P2P Cycle

Presentation by :
Sreekanth Reddy M
Procure to Pay Lifecycle Overview
Objectives :
After completing this module you should be able to do
the following:

• Describe the procure to pay process flow

• Describe the key areas in the procure to
pay process
• Describe how the procure to pay process fits into the Oracle
eBusiness suite of applications
Procure to Pay Lifecycle :
The steps involved in Procure to Pay Cycle :
Oracle Modules Involved in P2P Cycle :

S. No Step Defined At Module

1 Define items Inventory

2 Enter item information Purchase Order

3 Raise requisition Purchase Order

4 Request For Quotation(RFQ) Purchase Order

raised
5 Quotation received Purchase Order

6 Quote analysis Purchase Order

7 Raise purchase order Purchase Order

8 Receive materials Inventory

9 Enter invoice Accounts payable

10 Payment process Accounts payable

11 Transfer to general ledger General ledger

Requisition:
• 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.
Create Requisition:
Approve Requisition:
Types of RFQ :

• Catalog: Used for items that will be ordered regularly

• Standard: Used for one off items or items that are ordered
infrequently
• Bid : used to source a specific quantity of an item to be
delivered at a certain site on a certain date.

RFQ Status :
• In Process: Being created
• Active: Ready to print
• Printed : At least one copy
• Closed : When you change the status to closed, the system will
delete all follow-up notifications. Change the RFQ to this status
when you do not want any more responses to the RFQ.
Purchase Order:

There are 4 types of Purchase Orders:

• Standard PO: A Standard PO is created for one–time purchase of

various items.
• 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.
• 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.
• 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.
Create Purchase Order :
Types of 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.
If you enter an item, the default value for this field comes from
the item information at the organization level. If not defined
there, the default comes from the item information at the master
level. If you do not enter an item, the default is from your
Purchasing Options.
Invoice Match Option:
• Purchase Order: Payables must match the invoice to the
purchase order.
• Receipt: Payables must match the invoice to the receipt.
Choose Receipt if you want to update exchange rate information
on the receipt or if you want your accounting to use exchange
rate information based on the receipt date. (If you use Periodic
Costing, you must match to the receipt to ensure accurate cost
accounting.)The Invoice Match Option defaults from the Supplier
Sites window. You can change the Invoice Match Option on the
shipment until you receive against the shipment.

Note: The Invoice Match Option and the Match Approval Level
are independent options. You can perform whichever Invoice
Match Option you want regardless of the Match Approval Level.
Approve Purchase Order :
Transmit PO to Supplier :

Receipts:
Invoicing :
Payment :
Invoice Payment – Overview :
Using the Payment Workbench :
Payment Methods :
Summary :

You should be able to do the following:

• Describe the procure to pay process flow
• Describe the key areas in the procure to
pay process
• Describe how the procure to pay process fits into the Oracle
eBusiness suite of applications