Procure 2 Pay (P2P)

Oracle developed P2P process for integration; this process is suitable for any type of organization or
industries.

Request for Quotation

Requisitions Quotation
Quotation (RFQ) Analysis

Purchase
Order

Supplier

GRN

Cash clearing Payment Invoice

P2P Cycle

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P2P Process and General Entries

Up to PO no General Entries

1. Requisition  No JV
2. RFQ  No JV
3. Quotation  No JV
4. QA  No JV
5. PO  No JV
6. GRN  Receivable inventory DR
AP accrual CR
7. Goods moved to sub inventory (On Completion of inspection and goods accepted, it is in 4 way
matching only)
Inventory DR
Receiving Inventory CR
8. Invoice  AP accrual DR
Supplier Liability CR
9. Payment  Supplier Liability DR
Cash clearing CR
10. Cash  Cash clearing DR
Cash or Bank CR
 In P2P Cycle three Departments will involve
Inventory department
Purchase department
Accounts Payable department
 It start with Requisition and ends with payment

Expenses Invoice

1. Invoice  Expenses DR

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 Supplier Liability CR
2. Payment  Supplier liability DR
Cash Clearing CR
3. Cash  Cash Clearing DR
Cash CR

Matching Ways
We have 3 ways of matching

4. Two way matching (INV with PO)

5. Three way matching (INV with PO and GRN)
6. Four way matching (INV with PO, GRN and DC(inspection))
In this matching we have one extra entry for inspection
Goods moved to sub inventory (On Completion of inspection and goods accepted)
Inventory DR
Receiving Inventory accrued CR

Roles to be assign to the user

Procurement related roles

1. Procurement Manager
2. Procurement requester
3. Procurement preparer
4. Advanced Procurement requester
5. Buyer

Inventory related roles

6. Inventory Manager
7. Warehouse Manager
8. Warehouse operator

Setups
1. Assign Business unit business function for procurement
2. Create Inventory Location
3. Define Facilities for procurement
a. Manage Facility shifts
b. Manage Facility workday pattern
c. Manage Facility Schedule

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 4. Manage Item Master organization
5. Manage inventory organization
6. Configure procurement business function
7. Configure requisition business function
8. Manage Common options for Payables and Procurement
9. Manage receiving parameters
10. Procurement agent
11. Manage transaction definition tab (TAD) Purchasing TAB
12. Manage Data Access to user
13. Create sub inventory
14. Create Item Classes
15. Create item and assign to inventory

1. Assign Business unit Business Functions

This set up already done in the Payable set up but we make sure procurement related options should
be enable in this

Go to set up and maintenance

Set up: Financials/Procurement
Functional area: Organization structures
Task: %Assign% business% unit% business% function%
Select Assign business unit business function
We should enable the Procurement, Requisitioning, Receiving and Material Management

Save and Close

2. Manage locations for Inventory (HCM)

We have to create location for enterprise (Head office), all the stock related information, stock
brokers, marketing related information and all the business information will maintain here. Payroll
comes into legal entity level. Head office nothing but that is going to looking some place that is the
purpose we have to create location

Go to set up and maintenance

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 Set up: Procurement/Financials
Functional area: Enterprise profile
Task: %Manage% location%
Select Manage Locations
Click on + to create location
Under basic details we have location set as common set(default) but we have to change as our
data set likewise give the all information like contact details, legislative information(trade name:
if it is MNC we have trade name given by exchange)

Give the address details

Click on Review for your understanding if the information is right or wrong

Save and submit

3. Define Facilities for Procurement

In EBS when you create inventory organization we assigned workday calendar it is mandatory. Here the
same calendar is calling as Facilities

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 1. Manage Facility Shifts
Go to set up and maintenance
Set up: Procurement
Functional area: Organization structures
Task: %Manage %facility %shifts%
Select Manage Facility Shifts
Click on + icon to create shifts
Give the shift details

Save and close

2. Manage Facility Work day pattern

Go to set up and maintenance
Set up: Procurement
Functional area: Organization structures
Task: %Manage %facility %workday %pattern%
Select Manage Facility Workday Pattern
Click on + icon to workday
Give the workday details length in days 7 working days and assign facility shift

