MM Purchase Requisition

Materials Management Process -The Purchase Requisition

Materials Management Process-The Purchase Requisition

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What This Course Is About This course demonstrates the use of Purchase Requisitions in the Purchasing process. Purchasing is a component of Materials Management (MM). The Materials Management (MM) module is fully integrated with the other modules of the SAP System and supports all the phases of materials management: materials planning and control, purchasing, goods receiving, inventory management, and invoice verification. The SAP Purchasing component (MM-PUR) is responsible for the external procurement of materials and services. A Purchase Requisition is a request or instruction to Purchasing to procure a quantity of a material or service so that it is available at a certain point in time. The purchase requisition is created when a need for a particular good or service is identified. Who Should Attend This Course

• End users with the Agency Procurement Technician or the Agency Procurement Management role should attend this course.

• Agency/State Procurement Specialists (users that create purchase orders) will find this course beneficial if they wish to learn the first step (purchase requisitions) of the procurement process.

What You Should Know Before Coming to Class Before coming to class, you should know AASIS Basic Navigation or be an experienced user of AASIS. In addition, you should be familiar with basic accounting concepts. What You Will Learn from This Course This course provides a basic overview of the business processes related to the creation and processing of purchase requisitions using the materials management module in AASIS. You will learn to correctly create purchase requisitions in AASIS for goods and services requested by your agency. You will learn about the accounting and budgeting processes for purchase requisitions. You will learn about the reporting tools available in AASIS and how to use them to locate data associated with purchase requisitions. How This Course Is Organized The Materials Management Process -The Purchase Requisition manual provides the step-by-step processes in creating and approving purchase requisitions up to the point of purchase order creation.


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Legend - The following icons are used often. We will use the bracketed descriptions throughout the course. When you see the bracketed description either click the icon or press the keystroke combination. <Enter> or - Press the “Enter” key on the keyboard or click the “Green check “icon. (No keystroke function.) <Save—Ctrl+S> - Click the “Save” icon or press Ctrl+S. <Other Requisition—Shift+F5> - Click the “Other Requisition” icon or press Shift+F5. <Execute—F8> -Click the “Execute” icon or press “F8”. <Back—F3> -Click the “Back” icon or press “F3”. <Display next item—F8> -Click the “Display next item” icon or press “F8”. <Display previous item—F7> -Click the “Display previous item” icon or press “F7”.


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TABLE OF CONTENTS:

MATERIALS MANAGEMENT PROCESS -THE PURCHASE REQUISITION ......................... 1

CHAPTER 1 .......................................................................................................................................... 6

OVERVIEW .......................................................................................................................................... 6

MATERIALS MANAGEMENT PROCESS -THE PURCHASE REQUISITION ......................... 6

VENDOR INVOICE CLEAN-UP ........................................................................................................ 6

HOW DOES AASIS OPERATE? ............................................................................................................ 7 HOW IS AASIS ORGANIZED? .............................................................................................................. 7 WHAT IS A BUSINESS PROCESS? ......................................................................................................... 8 WHAT IS THE PROCUREMENT CYCLE? ................................................................................................. 8

CHAPTER 2 ........................................................................................................................................ 10

MASTER DATA, GLOBAL SETTINGS, INTEGRATION AND INTERNAL CONTROLS .... 10

MATERIALS MANAGEMENT PROCESS -THE PURCHASE REQUISITION ....................... 10

VENDOR INVOICE CLEAN-UP ...................................................................................................... 10

WHAT IS MASTER DATA? ................................................................................................................. 11 WHAT ARE GLOBAL SETTINGS? ........................................................................................................ 15 WHAT IS INTEGRATION? ................................................................................................................... 24 WHAT ARE INTERNAL CONTROLS? ................................................................................................... 24 INTERNAL CONTROLS ........................................................................................................................ 24 SECURITY ROLES ............................................................................................................................... 24 SEGREGATION OF DUTIES .................................................................................................................. 25

CHAPTER 3 ........................................................................................................................................ 26

ACCOUNTING AND BUDGETING LOGISTIC TRANSACTIONS ........................................... 26



ACCOUNTING FOR LOGISTIC TRANSACTIONS .................................................................................... 27 WHAT HAPPENS WHEN GOODS ARE PURCHASED? ........................................................................... 27 WHAT HAPPENS WHEN GOODS ARE RECEIVED? .............................................................................. 27 WHAT HAPPENS WHEN THE INVOICE IS ENTERED? ........................................................................... 28 BUDGETING FOR LOGISTIC TRANSACTIONS ....................................................................................... 29 WHAT HAPPENS WHEN THE PURCHASE REQUISITION IS ENTERED? .................................................. 29 WHAT IS THE 3-WAY MATCH? .......................................................................................................... 30

CHAPTER 4 ........................................................................................................................................ 32

THE VENDOR MASTER AND MATERIAL MASTER RECORDS ........................................... 32



WHAT ARE VENDOR MASTER RECORDS? ......................................................................................... 33 TO DISPLAY THE VENDOR MASTER RECORD, USE TRANSACTION XK03. ............................................ 35 WHAT ARE MATERIAL MASTER RECORDS? ...................................................................................... 42 TO DISPLAY THE MATERIAL MASTER RECORD, USE TRANSACTION MM03. ........................................ 43

CHAPTER 5 ........................................................................................................................................ 51

TIMESAVING TIPS ........................................................................................................................... 51


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HOW TO SET THE “PO PRICE” FIELD ON THE VALUATION TAB. .......................................................... 52 SET YOUR DEFAULT VALUES ............................................................................................................ 54 THE COPY ITEM FEATURE ................................................................................................................. 59 THE” LAYOUT SETTINGS” FEATURE .................................................................................................. 61

CHAPTER 6 ........................................................................................................................................ 66

CREATING A PURCHASE REQUISITION ................................................................................... 66



TRANSACTION ME51N ..................................................................................................................... 67 HOW DO I ATTACH A DOCUMENT TO A PURCHASE REQUISITION? .................................................. 82 HOW DO I RETRIEVE THE ATTACHED DOCUMENT? .......................................................................... 84

CHAPTER 7 ........................................................................................................................................ 87

VIEWING THE PURCHASE REQUISITION ................................................................................ 87



DISPLAY A PURCHASE REQUISITION – TRANSACTION ME53N .......................................................... 88

CHAPTER 11 VIEWING THE DOCUMENTS ..............................................................................102

HOW DO I VIEW THE FM DOCUMENT? ............................................................................................104 HOW DO I VIEW THE CONTROLLING DOCUMENT? ...........................................................................105

CHAPTER 8 .......................................................................................................................................107

SELECTING APPROVERS .............................................................................................................107

MATERIALS MANAGEMENT PROCESS -THE PURCHASE REQUISITION ......................107

VENDOR INVOICE CLEAN-UP .....................................................................................................107

APPROVAL/RELEASE PROCESS .........................................................................................................108 WHAT IS WORKFLOW? .....................................................................................................................108 HOW DO I CHOOSE APPROVERS? .....................................................................................................108

CHAPTER 9 .......................................................................................................................................113

DELETING AND CLOSING PURCHASE REQUISITIONS .......................................................113

MATERIALS MANAGEMENT PROCESS -THE PURCHASE REQUISITION ......................113

VENDOR INVOICE CLEAN-UP .....................................................................................................113

HOW DO PURCHASE REQUISITIONS REMAIN OPEN AND CONTINUE TO COMMIT BUDGET? ..............114 ACTUAL BUDGET REPORT -TRANSACTION Y_DEV_80000046 .......................................................114 LIST DISPLAY OF PURCHASE REQUISITIONS – TRANSACTION ME5A ...............................................122 REPORT FOR OPEN PURCHASE REQUISITIONS – TRANSACTION ZOPENREQ ..................................128 CHANGE PURCHASE REQUISITION – TRANSACTION ME52N ............................................................132

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Chapter 1 Overview



Chapter 1 - Overview

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How Does AASIS Operate? The Arkansas Administrative Statewide Information System (AASIS) operates using SAP software that has been customized to meet the business needs of the State of Arkansas. AASIS includes business processes designed for day-to-day operations and its design enables the State to produce accurate financial reporting information.

