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Lecture4v21.pptxLecture 4 Procurement to Pay (PTP)
FIN319
Learning Objectives
Understand the elements involved on the Procurement to Pay (PTP) process
Understand the goal of Purchasing (PU) and Inventory Management (IM)
Understand the PU elements involved on the PTP process
Understand the IM elements involved on the PTP process
Understand the FI elements involved on the PTP process
Understand the integration points between PU, IMWM and FICO
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Introduction
Procurement to Pay
Procurement to Pay (PTP) Business Process
Procurement to Pay
Covers the process sourcing to the vendor until the payment of goods or services
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Requisition
Sourcing
Purchase Order
Receiving
Invoice receipt
Outgoing payment
Procurement to Pay (PTP) Business Process
Material requisition
Internal request of needed material
Sourcing
Identification of approved sources of material
Order
Formal request from a purchasing organization to a supplier for needed material
Good receipt (financial impact)
Checks the quantity of goods received against the order quantity.
Invoice receipt (financial impact)
Three way match between purchase order, goods receipt, and invoice.
Payment (financial impact)
Goal
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Procurement to Pay (PTP) Organizational Structure
Client
An independent environment in the system
Company Code
Represents an independent legal accounting unit
Balanced set of books, as required by law, are prepared at this level
A client may have more than one company code
Plant
The plant represents a production unit and is the central organizational unit in Materials Management and Production Planning.
Manufacturing, distribution, purchasing or maintenance facility
Storage location
An organizational unit allowing differentiation between the various stocks of a material in a plant
Represents the legal and/or organizational views of an enterprise and it forms a framework that supports the activities of a business in the manner desired by management
Org
Procurement to Pay (PTP) Organizational Structure (Cont)
Purchasing Organization
Unit within the enterprise that performs strategic activities related to purchasing for one or more plants.
Evaluates vendors
Identify vendors
Negotiates contracts and agreements, pricing and other terms
An enterprise may have more one or more purchasing organizations
Types
Enterprise level (central)
Company code (by legal entity)
Plant level (by site)
Purchasing group
Key that represents the buyer or group of buyers who are responsible for certain purchasing activities
Channel of communication for vendors
Org
Procurement to Pay (PTP) Organizational Structure (Cont)
Types of Purchasing orgs
Central purchasing
Company code specific
Plant specific
Org
Procurement to Pay Global Bike Finance Structure
Two company codes
Two Purchasing org
Five plants
3 under GBI
2 under Global Bike Germany
Multiple storage locations that determine inventory status
Global Bike
Global Bike Inc
Global Bike Germany GmbH
Dallas
Client
Company code
Plants
San Diego
Miami
Heilderberg
Hamburg
FG Inv
Trading
Misc
Raw Inv
WIP
Misc
FG Inv
FG Inv
Trading
Misc
Raw Inv
WIP
Misc
FG Inv
FG Inv
Trading
Misc
Storage locations
Procurement to Pay Data Types
Master records
Single source of common business data used across SAP.
Transactional records
Data that represents a PTP event.
Purchasing
Finance: AP subledger
Purchasing
Inventory
Requisitions
Oeder
Goods receipt
Invoice & Payment
Material master
Vendor master
Info record
Source list
Procurement to Pay (PTP) Reflection
What of the tree purchase org configuration options do you think Global Bike has?
Why do you think GBI decided to implement this option?
Purchasing
Procurement to Pay
Purchasing (PU) Introduction
Purchasing contains the central elements of the procurement activates within the company from gathering requirements to the end of the procurement cycle and allow to control the largest part of the procurement to pay (PTP) process.