Save and Close

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 3. Manage Facility Schedules
Go to set up and maintenance
Set up: Procurement
Functional area: Organization structures
Task: %Manage %facility % schedule %
Select Manage Facility Schedules
Give the details and go to schedule tab and click on + icon and assign the workday pattern here

Save and close

4. Manage Item Master Organization (IMO)

For more details click on the below link
https://www.youtube.com/watch?v=be9J-METNJc

Go to set up and maintenance

Set up: Financials/Procurement
Functional area: Organization structures
Task: %Manage %item % organization%
Select Manage Item organization
Click on + to create item master org
Give the BU name, Legal entity name, and Location details

Click on Next and give the master org details and save

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 Click on save and close

5. Manage inventory organization

It is nothing but where we identify to maintain physical on hand stock.

Go to set up and maintenance

Set up: Financials
Functional area: Organization structures
Task: %Manage %inventory% organization%
Select Manage inventory organization
Click on + to create inventory child org
Give the BU name, Legal entity name, and Location details

Click on Next and give the schedule(predefined one) and item master organization

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 o Schedule : Work day calendar (Shifts, holidays etc)
o Starting Revision : Its falls under inventory controls
o Locator control: It’s clearly tell the exact place of goods means items, we can maintain
inventory or item level if you enable at inventory level we can follow for another goods
also so we can do at item level
o Allow negative balances: When we don’t have items in the unit but we have to adjust
somewhere that’s the reason we have to enable it
o Allow negative on-hand transaction: When we don’t have on hand items but we have to
send/ distribution the item if you enable this system allow the items to send
Click on save and close

6. Configure procurement business function

This is place where define document types (Standard, Contract and Blanket PO, etc.)

Go to set up and maintenance

Set up: Procurement
Functional area: Procurement Foundation
Task: %configure% procurement%
Select Configure procurement business function
Select the BU and click on ok
Give the details under General tab in Main tab
Payment terms, shipping method, freight terms, FOB, inventory org, line of goods, currency and
currency conversion rate

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 Under purchasing tab give the details like maximum file size and match approval level
Ignore sourcing and save it

Then go to Document types tab

Here we can see the PO types like Blanket Contract and Normal PO
In cloud Planned PO is not their
In cloud no need of hierarchy
In SAAS we can’t do the changes In PAAS you can do customization
Here you can change the names

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7. Configure requisition business function

Go to set up and maintenance

Set up: Procurement
Functional area: Procurement Foundation
Task: %configure% requisition%
Select Configure requisition business function
Select the BU and click on ok
Give the details under requisition default deliver to organization should be child org

Save and close

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8. Manage common options for payables and procurement
Go to set up and maintenance
Set up: Financials/Procurement
Functional area: payables
Task: %manage% common% option%
Select Manage common options for payables and procurement
Scope should be your BU
Give the default distribution and currency conversion options

 Click on Save and close

9. Manage receiving parameters

Go to set up and maintenance

Set up: Manufacturing and supply chain materials managements
Functional area: Receiving
Task: %manage% receive% parameters%
Select manage receiving parameters
One pop will come in this we have to give the Inventory organization (For all Inventory
organizations) then save and close

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10. Procurement agent
Why should we create procurement agent: In real time procurement agent will create the supplier site but
this is demo instances so we must create employee as a procurement agent.

 Go to setups & maintenance

 Setup: Procurement
 Functional area: Procurement Foundation
 Task: %Manage% Procurement% Agents%
 Select Manage Procurement Agents
 Click on + to create procurement agent
 Give the details of procurement BU and agent details

 Click on save and close

11. Manage Transaction Account Definition (TAD)

When you create the transactions, Requisitions and purchase orders system has to derived that basic
accounts, In case of EBS we specified this accounts in the purchasing options and we have a different
options in EBS where we specify the accounts but here the accounts specify by using PO-TAB
(Purchasing- Transaction Accounting Builder) by using this setups only you can setup bellow accounts

