Releasing Requisitions,This post describes the release procedure for requisitions in Purchasing. (Note that in this context, “release” means giving approval, or clearance, to go ahead with the procurement of the materials or services set out in the requisition, and should not be confused with the issuing of orders against longer-term purchase agreements, which may also be referred to as “releasing” (US) or “calling off” (UK)).
It discusses how the release (approval) of purchase requisitions is controlled, how you can determine who must release (approve) a purchase requisition, and how a purchase requisition is actually released (approved).
Within Purchasing, there are two procedures for releasing purchase requisitions:
- Release procedure 1 (without classification)
- Release procedure 2 (with classification)
Release Procedure for requisitions in Purchasing
Release Procedure 1
This procedure serves as a correction and approval procedure for purchase requisitions. Its aim is to check the data on material, quantity, and dates for accuracy and ensure the correctness of the specified account assignment and source of supply. Purchase requisitions are released on an item by item basis.
For example, suppose strategy S1, which is assigned to requisitions with a face value of more than $10,000, requires approvals as shown in the following table.
Release prerequisites in the case of release strategy S1
Strategy Release point
Strategy prerequisites S1
1 – Project manager None
2 – Department manager None
3 – Cost center manager 1, 24 – Controller None
5 – CEO 1, 2, 3, 4
In addition, the following release prerequisites apply for release strategy S1:
Release points 1 – 4 must release a requisition before it is released by the CEO (release point 5).
Release point 4 may release at any time, but before release point 5.
After a requisition is released by release points 1 – 3, Purchasing may issue RFQs to potential vendors.
This procedure is only available for purchase requisitions.
Release procedure 2
The aim of this procedure is to replace manual written authorization procedures using signatures by an electronic one, while maintaining the dual control principle. The person responsible processes the relevant document in the system, thereby marking it with an “electronic signature” which can give the document legal force. A purchase order contains an item relating to 1,000 pieces of Steel 1 for plant 2. The material belongs to the material class Metal 05. The item has a value of 15,000 dollars. As soon as the item has been entered, the system passes on the field contents from MM Purchasing to MM Classification in a communication structure. Classification first selects the relevant characteristics and then checks the characteristic values.
For example, let us assume that the Classification System has been set up as follows: System settings for 01-S4 (Group 01, purchase order, strategy S4)
Characteristic Characteristic value Plant 1, 2, 3 Material class Metal 1Value > $12,000
This means that the characteristics plant, material class, and value of item are relevant for the determination of the release strategy for purchase orders. The system determines the release strategy S4 on the basis of the characteristic values.
This procedure is available not only for purchase requisitions but for all other purchasing documents as well.
Release on an item-by-item basis is only possible in the case of requisitions, not in the case of the other purchasing documents.
Also See: SAP Third Party Process Step by Step
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