Purchasing
Purchasing
Requirements
Procurement
Quote
Purchasing (PU) Sub-modules
Purchasing
Outline agreement
Control the orders placed with vendors
Control the long term purchasing contracts with vendors
Master data
Manage the purchasing master data part of the PTP process
Purchase req
Control requisitions of good and services for the purchasing organization
Purchase order
RFQ/Quotation
Controls the request for quotes (RFQ) and Quotes that are part of the PTP process
Purchasing (PU) Transactions
| Tcode | Description | Type |
| XK01 | Vendor Master | Master Data |
| ME11 | Info record | Master Data |
| ME01 | Source List | Master Data |
| ME51N | Create Purchase Requisition | Transaction |
| ME41 | Create RFQ | Transaction |
| ME21N | Create Purchase Order | Transaction |
| ME31L | Create Scheduling Agreement | Transaction |
Purchasing
Purchasing (PU) Master Data: Vendor Master
Vendor Master Account is data needed to conduct business with vendors and execute transactions related with the purchasing process
Purchasing
General (Client)
Purchasing org
Account
Name
Address
Payment term
Salesman’ name
Partner function
Purchasing currency
Price determination
Purchasing (PU) Vendor Master (XK01)
General data (Client) level
Account
Name
Address
Bank information
Purchasing org level
Payment terms
Currency
Purchasing
Purchasing and Inventory Management Master Data: Material Master
The material master defines, among other things, how a product is sold, manufactured, purchased, inventoried and costed.
Information is grouped into views that are organized by business function.
The majority of views of master data are stored at the plant level.
Purchasing
Contains all of the key information a company needs to manage a material within its organization.
Basic Data
Material
Purchasing & Material Management
Unit of measure
Material group
Description
Purchasing
MRP1, 2 and 3
Purchasing group
Sales org data 1, 2 and general
Storage 1
Purchasing and Inventory Management Material Master (MM01)
Material
Industry sector
Views
Basic Data
Sales
Purchasing
Plant
MRP
Storage
Purchasing
Purchasing and Inventory Management (PU& IM) Material Master Views
Basic
Sales
Purchasing
Plant
Forecast
Storage
Quality
Accounting
Controlling
Purchasing
Purchasing (PU) Master Data: Info record
Contains the relationship between a vendor and a material containing data like current or future prices, conditions, and lead times.
Purchasing
General (Client)
Purchasing org & plant
Account
Name
Address
Purchasing org
Control data
Conditions
Lead times
Shipping instructions
Tax code
Price and validities
Inco-terms
Material
Purchasing (PU) Info record(ME11)
Client level
Account (Vendor)
Name
Address
Material
Purchasing org level
Lead times
Shipping instructions
Tax code
Price and validity
Inco-terms
Purchasing
Purchasing (PU) Info record
Allows buyers to quickly determine: Which vendors have offered or supplied specific materials
Info Records contain: Data on pricing and conditions
Last purchase order
Tolerance limits for deliveries
Specific lead times
Availability periods
Vendor Evaluation data
Serves as default information for Purchase Orders
Purchasing
Purchasing (PU) Master Data: Sourcing list
Sourcing is the assignment of a source of supply to a requisition. It specifies the allowed sources of material for certain plant for a predefined period.
Purchasing
General
Purchasing
Material
Validity
Plant
Vendor
Purchasing org
Purchasing (PU) Sourcing list (ME01)
Client level
Material
Plant
Purchasing org level
Validity
Vendor
Purchasing org.
Purchasing
Purchasing (PU) Sourcing Types
Internal.
Within the enterprise (STO)
Source list
Record with list of allowed vendors
Outline agreement
Long term purchasing agreements
Contracts
Scheduling agreements
Request for Quote (RFQ)
Invitation to submit quotes
Purchasing
Source
Internal STO
External source list
External agreement
External RFQ
Purchasing (PU) Purchase Requisition
Requisitions can be created two ways:
Directly - Manually person creating determines: what, how much, and when
Indirectly - Automatically MRP, Production Orders, Maintenance Orders, Sales Orders
Purchasing
Internal Document instructing the purchasing department to request a specific good or service for a specified time.
Enter/generation of requisition
Shopping cart
Approval
Sourcing
Purchasing (PU) Transaction: Purchase Requisition(ME51N)
Header data
Reason for the request
Item details
Material
Quantity
Delivery date
Plant
Storage location
Purchasing
Requisition
Sourcing
Purchase Order
Receiving
Invoice receipt
Outgoing payment
Purchasing (PU) Request for Quote
It indicates:
Price
Terms and conditions
Purchasing
It is a form of invitation that a company sent to their vendors to submit quoting for goods or services in order to select the best option.
