Purchasing Set Ups

Purchasing

1. What are your pay group lookup codes?
2. What are your FOB lookup codes?
3. What are your Purchasing line types?
4. Set the Profile MO: Default Operating Unit as Blank for Setup User (Before Defining Purchasing Options)
5. Define Purchasing system options
6. Update your Purchasing document types
7. Define Standard Purchase Order Document Styles
8. What are your Purchasing Quality Inspection codes?
9. Define Purchasing transaction reasons
10. Set the Profile MO: Default Operating Unit as Blank for Setup User (Before Creating Requisition Templates)
11. What are your requisition templates?
12. Assign line items to your requisition templates
13. Who are your approved suppliers?
14. Do you want to add suppliers to your approved supplier lists?
15. Who are the buyers in your organization?
16. Define the profile option for Pricing Transaction entry
17. What is the line type to be used for contractor requests?
18. Concurrent Request: Submit Purchasing Workflow Background Processes
19. Profile Options for Purchasing.
20. Set the Profile MO: Default Operating Unit as Blank for Setupuser (Before Defining Purchasing Approval Groups)
21. In which organization will you be setting up your approval groups?
22. Set the profile option 'Utilities Diagnostics' to 'Yes' to disable the password prompt.
23. Set the profile option 'Utilities Diagnostics' to 'No' to enable the password prompt.
24. Setup your purchasing approval groups
25. Assign Purchasing approval groups to HR jobs
26. Define position hierarchies to be used in the purchasing
27. How would you like to arrange positions in hierarchy?
28. Submit request for Filling Employee Hierarchy.
29. Assign Purchasing approval groups to HR Position.
30. Define Purchasing Cost Factor
31. Set PO: Allow Referencing CPA Under Amendment profile variable at Organization or Site Level.
32. Open Purchasing Accounting Periods
33. Update your Internal Requisition Purchasing document type

Advanced Pricing for Purchasing Set ups:

1. Set Source System Code to Oracle Purchasing for SETUPUSER
2. Set Pricing Transaction Entity to Procurement for SETUPUSER
3. Setup Advanced Pricing Profile Options at Application Level for Purchasing
4. Define Price Lists For Purchasing
5. What are the items to be assigned to your Purchasing Price Lists?
6. Assign items with price break to the Purchasing Price list.
7. Update Purchasing price lists with Conversion criteria
8. What are the Freight based Pricing Modifiers for Purchasing?
9. What are the criteria to apply Freight based Modifiers for Purchasing?
10. Run Build Attribute Mapping Rule for Purchasing
11. What are the Freight based Pricing Modifiers Lines for Purchasing?
12. Identify the Criteria to Apply Freight based Modifier Lines for Purchasing.
13. Run Concurrent Request - QP: Build Attribute Mapping Rules for Purchasing
14. Reset Source System Code to Oracle Pricing for SETUPUSER
15. Reset Pricing Transaction Entity for SETUPUSER

Landed Cost Management Set ups:

1. Enable Inventory Organization for Landed Cost Management
2. Update Inventory Organization Receiving Parameters with LCM Accounts
3. Define Landed Cost Management Options
4. Define LCM Shipment Line Types
5. Define LCM Shipment Types
6. Associate LCM Shipment Line Types to LCM Shipment Type
7. Associate Party Types Allowed to LCM Shipment Type
8. Associate Party Types Usage to LCM Shipment Type
9. Associate Source Types Allowed to LCM Shipment Type
10. Setup Advanced Pricing Profile Options at Application Level for LCM
11. Set LCM UOM Classes profile variable at Site Level
12. Setup Landed Cost Management Profile Options at Responsibility Level for LCM and Purchasing

iProcurement Set Ups:

1. What are the line types to be used for non catalog requests?
2. What are your iProcurement catalogs?
3. Create stores to organize your catalogs
4. Assign catalogs to your stores
5. What are your iProcurement shopping categories?
6. Map shopping categories to categories in your central procurement system
7. What are the top-level categories that requesters can browse when looking for items?
8. Assign shopping categories to your top-level categories

Sourcing Set Ups:

1. Set up your Reusable Supplier Invitation Lists
2. Add additional suppliers to your Reusable Supplier Invitation List
3. Define reusable attribute lists that you can associate with your RFQ's
4. Add attributes to your attribute list
5. Enter acceptable response values for the attributes
6. Define your RFQ templates
7. Sourcing Post Setup Steps

iSupplier Portal Set Ups:

1. Setup iSupplier Portal profile options
2. Setup Manual iSupplier Portal profile options

Document Types in Purchasing

Document Types in Purchasing


Blanket Purchase Agreements : Used for purchases that will be delivered according to an unknown schedule, or with negotiated prices. Releases are performed when a shipment is scheduled. Can be limited by Price, Quantity, and Effective Dates.Blank Releases are Issued against Blanket Purchases for an actual scheduled order,and is constrained by Price, Quantity, and Effective Dates.
Contract Purchase Orders : Created when terms and conditions pertaining to goods or services are agreed upon in a contract. Standard purchase orders are issued against the contracts and are constrained to these terms and conditions.In this PO material required 
are not specified.
Planned Purchase Orders : Used when a long-term agreement to buy goods or services from a source is made, and tentative delivery schedules are known. Scheduled Releases Used with Planned Purchase Orders to create the actual orders.
Standard Purchase Orders : Used for one-time purchases when the goods or services along with the estimated costs are known.
Internal Requisitions : Used to create requisitions for internally sourced items from locations and organizations set up in EBS.
Purchase Requisitions : Used to create requisitions for externally sourced items. Requisitions need to be turned into Purchase Orders or Releases prior to purchase.


