hi today I'm going to explain how to post a supplier invoice with reference to a purchase order in sa ApS for Hana and I'm also going to give an overview on the purchasing process from the financial accounting point of view so I'm going to answer questions such as how can we post the supplier invoice how can we compare the invoice against the good receipt and the purchase order how can we book invoices to different suppliers of the same purchase order and I'm going to demonstrate all this process on sa ps4 Hana from the financial accounting point of view the purchasing process starts with the creation of the purchase order which is our agreement with the supplier on what we are going to buy what is the quantity we are going to buy and for how much there is also a lot of other information in the purchase order that's not relevant to us in this video the second step as the supplier is actually going to send the products to our warehouse and someone in the warehouse is going to receive them then he is going to record on the system what he received what is the quantity he received and with reference to which Fisher's order and this is our goods receipt the third step the supplier is going to send the invoice to the accounts payable accountant and the accountant has to compare the invoice against the purchase order and against the good receipt and this is called a three-way matching so for example if we agreed with the supplier that we are buying product X 14 USD but in the invoice is trying to charge us for 12 USD this will be spotted by the accountant then he has to contact the supplier and ask why are we being charged for a higher rate and then if the invoice is approved he is going to post it otherwise he can inform the supplier that the invoice will not be posted because it's not approved as this is not what we agreed on now I'm going to demonstrate on si P how to create the purchase order how to do get the goods receipt and then I'm going to post a supplier invoice I'm also going to demonstrate how to post separate invoices to separate suppliers on the same purchase orders and also how to hand in the value added tags in this process now I'm going to start by creating the purchase order and the precious order is usually created by someone in the commercial department or in the purchasing department and remember that this is a video from the financial accounting point of view so I'm not going to go into all the details of how to create a purchase order I'm just going to show you how to create a very simple one so we can use it in our testing and I'm also going to demonstrate the most important functions that are usually requested by the financial accountants in any project so the transaction we use to create a purchase order as M 21 n enter and I'm going to insert the vendor number so this is the vendor I'm going to use enter now the purchase organization is 10 10 the company code is also 10 10 and the purchase group is 0 0 1 hit enter again then I'm going to insert the material number that I'm going to buy so this is what I'm going to buy enter this is the plant I'm going to use 10 10 enter and I'm going to buy 10 pieces so for example let's assume that I am buying chairs from the factory as a store then I'm going to sell these chairs to my customers so now I'm going to buy 10 chairs from the factory that share is 480 euros each so now I'm going to pay 80 euros per chair and I'm buying 10 chairs so the total amount I'm going to bei as 800 euros now there is also a very important business case that we usually face and other projects which as whenever we are buying a product from the supplier there is a totally different supplier that is responsible for transportation and this is a transportation agent that will that will move the products from the factory our house to warehouse and in most of the cases the amount of the transportation the value for transporting the products should also be included in the cost of my inventory and the case we face and all the projects as people don't know how to link the transportation cost or the freight cost to the purchase order of the products so they end up boasting a very generic manual invoice at the end of the month for the total value of the Freight invoice and then they allocate this amount manually to the inventory which has not correct and not accurate actually there is a way in a therapy that you can link the freight expenses to the products you are buying in the same purchase order and then whenever you are posting the invoice you can select if you are posting the invoice for the products or if you are posting the invoice for the transportation agent and it is very very simple though so this is what I'm going to demonstrate now so in my example I'm going to buy that shares each chair is going to be for 80 euros plus 2 euros for transportation or Freight so what I'm going to do as and the item details here in the conditions I'm going to go down and here I'm going to insert a new condition so I'm going to open the options and there are two conditions already defined for Freight if you don't have any of these defined on your system you can ask the materials management consultant to define a freight condition for you it is a very simple process now the one i'm going to use as this one freight quantity one so double-click then hit enter again and it disappeared so if you go up here it is so now the amount per one chair is going to be two euros enter so now as you see the total amount will be 800 euros for 10 chairs and the 20 euros for transportation now the second step as I want to define a different vendor for their transportation from the original vendor that you are buying from so now the one I am buying the chairs of ends with 0 0 1 this is the supplier number that is going to sell us the chairs and for this one you can collect on the condition for the freight and go to the condition details here and as you see you can change the vendor number so this one came by default as that shares vendors from the purchase order header but you can change it to any other one so I'm going to change it to this one for example intership so now we have two suppliers in the same purchase order one of them is telling us Cheers the other one is a transportation agent and I'm going to show you how you can poke invoices to the supplier of the chairs and another invoice to the fritz supplier so go back so now my pictures order is ready what I'm going to do is I'm going to post it click here and then I'm going to open the message for the purchase order number so this is the number of our purchase order so I'm going to copy it and now we are done with the first step so now we have a purchase order that we are going to send to the supplier then we move to the second step so in the second step the supplier is going to send us the products so I'm going to process a goods receipt the transaction to process the goods as you see it as mrgo and again this transaction should be done by someone who is working in the warehouse so this is like the custodian of the inventory it's not a financial transaction so I'm also going to show you an overview of how to post it for the sake of our demo but this is not something that the financial accountant should know how to do so the transaction is mrgo here I'm going to select goods receipt purchase order and I'm going to paste the purchase order number then hit enter so now it came from the purchase order that I'm buying this item and the purchase order should be 14 pieces this amount can be changed so for example if the supplier only sent five pieces now and he is going to send the remaining time I can change it to make it five but I'm going to keep it as for now and then click on OK and enter the storage location so this is the storage location where