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PURCHASING
1. PO Matching Rules.
2. Internal Requisition to Internal Sales Order.
3. Position based Approval Hierarchy.
4. Types of Purchase order
5. Purchasing Options.
6. Document type.
7. Blanket Purchase agreement.
8. Purchasing Key tables and their functionalities.
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PO Matching Rules
In the list below, a setting at any level will override the settings above it.
1. Oracle Purchasing Options
a. Navigate to: Setup > Organizations > Purchasing Options
b. Select Default Alternative Region
2. Supplier Information
a. Navigate to: Supply Base > Suppliers
b. Query on specific supplier
c. Click on Open
d. Select Receiving Alternative Region
3. Line Types
a. Navigate to: Setup > Purchasing > Line Types
b. In the Receipt Required field: Yes = 3-way, No = 2-way
4. Items
a. Navigate to: Items > Master Items
b. Query on specific item
c. Select Purchasing Alternative Region
d. In the Invoice Matching section: Yes = 3-way, No = 2-way
5. Purchase Order Shipments
a. Navigate to: Purchase Orders > Purchase Orders
b. Enter (header and) line information
c. Click on Shipments button
d. Select More Alternative Region
In general Oracle ERP doesnt let you make payments without validating
the invoice. (There is a workaround to turn this off). Usually no
organization want to turn-off matching rules because they want to ensure
the payment is going out for the right reason.
2-Way:
In 2- way, we will compare two documents PO and Invoice.
3-Way:
In 3-Way you will compare 3 documents i.e PO+reciept+Invoice.
3-way matching verifies that the receipt and invoice information match
with the quantity tolerances defined:
4-Way:
In 4-Way you will compare 4 documents i.e
PO+Receipt+Invoice+Inspection.
4-way matching verifies that acceptance documents and invoice
information match within the quantity tolerances defined
Invoice Price < = Purchase Order Price
First, Start with creating internal requisition. Make sure requisition type is
selected as Internal requisition.
Run Order Import concurrent program with Order source as internal and
order reference as requisition number.
Parameters needed as it is
If you choose to use position hierarchies, you must set up positions. Even
though the position hierarchies require more initial effort to set up, they
are easy to maintain and allow you to define approval routing structures
that remain stable regardless of how frequently individual employees
leave your organization or relocate within it.
Setups required for Position hierarchy in detail:
Say we want to implement the below position hierarchy for the
Requisition Document approval routing in Purchasing (Each rectangle
represents a Position), below are the setups required:
2) Create Positions S20, MGR, DIR based on the above hierarchy in HR.
Navigation: Human Resources responsibility > Work Structures > Position
> Description
3) Assign the positions created to the Employees who fall under the
portfolio. Each position can be assigned to more than one employee.
Navigation: Human Resources responsibility > People > Enter and
Maintain
Approval Groups window lets you define the Approval limits for a
particular group which will be assigned to a position.
As per our example, we will create three Approval Groups S20, MGR, DIR
and define the limits.
Account Range (Required) You enter the accounting flexfields for the
Low and High
Values.
Item Range For this option, you enter the item flexfields for the Low
and High Values. Location The location refers to the deliver-to location
on a requisition as well as the ship-to location on purchase orders and
releases.
Enter the Amount Limit. This is the maximum amount that a control group
can authorize for a particular object range.
Enter the Low Value. This is the lowest flexfield (accounting, purchasing
category, or item) in the range pertinent to this rule. When the object is
Location, enter the location. You cannot enter this field when the object is
Document Total.
Enter the High Value. This is the highest flexfield (accounting, purchasing
category, or item) in the range pertinent to this rule. You cannot enter
this field when the object is Location or Document Total.
Query the Position for which you want to assign the Approval group.
Select the Document type you want to assign to this position or job (As
per our example we will choose Approve Purchase Requisition)
Enter the approval group that you want to assign to the selected position
or job. The list of values includes only enabled approval groups with at
least one approval rule. (Assign it to the approval group DIR as per our
example)
Enter the Start Date and End Date for the assignment.
