How To Perform Invoice Verification - Purchase

Invoice verification is done via MIRO transaction.

Step 1)

1. Enter transaction code MIRO.
2. Choose invoice as a transaction type.
3. Enter the invoice date.
4. Enter the purchase order number.
5. Hit ENTER.

Step 2)

On Payment tab choose R – invoice verification.

You can always check if the document has any problems.

1. Click Messages button.
2. Review the messages and fix the problems if there are any.

As it is shown on the below screen, I have a warning message that my price is too low, below tolerance limit. It is only a warning message, and it will not stop me from further processing.This message appeared as informational because I manually changed the item 1 price from 28.000 to 22.000! Err, just to show you the message.

How To Post Goods Receipt - Purchase

Step 1) You can post the goods receipt for a purchase order using transaction code MIGO.

Let’s say we want to do a goods receipt for our purchase order 4500018386.

1. Choose A01 – Goods Receipt.
2. Choose R01 – Purchase Order.
3. Enter your purchase order number.
4. Press ENTER.

 

Step 2)

How To Create Purchase Order With Reference - Purchase

Purchase order with reference

Purchase orders can be created with reference to a purchase requisition, RFQ, quotation, another purchase order, contract, sales order etc. To reference a PO to a previous document you can use the appropriate function.

You can create a PO referencing a previous document in 2 ways

1. Using ME58
2. Using ME21N

Referencing through ME58

In our case if we want to create a PO for a purchase requisition, we can use the transaction code ME58.

I will demonstrate the process starting from ME58 as it calls the ME21N and you can see that actually we create a PO in ME21N anyway.

Step 1)

1. Enter t-code ME58.
2. Choose Vendor and purchasing organization and
3. Select document types.
4. Execute.

How To Create A Purchase Order - Purchase

Purchase orders are used for a number of processes in procurement. They can be used for internal procurement (from one plant to another), external procurement of goods (direct consumption or stock) and services. It can also be used for subcontracting, third-party and consignment processes.

Purchase order processing is shown in the following diagram.

Purchase orders can be created with reference to a purchase requisition, RFQ, quotation, another purchase order, contract, sales order.

How to create a Purchase Order

Purchase orders are created by using standard transaction ME21N (or ME21 – the old instance of the transaction).

Step 1)

1. Enter transaction code ME21N.
2. Enter vendor.
3. Enter material number that needs to be procured.
4. Enter the quantity and unit of measure (optional – system uses UoM from purchase info record).
5. Press ENTER to confirm the data entered.

How To Select Or Reject A Quotation - Purchase

Step 1)

1. Select the quotation that’s favourable (you want to process it further as it’s having the best conditions).
2. Choose the Edit Quotation button on the toolbar.

Step 2) Now you are in the ME47 transaction. Here you can choose the item and go to the item details screen.

1. Select the item.
2. Click on the item details icon.

Step 3)

How To Create A Source List - Purchase

You can create a sourcelist in ME05 transaction. A source list is a list of possible sources for a material. If a source list requirement exists for the material, you must create a source list to proceed with the ordering.

1. Execute t-code ME05.
2. Enter material, or material list/range.
3. Enter plant.
4. Untick the test run check box to perform the transaction instead of using the test mode.
5. Execute the transaction.

On the results screen select the appropriate line item and click on the save button.

You have created a source list.

How To Compare Price For Different Quotations - Purchase

After your quotations are entered, you can compare them to select the best available offer at this moment. We can compare the quotations in transaction code ME49.

We can select which quotations will be compared by using the collective number we addressed before to be an important field that is maintained on RFQ (or directly on the quotation).

If we forget to enter the collective number, we will have to supply all the quotation numbers in the selection field “Quotation”.

Step 1) In transaction ME49, Enter

1. Purchasing organization (e.g. 0001).
2. Collective RFQ (we have used 190123).
3. Execute the transaction.

The comparison list looks like this:

From the list we can see that Vendor1 have proposed a better price.

