SAP S/4HANA PURCHASE ORDER AND ORDER PROCESSING

Traditionally, the SAP ERP system requires numerous steps for creating a purchase order and processing it:

Inputting information, document verification, identifying errors, providing additional necessary details, rechecking, etc.

Even with templates (e.g., a previous purchase order), many error sources must be identified and corrected before the purchase order can be submitted.

The purchase order processing in SAP S/4HANA is more streamlined, simpler, and faster:

Through a central window with automatically populated fields and the relevant number of fields.

The S/4HANA app “Manage Orders” allows the user to focus on the relevant fields (or mandatory fields) of the order and display further detailed information in additional tabs.

• • Definition: What is an SAP order?
  • Structure: How is the SAP order structured in principle?
  • Functionality: What functions can be used for orders with SAP S/4HANA?
  • New User Experience: What Fiori apps can be used for order processing?
  • Order Types: What are the differences between standard orders, framework orders, and scheduling agreements?
  • Order Approval: How does the approval of orders work and what options are available?
  • Order Monitoring: How to keep track of open orders and delivery dates?
  • Order History: How can past orders be viewed and evaluated? Integration with other modules in SAP: How does the order affect other modules?
  • Integration with other modules in SAP: How does the order affect other modules?

An SAP order is a central process in procurement management that can be optimized using the SAP S/4HANA system.

It represents the formal order to a supplier and includes information such as specification, quantity, price, delivery date, and payment terms.

By using SAP S/4HANA, professionals and executives can make their procurement more efficient by further digitizing and automating the ordering process. This saves time and costs and improves transparency in procurement.

An order consists of a document header, a line item overview, and items.

The information contained in the header relates to the entire order. For example, payment and delivery terms are part of the document header.

Each line item has a procurement type assigned. The following procurement types are distinguished:

• Standard
• External processing
• Consignment
• Stock transfer
• Service

The total quantity of material to be delivered or service to be provided in the order item can be subdivided into various partial quantities with associated delivery dates.

For order items assigned for external processing, the material components to be provided can be specified for each delivery date.

An order item of the service procurement type ideally contains a service specification. Structure levels organize the service specification, and service lines specify the ordered quantity with the unit.

For services that cannot be precisely specified, value limits are specified instead of service lines. If services are called off from contracts, the order item can include a value limit referring to a specific contract.

Additional filter criteria are available in the purchasing overview (see figure) for the purchasing organization, material, material group, currency, vendor, category, and purchasing group.

The invoice plan is a tool used to determine when and in what amount invoices should be created. Invoice creation is independent of the receipt of goods or services (service entry).

In consultation with vendors, invoices can be automatically generated by the system based on invoice plan data and their payment initiated. The system uses Automatic Goods Receipt Settlement (ERS) for this purpose.

The flexible workflow is a cross-functional feature that allows workflows for approval processes to be set up based on conditions. Workflows with automatic, single-stage, or multi-stage approval can be set up for orders. Each step can be assigned to one or more approvers. When specifying an approver, a role can be used or specific users or teams can be assigned as approvers. Approvers can then approve or reject their work items in the “My Inbox” app.

Product compliance allows the management of product compliance by assessing marketability in different countries and regions, classifying products according to hazardous materials regulations, sending and evaluating required safety data sheets, and assessing whether the supplier is a valid supplier for the product.

The fields displaying the product compliance status of an entire order are available on the product compliance tab at the header level of the order. In contrast, the fields available on the product compliance tab of the item display the product compliance status of an item.

If necessary, Incoterms can be assigned to each purchase order item in S/4HANA.

• • Editable short text of the order
  • Access to attachments for the order from all apps for order processing

The following apps are available for order processing:

If you aim to optimize your procurement with SAP S/4HANA, it’s crucial to understand the various types of orders. There are three main types of orders: standard orders, frame orders, and delivery schedules.

Standard orders are individual orders placed for the purchase of goods or services. They are typically used for short-term needs and have a fixed quantity and delivery date.

Frame orders, on the other hand, are long-term orders placed for the purchase of goods or services with a specific supplier. They have a fixed total quantity but are divided into partial deliveries that can occur at different times.

Delivery schedules are orders placed for the continuous supply of goods or services. They include a detailed breakdown of the quantity to be delivered and the planned delivery dates over a specific period.

Using the appropriate type of order in SAP S/4HANA enables efficient and transparent procurement. While standard orders are suitable for short-term needs, frame orders and delivery schedules offer better control over long-term procurement processes.

Order approval is a critical step in the procurement process and can be made more efficient than ever with SAP S/4HANA.

The functionality of order release with SAP S/4HANA is straightforward. After an order is created, it can be sent for release to the responsible person. They receive a notification and can review and release the order directly in their SAP system.

Alternatively, automatic release rules can be defined to expedite the process and minimize manual review.

But what other options does SAP S/4HANA offer?

In addition to individual order release, group releases can be set up. In this case, all members of a specific group are notified about an order and can release it together. This speeds up the release process and facilitates efficient collaboration.

Order monitoring is a crucial process to ensure the smooth execution of orders and deliveries. With SAP S/4HANA, you have the opportunity to effectively optimize this process and maintain an overview of open orders and delivery dates.

A proven approach is to utilize the order monitoring module in SAP S/4HANA. In this module, you can centrally manage all relevant information regarding your orders and deliveries. You gain a comprehensive overview of open orders, delivery dates, and the current status of deliveries. Through clear visualization and user-friendly filtering functions, you can search for specific orders or deliveries and prioritize them accordingly.

Order history allows you to view and evaluate past orders. The purpose of order history is to bring transparency to your procurement processes. You can analyze past orders and derive insights for future orders. For example, you can create supplier evaluations or negotiate better terms.

But what exactly is order history? It is a feature in SAP S/4HANA that provides an overview of all placed orders. Here, you can view information such as order number, delivery date, ordered quantity, price, and more.

The process for viewing and evaluating order history is straightforward. You navigate to the corresponding area in SAP S/4HANA and input the desired filter criteria, such as the timeframe or supplier. Then, you receive a list of all relevant orders that you can examine in more detail.

Integration with other modules in SAP plays a crucial role in optimizing procurement with SAP S/4HANA. Particularly, the impact of an order on other modules such as warehouse management, controlling, or accounting is significant.

For example, integration with the warehouse management module enables automatic updating of inventory levels and tracking of deliveries. This facilitates efficient inventory management and avoids shortages.

The controlling module is also influenced by the order. Cost centers can be automatically charged, ensuring precise cost tracking.

Additionally, integration with the accounting module enables automatic order booking and seamless data processing.