Categorizing the Electronic Documents

Purchase orders are documents that buyers send to suppliers in order to request goods or services from their company. The buyer’s procurement application assigns a unique number to each order it generates. SAP Business Network tracks transactions by these assigned numbers.

Purchase orders received through SAP Business Network can contain the following types of information:

• Material items, such as raw materials or furniture
• General service items, such as janitorial services, or labor service items, such as contract labor, that do not require separate tracking
• Service items that require separate tracking
• Travel and expense items, such as airline flights or car rentals
• Blanket purchase order items, such as any frequently purchased items or services
• Total landed cost details, such as allowances and freight charges

For an overview of Purchase Order, watch this video.

This diagram provides the storyboard version of the workflow steps for the lifecycle of a purchase order on SAP Business Network.

Material orders can contain lines for both material items and general service items or labor items that don’t require separate tracking. The typical order fulfillment cycle for a material order is as follows:

Service orders contain at least one line item that requires a service sheet. A service sheet is a document that you fill out to describe the services you performed to fill the order and any material goods you used for the service. Service orders can contain lines for both material items and services. The main difference in fulfillment cycle between a material order and a service order is that when you are fulfilling a service order, the service sheet takes the place of a ship notice to describe the parts of the order that have definitely been fulfilled and to provide a basis for invoicing. The typical order fulfillment cycle for a service purchase order is as follows:

Invoices are formal documents sent by a supplier to request payment for goods or services provided to a buyer.

Invoices can be created and sent from SAP Business Network interface, or created in an external system and transmitted through SAP Business Network via cXML or EDI.

SAP Business Network buyers specify supplier invoicing rules that govern what actions their suppliers can take when submitting invoices to them.

For an overview of Invoice Functions, watch this video.

A PO-Flip invoice can be created from a purchase order that a buyer sends to a supplier through SAP Business Network. When a supplier creates a PO-based invoice, suppliers 'flip' the purchase order information into an invoice.

For an overview of PO-Flip Invoices, watch this video.

Suppliers can send a Non-PO invoice to bill their buyer when there is no purchase order on SAP Business Network.

Non-PO invoices are also for orders that were sent through other methods, such as by fax, mail, email, or telephone. Non-PO invoices are similar to PO-flip invoices, except only a few fields are pre-populated. The remaining information must be entered manually, such as the line items. These line items can be created as either goods (material items) or services (general/labor service).

• General service items are intangible services, such as construction or gardening.
• Labor service items account for hours worked by a contractor.

For an overview of Non-PO Invoices, watch this video.

A contract is a legal document that allows a buyer to establish a commitment with a supplier to purchase products or services repeatedly over time.

Contracts can be specific or open-ended. They can contain line items for specific products, commodities or services with fixed pricing, minimum order requirements, maximum commitment levels, effective dates and expiration dates.

Funds from contracts are either released when a purchasing agent places an order for items governed by a release order contract, or they can be released directly through the invoicing process and don’t require a purchase or release order (invoiceable contract or no-release order contracts).

An example of an invoiceable contract might be a janitorial service supplier that invoices monthly for a predefined amount of services against a yearly contract.

Buyers can configure different levels of contracts:

• Item level contracts that apply to specific catalog or non-catalog items
• Commodity level contracts that apply to all goods and services for specific commodity groups
• Catalog level contracts that apply to all items in a catalog
• Supplier level contract that applies to all items ordered from a supplier

The specific workflow that applies to the supplier depends on the buyer's contract configuration and their site configuration. The following lists the three different options. If a supplier has trading relationships with multiple customers, they might have a different workflow for each customer:

After selecting the customer, you are transferred into the customer’s invoicing site to create the entire invoice there. After the invoice has been approved by a customer’s invoice agent, you receive a copy of your invoice in your SAP Business Network account. This invoice is not validated against the invoicing rules configured by the customer in their SAP Business Network account and this workflow assumes that the customer has trained you on their invoice entry procedures.

After selecting the customer, you are transferred into the customer’s invoicing site to retrieve the contract and add line items only. You finalize the invoice in your SAP Business Network account using the Ariba Create Invoice pages and submit the invoice from your SAP Business Network account, which means it is subject to the invoicing rules your customer has configured. For countries that require a digital signature, the invoice is digitally signed if the customer’s account has been enabled for digital signing.

For blanket purchase order (BPO) type contracts, customers can disallow collaborative invoicing. In that case, for item level BPOs, you can create a standard invoice using purchase order to PO-flip as you do with regular purchase orders. For any other BPO type (supplier, catalog or commodity level contracts), you must enter a non-PO invoice providing the contract ID on the invoice.