Purchasing

PURCHASING USER MANUAL

CONTENTS

Define Users, Responsibilities and assign Responsibilities to the User Login to New Users
Multi-Org
Purchasing Setups: -

Inventory Organization Parameters Financial Options

Receiving Options Purchasing Options

Jobs, Positions, Hierarchies and Reports
Define Buyers and Assign Buyers to the Users
Define Suppliers
Define Items
Define Document Types
Define Approval Groups

Assign Approval Groups to the Positions
Requisitions
Purchase Orders
Releases
Auto Create
Receipts
Returns
On-hand Quantity
Cancellation

Define Username

Define Username and Password for New users in System Administrator Responsibility Nav:- Security →User →Define.

Define Own Purchasing Responsibility.

Nav:-Security → Responsibility→ Define

Assign Purchasing Responsibility to the User.

Nav: Security →User→ Define

Define Own General Ledger Responsibility.

Nav:-Security → Responsibility →Define

Define Own Inventory Responsibility.

Nav:-Security → Responsibility →Define

Assign GL, Inventory Responsibilities to the User.

Nav: Security →User→ Define

Logout from the existing User. Reopen the Oracle Application enter new username and Password.

Select any of those Responsibilities for open the form

Multi-Org

The Multi Org is meant to allow multiple Companies or Subsidiaries to store their records within a single database. The multiple Organization architecture allows this by partitioning data through views in the APPS schema. Multi org also allows you to maintain Multiple sets of books. Implementation of multi org generally includes defining more than one Business Group.

Define Set of book in GL Module.

Defining Set of book 3C’s are required.

Chart of Accounts
Calendars.
Currency.

Chart of Accounts: It holds Client Accounting Structure.

Nav: Setup→Financials→Flexfield→Key→Segements.

Give Your Accounting Structure Name and Click on Segments.

Enter Segments Like:

Company. Department. Accounts.

And Assign Flexi field Qualifiers for each Segments Balancing Segment, Cost Center and Natural Account Segment respectively.

And Map Value sets for respective segments.

Save and Compile the Accounting structure.

2. Calendars:

Define Types of Calendars.

Nav:Set Up—Financial—Calendar—Type

Creation of Accounting Calendar.

Create Accounting Calendar according to client Financial Reporting.

Nav:Setup—Financial—Calendar--Accounting

Currency: Assign Functional Currency.

Set Of Books

Creation Of Set Of Books:

Nav:- Setup →Financials →Books →Define

Define Profile Option: Assign Set of Books to GL Responsibility by giving profile option GL%SET%BOOK%

Nav: Sys Admin→Profile→System:

Open GL Accounting Periods:

Nav:GL→Set up→Open/Close.

Give a First Period Name.

Define Location.

Nav: Setup →Organizations → Organizations

Assign System Profile option- HR User Type to the Purchasing Responsibility in System Administrator. So Switch Responsibility to the System Administrator. Nav: - Profile →System

Then Switch responsibility to Purchasing.

Define Locations for Organizations.

Nav: - Setup →Organizations→ Locations.

Define Legal Entity.

Nav:-Setup →Organization → Organization

Select New Push Button.

Select Classification as GRE/Legal Entity.

Save and Click on to Others Push Button

Select Legal Entity Accounting from LOV.

And Assign Set Of Books to Legal Entity.

Define Operating Unit using the same form.

Select Classification as Operating Unit.

Save and Click on to Others Push Button

Select Operation Unit Information from LOV.

Assign Legal Entity and SOB to Operating Unit.

Define Inventory Organization using the same Navigation.

Define 3 rules Accounting Information, Inventory Information and Receiving Information.

Select Accounting Information from LOV and assign Legal Entity and SOB.

Select Inventory Organization.

Defining Inventory Rules according to the Organization.

Select Receiving Information:

Assign SOB, Operating Unit, and Inventory Org. to the system Profile Options of GL Set Of Books Name, MO: Operating Unit to the system administrator responsibility. Nav:-Profile →System

Run Replicate Seed Data Program in System Admin Responsibility.

