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Product Documentation PUBLIC SAP Business ByDesign February 2017 Purchasing

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Page 1: Purchasing - SAP · PDF file2.3 Asset Procurement in Purchasing ... addition, support for self-service procurement within SAP Business ByDesign allows your buyers to

Product Documentation PUBLICSAP Business ByDesign February 2017

Purchasing

Page 2: Purchasing - SAP · PDF file2.3 Asset Procurement in Purchasing ... addition, support for self-service procurement within SAP Business ByDesign allows your buyers to
Page 3: Purchasing - SAP · PDF file2.3 Asset Procurement in Purchasing ... addition, support for self-service procurement within SAP Business ByDesign allows your buyers to

Table Of Contents

1 Purchasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2 Business Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.1 Supplier Relationship Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.2 Operational Purchasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142.3 Asset Procurement in Purchasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152.4 Automation of Supplier Relationship Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172.5 Value-Added Tax Refunds to Domestic Entrepreneurs Abroad . . . . . . . . . . . . . . . . . . . . . . . . . . . 202.6 Pricing in Supplier Relationship Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 222.7 Account Assignment in Purchasing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262.8 Intercompany Project Time and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282.9 Intercompany Stock Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322.10 Third-Party Order Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 362.11 Intracompany Stock Transfer – India . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

3 Self-Services - Shopping . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423.1 Business Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

Shopping Cart Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423.2 Tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Create a Shopping Cart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44Create a Shopping Cart on Behalf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46Add a Limit Item to a Shopping Cart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Track the Status of a Shopping Cart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50Withdraw a Shopping Cart from Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51Cancel an Item Requested in a Shopping Cart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52Confirm a Delivery from a Shopping Cart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53Quick Confirm Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55Confirm the Delivery of a Limit Item from a Shopping Cart . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56Cancel a Goods and Services Receipt for a Shopping Cart . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57Create a Goods Return for a Shopping Cart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

4 Purchase Requests and Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 614.1 Purchase Requests View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

Purchase Requests Quick Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61Business Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63Tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

4.2 Purchase Orders View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71Purchase Orders Quick Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71Configuration: Automatic Accept Deviation on Purchase Order Acknowledgement . . . . . . . . . . . 76

SAP Business ByDesign February 2017Table Of Contents P U B L I C • © 2017 SAP SE or an SAP affiliate company. All rights reserved. 3

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Business Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77Tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

4.3 Reports View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108Released Documents per Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108Price History per Product and Supplier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108Monitoring of Automatic Purchase Order Creation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109Monitoring Purchase Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111Expected Deliveries per Week . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112Purchase Orders per Account Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113Monitoring Purchase Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114Purchase Requests per Account Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115

4.4 Common Tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117Configuration: Automatic Creation of Purchase Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117Configuration: Tax Classification for Free-Text Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119

4.5 Purchase Order Item Completion Runs Quick Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

5 Goods and Services Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1245.1 Business Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

Goods and Services Receipt and Goods Return Processing . . . . . . . . . . . . . . . . . . . . . . . . . . . 124Quantities in Goods and Services Receipts and Goods Returns . . . . . . . . . . . . . . . . . . . . . . . . . 127Tracking of Customs Document – Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

5.2 Purchase Orders to Be Delivered View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129Purchase Orders to Be Delivered Quick Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129Tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131

5.3 Receipts and Returns View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136Receipts and Returns Quick Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136Tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138

5.4 Reports View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141Released Documents per Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141Monitoring Purchase Orders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142Expected Deliveries per Week . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143Purchase Orders per Account Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144

6 Supplier Invoicing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1476.1 Business Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

Supplier Invoice Types . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147Supplier Invoice Verification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150Tax Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152Tax Determination Details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157Withholding Tax Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172Tax Deferral Process for Supplier Invoicing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175Automatic Account Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176Document Flow into Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177Journal Entries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178

6.2 Work View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182

4 © 2017 SAP SE or an SAP affiliate company. All rights reserved. • P U B L I CSAP Business ByDesign February 2017

Table Of Contents

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Quick Guide for Work (in Supplier Invoicing) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182Business Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187Tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189

6.3 Invoice Entry View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200Quick Guide for Invoice Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200Business Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205Tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212

6.4 Invoices and Credit Memos View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 239Quick Guide for Invoices and Credit Memos (in Supplier Invoicing) . . . . . . . . . . . . . . . . . . . . . . 239Configuration: Supplier Invoice Scanning Keyword Settings . . . . . . . . . . . . . . . . . . . . . . . . . . . 242Tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242

6.5 Evaluated Receipt Settlements View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251Quick Guide for Evaluated Receipt Settlements (in Supplier Invoicing) . . . . . . . . . . . . . . . . . . . . 251Business Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255

6.6 Recurring Invoices View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263Quick Guide for Recurring Invoices (in Supplier Invoicing) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263Tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266

6.7 Reports View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269Released Documents per Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 269Invoices with Exceptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 270Payment Statistics – Cash Discount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 272Monitoring Invoices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 274

6.8 Common Tasks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275Configuration: Tax Classification for Free-Text Items . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275

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1 Purchasing

OverviewThe Purchasing business area allows you to manage the operational purchasing life cycle. This covers activities tocontrol and centrally manage purchase requests, purchase order collaboration, and goods and services receipts fordelivery of products. You can integrate and automate your purchasing tasks, such as creating purchase orders,receiving purchase order acknowledgments, and verifying supplier invoices, which reduces errors and streamlinesyour entire procurement process. In addition, self-service procurement lets your employees create, monitor, andcontrol their own shopping carts decentrally, giving your buyers time to focus on other tasks.

RelevanceThe Purchasing business area is relevant if you need to purchase stock for manufacturing or for direct sale to yourcustomers. It is also relevant if you need to purchase non-stock materials or services for the day-to-day operationof your company and you want to manage your purchasing costs centrally. The following business packages areassociated with the Purchasing business area:

● Purchase request and order management (mandatory) ● Self-service procurement (optional) ● Supplier invoicing (mandatory)

Benefits ● Improved information sharing across your business and with partners

The SAP Business ByDesign solution supports integration of your purchasing processes with your other corebusiness processes, such as supply chain management, projects, and financial accounting. This means thatemployees in all departments can access and track appropriate information related to purchasing. Forinstance, when an employee creates a request for supplies needed for a project, the information is availableinstantly to a buyer and to the responsible project lead. As well, employees and buyers can order productsonline from up-to-date external supplier catalogs.

● Increased efficiency through automation of your business processesSAP Business ByDesign helps you automate your processes, which means minimal employee involvementis needed to carry out routine tasks. For example, the software can automatically determine a source ofsupply, and can create and send the purchase order. Using built-in invoice verification, SAP BusinessByDesign allows your employees to create invoices with or without reference to a purchase order. The systemautomatically matches references and detects exceptions such as duplicates and variances in electronicinvoices. Your employees need to get involved only when such exceptions occur. Plus, SAP Business ByDesignposts invoices and handles payment once the goods arrive.

● Increased focus on strategic projects and tasksThe solution gives your purchasing employees and managers a prioritized view of their daily tasks. Worklists,with alerts and exceptions, let your employees know exactly what purchasing activities they need to do. Inaddition, support for self-service procurement within SAP Business ByDesign allows your buyers tostreamline and accelerate purchasing processes and reduce the volume of routine purchasing tasks.

6 © 2017 SAP SE or an SAP affiliate company. All rights reserved. • P U B L I CSAP Business ByDesign February 2017

Purchasing

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2 Business Background

2.1 Supplier Relationship Management

OverviewSupplier Relationship Management enables you to strengthen your relationships with suppliers, to improve yourprocurement processes, to reduce costs, and to turn your relationships with your suppliers into a competitiveadvantage.Supplier Relationship Management fully integrates your operational and strategic procurement processes – fromdemand generation and procurement of new materials and services, to contract negotiation and monitoring ofpurchase documents including invoices – with your other core business processes, such as logistics, projectmanagement, and financial management. As a result, you can collaborate with your suppliers more efficiently,automate processes, and continuously assess the effectiveness of your procurement activities and supplierrelationships.Further, Supplier Relationship Management provides powerful reporting tools that allow a high degree of processvisibility and give more insight into the performance of both operational and strategic purchasing to help you achievesignificant savings. Standard reports help your company monitor supplier performance, analyze price and spenddevelopment, as well as track purchase requests, purchase orders, supplier invoices, and purchasing contracts.

PurchasingSupplier Relationship Management supports your purchasing in automating your procurement processes by, forexample, monitoring and centrally managing company-wide purchases while reducing the volume of routinepurchasing tasks. Automatic invoice verification is also included in the procurement process as well as automaticnotification in Financials of accounting-relevant data, of payments and taxes that are due, and of payments to anonresident supplier, where relevant.

Figure 1: Purchasing Process

The standard purchasing process runs as follows:

SAP Business ByDesign February 2017Business Background P U B L I C • © 2017 SAP SE or an SAP affiliate company. All rights reserved. 7

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1. Depending on the configuration, a demand is created in one of the following ways: ● To order non-stock materials or services, a shopping cart using catalogs for example, can be created as

a self-service request in the Home work center. For more information, see Shopping Cart Processing[page 42].

● To order stock materials, a purchase proposal can be created in the Supply Planning work center. Formore information, see Trigger Production and Purchasing.

● To request external services for a project, a purchase request can be released in the ProjectManagement work center. For more information, see Projects Quick Guide.

2. The system automatically creates a purchase request based on the entered demand. For more information,see Purchase Request Processing [page 63].

3. The system automatically searches for a source of supply, such as contracts or list prices, and, if available,assigns it to the demand. If required, a buyer can also manually assign a source of supply or data from anexisting purchase order.If there is no source of supply available for a particular product, a buyer can trigger the system to create asourcing request in the Sourcing and Contracting work center, which initiates the request for quotation (RFQ)process.For more information, see Sourcing.

4. Depending on the configuration, the system can automatically create a purchase order based on the purchaserequest. A buyer can also create a purchase order manually from a purchase request or directly. For moreinformation, see Purchase Order Processing [page 77].

5. If the system created a purchase order automatically, it also automatically sends it to the supplier or to a localprinter. If a buyer created a purchase order manually, the system sends it automatically to the supplier oncea buyer has manually ordered it.

6. Depending on the configuration, the system can send the purchase order as a standard form, an interactiveform, or by electronic data exchange (EDX), which can fully automate the purchase order acknowledgmentcreation and update process in the system. In all other cases, a buyer manually enters the purchase orderacknowledgment in the system. For more information, see Purchase Order Acknowledgments[page 89].

7. Depending on the origin of the demand, the delivery of ordered materials and services is handled in thefollowing ways: ● For non-stock materials and services, a buyer or the requesting employee can confirm the delivery of

materials or the completion of services (goods and services receipt). For more information, see Goodsand Services Receipt and Goods Return Processing [page 124].

● For stock materials, a warehouse worker can confirm the delivery of materials (inbound delivery). Formore information, see Inbound Delivery Processing.

● For services procured for projects, depending on the settings in the purchase order, the system canautomatically create a goods and services receipt based on the time sheet filled in by external serviceagents or project leads (on behalf of service agents). If required, a person responsible can also create agoods and services receipt manually. For more information, see Project Work Quick Guide.

8. For evaluated receipt settlements (ERS) and recurring invoices, the system automatically creates a supplierinvoice. In all other cases, an accountant manually enters a supplier invoice with or without reference topreceding documents. The accountant can also scan invoices into the system. In addition, an accountant canalso process down payment requests from suppliers prior to the delivery or provision of the materials orservices that have been ordered. For more information, see Supplier Invoice Processing with Reference.The system automatically verifies a supplier invoice and, if required, raises exceptions due to inconsistencies,such as a price variance or a duplicate invoice. The exception can then be routed to the appropriate party forclarification and acceptance. For more information, see Exception Handling [page 187].

9. If there are no exceptions or once all existing exceptions are solved, the system automatically posts a supplierinvoice to trigger the payment process.

8 © 2017 SAP SE or an SAP affiliate company. All rights reserved. • P U B L I CSAP Business ByDesign February 2017

Business Background

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The system notifies Financial Management of: ● Accounting-relevant data ● Payments and taxes that are due ● Payments to a nonresident supplier, where relevant.

For more information, see Outgoing Payments.

SourcingSupplier Relationship Management supports your sourcing activities in determining, negotiating, and documentingsources of supply for your demands, managing the complete contract life cycle, and providing employees andsuppliers with up-to-date and accurate information about prices. You can also track and monitor supplierperformance by identifying top- and low-performing suppliers, products, and product categories. For moreinformation, see Sourcing.

Figure 2: Sourcing Process

The standard sourcing process runs as follows:1. A sourcing demand is identified in one of the following ways:

● The system cannot find any existing sources of supply for materials or services that are contained inpurchase requests.

● An existing purchasing contract expires and needs to be renewed.2. The system automatically creates a sourcing request based on a purchase request that needs to be sourced

or based on an expiring purchasing contract.3. A buyer can manually create a request for quotation (RFQ) and send it to one or more bidders. The system

can also automatically create an RFQ based on a sourcing request and send it to the supplier.4. The system receives quotes from one or more bidders. A buyer can compare, award, and reject quotes.5. The system creates a purchase order or purchasing contract as a follow-up document based on a winning

quote.

For more information, see Purchase Request Processing [page 63], Purchasing Contract Processing, andRequest for Quotation Processing.

Key Features of Supplier Relationship ManagementTo streamline your company’s strategic and operational procurement processes, Supplier RelationshipManagement helps you integrate and automate processes, and continuously assesses the effectiveness of yourprocurement activities and supplier relationships.

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IntegrationSupplier Relationship Management fully integrates your strategic and operational procurement processes with thefollowing:

● Supply Chain ManagementFor stock materials, Supplier Relationship Management interacts with Supply Chain Management by: ○ Receiving purchase requests from supply planning ○ Receiving product specification data to be used in purchase requests and purchase orders ○ Informing supply planning about created purchase orders and their changes ○ Receiving information from confirmed inbound deliveries and returns to supplier, which then

automatically updates purchase orders within Supplier Relationship Management. Supply ChainManagement also forwards information from confirmed inbound deliveries and returns to supplier toSupplier Invoicing in Supplier Relationship Management

○ Reconciling the delivered quantity in posted supplier invoices and confirmed inbound deliveries ○ Attaching quality inspection documents defined within quality planning to purchase orders and

contracts, and sending them to suppliers to help ensure that the proper quality inspections are carriedout

○ Creating supplier invoices based on third-party purchase orders ○ Creating purchase documents based on intercompany stock transfer

● Customer Relationship ManagementFor third-party procurement, Supplier Relationship Management interacts with Customer RelationshipManagement in the following way: ○ An employee, buyer, or accountant can select a sales order item or a service order item as account

assignment in the shopping cart, purchase order, goods and services receipt, or supplier invoice. ○ An employee, buyer, or accountant can select a customer address as a delivery address in the shopping

cart, purchase order, goods and services receipt, or supplier invoice. ● Project Management

For services procured for projects, Supplier Relationship Management interacts with Project Managementby: ○ Receiving purchase requests from projects with account assignment to projects ○ Creating shopping carts, purchase orders, goods and services receipts, and supplier invoices with

account assignment to projects ○ Sending information about created shopping carts, purchase orders, goods and services receipts, and

supplier invoices to Project Management ○ Assigning projects to RFQs and contracts in order to track purchasing projects, and to track RFQs and

contracts related to any other type of project ○ Creating goods and services receipts based on approved time sheets for projects filled in by external

service agents or by project leads on their behalf ● Financial Management

Using purchase documents, such as purchase orders, posted goods and services receipts, or posted supplierinvoices, Supplier Relationship Management informs Financial Management about the following: ○ Account assignment (cost centers, projects, sales orders, service orders) ○ General ledger information (based on the product category or account determination group) ○ Taxes ○ Expenses

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AutomationBy automating the procurement process, Supplier Relationship Management minimizes the amount of employeeinvolvement required to complete tasks. The following describes the possible automation of the individual steps ina standard procurement process.

● Demand Entry ○ An employee can enter a demand directly in the system using self-service shopping. If an employee adds

products from catalogs to a shopping cart, the system automatically determines the price and supplier,and can also create the purchase order automatically.

○ In supply planning, the system can automatically create purchase proposals and release them topurchase requests.

● Approval ○ The system can automatically route purchase documents, such as shopping carts, purchase orders,

goods and services receipts, purchasing contracts, or supplier invoices, for approval. ○ Using approval limits, approvers can automatically control spend.

● Source DeterminationIf available, the system automatically assigns suitable sources of supply based on contracts or list prices. Ifseveral contracts exist for one product, a buyer can use quota arrangements to influence which supplierdelivers what quantity of the product, or a buyer can define a contract or a list price as a fixed source of supply.Depending on purchasing volume and the relevance of goods and services to be purchased, you might notnegotiate contracts with your supplier. In this case you can use list prices as a lean alternative to maintainprice master data and automate your purchasing process.For more information, see Source Determination.

● Purchasing Contract Negotiation with Current Supplier ○ Once a buyer decides to renegotiate an existing contract directly with the current supplier, the system

automatically creates a sourcing request, based on which it also creates a request for quotation (RFQ).The system automatically sends the RFQ to the current supplier.

○ When a buyer accepts a quote, the system automatically creates a purchasing contract based on thequote.

● Tax DeterminationBased on the country of a company, a supplier, and the type of procured products, the system automaticallydetermines taxes. For more information, see Tax Determination [page 152] and Withholding TaxDetermination [page 172].

● Purchase Order CreationIf the system automatically determines the source of supply, it can also automatically create a purchase orderdepending on the defined settings. For more information, see Automatically Created Purchase Orders[page 87].

● Sending Purchase OrdersThe system automatically sends out purchase orders to suppliers using the defined output channels, suchas fax, print forms, or interactive forms by e-mail or electronic data exchange (EDX).

● Purchase Order AcknowledgmentsIf the system sends a purchase order to a supplier using an e-mail with an attached interactive form orelectronic data exchange (EDX), the system automatically creates the purchase order acknowledgment inthe system based on the supplier’s response, and informs the buyer about deviations from the purchaseorder.

● Goods and Services Receipts for Projects

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Depending on the settings in the purchase order, the system can automatically create goods and servicesreceipts based on time sheets for projects that were filled in by external service agents or project members(on behalf of service agents).

● Supplier Invoices ○ The system can receive electronic supplier invoices using EDX; no manual effort is required. ○ Using evaluated receipt settlement (ERS), the system automatically creates supplier invoices based on

posted goods and services receipts and inbound deliveries. For more information, see Supplier InvoiceProcessing Using Evaluated Receipt Settlement [page 255].

○ Using recurring invoices, for example to make regular payments for rent, leasing, or insurance, thesystem automatically creates supplier invoices on defined due dates based on information your companyhas entered into templates in the system. For more information, see Recurring Invoices for SupplierInvoices.

○ An accountant can scan paper invoices instead of entering them manually; the system automaticallysearches for the purchase order number and adds the purchase order number as a reference to thesupplier invoice. Based on the purchase order number, the system creates an invoice proposal. For moreinformation, see Quick Guide for Invoice Entry (in Supplier Invoicing) [page 200] and UploadingScanned Supplier Invoices Using Automatic Upload Service.

For more information about automating the procurement process, see Automation of Supplier RelationshipManagement [page 17].

AnalyticsVarious Supplier Relationship Management spend reports, such as Total Spend per Spend Category, Spend perSupplier, Spend per Product, or Spend per Product Category, give insight into the performance of purchasing andsourcing activities, provide transparency on purchasing spend and spend categories as contract or maverick spend,and enable you to identify potential for cost savings. Standard reports help your company monitor supplierperformance, such as price reliability, analyze price and spend development, and track purchase requests, purchaseorders, supplier invoices, and purchasing contracts.

PricingThe system provides you with several ways of defining simple or complex prices in catalogs, purchasing contracts,supplier quotes, purchase orders, and list prices, depending on your purchasing volume, the relevance of the productor service to your company’s success, and the importance of the relationship with suppliers. The system also enablesyou to define price conditions. These price conditions represent factors that apply when a price is calculated: forexample, quantity, date, product, any discounts or surcharges, and so on. These variable factors influence the totalvalue. Various price conditions can be combined. For more information, see Pricing in Supplier RelationshipManagement [page 22].

Org FunctionsOrg functions are used to define authorizations for the processes in work centers. As such, they limit authorizationsof units and employees to certain documents, such as purchase orders, goods returns, purchasing contracts, orinvoices. The authorizations are determined over the organizational assignment of the employees, which is definedin the corresponding work categories. In the system, Business Task Management references the work categoriesdefined for the org functions to determine the recipients for tasks. For more information about the org functions andwork categories that are relevant for Supplier Relationship Management, see Strategic Purchasing, OperationalPurchasing, and Supplier Invoicing.

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Business Scenarios with Supplier Relationship Management

Procure-to-Pay (Stock)The Procure-to-Pay (Stock) scenario enables you to purchase stock products based on a requirement that can begenerated from a planning system, such as a Materials Requirements Planning (MRP) system.It covers all stages of the procurement process, from demand planning and creation of a purchase order, throughautomatic or manual assignment of sources of supply, sending the purchase order to a supplier, to goods andservices receipt, invoice verification, and payment.For more information, see Procure-to-Pay (Stock).

Procure-to-Pay (Non-Stock)The Procure-to-Pay (Non-Stock) business scenario allows you to purchase non-stock materials, such as officematerial, engineering sample material, or fixed assets.This scenario can be triggered by employees or assistants who create shopping carts, by project teams who neednon-stock materials for projects, by buyers directly in purchase orders or requests for quotation (RFQ), or byaccounts payable accountants in supplier invoices. Deliveries can be confirmed centrally or decentrally. Costs forproject-related non-stock materials are directly transferred to project tasks in financial accounting.If a catalog, purchasing contract, or list price for a non-stock material exists, a purchase order can be createdautomatically. If no source of supply exists, you can send RFQs to determine appropriate suppliers.With this scenario you can also order non-stock materials to cover customer demands by using sales orders orservice orders to trigger third-party procurement.For more information, see Procure-to-Pay (Non-Stock).

Procure-to-Pay (Services)The Procure-to-Pay (Services) business scenario allows you to procure services, such as consulting and trainingservices, temporary labor, or engineering services. It can be triggered by employees who create shopping carts forservices, by project managers who need a certain service for their project, or directly by the buyer using a purchaseorder.Project-related services are usually recorded in a time sheet and the costs are directly transferred to the projecttasks in financial accounting. If a purchasing contract or a list price for the ordered service exists, the purchase ordercan be created automatically. If no source of supply exists, a request for quotation can be sent out to determine anappropriate supplier.Alternatively with this scenario, it is possible to order external resources to provide services for customer demandsthat cannot be fulfilled by internal employees. In this case, the procurement process is triggered when a sales orderor a service order has been created.for more information, see Procure-to-Pay (Services).

Strategic SourcingThe Strategic Sourcing business scenario enables you to identify and select suitable new suppliers and to managerelationships with existing suppliers in order to meet the routine purchasing requirements of your company. Itinvolves the definition of requirements for a product, through to the identification and selection of the most suitablesuppliers, and finally to the negotiation and creation of a purchasing contract with the chosen supplier.For more information, see Strategic Sourcing.

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Product Catalog ManagementThe Product Catalog Management business scenario allows your company to use catalogs to centrally manage non-stock materials that are required for use such as office materials, engineering sample materials, computer systems,or machines. The scenario is not for products to be held on stock since they can be procured directly for an accountassignment. A catalog can be managed by buyers, who create their own internal catalogs and access externalcatalogs provided by suppliers using the open catalog interface (OCI). It also allows your company to specify thedefault suppliers and product categories for the catalogs. Published catalogs can be used in other procurementscenarios.For more information, see Product Catalog Management.

2.2 Operational Purchasing

OverviewThe SAP Business ByDesign solution makes operational purchasing faster and more efficient by integratingoperational purchasing processes into work centers, such as Purchase Requests and Orders or Supplier Invoicing,enabling a streamlined and hassle-free process. The solution encompasses all the functions and processes you asa buyer need to plan, manage, and evaluate your company’s procurement of products from your suppliers. It allowsyou to maintain purchase requests, to assign sources of supply, and to transfer data from purchase requests intopurchase orders using predefined creation options. You are able to monitor, update, or cancel purchase orders, andto initiate follow-up processes, such as confirming purchase order acknowledgments, receiving deliveries, andhandling exceptions in supplier invoices.Operational purchasing processes are incorporated into the following business configuration packages in thesolution.

Stock Material ProcurementStock Material Procurement supports your company in efficiently purchasing products to meet requirements, forexample, for production or sales. This scenario involves numerous business functions within the company, fromsupply planning, purchasing, inventory management, and invoice creation to payment handling and financialaccounting.

Non-Stock Material and Service ProcurementNon-Stock Material and Service Procurement enables you to procure products independently of warehousing andmanufacturing execution processes, thereby significantly streamlining the procurement of products for internal use.This scenario involves numerous business functions within the company, from purchasing, delivery handling, andinvoice management to payment and financial accounting. Service Procurement is supported as a variation.

Purchase Request and Order ManagementPurchase Request and Order Management allows you to procure materials or services from external suppliers. Theautomation of your procurement process, such as bundling of purchase requests into purchase orders, reduceserrors and time spent on routine tasks. Purchase Request and Order Management encompasses:

● Purchase RequestsPurchase requests enable you to manage demands from material requirements planning, shopping carts, orprojects that have to be procured externally. Purchase requests cannot be created manually.

● Purchase Orders

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You can manage and monitor purchase orders to get the ordered products on time, at the correct location,and in the required quantity. Purchase orders can be created automatically or manually.

● Purchase Order AcknowledgmentsPurchase order acknowledgments are generally used to control procurement of purchased items needed forproduction. They can be created manually by the buyer or sent automatically by the supplier. If sent by thesupplier, the buyer only has to take care of deviating purchase order acknowledgments. The buyer can alsoremind the supplier of missing purchase order acknowledgments.

● Goods and Services ReceiptsYou can post goods and services receipts, and also remind the supplier of missing deliveries. If you need toreturn a material that has already been recorded in the system, you can post a goods return. If you need tocancel a goods and services receipt or goods return, you can create a goods and services receipt cancellationor goods return cancellation in the system.

Self-Service ProcurementSelf-Service Procurement helps you as a buyer to effectively manage the procurement of planned and unplannedexternal services, as well as non-stock materials, which may be triggered by employees (using shopping carts), orby purchase requests from within projects. In addition, services can be procured directly by manually creatingpurchase orders. This scenario involves numerous business functions within the company, from purchasing, serviceacknowledgments, and invoice management to payment and financial accounting, and project management.

See AlsoPurchase Request Processing [page 63]Purchase Order Processing [page 77]Goods and Services Receipt and Goods Return Processing [page 124]

2.3 Asset Procurement in Purchasing

OverviewThere is a huge variety of products that can be ordered within a company and therefore various process variants arepossible in asset procurement, depending on the value and the complexity of the product to be procured.If the product to be procured is of high value and complexity (for example, a new building), the buyer generally worksvery closely together with the accountant beforehand. The fixed asset is then created in the system before goodsand services are ordered with an account assignment to this fixed asset.If the product to be procured is of low value and complexity (for example, a new laptop), the fixed asset is usuallycreated automatically in the system at the time the goods receipt is posted. Therefore, individual materials are usedin purchasing, which may lead to the creation of fixed assets in Financial Management.

Prerequisites

● New individual materials can only be created for Non-Stock materials in the purchase order or when enteringthe goods and services receipt.

● In the purchase order, it is only possible to create individual materials as long as no goods and services receiptfor this item has been posted.

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● It is possible to assign a new individual material to an existing individual material in the Belongs to IndividualMaterial column on the Items tab. This creates a Belongs-to reference between these two individualmaterials.

If you assign an individual material to another individual material, this individual material must eitheralready be in preparation (goods and services receipt not yet posted, but individual material exists) oractive (goods and services receipt has already been posted).If the individual material to which you refer using the belongs-to reference is part of another document,ensure that this individual material is processed first in Financial Management (after the goods andservices receipt has been posted), before you assign it as a belongs-to reference to another individualmaterial.Also ensure that the individual material with the highest value is taken as belongs-to reference to makesure it is processed first in Financial Management and a fixed asset is created (if criteria for fixed assetcreation are fulfilled). The belongs-to reference is then taken into account correctly and all assignedindividual materials are assigned to the same fixed asset.

● If you want to assign a new individual material to another new individual material, the other individual materialmust be saved first and have its own ID.

It is possible to create up to 100 individual materials for one purchase order item.

Process FlowAsset procurement offers different variants:

Creation of New Individual Materials in the Purchase Order

1. In the purchase order, the buyer creates individual materials manually using New Individual Materials . In thiscase, it is mandatory to also post a goods and services receipt for this purchase order.

2. The system then creates a number of individual materials, depending on the ordered quantity.3. The buyer can then add an individual material description and assign an existing individual material as belongs

to-reference. This assignment is then checked and evaluated by Financial Management. The individualmaterial is assigned to the same fixed asset as the individual material that is used as belongs to-reference.

You order a new monitor for an existing desktop PC. Using the belongs to-reference, you assignthis monitor to the desktop PC. In Financial Management, the monitor is then assigned to the samefixed asset as the desktop PC.

Once the user saves the purchase order, the individual material ID is displayed.4. After the purchase order has been created, the accountant can manually create fixed assets related to the

new individual materials. Otherwise, the fixed assets are created automatically once the goods and servicesreceipt is posted based on a set of rules dependent on company, product category, and activation limit.The manual creation of fixed assets is typically used in more complex cases.

5. The buyer or the warehouse operator posts a goods and services receipt when the ordered goods have beendelivered. In many cases, inventory IDs are assigned to the received goods.

If you order a new monitor and a new desktop PC at the same time, you will assign the belongs-toreference when confirming the goods and services receipt.

6. If a fixed asset has been created automatically, a task is created for the accountant to check that the fixedasset has been created correctly as expected.

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Creation of New Individual Materials in a Goods and Services ReceiptIf individual materials have been created in a purchase order, they are displayed and can be updated in the goodsand services receipt that is created to confirm the delivery of the items ordered. If not, it is also possible toindividualize materials when the materials are delivered and the goods and services receipt is posted:

1. The buyer creates a goods and services receipt to confirm the delivery of items ordered. By clickingNew Individual Materials , the buyer triggers the creation of individual materials for the items confirmed in the

goods and services receipt.2. The system creates the individual material items. The number of the items created equals the delivered

quantity confirmed in the goods and services receipt, which is, by default, the ordered quantity of the purchaseorder item.

3. The buyer can then maintain an individual material description, an inventory ID, and assign the receivedindividual materials to another individual material. This assignment is then used by Financial Management tocreate fixed assets accordingly.

4. The fixed assets are created automatically once the goods and services receipt is posted.5. If a fixed asset has been created automatically, a task is created for the accountant to check that the fixed

asset has been created correctly as expected.

Creation of Individual Materials and Assets Before the Purchasing ProcessThis scenario is typically used in more complex business cases.

1. The accountant manually creates the required new fixed assets and the corresponding individual materialsafter alignment with the responsible buyer.

2. The buyer then creates purchase orders with an account assignment to these individual materials.3. The buyer or the warehouse operator posts a goods and services receipt when the ordered goods have been

delivered.

Inventory IDs may be assigned on the respective screen of the individual material that is used foraccount assignment.

4. The accountant enters the invoice and checks the account assignment before it is posted.

Asset Procurement Using a Supplier Invoice Without Purchase Order Reference

The accountant creates a supplier invoice without a purchase order reference.It is possible to assign the invoice items to existing individual materials or to create new individual materials. Fixedassets for these individual materials are created according to the maintained rules once the supplier invoice is posted.

The belongs-to reference is not supported in the supplier invoice. In the case that one fixed asset correspondsto several individual materials, the fixed asset and the individual materials have to be created manually andthe supplier invoice needs to be posted with an account assignment to these manually created individualmaterials.

2.4 Automation of Supplier Relationship Management

OverviewTo save you time in your day-to-day business operations, certain functions within the Supplier RelationshipManagement software in the solution can be automated. This automated functionality may require you to make

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selections during the configuration of your solution, or during fine-tuning, where you can define the relevant settings.The system makes decisions based on these predefined settings, and processes the relevant transactionsautomatically.

Automatic Purchase Order CreationIn the system, the default creation option is set to manually create purchase orders. This default creation option canbe changed if required. The rules can be defined either in fine-tuning or within the Purchase Requests and Orderswork center. You can choose one of the following settings for each product category:

● Create Purchase Order ManuallyThe buyer manually creates purchase orders from purchase requests.

● Create Purchase Order AutomaticallyWhen no source of supply is assigned to purchase requests, the buyer creates the purchase orders manually.When the source of supply is assigned, the system creates purchase orders automatically.

If a source of supply exists that is relevant to a purchase request, the system always automaticallyassigns that source of supply.

Source DeterminationWhen contracts are used to define purchasing relationships with suppliers, the system allows an automaticdetermination of the source based on the following criteria:

● Quota ArrangementYou define a quota number (share of requirements to be sourced); the system distributes the requirementin the ratio of assigned quota number across multiple sources of supply (multiple contracts for the product).The system will keep track of the quota-allocated quantity for each source of supply.The system decides on the allocation sequence by calculating a quota rating for each source of supply. Theallocations are done starting with the contract with the lowest value of quota rating.

● Fixed Source of SupplyYou can assign a contract as a fixed source of supply for a product. The system always selects this sourcefor all purchase requests.

If a quota arrangement also exists for a product, the fixed source of supply has higher priority as a source of supply,and the quota arrangement is then not used for source determination.For more information, see Source Determination.

Account Determination of Free-Text Purchase OrdersYou can define an account determination group for materials and services by each product category ID during thefine-tuning activity.The system will refer to this data and automatically assign an account determination group when purchase ordersare made for free-text items using the designated product category.For more information, see Define Tax Classification for Free-Text Items [page 119].

Evaluated Receipt SettlementsYour company may deal with a number of suppliers on a regular basis. In order to streamline the invoicing process,you can arrange to pay these suppliers using evaluated receipt settlements (ERS). This means that these suppliersdo not need to send you invoices; instead the system uses the prices in purchase orders and the quantities in goodsand services receipts to create and post invoices on behalf of the suppliers. The suppliers are then notified of thevalue of the invoice created on their behalf.

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Each ERS run creates invoices for all purchase orders that are marked for ERS. The assignment of purchase ordersto ERS is automatic when ERS is selected for that supplier. You can deselect ERS for a specific purchase order if youwant to exclude that purchase order from the scheduled ERS run.The system copies the invoicing data from the purchasing documents for which the invoice is required. The systemcreates invoices covering the values and quantities agreed upon with the supplier.For more information, see Quick Guide for Evaluated Receipt Settlements (in Supplier Invoicing) [page 251].

Recurring InvoicesFor certain invoicing processes, such as rent, leasing, or insurance, the same fixed amount needs to be invoicedmany times in defined periodic intervals. To streamline this process, recurring invoices supports your company increating such recurring invoices automatically and without receiving corresponding supplier invoices to trigger theinvoice creation.Automating such processes that involve recurring invoices not only increases the efficiency of the invoicing process,but also helps your company to increase overall productivity and save expenses in general. Recurring invoices notonly provides functions for data copying but also functions for data tracking that support your company in complyingwith financial control and audit mechanisms.

Invoices that are based on purchasing contracts or purchase orders, or invoices that require a defined approvalprocess, cannot be created using recurring invoices.

For more information, see Quick Guide for Recurring Invoices (in Supplier Invoicing) [page 263].

Using Interactive FormsThis automation enables your suppliers to respond electronically. The supplier uses the interactive form, for example,purchase order, to submit the response to you, as the buyer responsible. When the system receives this interactiveform file from the supplier, the system updates the relevant document with the confirmed data and changes thestatus. The interactive form update is available for:

● Purchase order acknowledgment ● Supplier quote ● Supplier invoice clarification

You must contact SAP to set up the technical requirements. The supplier with whom you wish to communicateby interactive form must have Adobe Reader™ or Adobe Acrobat™ installed.

Input and Output of Documents Using Electronic Data ExchangeThis automation allows you to accept documents electronically from your business partners with an enterpriseservice. Electronic data exchange (EDX) allows you to communicate with your business partners using XMLmessages.The message exchange between you and your business partners requires an initial configuration that has to beperformed individually for each business partner. SAP has to perform the required system settings. There may alsobe prerequisites for your business partner, depending on the type of documents you want to exchange.

Automatic Release of Purchase ProposalsIn the Supply Control work center in the Supply Chain Management part of the solution, purchase proposalsgenerated by planning are released by the system to create purchase requests in the Purchase Requests andOrders work center. The system achieves this by executing a mass data run at fixed time intervals to execute thisprocess.

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This automation is set up during configuration and can be deactivated or modified during fine tuning, or within theSupply Control work center. Multiple runs can be created for parameters such as Item, Resource, Product Category,and Planning Area.For more information, see Quick Guide for Automated Actions (in Supply Control).

See AlsoAutomatically Created Purchase Orders [page 87]SourcingException Handling [page 187]

2.5 Value-Added Tax Refunds to Domestic Entrepreneurs Abroad

OverviewUnder certain circumstances, domestic entrepreneurs who receive deliveries or other services abroad can claimrefunds for value-added tax (input tax) abroad that has been charged to them. This procedure is also known as theinput tax refund procedure.However, the German Federal Tax Office (Bundeszentralamt für Steuern - BZSt) is not responsible forreimbursement.Claims for VAT tax refunds must be submitted with all necessary documents to the authority in the country wherethe VAT was paid.Each authority abroad provides its own application form in its national language. To claim in the EU, you can alsouse Form USt 1 T(EG). This form follows the pattern of the Sixth Council Directive (77/388/EEC). However, somecountries require that forms in their national language are used.

Submitting a Claim for Value-Added Tax RefundTo determine the accumulated input tax abroad in the system, proceed as follows:

1. In the Reports view of the Tax Management work center, choose the Product Tax Items – Open report.2. In the Variable Entry, enter the period for which you require a list of accrued input tax abroad in the Tax Due

Date field and select OK.3. Then select Filter and enter the settings as described below:

1. In the dropdown list for Country, choose Edit.

2. In the dropdown list for Show tool: choose Value Ranges.

3. Choose the following settings and confirm your entries afterwards with Add and OK: ● Sign: Exclude

● Operator: equal

● From: for example, DE for Germany, if you and your company are located in Germany.

4. If required, you can also restrict the items to be displayed according to tax events relevant for input tax.To do this, choose Edit in the dropdown list for Tax Event Type, and restrict your report to tax eventsused for Purchasing.

5. You can calculate totals according to tax country to determine the input tax due per country.

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4. The system currently does not support the process of input tax refund. You can use the results of the reportto fill in the relevant form for the responsible tax authority.

Posting the Input Tax RefundInput tax abroad is posted in the system as follows:

1. The incoming invoice is posted against payables:EUR 19 Input Tax AbroadEUR 100 Gasoline netto EUR 119 Payables to Creditor Miller

2. Then the input tax is claimed from the tax authority abroad, and the bank account receives an incomingpayment that cannot be assigned at this stage:EUR 19 Bank to EUR 19 Payment Allocation

3. The Payment Allocation account must then be corrected manually, and the incoming payment is postedto Other Revenues:EUR 19 Payment Allocation to EUR 19 Other Revenues

4. The revenue account must then be cleared against the Input Tax Abroad account:EUR 19 Other Revenues to EUR 19 Input Tax Abroad

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2.6 Pricing in Supplier Relationship Management

OverviewPricing refers to the calculation of prices and total values, typically costs for products and services. Pricing is centrallyimplemented in SAP Business ByDesign and connected to all relevant business processes. For ease of use, allsettings necessary are predefined in the system.Pricing is available in all business documents related to the procurement process.The system provides you with several ways of defining simple or complex prices in catalogs, purchasing contracts,RFQs and quotes, purchase orders, and list prices, depending on your purchasing volume, the relevance of theproduct or service to your company’s success, and the importance of the relationship with suppliers. The systemalso enables you to define price conditions. These price conditions represent factors that apply when a price iscalculated, for example, discounts or surcharges, and so on. These variable factors influence the total value. Variousprice conditions can be combined.Pricing determines which requirements for a particular price condition must be fulfilled before the system takes theprice component into account. For example, freight is not considered for service items.Pricing contains the sequence in which the system takes price conditions into account. It calculates the gross andnet prices and taxes. Pricing determines which subtotals are considered and to what extent pricing can be processedmanually. Pricing also determines which method the system uses to calculate percent discounts and surcharges.

When documents from a legacy system are migrated to SAP Business ByDesign, the system performs noadditional price calculations. This ensures that prices are the same in both systems.

Price ConditionsThe system contains the following price conditions.

DiscountsA discount is a reduction in the price of a product charged by a supplier.The following discounts can be entered manually:

● Manual Discount (Value)You can decrease the price by an entered value.

● Manual Discount (Percent)You can decrease the price by an entered percent.

● Manual Discount (Value/Quantity)You can decrease the price by a quantity-dependent discount.

The following discounts can be automatically applied if you have an agreement with your suppliers: ● Discount (Value)

The price is decreased by a specified value. ● Discount (Percent)

The price is decreased by a specified percent. ● Discount (Value/Quantity)

The price is decreased by a quantity-dependent discount.

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SurchargesA surcharge is an additional fee charged for a specific product or purpose.The following surcharges can be entered manually:

● Manual Surcharge (Value)You can increase the price by an entered value.

● Manual Surcharge (Percent)You can increase the price by an entered percent.

● Manual Surcharge (Value/Quantity)You can increase the price by a quantity-dependent surcharge.

The following surcharges can be automatically applied if you have an agreement with your suppliers: ● Surcharge (Value)

The price is increased by a specified value. ● Surcharge (Percent.)

The price is increased by a specified percent. ● Surcharge (Val./Qty)

The price is increased by a quantity-dependent surcharge.

ScalesYou can define quantity-dependent discounts. The scale you define determines how values are calculated. Forexample, you define a price scale so that a single boiler costs 500 USD, but if you buy at least 10 boilers, the pricedecreases to USD 450 each.

Discounts, Surcharges, and Scales in PricesDepending on which price is used, the following discounts, surcharges, and scales can be defined:

● CatalogsYou can only upload and maintain supplier and custom catalogs in which net prices are available. You cannotcreate and maintain discounts, surcharges, and scales.

● Purchasing ContractYou can define all available discounts and surcharges, along with price scales.

● QuotesYou can define all available discounts and surcharges, along with price scales.

● Purchase OrdersYou can define value and percent discounts and surcharges.

● List PricesYou can define a price for a product delivered or a service rendered by a supplier with or without price scales.

Additional Price ConditionsRounding DifferencesRounding differences can occur depending on the number of decimal places that are maintained as price masterdata for the base quantity and the currency.Round differences also occur for currencies that do not have low denomination coins, for example, Swiss francs orAustralian dollars. For these currencies, the system rounds the price to the nearest available value, such as 0 centor 5 cents.To compensate for rounding differences, you can either:

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● Manually change the amount in the document, for example, in purchase orders. ● Maintain the price master data accordingly. This is the case for contracts and list prices. To compensate, you

can change the base quantity in the price master data for the product.

Peter creates a purchase order for an item that costs USD 0.008 each. The system rounds the price toUSD 0.1. To compensate for this inaccuracy, Peter changes the amount he orders to 100 pieces, resultingin a price of USD 0.80 per 100 pieces.

Currency Conversion DifferencesDuring the price calculation, currency conversion occurs if the currency of the price master data differs from thedocument currency, depending on the exchange rates maintained as master data. When currencies are converted,an inaccuracy can occur due to rounding in the price calculation.

Currency reconversion is only necessary for the approval of shopping carts.

An inaccuracy can also occur if the currency is converted back to the currency that is used in the source of supply.To compensate, the system checks if discounts or surcharges exist and applies the discount or surchargeaccordingly. If no discount or surcharge exists, the currency is not reconverted.

Peter creates a shopping cart with two items. The first item is priced in USD. The second item, taken froma contract, is priced at CNY 10. The currency of the first item listed in the document is the currency thesystem uses as the document currency. Since the document currency is USD, the system converts thecurrency of the second item at an exchange rate of 0.14608, resulting in a price of USD 1.4608. The systemrounds the price to USD 1.46.If the price of the second item is converted back to CNY, the result is CNY 9.99. The system thereforechecks if a surcharge exists. If a surcharge exists, the system applies the surcharge to the determinedresult accordingly. If no surcharge exists, the system does not convert the price, resulting in the originalprice of CNY 10.

Total Item Net ValueThis is calculated by adding all item net values. You cannot change this value.FreightThis price condition covers the amount charged to transport goods. For example, you are charged either a fixedfreight amount or freight is dependent on the net weight of the goods received. The system distributes freight coststo supplier invoice items. The distribution is proportional to the net values of the supplier invoice items.The following freight charges can be entered manually:

● Manual Freight (Percent)You can increase the price by an entered percent for freight charges.

● Manual Freight (Value/Quantity)You can increase the price by quantity-dependent freight charges.

InsuranceThis price condition covers the amount charged for insurance or for protection against any possible damage oruntoward incident.The following insurance charges can be applied:

● Insurance (Percent)You can increase the price by an entered percent for insurance charges.

● Insurance (Value)

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You can increase the price by an entered value for insurance charges.

Customs DutyThis price condition covers the amount charged as a part of customs, that is, the tax imposed on export or importof goods.The following customs duty charges can be applied manually:

● Manual Customs Duty (Percent)You can increase the price by an entered percent for customs duty.

● Manual Customs Duty (Value)You can increase the price by an entered value for customs duty.

Handling ChargesThis price condition covers the handling charges for goods. You can apply the following handling charges:

● Handling (Value)You can increase the price by an entered value for handling charges.

Packaging (Value/Quantity)This price condition covers the packaging charges for goods. You can apply the following packaging charges:

● Packaging (Value/Quantity)You can increase the price by quantity-dependent packaging charges.

TaxThis price condition covers requirements in regard to taxation. All taxes are calculated according to legalrequirements.For more information, see

● Calculation of Tax Abroad for Services ● Tax Determination [page 152] ● Withholding Tax Determination [page 172]

Price Calculation SchemaTo determine which price is to be used if several prices are available, the system follows a defined sequence. Pricesare listed in ascending priority.

● Historical PriceA historical price is the past price used in a purchase order. You use historical prices for occasional purchases.

● Catalog PriceYou use catalog prices for items that employees frequently purchase in self-service scenarios without creatingmaster data for the products.

● List PriceYou use list prices, for example, when there is no catalog or contract available from a supplier, for productswith medium purchasing relevance (no contract) but high purchasing frequency. With list prices, you canautomate your purchasing process.

● Contract PricePurchasing contracts are created for products and product categories that are frequently purchased fromsuppliers with whom a long-term relationship is anticipated.

● Manual Price/Manual Supplier PriceA manual price is the price that you enter in a procurement document. You often use manual prices when youhave recently received a price from your supplier that differs from previous prices.A manual supplier price is entered by the supplier.

Although the system determines the price, you can also override the proposal determined by the system.

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Susan creates a purchase order for an available product. The list price is the most suitable price, and thesystem uses the supplier from the list price as the source of supply. If a contract price or a manual priceis available, Susan can override the system and use the supplier from the contract or enter a manual priceand the corresponding supplier as the source of supply.

Which Prices Are Available for Which Document Type?The prices that are available depend on the document type you want to create.Shopping Cart

● Catalog Price ● List Price ● Manual Price

Purchase Request ● Historical Price ● Catalog Price ● Contract Price ● Manual Price ● Manual Supplier Price

Purchase Order ● Historical Price ● Catalog Price ● Contract Price ● Manual Price ● Manual Supplier Price

Manual supplier prices are only used in purchase order confirmations.

Goods and Services Receipt ● List Price ● Contract Price ● Manual Supplier Price

Supplier Invoice ● List Price

List prices are used for supplier invoice verifications that can result in a price exception. ● Contract Price

Contract prices are used for supplier invoice verifications that can result in a price exception.

2.7 Account Assignment in Purchasing

OverviewWhen you create a shopping cart, purchase order, goods and services receipt, or supplier invoice for non-stockmaterials, services, or expenses, you have to enter an account assignment on which the incurred costs for thebusiness transaction are collected. The account assignment specified is then inherited into the follow-up documents.

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Prerequisites ● When you want to use sales order items, service order items, or projects as account assignment objects, the

relevant business area elements must be selected during scoping. ● To select either a sales order item or a service order item as an account assignment type, the relevant order

must be released in the system.

Account Assignment TypesIn general, the following account assignment types are possible:

● Cost center ● Customer contract ● Individual material

Only material, service, or limit items of purchase orders, goods and services receipts, and supplier invoicescan be assigned to individual materials. The system then posts the assigned item to the fixed asset that isassigned to the individual material. Purchase order items and goods and services receipt items can only beposted to existing individual materials.For more information, see Individual Materials and Acquisitions.For supplier invoices, you can also create a new record if there is no record of the individual material in yoursystem. When a new individual material is created, a new fixed asset may be created automatically in theFixed Assets work center.

● Projects taskDifferent project types can be used, for example, development projects, events, or internal cost collecting.

● Sales order itemOnly advanced shopping carts, purchase orders, goods and services receipts, and supplier invoices can beassigned to sales order items.

● Service order itemOnly advanced shopping carts, purchase orders, goods and services receipts, and supplier invoices can beassigned to service order items.

SAP Business ByDesign provides several reports to analyze the allocation of costs, for example: ● Purchase Orders per Account Assignment [page 113] ● Purchase Requests per Account Assignment [page 115] ● Spend per Account Assignment

Approval ProcessThe person responsible for the cost object (for example, the project manager or cost center manager) has to approvethe shopping carts assigned to this cost object (and not the line manager of the requester).Depending on the settings in business configuration, either the line manager or the person responsible for the costobject is responsible for the approval of purchase orders.

Examples

Project TaskAkron Heating Technologies Inc. sets up a new project to manage an upcoming customer event. For monitoringreasons, all the related costs should be assigned directly to this project. When Peter Greene, the buyer for Akron,

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orders the catering service for the event, he creates a purchase order and chooses the project task for the accountassignment.

Sales OrderAkron Heating Technologies Inc. sells heating parts to its customer, Lyon Heating Inc. Kate Jacob creates a salesorder for the heating parts. Akron, however, does not have the relevant expertise or qualified personnel to fit theparts. Kate contacts and employs an external service provider to carry out the installation and includes this work inthe sales order. Peter Greene, the buyer for Akron, creates a purchase order for the external service provider’s workand chooses the relevant sales order item for the account assignment.

Service OrderAkron sold a heating system earlier in the year to Lyon Heating Inc. The customer has reported a mechanical failureand has requested it be fixed. Jeffrey Goldman creates a service order for the repair service. Akron does not haveany service engineers within the customer’s immediate area with the necessary skills to repair the fault, so Jeffreyorders an external service provider to carry out the necessary work and includes this work in the service order. Petercreates a purchase order for the external service provider’s work and chooses the relevant service order item forthe account assignment.

2.8 Intercompany Project Time and Expenses

OverviewIntercompany Project Time and Expenses allows partner companies that belong to the same corporate group andthat are technically working in the same SAP Business ByDesign system to efficiently work together on projects.In the Professional Services industry, a company that runs a project for a customer or internally might not have thecapacity to staff the project solely with its own employees. A partner company, however, might be able to providethe required employees. If so, the company who owns the project (buying company) orders the required servicesfrom the partner company (selling company), which automatically creates a sales order and intercompany project.The employees of the selling company, with whom the customer project in the buying company is staffed, recordtheir time and report their expenses directly on the project in the buying company. In addition, these times andexpenses are automatically assigned to the intercompany project in the selling company, and goods and servicesreceipts are automatically created in the buying company. Invoicing processes are then automatically triggeredbetween the two companies.Using standard sales, purchasing, and invoicing processes, but hiding company boundaries to employees when itcomes to time recording and expense reporting, Intercompany Project Time and Expenses enables companies toefficiently run projects that are staffed with employees from multiple partner companies.

PrerequisitesThe buying company and the selling company work in the same SAP Business ByDesign system and have beenentered as a customer and supplier in the respective system. The sales data for the required services has also beenentered.To ensure correct processing of sales orders, the selling company should create a separate sales org forintercompany sales to store the intercompany-specific sales prices and to default all its services as time and materialproject-based services. The intercompany sales prices should be aligned with the intercompany purchase prices.Configuration Settings

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Configuration settings are usually performed by an administrator. If you do not have the requiredauthorization, contact your administrator.

The following functions must be enabled in your solution. To find these business options, go to the BusinessConfiguration work center and select your implementation project. Select Edit Project Scope , then select the relevantbusiness area and select the checkbox for each of the business topics:

● Sales Sell Project-Based Products and Services ● Purchasing Non-Stock Material and Service Procurement ● Purchasing Purchasing of Services Between Partner Companies

Process Flow

Intercompany Project Time and Expenses

1. Customer Sellinga. The buying company creates a customer project that is partially or fully staffed with employees from the

selling company. Alternatively, the buying company can run an internal project. In both cases the projectsare released by the buying company.

b. The buying company orders time-based services from the selling company.c. In the buying company, the sales representative creates a sales order for a customer and sets a link to

the customer project on item level.

This step is not relevant for internal projects.

2. Intercompany Ordering and Sellinga. The operational buyer prepares a consistent purchase order containing services and expenses for the

project in the buying company.

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An expense limit item must be entered manually in the purchase order to enable expenses to bereported. This is done by selecting a Limit item (not an Expense item) and by then adding anexpense product to it. Ideally, one expense limit item should be created per project. In addition,the Time Recording Required indicator is set in the purchase order automatically or has to be setmanually (if the purchase order is created manually).

The purchase order can be created automatically from a purchase request based on a project or manuallyby the buyer after he and the project lead have agreed on which services need to be procured. For moreinformation, see Purchase Order Processing [page 77].Using electronic data exchange (EDX), the buying company sends the purchase order to the sellingcompany.

b. In the selling company the system automatically creates a sales order via B2B (Business to Business)communication. This sales order ● Is linked to an intercompany project. ● Has an invoice schedule. This is triggered over the fine-tuning activity Invoice Schedule Template

for Intercompany Sales Orders.

In exceptional cases the sales order has to be reworked manually and the intercompany projectgeneration has also to be triggered manually. This is the case for example, if an item has a fixedprice instead of a time and material item type. Then the item type must be changed to time andmaterial and the intercompany project must generated manually by clicking Create Project in thesales order.

If a line manager of the relevant sales unit is not available, the employee responsible for the salesorder is automatically assigned as project manager. This step ensures that the sales order isreleased and a project is created.

3. Intercompany Time Recording and Expense Reportinga. Employees of the selling company can record times directly on the project task of the buying company

in the Employee Self-Service time sheet. The purchase order item, including service and task, is availablefor time recording purposes in the employee's time sheet. When the project times are released, they areautomatically sent for approval, if approval is required. For more information, see Edit Time Sheet.

b. Employees of the selling company can report expenses directly on the project task of the buying companyin the Employee Self-Service. All project tasks to which the employee is assigned directly or indirectlyare automatically available for selection. When a project task of the buying company is selected, thesystem immediately finds the corresponding intercompany project, purchase order, and purchase orderitem and displays these for information purposes. For more information, see Create New ExpenseReport.

c. The project manager in the buying company approves the recorded times and the expense report.

In case a purchase order contains more than one expense limit item and thus there is more thanone sales order item with an expense product, the system proposes one of the sales order items.

d. Based on the recorded times and the expenses reported, the system creates goods and services receipts,which include the accounting information specified in the recorded times and expense reports as wellas a reference to the corresponding purchase order and project task.

4. Customer and Intercompany Invoicinga. By using the goods and services receipts, the buying company can create project invoice requests. For

more information, see Project Invoicing.

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This step is not relevant if internal projects are run.

b. The employees of the buying company create an invoice run that processes the project invoice requestsinto invoices and activates it. After this, they schedule the invoice run to create customer invoices. Formore information, see Invoice Runs Quick Guide.

This step is not relevant if internal projects are used in step 1a.

c. The system creates project invoice requests according to the invoice schedule of the sales order itemsfor intercompany time and expenses. The project invoice requests are automatically released so thatcustomer invoice requests are then created in the Customer Invoicing work center. These customerinvoice requests are invoiced automatically by the system and the invoices are released automatically.For more information, see Invoice Schedule.

d. In the buying company, the system creates a supplier invoice based on the data sent by the sellingcompany, verifies the data against the goods and services receipt items, and posts the supplier invoiceif there are no exceptions. The accounts payable accountant can view the posted supplier invoice in theInvoices and Credit Memos view of the Supplier Invoicing work center.If there are any exceptions, the system saves the invoice in the Work view of the Supplier Invoicing workcenter. The accountant clarifies the exceptions and posts the invoice manually.For more information, see Quick Guide for Work (in Supplier Invoicing) [page 182].

5. Accountinga. Selling company: Postings are the same as with customer projects. Time recordings credit the cost

center and debit the sales order item as the primary cost assignment object; the secondary costassignment object is the intercompany project. Travel expenses debit a liabilities account and theintercompany project.The customer invoice is posted to receivables, while the revenue is posted to a sales revenue account.Like for costs, for revenues the primary revenue assignment object is the sales order item, while thesecondary revenue assignment object is the intercompany project.For more information, see Customer Projects.

b. Buying company: For internal projects, costs are posted to the project. For customer projects they areposted to the sales order/project combination.Expenses for services are posted to the expense account and to the clearing account UnbilledPayables.If the project is a customer project, the customer invoice posts to receivables, and revenues are postedto the revenues account. The account assignment object is the sales order/project combination.Supplier invoices are posted to the payables account and to the clearing account Purchases in Transit.The account assignment object is the project.When the services are confirmed and the supplier invoice recorded in the system, the clearing accountsmust be cleared against each other with a GR/IR clearing run. For more information and a postingexample, see GR/IR Clearing.

If a company and its subsidiaries are treated as a single company for tax reporting purposes, taxesare reported only by the leading (reporting) company in the group. The balances of the subsidiary’sVAT / Sales Tax and Input Tax accounts are transferred to the reporting company's TaxReceivables and Tax Payables accounts. The balances of the reporting company’s VAT / SalesTax and Input Tax accounts are transferred to the Tax Payable account.For more information and a posting example, see Tax Reporting Group.

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See AlsoIntercompany Processes in SAP Business ByDesignIntercompany Project Time and Expenses (Business Scenario)

2.9 Intercompany Stock Transfer

OverviewYou can use intercompany stock transfer to transfer stock to or from partner companies in order to fulfillrequirements from your customers. When ordered products are not in stock at the receiving company, they can beordered from the sending partner company. Whenever possible, SAP Business ByDesign supports and acceleratesthis process by automating the creation of the business documents involved.This scenario is also supported in a third-party logistics scenario. That is, one of the warehouses — the sending orthe receiving warehouse — may not be managed by the partner company themselves but by a warehouse provider.This document also provides an example of the process flow if the sending and/or receiving partner company hasoutsourced their warehousing activities to a warehouse provider.

This process supports materials bundled together into kits.If you use kits in your sales processes, please note that the sales kits are now called kits in SAP BusinessByDesign system.

PrerequisitesYou need to have a minimum of two partner companies in order to do intercompany stock transfers. Both companiesmust use the same SAP Business ByDesign system and must have transport lanes from the ship-from site to atransport zone to which the recipient belongs.During the organizational management set-up, both partner companies must be created. For each company, acorresponding business partner with the roles Account and Supplier is created automatically by the system.The following settings must be made if you want to use intercompany stock transfer:

● Scoping:During scoping, you have to select the Purchasing Between Partner Companies business topic.This activates all scoping prerequisites for the automatic exchange of the related business documents.

● Master Data: ○ In the product master, the Purchasing tab page and the Sales tab page must be activated. ○ To avoid exceptions during the supplier invoicing process, for example, price deviations, prices and other

conditions (for example, cash discounts) should be maintained equally for both companies. ● Master Data for Sales Orders:

In order to enable the creation of a sales order using an A2A message, the following data and responsibilitiesmust be maintained:1. Define an “Employee Responsible – Sales” as contact for the corporate account in the Account

Management work center, in the Accounts view, on the Contacts tab page, in the Responsibilities section.2. Define the relevant master data for the account in the Account Management work center, in the

Accounts view, on the Sales Data tab page. Assign the relevant distribution chain (sales organization and

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distribution channel) to the account and maintain the sales data such as currency, payment terms,delivery terms, and delivery priority for this account.For more information, see Accounts Quick Guide.

3. Define the relevant master data for the product in the Product and Service Portfolio work center orProduct Data work center, in the Products view, on the Sales tab page. Assign the relevant distributionchain (sales organization and distribution channel) to the product and maintain the sales data such asUoM for this product.

4. Ensure that the work distribution for sales is maintained correctly in the Organizational Managementwork center, in the Work Distribution view, under Sales and Marketing.

● Communication channel:Within the Intercompany Stock Transfer scenario, the output channel Internal EDX must be set for thefollowing business documents in the Business Partner Data work center, on the Communication tab page,under Collaboration: ○ For the supplier automatically created for the sending company in the Suppliers view:

○ Purchase Order ○ For the account automatically created for the receiving company in the Accounts view:

○ Sales Order Confirmation ○ Advanced Shipping Notification Outbound ○ Customer Invoice/Credit Memo

● This document also contains information on the process flow if the sending and/or receiving partner companyworks with a warehouse provider.

The use of the Third-Party Logistics scenario is subject to the licensing of a warehouse providercommunication add-on via the SAP Store. Note that the licensing of the warehouse providercommunication add-on may be subject to additional fees.

Process Flow

The process flow associated with intercompany stock transfer is outlined below:1. Receiving company: The purchaser of the receiving company creates a purchase order for the required

products in the Purchase Requests and Orders work center and sends it to the sending company.

The sending company is identified using the corresponding business partner of type supplier.

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For more information, see Purchase Orders Quick Guide [page 71].2. Sending company: Based on this purchase order, a sales order is created automatically at the sending

company. For this sales order, an Available-to-Promise (ATP) check is done automatically by the system tocheck whether the required quantities can be provided in the requested delivery time.

3. Sending company: If sales orders are configured for automatic release, the system releases the sales orderand automatically sends a sales order confirmation to the receiving company once the sales order has beencreated consistently with the same price as requested by the purchase order. Otherwise, the salesrepresentative has to release the sales order manually and must trigger an order confirmation. Acorresponding purchase order confirmation is then created automatically.For more information, see Sales Order Processing.

4. Sending company: In the Outbound Logistics Control work center, in the Customer Demand view, the supplyplanner of the sending company releases the corresponding customer demand. The supply planner checksthat the orders are fulfilled according to their priority. A delivery proposal is then created automatically.For more information, see Customer Demand Quick Guide.

5. Sending company: This step depends on whether the sending partner company runs an internal warehouseor whether they have outsourced their warehousing activities to a warehouse provider. ● Internally-Managed Warehouse

In the Outbound Logistics work center, in the Delivery Control view, in the Delivery Proposals work list,the warehouse manager checks the delivery proposal and posts a goods issue using the Post GoodsIssue button. This results in the automatic creation of an outbound delivery.For more information, see Delivery Control Quick Guide.The outbound delivery can be displayed in the Outbound Logistics work center in the OutboundDeliveries view

If items are in transit, so that there is a time difference between the posting of the goods issue andthe goods receipt, they are not visible in the inventory of either the sending or the receivingcompany.To check the deliveries in intercompany transit, use the Intercompany In-Transit Deliveries taskunder Common Tasks. These intercompany in-transit deliveries are based on the intercompanystock transfer information.For more information, see Inventory Postings.

Proceed with step 6. ● Externally-Managed Warehouse

a. Processing the delivery proposals and creating 3PL requests:In the Third-Party Logistics work center, in the Delivery Proposals subview, the supply chain managerchecks the delivery proposals and creates the 3PL requests — if they are not created automaticallyin an automated run. This information is sent to the warehouse provider by means of B2B message.

b. Receiving the outbound delivery information:Once the warehouse provider has processed the delivery request and sent the goods to the receivingpartner company, they send the outbound delivery information by means of a B2B message to thesending partner company. The supply chain manager can check the outbound delivery in theOutbound Deliveries subview of the Third-Party Logistics work center.

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If items are in transit, so that there is a time difference between the posting of the goods issue andthe goods receipt, they are not visible in the inventory of either the sending or the receivingcompany.To check the deliveries in intercompany transit, use the Intercompany In-Transit Deliveries taskunder Common Tasks. These intercompany in-transit deliveries are based on the intercompanystock transfer information.For more information, see Inventory Postings.

Proceed with step 6.6. Receiving company: When the outbound delivery is released, the receiving company automatically gets an

advanced shipping notification in the form of an inbound delivery notification. How to proceed now dependson whether the receiving partner company runs an internal warehouse or whether they have outsourced theirwarehousing activities to a warehouse provider. ● Internally-Managed Warehouse

The warehouse manager of the receiving company checks the inbound delivery notification in theInbound Logistics work center, in the Inbound Delivery Notifications view. The warehouse manager canthen directly post a goods receipt using the Post Goods Receipt button in this view.Note that the option of posting the goods receipt in the Purchase Orders view is set to inactive for thisscenario to avoid the possibility of double-posting the goods receipt. That is, for the intercompany stocktransfer process, the warehouse manager of the receiving company must always post the goods receiptin the Inbound Delivery Notifications view.For more information, see Inbound Deliveries Quick Guide.

If the address of the receiving company is not the same as the address of the account thatordered the goods and if your communication channels have been configured accordingly, thesystem sends two advanced shipping notifications; one to the party who physically receivesthe goods (ship-to party) and one to the party who ordered the goods (account).

