Exploring Purchase Orders

Once Mary has approved the purchase requisition, the next step in the process flow would be SAP Ariba generating a purchase order and routing it to the supplier.

Next in the process flow, SAP Ariba Buying & Invoicing will generate a purchase order from the requisition that Mary had approved. This will send it over to the supplier on the Ariba Network.

A purchase requisition is your initial request for goods and services. Once it has been fully approved, purchase order will be generated.

Purchase order is a separate document and becomes your legal binding agreement with your supplier.

Depending on your system configuration, it is possible that more than one purchase order will be generated.

For example, if your requisition contains items from multiple suppliers, one purchase order will be generated for each supplier.

You can also configure your system to create a separate purchase order for non-catalog items and catalog item.

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.

In addition to different suppliers and the item types, you might also configure your system to allow separate purchase orders for different Ship to Locations, Contracts, Pcard orders or Accounting information.

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

There are also several different methods for routing your purchase orders to your suppliers.

1st is sending your orders electronically directly over the Ariba network. In this way, your purchase orders are automatically delivered to the supplier as soon as the purchase order is generated.

Your suppliers can register for enterprise account which gives them full access to the Ariba network dashboard and all of the features that come with it. Or you can configure them with a standard account and they will receive the PO in a system generated email which has a button to create an invoice from within the email.

If your suppliers are not registered on the Ariba network, you will have to process the purchase order manually. This means clicking the print button on the purchase order, saving it as a PDF, and then mailing or faxing it to the supplier. Once you've processed the purchase order, you will need to click the mark for ordered button to change the status from ordering to order.

Another option is routing your orders from your SAP Ariba buyer module to your ERP. You can configure your system to route your POs over the Ariba network directly from your ERP or through the Ariba network, and then copy to your ERP.

It is common to send a copy of your purchase order to your ERP even if you are sending your orders directly over the Ariba network.

At any point after the purchase order has been generated, you can create a change order provided the purchase order is in an ordered status, and your supplier accepts change orders.

If your ERP is part of the purchase order process, the ERP also has to accept change orders.

Your original preparer or requester, or a member of a purchasing related group have permissions to create change orders.

Change orders are allowed if:

• Purchase Orders can be sent automatically to suppliers over the Ariba Network
• The PO is in ordered status
• The supplier accepts change orders
• Your ERP supports change orders
• The original requester or a member of purchasing-related group is taking action
• In Guided Buying, click the View in SAP Ariba Procurement Button in the PR or PO to begin a change order from the full Buying interface as shown in the screenshot

Similarly, you can cancel a purchase order if it is no longer needed. The purchase order once again must be in ordered status and your supplier must accept cancel orders.

If you're using the ERP as part of your purchase order process, the ERP again needs to accept Cancel orders also.

As with change orders, the original preparer and requester, or members of the purchasing related groups have the permissions to cancel the orders.

Cancel orders are allowed if:

• PO is in Ordered status
• The supplier accepts cancel orders
• Your ERP supports cancel orders
• The original requester or a member of purchasing-related group is taking action
• To cancel in Guided Buying, hover over the PO ID in the PR line item and click Cancel, then add comments before submitting the cancellation
• In GB, click the View in SAP Ariba Procurement Button to open the PR or PO and begin a cancellation from the full Buying interface

When you have completed your purchase, your purchase order can be closed.

Purchasing administrators or purchasing managers have the permissions necessary to close the orders and they can be closed for change, for receiving, for invoicing, or for everything.

You can also configure your system to close the POs that have had no activity for some period of time, for example, after 365 days with no invoicing or receiving.

Your closed orders can be reopened whether they were closed automatically or manually.

• 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
• In Guided Buying, click the View in SAP Ariba Procurement Button in the PR or PO to begin a close order from the full Buying interface as shown in the screenshot