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Figure 4-31: Financial impact of vendor payment

Demo 4.11: Make payment to vendor

INTEGRATION WITH OTHER PROCESSES
It should be clear from the preceding discussion that the procurement process
is highly integrated with several other processes within an organization. Some
of these integration points, such as with fi nancial accounting, were explained in
detail, while others were briefl y mentioned. We elaborate on these other inte-
gration points in later chapters. Below we briefl y summarize how procurement
is linked with the other processes. Figure 4-32 illustrates these linkages.
The vendor master record is jointly maintained by purchasing and
accounting. In addition, several steps in the procurement process, such as goods
receipt, invoice verifi cation, and payment processing, impact general ledger
accounts. Further, when a company purchases materials for consumption, it
uses a controlling object such as a cost center — which is related to manage-
ment accounting — to charge groups or departments for the purchase.
Activities in materials planning, production, fulfi llment, enterprise asset
management, and project management generate purchase requisitions that are
processed by the procurement process. Objects in these processes, such as sales
orders and production orders, are then charged for the materials purchases.
Finally, procurement involves materials movements and quality inspections
that are the domain of inventory and warehouse management.

REPORTING

Standard reporting tools in the transactional system are used to generate both
online lists based on selected master data and documents and work lists to
identify pending work associated with various process steps.

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