R12 Purchasing setups with Detail explanation-Part 2

Oracle Purchasing

Setup Steps:

For those steps that are affected, a Context section indicates whether you need to repeat the step for each ledger, set of tasks, inventory organization, HR organization, or other operating unit under Multiple Organizations.

Step 1: Set Up System Administrator

This step involves the following tasks:

• Create a super user to use as a logon name during setup and assign the super user the required setup responsibilities. Typically, the required responsibilities are as follows (Required):
• Purchasing

• System Administrator

• Set up printers. Although you do not have to set up all of your printers now, it may be useful to set up one printer if you wish to print anything during setup. (Optional)

See: Setting Up Oracle Applications System Administrator's Guide.

Step 2: Define Accounting Key Flex fields (Required)

Define Accounting key Flex fields and cross validation rules. You may not need to perform this step if you have already installed and set up Oracle General Ledger or performed a common-applications setup. See: Designing Your Accounting Flex field, Oracle General Ledger Implementation Guide.

Important:

If you are, or will be, fully installing other Oracle applications, be sure to coordinate with those products' flex field setup before defining the key Flex fields here, as it is not recommended to change Flex fields after you acquire any Flex fields data.

For instructions on how to set up key Flex fields, see: Planning and Defining Key Flex fields, Oracle Applications Flex fields Guide.
Step 3: Set Up Calendars, Currencies, and Ledgers (Required)

If you have defined your calendars, currencies, and ledgers while setting up a different Oracle Applications product, proceed to the next step.

Context:

If you are performing a Multi-Org implementation of Purchasing, you may optionally create more than one calendar, currency, or ledgers. See: Multiple Organizations in Oracle Applications.

This step involves the following tasks:

• Set up calendars:

• Define period types. See: Defining Period Types,

Oracle General Ledger User's Guide.
• Define accounting calendar. See: Defining Calendars,

Oracle General Ledger User's Guide.
Note:

You can define the following three optional items if you install certain Oracle Manufacturing applications.

• Define transaction calendar. See: Defining Transaction Calendars, Oracle General Ledger Implementation Guide.
(Optional)
• Define workday calendar. See: Overview of Workday Calendar, Oracle Bills of Material User's Guide

. (Optional)
• Define exception templates. See: Overview of Workday Calendar, Oracle Bills of Material User's Guide

. (Optional)
• Define currencies. See: Defining Currencies, Oracle General Ledger User's Guide.
• Define conversion rate types. See: Defining Conversion Rate Types, Oracle General Ledger User's Guide.
• Define your accounting information. You must define at least one primary ledger for your organization. See: Defining Ledgers, Oracle General Ledger Implementation Guide.

• Assign your ledger to the current responsibility. See: Assigning the Ledger Accounts, Oracle General Ledger Implementation Guide.
• Define currency rates:

• Define daily rates. See: Entering Daily Rates Oracle General Ledger User's Guide.
• Define period rates. See: Entering Period Rates, Oracle General Ledger User's Guide.
• Define historical rates. See: Entering Historical Rates, Oracle General Ledger User's Guide.
• Set up accounting code combinations. You do not need to perform this task if you allow dynamic entry of code combinations for the chart of accounts corresponding to your Purchasing installation.
See: Oracle General Ledger User's Guide
• Open and close accounting periods. See: Opening and Closing Accounting Periods, Oracle General Ledger User's Guide.
Step 4: Define Human Resources Key Flex fields (Required)

You may not need to set up Human Resources key Flex fields if you have already installed and set up Oracle Human Resource Management Systems or performed a common-applications setup. Refer to the
Oracle HRMS Implementation Guide for details.
Important:

If you are, or will be, fully installing other Oracle applications, be sure to coordinate with those products' flex field setup before defining the key Flex fields here, as it is not recommended to change Flex fields after you acquire any flex field data.

For instructions on how to set up each of the key Flex fields listed below, see:

Oracle Applications Flex fields Guide.
Define Human Resources and Payroll key Flex fields:

• Job flex field

• Position flex field

• Grade flex field

• Cost allocation flex field

• People Group flex field

• Personal Analysis flex field

Step 5: Define Locations (Required)

If you're also setting up other Oracle applications, you may already have defined locations when you set up those applications. You are required to set up at least one location for now. You can set up the remaining locations after you define inventory organizations and tax codes.

