2 Lab Purchasing v3

ILAB’S MODULE: PURCHASING

SAP Username _______________________________Name _______________________________

1. Create Raw Material

Menu Logistics Materials Management Material Master Material

Create (Special) Raw Material

Trans.

code

GBI company (retail industry sector and company code US00) needs to produce bicycles to fulfill customer’s demands. They have already checked their inventory in plant DL00 and they still need other raw material namely ### bicycle lamp (LAMP###). Storage Location RM00.

Creating special for this raw material, GBI’s personnel needs to insert Basic Data 1, Purchasing, General Plant Data/Storage 1, Accounting 1 and Costing 1.

This raw material has Base Unit of Measure equal with EA (Each) and included in BIKES material group. In addition, purchasing group N00 will handle the procurement of this raw material. In order to determine which general ledger accounts will be affected by transaction involving this material, the valuation class of this material is 3000 We would like also to tell the system to adjust the value of inventory held by the company as prices change by setting the price control to V and moving price equal to 1.75.

Each time this material is purchased, the current purchase price is used to update the value of the company’s inventory of this material using a moving average formula. Make sure that With Qty Structure and Material Origin are checked. The Qty (quantity) Structure setting tells the system that cost estimating will be done within a Bill of Material Structure (for discrete manufacturing) or a recipe (process manufacturing). The Material Origin setting tells the system to record the material number when updating costs involving this material, allowing for more detailed cost analysis.

Your Raw Material Number: ______________________

SCM Genap 2013/2014Faculty of Computer Science University of Indonesia 1

2. Create New Vendor

Menu Logistics Materials Management Purchasing Master Data

Vendor Central Create

Trans.

code

Next, the company needs to enter the information for the vendor who will be providing this new raw material. GBI will create the Vendor centrally, which means that we will be entering company code (US00), purchasing organization (US00) and accounting-related data i.e. account group KRED in this transaction. The account group defines which data is required/possible for the vendor and how the vendor number will be assigned.

The vendor’s name is ### Portage Material (Arbocrest Street No. 10 postal code 49024 Portage US, region MI) and has jurisdiction code MI0000000. This vendor has been assigned to 300000 reconciliation account and E1 for the cash management group. The reconciliation account is the overall general ledger account that is updated whenever an accounting entry is made for this vendor. Whenever an invoice is received from this vendor account 300100, which is the accounts payable reconciliation account, will be increased by the amount of the invoice as well as the sub ledger account for this vendor. The reconciliation account allows the company to easily keep track of its total accounts payable. Payment term 0001 is Payment immediately Due net, which means that for this vendor, there are no early payment discounts (like 2% 10, net 30), the entire amount is due when the invoice is received. Then item Chk double inv. means in checking for duplicate invoices, the system compares the following characteristics by default:

Vendor Currency Company code Gross amount of the invoice Reference document number Invoice document date

This item helps prevent entering an invoice twice so that you don’t pay a bill twice. GBI and this vendor have already agreed to use USD currency for all transactions and 0001 for the terms of payment (the second time this has been entered).

Your Vendor Number: ______________________

3. Create Purchase Order

Menu Logistics Materials Management Purchasing Purchase Order

Create Vendor/Supplying Plant Known


Trans.

code

With a material and vendor defined in the system, we can now create a purchase order. This purchase order contains:

Material: LAMP###PO quantity: 100

Deliv. Date: a date two weeks in the futureNet Price: 1.75Currency: USDPlant: DL00InfoUpdate is NOT selected Purchasing Group: N00

After saving the data and you will get the system message issued, click the save button. This warning shown because in this system, we have not configured an output destination (printer, fax, EDI, internet, etc.) for the purchase order as this is a virtual company.

InfoUpdate tells the SAP system that it should create a purchasing info record automatically when this order is saved. The purchasing info record contains information about the relationship between a vendor and a customer. The purchasing info record is a useful tool, and there really isn’t a reason we wouldn’t want to create one, but as a test, we will first see what happens to the purchasing process when we do not create a purchasing info record.

