Download ppt - Contents: Introduction to the Procurement Process Purchasing Items Purchasing Service Troubleshooting Issues in Purchasing Purchasing - A/P

Contents: Introduction to the Procurement Process

Purchasing Items

Purchasing Service

Troubleshooting Issues in Purchasing

Purchasing - A/P

In this unit, you will: Master the basic steps of the procurement process for purchasing items

or services

Understand the consequences of each step on inventory and accounting

Handle issues that arise with a vendor’s delivery and billing

Purchasing - A/P: Purpose

You purchase your warehouse goods from external vendors. Normally, you use the purchase order document to order goods. In some cases, however, you submit your order by phone and your vendor delivers the items immediately. In this case, the process modeled in the system must be as short and quick as possible.

If the delivered goods do not meet your quality standards, you want to return them to your vendor. This can happen either before or after you have received the invoice.

You purchase services such as web design and landscaping from vendors using purchase orders. Other services such as electricity or rent are purchased without purchase orders.

Purchasing - A/P: Business Example

Purchasing Items: Unit Overview Diagram

Topic 3: Troubleshooting Issues in Purchasing

Purchasing - A/P

Topic 1: Purchasing Items

Topic 2: Purchasing Services

Purchasing Items: Process Overview

Purchase Order Goods Receipt PO

A/P Invoice Outgoing Payment

System Configuration

Purchasing

Warehouse management

Production

Inbound logistics

Outbound logistics

Marketing &

SalesService

Financial controlling

Master data

Purchase Order

10 printers are currently in stock We order 5 more from our vendor Five appear on the inventory reports as ordered 15 will be available to promise, Although only 10 are physically in stock

Key Master Data in Purchasing: Vendor

All purchasing transactions

One or more control accounts for vendors

Possibletransactions

Vendors

Addresses in the Purchase Order

Vendor

Ship to Address

Pay to Address

Purchase Order

Logistics Tab

Company / Warehouse

Key Master Data in Purchasing: Items

Item master fields useful In purchasing Preferred Vendor

Manufacturer Catalog Number

Purchasing Unit of Measure

Customs group for imported items

Tax information

Drafts of Sales or Purchasing Documents

Vendor / Customer

DocumentDocument

Item Descr. Quantity Price

Y1000

A03 Printer 20 249,90 B10 Cartridge 40 4,50

Vendor / Customer

Document - DraftsDocument - Drafts


Y1000


Vendor / Customer

DocumentDocument


Y1000


Save as

DraftAdd

Documents Output

Vendor / Customer

DocumentDocument

Y1000

A03 Printer 20 249,90

B10 Cartridge 40 4,50

Print Preview Printout

Y1000

A03 20pcs 49,90B10 40pcs 4,50

Total 1178...

Y1000

A03 20pcs 49,90B10 40pcs 4,50

Total 1178...

File Preview File Print File Export

Y1000

A03 20pcs 49,90B10 40pcs 4,50

Total 1178...

File (PDF, Text, XML, MS Word, MS Excel, or Image)

File Send E-mail File Send Fax

Goods Receipt PO

10 printers are currently in stock We ordered 5 more from our vendor The vendor delivers 5 After goods receipt, 15 are in stock

Two options to create a follow-up document: Copy to/ Copy from

Copy to Copy from

Open saved document to copy All items copied to new

document No options available on how

items are copied However, you can delete items

and adjust quantities after copying

Enter business partner in a new document

Choose one or multiple documents from a list

Draw document wizard allows you to: customize rows and quantities

copied select the exchange rate to use

Effects of the Goods Receipt PO

1

4

23

A/P Invoice

You receive an invoice from the vendor for the 5 printers You enter an A/P invoice to reflect the vendor invoice The A/P invoice is the basis for payment to the vendor

Effects of the A/P Invoice

34

Quantity increases only if no prior goods receipt is referenced.

21

Postings in Purchasing Process for Inventory Items

Purchased Item

Fixed Assets

Inventory Item

Sales Item

Allocation Acc.Stock Acc.

100 100Vendor

100100

AllocationAcc.

