Procure to Pay Flashcards
AP Manager
AP Clerk/Accounts Payable Clerk
AP RESP
Handles the day-to-day processing of invoices and payments. This includes verifying invoices for accuracy, coding invoices to the correct general ledger accounts, and processing payments to vendors. AP Clerks may also be responsible for reconciling vendor statements and resolving invoice discrepancies
Vendor Master Data Specialist
AP RESP
Manages vendor master data within the Oracle AP system. This role involves setting up new vendor accounts, updating existing vendor information, and ensuring that all vendor data is accurate and up-to-date. The Vendor Master Data Specialist plays a key role in maintaining the integrity of vendor data, which is critical for efficient AP operations.
AP Analyst/Accounts Payable Analyst
AP RESP
Performs analysis and reporting related to accounts payable. The AP Analyst is responsible for analyzing AP processes to identify opportunities for improvement, conducting financial analysis to understand AP metrics, and generating reports for management. This role may also involve auditing AP transactions for compliance with internal policies and external regulations.
Payment Processor
AP RESP
Focuses on processing payments to vendors. This includes generating payment batches, executing electronic fund transfers, issuing checks, and managing payment schedules. The Payment Processor ensures that payments are made accurately and on time, in accordance with vendor terms and company policies.
AP Systems Administrator
AP RESP
Manages and maintains the Oracle AP system. This technical role involves configuring the AP module to meet organizational needs, performing system upgrades, troubleshooting system issues, and providing user support. The AP Systems Administrator ensures that the Oracle AP system is functioning optimally to support AP operations.
AP Process Flow
Purchase Order Creation
Receipt of Goods or Services
Invoice Receipt
Invoice Entry and Processing
Invoice Verification and Matching
Invoice Approval
Payment Creation
Payment Processing
Reconciliation and Record Keeping
Vendor Communication and Queries
Receipt of Goods or Services
AP PROCESS
Process: Upon delivery of goods or completion of services, a receiving report or service acceptance document is generated to acknowledge that the order has been fulfilled as per the PO.
Purpose: This step is crucial for verifying that what was ordered has been received before any payment is made.
Invoice Receipt
AP PROCESS
Process: The supplier sends an invoice to the company, requesting payment for the goods or services provided. The invoice should match the details of the PO and the goods receipt/service acceptance.
Purpose: The invoice initiates the payment process and serves as the supplier’s formal request for payment.
Invoice Verification and Matching
AP PROCESS
Process: The AP department verifies the invoice details against the PO and the receiving report/service acceptance document. This is often referred to as a three-way match (PO, delivery receipt, and invoice).
Purpose: Ensures that the invoiced amounts are correct and authorized for payment.
Invoice Approval
AP PROCESS
Process: Once verified, the invoice requires approval. Depending on the organization’s internal controls, this may involve one or several levels of approval.
Purpose: Confirms that the invoice is accurate and the expenses are legitimate and budgeted.
Invoice Entry and Processing
AP PROCESS
Process: Approved invoices are entered into the accounting system, typically within an AP module or ERP system, which may involve coding the invoice to the appropriate general ledger accounts.
Purpose: Prepares the invoice for payment and ensures accurate financial reporting.
Payment Processing
AP PROCESS
Process: The company processes payment for the approved invoice, which can be through various methods such as checks, bank transfers, or electronic payments.
Purpose: Settles the company’s obligations to the supplier, often taking into account any payment terms for early payment discounts or avoiding late fees.
Reconciliation and Record Keeping
AP PROCESS
Process: After payment, the AP department reconciles the payment transaction against the invoice and updates the company’s financial records accordingly.
Purpose: Ensures that payments are accurately reflected in the company’s financial statements and assists in maintaining a clear audit trail.
Standard Invoice
INVOICE TYPE
Represents a typical invoice from a supplier for goods or services provided. It is used to process payments for a specific purchase order.
Credit Memo
INVOICE TYPE
Issued by a supplier to reduce the amount owed by the buyer. This can be due to returned goods, overbilling, or other reasons for granting a credit to the buyer’s account.
Debit Memo
INVOICE TYPE
The opposite of a credit memo, a debit memo increases the amount owed to a supplier. It could be issued by the buyer to adjust the amount payable to the supplier, often due to receiving fewer goods than invoiced or being undercharged.
Prepayment Invoice
INVOICE TYPE
Represents an advance payment made to a supplier. Prepayments are recorded and then applied to future standard invoices from the same supplier.
Expense Report
INVOICE TYPE
Used to reimburse employees for expenses they have incurred on behalf of the company. Expense reports are treated like invoices from the employee to the company.
Mixed Invoice
INVOICE TYPE
Contains both invoice lines that can be matched to a purchase order and lines that can be directly accounted for without matching. This allows for partial associations with purchase orders.