Your Purchase Order Number: ______________________

4. Check for Purchasing Info Record

Next, we will confirm that the system did not create a purchasing info record was NOT created when we saved the purchase order. The only way to see if something does not exist in the SAP system is to try and see if it is there by searching. To look for a purchasing info record, follow the menu path:

Menu Logistics Materials Management Purchasing Master Data Info Record Display

Trans.

code

Search for your vendor (### Portage Material), enter material LAMP###, US00 for

Purchasing Org, and DL00 for Plant should be entered as default values from the Parameter

IDs. Click on the enter icon ( ). Confirm that your entries are correct, and then click on the

exit icon ( ) to return to the SAP Easy Access screen.


5. Receive Goods into Inventory

Next, we will receive the goods from the purchase order into inventory. To do this, follow the menu path:

Menu Logistics Materials Management Inventory Management Goods Movement Goods Receipt For Purchase Order GR for Purchase Order (MIGO)

Trans.

code

Make sure to use the Purchasing Documents for Material tab, then enter LAMP### for

Material and DL00 for plant and click on the enter. Click on the Where tab to tell the

system where we are putting the receipt (storage location RM00 (Raw materials)). Make

sure that Item OK is selected, meaning that 100 lamps were in the shipment and passed

inspection, then click on the save icon ( ). You should get a message like the following:

________________________________

Click on the exit icon ( ) to return to the SAP Easy Access screen.


Click on the search icon to find the purchase order number

6. Verify Goods Receipt

Next, we will verify that the goods receipt is now in the system by looking at the Stock/Requirements List. To do this, follow the menu path:

Menu Logistics Production MRP Evaluations Stock/Requirements List

Trans.

code

Make sure material LAMP### and plant DL00 are entered, then click enter. Make sure your

material and plant are properly specified on the Individual access tab, then click on the enter

icon ( ). Verify 100 lamps in stock. Click on the exit icon ( ) to return to the SAP Easy

Access screen.

7. Check G/L Account Balance

Not only should the lamps show up in the materials management area, but it should also show up on the general ledger accounts. To verify this, follow the menu path:

Menu Accounting Financial Accounting General Ledger Information System General Ledger Reports (New) Line Items G/L Account

Statements

Trans.

code

Enter US00 for Company code, the current year for fiscal year, the date you started this

exercise as the Posting date.

Make sure the selections:

G/L account line items

Asset line items

Material line items

Standard documents

are checked. Then click on the execute icon ( ). This will produce the following report on

G/L account 200####, Inventory-Raw Material. The 100 units purchased have created a debit

of $175.00. The G/L account reflects the value of the raw materials received. Click on the

exit icon ( ) to return to the SAP Easy Access screen.


Note: You may have additional entries if you have performed other purchasing transactions

before working on this exercise.

8. Create a Second Purchase Order

We will now create a second purchase order to demonstrate how SAP: Helps manage purchased material prices Adjusts G/L records with Moving Average Prices Can automatically create a purchasing info record

To create another purchase order, we will again follow the menu path:Menu Logistics Materials Management Purchasing Purchase Order Create

Vendor/Supplying Plant Known

SAP tries to make data input easier by remembering the last configuration of a screen and previous values for field entries. This time, we don’t have to clear out the EnjoySAP window or expand the item overview area. In addition, we can use the backspace key on the vendor field to find the vendor number for ### Portage Materials and purchasing group North America (N00). Clicking on the enter icon ( ) calls up data about ### Portage Materials. Enter the material number (LAMP###), a quantity of 100 and delivery date a date two weeks into the future, and A NEW NET PRICE OF 1.80. Make sure that InfoUpdate is selected this time, so that a purchasing info record will be created automatically when this order is saved. Click on the save icon ( ) to save the purchase order. You will get the following message:

Click on the Save option to save the purchase order. Click on the exit icon ( ) to return to the SAP Easy Access screen.

Your second Purchase Order Number: ______________________

9. Check for Purchasing Info Record

Next, we will confirm that the system created a purchasing info record when we saved the second purchase order. To look for the new purchasing info record, follow the menu path:



Click on Save

Search for your vendor (### Portage Material), enter material LAMP###, US00 for

Purchasing Org, and DL00 for Plant should be entered as default values from the Parameter

IDs. Click on the enter icon ( ).

