Procurement of Exeternal Services

PROCUREMENT OF EXTERNAL SERVICES

A service master record contains a service description and a unit of measure, for example,hour 

You can assign a price to each service master record via the conditions.

This data can be obtained from various SAP applications.

 There are several ways of storing long-term prices for services in the form of service conditions:

At the service level (market price/own estimate)

At the service and vendor level

At the service, vendor, and plant level

Prices stored in the system are automatically proposed in service specifications.

Stock materials are subject to inventory management, whereas services are procured for direct consumption.

As well as the other account assignment categories, you can use the account assignment category U (unk nown) for service items, as  the account assignment is often not yet definite when the goods are ordered.

When you procure materials, you already know a lot of information, such as the exact order quantity.

When you procure servic es, however, you often do not yet know the exact service description or the order quantity (for example, when a printing press needs repair, you do not know whether the vendor just needs to adjust settings or whether he or she has to replace parts).

You often do not know how long it will take or can only give an estimate. To control the costs, you can define value limits.

Materials are procured at item level.

Services are procured  below item level. The item type D activates the service functions and controls or allows you to create service specifications.

An item contains a short text, which is a general description of what you intend to procure. The service specifications are an exact description of the service.

You can format complex service specifications clearly using  outline levels. You can assign any number of service lines to each outline level.

Work that is not contained in the outline or service lines cannot be covered with value limits for unplanned services.

The system  stores services that have been performed in service entry sheets. The relevant postings are made in Financial Accounting and Cost Accounting when the service entry sheets are  signed off. Service entry sheets can be entered and signed off in one transaction or in two  steps.

When entering services, you reference the purchase order. You can copy planned services directly from the purchase order into the service entry sheet. You do not give an exact description of unplanned services or their quantity and price details until you enter them. The system checks whether the unplanned services adhere to the limit defined in the purchase order.

You can set up release procedures for service entry sheets.

The invoice verification procedure is carried out with reference to the purchase order.

This means that all service entry sheets signed off for this purchase order are suggested for invoice verification.

The system compares the  prices on the invoice with the prices from the service entry sheets.

If there are no discrepancies, you can enter and post the invoice.

If the system finds any discrepancies, it blocks the invoice for payment.

The purchase order history lists all the follow-on activities for a particular purchase order;

that is, all services that have been performed, entered, and written off, and all invoices

that have  been entered.