purchasing-setups-in-oracle-r12_compress.pdf

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ORACLE PURCHASING SETUPS IN R12

CHAIN.SYS
PURCHASING REQUIRED SETUPS
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Set Up System Administrator
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Define Accounting Key Flexfields
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Set Up Calendars, Currencies, and Ledgers
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Define Human Resources Key Flexfields
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Define Locations
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Define Organizations and Organization Relationships
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Convert to a Multi-Org Architecture
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Define Inventory Key Flexfields
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Define Units of Measure
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Define Freight Carriers
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Define Item Attributes, Codes, and Templates
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Define Categories
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Define Catalog Groups
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Set Up Personnel
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Set Up Oracle Workflow
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Decide How to Use the Account Generator
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Open Inventory and Purchasing Accounting Periods
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Define Subinventory Locations
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Define Cross-Reference Types
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Define Taxes
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Define Payment Terms

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Set Up Approval Information
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Define Lookups and Classes
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Define Standard Attachments
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Define Purchasing Options
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Define Buyers
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Define Items
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Define Line Types
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Start the Purchasing Database Administrator
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Define Financial Options
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Define Transaction Reasons
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Define Receiving Options
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Set Up Transaction Managers and Resubmission Intervals
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Define Suppliers
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Set Up Workflow Options
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Submit Workflow-related Processes
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Define Descriptive Flexfields
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Set Up Automatic Sourcing
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Perform Additional System Administrator Setup
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Define Manufacturing System and User Profiles
PURCHASING REQUIRED SETUPS

If you are implementing more than one Oracle Applications product, you may want to use
the Oracle Applications Implementation Wizard to coordinate your setup activities.
You can use the Implementation Wizard as a resource center to see a graphical overview
of setup steps, read online help for a setup activity, and open the appropriate setup
window.

Setup Checklist
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Create an Oracle Applications User to Complete Setting Up (Required)
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Create New Responsibilities (Optional)
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Implement Function Security (Optional)
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Create Additional Users (Required)
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Set Up Your Printers (Required)
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Specify Your Site-level and Application-level Profile Options (Required with Defaults)
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Define Your Concurrent Managers (Optional)
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Define Report Sets (Optional)
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Set Up AuditTrail (Optional)
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Modify Language Prompts (Optional)
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Modify Territory LOV Values (Optional)

Define Accounting Key Flexfields
Oracle Applications represent these codes using a particular key flexfield called the
Accounting Flexfield. One organization might choose to customize the Accounting
Flexfield to include five segments: company, division, department, account, and project.
Another organization, however, might structure their general ledger account segments
differently, perhaps using twelve segments instead of five. The Accounting Flexfield lets
your
Oracle General Ledger application accommodate the needs of different organizations
by allowing them to customize that key flexfield to their particular business usage.

Create a calendar : to define an accounting year and the periods it contains.
You should set up one year at a time, specifying the types of accounting periods to
include in each year. Defining one year at a time helps you be more accurate and
reduces the amount of period maintenance you must do at the start of each
accounting period. You should define your calendar at least one year before your
current fiscal year.
Set Up Calendars And Currencies

Use the Currencies : window to define non-ISO (International Standards Organization)
currencies, and to enable/disable currencies. Oracle Applications has predefined all
currencies specified in ISO standard #4217.

To define a new currency:
1. Enter a unique Code to represent your currency.
Note: You cannot change a currency code after you enable the currency, even if you
later disable that currency.
2. Enter the Name and Description of the currency.
3. (Optional) Select the name of the Issuing Territory. Oracle Applications has predefined
the names of countries (per ISO Standard #3166) that issue standard currencies.
4. Enter the Symbol for your currency.
5. Enter the Precision of the currency to designate the number of digits to the right of the
decimal point used in regular currency transactions.
6. Enter the Extended Precision to designate the number of digits to the right of the
decimal point used in calculations for this currency. The extended precision must be
greater than or equal to the standard precision.
7. Enter the Minimum Accountable Unit to designate the smallest denomination used in
this currency. Note that this might not correspond to the precision.
8. If you are defining the national currency of an EMU member state, define your
Currency Derivation options.
9. (Optional) Enter Effective Dates for your currency. You can only enter transactions
denominated in this currency for dates within the range. If you don't enter a start
date, the currency is valid immediately. If you don't enter an end date, the currency is
valid indefinitely.
10. Enable your currency.

