Procure to Pay (P2P) is a business process which covers the process of requesting,

purchasing, receiving, paying for and accounting for goods and services.The procurement
function in a Business Organization can range from office supplies to shop floor inventory
required to manufacture goods for shipment.Procure to Pay (P to P) cycle is one of the
important business process cycles in Oracle Applications. The process flow remains the same
across various versions of Oracle Apps viz. 11i, R12 with slight variations in the options that
are present in each version.The P to P cycle is implemented by multiple modules which are
part of the EBS Suite. The primary modules are Purchasing and Payables with an integration
with other modules like iProcurement, iSupplier, iExpenses , Services Procurement,
Sourcing, Procurement Contracts, Approval Management, EBTax, and Payments.
Sometimes considered as an another module, SubLedger Accounting is a functionality which
is integrated into other modules to generate accounting entries for transactions generated for
those modules.

This article discusses the steps involved in a Procure to Pay (P to P) cycleapplied in many
business organizations.
The following is a high level process flow diagram of Procure to Pay cycle. It details the series
of transactions from procurement to payment and final accounting.Organization Structure to
understand Procure to Pay cycle process flow

The Procure to pay cycle is tightly linked to the organizational structure. Hence, it is
important to first understand the organization structure of the business (also referred to as ‘Org
Structure’ in ERP consulting parlance) to understand the business process flows. The
organization structure specified in this article is based on the Multi-Organization concepts as
applicable to Oracle Apps R12 version.

To give an illustration of why this is important, consider the following example. When there is a
requirement for a specific item to be procured, it is essential to know which inventory
organization (say Chicago manufacturing plant) in the Organization Structure has the
requirement for that item. It is also essential to know the Operating Unit (XYZ Sedan)
corresponding to the Inventory Organization for which the requisition is being made.

While creating a requisition, the details of both Operating Unit and Inventory Organization
would have to be provided. Hence, having a pictorial representation of the organization
structure as follows helps.

The Organization Structure represented in the diagram below can be interpreted as follows:
1. There is a single Business Group called ‘XYZ Group’ which is like a parent group for all
the legal entities. A Business Group is not a legal entity and is not a registered enterprise.
2. The Primary Ledger is required for recording all the financial transactions.The 3 primary
ledgers are ‘XYZ Motors Ledger US’ ‘XYZ Motors Ledger India’ and ‘XYZ Cement Ledger’.
3. There can be one or more Legal Entities. Legal Entities require compliance with local
laws both legal and accounting related. In this example, there are 3 Legal Entities viz. ‘XYZ
Motors US’, ‘XYZ Motors India’ and ‘XYZ Cement China’.
4. Operating Units are defined for each Legal Entity. A Legal Entity can have one or
more Operating Units. The transactions in each Operating Unit are recorded in the Primary
Ledger tagged with that Operating Unit. In this example, there are 2 Operating Units for the
Legal Entity ‘XYZ Motors US’ and 1 Operating Unit for the Legal Entity ‘XYZ Motors India’ and
‘XYZ Cement’
5. Inventory Organizations are defined for each Operating Unit. These represent the units
where actually production/manufacturing may take place. In the diagram, there are one or
more inventory organizations for each Operating Unit. Multi Organization Structure in Oracle
Apps R12

2.How to create a Purchase Requisition in Oracle Apps

Purchase Requisition is a formal request intended to procure/buy something that is needed by

the organization. It is created and approved by the department requiring the goods and
services.

A purchase requisition typically contains the description and quantity of the goods or services
to be purchased, a required delivery date, account number and the amount of money that the
purchasing department is authorized to spend for the goods or services. Often, the names of
suggested supply sources are also included.

Basically, requisitions are of two types:

Internal requisition and Purchase requisition

Internal Requisitions are created if the Items are to be obtained from one Inventory location
to another location within the same organization. Here the source of the requisition would
be INVENTORY. There is no approval process for internal requisition.

Purchase Requisitions are created if the goods are obtained from external suppliers. Here
the source of the requisition would be SUPPLIERS. The purchase requisitions are sent for
approvals.