Withholding Tax Invoice
INVOICE TYPE
Automatically generated to account for withholding tax obligations. These invoices represent the tax amount withheld from payments to suppliers that need to be remitted to tax authorities.
Retainage Release Invoice
INVOICE TYPE
Used in construction and project-based industries, where a portion of the payment is withheld until project milestones are completed. A retainage release invoice is issued to request the release of these withheld amounts.
Recurring Invoice
INVOICE TYPE
For regular expenses that occur on a fixed schedule, such as rent or lease payments. Recurring invoices automate the process of creating invoices for these expenses.
Interest Invoice
INVOICE TYPE
Generated to charge interest on overdue invoices, either to suppliers (for late payment refunds) or from suppliers (for late payments made by the company).
Invoice Workbench
AP WORKBENCH
The Invoice Workbench allows for the creation, management, and adjustment of invoices. Users can enter standard, credit memo, and debit memo invoices, as well as match invoices to purchase orders or receipts. It also provides tools for handling invoice approvals, validations, and accounting entries.
Payments Workbench
AP WORKBENCH
The Payments Workbench is used for processing payments to suppliers. It supports the creation of payment batches, manual and quick payments, voiding payments, and stopping payments. The workbench allows users to manage payment methods, schedule payments based on due dates, and apply discounts or finance charges as applicable.
Suppliers Workbench
AP WORKBENCH
The Suppliers Workbench is the centralized interface for managing supplier information. Users can add new suppliers, edit existing supplier details, manage supplier sites (addresses), and handle supplier bank accounts. This workbench ensures that all supplier data is accurate and up-to-date for transaction processing.
Inquiry Workbenches
AP WORKBENCH
Oracle AP includes several inquiry workbenches designed for viewing and analyzing transaction data without the ability to modify the data. These include the Invoice Inquiry and Payment Inquiry workbenches, which allow users to review detailed information about invoices and payments, respectively. They are crucial for auditing, reconciliations, and responding to supplier inquiries.
Holds and Releases Workbench
AP WORKBENCH
This workbench is used to manage and resolve holds placed on invoices. Holds can be applied for various reasons, such as discrepancies in invoice amounts, missing documentation, or approval requirements. The Holds and Releases Workbench allows users to review the reasons for holds, take corrective actions, and release holds to proceed with invoice processing.
Purchasing Manager
Buyers or Purchasing Agents
Buyers are responsible for executing the purchasing process, including creating and managing purchase orders (POs), negotiating terms and prices with suppliers, and ensuring timely delivery of goods and services. They also evaluate and select suppliers based on criteria such as price, quality, and delivery speed.
Requisitioners
Requisitioners are typically department representatives who initiate the procurement process by creating and submitting purchase requisitions for goods or services needed within their department. They specify the requirements, including quantity, specifications, and desired delivery dates.
Purchasing Administrator
Supports the procurement process by maintaining purchasing records, processing purchase orders, and handling administrative tasks related to procurement. This role may also involve updating supplier information, managing procurement documents, and assisting in the reconciliation of invoices and payments.
Supplier Relationship Manager
Focuses on building and maintaining strong relationships with suppliers. This role involves assessing suppliers’ performance, resolving issues and disputes, and working collaboratively with suppliers to improve product quality, reduce costs, and ensure on-time delivery.
Procurement Analyst
Analyzes procurement data and trends to identify opportunities for cost savings, process improvements, and supplier optimization. The Procurement Analyst may also be involved in developing procurement strategies and evaluating the effectiveness of procurement policies.
Inventory Controller
Although primarily associated with inventory management, the Inventory Controller works closely with the procurement team to ensure that purchasing decisions align with inventory levels, storage capacities, and demand forecasting. They help minimize excess inventory and avoid stockouts.
Procurement/Purchasing Workflow
Identification of Needs
Requisition
Supplier Selection
Purchase Order Creation
Order Acknowledgment
Advance Shipment Notice (Optional)
Receipt of Goods or Services
Three-Way Matching
Invoice Approval and Payment
Record Keeping and Analysis
Identification of Needs
The process begins with identifying the need for goods or services within the organization. This could arise from inventory running low, a new project starting, or an operational requirement.
Requisition
A purchase requisition is created to formally request the required goods or services. The requisition includes details such as quantity, specifications, and desired delivery date. It must be approved by authorized personnel, often a manager or department head.
Supplier Selection
Based on the requisition, the purchasing department identifies potential suppliers. This may involve requesting quotes (RFQ), evaluating suppliers based on price, quality, reliability, and previous performance.
Order Acknowledgment
The supplier acknowledges receipt of the PO and confirms their ability to fulfill the order as specified. Any discrepancies between the PO and the supplier’s ability to deliver need to be resolved before proceeding.
