SAP FI Procurement Cycle and Documents |

Overview of the Procurement Cycle4.6fi_22.1

• Procurement is a component of the Materials Management module that supports the purchase of materials and / or services by an organization from sources outside the organization.

• In keeping with the system’s Document Principle, the steps in the Procurement Cycle are represented by various documents, which are produced in both the Materials Management and Financial Accounting Modules.

• Chapter Objectives– Provide an overview of how the system supports an

integrated Procurement Cycle.– Provide a description of the purpose and functionality of the

documents created in the system in support of the Procurement Cycle.

Chapter 22Procurement Cycle and Documents

Overview of the Procurement Cycle4.6fi_22.2

A/P GR/IRX X

A/P

X

Cash

X

PurchaseRequisition

(MM)Purchase

Order(MM)

Goods Receipt

(MM)

InvoiceVerification

(MM)

VendorPayment

(FI)

Inventory

X

GR/IR

X

Procurement Cycle

Overview of the Procurement Cycle4.6fi_22.3

PO

GR

Invoice

Create, Display and change

Vendor Master Records

Display VendorAccount Balances Process

OutgoingPayment

Display / ChangeVendor Line ItemsCreate Vendor

Invoices Manually

Procurement & Accounts Payable

Process Down Payment

and Credit Memo

Material ManagementMaterial Management

FI Accounts PayableFI Accounts Payable

Overview of the Procurement Cycle4.6fi_22.4

Main Procurement Cycle Documents

• Purchase Requisition• Request for Quotation• Quotation• Outline Agreements

• Contract• Scheduling Agreement

• Purchase Order• Goods Receipt• Invoice Verification• Vendor Payment

Overview of the Procurement Cycle4.6fi_22.5

MaterialsManagement Accounting

GR Document

Delivery DateMaterialsQuantityValues

Account Postings

IR Document

VendorQuantityValues

Account Postings

Goods Receipt

Post Goods ReceiptPost Goods Receipt

InvoiceVerification

Post InvoicePost Invoice

Purchasing

Save Order DocumentSave Order Document

Order Document

VendorDelivery DateConditionsMaterials

QuantitiesPrices

Documents in Materials Management

Overview of the Procurement Cycle4.6fi_22.6

Purchase Requisition

Internal Document Identifies demand for a

product

Authorizes Purchasing

Department to procure

Can be created automatically or

manually

Purchase Requisition

Overview of the Procurement Cycle4.6fi_22.7

Request for Quotation

PurchaseOrder

IdentifyVendor

ProcessRequisition

MRP Purchase Requisition

ManualCreation

Purchase Requisitions

Overview of the Procurement Cycle4.6fi_22.8

Legal contract between Buyer and Vendor

Purchase Order

Overview of the Procurement Cycle4.6fi_22.9

Contract

Purchase Requisition

Another PO

Vendor: 1000POPO

CreateReference RFQ

Purchase Order (PO)

Overview of the Procurement Cycle4.6fi_22.10

PurchaseRequisition

ReferenceRFQ

OutlineAgreement

Vendor: 1000

Vendor: 2000

Vendor: 3000

RFQRFQ

Create

Request For Quotations (RFQ)

Overview of the Procurement Cycle4.6fi_22.11

ComparisonVendor A $350/t Vendor B $480/t Vendor C $520/t Average $450/t

Vendor B, CRejection Letter

Vendor 1000

Quotation for RFQ: 1Item: 10Gross Price: $400/tDiscount: $50

Vendor 2000Quotation for RFQ: 2Item: 10Gross Price: $400/tSurcharge: 20%

Vendor 3000Quotation for RFQ: 3Item: 10Gross Price: $500/tFixed Costs: $20

Purchase OrderMat Qty PriceSteel 2t $350/t

Vendor 1000Info. Record

Quotations

Overview of the Procurement Cycle4.6fi_22.12

ReleaseOrder

DeliverySchedule

Contract Qty

Total:

SchedulingAgreement

Contract $

Total:

Outline Agreements

Overview of the Procurement Cycle4.6fi_22.13

Create

Requisition

Request forQuotation

ReferenceContract

Contract

ReleaseOrder

Quantity

1 2 3 4 5 6

7 8 9 10 11 12 13

14 15 16 17 18 19 20

21 22 23 24 25 26 27

28 29 30 31

March 1997

Contracts

Overview of the Procurement Cycle4.6fi_22.14

Requisition ReferenceRFQ

ReferenceSchedulingAgreement

VendorVendor

One-Time VendorOne-Time Vendor

History

VendorSchedulingAgreement Delivery

Schedule1/303/305/30

Scheduling Agreements

Overview of the Procurement Cycle4.6fi_22.15

GoodsReceipt

Vendor Buyer

Goods Receipt (GR) Document

Overview of the Procurement Cycle4.6fi_22.16

GR/IR ClearingStock

Inward movement on goods receipt

Posting a Goods Receipt

Overview of the Procurement Cycle4.6fi_22.17

GoodsReceipt

PO

InvoiceVerification

Invoice

Open Items

Materials Management Financial Accounting

Invoice Verification

Overview of the Procurement Cycle4.6fi_22.18

GR/IR ClearingStock Vendor

Goods Receipt

Invoice Receipt (Invoice Verification)

Posting the Invoice

Overview of the Procurement Cycle4.6fi_22.19

Purchase Order

Goods Receipt

Invoice Posting

PaymentPayment

MM

MM

MM

FI

Payment in the Procurement Cycle

Overview of the Procurement Cycle4.6fi_22.20

ManualPayment

PaymentProgram

Vendor A Vendor A Vendor B Vendor C

InvoiceIn

Check Bank Transfer

OR

InvoiceInInvoiceInInvoice

Payment Processing

Overview of the Procurement Cycle4.6fi_22.21

PAYMENT(Manual or via Payment Program)

Create a VendorPayment

Document

Clear theVendor

Open Item

Create a Payment

Form

Post to Vendor AccountPost to G/L Accounts

Payment Processing Results

Overview of the Procurement Cycle4.6fi_22.22

Stock Material withMaterial master

record

Update @ GR Time to STOCK ACCOUNT

Receive into Stock

Consumable Material(Non-Stock)

ACCOUNT ASSIGNMENT ??

ACCOUNT ASSIGNMENT ??

Enter Account Assignment Category

Automatic Account Assignment from

Material Master Data

Manual AccountAssignment - User

Must Enter Account Data

Update @ GR Time to CONSUMPTION or

ASSET ACCOUNT

Account Assignment Category

Overview of the Procurement Cycle4.6fi_22.23

Account Assignment Categories

Create Order DocumentAssetSales OrderCustomer RequirementsProduction Order

ProjectProject - Make to OrderUnknownAll Auxiliary Account Assignment

ACEF

PQUX

K Cost Center

Overview of the Procurement Cycle4.6fi_22.24

A/P

X

Cash

X

PurchaseRequisition

(MM)

PurchaseOrder(MM)

GoodsReceipt(MM)

InvoiceVerification

(MM)

VendorPayment

(FI)

Inventory

X

GR/IR

X

A/P GR/IRX X

(FI) (FI)

Procurement Cycle

Overview of the Procurement Cycle4.6fi_22.25

Materials Management Documents Chapter Summary

• Key Terms– Procurement Cycle– Materials Management Documents– Order Document– Purchase Requisition– Request for Quotation– Purchase Order– Quotations– Outline Agreement

Overview of the Procurement Cycle4.6fi_22.26

Materials Management Documents Chapter Summary

• Key Terms– Contract– Scheduling Agreement– Goods Movement– Goods Receipt – Invoice Receipt– Invoice Verification– Payment Program– Account Assignment Category