Let’s create a Purchase Requisition:

Navigation: Purchasing responsibility >> Requisitions >> Requisitions

Requisition is divided into two parts: header and lines

The header holds the general information about the requisition that is related to all the lines
where as the lines have the specific information about the item to be purchased
Choose the requisition type (here it is purchase requisition). Preparer is the default person who
is creating the requisition and cannot be changed. Item requester can be different from
preparer. You can give the description in the description field.

Navigate to lines tab and select the item that you wanted to purchase and enter the quantity
and need by date. Purchase Requisition In the Source details tab, you can input detailed
information. You can give a specific note to the buyer which might give particular information
related to this purchase. You can also add buyer’s name.

RFQ required check box denotes that the purchase of the item requires a request for quote

Document type, document and line are all completed by EBSautomatically when a
requisition is created from a blank order, a contract or a quotation.

Global is checked when a blanket purchase agreement for the entire organization exists for
the item being purchased

Owning organization displays the organization who owns the agreement. This feature is
usually seen when an organization is using a centralized purchasing model.

Contract num along with rev references the associated contract agreement with the supplier
for specific terms and conditions

You can further add extra description in the details tab. You can notify supplier that the item is
needed urgently by checking urgent checkbox.Note to receiver might give some information
to the receiver when he receives the item. Transaction nature describes the nature of
transaction. You can enter a reference number which provides a reference to a document in
another system such as a work order. You can select UN number and hazard from list of
values.

Requisitions can be added in any currency set up in EBS by identifying thecurrency

code and exchange rate type on currency tab

Select the Distributions tab and enter the charge account Entering the Charge Account

Close the form and save your work. You will now notice that ‘Approve’button is highlighted.
Click the ‘Approve’ button to submit this requisition for approval.Approve button is
highlightedSubmit for Approval
 Click ‘OK’ button to send the Approval notification to the concerned person. Approval
Hierarchies are used to route the documents to the concerned person for Approval. The
document can be ‘approved’ or ‘rejected’.

You can always check the ‘Status’ of your ‘requisition’ by navigating to‘Requisition
summary’. Here you can get your ‘requisition’ details by entering your requisition number.

Requisitions>> Requisition Summary Requisition Summary

Here, our requisition is approved. You can also view the ‘Action History’ of the requisition by
navigating to Tools>> Action History.

Here the sequence of the steps involved (who has submitted the requisition, and who has
approved/ rejected the requisition) is shown: Action History of a Purchase Requisition Table
flow while creating Purchase Requisition

The base tables for reference while creating a purchase requisition in Oracle Apps is as
follows:

1. PO_REQUISITION_HEADERS_ALL (SEGMENT1 column in this table represents the

requisition number)

This table stores Header information of a Purchase Requisition.

Important columns of this table:

REQUISITION_HEADER_ID: It is a unique system generated Requisition identifier

PREPARER_ID: It is a unique identifier of the employee who prepared

the requisition

SEGMENT1: It is the Requisition number

AUTHORIZATION_STATUS: Authorization status type

TYPE_LOOKUP_CODE: Requisition type

ORG_ID: Unique Operating unit unique identifier

You can get REQUISITION_HEADER_ID by executing the following command:

Select REQUISITION_HEADER_ID FROM PO_REQUISITION_HEADERS_ALL WHERE

SEGMENT1= 14303; –14303 is our Requisition Number

Result: REQUISITION_HEADER_ID = 181232

REQUISITION_HEADER_ID is the link

betweenPO_REQUISITION_HEADERS_ALL and PO_REQUISITION_LINES_ALL

2. PO_REQUISITION_LINES_ALL

This table stores information about Requisition lines in a Purchase Requisition. This table
stores information related to the line number, item number, item category, item description,
item quantities, units, prices, need-by date, deliver-to location, requestor, notes, and
suggested supplier information for the requisition line.

Important columns of this table:

REQUISITION_HEADER_ID: It is a unique system generated Requisition identifier

REQUISITION_LINE_ID: Link between PO_REQUISITION_LINES_ALL And

PO_REQ_DISTRIBUTIONS_ALL

LINE_NUM: Indicates the Line number

LINE_TYPE_ID: Indicates the Line type

CATEGORY_ID: Unique Item category identifier

ITEM_DESCRIPTION: Description of the Item

QUANTITY NUMBER: Quantity ordered
SELECT REQUISITION_LINE_ID FROM PO_REQUISITION_LINES_ALL WHERE
REQUISITION_HEADER_ID=181232;

Result: REQUISITION_LINE_ID = 208442

3. PO_REQ_DISTRIBUTIONS_ALL

This table stores information about the accounting distributions of a requisition line. Each
requisition line must have at least one accounting distribution. Each row includes the
Accounting Flexfield ID and Requisition line quantity.

