Understanding the Receive Process

The last step in the request to receive process is receiving. In this step, the users confirm the receipt of goods or services having been rendered.

A purchase requisition (PR) is an approvable document that is created when you submit a request to purchase items. Each PR has a unique ID (such as PR3248) to identify it as it moves through the purchasing process.

Purchase requisitions are the first step in transactional procurement:

1. A user requests products or services by completing a PR and submitting it for approval.
2. The PR is routed to everyone identified in the approval flow based on preconfigured business rules.
3. Approvers approve or deny the PR. If it is fully approved, one or more purchase orders (POs) are created for each supplier. If the PR is denied, the user can withdraw it or edit it and resubmit it for approval.
4. Suppliers receive the PO, optionally send an order confirmation, and ship the ordered products or provide the ordered services.
5. You receive the items and submit receipts as the items arrive. If the items arrive in batches, the purchase order remains open until all items have been received.

Receiving is simply the acknowledgement by a user that their goods have arrived.

The process officially starts when the supplier ships the goods and the goods arrive at their destination.

When your system is configured, your administrator defines the details of your receiving process, such as the type of receipts to be used and who is authorized to perform receiving.

Receipts can be done manually, automatically, or a combination of both based on configurable business rules.

You can turn on approvals for receipts and SAP Ariba also supports partial receiving.

A receipt is an acknowledgment from the buying organization that ordered goods have arrived. The receiving process starts when a supplier ships ordered items and the items arrive at their shipping destination. When the shipment arrives, the person who receives the items submits a receipt document through SAP Ariba to acknowledge that goods have arrived.

During the configuration process, your administrator specifies the details of your organization’s receiving process such as which types of items require a receipt, who is authorized to perform receiving, and whether SAP Ariba should export completed receipts to your ERP system.

In the default configuration, you manually create receipts by quantity and submit them for approval. The system can also be configured to automatically create receipts and can be overridden to allow manual receiving based on order amount, line amount, commodity code, or line-item part number. In addition, your administrator can set tolerances for under-receiving thresholds and over-receiving allowances.

To view receiving options and perform receiving, you must belong to the group Purchasing User, Receiving Agent, or Receiving Manager.

• Acknowledgement that goods have arrived
• Starts when supplier ships goods and shipment arrives at destination
• Done manually or automatically or a combination of both
  • Configurable to support business rules
  • Receipts can be routed for approval
• Supports partial receiving
  • Receipts are entered as items arrive, so a given order can have multiple receipts

When a purchase requisition has been submitted and fully approved and a purchase order has been generated, the system will determine which line items will require a receipt.

The system will generate a receipt and will use the approval rules engine to determine who will be responsible for acting on the receipt and if the receipt will need to be approved.

At this point the status will be receiving.

Once the line item has been entered as received, the status will remain in receiving status until the entire order is received in full, then the status will be moved to received.

After a purchase requisition has been fully approved and a purchase order has been generated, SAP Ariba determines which items require a receipt. For items that require a receipt, it creates a receipt (RC) approvable document and it uses approval rules to determine who is responsible for entering the receipt and whether the receipt must be approved.

After a quantity of any item has been entered as received, the requisition moves to the Receiving state and stays in that state until additional receipts have been submitted for the full ordered quantity or amount. The requisition then moves into the Received state. Because ordered items can arrive from a supplier in multiple shipments, you enter receipts as items arrive. SAP Ariba keeps track of partial receipts and makes it easy to see how many items have been received and how many are still pending.

Receiving types define how the receiving will be done.

The system can be configured for manual receiving, which is performed by the requisitioner or some other designated user.

Auto receiving is performed automatically by the SAP Ariba system.

Or you can also configure your system for no receiving.

If no receiving is used, the system will then perform a two-way match between the purchase order and the invoice rather than the three way match, including the receipt.

If an item was set for auto receipt, you can always click receive manually to convert the receipt to manual.

Receiving types also determine how the receipt will be entered by item quantity or by dollar amount.

Receiving Types define how receiving is done:

• Manually: Receiving is performed by the requisitioner or other designated user.
• Auto-Receive: Receiving is performed automatically by SAP Ariba.
• No Receipt: No receipt is created.

If an order was auto-received, you can click the Receiving Manually button to convert the receiving type to Manual so that you can edit the receipt.

