Service purchase orders: planned services and limits

A lean service PO looks like any other PO in the Manage Purchase Orders app (or ME21N). There is no special app for ordering services; what makes an item a service is its product type group. Product type group 2 (service) tells SAP that the item is a service, so it is confirmed with a service entry sheet instead of a goods receipt.

The rest of the PO is standard: supplier, purchasing organization 1710, purchasing group, payment terms, conditions and output. Service POs are approved by the same flexible workflow as other POs (course sap-mm-207) and sent to the supplier through the same output management. What differs is what the supplier and Contoso agree on: either a defined piece of work at a price, or a budget for work that will be defined later. Those two cases are the planned item and the limit item.

Two ways to describe the service

A service item can reference a service product, a material master with product type group service (delivered with material type SERV in the standard system), which brings its description, material group and often a price. Or it can be free text: a short text, a material group, product type group service and an account assignment category. Lean services can only be ordered with account assignment. Contoso created service products for recurring work (conveyor inspection, forklift service) and uses free text for one-offs.

Planned services

A planned item fixes what will be performed and at what price, like a material item: four inspections at $4,800 each. Each service entry sheet confirms a quantity against it, and the open quantity drops. A planned item suits work you can specify in advance: inspections, cleaning, a fixed-price project milestone.

Limit items for unplanned services

Much service work cannot be specified in advance. A limit item sets an overall limit: the maximum value that may be recorded against the item. It also carries an expected value, the realistic estimate used for planning and commitments. Without a limit item, unplanned services cannot be entered on the service entry sheet. When entry sheets are recorded, SAP checks them against the overall limit.

Limit items have a validity period, and the entry sheet date must fall inside it. Contoso uses calendar-year limits, so a new limit item is created each January and the old one is closed once the last invoice is in. If work continues past the end date, the entry sheet is refused, which is a common January surprise. Plan the renewal with the buyer in December, and include a date-boundary case in testing.

Choose the expected value honestly. If it is set equal to the limit "to be safe," cost center reports show a commitment the budget owner will never spend; if it is set to zero, the budget looks free when it is not. Dan's controllers use the expected value in their monthly forecast.