What we need to do is check the effective price (with discounts, freight cost and other conditions).We will go back to the selection screen and we will tick three check boxes.

Step 2)

1. Check all the boxes in the Price Calculations section.
2. Execute the transaction.

Our results have changed significantly.

Now Vendor2 has the better price, and price of Vendor1 has gone up 256 EUR because of freight cost.

Now we can conclude that our Vendor2 has the best price, and we can proceed with the process.

If you select Mean value quotation and Minimum value quotation on the previous screen, you will get the result as they are shown below on the screen.

1. Average price on all the quotations.
2. Minimum price for all the quotations.

After comparing the prices/conditions, you can decide which offers to accept and which ones to reject.

How To Create Quotations - Purchase

Using transaction code ME47, we can create a quotation based on a request for quotation.

Step 1)

1. Transaction code for quotation maintenance – ME47.
2. RFQ: request for quotation that we are using as a reference document.
3. Press ENTER.

Step 2)

1. RFQ quantity
2. Delivery date
3. Net price per unit of measure
4. Storage Location

Overview Of Quotations. How To Create RFQ - Purchase

Quotations

Quotations are requests for vendors to provide us information about their best prices, terms and conditions, schedule of deliveries and other information in order to select the best source for our procurement needs.

Below you can see the process flow for quotations in purchasing in SAP MM module.

Quotation process is started with creation of a request for quotation, and afterwards maintenance of the quotations to input all the information received from possible vendors. Then we want to compare the offers and select the best suitable one(s) rejecting the others.In SAP, there are several transaction used in the process.

How to create Request for quotation

Steps for PP-PI - QM Integration

Following are the multiple steps for the integration (you can add steps based on your company needs).

steps for PP-PI - QM Integration

1. Material Master is created

2. QM view is created.

3. All the relevant inspection types are assigned.

4. BOM,Resource are created.

5. Now Assign inspection types 03 & 04.

6. Do In Process (inspection type = 03) & FG inspection (inspection type:04) to be done

7. Now For - 03 inspection you need to assign inspection characteristics to the Master Recipe.

   For the 04 inspection you need to create an inspection plan and assign the

   control for lot creation in the material master i.e. to X

   If you use the Y setting then the inspection lot is created with the release

   of the order.

8. Final step

   In the PPPI scenario the the control recipe will generate after u relelase the process order.

   u can find point the red round sign on the porcess order main screen.

   Click to activate that sign ==> the control recipe is generated.

   After that if you mentain some parameter in the PI sheet that will capture by saving the porcess order.

   Then Initiate t-code: CO53 & find the PI sheet for your process order.

   Now you need to send this PI sheet to specific destination.

   Then Initiate t-code: CO60 ==> u can see the PI sheet for the Process ordere with the maintained parameter.

   The 04 inspection lot is stock relevant meaning that the material from the GR from production goes into quality stock.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Note: In material master under Quality view,

         QM config would assign inspection type (one for pre despatch and another one for post despatch).

         Material Master Table: MARA. Check also Material Master Views for increased visibility.

Config Activity (that is carried out here)

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

In material master

    => go to quality management view

          => select inspection set up

                => select inspection type

                      => In inspection give 06 and 10 &

                           => click on 'Active'.

                               => save this info (click on the save button).

Implying => when you do PGR (Post Goods Receipt) for return stock/material,

                  it will create a inspection lot. 

                  QM config will update the inspection lot base settings and when we do PGR it will go to quality stock,

                         with specified category.