Requisition Status Changes

Status                        Meaning
Approved                   Requisition has been approved.
In Process                  Requisition has been submitted for approval and is still pending.
Incomplete                 Requisition has not yet been submitted for approval.
Pre-Approved             Approver who has proper authority has forwarded requisition to another person for additional approvals.
Rejected                    Approver rejected the requisition.
Requires Reapproval   Changes were made to an approved requisition, requiring it to be          reapproved.
Reserved                    Budgetary Funds are reserved for the requisition.
Returned                    Approved requisition is returned to requestor by the buyer. Note
                                  that requisitions in this status are still considered in MRP, as they
                                  are approved. Canceling the requisition will remove it from MRP.




Purchasing Status Changes


Action                         Description
Cancel                 PO Cancels the entire PO, allowing no further actions on the order or any associated receipts.
Close         Closes the purchase order so that it will no longer appear on reports.
Close for Invoicing Closes the order of invoicing only.
Close for Receiving Closes the order for receiving only.
Finally Close                 Once an order is Finally Closed, no additional transactions can    happen to the order or any of its associated transactions. This can not be undone via any standard functionality in the applications, and it will lock up any pending or future transactions that are attempted against the order (such as matching it to an invoice or   adjusting an invoice that is matched to it).
Freeze                        Prevents any future modifications to the order but allows receipts and  invoices against it. This is removed by unfreezing the order.
Place on Hold               Placing an order on hold will not only unapprove it, but will also prevent printing, receiving, invoicing, and reapproval until the hold is removed by selecting RELEASE HOLD. At this time, the order will require reapproval.
Open for Invoicing This is only available when the order or line is closed for invoicing; it allows it to be reopened.
Open for Receiving This is only available when the order or line is closed for receiving; it allows it to be reopened. As mentioned earlier, closed lines can still be received, so this is more about reporting than the actual receipt.

Purchasing Procure to Pay Set ups

Basic Procure to Pay Set ups 

1. Define Accounting Key Flexfields and load account numbers(Req) -  General Ledger account numbers are required on several of the setup forms for purchasing as well as on the distributions added when creating a purchase order.
2. Setup Accounting Calendar (Req)-  This associates dates with a specific accounting period. 
3. Set Up of Currencies (Req) -  Any currency used on a purchase order must be enabled, and  conversion types created and  conversion rates entered. 
4. Ledgers (Req)- All transactions are assigned to a specific Ledger for accounting.
5. Locations for Delivery(Req) - Locations are used for several purposes in EBS, including business locations that are associated with Legal Entities, physical locations that are associated with employees, and purchasing locations that represent where a product will be delivered.
6. Organization Classification (Req) - For Purchasing, the Organization setup required is called Operating Unit. The main purpose of an Operating Unit Organization is to associate a purchasing organization to the Ledger; this is a many-to-one relationship, where each Ledger can have multiple organizations associated to it, but each organization can be related to only one Ledger.EBS also requires an inventory organization to be set up when using purchasing
7. Inventory Parameters (Req) :  Enter Oraganization and calender
8. Define Items (Req)
9. Define Unit of Measure, UOM Clases and conversions (Req)
10. Creating Categories for Purchasing (Req) : Two ways to create requisitions and purchase orders in EBS are  with items, or by using a category with a description. They can be assigned to items to group them for reporting or sourcing rules, or used to assign an account number and to derive the accounting information. Categories can also be assigned to approval groups, limiting the documents a person can approve. Buyers can be associated with a specific category, allowing them to AutoCreate purchase orders only for the category they are associated with. Categories are Key Flexfields, or fields required by EBS that allow flexibility in their formatting and qualifiers to be added for additional functionality. The default item category used by Purchasing Functional Area, called the PO Item Category, allows for multiple segments to be created (Purchasing Superuser > Setup > Flexfields > Key > Segments, select the Flexfield title of Item Categories).
11. Set up Suppliers and supplier sites
12. Set up Employee (Req)
13. Setting Up Approvers for Requisitions and Purchase Orders (Req) : The approval rules used -  the purchasing hierarchies or Oracle Approval Management AME), which is only available for requisition approvals.
14. Set up Buyers (Req) : In EBS employees setup as Buyers are allowed to create purchase orders, while any employee with the proper access can create requisitions and approve both documents.
15. Set up Purchasing Options  (Req)  : Document Controls, Document Defaults, Receipt Accounting , document Numbering
16. Set up Receiving Options  (Req) : Receiving Options , Accounting, Cost factors
17. Set up Finanacial Options (Req) : 
18. Set up Line Types : Line types are used on both requisitions and purchase orders, and they determine how the  amount is calculated on the line.