Proceed with step 7. ● Externally-Managed Warehouse

The supply chain manager of the receiving company can monitor the inbound delivery notification in theThird-Party Logistics work center, in the Inbound Delivery Notifications subview. This inbound deliverynotification is also sent to the warehouse provider automatically by means of B2B message to informthem of the expected receipt.Once the warehouse provider has received the goods and processed the delivery, they send the inbounddelivery information to the receiving company by means of a B2B message which triggers the creationof an inbound delivery. This document contains a reference to the inbound delivery notification. Thesupply chain manager can then check the inbound delivery in the Inbound Deliveries subview of the Third-Party Logistics work center.On receipt of the B2B message, the system releases the inbound delivery according to the default systemsettings as long as the data is consistent. Should inconsistencies exist, it is created with the status NotReleased.Proceed with step 7.

7. Sending company: When the sales order has been fulfilled, the sales representative at the sending companyopens the Invoice Requests view of the Customer Invoicing work center, selects the relevant items and createsthe invoice using the Follow-Up button. The customer invoice is then sent to the receiving company and thecustomer invoice data is forwarded to accounting for the receiving of payments. The data is visible in theJournal Entries view of the General Ledger work center.For more information, see Quick Guide for Invoice Requests.

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During this whole process, you can always review the order fulfillment status of the sales order. If youwant to check the order fulfillment status, open the relevant order in the Sales Order work center andcheck the document flow that shows all documents created.

8. Receiving company: When the customer invoice is posted, the supplier invoice is posted automatically in thereceiving company and can be checked in the Supplier Invoicing work center, in the Invoices and CreditMemos view. The system sends the information to financial management, which you can see as journal entriesin the General Ledger work center.

9. Receiving company: The payment amount is then communicated to Financials to trigger the paymentprocess. For more information about payment processes, see Internally-Initiated Automatic OutgoingPayments and Internal-Initiated Manual Outgoing Payments.

2.10 Third-Party Order Processing

OverviewYou, as supply planner, sales representative, or buyer working as the third-party order processing coordinator ofyour company, can use third-party order processing to coordinate and monitor the direct shipment of a product toyour customer by a supplier rather than your own company.The following is an example of a typical process flow based on the business scenarios Order-to-Cash and Procure-to-Pay (Stock). Your company sells a product to a customer. However, you do not supply the product to the customeryourself. Instead you order it from a supplier and instruct this supplier to send it to the customer's address. Thesupplier then invoices your company accordingly. Based on the shipment information from your supplier, yourcompany, in turn, invoices the customer. Variants of this process flow are possible.For more information, see business scenarios:

● Order-to-Cash (Third-Party Order Processing — Material) ● Order-to-Cash (Sell-from-Stock) ● Procure-to-Pay (Stock)

This process supports materials bundled together into kits.If you use kits in your sales processes, please note that the sales kits are now called kits in SAP BusinessByDesign system.

Prerequisites

Configuration Settings

Configuration settings are usually performed by an administrator. If you do not have the requiredauthorization, contact your administrator.

Third-Party Order Processing is enabled in your solution configuration. To find this business option, go to theBusiness Configuration work center and choose the Implementation Projects view. Select your implementationproject and click Edit Project Scope .For this example business process, the settings for the business scenarios Order-to-Cash and Procure-to-Pay(Stock) have been made.Additionally, for Third-Party Order Processing, the following has been defined:

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In Scoping, these business topics must be activated in the following sequence: ● The Sell Standard Products business topic in the Product and Service Portfolio for Sales business package ● The Sales Orders business topic in the Selling Products and Services business package ● The Third-Party Procurement business topic in the Purchase Request and Order Management business

package ● In the Purchase Requests business topic of the Purchase Request and Order Management business package,

the scoping question Do you want purchase orders to be created automatically from purchase requests? hasbeen answered with Yes.

If your company does not keep products in stock but always deliver them directly from your suppliers, you have todeselect the Shipping business topic in the Outbound Logistics business package. This business topic is automaticallyselected when the Sell Standard Products and Sales Orders business topics are selected.The following master data settings are fulfilled:

● In the product master, the product is defined as a product to be purchased and sold, which means that boththe status of the Purchasing tab and the status of the sales organizations in the Sales tab are set to Active.This is done in the Materials view of the Product Data work center.

● A purchasing contract or list price for one or more suppliers from which the product can be delivered hasbeen created in the Sourcing and Contracting work center.

● The product is assigned to a product category for which automatic purchase order creation is activated. Inthis case, the purchase order is created automatically when the sales order is submitted. This is done in thePurchase Requests and Orders work center (Define Automatic Creation of Purchase Orders common task).

You can also configure the solution to post third-party direct shipment documents to inventory inFinancials. To find the business option to configure this, select your implementation project and click

Edit Project Scope . In the Scoping step of the project, ensure that Inventory Valuation is selected withinFinancial and Management Accounting. In the Questions step, expand the Inventory Valuation scoping elementand select Valuation of Purchases and Material Movements. Under Group: Valuation of Purchases and MaterialMovements, select and answer the question for the Activation of Inventory Postings for Third-Party DirectShipment business option.

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Process Flow

Third-Party Order Processing

1. Creating the Sales OrderIn the Sales Orders view of the Sales Orders work center, the sales representative creates a sales order foran account and enters an item for a product.The system: ● Carries out sourcing to determine a source. For the purposes of this scenario, this product can be

supplied only by a supplier. Therefore, the system sets the Fulfillment indicator to External andautomatically proposes a supplier.The sales representative can change the supplier by assigning a new source of supply.For more information, see Sales Orders Quick Guide.

● Triggers an availability check which is based on the supplier lead time. If you have a purchasing contractwith the supplier, the supplier lead time is taken from this contract. Otherwise, the supplier lead time istaken from the product master where it could be defined supplier specific.For example, if the confirmed delivery date is later than the requested delivery date because of thesupplier lead time, a yellow ATP traffic light is displayed. The requested quantity is either confirmed atthe requested delivery date or at a later date depending on the supplier lead time.For more information, see Availability Checking in Third-Party Order Processing Scenarios.

● Requests a product valuation to determine the purchasing price specific to the supplier and to calculatethe profit margin of the sales order.For more information, see Profit Margin.

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2. Creating the Purchase OrderThe sales representative saves and releases the sales order and sends an order confirmation to the customer.Depending on the output settings, he or she uses e-mail, fax or print to do so or a B2B message is sent to thecustomer automatically.The system: ● Sets both the status of the sales order and the delivery status in the sales order to In Process. ● Creates a customer demand with the delivery type Third-Party in the Customer Demand view of the

Outbound Logistics Control work center. The release status of the customer demand is set to Releasedand the delivery status to Not Started.After you have released the sales order, you can no longer change the supplier in the sales order.For more Information, see Customer Demand Quick Guide.

● Creates a purchase request and a purchase order in the Purchase Requests and Orders work center asfor the purpose of this scenario the automated purchase order creation has been defined.The purchase order has the process type Third-Party. The status of this purchase order is set to Sent,meaning that the supplier has been informed.For more information, see Purchase Orders Quick Guide [page 71].

● Displays the purchase order of the process type Third-Party in the Monitor Purchase Orders view of theSupply Control work center. Here, the supply planner can monitor the progress of the purchase orderfrom a planning and logistics perspective.For more information, see Quick Guide for Monitor Purchase Orders.

3. Receiving the Supplier ConfirmationOnce the supplier has replied to the purchase order, the buyer creates a purchase order acknowledgementto record the delivery quantity and the delivery date confirmed by the supplier. This is done in the PurchaseOrders view of the Purchase Requests and Orders work center.For more information, see Create a Purchase Order Acknowledgement [page 101].The system: ● Changes the status of the purchase order from Sent to Acknowledgment Received. ● Updates the customer demand with schedule lines containing the quantities and delivery dates based

on the confirmation of the supplier. ● Creates a third-party purchase order in the Third-Party Purchase Orders view of the Third-Party Order

Fulfillment work center. This third-party purchase order has the status Ordered.4. Receiving the Delivery Acknowledgement

Once the supplier has shipped the product to the customer and sent you a copy of the delivery note, the buyeror the sales representative records it by going to the Third-Party Purchase Orders view of the Third-PartyOrder Fulfillment work center and creating the third-party delivery notification.For more information, see Quick Guide for Third-Party Purchase Orders .The buyer or the sales representative saves and releases the third-party delivery notification.The system: ● Creates a third-party inbound delivery with the status Released. ● Creates a third-party outbound delivery with the status Released. ● Creates a goods and activity confirmation based on the information in the third-party outbound delivery.

This confirmation is sent to financial accounting. Based on this outbound delivery, the system createsthe outbound delivery invoice request. This is visible in the Invoice Requests view of the CustomerInvoicing work center with the status To Be Invoiced.For more information, see Quick Guide for Invoice Requests.

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If you have selected the option of posting third-party direct shipment documents to inventory inthe solution, the goods and activity confirmation is posted to Financials with two additional itemsfor inventory that represents the third-party outbound and inbound deliveries.

● Updates the total goods receipt quantity in the purchase order. The items appear in the PurchasingDocument Items view of the Inventory Valuation work center.For more information, see Purchasing Document Items Quick Guide.

● Changes the purchase order status to Follow-up Document Created and the delivery status to CompletelyDelivered and updates it with the total delivery quantity

● Updates the final delivery date in the sales order. The items appear in the Sales Document Items view ofthe Cost and Revenue work center.For more information, see Sales Document Items Quick Guide.

● Changes the delivery status in the sales order to Finished and updates the quantity delivered. The overallstatus of the sales order remains In Process.

● Changes the delivery status of the customer demand to Finished. ● Updates the schedule lines of the customer demand with the fulfilled quantities and the shipment date. ● Informs supplier invoicing that an invoice for the purchase order can be verified.

5. Receiving the Supplier InvoiceOnce the supplier has sent you the invoice, the accountant creates and posts a new supplier invoice withreference to the third-party purchase order in the Invoice Entry view of the Supplier Invoicing work center.For more information, see Create an Invoice or Credit Memo with Reference to Preceding Documents[page 212].The system: ● Saves the document in the Invoices and Credit Memos view of the Supplier Invoicing work center.

For more information, see Quick Guide for Invoices and Credit Memos (in Supplier Invoicing)[page 239].

● Forwards the details of the transaction to the general ledger.The system creates a journal entry for the supplier invoice, posts the supplier invoice as payables in thegeneral ledger, and releases the invoice for payment.For more information, see Journal Entries Quick Guide.

● Updates the purchase order status to Finished and sets the invoice completed status to Invoiced.6. Creating the Customer Invoice

Based on the outbound delivery invoice request, the accountant creates and releases the customer invoicein the Invoice Requests view of the Customer Invoicing work center. Or, the accountant waits until the nextscheduled invoice run when the system automatically processes the invoice requests and creates andreleases the invoice.For more information, see Quick Guide for Invoice Requests.The system: ● The system creates a journal entry for the customer invoice and posts the customer invoice as revenues

and receivables as journal entry in the general ledger. In addition, it creates an open item in the customeraccount. When the payment is received, this open item is cleared. The payment is posted as a cashreceipt in the general ledger.

● Updates the sales order item invoice status to Finished . If no other items exist, the system sets the salesorder status to Completed.

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2.11 Intracompany Stock Transfer – India

This document contains text that is relevant for India only. To ensure that the system displays the correcttext, select Personalize My Settings . Select Onscreen Help and, under Country, choose India. Saveyour settings and logout to ensure these changes are made.

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3 Self-Services - Shopping

3.1 Business Background

3.1.1 Shopping Cart Processing

OverviewIn self-service processes, employees can use shopping carts to purchase non-stock materials and services. Theycan create and track shopping carts for themselves, on behalf of other employees or for projects.They can select the products that they want to order from catalogs, from lists of previously ordered items or itemsrecommended by the system. If the required products are not available, they can also manually enter descriptionsof these products so that their purchasing department can try and find a supplier for them.

Product validation for catalogs is possible in shopping carts. It ensures that if an item is copied from an oldshopping cart to a new shopping cart, and that item was originally selected from a catalog, the system validatesthe item against the existing catalog. This means, if the catalog has since been updated and, for example, theitem is no longer contained in the catalog, you get a message advising that the product is no longer available.If the price of the item has changed, the system updates the price in the shopping cart automatically.

The costs for the ordered materials or services can be assigned, for example, to a cost center, project, sales orderor service order item.Depending on the total net value and other conditions, which can be configured in Application and UserManagement, the shopping cart is sent for approval and then transferred into purchase requests for the purchasingdepartment. Once the materials have been delivered or the services have been completed, the employees canconfirm them using goods and services receipts. If the wrong materials have been delivered or the delivered materialare damaged, they can send them back using goods returns.

PrerequisitesConfiguration Settings

Configuration settings are usually performed by an administrator. If you do not have the requiredauthorization, contact your administrator.

The following must be selected during scoping: ● Self-Service Procurement business package, plus the following business options:

○ Meta Search Including Previous Shopping Carts ○ Decentralized Goods and Services Receipts ○ Recommended Shopping Cart Items ○ Shopping Cart Approvals

● Non-Stock Material and Service Procurement business topic

The following activities must be selected during fine tuning:

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● Shopping Cart Approvals ● Business Task Management for Self-Service Procurement ● Parameters for External Catalogs must be activated if you want to use product validation for catalogs.

IntegrationShopping cart processing is integrated with the following:

● Incoming processes related to documents that lead to the manual creation of shopping carts: ○ Internal request processing for quick or detailed confirmation of deliveries ordered through self-service

procurement and shopping carts. ○ Time and labor management processing, which allows you to manage service agents’ work time through

time recording, and optionally, approve and evaluate this time data. Time data can be used for projectsor purchasing to track or confirm the work performed by service agents.

● Outgoing processes that lead to the update or completion of follow-up documents, and completion orcancellation of shopping carts: ○ Purchase request processing, which allows you to create, process, and track all purchase requests and

related documents, such as purchase orders. ○ Purchase order processing, which allows you to create, process, and track all purchase orders and

related documents, such as purchase order acknowledgments. ○ Project processing, which allows you to have a particular overview of project expenses for all materials,

services, and related expenses, the costs of which are assigned to the project. ○ Goods and services receipt processing, which allows you to create, maintain, and cancel goods and

services receipts to track the delivery of materials and the completion of services. ○ Supplier invoice processing, which enables you to verify all invoices entered into the system and compare

them to their corresponding purchase orders and goods and services receipts.

Process Flow1. An employee creates a shopping cart for himself or herself, on behalf of a colleague or for a project. The

employee selects the required products from a catalog, a list of previously ordered items or recommendeditems or enters them manually to the shopping cart.

If the exact details of the required materials or services are not defined yet, the employee can alsocreate a limit item [page 94] with a maximum value limit.

The employee adds information, such as, the required quantity, account assignment and delivery details, andfinishes the shopping cart. He or she can track the status of the shopping cart and cancel items later if it turnsout that they are no longer needed.For more information, see: ● Create a Shopping Cart [page 44] ● Create a Shopping Cart on Behalf [page 46] ● Add a Limit Item to a Shopping Cart [page 49] ● Track the Status of a Shopping Cart [page 50] ● Cancel an Item Requested in a Shopping Cart [page 52]

2. If approval is required, the system sets the status of the shopping cart to In Approval and sends a task to thedesignated approver. The approver can then accept or reject the shopping cart or send it back for revision.For more information, see Process an Approval Request.

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3. The system converts the shopping cart into one or more purchase requests based on the source of supply. ● If the purchase request is complete, the system automatically creates a purchase order and sends it to

the supplier. ● If any information is missing in the purchase request, the buyer has to add the information manually,

then create the purchase order and send it to the supplier.For more information, see Create a Purchase Order Manually [page 97].

4. When the materials are delivered or the services completed, the employee who created the shopping cartcreates a goods and services receipt to confirm the delivery. Once the goods and services receipt is posted,the system sets the shopping cart status to Delivered and triggers follow-on processes in Supplier Invoicingand Financials.For more information, see: ● Confirm a Delivery from a Shopping Cart [page 53] ● Quick Confirm Delivery [page 55] ● Confirm the Delivery of a Limit Item from a Shopping Cart [page 56]

5. If it turns out that the delivered material is damaged or the wrong material has been delivered, the employeecan create a goods return to return the material to the supplier. Once the goods return is posted, the systemsets the shopping cart status to Partially Delivered or Ordered and triggers follow-on processes in SupplierInvoicing and Financials.For more information, see Create a Goods Return for a Shopping Cart [page 59].

See AlsoPurchase Request Processing [page 63]Purchase Order Processing [page 77]Goods and Services Receipts and Goods Returns Processing [page 124]

3.2 Tasks

3.2.1 Create a Shopping Cart

OverviewIf you want to purchase materials or services that you need for your daily job, for example, computer equipment ortraining courses, you can request these products directly by creating a shopping cart.

Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

Procedure1. Go to Home Self-Services Overview Go Shopping .

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You can also start this activity from Track My Shopping Carts. Click New and select Shopping Cart.

2. In step 1 Select Products, select the materials or services that you want to order: ● From a catalog:

Select the catalog from which you want to order and search for the required product. For moreinformation, see Add an Item from a Catalog.

● From previously ordered or recommended items:In the Show list, choose Previously Ordered Items or Recommended Items and click Go . Select theproduct that you want to order form the list, enter the quantity and click Add to Cart .

● Using the search:Enter the product that you want to order in the Find field and click Go .

3. In step 2 Edit Shopping Cart, review the items that you selected and enter or update the item data, such asthe Delivery Date or Quantity, as required.

4. If you want to add further items or products that you could not find in any catalog, click Add Row , then selectthe Item Type, enter a Product Description for these items, the Delivery Date and the required Quantity.

5. If you want to remove an item from the list, select the item and click Remove .6. If you want to create an identical copy of an item already in the list, select the item and click Copy .7. In step 3 Check Out, enter or update the cost assignment and delivery details as required:

● Depending on whether you create the shopping cart for yourself or for a project, select Cost Center orProject in the Assign To field. The invoiced values of your purchases are paid through the assigned costcenter or project.

The default cost center is the cost center to which you belong. You can change it as required.

● Your name has been entered as Recipient Name in the Deliver To data.

If you use the screen for the first time, the delivery address defaults to the recipient address. Ifthis address is modified, the delivery address will default to the changed value when you log onthe next time.

● If the system has determined that an approval process is to be triggered for this shopping cart, thenames of the approvers are displayed when you click Show Approval Details. You can enter additionalinformation for the approver in the Comments field if required.

You can find approvals details and the Comments field in View All

8. Save your entries.9. To order the shopping cart, click Finish .

ResultThe shopping cart is saved in the system with status In Approval (if the system has started an approval process) orRequested. Once its status changes to Requested, a purchase request is created automatically. If the purchaserequest is complete, the system creates a purchase order and sends it to the supplier. If any information is missingin the purchase request, a buyer has to add that information manually, create one or more purchase orders and sendthem to the suppliers. The shopping cart status then changes to Ordered or Partially Ordered.

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You can track the status of your shopping cart [page 50] from the Self-Services view by clicking Track My ShoppingCarts. If the shopping cart has been created for a project, you can also access it in the Project Management workcenter by clicking Track My Shopping Carts under Common Tasks .

AlternativesYou can also create a shopping cart on behalf of a colleague. For more information, see Create a Shopping Cart onBehalf [page 46].You can also copy a pre-existing shopping cart to create a new shopping cart.

Navigate to Home Self-Services My requests Shopping carts (open, open for confirmation orcompleted) , select the shopping cart and click Copy .A new shopping cart will be created copying only items from reference shopping cart. The screen that opens is theGo Shopping (Advanced) screen.If you do not know the exact details of the materials or services that you want to order yet, you can also add a limititem to your shopping cart [page 49].

3.2.2 Create a Shopping Cart on Behalf

OverviewIf you want to purchase materials or services on behalf of a colleague, you can request these products by creatinga shopping cart. As a personal assistant, for example, you might need to order certain materials or services for yourmanager or colleagues in your team. The costs are automatically charged to the cost center of the employee forwhom you create the shopping cart.

Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

Procedure1. Go to Home Self-Services Overview Go Shopping (Advanced) .

You can also start this activity from Track My Shopping Carts. Click New and select Shopping Cart(Advanced).

If you want to create a shopping cart for a project, you can also go to Project Management CommonTasks Go Shopping (provided that you have access to this work center).

2. In step 1 Set Defaults, under Shop on Behalf Of, enter the name or ID of the employee for whom you areshopping.

3. Under Ship-To, the name of the employee for whom you are shopping is entered as Recipient. Update thisfield as required.

4. Enter the Ship-To/Service Location and the Customer as required.

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In third-party order processes, the Customer is the party for whom the material or service is purchased.

5. If required, update the cost assignment data under Charge To. Depending on whether you create the shoppingcart for a colleague or for a project, select Cost Center, Customer Contract, Project Task, Sales Order, orService Order in the Assigned To field. The invoiced values of your purchases will be paid accordingly.

If you select Cost Center, the default cost center is the cost center of the Recipient. You can change itas required.

6. Enter the account assignment details. You can split the account assignment for a shopping cart . For example,for document ABC, the account assignment can be split as follows:

● 20% — Cost center 1 ● 20% — Cost center 2 ● 60% — Cost center 3

The account assignment can be split only for one account assignment type. For example, the assignment canbe made only for cost centers or only projects, but it cannot be split between cost centers and projects.

The total cost assignment percentage should not exceed or be less than 100%. The assignment willbe applicable to all other proceeding documents

7. The Delivery Address data is transferred from the Ship-To/Service Location.

If you log on to the system for the first time, the delivery address will default to the recipient address.If this address is changed or modified, the changed delivery address will default when you log on thenext time.

8. In step 2 Select Products, select the materials or services that you want to order: ● From a catalog:

Select the catalog from which you want to order and search for the required product. For moreinformation, see Add an Item from a Catalog.

● From previously ordered or recommended items:In the Show list, choose Previously Ordered Items or Recommended Items and click Go . Select theproduct that you want to order form the list, enter the quantity and click Add to Cart .

● Using the search:Enter the product that you want to order in the Find field and click Go .

You can also choose a contract from the list of contracts that are assigned at that catalog item. If thereare no contracts already assigned to the catalog item, you will not be able to select a contract manually.

9. In step 3 Edit Shopping Cart, review the items that you selected and enter or update the item data, such asthe Delivery Date or Quantity, as required.

● If you have a Preferred Supplier for an item, you can enter this supplier on the Basic Data tab page.

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If a contract has been selected in Step 2 of the shopping cart, the Preferred Supplier field will bepopulated automatically, based on the contract. The Contract and Preferred Supplier field canbe edited, but if there was no contract in Step 2 , then both these fields are left blank andinformation can be entered manually in Step 3.

● If the delivery details of an item, for example, the recipient or the delivery address, deviate from therest of the shopping cart, you can specify them on the Deliver To tab page.

● If you want to specify an item further, you can add notes or attachments on the Notes and the Attachments tab pages.

10. If you want to add further items or products that you could not find in any catalog, click Add Row , then selectthe Item Type, enter a Product Description for these items, the Delivery Date and the required Quantity.

If you do not know the details or the quantity of a required material or service yet, you can also add alimit item to the shopping cart [page 49].

11. If you want to remove an item from the list, select the item and click Delete .12. If the system has determined that an approval process is to be triggered for this shopping cart, the names of

the approvers are displayed when you click Show Approval Details. You can enter additional information forthe approver in the Comments field if required.

You can find approvals details and the Comments field in View All

13. Save your entries.14. To order the shopping cart, click Finish .

ResultThe shopping cart is saved in the system with status In Approval (if the system has started an approval process) orRequested. Once its status changes to Requested, a purchase request is created automatically. If the purchaserequest is complete, the system creates a purchase order and sends it to the supplier. If any information is missingin the purchase request, a buyer has to add that information manually, create one or more purchase orders and sendthem to the suppliers. The shopping cart status then changes to Ordered or Partially Ordered.You can track the status of your shopping cart [page 50] from the Self-Services Overview by clicking Track MyShopping Carts. If the shopping cart has been created for a project, you can also access it in the ProjectManagement work center by clicking Track My Shopping Carts.

AlternativesIf you want to create a shopping cart for yourself or for a project, you can also start with Go Shopping instead of GoShopping (Advanced). For more information, see Create a Shopping Cart [page 44].

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3.2.3 Add a Limit Item to a Shopping Cart

OverviewIf you want to create a shopping cart but you do not know the exact details or the quantities of the material or servicerequired yet, you can add a limit item [page 94] to the shopping cart.For example, if a service, such as a repair, needs to be done, but you do not know how many hours it will take, youcan add a limit item to your shopping cart and assign the maximum amount that the repair may cost. Once the repairis completed, the details can be added in the goods and services receipt that confirms the completion[page 56] of the service.

Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

PrerequisitesYou have created a shopping cart using the Go Shopping (Advanced) function. For more information, see Create aShopping Cart on Behalf [page 46].

Procedure1. Go to Home Self-Services Overview Go Shopping (Advanced) .2. In the shopping cart, go to step 3 Edit Shopping Cart.3. To add the limit item to the shopping cart, click Add Row .4. Select Limit as Item Type.5. Enter the following data on the Basic Data tab page:

● A Product Description that describes the service or material that you need ● The required Delivery Date or Service Period ● A Value Limit to specify the maximum amount that the material or service may cost

If the value limit is exceeded when the material or service is confirmed by a goods and servicesreceipt, the system triggers an approval process.

● The Product Category of your item – if available ● A Preferred Supplier for the item – if you have a preferred supplier

6. If the delivery details of the limit item, for example, the Recipient or the Delivery Address, deviate from therest of the shopping cart, specify them on the Deliver To tab page.

7. If you want to specify the limit item further, you can add notes or attachments on the Notes and the Attachments tab pages.

8. Save your entries.

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ResultThe limit item is added to your shopping cart. You can now proceed with ordering your shopping cart as usual. Formore information, see Create a Shopping Cart on Behalf [page 46].Once the shopping cart status changes to Requested and a purchase request is created, a buyer has to find anappropriate source of supply for the material or service described in the limit item, create a purchase order and sendit to the supplier.

3.2.4 Track the Status of a Shopping Cart

OverviewAfter you have created a shopping cart, you can track its status to see, for example, whether it has already beenordered, whether it is currently processed by your purchasing department, or whether it still needs to be approved.If an approver has not approved the shopping cart but sent it back to you for revision, you need to revise and reorderthe shopping cart.

Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

Procedure1. Go to Home Self-Services Overview Track My Shopping Carts .

If the shopping cart has been created for a project, you can also go to Project Management CommonTasks Track My Shopping Carts (provided that you have access to this work center).

2. The My Requests view opens. From here, you can search for your shopping cart: ● Shopping Carts – Open lists all shopping carts that have not been ordered yet (In Preparation), that

are still In Approval, that the approver has sent back for revision (In Revision), or that are currentlyprocessed by the purchasing department (Requested). It also lists the shopping carts where some orall items have been ordered (Ordered or Partially Ordered), and the shopping carts where some itemshave already been delivered and confirmed by a goods and services receipt (Partially Delivered).

● Shopping Carts – Open for Confirmation lists all shopping carts where some or all items have beenordered (Ordered or Partially Ordered) and can be confirmed by a goods and service receipt once theyhave been delivered. It also lists the shopping carts where some items have already been deliveredand confirmed by a goods and services receipt (Partially Delivered).

● Shopping Carts – Completed lists all the shopping carts where all items have been delivered andconfirmed by a goods and services receipt (Delivered) and shopping carts where all items have beenCanceled.

ResultA list of shopping carts is displayed, which you can process further.

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If a shopping cart has the In Preparation or In Revision status, you can select it and click Edit to make changes asrequired. For more information, see Create a Shopping Cart [page 44] and Create a Shopping Cart on Behalf[page 46]. You can also delete the shopping cart .If a shopping cart is no longer in preparation or in revision, you can, for example, withdraw it from approval, cancelitems requested in the shopping cart, or confirm the delivery. For more information, see:

● Withdraw a Shopping Cart from Approval [page 51] ● Cancel an Item Requested in a Shopping Cart [page 52] ● Quick Confirm Delivery [page 55] ● Confirm a Delivery from a Shopping Cart [page 53] ● Confirm the Delivery of a Limit Item from a Shopping Cart [page 56] ● Cancel a Goods and Services Receipt for a Shopping Cart [page 57] ● Create a Goods Return for a Shopping Cart [page 59]

3.2.5 Withdraw a Shopping Cart from Approval

OverviewIf, after you created a shopping cart, it turns out that you no longer need the items requested in the shopping cartand the shopping cart is currently in approval, you can withdraw the shopping cart from approval.

Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

PrerequisitesThe shopping cart has not been ordered yet. Its status is In Approval.

Procedure1. Go to Home Self-Services Overview Track My Shopping Carts .

If the shopping cart has been created for a project, you can also go to Project Management CommonTasks Track My Shopping Carts (provided that you have access to this work center).

2. The My Requests view opens. Search for your shopping cart.3. Select the shopping cart and click Withdraw from Approval .

Alternatively, if you want to review the shopping cart first before you withdraw it, you can also open theshopping cart by clicking the shopping cart ID, click View All and then Withdraw from Approval .

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ResultThe status of the shopping cart item changes back to In Preparation. You can edit it further and remove any itemsthat you no longer need.

3.2.6 Cancel an Item Requested in a Shopping Cart

OverviewIf, after you created a shopping cart, it turns out that you no longer need an item requested in the shopping cart, youcan cancel the requested quantity for that item.

Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

PrerequisitesThe status of the item that you want to cancel is Requested, Ordered, Partially Ordered, or Partially Delivered.

If the shopping cart is currently In Approval, it is not possible to cancel an item. However, you can withdrawthe shopping cart from approval [page 51] and then remove items from the shopping cart.

Procedure1. Go to Home Self-Services Overview Track My Shopping Carts .

If the shopping cart has been created for a project, you can also go to Project Management CommonTasks Track My Shopping Carts (provided that you have access to this work center).

2. The My Requests view opens. Search for your shopping cart.3. Click the Shopping Cart ID.

The shopping cart opens.4. Click View All .5. Select the item that you want to cancel and click Cancel Requested Quantity .

Instead of accessing the item from the shopping cart (by clicking the Shopping Cart ID), you can alsocancel the item directly from the Item Details list in the My Requests view. To do so, select the shoppingcart from the list, then select the item that you want to cancel from the Item Details list below theshopping carts list, and click Cancel Requested Quantity .

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ResultThe status of the shopping cart item changes to Canceled. The system cancels the open quantity for this item in therelated purchase request. No further ordering or delivery is possible for this item. However, if the item has alreadybeen partially ordered, the delivery is still possible for the quantity that has already been ordered.If a purchase order has already been created for the item that is now canceled, a buyer has to cancel thecorresponding purchase order item manually and update any follow-up documents, such as goods and servicesreceipts or supplier invoices. The buyer must then follow up with the supplier to cancel any deliveries or return anyitems already delivered. Alternatively, you can also return the items directly in the shopping cart by creating a goodsreturn. For more information, see Create a Goods Return from a Shopping Cart [page 59].

3.2.7 Confirm a Delivery from a Shopping Cart

OverviewOnce the materials that you have ordered in a shopping cart have been delivered or the services have been completed,you can create a goods and services receipt to confirm the delivery.

Procedure1. Go to Home Self-Services Overview Confirm Deliveries .2. The My Requests view opens. All shopping carts that are currently open for confirmation are displayed.3. Click the Shopping Cart ID of the shopping cart that you want to confirm.4. The shopping cart opens. Click View All .5. Select the items that you want to confirm and click Confirm Delivery to create a goods and services receipt.

The system generates a goods and services receipt. The data from the shopping cart is automaticallytransferred to the goods and services receipt.

6. Enter the General Information about the goods and services receipt: ● The Supplier is automatically transferred from the purchase orders. ● The Posting Date is automatically set to the current date. If required, you can change it to an earlier

date, but it is not possible to set it to a date that is still in the future. ● The Delivery Note ID is an ID provided by the supplier for the delivery.

7. Enter the item data: ● Item Details ● Quantities [page 127] ● Account assignment details

8. If you want to individualize the delivered materials, select the item and click New Individual Materials .The individual material details are displayed on the Basic Data tab page. You can update the Individual MaterialDescription, enter an Inventory ID, and assign the individual material to another individual material (Belongsto Individual Material). If the individual material belongs to a fixed asset, the fixed asset is displayed. For moreinformation, see Asset Procurement in Purchasing [page 15].

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When you click New Individual Materials , the number of goods and services receipt items created equalsthe delivered quantity confirmed in the goods and services receipt. If you want to create individualmaterials for an item, the delivered quantity must not be greater than 100.

9. If you want to specify the items further, you can add notes and attachments on the Notes and on the Attachments tabs.

10. If you do not want to confirm an item that is listed in the goods and services receipt, select the item and clickRemove .

11. Save your entries.12. Click Post .

If you do not want to post the goods and services receipt immediately, only save your entries. Thestatus of the shopping cart does not change then, and the goods and services receipt is available in theReceipts and Returns view with status In Preparation. You receive a task in your worklist to completeit later. As long as the goods and services receipt is still In Preparation, you can also delete it if it turnsout that you do not want to confirm the delivery after all. To do so, select the document from theReceipts and Returns list and click Delete .

ResultOnce the goods and services receipt is posted, it is added to the list of receipts in the Receipts and Returns view witheither of the following statuses:

● If it requires approval, the system sets the status to In Approval and sends a task to the designated approver. ● If no approval is required, the status automatically changes to Released.

If the release process is canceled before the goods and services receipt switches to Released, its statuschanges to Discarded.

The system sends the goods and services receipt to Supplier Invoicing for invoice verification, exception handling,and payment processes. For more information, see Supplier Invoice Processing with Reference and ExceptionHandling [page 187]. It also forwards the data to Financials, posts the goods return receipt there, and updatesindividual materials and fixed asset assignments if applicable.

Before forwarding the data, the system checks whether the relevant accounting period in Financials is open.If the accounting period is closed, the system issues an error or warning message.

When all shopping cart items are confirmed, the shopping cart status changes to Delivered and the shopping cart isadded to the Shopping Cart – Completed list in the My Requests view. If there are other shopping cart items yet tobe confirmed, the shopping cart remains in the Shopping Cart – Open for Confirmation list with status PartiallyDelivered.

AlternativesIf the materials that you have ordered have been delivered or the services have been completed as requested andall items have been delivered, you can also confirm the delivery with just a couple of clicks. For more information,see Quick Confirm Delivery [page 55]. If you want to confirm the delivery of a limit item, see Confirm the Deliveryof a Limit Item from a Shopping Cart [page 56].

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3.2.8 Quick Confirm Delivery

OverviewOnce the materials that you have ordered in a shopping cart have been delivered or the services have been completed,you can create a goods and services receipt to confirm the delivery. If an item has been delivered as requested, youcan confirm this item with just a couple of clicks.

PrerequisitesThe shopping cart item for which you want to confirm the delivery was delivered exactly as ordered.

Procedure1. Go to Home Self-Services Overview Confirm Deliveries .2. The My Requests view opens. All shopping carts that are currently open for confirmation are displayed.3. Click the Shopping Cart ID of the shopping cart that you want to confirm.4. The shopping cart opens. Click View All .5. Select the item that you want to confirm and click Quick Confirm Delivery to create a goods and services

receipt.

Instead of accessing the item from the shopping cart (by clicking the Shopping Cart ID), you can alsoconfirm it directly from the item details list in the My Requests view. To do so, select the shopping cartfrom the list, then select the item that you want to confirm from the Item Details list below the shoppingcarts list, and click Quick Confirm Delivery .

The system generates and posts a goods and services receipt. The data from the shopping cart isautomatically transferred to the goods and services receipt.

ResultWhen the goods and services receipt is posted, it is added to the list of receipts in the Receipts and Returns view withstatus Released.Once the goods and services receipt is released, the system sends the goods and services receipt to SupplierInvoicing for invoice verification, exception handling, and payment processes. For more information, see SupplierInvoice Processing with Reference and Exception Handling [page 187]. It also forwards the data to Financials andposts the goods return receipt there.

Before forwarding the data, the system checks whether the relevant accounting period in Financials is open.If the accounting period is closed, the system issues an error or warning message.

When all shopping cart items are confirmed, the shopping cart status changes to Delivered and the shopping cart isadded to the Shopping Cart – Completed list in the My Requests view. If there are other shopping cart items yet tobe confirmed, the shopping cart remains in the Shopping Cart – Open for Confirmation list with status PartiallyDelivered.

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AlternativesYou can also create a goods and services receipts if the items that you have ordered have not been delivered asrequested, for example, if only half of the ordered item quantity has been delivered, or if you want to confirm severalitems at a time. For more information, see Confirm a Delivery from a Shopping Cart [page 53].

3.2.9 Confirm the Delivery of a Limit Item from a Shopping Cart

OverviewIf you do not know the details of the material or service you want or the quantity that you need when you create ashopping cart, you can add a limit item to the shopping cart [page 49], which has a value limit assigned rather thana concrete price. Once the material has been delivered or the service has been completed, you know these details,so you can confirm them by creating a goods and services receipt.

Procedure1. Go to Home Self-Services Overview Confirm Deliveries .2. The My Requests view opens. All shopping carts that are currently open for confirmation are displayed.3. Click the Shopping Cart ID of the shopping cart that you want to confirm.4. The shopping cart opens. Click View All .5. Select the items that you want to confirm and click Confirm Delivery to create a goods and services receipt.

The system generates a goods and services receipt. The data from the shopping cart is automaticallytransferred to the goods and services receipt.

6. Enter the General Information about the goods and services receipt: ● The Supplier is automatically transferred from the purchase orders. ● The Posting Date is automatically set to the current date. If required, you can change it. ● The Delivery Note ID is an ID provided by the supplier for the delivery.

7. The limit items are listed in upper table in the Items section of the screen.

The limit items have been transferred from the shopping cart. At the time when the shopping cart wascreated, the item details and quantities were not defined yet. Now you know the details of the materialsthat have been delivered or the services that have been completed, so you can specify them in thegoods and services receipt.

Select the limit item in the upper table in the Items section and click Add Row .A new item is added to the items list at the bottom of the Items section.

8. Enter the item data: ● Item Details ● Quantities [page 127] ● Account assignment details

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Alternatively, you can also add items from a catalog.

9. If you want to specify the items further, you can add notes and attachments on the Notes and on the Attachments tabs.

10. If you do not want to confirm an item that is listed in the goods and services receipt, select the item and clickRemove .

11. Save your entries.12. Click Post .

If you do not want to post the goods and services receipt immediately, only save your entries. Thestatus of the shopping cart does not change then, and the goods and services receipt is available in theReceipts and Returns view with status In Preparation. You receive a task in your worklist to completeit later. As long as the goods and services receipt is still In Preparation, you can also delete it if it turnsout that you do not want to confirm the delivery after all. To do so, select the document from theReceipts and Returns list and click Delete .

ResultOnce the goods and services receipt is posted, it is added to the list of receipts in the Receipts and Returns view witheither of the following statuses:

● If it requires approval, the system sets the status to In Approval and sends a task to the designated approver. ● If no approval is required, the status automatically changes to Released.

If the release process is canceled before the goods and services receipt switches to Released, its statuschanges to Discarded.

The system sends the goods and services receipt to Supplier Invoicing for invoice verification, exception handling,and payment processes. For more information, see Supplier Invoice Processing with Reference and ExceptionHandling [page 187]. It also forwards the data to Financials and posts the goods return receipt there.

Before forwarding the data, the system checks whether the relevant accounting period in Financials is open.If the accounting period is closed, the system issues an error or warning message.

When all shopping cart items are confirmed, the shopping cart status changes to Delivered and the shopping cart isadded to the Shopping Cart – Completed list in the My Requests view. If there are other shopping cart items yet tobe confirmed, the shopping cart remains in the Shopping Cart – Open for Confirmation list with status PartiallyDelivered.

3.2.10 Cancel a Goods and Services Receipt for a Shopping Cart

OverviewAfter you have posted a goods and services receipt for a shopping cart [page 53], it might become necessary tocancel it, for example, because you have found a data entry error in the document.

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You can cancel the complete goods and services receipt or individual items. It is, however, not possible tocancel only a partial quantity of an item.

PrerequisitesThe shopping cart for which you want to cancel the goods and services receipt has already been confirmed, so itsstatus is Delivered or Partially Delivered.

Procedure1. Go to Home Self-Services Overview Confirm Deliveries .2. The My Requests view opens. Select Shopping Carts — Completed.

All shopping carts that have already been confirmed are displayed.3. Click the Shopping Cart ID of the shopping cart for which you want to cancel the goods and services receipt.4. The shopping cart opens. Click View All .5. Select the items for which you want to cancel the goods and services receipt and click

Receipts and Returns .6. Select the goods and services receipt and click Cancel Document .

The system generates a goods and services receipt cancellation. The data from the goods and services receiptis automatically transferred to the cancellation.

7. Enter the Posting Date:

The Posting Date is automatically set to the date when the goods and services receipt was posted. Youcan adjust it if required.

8. If there are items on the list that you do not want to cancel, select them and click Remove .9. If you want to specify the items further, you can add notes and attachments on the Notes and on the

Attachments tabs.10. Click Post .

ResultOnce the cancellation is posted, it is added to the list of documents in the Receipts and Returns view of the Goodsand Services Receipts work center with status Released.The original goods and services receipt also remains in the system, but its status is updated to Canceled (if all itemswere canceled) or Partially Canceled (if only some items were canceled).The shopping cart status changes back to Ordered or Partially Ordered (if all items were canceled) or PartiallyDelivered (if only some items were canceled).The system sends the goods and services receipt cancellation to Supplier Invoicing for invoice verification, exceptionhandling, and payment processes. For more information, see Supplier Invoice Processing with Reference andException Handling [page 187]. It also forwards the data to Financials, posts the goods return receipt there, andupdates individual material and fixed asset assignments if applicable. For more information on individual materials,see Asset Procurement in Purchasing [page 15].

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Before forwarding the data, the system checks whether the relevant accounting period in Financials is open.If the accounting period is closed, the system issues an error or warning message.

AlternativesYou can also cancel a goods and services receipt from the Receipts and Returnsview of the Goods and ServicesReceipts work center. For more information, see Cancel a Goods and Services Receipt or Goods Return[page 140].

3.2.11 Create a Goods Return for a Shopping Cart

OverviewIf a material that you have ordered in a shopping cart is damaged or the wrong material was delivered, you can returnit to the supplier. If you have already confirmed the delivery [page 53], you can create and post a goods return withreference to the goods and services receipt that has been created for this material.

PrerequisitesThe shopping cart for which you want to create a goods return has the status Delivered or Partially Delivered.

Procedure1. Go to Home Self-Services Overview Confirm Deliveries .2. The My Requests view opens. Select Shopping Carts — Completed.

All shopping carts that have already been confirmed are displayed.3. Click the Shopping Cart ID of the shopping cart for which you want to create a goods return.4. The shopping cart opens. Click View All .5. Select the item that you want to return and click Receipts and Returns .6. Click New Goods Return .

The system generates a goods return. The data from the goods and services receipt is automaticallytransferred to the goods return.

7. Enter the Posting Date:

The Posting Date is automatically set to the date when the goods and services receipt was posted. Youcan adjust it if required.

8. If there are items on the list that for which you do not want to create a goods return, select them and clickRemove .

9. If the returned quantity for an item differs from the quantity proposed by the system, update the ReturnedQuantity to show how much is actually being returned.

If an individual material has been assigned to an item, the quantity is always 1 and cannot be changed.

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10. If the return date for an item differs from the date proposed by the system, update the Return Date field toshow when the item is actually being returned.

11. If you want to specify the items further, you can add notes and attachments on the Notes and on the Attachments tabs.

12. Save your entries.13. Click Post .

If you do not want to post the goods return immediately, only save your entries. The goods return isthen available in the Receipts and Returns view with status In Preparation. You receive a task in yourworklist to complete it later. As long as the goods return is still In Preparation, you can also delete it ifit turns out that you do not want to confirm the delivery after all. To do so, select the document fromthe Receipts and Returns list and click Delete .

ResultOnce the goods return is posted, it is added to the list of returns in the Receipts and Returns view with statusReleased. The status of the corresponding goods and services receipt changes to Goods Returned. The shoppingcart is added to the Shopping Carts – Open for Confirmation list with status Ordered or Partially Ordered.The system sends the goods and services receipt cancellation to Supplier Invoicing for invoice verification, exceptionhandling, and payment processes. For more information, see Supplier Invoice Processing with Reference andException Handling [page 187]. It also forwards the data to Financials, posts the goods return receipt there, andupdates individual material and fixed asset assignments if applicable. If, for example, you create a goods return foran item for which an individual material has been created, the individual material status changes to Blocked oncethe goods return is posted. The individual material can then no longer be assigned to another individual material,nor can it be used in a fixed asset. For more information on individual materials, see Asset Procurement in Purchasing

[page 15].

Before forwarding the data, the system checks whether the relevant accounting period in Financials is open.If the accounting period is closed, the system issues an error or warning message.

AlternativesYou can also create the goods return from the Receipts and Returns view of the Goods and Services Receipts workcenter. For more information, see Create a Goods Return [page 138].

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4 Purchase Requests and Orders

4.1 Purchase Requests View

4.1.1 Purchase Requests Quick Guide

As a buyer, you have to manage all kinds of demands for products that have to be procured externally. The PurchaseRequests view in the Purchase Requests and Orders work center allows you to process and monitor all purchaserequests received based on projects from project management, purchase proposals from materials requirementsplanning (MRP), and shopping carts from self-service shopping.When you receive a purchase request, the requester may have assigned a source of supply to each product. If asource of supply is not assigned to a product, you assign a source of supply manually.Depending on the settings you have chosen for automatic purchase order creation, if all information is complete,the system automatically creates and sends the follow-on purchase order to the supplier or you send it manuallyfrom the Purchase Orders view.

Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

Since your company has selected the Manage and Control Projects implementation focus, there will beslight differences between your solution and the standard as outlined below. For more information, seeWhat Works Differently in Manage and Control Projects.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

Business Background

Purchase Request ProcessingPurchase request processing enables you to update and transfer the data from purchase requests into purchaseorders. Purchase requests are released from other areas within your company to your purchasing department andcan be based on:

● Purchase proposals from material requirements planning ● Shopping carts from self-service shopping ● Projects from project management

Purchase requests contain products that are to be purchased in a specified quantity within a specified time. Theseproducts can be:

● Stock materials, such as spare parts or raw materials ● Non-stock materials, such as laptops or printers

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● Services, such as consulting or cleaning services ● Limit items if the exact details or quantity of the required materials or services are not known yet

For more information, see Process Types of Purchase Order Items [page 87] and Limit Items [page 94].The system can handle all steps of the purchase request process automatically; you only receive exceptions – as aresult of inconsistent or missing data – in your worklist. If you prefer, some steps can be handled manually, such asbundling a group of purchase requests with the same supplier into a single purchase order.In order to automatically transfer a purchase request to a purchase order, a source of supply must be assigned. Thesystem tries to assign a source of supply. If this is not possible, the buyer can either assign a source of supply manuallyor trigger the system to create a sourcing request in the Sourcing and Contracting work center to initiate the requestfor quotation (RFQ) process.For more information, see Purchase Request Processing [page 63].

Sourcing Rank in Assign Source of SupplyA source of supply can be assigned to a product in a number of ways:

● You can assign it in each purchase request or in a purchase order (PO) when you create a PO manually. ● You can assign the same source of supply to multiple purchase requests within the worklist for purchase

requests.

The system always checks if there are any valid sources of supply available, such as a contract, and provides youwith an automatically generated list, in order of suitability, called a sourcing rank.The sourcing rank is a list showing sources of supply with contracts or list prices that match the desired product orproduct category. The ranked list is always displayed with the most suitable source of supply at the top, running tothe least suitable at the bottom.For more information, see Sourcing Rank in Assign Source of Supply [page 66].

Business Scenario: Procure-to-Pay (Non-Stock)The Procure-to-Pay (Non-Stock) business scenario allows you to purchase non-stock materials, such as officematerial, engineering sample material, or fixed assets.This scenario can be triggered by employees or assistants who create shopping carts, by project teams who neednon-stock materials for projects, by buyers directly in purchase orders or requests for quotation (RFQ), or byaccounts payable accountants in supplier invoices. Deliveries can be confirmed centrally or decentrally. Costs forproject-related non-stock materials are directly transferred to project tasks in financial accounting.If a catalog, purchasing contract, or list price for a non-stock material exists, a purchase order can be createdautomatically. If no source of supply exists, you can send RFQs to determine appropriate suppliers.With this scenario you can also order non-stock materials to cover customer demands by using sales orders orservice orders to trigger third-party procurement.For more information, see Procure-to-Pay (Non-Stock).

Business Scenario: Procure-to-Pay (Services)The Procure-to-Pay (Services) business scenario allows you to procure services, such as consulting and trainingservices, temporary labor, or engineering services. It can be triggered by employees who create shopping carts forservices, by project managers who need a certain service for their project, or directly by the buyer using a purchaseorder.Project-related services are usually recorded in a time sheet and the costs are directly transferred to the projecttasks in financial accounting. If a purchasing contract or a list price for the ordered service exists, the purchase ordercan be created automatically. If no source of supply exists, a request for quotation can be sent out to determine anappropriate supplier.

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Alternatively with this scenario, it is possible to order external resources to provide services for customer demandsthat cannot be fulfilled by internal employees. In this case, the procurement process is triggered when a sales orderor a service order has been created.For more information, see Procure-to-Pay (Services).

Business Scenario: Procure-to-Pay (Stock)The Procure-to-Pay (Stock) scenario enables you to purchase stock products based on a requirement that can begenerated from a planning system, such as a Materials Requirements Planning (MRP) system.It covers all stages of the procurement process, from demand planning and creation of a purchase order, throughautomatic or manual assignment of sources of supply, sending the purchase order to a supplier, to goods andservices receipt, invoice verification, and payment.For more information, see Procure-to-Pay (Stock).

Tasks

Bundle Purchase Requests and Create a Purchase OrderFor information about this task, see here [page 68].

Create a Purchase Order FasterYou can create a purchase order faster by clicking New Purchase Order — Quick Create . Formore information see, here

Assign a Source of SupplyFor information about this task, see here [page 70].

4.1.2 Business Background

4.1.2.1 Purchase Request Processing

OverviewPurchase request processing enables you to update and transfer the data from purchase requests into purchaseorders. Purchase requests are released from other areas within your company to your purchasing department andcan be based on:

● Purchase proposals from material requirements planning ● Shopping carts from self-service shopping ● Projects from project management

Purchase requests contain products that are to be purchased in a specified quantity within a specified time. Theseproducts can be:

● Stock materials, such as spare parts or raw materials ● Non-stock materials, such as laptops or printers ● Services, such as consulting or cleaning services

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● Limit items if the exact details or quantity of the required materials or services are not known yet

For more information, see Process Types of Purchase Order Items [page 87] and Limit Items [page 94].The system can handle all steps of the purchase request process automatically; you only receive exceptions – as aresult of inconsistent or missing data – in your worklist. If you prefer, some steps can be handled manually, such asbundling a group of purchase requests with the same supplier into a single purchase order.In order to automatically transfer a purchase request to a purchase order, a source of supply must be assigned. Thesystem tries to assign a source of supply. If this is not possible, the buyer can either assign a source of supply manuallyor trigger the system to create a sourcing request in the Sourcing and Contracting work center to initiate the requestfor quotation (RFQ) process.

PrerequisitesThe main prerequisite in business configuration is the activation of the Purchase Request and Order Managementbusiness package.

Configuration settings are usually performed by an administrator. If you do not have the requiredauthorization, contact your administrator.

One or more of the following business processes are running in your company: ● Basic procurement processes ● Procurement of external products with stock placement and inventory management (material requirements

planning) ● Procurement of external services (project management) ● Electronic self-service procurement by your employees (self-service shopping)

Depending on your business processes and the required degree of integration into related business areas and thelevel of automation that you want to achieve, you may have to select additional business packages and businesstopics in the following areas:

● Supply Chain Planning and ControlSupply and Logistics Control business package, Handover to Purchasing business topic

● Supply Chain Setup ManagementSupply Chain Design business package

● Project ManagementProject Planning and Execution business package and Project Procurement business topic

● SourcingSourcing and Contracting business package

● PurchasingSelf-Service Procurement business package

● Built-In Services and SupportBusiness Environment business package and Tax Calculation business topic

● Product and Service PricingProduct and Service Pricing business package and List Prices business topic

IntegrationPurchase request processing is integrated with the following:

● Incoming processes related to documents that lead to the creation of purchase requests:

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○ Project management processing, which keeps you informed about project performance and helps youcontrol project work, costs, and schedules.

○ Self-service procurement processing, which allows your employees to create and track internal requestsfor products, for themselves or on behalf of other employees.

○ Materials requirement planning processing, which allows you to plan and control demand for and deliveryof stock materials.

● Outgoing processes that lead to the update or completion of follow-up documents, and completion orcancellation of purchase requests: ○ Purchase order processing, which allows you to create, process, and track all purchase orders and

related documents, such as purchase order acknowledgments. ○ Sourcing request processing and RFQ processing, which allows you to create and send requests for

quotation, compare quotes, and determine winner quotes, which may then be transferred into apurchase order.

Process Steps1. Requester enters data in system

The automatic creation of a purchase request is based on a requester entering information into a precedingdocument in the system for the product including quantity, price, and delivery date. ● Procurement of external products with stock placement and inventory management

In the Supply Planning work center, the supply planner creates a purchase proposal either manually orusing materials requirement planning if a product needs to be procured externally. When the purchaseproposal is released, the system sends it to the purchasing department.More Information: Source of Supply Availability for Purchase Proposals.

● Procurement of external servicesIn the Project Management work center, the project manager selects and opens a project from the listin the Projects view. In the Work and Requests view of the Project editor, the project manager creates apurchase request, fills in the relevant information, then sends the purchase request to the purchasingdepartment.

● Electronic self-service procurement of non-stock material or servicesEmployees can request products by creating shopping carts in the Self-Services view of the Home workcenter. Employees can also shop on behalf of another employee. Once the shopping cart is released, thesystem creates a purchase request in the Purchase Requests and Orders work center.

2. System creates purchase requestThe system creates a purchase request based on material requirements planning, self-service shopping, orproject management.

You can cancel the open quantity of an item in a purchase request, that is, the quantity that has notalready been transferred into a purchase order. You can also reopen the canceled quantity again

3. System proposes source of supply (if available)For purchase proposals, the purchase proposal source determination is used, but can be manually overruled.The assigned source of supply is then transferred into the purchase request. The source determination alwaystries to assign a valid source of supply using the sourcing criteria of the sourcing engine. For more information,see Source Determination.Only if no source of supply is available, an unassigned purchase request appears in the work list. A source ofsupply then needs to be assigned manually.

4. System sends message about missing information, if applicable

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If data is inconsistent or incomplete in a purchase request, the system sends a message. This creates a taskfor the buyer in the Purchase Requests view of the Purchase Requests and Orders work center.

5. Buyer completes purchase request manually, if requiredThe buyer manually assigns a source of supply from a list of suppliers.More information: Assign a Source of Supply [page 70]

If there is no source of supply available, the buyer triggers the system to create a sourcing request inthe Sourcing Requests view of the Sourcing and Contracting work center. Based on the sourcingrequest, an RFQ for Purchase Order is created and sent to potential suppliers, who can submit theirquotes. The buyer can then select the most suitable supplier and create the purchase order based onthe winning quote. For more information, see Request for Quotation Processing and Supplier QuoteProcessing.

6. System transfers purchase requests into purchase ordersDepending on the settings for the automatic creation of purchase orders, the system can automaticallytransfer the data of an individual purchase request into a purchase order in the Purchase Requests andOrders work center. If the purchase request is not automatically transferred into a purchase order, you canalso manually bundle multiple purchase requests assigned to the same source of supply into a single purchaseorder to improve cost savings, for example, by reducing delivery costs. You can then view all the purchaseorders in the Purchase Orders view.More Information: Bundle Purchase Requests and Create a Purchase Order [page 68]

The system automatically sends all complete purchase orders that are created out of purchase requests to thesuppliers. . They are listed in the Purchase Orders view with status Sent. Purchase orders that have to be processedmanually are listed there with status In Preparation.

Workflow NotificationYou can create your customized task for workflow rules for purchase request in Workflow view under Applicationand User Management work center. If you create the workflow rules and set it to active, any creation or modificationof purchase request will send notification to your Inbox in the Home work center. As you define workflow rules, youspecify basic data for each rule such as the conditions under which the rule is invoked, and a field is updated. Youcan also specify how a notification is sent, and the list of recipients.For more information on workflow rules, see Workflow Rules Quick Guide.

See AlsoPurchase Order Processing [page 77]Automatically Created Purchase Orders [page 87]

4.1.2.2 Sourcing Rank in Assign Source of Supply

OverviewA source of supply can be assigned to a product in a number of ways:

● You can assign it in each purchase request or in a purchase order (PO) when you create a PO manually. ● You can assign the same source of supply to multiple purchase requests within the worklist for purchase

requests.

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The system always checks if there are any valid sources of supply available, such as a contract, and provides youwith an automatically generated list, in order of suitability, called a sourcing rank.The sourcing rank is a list showing sources of supply with contracts or list prices that match the desired product orproduct category. The ranked list is always displayed with the most suitable source of supply at the top, running tothe least suitable at the bottom.The list is ranked using the “Olympic” method. This means that, for example, if there are two suppliers who areequally suitable, they are both numbered first, then the next suitable will be numbered third, and so on.The system compares all the sources of supply in the list using a preset and inflexible tree of criteria. The systemcompares all the available sources of supply using the first criterion. If this does not result in a single most suitablesource, then the next criterion is used to discern which supplier is most suitable, and so on, until all available sourcesof supply have been ranked.

Ranking CriteriaThe criteria used to compare and rank the available sources of supply are as follows:

1. Fixed Source of SupplyIn the Sourcing and Contracting work center, you can assign a contract or a list price to a product as the fixedsource of supply. When this product is ordered, the assigned fixed source of supply has the highest rank.

2. Type of Sourcea. Contracts

If suppliers are currently under contract with the buyer, they are given a higher position within thesourcing rank.The rank of contracts is determined by the following rules in descending order:1. Quota Arrangement

If a contract currently exists, the system checks and compares any current quota arrangements. Ifa quota arrangement exists for two or more contracts for a certain product, it can be used as thebasis for the supplier’s suitability for fulfilling the order.

2. PriceThis criterion compares the different suppliers’ prices for the required product.

3. FulfillmentThis criterion only applies to contracts and is relevant if there are contracts with the same price.The contract with the lowest released quantity is selected first.

4. LatenessIf none of the other criteria above result in a suitable source of supply being found, then the availablecontracts are compared based on how soon after the delivery date specified by the buyer thesuppliers are able to deliver the required products.

b. List PricesThese are the prices of the requested products issued by the supplier. List prices are only ranked inascending order.

A contract always has a higher priority than a list price, unless the list price was set as a fixed sourceof supply.

If no contract or list price is available, the system automatically searches for existing purchase orders, which can beused as examples of previous business with a supplier, and therefore as an indicator of its suitability for supplyingthe product. When using purchase orders as the basis for assigning a source of supply, the only criterion used whenranking them is the price.

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See AlsoSourcingSource DeterminationList PricesPurchasing Contract ProcessingPurchase Order Processing [page 77]

4.1.3 Tasks

4.1.3.1 Bundle Purchase Requests and Create a Purchase Order

OverviewYou can manually bundle multiple purchase requests with the same supplier and create a single purchase order. Youcan further bundle the purchase requests by supplier plus one of the following:

● Delivery date ● Delivery date and ship-to location

Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

PrerequisitesThe purchase requests that you want to bundle are consistent and do not have a follow-up status.

Procedure1. Go to the Purchase Requests and Orders work center, then choose the Purchase Requests view.2. To filter the list of purchase requests, select Assigned Purchase Requests in the Show list.3. To select multiple purchase requests, press and hold CTRL, then choose the rows of the purchase requests

that you want to bundle.

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Product data conflicts in a purchase request can be caused by one of the following: ● The purchase processing unit in the product master has not been maintained for the specified

product in the purchase request. You have to check the product master and add the purchaseprocessing unit, if necessary.

● The purchasing status in the product master does not allow the product to be purchased. Youhave to check the purchasing status in the product master and allow the product to bepurchased, if necessary.

● The purchase request does not contain a product category. You have to enter the productcategory in the purchase request.

4. Click Bundle and Order and choose the appropriate option.

You can group purchase requests By Supplier or by supplier and additional criteria, such as deliverydate, ship-to location, or recipient..

5. The system automatically generates a list of one or more purchase orders according to the criteria youselected and displays the list in the Bundle and Order quick activity. If required, you can make the followingchanges to the purchase orders:

● To remove a purchase request from a purchase order, select a purchase order. Under Details, selecta purchase request, then click Remove from Bundle .

● To edit a purchase order, select a purchase order and click Edit to open the Purchase Order editor.After editing is completed, click Back To Bundle & Order .

If you want to bundle several purchase requests and one of these purchase requests contains aship-to location that is externally managed by your warehouse provider, the ship-to location thenserves as bundling criteria.This means that a separate purchase order is created for each purchase request with a differentship-to location.

For purchase requests created out of service orders, there will be following restrictions during bundling: ● If the location of service provision is of the type Supplier Service Center, bundling is not possible ● If the location of service provision is of the type Own, bundling is possible ● If the location of service provision is of the type On-Site, bundling is possible ● If there are purchase requests containing two different locations of service provision, bundling

is not possible.

6. To check what the purchase order document will look like, select the purchase order and click Preview .7. Save the purchase order and send it to the supplier.

● To save a draft purchase order, select the purchase order and click Save . ● To save and send the purchase order to the supplier, select the purchase order and click Order .

ResultThe new purchase order is saved in the system. You can see the purchase order in the Purchase Orders view.

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4.1.3.2 Assign a Source of Supply

OverviewIn the Purchase Requests and Orders work center, you can manually assign available sources of supply to purchaserequests.

Procedure1. Go to the Purchase Requests and Orders work center, then choose the Purchase Requests view.2. In the Show list, choose Unassigned Purchase Requests.3. Select one or more purchase requests.4. Click Assign Source of Supply .

You can also assign a source of supply to a single purchase request item. Select the purchase request,then click Edit to open it. Choose the Items tab, then choose the Source of Supply tab, then click

Assign Source of Supply to open the quick activity.

5. In the Assign Source of Supply quick activity, check the available sources of supply and assign one to eachpurchase request.

a. In the Purchase Requests table, select one or more purchase requests.b. In the Available Sources of Supply table, select a source of supply from the list, then click

Assign to Selected Purchase Request . The system automatically enters the Supplier and Gross Pricefor the selected purchase request. You can also assign a source of supply to all the purchase requestsin the list with the same product at the same time by clicking Assign to All Purchase Requests .

You can remove a source of supply from a purchase request by selecting that purchase requestand clicking Remove Source of Supply . The system automatically removes the Supplier andGross Price from the purchase request.

If there is no source of supply available for a purchase request, you can clickQuick Sourcing Request . The system automatically creates a sourcing request in the worklist

in the Sourcing Requests view in the Sourcing and Contracting work center. The personresponsible uses the sourcing request to create a request for quotation (RFQ) and send theRFQ to bidders. The winning supplier quote will be used to create a purchase order for therequested product. For more information, see Create a Request for Quotation.

6. Save the purchase request with the assigned source of supply.

ResultThe purchase request with the assigned source of supply is saved in the system. You can see the purchase requestin the Purchase Requests view. It is now displayed in the Show list under Assigned Purchase Requests.

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4.2 Purchase Orders View

4.2.1 Purchase Orders Quick Guide

As a buyer, you have to manage all kinds of demands for products and ensure that products are delivered on timeand in the required quantities.Purchase orders (PO) can be created manually in the Purchase Orders view of the Purchase Requests and Orderswork center or the system automatically generates purchase orders from awarded supplier quotes or from purchaserequests. Purchase requests are created from materials requirement planning (MRP) or project management, orby employees using self-service shopping.You can also create a purchase order faster using the common task, New Purchase Order — Quick Create .

The quick create and quick edit screens ensure faster purchase order creation because: ● Some checks on the purchase order are made only when the purchase order is to be ordered and not

at the time of creation. ● Items are not displayed in a hierarchical manner on the purchase order screen, this leads to faster

processing. This feature is also applicable to the New Overview screen.

The benefits of these quick screens are seen when several purchase requests are bundled to create a purchaseorder.

The Purchase Orders view allows you to create, process, and track all POs and related documents, such as POacknowledgments. You can view a worklist of all tasks related to purchase orders, purchase order acknowledgments,and deliveries, especially those dealing with alerts and exceptions.In the Purchase Orders view, you can manually create a purchase order without reference to a purchase request.You fill in the purchase order details, choose the required products and source of supply, and send the purchaseorder to the selected supplier. If you cannot find the product you want in the supplier catalogs, you can enter a free-text item. This may require the creation of a sourcing request to find a source of supply.You can create a limit item when you do not know the exact details of the materials, services, or related expensesthat are required. Instead of entering specific product information into the purchase order, you can set the valuelimit of the limit item in the purchase order to the maximum value that the unplanned materials, services, or relatedexpenses can cost. Taxes for a limit item are not calculated at the time of creating a purchase order, but duringinvoicing.In cases where you want to order an item a second time, but with another delivery date or account assignment, youcan copy the purchase order item.