You may need to revisit this step after you set up organizations, if you want to link a location to an inventory organization.
Step 6: Define Organizations and Organization Relationships (Required)

You may not need to perform this step if you have already installed and set up Oracle Inventory or performed a common-applications setup. For the following tasks relating to setting up organizations, refer to your Oracle HRMS Enterprise and Workforce Management Guide.
• Define business groups, if you want to define new business groups rather than using the default Setup Business Group .See: Setting Up Security for Applications Using Some HRMS Windows, Oracle HRMS Enterprise and Workforce Management Guide and Representing Employers Using Business Groups, Oracle HRMS Enterprise and Workforce Management Guide.
• Assign business groups to responsibilities. Within your responsibility, make sure that the profile option

HR: Business Group is set to the business group you want to use for that responsibility.

Important:

It is important that the HR: Business Group profile option be set to the business group you want to use before you define organizations as described below.

• Define legal entities organizations.

• Define operating-units and assign them to legal entities.

• Set up inventory organizations. For the following tasks relating to setting up

inventory organizations, see: Oracle Inventory User's Guide.
• Classify the organizations as inventory organizations.

• Define accounting information for inventory organizations.

• Define inventory organization parameters.

• Define receiving options for the inventory organizations.
For this task, see: Defining Receiving Options
• Define human resources organizations.

• Define organization hierarchies. (Optional)
Step 7: Convert to a Multi-Org Architecture (Required)

Although optional, this setup step is recommended even if your business is composed of just one operating unit. Performing this step now gives you the flexibility to add operating units later.

This step includes the following tasks:

• Set the profile options

MO: Operating Unit and HR: User Type.
• Run the utility to convert to a Multi-Org architecture. It is recommended to involve your system administrator with this task.

See:

Multiple Organizations in Oracle Applications. If your company has implemented a shared services operating model, Multi-Org Access Control (MOAC) enables more efficient business transaction processing. You can access, process, and report on data across multiple operating units from a single responsibility without compromising data security or system performance. To take advantage of Multi-Org Access Control, perform the following tasks:

• Define a Multi-Org Security Profile. See: Defining a Security Profile, Oracle HRMS Implementation Guide.
• Set the profile option

MO: Security Profile to your security profile for each application responsibility that needs to access multiple operating units.

• Set the profile option

MO: Default Operating Unit to a default operating unit for the responsibility from the step above.

Step 8: Define Inventory Key Flex fields (Required)

You may not need to set up Inventory key Flex fields if you have already installed and set up Oracle Inventory or performed a common-applications setup. See also: Oracle Inventory Flex fields, Oracle Inventory User's Guide Important: If you are, or will be, fully installing other Oracle applications, be sure to coordinate with those products' flex field setup before defining the key Flex fields here, as it is not recommended to change Flex fields after you acquire any flex field data.

For instructions on how to set up each of the key flex fields listed below, see: Oracle Applications Flex fields Guide.
• System Items flex field. After you compile the System Items Flex fields, the item flex field view concurrent request is started.

• Item Category flex field

• PO Item Category flex field. See: Item Category Flex field Structures,

Oracle Inventory User's Guide.


• Item Catalog flex field

• Stock Locator flex field

• Account aliases Flex fields

• Sales orders flex field

Note:

Even if you do not use any of the above Flex fields , you must still enable at least one flex field segment for each and compile them because Oracle Inventory transactions (such as the Define Items window), inquiries, and reports require a frozen flex field definition.

Step 9: Define Units of Measure (Required)

You may not need to perform this step if you have already installed and set up Oracle Inventory or performed a common-applications setup. See: Oracle Inventory User's Guide.

This step involves the following tasks:

• Define units-of-measure classes.

• Define units of measure.

• Define units-of-measure conversions. You can define three different conversion types for your needs: Standard, Intra-class, or Inter-class.

Step 10: Define Freight Carriers (Optional)

Define freight carriers if you want to specify on a purchase order the freight carrier that a supplier should use.

See: Defining Freight Carriers and Ship Methods, in the Oracle Order Management Implementation Manual.

Context: You must perform this step for each inventory organization.
Step 11: Define Item Attributes, Codes, and Templates

This step involves the following tasks:

• Define item attribute controls. (Required with defaults)Default: Most item attribute groups default to Item Master-level control. The rest default to the Item/Organization level.

• Define container type Quick Codes. These can be used to define physical attributes for items. (Optional)
• Define status codes. (Required with defaults)Default: Default status codes include basic statuses such as Active, Inactive, Obsolete, and Prototype.

• Define item type Quick Codes. (Required with defaults)
Default:

Default Quick Codes include finished goods, option class, kit, purchased item, and others.

• Define customer item commodity codes. These can be used to group customer items. (Optional)
• Define item templates. You can define an item template if many items share the same values for a number of attributes. (Optional)
Step 12: Define Categories

If you're also setting up Oracle Inventory, you may already have performed this step when you set up Inventory.

