P 2 P Cycle
Requisition will be created by employee in the Organization, when there is a requirement.
Requisition contains 3 levels of information. 1. Header 2. Line 3. Distribution
Requisition will be created in two ways : -
1. Internal :- Goods will be moved from One Organization To another Organization.
2. Purchase:- Goods will be procure from supplier
PO Dept :- who is buying goods from supplier on behalf of Organization is called a buyer.
Request for Quotation (RFQ):- will be created by buyer & sent to supplier to obtain Quotations.
RFQ contains 3 levels of information. 1. Header 2. Lines 3. Price Break, RFQ will be created in 3 types.
1. Catalog :- It is used to buy items frequently from the supplier; header, lines, Price Break
2. Standard:- It is used to buy item for one time from the supplier; header, lines, price break
3. Bid :- It is used to buy items which are required special shipment details. Header, lines, shipmme
Request for Quotation will be created in 2 ways 1. Manual 2. Automatic
Supplier:- who is supplying goods or services to the Organization is called a Supplier. It contains 3 levels of information. 1. Header 2. Address 3. Site
Quotations:- will be received from supplier and entered in purchase application by buyers. There are 3 types of Quotations 1. Catalog 2. Standard 3. Bid.
Quotations will be created in 2 ways 1. Manual 2. Automatic
Quotation Analysis:- Received quotations will be analyzed by buyer and select the best one.
Purchase Order:- It is a legal document which will be created by Organization and send to supplier to buy goods or services.
It contains 4 levels of information 1. Header 2. Lines 3. Shipment 4. Distributions.
There are 4 types of Purchase Orders are there.
1. SPO:- It is a one time Purchase Order. It will be created by Organization and send to supplier to buy goods or services .
It will be created when we know the terms & conditions, goods or services, price, quantity, Distribution and delivery schedule.
2. PPO:- It is an agreement between supplier and organization to buy goods or services. It will be create when we know terms & conditions, goods or services, price, quantity and distribution later delivery schedules will be released with reference of PPO to buy goods & services from the supplier.
3. BPA:- It is long agreement between supplier and organization to buy goods or services. It will be created when we know the terms & conditions, goods or services and price. Later blanket will be release with reference of BPA to buy goods & services from the supplier.
4. CPA:- It is an agreement between supplier and organization to buy goods or services. It will be created when we know the terms & conditions only. Later standard purchase order will be created with reference of CPA to buy goods & services from the supplier.
Purchase Order will be created in 2 ways : 1. Manual 2. Automatic
Receiving:- Receiving will be done at Inventory Level. There are 3 types.
1. Direct Delivery:- Goods directly will be delivered to Inventory Organization
2. Standard Receipt:- Goods will be received one place and moved to the Inventory Organization.
3. Inspection:- Goods will be received one place, Inspection team will inspect the goods after it will be moved to Inventory Organization.
Returns:- If there is any damaged goods are there It will returns to supplier.
Invoices:- Invoice will be received from supplier and entered in Payable Application.
Payment:- will be made to supplier with reference to the Invoice
Reconciliation:- Payment will be reconciled with bank statement lines.
P2P Cycle Journal Entries:
When received goods :-
Receiving Inventory A/c Dr -------------------Receiving Option
AP Accrual A/c Cr -------------------Supplier Site
When good moved to Inventory:-
Material Inventory A/c Dr ------------------- Master Item
Receiving Inventory A/c Cr --------------------Receiving Option
When enter Invoice:-
AP Accrual A/c Dr ------------------------------Supplier Site
Liability A/c Cr ----------------------------------Supplier Site
When Making Payments:-
Liability A/c Dr ----------------------------------Supplier Site
Cash Clearing A/c Cr ----------------------------Bank
When Reconciliation:-
Cash Clearing A/c Dr ---------------------------Bank
Cash A/c Cr --------------------------------Bank
0 comments:
Post a Comment