Internal Orders (Work Orders)

Internal orders are generally used to plan, collect and settle the costs of internal jobs and tasks. Internal orders are used to settle the costs of Work Order jobs and charge the department’s cost center for the work performed. In the future, internal orders may be used for other transactions as well. There are certain steps to be followed for creating internal orders using Purchase reqs.

A line item report will show the amount and the Cost Center charged in the Name field (see first screen below). From a line item report, the drill down process only displays a settlement document (second screen below) that contains the Internal Order reference number.

Download the end user manual on working with Internal orders..

Internal Ordering using an Example

Lets say in an organization there are various events such as trade fairs, training seminars, which occur during the year. Now lets assume for a second that these Trade fairs are organized by the Marketing cost center of the organization. Therefore in this case marketing cost center is responsible for all the trade fairs costs. All these trade fairs costs are posted to the marketing cost centers. Now if the management wants an analysis of the cost incurred for each of the trade fair organized by the marketing cost center how would the marketing manager get this piece of information across to them? The cost center report would not give this piece of info Now this is where Internal Order steps in .If you go through all cost center reports this information is not readily available since all the costs are posted to the cost center.

SAP, therefore provides the facility of using internal orders which comes in real handy in such situations. In the above scenario the controlling department would then need to create an internal order for each of the trade fair organized. The cost incurred for each of the trade fair will be posted to the internal orders during the month. At the month end, these costs which are collected in the internal order will be settled from these orders to the marketing cost center.

Thus the controlling person is now in a position to analyze the cost for each of the trade fair separately. Thus internal order is used to monitor costs for short term events, activities. It helps in providing more information than that is provided on the cost centers. It can be widely used for various purposes .

Here we will show how to create the entire internal order process from:

  • Purchasing Requisition
  • Purchase Order
  • Goods Receipt
  • Invoice Receipt
  • Posting outgoing payments
  • Displaying Line Items
  • Settlement of Internal Orders

Create Purchase Requisition for consumption to a cost center

You will create a purchase requisition to purchase these wagon wheels.

From the SAP Easy Access Screen: Logistics –> Materials management –> Purchasing –> Purchase Requisition –> Create

Enter the following information:

  • Acct assignment cat: F (Order)
  • Delivery Date (Enter a future date)
  • Plant PT_ _
  • Purchasing Group B_ _

Your screen should look like the following after entering the above information:

Click enter

Then enter the following:

  • Material: Wheels_ _
  • Quantity: 20

Click the tab Account Assignment


  • G/L account: 720200 (Trading Good Expense account)
  • Order Internal Order # you created
  • Click enter
  • Save

Record purchase requisition order number, Your screen should look like the following:

Create Purchase Order

From the SAP Easy Access Screen: Logistics –> Materials management –> Purchasing –> Purchase Order –> Create –> Vendor Unknown

Enter the following information:

  • Order Type: NB
  • Purchasing Group: B_ _
  • Select the Copy requisition button
  • Enter your reference purchase requisition number
  • Click enter
  • Click on the green select all button
  • Then click on the Adopt + details button to copy the details from the purchase requisition into your new purchase order
  • Select Assign supply source
  • Click enter
  • Click on green select all button
  • Click the Generate button
  • Click on the INTERN document on the top left of the screen
  • Then click on the adopt button on top left of screen which looks like two pieces of paper
  • Click Save
  • You will get message that no output device was found

Record new purchase order number

Your screen should look like the following:

Create a Goods Receipt

From the SAP Easy Access Screen: Logistics –> Materials management –> Inventory Management –> Goods Movement –> Goods Receipt –> For purchase order Vendor Unknown –> PO number known

Enter the following information:

  • Enter your PO # 4500000_ _ _
  • Click Execute
  • Select Post
  • Save

Record the document number

Create an Invoice Receipt

From the SAP Easy Access Screen: Logistics –> Materials management –> Logistics Invoice Verification –> Document Entry –> Enter Invoice

Enter the following:

  • Document Date Enter today’s date
  • Check your Company Code CC _ _
  • Enter currency USD
  • PO number 4500000_ _
  • Click Enter
  • Enter Amount Of invoice same as Purchase Order
  • Tax code XI
  • Click Enter
  • Click on Simulate button
  • Save

Record document number

Post Outgoing Payment

From the SAP Easy Access Screen: Accounting –> Financial accounting –> Accounts payable –> Document Entry –> Outgoing payment –> Post

Enter the following:

  • Document date: Today
  • Account: 1000_ _ Bank
  • Amount: Amount of order
  • Text: Payment of Invoice # _____
  • Open items selection:
  • Account: Vendor number
  • Select process open items
  • Check that balance is correct
  • Click on the amount in USD gross to assign payment then the bottom of screen should assign payment to invoice

Your screen should look like the following:


Record document number

Display Line Items

From the SAP Easy Access Screen: Accounting –> Controlling –> Internal Orders –> Information system –> Reports for Internal Orders –> Line items –> Orders: Actual Line Items

Enter the following:

  • Order: Enter your internal order number that you created
  • Cost element range 720200 (Trading Goods) to 781000 (Misc. Expense)
  • Posting Date: Keep default values
  • Click Execute
  • Double click on line items shown

Settle Internal Order

From the SAP Easy Access Screen: Accounting –> Controlling –> Internal Orders –> Period-end Closing –> Single Functions –> Settlement –> Individual processing

Enter the following:

  • Order number: Your order number
  • Settlement period: Current period
  • Posting period: Current period
  • Click execute and your screen should look like the following:

Then click the Detail list button, After the order settlement has been executed without any errors hit the back button twice and remove the check from the Test run indicator, Then click execute to run again.

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