Saturday, October 17, 2009
Sunday, July 26, 2009
Oracle Release 12 Enhancements
R12 changes in Oracle Financials
1. Describe ledgers versus Set of Books. Explain ledger sets
2. Describe that responsibilities are changing.
3. Describe the changes and new functionality for GIS or Advanced Global Intercompany
4. Explain SLA
5. Brief the major updates for FA.
6. Describe new functionality in Payables for Assets
7. Describe the changes for Vendors/Suppliers, Banks, TAX all being centralized
General Ledger
1. General Ledger now has Ledgers. Replaces Set of Books.
2. A ledger Determines the currency, Chart of Accounts, Accounting Method, Ledger
Processing Options and Subledger accounting method.
3. Ledgers are defined when you create accounting setups in Accounting Setup
Manager.
Ledger Set – Assign to single Responsibility
Logical grouping of ledgers with the same chart of Accounts and
Calendar /Period type. The Calculation Basis for
cross/multiledger Inquiry, Reporting, and shared services
operations.
- Opening/Closing Period
- Creating period closing journals, Allocations & Recurring Journals
- Translating Balances
- Reporting
Responsibilities
Responsibilities
1.One responsibility can now be used to access multiple legal entities and ledgers.
2.Data Access Sets are used to control access.
3.When submitting a concurrent request you can submit the report for one or all the
ledgers/Legal entities that you have been given access to.
4.GL data access profile option replaces GL set of books.
Intercompany New Features
1.New separate product
2.Name: Advanced Global Intercompany System - AGIS
3.Ability to create invoices (AR and AP)
4.Multiple recipients Support
5.Proration of transaction distribution amounts
6.Upload Transaction Batches created in Excel
1. Describe ledgers versus Set of Books. Explain ledger sets
2. Describe that responsibilities are changing.
3. Describe the changes and new functionality for GIS or Advanced Global Intercompany
4. Explain SLA
5. Brief the major updates for FA.
6. Describe new functionality in Payables for Assets
7. Describe the changes for Vendors/Suppliers, Banks, TAX all being centralized
General Ledger
1. General Ledger now has Ledgers. Replaces Set of Books.
2. A ledger Determines the currency, Chart of Accounts, Accounting Method, Ledger
Processing Options and Subledger accounting method.
3. Ledgers are defined when you create accounting setups in Accounting Setup
Manager.
Ledger Set – Assign to single Responsibility
Logical grouping of ledgers with the same chart of Accounts and
Calendar /Period type. The Calculation Basis for
cross/multiledger Inquiry, Reporting, and shared services
operations.
- Opening/Closing Period
- Creating period closing journals, Allocations & Recurring Journals
- Translating Balances
- Reporting
Responsibilities
Responsibilities
1.One responsibility can now be used to access multiple legal entities and ledgers.
2.Data Access Sets are used to control access.
3.When submitting a concurrent request you can submit the report for one or all the
ledgers/Legal entities that you have been given access to.
4.GL data access profile option replaces GL set of books.
