TERP10 - Unit 5: Purchase to Pay Processing

EFFECTS OF POSITNG AN INVOICE

- An accounting document is created - The provisions in the GR/IR clearing account are reversed - The invoice document is entered in the PO history - If the invoice price is different than the PO price, the stock value and the current moving average price (MAP) are recalculated and updated in the material master.

CONSUMABLE MATERIAL FACTS

- Entry of material number not necessary but possible. - Account assignment category mandatory - GR optional - Posting to consumption accounts - No value update: quantity and consumption update in material master record possible. - no value-based inventory management - the system automatically updates consumption in the material master record.

PURCHASING INFO RECS - TEXT TYPES

- INTERNAL INFO REC MEMO (an internal comment you transfer to the PO item. This text is not printed) - PO TEXT (used to describe the PO item...is transferred to the PO item and print it).

STOCK MATERIAL FACTS

- Necessary to enter material number - No account assignment category - GR mandatory - Posting to stock accounts - Quantity, value, and consumption updated in material master record -Adjustment of moving average price

EFFECTS OF GOODS RECEIPT

- Updates the VALUE AND QUANTITY on the material master - Creates MATERIAL DOCUMENT - Creates ACCOUNTING DOCUMENT - If QM is invoked, the receipt opens an INSPECTION LOT to trigger the quality inspection - Updates asset balance sheet and consumption accounts - if WM is active, a TRANSFER REQUIREMENT is created - DOCUMENT UPDATES (i.e.; PO, PO history, etc...) - MESSAGE is sent to ordering party (optional) - A PRINTOUT is created (optional)

PURCHASE TO PAY PROCESS STEPS

1. Determine requirements 2. Determine the source of supply 3. Select the vendor 4. Create purchase order 5. Monitory purchase order 6. Goods receipt 7. Invoice verification 8. Bill payment

PROCURE TO PAY MASTER DATA

1. Material master (Material type) 2. Vendor master (General view-client level; Accounting view-company code, necessary to receive and pay invoice; Purchasing-Purchase Organization) 3. Purchasing info rec (Material & Vendor - delivery times, last PO, conditions, tolerances, text) 4. Conditions (Price...can come from info record, outline agreement, purchase order, quotation, entered manually) 5. Output (print, fax, e-mail, EDI)

PURCHASING ORGANIZATION TYPES

1. Plant-specific (purchase org is responsible for procuring the materials for one plant) 2. Cross-Plant (purchase org is responsible for procuring the materials for more than one plant w/in the same company code) 3. Cross-Company Code (purchase org is responsible for procuring the materials for the plants in multiple company codes)

For which of the following scenarios can you have a cross-plant purchasing organization buy materials? (1 correct answer) A. All plants in one company code B. Only one plant C. All plants in all company codes

A

Which document does the system create after you post an invoice? (1 correct answer) A. Accounting document B. Controlling document C. Material document

A

Which of the following tasks does the system perform during the payment run? (1 correct answer) A. It posts payment documents B. It creates open items C. it modifies data for printing the payment

A

Who does the purchasing organization procure for in a cross plant purchasing organization? (1 correct answer) A. For all plants belonging to the company code B. For only one plant C. For all company codes in the client D. For all plants in all company codes

A

PURCHASING GROUP (definition)

A key for a buyer or a group of buyers who are responsible for certain purchasing activities. Internally responsible for procuring a material or a class of materials, and externally supplies the contact person for vendors and is not aligned with other units in the company structure.

STOCK OVERVIEW (definition)

A report that displays stock quantities, for the various stock types, for a single material. Displays material stocks for each organizational level, such as the client, company code, plant, and storage location.

Which of the following documents does the system generate when you post the goods receipt? (2 correct answers) A. Material document B. Accounting document C. Purchasing document

A, B

Which of the following statements regarding Procurement organizational levels is correct? (2 correct answers) A. A company code can have one or many purchasing organizations assigned to it. B. A purchasing organization can be assigned to many plants. C. A plant can be assigned to many company codes. D. A purchasing organization must always be assigned to one company code.

A, B

Which pieces of information can you define in the info records? (2 correct answers) A. Number of the last purchase order B. Texts C. Internal info record memo D. Purchase order text in the purchasing info record

A, B

A material master has data stored at which of the following organizational levels? (3 correct answers) A. Plant B. Storage location C. Client D. Main work

A, B, C

Which of the following organizational levels are relevant in the procure-to-pay business process? (3 correct answers) A. Purchasing Organization B. Plant C. Company Code D. Distribution Channel

A, B, C

Which of the following types of conditions in purchasing can be used? (3 correct answers) A. Contract B. Quotation C. Purchase Requisition D. Purchasing info record E. Payment transaction

A, B, D

Which of the following organizational units are used in purchasing? (3 correct answers) A. Purchasing Group B. Plant C. Business area D. Cost Center E. Purchasing Organization

A, B, E

In the purchase order, what is updated as a result of a goods receipt and invoice receipt? (2 correct answers) A. Header Status B. Line item status C. PO History

A, C

Organizational levels have an important role in the procure-to-pay business process. Which of the following are correct statements? (2 correct answers) A. The same storage location number can be used in more than one plant. B. A plant can be assigned to many company codes. C. A purchasing organization can be assigned to more than one plant. D. A purchasing group is always responsible for only one purchasing organization.

