Procure to Pay Process Flow Organizational Structure

Procure to Pay Process Flow Organizational Structure

In Oracle Fusion Applications, the Procure to Pay is a business process which includes the process of purchasing, requesting, receiving, paying, and accounting for goods or services. The procurement function in a Business Organization can range from office supplies to shop floor inventory needed to manufacture products for shipment. Procure to Pay process is one of the important business process cycles in Oracle Applications. This flow remains the same across various versions of Oracle Apps in 11i, R12 with slight variations in the options that are available in every version.

Procure to pay is tightly linked to the organizational structure and it is important to first understand the organizational structure of the business and understand the business process flow. The organization structure specified here is based on Multi-Organization concepts as applicable to Oracle R12 version. While creating a requisition, the details of Operating Unit and Inventory Organization would have to be offered. The Organization Structure can be interpreted as follows:

  1. There is a single Business Group called XYZ Group which is a parent group for all the legal entities. A Business Group is not a legal entity and is not a registered organization.
  2. The primary general ledger is needed for recording all the financial transactions. There can be one or more legal entities which require compliance with local laws both legal and accounting related.
  3. Operating Units are defined for every Legal Entity which is having one or more Operating Units. The transactions in each and every Operating Unit are recorded in the primary general ledger tagged with that Operating Unit.
  4. Inventory Organization is defined for each Operating Unit which represents the units were actually manufacturing may take place. There are one or more inventory organizations for each Operating Unit.