Assignment Learning Objectives:
Primary Learning Objectives:
- Experience the steps in a typical purchasing transaction
- See how an ERP system handles a typical purchasing transaction
The objective of this assignment is for you to become familiar with the steps and the documents involved in a typical purchasing transaction and also investigate how the SAP system operates for this type of transaction. We will be using the financial accounting (FI) and the materials management (MM) modules of SAP. We start by creating the master data in the system. We create master data for a new material and a new vendor and then link these together using an information record. After that we run through a transaction in which we purchase the material we just created from the vendor we also just created. As the various steps of the purchase are recorded in SAP, we will ask you to answer some questions about what is occurring.
Keep in mind that this business process is normally done by more than one person in order to properly segregate duties and maintain authorization controls. However, in this exercise you will do all of the steps from your individual SAP logon.
You will perform the following tasks:
Create a material master
Create a vendor master
Create an information record to link the vendor and material
Create a purchase order for the material
Receive the material
Receive the invoice from the vendor
Make payment to the vendor
For all of the following work you will use your own company code. This company code is based on the SAP number assigned to you (see Blackboard grades). Whenever you see the value XX in the assignment you will substitute your assigned SAP number. Be sure to use only your assigned SAP number.
Step 1: Create a Material Master record for a Trading Goods
The material master record contains all the data required to define and manage a material. In SAP this is formally part of the Materials Management (MM) module. However, some important accounting information is also contained within this record. For example, product cost and pricing information and also tax information are contained within the material master record.
The master record consists of individual views and the individual views are presented in the form of tabbed pages. These views are organized on a functional or departmental basis. Each department has its own view that permits easy access and maintenance. In other words, data is integrated from engineering, manufacturing, sales and distribution, purchasing, accounting and other departments. This master data is used as a source of data for purchase order processing throughout the procurement cycle. For simplicity, we are ordering a trading good that we will subsequently sell. Trading goods are items that we purchase for resale. There are other types of goods such as raw materials that are used to manufacture finished products. The product that we are going to purchase is an aerodynamic bicycle helmet.
Just a reminder: When you see an “XX” enter your assigned SAP number.
Logistics à Materials Management à Material Master à Material à Create (Special)àTrading Goods (MMH1)
Create FinishedProduct(Initial Screen)
| Field | Input |
| Material Number | AeroHelmXX (XX = assigned number) |
| Industry Sector | Retail |
Click on the Select Views button on the application tool bar
Select the following views:
- Basic Data 1
- Purchasing
- General Plant Data/Storage 1
· Accounting 1
Click on the Continue Icon
Organization Level pop-up window
| Field | Input |
| Plant | DLXX |
| Storage Location | TGXX |
Click on the Enter Icon
Basic Data 1:
| Field | Input |
| Material description | Aerodynamic Helmet XX |
| Base Unit of Measure | EA |
| Material Group | SFTY |
| Gross Weight | 1 |
| Weight Unit | LB |
| Net Weight | 1 |
Looking at both the Dimensions/EANs and the Packaging Material Data tabs answer the following question.
1.1The Basic Unit of Measure is EA (which stands for Each or individual units). Look at the other units of measure and give three different examples of what types of products may use these types of unit of measure. (Hint: Look at the possible values and the definitions of the fields. There are lots of them, but you only need to select three of them and give an example.)
_____________________________________________________________________________
Click on the Enter Icon
Purchasing:
| Field | Input |
| Purchasing Group | NXX |
The purchasing group represents the people in the purchasing department of the company assigned to purchase specific types of products. In a real company there are specialists that are very knowledgeable about a group of products and the vendors who sell those products.
1.2 GBI is a bicycle manufacturer who supplies all of the different types of products involved in cycling including products they purchase from other manufacturers. Explain what type of specialization buyers may have at GBI.
Click on the Enter Icon
Plant Data/Storage 1
- No information is needed here. However, look at the data on this tab.