Intercompany New Features
1.New separate product
2.Name: Advanced Global Intercompany System - AGIS
3.Ability to create invoices (AR and AP)
4.Multiple recipients Support
5.Proration of transaction distribution amounts
6.Upload Transaction Batches created in Excel
Wednesday, May 20, 2009
Checklist for Oracle Accounts Payable
1. Choose Set of Books
2. Setting up Banks
a. Defining Internal Banks
b. Payable Options
c. Defining Payable Documents
3. Creating Suppliers
a. Overview of Suppliers
b. Supplier Information - Control Region
c. Bank Account Region
d. Supplier Information - Invoice Tax region
e. Entering Basic Supplier Site Information
f. Supplier Site Information - General Region
g. Supplier Site Information - Tax Reporting region
h. Supplier Reports
4. Invoices
a. Invoice Types
b. Assigning a Default GL Date
c. Entering Invoices
d. Batch Control Form
e. Invoice Structure
5. Demo Examples
a. Type of Accounting Flows
b. Invoice Gateway
c. Apply & Release Holds on AP invoices
d. Levels of Invoice Approval
6. Processing Debit and Credit Memos
a. Clearing a Credit
b. Recording a Price Correction
c. Processing Pre-Payments
7. Accounting in Oracle Payables
a. Accounting Events :
b. Creating Accounting Entries :
c. Viewing Accounting entries
d. Overview of Transferring accounting to GL
e. Reviewing accounting Entries
8. Implementing Supplier Invoices
a. Setting Tolerance Levels for invoice Taxes
b. Setting up invoice payables options
c. Implementation considerations
9. Payments
a. Payment overview
b. Create a quick Check
c. Processing Stop Payments
d. Voiding Payments
e. Refund
f. Overview of Payment Batches
g. Overview of Electronic Payment Options
h. Pre-Requisites for processing electronic payments
i. Creating EDI payment batches
10. Implementing Payments
a. Payment Terms
b. Payment Formats
c. Define Financials Options (Required)
d. Define Payables Options (Required
2. Setting up Banks
a. Defining Internal Banks
b. Payable Options
c. Defining Payable Documents
3. Creating Suppliers
a. Overview of Suppliers
b. Supplier Information - Control Region
c. Bank Account Region
d. Supplier Information - Invoice Tax region
e. Entering Basic Supplier Site Information
f. Supplier Site Information - General Region
g. Supplier Site Information - Tax Reporting region
h. Supplier Reports
4. Invoices
a. Invoice Types
b. Assigning a Default GL Date
c. Entering Invoices
d. Batch Control Form
e. Invoice Structure
5. Demo Examples
a. Type of Accounting Flows
b. Invoice Gateway
c. Apply & Release Holds on AP invoices
d. Levels of Invoice Approval
6. Processing Debit and Credit Memos
a. Clearing a Credit
b. Recording a Price Correction
c. Processing Pre-Payments
7. Accounting in Oracle Payables
a. Accounting Events :
b. Creating Accounting Entries :
c. Viewing Accounting entries
d. Overview of Transferring accounting to GL
e. Reviewing accounting Entries
8. Implementing Supplier Invoices
a. Setting Tolerance Levels for invoice Taxes
b. Setting up invoice payables options
c. Implementation considerations
9. Payments
a. Payment overview
b. Create a quick Check
c. Processing Stop Payments
d. Voiding Payments
e. Refund
f. Overview of Payment Batches
g. Overview of Electronic Payment Options
h. Pre-Requisites for processing electronic payments
i. Creating EDI payment batches
10. Implementing Payments
a. Payment Terms
b. Payment Formats
c. Define Financials Options (Required)
d. Define Payables Options (Required
Monday, May 18, 2009
Oracle Accounts Payable
Overview of Accounts Payable
Oracle Payables contains four major processes:
Set up Suppliers: Before entering invoices for a new supplier (vendor), you need to setup the supplier in Oracle Payables
Enter and Approve invoices: You can enter and approve invoices individually or in batches.
Pay invoices: You can also pay approved invoices individually or in batches by check or electronically.
Post transactions to the general ledger: You can transfer the invoices and payment accounting distributions and audit information to the general ledger interface. You can then use your general ledger system to import this information and create entries.
Accounts Payable Questionnaire for Client:
1. Overview of the Accounts Payable operations.
2. Provide samples of vendor master records.
3. Do you differentiate vendor sites which can receive payments and sites which
cannot receive payments?
4. Describe the invoice vouchering process.
5. Are recurring expense distributions for fixed or varying amounts?
6. Explain Payment Terms List, Interest Charges, and Discounts?
7. Should invoices be matched completely, partially or both?
8. Explain Invoice Approval Process? Describe the approval process when invoices
need to be placed on hold and manually released?
9. What requirement is there to process employee expense reports? Please describe.
Provide Sample.
10. What is the current process to generate expense payments to employees?
11. Do your employees have company credit cards? How are company credit cards
managed (issued, audited, reconciled, etc.)?
12. List of Supplier / Payment Banks
13. Is there a requirement to use Electronic Funds Transfer?
14. Is there a requirement to use Wire Transfers?
15. Is there a requirement to process Automatic Payments?
16. Is there a requirement to process Manual Payments? If so, is a separate bank
account used?
