Bp-080 Future Process Model-purchasing v1

AIM

BP.080 FUTURE PROCESS MODEL Purchasing

Author:

Ms. Yasha Asthana

Last Updated:

24 December, 2009

Document Ref:

/R12/BP.80/PO

Version:

1.0

Approvals: Approver 1 Approver 2

BP.080 Future Process Model

Doc Ref: /R12/BP.80/PO

Document Control Change Record 4

Date 24-Dec-09

Author Yasha Asthana

Version Draft

1.0

Change Reference Initial Baseline

Reviewers

Name

Position

Shashank Muley Gaurav Mathur

Senior Consultant Project Manager

Distribution

Copy No.

Name

Location

1 2 3 4

Note To Holders: If you receive an electronic copy of this document and print it out, please write your name on the equivalent of the cover page, for document control purposes. If you receive a hard copy of this document, please write your name on the front cover, for document control purposes.

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Document Control

iii

BP.080 Future Process Model

Doc Ref: /R12/BP.80/PO

Contents

Document Control 1. 2.

Acronyms and abbreviations 1 Envisioned business processes for Purchasing

Base Transaction 3.1 3.2 3.3 3.4 3.5

ii

3

Process Overview: Create New Supplier 3 Process Map: Create New Supplier 4 Process Overview: Approved Supplier List (ASL) 5 Process Overview: Blanket Purchase Agreement & Release Creation 5 Process Map: Blanket Purchase Agreement & Release Creation 7

Requisition to Purchase Order 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8

17

Process Overview: Receipt of Material against PO 17 Process Map: Receipt of Material with Inspection against PO Process Overview – Apply BOE to Receipt 20 Process Map – Apply BOE to Receipt 21

Purchase Order Maintenance 6.1 6.2 6.3 6.4

8.1 8.2

Appendices

26

28 29

30

Process Overview: View Accounting Accounting Entry Overview 31

30

33

Appendix A – Approval Hierarchy

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26 27

28

Process Overview: Claiming VAT Process Map: Claiming VAT

Accounting Entries 9.1 9.2

24

Process Overview: Return of Rejected Material to Supplier Process Overview: Return of Rejected Material to supplier

Value Added Tax

19

22

Process Overview: PO Amendment 22 Process Map: PO Amendment 23 Process Overview: Purchase Order Cancellation Process Map: Purchase Order Cancellation 25

Return to Supplier 7.1 7.2

8

Process Overview – Requisition to PO (Unplanned Items) 8 Process Map: Requisition to PO (Unplanned Items) 10 Process Overview: Auto Requisition to PO (Min-Max Planned Items) 11 Process Map: Auto Requisition to PO (Min-Max Planned Items) 12 Process Overview: Auto Requisition to PO (MRP Planned Items) 13 Process Map: Auto Requisition to PO (MRP Planned Items) 14 Process Overview: Direct Purchase Order 15 Process Map: Direct Purchase Order 16

Receiving Process 5.1 5.2 5.3 5.4

2

33

Document Control

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BP.080 Future Process Model

Doc Ref: /R12/BP.80/PO

Open and Closed Issues for this Deliverable Open Issues Closed Issues

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1. Acronyms and abbreviations AP

Accounts Payable

AMC

Annual Maintenance Contract

BOP

Bought Out Products

DFF

Descriptive Flex Field

ERP FG LP MRP BPA PO RM RFQ UOM VAT MOL ASL

Enterprise Resource Planning Finished Goods List Price Material Requirement Planning Blanket Purchase Agreement Purchase order Raw Material Request for Quotation Unit of Measurement Value Added Tax Minimum Order Level Approved Supplier List

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2. Envisioned business processes for Purchasing About this Document This envisioned end-state document elaborates the final processes of the Purchasing functionalities of Group. The document describes each process/scenario that has been discussed and would be followed at Group after the ERP is implemented. These processes (together with process flow, information flow, document flow, responsibilities for carrying out each of the processes) are termed as “End-State”, and will be deemed as the basic input for configuration of the ERP package. Thus it is appropriate to state that the processes as documented in the subsequent sections should be carefully reviewed by Group and finalized so that there are no significant changes to the processes subsequently. Scope of activities carried out include            

Oracle Purchasing Oracle Inventory Oracle Order Management Receivables Management Accounts Payables General Ledger Oracle MRP Oracle Bill of Materials Oracle Work in Progress Oracle Costing Oracle Quality Oracle Enterprise Asset Management

The following process maps depict the various purchasing related activities and their sequence when mapped in Oracle Applications.

