procure-to-pay / purchase process Flashcards
what does the purchase process begin and end with?
- begins with request for goods/services
- ends with payment of cash
what are the primary objectives of the purchasing process?
- purchase high-quality goods at the best price
- pay vendors at the optimal time
outline the steps within the purchase process
- request goods or services
- order goods or services
- receive and inspect goods or services
- store and/or maintain goods
- maintain vendor record
- pay for goods or services
- return goods
- forecast purchases and future cash flows
outline the expenditure/purchasing process business activities (SAP)
- planning supply
- initiating purchase
- processing purchase requests
- processing requests for quotation
- processing purchase orders
- processing inbound delivery notifications
- (a) processing inbound deliveries (b) processing inspections
- processing supplier invoices
- processing payables and payments
what does planning supply include?
- planning material
- checking and resolving exception
- planning capacity
who is planning supply performed by?
supply planner
explain the planning supply stage (1)
enables the company to carry out material and capacity planning and provides an updated overview of the demand product specification, and supply planning area combination
- multi-level planning considers selected product specification
- manually created planned orders require product specifications
- planning issues trigger system exceptions to alert you
- can manually create or update planning proposals
- load levelling checks supply plan feasibility and balances the load if capacity can’t be increased
who performs initiating purchasing (2)?
supply planner
explain the initiating purchasing stage (2)
enables you to create purchase requests based on purchase proposals, including product specification, and forward these purchase requests to the purchasing department
what does the processing purchase requests (3) include?
- assign a source of supply
- bundle and create a purchase order
- initiate RFQ processing
who is the processing purchase request performed by?
operational buyer
explain the processing purchase request (3) stage
- enables you to transfer purchase requests into purchase orders
- can assign missing sources of supply and then bundle multiple assigned purchase requests into purchase orders
what does processing requests for quotation (4) include?
- group sourcing
- create a request for quotation
- enter quotes
- compare quotes and create follow-up documents
who is the processing requests for quotation performed by?
the strategic buyer
explain the processing requests for quotation (4) stage
- enables purchasing department to bundle company’s purchasing requirements
- helps find appropriate sources of supply for the materials and services needed
- can invite new or existing suppliers to participate in requests for quotation and compare the quotes received easily and choose the best one in the system
- notify bidders of the outcome and create follow-up documents like purchase orders or contracts
what does processing purchase orders (5) include?
- create and maintain a purchase order
- send a purchase order
- approve a purchase order
- acknowledge a purchase order
- monitor a purchase order
who performs the processing of purchase orders (5)?
the operational buyer
explain the processing purchase orders (5) stage
enables you to work on automatically created purchase orders / to manually create a purchase order with or without reference to a contract or a list price
- purchase of order can contain stock material with/without product specification, services, or non stock material that can be ordered for different purposes
- create third party purchase orders for materials and services linked to sales, service orders, or projects
- send purchase orders to suppliers, including affiliated companies using SAP systems
- approval may be required based on purchase order value
- optionally, use purchase order acknowledgements
- the process allows for varying levels of automation
what is included in processing delivery notifications/supplier delivery notification (6) stage?
create a supplier inbound delivery notification
who performs the processing delivery notifications/supplier delivery notification (6) stage?
warehouse manager
explain the processing delivery notifications/supplier delivery notification (6) stage
- creates delivery notifications manually / via b2b communication from your supplier, which can also be an affiliated company using SAP ERP
- can process supplier deliveries with or without warehouse tasks
what is included in processing inbound deliveries - based on purchase orders without task control (7) stage?
post a goods receipt based on a purchase order
who performs the processing inbound deliveries - based on purchase orders without task control (7.a) stage?
warehouse manager
explain the processing inbound deliveries - based on purchase orders without task control (7) stage
- post received products to stock based on a purchase order
- directly post the goods receipt and system records the products as delivered and confirms the supplier delivery
- quality inspection can be created automatically
- incoming goods can be stored in a quality logistics area
what is included in processing inspections (7.b) stage?
- inspect samples
- record inspection results
- decide about quality
who performs the processing inspections (7.b) stage?
- inspector
- quality engineer
- quality manager
explain the processing inspections (7.b) stage?
allows you to process, monitor, and analyse inspections of products:
- inspections at goods receipt = receiving inspections for supplier deliveries, first articles, customer returns, and stock transfers
- inspections in production = in-process control and final inspections for production
- inspections in shipping = final inspections for customer shipments
- inspect samples taken for inspection, record results, make a decision about the quality of inspected goods, and if necessary, trigger corrective or preventative actions
difference between planned and unplanned inspections
planned = triggered automatically based on suitable logistics or production model
unplanned = triggered manually by user
what does processing supplier invoices (8) include?
- create a supplier invoice
- resolve a supplier invoice exception
- approve a supplier invoice
- processing supplier invoices using ERS
who performs the processing supplier invoices (8) stage?
- accounts payable/
- accountant
explain the supplier invoices (8) stage
- enables accountant to enter, verify, and post invoices, credit memos, and down payment requests that are received from supplier
- alternatively, supplier can send these documents electronically
- can also charge supplier invoice items to partner companies and distribute additional costs, such as freight, among all other supplier invoice items
- post it when supplier invoice is complete and correct - supplier invoice is then used to pay suppliers
- if relevant, system also creates new fixed assets automatically
what does processing payables and payments - processing payments automatically (9) include?
- check and release payment proposal
- approve a payment
- create a payment medium and send to bank or payee
- process a bank statement
- allocate a payment
who performs the processing payables and payments - processing payments automatically (9) stage?
- accounts payable
- accountant
explain the processing payables and payments - processing payments automatically (9) stage?
enables the processing of outgoing payments initiated either internally by the company or externally by suppliers
- payments can be manual or automatic, with the system proposing items for payment, which you then can release and post to accounting
- payment media can be created manually or automatically, supporting checks, transfers, credit, memos, and country-specific methods
- after payments are debited, bank statement is uploaded or entered manually and confirmed
- externally initiated payments are matched to invoices and cleared in the system
what is in the initiate category?
- source and bundle
- initiate RFQ / create purchase order
what is in the procure category?
- send purchase order
- acknowledge purchase order
what is in the fulfil category?
- receive delivery
- manage inventory
what is in the settle category?
- receive/verify supplier invoice
- pay invoice
- post to ledger
what are the key benefits of procure-to-pay (stock)?
- automated sourcing and purchase order creation can be tailored to business
- workload monitoring and reporting drives process transparency supported by spend analytics
- alerts and exception handling for fast handling of non-standard requests
- integrated SAP Interactive Forms software (by Adobe); collaboration support
- payments to suppliers are highly automated to achieve the highest possible payment discounts taking the current liquidity situation into consideration
