The first step to understand SAP is to have basic knowledge of screens like Login screen, Logout

screen and so on. Following screens will describes about the screen navigation and the
functionalities of standard tool-bar.

Login Screen
Log on to SAP ERP server. SAP login screen will prompt for User ID and Password. Provide the valid
user ID and Password and press enter. The user id and password is provided by system
administrator. Following is the login screen:
Standard Tool-bar Icon
SAP screens tool-bar are shown in the following image:

SAP screen tool-bars are briefly described as:

Menu Bar - Menu bar is the top line of dialog window in the SAP system.

Standard Toolbar - Standard functions like save, top of page, end of page, page up, page
down, print, etc. are available in toolbar.
 Title Bar - Title Bar displays the name of the application/business process you are currently
in.

Application Toolbar - Application specific menu options are available on this toolbar.

Command Field - To start a business application without navigating through the menu
transaction, some logical codes are assigned to the business processes. Transaction codes
are entered in the command field to directly start the application.

Standard Exit Keys

Exit keys are used to exit the module or to log off. They are used to go back to the last accessed
screen. Following are the standard exit keys used in SAP:

New Session Icon

For creating a new session we use the following keys shown in the below image:
Log Off
It is a good practice to log off from the SAP system when you finish your work. There are several
ways of login off from the system but it can be done using following instructions as shown in
image:

Every organization acquires material or services to complete its business needs. The process of
buying materials and obtaining services from vendors or dealers is procurement. Procurement
process should be done in such a way that it is ordered in correct quantity, with a proper value at
the proper time. It is subdivided into following parts:

Basic Procurement

Special Procurement

Basic Procurement
It is a process of acquiring goods or services in the right amount, at the right price at the right time.
So the method of getting services, supplies, and equipment from a vendor seller, at the right price
at the right time in right amount is termed as Procurement. The quality of procurement is
attempting to “get the right balance”, consider the following example:

Organizations try and keep inventory levels at a minimum due to the prices associated with
high levels of inventory; however at identical time it is very expensive to prevent production
due to shortages in raw materials.

Getting the minimum price for a product or service is often necessary, however the balance
between product availability, quality, and vendor seller relations is also necessary.

Procurement Lifecycle
Most modern organizations procurement follow some sequential steps which are described below:
Requirement and Information Gathering
Procurement process starts with gathering information about product and its quantity. Then for
required products and services, it is necessary to look for suppliers who can satisfy the
requirements.

Supplier Contact
After gathering requirements one will look for the suppliers who can fulfill the requirements. Based
on that quotation request or information request can be made to suppliers or direct contact can be
made with them.

Background Review
Once the supplier is known product/service quality is checked, and any necessities for services
such as installation, warranty and its maintenance are investigated. Some samples of the products
can be obtained for quality examination.

Negotiation
Some negotiations with suppliers is made regarding price, availability and delivery schedule of the
products/services. After this a contract is signed that is a binding legal document between supplier
and ordering party. A contract will include all necessary information like price and quantity of
material, delivery date, etc.

Order fulfillment
Ordered material will be shipped, delivered to the ordering party and supplier is paid accordingly.
Training and Installation of product or services may also be included.

Consumption, Maintenance and Disposal

As the products/service is consumed the performance of the products or services is evaluated and
any follow up service support if required is analyzed.

Contract Renewal
Once the product or services are consumed or contract expires and needs to be renewed, or the
product or service is to be re-ordered, company experience with vendors and service provider is
reviewed. If the products or services are to be re-ordered, the company decides whether to order
from previous supplier or think about new suppliers.

Basic Procurement Activities

Basic Procurement activities flow is given in the following image:
Organization structure is the framework of company according to which business is conducted in
every company .Organization structure consists of many levels which have relationship to one or
another. Organization structure is also referred as enterprise structure. Enterprise structure is
made up of many organizational units having relationship with one another.

SAP Implementation Guide

Configuration of SAP software like add fields, to change field names, to modify drop down lists etc.
to adjust according to working of your organization is done through implementation guide known
as IMG. IMG is where we define enterprise structure and other settings that are required for
functioning of SAP software according to need of an organization.

