Managing Agreements with Suppliers

Outcome

A purchase agreement is created and printed as a valid agreement. Also, you can cancel a valid agreement. A canceled agreement becomes an old agreement, which can then be updated and created as a different agreement.

Uses

You can use the purchase agreement in planned purchase orders and in purchase orders.

How the System Is Affected

These files are updated:

• Purchase Agreement Header (MPAGRH)
• Purchase Agreement Line (MPAGRL)
• Purchase Agreement Prices (MPAGRP)
• Purchase Agreement Types (MPAGRT)
• Purchase Order Header (MPHEAD)
• Purchase Order Line (MPLINE)
• Planned Purchase Orders (MPOPLP)

Before you start

You must define the parameters first before you manage purchase agreements with suppliers.

See the parameters in Define Settings for Agreements

Follow These Steps

1. Create a Purchase Agreement

   Create a purchase agreement when appropriate quantities such as price, yearly requirements, and delivery times are agreed upon with the supplier.

   A purchase agreement can be created manually from 'Purchase Agreements. Open' (PPS100) and defaulted to a purchase order when an order is placed with a supplier.

   An agreement can consist of lines, and the lines can represent agreements on special items or groups of items. The prices can be volume-based, which means that a price list can be registered for the item.

   An agreement can also be created manually or automatically from a quotation. When a purchase quotation is approved, it can be copied to an agreement from 'Purchase Agreement. Create fr Quotation' (PPS150) or by selecting option 32 in 'Request for Quotation. Open' (PPS130).

2. Print a Purchase Agreement

   You can print a purchase agreement for physical references. Use Option 6- Print Documents on 'Purchase Agreements. Open' (PPS100/B).You can also print the purchase agreement from 'Purchase Agreement. Print Documents' (PPS530/E) by raising the status to 30.

   An agreement report, displaying data from the agreement lines, can be printed from 'Purchase Agreement. Print Report' (PPS535/E).

3. Cancel a Purchase Agreement

   You can cancel a purchase agreement when the agreement expires and you no longer need it. You can manually cancel a purchase agreement by changing the status to 90 on 'Purchase Agreements. Open' (PPS100/B).

4. Update a Purchase Agreement

   You can update a specific agreement with new data. Depending on your choice, you can generate new agreement lines on an existing agreement or create a new agreement in ‘Purchase Agreement. Mass Update’ (PPS125).

Correction of incorrect agreement lines

You cannot manually change some values on the purchase agreement lines. For example, the fields 'Purchased quantity' and 'Purchased amount' are accumulated automatically during the processing of a purchase order. If the displayed values are incorrect, you can perform a recalculation of the agreement lines using the program 'Purchase Agreement. Recalculate Values' (PPS952). In the program, you can specify the supplier and agreement to be recalculated. The program computes the purchased quantity and amount for all agreement lines based on all purchase order proposals and firm purchase order lines connected to the agreement. The values are computed based on the setting 'Update purchased quantity' on the agreement header, since this setting determines whether both planned and firm purchase order lines are included. You can recalculate only one agreement at a time since many agreement lines may require an update.

When you initiate the recalculation of an agreement, you can select the checkbox 'Print changes' on (PPS952/E). If selected, a report is generated that includes the updated agreement and a list showing the before and after values for 'Purchased quantity' and 'Purchased amount' for all agreement lines.