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like accrual account, charge account and variance account Destination charge and Destination variance
account. Receipt accounting and cost accounting related accounts which come under core HCM part.
Destination charge and Destination variance account is not mandatory

1. Manage Account Rules

For Accounts rules we have to assign for 5 Accounts

1. Accrual account
2. Charge account
3. Purchase price variance
4. Destination charge
5. Destination variance

These destination and destination variance account not mandatory when you deal with the centralized
Procurement process then only it’s required

Go to set up and maintenance

Set up: Procurement
Functional area: Procurement Translation account rules
Task: %manage %account %rules%
Select Manage account rules
Click on + to create rules
Give the rules and click on + to under Rules tab
1. Accrual account
 Give the details and go to rules tab and click on + to create rule
 If you create the mapping rule the keep it as mapping set under value type otherwise keep it as
constant and give the code combination (It should be Accrual account), Sub Ledger application
should be Purchasing

 Save and close

2. Charge Account

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  Give the details and go to rules tab and click on + to create rule
 If you create the mapping rule the keep it as mapping set under value type otherwise keep it as
constant and give the code combination (It should be Charge account), Sub Ledger application
should be Purchasing

 Save and Close

3. Purchase price variance
 Give the details and go to rules tab and click on + to create rule
 If you create the mapping rule the keep it as mapping set under value type otherwise keep it as
constant and give the code combination (It should be Purchase Price Variance account), Sub
Ledger application should be Purchasing

 Save and Close

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2. Manage Transaction Account Definition (TAB)
Naming convention is Transaction Accounting Builder (TAB) only even if they give as Manage
Transaction Account Definition(TAD)

Go to set up and maintenance

Set up: Procurement
Functional area: Procurement Translation account rules
Task: %manage % transaction% account %
Select Manage Transaction account definitions
After accounting rules created that rules we can map to rules given under the task called Manage
transaction accounting type

 Save and Activate it

 These tab we have to associate with out ledger specific sub ledger accounting method

3. Manage Sub ledger Accounting options

Through our ledger we can perform the task, within the primary ledger only we have accounting method,
within the accounting method PO related the definition we have to change, for purchasing we have to
assign the tab which we created so that when we record the purchase orders or requisitions system will
derive the accounting from the tab only will see here

Go to set up and maintenance

Set up: Procurement
Functional area: Procurement Translation account rules
Task: %manage % Sub% ledger% accounting % Option%
Select Manage Sub Ledger accounting Options
Query you primary ledger and expand the ledger
Within this primary ledger we have accounting method that will show under this primary ledger

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 Select the Purchasing and update on Accounting Options

Then give the Transaction accounting definition here we have to add our TAB

Like this way we have to derive the accounting details for every primary ledger if you are going
to record the requisition and purchase orders otherwise we can’t process system can’t derive the
charge account, accrual, variance accounts create for PO.
Save and close

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4. Manage Requisition and Purchasing Document Approvals – Rule
Here you can setup approval rules for requisitions and PO.

1. Manage Requisition Approvals

Here will go and set auto approvals for specific business unit, if any requisition created that
should be approved automatically
As a part of payables we gone through work flow with in the work flow we have many nodes in
the same way for requisition approvals we have different nodes are available.
For payables if you want set approvals directly we have navigate to BPM
In case of Procurement it could be requisition or purchasing related approvals they given the user
interface here it self if you do setups here it will be reflecting in the workflow
Go to set up and maintenance
Set up: Procurement
Functional area: Approval Management
Task: %manage %requisition% Approval%
Select Manage Requisition Approval
If you enable are disable any node just select that and click on enable button on the top

 Click on Edit rules and click on + icon to create

 Click on ok
 Then click on add condition under auto approvals and give the details

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  It’s like if condition means if requisitionBU is equal to value is Cello BU then what is the action
that will add under the actions

 Go down and click on Add action give the approval type is automatic then click on ok
 If requisition is equal to value of Cello BU then the Action is automatic approved