Important columns of this table:

DISTRIBUTION_ID: Unique Requisition distribution identifier

REQUISITION_LINE_ID: Unique Requisition line identifier
CODE_COMBINATION_ID: Unique General Ledger charge account identifier
DISTRIBUTION_NUM: Distribution number

SELECT DISTRIBUTION_ID FROM PO_REQ_DISTRIBUTIONS_ALL WHERE

REQUISITION_LINE_ID= 208442;

Result: DISTRIBUTION_ID= 206959

You can view results by executing the following SQL commands:

SELECT CREATION_DATE, AUTHORIZATION_STATUS, SEGMENT1,

TYPE_LOOKUP_CODE from PO_REQUISITION_HEADERS_ALL where
SEGMENT1= ’14303′;
 Viewing results by executing SQL command

SELECT CREATION_DATE, CREATED_BY, ORG_ID, REQ_LINE_QUANTITY FROM

PO_REQ_DISTRIBUTIONS_ALL WHERE REQUISITION_LINE_ID=208442; viewing results
by executing SQL command

Steps to create a Request for Quotation (RFQ) in Oracle Apps

A Request for Quotation (RFQ) is a formal request sent to the suppliers to find the pricing
and other information for an item or items. Based on the information supplied, the supplier
quotes a quotation against the RFQ form.

In general, RFQ’s are created before purchasing any item to actually know the price quotes
from one or more suppliers.

In Oracle EBS, RFQ’s can be auto created from an existing Purchase Requisition or can be
a fresh RFQ.

Let’s auto create RFQ from an existing Purchase Requisition.

(Note: by selecting Auto Create, the system automatically fills the data in the form based on
the details provided in the Purchase Requisition form. For a new RFQ, we need to enter the
data manually)

Navigate to Purchasing>> Requisitions>> Requisitions Summary to find a requisition

number.
 Requisition Headers Summary

I will auto create RFQ from an existing Purchase Requisition (here it is 14303).

Navigate to Purchasing>> Auto Create

Press Clear button and enter your Requisition number and click find

Find Requisition Lines

Your Requisition summary is shown in the next screen. Check box yourRequisition line and
in the Document Type, select RFQ and clickAutomatic button to Auto Create RFQ.Auto
Create documents

It will navigate to a new window. Here the RFQ Type is Standard RFQ and click create button

New Document

In the next window, RFQ form is auto created from an existing Purchase requisition.

Auto Create RFQ

Click Suppliers button and enter the details of the Suppliers to whom you want to send
this RFQ.

RFQ Suppliers
Click on Terms button and add payment terms and freight terms.

RFQ Terms

Click Price Breaks button

The Price Breaks form is generally used to enter pricing information for theRFQ and to
negotiate/bargain with the suppliers by asking a discount. You can also provide multiple price
breaks to receive a different quotation from the suppliers by altering payment terms, quantity
etc.

RFQ Price Breakdowns

In the above picture, the first line shows the actual quantity is 250and the actual price is 10. In
the second line, we have asked for a discount of 5% and the price has changed to 9.5. In the
third line, we have increased the quantity of items to 350 and asked for a 15% discount. Notice
that the price is changed to 8.5.

This way the above form is used for negotiation and price break up.

Close the form.

Change the status to Active and save the RFQ.

 RFQ

Now the RFQ is Auto Created from an existing Purchase Requisition and now we need to
send this form to the Suppliers we selected in the aboveRFQ form.

Run the Concurrent Request called Printed RFQ Report to print this RFQ to send it to the
suppliers

How to Create Quotation and Perform Quote Analysis in Oracle Apps

A quotation is a supplier’s response to RFQ. In this article we will discuss how a quotation can
be prepared from RFQ form.