The purchasing info record has been created, but little data has been maintained. Click on

the Purch. org. data 1 icon. No pricing or planned delivery lead time data has been

maintained. The standard quantity was taken from the purchase order that created the info

record. While the purchasing info record has now been created, there is very little useful

data maintained at this point. Click on the exit icon ( ) to return to the SAP Easy Access

screen.

10. Receive Goods into Inventory

Next, we will receive the goods from the purchase order into inventory and examine the impact the new price has on the value of our inventory. To receive the purchase order into inventory, follow the menu path:

Menu Logistics Materials Management Inventory Management Goods Movement Goods Receipt For Purchase Order GR for Purchase Order (MIGO)


Material and DL00 for plant and click on the enter. Perform the search as shown above, and

the SAP system should find your purchase order:


Click on the search icon to find the purchase order number

Double-click on the correct purchase order number to select it, then click on the enter icon (

) to pull up the data from the purchase order. Click on the Where tab to tell the system where we are putting the receipt (storage location RAW MATERIALS (RM00)). Make sure that Item OK is selected, meaning that 100 lamps were in the shipment and passed inspection, then click on the save icon ( ). You should get a message like the following: _________________________________


11. Check Inventory in the Material Master

The first place we can view the impact of two goods receipts for material purchased at different prices is in the material master record. To view the material master record, follow the menu path:

Menu Logistics Materials Management Material Master Material Display Display Current

Trans.

code

Enter your material number LAMP###. Click on the enter icon ( ), which will produce the following pop-up window to select material master views: Accounting 1 view, then click on the enter icon. Enter DL00 for Plant, then click on the enter icon.


Purchase order numbers are sequential. The most current purchase order will have the highest document number.Double-click to select the correct purchase order

We processed two orders for the lamp with different prices:

Quantity Unit Price TotalOrder 1 100 $1.75 $175.00 Order 2 100 $1.80 $180.00

200 $355.00

So the average price for a lamp is currently:

Average Price=$355 . 00200 units

=$1 .775 per unit


12. Perform Goods Issue


The moving average price is $1.78 (actually $1.775, as we will see soon), there are 200 units in stock and the total value of this inventory is $355.00

Next, we will withdraw 100 lamps from inventory by performing a goods issue to a cost center. To do this, follow the menu path:

Menu Logistics Materials Management Inventory Management Goods Movement Goods Issue

Trans. code

Enter Movement type 201 (Consumption for Cost Center from Warehouse), which means that the cost for this material withdrawal will be absorbed by a cost center. Because the controlling module, which manages managerial and cost accounting, has been implemented in this system, any transaction involving a cost or expense must have some object to absorb the cost. This can be a cost center, which represents an overhead cost object, or a production or sales order, or a project, among others. After specifying the movement type 201, which tells the system we will be providing a cost center, enter Plant DL00 and Storage Location RM00 (raw materials), then click on the enter icon ( ).

Enter cost center NAPR1000 (production cost), Material LAMP### and quantity 100, then click on the save icon ( ). Click on the exit icon ( ) to return to the SAP Easy Access screen.

To see how much the SAP system charged the cost center for the 100 lamps, follow the menu path:

Menu Accounting Controlling Cost Center Accounting Information System

Reports for Cost Center Accounting Line Items Cost Centers: Actual

Line Items

Trans. code

Enter controlling area NA00. Enter cost center NAPR1000, then click on the enter icon ( ). Executing the cost center report will produce the following results: 100 units were charged to the cost center at a cost of $177.50. Use the exit icon ( ) to return to the SAP Easy Access screen.

13. Recheck G/L Account Balance

We can review the costs for these transactions using the G/L Account Statement, which we have seen before. To do this, follow the menu path:

Menu Accounting Financial Accounting General Ledger Information

System General Ledger Reports (New) Line Items G/L Account Statements

Enter US00 for company code, the current year for fiscal year, the date you started this

exercise as the Posting date.

