Peripheral purchase documents in SAP Business One [TUTORIAL]

Peripheral purchase documents in SAP Business One [TUTORIAL]

Peripheral documents within the SAP Business One purchasing workflow are those type of documents that sit outside the “typical” SAP Business One Purchase Order (PO) workflow documents (Purchase Order > Good Receipt Purchase Order > AP Invoice).

Why use peripheral purchase documents?

• To extend the capabilities of the PO workflow (by adding additional team members as part of the procurement process or adding transparency and accuracy to the purchase process);
• To improve supplier performance – Keep suppliers accountable and keep communication clear;
• To ensure the timely processing of purchasing documents;
• To ensure accurate financial postings;
• To better manage capital supply chain expenses.

Watch the SAP Business One tutorial on peripheral purchase documents

Here are the SAP Business One peripheral purchase documents that are covered in this tutorial.

1) Purchase request (or purchase requisition)

The purchase requisition is the very first document in the purchasing workflow. The purpose of this document is to gather the requirements from the person or department requiring the purchase to then feed it to the purchasing department. Using this document, individuals outside of the purchasing team (sales, marketing,…) can feed data to the purchasing team in a clear workflow so the data can be captured precisely.

2) Purchase quotation

This is where prior to purchase order you send a request to a supplier for a quotation to give an understanding of what the product or services requested are and timeframes for execution and other details. Prior to committing to the order, you can receive a quotation so that you are sure that the following purchase request is based on the actual availabilities from the supplier. This will help you track and compare information to assist with supplier selection, it will help you reduce costs and it will help you increase on-time and in-full supplies.

3) AP reserve invoice

This is typically used in a situation where you are importing goods from an overseas supplier. When the goods depart the international port, the supplier will send you the invoice to expect payment. Posting the AP reserve invoice will ensure that the financial movement associated with that transaction recognise that the stock is now yours, while the goods are still in transit. Why use Account Payable (AP) reserve invoices?

• It gives you the ability to process the supplier’s invoice prior to the receipt of goods
• Stock in transit / FOB terms
• Available to promise updated

4) Account Payable (AP) Down Payment Invoice & Request

These documents are used in situations where your suppliers request partial payments or deposit before manufacturing or dispatching the goods to your business. These documents can be included as part of the core workflow and the SAP Business One system will recognise that there are prepayments and drill down on that pre-payment when the goods are actually received and finally invoiced.

5) Landed Costs

Something that you might already be familiar with if you are importing goods or services. The purpose of landed costs is to manage the total costs associated with getting goods into your warehouse – when there are third party suppliers costs that contribute to the process. You want to spread the cost of getting the goods to your doorstep to give you an accurate landed cost that would then become your total cost of sales. This allows you to distribute the revenue and costs to the right period.

Why use landed costs within SAP Business One?

• To allocate 3^rd party costs incurred to shipments (freight, customs, broker fees, insurances,…)
• To distribute the costs over item received (Weight, volume, value,…)

Conclusion

Purchase requests, purchase quotation, AP reserve invoice, AP down payment invoice & request and landed costs are all part of an inbuilt set of functionalities that the SAP Business One system offer to help you better manage the purchase process.

For more information on peripheral purchase documents or to learn more about SAP Business One, call us on 1300 045 046 or email info@leveragetech.com.au.