Define Human Resources Key Flexfields
Oracle Human Resources, also use flexfield qualifiers. Oracle Human Resources uses
flexfield qualifiers to control who has access to confidential information in flexfield
segments.

Next Page will give you explanation based on the numbers highlighted in the screen shot

1. Name: The name of the Organization
2. Type: This is a lookup that you user can define (ORG_TYPE)
3. Date: Effective Date. This can also be changed manually while creating the
organization.
4. Location: Location Details and Address
5. Descriptive Flexfield: You can configure the ‘Location Address’ Descriptive Flexfield
if required.
6. Organization Classifications: This will determine what type of organization this is
and how the entity will behave in the application depending on the role it plays. An
organization may have several classifications attached to it.
For example, an organization may have people registered for it and may at the same
time be maintaining stock and act as a training center. In that case, the organization will
have to be classified as:
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HR Organization so that employees may be assigned there
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Inventory Organization so that items may be assigned to it
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Training Organization so that the organization may be available as a training center.
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7. Others: Depending on the classification, Additional Information may have to be entered.

Convert to a Multi-Org Architecture
The Oracle Applications organization model defines organizations and the relationships
among them in arbitrarily complex enterprises. This organization model serves as the
cornerstone for all of the Oracle Applications products. It dictates how transactions flow
through different organizations and how those organizations interact with each other.
Generally, a complex enterprise has several organization structures, such as Internal,
Accounting, and Human Resources. You are able to define different structures to customize
Oracle Applications according to your business needs.

Define Inventory Key Flexfields
Oracle Inventory Flexfields:
Oracle Inventory provides the following flexfields:
●
Account Aliases
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Item Catalogs
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Item Categories
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Sales Orders
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Stock Locators
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System Items

Define Units of Measure
You need to define units of measure for tracking, moving, storing, and counting items. Each item t
transaction quantity.

Define Freight Carriers
A freight carrier is a commercial company used for internal transfers between organizations, as wel

Item Attributes:
You can choose between centralized and decentralized control of item attributes. The control
level you define for an attribute applies to all items. Defining attribute controls does not
determine the value of an attribute, only the level at which it is controlled. You assign values to
the attributes when you define an item.

Item Status Codes:
You can use statuses to provide default values for certain item attributes to control the
functionality of an item. When you update the values for a status, all items to which it is assigned
are also updated.

Item Templates:
Templates are defined sets of attributes that you can use over and over to create many similar
items. Templates make initial item definition easier. Oracle recommends that you use templates--
either those Oracle provides or those you define--when you define your items.

Define Categories
You can define an unlimited number of categories and group subsets of your categories into catego

Define Catalog Groups
You can use item cataloging to add descriptive information to items and to partition your Item Mas
When you assign an item to an item catalog group, you define values for the descriptive elements

Several Oracle Workflow pages include fields that let you select a user or role as the field value fro
1. A list of user and role types that correspond to the originating system partitions in the O
2. A list of the users and roles within the selected partition. Oracle Workflow retrieves these v
By default, these lists include all partitions and all users and roles defined in the directory service. Y
The Oracle Workflow pages that contain fields with the two-part user list of values include the follo
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Notification Details page - Any response fields for Respond attributes of type role
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Respond to Notifications as Group page - Any response fields for Respond attributes of type role
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Reassign Notifications page - Assignee field
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Request More Information page - Request More Information From: Any User field

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Grant Work list Access page - Name field
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Vacation Rule: Response page - Assignee field and any response fields for Respond attributes of ty
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Administrator Vacation Rules page - User field
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Administrator Notifications search page - Owner field, To field, and From field
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Administrator Status Monitor: Work flows page - Workflow Owned By field and Waiting for Respon
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Signature Evidence Store: Electronic Signature page - Requested Signer field
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Developer Studio: Run Workflow page - Workflow Owner field

