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In case of external VENDOR, when your company returns a good, received with reference to a purchase order, the reference of the PO is not mandatory to POST the RETURN in the system. The system just posts a goods receipt correction and issues to a credit memo against the vendor. However, if the vendor is internal, you may REQUIRE the reference of the PO. In this case, the system automatically updates the stock, without any internal billing.

In case of external vendor, when your company returns a good, received with reference to a purchase order, the reference of the PO is not mandatory to post the return in the system. The system just posts a goods receipt correction and issues to a credit memo against the vendor. However, if the vendor is internal, you may require the reference of the PO. In this case, the system automatically updates the stock, without any internal billing.

In STO, UB document type is used and it also requires a supplying plant for the movement of materials, whereas in the STANDARD PO, NB document type is used and requires a vendor for the PROCUREMENT of MATERIAL.

In STO, UB document type is used and it also requires a supplying plant for the movement of materials, whereas in the standard PO, NB document type is used and requires a vendor for the procurement of material.

Using multiple account ASSIGNMENT in a PO ALLOWS you to APPORTION the cost associated with a PO item. When you use the multiple account assignment, the account assignment data TAKES the form of individual account assignment items.

Using multiple account assignment in a PO allows you to apportion the cost associated with a PO item. When you use the multiple account assignment, the account assignment data takes the form of individual account assignment items.

The service procurement is used by the organizations to procure the services or part of the services. It consists of activities, such as BIDDING, contract MANAGEMENT, and all the activities from requisition to payment.

The service procurement is used by the organizations to procure the services or part of the services. It consists of activities, such as bidding, contract management, and all the activities from requisition to payment.

Framework Order (FO) is a purchasing DOCUMENT used for PROCURING materials or services. This type of purchase order has an extended validity period instead of a stipulated DELIVERY date as in case of the Standard Purchase Order (PO).

Framework Order (FO) is a purchasing document used for procuring materials or services. This type of purchase order has an extended validity period instead of a stipulated delivery date as in case of the Standard Purchase Order (PO).

Yes, you can ADD custom FIELDS to a PURCHASE ORDER and REQUEST for Quotation.

Yes, you can add custom fields to a Purchase Order and Request for Quotation.

The OPPR transaction code is used to convert PLANNED Orders (PO) into requisitions in MATERIAL Requirement PLANNING (MRP).

The OPPR transaction code is used to convert Planned Orders (PO) into requisitions in Material Requirement Planning (MRP).

You can CONVERT the Planned Orders into Purchase REQUISITIONS either by CONVERTING them individually or by collectively converting all the planned orders.

You can convert the Planned Orders into Purchase Requisitions either by converting them individually or by collectively converting all the planned orders.

A DOCUMENT type is used to differentiate between different kinds of purchasing documents. In other words, different purchasing documents are DISTINGUISHED on the BASIS of their document types. Document types are defined for RFQs, PURCHASE ORDERS, and contracts.

A document type is used to differentiate between different kinds of purchasing documents. In other words, different purchasing documents are distinguished on the basis of their document types. Document types are defined for RFQs, purchase orders, and contracts.

In the external PROCUREMENT, the procurement of raw material, trading goods, and services is MADE from the external supplier for the organizational units of an enterprise that need such ITEMS or services.

In the INTERNAL procurement, the procurement of raw material, trading goods, and services is made from an organizational unit of an enterprise for other organizational units of the same enterprise that NEEDS such items or services.

In the external procurement, the procurement of raw material, trading goods, and services is made from the external supplier for the organizational units of an enterprise that need such items or services.

In the internal procurement, the procurement of raw material, trading goods, and services is made from an organizational unit of an enterprise for other organizational units of the same enterprise that needs such items or services.

In procurement for stock, when you order a material, the system does not require an account assignment because the posting to the APPROPRIATE stock and consumption occurs automatically every time the transaction related to GOODS takes PLACE.

In procurement for consumption, you need to enter the account assignment (such as cost center) that specifies the purpose of consumption. On the receipt of goods, the material or service is SHOWN as it has been consumed.

