EGN_5620_Enterprise_Sys_Vendor Master and Records Fall 2011

EGN_5620_Enterprise_Sys_Vendor Master and Records Fall 2011...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Vendor Master Data & Records, Vendor Master Data & Records, and Purchasing Information Data EGN 5620 Enterprise Systems Configuration Fall, 2011 Vendor Master Data & Records, and Purchasing Information Data Theories & Concepts EGN 5620 Enterprise Systems Configuration Fall, 2011 Receiving and Inspection Raw Materials, Parts, and In-process WareHousing Production Finished Goods Warehousing Inspection, Packaging, And Shipping Materials Management Purchasing Production Control Physical materials flow Information flow Warehousing and Shipping Inventory Control and Traffic Customers Suppliers Supply Chain Management Supply Chain Management in a Manufacturing Plant Purchasing Process Purchasing Process Material Requisition Request for Quotations Select Best Supplier Purchase Order Receive and Inspect Goods From any department, to purchasing From purchasing, From to potential suppliers to Based on quality, price, Based lead time, dependability lead From purchasing, From to selected supplier to From supplier, to receiving, quality control, warehouse Mission of Purchasing Organization Mission of Purchasing Organization It develops purchasing plans for each major product or service that are consistent with operations strategies: ◦ Lower production costs ◦ Faster and on­time deliveries ◦ Higher quality products and services ◦ Flexibility Purchasing Management Purchasing Management Maintain data base of available, qualified suppliers Qualify and select suppliers to supply each material Negotiate contracts with suppliers Act as interface between company and suppliers Provide training to suppliers on latest technologies Purchasing Purchasing Factors contributing to the importance of purchasing today: ◦ Focus on core business Up to 60­70% of each sales dollar is paid to material suppliers Great impact of material costs on profit ◦ Popular use of just­in­time concept Supply deliveries must be exact in timing, quantity, and quality ◦ Globalization Geographically “stretched­out” supply chain ◦ Intensified competition for scarce resources Justifications for Centralized Purchasing Justifications for Centralized Purchasing Buying in large quantities better prices More clout with suppliers greater supply continuity Larger purchasing department buyer specialization Combining small orders less order cost duplication Combining shipments lower transportation costs Better overall control Buyers’ Duties Buyers’ Duties Know the market for their commodities Understand the laws.... tax, contract, patent..… Process purchase requisitions and quotation requests Make supplier selections Negotiate prices and conditions of sale Place and follow­up on purchase orders Maintain ethical behavior Types of Buyer/Supplier Relationships Antagonistic ◦ Parties view each other as the enemy (lose/lose) Adversarial ◦ Each party attempts to maximize their gain (win/lose) Cooperative ◦ Parties understand the benefits of working together (win/win) Collaborative ◦ Parties look for opportunities to create value (win/win) January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 10 10 A paradigm shift in purchasing practice A paradigm shift in purchasing practice 1970 and before ◦ Open bidding ◦ Select the lowest price 1980 ◦ Open bidding ◦ Select the best value 1990 ◦ Solicit bids from qualified vendors ◦ Select the best value 2000 & beyond ◦ Build/grow long term partnership Improve supplier’s product/process quality and delivery commitment Share profit/price ◦ Form supply chains Trend in Buyer/Supplier Relationships Traditional purchasing process tends to ◦ Create an environment of mistrust and low bidder mentality, ◦ Leading to higher total purchasing costs Trend is ◦ Collaborative partnership ◦ To establish long term product/service supply contact agreements ◦ Via identifying, qualifying, and cultivating longer term suppliers/partners January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 12 12 Benefits of Managing the Supply Base Contract with only world­class suppliers The fewer suppliers, the lower the purchasing overhead Purchasing can pursue strategic sourcing issues, instead of clerical functions Streamline the supply chain Improve overall quality Improve delivery performance January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 13 13 Process for building a supply base 1. 2. 3. 4. 5. 