Applications need to construct Accounting Flexfield combinations automatically for various purpose
Benefits of the Account Generator using Oracle Workflow:
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Automatic construction of key flexfield combinations speeds users' data entry.
●
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Automatic construction of key flexfield combinations improves accuracy of data entry because use
●
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Each site can customize rules for the construction of key flexfield combinations to match the existi
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Suggestion: Before using or customizing the Account Generator, you should familiarize yourself w
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Attention: The Account Generator replaces the Release 10 FlexBuilder feature. Information on up

If you are implementing Oracle Purchasing for the first time, you need to review how Purchasing us

Oracle Inventory uses accounting periods to group material and work in process transactions for

Review the below information based on the screen shot:
Status: Displays status of an accounting period as Future, Open, Closed, Processing, or Error.
Period: Displays the name of the period.
Num: Displays the number indicating the order of the period within the calendar year.
Year: Displays the calendar year containing the accounting period.
From: Displays the beginning date of the period.
To: Displays the ending date of the period.
Close Date: Displays the date on which you closed the period.
Opening an Accounting Period : An accounting period must be open for you to complete a tran
1. Follow the steps for viewing accounting periods.
2. Select a period with a status of Future.
3. Choose the Change Status button.
4. Choose the OK button to open the period.

Use the Control Purchasing Periods window to control the purchasing periods defined in the Accoun

In the Period Status field, you have the following options:
Closed: Use this option to close this purchasing period. When you close a purchasing p
Future: Use this option if you want to open this purchase period in the future. This o
Never Opened: Purchasing displays this default status if you have not opened this p
Open: Use this option to open this purchasing period.
Permanently Closed: Use this option if you do not want to open this period in the fu

Subinventories are unique physical or logical separations of material inventory, such as raw invento
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1. Indicate whether each transaction for this subinventory updates the quantity on hand for th
You can update this value only if there is no on-hand quantity for the subinventory.
2. Indicate whether to maintain the value of this subinventory on the balance sheet (Asset S
3. Indicate whether to include items in this subinventory in ATP calculations.
4. Indicate whether to include this subinventory when you perform available-to-reserve c
5. Indicate whether the planning process uses the on-hand balance of these subinventory it
6. Select a type of locator control.
You can select an option only if you selected locator control as Determined at s

None: Inventory transactions within this subinventory do not require locator information.
Prespecified: Inventory transactions within this subinventory require you to enter a valid p
Dynamic entry: Inventory transactions within this subinventory require you to enter a lo
Item level: Inventory transactions use locator control information that you define at the it
7. Enter a picking order value.
This value indicates the priority with which you pick items from this subinventory, relative to
Note: A picking order of 1 means that order entry functions pick items from that s
8. Select the appropriate Default Replenishment Count Type. This field defaults the default c
9. Select a source type for item replenishment.
Inventory: Replenish items internally, from another subinventory in the same o
Supplier: Replenish items externally, from a supplier you specify in Oracle Purchasing.

Define Cross-Reference Types
Cross-reference types define relationships between items and entities such as old item numbers or

Define Taxes
Use the Tax Codes and Rates window to enter and maintain your tax codes and their associated ta

Define Taxes
1. Enter Name of the tax which want to define
2. Enter meaningful description for the Tax you define. This should describe the Tax Name in d
3. Enter Account: You can enter the account code by using accounting flex-field on which th
4. Enter Vendor Name: You can specify the Vendor Name here for a Tax Type other than E
other than 'TDS Authorities', 'Customs', 'Excise' will be displayed in the list. The vendor na
5. Enter Vendor Site: The user can enter relevant Vendor Site for the above selected V
6. Enter Percentage: This will consider the amount calculated based on the percentage d
7. Enter Unit Rate: If the Tax is charged per unit then the user needs to specify the Tax R

8. Entering Unit Of Measure: Amount Per Unit based taxes can be used with items h
9. Entering Duty Drawback Credit Percentage: This percentage is applicable for Taxes o
10. Enabling Adhoc Flag: Adhoc basis of tax can be used to define tax amount, which will b
the Rate Block will get disabled.
11. Entering Credit Percentage: For all input type of taxes, this field determines the p
12. Entering Form Name/Certificate: This column is relevant only for Sales Tax & TDS T
13. Entering TDS Section No: You can specify the respective TDS section for which a p
Define Taxes