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Base Transaction 3.1 Process Overview: Create New Supplier ID

Description

3.1.1

New supplier can be created centrally through the system by the purchase department. Supplier can be classified into various categories such as Local Supplier, Manufacturer, Distributor, Export supplier etc. Set up suppliers to record information about individuals and companies you purchase goods and services from. Employees should also be created as a supplier as we need to pay them for their services. A Supplier can have multiple location & addresses. Define the header information for the supplier such as supplier name, supplier classification, payment terms, prepayment account, Liability account and other details. After defining the supplier header, you need to create supplier site along with the address details. Multiple sites can be defined for a single supplier. For example, for a single supplier, you can buy from several different sites and send payments to several different sites. The information such as payment terms, freight terms and other information are defaulted from the supplier header level but option is available to update the information at the supplier site. The contact person details such as Contact name, phone number, fax number, email ID etc can also be entered for the supplier sites. The information defined at the supplier site level is automatically defaulted wherever required. Assign the supplier site to the relevant organization Supplier Additional Information for India Localization is mandatory to be defined for all the supplier sites. Here, you would record the Tax Registration information such as VAT number, CST number, PAN number, Excise number, Excise range, Excise Division etc. Supplier TDS related details are also defined for individual supplier to specify the TDS section applicable and the TDS rates. The information defined here is used in various reports related to India localization. If the supplier site is a sales tax registered site located within the state, he should give only his LST Number. Likewise if the supplier is a sales tax registered site located out side the state LST field should be null and only his CST details should be recorded. After you define suppliers, you can use them when you enter invoices and create purchasing documents

3.1.2

3.1.3 3.1.4

3.1.5

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3.2 Process Map: Create New Supplier

Start

Navigate to supplier menu to create new supplier. Define Supplier Header Information

Define Supplier site location, contact information and other relevant information

Assign Supplier site to organizations as per the requirement

Define additional India localization information for all the supplier sites

Stop

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3.3 Process Overview: Approved Supplier List (ASL) ID

Description

3.3.1

Approved supplier List is a list of items and commodities that have approved sources from a list of suppliers. While setting up Approved Supplier Lists you can specify the manufacturer of the product, the distributor of the product or a company that both sells and distributes. Select the Type of item & the item code at the ASL header For ASL Lines specify the Business type, Supplier name, supplier site code, Supplier status. You can define multiple approved suppliers for a single item. Optionally you can associate your supplier item code with your internal item code. Define additional attributes for a item supplier combination. You can associate the blanket purchase agreement number that exists for the supplier-item combination and the associated line number for that item. This information will be used to autocreate blanket releases for the supplier when MRP is run. Sourcing rules and bill of distributions can also be defined for a supplier-item combination. These rules can be utilized to auto-create purchase order from the MRP run.

3.3.2 3.3.3 3.3.4

3.3.5

Notes

3.4 Process Overview: Blanket Purchase Agreement & Release Creation ID

Description

3.4.1

Blanket Purchase Agreements are generally used to create open price agreements with the supplier. Blanket agreement can be created by specifying the Item code, item rate, payment terms, freight terms, effective dates and other terms. Item quantity is not specified on the Blanket purchase agreements. On saving, a system generated number is assigned automatically to the Blanket purchase Agreement. India Localization taxes are attached to the BPA by selection the tax category relevant for that supplier. Blanket Purchase Agreement is then forwarded to the approver based on the Approval hierarchy designed in the system. A notification is forwarded to the approver which contains all the relevant details related to the Purchase order. Once the BPA is forwarded for approval, it cannot be modified and the purchase order status is changed to “in Process”. Approver opens the Notification summary Form to view all the pending notifications received from various sources. Approver has the option to open the notification and verify the details available on the notification. Option is available to the approver to Approve/Reject/Forward/Request more Information against a single notification. On approval the Purchase order status is changed to “Approve”

3.4.2 3.4.3

3.4.4

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Description

3.4.5

Once the blanket purchase agreement is approved, Blanket Releases can be created as and when required. While creating the Blanket release, you can specify the quantity required, need-by date and other details but you cannot change the Price and item details at the blanket release. For any amendments other than quantity, need-by date, you have to amend the blanket Purchase Agreement and get it approved based on the approval hierarchy. Multiple blanket releases can be created against a single blanket purchase agreement. The India Localization tax details are defaulted automatically on the Blanket release from the tax category attached at the BPA. The Blanket release is send for approval based on the Approval Hierarchy or you can decide to have No Approval flow for Blanket Release. Once the blanket release is approved, it can be received. System provides detail of amount released, Amount Invoiced at the BPA as well as the Blanket release level.

