Egn 5620 enterprise_sys_procurement process fall 2012

ProcurementProcurement
ProcessesProcesses
EGN 5620 Enterprise Systems ConfigurationEGN 5620 Enterprise Systems Configuration
Fall, 2012Fall, 2012

Procurement ProcessesProcurement Processes
SAP ImplementationSAP Implementation

January 2008January 2008
© SAP AG - University Alliances and© SAP AG - University Alliances and
The Rushmore Group, LLC 2008. AllThe Rushmore Group, LLC 2008. All
rights reserved.rights reserved. 33
Business Process IntegrationBusiness Process Integration
FI
MM
SD
Rules
FI
MM
SD
MasterData
FI
MM
SD
FI SDMM

Business Process IntegrationBusiness Process Integration
Purchase Process

Rules (review)Rules (review)
Rules define the parameters for Master
Data and Transactions
Rules determine functionality for Master
Data and Transactions
Rules are relatively fixed
Rules change, when corporate policy
changes

Rules (review)Rules (review)
Material Management
• Fiscal Periods
• Account Groups
• Material Types
• Plant Parameters
• Purc./Rec./Inv.
Tolerances
• Automatic Account
Assignment
• Reservations
• Material Group
• Loading Group

Transaction Data (review)Transaction Data (review)
Transaction data are application data; each
transaction is dynamic and unique, unlike
master data and organization data which
do not change very often.
Transaction data use (is comprised of)
organization data, master data, and rules
Transaction data includes internal and
external exchanges that describe business
activities

Purchasing in SAP R/3 (review)Purchasing in SAP R/3 (review)
The purchasing process resides in the Materials
Management (MM) module of SAP R/3 as well as
the Finance (FI) module
Master data for the purchasing process exists in
the (MM) and (FI) modules
The purchasing process may interface with the
modules below:
◦ Production Planning (to plan for production),
◦ Quality Management (to check quality at receipt), and
◦ Warehouse Management (to put away)

© SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights© SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights
reserved.reserved. 99
Procurement Process (Procure-to-Pay)
Purchase
Requisition
Payment
to Vendor
Notify
Vendor
Vendor
Shipment
Invoice
Receipt
Goods
Receipt
Purchase
Order
3-Way
Match

Create & Save Purchase OrderCreate & Save Purchase Order

PurchasePurchase Order in SAPOrder in SAP
Three sections in a
purchase order:
◦ Header
◦ Item overview
◦ Line item

Purchase Order StructurePurchase Order Structure
Purchase
Order
45......01
Header
Vendor Company
Purch. Org. Date
Purch. Org. group PO Price
Item Overview
Materials Price/UofM
Quantities Currency
Delivery Date Plant
Line Item
PO History Tolerances
Line Price Storage
Delivery Schedule

Purchase Order Structure:Purchase Order Structure:
HeaderHeader
Header - information specific to the entire
purchase order
◦ Vendor
◦ Purchase organization data
◦ Condition (total purchase price)
◦ Partner
◦ Payment process
◦ Status

Line ItemsLine Items
Line item – purchasing information
required for the item
◦ Item category
◦ Material id and description
◦ Materials or services quantity
◦ Delivery date
◦ Net price
◦ Currency
◦ Plant
◦ Storage location
◦ Measurement unit

Item DetailsItem Details
◦ Material data for the item
◦ Quantities/weights
◦ Delivery schedule
◦ Invoice
◦ Conditions (Purchasing price for the item)
◦ Delivery address
◦ Confirmation
◦ Condition control
◦ Subcontracting

Purchase Order: Output FormatPurchase Order: Output Format
Printed and mailed
E-mail
Electronic Data Interchange (EDI)
Faxed (hardcopy or electronic)
eXtensible Markup Language (XML)

Search Purchase OrdersSearch Purchase Orders
You can search for the purchase order
number with
◦ Material number,
◦ Vendor number, etc.

MM: Goods ReceiptMM: Goods Receipt
Purchase
Order
45......01
Vendor
Notify Vendor
ShipmentReceipt

Goods Receipt – Movement TypesGoods Receipt – Movement Types
Movement types - stock transactions
◦ Goods receipt
◦ Goods issue
◦ Stock transfer
Movement type determines which
◦ Quantity fields are updated
◦ Stock types are updated
◦ General Ledger (G/L) stock or consumption
accounts are updated
◦ Fields are displayed during document entry

Material MovementsMaterial Movements
When a goods movement takes place it is
represented by a Movement Type
◦ Movement types are three-digit keys used to
represent a movement of goods
101 – goods receipt into warehouse
102 - reversal of goods receipt for purchase
order into warehouse/stores
103 – goods receipt into GR blocked stock
122 – return delivery to vendor
501 - receipt w/o purchase order into
unrestricted-use stock

Goods ReceiptGoods Receipt
Goods receipt is a goods movement
activity in which we accept goods into our
system.
If materials are delivered against a
purchase order we will reference that
order and SAP can
◦ retrieve data from the PO for us to verify:
material, quantity, and so on
◦ Update inventory G/L account automatically
◦ Update purchase order history with the receipt
◦ Update physical inventory

Goods Receipt – DestinationsGoods Receipt – Destinations
Goods receipt into (destined for) the warehouse
◦ SAP increases total valuated stock by the delivered quantity.
◦ SAP updates the stock value at the same time.
Goods receipt into consumption
◦ SAP only updates the consumption statistics in the material
master record
◦ SAP does not update the consumption statistics if the goods
movement posting uses the special stock types: sales order
stock type and project stock.
Goods receipt posted into blocked stock
◦ SAP maintains the same stock level.
◦ SAP only records it in good receipt block stock of the purchase
order history.
Note:
◦ If goods receipt is being posted into a storage location where
data does not yet exist for the material, SAP automatically
creates a storage location data in the material master record.