This step involves the following tasks:

• Define category codes. See: Defining Categories, Oracle Inventory User's Guide. (Required)
• Define category sets. See: Defining Category Sets, Oracle Inventory User's Guide. (Required with defaults)

Default:

Examples of category sets are Inventory and Purchasing.
• Define default category sets. See: Defining Default Category Sets, Oracle Inventory User's Guide. (Required with defaults)
Default:

Each functional area comes with a default category set.
Step 13: Define Catalog Groups (Optional)

A catalog group consists of descriptive elements for items to which you assign sets of values such as type, size, or color. If you're also setting up Oracle Inventory, you may already have performed this step when you set up Inventory.

Step 14: Set Up Personnel

You may not need to perform this step if you have already installed and set up Oracle Human Resource Management Systems or performed a common-applications setup.

Refer to the Oracle HRMS Enterprise and Workforce Management Guide or the HRMS online help for details regarding the following steps.

This step involves the following tasks:

• Define employee Quick Codes. (Required with defaults)
• Define jobs. See: Representing Jobs and Positions,

Oracle HRMS Enterprise and Workforce Management Guide. (Required)
• Define positions. You must define positions if you plan to use position approval hierarchies. See: Representing Jobs and Positions, Oracle HRMS Enterprise and Workforce Management Guide. (Optional)
• Define position hierarchies. You can define one or more position hierarchies to meet your needs. See: Position Hierarchy Window, Oracle HRMS Enterprise and Workforce Management Guide. (Optional)

Default:

If you skip this task, you cannot use position approval hierarchies, but must use the employee/supervisor approval method instead.

• Define the following financial options in the Financial Options window; see: Defining Financials Options,

Oracle Payables User's Guide (Required):
• Employee numbering

• Position approval hierarchies option (whether to use position approval hierarchies)

• Inventory organization

• Business group (Make sure a business group is specified.)

• Supplier numbering

• Define employees. If you use purchasing without Oracle Human Resource Management Systems, use the setup window from within Purchasing for defining employees. If you use purchasing with Oracle Human Resource Management Systems, use the setup window for defining employees from within the Human Resource Management Systems application. Refer to the online help for the Enter Person window for entry details. See: Entering a New Person, Oracle HRMS Enterprise and Workforce Management Guide. (Required)
Note: These purchasing user names must be linked to an employee name.

Step 15: Set Up Oracle Workflow (Required)

Since Purchasing uses Oracle Workflow technology to perform document approvals, automatic document creation, and account generation via the Account Generator, you need to set up Oracle Workflow, if you haven't done so already. See: Setting Up Oracle Workflow, Oracle Workflow Administrator's Guide.
Step 16: Decide How to Use the Account Generator (Required)

The Account Generator process in Purchasing builds a charge, budget, accrual, and variance account for each purchase order, release, and requisition distribution based on the distribution's Expense, Inventory, or Shop Floor destination type. You must review the default process that Purchasing uses to see if it meets your accounting requirements.

You can optionally customize the Account Generator for each ledger that you have defined. See: Using the Account Generator in Oracle Purchasing,
Context:

This step needs to be performed for each operating unit.
Step 17: Open Inventory and Purchasing Accounting Periods (Required)

This step involves the following tasks.

• Open Inventory accounting period. See: Maintaining Accounting Periods, Oracle Inventory User's Guide.
Context:

This task needs to be performed for each inventory organization.
• Open purchasing accounting period. See: Purchasing Periods
Context:

This task needs to be performed for each ledger.
Step 18: Define Sub inventory Locations (Optional)

You can define your own sub inventory locations such as Inspection, Cold Storage, or Reject-Disposition. You may not need to perform this step if you have already installed and set up Oracle Inventory. See: Defining Sub inventories, Oracle Inventory User's Guide.
Context:

This step needs to be performed for each inventory organization.
Step 19: Define Cross-Reference Types (Optional)

An example of a cross-reference type is one used to cross-reference an item number to the part number that the supplier uses. See: Defining Cross-Reference Types, Oracle Inventory User's Guide.
Step 20: Define Taxes (Optional)

Define taxes and assign them recovery rates or rules. You may not need to perform this step if you have already installed and set up Oracle Payables or performed a Setting Up common-applications setup. See: Setting Up Taxes, Oracle E-Business Tax User Guide or refer to the Oracle E-Business Tax Implementation Guide.
Default:

If you skip this step, there will be no tax calculated on a requisition or purchase order and other tax attributes cannot be selected/defaulted.