Topics

1. 2. 3. 4. 5. Consumable Materials & Account Assignment Category Required For The Procurement Process. Purchase Requisition. Converting Purchase Requisition to Purchase Order and Order Acknowledgement. Goods Receipt and Invoice Entry for Valuated and Non Valuated Goods. Blanket Purchase Order and Invoice Entry for Blanket Purchase Order.

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About This Module

Procurement of Consumable Material

The main focus of this module is the procurement of materials for direct consumption. This module also contrasts the procurement process for stock material with that for consumable material. It also explains what is meant by consumable material in an SAP system.

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About This Topic In this topic, we will look at an overview of the procurement of consumable materials. We will also look at the account assignment category required for this procurement process.

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Refer to the text in the next slide

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In an SAP system, consumable materials are materials or services that are subject to procurement and whose values are settled using either the cost element or asset accounts. So, a consumable material is procured directly for an account assignment object. For example, office supplies are materials that are assigned to the cost center, and computer systems are assigned to an asset account. A material master record is not necessary when a material is directly procured for consumption. In case of a consumable material with master record, there is no value-based inventory management; and consumption is automatically updated in the material master record.

In case of a consumable material without master record, you must manually enter a short description, a material group, and a purchase order unit in the document as this data is not available from a master record.

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-When creating Purchase Requisitions or Purchasing documents for consumable materials it is necessary to assign them to the account assignment. -In the SAP system while creating a PR or purchasing material document for consumables, you have to assign it to different account assignment categories. -An account assignment category determines the category of account assignment object that is to be charged, which account assignment data you must provide, and which accounts are debited when the goods receipt or invoice is posted. -For example if you are procuring an asset you can assign it to the account assignment category A. -If you use account assignment category A, you must enter the asset number on the account assignment data screen. The system automatically determines the G/L account to be charged from the asset number. You cannot enter it manually. You can see the different account assignment categories defined in the SAP system. If your procurement process requires additional account assignment categories it is possible to define the same in customizing.
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-When you are creating a PO it is possible to specify multiple account assignments. For example, if cost center 1 requests 100 folders and cost center 2 requires 200 folders you can club requirements of both the cost centers against a single item. -If you enter a multiple account assignment for an item, the GR nonvaluated indicator is automatically set for this item.

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-This figure explains the difference between the procurement process for stock items and consumables. -As you can see it is mandatory to create a material master record and enter material number if you are procuring a stock item, but it is not necessary for procurement of consumables. -For stock material, reference to the account assignment is not required, while it is mandatory for consumable procurement.
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Summary We now come to the end of the topic Consumable Material Overview. You should now be able to differentiate between the procurement of consumable materials and stock materials. You also know the significance of the account assignment category.

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About This Topic The topic introduces purchase requisition as an in-house instrument for entering requirements. This topic shows the creation of purchase requisitions using an example of consumable material with and without a material master record. Objective(s) Explains how to use transaction ME51N for purchase requisitions, describes how to create a purchase requisition with items including single and multiple account assignments, and shows how to request materials without a material master record.

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-In the SAP system, you can create a purchase requisition for stock as well as consumable material. -It is necessary for you to know the use of purchase requisitions. -Purchase requisitions are internal documents that you use to request the Purchasing department to procure a particular quantity of a material or a service for a particular date.
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-In SAP system you can create a purchase requisition manually or automatically from another SAP component such as MRP, maintenance orders and so on. -Once purchase requisition is created, you can convert purchase requisitions into RFQs, purchase orders or outline agreements.

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-You can create, change, and display purchase requisition by calling the transaction ME51N, ME52N, ME53N respectively. -As you can see in this figure these are single-screen transactions, and the screen is divided into different screen areas: header data, item overview, item details, and document overview.
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You can create a purchase requisition with single or multiple account assignment as seen in purchase order. As shown in this figure, if you want to request materials or services directly for an account assignment object, for example, for your cost center or for an asset, you must specify it in the item overview screen as shown. If you want to create a purchase requisition with multiple account assignments as seen here you can switch between multiple and single account assignments. With multiple account assignment for an item, you can decide whether the value of the item is to be distributed on a quantity basis or as a percentage. If there are partial invoices, you can choose whether the partial invoice amount is distributed proportionally to the account assignment items or the partial invoice amount is distributed to the account assignment items one after the other

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Refer to the text in the next slide

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 You can create a purchase requisition by using account assignment category U i.e. unknown if you do not know the account assignment object for which the material is being procured. But when you create a purchase order with reference to this purchase requisition, you must specify precise account assignment information because account assignment category Unknown is not allowed in the purchase orders.