17. Is there a requirement to process Partial Payments?
18. Is there a requirement to process Pre-Payments?
19. Is there a requirement to process Recurring Payments?
20. Is there a requirement to process immediately available ‘Quick Checks’?
21. What is the current procedure for vendor advances?
22. How are vendor advances reconciled when the vendor invoice is submitted?
23. Do you have, or do you require, a priority system for payments? Describe its use.
24. What is your current payment cycle? (How often do you print checks?)
25. If recurring payments are used, what is the normal period cycle for these
payments?
26. Is there a requirement to use Computer Generated checks?
27. What is your process to cancel checks?
28. Are all invoices paid in local currency and what currency is used? If not local,
list the foreign currencies used.
29. How many payment formats do you have? Provide samples.
30. Do you print the check number on the check/remittance or is it pre-printed?
31. Should a remittance advice note be produced, and when?
32. What is the policy/procedure for handling stop payments?
33. What is the policy/procedure for handling void payments if they have been
recorded?
34. What are the requirements for reporting tax payments (e.g.
company, rate or tax authority)?
35. Do you have to pay other businesses within the Group
36. Do you use Cash or Accrual Based Accounting?
37. Please provide all copies of Payable reports
38. How long do you do check reconciliation?
Oracle Payables contains four major processes:
Set up Suppliers: Before entering invoices for a new supplier (vendor), you need to setup the supplier in Oracle Payables
Enter and Approve invoices: You can enter and approve invoices individually or in batches.
Pay invoices: You can also pay approved invoices individually or in batches by check or electronically.
Post transactions to the general ledger: You can transfer the invoices and payment accounting distributions and audit information to the general ledger interface. You can then use your general ledger system to import this information and create entries.
Accounts Payable Questionnaire for Client:
1. Overview of the Accounts Payable operations.
2. Provide samples of vendor master records.
3. Do you differentiate vendor sites which can receive payments and sites which
cannot receive payments?
4. Describe the invoice vouchering process.
5. Are recurring expense distributions for fixed or varying amounts?
6. Explain Payment Terms List, Interest Charges, and Discounts?
7. Should invoices be matched completely, partially or both?
8. Explain Invoice Approval Process? Describe the approval process when invoices
need to be placed on hold and manually released?
9. What requirement is there to process employee expense reports? Please describe.
Provide Sample.
10. What is the current process to generate expense payments to employees?
11. Do your employees have company credit cards? How are company credit cards
managed (issued, audited, reconciled, etc.)?
12. List of Supplier / Payment Banks
13. Is there a requirement to use Electronic Funds Transfer?
14. Is there a requirement to use Wire Transfers?
15. Is there a requirement to process Automatic Payments?
16. Is there a requirement to process Manual Payments? If so, is a separate bank
account used?
17. Is there a requirement to process Partial Payments?
18. Is there a requirement to process Pre-Payments?
19. Is there a requirement to process Recurring Payments?
20. Is there a requirement to process immediately available ‘Quick Checks’?
21. What is the current procedure for vendor advances?
22. How are vendor advances reconciled when the vendor invoice is submitted?
23. Do you have, or do you require, a priority system for payments? Describe its use.
24. What is your current payment cycle? (How often do you print checks?)
25. If recurring payments are used, what is the normal period cycle for these
payments?
26. Is there a requirement to use Computer Generated checks?
27. What is your process to cancel checks?
28. Are all invoices paid in local currency and what currency is used? If not local,
list the foreign currencies used.
29. How many payment formats do you have? Provide samples.
30. Do you print the check number on the check/remittance or is it pre-printed?
31. Should a remittance advice note be produced, and when?
32. What is the policy/procedure for handling stop payments?
33. What is the policy/procedure for handling void payments if they have been
recorded?
34. What are the requirements for reporting tax payments (e.g.
company, rate or tax authority)?
