Reviewing Purchase Order
Objective
After completing this lesson, you will be able to describe the ways purchase orders can be sent to suppliers.
Procure-to-Pay with Guided Buying Process Flow
Requisition vs. Purchase Order
- Purchase Requisition (PR)
- Approvable document, created by a user
- Represents a request for products or services from one or more suppliers
- After approval, used to generate one or more purchase orders
- Can be edited to create change orders or cancel orders
- Purchase Order (PO)
- Legal document, created by the system and never edited directly
- Represents a proposed agreement (contract) for the supply of goods or services
- Sent to one supplier
Purchase Order Generation
After a requisition is fully approved, the SAP Ariba system generates purchase orders. One requisition may become one or more purchase orders based on configuration.
For example, a requisition with items from two suppliers will be split into (at least) two orders.
The image shows how an approved purchase requsisition can become one or more purchase orders based on the specification. These orders are then shipped to the suppliers.
Possible Ways to Split Requisitions into Orders
- Suppliers
- One (or more) order(s) will be generated for each supplier
- Item Types
- Catalog and non-catalog items might be split into separate orders
- Delivery Locations
- Suppliers might require that each order only have one delivery location
- This option is set per supplier
- Contracts
- Items with an associated contract might be on one order while off-contract items are another
- Pcards
- Items purchased with a Pcard can be on a separate order from items which require an invoice
- Accounting Codes
- When using Pcards, orders with different accounting values can be split to a separate order
Ways to Send Orders to Suppliers
- Ariba Network
- Purchase Orders can be sent automatically to suppliers over the Ariba Network
- Suppliers can control how they receive those orders: integrated systems, email, fax, or by logging in to the Ariba Network portal
- Suppliers can start transacting easily with Standard Account and upgrade to a paid Enterprise Account if they need advanced features and advanced functionality
- Integrated ERP System
- Orders can be routed from SAP Ariba Buying to your ERP system
- You can control whether the orders are sent through the Ariba Network and copied to the ERP or sent exclusively through the ERP
- Even if you are sending orders through the Ariba Network, it is common to send orders to the ERP for accounting and reporting purposes
- Manual Orders
- Purchase Orders not transmitted automatically to suppliers will have to be processed manually
- Click the Print button on a Purchase Order, save the result as a PDF, and email it to the supplier
- You can also mail or fax orders if your supplier requires it
- Once you have processed the order, click the Marked Order button
Change Orders
Change orders are allowed if:
- Purchase Orders can be sent automatically to suppliers over Ariba Network
- The PO is in ordered status
- The supplier accepts change orders
- Your ERP supports change orders
- The original requestor or a member of purchasing-related group is taking action
Cancel Orders
Cancel orders are allowed if:-
- PO is in Ordered status
- The supplier accepts cancel orders
- Your ERP supports cancel orders
- The original requestor or a member of purchasing-related group is taking action
Close Order
- Orders can be closed by the Purchasing Administrator or a Purchasing Manager
- POs can be closed for change, receiving, invoicing, or all
- SAP Ariba can automatically close POs that have had no activity for a period of time
- Closed POs can be reopened