How Is AASIS Organized? AASIS is organized into modules and sub-modules. A Module is a group of related components that serve complementary functions. A Sub-module is an individual component containing related transactions. The AASIS structure looks something like this: Financials (FI) Module

Sub-modules • Accounts Payable (AP) • Accounts Receivable (AR) • Asset Management (AM) • Cash Management (CM) • Controlling (CO) • Funds Management (FM) • General Ledger (GL) • Projects Systems (PS) • Special Purpose Ledger (SPL)

Materials Management (MM) Module

Sub-modules

• Inventory (INV) • Logistics Invoice Verification (LIV) • Purchasing (PUR)



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Human Capital Management (HCM) Module

Sub-modules

• Benefits • ESS • Organizational Management (OM) • Payroll (PAY) • Personnel Administration (PA) • Time • Training and Events (TE)

What Is A Business Process? A business process is a series of defined procedural steps associated with a specific business function. A complete business process might be contained within a single sub-module, or it might cross sub-modules and modules. Procurement is part of the Materials Management (MM) module. The purchase requisition process is the first step in the Procurement cycle. This course demonstrates the process for creating and troubleshooting the purchase requisition. What is the Procurement Cycle? Purchase Requisition The first step in the procurement cycle is determining a need for a good or service. When a need has been identified, the person with the role of Agency Procurement Technician will create a Purchase Requisition in AASIS. The Department of Finance and Administration recommends using the purchase requisition because it is the start of the procurement process in AASIS prior to further processing. Once the purchase requisition has been created, an end user with the Agency/State Procurement Management role must approve it. Documents Processed from the Purchase Requisition Upon approval, the purchase requisition may be processed into a Request for Quotation (RFQ) which is an invitation extended to a vendor by a purchasing organization to submit a quotation (bid) for the supply of materials or performance of services. The purchase requisition may also be processed directly into a Purchase Order (PO) or Outline Agreement (OA).

PR PO GR IR Payment



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Creating the Outline Agreement or Purchase Order An Outline Agreement is a contract created between the state and a vendor for the intent to purchase an estimated quantity of materials/services for a predefined net price and an estimated target value over an extended period of time. Outline agreements do not commit budgetary funds. The Outline Agreement can be created by referencing a Request for Quotation (RFQ) or a Purchase Requisition. Once created, the OA must go through the approval process. A Purchase Order (PO) identifies specific materials/services to be purchased as well as the negotiated terms, conditions, and pricing. Once created, a PO number is generated by the system. Budget commitments from the purchase requisition are updated in accordance with prices on the Purchase Order. The purchase order also goes through an approval (release) process. The Agency/State Procurement Specialist will process all items approved by the Agency/State Procurement Manager. The purchase order is then printed out and sent to the vendor. Marking Goods and Services for Receipt with Transaction MIGO The next step in the procurement cycle is entering the Goods Receipt using the MIGO transaction. The goods receipt is posted when you have received goods and/or services that have been ordered using a purchase order. Once the goods receipt is posted, a material number is created. The budget amount is not affected by the GR and remains a commitment. The General Ledger accounts are automatically updated by the value of the receipt. The General Ledger accounts include assets, liabilities, fund balance, revenues, expenses and other sources and uses. The goods receipt automatically updates the purchase order. The purchase order history is recorded on the PO and the item is closed once the entire quantity is received or the quantity received is within set tolerances. Entering the Logistics Invoice Verification (MIRO) The final step in the procurement cycle is the Logistics Invoice Verification using the MIRO transaction. Logistics Invoices are linked to the Materials Management module of AASIS and must be used when the invoice being paid was for items received via a system generated purchase order. Though this is an MM process, Accounts Payable personnel perform this transaction. Payment The posted invoice will remain open until it is paid via the payment run. The Payment Program runs Sunday thru Thursday at 8:00 p.m., and the FMF0 program runs each night to change the budgeted commitment to an expense in FM.

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Chapter 2 Master Data, Global Settings, Integration and Internal Controls


Materials Management Process-The Purchase Requisition Chapter 2 – Master Data, Global Settings, Integration and Internal Controls

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In this chapter we explain about Master Data, Global Settings, Integration and Internal Controls, which you will see mentioned throughout this course. You need to understand what they are, how they impact the Materials Management process, and how and why they affect the way you do your job. Master data is central to integration in AASIS and is also part of system internal controls, so we will begin with master data.

What Is Master Data? Master data is information that remains the same over a long period of time, or information that is needed often and in the same form. Master data is also used for deriving additional information, which reduces data entry for end users and facilitates integration and reporting within AASIS between the modules and sub-modules. Because of the derivations, you must understand the connections between master data elements and how they are used in various transactions. Master data consists of the master record, which answers questions such as what it is, who is responsible for it, where it’s located, etc. Master records are identified by a unique alpha, numeric or alpha-numeric code. Some pieces of master data can be used by all end users, while others are more restricted. Each piece of master data has a module or sub-module that “owns” the master record, but most master data is used by multiple sub-modules in transactions. For example, the CO sub-module “owns” a cost center because that is where the master record is created and maintained, but cost centers are used by all FI sub-modules, most MM sub-modules, and even HCM sub-modules. Some of the Master Data elements are: Fund is a seven-character numeric or alpha-numeric code that represents one level of an agency’s fiscal and accounting responsibility, where cash and other financial resources are recorded for the purpose of administering authorized activities. The fund is master data. In accounting terms, a fund is a self-balancing set of books. The debits and credits must be equal, and AASIS allows extensive reporting of revenues, expenses and cash on a Fund basis. In other terms, a fund is similar to a bank account. Each fund has deposits or incoming transfers to increase the cash balance, and payments or outgoing transfers to reduce the cash balance. Funds can be used by agencies to keep track of different funding streams (sources of revenue) or to “separate” cash used for multiple purposes. For example, some agencies receive money from both the State and the Federal government. If they prefer to keep the money separate, they might choose to have two funds – one for the state money and one for the federal money – although this is not necessary.


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There are two types of funds in AASIS: Treasury funds represent monies maintained in the State Treasury. For Treasury funds, the seven-character fund code is alpha-numeric; the first three characters, at least, are letters, and the remaining characters are numbers. Cash funds represent monies maintained in commercial bank accounts. For Cash funds, all seven characters of the fund code are numbers. Funds are “owned” by the FM sub-module and are part of the “budget quad” in AASIS. Agency budgets are created to limit how much an agency can spend based on legal authorizations. AASIS uses four pieces of master data to make up the budget “quad”: fund, funds center, functional area and commitment item, all “owned” by the FM sub-module. Functional Area is a three- or four-character alpha code that represents the high-level Comprehensive Annual Financial Report (CAFR) classifications. Functional areas correspond to the general purpose of the agency (Health and Human Services, Public Safety, Education, Constitutional Office, etc.). Each agency has only one functional area. The functional area is master data. Funds Center is a four-or-five-character alpha-numeric code that represents the agency’s appropriation, or the legal authority to spend certified income, according to the agency’s Appropriation Bill passed by the State Legislature in the most recent regular session. The funds center is master data. General Ledger Account is a 10 digit numeric code used to classify and categorize financial activity within AASIS and represents the line item detail for all financial transactions. The general ledger account is master data. General Ledger accounts (GL accounts) are grouped by category in the AASIS statewide Chart of Accounts. Department of Finance & Administration-Office of Accounting (DFA-OA) adds General Ledger accounts to the Chart of Accounts when the need arises. General ledger accounts are “owned” by the GL sub-module but are used throughout the FI and MM modules. GL Accounts are generic to all state agencies.


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There are six broad categories of GL accounts, each of which serves a different purpose in the financial statements, and each category has a different 10-digit number range:

Account Category Account

Type Number Range

Assets Balance Sheet

1000000000 - 1999999999

Liabilities Balance Sheet

2000000000 - 2999999999

Fund Balance Balance Sheet

3000000000 - 3999999999

Revenues Profit & Loss4000000000 - 4999999999

Expenses Profit & Loss5000000000 - 5999999999

Other Sources and Uses Profit & Loss

6000000000 - 6999999999

NOTE: There is an account category called “Assets”, but we also have what we call “Fixed Assets” in AASIS. “Assets” is a category of GL accounts representing items that increase the financial value or improve the financial position of the State. Examples include cash balances, cash owed to the state, fixed assets (items of value, also referred to as “capital equipment”), investments, etc. Fixed asset accounts are used for recording and tracking individual pieces of equipment, buildings, land, artwork, and other items purchased or constructed by, or donated to, the state. Individual fixed assets are maintained in the Asset Management sub-module, but their balances are summarized and reported in the General Ledger in the 1990000000 – 1999999999 account range in the “Assets” section.

In MM, you will mostly be working with Assets, Expenses and Liabilities. Individual expense accounts are used to classify how your agency spends its money. These accounts, combined with other pieces of master data, allow you to produce reports detailing how much has been spent on cleaning supplies, office supplies, uniforms, services, etc. Liabilities represent obligations – how much your agency owes, and a general idea of what created the obligation. Examples include payroll liabilities, vendor liabilities, bond payment liabilities, etc. One of three liability reconciliation accounts will be assigned to each individual vendor master record.


