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February 24, 2015

2/24/2015 04:28:00 AM
Oracle Purchase order flip functionality
Oracle EBS: Purchase order Flip Functionality

As with any new concept, e Procurement has brought with it a number of new terms and phrases to describe certain functions within the process. One of the strangest phrases entering into the vocabulary of procurement and accounting professions is the “PO Flip”.
At the most basic level, a PO Flip is the conversion of a Purchase Order into an Invoice using the tools available in e Procurement or Electronic Invoice Presentment and Payment (EIPP) platforms,


PO Flip’ in simple terms refers to the process of ‘Flipping’ a PO to create an invoice by the vendor so that the invoice can then be dispatched to a customer.
To understand better, lets take a business case:
Pulla Reddy Sweets is in the business of manufacturing and selling  sweets. To manufacture cookies, Pulla Reddy sweets needs to procure 5 tonnes of sugar from Andhra Sugars.
So, to complete the procurement process,Pulla Reddy sweets submits a purchase order (PO) and submits to Anhdra Sugars for 5 tonnes of sugar. Now, the modern electronic tools allow Pulla Reddy sweets to submit the PO electronically directly into the accounting system of Andhra Sugars.
Andhra Sugars, can then ‘flip’ the PO received and flip the PO to create an electronic invoice which can then be immediately submitted to Pulla Reddy Sweets to be recorded in their Accounts Payable (AP) system.
Now, having receiving the invoice, the Finance Team of Pulla Reddy Sweets can review the purchase and authorize an immediate electronic payment through a click of a button thus reducing the amount of administrative effort that would have to be invested by the Finance Department.
The Benefits
In a lot of organizations, specially in manufacturing sector, the number of POs that are raised by the Buyers and the invoices that are sent by Suppliers can run into several thousands a month.
The Finance team can spend their time into analyzing and optimizing the payment of the invoices received by considering the discounts available rather than spending time on tracking the invoices received from Suppliers.
The following can be avoided in a large organization:
1. Duplicate invoice payments
2. Missing Payments due to invoices not recorded at all or not recorded properly.
3. Missing or Duplicate Invoices






 
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