Make sure the selections:


G/L account line items

Asset line items

Material line items

Standard documents

are checked. Then click on the execute icon ( ).

This report shows the impact of the two purchases and one material withdrawal. The table below more clearly illustrates how the moving average price works:

Quantity Unit Price Trans. Total TotalOrder 1 100 $1.75 $175.00 Order 2 100 $1.80 $180.00

200 $355.00

Withdrawal 1 100 $1.775 $177.50 100 $177.50

After the two purchases, GBI company has 200 lamps, for which it paid a total of $355.00, or

an average of $1.775 per lamp, which is the moving average price. The 100 lamps that are

withdrawn are costed at the moving average price, so that the remaining inventory of 100

lamps is valued at $177.50, or $1.775 per lamp—the moving average price.

One more purchase will further illustrate two concepts—the role of the purchasing info

record and how moving average prices work.

Use the exit icon ( ) to return to the SAP Easy Access screen.

14. Create a Third Purchase Order

We will now create a third purchase order. This time, the purchasing info record exists and will help us determine pricing. To create the third purchase order, we will again follow the menu path:

Menu Logistics Materials Management Purchasing Purchase Order Create Vendor/Supplying Plant Known

Again use the backspace key on the vendor field to find the vendor number for ### Portage

Materials. Clicking on the enter icon ( ) to call up data about ### Portage Materials.

Vendor name and currency are pulled up from the vendor master. Similarly, we can use the

backspace key to call up the material number for lamps, LAMP###. Enter the material

number, quantity (100) and delivery date is a date two weeks into the future. This time,

LEAVE THE PRICE BLANK. Clicking on the enter icon ( ) will again call up data about the

lamp (material LAMP###) from the database. It will again open the item detail section of the


screen, but this time, a default price will be entered automatically because the R/3 system

set the default price using the previous purchase order.

Because the purchasing info record exists, the SAP system looked at the previous purchase

order to find a price for the lamps. If a price has been set in the purchasing info record, that

price would have been used. Click on the save icon ( ) to save the purchase order. You will

get the following message:

Click on the Save option to save the purchase order. Use the exit icon ( ) to return to the SAP Easy Access screen.

Your third Purchase Order Number: ______________________

15. Create a Third Goods Receipt

We will again receive goods from the purchase order into inventory and examine the impact the new price has on the value of our inventory. To receive the purchase order into inventory, follow the menu path:

Menu Logistics Materials Management Inventory Management Goods Movement Goods Receipt For Purchase Order GR for

Purchase Order (MIGO)


Material and DL00 for plant and click on the enter. Perform the search as shown above, and

the SAP system should find your purchase order:


Double-click on the correct purchase order number to select it, then click on the enter icon () to pull up the data from the purchase order:

Click on the Where tab to tell the system where we are putting the receipt (storage location raw materials (RM00)). Make sure that Item OK is selected, meaning that 100 lamps were in the shipment and passed inspection, then click on the save icon ( ). You should get a message like the following: ___________________________________


16. Check Inventory in the Material Master


Double-click on the purchase order with the highest purchase order number

Click on the Where tab and enter RM00 for storage locationMake sure Item OK is selected, then click on the Save (post) icon

We can again check the impact of the new goods receipts in the material master record. To view the material master record, follow the menu path:


Enter your material number LAMP###. Click on the enter icon ( ), which will produce the

following pop-up window to select material master views: Accounting 1 view, then click on

the enter icon. Enter DL00 for Plant, then click on the enter icon.

The moving average price has again changed because of the new material receipt. The analysis is as follows:

Order 1 100 $1.75 $175.00 Order 2 100 $1.80 $180.00

200 $355.00


The moving average price is now $1.79 (actually $1.7875, and there are 200 units in stock for a total value of this inventory is $357.50

Withdrawal 1 100 $1.775 $177.50 100 $177.50

Order 3 100 $1.80 $180.00 200 $357.50

So the average price for a lamp is currently:

Average Price=$357 .50200 units

=$1 .7875 per unit


17. Create Condition (Price) in Purchasing Info Record

The purchasing info record provides the ability to manage prices and maintain better controls and records. To use the purchasing info record to manage purchased item prices, a condition record has to be entered. To do this, follow the menu path:

Menu Logistics Materials Management Purchasing Master Data Info

Record Change

Trans. code

This information should be entered automatically—if not, search for the vendor and material, and enter the appropriate Purchasing Org. and Plant. Make sure the appropriate data is entered, then click on the enter icon ( ). Click on the Conditions tab to enter the material LAMP### price.


