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Purchase Order for Project-based Procurement SAP Best Practices for Engineering, Construction, and Operations (India) SAP Best Practices.

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Presentation on theme: "Purchase Order for Project-based Procurement SAP Best Practices for Engineering, Construction, and Operations (India) SAP Best Practices."— Presentation transcript:

1 Purchase Order for Project-based Procurement SAP Best Practices for Engineering, Construction, and Operations (India) SAP Best Practices

2 Scenario Overview – 1 PO for Project-based Procurement
Purpose and Benefits: Purpose This scenario describes the typical processes used in the construction industry to generate and process purchase orders (POs). These POs are used to procure materials, subcontracted services with retentions and equipments with the aspect of progress tracking. Benefits Transparent view of created outstanding orders, commitments and delivery Standardized invoice handling by using retentions Progress tracking option based on POs for equipments See template 020_Scenario_Oververview.zip Template Pool  SAP Business All-in-One Documentation Templates  020_Scenario_Overview.zip Sample data are to be deleted and replaced (red entries)

3 Scenario Overview – 2 PO for Project-based Procurement
SAP Applications Required: Enhancement Package 4 for SAP ERP 6.0 Purchaser Purchasing Manager Project Manager Site Material Manager Account Payable Accountant Taxation Clerk Transforming purchase requisitions (PRs) into purchase orders (POs)for materials, subcontracted services and equipments, create POs directly without using master records, create Blanket PO Create goods receipt and service entry Invoice receiving and handling from suppliers Handle PO with retention payment terms Handle PO with down payment PO monitoring and progress tracking Vendor Evaluation Company Roles Involved in Process Flows: Key Process Flows Covered: See template 020_Scenario_Oververview.zip Template Pool  SAP Business All-in-One Documentation Templates  020_Scenario_Overview.zip Sample data are to be deleted and replaced (red entries)

4 Scenario Overview – 3.1 PO for Project-based Procurement
Detailed Process Description 1 : The purchasing agent monitors the material requirements generated from a specific project. The WBS element is released by the project manager, the purchase agent decides to start the procurement process. He converts the PRs in project into varies kinds of POs: standard PO for material with master record standard PO with retention payment term standard PO for services standard PO with down payment Besides, he also create standard PO for materials without master records and Blanket PO for fuel products. In order to monitoring the procurement process, the purchasing agent set up progress tracking for certain critical PO. After delivering the materials or perform the service as described in the respective PO’s, the job site manager will then perform goods receipt of the materials and record all time worked by the subcontractors in Service entry Sheet associated with the planned service PO. See template 020_Scenario_Oververview.zip Template Pool  SAP Business All-in-One Documentation Templates  020_Scenario_Overview.zip Sample data are to be deleted and replaced (red entries)

5 Scenario Overview – 3.2 PO for Project-based Procurement
Base on goods receipt, the accounting clerk will then enter an invoices for materials with or without material master records. He also enter invoices for services based on the time record in the service entry sheet. Invoice for blanket PO can be entered without goods receipt. Because no goods receipt is required in this case. One service related invoice will be booked with 90% payment and 10% retention. Once certain special condition fulfilled, the retention amount will be paid at the retention due date. Once the invoices have been entered into the system the accounting clerk can then execute the payment run. This can be done for multiple vendors at one time or it can be executed for a single vendor. The Project Manager can monitor the whole procurement process and display the costs that were posted to project during the goods receipt and service entry sheet transactions. Based on feedback from the site manager, the purchasing agent will evaluate vendor by certain criteria for example, price, quality, on-time delivery, services and log them in the system. The Purchasing agent can also print out an evaluation sheet for selected vendors. Detailed Process Description 2 : See template 020_Scenario_Oververview.zip Template Pool  SAP Business All-in-One Documentation Templates  020_Scenario_Overview.zip Sample data are to be deleted and replaced (red entries)

6 Process Flow Diagram Purchase Order for Project-based Procurement
Event Quotations needed from vendors Project Manager Project Setup for Engineering and Construction (439) Project Budgeting for Engineering and Construction (440) Project Planning for Engineering and Construction (441) PO for Services Project Status Review PO with Retention Purchaser Create PO without Material Master Record Create PO with Down Payment Display Project-Oriented Purchase Requisition Create PO with Material Create PO with Retention Create PO for Service Create Blanket PO PO with Down Payment Purchaser Manager Progress Tracking Approve/Release PO (Optional) PO for Services Site Material Manager Perform Goods Receipt of Materials Record Hours Worked via Service Entry Sheet Accounts Payable Accountant Create Down Payment Request Post Down Payment Enter Invoice Down Payment Clearing Review and Release Blocked Invoices Execute Payment Run Taxation Clerk PO for Services Vendor TDS Certificate Print Updating Bank Challan Number for TDS Payment Withholding tax Remittance Challan PO = Purchase Order

7 Compare Vendor Evaluations Print Vendor Evaluation Sheet
Process Flow Diagram Purchase Order for Project-based Procurement Event Vendor Evaluation Purchaser Evaluation Vendors Compare Vendor Evaluations Print Vendor Evaluation Sheet PO = Purchase Order

8 Legend Symbol Description Usage Comments Symbol Description
Band: Identifies a user role, such as Accounts Payable Clerk or Sales Representative. This band can also identify an organization unit or group, rather than a specific role. The other process flow symbols in this table go into these rows. You have as many rows as required to cover all of the roles in the scenario. Role band contains tasks common to that role. External Events: Contains events that start or end the scenario, or influence the course of events in the scenario. Flow line (solid): Line indicates the normal sequence of steps and direction of flow in the scenario. Flow line (dashed): Line indicates flow to infrequently- used or conditional tasks in a scenario. Line can also lead to documents involved in the process flow. Connects two tasks in a scenario process or a non-step event Business Activity / Event: Identifies an action that either leads into or out of the scenario, or an outside Process that happens during the scenario Does not correspond to a task step in the document Unit Process: Identifies a task that is covered in a step-by-step manner in the scenario Corresponds to a task step in the document Process Reference: If the scenario references another scenario in total, put the scenario number and name here. Sub-Process Reference: If the scenario references another scenario in part, put the scenario number, name, and the step numbers from that scenario here Process Decision: Identifies a decision / branching point, signifying a choice to be made by the end user. Lines represent different choices emerging from different parts of the diamond. Does not usually correspond to a task step in the document; Reflects a choice to be made after step execution Symbol Description Usage Comments To next / From last Diagram: Leads to the next / previous page of the Diagram Flow chart continues on the next / previous page Hardcopy / Document: Identifies a printed document, report, or form Does not correspond to a task step in a document; instead, it is used to reflect a document generated by a task step; this shape does not have any outgoing flow lines Financial Actuals: Indicates a financial posting document Budget Planning: Indicates a budget planning document Manual Process: Covers a task that is manually done Does not generally correspond to a task step in a document; instead, it is used to reflect a task that is manually performed, such as unloading a truck in the warehouse, which affects the process flow. Existing Version / Data: This block covers data that feeds in from an external process Does not generally correspond to a task step in a document; instead, this shape reflects data coming from an external source; this step does not have any incoming flow lines System Pass / Fail Decision: This block covers an automatic decision made by the software Does not generally correspond to a task step in the document; instead it is used to reflect an automatic decision by the system that is made after a step has been executed. Diagram Connection <Function> Hardcopy / Document External to SAP Financial Actuals Business Activity / Event Budget Planning Unit Process Manual Process Process Reference Existing Version / Data Sub-Process Reference System Pass/Fail Decision Process Decision

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