SAP MM - Outline Agreement


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Vendor selection is an important process in the procurement cycle. Vendors can be selected by quotation process. After having shortlisted a vendor, an organization enters into an agreement with that particular vendor to supply certain items with certain conditions. Typically when an agreement is reached, a formal contract is signed with the vendor. So, an outline agreement is a long-term purchasing agreement with a vendor. −

The key points to note about an outline agreement are as follows

  • An outline agreement is a long-term purchasing agreement with a vendor containing terms and conditions regarding the material that is to be supplied by the vendor.

  • The terms of an outline agreement are valid up to a certain period of time and cover a certain predefined quantity or value.

An outline agreement can be of the following two types −

  • Contract
  • Scheduling Agreement

Contract

A contract is a long-term outline agreement between a vendor and an ordering party over a predefined material or service over a certain framework of time. There are two types of contracts −

  • Quantity Contract − In this type of contract, the overall value is specified in terms of the total quantity of material to be supplied by the vendor.

  • Value Contract − In this type of contract, the overall value is specified in terms of the total amount to be paid for that material to the vendor.

Follow the steps given below to create a contract. −

Path to Create Contract

Logistics ⇒ Materials Management ⇒ Purchasing ⇒ Outline Agreement ⇒ Contract ⇒ Create

TCode: ME31K

Step 1 − On the SAP Menu screen, select the Create execute icon by following the above path.

SAP contract create

Step 2 − Provide the name of the vendor, type of contract, purchasing organization, purchasing group, and plant along with the agreement date.

SAP contract create detail

Step 3 − Fill in all the necessary details such as the agreement validity start date, end date, and pay terms (i.e. terms of payment).

SAP contract details

Step 4 − Provide material number along with the target quantity. Click on Save. A new Contract will be created.

SAP contract entry

Scheduling Agreement

A scheduling agreement is a long-term outline agreement between the vendor and the ordering party over a predefined material or service, which are procured on predetermined dates over a framework of time. A scheduling agreement can be created in the following two ways −

  • Creating scheduling agreement
  • Maintain scheduling lines for the agreement

Creating Scheduling Agreement

Follow the steps given below to create a scheduling agreement.

Path to Create Scheduling Agreement

Logistics ⇒ Materials Management ⇒ Purchasing ⇒ Outline Agreement ⇒ Scheduling Agreement ⇒ Create ⇒ Vendor Known

TCode: ME31L

Step 1 − On the SAP Menu screen, select the Create execute icon by following the above path.

SAP create scheduling agreement

Step 2 − Provide the name of the vendor, agreement type (LP for scheduling agreement), purchasing organization, purchasing group, plant along with agreement date.

SAP sa create detail

Step 3 − Fill in all the necessary details such as the agreement validity start date, end date, and pay terms (i.e. terms of payment).

SAP sa detail

Step 4 − Provide material number along with the target quantity, net price, currency, and material group. Click on Save. A new Scheduling Agreement will be created.

SAP sa entry

Maintain Scheduling Lines for the Agreement

Schedule lines can be maintained for a scheduling agreement by following the steps given below.

Path to Maintain Schedule Lines

Logistics ⇒ Materials Management ⇒ Purchasing ⇒ Outline Agreement ⇒ Scheduling Agreement ⇒ Delivery Schedule ⇒ Maintain

Step 1 − On the SAP Menu screen, select the Maintain execute icon by following the above path.

SAP sa maintain

Step 2 − Provide the scheduling agreement number.

SAP sa number

Step 3 − Select the line item. Go to Item tab. Select Delivery Schedule.

SAP sa number

Step 4 − Provide the delivery schedule date and the target quantity. Click on Save. Schedule lines are now maintained for the scheduling agreement.

SAP sa details
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