5. Vendor Master Data

Vendor Master Data & Records, and

Purchasing Information Data

EGN 5620 Enterprise Systems Configuration

(Professional MSEM)

Fall, 2013

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)

© SAP AG - University Alliances and

The Rushmore Group, LLC 2008. All rights reserved. January 2008 2

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


The Rushmore Group, LLC 2008. All rights reserved. 3

Benefits of Managing the

Supply Base













Contract with only world-class 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



Process for building a supply base

2.

3.

4.

5.

6.

1.

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



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 sub-range)

January 2008



Outline Agreement







Long-term purchase agreements

Can be divided into the types below:

◦ Contracts

◦ Scheduling agreements

Can be subject to a release (approval or clearance) procedure

January 2008



Contract Management









Track supplier performance using metrics for

◦ On-time 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



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



Creating a Contract





Is a long-term 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



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



Vendor Master Data & Records, and

Purchasing Information Data

SAP Implementation



Fall, 2013

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



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



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


Purchasing data

Condition

Control data

Partner functions

January 2008



Vendor Master

Structures of the Data

General Data

Company Code Data

Financial Accounting (FI)

Vendor 10001

Purchasing Data (MM)

January 2008



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



Vendor Master

General Data – Address

General Data – Address

Communication

Language

Telephone, Fax, E-Mail

Address

Vendor Name

Search Term

Street address

City, Region Postal code

Country

January 2008



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





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



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


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 release-approval group can be defined and configured to allow only those in the group to be able to “release for payment

January 2008



Reconciliation Account







An individual G/L account recorded in line-item detail in the sub-ledger and summarized in the

G/L

The information entered into the reconciliation account is all line-item 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 sub-ledger identifies line-item data.

January 2008



Reconciliation Account





Postings to sub-ledgers (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



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



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



Account Groups

Chrt/accts Acct group Description

CHRT BS Balance Sheet (BS)

CHRT

CHRT

PL

RA

Income Sheet

Reconciliation

From

100000

400000

110000

To

399999

999999

310000

January 2008

© SAP AG - University Alliances and The Rushmore Group, LLC 2008. All rights reserved. 27

Account Groups

Account Group BS

Account control

Account management

Document entry

Bank/financial details

Interest calculation

Joint venture

Account control

Currency

Tax category

Reconciliation account

…

Suppress Req. entry Opt. entry Display

January 2008



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



Field Status Variant

Fld status groupText

ZALL All Accounts

ZBSA

ZEXP

Balance Sheet Accounts

Expense Accounts

ZGRI

ZRCN

ZREV

Material Management (GR/IR) Accounts

Reconciliation Accounts

Revenue Accounts

January 2008



Field Status Variant

Field status variant (V000) - Group ZBSA - Balance Sheet Acct.

General data

Additional account assignments

Materials management


Asset accounting

Taxes

...

General Data Suppress Req. entry Opt. entry Display

Assignment number

Text

Invoice reference

…

January 2008



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



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



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




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

CFR

CIF

CPT

CIP

FCA

FAS

FOB

Incoterm

EXW

DAF

DES

DEQ

DDU

DDP

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

Free on Board

January 2008

Location

Named Place

Named Place

Port of Destination


Destination

Destination



Destination

Destination

Named Place

© SAP AG - University Alliances and rights reserved.


35


• 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


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



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 one-time vendors, regional vendors, and internal vendors

The vendor account group controls both type and number range assignment for vendors

January 2008



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



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



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



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



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



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




Valuation Grouping Code

Grouping Code

G001

Plant – P001

Grouping Code

G002

Plant – P004

Plant – P002 Plant – P005

Plant – P003

January 2008




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




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




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



Material Types & Valuation Classes



Account category reference:

◦ Builds the link between material types and the valuation class(es)

Material Type

ROH

HIBE

HAWA

FERT

Account Category Reference

0001 – Reference for Raw Materials

0002 – Reference for Operating Supplies

0005 – Reference for Trading Goods

0009 – Reference for Finished Products

Valuation Class

3000/3001/3002/3003

3030/3031

3100

7920

January 2008



Material Types & Valuation Classes

Material Type

ROH (Raw Material)

Acct Cat. Ref

0001 – Raw Materials

Valuation Class

3000

(Raw)

January 2008




Valuation Class

3100 (Trading Good)

Grouping Code

G_ _ _

Offsetting entry

GBB (Inv. posting)

Account Modifier

Blank (Goods receipt)

Account

7210_ _

Valuation Class

3030 (Supplies Good)

Grouping Code

G_ _ _

Goods Movement

GBB (Inv. posting)

Account Modifier

Blank (Goods receipt.)

Account

7400_ _

January 2008



Vendor Master Data & Records, &

Purchase Information Records

PEN, Inc.



Fall, 2013

Pen Inc. : Supplies

Vendor Name

Promotions Ltd _ _ _

Slick Pens _ _ _

Premier Pens _ _ _

Boxes inc _ _ _

Tanager

Vendor Code City

Chico

Milwaukee

Baton Rouge

Sioux Falls

Vermillion

CA

WI

LA

SD

SD

State

Zip code

95929

53201

70803

57101

57069

Pen Inc. : Vendor Master

Pen Inc. : Purchase

Information Records

Pen Inc. : Source List

Exercises:

114. Create sales organization

115. Assign sales organization to company code

117. Assign distribution channel to sales organization

120. Assign division to sales organization

122. Set up sales areas

125. Assign plant to sales organization and distribution channel

126. Assign shipping point to plant

127. Create sales views for trading goods

204. Create raw materials inventory account

205. Create finished goods inventory account

206. Create raw materials expense account

207. Create finished goods expense account

Exercises

247. Define storage location for raw materials

248. Create production scheduling profile

249. Create production scheduler

250. Control Parameters for MRP

251. Assign availability check to order type

252. Define scheduling parameters for operations

253. Define control parameters for order type

254. Create confirmation parameters

255.Define valuation for goods received

256. Create material master for raw materials

257. Create material master for finished products

5. Vendor Master Data

Vendor Master Data & Records, and

Purchasing Information Data

Outline Agreement

Contract Management

Contracting Questions

Creating a Contract

Contract types

SAP Implementation

Vendor Master Data

Vendor Master Data

Vendor Master

Structures of the Data

Reconciliation Account

Account Groups

Account Groups

Field Status

Field Status Variant

Vendor Master –Purchasing Data

Vendor Master –Purchasing Data

Vendor Master –Purchasing Data

Purchasing Info Record

Source List

Purchasing Tolerances

Goods Receipts Tolerances

Invoice Receipts Tolerances

Vendor Master Data & Records, &

Purchase Information Records

PEN, Inc.

Pen Inc. : Vendor Master

Related documents

Products

Support

5. Vendor Master Data

Vendor Master Data & Records, and

Purchasing Information Data

Outline Agreement

Contract Management

Contracting Questions

Creating a Contract

Contract types

SAP Implementation

Vendor Master Data

Vendor Master Data

Vendor Master

Structures of the Data

Reconciliation Account

Account Groups

Account Groups

Field Status

Field Status Variant

Vendor Master –Purchasing Data

Vendor Master –Purchasing Data

Vendor Master –Purchasing Data

Purchasing Info Record

Source List

Purchasing Tolerances

Goods Receipts Tolerances

Invoice Receipts Tolerances

Vendor Master Data & Records, &

Purchase Information Records

PEN, Inc.

Pen Inc. : Vendor Master

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