7/27/2019 Enterprise Sys Procurement Process
1/42
Procurement
Processes
EGN 5620 Enterprise Systems ConfigurationFall, 2012
7/27/2019 Enterprise Sys Procurement Process
2/42
Procurement Processes
SAP Implementation
EGN 5620 Enterprise Systems ConfigurationFall, 2012
7/27/2019 Enterprise Sys Procurement Process
3/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 3
Business Process Integration
Rules
FI
MM
SD
FI SDMM
7/27/2019 Enterprise Sys Procurement Process
4/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 4
Business Process Integration
Purchase Process
7/27/2019 Enterprise Sys Procurement Process
5/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 5
Rules (review)
Rules define the parameters for MasterData and Transactions
Rules determine functionality for Master
Data and Transactions Rules are relatively fixed
Rules change, when corporate policychanges
7/27/2019 Enterprise Sys Procurement Process
6/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2007. All
rights reserved. 6
Rules (review)
Material Management Fiscal Periods
Account Groups
Material Types
Plant Parameters
Purc./Rec./Inv.
Tolerances
Automatic Account
Assignment
Reservations Material Group
Loading Group
7/27/2019 Enterprise Sys Procurement Process
7/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 7
Transaction Data (review)
Transaction data are application data; eachtransaction is dynamic and unique, unlikemaster data and organization data whichdo 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 businessactivities
7/27/2019 Enterprise Sys Procurement Process
8/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 8
Purchasing in SAP R/3 (review) The purchasing process resides in the Materials
Management (MM) module of SAP R/3 as well asthe Finance (FI) module
Master data for the purchasing process exists inthe (MM) and (FI) modules
The purchasing process may interface with themodules below: Production Planning (to plan for production),
Quality Management (to check quality at receipt), and
Warehouse Management (to put away)
7/27/2019 Enterprise Sys Procurement Process
9/42
January 2008 SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rightsreserved. 9
Procurement Process (Procure-to-Pay)
Purchase
Requisition
Payment
to Vendor
NotifyVendor
Vendor
ShipmentInvoice
ReceiptGoods
Receipt
Purchase
Order
3-WayMatch
7/27/2019 Enterprise Sys Procurement Process
10/42
Create & Save Purchase Order
7/27/2019 Enterprise Sys Procurement Process
11/42
Purchase Order in SAP
Three sections in apurchase order: Header
Item overview
Line item
7/27/2019 Enterprise Sys Procurement Process
12/42
Purchase 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
7/27/2019 Enterprise Sys Procurement Process
13/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 13
Purchase Order Structure:Header
Header - information specific to the entirepurchase order
Vendor
Purchase organization data Condition (total purchase price)
Partner
Payment process
Status
7/27/2019 Enterprise Sys Procurement Process
14/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 14
Purchase Order Structure:Line 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
7/27/2019 Enterprise Sys Procurement Process
15/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 15
Purchase Order Structure:Item Details
Material data for the item Quantities/weights
Delivery schedule
Invoice
Conditions (Purchasing price for the item)
Delivery address
Confirmation
Condition control Subcontracting
7/27/2019 Enterprise Sys Procurement Process
16/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 16
Purchase Order: Output Format
Printed and mailed
Electronic Data Interchange (EDI)
Faxed (hardcopy or electronic) eXtensible Markup Language (XML)
7/27/2019 Enterprise Sys Procurement Process
17/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 17
Search Purchase Orders
You can search for the purchase ordernumber with Material number,
Vendor number, etc.
7/27/2019 Enterprise Sys Procurement Process
18/42
MM: Goods Receipt
Purchase
Order
45......01
Vendor
Notify Vendor
ShipmentReceipt
7/27/2019 Enterprise Sys Procurement Process
19/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 19
Goods 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
7/27/2019 Enterprise Sys Procurement Process
20/42
Material Movements
When a goods movement takes place it isrepresented by a Movement Type Movement types are three-digit keys used torepresent a movement of goods101 goods receipt into warehouse
102 - reversal of goods receipt for purchaseorder into warehouse/stores
103 goods receipt into GR blocked stock122 return delivery to vendor
501 - receipt w/o purchase order intounrestricted-use stock
7/27/2019 Enterprise Sys Procurement Process
21/42
Goods Receipt
Goods receipt is a goods movementactivity in which we accept goods into oursystem.
