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- 1. Copyright © 2007, Oracle. All rights reserved. Procure to Pay Lifecycle Overview
- 2. Copyright © 2007, Oracle. All rights reserved. 1 - 2 Objectives After completing this module you should be able to do the following: • Describe the procure to pay process flow • Describe the key areas in the procure to pay process • Describe how the procure to pay process fits into the Oracle E-Business Suite of applications
- 3. Copyright © 2007, Oracle. All rights reserved. 1 - 3 Procure to Pay Lifecycle Requisitions Purchase Orders Receiving Reporting Invoice/ Payment Supplier Performance Supplier management RFQs/ Quotations Catalog Content Management Sourcing Ordering Analysis
- 4. Copyright © 2007, Oracle. All rights reserved. 1 - 4 Oracle Procure to Pay Process Payment Purchase order Supplier Request for quote (RFQ) Receipts Purchase requisition Demand Source Order Pay Quotation Receive
- 5. Copyright © 2007, Oracle. All rights reserved. 1 - 5 Demand: Requisitions Approval Requisition Manually create Requisition pool Order Mgmt Internal sales order PO Import/reschedule requisitions Inventory WIP ASCP Demand Order Mgmt Other Systems
- 6. Copyright © 2007, Oracle. All rights reserved. 1 - 6 Source: RFQs and Quotations Requisition pool Quotation Manual Print/Send RFQ RFQ Oracle Sourcing or iSupplier Portal Supplier lists Supplier
- 7. Copyright © 2007, Oracle. All rights reserved. 1 - 7 Suppliers Your Company Purchase requisition Request for quote (RFQ) Quotation or negotiation Purchase order Receipts and returns Invoices and payments Suppliers
- 8. Copyright © 2007, Oracle. All rights reserved. 1 - 8 Purchase Orders Requisition pool Receive against PO Match invoices in Payables Automatically create Maintain documents Accept Revise Control PO Manually create Approve
- 9. Copyright © 2007, Oracle. All rights reserved. 1 - 9 Receiving Inventory Order Entry Internal shipment Inspect Transfer Shop floor Inventory Supplier Shipment Expense Receive Deliver
- 10. Copyright © 2007, Oracle. All rights reserved. 1 - 10 Invoicing Receive invoices Enter invoice Enter basic information Enter detailed information File invoices Maintain invoices If appropriate, match invoice to purchase order PO Invoice
- 11. Copyright © 2007, Oracle. All rights reserved. 1 - 11 Payment Pay invoice Record manual payment Confirm payment batch: • Confirm checks • Update invoice • Payment history Create manual payment outside Payables Create computer- generated payment Format payments: • Print checks • Load EFT data Modify payment batch: • Remove/add invoices • Modify payment details Run payments in batch Create single payments Select approved invoice
- 12. Copyright © 2007, Oracle. All rights reserved. 1 - 12 Overview of Oracle Application Integration Assets Accounting Suppliers Payables Depreciation/ Asset Transactions Assets General Ledger Payables/ Expenses/ Payments Accruals Purchasing/ iProcurement Order Management Inventory Internal Requisitions Requisition/PO Items Invoices Receivables Receivables/ Revenue/ Receipts Customers Inventory Activity
- 13. Copyright © 2007, Oracle. All rights reserved. 1 - 13 Summary You should be able to do the following: • Describe the procure to pay process flow • Describe the key areas in the procure to pay process • Describe how the procure to pay process fits into the Oracle E-Business Suite of applications
Editor's Notes
- Procure to Pay Lifecycle Sourcing Request for quote Supplier selection Contract negotiations and awards Catalog content management Ordering Requisition and purchase order generation Purchase order management and fulfillment Payment Reporting and Analysis Supplier performance Commodity analysis Internal compliance Robust intelligence gathering Decision support Process functionality
- Oracle Procure to Pay Process Demand The procurement process generates and manages requests for the purchase of goods. The demand for purchase items may be a one-time event or may recur in either predictable or random time intervals. Source The procurement sourcing process covers the business activities related to the search, qualification, and selection of suitable suppliers for requested goods and services. Order The procurement ordering process includes purchase order placement by the buying organization and purchase order execution by the supplying organization. Receive The receipt process acknowledges that a purchase order has been duly executed. For orders of physical goods, it will typically include the receipt, inspection and delivery of the goods to inventory or to another designated location. For orders of services, it will typically consist of a notification from the requester or the approving person that the service has been performed as agreed. Pay The payment process consists of those activities involved in the payment for ordered goods and services.
