Oracle Purchasing Terminology
Terms used in the conventional purchasing system and as referred in Oracle Purchasing may be different. A brief explanation of the ‘Oracle Purchasing’ existing terminology is provided the following paragraphs. These terms are extensively used in documenting the ‘Purchasing - To Be’ flows and it is recommended that the various users of this system get acquainted with the same.
Requestor: Any Employee who requires specific items to meet his operational needs. Requestor may or may not have the system access to enter the on-line requisitions. Requestor with no computer access will give their requisitions manually on pre-printed requisition form to the requisition ‘Preparer’ within the concerned department.
Preparer: Employee in a department with the responsibility of entering Purchase Requisitions in the system.
Approver: Employee with the responsibility and authority of approving the requisition and / or the Quotation Analysis Document and / or the Purchase Orders.
Buyer: Employee in the Purchase Department with the responsibility of entering the Requests for Quotation, the Quotations received from the Supplier and the Purchase Orders in the new system.
Request For Quotation (RFQ): Synonym for ‘Inquiry’. RFQs are sent to the vendors, requesting them for their quotations for the items / services required to be purchased.
Quotation: Quotations are the ‘Vendor Offers’ for the required items / services.
Quotation Analysis: It is a ‘Comparative Statement of Quotations’.
Standard Purchase Order: Standard Purchase Orders are created for purchase of various items / services where details such as the quantity to be purchased and the negotiated costs.
Blanket Purchase Agreement: Blanket purchase agreements are signed with the vendor for the supply of goods / services over a period. Such agreements can be used when details of the goods / services you plan to buy from a specific supplier in a period are known, but you do not yet know the details of your delivery schedules. They can also be used to specify negotiated prices for your items before actually buying them.
Blanket Release: You can issue a Blanket Release against a Blanket Purchase Agreement to place the actual order with the vendor. The Releases should be within the Blanket Agreement effectively dates.
Planned Purchase Order: It is a long term agreement committing to buy items / services from a single source. The tentative delivery schedule is given to the vendor along with other details like quantities and estimated costs.
Schedule Release: This document is issued to the vendor against a Planned Purchase Order to place the actual order. This document will confirm the specific quantity and delivery date to the vendor.
Contract Purchase Agreements: Contract Purchase Agreements may be entered into with suppliers to agree on specific terms and conditions without indicating the goods or services that will actually be purchased. Standard Purchase Orders can be issued at a later date referencing such Contracts.
Requisitions: Requisitions generated by various departments of your organization. They basically say that ‘I WANT THIS ITEM’ mentioning the item quantity and required date
Receiving Goods: Suppliers ship the goods, which are received in your organization
Payments: After clearance from the receiving department about the receipt of goods, payments are made to the suppliers.
Close the PO: After the items are received, payments made you can close the PO.
Purchasing Requirements
·
Item
·
Quantity
·
Ship to Address
·
Bill to Address
·
Delivery Schedules
·
Terms and Conditions
·
PO Numbering
·
Approval Authority
·
Supplier
·
Accounts
What are the types of Purchase Orders and Key points in Purchasing?
Purchase Order Types Summary
Standard Purchase Order
|
Planned Purchase Order
|
Blanket Purchase Agreement
|
Contract Purchase Agreement
|
|
Terms and
Conditions Known
|
Yes
|
Yes
|
Yes
|
Yes
|
Goods or Services
Known
|
Yes
|
Yes
|
Yes
|
No
|
Pricing Known
|
Yes
|
Yes
|
Maybe
|
No
|
Quantity Known
|
Yes
|
Yes
|
No
|
No
|
Account
Distributions Known
|
Yes
|
Yes
|
No
|
No
|
Delivery Schedule
Known
|
Yes
|
Maybe
|
No
|
No
|
Can Be Encumbered
|
Yes
|
Yes
|
No
|
No
|
Can Encumber Releases
|
N/A
|
Yes
|
Yes
|
N/A
|
What are the types of matching options in P2P Cycle?
Purchasing and
Payables enable you to match invoices to purchase order shipments or purchase
order distribution lines. There are following three ways to match Purchase
Order and Invoices
2-way matching: This verifies that
Purchase order and invoice information match within your tolerances as follows
and check following:
Invoice price <=
Purchase order price
Quantity billed <=
Quantity Ordered
3-way matching: This verifies that the receipt and invoice information match with the quantity tolerances defined and check following:
Invoice price <=
Purchase order price
Quantity billed <=
Quantity Ordered
Quantity billed <=
Quantity received
4-way matching: This verifies that
acceptance documents and invoice information match within the quantity
tolerances defined and check following:
Invoice price <=
Purchase order price
Quantity billed <=
Quantity Ordered
Quantity billed <=
Quantity received
Quantity billed <=
Quantity accepted
What are the routing methods in Receiving?
-
Direct
-
Standard
-
Inspection Required
What are the list of fields changes cause Purchase Order Document Revision Increment?
