What is P2P cycle in Oracle apps, and what does it do?

The P2P cycle in Oracle apps is a process that is responsible for the procurement and payment of goods & services. It
starts with a requisition being created and ends with the supplier being paid. You must complete several steps for
the cycle to be complete.

Essential steps in the P2P cycle in Oracle apps:

1. Creating a requisition
2. Request for quotation
3. Quotations
4. Quote analysis
5. Creating a purchase order (PO)
6. Receiving the goods or services
7. Creating an invoice
8. Creating account entries
9. Making the payment to the supplier

Creating a requisition:
The 1st step in the P2P cycle in Oracle apps is creating a requisition. This a request for goods or services sent to the
supplier. You can do that by navigating to the “Requisitions” screen in Oracle apps and clicking on the “Create
Requisition” button.
You’ll then need to fill out the requisition form. The requisition must include all the necessary information to create
a purchase order (PO), including the item code, description, quantity, and price.

Request for quotation:

After the requisition has been created, you can generate a request for a quotation (RFQ). It is a document sent to
the supplier that outlines the goods or services needed and the buyer’s price. The RFQ will also include any other
terms and conditions relevant to the purchase.

Quotations:
Once the RFQ has been received, the supplier will send back a quotation. This document will include the price of
the goods or services and any other terms relevant to the purchase.

Quote analysis:
Once the quotation has been received, it will need to be reviewed and approved. That is known as quote analysis.
Quote analysis examines the supplier’s quotation and ensures that it meets all of the buyer’s requirements.

Creating a purchase order (PO):

After the quotation has been approved, you can generate a purchase order (PO). The purchase order (PO) is a legal
document that outlines the terms of the sale.
It will include the price, quantity, and delivery date of the goods or services. The purchase order will also include
any other relevant terms and conditions.

Receiving the goods or services:

Once the goods or services have been ordered, they must be received. That is done by entering the accepted
quantity into the receiving form.
The receiving form will include fields for the supplier, ship-to-address, and delivery date. This step will complete
once all the information has been entered.

Creating an invoice:
An invoice can be created after goods or services have been received. The invoice is a document that outlines the
price of the goods or services and any other terms that are relevant to the purchase.
The invoice will also include a due date. This step will complete once all information has been entered.

Create accounting entries:

After the invoice has been created, it will need to be reviewed and approved. This is known as invoice validation.
Invoice validation checks the supplier’s invoice and ensures it matches the purchase order (PO).
Once the invoice has been approved, you can generate accounting entries. These entries will debit the Account
Payable (AP) account and credit the Cash Account (CA).

Making the payment to the supplier:

The final step in the P2P cycle is making the payment to the supplier. This is done by entering the invoice and
purchase order (PO) numbers into the payment form.
The payment form will include fields for the supplier, ship-to-address, and delivery date. Once all of the
information has been entered, the payment is complete.

P2P cycle in Oracle apps with table:

The following list shows the P2P cycle in oracle apps R12 with table types.

Type of table What it contains

PURCHASING_ REQUISTION_HEADER_TABLE Information about requisition number, date created, and status.
PURCHASING_REQUISITON_LINES_TABLE The requisition line includes the item code, description, quantity,
category, and unit price.
PURCHASE_ORDER_HEADER_TABLE The purchase order includes the order number, supplier name,
and ship-to-address.
PURCHASE_ORDER_LINES_TABLE The purchase order line includes item code, quantity, and unit
price.
THE_RECEIPT_HEADER_TABLE The receipt includes the receipt number, supplier name, and date
received.
RECEIPT_LINES_TABLE The receipt line includes the item code of received items,
quantity, and unit price.
INVOICE_HEADER_TABLE The invoice includes the invoice number, supplier name, and ship-
to-address.
INVOICE_LINES_TABLE The invoice line includes item code, quantity, and unit price.
PAYMENT_HEADER_TABLE Information about the payment includes the payment number,
supplier name, and ship-to-address.
PAYMENT_LINES_TABLE The payment line includes item code, quantity, and unit price.
Most common errors during the P2P cycle in Oracle apps:
 Incorrect or missing account codes
 Invalid or missing vendor information
 Inaccurate or missing purchase order information
 Invalid or missing invoice information
 Incorrect or missing payment information

Best practices for P2P cycle in Oracle apps: Some key things to keep in mind
 Ensure you’re posted as the approver on all invoices related to the P2P cycle. This will help to ensure that all
invoices are correctly processed and approved.
 Be sure to review all invoices carefully before approving them. This will help to avoid any errors or mistakes
in the approval process.
 If you have questions about an invoice or the P2P cycle, please ask your supervisor or another experienced
individual. Getting clarification can help to avoid problems down the road.

