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Workshop5and6S4HANAProcurement.docx

SAP ERP: S/4HANA

Procurement

MOTIVATION

This material is an introduction to SAP S/4HANA financial functionality. It is aimed at students at universities and other educational institutions with limited experience with procurement

It can be used in the classroom or for self-study.

On completion of the course, students will be able to understand the procurement process

The material also serves as a reference for occasional users of SAP systems.

LEARNING METHOD

The learning method used is “guided learning.” The benefit of this method is that knowledge is imparted quickly. Students also acquire practical skills and competencies. As with an exercise, this method explains a process or procedure in detail using the GBI case study

Exercises at the end enable students to put their knowledge into practice.

Product

SAP S/4HANA

Level

Introductory

Focus

ERP Systems- Materials Management

Author

Dr. Paul Hawking Dr. Susan Foster

Reviewed by

Urooj R. Khan

Version 1.2019

Table of Contents

Introduction 3

Scenario 3

Process Overview 3

Task 1: Display Stock Requirements List 4

Task 2: Create a Purchase Order 5

Task 3: Display Stock Requirements List 8

Task 4: Create Goods Receipt for Purchase Order 9

Task 5: Verify Physical Receipt of Goods 11

Task 6: Displaying Account Balances 12

Task 7: Create Invoice Receipt from Vendor 14

Task 8: Reviewing Material Documents 17

Task 9: Post Payments to Suppliers 19

Task 10: Reviewing The General Ledger. 23

Introduction

Scenario

GBI re-sells a range of bicycles. There is a request for the Deluxe Touring Bike (red). After reviewing the stock you realise that stock is required - you are start the procurement process. The Deluxe Touring Bike (red) is purchased from the vendor; Olympic Protective Gear. This vendor is already created in the system. You create a purchase order for the Deluxe Touring Bike (red) which is forwarded to the vendor. The goods arrive and you will create a goods receipt and verify the physical receipt in stock. An invoice will arrive which will need to be entered into the system. Payments will be posted to the vendor and you will review the impact the purchase has on the General Ledger.

Below is a summary of the purchasing process involved and the more detailed tasks involved. It involves two functional areas – Material Management and Financials.

Process Overview

C:\Users\Stephen\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Word\fig_01_04.jpg

Task 1: Display Stock Requirements List

You now need to display and review the stock/requirements list for a Deluxe Touring Bike (red) on hand balance and the demand that exists against this product. The report should show that there is no stock and therefore nothing is available for use at this time. The stock/requirements list is a dynamic list and, therefore, changes whenever a transaction occurs using the given material. To display the stock/requirements:

1.

Click in the Materials Management group.

The following screen appears:

This screen enables you to enter a number of variables to limit the materials displayed.

2. Type DXTR3### (where ### is your logon) for the Deluxe Touring Bike (red( in the Material field.

3. Type MI00 for Plant Dallas in the Plant field.

4.

Click to display the stock levels

The following screen appears indicating that there is no stock available:

After reviewing the stock levels you realise that there is a need to order 5 bicycles. Normally a Purchase Requisition would be created but this is an optional step in the procurement process. The Purchase Requisition would be approved and the details would be copied to the Purchase Order. You are going to create a Purchase Order directly.

5.

Click to return to the launchpad.

Task 2: Create a Purchase Order

Currently there is a Create Purchase Order Advanced tile on the launchpad. This is not the app we require. If the Create Purchase Order tile (as below) is not on your launch pad then you need to add it to the Materials Management group.

6. Click as per the tile above.

The Create Purchase Order screen appears similar to:

An existing purchasing document does not exist for the Deluxe Touring Bike (red). You will need to create a new Purchase Order.

7. Click to enter the Purchase Order data.

8. Type 101### (where ### is your logon).

Notice that the system searches for the supplier and automatically populates related fields with default values.

9. Type N00 the code for North America in the Purchasing Group field.

You have entered the supplier (vendor) details in the Purchase Order. You now need to enter details about the items to be ordered.

10. Type DXTR3### (where ### is your logon) for the Deluxe Touring Bike (red) in the Material field.

11. Type MI00 in the Plant field to represent the DC Miami Plant.

12. Type 5 in the Quantity field.

13. Type 1400 in the Net Price field.

You will notice that the other fields have been populated automatically. If not click on a non-field/icon area of the screen. Your screen should appear similar to below:

· Record the Total PO Value

You can now determine what are the next steps in your Procurement process and where the Purchase Order details will be used.

14. Click to display the options.

Ensure the following activities have been selected:

15. Click to save your Purchase Order.

A screen appears to confirm the submission and provide a unique Purchase Order number.