- Demand: Requisitions Requisitions represent demand for goods or services. Whether you want to provide online requisitions to everyone in the organization or limit the number of users who have access to the system, Oracle Purchasing is flexible enough to meet the needs of your organization. With online requisitions, you can centralize your purchasing department, source your requisition with the best suppliers, and ensure that you obtain the appropriate management approval before creating purchase orders from requisitions. Requisitions for goods and services: Are generated by applications like Inventory, Work in Process (WIP), Advanced Supply Chain Planning (ASCP) and Order Management May be entered manually through Oracle Purchasing windows May be entered using Oracle iProcurement May be imported from external systems With Oracle Purchasing, you can: Create, edit, and review requisition information on-line. You can enter suggested supplier information, delivery instructions, multiple accounting distributions, and notes to buyers, approvers, and receivers. Review the current status and action history of your requisitions. You always know who approves requisitions and whether they are in the approval, purchasing, receiving, or delivery stage. Route requisitions according to your approval structure. You can set authorization limits by amount, charge account, item category, and location. Review and approve requisitions that need your approval. You can see the full requisition detail and review the action history before you approve a requisition. Print requisitions (with status Approved, Cancelled, Rejected, In Process, Pre-Approved, and Returned) for off-line review and approval. You can always be able to track the status of requisitions through the approval process. Automatically source requisitions from outstanding blanket purchase agreements or quotations you have received from suppliers. Create requisitions quickly and easily for commonly purchased items. Provide attachments as notes on requisition headers and lines. Assign requisition lines to buyers and review buyer assignments for requisition lines. Forward all requisitions awaiting approval from one approver to an alternate approver. Within your security and approval constraints, you can reroute requisitions from one approver to another whenever you want. Source goods from your own inventory with internal requisitions.
- Source: RFQs and Quotations Oracle Purchasing provides you with request for quotation (RFQ), and quotation features to handle your sourcing needs. You can create an RFQ from requisitions, match supplier quotations to your RFQ, and automatically copy quotation information to purchase orders. Oracle Purchasing provides complete reporting to control your requests for quotations and evaluate supplier responses. Quotations can be: Entered manually Copied from an RFQ Imported using the Purchasing Documents Open Interface Imported using the e-Commerce Gateway With Oracle Purchasing, you can: Identify requisitions that require supplier quotations and automatically create an RFQ. Create an RFQ with or without approved requisitions so that you can plan ahead for your future procurement requirements. Record supplier quotations from a catalog, telephone conversation, or response from your request for quotation. You can also receive quotations electronically. Review, analyze, and approve supplier quotations that you want available to reference on purchase orders and requisitions. You can evaluate your suppliers based on quotation information. Receive automatic notification when a quotation or request for quotation approaches expiration. Review quotation information online when creating purchase orders or requisitions and copy specific quotation information to a purchase order or requisition. Source the items for which you negotiated purchase agreements automatically. If you created sourcing rules and approved supplier list entries for the items, supplier information can be entered automatically in the Requisitions window when you create requisitions. You can also place supplier information for items onto blanket purchase order releases. With Oracle Purchasing and Oracle Sourcing, you can: Initiate a buyers auction in Oracle Sourcing based on requisitions in Oracle Purchasing. Create RFQs and negotiations in Oracle Sourcing that result in purchase orders and purchase agreements in Oracle Purchasing. Collaborate on-line directly with suppliers to get the best terms and prices. With Oracle Purchasing and Oracle iSupplier Portal, you can: Enable suppliers to query RFQs and manufacturing planning statuses. Enable suppliers to maintain their production capabilities in Oracle Purchasing.
- Suppliers You must define a supplier before performing most activities within Oracle Purchasing and Payables. Once defined you can: Optionally enter a recommended supplier on a requisition Use a supplier to issue a request for quotation Use that same supplier when you enter a quotation Use supplier information for purchase orders Receive goods or services from suppliers Return goods to suppliers Pay the supplier for the goods or services purchased Set up suppliers to record information about individuals and companies you purchase goods and services from. You can also enter employees you reimburse for expense reports. You can designate supplier sites as pay sites, purchasing sites, RFQ only sites, or procurement card sites. For example, for a single supplier, you can buy from several different sites and send payments to several different sites. Most supplier information automatically defaults to all supplier sites to facilitate supplier site entry. However, you can override these defaults and have unique information for each site.
