Thresholds

You can use this function to define purchasing thresholds to limit the monetary amount spent, depending on different elements, such as organizational elements, cost accounting objects, or homogenous categories.

You can use thresholds to:

Control maverick buying by limiting the value of purchases that are made without contractual reference
Enforce legally defined maximum budgets for purchases without contractual reference
Ensure that purchases do not exceed the limit below which simplified acquisition procedures apply

The system adds up the total amounts of all purchase order items and contract items to which the threshold applies, and validates the total against the amount defined in the threshold. When a purchase order or contract is created that exceeds the threshold, the system issues either an error or a warning message, depending on your customizing settings.

Example Example

You can define a threshold amount of USD 5,000 that limits the spending of purchasing organization 0001 on a homogeneous category “Apparel” for calendar year 2009.

End of the example.

Integration

You can use this function in the following business scenarios:

Contract Management and Administration
Operational Procurement
Procurement Services

You can set up a workflow that informs a user, for example the manager of a purchasing team, when a threshold is exceeded. If the user has specific authorizations, he can prevent the threshold from being taken into account for a specific purchase by selecting the Threshold not Relevant checkbox.

Prerequisites

You have activated the business function SRM, Cross-Industry Functions (SRM_CROSS_INDUSTRY_1). Note that you can only use this business function in conjunction with the business function SRM, Procurement for Public Sector (SRM_PUBLIC_SECTOR_1). In other words, you must activate both business functions.

You have done the following:

In Customizing for SAP ERP

Customized the cost accounting objects that you want to use for thresholds.
Defined product categories under Logistics – General Material Master Settings for Key Fields Define Material Groups . You have ensured that the product categories are replicated to the SAP SRM system.

In Customizing for SAP SRM

Activated the business function SRM, Procurement for Public Sector (SRM_PUBLIC_SECTOR_1).
Created an organizational plan under SRM Server Cross-Application Basic Settings Organizational Management Create Organizational Plan .
Performed the activities under SRM Server Cross-Industry Functions Application Settings Thresholds .

For more information, see SAP Solution Manager under Start of the navigation path SAP SRM Next navigation step Configuration SAP SRM <number of current release>, PPS Payment Thresholds End of the navigation path .

Features

Working with purchasing thresholds in SAP SRM involves tasks at three different levels:

In Customizing, you implement generic business decisions, such as defining the threshold types and the homogeneous categories to be used in your organization.

In the SAP GUI, users with special authorization define actual threshold values for specific purchasing organizations, homogeneous categories, and time periods.

They can use the following transactions:

Transaction Name	Transaction Code	Purpose
Threshold	/SAPPSSRM/THRESH_MAI	Defining several thresholds at once
Threshold Single Maintenance	/SAPPSSRM/THR_SI_MAI	Defining a single threshold

In the procurement applications that are available in the SAP NetWeaver Portal, business users create purchase orders and contracts. The values of these purchases count towards the threshold value.

Thresholds in the Procurement Applications

The following threshold-related fields are available at item level in contracts and purchase orders:

Field Name	Purpose
Threshold not Relevant	Users with special authorization can indicate that the amount of this particular purchase does not count towards the threshold.
Threshold Number	Identifies a specific threshold.
Threshold Type	Indicates the threshold type on which the threshold is based.
Remaining Threshold Amount	Indicates the amount for which you can purchase until the threshold value is reached.

Note the following differences between contracts and purchase orders regarding the threshold-related fields:

Contracts
- The fields are available on the General Data tab, in the Basic area.
- Purchasers must enter the threshold number manually.
Purchase Orders
- The fields are available on the Account Assignment tab, in the Details area.
- The system automatically derives the threshold number from the account assignment information that purchasers enter for the item.

Example

Your company plans a project for implementing SAP Software. To control the spending, you want to set thresholds. You proceed as follows:

You create two different threshold types for costs related to office equipment and for costs related to third-party services. You specify the following data when creating the threshold types:

Purchasing Org.

Threshold Type

Acct. Assignmt Object

Time Period

Currency

5600012

A

Cost Center

Calendar Year

USD

5600012

B

WBS Element

Start Date/ End Date

USD

Purchasing Org.	Threshold Type	Acct. Assignmt Object	Time Period	Currency
5600012	A	Cost Center	Calendar Year	USD
5600012	B	WBS Element	Start Date/ End Date	USD

You specify several thresholds to achieve the following:

You want the costs for long-term office equipment, such as furniture, and for consumable office supplies, such as paper, to be distributed to different cost centers.
You want to account for costs for third-party services on a project basis.

Therefore, you specify three different thresholds, based on two threshold types, as follows.

Purch. Org.	Threshold Type	Threshold No.	Threshold Name	Cost Center	WBS Element	Start Date	End Date	Amount in USD
5600012	A	1000567	Office Equipment	1000345	n/a	01-01-2009	31-12-2009	20,000
5600012	A	1000568	Office Supplies	1000367	n/a	01-01-2009	31-12-2009	3,000
5600012	B	1000701	Third-Party Services	n/a	100456	1-10-2008	31-09-2009	150,000