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A reconciliation account is used to summarize the balances in the individual vendor accounts and report the totals in the General Ledger. There are currently three vendor reconciliation accounts: 2110001000 – Vendor Accounts Payable, which is used for most vendors; 2110002000 – Employee Accounts Payable, which is used for employee vendors (used for travel reimbursements but not payroll); 2110003000 – Due to Other Funds, which is used for State Agency vendors. The liability reconciliation account chosen determines what must be done with the account balance when it comes time to produce the financial statements. Commitment Item is a seven-digit numeric code that represents the broad categories of detailed line items created within all financial transactions. The GL number will derive the commitment item. Commitment items create functional groupings of expenditures and revenues, among other things, within the FM sub-module. Commitment item categories include Maintenance & Operations, Regular Salaries, Extra Help, Matching, Conference & Convention Fees, Professional Services and Capital Outlay. Appropriation bills are specific to the commitment item (“character code”) level. For example, an agency may be authorized to spend no more than $1 million for Regular Salaries, $2 million for M&O, $100,000 for Capital Equipment, etc. Cost Element is the equivalent of the 10-digit GL account and represents the line item details for all revenue and expense financial transactions, except the cost element is “owned” by the CO sub-module and is only used there. Cost elements only exist for GL accounts in the 4000000000 – 6999999999 range, with the exception of some of the Fixed Asset accounts in the 1990000000 – 1999999999 range. The cost element number is the same as the GL account number; for example, GL account 5050002000 is associated with cost element 5050002000. Customer is a business partner to whom the state has provided goods or services in return for payment and is identified by a unique Customer Account number. Customer Master Records are categorized by account groups, and each account group has a unique numeric range of nine digits, depending on the type of customer. The account group is identified by the first or first three digits of the account number. The Special Purpose Ledger module (SPL) does not “own” any master data. SPL is a ledger used for financial statement reporting at the fund level. Anything that posts to the General Ledger automatically posts to the SPL, which means all financial transactions. The difference is that SPL postings include a Fund and Business Area on every line and force each document as a whole to balance, debits and credits, by Fund and Business Area, whereas the General Ledger documents do not.


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What Are Global Settings? Global settings are used like master data, except they are created through configuration by ASC and are not owned by one particular module. Some important examples of global settings for MM users are Company Code, Purchasing Organization (Business Area) and Document Types. Company Code is a three-character alpha code that represents the State’s highest level legal reporting entity. The company code is a global setting. The only Company Code used in AASIS is ARK. Purchasing Organization (Business Area) is a four-digit numeric code representing an organizational unit of the State. It is a global setting. In AASIS, business area represents an agency or division of an agency; each agency has a unique business area code in AASIS. Business area is used for reporting purposes and enables users to produce financial statements by agency. Some transactions require you to enter a business area, while others derive the business area from the cost center. Business area is used by most FI sub-modules, but not all. MM does not use business area (it uses Purchasing Organization instead), and the CO and FM sub-modules have only limited uses for business area. Document Type is a two-character alpha-numeric code that identifies the purpose of the business transaction and is also used to control what you can do within a transaction. For instance, document type RE is always a Vendor Invoice (Logistics Invoice Verification). Sometimes the transaction you choose will determine the document type used, and sometimes you must choose the document type. Understanding the document types is also very useful when executing or reading reports. Document type is often a selection option on reports and can help you narrow the selections and improve the speed of the report. The document types applicable for the Materials Management process are:


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Procurement Document Type Usage

Goods Receipt

Logistics Invoice Verification

NB Req. to PO

NV Req. to OA

PB Req. to Prof. Svc. PO

PV Req. to Prof. Svc. OA

NC Normal QC ( Quote Constitutional Bid)

NQ Normal CB ( Competitive Quote Bid)

NR OSP RFQ (OSP Request for Qualifications)

PB Prof. Svc. CB (Professional Service Quote Bid)

PC ABA Prof. Svc. RFQ (ABA Request for Qualifications)

PR OSP Prof. Svc. RFQ (OSP/PSC Request for Qualifications)

Document Type Description Usage

WE Goods Receipt

Recognize the receipt of goods ordered via the AASIS procurement process


RE Vendor Invoice Logistics Invoice


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Cash Management


ZP Vendor Payment Document

Payment generated via the automatic payment run, either for a Treasury fund or a Cash fund

ZR Bank Clearing

The issued payment has been received by the vendor and submitted to the Treasury or Commercial Bank for redemption


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How Master Data and Global Settings are used in the Purchase Requisition When entering a purchase requisition one important field is the “account assignment category” field. What you enter into that field will indicate the information needed on the Account Assignment tab. K = cost center. This selection will require you to enter a cost center. Cost Center is a six-digit numeric code that serves as a financial data collector for areas of responsibility within an agency. The cost center is master data. An agency’s cost center structure usually reflects the organizational structure of the agency; e.g. at least one unique cost center for each county office, and different cost centers for central administration units. Cost centers are also used to derive other information when used in a transaction. Within AASIS, cost centers enable derivation of fund, funds center, business area and functional area – in other words, most of the budget “quad”. The G/L code is derived from the material master record and may be changed. Cost centers are “owned” by the CO sub-module.


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F = Order. This selection will require you to enter a cost center and an internal order number. Internal Order is (up to) a nine-character alpha-numeric code used to collect the financial data of an agency for reporting purposes. Internal orders are not used to derive other information. Internal orders are “owned” by the CO sub-module.


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P = Project. This selection will require you to enter a cost center and a WBS element. Project Definition – An alpha-numeric code that is the high-level definition of a construction project or grant award. Each project definition contains at least one lower-level WBS element. Project definitions are “owned” by the PS sub-module, but are more commonly associated with the CO sub-module because that is where most of the reporting takes place. WBS Element is an alpha-numeric code that is a component of Project Systems within the CO sub-module. Each WBS element is part of the hierarchical structure of a project definition and is used as a financial data collector to serve the reporting needs of an agency. WBS elements are used in AASIS to record activity against grants or construction projects. Some WBS elements are “real” or non-statistical, which means the fund, funds center and functional area are derived from the WBS element rather than the cost center; non-statistical WBS elements are normally used with construction projects. WBS elements are “owned” by the PS/CO sub-modules.


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A =Asset. This selection will require you to enter an asset number. Asset is a piece of equipment or other non-inventory item - purchased, donated, constructed, or in the process of being constructed - in AASIS. The asset master record includes the useful life of the asset, the cost center to be used for financial information, the value of the asset, etc. The asset class chosen when the asset is created determines which Fixed Asset reconciliation accounts are used in the General Ledger. Each asset has a unique nine-digit number, determined by the number range assigned to the asset class, which is used for tracking and reporting purposes. U = Unknown. U- Unknown: If the unknown account assignment is used the account assignment tab does not appear. There is no budget committed. This category is mostly used for Outline Agreements where the quantity is unknown. Blank- (Leave blank): For plant purchase requisitions for re-stock orders. This account assignment category should be used for the following plants only: 1000 – Physical storage location used by the Department of Human Services. 1300 -- Physical storage location used by ASH - Benton 1350 – Physical storage location used by Arkansas State Hospital.


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Two more pieces of required master data needed on a purchase requisition are the material number and the plant. Material Master Record represents a specific material or service and is assigned a unique number within AASIS. It includes a short material description and its units of measure. All modules in AASIS that will access the material or service for transactional and reporting purposes will use this number. The material master records for non-stock items are only created for plant 9999. The material master record also contains a material group number. This number groups together goods and services by similar characteristics or attributes. A material master represents a good or service which can be procured by authorized plants through the purchasing sub-module in MM. Each material master record includes a suggested GL account for use in purchase orders; however the GL account can be changed when you create the PO but this should not be done on a routine basis. Plants represent an inventory warehouse location; most of the state uses plant 9999, although there are a couple of agencies that have their own plants. Plants are further controlled by purchasing organizations and purchasing groups. Purchasing groups are defined by the agency and can represent one or many individuals, but must be created and maintained within AASIS by ASC staff. Plant codes currently used for storage locations within the State are: 9999 – Reference plant - standard location used within the system. 1000 – (Stocked plant) physical storage location used by the Department of Human Services. 1300 - (Stocked plant) physical storage location used by ASH– (Benton) 1350 – (Stocked plant) physical storage location used by the Arkansas State Hospital. 8888 – Used only by M & R.


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The vendor is not a required field on the purchase requisition, but if entered on the requisition the information will populate into the purchase order once the requisition is referenced. Vendor is an authorized entity from whom the state can purchase goods or services and is identified by a unique Vendor Account number. The Vendor Master Record contains such information as vendor name and address, tax identification number, bank account information, and the reconciliation General Ledger account used for financial reporting. Vendor Master Records are categorized by account groups, and each account group has a unique numeric or alpha-numeric range of two to nine characters, depending on the type of vendor.


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What Is Integration? Several of our business processes are possible because AASIS is “integrated” to allow the transfer of information between the modules and sub-modules without the need to enter the same data multiple times. Integration allows the recording of expenses and payments in such a way that other sub-modules of AASIS can use the information for their own reporting needs. This reporting is made easier by the use of global settings and master data; like the global settings, some master data is agency-specific, but most is not.