· Record your Purchase Order number:

16. Click to close the dialog screen and return to the Purchase Order overview screen.

Your Purchase Order appears in the Purchasing Documents Items. If you needed to create a new Purchase Order for the same Material from the same Supplier then you can select your Purchase Order and click create. All details from the selected Purchase Order would be copied. You could then make any changes as required.

17.

Click to return to the launchpad.

You now need to see if the stock levels have been impacted by the creation of the Purchase Order.

Task 3: Display Stock Requirements List

You need to review the impact the creation of a Purchase Order has on stock levels for a material.

18.

Click in the Materials Management group.

19. Type DXTR3### (where ### is your logon) for the Deluxe Touring Bike (red) in the Material field.

20. Type MI00 for Plant Dallas in the Plant field.

21.

Click to display the stock levels

The following screen appears indicating that there is stock on order:

22.

Click to return to the launchpad.

Task 4: Create Goods Receipt for Purchase Order

After a couple of weeks a delivery from Olympic Protective Gear (101###) occurs for the bicycles ordered. These materials need to be received into inventory. A goods receipt document will be created referencing your purchase order thereby ensuring that GBI receives the products ordered within the timeframes. Goods on hand will be increased and an accounting document will be generated recognizing the value associated with these goods. Remember the process steps we indicated in the Purchase Order;

23.

Click tile to start the process.

The following screen appears:

24. Type the Purchase Order Number in the Purchase Order field.

If you have misplaced the PO Number then you can use the other details of the Purchase Order to search for your Purchase Order.

25.

Click in the Storage Location field to display the available options.

26. Select Finished Goods.

You will notice that the Stock Type field has defaulted to Unrestricted-Use. If there was a problem with the delivered bicycles then you could change this field to indicate that the materials need to be sent off to Quality Inspection or they are Blocked for use. As the Bicycles meet GBI’s requirements the field will remain as Unrestricted-Use.

27.

Click to complete the Goods Receipt.

A dialog screen appears to confirm the Goods Receipt has been created and provides a Material Document Number for the Goods Receipt.

· Record your Material Document number:

As mentioned previously; when a Goods Receipt occurs two documents are automatically generated. The Material Document updates the inventory levels for the materials received while the Accounting Document increases the value of the inventory as new goods have arrived. This is a good example of the type of integration that occurs in an ERP system. You will review the impact of these two documents.

28.

Click to return to the launchpad.

Task 5: Verify Physical Receipt of Goods

You need to review the impact the creation of a Goods Receipt has on stock levels for a material.

29.

Click in the Materials Management group.

30. Type DXTR3### (where ### is your logon) for the Deluxe Touring Bike (red) in the Material field.

31. Type MI00 for Plant Dallas in the Plant field.

32.

Click to display the stock levels

The following screen appears indicating that there is stock on order:

· What is the main difference between the Stock Overview after the creation of the Purchase Order and the Goods Receipt:

2.

Click to return to the launchpad.

Task 6: Displaying Account Balances

As mentioned previously a Goods Receipt also produces an Accounting Document to update the General ledger in regards to value of inventory. To check this:

33.

Click on the Group Selection Bar to display this Group

34.

Click tile to start this application.

The following screen appears:

You will notice that there are a number of fields in the Selection area which require data.

35. Type US00 in the Company Code field.

As you type the relevant data for US GBI Bike is displayed.

36. Click US00 to select it and transfer the details to the Company Code field.

You now need to identify the Account related to Inventory Finished Goods.

37.

Click in the G/L Account field to display the search options.

38.

Click to display all the accounts.

39.

Click associated with 200100 Inventory Finished Goods to select this account.

40.

Click to transfer the selection.

Ensure that the Ledger Fiscal Year matches the current year.

41.

Click to display the balances.

Your screen will appear similar to below:

If your numbers are different, can you explain why?

42.

Click to return to the launchpad.

Task 7: Create Invoice Receipt from Vendor

You have completed a Goods Receipt for the Bicycles on their arrival. The delivery also included an invoice from the supplier. The invoice details need to be entered into the system, checked and then paid at a later date.

43. Click to start the payment process in Material Management Group .

A dialog screen appears requesting the Company Code.

44. Type US00 for the GBI Americas.

45. Click to proceed.

The following screen appears:

46. Type todays’ date in the Invoice date: field.

47. Type 7000 in the Amount field.

48. Press <TAB> to move to the next field.

49. Type USD to indicate the currency.

At the moment you have entered the amount to be paid but there is nowhere to indicate who this money should be paid to. However, there is a field for Purchase Order. If you remember the Purchase Order you created, it included the Supplier’s details.