SAP IMG Path

To do any type of configuration according to our organization need the first step is to reach the
implementation IMG guide screen. We can reach implementation guide in 2 ways:

Menu path

Transactional code

Menu path
We can navigate through the following path to reach out to IMG:

SAP Easy Access => Tools => Customizing => IMG => Execute Project

Transactional code
Best and simple way to reach out any SAP screen is TCode i.e. transactional code. Transactional
code to reach out IMG: SPRO SAPProjectReferenceObject. Enter the Transaction code in command field
and then click on enter.
SAP IMG
IMG screen can be reached out just by following the below steps:

After SPRO, on the next screen click on SAP Reference IMG.

Next Screen will appear as follows. This is the final screen from where we can do configurations.
Every organization has some framework or some structure is defined according to which the whole
business runs. Enterprise structure is the structure that represents an enterprise in SAP ERP
system. It is subdivided into various organizational units which for legal reason or business related
reason are grouped together.

Enterprise structure defines various levels in an organization. These levels are placed according to
some hierarchy. Each level has some specific functionality associated with it, which in a combined
way describes the working of an organization. Also enterprise structure defines various
organizational units that are present in an enterprise. The Organizational Structure consists of
following Organizational Levels:

Client

Company Code

Plant

Storage Location

Purchasing Organization

Purchasing Group

Following diagram is one such organizational structure which describes the levels incorporated in
an organization. Client being at the topmost, followed by multiple company code, followed by
multiple plants, plants having multiple storage location with their own or centralized purchasing
organizations.
Client
The fundamental explanation of Client is as follows:

Client is a commercial organizational unit in R/3 system.

It has its own set of master data with independent table sets.

According to hierarchy, Client is at highest level in SAP system.

Data that is maintained at client level is valid for all organizational levels.

Company Code
The fundamental explanation of Company Code is as follows:

Within Client, Company code is the independent accounting unit.

It is a legal entity that has its own profit, loss and balance statement.

It is the smallest unit in organization for which a complete independent account set can be
replicated.

Plant
The fundamental explanation of Plant is as follows:

Plant is an organizational unit within a company where activities take place. A plant will
produce goods and makes goods available for the company.

It is unit having manufacturing facility, warehouse distribution center or a regional sales

office within logistic. It subdivides an enterprise in different aspects.

Storage Location
The fundamental explanation of Storage Location is as follows:

Storage location is an organizational unit which actually differentiates between different

material stocks in a Plant.

Storage location is a place where stock is kept physically.

Plant can be consisting of multiple storage location. All data is stored at storage location
level for a particular storage location.
Purchasing Organization
The fundamental explanation of Purchasing Organization is as follows:

Purchasing Organization is an organizational unit under company or plant which is

responsible for procurement activities according to requirements. It is responsible for
external Procurement.

Purchasing organization can be at client level i.e. centralized purchasing organization.

Purchasing organization can be at company or plant level i.e. company specific or plant
specific

Different forms of purchasing can be described as follows:

Centralized Purchasing
Purchasing organization is not assigned to any company code it procures for all company codes
belonging to different client.

Company specific Purchasing

Purchasing organization is assigned to a company code only, Plant belonging to the company code
can purchase through this Purchasing organization.

Plant specific Purchasing

Purchasing organization is assigned to a Plant, only this specific Plant can purchase through this
Purchasing organization.

Purchasing Group
The fundamental explanation of Purchasing Group is as follows:

Purchasing group is an organizational unit which is responsible for everyday procurement

activities within an organization.

It is a buyer or group of buyer responsible for procurement activities in a purchasing

organization.

As discussed organization structure is the framework of company which describes the entire
structure and functioning of a company. Organization structure is designed in a way that it is split
into different levels and each level is placed according to hierarchy. These levels have relationship
to one another. The various levels in a standard organization are as follows:

Company

Company code

Plant

Storage Location

Purchasing Organization

Purchasing Group

All the Definitions in SAP will be done through Display IMG screen as shown below:

Path to reach Definition: IMG => Enterprise Structure => Definition

Create Company
Company is the topmost organizational unit after client which incorporates individual financial
accounting statements of several company codes. A company can have many company codes. In
SAP it is optional to create company. Following steps will take you through the procedure of
creating company.