 Then click on Deploy

 Save and close

2. Manage Purchasing Document Approvals

Go to set up and maintenance

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 Set up: Procurement
Functional area: Approval Management
Task: %manage %Purchasing % Document % Approvals%
Select Manage Purchasing Document Approval
Select the any node and enable it by click on enable option
Then click on Edit Rules button

Click on + icon under Rules tab to create rule for Purchase Order
Give the rule name and click on ok

Click on Add condition under details tab

Here this means If procurement BU is equal to the cello BU then condition we have to write in
the next tab
Click on ok

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 Click on Add actions under Actions
Here this means the action is automatic approved by system if the condition is something (this is
wrote on the previous tab)
Click on ok

Here the rule is like if the procurement BU is Cello BU then the condition is Auto approvals by
system

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 Click on save and close
Click on deploy

Then the deploy request will submit then close the page

12. Manage Data access set Data access for user

Go to Setup and maintenance
Setup : Financials
Functional area: General Ledger
Task: %Manage %data % access% user%
Select %Mange Data Access set Data Access for users
Click on + icon to assign access to user
Give the details

13. Create Sub inventory

If you want to create sub inventory “Materials Managements and Logistics”. Offering is
mandatory to create this.
We have to create the sub Inventory under Inventory
Go to Setup and Maintenance
Setup: Manufacturing and Supply Chain Materials Management
Functional area: Inventory Management

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 Task %subinventories%
Select Manage Subinventories and Locators
Select your inventory organization
Click on + icon to create the subinventory
Give the Mandatory details

Click on Save and Close

14. Create Item class

In fusion if you want to create item directly you can’t create you have to create the item class, it’s all
about classification of items very broad level where you can set predefined information and defaults for
item creations

In this by default we have Root Item Classes under this you can create all the item classes
If you want to create the item classes select the Root Item Class that means we are creating under
this
Go to set up and maintenance
Set up: Product Management
Functional area: Items
Task: %manage% item% classes%
Select Manage item classes
Click on + to create item classes
Then give the details of item classes

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 Go to item Management tab here we have to give the item number generation method means how
the item number should be generated
If you compare with EBS in EBS System item Key Flex field we have in Fusion we don’t have
that
Here you can specify item number generation whether you can generate Sequence means give the
starting number, increase by, suffix and prefix or user defined (manual)
If you give the user defined then it will ask the Description Generation also

Then go to security Here we have to specify by using this item class who can create items that
you can specify again for which organization which organization they can create
Click on + icon to create security details
Give the principal means person or group and give the name if person (user name) If organization
(give the organization name) then give the organization also

After giving this specifications what are the privileges you want to give to this user to manage the
item information that you can specify here under Actions tab
Go to Actions tab and click and add and select button and give the all privileges
Search with item or null and add the all items which we have under this

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 Click on apply and ok then all item privileges assigned to that user

In the same way do for item org this means for the same person (user) we are giving access to this
two items that means items can be created in the item master those can be associate with this
actual inventory full privileges we are giving to this person, for this also give the full privileges

15. Create Items and assigned to Inventory Org

Go to home page
Select Product management tile (If you give the product manager role to user then it will appear)
Click on the Product information management icon
Inventory Application (EBS) replaced with the product management
Go to Task list and click on create item
Items will create in Master org only then those item have to link with child org
Give the organization name and item classes (If we done the item classes item assignment in
security tab then it will show)

Click on ok then one page will open

Here automatically item number will come and description we have to write as per predefined in
the item classes

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 Go to over view tab and give the Units of Measure

 Go to specification tab and go to the inventory under item organization and keep the yes for
inventory related options

 Then go to purchasing tab under item organization tab and go to outside processing item option
and matching approval level is receipt and invoice matching option is 3 or 4 way

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 Go to associations tab here you can see item master org by default every item created under this
but this need to assign to our actual inventory

Click on apply and then that will assign to inventory org, you can see below

Click on save and close

Process
1. Create Requisition and approve
Go to Home page
Click on Procurement
Click on Procurement and requisition
Go to More tasks and click on Enter requisition line

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 For the first time you enter the requisition lines it will ask us to enter the default deliver to
location.
Give the details like item, Quantity, Amount