Looking at the various items under the Shelf life data tab answer the following question.
1.3While this tab does not apply to our aerodynamic helmet explain how it would be used for other products. Again, give an example of products for which this data would be very important.
_____________________________________________________________________________
Click on the Enter Icon
Accounting 1:
| Field | Input |
| Valuation class | 3100 |
| Price Control | S |
| Moving Price | 80 |
| Standard Price | 80 |
The SAP terminology is a little confusing in this part of the process. What we would normally term cost, they term price. That is, by their terminology price (not cost) is what we paid for the good.
The price control of S means that the company is using standard costing with the standard cost you entered of $80. The moving price is the moving average price that is calculated by averaging the costing of the good (what they actually paid for the good) over a specific period of time. The standard cost is a constant cost used by the company and is used in many ways to measure the performance of the company with respect to this good. You will learn more about this in your managerial accounting class.
1.4Why is it very important for the company to know how much the good costs?
_____________________________________________________________________________
- Click on the Enter Icon
- Click on “Yes” when asked to Save
Write down the message on the status bar. ___________________________________
Step 2: Create a Vendor Master record (we will buy the finished product from this vendor)
Logistics à Materials Management à Purchasing à Master Data à Vendor à Central à Create (XK01)
On the Create Vendor: Initial Screen
| Field | Input |
| Vendor | A999XX (XX = assigned number) |
| Company code | USXX |
| Purchasing organization | USXX |
| Account group | LIEF |
- Click on the Enter Icon
On the Create Vendor: Address
| Field | Input |
| Title | Company |
| Name | Brain_Buckets_XX |
| Search term | XX (assigned number) |
| Street address | Glenn 304 |
| Postal code | 95929 |
| City | Chico |
| Country | US |
| Region | CA |
| Language | English |
2.1 Near the very bottom of the screen there is a field for Standard Comm. Mtd. Why could this be a very important piece of information to have?
___________________________________________________________________
- Click the Next Screen icon or Enter icon to go to next view
On the Create Vendor: Control
- No Information needs to be entered
- Click on the Next Screen icon or on enter icon
On the Create Vendor: Payment Transactions
- No Information needs to be entered
- Click on the Next Screen icon or on enter icon
On the Create Vendor: Contact Person
- No Information needs to be entered
- Click on the Next Screen icon or on enter icon
On the Create Vendor: Accounting Information Accounting
| Field | Input |
| Rec. Account | 300000 |
| Sort Key | 001 (posting date) |
| Cash mgmnt group | A1 (domestic pmt.) |
The reconcilation account (Recon. Account) is a very important account, since this is where we track how much we owe each specific vendor. At the end of this assignment you will be asked to check this vendor’s account to be sure that we have paid our bill in full.
- Click the Next Screen icon or enter icon to go to next view
On the Create Vendor: Payment Transactions Accounting
| Field | Input |
| Payment terms | 0001 |
2.2 What are the payment terms for this vendor?What type of payment discount do we get?
________________________________________________________________________
- Click on the page arrow icon
On the Create Vendor: Correspondence Accounting
- No information needs to be entered
2.3 Explain what dunning is and how it would be used. (Hint: You may have to look this up on the Internet.)________________________________________________________________________
- Click on the Next Screen icon
On the Create Vendor: Purchasing Data
| Field | Input |
| Order currency | USD |
| Payment terms | 0001 |
- Click on Next Screen icon
On the Create Vendor: Partner Function
- No data needs to be entered
- Click on Save icon to save the data.
Write down the message on the status bar. ____________________________________
The creation of a material and a vendor would allow us to order those goods from that vendor. However, as an additional control, we can define the relationship between the good and the vendor. In SAP this is done by creating an information record. That is the next step in the process.
Step 3: Create an Information record for Vendor/Material
Logistics à Materials Management à Purchasing à Master Data à Info Record à Create (ME11)
| Field | Input |
| Vendor | A999XX |
| Material | AeroHelmXX |
| Purchasing Org. | USXX |
| Plant | DLXX |
Click on Enter Icon to continue.
