Best practices for procure to pay demonstrate the entire process chain in a typical procurement cycle for a wholesale distributor, including the following activities:

  • Source determination
  • Vendor selection and comparison of quotations
  • Determination of requirements
  • Purchase order processing
  • Purchase order follow-up
  • Goods receiving
  • Inventory management
  • Invoice verification
  • Payment execution


Procure to pay with Load building

A quality management check upon goods receipt is also performed on materials.

  • Minimize transport costs by making the best possible use of the means of transport (ship, rail freight container, truck)
  • Achieve more favorable purchase price conditions by ordering whole truckloads
  • Optimize quantities for procurement from a single supplier
  • Convert all existing purchase requisitions into a collective purchase order or into multiple purchase orders
  • Generate new purchase orders
  • Combine several purchase orders into a load under one collective number to fulfill the existing load conditions and then execute it through the rest of the procurement process.

Procurement of stock material

Support quotation handling, procurement contracts, automatic batch management, and quality inspection in purchasing.

Process Steps

  • Request for quotation (RFQ) mailed to vendors to inquire about prices.
  • A price comparison references the completedRFQsanddeterminesthebestofferforaproduct.
  • Contract
  • Creation of Purchase order and purchase requisition
  • Goods Receipt
  • Automatic Creation of Batch Numbers
  • Quality inspection before placement of goods into unrestricted stock
  • Post of goods

Procurement Contract

Process Steps

  • Creation of a basic agreement between the purchasing organization and a supplier
  • Contract defines the material (or material group) and the quantity
  • Contract assigned as the source of supply, based upon a purchase requisition.
  • The purchase requisition is converted into a purchase order
  • Invoice verification takes place after goods receipt

Internal Procurement

Best practices support three methods of internal procurement:

Stock transfer with delivery

  • cross-plant, internal procurement of materials for a single company code.
  • standard functions include material requirements planning (MRP), purchase requisitions, stock transport orders, transportation planning, and handling of internal deliveries.

Stock transfer without delivery

  • simplifies the process and omits the delivery documents.
  • can be executed within one com- pany code (intercompany) or by using several company codes (cross-company)
  • standard functions, such as MRP, purchase requisitions, stock transport orders, transportation planning, and the handling of internal deliveries.

Cross-company stock transfer

  • allows stock transfers among several company codes.
  • describe the stock transfer between two plants with different company codes.
  • materials required are located in the stock available at the supplying plant.


Process Steps

1.     Creation of Purchase order

2.     Outbound delivery generated

3.     Materials are picked,

4.     Goods receipt posted

Purchase Rebate

  • Support vendors who agree to reductions in the purchase price on the condition that a certain quantity or value of goods is bought
  • Settlement accounting at the end of an agreed-upon period required
  • Includes creation of a purchase’s rebate arrangements, creation of purchase orders, posting of goods receipts, execution of invoice verifications, checking of updated business-volume data, execution of interim billing, execution of business-volume comparison and agreement, and execution of the final settlement.

Extended Rebate Processing for Customer

  • Focus on the use of sales data to determine the success of a new product or a new display, regional differences, and so on
  • A supplier or distributor requires its wholesalers to report their sales by material.
  • Business Analysis preparation based on information on the actual sales quantities and sales values reached by various sales outlets

Special Order Processing

Support procuring material specifically for a single customer.

Process Steps

  • Generation of purchase requisition from a sales order item
  • Converted into a vendor order
  • Materials sent from the vendor to your warehouse and administered as sales-order stock
  • Shipping processing takes place from your own shipping point