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The Purchase-to-Pay (P2P) process—also called Procure-to-Pay—takes you from “we need something” all the way to “vendor has been paid.” When it runs well, inventories stay healthy, operations don’t stall, and vendors keep saying yes to your next PO. Below is a practical, step-by-step walkthrough in plain language, centered on the standard SAP transactions most teams use every day.

If interested in how inbound delivery documents can be used to improve the Goods Receipt (GR) process please see: Goods Receipt the Smart Way: Centering SAP MM Procurement on the Inbound Delivery

At a Glance: One-Line Flow

Purchase Requisition (ME51N) ➝ Purchase Order (ME21N) ➝ Goods Receipt (MIGO) ➝ Quality Inspection (QA32) ➝ Invoice Verification (MIRO) ➝ Payment Processing (F110 / F-53)

Who does what?

  • Requesters / Planners start things off with a need (PR).
  • Buyers turn approved needs into POs and manage vendors.
  • Warehouse / Receiving posts GRs and flags issues.
  • Quality inspects when required.
  • Accounts Payable (AP) posts invoices and pays vendors.

Keep that RACI in mind as we walk through each step.

Purchase Requisition (PR)

T-Codes: ME51N (Create) · ME52N (Change) · ME53N (Display)

A Purchase Requisition is the internal “please buy this” document. It captures what you need, how much, by when, and—if you’re buying consumables—which cost center/WBS/internal order gets charged.

What to enter well:

  • Material / Service: Use the material master when possible (clean data = smooth downstream). For services, describe clearly and consider a service PO later.
  • Quantity & UoM: Keep it realistic; over-requesting leads to corrections later.
  • Delivery Date & Plant/Storage Location: Align to real need dates and where stock will live.
  • Account Assignment (K, P, A, etc.) for consumables; leave blank for stock materials.

Behind the scenes: PRs can go through a release strategy (approvals) driven by value, account assignment, purchasing group, etc. Clean PRs speed up approvals and reduce buyer back-and-forth.

Tip for power users: If you know the source of supply, add an info record or vendor note on the PR to guide the buyer.

Purchase Order (PO)

T-Codes: ME21N (Create) · ME22N (Change) · ME23N (Display) · ME29N (Release/Approve)

The Purchase Order is the legal commitment to your vendor. It tells them exactly what, how much, at what price, to where, and by when—and it controls your receiving and invoice checks later.

What buyers lock down:

  • Vendor and purchasing organization/group.
  • Material/Service lines with pricing (conditions), delivery dates, and plant/storage location.
  • Texts for clarity (e.g., quality notes, packaging).
  • GR-Based IV (GR-based invoice verification) flag when you want invoices to match individual GRs.
  • Output (print/email) to send the PO to the vendor.

Approvals: Many companies require PO release via ME29N. Release strategies can differ for stock vs. services, or by value thresholds—keep an eye on your document status.

Pro tip: For services, consider a Service PO with planned service lines and control price/quantity through service entry sheets (more on this under variants).

Goods Receipt (GR)

T-Codes: MIGO (Post GR) · MB03 (Display material document)

When goods arrive (or services are confirmed), the Goods Receipt records that you got what you ordered. For stock materials, GR creates inventory; for consumables, it posts directly to the account assignment.

What receiving enters:

  • Reference to PO (best practice).
  • Movement type (commonly 101 for GR to unrestricted).
  • Quantities actually received.
  • Batch/serial numbers if applicable.
  • Storage location / bin based on your warehouse process.

Outcomes:

  • Creates a material document (view via MB03).
  • Updates stock and PO history.
  • Triggers QM inspection lot if the material/PO is set for quality.

Corrections: Wrong quantity? Use reversal in MIGO (movement 102) or a return to vendor (movement 122) where appropriate.

Quality Inspection (Optional)

T-Code: QA32 (Worklist for inspection lots)

If the material is subject to Quality Management, GR spawns an inspection lot. Quality reviews samples against specs, posts usage decisions, and moves stock accordingly.

Typical flow:

  • Inspect via QA32 worklist.
  • Post usage decision (e.g., accept to unrestricted, move to blocked/scrap, or return to vendor).
  • Communicate issues quickly; early rejections prevent bad invoices and rework later.

Tip: Align inspection types and stock postings (e.g., to quality inspection stock) with purchasing expectations to avoid invoice blocks.

Invoice Verification (IV)

T-Code: MIRO (Enter incoming invoice)

Now AP matches the vendor’s invoice against what was ordered and received—this is the classic three-way match: PO ↔ GR ↔ Invoice.

What AP checks in MIRO:

  • Reference PO and lines are correct.
  • Quantities and prices align with PO/GR.
  • Tax codes, payment terms, and baseline date.
  • Freight / surcharges (either as separate conditions or additional lines).
  • Currency and vendor bank data are correct.

