A confusion I keep running into: people assume a purchase order does something to the books. It does not. I ran a full procure-to-pay cycle in an S/4HANA sandbox and pulled every document, so here is the actual accounting story with nothing hand-waved.
The purchase requisition and the purchase order post nothing
No FI document. No CO document. They are planning objects — a statement of intent and a commitment to a vendor. If you go looking for their financial effect you will not find one, because there isn't one.
This is worth internalising, because it means the moment money "happens" is later than most people assume.
Goods receipt is the first real posting
Dr 1050 Raw materials 5,000
Cr 9010 GR/IR clearing 5,000
The warehouse now has stock, and the books now carry a liability-shaped placeholder: we have received goods we have not been billed for.
Invoice receipt closes it
Dr 9010 GR/IR clearing 5,000
Cr 2100 Vendor (AP) 5,000
The placeholder is replaced by a real payable.
GR/IR is the referee
The GR/IR account exists to hold the disagreement between two departments who measure different things. The warehouse says "we received goods worth X." Accounting says "we were billed for Y."
When GR/IR does not clear to zero, one of the two is wrong, and the account tells you which direction. That is the three-way match — purchase order, goods receipt, invoice — expressed as a single balance you can look at.
The consequence people miss
The entire purchasing cycle has zero P&L impact.
Nothing hits expense. Inventory goes up, a liability goes up, the balance sheet gets longer, and the income statement does not move. Cost appears later — when the material is consumed into a production order, or when the finished goods are sold.
If your P&L moves when you buy things, something is misconfigured. The usual culprit is an account assignment category sending the receipt straight to a cost center instead of to stock.
Why this matters beyond bookkeeping
Once you see procurement as "balance sheet only," a lot of downstream confusion resolves itself. The month where you buy heavily is not automatically a bad month. The cost shows up when the value is actually consumed, which is exactly what you want if you are trying to read a margin.
This is from a dumpling factory I built from scratch in S/4HANA to document a full month end-to-end, every document number verified. There is a free 16-page sample of the write-up.
