Answer / dinesh lakhotiya

This part belongs to integration between SAP FI-MM.
While doing this, there is no authority to handle raw
materials to FI people. Similarly, MM people does'nt have
access to make payment to vendors.

The process workflow is as folows:
1) Purchase requisition
2) Quotations
3) Purchase order
4) When goods receipt in the company -
At this time, the entry would be:
Inventory Raw Material a/c ...... Dr.
To Goods Invoice/Invoice receipts a/c
5) When the bill is passed - The entry would be:
Goods Invoice/Invoice receipts a/c .... Dr.
To Vendor a/c
6) Payment made to vendor -
Part I:
Advance payment made-
Vendor a/c ...... Dr.
To Cash/Bank a/c

Part II:
Final Settlement - The entry at this instance would be
the same as PART I but the amount to be paid would be
reduce to that extent..

Answer / mohitfi

Enquiries--Quotation--purchasing order--goods recipt--
invoice varification.

Entry at the time of goods recipt

Inventry a/c Dr
Gr/ir a/c

at the time of invoice verification

Gr/ir a/c Dr
vendor a/c

Answer / anal vyas

P to P Cycle ( Purchase to Pay Cycle)

Purchase Requisition:- It's nothing but a request of Purchase, In any Organization User can raise the request for the purchase in that he has to mention about Item name, qty, Make, Quality etc.
Here no accounting effect it's only a document.
Once the Purchase Requisition authorized the next step is Purchase Order

User Dept. will send this request to the Purchase Dept. for purchasing that material.

Purchase Order:- Purchasing Organization (Purchasing team) will inquire about that particular material from different vendors, They ask for quotations, and analyzed it and then accordingly place a Purchase Order.
Here No accounting effect, PO it's a document only.

The Next step is GRN ( Goods Receipt Note) T Code for GRN is:- MIRO
When the Material comes in Logistic Dept. verify the quantity which were mentioned in PO.
Inventory A/c Dr. (BSX Key in OBYC)
GR/IR Clearing A/c Cr. ( WRX key in OBYC)

After GRN the invoice will pass to the Excise Dept. if any Cenvat Credit available or not, If Cenvat Credit available, He will pass the entry:
Cenvat Receivable A/c Dr.
Cenvat Clearing A/c Cr.

Then after Invoice will go to the Accounts Department for the Payment.
First they will book the invoice in MIRO to create a Liability of Vendor:-
GR/IR Clearing A/c Dr.
Cenvat Clearing A/c Dr.
VAT Receivable A/c Dr. ( If VAT credit available)
To Vendor A/c Cr.

Then after next step is Payment.
Payment can be done by Automatic Payment Programme (APP F110)

Vendor A/c Dr.
to Bank A/c Cr.

Hope this will be helpful to understand.

Thanks :-)

Answer / nagarjuna reddy

yes That is Correct But in that 1 to 6 Process u have not
specified as to when will the FICO people come into Picture.

Answer / sravan

It is easy to guess from when the FICO consultant role comes into picture from the answer given by dinesh.

He provided all the steps with the accounting entries. It is simple to understand that the FICO role begins with the Goods receipt until the payment is made to the Vendor.


Regards,
Sravan

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