Nav:- Request →Run

Click on to Submit button

See the Request Id’s in the form of view from Menu bar Request→ find.

Switch Responsibility to Purchasing.

Choose Set of book

Nav:- Setup →Organizations →Set of books →Choose

Open Purchasing Control Periods:

Nav: Purcashing Setup→Financials→Accounting→Control Purchasing Periods

Define Financial Options:-

Nav:- Setup →Organization →Financial Options, Accounting tab

Supplier-Entry Tab:

Supplier-Payable Tab:-

Supplier-Purchasing Tab:-

HumanResourcesTab:-

Define Purchasing Options:

Nav:- Setup→ Organizations→ Purchasing Options, Accounting Tab:

Control Tab:

Default Tab:

Numbering Tab:

Tax Default Tab:-

Save and Close.

Requisition

Requisition is a request placed to purchase Department to buy Goods or Services.

There are 2 types of Requisitions:

Internal Requisition Purchase Requisition.

The above representation shows the normal process for requisition, but if the employer needs the requisition to be directed through an approval hierarchy then jobs, positions, approval groups, approval limits had to be defined beforehand.

Define Jobs and Positions and Position Hierarchies, Employee in Human Resources Responsibility.

Switch Responsibility to HRMS Module.

Define Jobs:-

Nav:- Work structures → Job→ Description

Consider three jobs like clerk, supervisor, manager

Click on to New

Press OK. And Save creates two more jobs by using the same window.

Save and create one more Job.

Save and close the window.

Define Positions:-

Nav: - Work structures → Position → Description.

Consider three positions like low level, middle level &high level

Press New Button

Click on to Hiring Information Tab;

Save and create two more Positions using the same window.

Save and close the Positions Window.

Create Employees:-

Nav:- People →Enter and Maintain.

Click on to New Button

Click on to Assignment now assign Jobs and Positions to that Employee.

Define two more Employees using the same window.

Click on to Assignment Button repeat the above procedure for remaining employees.

Define Position Hierarchies:

Hierarchies are defined according to their position in the organization i.e from lower echelons to higher echelons.

Nav:- Work structures →Position →Hierarchy

Save and Close the window. Run Position Hierarchy Standard Report in HRMS Responsibility. This is for View Employee Hierarchies.

Once again run Fill Employee Hierarchy Standard Report in Purchasing Responsibility. This is for Import Employees to Purchasing Responsibility.

Run Fill Employee Hierarchy Report in Purchasing Responsibility:

Click on to Submit a New Request Button. O.K.

View →Request→ find.

Complete the request then close the window.

In Purchasing Responsibility:-

Define Employee as a Buyer.

Nav:- Setup → Personnel→ Buyers

Click on to New Buyer. Select From LOV and assign employee names.

Save and Close.

Assign Above Employees to the Users. For this use system Administrator Responsibility. Nav:- Security → User → Define

Query existing User and assign Employee name to the Existing User in Person Tab.

Follow the same procedure for remaining Employees.

Save and Close the System Admin Responsibility. Then Switch the responsibility to Purchasing Module.

File → Switch Responsibility

Choose Purchasing Responsibility

Define Suppliers:

Nav:- Supply Base → Suppliers

Supplier Header

Supplier Site

Save and Close.

Define Items in Inventory Responsibility / Purchasing Responsibility.

Nav:- Items → Master Items.

Save and Close.

Define Document Types:-

Setup → Purchasing → Document Types

Navigate to the Document Types window.
Select your Operating Unit and click Go

Select a Document Type from the list and click its icon in the Update column. If your document type is one of Purchase Agreement, Purchase Order, Quotation, Release, Request for Quotation, or Requisition you can update the attributes discussed in the following steps.

