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Former Member

Procurement of material for projects

Dear Experts,

We have got the following requirement,

SAP is implimented but the materials are procuring for the monor projects through SAP.But for major projects procurement is through the manual process.

Manual process is:

1) award the contract and manual approval process

2) During awarding 10% advance amount is given to vendor

3) After one month of the contract award,remaining vendor sends invoice for 10% of the remaining amount and the customer pays the same

4) When the vendor procures the raw material for fabrication of the material which are ordered in the contract,then he sends the invoice.

5) Customer pays the 45% of the value to the vendor

during the above three times there is no material recieved at customer site.

6) when the ordered material is fabricated them vendor sends the remaining invoice and customer recieves the ordered material in the contract and will pay the remaining invoice amount.

For procuring this type of project material through progressive payment,how it is to be done in SAP Material Management module.

What is the solution for this process in SAP

Kindly give the solution.Advance thaks for the reply.

Regards,

Dayanand

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1 Answer

  • Best Answer
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    Former Member
    Oct 11, 2007 at 09:23 AM

    You can map all the business requirements in SAP MM through Sub-Contractrating process, Services and You can define these payment terms in Vendor. Through MM you can achive all the business processes which you defined below.

    For further clarifications you can go through First thread.

    Regards

    Ravi

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    • Former Member

      Dear Mr.Ravi,

      Customer will not supply any material to the vendor,vendor himself procures the material against the materials mentioned in the contract , as soon as he procures ,vendor sends the invoice of 45% of the amount remaining amount to the customer.Then vendor asper the project contract fabricates the materials and sends to the customer.

      first 10% of the advance payment on award of the contract,

      second time after one month of the contract,again 10% of the invoice, third time vendors procures the raw material for fabrication in his site ,then sends the 45% of the invoice to the customer.

      After fabrication and procuring of the concern material,vendor sends the project material to the customer.

      Then customer pays remaining amount of the contract value after deducting the (101045)% value will be paid to the vendor.

      for this can we procure the project material by thsi process,

      1) Create contract with act assgt -P

      2) For 10% first time,and 10% second time and 45% third time invoices there is no material recived at customer end.

      3) When the vendor sends the contract project material after the fabrication of required specifications,then the material is recieved and pays the remaining invoice amount

      How it is to be done. It is not teh subcontracting process.

      Please suggest.

      Regards,

      Dayanand