Identifying the Capabilities of the Procure to Pay Solution


After completing this lesson, you will be able to:

  • Identify the capabilities of SAP S/4HANA Sourcing and Procurement

The Simplification Item Catalog, the Simplification List, and Release Notes

Introducing Paige, Purchaser at the Hybrid Machinery Company


See the following video to get to know Paige. She works as a purchaser for a company called Hybrid Machinery. Hybrid Machinery recently replaced their SAP ERP system by SAP S/4HANA. Paige was involved in this project:


In the following video, Paige talks about the Simplification Item Catalog, which she used extensively throughout the SAP S/4HANA implementation project she participated in:

Introduction to the Simplification item Catalog

A screenshot is shown of the SAP for Me website and the Simplification Item Catalog that can be accessed there.

To access the simplification item catalog, use the URL

Currently, the simplification item catalog provides information for the SAP S/4HANA on-premise system for various releases, for example, the 2023 release of the system. SAP provides it as part of the SAP S/4HANA documentation for a specific release and it is the central place for SAP to maintain simplification items.

Another way to get an overview of these simplifications is through the Simplification List. This list focuses on the items that must be considered by customers in an implementation or system conversion project from SAP ERP 6.0 to SAP S/4HANA.

In the past, SAP recommended using the Simplification List. It is still available (for example, for SAP S/4HANA release 2023), but the recommending tool is the Simplification Item Catalog. To access the Simplification List, open a web browser and access a search engine (like, then search for SAP S/4HANA Simplification List. You are shown a link to the list (on You can also simply navigate directly to and then search for the Simplification List for SAP S/4HANA.
The structure of the Simplification Item Catalog is explained: it consists of Simplification Items.

With every new release of SAP S/4HANA, the Simplification Item Catalog and the Simplification List are accordingly updated with release-dependent information. All simplification items valid for a certain release of SAP S/4HANA are described in detail. These tools both act as a complete inventory which, when converting the system to SAP S/4HANA, can be mapped against a productive environment to determine the impact. Both tools act as a collection of single simplification items with the focus on what you must consider during an implementation or a system conversion project.

For example. you can provide the following information for each simplification item (amongst other relevant information):

  • A description of the simplification

  • Business process-related information

  • Requirements and recommendations

  • Related SAP Notes (for related pre-checks or custom code checks)

You can find all relevant information under (for SAP S/4HANA release 2023 for example). Along with links to the Simplification Item Catalog and the Simplification List, there is a lot of relevant information to be found here. Examples are the What’s New sections and all the tools under the Implement section. The What’s New section shows all the changes in the current release of SAP S/4HANA and thereby serves as release notes for the current release.

In the transition to SAP S/4HANA, simplifications need to be semantically assessed first. Then a technical system assessment is needed, consisting of a pre-check and a custom code analysis.

When undergoing a transition to SAP S/4HANA, the Simplification Item Catalog and the Simplification List serve as a good starting point and guideline. To support the transition, SAP also provides the following additional tools:

  • Pre-Checks: SAP ships pre-checks as SAP Notes to customers that want to convert to SAP S/4HANA. Customers can use these pre-checks to discover the mandatory steps they must do before conversion. The pre-check results list the instances that must be addressed before attempting the conversion process.

  • Custom Code Analysis: Customer code analysis helps support the customer in detecting custom code, which must be adapted so that it can move to SAP S/4HANA. SAP offers custom code analysis tools as part of SAP NetWeaver 7.50. Customers can verify if their current custom code is compliant with SAP S/4HANA data structures and scope.

Sourcing and Procurement in SAP S/4HANA

A screenshot is shown of the SAP Help Portal and the topic Sourcing and Procurement in SAP S/4HANA in particular.

Core SAP ERP processes remain mostly unchanged. However, there are market trends (digital transformation) and innovations that influence the available features and functions in SAP S/4HANA.

Although the processes have not changed, how they execute has changed. For example, there are changes in how consumers want their orders fulfilled and the speed at which they expect their orders to be fulfilled.

Other examples include the following trends:

  • Sensors that enable Internet of Things (IOT) scenarios

  • Big Data that fundamentally changes how we interact with information

  • Consumer grade user experience on any device

  • Easy-to-consume cloud services

  • Entering new markets that are both global and hyper-connected

To stay relevant in these times of massive disruptions, enterprises must ensure that their internal systems support new business realities. Consequently, enterprise management must adapt to this changing digital world (digital transformation).

Other examples are the introduction of powerful algorithms in the areas of machine learning (ML) and predictive analysis. More use cases and applications of these algorithms are available in SAP S/4HANA with every new release of the system.

Driven by the combination of ever-growing digitization and evolving consumer demands, digital transformation is the use of new technologies to drive significant business improvements. This includes capitalizing on new opportunities and effectively transforming existing business.

Innovations for sourcing and procurement are seen in SAP S/4HANA, on-premise edition.

