Processing with an Individual Purchase Order 

Purpose

You can use this form of processing to assign tasks to an external company based on individual purchase orders.

These purchase orders can either be settled relative to resources, or based on a fixed price for the total expected output. They can consist of items for material or for services.

Prerequisites

You mark the operations for orders to be processed externally as operations to be processed externally using a corresponding control key. In the standard system, this control key is PM02.

You create the external company in the vendor master record, which is maintained by the accounting and purchasing departments.

Process Flow

  1. You create the order with operations to be processed externally in exactly the same way as an order to be processed internally (see Creation of an Order).
  2. The system automatically creates a purchase requisition for those operations that you selected for external processing using the control key, at the latest when the order is released. You can find the purchase requisition number on the actual data screen for the operation.

    3. You can also configure the use of collective purchase requisitions in Customizing under Functions and Settings for Order Types ® Define Change Docs, Collective Purc. Req. Indicator, Operation No. Interval.

  3. The relevant person in the purchasing department performs a source determination, if necessary, and creates a purchase order (see Purchase Orders).
  4. Depending on your entries on the detail screen for external processing, the following settlement types are available:

Example 1: You have agreed a direct labor hour rate of $ 80 and assume the work will take four hours to complete. In fact, five hours are required; a total cost of $ 400.

Example 2: You have agreed a fixed price of $ 10 per meter of cable laid and assume that 40 meters of cable will be used. In fact, only 35 meters are required; a total cost of $ 350.

Example 3: You have agreed a flat-rate price of $ 400 for the laying of 40 meters of cable, and assume the work will take four hours. In fact, 50 meters of cable were required and the work took five hours; a total cost of $ 400.

  1. The tasks are performed by the external company.
  2. The completion confirmation is entered by their own employees in the form of a goods receipt for the purchase order. See Completion Confirmation of External Services or External Material.
  3. The costs incurred are first collected on the order and then settled to the receiver specified in the settlement rule.
  4. The offsetting entry is first charged to a clearing account, and then automatically written off when the invoice is received, since the invoice from the vendor usually arrives after their delivery. Any differences between the value of the goods ordered and the invoice value are debited or credited accordingly to the order.
  5. In the operation to be processed externally, the status External operation partially delivered is set. If you have set the final delivery indicator, the status External operation finally delivered is set.

See also:

MM - Service