Purchasing Only the document owner and users listed as buyers in the
Define Buyers window may access these documents.
1. Say the S20 position creates a Purchase Order for $4,000 and submits
for Approval.
2. The system will look at which Approval Hierarchy to be used from the
Document
to determine what the Approval group is for the position MGR as MGR is
the next Position in our hierarchy.
3. Once the Approval Group is located, the rules will then be considered
one at a time, from first to last.
4. If all rules are satisfied, the Purchase Order will be forwarded to the
Manager for Approval.
Blanket Releases
You can issue a blanket release against a blanket purchase agreement to
place the actual order (as long as the release is within the blanket
agreement effectivity dates). If you use encumbrance accounting, you can
encumber each release.
Scheduled Releases
You can issue scheduled releases against a planned purchase order to
place the actual orders. If you use encumbrance accounting, you can use
the planned purchase order to reserve funds for long term agreements.
You can also change the accounting distributions on each release and the
system will reverse the encumbrance for the planned purchase order and
create a new encumbrance for the release.
Financials Options:
Use the Financials Options window to define the options and defaults that
you use for your Oracle Financial Application(s). Values you enter in this
window are shared by Oracle Payables, Oracle Purchasing, and Oracle
Assets. You can define defaults this window to simplify supplier entry,
requisition entry, purchase order entry, invoice entry, and automatic
payments. Depending on your application, you may not be required to
enter all fields.
Although you only need to define these options and defaults once, you
can update them at any time. If you change an option and it is used as a
default value elsewhere in the system, it will only be used as default for
subsequent transactions. For example, if you change the Payment Terms
for Immediate to Net 30, Net 30 will be used as default for any new
suppliers you enter, but the change will not affect the payment Terms of
existing suppliers.
N: Setup> Organizations > Financial Options
Click on Find
Accounting Financials Options:
Future Periods: Payable displays the number of future periods you use in
your set of books. Payables use this value to limit the number of future
periods you can maintain in the control Payables Periods window. You can
enter invoices in future periods.
GL Accounts
Liability:
Payables assign this account as the default Liability Account for all new
suppliers you enter. You can override this value during supplier entry. If
you use Accrual Basis accounting, then the Liability Account for any
invoice determines the liability account(s) charged when you create
accounting entries for invoices.
Prepayment:
The Prepayment account and description for a supplier sites invoices. The
financials Option value defaults to new suppliers and the supplier value
defaults to new supplier sites.
Future Dated Payment: If you use future dated payments, then enter a
value for Future Dated Payment account. This value defaults to all new
suppliers and new bank accounts. The supplier value defaults to all new
supplier sites. The bank account value defaults to new payment
documents.
When Payables accounts for future date payments, it uses the Future
Dated Payment Account from either the supplier site or the payment
document, depending on the Option you select in the Payment Accounting
region of the Payables Options window.
If you relive liability payment time, this should be an asset account. If you
relieve liability at future date payment maturity, then this should be a
liability account.
Discount Taken:
If you choose to distribute your discounts to the system Discount Taken
Account, Payables uses this account to record the discounts you take on
payments. Use the Payables Options window to select your method for
distributing discounts for your invoices.
PO Rate Variance Gain/Loss: Payables uses these accounts to record the
exchange rate variance gains/losses for your inventory items. The
variance is calculated between the invoice and either the purchase order
or the receipt, depending on how you matched the invoice. These
accounts are not used to record variances for your expense items. Any
exchange rate variance for your expense items is recorded to the charge
account of the purchase order. Payables calculate these accounts during
Payables Invoice Validation.
Expenses Clearing:
This account is required when you use the Company Pay payment option
of Oracle Internet Expenses. Payables uses this as a temporary account to
record credit card transactions activity. Payables debit this account when
you create an invoice to pay a credit card issuer for credit card
transactions. Payables credit s this account with offsets to the original
debits entries when you submit Expense Report Import for an employee
expense report entered in Internet Expenses that has credit card
transactions on it.
Miscellaneous:
Used only when importing invoices submitted via iSupplier Portal or XML
Gateway.