If you copy a purchase order item, the reference to preceding documents (for example, shopping carts,projects, or purchase requests) is copied too. If you do not want this reference to be copied, and the item hasnot yet been sent to the supplier, then you can delete it in the document flow of this item.If you copy a complete purchase order, the reference to preceding documents is not copied (for example, forstock material purchase orders or third-party purchase orders).If you copy a purchase order with subitems, the subitems are copied, too.

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Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

Since your company has selected the Manage and Control Projects implementation focus, there will beslight differences between your solution and the standard as outlined below. For more information, seeWhat Works Differently in Manage and Control Projects.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

Business Background

Purchase Order ProcessingPurchase order processing enables you to create, update, and send purchase orders, which can contain:

● Stock materials, such as spare parts or raw materials ● Non-stock materials, such as laptops or printers ● Services, such as consulting or cleaning services ● Expenses related to materials or services ordered ● Limit items if the exact details or quantity of the required materials, services, or related expenses are not

known yet

For more information, see Process Types of Purchase Order Items [page 87] and Limit Items [page 94].For more information, see Purchase Order Processing [page 77].

Automatically Created Purchase OrdersAutomatic creation of purchase orders allows you to define whether a purchase order is created automatically ormanually from a purchase request.Using automatic creation of purchase orders is relevant if you want to automate part of the procurement process.This saves time, as you only have to manually create purchase orders in cases where there is no source of supplyassigned to the purchase request.This activity can be accessed through the Define Automatic Creation of Purchase Orders common task of thePurchase Requests and Orders work center and through the Business Configuration work center.

Configuration settings are normally performed by an administrator. if you do not have the requiredauthorization, contact an administrator.

For more information, see Automatically Created Purchase Orders [page 87].

Purchase Order ApprovalsFor more information, see Purchase Order Approvals

Purchase Order AcknowledgmentsA purchase order (PO) acknowledgment is a confirmation from a supplier to deliver specified quantities of productsat specified prices within specified times.

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A PO acknowledgment can be either fully acknowledged with no deviations or partially acknowledged. Deviationsfrom the original purchase order concerning quantities, delivery dates, or prices, can be recorded. You, as the buyer,can accept or reject the deviations.In the Purchase Requests and Orders work center, if you accept changes to the PO acknowledgment, the systemupdates the original purchase order.For more information, see Purchase Order Acknowledgments [page 89].

Receiving and Processing PO AcknowledgmentsIn the Purchase Orders view of the Purchase Requests and Orders work center, when a supplier acknowledges apurchase order (PO), either the system automatically creates a purchase order acknowledgment (POacknowledgment) or you create one manually.A PO acknowledgment from a supplier can be received and entered in the system in the following ways:

● Automatically by interactive form or by business-to-business (B2B) communicationWhen a supplier sends a PO acknowledgment electronically, the system automatically creates a POacknowledgment.

● Manually, as a print form, based on a fax, mail, or e-mail attachmentWhen a supplier sends a PO acknowledgment by fax, mail, or e-mail, you manually create a POacknowledgment using the New Purchase Order Acknowledgment quick activity.

For more information, see Receiving and Processing PO Acknowledgments [page 92].

Asset Procurement in PurchasingThere is a huge variety of products that can be ordered within a company and therefore various process variants arepossible in asset procurement, depending on the value and the complexity of the product to be procured.If the product to be procured is of high value and complexity (for example, a new building), the buyer generally worksvery closely together with the accountant beforehand. The fixed asset is then created in the system before goodsand services are ordered with an account assignment to this fixed asset.If the product to be procured is of low value and complexity (for example, a new laptop), the fixed asset is usuallycreated automatically in the system at the time the goods receipt is posted. Therefore, individual materials are usedin purchasing, which may lead to the creation of fixed assets in Financial Management.For more information, see Asset Procurement in Purchasing [page 15].

Sourcing Rank in Assign Source of SupplyA source of supply can be assigned to a product in a number of ways:

● You can assign it in each purchase request or in a purchase order (PO) when you create a PO manually. ● You can assign the same source of supply to multiple purchase requests within the worklist for purchase

requests.

The system always checks if there are any valid sources of supply available, such as a contract, and provides youwith an automatically generated list, in order of suitability, called a sourcing rank.The sourcing rank is a list showing sources of supply with contracts or list prices that match the desired product orproduct category. The ranked list is always displayed with the most suitable source of supply at the top, running tothe least suitable at the bottom.For more information, see Sourcing Rank in Assign Source of Supply [page 66].

Business Scenario: Procure-to-Pay (Non-Stock)The Procure-to-Pay (Non-Stock) business scenario allows you to purchase non-stock materials, such as officematerial, engineering sample material, or fixed assets.

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This scenario can be triggered by employees or assistants who create shopping carts, by project teams who neednon-stock materials for projects, by buyers directly in purchase orders or requests for quotation (RFQ), or byaccounts payable accountants in supplier invoices. Deliveries can be confirmed centrally or decentrally. Costs forproject-related non-stock materials are directly transferred to project tasks in financial accounting.If a catalog, purchasing contract, or list price for a non-stock material exists, a purchase order can be createdautomatically. If no source of supply exists, you can send RFQs to determine appropriate suppliers.With this scenario you can also order non-stock materials to cover customer demands by using sales orders orservice orders to trigger third-party procurement.

If you check the Automatic Goods and Services Receipts flag in the purchase order edit screen, the systemwill create the receipts for the purchase order items automatically through a mass data run object calledGoods and Services Receipts Run defined in the Goods and Services Receipts work center. You can set the flagonly for those items that has process type Non-Stock and item type Material or Services. You cannot set thisflag for service item types where time recording is expected.

For more information, see Procure-to-Pay (Non-Stock).

Business Scenario: Procure-to-Pay (Services)The Procure-to-Pay (Services) business scenario allows you to procure services, such as consulting and trainingservices, temporary labor, or engineering services. It can be triggered by employees who create shopping carts forservices, by project managers who need a certain service for their project, or directly by the buyer using a purchaseorder.Project-related services are usually recorded in a time sheet and the costs are directly transferred to the projecttasks in financial accounting. If a purchasing contract or a list price for the ordered service exists, the purchase ordercan be created automatically. If no source of supply exists, a request for quotation can be sent out to determine anappropriate supplier.Alternatively with this scenario, it is possible to order external resources to provide services for customer demandsthat cannot be fulfilled by internal employees. In this case, the procurement process is triggered when a sales orderor a service order has been created.

If you check the Automatic Goods and Services Receipts flag in the purchase order edit screen, the systemwill create the receipts for the purchase order items automatically through a mass data run object calledGoods and Services Receipts Run defined in the Goods and Services Receipts work center. You can set the flagonly for those items that has process type Non-Stock and item type Material or Services. You cannot set thisflag for service item types where time recording is expected.

For more information, see Procure-to-Pay (Services).

Business Scenario: Procure-to-Pay (Stock)The Procure-to-Pay (Stock) scenario enables you to purchase stock products based on a requirement that can begenerated from a planning system, such as a Materials Requirements Planning (MRP) system.It covers all stages of the procurement process, from demand planning and creation of a purchase order, throughautomatic or manual assignment of sources of supply, sending the purchase order to a supplier, to goods andservices receipt, invoice verification, and payment.For more information, see Procure-to-Pay (Stock).

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Tasks

Create a Purchase Order ManuallyFor information about this task, see here [page 97].

Create a Purchase Order FasterFor information about this task, see here.

Create Purchase Orders Using Microsoft Excel®For information about this task, see here.

Edit a Purchase OrderYou can edit a purchase order by clicking Edit .Alternatively, for faster editing, click Quick Edit .

You must use Edit instead of using Quick Edit if you want to: ● Add an item from a catalog ● View the hierarchical display of purchase order items ● Allow the automatic adjustment of the delivery date of a purchase order item ● View the multiple schedule line indicator on the Items table

To change or update the general information in the purchase order, select Generalunder Quick Edit .To change or update information relevant to the items in the purchase order, select

Items under Quick Edit . Similarly, to view information relevant to approvals, selectApproval under Quick Edit .

Click Check to check for the completeness of the new purchase order. In case you alsowant to compare the price of new purchase order with that of the old purchase order,in addition to checking the completeness, use Extended Check .

Switch Between Old Overview and New OverviewYou can view details of a purchase order by clicking the relevant purchase order. By defaultthe purchase order overview displays items in a non-hierarchical form. If you want to viewitems in the hierarchical form click Old Overview . To view item details without a hierarchyclick, New Overview .

Add Price ConditionsFor more information about this task, see here [page 100].

Create a Purchase Order AcknowledgmentFor information about this task, see here [page 101].

Create a Purchase Order Acknowledgment with Delivery ScheduleFor information about this task, see here [page 102].

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Cancel a Purchase OrderFor more information about this task, see here [page 103].

Create a Goods and Services Receipt for One or More Purchase OrdersFor information about this task, see here [page 104].

Monitor Business CommunicationFor information about this task, see here.

Create Form Template Selection Rule for Purchase OrderFor information about this task, see here [page 107].

Create Output Channel Selection Rule for Purchase OrderFor information about this task, see here [page 106].

4.2.2 Configuration: Automatic Accept Deviation on Purchase OrderAcknowledgement

Overview

This document contains details and instructions regarding configuration settings. Such settings arenormally performed by an administrator. If you do not have the required authorization, contact anadministrator.

To find this activity, go to the Business Configuration Implementation Projects view. Select your implementationproject and click Open Activity List . Select the Fine-Tune phase, then select the activity from the activity list.You can use this configuration activity to define tolerance settings for attributes such as price, quantity, and deliverydate for purchase order acknowledgement. If there are deviations in attributes such as price, quantity or deliverydate in the purchase order acknowledgement received from supplier, and deviations are within the configuredtolerance settings, then the deviations are carried over into purchase order automatically.If there are any deviations in limit item in terms of value limit or addition of new sub-limit item received from supplier,then the deviations are also carried over into purchase order automatically.

Steps1. You can select Accept all if you want that the deviations on purchase order are automatically carried over to

purchase order. This will disable all the variance settings options available except Accept new sub-limit.

If any new item is added to purchase order acknowledgement, it will not be automatically carried overinto purchase order.

2. You can select Accept new sub-limit item if you want that the deviations in purchase order acknowledgmentcontaining new sub-limit item should be carried over to purchase order automatically.

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3. Under Price Variance, you can set the tolerance limit for price variation exceptions. You can define a tolerancelimit by percentage, by item net amount or by both. If you select AND, the deviation in acknowledged priceshould be within tolerance of both percentage and net amount variance. If you select OR, the deviation inacknowledged price should be within tolerance of either percentage variance or net amount variance.

4. Under Quantity Variance, you can set the tolerance limit for quantity variation exceptions. You can define atolerance limit higher than by percentage.

5. Under Delivery Date Variance, you can set the tolerance limit for delivery date variation exceptions. You canenter higher than and lower than values for the number of days that the tolerance for the delivery date shouldbe applicable.

6. You can click Save to save your settings, Close to exit the screen, and Save and Close to save your settingsand exit the screen.

4.2.3 Business Background

4.2.3.1 Purchase Order Processing

OverviewPurchase order processing enables you to create, update, and send purchase orders, which can contain:

● Stock materials, such as spare parts or raw materials ● Non-stock materials, such as laptops or printers ● Services, such as consulting or cleaning services ● Expenses related to materials or services ordered ● Limit items if the exact details or quantity of the required materials, services, or related expenses are not

known yet

For more information, see Process Types of Purchase Order Items [page 87] and Limit Items [page 94].The materials or services can be selected from internal or external supplier catalogs or added to the purchase orderas free-text descriptions. The costs for these products can be assigned to a cost center, project, sales order item,service item, customer contract, or individual material.Preceding documents to a purchase order can be purchase requests or supplier quotes. The system can handlemost steps of the purchase order process automatically. It transfers the purchase requests into purchase order.The buyer only receives exceptions – as a result of inconsistent or missing data – in the Purchase Orders view of thePurchase Requests and Orders work center. You can also create a purchase order manually, without a precedingdocument.Depending on your configuration, the purchase order is directly integrated with project management, self-serviceshopping, and material requirements planning.Approval may be required if the total net value of a purchase order item exceeds its predefined tolerances or if themaximum value of a limit item is exceeded.A project or project task that exists within project management can be added as an assigned account for a non-stockmaterial, service, or expense in a purchase order item. The system checks if a project or project task exists and if itis available to be added as a reference in the purchase order. You can assign the purchase order item to the projector project task and once the project task is assigned, the system stores the purchase order item details in thecorresponding project or project task.

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If selected, purchase order processing also provides you with functions to handle the corresponding purchase order(PO) acknowledgments from suppliers. PO acknowledgments confirm whether the ordered materials or servicescan be delivered at the date, quantity, and price requested.For non-stock materials or services, you can choose whether or not a goods and services receipt is required for thepurchase order. You can also choose to have the goods and services receipt for a service confirmed using Time andLabor Management (TLM).Price conditions, including surcharges or discounts, may be applied to the price charged for a product in a purchaseorder or contract. Price conditions are based on contracts, list prices, or product and supplier information and mayhave a fixed validity period. A surcharge, for example due to extra delivery costs, may be added in addition to theregular price of the product. A discount could be a result of a cash, trade, or quantity discount.Tax on materials and services occurs in purchasing transactions like purchase orders and supplier invoicing. Taxabroad is applicable when your company needs to apply foreign taxes. In purchasing, it is possible to receive a supplierinvoice with foreign tax even if the company is not registered with the foreign tax authority. The system automaticallydetermines the applicable tax in the supplier invoicing process.More information: Calculation of Tax Abroad for Services

PrerequisitesThe main prerequisite in business configuration is the activation of the Purchase Request and Order Managementbusiness package.

Configuration settings are usually performed by an administrator. If you do not have the requiredauthorization, contact your administrator.

One or more of the following business processes are running in your company: ● Basic procurement processes ● Procurement of external products with stock placement and inventory management (material requirements

planning) ● Procurement of external services (project management) ● Electronic self-service procurement by your employees (self-service shopping)

Depending on your business processes and the required degree of integration into related business areas and thelevel of automation that you want to achieve, you may have to select additional business packages and businesstopics in the following areas:

● Supply Chain Planning and ControlSupply and Logistics Control business package, Handover to Purchasing business topic

● Supply Chain Setup ManagementSupply Chain Design business package

● Project ManagementProject Planning and Execution business package and Project Procurement business topic

● SourcingSourcing and Contracting business package

● PurchasingSelf-Service Procurement and Supplier Invoicing business packages

● Built-In Services and SupportBusiness Environment business package and Tax Calculation business topic

● Product and Service PricingProduct and Service Pricing business package and List Prices business topic

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IntegrationPurchase order processing may be integrated with the following:

● Incoming processes related to documents that lead to the creation of purchase orders: ○ Purchase request processing, in which you or the system can transfer completed purchase requests

into purchase orders based on the product category. ● Outgoing processes that lead to the update or completion of preceding documents, and completion or

cancellation of purchase orders: ○ Goods and services receipt processing, which allows you to create, maintain, and cancel goods and

services receipts and returns to track the delivery of non-stock materials and the completion of services ○ Time and labor management processing, which allows you to manage external service agents’ work time

through time recording, and optionally, approve and evaluate this time data. Time data can be used forprojects or purchasing to track or confirm the work performed by service agents.

○ Inbound delivery processing, which enables you to create, update, or cancel deliveries and returns, andto check that inbound deliveries are consistent with the corresponding purchase orders.

○ Supplier invoice processing, which enables you to verify all invoices entered into the system and comparethem to their corresponding purchase orders and goods and services receipts.

○ Payables processing, which enables you to handle outgoing payments and all the activities associatedwith these payments.

Process Flow1. Create purchase order

Automatic Purchase Order ProcessingDepending on the settings you defined in fine tuning, once a purchase request is completed – alternatively,once a request for quotation is completed and a quote awarded – the system automatically creates a purchaseorder in the Purchase Requests and Orders work center.The purchase order requires information about: ● Buyer ● Supplier ● Purchase order items, such as, item type (material, service, expense, limit), process type, product ID or

description, product category ID, quantity, delivery date, price, and ship-to/service location, recipient,and account-assignment (for non-stock materials and services only).

The system automatically proposes a contract or list price as a source of supply, if available.If you want to review the purchase order created by awarding a quote before you release it, you have to selectthe Create Reviewable Purchase Order from Quote business option during scoping.To find this business option, go to the Business Configuration work center and choose the ImplementationProjects view. Select your implementation project and click Edit Project Scope . In the Scoping step of theproject, ensure that Purchase Requests and Order Management is selected within Purchasing. In theQuestions step, expand the Purchasing scoping element and select Purchase Requests and OrderManagement. Select Purchase Orders and answer the questions related to Create Reviewable Purchase Orderfrom Quote.Manual Purchase Order ProcessingYou can create a purchase order manually without reference to a purchase request in the Purchase Ordersview or from the Common Tasks of the Purchase Requests and Orders work center. You can also create apurchase order from an existing purchase request in the Purchase Requests view.You can also create a purchase order from a sales order or service order.

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A purchase order can consist of multiple purchase requests, if they have the same supplier. Other criteria forbundling multiple purchase requests into one purchase order are the supplier plus one of the following:delivery date; or delivery date and ship-to location.You can open an old purchase order and copy the details from it to create a new purchase order.

You can also set purchase orders to completely delivered or completely invoiced by clicking Finish Delivery or Finish .Invoice

If you do not want to specify a fixed price to a non-stock material or a service, you can assign an uppervalue limit with the Limit item type.

For more information, see Create a Purchase Order Manually [page 97].2. Send purchase order

If you have defined automatic purchase order creation in your fine tuning, the system automatically sendsthe completed purchase order to the supplier and updates the status to Sent. Purchase orders withincomplete data will appear in your worklist for manual processing in the Purchase Orders view.When you manually create a purchase order that contains all required data including a source of supply, youclick Order to send the purchase order to the supplier. The system sets the status to Sent.The system automatically sends the following information: ● The purchase order to the supplier ● Accounting-relevant information to General Ledger ● An invoice due notification to Supplier Invoicing ● A purchase order notification to Supply Control or Project Management (if configured)

If the purchase order references a contract, the system automatically generates releases againstthis contract.

The output channel for the purchase order can be set in the Supplier Base work center, in theSuppliers view. Select the supplier and choose Edit . The output channel is maintained onthe Communication tab page, under Collaboration.If no output channel is maintained for the supplier, the system sets the output channel to thesystem default. In this case, once the purchase order has been ordered, the success messageis incomplete because the output channel is missing.After the purchase order has been sent, this output channel can then be displayed on theOutput History tab.

Changes to ordered purchase order is communicated to supplier (via e-mail, fax or post) only if there is achange in the values of the attributes that are selected in Purchase Order Output Control Settings.If purchase order is communicated through e-mails, you can select the parties to whom these e-mails can besent from Purchase Order Send Email Control Settings. You can select a party to send an email directly orkeep them in CC. Parties involved are: ● Buyer Responsible ● Supplier ● Supplier Main Contact Person

Supplier will be selected by default.

● A party must be selected to send an email. ● You can save the settings, provided you have a party selected in Send To.

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You also need to take care of dependent attributes. For example, when you change quantity, it automaticallyleads to a change in net value at item and header. These settings will not be applicable in case orderedpurchase order is updated and approval is triggered.

This setting does not have any impact on communications to other Business ByDesign objects likeGeneral Ledger, Supplier Invoice, Supply Control, Project etc.

To find these business configuration settings, go to the Business Configuration work center and choose theImplementation Projects view. Select your project and click Edit Project Scope. In the scoping step of theproject, ensure that Purchase Orders is selected within Purchasing. After scoping, you should do the fine-tuning for Purchase Order Output Control Settings and in the Activity List under Implementation Projects view.

3. Approve purchase order (Optional)Depending on the approval settings in your solution, the purchase order may need to be approved by amanager or designated approver. If the total net value of the purchase order is exceeded, in the Managing MyArea work center, the approver can accept or reject the purchase order or send it back to you for revision.For more information, see Purchase Order Approvals and Approval Rules.

4. Create purchase order acknowledgment (Optional)When the supplier confirms the purchase order, you use the system to create a purchase order (PO)acknowledgment either automatically or manually. For example, when a service order is created, it in turncreates a service order confirmation in the supplier system. Once the service order confirmation is released ,a goods and service acknowledgement is created.If you receive PO acknowledgments from suppliers by fax, mail, or as an e-mail attachment, you need toprocess the PO acknowledgements manually. If the supplier accepts the entire purchase order as requested,you can click Quick PO Acknowledgment in the Purchase Orders view, and the system creates the POacknowledgment automatically. Otherwise, you can use the New Purchase Order Acknowledgment quickactivity in the Purchase Orders view to create and process the PO acknowledgments in detail.

If the supplier uses Adobe Interactive Forms, you can fully automate the purchase orderacknowledgment creation and update process in your system. The system checks automatically if thequantity and delivery date of this PO acknowledgment match those of the purchase order. Onlyexceptions result in manual processing steps.

For more information, see Purchase Order Acknowledgments [page 89].

The system is now prepared to handle the delivery of ordered products. Goods and services receipt processes aretriggered for non-stock materials and services, warehouse inbound processes for stock materials.

See AlsoAutomatically Created Purchase Orders [page 87]Purchase Order Acknowledgments [page 89]Tax Determination [page 152]Withholding Tax Determination [page 172]Follow-Up Document SettingsPurchase Request Processing [page 63]Third-Party Order Processing [page 36]

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4.2.3.2 Third-Party Order Processing

OverviewYou, as supply planner, sales representative, or buyer working as the third-party order processing coordinator ofyour company, can use third-party order processing to coordinate and monitor the direct shipment of a product toyour customer by a supplier rather than your own company.The following is an example of a typical process flow based on the business scenarios Order-to-Cash and Procure-to-Pay (Stock). Your company sells a product to a customer. However, you do not supply the product to the customeryourself. Instead you order it from a supplier and instruct this supplier to send it to the customer's address. Thesupplier then invoices your company accordingly. Based on the shipment information from your supplier, yourcompany, in turn, invoices the customer. Variants of this process flow are possible.For more information, see business scenarios:

● Order-to-Cash (Third-Party Order Processing — Material) ● Order-to-Cash (Sell-from-Stock) ● Procure-to-Pay (Stock)

This process supports materials bundled together into kits.If you use kits in your sales processes, please note that the sales kits are now called kits in SAP BusinessByDesign system.

Prerequisites

Configuration Settings

Configuration settings are usually performed by an administrator. If you do not have the requiredauthorization, contact your administrator.

Third-Party Order Processing is enabled in your solution configuration. To find this business option, go to theBusiness Configuration work center and choose the Implementation Projects view. Select your implementationproject and click Edit Project Scope .For this example business process, the settings for the business scenarios Order-to-Cash and Procure-to-Pay(Stock) have been made.Additionally, for Third-Party Order Processing, the following has been defined:In Scoping, these business topics must be activated in the following sequence:

● The Sell Standard Products business topic in the Product and Service Portfolio for Sales business package ● The Sales Orders business topic in the Selling Products and Services business package ● The Third-Party Procurement business topic in the Purchase Request and Order Management business

package ● In the Purchase Requests business topic of the Purchase Request and Order Management business package,

the scoping question Do you want purchase orders to be created automatically from purchase requests? hasbeen answered with Yes.

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If your company does not keep products in stock but always deliver them directly from your suppliers, you have todeselect the Shipping business topic in the Outbound Logistics business package. This business topic is automaticallyselected when the Sell Standard Products and Sales Orders business topics are selected.The following master data settings are fulfilled:

● In the product master, the product is defined as a product to be purchased and sold, which means that boththe status of the Purchasing tab and the status of the sales organizations in the Sales tab are set to Active.This is done in the Materials view of the Product Data work center.

● A purchasing contract or list price for one or more suppliers from which the product can be delivered hasbeen created in the Sourcing and Contracting work center.

● The product is assigned to a product category for which automatic purchase order creation is activated. Inthis case, the purchase order is created automatically when the sales order is submitted. This is done in thePurchase Requests and Orders work center (Define Automatic Creation of Purchase Orders common task).

You can also configure the solution to post third-party direct shipment documents to inventory inFinancials. To find the business option to configure this, select your implementation project and click

Edit Project Scope . In the Scoping step of the project, ensure that Inventory Valuation is selected withinFinancial and Management Accounting. In the Questions step, expand the Inventory Valuation scoping elementand select Valuation of Purchases and Material Movements. Under Group: Valuation of Purchases and MaterialMovements, select and answer the question for the Activation of Inventory Postings for Third-Party DirectShipment business option.

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Process Flow

Third-Party Order Processing

1. Creating the Sales OrderIn the Sales Orders view of the Sales Orders work center, the sales representative creates a sales order foran account and enters an item for a product.The system: ● Carries out sourcing to determine a source. For the purposes of this scenario, this product can be

supplied only by a supplier. Therefore, the system sets the Fulfillment indicator to External andautomatically proposes a supplier.The sales representative can change the supplier by assigning a new source of supply.For more information, see Sales Orders Quick Guide.

● Triggers an availability check which is based on the supplier lead time. If you have a purchasing contractwith the supplier, the supplier lead time is taken from this contract. Otherwise, the supplier lead time istaken from the product master where it could be defined supplier specific.For example, if the confirmed delivery date is later than the requested delivery date because of thesupplier lead time, a yellow ATP traffic light is displayed. The requested quantity is either confirmed atthe requested delivery date or at a later date depending on the supplier lead time.For more information, see Availability Checking in Third-Party Order Processing Scenarios.

● Requests a product valuation to determine the purchasing price specific to the supplier and to calculatethe profit margin of the sales order.For more information, see Profit Margin.

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2. Creating the Purchase OrderThe sales representative saves and releases the sales order and sends an order confirmation to the customer.Depending on the output settings, he or she uses e-mail, fax or print to do so or a B2B message is sent to thecustomer automatically.The system: ● Sets both the status of the sales order and the delivery status in the sales order to In Process. ● Creates a customer demand with the delivery type Third-Party in the Customer Demand view of the

Outbound Logistics Control work center. The release status of the customer demand is set to Releasedand the delivery status to Not Started.After you have released the sales order, you can no longer change the supplier in the sales order.For more Information, see Customer Demand Quick Guide.

● Creates a purchase request and a purchase order in the Purchase Requests and Orders work center asfor the purpose of this scenario the automated purchase order creation has been defined.The purchase order has the process type Third-Party. The status of this purchase order is set to Sent,meaning that the supplier has been informed.For more information, see Purchase Orders Quick Guide [page 71].

● Displays the purchase order of the process type Third-Party in the Monitor Purchase Orders view of theSupply Control work center. Here, the supply planner can monitor the progress of the purchase orderfrom a planning and logistics perspective.For more information, see Quick Guide for Monitor Purchase Orders.

3. Receiving the Supplier ConfirmationOnce the supplier has replied to the purchase order, the buyer creates a purchase order acknowledgementto record the delivery quantity and the delivery date confirmed by the supplier. This is done in the PurchaseOrders view of the Purchase Requests and Orders work center.For more information, see Create a Purchase Order Acknowledgement [page 101].The system: ● Changes the status of the purchase order from Sent to Acknowledgment Received. ● Updates the customer demand with schedule lines containing the quantities and delivery dates based

on the confirmation of the supplier. ● Creates a third-party purchase order in the Third-Party Purchase Orders view of the Third-Party Order

Fulfillment work center. This third-party purchase order has the status Ordered.4. Receiving the Delivery Acknowledgement

Once the supplier has shipped the product to the customer and sent you a copy of the delivery note, the buyeror the sales representative records it by going to the Third-Party Purchase Orders view of the Third-PartyOrder Fulfillment work center and creating the third-party delivery notification.For more information, see Quick Guide for Third-Party Purchase Orders .The buyer or the sales representative saves and releases the third-party delivery notification.The system: ● Creates a third-party inbound delivery with the status Released. ● Creates a third-party outbound delivery with the status Released. ● Creates a goods and activity confirmation based on the information in the third-party outbound delivery.

This confirmation is sent to financial accounting. Based on this outbound delivery, the system createsthe outbound delivery invoice request. This is visible in the Invoice Requests view of the CustomerInvoicing work center with the status To Be Invoiced.For more information, see Quick Guide for Invoice Requests.

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If you have selected the option of posting third-party direct shipment documents to inventory inthe solution, the goods and activity confirmation is posted to Financials with two additional itemsfor inventory that represents the third-party outbound and inbound deliveries.

● Updates the total goods receipt quantity in the purchase order. The items appear in the PurchasingDocument Items view of the Inventory Valuation work center.For more information, see Purchasing Document Items Quick Guide.

● Changes the purchase order status to Follow-up Document Created and the delivery status to CompletelyDelivered and updates it with the total delivery quantity

● Updates the final delivery date in the sales order. The items appear in the Sales Document Items view ofthe Cost and Revenue work center.For more information, see Sales Document Items Quick Guide.

● Changes the delivery status in the sales order to Finished and updates the quantity delivered. The overallstatus of the sales order remains In Process.

● Changes the delivery status of the customer demand to Finished. ● Updates the schedule lines of the customer demand with the fulfilled quantities and the shipment date. ● Informs supplier invoicing that an invoice for the purchase order can be verified.

5. Receiving the Supplier InvoiceOnce the supplier has sent you the invoice, the accountant creates and posts a new supplier invoice withreference to the third-party purchase order in the Invoice Entry view of the Supplier Invoicing work center.For more information, see Create an Invoice or Credit Memo with Reference to Preceding Documents[page 212].The system: ● Saves the document in the Invoices and Credit Memos view of the Supplier Invoicing work center.

For more information, see Quick Guide for Invoices and Credit Memos (in Supplier Invoicing)[page 239].

● Forwards the details of the transaction to the general ledger.The system creates a journal entry for the supplier invoice, posts the supplier invoice as payables in thegeneral ledger, and releases the invoice for payment.For more information, see Journal Entries Quick Guide.

● Updates the purchase order status to Finished and sets the invoice completed status to Invoiced.6. Creating the Customer Invoice

Based on the outbound delivery invoice request, the accountant creates and releases the customer invoicein the Invoice Requests view of the Customer Invoicing work center. Or, the accountant waits until the nextscheduled invoice run when the system automatically processes the invoice requests and creates andreleases the invoice.For more information, see Quick Guide for Invoice Requests.The system: ● The system creates a journal entry for the customer invoice and posts the customer invoice as revenues

and receivables as journal entry in the general ledger. In addition, it creates an open item in the customeraccount. When the payment is received, this open item is cleared. The payment is posted as a cashreceipt in the general ledger.

● Updates the sales order item invoice status to Finished . If no other items exist, the system sets the salesorder status to Completed.

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4.2.3.3 Process Types of Purchase Order Items

OverviewThe process type classifies the type of procurement process for a purchase order item in the Purchase Orders viewof the Purchase Requests and Orders work center. Depending on the item type, different process types are available.

FeaturesMaterialsFor material items, the following process types are possible:

● Non-StockFor the procurement of materials that are required for consumption rather than to be held in stock, forexample, laptops or printers, the process type is Non-Stock.

● To-StockFor the procurement of materials that are supposed to be added to the warehouse and to be booked to thestock account, for example, spare parts or raw materials, the process type is To-Stock.

● Third-PartyFor the procurement of materials that are supplied to a third party, the process type is Third-Party.

Services, Limits, and ExpensesFor service items, limit items, and expense items, the following process types are possible:

● DirectFor the procurement of service, limit, and expense items that are ordered directly for your company, theprocess type is Direct.

● Third-PartyFor the procurement of service, limit, and expense items that are ordered for a third party, the process typeis Third-Party.

See AlsoPurchase Order Processing [page 77]Third-Party Order Processing [page 36]Limit Items [page 94]

4.2.3.4 Automatically Created Purchase Orders

OverviewAutomatic creation of purchase orders allows you to define whether a purchase order is created automatically ormanually from a purchase request.Using automatic creation of purchase orders is relevant if you want to automate part of the procurement process.This saves time, as you only have to manually create purchase orders in cases where there is no source of supplyassigned to the purchase request.

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This activity can be accessed through the Define Automatic Creation of Purchase Orders common task of thePurchase Requests and Orders work center and through the Business Configuration work center.

Configuration settings are normally performed by an administrator. if you do not have the requiredauthorization, contact an administrator.

Default creation optionIn the system, the default creation option is initially set to manually create purchase orders in all cases. This defaultcreation option can be changed if required.

● Create Purchase Order ManuallyIn all cases, the buyer manually creates purchase orders from purchase requests.

● Create Purchase Order AutomaticallyWhen no source of supply is assigned to purchase requests, the buyer creates the purchase orders manually.In all other cases, the system creates purchase orders automatically.

If a source of supply exists that is relevant to a purchase request, the system always automaticallyassigns that source of supply.

Additional creation optionsIn addition to the default creation option, the buyer can also set creation options for specific product categories.These creation options are the same as those that can be selected for the default creation option. When setting upcreation options for specific product categories, ranges or sets of values can be used instead of entering every singleproduct category.

PrerequisitesThe following is required:

● The Purchase Requests and Orders work center or Business Configuration work center is assigned to you toallow you to maintain the settings for automatic creation of purchase orders in the Automatic Creation ofPurchase Orders activity.

● The product categories for which the buyer wants to define creation options have been maintained in theProduct Data work center.

IntegrationAutomatic creation of purchase orders is integrated with the following work centers:

● Purchase Requests and Orders ● Product Portfolio ● Product Data

See AlsoAdd a Purchase Order Creation Option for a Specific Product CategoryAutomation of Supplier Relationship Management [page 17]

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4.2.3.5 Purchase Order Acknowledgments

OverviewA purchase order (PO) acknowledgment is a confirmation from a supplier to deliver specified quantities of productsat specified prices within specified times.A PO acknowledgment can be either fully acknowledged with no deviations or partially acknowledged. Deviationsfrom the original purchase order concerning quantities, delivery dates, or prices, can be recorded. You, as the buyer,can accept or reject the deviations.In the Purchase Requests and Orders work center, if you accept changes to the PO acknowledgment, the systemupdates the original purchase order.

Creating a PO AcknowledgmentThe PO acknowledgment allows suppliers to respond to your purchase orders. With this response, the supplier canaccept the terms and conditions of the purchase order, propose changes to particular aspects of the purchase order,or reject the purchase order.A PO acknowledgment can be created:

● AutomaticallySuppliers can send their response to a purchase order in XML format electronically using electronic dataexchange (EDX) or as an interactive form. The system uses the information from the XML file or interactiveform to create the PO acknowledgment automatically.If the supplier uses Adobe Interactive Forms, you can fully automate the PO acknowledgment creation andupdate process in your system. The system checks automatically if the quantity and delivery date of this POacknowledgment match those of the purchase order. Only exceptions result in manual processing steps.

● ManuallyAlternatively, suppliers can communicate the PO acknowledgment details in a print form by fax, mail, or e-mail as an attachment. As the buyer, you enter these details manually into the system.Before saving a new PO acknowledgment, you can run a system check to verify the correctness of the data.The system compares the PO acknowledgment with the corresponding purchase order to check for anydeviations. If there are deviations, the PO acknowledgment has to go through an approval process where youmust decide whether to accept or reject the changes. If you reject the changes, the purchase order remainsunchanged. If you accept the changes, the system updates the purchase order accordingly.

For a purchase order that is confirmed without deviations by a supplier, in the Purchase Orders view, you canclick Quick PO Acknowledgment to create a PO acknowledgment in one step.

For externally created PO acknowledgements containing kit items, if pricing is available for kit header, then itwill be distributed to kit components proportionally based on cost distribution. If pricing is available at kitcomponent level, it will be aggregated to kit header from the components. If pricing is available from both kitheader and kit items, kit header price will be considered.

For more information, see: Create a Purchase Order Acknowledgment [page 101] and Create a Purchase OrderAcknowledgment with Delivery Schedule [page 102].

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Creating Subitems for Limit ItemsIf a limit item is selected, a subitem can be created for this limit item by clicking the Specify Items for Limit button.You can then enter detailed material or service items for this limit item.

Creating New ItemsIn the PO acknowledgement, you can create new items by selecting an item and clicking the Add Row button.

Removing Items or SubitemsNew items without reference to a purchase order can be removed using the Remove button. If an item already hasa reference to a purchase order, it cannot be removed any more.

Value LimitFor limit items without subitems, the Acknowledged Value Limit is the limit amount acknowledged by the supplier.The limit can be detailed by specific service or material items in goods and services receipts and/or invoices laterin the procurement process.For limit items with subitems, the Buffer for Additional Items is the remaining limit amount not yet detailed in thepurchase order acknowledgement but it can be detailed by specific service or material items in goods and servicesreceipts and/or invoices later in the procurement process.

Additional Information for Kits in PO Acknowledgements ● Once a PO acknowledgement is created in the system containing kit items, you can edit kit details at the

header, but you cannot edit kit details at component level. ● Cost distribution is based on the percentage defined at kit component level during the kit definition. ● Purchase order acknowledgement schedules will be supported only at the kit header level.

See AlsoReceiving and Processing PO Acknowledgments [page 92]Purchase Order Processing [page 77]Automation of Supplier Relationship Management [page 17]Configuration: Automatic Accept Deviation on Purchase Order Acknowledgement [page 76]

4.2.3.6 Sourcing Rank in Assign Source of Supply

OverviewA source of supply can be assigned to a product in a number of ways:

● You can assign it in each purchase request or in a purchase order (PO) when you create a PO manually.

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● You can assign the same source of supply to multiple purchase requests within the worklist for purchaserequests.

The system always checks if there are any valid sources of supply available, such as a contract, and provides youwith an automatically generated list, in order of suitability, called a sourcing rank.The sourcing rank is a list showing sources of supply with contracts or list prices that match the desired product orproduct category. The ranked list is always displayed with the most suitable source of supply at the top, running tothe least suitable at the bottom.The list is ranked using the “Olympic” method. This means that, for example, if there are two suppliers who areequally suitable, they are both numbered first, then the next suitable will be numbered third, and so on.The system compares all the sources of supply in the list using a preset and inflexible tree of criteria. The systemcompares all the available sources of supply using the first criterion. If this does not result in a single most suitablesource, then the next criterion is used to discern which supplier is most suitable, and so on, until all available sourcesof supply have been ranked.

Ranking CriteriaThe criteria used to compare and rank the available sources of supply are as follows:

1. Fixed Source of SupplyIn the Sourcing and Contracting work center, you can assign a contract or a list price to a product as the fixedsource of supply. When this product is ordered, the assigned fixed source of supply has the highest rank.

2. Type of Sourcea. Contracts

If suppliers are currently under contract with the buyer, they are given a higher position within thesourcing rank.The rank of contracts is determined by the following rules in descending order:1. Quota Arrangement

If a contract currently exists, the system checks and compares any current quota arrangements. Ifa quota arrangement exists for two or more contracts for a certain product, it can be used as thebasis for the supplier’s suitability for fulfilling the order.

2. PriceThis criterion compares the different suppliers’ prices for the required product.

3. FulfillmentThis criterion only applies to contracts and is relevant if there are contracts with the same price.The contract with the lowest released quantity is selected first.

4. LatenessIf none of the other criteria above result in a suitable source of supply being found, then the availablecontracts are compared based on how soon after the delivery date specified by the buyer thesuppliers are able to deliver the required products.

b. List PricesThese are the prices of the requested products issued by the supplier. List prices are only ranked inascending order.

A contract always has a higher priority than a list price, unless the list price was set as a fixed sourceof supply.

If no contract or list price is available, the system automatically searches for existing purchase orders, which can beused as examples of previous business with a supplier, and therefore as an indicator of its suitability for supplying

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the product. When using purchase orders as the basis for assigning a source of supply, the only criterion used whenranking them is the price.

See AlsoSourcingSource DeterminationList PricesPurchasing Contract ProcessingPurchase Order Processing [page 77]

4.2.3.7 Receiving and Processing PO Acknowledgments

OverviewIn the Purchase Orders view of the Purchase Requests and Orders work center, when a supplier acknowledges apurchase order (PO), either the system automatically creates a purchase order acknowledgment (POacknowledgment) or you create one manually.A PO acknowledgment from a supplier can be received and entered in the system in the following ways:

● Automatically by interactive form or by business-to-business (B2B) communicationWhen a supplier sends a PO acknowledgment electronically, the system automatically creates a POacknowledgment.

● Manually, as a print form, based on a fax, mail, or e-mail attachmentWhen a supplier sends a PO acknowledgment by fax, mail, or e-mail, you manually create a POacknowledgment using the New Purchase Order Acknowledgment quick activity.

Process FlowThe different methods of receiving and processing a PO acknowledgment are described below:

Receiving PO Acknowledgments by Interactive Form (Automatic System Entry)You can create a purchase order in Purchase Requests and Orders work center under Common Tasks and also inPurchase Orders view. After filling the required fields, click You Can Also and then Edit Output Settings. At OutputDetails tab, choose Purchase Order (Interactive) in Template Name and E-Mail in Send By, and fill in the e-mailaddresses as required under E-mail Settings. When you order a purchase order and the status of the purchase orderis Sent, the supplier receives an e-mail with the attachment Purchase Order Interactive.A supplier receives a purchase order as an interactive form and returns the corresponding PO acknowledgmentelectronically.If the supplier:

● Accepts the purchase order without deviations, the system automatically confirms this by creating a POacknowledgment and changing the status of the purchase order to Acknowledged.

● Accepts the purchase order with deviations, he can make changes in the purchase order interactive form. Asupplier can edit a purchase order interactive form if he chooses to make changes in the purchase order andreturn the purchase order acknowledgement with deviations. He can do that by clicking the

Accept with Deviation . The purchase order interactive form is then editable for the following fields:

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○ Acknowledged Price ○ Acknowledged Quantity ○ Acknowledged Delivery Date/Service period

On accepting and submitting by clicking Accept with Deviation , the system will auto drop an e-mail to be sentby the supplier to you. Once the mail is sent, purchase order status will change to AcknowledgmentReceived in the system. In purchase order overview, click on Check Deviating Purchase OrderAcknowledgement for the changes that the supplier had acknowledged.

● Rejects the purchase order, the system creates a task in your purchase order worklist. You must open thetask and accept it, which cancels the purchase order and changes the status to Rejected.

Receiving PO Acknowledgments by B2B communication (Automatic System Entry)A supplier sends a PO acknowledgment by B2B communication. The system automatically enters the POacknowledgment and confirms all or some of the items in the purchase order depending on the supplier’s response.If the supplier:

● Accepts the entire purchase order without deviations, the system automatically confirms this by creating aPO acknowledgment and changing the status of the purchase order to Acknowledged.

● Accepts selected items in the purchase order without deviations, the system automatically confirms this bycreating a purchase order acknowledgment and changing the status of the purchase order in the system toPartially Confirmed. ○ If the supplier accepts the remaining items, the system automatically confirms this by creating additional

PO acknowledgments and changing the status of the purchase order items to Acknowledged and thestatus of the purchase order to Partially Acknowledged.

○ If the supplier rejects the remaining items, the system creates a task in your purchase order worklist.You must open the task and accept it, then the system automatically cancels the remaining items in thepurchase order. You can create a new purchase order for the remaining items and send it to a differentsupplier.

● Accepts the entire purchase order but makes changes to fields, such as quantity, value, or delivery date, thesystem creates a task in your purchase order worklist. You must open the task and resolve the deviations. ○ If you accept the deviations, the system updates the purchase order from the PO acknowledgment. The

updated purchase order is automatically sent to the supplier. ○ If you reject the deviations, the system automatically acknowledges the purchase order as originally

ordered. ● Accepts selected items in the purchase order but makes changes to fields, such as quantity, value, or delivery

date, the system creates a task in your purchase order worklist. You must open the task and resolve thedeviations. ○ If you accept the deviations, the selected items are updated and a message is sent to the supplier. ○ If you reject the deviations, the system automatically acknowledges the purchase order as originally

ordered. ● Rejects the purchase order, the system creates a task in your purchase order worklist. You must open the

task and accept it, then the system automatically cancels the purchase order and sends a cancellationmessage to the supplier.

If the purchase order id sent by the supplier is not valid that is the purchase order could not be determined inthe system, then a BTM task will be created, and which will be sent to all the key users.

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Receiving PO Acknowledgments by Fax, Mail, or E-Mail (Manual Entry)A supplier sends you a PO acknowledgment as a print form by fax, mail, or e-mail. You manually enter this POacknowledgment in the system and confirm the entire purchase order.If the supplier:

● Accepts the entire purchase order without deviations, you click either New PO Acknowledgment to accept thePO and create a PO acknowledgment, or Quick PO Acknowledgment to create the PO acknowledgment in onestep.

● Accepts the entire purchase order but makes changes to fields, such as quantity, value, or delivery date, youclick New PO Acknowledgment to manually create a PO acknowledgment. ○ If you accept the deviations, you can update the purchase order. ○ If you save the deviations, the system automatically acknowledges the purchase order as originally

ordered.

If a PO acknowledgment has deviations but the PO is not updated when the acknowledgment is created, thesystem creates a task in the worklist to indicate that there is a deviation. In the Purchase Orders view worklist,you can open the PO in the Purchase Order screen to update the editable fields, such as quantity or value.

Updating PO AcknowledgmentsYou can use the Change PO Acknowledgment quick activity to update an existing PO acknowledgment in the system.You access the Change PO Acknowledgment screen in the Purchase Orders view worklist by clicking the POAcknowledgment link in the row of a selected purchase order. This opens the list of PO Acknowledgments for PurchaseOrder. You then select the purchase order acknowledgment that you want to change and click

Change PO Acknowledgment . You can change the confirmed quantity, delivery date, or price of a POacknowledgement, and its corresponding purchase order, by selecting the line item, entering the information in theappropriate field, then clicking Accept Deviations .

4.2.3.8 Limit Items

OverviewIn the SAP Business ByDesign solution, limit items are items that are assigned a maximum value limit rather than aprice in a purchase document. A limit item is used in a shopping cart or purchase order when you do not know thedetails of the material or service you want or the quantity that you need.When creating a limit item in a shopping cart or purchase order, a material, service, or related expense is not specified.This information is entered later in the goods and services receipt or supplier invoice. For example, if a service, suchas a repair, needs to be done, but you do not know how many hours it will take, you can add a limit item to the purchaseorder and assign the maximum amount that the repair can cost. Once the repair is completed, you can fill in thedetails in the relevant follow-up document.If the value limit is exceeded for a limit item, the document is posted but sent for approval to the relevant manageror designated approver.

Creating a Limit ItemWhen you do not know the details of a non-stock material or service that you want, you can create a limit item in ashopping cart or in a purchase order.

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Limit Items in Shopping CartsWhen adding limit items to shopping carts, you only need to provide a product description, product category, deliverydate, and value limit.Employees shopping on behalf of colleagues can add limit items to their shopping carts by clicking:

● Go Shopping (Advanced) in the Self-Services view of the Home work center ● New Shopping Cart in the Common Tasks pane of the Project Management work center ● Go Shopping in the Common Tasks pane of the Project Team work center

For more information, see Create a Shopping Cart on Behalf [page 46].

Limit Items in Purchase OrdersPurchase orders that are created from purchase requests generated from shopping carts may already contain limititems. However, you can also manually create purchase orders with or without reference to purchase requests andadd limit items.When adding limit items to purchase orders, you need to provide a product description, product category, deliverydate, and value limit.Buyers creating purchase orders can add limit items to them by:

● Selecting a purchase request from the list in the Purchase Requests view of the Purchase Requests andOrders work center, then clicking New Purchase Order

● Creating a new purchase order in the Purchase Orders view of the Purchase Requests and Orders work center

For more information, see Bundle Purchase Requests and Create a Purchase Order [page 68] and Create aPurchase Order Manually [page 97].

Confirming a Material, Service, or Related Expense for a Limit ItemAs the buyer, you can confirm limit item details in goods and services receipts with reference to purchase orders. Ifno goods and services receipts are required, then, as an accountant, you can confirm limit item details in the relevantsupplier invoices.

Limit Items in Goods and Services ReceiptsWhen the items of a purchase order are delivered, you can create a goods and services receipt and include the detailsof the limit item. At this point, you will know the final quantities and prices of materials, services, or expenses relatedto the limit item, so you can enter in the details in the goods and services receipt. Here you enter the item type(material, service, expense), product ID (if available), delivered quantity, net price, and delivery date, service period,or expense period.If there is an assigned contract, the system automatically enters the price and description from the contract. Thisinformation cannot be updated.Goods and services receipts are created by:

● Buyers in the Goods and Services Receipts work center ● Employees in any of the Home, Project Management, or Project Team work centers

For more information, see Create a Goods and Services Receipt for Open Limit Items [page 135].

Limit Items in Supplier InvoicesYou will receive the price for the limit item with the supplier invoice. You have to manually enter the price in thesystem through the Supplier Invoicing work center. The system checks if it is included in the assigned contract. A

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warning is displayed if the price you enter is lower than the contract price. An error is displayed if the price is greaterthan the contract price.If there is a goods and services receipt, then the supplier invoice will already contain all of the details of the limit item.

Value LimitsThe value limit of a limit item in a purchase order, shopping cart, goods and services receipt, or supplier invoice isthe maximum amount that can be spent on the purchase of products within that limit item. If a contract is assignedto the limit item, then the Value Limit field shows the maximum amount that can be spent on that contract.

Only one contract can be assigned to a limit item.

The Other Value Limit field usually shows the additional maximum amount that you can spend on the purchase ofnon-contract products, but it can also include products from other contracts other than the one assigned to the limititem.In that case, the value limit is the total of the assigned contract’s limit plus any other value limits. This can includeanother contract but that contract is not attached to the limit item and is treated as a non-contract item.The Other Value Limit field can only be used if you have specified a contract for the item (the value limit).

When a contract is already assigned to a limit item, the Other Value Limit is included in and must not exceedthe Value Limit.

If you do not specify the other value limit, the system allows you to spend as much as you want.

Value Limits in DetailWhen creating a new purchase order limit item, only the Value Limit and Contract ID fields are initially ready for input.If you just specify a value limit, then items entered in the goods and services receipt with reference to that purchaseorder limit item are covered to the specified value limit. If a contract ID is specified for or assigned to that value limitin the purchase order limit item, the whole value limit is related to that contract plus any non-contract items.After entering a contract ID for the value limit in the purchase order, you will be able to also specify an Other ValueLimit in the purchase order for non-contract items or items from other contracts than the one assigned to the ValueLimit field. The value of the Other Value Limit needs to be less than or equal to the Value Limit and is included in theValue Limit, which is the total of both the value limit and the other value limit.When entering items in the goods and services receipt with reference to the purchase order limit item, both the ValueLimit and the Other Value Limit are checked by the system.

If these limits are exceeded, a warning message is displayed. If the limits are exceeded, you are still able topost the goods and services receipt, but it is submitted to the manager or designated approver for approval.The supplier invoice is created with an exception and is submitted for approval.

If you do not specify a contract, you can enter whatever price you want for the limit item.If you specify a contract in the purchase order, when you enter the details in the goods and services receipt or supplierinvoice, the system checks if the product is part of the contract and checks the price.

● In the goods and services receipt, the system automatically enters the product description and the price fromthe contract, if found. You cannot change these details.

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● In the supplier invoice, you must manually enter the price. The system checks if the product is part of thespecified contract. A warning is displayed if the price is lower than the contract. An error is displayed if theprice is greater than the contract.

If the product is not part of the specified contract, you manually enter the price; the price is accepted by the systemwithout a check. If the product is part of another contract, the system does not check the price against that contract.

ExamplesExample AValue Limit = 1000 (when there is a contract assigned)Other Value Limit = 200This means the value limit for contract items is 1000, but it might be reduced down to 800 if non-contract items areentered.Example BValue Limit = 1000 (when there is no contract assigned)Other Value Limit = 0This means 1000 is the value limit for any non-contract items. Since no contract is assigned, an amount cannot beentered for Other Value Limit, and zero is the default.

4.2.4 Tasks

4.2.4.1 Create a Purchase Order Manually

OverviewIn the Purchase Requests and Orders work center, you can create a new purchase order manually and enter thepurchase order details.

Procedure1. Start the New Purchase Order common task, which belongs to the Purchase Requests and Orders work center.

You can also go Purchase Requests and Orders Purchase Orders , click New and then choosePurchase Order.

2. Enter the Supplier.

Alternatively, you can also enter an item first. If a source of supply is assigned to the item, theSupplier is filled in automatically

3. If required, enter or update general information associated with the purchase order, such as payment termsand Incoterms.

4. To add an item, click Add Row .

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You can also add an item from a supplier catalog. For more information, see Add an Item from a Catalog.

For a purchase order kit item, you can also add columns such as Parent ID and Base Quantity throughpersonalization.

5. In the Item Type list, choose the item type for the product: material, service, expense, or limit. For kit item,choose the item type for the product as material.

6. In the Process Type list, choose the type of procurement process. For kit items, choose To-Stock type ofprocurement process.For more information, see Process Types of Purchase Order Items [page 87].

7. Enter the product ID. For kit items, enter the product ID for the kit header. On entering the product ID, it willautomatically explode into its kit components.

It is also possible to create a free-text item by entering the product description and product category.You must enter related product information manually.For purchase orders with free-text items, the account determination group for the product categorymust be entered.

8. Enter the required quantity of the product. For kits items, enter quantity in each for the kit. Values for quantityin the header are populated to the kit components. You cannot change the quantity for the kit components.Usually, a contract or list price is associated with the purchase order item, so the system automaticallydisplays the gross price. The system then calculates and displays the expected net value. If there is no contractor list price associated with the purchase order or item, you can enter the gross price manually.

9. Enter the ship-to or service location ID. For kits, the same value will be picked for all the kit components. Kitcomponents will be disabled and no update will be possible for the same.

10. Depending on the item type, in the Details section, enter the delivery date, service period, or expense period.

● If you do not enter a delivery date manually, a delivery date (today + 7 days) will be proposedautomatically by the system.

● For follow-up documents flag settings such as purchase order acknowledgement expected,goods and service receipt expected, invoice expected and evaluated receipt settlement; youcan define default values in the purchase order item settings table. Certain fields in settingstable are disabled as per standard process definition. Settings can be overwritten by the datamaintained for the flags in purchasing contract or supplier.To find this business configuration setting, go to the Business Configuration work center andchoose the Implementation Projects view, and then click Open Activity List . Under ActivityList, go to Fine-Tune and select Purchase Order Item Follow Up Document Settings.

11. Enter the account assignment details. You can split the account assignment for a purchase order line item.For example, for line item ABC, the account assignment can be split as follows:

● 20% — Cost center 1 ● 20% — Cost center 2 ● 60% — Cost center 3

The account assignment can be split only for one account assignment type. For example, the assignment canbe made only for cost centers or only projects, but it cannot be split between cost centers and projects.

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The total cost assignment percentage should not exceed or be less than 100%. The assignment willbe applicable to all other proceeding documents.If a purchase order item (which is not a limit item) has multiple costs assigned to it, and a goods andservice acknowledgement is created against it, the number of items in the goods and serviceacknowledgement must be equal to the number of cost objects of the purchase order item. Since eachitem in the goods and service acknowledgement belongs to a cost object, you must enter the deliveredquantity for that object. If you do not want to receive delivery for a certain cost object, you can deletethe item in the goods and service acknowledgement for that cost assignment.

12. Enter additional information as required.

Account assignment details can only be entered if the process type is Non-Stock or Third Party. Formore information, see Account Assignment in Purchasing [page 26].

13. Repeat these steps to add information about other products associated with this purchase order.

You can create a purchase order for free goods, that is, products that are free of charge, by manuallychanging the price to zero and deselecting the Invoice Expected check box. In the purchase order, youclick View All , which opens the editor. The Invoice Expected check box is in the Basic Data tab of theItems view.

When your company needs to apply foreign taxes, tax abroad is applicable. It is possible to receive asupplier invoice with foreign tax even if the company is not registered with the foreign tax authority.The system automatically determines the applicable tax in the supplier invoicing process. In allpurchase documents, such as purchase order or supplier invoice, the system checks the country ofthe supplier. When you click the Taxes tab, the system automatically enters the tax code and the taxcountry. This helps to carry out the tax calculation. More information: , Calculation of Tax Abroad forServices

You can activate tax trace for purchase order documents which will display trace of the tax decisiontree which is used for tax calculation for items within the document. You can activate the tax trace byclicking Activate Tax Trace under Actions . You can view the tax trace details at item level in the Taxes tab underTax Trace Details after saving the document.

14. Save the purchase order. ● To save the purchase order as a draft, click Save . Later, you can edit or complete the purchase order

by selecting it and opening it in the Purchase Order editor. ● To save and send the completed purchase order to the supplier, click Order .

You can also set purchase orders to completely delivered or completely invoiced by clicking Finish Delivery or Finish Invoice. If you set this status for a limit purchase order with subitems, the statuswill be inherited to all subitems.

15. Additional information for kits in purchase order ● When the quantity unit in kit components is not the same as that of list price, you can derive it from

list price, and set it to manual price in purchase order. ● Change in quantity in kit header will automatically reflect in kit components. You cannot edit quantity

in kit components level. ● Cost distribution is based on the percentage defined at kit component level during the kit definition.

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● If pricing is available at kit header, then it will be distributed to kit components proportionally basedon cost distribution defined. If pricing is available from both kit header and kit components, kit headerprice will be considered. If pricing is available at kit component level, and not kit header; it will beaggregated to kit header from the components, wherein cost distribution factor will not be considered.

If pricing is available at kit component level, and not kit header; it will be aggregated to kit header fromthe kit components, wherein cost distribution factor will not be considered. But, if you change the kitheader price in purchase order, the kit component costs will be derived based on the cost distributionfactor maintained, and the new prices will be saved/overwritten in the list price for the kit components.Again, if you change the kit component price, the component prices will aggregate to header level.

AlternativesInstead of creating the purchase order manually, you can also bundle several purchase requests and create thepurchase order based on these purchase requests. For more information, see Bundle Purchase Requests and Createa Purchase Order [page 68].

4.2.4.2 Add a Price Condition

OverviewYou can add a price condition, such as a discount or surcharge, to a purchase order item to influence the total valuewhen the price is calculated. Assigning price conditions can depend, for example, on your purchasing volume, therelevance of the product or service to your company’s success, or the importance of the relationship with thecorresponding supplier.

PrerequisitesYou are creating a new purchase order (manually or from purchase requests), or you are editing an existing purchaseorder.

Procedure1. Choose the Items tab and then choose the Prices tab on the lower part of the screen.

When you are creating a new purchase order, click View All to display the Items tab.

2. Click Add Row .3. Select the Price/Price Component and enter the required information.

You can specify the discount or surcharge as a percentage, a value, or a value per quantity. For moreinformation, see Pricing in Supplier Relationship Management [page 22].

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4.2.4.3 Create a Purchase Order Acknowledgment

OverviewIn the Purchase Requests and Orders work center, you can create a purchase order acknowledgment (POacknowledgment) based on information from a supplier, in response to the supplier’s receipt of your purchase order(PO).

Procedure1. Go to the Purchase Requests and Orders work center, then choose the Purchase Orders view.2. In the Show list, choose Purchase Orders not yet (Fully) Acknowledged, then select a purchase order to be

acknowledged.3. Click New PO Acknowledgment .

If the purchase order is acknowledged by the supplier with no deviations, you can clickQuick PO Acknowledgment to instantly accept the entire purchase order. The system displays a

message that the PO acknowledgment has been saved and updates the status of the purchase order.

4. If there are deviations (highlighted in red) from the original purchase order, enter the changes to the quantity,delivery date, or price in the PO acknowledgment. If there are no deviations, go to the next step.

5. Set the supplier status. The following statuses exist: ● Accepted ● Pending ● Rejected

The supplier status indicates whether the supplier has accepted or rejected the purchase order itemor whether the answer is still pending.

6. Save the PO acknowledgment and update the original purchase order, if required. ● If there are no deviations from the original purchase order, click Save . The system creates the PO

acknowledgment. Click Close to return to the Purchase Orders view. ● If there are deviations from the original purchase order, and you accept them directly, click

Accept Deviations . The system updates the purchase order with the changes entered in the previousstep.

● If there are deviations, and you click Save , the Check Deviating Purchase Order Acknowledgment taskis created in the Purchase Orders view.For more information, see Task- Check Deviating Purchase Order Acknowledgment.

● If a purchase order acknowledgment item is created without reference to a purchase order, but isbased on a new sales order item, the Check Deviating Purchase Order Acknowledgment task is created.If the task is accepted, a new item will be created in the purchase order with reference to this purchaseorder acknowledgment item and date.

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If the buyer rejects the purchase order acknowledgment in the Check Deviating Purchase OrderAcknowledgment task, a new purchase order acknowledgment is created and the purchase order iscompletely confirmed as ordered.

ResultThe PO acknowledgment is saved in the system. If there are deviations in the PO acknowledgment and you haveaccepted them, the system updates the purchase order accordingly.

In the Purchase Orders view, you can see the PO acknowledgments for a selected purchase order by clickingthe link in the Purchase Order Acknowledgment column. This opens the PO Acknowledgments for PurchaseOrder list. You can also edit a PO acknowledgment by clicking the Change Purchase Order Acknowledgmentquick activity.

4.2.4.4 Create a Purchase Order Acknowledgment with DeliverySchedule

OverviewIf a supplier cannot deliver the full quantity of an ordered product for the requested date, the supplier can create apurchase order acknowledgment with a delivery schedule that reflects the possible delivery quantities and deliverydates in the Purchase Requests and Orders work center.

Procedure1. The buyer creates a purchase order for a specific quantity of items for a specified date.2. The supplier sends a purchase order acknowledgment using e-mail, XML, or interactive form. If the supplier

cannot deliver the full ordered quantity on the requested date, the supplier can confirm multiple schedulelines related to the delivery date.

The buyer sends a purchase order for 10 items that should be delivered on December 10.The supplier sends a purchase order acknowledgment with three schedule lines. Three items canbe delivered on December 1, three items can be delivered on December 12, and four items can bedelivered on December 15.

3. The buyer receives a notification task regarding this deviation. The buyer can either accept or reject thisdelivery schedule.

If the total quantity and the delivery date are identical in the purchase order and in the purchase orderacknowledgment, but the purchase order acknowledgment contains additional delivery schedule lines,a notification task is raised.

4. If the buyer accepts the delivery schedule, the purchase order is updated with these schedule lines. Theinformation is then also sent to supply planning and is used as actual data for both planning and the goodsand services receipt.If multiple schedule lines exist for a purchase order acknowledgment, an active icon is displayed in theItems table.

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After the purchase order has been updated, this icon is also displayed in the purchase order if more than onedelivery schedule line exists. Also, the Delivery Schedule tab is only displayed in the purchase order if morethan one delivery schedule line exists.

4.2.4.5 Cancel a Purchase Order Item

OverviewIf you do no longer require an item ordered in a purchase order after you have sent the purchase order to the supplier,you can cancel the item and inform the supplier about the cancellation.

PrerequisitesThe status of the purchase order is Sent.

If the purchase order status is still In Preparation, you can simply remove the purchase order item or deletethe complete purchase order.

Procedure1. Go to Purchase Requests and Orders, then choose Purchase Orders.2. Select the purchase order where you want to cancel an item and click Edit .3. Go to the Items tab.4. Select the item that you want to cancel and click Cancel Item .

You can also cancel all items of a purchase order at once by clicking Cancel Purchase Order .

ResultThe supplier receives a notification of the cancellation.If you want to order the canceled items at a later point in time, you can copy the data from the canceled purchaseorder to create a new one.

● If a purchase order has been canceled, but the corresponding inbound delivery has been received andaccepted afterwards, it is not possible to create the supplier invoice with reference to this purchaseorder. In this case, you need to post a supplier invoice without purchase order reference. The materialinventory account will later have to be debited for the supplier invoice value.

● If there are any follow on documents to a To-Stock or Third-Party purchase order item from sales order,such as inbound delivery notification, warehouse request or unreleased Inbound delivery, thencancellation is not allowed.

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4.2.4.6 Create a Goods and Services Receipt for One or MorePurchase Orders

OverviewYou can create a goods and services receipt to track the delivery of non-stock materials or the completion of services.The goods and services receipt can be created with reference to one or more purchase orders.

PrerequisitesOne or more purchase orders have been sent to the supplier, and some or all of the items in the purchase order havebeen delivered. If you want to create a goods and services receipt for more than one purchase order, they all needto have the same supplier.

Procedure1. Go to Goods and Services Receipts Purchase Orders to Be Delivered Show by Documents .2. Select Show: Outstanding Purchase Orders or Show: Overdue Purchase Orders.

Outstanding Purchase Orders refers to materials that have not been delivered or services that have notbeen completed yet. Overdue Purchase Orders refers to materials that were not delivered by thespecified delivery date or services that were not completed within the specified service period. You canalso restrict the display to (outstanding or overdue) materials or services only.

3. Select the purchase orders for which you want to create a goods and services receipt and clickNew Goods and Services Receipt .

The system generates a goods and services receipt. The data from the corresponding purchase orders isautomatically transferred to the goods and services receipt.

4. Enter the General Information about the goods and services receipt: ● The Supplier is automatically transferred from the purchase orders. ● The Posting Date is automatically set to the current date. If required, you can change it to an eartlier

date, but it is not possible to set it to a date that is still in the future. ● The Delivery Note ID is an ID provided by the supplier for the delivery.

5. Enter the item data: ● Item Details

For intercompany field service and repair scenario, if a purchase order contains an unplanneditem and has a service order reference, then the unplanned item will have a check box Send toService Confirmation. If you select the check box, the unplanned item will also be sent to serviceconfirmation when the goods and service receipt is released.For a planned item, this option will be disabled.

