Unit 3: Plain Procurement Process

Lesson 1 · Creating a Purchase Order

Key concepts

A purchase order (PO) is a legally binding, formal request to a supplier to deliver goods or services under the stated conditions. In this basic scenario all master data (supplier, material, info record) already exists. The PO also states whether the item goes to stock or is consumed directly by an account assignment object such as a cost center, asset or project. Goods receipt and invoice verification are later performed with reference to the PO, which makes it the backbone of the process.

A PO can be created without reference, or items can be copied from a reference document: another PO, a purchase requisition, a quotation or a contract. Even without a reference, the system proposes a great deal of data:

If the source of supply is one of your own plants, you create a stock transport order instead of a standard PO.

Structure of a purchase order

One PO can serve several plants, but every plant used must be assigned to the purchasing organization in the header.

Item categories

Item categories exist in requisitions, RFQs, contracts, scheduling agreements and POs. The document type determines which item categories are allowed; each item can have its own category. The item category defines whether a material number, an account assignment, a goods receipt and an invoice receipt are possible, mandatory or forbidden.

Two item categories are used only in contracts and allow items without a material number: M (material unknown) for similar materials with the same price – usable in quantity and value contracts – and W (material group) for materials of one material group with different prices – value contracts only.

System steps (Fiori: Manage Purchase Orders)

The Manage Purchase Orders app (F0842A) lists, monitors, displays, changes and creates POs. In it you can create items with the categories standard, consignment K, subcontracting L, third-party S and enhanced limit E. References possible on creation: contract, info record or existing PO.

1. Open Manage Purchase Orders and choose Create.
2. In the item area choose Add from Document.
3. Enter supplier and material, select Info Record as the reference type and start the search.
4. Mark the matching info record and choose Add Items; price and supplier data are copied.
5. Complete plant, quantity and delivery date, then choose Order to save.

In SAP GUI the equivalent is ME21N (create), ME22N (change) and ME23N (display); the document overview in ME21N lets you drag requisitions, contracts or POs into the new PO as references.

Messages (output)

Each purchasing document creates an output message when saved. The message waits in a queue until it is transmitted (print, e-mail, EDI/XML). Two dispatch timings exist:

• Send immediately – output happens as soon as the document is saved.
• Send later – a background job processes the queue periodically (the usual choice), or a user triggers output manually for urgent cases, e.g. with ME9F.

Header texts (printed at the top) and item texts are included in the output.

Configuration (IMG)

Lesson 2 · Posting a Goods Receipt

Key concepts

When the supplier delivers, the goods receipt (GR) is entered with reference to the PO. The system then proposes all open items, which speeds up entry and allows checks: Is it the right material? Is the quantity correct or is there an over-/underdelivery (tolerances)? For perishable goods, is the remaining shelf life sufficient (if the shelf-life expiration date check is active)? One PO item can be received in several GR lines, e.g. for different batches or storage locations.

Posting the GR has several effects:

• A material document is created (material, quantity, plant, storage location, movement type).
• If the GR is valuated, an accounting document is created as well (for stock material: debit stock account, credit GR/IR clearing account).
• The PO history is updated so buyers see what is still outstanding and can send reminders.
• Stock quantities (and value) in the material master are increased; MRP and analytics see the new stock.

Movement types

Every goods movement needs a three-character movement type. It distinguishes receipts, issues and transfer postings, controls the screen fields, the quantity update and, together with other factors, automatic account determination (via the transaction/event key).

Process flow

System steps

1. Open Post Goods Receipt for Purchasing Document (F0843) – or MIGO with action Goods Receipt and reference Purchase Order.
2. Enter the PO or scheduling agreement number, or search by supplier/plant and pick the document.
3. In the general information enter delivery note, bill of lading and document date; choose a GR slip version if needed (individual slip, with inspection text, or collective slip).
4. Select the items received, adjust quantities, set storage location and stock type (unrestricted, quality inspection, blocked).
5. Post. Display the result with MIGO (display) or MB03; check the PO history in ME23N; check stock with MMBE.

Configuration (IMG)

(Transaction OMJJ.)

Lesson 3 · Entering an Invoice

Key concepts

Logistics Invoice Verification (LIV) completes the procurement cycle: invoices and credit memos are entered and checked for content, price and arithmetic. Posting an invoice creates an MM invoice document and an FI accounting document, and updates the PO history. Payment itself and the analysis of open liabilities are not part of LIV – they belong to Financial Accounting.

From the supplier's invoice you enter the gross amount, tax, invoice date and the supplier's reference (invoice number). With a PO reference the system proposes invoicing party, items, quantities to invoice, expected amounts and payment terms; you overwrite where the actual invoice differs. If quantity or price differences exceed tolerances, the system warns and – depending on configuration – sets a payment block on the invoice.

Process flow

System steps

1. Open Create Supplier Invoice (F0859) or MIRO.
2. Choose the transaction (invoice, credit memo, subsequent debit/credit) and company code; enter gross amount, invoice date, reference and tax.
3. Enter the reference (PO, delivery note or bill of lading); the matching items are proposed.
4. Compare each item with the paper invoice; adjust amount, quantity or tax code and select the items to post.
5. Choose Simulate to see the account movements, then Post. If variances exceed tolerances the invoice is still posted but blocked for payment.
6. Display with MIR4; release blocked invoices later with MRBR.

Accounting effect (stock material, PO price = invoice price)

Configuration (IMG)

Unit summary & exam focus

The plain procurement process is PO → GR → invoice. The PO defines conditions and process (via item category), the GR creates a material document (plus accounting document if valuated) and updates PO history, and the invoice creates an MM invoice document and an FI document, blocked if variances exceed tolerances.

T-codes in this unit

Self-check questions

1. Which documents can serve as a reference when you create a PO?
   Answer

   Purchase requisition, existing purchase order, quotation and contract (in the Fiori app also info records).
2. What does the item category control?
   Answer

   Whether a material number, account assignment, goods receipt and invoice receipt are possible or mandatory – i.e. which procurement process (standard, consignment, subcontracting, third-party, stock transfer, limit, service) runs.
3. For item category K, are GR and IR possible?
   Answer

   A non-valuated GR is mandatory; an IR is not possible (settlement happens via consignment settlement after withdrawal).
4. Which documents does a valuated GR create?
   Answer

   A material document and an accounting document.
5. Is a movement type always required for a goods movement?
   Answer

   Yes – it identifies the kind of movement and drives quantity update, screen layout and account determination.
6. What happens if an invoice price variance exceeds the tolerance?
   Answer

   The invoice can be posted but is automatically blocked for payment; it must be released (e.g. MRBR).
7. When can you use a delivery note number as invoice reference?
   Answer

   Only if it was entered when the goods receipt was posted.