When you create a purchase requisition item for valuated material, the valuation price is pulled from the material master record. For nonvaluated material or material without a master record, you must manually enter the valuation price. You can change the material valuation price while creating purchase requisition. It can be used for a value-related release procedure.

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-If you want to trace whether your purchase requisition item has been processed, you can see the processing status on the Status tab page in the item detail area. -The processing status provides information about whether the item has been ordered, not ordered or requested, or whether the item has been converted into an outline agreement. -In the item detail on the Contact person tab, the creation indicator provides information on how the purchase requisition was created in the system, manually or Compiled SAP- Portfolio ( Basics) automatically. dayal1005@gmail.com

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Refer to the text in the next slide

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Refer to the text in the next slide

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-The user-specific templates and public templates for purchase requisitions help you to create purchase requisitions more efficiently and reduce the effort involved in data entry for frequently requested materials.
-The transactions where the templates can be used include

Create Purchase Requisition.

Change Purchase Requisition. Create Purchase Order. Change Purchase Order. -When you want to save a template, click Save As Template under Create Purchase Requisition. A dialog box opens where you can name the template and define the template as a public template. When you want to load a template, click Load From Template. You are then presented with the options to copy the header and item data or only the item data to the new purchasing document

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Purchase Requisition

http://youtu.be/9Hs83nl_6cg

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-We now come to the end of the topic Purchase Requisition. -You should now be able to use the transaction ME51N to create purchase requisitions. You should also be able to create a purchase requisition with items including single and multiple account assignments. Also, you should be able to request materials without a material master record.

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About This Topic In this topic, we will look at how to convert purchase requisitions to purchase orders. We will also look at how to enter an order acknowledgement for a purchase order item and the confirmation categories used for purchase orders.
Objective(s) Explains how to create a purchase order with reference to a purchase requisition with account assignment.

Describes how to enter an order acknowledgement for a purchase order.

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-Once you have received a purchase requisition for consumable materials from user department you will have to convert this requisition into purchase order to get the required material.

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-Before the actual conversion of a purchase requisition item into PO, you can assign a source of supply to the PR item. -With a source of supply, you can manually or automatically convert a purchase requisition item into a purchase order. If a source of supply is not assigned in the purchase requisition item, then you must Compiled SAP- Portfolio ( Basics) manually enter the vendor in the purchase order. 27
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-When you are creating PO against PR, the system copies all the relevant details from PR to PO. -Valuation price is not copied if PR line item is created with material master record. If an info record is maintained, the system suggests Valid Info Record Price or you will have to enter the price in PO manually. -PR valuation price is copied in PO only for PR line items created without material master records. -When you are converting purchase requisition with account assignment U into purchase order, you will have to enter relevant account assignment category before processing PO as account assignment U is not allowed in PO.
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-Once you have issued purchase orders, the organization requests certain confirmations from the vendor to track the status of material delivery. This also helps you in planning the material requirement. -You may require confirmations such as order acknowledgement, loading confirmation, shipping notification after producing the material, and transportation details. -If you are expecting a confirmation for the PO item activate confirmation control, you can set confirmation control key in confirmation tab in Item details. -In the SAP system, you can either manually enter the confirmation details in the system or you can process it automatically through EDI.
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Converting Purchase Requisition to Purchase Order

http://youtu.be/nYK3mSg7qaY

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Order Acknowledgement

http://youtu.be/C1doMqE2FNs

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We now come to the end of the topic Purchase Order and Order Acknowledgement. You should now be able to create a purchase order with reference to a purchase requisition with account assignment. You should also be able to enter an order acknowledgement for a purchase order.

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About This Topic This topic describes goods receipt and invoice entry with context to the differences between valuated and nonvaluated goods receipt. It also explains invoice verification postings.

Objective(s)
Illustrates the differences between a valuated and nonvaluated goods receipt and explains the posting resulting from a nonvaluated goods receipt during invoice entry.

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You should know about valuation of goods receipts and invoice receipts for purchase order with account assignments. In the SAP system, several variants are possible for consumption material. These are valuated GR, nonvaluated GR, or no GR.

