Enterprise Sys Procurement Process

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Procurement

Processes

EGN 5620 Enterprise Systems ConfigurationFall, 2012


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Procurement Processes

SAP Implementation



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SAP AG - University Alliances and

The Rushmore Group, LLC 2008. All

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Business Process Integration

Rules

FI

MM

SD

FI SDMM


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Business Process Integration

Purchase Process


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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


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Rules (review)

Material Management Fiscal Periods

Account Groups

Material Types

Plant Parameters

Purc./Rec./Inv.

Tolerances

Automatic Account

Assignment

Reservations Material Group

Loading Group


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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


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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)


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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


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Create & Save Purchase Order


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Purchase Order in SAP

Three sections in apurchase order: Header

Item overview

Line item


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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


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Purchase Order Structure:Header

Header - information specific to the entirepurchase order

Vendor

Purchase organization data Condition (total purchase price)

Partner

Payment process

Status


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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


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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


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Purchase Order: Output Format

Printed and mailed

E-mail

Electronic Data Interchange (EDI)

Faxed (hardcopy or electronic) eXtensible Markup Language (XML)


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Search Purchase Orders

You can search for the purchase ordernumber with Material number,

Vendor number, etc.


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MM: Goods Receipt

Purchase

Order

45......01

Vendor

Notify Vendor

ShipmentReceipt


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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


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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


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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


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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.


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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)


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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


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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


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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)


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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


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3-Way Match for Payment

Purchase

Order

Goods

Receipt

Invoice

Receipt

Debit Credit

Payment

Program

Verification


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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 -


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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


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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


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Invoice Receipt ReconciliationAccount

Amount owed is

assigned and transferred to

vendor account payable

Invoice receipt


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Invoice Payment

Selects invoices for payment based on thepayment terms in the vendor master orpurchase order

Generates payment for released invoices Updates accounting information


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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


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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


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Vendor Payment

Amount owed is paid to

vendor and account payable

is reduced

Bank


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PEN, Inc.


Procurement Processes


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3

600

C_ _ _

P_ _ _

P_ _ _

xxx


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Check PO History (ME23)

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Check PO History (continued)

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Check Inventory

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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

Enterprise Sys Procurement Process

Documents

Transcript of Enterprise Sys Procurement Process