we are going to receive the products let enter then you can check the document for any errors or mistakes so click on check and si P has given me the message that the document is ok so click on post now I'm going to display the transaction that we posted so we can see the financial entry so click on goes receipt select display and the document number came by default as there are the last goods receipt with it so hit enter then go to the comment information and click on fi documents double click on accounting document so this is the accounting document we just posted right now and as you see we have a debit to the inventory for 820 and this is what I was talking about so now as you see we have posted the transportation or the freight amount to the inventory value which is correct and which is requested by the financial accounting standards so now we have the stock debate for 820 and then we have the GRI our credit for 800 and we have another GRI or account credit for 20 this is this one is for freight and these two accounts are intermediary accounts that will be cleared when we post the invoice so now we are done with the step number 2 so we have created a purchase order we sent it to the supplier then the supplier has sent us the products and we have posted the goods receipt the third step is I am going to post the supplier invoices so I'm going to post two invoices one for the product or for the chairs that we purchased and the other is for the transportation order for the afraid so the transaction to post a supplier invoice with the reference to a purchase order as mir oh so I'm going to exit the screen so this transaction is very important to anyone who is working in accounts payable so the transaction as Mir oh and it is different from the other transaction I used before to post a supplier invoice without reference to a purchase order so to process this transaction I'm going to hit enter the company could I'm working with as 10 10 enter again now the invoice date is going to be the same as the posting date the reference is going to be for example product invoice enter and I can insert the purchase order number here so I'm going to paste the number then hit enter again now as you see it came by default that we are buying only one item the total value is 800 euros and the amount I'm buying is 10 pieces so we are buying 10 pieces of this one item and then here you have the purchase order number and you have the item number if you check here you are going to find the supplier number so this one is ending with 0 0 1 this one is for the products so this is the product supplier now if I am willing to post at the invoice for the freight or for the transportation all you have to do is to go here to the item type open this one and select the plant delivery cost so once I click on plan delivery cost hit enter now the amount is 20 so and this is our freight amount and the vendor number has changed it to 0 0 2 this is the vendor that we inserted in the condition as the transportation agent so now you see we can post to invoices to separate invoices one for the freight for the supplier that is the transportation agent and another the other one is for the products or for the factory that sold us the chairs so now I'm going to post this one for the freight so the amount as 20 euros now if you want to insert the taxes you can check here this is the tax good and also if you go here to the right this is the tax code and the item so for example if we are buying different items then you can have different tax code for each item it all depends on the tax regulations in your country so now I'm going to change this one and make it v2 for example then hit enter and here I'm going to change the header one two also v2 and then we have the same option as when we posted a supplier invoice without reference to a purchase order which as you can either put the tax amount manually or you can click on calculate tax and si P will do it automatically so this is what I'm going to do so now the tax amount is 2 which has 10 percent from the 20 so the total amount I need to post now is 20 to enter and this is the supplier invoice for the freight now in real cases or in real life this doesn't usually happen most of the time you have different amount in the invoice then what will you received in the purchase order why there may be different reasons like customs are different duties are different the freight or is different anything so in any case whenever you have a sub an invoice amount that is higher than or lower than the purchase order amount you can actually change this number so it came by default from the purchase order but now for example I'm going to change it to 25 hit enter so as you see the tax amount change it to 2.5 and the total amount is going to be twenty seven point five so now I have posted an invoice amount higher than what we agreed on with the supplier so of course you only do this after you get approval from a manager and then you can post the invoice you can also you also get a warning that you are posting an amount higher than what we agreed on and actually in some projects for some companies they request that this comes as an error so no one can post an invoice amount that's different from the purchase order amount with a certain percentage so for example we only allow 2% up or down from the purchase order amount after this the accountant should get an error and he cannot proceed any way but in my system now it is only a warning so it is giving me a message that be careful you are posting an invoice amount that's higher than the purchase order amount you can click here to check the error warning so price to high tolerance limit of 5% exceeded and again we can switch this one to make it an error so no one can proceed but in my case you can proceed it's okay so now I'm going to post this invoice and I got this message so document number the cup number created blocked for payment why is it blocked for payment because there is a standard default setting in the SA P system that whenever the invoice amount at the hires is higher than the purchase order amount then the invoice can be posted but it goes as blocked for payments so no one can pay this invoice until an authorized person goes and releases it and this is a standard procedure we can't deactivate it if needed so some companies can request to deactivate this so if the invoice is posted anyone can pay it it all depends on the business you are working with so now I have posted the invoice for the freight now to post the invoice for the supplier of the products for the chairs you can follow the same procedure so again insert the invoice late insert a reference so it can be anything hit enter then in the purchase order of scheduling agreement you can insert the purchase order number and then this time I'm going to select good service items and this this game as 814 pieces again you can change it make it 850 if needed the tax code is 19% for this one I can leave it the same the total amount is 1 0 1 1 point 5 and again I have the warning because the amount is higher than what we agreed on and the purchase order and I can post this invoice so now this is it for the demo today so now you know how to create a purchase order you know a very important function which is how you can post separate invoices to separate suppliers with reference to the same purchase order you also know how to process a goods receipt and how to post a supplier invoice and how to handle the value added tags in this process so this is it for today and I will see you again next week thank you for watching thank you for watching my videos don't forget to subscribe to the YouTube channel like the Facebook page follow me on LinkedIn and also helping me by sharing the videos so other people can find them