SAP Procure-to-Pay Accounting Entries from PO to Payment

Procure-to-pay is a chain of operational events. The accounting entry should prove what the company received, what it owes and what it paid.

Purchase order

A standard purchase order is normally a commitment, not an FI posting. It records quantity, price, delivery and account-assignment expectations.

Goods receipt

For valuated inventory, a simplified entry is:

• Debit inventory
• Credit GR/IR

The company controls the goods, but the supplier invoice has not yet established the final payable.

Invoice receipt

When the invoice matches the receipt:

• Debit GR/IR
• Debit input VAT, when applicable
• Credit supplier

Price or quantity differences may create additional lines depending on stock coverage, price control and tolerance settings.

Supplier payment

Payment clears the supplier liability:

• Debit supplier
• Credit bank clearing or bank

Cash discounts and withholding tax can add lines. The payment document must be read together with the cleared invoice.

The three-way control

Compare purchase order, goods receipt and invoice receipt. Quantity, price and timing differences explain why invoices block or GR/IR remains open.

Reconcile by document chain

Use purchase-order history, material document, invoice document, supplier line items and clearing document. Do not review the final bank posting in isolation.

The complete process explains why the purchase order can exist without FI, why receipt uses GR/IR and why the supplier appears only at invoice time.