If materials are delivered against a
purchase order we will reference thatorder 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
7/27/2019 Enterprise Sys Procurement Process
22/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 22
Goods 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 goodsmovement posting uses the special stock types: sales orderstock 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 purchaseorder history.
Note: If goods receipt is being posted into a storage location where
data does not yet exist for the material, SAP automaticallycreates a storage location data in the material master record.
7/27/2019 Enterprise Sys Procurement Process
23/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 23
Goods Receipt Effects
Purchase Order (PO) history and PurchaseOrder (PO) updated
Material Master - stock and value updated
Notification of goods receipt issued(optional)
Transfer request to the WarehouseManagement module (if active)
7/27/2019 Enterprise Sys Procurement Process
24/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 24
Goods Receipt Effects(continued)
Material and financial documents createdand/or updated
Stock and consumption accounts updated
Inspection notification in the QualityManagement (QM) module - if active
7/27/2019 Enterprise Sys Procurement Process
25/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 25
Goods Receipt Account Postings
Inventory account is debited at standardprice
Goods Receipt/Inventory Receipt (GR/IR)
clearing account is credited at purchaseorder price
Price difference account is debited(credited) with difference between
standard price and purchase order price
7/27/2019 Enterprise Sys Procurement Process
26/42
Goods Receipt Account posting
Purchase requisition
Purchase orderMaterials Management (MM)
and Financial Accounting (FI)via automatic account
assignment
Goods receipt
No impact on
Financial Accounting (FI)
7/27/2019 Enterprise Sys Procurement Process
27/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 27
Invoice Receipt ProcessTasks: 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 amountto be paid
Simulate invoice posting
Post the invoice in SAP
7/27/2019 Enterprise Sys Procurement Process
28/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 28
3-Way Match for Payment
Purchase
Order
Goods
Receipt
Invoice
Receipt
Debit Credit
Payment
Program
Verification
7/27/2019 Enterprise Sys Procurement Process
29/42
Invoice 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 warningor 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 -
7/27/2019 Enterprise Sys Procurement Process
30/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 30
Invoice Verification - 3-way match
Matches the vendors invoice to the
purchase order and the goods receipt (3rdpart of 3-way match)
Matches price and quantity Updates the purchase order and its
history
Updates accounting information
7/27/2019 Enterprise Sys Procurement Process
31/42
Financial effects of Invoice Posting
When an invoice is posted, SAP shifts theliability
From the Goods Receipt/Invoice Receiptaccount (for the purchase order)
To the vendor accountUpon posting, SAP:
Updates the Purchase Order
Updates the Material Master
Creates an Accounting Document
Initiates the payment process withinFinancial Accounting
7/27/2019 Enterprise Sys Procurement Process
32/42
Invoice Receipt ReconciliationAccount
Amount owed is
assigned and transferred to
vendor account payable
Invoice receipt
7/27/2019 Enterprise Sys Procurement Process
33/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 33
Invoice Payment
Selects invoices for payment based on thepayment terms in the vendor master orpurchase order
Generates payment for released invoices Updates accounting information
7/27/2019 Enterprise Sys Procurement Process
34/42
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 34
Accounts Payable SettlementProcess
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 thetransaction
7/27/2019 Enterprise Sys Procurement Process
35/42
Payment to VendorCan be done automatically or manually
Post Outgoing Payment vs. Payment ProgramElements 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
7/27/2019 Enterprise Sys Procurement Process
36/42
Vendor Payment
Amount owed is paid to
vendor and account payable
is reduced
Bank
7/27/2019 Enterprise Sys Procurement Process
37/42
PEN, Inc.
EGN 5620 Enterprise Systems ConfigurationFall, 2012
Procurement Processes
7/27/2019 Enterprise Sys Procurement Process
38/42
3
600
C_ _ _
P_ _ _
P_ _ _
xxx
7/27/2019 Enterprise Sys Procurement Process
39/42
Check PO History (ME23)
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 39
7/27/2019 Enterprise Sys Procurement Process
40/42
Check PO History (continued)
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 40
7/27/2019 Enterprise Sys Procurement Process
41/42
Check Inventory
January 2008
SAP AG - University Alliances and
The Rushmore Group, LLC 2008. All
rights reserved. 41
7/27/2019 Enterprise Sys Procurement Process
42/42
Exercises: (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
Top Related