- Receiving Using Oracle Purchasing, you can process receipts from suppliers, receipts from other warehouses or inventory organizations, in-transit shipments and receipts due to customer returns. You can search for expected receipts based on a purchase order or a customer return recorded in Oracle Order Management and then process them to their final destination whether it is inventory, expense or shop floor. Oracle Purchasing lets you control the items you order through receiving, inspection, transfer, and internal delivery. You can use these features to indicate the quantity, quality, and internal delivery of the items you receive. With Oracle Purchasing, you can: Use routing controls at the organization, supplier, item, or order level to enforce material movement through receiving. For example, you can require inspection for some items and dock-to-stock receipt for others. Define receiving tolerances at the organization, supplier, item, and order level, with the lowest level overriding previous levels. You can define tolerances for receipt quantity, on-time delivery, and receiving location. You can assign looser tolerances to low-value items. You can set enforcement options to ignore, warn the user, or reject transactions that violate the tolerances. Use blind receiving to improve accuracy in the receiving process. With this option, the quantity due for each shipment does not show and quantity control tolerances are ignored. Use Express and Cascade receiving to process certain types of receipts more quickly. Use Advance Shipping Notices (ASNs) to save time in processing receipts. Record receipt of unordered items based on your item, supplier, or organization defaults. For example, if your organization does not allow receipt of unordered items, you should not be able to enter a receipt unless it can be matched to a purchase order shipment. Record the receipt of predefined substitute items. Record the receipt of services and labor. With Oracle iProcurement, you can: Receive orders from your desktop, bypassing the need for receiving department interaction.
- Invoicing Once you’ve received goods or service from your supplier, you’ll also receive an invoice. Using Oracle Payables you can record invoices in a number of different ways. With Oracle Payables you can: Enter invoices manually, either individually or in batches. Use the Invoice Gateway 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 Oracle iExpenses to enter employee expense reports using a web browser. Record credit card/procurement card invoices from transactions the credit card issuer sends to you in a flat file. Record Oracle Project related expense reports. Import EDI invoices processed with the Oracle e-Commerce Gateway. Import lease invoices transferred from Oracle Property Manager. Match invoices to purchase orders to ensure you only pay what you’re supposed to be paying for.
- Payment Once invoices have been validated, they can be selected for payment. Oracle Payables provides the information that you need to make effective payment decisions, stay in control of payments to suppliers and employees, and keep your accounting records up-to-date so that you always know your cash position. Oracle Payables handles every form of payment, including checks, manual payments, wire transfers, EDI payments, bank drafts, and electronic funds transfers. Oracle Payables is integrated with Oracle Cash Management to support automatic or manual reconciliation of your payments with bank statements sent by the bank. With Oracle Payables, you can: Ensure duplicate invoice payments never occur Pay only invoices that are due, and automatically take the maximum discount available Select invoices for payment using a wide variety of criteria Record stop payments Record void payments Review information on line on the status of every payment Process positive pay
- Overview of Application Integration This slide attempts to capture the complex interaction of Oracle Applications resulting from the Procure to Pay process. The key Oracle Applications that are integrated to perform this process are described below. Inventory Order Management and Purchasing, as well as other Oracle applications can use items defined in Oracle Inventory. If the item is designated as a planned item, demand can be generated in the form of requisitions and sent to Oracle Purchasing where purchase orders or blanket releases can be created to replenish inventory levels. Order Management Customer purchase orders can be recorded in Oracle Order Management. Goods are shipped to customers as defined by the sales order. After goods are shipped, customer invoices are sent to Oracle Receivables and inventory levels are updated. Any customers that are set up in Order Management are shared with Receivables and vice versa. Receivables Oracle Receivables maintains information about invoices received from Oracle Order Management and other sources. Invoices are sent to customers who respond by sending payments. You can use Receivables to record receipts against customer accounts. Receivables, revenue and cash receipts are interfaced to Oracle General Ledger. Purchasing Oracle Purchasing captures accounting information on requisitions and purchase orders. Purchase orders are sent to suppliers who respond by delivering goods or services and sending invoices that are processed in Oracle Payables. During the accounting period, accruals for goods set to accrue a liability on receipt are sent to Oracle General Ledger. At the end of the accounting period, accruals for goods and services set to accrue a liability at period end can be sent to General Ledger. Any suppliers set up in Purchasing are shared with Payables and vice versa. Payables Supplier invoices are entered into Oracle Payables and if appropriate, matched to purchase orders in Oracle Purchasing. During the matching process, the invoice distribution is copied from the purchase order (in the case of an expense) or the appropriate liability account (in the case of an inventory item). Payables, expenses and payments are interfaced to Oracle General Ledger. Invoices for asset purchases can be interfaced to Oracle Assets. Assets Assets from Payables and other sources are maintained in Oracle Assets. Assets are added, processed, depreciated and eventually retired. At the end of each asset period, accounting information is interfaced directly to Oracle General Ledger. General Ledger Oracle General Ledger receives accounting information from many Oracle applications. Once accounting information is imported, journals can be posted and account balances updated. When implementing Oracle Applications, creating a set of books consisting of an accounting calendar, currency and chart of accounts is one of the first steps that must be completed before setting up other applications.