Path to Create Company:

IMG => Enterprise Structure => Definition => Financial Accounting => Define Company
TCode: OX15

On display IMG screen select Define Company execute icon by following the above path.
Select New Entries icon.

Fill in all necessary details like name of company, address of company with street number, city,
country and postal code. Click on save icon. A new company will be created.
Create Company Code
A company code is the smallest organizational unit after company for which stand-alone financial
accounting's, profit and loss statements can be withdrawn. Many company codes can be assigned
to one company. Following steps will take you through the procedure of creating company code:

Path to create Company Code:

IMG => Enterprise Structure => Definition => Financial Accounting => Edit, Copy, Delete, Check
Company Code
TCode: OX02

On display IMG screen select Edit, Copy, Delete, Check Company Code execute icon by following
the above path.
Select New Entries icon.

Fill in all necessary details like Company code, company name along with city, country, currency,
language. Click on save icon. A new company code will be created.
Copy Company Code

EC01 – copy company code. Path: SPRO→ IMG→ Enterprises structure→ definition→ financial
accounting→ Edit, copy, delete, check company code→ double click on copy, delete, check company
code line → click on copy org. object icon→ then give FROM company code 1000 and give TO company
code (our own 4 CHAR code) → Enter→ click yes to copy G/L account → click yes to change currency,
maintain currency (Ex. INR) → continue for 4 times→ click NO to copy number range→ continue→ click
cancel(X) → click copy→ read the information and continue→ Go back→ Double click on edit company
code line→ click on position→ Give your own company code→ Enter→ Double click on your company
code→ maintain company name, city, country, language, key then press enter→ click on address icon,
maintain company code address in detail (address will be given by clients in real time project but in
practice we have to maintain o assumption) → press enter and save the company code.

Create Plant

Plant is an organizational unit within a company where activities take place. A plant will produce
goods and makes goods available for the company. Following steps will take you through the
procedure of creating Plant:

Path to create Plant:

IMG => Enterprise Structure => Definition => Logistic General => Define, Copy, Delete check
plant
TCode: OX10

On display IMG screen select Define, Copy, Delete check plant execute icon by following the above
path.

Select Define Plant icon to create a new plant.

Select New Entries icon.
Fill in all necessary details like plant name along with detailed information like Language, House
no.,city, country, region, postal code. Click on save icon. A new plant will be created.

Create Storage Location

Storage location is an organizational unit which actually differentiates between different material
stocks in a Plant. Storage location is a place where stock is kept physically. Plant can be consisting
of multiple storage location. All data is stored at storage location level for a particular storage
location. Following steps will take you through the procedure of creating Storage location:

Path to Create Storage Location:

IMG => Enterprise Structure => Definition => Materials Management => Maintain Storage
Location
TCode: OX092

On display IMG screen select Maintain Storage Location execute icon by following the above path.
Enter the name of plant for which you want to create storage location.

Select New Entries icon.

Enter the name of storage location along with the description of storage location. Click on save
icon after filling required information. A new Storage Location will be created.

Create Purchasing Organization

Purchasing Organization is an organizational unit under company or plant which is responsible for
procurement activities according to requirements. It is responsible for external Procurement.
Purchasing organization can be specific to plant or company. Following steps will take you through
the procedure of creating Purchasing Organization:

Path to Create Purchasing Organization:

IMG => Enterprise Structure => Definition => Materials Management => Maintain Purchasing
Organization
TCode: OX08

On display IMG screen select Maintain Purchasing Organization execute icon by following the
above path.
Select New Entries icon.

Enter the name of purchasing organization along with the description of it. Click on save icon after.
A new Purchasing Organization will be created.
Create Purchasing Group
Purchasing group is an organizational unit which is responsible for everyday procurement
activities within an organization. Following steps will take you through the procedure of creating
Purchasing Group:

Path to Create Purchasing Group:

IMG => Materials Management => Purchasing => Create Purchasing Group
TCode: OME4

On display IMG screen select Maintain Purchasing Group execute icon by following the above path.
Select New Entries icon.