35. Do you have to pay other businesses within the Group
36. Do you use Cash or Accrual Based Accounting?
37. Please provide all copies of Payable reports
38. How long do you do check reconciliation?
Monday, May 11, 2009
Purchasing - Setup - Overview
1. Define Employee - Employee setup for document approval
(N) US Payroll Manager>People>Enter and Maintain
Screen - People
2. Define Jobs
(N) US Payroll Manager>Work Structures>Jobs>Descriptions
Screen - Position
3. Define Position
(N) US Payroll Manager>Work Structures>Position>Descriptions
Screen - Position
4. Choose Set of Books
(N) Purchasing>Setup >Organizations > Set of Books > Choose
This step would be required for a new Operating unit set up and if the same
function is not already done in the Accounts Payable module.
5. Create Position Hierarchies
(N) Purchasing>Setup >Personnel>Position Hierarchy
Screen - Position Hierarchy
Steps:
1. Query for the Position Hierarchy Name
2. Click in the Position Block against the Name Field and query for the top
most position in the Hierarchy. All those positions existing in the
Hierarchy will have the Exists in Hierarchy check box checked.
3. Click in the Subordinates field and keep drilling down to see the listed
subordinates below the appearing subordinate.
6. Assign Employees
(N) US Payroll Manager>People>Enter and Maintain > Assignment
Screen - Assignment
7. Assign Employee to the User
(N) System Administrator>Security>User > Define
Screen - Users
Link the User name with the Person (Employee).
8. Run Fill Employee Hierarchy Report
(N) Reports>Run>Fill Employee Report
Run this report to compile the Position Approval Hierarchy. Any change to the
Hierarchy is ineffective until and unless this report is not run.
9. Tax Codes (N) Payables>Setup>Tax>Codes
Description: In the Tax Codes window, you define the tax names, or tax codes, you use on invoices to record invoice taxes you pay to suppliers and tax authorities. Each tax code has a tax type, a tax rate, and an account to which you charge tax amounts.
These Tax code can be defined at various levels i.e. Financial options, Suppliers, Item etc. and can have a predefined hierarchy choosen for defaults on the transactions.
10. Financial Positions (N) Setup > Organizations > Financial Options
Screen - Financial Options
This step is performed for a new Operating Unit. This is a common set up for
Accounts Payable module & Purchasing Module.
11. Purchasing Options (N) Setup > Organizations > Purchasing Options
Screen - Purchasing Options
12. Receiving Options
(N) Setup > Organizations > Receiving Options
Screen - Receiving Options
13. Approval Groups (N) Purchasing>Setup >Approvals>Approval Group
Screen - Approval Group
14. Approval Assignment (N) Purchasing>Setup >Approvals>Approval Assignment
Screen - Assign/Approval Group
For each position in your organization, you assign specific Approval/Control
groups to individual document types. Employees who are assigned to positions
acquire the authorization limits assigned to the respective positions.
16. Define Buyers
(N) Setup > Personnel > Buyers
Screen - Buyers
Only defined Buyers can enter Purchasing Documents
17. Quality Inspection Codes
(N) Setup > Purchasing > Quality Inspection Codes
Screen - Quality Inspection Codes
Quality Codes are used at the time of Quote Comparison, analysis and approval.
New Quality codes can be defined as and when required.
18. Define Payment Terms (N) Setup > Financials > Payment Terms
Description: Define payment terms that you can assign to an invoice to automatically create scheduled payments when you submit the invoice for Approval.
You can define payment terms to create multiple scheduled payment lines and multiple levels of discounts. You can create unlimited number of payment terms.
19. Define Line Types (N) Setup > Purchasing > Line Types
Screen - Line Types
20. Define Document Types
(N) Setup > Purchasing > Document Types
Screen - Document Types
21. Look Up Codes (N) Setup > Purchasing > Look Up Codes
Screen - Purchasing Options
Oracle Purchasing application uses lookup codes to define the list of Quick Pick
values for Quick Picks throughout the system. You can customize your Oracle
Purchasing application for certain fields by adding your own codes to those
initially provided. These lookup codes are used for reference purpose only. Few
default Reports does have these Lookup Codes as one of the Report Parameters.
Assign the Inactive Date as & when any of the Lookup code is not to be used.
Ensure that the Displayed Value and the Description of the Lookup Code is self-
explanatory.