● Quantities [page 127] ● Account assignment details

6. If you want to individualize the delivered materials, select the item and click New Individual Materials .

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The individual material details are displayed on the Basic Data tab page. You can update the Individual MaterialDescription, enter an Inventory ID, and assign the individual material to another individual material (Belongsto Individual Material). If the individual material belongs to a fixed asset, the fixed asset is displayed. For moreinformation, see Asset Procurement in Purchasing [page 15].

When you click New Individual Materials , the number of goods and services receipt items created equalsthe delivered quantity confirmed in the goods and services receipt. If you want to create individualmaterials for an item, the delivered quantity must not be greater than 100.

7. If you want to specify the items further, you can add notes and attachments on the Notes and on the Attachments tabs.

8. Save your entries.9. Click Post .

If you do not want to post the goods and services receipt immediately, only save your entries. Thegoods and services receipt is then available in the Receipts and Returns view with status InPreparation. You receive a task in your worklist to complete it later. As long as the goods and servicesreceipt is still In Preparation, you can also delete it if it turns out that you do not want to confirm thedelivery after all. To do so, select the document from the Receipts and Returns list and click Delete .

ResultOnce the goods and services receipt is posted, it is added to the list of receipts in the Receipts and Returns view witheither of the following statuses:

● If it requires approval, the system sets the status to Approval and sends a task to the designated approver. ● If no approval is required, the status automatically changes to Released.

If the release process is canceled before the goods and services receipt switches to Released, its statuschanges to Discarded.

When the goods and services receipt status is Released, the status of the corresponding purchase order changes toFollow-Up Document Created. Once all items are completely delivered and invoiced or a buyer finishes themmanually, the purchase order status changes to Finished.The system sends the goods and services receipt to Supplier Invoicing for invoice verification, exception handling,and payment processes. For more information, seeCreate an Invoice or Credit Memo with Reference to PrecedingDocuments [page 212] and Exception Handling [page 187]. It also forwards the data to Financials, posts thegoods return receipt there, and updates individual materials and fixed asset assignments if applicable.

Before forwarding the data, the system checks whether the relevant accounting period in Financials is open.If the accounting period is closed, the system issues an error or warning message.

AlternativesYou can also create a goods and services receipt for items from different purchase orders. For more information,see Create a Goods and Services Receipt for Items for Items from Different Purchase Orders [page 133].

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4.2.4.7 Create Output Channel Selection Rule for Purchase Order

OverviewThis document describes how to create output channel rules for purchase orders in the Output Channel Selectionview of Application and User Management work center. Administrators can create rules which are used to determinewhich output channel should be used for the output of a business document under a defined set of conditions.To configure an output channel rule for created purchase orders, changed purchase orders or cancelled purchaseorders do the following:

Procedure1. Go to the Application and User Management Input and Output Management Output Channel

Selection view. ● Select Created Purchase Order to create an output channel selection rule for created purchase orders

from the Show Rules For drop-down list and click Goor

● Select Changed Purchase Order to create an output channel selection rule for changed purchaseorders from the Show Rules For drop-down list and click Goor

● Select Cancelled Purchase Order to create an output channel selection rule for cancelled purchaseorders from the Show Rules For drop-down list and click Go

2. Depending on your selection, The Edit Output Channel Selection for: Created Purchase Order, Edit OutputChannel Selection for: Changed Purchase Order or Edit Output Channel Selection for: Cancelled PurchaseOrder opens.

3. You can use the following criteria to determine which output channel will be used for created purchase order,changed purchase orders, or cancelled purchase orders:

● Company

● Supplier ● Purchasing Unit ● Employee Responsible

In general, you can send business documents electronically by fax, e-mail, external system or you can alsosend the document to a printer. If you choose printer as the output channel, you need to specify a print queueand the number of copies you want to print.

4. You can add a row at the bottom of the table with Add Row , remove a row with Remove and insert a rowanywhere with Insert Row .

5. You can change the order of the rules with Move Up and Move Down . The system processes the rules inorder of their appearance in the list starting at the top. The more specific the rule, the higher it should beplaced in the list.

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4.2.4.8 Create Form Template Selection Rule for Purchase Order

OverviewThis document describes how to create form template rules for purchase orders in the Form Template Selectionview of Application and User Management work center. Administrators can create rules that are used to determinewhich form template is used for the output of a business document under a defined set of conditions.To create a form template rule for created purchase orders, cancelled purchase orders, or changed purchase ordersdo the following:

Procedure1. Go to the Application and User Management Input and Output Management Form Template

Selection view. ● Select Created Purchase Order to create form template rule for created purchase orders from the

Show Rules For drop-down list and click Goor

● Select Cancelled Purchase Order to create form template rule for cancelled purchase orders from theShow Rules For drop-down list and click Goor

● Select Changed Purchase Order to create form template rule for changed purchase orders from theShow Rules For drop-down list and click Go

2. Depending on your selection, The Edit Form Template Selection for: Created Purchase Order, Edit FormTemplate Selection for: Changed Purchase Order, or Edit Form Template Selection for: Cancelled PurchaseOrder opens.

3. You can use the following criteria to determine which form template will be used as the output document forcreated purchase order, changed purchase order or cancelled purchase order.

● Company

● Supplier

● Purchasing Unit

● Interactive Process4. You can add a row at the bottom of the table with Add Row , remove a row with Remove and insert a row

anywhere with Insert Row .5. You can change the order of the rules with Move Up and Move Down . The system processes the rules in

order of their appearance in the list starting at the top. The more specific the rule, the higher it should beplaced in the list.

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4.3 Reports View

4.3.1 Released Documents per Contract

OverviewShows all the documents that were called off with reference to a specified contract. Shows the buyer how intensivelya contract is used in terms of released documents per contract.

Features

Running the ReportBefore running the report, you can specify the data you want to see by making value selections for variables. Youmust make a value selection for all mandatory variables. In the system, mandatory variables are indicated by anasterisk (*).

Analyzing the ReportThis report shows an analysis of released documents per contract.The following data is filtered for this report:

● Contract Status is restricted to Released. ● Expiry Status is restricted to Not Expired and About to Expire.

To further analyze data in this report, you can drag characteristics to rows and columns.From this report, you can navigate to:

● Contract Tracking ● Purchase Order Tracking [page 111] ● Expiring Contracts

See AlsoReports ViewOverview of Reports in Supplier Relationship ManagementOverview of Data Sources in Supplier Relationship Management

4.3.2 Price History per Product and Supplier

OverviewThis report shows the price history per product and delivering supplier over the last 12 months on the basis of acalculated average price based on invoice values. You can also check the invoiced quantities to see the importanceof the purchased product for the company.

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Features

Running the ReportBefore running the report, you can specify the data you want to see by making value selections for variables. Youmust make a value selection for all mandatory variables. In the system, mandatory variables are indicated by anasterisk (*).

Analyzing the ReportThis report shows the procured quantities and the average prices by supplier for products in base unit of measureon a monthly basis for a specified time period.The following data is filtered for this report:

● Invoice Year/ Month is restricted to the last 12 months. ● Posting Status is restricted to Posted.

To further analyze data in this report, you can drag characteristics to rows and columns.From this report, you can navigate to Price Reliability.

See AlsoReports ViewOverview of Reports in Supplier Relationship ManagementOverview of Data Sources in Supplier Relationship Management

4.3.3 Monitoring of Automatic Purchase Order Creation

OverviewShows the percentage of automatically created purchase orders per purchasing unit over the last 12 months, thecorresponding purchasing value and subtotals. In this report, you can check the degree of purchasing automationfor a single or for all purchasing units.The process type (for example, Third-Party) shows you the type of procurement process for this item.

ViewsThe following views are available with this report:

● Monitoring of Automatic Purchase Order CreationShows the number and percentage of automatically created purchase orders per purchasing unit over thelast 12 months as well as the corresponding amount and percentage of purchasing value and subtotal in tableformat or as a chart.

● Rate of Automatic Purchase Order Creation per MonthShows the percentage of automatically created purchase orders and corresponding percentage ofpurchasing value in table format or as a chart. You, as the buyer, can check the degree of purchasingautomation for the purchasing unit to which you are assigned.

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Features

Running the ReportBefore running the report, you can specify the data you want to see by making value selections for variables. Youmust make a value selection for all mandatory variables. In the system, mandatory variables are indicated by anasterisk (*).Additional information is available for the following selected variables:

● Ordering Year/QuarterYou can use this variable to display data that is relevant for purchase orders in a particular year or quarter.

● Purchasing UnitYou can use this variable to display data that is relevant for one purchasing unit.

● Purchase Order StatusYou can use this variable to display data that is relevant for the processing status of a purchase order. Statusesinclude: ○ In Preparation ○ Finished ○ In Approval ○ In Revision ○ Rejected ○ Not Yet Confirmed ○ Sent ○ Confirmation Received ○ Canceled

Analyzing the ReportThis report shows an analysis of purchase orders automatically created by purchasing units.The following data is filtered for this report:

● Cancellation Status excludes Cancellation Request and Cancelled. ● Item Cancellation Status excludes Cancellation Request and Cancelled. ● Ordering Date is restricted to the last year. ● Ordering Status is restricted to Ordered.

To further analyze data in this report, you can drag characteristics to rows and columns.From this report, you can navigate to Purchase Order Tracking [page 111].

See AlsoReports ViewOverview of Reports in Supplier Relationship ManagementOverview of Data Sources in Supplier Relationship Management

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4.3.4 Monitoring Purchase Orders

OverviewThis report shows all purchase orders that have been created during a specified time period. You can check thepurchase order value, price, quantity, and status.The process type (for example, Third-Party) shows you the type of procurement process for this item.You can further analyze third-party procurement processes by using the Third-Party process type combined withone or more of the following fields:

● Sales Order ID ● Customer ● Customer's Purchase Order ID ● Follow-On Process

Features

Running the ReportBefore running the report, you can specify the data you want to see by making value selections for variables. Youmust make a value selection for all mandatory variables. In the system, mandatory variables are indicated by anasterisk (*).Additional information is available for the following selected variable:

● Purchase Order StatusYou can use this variable to display data that is relevant to the status of a purchase order.Statuses include: ○ In Preparation ○ In Approval ○ In Revision ○ Rejected ○ Not Yet Confirmed ○ Sent ○ Confirmation Received ○ Canceled ○ Follow-Up Document Created ○ Finished

Analyzing the ReportThis report shows an analysis of purchase orders by status.The following data is filtered for this report:

● Purchase Order Creation Date is restricted to the last thirty days, including today.

To further analyze data in this report, you can drag characteristics to rows and columns. ● Purchase Orders per Account Assignment

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See AlsoReports ViewOverview of Reports in Supplier Relationship ManagementOverview of Data Sources in Supplier Relationship Management

4.3.5 Expected Deliveries per Week

OverviewShows the expected deliveries of purchase order items per week for the next eight weeks. If you want to see purchaseorder details, add Purchase Order ID to your report and right mouse click on the relevant ID, choose Goto and selectDisplay Details.

Features

Running the ReportBefore running the report, you can specify the data you want to see by making value selections for variables. Youmust make a value selection for all mandatory variables. In the system, mandatory variables are indicated by anasterisk (*).Additional information is available for the following selected variables:

● Purchase Order StatusYou can use this variable to display data that is relevant to a specified purchase order status.Statuses include: ○ Sent ○ Follow-Up Document Created ○ Confirmation Received

● Delivery Week (Next 8 Weeks)You can use this variable to display data that is relevant for the purchase orders items. By default, the valueis set as the next 8 weeks, including the current week.

Analyzing the ReportThis report shows an analysis of the expected deliveries of purchase order items according to the number of expectedpurchase order items per calendar week. This report also displays the total number of purchase order items for thespecified period.The following data is filtered for this report:

● Cancellation Status excludes Canceled. ● Item Cancellation Status excludes Canceled. ● Delivery Week is restricted to the last seven days. ● Delivery Processing Status excludes Finished and Not Relevant. ● Delivery Status excludes Delivered and Not Relevant.

To further analyze data in this report, you can drag characteristics to rows and columns.From this report, you can navigate to Purchase Order Tracking [page 111].

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See AlsoReports ViewOverview of Reports in Supplier Relationship ManagementOverview of Data Sources in Supplier Relatonship Management

4.3.6 Purchase Orders per Account Assignment

OverviewThis report shows all purchase orders per account assignment that have been created over the last 7 days. Examplesof account assignments include cost center, project, and so on. You can check the total values per accountassignment and the status of the purchase orders.The process type (for example, Third-Party) shows you the type of procurement process for this item.You can further analyze third-party procurement processes by using the Third-Party process type combined withone or more of the following fields:

● Sales Order ID ● Customer ● Customer's Purchase Order ID ● Follow-On Process

ViewsThe following views are available with this report:

● Purchase Orders per Cost CenterShows all purchase orders per cost center. You can check the total values per cost center and the status ofpurchase orders.

● Purchase Orders per ProjectShows all purchase orders per project. You can check the total values per project and the status of purchaseorders.

● Purchase Orders per Sales OrderShows all purchase orders per sales order. You can check the total values per sales order and the status ofpurchase orders.

● Purchase Orders per Service OrderShows all purchase orders per service order. You can check the total values per service order and the statusof purchase orders.

Features

Running the ReportBefore running the report, you can specify the data you want to see by making value selections for variables. Youmust make a value selection for all mandatory variables. In the system, mandatory variables are indicated by anasterisk (*).

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● Header StatusYou can use this variable to display data that is relevant to the status of a purchase order.Statuses include: ○ In Preparation ○ In Approval ○ In Revision ○ Rejected ○ Not Yet Confirmed ○ Sent ○ Confirmation Received ○ Follow-up Document Created ○ Finished

● Purchase Order Creation Date (Last 7 Days)You can use this variable to display data that is relevant for the purchase orders created in the last 7 days. Bydefault, the value is set as the last 7 days; however, you can change the value.

Analyzing the ReportThis report shows an analysis of the purchase orders per account assignment according to ordered quantity, netvalue, and net value in company currency, allowing you to analyze purchase orders on a more operational level byaccount assignment.The following data is filtered for this report:

● Cancellation Status excludes Cancellation Discard and Canceled. ● Purchase Order Creation Date is restricted to the last seven days, including today. ● Item Cancellation Status excludes Cancellation Discard and Canceled.

To further analyze data in this report, you can drag characteristics to rows and columns.From this report, you can navigate to Released Documents per Contract [page 108].

See AlsoReports ViewOverview of Reports in Supplier Relationship ManagementOverview of Data Sources in Supplier Relationship Management

4.3.7 Monitoring Purchase Requests

OverviewThis report shows all purchase requests that have been created during the past seven days. You can, however,change the time period. You can check the purchase request value, price, quantity, and status.The process type (for example, Third-Party) shows you the type of procurement process for this item.You can further analyze third-party procurement processes by using the Third-Party process type combined withone or more of the following fields:

● Sales Order ID

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● Customer ● Customer's Purchase Order ID ● Follow-On Process

Features

Running the ReportBefore running the report, you can specify the data you want to see by making value selections for variables. Youmust make a value selection for all mandatory variables. In the system, mandatory variables are indicated by anasterisk (*).Additional information is available for the following selected variables:

● Follow-Up StatusYou can use this variable to display data that is relevant for one or more follow-up statuses.Statuses include: ○ Not assigned ○ No Follow-up ○ Purchase Order Created ○ Sourcing Request Created ○ Contract Created ○ Scheduling Agreement

● Creation Date of Purchase RequestYou can use this variable to display data that is relevant for the purchase requests created in the last 7 days.By default, the value is set as the last 7 days; however, you can change the value.

Analyzing the ReportThis report shows an analysis of purchase requests by follow-up status.The following data is filtered for this report:

● Purchase Request Creation Date is restricted to the last seven days, including today.

To further analyze data in this report, you can drag characteristics to rows and columns.From this report, you can navigate to:

● Purchase Requests per Account Assignment [page 115]

See AlsoReports ViewOverview of Reports in Supplier Relationship ManagementOverview of Data Sources in Supplier Relationship Management

4.3.8 Purchase Requests per Account Assignment

OverviewThis report shows all purchase requests per account assignment that have been created over the last 7 days.Examples of account assignments include cost center, project, and so on. You can check the total values per account

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assignment and the status of the purchase requests (for example, if a source of supply has already been assignedor if follow-up documents have been created).The process type (for example, Third-Party) shows you the type of procurement process for this item.You can further analyze third-party procurement processes by using the Third-Party process type combined withone or more of the following fields:

● Sales Order ID ● Customer ● Customer's Purchase Order ID ● Follow-On Process

ViewsThe following views are available with this report:

● Purchase Requests per Cost CenterShows all purchase requests per cost center. You can check the total values per cost center and the statusof the purchase requests.

● Purchase Requests per ProjectShows all purchase requests per project. You can check the total values per project and the status of thepurchase requests.

● Purchase Requests per Sales OrderShows all purchase requests per sales order. You can check the total values per sales order and the statusof the purchase requests.

● Purchase Requests per Service OrderShows all purchase requests per service order. You can check the total values per service order and the statusof the purchase requests.

Features

Running the ReportBefore running the report, you can specify the data you want to see by making value selections for variables. Youmust make a value selection for all mandatory variables. In the system, mandatory variables are indicated by anasterisk (*).Additional information is available for the following selected variables:

● Follow-up StatusYou can use this variable to display data that is relevant to the follow-up status of a purchase order. Statusesinclude: ○ No Follow-up ○ Purchase Order Created ○ Sourcing Request Created ○ Contract Created ○ Scheduling Agreement

● Purchase Request Creation DateYou can use this variable to display data that is relevant for the purchase requests created in the last 7 days.By default, the value is set as the last 7 days; however, you can change the value.

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Analyzing the ReportThis reports shows an analysis of purchase requests per accounting type.The following data is filtered for this report:

● Purchase Request Creation Date is restricted to the last seven days, including today.

To further analyze data in this report, you can drag characteristics to rows and columns.From this report, you can navigate to:

● Purchase Request Tracking [page 114]

See AlsoReports ViewOverview of Reports in Supplier Relationship ManagementOverview of Data Sources in Supplier Relationship Management

4.4 Common Tasks

4.4.1 Configuration: Automatic Creation of Purchase Orders

Overview

This document contains details and instructions regarding configuration settings. Such settings arenormally performed by an administrator. If you do not have the required authorization, contact anadministrator.

To find this activity, go to the Business Configuration Implementation Projects view. Select your implementationproject and click Open Activity List . Select the Fine-Tune phase, then select the activity from the activity list.This activity allows your buyers to define whether a purchase order is created automatically or manually from apurchase request. A buyer can set a default creation option covering all product categories that do not have theirown specific creation option. The creation option defines whether purchase orders:

● Always have to be created manually from purchase requestsThis is the predefined default creation option with product category *.

● Have to be created manually in cases where there is no source of supply assigned to the purchase request.In all other cases, a purchase order is created automatically. If a source of supply exists that is relevant to apurchase request, the system always automatically assigns that source of supply.

In addition to the default creation option, the buyer can also set creation options for specific product categories.These creation options are the same as those that can be selected for the default creation option. When setting upcreation options for specific product categories, you can use ranges instead of entering every single productcategory. To use ranges, you select the Contains Pattern (CP) operator and enter the start of the product categorytogether with an asterisk. For example, CP 10-* sets up a creation option for all product categories starting with10-.

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PrerequisitesThe product categories for which you want to define creation options have been maintained.

Procedure1. Define New Creation Option

a. To define a new creation option setting, click: ● Add Row to add a new row to the bottom of the list. ● Insert Row to insert a new row in a specific part of the list. The system adds the new row above

the selected record in the list.

You can also copy an existing creation option and overwrite the copy with different entries.To do this, select the row you want to copy and click Copy . Click Paste to insert the copieddata and overwrite the data.

b. In the Product Category column, select the product category for which you want to define a creationoption.

You must define a default creation option, which should be the most generic entry. The defaultcreation option has Product Category *.Ensure that the default creation option is the last entry in the list, because the system alwaysuses the first entry that it finds. The most specific entry should always be at the top of the tableand the most generic entry should always be at the bottom, for example:

● 10-10-10 ● CP 10-10-* ● CP 10-* ● *

c. In the Creation Options column, select one of the following creation options for the product category: ● Create Purchase Orders Manually

This option specifies that purchase orders are not created automatically by the system. Theresponsible buyer always has to create purchase orders manually from purchase requests.This option is the predefined default creation option. You can change this predefined default.

● Create Purchase Orders AutomaticallyThis option specifies that for items with no source of supply, the buyer always has to createpurchase orders manually. For items with a source of supply, the purchase order is createdautomatically by the system.

d. Click Save and Activate to save your entries.The system assigns an internal sequence number to each defined creation option.

2. Change Existing Creation Option Settinga. To change an existing creation option setting, overwrite the data you want to change. You can change

the product category, the creation option for a specific product category, or both.b. Click Save and Activate to save your changes.

3. Remove Existing Creation Option Setting

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a. To remove an existing creation option setting from the table, select the row you want to remove andclick Remove .If you remove the default creation option setting, ensure you define a new default entry.

b. Click Save and Activate to save your changes.

ExampleThere are three purchase requests:

● 5001 for consulting with no source of supply ● 5002 for consulting with a source of supply ● 5004 for moderator services with a source of supply

Product Category Creation Option

3456 – Consulting Create Purchase Orders Automatically

* (Default Creation Option) Create Purchase Orders Manually

Result: The system automatically converts purchase request 5002 into a purchase order because a source of supplyexists and the creation option allows for automatic creation of the purchase order. The responsible buyer receivespurchase requests 5001 and 5004 for further processing. Purchase request 5001 contains an item with a productcategory that has a specific creation option, but for which no source of supply exists. Purchase request 5004 containsan item for which the default creation option is relevant. The buyer must create the purchase orders manually forthese two purchase requests.

4.4.2 Configuration: Tax Classification for Free-Text Items

This document contains details and instructions regarding configuration settings. Such settings arenormally performed by an administrator. If you do not have the required authorization, contact anadministrator.

To find this activity, go to the Business Configuration Implementation Projects view. Select your implementationproject and click Open Activity List . Select the Fine-Tune phase, then select the activity from the activity list.This activity allows you to define the attributes for purchasing-document items that do not have a product ID buthave a free-text entry instead. The settings are used to determine influencing factors, such as tax rate types,exemption reasons, and taxable service points in accordance with the legal requirements of the relevant country.You need tax classification, for example, if you want to use evaluated receipt settlement (ERS).

Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

StepsDefine New Tax Classification Setting

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1. To define a new tax classification setting, click: ● Add Row to add a new row to the bottom of the list. ● Insert Row to insert a new row in a specific part of the list. The system adds the new row above the

selected record in the list.

You can also copy an existing setting and overwrite the copy with different entries. To do this, selectthe row you want to copy and click Copy . Click Paste to insert the copied data and overwrite thedata.

2. For each setting that you want to define, proceed as follows:a. In the Product Category column, select the product category.b. In the Tax Rate Type column, select the tax rate type.

Examples of the tax rate type are: Standard, Freight, Reduced. For example, a reduced tax rate mightbe valid for certain product categories in a specific country.

c. For any items that are tax exempt, in the Tax Exemption Reason column select the tax exemption reason.For example, the tax exemption reason may be due to a tax-exempted product, state or local government,or the movement of goods between European Union states.For all other items, leave this field blank.

d. For services, in the Taxable Service Point column select: ● True — If the service is taxable in the location where it is performed.

● False — If the service is taxable at the location of the service agent's company.

e. In the Country column, select the country for which the settings are valid, for example US.

f. For those countries that have region-specific or state-specific taxes, in the Region column, enter theregion for which the settings are valid . For example, Utah.

g. In the Tax Type column, select the tax type, for example Sales Tax.

3. Click Save and Activate to save your entries.The system assigns an internal sequence number to each defined setting.

Change Existing Tax Classification Setting1. To change an existing setting, overwrite the data you want to change.

Click Save and Activate to save your changes.

Remove Existing Tax Classification Setting1. To remove an existing setting from the table, select the row you want to remove and click Remove .2. Click Save and Activate to save your changes.

Follow-Up TasksIf you have defined a Taxable Service Point, assign the classification on the Tax Event tab in the Tax Returns forGoods and Services activity for the relevant country.

Example ● Tax Classification US, Product Category PC Hardware:

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Field Name Value

Product Category PC Hardware

Tax Rate Type Standard

Tax Exemption Reason blank

Taxable Service Point blank

Country US

Region All

Tax Type Sales and US Tax

Result:Susan Ladier is based in the US. She creates a shopping cart with an item from the product category, PCHardware. The item does not have a product ID. The created purchase order contains this item with a tax rate inaccordance with the classification above.

4.5 Purchase Order Item Completion Runs Quick Guide

About this documentThe Purchase Order Item Completion Runs view of the Purchase Requests and Orders work center enables you tocreate and schedule mass data runs for the completion of several open purchase orders to finish delivery and finishinvoicing. The following mass data runs is available:

● Purchase Order Completion Item Run

Business Background

Mass Data Runs (MDR)A Mass Data Run (MDR) is the automatic mass processing of a task or a business transaction. MDRs enable massprocessing of business data and are used in business processes, for example, invoice runs, payment authorizationruns, or balance confirmation runs. When a user schedules an MDR the system represents it as a background job.During scoping, it is possible to provide default variants of the MDRs. MDRs are created and maintained in the workcenters. Using the Job Scheduler, users schedule the run to execute once or regularly at specified times.In the Background Jobs view of the Application and User Management work center, you can monitor and rescheduleMDR jobs that are created by users in other work centers.For more information, see Mass Data Runs.

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Tasks

Create a Purchase Order Item Completion Run1. The purchase order item completion run allows you to finish delivery and invoicing of open purchase orders

based on certain criteria.In the Purchase Requests and Orders work center, on the Purchase Order Item Completion Runs view, click

New to open the new Purchase Order Item Completion Run screen.2. General Data

Under General Data, enter a Run ID and, a Run Description for the run.3. Control Parameters

You can select the following control parameters for creating the run: ● Finish Delivery ● Finish Invoicing

4. Selection CriteriaYou can enter the following selection criteria in days: ● Created Before ● Changed Before ● Expected Delivery Before

5. You can further filter the purchase orders considered for the run based on any one of the following: ● Selecting by purchase order ● Selecting by supplier ● Selecting by company ● Selecting by item type — Expense, Limit, Material or Service

6. Selection criteria settings for the mass data runs which will be available by default in the system are: ● Item Delivery Processing Status - Not Started, In Process ● Item Invoice Processing Status - Not Started, In Process ● Purchase Order Status – Not Yet Acknowledged, Sent, Acknowledgement Received, Follow-Up

Document Created

You can enter Creation Date, Time and Supplier ID under Settings for the mass data runs under Settings inApplication Log.

7. ReviewReview the details of the purchase order item completion run and click Save .

8. ConfirmationClick Save .

9. You can activate the run by clicking Set to Active .

Schedule a Purchase Order Item Completion Run1. In the Purchase Requests and Orders work center, on the Purchase Order Item Completion Runs view, select

the saved run and then click Actions and select Set to Active, to activate the run.2. Click Schedule to open the Schedule Job screen.3. Choose one of the following options as required:

● Choose Start Immediately to execute the run immediately.

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● Choose Run After Job and select a job. The run will then be executed immediately after the specified job. ● Choose Single Run to define a date and time for the run. ● If you want to execute the run at regular time intervals, choose Recurrence and choose a recurrence for

the run, for example, daily, weekly, or monthly.4. To save the run and return to the Purchase Order Item Completion Runs view, click Save and Close . The run

has been scheduled and will be executed as specified.5. You can view the details for each run on the Purchase Order Item Completion Runs screen by selecting the

required run.

Setting Status for a Purchase Item Order Completion RunIn the Purchase Order Item Completion view, under Actions you can set the status as:

1. Set to Active : This will set the run to Active status.2. Set to Obsolete : This will set the active run to Obsolete status.3. Undo Obsolete : This will set the obsolete run to In Revision status, and this has to be activated again to set it

to Active status.

See AlsoPurchase Orders Quick Guide [page 71]

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5 Goods and Services Receipts

5.1 Business Background

5.1.1 Goods and Services Receipt and Goods Return Processing

OverviewGoods and services receipts can be used as internal control documents to confirm the following:

● Delivery of materials ● Completion of services ● Expenses related to a purchase order ● Delivery of limit items [page 94] (in the goods and services receipt, the details and quantities of the materials

or services that were actually delivered can be specified)

Buyers can create goods and services receipts to confirm the delivery of items that they or other employees haveordered using purchase orders.Employees who have ordered products using shopping carts can create and post goods and services receipts fortheir shopping carts.

You can create goods and services receipts from the Purchase Requests and Orders work center only if theGoods and Services Receipts work center is assigned to you.

Approval may be required if the quantity of a goods and services receipt item exceeds certain tolerances.In cases where services have been completed and time sheets have been provided by service agents, the systemautomatically creates goods and services receipts from the time sheet entries after the time sheets are approved.Goods and services receipts created from Time and Labor Management (TLM) do not need approval.

Goods and services receipt processes do not support the receipt of stock materials. The Supply ChainManagement part of the solution supports the receipt of stock materials into your warehouse through itsinbound processes.For more information, see Supplier Delivery Processing.

Goods returns can be used when a material needs to be returned to a supplier, for example, because it was damagedor the wrong material was delivered.

PrerequisitesConfiguration Settings

Configuration settings are usually performed by an administrator. If you do not have the requiredauthorization, contact your administrator.

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● To enable the functionality of goods and services receipt and goods return processing, the Goods and ServicesReceipt and Non-Stock Material and Service Procurement business topics within the Purchase Request andOrder Management business package must be selected during scoping of your solution.

● To enable the functionality of shopping cart processing, the Self-Service Procurement business package mustbe selected during scoping of the solution.

IntegrationGoods and services receipt and goods return processing is integrated with the following:

● Incoming processes related to documents that lead to the manual creation of goods and services receipts: ○ Internal request processing for quick or detailed confirmation of deliveries ordered through self-service

procurement and shopping carts. ○ Purchase order processing, which allows you to create, process, and track all purchase orders and

related documents, such as purchase order acknowledgments. ○ Time and labor management processing, which allows you to manage service agents’ work time through

time recording, and optionally, approve and evaluate this time data. Time data can be used for projectsor purchasing to track or confirm the work performed by service agents.

● Outgoing processes that lead to the update or completion of preceding documents, and completion orcancellation of goods and services receipts or goods returns: ○ Project processing, which allows you to have a particular overview of project expenses for all materials,

services, and related expenses, the costs of which are assigned to the project. ○ Self-service procurement processing, which allows your employees to create and track internal requests

for products, for themselves or on behalf of other employees, using shopping carts. ○ Supplier invoice processing, which enables you to verify all invoices entered into the system and compare

them to their corresponding purchase orders and goods and services receipts.

Process FlowGoods and Services Receipt

1. After the supplier has delivered a material or completed a service requested in a purchase order, the buyercreates and posts a goods and services receipt for all or some of the items, depending on whether all itemshave been delivered.For more information see: ● Create a Goods and Services Receipt for One or More Purchase Orders [page 104] ● Create a Goods and Services Receipt for Items in Different Purchase Orders [page 133] ● Create a Goods and Services Receipt for Open Limit Items [page 135]

If the material delivered or the service completed was requested in a shopping cart, the employee whocreated the shopping cart can also confirm the delivery. For more information, see Confirm a Deliveryfrom a Shopping Cart [page 53], Quick Confirm Delivery [page 55], and Confirm the Delivery of aLimit Item from a Shopping Cart [page 56].

2. To determine whether approval is required, the system compares the delivered quantity or value of theproducts in the goods and services receipt to the quantity ordered or value in the purchase order or shoppingcart: ● If the delivered quantity or value is lower than or equal to the ordered quantity or value, the system does

not initiate an approval process.

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For limit items, if the total net value of all items is less than or equal to the value limit of thereferenced purchase order item, no approval is required.

● If the delivered quantity or value is greater than the ordered quantity or value, the system sends a taskrequesting approval of the goods and services receipt to the person responsible for the accountingobjects maintained in the receipt, either the cost center manager or project manager. The cost centermanager or project manager can approve the goods and services receipt, reject it, or return the goodsand services receipt for revision.

For limit items, if the total net value of all items is greater than or equal to the value limit of thereferenced purchase order item, approval is required.

For more information, see Process an Approval Request.3. The system sets the goods and services receipt status to Released, changes the status of the corresponding

purchase order to Follow-Up Document Created. If the release process is canceled before the goods andservices receipt switches to Released, its status changes to Discarded. Once all items are completely deliveredand invoiced or a buyer finishes them manually, the purchase order status changes to Finished. If the goodsand services receipt was created for a shopping cart, the shopping cart status is changed to Delivered (if allitems have been delivered) or Partially Delivered (if only some items have been delivered). The system alsotriggers follow-on processes in Supplier Invoicing and Financials.

4. Workflow Notification (Optional):You can create customized notifications for workflow rules for goods and services receipt in Workflow viewunder Application and User Management work center. If the workflow rules are created and set to active,changes in goods and services receipt will send notification to the responsible as defined in workflow rules.By defining workflow rules, you specify basic data for each rule such as the conditions under which the ruleis invoked, and a field is updated.Following conditions of goods and services receipt can be configured to trigger workflow notification: ● Purchase order item reference missing in GSA ● Account assignment different from PO ● GSA quantity exceeds quantity of PO ● Intercompany GSA is not released, which is again determined by:

○ Status ○ Procurement document data origin type

Goods and Services Receipt Cancellation1. If a buyer made an error when creating a goods and services receipt, he or she corrects this by canceling

some or all of the items in the posted receipt.2. The system creates a goods and services receipt cancellation with the information about the canceled items.3. The existing goods and services receipt remains in the system but its status changes to Canceled (if all items

are canceled) or Partially Canceled (if only some items are canceled).

For more information, see Cancel a Goods and Services Receipt or Goods Return [page 140].Goods Return

1. If some or all of the items delivered need to be returned to the supplier after a goods and services receipt wasposted, for example, because the wrong material was delivered or it was damaged, the buyer creates andposts a goods return.For more information, see Create a Goods Return [page 138].

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Goods return processes do not support the return of services, expense items, or stock materials. TheSupply Chain Management part of the solution supports the return of stock materials into yourwarehouse through its outbound processes. For more information, see Outbound Delivery Processingand Return to Supplier Processing.

2. The system sets the goods return status to Released, changes the status of the corresponding goods andservices receipt to Goods Returned and that of the corresponding purchase order or shopping cart to Follow-Up Document Created, and triggers follow-on processes in Supplier Invoicing and Financials.

Goods Return Cancellation1. If the buyer made an error when creating a goods return, he or she can correct this by canceling some or all

of the items in the posted goods return.2. The system creates a goods return cancellation with the information about the canceled items.3. The existing goods return remains in the system but its status is changed to Canceled (if all items are canceled)

or Partially Canceled (if only some items are canceled).

For more information, see Cancel a Goods and Services Receipt or Goods Return [page 140].

See AlsoQuantities in Goods and Services Receipts and Goods Returns [page 127]Asset Procurement in Purchasing [page 15]Third-Party Repair

5.1.2 Quantities in Goods and Services Receipts and Goods Returns

OverviewThe following quantities are relevant in goods and services receipt and goods return processes [page 124]:

● Ordered QuantitySpecifies the quantity that has been ordered for an item. It is transferred from the corresponding purchaseorder and displayed when the user creates or cancels a goods and services receipt or goods return.Example: Arthur Major orders ten new laptops for his department. The Ordered Quantity is 10.

● Delivered QuantitySpecifies the quantity that is confirmed for an item in a goods and services receipt. Per default, the DeliveredQuantity field in the goods and services receipt is prefilled with the Ordered Quantity of the correspondingpurchase order and can be updated by the user.

If the user enters a Delivered Quantity, which is greater than the Ordered Quantity, the goods andservices receipt needs to be approved before it can be released.

It is then transferred to the follow-up documents and displayed there if the user cancels a goods and servicereceipt or creates or cancels a goods return.Example: The next day, six of the ten laptops that Arthur has ordered are delivered. Arthur creates a goodsand services receipt to confirm the delivery. The Delivered Quantity is 6.

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If a delivery schedule has been defined for a purchase order, the Delivered Quantity proposed in thegoods and services receipt is reduced to the quantity that has been ordered for the current scheduleline. For more information, see Create a Purchase Order Acknowledgment with Delivery Schedule[page 102].

If a goods and services receipt is created automatically based on an expense report, the DeliveredQuantity can also be left empty. In that case, only the Net Value is displayed, for example, 55,00USD.

● Total Delivered QuantitySpecifies the sum of the quantities that have already been confirmed for an item using goods and servicesreceipts. It is displayed when the user creates or cancels a goods and services receipt or goods return.Example: A week later, two more laptops are delivered. Arthur creates another goods and services receipt toconfirm the delivery. The Delivered Quantity of this goods and services receipt is 2. The Total DeliveredQuantity is now 8.

● Open QuantitySpecifies the quantity that is still open for an item, which means, it has not been confirmed in a goods andservices receipt. It is calculated by the system and displayed when the user creates a goods and servicesreceipt:Open Quantity = Ordered Quantity – Total Delivered QuantityExample: Arthur has now confirmed the delivery of eight laptops. Two laptops have not been delivered yet.So the Open Quantity is 2.

● Returned QuantitySpecifies the quantity that is sent back to the supplier if the user creates a goods return for an item.Example: One of the laptops that have been delivered is broken, so Arthur has to send it back to the supplier.He creates a goods return. The Returned Quantity is 1.

● Canceled QuantitySpecifies the quantity that is canceled when the user cancels a goods and services receipt or goods return.It is transferred from the goods and services receipt or goods return that is being canceled.

You can only cancel complete goods and services receipt or goods return items. It is not possible tocancel only a partial quantity of an item. Therefore, the canceled quantity for an item equals thedelivered or returned quantity for this item in the corresponding goods and services receipt or goodsreturn and cannot be changed in the cancellation.In goods and services receipt cancellations: Canceled Quantity = Delivered QuantityIn goods returns: Canceled Quantity = Returned Quantity

Example: Arthur has noticed an error in the goods return document he created. He therefore cancels thegoods return. The Canceled Quantity is 1.

See AlsoPurchase Orders to Be Delivered [page 129]Receipts and Returns [page 136]

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5.1.3 Tracking of Customs Document – Mexico

This document contains text that is relevant for Mexico. To ensure that the system displays the correct text,select Personalize My Settings . Select Onscreen Help and, under Country, choose Mexico. Save yoursettings and logout to ensure these changes are made.

5.2 Purchase Orders to Be Delivered View

5.2.1 Purchase Orders to Be Delivered Quick Guide

All purchase orders that require a goods and services receipt are listed in the Purchase Orders to Be Delivered view,where buyers can create goods and services receipts for them. The purchase orders remain in this view until theyare delivered completely or finished manually.You can access this view form the Goods and Services Receipts work center.The view consists of the following subviews:

Show by DocumentsHere you can access outstanding and overdue purchase orders and create goods and services receipts for them.

Show by ItemsHere you can access outstanding and overdue purchase order items and open limit items and create goods andservices receipts for items from different purchase orders.

Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

Business Background

Goods and Services Receipt and Goods Return ProcessingGoods and services receipts can be used as internal control documents to confirm the following:

● Delivery of materials ● Completion of services ● Expenses related to a purchase order ● Delivery of limit items [page 94] (in the goods and services receipt, the details and quantities of the materials

or services that were actually delivered can be specified)

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Buyers can create goods and services receipts to confirm the delivery of items that they or other employees haveordered using purchase orders. They can also individualize the materials delivered, assign them to other individualmaterials and to fixed assets.Employees who have ordered products using shopping carts can create and post goods and services receipts fortheir shopping carts.Goods returns can be used when a material needs to be returned to a supplier, for example, because it was damagedor the wrong material was delivered.For more information, see Goods and Services Receipt and Goods Return Processing [page 124].

Procure-to-Pay (Non-Stock)The Procure-to-Pay (Non-Stock) business scenario allows you to purchase non-stock materials, such as officematerial, engineering sample material, or fixed assets.This scenario can be triggered by employees or assistants who create shopping carts, by project teams who neednon-stock materials for projects, by buyers directly in purchase orders or requests for quotation (RFQ), or byaccounts payable accountants in supplier invoices. Deliveries can be confirmed centrally or decentrally. Costs forproject-related non-stock materials are directly transferred to project tasks in financial accounting.If a catalog, purchasing contract, or list price for a non-stock material exists, a purchase order can be createdautomatically. If no source of supply exists, you can send RFQs to determine appropriate suppliers.With this scenario you can also order non-stock materials to cover customer demands by using sales orders orservice orders to trigger third-party procurement.For more information, see Procure-to-Pay (Non-Stock).

Procure-to-Pay (Services)The Procure-to-Pay (Services) business scenario allows you to procure services, such as consulting and trainingservices, temporary labor, or engineering services. It can be triggered by employees who create shopping carts forservices, by project managers who need a certain service for their project, or directly by the buyer using a purchaseorder.Project-related services are usually recorded in a time sheet and the costs are directly transferred to the projecttasks in financial accounting. If a purchasing contract or a list price for the ordered service exists, the purchase ordercan be created automatically. If no source of supply exists, a request for quotation can be sent out to determine anappropriate supplier.Alternatively with this scenario, it is possible to order external resources to provide services for customer demandsthat cannot be fulfilled by internal employees. In this case, the procurement process is triggered when a sales orderor a service order has been created.For more information, see Procure-to-Pay (Services).

Tasks

Create a Goods and Services Receipt for One or More Purchase OrdersFor information about this task, see here [page 104].

Create a Goods and Services Receipt for Items from Different Purchase OrdersFor information about this task, see here [page 133].

Create a Goods and Services Receipt for Open Limit ItemsFor information about this task, see here [page 135].

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5.2.2 Tasks

5.2.2.1 Create a Goods and Services Receipt for One or More PurchaseOrders

OverviewYou can create a goods and services receipt to track the delivery of non-stock materials or the completion of services.The goods and services receipt can be created with reference to one or more purchase orders.

PrerequisitesOne or more purchase orders have been sent to the supplier, and some or all of the items in the purchase order havebeen delivered. If you want to create a goods and services receipt for more than one purchase order, they all needto have the same supplier.

Procedure1. Go to Goods and Services Receipts Purchase Orders to Be Delivered Show by Documents .2. Select Show: Outstanding Purchase Orders or Show: Overdue Purchase Orders.

Outstanding Purchase Orders refers to materials that have not been delivered or services that have notbeen completed yet. Overdue Purchase Orders refers to materials that were not delivered by thespecified delivery date or services that were not completed within the specified service period. You canalso restrict the display to (outstanding or overdue) materials or services only.

3. Select the purchase orders for which you want to create a goods and services receipt and clickNew Goods and Services Receipt .

The system generates a goods and services receipt. The data from the corresponding purchase orders isautomatically transferred to the goods and services receipt.

4. Enter the General Information about the goods and services receipt: ● The Supplier is automatically transferred from the purchase orders. ● The Posting Date is automatically set to the current date. If required, you can change it to an eartlier

date, but it is not possible to set it to a date that is still in the future. ● The Delivery Note ID is an ID provided by the supplier for the delivery.

5. Enter the item data: ● Item Details

For intercompany field service and repair scenario, if a purchase order contains an unplanneditem and has a service order reference, then the unplanned item will have a check box Send toService Confirmation. If you select the check box, the unplanned item will also be sent to serviceconfirmation when the goods and service receipt is released.For a planned item, this option will be disabled.

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● Quantities [page 127] ● Account assignment details

6. If you want to individualize the delivered materials, select the item and click New Individual Materials .The individual material details are displayed on the Basic Data tab page. You can update the Individual MaterialDescription, enter an Inventory ID, and assign the individual material to another individual material (Belongsto Individual Material). If the individual material belongs to a fixed asset, the fixed asset is displayed. For moreinformation, see Asset Procurement in Purchasing [page 15].

When you click New Individual Materials , the number of goods and services receipt items created equalsthe delivered quantity confirmed in the goods and services receipt. If you want to create individualmaterials for an item, the delivered quantity must not be greater than 100.

7. If you want to specify the items further, you can add notes and attachments on the Notes and on the Attachments tabs.

8. Save your entries.9. Click Post .

If you do not want to post the goods and services receipt immediately, only save your entries. Thegoods and services receipt is then available in the Receipts and Returns view with status InPreparation. You receive a task in your worklist to complete it later. As long as the goods and servicesreceipt is still In Preparation, you can also delete it if it turns out that you do not want to confirm thedelivery after all. To do so, select the document from the Receipts and Returns list and click Delete .

ResultOnce the goods and services receipt is posted, it is added to the list of receipts in the Receipts and Returns view witheither of the following statuses:

● If it requires approval, the system sets the status to Approval and sends a task to the designated approver. ● If no approval is required, the status automatically changes to Released.

If the release process is canceled before the goods and services receipt switches to Released, its statuschanges to Discarded.

When the goods and services receipt status is Released, the status of the corresponding purchase order changes toFollow-Up Document Created. Once all items are completely delivered and invoiced or a buyer finishes themmanually, the purchase order status changes to Finished.The system sends the goods and services receipt to Supplier Invoicing for invoice verification, exception handling,and payment processes. For more information, seeCreate an Invoice or Credit Memo with Reference to PrecedingDocuments [page 212] and Exception Handling [page 187]. It also forwards the data to Financials, posts thegoods return receipt there, and updates individual materials and fixed asset assignments if applicable.

Before forwarding the data, the system checks whether the relevant accounting period in Financials is open.If the accounting period is closed, the system issues an error or warning message.

AlternativesYou can also create a goods and services receipt for items from different purchase orders. For more information,see Create a Goods and Services Receipt for Items for Items from Different Purchase Orders [page 133].

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5.2.2.2 Create a Goods and Services Receipt for Items from DifferentPurchase Orders

OverviewYou can create a goods and services receipt to track the delivery of non-stock materials or the completion of services.The goods and services receipt can be created for items belonging to different purchase orders.

PrerequisitesOne or more purchase orders have been sent to the supplier, and some or all of the items in the purchase order havebeen delivered. If you want to create a goods and services receipt for items from different purchase orders, they allneed to have the same supplier.

Procedure1. Got to Goods and Services Receipts Purchase Orders to Be Delivered Show by Items .2. In the Show field, select whether you want to display outstanding or overdue purchase order items.

Outstanding Purchase Order Items refers to materials that have not been delivered or services thathave not been completed yet. Overdue Purchase Order Items refers to materials that were not deliveredby the specified delivery date or services that were not completed within the specified service period.You can also restrict the display to (outstanding or overdue) materials or services only.

3. Select the purchase order items for which you want to create a goods and services receipt and clickNew Goods and Services Receipt .

The system generates a goods and services receipt. The data from the corresponding purchase orders isautomatically transferred to the goods and services receipt.

4. Enter the General Information about the goods and services receipt: ● The Supplier is automatically transferred from the purchase orders. ● The Posting Date is automatically set to the current date. If required, you can change it to an earlier

date, but it is not possible to set it to a date that is still in the future. ● The Delivery Note ID is an ID provided by the supplier for the delivery.

5. Enter the item data: ● Item Details ● Quantities [page 127] ● Account assignment details

6. If you want to individualize the delivered materials, select the item and click New Individual Materials .The individual material details are displayed on the Basic Data tab page. You can update the Individual MaterialDescription, enter an Inventory ID, and assign the individual material to another individual material (Belongsto Individual Material). If the individual material belongs to a fixed asset, the fixed asset is displayed. For moreinformation, see Asset Procurement in Purchasing [page 15].

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When you click New Individual Materials , the number of goods and services receipt items created equalsthe delivered quantity confirmed in the goods and services receipt. If you want to create individualmaterials for an item, the delivered quantity must not be greater than 100.

7. If you want to specify the items further, you can add notes and attachments on the Notes and on the Attachments tabs.

8. Save your entries.9. Click Post .

If you do not want to post the goods and services receipt immediately, only save your entries. Thegoods and services receipt is then available in the Receipts and Returns view with status InPreparation. You receive a task in your worklist to complete it later. As long as the goods and servicesreceipt is still In Preparation, you can also delete it if it turns out that you do not want to confirm thedelivery after all. To do so, select the document from the Receipts and Returns list and click Delete .

ResultOnce the goods and services receipt is posted, it is added to the list of receipts in the Receipts and Returns view witheither of the following statuses:

● If it requires approval, the system sets the status to Approval and sends a task to the designated approver. ● If no approval is required, the status automatically changes to Released.

If the release process is canceled before the goods and services receipt switches to Released, its statuschanges to Discarded.

When the goods and services receipt status is Released, the status of the corresponding purchase order changes toFollow-Up Document Created. Once all items are completely delivered and invoiced or a buyer finishes themmanually, the purchase order status changes to Finished.The system sends the goods and services receipt to Supplier Invoicing for invoice verification, exception handling,and payment processes. For more information, see Create an Invoice or Credit Memo with Reference to PrecedingDocuments [page 212] and Exception Handling [page 187]. It also forwards the data to Financials, posts thegoods return receipt there, and updates individual materials and fixed asset assignments if applicable.

Before forwarding the data, the system checks whether the relevant accounting period in Financials is open.If the accounting period is closed, the system issues an error or warning message.

AlternativesYou can also create a goods and services receipt for one or more purchase orders. For more information, see Createa Goods and Services Receipt for Items One or More Purchase Orders [page 104].

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5.2.2.3 Create a Goods and Services Receipt for Open Limit Items

OverviewYou can create a goods and services receipt to track the delivery of non-stock materials or the completion of services.The goods and services receipt can be created for limit items [page 94], that is, items that are assigned a maximumvalue limit rather than a price in a purchase order.A limit item is used in a purchase order when you do not know the details of the material or service you want or thequantity that you need. Once the material has been delivered or the service has been completed, you know thesedetails, so you can enter them in the goods and services receipt.

PrerequisitesOne or more purchase orders with limit items have been sent to the supplier, and some or all of the items in thepurchase order have been delivered. If you want to create a goods and services receipt for open limit items fromdifferent purchase orders, they all need to have the same supplier.

Procedure1. Go to Goods and Services Receipts Purchase Orders to Be Delivered Show by Items .2. Select Show: Open Purchase Order Limit Items.3. Select the limit items for which you want to create a goods and services receipt and click

New Goods and Services Receipt .The system generates a goods and services receipt. The data from the corresponding purchase orders isautomatically transferred to the goods and services receipt.

4. Enter the General Information about the goods and services receipt: ● The Supplier is automatically transferred from the purchase orders. ● The Posting Date is automatically set to the current date. If required, you can change it to an earlier

date, but it is not possible to set it to a date that is still in the future. ● The Delivery Note ID is an ID provided by the supplier for the delivery.

5. The limit items are listed in the upper table in the Items section of the screen.

The limit items have been transferred from the corresponding purchase orders. At the time when thepurchase orders were created, the item details and quantities were not defined yet. Now you know thedetails of the materials that have been delivered or the services that have been completed, so you canspecify them in the goods and services receipt.

Select the limit item in the upper table in the Items section and click Add Row .A new item is added to the items list at the bottom of the Items section.

6. Enter the item data: ● Item Details, for example, Product ID or Product Description ● Quantities [page 127] ● Account assignment details

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Alternatively, you can also add items from a catalog.

7. If you want to specify the items further, you can add notes and attachments on the Notes and on the Attachments tabs.

8. Save your entries.9. Click Post .

If you do not want to post the goods and services receipt immediately, only save your entries. Thegoods and services receipt is then available in the Receipts and Returns view with status InPreparation. You receive a task in your worklist to complete it later. As long as the goods and servicesreceipt is still In Preparation, you can also delete it if it turns out that you do not want to confirm thedelivery after all. To do so, select the document from the Receipts and Returns list and click Delete .

ResultOnce the goods and services receipt is posted, it is added to the list of receipts in the Receipts and Returns view witheither of the following statuses:

● If it requires approval, the system sets the status to Approval and sends a task to the designated approver. ● If no approval is required, the status automatically changes to Released.

If the release process is canceled before the goods and services receipt switches to Released, its statuschanges to Discarded.

When the goods and services receipt status is Released, the status of the corresponding purchase order changes toFollow-Up Document Created. Once all items are completely delivered and invoiced or a buyer finishes themmanually, the purchase order status changes to Finished.The system sends the goods and services receipt to Supplier Invoicing for invoice verification, exception handling,and payment processes. For more information, see Create an Invoice or Credit Memo with Reference to PrecedingDocuments [page 212] and Exception Handling [page 187]. It also forwards the data to Financials and posts thegoods return receipt there.

Before forwarding the data, the system checks whether the relevant accounting period in Financials is open.If the accounting period is closed, the system issues an error or warning message.

5.3 Receipts and Returns View

5.3.1 Receipts and Returns Quick Guide

The Receipts and Returns view provides an overview of all delivered materials, completed services, and relatedexpenses. From here, buyers can view, maintain, and cancel goods and services receipts and goods returns.You can access this view from the Goods and Services Receipts work center.The view consists of the following subviews:

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Show by DocumentsHere you can access existing goods and services receipts and goods returns, create goods returns for releasedgoods and services receipts, and cancel complete goods and services receipts and goods returns.

Show by ItemsHere you can access the items of existing goods and services receipts and goods returns, create goods returns forreleased goods and services receipt items, and cancel individual goods and services receipt or goods return items.

Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

Business Background

Goods and Services Receipt and Goods Return ProcessingGoods and services receipts can be used as internal control documents to confirm the following:

● Delivery of materials ● Completion of services ● Expenses related to a purchase order ● Delivery of limit items [page 94] (in the goods and services receipt, the details and quantities of the materials

or services that were actually delivered can be specified)

Buyers can create goods and services receipts to confirm the delivery of items that they or other employees haveordered using purchase orders. They can also individualize the materials delivered, assign them to other individualmaterials and to fixed assets.Employees who have ordered products using shopping carts can create and post goods and services receipts fortheir shopping carts.Goods returns can be used when a material needs to be returned to a supplier, for example, because it was damagedor the wrong material was delivered.For more information, see Goods and Services Receipt and Goods Return Processing [page 124].

Procure-to-Pay (Non-Stock)The Procure-to-Pay (Non-Stock) business scenario allows you to purchase non-stock materials, such as officematerial, engineering sample material, or fixed assets.This scenario can be triggered by employees or assistants who create shopping carts, by project teams who neednon-stock materials for projects, by buyers directly in purchase orders or requests for quotation (RFQ), or byaccounts payable accountants in supplier invoices. Deliveries can be confirmed centrally or decentrally. Costs forproject-related non-stock materials are directly transferred to project tasks in financial accounting.If a catalog, purchasing contract, or list price for a non-stock material exists, a purchase order can be createdautomatically. If no source of supply exists, you can send RFQs to determine appropriate suppliers.With this scenario you can also order non-stock materials to cover customer demands by using sales orders orservice orders to trigger third-party procurement.For more information, see Procure-to-Pay (Non-Stock).

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Procure-to-Pay (Services)The Procure-to-Pay (Services) business scenario allows you to procure services, such as consulting and trainingservices, temporary labor, or engineering services. It can be triggered by employees who create shopping carts forservices, by project managers who need a certain service for their project, or directly by the buyer using a purchaseorder.Project-related services are usually recorded in a time sheet and the costs are directly transferred to the projecttasks in financial accounting. If a purchasing contract or a list price for the ordered service exists, the purchase ordercan be created automatically. If no source of supply exists, a request for quotation can be sent out to determine anappropriate supplier.Alternatively with this scenario, it is possible to order external resources to provide services for customer demandsthat cannot be fulfilled by internal employees. In this case, the procurement process is triggered when a sales orderor a service order has been created.For more information, see Procure-to-Pay (Services).

Tasks

Create a Goods ReturnFor information about this task, see here [page 138].

Cancel a Goods and Services Receipt or Goods ReturnFor information about this task, see here [page 140].

5.3.2 Tasks

5.3.2.1 Create a Goods Return

OverviewIf you need to a return a material to a supplier, you can create and post a goods return with reference to the goodsand services receipt that has been created for the delivery of this material.

PrerequisitesThe goods and services receipt for which you want to create a goods return has the status Released.

You can only return a quantity of materials that is equal to or less than the delivered quantity in the referencedgoods and services receipt.

Procedure1. Go to Goods and Services Receipts Receipts and Returns Show by Documents 2. Select the goods and services receipt for which you want to create a goods return.

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If you want to create a goods return for a specific item in a goods and services receipt, you can also goto the Show by Items subview of the Receipts and Returns view and select the item there.

3. Click New Goods Return .The system generates a goods return. The data from the goods and services receipt is automaticallytransferred to the goods return.

4. Enter the Posting Date.

The Posting Date is automatically set to the current date. You can adjust it if required.

5. If there are items on the list for which you do not want to create a goods return, select them and clickRemove .

6. If the returned quantity for an item differs from the quantity proposed by the system, update the ReturnedQuantity to show how much is actually being returned.

If an individual material has been assigned to an item, the quantity is always 1 and cannot be changed.

7. If the return date for an item differs from the date proposed by the system, update the Return Date field toshow when the item is actually being returned.

8. If you want to specify the items further, you can add notes and attachments on the Notes and on the Attachments tabs.

9. Save your entries.10. Click Post .

If you do not want to post the goods return immediately, only save your entries. The goods return isthen available in the Receipts and Returns view with status In Preparation. You receive a task in yourworklist to complete it later. As long as the goods return is still In Preparation, you can also delete it ifit turns out that you do not want to confirm the delivery after all. To do so, select the document fromthe Receipts and Returns list and click Delete .

ResultOnce the goods return is posted, it is added to the list of returns in the Receipts and Returns view with statusReleased. The status of the related purchase orders changes back from Finished to Follow-Up Document Created (ifall deliveries and invoices have been posted) or remains Follow-Up Document Created (if there are still open quantitiesfor delivery or invoicing).The system sends the goods return to Supplier Invoicing for invoice verification, exception handling, and paymentprocesses. For more information, see Create an Invoice or Credit Memo with Reference to Preceding Documents[page 212] and Exception Handling [page 187]. It also forwards the data to Financials , posts the goods returnthere, and updates individual material and fixed asset assignments if applicable. If, for example, you create a goodsreceipt for an item for which an individual material has been created, the individual material status changes toBlocked once the goods return is posted. The individual material can then no longer be assigned to another individualmaterial, nor can it be used in a fixed asset. For more information on individual materials, see Asset Procurement inPurchasing [page 15].

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Before forwarding the data, the system checks whether the relevant accounting period in Financials is open.If the accounting period is closed, the system issues an error or warning message.

AlternativesYou can also create a goods return with reference to a goods and services receipt for items in a shopping cart. Formore information, see Create a Goods Return from a Shopping Cart [page 59].

5.3.2.2 Cancel a Goods and Services Receipt or Goods Return

OverviewAfter you have posted a goods and services receipt or a goods return, it might become necessary to cancel it, forexample, because you have found a data entry error in the document.You can cancel the complete document or individual items. It is, however, not possible to cancel only a partial quantityof an item.

Once you have canceled a goods and services receipt or goods return, it cannot be re-released. If you want torestore a canceled goods and services receipt or goods return, you need to recreate the document in thePurchase Order to Be Delivered view.

PrerequisitesThe goods and services receipt or goods return that you want to cancel has the status Released.

Procedure1. Go to Goods and Services Receipts Receipts and Returns Show by Documents 2. Select the goods and services receipt or goods return that you want to cancel.

If you want to cancel a specific item in a goods and services receipt or a goods return, you can also goto the Show by Items subview of the Receipts and Returns view and select the item there.

3. Click Cancel Document.

Alternatively, if you want to edit the document first before you cancel it, select the document from thelist and click Edit . After you have edited the document, click Cancel Goods and Services Receipt or

Cancel Goods Return .

The system generates a goods and services receipt or goods return cancellation. The data from thecorresponding goods and services receipt or goods return is automatically transferred to the cancellation.

4. Enter the Posting Date for the cancellation.

The Posting Date is automatically set to the current date. You can adjust it if required.

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5. If there are items on the list that you do not want to cancel, select them and click Remove . These items willremain in the original goods and services receipt or goods return.

6. If you want to specify the items further, you can add notes and attachments on the Notes and on the Attachments tabs.

7. Click Post .

ResultOnce the cancellation is posted, it is added to the list of documents in the Receipts and Returns view with statusReleased.The original goods and services receipt or goods return also remains in the system, but its status is updated toCanceled (if all items were canceled) or Partially Canceled (if only some items were canceled).The system sends the goods and services or goods return cancellation to Supplier Invoicing for invoice verification,exception handling, and payment processes. For more information, see Supplier Invoice Processing with Referenceand Exception Handling [page 187]. It also forwards the data to Financials, posts the goods and services receiptthere, and updates individual material and fixed asset assignments if applicable. For more information on individualmaterials, see Asset Procurement in Purchasing [page 15].

Before forwarding the data, the system checks whether the relevant accounting period in Financials is open.If the accounting period is closed, the system issues an error or warning message.

AlternativesYou can also cancel a goods and services receipt or goods return that was posted for items in a shopping cart. Formore information, see Cancel a Goods and Services Receipt or Goods Return for a Shopping Cart [page 57]

5.4 Reports View

5.4.1 Released Documents per Contract

OverviewShows all the documents that were called off with reference to a specified contract. Shows the buyer how intensivelya contract is used in terms of released documents per contract.

Features

Running the ReportBefore running the report, you can specify the data you want to see by making value selections for variables. Youmust make a value selection for all mandatory variables. In the system, mandatory variables are indicated by anasterisk (*).

Analyzing the ReportThis report shows an analysis of released documents per contract.

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The following data is filtered for this report: ● Contract Status is restricted to Released. ● Expiry Status is restricted to Not Expired and About to Expire.

To further analyze data in this report, you can drag characteristics to rows and columns.From this report, you can navigate to:

● Contract Tracking ● Purchase Order Tracking [page 111] ● Expiring Contracts

See AlsoReports ViewOverview of Reports in Supplier Relationship ManagementOverview of Data Sources in Supplier Relationship Management

5.4.2 Monitoring Purchase Orders

OverviewThis report shows all purchase orders that have been created during a specified time period. You can check thepurchase order value, price, quantity, and status.The process type (for example, Third-Party) shows you the type of procurement process for this item.You can further analyze third-party procurement processes by using the Third-Party process type combined withone or more of the following fields:

● Sales Order ID ● Customer ● Customer's Purchase Order ID ● Follow-On Process

Features

Running the ReportBefore running the report, you can specify the data you want to see by making value selections for variables. Youmust make a value selection for all mandatory variables. In the system, mandatory variables are indicated by anasterisk (*).Additional information is available for the following selected variable:

● Purchase Order StatusYou can use this variable to display data that is relevant to the status of a purchase order.Statuses include: ○ In Preparation ○ In Approval ○ In Revision

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○ Rejected ○ Not Yet Confirmed ○ Sent ○ Confirmation Received ○ Canceled ○ Follow-Up Document Created ○ Finished

Analyzing the ReportThis report shows an analysis of purchase orders by status.The following data is filtered for this report:

● Purchase Order Creation Date is restricted to the last thirty days, including today.

To further analyze data in this report, you can drag characteristics to rows and columns. ● Purchase Orders per Account Assignment

See AlsoReports ViewOverview of Reports in Supplier Relationship ManagementOverview of Data Sources in Supplier Relationship Management

5.4.3 Expected Deliveries per Week

OverviewShows the expected deliveries of purchase order items per week for the next eight weeks. If you want to see purchaseorder details, add Purchase Order ID to your report and right mouse click on the relevant ID, choose Goto and selectDisplay Details.

Features

Running the ReportBefore running the report, you can specify the data you want to see by making value selections for variables. Youmust make a value selection for all mandatory variables. In the system, mandatory variables are indicated by anasterisk (*).Additional information is available for the following selected variables:

● Purchase Order StatusYou can use this variable to display data that is relevant to a specified purchase order status.Statuses include: ○ Sent ○ Follow-Up Document Created ○ Confirmation Received

● Delivery Week (Next 8 Weeks)

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You can use this variable to display data that is relevant for the purchase orders items. By default, the valueis set as the next 8 weeks, including the current week.

Analyzing the ReportThis report shows an analysis of the expected deliveries of purchase order items according to the number of expectedpurchase order items per calendar week. This report also displays the total number of purchase order items for thespecified period.The following data is filtered for this report:

● Cancellation Status excludes Canceled. ● Item Cancellation Status excludes Canceled. ● Delivery Week is restricted to the last seven days. ● Delivery Processing Status excludes Finished and Not Relevant. ● Delivery Status excludes Delivered and Not Relevant.

To further analyze data in this report, you can drag characteristics to rows and columns.From this report, you can navigate to Purchase Order Tracking [page 111].

See AlsoReports ViewOverview of Reports in Supplier Relationship ManagementOverview of Data Sources in Supplier Relatonship Management

5.4.4 Purchase Orders per Account Assignment

OverviewThis report shows all purchase orders per account assignment that have been created over the last 7 days. Examplesof account assignments include cost center, project, and so on. You can check the total values per accountassignment and the status of the purchase orders.The process type (for example, Third-Party) shows you the type of procurement process for this item.You can further analyze third-party procurement processes by using the Third-Party process type combined withone or more of the following fields:

● Sales Order ID ● Customer ● Customer's Purchase Order ID ● Follow-On Process

ViewsThe following views are available with this report:

● Purchase Orders per Cost CenterShows all purchase orders per cost center. You can check the total values per cost center and the status ofpurchase orders.

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● Purchase Orders per ProjectShows all purchase orders per project. You can check the total values per project and the status of purchaseorders.

● Purchase Orders per Sales OrderShows all purchase orders per sales order. You can check the total values per sales order and the status ofpurchase orders.

