Procure to Pay Cycle (Explained in detail)
Step#1 - Creating the Item
Inventory Super User - Navigation: Items/Master Items
Enter item name and description
Table affected – MTL_SYSTEM_ITEMS_B
Copy from template tools – copy from –purchased item
Ensure it is Purchased and Purchasable under Purchasing tab
Assign the Purchasing category
From Tools- Categories
Organization assignment - Assigning it to M1 and M2.
Please note here
In the Vision Demo instance, the Purchasing and Order Management Attributes are controlled at Item Master level. By choosing the attributes at the item master level (V1) automatically sets these attributes for all organizations which are assigned (ex. M1 and M2). By choosing the attributes at the Item Master level - they are already set for all inventory organizations assigned.
Step#2 Requisition/PO Approval setup
By default requisition will not get approved it will in incomplete status, you will need to define approval in purchasing.
To get this tutorial going I have defined position based approval in purchasing adding those steps
1. Operating unit parameters
Purchasing Super User: Navigation – Setup, Organizations, Financial parameters
Uncheck the Use approval hierarchies check box
2. Define job
Purchasing Super User: Navigation – Setup, Personnel, Jobs
I have defined job as TEST IR APPROVER
3. Define Approval Group
Purchasing Super User: Navigation – Setup, Approvals, Approval Group
4. Approval assignments
Purchasing Super User: Navigation – Setup, Approvals, Approval Assignments
Assignments are done to job which we have defined in earlier step (TIR.TEST IR APPROVER)
I am assigning the job (TIR.TEST IR APPROVER) to approval group (TEST APPROVAL GROUP)
5. Employee creation /job assignment
Click on assignment; Assign the job to the employee
Once these steps have done you should able to approve the requisition.
Step#3 – Requisition Creation
Purchasing: Navigation: Requisitions/Requisitions
Select the type as Purchase Requisition
Enter source as supplier and site
Table affected – PO_REQUISITION_HEADERS_ALL (segment1 is requisition number), PO_REQUISITION_LINES_ALL
Click on distributions and enter the charge account details
Save and submit for approval
You can view the requisition by using requisition summary form,
From tools, you can look for view action history
Step#4 – Purchase order Creation
Purchasing Super User: AutoCreate
The PO will be created using auto create by finding the requisition number.
Table affected –
PO_HEADERS_ALL, PO_LINES_ALL, PO_DISTRIBUTIONS_ALL, PO_LINE_LOCATIONS_ALL
Under auto create you can review the Action and document type, Once reviewed click on Automatic
You will see the PO created
Click on Shipments to decide matching option
Save and click on approve the PO
Once approved you can look the action history from inquire-view action history
Step#5 – Receipt Creation
Purchasing: Navigation: Receiving/Receipts
Find expected receipts by entering purchase order number (6055 in this case)
Check the box and enter the subinventory where you want to receive this PO and save the receipt.
Note down the receipt number
When you save the receipts, in the background the below requests will run
Step#6 – Onhand check
You can see onhand using material workbench
Inventory: Navigation: On- hand, Availability
Table affected – MTL_ONHAND_QUANTITIES_DETAIL
Pass the receipt number to look for an onhnad
Step#7 – Material transactions check
Inventory: Navigation: Transactions/Material Transactions
You will see the PO receipt is being made
Table affected –
RCV_SHIPMENT_HEADERS (shipment_num is oracle delivery number, SHIPMENT_LINE_STATUS_CODE shows fully received partially received)
RCV_SHIPMENT_LINES (RCV_SHIPMENT_HEADERS.shipment_header_id, to_organization_id, quantity_shipped, quantity_received
rcv_transactions and mtl_material_transactions- shows the receiving transactions
Step#8 – Invoice Creation
Purchasing: Navigation: Submit new request
Submit program Pay on receipt autoinvoice
Pass the OU and receipt number and click submit
Step#9 – Checking the Invoice under payables
Payables: Navigation: Invoices/Entry/Invoices
Create Payables invoice by entering the PO number (6055) and click find
Table affected –
AP_INVOICES_ALL
AP_INVOICE_DISTRIBUTIONS_ALL
You will see the invoice as never validated
Click on actions and say validate
Alternatively, if can have the “Invoice validation” concurrent program scheduled to run at particular interval which also can validate invoices.
Or you can pass the invoice number to it as well.
Once validated, the status will be now validated.
Step#10 –PO status check as closed
PO closure
Purchasing: Purchase order
Navigate to Purchase order and verify the PO is closed.
Step#10 –Procure to Pay Accounting entries
Transactions | DR | CR | Notes | Which account is pulled | Control | Options | |
1 | Requisition Creation | ||||||
No Accounting | |||||||
2 | PO Creation | ||||||
No Accounting | |||||||
3 | Receipt | ||||||
Receiving A/c | 100 | At PO Price | Receiving Option Setup | ORG | |||
AP Accrual A/c | 100 | At PO Price | Inventory Org Setup | ORG | |||
4 | Delivery of Items | ||||||
Raw Material Sub Inventory A/c | 80 | At Standard Cost | Sub-inventory Material A/c Setup | SUB-INV | Org Level A/c will get defaulted | ||
Purchase Price Variance A/c | 20 | Diff between PO - Stnd | Inventory Org Setup | ORG | |||
Receiving A/c | 100 | At PO Price | Receiving Option Setup | ORG | |||
5 | Invoice matching with PO | ||||||
AP Accrual Liability A/c | 100 | At PO Price | Receiving Option Setup | ORG | |||
Invoice Price Variance A/c | 10 | Diff between Invoice - PO | Inventory Org Setup | ORG | |||
AP Liability A/c | 110 | AT INV Price | Financial Options/Supplier Site | ||||
6 | On making Payment | ||||||
Liability A/c | 110 | At Invoice Price | Financial Options/Supplier Site | ||||
Cash | 110 | At Invoice Price | Bank A/c Setup |