6. Identify need for long term supplier contract (agreement) Determine specific sourcing requirements Identify potential suppliers Determine method of evaluating suppliers Select supplier for contract (agreement) Negotiate and execute contract (agreement) January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 14 14 Supplier Evaluation and Selection A critical step is to identify and evaluate potential suppliers It usually involves supplier development aiming to ◦ Develop partnership with good (product quality) suppliers ◦ Improve total cost and delivery performance of purchased materials and services Qualification process includes ◦ Vendor’s qualification ◦ Vendor’s product/service qualification (vendor sub­range) January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 15 15 Outline Agreement Long­term purchase agreements Can be divided into the types below: ◦ Contracts ◦ Scheduling agreements Can be subject to a release (approval or clearance) procedure January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 16 16 Contract Management Track supplier performance using metrics for ◦ On­time delivery ◦ Material and/or service quality ◦ Returned materials ◦ Expedite issues ◦ Pricing analysis Resolve problems Engage in continuous improvement process Terminate/renew contract agreement January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 17 17 Contracting Questions How will potential suppliers be evaluated and selected? What procedures will be required to manage the contracts (and suppliers)? How will performance be measured? How many are too many suppliers? ◦ Too many suppliers cost money ◦ Supplier integration ◦ Collaborative agreements ◦ Supplier development ◦ Without material production shuts down What is the risk? January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 18 18 Creating a Contract Is a long­term agreement with a vendor to provide a material or service ◦ For an agreed upon period of time ◦ At a negotiated price or quantity Can be created manually or with reference to purchase requisition, Request for Quote (RFQ)/quotation etc. January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 19 19 Contract types Quantity contract ◦ Agreement with a particular vendor to purchase a specific quantity of materials. Example: Target quantity of 50,000 meters of electrical wire at $2/meter. (MK) Value contract ◦ Similar to quantity contract except the agreement is to purchase an established monetary value of materials. Example: Target value of $100,000 for electrical wire. (WK) January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 20 20 Vendor Master Data & Records, and Vendor Master Data & Records, and Purchasing Information Data SAP Implementation EGN 5620 Enterprise Systems Configuration Fall, 2011 Vendor Master Data Includes all data required for ◦ processing business transactions and ◦ corresponding with vendors Information is shared between the ◦ accounting and ◦ purchasing departments January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 22 22 Vendor Master Data & Records, and Purchasing Information Data Vendor master data and records are maintained by both ◦ accounts payable (A/P) and ◦ purchasing Purchasing information data are maintained primarily by ◦ purchasing January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 23 23 Vendor Master Data A master record must be created for every vendor ◦ General data, ◦ Company Code data (Financial Accounting ­ FI), and ◦ Purchasing data (Material Management ­ MM) General data Address Control data Payment transactions Company code data Account management Payment transactions January 2008 January Purchasing data Condition Control data Partner functions © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 24 24 Vendor Master Data Structure General Data Company Code Data Financial Accounting (FI) ata: al D er Gen ess r Ad d Pu r Da chas ing ta Vendor 10001 Purchasing Data (MM) January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 25 25 Vendor Master Data – Typical Screen Vendor attributes that sufficiently differentiate them by their: Address Control Payment Transactions Accounting Information Correspondence Purchasing Data Partner Functions January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 26 26 Vendor Master General Data – Address General Data – Address Address Vendor Name Search Term Street address City, Region Postal code Country Communication Language Telephone, Fax, E-Mail January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 27 27 Vendor Master­ General Data – Control Data Account Control • Customer (if the vendor is both a vendor and a customer) • Authorization • Trading partner (if the vendor is a part of an independent company) • Group key (combines vendors to enhance the search capacity) January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 28 28 Vendor Master­ General Data – Control Data Tax Information ◦ Tax codes used to enter ID number of the vendor ◦ Fiscal address ◦ Country code ◦ City code Reference Data / Area ◦ International locator number used to identify a legal, functional, or physical location within a business or organizational entity ◦ Industry key allows similar vendors to be grouped