What Are Internal Controls? Internal controls are a checks-and-balances system designed into the business process to ensure system security, data integrity and accuracy, and the protection of the assets of the State of Arkansas (fraud prevention). Auditors review the internal controls in AASIS and in your agency to ensure that the financial information posted by your agency, and thus by the State of Arkansas, is reasonably accurate and not likely to lead to misstatement on the statewide financial statements (CAFR). Internal controls are part of every business process within AASIS, but your agency should also have internal control policies and procedures in place for activity that takes place outside of AASIS (i.e. the physical handling of cash).

Internal Controls The primary goals of internal controls in AASIS are: 1) To ensure that no user can perform an entire business process without the knowledge and participation of at least one other person. 2) To prevent users from using master data that does not pertain to their area of responsibility. The MM process enforces internal controls through segregation of duties and master data control via the use of security roles.

Security Roles As an AASIS user, you have security roles assigned to your User ID. These security roles determine which transactions you can and cannot access, thus limiting what you can and cannot do once you get into AASIS. Security roles can also be used to control access to such Global settings and master data as Business Area, Vendor Master Record and Vendor Account.


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Segregation of Duties One person cannot complete the entire MM business process.

• DFA-OSP creates and maintains the Vendor Master Record and the Material Master Record

• One Agency user creates the purchase requisition

• A second Agency user approves the purchase requisition

• Another user creates the purchase order

• Another user approves the purchase order

• Another user creates the goods receipt

• Another user creates the MIRO

• The Auditor of State produces and mails the payments

• DFA processes the BAI file to clear the payments Dividing the process between different agencies, and between different people within an agency, means that one person cannot do the entire process without any kind of review. Review is critical, not only for fraud prevention but for data accuracy.

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Chapter 3 Accounting and Budgeting Logistic Transactions


Materials Management Process-The Purchase Requisition Chapter 3 – Accounting and Budgeting Logistics Transactions

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Accounting for Logistic Transactions

What Happens When Goods Are Purchased? The purchase requisition and purchase order do not cause AASIS to make accounting entries in the General Ledger or Special Purpose Ledger. The purchase requisition and purchase order do cause AASIS to record “commitments” in the controlling module and the FM (budget) module. This is because government rules require us to keep up with obligations or “encumbrances” to our budgets, but modified and full accrual accounting rules do not recognize a transaction until the goods are actually received.

What Happens When Goods Are Received? The MIGO transaction is used to record a receipt of goods ordered through the AASIS purchasing process. The goods receipts and invoice receipts are recorded through a special account called the GR/IR account. (GR=Goods Receipt; IR=Invoice Receipt) As soon as the end user saves the MIGO transaction, AASIS records the following accounting transaction: The expense or asset account is debited The GR/IR liability account is credited The amount of the debits and credits are the dollar value of the quantity of goods received. The unit dollar value comes from the purchase order. The quantity received comes from the goods receipt. Example: Agency orders 10 boxes of pencils at $5.00 per box. All 10 boxes are received. Office Supplies Expense is debited for $50.00 and GR/IR is credited for $50.00. General Ledger Entries

_______________________ _______________________ Debit Credit 50 50

Office Supply Expense GR/IR


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GR/IR 50 50

MIGO MIRO

Vendor AP 50

What Happens When the Invoice Is Entered? The MIRO transaction is used to record the invoice for goods ordered through the AASIS purchasing process. As soon as the end user saves the MIRO transaction, AASIS makes the following accounting entries: The GR/IR account is debited The vendor account is credited The vendor account credit “rolls up” to the Vendor Accounts Payable Reconciliation General Ledger Account, which aggregates all of the vendor accounts. The amount of the debit to the GR/IR account is the dollar value of the quantity of goods invoiced. The amount of the credit to the vendor is the amount to be paid to the vendor. Any differences between the amount to be paid to the vendor and the debit to the GR/IR are debited or credited to the expense or asset account of the item being invoiced. Example: Agency enters invoice for the 10 boxes of pencils in the earlier example. GR/IR is debited for $50.00 and the vendor account/Vendor Accounts Payable is credited for $50.00. General Ledger Entries


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Budgeting for Logistic Transactions

What Happens When the Purchase Requisition is entered? A purchase requisition can be created with a “U” in the “account assignment” field. An “account assignment” designates which cost objects will be used to commit your budget for the amount of the purchase and where the expense is to be charged. If the requisition is created with a “U” for unknown, your budget will not be committed. If a purchase requisition is created with an account assignment of “K”, you would enter a cost center on the account assignment tab. That cost center would then derive the fund, funds center, functional area and commitment item. The quantity multiplied by the price stated on the requisition will be the amount committed against the fund, funds center, functional area, commitment item combination. NOTE: To view the Commitment/Actual Line Items by Document Number screen, go to Environment>AC Commitment Documents. You will receive a pop-up box and double click on “Funds Management Doc”.

If you used “U” for the account assignment in the purchase requisition, an alternate account assignment must be selected at the point of purchase order creation. When the purchase order is created with reference to the purchase requisition (there is no change in price and/or quantity) you will see the commitment relieved from the purchase requisition.


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The commitment is transferred to the purchase order. In the example below, the commitment amount also includes sales tax because tax code “P1” was chosen on the purchase order. The commitment remains the same after the goods receipt (MIGO) transaction is created. When the invoice is received, an entry will be made in the logistic invoice verification (MIRO) transaction. That will relieve the commitment in the purchase order and commit budget at the invoice level. It will remain a commitment even after the payment program runs. The commitment will become an expense once the follow-up program (FMF0) runs. What is the 3-Way Match? We talked about the Procurement Cycle in Chapter one. It is important to always complete the procurement cycle because every document in the procurement process also creates additional postings within other modules. Completing the procurement cycle also insures the proper function of the three way match. In order to pay an invoice against a purchase order, two steps must already have been completed in AASIS: The purchase order and a goods receipt. When the invoice is entered, a process known as invoice verification or “three-way match” takes place. Within the three way match, quantity and price on the goods receipt must match the amount on the invoice receipt. Example 1: A correct Three-Way Match Goods Receipt – 10 items @ 100 each Invoice Receipt – 10 items @ 100 each Example 2: An incorrect Three-Way Match Goods Receipt - 9 items @ 100 each


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Invoice Receipt- 10 items @ 100 each NOTE: There are exceptions to the 3-Way match. Because of unplanned shipping costs, rounding of sales tax, and other unexpected items, AASIS allows an invoice to pay if it matches within 10% or $100, whichever is less. If the invoice amount is entered for more than 10% more or $100 more than the amount of the goods receipt, AASIS puts a system payment block on the invoice. The system block should be reviewed by management and removed based upon established agency internal controls.

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Chapter 4 The Vendor Master and Material Master Records


Materials Management Process-The Purchase Requisition Chapter 4 – The Vendor Master and Material Master Records

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Two important pieces of master data for the procurement process are the Vendor Master and the Material Master.

What Are Vendor Master Records? Vendor Master Records are created and maintained by the Department of Finance & Administration – Office of State Procurement (DFA-OSP). Agencies only have access to display the vendor master records, and even then the display access is restricted to some purchasing users and accounts payable users, depending on the vendor group to which the vendor belongs. If you find something on a vendor master record that needs to be changed, or if you want to request a new vendor master record to be created, you must fill out a form and send it to DFA-OSP. A vendor master record holds identifying information about a specific business entity or person from whom the State is authorized to purchase commodities or services. The master record contains address and contact information, agency specific information, and settings that affect integration points between MM and other sub-modules. Each vendor master record is assigned a unique number, which serves as the vendor account number in MM documents. Keep in mind that the vendor master record does not contain any transactional data; that is, it only shows who and where the vendor is, not how much business the State has actually done with the vendor. Transactional information (when, what and how much we bought from the vendor) is maintained elsewhere, but the link between the Vendor Master Record and the transactional data is the vendor account number. Vendor groups are a means of organizing vendors according to type. Vendor groups are also a means of restricting or permitting access by agency personnel through their security roles.


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Vendor Group Description Number Range Usage

ADDR One-Time Address Vendor

W000000 A000000 C000000

W999999 A999999 C999999

Used for vendors to be paid by warrant, ACH, from a Treasury Fund or Check from cash fund.

AGEN State Agency Vendors 9990000 9999999

State Agencies. Each state agency has at least one vendor number.

EMPL Employee Vendors 2000000 2999999

Every state employee who is paid through AASIS also has a vendor number. These vendors are used to reimburse employees for travel expenses, not for Payroll.

VEND Vendors - General 100000000 199999999

The General Vendor group is used for commercial entities from which the State purchases goods or services (Wal-Mart, Office Depot, Entergy, AT&T, architectural and advertising agencies, etc.).

The only vendor types used in MM are “AGEN” and “VEND”. Before you create procurement documents, you must be certain that the vendor account number you use is the correct one. There are several vendors, such as Wal-Mart, Office Depot and Gateway, who have multiple vendor account numbers. To avoid creating errors that must be corrected later, verify the vendor information before starting the data entry.


