A brief about Procure to Pay cycles

Procure to Pay cyle:

The basic P2P (Procure to Pay) Cycle can be explained as:

The first step in this is to gather the requisition from various modules using the ‘Requisition Import ‘ concurrent program. For example, when we run a
min-max planning in inventory, we get the list of items which is below the reorder level. In the same report there is an option to create requisition as well. When that option is enabled, the system internally creates a requisition for that particular item which is below the reorder level. This requisition can be viewed in Purchasing responsibility. Note the Requisition number and then create an RFQ (Request For Quotation) using this Requisition as the reference. Once this RFQ is created, it is sent to the various suppliers. Once the suppliers receive these quotations, they then send their bid/quotation for approval. Then the Buyers sit and analyze these quotations and finally zero in on a particular quotation which is approved as it satisfies the various conditions. When this quotation is approved, it is then converted to a Purchase Document (there are four types of Purchase Documents). After the creation of Purchase documents, it is then approved following the approval hierarchy. Once this Purchase order is approved, it is then sent to the supplier who in-turn ships the materials to the location specified in the PO Document. Once the material is shipped, it is then transferred to the sub-inventory as per the rule set in Receiving Controls of the particular Purchase document. Once the material is received then the next step is to process the payment for the received materials. For doing this, an Invoice is created and this invoice is sent to the Payables department which pays the supplier based on the purchase Order. Finally, the transaction is posted to General Ledger.

Lets discuss the tables that gets affected while performing a Procure to Pay full cycle:

















Hence, this summarises the technical aspect of Procure to Pay cycle.