Very basics of SAP External Service Management

These notes are based on SAP ERP Central Component (ECC) 5.0

Firstly -- SAP External Service Management (ESM) must not be confused with SAP Service Management (SM). ESM is the procurement of services. SM is to provide services to a client. With External Services, you have a PO for services with Goods Receipt taking place. The Goods Receipt is called Service Entries. In contrast with goods (stock or non stock) where receiving is typically done by the inventory management group, the Service Entries are done by business themselves. The logic is that the business generated the request for the service, that is where it was done, it will be best if they do confirmation that service took place.

Lets look at the traditional SAP purchasing cycle vs SAP purchasing cycle for External Services.

Traditional SAP Purchasing Cycle
RFQ(optional) -> PR -> PO -> Good Receipt -> Invoice

SAP purchasing cycle for External Services
PR (optional) -> PO (itemCat:D) -> Service Entry Sheet + Accept SES -> Invoice

The big difference is that the item category is D (services) is used. For the item, detail Service to be performed can be specified. The receiving is a 2 step process. Create and then Accept Service Entry SheetLets step through the process and look at the documents. The steps are
Step 1 - Create Purchase RequisitionStep
2 - Convert to Purchase OrderStep
3a - Service Entry Sheet Step
3b - Acceptance of Service Entry SheetStep
4 - Invoice and payment