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To display the vendor master record, use transaction XK03.


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1. Enter the vendor number, or use the “match code” icon to search. Enter company code “ARK” and the purchasing organization (business area).

2. Click all of the checkboxes (except Withholding tax, which is not functional) by clicking the “Select all” icon.

<Enter>

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The first page displays the vendor’s or individual’s name and address. Name 1 will be the corporate or individual name (the name to which the 1099 documents are issued). Name 2 is the “Doing Business As...” name – the name you will most likely be familiar with. Contact information, if available, will be displayed at the bottom of the page. <Next screen>


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As we stated earlier, the authorization “Vend” means that this vendor can be used in procuring goods and services through the procurement process. The jurisdiction code is used by the tax calculation software to determine the amount of sales tax applicable based on the vendor location. <Next screen> The Alternative Payee screen is rarely used. It may be used in case of garnishment of vendor payments. <Next screen>


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The Accounting Information screen displays the reconciliation account (vendor accounts payable). The Authorization designation indicates what type of vendor it is (AP vendor, state agency, employee, etc.) This screen also displays the withholding tax code. <Next screen>


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The Payment transactions accounting screen displays the payment terms set up for the vendor and the payment methods that the vendor can accept. <Next screen>


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This screen is not used. <Next screen> The Purchasing data screen contains information specific to your purchasing organization. (For example, your purchasing organization may have different payment terms than the vendor lists for the state.) <Next screen>


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In some cases, purchase orders and invoices may go to different vendor addresses. This information is contained on the Partner functions page and is specific to each purchasing organization.

What Are Material Master Records? As previously stated, the material master record represents a specific material or service and is assigned a unique number in AASIS for a specific material or service. It includes a short material description and its units of measure. This number will be used by all modules in AASIS that will access the material or service for transactional and reporting purposes. The material master records for non-stock items are only created for plant 9999. The material master record also contains a material group number. This number groups together goods and services by similar characteristics or attributes. A material master represents a good or service which can be procured by authorized plants through the purchasing sub-module in MM. Each material master record includes a suggested GL account for use in purchase orders, but you can change the GL account when you create the PO. Plants represent an inventory warehouse location. Most of the state uses plant 9999, although there are a couple of agencies that have their own plants. Plants are further controlled by purchasing organizations and purchasing groups. Purchasing groups are defined by the agency and can represent one or many individuals, but must be created and maintained within AASIS by ASC staff.


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To display the material master record, use transaction MM03.


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Type in the material number that you wish to view or you can do a search using the “Search” icon. <Enter>

1. Highlight the tabs you wish to view. To view all the tabs click the “Select all” icon.

2. Click the “Organizational levels” icon.

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3. Enter the plant number to pull up the materials that you wish to view. <Enter>

4. On the Basic data 1 tab you can view the base unit of measure for the material selected. In the sample below; “EA” is the unit of measure.

5. The material group number is also displayed. Remember, this number groups together goods and services by similar characteristics or attributes.

6. Continue to the Basic data 2 tab.

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On the Basic data 2 tab the material number and description are displayed. 7. Continue to the Purchasing tab.

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The material number and description are also displayed on the Purchasing tab. You may also view the plant where the good or service is stored.

8. The Base Unit of Measure is displayed. 9. The Material group is displayed. 10. Tax ind. F. material indicates whether the good or service is taxable or

exempted from taxes. “1” means the item is taxable 11. Var. OUn. (Variable order unit). “1” allows Purchasing to order a material

in a unit that differs from the base unit defined for the material. 12. The Purchasing value key will identify if a tolerance will be allowed on the

purchase. A “Purchasing value key of 01” means that there is not a tolerance limit set in the master record. If there is a tolerance limit set of 10% this means that you will accept 10% below or above the quantity stated on the purchase order. One example in setting a tolerance would be in the procurement of printing.

Continue to the Foreign trade import tab.

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From this tab you can view the material number, description and plant. Continue to the Purchase order text tab. Again you can view the material number and description. A more detailed text can be viewed in the text box. Continue to the Accounting 1 tab.


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From the Accounting 1 tab you can view the material, plant and the base unit of measure which in this example is “EA”.

13. The four digit number entered in the “Valuation Class” field indicates which G/L will be used on the requisition. The G/L account can be changed on the PR.

14. The “Price Control” field is also displayed. A “V” in this field means “moving average price”. The moving average price is calculated by dividing the value of the material by the quantity of the material in stock. It is recalculated automatically by the system after each goods movement or invoice entry.

Continue to the Accounting 2 tab. Again, you can view the material number, description and plant. Continue to the Plant stock tab.

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On the last tab you can view the material number, description and base unit of measure. To exit the report “green arrow back” twice. This will take you back to the “Main Menu” screen.

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Chapter 5 Timesaving Tips


Materials Management Process-The Purchase Requisition Chapter 5 – Timesaving Tips

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How to Set the “PO Price” Field on the Valuation Tab. In the past, agencies that created purchase requisitions wanted to know why the purchase requisition price did not default to the follow-on purchase order. The system was not configured for this because the purchase requisition price is usually an estimate. The system does default the price when converting a request for quotation to a purchase order because the price is set and an info record is created, which defaults the price to the purchase order. However; for some agencies, the set price is known at the purchase requisition creation. By adopting the price from the purchase requisition at purchase order conversion, time would be saved. Agencies can maintain personal settings at the user level to either adopt or not adopt the price as a default. Go to: System>User Profile>Own Data

1. Click on the Parameters tab.

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2. Scroll down to the next blank parameter ID.

3. Type “EFB” in the “Parameter ID” field. 4. Type “01” in the “Parameter value” field.

<Save>

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Set Your Default Values Setting default values will save you steps when creating a purchase requisition. Fields that remains constant can be set as default values. These values will automatically populate the fields each time a purchase requisition is created. Before we create a requisition let’s set our default values. Transaction ME51N

1. Click on the “Default values” icon.

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From this screen you can set the “Item category”, “Acct.assign.cat” (Account Assignment Category), “Delivery date” “Requisitioner” and “Tracking Number” as default values.

2. Click on the “More fields” icon to select additional default settings.

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3. Each of the “Hidden fields” may also be used to set default values. 4. In this example we will set up the “purchase order price” and the “plant” as

default fields. Highlight the lines and click the single arrow pointing to the left.

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5. The “Plant” and “Purchase Order Price” are now in the display field column.

<Enter>

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Now we can enter “9999” in the “plant” field and set the “PO price” field to “As net price”. <Save> Note: You do not have to click the “Always propose” box to have the settings default.


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The Copy Item Feature The copy item feature allows the requisitioner to copy one line item (item 10) to the next line item (item 20). For example, your agency is purchasing 5 computers. They are identical except each computer has a unique asset number that will need to be entered. Instead of entering all the same information 5 times on the purchase requisition, you can use the copy feature to save time.

1. To copy a line item, highlight the line and click on the “copy item” icon.

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2. Item 10 was copied to item 20. Make any changes to new line items such as changes to the account assignment category, quantity, material, delivery address or any field that is not grayed out. In this example Item 20 had a new asset number that needed to be entered on the Account Assignment tab.

To continue the process, just highlight the item and click on the “copy item” icon.

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The” Layout Settings” Feature You can add or delete a column on the purchase requisition. For example, the requisitioner might want to add a “total value” column to the PR.

1. To add or delete a column, click on the dropdown to the right of the “Layout Settings” icon.

2. Click on “Change Layout”.

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3. To add a column, such as “total value”, highlight the line from the group on the right side of the screen.

4. Click the arrow pointing to the left. 5. To move a column, highlight the column to be moved and click the up or

down arrows.

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The column names to the left are the columns now associated with the requisition.

6. To delete a column, highlight the line from the column. 7. Click on the arrow that is pointing to the right.

<Save>

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8. In the “Save layout” field, enter a title and name for the layout. 9. Make sure that the “User-specific” and “Default setting” boxes are

checked. <Enter> You will receive a message that the layout was saved.

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The screen below shows the added “Total value” column.

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Chapter 6 Creating a Purchase Requisition


Materials Management Process-The Purchase Requisition Chapter 6 – Creating a Purchase Requisition

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What is the Benefit to using a Purchase Requisition? A purchase requisition (PR) is a Materials Management document created in AASIS to start the process of fulfilling the need for goods and services. The Department of Finance and Administration (DFA) recommends using the purchase requisition because in most cases budget is committed based on the estimated cost of the goods or services when the requisition is saved. If there is not enough budget available to cover the amount of a purchase requisition or purchase order, you will receive a system message that says “budget exceeded”. The system does a “budget availability check” when a requisition or purchase order is saved. Scenario: You are a State employee working in the purchasing department of the Department of Human Services. You have received a paper request for 100 reams of xerographic paper. It is to be delivered to DHS Independence County. They need a four week delivery on the paper. Let’s create a purchase requisition for the xerographic paper using:

Transaction ME51N


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Leave the default document type (Req to PO) since this purchase requisition will be referenced by a subsequent purchase order. The source determination box is not being used by AASIS at this time.

