• We discussed the GR/IR account used in the Materials Management process in SAP.
• Discuss when and why SAP uses this account, and
  • Discuss the transactions that affect this account,
  • Discuss what happens if the offsetting Debit to the account does not match the initial Credit

SAP University Alliances Authors Bret Wagner Stefan Weidner Materials Management (MM) Product SAP ERP 6.08 Global Bike Level Beginner Focus Cross-functional integration Materials Management Version 3.0 Last Update July 2016 SAP SE SA P ER P Functionality Inventory Management Purchasing MRP Physical Inventory Valuation Service Master Invoice Verification Product Catalogs Page 2 SA P ER P Unit Overview MM Organizational Structure MM Master Data MM Processes - Procure-to-Pay Process Page 3 SA P ER P MM Organizational Structure (Materials Mgmt.) Client - An independent environment in the system Company Code - Smallest org unit for which you can maintain a legal set of books Plant - Operating area or branch within a company Manufacturing, distribution, purchasing or maintenance facility Storage Location - An organizational unit allowing differentiation between the various stocks of a material in a plant Page 4 SA P ER P MM Organizational Structure (Purchasing) Purchasing Organization - The buying activity for a plant takes place at the purchasing organization - Organization unit responsible for procuring services and materials - Negotiates conditions of the purchase with the vendors Purchasing Group - Key that represents the buyer or group of buyers who are responsible for certain purchasing activities - Channel of communication for vendors Page 5 SA P ER P GBI Structure for Materials Management Client Global Bike Global Bike Inc. Dallas San Diego Global Bike Germany GmbH Miami Heidelberg Hamburg Raw Materials Trading Goods Trading Goods Raw Materials Trading Goods Semi-fin. Goods Finished Goods Finished Goods Semi-fin. Goods Finished Goods Finished Goods Miscellaneous Miscellaneous Finished Goods Miscellaneous Miscellaneous Company Code Plant Storage Location Miscellaneous Page 6 SA P ER P GBI Enterprise Structure in SAP ERP (Logistics) Shipping Point DL00 RM00 Storage Location MI00 TG00 TG00 SF00 HD00 RM00 FG00 MI00 MI00 TO00 TG00 FG00 FG00 FG00 SD00 SF00 MI00 FG00 HH00 PE00 TG00 TG00 FG00 FG00 MI00 MI00 MI00 MI00 Central Purchasing Organization (global) GL00 Purchasing Org. US00 CA00 PO DE00 Purchasing Group North America N00 Dallas DL00 CC US00 Client GBI Miami MI00 S. Diego Toronto SD00 TO00 CA00 AU00 PGr Europe E00 Heidelb. HD00 CC DE00 Hamburg HH00 Asia A00 Plant Perth PE00 AU00 Company Code Page 7 SA P ER P MM Master Data Vendor Master Data Material Master Data Purchasing Info Record Condition Master Data Output Master Data Page 8 SA P ER P Vendor Master Data Vendor Master - - - Contains all the necessary information needed to business with an external supplier Used and maintained primarily by the Purchasing and Accounting Departments Every vendor MUST have a master record Page 9 SA P ER P Vendor Master Views Client Level - Address - Vendor Number - Preferred Communication General Data Company Code Data - Reconciliation Account - Terms of Payment - Bank Account Company Code Data Financial Accounting (FI) Purchase Org Data - Purchasing Currency - Salesman's Name - Vendor Partners Purchasing Data Materials Mgmt (MM) Page 10 SA P ER P Vendor Master General Information relevant for the entire organization: Name Address Client Communication XXX Company Code specific information: Acc. Mgmt Payment Bank Company Code US00 Company Code DE00 Purch. Organization specific information: Incoterms Currency Purch. Org. US00 Purch. Org. DE00 Page 11 SA P ER P Material Master Data Material Master - - Contains all the information a company needs to manage about a material It is used by most components within the SAP system - Sales and Distribution Materials Management Production Plant Maintenance Accounting/Controlling Quality Management Material master data is stored in functional segments called Views Page 12 SA P ER P Material Master Views Sales Data Basic Data Purchasing Data Mat. Plan. Data Material Master Forecasting Data Storage Data Controlling Data Quality Data Accounting Data Page 13 SA P ER P Material Master General Information relevant for the entire organization: Name Weight of Measure Client Unit XXX Sales specific information: Delivering Plant Loading Grp Sales Org. UW00 