Outlining the Procurement of Fixed Asset Process

Objective

After completing this lesson, you will be able to map the fixed asset procurement process and explain the process steps relevant to your work area

Fixed Asset Procurement Process

Kevin is sitting at his desk looking at invoices when his manager calls him and gives him a new project. Mike wants Kevin to take care of optimizing the procurement process for fixed assets.

Previously, the invoices for fixed assets were posted directly, without a purchase order or goods receipt. To increase efficiency, the procurement of the fixed assets is to be integrated into the standard material ordering process.

Kevin is browsing the employee portal looking for potential support. He comes across Monica’s profile. She is part of the Materials Management team. He’s confident that she can explain the procurement process to him.

Kevin's Notes

Kevin has taken some notes during the call with Monica. Out of the overall process he listed the steps that are relevant to his work area.

The purchase order for fixed assets is entered with the account assignment category, Asset (A). This account assignment category requires an asset master record. Therefore, to order a fixed asset, Kevin requires an asset master record.

1. Purchase Request - Optional, 2. Purchase Order - account assignment category A and assign asset master record to purchase order, 3. Goods receipt - asset is delivered, 4. Invoice receipt - invoice for asset posted, 5. Payment - post payment.

Valuated or Non-Valuated Goods Receipt

After going over his notes from the call with Monica, Kevin has some additional questions.

Kevin incorporates the details that he learned from the call with Monica into his overview.

Kevin's Notes

The figure outlines the asset acquisition process, starting with an optional Purchase Request (1). A Purchase Order (2) is then created, followed by Goods Receipt (3) confirming asset delivery. The Invoice Receipt (4) posts the asset's invoice, and Payment (5) completes the process. Depending on whether the asset is Valuated or Non-Valuated, the acquisition is posted either with the purchase order value or the net invoice amount, respectively.

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