1. Open the Header section. You may enter instructions or specifications in the “Header note” text field.

2. Open the Item overview section.

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Remember from Chapter 2 that the “account assignment category” designates which cost objects may be used when creating the purchase requisition. It also determines the layout of the Account Assignment tab in the item details section.

3. Enter “K” in the “A” column which will require you to enter a cost center on the Account Assignment tab in the item details section for this line item.

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Searching for a Material Enter the material number or click on the dropdown to perform a material search. There are different search criteria that can be selected. For best results when searching for materials to be purchased:

• Select the Material by material type tab.

• Enter GDSV as the material type. - or -

• Select the Plant material by description tab.

• Enter 9999 as the plant. Either of these methods will restrict the hit list to those materials that have been set up for purchasing use.


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Multiple attempts with different search terms may be needed before you can be certain the material does not exist in the system. When searching for a material, remember to:

• Use wildcards (*) properly. o Wildcard before the search term will return materials that end with

the search term. o Wildcard after the search term will return materials that begin with

the search term. o Wildcard before and after the search term will return materials that

include the search term anywhere in the description. o Separate multiple search terms with wildcards. The search string

must be entered exactly as it appears in the description, including spaces and punctuation.

• Use the singular form of nouns; however, if the noun changes form when it becomes plural, use only the portion of the noun that applies to both the singular and plural.

• If you are unsure of the correct spelling, or if the word is frequently misspelled, enter only the portion of the word of which you are certain, and use wildcards (*) as described above.

4. Enter your search criteria in the “Material description” field. <Enter>

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5. Highlight the material you need. <Enter>

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6. Enter the quantity required 7. Enter the delivery date. Type the date or use the calendar by clicking the

dropdown. If the delivery date is less than two weeks from the date of the PO or the delivery date is a holiday, you will receive a warning message asking you if delivery can be made on that date.

8. Enter plant “9999” or an applicable plant number. 9. Enter the purchasing group. (PGr). That is the buyer who will be creating

the purchase order. 10. Enter the requisitioner (the person or place that requested the goods

and/or services). 11. Enter the Tracking number (you can search for requisitions in some MM

reports by tracking number).

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Searching for a Vendor Desired Vendor - The number of the vendor from whom you would like to purchase the item(s) requested. This is not a required field on the requisition. If the vendor number is unknown, you may perform a vendor search from this field. Account group’s unique numeric ranges categorize vendor master records. ASC recommends that you search for the vendor by the “Vendor Purchasing” criterion so only vendors that can be entered in the purchase order will be available for selection.

12. Click on the dropdown icon to begin the vendor search.

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13. Click on the “dropdown” icon to view the search options. 14. Choose “Vendors: Purchasing”

15. Enter the purchasing organization (your business area). This will limit the search to the vendors that can be used by your agency.

16. Using the wildcards as in the material search, type in a portion of the vendor name surrounded by (*). Example, the vendor is Interoffice Supply. Type *Inter* in the “Name” field.

<Enter>

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17. Highlight the vendor. <Enter>

18. Enter the purchasing organization. <Enter>

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The Account Assignment Tab The account assignment tab shows the cost object fields depending upon the account assignment category chosen, (in this case the cost center) was entered, and when the enter key is hit, the general ledger account number (which is derived by the material/material group), business area, fund, functional area and funds center (derived from the cost center), commitment item (derived from the G/L account) and “Funds Reservation” fields are populated. The system will also give you a message to go to the Delivery Address tab next to enter your delivery address. Budget will be committed based on the “budget quad” derived from the cost object. If other account assignment categories are chosen, the appropriate cost object fields will be open for completion. If the account assignment category “U” – unknown is used, the account assignment tab does not appear. There is no budget committed.

19. If the purchase requisition contains multiple items going to the same cost center, click on the “repeat” icon.

Go to the Delivery Address tab.

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20. Click on the “dropdown” icon to choose the delivery address.

21. Go to the Country, region, sort field, name, City, Street tab. 22. Type the purchasing organization in the “Search Term 1” field. <Enter>

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23. Highlight the appropriate delivery address from the list of addresses. The delivery address is the locations that taxes will be calculated. <Enter> The delivery address will populate on the delivery address tab for the selected line item on the purchase requisition. <Enter> The delivery address number will populate on the delivery address tab for the selected line item on the purchase requisition.

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If the goods are to be picked up at the vendor’s location, you will not be able to enter the vendor number in the “vendor” field from this transaction. Enter your agency’s address number in the “address” field. After you have completed and saved the requisition you can go into ME52N and change the vendor information to the vendor location. Go to the Valuation tab.

24. A price is required for this line item and must be entered in the “Valuation price” field.

25. You can set the “PO price” field as a default. If you choose “Do not adopt”, the price will not populate in the purchase order.

Note: Taxes are not calculated on the PR; therefore, no budget is committed for the tax amount. Go to the Source of supply tab. The Source of supply tab is another option for choosing a vendor. This option is most often used when the agency has a specific contract with the vendor. You may enter the agreement (contract) number or select assign source of supply to obtain the vendor. Click on the Text Tab.

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From the Text tab, you can make changes to the material master text and enter any additional details for the vendor. Notes to the buyer may be entered to give the buyer or purchasing agent additional information about the item. Notes to buyers will not print on follow-up documents.

26. Data entered on the requisition can be checked by clicking on the “check”

icon. This checks to see if any required information has been omitted. If the purchase requisition has no errors, a message is displayed at the bottom of the screen – “No messages issued during check”.

<Save> You will receive a document number.

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How Do I Attach A Document To A Purchase Requisition? You can attach a document while you are creating the requisition or you can attach a document using the change transaction (ME52N) after the requisition is saved.

1. Click on the “Services for Objects” icon.

2. Click on the “Create” icon. 3. Select “Create Attachment”.

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4. Find the document or file that you wish to attach and click the “Open” icon. You will receive this message at the bottom of the screen. If you attach the document during the creation of the purchase requisition you will continue to create the requisition and receive a purchase requisition number.

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How Do I Retrieve The Attached Document? Go to transaction ME52N Change Requisition or ME53N Display Requisition. Click the “Other requisition” icon. Enter the document number you with to view. <Enter>


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5. Click on the “Services for Objects” icon.

6. Click on the “Attachment list” icon. Double click on the attachment.

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Chapter 7 Viewing the Purchase Requisition


Materials Management Process-The Purchase Requisition Chapter 7 – Viewing The Purchase Requisition

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Let’s display a purchase requisition document and look at the different fields.

Display a Purchase Requisition – Transaction ME53N

Click on the “Other requisition” icon to type in the document you wish to display.


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Click the “Other document” icon. There are three sections to the Purchase Requisition.

Header Item Overview Item Detail

You can close or open each section by clicking on the “Collapse/Expand” icons.

HEADER

ITEM OVERVIEW

ITEM DETAILS


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About the Header: The first field selection on the header is the document type. Document types were discussed in Chapter two. For a requisition that is to be used in creating a purchase order, you will use the default document type Req. to PO. The drop down shows other options such as Req. to OA which is used if the PR will be referenced by an Outline Agreement, Req. to Prof Scv PO which is used if the PR will be referenced by a Purchase Order for professional services or Req. to Prof Svc OA which is used if the PR will be referenced by an Outline Agreement for professional services.


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Entering a header note is optional when creating a purchase requisition. It can be used to notify the buyer of special needs or requirements for the material or service. You can enter any necessary information in the text box on the right. The text typed in this box pertains to the requisition as a whole. The header note does not copy over to the purchase order.

The “Continuous text” allows additional text selections to be entered. The “Line editor” allows you to search for and replace text strings. The “SAPscript editor” allows you to display voluminous text.

You will not see the Release strategy tab until the requisition has been saved. Once the document has been approved, you can review the “Release group”, “Release strategy” and the “Release indicator”. The checkmark in the “Stat.” (status) column means the purchase requisition has been approved and is ready for further processing... Releasing the purchase requisition will be discussed in detail in a later chapter.


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About the Item Overview: Account Assignment Category- designates which cost objects will be used. It also determines the layout of the Account Assignment tab in the item details section. Material – In the “material” field you will enter the number assigned to the good or service to be procured. There are search options that we will go through in a later chapter. The material number will derive the short text, unit of measure and the material group from the material master record.


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Quantity – is the amount of the material requested. NOTE: When procuring a service, ZLS (lump sum) is used where the quantity represents the total dollar value of the service being requested and the net unit price of the item should be $1.00. Unit of Measure – Any established amount or quantity (such as box, ream, case, each, etc.) adopted as a standard measurement for other amounts or quantities of the same kind. The unit of measure is derived from the material master record. You must verify that this unit of measure is correct before saving the requisition. Delivery Date – Anticipated date of delivery (NOTE: This is used in the controlling module as the posting (debit) date of the commitment.) If the delivery date is under two weeks of the date of the PO or the delivery date is a holiday you will receive a warning message asking you if delivery can be made on that date.


