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PROCURE TO PAY

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Procure to Pay

Procurement

1. DETERMINATION

OF REQUIREMENTS

2. SOURCE DETERMINATION

4. PO

PROCESSING

6. GOODS

RECEIPT

8. INVOICE

VERIFICATION

9. PAYMENT

5. ORDERMONITORING

3. VENDOR SELECTION

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Accounts Payable

Originates from the Purchase-to-Pay Cycle

Purchase Req

Purchase Order

Goods Receipt

Invoice

Verification

Accounts

Payable

Payment

Based on specific request or MRP run

Released to suppliers

Dr. Inventory/Asset XX

Cr. GR-IR Clearing Account XX

Dr. GRIR Clearing Account XX

Cr. Accounts Payable-Vendor XX

Payment Run

Dr. Accounts Payable-Vendor XX

Cr. Cash In Bank XX

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Determination of Requirements

Creation of Purchase Requisition

(Manual or MRP)

History of changes in Purchase Requisition(Change Log) item

Purchase Requisition status

Release (Approval) Strategy

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Request for Quotation (RFQ)

Reference technique in RFQ

creation

Price comparison of the quotations

Source Determination and Vendor Selection

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Purchase Order Processing and Monitoring

Reference technique in PO creation

Pricing Condition

History of changes in Purchase Order

(Change Log) header/item

Purchase Order status Release (Approval) Strategy

Tolerance limit set-up

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Goods Receipt with reference toPO

Material document and Accounting

document creation after posting

Resulting to: Inventory update

Update of G/L accounts

Updates in the Purchase Order

Update in Material cost (MovingAverage Price)

Goods Receipt

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SAP Three-Step Verification

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Logistics Invoice Verification

Creates Accounting Document for

referencing

Provides 3-way matching (Purchase

Order against Goods Receipt and

the Vendor Invoice)

It allows credit memos to be

processed, either as invoice

reversals or return deliveries.

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Payments (A/P)

Dual control of master record

Simultaneous updating of subsidiary ledger and

general ledger (minimize reconciliation activities)

Instant access to details of account balances perVendor

Drill down facility down to the original document

Full audit trail

Manual or automatic processing of paymenttransactions

Check information on payment transactions

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Logistics Invoice Verification

Creates Accounting Document for

referencing

Provides 3-way matching (Purchase

Order against Goods Receipt and

the Vendor Invoice)

It allows credit memos to be

processed, either as invoice

reversals or return deliveries.

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Released

invoice1000 Payment

programPaymentprogramBank

1000Vendor

Vendor

invoice?

PurchaseOrder

102030

Invoice

verificationInvoice

verificationBlockedinvoice

Payments

Back to Procurem ent Process

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Payments (A/P)

Dual control of master record

Simultaneous updating of subsidiary ledger and

general ledger (minimize reconciliation activities)

Instant access to details of account balances perVendor

Drill down facility down to the original document

Full audit trail

Manual or automatic processing of paymenttransactions

Check information on payment transactions