On Create Info Record: General Data screen, click on Purch. Org. data 1 button
On Create Info Record: Purch. Org. data 1 view, enter
| Field | Input |
| Pl.Deliv.Time | 2 (days) |
| Purch. group | NXX |
| Standard qty. | 10 |
| Minimum qty | 5 |
| Net price | 80 |
The above data defines the relationship between the material and the vendor.
3.1 Explain how the above data can be a strong control in the purchasing process.
__________________________________________________________________________
__________________________________________________________________________
- Click on Save icon to save the data.
Write down the Information record number shown on the status bar. ______________________
Step 4: Create a Purchase Order to buy the Finished Product
LogisticsàMaterials ManagementàPurchasing à Purchase OrderàCreateà Vendor/Supplying Plant Known (ME21N)
On the Create Purchase Order screen:
| Field | Input |
| (Field) (will be defaulted) | Standard purchase order |
| Vendor | A999XX |
| Document date | Today’ date |
Note: If the screen looks like the following, click on Header and Item Overview icons to expand those areas.
When you expand your view, an error message may tell you to enter the organizational data and redirect you to the Org. Data page. If you are not redirected to the org. data page, click on the Org. Datatab page, enter the following data:
| Field | Input |
| Purchasing org. | USXX |
| Purchasing group | NXX |
| Company code | USXX |
Click on Enter
Enter the following data under item overview area:
| Field | Data |
| Material | AeroHelmXX |
| P.O. Quantity | 10 |
| Delivery date | Today’s date |
| Plant | DLXX |
| Storage location | TGXX |
You need to scroll to the right to find the Plant and Storage location fields.
You may get warnings about the dates. Just Click on Enterto get by them.
Click on Enter .
4.1 When you click on enter, the description of the material, unit of measure and price will be filled in. Where did this data come from?
______________________________________________________________________________
Click on Save .
This is very important!
Write down the purchase order number shown on the bottom of the screen. ___________________
Step 5: Receive the Product from the Vendor
Logistics à Materials Management à Inventory Management à Goods Movement à Goods Receipt à For Purchase Order àPO Number Known. (MIGO)
Goods Receipt Purchase Order <User> screen appears.
| Field | Input |
| Purchase Order | Purchase order # from step 4 above |
| Delivery Note | XX |
Click on Enter and all the data will be copied from the purchase order
Select Item OK box to confirm the receipt. (this is at the bottom of the screen)
Click on Enter
Click on Save .
Write down the material document number ___________________.
Step 6: Receive the Invoice from the Vendor
Logistics à Materials Management à Purchasing à Purchase Order à Follow-on Functions à Logistics Invoice Verification(MIRO)
| Field | Input |
| Invoice date | Today’s date |
| Posting date | Today’s date |
| Under Basic Data tab | |
| Purchase Order/Scheduling Agreement | Purchase order # from step 4 |
Click on Enter , the information will be copied from the purchase order to the invoice
- Enter Amount (in Basic data tab) same as the Amount shown in the line item.
Click on Enter , the Balance should be 0.00 and the light should be green.
Click on Post (Save).
Write down the invoice number ___________________.
Step 7: Make the Payment by Cash to the Vendor
Accountingà Financial Accounting à Accounts Payable à Document Entry à OutgoingPayment à Post(F-53)
| Field | Input |
| Document Date | Today’s date |
| Posting Date | Today’s date |
| Company Code | USXX |
| Currency/Rate | USD |
| Under Bank Data area | |
| Account | 100000 (Bank Account) |
| Amount | Amount of payment |
| Under open item selection area | |
| Account (the vendor number) | A999XX |
| Automatic search | Select |
Click on Process Open Items Button
The Not Assigned amount should be 0.00 .
Post (Save) the transaction.
Write down the document number.____________________________
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Jermaine Byrant
Nicole Johnson
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