Sourcing: RFQ
Maintain quotes
Vendor selection
PO creation
Purchasing (PU) Transaction: RFQ (ME41)
RFQ type
Date
Quotation Dateline
Purchasing org and group
Plant
Purchasing
Requisition
Sourcing
Purchase Order
Receiving
Invoice receipt
Outgoing payment
Purchasing (PU) Purchase Order
Is a formal request to a vendor for a specific material or service under agreed stated conditions
Can be created manually
Reference another purchase order
Reference a purchase requisition
Reference a RFQ/Quotation
Without a reference
Can be created automatically
Types of purchase or orders
Standard (stock)
Services
Subcontracting
Third-party
Consignment
The PO type is identified in the item category
Purchasing
Purchasing (PU) Transaction: Purchase Order(ME21N)
Header data
Purchase org
Purchase group
Company code
Others
Item details
Item category
Material & Qty
Delivery date
Plant & Storage loc
Purchasing
Requisition
Sourcing
Purchase Order
Receiving
Invoice receipt
Outgoing payment
Purchasing (PU) Scheduling Agreement
One of the outline agreement options of source
Long term purchasing agreement where total quantity of materials is spread over a certain period in a delivery schedule, consisting of lines items indicating quantities and their planned delivery date
Purchasing
Determine requirements (MRP)
Scheduling agreement
Purchase order processing
Purchasing (PU) Transaction: Scheduling Agreement (ME31L)
Header
Vendor
Agreement type and date
Purchasing org & terms
Items details
Material & Qty
Delivery date
Plant & Storage loc
Purchasing
Requisition
Sourcing
Purchase Order
Receiving
Invoice receipt
Outgoing payment
Purchasing (PU) Reflection
Why purchase requisitions are important for internal control?
What is the difference between a Purchase order and an scheduling agreement and when to use each one?
Why is important to have a vendor source list?
Inventory
Procurement to Pay
Inventory Management (IM) Introduction
Inventory and Warehouse management deals with placing and handling stock received from vendors in the correct place within the company’s premises and plays a relevant element in the procurement to pay (PTP) process.
Inventory
Inventory control
Stock
Purchase
GL
Inventory Management (IM) Sub-modules
Inventory
Subcontracting
Controls the period processing of inventory
Controls the subcontracting of goods and services
Good Movements
Control the in and outs of inventory
Periodic Processing
Material Docs
Control the change, display, reversal of material documents
Inventory Management (IM) Transactions
Inventory
| Tcode | Description | Type |
| MM01 | Material Master | Master Data |
| MIGO | Create Goods Receipts | Transaction |
| MB03 | Display Material Doc | Transaction |
Inventory Management (IM) Goods Receipts
Goods movement in which we accept goods into our system
If material is delivered against a PO we will reference the PO
Review we received what we order
Material
Quantity
Updates physical inventory and create a history track within the PO
Inventory
PO
Vendor notification
Vendor
Shipment
Goods receipts
Inventory Management (IM) Material Movements Types
It is a three digit key that represents a movement of goods
Examples of movement types
101, goods receipt into warehouse
103, good receipt into blocked stock
122, return goods to vendor
231, consumption for a sales order
Inventory
Inventory Management (IM) Transaction: Goods Receipts (MIGO)
Type of movement
Purchasing order type
Purchasing document
Plant
Date
Quantity received
Inventory
Requisition
Sourcing
Purchase Order
Receiving
Invoice receipt
Outgoing payment
Inventory Management (IM) Good Receipt/Invoice Receipt Account (GRIR)
It is a control (intermediary) account that manage the goods and invoices in transit (when the goods arrive before the in
Goods Receipt (GR)
Purchase orders
Scheduling agreements
Invoice Receipt (IR)
Logistic invoice Verification
Inventory
Good Receipts (GR) - Credits
Invoice Receipt (IR) - Debits
Purchasing docs
Invoice docs
Inventory Management (IM) Event series: Goods Receipts
Material document
Stock quantities and values are updated
Accounting document
Inventory updates from price on material master
GRIR updates from PO reference
Any variance goes to PPV
PO is updated
Output generated
Inventory
Material document
Inventory valuation
Accounting document
PO History
Transaction output
Inventory Management (IM) Price Variance
Purchase Price Variance is a difference between:
At Good receipt
Material standard cost
Total Purchase price cost
At Invoice receipt
Total Purchaser price cost
Total Invoice cost
Inventory
Material cost
Standard price
Purchaser order
PO price
Inventory Management (IM) Goods Receipts: Financial impact
Purchaser Order ($1,550)
Plant
Document and Posting date
Material ($1,600)
Qty: 1
Line items
GL accounts
Posting key (debits and credits)
Amounts
Inventory
Document date:
09/10/2018
Posting date:
Document Number
1XXXXXXX
09/11/2018
Item in document currency
Line
PK
Account
Amount
Company code:
US00
Currency:
USD
Transaction date:
09/20/2018
001
40
20XXXX Inv
$1,600.00
002
50
31XXXX GRIR
$1,550.00-
003
50
76XXXX PPV
$ 50.00-
Inventory Management (IM) Transaction: Display Material Document (MB03)
Material document or
Material document list
Material
Plant
Vendor
Movement type
Inventory
Inventory (IM) Reflection
What is the primarily goal of goods receipt in SAP?
