1 IPO - INDIVIDUAL PURCHASE ORDER IN SAP MM & SD -M Jayababu (SAP MM & SAP S4 HANA Consultant

IPO- Individual Purchase Orders in SAP MM & SD

Individual purchase orders are used when your customer orders goods from you that are not in
stock and must be ordered from one or more external vendors.
Process Flow

During sales order entry, the system automatically creates a purchase requisition item. The
purchasing department creates a purchase order based on the requisition and the vendor ships
the goods directly to you (unlike third party order processing , where the vendor ships directly to
your customer).

You then ship the goods to your customer. While the goods are part of your inventory, you
manage them as part of the sales order stock. Sales order stock consists of stock that is
assigned to specific sales orders and cannot be used for other purposes.
The processing of individual purchase orders is controlled by the material type. Material types
define whether a material is produced only internally, can be ordered only from third-party
vendors, or whether both are possible.
For example, a material that is defined as a trading good can only be ordered from a third-party
vendor. However, it might be advantageous at times to procure products that are normally
produced internally (such as finished goods) from an external vendor.
Tracking Costs
You can track costs and revenues for individual purchase orders in the same way as you track
costs for make-to-order production. The material in question must be maintained for the MRP
group 0020 and a plant must be assigned at the item level in the sales order.

Creating Automatically
If you procure a material exclusively by individual purchase order, you can define in the material
master record that the material is always treated as an individual purchase order item during
sales processing.

The system will then automatically determine the appropriate item category TAB.
To identify a material as an individual purchase order item in the material master record,
enter BANC in the field Item category group on the Sales: sales org. 2 screen Via MM01

Material 2538
2 IPO - INDIVIDUAL PURCHASE ORDER IN SAP MM & SD -M Jayababu (SAP MM & SAP S4 HANA Consultant

➢ Define Schedule Line Categories

IMG-SD->Sales->Sales Documents->Schedule Lines-Define Schedule Line Categories
Schedule Line Categories “CB”

➢ Assign Schedule Line Categories

IMG-SD->Sales->Sales Documents->Schedule lines- Assign Schedule Line Categories

Assign Item Category “TAB” to Schedule Lines “CB”

3 IPO - INDIVIDUAL PURCHASE ORDER IN SAP MM & SD -M Jayababu (SAP MM & SAP S4 HANA Consultant

➢ Create sales Order Via VA01

Item Category “TAB”, Here customer has placed sales order to us with Rs.1450
Standard Order 2480 has been saved.
Display Sales Order Via VA03

Double Click on item

4 IPO - INDIVIDUAL PURCHASE ORDER IN SAP MM & SD -M Jayababu (SAP MM & SAP S4 HANA Consultant

Here you can see the PR at Schedule Line

➢ Change the PR Via ME52N

Assign the Externa supplier who is supplying to us

➢ Create PO with Ref PR Via ME21N

Drag the PR into Shopping Cart

5 IPO - INDIVIDUAL PURCHASE ORDER IN SAP MM & SD -M Jayababu (SAP MM & SAP S4 HANA Consultant

Account assignment “H” – Nonstock sales

Here I am buying this material from my external vendor for Rs.800
Standard PO created under the number 4500000818
6 IPO - INDIVIDUAL PURCHASE ORDER IN SAP MM & SD -M Jayababu (SAP MM & SAP S4 HANA Consultant

➢ Goods receipt Via MIGO

Here Movement Type “101 E” , Material document 5000001090

See the accounting entries
7 IPO - INDIVIDUAL PURCHASE ORDER IN SAP MM & SD -M Jayababu (SAP MM & SAP S4 HANA Consultant

➢ Check the stock Via MMBE

You can see here sales order stock 200 EA

➢ Invoice Verification with Ref to PO Via MIRO

Document no. 5100000433

8 IPO - INDIVIDUAL PURCHASE ORDER IN SAP MM & SD -M Jayababu (SAP MM & SAP S4 HANA Consultant

➢ Create Outbound Delivery Via VL01N

Enter Sales order, and shipping Point

Look at here we sending goods to the customer

Delivery 80002093 has been saved
➢ Display Outbound Delivery VL03N
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➢ Check the stock at our plant Via MMBE

Here sales stock has moved to the customer

➢ Billing Via VF01

Document 90001990 saved

Note: Sales order price and purchase order price shall be a different, because of profit.

Thank You
M. Jayababu (SAP MM & S4 HANA Consultant)
LinkedIn: https://www.linkedin.com/in/jayababu-muripindi-6a626861/