If you enter a value here then the system uses this account for all
Miscellaneous charges on invoices your suppliers enter in iSupplier Portal.
If you do not enter a value here then the system prorates miscellaneous
charges across Item lines on iSupplier Portal invoices.
The system also uses this value for any miscellaneous charges your
suppliers send in XML invoices. If you do not enter a value here then
import prorates miscellaneous charges across Item lines for XML invoices.
Supplier Purchasing Financials Options:
The options you define in this region, except for Inventory Organization,
are used s default values for the Purchasing region of the supplier
window. The supplier values default to new supplier sites for the supplier,
which default to new purchasing documents for the supplier site.
Note: If you use the Multiple Organizations Support feature, values you
enter in this window will default to both the supplier and Supplier Site.
You can override defaulted values during entry of the supplier, supplier
site, and purchasing documents.
Member state:
The location of your company or organization. Payables use this country
name to determine if your company or organization is located in a
member state of the European Union (EU).
VAT Registration Number:
The Value-Added Tax (VAT) registration number for your organization.
Your organization is assigned a VAT Registration Number if you register to
pay VAT. The first two characters of a VAT registration number are the
country code for the country or state where the registered company or
organization is located. Payables print this number on the header of the
Intra-EU VAT Audit Trail Report.
Human Resources Financials Options:
Use this region to enter the options and defaults for entering employee
information in the Enter Person window.
Business Group:
Enter the name of the business group that you want to associate with
Purchasing. If you use Purchasing jointly with Oracle Human Resources,
you must reference the business group that you define in oracle Human
Resource. If you use Purchasing without Human Resources, you can use
the default value. The default for this field is the Human Resources default
of Setup Business Group.
The business group determines which employees you can use in
Purchasing. In Purchasing, you can see only the employees in this
business group.
Expense Reimbursement Address:
Select the default address you want to use payments for employee
expense reports: Home or Office. The system uses this default for each
new employee you enter. You can override this default during employee
entry or expense report entry.
Use Approval Hierarchies:
Enable this option to use positions and position hierarchies to determine
approval paths for your documents within purchasing. Disable this option
of you want approval paths based on the supervisor structure.
Employee Numbering Method:
You can enter your employee numbers manually or let the system
generate sequential employee numbers. The system prevents you from
entering a value in this field if you install Oracle Human Resources or
Oracle Payroll. You can change the numbering method at any time.
o Automatic: The system automatically assigns a unique sequential
number to each employee when you enter a new employee.
o Manual: You enter the employee number when you enter an employee.
o Use National Identifier Number: The system automatically enters the
employees National Identifier Number as the employee number. For
example, a Social Security number for a United States employee.
Attention:
Be Careful if you switch from manual to automatic entry. The employee
number must be unique. When you use manual entry, you can assign any
number and in any order. If you switch to automatic after having entered
employee number manually, the system many try to assign a number
that you already assigned. If you switch from manual to automatic entry,
make sure the next available number for automatic entry is larger than
the largest number you have already recorded.
Next Automatic Number: If you select the Automatic Employee
Numbering method, enter the starting value you want the system to use
for gathering unique sequential employee numbers, After you enter a
number and save your changes, the system displays the number that it
will assign to the next new employee you enter.
Blanket PO
1.Blancket Purchase agreement is a contractual agreement between a
supplier and a customer whereby the customer agrees to purchase a
certain quantity or dollar volume of goods from the supplier over a
certain length of time
(typically in exchange, the customer gets a price break)
2. The exact dates and quantities of the deliveries need not be specified
when a blanket PO is created.
3. As and when the customer needs the goods, he/she will create a
Release
against the Blanket. The release will specify the delivery date and
quantity for the delivery.
PO_REQUISITION_HEADERS_ALL stores information about requisition headers. You need one row
for each requisition header you create. Each row contains the requisition number, preparer, status, and
description. REQUISITION_HEADER_ID is the unique systemgenerated requisition number.
