SAP Service Procurement Guide

SAP Service Procurement Guide

Complete process overview, key concepts, and implementation guidelines

What is Service Procurement in SAP?

Service Procurement in SAP is the process of buying services from external vendors. Unlike material procurement, services are directly consumed rather than stored in inventory. Examples include:

Maintenance Services

Machine repairs, facility maintenance, equipment servicing

Professional Services

Consulting, training, IT support, legal services

Operational Services

Cleaning, security, catering, transport

Construction Services

Building services, painting, renovations

Key Difference from Material Procurement: Services are consumed directly rather than being stored as inventory. They are generally assigned directly to cost objects (cost centers, projects, etc.).

Service Procurement Methods in SAP

There are multiple ways to procure services in SAP systems:

1 Text Item Purchase

The simplest approach where services are described as text in a purchase order, without creating a service master.

  • Create a regular purchase order with item category D (Service)
  • Describe the service as text
  • Standard PO process followed by invoice posting

Best for: One-time services or when detailed tracking by service code is not required.

2 Material for Service

Creating a material master record with material type that represents a service.

  • Create a material master (similar to materials)
  • Use account assignment to directly assign costs
  • Follow the standard PO process with goods receipt and invoice

Best for: When you want to leverage your existing material processes for services.

3 External Service Procurement Most Common

Comprehensive approach using service master records and service entry sheets.

  • Create service masters (AC03) for standard services
  • Create PO with services and limits
  • Document service performance via Service Entry Sheets (ML81N)
  • Accept service entry sheet (automated goods receipt)
  • Process invoice against service entry sheet

Best for: Complex services where detailed tracking, documentation and approval of actual service performance is required.

4 Lean Service Procurement S/4HANA Only

New approach in S/4HANA combining aspects of the other methods.

  • Create PO with or without material (material type SERV)
  • Create service entry sheet
  • Approval process
  • Invoice posting

Note: This process is only supported through SAP Fiori and not available in classic SAP GUI.

Service Procurement with Service Master

Service procurement with a Service Master provides better tracking and reporting capabilities. The service master contains standard information about commonly procured services.

AC03

Maintain Service Master

Create, change, or display service master records

Service Master Creation Process

  1. Create service master with transaction AC03
  2. Enter service description (e.g., "Painting Service")
  3. Assign service category (e.g., SCV for purchasing)
  4. Define base unit of measure (e.g., Hour, Square Foot)
  5. Assign service group and valuation class
  6. Save service master to receive an activity number

Best Practice: Create service masters for frequently used standard services to enable better reporting and analysis.

Service Master AC03 Purchase Order ME21N (Item Cat. D) Service Entry Sheet ML81N Accept Service Entry Sheet ML81N Invoice MIRO Payment F-53/F-58 Purchase Requisition ME51N (Optional) Accounting Document Standard Process Verification Process Financial Process Accounting Impact

Process Flow with Service Master

Create Service Master

AC03

Define standard services with details like unit of measure, valuation class, and service group.

Create Purchase Requisition (Optional)

ME51N

Create PR with item category D and reference the service master. Assign to cost center or other cost object.

Create Purchase Order

ME21N

Create PO with item category D. Specify services and limits. Account assignment to cost center or project.

Create Service Entry Sheet

ML81N

Document actual services performed. Can create multiple sheets against one PO as services are delivered.

Accept Service Entry Sheet

ML81N

Approve the service sheet. This creates accounting entries (similar to goods receipt).

Invoice Verification

MIRO

Process vendor invoice with reference to service entry sheet.

Payment

F-53/F-58

Process payment to vendor.

Key Configuration Points

Service Master Configuration

Configure service categories and account reference settings:

  1. SPRO → Materials Management → External Service Management → Service Master
  2. Define service categories (e.g., SCV for purchasing services)
  3. Link service categories to account reference classes
  4. Assign number ranges for service masters
Service Entry Sheet Configuration

Configure number ranges and screen layouts for service entry sheets:

  1. SPRO → Materials Management → External Service Management → Service Entry Sheet
  2. Define number ranges for service entry sheets
  3. Configure field selection and screen layouts
Account Determination

Configure accounting settings for service procurement:

  1. SPRO → Materials Management → Valuation and Account Assignment
  2. Define valuation classes for services
  3. Configure account determination (transaction OBYC)
  4. Assign G/L accounts to valuation classes

When a service entry sheet is accepted, the system debits the expense account and credits the GR/IR clearing account.

