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Former Member

Procurement - one big value PR - many deliveries, additional costs

Dear Experts,

could you suggest how to proceed in the following situation - we have a big contract for some amount (eg: 1 mEuro).

We will have a number of deliveries during 2 years. Each delivery will have additional costs (that should be indicated in PO in conditions level). Details of each PO (list of material that will be received) will be known before shipment only.

How to proceed - to make one PR for "equipment for 1 mEuro" - if so how to deal with PO's? we need to show in system list of all materials received.

Please help me

Maybe there is some other way of how to put in system properly such purchases?

Thanks for help



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1 Answer

  • Mar 26, 2018 at 01:58 PM

    A contract is usually at material level and not just a total value.

    Deliveries are not made against a contract or a huge PR.

    "Details of each PO (list of material that will be received) will be known before shipment only"

    How can a vendor know what you want and when?

    And why does the vendor know this better than you?

    Actually this whole described process does not look like the standard procurement cycle is understood.

    Why should only 1 huge PR be created? Is this the PR to ask purchasing to create a contract?

    What can't you do in the PO? Where is the problem with the update before the goods are received?

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    • Former Member

      It's not a simple purchase - it's about procurement of a complicated equipment that will be produced for us based on our requirement and delivered partialy (project): eg. conveyors in 2 months, gearboxes in 7 months, elevators in 12 months ets.

      In such cases our vendor have his own subcontractros.

      As soon as we receive and install everything it will be capitalized as one equipment.

      Each delivery will have additional costs that should be indicated on PO level to show properly cost of equipment (customs costs, delivery etc).

      If I create a PO based on PR "equipment 1 pc*1 mEuro":

      1. will never know what is included there (what materials were ordered and received. Also different materials should be assigned to different WBS elements)

      2. if we will receive materials for ~ 48,3 kEuro (0.0483) - how to make properly GR (only 2 decimals are available n SAP)?

      We need to have PO to make a prepaymet to vendor. If it is one line item PO I wont be able to update it before GR if prepayment is already done.

      Sorry if I propably confuse you with all that but our management want to have one PR&one PO to make it easier but I cant find a way to do it easier than to create PR based on shiping documents from supplier and PO based on this PR.

      Thanks for help.