If something’s off: The invoice can post to the suspense/block (price/quantity variances beyond tolerance). Buyers or receivers fix the root cause (PO change, quantity correction, credit memo), and AP clears the block.

Pro tip: With GR-based IV, partial receipts lead to partial invoice matches—great for staged deliveries or milestone services.

Payment Processing

T-Codes: F110 (Automatic payment run) · F-53 (Manual payment) · FBL1N (Vendor line items)

Once invoices are posted and due, payments go out.

  • F110 builds a proposal (based on company code, next run date, payment methods—ACH, check, wire—minimum amounts, etc.), which AP reviews and then executes to create payment documents and remittance.
  • F-53 is for ad-hoc, manual postings when you need a one-off payment.
  • FBL1N lets you view open/cleared vendor items, chase exceptions, and confirm that invoices were picked up in the last run.

Controls that matter: Payment terms, tolerances, dual control, and bank format outputs (e.g., ACH files) are all part of keeping cash under control and audits painless.

Variants You’ll See in Real Life

  • Services: Use a service PO and confirm work via Service Entry Sheets (often ML81N in classic GUI). AP invoices should match approved service entries; GR isn’t a physical receipt but a service confirmation.
  • Consumables vs. Stock: Consumable buys post to cost objects at GR; stock builds inventory. Choose the right account assignment at PR/PO time.
  • Freight & Extras: Model freight as a condition on the PO, a separate line, or handle via logistics freight settlement depending on your setup.
  • Returns: If you sent back goods, ensure a return/credit flows through MIGO and MIRO so AP doesn’t pay for rejected material.
  • Quality Holds: If inspection fails, expect invoice blocks or credit memos until the story is resolved.

Governance & Controls (The Boring Stuff That Saves You)

  • Release Strategies on PRs/POs enforce approvals by value, plant, or category.
  • Source lists/info records/contracts keep pricing fair and auditable.
  • Tolerance keys (price/quantity) reduce noise while still catching meaningful variances.
  • GR-Based IV ensures the invoice can’t exceed what was physically received.
  • Segregation of duties: Requesters shouldn’t approve their own POs or invoices.

Helpful Checks & Reports (Day-to-Day Visibility)

  • PO history on ME23N: Did we receive and invoice this line?
  • Material document via MB03: What exactly got posted at GR?
  • Vendor items via FBL1N: Which invoices are open, cleared, or blocked?

(Your organization may also process this through Fiori apps; the core checks remain the same.)

Common Pitfalls—and Quick Fixes

  • Wrong account assignment on a PR → PO inherits it; fix early in ME52N/ME22N.
  • Price mismatch → Buyer updates PO conditions; AP reprocesses invoice.
  • Partial deliveries not reflected → Post the right partial GRs; enable GR-based IV.
  • Quality rejections → Use QA32/usage decision and coordinate a return to vendor so AP doesn’t pay the full amount.
  • Late payments due to missing bank data or terms → Maintain vendor master correctly (vendor onboarding matters!).

Putting It All Together

The P2P cycle thrives on clean hand-offs. Requesters provide clear needs, buyers lock down commercial terms, receiving records reality, quality protects standards, and AP pays on time. Each step leaves an audit trail and updates the next step’s expectations.

If you only remember five things, make it these:

  1. Start clean with accurate PRs.
  2. POs are contracts—get vendor, price, and terms right.
  3. Post GRs promptly to reflect what physically happened.
  4. Let three-way match work—it prevents overpayments.
  5. Automate payments via F110 and keep vendors happy.

T-Code Cheat Sheet

  • PR: ME51N / ME52N / ME53N
  • PO: ME21N / ME22N / ME23N · Release: ME29N
  • GR: MIGO · Material Doc Display: MB03
  • QM (optional): QA32
  • Invoice: MIRO
  • Payment: F110 (automatic) · F-53 (manual) · Vendor Items: FBL1N

Final Word

P2P is about clarity and consistency. Use the right document for the right job, keep masters clean, and let SAP’s controls (release strategies, three-way match, payment proposals) do their job. When each role plays their part—and uses the T-codes above—the process hums, vendors get paid on time, and your team gets back to running the business instead of chasing exceptions.

If you have question on this or any other PortSAP Consulting blog please feel free to contact us at Blog@PortSAP.com. Or if you are looking for Top Quality SAP Consultants please feel free to contact us.

The author, Ray Hornbrook, has over 19 years of SAP functional and technical experience.  Ray started his career in SAP as a MM/PP Subject Matter Expert (SME) for a SAP implementation in 1998 and is now a Senior Level SAP Consultant.  Since Ray has worked both sides of SAP, business end user and IT professional, he is able to communicate effectively with both IT and Business team members. Having a background as an SAP business end user has helped Ray greatly in his consulting career.  The business background helps him better communicate with the business members of the team.  As well as helping bridge gaps in communication between the IT and Business team members.

To find out more about Ray Hornbrook please check out his LinkedIn profile by clicking HERE.

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