What is the P2P Process in SAP ?
The P2P cycle is the process of acquiring goods or services from external vendors, receiving them, verifying them and processing vendor payments. It integrates MM and FI modules.
- P2P is the process of procuring goods/services and making payments to vendors. It starts with a purchase requisition and ends with payment settlement. It includes steps like PR, PO, GR, IR and Payment.
The P2P cycle in SAP MM means the complete process from purchasing goods or services to paying the vendor. It connects departments like Purchase, Store, Accounts, and Vendor Management.
Steps:-
1️⃣ Purchase Requisition (PR)
This is the very first step — an internal request raised by a user department to buy material or service.
👉 T-code: ME51N (Create), ME52N (Change), ME53N (Display)
The PR tells what material is needed, in what quantity, and when.
2️⃣ Request for Quotation (RFQ)
After PR approval, the purchasing team sends an RFQ to different vendors to get their prices and terms.
👉T-code: ME41 (Create RFQ), ME47 (Maintain Quotation), ME49 (Compare Price).This step helps select the most suitable vendor.
3️⃣ Purchase Order (PO)
Once the vendor is finalized, a Purchase Order is created and sent to the vendor as a legal contract.
👉T-code: ME21N (Create), ME22N (Change), ME23N (Display)
It defines price, quantity, delivery date, and payment terms.
4️⃣ Goods Receipt (GR)
When the vendor delivers the material, the store or warehouse team records a Goods Receipt.
👉 T-code: MIGO
This updates the stock in the system and creates a material document for reference.
5️⃣ Invoice Verification (MIRO)
After goods are received, the vendor sends an invoice. The invoice is verified in SAP to ensure quantity and price match the PO and GR.
👉T-code: MIRO. Once verified, the invoice becomes ready for payment.
6️⃣ Vendor Payment (FI Integration)
Finally, the finance department makes the payment to the vendor.
👉T-code: F-53 (Manual Payment) or F110 (Automatic Payment Run)
This completes the P2P process.
What are Key Steps in P2P cycle ?
Purchase requisition (Optional) - ME51N
Purchase order Creation - ME21N (Manage Purchase Orders)
Goods Receipt - MIGO (Post Goods Receipt)
Invoice Receipt - MIRO(Create Supplier Invoice)
Payment to Vendor - F110 (App. Manage Automatic Payment)
What is the accounting entry at the time of goods receipt in SAP S/4HANA ?
Dr Inventory A/C
Cr GR/IR Clearing A/C
Note - No Vendor accounting entry is posted at this stage.
What are the common T-codes used in P2P ?
ME21N - Create Purchase Order
MIGO - Goods Receipt
MIRO - Invoice Receipt
F110 - Automatic Payment Run
F-53 - Manual Payment
How is GST handled in the P2P cycle in india ?
GST is configured using tax procedures (TAXINN). During Invoice posting (MIRO), input GST is automatically calculated based on tax codes.
How is invoice verification nandled in sap ?
Invoice verification is done using MIRO. The s system matcheds the PO, GR, and invoice to ensure accuracy (3-way match). This step posts accounting entries and updates vendor balances.
What master data is involved in P2P ?
-- Vendor Master (FI & MM views)
--- Material Master
--- Purchasing info records
-- Tax codes
-- G/L accounts (Inventory, GR/IR, Vendor Record)
How do you configure the Automatic Payment Program (APP) ?
Use T-code F110, stpes include:
- Configuration in FBZP
- Assign company code, payment method, bank details
- Maintain parameters, proposal run and execute payment.
What are the integration points between FI and MM in P2P ?
- GR/IR account (BS)
- Inventory postings
- Tax accounting
- Vendor reconciliation account
How does S/4HANA simplify the P2P process ?
S/4HANA removes redundant tables (e.g.BSEG, BKPF simplified) provides Fiori apps for real time analytics and embeds machine learning for invoice matching and fraud detection.
What are blocking reasons during invoice verification ?
- Quantity variance'
- Price variance
- Missing GR
- Duplicate invoice
- Mismatch in PO/GR/IR
What is the use of fiori in the P2P process ?
Fiori apps like "Manage Purchase Orders", "Post goods receipt" and "Manage Supplier Invoices" allow users to perform tasks easily with better UI and analytics.
Explain the role of payment terms in vendor master ?
Payment terms define due date calculation and cash discounts. It controls the aging and payments behavior of vendor invoice.
How is withholding Tax(TDS) handled in P2P ?
TDS is configured in vendor master. At MIRO or F-43/F-02, SAP automatically calculates and posts TDS to the correct to the G/L account.
ME51N - Create Purchase Requisition
ME54N - Approve Purchase Requisition
ME21N - Create Purchase Order
ME28 - Approve Purchase Order
MIGO - Post Goods Receipt
MIRO - Post Invoice
FBL1N - Display Vendor Line Item
F-44 - Clear Vendor Account
F-53 - Manual Payment Processing
F110 - Automatic Payment Run
