Thanking u for answers to my earlier queries. How to define service item in Inventory with Navigation steps.

and how to handle purchase of service in Oracle Purachasing I am waiting for ur favourable reply at the earliest. Earliest reply will be highly appreciated.

U first need to define the Purchasing line type for Service item by suing the navigation (N)Purchasing--.Setup-->Purchasing--> Line type. Here define a Service line type wiht value basis as Amount and Purchase basis as Service.Please note that the Unit price for Amount based line is always 1 Now create a PO by selecting this line type.As soon as Amount based line type is selected the item field on PO is grayed.Then receive this item normally as we receive goods,by entering the received amount in the quantity field of the receipt form.

Purchasing Services
Purchasing provides the line type feature so that you can clearly differentiate orders for goods from those for amount-based services or outside processing. Background Requestors and buyers generally order both goods and services by quantity. You order the number of items you need in a specific unit of measure and at a given price. For instance, a buyer could order 10 computer terminals at a price of $1500 each. Later, the receiving agent records the receipt of one crate of 5 terminals. The accounts payable department receives a bill for 5 terminals, and matches the invoice against the original purchase order. Sometimes, you also need to order services in the same way. For example, you purchase 40 hours of product training at a rate of $40 per hour. You simply record the hours of training ordered and the price per hour. Once you receive the training, you record the hours received.

However, you sometimes order services by amount rather than by quantity. For example, a project manager orders $10,000 of consulting services to install a local area network. In this case, the buyer only needs to record the total amount of the service. When half of the work is complete, the project manager records a receipt of $5000. The consulting firm may send an invoice for the complete amount of the service, or it may send partial invoices. In either case, the accounts payable department must match the invoice to the original purchase order by amount. Purchasing provides you with the features you need to order both goods and services. You should be able to:
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Create your own purchasing document line types. For each line type, you should be able to specify the value basis: amount or quantity. For both amount and quantity based line types, you can specify default values for category, unit of measure, and whether you require receipt. For quantity based line types, you can specify the unit price, but for amount based line types the unit price defaults to 1. For quantity based lines, you can specify whether the line type is used for outside processing. Create a purchasing document with any combination of line types you need. AutoCreate purchase order lines from your requisition lines, grouping requisition lines for the same line type and item onto the same purchase order lines. Create amount-based purchase order lines by selecting an amount-based line type, category, item description, and total amount for the line.

Major Features Line Type The line type governs the type of requisition, purchase order, RFQ, and quotation lines you create. Quantity-based line types let you order and receive and/or invoice based on the quantity of goods or services provided. Amount-based line types let you order and receive and/or invoice based on the value of the service provided. Quantity-Based Purchasing

Use quantity-based line types when you want to specify the quantity, unit of measure, and unit price for the items you are ordering. Purchasing provides Goods as an initial quantity-based line type. You can modify this line type or create new quantity-based line types to satisfy your needs. Amount-Based Purchasing Use amount-based line types when you want to order services and other items by amount. You create an order for a service by selecting an amount-based line type, category, item description, and total amount of the service. You can also receive and match services by amount. Outside Processing Line Types You can use outside processing line types to enter purchasing documents to pay suppliers for outside processing operations. Purchasing provides Outside Processing as an initial outside processing line type, and you can create additional outside processing line types. You cannot use outside processing line types, unless Purchasing, Work in Process, and Bills of Material are installed. See: Overview of Outside Processing. Line Types Step by Step Defining Line Types Purchasing provides one initial line type: Goods. If Work in Process is installed, Purchasing also provides the line type Outside Processing. You can modify these line types or create new line types in the Line Types window. To define a new line type, you simply provide a name and description for lines types with a value basis of quantity or amount. You can then optionally specify a default category, whether receipt is required, and unit of measure. The unit price defaults to 1 for amount-based line types but is otherwise optional. You cannot specify a line as outside processing unless the value basis is quantity. You must provide a default unit of measure for amount-based line types. You use the unit of measure for amount-based lines as reference information only. Purchasing does not perform any unit conversion for amount based lines. You can create a unit of measure such as AMOUNT for amount based line types to help you determine if you ordered by amount. See: Defining Line Types. See: Defining Units of Measure. Creating Purchasing Document Lines

Purchasing lets you specify whether you are creating a document line for quantity, amount, or outside processing. You simply choose the line type when you create your document line. You enter the item, item description, quantity, unit of measure, and unit price for quantity based document lines. For amount based document lines, you enter only the category, item description, and the amount (in the Quantity field). The Unit Price defaults to 1 and you cannot change it. Setting Up a Default Line Type Since you typically use one line type more than the others, Purchasing lets you define a system default line type in the Purchasing Options window. All new purchasing document lines default to this line type. You can override this value when you need to create document lines of another type. You do not have to set up a system default if you use many different line types. See: Defining Default Options. AutoCreating Purchase Orders You can use AutoCreate Purchase Orders to convert approved requisition lines for items and services into purchase orders and releases. You can gather requisition lines for the same line type and place them onto a single purchase order. You can also place requisitions for different line types onto the same purchase order. Purchasing combines requisition lines for the same item, line type, unit of measure, and item revision onto a single purchase order line. See:Autocreate Documents Overview Enhanced Document Printing Purchasing prints your document lines according to their line types. For quantity based line types, Purchasing prints the quantity, unit price and total amount for purchase orders and RFQs. Purchasing prints only the amount for amount based document lines. Enhanced Reporting The line type feature includes enhanced reporting to differentiate between quantity and amount based orders. Purchasing prints the line type so you can easily determine whether the information is quantity or amount based. For amount based orders, Purchasing prints only the total amount of the order. Purchasing Services Step by Step Creating Requisitions for Services