Enter the name of purchasing group along with the description of it with telephone no., fax no, etc.
Click on save icon. A new Purchasing Group will be created.
Organizational units combined altogether form the framework of company. These organizational
units can be considered as different levels which describe the structure of an enterprise. Every
level has some particular functionality associated with it. Also every level in one or other way is
related to each other. These levels are placed according to some hierarchy company being at the
top.

To establish relationship between these levels we have to assign them to one or other in such a
way that they still lie in the same hierarchy.

Plant to Company code

Purchasing organization to company code

Purchasing organization to Plant

Standard purchasing organization to plant

All the assignments in SAP will be done through Display IMG screen as shown below.
Path to reach Assignment: IMG => Enterprise Structure => Assignment
Plant to Company Code
Plant is one level below company code. So we need to assign plant to company code. Following
steps will take you through the procedure of assigning plant to company code:

Path to assign plant to company code:

IMG => Enterprise Structure => Assignment => Assign Plant to Company Code
TCode: OX18

On display IMG screen select Assign plant to company code execute icon by following above path.
Select New Entries icon.

Enter name of plant and company code. Click on save. Plant is now assigned to company code.
Purchasing Organization to Company Code
Purchasing organization can be at company code level i.e. centralized purchasing organization. So
we need to assign this purchasing organization to company code. Following steps will take you
through the procedure of assigning purchasing organization to company code:

Path to assign purchasing organization to company code:

IMG => Enterprise Structure => Assignment => Materials Management => Assign Purchasing
Organization to Company Code
TCode: OX01

On display IMG screen select Assign Purchasing Organization to Company Code execute icon by
following the above path.

We can view existing assignment and also we can change accordingly. Click on save after making
changes. Purchasing organization is now assigned to company code.

Purchasing Organization to Plant

Purchasing organization can be at plant level i.e. plant specific. So we need to assign this
purchasing organization to plant. Following steps will take you through the procedure of assigning
purchasing organization to plant:

Path to assign purchasing organization to plant:

IMG => Enterprise Structure => Assignment => Materials Management => Assign Purchasing
organization to Plant
TCode: OX17

On display IMG screen select Assign purchasing organization to plant execute icon by following the
above path.
Select New Entries Icon.
Enter name of plant and purchasing organization. Click on save. Purchasing organization is now
assigned to plant.

Standard Purchasing Organization to Plant

Standard purchasing organization is the default purchasing organization. We can sometimes
assign standard purchasing organization to some specific plant if we want to have default
purchasing organization for that plant. Following steps will take you through the procedure of
assigning standard purchasing organization to plant:

Path to assign standard purchasing organization to plant:

IMG => Enterprise Structure => Assignment => Materials Management => Assign Standard
Purchasing Organization to Plant
TCode: SPRO

On display IMG screen select Assign standard purchasing organization to plant execute icon by
following above path.
We can view existing assignment and also we can change accordingly. Click on save after making
changes. Standard purchasing organization is now assigned to plant.
SAP R/3 works on real time data that is there is no time lag between data entry and data
availability. The important thing while creating any data is to maintain data integrity. SAP R/3 data
is categorized into two:

Master data - Data that is created centrally and it is valid for all applications. It remains
constant over the time but we need to update it on regular basis. For Example: Vendor is a
type of master data that is used for creating purchase orders or contracts.

Transactional data - Data that is associated with processing of business transaction is

Transactional data.

SAP Master Data is of following two types:

Material Master Data

Vendor Master Data

Material Master Data

The key points about material master are as follows:

This is the enterprise main source of material specific data. This data will include information
on the materials that a company can procure, or produce, or store or sell.

Material is also called item, goods, products. The information of the material like material description,
material UOM material weight etc. maintained in SAP system is called material master data.Material
master has the four characteristics which will be discussing one by one in below context.

Material Types
Materials with some common attributes are grouped together and they are assigned to a material
type. This will differentiate materials and allow organization to manage different materials in
systematic manner in accordance to company’s requirement. For example: Raw Material, Finished
Products are some of the material types. Material type can be created by following the below
steps.