Purchase Order Creation
Once a supplier is selected, a purchase order (PO) is created and sent to the supplier. The PO serves as a legally binding document outlining the specifics of the purchase, including descriptions, quantities, prices, and terms and conditions.
Advance Shipment Notice (Optional)
Some suppliers provide an advance shipment notice (ASN) to inform the buyer of the details of the shipment. This helps in planning for the receipt of goods.
Receipt of Goods or Services
Upon delivery, the goods or services are inspected to ensure they match the PO specifications. Acceptance documents or goods receipt notes are generated to confirm the satisfactory receipt of the order.
Three-Way Matching
Before processing payment, the procurement process often involves a three-way match between the PO, the delivery receipt/acceptance document, and the supplier’s invoice to ensure everything aligns.
Invoice Approval and Payment
Once the three-way match is confirmed, the invoice is approved for payment. Payment is then processed according to the agreed terms with the supplier.
Record Keeping and Analysis
All documents related to the procurement process are recorded and stored for future reference, auditing, and analysis. This data can be used to evaluate supplier performance, identify opportunities for cost savings, and improve procurement processes.
Internal Requisition
Used for requesting items from within the organization. Internal requisitions often trigger internal orders and transfers, typically used in organizations with multiple inventory organizations or locations to move goods from one location to another internally.
Purchase Requisition
This is the standard type of requisition for acquiring goods or services from external suppliers. Purchase requisitions, once approved, can be converted into purchase orders (POs) that are sent to suppliers.
Specialized Requisition Types
Expense Requisitions
Capital Requisitions
Expense Requisitions
Used for requesting items from within the organization. Internal requisitions often trigger internal orders and transfers, typically used in organizations with multiple inventory organizations or locations to move goods from one location to another internally.
Capital Requisitions
Used specifically for capital expenditures, such as acquiring fixed assets like machinery, equipment, or buildings. Capital requisitions often require additional approvals and budget checks given their impact on the organization’s financials.
Conversions to Purchase Orders
Both internal and purchase requisitions can be converted into corresponding purchase orders or internal sales orders through the Oracle Purchasing module’s AutoCreate feature, depending on organizational workflows and the specific type of requisition.
Standard Purchase Order
The most common type of PO, used for one-time purchases of specific items or services. Details include quantities, descriptions, prices, and delivery schedules. Standard POs are used when the details of the goods or services, delivery schedule, and pricing are known in advance.
Planned Purchase Order
Used for items that will be required over a period of time, based on a forecast or plan. A planned PO specifies the items, quantities, and delivery dates, but deliveries are not authorized until release orders are issued against the planned PO.
Blanket Purchase Order
Represents an agreement with a supplier to purchase specified items at agreed-upon prices, within a set period, but without specifying the quantities and delivery dates at the time of the PO creation. Blanket POs are used to leverage negotiated pricing and terms for recurring purchases. Release orders are issued against the blanket PO as actual requirements become known.
Contract Purchase Order
A contractual agreement that does not necessarily specify items, quantities, or prices but sets out terms and conditions for purchases over a period. It can be used as a basis for issuing standard or blanket purchase orders. Contract POs are useful for establishing terms and conditions with suppliers without committing to specific goods or services upfront.
Requisitions Workbench
Allows users to manage purchase requisitions throughout their lifecycle, from creation to approval. Users can create, view, modify, and manage approvals for requisitions. It’s a centralized place for handling all requisition-related activities.
Purchase Orders Workbench
A comprehensive interface for managing purchase orders. Users can create new POs, view and edit existing ones, manage approvals, and perform actions such as canceling or closing POs. This workbench facilitates detailed management of the ordering process.
Suppliers Workbench
Provides tools for managing supplier information, including creating and maintaining supplier records, viewing supplier transactions, and managing supplier qualifications and performance. It’s essential for maintaining good supplier relationships and ensuring that supplier data is accurate and up-to-date.
Sourcing Workbench
Supports the sourcing process, including managing supplier quotations and analyzing bid responses. This workbench is used to select the best suppliers based on various criteria such as price, quality, and delivery terms.
Agreements Workbench
Used for managing blanket purchase agreements and contract purchase agreements. It allows users to create and administer these agreements, track their usage, and manage releases against blanket agreements.
Approvals Workbench
Facilitates the review and approval of purchasing documents, including requisitions and purchase orders. It provides an overview of documents pending approval and allows approvers to review details and make decisions.
Buyer’s Work Center (BWC)
A more advanced and comprehensive interface that integrates many of the functionalities of the other workbenches into a single, streamlined environment. The Buyer’s Work Center is designed to enhance productivity by providing buyers with a centralized place to perform their tasks, including requisition and purchase order management, supplier negotiations, and document approvals.
