Definition: A client is the grouping of several legally independent units that pursue a common purpose, such as a corporation.

The client is at the top level of the organizational structure. Central control tables are maintained at this level. While the program logic (in ABAP) generally runs across clients in SAP, processes can be configured dependent on the client. With increasing globalization and the standardization of corporate-wide processes, the single-client concept has gained in importance. Only within a client can cross-module processes be configured to fully integrate materials management with finance and controlling. Consolidating SAP systems within a corporation in today’s world means migrating organizational data, master data, and transactional data to a single SAP system with only one SAP client.


Definition: The company code represents the level of legally independent, accounting companies.

While in older SAP system configurations the separation of independent accounting companies was still separated by SAP clients, nowadays separation by company codes is usually sufficient. This has the advantage that some processes can also be established across company codes. This includes, for example, purchasing through jointly negotiated catalogs or the structured approval process of a purchase order.


Definition: The purchasing organization is responsible for procuring materials and services, including negotiating purchasing conditions with suppliers for one or more plants and company codes.

The current standard in SAP is configured so that a central purchasing organization assumes responsibility for both strategic and operational purchasing for several company codes.


Definition: The plant is a central element of materials management and is the planning and stock-holding unit.

The standard configuration in SAP requires a plant to be assigned to a company code. However, several plants can be assigned to one company code.


Definition: The storage location represents the consolidation of storage bins within a plant.

This enables material stocks within a plant to be managed separately by storage location. Disposition of stock-managed material can be divided into several storage locations. If withdrawals are made by users based on SAP reservations, users or logic can decide from which storage location the material should be withdrawn.


Definition: The purchasing group represents a purchaser or a group of purchasers.

It is mainly used to control evaluations and authorizations. The purchasing group is also output as the responsible contact in purchase orders that are sent to suppliers from SAP.



Catalog articles are particularly relevant for indirect procurement. “Indirect” refers to non-production materials and services. The number of catalog articles available for purchasing can reach millions when taking into account the various suppliers and their offerings. Catalog articles can be stored in an electronic catalog and provided to users for selection.


All data on materials that a company procures, manufactures, stores, and sells are stored centrally in the data object “material master record”. It contains information about raw materials, merchandise, semi-finished products, or finished products. All data is managed cross-functionally and without redundancy. Most data can be maintained directly by the user, while some data is updated by the system, such as inventory data. The distinction between materials as inventory or consumable is important. Since various departments of a company work with the material master and deposit different information specific to their department, each department has its own view of the material master:

  • Basic data
  • Purchasing
  • Planning
  • Storage
  • Accounting
  • Forecasting
  • Quality management
  • Sales


When purchasing services, so-called service master records can be used analogously to material master records. The service master record describes the services and stores purchasing-relevant data such as quantity unit and material group. Individual service master records can be assigned to a service specification.


Important information about a company’s creditor business partners is stored in the vendor master record. The creditor can assume various so-called partner roles with respect to the company:

  • Order recipient
  • Goods supplier
  • Invoice issuer
  • Payment recipient

To allow accounting and purchasing to access and store their own data on vendors despite the shared master record, the master record is divided into the following areas:

  • General area
  • Area for the company code and account assignment data
  • Area for purchasing organization and other purchasing data

In larger companies with a heterogeneous SAP system landscape, one often encounters decentralized vendor management. This means that each SAP system manages its own vendor numbers and duplicates exist both within one SAP system and across multiple SAP systems. If a company plans to centralize its purchasing functions, then the non-harmonized vendor master data can be a major challenge.


The purchasing information record establishes the link between a material and a vendor master record. The purchasing information record can be maintained manually or automatically via the “InfoUpdate” indicator when creating an offer, contract, delivery schedule, or purchase order. This indicator also controls the updating of order data. When creating a purchase order, the user is shown the offer and order data (conditions, payment terms) contained in the purchasing information record as default values. This requires the user to order an SAP material and not a catalog item. The prices for the latter are fixed in the catalog system, not in the purchasing information record.


The source list can be used to manage sources of supply. It assists the user in finding sources of supply by suggesting the preferred source of supply. The allowed and disallowed sources of supply for a material in a particular plant and a predetermined period are listed in the source list. Each source of supply is defined by a source list entry. The source of supply can be defined as fixed or preferred for a period of time, or the material can be blocked for external procurement. The source list can be created manually or automatically by the system. You can choose between:

  • Single-item procedure: A source list is created for a material.
  • Collective procedure: A source list is created for several materials.


Conditions also belong to the master data. They serve to centrally determine prices for purchase orders and are automatically included when creating a purchase order. They are differentiated into:

  • Conditions in the contract
  • Conditions in the purchasing information record
  • Extended conditions

Conditions can include additional discounts or price surcharges. There is also the scenario where price conditions are assigned to their own vendor, such as a shipping company responsible for shipping the goods.


Agreements are an agreement with a vendor on a subsequently granted sales- or quantity-based bonus. The settlement can take place monthly, quarterly, or annually. In the standard, a distinction can be made between:

  • Vendor bonus: Based on sales
  • Material bonus: Based on quantity


Every purchase order triggered in SAP must include a delivery address. If no explicit address is entered, the delivery address of the specified plant, which must be indicated in the purchase order, is automatically used.