What do you think is the financial impact of a goods receipt?
What is the purpose of the account Goods Receipts/Invoice Receive (GRIR)?
Logistics Invoice Verification (LIV)
Procurement to Pay
Logistics Invoice Verification (LIV) Introduction
Processing of vendor invoices against a purchase order or scheduling agreement and recognize an account payable balance with the vendor
Three way match:
Purchase order
Goods receipt
Vendor invoice
If discrepancies happens during three way match, depending of tolerance configured in the system, the invoice will be block for investigation.
LIV
Logistics Invoice Verification (LIV) Transactions
LIV
| Tcode | Description | Type |
| MIRO | Invoice Receipt | Transactional |
Inventory Management (IM) Good Receipt/Invoice Receipt Account (GRIR)
It is a control (intermediary) account that manage the goods and invoices in transit (when the goods arrive before the in
Goods Receipt (GR)
Purchase orders
Scheduling agreements
Invoice Receipt (IR)
Logistic invoice Verification
LIV
Good Receipts (GR) - Credits
Invoice Receipt (IR) - Debits
Purchasing docs
Invoice docs
Logistics Invoice Verification (LIV) Invoice Receipt (MIRO)
Company code
Invoice date
Posting date
Amount and currency
Tax code
Reference and text
Purchasing document
LIV
Requisition
Sourcing
Purchase Order
Receiving
Invoice receipt
Outgoing payment
Logistics Invoice Verification (LIV) Event Series: Invoice Receipt
Material document
PO is updated
Accounting document
GRIR updates from PO reference
AP updates from invoice reference
Any variance goes to PPV
LIV
Material document
PO History
Accounting document
Inventory Management (IM) Price Variance
Purchase Price Variance is a difference between:
At Good receipt
Material standard cost
Total Purchase price cost
At Invoice receipt
Total Purchaser price cost
Total Invoice cost
Purchaser order
PO price
Invoice
Price
Qty
Logistics Invoice Verification (LIV) Invoice entry: Financial impact
Company code
Purchaser Order ($1,550)
Document (Invoice) and Posting date
Invoice amount ($1,555)
Currency
Line items
GL accounts
Posting key (debits and credits)
Amounts
Document date:
09/21/2018
Posting date:
Document Number
1XXXXXXX
09/21/2018
Item in document currency
Line
PK
Account
Amount
Company code:
US00
Currency:
USD
Transaction date:
09/21/2018
001
40
31XXXX GRIR
$1,550.00
002
31
ABC Vendor
$1,555.00-
003
40
76XXXX PPV
$ 5.00
LIV
Purchasing (PU) Transaction: Purchase order history (ME23N)
Header data
Purchase order
PO History
Good receipts
Invoice receipts
Purchasing
Logistics Invoice (IM & LIV) Reflection
What do you think is the financial impact of invoice receipt?
What is the difference between FI-AP and LIV?
Why is important to analyze purchase price variances?