3.4.6 3.4.7 3.4.8

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3.5 Process Map: Blanket Purchase Agreement & Release Creation Blanket Purchase Agreement

Start

Create Blanket purchase Agreement for the Supplier

India Localization taxes are attached to the BPA by selecting the relevant tax category

Approval Notification is forwarded to the approval based on the approval hierarchy

Approver opens the Notifications to review the PO details and approve/Reject/Forward

Blanket Release

Receiving Process

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Blanket Release is approved based on the approval hierarchy

India Localization taxes are automatically defaulted from the BPA

On Approval, Blanket release can be created by specifying the quantity and need-by date

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Requisition to Purchase Order 4.1

Process Overview – Requisition to PO (Unplanned Items)

ID

Description

4.1.1

Department will raise a Purchase requisition for the item along with the quantity and need-by date. Additional details can also be captured in the respective fields provided. Purchase Requisition will be assigned a unique number. Purchase Requisition will be saved and send for approval. The status of the Purchase requisition is changed to “In Process” Once the Purchase requisition is saved and forwarded, a notification is send to the approver based on the approval hierarchy designed. The notification contains all the item-wise details for the Purchase requisition. Approver opens the Notification screen and clicks on the approve button. Approver has options to approve, reject & forward the requisition as per the requirement. On approval the Notification disappears from the notification screen and the Purchase Requisition status is automatically changed to “Approved”. Once the Purchase Requisition is approved, Purchase department has the option to create a Request for Quotation (RFQ) for the requested items and send it across to a list of suppliers. Option is available to make various list of suppliers to save time & effort. You can also specify the last effective date for your RFQ. Purchase department has the option to create the RFQ directly without referring the Purchase requisition. RFQ is printed and can be send across to the suppliers through courier or mail. Quotations are received from various suppliers. On receiving the quotations, purchase department has the option to auto-create the Quotation by referring the RFQ number. The quantity, price, payment term, shipment method, taxes applicable and other terms can be entered in the Quotation form. Same process is repeated to enter the quotation received from multiple suppliers. After entering the quotations, the next step is to perform a Quote Analysis and select the best quote. This process is done through the Form “Quote Analysis”, whereby the system will show all the quotations in a Comparative format.

4.1.2

4.1.3

4.1.4

4.1.5 4.1.6

4.1.7

ID

Description

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Notes

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4.1.8

4.1.9

After Quote Comparison, the best quote is approved and the Purchase order is awarded to the Supplier. Provision is available to auto-create purchase order from the approved quotes. Approved quote can also be converted to a Blanket Purchase agreement. If the Localization tax details are specified on the approved quote, then the details can be automatically copied to the purchase orders. Option is available to attach/modify the taxes on the purchase order. Tax categories can also be structured to save time & effort. The Purchase order is approved and ready to be received.

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4.2

Process Map: Requisition to PO (Unplanned Items)

Start

Receiving Process

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Purchase Requisition is created online through the system and forwarded for approval

India Localization taxes and other details can be added to the Purchase order and approved

Purchase Requisition is approved based on Approval Hierarchy

Purchase order is auto-created from the Approved Quote

RFQ is created by referring the approved purchase requisition

Quote Analysis is done and the best quote is approved

Created RFQ is send to a list of suppliers

Quotation is created by referring the RFQ number. The relevant details are entered for all the quotations

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4.3

Process Overview: Auto Requisition to PO (Min-Max Planned Items)

