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