22. Profile Options
(N) System Administration Responsibility > Profiles > System Profiles
23. Open Periods
(N) Setup > Financials > Accounting > Control Purchasing Periods
Description: Open accounting periods to record purchasing activity. Your Oracle Purchasing application lets you create journal entries only for transactions you enter in an open purchasing period. You also need to open your purchasing periods to create correct ‘receipt accrual’ journal entries in your General Ledger, only if the Accrual Option is Perpetual. Use Control Purchasing Periods form to open or close in your Oracle Purchasing application.
Setup > Accounting Close Cycle >Inventory Accounting Periods
We need to open an accounting period to enter transactions in Oracle Inventory. Accounting Periods are defined in Oracle General Ledger and then opened in Oracle Inventory using the Open Accounting Periods form. Oracle Inventory allows to have multiple periods open at any given time.
24. Define Categories
(N) Setup > Item > Categories > Category Codes
Screen - Find Categories
A category is a logical classification of your items.
25. Define Category Set
(N) Setup > Items > Categories > Category Sets
Screen - Category Sets
A category set is a set or group of categories.
Each functional area viz. Purchasing, Inventory, Costing, Order entry can have a
separate default Category set.
26. Define Items
(N) Items > Item Master
Screen - Items
(N) US Payroll Manager>People>Enter and Maintain
Screen - People
2. Define Jobs
(N) US Payroll Manager>Work Structures>Jobs>Descriptions
Screen - Position
3. Define Position
(N) US Payroll Manager>Work Structures>Position>Descriptions
Screen - Position
4. Choose Set of Books
(N) Purchasing>Setup >Organizations > Set of Books > Choose
This step would be required for a new Operating unit set up and if the same
function is not already done in the Accounts Payable module.
5. Create Position Hierarchies
(N) Purchasing>Setup >Personnel>Position Hierarchy
Screen - Position Hierarchy
Steps:
1. Query for the Position Hierarchy Name
2. Click in the Position Block against the Name Field and query for the top
most position in the Hierarchy. All those positions existing in the
Hierarchy will have the Exists in Hierarchy check box checked.
3. Click in the Subordinates field and keep drilling down to see the listed
subordinates below the appearing subordinate.
6. Assign Employees
(N) US Payroll Manager>People>Enter and Maintain > Assignment
Screen - Assignment
7. Assign Employee to the User
(N) System Administrator>Security>User > Define
Screen - Users
Link the User name with the Person (Employee).
8. Run Fill Employee Hierarchy Report
(N) Reports>Run>Fill Employee Report
Run this report to compile the Position Approval Hierarchy. Any change to the
Hierarchy is ineffective until and unless this report is not run.
9. Tax Codes (N) Payables>Setup>Tax>Codes
Description: In the Tax Codes window, you define the tax names, or tax codes, you use on invoices to record invoice taxes you pay to suppliers and tax authorities. Each tax code has a tax type, a tax rate, and an account to which you charge tax amounts.
These Tax code can be defined at various levels i.e. Financial options, Suppliers, Item etc. and can have a predefined hierarchy choosen for defaults on the transactions.
10. Financial Positions (N) Setup > Organizations > Financial Options
Screen - Financial Options
This step is performed for a new Operating Unit. This is a common set up for
Accounts Payable module & Purchasing Module.
11. Purchasing Options (N) Setup > Organizations > Purchasing Options
Screen - Purchasing Options
12. Receiving Options
(N) Setup > Organizations > Receiving Options
Screen - Receiving Options
13. Approval Groups (N) Purchasing>Setup >Approvals>Approval Group
Screen - Approval Group
14. Approval Assignment (N) Purchasing>Setup >Approvals>Approval Assignment
Screen - Assign/Approval Group
For each position in your organization, you assign specific Approval/Control
groups to individual document types. Employees who are assigned to positions
acquire the authorization limits assigned to the respective positions.
16. Define Buyers
(N) Setup > Personnel > Buyers
Screen - Buyers
Only defined Buyers can enter Purchasing Documents
17. Quality Inspection Codes
(N) Setup > Purchasing > Quality Inspection Codes
Screen - Quality Inspection Codes
Quality Codes are used at the time of Quote Comparison, analysis and approval.
