Step 7: Supplier performanceīased on the data obtained from the previous step, the supplier performance is evaluated. The goods receipt is then approved or rejected based on the standards specified in the purchasing contract or purchase order. Once the supplier delivers the promised goods/services, the buyer inspects the delivered products or services to ensure that it complies with the contract terms. When an officer approves a purchase order, a legally binding contract is activated. After reviewing the purchase order vendors can either approve, reject, or start a negotiation. Approved purchase orders are then dispatched to vendors. Purchase orders are now sent through an approval loop to ensure the legitimacy and accuracy of specifications. Else, purchase orders are created from approved purchase requisitions. If the requested goods/products have characteristics such as unmanaged category buys, one-time unique purchases, or low-value commodities, then a spot buy can be performed. Incomplete purchase requisitions are rejected back to the initiator for correction and resubmission. Approvers can either approve or reject a purchase requisition after evaluating the need, verifying the available budget, and validating the purchase requisition form. Submitted purchase requisitions are then reviewed by department heads or procurement officers. Requisitions can be created for any type of procurement from standard purchases to subcontracts and consignments.

A requester submits the filled-out purchase requisition form after ensuring that all necessary administrative requirements are met.

Step 2: Create requisitionsĪfter finalizing the specifications/TOR/SOW, a formal purchase requisition is created.

Once a valid need is identified, procurement teams sketch out high-level specifications for goods/products and terms of reference (TOR) for services, and statements of work (SOW). The first step of a procure-to-pay process is to determine and define the business requirements with the help of cross-functional stakeholders. But, here’s how a basic procure-to-pay process looks like Step 1: Identify needs

Procure to pay process sap