Troubleshooting : Purchasing Setup of Approval Hierarchies

Troubleshooting Details

Purchasing Setup of Approval Hierarchies

There are three methods to route documents for approval:.

·         Approval Hierarchies (uses position hierarchies)

·         Employee/Supervisor (uses employee/supervisor relationship)

·         AME - Approval Management Engine (for requisitions only)

The first two methods Approval and Employee/Supervisor pertain to all Purchasing document types, including requisitions. This document will not include information on the 3rd method, Approval Management Engine (AME) for requisition approval.

Additionally this note will only review approvals for single business groups. Refer to Note 726618.1 'Unable to Allow Approver to be seen Across Business Groups' for information about approvals across business groups.

This document will include the following sections:

• Initial Setup: Basic setup you need to complete in order to use the Approvals functionality in Purchasing
• Employee/Supervisor Relationships: A narrative explaining the employee/supervisor relationship and examples.
• Position Hierarchy: A narrative explaining the position hierarchy and examples.
• Approval Setup: Basic requirements for setting up both the Approval and Employee/Supervisor Relationship. If you want a quick reference with screenshots of the setup go directly to this section.

Initial Setup

- Enable the Approval Method

The Human Resources zone on the Financial Options form has an option called Use Approval Hierarchies. This option determines which type of hierarchy is used for the approval process. When checked, the Approval Hierarchy is used and when unchecked the Employee/Supervisor relationship is used.
Go to the Financial Options form

Navigation: PO Responsibility -> Setup -> Organizations -> Financial Options

a. Select or deselect ‘Use Approval Hierarchies’.
b. Save your work.

- Define Jobs / Positions

Use the Job window to create each of the job titles in your organization (for example: Buyer, Supply Base Engineer). If you are not using positions, you assign one or more employees to each job. If you are using positions, you assign one or more positions to each job, and later assign one or more employees to each position. 

Navigation if using shared HR: Purchasing Responsibility -> Setup -> Personnel -> Jobs
If using a full install of HR: Human Resources Responsibility -> Work Structures -> Jobs -> Description

Note: You assign authorization rules to jobs or positions based on your approval method. If you are using employee supervisor method the authorization rules are assigned to the jobs.

Use the Position window to create each of the positions in your organization. This step is required if you plan to use either security or position approval hierarchies.

Navigation if using shared HR: Purchasing Responsibility -> Setup -> Personnel -> Positions
If using a full install of HR: Human Resources Responsibility -> Work Structures -> Positions -> Description

Note: Refer to Representing Jobs and Positions, Oracle HRMS Enterprise and Workforce Management Guide for more information about setting up jobs or positions.

- Build Position Hierarchies

Use the Position Hierarchy window to build and administer your position hierarchies. There are two distinct uses for position hierarchies in Purchasing: Document approval routing and
Document security control. You can use a single position hierarchy for both purposes.

Navigation if using shared HR: Purchasing Responsibility -> Setup -> Personnel -> Position Hierarchy.
If using a full install of HR: Human Resources Responsibility -> Work Structures -> Position Hierarchy

Note: Refer to Representing Jobs and Positions, Oracle HRMS Enterprise and Workforce Management Guide.

- Security Hierarchies

Security Hierarchy is used to determine who can access the purchasing document. If you want to specify a Security Level of Hierarchy for any of your document types, you must first define all positions. 

Important: Even if you are using jobs (i.e. Employee/Supervisor relationship) to route documents, you must define positions before you can enable this Security Level)

The Security Hierarchy is selected from a list of values in the Control zone of the Purchasing Options form (Navigation: Purchasing Responsibility -> Setup -> Organizations -> Purchasing Options). Here, select a Security Hierarchy, which is a position hierarchy from the Position Hierarchy window. When the Security Level is set to Hierarchy for a document in the Document Controls window, this position hierarchy governs access security for that document.

The Security Hierarchy field will only be enabled when the Hierarchy option is selected for the Security Level on the Document Types form.

Employee/Supervisor Relationships 

This type of hierarchy is defined by the employee/supervisor relationship. The supervisor of an employee is defined on the Assignment region of the Employee form. If the purchase order entered by the employee exceeds the approval limits, the purchase order is forwarded onto the employees' supervisor, as defined on the Employee form.

To implement this form of approval routing, you need only to define jobs. The job will then serve as the tie to the approval group, and based on the approval limits from the Approval Group, the document will either be approved or forwarded to the Employees’ Supervisor. If no supervisor is able to be located and the job assigned to the employee does not have approval authority, then the approving employee must enter a forward-to person, or the Document will be returned to an Incomplete status and a notification will be sent to the approving employee, stating – ‘No Approver Found’.

