[Odoo 17] Journal Entries in Procure to Pay (P2P) Simulation
Hi, Folks!
One of the most crucial processes for any company is the Procure to Pay (P2P) cycle, which covers all steps from purchasing goods or services to paying suppliers. This tutorial will guide you through simulating the Procure to Pay process in Odoo 17, focusing on the Journal Entries to ensure accurate financial management.
Scenario
Sun Beauté wants to buy 100 units of lipstick packaging from Fin Pack for their new product line. Sun Beauté Purchase Staff will send an RFQ with the following details:
Vendor: Fin Pack
Product: Lipstick Packaging
Quantity: 100
Unit Price: IDR 10,000.00
Delivery is made once and full payment via bank transfer.
🔧 Prerequisites
Before diving into the simulation, ensure the following prerequisites are met:
Install the Required Modules
For this simulation, install or activate the ‘Purchase’, ‘Inventory’, and ‘Accounting’ modules.
Create New Users and Companies
Create 3 new users for Purchase, Inventory, and Accounting. Set access rights according to the role of each user. Create new companies for Sun Beauté and Fin Pack. You can follow this article to create new users and companies.
Create New Products
You can login using admin account and create new product and set the Product Type to ‘Storable’. In this scenario, we can fill in the product details as follows:
Products Name: Lipstick Packaging
On Hand: 1000 units
Unit Price: IDR 10,000.00
Product Categories Configuration
Enter the Inventory module. Click Configuration on the Navbar and select the Product Categories menu. Change the Inventory Valuation to Automated for All product category.
If your display looks like this where there’s no Inventory Valuation choice,
You can go to the Setting > Users > Administrator > Technical > Check the ‘Stock Accounting Automatic’
📄 P2P Simulation
Step 1 : Step 1: Request For Quotation (RFQ)
Log in to Sun Beauté Purchase staff account, navigate to Purchase Module and create new RFQ.
Fill in the RFQ form. You can click ‘Send By Email’ if you want to send an email to the vendor.
This pop-up will show and you can click the ‘Send’ button.
The status changed to ‘RFQ Sent’.
Step 2: Purchase Order
To create a purchase order, you can click ‘Confirm Order’. The status will change to ‘Purchase Order’.
Check Journal Entries
Log in to Sun Beauté Accounting staff account, navigate to Accounting Module > Journal Entries on the Accounting menu bar.
Based on the search results, there is no journal entry for the Purchase Order to Fin Pack.
Step 3: Receive Goods
Log in to Sun Beauté Inventory staff account, navigate to Inventory Module > Operations > Receipts. Select the receipts with the source document that matches the PO, P00013.
Make sure the quantity is correct, which is 50 so that the order is completed in one delivery. Then, click ‘Validate’ to validate the delivery.
The status now changed to ‘Done’.
Check Journal Entries
Log in to Sun Beauté Accounting staff account, navigate to Accounting Module > Journal Entries on the Accounting menu bar.
Now you can see Journal inventory valuation for reference Sun B/IN/00002 — Lipstick Packaging with partner Fin Pack.
Step 4: Vendor Bill
Log in to Sun Beauté Purchase staff account, navigate to Purchase Module then select the PO we made earlier. To create a vendor bill, you can click ‘Create Bill’.
Log in to Sun Beauté Accounting staff account, then navigate to Accounting Module. Click ‘Vendors’ > ‘Bills’. Select the bill that has a billing number according to the vendor bill created earlier. Fill in the bill date and click ‘confirm’.
The status now will changed to ‘Posted’.
Check Journal Entries
After the vendor bill is formed, we can see that there is a new journal entry for vendor bills.
Step 4: Payment
To make a payment, click ‘Register Payment’. Fill in the payment form then click ‘Create Payment’ to pay the vendor.
The bill status will change to ‘In Payment’.
Check Journal Entries
There is a new journal entry for the bills.
🎉Congratulations!
You just completed a simple Procure to Pay (P2P) scenario with the Journal Entries checking. Feel free to explore another P2P scenario. Happy Odoo-ing!