● Purchase Orders per Service OrderShows all purchase orders per service order. You can check the total values per service order and the statusof purchase orders.

Features

Running the ReportBefore running the report, you can specify the data you want to see by making value selections for variables. Youmust make a value selection for all mandatory variables. In the system, mandatory variables are indicated by anasterisk (*).

● Header StatusYou can use this variable to display data that is relevant to the status of a purchase order.Statuses include: ○ In Preparation ○ In Approval ○ In Revision ○ Rejected ○ Not Yet Confirmed ○ Sent ○ Confirmation Received ○ Follow-up Document Created ○ Finished

● Purchase Order Creation Date (Last 7 Days)You can use this variable to display data that is relevant for the purchase orders created in the last 7 days. Bydefault, the value is set as the last 7 days; however, you can change the value.

Analyzing the ReportThis report shows an analysis of the purchase orders per account assignment according to ordered quantity, netvalue, and net value in company currency, allowing you to analyze purchase orders on a more operational level byaccount assignment.The following data is filtered for this report:

● Cancellation Status excludes Cancellation Discard and Canceled. ● Purchase Order Creation Date is restricted to the last seven days, including today. ● Item Cancellation Status excludes Cancellation Discard and Canceled.

To further analyze data in this report, you can drag characteristics to rows and columns.From this report, you can navigate to Released Documents per Contract [page 108].

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See AlsoReports ViewOverview of Reports in Supplier Relationship ManagementOverview of Data Sources in Supplier Relationship Management

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6 Supplier Invoicing

6.1 Business Background

6.1.1 Supplier Invoice Types

OverviewIn the Supplier Invoicing work center, you can use several main document types to record purchasing transactionsbetween your company and its suppliers. Supplier Invoicing can be based on underlying documentation such aspurchase orders and purchasing contracts, or as standalone transactions.Depending on your business requirements, Supplier Invoicing provides features for the creation of the following typesof supplier invoices:

● InvoicesFor goods or services; invoices received from suppliers can be entered manually, with or without referenceto a purchase order or other preceding document. Invoices can also be created automatically for certainselected suppliers using evaluated receipt settlements and using recurring invoices.

● Credit memosFor returned goods or pricing differences; when your company returns goods or complains about services,the supplier usually issues a credit memo for an amount equal to or lower than the original invoice and refundsthe money to the company. As an accountant, you can enter credit memos with reference to the precedinginvoice or purchase order. You can also enter subsequent debits and credits with reference to the precedinginvoice or credit memo.

● Customs invoicesFor invoiced goods that require a duty or import tax, a customs invoice can be submitted by the customsauthority, stating a company's obligation to pay tax or duties on the import or export of goods.

● Subsequent debits and creditsTo adjust the value of an invoice or credit memo that has already been posted. Normally a subsequent debitor credit is entered when a subsequent price change happens, for example, for products with prices thatchange very often, or when other costs are to be charged or credited, for example, freight costs for goodsthat have already been invoiced.

● Cancellation invoicesTo cancel an invoice or credit memo that has already been posted. The posting in Financial Management willbe canceled and the payment will be revoked.

● Down paymentsFor some invoicing processes, a ratio of the gross payment amount that needs to be settled to cover a definedset of ordered goods or services is due prior to the delivery of these goods or the provision of these services.

Tax on materials and services occurs in purchasing transactions like purchase orders and supplier invoicing. Taxabroad is applicable when your company needs to apply foreign taxes. In purchasing, it is possible to receive a supplierinvoice with foreign tax even if the company is not registered with the foreign tax authority. The system automaticallydetermines the applicable tax in the supplier invoicing process.For more information, see Calculation of Tax Abroad for Services, Tax Determination [page 152], and WithholdingTax Determination [page 172].

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Supplier InvoicesA supplier invoice records the obligation of the recipient of goods or services to the supplier, and is usually createdon completion of the service or delivery of the goods. The supplier invoice records the details of the transaction andposts the financial transaction in the recipient company’s liabilities. The invoice is checked against the purchaseorder placed with the suppliers, and any variances or discrepancies are recorded as exceptions. All exceptions mustbe resolved or clarified in order to post the invoice. When the invoice is posted, the transaction details are forwardedto financials, entered into a ledger, and the invoice is released for payment. It is also possible to release an invoicefor payment without entering the details into a ledger, if you want, for example, to pay an invoice while transactiondetails are incomplete in order to receive a cash discount from the supplier.If an invoice has already been posted and paid, it can be canceled in the system. Canceling an invoice reverses theinvoice and automatically creates a cancellation invoice in your system. If the invoice has already been paid, you cancreate a credit memo with reference to the original purchase order. If an invoice has been entered into the systembut has not been posted yet and does not have a draft status, it can be voided. Voiding an invoice means that theinformation from the invoice is retained in your system but the invoice cannot be sent on to the next stage ofprocessing. It is not possible to delete an invoice that has been saved to the system, even if it was only saved as adraft. Once an invoice has been saved, it can only be voided.For the most part, created invoices contain references to purchasing documents. In such cases, the invoicing-relevant data of a confirmed inbound delivery, goods and services receipt, or a purchase order, is reused for theinvoicing process.Invoices are created:

● Manually by directly entering invoices in the system, either with or without reference to preceding purchasingdocuments

● Automatically from preceding purchasing documents using evaluated receipt settlements

When a supplier invoice is created, the data is compared with the purchasing data that has been collected in thepreceding purchasing document. The invoice is checked for accuracy and consistency. The analysis consists ofchecks of the supplier invoice data such as total value, account assignments, tax or quantity tolerances, and checksfor duplicate invoices. The further processing of the supplier invoice depends on its check results:

● If the checks of a supplier invoice are successful, the invoice is processed automatically. The outstandinginvoice or customs duty invoice amount can be paid, or the credit memo can be created.

● If the checks of a supplier invoice fail, predefined exception types are assigned to the invoice. Before theinvoice can be processed further, the errors that caused the exceptions need to be solved. Once authorizedusers have resolved the exceptions, the outstanding invoice or customs duty invoice amount can be paid, orthe credit memo can be created. Invoices containing exceptions are resolved in the Work view of the SupplierInvoicing work center.

Credit MemosCredit memos are invoices that record a credit value for a transaction instead of a debit, and are created withreference to a preceding debit transaction. Credit memos are created in cases where previously ordered goods orservices have already been settled, even though these goods or services have either not yet been rendered or havebeen returned to the supplier.Credit memos are created:

● Manually by directly entering credit memos in the system, either with or without reference to precedingpurchasing documents, such as a goods return.

● Automatically from preceding purchasing documents

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Credit Memos are entered, verified, and posted in the same manner as invoices. In accounting, a credit memo istreated as a supplier invoice and is also called a supplier invoice.

Customs InvoicesCustoms invoices are invoices that are created in cases where goods or services ordered from an external supplierare imported by a separate carrier. The total amount to be paid consists of the import tax or duty paid to the customsauthority only. The price for the goods or services is paid using a separate invoice issued by the supplier.Customs invoices are entered directly in the system, either with or without reference to preceding purchasingdocuments.Customs invoices are entered, verified and posted in the same manner as invoices and credit memos.

Subsequent Debits and Subsequent CreditsSubsequent debits are invoices that are entered subsequently for an additional debit value to an invoice or creditmemo that has already been posted. A subsequent debit increases the debt on the posted invoice to which it refers,or decreases the credit on the posted credit memo to which it refers. The posting of a subsequent debit does notaffect the quantity of the invoice or credit memo to which it refers.Subsequent credits are credit memos that are entered subsequently for an additional credit value to an invoice orcredit memo that has already been posted. A subsequent credit decreases the debt on the posted invoice to whichit refers, or increases the credit on the posted credit memo to which it refers. The posting of a subsequent creditdoes not affect the quantity of the invoice or credit memo to which it refers.Subsequent debits and credits are entered, verified, and posted in the same manner as other invoices and creditmemos.

Cancellation InvoicesCancellation invoices are invoices that are created automatically by the system when the user cancels a postedinvoice or credit memo from the Invoices and Credit Memos view. On doing this, the system opens the NewCancellation Invoice screen.The cancellation invoice cancels the value of the debt in the system created by the original invoice, or cancels thevalue of the credit in the system created by the original credit memo. When the system creates a cancellation invoice,the original invoice or credit memo to which it refers records the status Canceled.

See AlsoSupplier Invoice Verification [page 150]Quick Guide for Work [page 182]Quick Guide for Invoice Entry [page 200]Quick Guide for Invoices and Credit Memos [page 239]Quick Guide for Evaluated Receipt Settlements [page 251]Quick Guide for Recurring Invoices [page 263]

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6.1.2 Supplier Invoice Verification

OverviewAt the beginning of the invoice verification process, the system collects the data from the supplier invoice andperforms checks on calculations such as tax amounts, missing internal or external information, and possibleduplicate invoices. If the supplier invoice contains references to preceding documents, the system collects theinvoicing-relevant data from preceding documents, where available, and compares this data with the data of anincoming supplier invoice. This comparison applies if the supplier invoice contains a reference to one or morepreceding documents, such as a purchase order, a goods and services receipt, an inbound delivery, a list price, or apurchasing contract. The system carries out the checks after you submit the supplier invoice for posting.If the data is correct and complete, the system sends the supplier invoice for payment or to be released for credit.If the data contains errors, such as variances, duplicates, or missing information or documents, the system triggersan exception handling process before the supplier invoice can be posted.The invoice verification process is relevant for the following supplier invoice types:

● Invoices and ERS invoices created by evaluated receipt settlement, as well as recurring invoices ● Credit memos ● Customs invoices ● Subsequent debits ● Subsequent credits ● Down payments

Cancellation invoices are not relevant for invoice verification. Cancellation invoices are created automaticallyby the system when an invoicing document is canceled. They are not entered by a user and are therefore notsubject to the invoice verification process or resultant exception handling.

PrerequisitesIn the fine-tuning activity Supplier Invoice Exceptions, settings for exception criteria and exception handling forspecific exception types have been configured.You have started one of the following processes:

● Supplier Invoice Processing With Reference ● Supplier Invoice Processing Without Reference ● Supplier Invoice Processing Using Evaluated Receipt Settlements

Process Flow1. Select Post

In the corresponding task in the Supplier Invoicing work center, you select Post for the invoicing documentyou want to release for payment or credit.

2. Invoicing Document is VerifiedThe system initiates invoice verification. The analyses consists of checks of the invoicing data, such as totalvalue, account assignments, variances in tax, and checks for possible duplicate invoices.

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If the invoicing document references a preceding document, such as a purchase order, the system alsoperforms checks against data contained in the preceding document, such as price or quantity variances, andwhether a goods and services receipt or inbound delivery is expected. If your company does not enterpurchase orders or goods and services receipts into the system, the automated invoice verification processcannot compare the invoices with these corresponding documents.For more information about the different checks that are defined in business configuration, see SupplierInvoice Exceptions.

3. Invoicing Document is PostedIf the data is consistent, the invoicing document is maintained in the Invoices and Credit Memos view, and thesystem sets the status to Posted.The data of the invoicing document is consistent if one of the following applies: ● The invoicing data matches the data in the preceding documents, all information is correct and available,

and all required preceding documents exist ● The invoicing data deviates from the data of the preceding documents within tolerances (for example,

price, tax, or quantity variances) defined in business configuration.For more information, see Supplier Invoice Exceptions.

Before forwarding the data to Financials, the system checks whether the relevant accounting period inFinancials is open. If the accounting period is closed, the system issues an error message or a warningmessage.For more information, see Late Operational Postings.The system forwards the invoicing document to Financials to be released for payment or credit.OR

4. Exceptions are Forwarded for ClarificationIf the data is not consistent, the system creates invoice exceptions and forwards them as tasks that requireclarification.Depending on business configuration settings, the invoice exceptions are forwarded for clarification. (Youdefine your invoice exceptions in the Business Configuration work center, in the Activity List view. In the FineTune step, choose Supplier Invoice Exceptions.) ● Manual forwarding

The system sends clarification tasks to the responsible accountants who can either clarify the exceptionsthemselves in the Work view of the Supplier Invoicing work center or forward them to other responsiblepersons for clarification.

● Automatic forwardingDepending on the exception type, the system sends the clarification tasks to the relevant person, suchas a buyer or supplier.

For more information about the configuration settings, see Supplier Invoice Exceptions.5. Invoicing Document is Posted

Once all exceptions related to an invoicing document are clarified or accepted, you can submit the documentfor posting. The invoicing document is maintained in the Invoices and Credit Memos view, and the systemsets the status to Posted.The responsible accountant can also accept an exception without clarification and post the invoicingdocument for payment or credit.Before forwarding the data to financials, the system checks whether the relevant accounting period infinancials is open. If the accounting period is closed, the system issues an error message or a warningmessage.

Depending on the configuration settings, the system might initiate an approval process in which theinvoice has to be approved by your manager.

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See AlsoSupplier Invoice Types [page 147]Exception Handling [page 187]Quick Guide for Work [page 182]Quick Guide for Invoice Entry [page 200]Quick Guide for Evaluated Receipt Settlements [page 251]Quick Guide for Recurring Invoices [page 263]

6.1.3 Tax Determination

6.1.3.1 Tax Determination

Overview

Business ByDesign provides a tax event and uses the resulting figures to generate tax reports. Thisautomatically-created report does not replace the customer or user’s own tax appraisal. SAP does notassume liability for the accuracy of the automatically-created report or the tax report that is generated.

As a rule, companies are legally required to calculate taxes on products that they buy or sell or services used, andto levy these taxes on their customers. After the products or services have been provided, the taxes must be declaredand paid to the relevant tax authorities.The taxes are calculated for business documents such as orders, invoices, credit memos or down payments.Since taxation laws differ in each country, your company is faced with the challenge of calculating the correct taxfor a particular business transaction. The system supports you by automatically calculating the tax for the followingtax types:

● Value-Added Tax (VAT)This tax is levied in many countries, especially countries in the European Union. Many regional differencesexist. For example, in some countries such as Canada and Australia, value-added tax is levied as "Goods andServices Tax".

● Sales and Use TaxThis tax is levied, for example, in the United States, and in a similar form in Canada (Provincial Sales Tax).

● Withholding TaxThis tax is levied in different forms in different countries. The system is able to calculate withholding tax forthe United States.

The system also offers a reporting tool that gives you effective control over your mandatory declaration of thesetaxes.

Prerequisites ● You have created the Master Data for Tax Determination [page 157]. ● Defining the Solution Scope for Taxation

The following activities are necessary to define the solution scope for taxation:

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○ The solution scope for taxation is specified in the system in Business Configuration under Built-In Servicesand Support. The Tax Calculation business topic is located in the Business Environment businesspackage.

○ If you are also required to have taxes calculated in your quotes, activate the relevant option inScoping. In the Questions step, navigate to the Sales business area, and choose New Business > Quoteswith Tax Calculation.

ElementsThe system collects the relevant data from the available business documents to correctly calculate the taxesapplicable. As the user, you have to configure your system with the information that is required for your businesscases. A lot of standard business cases are pre-configured by SAP, but in some cases you have to enhance yoursystem.For more detailed information about tax determination and how the system merges and classifies data, see Elementsfor Tax Determination [page 160].

Tax Number DeterminationIn the following cases the tax number is determined again:

● Tax date has been changed ● Buyer, seller or tax reporting group has been changed ● Tax number is wrong ● Tax country has been changed

Value-Added Tax (VAT) NumbersFor Export DeliveriesTo obtain tax exemption for intra-community deliveries, you need to record, among other things, the servicerecipient’s VAT number to be used for the receipt of goods.If several VAT numbers are assigned to a customer master record, the system selects the VAT number accordingto the following criteria:

● The VAT number of the country in which the ship-to party is located. ● If the VAT number of the ship-to country is not entered in the master data, the system searches for other

numbers entered in the master data and selects a number that is different from the number of the countryfrom which the goods are sent.

● If there is only one VAT number for the country where the transport of goods starts, or if there is no numberat all, the prerequisites for an intra-community delivery have not been fulfilled, and the delivery must be taxedat the relevant tax rate.

If a VAT number is entered in the master data, it will be automatically displayed on the invoice. You canoverwrite it on the Taxes tab in the document. However, you can only overwrite using those numbers thathave been previously entered in the account master record.

For Other Services, Performed AbroadAccording to the EU directive 2008/8/EG and country-specific tax legislation, there is a new regulation, particularlyfor B2B commissions relating to the place in which services are performed.

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Generally, the place in which services are provided serves as the 'service recipient’ address. If the country where the'Ship-To' address is located differs from the address of the account, then the 'Ship-To' location is understood to bethe location where the service is performed. This directly influences how taxes are determined, in that the “Ship-To'address is used to determine where the services will be taxed. For example, § 3a (2) UStG in Germany can beconsulted. If this is not correct for each and every case, then applicable tax data must be manually adapted, mainlythe tax country and the tax code.In order to distinguish between companies and individuals as the service recipient, the system (tax decision tree)checks whether a VAT number has been entered in the account master data. If the VAT number is missing, thebusiness case is regarded as a service that was performed for an individual.

Therefore, it is important to remember to include the VAT number when entering the account master data.

Reverse Charge MechanismReverse charge mechanism means that, in certain cases, the customer is required by law to be liable for VAT, andto pay it to the relevant tax authority. In this case, the entrepreneur issues an invoice without VAT, but with anotification indicating that the tax debt is being transferred to the customer. The customer must calculate and paythe VAT to the tax authority, and can claim input tax deduction at the same time as usual. The transfer of tax debtto the service recipient is called reverse charge mechanism.For more information, see Tax Determination with Reverse Charge Mechanism [page 166].

Third-Party Order Processing TaxationIn typical sales scenarios, transactions take place directly between a company and an account, both businesspartners are located in the same country, and the company produces and delivers a good or service directly to theaccount. In such scenarios, there is no need for special tax regulations. However, in the event that one or moreparameters of this business scenario differ from the typical situation and, for example, account address and ship-to addresses are not the same, special regulations apply, depending on how complex the scenarios are.For more information, see Third-Party Order Processing and Chain Transaction Taxation [page 168].

Relevant Date for the VAT Tax ReturnThe date used for the VAT tax return depends on the business document. For example, in the supplier invoice theReceipt Date is used, and in the customer invoice the Posting Date is used. But if you want, you can also enter a TaxDue Date.For more information on the tax due date, see Tax Due Date of Tax Items.

Entering or Changing Tax Codes in Journal Entry VouchersYou can enter or change tax codes in journal entry vouchers as follows:

● Sales OrdersGo to the Sales Orders work center and choose New Sales Order or an existing sales order for editing. ChooseView All. Go to the Items tab page and from there to the Taxes tab page. Choose an appropriate entry for theorder item selected under Tax Code.

● Invoices or Credit Memos

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Go to the Customer Invoicing work center and choose New Manual Invoice or an existing invoice or creditmemo for editing. Go to the Items tab page and from there to the Taxes tab page. Choose an appropriateentry for the invoice item selected under Tax Code.

● Purchase OrderGo to the Purchase Requests and Orders work center and choose New Purchase Order or an existing purchaseorder for editing. Choose View All Items . In the Basic Data tab page, select under Taxes the appropriatetax code for the selected purchase order item.

● Supplier InvoiceGo to the Supplier Invoice work center and choose New Invoice Without Purchase Order or an existing invoicefor editing. In the Overview tab page, select the appropriate tax code for the selected invoice item.

Tax Decision TreeThe system uses a tax decision tree to correctly determine a tax event. The tax decision tree consists of a sequenceof logically connected questions that the system determines as being true or false by comparing them with dataentered in the documents. In this way, the facts are narrowed down until the tax event and the correct taxationmethod has been determined.The questions are answered by comparing data entered in the document, and the underlying process can berepresented as a process flow. The questions in the following example are used to determine the tax event “Exportto Third Country” for a company based in Germany.

A tax decision tree is assigned to each country.

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Process Flow

The process flow for tax determination describes a sample of how the tax event is determined for an invoice:1. The sales representative creates and saves a manual invoice.2. After the required data is entered, the system transfers tax-relevant data to tax determination, such as:

● Location of supplier and buyer ● Tax attributes of the business partner

One of these attributes is the tax exemption reason that depends on certain country-specific laws. ● Tax attributes of products

Tax rate type and tax exemption reason can be different for each country, region, and tax type. In theUnited States, for example, services are not normally subject to tax, so the tax exemption reason shouldbe assigned in the product master data. Products are normally taxed at the standard tax rate and noother entries are required.

3. The system uses the tax-relevant data to activate tax determination, and the data is processed automaticallyin a tax decision tree.

4. The system calculates tax on the basis of the following components: ● Tax event ● Tax types ● Tax rate types such as standard value-added tax rate ● Tax rate as a percentage ● Taxable amount

5. The system includes the result of the tax determination and calculation in the sales order. The calculated taxis displayed on the Pricing tab and on the Taxes tab of the Items tab.

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All tax details determined by the system are displayed on the Tax tab. Examples are: ● Tax country ● Tax code ● Tax jurisdiction code in case the tax country is United States ● Tax region in case the tax country is Canada ● Tax date ● A table with one row for each tax type that lists the following:

○ Tax base ○ Tax rate type ○ Tax rate ○ Tax exemption reason, if necessary ○ Tax amount ○ Deductibility type (only for purchasing documents) ○ Country-specific parameters (if necessary), such as indicators for deferred tax (in France or India),

tax jurisdiction code (United States), or region (Canada).

However, not all tax-relevant transactions can be recognized automatically and correctly by thesystem.Therefore, we recommend that you overwrite the data manually in the document, in case the systemdoes not determine the correct tax country or the correct tax code for the transaction. If you have tochange the tax country in the document manually, the input help displays only the countries for whicha tax authority is created and tax arrangements are maintained for your company. However, you canalso enter another tax country in which sales need to be reported for tax purposes. The system thendisplays the specific tax codes for this country. Remember that you need to create the tax authorityfor this country. You then need to trigger tax determination again in the document so that the correcttax number of your company is found for the transaction. For countries that have multiple tax rates,you can enter the tax criteria manually.Note that if tax-relevant data such as the country of the service location or of the goods recipient hasbeen changed in a follow-up document of a business transaction, the Tax Country and Tax Code is notredetermined. This affects, for example, changes in the address data in a service confirmation that iscreated for a service order, or in a project invoice that is created for a sales order.

See AlsoParty ProcessingTax Determination — US [page 171] (This document covers topics specific for the United States, such as deliverytaxation in Texas and California, Nexus.)

6.1.3.2 Tax Determination Details

6.1.3.2.1 Master Data for Tax Determination

To ensure that the determination within your sales processes is running properly, you have created the followingmaster data:

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Tax AuthorityIn the Tax Management work center, you have created a master data record for each tax authority that is responsiblefor your company.

Company Tax ArrangementsYou have assigned a company tax arrangement in the master data record for the tax authority. You enter your taxnumber for the tax type to confirm that your company is registered and that you have declared tax to the relevanttax authority.

Tax Exemption Certificate in Account Master DataIn countries such as the United States, France, and Italy, accounts such as non-profit organizations can be exemptfrom tax payments for a certain period of time. For these accounts, you define the appropriate exemption certificatenumber and the validity date in the account master data. The Tax Exemption Certificates are taken into account insales transactions and are required to determine both the correct customer payment, and the proper payment tothe appropriate tax authority. If the tax exemption certificate is valid on the tax date, no tax is calculated. Theexemption certificate number is automatically entered in the payment document. You should enter a reason for thetax exemption in the account master data.

Tax Jurisdiction Code in Account Master Data for the United StatesYou have created a tax jurisdiction in the account master data.

CompanyCompany data, such as the company, address, and the tax jurisdiction code is entered in organizationalmanagement.

ProductsIf you do not enter any other information in a product master record, the product is taxed at a standard tax rate. Ifyou want to change the standard tax rate for certain countries, you must assign the tax rate type and, if necessary,a tax exemption reason to the relevant product in the master data.

ServicesFor taxes, you must specify which types of services you offer, and how these are to be taxed, or who is liable for taxfor a particular business transaction, so that the system determines the relevant tax code. Enter your services in theServices view of the Product and Service Portfolio work center under the Service Description tab, and if necessary,assign them to the relevant tax exemption reason on the Taxes tab, or specify whether the service is taxable at thelocation where the service is to be provided:

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If a repair part is either implemented or installed, then the tax implication can either be a work delivery or workperformance. The system can't automatically determine these cases. In each individual instance, verify theapplicable tax code on the Taxes tab for the service and part item.

Specifics for European Union ● Certain services are always taxed at the head office of the company that provides the services, even if these

services are provided for an account located outside the borders where the head office is located. In themaster data records of such services, ensure that nothing has been entered in the Tax Exemption Reasonfield on the Taxes tab, and that the Taxable at Destination indicator has not been set. According to Directive2008/8/EC and its implementation under the Annual Tax Act 2009 from January 1, 2010 onwards, this is thebasic rule for services that are provided for a private end consumer located outside the borders where thehead office is located.

● Certain services must always be taxed at the location where the service is provided, such as constructionworks on buildings. For such services, set the Taxable at Destination indicator on the Taxes tab. Here, thesystem checks where the service is provided. The transaction is not taxable domestically if the location atwhich the service is provided is abroad. If this indicator is selected, then the address of the service locationis used to determine where the services will be taxed. In such a case, the company providing the goods orservices must tax the business transaction in the receiving country and also be registered there. Accordingto Directive 2008/8/EC and its implementation under the Annual Tax Act 2009 from January 1, 2010onwards. An example of this is work performed on movable tangible property for a private end consumerabroad.

● To ensure that automatic tax determination works correctly, you must set the indicators and enter the taxexemption reasons for all relevant countries. It is especially necessary to maintain the Taxable at Destinationindicator for both the issuing and receiving countries. In comparison, if goods or services are taxable atdestination, it is the seller's responsibility to calculate and pay the tax in the receiving country. Therefore, itis not enough to maintain the tax details just for the issuing country; you also need to maintain them for thereceiving countries.However, certain circumstances may lead to non-taxation or double taxation. Non-taxation occurs if a serviceis indicated as Taxable at Destination in the issuing country but not in the receiving country. Double taxationoccurs if a service is indicated as Taxable at Destination in the receiving country but not in the issuing country.These legislative inaccuracies also exist in reality. However, the system does not support double taxation. Forservices that are not taxable in the issuing country (namely those indicated Taxable at Destination), thesettings for the receiving countries should be checked carefully to avoid accidentally leading to non-taxation.

The Taxable at Destination indicator is only utilized in CRM-related transactions, and not in SRM-relatedtransactions.

● Other services such as those provided by a company located abroad or specific work deliveries are taxedaccording to the reverse charge mechanism. For more information, see Reverse Charge Mechanism[page 166].From the seller's perspective, the transaction must be reported, but the tax debt transfers to the account. Ifthis tax exemption reason is entered in the services master record, the system applies the reverse chargerule for a corresponding sales transaction. The note referring to the reversal of tax debt (reverse chargemechanism) is printed on the invoice. The relevant tax exemption reason must be entered for the service onthe Taxes tab. According to Directive 2008/8/EC and its implementation under the Annual Tax Act 2009from January 1, 2010 onwards, this is the basic rule for services that are provided for a company abroad. Thisbasic rule is determined automatically, if the head office of the company providing the goods or services is inany EU member state. In the case of domestic accounts, however, the system does not automaticallyrecognize the reverse charge rule. Where applicable, the user must manually overwrite the tax code in thesales document (§13b (1) No. 2 - 5). For this you can create your own tax code and legal phrase in business

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configuration. For more information, see Tax on Goods and Services — Configuration Guide [page 169].The corresponding tax event and tax exemption reason code are already available in the system.

Specifics for the United States of America ● The service location is always used for tax determination for services in the USA. The Taxable at Destination

indicator is not relevant for the USA.

See AlsoTax on Goods and Services — Configuration Guide [page 169]Tax Determination [page 152]

6.1.3.2.2 Elements of Tax Determination

OverviewThe following sections provide you with an overview of the tax determination elements and their relations:

Tax Type and Tax Rate TypeEvery tax type in a tax event has a tax rate type and a tax rate that is applied to the tax base (in most cases the netamount) to calculate the tax amount for the relevant tax type.Tax rates are represented in the system by tax rate types – in the example of Germany, the tax rate of 19% for value-added tax corresponds to the Standard tax rate type. This makes it easy to represent time-dependencies. If the taxrate for this tax type changes because of a new law, you can define a new tax rate in the system for a specific validitydate without having to create a new tax code.Country Specifics

● India and CanadaFor tax jurisdictions such as India and Canada, where more than one tax type exists, the following fields canbe used: Tax Rate Type and Tax Exemption Reason, as well as Deductibility Type for purchasing documents.

● GermanyThe Standard tax rate type is calculated for the Value-Added Tax tax type on the basis of the net amount. Thismeans that if the tax rate is 19%, a tax amount of EUR 19 is calculated for a net amount of EUR 100.

Tax RateCountry Specifics

● Canada and United StatesFor Canada, tax rates are preconfigured for each province and territory in Canada, and for each state in theUnited States. However, before using the system, you must check whether these tax rates are still validaccording to any recent legislative amendments.

Tax EventIn the tax event, the system determines the method of taxation to be used for the business transaction accordingto:

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● Which tax types are applicable ● Whether the business transaction is taxable or not ● Whether the business transaction is subject to tax or not ● Which tax rate is applicable

For transnational business transactions, the system uses a tax decision tree for both the ship-from country and theship-to country to determine the taxation method used in the tax event for each country. The relevant decision treesare determined by the tax countries entered in the document, in particular by the countries of the supplier and thegoods recipient. Other tax jurisdictions can be the:

● Location of the business residence of the seller who provides a service ● Location of the business residence of the buyer for whom a service is provided ● Location where the service is to be provided

Implications of the tax event for other areas: ● To calculate tax, the tax event takes the following into account:

○ Due tax type ○ Procedure for tax calculation ○ Tax exemption reasons, if required

● To determine tax, the tax event specifies the following: ○ Allocation criteria for the tax reports ○ The field in which the tax is displayed on the tax return:

You can assign tax events to the fields of the tax return form for the relevant country. For moreinformation see, Tax Returns for Goods and Services.

● In accounting, the tax event controls account determination.

There are, of course, more tax events in the system for other common business transactions. However, you cannotcreate your own tax events.Country Specifics

● GermanyExamples of tax events ○ 10: Domestic Acquisition (§15 I 1 Nr. 1) ○ 100: Intra-Community Acquisition ○ 310: Domestic Supply Of Goods And Services ○ 400: Intra-Community Supply (§4 Nr. 1b UStG)

In accordance with Directive 2008/8/EC and its implementation under the Annual Tax Act 2009, intra-community service provision must also be declared in VAT tax returns as of January 1, 2010. For this purpose,new fields have been introduced in the VAT tax return: fields 21, 46, and 47. To use these fields for servicesprovided in a foreign member state of the European Union, there are two new tax events for Germany and allother EU member valid as of January 1, 2010. ○ Sale 455 "EU Sale of Services, Reverse Charge" ○ 155 "EU Purchase of Services, Reverse Charge"

Errors may occur, if you use these tax events with an earlier tax date.

Deductibility TypeIn addition to the tax rate, the percentage rate at which input tax is deductible plays a part. Depending on the typeof company or the type of outgoing sales volume in which a certain incoming sales volume is incorporated, input taxcan be deducted at a rate of 100%, 0% or a rate determined specifically for the company. For this purpose, you

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define deductibility types that represent the percentage rate. The two most frequently used deductibility types areFully Deductible (100%) and Not Deductible (0%).

Tax CodeThe appropriate method for calculating tax is determined by a combination of tax type, tax event, and tax rate type,and by the deductibility type for the input tax of the sales volume. You can define tax codes in the system to avoiderrors when these parameters are entered manually.Each tax code represents a unique combination of the following parameters:

● In sales ○ Tax event ○ Tax types ○ Related tax rate types

● In purchasing ○ Tax event ○ Tax types ○ Related tax rate types ○ Deductibility types

This makes it possible to define all parameters represented by a tax code in the document by selecting a tax code,without having to enter each parameter individually.Taxes can be calculated automatically only for those products in the product master. This is why you may sometimeshave to enter the tax code manually, especially in purchasing. Alternatively, you may enter a product category sothat the tax rate type for this category can be used, thus enabling automatic tax calculation.The system uses one unique tax code for a tax event only for those countries that have one tax type.Country Specifics

● Canada and IndiaIn both countries several tax types can be taken into consideration for a tax event. India, for example, usesmultiple tax types, and each tax type has multiple tax rate types and deductibility types. The number ofpossible combinations resulting from this makes it impossible to work efficiently with tax codes. In thesecountries, the tax code corresponds to the tax event.

● GermanyIn accordance to Directive 2008/8/EC and its implementation under the Annual Tax Act 2009, intra-community service provision must also be declared in VAT tax returns as of January 1, 2010. For this purpose,new fields have been introduced in the VAT tax return: fields 21, 46, and 47.To use these fields for services provided in a foreign member state of the European Union, there are two newtax codes for Germany and all other EU member valid as of January 1, 2010: ○ Purchasing: 430 "EU Purchase of Services, Reverse Charge, standard rate, fully deductible ○ Sale: 530 "EU Sale of Services, Reverse Charge" ○ Exception for Italy: There the tax code for sales is: 540 "EU Sale of Services, Reverse Charge"

Exempted RegionIn many countries there are regions and areas that have special status under tax law. For example, Büsingen andHelgoland are exempt from German value-added tax. In business configuration you can define the regions that areexempt from national tax regulations, or have a special status. Such regions can correspond to political regions,communities, or tax-free zones and are derived directly from the postal code.

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Tax Jurisdiction CodeTax jurisdiction levels are taken into account in tax calculation when taxes are in states, counties, and cities, but noton national levels of government. The different levels in a tax jurisdiction code represent different administrativelevels. Fine-tuning this activity ensures that the system uses all administrative levels to determine the tax rate foreach authority.In some countries, however, other government levels have tax jurisdiction. In these cases, you can adapt them.Define tax rates after you have maintained jurisdiction code.Country Specifics

● United StatesIn the United States, taxes are collected not only by states, but also by counties and cities; for domestic sales,taxation therefore depends on the state, county, and city in which your company and the goods recipient arelocated. For this purpose, you can enter a tax jurisdiction code in the master data of the company and thecustomer.The tax jurisdiction code represents the location of your company, your customer, or your supplier in ahierarchical structure, so that one country can have multiple states that, in turn, can have multiple cities andmunicipalities.The tax jurisdiction code is structured as follows: ○ 2 alphanumeric characters for the first level; this is the standard state code ○ 6 alphanumeric characters for the second level; for example, the county ○ 6 alphanumeric characters for the third level; for example, the city ○ 1 alphanumeric character for the fourth level, for example, the location or the area

It is not necessary to use all four levels. The number of levels used depends on the state.This function is currently used only in the United States.For the United States, tax jurisdiction codes have been preconfigured in the system on U.S. state level. Youmust enter further levels as required. If a tax jurisdiction code has not been assigned to a customer, the systemuses the U.S. state in the address as a tax jurisdiction code.Example

Tax Jurisdiction Code - Description Tax Jurisdiction Code Taxation in %

New York State NY 4%

Albany County NYAL0181 4%

Allegany County NYAL0221 4,5%

In the NYAL0181 tax jurisdiction code, NY stands for New York State, AL0181 stands for Albany County in NewYork State. For Albany County, two levels of the tax jurisdiction code are taken into consideration, and 8%(4% + 4%) of tax is levied. For Allegany County, 8.5% (4% + 4.5%) tax is levied.

● CanadaOther countries such as Canada have tax rates that depend on regions. This is because Canada is divided intoprovinces and territories. In these cases, use the Region field.

Tax ExemptionTax exemption is an exemption from all or certain taxes that are levied in a country. In most cases, the basis for taxexemption is determined by legal requirements. In some cases, these may apply without having to account for them.

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To ensure transparency, many legislators require that the reason for tax exemption be specified on relevantdocuments such as invoices. Tax exemption reasons are provided in the system, cannot be changed, and areassigned to a tax type.A customer's direct payment and exempt organization certificates are applicable until they are revoked.The tax exemption certificates are determined automatically in a sales document.You can assign relevant tax exemption reasons to product and customer master data by selecting the relevant entryin the Tax Exemption Reason fields.For more information, see Tax Exemption Certificate Processing [page 164].Country Specifics

● United StatesFor the United States, several tax exemption certificate types are available: ○ Direct Payment Certificate - continuous ○ Exempt Organization Certificate - continuous ○ Exempt Use Certificate - continuous ○ Exempt Use Certificate - single ○ Resale Certificate - continuous ○ Resale Certificate - single

The state must be added also.Only the following tax exemption certificate types can be found automatically, since only in these cases is itcertain that the exemption certificates always apply: ○ Direct Payment Certificate – continuous ○ Exempt Organization Certificate – continuous

For all the other certificate types, you need the information from the customer whether the certificate can beused for the current transaction.You must then assign the types manually in a sales transaction.

Legal Text InformationLegal text information is a textual explanation of the exemption reasons printed on invoices. These texts explain whycertain transactions are exempt from tax, thus allowing you to meet legal requirements.The legal text information is printed on a customer invoice, if, for example, a tax exemption is applicable. However,if the texts are not available in the required language, the system uses the English text for the invoice.

6.1.3.2.3 Tax Exemption Certificate Processing

OverviewA tax exemption is an exemption from all or certain taxes of a state or nation in which part of the taxes that wouldnormally be collected from an individual or an organization are instead foregone.A tax exemption certificate is a certificate sent by a customer to a company claiming exemption from tax on sales.In this system, the tax exemption certificate:

● Indicates the period of time during which the tax exemptions can apply ● Indicates if the tax exemptions apply to a single sales transaction or multiple sales transactions

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● Indicates if the exempted (cumulated) amount exceeds a maximum amount when the exemptions apply inmultiple sales transactions

This applies to the Tax Exemption Certificates for France only.

● Indicates the reason for tax exemption

In France, a customer can apply to the authorities for exemption from VAT. If the exemption is granted,the customer receives a letter of confirmation including a license number and the period for which he isexempt from VAT. The customer sends this letter to a vendor, who must then take the tax exemption intoaccount when invoicing the customer. The vendor may not include any tax in customer invoices for thevalidity period of the tax exemption license.

PrerequisitesYour customer has registered with the tax authority for tax exemption and received a tax exemption certificate fromthem. This certificate has been assigned to the account.

Process FlowThe following steps explain the typical process flow for the Customer Tax Exemption Certificate in customerinvoicing.

1. When you create a sales/service order or customer invoice, the system searches for existing tax exemptioncertificates and automatically assigns a valid certificate. You have an option of rejecting the proposal andprevent the exemption to apply at header/line item level.You can manually assign an existing certificate and the relevant exemption reason at header/line item level.

You can see a set of elements (fields, links, push button, check box) related to tax exemption certificateswhen you create or view a sales/service order or a customer invoice. These elements are only visibleif the seller company is located in the US or France.

2. You can also create a new certificate if it does not exist and assign it immediately to the sales/invoicingdocument. The system allows you to enter the relevant tax exemption information sent by the customerdirectly in the business document.For more information, see, Create Tax Exemption Certificates

3. The certificate records and shows the sum of the amounts which were exempted. The amount exempted byeach certificate during the invoicing process is cumulated on the corresponding certificate.

In France, you can set a maximum tax amount that cannot be exceeded. The system prevents thecumulated amount to exceed the limit during the invoice creation process if a certificate only allows alimited amount to be exempted. The cancellation of invoices including certificates reverts theaccumulation performed previously.

In the Account Management work center, under the Reports view, you can monitor in real time the tax exemptioncertificates created in the system and sent to the company.

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6.1.3.2.4 Tax Determination with Reverse Charge Mechanism

OverviewValue-added tax (VAT) is charged revenue from the sale of goods and services. This means that an entrepreneurissues a customer (as the service recipient) with an invoice that includes VAT, and pays the VAT to the responsibletax authority. As a result of this, the entrepreneur is the tax payer who is liable for VAT.In certain cases, however, the customer is required by law to be liable for VAT, and to pay it to the relevant taxauthority. In this case, the entrepreneur issues an invoice without VAT, but with a notification indicating that the taxdebt has been transferred to the customer. The customer must calculate and pay the VAT to the tax authority, andcan claim input tax deduction at the same time as usual. The transfer of tax debt to the service recipient is calledReverse Charge Mechanism and reverses the tax liability.

Automatic Tax Determination with Reverse Charge MechanismCountry Specifics for GermanySome services, such as those provided by a company located abroad, or services that are provided for a servicerecipient located abroad are taxed according to the reverse charge mechanism. From the perspective of the seller,the transaction must be reported, but the tax debt transfers to the account. According to Directive 2008/8/EC andits implementation under the Annual Tax Act 2009 as of January 1, 2010, this is the basic rule for services that areprovided for a company abroad. This basic rule is determined automatically, if the head office of the companyproviding the goods or services is in any EU member state. No tax exemption reason code must be entered in theservice master.For Germany, the system currently only covers the transfer of tax debt for other services provided by an entrepreneurlocated abroad if these services are provided domestically (§ 13b Abs. 1 Nr. 1 UStG), or if a German company providesother such services for a service recipient located abroad.The process flow for tax determination describes the determination of tax event 240 – Reverse Charge Acquisition§13b II 1 Nr. 1 UStG, tax event 312 – Export of Service, Reverse Charge, and the anomalies to be taken into account:

1. Create a sales order, a purchase order, or an invoice.2. While the document is being processed, the system transfers the tax relevant data to tax determination.

Examples of tax relevant data for reverse charge mechanism are: ● Location of supplier and buyer

○ Sale of a service ○ The seller company must be located in Germany.

The address of the seller is used, and the system normally uses the standard address of yourcompany unless you have overwritten the address in the sales order on the Involved Parties tab.

○ The service recipient must be located abroad.The location where the service provision takes place is used and must not be in Germany. Ifthe recipient is a private individual, the service can only be subject to reverse chargemechanism if it is provided in the European Union (EU). If items in an invoice contain servicesthat have been provided at different locations (according to the address of the service or goodsrecipient on the Involved Parties tab), these addresses are used first.

○ Purchasing a Service

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○ The supplier must be located abroad.The address of the supplier is used as a basis, and the system uses the standard address.

○ The service recipient must be located in Germany.The location where the service is provided is decisive. It is also possible that individual invoiceitems contain different locations where the services have been provided (according to theaddress of the goods recipient). In this case, this is used as a priority.

● Tax attributes of productsTax rate type and tax exemption reason can be different for each country, region, and tax type. In theUnited States, for example, services are not normally subject to tax, so the tax exemption reason shouldbe assigned in the product master data.Enter the following settings for reverse charge mechanism in the master data for services on the Sales > Taxes and Purchasing > Taxes tabs as required: ○ Tax Exemption Reason: Buyer liable for VAT

○ The Taxable at destination checkbox must not be selected.3. The system processes all tax-relevant data in tax determination.4. The system calculates tax using the following components:

● Tax event, for example 240 – Reverse Charge Acquisition §13b II 1 Nr 1 UStG for purchasing or 312 –Export of Service, Reverse Charge for sales

● Tax codes ● Tax type ● Tax rate type such as the complete value-added tax rate with which the tax rate is determined as a

percentage, for example 19% ● Taxable amount

5. The system enters the result of the tax determination and the tax calculation in the document currently beingprocessed. The calculated tax is displayed on the Pricing tab. All tax details determined by the system aredisplayed on the Tax Details tab, such as the Tax Country and the Tax Code of the tax country.

If reverse charge is determined for a sales order or a manual invoice, a note is displayed on the printedinvoice that the customer must pay tax.

For more information on the general process of tax determination, see Tax Determination [page 152].The system cannot process other reverse charge mechanism scenarios in the automatic tax determination, so thesemust be checked manually.

Manual Control for Reverse Charge MechanismFor some countries there are also other sales or purchasing processes that are subject to reverse charge but cannotbe determined automatically by the system, as for example, in Germany sales according to §13b (5) UStG orpurchases according to §13b (2).Country Specifics for Germany

● For mobile radio units and integrated circuits with a tax date as of July 1, 2011 and an invoice amount of atleast 5000 Euros, reverse charge applies according to § 13b (2) Nr.10 UStG.In this case you have to change the tax code manually to one of the following: ○ 15 – Reverse Charge Acquisition §13b II 1 Nr. 10 UStG ○ 515 – Reverse Charge Supply §13b II 1 Nr. 10 UStG

● For these processes, the system provides the tax events 313 – Reverse Charge Supply §13b V UStG and 50– Reverse Charge Acquisition §13b II 1 Nr 4, 6 - 9 UStG, 11 – Reverse Charge Acquisition §13b II 1 Nr 2 UStG,

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12 – Reverse Charge Acquisition §13b II 1 Nr 3 UStG, 13 – Reverse Charge Acquisition §13b II 1 Nr 5 UStG and240 – Reverse Charge Acquisition §13b II 1 Nr 1 UStG. But you need to create your own tax code in your system.

● If you obtain your sales revenue according to §13b (5) UStG, you must enter the tax code manually.

Tax Events Stored in the SystemCountry Specifics for GermanyThe following tax events are currently stored in the system and can be used to create tax codes for Germany:

● Purchase: ○ 11 – Reverse Charge Acquisition §13b II 1 Nr. 2 UStG ○ 12 – Reverse Charge Acquisition §13b II 1 Nr. 3 UStG ○ 13 – Reverse Charge Acquisition §13b II 1 Nr. 5 UStG ○ 50 – Reverse Charge Acquisition §13b II 1 Nr. 4, 6 – 9 UStG ○ 240 – Reverse Charge Acquisition §13b II 1 Nr.1 UStG ○ 15 – Reverse Charge Acquisition §13b II 1 Nr. 10 UStG

● Sales: ○ 312 – Export of Service, Reverse Charge ○ 313 – Reverse Charge Supply § 13b V UStG ○ 315 – Reverse Charge Supply §13b II 1 Nr. 10 UStG

The following tax code and tax events combinations are provided by the system and determined automatically: ● Tax code 504 – Not taxable (reverse charge mechanism) is linked to tax event 312 – Export of Service, Reverse

Charge ● Tax code 530 – EU Sales of Service, Reverse Charge is linked to tax event 455 – EU Sale of Service, Reverse

Charge

For purchasing, tax code 430 – EU Purchase of Services, Reverse Charge, Standard Rate, Fully Deductible with taxevent 155 is available.If you need further tax codes, you can create them under Define Tax Codes of the Tax on Goods and Services activityin Business Configuration Implementation Projects Activity List Fine-Tune .

When you create a tax code, ensure that you provide the tax type under Details.

6.1.3.2.5 Third-Party Order Processing Taxation

OverviewThird-party order processing scenarios involve at least three parties: Seller, account, and supplier.A Third-Party Order Processing is a sales transaction that is conducted by several parties for one item, where theitem is shipped directly from the supplier to the account or ship-to party.For more information concerning the general processing in the system, see Third-Party Order Processing[page 36].Chain transaction means consecutive supplies of goods between three or more legal entities, where the contractualobligations of all parties in the chain are discharged by a single movement of goods from the first supplier in thechain to the final customer.

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From a taxation point of view, the scenarios where the sales transaction crosses borders and the subject to tax hasto be determined, are of interest.This also has an impact onto the country where the taxes have to be paid. In the following processes, the systemsupports the user by displaying warning messages and triggering a check of the tax codes:

● You are a supplier in a chain transaction and you enter a ship-to party that is different from the account. Thesystem displays the message if the head offices of the ship-to party and your company are in differentcountries.

● In a third-party deal, you are the company that creates a sales order to which an external supplier is assigned.The external supplier delivers the goods directly to the customer. These transactions are generally notinvoiced automatically during an invoice run.

Country Specifics in case the seller and supplier are different: ● Germany: These transactions are not invoiced automatically during an invoice run if the head office of your

company is in Germany.

Value-added tax for chain transactions is treated differently, especially if the item is transported across a stateborder. It is necessary to decide on a case-by-case basis, which of the companies involved is allowed to issue a tax-exempt invoice. If the tax has not automatically been calculated correctly in this transaction, or if tax has beencalculated even though the transaction is tax-exempt, change the tax code and, if necessary, the tax country, on theTaxes tab accordingly.

Intra-Community Triangular TradeAn Intra-Community Triangular Trade is a special kind of third-party order processing, where all three participantsare located in different EU member states. Under certain circumstances, a simplification can be applied to intra-community triangular trades. The prerequisites for the application of this process are:

● The three companies transact business for the same item. ● All participating companies are registered in different EU member states for value-added tax purposes. ● The item goes straight from the first supplier to the final account. ● The item goes from one EU member state to another. ● The first supplier or the first company is responsible for the transport of the item.

Country Specifics ● Germany: If the simplification can be applied to the triangular transaction, then the 512 - Triangular

Transaction tax code can be entered manually in the invoice.

6.1.3.2.6 Tax on Goods and Services - Configuration Guide

In this configuration activity, you can create and change parameters required for the tax determination in sales,purchasing, and service processes such as tax jurisdictions, currency conversions, exempted regions, legal textinformation, and tax codes. These parameters are required for the system to determine the tax due for a businessdocument.To comply with country specific legal requirements, currency conversion types are required. This includes theexchange rate type and conversion types that must be used to convert tax amounts from the document currencyto the reporting currency.To find the Tax on Goods and Services activity, go to the Business Configuration work center and choose theImplementation Projects view. Select your implementation project and click Open Activity List . Select the Fine-Tune phase, then select the Tax on Goods and Services activity from the activity list.

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PrerequisitesYou have completed the Tax Settings for Purchasing activity for purchasing processes.To find this activity, go to the Business Configuration work center and choose the Implementations Projects view.Select your implementation project and click Open Activity List . Select the Fine-Tune phase, then select the TaxSettings for Purchasing activity from the activity list.

Business Background

Tax DeterminationAs a rule, companies are legally required to calculate taxes on products that they buy or sell, and to levy these taxesfrom their customers. After the products have been provided, the taxes must be declared and levied to the respectivetax authorities. The system supports you by providing a substantially automated tax calculation for the following taxtypes: Value-Added Tax (VAT), Sales and Use Tax, Withholding Tax. The system also provides a reporting tool thatgives you effective control over your obligatory declaration of these taxes.For more information, see Tax Determination [page 152].

Master Data for Tax DeterminationFor more information, see Master Data for Tax Determination [page 157].

Tasks

Define Currency Conversion Type1. To create a new currency conversion, click Add Row .2. Select the country for which the exchange rate is valid.3. Enter the date for the end of the validity period for the exchange rate type and

conversion type.4. Enter the type of exchange rate used such as Historical Currency Rate or EMU

Regulation Fixed Exchange Rate.5. If necessary, change the conversion type which is defaulted to Mid Value to either Bid

Value or Ask Value.6. Save your entries.

Define Exempted Regions1. To define an exempted region, click Add Row .2. Select the country of the exempted region.3. Enter a code for the exempted region.4. Enter a description for the region.5. Select the status of the exempted region.6. Optional: Under Details, enter the Postal Code.7. Save your entries.

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Define Tax Rate Schedules1. To define tax rates and validity dates, click Add Row .2. Select a country for which you want to create a tax rate schedule.3. Select the applicable tax type of the taxes that must be declared and paid to the

respective tax authorities such as value-added tax, sales and use tax, and withholdingtax.

4. Select the tax rate type, for example, Standard, Reduced, or Exempt Rate.5. Enter the date from which the tax rate is valid.6. Enter the rate as a percentage.7. Save your entries.

Define Standard Phrases for Legal Text Information

We recommend that you create a standard phrase specifically for each country sinceexemption reasons can differ for each country. If a standard phrase is not available forthe required language, the English text is printed in the invoices. All languages aredisplayed in this view.To enter the legal texts for a specific language, you must be logged on to the system inthat language.

1. To define standard phrases for legal text information, click Add Row .2. Select the country for which the legal text information is valid.3. Select the applicable tax type for which legal texts are required such as value-added

tax, sales and use tax, and withholding tax.4. Select the number of the Tax Exemption Reason.5. Check the selection of the Language field. It is preset according to the language in which

you are logged on and must correspond to the language of your legal text.6. Enter the legal text explaining the legal basis of the exemption.

This text is then included on the invoices where required.7. Save your entries.

Define Tax CodesFor more information, see here.

Follow-On ActivitiesAfter you have completed the tasks here, we recommend that you check the tasks of the country-specific activitiesthat are required for countries that you have scoped.

6.1.3.3 Tax Determination — US

Here you can find tax information specifically for the United States.

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Delivery TaxationTaxes on materials deliveries within the United States are levied according to the law of the destination state (Ship-to). Only in California and Texas are the deliveries taxed according to the state of origin (Ship-from). Taxes on servicedeliveries are levied according to the law of the state of destination.You can add your own combinations in business configuration and decide which combination is origin-based ordestination-based for an intrastate transaction, which means that ship-to and ship-from are the same US state. Tofind the activity, go to the Business Configuration work center and choose the Implementation Projects view. Selectyour implementation project and click Open Activity List . Select the Fine-tune phase, then select the Tax on Goodsand Services — US activity from the activity list.

NexusNexus is a connection between a taxpayer and a state where the taxpayer has to pay taxes. The rules to establishthe connection between the two differs from state to state. However, with this nexus a state is required to collectsales tax for sales.Therefore a sale within a particular state is only taxable in the system if the seller company has nexus in the state.If the seller does not have a nexus, no sales tax will be determined and the system assigns tax code 507 – Non TaxableSale Under Nexus Rules to the sales document.This means the seller company issues an invoice without tax for nexus reasons. The transaction is recordedstatistically in the tax register.If your company has nexus in a state, you must have the following settings prepared:

● You created a tax authority for this state in the Tax Management work center. For more information, see QuickGuide for Tax Authorities (Tax Management).

● You created entries in the system for every tax authority to which tax returns have to be submitted. ● You created a company tax arrangement for every tax authority that is relevant. ● You entered a tax registration number for the company tax arrangement. This documents that the company

is registered in the state where the tax authority is located, and provides the basis for nexus determinationin the tax determination.

If a company tax arrangement has been created properly for a state, and a sale takes place in this state, the taxdetermination works as described in Tax Determination [page 152].

6.1.4 Withholding Tax Determination

OverviewA company or other organization type makes payments to multiple entities during a fiscal period. These paymentscan be categorized into two basic types based on where the payments start within the organization:

● Payroll paymentsPayments within an organization, for instance, to employees

● Accounts payable paymentsPayments to individuals and organizations outside of the company such as to suppliers, stockholders, anddebt holders

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Withholding occurs in both categories, but this document addresses only the withholding that takes place with theaccounts payable payments. A major purpose of withholding tax on accounts payable payments is to ensure thatincome tax is paid to the tax authority on these payments which represent income.

Tax BaseThe tax base for withholding is determined by country-specific laws.

● Within the United States and France, the tax base is the amount paid including discounts and sales and usetax or VAT.

● Within the United Kingdom, the tax base is paid amount net of discounts and tax. ● Other countries have similar rules.

Imposition of Withholding TaxWithholding tax is levied on payments to suppliers or service agents, but each country again has specific lawsgoverning how the payments are to be taxed and when:

● In France and the United States, the supplier is only levied a tax when it fails to provide tax identificationinformation.

● In the United Kingdom, tax is withheld and remitted to the tax authority at the time the invoice is paid ● In China, tax is withheld and remitted to the tax authority at the time the invoice is received ● In India, tax is withheld and remitted to the tax authority at the time the invoice is received or at the time of

payment, whichever occurs earlier. ● In all cases, a report of the amounts paid to a supplier is required to be delivered to the tax authority and to

the supplier for a fiscal period. If a tax is withheld, then this must be reported to both parties as well ● Generally, the suppliers subject to withholding are non-incorporated companies, partnerships, and self-

employed individuals, in particular, foreigners

Taxable Goods and ServicesAs is the case in the tax base and tax imposition, withholding tax on goods and services is determined by country-specific rules. The tax threshold amount and the imposition of withholding tax also depend on the taxability of thegoods and services. Payments are classified by the underlying goods or services provided by the supplier.

Withholding Tax CalculationOverviewNot all transactions are subject to withholding tax. Withholding tax is due if the following conditions are all true:

● The buyer (buying company) is obligated by law to withhold ● The supplier is subject to withholding ● The product is relevant for withholding

As a consequence, the following master data objects carry attributes that are specific to withholding tax: ● Company Tax Arrangement ● Supplier ● Product

Attributes Attributes in DetailRequired Master Data Elements

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Master DataObject Master Data Elements Description

Tax Authority/Company TaxArrangement

Withholding Tax Indicator If the indicator is selected, the company will withhold taxes where applicable.

Supplier Country CodeTax Type CodeTax Rate Type Code

If no entry is provided for a country, it implies that the supplier is not subject towithholding.A tax rate type code can be assigned for a particular country and tax type; inthis case, the supplier is subject to withholding. In most cases, there is only onetax rate type code available because withholding tax rates do not depend onthe supplier.In some countries, there are withholding taxes where the rate is influenced bythe supplier; in this case, there are multiple tax rate type codes available.

Product Country CodeTax Type CodeWithholding TaxIncome Type Code

A product is only subject to withholding tax if a classification is provided.

Terms and Definitions ● Income Type

Classifies the goods or services for reporting in the correct locations on the legally required forms. Thewithholding tax rate can be stored in the income tax type but can also be stored on the supplier dependingon country rules.

● Tax Decision TreeFunctionality within the solution that determines the Tax Event depending on parameters and attributesreceived from the calling applications, such as supplier relationship management (SRM) with incominginvoices and related outgoing payments.

● Tax Rate Type CodeA code that represents the type of tax rate as defined by law for the classification of tax rates. A specific taxrate is derived from the Tax Rate Type Code in connection with input from the calling application, for example,supplier invoice.

● Tax TypeA specific attribute of the Tax Event determined by the Tax Decision Tree. This represents the type of tax beingcalculated and is country specific. Withholding tax is an example of a tax type.

● Withholding Tax Event Type CodeUsed in the calculation of taxes for the determination of type and rate of the respective tax and determineshow and when taxes are to be reported and paid to the tax authorities.

PrerequisitesTo enable withholding tax to be posted and the amounts to be reported to the supplier and the tax authorities, thesystem proposes a withholding tax code in the purchasing document to represent the tax event, tax rate type, andincome type. The withholding tax code enables the system to calculate the tax amount. You can select a differentwithholding tax code to replace the one proposed by the system, if necessary.Additionally you should have a look to the following entries and check whether they fit to your needs:

● Tax authority of the company that is subject to withholding tax ● Company tax arrangement

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There is a withholding tax indicator that should be indicated for the particular company ● Various tax numbers that are used for reporting must be entered ● Supplier

It is indicated in the supplier master record whether the supplier is subject to withholding tax. In somecountries the tax rate is specified here as well

● ProductIt is indicated in the product master record whether the product is subject to withholding tax. The incomecode is stored here, describing the types of services or materials. If it has not been specified by the supplier,on the basis of the income code, the tax rate is specified.

Process FlowThe process flow for withholding tax describes the continuous process of tax calculation where the tax is withheldat the time of invoice creation or payment and remitted to the tax authority. During this process you work with theSupplier Invoicing and Business Partner Maintenance work centers.

1. You receive an invoice from your supplier, for example, for a delivery of goods, and you enter the data in thesystem.

2. The system checks in the supplier master data record whether the tax rate type for the withholding tax hasbeen entered. If there is no tax rate type, the system does not calculate a withholding tax for the supplierinvoice.

3. The system then checks in the product master data whether an income type has been entered. If not, thesystem does not calculate a withholding tax for the purchase document. If an income type has beenmaintained, the system carries out the next step.

4. The system determines the tax event using the withholding tax decision tree for the relevant country.5. The system checks the tax event to determine whether the combination of supplier and product is subject to

withholding tax or not. If the combination is subject to withholding tax, the system carries out the next step.6. Now the system enters the relevant withholding tax code in the purchase document. It is a combination of

tax rate type, income type, and tax event. The system calculates the withholding tax amount based on thiscombination. The tax rate is based on the following parameters and is dependent on the relevant country: ● Income type and tax rate type ● Income type and percentage

6.1.5 Tax Deferral Process for Supplier Invoicing

OverviewWhen you receive a supplier invoice for services, part of the tax amount can be used as a tax credit for your taxliabilities. If you apply a tax deferral scheme, you cannot deduct this tax credit from your tax liabilities until you paythe invoice. This deferred tax process applies in some countries such as France and India.If your company pays only for a part of the invoice amount, the deferred tax payable is in proportion to the invoiceamount paid. For example, if your company pays a third of the gross invoice amount to the supplier, your companyis entitled to claim a third of the tax amount of this invoice as a tax credit.

In India, you cannot claim the tax credit for a deferred tax item in your invoice until you pay the invoice in full.

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PrerequisitesFor your suppliers in France that have authorization to defer tax, you have set the Authorization to Defer Tax checkbox. In the Supplier Base work center, choose the Supplier view, then select the supplier from the table and choose Edit General to display the supplier edit screen.

Process FlowThe process flow for tax payment deferral is outlined below.

1. You receive an invoicing document (such as an invoice or credit memo) from your supplier.2. An accountant enters the invoicing document in the system.

The system proposes default values for the deferred status for every line item in an invoicing document.However, if you are creating an invoicing document from a preceding document such as a purchase order,the system transfers the statuses of the tax deferral check boxes from the preceding document to theinvoicing document. You can change these values if necessary.

In India, the system selects the tax deferral check box for all service items in the invoice, and you cannotchange this setting. However, you can check the status of this check box in your invoices under ViewAll Items Taxes .

3. The accountant posts the invoicing document.The system posts the invoicing document to the general ledger.

Since the tax associated with the deferred items is not yet available as input tax credit for the company,the system cannot post this tax to the regular input tax account, so, for the time being, it posts it to aseparate account for deferred tax.

4. The supplier forwards the invoicing document to your company, and your company processes it as follows: ● For an invoice, your company makes the payment, and the accountant records this payment in the

system.The system transfers the tax amount from the deferred tax account to the regular input tax account.When the system prepares the tax return at the end of the current period, the deferred taxes now becomeavailable as tax credits for the current reporting period.

● For a credit memo, your company records this credit amount to be used against future payments.

6.1.6 Automatic Account Determination

OverviewThe G/L accounts for business transactions are determined automatically.

When you record a supplier invoice for a purchase order, you enter the purchase order as a reference. Anaccount determination group is stored in the master data of the material specified in the purchase order.The G/L account is then derived from the account determination group.

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PrerequisitesTo enable the correct G/L account to be selected automatically, account determination settings in businessconfiguration are required.For more information, see Define Account Determination for Each Subledger.

Account Determination ProcessThe way in which G/L accounts are determined for business transactions also defines the interaction between thedifferent assignments in business configuration and the master data. The system selects the G/L accounts basedon the master data, the account determination group, and the account determination profile. The accountdetermination process typically looks as follows:

1. Creation of the Business TransactionThe business transaction is entered manually or generated automatically. A business transaction alwayscontains information on the relevant company, the master data, and the amounts.

2. Determination of Account Determination GroupsThe account determination groups are derived from the master data in the business transaction.

3. Determination of Sets of Books, Charts of Accounts, and Account Determination Profiles ● The sets of books are determined based on the company. ● The charts of accounts are determined based on the sets of books. ● For the sets of books, the system determines which account determination profiles are used by the

company.4. Account Determination

Account determination groups and possibly other factors (such as the currency) are used to determine theG/L accounts stored in the account determination profile.

5. PostingFor each set of books, a journal entry is generated with line items containing the G/L accounts.

For more information, see Configuration of Account Determination for Business Transactions.There are additional determination rules or exceptions for each business transaction. For a free-text supplier invoice,for example, you enter the account determination group indirectly when you record the business transaction. Forwage postings on cost centers, the master data has no effect on account determination.For detailed information on setting up account determination for particular business transactions, see the SpecialAccount Determination document.

6.1.7 Document Flow into Accounting

OverviewAn important financials task is to record, value, and update business transaction data. This is accomplished by meansof journal entries.Journal EntriesEach business transaction that affects values generates a journal entry. Journal entries are always generatedautomatically, you cannot create them manually. Journal entries are generated on the basis of source documents,valuation runs, and journal entry vouchers:

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● Source DocumentsMost business transactions that affect accounting originate in the operational applications as documentssuch as supplier invoices and payments. Since journal entries are based on these documents, they are calledsource documents.

● Valuation RunsValuation runs (such as depreciation runs) generate journal entries as well. You create valuation runs in thedifferent accounting ledgers during period-end closing.

● Journal Entry VouchersFor purposes such as making adjusting entries, you can create journal entries directly in accounting by meansof journal entry vouchers. You create journal entry vouchers in the General Ledger work center, Journal EntryVouchers view.

Document Flow into Accounting

6.1.8 Journal Entries

OverviewEach business transaction that affects accounting generates a journal entry automatically.Journal entries can be based on source documents, journal entry vouchers, or valuation runs:

● Source documents record business transactions initiated in applications outside of accounting, such assupplier invoices, customer invoices, and payments.

● Journal entry vouchers are entered directly in accounting for purposes such as adjusting entries. ● Valuation runs generate journal entries for periodic tasks in accounting, such as depreciation runs, recurring

journal entry voucher runs, or foreign currency remeasurement runs.

Posting LogicThe basic principle of posting is debit equals credit. A journal entry is not posted unless the total of all debit entriesequals the total of all credit entries.To enable multi-GAAP reporting, you can create a set of books for each accounting principle and assign yourcompanies to the sets of books. When journal entries are generated, the sets of books come into play as follows:

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● When a source document is saved in an operational application, the accounting data is sent to accounting.With multi-GAAP reporting, a journal entry is generated in each set of books.