ID

Description

4.3.1

For Min-Max Planning, first step is to define the item as “Min-Max Planned” in the Item Master and define the Minimum and maximum levels at the item level. Min-Max Planning report is run, which shows the item code, Item description, Minimum Level, Maximum level, on-hand quantity and the suggested Re-stock quantity for items falling below the Minimum Level. The output of this report can be analyzed by the concerned person to validate the shortages suggested by the MinMax planning Report. There are other report parameters which can be used to fine tune the shortages such as Net WIP, Include Open PO’s, Net Reservation etc. This Report can be run on daily/weekly/monthly basis based on the requirements. After validating the output of the Min-Max Planning report, the report is submitted again with the “Restock” parameter as “Y” and the system auto-creates the purchase requisitions for the item shortages. The Purchase Requisitions are created in “Approved” status. The Purchase Requisitions created can be viewed through the “Requisition Summary” Form. Purchase department has the option to create RFQ referring the approved purchase requisition and thereafter follow the process of creating quotequote analysis and finally create purchase order based on the approved quote. Purchase orders can also be auto-created by selecting the requisition lines and specifying the supplier name from the List of values. If we define the approved suppliers for items then system recommends the supplier for that item. Other details such as India Localization taxes, payment Terms, Freight terms, Insurance can be amended at the Purchase order level. Purchase order is send for approval based on the approval hierarchy

4.3.2

4.3.3

4.3.4

4.3.5

4.3.6

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4.4

Process Map: Auto Requisition to PO (Min-Max Planned Items)

Start

Receiving Process

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Item is defined as MinMax Planned in the Item Master and Minimum & Maximum level are defined

Min-Max Planning Report is run to view the item shortages

Report output is validated by the concerned department

Min-Max Planning report is Re-run with “Restock” parameter to generate Purchase Requisitions

Purchase Order is approved based on the approval hierarchy

India Localization taxes and other details can be added to the Purchase and approved

Purchase Order is created automatically by selection requisition lines.

Purchase requisitions auto-created can be viewed through the “Requisition Summary” Form.

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4.5

Process Overview: Auto Requisition to PO (MRP Planned Items)

ID

Description

4.5.1

For MRP Planning, first step is to define the item as “MRP Planned” in the Item Master. MRP planning is run for items which are included in the Bill of material (BOM) of finished goods and sub-assembly items. MRP is run against a demand specified in the MDS. The demand can be automatically derived from the system based on the firm sales order already available or it can be a forecasted demand which can be added manually. On running the MRP, the system will show the recommendations for item requirements based on the factors which are selected at the time of MRP run. Some of the factors which affect the outcome of the MRP are WIP Net, Sub-inventory netting, open Po’s etc. More details about the MRP process are covered in the “ToBe” Document for Manufacturing. Option is available to release the suggested planned orders as Purchase requisitions based on the various selection criteria from the MRP workbench. If approved suppliers, sourcing rules & blanket purchase agreement exists for item, then system will automatically create Blanket release. The blanket release can then be further approved based on the approval hierarchy. Alternatively if Blanket Agreement does not exist, Purchase orders can be autocreated by selecting the pre-approved requisitions lines and specifying the supplier name from the List of Values. India Localization taxes can be attached to the purchase order by selecting the tax category structures defined in the system. Option is also available to default the tax category structure automatically based on the Supplier selected at the time of creating Purchase order.

4.5.2

4.5.3

4.5.4 4.5.5

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4.6

Process Map: Auto Requisition to PO (MRP Planned Items)

Start

Receiving Process

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Item is defined as MRP Planned in the Item Master

MRP is run based on the Demand stipulated in the MDS

On MRP run, Suggested Planned Orders are created

Suggested Planned Orders can be selected based on various criteria to auto – create purchase Requisitions/ Purchase release

Purchase Order is approved based on the approval hierarchy

India Localization taxes and other details can be added to the Purchase and approved

Auto-create Purchase Orders by selecting the approved Requisition lines

Purchase Requisition can be viewed using the “Requisition Summary” Form

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4.7 Process Overview: Direct Purchase Order ID

Description

4.7.1

Option is also available to create standard purchase order directly without referring the Purchase Requisition. In this case, the user has to specify the item, quantity, need-by date, payment terms and other terms in the purchase order directly. Their is no restriction on the number of item in a single purchase Order. On saving a system generated number is assigned to the Purchase order. After entering the purchase order, the India Localization taxes are applied by selecting the specific tax category from the list of tax category structures already defined in the system. System also provided the option to default the tax category automatically based on the supplier selected on the Purchase order. After finalizing the Purchase Order, the purchase department clicks on the “Approve” button. A notification is forwarded to the approver based on the approval hierarchy designed in the system. The Notification contains all the relevant details of the purchase order item-wise along with the quantity and purchase price. The purchase order status is changed to “In-Process”. Approver opens the Notification summary Form to view all the pending notifications received from various sources. Approver has the option to open the notification to verify the details available on the notification and perform the action stated Approve/Reject/Forward/Request more Information. On approval the Purchase order status is changed to “Approve”

