Today, we’re diving deep into an essential aspect of procurement within SAP Ariba: the relationship between Purchase Requisitions (PR) and Purchase Orders (PO). This topic is crucial, especially if you're preparing for an interview or working within procurement processes.
Key Takeaway: PR Always Precedes PO
One of the fundamental rules in SAP Ariba is that you cannot directly create a Purchase Order (PO) without first having an approved Purchase Requisition (PR). This is a common point of confusion, but remember: It is not possible to create a PO directly in Ariba without a preceding PR. If you ever encounter a question about this, the correct answer is that the process always starts with a PR, which, once approved, is converted into a PO.
Interconnection Between PR and PO
The PR and PO are closely interlinked in SAP Ariba. Once a PR is approved, it triggers the creation of a PO, which is then sent to the supplier. The supplier can access this PO via the Ariba Network, which is the business network used for this purpose. Additionally, a copy of the purchase order can be sent to the supplier via email.
Scenario Analysis: Testing PR and PO Creation
Let's explore a scenario to understand the nuances better. Suppose you are trying to create a PR in Ariba, but you face issues due to backend system integration. You may observe that in certain cases, PR creation fails because the system is not integrated with the ERP backend or due to missing accounting information.
However, Ariba allows some flexibility: if specific parameters are enabled, the system might still allow PR creation directly within Ariba without needing backend integration. This is driven by configurable parameters, which can dictate whether the PR must be processed through the backend system or can be handled independently within Ariba.
Practical Example: Creating a Purchase Requisition
When creating a PR, you have the option to browse through a catalog or add a non-catalog item, which is also known as an ad-hoc item. This is particularly useful when the item you need isn’t available in the catalog. For instance, if you’re purchasing a laptop but the supplier hasn't published the catalog, you can manually enter the item details based on historical data or supplier information.
Purchase Order Creation and Validation
After creating a PR, the system attempts to convert it into a PO. The PO is then sent to the supplier. If the supplier has multiple locations, the PO will be routed to the correct location based on the requisition details.
It’s also worth noting that in scenarios where you have multiple line items from different suppliers, Ariba will create separate POs for each supplier, even though they originate from a single PR. This ensures clarity and avoids confusion for suppliers receiving orders.
Configuration Steps for PR and PO Process in SAP Ariba
To ensure that the PR always precedes the PO creation, follow these configuration steps in SAP Ariba:
Step 1: Set Up Document Types
1. **Define Document Types for PR and PO**:
- Navigate to **SAP Ariba Administration > Procurement > Document Types**.
- Ensure that the document types for PR and PO are properly defined. Each document type should have specific settings that dictate the workflow, approval process, and subsequent actions.
Step 2: Configure PR to PO Workflow
1. **Set Up Approval Workflows**:
- Go to **SAP Ariba Administration > Procurement > Approval Processes**.
- Define the workflow for PRs to ensure that they must be approved before they can trigger a PO creation.
- Configure the approval workflow for POs as well, ensuring that once a PR is approved, it automatically generates a PO.
2. **Link PR to PO**:
- In the PR document type configuration, ensure that the system is set to automatically create a PO upon PR approval.
- Use the **"Post Approval"** tab in the PR configuration to link to the PO creation process.
Step 3: Define Parameters for System Integration
1. **Backend System Integration**:
- Go to **SAP Ariba Administration > Integration Manager**.
- Set up integration parameters to ensure that PRs and POs created in Ariba are communicated to the backend ERP system (like SAP ECC or SAP S/4HANA).
2. **Parameter Settings in SAP Ariba**:
- Access **SAP Ariba > System Settings > Parameters**.
- Configure the parameter **‘Require Backend System Integration for PR/PO’** to ensure that Ariba checks with the backend system before allowing PR or PO creation.
Step 4: Catalog and Non-Catalog Item Setup
1. **Configure Catalogs**:
- Go to **SAP Ariba > Catalog Management > Manage Catalogs**.
- Upload supplier catalogs and configure them to be accessible for PR creation.
2. **Set Up Non-Catalog Items**:
- Define the process for adding non-catalog items by navigating to **Procurement > Non-Catalog Item Configuration**.
- Ensure that the configuration allows users to enter item details manually, with proper validation rules for accounting information.
Step 5: Approval Process and User Roles
1. **Configure User Roles**:
- Navigate to **SAP Ariba Administration > User Roles**.
- Define roles such as **Requester**, **Preparer**, **Buyer**, **Approver**, and **Purchasing Manager**.
2. **Approval Rule Setup**:
- Go to **Procurement > Approval Processes**.
- Configure approval rules based on business criteria such as dollar thresholds, cost centers, and project codes.
Step 6: Testing and Validation
1. **Test the PR to PO Workflow**:
- Create test PRs and ensure that they go through the approval process.
- Verify that once a PR is approved, it automatically generates a PO.
2. **Validation of PR and PO Interlinking**:
- Validate that any changes made to a PR are reflected in the corresponding PO, and vice versa.
Step 7: Go Live and Monitor
1. **Go Live**:
- Once testing is successful, move the configuration to the production environment.
2. **Continuous Monitoring and Updates**:
- Regularly monitor the PR and PO processes for any discrepancies.
- Update the configuration as needed based on changing business requirements or system updates.
Understanding the relationship between PR and PO in SAP Ariba is crucial for effective procurement management. Always remember that the process starts with a PR, and the subsequent PO creation is deeply integrated with the backend systems or handled within Ariba based on configurations.
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