SAP Import Procurement Process Flow

Prepared by Harshvrdhan Rathore

Buying material from an overseas vendor — from the requirement and import purchase order, through shipment and customs clearance, to goods receipt at landed cost, invoice verification and foreign payment. Solid boxes are the main flow (number = sequence); dashed boxes are setup, supporting or automatic SAP steps. Hover over a box to see details.

Foreign vendorImport PO (foreign currency)→ Shipment→ Bill of Entry & customs duty→ GRN at landed cost→ Invoices→ Foreign payment

Main process step (number = order) Supporting / master data activity Document flow Input / support

Department-wise role

Step-by-step flow

#	Department	Activity	What happens	Output

Key import concepts

IncotermsDecide who pays freight and insurance and where risk passes — for example FOB (buyer arranges freight) or CIF (seller pays freight and insurance to the port).

Planned delivery costsFreight, insurance, customs duty and CHA charges are entered in the import PO as conditions, each with its own vendor, so every invoice links to one PO.

Customs duty in IndiaBasic customs duty and surcharge add to stock cost. IGST on import is paid at customs but claimed back as input tax credit.

Bill of EntryThe customs declaration filed by the CHA. Its assessed value and duty are the basis for the duty payment and the IGST credit.

Landed costTotal cost of the material at the plant: price converted at the exchange rate plus duty, freight, insurance and clearing charges.

Exchange rate differencesThe rate at goods receipt, invoice and payment can differ; SAP posts the differences to stock or to exchange gain or loss accounts.

Note: some companies post customs duty on a separate PO for the customs authority instead of as a PO condition. Gate entry is usually a custom development. Codes and settings vary by client configuration.