● You can specify a set of books when you create a journal entry voucher so that the journal entry is createdonly in that set of books. If you do not specify a set of books, the journal entry is created in all sets of booksused by the company.

● You can specify a set of books when you create a valuation run. In this case the journal entries are generatedonly in that set of books. If you do not specify a set of books, the journal entry is created in all sets of booksused by the company.

In all the above cases, derivations and valuations take place that you can partially influence in business configuration.The following diagram illustrates how journal entries are generated.

Creation of Journal Entries

Journal Entry StructureThe information in a journal entry includes:

● Journal Entry TypeThe journal entry type classifies the journal entry and controls the assignment of journal entry IDs.For more information, see Journal Entry Types and Number Ranges.

● Document DateThe document date is the transaction date of the source document, such as the invoice date. If no transactiondate is available, the entry date is used.

● Posting DateThe posting date is the date for which the accounts are updated and for which the business transaction isshown in the balance sheet and income statement. The fiscal year and the accounting period are derivedbased on the posting date.The posting date is determined in different ways depending on whether the journal entry is generated by anautomatic posting, a valuation run, or a journal entry voucher: ○ Posting Date with Automatic Postings

Depending on the business transaction, the accountant can enter a posting date in the originatingapplication, which specifies when the journal entry should be made in accounting. For some businesstransactions, the posting date is derived automatically from another date in the source document.

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If the accounting period for the posting date is closed, the source document cannot be posted in theoriginating application. The processor needs to change the posting date in the source document to beable to post the document with a valid posting date.

Each source document also contains a creation date, which is the date on which the sourcedocument was entered. It is not possible to overwrite the creation date manually. The creationdate is not used to derive the posting date.

○ Posting Date with Valuation RunsWhen you create a valuation run, you specify the fiscal year and period for the run. The posting date isthe last day of the specified period.When the opening balance is posted by a balance carryforward run, the posting date is the first day ofthe subsequent period.

○ Posting Date with Journal Entry VouchersThe posting date for the journal entry is the posting date that you specified in the journal entry voucher.

● Line ItemsLine items are the valued items of the source document and always contain debit and credit lines as well asthe accounts.

Some business transactions contain summarized line items that are not relevant for the generalledger. Such line items are not displayed in the journal entry.For more information, see Postings Not Relevant to General Ledger.

Automatic Creation of Journal EntriesJournal entries can only be generated if the required master data and organizational units exist.

● If you enter manual postings using journal entry vouchers, you will receive a notification if the master data ororganizational units do not exist.

● If master data or organizational units are missing when source documents and valuation runs are processed,tasks are sent to the inbox of the person responsible. The journal entry cannot be posted until the tasks arecompleted.

Set of BooksFor postings based on journal entry vouchers and valuation runs, you may have specified a set of books to restrictthe postings to that set of books.In the following cases, the system determines which sets of books are applied:

● If you are making postings with journal entry vouchers or valuation runs and have not specified a set of books ● When source documents are processed

All subsequent processing steps are performed for each set of books. A journal entry is therefore posted in each setof books, enabling multi-GAAP reporting.

Process FlowJournal entries are created and posted automatically as follows:

1. Determination of document typeThe business transaction of the source document or valuation run is used to determine the assigneddocument type, or the document type is read directly from the journal entry voucher.

2. Derivation of posting date

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The posting date is determined from the data of the source document. In the case of valuation runs or journalentry vouchers, you specify the posting date manually.

3. Determination and check of accounting periodThe accounting period is determined as follows: ● Determination of fiscal year variant

The fiscal year variant is derived from the set of books. ● Determination of accounting period

Which accounting period is assigned to the posting date is determined from the fiscal year variant. ● Check of accounting period

If the accounting period is closed for the specified closing step and set of books, the journal entry cannotbe posted.

4. Creation of line itemsa. Determination of subledger and subledger account assignment

Each line item can be posted to a subledger in addition to the general ledger. For source documents andvaluation runs, the subledger and the subledger account assignment are determined based on the typeof business transaction, the entries in the source document, the master data, and the configurationsettings.Journal entry vouchers use the subledger account assignments you entered manually.

b. Classification of line item in the subledgerEach line item is classified according to the role it plays in the subledger posting. In some cases, thisgenerates additional line items such as for posting differences or taxes.

c. Valuation and currency conversionIn cases where the business transaction does not yet contain any values, each line item is valued usingappropriate methods.

d. Derivation of profit center and segmentThe profit center and the segment of the line item are derived based on the subledger.For certain reporting principles, additional line items are created to distribute the value across profitcenters.

e. Derivation of G/L accountsThe G/L account for the line item is determined based on the settings in business configuration.

f. Derivation of functional areaThe functional area is determined based on the G/L account or the cost center.

g. Derivation of movement typeIn the case of source documents from fixed assets, the movement type is determined automatically. Inthe case of journal entry vouchers, you can enter the movement type manually.

5. Document number assignmentOnce the journal entry has been created successfully, it receives an ID number based on the settings for thejournal entry type.

6. PostingThe journal entry is saved and the account balances are updated.

Reversal of Journal EntriesYou cannot reverse journal entries directly. Instead, you reverse one of the following objects that generated thejournal entry:

● The source document ● The journal entry voucher

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● The valuation run

Reversing one of the above objects has the following effects: ● The object receives the status Reversed. ● A reversal journal entry is generated for each original journal entry in all affected sets of books. ● Each reversed journal entry receives the status Reversed and a reference to the reversal journal entry.

To be able to reverse journal entries, you need to have assigned number ranges to the journal entry types forreversals.For more information, see Journal Entry Types and Number Ranges.

Like journal entries, reversal journal entries are generated automatically. There are the following differences: ● The journal entry type of the reversal journal entry is the same as that of the journal entries being reversed. ● The default reversal posting date is the posting date of the journal entries being reversed. You can change

the reversal posting date manually. ● A reversal line item is generated for each line item of the journal entry being reversed. The reversed line items

receive a Reversed flag. ○ If you have specified in the settings for the set of books and company that negative postings are allowed,

the reversal line items are posted on the same side of the account as the line item being reversed, butwith negative amounts.

○ If you have specified in the settings for the set of books and company that negative postings are notallowed, the reversal line items are posted with the same amounts as the line item being reversed, buton the opposite side of the account.

● The header of the reversal journal entries contains references to the reversed journal entries and additionaldata on the reversal (such as the reversal date).

See AlsoJournal Entry VouchersSource Documents

6.2 Work View

6.2.1 Quick Guide for Work (in Supplier Invoicing)

The Work view of the Supplier Invoicing work center gives you an overview of all open business task management(BTM) tasks and all invoicing documents that have not been posted yet. The view always shows your current workloadsince the system automatically removes completed BTM tasks from the worklist and moves posted and voideddocuments to the Invoices and Credit Memos view.This document is valid for the enhanced Work view of the Supplier Invoicing work center.The enhanced views have the following features:

● The various buttons on the views are on the right side of the screen. ● Advanced search is represented by an icon on the left side of the screen.

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● You can view the columns that can be filtered by clicking the Show Filter icon.

To have the enhanced view, the Object Work List- Enhanced View business option must be enabled in your solutionconfiguration. To find this business option, go to the Business Configuration work center and choose theImplementation Projects view. Select your implementation project and click Edit Project Scope . In the Scoping stepof the project, ensure that System Management is selected within Built- in Services and Support.In the Questions step, expand the Built- in Services and Support scoping element and select User Interface ListMode. Select and answer the questions related to Object Work List- Enhanced View.The enhanced Work view has two sub views, Documents in Process and Tasks.In the Tasks view, you can display filtered lists for open BTM tasks that you still need to process. The following listsare available:Open TasksThe following BTM tasks exist for invoicing documents:

● Clarify Exceptions for Supplier InvoiceFor more information, see Clarify Exceptions for Supplier Invoice [page 189].

● Complete Supplier InvoiceFor more information, see Complete Supplier Invoice [page 190].

● Revise Supplier InvoiceFor more information, see Revise Supplier Invoice [page 191].

● Check Customs Invoices for Canceled Supplier InvoiceFor more information, see Check Customs Invoices for Canceled Supplier Invoice [page 192].

● Cancel Invoice if Required; Preceding Purchase Document CanceledFor more information, see Cancel Invoice if Required; Preceding Purchase Document Canceled[page 193].

● Cancel Invoice if Required; Preceding Purchase Document Changed or BlockedFor more information, see Cancel Invoice if Required; Preceding Purchase Document Changed or Blocked[page 194].

In the Documents to Be Processed view, you can display filtered lists for invoicing documents that you still need toprocess.

You have the option of posting or canceling several documents at once from the enhanced Documents to beProcessed view. Select the various documents and then click Actions and select Quick Post or QuickCancel.For all the selected invoices the status column is highlighted in orange and a background job is run which willpost or cancel the documents. The documents are not locked during this process, and can be edited, but incase you do so, the document that is opened will no longer be a part of the background job that is running andwill not be posted or canceled.

● Documents with ExceptionsWhen a user creates an invoicing document manually and clicks Check or Post , or when the systemreceives an invoicing document as a B2B message, the system verifies the data and, if necessary, createsexceptions for errors depending on the settings in business configuration. The system adds the invoicingdocuments with errors to this list and creates the Clarify Exceptions for Supplier Invoice task. To post aninvoice, you must first clarify all exceptions.For more information, see Clarify Exceptions for Supplier Invoice [page 189].

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MexicoMexican invoices and credit memos are always added to the Documents with Exceptions list after theXML file with the invoice information from your Mexican supplier has been uploaded to the SAPBusiness ByDesign system using the file input run of the Application and User Management work center.Mexican invoicing documents always have at least one invoice exception (Missing/Wrong InternalInformation) since the account assignment is not part of the provided XML file.For more information about Mexican invoicing documents, see Invoice Processing - Mexico.

● Documents in PreparationWhen a user saves an incomplete draft of an invoicing document, the system adds it to this list and createsthe Complete Supplier Invoice task.

In the enhanced view, this query must be configured via the advanced filter, it will include all documentswith the statuses In Process and In Revision

For more information, see Complete Supplier Invoice [page 190]. ● Documents Ready for Posting

When a user who is not allowed to post invoicing documents, clicks Post , or when a user saves an invoicingdocument that is complete and does not contain any errors, the system adds the document to this list andcreates the Complete Supplier Invoice task.For more information, see Complete Supplier Invoice [page 190].

● Documents in ApprovalDepending on the settings in business configuration, the system sends an invoicing document for approvalprior to payment, adds it to this list and creates the Approve Supplier Invoice task, which the manager oralternative approver receives in the Approvals view of the Managing My Area work center. The system postsapproved documents and voids rejected documents automatically.

In the enhanced view, this query must be configured via the advanced filter.

For more information, see Approve Supplier Invoice. ● Scanned Documents in Process

When a scanned invoice or credit memo is automatically created using SAP Collaboration Window, thedocument has either the status Ready for Posting, In Process, or Exception (when the system could not retrieveall information from the scanned document). For ease of use, the system adds the document to this list andcreates the Complete Supplier Invoice or Clarify Exceptions for Supplier Invoice task.The system also adds the document to the Documents Ready for Posting or the Documents with Exceptionslist.For more information, see Uploading Scanned Supplier Invoices Using Automatic Upload Service.

● Posted Documents with Missing DeliveryThis list displays documents with items whose invoiced quantity exceeds the delivered quantity. Possiblereasons are that deliveries are missing, the delivered quantity has been reduced, or the delivery has beencanceled after the document has been posted. As a consequence, the system creates either the QuantityVariance or the Missing Receipt or Return Document exception for these documents. Accountants can clarifythe exceptions by posting the missing delivery, by canceling the document, or by requesting a credit memofrom the supplier. If you do not want to follow-up the exceptions any longer, you can remove the documentsfrom this list by clicking Remove Invoice from Posted Invoices with Missing Delivery List on the exception screen.

● All Documents in ProcessThis list displays all documents that have not been posted yet.

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Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

Business Background

Business Task ManagementBusiness Task Management (BTM) ensures that activities related to a business process within or across yourorganization are completed in order to fulfill defined business objectives. Using BTM, the system addresses work tousers and enables them to receive, manage, and complete business task management items related to a businessprocess in an efficient way. The system creates business task management items when it requires input from a userabout a related business document. These items are created so that users check, change, clarify information,complete items, or make a decision as part of a business process.For more information, see Business Task Management.

Exception HandlingThe Supplier Invoicing work center enables invoice verification that includes the handling of invoice exceptions. Onceyou post an invoice, credit memo, customs invoice, subsequent debit, or subsequent credit, the system verifies thedocument by checking for any missing or incorrect data, and crosschecks the data against any preceding purchasedocuments.Invoice exception handling classifies and records exceptions that occur during invoice verification as a result of oneor more error messages. Depending on the type of exception, the clarification process is specified and the actionsnecessary to resolve the exception are determined. The clarification process is always recorded in a processing log.Once all exceptions are resolved, the supplier invoice can be submitted to financials for posting.For more information, see Exception Handling [page 187].

Supplier Invoice TypesIn the Supplier Invoicing work center, you can use several main document types to record purchasing transactionsbetween your company and its suppliers. Supplier Invoicing can be based on underlying documentation such aspurchase orders and purchasing contracts, or as standalone transactions.For more information, see Supplier Invoice Types [page 147].

Supplier Invoice VerificationDepending on your business requirements, different types of supplier invoices, such as invoices or credit memos,can be processed. In most cases, supplier invoices are preceded by purchasing processes, and followed by processessuch as payables, payment management, and general ledger. This process describes how you enter supplier invoicesinto the system manually with reference to preceding documents, such as purchase orders, goods and servicesreceipts, inbound deliveries, or purchasing contracts.

If your company does not enter purchase orders, goods and services receipts, or other preceding purchasedocuments into the system, this process is not relevant for your requirements.

For more information, see Supplier Invoice Verification [page 150].

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Business Scenario: Procure-to-Pay (Stock)The Procure-to-Pay (Stock) scenario enables you to purchase stock products based on a requirement that can begenerated from a planning system, such as a Materials Requirements Planning (MRP) system.It covers all stages of the procurement process, from demand planning and creation of a purchase order, throughautomatic or manual assignment of sources of supply, sending the purchase order to a supplier, to goods andservices receipt, invoice verification, and payment.For more information, see Procure-to-Pay (Stock).

Business Scenario: Procure-to-Pay (Non-Stock)The Procure-to-Pay (Non-Stock) business scenario allows you to purchase non-stock materials, such as officematerial, engineering sample material, or fixed assets.This scenario can be triggered by employees or assistants who create shopping carts, by project teams who neednon-stock materials for projects, by buyers directly in purchase orders or requests for quotation (RFQ), or byaccounts payable accountants in supplier invoices. Deliveries can be confirmed centrally or decentrally. Costs forproject-related non-stock materials are directly transferred to project tasks in financial accounting.If a catalog, purchasing contract, or list price for a non-stock material exists, a purchase order can be createdautomatically. If no source of supply exists, you can send RFQs to determine appropriate suppliers.With this scenario you can also order non-stock materials to cover customer demands by using sales orders orservice orders to trigger third-party procurement.For more information, see Procure-to-Pay (Non-Stock).

Business Scenario: Procure-to-Pay (Services)The Procure-to-Pay (Services) business scenario allows you to procure services, such as consulting and trainingservices, temporary labor, or engineering services. It can be triggered by employees who create shopping carts forservices, by project managers who need a certain service for their project, or directly by the buyer using a purchaseorder.Project-related services are usually recorded in a time sheet and the costs are directly transferred to the projecttasks in financial accounting. If a purchasing contract or a list price for the ordered service exists, the purchase ordercan be created automatically. If no source of supply exists, a request for quotation can be sent out to determine anappropriate supplier.Alternatively with this scenario, it is possible to order external resources to provide services for customer demandsthat cannot be fulfilled by internal employees. In this case, the procurement process is triggered when a sales orderor a service order has been created.For more information, see Procure-to-Pay (Services).

Tasks

Clarify Exceptions for a Supplier InvoiceFor more information about this task, see here [page 189].

Complete a Supplier InvoiceFor more information about this task, see here [page 190].

Revise a Supplier InvoiceFor more information about this task, see here [page 191].

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Check Customs Invoices for a Canceled Supplier InvoiceFor more information about this task, see here [page 192].

Cancel an Invoice if Required; Preceding Purchase Document CanceledFor more information about this task, see here [page 193].

Cancel an Invoice if Required; Preceding Purchase Document Changed orBlockedFor more information about this task, see here [page 194].

Create a Task, Notification, or AlertFor more information about this task, see here [page 195].

Create a Clarification RequestFor information about this task, see here [page 197].

Export Tasks and Documents to Microsoft ExcelFor information about this task, see here [page 198].

6.2.2 Business Background

6.2.2.1 Exception Handling

OverviewThe Supplier Invoicing work center enables invoice verification that includes the handling of invoice exceptions. Onceyou post an invoice, credit memo, customs invoice, subsequent debit, or subsequent credit, the system verifies thedocument by checking for any missing or incorrect data, and crosschecks the data against any preceding purchasedocuments.Invoice exception handling classifies and records exceptions that occur during invoice verification as a result of oneor more error messages. Depending on the type of exception, the clarification process is specified and the actionsnecessary to resolve the exception are determined. The clarification process is always recorded in a processing log.Once all exceptions are resolved, the supplier invoice can be submitted to financials for posting.Exception handling is relevant for the following supplier invoice types:

● Invoices ● Customs invoices ● Credit memos ● Down payment requests

Prerequisites ● During business configuration, under the Supplier Invoicing business package, Invoice Exception

Processing has been selected.

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● In the Supplier Invoice Exceptions fine-tuning activity, the predefined configuration settings have beenchecked and, if required, adjusted according to your business needs.

● If you use interactive forms with your suppliers, the technical requirements have been set up and your supplierhas installed Adobe Reader or Adobe Acrobat.

Exception TypesIf a supplier invoice has errors, the system creates one or more exceptions. Depending on the settings in SupplierInvoice Exceptions, errors are assigned to different types of exceptions. Once all exceptions related to a supplierinvoice are resolved, the corresponding supplier invoice can be posted. All actions that have taken place in relationto an exception are recorded in an action log.The following types of exceptions can occur:

● Missing/Wrong External InformationA supplier invoice contains incomplete or incorrect information from the supplier, such as a missing supplierinvoice number.

● Missing/Wrong Internal InformationA supplier invoice contains incomplete or incorrect internal information, such as a missing accountassignment.

● Missing Receipt or Return DocumentA supplier invoice contains items for which there is no receipt or return document.

● Missing Order ReferenceA supplier invoice contains invoice items that do not have a reference to a purchase order. Using the buyingcompany, the supplier, and product information, such as the product type, ID, category, and description, thesystem searches for orders that can be used as a reference. If appropriate, the accountant can select one ofthe proposed purchase orders as a reference, which then facilitates processing in Financial Management.

● Missing Invoice or Credit MemoAn invoice or credit memo contains credit memo items whose quantity exceeds the invoiced quantity, orsubsequent credit or debit items whose quantity exceeds the invoiced or credited quantity.

● Possible DuplicateA supplier invoice is identified as a possible duplicate.

The criteria for checking possible duplicates can be defined in fine-tuning. If no settings are defined,the following criteria are used by default: Supplier Invoice Number (similar), Invoicing Date (up to 7 daysdifference), Supplier ID (identical), and Gross Amount (identical).

● Price/Quantity/Tax VarianceA supplier invoice contains a price, quantity, or tax variance that exceeds the exception’s tolerance limit ordoes not match the price, quantity, or tax amount in the preceding purchase document to which it refers.

● Error during Simulation of Journal EntryA supplier invoice without errors is used to simulate a journal entry in financial accounting. If the simulationresults in errors, this exception is raised.If the supplier invoice is posted, the system creates tasks in financial accounting. If the supplier invoice is notposted, it will have to be posted manually after the errors have been corrected in financial accounting.

● OthersA supplier invoice contains errors that cannot be assigned to any other exception type.

● MultipleA supplier invoice contains more than one of the above exception types.

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Resolving ExceptionsAll documents with exceptions are displayed in the Overview view or the Work view of the Supplier Invoicing workcenter.Invoice exceptions are resolved in the Work view of the Supplier Invoicing work center. In the Work view, you canaccess a pre-filtered list of tasks related to the documents that cannot be posted. The Work view acts as a centrallocation where any issues can be resolved with the supplier invoices your company has received. You can resolveexceptions in the Exceptions view of the Supplier Invoice or Credit Memo editor. Exceptions need to be resolved oraccepted before the supplier invoice can be posted.

Forwarding ExceptionsSometimes an exception must be forwarded for further clarification to another user, such as a manager, in order forthe exception to be resolved.There are different ways of clarifying exceptions:

● Users assigned to an invoicing group, such as accountants, handle exceptions. ● Users assigned to an invoicing group, such as accountants, manually forward exceptions to internal or

external parties. ● Exceptions are automatically forwarded to internal or external parties.

If exceptions are forwarded to internal users such as accountants, the system creates a task in the work list of theuser.If exceptions are forwarded to external suppliers or invoicing parties, an e-mail with an attached interactive or read-only form that shows both the supplier invoice and the exceptions is sent. If the interactive form is sent, the e-mailrecipient corrects the supplier invoice data that caused the exception and sends the form back as an e-mailattachment. It is also possible to add notes or attachments to the exception to further explain the reason for acceptingor rejecting an exception. If the read-only form is sent, the e-mail recipient prints the form, corrects the supplierinvoice data that caused the exception, and sends the form back by mail or fax. If the received data is correct, theexception is resolved.

See AlsoQuick Guide for Work (in Supplier Invoicing) [page 182]

6.2.3 Tasks

6.2.3.1 Task - Clarify Exceptions for Supplier Invoice

OverviewThe task is raised because the supplier invoice has one or more exceptions. Exceptions have to be clarified before asupplier invoice can be posted.This type of task always has medium priority. The due date is set to one day after creation.

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RelevanceThe task is relevant to all employees to whom the Work view of the Supplier Invoicing work center is assigned andwho have authorization for this invoice.The accountant receives this task in the Work view of the Supplier Invoicing work center.For more information, see Quick Guide for Work (in Supplier Invoicing) [page 182].

ResponseTo respond to this task, open the task, choose the Exceptions tab and check the exceptions.Depending on the exception and your business process, you have the following options:

● Correct the exception directly, for example, if internal data is missing. ● Accept the exception if possible. For example, you can accept exceptions for missing goods and services

receipts or returns, price variances, quantity variances, or tax variances. ● Forward the exception to the person responsible to ask for additional information to solve the exception.

Once all exceptions have been clarified, the system completes the task and removes it from the worklist.For more information, see Exception Handling [page 187].

ConfigurationThe attributes of this task are fully predefined and cannot be configured.It is possible to configure certain elements of invoice exceptions using the Supplier Invoice Exceptions fine-tuningactivity. For more information, see Supplier Invoice Exceptions.

See AlsoBusiness Task Management

6.2.3.2 Task - Complete Supplier Invoice

OverviewWhen an accountant saves a draft supplier invoice or an employee posts an invoice but is not allowed to post invoicingdocuments, the system assigns the status In Process and creates a task to complete the supplier invoice.For more information, see Additional Accountant Work Category.This type of task always has medium priority. The due date is one day after creation.

RelevanceThe task is relevant to all employees to whom the Work view of the Supplier Invoicing work center is assigned andwho have authorization for this invoice.

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The accountant receives this task in the Work view of the Supplier Invoicing work center.For more information, see Quick Guide for Work (in Supplier Invoicing) [page 182].

ResponseTo respond to this task, choose one of the following courses of action:

● Open and complete the supplier invoice. When you post the supplier invoice, the system closes the task andremoves it from your worklist. To complete the task: ○ Open the supplier invoice editor from the worklist. ○ Add missing data or make changes where necessary. ○ To check the consistency of the supplier invoice, click Check . ○ To release the completed supplier invoice for payment, click Post .

If an approval process is in place, the system sends the supplier invoice for approval. ● Void the supplier invoice.

If you void the supplier invoice, the system cancels the task and removes it from your worklist.

ConfigurationIt is possible to configure certain elements of this task using the Business Task Management for Supplier Invoicingfine-tuning activity.

See AlsoBusiness Task Management

6.2.3.3 Task – Revise Supplier Invoice

OverviewThe task is raised because an approver returns a supplier invoice for revision to the employee responsible.This type of task always has medium priority. The due date is always one day after creation.

RelevanceThe task is relevant to all employees to whom the Work view of the Supplier Invoicing work center is assigned andwho have authorization for this invoice.The accountant receives this task in the Work view of the Supplier Invoicing work center.For more information, see Quick Guide for Work (in Supplier Invoicing) [page 182].

ResponseTo respond to this task, open the task and choose one of the following courses of action:

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● Check the comments of the approver or contact the approver directly. ● If necessary, change the supplier invoice and post it again. ● Block the supplier invoice. ● Void the supplier invoice to end the supplier invoicing process.

The task is completed and removed from the worklist when the supplier invoice is posted again or voided.

ConfigurationThe attributes of this task type are fully predefined and cannot be configured.

See AlsoBusiness Task Management

6.2.3.4 Task - Check Customs Invoices for Canceled Supplier Invoice

OverviewThe system raises this task because a supplier invoice has been canceled and at least one customs invoice is assignedto the referenced purchase order.This type of task always has medium priority. The due date is set to one week after task creation.

RelevanceThe task is relevant to all employees to whom the Work view of the Supplier Invoicing work center is assigned andwho have authorization for this invoice.The accountant receives this task in the Work view of the Supplier Invoicing work center.For more information, see Quick Guide for Work (in Supplier Invoicing) [page 182].

ResponseTo respond to this task, open the task and proceed as follows:

1. Open the referenced purchase order.2. Check the document flow of the purchase order item to access the customs invoice.3. Decide whether it is necessary to cancel the customs invoice.4. To remove the task from the worklist, complete it manually.

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ConfigurationThe attributes of this task type are fully predefined and cannot be configured.

See AlsoBusiness Task Management

6.2.3.5 Task - Cancel Invoice if Required; Preceding PurchaseDocument Canceled

OverviewThe system raises this task for a posted supplier invoice or credit memo because one or more items in a precedingdocument, such as a purchase order or goods receipt, has been canceled.

Reversing a goods receipt has consequences in accounting. For more information, see Effects inAccounting on Reversing a Goods Receipt.

This type of task always has medium priority. The due date is one day after creation.

RelevanceThe task is relevant to all employees to whom the Work view of the Supplier Invoicing work center is assigned andwho have authorization for this invoice.The accountant receives this task in the Work view of the Supplier Invoicing work center.For more information, see Quick Guide for Work (in Supplier Invoicing) [page 182].

ResponseTo respond to this task, check the preceding document and cancel the assigned invoice or credit memo. For moreinformation, see Cancel an Invoicing Document [page 242].Once you have canceled invoice or credit memo, or completed the task manually, the task is completed and thesystem removes it from the worklist.For more information on completing tasks automatically or manually, see Working with Tasks, Notifications, andAlerts [page 195].

ConfigurationThe attributes of this task type are fully predefined and cannot be configured.

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See AlsoBusiness Task Management

6.2.3.6 Task - Cancel Invoice if Required; Preceding PurchaseDocument Changed or Blocked

OverviewThe system raises this task for a posted supplier invoice or credit memo because one or more items in a precedingdocument, such as an inbound delivery, have been changed or blocked.This type of task always has medium priority. The due date is one day after creation.

RelevanceThe task is relevant to all employees to whom the Work view of the Supplier Invoicing work center is assigned andwho have authorization for this invoice.The accountant receives this task in the Work view of the Supplier Invoicing work center.For more information, see Quick Guide for Work (in Supplier Invoicing) [page 182].

ResponseTo respond to this task, check the preceding document and choose one of the following courses of action:

● Cancel the assigned invoice or credit memo. ● Create a credit memo for the invoice, or create an invoice for the credit memo.

If you cancel the invoice or credit memo, or complete the task manually, the task is completed and the systemremoves it from the worklist.

ConfigurationThe attributes of this task type are fully predefined and cannot be configured.

See AlsoBusiness Task ManagementQuick Guide for Invoices and Credit Memos (in Supplier Invoicing) [page 239]

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6.2.3.7 Working with Tasks, Notifications, and Alerts

OverviewTasks, notifications, and alerts enable you to inform another user about a business document that may requirechecking, changes, or that may need to be completed. You can create tasks, notifications, alerts with reference tobusiness task management items and business documents.

Tasks Created by the SystemWhen the system creates a task, it displays as New in the relevant user’s worklist.You see business task management items that are associated with the work center views and access rights to whichyou are assigned. You can execute the task by opening the task, clicking the link, or can access the related documentby clicking Edit . You are then assigned as the processor of the task.If a task is assigned to multiple persons responsible, it stays in the worklists of all persons responsible until it hasbeen completed. The multiple persons responsible can see who has taken over the task for processing.

Statuses of Business Task Managment (BTM) ItemsTasks can have the following statuses: New, In Progress, Completed, and Canceled.Notifications can have the following statuses: New, In Progress, Acknowledged, Completed, and Canceled.Alerts can have the following statuses: New, In Progress, Completed, and Canceled.

Manually Creating Tasks, Notifications, and Alerts1. Select the relevant business task management item or business document, click New and choose the

corresponding option: Task, Notification, or Alert.2. Fill in the mandatory fields.

● In the To field, enter the employee ID or search for the employee using the value help.Note that you can only enter or select employees who have access rights to the related businessdocument for which you create the task, notification, or alert.

● For tasks, enter a date by when you expect a response in the Due Date field.For notifications, enter a date by when the notification is to expire in the Expiry Date field.For alerts, you cannot enter a due date since alerts require immediate action.

● In the Subject field, enter the subject for the task, notification, or alert. The subject is displayed in therecipient's work inbox.

● In the Priority, field set the priority to Low, Medium, High or Very High.For alerts, the priority is set by default to highest available priority, for example, Very High. The defaultcannot be changed.

You can enter the request details on the Notes tab page and add relevant attachments on theAttachments tab page.

3. Send or cancel the task, notification, or alert. ● To send the task, notification, or alert, click Save and Close . ● To close the screen without saving your changes, click Close .

You can track your tasks, notifications, and alerts from the Work work center view of the Home work center. In theDelegated Tasks work center view, from the Show dropdown list, choose Created by Me.

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Receiving Tasks, Notifications, and AlertsYou receive manually created tasks, notifications, and alerts in the Work work center view of the Home work center.In the Inbox work center subview, from the Show dropdown list, choose Open Items. You can also choose OpenTasks, Open Notifications, or Open Alerts accordingly.

Processing Tasks, Notifications, and AlertsTo view the related business document and to make any relevant changes after you have read the detailedinstructions in the Description field, click the subject link of the business task management item, or click Edit .Once you start processing a task, notification, or alert, the status of the task, notification, or alert is set to InProgress.

Tracking Manually Created Tasks, Notifications, and AlertsYou can track the progress of business task management items that you have created from the Work work centerview of the Home work center. In the Delegated Tasks work center view, from the Show dropdown list, choose Createdby Me.You can also view all completed tasks from the Work work center view of the Home work center. From the Showdropdown list, choose Closed Items.

Generic Task DetailsTo view the details of the task, choose the Open Details option from the context menu or from Actions .The details of the task include information, such as the person responsible, process, status, and so on.The Related Document link launches the screen of the related business document.The Notes tab page shows the details of the item, and comments entered by the employee who from whom the itemis sent and any previous processors. The Attachments tab page shows any attached documents.You can also add notes and attachments.Depending on the task, the following actions are available.

● Change Priority ● Forward

Assigns the item to another person for processingNote that you can only forward tasks to employees who have access rights to the related business documentof the task, notification, or alert.

● Complete ● Acknowledge

Notifications are acknowledged rather than completed. ● Cancel

If you require further information before you can process the item, you can create a clarification request by clickingNew , and then choosing Clarification Request.

See AlsoBusiness Task ManagementWorking with Clarification Requests [page 197]

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6.2.3.8 Working with Clarification Requests

OverviewClarification requests enable you to request information about business task management items or businessdocuments from another user. You can create clarification requests with reference to business task managementitems and business documents.Note that creating a clarification request does not affect the flow of the business process. For example, if you createa clarification request about a purchase order, the clarification request does not prevent the purchase order frombeing processed.Recipients can open clarification requests regardless of whether they have access to the related business documentor task.When you create a clarification request, it displays as New in the relevant user’s worklist. When the recipientprocesses the clarification request, the status of clarification request changes to In Clarification.Clarification requests can have the following statuses: New, In Clarification, Clarified, and Completed.

Creating Clarification Requests1. Select the relevant business task management item or business document, click New and choose

Clarification Request.2. Fill in the mandatory fields.

● In the To field, enter the employee ID or search for the employee using the value help. ● In the Due Date field, enter a date by when you expect a response. The default is three days from the

current date. ● In the Subject field, enter the subject for the clarification request. The subject is displayed in the

recipient's work inbox. By default, the Subject field is either filled with the name of the business taskmanagement item for which you require clarification, or is blank if the clarification request is for abusiness document. However, you can change the default.

● In the Priority, field set the priority to Low, Medium, High or Very High. By default, the priority is set toMedium.

You can enter the request details on the Notes tab page and add relevant attachments on theAttachments tab page.

3. Send or cancel the clarification request. ● To send the clarification request, click Save and Close . ● To close the screen without saving your changes, click Close .

You can track your clarification requests from the Work work center view of the Home work center. In the DelegatedTasks work center subview, from the Show dropdown list, choose Created by Me.

Responding to Clarification RequestsYou receive clarification requests in the Work work center view of the Home work center. In the Inbox work centersubview, from the Show dropdown list, choose either Open Items or Open Clarifications.Once you start processing a clarification request, the status of the clarification is set to In Clarification.

1. To begin processing the clarification request, open the details of the clarification or click Edit .

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The Related Document link launches the screen of the related business document. The Related Task link,which is only displayed if the requestor is referring to a specific task, launches the details of this task.The Notes tab page shows the details of the request, and comments entered by the employee who from whomthe clarification request is sent and any previous processors. The Attachments tab page shows any attacheddocuments.

2. Answer, forward, or close the clarification request. ● To answer the clarification request, click Reply .

On the Notes tab page under Internal Comment, you can enter any relevant information or comments.You can also add attachments on the Attachments tab page.

● To assign the request to another person for processing, click Forward .In the To field, enter the employee ID or search for the employee using the value help.You can track your clarification requests from the Work work center view of the Home work center. Inthe Delegated Tasks work center subview, from the Show dropdown list, choose Forwarded by Me.

● To close the screen without saving your changes, click Close .

Receiving Responses to Clarification RequestsThe clarification request has the status Clarified.

1. To view the reply to your clarification request, open the details of the clarification or click Edit . ● If you have further questions, you can use Reply to reply to the employee who provided the response. ● To forward the clarification request to another user, under Actions , choose Forward.

You can track your clarification requests from the Work work center view of the Home work center. In theDelegated Tasks work center subview, from the Show dropdown list, choose Forwarded by Me.

2. Complete or close the clarification request. ● Under Actions , choose Complete. The system then closes the clarification request.

You can track closed clarification requests from the Work work center view of the Home work center.From the Show dropdown list, choose Closed Items.

● To close the screen without saving your changes, click Close .

See AlsoBusiness Task ManagementWorking with Tasks, Notifications, and Alerts [page 195]

6.2.3.9 Export Business Data Using Microsoft Excel®

OverviewYou can export reports and worklists to Microsoft Excel® documents. You can use these documents for furtheranalysis, and in some cases, edit and upload them to the solution.You can export data from a report or from a worklist.

Prerequisites ● You have installed the latest Add-In for Microsoft Excel®. Depending on your solution set-up, you can do this

from the:

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○ Self Services Overview in the Home work center ○ Download Center in the Application and User Management work center ○ Download link that is available directly on the user interface

● The settings for your browser must be set correctly. You can review the information about computer settingsby clicking Check My Computer Settings on the logon screen.

● You must be authorized to perform an export to Microsoft Excel®.

Procedure1. Go to the screen with the data you want to export.2. Depending on the type of data, choose one of these options:

● For a report, you can either export a chart or a table. To do so, select the report, and click Switch toChart or Switch to Table.

● For a worklist, select the worklist and click Go.3. Click Export , then choose To Microsoft Excel.4. Optional: Personalizing your excel export

1. To select the columns in your exported excel, do the following:a. In the title bar, click Personalize This screen b. In the side panel, select Display Settings.c. In the Display Settings dialog box, you can export all the columns in the view by selecting All in

the Export Columns field

The default value for this field is Visible, which exports only the currently displayed columns.

2. To select the language for your excel export, do the followinga. In the Display Settings dialog box, set the Language Selection field to Show and click OK

b. Click Save .c. Click Export , then choose To Microsoft Excel®d. Select a language in the dialog box that opens.

The column selection preference in this dialog box allows you to override the personalizedsetting. This selection is valid for the current export only.

5. Select the template in the dialog box that is displayed.

● If there is only one template that has the logged in language variant, then the export will beperformed in the logged in language, and no user interaction is required.

● If there is only one template in the system for this export scenario, but the logged in languagevariant is not available, then export will be performed in the English language.

● If there is more than one template in the system for this export scenario, the Template List dialogbox is displayed. In this dialog, you can select the Microsoft Excel template that you want to usefor the export. The template will dictate how your exported data will be formatted. The MicrosoftExcel version that is relevant for each template is displayed.

6. Click Download.

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7. A message shows that you can open or save the file which contains the data that you have just exported fromthe solution. Click Open or Save depending on what you want to do with the exported data.Depending on whether you click Open or Save, there are two possible results:

● If you click Open, a worksheet opens with the data in Microsoft Excel. The file has a temporary name,but it is not saved. You can use all the functions of Microsoft Excel to organize the data and to savethat worksheet.

● If you click Save, a Save As dialog box opens. You can specify an appropriate file name and a locationto save the exported Microsoft Excel file to. A message will inform you when the download hascompleted successfully.You can later navigate to the location where you have saved the template and open it .

6.3 Invoice Entry View

6.3.1 Quick Guide for Invoice Entry

In the Invoice Entry view of the Supplier Invoicing work center, you can create invoicing documents such as invoiceswith or without reference, customs invoices, credit memos, and down payment requests that you received from yoursupplier by fax or by mail. You can either create these documents manually, scan them, or upload them automaticallyinto the system. Once you have created an invoicing document, you can save it as a draft for further processing orrelease it for payment by posting it to Financial Management.This document is valid for the enhanced Invoice Entry view of the Supplier Invoicing work center.The enhanced views have the following features:

● The various buttons on the views are on the right side of the screen. ● Advanced search is represented by an icon on the left side of the screen. ● You can view the columns that can be filtered by clicking the Show Filter icon.

To have the enhanced view, the Object Work List- Enhanced View business option must be enabled in your solutionconfiguration. To find this business option, go to the Business Configuration work center and choose theImplementation Projects view. Select your implementation project and click Edit Project Scope . In the Scoping stepof the project, ensure that System Management is selected within Built- in Services and Support.In the Questions step, expand the Built- in Services and Support scoping element and select User Interface ListMode. Select and answer the questions related to Object Work List- Enhanced View.To create invoices and credit memos with reference to preceding documents, the system displays the following listsin the Invoice Entry view:

All Orders to Be InvoicedDisplays all purchase orders, for which an invoice or missing delivery is expected and which have the status NotInvoiced, Partially Invoiced, Invoiced and Partially Delivered, or Invoiced and Not Delivered. Purchase orders canhave the following process types: non-stock, to-stock, or third-party.For more information, see Process Types of Purchase Order Items [page 87].

Orders with Excess Invoice QuantityDisplays all invoiced purchase orders that contain an invoice quantity that is higher than the delivery or order quantity,and for which no further deliveries, goods returns, or invoices are expected. Instead it is possible that a credit memois expected. Purchase orders can have the following process types: non-stock, to-stock, or third-party.

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For more information, see Process Types of Purchase Order Items [page 87].

In the Purchase Orders view of the Purchase Requests and Orders work center, a buyer can define that nofurther deliveries or invoices are expected for a purchase order item.

All OrdersDisplays all purchase orders independent of their status. Purchase orders can have the following process types: non-stock, to-stock, or third-party.For more information, see Process Types of Purchase Order Items [page 87].

All Deliveries to Be InvoicedDisplays all goods and services receipts, inbound deliveries, and third-party deliveries, for which an invoice isexpected and which have the status Not Invoiced or Partially Invoiced.

All Goods Returns to Be InvoicedDisplays all goods returns and outbound deliveries, for which a credit memo is expected and which have the statusNot Invoiced or Partially Invoiced.

Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

Business Background

Third-Party Order ProcessingYou, as supply planner, sales representative, or buyer working as the third-party order processing coordinator ofyour company, can use third-party order processing to coordinate and monitor the direct shipment of a product toyour customer by a supplier rather than your own company. This can be an external supplier or a partner companyin an intercompany scenario.For more information, see Third-Party Order Processing [page 36].

Exception HandlingThe Supplier Invoicing work center enables invoice verification that includes the handling of invoice exceptions. Onceyou post an invoice, credit memo, customs invoice, subsequent debit, or subsequent credit, the system verifies thedocument by checking for any missing or incorrect data, and crosschecks the data against any preceding purchasedocuments.Invoice exception handling classifies and records exceptions that occur during invoice verification as a result of oneor more error messages. Depending on the type of exception, the clarification process is specified and the actionsnecessary to resolve the exception are determined. The clarification process is always recorded in a processing log.Once all exceptions are resolved, the supplier invoice can be submitted to financials for posting.For more information, see Exception Handling [page 187].

Tax DeterminationAs a rule, companies are legally required to calculate taxes on products that they buy or sell, and to levy these taxesfrom their customers. After the products have been provided, the taxes must be declared and levied to the respective

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tax authorities. The system supports you by providing a substantially automated tax calculation for the following taxtypes: Value-Added Tax (VAT), Sales and Use Tax, Withholding Tax. The system also provides a reporting tool thatgives you effective control over your obligatory declaration of these taxes.You can activate tax trace for supplier invoice documents, which will display trace of the tax decision tree which isused for tax calculation for items within the document. You can activate the tax trace by clicking Activate TaxTrace under Actions . You can view the tax trace details at item level in the Taxes tab under Tax Trace Detailsafter saving the document.For more information, see Tax Determination [page 152].

Withholding Tax DeterminationA company or other organization type makes payments to multiple entities during a fiscal period. These paymentscan be categorized into two basic types based on where the payments start within the organization:

● Payroll paymentsPayments within an organization, for instance, to employees

● Accounts payable paymentsPayments to individuals and organizations outside of the company such as to suppliers, stockholders, anddebt holders

Withholding occurs in both categories, but this document addresses only the withholding that takes place with theaccounts payable payments. A major purpose of withholding tax on accounts payable payments is to ensure thatincome tax is paid to the tax authority on these payments which represent income.For more information, see Withholding Tax Determination [page 172].

Tax Deferral Process for Supplier InvoicingWhen you receive a supplier invoice for services, part of the tax amount can be used as a tax credit for your taxliabilities. If you apply a tax deferral scheme, you cannot deduct this tax credit from your tax liabilities until you paythe invoice. This deferred tax process applies in some countries such as France and India.If your company pays only for a part of the invoice amount, the deferred tax payable is in proportion to the invoiceamount paid. For example, if your company pays a third of the gross invoice amount to the supplier, your companyis entitled to claim a third of the tax amount of this invoice as a tax credit.

In India, you cannot claim the tax credit for a deferred tax item in your invoice until you pay the invoice in full.

For more information, see Tax Deferral Process for Supplier Invoicing [page 175].

Journal EntriesEach business transaction that affects accounting generates a journal entry automatically.Journal entries can be based on source documents, journal entry vouchers, or valuation runs:

● Source DocumentsSource documents record business transactions initiated in application areas outside Financial andManagement Accounting, such as supplier invoices, customer invoices, and payments.To display source documents, open the Source Documents view in the General Ledger work center.

● Journal Entry VouchersJournal entry vouchers record business transactions entered directly in Financial and ManagementAccounting, such as adjusting entries.To display journal entry vouchers, open the Journal Entry Vouchers view in the General Ledger work center.

● Valuation Runs

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Valuation runs generate journal entries for periodic tasks in Financial and Management Accounting, such asthe depreciation run, the recurring journal entry voucher run, or the foreign currency remeasurement run.To display the journal entries from a valuation run, open the associated view for the valuation run.

For more information, see Journal Entries [page 178].

Business Scenario: Procure-to-Pay (Stock)The Procure-to-Pay (Stock) scenario enables you to purchase stock products based on a requirement that can begenerated from a planning system, such as a Materials Requirements Planning (MRP) system.It covers all stages of the procurement process, from demand planning and creation of a purchase order, throughautomatic or manual assignment of sources of supply, sending the purchase order to a supplier, to goods andservices receipt, invoice verification, and payment.For more information, see Procure-to-Pay (Stock).

Business Scenario: Procure-to-Pay (Non-Stock)The Procure-to-Pay (Non-Stock) business scenario allows you to purchase non-stock materials, such as officematerial, engineering sample material, or fixed assets.This scenario can be triggered by employees or assistants who create shopping carts, by project teams who neednon-stock materials for projects, by buyers directly in purchase orders or requests for quotation (RFQ), or byaccounts payable accountants in supplier invoices. Deliveries can be confirmed centrally or decentrally. Costs forproject-related non-stock materials are directly transferred to project tasks in financial accounting.If a catalog, purchasing contract, or list price for a non-stock material exists, a purchase order can be createdautomatically. If no source of supply exists, you can send RFQs to determine appropriate suppliers.With this scenario you can also order non-stock materials to cover customer demands by using sales orders orservice orders to trigger third-party procurement.For more information, see Procure-to-Pay (Non-Stock).

Business Scenario: Procure-to-Pay (Services)The Procure-to-Pay (Services) business scenario allows you to procure services, such as consulting and trainingservices, temporary labor, or engineering services. It can be triggered by employees who create shopping carts forservices, by project managers who need a certain service for their project, or directly by the buyer using a purchaseorder.Project-related services are usually recorded in a time sheet and the costs are directly transferred to the projecttasks in financial accounting. If a purchasing contract or a list price for the ordered service exists, the purchase ordercan be created automatically. If no source of supply exists, a request for quotation can be sent out to determine anappropriate supplier.Alternatively with this scenario, it is possible to order external resources to provide services for customer demandsthat cannot be fulfilled by internal employees. In this case, the procurement process is triggered when a sales orderor a service order has been created.For more information, see Procure-to-Pay (Services).

Tasks

Create an Invoice or Credit Memo with Reference to Preceding DocumentsFor information about this task, see here [page 212].

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React to an Order with Excess Invoice QuantityTo react to an invoiced purchase order that contains an invoice quantity that is higher thanthe delivery or order quantity and for which no further deliveries, goods returns, or invoicesare expected, you can do one of the following:

● Create a credit memo for the excess invoice quantity.Select the invoiced order and click New Credit Memo .For more information, see Create an Invoice or Credit Memo with Reference toPreceding Documents [page 212].

● Cancel the invoice with the excess quantity and create a new invoice for the actualdelivery or order quantity.1. Copy the order ID for which you want to cancel the invoice.2. To search for the invoice, choose the Invoices and Credit Memos view and click

Advanced.3. Choose Order as the Reference Type and enter the order ID in the Reference ID

field.4. Click Go and select the order.5. Click Cancel Document .

For more information, see Cancel an Invoicing Document [page 242].6. Choose the Invoice Entry view and create a new invoice for the actual delivery or

order quantity by selecting the order and clicking New Invoice .For more information, see Create an Invoice or Credit Memo with Reference toPreceding Documents [page 212].

Create an Invoice or Credit Memo Without a Purchase OrderFor information about this task, see here [page 217].

Create a Customs InvoiceFor information about this task, see here [page 222].

Create a Down Payment RequestFor information about this task, see here [page 224].

Create a Scanned Invoice or Credit MemoFor information about this task, see here [page 227].

Export Documents to be Invoiced to Microsoft Excel®For information about this task, see here [page 198].

Create an Invoice or Credit Memo Using Microsoft Excel®For information about this task, see here [page 235].

Migrate Open Goods ReceiptTo create a new supplier invoice under Supplier Invoicing for a migrated open goods receipt,proceed as follows:

● Full-quantity approach (purchase orders were migrated)

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To post a supplier invoice against a purchase order that has not been migrated, selectthe Not Migrated indicator. The system will assign the new invoice (not migrated)automatically to the corresponding open goods receipt (migrated).

● Remaining quantity approach (purchase orders were not migrated)When you create a supplier invoice (without reference to a purchase order), you canassign a purchase order number to the item. Select Not Migrated

6.3.2 Business Background

6.3.2.1 Distributing Costs and Quantities Among Invoice and CreditMemo Items

As an accountant, you may have to classify unplanned cost items of supplier invoices and assign them to the non-cost items of the same supplier invoices. Moreover, you may have to redistribute the invoiced quantities of onepurchase order item to several deliveries. To accommodate you and the invoicing processes of your company, thesystem provides features within the Supplier Invoicing work center that support this task.Distributing Unplanned CostsAs part of the cost distribution function, the system automatically performs a first cost distribution for the supplierinvoices that you have selected; after this, you can distinguish the involved costs further for proper evaluation.Unplanned cost items that can be distributed are packaging and transportation costs, or insurance rates, amongothers.Using the References on the Cost Distribution tab of the Items tab at the bottom of the supplier invoice editor, youcan track all account assignment details separately for each supplier invoice item, even if multi-account assignmentsexist in financial accounting. Moreover, using the Reference Quantity, you can view the quantity of the goods orservices that were ordered or delivered.Depending on your business needs, you can

● Distribute unplanned cost items manually separately for each supplier invoice item, as required. ● Have the system distribute unplanned cost items automatically for all supplier invoice items of a selected

supplier invoice by checking Distribute Costs.

The main benefit of this function is that you as an accountant can assess unplanned costs for procured goods andservices early during the operational procurement process; consequently, the cost figures are available when thecorresponding balance sheet is evaluated.Distributing Invoiced QuantitiesAs part of the cost distribution function, the system allows you to distribute invoiced quantities originating from thesame purchase order item over several deliveries.On the Items tab of a supplier invoice, the system displays the purchase order item to which the supplier invoice itemrefers. The purchase order item is also displayed on the Cost Distribution tab that is part of the Item Details section.

The system allows the processing of several purchase order items in one supplier invoice. However, in onesupplier invoice item only one purchase order item can be processed.

Once the delivery or the first of a number of deliveries arrives and is visible in the system, the system automaticallyperforms a first distribution of the invoiced quantities. As default, the system distributes the quantities that areinvoiced over the same supplier invoice as follows:

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● If the invoiced quantities are covered in one delivery, the system distributes all values to this delivery. ● If the invoiced quantities are split over several deliveries, the system distributes all values to the delivery that

was in the system first.

You can overrule the cost distribution performed by the system. This may be necessary if, for example, thegoods or services ordered over a purchase order are invoiced over two supplier invoices. As default, the systemdistributes all values to the first delivery referring to a supplier invoice that is available in the system; however,you as an accountant can redistribute the cost items as required to also take the second supplier invoice intoaccount.

The main benefit of this function is that you as an accountant can decide individually how to invoice the deliveries ofthe goods or services that your company has ordered. Moreover, the function adds to the compliance of your systemin that it makes supplier invoicing processes transparent.

Process Flow

Distributing Additional Costs or Credit Memo ValuesThe following provides a description of a process flow example that involves the distribution of additional cost orcredit memo items.

1. An accountant receives a supplier invoice in his or her work list and opens the supplier invoice. This supplierinvoice consists of three regular supplier invoice items plus an additional fourth supplier invoice item thatcovers freight costs.

2. The New Invoice screen opens. On the Cost Distribution tab, in the Item Details section, the accountant checksDistribute Additional Costs Proportionally to start the distribution of the freight costs to the three regularsupplier invoice items.

3. By default, the system distributes the freight costs to all of the three regular supplier invoice items.

The distribution is proportional to the net values of the supplier invoice items.

4. The accountant notices that invoice item three is a service item, for which freight costs do not apply. Toexclude this item from cost distribution, the accountant selects the item and clicks Exclude Item from CostDistribution.The system adjusts the distribution of the freight costs and distributes them among invoice items one andtwo only.

5. The accountant saves the supplier invoice to prepare its posting.

Distributing Invoiced QuantitiesThe following provides a description of a process flow example that involves the distribution of quantities originatingfrom the same purchase order item to more than one delivery.Processing the Supplier Invoice

1. An accountant receives a supplier invoice in his or her work list that refers to a purchase order. Using thispurchase order, a quantity of ten items was ordered. However, the supplier invoice covers only eight items.

2. The accountant opens the supplier invoice. On the New Invoice editor that opens, the system displays allsupplier invoice items for the accountant to check.

3. On the Cost Distribution tab, in the Item Details section, the accountant notices that the invoiced goods orservices that were ordered using the purchase order have not yet been delivered: The purchase order is theonly document that is shown in the Reference column (quantity of ten).

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4. On the Items tab, the accountant reduces the invoiced quantity to eight.

In parallel, the system proposes a new distribution of the invoiced quantities. As default, the systemtakes all deliveries into account.

5. The accountant saves the supplier invoice to prepare its posting.

Distributing the Invoiced Quantities to Deliveries1. A delivery arrives that covers a quantity of four of the purchase order item.2. The system automatically redistributes the values of the quantities and, consequently, shows two documents

in the Reference column: the delivery (quantity of four) and the purchase order (quantity of four).3. A second and a third delivery arrive that cover a quantity of two and a quantity of four of the purchase order

items.4. The system automatically redistributes the values of the quantities and, consequently, shows four documents

in the Reference column: the first delivery (quantity of four), the second delivery (quantity of two), the thirddelivery (quantity of two), and the purchase order (quantity of zero).

5. The accountant receives a second supplier invoice in his or her work list that refers to the same purchaseorder item as the first supplier invoice. Over this second supplier invoice, the second delivery with a quantityof two items is invoiced.

6. On the Cost Distribution tab, in the Item Details section, the accountant reduces the quantity of the seconddelivery that was invoiced over the second supplier invoice to zero and adapts the quantities of the first andthird delivery to quantities of four each.

7. Finally, the accountant posts the first supplier invoice. Consequently, the status of the purchase order in whichthe goods or services were ordered changes to Partially Invoiced.

When the second supplier invoice that covers the second delivery is posted, the status of the purchaseorder changes to Completely Invoiced.

See AlsoSupplier Invoice Processing with ReferenceSupplier Invoice Processing without ReferenceQuick Guide for Invoice Entry [page 200]

6.3.2.2 Limit Items

OverviewIn the SAP Business ByDesign solution, limit items are items that are assigned a maximum value limit rather than aprice in a purchase document. A limit item is used in a shopping cart or purchase order when you do not know thedetails of the material or service you want or the quantity that you need.When creating a limit item in a shopping cart or purchase order, a material, service, or related expense is not specified.This information is entered later in the goods and services receipt or supplier invoice. For example, if a service, suchas a repair, needs to be done, but you do not know how many hours it will take, you can add a limit item to the purchaseorder and assign the maximum amount that the repair can cost. Once the repair is completed, you can fill in thedetails in the relevant follow-up document.

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If the value limit is exceeded for a limit item, the document is posted but sent for approval to the relevant manageror designated approver.

Creating a Limit ItemWhen you do not know the details of a non-stock material or service that you want, you can create a limit item in ashopping cart or in a purchase order.

Limit Items in Shopping CartsWhen adding limit items to shopping carts, you only need to provide a product description, product category, deliverydate, and value limit.Employees shopping on behalf of colleagues can add limit items to their shopping carts by clicking:

● Go Shopping (Advanced) in the Self-Services view of the Home work center ● New Shopping Cart in the Common Tasks pane of the Project Management work center ● Go Shopping in the Common Tasks pane of the Project Team work center

For more information, see Create a Shopping Cart on Behalf [page 46].

Limit Items in Purchase OrdersPurchase orders that are created from purchase requests generated from shopping carts may already contain limititems. However, you can also manually create purchase orders with or without reference to purchase requests andadd limit items.When adding limit items to purchase orders, you need to provide a product description, product category, deliverydate, and value limit.Buyers creating purchase orders can add limit items to them by:

● Selecting a purchase request from the list in the Purchase Requests view of the Purchase Requests andOrders work center, then clicking New Purchase Order

● Creating a new purchase order in the Purchase Orders view of the Purchase Requests and Orders work center

For more information, see Bundle Purchase Requests and Create a Purchase Order [page 68] and Create aPurchase Order Manually [page 97].

Confirming a Material, Service, or Related Expense for a Limit ItemAs the buyer, you can confirm limit item details in goods and services receipts with reference to purchase orders. Ifno goods and services receipts are required, then, as an accountant, you can confirm limit item details in the relevantsupplier invoices.

Limit Items in Goods and Services ReceiptsWhen the items of a purchase order are delivered, you can create a goods and services receipt and include the detailsof the limit item. At this point, you will know the final quantities and prices of materials, services, or expenses relatedto the limit item, so you can enter in the details in the goods and services receipt. Here you enter the item type(material, service, expense), product ID (if available), delivered quantity, net price, and delivery date, service period,or expense period.If there is an assigned contract, the system automatically enters the price and description from the contract. Thisinformation cannot be updated.Goods and services receipts are created by:

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● Buyers in the Goods and Services Receipts work center ● Employees in any of the Home, Project Management, or Project Team work centers

For more information, see Create a Goods and Services Receipt for Open Limit Items [page 135].

Limit Items in Supplier InvoicesYou will receive the price for the limit item with the supplier invoice. You have to manually enter the price in thesystem through the Supplier Invoicing work center. The system checks if it is included in the assigned contract. Awarning is displayed if the price you enter is lower than the contract price. An error is displayed if the price is greaterthan the contract price.If there is a goods and services receipt, then the supplier invoice will already contain all of the details of the limit item.

Value LimitsThe value limit of a limit item in a purchase order, shopping cart, goods and services receipt, or supplier invoice isthe maximum amount that can be spent on the purchase of products within that limit item. If a contract is assignedto the limit item, then the Value Limit field shows the maximum amount that can be spent on that contract.

Only one contract can be assigned to a limit item.

The Other Value Limit field usually shows the additional maximum amount that you can spend on the purchase ofnon-contract products, but it can also include products from other contracts other than the one assigned to the limititem.In that case, the value limit is the total of the assigned contract’s limit plus any other value limits. This can includeanother contract but that contract is not attached to the limit item and is treated as a non-contract item.The Other Value Limit field can only be used if you have specified a contract for the item (the value limit).

When a contract is already assigned to a limit item, the Other Value Limit is included in and must not exceedthe Value Limit.

If you do not specify the other value limit, the system allows you to spend as much as you want.

Value Limits in DetailWhen creating a new purchase order limit item, only the Value Limit and Contract ID fields are initially ready for input.If you just specify a value limit, then items entered in the goods and services receipt with reference to that purchaseorder limit item are covered to the specified value limit. If a contract ID is specified for or assigned to that value limitin the purchase order limit item, the whole value limit is related to that contract plus any non-contract items.After entering a contract ID for the value limit in the purchase order, you will be able to also specify an Other ValueLimit in the purchase order for non-contract items or items from other contracts than the one assigned to the ValueLimit field. The value of the Other Value Limit needs to be less than or equal to the Value Limit and is included in theValue Limit, which is the total of both the value limit and the other value limit.When entering items in the goods and services receipt with reference to the purchase order limit item, both the ValueLimit and the Other Value Limit are checked by the system.

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If these limits are exceeded, a warning message is displayed. If the limits are exceeded, you are still able topost the goods and services receipt, but it is submitted to the manager or designated approver for approval.The supplier invoice is created with an exception and is submitted for approval.

If you do not specify a contract, you can enter whatever price you want for the limit item.If you specify a contract in the purchase order, when you enter the details in the goods and services receipt or supplierinvoice, the system checks if the product is part of the contract and checks the price.

● In the goods and services receipt, the system automatically enters the product description and the price fromthe contract, if found. You cannot change these details.

● In the supplier invoice, you must manually enter the price. The system checks if the product is part of thespecified contract. A warning is displayed if the price is lower than the contract. An error is displayed if theprice is greater than the contract.

If the product is not part of the specified contract, you manually enter the price; the price is accepted by the systemwithout a check. If the product is part of another contract, the system does not check the price against that contract.

ExamplesExample AValue Limit = 1000 (when there is a contract assigned)Other Value Limit = 200This means the value limit for contract items is 1000, but it might be reduced down to 800 if non-contract items areentered.Example BValue Limit = 1000 (when there is no contract assigned)Other Value Limit = 0This means 1000 is the value limit for any non-contract items. Since no contract is assigned, an amount cannot beentered for Other Value Limit, and zero is the default.

6.3.2.3 Upload Supplier Invoices in XML Format — Mexico

This document contains text that is relevant for Mexico. To ensure that the system displays the correct text,select Personalize My Settings . Select Onscreen Help and, under Country, choose Mexico. Save yoursettings and logout to ensure these changes are made.

6.3.2.4 Down Payments Made in Financials

OverviewIt is sometimes necessary to make a down payment on an invoice amount before goods are produced or servicesprovided, for example to secure a reservation. In such cases, the supplier sends a down payment request, which isentered in the system.

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The down payment request is displayed in the payables balance as a statistical open item. The amount of the downpayment request is not posted to accounting initially, nor is the tax amount entered. These occur at a later date whenthe payment is made.Down payments can be made manually, or automatically in a scheduled payment run. If the payment is createdautomatically, the tax and down payment amounts are posted to the corresponding general ledger accounts.Once the final invoice for the total amount is received, the total invoice item is automatically assigned to the matchingdown payment item. A transfer posting is made from the Down Payments Made account to the Payables account.The tax entry resulting from the down payment made is cancelled and a new tax entry is entered using the amountfrom the total invoice.For more information on postings for down payments, see Postings for Down Payments (Gross Method).

PrerequisitesThe accounts for down payments are provided in the Business Configuration work center in the Activity List view andthe Fine-Tune step. To navigate to this step, choose Financial and Management Accounting > Chart of Accounts,Financial Reporting Structures, Account Determination -> Accounts Payable or Accounts Receivable. For moreinformation about account determination, see Configuration of Account Determination for Business Transactionsand Reconciliation Accounts.

Process Flow1. Create Down Payment Request

You create a new down payment request in the Supplier Invoicing work center. If a down payment is basedon a purchase order defined in the Purchase Requests and Orders work center, you need to quote the relevantpurchase order when you enter the own payment request. If you enter an invoice later, the referenced downpayment is identified from the purchase order number. For more information, see Create a Down PaymentRequest.

2. Display Supplier AccountIn the Payables work center, in the Suppliers view under Supplier Accounts you can display the down paymentrequest with the status Open.

3. Make a Down PaymentYou can pay the down payment request manually, or automatically in a payment run. You pay the downpayment request manually in the Payables work center, Suppliers and Supplier Accounts views. Your downpayment request is displayed in the supplier account monitor with the status Open. Choose the action PayManually By <Payment Method> (Pay Manually By Outgoing Check, for example). Once you have released thecheck, you can view the document flow by choosing Outgoing Check -> View All. You see that the check wasposted as a down payment made and that a provisional tax amount has been entered.You pay the down payment request using an automatic payment run in the Payables work center, AutomaticPayments view. Once the automatic payment run has been performed, a payment proposal is displayed thatcontains your down payment request with the status Open. By scheduling a payment run, and depending onyour settings in business configuration, your down payment request is paid on the due date.Partial clearing for down payment requests is not supported. Only the full amount can be cleared.

4. Enter Final InvoiceIn the supplier account monitor, you can see the down payment with the status Open. You enter the finalinvoice in the Supplier Invoicing work center.For the creation of the final invoice, the system proposes clearing all existing down payments made to thesupplier on the Down Payments tab page. Here, you can change the amount of the down payment to becleared. You can clear any remaining amount with a future invoice from the supplier.

5. Pay Final Invoice

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Reversing Down Payment Requests, Down Payments, and Total InvoicesYou can make a down payment request invalid in the Supplier Invoicing work center prior to posting, provided it hasnot yet been paid. If you have already made the down payment, you must first reverse clearing in the supplier accountmonitor. For more information on reversing clearing and on clearing when you cancel an invoice with reference to adown payment, see the related section in Supplier Account Monitor.Discount Applied to Supplier Invoices with Down PaymentsWhen a supplier invoice with a down payment is cleared, no cash discount is posted. If the system creates the finalpayment during the automatic payment run, it proposes the cash discount amount only for the remaining amountof the invoice.If you want to apply the cash discount to the total amount of the invoice, you can choose when processing the paymentproposal the supplier invoices for which you have received down payments and adjust the cash discount to the totalinvoice amount. To view and process a payment proposal, choose Payables -> Automatic Clearing. For moreinformation, see Cash Discounts for Payables in Financials.

6.3.3 Tasks

6.3.3.1 Create an Invoice or Credit Memo with Reference to PrecedingDocuments

OverviewIf your company enters purchase or logistics documents into the system, such as purchase orders, goods andservices receipts, goods returns, inbound deliveries, outbound deliveries, or third-party deliveries, you can createan invoice or a credit memo with reference to one or more of these preceding documents. When you create a newinvoice or credit memo with reference, the system automatically proposes the details of the preceding documentsin the invoice or credit memo. As an accountant, you can thus create invoices and credit memos more efficiently,and the process is less error-prone.

Procedure1. Go to Supplier Invoicing Invoice Entry .2. To display a list of preceding documents, go to the Show list and choose a list.

