Procurement to Payment Cycle

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• Procurement to Payment Cycle
• Presented by David Nguyen
• November 03rd, 2000
• Nashville, TN

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Procurement Cycle Overview
Procurement
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Purchase Order Process

• Purchase Requisition submitted by user for
  approval
• Identify and contact supplier to receive bids
• Evaluate bids and identify possible supplier
• Send supplier information to A/P for input
• Create PO in SAP
• Purchase Requisition - PO created from a PR
  submitted by user
• Automatically (Auto-PO)- For frequently ordered
  items
• Manually - without a PR - Not encouraged
• PO approved in SAP
• PO entered in purchase order database
• PO is sent to vendor
• Fax
• Email
• EDI - 850 Transaction

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The Structure of a Purchase Order in SAP
Purchase Order Header Vendor Conditions Text
Output
Items
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PO Invoicing Process Overview
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Goods Receipt Process

• Receive packing slip
• Goods receipt entered into SAP
• Inventory updated and expense entry generated
• Quantity updated on PO in PO Database
• Verify the validity of PO against the PO in
  database
• Information on packing slip entered into PO
  database and the Goods Receipt database

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Invoicing Process

• Invoice received from vendor
• Fax
• Postal Service
• EDI - 810 Transaction
• Direct Feeds - customize flat files from vendors
  automatically loaded into SAP
• Verify PO (2 types)
• ? 3-way match
• ? Reference a valid PO number
• ? PO line item quantity and prices lt
  Invoice
• ? A valid good receipt has been
  entered
• ? 2-way match
• ? Existence of a valid PO
• ? Quantities and prices match invoice
  (Good receipt is not required)
• Data entered into SAP

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Payment Process

• Invoice is matched to goods receipt and PO
• ? Match
• ? Invoice is held until terms are
  close to being met
• ? Release for payment
• ? General paymaster approves payment
  run
• ? Vendor account clears, make payment
  to vendor
• ? Cheques printed and mailed to
  vendors
• ? Wire transfer
• ? Not Match
• ? Payment is blocked
• ? List of blocked invoices compiled
• ? Buyer displays list and make
  corrections
• ? SAP attempts to rematch the invoice
  to GR and PO

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Procurement To Payment Cycle
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Contact Information

• Name David Nguyen
• Phone [phone]
• Fax [phone]
• email david_nguyen_at_cpr.ca

End