Employee/Supervisor Relationship Setup Example

For this example Senior Manager is the manager of Junior Buyer and Group Manager is the manager of Senior Manager.

Employee	Is Managed by	Approval Limit
Junior Buyer	Senior Manager	50.00
Senior Buyer	Group Manager	100.00
Group Manager		Unlimited

Employee/Supervisor Example One:

The Forward Method is set to Hierarchy on the Document Type form.

a. Junior Buyer raises a purchase order that has a total value of 150.00.
b. The purchase order is then submitted for approval.
c. As Junior Buyer does not have a high enough approval limits, the purchase order is automatically forwarded to Senior Manager (because Senior Manager is Junior Buyer's supervisor as defined on the Employee form)
d. Senior Manager responds to the approval notification for this purchase order.
e. If Senior Manager selects "Approve", the purchase order is automatically forwarded on to the Group.Manager as Senior Manager does not have a high enough approval limit.
f. The purchase order appears in the notification screen for Group Manager where it can be approved or rejected.

Employee/Supervisor Example Two:

The Forward Method is changed to Direct.

a. Junior Buyer raises another purchase order with a total value of 150.00.
b. The purchase order is then submitted for approval.
c. As neither Junior Buyer or Senior Manager have a high enough approval limit, the purchase order is sent directly to Group Manager because Group Manager is Senior Manager's supervisor as defined on the Employee form and Senior Manager is Junior Buyer's supervisor.

Position Hierarchies

Position Hierarchies are hierarchies that have a position relationship. Purchasing utilizes positions as a roadmap to determine how and where documents will be routed once the approval process has been initiated. It is first necessary to have created all positions that are going to be used in the system. Once all positions have been created, it is necessary to build the position hierarchy.
Each position has approval limits, so when a purchase order exceeds the limits of the position, the purchase order is forwarded onto the next position in the Hierarchy.
The hierarchy for positions is defined on the Position Hierarchy form. Purchasing does not check for the primary checkbox on Position Hierarchy form. When this setup is complete or is changed, the Fill Employee Hierarchy concurrent program must be run for the new hierarchy to come into effect. You must set up Positions if you plan to use either security or approval hierarchies.

Position Hierarchy Setup Example

For the following two examples we will use the following Approval Hierarchy. The name of the hierarchy is "Buyer Approval Hierarchy".

Employee Position	Manager Position	Approval Limit
Junior Buyer	Senior Buyer	50.00
Senior Buyer	Chief Buyer	100.00
Chief Buyer		Unlimited

 

Approval Example One

On the Document Type form Forward Method is set to Hierarchy and Default Hierarchy is set to Buyer Approval Hierarchy.

a. Junior Buyer raises a purchase order that has a total value of 150.00.
b. The purchase order is then submitted for approval.
c. As Junior Buyer does not have a high enough approval limit, the purchase order is automatically forwarded to Senior Buyer because it is the next position in the hierarchy.
d. Senior Buyer responds to the approval notification for the purchase order.
e. If Senior Buyer selects "Approve", the purchase order is automatically forwarded to Chief Buyer because Senior Buyer does not have a high enough approval limit.
f. The purchase order notification appears in the notification screen for Chief Buyer where it can be approved or rejected.

Approval Example Two

On the Document Type form The Forward Method is changed to Direct and the Default Hierarchy remains unchanged.

a. Junior Buyer raises another purchase order with a total value of 150.00.
b. The purchase order is then submitted for approval.
c. As neither Junior Buyer nor Senior Buyer has a high enough approval limit, the purchase order is sent directly to Chief Buyer for approval.

Approval Setup

Document Types

Forwarding Method:

The forwarding method is set under document types. This field has two options that apply regardless as to whether you use an Approval Hierarchy or an Employee/Supervisor relationship.

Direct: the document will pass to the next position or supervisor in the hierarchy who has enough authority to approve the document.

Hierarchy: the document will pass to the next person in the hierarchy regardless as to whether that position or supervisor has enough approval authority to approve the document.

Navigation: Purchasing Responsibility -> Setup -> Purchasing -> Document Types

a. From the list of values choose the purchasing document you want to assign the forwarding method to.
b. In the field ‘Forward Method’ choose Hierarchy or Direct and save your work.

Default Hierarchy

In the screenshot above we additionally see the ‘Default Hierarchy’ set to Materials. When choosing the action of 'Approve' for a document, if a Forward-To person is not defined and the person taking action does not have sufficient approval authority, the default hierarchy is first searched by the employee attempting the approval.

