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Procure to Pay process (P2P) or procure-to-pay (P2P) Accounting Entries or P2P cycle or P2P process or SAP P2P Cycle or FI-MM integration or MM cycle

Updated: Mar 25

In SAP, the Procure-to-Pay (P2P) or FI-MM integration or P2P cycle or P2P process involves several steps, including procurement, receiving goods or services, and making payments. Here's an overview of the accounting entries involved in the P2P process:

1. Purchase Requisition (PR):

   - No accounting entries are made at this stage. It's a request generated by departments indicating their need for certain goods or services.

2. Purchase Order (PO):

   - When a purchase order is created, it's a commitment to buy goods or services from a vendor. No accounting entries are made at this point.

3. Goods Receipt (GR):

   - When goods are received, a goods receipt is created in the system to record the receipt of goods or services.

   - Accounting entry:

     - Debit Inventory or Expense account

     - Credit Goods Receipt/Invoice receipt account (Clearing account)

4. Invoice Receipt (IR):

   - When the vendor invoice is received, it is entered into the system.

   - Accounting entry:

     - Debit Goods Receipt/Invoice receipt account (Clearing account)

     - Credit Vendor

5. Payment:

   - When the invoice is due for payment, a payment is processed.

   - Accounting entry:

     - Debit Vendor

     - Credit Bank

These are the basic accounting entries involved in the SAP Procure-to-Pay process. The specifics may vary depending on company policies, configurations, and the SAP modules implemented (e.g., Materials Management, Financial Accounting).


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