For a description of each list, see the Quick Guide for Invoice Entry (in Supplier Invoicing) [page 200].Alternatively, you can also search for preceding documents, for example, by entering the purchase order IDin the Find field or by using the Advanced search and filtering for certain criteria, such as the invoicing ordelivery status.

3. Select one or more preceding documents and click New Invoice or New Credit Memo .The system proposes the details of the preceding documents in the New Invoice or New Credit Memo screen.If the details in the purchase order such as the tax code or the account assignment differ from the details inthe goods and services receipt , the system transfers the details from the goods and services receipt to theinvoice or credit memo.In addition, the system calculates the total gross amount and the total tax amount based on the existing itemamounts and tax settings.For more information, see Tax Determination [page 152].

4. General Information

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1. Enter at least the external document ID and the date.2. Optional: You can add the Overall Discount field.

Go to Personalize This Screen , choose General Information, select Overall Net Discount or OverallGross Discount, and save.

3. Optional: You can choose to either enter the total gross amount and the total tax amount manually orto have the system fill these fields automatically once you added items by clicking Actions , thenchoosing Calculate Total Amounts.

5. Checking Invoice and Credit Memo DetailsCheck whether the details of the preceding documents, which the system proposes, match the details of theinvoice or credit memo you received from your supplier by mail or by fax. Make changes where necessary.

You cannot change the account assignment details that the system transferred from the precedingdocuments. An exception to this rule is the account assignment of purchase orders, for which no goodsand services receipt is expected.In this case, you can assign an invoice or credit memo item to more than one account assignment type.To do this, click Cost Distribution Details.You can distribute the quantity, amount (only if there is no quantity), or percentage among the differentaccount assignment types. When you reduce the percentage and press ENTER, the system creates anew table row with the remaining quantity, value, and percentage automatically. To change the accountassignment, select the row and select a new account assignment.When you click Basic View , the system displays a table with the multiple account assignment typesof the invoice or credit memo item.

The system leaves the account assignment details for stock material items blank, since they are notrelevant for these items.

6. ItemsUnder Items, click Add Row .You can add invoice or credit memo items in the following ways:

● Enter the product ID, quantity, and price.The system finds the corresponding product category, product description, and tax code, andcalculates the tax amount for each tax code, which you can view under Tax Details. The system derivesthe G/L account or G/L account (origin) based on the product. To see which G/L account or G/Laccount (origin) the system has determined, you can simulate the journal entry by clicking

Actions , then choosing Simulate Journal Entry once you have completed the invoice or credit memo.For more information, see Tax Determination [page 152] and Automatic Account Determination[page 176].

● If you cannot find any suitable product in the system, enter the product category, product type, productdescription, quantity, and price.The system finds the corresponding tax code and calculates the tax amount for each tax code, whichyou can view under Tax Details. The system derives the G/L account or G/L account (origin) based onthe product category. To see which G/L account or G/L account (origin) the system has determined,you can simulate the journal entry by clicking Actions , then choosing Simulate Journal Entry onceyou have completed the invoice or credit memo.For more information, see Tax Determination [page 152] and Automatic Account Determination[page 176].

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● If you cannot find any suitable product or product category in the system, enter the product type,product description, tax code, quantity, price, and G/L account.The system uses the entered G/L account for account determination.For more information, see Free-Text Supplier Invoices (Without Purchase Order Reference) (AccountDetermination).

● For kit items, you can also add the columns Parent ID and Base Quantity through personalization.7. Account Assignment

Under Account Assignment in the Account Assignment Type list, select an account assignment type for eachitem. Depending on the account assignment type you select, the system displays further fields for the costobjects. Depending on your business configuration you can enter the name of the employee responsible forthe cost.

Multiple Account AssignmentTo assign an item to more than one account assignment type, click Cost Distribution Details. You candistribute the quantity, amount (only if there is no quantity), or percentage among the different accountassignment types. When you reduce the percentage and press ENTER, the system creates a new tablerow with the remaining quantity, amount, and percentage automatically. To change the accountassignment, select the row and select a new account assignment.When you click Basic View , the system displays a table with the multiple account assignment typesof the invoice or credit memo item.

For more information about the different account assignment types, see Account Assignment in Purchasing [page 26].

For fixed asset procurement, Individual Material has to be selected as the account assignment type. This isonly for Creating Supplier Invoice Without Purchase Order

8. Optional: Grouping of ItemsIf the items in the invoice or credit memo from your supplier are grouped differently from the items on thisscreen, you can have the system regroup the items based on different criteria by selecting the items andclicking Group .For more information, see Group Invoice and Credit Memo Items.

9. Optional: Distribution of Additional CostsYou can add and distribute additional costs such as freight or insurance, or credit amounts such as cashdiscounts or refund of costs.

1. Click Add Row .2. Enter the type of cost in the Description column.3. Enter at least the tax code and the amount that you want to distribute among the existing invoice and

credit memo items.4. You can also enter a G/L account that the system uses only to classify the expense and not for account

determination.5. Select the Distribute Additional Costs Proportionally or the Distribute Credit Value Proportionally

checkbox.The system proportionally distributes the amount of the additional cost or credit value item amongthe amounts of all other items.

For more information, see Distributing Costs and Quantities Among Invoice and Credit Memo Items[page 205].

10. Optional: Distribution of Invoiced Quantities

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To see how the system has distributed the invoice or credit memo quantities among the items of the precedingdocuments, click Cost Distribution Details.In the Distribution of Invoiced Quantities table, the system displays the item and the item quantity of thepreceding document, such as the goods and services receipt, to which the invoice or credit memo item hasa reference. This means that the invoice or credit memo item settles the quantity of the item of the precedingdocument. You can adapt the quantity of the invoice or credit memo item.

If you enter a quantity that exceeds the open quantity of the reference item (that is, the quantity thathas not yet been invoiced or credited), the system distributes the excess quantity among the otheritems in the table. To view the already invoiced or credited item quantities, click Document Flow .

The last item of the table is always an item for which a reference to a preceding document is missing. To findout more about the missing document, click Exceptions . For more information, see Exception Handling[page 187].You can use this item to add a quantity for which there is no open quantity in the preceding documents.

11. Optional: Installments and RetainagesIf you agreed with your supplier to pay the invoice in installments or if you stipulate a retainage, click PaymentDetails.

● Installments1. To pay the invoice in installments, click Add Installment .

The system initially adds two rows to the table. The first row is always the totals row of the tableand is highlighted in yellow.

2. In the second row, enter the first installment either by changing the due amount or the percentageof the installment.

3. Press ENTER.The system creates a new row with the remaining due amount and percentage automatically. Youcan add more installments, if required.

The system proposes a due date for each installment with a time interval of one monthbetween the individual installments. If you specify a different time interval between the duedates of the installments, the system proposes all due dates of further installmentsaccordingly.

● Retainage1. If you agreed with your supplier to withhold a certain percentage of the total invoice value as a

security deposit until all goods have been delivered or all services have been performed, clickAdd Retainage .

The system initially adds three rows to the table. The first row is always the totals row of the tableand is highlighted in yellow.

2. In the row for the retainage, enter either an amount or a percentage such as 5%.3. Select a reconciliation account type, for example, Retainage for Accounts Payable.

For more information, see Reconciliation Accounts.4. Press ENTER.

The system fills the row for the remaining installment automatically. You can add moreinstallments, if required.

If payment terms have been specified for the invoice, the system leaves the due date of theinstallment blank and uses the due date of the invoice. If you require individual due datesfor each installment, delete these payment terms.

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12. Optional: Discounts, Surcharges, and ReductionsFor more information, see Enter Discounts, Reductions, and Surcharges in Supplier Invoices.

13. Completing the DocumentTo complete the document, you can:

● Check whether the document is complete and correct by clicking Check .The system verifies the data and displays error messages, where necessary. Depending on yoursettings in business configuration, the system creates exceptions for certain errors. To clarifyexceptions, click Show Exceptions .For more information, see Exception Handling [page 187].

● Display which accounts in financial accounting are affected by clicking Actions and choosingSimulate Journal Entry.

● Save a draft of document, which you can complete at another time, by clicking Save .The system automatically creates the Complete Supplier Invoice [page 190] task and displays it inthe Work view of the Supplier Invoicing work center.

● Release the document for payment by clicking Post .Before posting the document, the system verifies the data and displays error messages, wherenecessary. Depending on your settings in business configuration, the system creates exceptions forcertain errors.

If an employee, who is not allowed to post invoicing documents, clicks Post , the system assignsthe status Ready for Posting to the document and creates a task for all employees assigned tothe supplier invoicing org unit and all additional accountants of the org unit to post the invoice.For more information, see the Complete Supplier Invoice [page 190] task.

○ If the system identifies exceptions, it will not post the document and will add it to the Documentswith Exceptions list in the Work view of the Supplier Invoicing work center. You have to clarify theexceptions before the document can be posted. For more information, see Exception Handling[page 187].

○ If the system does not identify any exceptions and an approval process is in place, the system willcreate the Approve Supplier Invoice task and will add the document to the Documents inApproval list in the Work view of the Supplier Invoicing work center.

○ If there are no exceptions and no approval process is in place or the document has already beenapproved, the system will post it and will add it to the list in the Invoices and Credit Memos view.Once the document has been posted, the system automatically creates a journal entry for it,updates the general ledger account, and releases the document for payment.For more information, see Journal Entries [page 178].

14. Additional information for kits in supplier invoicing ● Pricing for supplier invoice containing kit items is taken over from the preceding purchase order

document. However, you can edit kit header details, whereas kit component details are not editablein the supplier invoice. If there is a change in price in the kit header level, the cost distribution will beas defined on the purchase order.

● Values for Quantity, Price are populated to kit components based on kit header. You cannot manuallychange the values for kit components.

● Change in quantity in kit header will automatically reflect in kit components for supplier invoicing. ● Additional cost will be distributed only to kit components, and not kit header. ● If there is a change in kit header price, the price will be proportionally distributed to kit components. ● Discounts/Surcharges at kit component level in supplier invoicing is not supported.

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● Invoicing status will be updated at purchase order kit header and component level. ● You can copy kit header which will also copy kit components, but kit components cannot be copied

alone. Similarly, if you remove kit header, kit components will also be removed. On selecting a kitcomponent, Copy and Remove will be disabled.

● You can create standalone supplier invoice containing kit items only with reference to a purchase order. ● Externally created supplier invoices via IDOC and B2Bs also support kit items in external

communication; and for these documents, if pricing is available for kit header, then it will be distributedto kit components proportionally based on cost distribution. If pricing is available at kit componentlevel, it will be aggregated to kit header from the components. If pricing is available from both kit headerand kit items, kit header price will be considered.

See AlsoCreate an Invoice or Credit Memo Without a Purchase Order [page 217]

6.3.3.2 Create an Invoice or Credit Memo Without a Purchase Order

OverviewYou create an invoice or credit memo without reference to preceding documents such as purchase orders whenyour supplier sends you a document by mail or by fax that does not contain any references, for example, becausethere is no corresponding purchase order or the purchase order was created outside the system.You can create invoices or credit memos without a purchase order in the following locations:

● Supplier Invoicing New Invoice Without Purchase Order ● Supplier Invoicing Invoice Entry New Invoice Without Purchase Order

Procedure1. Enter all data as specified in the document that you received from your supplier by mail or by fax.

● SupplierEnter the supplier ID. If you do not have the supplier's details in your system, click New and create anew supplier record.

● General Information1. Enter at least the external document ID and the date.2. Optional: You can add the Overall Discount field.

Go to Personalize This Screen , choose General Information, select Overall Net Discount orOverall Gross Discount, and save.Optional: If you enter an invoice or credit memo for a Mexican company, enter the Official InvoiceID and the Approved On date.For more information, see Invoice Processing - Mexico.

3. Optional: You can choose to either enter the total gross amount and the total tax amount manuallyor to have the system fill these fields automatically once you added items by clicking Actions ,then choosing Calculate Total Amounts.

4. To enter cost distribution details for delivery costs, click View All

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a. Select the Items tabb. Select Delivery Cost Invoice Item under Typec. Click on Cost Distribution from Item Detailsd. Check the box for Distribute Additional Costs Proportionally and click the link Distribute

among other invoices or credit memose. Select the Document Type and enter Invoice ID/Item ID in the dialogue box. Click

Distribute

The distribution of cost can be seen under Cost Distribution Details

You can remove items from the cost distribution list by clickingExclude Item from Cost Distribution . You can also add items from other document types to the

Cost Distribution Details.

2. ItemsUnder Items, click Add Row .You can add invoice or credit memo items in the following ways:

● Enter the product ID, quantity, and price.The system finds the corresponding product category, product description, and tax code, andcalculates the tax amount for each tax code, which you can view under Tax Details. The system derivesthe G/L account or G/L account (origin) based on the product. To see which G/L account or G/Laccount (origin) the system has determined, you can simulate the journal entry by clicking

Actions , then choosing Simulate Journal Entry once you have completed the invoice or credit memo.For more information, see Tax Determination [page 152] and Automatic Account Determination[page 176].

● If you cannot find any suitable product in the system, enter the product category, product type, productdescription, quantity, and price.The system finds the corresponding tax code and calculates the tax amount for each tax code, whichyou can view under Tax Details. The system derives the G/L account or G/L account (origin) based onthe product category. To see which G/L account or G/L account (origin) the system has determined,you can simulate the journal entry by clicking Actions , then choosing Simulate Journal Entry onceyou have completed the invoice or credit memo.For more information, see Tax Determination [page 152] and Automatic Account Determination[page 176].

● If you cannot find any suitable product or product category in the system, enter the product type,product description, tax code, quantity, price, and G/L account.The system uses the entered G/L account for account determination.For more information, see Free-Text Supplier Invoices (Without Purchase Order Reference) (AccountDetermination).

3. Account AssignmentUnder Account Assignment in the Account Assignment Type list, select an account assignment type for eachitem. Depending on the account assignment type you select, the system displays further fields for the costobjects. Depending on your business configuration you can enter the name of the employee responsible forthe cost.

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Multiple Account AssignmentTo assign an item to more than one account assignment type, click Cost Distribution Details. You candistribute the quantity, amount (only if there is no quantity), or percentage among the different accountassignment types. When you reduce the percentage and press ENTER, the system creates a new tablerow with the remaining quantity, amount, and percentage automatically. To change the accountassignment, select the row and select a new account assignment.When you click Basic View , the system displays a table with the multiple account assignment typesof the invoice or credit memo item.

For more information about the different account assignment types, see Account Assignment in Purchasing [page 26].

For fixed asset procurement, Individual Material has to be selected as the account assignment type. This isonly for Creating Supplier Invoice Without Purchase Order

4. Optional: Distribution of Additional CostsYou can add and distribute additional costs such as freight or insurance, or credit amounts such as cashdiscounts or refund of costs.

1. Click Add Row .2. Enter the type of cost in the Description column.3. Enter at least the tax code and the amount that you want to distribute among the existing invoice and

credit memo items.4. You can also enter a G/L account that the system uses only to classify the expense and not for account

determination.5. Select the Distribute Additional Costs Proportionally or the Distribute Credit Value Proportionally

checkbox.The system proportionally distributes the amount of the additional cost or credit value item amongthe amounts of all other items.

For more information, see Distributing Costs and Quantities Among Invoice and Credit Memo Items[page 205].

5. Optional: Intercompany Invoicing

Configuration SettingsConfiguration settings are normally performed by an administrator. If you do not have the requiredauthorization, contact an administrator.You have enabled Intercompany Supplier Invoicing in your solution configuration. To find this businessoption, go to the Business Configuration work center and choose the Implementation Projects view.Select your implementation project and click Edit Project Scope . In the Scoping step of the project,ensure that Supplier Invoicing is selected within Purchasing.In the Questions step, expand the Purchasing scoping element and select Supplier Invoicing. Select Supplier Invoices and Credit Memos Entry of Supplier Invoices and confirm that you chargeinvoices to partner companies.For more information about defining intercompany posting rules and enabling companies, see DirectPosting to Partner Companies – Configuration Guide.

If your company is part of a group of partner companies, you can charge invoice items that do not have areference to a purchase order to your partner companies, for example, for additional costs.

1. Ensure that you created one invoice item for each invoice amount that you want to charge to a partnercompany even if the original invoice from your supplier contains one invoice item only. This is necessary

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since you can assign items that you charge to partner companies to one account assignment typeonly.

2. For each item that you want to charge to a partner company, enter a partner company in the Charge-To Company field.The system creates intercompany receivables and payables automatically without posting a separateinvoice for the partner company. This means that no additional manual postings are required infinancial management.

The system does not charge taxes to the charge-to companies. For Germany, we thereforerecommend that you use this process only within a tax reporting group.For more information, see Tax Reporting Group.

ExampleYour telephone company sent you an invoice that contains one invoice item with an amount of USD500.00. Since your company is part of a group of partner companies, you only want to pay USD250.00 of the telephone bill and want to charge USD 250.00 to one of your partner companies. Todo this, you create the following two invoice items:

● Item 1: Amount USD 250.00Item 1 will be charged to the buying company.

● Item 2: Amount USD 250.00 and company B entered as charge-to company.Item 2 will be charged to partner company B.

For more information about intercompany processes, see Intercompany Processes in SAP BusinessByDesign.

6. Optional: Installments and RetainagesIf you agreed with your supplier to pay the invoice in installments or if you stipulate a retainage, click PaymentDetails.

● Installments1. To pay the invoice in installments, click Add Installment .

The system initially adds two rows to the table. The first row is always the totals row of the tableand is highlighted in yellow.

2. In the second row, enter the first installment either by changing the due amount or the percentageof the installment.

3. Press ENTER.The system creates a new row with the remaining due amount and percentage automatically. Youcan add more installments, if required.

The system proposes a due date for each installment with a time interval of one monthbetween the individual installments. If you specify a different time interval between the duedates of the installments, the system proposes all due dates of further installmentsaccordingly.

● Retainage1. If you agreed with your supplier to withhold a certain percentage of the total invoice value as a

security deposit until all goods have been delivered or all services have been performed, clickAdd Retainage .

The system initially adds three rows to the table. The first row is always the totals row of the tableand is highlighted in yellow.

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2. In the row for the retainage, enter either an amount or a percentage such as 5%.3. Select a reconciliation account type, for example, Retainage for Accounts Payable.

For more information, see Reconciliation Accounts.4. Press ENTER.

The system fills the row for the remaining installment automatically. You can add moreinstallments, if required.

If payment terms have been specified for the invoice, the system leaves the due date of theinstallment blank and uses the due date of the invoice. If you require individual due datesfor each installment, delete these payment terms.

7. Optional: Discounts, Surcharges, and ReductionsFor more information, see Enter Discounts, Reductions, and Surcharges in Supplier Invoices.

8. Completing the DocumentTo complete the document, you can:

● Check whether the document is complete and correct by clicking Check .The system verifies the data and displays error messages, where necessary. Depending on yoursettings in business configuration, the system creates exceptions for certain errors. To clarifyexceptions, click Show Exceptions .For more information, see Exception Handling [page 187].

● Display which accounts in financial accounting are affected by clicking Actions and choosingSimulate Journal Entry.

● Save a draft of document, which you can complete at another time, by clicking Save .The system automatically creates the Complete Supplier Invoice [page 190] task and displays it inthe Work view of the Supplier Invoicing work center.

● Release the document for payment by clicking Post .Before posting the document, the system verifies the data and displays error messages, wherenecessary. Depending on your settings in business configuration, the system creates exceptions forcertain errors.

If an employee, who is not allowed to post invoicing documents, clicks Post , the system assignsthe status Ready for Posting to the document and creates a task for all employees assigned tothe supplier invoicing org unit and all additional accountants of the org unit to post the invoice.For more information, see the Complete Supplier Invoice [page 190] task.

○ If the system identifies exceptions, it will not post the document and will add it to the Documentswith Exceptions list in the Work view of the Supplier Invoicing work center. You have to clarify theexceptions before the document can be posted. For more information, see Exception Handling[page 187].

○ If the system does not identify any exceptions and an approval process is in place, the system willcreate the Approve Supplier Invoice task and will add the document to the Documents inApproval list in the Work view of the Supplier Invoicing work center.

○ If there are no exceptions and no approval process is in place or the document has already beenapproved, the system will post it and will add it to the list in the Invoices and Credit Memos view.Once the document has been posted, the system automatically creates a journal entry for it,updates the general ledger account, and releases the document for payment.For more information, see Journal Entries [page 178].

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See AlsoCreate an Invoice or Credit Memo with Reference to Preceding Documents [page 212]

6.3.3.3 Create a Customs Invoice

OverviewWhen you import products from other countries, the products may be subject to taxes and duties. You create acustoms invoice for these taxes and duties based on the invoice you received from your customs authorities.You can create customs invoices in the following locations:

● Supplier Invoicing New Customs Invoice ● Supplier Invoicing Invoice Entry New Customs Invoice

Procedure1. Enter all data as specified in the document that you received from the custom's authority by mail or by fax.

● SupplierEnter the ID of the customs authority in the Supplier field. If you do not have the customs authority'sdetails in your system, click New to create a new supplier record for the customs authority.

● General Information1. Enter at least the external document ID and the date.2. Optional: You can add the Overall Discount field.

Go to Personalize This Screen , choose General Information, select Overall Net Discountor Overall Gross Discount, and save.

3. Optional: You can choose to either enter the total gross amount and the total tax amountmanually or to have the system fill these fields automatically once you added items by clicking

Actions , then choosing Calculate Total Amounts.

2. ItemsUnder Items, click Add Row .You can use the following item types in customs invoices:

● Import VAT Debit ItemThis type of item contains the tax amount as a net amount.a. Enter a product description and choose a tax code that is classified as direct VAT.b. In the Net Amount field, enter the amount of the import VAT.

The entered amount is posted as a tax amount in financial management and will be declared in atax return. You do not have to enter a quantity or net price information.

c. For non-deductible taxes, choose a G/L account.

In cases where the supplier pays the tax for you and wants a refund from you, the import VAT debititem can also be used in regular supplier invoices.

● Customs Duty Debit ItemThis type of item is not taxable. You cannot enter a tax code.

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a. Enter a product description.b. In the Net Amount field, enter an amount.

The entered amount is posted as a tax amount in financial management and will be declared in atax return. You do not have to enter a quantity or net price information.

c. Choose a G/L account.3. Account Assignment

Under Account Assignment in the Account Assignment Type list, select an account assignment type for eachitem. Depending on the account assignment type you select, the system displays further fields for the costobjects. Depending on your business configuration you can enter the name of the employee responsible forthe cost.

Multiple Account AssignmentTo assign an item to more than one account assignment type, click Cost Distribution Details. You candistribute the quantity, amount (only if there is no quantity), or percentage among the different accountassignment types. When you reduce the percentage and press ENTER, the system creates a new tablerow with the remaining quantity, amount, and percentage automatically. To change the accountassignment, select the row and select a new account assignment.When you click Basic View , the system displays a table with the multiple account assignment typesof the invoice or credit memo item.

For more information about the different account assignment types, see Account Assignment in Purchasing [page 26].

For fixed asset procurement, Individual Material has to be selected as the account assignment type. This isonly for Creating Supplier Invoice Without Purchase Order

4. To update the total gross amount and the total tax amount due to the added items, click Actions , thenchoose Calculate Total Amounts.

5. Optional: Reference to Purchase OrderYou can add a reference to a purchase order by clicking View All , choosing Items and entering the purchaseorder ID in the Order ID column.As a consequence, you receive the Check Customs Invoices for Canceled Supplier Invoice [page 192] taskwhen an invoice or credit memo with reference to this purchase order has been canceled. You can then checkwhether the customs invoice needs to be canceled as well. The system only sends this task if you have addedthe reference to the purchase order in the customs invoice. The system does not use this reference for anyother purpose.To return to the New Customs Invoice screen, click Basic View .

6. Completing the DocumentTo complete the document, you can:

● Check whether the document is complete and correct by clicking Check .The system verifies the data and displays error messages, where necessary. Depending on yoursettings in business configuration, the system creates exceptions for certain errors. To clarifyexceptions, click Show Exceptions .For more information, see Exception Handling [page 187].

● Display which accounts in financial accounting are affected by clicking Actions and choosingSimulate Journal Entry.

● Save a draft of document, which you can complete at another time, by clicking Save .The system automatically creates the Complete Supplier Invoice [page 190] task and displays it inthe Work view of the Supplier Invoicing work center.

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● Release the document for payment by clicking Post .Before posting the document, the system verifies the data and displays error messages, wherenecessary. Depending on your settings in business configuration, the system creates exceptions forcertain errors.

If an employee, who is not allowed to post invoicing documents, clicks Post , the system assignsthe status Ready for Posting to the document and creates a task for all employees assigned tothe supplier invoicing org unit and all additional accountants of the org unit to post the invoice.For more information, see the Complete Supplier Invoice [page 190] task.

○ If the system identifies exceptions, it will not post the document and will add it to the Documentswith Exceptions list in the Work view of the Supplier Invoicing work center. You have to clarify theexceptions before the document can be posted. For more information, see Exception Handling[page 187].

○ If the system does not identify any exceptions and an approval process is in place, the system willcreate the Approve Supplier Invoice task and will add the document to the Documents inApproval list in the Work view of the Supplier Invoicing work center.

○ If there are no exceptions and no approval process is in place or the document has already beenapproved, the system will post it and will add it to the list in the Invoices and Credit Memos view.Once the document has been posted, the system automatically creates a journal entry for it,updates the general ledger account, and releases the document for payment.For more information, see Journal Entries [page 178].

6.3.3.4 Create a Down Payment Request

OverviewFor some purchasing processes it is necessary to make down payments prior to the delivery of goods or the provisionof services. In most cases, these down payment requests refer to purchase orders. When an accountant creates thefinal invoice, the system can automatically determine whether one or more down payments have been made for apurchase order and reduces the due amount of the final invoice, if necessary.You can create down payment requests in the following locations:

● Supplier Invoicing New Down Payment Request ● Supplier Invoicing Invoice Entry New Down Payment Request

Procedure1. Enter all data as specified in the document that you received from your supplier by mail or by fax.

● SupplierEnter the supplier ID. If you do not have the supplier's details in your system, click New and create anew supplier record.

● General Information1. Enter at least the external document ID and the date.2. Optional: You can add the Overall Discount field.

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Go to Personalize This Screen , choose General Information, select Overall Net Discount orOverall Gross Discount, and save.Optional: If you enter an invoice or credit memo for a Mexican company, enter the Official InvoiceID and the Approved On date.For more information, see Invoice Processing - Mexico.

3. Optional: You can choose to either enter the total gross amount and the total tax amount manuallyor to have the system fill these fields automatically once you added items by clicking Actions ,then choosing Calculate Total Amounts.

4. To enter cost distribution details for delivery costs, click View All

a. Select the Items tabb. Select Delivery Cost Invoice Item under Typec. Click on Cost Distribution from Item Detailsd. Check the box for Distribute Additional Costs Proportionally and click the link Distribute

among other invoices or credit memose. Select the Document Type and enter Invoice ID/Item ID in the dialogue box. Click

Distribute

The distribution of cost can be seen under Cost Distribution Details

You can remove items from the cost distribution list by clickingExclude Item from Cost Distribution . You can also add items from other document types to the

Cost Distribution Details.

2. ItemsUnder Items, click Add Row .You can add items in the following ways:

● Enter the product ID, purchase order ID (optional), tax code (if not automatically filled), and gross/netamount.The system finds the corresponding product description and, if possible, the tax code. If available, thesystem uses the purchase order ID to reduce the due amount of the final invoice by the down paymentrequest amount. The system derives the G/L account or G/L account (origin) based on the product.To see which G/L account or G/L account (origin) the system has determined, you can simulate thejournal entry by clicking Actions , then choosing Simulate Journal Entry once you have completedthe down payment request.For more information, see Tax Determination [page 152] and Automatic Account Determination[page 176].

● If you cannot find any suitable product in the system, enter the description, purchase order ID(optional), tax code (if not automatically filled), net/gross amount, and a G/L account to classify theexpense.If available, the system uses the purchase order ID to reduce the due amount of the final invoice by thedown payment request amount. Furthermore, the system uses the entered G/L account for accountdetermination.For more information, see Free-Text Supplier Invoices (Without Purchase Order Reference) (AccountDetermination).

3. To update the total gross amount and the total tax amount due to the added items, click Actions , thenchoose Calculate Total Amounts.

4. Account Assignment

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Under Account Assignment in the Account Assignment Type list, select an account assignment type for eachitem. Depending on the account assignment type you select, the system displays further fields for the costobjects. Depending on your business configuration you can enter the name of the employee responsible forthe cost.

Multiple Account AssignmentTo assign an item to more than one account assignment type, click Cost Distribution Details. You candistribute the quantity, amount (only if there is no quantity), or percentage among the different accountassignment types. When you reduce the percentage and press ENTER, the system creates a new tablerow with the remaining quantity, amount, and percentage automatically. To change the accountassignment, select the row and select a new account assignment.When you click Basic View , the system displays a table with the multiple account assignment typesof the invoice or credit memo item.

For more information about the different account assignment types, see Account Assignment in Purchasing [page 26].

For fixed asset procurement, Individual Material has to be selected as the account assignment type. This isonly for Creating Supplier Invoice Without Purchase Order

5. To complete the down payment request, you can: ● Check whether the down payment request is complete and correct by clicking Check .

The system verifies the data and displays error messages, where necessary. Depending on yoursettings in business configuration, the system creates exceptions for certain errors. To clarifyexceptions, click Show Exceptions .For more information, see Exception Handling [page 187].

● Save a draft of the down payment request, which you can complete at another time, by clickingSave .

The system automatically creates the Complete Supplier Invoice [page 190] task and displays it inthe Work view of the Supplier Invoicing work center.

● Release the down payment request by clicking Post .Before posting the down payment request, the system verifies the data and displays error messages,where necessary. Depending on your settings in business configuration, the system createsexceptions for certain errors.

If an employee, who is not allowed to post down payment requests, clicks Post , the systemassigns the status In Process to the down payment request and creates a task for all employeesassigned to the supplier invoicing org unit and all additional accountants of the org unit to postthe down payment request.For more information, see the Complete Supplier Invoice [page 190] task.

○ If the system identifies exceptions, it will not post the down payment request and will add it to theDocuments with Exceptions list in the Work view of the Supplier Invoicing work center. You haveto clarify the exceptions before the down payment request can be posted. For more information,see Exception Handling [page 187]

○ If the system does not identify any exceptions and an approval process is in place, the system willcreate the Approve Supplier Invoice task and will add the down payment request to the Documentsin Approval list in the Work view of the Supplier Invoicing work center.

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○ If there are no exceptions and no approval process is in place or the down payment request hasalready been approved, the system will post the down payment request and will add it to the listin the Invoices and Credit Memos view.Once the down payment request has been posted, the system enters the down payment requestdetails into a ledger and releases the down payment request for payment. For more information,see Down Payments Made in Financials [page 210].

See AlsoDown Payments Made in Financials [page 210]Postings for Down Payments (Gross Method)Supplier Account Monitor

6.3.3.5 Create a Scanned Invoice or Credit Memo

OverviewTo create a new invoice or credit memo, you can scan the document that you received from your supplier andmanually upload it as a pdf file to the SAP Business ByDesign system. You can then attach the uploaded file to thenew invoice or credit memo. If your scanner software can also create txt files from scanned documents, the systemcan use the txt file to propose the invoice or credit memo details, which enables you to create invoices and creditmemos more efficiently.You can create scanned invoices and credit memos in the following locations:

● Supplier Invoicing New Scanned Invoice/New Scanned Credit Memo ● Supplier Invoicing Invoice Entry New Scanned Invoice/Scanned Credit Memo

If your scanner software creates both a pdf and a txt file from a scanned document, you can also uploadscanned invoices and credit memos automatically using SAP Collaboration Window.For more information, see Uploading Scanned Supplier Invoices Using Automatic Upload Service.

Prerequisites ● Your scanner software creates a pdf file from a scanned invoice or credit memo. ● Optional: Your scanner software also creates a txt file from the scanned invoice or credit memo. ● Optional: Your scanner is equipped with an automatic document feeder.

This is important when you scan invoices or credit memos with more than one page. Without an automaticdocument feeder, you will have to scan each page individually.

Configuration Settings

Configuration settings are usually performed by an administrator. If you do not have the requiredauthorization, contact your administrator.

The entry of invoices and credit memos using a scanner is enabled in your solution configuration. To find this businessoption, go to the Business Configuration work center and choose the Implementation Projects view. Select your

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implementation project and click Edit Project Scope . In the Scoping step of the project, ensure that SupplierInvoicing is selected within Purchasing.In the Questions step, expand the Purchasing scoping element and select Supplier Invoicing. Select Supplier Invoicesand Credit Memos and answer the questions related to Entry of Supplier Invoices via Scanning.

Procedure1. Create an Invoice or Credit Memo Using a PDF File

Scan the document that you received from your supplier by mail or by fax.Your scanner software creates a pdf file from the scanned invoice or credit memo.

2. To upload the pdf file as an attachment, go to the New Scanned Invoice/New Credit Memo screen, clickAdd , then choose File.

3. In the new window, browse for the pdf file, update the document title (optional), choose Original Documentas the document type and click Add .The system uploads the pdf file and displays it on the New Scanned Invoice/New Credit Memo screen.

4. If the scanned invoice or credit memo has a reference to a purchase order, enter the purchase order ID underReference Documents.Based on the purchase order, the system finds the buying company, the supplier, and the items.

5. General Information1. Enter at least the external document ID and the date.2. Optional: You can add the Overall Discount field.

Go to Personalize This Screen , choose General Information, select Overall Net Discount or OverallGross Discount, and save.

3. Optional: You can choose to either enter the total gross amount and the total tax amount manually orto have the system fill these fields automatically once you added items by clicking Actions , thenchoosing Calculate Total Amounts.

6. Checking Invoice and Credit Memo DetailsCheck whether the details of the purchase order that the system proposes, match the details of the invoiceor credit memo you scanned. Make changes where necessary.

You cannot change the account assignment details that the system transferred from the purchaseorder. An exception to this rule is the account assignment of purchase orders, for which no goods andservices receipt is expected.

7. Optional:ItemsUnder Items, click Add Row .You can add invoice or credit memo items in the following ways:

● Enter the product ID, quantity, and price.The system finds the corresponding product category, product description, and tax code, andcalculates the tax amount for each tax code, which you can view under Tax Details. The system derivesthe G/L account or G/L account (origin) based on the product. To see which G/L account or G/Laccount (origin) the system has determined, you can simulate the journal entry by clicking

Actions , then choosing Simulate Journal Entry once you have completed the invoice or credit memo.For more information, see Tax Determination [page 152] and Automatic Account Determination[page 176].

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● If you cannot find any suitable product in the system, enter the product category, product type, productdescription, quantity, and price.The system finds the corresponding tax code and calculates the tax amount for each tax code, whichyou can view under Tax Details. The system derives the G/L account or G/L account (origin) based onthe product category. To see which G/L account or G/L account (origin) the system has determined,you can simulate the journal entry by clicking Actions , then choosing Simulate Journal Entry onceyou have completed the invoice or credit memo.For more information, see Tax Determination [page 152] and Automatic Account Determination[page 176].

● If you cannot find any suitable product or product category in the system, enter the product type,product description, tax code, quantity, price, and G/L account.The system uses the entered G/L account for account determination.For more information, see Free-Text Supplier Invoices (Without Purchase Order Reference) (AccountDetermination).

8. Optional:Account AssignmentUnder Account Assignment in the Account Assignment Type list, select an account assignment type for eachitem. Depending on the account assignment type you select, the system displays further fields for the costobjects. Depending on your business configuration you can enter the name of the employee responsible forthe cost.

Multiple Account AssignmentTo assign an item to more than one account assignment type, click Cost Distribution Details. You candistribute the quantity, amount (only if there is no quantity), or percentage among the different accountassignment types. When you reduce the percentage and press ENTER, the system creates a new tablerow with the remaining quantity, amount, and percentage automatically. To change the accountassignment, select the row and select a new account assignment.When you click Basic View , the system displays a table with the multiple account assignment typesof the invoice or credit memo item.

For more information about the different account assignment types, see Account Assignment in Purchasing [page 26].

For fixed asset procurement, Individual Material has to be selected as the account assignment type. This isonly for Creating Supplier Invoice Without Purchase Order

9. Optional: Distribution of Invoiced QuantitiesTo see how the system has distributed the invoice or credit memo quantities among the items of the precedingdocuments, click Cost Distribution Details.In the Distribution of Invoiced Quantities table, the system displays the item and the item quantity of thepreceding document, such as the goods and services receipt, to which the invoice or credit memo item hasa reference. This means that the invoice or credit memo item settles the quantity of the item of the precedingdocument. You can adapt the quantity of the invoice or credit memo item.

If you enter a quantity that exceeds the open quantity of the reference item (that is, the quantity thathas not yet been invoiced or credited), the system distributes the excess quantity among the otheritems in the table. To view the already invoiced or credited item quantities, click Document Flow .

The last item of the table is always an item for which a reference to a preceding document is missing. To findout more about the missing document, click Exceptions . For more information, see Exception Handling[page 187].You can use this item to add a quantity for which there is no open quantity in the preceding documents.

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10. Optional: Grouping of ItemsIf the items in the invoice or credit memo from your supplier are grouped differently from the items on thisscreen, you can have the system regroup the items based on different criteria by selecting the items andclicking Group .For more information, see Group Invoice and Credit Memo Items.

11. Optional: Distribution of Additional CostsYou can add and distribute additional costs such as freight or insurance, or credit amounts such as cashdiscounts or refund of costs.

1. Click Add Row .2. Enter the type of cost in the Description column.3. Enter at least the tax code and the amount that you want to distribute among the existing invoice and

credit memo items.4. You can also enter a G/L account that the system uses only to classify the expense and not for account

determination.5. Select the Distribute Additional Costs Proportionally or the Distribute Credit Value Proportionally

checkbox.The system proportionally distributes the amount of the additional cost or credit value item amongthe amounts of all other items.

For more information, see Distributing Costs and Quantities Among Invoice and Credit Memo Items[page 205].

12. Optional: Intercompany Invoicing

Configuration SettingsConfiguration settings are normally performed by an administrator. If you do not have the requiredauthorization, contact an administrator.You have enabled Intercompany Supplier Invoicing in your solution configuration. To find this businessoption, go to the Business Configuration work center and choose the Implementation Projects view.Select your implementation project and click Edit Project Scope . In the Scoping step of the project,ensure that Supplier Invoicing is selected within Purchasing.In the Questions step, expand the Purchasing scoping element and select Supplier Invoicing. Select Supplier Invoices and Credit Memos Entry of Supplier Invoices and confirm that you chargeinvoices to partner companies.For more information about defining intercompany posting rules and enabling companies, see DirectPosting to Partner Companies – Configuration Guide.

If your company is part of a group of partner companies, you can charge invoice items that do not have areference to a purchase order to your partner companies, for example, for additional costs.

1. Ensure that you created one invoice item for each invoice amount that you want to charge to a partnercompany even if the original invoice from your supplier contains one invoice item only. This is necessarysince you can assign items that you charge to partner companies to one account assignment typeonly.

2. For each item that you want to charge to a partner company, enter a partner company in the Charge-To Company field.The system creates intercompany receivables and payables automatically without posting a separateinvoice for the partner company. This means that no additional manual postings are required infinancial management.

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The system does not charge taxes to the charge-to companies. For Germany, we thereforerecommend that you use this process only within a tax reporting group.For more information, see Tax Reporting Group.

ExampleYour telephone company sent you an invoice that contains one invoice item with an amount of USD500.00. Since your company is part of a group of partner companies, you only want to pay USD250.00 of the telephone bill and want to charge USD 250.00 to one of your partner companies. Todo this, you create the following two invoice items:

● Item 1: Amount USD 250.00Item 1 will be charged to the buying company.

● Item 2: Amount USD 250.00 and company B entered as charge-to company.Item 2 will be charged to partner company B.

For more information about intercompany processes, see Intercompany Processes in SAP BusinessByDesign.

13. Optional: Installments and RetainagesIf you agreed with your supplier to pay the invoice in installments or if you stipulate a retainage, click PaymentDetails.

● Installments1. To pay the invoice in installments, click Add Installment .

The system initially adds two rows to the table. The first row is always the totals row of the tableand is highlighted in yellow.

2. In the second row, enter the first installment either by changing the due amount or the percentageof the installment.

3. Press ENTER.The system creates a new row with the remaining due amount and percentage automatically. Youcan add more installments, if required.

The system proposes a due date for each installment with a time interval of one monthbetween the individual installments. If you specify a different time interval between the duedates of the installments, the system proposes all due dates of further installmentsaccordingly.

● Retainage1. If you agreed with your supplier to withhold a certain percentage of the total invoice value as a

security deposit until all goods have been delivered or all services have been performed, clickAdd Retainage .

The system initially adds three rows to the table. The first row is always the totals row of the tableand is highlighted in yellow.

2. In the row for the retainage, enter either an amount or a percentage such as 5%.3. Select a reconciliation account type, for example, Retainage for Accounts Payable.

For more information, see Reconciliation Accounts.4. Press ENTER.

The system fills the row for the remaining installment automatically. You can add moreinstallments, if required.

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If payment terms have been specified for the invoice, the system leaves the due date of theinstallment blank and uses the due date of the invoice. If you require individual due datesfor each installment, delete these payment terms.

14. Optional: Discounts, Surcharges, and ReductionsFor more information, see Enter Discounts, Reductions, and Surcharges in Supplier Invoices.

15. Completing the DocumentTo complete the document, you can:

● Check whether the document is complete and correct by clicking Check .The system verifies the data and displays error messages, where necessary. Depending on yoursettings in business configuration, the system creates exceptions for certain errors. To clarifyexceptions, click Show Exceptions .For more information, see Exception Handling [page 187].

● Display which accounts in financial accounting are affected by clicking Actions and choosingSimulate Journal Entry.

● Save a draft of document, which you can complete at another time, by clicking Save .The system automatically creates the Complete Supplier Invoice [page 190] task and displays it inthe Work view of the Supplier Invoicing work center.

● Release the document for payment by clicking Post .Before posting the document, the system verifies the data and displays error messages, wherenecessary. Depending on your settings in business configuration, the system creates exceptions forcertain errors.

If an employee, who is not allowed to post invoicing documents, clicks Post , the system assignsthe status Ready for Posting to the document and creates a task for all employees assigned tothe supplier invoicing org unit and all additional accountants of the org unit to post the invoice.For more information, see the Complete Supplier Invoice [page 190] task.

○ If the system identifies exceptions, it will not post the document and will add it to the Documentswith Exceptions list in the Work view of the Supplier Invoicing work center. You have to clarify theexceptions before the document can be posted. For more information, see Exception Handling[page 187].

○ If the system does not identify any exceptions and an approval process is in place, the system willcreate the Approve Supplier Invoice task and will add the document to the Documents inApproval list in the Work view of the Supplier Invoicing work center.

○ If there are no exceptions and no approval process is in place or the document has already beenapproved, the system will post it and will add it to the list in the Invoices and Credit Memos view.Once the document has been posted, the system automatically creates a journal entry for it,updates the general ledger account, and releases the document for payment.For more information, see Journal Entries [page 178].

AlternativesCreate an Invoice or Credit Memo Using a PDF File and a TXT File

1. Scan the document that you received from your supplier by mail or by fax.Your scanner software creates both a pdf file and a txt file from the scanned invoice or credit memo.

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The SAP Business ByDesign system uses the txt file to propose all invoice or credit memo details, which youcan then check and edit where necessary. Without the txt file, you have to enter all invoice or credit memodetails manually.

2. To upload the pdf file as an attachment, go to the New Scanned Invoice/New Credit Memo screen, clickAdd , then choose File.

3. In the new window, browse for the pdf file, update the document title (optional), choose Original Documentas the document type and click Add .The system uploads the pdf file and displays it on the New Scanned Invoice/New Credit Memo screen.

4. To upload the txt file, click Add , then choose File.5. In the new window, add the txt file, update the document title (optional), choose Plain Invoice Text as the

document type and click Add .6. Click Finish Uploading Scanned Document .

The system retrieves the purchase order ID, the buying company, the supplier, the external document ID, theinvoice or credit memo date, and the items from the txt file.

7. Check whether the proposed details match the details of the scanned invoice or credit memo. Make changeswhere necessary.If, for example, the system has not retrieved the purchase order ID correctly, you can either replace it or addan additional purchase order ID as a reference by clicking Update References .

8. To complete the invoice or credit memo, follow steps 7–15 as described above.

Create an Invoice or Credit Memo from Invoice Template

You have to scope the SADL OWL UI to enable the feature.

1. In Supplier Invoicing go to Invoices and Credit Memos and select Templates from the drop down list. Enterthe details for the required fields and click Save . A new invoice template is created bearing a template ID.

2. Go to New Scanned Invoice under Common Tasks.3. In the New Scanned Invoice screen, go to Template ID in Reference Documents. Select the template ID from

input help and click Update Template .

The update template button will trigger the following changes: ● The update button will replace all existing items of the invoice by available template items and

it will remove all order and delivery references from the invoice header. ● Copy all items from the template invoice and their corresponding price, taxes, note,

attachments, accounting information, and payment information. ● Take over and update the header fields, parties such as supplier, buyer, payee, ship from and

ship to, bill to and customer. It will not take over employee responsible and the dates.

4. The system uploads the data from the template and displays the data in the suitable fields on the New ScannedInvoice screen.

5. Checking Invoice DetailsCheck whether the proposed details match the details of the scanned invoice. Make changes where necessary.

6. To complete the invoice, follow steps 7–15 as described above in Create an Invoice or Credit Memo Using aPDF File.

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6.3.3.6 Export Business Data Using Microsoft Excel®

OverviewYou can export reports and worklists to Microsoft Excel® documents. You can use these documents for furtheranalysis, and in some cases, edit and upload them to the solution.You can export data from a report or from a worklist.

Prerequisites ● You have installed the latest Add-In for Microsoft Excel®. Depending on your solution set-up, you can do this

from the: ○ Self Services Overview in the Home work center ○ Download Center in the Application and User Management work center ○ Download link that is available directly on the user interface

● The settings for your browser must be set correctly. You can review the information about computer settingsby clicking Check My Computer Settings on the logon screen.

● You must be authorized to perform an export to Microsoft Excel®.

Procedure1. Go to the screen with the data you want to export.2. Depending on the type of data, choose one of these options:

● For a report, you can either export a chart or a table. To do so, select the report, and click Switch toChart or Switch to Table.

● For a worklist, select the worklist and click Go.3. Click Export , then choose To Microsoft Excel.4. Optional: Personalizing your excel export

1. To select the columns in your exported excel, do the following:a. In the title bar, click Personalize This screen b. In the side panel, select Display Settings.c. In the Display Settings dialog box, you can export all the columns in the view by selecting All in

the Export Columns field

The default value for this field is Visible, which exports only the currently displayed columns.

2. To select the language for your excel export, do the followinga. In the Display Settings dialog box, set the Language Selection field to Show and click OK

b. Click Save .c. Click Export , then choose To Microsoft Excel®d. Select a language in the dialog box that opens.

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The column selection preference in this dialog box allows you to override the personalizedsetting. This selection is valid for the current export only.

5. Select the template in the dialog box that is displayed.

● If there is only one template that has the logged in language variant, then the export will beperformed in the logged in language, and no user interaction is required.

● If there is only one template in the system for this export scenario, but the logged in languagevariant is not available, then export will be performed in the English language.

● If there is more than one template in the system for this export scenario, the Template List dialogbox is displayed. In this dialog, you can select the Microsoft Excel template that you want to usefor the export. The template will dictate how your exported data will be formatted. The MicrosoftExcel version that is relevant for each template is displayed.

6. Click Download.7. A message shows that you can open or save the file which contains the data that you have just exported from

the solution. Click Open or Save depending on what you want to do with the exported data.Depending on whether you click Open or Save, there are two possible results:

● If you click Open, a worksheet opens with the data in Microsoft Excel. The file has a temporary name,but it is not saved. You can use all the functions of Microsoft Excel to organize the data and to savethat worksheet.

● If you click Save, a Save As dialog box opens. You can specify an appropriate file name and a locationto save the exported Microsoft Excel file to. A message will inform you when the download hascompleted successfully.You can later navigate to the location where you have saved the template and open it .

6.3.3.7 Create an Invoice or Credit Memo Using Microsoft Excel®

OverviewIn the Invoice Entry view of the Supplier Invoicing work center, you can create invoices or credit memos by enteringthem in a predefined Microsoft Excel template and uploading them to the SAP Business ByDesign system.

PrerequisitesYou have purchased and installed the add-in for uploading supplier invoices using Microsoft Excel in the SAP BusinessByDesign Store.You have installed the latest Add-In for Microsoft Excel. Depending on your solution set-up, you can do this from theSelf Services Overview in the Home work center, from the Download Center in the Application and UserManagement work center, or from the Download link that is available directly on the user interface.Also, the settings for your browser must be set correctly. You can check this by clicking Check My ComputerSettings on the logon screen.Configuration Settings

Configuration settings are usually performed by an administrator. If you do not have the requiredauthorization, contact your administrator.

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Uploading supplier invoices and credit memos using Microsoft Excel is activated in your solution configuration. Tofind this business option, go to the Business Configuration work center and choose the Implementation Projects view.Select your implementation project and click Edit Project Scope . In the Scoping step of the project, ensure thatSupplier Invoicing is selected within Purchasing.In the Questions step, expand the Purchasing scoping element and select Supplier Invoicing. Select Supplier Invoicesand Credit Memos and confirm the question related to Upload of Supplier Invoices Using Microsoft Excel Template.

StepsIn the Invoice Entry view of the Supplier Invoicing work center, click New , then choose Import from MicrosoftExcel.Get the Template

1. Select the template.Choose the template in the required language and click Download.

You can choose any language that you have selected during scoping. If you have selected only onelanguage during scoping, you will not get a selection of language versions to choose from.

2. Decide what you want to do with the template. Choose one of the following options: ● If you want to use the template only once, you can open the template without saving it. Click Open. ● If you want to save the template so that you can use it again, choose a location to save the file to, enter

an appropriate file name, and click Save. Then click Open.

If you have previously downloaded and saved this template on your computer, navigate to the location whereyou have saved the template, and open it.

Log on to the solution from Microsoft Excel1. In the SAP Add-In ribbon in Microsoft Excel, click Logon.

If the SAP Add-In ribbon is not displayed, check to make sure that the Add-In for Microsoft Excel hasbeen installed correctly (see Prerequisites in this document).

A dialog box opens where you can enter the logon details. The system URL is proposed automatically. Thesystem URL is the URL of the system that you are working with.

2. Enter your user ID and your password, and click Logon.

After initial logon to the system, the ribbon text is changed from SAP Add-In to the name of yoursolution.

Enter Details in the Microsoft Excel Template

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Note the following: ● The Microsoft Excel template is presented with a number of rows where you can enter or copy your

data. If you need more, add the number of rows you need before you start entering or copying yourdata.

● Ensure that mandatory fields (those marked with an asterisk) are filled. ● To help you fill in the details:

○ Some fields have dropdown lists. ○ In some fields you can search the system for data, for example, countries. Place the cursor on the

field, and click Lookup in your solution's tool bar or ribbon to search the system. A search field isavailable in the Lookup dialog box that appears. When you start to type text in the search field, therelevant entries are filtered in the ID and Description columns, meaning that you do not have toscroll through the whole list. If the Lookup button is not active in the ribbon or toolbar, then it isnot possible to perform a search.

Enter or copy the invoice or credit memo information into the rows and in the appropriate columns.The following table describes columns for which you require more information:

Invoice/Credit Memo HeaderData

Description

Document IDDo not enter anything in this field.

The system assigns a document ID automatically once the invoice or credit memo hasbeen created in the SAP Business ByDesign system.

Document Date, Receipt Date,Posting Date

Use the following format: DD.MM.YYYY

Payment Terms Enter an ID, such as 0001.

Bill-To, Bill-From, Ship-To, Ship-From

Enter an ID.

Invoice Entry Select whether you want to enter the price and the amount of each item gross or net. Thisselection is mandatory.

Data Entry Select whether you want the system to save or post the invoice or credit memo once youhave uploaded the Microsoft Excel file to the SAP Business ByDesign system.

Item Data Description

Product Type Select whether the item is a material or a service. This selection is mandatory.

Tax Country Enter a country code such as DE or US.

Net Price, Gross Price Enter either the gross or the net price depending on your selection in the Invoice Entrycolumn.

Net Amount, Gross Amount Enter either the gross or the net amount depending on your selection in the Invoice Entrycolumn.

Distribute Additional CostsProportionally

Select whether you want the system to distribute the item amount proportionally amongthe amounts of all other regular invoice or credit memo items, for example for freight andinsurance (item type: invoice) or cash discounts and refund of costs (item type: creditmemo).

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Charge-To Company If your company is part of a group of partner companies and the posting to partnercompanies has been enabled in business configuration, you can charge invoice items toone of your partner companies, for example, for utilities. To do this, enter a partnercompany in this column.The system creates intercompany receivables and payables automatically withoutposting a separate invoice for the partner company. This means that no additional manualpostings are required in Financial Management.

You can only charge an invoice item to a partner company if the item does not havea reference to a purchase order.The system does not charge taxes to the charge-to companies. For Germany, wetherefore recommend that you use this process only within a tax reporting group.

G/L Account Enter an ID.

Service Order, Cost Center,Individual Material, Project Task,or Sales Order

Enter an ID.For each item, enter one account assignment type only.

Service Performer, Requester,Product Recipient, Customer

Enter an ID.

Ship-To Location, Ship-FromLocation

Enter an ID.

Save Your Data1. After you have finished entering all the data, save the Microsoft Excel file.2. Click Save Data to .

A dialog box opens, informing you that the data is being saved to the solution.After the upload, a message informs you that your data has been saved in the solution.

If you do not provide all the required information, or if you provide incorrect information, somerecords will not be saved. Error messages will highlight the problems so that you can correct themand save the data again.

3. You can then log off by clicking Logoff .

ResultThe new invoices and credit memos are saved or posted in the SAP Business ByDesign system.To display the invoices and credit memos that you created using the Microsoft Excel template, go to the Invoicesand Credit Memos view of the Supplier Invoicing work center. Under Show select All Documents and clickAdvanced. Under Entry Method, select External application and click Go .If you need to make changes to these invoices or credit memos, you must change them directly in the system.

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6.4 Invoices and Credit Memos View

6.4.1 Quick Guide for Invoices and Credit Memos (in SupplierInvoicing)

The Invoices and Credit Memos view of the Supplier Invoicing work center gives you an overview of all invoices,customs invoices, credit memos, and down payment requests that have been posted, paid, or canceled. Using thesedocuments, you can create follow-up documents, such as subsequent credits or debits, credit memos, andcancellation documents. You can also use the existing invoicing documents as templates for new invoices, creditmemos, and down payment requests by copying them.

Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

This document is valid for the enhanced Invoices and Credit Memos view of the Supplier Invoicing work center.The enhanced views have the following features:

● The various buttons on the views are on the right side of the screen. ● Advanced search is represented by an icon on the left side of the screen. ● You can view the columns that can be filtered by clicking the Show Filter icon.

In the enhanced Invoices and Credit Memos view, you have the option of posting or canceling several documents atonce. Select the various documents and then click Actions and select Quick Post or Quick Cancel.For all the selected invoices the status column is highlighted in orange and a background job is run which will postor cancel the documents. The documents are not locked during this process, and can be edited, but in case you doso, the document that is opened will no longer be a part of the background job that is running and will not be postedor canceled.To have the enhanced view, the Object Work List- Enhanced View business option must be enabled in your solutionconfiguration. To find this business option, go to the Business Configuration work center and choose theImplementation Projects view. Select your implementation project and click Edit Project Scope . In the Scoping stepof the project, ensure that System Management is selected within Built- in Services and Support.In the Questions step, expand the Built- in Services and Support scoping element and select User Interface ListMode. Select and answer the questions related to Object Work List- Enhanced View.

Business Background

Supplier Invoice TypesIn the Supplier Invoicing work center, you can use several main document types to record purchasing transactionsbetween your company and its suppliers. Supplier Invoicing can be based on underlying documentation such aspurchase orders and purchasing contracts, or as standalone transactions.For more information, see Supplier Invoice Types [page 147].

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Business Scenario: Procure-to-Pay (Stock)The Procure-to-Pay (Stock) scenario enables you to purchase stock products based on a requirement that can begenerated from a planning system, such as a Materials Requirements Planning (MRP) system.It covers all stages of the procurement process, from demand planning and creation of a purchase order, throughautomatic or manual assignment of sources of supply, sending the purchase order to a supplier, to goods andservices receipt, invoice verification, and payment.For more information, see Procure-to-Pay (Stock).

Business Scenario: Procure-to-Pay (Non-Stock)The Procure-to-Pay (Non-Stock) business scenario allows you to purchase non-stock materials, such as officematerial, engineering sample material, or fixed assets.This scenario can be triggered by employees or assistants who create shopping carts, by project teams who neednon-stock materials for projects, by buyers directly in purchase orders or requests for quotation (RFQ), or byaccounts payable accountants in supplier invoices. Deliveries can be confirmed centrally or decentrally. Costs forproject-related non-stock materials are directly transferred to project tasks in financial accounting.If a catalog, purchasing contract, or list price for a non-stock material exists, a purchase order can be createdautomatically. If no source of supply exists, you can send RFQs to determine appropriate suppliers.With this scenario you can also order non-stock materials to cover customer demands by using sales orders orservice orders to trigger third-party procurement.For more information, see Procure-to-Pay (Non-Stock).

Business Scenario: Procure-to-Pay (Services)The Procure-to-Pay (Services) business scenario allows you to procure services, such as consulting and trainingservices, temporary labor, or engineering services. It can be triggered by employees who create shopping carts forservices, by project managers who need a certain service for their project, or directly by the buyer using a purchaseorder.Project-related services are usually recorded in a time sheet and the costs are directly transferred to the projecttasks in financial accounting. If a purchasing contract or a list price for the ordered service exists, the purchase ordercan be created automatically. If no source of supply exists, a request for quotation can be sent out to determine anappropriate supplier.Alternatively with this scenario, it is possible to order external resources to provide services for customer demandsthat cannot be fulfilled by internal employees. In this case, the procurement process is triggered when a sales orderor a service order has been created.For more information, see Procure-to-Pay (Services).

Tasks

Create a Subsequent Credit or DebitFor information about this task, see here [page 246].

Create a Credit Memo for an InvoiceFor information about this task, see here [page 242].

Cancel an Invoicing DocumentFor information about this task, see here [page 250].

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Export Invoicing Documents to Microsoft Excel®For information about this task, see here [page 198].

Create a Task, Notification, or AlertFor information about this task, see here [page 195].

Create a Clarification RequestFor information about this task, see here [page 197].

Create and Use a TemplateThis feature is only available for the enhanced Invoice and Credit Memos view.

Configuration settings are usually performed by an administrator. If you do not havethe required authorization, contact your administrator.

To have the enhanced view, the Object Work List- Enhanced View business option mustbe enabled in your solution configuration. To find this business option, go to theBusiness Configuration work center and choose the Implementation Projects view.Select your implementation project and click Edit Project Scope . In the Scoping step ofthe project, ensure that System Management is selected within Built- in Services andSupport.In the Questions step, expand the Built- in Services and Support scoping element andselect User Interface List Mode. Select and answer the questions related to Object WorkList- Enhanced View.

New supplier invoices are often very similar to existing ones. Templates can be created for thevarious supplier invoices to reduce the work involved in invoice creation.You can create templates for invoices, credit memos, custom invoices, and down paymentrequests in the following ways:

● In the Show field select Templates. Click New and select the template you need. ● In the Show field select any of the options other than Templates. Select a desired

invoice, click New and select Template.The new template will be a copy of the selected document.

● To create a new template from an existing document, from the quick activity screen ofan invoice, click New and select Template. You can also open the document, click

View All , click New and then select Template. ● You can create an invoice template by starting the New Invoice Template common task

from the Supplier Invoicing work center

You can view, edit, and delete the templates under Invoice and Credit Memos Show Templates .

To use the template, navigate to Invoice and Credit Memos Show Templates , selectthe required template and click New Document from Template.

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6.4.2 Configuration: Supplier Invoice Scanning Keyword Settings

Overview

This document contains details and instructions regarding configuration settings. Such settings arenormally performed by an administrator. If you do not have the required authorization, contact anadministrator.

To find this activity, go to the Business Configuration Implementation Projects view. Select your implementationproject and click Open Activity List . Select the Fine-Tune phase, then select the activity from the activity list.You can use this configuration activity to define and maintain search terms for keywords for scanned supplier invoice.These search terms will be used by the system during scanning of text file to propose information in supplier invoicing.You can add terms for the following key words:

● Company ● Document Type as Credit Memo ● Document Type as Invoice ● Document Number on Supplier Side ● Order Number (Purchase Order in Buyer’s Side)

You can add search terms for these key words for different languages. You can add a search term by selecting aparticular keyword and by setting it to activate. If you do not want a search term for the particular keyword to beused to fetch information, you can set it to deactivate. You can add or delete a keyword with Add or Removebutton.

You cannot remove the keywords available by default.

6.4.3 Tasks

6.4.3.1 Create a Credit Memo for an Invoice

OverviewIf you return delivered goods for which an invoice has already been posted or if you have to correct a posted invoice,your supplier will send you a credit memo by mail or by fax. You can then create the credit memo for the postedinvoice in the system.

When you create a credit memo for an invoice, the system changes both the quantity and the amount of theoriginal invoice.If you only want to change the amount of the original invoice, create a subsequent credit.For more information, see Create a Subsequent Credit or Debit [page 246].

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Procedure1. Go to Supplier Invoicing Invoices and Credit Memos .

To display a list of posted and paid invoices, choose Invoices — Finished Last 7 Days. If the invoice has notbeen posted yet, choose All Documents.Alternatively, you can also search for an invoice, for example, by entering the invoice ID in the Find field, or byusing the advanced filter and filtering for certain criteria, such as the invoicing status.

2. Select an invoice, click New , then choose Credit Memo.The system proposes the details of the posted or paid invoice in the New Credit Memo screen.

3. General Information1. Enter at least the external document ID and the date.2. Optional: You can add the Overall Discount field.

Go to Personalize This Screen , choose General Information, select Overall Net Discount or OverallGross Discount, and save.

3. Optional: You can choose to either enter the total gross amount and the total tax amount manually orto have the system fill these fields automatically once you added items by clicking Actions , thenchoosing Calculate Total Amounts.

4. Check the details and make changes, such as changing the quantity, based on the credit memo you receivedfrom your supplier.

5. Optional: Distribution of Invoiced QuantitiesTo see how the system has distributed the invoice or credit memo quantities among the items of the precedingdocuments, click Cost Distribution Details.In the Distribution of Invoiced Quantities table, the system displays the item and the item quantity of thepreceding document, such as the goods and services receipt, to which the invoice or credit memo item hasa reference. This means that the invoice or credit memo item settles the quantity of the item of the precedingdocument. You can adapt the quantity of the invoice or credit memo item.

If you enter a quantity that exceeds the open quantity of the reference item (that is, the quantity thathas not yet been invoiced or credited), the system distributes the excess quantity among the otheritems in the table. To view the already invoiced or credited item quantities, click Document Flow .

The last item of the table is always an item for which a reference to a preceding document is missing. To findout more about the missing document, click Exceptions . For more information, see Exception Handling[page 187].You can use this item to add a quantity for which there is no open quantity in the preceding documents.

6. Optional:ItemsUnder Items, click Add Row .You can add invoice or credit memo items in the following ways:

● Enter the product ID, quantity, and price.The system finds the corresponding product category, product description, and tax code, andcalculates the tax amount for each tax code, which you can view under Tax Details. The system derivesthe G/L account or G/L account (origin) based on the product. To see which G/L account or G/Laccount (origin) the system has determined, you can simulate the journal entry by clicking

Actions , then choosing Simulate Journal Entry once you have completed the invoice or credit memo.

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For more information, see Tax Determination [page 152] and Automatic Account Determination[page 176].

● If you cannot find any suitable product in the system, enter the product category, product type, productdescription, quantity, and price.The system finds the corresponding tax code and calculates the tax amount for each tax code, whichyou can view under Tax Details. The system derives the G/L account or G/L account (origin) based onthe product category. To see which G/L account or G/L account (origin) the system has determined,you can simulate the journal entry by clicking Actions , then choosing Simulate Journal Entry onceyou have completed the invoice or credit memo.For more information, see Tax Determination [page 152] and Automatic Account Determination[page 176].

● If you cannot find any suitable product or product category in the system, enter the product type,product description, tax code, quantity, price, and G/L account.The system uses the entered G/L account for account determination.For more information, see Free-Text Supplier Invoices (Without Purchase Order Reference) (AccountDetermination).

7. Optional:Account AssignmentUnder Account Assignment in the Account Assignment Type list, select an account assignment type for eachitem. Depending on the account assignment type you select, the system displays further fields for the costobjects. Depending on your business configuration you can enter the name of the employee responsible forthe cost.

Multiple Account AssignmentTo assign an item to more than one account assignment type, click Cost Distribution Details. You candistribute the quantity, amount (only if there is no quantity), or percentage among the different accountassignment types. When you reduce the percentage and press ENTER, the system creates a new tablerow with the remaining quantity, amount, and percentage automatically. To change the accountassignment, select the row and select a new account assignment.When you click Basic View , the system displays a table with the multiple account assignment typesof the invoice or credit memo item.

For more information about the different account assignment types, see Account Assignment in Purchasing [page 26].