The
following tables describe the additions and changes that cause Purchasing to
increment document revision numbers in each of the document components. These
are the ONLY fields which will cause the revision to increment:
Header
Information
|
Standard
|
Planned
|
Blanket
|
Contract
|
Release
|
Buyer
|
X
|
X
|
X
|
X
|
X
|
Contact
|
X
|
X
|
X
|
X
|
|
Confirm
|
X
|
X
|
X
|
X
|
|
Ship-To
|
X
|
X
|
X
|
X
|
|
Bill-To
|
X
|
X
|
X
|
X
|
|
Payment
Terms
|
X
|
X
|
X
|
X
|
|
Freight
Carrier / Ship Via
|
X
|
X
|
X
|
X
|
|
FOB
|
X
|
X
|
X
|
X
|
|
Freight
Terms
|
X
|
X
|
X
|
X
|
|
Brief
Note to Supplier
|
X
|
X
|
X
|
X
|
|
Acceptance
Required
|
X
|
X
|
X
|
X
|
X
|
Acceptance
Due Date
|
X
|
X
|
X
|
X
|
X
|
Amount
Limit
|
X
|
X
|
X
|
||
Effective
Date
|
X
|
X
|
X
|
||
Expiration
Date
|
X
|
X
|
X
|
||
Cancel
Flag
|
X
|
X
|
X
|
X
|
|
Amount
Agreed
|
X
|
X
|
|||
Release
Number
|
X
|
||||
Release
Date
|
X
|
||||
Confirming
Order
|
X
|
X
|
X
|
X
|
X
|
Oracle
Procurement Contracts: Contract Terms
|
X
|
X
|
X
|
Line
Information
|
Standard
|
Planned
|
Blanket
|
Contract
|
Release
|
Unit
Price
|
X
|
X
|
X
|
||
Line
Number
|
X
|
X
|
X
|
||
Item
|
X
|
X
|
X
|
||
Item
Revision
|
X
|
X
|
X
|
||
Item
Description
|
X
|
X
|
X
|
||
Payment
Terms
|
X
|
X
|
X
|
||
Quantity
|
X
|
X
|
X
|
||
Unit
of Measure
|
X
|
X
|
X
|
||
Source
Quotation Header
|
X
|
X
|
X
|
||
Source
Quotation Line
|
X
|
X
|
X
|
||
Hazard
Class
|
X
|
X
|
X
|
||
UN
Number
|
X
|
X
|
X
|
||
Contract
Number
|
X
|
X
|
X
|
||
Supplier
Item Number
|
X
|
X
|
X
|
||
Brief
Note to Supplier
|
X
|
X
|
X
|
||
Price
Type
|
X
|
X
|
X
|
||
Quantity
Agreed
|
X
|
||||
Amount
Agreed
|
X
|
||||
Closed
Code
|
X
|
X
|
X
|
X
|
X
|
Cancel
Flag
|
X
|
X
|
X
|
X
|
X
|
Ship-To
Location
|
X
|
||||
Break
Price
|
X
|
||||
Price Break Number
|
X
|
X
|
X
|
Shipment
Information
|
Standard
|
Planned
|
Blanket
|
Contract
|
Release
|
Shipment
Number
|
X
|
X
|
X
|
||
Ship-To
|
X
|
X
|
X
|
||
Quantity
|
X
|
X
|
X
|
||
Promise
Date
|
X
|
X
|
X
|
||
Need-By
Date
|
X
|
X
|
X
|
||
Last
Acceptance Date
|
X
|
X
|
X
|
||
Taxable
|
X
|
X
|
X
|
||
Shipment
Price
|
X
|
||||
Cancel
Flag
|
X
|
X
|
X
|
Distribution
Information
|
Standard
|
Planned
|
Blanket
|
Contract
|
Release
|
Quantity
|
X
|
X
|
X
|
||
Requestor
|
X
|
X
|
X
|
||
Distribution
Number
|
X
|
X
|
X
|
What is the major difference between drop shipment and back to back order?
-
In B2B the source will be internal but the item
would be procured after the order is created or after the demand is made.
-
In Drop Ship the source will be external
-
In Drop Ship orders, material is directly shipped to
the customer from the supplier. Thus, inventory is not affected. In this case,
only logical receiving is done. But in the case of Back-to-Back orders,
material is taken from inventory.
-
Drop Ship orders may have many Purchase Orders
connected to them. In Back-to-Back orders one PO is tied to one Sales Order
Types of approval hierarchies in Purchasing?
Position Approval hierarchy - Position Hierarchies are
hierarchies that have a position relationship. By position, we mean position
that are attached to employees. Purchasing utilizes positions as a roadmap to
determine how and where documents will be routed once the approval process has
been initiated. It is first necessary to have created all positions that are
going to be used in the system. Once all positions have been created, it is
necessary to build the position hierarchy. Each position has approval limits,
so when a purchase order exceeds the limits of the position, the purchase order
is forwarded onto the next position in the Hierarchy.
Employee/Supervisor approval hierarchy - Employee/Supervisor approval
hierarchy uses the employee-supervisor relationships. To implement this form of
approval routing, you need only to define jobs. The job will then serve as the
tie to the Approval group, and based on the approval limits from the Approval
Group, the Document will either be Approved or Forwarded to the Employees’
Supervisor. If no Supervisor is able to be located and the job assigned to the
employee does not have Approval Authority, then the Approving employee must
enter a Forward-to person, or the Document will be returned to an Incomplete
status and a notification will be sent to the Approving employee, stating - 'No
Approver Found'
Advanced Approval Support for
Requisitions
Feature offered in Release 12 which closely integrates with Oracle Approvals Management module.
Feature offered in Release 12 which closely integrates with Oracle Approvals Management module.