Path to create material type:

IMG >= Logistics General >= Material Master >= Basic Settings >= Material Types >= Define
Attributes of Material Types
TCode: OMS2

On display IMG screen select Define Attributes of Material Types execute icon by following the
above path.
Select New Entries icon.
Fill in the required information like name of material type and description. Click on save. A new
material type will be created.

Material Groups
Material group is a wider range of material type. Materials with some common attributes are taken
together and they are assigned to material group. For Example: Suppose we have some materials
which need packaging, so there material type can be electrical or food products but we can group
these material types and put them in packaged material group. Material Group can be created by
following below steps:

Path to Create Material Group:

IMG => Logistic General => Material Master => Settings for Key Fields => Define Material Groups
TCode: OMSF

On display IMG screen select Define Material Groups execute icon by following the above path.
Select New Entries Icon.

Enter the name of material group along with its description. Click on Save. A new material group
will be created.
Number Range
When we create material master record every material is recognized by a number, that number
will be unique and known as material number. We can assign number to material through two
ways:

External number assignment - While creating material you have to enter your own number
containingalphabetsordigits, and that should be unique.

Internal number assignment - While creating material you need not enter any number,
system will automatically generate a unique number to that material.

Define Number Range:

Internal number range can be defined by following the below steps:

Path to Create Number Range:

IMG => Logistic General => Material Master => Basic Settings => Material Types => Define
Number Range for Each material Type
TCode: MMNR

On display IMG screen select Define Number Range for Each material Type execute icon by
following the above path.
Select Intervals Icon.

We can define number range here and EXT

externaltab, ifitischeckedthenexternalnumberassignmentcanbedoneinthatmaterial. Click on save. Number Range is
now defined for the material.
Assignment of Number Range:

After defining we need to assign it to material group. Number range can be assigned by following
the below steps.

In the same screen as shown above select Groups tab.

For a particular material group we can assign number range here. Click on save. Number range is
now assigned to material group.
Material Master Creation
Material master contains all materials that a company procures produces or sells. Material Master
is a central data that is available at all the levels. Material can be created by following the below
steps:

Path to create Material Master:

Logistics => Materials Management => Material Master => Material => Create Material
TCode: MM01

Note: For any create transaction we use 01, for edit 02, for display 03 as suffix.

On SAP Menu screen select create icon by following the above path.
Fill in all required details like material number ifexternalnumberassignment, material type, industry
sector.

Select the views you want to maintain for your material.

Enter name of plant and storage location.

Enter the required information in your material views like unit of measure, currency, standard
price, moving price etc. Click on save. A new material will be created.
Vendor Master Data
The key points about vendor master are as follows:

This is the enterprise main source of vendor specific data. This data will include information
on vendors from which a company can procure or it can sell.

Vendor Master Record will contain information like vendor's name, address.

Data in vendor master record is divided into three categories:

General Data:General data is maintained at client level and it is valid for all organizational
levels.
Accounting Data:Accounting data is maintained at company level and it is valid for all
plants belonging to that company.
Purchasing Data:Purchasing data is maintained at purchasing organization level.

Vendor master has the three characteristics which will be discussing one by one in below context.

Vendor Account Group

Vendors are categorized according to requirements and some of the vendors having similar
characteristics are grouped together and placed in one category. For Example: All local vendors
can be placed under one account group. Vendor Account group can be created by following the
below steps.

Path to create Vendor Account Group:

IMG => Logistic General => Business Partner => Vendors => Control => Define Account group
and field selectionvendor
TCode: OMSG

On display IMG screen select Define Account group and field selection vendor execute icon by
following the above path.
Select New Entries icon.

Fill in all necessary details like name of account group, general data, and field status. Click on
save. A new Vendor Account Group will be created.
Number Range
When we create vendor master record every vendor is recognized by a number, that number will be
unique and known as vendor number. As discussed in material master, in similar way we have
external as well as internal number assignment for vendor master.

Define Number Range:

Number range can be defined by following the below steps:

Path to create Number Range:

IMG => Logistic General => Business Partner => Vendors => Control => Define Number Range
for Vendor master record
TCode: OMSJ

On display IMG screen select Define Number Range for Vendor master record execute icon by
following the above path.
Select change Interval icon. It will create number range for customer account.