by industry ◦ Transport zone January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 29 29 Vendor Master ­ General Data – Payment Transactions Bank Details ◦ Bank Key selected from a match code with company code entered ◦ Bank Account ◦ Account Holder ◦ Partner Bank Type (if vendor has more than one bank account, then it allows to sequence those accounts) Payment Transactions ◦ Alternative Payee used to enter another vendor number ◦ Instruction Key To control which statements are given to the banks during the payment order January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 30 30 Vendor Master – Accounting Information Accounting Information ◦ Reconciliation Account see next slide ◦ Sort Key used to select a sort for the allocation field ◦ Release Group the release­approval group can be defined and configured to allow only those in the group to be able to “release for payment January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 31 31 Reconciliation Account An individual G/L account recorded in line­item detail in the sub­ledger and summarized in the G/L The information entered into the reconciliation account is all line­item data from the vendor account. The reconciliation in the G/L is at the summary level and is used to reconcile against the vendor account at the total level, while the sub­ledger identifies line­item data. January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 32 32 Reconciliation Account Postings to sub­ledgers (such as accounts receivable or accounts payable) are automatically concurrently posted to the corresponding reconciliation account in the General Ledger Thus, the General Ledger is automatically updated and remains in balance with the customer and vendor individual account totals January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 33 33 General Ledger Reconciliation Account (continued) General Ledger General Ledger Reconciliation Accounts A/R, A/P, GR/IR Debit Credit $$ $$ A/R Debit Credit $$ $$ A/P Debit Credit $$ $$ GR/IR Debit Credit $$ $$ Subsidiary Ledger Accounts A/R, A/P, GR/IR January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 34 34 Accounts Payable Reconciliation Account Vendor 100234 200 Vendor 100435 250 Accounts Payable Reconciliation 950 Vendor 100621 100 Vendor 100846 400 January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 35 35 Vendor Master – Accounting Information Interest Calculation ◦ Interest Calculation Indication for automation interest calculation, and is configured by accounting department ◦ Interest Calculation Frequency used to select a period for calculation of interest Withholding Tax ◦ Withholding Tax Code ◦ Exemption Number January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 36 36 Account Groups Identifier that controls which fields must be entered when an account is created Determine a valid number interval for each of the groups (types) of General Ledger accounts that have common attributes Must be created before General Ledger Chart of Accounts master records can be created You must assign each account to an appropriate account group January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 37 37 Account Groups Chrt/accts CHRT CHRT CHRT Acct group Description BS Balance Sheet (BS) PL Income Sheet RA Reconciliation January 2008 January From 100000 400000 110000 © SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights SAP reserved. To 399999 999999 310000 38 38 Account Groups Account Group BS Account control Account management Document entry Bank/financial details Interest calculation Joint venture January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 39 39 Field Status Field status controls how the data will be entered for a field when an accounting master record is being used in a transaction Determining whether a field is required, optional, suppressed, or display only Field status controls are also relevant to a specific activity — create, change, or display January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 40 40 Field Status Variant Fld status groupText ZALL All Accounts ZBSA Balance Sheet Accounts ZEXP Expense Accounts ZGRI Material Management (GR/IR) Accounts ZRCN Reconciliation Accounts ZREV Revenue Accounts January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 41 41 Field Status Variant Field status variant (V000) - Group ZBSA - Balance Sheet Acct. General data Additional account assignments Materials management Payment transactions Asset accounting Taxes ... General Data Suppress Req. entry Opt. entry Assignment number Text Invoice reference … January 2008 January Display © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 42 42 Vendor Master – Payment Transactions Payment Data ◦ Payment Terms (cash discounts and favorable payment periods offered by vendor) ◦ Tolerance Group (the limit to which an event can deviate) ◦ Check Double Invoice (to check for double or duplicate invoices when they are entered) ◦ Check Cashing Time Automatic Payment Transactions ◦ Payment Methods ◦ Alternate Payee ◦ Payment Block(prevent any open items from being paid) Invoice Verification ◦ Tolerance Group January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 43 43 Vendor Master – Correspondence Accounting Dunning Data ◦ Dunning Procedure To remind vendors to deliver the material from the purchase orders ◦ Dunning Block If selected, the vendor is not for dunning run ◦ Dunning Recipient ◦ Date of Legal Dunning Procedure Correspondence information ◦ Local Processing ◦ Accounting Clerk ◦ Account With Vendor used to identify the company ◦ Clerk at vendor the contact person at the vendor side January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 44 44 Vendor Master –Purchasing Data Conditions ◦ Order Currency ◦ Terms of Payment ◦ Incoterms (next slide) ◦ Minimum Order Value Sales Data ◦ Salesperson ◦ Telephone ◦ Account with vendor January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 45 45 Vendor Master –Purchasing Data Incoterms are standard trade definitions used in international contracts. The International Chamber of Commerce based in Paris, devised these standard trade definitions. The 13 incoterms are divided into four groups (arrival, departure, carriage paid by seller, and carriage not paid by seller). Group E-Departure D - Arrival D - Arrival D - Arrival D - Arrival D - Arrival C- Paid C- Paid C- Paid C- Paid F - Unpaid F - Unpaid F - Unpaid Incoterm EXW DAF DES DEQ DDU DDP CFR CIF CPT CIP FCA FAS FOB Long Name Ex work Delivered at Frontier Delivered Ex Ship Delivered Ex Quay Delivered Duty Unpaid Delivered Duty Paid Cost and Freight Cost, Insurance, Freight Carriage Paid to Carriage, Insurance Paid Free Carrier Free Alongside Ship January 2008 January Free on Board Location Named Place Named Place Port of Destination Port of Destination Destination Destination Port of Destination Port of Destination Destination Destination Named Place © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All Port of Destination rights reserved. Port of Destination 46 46 Vendor Master –Purchasing Data • Control Data • Acknowledgement Required • To indicate if acknowledgement is required upon receipt of the order • Automatic Purchase Order • To allow automatic issuance of purchase order • Good receipt-based invoice verification • To perform invoice verification based on the goods receipt amounts • Subsequent settlement • To allow a rebate • Default Data Material • Purchasing Group • Planned Delivery Time • Confirmation control (confirmation type and sequence) January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 47 47 Vendor Master – Purchasing Data – Partner Functions Partner Functions ◦ Used to define the relationships between the vendor (or customer) and the company. List of (Vendor) Partner Functions ◦ AZ ◦ CA ◦ CP ◦ ER ◦ GS ◦ OA ◦ PI ◦ VN alternative payment recipient contract address contact person employee responsible goods supplier ordering address invoice presented by vendor January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 48 48 Vendor Master – Purchasing Data – Account Group Vendor masters are assigned to a vendor account group Through field status maintenance, vendor account groups can be set up for one­time vendors, regional vendors, and internal vendors The vendor account group controls both type and number range assignment for vendors January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 49 49 Purchasing Info Record The purchasing info record provides continuously updated information about ◦ the relationship of a specific material with a specific vendor ◦ Order unit, price, price changes, tolerances, reminder information, historic data, statistics, texts ◦ Choice of automatic or manual updating January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 50 50 Source List It stores information about where to acquire a given material for a given period of time It specifies whether this source should be used by Materials Requirement Planning (MRP) January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 51 51 Purchasing Tolerances A tolerance limit set for allowed variance before a warning/error message is displayed ◦ Price variance Compares the price in the purchase order with the valuation price stored in the material master ◦ Maximum cash discount This tolerance limit is set to assure that cash discounts do not exceed allowable discounts January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 52 52 Goods Receipts Tolerances Purchase order price quantity ◦ Two tolerance levels maintained per item The maximum percentage variance before a goods receipt postings is not allowed A percent variance that generates a warning message but allows posting Moving average price