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What is SAP Purchase Order and its Types?



The SAP MM module takes care of the purchasing process in any business or company. SAP ERP is used to make the process of procurement easier and efficient with respect to time and money. Many goods and services can be procured and the process starts with the creation of a purchase order. A purchase order is a formal document given to vendors which contains the goods and services that need to be procured and varies from product to product. These transactions are verifiedby SAP purchase order transaction code.

Types of purchase orders
·         Subcontracting Purchase Order
·         Consignment Purchase Order
·         Stock Transfer Purchase Order
·         Service Purchase Order
Subcontracting Purchase Order

1.      In this type of purchase order, the ordering party gives the components to the vendor (the subcontractor) and the vendor then creates a product. The purchase order is used by the company when the product is ordered. The subcontractor gets the components to manufacture the ordered product by the company listed in the purchase order.

2.      The transaction code (TCode) to create the purchase order is ME21N under the subcategory L. This code should be added in the command field which takes the employee to the purchase screen. The employee must provide all the required details such as the name of the vendor, the name of the material, item category, the factory for which the material has been procured, and the date of delivery. The subcontracting purchase order will be created once the employee clicks save.

Consignment Purchase Order

1.      The organization store contains the material but it belongs to the vendor. The vendor must be paid if the material is procured and used from the consignment stocks. 

2.      The transaction code (TCode) for the creation of the purchase order is ME21N under the subcategory K. The employee can enter the code in the command line and then add the requirements such as the name of the vendor, item category, the name of the material, thefactory for procurement, and the date of delivery. After clicking save, the consignment purchase order can be created.

Stock Transfer Purchase Order

1.      In this type of procurement, the goods or materials are procured and supplied within the company itself. The goods are requested by the receiving plant/issuing plant from another plant through an internal route. The purchase order issued in this case is of a special type called ‘stock transport order’.

2.      The transaction code (TCode) for the creation of the purchase order is ME21N under the subcategory U.The purchase order screen pops up on the screen after the TCode is entered.The employee must enter the details such as the vendor’s name, item category, plant for the which the material must be procured, date of delivery, and the name of the material. The stock transfer purchase order is created once the employee clicks the save button.

Service Purchase Order

1.      In this type, a third party is involved in the transaction and they provide the services to the company. Some of them include maintenance services such as electricity and oiling of machines.

2.      The transaction code (TCode) for the creation of the purchase order is ME21N under the subcategory D. By providing the necessary details, the service purchase order can be created.

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