Receiving Types also define what you enter on the receipt:

• By Quantity: Specifies a quantity of the item being received.
• By Amount: Specifies a monetary value amount (such as the dollar amount) of the item being received.

Approval rules determine who will perform manual or receiving and who if anyone must approve the receipt.

There are two common receiving configurations. The first is receipt by requester, in this case, receiving is performed by the original requestor of the goods.

This user will also be the first approver in the approval flow if approvals are enabled for receipts.

The second configuration is receipt at central receiving, where receipts are performed by a member of a specific group based on some field on the order.

Receipt Approval Rules define who performs the manual receiving and whether anyone must approve the receipt. The most common receiving configurations involve these receiving methods, or a mixture of the two.

• Receipt done by Requester ("Desktop Receiving"): Receiving is performed by the requester of the requisition. This user is also the first approver of the receipt.
• Receipt done by Central Receiving: Receiving is performed by a member of a group (can be a custom group) based on some attribute of the order.
• The default configuration supports Central Receiving based on commodity code. Users who are members of a specific group receive goods that have a specific commodity code.
• Approval rules allow for hybrid receiving methods and additional approvals after a receipt is entered.

The default receiving type is manual receiving by quantity. This receiving type will apply to all orders unless specifically configured by an administrator.

This means that receipts will be manually acknowledged by a specific user by quantity for each line item received.

The default receiving type for all receipts is "Manual – Receive by quantity." All orders are received this way unless "auto-receiving" or "receiving not required" is explicitly configured by your administrator.

"Manual – Receive by quantity" means that the receipt information will be manually entered by a user and that user will enter a quantity for each line-item received (instead of entering a monetary amount).

The basic process for manual receiving is finding the order that needs to be received, opening the receipt, and entering the information on the receipt, and then submitting for approval.

Manual receipts can be found in the To Do List.

Using the receive button on either the purchase requisition or the purchase order.

Under the managed dropdown menu and clicking on receive or through the receipt email notification.

The system also allows you to reject items if they are damaged or need to be returned.

Simply enter the quantity in the rejected field rather than the accept field and submit the receipt.

If you need to revise a previously approved receipt, you can enter negative values in either the accepted or rejected fields in order to correct the receipt.

When you are entering a manual receipt, you also have the option to close the purchase order, whether it is fully received or not.

Manual receiving steps:

1. Navigate to the purchase order associated with the items you received. The PO must be have status Ordered or Receiving.
2. Edit the receipt (RC) to enter a value for Quantity or Amount.
3. Submit the receipt for approval.

Closing orders - When entering a receipt, you have the option to close the purchase order. You would close the order if you are entering a partial receipt (for less than the full ordered quantity or amount) and do not expect to receive any more against the order. This closes the order for any further receiving.

Rejecting Items - To return products, enter a quantity in the Rejected field. The product return feature creates an audit trail with reasons for the return and the settlement requirements.

Revising Receipts - You can enter a new receipt to revise the quantity or amount for a receipt that has been fully approved. When you create this type of new receipt, you can revise the total received quantity or amount upward or downward (by entering positive or negative values in the Accepted Quantity or Accepted Amount fields). You can enter negative receipts to take corrective action against an order that was previously received (accepted or rejected) with errors. You do this by entering negative amounts.

• Basic Process:
  • Find the order
  • Enter info on the receipt
  • Submit for approval
• Manual Receipt can be initiated from:
  • To Do list
  • Receive button on PR/PO
  • Manage → Receive menu
  • Email notification

The SAP Ariba system allows for over or under receiving based on tolerance is configured by your administrator.

Most organizations will allow for some level of over receiving.

This may be necessary for certain commodities, such as printed materials, where it is common to expect a greater quantity than ordered to allow for defects.

It is less common to allow for under receiving because most organizations will not allow purchase orders to be considered fully received until all quantities have been received.

You can accomplish this by setting the tolerance value to 0.

Normally, the quantities and amounts on a receipt match the quantities and amounts of the PO. However, you might receive fewer items or for a lesser amount than was specified on the PO (under-receiving), or you might receive more items or for a greater amount than specified on the PO (over-receiving). Under- and over-receiving is allowed and controlled by tolerances configured by your administrator.

Tolerances can be defined based on absolute quantity, percentage of quantity or value, or value (line item amount). The system can be configured so that both absolute and relative tolerances must be met for a receipt to be fully received, or that either one of the tolerance settings must be met for the receipt to be complete. Purchase orders with receipts for which the quantity or amounts are within the tolerance limits are considered fully received and require no further actions.

