Carrying out Procurement of Direct Materials Solution Process Steps

The procurement of direct materials solution process can start with a purchase requisition which can be created manually or automatically.

A purchase requisition is an internal document that defines the requirements of a material or a service. This document authorizes the purchasing department to procure the material in the quantity specified for the specified date.

As a purchaser, you can create purchase requisitions for stock materials manually using the Manage Purchase Requisitions - Professional app. If an approval workflow is defined then the purchase requisition is subject to approval otherwise it is approved automatically.

You can use the automatic source determination so that the system searches for the possible sources of supply such as purchasing info record or a contract.

The default values for your user can be set using the Default Values for Users - Purchase Requisitions app by a configuration expert.

You can also create purchase requisitions using the Create Purchase Requisition - Advanced app. You can set the default values for this app using the Personal Settings available on the app. Automatic source determination of source of supply is also available in this app.

As a purchaser you can convert the purchase requisitions using the Process Purchase Requisitions app. Using this app, you can display purchase requisitions. You can also use the app to assign sources of supply to the purchase requisition items and then create the follow-on purchase order. You can only access purchase requisitions if you have authorizations for the respective purchasing group, purchasing organization, and plant.

Whether you can create one or several purchase orders depends on the supplier, purchasing organization, and purchasing group associated with the selected purchase requisition items.

You can convert purchase requisitions to purchase orders automatically using the Schedule Purchasing Jobs -Advanced app with the Automatic Creation of Purchase Orders from Requisitions job template.

As a prerequisite for automatic purchase order creation you have to enable the automatic purchase order flag for the material and supplier that are used in the purchase requisition.

• In product/material master data select Autom. PO in the General Data section
• In business partner - supplier master data select Automatic Purchase Order in the Purchasing Data section

You can schedule the job using the recurrence function so that it runs on a regular basis.

The process can also start with the creation of a purchase order for stock material directly. If an approval workflow is defined then the purchase order is subject to approval, otherwise it is approved automatically.

A purchase order is a request or instruction from a purchasing organization to a supplier or a plant to deliver a quantity of material or to perform services at a certain point in time.

As a purchaser you can create purchase orders for stock material manually using the Manage Purchase Orders app. You can use this app to manage and search purchase orders for stock material.

Once the ordered goods arrive and if the good receipt was enabled in the purchase order, you can post the goods receipt for your purchase order. As a warehouse clerk or an inventory manager, using the Post Goods Receipt for Purchasing Document app, you can post the receipt of goods with reference to the purchase order in which the goods ordered are for direct consumption. Since the goods are destined for consumption, only the consumption statistics are updated in the product/material master record.

Material Document: Goods receipt is mandatory for procurement of direct materials. When you post a goods receipt, the system automatically creates a material document that serves as proof of the goods movement. You can display the Material Document using the link on the success message after posting GR or using Material Documents Overview app. You can also open the document using the process flow on the purchase order item level in the Manage Purchase Orders app.

Accounting Document : Parallel to the material document, the system creates an accounting document. The accounting document contains the posting lines (for the corresponding accounts) that are necessary for the movement. You can display the Accounting Document using the process flow on the material document view.

Stock Value : When you post the goods receipt, the system increases the total valuated stock and the stock type (for example, the unrestricted-use stock) by the delivered quantity. The stock value is updated at the same time.

Goods receipt blocked stock : You can conditionally accept a delivery. You record such deliveries in goods receipt blocked stock. Unlike goods receipts to the warehouse, the receipts posted to the goods receipt blocked stock are not yet part of the valuated stock.

G/L Accounts : When the goods receipt is posted, the system automatically updates the G/L accounts by the value of the goods receipt.

Goods Receipt/Issue Slip : When you enter the goods receipt, you can print the goods receipt/issue slip.

Distribution : You can distribute the received quantity for each item to different storage locations using the plus icon under Distribution.

Delivery Note : If you maintain the Delivery Note, for instance, entering the document number issued by the supplier, while posting the goods receipt, you can use it as a reference instead of referring to the purchase order when creating the supplier invoice.

As an inventory manager you can manage the stock for materials using the Manage Stock app. You can use the app to update the stock for a material, for instance, in case of damaged materials that need to be scrapped as they should not appear any longer in the stock overview.

You can change the stock using the icon in the row of storage location for the stock type where you want to process a stock change. The Manage Stock dialog opens where you can enter the data. After posting the stock change system creates a material document.

You can navigate and open the Stock Single Material app and analyze stock overview for the material.

As an Accounts Payable Accountant for Procurement, using this app, you can create supplier invoices for your purchase orders based on the received document from your supplier. You can also create credit memos, subsequent credits, and subsequent debits.

You enter the Basic Data such as invoice date or reference document number from the received invoice. The Invoicing Party is filled in automatically once you enter the reference purchasing document.

You can choose Show More in the General Information section to edit, for example, the Assignment, Item Text, and Header Text fields. After posting, the system transfers these texts into the corresponding Financial Accounting document.

You can change the Exchange Rate that is displayed according to the configuration settings. You can change the exchange rate until you create an invoice item. If you specify a purchase order reference with fixed exchange rate and you create the invoice item, the exchange rate is created automatically for the invoice.

In the Purchasing Document References, as a reference you use the purchase order number by specifying the reference document category. You can also use the Delivery Note as the reference if it was maintained during the posting of goods receipt.

You can create the invoice for all relevant items of the referenced purchase order for which the invoice was received. The system will select the relevant items for the invoice that has arrived and the goods receipt was posted for the referenced purchase order.

You can change the payment terms. Once the payment terms have been adopted by the system they are no longer changed automatically. If you change the payment terms or the supplier while creating a supplier invoice, you must check the payment terms and reset them manually if required.

Using the Unplanned Delivery Costs tab, you can add the delivery costs that were not planned or included during purchase order creation. It is possible to configure the unplanned delivery costs to exclude G/L account items.

If you select the Simulate or Post function, the system compares the quantity and amount data of each supplier invoice item with the data of the related purchase order item. The difference between the debits and credits (Balance) must not be outside the tolerance limits set. Using the Check function, you can make the system check the invoice before trying to post.

Simulate function allows you to display the account movements before posting the document. On the Simulation view, you can also switch the simulation currency, and post the supplier invoice.

You can Park the invoice document for someone to complete the process and post it later on.

You can display the Purchase Order History. In the document flow, you can see the purchase order document and the good receipts of the referenced purchase order item.