Create a Request for Quotation (RFQ). Refer below article on how to create a RFQ form.
 RFQ

The above picture shows a completed RFQ form. Now we will createquotations based on the
response from the suppliers with relevant to thisRFQ form.

Navigate to Tools>> Copy Document

 Copy RFQ document

Here we have selected first supplier and entering the quotation sent by the supplier. Click OK
button.

Quotation number

Similarly repeat the above step for the other two customers and click OK.

You should get three new quotations against the three suppliers. (Here my quotation numbers
are 500, 501 and 502).

Navigate to RFQ’s and Quotations>> Quotations

Query for Quotation (500)

 Quotation

Notice that the quotation has been created from RFQ number 307. Change
the status to Active. Similarly repeat the steps for Quotation number 501and 502 and save it.

Quote Analysis

Quote analysis is the process of reviewing the quotations given by the suppliers. The best
quotation will be selected by analyzing certain factors like price, quality, delivery time etc.

Navigate to RFQ’s and quotations>> Quote Analysis

Query by RFQ number and click Find button

Find Quotations
 Analyze Quotations

Here you can analyze all the quotations sent by the suppliers and select the best supplier and
click Approve Entire Quotation button
 Approve Entire Quotation

Click OK

The next step is create a Purchase Order based on this Quotation

Steps to create a Purchase order (PO) in Oracle Apps

A Purchase order is a commercial document and first official order issued by the buyer
to the supplier, indicating types, quantities, and agreed prices for products or services
the supplier will provide to the buyer.

Basically, there are four types of Purchase Orders, viz

Standard Purchase Used for One-time purchases for goods and

Order services. Here you know the item, price, payment
terms an delivery schedule

Planned Purchase Created when you have long-term agreement with

Order the supplier. You must specify the details of goods
and services, payment terms and the tentative
delivery schedule

Blanket Purchase Created when the details of items and services,

Agreement payment terms are known but not specific about the
 delivery schedule

Contract Purchase Created when the terms and conditions of a

Agreement purchase are known but specific goods and services
are not.

Let’s create a Standard Purchase Order.

Here, we will Auto Create a Purchase Order based on Approved Requisition.

Navigation: Purchasing>> Auto Create

Enter requisition number and click Find to navigate to Auto Create documents window

Find Requisition lines

 Auto Create Document

Select your Requisition Line by ticking the check box next to the Requisition Line
Action: Create

Document Type: Standard PO

Grouping: Default

Click Automatic button and click create button in the New Document form. By
clicking Automatic button, a standard PO is created based on the details provided in the
Purchasing requisition.

You can select Supplier either in the New Document form or in thePurchase Order form

New document
 Auto Create to PO

Status represents the status of the document. Incomplete is the default status for all
purchase orders until they are submitted for the first time for approval.

Click Shipments button.

Shipment number, Org, Ship-to, UOM, Quantity and Need-by-date are shown by default.
These fields can be edited as needed. You can split the lines and can change the ship-to
Organization, quantity of items to be shipped and delivery date.
[you can request the supplier to supply some of the quantities to be supplied by the need-by
date you provided and rest of the quantities (to the same ship-to address or a different address)
to a different need-by-date]

Shipments

Click More tab. The default values are generated

 Shipments

Receipt Close Tolerance (%) determines when this line will close for receiving

Invoice Close Tolerance (%) determines when this line will close for invoicing

A Purchase Order has three main close points: Closed for Receiving,Closed for
Invoicing (these two relate to a specific line) and Purchase Order itself has a closed status.

The entire order will not close automatically if all the lines are not closed for both receiving and
invoicing. A tolerance of 0% indicates that it will close when the total amount received or
invoiced equals the amount on the order, whereas a close tolerance of 100% indicates that no
receipts or invoices are required for this order, which will close the lines for receiving as soon
as the order is approved. Reviewing these default close tolerances on a regular basis is a
good idea to ensure orders are properly controlled and closed with minimal intervention by the
purchasing agent.

Select an option at Match approval Level

This determines the close point for an order.

2-way determines Purchase Order and Invoice quantities must match with in the tolerance
before the corresponding invoice can be paid.

Quantity Billed = Quantity Ordered

Invoice Price = Purchase Order Price

3-way determines Purchase order, receipt, and invoice quantities must match within tolerance
before the corresponding invoice can be paid.