You can enter user-defined Document Subtypes only for document types Quotation and Request for Quotation. You can delete Quotation and Request for Quotation document types you have created, but only if no actual document exists for the type. Purchasing provides the following document subtypes:

Purchase Agreement - Blanket and Contract

Purchase Order - Planned, Standard, Requester Change Order Quotation - Bid, Catalog, and Standard

Release - Blanket and Scheduled

Request for Quotation - Bid, Catalog, and Standard Requisition - Internal and Purchase

Enter Document Name for the document. The description must be unique for the given document type. The name that is entered appears as a list of values in the Type field of appropriate document entry window. For example, the Name Bid Quotation appears, along with the Quotation Class Bid, as a list of values choice in the Quotation Type field in the Quotations window.

The Quotation Class is applicable only for document types Quotation and Request for Quotation. Choose one of the following options:

• Bid - The quotation or RFQ is for a specific fixed quantity, location, and date.

• Catalog - The quotation or RFQ includes price breaks at different quantity levels.

Check Owner can approve to indicates that document preparer can approve their own documents. This field is not applicable when the Document Type is Quotation or RFQ. Important: If you are using budgetary control and enable this option, you should also enable the Reserve at Requisition Completion option in the Financials Options window. Likewise, if you disable this option, you should also disable the Reserve at Requisition Completion option.

Check Approver Can Modify to indicate that document approvers can modify documents. This field is not applicable when the Document Type is Quotation or RFQ.

Check Can Change Forward-To to indicate that users can change the person the document is forwarded to. This field is not applicable when the Document Type is Quotation or RFQ.

Check Can Change Approval Hierarchy to indicate that preparer and approver can change the default approval hierarchy in the Approve Documents window. This field is not applicable when the Document Type is Quotation or RFQ.

Check Can Change Forward-From to indicate that preparers can change the name of the document creator. This field is applicable only when the Document Type is Requisition.

Security Level:

Hierarchy - Only the document owner and users above the owner in the defined purchasing security hierarchy may access these documents.

Private - Only the document owner may access these documents.
Public - Any user may access these documents.

Purchasing - Only the document owner and users listed as buyers in the Define Buyers window may access these documents.

Access Level options:

Full - Users can view, modify, cancel, and final close documents.
Modify - Users can only view and modify documents.
View Only - Users can only view documents.

Forward Method:

It is mode of determining approval path:

Direct - The default approver is the first person in the preparer's approval path that has sufficient approval authority.

Hierarchy - The default approver is the next person in the preparer's approval path regardless of whether they have approval authority. (Each person in the approval path must take approval action until the person with sufficient approval authority is reached.)

The Archive When field is applicable only when the Document Type is Purchase Agreement, Purchase Order, or Release. Choose one of the following options:

• Approve - The document is archived upon approval. This option is the default. The Change Order workflow begins only if this option is chosen.

• Communicate - The document is archived upon communication. A document communicate action would be printing, faxing, or e-mail.

The Default Hierarchy field is not applicable when the Document Type is Quotation or RFQ. Otherwise, when Use Approval Hierarchies is enabled in the Financial Options window, you can enter a position hierarchy from the Position Hierarchy window. This hierarchy then becomes the default in the Approve Documents window.

Save and Close the window.

Define Approval Groups:-

Nav:- Setup → Approvals → Approval groups

Approval rules are defined according to the person’s position in the organization like amount limit, low value, and high value

Use the Approval Groups window to define and update approval groups. Once you have defined an approval group here, you can then use it to assign approval functions to jobs or positions in the Approval Assignments window.

Enter the Name of the approval group. You can change existing approval group names, but names must be unique.

Choose One of the following Objects:-

Document Total - (Required) The document total refers to the monetary limit on an individual document. For this option, the Type defaults to Include, and you can enter only the Amount Limit (required) and the Inactive Date (optional).

Account Range - (Required) For this option, you enter the accounting flex fields for the Low and High Values. Include Type rules identify accounts that you want to be included on the document. Exclude Type rules identify accounts that you do not want on the document.

Item Category Range - For this option, you enter the purchasing category flex fields for the Low and High Values. Include Type rules identify manufacturing categories that you want to be included on the document.