REQUISITION_HEADER_ID is invisible to the user. SEGMENT1 is the number you use to identify the
requisition in forms and reports. Oracle Purchasing generates SEGMENT1 using the
PO_UNIQUE_IDENTIFIER_CONTROL table if you choose to let Oracle Purchasing generate
requisition numbers for you. PO_REQUISITION_HEADERS_ALL is one of three tables storing
requisition information. PO_REQUISITION_HEADERS_ALL corresponds to the Header region of the
Requisitions window.SEGMENT1 provides unique values for each row in the table in addition to
REQUISITION_HEADER_ID.
PO_REQUISITION_LINES_ALL
PO_REQUISITION_LINES stores information about requisition lines. You need one row for each
requisition line you create. Each row contains the line number, item number, item category, item
description, needby date, deliverto location, item quantities, units, prices, requestor, notes, and
suggested supplier information for the requisition line. LINE_LOCATION_ID identifies the purchase
order shipment line on which you placed the requisition. LINE_LOCATION_ID is null if you have not
placed the requisition line on a purchase order. BLANKET_PO_HEADER_ID and
BLANKET_PO_LINE_NUM store the suggested blanket purchase agreement or catalog quotation line
information for the requisition line. PARENT_REQ_LINE_ID contains the REQUISITION_LINE_ID
from the original requisition line if you exploded or multisourced this requisition line.
PO_REQUISITION_LINES is one of three tables storing requisition information. This table corresponds
to the Lines region of the Requisitions window.
PO_REQ_DISTRIBUTIONS_ALL
PO_DISTRIBUTIONS_ALL
Each row includes the destination type, requestor ID, quantity ordered and deliverto
location for the distribution. Oracle Purchasing uses this information to record accounting
and requisition information for purchase orders and releases. PO_DISTRIBUTIONS_ALL is
one of five tables storing purchase order and release information. Some columns in
PO_DISTRIBUTIONS_ALL contain information only if certain conditions exist:
PO_HEADERS_ALL
PO_HEADERS_ALL contains header information for your purchasing documents. You need
one row for each document you create. There are six types of documents that use
PO_HEADERS_ALL:
RFQs
Quotations
Standard purchase orders
Planned purchase orders
Blanket purchase orders
Contracts
Each row contains buyer information, supplier information, brief notes, foreign currency
information, terms and conditions information, and the status of the document.
Oracle Purchasing uses this information to record information that is related to a complete
document. PO_HEADER_ID is the unique systemgenerated primary key and is invisible
to the user. SEGMENT1 is the systemassigned number you use to identify the document
in forms and reports.
PO_LINES_ALL
PO_LINES_ALL stores current information about each purchase order line. You need one
row for each line you attach to a document. Thereare five document types that use lines:
RFQs
Quotations
Standard purchase orders
Blanket purchase orders
Planned purchase orders
Each row includes the line number, the item number and category, unit, price, tax
information, matching information, and quantity ordered for the line. Oracle Purchasing
uses this information to record and update item and price information for purchase orders,
quotations, and RFQs.
PO_VENDORS stores information about your suppliers. You need one row for each supplier
you define. Each row includes the supplier name as well as purchasing, receiving, payment,
accounting, tax, classification, and general information.
Oracle Purchasing uses this information to determine active suppliers. VENDOR_ID is the
unique systemgenerated receipt header number invisible to the user. SEGMENT1 is the
systemgenerated or manually assigned number you use to identify the supplier in forms
and reports.
Oracle Purchasing generates SEGMENT1 using the PO_UNIQUE_IDENTIFIER_CONTROL
table if you choose to let Oracle Purchasing generate supplier numbers for you. This table is
one of three tables that store supplier information. PO_VENDORS corresponds to the
Suppliers window.
PO_VENDOR_SITES_ALL
PO_VENDOR_SITES_ALL stores information about your supplier sites. You need a row for
each supplier site you define. Each row includes the site address, supplier reference,
purchasing, payment, bank, and general information. Oracle Purchasing uses this
information to store supplier address information. This table is one of three tables that store
supplier information. PO_VENDOR_SITES_ALL corresponds to the Sites region of the
Suppliers window.