Define Taxes
14. Entering Original Tax Percent: If the Concessional Tax Rate has been used for a p
specified otherwise the user cannot enter any rate in this field.
15. Entering Rounding Factor: Rounding factor differs for different Tax Codes. The user c
16. Enabling Update Vendor: This flag is providing flexibility to the user to change the V
17. Enabling Update Currency: By enabling this flag the user can change the currency c
18. Enabling Update Transactions: By enabling this flag the tax transaction lines can be u

Oracle Purchasing/Receivables lets you define standard payment terms for your customers. Payme
installments that have different due dates.

1. Enter Name and Description of the payment terms.
2. Entering Cut Off Date: If this payment term uses proxima terms, enter the day to start th
3. If this payment term uses proxima terms, enter the day to start the new billing cycle for th
day receive invoices on the day that you specify in the Due: Day of Month field for the next month
4. If you want transactions assigned to this payment term to be printed before the due d
5. To associate a credit check with this payment term, check the Credit Check check box. O
6. If you do not want to let your customers take discounts for partial payments on items a
7. Enter a line number for the installment term that you are defining in the 'Seq' field. Enter a
8. Enter the number of Days after the invoice date that payment is due for this installment te

Using Approval Groups in Oracle Purchasing:
Use the Approval Groups window to define and update approval groups. Once you have defined an

1. Enter the Name of the approval group. You can change existing approval group names, b
2. Select Enabled to permit the approval group to be assigned to a position/job in the A
3. Choose one of the following Objects:
Account Range : For this option, you enter the accounting flexfields for the Low and
Amount Limit for Include Type rules.
Document Total : The document total refers to the monetary limit on an individual d
Item Category Range : For this option, you enter the purchasing category flexfields for th
must enter an Amount Limit for Include Type rules.
Item Range : For this option, you enter the item flexfields for the Low and High Values. I

Location : The location refers to the deliver-to location on a requisition as well as the s
location, the default is Include. The Inactive Date is optional, but you must enter an Amount Li
4. Select the rule Type: Include or Exclude indicates whether to allow objects that fall within th
5. Enter the Amount Limit. This is the maximum amount that a control group can authorize fo
6. Enter the Value Low. This is the lowest flexfield (accounting, purchasing category, or it
7. Enter the Value High. This is the highest flexfield (accounting, purchasing category, or
8. Enter the Inactive Date on which Purchasing will no longer use this rule in formulating th

Using Approval Assignments in Oracle Purchasing:
Use the Assign Approval Groups window to associate approval groups with a specific job or position
combination. Whenever you associate two or more approval groups with a single document type/jo

Assuming Senior Buyers should be able to approve all document types, you can set up the control
Control Function Approval Group Start Date
Blanket Purchase Agreement Buyer Master dd-MON-yy
Blanket Release Buyer Master dd-MON-yy
Contract Purchase Agreement Buyer Master dd-MON-yy
Internal Requisition Buyer Master dd-MON-yy
Planned Purchase Order Buyer Master dd-MON-yy
Purchase Requisition Buyer Master dd-MON-yy
Scheduled Release Buyer Master dd-MON-yy
Standard Purchase Order Buyer Master dd-MON-yy

Use the Lookup Codes window to define lookup codes in Purchasing. Purchasing uses lo
For example, Purchasing supplies the following Supplier Type codes: Employee and S
Attention: You cannot change or delete codes once you have added and saved them, b

1. Enter one of the following predefined code Types: 1099 Supplier Exception, Acceptance T
2. Enter up to 25 characters as a unique code you want to add to those already provided. P
1099 Supplier Exception: Purchasing provides no 1099 Supplier Exception codes, but y
Acceptance Type: Purchasing provides Accepted Terms, On Schedule, and
FOB: Purchasing provides no FOB codes, but you can define your own. This code is
Freight Terms: Purchasing provides no Freight Terms codes, but you can define
Minority Group: Purchasing provides no Minority Group codes, but you can define

Pay Group: Purchasing provides no Pay Group codes, but you can define your own.
Price Type: Purchasing provides Cost Plus Fee, Cost Plus Percentage, Fixed,
Reply/Receive Via: Purchasing provides no Reply/Receive Via codes, but you can
PO/Requisition Reason: Purchasing provides no transaction reason/transaction
Supplier Type: Purchasing provides Employee and Supplier.
3. Enter an Inactive Date on which the code is no longer active.