The SAP system will use today’s date as the default start date, and will also enter the currency and unit of measure from the vendor and material masters. Enter 1.85 for the material price, then click on the save icon ( ) to save the new material price. Click on the exit icon ( ) to return to the SAP Easy Access screen.

18. Create a Fourth Purchase Order

We will now create a fourth purchase order. This time, the pricing condition exists in the

purchasing info record and will be used by the SAP system to determine pricing. To create

the fourth purchase order, we will again follow the menu path:


Again use the backspace key on the vendor field to find the vendor number for ### Portage

Materials. Clicking on the enter icon ( ) to call up data about ## Portage Materials. Similarly, we can use the backspace key to call up the material number for lamp, LAMP###. Enter the material number, quantity (100) and delivery date is a date two weeks into the future. This time, LEAVE THE PRICE BLANK. Clicking on the enter icon ( ) will again call up

data about the lamp (material LAMP##) from the database. It will again open the item detail

section of the screen, but this time, a default price will be entered automatically because the

R/3 system set the default price using the previous purchase order.


Enter 1.85 for the price

Because a condition (price) now exists in the purchasing info record, the SAP system uses that price ($1.85) instead of the price from the previous purchase order ($1.80) to find a price for the lamps. Click on the save icon ( ) to save the purchase order. You will get the following message:


Your Fourth Purchase Order Number: _______________________

19. Create a Fifth Purchase Order and Override the Default Price

We will now create a fifth purchase order and will observe the impact of manually overriding the price. To create the fifth purchase order, we will again follow the menu path:


Again use the backspace key on the vendor field to find the vendor number for ### Portage Materials. Enter the material number (LAMP###), quantity (100) and delivery date is a date two weeks into the future. This time, LEAVE THE PRICE BLANK. Clicking on the enter icon ( ) will again call up data about the lamp from the database. It will again open the SCM Genap 2013/2014Faculty of Computer Science University of Indonesia 17

The R/3 system set the default price using the purchasing info record price of $1.85

item detail section of the screen, and again a default price will be entered automatically from the purchasing info record. This time, we will manually override the default price:

The SAP system entered a default price of 1.85, but the pricing procedure will allow this to be overridden. Note that the system can be configured so that a manual override is not possible. Enter a price of 1.90, then click on the save icon ( ) to save the purchase order. You will get the following message:


Your Fifth Purchase Order Number: _______________________

20. Review Condition (Price) in Purchasing Info Record

We should review the purchasing info record to see if the price that was manually entered in the last step had an impact on the condition in the purchasing info record. We can do this by reviewing the purchasing info record in either display or change mode. If we make no changes, then there is no difference in which approach we use. Entering the review in change mode has the advantage of allowing us to easily correct any errors.

To review the purchasing info record in change mode, follow the menu path:


Replace the default price of 1.85 per unit with a price of 1.90 per unit


Again, this information should be entered automatically—if not, search for the vendor and

material, and enter the appropriate Purchasing Org. and Plant. Click on the Conditions tab.

Note that the price is still 1.85. The manual override changed the purchase order, but had not impact on the pricing condition. If another purchase order is created for the lamp, the SAP system will use 1.85 for the default price, not the 1.90 manually entered in the last purchase order.