Sales Org. UE00 Storage Location specific information: Stock Qty Storage Loc. FG00 Storage Loc. TG00 Page 14 SA P ER P Purchasing Information Record Framework for Purchase Order - Contains the relationship between a vendor and a material Can be created: - Manually - Automatically - Quotations - Automatically - Purch. Orders Purchasing Information Record Reporting - Vendor Evaluation Material Master Vendor Master Page 15 SA P ER P Allows buyers to quickly determine: - Which vendors have offered or supplied specific materials Info Records contain: - Purchasing Information Record 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 Page 16 SA P ER P Master Data in Use Purchase Order 45......01 Material Master Vendor Master Purchasing Information Record Page 17 SA P ER P Procure-To-Pay Process Purchase Requisition Vendor Selection Purchase Order Notify Vendor Payment to Vendor Invoice Receipt Vendor Shipment Goods Receipt Page 18 SA P ER P Purchase Requisition Internal Document instructing the purchasing department to request a specific good or service for a specified time 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 Page 19 SA P ER P Requisition Sourcing Once the requisition has been assigned a source of supply it can be released for processing There are a variety of ways that a purchasing department can process a requisition to determine the appropriate Source of Supply: - Internal Sourcing Requirements Source List Outlined Agreement RFQ Page 20 SA P ER P Internal Sourcing The requisition for materials could be satisfied by sources within our company. - It is possible that a plant within your firm could represent a potential source of supply for the material needed (centralized warehouse) - If an internal source is identified the requirement is covered by an internal procurement transaction (stock transport order) Page 21 SA P ER P Source List A source list is a record that specifies the allowed means for procuring a material for a certain plant within a given time period. - If the list contains a sole source the system will assign the vendor to the requisition. - If several options exist the system will display a list of vendors for you to choose from. - If no source has been established the system will revert to search information records and outline agreements. Page 22 SA P ER P Outline Agreement Requisitions can be satisfied through existing longer-term purchasing agreement These agreements are subdivided into: - Contracts Consists of items defining the individual materials, material groups, or services with prices and in many cases quantities - Quantity - Value - Scheduling Agreements Total quantity of material is spread over a certain period in a delivery schedule, consisting of line items indicating quantities and their planned delivery date Page 23 SA P ER P Request for Quotation If nothing exist in the system we may need to submit a request for quotation to our vendors. An RFQ is an invitation to a vendor by a Purchasing Organization to submit a bid for the supply of materials or services - The accepted quotations will generate Purchasing Information Records - Perform Quotation Price Comparisons - Finally Select a Quotation P.O. 45...12 Quote Pur generate Req. RFQ Vendor 1 Vendor 2 Quote Vendor 3 Quote Eval. Reject Letter Page 24 SA P ER P Quotation from Vendor The quotation received by your company is a legally binding offer, should decide to do business with the vendor, containing price's and conditions for the materials specified in the RFQ for a predefined period of time. - In SAP the RFQ and the Quotation will be become a single document, you will enter the vendor's response in the RFQ you created. Page 25 SA P ER P Vendor Evaluation once Identified Vendor evaluation helps purchasing evaluate vendors for sourcing while also enabling the company to monitor vendor relationships through performance scores and criteria you put in place. - Supports a maximum of 99 main criteria and 20 sub criteria for each main: Price - Price Level - Price History Quality - Goods Receipt - Quality Audit - Complaints/Rejection level Delivery - - - - - On-time delivery performance Quantity reliability Compliance with shipping instructions Confirmation Date You then must establish a scoring range (1 -100) and determine the weight factors of scores for each. Page 26 SA P ER P Purchase Order A purchase order is a formal request to a vendor for a specific material