A, C

Which of the following occurs as a result of posting a goods receipt with reference to a purchase order? (2 correct answers) A. A material document is always created. B. An accounting document is always created. C. The purchase order history is updated. D. In financial accounting, the liability against the vendor is created.

A, C

Which of the following statements about Purchasing Organization are correct? (2 correct answers) A. Negotiates conditions of purchase with vendors B. Must only purchase for one Company C. Can purchase for multiple plants D. Identifies a buyer or group of buyers

A, C

Which of the following can be a source of the automatic creation of a purchase requisition? (3 correct answers) A. Project system B. Controlling C. Plant Maintenance D. Material Planning E. Warehouse management

A, C, D

The movement type is a three digit key used to differentiate between goods movement in the system. The movement type has some important control functions which include: (3 correct answers) A. Plays a central role in automatic account determination B. Updates the vendor account for the invoice verification C. Determines the structure of the screens D. updates the consumption values in the material master E. Updating of the quantity fields

A, C, E

The movement type is a three-digit key used to differentiate between goods movements in the system. the movement type has some important control functions which include: (3 correct answers) A. Plays a central role in automatic account determination B. Updates the vendor account for the invoice verification C. Determines the structure of the screens D. Updates the consumption values in the material master E. Updating of the quantity fields

A, C, E

Which of the following organizational levels are required for inventory management? (2 correct answers) A. Plant B. Purchasing Organization C. Purchasing Group D. Storage Location

A, D

Which of the following statements about the material master record are correct? (2 correct answers) A. A material master record is used by all of the Logistics modules B. A material master record can be assigned to different material types at each plant. C. A material master record can use different material types for different plants. D. The data maintained within a view may be valid for more than one organizational level.

A, D

A GR is used for goods received from which of the following scenarios? (2 correct answers) A. External procurement from a vendor B. Stock transfers C. Goods withdrawals D. Transfer postings E. From a production order

A, E

STORAGE LOCATION (definition)

An organizational unit that facilitates the differentiation of stocks of materials in a plant.

PLANT (definition)

An organizational unit within logistics that subdivides an enterprise into production, procurement, and materials planning.

PURCHASING ORGANIZATION (definition)

An organizational unit within logistics that subdivides the enterprise according to the purchasing requirements. It is responsible for procuring materials or services and negotiating the conditions of purchase with vendors, and assumes responsibility for the purchasing activities. Legally responsible for completing purchasing contracts and meeting the enterprise's purchasing requirements.

In which data category of the vendor master record contains the reconciliation account? (1 correct answer) A. General Data B. Accounting Data C. Purchasing Data

B

Purchase requisitions can't be created by the following: (1 correct answer) A. Automatically via MRP B. Automatically via Goods Verification C. Automatically via other internal logistics orders D. Manually

B

What general ledger accounts are impacted in FI as the result of a GR for consumption by a cost center? (2 correct answers) A. Accounts Payable Reconciliation B. Expense Account C. Goods Receipt/Invoice Receipt Account D. Vendor Account

B, C

What integration role do account assignment objects play when used in a purchase order? (2 correct answers) A. They determine the process used to procure a material or service. B. They must be used whenever consumable materials are ordered. C. They help determine which accounts will be debited when the goods are received. D. They determine how data flows from purchase requisition to purchase order.

B, C

What are the stock types you can use to post a goods receipt of material into a warehouse? (3 correct answers) A. Restricted use B. Blocked C. Unrestricted use D. Quarantined E. Quality inspection F. Validated

B, C, E

Which of the following are Account Assignment categories for consumable materials (4 correct answers) A. COGS B. Cost center C. Project D. Profit center E. Asset F. Sales Order

B, C, E, F

What information can't be maintained on a purchasing info record? (1 correct answer) A. Freight and discounts B. Vendor Material Number C. Vendor Address D. Texts

C

What must be identified to convert a purchase requisition into a purchase order? (1 answer) A. A goods receipt B. A material master C. A source of supply D. An invoice receipt

C

Which of the following determines the views available when creating a material master? (1 correct answer) A. Info Type B. Item category C. Material Type D. Movement Type

C

Which of the following determines the views available when creating a material master? (1 correct answer) A. Info type B. Item category C. Material type D. Movement type

C

Which of the following statements about the logistics invoice verification process is true? (1 correct answer) A. Posting the invoice is the second phase of the invoice verification process B. Logistics invoice verification creates a connection between materials management and inventory management. C. When you post an invoice, the system creates an accounting document.

