Purchase Order
 Creation
 Manually or automatically
 With or without reference to other documents
 Data
 Documents: Purchase requisition, Purchase order, RFQ,
Quotation
 Master data:
 Material (characteristics)
 Vendor (terms)
 Info record (pricing)
 Conditions (pricing)
1
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Data in a Purchase Order
2
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Purchase Order
 Tasks
 Data automatically included from input sources
 Source determination using info records, agreements and
contracts, and source lists
 Outcomes
 Purchase order
 Purchase requisition history – PO added
 Communicate
 with vendor (external procurement) using messages: fax, EDI,
print
 Plant (internal procurement) using transfer orders
3
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Purchase Order Structure
 Header
 Document number, dates
 Vendor, currency, terms
 PO total
 Line items
 Material number, description
 Quantity, price, item total
 Delivery date
4
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
The Structure of a Purchase Order
5
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Purchase Requisition to Purchase Order
6
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Communicating with vendors
7
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Purchase Order Processing Options
8
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
GBI Scenario
 Create purchase order
 Material: SHRT1000
 Quantity: 500
 Vendor: Spy Gear (from source list or manual entry)
 Receiving plant: Miami
 Reference document: purchase requisition
 Price: $15 each (from info record)
 Total PO value: $7500
9
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Demo 4-8: Convert Purchase
Requisition to Purchase Order
 Convert a previously created purchase requisition into a
purchase order
 Review data in the purchase requisition
10
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Elements of the Goods Receipt Step
11
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Goods Receipt
 Data
 Documents: PO, Delivery document (packing list)
 Master data
 Task
 Verify materials receipt
 Create GR document
 Outcomes
 Material documents
 Header: Document number, date, reference
 Details (items): Material, quantity, location, movement type
 Financial Accounting documents
 Header: Document number, date, reference, currency
 Details (Items): GL accounts, description, amount
12
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Goods Receipt
 Outcomes
 Notifications
 Material master: stock and value
 GL accounts (Stock/Consumption, GR/IR)
 PO history – Material document added
 Quality management
 Quality inspection lot
 Warehouse management
13
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Data In The Goods Receipt Step
14
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Financial Impact of Goods Receipt
15
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Material and Accounting
Documents from a Goods Receipt
16
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Demo 4-9: Receive goods against a
Purchase Order
 Record the receipt of materials for the purchase order
previously created.
 Review data in the associated purchase requisition.
 Review data in the associated purchase order.
17
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Elements of the Invoice Verification Step
18
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Invoice Verification
 Data
 Vendor invoice
 Purchase order
 Material document
 Tasks
 Three-way match
 Outcomes
 Financial Accounting documents
19
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Data needed for Invoice Verification
20
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Invoice Verification
 Outcomes
 GL: vendor account, A/P, GR/IR
 PO history - invoice document added
 Material master :
 Stock value,
 Moving average price (if using moving price vs. standard price)
21
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Financial Impact of Invoice Verification
22
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Demo 4-10: Receive and Verify an Invoice
 Verify and record an invoice received from a vendor.
 Review data in the associated purchase order
23
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Elements of the Payment Step
24
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Payment Processing
 Creation: manually or via automatic payment program
 Data
 Three-way match (or other process)
 Payment method, account, items to pay,
 Tasks
 Calculate payment amount (discounts)
 Post payment document (accounting document)
25
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Payment Processing
 Outcomes
 Financial Accounting Documents
 Payments (checks, EFT, notifications)
 Updates
 GL accounts
 Material master :Moving average price (if using moving price vs.
standard price)
26
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Data needed for Vendor Payment
27
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Financial Impact of Vendor Payment
28
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Demo 4-11 Make payment to Vendor
 Record payment made to a vendor for previously recorded
invoices.
29
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Integration With Other Processes
30
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Reporting
 Source of data
 Instance level reporting (status)
 Process level reporting
 Lists and reports
 Purchasing Information System
31
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Reporting - Sources
 Organizational data
 Master data
 Transaction data (documents)
 Purchasing documents
 Material documents
 Accounting documents
 Invoice documents
32
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Reporting - Instance
 Status of a Requisition, Purchase Order
33
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
List of Invoices
34
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Work List – List of Requisitions
35
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Demo 4-12: Display a List Report
 Retrieve and display a list of invoices (online list)
 Retrieve and display a list of open purchase requisitions
(work list)
36
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Reporting - Standard
 Process level reporting
 Standard reports / List displays
 Logistics Information System
37
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Reporting – Logistics Information System
 Components
 Purchasing Information System
 Sales Information System
 Quality Management Information System
 Inventory Control
 Transportation Information System
 Shop Floor Information System
 Plant Maintenance Information System
38
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Reporting – Logistics Information System
 Information Structures
 Special tables of statistics from various modules that is
constantly updated
 Selection criteria (types of information)
 Key figures: variables of interest
 Quantitative values on measurable facts
 Numbers (of orders, deliveries)
 Quantities (of material)
 Cost, delivery time
 Characteristics: used to organize key figures
 Vendors, material, organizational levels
 Timeframe: day, week, month, etc.
39
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Standard Analysis
40
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Demo 4-13: Display a report using
the Purchasing Information System
 Generate a standard report using the purchasing information
system for the US00 Purchasing Organization.
 Drill down to several levels of information in the report.
41
Magal and Word | Integrated Business Processes with ERP Systems | © 2011
Flexible Analysis
42
Magal and Word | Integrated Business Processes with ERP Systems | © 2011