In SAP MM (Materials Management), Purchase Requisition (PR), Purchase Order (PO), and Goods Receipt (GR) are three critical steps in the procurement process. Each of these steps plays a distinct role in ensuring that materials are procured efficiently and accurately. For professionals undergoing SAP MM Training in Hyderabad, understanding the differences between these steps is essential for mastering procurement processes. Here’s a detailed explanation of each step and how they differ:
1. Purchase Requisition (PR)
A Purchase Requisition (PR) is the first step in the procurement process. It is an internal document created by a department or user within an organization to request the procurement of materials or services.
Key Features of a Purchase Requisition:
- Internal Document: A PR is an internal request and does not involve external vendors.
- Created by Requester: It is typically created by a department or user who needs the materials.
- Details Included: A PR includes details such as material description, quantity, delivery date, and plant or storage location.
- Approval Process: A PR usually requires approval from authorized personnel before it can be converted into a Purchase Order.
Purpose of a Purchase Requisition:
- To formally request the procurement of materials or services.
- To ensure that the procurement process follows organizational policies and budget constraints.
- To provide a record of the materials or services needed.
Transaction Code in SAP MM:
- Create Purchase Requisition: ME51N
- Display Purchase Requisition: ME53N
- Change Purchase Requisition: ME52N
2. Purchase Order (PO)
A Purchase Order (PO) is a formal document issued to a vendor or supplier to procure materials or services. It is created based on an approved Purchase Requisition.
Key Features of a Purchase Order:
- External Document: A PO is an external document sent to the vendor.
- Legally Binding: Once accepted by the vendor, a PO becomes a legally binding contract.
- Details Included: A PO includes details such as vendor information, material description, quantity, price, delivery date, and payment terms.
- Reference to PR: A PO is often created with reference to a Purchase Requisition.
Purpose of a Purchase Order:
- To formally request a vendor to supply materials or services.
- To specify the terms and conditions of the procurement, including price, delivery date, and payment terms.
- To provide a record of the materials or services ordered.
Transaction Code in SAP MM:
- Create Purchase Order: ME21N
- Display Purchase Order: ME23N
- Change Purchase Order: ME22N
3. Goods Receipt (GR)
A Goods Receipt (GR) is the process of recording the receipt of materials or services from a vendor. It is the final step in the procurement process and ensures that the materials or services are received as per the Purchase Order.
Key Features of a Goods Receipt:
- Internal Document: A GR is an internal document used to record the receipt of materials or services.
- Reference to PO: A GR is created with reference to a Purchase Order.
- Details Included: A GR includes details such as material description, quantity received, storage location, and batch number (if applicable).
- Inventory Update: A GR updates the inventory levels in the system and posts the corresponding accounting entries.
Purpose of a Goods Receipt:
- To confirm that the materials or services have been received as per the Purchase Order.
- To update the inventory levels in the system.
- To trigger the payment process by creating a liability for the vendor.
Transaction Code in SAP MM:
- Post Goods Receipt: MIGO
- Display Goods Receipt: MB03
- Reverse Goods Receipt: MBST
How These Steps Work Together in SAP MM
- Purchase Requisition (PR): A department creates a PR to request materials or services. The PR is approved and forwarded to the procurement team.
- Purchase Order (PO): The procurement team creates a PO based on the approved PR and sends it to the vendor.
- Goods Receipt (GR): When the vendor delivers the materials or services, the receiving team records the GR in SAP MM, updating inventory and accounting records.
Importance of Understanding PR, PO, and GR in SAP MM Training in Hyderabad
For professionals undergoing SAP MM Training in Hyderabad, understanding the differences and workflows of PR, PO, and GR is crucial for:
- Efficient Procurement: Ensuring that materials are procured in a timely and cost-effective manner.
- Accurate Inventory Management: Maintaining accurate inventory levels and avoiding stockouts or overstocking.
- Compliance: Ensuring that procurement processes comply with organizational policies and legal requirements.
- Career Growth: Mastering these concepts is essential for roles such as SAP MM Consultant, Procurement Manager, and Supply Chain Analyst.
Conclusion
In SAP MM, Purchase Requisition (PR), Purchase Order (PO), and Goods Receipt (GR) are three distinct but interconnected steps in the procurement process. Each step serves a specific purpose and plays a critical role in ensuring efficient and accurate procurement. For professionals pursuing SAP MM Course in Hyderabad, mastering these concepts is essential for building a successful career in materials management and supply chain operations. By understanding the differences and workflows of PR, PO, and GR, you can contribute to the success of your organization and achieve your career goals. postyourarticle