4.7.2

4.7.3

4.7.4

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4.8 Process Map: Direct Purchase Order

Start

Create Standard Purchase order by specifying the relevant details

India Localization taxes are attached to the Purchase order by selecting the Tax category structure

Approval Notification is forwarded to the approval based on the approval hierarchy

Receiving Process

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Approver opens the Notifications to review the PO details and approve/Reject/Forward

On Approval, the Purchase order status is changed to “Approved” and is ready to be received

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Receiving Process 5.1

Process Overview: Receipt of Material against PO

ID

Description

5.1.1

Receiving Process starts by creating the MRN when the goods are received at the factory gate. Purchase order is a prerequisite for creating a MRN and the status of the Purchase order should be “Approve”. While entering the receipt the person has to enter the Purchase order number against which the receiving has to be done. Various search options are available to filter the required purchase order such as supplier name, PO number, Item code, need-by date etc. On entering the search option, system will show the relevant line items based on the search criteria. The receipt header level details such as Supplier Invoice number, Invoice date and other details can be entered based on the requirement. Additional fields can also be added at the receipt header to capture additional details if required. System will automatically show all the line items along with the open quantity. Option is available to select the line and change the quantity based on the quantity specified on the supplier Invoice. On saving, a system generated number is assigned to the Receipt. Multiple receipts can be made against a single purchase order. The purchase lines displays the actual pending quantity while entering the next receipt. Once the Receipt number is generated, the localization screen is opened automatically which displays the taxes already attached at the purchase order level. Option is available to modify/add the taxes while entering the receipt. You can also add insurance, freight or other misc. charges as taxes, based on percentage of the line value or on amount basis. RG Registers are automatically updated once the localization screen is closed after saving the receipt data. Next step is perform Quality inspection based on the quality collection plan defined in the system. Quality person has to enter the Receipt number to see the item received. Various filtering options are available to display the required lines based on the search criteria. The Quality person selects the line item and enter the relevant results as per the quality collection plan. Quality person has the option to Accept/Reject the item quantity and enter the rejection reasons for same. This process is repeated for all the line items. After inspection the line status is changed to “Accepted”. After the Inspection is done, the stores person performs a physical verification of the inspected items. Option is available to stores for making adjustments for any short and excess quantity found during physical verification.

5.1.2

5.1.3

5.1.4

5.1.5

5.1.6

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Description

5.1.7

After physically verifying the item quantity, stores person will deliver the item quantities to the inventory by selecting the sub-inventory location, stock locators. At the time of delivery a system generated Lot Number is assigned to the received item quantity and then delivered. The delivery location and stock locators can be defaulted automatically through the system if the information is defined for individual items in the Item Defaults setup. On delivery, the stock is updated and can be seen through on-hand availability screen. You can also deliver the rejected materials to the rejection store or keep the rejected stock in the receiving sub-inventory as long as it is not sent back to the supplier. If the Purchase order line is fully received, the PO line status is automatically updated to “Closed for Receiving” After the receipt has been created, payment to the supplier will be done from Account Payables module against the receipt no. generated (Refer to the To Be Process for AP Module)

5.1.8

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5.2

Process Map: Receipt of Material with Inspection against PO

Start

Enter the Search criteria (PO number, Supplier, Item) to locate the relevant lines to be received

Payment Process

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Enter the Receipt Header details such as Supplier Invoice Number, Invoice Date and other misc. details

After Deliver, the stock is updated and can be seen through the On-hand availability workbench

Select the line items and modify the quantity based on the supplier invoice.

Stores will deliver the inspected material to various sub-inventory locations

India Localization taxes defaults from PO which can be Modified based on the taxes applied on the Supplier Invoice

Quality inspection is performed by the quality department and results can be entered for individual lines.