Most customers allow some level of over-receiving. Over receiving is necessary for some categories – for example, printed materials – where industry best practice is to ship more than the ordered quantity to allow for an expected level of defects.

Most customers do not allow under-receiving tolerances – they set under-receiving tolerance values to zero – because they do not want POs to be considered fully received unless ALL of the ordered quantity has been received.

• Over-Receiving
  • Allows receipt of a greater quantity or amount than is specified on the PO
  • System will not allow entry of quantity or amount that is greater than over-receiving tolerance
• Under-Receiving
  • Allows POs to be considered fully received, even if quantity or amount received is less than what is specified on PO.
  • Receipts can still be entered for quantities and amounts that are less than under-receiving tolerance

Setting receiving tolerances at the purchasing unit level allows you to keep distinct sets of purchasing data separated by location.

This is particularly common where a company has many subsidiaries operating independently from the parent organization.

SAP Ariba allows your administrators to set receiving tolerances for each purchasing unit.

If receiving tolerances are not configured for a particular purchasing unit, the global receiving tolerances will be used.

Purchasing units allow you to keep different sets of purchasing data distinct from one another. Receiving tolerances configured for your SAP Ariba Buying Solution determine how it handles the receiving of all orders that are generated for your organization, regardless of the subsidiary or purchasing unit that created the PO.

In a complex business scenario where an organization has many subsidiaries that function as independent purchasing units, the receiving process for a subsidiary might differ from that of the parent organization due to business requirements. To support this ability, your administrator can configure the receiving tolerances for each purchasing unit. Tolerances can be defined at the purchasing-unit level based on absolute quantity, percentage of quantity or value, and value (line item amount).

If a PU does not have tolerances specified in the ReceivingTolerancesByPU.csv file, then the global (parameter) tolerance settings will be used for that PU. If your purchasing units have a hierarchical structure, child purchasing units do not inherit the receiving tolerances configured for their parent purchasing unit. Instead, the global tolerances settings take precedence.

• Receiving configuration distinct by business entity
• Tolerances do not inherit from parent to child Purchasing Units
  • Tolerances for each and every PU must be specified explicitly

Configuring your system for auto receiving is a way to streamline the process. By allowing SAP Ariba to automatically receive your orders for certain commodity codes or item part numbers.

You can configure for both total order amount and or line amount. Your administrators will set thresholds and if the total order amounts or line item amount is equal to or less than the threshold amount it will be auto received.

Anytime the amount is greater than that of the threshold, the system will generate a manual receipt.

In addition, the system allows for auto receiving by quantity rather than dollar amount.

There are several configuration options for when the order or line item is automatically received. The first is on ordered status, which will be as soon as the order is generated and the status changes to ordered.

On order due date is based off of the due date for the order and which is based on the lead time for that particular item.

You can receive on invoice reconciliation for purchase orders, which will automatically receive when the invoice reconciliation document is generated.

Another common timing is on charge reconciliation, which is for Piccard orders and those will be received when the charge reconciliation document is generated for charges against the P card order.

The auto-receiving types define when the system processes receipts in the context of the transaction flow:

• On Ordered: Automatically processes a receipt when the item is ordered (when the PO goes to Ordered status).
• On Order Due Date: Automatically processes a receipt on the order due date. Due date is calculated based on Ordered Date + Item Lead Time. Lead time is defined as a catalog attribute for supplier-furnished catalog content. Lead time for non-catalog items is, by default, 0 days. But a parameter can be set to define a lead time for ALL non-catalog items.
• On Invoice Reconciliation: Automatically processes a receipt when the invoice reconciliation document is generated for an invoice against the PO.
• On Charge Reconciliation: Automatically processes a receipt when the charge reconciliation document is generated for charges against a P-Card order.

Note that you cannot cancel orders that have had auto-receiving done against them.

• Based on Amount
  • Total order amount
  • Line amount
• Receiving Type by Commodity Code or Part Number
  • On Ordered (status)
  • On Order due date (based on lead time)
  • On Invoice Reconciliation (for POs)
  • On Charge Reconciliation (for PCard orders)

Whenever an order needs to be received, SAP Ariba will send an email notification as a reminder to the user responsible for that receipt.