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-This figure shows the difference between stock item posting, valuated GR posting and nonvaluated GR posting. -When you post nonvaluated goods receipt, no postings take place in Accounting at the time of the goods receipt. -The value-based consumption posting does not take place until you post the invoice. -The commitment, which was created by the purchase order item and account assignment, can be reduced only through invoice entry.
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-When you post a goods receipt for a valuated GR, the system debits the consumption account and credits GR/IR account. When you post an IR, the system debits the GR/IR account and credits the vendor account. -When you post a goods receipt for a nonvaluated GR, the system does not update the consumption and GR/IR account. But when you post the invoice receipt, the system updates consumption account and posts an offsetting entry to the vendor account.
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GRN and Invoice Entr y for Valuated Goods

http://youtu.be/lzEMllAm0jE

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GRN and IR for Non Valuated Goods

http://youtu.be/DHxCe3S9KFs

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Summary

We now come to the end of the topic Valuated and Nonvaluated Goods Receipts. You should now be able to explain the difference between valuated and nonvaluated goods receipt. Also, you should be able to describe the postings resulting from a nonvaluated goods receipt during invoice entry.

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About This Topic

In this topic, we will look at the simplified procurement process for consumable materials by using the blanket purchase order. This allows one to dispense with the issue of individual release orders and recording of goods receipt, thus, minimizing the costs of procuring materials.

Objective(s)
Explains the purpose of item category in purchasing documents, the special aspects of procuring materials using a blanket purchase order, and describes how to create a blanket purchase order and enter invoices with reference to it with Logistics Invoice Verification.

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-In the SAP system, you can create a blanket order by using document type framework order and item category: limit. Once the order is issued, you can keep on posting the invoice till the validity date of orders reaches or till total order value limit exhausts.

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-When procuring consumable materials, in the standard process you create at least one purchase order for each procurement transaction. Against this purchase order you enter the IR and if required the GR too. -Hence if you procure same material from same vendor for the given time frame you end-up creating multiple orders.
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-You can reduce your efforts in creating multiple orders by creating a purchase order which has a longer validity period and an itemspecific value limit. -It is possible to procure different consumable materials or external services by using a blanket purchase order. You can create a blanket purchase order to avoid creating repetitive purchase orders. -In the blanket purchase order you can specify the time frame for which the order is valid and value limit against which you can post the invoice. -You can create a blanket PO with account assignment Unknown. For account assignment Unknown, you will have to enter account assignment manually at the time of invoice posting. Compiled SAP- Portfolio ( Basics) dayal1005@gmail.com

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-After you issue a purchase order you can enter invoice against it. -When you post the invoice before saving the system checks the validity period and overall Limit of the blanket purchase order and checks if the invoice satisfies both the criteria.
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Blanket purchase orders have some important characteristics. -Order type FO (or framework order) helps you to work with validity periods in a purchase order. -Item category B is used for limit items. For materials with this category, you do not have to specify the material number; instead you have to describe the material or services procured with a short text. You can use the account assignment category U or Unknown and goods receipts or service entries are not required. -If the account assignment is specified in the purchase orders, then this data is proposed in the invoices. In invoice verification for blanket purchase orders, it is possible to have multiple account assignments. Here it is also possible to check for the validity period and limit.
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-Item category enables you to replicate different procurement processes. For example, vendor consignment, subcontracting, and so on. -In customizing, you can also define which item category you can use with the respective document type.
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The item category also specifies whether a material number, an account assignment, a goods receipt, and an invoice receipt are possible or necessary for an item.

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Blanket Purchase Order

http://youtu.be/OZvH4zRUipk

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Invoice Entr y for Blanket Purchase Order

http://youtu.be/MhZCpKq6cGw

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Summary We now come to the end of the topic Blanket Purchase Order. You should now be able to explain the purpose of item category in purchasing documents, and the special aspects of procuring materials using a blanket purchase order. You should also be able to create a blanket purchase order and enter invoices based on a blanket purchase order with Logistics Invoice Verification.

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Module Summary
We have come to the end of this module. You should now be able to explain the procurement of consumable materials, significance of the account assignment category, the difference between valuated and nonvaluated goods receipt, the posting results from a valuated goods receipt during invoice entry, the purpose of item category in purchasing documents, and the special aspects of procuring materials using a blanket purchase order. You should also be able to create purchasing requisitions, purchase orders, and blanket purchase orders, request materials without a material master record, enter an order acknowledgement for a purchase order, and enter invoices based on a blanket purchase order with Logistics Invoice Verification.

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