Procure to Pay (P2P) Cycle

Procure to Pay (P2P) Cycle:

Procure to Pay Cycle is one of the comprehensive and integrated process in Oracle E-Business Suite (EBS) that needs to meet any company's requirements like manual purchase orders to procure items, receipts that are matched to invoices when they are delivered and payments against invoices.

Demand (Purchase Requisition) -> Order (Purchase Order)-> Receive (Receipts) -> Enter (Invoice) -> Pay -> Transfer to General Ledger

1.  Create Requisition:

Requisition is a purchasing document which will be prepared by Employee whenever he/she required the goods or services.
Navigation: Purchasing > Requisitions > Requisitions

Tables:

·         PO_REQUISITION_HEADERS_ALL (segment1 column in table represent requisition number)

·         PO_REQUISITION_LINES_ALL

·         PO_REQ_DISTRIBUTIONS_ALL

Note: requisition_header_id is the link between po_requisition_headers_all and po_requisition_lines_all requisition_line_id is the link between po_requisition_lines_all and po_req_distributions_all

2.  Create Purchase Order:

Purchase Order (PO) is a main document which will be prepared and approved by the Buyer and send it to the Supplier.
Navigation: Purchasing > Purchase Orders > Purchase Orders

There are 4 types of Purchase Orders:

	Standard PO	Planned PO	Blanket PO	Contract PO
Terms and Conditions	Yes	Yes	Yes	Yes
Goods or Service Known	Yes	Yes	Yes	No
Pricing Known	Yes	Yes	May be	No
Quantity known	Yes	Yes	No	No
Account Distributions Known	Yes	Yes	No	No
Delivery Schedule Known	Yes	May be	No	No
Can be Encumbered	Yes	Yes	No	No
Can Encumber releases	N/A	Yes	Yes	N/A

1. Standard PO: A Standard PO is created for one–time purchase of various items

2. Planned PO: A Planned PO is a long–term 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

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
·         PO_LOOKUP_CODES

Note: po_header_id is the link between all these tables

3.  Create Receipt:

Receipt is the document that will be used to find out the quantity supplied by Supplier.
Navigation: Purchasing > Receiving > Receipts

Tables:

·         RCV_SHIPMENT_HEADERS

·         RCV_SHIPMENT_LINES (Lines Table has PO_HEADER_ID)

·         RCV_TRANSACTIONS

Note: shipment_header_id is the link between rcv_shipment_headers and rcv_shipment_line po_header_id   is the link between rcv_shipment_headers and rcv_transaction

Match Approval Level:

Two–Way: Purchase order and invoice quantities must match within tolerance before the corresponding invoice can be paid.

Three–Way: Purchase order, receipt, and invoice quantities must match within tolerance

before the corresponding invoice can be paid.

Four–Way: Purchase order, receipt, accepted, and invoice quantities must match within tolerance before the corresponding invoice can be paid.

4.  Create Invoice in Payables:

Invoice is a document that will be created to pay the Supplier. 
Navigation: Payables > Invoices > Entry > Invoices

There are 8 Types of Invoices:

1. Standard Invoice. 
2. Debit Memo. 
3. Credit Memo. 
4. Expense Report Invoice. 
5. PO Default Invoice.

6. Quick Match Invoice.
7. Fixed Invoice. 
8. Prepayment

Tables:

·         AP_INVOICES_ALL

·         AP_INVOICE_DISTRIBUTIONS_ALL

Accounting Entries Tables:

·         AP_ACCOUNTING_EVENTS_ALL

·         AP_AE_HEADERS_ALL

·         AP_AE_LINES_ALL

Note: invoice_id is the link between ap_invoices_all and ap_invoice_distributions_all

5.  Making a Payment:

Payment is created against the Invoice(s).
Navigation: Payables > Payments > Entry > Payments

Tables:

·         AP_INVOICE_PAYMENTS_ALL

·         AP_PAYMENT_SCHEDULES_ALL
AP Check's Information 

·         AP_CHECKS_ALL

·         AP_CHECK_FORMATS

·         AP_TERMS

6.  Transfer to General Ledger:

Navigation: Payables Responsibility > View Requests

Run the concurrent program “Payables Transfer to General Ledger” with the required parameters.

Table:

·         GL_INTERFACE

Journal Import:

Navigation: General Ledger > Journal> Import> Run

Tables:

·         GL_JE_BATCHES

·         GL_JE_HEADERS

·         GL_JE_LINES

Posting:

Navigation: General Ledger> Journals> Post

Table:

·         GL_BALANCES.