This notification is sent automatically and at the same time the receipt document will be placed in the receivers To Do List.

For catalog items, the trigger is based off of the lead time specified in the catalog for that particular item.

The notification for non-catalog items is triggered immediately by default as there is no lead time.

However, there is a global parameter that can be used to override the lead time default.

SAP Ariba sends an email notification to remind you that the receipt for an item is due. The message contains links to the details of each line item on the request, an activity log and general comments, as well as the approval flow history. Click the link in the notification message to go directly to receiving task. You can Approve or Deny as well as Edit. The timing of the notification is based on expected time of arrival for each line item requested. The delivery due date calculation depends on the item type.

For catalog items

• If the Delay Purchase Until is blank on requisition, the Ordered Date plus catalog item lead time is adjusted to next business day;
• If the Delay Purchase Until is not blank on requisition, the Delay Purchase Until date plus catalog item lead time is adjusted to next business day. The adjustment to the next business day occurs because notifications are processed by a scheduled task that runs nightly.

For non-catalog items

• The order due date for non-catalog items triggers immediately as the default lead time parameter value is set to zero. A lead time for non-catalog items can be configured (for example, next day or 2 days after). This parameter setting is global, and applies to all non-catalog items on POs.

• Automatic function
• Email notification
• Puts Receipt document in appropriate user’s To-Do list
• Notification/To-Do list entry is triggered by Order Due Date
  • Catalog items: based on lead time specified on item in catalog.
  • Non-catalog items: immediate by default. A more realistic lead time can be configured.

If you need to, the system will allow you to reject items while receiving in order to create returns for your suppliers.

To start your return, simply enter the quantities or amounts that need to be rejected.

Then you will need to enter some additional information and comments as to why you are rejecting those items.

You will also need to decide whether or not you will be requesting replacement items or a credit for the returned items.

Once the receipts for those rejected items have been approved, the system will send an email notification to the purchasing administrator who will facilitate the return process.

With the supplier including notifying the accounts payable team if they will be expecting a credit.

SAP Ariba allows users to reject items during the receiving process to facilitate returns to suppliers.

You initiate returns by entering quantities or amounts in the Rejected field on the receipt entry screen. SAP Ariba then prompts you to enter additional information about why the items are rejected what the supplier should do – send replacement items or issue a credit for the returned items.

After receipts that contain rejected items have been approved, the system sends email notifications to Purchasing Administrators , who then oversee the return process with the supplier. These email notifications cannot be made to go to other users or groups. Your administrator can include other users in the notification by creating a distribution group in your email system to work around this limitation.

IMPORTANT: When rejecting items, users should still follow the organization’s return process. SAP Ariba does not send anything directly to the supplier, so communication of the return and desired recourse must be communicated outside the system.

• For rejected items, users can specify whether
  • Replacement items should be shipped
  • Credit should be applied
• A Goods Return Tracking Number can also be captured from the supplier
• Notifications of item rejection are sent to Purchasing Administrator group to inform them of follow-up actions needed
  • Purchasing might need to communicate to supplier that items are being returned and request replacements
  • A/P should look for credit from supplier

• Note

  If you are returning items from an order that was fully received, the order will have to be re-opened so that a new receipt can be entered to reject previously accepted items.

SAP Ariba allows for negative receiving for adjusting receipts that have been entered incorrectly or need to be reversed.

If an item needs to be rejected that was previously received, you simply open the receipt and enter a negative value in the accepted box and a positive value in the rejected box.

Similarly, if an item was rejected, you can reopen the receipt, enter a negative value in the rejected box, and a positive value in the accepted box.

Your auto receipts can also be adjusted.

If an item has been partially received automatically.

Your screen will still display the receive button.

If you click the receive button, it will convert the auto received receipt to a manual receipt.

And all further receipts on that order will have to be manually received.

SAP Ariba also allows you to configure your system to capture your asset data.

If you turn on this feature, the additional asset fields and your asset data will become available for reporting.

SAP Ariba is not intended to be an asset tracking system but will allow you to capture the data and export to an external system.

It will not generate any asset tracking numbers or maintain your inventory of assets.

If you are using an external system to create your receipts, such as ERP, you can configure the system to import the receipts into SAP Ariba.

You're receiving engine is very flexible and allows you to receive some of your items or commodities at the desktop and others through central receiving.

