Introduction(P2P – Process) (P2P – Process)
I’d like to describe the many eventualities in the procurement process in this document. The buy request is the first step in the procurement process, which concludes with payment to the vendor. So the term “P2P Procedure” is often used to describe this process. It deals with the acquisition of goods, services, and various contracts related to acquisition. In this blog post, I presented a few such circumstances. A 3-way matching rule applies (PO-GR-IV). We will comprehend master data operations such as a material master, purchase info record, source list, and transaction operations such as purchase requisition, purchase order, goods receipt, and invoice posting.
Purchasing Request: (T-Code- ME51N)
The shops department internally raises a purchase requisition for the purchase department.
The manufacturing department team typically consults with the store’s department team to see whether the necessary stock or supplies are available. The store’s department will send the merchandise to the production department if it is on hand at the warehouse. The store department will elevate the purchase requisition to the purchasing department if the stock is not readily available in the warehouse. No accounting document is present here. The department of the shop merely inputs the quantity and type of material needed in the purchase requisition.
Order of Purchase: (T-Code- ME21N)
The purchasing division will haggle over the necessary goods and services with outside suppliers before choosing a vendor. The vendor will receive a purchase order from the purchasing department with the agreed-upon terms for the materials/services, quantity, delivery, and payment. We can locate this kind of information in the purchase order. Before releasing the purchase order to the vendor, we must obtain all necessary approvals, if there is any release process (approval process) for a purchase order. Different PO Processes are available, including Standard(Stock) POs, Service POs, Capex POs (for capital expenditures), Opex POs (for operational expenditures), Consumption POs, Scheduled Agreements, and Stock Transport (STO) POs. At the time of creating the PO, there was no accounting paperwork.
Receipt for Goods: (T-Code- MIGO)
According to the terms of delivery, the warehouse department gets the merchandise from the vendor. The SAP system is used by the warehouse department to enter the goods receipt against the purchase order. When posting a goods receipt, they only check the stock and input the delivered quantity. The system will produce two documents during this process: a material document in MM and an accounting document in FI.
Accounting Entry for MIGO
Entry for MIGO Services in Accounting: (T-Code- ML81N)
In addition to purchasing commodities, businesses also hire vendors to provide a variety of services. Cleaning services or IT support/implementation services could be requested (ex: SAP implementation). The relevant manager department will confirm whether or not the services were provided. It can be determined by counting the hours (for example, using a timesheet) or people who worked. There will be no accounting entry made only for producing service entries; instead, the services will be tracked through the service entry sheet. To create an accounting document, the service entry must be released. The system will produce two papers during this process: a service document in MM and an accounting document in FI.
Accounting Entry for MIGO
Receipt for a bill: (T-Code- MIRO)
The invoices are delivered by the vendor to the accounting payable department. At this point, the conventional system will automatically run a “3-way check.” The bills’ accuracy as to price and quantity will be automatically checked against the purchase order and the goods receipt document. As soon as the invoice posts, it is standard procedure to prohibit it from being paid. The system will produce two documents during this process: a material document in MM and an accounting document in FI. Once the invoice has been accepted or released, the treasury division will handle the payment.
Accounting Entry for MIRO
Payment to Vendors: F-53/F110
The invoices will be made available for payment in accordance with the due date of the invoice. The payment will be made by the treasury division. For outgoing payments, they employ the F-53/F110 (Manual/Automatic) systems. The system will produce one accounting record in FI during this process.
I’ll outline 10 significant Procure to Pay (P2P) Process scenarios in this blog post. The table below provides a high-level summary of many scenarios.
Note: The desktop version will give you the greatest view of the screen shot below showing 10 scenarios.
The first two eventualities on the list above will be explained in this blog post. Standard PO is the first, and Capex PO is the second (Capital Expenditure PO). The remaining scenarios will be posted in upcoming blog postings.
1. Regular (stock) purchase order procedure
I’ll demonstrate how to construct an inventory buy order in this procedure. It indicates that businesses will buy stock in large quantities and use it internally as needed.
1.1 Created by the Purchaser Order T-Code ME21/ME21N
Click on enter and save.
1.2 MIGO Goods Receipt
Click “Enter” after entering the purchase order number.
In the delivery note, provide the quantity. assuming all is well. Save by selecting the Item Ok checkbox.
Select the Display option if you wish to confirm that the products have indeed been received. Goods Receipt Document is displayed.
1.3 MIRO Invoice Receipt
Enter the PO number, reference, and invoice date, then press enter.
Click on simulate and check accounting entries to view the accounting entries prior to saving.
If everything appears to be in order, select the post.
From the menu, select Invoice Document-Display to display accounting documents.
Double-click the accounting document after clicking Follow-on- Documents.
Verify Material/Stock Report – MB5B, section 1.4
Execute after providing the Material, Plant, and Company code information.
1.5 Consumable Goods Issued – MB1A
Let’s assume that we have stock. Now, the manufacturing process or another function required certain material, according to the production department. Then we must internalise material. The inventory will be transferred from the warehousing division to the manufacturing division.
An accounting document will be produced by the system.
Material Report – MB5B, section 1.6
Information about consumption is displayed.
2. The purchase order process for capital expenses
I’ll demonstrate how to write an asset purchase order in this procedure. I used transaction code AS01 to generate an asset in the SAP system well in advance. Additionally, a purchase order can be used to produce an asset.
2.1 Production of Purchase Orders (ME21N)
When establishing a Capex PO, you should choose the PO document type called a Capex PO and enter account assignment category-A.
Click “Enter” after entering the vendor’s number next to the asset PO or standard PO. In the header section, enter the Purchase org, Purchase group, and Company code information.
You must choose Account assignment – ‘A’ at the line item level (Asset related) Short text, quantity, delivery conditions, plant, and storage location should be entered.
If you had generated the asset through AS01, please select the asset under the account assignment page; otherwise, you can create from here. Save it after choosing the option to create an asset (under there).
You can create the Asset on the same screen, if you’d like. However, since I have built the Asset, I am not creating here (T-Code-AS01)
The PO Document listed below was generated by the system.
T-Code-ME23N is the PO Document to display.
2.2 Goods Receipt (MIGO)
Click on enter, enter the quantity in the delivery note and click on the ‘Item ok’ check box and save.
The system has generated the material Document. The System doesn’t generate the FI/Accounting document during this process. It will generate only an MM document. You can see the below screens for more information
Display GRN Document:
In the same screen, Under Goods Receipt select Display.
Click on Doc.info
Click on FI Documents
2.3 Invoice Posting (MIRO)
Click on simulate, then you can see the document in simulation view. if everything is good, just post it.
System generated an invoice document
Go to the Menu- Invoice document- Display. you can able to see the IV document.
Click on follow-on-documents
The system has been generated the below documents
Double click on the respected document to see the accounting entry.
Asset Transaction to see the asset document.
2.4 Vendor Payment (F-53/F110)
The payment will be made by the treasury division. For outgoing payments, they employ the F-53/F110 (Manual/Automatic) systems.
Conclusion: After thoroughly understanding the various P2P process scenarios, as well as the Standard PO and Capex PO processes, The procedure can be used with both the ECC system and the S4HANA system. With the S4HANA system, we won’t need to recall transaction codes because we will use the appropriate Fiori Apps. This blog post is intended to help, I hope. I’ll update other scenarios in upcoming blog entries.