Procure To Pay Materials Management

Procure To Pay Process 1

RFQ Contracts Scheduling Agreements Procurement of Stock Consumable Purchasing Receipts & Invoice Verification

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Agenda
13/05/2011 - Friday

Introduction
Organizational Data Master Data Transactional Data Procurement Process and Integration

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Key Concepts
MM is about buying, receiving, storing, issuing, and verifying invoices for a material or service from a vendor
MM integrates with other SAP R/3 modules and requires crossfunctional thinking

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MM Business Concept
1 10
Payment

2
User
Purchasing Requisition

3
Accounting

Fiscal Book

RFQ

8
Logistics Invoice Verification

Purchasing Cycle
PO Items 10 ____ Contract 20 ____ Items 30 ____ 10 ____ 20 ____ 30 ____

4
Quotation

Goods Receipt

7
Vendor

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Organizational Data
Is the foundation which must exist within SAP R/3 before any MM business processes can be modeled or executed
Defines the companys organizational and physical entities

Plant Storage Location Purchasing Organization Purchasing Group

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Organizational Data
Purchasing Organizatio nOC01
Purchasin g Group 01

Client 100 Client Company 0001 Company Plant A Plant

Storage 0001 Storage 0002

Company 0002

Purchasin g Group 02

Plant B

Plant C

Lagerort 002
0003

Storage

Storage 0004

Storage 0005

Storage Location

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Master Data
Is static data which represents things (like account, cost center, material, vendor and employee numbers) rather than events (which would be transaction data)
Is a central repository built in layers with each SAP R/3 module adding its specific data to information already created by other modules

Is input to SAP R/3 transactions

Material Master Vendor Master

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Material Master

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Definition: Procurement of Stock Materials

Stock Materials
Placed in storage following Goods Receipt

When materials are ordered for Stock the system does not require an account assignment its determined automatically
Posting to the appropriate stock and consumption accounts occur automatically after each goods movement

The value & quantity of stocked materials are updated in the Material Master
Stock materials material must have a material master record.
Account Assignment Categories: <empty>: Stock Material A: Asset K: cost center Item Categories: <empty>: Standard K: Consignment L: Subcontracting S: Third-party D: Service
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Definition: Procurement of Non-Stock Materials & Services

Non-Stock Materials
When you procure for direct consumption, you specify the consumption purpose by entering an account assignment (i.e. a cost center) on the Purchase Order. On goods receipt, the material counts as having been consumed- no inventory is visible If a material is procured for direct consumption, the consumption accounts in Financial Accounting are posted when the goods receipt is entered. The total quantity and value of existing stocks of the material are not affected. Non-Stock material may have a material master record.
Account Assignment Categories: <empty>: Stock Material A: Asset K: cost center Item Categories: <empty>: Standard K: Consignment L: Subcontracting S: Third-party D: Service
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Vendor Master
Vendor Master Data
General Data
Relevant for purchasing and accounting Valid all organizational units

Purchase Order

Company Code Data

Relevant for Accounting Valid for Company Code

Purchasing Area Data

Relevant for purchasing Valid for Purchasing Organization

Contract

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Transaction Data
Is dynamic data, meaning it is typically changed or created many times in one day
Records a business activity or event

Purchase Requisition Contract Purchase Order Goods Receipt Invoice Verification

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Purchasing Documents
Requisition Purchase Order

Requisition
RFQ

Purchase Order
Quote A Quote B

RFQ

Quotation

Contract

Contract

Requisition: Informs purchasing of a requirement for a material or service Purchase Order: Buyers binding declaration of intention to purchase a material or service Request for Quotation (RFQ): Requests potential vendors to submit a quotation (price) Quotation: Contains the vendor's terms and conditions and allows for vendor selection Contract: Outline agreement indicating buying party's binding declaration of his intention to purchase a material or service within an agreed period

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Goods Receipt & Invoice Verification

Goods Receipt: Goods Receiving personnel can confirm the receipt of goods simply by entering the PO number. By specifying permissible tolerances, buyers can limit over- and under deliveries of ordered goods. Invoice Verification The system supports the checking and matching of invoices. The accounts payable clerk is notified of quantity and price variances because the system has access to PO and Goods Receipt data. This speeds the process of auditing and clearing invoices for payment.

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MM Integration Points with FI/CO

Purchase Requisition Purchase Order Scheduling Agreements Goods Receipt Invoice Receipt Goods Issue

Contracts

Commitment Update Actual Cost Update A/P G/L Account

MM
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FI/CO
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