Item Category:

Document Flow in Purchasing

General Ledger(Value)

Warehouse(Quantity)

1 2 3

Payment Processing

We owe the vendor for 5 printers An A/P invoice has been entered for the amount owed You create an Outgoing Payment according to payment terms The journal entry:

Reduces cash (credit) Decreases the amount owed to the vendor

Purchasing Reports

Purchase Analysis Open Items List Vendor Liabilities Aging Drag & Relate

Model Report: Inventory Status

Stock Changes in Purchasing A/P

In Stock - Committed + Ordered = AvailableTransaction

Purchase order

Goods receipt PO

Goods Receipt PO w/o reference to PO

A/P invoice forgoods receipt PO

A/P invoice with referenceto Purchase Order

Goods returns

A/P Credit memo

Pu

rch

asin

g /

AP

A/P Reserve Invoice w/o reference to PO

Goods Recept PO with reference to A/P Reserve Invoice

+ +

+ -

+ +

+ +

+ +

+ -

-

-

-

-

+ Indicates increase in quantity- Indicates decrease in quantity

-

Purchasing Items: Topic Summary

Key points from the Purchasing Items topic: The four main steps in the procurement process for items are:

Purchase Order

Goods Receipt PO

A/P Invoice

Outgoing Payment

Key master data used in purchasing: vendor and items

Each purchasing document has a different effect on inventory and/or accounting.

Exercises for Purchasing Items

Purchasing Services: Unit Overview Diagram


Purchasing - A/P



Purchasing Services – Process Overview

Purchase Order A/P Invoice Outgoing Payment

Item / Service Type

ServiceService Customer

Description

DocumentDocument

G/L Account Price

C00001C00001

Name SmithSmith

ItemItem Customer

Item No.

DocumentDocument

Description Quantity

C00001C00001

Name SmithSmith

Price

In Purchasing (and sales) you can set your documents as either Item type or Service type.

Create a Service Invoice

Vendor Master Data

Vendor Invoice

Default dataEnter data

A /P Invoice

Vendor number Invoice number Invoice date Description G/L Account Total due

Vendor name Invoice number Invoice date Description Amount due …

Vendor number Vendor name Address Payment terms Payment method …

Check for duplicate invoice numbers

Postings in Purchasing Process for Non-Inventory Items

Purchased Item

Fixed Assets

Inventory Item

Sales Item

Vendor

Expenses AccountEU Expenses Acc.Foreign Expenses Acc.

100100

Item Category:

Exercises for Purchasing Services

Purchasing Services: Topic Summary

Key points from this topic: The main documents used in purchasing services are:

Purchase order

A/P invoice

Outgoing payment

Services can be represented by a description in a service type document or represented as an item in an item type document.

For services such as rent or utilities, typically an A/P invoice is created without a purchase order.

Troubleshooting Issues in Purchasing: Unit Overview Diagram


Purchasing - A/P



Goods Receipt PO

#

1

2 20

3

Goods Receipt PO

Partial Deliveries and Overdeliveries

1) Overdelivery 2) Add Items

Purchase Order

#

1 10

2 15

3 2

Goods Receipt PO

#

1 6

2

3

#

1

2

3

4 1

Goods Receipt PO

#

1 4

2

3

3) 1st Partial Delivery

4) 2nd Partial Delivery

Vendor Y1000Vendor Y1000

Vendor Y1000 Vendor Y1000

Vendor Y1000


Warehouse(Quantity)

Goods Returns

Stock Acc.100 100

Allocation Acc.

20 scanners were ordered and delivered 2 scanners were damaged in transit Use the goods return to return the scanners

to the vendor for creditStock Acc.

Allocation Acc.

100 100


Credit Memo for Purchasing

Allocation Costs Acc.Stock Acc.

100 100

VendorAlloc.

100100

Stock Acc. Vendor

100 100

Warehouse(Quantity)

50 CD boxes were ordered, delivered and invoiced

5 boxes were defective Use the credit memo to return items

for credit when an A/P invoice exists

Credit related to specific

invoice

Partial amount credit memo

Reduce total due to vendor

Reduce total due to vendor

Full amount credit memo

Copy from invoice

Closed Invoice

Do not copy from invoice

Credit related to specific,

single invoice

Reverse invoiceamount & reduce

amount due to vendor

Full amount credit memo

Partial amount credit memo

Reduce invoice amount and

amount due to vendor

Open Invoice

General credit related to multiple invoices

Creating a credit memo with or without reference

2500400020608560

2500400020608560

Researching invoice payment status

Vendor Balance 8560

Troubleshooting Issues in Purchasing: Topic Summary

Key points from this topic: A goods receipt PO can handle over deliveries or under deliveries

A goods return is used to return items not yet invoiced.

A credit memo can be created with reference to an open invoice.

If the invoice is paid, the credit memo must be created without reference.

Exercises for Troubleshooting Issues in Purchasing

Purchasing - A/P: Unit Summary

You should now be able to: Purchase items and services in SAP Business One

State the consequences of each process step on inventory and accounting.

Handle issues that arise from a vendor’s delivery or billing errors.