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PROCURE TO PAY CYCLE

Requisition
RFQ
Quotation
Quotation Analysis
Purchase Order
Goods Receipt Note
Invoice
Payment
Reconciliation

Procure to Pay Cycle

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Requisition:
Requisition is raised by employee and send to the buyer of the organization.
Requisitions are 2 types:
1. Internal Requisition
2. Purchase Requisition

RFQ:
Buyer will send Request for Quotation to supplier.
RFQs are 3 types:
1. Catalog RFQ
2. Standard RFQ
3. Bid RFQ

Procure to Pay Cycle

Quotation:
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Upon receiving RFQ from Buyer, supplier will send Quotation to Buyer.
Quotations are 3 types:
1. Catalog
2. Standard
3. Bid

Purchase Order:
After Quotation analysis buyer will raise Purchase Order to Supplier.
Purchase orders are 4 types:
1. Standard PO
2. Planned PO
3. Blanket PO Agreement
4. Contract Purchase Agreement
Procure to Pay Cycle
Goods Receiving:
There are 3 stages in goods receiving.
1. Direct Delivery
2. Standard Receipt
3. Inspection

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Procure to Pay Cycle

Invoice types:
1. Standard Invoice
2. Credit Memo
3. Debit Memo
4. Expense Report
5. Pre payment
6. Retain age release
7. Transportation
8. Mixed
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9. Recurring Invoice
10. Interest Invoice
11. Withholding Tax

12. PO Default
13. Quick Match

Create Purchasing Responsibility

Navigation: System Administrator
Security Responsibility Define.

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Assign Profile Options to Purchasing Responsibility

Navigation:

System Administrator

Profile System

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Profile Options:
1. HR: Business Group
2. HR: Security Profile
3. HR: User Type

4. GL: Ledger Name

5. MO: Security Profile (MOAC).

Assign Purchasing Responsibility to User

Navigation:

System Administrator

Security User Define

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s
Steps in Purchasing

Step: 1

Setup Options:
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1. Financial Options
2. Purchasing Options
3. Receiving Options
Step: 2

Create Employee

Step: 3

Create Supplier

Step: 4

Create Item

Step: 5

Open periods in Purchasing Module

Step: 6

Define Document type

Step: 7

Define Approval Group

Step: 8

Assign Approval group to Document type

Step: 9

Create Buyer

Step: 10 Create Requisition

Step: 11 Create RFQ
Steps in Purchasing

Step: 12 Quotation Analyses

Step: 13 Create Purchase Order
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Step: 14 Goods Receipt
Step: 15 Goods Returned

Step: 1

Setup Options

Options will work as heart to application.

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Using these options we can set some controls and defaults to manage the behavior of
application functionality.
Although you only need to define these options and defaults once, you can update them at any
time.
If you change an option and it is used as a default value elsewhere in the system, it will only be
used as a default for subsequent transactions.

Type of Options in Oracle:

1. Financial Options
2. Payables Options
3. Payables System setup
4. System Options
5. Purchasing Options
6. Receiving Options

:
:
:
:
:
:

PO, AP, I Expenses & FA

AP
AP
AR
PO
PO

Define Financial Options

Navigation:

Setup Organizations Financial Options

We have 5 tabs in financial options:

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1. Accounting
2. Supplier Purchasing
3. Encumbrance
4. Tax
5. Human Resources

Financial Options Tab: 1 Accounting

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Financial Options Tab: 2

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Supplier - Purchasing

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Financial Options

Tab: 3

Encumbrances
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Financial Options

Tab: 4
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Tax

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Financial Options

Tab: 5

Human Resources
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Setup Purchasing Options

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Navigation:

Setup Organization Purchasing Options

Purchasing options will be shared only in purchasing module.

We have to set up these options for each operating unit separately.

Through Purchasing Options we can determine:

1.
2.
3.
4.

