Every company has vendors for supplies and services. Consider Samsung’s television department. For the remote control devices, Samsung needs AAA batteries. Either Samsung manufactures them or ask a vendor to provide the batteries. Assume Samsung Purchasing department follows the latter option. Purchase Orders (PO) are created to request the vendor for the batteries. Usually the output of the PO is sent in form of Email or Idoc.

In general practice, a PO is preceded by PR – Purchase requisition. PR is a document that tells the Samsung Purchasing department that a particular team within Samsung needs batteries. They make an assessment of the PR and when it is good to go, they create a PO based on the PR. Hence, PR is an internal document while PO is an external document. Note that in some cases PO might be internal to company but legally is treated as an external document.

Vendor is one of the most commonly changed parameter. Sometimes after a PO is created, it is changed to accommodate another vendor. In such cases after the PO the output is regenerated. This is also done if the PO is changed for any other reason like add/change/removal of a line. These changes are only possible only if the delivery has not been made.

PO can be created by TCode ME21N when the vendor is known. However, when the vendor is unknown transaction ME25N can be used.