The Procure to Pay Process - P2P

Based on organizational practice and the requirement in question, procurement leaders choose to complete the most relevant stages of a procure-to-pay process. Here are nine logical steps of an ideal procure-to-pay process.

Logical steps of an ideal procure-to-pay process. 

This post explains the Procure-To-Pay process in layman’s terms.

Lets take the following scenario – A person wants to buy a car.

The tasks associated with this can be listed out as below :

1. Identify the car
2. Identify the vendor
3. Check for discounts available
4. Place the order
5. Receive the car
6. Make payment

The above are the major tasks that the person would have to do for getting the product at his place of choice. So, for understanding’s perspective, tasks 1 through 5 are grouped under Procurement or Purchasing while task 6 is a part of Payment or Payables.

Extending the understanding to an organizations’s perspective, we have the following :

Requester - The person who raises the request for an item. This could be anyone within the organization, authorized to raise purchasing requests.

Buyer – Generally a person from the Purchasing department. This person is tasked with collating all the items requested by various Requestors and placing purchasing orders to the vendors.

Vendor / Supplier – The person or an organization tasked with supplying the requested item.

Receiver – A person who receives the requested item.

Invoice – A document provided by the vendor to the buying organization having details of the item like item description, quantity, amount, tax and total amount payable.

So, going back to our earlier scenario :

Requestor is the person looking to buy a car. Buyer is the person who will identify the vendor, check for discounts and place the order. Vendor (or supplier or dealer in this example) will ship the car that will be received by the Receiver. Vendor will also send an invoice that will be paid by the buying organization.

This is how a typical Procure-To-Pay process works in an organization. Of course, in reality it is not so simple and has other functionalities / processes within each of the major tasks that we just saw.

A more detailed examination of this P2P process will be discussed in my subsequent posts. That will focus more on PeopleSoft terminologies and processes.

PeopleSoft Procure to Pay links Purchasing and Payables modules to provide control and visibility over the entire life-cycle of a transaction – right from the way an item is ordered to the way that the final invoice is processed.

If you are starting out as a Procure to Pay consultant, this list of tables will be a quick reference for you. The main application tables used in the Procure to Pay cycle are listed here.

Master data tables

Module	Table Name	Description
AP	VENDOR	Vendor Header
PO, IN	ITEM	Items
GL	GL_ACCOUNT_TBL	Accounts
GL	DEPT_TBL	Departments
GL	PRODUCT_TBL	Products
GL	PROJECT_FS	Projects
GL	OPER_UNIT_TBL	Operating Units
PO	MASTER_ITEM_TBL	Item Master Header
PO, IN	INV_ITEMS	Inventory Item master
IN	STOR_LOC_INV	Storage Location Definition



Transaction tables

Module	Table Name	Description
AP	VOUCHER	AP Voucher Header
AP	DISTRIB_LINE	Voucher Distribution Lines
AP	PAYMENT_TBL	AP Disbursements
AP	PYMNT_ADVICE	AP payment Advice Information
AP	VENDOR	Vendor Header
AP	BUS_UNIT_TBL_AP	AP Business Unit table
AM	ASSET	Asset general Information
AM	ASSET_ACQ_DET	Asset Acquisition Detail
AM	DEPRECIATION	Depreciation transactions
AM	COST	Asset Cost Transactions
PO	REQ_HDR	Requisition header
PO	REQ_LN	Requisition line
PO	PO_HDR	Purchase order header
PO	PO_LINE	Purchase order line
AR	ITEM	Customer Items
GL	JRNL_HEADER	Journal Headers
GL	JRNL_LN	Journal Line Data
IN	CM_ONHAND_VW	On hand quantity
IN	CM_INTRANSIT	Inventory in transit
IN	TRANSACTION_INV	Inventory Transactions
IN	IN_DEMAND	Order Request
IN	PHYSICAL_INV	Physical Inventory



Accounting tables

Module	Table Name	Description
AP	VCHR_ACCTG_LINE	AP Accounting entries
AM	DIST_LN	AM Accounting entries
GL	LEDGER	Ledger Data
AR	ITEM_DST	AR Accounting entries
PO	PO_LINE_DISTRIB	POline accounting entries
IN	CM_ACCTG_LINE	INV Accounting Distribution