Service Procurement without Service Master

Service procurement without Service Master is useful for one-time or unique services where maintaining master data is not practical.

Important: When procuring services without a service master, you need additional configuration to enable automatic account determination.

Key Steps

  1. Create a purchase order with item category D (Service)
  2. Enter service description as text
  3. Specify material group/service group
  4. Define unit of measure manually
  5. Assign to cost center or other cost object

For Automatic G/L Account Determination: Assign valuation classes to material groups in configuration.

Required Configuration

To enable automatic G/L account determination without service master:

SPRO

Configure Material Group to Valuation Class Assignment

Materials Management → Purchasing → Material Master → Entries with Items without Material Master

Purchase Order ME21N (Item Cat. D) Service Entry Sheet ML81N Accept Service Entry Sheet ML81N Invoice MIRO Payment F-53/F-58 Purchase Requisition ME51N (Optional) Material Group to Valuation Class Assignment in Configuration

Process Differences

Process Step With Service Master Without Service Master
Service Description Retrieved from service master Entered manually as text
Unit of Measure Retrieved from service master Entered manually
G/L Account Determination Via valuation class in service master Via valuation class assigned to material group
Service Entry Sheet Same process Same process
Reporting Better reporting by service code Limited reporting capabilities

Best Practice: Use procurement without service master for one-time or unique services only. For frequently used services, create service masters for better tracking and reporting.

Service Entry Sheet Details

The Service Entry Sheet (SES) is a key document in service procurement and functions similar to a Goods Receipt in material procurement.

Purpose of Service Entry Sheet

  • Document actual services performed
  • Record quantities of service delivered
  • Basis for invoice verification
  • Trigger accounting postings

Features

  • Partial service entry sheets supported
  • Multiple sheets against one PO
  • "Final Entry" indicator for closing services
  • Integration with workflow for approval

Service Entry Sheet Process

  1. Create Service Entry Sheet (ML81N): Reference PO, specify quantities of service performed
  2. Accept Service Entry Sheet: This creates accounting entries
    • Debit: Expense account (from configuration)
    • Credit: GR/IR clearing account
  3. Invoice Verification (MIRO): Reference service entry sheet
Partial Service Entry Sheets

You can create multiple service entry sheets against one PO as services are delivered in parts:

  1. Create first SES with partial quantity (e.g., 600 sq ft out of 2,000 sq ft)
  2. Accept and save this partial service entry sheet
  3. Later, create another SES for the same PO with additional quantities
  4. Continue until all services are delivered or use "Set Final Entry" to close further entries
Set Final Entry Indicator

The "Set Final Entry" option closes a service for further entries:

  • When selected, no further service entry sheets can be created for that line item
  • Useful when service is complete even if full PO quantity is not consumed
  • Similar to "Delivery Completed" indicator in material procurement
  • Can be reversed by using "Reset Final Entry" if needed
Revoking Service Entry Sheet Acceptance

If needed, you can revoke acceptance of a service entry sheet:

  1. Display the service entry sheet (ML81N)
  2. Click on "Edit" and select "Revoke Acceptance"
  3. Specify a reason for revocation
  4. System will reverse accounting entries
  5. You can then make changes and accept again

Key Transaction Codes

AC03

Maintain Service Master

Create, change, or display service master records

ME51N

Create Purchase Requisition

Create service PR with item category D

ME21N

Create Purchase Order

Create service PO with item category D

ML81N

Service Entry Sheet

Create, change, display service entry sheets

MIRO

Enter Incoming Invoice

Process vendor invoices for services

OBYC

Account Determination

Configure automatic account determination

Best Practices for Service Procurement

When to Use Service Masters

  • For frequently used standard services
  • When detailed reporting by service type is needed
  • For complex services with multiple sub-services
  • When service conditions and pricing need to be standardized

Account Determination

  • Configure automatic G/L account determination
  • Assign appropriate valuation classes
  • For services without master, link material groups to valuation classes
  • Avoid manual G/L account entry to prevent errors

Service Entry Sheet Management

  • Create SES as services are delivered (e.g., weekly, monthly)
  • Use partial service entry sheets for ongoing services
  • Apply "Set Final Entry" when service is complete
  • Consider implementing workflow for SES approval

Planning and Limits

  • Use planned and unplanned services appropriately
  • Set limits for unplanned services
  • Define tolerance limits for over-delivery
  • Align invoice tolerance settings with service tolerance settings

Pro Tip: For recurring services (e.g., security, cleaning), consider using framework agreements (contracts) to lock in prices for longer periods and simplify the ordering process.

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