Click on the exit icon ( ) to return to the SAP Easy Access screen. To see how the purchasing info record can be used to manage price changes, reenter the Change Info Record transaction. Click on the enter icon ( ), then click on the Conditions icon to get back to the following pop-up window:


Price is still 1.85

To enter a price change, click on the New validity period icon ( ). This will bring up the Create Gross Price Condition screen:

Enter the first day of the next month for the Valid on date, so that the new price will take

effect on the first of the next month. Enter 1.90 for the price, then click on the save icon (

) to save the price change. This will take you back to the initial Change Info Record screen


Click on New validity period

Enter the first date of the next month for the Valid on date, then enter 1.90 for the new price and click on the save icon

and click on the enter icon ( ), then click on the Conditions icon to get the Validity Periods

pop-up window:

Note that by using conditions in the purchasing info record, it is much easier to review pricing as well as manage price changes. Click on the cancel icon ( ), then on the exit icon (

) to return to the SAP Easy Access screen.

21. Create a Fourth Goods Receipt for Two Purchase Orders

Finally, we will receive the last two purchase orders to review the moving average price one last time. We can use the same process as before, following the menu path:

Menu Logistics Materials Management Inventory Management Goods Movement Goods Receipt For Purchase Order GR for

Purchase Order (MIGO)

Double-click on the fourth purchase order number to select it, then click on the enter icon () to pull up the data from the purchase order, then click on the search icon ( ) to search

for the last purchase order number. Again, double-click on the fifth purchase order number to select it, then click on the enter icon ( ) to pull up the data from this purchase order.


Close the item detail portion of the screen to make processing easier:


Close the item detail portion of the screen to make processing easier

Click on OK for both items, enter storage location RM00 for both items, then click on the Save (post) icon

Click on OK for both items, enter storage location raw materials for both items, then click on the Save (post) icon ( ). You should get a message like the following: _______________________________


21. Verify Moving Average Prices

For one final time, we will verify the moving average prices in the SAP R/3 system. The relevant transactions that we have processed so far are summarized in the following table:

Transaction Units Unit CostOrder 1 100 $1.75 Order 2 100 $1.80 Withdrawal 1 -100 $1.775 Order 3 100 $1.80 Order 3 100 $1.85 Order 4 100 $1.90

Given this information, what should the moving average price be? ___________________

One way to check is to look one more time at the Material Master. One menu path to get to the material master is:


Select the Accounting 1 view for material LAMP### in Plant DL00. This screen shows the standard price to be $1.83. This is obviously a rounded value. An interesting question is the internal accuracy of this price. In other words, does SAP use the rounded figure in cost calculations, or does it maintain a more accurate figure internally? ____________________________________________________________________________________________________________________________________________________________

An interesting way to test this is to create one more goods issue to a cost center for lamps, and then check the cost charged to the cost center. To issue lamps to a cost center, follow the menu path:

Menu Logistics Materials Management Inventory Management Goods

Movement Goods Issue

Enter Movement type 201 (Consumption for Cost Center from Warehouse), Plant DL00 and Storage Location raw materials, then click on the enter icon ( ).

Enter cost center NAPR1000, Material LAMP### and quantity 100, then click on the save icon ( ). To review the costs associated with this goods issue, run the cost center report by following the menu path:

Menu Accounting Controlling Cost Center Accounting Information System Reports for Cost Center Accounting Line Items Cost Centers: Actual


Line Items

Enter NAPR1000 in the cost center, then click on the execute icon. Executing the cost center

report will produce the following results:

Although SAP only maintains two decimal places for the moving average price, in actual cost calculations, it uses the total value of the stock ($732.50) divided by the total stock (400 units) to obtain a more accurate cost for the goods issue ($183.13) than would have been obtained by using the moving average price ($183.00).

Note also that by using the moving average price to value goods issues, the moving average

price does not change when goods are issued. They only change when goods are received

and there is a price difference between the price of the new goods being received and the

moving average price. Click on the exit icon ( ) to return to the SAP Easy Access screen.

22. Print Result

To verify that you have completed this exercise, we will report the quantity and value of material LAMP### in stock. To do this, follow the menu path:

Menu Logistics Materials Management Valuation Balance Sheet Valuation

Results Balance Sheet Value per Account

Trans Code

Enter your company code and material, then click on the execute icon ( ). This will produce the following report:


Note the cost of 183.13

If you have 300 units in stock with a value of $549.37, congratulations.


There should be 300 units in stock with a value of $549.37