C

How would you describe the integration of the Vendor Master? (2 correct answers) A. Be directly used in production B. Groups of views for SD C. Groups of views for FI D. Be used to post directly in supplier or vendor accounting

C, D

The material type controls whether inventory management takes place on a value basis. What are the material types that exist for consumable materials? (2 correct answers) A. Maintenance materials B. Production materials C. Non-valuated materials D. Non-stock materials E. Account assigned materials

C, D

What business integration is triggered by the completion of invoice verification? (2 correct answers) A. The stock materials on hand inventory increased. B. The vendor master is updated with invoice receipt efficiency. C. An open item is credited on the vendor's account. D. The purchase order history is updated with the invoice document.

C, D

PURCHASE TO PAY ORGANIZATIONAL LEVELS

Client Company code Plant Storage location Purchasing Organization Purchasing Group

Procurement-related organization levels

Client, plant, and storage location organizational levels are relevant for the external procurement process. These levels play a role when you enter data for purchasing, inventory management, and accounting.

Vendor master Record

Contains information about vendors of your company. The data is subdivided into General data (client level), Accounting data (company code level), and Purchasing data. Before you can order anything from a vendor, you must maintain the purchasing data. To enter invoices, you must create the accounting data and maintain the master data for the vendor with accounting details.

GOODS MOVEMENT

Creates a material document as proof that the transaction caused a change in stock levels. The system records the quantity of the material posted to the storage location of a plant at the line item level. If the goods movement is relevant to inventory valuation, the system creates at least one accounting document in addition to the material document. The accounting document records the effects of line material movements on the general ledger accounts.

What organization elements control the entry of the data views for a vendor? (1 correct answer) A. Client and Company Code B. Client, company code, and plant C. Client and purchasing organization D. Client, company code, and purchasing org E. Company code

D

ACCOUNT ASSIGNMENT CATEGORY (definition)

Determines the account assignment object category that is to be charged. Like K or D

Which of the following are Account Assignment categories for inventoried materials: (1 correct answer) A. Inventory B. Cost Center C. Order D. Asset E. None of the above

E

A purchasing group is always responsible for only one purchasing organization. TRUE/FALSE

FALSE

A purchasing organization can procure material or services for only one plant. TRUE/FALSE

FALSE

A purchasing organization is always assigned to one plant. TRUE/FALSE

FALSE

INFO RECORDS (definition)

Give the option to store information about a vendor and a material at the purchasing organization level and at the plant level. The following information can be defined: - current and future price conditions (i.e.; freight and discounts) - delivery data (i.e.; planned delivery times and delivery tolerances) - vendor data and vendor-specific material data - last purchase order number - internal comments and text from the purchase order

CONSUMABLE MATERIALS (definition)

Materials or services procured directly for account assignment objects. These materials do not go in to inventory.

Can a plant belong to more than one company code?

No, a plant is always assigned to only one company code.

PURCHASE TO PAY INTEGRATION POINTS

PURCHASE REQ: Management Accounting (CO) PURCHASE ORDER: Management Accounting (CO) GOODS RECEIPT: QM (if active) WM (if active, transfer requirement) FI accounting doc (inventory increase, increase liability) Update PO history Inventory Management CO controlling doc (if for consumable materials) INVOICE RECEIPT: FI accounting doc (transfers liability from GR/IR and vendor) Update PO history CO

GOODS RECEIPT

Receipt of material for a purchase order. The following documents are created at goods receipt: - Material document (what was delivered and how much?) Plant storage location is recorded for stock items - Accounting document (for valuated materials)...contains the relevant G/L accounts that were used to post the transaction as a result of the goods receipt

What field facilitates the integration of the Vendor Master record to Financial Accounting? (fill in the blank)

Reconciliation account

CONDITIONS (definition)

Represents the elements, such as gross price and discounts of a vendor's price.

A purchase requisition can be created automatically from another SAP component. TRUE/FALSE

TRUE

Discount Management is an example of integration between SAP ERP and Ariba. TRUE/FALSE

TRUE

INVOICE VERIFICATION

This is the final step of the procurement process in Materials Management (MM). Posting an invoice updates the PO history and an open item is posted to the vendor's account in FI (and clears the GR/IR account). You can also use the delivery note number or bill of lading as reference documents when posting a vendor invoice.

Can you use the same storage location number in more than one plant?

Yes, even if storage locations have the identical storage location number or name in the concerned plants, storage locations are completely independent organizational units within a plant.