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Articles on SAP procurement Hello friends, Through this post, I would like to share with you some useful articles on MM procurement scenarios. First, we will see an SAP procedure that will greatly simplify the creation of Imports PO. This is particularly relevant in the Indian imports business scenario.
#1. Simplified Imports PO procedure: Pain areas in Imports PO procedure: Imports procurement procurement involves a number of planned delivery costs like customs duties, freight and clearing agent charges. These costs need to be taken care in the MM pricing procedure. While creating imports purchase order, the percentages for customs duties, freight & clearing agent charges are to be entered manually for every PO item. Also, the relevant vendor code has to be entered for each delivery cost - viz., customs house vendor for every customs duty pricing condition and freight/clearin freight/clearing g agent vendor for freight/clearin freight/clearing g agent condition. This is a very cumbersome process for the buyer who creates the purchase order, since he has to navigate back and forth between the condition overview & condition detail screens in the purchase order to complete the entries. The objective of this article is to present a solution which will simplify this process.
Typical pricing conditions involved in imports: Client procures certain assemblies and components from vendors abroad. For this purpose, they wanted to create purchase order on the imports vendor. Like in any imports purchase, there will be customs duties and delivery costs like freight and clearing agent charges. The imports pricing procedure contains the following typical condition types: Condition Description
Condition Type
Calculation Basis
Basic Price
PB00
To be entered by buyer
Customs Assessable Value Basic customs duty Counter-veiling duty(CVD) ECess on CVD
JASV
110% of PB00
JCDB
10% of ZASV
JCV1
10% of (ZASV+JCDB)
JECV
2% on JCV1
SHE Cess on CVD ECess on Basic customs SHECess on Basic Customs Additional Duty of Customs
J1CV
1% on JCV1
JEDB
2% on (JCDB+JCV1+JECV+J1CV) 1% on (JCDB+JCV1+JECV+J1CV) 10% on (ZASV + JCDB + JCV1+JECV+J1CV)
JSDB JADC
Default vendor while creating PO Material vendor Material vendor Material vendor Material vendor Material vendor Material vendor Material vendor Material vendor Material vendor
Actual Vendor to be assigned
Imports vendor
Customs House vendor Customs House vendor Customs House vendor Customs House vendor Customs House vendor Customs House vendor Customs House vendor
(ADC) Freight charges
ZFR1
2% on PB00
Clearing Agent Charges
ZCLG
1% on PB00
Material vendor Material vendor
Freight vendor Clearing agent
Buyer has to fill in the percentages for the10 different condition types mentioned above. Assuming there are 10 items in the PO, buyer would have to make 100 entries for the percentages only. Buyer would also have to reassign the vendor codes for customs duty and delivery cost condition types. By default, all condition types in the PO item will be assigned the material vendor in the conditions tab. If the PO is processed as such, then during MIRO invoice verification, only the material vendor will be proposed for all these conditions. Finance person who is doing the invoice verification will have to change the vendor during MIRO to account freight/clearing agent invoice. When the number of PO items is high, MIRO screen displays a number of line items and it becomes difficult to navigate and verify only customs duty or only freight.
Solution overview: The proposed SAP solution will default the duty and delivery cost percentages for all the relevant condition types of PO items and also default the relevant vendor code for these condition types. The proposed solution consists of the following Steps:
A new access sequence is created for delivery cost conditions and assigned to each of the customs duty, freight and clearing charges condition types. This will enable appropriate rates/percentages to be defined at the Purchase Org. level. Condition records are maintained for each customs duty condition at the Purchase Org. level so that any imports vendor assigned to this Purchase Org. gets this default duty rate. While maintaining the above-mentioned condition record master, the relevant vendor code is assigned to the condition type. This will default the vendor code for the condition type in the PO. Configuration & master data setup: No.
Process Step
Description
1.
Create new condition table
A new condition table (eg. 801) is maintained using configuration tcode M/03 (Maintain condition tables). This will be at the level of “ Purchasing Organization”
2.
Create new access sequence
A new access sequence (eg. ZCUS) is created using tcode M/07 using the condition table created in step1.
3.
Assign this access
The new access sequence is assigned to each customs duty
No.
4
Process Step
Description
sequence to condition types
condtion type, freight condition type and clearing charge condition type using tcode M/06.
Maintain condition records
Using transaction MEK1, maintain condition records for condition types ZASV, JCDB, JCV1, JECV, J1CV, JEDB, JSDB, JADC, ZFRT and ZCLG, as per the rates mentioned in the pricing procedure table. Also assign the customs vendor code for customs duty condition types, freight vendor for freight condition type and clearing agent vendor for clearing charges condition, in the details screen of MEK1.
When we create the imports PO, buyer needs to enter only the basic price. System automatically defaults all the duty percentages and also freight and clearing charge percentages for the respective conditions, from the condition records, as explained above. System also defaults the vendor code for customs duty and freight/clearing charges. Process Steps in detail with screenshots: Below screenshots serve to illustrate the points:
Step1: Create new condition table (for eg. Table# 801) in tcode M/03 @ Purch.Org level – all duties and delivery costs will be captured at Purch.Org level. This will ensure that all the condition records are maintained only once for the entire Purch.Organization. Step2: Create new access sequence (for eg. ZCUS) using tcode M/07 and assign the condition table to this new access sequence. Step3: Assign the condition table to access sequence. Assign the default value for Purch.Org, if required, in the field catalog screen. Step4: Create condition records for duties and other delivery costs, in tcode MEK1. Enter rates and validity period. For eg. JCDB condition type for basic customs duty – enter Purch.org, maintain rate (eg.10%), validity start and end date. Step5: In the details screen of MEK1, assign vendor code for customs house vendor (in this case vendor # 302760) and save. Repeat steps 4 & 5 for all customs duty, freight and clearing charges condition types.
Step6: Create purchase order in ME21N for the imports vendor. Enter material number, PO qty, basic price and plant.
Step7: Check conditions tab for the PO item. The imports pricing procedure is invoked by system and systems defaults all duty and delivery costs rates (percentages) as per condition records maintained in steps 4 & 5. Verify the rates. Finally, go to details screen of condition type by clicking the “Condition details” icon and check the vendor. Please note that system automatically defaults the vendor code for the delivery cost.