In procurement for stock, when you order a material, the system does not require an account assignment because the posting to the appropriate stock and consumption occurs automatically every time the transaction related to goods takes place.

In procurement for consumption, you need to enter the account assignment (such as cost center) that specifies the purpose of consumption. On the receipt of goods, the material or service is shown as it has been consumed.

SERVICE PROCUREMENT CONSISTS of ACTIVITIES, such as bidding, contract management and operational procurement PROCESSES from requisition to payment.

Service procurement consists of activities, such as bidding, contract management and operational procurement processes from requisition to payment.

An ITEM Category is a FIELD in purchase requisition that specifies the category of purchase requisition. The FOLLOWING are the different TYPES of Item CATEGORIES:

•  Blank-Standard
•  K-Consignment
•  L-Subcontracting
•  S-Third party
•  D-Service
•  U-Stock Transfer

An Item Category is a field in purchase requisition that specifies the category of purchase requisition. The following are the different types of Item Categories:

Yes, you are ALLOWED to assign multiple ACCOUNTS to one purchase order line. Multiple account ASSIGNMENTS may be required in a SITUATION where the cost of the item to be purchased is divided among multiple PEOPLE.

Yes, you are allowed to assign multiple accounts to one purchase order line. Multiple account assignments may be required in a situation where the cost of the item to be purchased is divided among multiple people.

SAP provides you with a NUMBER of ACCOUNT ASSIGNMENT categories that you can use for a PURCHASE order. An account assignment category indicates the account assignment details that are required

SAP provides you with a number of account assignment categories that you can use for a purchase order. An account assignment category indicates the account assignment details that are required

Yes, a LINE item in a purchase ORDER can be blocked after it has been created. BLOCKING a line item stops acceptance of any GOODS receipts related to that line item.

Yes, a line item in a purchase order can be blocked after it has been created. Blocking a line item stops acceptance of any goods receipts related to that line item.

In the SAP system, each document is assigned a unique NUMBER. These numbers can be alphanumeric also. You can assign these numbers in two ways, either internally or externally, depending on the policy of your COMPANY or enterprise. An internal number DEPICTS that the SAP system assigns the number automatically, whereas an external number depicts that the person creating the document MUST supply manually. Alphanumeric assignment of numbers is only possible in the LATTER case.

In the SAP system, each document is assigned a unique number. These numbers can be alphanumeric also. You can assign these numbers in two ways, either internally or externally, depending on the policy of your company or enterprise. An internal number depicts that the SAP system assigns the number automatically, whereas an external number depicts that the person creating the document must supply manually. Alphanumeric assignment of numbers is only possible in the latter case.

DOCUMENT type is the unit to differentiate between DIFFERENT kinds of purchasing documents in the SAP system. Each document consists of a unique number, which determines the significant number RANGE and the fields that are offered to you for DATA maintenance purposes.

Document type is the unit to differentiate between different kinds of purchasing documents in the SAP system. Each document consists of a unique number, which determines the significant number range and the fields that are offered to you for data maintenance purposes.

Some of the data points provided by purchasing for the materials are Base unit of measure, purchasing group, remainder days, SHIPPING instructions, TOLERANCE levels, GR processing time, critical PART, and JIT schedule indications.

Some of the data points provided by purchasing for the materials are Base unit of measure, purchasing group, remainder days, shipping instructions, tolerance levels, GR processing time, critical part, and JIT schedule indications.

A purchasing document is a document type used by the purchasing DEPARTMENT to procure MATERIALS or SERVICES.

A purchasing document is a document type used by the purchasing department to procure materials or services.

The confirmation control key is used to SPECIFY whether or not a NOTIFICATION for SHIPPING is EXPECTED PO item.

The confirmation control key is used to specify whether or not a notification for shipping is expected PO item.

The Purchasing DOCUMENT Category for RFQ is the SINGLE character A, and for other documents such as for PURCHASE Orders, the category is F, for Contracts it is K, and for Scheduling AGREEMENTS it is L.

The Purchasing Document Category for RFQ is the single character A, and for other documents such as for Purchase Orders, the category is F, for Contracts it is K, and for Scheduling Agreements it is L.

