Creating a Purchase Order

Objective

After completing this lesson, you will be able to create a purchase order

Purchase Order: Details

Purchase Order

Diagram outlining the steps of a purchase order, from purchasing to suppliers or other plants.

You can minimize data entry time by creating purchase order items with reference to an existing purchase order, purchase requisition, quotation, or contract.

You can also enter a purchase order without referring to existing documents in the system. When you enter the purchase order data, the system suggests default values. For example, the system suggests the ordering address and the terms of payment and freight (incoterms) from the supplier master record. If a material master record exists, the material short text, the purchase order unit of measure, and the material group are transferred automatically. If a purchasing information record already exists in the system, a price can be proposed for the purchase order.

If the source of supply is a plant belonging to your company, you carry out a stock transport order. If you order from an external supplier, you create a standard purchase order.

Structure of a Purchase Order

With a single purchase order, you can procure materials or services for different plants. All plants in a purchase order must be assigned to the purchasing organization entered in the purchase order header.

Item Categories in Purchasing

Item categories are used in purchase requisitions, requests for quotation, purchasing contracts, scheduling agreements, and purchase orders. The item category enables you to map different procurement processes. The document type determines which item categories are available for selection. You can use different item categories for the individual items of a purchasing document.

The following are some of the predefined item categories:

  • Standard: This category is used for materials that are to be procured externally (account assignment is possible; material number is mandatory if there's no account assignment; GR (good receipt) and IR (invoice receipt) are possible).

  • Limit: You procure consumable materials or services with a value limit (material number is not possible; account assignment is mandatory, but account assignment category "Unknown" is possible; GR is not possible; IR is mandatory).

  • Consignment: The supplier makes the material available, which you then manage as consignment stock. The material belongs to the supplier until it is withdrawn. The placement of an ordered consignment material in storage does not immediately lead to the valuation of the material or the creation of a liability in relation to the supplier. A liability only arises when the material is withdrawn from the supplier consignment stock (material number is mandatory; non-valuated GR is mandatory; account assignment and IR are not possible).

  • Subcontracting: The finished product is ordered from a supplier. The components that the supplier requires to manufacture the end product are recorded as "material to be provided" items (material number and account assignment are possible; specification of the components to be provided required; GR is required; IR is possible).

  • Stock transport orders: The material is transferred from one plant to another (material number is mandatory; GR is mandatory; IR is not possible).

  • Third-party order: The supplier is to deliver the ordered material directly to a third party (for example, a customer). You receive the invoice for the material from the supplier (account assignment is mandatory; material number is possible; GR and IR are possible).

Item categories Material Unknown (M) and Material Group (W) are specific item categories that can only be used in contracts. Item categories M and W are intended for the entry of contract items without specification of a material number.

  • Item category M is recommended for similar materials of the same price. These can be materials with different material numbers or materials without material master records. This category can be used in quantity and value contracts.

  • Item category W is recommended for materials belonging to the same material group but with different prices. Item category W can only be used in value contracts.

SAP Fiori App Manage Purchase Orders

You can use the Manage Purchase Orders SAP Fiori app to select and monitor purchase orders, as well as display, change, and create them. When you create a new purchase order, you can refer to a contract, an info record, or an existing purchase order. This reduces the amount of manual data entry required, because a lot of information is proposed from the reference object.

With the Manage Purchase Orders app, you can create purchase order items with the item categories Standard, Consignment (K), Subcontracting (L), Third-party (S), and Enhanced Limit (E).

Messages

Purchasing documents can be issued by printer, e-mail, or XML.

You can issue all purchasing documents as messages. Each time you create a purchasing document, the system creates a message for the output of the document. This message is then placed in a message queue containing all messages that have not yet been transferred to the suppliers. To issue the message from the message queue, you have the following options:

  • Issue Immediately:

    The system issues the message directly from the queue, that is, when you save the document.

  • Issue Later:

    You either schedule a background job that processes the message queue at specific intervals, or you can start the output directly using the application provided for this purpose. As a rule, you issue the messages by scheduling a background job, and you start the issue manually only as an exception (such as for rush orders).

For the issued messages, you can specify the header texts and item-based texts that the system issues. The header text contains general information and is printed at the top of the purchase order. Item texts describe a purchase order item in more detail.

Create and Display a Purchase Order

ExerciseStart Exercise

Learning

SAP FacebookSAP YoutubeSAP LinkedIn