Task Flow for Purchase of Goods

Create Purchase Orders

To purchase goods, buying organizations issue purchase orders (POs) to its suppliers.

Supplier Ships Goods

During preparation of a shipment, supplier generates a fiscal document with details on goods, charges, and taxes that are applicable to the sale of goods to the buying organization. The fiscal document is printed and this document accompanies the goods to the warehouse of the buying organization. An electronic fiscal document is transmitted to the buying organization to facilitate and expedite the validation of the information in the fiscal document.

Capture Fiscal Document Information

From the buying organization, a user with the Load Electronic Fiscal Document (CMF_LOAD_XML_FISCAL_DOCUMENT) privilege loads the electronic fiscal document using the Fiscal Document Capture work area to validate its information and the following information is loaded:

General attributes: Supplier name and location, customer name and delivery location, and so on
Item fiscal attributes: Intended use (from PO), fiscal code (from fiscal document), and so on
Freight (as shown in fiscal document)
Other charges (as shown in fiscal document)
Exclusive taxes shown in fiscal document

When you select the PO for which the fiscal document information is being captured, the available PO information such as the PO line items, numbers, and descriptions, ordered quantity, received quantity, intended use, and so on are displayed. Also, the applicable taxes based on the purchase are displayed.

Note: You can also capture the fiscal document details using the XML import process.When you import a fiscal document, if the matching source documents, that's the purchase order and purchase order line number aren't provided in the XML during the import process, then they're derived and associated with the fiscal document line. If more than one match is found, the results are sorted by requested delivery date, promised delivery date, header level creation date, ordered by oldest line and schedule.

Capture Fiscal Document Information for Trade With a Natural Person

While trading with an individual who is also referred to as a natural person, the fiscal obligations and documentation requirements differ from those involved in the business-to-business (B2B) transactions. In most scenarios, a natural person is not legally obligated to issue a fiscal document for the trade. However, Brazilian tax authorities regulate the fiscal documents capture, and it is mandatory to issue a fiscal document for compliance with the tax laws.

For trades with natural persons, it is the responsibility of the first party business entity, that is, the organization or company involved in the transaction to issue and send the fiscal documents to the natural persons, and enable them to supply the goods or service.

You can now capture such fiscal documents issued by the first party for trades with natural person using the following new fiscal flows:

Standard Issued by Buyer
Standard Complementary Issued by Buyer
Bookkeeping Issued by Buyer
Bookkeeping Complementary Issued by Buyer

Here are some tips and considerations:

For the fiscal document issued by Legal Entity, in XML, tpNF =1, the Issuer Tax Payer ID = Ship to Tax Payer ID, and Receiver Tax Payer ID = Ship From Tax Payer ID.
Ensure that the CFOPs are unique across the fiscal flows to ensure clean import of fiscal documents received via XML.
While capturing the fiscal documents for purchases using PO as the source document, ensure that you don't use the same PO as the source document in both the flows, that is, where the FD is issued by the first party, and the FD is not issued by the first party.
You can only capture fiscal documents issued by the first person for business flow domestic purchases and bookkeeping.

Prevalidate Fiscal Document Attributes and Amounts

You can prevalidate the electronic fiscal document as soon as it's received before the physical receipt of the ordered goods from the supplier. This prevalidation checks all information on the fiscal document except item quantities.

Once goods are received, the received goods are counted and if the received quantities of the items don't differ from the fiscal document item quantities, no further validation is required. The fiscal document is approved and the goods are received and delivered to inventory. If there are discrepancies between the fiscal document and the received item quantities, then corrective actions are required.

Validations are performed to ensure that information in the fiscal document is accurate; the information in the loaded fiscal document is compared with the information stored in the Oracle Fusion Cloud Applications. This includes validation of the following:

General attributes: Parties (supplier and customer) and their locations, PO number, and so on
Fiscal attributes: Tax codes, country of origin, intended usage, and so on
Purchase information: PO items and prices
Exclusive taxes: Taxes that are listed in the fiscal document, but not included in price of items.

Validations are performed to ensure that goods are received and delivered to inventory at a value that's inclusive of all the direct costs and applicable taxes associated with the goods.

Once the validation of general attributes, fiscal attributes, and financial amounts is complete, taxes are validated. A fiscal document may contain one or more taxes that require notification and validation.

Taxes are generally calculated and applied at the item level but they may be reported at either the document level or the item level in the fiscal document.

If IPI tax is present, then IPI tax is calculated on a tax basis that includes the sum of material cost and freight. Freight is only reported as a single amount at the fiscal document level. In Brazil, a fiscal document's total freight cost is allocated to the fiscal document items as a proportion of the item material cost value to the total material cost value. To support other country requirements, alternative charge allocation bases such as item quantity, weight, and volume are available.

To validate tax reported in a fiscal document, the tax information is sourced to determine the types and amounts of taxes that are expected to be reported as payable in the supplier fiscal document. Calculations are compared against the captured fiscal document tax amounts and any errors or tax differences are displayed.

If validation is successful, you can conditionally approve the fiscal document, pending verification of the actual quantity of received goods until the supplier's shipment arrives.

For information on determination and calculation of taxes, see the Oracle Fusion Cloud Financials documentation.

Receive Against Purchase Order

When goods arrive at the buying organization, a user with the Confirm Item Deliveries (CMF_CONFIRM_ITEM_DELIVERIES) privilege can unload and inspect the goods; the included documentation usually contains a waybill and a fiscal document. The fiscal document contains the supplier's fiscal declaration of sale and taxes pertaining to the shipment.

You must determine that the received item quantities match the fiscal document item quantities. If prevalidation contains no discrepancies or errors, you can create a system receipt for the received items, cross-referencing the supplier's fiscal document number.

If the receipt outing options are set as direct on the PO schedule, the application automatically creates:

Both receipt and delivery for expense destination items with single distribution line and
Only receipt for the inventory destination items or expense destination items with multiple distributions and requires a manual put away for delivery.

Calculate Product Cost

A fiscal document includes the material cost of purchased items, freight, and other charges billed by the supplier along with applicable taxes. The sum of these amounts is in the fiscal document. However, all of these amounts aren't included in the receipt cost of the items. Accounting GAAP standards and fiscal regulations prohibit the inclusion of recoverable taxes in the inventory valuation, as a result, in the calculation of receipt cost or inventory cost of an item, the amount related to the recoverable tax isn't included in the calculation of item cost.

Based on the preceding fiscal document amounts, the unit costs of the fiscal document receipt items are as follows:

Transfer item cost information: The item cost information is transferred to the costing application.

Transfer prior to invoicing information: The captured fiscal information is shared with the payables application. In Brazil, you can consider an inbound fiscal document as a proxy for a supplier invoice as the fiscal document is a formal statement of an invoiced business transaction from the supplier to the customer as shared with the fiscal authorities.

If a receipt is validated against the PO, then you can consider the invoice as matched in the payables application.