Quantity Billed = Quantity Ordered

Invoice Price = Purchase Order Price

Quantity Billed = quantity Received

4-way determines Purchase order, receipt, accepted, and invoice quantities must match within
tolerance before the corresponding invoice can be paid.

Quantity Billed = Quantity Ordered

Invoice Price = Purchase Order Price

Quantity Billed = quantity Received

Quantity Billed= Quantity Accepted

Select an Invoice Match Option

The Invoice Match Option determines whether the invoice will be matched to the Receipt or
the PO when using 3-Way matching

Select PO when using 2-way and select PO or Receipt for 3-Way.

Enter the Receiving control information by clicking Receiving Controlsbutton

Receiving Controls

Enter distributions for the shipments by clicking Distributions button

 Distributions

Click on More tab. The Requisition number from which this Purchase Order has been created
is shown by default.
 Distributions

Click Terms to enter terms, conditions, and control information for purchase orders.
 Terms

Click Currency button to enter and change currency information

Save your work and click Approve button for Approval process.
 Approve Document

Click OK and check the status in the Purchase Order

Base tables for Purchase Order (PO) in Oracle Apps

Base tables for Purchase Order are as follows:

1. PO_HEADERS_ALL (SEGMENT1 column in this table represents the Document

number)

This table stores header information of a Purchasing Document. You need one row for each
document you create.
The following are the documents that use PO_HEADERS_ALL

RFQ’s, Quotations, Standard Purchase Order, Planned Purchase Order, Blanket

Purchase Order and Contracts

Important columns of this table:

PO_HEADER_ID, SEGMENT1, TYPE_LOOKUP_CODE, VENDOR_ID, VENDOR_SITE_ID,

CLOSED_CODE

PO_HEADER_ID is a unique system generated primary key and is invisible to the users.

SEGMENT1 is the document number

You can uniquely identify a row in PO_HEADERS_ALL using ORG_ID, SEGMENT1, and
TYPE_LOOKUP_CODE, or using PO_HEADER_ID.

Sample queries:

SELECT PO_HEADER_ID, TYPE_LOOKUP_CODE FROM PO_HEADERS_ALL WHERE

SEGMENT1= ‘311’;

SQL Query

SELECT PO_HEADER_ID, AGENT_ID, TYPE_LOOKUP_CODE, CLOSED_CODE FROM

PO_HEADERS_ALL WHERE SEGMENT1= ‘6044’;
2. PO_LINES_ALL

This table stores the line information of a Purchasing Document.

Important columns of this table:

PO_LINE_ID: Unique identifier of the Document Line

PO_HEADER_ID: Unique identifier of the Document Header (with reference to

PO_HEADERS_ALL, PO_LINE_ID)

LINE_TYPE_ID: Unique identifier of Line_Type (with reference to

PO_HEADERS_ALL, PO_LINE_ID and PO_HEADER_ID)

LINE_NUMBER: Line Number

ITEM_ID: Unique Item Identifier

ORG_ID: Unique Identifier of the Operating Unit

CLOSED_CODE: Status of the Document

Sample Queries:

SELECT PO_LINE_ID FROM PO_LINES_ALL WHERE PO_HEADER_ID= 110334;

 SQL Query

SELECT LINE_TYPE_ID FROM PO_LINES_ALL WHERE PO_HEADER_ID= 110334 AND

PO_LINE_ID= 173263;

3. PO_LINE_LOCATIONS_ALL

This table contains the information related to purchase order shipment schedules and blanket
agreement price breaks. You need one row for each schedule or price break you attach to a
document line.

There following are the seven documents that use shipment schedules:

1. RFQs
2. Quotations
3. Standard purchase orders
4. Planned purchase orders
5. Planned purchase order releases
6. Blanket purchase orders
7. Blanket purchase order releases
Each row includes the location, quantity, and dates for each shipment schedule. Oracle
Purchasing uses this information to record delivery schedule information for purchase orders,
and price break information for blanket purchase orders, quotations and RFQs.

The following are the important columns of this table:

LINE_LOCATION_ID: Unique Identifier of Document shipment schedule

PO_HEADER_ID: Unique Identifier of Document header. (with reference to

PO_HEADERS_ALL.po_header_id.)

