P2P Life Cycle in Oracle R12


P2P Life Cycle in Oracle R12


In Oracle E-Business Suite (EBS) Release 12 (R12), the Procure-to-Pay (P2P) lifecycle refers to the end-to-end process that organizations use to procure goods and services, from identifying a need to making payments to suppliers. Below is an overview of the P2P lifecycle in Oracle EBS R12, with a brief description of each step :

Requisition Creation:


  • The P2P process begins with the creation of a purchase requisition. This is a formal request within the organization to purchase goods or services.

Purchase Order (PO) Creation:


  • Based on approved requisitions, purchase orders are generated. These documents specify the terms and conditions of the purchase, including item details, quantities, prices, and supplier information.

Supplier Negotiation and Selection:


  • Organizations may negotiate with multiple suppliers to secure the best terms and pricing. Once negotiations are complete, a supplier is selected, and the PO is sent to the chosen supplier.

Goods Receipt:


  • When the goods or services are received, the receiving department records the receipt in the Oracle EBS system. This step is essential for inventory management and accounts payable.


Invoice Matching:


  • After goods are received, the supplier sends an invoice. In Oracle EBS, the system can automatically match the invoice to the purchase order and receipt, ensuring accuracy and facilitating payment processing.

Invoice Approval:


  • Invoices often need approval before payment. Approvers review and authorize payments based on the terms and conditions of the purchase.

Payment Processing:


  • Oracle EBS supports various payment methods, including check, electronic funds transfer (EFT), and wire transfer. Payments are generated based on approved invoices.

Accounting and Reconciliation:


  • Transactions are recorded in the general ledger, and accounts payable entries are made. This step ensures accurate financial reporting.

Reporting and Analysis:


  • Organizations use Oracle EBS reporting tools to analyze P2P data, track expenses, and identify opportunities for cost savings and process improvements.


Supplier Relationship Management (SRM):


  • Oracle EBS provides features for managing supplier relationships, including supplier performance evaluations, contract management, and communication.

Period Closing and Reporting:


  • At the end of each accounting period, organizations close their books, reconcile accounts payable, and generate financial reports.


Compliance and Auditing:


  • Oracle EBS helps organizations maintain compliance with regulations and internal policies. It also facilitates auditing of P2P transactions.


Continuous Improvement:


  • Organizations can analyze P2P data in Oracle EBS to identify areas for process optimization and cost reduction.

Oracle E-Business Suite R12 offers a comprehensive set of modules and functionalities to support each stage of the P2P lifecycle. These modules include Oracle Purchasing, Oracle Payables, Oracle Receivables, Oracle Inventory, and more. The system is highly customizable to meet the specific needs of different organizations and industries.


Please note that this overview provides a high-level understanding of the P2P lifecycle in Oracle EBS R12. The actual implementation and configuration of these processes can vary based on an organization's requirements and setup. It's essential to consult Oracle documentation and work with Oracle EBS experts to properly configure and use the system for P2P processes.

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