Procurement to Pay Cycle
In MM the main process is P2P Cycle i.e.
Procurement to Payment Cycle. It starts with Purchase requisition and ends with
Invoice verification. In this process we have different stages. Those are
listed below:
Ø Purchase
Requisition (PR)
Ø Request for
Quotation (RFQ)
Ø Purchase
Order (PO)
Ø Goods
Receipt (MIGO)
Ø Invoice
verification (MIRO )
Purchase Requisition:
Purchase requisition is a
request or instruction to purchasing department to procure a certain quantity
of a raw materials or consumables, etc. at certain point of time.
It is an internal document,
sends to Purchase Department.
Requisitions can be created
either manually or they are auto generated by the system.
Request for Quotation:
In the case of approved
vendor is not available for procurement, RFQ will be sent to different vendors
to finalize the specific vendor for procurement.
It is an invitation to
vendor for providing quotation for supplying the material.
RFQ issued to several
vendors shall be maintained in the system and the system shall determine the
most favorable quotation submitted.
Purchase Order:
Purchasing order is outgoing document. It is a legal document. Purchase
order shall be created with reference to approved purchase requisitions, RFQ,
and contracts. Purchase orders shall be identified with the document type and
item categories. Purchase order should be created with reference of PR, RFQ or
Contract.
Goods Receipt (GR):
Goods receipt
in plant will happen when goods received from the Vendor.
Vendor delivered
the materials then we perform this process, is called GR.
In this the
received material quantity are checked.
Invoice verification:
Invoice is
received from vendor after GR, it is verified by company.
Verification of
vendor invoice refers to a process in which the business makes payment to
vendor.
P2P CYCLE
