The SAP Peer-to-Peer Cycle

Procure-to-pay process overview Procure-to-pay is the process of integrating purchasing and accounts payable systems to create greater efficiencies . It exists within the larger procurement management process and involves four key stages: Selecting goods and services. Enforcing compliance and order.

1.3 Invoice Receipt – MIRO: P2P Cycle in SAP

Please input the date of the invoice, reference details, and purchase order number before clicking on the enter button.

To view the accounting records prior to saving, you can select the simulate option and review the accounting entries.

If everything appears satisfactory, proceed by selecting the post option.

To access Accounting Documents, go to the Menu and select Invoice Document, then choose Display.

Select the “Follow-on Documents” option and then proceed to open the accounting document by double-clicking on it.

1.4 Validate Material/Stock Report – MB5B

Input the information for Material, Plant, and company code and run the process.

Goods Issue for Consumption in SAP – MB1A

2. Capex Purchase Order Process in SAP refers to the procedure followed for acquiring capital expenditure items within the SAP system. This process involves creating and approving purchase orders specifically for capital expenditure purposes, ensuring that all necessary financial controls and authorizations are in place before proceeding with the procurement of these assets.

In this procedure, I will demonstrate the steps to generate an Asset purchase order. To begin with, I have already established an asset in the SAP system using transaction code-AS01 beforehand. However, it is also feasible to create an asset while creating the purchase order itself.

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2.1 Creation of Purchase Order (ME21N)

When creating a Capex PO, it is important to choose account assignment category-A and select the appropriate document type – Capex PO.

At the line item level there you need to select the Account assignment – ‘A’ (Asset related) enter short text, quantity, delivery terms, plant, and storage location.

If you have already created the Asset through AS01, please select it from the account assignment tab. Otherwise, you can create a new Asset here by using the provided option. After making your selection or creating a new Asset, remember to save your changes.

Note: If you want, you can create the Asset on the same screen. But here I am not creating, because I have created the Asset using (T-Code-AS01)

The PO Document mentioned below has been created by the system.

2.2 Receipt of Goods in SAP (MIGO)

Click on enter, enter the quantity in the delivery note and click on the ‘Item ok’ check box and save.

The material document has been created by the system, but it does not generate any FI/Accounting document as part of this process. Only an MM document is generated. For further details, please refer to the screens below.

On the same page, click on Display under Goods Receipt.

2.3 Posting Invoices (MIRO)

To view the document in simulation mode, simply click on the simulate button. If everything appears to be correct, proceed to post it.

Navigate to the Menu and select “Invoice document” followed by “Display.” This will allow you to view the IV document.

The system has been generated the below documents.

To view the accounting entry, simply click twice on the relevant document.

P2V Cycle in SAP

We have now gained knowledge about the various situations in the P2P cycle and received comprehensive information regarding the Standard PO and Capex PO processes. This process is not limited to just the ECC system, but also applies to the S4HANA system. In the case of S4HANA, we can utilize specific Fiori Apps instead of having to remember transaction codes. I trust that this blog post will be beneficial for someone, and I plan to cover additional scenarios in future posts.

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The 12 steps involved in the P2P cycle

The P to P cycle in SAP involves several steps, including:

1. Needs identification

2. Supplier validation

3. Requisitioning

4. Approval and budget authorization

5. Purchase Order issuance

6. Order fulfillment and delivery

7. Delivery confirmation

8. Invoicing

What does the P to P cycle in accounts payable entail?

Procure-to-pay (P2P), also referred to as purchase-to-pay, is a comprehensive process that involves various steps such as requisitioning, purchasing, receiving, paying for, and accounting for goods and services. This cycle encompasses the entire journey from the point of order placement to the final payment settlement. The P2P process plays a crucial role in ensuring smooth operations within an organization by effectively managing procurement activities.

The first step in the P2P cycle is requisitioning. This involves identifying the need for certain goods or services within an organization and creating a formal request known as a purchase requisition. Once approved by relevant authorities, this requisition serves as authorization to proceed with further procurement activities.

Once suppliers receive purchase orders, they initiate delivery of goods or provision of services according to agreed-upon terms. Receiving refers to verifying whether delivered items match what was ordered in terms of quantity and quality. It ensures that any discrepancies are promptly addressed before moving forward with payment processing.

Payment processing forms another critical aspect of the P2P cycle. After successful verification during receiving, invoices are generated by suppliers based on delivered goods/services along with their respective costs. These invoices undergo validation against corresponding purchase orders and receipts before being processed for payment settlement.

The P2P cycle in s4 Hana: What is it?

The P2P (Procure to Pay) process in SAP involves several key steps that ensure the smooth flow of purchasing and payment activities. These steps include purchase requisition, purchase order, goods receipt, invoice receipt, and vendor payment.

To initiate the procurement process, a purchase requisition is created by the requesting department or individual within an organization. This document specifies the details of the required goods or services such as quantity, delivery date, and preferred vendor. The purchase requisition then goes through an approval workflow before it can be converted into a purchase order.

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Following successful goods receipt processing comes invoice receipt where vendors submit their invoices for payment consideration. Invoices are matched against corresponding goods receipts to verify accuracy before being processed further for payment approval.

What does P2P strategy mean?

Word-of-mouth is simply spreading information through conversations between people. When satisfied customers talk positively about a brand, it creates buzz and generates interest among potential new customers. This kind of organic promotion can be very effective because people tend to trust recommendations from friends and family more than traditional advertising.

Explaining the P2P Cycle in an Interview with an Example

1. Identifying potential suppliers

2. Negotiating prices for goods and services

3. Analyzing purchase receipts

4. Managing vendor relationships

5. Creating purchase orders

6. Receiving goods or services

7. Verifying invoices against purchase orders and receipts

8. Processing payments to vendors

These tasks are crucial in ensuring efficient procurement processes within an organization while maintaining cost-effectiveness and quality control standards.

Understanding the P2P process in auditing

To put it simply, a P2P cycle refers to the steps involved in purchasing goods or services within an organization. It begins with creating a contract that outlines specific terms and conditions between buyers and suppliers. Once this is done, purchase orders are generated based on these contracts to request desired items.

Next comes receiving goods or services as per the purchase order. This step ensures that what was ordered matches what has been delivered by suppliers. Finally, payments are made according to invoices received from suppliers for their products or services.

1) Contracts are created between buyers and suppliers.

2) Purchase orders are generated based on these contracts.

3) Goods/services are received as per the purchase order.

4) Payments are made based on supplier invoices.

By conducting a full scope P2P audit, organizations can identify any discrepancies or non-compliance issues throughout this entire cycle and take necessary actions to rectify them.