Questions & Answers:

1. Explain P2P cycle

2. Explain O2C Cycle
3. How do you create the COA?
4. How do you create the Responsibilities?
5. How do you create the Calendar?
6. How do you create the Primary Ledger (PL)?
7. How do you assign Profile option to Responsibilities?
8. How Many type of currency Explain?
9. How many Year types?
10.
How Many period Type?
11.
What is Functional currency Journal and Foreign currency journal?

!.Answers
1.P2P Cycle
1 .P2P means procure to payment. In P2P cycle 3 modules are mainly
involved.
a) Inventory
b) Purchase order
c) Account Payables

Inventory
2. In every organization have inventory but incase items are available
in Inventory it will go for requisitions. Basically Requisitions Have two
types.
i.) Internal requisition (It will go for purchasing another Operating
unit under the Same Legal entity)
ii)External Requisition( It will go for purchasing out of the Suppliers )
3. For this External Requisition purpose Inventory go for Approval Basis
to Higher authority.
The Higher authority approved the Approval for External requisition.

Purchase Order
4. Inventory will send this Information to Purchase Order Dept for
Requisitions.

5. Based on Requisitions Purchase Order will raise a RFQs (request for

Quotations) to the Suppliers.
6. Quotations will be received from Suppliers.
7. Based on Quotations PO analyze the Quotations i.e called as
Quotation Analysis.
8. Based on analysis PO will choose one Base Quotation from Suppliers
Quotations.
9. PO dept will send the PO Information to supplier.
10. Receiving the goods from Supplier, and PO dept will create a GRN
(goods receipt Note).
11. This information will send to the higher authority and it will get
approved from higher authority.

Account Payables
12, Based on GRN Account Payables dept, will enter a Purchase
Invoice.
13. Against Purchase Invoice it will enter Payment.

Cash Management
14. For Payment purpose AP will go to the CASH Management dept for
reconciliation Payments with Bank Statemen
ts.
15. After Reconciled, CM will send the Information to AP dept,
16. All the transactions information will transfer into GL.

Fixed Asset
17. If any Assets purchase that assets information will transfer into FA
dept.
this is the P2P cycle according to my Knowledge

2. O2C Cycle
1. O2C means order to Cash cycle, In O2C 3 dept have mainly
involved,
a) Inventory
b) Order management
c) Account receivables

Order Management:
2.If the OM dept receiving any Sales Order from the Customer, first it
will go to the
inventory and It will Check the Items

are available OR not, if items are available, the OM will Book the Sales
Order
3. After that Booking the Sales Order it will go for Pick releasing
4. Mainly Inventory has Sub-Inventory and Staging area,

Inventory:
5. The Items are moving from Sub-Inventory to Staging area is called
as Pick release.
6. After pick releasing the OM will go for Ship Confirmation.
7. The items are transfer from Staging area to transferring vehicle is
called as SHIP Confirm.
8. After ship confirm the OM will enter one Delivering Receipt at the
time of Ship confirm.

Account Receivables
9. Based on Receipt note, Account receivables will enter one Sales
Invoice.
10. Against sales invoice AR will prepare one receivable Note.
11.AR will go for reconciliation to the CM.

Cash management:
12. CM will reconcile the Receivables with Bank Statements.
13. After reconciling this Information will transfer into AR,

General Ledger:
14. All these Transactions Information will transfer into the GL.
this is O2C cycle.

3. COA
mainly we have 4 Cs.
Calendar
Currency
Chart of Accounts.( GL Org. structure SegmentsValue set
values)
Sub-Ledger Accounting Method.
This is one of the 4Cs.
Navigation: Setup Financials Flex FieldsKey Segments
when you click on Segments, Key flex field window will be open, here we
have one short cut key (CTRL+F11) by using this the window filled with
Application, Title, And Structures (by Creating someone),

