Procure to Pay (P2P Cycle) in Oracle fusion/EBS

 Hey Guys, Welcome!! 

   This Blog is all about Procure to Pay, commonly known as P2P in Oracle Cloud/EBS. This one is predominantly for those who have no Knowledge in these Cycles and for those who are willing to start their career in ERP as these are used in almost all companies that are using ERP for their day-to-day tasks. Let's dive into it.

Let's see about Procure to Pay Cycle:-

    This Cycle deals entirely from Purchase of Products till Payments made to them. Almost used in every Business Organization that uses ERP. Let us see them in detail using the following steps.

Imagine a Supermarket.There might be different departments in it .So the purpose of these Departments in P2P is to inform about the products that are in demand to the purchasing team who inturn procure them from other suppliers and deliver it to the Warehouse/Inventory and then segregate them and those products are kept in shelves of necessary departments for the customers.

1)Requistion (Requests) of products that are in demand are made from departments to Purchasing Teams.

2)Purchasing Teams will identify multiple suppliers and request Quotation for the products from those suppliers.

3)Purchasing Department will do the Quotation analysis that they have recieved from different suppliers.

4)Based on the Quotation analysis a single vendor/supplier is identified.

5)After the vendor/suppliers is identified, the Purchase Order is raised and given to the vendor.

6)After the Purchase Order is recieved, the vendor supplies the Goods to the particular location mentioned. It might be warehouse,inventory, factory etc. This is called Receipt of Goods.

7)The warehouse team after recieving the goods from the supplier, will prepare documents like PO Receipt, Goods Receipt and send it to the Finance Team ,but there wont be any documents related to invoice in it.

8)Supplier will directly send the invoice to the Finance Team. Because the entire dealing negotiation related to Price, Discounts should be done between Suppliers and the Finance Team.

9)Finance Teams compares the invoice which they got from the vendor with the Goods Receipt Note from the Warehouse Team.

10)And if everything is OK, Finance Team will send the Invoice to the Payment Section.

11)Payments Team will Verify everything and make necessary payments to the suppliers.

Normally, in P2P Cycle the Purchase Order is created through Requistion or directly without Requistion  based on our Requirements. Requistion Phase is optional in this P2P Cycle. 

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