Select the Insert Interval Icon.

We can define number range here and EXT
externaltab, ifitischeckedthenexternalnumberassignmentcanbedoneinthatvendor. Click on save. A new Number
Range will be created.

Assignment of Number Range

After defining we need to assign it to vendor group. Number range can be assigned by following
the below steps.

On the same screen as shown above select Number Range tab.

For a particular vendor group assign number range here. Click on save. Number range is now
assigned to vendor group.
Creation of Vendor Master
Vendor Mater contains list of vendors from which a company can procure or it can sell. Vendor
Master can be created by following the below steps:-

Path to create Vendor Master:

SAP Menu => Logistics => Material Management => Purchasing => Master Data => Vendor =>
Central => Create
TCode: BP

On SAP Menu screen select create for central vendor data execute icon by following the above
path.

Fill in all required details like company code, purchasing org, vendor no.Ifexternalnumberassignment.

Fill in all details of vendor’s address like street name, postal code, country.
Fill in the necessary bank details of vendor.

Fill in the necessary accounting information of the vendor.

Fill in the terms of payment that are defined between company and vendor. Click on save. A new
vendor master will be created.
SAP R/3 works on all real time data that include material master and vendor master. Material and
vendor master are separate data records for keeping information of materials and vendors from
which material is procured. The combined information of material and vendor altogether is kept in
a record that we call as purchase info record. The key points about purchase info record are as
follows:

Purchasing info record stores information on material and vendor supplying that material.
For Example: Vendors current price of a particular material is stored in info record.

Purchase info record can be maintained at plant level or at purchasing organization level.

Info record can be maintained for four procurement types which are as follows:
Standard: Standard info record has information on standard orders
ordersincludedetailsofvendorandmaterial. This info record will include vendors price for supplying the
particular material.
Subcontracting: Subcontracting info record has information on subcontract orders. This
info record will include price for assembling the raw material that is supplied by the ordering
party.
Pipeline: Pipeline info record has information on material that is provided by vendor through
pipes. For Example: like water,electricity.
Consignment: Consignment info record has information on material that is kept at ordering
party premises. This info record contains vendors price that is to be paid for withdrawing
material from consignment stock.

Creation of Purchase Info Record

Purchase info record can be created by following the below steps:

Path to create Info Record:

Logistics => Material Management => Purchasing => Master Data => Info Record => Create
TCode: ME11

On SAP Menu screen select Create icon by following the above path.
Enter the vendor number and in info category select standard or subcontracting or pipeline or
consignment according to the requirement.

Fill in required details like material group, 1st/2nd/3rd reminder, vendor material number,
personal details, order unit, origin data and sort term.
Provide the info record note that can be called as info record description. Click on save. A new info
record will be created.
The combined information of material and vendor altogether is kept in a record that is known as
purchase info record. But a particular material can be ordered from different vendors in different
time intervals. This information can be maintained in a list that is called as source list. The key
points about source list are as follows:

Source list include list of possible sources of supply for a material over a given framework of
time.

Source list specifies the time period of ordering of a particular material from a given vendor.

Source list can be copied from one plant to another plant.

Manual Creation of Source List

Source list can be created manually by following the below steps:

Path to maintain Source list:

Logistics => Material Management => Purchasing => Master Data => Source List => Maintain
TCode: ME01

On SAP Menu screen select Maintain execute icon by following the above path.
Enter the material number for which you want to maintain source list and respective plant details.

Fill in all necessary details like valid periods, name of vendor, purchasing organization. Click on
save icon. Source list for the material is now maintained.

The process of buying materials and obtaining services from vendors or dealers is procurement.
The steps which are required to procure a material forms the procurement cycle. Every
organization performs some common sequential steps so that a material can be procured in right
quantity at the right price. The important steps in procurement cycle are as follows:

Determination of Requirement

Creating Purchase Order

Posting Goods Receipt

Posting Invoice

Determination of Requirement
This is the first step in procurement cycle. It is the logical subdivision where it is determined that
what material or services are required by company, and which supplier can fulfill the requirement.
A list of requirements is made and then it is approved by senior authority within the organization.
After approval, formal list is made that is known as purchase order with one more level of approval
which is sent to the vendor.

