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Procure To Pay Cycle

The document outlines the Procure to Pay (P2P) cycle in Oracle ERP, detailing the steps from creating a purchase requisition to supplier payment. It highlights the importance of each step, including the creation of purchase orders, inventory receipts, and accounts payable invoices. The conclusion emphasizes the P2P cycle's role in facilitating procurement and ensuring financial data accuracy within Oracle Applications.

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terragrunt1.july2023
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10 views21 pages

Procure To Pay Cycle

The document outlines the Procure to Pay (P2P) cycle in Oracle ERP, detailing the steps from creating a purchase requisition to supplier payment. It highlights the importance of each step, including the creation of purchase orders, inventory receipts, and accounts payable invoices. The conclusion emphasizes the P2P cycle's role in facilitating procurement and ensuring financial data accuracy within Oracle Applications.

Uploaded by

terragrunt1.july2023
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Procure To Pay Cycle

created By: Omar Magdey


CONTENT OVERVIEW
01 What is ERP ?

02 Oracle ERP Modules

03 Supply Chain Module

04 Procure to pay cycle

05 Conclusion
01-What is ERP?
Enterprise resource planning (ERP) refers to a type of software that
organizations use to manage day-to-day business activities such as :

• Accounting
• Procurement
• project management
• Human resources
• supply chain operations.

Example for the most famous ERP systems :


02-Oracle ERP Modules
03-Supply Chain Module
What Is Supply Chain Management (SCM)?
• Supply chain management is the management of the flow of goods and
services and includes all processes that transform raw materials into final
products ,storing them in inventories and delivering them to the customer

what supply chain module in oracle offers?


• Inventory Management
• Manufacturing
• Order Management
• Procurement
• costing
04-Procure To Pay Cycle
What is the P2P cycle

• The P2P cycle in Oracle Cloud Fusion is a process that starts with a
requisition being created in Oracle Procurement and ends with the
supplier being paid fully or partially for the purchase. The steps are
outlined in the diagram below:
PROCURE TO PAY PROCESS CYCLE
Steps Of P2P Cycle
1.Create requisition
• The first step that initiates the Procure-to-Pay Cycle is Creating a Purchase Requisition (PR). A
requisition is a formal document used when an employee needs to purchase or order something on
behalf of their organization
1- 2-

3- 4- 5-
Request for quotation
• After requisitions are created by entering all the information mentioned
above, the user generates a request for a quotation (RFQ). An RFQ is a
Call for Bid, or an Invitation for Bid sent by a company to its potential
suppliers.
• An RFQ is a document sent to the supplier that outlines the goods or
services needed, along with the buyer’s price. The RFQ also includes any
other terms and conditions relevant to the purchase.
Quotations
• A quote is an offer that contains the total price of the products or
services.
• The supplier sends a quotation, whether in response to an RFQ or not,
through the Purchasing Documents Open Interface. If you don’t receive
quotes electronically from your supplier, a quotation can be created
manually using a Quotations Form or copying the quotation from an
existing RFQ.
1- 2-

4-
3-
2. Create purchase order
• A purchase order is a commercial document that's used to request a seller to supply a product or
service in return for payment. In Oracle Purchasing. a purchase order can be created through an
automated process or entered manually.

The buyer is responsible for communicating with


suppliers and agreeing with them to purchase goods with
the best quality and best price.
1- 2-

3-
APPROVAL CYCLE

PR APPROVAL

PO APPROVAL
3. Create inventory receipt
Once the goods/services are ordered and shipped by the vendor, they must go to their final
destination. The receipt is done by entering quantity (accepted quantity) and/or receiving location into
the receiving form in Oracle Purchasing.

Receipt Routing

1 Direct Put away


2 Standard Receiving area – Put away
3 Inspection Receiving area – Inspect – Put away
4. Create AP invoice
• Once the receipt is entered, the invoice can be created in Oracle. An invoice specifies the price of
the goods or services and any other terms, and an essential aspect of the invoice includes a due
date for payment.
5.Create accounting entries
• The invoice which is created and approved needs to be reviewed. This step is known as invoice
validation, wherein the invoice is checked and validated. The supplier’s invoice is matched and ensures it
aligns with the PO created earlier.
• After Invoice validation and approval, the Accounts Payables team generates accounting entries. These
accounting entries debit from the Accounts Payable Account and credit into the Cash Account.
Blanket Purchase Agreement
B.P.A
• A contract with a fixed duration and value for the supply of
specific items at prices agreed upon between the buyer and
the supplier.
• This contract includes certain items at certain prices, it may
include discounted prices and also the lowest purchase value.
1-
Price Break

2-
05-Conclusion
The P2P cycle involves all necessary and optional processes that help
ensure a smooth requisitioning and procurement of goods and services, and
the accuracy of financial data in Oracle Applications.

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