Procure To Pay (P2P) Process flow

The P2P or Procure To Pay cycle is vital to an organization as in this process the organization
buys 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

Create a new Purchase Requisition.
Enter the requisition details and save the form.

Step 2: Approve the requisition

After the requisition is saved the Approve button is enabled.

Click on the Approve button to send the requisition for approval.

Click on OK button and the requisition will be sent for approval.

Now go into Workflow Administrator responsibility to approve the workflow.

Check Activity History.

Open the Notification and approve it

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
Enter the requisition number, 112005226, and click on Find.
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

Enter the requisition number, 112005226, and click on Find button.
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.

Save the form.

You will get a confirmation message.

Now you need to log into oracle as the Uzair Ahmed Khan (i.e. the buyer who was set on the
requisition). After logging in to Oracle, go to a Purchasing responsibility.

Open the AutoCreate form.

Enter the requisition number, 112005226, and click on Find button. The AutoCreate
Documents form opens with the requisition details.

Select the requisition. We shall take the default values,

Action: Create
Document Type: Standard PO

Grouping: Default

Click on Automatic button.

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 PO number is 412005703.

Step 4: Approve the Purchase Order

Enter the Supplier and the supplier site on this PO. As the PO description is set to mandatory
enter some text as description.

Save the PO. Click on the Shipments button.

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.

Step 5: Receive the goods/items

Once the PO is sent to the supplier to be fulfilled the supplier sends the goods to the
organization. The goods now have to be received in Oracle.

To receive goods go to any Purchasing responsibility that has the receiving functionality.

Navigation: Receiving > Receipts

The Organization screen opens. Select IFS (As checked in PO shipment in Step 4) and click
on OK.

Enter the PO number and the supplier name is populated automatically.

Click on Find button. The receipt header form opens.

Close this form and the Receipts form opens.

Select the Line. You can change the quantity received at this juncture. We shall change the
quantity received from 10 to 5.

Save the form.

To get the receipt number, click on the Header button.

You now have the receipt number, 111208387.

Close all the forms

Step 6: Inspect the goods

Now that we have received the goods based on the PO (even though the shipment was partial)
we need to have the goods inspected and QA check done (This is required if the PO is based
on 4 way matching, else the payment cannot be made).
Responsibility: Purchasing responsibility that has the Receiving Transactions or QA
functionality enabled

Navigation: Receiving > Receiving Transactions

Enter the Purchase Order Number, i.e. 412005703.

The supplier number is populated automatically. Now click on Find button.
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.
Enter a comment on the right most field.

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

Navigation: Invoice > Entry > Invoices

Create an Invoice for supplier 7 EMIRATES SUPERMARKETS. This is the supplier which
had received the PO (Refer to Step 3 or 4).

Note:
We are creating the invoice manually in this case. The invoice can be created automatically
by executing the concurrent program named, Pay on Receipt AutoInvoice, from the
Purchasing responsibility and entering the goods receipt number (GRN) as the parameter.

Click on Match button at the bottom right of the form.

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
Description
matching
2-way PO and Invoice quantity and total amounts are matched
3-way PO, Invoice, Receipt quantity and total amounts are matched
PO, Invoice, Receipt, QA (Acceptance) quantity and total amounts are
4-way
matched

Find Receipts form opens.

Enter the Receipt number (End of Step 5)
Click on Find button. Match to Receipts form opens.

Check the box under Match.

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.

Now the invoice status changes to Validated.

Close the invoice form.

Step 8: Pay the invoice

We are going to create a single payment to pay the invoice (invoice number #BALLPENS1)
created earlier.

Responsibility: Payables responsibility with payment functionality

Navigation: Payments > Entry > Payments

Enter the bank and supplier details

Click on Enter/Adjust Invoices button to enter the invoice

Save and close this window.

Click on Actions button. Select Format and Print Remittance Advice.

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.

Click on Lines button.

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.

Step 10: Transfer Payables data to General Ledger

Responsibility: Payables

Navigation: View > Requests

Execute the program. Payables Transfer to General Ledger

After the program completes check the output.

Note the value of Journal Import Group ID. It is 609337.

Step 11: Import Journal into General Ledger

Responsibility: General Ledger responsibility which can run Journal Import

Navigation: Journal > Import > Run

The Journal Import form opens. Select Source as Payables and Selection Criteria as Specific
Group Ids. Enter the value of the Group Id from the previous step, i.e. 609337.

Click on Import
Click on Yes.

You get the concurrent request ID as 20165930.

Now go to View > Requests and click on Find and check the concurrent program.

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.

Cheers!

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