You can use the INFORMATION record to find the list of the materials to find out the vendors from whom the GOODS have been PURCHASED in the past. Thereafter, the request for purchase requisition is issued. ALTERNATIVELY, you can go for a source list.

You can use the information record to find the list of the materials to find out the vendors from whom the goods have been purchased in the past. Thereafter, the request for purchase requisition is issued. Alternatively, you can go for a source list.

FOLLOW this navigation path to release a RFQ: SAP Menu -> Logistics -> Materials Management->Purchasing->RFQ/Quotation->ME45-Release. A SCREEN appears; enter all the information in the screen and the RFQ is released based on the information entered.

Follow this navigation path to release a RFQ: SAP Menu -> Logistics -> Materials Management->Purchasing->RFQ/Quotation->ME45-Release. A screen appears; enter all the information in the screen and the RFQ is released based on the information entered.

RFQ delivery schedule REFERS to the information ENTERED by the purchaser that comprises date, TIME, and amount REQUIRED on that date. You can access the delivery scheduling SCREEN by pressing the SHIFT+F5 key combination from the keyboard in the SAP interface.

RFQ delivery schedule refers to the information entered by the purchaser that comprises date, time, and amount required on that date. You can access the delivery scheduling screen by pressing the SHIFT+F5 key combination from the keyboard in the SAP interface.

Different important key fields for RFQ are as follows:

•  RFQ Date
•  QUOTATION Deadline
•  RFQ Document Number
•  Organizational Data
•  Default data for Items
•  Collective Number
•  VALIDITY Start/Validity End
•  Application By
•  Binding Period
•  REFERENCE Data or RFQ ITEM DETAIL
•  RFQ Delivery Schedule
•  Additional Data
•  Vendor Selection

Different important key fields for RFQ are as follows:

The RFQ type is a two-character field used in the configuration of RFQ DOCUMENT types. It HELPS the company to DIFFERENTIATE between the DIFFERENT types of RFQs that they can send out.

The RFQ type is a two-character field used in the configuration of RFQ document types. It helps the company to differentiate between the different types of RFQs that they can send out.

RFQs can be created in either of the following ways:

•  Using manual APPROACH — Data for an RFQ is entered MANUALLY for the materials for which you wish prices to be quoted.
•  Using copying approach — An RFQ is copied from an existing RFQ.
•  Using referencing approach — An RFQ is created by using reference REQUISITIONS or an outline purchase agreement.
•  Using AUTOMATIC approach — An RFQ is created automatically by using a requisition.

RFQs can be created in either of the following ways:

The RFQs and quotations are processed in the following manner in SAP:
1. RFQ is created either manually or by using an already existing RFQ, requisition, or outline purchase agreement by the company.
2. Company creates the list of vendors who are to receive the RFQ. For this purpose, a SEPARATE document is created for each vendor.
3. Company enters the prices and conditions set out in the quotation submitted by the vendor into the RFQ document.
4. Company carries out a comparative appraisal of all of the vendor quotations by means of the PRICE comparison list. The quotations given by each vendor are compared item by item. The mean value quotation represents the average value of the individual quotes.
5. Company enters the most favorable quotation in an INFO record and sends rejection letters to the other unsuccessful bidders.
6. Finally, company monitors the status of follow-on ACTIVITIES related to the RFQ and quotation (e.g. a contract is set up or a purchase order issued).

The RFQs and quotations are processed in the following manner in SAP:
1. RFQ is created either manually or by using an already existing RFQ, requisition, or outline purchase agreement by the company.
2. Company creates the list of vendors who are to receive the RFQ. For this purpose, a separate document is created for each vendor.
3. Company enters the prices and conditions set out in the quotation submitted by the vendor into the RFQ document.
4. Company carries out a comparative appraisal of all of the vendor quotations by means of the price comparison list. The quotations given by each vendor are compared item by item. The mean value quotation represents the average value of the individual quotes.
5. Company enters the most favorable quotation in an info record and sends rejection letters to the other unsuccessful bidders.
6. Finally, company monitors the status of follow-on activities related to the RFQ and quotation (e.g. a contract is set up or a purchase order issued).

