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42 views

03 03 Contracts

Uploaded by

jyotiba1127
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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SAP MM CONTRACTS

-GANESH PADALA
www.ganeshsapscm.com

Purchasing Contract:
Definition:
A legally binding document agreed between a purchaser and a vendor.
A purchasing contract defines the purchasing and supply of goods or services at agreed prices
and conditions. The quantity and value of the purchase orders, limit confirmations, and invoices
are released against the contract
The contract does not contain specific delivery dates or the individual delivery quantities. These
are specified subsequently in release orders issued against the contract when customer requires
them

Use:

 When purchasing department want to setup long term relationship with vendor for
specific group of materials or services
 To negotiate binding conditions for purchasing (i.e. price, quantity, discounts etc.)
without actually releasing purchase order
 The Purchase Order which is created against a Contract is called as Release Order
 Using pre-negotiated offer during day-to-day purchasing
 Increase speed of actual purchasing to satisfy actual requirements
 Provides better monitoring and control of actual release of purchase order against offer

Structure of an Outline Purchase Agreement:


An outline purchase agreement consists of the following elements:
Document header: contains information relating to the entire agreement. For example, the
vendor information and header conditions are in the document header.
Items: containing the information specific to the relevant material or service. For example:
Statistics on ordering activities for the item
Quantity or price of the item
Conditions, such as quantity discounts and surcharges

Types of Contract:
Value contract (MK): The contract is regarded as fulfilled when release orders totalling a given
value have been issued. Use this contract type when the total value of all release orders should
not exceed a certain amount.
Quantity contract (WK): The contract is regarded as fulfilled when release orders totalling a
given quantity have been issued. Use this contract type when the total quantity to order over the
duration of the contract is known.
Ways of Creating Contracts:
Contract can be created in one of the following ways:
 Manually: Enter all the contract data manually.
 Using the referencing technique: Create a contract by referencing
a. Purchase requisitions
b. RFQs/quotations
c. Other contracts

Special characteristics of Contracts:

 Contracts are outline agreements. They do not contain details of the delivery dates for
each of the items.
 If a purchasing information record with conditions exists for the material and the vendor,
the system automatically suggests the net price according to these conditions when you
create the contract item.
 Contract validity period is defined in the contract header as the validity period
 The Purchase Order which is created with reference to the Contract is called as Release
order

Transaction Codes in SAP:

ME31K – Create Contract


ME32K – Change Contract
ME33K – Display Contract
ME35K – Release Contract

The Purchase Requisition document types which are linked to the Contract Document type in the
configuration can only be used for creating the Contract with referenc to PR.

LP- Without release documentation.

LPA - with release documentation (Please see the box Rel doc. checked at defining document types
for SA).
The scheduling agreement delivery schedule is created in the SAP System. In order that the
information in the delivery schedule can be transmitted to the vendor, the system generates a
message for the schedule.

If you are using scheduling agreements without release documentation (document type LP), the
message is generated directly.

If you are using scheduling agreements with release documentation (document type LPA), you must
explicitly generate SA releases.

Message --> Output of the document either E-mail or Fax or Print out etc..

The schedule lines of a scheduling agreement release contain finalized information for the vendor
regarding quantities and delivery dates. The schedule lines are recorded with the aid of the release
documentation and can thus be displayed and verified at any time. The release documentation
enables you to see which schedules you transmitted to the vendor during the last two weeks, for
example, and check the correctness of goods receipts against the relevant schedule lines.

There are two kinds of scheduling agreement release:

Forecast (FRC) delivery schedule

Provides the vendor with longer-term data regarding the quantities needed of a material and when
delivery is required.

Just-in-Time (JIT) delivery schedule

Provides the vendor with data on required quantities and desired delivery dates/times covering the
near future.

If you wish to work with JIT delivery schedules, the JIT schedule indicator must be set in the material
master record (Purchasing or MRP 2 view) and the Additional data of the scheduling agreement
item.

In the case of scheduling agreements with release documentation, you can display the finalized
delivery scheduling information transmitted to the vendor.

Displaying Release Documentation for a Scheduling Agreement Item

From the Scheduling view, choose Item ® SA release docu.

You will then obtain an overview of the releases for the relevant scheduling agreement item with the
header data.

From this overview you can:

u2013 Branch to the display of the individual schedule lines:

Select the desired scheduling agreement release and choose Goto ® Sched. lines/release.
You will then see the schedule lines that were transmitted, with the discrete and cumulative
quantities.

u2013 Compare two scheduling agreement releases with each other:

Choose Goto ® Overview JIT schedules or Overview FRC schedules.

Select the desired releases and choose Goto ® Compare releases.

You will see the header data of the two releases and a comparison of the schedule lines in each
case, with the quantities, their differences, and the cumulative figures for the difference.

You can view the results in the form of a graphic. To do so, choose Goto ® Overview graphic.

Printing Release Docu. for Scheduling Agreement Item

Choose Outline agreement ® List displays ® By vendor. Use the list variant EVERYTHING and
document type LPA.

Choose Program ® Execute.

You will get an overview list containing JIT and forecast delivery schedules.

Choose List ® Print.

To view the schedule lines for an SA release, position the cursor on the desired line and choose
Environment ® Display document.

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