Procurement Cycle: 4. Purchase Order Processing (part 1)

In the previous step, the buyer has selected the vendor which will provide the material/service needed in PR. Now, the buyer needs to create a Purchase Order (PO) based on the PR and the reference document (that can be an contract, an info record, or a quotation).
Purchase Order (PO) is a formal document that issued by a company to request materials/services to a vendor with certain conditions agreed, such as the materials/services specification, quantity, delivery date, price, terms of delivery, terms of payment, etc.
In SAP ERP software, PO can be created from various ways, such as:
  • From ME57 t-code.
ME57 is a t-code to Assign and Process Purchase Requisitions. With this t-code, buyer can display list of PRs that he needs to process. The buyer can select the PR items that will be processed and check whether these items have existing source of supply documents (such as contract or info record) by clicking “Assign Automatically” button.
If there is existing source of supply that can be used to order the PR items, the buyer can directly create a PO from this t-code by clicking the “Assignment” and then “Process Assignment” button. There will be a pop up window like this:

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The buyer needs to fill the “Order Type”, “Purchase Order Date”, “Purchase Order number (in the case of external number assignment)”, “Purchasing group”, and “Purchasing Organization” fields.  Those fields will be explained later in this article. After pushing the OK button, SAP ERP will redirect the buyer to the ME21N (Create Purchase Order) t-code screen.


  • Directly from ME21N t-code.
    ME21N is t-code to Create Purchase Order. It can be accessed from ME57 t-code (as explained above) or directly through SAP Menu tree or SAP command field.
    In SAP ERP software, it is possible to create PO with or without reference. It depends on your business process. Usually, PO is created by referring to PR and a source of supply document (which can be a contract, an info record, or a quotation). In ME21N screen, the buyer can copy the data from PR and source of supply document by simply entering the PR and source of supply documents number in the corresponding fields and hit enter. By doing so, the buyer does not need to retype the data.


Like other purchasing documents (RFQ, contract, scheduling agreement), PO consists of document header, one or more items, and additional data of each item.

Purchasing Documents Header

PO and other purchasing documents header contains information that refers or relevant to the entire document. The RFQ, contract, scheduling agreement, and PO purchasing document header information are stored in the EKKO table. There are more than 120 fields on the EKKO table (in SAP ECC 6.0 version), while on previous version there are less fields (in SAP 4.6C version, there are about 70 fields). Some of them are relevant to PO and some are not (such as “Deadline for submission of bid/quotation” and “Binding period for quotation” that only relevant to RFQ/Quoation).
In SAP ERP standard, some important purchasing document header data that relevant to a PO are:


  • EBELN – Purchasing document number: the identifier of the PO. It must be unique in a client. EBELN and MANDT combined are the primary keys of EKKO table. We can configure whether the purchasing document number can be input by the PO creator (external numbering) or determined by the system (internal numbering).
  • BUKRS – Company Code: The organizational unit in SAP in which the PO exists. It determines the chart of account to which Goods Receipt (GR) and Invoice Receipt (IR) transactions of the PO are posted.
  • BSTYP – Purchasing document category: an identifier to differentiate between purchasing document categories. In standard SAP ERP, there are four categories:
    • A: Request For Quotation (RFQ)
    • F: Purchase Order (PO)
    • K: Contract
    • L: Scheduling Agreement

    As purchasing documents from various categories are stored in the same table, this field can be used in ABAP programming to determine whether a record in EKKO table is an RFQ, PO, contract, or scheduling agreement. In this article, the focus is on the purchasing document with “F” category (PO).

  • BSART – Purchasing document type: an identifier to differentiate between groups of purchasing documents that has same attribute (such as number assignment, field selection, etc). A group of purchasing documents with same document type will have same behavior. So, with document type, we don’t have to configure the behavior for each Purchasing document. We only need to configure the behavior for each purchasing document type. In standard SAP ERP there are some default PO document types that can be used for different purpose, such as:
    • “NB – standard PO” document type. PO with this default document type is used to procure a material/service externally, such as from 3rd party supplier/vendors, or from subsidiary or related company.
    • “UB – stock transport order” document type. PO with this default document type is used to procure a material internally, such as from other plant of the same company.

    We can create or edit our own document type as our own requirement with “OMEC” t-code or “SPRO” t-code menu: Materials Management – Purchasing – Purchase Order – Define Document Type.

    PO document type determines several things, such as:

    • Item number interval.
      It defines the default interval size of one PO item number with the next one. For example, in the standard SAP ERP, the item number interval is 10. It means when we create a PO item without filling the “Item Number of PO” field (on ME21N screen), the first one’s “Item Number of PO” will be 10, the second one’s will be 20, the third one’s will be 30, and soon.

    If you want to insert an additional item between the first and the second item, you can just create it on the last record/row, then fill the “Item Number of PO” field with the value that lies between 10 and 20, such as 15. When you hit “enter” the new item will be placed in the second row (between item 10 and 20).

