PROCUREMENT PROCESS

G / L: P/L - Balance sheet

Material Management Integration:
Reconciliation Subledger (FI) Financial Accounting: Purchasing and FI maintains data on the VENDOR master data (is a creditor account in FI) that contains account.+ procur. info
Consumption Raw Stock Raw Bank GR / IR Vendor Vendor (SD) Sales and Distribution: requirements that arrives to Sales can be passed on to Purchasing. when a P.Req. is created, it can be directly assigned to a Sales Order.
300 3300 3300 3300 3300 3300 3300 3300 Production Planning: and MM are linked through inventory needs. Inv. Mgt is responsible for assuring all components required for production.
3000
Plant Maintenance and MM are linked by BOM. It’s possible to post a GR with ref to an equipment BOM and to withdraw part for maintenance orders too.
1 1 3 2 1 3 2 3 2 Integration in Logistics: the Inv. Mgt system (manages Stock (Q) quantity + ($) value) can be extended by the WMS which manages storage (also Storage Bins)
Invoice Verification and Vendor Payment
Account Posting If there are variances between the PO or GR vs INVOICE, the system warns the user and blocks the invoice for payment.
Posting the invoice completes the process of Invoice Verification.
Good Receipt : Debit Stock, Credit GR/IR
Cost Invoice Receipt: Debit GR/IR, Credit Vendor (Recon.+Subledger) (=> acc. payable) Logistics: Invoice Verification: Effects
element Pay Vendor: Debit Vendor (Recon.+Subledger), Credit Bank/Cash Types of Invoice Verification: FI - Accounting document is created
Invoice items can be posted with reference to: PO History is updated
Goods receipt based Invoice verification: invoices for quantities greater Open Item is created in the vendor’s account
than the goods receipt cannot be posted. If invoice $ differs from the PO $, the stock value and the current moving price is
Info Conditio Purchase order based Invoice verification: you can settle all items, recalculated and updated in the material master, for a material valuated with mov. aver. $.
Vendor Material Output _ Account affected:
record n irrespective of whether there have been partial deliveries.
The postings are automatically made to the corresponding G/L accounts. .Provision in the GR/IR clearing account are reversed - debited
Account Condition Output When an Invoice is posted, an open item is credited on the vendor account. .Reconc. Vendor is credited Account payable
Material type .Subledger Vendor is credited
group Industry sector types types
. NON Stock raw-consum. raw, Bank
Other Dpt (account) manage the payment and evaluation of invoices.
Therefore, Inv. Verif. creates a link between Mat. Mgt and external (FI) or Internal account. (CO)
Material Mgt, manages the procurement process until Invoice verif.
Is an Internal document
Manually by the Source of
Dep. Respons. Purchase supply Purchase Invoice/
Pay
Automatically Requisition order Billing
Info record with / without
by MRP Quotation reference Org. level needed for a PO
Contract Plant
10
Source list Purch. Org. MM FI FI
20 Vendor 2 3
10 Stock item
Header Data:
Storage loc not nec. until good
Doc Doc Doc
Doc. #
Item: are not received.
Date
20 Non-stock item Vendor Material # Vendor (Recon.+Subledger) are debited,
Terms of payment Delivery date Bank/Cash is credited
Item Category Currency Q, $, Text
Movement type: determines the kind of goods movements. What happens to
Consumable Material: Item category: defines the process used to procure a material
Goods Receipt the items, how they are handled…key to differentiate between goods
Are materials or services that are procured specifically for an account or service. movements (ex: GR, GI or transfer postings). (Inv. Mgt)
assignment object. (EX: office supplies; computer systems) Determines which stock or consumption accounts are updated (posted) in
Value is recorded in the cost element or asset accounts. S – Standard: material procured externally Financial Accounting.
S – Stock transport order: mat. is transf. from 1 plant to another 103 you enter goods receipt against Determines the structure of the screen when entering documents and updating
When a material is procured directly for consumption, no material master
S – Subcontracting: vendor manufacture a component production and purchase orders 101 quantity fields.
record is necessary. C – Consignment: Liability only when mat. is withdrawn from
In the case of consumable material with a master record: consg. stock, no when the stock is placed in the consg. store
o Not subject to inventory management (on either quantity or value basis) T – Third-party order: material order from a vendor with the
Storage location
o Subject to inventory management on a quantity, but not a value basis instruction to deliver the goods directly to a 3er party (customer)
F - Unrestricted Documents generated
Goods
Posting a Goods Receipt by referencing to a Purchase Order has a 3 advantages: receipt 105 Q – Quality Insp. MM FI CO
Account Assign. Objects 1
The goods receiving department can check whether the goods delivered are what was actually ordered.
MM area Doc Doc Doc
A – Asset Data from PO is copied automatically to the GR transaction. X – Blocked Stock
C – Cost Center PO history is updated upon GR creation. Doc
P – Project Stock type
P – Prod. Order When goods receipt to the warehouse is posted: Effects of Goods Receipt: Process of GR with Transfer Order
S – Sales Order A MM doc. is created: with info such as material delivered MM - Material document is created (quantity) GR posting is subject to WMS: checks for each PO item and
and quantity delivered; storage location and associated plant.
FI - Accounting document is created (value) generates:
An FI doc. is created: which record the effects the material
movement has on the value of the stock. CO – Cost Accounting document cost analysis purpose MM + FI docs for goods movt.:
Material master is updated (here not in the inv. verif) _MM doc.: Header + Item (q, descrip, stor.loc., plant), is
Goods movements: A transaction that causes a stock change. Include both external and internal identified by material document number and year.
movements. You can distinguish between: _ Account affected:
_FI doc.: Header + Item (G/L acc. #, $) records the effects of
Goods receipt (GR): is a goods movement in which the receipt of goods from both an external vendor .Stock raw (+ Consumption Raw) is debited material movements on the accounts. Is identified by CC (of the
and from production is posted. A GR leads to an increase of warehouse stock. .Provision in the GR/IR is credited plant); acc doc. #, fiscal year.
Goods issue (GI): is a goods movement in which a material withdrawal, goods issue, material . NON Bank, Reconc. Vendor, Subdledger Vendor Transfer requirement doc
PO History for a PO items is updated (when a GR is Incoming quantity of materials into the goods receiving area
consumption, or goods shipment is posted to a customer. A GI leads to a decrease of warehouse stock. An Interim storage area in the receiving warehouse number
entered with reference to this item)
Stock trasfer: is removal of materials from particular storage location and placement into another A transfer order is used to move the items from the receiving
storage location. Stock transfers can take place both within the same plant and between two plants. Quality Management (Inspection lot is created)
area
Transer posting: changes the stock identification or qualification of a material regardless of it’s a Warehouse Management (Transfer Requir. is created) (in a put away process) the destination storage type, the storage
physical movement or not. (EX: release of the stock for quality inspection). Output may be generated (GR slip) section, storage bin are determined