Creating Purchase Order

Purchase order is the formal and final confirmation of the requirements which is sent to vendor to
supply material or services. Purchase order will include important information like name of
material with its corresponding plant, details of purchasing organization with its company code,
name of vendor,and date for delivery of material. Purchase order can be created by following the
below steps:

Path to create Purchase Order:

Logistics => Materials Management => Purchasing => Purchase Order => Create => Vendor/
Supplying Plant Known
TCode: ME21N

On SAP Menu screen select Create Vendor/Supplying Plant Known execute icon by following the
above path.

Fill in all necessary details like name of vendor, purchasing organization, purchasing group,
company code, details of material like material number, price, currency, plant.
Fill in all necessary details under Item by selecting the tabs like Invoice/Delivery Tab
Providethetaxcode, Paymenttermsandconditions, andincoterms, Assignment Tab (Provide the valid G/L code,
business area, and WBS element. Click on save. A new Purchase Order will be created.

Posting Goods Receipt

After processing of purchase order by vendor, material is delivered to ordering party and this
process is called as goods receipt. So, goods receipt is the phase in which the material is received
by the ordering party and the condition and quality are verified. Once material is verified against
quality then goods receipt is posted. Goods receipt can be posted by following the below steps.

Path to post Goods Receipt:

Logistics => Materials Management => Inventory management => Goods movement => Goods
movement
TCode: MIGO

On SAP Menu screen select Goods movement MIGO execute icon by following the above path.

Fill in all necessary details like movement type101forgoodsreceipt, name of material, quantity
received, detail of storage location and plant in which the material will be placed. Click on save.
Goods Receipt is now posted for the material.
Posting Invoice
Invoice is received from the vendor after goods receipt, and then invoice is verified by the
ordering party. So, this is the phase in which the vendor seller is paid from the company and
reconciliation of the invoice and PO is accomplished. Invoice can be posted by following the below
steps:

Path to post Invoice:

Logistics => Materials Management => Logistic Invoice verification => Document Entry => Enter
Invoice
TCode: MIRO

On SAP Menu screen select Enter Invoice execute icon by following the above path.
Fill in all necessary details like invoice posting date, amount that is paid to vendor along with
quantity for which amount is paid. Click on save. Invoice is now posted for the goods receipt.
Procurement in every organization starts with gathering requirements. Once requirements are
gathered we need to inform the purchasing organization. Purchase Requisition is a document that
will contain list of requirements. The key points about purchase requisition are as follows:

Purchase requisition is a request that is made to purchasing organization to procure certain

list of material.

Purchase requisition is an internal document; specifically it remains within the organization.

Purchase requisition needs approval from purchasing organization.

If purchase requisition is approved then changes are possible only to limited extent.

Purchase requisition can be created for the following procurement types:

Standard: Getting finished material from vendor.
Subcontracting: Providing raw material to vendor and getting finished material.
Consignment: Procuring material that is kept in company’s premises and paying to vendor
for that.
Stock transfer: Getting material from within the organization.
External service: Getting services like maintenance from third party vendor.

Create Purchase Requisition

Purchase Requisition can be created by following below steps:

Path to Create Purchase requisition:

Logistics => Materials Management => Purchasing => Purchasing Requisition => Create
TCode: ME51N

On SAP Menu screen select Create execute icon by following the above path.
Fill in all required details like name of material, quantity, delivery date, material group, plant. Click
on save. A new Purchase Requisition will be created.

After creating purchase requisition, we need to send our requirements to vendor. Requirements to
vendor are sent through a document that is known as purchase order. Purchase order can be
directly created from purchase requisition.

Creating Purchase Order from Purchase Requisition

Purchase Order from purchase requisition can be created by following below steps:

TCode: ME21N

Enter TCode to go to purchase order home screen. Select Purchase requisition as shown in below
image.
Provide purchase requisition number for which you want to create purchase order. Then select
execute icon.

Drag the standard reference Purchase requisition to the cart next to NB Standard PO.
Verify the details of purchase order and do the necessary changes as per requirement. Click on
save. Purchase order from purchase requisition will be created.