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5.3

Process Overview – Apply BOE to Receipt

ID

Description

5.3.1

For Imported Purchase, the first step is to enter the Bill of Entry into the system through the Purchasing Module. On saving, the system automatically creates a BOE Invoice for the Customs Authority. The customs duty is paid in advance to the Customs Authority through a BOE Invoice created in AP Module. In all receipts where tax of type customs duty or additional Customs duty is defined in the tax lines, the system will not allow to create Receipt without applying Bill of Entry (BOE). BOE button will be enabled only when the receipts tax lines have tax type like Customs Duty, Additional Customs Duty At the time of receipt, Items need to be matched with the payment of customs duty paid on the item. This is done by matching the BOE invoice with the receipt. Matching is done on item to item basis. Each item where Customs type of taxes is attached, choose 'Apply BOE' to indicate against which Bill Of Entry the duty amount was paid. All BOE expenses shall be tracked through separate account defined at Org level. Accumulated expenses (PTD/ YTD) against an account code can be queried in Oracle General Ledger

5.3.2

5.3.3

5.3.4

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5.4

Process Map – Apply BOE to Receipt

Start

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Enter Bill of Entry details into the system. BOE Invoice is automatically created in AP

Payment is made to the Customs Authorities against the BOE Invoice

While Entering the Receipts the BOE is applied at Line level

Inspection & Deliver

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Purchase Order Maintenance 6.1

Process Overview: PO Amendment

ID

Description

6.1.1

Once the desired purchase order has been approved, you still can make necessary changes to the document by opening the relevant purchase order to be amended through the purchase order screen. Purchase order can be amended to adjust quantities, Price, shipping addresses, need-by dates, distributions, etc. You can also amend a purchase order to add/delete the items. On saving the changes, the Purchase order is forwarded for re-approval based on the approval hierarchy. The status of the purchase order is changed to “Requires ReApproval” and a revision number is assigned to the purchase order. The revision number is incremented every time the purchase order is changed. All revisions begin at 0 and Oracle Purchasing increments this revision number by 1. A Notification is send for approval based on the approval hierarchy. Approver opens the “Notification Summary” form to approve/reject/forward the purchase order notification. On approval the status of the purchase order is changed to “Approved”. After the Purchase is approved, it is ready to be received.

6.1.2

6.1.3 6.1.4

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6.2

Process Map: PO Amendment

Start

Query the Purchase to be amended through the Purchase order Entry screen

Change the PO detail as per the requirements. On saving the PO status is changed to “Requires Re-approval” and revision is created for PO

Receiving Process

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Click the “Approve” button to forward the purchase order for approval based on approval hierarchy

After Approval, the PO status is changed to “Approved”

A notification is forwarded to the approver which displays the PO changes

Approver opens the “Notification summary” form to Approve/Reject /forward the PO after validating the information

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6.3

Process Overview: Purchase Order Cancellation

ID

Description

6.3.1

Provision is available to cancel a purchase order or purchase order line after you have approved it. When you cancel a purchase order or purchase order line, you pay only for those goods you received before cancellation. Purchase orders that are inprocess (pending for approval) cannot be cancelled. When you cancel a Purchase order, the requisition lines associated with the purchase order can also be cancelled if the Cancel Requisitions check box is selected. If the Cancel Requisitions check box is not selected, the requisition lines are not cancelled and are returned to the pool of available requisitions. On canceling a purchase order or a purchase order line, the cancelled lines will not appear while doing the receiving transaction.

6.3.2

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6.4

Process Map: Purchase Order Cancellation

Start

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Query the Purchase to be cancelled through the Purchase order Entry screen

Navigate to Control Document Window form PO Screen to cancel complete PO or selectively PO lines

On Cancellation of PO, modification cannot be done.