2. You can give new Structure, put on curser at existing structure, Click on
(CTRL+ down Arrow). And enter NEW structure, you will create CODE, system
will automatically taken code as title.
3. In this window we have SEGMENTS button, click on Segments, the
Segments Summary window will be open, and enter Segments
name(Company, Accounts), the system will be taken name as Window
prompt, Select Segments number( because basically under Accounting Key
Flex Field we can enter Maximum 30 Segments, and minimum 2 Segments),
4. For Each Segment required Numbering for that purpose we will create
Value set,
5.In segments Summary window Value set Button is there, click on Value set,
the value set firm will be open.
Enter value set name (Company, Account), Enter maximum size of Segment
values (3,4..), enable Right Justifying Zero Numbers (00001).
6. Assign that value set to Each Segments,
7. Under account Key Flex field, we have Two types of Qualifiers is there
i. Flex Field Qualifiers: It will use for Segments
ii. Segment Qualifiers: it will use for Segment values.
8. For each Segment required flex Field Qualifiers
it have 6 types
I . Balancing Segment FFQ
ii. Natural Account Segment FFQ
iii. Cost Center Segment FFQ
iv. Secondary Tracking FFQ
v. Inter Company Account Segment FFQ
vi. Managing segment FFQ.
By out of these six Two FF are mandatory
* Balancing Segment FFQ ( Its for Company segment)
*Natural Account Segment FFQ( Its for Account Segment)
9.Put on curser Particular Segment, Click on Flex field Qualifiers in Segments
summary window. For each segment you click on save.
10. Go to structure window Enable Freeze Flex field definition (its for
protecting the our Structure, and we cant change any information after this
enabled).
When you enable this check box, the compile button automatically
displayed.
11. Click on Compile. Close the window
Define Segment Values for segments
Navigation: Setup Financials Flex fields Key values

12. Click on Values, the Key Flex field find firm will be open and you select
Application (GL), Title (AFF), Structure (xxx), Segment (company, Account),
click on find.
13. Here you have two tabs, In Values tab enter Segment values for
Company Segment, click on Qualifiers tab you can Select Segment Qualifiers
for Company segment
basically Segment Qualifiers are 5 types
a ) Allow budgeting
b) Allow Posting
c) Account type
d) Third Party control account
e) Reconcile
14. For company Segment has only Two Qualifiers are using
i. Allow budgeting
ii. Allow Posting
if you allow this you say (yes),
15. For Account Segment the all Qualifiers are opened
Account type having 5 types
a) Expense
b) Revenue
c) Assets
d) Liability
e) ownership/standard
you can select Account as retained earnings the qualifier is (ownership)
save this window and close it.

4. Responsibilities
when you go to Switch Responsibility( File Switch Responsibility)
Select System Administrator
Define Responsibilities
Navigation: Security ResponsibilitiesDefine
1.click on Define, the Responsibilities firm will be open
2.Enter Responsibilities name( xxx General Ledger), Select
Application( General Ledger), Enter Responsibility Key( xxx_ GL) it will use for
Technical People,
3.Select Standard data( name, Application),
4. Select Main Menu (its giving the Features for particular responsibilities)
GL_SUPER USER
5. Select Concurrent program (GL concurrent Program)
Save it firm.

5. Calendar
Before creating calendar, first we have create Pre-define (period type,).
Navigation: Setupfinancials Calendar Type
1. Enter period type name (xxx_Acc_cal), Enter year, year type (fiscal year,
Calendar Year), number of periods, select Period type (weekly, quarterly,
monthly, daily, half yearly), and Save it firm
2. Define calendar
Navigation: Setup Financials Calendar Accounting
1. Enter calendar name (xxx_cal),
2. Select Prefix (based on Year type), Select period type, enter year,
Enter Quarter num. Number, Select FROM- TO , System will taken
prefix as name,
3. If you want adjustment Period, Enter Adjustment as prefix, and enable
the Adjustment checkbox.