You can also configure your system to allow a receipt to begin at central location and then completed by the requester once they have received their items.

Asset Data Capture - If your organization uses asset data tracking, your administrator can configure the system to include the asset data on receipts. The requester or a receipt approver enters this asset data. A receipt line item is identified as an asset based on the Part Number or Commodity Code. In the default configuration, the asset data is: Serial Number, Tag Number, and Location. When asset data is enabled for receiving, an Asset Receiver or the Customer Administrator is automatically added at the end of the receipt approval flow. Asset Data is available in Analysis reporting

• Your organization might export receipt data to feed an asset tracking or other system. Your administrator can specify which commodity codes or part numbers require asset data in the definition of a receiving type.
• SAP Ariba is not intended to be an asset tracking system. Instead, it allows you to capture asset tracking information on the receipt and export this data to an external system; it does not generate asset tracking numbers or track inventory of assets. Asset data values entered on a receipt are not validated be the SAP Ariba system.
• Ship notices that contain asset data cannot be used to auto-populate receipt fields; asset data must be transcribed manually

Receipt Import from ERP - Receipts can be imported from an ERP system. You import them if receiving is done in the ERP instead of in the SAP Ariba system. Your organization might import receipts if, for example, your ERP system captures inventory tracking information for goods and it is the "source of truth" for this information. Those receipts can then be exported to the SAP Ariba system for use during the PO matching and invoice reconciliation settlement process.

Receipt Export to ERP - Receipts can be exported to an ERP system. You export them if they are generated by the SAP Ariba system, but certain receipt information, such as asset data, must be used by an external asset tracking or inventory management system. Receipt Export is often performed in conjunction with PO export.

Receipt Import/Export can be performed in batch mode through csv flat file integration or "near real-time" through WebServices integration.

Hybrid Receiving - Performed if your organization use desktop receiving for some commodities and central or multi-stage receiving for other commodities. For example, individual users enter receipts for office supplies, but IT equipment is centrally received. This functionality can be achieved through special configuration of Receipt approval rules. Your administrator creates "hybrid receiving" rules to add the Central Receiver instead of the desktop receiver, and not in addition to the desktop receiver. This functionality must be specially configured.

Multi-Stage Receiving - Performed when central receiving enters receipt information and additional approvers must approve the receipt. Typically, this method is used if you have commodity-based approvers and requesters who must also approve when goods are ultimately delivered to them. For example, computer equipment might first be received by your central receiving group, then approved by the IT Manager, and finally approved by the requester.

Because services are not tangible items, they cannot physically be received. However, we still need to acknowledge that the services have been rendered.

For service purchase orders, service entry sheets are documents created to capture the information about the services that have been provided.

Service sheets can be created by the supplier and submitted over the Ariba network, or they can be created by a user on behalf of the supplier.

Once the service entry sheets have been created, they must be approved to acknowledge that the services have actually been rendered.

• Service Purchase Orders require that a Service Entry Sheet (SES) be created with the details of the services delivered
  • Service Sheets can be created online in Ariba Network or in supplier’s ERP
  • A buyer can also submit an SES on behalf of the supplier
  • Service sheets can contain both service and material items
  • Approve the Service Entry Sheet to acknowledge that the service has been provided
• Note

  Unplanned Services without child lines included require the supplier be allowed to add Catalog or Non-Catalog items to their Service Entry Sheets

As with all approvable documents, the system will send an email notification to the approver notifying them that a service entry sheet requires their approval.

The approver has the ability to approve or reject the service entry sheet depending on whether it is correct or not.

Because invoices for service orders are created from the service entry sheet and approved service entry sheet is required in order for the supplier to be able to submit their invoice.

• When the supplier submits the Service Entry Sheet (SES)
  • Approver receives an email advising them an item requires approval
  • The SES may approved or rejected them
  • Approval is mandatory for a Supplier to be able to invoice a Service PO

Service entry sheets use accumulators to track quantities and amounts related to the services rendered.

If the service entry sheet is approved, the accumulation remains, and if the service entry sheet is rejected, the accumulation will be removed.

Service Entry sheet against service order

• A service sheet accumulates against a service order after the supplier submits it.
  • If the service sheet is approved, the accumulation remains.
  • If the service sheet is rejected, the accumulation is removed.
• Unplanned lines in service sheets only accumulate against the service order based on subtotal amounts on service sheets.