Define Standard Attachments
You can create attachments for your requisition headers and lines. When you AutoCreate a

Use the Purchasing Options window to define default values and controls for functions throughout

You can define specific categories of options when you select one of the following:
Accrual Options: Define accrual options, such as whether you accrue expense items at p
Control Options: Define control options, such as the receipt close point.
Default Options: Define default options, such as the minimum release amount.
Internal Requisition Options: Define the required order type and order source for in
Numbering Options: Define the numbering method, numbering type, and next n
Tax Defaults Options: Define the sources from which purchasing documents default ta

Define Buyers
Use the Buyers window to define and maintain your buyers. Buyers can review all requisitions using

Define Buyers
1. Enter the Name of an employee who you want to define as a buyer. If the name you want do
2. Enter the default purchasing Category of the goods the buyer typically orders. Purchasing de
3. Enter the name of the ship-to location for which the buyer typically creates purchase ord
4. Enter the Start Date that you want to initiate the responsibilities for a buyer. The default is
5. Enter the End Date after which the employee is no longer a buyer.

Define Items
With the Master Item window you can define and update items and the attributes associated with th

Define Line Types
When you enter a line on a purchasing document and choose a line type, Purchasing automatically d
You can create line types to reflect different characteristics for the items you purchase. For example
services, outside processing, or any other line type you define.
Outside processing line types are necessary when you are using WIP and want to enter purchasing d
Purchasing automatically provides you with a line type of Goods that is quantity based. If Work in Pr

Start the Purchasing Database Administrator
Use the Purchasing Database Administration process to initiate concurrent processes that purge obs
To run the Purchasing Database Administration process:
1. Navigate to the Submit Requests window.
2. Select Requests in the first field.
3. Select Purchasing Database Administration in the Name field.
4. Choose Submit Request.

Use the Financials Options window to define the options and defaults that you use for your Oracle F
required to enter all fields.
Although you only need to define these options and defaults once, you can update them at any time
Payment Terms of existing suppliers.
Below Tabs covers the complete financial option setup:
●
Accounting
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Encumbrance
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Human Resources
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Supplier - Payables
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Supplier - Purchasing
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Supplier Entry
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Tax

Future Period Limit. The first time you enter this field Payables displays the number of future periods yo
payment hold on them during Approval.
Liability GL Account. Payables assigns this account as the default Liability Account for all new suppliers y
Prepayment GL Account. Payables assigns this account as the default Prepayment GL Account for each
Discount Taken GL Account. If you choose to distribute your discounts to the system Discount Taken Ac
Rate Variance Gain/Loss GL Accounts. Payables uses these accounts to record the exchange rate varia

Business Group. Enter the name of the business group that you want to associate with Purchasing
Expense Check Address. Select the default address you want to use on payments for employee e
Use Approval Hierarchies. Enable this option to use positions and position hierarchies to determin
Employee Numbering Method. You can enter your employee numbers manually or let the system
Automatic. The system automatically assigns a unique sequential number to each em
Manual. You enter the employee number when you enter an employee.
Use National Identifier Number. The system automatically enters the employee's National Id

Define Transaction Reasons
A transaction reason is a standard means of classifying or explaining the reason for a transaction. Tr
You can use these standard transaction reasons with any type of material transaction. Oracle Invent

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1. Enter the Enforce Ship To location option to determine whether the receiving location m
None - The receiving location may differ from the ship-to location.
Reject - Purchasing does not permit receipts when the receiving location differs from the s
Warning - Purchasing displays a warning message but permits receipts when the r
2. Choose an action for ASN Control. This field determines how Purchasing handles receiving a
None - Purchasing does not prevent or warn you when you try to receive against a p
Reject - Purchasing gives you a message and prevents you from receiving against a p
Warning - Purchasing gives you a message informing you that an ASN exists for the p