Accounts Payable
Procurement to Pay
Accounts Payable (FI-AP) Introduction
Records and manages accounting data for all vendors
Integral part of the Procure to pay business process
All invoices and payments are executed by AP sub-module allowing to report on AP activity
Postings in accounts payable are simultaneously recorded in the G/L
AP is integrated with IMWM and Treasury (procurement to pay process)
AP
GL
Stock
Vendor invoice
Vendor payment
Accounts Payable (FI-AP) Outgoing Payment
Can be done automatically or manually
Post outgoing (F-53)
Payment program (F110)
Payments elements
Payment method
Bank from which we pay
Invoices to be paid
Payments amounts
Payment medium
Checks, wires, etc
Event series during a goods receipt
Accounting document
Vendor references invoice
Bank reference payment
PO is updated
Output generated
AP
Accounts Payable Transactions
| Tcode | Description | Type |
| F-53 | Outgoing payments | Transactional |
| F110 | Mass payments | Transactional |
| FB08, FB80 | Reverse document | Transactional |
| FDL5N | Account line items | Transactional |
| FK10N | Display balances | Transactional |
AP
Accounts Payable Transaction: Outgoing Payments (F-53)
Company code
Posting & document date
Document type
Currency
Bank Data (credit)
Value Data (payment date)
Vendor Data (debit)
Additional selections for line items identification
AP
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Requisition
Sourcing
Purchase Order
Receiving
Invoice receipt
Outgoing payment
Accounts Payable Transactions: Mass Payments (F110)
Run date
Payment ID
Parameters
Posting date
Doc entry date reference
Company code
Payment terms
Next payment
Vendor range
Select printout/data medium
AP
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Requisition
Sourcing
Purchase Order
Receiving
Invoice receipt
Outgoing payment
Accounts Payable Outgoing payments: Financial impact
Company code
Posting & Document date
Transaction date
Document number
Currency
Line items
Vendor (debit)
Bank (credit)
Amounts
Document date:
09/30/2018
Posting date:
Document Number
1XXXXXXX
09/30/2018
Item in document currency
Line
PK
Account
Amount
Company code:
US00
Currency:
USD
Transaction date:
09/30/2018
001
25
ABC Vendor
$1,555.00
002
50
10XXXX Bank
$1,555.00-
AP
Procurement to Pay (PTP) Integration PU, IM, LIV & FI-AP
Goods receipts
Dr Inventory based on standard price
Cr GRIR based on PO
Invoice receipt
Dr GRIR based on PO
Cr Vendor based on invoice
Payment
Dr Vendor based on invoice
Cr Bank based on payment
Integration
Requisition
Sourcing
Purchase Order
Receiving
Invoice receipt
Outgoing payment
Procurement to Pay Reflection
What are the non financial elements of the PTP process?
What are the financial elements of the PTP process?
Summary of Lecture
Elements of the Procurement to Pay (PTP) process
SAP PTP Org Structure
Goal of SAP Purchasing (PU) and SAP Inventory Management (IM)
PTP Master and Transactional data
SAP Purchasing (Requisition, PO)
SAP Inventory Management (Goods receipt)
SAP LIV (Invoice receipt)
SAP AP (Payment)
Integration points between PU, IMWM and FICO
Procurement to Pay (PTP) SAP Practice
Display
Master data
Transactional data
Create vendor
RFQ
Evaluate vendors
Create PO from RFQ
Goods receipt
Create material
Purchase requisition
Invoice receipt
Post payment
Review PO History
SAP Finance Practice: Data relationship
Display
Master data
Transactional data
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Vendor
Purchase requisition
Material
RFQ
Evaluate vendors
Create PO
Goods receipt
Review PO History
AP payment
Invoice receipt
Procurement to Pay (PTP) User Logon Screen
Click on the icon in your desktop.
Enter the following information:
System ID: Mongoose
Client: 112
User ID: LEARN-XXX
Enter your password
Enter Client, Server and Password
Client is a numeric field and this number represents a whole business entity.
Users are client specific which means that having a user identification in one client will only allow access to that particular client.
The system settings are stored in a file on your machine called the saplogin.ini file. This file is normally preconfigured centrally and then made available to all the users. Once you have been provided with the SAP Logon, you need a username and password to logon to the SAP system. The username and password is unique for each user and you do have the option to change your password using the New password button available on the screen.
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