MM-SD - Under Inventory Management

Return Delivery & Credit Memo (issue)

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Integration Points Module

- Increases Inventory - MM/ QM (For Inspection)

Delivery & Goods Issue

~~~~~~~~~~~~~~~~~~~

- Availability Check - MM

- Credit Check - FI  (coverage from FICO area)

- Reduces stock - MM/ QM (Inspection before moving stock to unrestricted Stock / before despatching the material).

Introduction To Purchasing And Purchase Requisition - Purchase

Purchasing is a component of SAP MM module and its process can be roughly depicted in below diagram.

MRP (material resource planning) creates procurement proposal and later gets converted into Purchase Requisition. Next step is assigning source to Purchase Requisition, and release of Purchase Requisition. The PR gets converted to Purchase Order and upon goods receipt an invoice receipt can be done to complete the purchasing process. Additionally payment is processed (in FI module).

Procurement doesn’t have to start by the MRP, it can be initiated by consumption based planning or by direct creation of PR or PO.

MRP is a system function to determine the material requirements on both the material and BoM level. A BoM (Bill of Materials) is a list of components and subcomponents a single material is consisting of.

One of the mere basic documents in Purchasing in SAP is a purchase requisition.

Purchase requisition

SAP MM Sample Questions for Certification (Set.3) Answers

1. What does the system do when you perform the function Reducing Invoices?

1. Reduce an invoice
2. Post invoice for the actual quantities and values
3. Post a credit memo for the amount reduced
4. Post a debit memo for the amount reduced
5. Facilitate generation of a letter of complaint to the vendor.

2. A vendor is issued a purchase order for 200 pieces at 10 UNI/pc and 10% tax. There was a goods receipt of 140 Pieces. The vendor sends an invoice for 200 pieces at 12 UNI/pc. The Purchase manager decides on a partial reduction with quantity variance. What will be accounting entries for the invoice and credit memo?

1. Stock account in the invoice document is 300+
2. Stock account does not get affected.
3. Input tax in credit memo is 60-
4. Vendor account in the credit memo is 660+
5. Vendor account in the credit memo is 440+

3. What can be the possible entries the system can make during invoice verification if a valuated good receipt is defined for a purchase order with account assignment and there is a price variance?

1. Debit consumption
2. Credit consumption
3. Debit GR/IR
4. Credit GR/IR
5. Credit Vendor

4. Which costs are entered at item level in the purchase order?

1. Planned delivery costs
2. Unplanned delivery costs

5. In Total Based acceptance what validations can the system do before deciding that the balance is too large for the invoice to be posted?

1. First checks whether the variance falls within the defined invoice reduction limit.
2. First checks whether the variance falls within the small difference.
3. If the difference is greater than the small difference it checks whether the variance falls within the defined invoice reduction limit.
4. If the positive difference is greater than the small difference it checks whether the variance falls within the defined invoice reduction limit.
5. If the invoice reduction limits are set to do not check, the system compares the variance with the acceptance limit.

6. When does the system propose current account assignment?

1. Goods receipt
2. Invoice Verification

7. A purchase order has been issued on a vendor for two materials. 150 units of material A has been ordered at 4 UNI/pc. 20 units of material B has been ordered at 45 UNI/pc. The vendor has supplied all the materials. The invoice for the supply has been received and posted. He now sends an invoice that includes 875 UNI as freight charges and 125 UNI as custom duty that was not planned. The system has been configured to distribute delivery costs amongst items. How will the cost be apportioned when the invoice is posted?

1. Stock account for Material A 380 +, Stock account for Material B 570 +
2. Stock account for Material A 500 +, Stock account for Material B 450 +
3. Freight clearing 875+
4. Custom clearing 125 +

Sample SAP MM Questions for Certification (Set.3)

1. What does the system do when you perform the function Reducing Invoices?

1. Reduce an invoice
2. Post invoice for the actual quantities and values
3. Post a credit memo for the amount reduced
4. Post a debit memo for the amount reduced
5. Facilitate generation of a letter of complaint to the vendor.

2. A vendor is issued a purchase order for 200 pieces at 10 UNI/pc and 10% tax. There was a goods receipt of 140 Pieces. The vendor sends an invoice for 200 pieces at 12 UNI/pc. The Purchase manager decides on a partial reduction with quantity variance. What will be accounting entries for the invoice and credit memo?

