Sub-Ledger Accounting ( SLA ) Flow Chart in R12 Some of the SLA TABLES : XLA_AE_HEADERS : stores subledger journal entries. 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 What is P2P cycle in Oracle r12?Procure to Pay process which is also known as P2P cycle is followed by any organization in any ERP system if they would like purchase any products (it could raw materials, office supplies, infrastructure etc). Of course when there is a purchase there should be a payment.
What is P2P cycle in ERP?Procure to Pay (P2P) Cycle Overview: ➢Procure to Pay Lifecycle is one of the important Process in Oracle Applications. ➢Procure to Pay means Procuring Raw Materials required to manufacture the final or finished Goods from a Supplier to Paying the Supplier from whom the material was purchased.
What are the accounting entries in P2P cycle?Introduction(P2P – Process). Purchase Requisition: (T-Code- ME51N) ... . Purchase Order: (T-Code- ME21N) ... . Goods Receipt: (T-Code- MIGO) ... . Accounting Entry for MIGO Services Entry: (T-Code- ML81N) ... . Accounting Entry for MIGO. ... . Accounting Entry for MIRO.. Vendor Payment- F-53/F110. ... . Standard (Stock) Purchase Order Process.. What is the procure to pay cycle?Procure-to-pay is the process of integrating purchasing and accounts payable systems to create greater efficiencies. It exists within the larger procurement management process and involves four key stages: selecting goods and services; enforcing compliance and order; receiving and reconciliation; invoicing and payment.
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