         Basis for Line Types
         Value Basis    Purchase Basis           Calculation
         Amount Services                  Quantity entered becomes line amount. Price  can not be updated and defaults to 1.
          Fixed Price Services Temp Labor  Only Amount can be entered. Quantity and Price are null.
          Quantity Goods                    Quantity entered times Price entered equals line amount.
          Rate Temp Labor             Only Price can be entered; it becomes the line amount.

     19. Set up Requisition Templates (Opt) : Requisition Templates can be defined and used with the Supplier Item Catalog

     20. Set Up Document Types (Req) : Document Types, selected when entering a purchasing document, are used to set up approval options and controls for the document

PO Accounting

Drop Shipment Set ups and Flow

Drop Shipment Set ups and Flow:
A Drop Shipment is a process where items /deliverables are directly sourced and shipped to customers by Suppliers.


Drop Shipment - Setup
1. Item Attribute set ups:  
Purchased : Enabled
Purchasable : Enabled
Transactable : Enabled
Stockable : Optional
Reservable : Optional
Inventory Item : Optional
Customer Ordered : Enabled
Customer Order Enabled : Enabled
Internal Ordered : Disabled
OE Transactable : Enabled
Shippable : Optional
SO Source type  : External.


2.  Set up of Order Management Transaction Types to order and line workflows that support drop shipments.
3. Oracle Workflow Background Engine is running.
4. Define Drop ship locations used to perform drop shipments have the Ship To Site and Receiving Site.
5. Define the Internal Ship To Locations for your drop shipment customers (Oracle Receivables Standard Customer window, Business Purpose Details Tab).
6. Items have an associated List Price defined within your PO Inventory organization (Oracle Payables Financial Options window, Supplier-Purchasing Tab).
7. Items to be sourced in order management should have a price list assigned.


Drop Shipment - Process Steps

1. Create a Quote with the customer and order type as quote , item and in shipping tab source type as External.
2. Submit the Quote > Submit Draft > Quote status changes to ‘Pending Customer Acceptance’
3. Go to Order Returns > Order Organizer find the quote and Click (T) Order Information > (ST) Main > Actions button > Customer Acceptance
4. Enter the acceptance customer details and  Click (B) Customer Accepted.
5. The status of the Quote Changes to ‘Entered’. The Quote has been converted to a Sale Order which is same as Quote number
6. Book and Schedule the Sales Order - Status changes from Booked
7. Click on ‘Progress Order’. Select ‘Purchase Release Eligible’, 
8. Run Requisition Import Process - Purchase Release process - Orders, Returns > Purchase Release
9. Run Requisition Import Process - Orders, Returns > Requisition Import
10. Now the line status will be in Awaiting Receipt
11. Login to the Receiving Organization (Purchasing) who has been setup as an Approver
12. Create a Purchase Order from the Requisition through Auto Create
13. Approve the PO
14. Receive the full quantity
15. Run Auto Invoice
16. Verify Invoice in Sales Order

Approval Hierarchy in R12 Purchasing

Oracle Purchasing offers three methods to route documents for approval.


1. Position Approval hierarchy 
2. Employee/Supervisor approval hierarchy
3. AME – Approval Management Engine (for requisitions only)


1. Position Based Approval hierarchy
Position Hierarchies are based on JOB/POSITION relationship attached to an employee.
Please refer the logic below:

Set up for Position Based approval Hierarchy
Define Job
Define Position
Position Hierarchies
Define employees
Approval Groups
Approval Assignments
Run request (Fill employee hierarchy)


2. Employee/Supervisor approval hierarchy
Employee/Supervisor approval hierarchy is defined by the employee /supervisor relationship.
The supervisor of an employee is defined as the superior approval relationship for the Employee form.If the purchase order entered by the employee exceeds the approval limits, the purchase order is forwarded onto the employees’ supervisor, as defined on the Employee form.


Required set up :
DefineJobs
Define Approval Groups


3. AME – Approval Management Engine (for requisitions only)
Release 12.0 of Oracle Purchasing further expands and enhances integration with theOracle Approvals Management product for approval routing of purchase requisitions.
This integration gives enterprises even more flexibility to configure their businessapproval processes. Key enhancements include:

• Position Hierarchy based Approvals
• Position based hierarchies allow organizations the flexibility to create reporting structures that remain stable regardless of personnel changes. 
•  Enterprises already using position hierarchies via Oracle Approval Management can immediately leverage those hierarchies for the requisition approvals process.
• Parallel Approvals
•  The Parallel Approvals functionality gives enterprises the option to speed up theapprovals process by routing a requisition to multiple approvers simultaneously.
• Support for FYI Notifications
• Certain individuals or business roles need to be kept informed of purchases and decisions, but do not necessarily need to take action against that notification. 
• Release12.0 provides new functionality to allow certain individuals or roles to review thepurchases, but do not require any response from the recipient.

DETERMINATION OF APPROVAL ROUTING METHOD
There are two forms that determine the route that an approval will take: 

1. Financial Options (PO -> Setup -> Options -> Financial -> Human Resources) 
2. Document Types (PO -> Setup ->Purchasing Options -> Document Types)