Procure to Pay Lifecycle


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.


1.Purchase Requisition

Requisitions represent the demand. Requisition is a formal request to buy the needed raw materials. 


Methods entering Requisitions

  • Are generated by applications including Inventory, Work in Process (WIP), Material Requirements Planning (MRP) and Order Management.

  • May be entered manually through Purchasing windows.

  • May be entered using iProcurement.

  • May be imported from external systems.

Types of Requisitions

1] Internal Requisition – Basically used when there is a Requirement from One Inventory Organization to the Other Inventory Organization (Inter- Organization Transfer)

2] Purchase Requisition – Basically used when there is a Requirement to be fulfilled by External Sources i.e. Suppliers, Requirement from MRP, Requirement from WIP, Requirement from Sales Order etc.

With Oracle Purchasing module, you can create, edit, and review requisition information on-line.  Once the requisition is submitted, it gets into a hierarchy as defined for proper approvals.

2. Purchase Order

Once Purchase Requisition is approved next we have to create a Purchase order to buy the item.


Types of purchase orders:
Standard Purchase Orders
Blanket Purchase Agreements
Contract Purchase Agreements  
Planned Purchase Orders 

 Click here to read more on purchase orders
Once purchase orders are created, they may be submitted for approval. The approval process checks to see if the submitter has sufficient authority to approve the purchase order.  Once the document is approved, it may be sent to your supplier using a variety of methods including: printed document, EDI, fax, e-mail, iSupplier Portal and XML. Once the purchase order or release is sent to your supplier, they are authorized to ship goods at the times and to the locations that have been agreed upon.

3. Receipt of Material

After receiving the PO, the supplier will send the items.

Purchasing lets you control the items you order through receiving, inspection, transfer, and internal delivery. You can use these features to control the quantity, quality, and internal delivery of the items you receive.

4. Creation of Payables Invoice

Once you’ve received goods or service from your supplier, you’ll also receive an invoice.  Using Payables you can record invoices in a number of different ways.
 


With Payables you can:

  • Import/Enter invoices manually, either individually or in batches.

  • Use Quick Invoices for rapid, high-volume entry of standard invoices and credit memos that are not complex and do not require extensive online validation.

  • Automate invoice creation for periodic invoices using the Recurring Invoice functionality.

  • Use iExpenses to enter employee expense reports using a web browser.

  • Import EDI invoices processed with the e-Commerce Gateway.

  • Import XML invoices.

  • Match invoices to purchase orders or receipts to ensure you only pay what you’re supposed to be paying for.

5. Payment to Supplier

Once invoices are validated, they can be paid. Payables integrates with Oracle Payments, the E-Business Suite payment engine, to handle every form of payment, including checks, manual payments, wire transfers, EDI payments, bank drafts, and electronic funds transfers.  Payables also integrates with Oracle Cash Management to support automatic or manual reconciliation of your payments with bank statements sent by the bank. 

This is how the P2P Cycle occurs in Oracle Apps.
 Req -> PO-> Receipt -> Invoice-> Payment
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Location: Bangalore, Karnataka, India

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