  • Whether we can use internal number assignment, external number assignment, or both of them.Internal number assignment means that the PO number is determined by SAP, with sequential numbering. When a user creates a PO, he can’t fill the PO Number field.
    External number assignment means that the PO number is determined by the creator of the PO. When a buyer creates a PO, he must fill the PO Number field.
    The number of a PO must be unique. There can’t be more than one PO with the same number.
  • Number range: the allowed interval of PO number.For each internal and external number assignment we have to define the allowed interval of PO number.
    For example, a PO document type can have both assignments.
    In the case of internal number assignment, the number range interval is from 4500000000 to 4599999999. SAP will determine the PR number sequentially in that range, refers to the last PO number created.
    In the case of external number assignment, the number range interval is from 4200000000 to 4299999999. PO creator must fill the PO number field with the value in that range which has not been assigned to other PO.
  • The screen layout of PO document.Document type combined with other field selection keys (such as: transaction, activity type, item category/document category, function authorization/release status, and subitem/creation indicator) determines which fields are “required”, “optional”, “displayed only”, or “hidden” in a PO document.
  • The allowed item category.Item category is a key defining how the procurement of a material or service item is controlled.
    There are 7 standard item category in SAP ERP which are: blank (“standard”), K (“consignment”), L(“subcontracting”), B (“Limit”), S (“Third party”), U (“Stock transfer”), and D (“services”).
    Item category combined with other field selection keys determines the field selection and whether any additional data screens are shown such as component (L), limit (B), customer (S), services (D), etc. In addition, it determines whether a goods receipt or invoice receipt is to follow.
  • The linkage purchase requisition – document type.A PO is usually created by referring to purchase requisition (PR). We can set that a specific PO document type can only be processed by referring to the specific PR document types.
    The linkage purchase requisition document type is set for each item category allowed in PO document type configuration.


We can set in SAP that the PO must be approved or released before it can be used in subsequent function (print, goods receipt, invoice receipt, etc). Unlike PR release strategy, PO release strategy can only be done in header level (overall release), cannot be done in item level (item-wise release).

PO document type can also be used as:

  • A characteristic in determining Release Strategy, so we can distinct the approval needs for each PO document type.
  • An authorization object of a role, so we can restrict that a user with specific role can only create/edit/display a PO that has a specific document type. The authorization object is M_BEST_BSA (Document Type in Purchase order).


  • AEDAT – Date on which the record was created: PO creation date, which is copied from system date automatically when the PO is created (saved at the first time).
  • ERNAM – Name of Person who Created the Object: the SAP user of the PO creator.
  • LIFNR – Vendor’s account number: the vendor number to which the PO items are ordered.
  • ZTERM – Terms of payment key: Key for defining payment terms composed of cash discount percentages and payment periods.
  • EKORG – Purchasing Organization: the Purchasing organization which issues the PO.
  • EKGRP – Purchasing Group: the purchasing group which issues the PO.
  • WAERS – Currency key: the currency that is used in the PO.
  • WKURS – Exchange rate: the exchange rate used to translate the PO currency into the local currency. If the PO currency key is the local currency, then he exchange rate will be 1.
  • KUFIX – Indicator: Fixing of exchange rate: Yes or No. If yes, then the PO currency and the exchange rate cannot be changed during invoice verification.
  • BEDAT – Purchasing document date: PO date. It can be different with PO creation date.
  • VERKF – Responsible salesperson at vendor’s office. It’s copied from vendor master data.
  • TELF1 – Vendor’s telephone number. It’s copied from vendor master data.
  • INCO1 – Incoterms (part 1): commonly used trading terms that the company (buyer) and vendor (seller) agree to follow about the shipping transaction to be completed. The standards are established by the International Chamber of Commerce (ICC), such as Free on Board (FOB), Cost, Insurance, and Freight (CIF), Delivered cleared by customs (DDP), etc.
  • INCO2 – Incoterms (part 2): Additional information for the primary Incoterm. For example, if the primary incoterm is FOB, the incoterm (part 2) can be “Dallas”.
  • KNUMV – Number of the document condition. PO condition is stored in another table, which is KONV. The link between EKKO and KONV table is this KNUMV field.
  • FRGSX – Release strategy: Release strategy that is assigned to the PO.
  • FRGKE- Release indicator: specifies whether the PO has been released or not.
  • MEMORY – Purchase order not yet complete: specify whether the PO has been complete or not (on hold). If PO is “on hold”, it can’t be printed, GR, or Invoiced.


In the next article I will explain about PO item data.

10 thoughts on “Procurement Cycle: 4. Purchase Order Processing (part 1)

  1. Any BSTYP started with B?as for me im currently working 4.0version(very old :p), i found B is for requisition. such Framework req, NB-Purchase requisition.kindly explain.kinda new in MM module.

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