6. Primary ledger
By using Calendar, Currency, COA we will prepare Primary Ledger.
In PL we are recording the Day to day transactions.
Define Pl we go to the navigation
Navigation: Setup FinancialsAccounting Setup Manager
Accounting Setup
when you click on Accounting setup, it will open one WEB Page,
1. Click on Create accounting setup For New creating PL,
2. if you have existing Pl, in this same window Search field is there, search
(xxx%), click on Go the existed PL will Be Open.
Click on NEXT,
3. Here we enter the PL name (xxx Pl), Select COA, CALENDAR,
CURRENCY, click on NEXT
click on FINISH, after finishing you get one Confirmation Message, and you
click on Reporting Accounting setup .
4. By Search option you go to the PL, click on GO
Go to Ledger Setup Steps
Here we have 5 steps
I. Ledger options
ii. Reporting Currency
iii. Balancing Segment values
IV. Sub- ledger accounting options
v .Sequencing
5. click on Update button against Ledger Options, click on next, Here

select retained earnings Code combination, here one window will be open ,
search the codes, and click on Create( if this not Displayed, go to Structure
window, Enable Allow Dynamic Inserts) Click on Select, Click on Finish.
You go to setup steps the ledger options status will added green color right
mark .
6. Click on update against reporting currency, Click on Complete
7. Every Organization registered at govt. The registration information is
called as Legal entity.
8. Create legal entity, Go to Structure window, Click on Legal Entity
(tab),
click on Create Legal Entity, Enter Territory, Legal entity name,
Organization name, EMI Num, Pan num,
click on Create New address, Enter Location, address 1
click on Apply
9. Go to Structure window, Search it, And Click on Add Legal entity, select
the Legal entity,
When assign the LE to Primary ledger, the System will added one operating
unit in Primary Ledger setup steps.
10. You will assign BSVs into Legal entity, Click on Update, Select BSVs
after you Assign BSVs at Legal Entity, the Status will comes into against PL
BSVs
and the System will added Intercompany accounts after assign BSVs Into
LE .
11. Click on Update Against Operating Unit, Click on Complete,
12. Click on Update against Intercompany accounts, click on
complete
13. Click on Update against Sub ledger accounting; select complete,
click on DONE
14. Click on Update against Sequencing, Select Complete, click on
apply.
Click on FINISH at Primary ledger level, You will get one message, click on
yes( if you dont want any changes), click on NO (if you want any Changes)
Close window.

7. Profile Option to Responsibilities

Go to Switch responsibility, Select sys. Admin,
Navigation: profile System
Primary Ledger will recording the daily transactions, so that transactions will
be transfer into GL, so that Purpose we will use Profile option.

Click on System, select responsibilities. Select Profile Option GL: LEDGER

NAME, click on Find
Select Primary ledger (xxxPL) At responsibility Level, Save it

8. Types of currencys
Basically currency have two types
I .Monetary: which can be measurable with Money is called as Monetary.
Monetary have two types
a) Functional Currency: The Local Currency is called as Functional
Currency
Ex: 10000 /b) Foreign Currency: The other than Local currency is called as Foreign
Currency.
Ex: 1000 $
ii. Non- Monetary: Which cannot be measurable with Money is called as
Non- Monetary.
Stat Currency: Which can be calculating with Statistical information is
called as Stat Currency
Ex: 1000 kgs

9. Year types
we have two types of years
i. Fiscal year: The year will starts from one year and ends with next year is
called as Fiscal Year.
Ex: 01-apr-2012 to 31-mar-2013, India financial calendar
ii. Calendar Year: the year will Starts one year and ends with same year is
called as Calendar year.
EX: 01-jan-2012 to 31-dec-2013,

10. Period types

Based on Organization we will choose period type.
Basically we have 6 Period types
1.Yearly (1)
2.Half-yearly (2)
3.Quarterly (4)
4. Monthly (12)
5. Weekly (52)
6. Daily (365)

11. Functional Currency journal and foreign

currency Journal
Journal: Recording the day to day transactions in the firm of ledger is
called as
Functional Currency JV: we will record the Transactions with the Help
of local Currency is called as Functional Currency journal.
Foreign Currency JV: we will record the transactions with the Help of
Other than local currency is called as Foreign Currency Journal.