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 o Item: Default from item creation
o Deliver to Location: For the first we have given the location while creating requisition
o Destination Type: inventory so that we can create the receipt against the this will create
requisition will convert
o Sub inventory : Give your Subinventory
o Requester : you can specify the requester name
o Urgent: If material is urgent then you have to give the yes or no
o Suggested buyer: Whom you can suggest as a buyer
o Negotiated : It tells about negotiated requisition
Click on Add to cart
Click on Done and click on Submit
It will go for approval

Approval

Same navigation Manage requisitions

Query with mandatory fields
You can see the requisition for approval just click on approval
We only can approve because we defined the approvals for requistions

Click on Done
Now we can convert this requisition as Purchase Order

2. Purchase Order
Go to Home page
Click on Procurement
Click on Purchase Agreements
Click on Purchase Orders in this info let you can see requisition lines

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 Click on it then it will open one window
If you want to convert that requisition into PO then select the requisition line and click on add to
Document Builder

Here you can specify any other info you want to enter, we have to enter supplier mandatory

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 Click on ok

Click on Edit if you want to emend something in the requisition otherwise click on create Po will
create
For PO also we defined auto approvals so that details will default
Click on submit it will be approved before submission if we want to see if you approved how it
will be rooted, whom it will be approved, if you want to see the click on Manage Approvals
It shows us it is going to be auto approval otherwise if you set any approvals to be rooted to so
and so person.

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 Click on submit; now this POwill be submitted for approval.
Go to Purchase order then click on task list select the Manage approvals
Then you can see the purchase Order status as open means approved. In EBS status is Approved
Against this PO whether delivery is happened or invoice created or not you can see from the life
cycle in this life cycle you can see the full details

Click on Done

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3. Create Receipt
Go to Home page
Inventory Management
Click on task under show tasks apply the receipts

Click on Receipt Excepted shipment

Query the Purchase Order number because we are receiving the goods against that PO
Select the Po and click on Receive

Give the quantity and here you can’t give the sub inventory because here Destination Type is
receiving if it is inventory you can give the sub inventory

Click on Submit
Now we have to move the material form receipt to inventory actually in EBS for this we have
Receiving transaction option but in fusion that naming conventions has been changed as put away
receipt

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 Go to Inventory management
Click on Task list and click on put away

We are moving the material from staging to targeted inventory use it

Query with receipt number then you can see the receipt
Click on Put Away (nothing but moving the material to targeting inventory)

Here you see the sub inventory and click on submit

Now you can check the on hand quantity

Navigation is same change the task as Inventory
Query with your inventory name then it display how much on hand quantity

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Manual PO creation
If you want to create PO first we have to create Supplier (This setup done at Purchasing Module)

Go to Procurement
Click on Purchase agreement/ Purchase Order
Go to Task List
Click on create order under orders tab (If you not access the procurement manager to BU then
details will not appear
Click on create Order under order tab
Give the details like style and supplier details, Procurement and Requisitioning Bu details will
default Procurement Bu come from “Configure procurement business function” (purchasing
setup) and Requisitioning BU come from Procurement agent (Purchasing setup)
Supplier details come from supplier site

Then one tab will appear in the General tab check the details which are automatically come from
setups

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 Go to Linesclick on + icon to create item details
Give the details like type, item, quantity, price

Go to Schedule tab and give the requested and promise date

Then go to Distributions give the details Po charge account is main (It is come from SLA setups
means PO TAB), account charge is depends on item like item is chairs charge account is office
equipment

Save the PO

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 If you want to see the approvals click on manage approvals
Then click on Submit then it will convert into open status

Click on done

Invoice creation against Po (Two way)

Go to Home page
Click on Payables
Click on invoices
Go to Task list
Click on create invoices
Give the PO number then automatically BU, supplier, supplier site default from PO
Give the remaining information

Go to lines and lines option is match invoice lines click on go

Then you will find the PO enable the match option and click on apply and ok

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 In PO level we gave the two way matching that the reason here only PO details will show if you
give the 3 way Receipt details also will show

Click on save and validate it and as well as post to ledger also

Then will see the account

Click on save and close

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