A request for quotation (RFQ) is a document sent to a vendor by a purchasing ORGANIZATION and the vendor sends QUOTATIONS with PRICES in response. An RFQ consists of two parts:

•  RFQ header— Contains GENERAL information, for example, the name and address of the vendor
•  Items — Contain information about the total quantities and delivery dates for the MATERIALS or services specified in the RFQ

A request for quotation (RFQ) is a document sent to a vendor by a purchasing organization and the vendor sends quotations with prices in response. An RFQ consists of two parts:

Quotation is offered by a VENDOR to a purchasing organization that contains the details regarding the supply of materials or performance of SERVICES SUBJECT to specified conditions. A quotation is a legal document that binds the vendor for a certain period. The quotation is created by the vendor in response to a request for a quotation issued by a purchasing organization. A quotation consists of all the details, such as the total quantity and delivery date of a MATERIAL or SERVICE offered.

Quotation is offered by a vendor to a purchasing organization that contains the details regarding the supply of materials or performance of services subject to specified conditions. A quotation is a legal document that binds the vendor for a certain period. The quotation is created by the vendor in response to a request for a quotation issued by a purchasing organization. A quotation consists of all the details, such as the total quantity and delivery date of a material or service offered.

The SAP system can automatically convert purchase requisitions into purchase orders. This task can be performed either ONLINE or in the background. In the PROCESS of conversion, the SAP system attempts to merge as many purchase requisition items as possible to form one purchase order. Automatic PROCESSING of conversion of purchase requisitions to purchase orders is recommended only in the case when you have a well-maintained SAP system, else manual processing is advised.

The SAP system can automatically convert purchase requisitions into purchase orders. This task can be performed either online or in the background. In the process of conversion, the SAP system attempts to merge as many purchase requisition items as possible to form one purchase order. Automatic processing of conversion of purchase requisitions to purchase orders is recommended only in the case when you have a well-maintained SAP system, else manual processing is advised.

The creation indicator defines whether or not the PLANNED orders, PURCHASE requisitions, or schedule lines must be created for materials that are procured externally. It ALSO defines whether or not MRP lists NEED to be created.

The creation indicator defines whether or not the planned orders, purchase requisitions, or schedule lines must be created for materials that are procured externally. It also defines whether or not MRP lists need to be created.

A purchase ORDER is a DOCUMENT type that gives notification about FORMAL requests for materials or SERVICES from an outside vendor or PLANT. A purchase requisition is a document type that gives notification about the need for materials or services.

A purchase order is a document type that gives notification about formal requests for materials or services from an outside vendor or plant. A purchase requisition is a document type that gives notification about the need for materials or services.

The Account ASSIGNMENT category field PLAYS an important role in the purchasing documents. It contains many control functions that help to determine the OBJECTS that are charged in case of an ordered material. The ordered material must be procured for DIRECT usage or consumption. With the help of account assignment category in the purchasing documents, the cost of the material can be allocated to a SINGLE Controlling object or it can be allocated among various Controlling objects.

The Account assignment category field plays an important role in the purchasing documents. It contains many control functions that help to determine the objects that are charged in case of an ordered material. The ordered material must be procured for direct usage or consumption. With the help of account assignment category in the purchasing documents, the cost of the material can be allocated to a single Controlling object or it can be allocated among various Controlling objects.

Procurement can be DEFINED as the purchase of GOODS or SERVICES at the BEST possible total cost in correct amount and quality. It is the process of acquiring goods and services that covers both acquisitions from third PARTIES and from in-house providers.

Procurement can be defined as the purchase of goods or services at the best possible total cost in correct amount and quality. It is the process of acquiring goods and services that covers both acquisitions from third parties and from in-house providers.