Item Range - For this option, you enter the item flex fields for the Low and High Values. Include Type rules identify items that you want to be included on the document. Exclude Type rules identify items that you do not want on the document.

Location - The location refers to the deliver-to location on a requisition as well as the ship-to location on purchase orders and releases. Include Type rules identify locations that you want to be included on the document. Exclude Type rules identify locations that you do not want on the document.

Approval Assignment:

Respective document types and approval groups are attached to the user based on their job and position like low level, middle level, high level.

Nav:- Setup → Approvals → Approval Assignments

Create Requisitions:-

With online requisitions, you can centralize your purchasing department, source your requisitions with the best suppliers, and ensure that you obtain the appropriate management approval before creating purchase orders from requisitions. You can use Master Scheduling/MRP to generate online requisitions automatically based on the planning requirements of your manufacturing organization. You can use Inventory to generate online requisitions based on replenishment requirements. Finally, you can use Purchasing to create Internal requisitions, which are handled as internal sales orders and are sourced from your inventory rather than from outside suppliers like purchase requisitions.

Nav:- Requisitions → Requisitions.

Requisitions are Two types.

Purchase Requisition Internal Requisition.

Purchase Requisition:- Use the Requisitions window to create requisitions. You must choose the requisition type (internal or purchase). You can also provide a description, unlimited notes, and defaults for requisition lines. For each requisition line, you choose the item you want to order along with the quantity and delivery location. You can get sourced pricing from catalog quotations. You can also choose a price from a list of historical purchase order prices. In the Distributions window, you can charge the item to the appropriate accounts, or you can let the Account Generator create the accounts for you. Once you complete the requisition, you send it through the approval process.

Statuses of Requisitions:-

Incomplete- The requisition is incomplete, or the preparer has not yet submitted the requisition to an approver.

Rejected:-The approver rejected the requisition.

Returned:- A buyer rejected the requisition. Purchasing returns to the preparer all requisition lines within the same requisition that are not on a purchase order.

Total:- The currency code and the base currency total amount of all lines in this Requisition.

Click on to Distribution Push Button.

Distribution talks about accounting information.

Save and close the Distribution Window. You will be in the Requisition Header window. Notice the Requisition Number will generate automatically. In that window select Approve Pushbutton.

Enter the Destination Type:-

Expense - The goods are delivered to the requestor at an expense location. The destination subinventory is not applicable.

Inventory - The goods are received into inventory upon delivery.

Shop Floor - The goods are delivered to an outside processing operation defined by Work in Process. Purchasing uses this option for outside processing items.

Click on to O.K., and close the Requisition window. Check the Requisition Status in the Requisition Summary window.

Reviewing Requisitions:- After you create a requisition, you can query the requisition at any time to review the status, action history, or problems with encumbering funds. Use the Requisition Summary windows to review requisitions.

Nav:- Requisitions → Requisition Summary

Select Requisition Number From the LOV and click on to find.

After raising requisition, depending upon the approval limits the request flows through the hierarchy.

If the requisition amount is above the approval limit of the requester then the document travels to his higher authority to do the needed.

To Approve a Document, which require approval. Login as the person who is next in

hierarchy level.

Nav—Notification Summary.

Click on Approve to approve a Document.

Auto Create:-

Purchasing provides automatic creation capabilities for documents. Buyers can quickly create

standard purchase orders, planned purchase orders, blanket releases, RFQs, and Oracle

Sourcing negotiations from any available standard (not internal) purchase requisition lines.

The purchase requisition lines can be for predefined items or one-time items as well as

outside processing items.

Nav:- →Auto create.

By using auto create we create the RFQ, by changing the document type as RFQ and click on automatic.

RFQ window appears and the RFQ type has to be changed to bid RFQ if the final purchase order is intended to be standard or planned PO. Mark the status as active

Attach the prospective suppliers to whom the RFQ had to be sent

Save it and goto tools in the menu bar and select copy document

After agreeing on the supplier quotation, the quote is now on its way to create a PO

Again change the status as active.

Save and approve the quotation.

Menu bar—tools—copy document

Select the intended document type like standard or planned PO.

