Purchasing Documents and Accounts Payable

Purchasing is the process of making sure that a steady stream of required materials is on the way to a company when and where you need them. SAP Business One helps run the purchasing process, starting with the purchase order and continuing with the rest of the purchasing documents. SAP Business One automatically captures information at each step so we always know whats on hand in inventory as well as the up-to-the minute financial state of your business.

Definition Of Terms

Purchase quotation is an offer or proposal containing a price commitment for specific goods or services that you would provide to a vendor. Purchase order (PO) is the document you provide to the vendor specifying the items or services you want to purchase, including agreed-to quantities and prices. A/P reserve invoice is similar to a PO but it includes a request for payment. It is used when the vendor requires prepayment before delivering an item or service. Goods receipt PO is the document that denotes the delivery of goods from a vendor to a company. It is used to update the inventory quantities and values. Goods return document is used to reverse a goods receipt PO after it has been posted. It is used whenever part or all of the goods received are returned to the vendor. Landed costs document is used when additional costs are involved in the purchase of items, usually from abroad, such as tariffs, brokers fees, and so on. A/P invoice (or A/P voucher) is the document into which accounts payable enters the vendors invoice information and sets up the payment. A/P credit memo (or A/P debit) is used to reverse the A/P invoicepartially or in itsentiretyafter it has been posted. It credits the company for the goods returned to the vendor.

Parts of a Purchasing Document1. Header fields appear in every window of a purchasing document. You enter vendor data and delivery dates here.2. Footer fields appear in every window of a purchasing document and contain the calculated totals for the purchase, including freight costs and tax. 3. Contents tab is where all the specific information about the ordered items or services is entered, such as quantity, price, item number, and description.4. Logistics tab contains the details about where the items or services as well as payments are to besent.5. Accounting tab contains the relevant general ledger (G/L) account information for the purchasepulled from the financial accounting master data.

To Create a Purchase Order Click the Purchase Order in Purchasing in the Module Menu.

To Locate Existing Vendor Information Click on the button to the right of the Vendor field in the document header or press the Tab key in the Vendor field. A List of Business Partners appears in a pop-up window. Select desired vendor, then click Choose.

To Add New Vendor Information Click on the New button on the bottom of the List of Business Partners pop-up window. It will open a Business Partner Master Data window.

To Choose What to Purchase On the Content Tab, Click the Item/ Service Type drop down list to choose what to purchase.

To Locate the List of Items Press Tab key in the Item No. field to open List of Items window. Select desired items, then click Choose. To enter a new item, click New button to open Item Master Data window.

To Insert Text or a Subtotal of the Preceding Row in the Content Tab Click on the Content Tab Field Then click on the Form Settings Icon on Navigation Bar. Select Table Format Tab, check both visible and active next to the Type Field. Click on the drop-down list in the Type field and select T (for text) or (for subtotal).

To Enter or Update Payment Method Click on orange arrow next to vendor field. Click on Payment Run tab. Check the Include Box next to desired payment method.

Inventory Impact of a Purchase Order The order quantities are listed in inventory management. You can view items and quantities on order invarious reports and windows, such as the inventory status report and the Item Master Data window.

To Create a Goods Receipt PO Select the document name in the module menu. Or by clicking Copy To button on the Purchase Order then choose Goods Receipt PO.To Create a Goods Return Document Select the document name in the module menu. Or by clicking Copy To button on the Goods Receipt PO then choose Goods Return.

To Enable Automatic Updates for the Landed Cost Go to Administration Click Setup In the Purchasing, Click Landed Cost to define the landed costs allocation account Go back to the Setup then click Inventory Select Customs Group to define the customs allocation and expense accounts.

To Create a A/P Invoice Select the document name in the module menu. Or by clicking Copy To button on the Purchase Order or Goods Receipt PO then choose A/P Invoice. Or by using Draw Document Wizard to select the data to copy from one or more existing POs or goods receipt POs.

To Create a A/P Reserve Invoice Select the document name in the module menu. Or by clicking Copy To button on the Purchase Order then choose A/P Reserve Invoice.To Create a A/P Credit Memo Open Blank Credit Memo Choose Vendor Select Copy Form then click A/P Invoices Select A/P Invoice and click Choose. Select Draw Document Wizard from Module Menu. Choose Customize then Next. Select items you wish to reverse and click Finish. Click Add to post it to A/P Credit Memo.

3 Part-Process of Ordering, Receiving, and Paying for Goods or Services

Getting Started Vendors Master Data contains current vendors Payment method is set Item master data contains goods and/or services previously purchased

Step 1: Purchase order Create a PO by selecting existing or entering new vendor and item data Specify Delivery Date in document header If vendor requires prepayment for goods or services, use an A/P reserve invoiceinstead of a PO

Step 2: Goods Receipt PO You receive items or services from vendor Document receipt of items or services using the goods receipt PO If you need to return goods after creating the goods receipt PO but before the A/P invoice has been posted, use the goods return document If you must account for additional import-related purchasing costs, use the landed costs purchasing document based on a goods receipt PO

Step 3: A/P Invoice You receive an invoice from vendor Enter invoice information into an A/P invoice, which allows payment to be issuedonce an invoice is posted If you return goods after an A/P invoice is posted, use an A/P credit memo

PurchasingPurchasingdocumentAccounting impactInventory impact

Purchase orderNo posting of value-based changesAllows viewing of orderedquantities in various reports andwindows, such as inventorystatus report and Item MasterData window

A/P reserveinvoiceDebits accrued payable/allocationaccount and credits business partnersA/P control accountAllows viewing of orderedquantities

Goods receipt PODebits inventory account and creditsaccrued payable/allocation accountIncreases inventory quantities

Goods returnDebits accrued payable/allocationaccount and credits inventory accountReduces inventory quantities

Landed costs

Debits inventory account and creditslanded-costs and customs account

Updates last purchase price ofimported item(s)containing allcosts that were allocatedinprice lists

A/P invoiceIf the A/P invoice is based on a goodsreceipt PO, debits accruedpayable/allocation account and creditsbusiness partners A/P control account

If the A/P invoice is not based on agoods receipt PO, debits inventoryaccount and credits business partnersA/P control accountPosts no changes in inventory(A/P invoice with reference togoods receipt PO)Posts inventory changes (A/Pinvoice without reference togoods receipt PO)

A/P credit memoDebits business partners A/P controlaccount and credits inventory accountReduces inventory quantities onlyif not based on goods return

FReport In CompSys1About SAP Business One(Purchasing A/P)

Javier, Joy Angelique P.BSA 2nd YearMay 19, 2015Maam Cruz