Document Control
Document Defaults
Receipt Accounting
Document Numbering

Purchasing Options

Tab: 1
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Document Control

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Purchasing Options

Tab: 2 Document Defaults

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Purchasing Options

Tab: 3 Receipt Accounting

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Purchasing Options

Tab: 4 Document Numbering

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Setup Receiving Options
Navigation: Setup Organizations Receiving Options

Receiving options will be shared by:

1)
2)
3)

Purchasing
Inventory
Order management

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Receiving Options

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EMPLOYEE CREATION

Step: 1
Define Job (Purchase Clerk & Purchase Manager)
Navigation:

HRMS

Work Structure Job Description

Step: 2
Create Employee
Navigation:

HRMS

People Enter and maintain(LATER CREATE POSITIONS FOR EMPLOYEE)

Step: 3
Assign Jobs to Employee
Navigation:

HRMS

People Enter and Maintain

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EMPLOYEE CREATION

Step: 4
Assign Manager to Clerk in the Supervisor tab
Navigation:

HRMS

People Enter and Maintain

Step: 5
Create users for both Purchase clerk & Purchase Manager and assign employees to the
user
Navigation:

System Administrator

Security user Define

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SUPPLIER CREATION
Navigation: Suppliers base Suppliers (PO)
Suppliers Entry (AP)
The person who is supplying goods or services to an organization is called Supplier.
There are 2 levels of information in supplier window:
1.
2.

Supplier Header
Supplier Site

Header information is Global & Site information is local operating unit specific.
Sites are based on the purpose:

RFQ, PO & Payment purpose

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Supplier Creation Tabs in Supplier window

Company Profile

Terms and Control

Organization
Tax details
Address Book
Contact Directory
Business classification
Products & Services
Banking Details
Surveys

Accounting
Tax and Reporting
Purchasing
Receiving
Payment Details
Relationship
Invoice Management

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Supplier Creation Company Profile
Organization Tab:

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Supplier Creation Company Profile
Tax Details:

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Supplier Creation Address Book

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Supplier Creation Company Profile
Banking Details

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Supplier Creation Terms and Control
Accounting Tab:

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Supplier Creation Terms and Control
Purchasing: Tab

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Supplier Creation Terms and Control
Receiving: Tab

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Supplier Entry Terms and Control
Payment Details: Tab

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Supplier Entry Terms and Control
Invoice Management: Tab

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Item Creation Inventory

Key Flex Fields in the Inventory:

There are 7 KFF in Inventory:
1.
2.
3.
4.
5.
6.
7.

Item Categories
Account Aliases
Item Catalogs
Sales Orders
System Items
Stock Locators
Oracle-Service-Item Flex Field

Item Category Flex Field is used to define item structure.

Item Creation Inventory

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Step: 1
Define Item Category Structure (Family & Class)
Navigation:

Inventory

Setup Flex fields Key Segments

We can define up to 20 Segments

Item Family category is Independent.

Item Class Category is dependent on Item Category.

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Item Creation Inventory

Step: 2 Define Segment Values for Family Segment & Class Segment
Navigation: Inventory
Setup Flex Fields Key Values

Step: 3 Item Categories Codes

Navigation: Inventory
Setup Items Categories Category Codes
Category codes are used to categorize the items based on organization requirements.

Step: 4 Define Category Sets

It is used to group the category codes
Navigation: Inventory
Setup Item Categories Category Sets
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Choose your inventory organization

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Item Creation Inventory
Step: 5 Inventory

Items Master Items

Main Tab:

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Item Creation Inventory
Inventory: tab

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Item Creation Inventory
Purchasing: Tab

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Item Creation Inventory
Order Management: Tab

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Item Creation Inventory
Invoicing: Tab

Save your work.

Place the cursor on Item
Tools Categories

Choose Category Set.

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Item Creation Inventory

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Open Periods in Purchasing
Navigation: Setup Financials Accounting Control purchase periods
Select the period and change status

Period Status in PO: 1. Never opened 2. Open 3. Close

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Define Document type
Navigation: Setup Purchasing Document type
Document type window is used to define the features of various purchasing documents.
Setup required for only one document type. For remaining documents system will copy
the features based on Replicate seed data program.
Choose operating unit
Choose one document name (Purchase requisition)

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Document type

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Define Approval Group

Approval Groups are used to define the authorization limits for purchasing people.
Navigation: Setup Approvals Approval Groups
Choose Operating unit
Create Approval group for both Clerk and Manager
Enter Approval Rules objects

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Assign Approval Group to Document type

Navigation: Setup Approval Approval Assignments

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Define Employee as Buyer

Navigation: Setup Personal Buyer
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The person who is buying the goods or services on behalf of Organization is called Buyer.
Only Buyer can raise RFQ & Purchase orders in Oracle.
Click on Add Buyer
Query the employee name
Enter Category & Ship to fields
Save your work

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REQUISITION
When there is a requirement in the organization, then requisition will be raised by
employees.
Requisitions are 2 types:
1.
2.

Internal Requisition
Purchase Requisition

Internal Requisition

Internal Requisition will be created to adjust items from warehouse. (Order

Management set up is required).

