Professional Documents
Culture Documents
and received goods or services from its vendors and makes necessary payments.
The P2P cycle comprises of the following steps,
1. Create requisition
2. Approve requisition
3. Create purchase order
4. Approve purchase order
5. Receive goods
6. Create Payables invoice
7. Pay the invoice
8. Return to Vendor (optional)
9. Transfer to General Ledger
10. Import Journal into General Ledger
Step 1: Create requisition
Responsibility: Any Purchasing responsibility
Navigation: Requisition > Requisition Summary
Click on New button
After the requisition is approved the status of the requisition will change to Approved.
Step 3: Create the Purchase Order from the requisition
When the Requisition is approved we need to create a Purchase Order for it. We shall use the
AutoCreate feature of Purchasing to do the conversion from Requisition to Purchase Order.
Responsibility: Purchasing responsibility
Navigation: AutoCreate
You might get the message above. This because a Buyer (shown on the screen) is not
assigned to the requisition.
Navigation: Management > Manage Buyer Workload
Now assign a Buyer to the requisition so that this requisition can be picked up by him to
create the Purchase order.
We shall assign a new buyer, Uzair Ahmed Khan, and select the requisition.
Enter the requisition number, 112005226, and click on Find button. The AutoCreate
Documents form opens with the requisition details.
Click on Create button to create the PO. The PO form opens with the new PO details that has
been created from the requisition.
The Shipments form opens. We find the shipping org is set to IFS. This means that the goods
will be received in the IFS org when it is shipped by the supplier (Step 5).
Close the Shipment form to go back to the PO form. Click on Approve button to send the PO
for approval.
The Approve Document form opens. Click on OK button to send the PO for approval.
The Budgetary control message appears. Click on OK and the PO will go for approval.
Once the PO is approved the status changes to Approved, Reserved.
The Organization screen opens. Select IFS (As checked in PO shipment in Step 4) and click
on OK.
Select the Line. You can change the quantity received at this juncture. We shall change the
quantity received from 10 to 5.
Note that the Inspection status shows as Not Inspected Standard Receipt and the
Destination Type is Inventory.
Click on Inspect button. The inspection window opens.
We are going to pass all 5 goods as part of the QA check process. We shall select Quality
Code from the list of values as Excellent.
Press OK button. The window will close and the receipt status will change to Inspect.
Requery the receiving transaction on the PO.
Note that the Inspection field has the value, Accepted Standard Receipt. QA check has
been completed. Close the form.
Step 7: Create Payables invoice
Responsibility: Payables responsibility to create an AP invoice
Important:
We shall not enter the invoice distribution as this will come automatically from matching the
invoice with PO receipt.
There are 3 options for matching.
Invoice
Receipt
Purchase Order
We are matching Receipt to this invoice so that the supplier is paid for only the amount that
has been received in the store.
Matching is done in 3 ways
Type of
matching
2-way
3-way
4-way
Description
PO and Invoice quantity and total amounts are matched
PO, Invoice, Receipt quantity and total amounts are matched
PO, Invoice, Receipt, QA (Acceptance) quantity and total amounts are
matched
Notice that the Distribution Total is in Red. It means that the Invoice header amount and
distribution amounts are not matching. Click on Match button at the bottom
You will be taken back to the Invoice form. Modify the Invoice header amount to match the
amount of the distribution.
Now you can validate the Invoice by clicking on Actions button on the Invoice form and
selecting Validate.
Click on OK button.
Click on OK. The Payment Process Manager will handle the payment and will execute the
remittance program as well to make the payment.
After the processes are over the supplier is paid fully for the goods that he has supplied.
Step 9: Receive the remaining goods or Close the Invoice line
The supplier has been paid for the goods that have been received in the stores but we have
received 5 goods out of the total number of 10. Therefore we have the option of receiving 5
more to complete the PO. If we receive the other 5 goods then we have to create another
invoice to pay off those received goods.
If we do not want to receive the remaining goods but instead we want to close the PO at this
stage then we need to Close the PO line so that the remaining quantity is cancelled and the
PO is closed.
Note:
If we do not finish this step the PO will remain in open state and the amount will go into
encumbrance, i.e. the open amount will be carried over to the next periods as the amount
which will need to be paid to the supplier.
Responsibility: Purchasing responsibility
Navigation: Purchase Orders > Purchase Order Summary
Query for the PO, i.e. 412005703.
Click on Find.
On the top menu click on Tools > Control. You will get a popup message.
Click on OK.
The Control Documents window opens. Select Finally Close and enter a reason.
Click on OK button.
Click on OK button. Now requery the PO.
The PO is now Closed. Note the PO status, Approved, Closed, Reserved.
Once the program completes check the output. The output shows the details of the journals
created. You can open the journal for viewing and posting.
The P2P cycle is now complete.