or service under the stated conditions Purchase Orders can be created manually - Reference a Purchase Order Reference a Purchase Requisition Reference a RFQ/Quotation Without Reference Purchase Orders can be create automatically Page 27 SA P ER P Purchase Order A purchase order can be used for a variety of purposes, the item category (procurement type) defined in the PO will dictate the use of the order and the process that the order will follow: - Standard Stock or Consumption - Services Subcontracting Third-Party Consignment Page 28 SA P ER P Purchase Order Structure Header Vendor Date Doc. Number Currency Terms of Payment PO Price Item Overview Purchase Order 45......01 Materials Quantities Delivery Date Price/UofM Line Item PO History Tolerances Line Price Delivery Schedule Page 29 SA P ER P Purchase Order Output Once a Purchase Order has been created the vendor needs to be notified - Printed E-mail EDI Fax XML There are a variety of forms that aid in the purchasing process and are generated from the Purchase Order - Purchase Order Output Order Acknowledgement Forms Reminders Schedule Agreements Page 30 SA P ER P Goods Receipt Purchase Order 45......01 Notify Vendor Vendor Goods Receipt Shipment Page 31 SA P ER P Goods Receipt Goods movement in which we accept goods into our system If materials are delivered against a Purchase Order we will reference that Order - Determine if we got what we ordered - System can purpose data for us from the PO Material, quantity - Purchase Order History is update with the receipt - Updates Physical Inventory - Updates Inventory G/L Account Page 32 SA P ER P Material Movements When a goods movement takes place it is represented by a Movement Type - Movement types are three-digit keys used to represent a movement of goods 101 - goods receipt into warehouse 103 - goods receipt into GR blocked stock 122 - return delivery to vendor 231 - consumption for a sales order 561 - initial entry of stock Destinations for Receipt of Goods - Warehouse - Unrestricted, Quality, Blocked - Quality - Goods Receipt Blocked Stock Page 33 SA P ER P Effects of a Goods Receipt When a Goods Movement for the receipt of goods takes place a series of events occur - Material Document is Created Accounting Document is Created Stock Quantities are Updated Stock Values are Updated Purchase Order is Updated Output can be generated (GR slip / pallet label) Page 34 SA P ER P Invoice Processing Incoming Invoices are reference against a Purchase Order to verify their content, prices, and arithmetic. If discrepancies arise between the purchase order or goods receipt and the invoice the system with generate a warning or an error - Depending on system configuration the difference could cause the system to Block the Invoice Purchase order - Target quantity - Target price Invoice receipt - Actual price Goods receipt - Actual quantity Page 35 SA P ER P Invoice Processing When an invoice is saved it applies the liability from the Goods Receipt of our Purchase Order to a Vendor Upon verification the: - Purchase Order is updated - Material Master is Updated (MAP) - Accounting Document is created Once the Invoice has been posted the verification process is completed and the payment process is initiated within Financial Accounting Page 36 SA P ER P Payment to Vendor Can be done automatically or manually - Post Outgoing Payment vs. Payment Program Elements of the Payment Transaction: - Payment Method Bank from which they get paid Items to be Paid Calculate Payment Amount Print Payment Medium Process will create a financial accounting document to record the transaction Page 37 SA P ER P Goods Receipt / Invoice Receipt Reconciliation Account Purchase requisition Purchase order No impact on Financial Accounting (FI) Materials Management (MM) and Financial Accounting (FI) via automatic account assignment Goods receipt Inventory GR / IR Dr Dr $100 Cr Cr $100 Page 38 SA P ER P Goods Receipt / Invoice Receipt Reconciliation Account Amount owed is assigned and transferred to vendor account payable Invoice receipt GR / IR Dr $100 Cr Vendor A/P Dr Cr $100 Page 39 SA P ER P Vendor Payment Amount owed is paid to vendor and account payable is reduced Bank Bank Dr Vendor A/P Cr Dr $100 $100 Cr Page 40 SA P ER P FI - MM Integration Point Goods Receipt Inventory Dr $100 Cr Invoice Receipt AP (Vendor) GR / IR Dr $100 Payment Program Cr $100 Dr $100 Cr $100 Bank Dr Cr $100 Page 41