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Purchase requisition
Purchase requisition will be created and send to the purchasing department when you
are buying from external sources.

There are 3 levels of data in the requisition.

1.
2.
3.

Header
Lines
Distributions

Header contains several lines & Lines contain several distributions.

Requisition Purchase Requisition
Step: 1 Create Purchase Requisition
Navigation: requisitions Requisitions
Choose item and Quantity details from Lines tab
Enter Source Details
Enter Details
Enter Currency
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Requisition - Purchase Requisition
Destination type: Inventory
Source: Supplier
Organization: Choose your inventory organization
Click on Distributions button
Charge account is coming from Item
Accrual Account & Variance account is coming from Inventory Options.
Save your work
Upon saving number will be assigned by system to requisition.

Click on Approve button

Step: 2 check the requisition status

Navigation: Requisitions Requisitions summary.
Approval status : Approved
Request for Quotation (RFQ)
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RFQ will be created by buyer and send to the supplier to obtain quotations.
There are 3 types of RFQ.
1.
2.
3.

Catalog
Standard
Bid RFQ

RFQ can be created in 2 ways: Manual & Auto create.

I.

CATALOG RFQ

It is used to obtain the quotations for regular items.

There are 3 levels of data flow in Catalog RFQ.
1.
2.
3.

Header
Lines
Price Breaks

Price breaks are used for expected purchase quantity and how much % of discount we
expected from the supplier and the terms.
Manual Catalog RFQ
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Step: 1 Create catalog RFQ
Navigation: RFQs and quotations RFQ
Choose operating unit
Type : Catalog RFQ
Status : In process
Go to Items tab choose item and target price
Go to More tab Enter minimum and maximum quantity
If RFQ is in Foreign currency go to Currency tab
Go to Terms tab to choose payment terms and freight terms
Go to Price Breaks tab to enter expected discount
Go to More tab to choose match approval level and tolerance details
Go to Supplier tab to choose supplier details
Change the status to Active
After the close date we have to manually change the status to Close

Step: 2 Run Print RFQ Report (Land scape)

Navigation: View Request
Standard RFQ
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Standard RFQ will be created by buyer and send to supplier to request quotation for
goods or services OCCASSIONALLY.
It is also contains 3 levels of data:
1. Header
2. Lines
3. Price Breaks

Follow the same setup as Catalog RFQ.

Choose type : Standard RFQ

Bid RFQ
Bid RFQ will be created when there is a special shipment details.
It contains 3 levels of data
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1.
2.
3.
Step:

Header
Lines
Shipments
Create Bid RFQ

Navigation: RFQs and Quotations RFQs

Choose type : Bid RFQ
Go to Items tab choose item details and target price
Go to Shipment tab choose shipment details
Follow the other steps as the above Standard RFQ.

Auto Create RFQ

Navigation: Auto create

Choose requisition number

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Click on Find
Enable check box: Requisition
Choose Action: Create
Click on Automatic
RFQ type: Standard RFQ
Click on Create
Click on Supplier to choose supplier details

Quotations
Quotations will be received from the supplier and entered in our system by buyer.
Quotation is a document is which contains goods or services details which are provided
by supplier.
Quotations are 3 types:
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1. Catalog
2. Standard
3. Bid
Quotations can be created in 2 ways.
1.
2.

Manual
Automatic

Manual Quotation Catalog Quotation

Navigation: RFQs and Quotations Quotations

Choose operating unit

Type : Catalog Quotation
Choose Supplier details
Status : In process
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Go to Items tab
Go to Terms tab
Go to Price Breaks tab
Change status to Active
Approve the Quotation
If you want to approve total quotation Choose approve button from header level,
otherwise you approve line by line also.
To check the quotation status, go to Price breaks tab.
Manual Quotation Bid Quotations
Navigation RFQs and Quotations Quotations

Follow the steps as above in the Catalog quotation.

Type : Bid quotation
Price breaks tab not available in Bid quotation
Go to Items tab
Go to Terms tab
Go to Shipments tab
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Change the status to Active
Approve the Quotation

Auto create quotation Standard Quotation

Navigation: RFQs and Quotations RFQs

Query RFQ number

Place cursor on RFQ number
Go to Tools copy document
Action: Entire RFQ
Type: Standard Quotation
Choose supplier details
Say OK
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Change status to Active
Approve

Quote Analysis
Navigation: RFQs and Quotations Quote analysis

Choose operating unit

Click on Find
Go to Analyze quotations window
Place the cursor on Quotation and click on Approve entire quotation
To approve line wise quotation, place the cursor on quotation line and enter details
in shipment approvals.
Choose approve and give reason for approve.