For fixed asset procurement, Individual Material has to be selected as the account assignment type. This isonly for Creating Supplier Invoice Without Purchase Order

8. Optional: Grouping of ItemsIf the items in the invoice or credit memo from your supplier are grouped differently from the items on thisscreen, you can have the system regroup the items based on different criteria by selecting the items andclicking Group .For more information, see Group Invoice and Credit Memo Items.

9. Optional: Distribution of Additional CostsYou can add and distribute additional costs such as freight or insurance, or credit amounts such as cashdiscounts or refund of costs.

1. Click Add Row .2. Enter the type of cost in the Description column.3. Enter at least the tax code and the amount that you want to distribute among the existing invoice and

credit memo items.

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4. You can also enter a G/L account that the system uses only to classify the expense and not for accountdetermination.

5. Select the Distribute Additional Costs Proportionally or the Distribute Credit Value Proportionallycheckbox.The system proportionally distributes the amount of the additional cost or credit value item amongthe amounts of all other items.

For more information, see Distributing Costs and Quantities Among Invoice and Credit Memo Items[page 205].

10. Completing the DocumentTo complete the document, you can:

● Check whether the document is complete and correct by clicking Check .The system verifies the data and displays error messages, where necessary. Depending on yoursettings in business configuration, the system creates exceptions for certain errors. To clarifyexceptions, click Show Exceptions .For more information, see Exception Handling [page 187].

● Display which accounts in financial accounting are affected by clicking Actions and choosingSimulate Journal Entry.

● Save a draft of document, which you can complete at another time, by clicking Save .The system automatically creates the Complete Supplier Invoice [page 190] task and displays it inthe Work view of the Supplier Invoicing work center.

● Release the document for payment by clicking Post .Before posting the document, the system verifies the data and displays error messages, wherenecessary. Depending on your settings in business configuration, the system creates exceptions forcertain errors.

If an employee, who is not allowed to post invoicing documents, clicks Post , the system assignsthe status Ready for Posting to the document and creates a task for all employees assigned tothe supplier invoicing org unit and all additional accountants of the org unit to post the invoice.For more information, see the Complete Supplier Invoice [page 190] task.

○ If the system identifies exceptions, it will not post the document and will add it to the Documentswith Exceptions list in the Work view of the Supplier Invoicing work center. You have to clarify theexceptions before the document can be posted. For more information, see Exception Handling[page 187].

○ If the system does not identify any exceptions and an approval process is in place, the system willcreate the Approve Supplier Invoice task and will add the document to the Documents inApproval list in the Work view of the Supplier Invoicing work center.

○ If there are no exceptions and no approval process is in place or the document has already beenapproved, the system will post it and will add it to the list in the Invoices and Credit Memos view.Once the document has been posted, the system automatically creates a journal entry for it,updates the general ledger account, and releases the document for payment.For more information, see Journal Entries [page 178].

See AlsoCreate an Invoice or Credit Memo with Reference to Preceding Documents [page 212]Create an Invoice or Credit Memo Without a Purchase Order [page 217]

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6.4.3.2 Create a Subsequent Credit or Debit

OverviewYou create a subsequent debit or credit when other costs are to be charged or credited, for example, freight costsfor products that have already been invoiced. A subsequent debit is a follow-up document that refers to a postedinvoice or credit memo and increases the debt on the invoice or reduces the credit on the credit memo. A subsequentcredit has the opposite effect. It is a follow-up document that refers to a posted invoice or credit memo and reducesthe debt on the invoice or increases the credit on the credit memo.

When you create a subsequent credit or debit, the system only changes the amount of the original invoice orcredit memo.If you want to change both the quantity and the amount of the original invoice or credit memo item, you haveto create a credit memo.For more information, see Create a Credit Memo for an Invoice [page 242].

Procedure1. Go to Supplier Invoicing Invoices and Credit Memos .

To display a list of all posted or paid invoices and credit memos, choose one of the following: ● Invoices — Finished Last 7 Days ● Credit Memos — Finished Last 7 Days

Alternatively, you can also search for an invoice or credit memo, for example, by entering the invoice or creditmemo ID in the Find field, or by using the advanced filter and filtering for certain criteria.

2. Select the invoice or credit memo for which you want to create a subsequent debit or credit, click New ,then choose Subsequent Debit or Subsequent Credit.The system proposes the details of the invoice or credit memo for which you want to create a subsequentdebit or credit.

3. General Information1. Enter at least the external document ID and the date.2. Optional: You can add the Overall Discount field.

Go to Personalize This Screen , choose General Information, select Overall Net Discount or OverallGross Discount, and save.

3. Optional: You can choose to either enter the total gross amount and the total tax amount manually orto have the system fill these fields automatically once you added items by clicking Actions , thenchoosing Calculate Total Amounts.

4. Under Items, select the item you want to edit and enter the new tax code, the gross/net price, the gross/netamount, and other information as required.

5. Optional: Distribution of Invoiced QuantitiesTo see how the system has distributed the invoice or credit memo quantities among the items of the precedingdocuments, click Cost Distribution Details.In the Distribution of Invoiced Quantities table, the system displays the item and the item quantity of thepreceding document, such as the goods and services receipt, to which the invoice or credit memo item has

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a reference. This means that the invoice or credit memo item settles the quantity of the item of the precedingdocument. You can adapt the quantity of the invoice or credit memo item.

If you enter a quantity that exceeds the open quantity of the reference item (that is, the quantity thathas not yet been invoiced or credited), the system distributes the excess quantity among the otheritems in the table. To view the already invoiced or credited item quantities, click Document Flow .

The last item of the table is always an item for which a reference to a preceding document is missing. To findout more about the missing document, click Exceptions . For more information, see Exception Handling[page 187].You can use this item to add a quantity for which there is no open quantity in the preceding documents.

6. Optional:ItemsUnder Items, click Add Row .You can add invoice or credit memo items in the following ways:

● Enter the product ID, quantity, and price.The system finds the corresponding product category, product description, and tax code, andcalculates the tax amount for each tax code, which you can view under Tax Details. The system derivesthe G/L account or G/L account (origin) based on the product. To see which G/L account or G/Laccount (origin) the system has determined, you can simulate the journal entry by clicking

Actions , then choosing Simulate Journal Entry once you have completed the invoice or credit memo.For more information, see Tax Determination [page 152] and Automatic Account Determination[page 176].

● If you cannot find any suitable product in the system, enter the product category, product type, productdescription, quantity, and price.The system finds the corresponding tax code and calculates the tax amount for each tax code, whichyou can view under Tax Details. The system derives the G/L account or G/L account (origin) based onthe product category. To see which G/L account or G/L account (origin) the system has determined,you can simulate the journal entry by clicking Actions , then choosing Simulate Journal Entry onceyou have completed the invoice or credit memo.For more information, see Tax Determination [page 152] and Automatic Account Determination[page 176].

● If you cannot find any suitable product or product category in the system, enter the product type,product description, tax code, quantity, price, and G/L account.The system uses the entered G/L account for account determination.For more information, see Free-Text Supplier Invoices (Without Purchase Order Reference) (AccountDetermination).

7. Optional:Account AssignmentUnder Account Assignment in the Account Assignment Type list, select an account assignment type for eachitem. Depending on the account assignment type you select, the system displays further fields for the costobjects. Depending on your business configuration you can enter the name of the employee responsible forthe cost.

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Multiple Account AssignmentTo assign an item to more than one account assignment type, click Cost Distribution Details. You candistribute the quantity, amount (only if there is no quantity), or percentage among the different accountassignment types. When you reduce the percentage and press ENTER, the system creates a new tablerow with the remaining quantity, amount, and percentage automatically. To change the accountassignment, select the row and select a new account assignment.When you click Basic View , the system displays a table with the multiple account assignment typesof the invoice or credit memo item.

For more information about the different account assignment types, see Account Assignment in Purchasing [page 26].

For fixed asset procurement, Individual Material has to be selected as the account assignment type. This isonly for Creating Supplier Invoice Without Purchase Order

8. Optional: Distribution of Additional CostsYou can add and distribute additional costs such as freight or insurance, or credit amounts such as cashdiscounts or refund of costs.

1. Click Add Row .2. Enter the type of cost in the Description column.3. Enter at least the tax code and the amount that you want to distribute among the existing invoice and

credit memo items.4. You can also enter a G/L account that the system uses only to classify the expense and not for account

determination.5. Select the Distribute Additional Costs Proportionally or the Distribute Credit Value Proportionally

checkbox.The system proportionally distributes the amount of the additional cost or credit value item amongthe amounts of all other items.

For more information, see Distributing Costs and Quantities Among Invoice and Credit Memo Items[page 205].

9. Optional: Installments and RetainagesIf you agreed with your supplier to pay the invoice in installments or if you stipulate a retainage, click PaymentDetails.

● Installments1. To pay the invoice in installments, click Add Installment .

The system initially adds two rows to the table. The first row is always the totals row of the tableand is highlighted in yellow.

2. In the second row, enter the first installment either by changing the due amount or the percentageof the installment.

3. Press ENTER.The system creates a new row with the remaining due amount and percentage automatically. Youcan add more installments, if required.

The system proposes a due date for each installment with a time interval of one monthbetween the individual installments. If you specify a different time interval between the duedates of the installments, the system proposes all due dates of further installmentsaccordingly.

● Retainage

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1. If you agreed with your supplier to withhold a certain percentage of the total invoice value as asecurity deposit until all goods have been delivered or all services have been performed, click

Add Retainage .The system initially adds three rows to the table. The first row is always the totals row of the tableand is highlighted in yellow.

2. In the row for the retainage, enter either an amount or a percentage such as 5%.3. Select a reconciliation account type, for example, Retainage for Accounts Payable.

For more information, see Reconciliation Accounts.4. Press ENTER.

The system fills the row for the remaining installment automatically. You can add moreinstallments, if required.

If payment terms have been specified for the invoice, the system leaves the due date of theinstallment blank and uses the due date of the invoice. If you require individual due datesfor each installment, delete these payment terms.

10. Optional: Discounts, Surcharges, and ReductionsFor more information, see Enter Discounts, Reductions, and Surcharges in Supplier Invoices.

11. Completing the DocumentTo complete the document, you can:

● Check whether the document is complete and correct by clicking Check .The system verifies the data and displays error messages, where necessary. Depending on yoursettings in business configuration, the system creates exceptions for certain errors. To clarifyexceptions, click Show Exceptions .For more information, see Exception Handling [page 187].

● Display which accounts in financial accounting are affected by clicking Actions and choosingSimulate Journal Entry.

● Save a draft of document, which you can complete at another time, by clicking Save .The system automatically creates the Complete Supplier Invoice [page 190] task and displays it inthe Work view of the Supplier Invoicing work center.

● Release the document for payment by clicking Post .Before posting the document, the system verifies the data and displays error messages, wherenecessary. Depending on your settings in business configuration, the system creates exceptions forcertain errors.

If an employee, who is not allowed to post invoicing documents, clicks Post , the system assignsthe status Ready for Posting to the document and creates a task for all employees assigned tothe supplier invoicing org unit and all additional accountants of the org unit to post the invoice.For more information, see the Complete Supplier Invoice [page 190] task.

○ If the system identifies exceptions, it will not post the document and will add it to the Documentswith Exceptions list in the Work view of the Supplier Invoicing work center. You have to clarify theexceptions before the document can be posted. For more information, see Exception Handling[page 187].

○ If the system does not identify any exceptions and an approval process is in place, the system willcreate the Approve Supplier Invoice task and will add the document to the Documents inApproval list in the Work view of the Supplier Invoicing work center.

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○ If there are no exceptions and no approval process is in place or the document has already beenapproved, the system will post it and will add it to the list in the Invoices and Credit Memos view.Once the document has been posted, the system automatically creates a journal entry for it,updates the general ledger account, and releases the document for payment.For more information, see Journal Entries [page 178].

6.4.3.3 Cancel an Invoicing Document

OverviewYou can cancel posted or paid invoices or credit memos and posted down payment requests. The systemautomatically creates a cancellation document for each canceled invoicing document. The original invoicingdocument remains in the system and has the status Canceled.To cancel an invoicing document that has not been posted, void the document. Canceling an invoicing document isonly possible once it has been posted.

You cannot cancel the following types of documents: ● Paid down payment requests

We recommend that you post a credit memo without reference since a reference to a down paymentrequest is not possible.

● Cancellation documentsWe recommend that you copy the original invoicing document that you canceled and post the copy.

Procedure1. To display a list of posted or paid invoicing documents in the Invoices and Credit Memos view of the Supplier

Invoicing work center, choose one of the following: ● Invoices - Finished Last 7 Days ● Credit Memos - Finished Last 7 Days ● Down Payment Requests - Finished Last 7 Days ● Customs Invoices - Finished Last 7 Days

Alternatively, you can also search for an invoicing document, for example by entering the ID in the Find field,or by using the advanced filter search and filtering for certain criteria, such as the document type.

2. To cancel an invoice or credit memo that has already been paid, you first have to reverse the clearing in thePayables work center. For more information, see Canceling a Supplier Invoice.

3. Select an invoicing document and click Cancel Document .The system proposes the details of the invoicing document in the New Cancellation quick activity.

4. Check the details of the invoicing document for which you want to create a cancellation document.5. If required, enter a description and change the proposed posting date of the cancellation document.6. To complete the cancellation document, you can:

● Save a draft of the cancellation document, which you can complete at another time, by clickingSave .

The system automatically creates the Complete Supplier Invoice [page 190] task and displays it inthe Work view of the Supplier Invoicing work center.

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● Release the cancellation document by clicking Post .

If an employee, who is not allowed to post cancellation documents, clicks Post , the systemassigns the status Ready for Posting to the document and creates a task for all employeesassigned to the supplier invoicing org unit and all additional accountants of the org unit to postthe cancellation document.For more information, see the Complete Supplier Invoice [page 190] task.

If an approval process is in place, the system will create the Approve Supplier Invoice task and will addthe cancellation document to the Documents in Approval list in the Work view of the Supplier Invoicingwork center.If no approval process is in place or the document has already been approved, the system posts thedocument and adds it to the list in the Invoices and Credit Memos view. The original invoicing documentthat you canceled also remains in the list in the Invoices and Credit Memos view and has the statusCanceled.Once the cancellation document has been posted, the system generates a reversal journal entry foreach original journal entry in all affected sets of books.

If the cancellation document has been created for an ERS invoice or credit memo, thecancellation document is sent to the supplier using the defined output channel.

6.5 Evaluated Receipt Settlements View

6.5.1 Quick Guide for Evaluated Receipt Settlements (in SupplierInvoicing)

In the Evaluated Receipt Settlements view of the Supplier Invoicing work center, you can schedule evaluated receiptsettlement (ERS) runs to automatically create invoices and credit memos on behalf of your suppliers, which meansthat your suppliers do not have to send you invoices or credit memos anymore. The view also provides you with anoverview of all finished runs and their status as well as the invoices and credit memos that the system created duringthe run. In addition to scheduling new runs, you can also reschedule or cancel upcoming runs and display theapplication log, in which the system records all information about an ERS run.

Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

This document is valid for the enhanced Evaluated Receipt Settlements view of the Supplier Invoicing work center.The enhanced views have the following features:

● The various buttons on the views are on the right side of the screen. ● Advanced search is represented by an icon on the left side of the screen. ● You can view the columns that can be filtered by clicking the Show Filter icon.

To have the enhanced view, the Object Work List- Enhanced View business option must be enabled in your solutionconfiguration. To find this business option, go to the Business Configuration work center and choose the

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Implementation Projects view. Select your implementation project and click Edit Project Scope . In the Scoping stepof the project, ensure that System Management is selected within Built- in Services and Support.In the Questions step, expand the Built- in Services and Support scoping element and select User Interface ListMode. Select and answer the questions related to Object Work List- Enhanced View.

Business Background

Supplier Invoice Processing Using Evaluated Receipt SettlementsYour company may deal with a number of suppliers on a regular basis. In order to streamline the invoicing process,you can arrange to pay these suppliers using evaluated receipt settlements (ERS). This means that these suppliersdo not need to send you supplier invoices; instead the system uses the prices in purchase orders and the quantitiesin goods and services receipts or inbound deliveries to create and post supplier invoices automatically on behalf ofthe suppliers. The suppliers are then notified of the value of the invoice or credit memo created on their behalf.

If your company does not enter purchase orders, goods and services receipts, or other preceding purchasedocuments into the system, this process is not relevant for your requirements.

For more information, see Supplier Invoice Processing Using Evaluated Receipt Settlements [page 255].

Mass Data Runs (MDR)A Mass Data Run (MDR) is the automatic mass processing of a task or a business transaction. MDRs enable massprocessing of business data and are used in business processes, for example, invoice runs, payment authorizationruns, or balance confirmation runs. When a user schedules an MDR the system represents it as a background job.During scoping, it is possible to provide default variants of the MDRs.MDRs are created and maintained in the work centers. Using the Job Scheduler, users schedule the run to executeonce or regularly at specified times.In the Background Jobs view of theApplication and User Management work center, you can monitor and rescheduleMDR jobs that are created by users in other work centers.For more information, see Mass Data Runs (MDR) [page 257].

Automation of Supplier Relationship ManagementTo save you time in your day-to-day business operations, certain functions within the Supplier RelationshipManagement software in the solution can be automated. This automated functionality may require you to makeselections during the configuration of your solution, or during fine-tuning, where you can define the relevant settings.The system makes decisions based on these predefined settings, and processes the relevant transactionsautomatically.For more information, see Automation of Supplier Relationship Management [page 17].

Business Scenario: Procure-to-Pay (Stock)The Procure-to-Pay (Stock) scenario enables you to purchase stock products based on a requirement that can begenerated from a planning system, such as a Materials Requirements Planning (MRP) system.It covers all stages of the procurement process, from demand planning and creation of a purchase order, throughautomatic or manual assignment of sources of supply, sending the purchase order to a supplier, to goods andservices receipt, invoice verification, and payment.For more information, see Procure-to-Pay (Stock).

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Business Scenario: Procure-to-Pay (Non-Stock)The Procure-to-Pay (Non-Stock) business scenario allows you to purchase non-stock materials, such as officematerial, engineering sample material, or fixed assets.This scenario can be triggered by employees or assistants who create shopping carts, by project teams who neednon-stock materials for projects, by buyers directly in purchase orders or requests for quotation (RFQ), or byaccounts payable accountants in supplier invoices. Deliveries can be confirmed centrally or decentrally. Costs forproject-related non-stock materials are directly transferred to project tasks in financial accounting.If a catalog, purchasing contract, or list price for a non-stock material exists, a purchase order can be createdautomatically. If no source of supply exists, you can send RFQs to determine appropriate suppliers.With this scenario you can also order non-stock materials to cover customer demands by using sales orders orservice orders to trigger third-party procurement.For more information, see Procure-to-Pay (Non-Stock).

Business Scenario: Procure-to-Pay (Services)The Procure-to-Pay (Services) business scenario allows you to procure services, such as consulting and trainingservices, temporary labor, or engineering services. It can be triggered by employees who create shopping carts forservices, by project managers who need a certain service for their project, or directly by the buyer using a purchaseorder.Project-related services are usually recorded in a time sheet and the costs are directly transferred to the projecttasks in financial accounting. If a purchasing contract or a list price for the ordered service exists, the purchase ordercan be created automatically. If no source of supply exists, a request for quotation can be sent out to determine anappropriate supplier.Alternatively with this scenario, it is possible to order external resources to provide services for customer demandsthat cannot be fulfilled by internal employees. In this case, the procurement process is triggered when a sales orderor a service order has been created.For more information, see Procure-to-Pay (Services).

Tasks

Make Settings for Evaluated Receipt SettlementsSelect Supplier for Evaluated Receipt SettlementOnce you have agreed with your supplier on using evaluated receipt settlement runs to createinvoices and credit memos on their behalf, you need to make the following setting:

1. Go to the Supplier Base work center > Suppliers view and select your supplier from thelist.

2. Click Edit , choose General > Purchasing, and select Evaluated Receipt Settlement.The system will automatically create invoices and credit memos for all purchase ordersof the selected supplier using an ERS run.

If you want to exclude a specific purchase order from a scheduled ERS run, youcan deselect ERS in the purchase order.You can also select an individual purchase order for ERS without selecting thesupplier for ERS.

Define Communication Channels

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After the system has created invoices and credit memos in a evaluated receipt settlement run,the documents need to be sent to your supplier for verification.To define how you want to send the documents to your supplier, you need to make the followingsettings:

1. Go to the Supplier Base work center > Suppliers view and select your supplier from thelist.

2. Click Edit , choose General > Communication > Collaboration. You have the followingoptions: ● Send invoices and credit memos by e-mail, fax, or mail

Under ERS Invoice choose E-mail, Fax, or Printer.Enter your supplier's e-mail address or fax number, or enter the number of copiesyou want to be printed. You can then send the print out to your supplier by mail.

● Send invoices and credit memos by XMLClick Maintain XML Settings .For information on how to make settings, see Communication ArrangementsQuick Guide.

Schedule an Evaluated Receipt Settlement Run1. To open the Schedule Run quick activity, click Schedule .2. Under Schedule, select one of the following scheduling options:

● Start Immediately ● Run After Job

Choose an existing run. The system will execute the run immediately after thespecified job has been finished.

● Single RunSet a date and time for the run.

● RecurrenceChoose a recurrence for the run, such as daily, weekly, or monthly.

3. Click Save and Close .The scheduled ERS run creates and, if possible, also posts invoices and credit memosbased on goods receipts or goods returns for all purchase orders selected for ERS.Before posting the documents, the system verifies the data and creates exceptions forcertain errors, if necessary. ● If the system identifies exceptions, it will not post the invoice or credit memo and

will add it to the Documents with Exceptions list in the Work view of the SupplierInvoicing work center. You have to clarify the exceptions before the document canbe posted. For more information, see Exception Handling [page 187].

● If the system does not identify any exceptions and an approval process is in place,the system will create the Approve Supplier Invoice task and will add the invoiceor credit memo to the Documents in Approval list in the Work view of the SupplierInvoicing work center.

● If there are no exceptions and no approval process is in place or the document hasalready been approved, the system will post the invoice or credit memo and willadd it to the list in the Invoices and Credit Memos view.Once the document has been posted, the system automatically creates a journalentry for it, updates the general ledger account, and releases the invoice or creditmemo for payment. For more information, see Journal Entries [page 178] .

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Depending on the communication channel you defined for your supplier, thesystem sends the invoice or credit memo to the supplier by XML, e-mail, fax, or itsends it to a printer.

The Evaluated Receipt Settlements view displays a list of all finished runs and theirstatus. To view the invoices and credit memos that the system created during a run,select the run in the list.

In addition to this, you can also create ERS invoice manually or through A2X, with orwithout purchase order reference.You can create manual ERS invoices in the following locations:

● Supplier Invoicing Invoice Entry New ERS Invoice ● Supplier Invoicing Common Tasks New ERS Invoice

6.5.2 Business Background

6.5.2.1 Supplier Invoice Processing Using Evaluated ReceiptSettlements

OverviewYour company may deal with a number of suppliers on a regular basis. In order to streamline the invoicing process,you can arrange to pay these suppliers using evaluated receipt settlements (ERS). This means that these suppliersdo not need to send you supplier invoices; instead the system uses the prices in purchase orders and the quantitiesin goods and services receipts or inbound deliveries to create and post supplier invoices automatically on behalf ofthe suppliers. The suppliers are then notified of the value of the invoice or credit memo created on their behalf.

If your company does not enter purchase orders, goods and services receipts, or other preceding purchasedocuments into the system, this process is not relevant for your requirements.

PrerequisitesThe following are required:

● Purchase Requests and Orders, Goods and Services Receipts, Inbound Deliveries, Supplier Invoicing, andAutomatic Settlements are configured in your system.

● ERS has been agreed between your company and the supplier. ● In the Purchasing view of the Supplier editor, the Evaluated Receipt Settlement check box is selected.

The system automatically assigns all purchase orders for that supplier to ERS. ● In the Communication view of the Supplier editor, the output channel for ERS invoices is chosen and, if

applicable, the XML settings are maintained.

● The following purchase documents corresponding to the ERS run scheduled for a supplier are available in thesystem and are not yet all fully invoiced:

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○ Purchase orders that are marked for ERS and one of the following for each purchase order: ○ Goods and services receipt ○ Confirmed inbound delivery

Integration ● Incoming processes related to documents that lead to the manual entry or automatic creation of supplier

invoices: ○ Purchase order processing, which allows you to create, process, and track all purchase orders and

related documents, such as purchase order acknowledgments. ○ Goods and services receipt processing, which allows you to create, maintain, and cancel goods and

services receipts to track the delivery of materials and the completion of services. ○ Inbound delivery processing, which enables you to create, update, cancel or delete returns and deliveries,

and check inbound deliveries are consistent with the corresponding purchase orders.

● Outgoing processes that lead to the update or completion of preceding documents, and payment orcancellation of a supplier invoice: ○ Purchase order processing, in which the system compares the created supplier invoice values with the

related purchase order values for verification purposes. ○ Payables processing, which enables you to handle outgoing payments and all the activities associated

with these payments. ○ Payment management processing, which allows you to monitor all aspects of your outgoing payments

and the methods used to make them, as well as enables you to perform payment allocations, and to viewand process your bank statements.

○ General ledger accounting, which enables you to manage your accounting structure and perform crucialaccounting tasks such as balance carryforward, posting adjustments, reporting, and maintenance offoreign currency exchange rates.

Process Flow1. Schedule ERS run

● In the Evaluated Receipt Settlements view of the Supplier Invoicing work center, you can specify, forexample when and how often the run should be scheduled.

● In each ERS run, the system creates invoices for all purchase orders that are marked for ERS. To excludea purchase order from a scheduled ERS run, you can deselect ERS in the relevant purchase order.

2. Invoice data sent by preceding documents ● The system copies the invoicing data from the purchasing documents for which the invoice is required.

The system uses a purchasing contract, if involved in the process, and the purchase orders marked forERS with one of the following purchasing documents: ○ Goods and services receipt ○ Confirmed inbound delivery

● The system creates invoices covering the values and quantities agreed upon with the supplier. ● The assignment of purchase orders to ERS is automatic when ERS is selected for that supplier. You can

deselect ERS for a specific purchase order if you want to exclude that purchase order from the scheduledERS run. The system uses the prices in the relevant purchase orders and the quantities in the relevantgoods and services receipts or inbound deliveries to create and post invoices on behalf of the suppliers.

3. Invoice is verifiedThe system checks the supplier invoice for consistency.

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For more information, see Supplier Invoice Verification [page 150].4. Invoice is posted

After the invoice has been verified, the system posts the invoice.The system notifies: ● Purchasing of the values and quantities of an invoice that refers to:

○ Purchasing contract ○ Purchase order with a limit item from a purchasing contract for which there is no goods receipt

● Accounting-relevant data ● Payments and taxes that are due ● Payments to a non-resident supplier, where relevant

Tax on materials and services occurs in purchasing transactions like purchase orders and supplier invoicing.Tax abroad is applicable when your company needs to apply foreign taxes. In purchasing, it is possible toreceive a supplier invoice with foreign tax even if the company is not registered with the foreign tax authority.The system automatically determines the applicable tax in the supplier invoicing process.For more information, see Calculation of Tax Abroad for Services, Tax Determination [page 152], andWithholding Tax Determination [page 172].Before forwarding the data to Financials, the system checks whether the relevant accounting period inFinancials is open. If the accounting period is closed, the system issues an error message or a warningmessage.

5. Supplier is notifiedDepending on the invoice format in which the supplier is to be notified, the system sends one of the followingmessages to the supplier's external invoicing system: ● ERS invoice using SAP Electronic Data Exchange (EDX), sent in XML format ● ERS invoice form sent as an e-mail with the ERS invoice attached in read-only form

The ERS invoice can also be sent by mail or by fax to the supplier.If an ERS invoice is canceled, the supplier is also notified about the invoice cancellation.

6. Supplier creates customer invoice in external systemThe supplier receives the supplier invoice created by ERS and creates a customer invoice based on thereceived data.

See AlsoQuick Guide for Evaluated Receipt Settlements [page 251]Quick Guide for Work [page 182]Quick Guide for Invoices and Credit Memos [page 239]Supplier Invoice Verification [page 150]Exception Handling [page 187]Supplier Relationship Management [page 7]

6.5.2.2 Mass Data Runs (MDR)

OverviewA Mass Data Run (MDR) is the automatic mass processing of a task or a business transaction. MDRs enable massprocessing of business data and are used in business processes, for example, invoice runs, payment authorization

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runs, or balance confirmation runs. When a user schedules an MDR the system represents it as a background job.During scoping, it is possible to provide default variants of the MDRs.MDRs are created and maintained in the work centers. Using the Job Scheduler, users schedule the run to executeonce or regularly at specified times.In the Background Jobs view of theApplication and User Management work center, you can monitor and rescheduleMDR jobs that are created by users in other work centers.

Background processing of smaller business data volumes are managed through BTM automatic tasks.

Mass Data Run Features ● MDRs can be created, updated and scheduled by an end user. Scheduling can be done once, with a recurrence

pattern (including factory calendar support), or event-based as a follow-on activity after an other MDR. Youcan also initiate a run to start immediately from the work center.

● With MDRs, you can automate repetitive business tasks or activities, for example, batch jobs that are run atnight when there is low activity in the system. MDRs are useful for defining asynchronous, long-term,resource-consuming jobs such as overnight runs and mass printing.

● You can define the amount of control and automation in MDRs. For example, you might automatically releaseoutbound requests for certain customers, while for others you might manually check the information beforereleasing it.

● The system automatically schedules parallel work packages to speed up the processing time for a MDR.

Mass Data Run Process FlowMass data runs can be created by end users in the individual work centers. The following steps explain the typicalprocesses for creating an MDR and scheduling it as a job. During this process, you access the work center, and theJob Scheduler.

1. The user creates or schedules a new MDR in their work center, entering a unique name in the Mass Data RunID field, and defining parameters for the run. For example, in the Outbound Logistics work center, the userselects Automated Release and then creates a new MDR.

2. In the generic Job Scheduler, the user can start the MDR immediately, or schedule it to run at a specific time,or be triggered by a specified event: ● Time based: The MDR can be scheduled to run immediately in the background, to run once at a particular

date and time, or can be scheduled as a recurring event.

Do note that processing of mass data runs in the background adversely affects the performanceof your system. SAP recommends that the MDRs are scheduled to run at a minimum frequencyof every four hours. The frequency can be reduced to one hour in case it is absolutely essential.We do not recommend scheduling of mass data runs at any frequency under one hour.

● Event based: The MDR is triggered to run after another job has completed.3. At any time, you can monitor, reschedule or cancel the background job related to the MDR from the

Background Jobs view in the Application and User Management work center. The Background Jobs view allowsthe you to view all jobs in the system.

4. The user can go to the Application Log for any MD run to view the time and status of each run and to verifyany errors, warnings and messages. When an error occurs during a mass data run execution, there may bea business impact. The user can refer to the application log messages to find the exact cause of the error.

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Mass Data RunsIn the following table you can see some of the various MDRs that can be defined in the system, and the work centersthat they are defined in.

Work Center Work Center View Subview Mass Data Run

Application and UserManagement

Business Data Consistency Data Flow Verification Runs Data Flow Verification Run

Application and UserManagement

Input and OutputManagement

File Input File Input Run

Cash and LiquidityManagement

Cash Position and Forecast Liquidity Forecast Runs Liquidity Forecast Run

Cost and Revenue Periodic Tasks Overhead Distribution Distribution Run

Cost and Revenue Periodic Tasks Direct Cost Projects —Overhead Absorption

Overhead Run for Direct CostProjects

Cost and Revenue Periodic Tasks Overhead Cost Projects —Overhead Absorption

Overhead Run for OverheadProjects

Cost and Revenue Periodic Tasks Service Orders — OverheadAbsorption

Overhead Run for ServiceOrders

Cost and Revenue Periodic Tasks Revenue Recognition Revenue Recognition Run

Customer Invoicing Invoice Runs Invoice Run

Customer Invoicing Credit Card AuthorizationRun

Credit Card AuthorizationRun

Demand Planning Automated Actions Forecasting Run Forecasting Run

Demand Planning Automated Actions Preparation Run Preparation Run

Demand Planning Automated Actions Release Run Release Run

Demand Planning Automated Actions Rolling Run Rolling Run

E-Commerce Account Export Runs Account Export Runs

E-Commerce Internet Order Deletion Runs Internet Order Deletion Runs

Fixed Asset Periodic Tasks Depreciation Depreciation Run

General Ledger Periodic Tasks Balance Carryforward Carry Forward Run

General Ledger Periodic Tasks Post Recurring Journal EntryVouchers

Recurring Journal EntryVoucher Run

General Ledger Periodic Tasks Statutory Reports Journal Entry Report Run

Internal Logistics Automated Actions Inventory Level AdjustmentRun

Inventory Level AdjustmentRun

Inventory Valuation Periodic Tasks Goods Receipt and InvoiceReceipt Clearing

Goods Receipt and InvoiceReceipt Clearing Run

Inventory Valuation Periodic Tasks Overhead Absorption forProduction Lots

Overhead Run for ProductionLots

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Work Center Work Center View Subview Mass Data Run

Inventory Valuation Periodic Tasks WIP Clearing Work-in-Process ClearingRun

Inventory Valuation Inventory Unit Cost ChangeRun

Outbound Logistics Control Automated Actions Confirmation Update Run

Outbound Logistics Control Automated Actions Release Due Deliveries Run

Payables Periodic Tasks Balance Confirmation Runs Balance Confirmation Run

Payables Periodic Tasks Foreign CurrencyRemeasurement

Foreign CurrencyRemeasurement Run

Payables Periodic Tasks Payment Runs Payment Run

Payables Periodic Tasks Reclassification of Payables Reclassification of PayablesRun

Payment Management Periodic Tasks Credit Card Settlement Runs Credit Card Settlement Run

Payment Management Periodic Tasks Foreign CurrencyRemeasurement

Foreign CurrencyRemeasurement for Cash

Payment Management Periodic Tasks Payment Media Payment Media Runs

Production Control Automated Actions Mass Lot Closure Run

Production Control Automated Actions Mass Order Creation Run

Production Control Automated Actions Mass Order Release Run

Project Management Change Management Snapshot Run Definitions Snapshot Run Definitions

Project Management Projects Project Purchase RequestRuns

Project Purchase RequestRuns

Receivables Periodic Tasks Balance Confirmation Runs Balance Confirmation Run

Receivables Periodic Tasks Dunning Runs Dunning Run

Receivables Periodic Tasks Foreign CurrencyRemeasurement

Foreign CurrencyRemeasurement forReceivables Run

Receivables Periodic Tasks Payment Runs Payment Run

Receivables Periodic Tasks Reclassification ofReceivables

Reclassification ofReceivables Run

Supplier Invoicing Evaluated Receipt Settlement Evaluated Receipt Settlement

Supplier Invoicing Recurring Invoices view Recurring Invoices Recurring Invoice Run

Supply Control Automated Release Production Proposal Run Release ProductionProposals Run

Supply Control Automated Release Purchase Proposal Run Release Purchase ProposalsRun

Supply Planning Automated Planning Confirmation Update Run Confirmation Update Run

Supply Planning Automated Planning Planning Run New Planning Run

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Work Center Work Center View Subview Mass Data Run

Tax Management Periodic Tasks EC Sales List Reports Runs EC Sales List Report Run

Tax Management Periodic Tasks Sales and Use Tax ReturnRuns

Sales and Use Tax Return Run

Tax Management Periodic Tasks VAT Return Runs VAT Return Run

Tax Management Periodic Tasks Withholding Tax Returns Withholding Tax Return Run

Tax Management Common Tasks New Tax Return Run Tax Return Run

Time Administration Day Closures Day Closure Run Employee Time ValuationPeriod Closure Run

6.5.2.3 Automation of Supplier Relationship Management

OverviewTo save you time in your day-to-day business operations, certain functions within the Supplier RelationshipManagement software in the solution can be automated. This automated functionality may require you to makeselections during the configuration of your solution, or during fine-tuning, where you can define the relevant settings.The system makes decisions based on these predefined settings, and processes the relevant transactionsautomatically.

Automatic Purchase Order CreationIn the system, the default creation option is set to manually create purchase orders. This default creation option canbe changed if required. The rules can be defined either in fine-tuning or within the Purchase Requests and Orderswork center. You can choose one of the following settings for each product category:

● Create Purchase Order ManuallyThe buyer manually creates purchase orders from purchase requests.

● Create Purchase Order AutomaticallyWhen no source of supply is assigned to purchase requests, the buyer creates the purchase orders manually.When the source of supply is assigned, the system creates purchase orders automatically.

If a source of supply exists that is relevant to a purchase request, the system always automaticallyassigns that source of supply.

Source DeterminationWhen contracts are used to define purchasing relationships with suppliers, the system allows an automaticdetermination of the source based on the following criteria:

● Quota ArrangementYou define a quota number (share of requirements to be sourced); the system distributes the requirementin the ratio of assigned quota number across multiple sources of supply (multiple contracts for the product).The system will keep track of the quota-allocated quantity for each source of supply.The system decides on the allocation sequence by calculating a quota rating for each source of supply. Theallocations are done starting with the contract with the lowest value of quota rating.

● Fixed Source of Supply

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You can assign a contract as a fixed source of supply for a product. The system always selects this sourcefor all purchase requests.

If a quota arrangement also exists for a product, the fixed source of supply has higher priority as a source of supply,and the quota arrangement is then not used for source determination.For more information, see Source Determination.

Account Determination of Free-Text Purchase OrdersYou can define an account determination group for materials and services by each product category ID during thefine-tuning activity.The system will refer to this data and automatically assign an account determination group when purchase ordersare made for free-text items using the designated product category.For more information, see Define Tax Classification for Free-Text Items [page 119].

Evaluated Receipt SettlementsYour company may deal with a number of suppliers on a regular basis. In order to streamline the invoicing process,you can arrange to pay these suppliers using evaluated receipt settlements (ERS). This means that these suppliersdo not need to send you invoices; instead the system uses the prices in purchase orders and the quantities in goodsand services receipts to create and post invoices on behalf of the suppliers. The suppliers are then notified of thevalue of the invoice created on their behalf.Each ERS run creates invoices for all purchase orders that are marked for ERS. The assignment of purchase ordersto ERS is automatic when ERS is selected for that supplier. You can deselect ERS for a specific purchase order if youwant to exclude that purchase order from the scheduled ERS run.The system copies the invoicing data from the purchasing documents for which the invoice is required. The systemcreates invoices covering the values and quantities agreed upon with the supplier.For more information, see Quick Guide for Evaluated Receipt Settlements (in Supplier Invoicing) [page 251].

Recurring InvoicesFor certain invoicing processes, such as rent, leasing, or insurance, the same fixed amount needs to be invoicedmany times in defined periodic intervals. To streamline this process, recurring invoices supports your company increating such recurring invoices automatically and without receiving corresponding supplier invoices to trigger theinvoice creation.Automating such processes that involve recurring invoices not only increases the efficiency of the invoicing process,but also helps your company to increase overall productivity and save expenses in general. Recurring invoices notonly provides functions for data copying but also functions for data tracking that support your company in complyingwith financial control and audit mechanisms.

Invoices that are based on purchasing contracts or purchase orders, or invoices that require a defined approvalprocess, cannot be created using recurring invoices.

For more information, see Quick Guide for Recurring Invoices (in Supplier Invoicing) [page 263].

Using Interactive FormsThis automation enables your suppliers to respond electronically. The supplier uses the interactive form, for example,purchase order, to submit the response to you, as the buyer responsible. When the system receives this interactiveform file from the supplier, the system updates the relevant document with the confirmed data and changes thestatus. The interactive form update is available for:

● Purchase order acknowledgment

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● Supplier quote ● Supplier invoice clarification

You must contact SAP to set up the technical requirements. The supplier with whom you wish to communicateby interactive form must have Adobe Reader™ or Adobe Acrobat™ installed.

Input and Output of Documents Using Electronic Data ExchangeThis automation allows you to accept documents electronically from your business partners with an enterpriseservice. Electronic data exchange (EDX) allows you to communicate with your business partners using XMLmessages.The message exchange between you and your business partners requires an initial configuration that has to beperformed individually for each business partner. SAP has to perform the required system settings. There may alsobe prerequisites for your business partner, depending on the type of documents you want to exchange.

Automatic Release of Purchase ProposalsIn the Supply Control work center in the Supply Chain Management part of the solution, purchase proposalsgenerated by planning are released by the system to create purchase requests in the Purchase Requests andOrders work center. The system achieves this by executing a mass data run at fixed time intervals to execute thisprocess.This automation is set up during configuration and can be deactivated or modified during fine tuning, or within theSupply Control work center. Multiple runs can be created for parameters such as Item, Resource, Product Category,and Planning Area.For more information, see Quick Guide for Automated Actions (in Supply Control).

See AlsoAutomatically Created Purchase Orders [page 87]SourcingException Handling [page 187]

6.6 Recurring Invoices View

6.6.1 Quick Guide for Recurring Invoices (in Supplier Invoicing)

In the Recurring Invoices view of the Supplier Invoicing work center, you can create invoices for regular payments,such as rent, leasing, or insurance automatically. These costs usually do not involve purchase orders, goods andservices receipts, or other preceding documents and therefore cannot be created using evaluated receiptsettlements. Recurring invoice runs are scheduled to run automatically once a day (by default, 7:00 p.m. CET). Youcan define their recurrence, for example, weekly or monthly. During a run, invoices are created based on theinformation entered in the recurring invoice. In addition to creating new recurring invoices, you can also edit, block,and delete existing ones.The Recurring Invoices subview displays a list of all existing recurring invoices and the invoice documents that thesystem created during a run.

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The Runs subview displays a list of all finished runs and their status. You can also view the application log, in whichthe system records all information about a recurring invoice run.

Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

Business Background

Mass Data Runs (MDR)A Mass Data Run (MDR) is the automatic mass processing of a task or a business transaction. MDRs enable massprocessing of business data and are used in business processes, for example, invoice runs, payment authorizationruns, or balance confirmation runs. When a user schedules an MDR the system represents it as a background job.During scoping, it is possible to provide default variants of the MDRs.MDRs are created and maintained in the work centers. Using the Job Scheduler, users schedule the run to executeonce or regularly at specified times.In the Background Jobs view of theApplication and User Management work center, you can monitor and rescheduleMDR jobs that are created by users in other work centers.For more information, see Mass Data Runs (MDR) [page 257].

Automation of Supplier Relationship ManagementTo save you time in your day-to-day business operations, certain functions within the Supplier RelationshipManagement software in the solution can be automated. This automated functionality may require you to makeselections during the configuration of your solution, or during fine-tuning, where you can define the relevant settings.The system makes decisions based on these predefined settings, and processes the relevant transactionsautomatically.For more information, see Automation of Supplier Relationship Management [page 17].

Business Scenario: Procure-to-Pay (Stock)The Procure-to-Pay (Stock) scenario enables you to purchase stock products based on a requirement that can begenerated from a planning system, such as a Materials Requirements Planning (MRP) system.It covers all stages of the procurement process, from demand planning and creation of a purchase order, throughautomatic or manual assignment of sources of supply, sending the purchase order to a supplier, to goods andservices receipt, invoice verification, and payment.For more information, see Procure-to-Pay (Stock).

Business Scenario: Procure-to-Pay (Non-Stock)The Procure-to-Pay (Non-Stock) business scenario allows you to purchase non-stock materials, such as officematerial, engineering sample material, or fixed assets.This scenario can be triggered by employees or assistants who create shopping carts, by project teams who neednon-stock materials for projects, by buyers directly in purchase orders or requests for quotation (RFQ), or byaccounts payable accountants in supplier invoices. Deliveries can be confirmed centrally or decentrally. Costs forproject-related non-stock materials are directly transferred to project tasks in financial accounting.If a catalog, purchasing contract, or list price for a non-stock material exists, a purchase order can be createdautomatically. If no source of supply exists, you can send RFQs to determine appropriate suppliers.

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With this scenario you can also order non-stock materials to cover customer demands by using sales orders orservice orders to trigger third-party procurement.For more information, see Procure-to-Pay (Non-Stock).

Business Scenario: Procure-to-Pay (Services)The Procure-to-Pay (Services) business scenario allows you to procure services, such as consulting and trainingservices, temporary labor, or engineering services. It can be triggered by employees who create shopping carts forservices, by project managers who need a certain service for their project, or directly by the buyer using a purchaseorder.Project-related services are usually recorded in a time sheet and the costs are directly transferred to the projecttasks in financial accounting. If a purchasing contract or a list price for the ordered service exists, the purchase ordercan be created automatically. If no source of supply exists, a request for quotation can be sent out to determine anappropriate supplier.Alternatively with this scenario, it is possible to order external resources to provide services for customer demandsthat cannot be fulfilled by internal employees. In this case, the procurement process is triggered when a sales orderor a service order has been created.For more information, see Procure-to-Pay (Services).

Tasks

Create a Recurring InvoiceFor more information about this task, see here [page 266].

Check a Finished Run and Edit Invoices Not Posted1. Go to the Runs subview.

The system displays all finished runs with their status.2. To view details of a finished run, select a run, and click Show Log .

Under Overview , the system displays the number of invoices it created during therecurring invoice run and whether it could post them or not.

3. To edit and post invoices that the system could not post during the run, go to theWork view of the Supplier Invoicing work center, choose All Documents in Process, clickAdvanced, choose Recurring Invoice as the entry method, and enter, for example, thedate on which the run was executed under Created On.Alternatively, you can also go to the Recurring Invoices subview, select the run from thelist, and choose Invoices .Once an invoice has been posted, the system adds it to the Invoices and CreditMemos view.

Export Recurring Invoices to Microsoft Excel®For information about this task, see here [page 198].

Create a Task, Notification, or AlertFor information about this task, see here [page 195].

Create a Clarification RequestFor information about this task, see here [page 197].

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6.6.2 Tasks

6.6.2.1 Create a Recurring Invoice

OverviewYou can create a recurring invoice for regular, fixed payments such as rent, leasing, or insurance payments. Onceyou have created and released a recurring invoice, the system automatically creates invoices from the recurringinvoice in a recurring invoice run.

Procedure1. Go to Supplier Invoicing Recurring Invoices and click New , then choose Recurring Invoice.2. Step One: Enter Invoice Template

Enter the details of the recurring invoice: ● Under Supplier, enter the supplier ID. ● Under General Information, you can choose to either enter the total gross amount and the total tax

amount manually or to have the system fill these fields automatically by clicking Actions , thenchoosing Calculate Total Amounts, after you added items to the recurring invoice .Optional: Enter a payment reason.

● ItemsUnder Items, click Add Row .You can add invoice or credit memo items in the following ways: ○ Enter the product ID, quantity, and price.

The system finds the corresponding product category, product description, and tax code. Thesystem derives the G/L account or G/L account (origin) based on the product.For more information, see Tax Determination [page 152] and Automatic Account Determination

[page 176]. ○ If you cannot find any suitable product in the system, enter the product category, product type,

product description, quantity, and price.The system finds the corresponding tax code.For more information, see Tax Determination [page 152] and Automatic Account Determination

[page 176]. ○ If you cannot find any suitable product or product category in the system, enter the product type,

product description, tax code, quantity, price, and G/L account.The system uses the entered G/L account for account determination.For more information, see Free-Text Supplier Invoices (Without Purchase Order Reference)(Account Determination).

● In the Account Assignment Type list, select an account assignment type for each item. Depending onthe account assignment type you select, the system displays further fields for the cost objects.For more information about the different account assignment types, see Account Assignment inPurchasing [page 26].

● Optional: Distribution of Additional Costs

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You can add and distribute additional costs such as freight or insurance, or credit amounts such ascash discounts or refund of costs.

1. Click Add Row .2. Enter the type of cost in the Description column.3. Enter at least the tax code and the amount that you want to distribute among the existing invoice

and credit memo items.4. You can also enter a G/L account that the system uses only to classify the expense and not for

account determination.5. Select the Distribute Additional Costs Proportionally or the Distribute Credit Value Proportionally

checkbox.The system proportionally distributes the amount of the additional cost or credit value itemamong the amounts of all other items.

For more information, see Distributing Costs and Quantities Among Invoice and Credit Memo Items [page 205].

● Optional: Intercompany Invoicing

Configuration SettingsConfiguration settings are normally performed by an administrator. If you do not have therequired authorization, contact an administrator.You have enabled Intercompany Supplier Invoicing in your solution configuration. To find thisbusiness option, go to the Business Configuration work center and choose the ImplementationProjects view. Select your implementation project and click Edit Project Scope . In theScoping step of the project, ensure that Supplier Invoicing is selected within Purchasing.In the Questions step, expand the Purchasing scoping element and select Supplier Invoicing.Select Supplier Invoices and Credit Memos Entry of Supplier Invoices and confirm thatyou charge invoices to partner companies.For more information about defining intercompany posting rules and enabling companies, seeDirect Posting to Partner Companies – Configuration Guide.

If your company is part of a group of partner companies, you can charge invoice items that do not havea reference to a purchase order to your partner companies, for example, for additional costs.

1. Ensure that you created one invoice item for each invoice amount that you want to charge to apartner company even if the original invoice from your supplier contains one invoice item only.This is necessary since you can assign items that you charge to partner companies to oneaccount assignment type only.

2. For each item that you want to charge to a partner company, enter a partner company in theCharge-To Company field.The system creates intercompany receivables and payables automatically without posting aseparate invoice for the partner company. This means that no additional manual postings arerequired in financial management.

The system does not charge taxes to the charge-to companies. For Germany, wetherefore recommend that you use this process only within a tax reporting group.For more information, see Tax Reporting Group.

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ExampleYour telephone company sent you an invoice that contains one invoice item with an amountof USD 500.00. Since your company is part of a group of partner companies, you only wantto pay USD 250.00 of the telephone bill and want to charge USD 250.00 to one of yourpartner companies. To do this, you create the following two invoice items:

● Item 1: Amount USD 250.00Item 1 will be charged to the buying company.

● Item 2: Amount USD 250.00 and company B entered as charge-to company.Item 2 will be charged to partner company B.

For more information about intercompany processes, see Intercompany Processes in SAP BusinessByDesign.

● To go to the next screen of the guided activity, click Next .3. Step Two: Define Recurring Invoice

Enter the details required for scheduling the recurrence of the recurring invoice: ● Under General Information, enter a description for the recurring invoice and select whether the invoices

created during the run need to be confirmed before posting. The system does not include thisdescription in the invoices created during the run.

Once you have released the recurring invoice, the system automatically creates a document IDfor it and displays it in the Recurring Invoices subview.The system includes this document ID as a reference document in the invoices created duringthe recurring invoice run.

● Under Define Recurrence, specify the recurrence type of the recurring invoice by choosing either arecurrence pattern or individual dates. ○ If you choose individual dates, enter particular dates for the recurring invoice. ○ If you choose a recurrence pattern, enter the details of the pattern, for example, the start and end

dates, the recurrence, and the day of the month.

To go to the next screen of the guided activity, click Next .4. Step Three: Recurring Invoice Forecast

Check the forecast and history details for the recurring invoice.To go to the next screen of the guided activity, click Next .

5. Step Four: AttachmentsYou can attach files to the recurring invoice.

The system does not display any attachments in the invoices that are created from the recurringinvoice.

To go to the next screen of the guided activity, click Next .6. Step Five: Review

Check the details you have entered on the previous screens. To complete the recurring invoice, you can: ● Check whether the recurring invoice is complete and correct by clicking Check .

The system verifies the data and displays error messages, where necessary. ● Save a draft of the recurring invoice, which you can complete at another time, by clicking Save . ● To release the completed recurring invoice and switch to the Confirmation screen, click Release .

7. Step Six: Confirmation

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To finish creating the recurring invoice, click Close .Under What do you want to do next, you can do the following:

● Edit more recurring invoice details, which leads you to the full version of the recurring invoice whereyou can make further changes.

● Add another recurring invoice.8. The system creates invoices from the recurring invoice at regular intervals as defined in the recurrence

pattern. To do this, the system checks whether invoices need to be created and then creates those invoicesin a run.

● The system determines the employee who created the recurring invoice as the employee responsibleof all invoices created during the recurring invoice run. If this employee is neither assigned to a supplierinvoicing org unit nor defined as an additional accountant, the system uses the rules defined in theSupplier Invoices work category to determine the employee responsible. For more information, seeSupplier Invoices Work Category.

● If the system identifies exceptions, it will not post the invoice and will add it to the Documents withExceptions list in the Work view of the Supplier Invoicing work center. To identify invoices withexceptions that the system created during a recurring invoice run, click Advanced and chooseRecurring Invoice as the entry method.For more information, see Exception Handling [page 187].

● If the system does not identify any exceptions and an approval process is in place, the system willcreate the Approve Supplier Invoice task and will add the invoice to the Documents in Approval list inthe Work view of the Supplier Invoicing work center. To identify invoices in approval that the systemcreated during a recurring invoice run, choose Documents with Exceptions, click Advanced, and chooseRecurring Invoice as the entry method.

● If there are no exceptions and no approval process is in place or the invoice has already been approved,the system will post the invoice and will add it to the list in the Invoices and Credit Memos view.Once an invoice has been posted, the system automatically creates a journal entry for it, updates thegeneral ledger account, and releases the invoice for payment. For more information, see JournalEntries [page 178].

To view the invoices that the system created during a run and their status, go to the Recurring Invoicessubview, select a recurring invoice from the list, and choose Invoices .

6.7 Reports View

6.7.1 Released Documents per Contract

OverviewShows all the documents that were called off with reference to a specified contract. Shows the buyer how intensivelya contract is used in terms of released documents per contract.

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Features

Running the ReportBefore running the report, you can specify the data you want to see by making value selections for variables. Youmust make a value selection for all mandatory variables. In the system, mandatory variables are indicated by anasterisk (*).

Analyzing the ReportThis report shows an analysis of released documents per contract.The following data is filtered for this report:

● Contract Status is restricted to Released. ● Expiry Status is restricted to Not Expired and About to Expire.

To further analyze data in this report, you can drag characteristics to rows and columns.From this report, you can navigate to:

● Contract Tracking ● Purchase Order Tracking [page 111] ● Expiring Contracts

See AlsoReports ViewOverview of Reports in Supplier Relationship ManagementOverview of Data Sources in Supplier Relationship Management

6.7.2 Invoices with Exceptions

OverviewThis report shows the invoices with exceptions and the invoice value per supplier, along with the correspondinginvoice values, the percent of invoices and invoice values with exceptions, and the number of exceptions as well asthe kind of exception. To detect process issues or potential fraud, you can check how often a specific exceptionoccurs compared to all invoice exceptions.

Features

ViewsThe following views are available with this report:

● Invoice Exceptions per Supplier ● Invoices with Exceptions per Supplier

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Running the ReportBefore running the report, you can specify the data you want to see by making value selections for variables. Youmust make a value selection for all mandatory variables. In the system, mandatory variables are indicated by anasterisk (*).Additional information is available for the following selected variables:

● Exception TypeDisplays data that is relevant to an exception type.Exception types include: ○ Missing/Wrong External Information

A supplier invoice contains incomplete or incorrect information from the supplier, such as a missingsupplier invoice number.

○ Missing/Wrong Internal InformationA supplier invoice contains incomplete or incorrect internal information, such as a missing accountassignment.

○ Missing Goods ReceiptA supplier invoice for which the ordered goods or services have not yet been delivered or rendered.

○ Missing Order ReferenceA supplier invoice contains invoice items that do not have a reference to a purchase order or drop-shiporder. Using the buying company, the supplier, and product information, such as the product type, ID,category, and description, the system searches for orders that can be used as a reference. If appropriate,the accountant can select one of the proposed orders as a reference, which then facilitates processingin Financial Management.

○ Missing Invoice or Credit MemoAn invoice or credit memo contains credit memo items whose quantity exceeds the invoiced quantity orit contains subsequent credit or debit items whose quantity exceeds the invoiced or credited quantity.

○ Possible DuplicateA supplier invoice is identified as a possible duplicate.

○ Price/Quantity/Tax VarianceA supplier invoice contains a price, quantity, or tax variance that exceeds the supplier’s tolerance limit.

○ Error during Simulation of Journal EntryA supplier invoice without errors is used to simulate a journal entry in financial accounting. If thesimulation results in errors, this exception is raised. If the supplier invoice is posted, the system createstasks in financial accounting. If the supplier invoice is not posted, it will have to be posted manually afterthe errors have been corrected in financial accounting.

○ Other ExceptionsA supplier invoice contains errors that cannot be assigned to any other exception type.

● Exception StatusDisplays data that is relevant to the status of an invoice exception.Statuses include: ○ Pending ○ Forwarded ○ Accepted ○ Rejected ○ Obsolete

● Invoice DateBy default, the value is set as the last 3 months, including the current month.

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Analyzing the ReportThis report shows an analysis of the invoices with exceptions by characteristics, such as number of invoices withexceptions, total invoice value, rate of invoices with exceptions.The following data is filtered for this report:

● Invoice Year/Month is restricted to the last three months, including the current month.

To further analyze data in this report, you can drag characteristics to rows and columns.From this report, you can navigate to:

● Invoice Tracking [page 274]

See AlsoReports ViewOverview of Reports in Supplier Relationship ManagementOverview of Data Sources in Supplier Relationship Management

6.7.3 Payment Statistics – Cash Discount

OverviewThe report displays an overview of all the cash discounts that your company has taken or lost while making paymentsover a given period of time. All the cash discounts that your company is still allowed to use are also shown.Canceled items are not included.

Views ● Payment Statistics – Cash Discounts

Displays all the cash discounts, including all those taken or not used, over a given period of time, as well asall the cash discounts that are currently available. The default value for this period is 365 days.

● Payment Statistics – Top Lost Cash DiscountsDisplays the ten highest discount amounts that were not used over the last 365 days.

Features

Running the ReportBefore running the report, you can specify the data that you want to see by making value selections for variables.You must make a value selection for all mandatory variables. In the system, mandatory variables are indicated byan asterisk (*).Additional information is available for the following selected variables:

● Clearing DateYou can restrict the display to payments that were cleared within the specified period of time, such as thecurrent month or the last 14 days. The default value for this variable is the last 365 days.

● Display Currency

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This report is displayed in the company currency as standard. However, you can also run the report in adifferent currency.

● Display Currency – Conversion DateIf you want to run this report in a currency that differs from the company currency, you can specify theconversion date. The current date is taken as the standard conversion date.

For more information about the standard variables, see Overview of Reports in Financial Management.

Analyzing the ReportThis report displays the amount of the cash discounts that your company has taken or lost or is still allowed to usefor each supplier.Additional information is available for the following key figures:

● Cash Discount AllowedShows the cash discount that you are allowed or were allowed to use for a particular payment.

● Cash Discount TakenShows the cash discount that you were allowed to use according to your supplier and that you have taken.

● Additional Cash Discount TakenShows the cash discount that you have taken in addition to the amount that you were allowed to use accordingto your supplier. This means that it is the difference between the total cash discount amount taken and theallowed cash discount amount.

● Cash Discount LostShows the cash discount that you would have been allowed to use but that you did not take.

You have the following options for analyzing the report: ● You can restrict the data that is displayed. To do this, click on the filter symbol and select the required values. ● To further analyze data in this report, you can drag characteristics to rows and columns. ● You can use the individual suppliers displayed to navigate directly to an overview of their master data. To do

this, select the appropriate value and open the corresponding menu. ● If you want to display more lost discount amounts than displayed in the standard view, proceed as follows:

Under Columns, choose the Key Figures dropdown list and then Manage Conditions. In the dialog boxdisplayed, choose Edit. On the Edit Conditions screen in the From Value column, overwrite the displayed valueand enter the required number of rows. You can save your changes and set the modified view to be yourstandard.

From this report, you can navigate to: ● Business Partner Overview ● Details for All Items – Suppliers ● Payment Statistics – Suppliers

To be able to navigate to the source document, add the following characteristics to the report: ● Source Document Type ● Document Number and/or External Reference

You must insert Source Document Type to the left of Document Number and External Reference.You can then navigate to the source document from Document Number or External Reference.

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See Also ● Reports View ● Overview of Reports in Financial Management ● Overview of Data Sources in Financial Management

6.7.4 Monitoring Invoices

OverviewThis report shows invoices and down payments invoices per supplier, along with the status of the invoice.The process type (for example, Third-Party) shows you the type of procurement process for this item.You can further analyze third-party procurement processes by using the Third-Party process type combined withone or more of the following fields:

● Sales Order ID ● Customer ● Customer's Purchase Order ID ● Follow-On Process

Features

ViewsThe following views are available with this report:

● Invoice TrackingShows all invoices per supplier, product, or account assignment, along with the status of the invoice. In thisreport, you can check the invoice price, per price unit, invoiced quantity, net and gross invoiced values, andtax amounts over the last 7 days.

● Down Payment Request TrackingShows all down payment requests per supplier. The accountant can check the down payment value, andstatus of the invoice (for example, if it was posted or in approval) for the last 7 days.

● Invoices Potentially Relevant for Withholding TaxShows all invoices with a supplier that is subject to withholding tax although the invoices themselves do notcontain any withholding tax information.The relevant key figures are: ○ Invoice Value (Net) - Relevant for Withholding Tax ○ Invoice Value (Gross) - Relevant for Withholding Tax ○ Tax Amount - Relevant for Withholding Tax

Running the ReportBefore running the report, you can specify the data you want to see by making value selections for variables. Youmust make a value selection for all mandatory variables. In the system, mandatory variables are indicated by anasterisk (*).Additional information is available for the following selected variable:

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● Invoice StatusDisplays data that is relevant to the processing status of a supplier invoice.Statuses include: ○ Data Entry in Process ○ Cancellation Request ○ Due Item Partially Canceled ○ Due Item Cleared ○ In Error Correction ○ Preparation Finished ○ In Approval ○ In Revision ○ Approval Finished ○ Voided ○ Posted ○ Canceled

● Invoice Creation DateDisplays data applicable to invoices created during the last seven days.

Analyzing the ReportThis report shows an analysis of invoice tracking by characteristics, such as invoice price, invoice quantity, invoicevalue, net value, tax amount, and down payment.The following data is filtered for this report:

● Invoice Creation Date is restricted to the last seven days, including today.

To further analyze data in this report, you can drag characteristics to rows and columns.From this report, you can navigate to:

● Invoices with Exceptions [page 270]

See AlsoReports ViewOverview of Reports in Supplier Relationship ManagementOverview of Data Sources in Supplier Relationship Management

6.8 Common Tasks

6.8.1 Configuration: Tax Classification for Free-Text Items

This document contains details and instructions regarding configuration settings. Such settings arenormally performed by an administrator. If you do not have the required authorization, contact anadministrator.

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To find this activity, go to the Business Configuration Implementation Projects view. Select your implementationproject and click Open Activity List . Select the Fine-Tune phase, then select the activity from the activity list.This activity allows you to define the attributes for purchasing-document items that do not have a product ID buthave a free-text entry instead. The settings are used to determine influencing factors, such as tax rate types,exemption reasons, and taxable service points in accordance with the legal requirements of the relevant country.You need tax classification, for example, if you want to use evaluated receipt settlement (ERS).

Since your company has selected the Buy, Sell, and Administrate implementation focus, there will be slightdifferences between your solution and the standard as outlined below. For more information, see WhatWorks Differently in Buy, Sell, and Administrate.If your system has not been deployed, all information is shown because there is no scoping-relevant filter.

StepsDefine New Tax Classification Setting

1. To define a new tax classification setting, click: ● Add Row to add a new row to the bottom of the list. ● Insert Row to insert a new row in a specific part of the list. The system adds the new row above the

selected record in the list.

You can also copy an existing setting and overwrite the copy with different entries. To do this, selectthe row you want to copy and click Copy . Click Paste to insert the copied data and overwrite thedata.

2. For each setting that you want to define, proceed as follows:a. In the Product Category column, select the product category.b. In the Tax Rate Type column, select the tax rate type.

Examples of the tax rate type are: Standard, Freight, Reduced. For example, a reduced tax rate mightbe valid for certain product categories in a specific country.

c. For any items that are tax exempt, in the Tax Exemption Reason column select the tax exemption reason.For example, the tax exemption reason may be due to a tax-exempted product, state or local government,or the movement of goods between European Union states.For all other items, leave this field blank.

d. For services, in the Taxable Service Point column select: ● True — If the service is taxable in the location where it is performed.

● False — If the service is taxable at the location of the service agent's company.

e. In the Country column, select the country for which the settings are valid, for example US.

f. For those countries that have region-specific or state-specific taxes, in the Region column, enter theregion for which the settings are valid . For example, Utah.

g. In the Tax Type column, select the tax type, for example Sales Tax.

3. Click Save and Activate to save your entries.The system assigns an internal sequence number to each defined setting.

Change Existing Tax Classification Setting1. To change an existing setting, overwrite the data you want to change.

Click Save and Activate to save your changes.

Remove Existing Tax Classification Setting

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1. To remove an existing setting from the table, select the row you want to remove and click Remove .2. Click Save and Activate to save your changes.

Follow-Up TasksIf you have defined a Taxable Service Point, assign the classification on the Tax Event tab in the Tax Returns forGoods and Services activity for the relevant country.

Example ● Tax Classification US, Product Category PC Hardware:

Field Name Value

Product Category PC Hardware

Tax Rate Type Standard

Tax Exemption Reason blank

Taxable Service Point blank

Country US

Region All

Tax Type Sales and US Tax

Result:Susan Ladier is based in the US. She creates a shopping cart with an item from the product category, PCHardware. The item does not have a product ID. The created purchase order contains this item with a tax rate inaccordance with the classification above.

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