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In simple English terms anything that needs to be paid to another person for goods or services rendered is classified as Accounts Payable. I shall in a series of blogs try to explain the processes which are classified under the umbrella of Accounts Payable. More importantly I shall relate this to some SAP concepts and configuration

 

The process

  • Identify the requirements of material or services
  • Identify the Vendors (also known as suppliers)
  • Enter into contracts or agreements with the identified vendors
  • Create the vendors in the system
  • Place Purchase Orders on the vendors for the required material or services
  • Account for the delivery of the material or services
  • Account for the Invoices Pay the invoices

 

Identification of requirements is usually done by the Procurement department. There would be Material Requirement Planning runs that forecast requirements. There could be also just requisitions raised in the system to indicate a need for a material or service

 

Identification and selection of vendors is again a procurement function. They may invite tenders validate supplier track records and use various other tools determine the best possible vendors at an advantageous price

 

While the above two functions also has modules in SAP they are not within the scope of this blog. Once the vendor has been identified and details of the vendor are available the vendor record needs to be created in the system. Why this needs to be done and what information is required would be dealt with in the next blog

 

 

 

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