Purchase order
Quick answer
The PO is the anchor of the three-way match: goods receipt is posted against it (updating stock and GR/IR), and invoice verification matches the vendor invoice to the PO and receipt before payment.
Key takeaways
- A PO specifies the vendor, materials/services, quantities, prices, delivery dates, and the plant/storage location or account…
- PO types (standard, subcontracting, consignment, service).
- Pricing conditions: net price, discounts, taxes, freight.
- Watch out: Wrong account assignment (stock vs consumption).
What a PO contains
A PO specifies the vendor, materials/services, quantities, prices, delivery dates, and the plant/storage location or account assignment. It is a legal commitment to purchase and the reference against which goods receipt and invoice verification are matched.
Key aspects
- PO types (standard, subcontracting, consignment, service).
- Pricing conditions: net price, discounts, taxes, freight.
- Account assignment: stock vs consumption.
- Release strategy: approval before it is issued.
The PO in procure-to-pay
The PO is the anchor of the three-way match: goods receipt is posted against it (updating stock and GR/IR), and invoice verification matches the vendor invoice to the PO and receipt before payment. Correct PO data (price, quantity, account assignment) is what makes the downstream postings correct.
Common pitfalls
- Wrong account assignment (stock vs consumption).
- PO price/quantity errors breaking the match.
- Unreleased POs stuck awaiting approval.
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Check your understanding
Which statement is true of Purchase order?
- A. These MM examples walk the procure-to-pay steps, requisition, purchase order, goods receipt, invoice…
- B. The chart of accounts (COA) is the organised list of all general-ledger accounts used to record financial…
- C. It is a legal commitment to purchase and the reference against which goods receipt and invoice verification…
Show answer
C. It is a legal commitment to purchase and the reference against which goods receipt and invoice verification…
Covered in the “What a PO contains” section of this lesson.
Which of these also applies to Purchase order?
- A. Confusing cost centers with profit centers.
- B. Correct PO data (price, quantity, account assignment) is what makes the downstream postings correct.
- C. Using the wrong variant (create vs change vs display).
Show answer
B. Correct PO data (price, quantity, account assignment) is what makes the downstream postings correct.
Covered in the “The PO in procure-to-pay” section of this lesson.
Which part of the Learn SAP curriculum covers Purchase order?
- A. SAP MM
- B. SAP troubleshooting
- C. SAP best practices
Show answer
A. SAP MM
This lesson sits in the SAP MM section of the Learn SAP course.