The following are the different steps of the MM cycle:

•  CREATE material
•  Create vendor
•  Assign material to vendor
•  PROCURE raw material by using purchase requisition
•  Locate vendor for certain material
•  PROCESS goods receipts
•  Goods issue, and
•  Invoice verification

The following are the different steps of the MM cycle:

The FOLLOWING are the main DOCUMENTS used in MM:

•  Purchase requisitions
•  Purchase orders
•  Goods TRANSFERS
•  Goods receipts
•  Goods ISSUES

The following are the main documents used in MM:

The release procedure differs for internal and external DOCUMENTS. The internal document and the purchase requisition can be released either at the item level or at the header level. Additionally, the internal document can be released ETHER with classification or WITHOUT classification. The external document, such as the purchase order or the request for QUOTATION, can only be released at the header level by the classification METHOD.

The release procedure differs for internal and external documents. The internal document and the purchase requisition can be released either at the item level or at the header level. Additionally, the internal document can be released ether with classification or without classification. The external document, such as the purchase order or the request for quotation, can only be released at the header level by the classification method.

A scheduling agreement contains the DETAILS of a delivery schedule whereas a CONTRACT contains only quantity and PRICE information and does not contain any details of specific delivery DATES.

A scheduling agreement contains the details of a delivery schedule whereas a contract contains only quantity and price information and does not contain any details of specific delivery dates.

A contract can be ONE of the following two types:

•  Quantity contract — In this type of contract, the PURCHASING department AGREES with the vendor for SUPPLY of a specified quantity of material, or services.
•  Value contract — In this type of contract, the purchasing department can limit the total spending for a material with a vendor. The release orders are VALID only till the total spending for the value contract equals the total agreed upon value.

A contract can be one of the following two types:

A contract is an agreement between a customer and a vendor that states that the vendor will SUPPLY MATERIAL to the customer at an agreed price for a specified period of time. It can be based on either a total quantity or a total price. A contract avoids the NEED to CREATE a new purchase order each time the material or SERVICE is required.

A contract is an agreement between a customer and a vendor that states that the vendor will supply material to the customer at an agreed price for a specified period of time. It can be based on either a total quantity or a total price. A contract avoids the need to create a new purchase order each time the material or service is required.

The DOCUMENT types USED in CONTRACT are:

• MK
• WK

The document types used in Contract are:

The document TYPES USED in SA are:

•  LP for standard scheduling AGREEMENTS
•  LT for stock TRANSPORT scheduling agreements
•  LPA for scheduling agreements with release documentation

The document types used in SA are:

Price comparison is USED to compare QUOTATIONS from DIFFERENT vendors. You can use transaction CODE ME49 to PERFORM a price comparison between different vendors.

Price comparison is used to compare quotations from different vendors. You can use transaction code ME49 to perform a price comparison between different vendors.

The blanket purchase order is used for CONSUMABLE materials, such as office paper with a SORT text. In case of blanket purchase order, no Good Receipt (GR) is required for the purchase order. In framework order, the document TYPE is used for purchase order and GR and Service Entry (SE) are required for purchase order.

The blanket purchase order is used for consumable materials, such as office paper with a sort text. In case of blanket purchase order, no Good Receipt (GR) is required for the purchase order. In framework order, the document type is used for purchase order and GR and Service Entry (SE) are required for purchase order.

The DOCUMENT TYPES USED in PO are:

•  Standard Purchase ORDER (NB)
•  Stock TRANSPORT Order (TB)
•  Framework Order

The document types used in PO are:

The payment TERMS in PO REPRESENT the agreements of customers and VENDORS. You can define the payment terms in PO in the MASTER records of customers and vendors.

The payment terms in PO represent the agreements of customers and vendors. You can define the payment terms in PO in the master records of customers and vendors.

A purchase ORDER is a DOCUMENT ISSUED by a buyer to a seller which consists of the type and quantity of the goods or services the seller will PROVIDE to the buyer at a specified date.

A purchase order consists of:

•  Document Header — Relates to the entire purchase order
•  Number of Items — Relates to the number of items to be provided by the seller to the buyer.

A purchase order is a document issued by a buyer to a seller which consists of the type and quantity of the goods or services the seller will provide to the buyer at a specified date.

A purchase order consists of:

A PURCHASE requisition cannot be generated EITHER by using the REFERENCE of a purchase order or by using a SCHEDULING AGREEMENT.

A purchase requisition cannot be generated either by using the reference of a purchase order or by using a scheduling agreement.