P2P Accounting Entries

August 9, 2017 | Author: Naren Rayar | Category: Inventory, Accrual, Expense, Valuation (Finance), Business Economics
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OracleApps Epicenter » Procure to Pay (P2P) – Accounting Entries » Print

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Procure to Pay (P2P) – Accounting Entries Posted By Sanjit Anand On March 21, 2008 @ 11:23 pm In Oracle Payable | 11 Comments

In response of my last post [1] ,yet another reader asked for "Asset ,Purchasing & Inventory Purchasing and there corresponding accounting entry within P2P cycle. Therefore this post highlights some of key accounting entry in each steps with respect to th As you know "procure to pay" Business Flow start Purchasing requisition till paying to vendors and most important, in all the case the purchase is made for basic element called Items. As you know there are three types of items: Inventory Expense Item Inventory Asset Item Expense item Definition of above Items used in Purchasing can be best understood as:

Asset flag means means it is an asset and the items value will show in your inventory valuation. Inventory Item

Expense Item These are one which is used for consumable items purchase for your organization. More importantly , for creating an expense item you have to perform following setup doing in the Master Item form.Go to same path in oracle inventory Oracle Inventory -> Items -> Master Items When master items form open Go to Inventory Menu you need to tick followings 1. Inventory item 2. Stock able 3. Transactble

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OracleApps Epicenter » Procure to Pay (P2P) – Accounting Entries » Print

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4. Resolvable And you can also setup in Costing and purchasing menu account code as per your requirement. expenseitem Asset Item

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As discussed above , the following attributes need to be enabled for such an item. Inventory item Stock able transact able Costing flag Inventory asset value For entering on purchase orders It should have purchased and purchasable flags enabled and you have to make sure you are assigning this item to the Purchasing org which you have defined at

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Oracle Purchasing > Setup > Organizations > Financial Options > 'Supplier-Purchasing' alternate region 'Inventory Organization' field. The accounting can be best described for such kind of items is;

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Is there any effect on Step 5 in all three cases, that mean do matching have different accounting entry? The answer is no; as per my understanding purpose of setting the PO to a 2way, 3 way or 4 way match is to ensure that the corresponding hold is generated on the invoice. The holds are basically designed for control purposes, they do not have any accounting effects. Additional Reading Accrual Accounting (Periodic Accrual) [1]

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11 Comments To "Procure to Pay (P2P) – Accounting Entries" #1 Comment By Milind Deodhar On April 23, 2008 @ 7:37 pm Dear Sanjit, Good these entries flow will help to beginner. But always in my case I have excellent accounting knowledge but at the time of interview Oracle accounting entries explaintion get trouble for me. Thks for entries to start fresh studies bcoz I’m not in touch with Apps. Thks

#2 Comment By Bill Lam On May 12, 2008 @ 1:15 am I think there maybe some big mistakes about the inventory assets item. If the inventory_item_flag is Y and COSTING FLAG enabled for inventory assets item, how could u make step 4 to debit the Asset clearing a/c happen when doing the receiving transaction for po

#3 Comment By Sridevi On November 20, 2008 @ 8:38 am We are on Oracle Applications Release 12. In Account Payables, we need to setup reversal of accruals when invoice is matched to 3WAY POs. I did set up the accounting rules for invoices, but not sure how oracle recognizes that these setup is for reversal of accruals and will post the correct received amount against the ccounts. Currently, oracle is recording the invoiced amount as reversal of accruals which is incorrect. I am not sure how & where to setup reversal of accrual accounts in Accounst payable. This is highly critical setup change for us. Please can anyone clarify how to accomplish this in Oracle AP R12.

#4 Comment By Ibrahim On June 3, 2009 @ 3:01 am Greetings, My entries goes like this currently. Fixed Asset Items (421) Receipt into receiving for Inspection 1. DR Receiving Inspection ZAXDARX2001X0000X121007X0000X0000X0000 USD 111.00 2. CR Accrual ZAXDARX2001X0000X113003X0000X0000X0000 USD 111.00 The accrual account here is the one that is picked if Invoice is matched to the PO. i do understand that this account is picked from Inventory Org>otheraccount> Inventory AP accruals. if i set this account to the asset clearing account, all the item will go to this account, how can i choose this account only for Asset items?

#5 Comment By Joe On December 29, 2009 @ 1:49 pm Thanks. This was a really helpful post. Answered a lot of questions I had.

#6 Comment By Joe On January 8, 2010 @ 10:17 pm The site was very helpful. I appreciate the brake down of the steps! It is helpful for people that are trying to learn and gain more knowledge like myself! I didn’t know that the holds have no effect on accounting!! Thanks for the information!

#7 Comment By Faraz On April 1, 2010 @ 2:23 am thats fine for begginers that great effort. Fraz Akhter

#8 Comment By suresh raj On July 20, 2010 @ 9:30 am hi,

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i appreciate your help,it would be better if we have accounting entries for order to cash cycle too…

#9 Comment By Khalid Mehmood On July 21, 2010 @ 11:39 am Thanks sanjit, its really a good for beginners. I got help from it. please arrange this type of document for sales order.

#10 Comment By Satya On September 4, 2011 @ 7:03 am A very good article Thanks a lot for sharing it

#11 Comment By Islam On September 13, 2011 @ 1:44 pm Thank you, it was helpful

Article printed from OracleApps Epicenter: http://www.oracleappshub.com URL to article: http://www.oracleappshub.com/account-payable/procure-to-pay-p2p-accountingentries/ URLs in this post: [1] last post: http://www.oracleappshub.com/account-payable/payables-transfer-to-gl-accrualaccounting-periodic-accrual/

Disclaimer The opinions expressed here represent solely my own represent personal conjecture based upon experience, practice and observation and does not represent the thoughts, intentions, plans or strategies of my current & previous employers and their clients. Copyright © 2007-2010 OracleApps Epicenter. All rights reserved.

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