50. Type <your Purchase Order number> (previously recorded) in the Purchase Order/Scheduling Agreement field.

If you can’t find your Purchase Order number you can click in the field to display and then click the icon to search for your Supplier.

51. Press <ENTER> to populate the fields.

Notice the details from your Purchase Order now appear on screen. You now need to enter some tax details before the invoice can be processed.

52. Click in the field to display the options.

53. Click to select it. You may need to scroll down.

54. Scroll across to the jurisdiction filed .

55. Type FL0000000 in this field.

You now need to check the entered invoice. This can be done by using the function.

56. Click to check the invoice.

Insert screen

57.

Click to save the entered invoice.

· Record your invoice number:

Hint: look Suppliers list Tile in the MM group on Launch pad!

58.

Click to return to the launchpad

Task 8: Reviewing Material Documents

Throughout the procurement process you have created a number documents. In the procurement process you may be involved in many purchases of different materials from different suppliers resulting in the creation of numerous purchasing related documents. It is possible to display an overview of the documents you have created. To view your purchasing documents:

59. Click Material Documents Overview Tile

The following screen appears:

60. Type DXTR3### (where ### is your logon) in the Material field.

61. Click to display the relevant documents.

62. Click the Material Document number to drill down to further details.

Details appear related to the purchase of the bicycles.

63. Scroll down the screen to display the Document Flow.

This screen identifies the stages of the procurement process so far as well as the material documents involved. You could drill down on any of these documents to see the actual document. If a supplier contacted GBI in regards to a payment you could view the Document Flow and understand the status of the process.

· Record your Document flow screenshot here:

64.

Click to return to the launchpad

Task 9: Post Payments to Suppliers

The invoice from Olympic Protective Gear for the Deluxe Touring Bicycles has been entered and checked in the ERP system. The goods have arrived and been receipted and it is now time to post a payment as per the invoice. This process is often called Accounts Payable. To make a payment:

65. Click in the Financial Accounting group.

66. Type 101### (where ### is your logon) in the Supplier field.

67. Type US00 in the Company field.

68. Click .

The balances for your Supplier appears:

69. Click the Balance amount (-7000) to view the items that make up this balance.

The following screen appears:

The icon indicates that journal entry is still open. This means it needs to be paid.

70. Click on the line of the open item to select this entry.

71. Click the Supplier id to display the context menu.

72. Click to display this screen.

73. Type today’s date for Posting Date, Journal Entry Date, and Value Date fields.

74. Type today’s month (MM) in the Period field.

75. Type 100000 in the G/L Account field.

76. Type BANK in the House Bank field.

77. Type 7000 in the Amount field representing the amount to be paid.

78. Press <TAB> to move to the next field

79. Type USD as the currency

80. Click to open this item for the supplier.

The following screen appears:

Notice the screen indicates in the top right that 7,000 is owing.

81. Click identify this open item is ready to be paid.

Notice the details are moved to the Items to Be Cleared pane. Also a 0.00 balance appears in top right of the screen. You can simulate the transaction to check all details are correct.

82. Click to simulate the transaction.

A screen similar to below appears:

The details are correct so the Journal Entry is ready to be saved (posted).

83. Click .

Record the Journal Entry number

Task 10: Reviewing The General Ledger.

As mentioned previously the General Ledger underpins business transactions. To view the impact of this payment on the General Ledger:

84.

Click on the Group Selection Bar to display this Group

85. Click tile to start this application.

The following screen appears:

86. Type US00 in the Company Code field.

87. Type GL00 in the Financial Statement Type field.

88.

Click to display the balances.

Your screen will appear similar to below:

89. Click associated with ASSETS to expand this category.

90. Expand Cash & cash Equivalents category.

You will notice a number of transactions. To further review the transactions for G/L Account 100000:

91. Click the Period Balance for G/L Account 100000 to display a context menu.

92. Click .

The Journal Entries associated with is account are displayed including the payment to Olympic Protective Gear. Maybe you need more details about this entry:

93. Click of the Journal Entry (-7000USD) you previously recorded.

A dialog screen appears which provides details about the Journal Entry.

94. Click the background screen for the Journal Entry Details to disappear.

The integrated nature of the ERP system results in different related functional area being updated in real time. You now completed the exercise associated with Procure to Pay (Procurement).

The process involved:

C:\Users\Stephen\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Word\fig_01_04.jpg

Quiz

What happens when a Goods Receipt occurs? What functional areas of the company are updated?

What is the essential information entered for a purchase order to be created?

Workshop 5 and 6 S4HANA Procurement 1