Purchase Order

Definition -Purchase order is a formal request or instruction from purchasing organization to a vendor /
a plant to deliver a qty of material / to perform services at a certain point of time.

Purchase Order (PO) is an external and a legal bound document.

Path- SPRO-IMG-Materials Management- Purchasing.

Configuration Details

1. Define Number Range-

Path- SPRO-IMG-Materials Management-Purchasing- Purchase Order-Define Number Range

(Q1 int & Q2 ext)

 2. Define Document Type-

Path- SPRO-IMG-Materials Management-Purchasing- Purchase Order-Define Document Type.

3. Define Screen layout at document level-

Path- SPRO-IMG-Materials Management-Purchasing- Purchase Order- Define Screen layout at

document level

4. Define Tolerance limits for price variance-

Path- SPRO-IMG-Materials Management-Purchasing- Purchase Order- Define Tolerance limits for

price variance

When procuring a PO , system checks whether the effective price of a PO item shows variances
compared with the evaluation price stored in the material master record, in addition it checks whether
the specified cash discount value is admissible.
Variances are allowed within the framework of tolerance limits. If a system exceeds a tolerance limit,
then the system will issue a ERROR message.

Variance types- PE & SE

The standard SAP System supplied contains the following tolerance keys:

a. PE Price variance, Purchasing

Tolerance limit for system message no. 207. This message appears if the specified effective price
exceeds the predefined tolerances when compared with the material price.

b. SE Maximum cash discount deduction, Purchasing

Tolerance limit for system message no. 231. This is a warning message, which appears when the
specified cash discount percentage exceeds the predefined tolerances.
 5. Define Reasons for ordering-

Path- SPRO-IMG-Materials Management-Purchasing- Purchase Order- Define Reasons for ordering

Creation of new Purchase order

Configuration-

T- Code – ME21N- Create Purchase order

Key points - Vender should be created, Purchase organization should be there, Info Record and Source
list should be created for the particular material.

PO number can be entered manually (External) or internal (System).

Document Date is the PO created date, if we want to use the legacy dates, the dates can be modified by
clicking on the document dates section.
The purchase Order window consists of 3 sections

1. Header
2. Item
3. Item details.

1. Header Section –

1. Delivery Invoice-Contains Details from VM, we can also change the data here in PO like INCO
terms , Payment terms etc.

2. Conditions tab – Mainly contains the Net price actual price and any discounts details for the
material. If creating PO for more than one material , then the Actual price is updated combining
overall

Individual Actual price details of material can be viewed in Conditions tab of Item Details section.
 3. Header Text tab - All text data can be maintained here for the PO.

Similarly individual texts related to a particular material can be maintained at text tab of Item details
Section

4. Header Address, Communication tabs – Address of Vender is maintained here for

communication.
 5. Partners-If any partners to be assigned for std PO , is updated here .
6. Additional Data , Org data Status are the other tabs of header sections.

2. Items Section-

Material details for PO are entered.

If the material is Non-Stock material, then Account Assignment category is updated

Delivery date – Date is picked on lead time .

Net price – Price picked from the IR.

Return Item and Free Items- Offers when the field is selected.

The below Screenshot can see the material 13 , free item will not have net price .
If you are creating PO w.r.t to PR / Contracts /RFQ, below sections are updated .

4. Item Details Section.

Conditions Tab-If freight vender is different vendor all the details can be maintained here.

Select – Details , can change the vender details as shown below.

Finally all the details are updated , Click Check and check out forany errors / Warning messages .

Click Save , Purchase Order is created for the Selected Vender.

A standard PO 8500000001 has been created