SAP Controlling

Financial Accounting

4.6 Review Answers

Chapter 10 Procurement Cycle Overview

1. Name the five major activities (in the order they occur) in the Procurement Cycle.

Purchase Requisition (MM)

Purchase Order (MM)
Goods Receipt (MM)
Invoice Verification (MM)
Vendor Payment (FI)

2. What is a Purchase Requisition?

A Purchase Requisition is a document that identifies an organizations demand for a product or
service from an outside vendor. It is an internal document, ie, it is not visible to the vendor or
any other outside organization.
3. What are the two ways a Purchase Requisition can be created?

Automatically as a result of a Materials Requirements Planning (MRP) run.

Manually by a user.

4. What is a Purchase Order?

A Purchase Order is a legal contract between a buyer and a vendor. It lists the materials or
services to be purchased on specified terms and conditions (quantity, price / pricing
conditions, delivery date).
5. What is Invoice Verification?
Invoice verification is the process of matching Vendor Invoices to Purchase Order and Goods
Receipt documents. For matched vendor invoices, a payable is automatically created in the FI
General Ledger. For un-matched or mismatched vendor invoices automatically create a
payable open item with a payment hold status.
6. How is the Payment Program used to make Vendor Payments?
The Payment Program maximizes cash discounts when paying open vendor items. It creates a
list of proposed vendor items to be paid, and suggests payment methods for each proposed
payment. The user has the ability to make any changes before payments are made.

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