Oracle Fusion Procure to Pay Cycle

Oracle Fusion Procure to Pay Cycle

The Oracle Fusion Procure-to-Pay (P2P) cycle is a series of integrated processes that organizations follow to manage their procurement and accounts payable functions seamlessly. It encompasses the entire procurement process, from the identification of a need for goods or services to the payment of invoices. Here’s an overview of the key steps in the Oracle Fusion P2P cycle:

1. Identify Need:
   1. The P2P cycle begins with the identification of a need for goods or services within the organization. This need can originate from various departments, such as procurement, operations, or project management.
2. Create Requisition:
   1. Once the need is identified, an authorized user creates a purchase requisition in Oracle Fusion Procurement.
   2. The requisition includes details about the required items or services, quantities, delivery dates, and other relevant information.
3. Approval Workflow:
   1. The requisition typically goes through an approval workflow where it is reviewed and approved by designated approvers based on predefined rules and hierarchies.
   2. Approvers can include department heads, budget managers, or procurement managers.
4. Purchase Order (PO) Creation:
   1. After approval, the purchase requisition is converted into a purchase order (PO) in Oracle Fusion Procurement.
   2. The PO specifies the terms and conditions of the purchase, including pricing, payment terms, and delivery instructions.
5. Supplier Selection and Negotiation:
   1. Organizations can engage in supplier negotiations and select suppliers based on competitive bidding, supplier performance, or existing contracts.
   2. Oracle Fusion Procurement provides tools for supplier evaluation and negotiation.
6. Purchase Order Transmission:
   1. The PO is transmitted to the selected supplier electronically through Oracle Fusion Procurement.
   2. Suppliers receive the PO and acknowledge their commitment to fulfilling the order.
7. Goods/Services Receipt:
   1. When the supplier delivers the goods or services, the receiving department records the receipt in Oracle Fusion Inventory or the relevant module.
   2. This step ensures that the received items match the quantities and specifications in the PO.
8. Invoice Processing:
   1. The supplier submits an invoice for payment based on the PO and the goods/services receipt.
   2. Invoices can be received electronically and are processed in Oracle Fusion Accounts Payable.
9. Invoice Matching:
   1. Oracle Fusion performs a three-way match between the PO, goods receipt, and invoice to ensure accuracy and validate the invoice.
   2. Any discrepancies are identified and resolved.
10. Payment Approval:
    1. Invoices that pass the matching process are sent for payment approval.
    2. Payment terms defined in the PO are used to determine the payment schedule.
11. Payment Processing:
    1. Approved invoices are processed for payment through Oracle Fusion Accounts Payable.
    2. Payments can be made through various methods, including checks, electronic funds transfer (EFT), or credit cards.
12. Payment Reconciliation:
    1. Organizations reconcile payments with their bank statements and ensure accurate financial records.
13. Reporting and Analytics:
    1. Oracle Fusion provides reporting and analytics capabilities to track and analyze procurement and accounts payable data for performance evaluation and decision-making.