Procure to Pay (P2P) Process

Functionality:   Procure to Pay is a process which facilitates business to procure goods, Services, Capital items from suppliers & do the payments  against invoices to the suppliers
Advantages:
1. P2P is efficient in reducing procurement costs by automating Procurement functions so company deploys less no of people  in Purchasing Department & automatically reduces the overheads & PO cost
2. Inventory carrying cost: Stock is maintained at optimum levels thus no obstruction for  manufacturing or Inventory over stocking etc
3. By maximizing payment terms, taking discounts automatically (if applicable) & provides clear visibility in accounting at any given time
Features of P2P process:
1. Invoice & Payment workbench: For Recording Transactions
2. Accounting
3. Workflow:  For better controls
4. Visibility: For Data visibility
5. Automation: For Automatic Interfacing Invoices to AP
6. Reports: For Decision Making
7. Customer Satisfaction & Cost Reduction

Procure to Pay Process:
Step 1:  Create Requisition (Purchasing Module): Requester raises a requisition & Requisition is forwarded to a buyer Buyer approves & creates Request for Quotation. Requisition is forwarded to various suppliers, at least 3 Buyer records the supplier quotations in system and finalizes a quotation Step 2: Create Purchase Order (Purchasing Module):            Buyer sends Purchase Order to Supplier. Supplier send goods to Inventory & invoice to Finance department Step 3 : Enter Receipt (Purchasing / Inventory Module)          Receiver receives the goods & moves to Inventory or warehouse Step 4: Invoice Processing (In Accounts ayable ) 1. Enter / Import Supplier Invoices: 1. Enter the invoice into the Invoice Workbench form or the Quick Invoice form. ( Purchasing module) 2. Payable Open Interface Import: most common method to import invoices batches from external sources 3. Generate invoices based on your PO receipts.  To do this run the “Pay on Receipt Auto Invoice Program” 2. Optionally, matching the invoice to a Purchase Order or Receipt AP matching : 2 way matching: verifies that Invoice is matched with purchase order information (within your tolerances) 1. Quantity Billed (invoice) <= Quantity in PO     &     2. Price Billed (invoice) <=   Price in PO 3 way matching: verifies that Invoice is matched with PO & Material Receiving with in defined tolerances 1. Quantity Billed (invoice) <= Quantity in PO     &     2. Price Billed (invoice) <=  Price in PO                           3. Quantity billed(on invoice) <= Quantity Received 4 way matching: Verifies that Invoice is matched with PO, Received quantity & Accepted Quantity 1. Quantity Billed (invoice) <= Quantity in PO     &     2. Price Billed (invoice) <=  Price in PO                          3. Quantity billed(on invoice) <= Quantity Received    4.  Quantity Billed (on Invoice) <= Quantity accepted against PO 3. Validating the invoice Once the invoice is entered into the system, validation process  can be run from the Invoice Workbench form  or by running the invoice validation concurrent program.It verifies matching holds, it will calculate and apply taxes,  GL period status, exchange rates, distribution information is valid or not 4. Resolving automatic invoice holds When the validation process places an invoice on hold, you must either resolve the hold or release the hold before payment              can be made.  Hold Types : Manual holds                    System holds 5. Running the invoice approval process and approving invoices After we have a valid invoice, you will need to run the invoice approval process (Approval Management      Engine (AME).  If the invoice meets the rules to require approval, AME will determine the approver(s) and send a notification.  The approver can then approve or reject the invoice online. Step 4: Payment Processing against Invoices (Payments Module): 1. Select Validated Invoices 2. Schedule Payments Step 5 Accounting & Reconciliation : Creating Accounting (Sub ledger Accounting) Import , Transfer, Post  accounting information to GL to maintain GL Balances Payment Reconciliation in Cash Management Module Procure to Pay Journal Entries (Accounting):