3. Enter the maximum acceptable number of Days Early and Days Late for receipts.
4. Enter the Action for Receipt Date Control. This field determines how Purchasing handles r
None - Receipts may exceed the allowed days early or late.
Reject - Purchasing does not permit receipts outside the selected number of days early o
Warning - Purchasing displays a warning message but permits receipts outside the s
5. Enter the maximum acceptable over-receipt Tolerance percentage.
6. Enter the Action for Overreceipt Quantity Control. This field determines how Purchasing h
None - Receipts may exceed the selected tolerance.
Reject - Purchasing does not permit receipts that exceed the selected tolerance.
Warning - Purchasing displays a warning message but permits receipts that exceed the s

7. Enter the default Receipt Routing that you assign goods: Direct Delivery, Standard R
8. Check Allow Unordered Receipts if you want to receive unordered items. You can la
Check Allow Express Transactions to enable express deliveries and receipts.
Check Allow Cascade Transactions to enable cascading for receipts and receiving tr
Select Allow Blind Receiving if you want blind receiving at your site. Blind receiving h
shipped.
9. Choose the Entry method for receipt numbers.
Automatic: Purchasing automatically assigns a unique sequential number to each r
Manual: You provide a receipt number manually when you enter the receipt.

10. Choose the receipt number Type you want Purchasing to use for receipt numbers: N
11. Enter the Next Receipt Number. This is the starting value you want Purchasing to use fo

Set Up Transaction Managers and
Resubmission Intervals
This step involves the below tasks:
●
Start the following transaction managers. See: Administer Concurrent Managers Window.
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Receiving transaction manager
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Document approval manager
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Define resubmission intervals for concurrent processes.

Define Suppliers
Set up and maintain suppliers in the Suppliers pages to record information about individuals and co
addresses as payment, purchasing, RFQ only, or procurement card locations. For example, for a sin

Define Suppliers
To enter basic supplier information:
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In the Create Suppliers page, enter a unique Supplier Name.
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Tip: Use a naming convention that minimizes risk of separate entries for the same supplier under
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If the Supplier Number Entry option in the Payables System Setup window is set to Automatic, Pay
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Optionally enter Alias, Name Pronunciation, and D-U-N-S number.
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Optionally enter the supplier's tax identification number in the Taxpayer ID field; for example, an i
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Optionally enter the value-added tax (VAT) registration number in the Tax Registration Number fie
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Click Apply. The system creates the supplier record and accesses the Suppliers: Quick Update pa

Define Suppliers
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If you want to prevent invoice or purchase order entry for this supplier after a certain date, access
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To create locations for the supplier, go to the Suppliers: Address Book page and click the Create b
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Enter supplier and site information in the appropriate Supplier pages. See the following page refere
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Quick Update.
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Organization.
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Tax Details.
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Address Book.
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Contact Directory.
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Business Classification.
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Products and Services.
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Banking Details.
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Surveys.
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Accounting.
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Tax and Reporting.
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Purchasing.
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Receiving.
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Payment Details.
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Relationship.
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Invoice Management.

Set Up Workflow Options
Purchasing uses Oracle Workflow technology to handle requisition and purchase order approvals, a
purchase order.
Step Number Requirement Step
Step 1 Optional Partitioning Workflow Tables
Step 2 Required Setting Global User Preferences
Step 3 Required Setting Up an Oracle Workflow Directory Service
Step 4 Optional Setting Up Additional Languages
Step 5 Required Setting Up Background Workflow Engines
Step 6 Optional Implementing Notification Mailers
Step 7 Optional Modifying Your Message Templates
Step 8 Optional Adding Worklist Functions to User Responsibilities
Step 9 Optional Setting the WF: Notification Reassign Mode Profile Option
Step 10 Optional Setting the WF: Enable Bulk Notification Response Profile
Step 11 Optional Enabling the Notification Details Pop-up Window
Step 12 Optional Setting Up Notification Handling Options
Step 13 Optional Configuring the Oracle Workflow User List of Values
Step 14 Optional Setting Up for Electronic Signatures
Step 15 Optional Customizing the Logo on Oracle Workflow's Web Pages
Step 16 Optional Adding Custom Icons to Oracle Workflow
Step 17 Required Setting Up the Business Event System

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