SAP SD - Outline Agreements

The vendor selection is an important process in the procurement cycle. Vendors can be selected by a quotation process. Once these vendors are shortlisted by an organization. They enter into an agreement with a certain vendor to supply specific items with certain conditions. This happens when an agreement is reached or a formal contract is signed with the vendor. So, this outline agreement is a long term purchasing agreement with the vendor. The key points about an outline agreement are as follows −

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

  • These outline agreements are valid up to a certain period of time and cover a certain predefined quantity or value.

An Outline agreement is of two types, which includes − Contract and a Scheduling Agreement.

Contract Agreement

A Contract is basically a long term outline agreement between the vendor and the ordering party. It is made on predefined material or services to be given over a certain framework of time.

There are two types of contract −

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

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

A Contract can be created by following the steps shown below −

Path to Create Contract

Logistics → Materials Management → Purchasing → Outline Agreement → Contract → Create.

T-code: ME31K

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

Sap Easy Access

Then, provide the name of vendor, type of contract, purchasing organization, purchasing group and plant along with the agreement date.

Create Contract

Fill in all the necessary details like agreement validity start date, end date, and pay terms (i.e. terms of payment).

Header Data

Then provide the material number along with target quantity. If the quantity contract or net price of value contract and material group. Click save. A new Contract will be created.

Material Number

Scheduling Agreement

A Scheduling Agreement is a long term outline agreement between the vendor and the ordering party. This is done over a predefined material or service, which are procured on predetermined dates over an already agreed framework of time. A Scheduling agreement can be created by the following two steps −

  • Creating scheduling agreement
  • Maintain scheduling lines for the agreement

Creating a Scheduling Agreement

This can be created by following the steps shown below.

The path to create a Scheduling Agreement − Logistics → Materials Management → Purchasing → Outline Agreement → Scheduling Agreement → Create → Vendor Known.

T-code: ME31L

On the SAP Menu screen, select Create execute icon by following the above step.

Execute Icon

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

Scheduling Agreement

Fill in all the necessary details like agreement validity start date, end date, payment terms.

Scheduling Agreement Header Data

Provide material number along with target quantity, net price, currency and material group. Click save. A new Scheduling Agreement will be created.

Material number and Target Quantity

Maintain scheduling lines for the agreement

These schedule lines can be maintained for scheduling agreement by following these steps −

Path to maintain Schedule Lines − Logistics → Materials Management → Purchasing → Outline Agreement → Scheduling Agreement → Delivery Schedule → Maintain.

On a SAP Menu screen, select Maintain execute icon by following the above step.

Maintain and Execute Icon

Provide a Scheduling Agreement number. Select line item. Go to the Item tab at the top → Select Delivery schedule.

Line Item

Provide a delivery schedule date and target quantity. Click save. The schedule lines are now maintained for the scheduling agreement.

Delivery Schedule
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