The delivery address can certainly be a problem when electronically integrating suppliers and marketplaces, provided that the address data is verified online but has been incompletely maintained in SAP. Similarly, it can also happen that a supplier only allows one delivery address per order, but SAP supports different addresses in the positions of an order.

If multiple delivery addresses are required within a plant or a storage location, these can be recorded in the purchasing master data. In addition, in the case of wage processing, the address of the wage processor can be stored as the delivery address if individual components are to be delivered directly there.



In SAP, a reservation is used to plan the retrieval of a material. There are processes such as MRP runs and maintenance that access stock-managed material and book it as a reservation document. At the same time, there is also the possibility that an employee reserves a material for a specific purpose. The reservation is always assigned an SAP material and the desired quantity. The storage location is supposed to determine which warehouse the material should be taken from.


The purchase requisition (PR) contains the requirement for a catalog item, material, service, or free text request. This prompts purchasing to obtain the corresponding material or service in the specified quantity by the specified deadline. A purchase requisition can be created manually or can arise as part of demand planning. Separate release procedures can be established for purchase requisitions. The assignment of a source of supply can be automatic if a unique source of supply is defined in the system, such as through a quotation, an order book, a framework agreement, or an info record. Alternatively, it can be done manually by the purchaser. The PR typically includes an entry screen, a summary of positions, and position details. Texts, account assignments, and delivery addresses, among other things, can be maintained there. The release of purchase requisitions is a process in which the recorded positions are approved for further processing. Depending on the value, merchandise group, account assignment type, and plant, it can be specified that a PR position may only be converted into an order after approval has been granted. The release of a PR position depends on the release conditions, release strategy, and release indicator. Purchase requisitions can be released individually or collectively. The manual conversion of the PR into a purchase order by a purchaser is a laborious manual process that can be increasingly automated with modern tools and artificial intelligence.


An inquiry is used to obtain quotes on prices, delivery times, as well as delivery and payment terms. It is usually created in the system and directed to one or more suppliers with the aim of receiving an offer by a specified deadline. In addition to the information from the purchase requisition, the inquiry contains information about the supplier as well as application and offer deadlines. An inquiry can be created for suppliers with master records or for so-called CpD (conto pro diverse) suppliers. In CpD supplier master records, the address is maintained only when the inquiry is entered. The inquiry is structured like other procurement documents. The inquiry header contains general information, such as the supplier’s address and the inquiry header text. The remaining part of the inquiry contains the material or service positions for which the supplier is expected to provide prices. An inquiry can be created using a template. For this purpose, a purchase requisition, another inquiry, or a framework agreement can be used.


When creating an offer, the data from the corresponding inquiry is taken over by the system. In addition, prices and conditions must be recorded. The offers are listed in a price comparison sheet, sorted by price so that they can be compared with each other. Interesting offer data can be stored long-term in an info record. The corresponding indicator must be set in the offer position. Rejection letters can be printed for offers where the “rejected” indicator has been set in the offer position. The inquiry and the offer are very simple documents in SAP ERP and have only very limited functions. Since suppliers almost never have access to their customers’ SAP ERP, they cannot post offers in the SAP ERP system.


Definition: An order is a formal request to a supplier to provide specific goods or services under specified conditions. Like a purchase requisition, an order distinguishes between a catalog item, material, service, or free-text request. The subsequent processes vary depending on the type of item ordered. If a material is ordered, it is also determined whether the material to be provided will be included in inventory or consumed. Furthermore, an order forms the basis for goods receipt and invoice verification. If a service is ordered, a service entry must be created before an invoice can be issued.

There are three forms of external orders:

  • Single orders
  • Contracts with subsequent call-off orders
  • Delivery schedules with delivery schedule lines

Single orders are usually used for materials and services that are procured irregularly due to their higher process costs. Call-off orders and delivery schedules with delivery schedule lines are used primarily for the regular procurement of recurring requirements. An order can be created with or without a template. Purchase requisitions, inquiries, or template orders are available as input aids. The current conditions of the supplier for the material are transferred from the purchasing info record to the order if a material is ordered.


Definition: A framework agreement is a long-term agreement with a supplier for the delivery of materials or services under predetermined conditions. A framework agreement refers to a defined period of time and a defined quantity or value. Contracts and delivery schedules are distinguished.


Definition: A contract is a framework agreement with a supplier that is fulfilled through individual calls.

Information about specific delivery dates or quantities is not included in the contract. Value contracts and quantity contracts are distinguished. When creating a value contract, the target value is set within the contract period. For a quantity contract, a target quantity is maintained. For a specific need, call-off orders are created with reference to the contract. Alternatively, a delivery schedule can be created with reference to the contract, for which delivery schedule items are generated by the demand planning run. When creating the call-off order or delivery schedule, data from the contract is transferred. Individual deliveries are made based on the call-off order quantities, which specify the exact order quantity and delivery date. Call-off documentation can be used to track completed calls.


Definition: A delivery schedule is a framework agreement under which materials are procured at predetermined dates within a specified time period under predetermined conditions.

A delivery schedule can be created with or without reference to a framework agreement request, an inquiry, or another delivery schedule. Disposition automatically generates delivery schedule items. Or, delivery schedule items are created without reference or with reference to a purchase requisition.