SAP B1 on Cloud Accounting Information System

CHAPTER 4: EXPENDITURE CYCLE

Overview

Procurement management is a core functionality of the SAP® Business One application that
enables you to automate and standardize your core procurement activities. It provides support for
purchasing planning, vendor selection, purchase order management, and vendor invoice payment, and
it lets you do all these rapidly, with the necessary integration across business functions in accounting
and warehouse management to drive success.

With SAP® Business One, you gain a detailed view of your vendors and support for an
integrated and centralized vendor data repository so you can make more effective purchasing decisions,
identify opportunities for cost savings, and better manage supplier relationships.

You can manage and maintain supplier related activities with SAP® Business One, including
issuing purchase orders, updating inventory quantities, calculating the landed cost value of imported
items, delivering goods, and handling returns and credits.

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If you create an A/P invoice without reference to the goods receipt PO, it will also increase the
quantity in stock. The goods return reduces the actual stock levels. The A/P credit memo reduces the
actual stock levels and also creates an accounting transaction by applying negative amounts to the
previously invoiced accounts.

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Purchasing Documents

Purchase Order
The purchase order is a document used to request items or services from a vendor at an agreed
upon price. When you enter a purchase order in SAP Business One, no value-based changes are posted
in the accounting system. However, the order quantities are listed in inventory management. You can
view the ordered quantities in various reports and windows, such as the Inventory Status report and the
Item Master Data window. This information is important for optimizing ordering transactions and
stockholding.

How to Create a Purchase Order

1. Go to Modules Menu > Purchasing A/P > Purchase Order. Purchase Order window will open.
2. Input the following information on the Purchase Order header:
Vendor : V10000 (Acme Associates)
Delivery Date : <date today>
3. Input the following information on the Contents tab.
Item/Service Type : Item
Item No : A00001
Quantity :5
4. Click Add.
5. Click the Last Data Record button on the Tool bar . Take note of the document number.

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Goods Receipt PO
You create this document when you receive goods from the vendor. When you create a goods
receipt PO, SAP Business One receives the goods into the warehouse, updates the quantities, and
creates an accounting journal if you manage the perpetual inventory.

How to Create a Goods Receipt PO

1. Go to Modules Menu > Purchasing A/P > Goods Receipt PO.
2. Input the vendor on the purchase order that you are receiving. In this case, V10000 (Acme
Associates.
3. Click Copy From on the lower right side corner of the Goods Receipt PO window.
4. Choose Purchase Orders.

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5. To accurately select the Purchase Order, refer to the Document number of the previously
created purchase order.
6. Click Choose.
7. Click Add on the Good Receipts PO window.

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A/P Invoices
The A/P invoice is a request for payment. It also records the cost in the profit and loss
statement. You can create an A/P invoice from multiple purchase orders and goods receipt POs. You
cannot change it since it is the legal accounting document that generates entries in the general ledger.

When you receive an A/P invoice, SAP Business One posts the related accounts for the vendor in
the accounting system. If no delivery for a purchase order precedes the A/P invoice, and if you are
purchasing items managed in the warehouse, the stocks are increased when you post the invoice.

How to Create an A/P Invoice

1. Select the Goods Receipt PO window then click Last Data Record on the tool bar.
2. The last added Goods Receipt PO will be shown. On the lower right corner of the Goods Receipt
PO window, click Copy to.
3. Select A/P Invoice. A/P invoice window will open (with all the contents copied from Goods
Receipt PO).
4. Click Add.

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Outgoing Payments
time to actually pay the money owed for
the goods and/or services rendered. This is done through the Banking Module. To go to the forms to
process outgoing payments, using the main menu, go to Banking > Outgoing Payments > Outgoing
Payments. Note that this is a different module than the previous three documents entirely.

How to Create Outgoing Payments

1. Go to Modules Menu > Banking > Outgoing Payments > Outgoing Payments.
2. Choose Vendor that you are going pay. In this case, V10000 (Acme Associates).
3. heck the invoice to be paid.
4. Click Payment Means on the tool bar.
5. Select the Payment Means (there are 4 options Check, Bank Transfer, Credit Card, Cash), in
this case, choose cash.
6. Choose G/L Account 160000 Petty Cash.
7. On the Total field, right click, select Copy Balance Due.
8. Click OK.
9. On the Outgoing Payments window, click Add.

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Linking Purchasing Documents

SAP Business One enables you to create target documents directly from base documents. For
example, you can create a Goods Receipt directly from the Purchase Order (and vice versa). In that case,
all the data that you entered in the sales order is automatically copied to the delivery.

Linking documents is important, as it establishes the connections between documents (by

extension, the procurement process) to form a paper trail. This trail will then allow all concerned in the
organization to track the progress of each given step. To see the document trail of a particular
Purchasing Document, right click on the document and choose relationship map.

How to view Relationship Map

1. Open a purchasing document. (Purchase Order, Goods Receipt PO, A/P Invoice)
2. Click Last Data Record, or other tools in the tool bar (First Data Record, Previous Record, Next
Record) to view the document you want to view.
3. Right click on the purchasing document and choose Relationship Map.

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