HSRoracentre: Procure to Pay cycle in Oracle Cloud

Oracle Fusion procure to pay (P2P) cycle in Oracle cloud

Procure to pay (P2P) cycle overview in oracle cloud

The Procure-to-Pay (P2P) cycle, also known as Purchase-to-Pay, is a process that covers the steps involved in procuring goods or services for a business or organization, and paying for them.

The Procure-to-Pay cycle helps businesses to streamline the procurement process and ensure that the goods or services are received on time and at the best possible price. It also ensures that payments are made accurately and on time, which helps to maintain good relationships with suppliers.

What is P2P cycle or Procure to pay cycle in oracle cloud/fusion

Oracle Cloud provides a comprehensive P2P-Procure-to-Pay solution that includes modules for procurement, inventory management, supplier management, and financials. It also includes features such as automated approval workflows, supplier self-service portals, and mobile access to help streamline the process and improve efficiency.

The Procure-to-Pay P2P cycle in Oracle Cloud is a comprehensive process that includes the following steps:

1. Purchase order requisition

2. Request for Quotation (RFQ)

3. Quotations

4. Creating a Purchase Order

5. Receive Goods/Services

6. Creating an Invoice

7. Supplier Payment

8, Reconciliation

1. Create purchase order requisition

Requisitioning: The procure to pay (P2P) cycle in Oracle cloud begins with the creation of a requisition by a requester, which includes information such as the item or service requested, quantity, and delivery date.

2. Request for Quotation

The user generates a request for a quotation after creating requisitions by providing all the required information (RFQ). An RFQ is a request for quotes, also known as an invitation to bid, that a business sends to possible suppliers.

A request for quotation (RFQ) is a letter that the supplier receives outlining the goods or services required and the buyer's pricing. Any other terms and conditions pertaining to the purchase are also included in the RFQ.

3. Quotations

In the P2P (Procure-to-Pay) cycle, a quotation is a formal document issued by a supplier to a buyer in response to a request for quotation (RFQ). The RFQ typically specifies the goods or services that the buyer requires, and the supplier's quotation will include details such as the price, quantity, delivery terms, payment terms, and any other relevant information.

4. Create a Purchase order

Once the Quotation is approved the the next step is to create a purchase order in the system.

A purchase is an essential document in the Procure-to-Pay (P2P) process in oracle cloud, as it authorizes a supplier to deliver products or services and provides evidence of the agreement between the two parties. It serves as a legal document that protects both the buyer and the supplier, ensuring that the buyer receives the correct products or services at the agreed price and the supplier is paid promptly.

The purchase order contains detailed information, such as the item description, quantity, price, delivery date, payment terms, and shipping instructions. The supplier must fulfill the terms and conditions specified in the PO, including delivering the products or services as agreed upon.

5. Receive Goods/Services

In the Procure to Pay (P2P) cycle, receiving is the process of acknowledging the delivery of goods or services from a supplier. Receiving is an important step in the P2P cycle because it allows organizations to ensure that they have received the correct quantity and quality of goods or services that they have ordered.

The receiving process typically involves comparing the goods or services received against the purchase order and verifying that they meet the required specifications. This can include inspecting the goods for damage or defects, verifying quantities, and confirming that the goods are of the quality specified in the purchase order.

Once the receiving process is complete, the receiving department will typically update the purchase order to reflect the goods or services that have been received, and will notify the accounts payable department that the invoice can be processed for payment.

Effective receiving processes can help organizations to minimize errors and discrepancies in their procurement processes, which can improve efficiency and reduce costs.

6. Create Invoice

Once the receipt is created into the system next step is to create the invoices into the system. This invoice is matched against the purchase order and receipt in Oracle Cloud to ensure that the correct items or services have been received.

7. Create Payment

Once the invoices are entered into the system the next step is to create the payment for the invoices as in when you receive the payment from supplier.

8. Reconciliation

Finally, the accounts payable balance is reconciled in Oracle Cloud to ensure that all invoices have been paid and the balance is up-to-date.

By following these steps in Oracle Cloud, the Procure to Pay cycle can be completed accurately and efficiently, ensuring that the supplier is paid in a timely manner and the accounts payable balance is up-to-date.