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Purchase Order
Purchase order is a legal document which will be created by buyers only and send to
suppliers to buy goods and services.
There are 4 levels of information in the purchase order.
1.
2.
3.
4.

Header
Lines
Shipments
Distributions

There are 4 types of Purchase orders.

1.
2.
3.

Standard Purchase Order

Planned Purchase Order
Blanket purchase Agreement
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4.

Contract purchase agreement

Purchase Order
Differences to determine purchase order:
Particulars
1.
2.
3.
4.
5.
6.

Terms and Conditions

Goods and Services
Price
Quantity
Delivery Schedule
Distributions

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SPO

PPO

BPA

CPA

Yes
Yes
Yes
Yes
Yes
Yes

Yes
Yes
Yes
Yes
X
Yes

Yes
Yes
Yes
X
X
X

Yes
X
X
X
X
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PO Standard Purchase Order

It is a one time purchase order to buy goods or services from supplier.
It will be created when we know the:
-

Terms and conditions

Goods or services
Price
Quantity
Delivery Schedule
Distributions

Create Standard Purchase Order

Navigation: Purchase orders Purchase order
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Choose operating unit
Type : Standard Purchase Order
Choose supplier and other details
Enter item and quantity details in Lines tab
Choose Payment terms
Choose Match Approval level & Invoice match option in Shipment tab
PO Standard Purchase Order
Choose receiving controls
(This receiving control information is coming from supplier site)
Data flow: Receivable options Supplier site PO

Place the cursor on Type and save your work

Accounting information will automatically copied
(PO charge account is coming from Item & Po variance account is coming
from Inventory options.
We cannot modify accounts here, we have to go at options level)

Now the status is Incomplete

Use Approve button to approve this PO
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Now status turned to Approved

PO Standard Purchase Order

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PO Standard Purchase Order

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Po Standard Purchase Order

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PO Standard Purchase Order

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PO Planned Purchase Order
It is an agreement between supplier and organization to buy goods or services.
It will be created when we know the:
-

Terms and conditions

Goods or services
Price
Quantity
Distributions
We do not know Delivery schedule.

Latter scheduled release will be created with reference to planned purchase order.
Step: 1 Create planned Purchase Order
Navigation: Purchase orders Purchase order
Choose operating unit
Type : Standard Purchase Order
Choose supplier and other details
Enter item and quantity details in Lines tab
PO Planned Purchase Order
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PO Planned Purchase Order

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Choose Terms tab
Enter Amount limit & Minimum release under Agreement controls

Save and Approve Planned purchase order.

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PO Planned Purchase Order

Step: 2 Create Scheduled Release

Navigation: Purchase Orders Releases

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PO Planned Purchase Order

Choose planned purchase order number

Click on Shipment tab
Place the cursor on Num
Choose PO source for Line and Shipment
Go to Distributions tab
Choose PO source
Save and approve.

Step: 3 Check released quantity status in the planned purchase order

Navigation: Purchase order Purchase Order

Query your planned purchase order

Go to Agreement tab
You can view Quantity released & Amount released.

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PO Planned Purchase Order

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PO Blanket Purchase Order
It is an agreement between organization and supplier to buy goods or services.
It will be created when we know the:
- Terms and conditions
- Goods or services
- Price
We do not know:
- Quantity
- Delivery Schedule
- Distributions

Step: 1 Create Blanket purchase agreement

Navigation: Purchase Orders Purchase order
Type: Blanket Purchase Agreement
Choose Supplier
Enter Amount agreed
Enter item and price in the Lines
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PO Blanket Purchase Order
We cannot enter quantity details
Shipments tab also not available for blanket purchase agreement
Go to Terms tab
Enter Minimum release amount
Save and Approve

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PO Blanket Purchase Order
Step: 2 Create Blanket Release
Navigation: Purchase Orders Releases

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PO Blanket Purchase Order

Choose Blanket PO number

Go to Shipments tab
Choose Source line and Org
Enter the quantity
Go to Distributions tab
Keep the cursor on Num field and save
Data in these fields will be updated automatically.
Close the window and Approve.

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PO Contract Purchase Agreement
It is a long term agreement to buy goods or services between organization and Supplier.
It will be created when we know only the terms and conditions.
Latter standard purchase order will be created with reference of contract purchase
agreement.