variance ◦ the maximum moving average price change allowed January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 53 53 Invoice Receipts Tolerances Tolerance limits configured for invoice receipts: price, quantity, and blanket purchase orders The tolerances include: ◦ Amount for item with or without order reference ◦ Percentage Over/Under Quantity Variance ◦ Exceed amount: quantity variance ◦ Blanket purchase order (value and time limit) ◦ Price variance January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 54 54 Automatic Account Assignment Created to avoid manual postings of financial transactions which follow goods movements to reflect the values of transferred materials Used across all modules to keep track of the values of materials that are being consumed (e.g., production), or transferred into other valuation areas of the company Is a set of rules and master data which enable the financial tracking of logistics movement January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 55 55 Automatic Account Assignment Components Chart of Accounts Valuation Grouping Code ◦ Example: valuation area is plant, five plants exist in the company, all five plants use the same accounts. ◦ Multiple valuation groups are possible Transaction Key Modifier for Transaction Key Valuation Class January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 56 56 Automatic Account Assignment Valuation Grouping Code Grouping Code G001 Grouping Code G002 Plant – P001 Plant – P004 Plant – P002 Plant – P005 Plant – P003 January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 57 57 Automatic Account Assignment Transaction Keys Transaction Keys ◦ The transaction keys are used to determine accounts or posting keys for line items which are created automatically by the system. ◦ The transaction keys are defined in the system. January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 58 58 Automatic Account Assignment Transaction Keys Transaction Keys ◦ Inventory Postings BSX ◦ Offsetting Entry for Inventory Postings GBB ◦ Materials Management Small Differences DIF ◦ Cost (price) differences (PPV) PRD ◦ Goods receipt / inv. receipt clearing acct WRX January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 59 59 Automatic Account Assignment Modifier Modifier – modifies the transaction key for various movement types ◦ Blank – Goods receipt from purchase order with account assignment ◦ VBR – Goods issue to consumption ◦ VAX – Goods issue to sales – post to cost of goods sold ◦ AUF – Goods receipt from a production order – post to production settlement ◦ Etc. – Many others January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 60 60 Material Types & Valuation Classes Account category reference: ◦ Builds the link between material types and the valuation class(es) January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 61 61 Material Types & Valuation Classes Valuation Class 3030 (Supplies) Valuation Class 3100 (Trading Goods) Material Type ROH (Raw Material) Acct Cat. Ref 0001 – Raw Materials Valuation Class 3000 (Raw) Valuation Class 7920 (Finished goods) January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 62 62 Automatic Account Assignment Valuation Class 3030 (Supplies Good) Grouping Code G_ _ _ Grouping Code G_ _ _ Goods Movement GBB (Goods issue) Goods Movement GBB (Goods issue) Account Modifier Blank (Goods receipt) Account Modifier Blank (Goods receipt.) Account 7210_ _ Plant P_ _ _ Valuation Class 3100 (Trading Good) Account 7400_ _ January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 63 63 Automatic Account Assignment January 2008 January © SAP AG - University Alliances and SAP The Rushmore Group, LLC 2008. All rights reserved. 64 64 Vendor Master Data & Records, & Purchase Information Records PEN, Inc. EGN 5620 Enterprise Systems Configuration EGN 5620 Enterprise Systems Configuration Fall, 2011 Pen Inc. : Supplies Pen Inc. : Supplies Pen Inc. : Vendor Master Pen Inc. : Vendor Master Pen Inc. : Purchase Information Pen Inc. : Purchase Information Records Pen Inc. : Source List Pen Inc. : Source List Exercises: Exercises: 89. Set default values for inventory management reservations 90. Maintain purchasing tolerance limits 91. Maintain goods receipt tolerance limits 92. Maintain invoice receipt tolerance limits 93. Set (review) valuation control 94. Assign valuation area grouping 95. Define (review) valuation classes 208. Create labor expense account 209. Create production order settlement account 210. Create production variance account 96. Configure automatic postings for goods movement 97. Configure automatic posting for taxes 98. Set parameters for invoice verification 99. Create default values for invoice verification 173. Create purchasing information records 173a.Create source list ...
View Full Document

Ask a homework question - tutors are online