1. Stock account in the invoice document is 300+
2. Stock account does not get affected.
3. Input tax in credit memo is 60-
4. Vendor account in the credit memo is 660+
5. Vendor account in the credit memo is 440+

3. What can be the possible entries the system can make during invoice verification if a valuated good receipt is defined for a purchase order with account assignment and there is a price variance?

1. Debit consumption
2. Credit consumption
3. Debit GR/IR
4. Credit GR/IR
5. Credit Vendor

4. Which costs are entered at item level in the purchase order?

1. Planned delivery costs
2. Unplanned delivery costs

5. In Total Based acceptance what validations can the system do before deciding that the balance is too large for the invoice to be posted?

1. First checks whether the variance falls within the defined invoice reduction limit.
2. First checks whether the variance falls within the small difference.
3. If the difference is greater than the small difference it checks whether the variance falls within the defined invoice reduction limit.
4. If the positive difference is greater than the small difference it checks whether the variance falls within the defined invoice reduction limit.
5. If the invoice reduction limits are set to do not check, the system compares the variance with the acceptance limit.

6. When does the system propose current account assignment?

1. Goods receipt
2. Invoice Verification

7. A purchase order has been issued on a vendor for two materials. 150 units of material A has been ordered at 4 UNI/pc. 20 units of material B has been ordered at 45 UNI/pc. The vendor has supplied all the materials. The invoice for the supply has been received and posted. He now sends an invoice that includes 875 UNI as freight charges and 125 UNI as custom duty that was not planned. The system has been configured to distribute delivery costs amongst items. How will the cost be apportioned when the invoice is posted?

1. Stock account for Material A 380 +, Stock account for Material B 570 +
2. Stock account for Material A 500 +, Stock account for Material B 450 +
3. Freight clearing 875+
4. Custom clearing 125 +

Sample SAP MM Questions for Certification (Set.2)

1. In which kind of posting method in IV is the cash discount amount not credited to the stock or cost account?

1. Gross Posting
2. Net posting

2. What controls the posting of invoice as gross or net?

1. Item category
2. Document type

3. How can postings be done in invoice verification for a purchase order in foreign currency?

1. Fixed exchange rate at GR and IV.
2. Current exchange rate at GR and IV
3. Current exchange rate cannot be changed at IV.
4. Exchange rate differences can occur
5. Exchange rate difference postings are Customization based.

4. How is the quantity that has already been invoiced valuated at goods receipt if the invoice is posted before goods receipt and the subsequent GR quantity is greater than the invoice quantity?

1. At purchase order price
2. At invoice price

5. During the check of invoices with which of the following variances does the system perform Date variance?

1. Quantity Variance
2. Price variance
3. Purchase order price quantity variance

6. There is a purchase order for 100 pieces at Rs. 0.80. The 100 pieces are received. An invoice is received for 100 pieces at Rs 0.75 per piece. However at the time of receipt of invoice the stock of the material is only 30.What are the effects of the above at invoice verification?

1. Stock account is 5-
2. Stock account is 1.5-
3. Stock account is 3.5-
4. Price difference account is 3.5-
5. Price difference account is 1.5-

7. Under what situation does the system compares the ratio of PO quantity(in PO price units) / PO quantity (in PO units), invoice quantity (in PO price units / invoice quantity (in PO units)?

1. Goods receipt before invoice receipt
2. Invoice receipt before goods receipt.

8. The initial Stock of a material is 200 pieces. There is a purchase order for 100 pieces at Rs. 0.75. The 100 pieces are received. An invoice is received for 100 pieces at Rs 0.80 per piece. What are the effects of the above at invoice verification?

1. If the material is valuated at a standard price of Rs 1, the stock account will be 5+.
2. If the material is valuated at a moving average price of Rs 1, the stock account will be 5+.
3. If the material is valuated at a moving average price of Rs 1, the material master record reflects the moving average price at Rs 0.92.
4. If the material is valuated at a standard price of Rs 1, the price difference expense account will be 5+.
5. If the material is valuated at a standard price of Rs 1, the stock price difference income account will be 5+.