standard procedure for posting procurement transactions in Financial Accounting

The three-step reconciliation is the standard procedure for posting procurement
transactions in Financial Accounting. The procedure involves the following three
steps:
• Purchase order
This is carried out exclusively in MM. No data is posted in Financial
Accounting.
• Goods receipt
To update the inventory, a material document is created in MM. At the same
time, a document is created in FI, which is used to post the value of the
goods to the material stock account or the consumption account (debit) and
to the goods receipt/invoice receipt account (credit).
• Invoice receipt
The vendor invoice is posted in MM and a document is created in FI at the
same time. This FI document contains the invoice amount that is posted to
the goods receipt/invoice receipt account (debit) and to the vendor account
(credit).
The last two steps can be completed in reverse order, depending on the order in
which the goods and the invoice are received.
The goods receipt/invoice receipt account ensures that goods were received for
each invoice and vice versa.