What is a requisition used for?

A requisition, in procurement, is a request for goods or services made by an employee to the person or department in
a company that is responsible for purchasing. If the request is approved, that entity/company/organization will
submit a purchase order (PO) to a supplier for the goods or services.
Procure-To-Pay (P2P) cycle: Session
 Financial Option
 Overview of P2P Process
 Purchasing Option
 Requisitions
 Document Types
 Quotations and Auto Create Quotation
 RFQs and Auto Create RFQs
 Purchase Order (PO) and Auto Create PO
 Matching Options and Receipt Routing Methods.
Account Payable (AP):
 Payable options
 Financial options
 Accounting periods
 Payable system setups
 Payment terms
 Distribution sets, Banks’s creation
 Payment format
 Bank Account Creation
 Supplier
 Standard invoice
 Debit memo
 Credit memo
 Prepayment invoice
 Quick match
 Withholding tax, payment
 PO match, invoice batch
 Auto create invoice
 Invoice created against PO
 Employee expense reports
 Enterprise Resource Planning (ERP) Finance Module – 7 types of reports and useful
features
All kinds of small-scale and large-scale organization befit from implementing the ERP Finance module. In addition,
the financial module is the core of many ERP software systems.
It gathers financial data from various functional departments and generates valuable financial reports. Reports
include General Ledger, Trail Balance, Balance Sheet, and Quarterly Financial Statements.

ERP Finance module will take care of all accounts-related entries and their impact on the system.
How finance comes and how it is utilized. That will reflect the total flow of money (Cash/Bank) and expenditures.
As an after effect, the management will make crucial financial decision and budgeting. In addition, management can
come to know about the company financial position at any moment.

Financial Reports:
The finance module in ERP helps to generate all sorts of critical Financial Reports, like

1. Trial Balance
2. Trading Account
3. Profit and Loss Account
4. Balance Sheet
 5. Debtor’s Balance
6. Creditors Balance
7. Cash/Bank Fund Position

Trial Balance: A trial balance list all ledger accounts in a certain period, also called a report of outstanding items.
This is necessary because, from the ledger account, we know whether an asset has been debited or credited.

Trading Account: This account is opened when the business starts. Mainly it is used when we receive cash or
purchase goods/services in cash.

Profit & Loss Account: A profit & loss account lists income and expenses in a certain period, usually in a month. It
shows either how profitable you’re or unprofitable you’re.

Balance Sheet: A balance sheet lists the assets, liabilities, and what is left over in a certain period. It shows your net
worth at that time.

Debtor’s Balance: A debtor’s balance shows the total outstanding debt of your customers. This is necessary because
without knowing this, you cannot decide whether to make any discounts or not.

Creditor’s Balance: A creditor’s balance lists all that you owe to others. We usually call this liability.

Cash/Bank Fund Position: This shows your cash and bank balance at a certain period. This is necessary because
without knowing this, we cannot decide whether to borrow any money or not.

General Ledger (GL):

The General Ledger module is the foundation of your accounting system. It meets organizations current and future
financial management requirements of all types and sizes.

It provides a robust feature set to handle your most demanding budgeting and processing needs.

General Ledger integrates with all modules and is the key to maximizing the efficiency and accuracy of your financial
data.

GL Security: The GL Security module enables access control. For e.g., organizations can control users views or use
certain general ledger accounts. The above is based on segment validation in GL Security settings.

GL Consolidations: GL Consolidations lets you transfer and merge the GL account. In addition, it combines
transaction information between separate companies and branch office locations. It is also designed to enable
subsidiaries and holding companies to run without using the same network or accounting database.

GL Consolidation provides a feature set that allows your company to define the level of detail to join and provides a
comprehensive audit trail.
What is ERP Finance?
ERP Finance module is a software system that collects all organizations financial information and generates valuable
reports. With the help of these reports, the organization can communicate clearly with its partners, like vendors and
customers.

 A General Ledger provides you with a record/track of all financial transactions.