New Quality codes can be defined as and when required.
18. Define Payment Terms (N) Setup > Financials > Payment Terms
Description: Define payment terms that you can assign to an invoice to automatically create scheduled payments when you submit the invoice for Approval.
You can define payment terms to create multiple scheduled payment lines and multiple levels of discounts. You can create unlimited number of payment terms.
19. Define Line Types (N) Setup > Purchasing > Line Types
Screen - Line Types
20. Define Document Types
(N) Setup > Purchasing > Document Types
Screen - Document Types
21. Look Up Codes (N) Setup > Purchasing > Look Up Codes
Screen - Purchasing Options
Oracle Purchasing application uses lookup codes to define the list of Quick Pick
values for Quick Picks throughout the system. You can customize your Oracle
Purchasing application for certain fields by adding your own codes to those
initially provided. These lookup codes are used for reference purpose only. Few
default Reports does have these Lookup Codes as one of the Report Parameters.
Assign the Inactive Date as & when any of the Lookup code is not to be used.
Ensure that the Displayed Value and the Description of the Lookup Code is self-
explanatory.
22. Profile Options
(N) System Administration Responsibility > Profiles > System Profiles
23. Open Periods
(N) Setup > Financials > Accounting > Control Purchasing Periods
Description: Open accounting periods to record purchasing activity. Your Oracle Purchasing application lets you create journal entries only for transactions you enter in an open purchasing period. You also need to open your purchasing periods to create correct ‘receipt accrual’ journal entries in your General Ledger, only if the Accrual Option is Perpetual. Use Control Purchasing Periods form to open or close in your Oracle Purchasing application.
Setup > Accounting Close Cycle >Inventory Accounting Periods
We need to open an accounting period to enter transactions in Oracle Inventory. Accounting Periods are defined in Oracle General Ledger and then opened in Oracle Inventory using the Open Accounting Periods form. Oracle Inventory allows to have multiple periods open at any given time.
24. Define Categories
(N) Setup > Item > Categories > Category Codes
Screen - Find Categories
A category is a logical classification of your items.
25. Define Category Set
(N) Setup > Items > Categories > Category Sets
Screen - Category Sets
A category set is a set or group of categories.
Each functional area viz. Purchasing, Inventory, Costing, Order entry can have a
separate default Category set.
26. Define Items
(N) Items > Item Master
Screen - Items
Sunday, May 10, 2009
Oracle Purchasing Terminologies
Terms used in the conventional purchasing system and as referred in Oracle Purchasing may be different. A brief explanation of the ‘Oracle Purchasing’ terms vis-à-vis the existing terminology is provided the following paragraphs. These terms are extensively used in documenting the ‘Purchasing - To Be’ flows and it is recommended that the various users of this system get acquainted with the same.
Requestor: Any Employee who requires specific items to meet his operational needs. Requestor may or may not have the system access to enter the on-line requisitions. Requestor with no computer access will give their requisitions manually on pre-printed requisition form to the requisition ‘Preparer’ within the concerned department.
Preparer: Employee in a department with the responsibility of entering Purchase Requisitions in the system.
Approver: Employee with the responsibility and authority of approving the requisition and / or the Quotation Analysis Document and / or the Purchase Orders.
Buyer: Employee in the Purchase Department with the responsibility of entering the Requests for Quotation, the Quotations received from the Supplier and the Purchase Orders in the new system.
Requisition: Synonym for ‘Indent’.
Request For Quotation (RFQ): Synonym for ‘Inquiry’. RFQs are sent to the vendors, requesting them for their quotations for the items / services required to be purchased.
Quotation: Quotations are the ‘Vendor Offers’ for the required items / services.
Quotation Analysis: It is a ‘Comparative Statement of Quotations’.
Standard Purchase Order: Standard Purchase Orders are created for purchase of various items / services where details such as the quantity to be purchased and the negotiated costs.
