P2P: Procure to Pay Cycle in 7 Steps with Accounting

P2P: Procure to Pay flow in 7 Steps

P2P: Procure to Pay flow with Accounting Entries


STEP 1: Create Requisition
       No Accounting Entries

STEP 2: Create Purchase Order
          
           No Accounting Entries 

STEP 3: Create Inventory Receipt

• When Receiving Inventory

 

•  When Inventory moved/delivered to Sub-inventory

            The Receiving Inventory account is getting knocked-off at this stage.

 

 
STEP 4: Create AP Invoice

• When Creating AP Invoice

           The Inventory AP Accrual account is getting knocked-off at this stage.

 

STEP 5: Create AP Payments

• When Creating AP Invoice Payments

           The Liability account is getting knocked-off at this stage.

• When Cash is Cleared at the Bank

           The Cash Clearing account is getting knocked-off at this stage. 

  

• The Final Accounting entries 

         

This shows, the "Inventory/material we purchased comes in and the "Cash" has gone out as payment.

STEP 6: Create Accounting

            This Step is applicable for both Invoice and payments

 
STEP 7: Transfer to General Ledger

Important Tables to Know in Procure to Pay (P2P) Cycle

REQUISITION

• PO_REQUISITION_HEADERS_ALL (Requisition header information)
• PO_REQUISITION_LINES_ALL (Requisition line information)

PURCHASE ORDER (PO)

• PO_HEADERS_ALL (Purchase Order (PO) header information)
• PO_LINES_ALL (Purchase Order (PO) lines information)
• PO_LOCATIONS_ALL (Purchase Order (PO) shipment schedule information)
• PO_DISTRIBUTION_ALL (Purchase Order (PO) distribution information)

RECEIVING AGAINST PURCHASE ORDER (PO)

• RCV_SHIPMENT_HEADERS (Receipt header information)
• RCV_SHIPMENT_LINE (Receipt lines information)
• RCV_TRANSACTIONS (Receipt transaction Information)

ACCOUNTS PAYABLE (AP) INVOICE

• AP_INVOICES_ALL (AP invoice header information)
• AP_INVOICE_LINES_ALL (AP invoice lines information)
• AP_INVOICE_DISTRIBUTIONS_ALL (AP invoice distribution information)

ACCOUNTS PAYABLE (AP) PAYMENTS

• AP_PAYMENT_SCHEDULE_ALL (AP payments information)
• AP_CHECKS_ALL (AP payments check information)

ACCOUNTS PLAYABLE (AP) TRANSFERRED TO GENERAL LEDGE (GL)

• GL_JE_BATCHES (GL: Journal batch information)
• GL_JE_HEADERS (GL: Journal header information)
• GL_JE_LINES (GL: Journal line information)