 To integrate your payable data with your purchasing system, use Account Payable. Using this feature, you
can easily track and control your cash flow.
 Account Receivable is a feature to track customer payments, allowing you to automate tasks like sending
payment reminders.
 Profit Tracking is the best feature for viewing the overall financial performance. It helps to see how your
business is using its financial resources and also it is used to calculate how much your organization is
profiting from your efforts.
 To track your company assets like equipment, computers, company cars, etc., you can take the help of Fixed
Asset Management.
 It isn’t easy to manage multiple currencies if you have client worldwide. However, Multi-Currency
Management is a convenient feature to handle. It allows you to automate the process of both buying and
selling in foreign currencies.
 Tax Management is the best choice to provide a uniform collection of sales and taxes.
 Risk Management is a good feature of the finance module to analyze and manage your organization’s crises.
 Reports show you where revenue is generated and where it is not generated. Thus, it helps you to
understand the financial condition of your company.

Inter-Company Transactions using the ERP Finance Module:

The inter-company transaction module lets you enter General Ledger (GL) and Accounts Payable (AP) transactions
that affect more than one company by automatically distributing transactions across 2 or more companies.

In addition, its built-in flexibility automatically generates intercompany loan account entries according to user-
defined relationship tables called routes. Inter-company transactions simplify and significantly reduce the work
required for intercompany accounting.

Major Functionalities:
ERP Finance Module is completely transaction-based, unlike journal-based. That implies most accounting functions
are handled through relevant transactions in other modules, thereby saving time.

The module contains complete functionality required for any accounting department, from vouchers to the balance
sheet and profit & loss account.

Budgeting and variance analysis between budgeted and actual figures help efficiently control the enterprise
expenses and income.

The ERP Finance Module also include cost centers, which are entirely flexible in defining their components. General
overhead cost allocations can be pre-defined and generated required outputs for analysis.

Outstanding Payables & Receivables with an aging analysis of debtors and creditors are some of the features of this
module. Overall, the module takes care of the complete functions of any accounting department.
Advantages of ERP Financial Module:
1. Enhances Productivity: It automates the financial process and reduces manual work. That leads to savings of
time and hence increases productivity.
2. Provides Financial Clarity: With the help of analytics and a general ledger, an authorization person gets
information about the organization’s financial condition.
3. Increases Data Accuracy: Human errors are also reducing as it reduces manual entry. It also helps to detect
and avoid mistakes. Hence, you’ll get accurate data.
4. Tracks Documents Quickly: All account-related documents will be in digital form and will arrange in a proper
file in the appropriate place. So, it is easy to track the required documents.
5. Helps to Forecast: ERP Finance Modules, Reporting Systems, and Analytical Systems help the organization
plan and forecast its costs and revenue.
6. Consolidation and Centralization: The organization can get all the financial information in one place. In
addition, this module integrates easily with other ERP Modules.
7. Automatic Payment: There is no chance of missing payments to any employees because of the Accounts
Payable of this module. It informs the organization about the coming amount through notification.

How does it work?

The function of the ERP Finance Module starts with account creation. Then, external departments like marketing or
purchasing will create some of those accounts. Apart from regular voucher entries, this module provides financial
figures, which will help the authority and other departments. This model will generate a financial account and
documents like accounts receivable and accounts payable. This module bridges sales & procurement processes.
Password will protect all figures. Only authorized persons will be eligible to access information from this module.

Fund Manipulation Control:

Fund Manipulation Control concerns are essential, sometimes it is treated as blood for an organization. So in this
regard, sources of funds and application of funds are to be taken care of by defining.

 Balance Sheets
 Schedules
 General and Sub-Ledger
 Party and Customer Masters

Also, the various input transactions, such as,

 Voucher Entry
 Credit/Debit Entry
 Cash/Bank Receipts
 Cash/Bank Payments
 Bank Reconciliation Statements
 Bill Verification
Then finally, different types of financial reports can be of various types of according to specified company standards.
ERP Finance Module provide businesses the control and accountability for their finances.

Vendors of ERP Finance Module:

Right now, the market consists of many numbers of ERP vendors. Many of them provide all modules required for
different business. According to your type of business and industry, you can choose the vendor for the perfect
financial management of your business.

Infor, SAP, Microsoft, and Oracle are 4 major ERP vendors. Vendors provide different deployments also such as SAAS,
On-Premise and Cloud.

First, you can have the finance module with cloud deployment and other modules with On-Premise, and eventually
you can change the deployment type from On-Premise to cloud.

SAAS, also you can use. It helps to share a single document with multiple clients, which helps to reduce the cost and
standardize the business practice.

Difference between accounting software and ERP finance:

 Accounting Software: focuses on historical and current data. It tracks financial statements, cash flow, bank
accounting, reporting, and invoicing.
 ERP Finance: focuses on budgeting, forecasting & planning.