PO is popped up by clicking OK button.

Purchase Orders: - Purchasing provides the Purchase Orders window that use to enter standard and planned purchase orders as well as blanket and contract purchase agreements.

Types of Purchase Orders:-

Purchasing provides the following purchase order types:

Standard Purchase Order, Planned Purchase Order,

Blanket Purchase Agreement, Contract Purchase Agreement.

Standard Purchase Order: - Create standard purchase orders for one-time purchase of various items. It is created when the details of the goods or services estimated costs, quantities, delivery schedules, and accounting distributions are known.

We provide Inv Org info, Ship-To location, Need by date, Quantity in Shipments window,

Note: One purchase order can have multiple lines,

One line can have multiple shipments

And one shipment can have multiple distribution lines.

Entering Purchase Order Receiving Controls:-

Use the Receiving Controls window to enter receiving control information for purchase orders and releases. Note that controls that are entered here apply to specific purchase orders/releases and override the receiving controls entered in the Receiving Options window.

Receipt Date: It determines the receipt should not go beyond the Early date or after the Late Date. If it falls outside the above acceptance date then the actions tab states what actions to be taken.

Over Receipt Tolerance: It determines the acceptance level of the order Quantity. And the actions to be taken if it exceeds the Tolerance.

Miscellaneous:

Allows Substitute Receipt Acceptance of other item in place of intended item. Substitute items ought to be defined in item relationship window before acceptance.

Receipt Routing: Determines the transit of an item to Sub Inventory. 3 types of receipt routing Namely:

Direct Receipt: Directly delivered to Sub Inventory.

Standard Receipt: Receiving Bay to Sub Inventory

Inspection Required: prior to acceptance quality check has to be performed.

Approve the purchase order in line with approval limits.

Blanket Purchase Agreement:- Create blanket purchase agreements when the detail of the goods or services that are Planned to buy from a specific supplier in a period are known. But do not yet know the detail of delivery schedules. Use blanket purchase agreements to specify negotiated prices for the items before actually purchasing them. Blanket purchase agreements can be created for a single organization or to be shared by Different business units of the organization (global agreements). Nav→Purchase Order

Enter the Price Breaks for discounts.

Create and Approve Blanket Purchase Agreement.

Blanket Releases: - Issue a blanket release against a blanket purchase agreement to place the actual order (as long as the release is within the blanket agreement affectivity dates).

Approve the Blanket Release.

Planned Purchase Orders: - A planned purchase order is a long-term agreement committing to buy items or services from a single source. You must specify tentative delivery schedules and all details for goods or services that you want to buy, including charge account, quantities, and estimated cost. Planned Purchase Order has an associated with Schedule Release.

Create Purchase Order by selecting Type as Planned Purchase Order.

Enter Shipment Lines

And Approve the Purchase Order

Scheduled Releases: - Issue scheduled releases against a planned purchase order to place the actual orders.

Approve the Scheduled Release.

Contract Purchase Agreement: - Create contract purchase agreements with suppliers to agree on specific terms and conditions without indicating the goods and services that will be purchased .Issue standard purchase orders referencing contract Agreement.

Create Contract Purchase Agreement.

And Approve Contract Purchase Agreement.

Contract Purchase Agreement is converted into Standard Purchase Order when there is need for the goods.

The below figure shows the transformed Contract Purchase Agreement.

Receipts

The process of receiving Purchase Order is determined by Receipts. It can be of Direct, Standard Receipt or Inspection.

Note:--Inventory Accounting Periods should be opened before receiving Goods or Services.

Nav:--Accounting Close Cycle Inventory→ Accounting Periods.

Receipts could be created from their respective purchase orders through ‘Find Excepted Receipt Window’

Nav:--Receiving→Receipt

If it is Direct Receipt Receiving can be done in Receipt Window.

Standard Receipt is two stage process. The items are placed at staging area through Receipts Window and delivered to the Sub Inventory through Receiving Transaction Window.

Nav:--Receiving→Receipts