PO_LINE_ID: Unique Identifier of Document line (with reference to

PO_LINES_ALL.po_line_id)

QUANTITY: Quantity ordered for Purchase Orders, RFQs and

Quotations

QUANTITY_RECEIVED: Quantity received until today

QUANTITY_ACCEPTED: Quantity accepted after inspection

QUANTITY_REJECTED: Quantity rejected after inspection

QUANTITY_BILLED: Quantity invoiced by Oracle Payables

QUANTITY_CANCELLED: Quantity cancelled

TAXABLE_FLAG: indicates whether the shipment is taxable

ORG_ID: Operating unit unique identifier

SHIP_TO_ORGANIZATION_ID: Unique identifier of Ship-to organization

Sample Queries:

SELECT LINE_LOCATION_ID FROM PO_LINE_LOCATIONS_ALL WHERE

PO_HEADER_ID= 110334 AND PO_LINE_ID= 173263;
 SQL Query

SELECT QUANTITY, QUANTITY_RECEIVED, QUANTITY_ACCEPTED,

QUANTITY_BILLED, QUANTITY_REJECTED, ORG_ID FROM
PO_LINE_LOCATIONS_ALL WHERE LINE_LOCATION_ID= 264421;

SQL Query

4. PO_DISTRIBUTIONS_ALL

This table contains the information related to accounting distribution of a purchase order
shipment line. You need one row for each distribution line you attach to a purchase order
shipment. There are four types of documents using distributions in Oracle Purchasing:

1. Standard Purchase Orders

2. Planned Purchase Orders
3. Planned Purchase Order Releases
4. Blanket Purchase Order Releases
Each row includes the destination type, requestor ID, quantity ordered and deliver-to location
for the distribution.

Important columns of this table:

PO_DISTRIBUTION_ID: This is the primary key for this table. It is a unique
Document Distribution identifier.

PO_HEADER_ID, PO_LINE_ID

LINE_LOCATION_ID: Unique Identifier of the Document Shipment Schedule (with

reference to PO_LINE_LOCATIONS_ALL, LINE_LOCATION_ID)

CODE_COMBINATION_ID: Unique Identifier of General Ledger Charge Account (with

reference to GL_CODE_COMBINATIONS.CODE_COMBINATION_ID)

REQ_DISTRIBUTION_ID: Unique Identifier of a Requisition distribution (with

Reference to PO_REQ_DISTRIBUTIONS_ALL.DISTRIBUTION_ID)

Sample Queries:

SELECT PO_DISTRIBUTION_ID FROM PO_DISTRIBUTIONS_ALL WHERE

PO_HEADER_ID= 11033;

SQL Query

SELECT CODE_COMBINATION_ID FROM PO_DISTRIBUTIONS_ALL WHERE

PO_DISTRIBUTION_ID= 13033;

SQL Query
5. VENDORS_ALL

This table stores the general information about the suppliers.

6. PO_VENDOR_SITES_ALL

This table stores information about the supplier sites. Each row includes the site address,
supplier reference, purchasing, payment, bank, and general information.

7. PO_RELEASES_ALL

This table stores information related to planned and blanket Purchase Order releases. Each
row includes the buyer, date, release status, and release number. Each release must have at
least one purchase order shipment.

8. PO_VENDOR_CONTACTS

This table stores information about contacts related to Supplier site. Each row includes contact
name and site.

9. PO_ACTION_HISTORY

This table stores information about the approval and control history of a Purchasing Document.
This table stores one record for each approval or control action an employee takes on a
purchase order, purchase agreement, release or requisition.

Creating Receipts in Oracle Apps

Receipts are created to receive the items based on a Purchase Order

Navigation>> Receiving>> Receipts

Enter the PO number and click Find button or you can simply click on Findbutton to see the
expected receipts.
 Finding a receipt

Check the Lines you want to receive.

