P2P Cycle

P2P cycle also called as Procure to pay cycle. First, you enter the Requisition for required product, then supplier sends a reply of requisitions or request for quotation. You can approve the quotation of a vendor after to record all data which is received from your suppliers such as terms and conditions, shipment details, and price breaks.P2P-Procure-to-Pay-cycle

Then you can go forward for purchase agreement which is of two types: one is blanket purchase agreement and other contract purchase agreement. You can use blanket purchase agreement to communicate to that vendor that are negotiating pricing before actually releasing firm purchases. It must have detailed data besides the header level information. A blanket purchase agreement contains lines for specific terms and conditions, quantity, promised date, need-by-date, and prices. You can create a contract purchase agreement with a vendor has to agree to terms and conditions and other goods, without entering into an agreement for specific goods or services. It can support competitive solicitation through the request for quotation process and then through the purchase releases because a contract purchase agreement has only header level information and no detailed information. Header level includes terms and conditions, currency supplier and a supplier website. You can also enter a purchase order for confirms to purchasing goods. Purchase order module has four types: Standard, Planned, Blanket, and Contract.

In P2P Cycle whenever you get goods or service that time you enter receipts in the system. There are five types of receipts: manual receipts, unordered item receipts, express receipts, cascade receipts, and substitute item receipts. That time accounting entry should be debited to inventory material cost and credited to clearing accounts payable.

In P2P Cycle whenever you get the invoice receipt from accounts department, it enters in the system that time accounting entries should be debited accounts payable clearing and credited to accounts payable. Then you can make a payment to a supplier that time accounting entries should be debited payable liability and credited to cash clearing account. After reconciliations between cash management and bank, account should be debited to cash clearing account and credited to bank account.

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