Purchasing lets you create requisition lines for services and other amount based orders. When you choose an amount based line type, Purchasing automatically sets the unit price to 1 for your line and enters the default unit of measure for the line type. You cannot change the unit price or unit of measure for amount-based requisition lines. You enter the amount of the service in the Quantity field. Your total line amount is the same as the value displayed in the quantity field. You can use the quantity field in your distributions to allocate the order amount to multiple accounting flexfields. Creating Purchase Orders for Services You can use AutoCreate Purchase Orders to create purchase order lines and releases from approved requisitions. You can gather all requisition lines for services and review these lines before placing specific ones on purchase orders. You can also split a requisition line for a service into several requisition lines for goods and services. Purchasing creates a purchase order for all of the requisition lines you choose. You can also enter purchase orders for services manually by entering a service line type, the amount (Quantity) of the service, the category, and the item description. Purchasing automatically enters the unit price and unit of measure. Sourcing Services When you request a quotation from a supplier for a particular service, you can provide a complete description of the service you are requesting. You must choose a quotation type of Catalog if you want to use it for sourcing. If you provide a requested service amount on your RFQ, Purchasing prints "Amount Requested:" followed by the total amount you entered. For example, you request quotations for the installation of a local area network and you know that you would like to pay $10000. You simply create an amount-based RFQ line and one shipment for this line. Purchasing automatically sets the unit price to 1 and fills in your unit of measure. On the RFQ shipment, you enter the amount, 10000, in the quantity field. Purchasing automatically sets the shipment break price and unit of measure. When you choose sourcing information for amount-based requisition and purchase order lines, Purchasing copies the total amount from your chosen quotation shipment into the Quantity field of your purchasing document. Since you are creating an amount-based line and the unit price is set to 1, the Quantity field displays the total amount for the line. Receiving Services

You receive services the same way you receive goods. When you receive a service, your quantity fields reflect the amounts of your order. Simply specify the amount you receive, correct, or return in the Quantity fields. Purchasing displays your line type so you can determine whether you are receiving by amount or quantity. You must receive services and other amount-based purchases in the unit of measure specified on the purchase order. Matching Service Purchase Orders When matching invoices to services purchase order lines in Payables, you enter the amount invoiced in the Quantity field. Payables defaults the unit price to 1 when matching to service orders. You should not change the unit price. Payables warns you if the unit price is not 1 for service orders.

Defining Line Types Use the Line Types window to define and update line types.

When you enter a line on a purchasing document and choose a line type, Purchasing automatically displays the default information that you define here for the line type. Line types let you distinguish between quantity and amount based line items. You use quantity based line items when you know the quantity and price of the line you are ordering. For example, you might buy a dozen pens for $10. You use amount based line items when you are ordering a service. For example, you might order $5,000 of consulting services over the next year. When you are entering amount based document lines in purchasing windows such as the Purchase Orders window, Purchasing skips the Item and Revision fields, and sets the price to 1. You simply provide the total amount of 5,000 as the quantity. Then, when you record your receipts, you can enter the amount you have received as a quantity. For example, if you have incurred $300 of a $500 charge, you record a quantity of 300. You can create line types to reflect different characteristics for the items you purchase. For example, you may want to define one line type for items you order by quantity and unit price, another line type for services you order by hour, and yet another that indicates an outside processing operation used in Oracle Work In Process (WIP). You can create purchasing document lines and specify whether they are for goods, services, outside processing, or any other line type you define.

Outside processing line types are necessary when you are using WIP and want to enter purchasing documents for outside processing operations in WIP. When you choose an outside processing line type on a purchasing document line, you can enter only outside processing items and the destination type can be only Shop Floor. Purchasing automatically provides you with a line type of Goods that is quantity based. If Work in Process is installed, Purchasing also provides you with an Outside Processing line type. You can set up your purchasing options to copy a default line type for lines you add to every requisition, purchase order, RFQ, or quotation document. You can override the default line type for each document line you create. Prerequisites Define categories. See: Defining Categories. Define units of measure. See: Defining Units of Measure. To define line types: 1. Navigate to the Line Types window from the menu. 2. Enter the Name and Description of the line type. 3. Enter the Value Basis for the line type. You cannot update this field after you save your work. Amount: Receive items by amount. You cannot change the unit of measure and unit price on purchasing document lines. Quantity: Receive items by quantity. Outside Processing line types must have this value basis. 4. Enter the default purchasing Category for items with this line type. You can override this purchasing category on purchasing document lines. 5. Select Receipt Required if you want this as the default on your purchasing document shipments with this line type. You can overrule the default when you enter the shipment. 6. Enter the default Unit of measure for items with this line type. You must enter a default unit when you use the Amount value basis for your line type.

You can override this unit of measure on your purchasing document lines only when you use non-Outside Processing line types with Quantity value basis. If you use the Amount value basis, you may want to choose your functional currency as the unit of measure. For example, if your functional currency is US dollars, you may want to define a unit of measure USD that you can use for your line types with the Amount value basis. 7. Enter the default Unit Price for items with this line type. Purchasing automatically enters a unit price of 1 when you use the Amount value basis and prevents you from updating this price when you create your line type. You can override this unit price on your purchasing document lines only when you use line types with Quantity value basis. 8. Select Outside Processing to restrict this line type to purchasing outside processing. Also, when you use an outside processing line type on a purchasing document, your choices for the item are limited to outside processing items. You can select this check box only if the value basis is Quantity and if you are using Work in Process. 9. Enter the Inactive Date on which the line type is no longer usable. 10. Save your work.