Blanket Purchase Agreement: Blanket purchase agreements are signed with the vendor for the supply of goods / services over a period. Such agreements can be used when details of the goods / services you plan to buy from a specific supplier in a period are known, but you do not yet know the details of your delivery schedules. They can also be used to specify negotiated prices for your items before actually buying them.
Blanket Release: You can issue a Blanket Release against a Blanket Purchase Agreement to place the actual order with the vendor. The Releases should be within the Blanket Agreement effectivity dates.
Planned Purchase Order: It is a long term agreement committing to buy items / services from a single source. The tentative delivery schedule is given to the vendor along with other details like quantities and estimated costs.
Schedule Release: This document is issued to the vendor against a Planned Purchase Order to place the actual order. This document will confirm the specific quantity and delivery date to the vendor.
Contract Purchase Agreements: Contract Purchase Agreements may be entered into with suppliers to agree on specific terms and conditions without indicating the goods or services that will actually be purchased. Standard Purchase Orders can be issued at a later date referencing such Contracts.
Requestor: Any Employee who requires specific items to meet his operational needs. Requestor may or may not have the system access to enter the on-line requisitions. Requestor with no computer access will give their requisitions manually on pre-printed requisition form to the requisition ‘Preparer’ within the concerned department.
Preparer: Employee in a department with the responsibility of entering Purchase Requisitions in the system.
Approver: Employee with the responsibility and authority of approving the requisition and / or the Quotation Analysis Document and / or the Purchase Orders.
Buyer: Employee in the Purchase Department with the responsibility of entering the Requests for Quotation, the Quotations received from the Supplier and the Purchase Orders in the new system.
Requisition: Synonym for ‘Indent’.
Request For Quotation (RFQ): Synonym for ‘Inquiry’. RFQs are sent to the vendors, requesting them for their quotations for the items / services required to be purchased.
Quotation: Quotations are the ‘Vendor Offers’ for the required items / services.
Quotation Analysis: It is a ‘Comparative Statement of Quotations’.
Standard Purchase Order: Standard Purchase Orders are created for purchase of various items / services where details such as the quantity to be purchased and the negotiated costs.
Blanket Purchase Agreement: Blanket purchase agreements are signed with the vendor for the supply of goods / services over a period. Such agreements can be used when details of the goods / services you plan to buy from a specific supplier in a period are known, but you do not yet know the details of your delivery schedules. They can also be used to specify negotiated prices for your items before actually buying them.
Blanket Release: You can issue a Blanket Release against a Blanket Purchase Agreement to place the actual order with the vendor. The Releases should be within the Blanket Agreement effectivity dates.
Planned Purchase Order: It is a long term agreement committing to buy items / services from a single source. The tentative delivery schedule is given to the vendor along with other details like quantities and estimated costs.
Schedule Release: This document is issued to the vendor against a Planned Purchase Order to place the actual order. This document will confirm the specific quantity and delivery date to the vendor.
Contract Purchase Agreements: Contract Purchase Agreements may be entered into with suppliers to agree on specific terms and conditions without indicating the goods or services that will actually be purchased. Standard Purchase Orders can be issued at a later date referencing such Contracts.
Purchasing Cycle
Purchasing Cycle:
Requisitions: Requisitions generated by various departments of your organization. They basically say that ‘I WANT THIS ITEM’ mentioning the item quantity and required date
Request for Quotation: The purchasing person sends the requirement to various suppliers giving details of the item and can also specify own terms and conditions such as payment terms, price etc.
Quotations: The Supplier responds to the RFQ and sends their quotations mentioning details of the item and all their terms and conditions regarding payment terms, discount, delivery schedules, etc.
Purchase Orders: The quotations received from various suppliers are compared and PO made for them in which all the terms and conditions of the firm are mentioned as regards to Payment, price, etc.
Receiving Goods: Suppliers ship the goods, which are received in your organization
Payments: After clearance from the receiving department about the receipt of goods, payments are made to the suppliers.
Close the PO: After the items are received, payments made you can close the PO.
Purchasing Requirements
• Item
• Quantity
• Ship to Address
• Bill to Address
• Delivery Schedules
• Terms and Conditions
• PO Numbering
• Approval Authority
• Supplier
• Accounts
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