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Plant – code used for storage locations within the State. 9999 – Reference plant – standard location used within the system by all purchasing organizations. 1000 – Physical storage location used by the Department of Human Services. 1300 -- Physical storage location used by ASH - Benton 1350 – Physical storage location used by Arkansas State Hospital. Purchasing Group – a purchasing group is a centralized procurement group or individual Agency/State Procurement Specialist, responsible for the requested purchase. In some agencies this person is known as the buyer. Requisitioner – The value entered into this field is used for internal tracking to verify who requested the goods or service. Entry in this field can be anything designated by the agency’s policy. This field accepts alpha, numeric or alpha-numeric characters.


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Tracking number – The value entered into this field is used for tracking purposes. You can narrow your search in MM reports by tracking number. Entry in this field can be anything designated by your agency’s policy. This field accepts alpha, numeric or alpha-numeric characters. Desired Vendor - The number of the vendor you would like included in the bid process. This is not a required field on the requisition. If the vendor number is unknown, you may perform a vendor search from this field. Account groups with unique numeric ranges categorize vendor master records. ASC recommends you search for the vendor by the “Vendor Purchasing” criterion so only vendors that can be entered in the purchase order will be available for selection. Purchasing Organization – defines a specific group of people responsible for the purchase. AASIS was designed to have the purchasing organization number the same as the business area number for end user convenience.


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About the Item Details: This section of the purchase requisition shows details of each line item. The arrows next to the item description allow you to view the details of each line item. Each tab of the item details has information pertaining to the selected line item. Material Data tab: From this tab you can view the material number, short text and material group. This information was derived from the material master record. Quantities/dates tab: You can view the quantity, quantity ordered, open quantity, delivery date, req. date and release date.


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Valuation tab: The “valuation price” is a required field. You can set the option for the price on the requisition to populate in the PO once referenced. Account assignment tab: This tab is where you will enter the cost center or other account assignment information according to the account assignment category selected in the “Item overview” section of the requisition for each line item. For account assignment category of (A) Asset, the business area, fund, fund center and functional area are populated from the asset mater. For account assignment category “Blank”, the fund, funds center and functional area are derived from the plant. For other account assignment categories, the business area, fund, funds center and functional area are derived from the cost center or non-statistical WBS element. Remember if you need to change the budget quad after the purchase requisition has been saved, you must delete the line and reenter with the correct assignment information.


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A General Ledger (G/L) account is required on the PR when the account assignment is a cost center (K), internal order (F), or WBS element (P). AASIS is configured to “derive” the suggested GL account based upon the valuation class entered on the material master. For account category of A (Asset), you will have to enter the asset number stored on the asset class associated with the asset. AASIS does not permit a G/L account or other financial elements when account assignment is unknown (U). Source of Supply tab: “Des.vendor” field: If you entered the vendor number on the Line Item section of the requisition it will also populate on this tab. You could also enter the vendor number directly on this tab instead of on the Line Item section.


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“Agreement” field: If your agency has an outline agreement set up for a particular good or service you can type that number in the field to reference that outline agreement. “Assign source of supply” button, the “Fixed vendor” field and the “Info record” field: An “info. Record” number is created in the system once an agency buys a material or service from a particular vendor. You can click on the “Assign source of supply” to select a vendor.


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You will receive a list of vendors that have supplied the goods or services in the past for the requested material on the requisition. You can check the price we paid per vendor. When the “assign source” button is clicked a “green light” will indicate that the vendor was selected. Status tab: This tab will show you the history of the requisition. In the example below a purchase order was created using this purchase requisition. The goods receipt and the invoice receipt were created referencing the purchase order. You can drill down to the purchase order by double clicking on the purchase order number. Once you are in the purchase order you can drill down to the goods receipt and the invoice receipt.


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Contact person tab: This tab will display who created the requisition, the requisitioner, tracking number and purchasing group number. This tab will also display a date on the requisition showing if any changes were made. Texts tab: The Material Master Text will default from the material master record. You can change, add or delete information from this defaulted text. The information will be changed only on the purchase order for that line. Changing information will not change the material master record. The Notes To Buyer is for additional information to be told to the person creating the purchase order needs to know regarding the order. This text will not print on the purchase order.


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Delivery address tab: This tab displays the delivery address. If the goods are to be picked up at the vendor’s location, enter the vendor number in the “vendor” field. We can view the postings from the requisition we entered and see how they affect the various modules of AASIS. How Do I View the Follow-On Requisition Documents? You can drill down to view the postings in transaction ME53N.


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Enter the number of the purchase requisition you wish to view. <Enter> Go to Environment>AC commitment documents.


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A list of documents displays. How Do I View the FM Document? Double-click the Funds Management Document to continue.


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The posting to funds management recorded a purchase requisition commitment to the fund, funds center and commitment item. Information contained in this document also includes the currency, ledger, year, FM posting date, Item number, and amount type. <Back> How Do I View the Controlling Document? Double-click the Controlling Document to continue:


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The purchase requisition post as a commitment in controlling. The controlling document displays the reference document number, item number, name, fiscal year, value, cost element number, cost center, functional area and fund. Note: The cost element is the same as the GL code.

<Back>

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Chapter 8 Selecting Approvers


Materials Management Process-The Purchase Requisition Chapter 8 – Selecting Approvers

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Approval/Release Process The purchase requisition must be approved (released) before follow on actions can occur. This is an important step in the process. Many requisitions get dropped at this point in the process. Remember when the purchase requisition is saved, it commits budget. Once the purchase requisition is approved it can be referenced by follow on documents. What Is Workflow? In the Materials Management module, Workflow has been configured to alert users when they have purchase documents pending release. When the user creates and saves a purchase requisition, the system sends a message that you need to select approvers. Once the approvers are chosen, the system notifies the approver and automatically takes the approver into the AASIS release transaction to execute the release for the designated document. If multiple releases are required, once the first release (AG) is completed, the system automatically notifies the user with the next level of approval needed to release the document. Upon approval, the purchase requisition may be processed into a Request for Quotation (RFQ) or Request for Proposal (RFP), or directly into a Purchase Order (PO) or Outline Agreement (OA). How Do I Choose Approvers? You created a requisition and received a number. Exit the document. You will receive the pop-up box below requesting that you select approvers for your purchase requisition.

1. Click the “Inbox” icon.

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2. Click on the blue box to the left of the word “workflow”.

3. Double-click on the requisition that you wish to send for approval.

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4. The names of the assigned approvers will be listed. Check one or multiple boxes. When the first person approves the requisition it will no longer be in the other approver’s workflow inboxes.

5. Click “AUTOSEQUENCE” to continue.

6. The system will display the approvers that you selected. When you click “DONE” the purchase requisition will be sent to the approver’s inbox.

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1. You can also enter workflow by clicking on the “SAP Business Workplace” icon from the AASIS MENU screen.

2. Click on “Inbox”.

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3. Click on the box to the left of “Workflow”

4. Now you can continue to select approvers.

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Chapter 9 Deleting and Closing Purchase Requisitions


Materials Management Process-The Purchase Requisition Chapter 9 – Deleting and Closing Purchase Requisitions

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How Do Purchase Requisitions Remain Open and Continue to Commit Budget? Entering a purchase requisition into AASIS causes a commitment to an agency’s budget. When you convert the requisition to a purchase order, the commitment is relieved from the purchase requisition and picked up by the purchase order. If the purchase order referencing a purchase requisition adds up to a quantity less than that on the purchase requisition, then the purchase requisition will remain open and continue to commit budget for the quantity that has not been converted to a PO. There are two reports you can run to view open commitments (purchase requisitions, purchase orders and vendor invoices):

• Actual Budget Report – Y_DEV_80000046 • The Open Commitment Item Report - ZCMT

There are two reports you can run to display your open requisitions. They are:

• List Display of Purchase Requisitions – Transaction ME5A • List Display of Open Requisitions – Transaction ZOPENREQ

Actual Budget Report -Transaction Y_DEV_80000046 Menu Path: Special Transactions and Reports-State of Arkansas>Financial Accounting>Funds Management>Reporting>Budget/Actual>Actual Budget. The Actual Budget report will reveal commitments and expenses to the budget. These commitments can include incomplete purchase requisitions, purchase orders, funds reservations and unpaid vendor invoices. A purchase order line item continues to be a commitment even after the entry of the MIGO (Goods Receipt document). The commitment is relieved on the purchase order and transferred to the Logistics Invoice when the MIRO transaction is entered. All open commitments move into the expense column after the invoice is paid via the payment program and FM is subsequently updated.