Goods Receipt – EffectsGoods Receipt – Effects
Purchase Order (PO) history and Purchase
Order (PO) updated
Material Master - stock and value updated
Notification of goods receipt issued
(optional)
Transfer request to the Warehouse
Management module (if active)

Goods Receipt – EffectsGoods Receipt – Effects
(continued)(continued)
Material and financial documents created
and/or updated
Stock and consumption accounts updated
Inspection notification in the Quality
Management (QM) module - if active

Goods Receipt – Account PostingsGoods Receipt – Account Postings
Inventory account is debited at standard
price
Goods Receipt/Inventory Receipt (GR/IR)
clearing account is credited at purchase
order price
Price difference account is debited
(credited) with difference between
standard price and purchase order price

Goods Receipt – Account postingGoods Receipt – Account posting
Purchase requisition
Purchase order
Materials Management (MM)
and Financial Accounting (FI)
via automatic account
assignment
Goods receipt
No impact on
Financial Accounting (FI)

Invoice Receipt ProcessInvoice Receipt Process
Tasks:
Engage in 3-way match to validate the invoice.
Enter PO number to retrieve the PO and view
(verify)
◦ Open dollar amount.
◦ Quantity,
◦ Price,
◦ receiving date,
◦ Vendor name
Enter the invoice number and the dollar amount to
be paid
Simulate invoice posting
Post the invoice in SAP

3-Way Match for Payment3-Way Match for Payment
Purchase
Order
Goods
Receipt
Invoice
Receipt
Debit Credit
Payment
Program
Verification

Invoice Processing - 3-Way MatchInvoice Processing - 3-Way Match
Incoming Invoices are reference against a Purchase Order to
verify their content, prices, and arithmetic.
If discrepancies arise between the purchase order or goods
receipt and the invoice the system with generate a warning
or an error
◦ Depending on system configuration the difference could cause the
system to Block the Invoice
Purchase order
- Target quantity -
- Target price -
Goods receipt
- Actual quantity -
Invoice receipt
- Actual price -

Invoice Verification - 3-way matchInvoice Verification - 3-way match
Matches the vendor’s invoice to the
purchase order and the goods receipt (3rd
part of 3-way match)
Matches price and quantity
Updates the purchase order and its
history
Updates accounting information

Financial effects of Invoice PostingFinancial effects of Invoice Posting
When an invoice is posted, SAP shifts the
liability
◦ From the Goods Receipt/Invoice Receipt
account (for the purchase order)
◦ To the vendor account
Upon posting, SAP:
◦ Updates the Purchase Order
◦ Updates the Material Master
◦ Creates an Accounting Document
◦ Initiates the payment process within
Financial Accounting

Invoice Receipt ReconciliationInvoice Receipt Reconciliation
AccountAccount
Amount owed is
assigned and transferred to
vendor account payable
Invoice receipt

Invoice PaymentInvoice Payment
Selects invoices for payment based on the
payment terms in the vendor master or
purchase order
Generates payment for released invoices
Updates accounting information

Accounts Payable SettlementAccounts Payable Settlement
ProcessProcess
Determines:
◦ Which open items to be paid
◦ When they will be paid
◦ Which bank to make payment
◦ Payment medium
◦ Who will get paid
Payment process creates a financial
accounting document to record the
transaction

Payment to VendorPayment to Vendor
Can be done automatically or manually
◦ Post Outgoing Payment vs. Payment Program
Elements of the Payment Transaction:
◦ Payment Method
◦ Bank from which they get paid
◦ Items to be Paid
◦ Calculate Payment Amount
◦ Print Payment Medium
Process will create a financial accounting
document to record the transaction

Vendor PaymentVendor Payment
Amount owed is paid to
vendor and account payable
is reduced
Bank

PEN, Inc.PEN, Inc.
Procurement Processes

33
600
C_ _ _
P_ _ _
P_ _ _
xxx

Check PO History (ME23)Check PO History (ME23)

Check PO History (continued)Check PO History (continued)

Check InventoryCheck Inventory

Exercises:Exercises: (Due date 10/15/2012)(Due date 10/15/2012)
100. Create a Purchase order for Slick Pens
101. Create a purchase order for premier pens
102. Create a purchase order for Promotions Ltd.
103. Create receipts for the purchase orders
104. Create an invoice receipts from vendors
105. Post payments to vendors
106. Display vendor line items
107. Create purchase outline agreement (contract) for Stock item

Egn 5620 enterprise_sys_procurement process fall 2012

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Egn 5620 enterprise_sys_procurement process fall 2012

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