Flow of Purchase ( Inventory Procurement Process ) in SAP ERP

PURCHASE REQUISITION  ( ME51N )

After determining the requirement of stock the concerned department will raise a purchase requisition to the Purchasing department through SAP ERP.

PURCHASE REQUISITION (Click on picture to enlarge)

PURCHASE ORDER ( ME21N )

The Purchasing department will raise a Purchase Order in SAP ERP once the supplier is determined.

PURCHASE ORDER (Click on the picture to enlarge)

ON RECEIPT OF RAW MATERIAL ( MIGO )

SAP Menu -> Logistics -> MM ->Inventory Management -> Goods Movement - > MIGO

MIGO  (Click on the picture to enlarge)

The truck personal will handover the documents related to the goods to the gatekeeper and the gatekeper will enter all the details into SAP through MIGO transaction . After taking the printout the gatekeeper will attach a copy along with the documents. After stamping the documents the gatekeeper will handover the documents to the truck personal. Before unloading the goods the quality control personal will check the goods to confirm that the goods are of the specified quality.
                                                  
MIGO transaction will create the following two documents in the system.

One material document for goods received
&
the second document  is in Financial Accounting, with the following journal entry 

Material A/c Dr
             To GR/IR clearing A/c

( As different modules in SAP are integrated , the entry made by stores department for goods receipt in MM module (MIGO) will create (2 entries) the above entry in FI module automatically ).




ON RECEIPT OF INVOICE FROM VENDORS ( MIRO )

SAP Menu -> Logistics -> MM -> Logistic Invoice Verification -> Document Entry - > MIRO

MIRO (Click on the picture to enlarge)

On receipt of goods from vendors the 

      G/R IR A/c Dr
             To Vendor A/c

( As different modules in SAP are integrated , the entry made by stores department for invoice receipt in MM module will create (2 entries) the above entry in FI module automatically ).


PAYMENT TO VENDORS ( Payment F-53 , Automatic Payment F-110 , Down Payment F-48 )

In SAP usually payment is made by running ' Automatic Payment Programme ' . It creates the following entry.

    Vendor A/c Dr

              To Bank Sub A/c

FINALLY THE ENTRIES IN BANK SUB A/C WILL BE TRANSFERRED TO MAIN BANK A/C

    Bank Sub A/c Dr
               To Main Bank A/c