Step: 1 Create contract purchase agreement

Navigation: Purchase orders Purchase orders
Type: Contract Purchase Agreement
Choose supplier, site, Ship to, Bill to
Enter the amount agreed
Enable Global check box (We can use this PO in multiple OU)
We cannot enter lines fields
Save and Approve

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PO Contract Purchase Agreement

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PO Contract Purchase Agreement

Step: 2 Create Standard PO with reference of Purchase Agreement

Navigation: Purchase orders Purchase Orders
Enter standard Purchase order
Type: Standard Purchase Order
Go to Lines tab
Choose quantity and price
Go to Reference Document
Choose Contract purchase agreement number
Save and Approve

Step: 3 check the release amount in contract purchase agreement

Navigation: Purchase orders Purchase orders
Query your contract purchase agreement
You can see released amount in the header field.
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PO Contract Purchase Agreement

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Open Periods in the Inventory Organization
Navigation: accounting Close Cycle Inventory Accounting Periods
Choose your inventory organization
Place cursor on the period which you want to open
Change status.

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Define Sub Inventory organization
Navigation: Inventory
Setup Organizations Sub inventories
Choose your inventory organization
Click on Open
Name your Sub inventory organization
Choose Accounts tab
Enter the appropriate GL Accounts.
Save your work.

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Receiving Goods
Entering goods receipt information in the system is called Receiving.
Receiving activity done at always inventory organization level.
There are 3 types of standard receipt routings.
1) Direct Delivery
2) Standard Receipt
3) Inspection

Basis of receiving
Direct Delivery
Standard Receipt
Inspection

Receiving

Inspection

Final Destination

X
YES
YES

X
X
YES

YES
YES
YES

Receiving Goods Direct Delivery

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Under Direct delivery receipt routing goods will be directly delivered to the final
destination by supplier.

Step: 1

Create PO with receipt routing direct delivery

Navigation: Purchase orders Purchase Orders

Step: 2

receive the goods

Navigation: Receiving Receipts

Step: 3

Check receiving status in the receiving transactions summary window

Navigation: Receiving receiving transactions summary

Step: 4

check the received status in the purchase order

Navigation: Purchase orders Purchase orders

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Receiving Goods Direct Delivery

Step: 5

check item on hand availability quantity

Navigation: Inventory
On hand availability On hand quantity

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Receiving Goods Standard Receipt

Under standard receipt routing method:
First goods will be received at one place moved to the final destination.

Step: 1

Create purchase order with receipt routing Standard Receipt

Navigation:

Purchase orders Purchase orders

Step: 2

receive the goods

Navigation:

Receiving Receipts

Step: 3

Check the receiving transactions status in the receiving transactions

summary window.

Navigation:

Receiving Receiving transactions summary

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Receiving Goods Standard Receipt

Step: 4

Deliver goods to the final destination

Navigation: Receiving Receiving Transactions

Step: 5

Check receiving transactions status in the receiving transactions summary

Navigation: Receiving Receiving transactions summary

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Receiving Goods Inspection

Under inspection receipt routing method, first goods will be received at one place, then
quality check team will conduct the inspection, after that goods will move to final
destination.

Step: 1

Set QA: PO Inspection profile option at responsibility level.

Navigation: System Administrator

Profile System

Step: 2

Create purchase order with receipt routing method Inspection.

Navigation: Purchase orders Purchase orders

Step: 3

Enter the receipt

Navigation: Receiving Receipts

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Receiving Goods Inspection

Step: 4

Check the receiving transaction status in the receiving transaction

summary window.

Navigation: Receiving Receiving transactions summary

Step: 5

Inspection of goods

Navigation: Receiving Receiving transactions.

Step: 6

Check the inspection transaction status in the receiving transaction

summary window

Navigation: Receiving Receiving transaction summary

Step: 7

Deliver the goods to final destination

Navigation: Receiving Receiving transactions

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Receiving Goods Inspection

Step: 8

Check receiving transaction status in the receiving transaction summary

window

Navigation: Receiving Receiving transaction summary.

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Goods returns
Sending back to the supplier which damaged goods are called goods returns.

Step: 1

Record the goods returns

Navigation: Receiving Returns

Choose your inventory organization

Choose operating unit
Choose PO number
Under transactions tab enter the returned quantity.

Step: 2 check item on hand availability quantity

Navigation: Inventory
On hand availability On hand quantity
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