The innovations include the following examples:

  • SAP Fiori apps for (for example) an operational purchaser, a buyer, a manager, and an employee

  • SAP Business Network integration

  • Self-service requisitioning using catalogs

  • Real-time analytical capabilities

Procure to Pay: Solution Capabilities

The complete structure of the solution Procure to Pay is shown. The structure is further explained in the paragraphs below.

The above figure shows all end-to-end solutions provided as part of SAP S/4HANA for supporting a procure-to-pay process:

  • Central Procurement
  • Sourcing and Contract Management
  • Operational Procurement
  • Invoice Management
  • Procurement Analytics
  • Supplier Management

Central Procurement delivers company-wide visibility based on roles and permissions across a company’s complete ERP landscape. Lead buyers can access contracts, requisitions, orders, and so on centrally across the entire company.

Sourcing and Contract Management provides an operational sourcing and contract management solution. It supports the process of entering into long-term purchasing arrangements with suppliers about material supply or service performance, and using these arrangements during the sourcing process.

Operational Procurement supports the process of self-service requisitioning, which allows for the efficient creation, management, and tracking of requirements (both products and services). You can also include items from external catalogs and free-text items. Requesting the required products triggers an item or header-based approval process. The approval of a purchase requisition creates a purchase order. Purchase order processing and purchase order collaboration are also part of the operational procurement process.

In Invoice Management, invoice processing follows the processes of purchase orders and goods receipts. A supplier invoice is a document from a supplier for delivered materials or performed services. You can manually create a supplier invoice. Invoice verification checks the supplier invoice for accuracy with regards to content, price, and accounting.

You can execute a search for supplier invoices depending on the status and release blocked invoice items. Posting an invoice saves the data from the supplier invoice in the system and generates both an invoice document and an accounting document. Invoice Management is the end-to-end solution dealing with these invoices.

Procurement Analytics provides extensive, real-time transparency on purchasing spend.

Supplier Management provides a portfolio-level view of a company's supplier relationships. This provides the transparency to continuously determine the correct supplier mix and to reduce overall supply risk. Classification and segmentation of suppliers is available. Supplier evaluation functionality is also available.

Examples of Simplifications in Procurement and Inventory Management in SAP S/4HANA

Three examples of simplifications are presented: the business partner approach, simplifications in analytics and SAP S/4HANA Output Management.

In an SAP ERP landscape, there are two software solutions available for international trade process support: Foreign Trade and SAP Global Trade Services (SAP GTS). SAP GTS is an external service that can be installed on a separate instance. With SAP S/4HANA, the classic Foreign Trade functionality is no longer available. SAP GTS is the strategic functionality for this area.


For Intrastat, customers can still leverage functionality within SAP S/4HANA. Additional functions for import and export management are available with SAP GTS.

More examples of simplifications are shown. For example: a screenshot is shown of the error message you get when using an obsolete transaction (using the SAP GUI) in SAP S/4HANA.

The following transaction codes for entering and displaying goods movements (material documents) are no longer available with SAP S/4HANA: MB01, MB02, MB03, MB04, MB05, MB0A, MB11, MB1A, MB1B, MB1C, MB31, MBNL, MBRL, MBSF, MBSL, MBST, and MBSU.

Instead of these transactions, a user can use SAP Fiori apps (where available) or the single-screen general goods movement transaction code MIGO.

Simplified Data Model for a Material Document

In the following video, Michael, who works as an SAP consultant in the area of Procurement and Inventory Management in the SAP S/4HANA implementation project for Hybrid Machinery, explains the data model changes for a material document:

Material Ledger Required for Material Valuation

With SAP S/4HANA, it is mandatory to use the material ledger. Latest trends in material management aim for improved and more flexible valuation methods in multiple currencies and parallel accounting standards. Simultaneously, it aims to reduce required system resources and improving scalability of the business processes. The data model of the material ledger (ML) module supports these business requirements so it was chosen as the basis for material inventory valuation in SAP S/4HANA.

If customers are not using the material ledger in their current SAP ERP system, it activates during the conversion process of the system to SAP S/4HANA. In transactions MM02 and MR21, material prices can then be maintained in multiple currencies. In Financials, the inventory account balances are calculated separately for each currency. This results in a cleaner and more consistent valuation in other currencies than the local currency.

Material Valuation: Statistical Moving Average Price

A screenshot is shown of the transaction to change a material.

In SAP ERP, the system additionally calculates the moving average price for materials with price control Standard. This price is called the statistical moving average price. The statistical valuation requires exclusive locking. The exclusive locking is limiting the transactional data throughput in the system. Therefore, it is no longer available in SAP S/4HANA.

The deactivation of the statistical moving average is not mandatory for converted SAP S/4HANA systems. However, it is recommended to achieve a significant increase of transactional data throughput for goods movements in the system. For new installations of SAP S/4HANA, the statistical moving average price is disabled by default. It is important to note that this deactivation is not reversible.

Use the Simplification Item Catalog, the Simplification List, and the SAP Help Portal

Log in to track your progress & complete quizzes