Receiving Process

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Return to Supplier 7.1

Process Overview: Return of Rejected Material to Supplier

ID

Description

7.1.1

During Quality Inspection process, if t h e material is found to be def ective then quality person has the option to reject the partial/full quantity and enter the reason of rejection and additional comments as per the quality collection plan. The line is split into accepted quantity and the rejected quantity. After quality inspection, the rejected material is delivered to the rejection store by the store department. A separate sub-inventory will be defined to stock the rejected material. Next process is to return the rejected material lying in the rejection store to the supplier. Rejection return is done against the MRN number against which the receipt has been done. Enter the Receipt number against which the item quantity needs to be returned. On entering the receipt number the receipt lines against the MRN are displayed. Select the relevant line item, return quantity, supplier name to return the item back to the supplier. On saving the date the stock of the item is automatically adjusted and a debit note is created automatically for the supplier based on the attributes defined at the supplier Master. System generated Excise Invoice number is assigned for rejected material through the “India Return to vendor” Form. The Excise Registers are automatically updated with the return quantity and excise amount. The accounting entries relevant to the return transactions are automatically generated to reflect the correct account balances. Supplier challan is printed through the system. Option is also available to mail the copy of supplier challan to the supplier.

7.1.2 7.1.3

7.1.4

7.1.5 7.1.6 7.1.7

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7.2

Process Overview: Return of Rejected Material to supplier

Start

Quality Inspection is done against the Receipt to record the rejected item quantity and relevant details

Stop

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Rejected items are delivered to the rejection stores

Supplier Challan is printed through the system and the rejection letter which needs to be send to supplier

Query the Receipt number in the “Return to Vendor” Form to view the Receipt Lines

Stock is updated automatically and a Debit note is created for the supplier. Excise registers and accounting entries are updated accordingly

Select the relevant line and specify the quantity to be rejected to supplier

Generate the Excise Invoice Number for the Rejected Material

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Value Added Tax 8.1 Process Overview: Claiming VAT ID

Description

8.1.1

VAT Tax amounts included in the purchase transaction can be recovered on receipt of VAT Invoice from the Supplier. This document can be received either with the receipt of material or at a later stage. If the document is received along with the material then, the user has an option to enter the VAT Invoice details by opening the Claim Details window through the Receipts India Localization window To open the Claim Details window while creating the receipt, click on the Claim VAT button on the Receipt India Localization window If the VAT Invoice details are not entered while creating the receipt, option is available to enter these details by accessing the Claim VAT screen through the menu option. The options available would be the same as those when the form is opened through the Receipts localized screen. However, here the user has an option to query for multiple receipts based on the options in the query-find Screen

8.1.2 8.1.3

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8.2 Process Map: Claiming VAT

Start

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Navigate to the Receipt (Localized) Screen

Choose “Claim VAT” to indicate user want to claim VAT during PO receipt

Enter the Details in Claim VAT screen e.g. VAT invoice number, VAT invoice date

Stop

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Accounting Entries 9.1 Process Overview: View Accounting ID

Description

9.1.1

An option to view the accounting entries for tax accounting generated during the receipt is being provided. Through this option, user can confirm that accounting entries are generated for the receipt properly. User need to navigate to this window through View accounting. Following details are shown in view accounting screen Account Type: The user can look for accounting entries generated for different account types like Receiving , Excise, tax etc. UOM: This field displays the Unit of measurement in which the transaction was recorded Transaction Date: This field displays the date on which accounting transaction is recorded Quantity : This field displays the quantity received against the transaction

9.1.2 9.1.3 9.1.4 9.1.5

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9.2 Accounting Entry Overview On Receipt of Material against PO Account Inventory Receiving A/C

Debit

Credit

With PO Price + Total Tax Amount

AP Accrual A/C

With PO Price + Total Tax Amount

On Claiming Cenvat Credit Account Cenvat A/C

Debit

Credit

With Cenvatable Amount

AP Accrual A/C

With Cenvatable Amount

Delivery of Material against PO Account Material A/C

Debit

Credit

With PO price + All Non Claimable Tax amount

Inventory Receiving A/C

With PO price + All Non Claimable Tax amount

Return to Supplier after Inspection Account

Debit

AP Accrual

Item PO price + total Tax Amount

Credit

Inventory Receiving A/C

Item PO Price + All Non Claimable Tax amount

Cenvat A/C

Total Cenvat Amount

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Appendices Appendix A – Approval Hierarchy

Approval Role / Limit Document Types : Purchase Requisition Standard Purchase order Blanket Purchase order Blanket Release

Director

General Manager

Manager

Associate

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Above 10,000

Below 10,000

Review & Forwarder

Approval Initiator

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Open and Closed Issues for this Deliverable Open Issues

ID

Issue

Resolution

Responsibility

Target Date

Impact Date

Closed Issues

ID

Issue

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Resolution

Responsib Target ility Date

Impact Date

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