SAP ERP Financials and FICO Handbook

7.8 P2P 277
1. After sorting the list of vendors, the purchase department will create a purchase
order through transaction code ME21N. In this step, there is no accounting
impact, but in Controlling (CO), the PO will create a commitment posting
if you have activated commitment management. This commitment item will
be converted into an actual posting once you have received material.
2. Once you have received goods, the goods receiving clerk will enter the goods
receipts into the SAP system through transaction code MIGO. While posting
the goods receipt, the system will check quantity, goods, and price against
the PO. If you have partial goods against a PO, the goods receiving clerk will
modify the quantity, which will leave the PO open until the next goods receipt.
The G/L is automatically updated with postings made to the G/L, cost centers,
or asset accounts, while an offsetting posting will be made to a new general
account called the GR/IR account. The accounting will be as follows:
Expenses Accounts
Inventory
Assets
GR\IR
Debit
Debit
Debit
Credit
3. The accounting department will receive an invoice from the vendor. Invoice
verification is the last step in the three-way match. While posting the invoice,
the system will check goods receipts for quantity and price with PO. The
following entry is posted once you save the invoice:
GR/IR
Vendor
Debit
Credit
7.8 P2P
An organization sells goods and services. To sell goods and services, naturally, it
will have to procure these goods and services or produce them. The procurement
part of goods and services is handled by the purchasing department of an
organization. Although the procurement process starts with the purchase
department, it flows to various departments and ultimately ends with a payment