Every organization acquires material or services to complete its business needs. The process of buying materials and obtaining services from vendors or dealers is procurement. The steps which are required to procure a material forms the procurement cycle. Every organization performs some common sequential steps so that a material can be procured in right quantity at the right price. The important steps in procurement cycle are as follows:
  • Determination of Requirement
  • Creating Purchase Order
  • Posting Goods Receipt
  • Posting Invoice

Determination of Requirement

This is the first step in procurement cycle. It is the logical subdivision where it is determined that what material or services are required by company, and which supplier can fulfill the requirement. A list of requirements is made and then it is approved by senior authority within the organization. After approval, formal list is made that is known as purchase order with one more level of approval which is sent to the vendor.

Creating Purchase Order

Purchase order is the formal and final confirmation of the requirements which is sent to vendor to supply material or services. Purchase order will include important information like name of material with its corresponding plant, details of purchasing organization with its company code, name of vendor,and date for delivery of material. Purchase order can be created by following the below steps:
Path to create Purchase Order:
Logistics => Materials Management => Purchasing => Purchase Order => Create => Vendor/ Supplying Plant Known
TCode: ME21N



Serkan AKKAVAK
Computer Engineer
ABAP Developer & SAP MM SD Consultant
Contact : serkurumsal@yandex.com