In the lower part of the screen, Purchasing displays the following detail information for the
current shipment line: Order Type, Order Number, Source, Due Date, Item Description,
Hazard class, Destination, UN Number, Receiver Note, and Routing.
 Receipt

Click on Header and save the receipt to get the receipt number
 Receipt Header

Navigate back to Purchase Order, query for your Purchase Order and
selectShipments button and click on Status tab to verify that the quantity ordered items
match the quantity received and status should be ‘Closed for Receiving’

Shipments
Verify Items in Inventory

Navigate to Inventory>> On-Hand, Availability>> On-Hand Quantity

Query by your Item number and click Find

Query Material
 Material Workbench

Click Availability
 Availability

Creating and Making payments for an Invoice in Oracle Apps

Entering the Supplier Invoice

This is the first step in creating an Invoice. You can manually enter the details in the Invoice or
you can generate Invoices from P.O Receipts (you need to run a Concurrent Request
named ‘Pay on Receipt AutoInvoice Program’ from Purchasing Module)
Navigate to Payables>> Invoices>> Entry>> Invoices

Select your Operating unit

Type: Standard

Enter P.O number and press tab. Supplier details should be populated automatically. Enter the
Invoice date, Invoice number and Amount.

Invoice Workbench

Matching the Invoice to either a Purchase Order or a Receipt

If your Invoice has a Purchase Order associated with it, then you can match the invoice
quantity and price to that Purchase Order. If your Purchase Order is setup as a 2 –way
match, then you match the Invoice to the Purchase Order lines. If your Purchase Order is
setup as a 3-way match, then you match the Invoice to the Receipts.
Click on Match button to match the Invoice to the Purchase Order.

Matching Purchase order

Click Find

Select the lines you want to match and click Match

 Match to Purchase order

Validating the Invoice

Once the invoice is entered into the system, you will need to run the Invoice Validation Process
to validate the Invoice. This can be done by clickingActions button or running an ‘Invoice
Validation Process’.
The validation process performs a couple of processes. First, it checks to see if should apply
any matching holds. Then it will calculate and apply taxes, verify the GL period status, verify
exchange rates, and verify distribution information is valid.

Go to Actions, select Validate and click Ok.

Invoice Actions
The status should be Validated or Needs Revalidation.

Here my status shows as Needs Revalidation

The reason it says Needs Revaluation because after Validating the Invoice, the tax has been
calculated and the price is updated which included the calculated price. So we need to update
the price at the top and dovalidation again.

Invoice Workbench
 Now the status should be validated. Invoice Workbench

Now the Invoice has been Validated, it’s time to make payment to the Supplier. Click Actions,
Pay in Full and OK.Enter the Payment date, Bank Account, Payment Method, Payment
Process Profile, payment Document and Document Number and save your work.

Click Invoice Overview to view the Invoice details.

Click Invoice Workbench and click Actions button and select Create Accounting and select
Final Post and click OK.The status of Accounted should be Yes. This step should transfer the
details into the General Ledger. Go to Tools and click View accounting Events to see the
result. Go to View>> Request>> Find to see the Concurrent Programs that are generated.

1. Run the Create Accounting program after creating an invoice to post entries to the
General Ledger

2. Run the Create Accounting program after making payments to post entries to the
General Ledger.

As a newbie consultant, I always used to wonder why someone would have run the accounting
entries twice. If you are one of the professional consultants or belong to the Chartered
Accounting fraternity, you may already know the answer.

Else, read on..

1. The reason for creating accounting entries after creating an invoice is to ensure that the
General Ledger is updated with the correct accounting information for the following 2 types of
accounts:
a) Accounts Payable A/C
b) Merchandise A/C (incase of goods purchased) or Expense A/C (in case of
expense)When a supplier invoice is created, the business is liable to pay for the invoice and
hence, the Accounts Payables A/C is credited. Since the invoice is raised for purchasing
goods or for an expense, the correspondingMerchandse A/C or Expense A/C is debited.

Account Dr Cr

Merchandise A/C or 100

Expense A/C

Accounts Payable A/C 100

2. The reason for creating accounting entries after making a payment is to ensure that the
General Ledger is updated with the correct accounting information for the following 2 types of
accounts:

a) Cash A/C or Bank A/C

b)Accounts Payable A/C

When the invoice is paid, the payment is made in Cash. Hence the Cash A/C or Bank
A/C is credited. Since the payment reduces the amount that the company owes to the
Supplier, the Accounts Payable A/C is debited to the same extent.

Account Dr Cr

Accounts Payable A/C 100

Cash A/C 100