7 Purchase Order Structure 1. HeaderVendor CompanyPurch. Org. DatePurch. Org. group PO PricePurchaseOrder2. Item OverviewMaterials Price/UofMQuantities CurrencyDelivery Date Plant3. Line ItemPO History TolerancesLine Price StorageDelivery Schedule
15 Material MovementsWhen a goods movement takes place it is represented by a Movement TypeMovement types are three-digit keys used to represent a movement of goods101 – goods receipt into warehouse102 - reversal of goods receipt for purchase order into warehouse/stores103 – goods receipt into GR blocked stock122 – return delivery to vendor501 - receipt w/o purchase order into unrestricted-use stockWhen you enter a goods movement in the system, you must enter a movement type to differentiate between the various goods movements. A movement type is a three-digit identification key for a goods movement.The movement type plays an important role inupdating of quantity fieldsupdating of stock and consumption accountsdetermining which fields are displayed during entry of a document in the system
16 Goods ReceiptGoods receipt is a goods movement activity in which we accept goods into our system.If materials are delivered against a purchase order we will reference that order and retrieve data from the PO for us to verify:material, quantity, and so onUpdate inventory G/L account automaticallyUpdate purchase order history with the receiptUpdate physical inventoryIf a material is delivered for a purchase order, it is important for all of the departments involved that the goods receipt entry in the system references this purchase order, for the following reasons:Goods receiving can check whether the delivery actually corresponds to the order.The system can propose data from the purchase order during entry of the goods receipt (for example, the material ordered, its quantity, and so on). This simplifies both data entry and checking (overdeliveries and underdeliveries).The delivery is marked in the purchase order history. This allows the Purchasing department to monitor the purchase order history and initiate reminder procedures in the event of a late delivery.The vendor invoice is checked against the ordered quantity and the delivered quantity.The goods receipt is valuated on the basis of the purchase order price or the invoice price.
20 Goods Receipt – Account posting No impact onFinancial Accounting (FI)Purchase requisitionPurchase orderMaterials Management (MM) and Financial Accounting (FI)via automatic account assignmentGoods receiptRequisition – Nothing really happens unless we get the goods or pay for themThe system does the transactions for you using the automatic account assignmentWhen we receive these, it can match the receipt against the PODebit Inventory (we now have additional inventory value)Credit GR/IR (we are going to owe/pay for that additional inventory)
23 Invoice Processing - 3-Way Match Incoming Invoices are reference against a Purchase Order to verify their content, prices, and arithmetic.If discrepancies arise between the purchase order or goods receipt and the invoice, the system will generate a warning or an errorDepending on system configuration the difference could cause the system to Block the InvoicePurchase order- Target quantity -- Target price -Goods receipt- Actual quantity -Invoice receipt- Actual price -It is in Logistics Invoice Verification that incoming invoices are verified in terms of their content, prices and arithmetic. When the invoice is posted, the invoice data is saved in the system. The system updates the data saved in the invoice documents in Materials Management and Financial Accounting.An invoice can be processed in Logistics Invoice Verification in various ways:Invoice Verification OnlineInvoice Verification in the BackgroundAutomatic SettlementsInvoices Received via EDIActivate display of the MM and FI document numbers using the user parameter IVFIDISPLAY, by entering the value X for the user. In the standard system, only the document number from Materials Management is displayed.
25 Financial effects of Invoice Posting When an invoice is posted, SAP shifts the liabilityFrom the Goods Receipt/Invoice Receipt account (for the purchase order) to the vendor accountUpon posting invoice, SAP:Updates the Purchase OrderUpdates the Material MasterCreates an Accounting DocumentInitiates the payment process within Financial Accounting
26 Invoice Receipt vendor and Reconciliation Account Amount owed isassigned and transferred tovendor account payable and automatically move to Account payable (A/P)Invoice receiptOnce we get the receipt –Debit GR/IR – now a washVendor AP Credit – we oweSome companies book it as a liability right away (previous slides), but it really isn’t until you receive the goodsUnique to SAP
27 Payment to Vendor Can be done automatically or manually Post Outgoing Payment vs. Payment ProgramElements of the Payment Transaction:Payment MethodBank from which they get paidItems to be PaidCalculate Payment AmountPrint Payment MediumProcess will create a financial accounting document to record the transaction
28 vendor and account payable is reduced Vendor PaymentAmount owed is paid tovendor and account payable is reducedBankOnce we get the receipt –Debit GR/IR – now a washVendor AP Credit – we owe (it is debited: now a wash)Some companies book it as a liability right away (previous slides), but it really isn’t until you receive the goodsUnique to SAPCredit bank account (paid, now we have less cash)
29 Procurement Processes Global Bike, Inc.Procurement Processes
35 Lab 5 Exercises: (Due date 3/2/2015) 1. Create raw materials2. Create purchase requisitions for trading goods3. Create Purchase orders for trading goods from PR4. Create goods receipt for trading goods5. Post invoice for purchasing trading goods6. Pay vendors for trading goods7. Create purchase order for raw materials8. Create goods receipt for raw materials9. Post invoice for purchasing raw materials10. Pay vendor for raw materials11. Review purchase order history12. Review stock status after purchase orders processed