Automatic PO creation in SAP / Evaluated Receipt Settlement (ERS)

     If the material master record has been maintained accordingly, Materials Planning can create purchase requisitions automatically. If source lists with valid sources of supply exist, the system automatically assigns sources of supply to the items in the purchase requisitions, based on the source list.

            The system can automatically convert purchase requisitions to purchase orders if sources of supply re assigned to the requisitions. The “Automatically generated purchase order” indicator must also be set in the material master record and vendor master record.

          In the purchase order, you can enter that you expect an order acknowledgement and/or shipping  notification from the vendor. If you have entered a shipping notification, you can reference it when you post the goods receipt.

  Evaluated Receipt Settlement is an alternate way of processing vendor invoices. In ERS settlement   the vendor does not create an invoice for a purchase order transaction. Instead, the system automatically posts the invoice document on the basis of the data from the purchase order and goods receipts. This ensures that there are no discrepancies between the goods invoiced and the goods received.

Ø  The system determines the amount invoiced for this purchase order from the order prices in the PO,the payment conditions, tax information, the delivery quantity entered at goods receipt, and the amount charged for this purchase order transaction.

Ø  If you use the ERS procedure, the conditions arranged with the vendor must be clear and you have to continually update the purchase orders in the system.

Ø  You cannot process planned delivery costs with the ERS procedure.

Ø  In Logistics Invoice Verification, you can create a message for the vendor.

ERS has the following advantages over the Logistics Invoice Verification done by MIRO

Ø  Purchasing transactions are closed more quickly.

Ø  Communication errors are avoided. 

Ø  There are no price and quantity variances in Invoice Verification.

Settings for ERS Procedure: For settling goods receipt automatically for vendor we have to make the following settings

Vendor Master Record: You must set the indicator for ERS and for GR-based invoice verification

Purchasing Info Record: Make sure that No ERS indicator is not checked. The indicator GR-Based IV defaults from the vendor master.

Purchase Order: You also have to set the indicator for ERS and GR-based invoice verification in Purchase order item. The price in the PO must not be estimated. Payment condition key ,the base date of which is set in customizing, must be entered in the header data for the PO. You must maintain a tax code for the item.

Goods Receipt: You must enter the goods receipt with reference to the PO.