The Default Hierarchy option will only appear on the Document Type form if the option Use Approval Hierarchies is selected as shown in the section Enable the Hierarchy Method above. The Default Hierarchy field has a list of values. This list is derived from the hierarchies created using the Position Hierarchy form which will be discussed under the Position Hierarchies section of this document.

The Default Hierarchy is the one that will be used by the approval process unless the person who submits the document for approval changes it in the Approval Modal form. But, the hierarchy can only be changed on the Approval Modal form if the attribute ‘Can Change Approval Hierarchy’ (additionally shown in the screenshot above) is checked on the Document Type form.

Note: it is imperative that the low-end users (those with little approval authority) be present in this default hierarchy so the next Forward-To approver can be found.

User Setup

Regardless if Approval (Position) or Employee/Supervisor hierarchies are used, there are some basic setups required for the approvers:

Step 1: Create the employee record:

Go to the People form

Navigation if HR is fully installed: HR Responsibility > People > Enter and Maintain.
Navigation if HR is shared: Purchasing Responsibility > Setup > Personnel > Employees

a. Either query the employee by name or if the employee record has not been entered, enter the required detail.
b. If e-mail notifications are to be sent then enter the users email address in the Email field in the Office Details tab.

c. Choose the Assignment button
d. Assign a Job if using Employee/Supervisor or Job and Position if using Approval Hierarchies.

Note: For information on creating jobs or positions see the Oracle Purchasing User’s Guide, section ‘Define Human Resource key Flexfields (Required)’.

e. If Employee/Supervisor is used the Supervisor must be assigned (unless this approver is the last approver in the hierarchy chain). Save your work.

Step 2: Create the User record:

Go to the Users form

Navigation: System Administrator -> Security -> User -> Define

a. If the user has already been entered then query the user in the User Name field. If the user has not been entered fill in the required information and link the human resources record in the Person field.
b. If e-mail notifications are to be sent ensure that the e-mail field is populated. This information will default from the e-mail address entered in the human resources record above.
c. Add the responsibilities needed for the user. Save your work.

Step 3: Setup the user as a Buyer:

Go to the Buyers form:

Navigation: Purchasing Responsibility -> Setup -> Personnel -> Buyers

a. Enter the Buyer name and Effective From date. Category and Ship-To are not required.
b. Save your work.

Note: If the user is an off-line approver it is not required to enter the user as a Buyer here.

Step 4: Run the Fill Employee Hierarchy process if using Approval Hierarchies:

Go to the Submit Requests form:

Navigation: Purchasing Responsibility -> Reports -> Run

a. Choose the Single Request ‘Fill Employee Hierarchy’.
b. Submit the request and make sure it completes successfully from View -> Requests.

Note: It is required to run this report if creating or making changes to the Position hierarchy. It is not required to run this report if using Employee/Supervisor hierarchy.

Approval Assignment:

Once the Approver’s position or job is assigned in the HR record it is necessary to assign the Approval Group for the document type.

Go to the Assign Approval Groups form:

Navigation: Purchasing Responsibility -> Setup -> Approvals -> Approval Assignments

a. From the list of values choose the position (Approval Hierarchies) or job (Employee/Supervisor).
b. Save your work.

There are 6 document types which can be assigned to approval groups, if necessary. It is also possible to assign multiple approval groups for document types if different approval limits are needed. In this example the same Approval Group is assigned to all document types.

Approval Groups:

Next it is necessary to set the rules for the Approval Groups.

Go to the Approval Groups form:

Navigation: Purchasing Responsibility -> Setup -> Approvals -> Approval Groups

a. From the list of values choose the Approval Group seen in the previous Approval Assignment form.
b. Assign at least one Document Total and one Account Range. Save your work.

In the screenshot below we see there is an unlimited Amount Limit and account range for approval. For more information on assigning approval rules see Note 1107338.1 ‘How to Verify that Document Charge Account and Approval Groups Setup is Valid in Order to Prevent no Approver Found’.

What articles, white papers, or manuals should I read for more information on Approval Hierarchies in Oracle Purchasing?

Note 293315.1 11.5.10 FAQ for Approvals Management (AME) Integration For iProcurement and Purchasing
Note 396808.1 Oracle Approvals Management Documentation Resources, Release 12
Note 395405.1 Oracle HRMS Documentation Resources, Release 12
Oracle Purchasing User's Guide, Release 11.5.x
Oracle Purchasing User's Guide, Release 12