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Selecting The Report 1. Enter the fund. (You must enter either a fund or funds center.) 2. Enter the funds center. (This is optional if you entered a fund.) 3. Be sure that the “Year commitment item” equals the fiscal year selection. 4. Enter a commitment item if desired. 5. “Agency from/CustFund” is an optional field. You may enter the customer

number for your agency here. The number will always be 998xxxx00. The “x’s” stand for your business area.

6. Enter the current fiscal year and periods 1 to 16 will default. Change this to periods 0 to 16 to select budget for the entire year. Period 0 captures original budget loads and carry forward activities. You may change this if you want to view a different period or range. NOTE: Commitments and blocks are entered by period based on the posting date in the document, but budgeted amounts are entered by fiscal year. When a single period is selected, you will see a budgeted amount for the entire fiscal year and the current period commitments and blocks.

7. Classic drilldown report selection enables you to export the report to an Excel spreadsheet. You may also select the graphical report option for a different view.

<Execute >

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Viewing the Report 8. Click the plus signs or the “Expand” icon to expand the report. 9. Budgets, commitments and expenditures and available budget are

displayed. 10. If the entire report is not displayed, click the right arrow to view the next

page.

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Actual Budget Report Drill-Down To drill down to line items in the budget report, select the amount for which you want to view detail. Select Extras>Line Items from the blue menu bar. The line items making up the amount will be displayed. What Does the Line Items By Document Number Screen Show You? Looking at the “Value Type Text” field will show you what type of documents are consuming budget. You can view the original amount of the document and any reduction that has taken place. If the original amount and the reduction amount match, there is not an open commitment. When you see that the reduction amount is less than the original amount further research should take place. The difference between the reduction and the original amount is the amount still committing budget.


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Actual Budget Report Further Drill Down You can drill down to the actual document by double clicking on the document number you wish to view. This screen shows you the Quantities/dates tab. The requisition was created for 1 each. There was a quantity ordered of 1 which leaves an open quantity of 0. This purchase requisition is no longer committing budget.

The requisition was referenced into the purchase order that is listed on the Status tab. This purchase order has now picked up the commitment from the requisition.


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Open Commitment Items – Transaction ZCMT Menu Path: Special Transactions & Reports (State of Arkansas)>Financial Accounting>Funds Management>Reporting>Open Commitment Item Report You can use this report to view commitment line items for the budget.


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Selecting The Report 1. Enter the Fiscal Year. 2. Enter the Fund. 3. Enter the Cost Center.

Make any other desired selections to narrow down the report. <Execute>

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Viewing the Report The report displays open commitment line items with cost object information. The total amount of outstanding commitments is equal to the commitment column on the Budget Report (Y_DEV_80000046). NOTE: You cannot drill down into the document from this report. Commitment Balances The balances of outstanding commitments by fund/funds center/commitment item for MM related documents and FI invoices are equal to the commitment balance on the Y_DEV_80000046 report.


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List Display of Purchase Requisitions – Transaction ME5A Menu Path: Logistics>Materials Management>Purchasing>Purchase Requisition>List Displays>General. The “List Display of Purchase Requisitions” Report will display a list of all open requisitions. Account assignment information is not available on the report; however, this can be viewed by the drill down option.


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Selecting the Report 1. Narrow your search. In this example we are pulling up all open

requisitions created by a particular buyer (purchasing group). 2. The default view in the “Scope of List” is “ALV” (ALV grid control). The

“ALV” (ALV grid control) view makes it much easier to download into an Excel spreadsheet. From the “ALV” view you can also change the layout of the report. For example, you can add a column so you can view funding information.

Once you finish limiting your search, scroll down to the bottom of the screen for additional selection criteria.

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Selecting the Report (Continued) 3. Continue to narrow your search as needed. In this example, the cost

center was entered.

4. Click the “dynamic selections” icon to narrow the report by purchasing organization (Business Area).

5. Click the arrow next to the “Purchase Requisition” folder to open.

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Selecting the Report (Continued) 6. Scroll down to “Purch. Organization” (purchasing organization). Click

on it to highlight and click the black arrow. NOTE: You can use any selection on the list to narrow your search.

7. The “Purchase Organization” (purchasing organization) field appears on the right side of your screen. Type in the purchase organization.

Click enter on the keyboard.

8. The “dynamic selection” icon now shows 1 active. <Execute>

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Viewing the Report The List Display of Purchase Requisitions Report gives a list of all open lines meeting your search criteria. The report will list the quantity requested on each purchase requisition, and if any quantity has been ordered against a particular purchase requisition.

9. The Quantity column shows the quantity requested on the purchase requisition

10. The Ordered column shows any orders that have been placed from the quantity requested.

List Display of Purchase Requisitions Drill Down

11. Double-click on the line item that you wish to view.

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Once you are in the purchase requisition, click on the Quantities/dates tab. This will show you the quantity requested, quantity ordered and the open (not yet received) quantity. Next, click on the Status tab.

The Status tab shows the PO that was created and released, and the quantity ordered. You can drill down further to the purchase order by double clicking on the Purchase Order number.


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Report For Open Purchase Requisitions – Transaction ZOPENREQ Menu Path: Special Transactions & Reports (State of Arkansas)>Materials Management>Purchasing>ZOPENREQ. This custom report provides users with account assignment information not displayed in ME5A. Displayed in the report are the Fund, Funds Center and Commitment Item; however, it does not have drill down capability.


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Selecting the Report 1. Narrow your search. In this example, enter the purchasing group

number. 2. Leave the “Open only” box checked. Scroll down to continue.

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3. Take the “X”’s out of the “Purchase requisition closed” field and the “Deletion Indicator” field. The report will not include purchase requisitions that have been closed or deleted.

4. Take the “N” out of the “Processing status of purchase” field. 5. Enter your Business Area, in the “Purchasing organization” field.

<Execute>

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Viewing The Report This report does not have drill-down capability. You can view the Purch.req. (purchase requisition number), PGr (purchasing group number), Requisnr (requisitioner), POrg (purchasing organization), TrackingNo (tracking number), A (account assignment), Plnt (plant), Qty requested (quantity requested), Un (unit of measure), Valn. price (valuation price), Curr. (currency), Per (per each) column and the Req.date (requisition date). Scroll to the right to view the rest of the report.

When you scroll over you can view your account assignment information. You can view the Asset, SNo. (asset sub-number), Order (order number) if applicable. Also displayed are the G/L acct (g/l account), BA (business area), cost ctr (cost center), WBS element (if on the requisition) and the budget quad, which consists of commitment itm (commitment item), funds ctr (funds center), Fund and FA (functional area).


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If a purchase requisition does not have a purchase order attached to it, or if the purchase order referencing a purchase requisition adds up to a quantity less than that on the purchase requisition, the purchase requisition will remain open and continue to commit budget. Deleting Unwanted Requisition Lines You may have created a purchase requisition that is no longer needed. In that case, it is necessary to delete such requisitions in order to free up budget. A line can be deleted as long as it hasn’t been converted to a purchase order. Use transaction ME52N (change purchase requisition) to delete these lines.

Change Purchase Requisition – Transaction ME52N Menu Path: Logistics>Materials Management>Purchasing>Purchase Requisition>Change This transaction will allow you to delete a purchase requisition line.


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1. Click on the “Other Requisition” icon. 2. Type in the purchase requisition number you need to delete. 3. Click the “Other document” icon. .

4. Select the line/s to be deleted. 5. Click the “delete” icon.

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Click the “Yes” icon to delete the line. There is now a trashcan in the Status column of the requisition line. <Save>


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Note the message indicating that the purchase requisition was changed. NOTE: If you delete a purchase requisition by mistake you can undelete it. Go back into ME52N and bring in the document you wish to restore.

1. Highlight the line you wish to restore. 2. Click to the right of the “trashcan icon” and click on “Undelete”.

<Save>

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3. You will notice the trashcan is gone from the “Status” field. 4. Also, you will see a system message that the purchase requisition is

changed. Closing Purchase Requisition Items The following technique explains how to close purchase requisition lines that have been partially cleared by a purchase order. This process is also accomplished using transaction ME52N. Change Purchase Requisition – Transaction ME52N Menu Path: Logistics>Materials Management>Purchasing>Purchase Requisition>Change

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1. Click on the “Other Requisition” icon. 2. Type in the purchase requisition number you need to close. 3. Click the “Other document” icon.

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4. Go to the Quantities/dates tab in the item detail section of the purchase requisition.

5. It shows there is an open quantity of 3. 6. To close, enter a checkmark in the “Closed” box.

<Save>

REMEMBER: You have determined which purchase requisitions are still committing budget. While some of the purchase requisitions are in the process of being completed, some you may need to delete or close. You can delete a purchase requisition line(s) if there is no follow-on document attached to it. You must close the PR line(s) if a follow-on document is attached.

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MM Purchase Requisition

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Transcript of MM Purchase Requisition