Sap Create Purchase Order with Reference to Contract

SAP, the multinational software corporation, is known for its enterprise resource planning (ERP) software that helps businesses manage their operations. One of the key features of SAP is the ability to create purchase orders with reference to contracts. In this article, we’ll discuss what this means and how businesses can utilize it to streamline their procurement processes.

First, let’s define what a purchase order with reference to contract means. Simply put, it is a purchase order that is created based on an existing contract between the buyer and the supplier. This means that the terms and conditions of the contract are automatically applied to the purchase order, saving time and reducing the risk of errors. For example, if the contract specifies the delivery date, payment terms, and pricing for a certain product, these details will be automatically filled in when a purchase order is created with reference to that contract.

Now let’s dive into how businesses can create purchase orders with reference to contracts in SAP. It’s a simple process that can be completed in just a few steps:

1. Navigate to the appropriate transaction code: ME21N – Create Purchase Order.

2. Enter the vendor code and purchase organization code.

3. Select the item category as ‘B’ for ‘Limit’ or ‘D’ for ‘Service’.

4. Click on the ‘Document Overview for Purchasing’ button.

5. In the ‘Reference’ field, enter the contract number that you want to reference.

6. SAP will automatically populate the purchase order with the terms and conditions from the contract.

7. Review and make any necessary changes to the purchase order.

8. Save the purchase order.

That’s it! With just a few clicks, businesses can create purchase orders that are automatically linked to their contracts, reducing the time and effort required to complete the procurement process. Additionally, this method ensures that the terms and conditions of the contract are consistently applied to all purchase orders, reducing the risk of errors and disputes with suppliers.

In conclusion, SAP’s ability to create purchase orders with reference to contracts is a valuable tool for businesses looking to streamline their procurement processes. By automating the application of contract terms and conditions to purchase orders, businesses can save time and reduce the risk of errors or disputes with suppliers. If your business uses SAP, make sure to take advantage of this feature to maximize efficiency and accuracy in your procurement processes.