INTEGRATION

Organization structure :

FI: Business area

Company

Company code

MM:-  Structure SD: Structure

Business area  | Factory / Sales organization Company code
level /

| Plants Branch/Port | Regional location

Storage locations Raw material / Finished goods Distribution-> Direct sales through

/Packing material Channel Agents

Division Product groups/ products

Why we create port as a plant:

Keep the material on ship

HYD Chennai Customer

Factory Port

Export sale – Terms of delivery-FOB (Free on Board) ownership will be transferred once
we kept the martial on ship.

Business area will be assigned to plants, plants will be assigned to sales organization
business area will be assigned to sales organizations.

In SD module, combination of sales organization, distribution channel and division –One

sales area.

Sales Area 1 Sales Area 2

Hyd sales Org. Hyd Sales org

| |

Direct sales Through agents

| |
 Steel Steel

Transaction key /process key

a) BSX Inventory postings

b) WRX Goods receipt /Invoice receipt (GR/IR)

c) PRD Price difference /Production order differences

d) GBB Offsetting entry for inventory postings

(i) VBR consumption

(ii) VNG Scrapping

(iii) BSA Opening stocks

(iv) ZOF Production receipt without production order

(v) AUF Production receipt with production order

(vi) VAY Delivery where sales account is created as revenue element (CO implemented)

(vii) VAX Delivery where sales account is not created as revenue element (Co not
implemented)

(viii) AUA production order differences

Eg: 400000 Raw material consumption

200121 Inventory raw material

For consumption

Raw material consumption Dr

To Inventory raw material

For GBB VBR Assign account no.400000

For BSX Assign account no.200121

Valuation class:

Valuation class determines the GL accounts to be posted automatically.

A) Raw materials Local

Imported
 Inter unit purchases

Inter company purchases 4

Valuation class

B) Stores :Local 2 valuation class

C) Finished goods own manufacturing 1 valuation class

Valuation grouping code / valuation modifier /Valuation modification key:

Company codes BIL BCL BSL

Chart of accounts BIL

Plants HYD-BGL BGL-MUM HYD-MUM

Local raw materials RM1 RM2 RM3-RM1 RM2-RM3

Incase of purchases, 200121 –Inventory raw material local

When we follow same chart of accounts for numbers of company codes, Instead of
assigning accounts number of times, assign only one time by using valuation grouping
code.

Valuation Chat of accounts Company code Valuation

Areas Plants Grouping

HYD BIL BIL X

BGL BIL BIL X

BGL BIL BCL X

MUM BIL BCL X

HYD BIL BSL X

MUM BIL BSL X

For X in case of RM local purchases assign account number 200121, inventory Raw
material local.

This is similar to posting periods in FI

A) Define posting period variant X

B) Assign posting period variant to company codes X to BIL

X to BCL

X to BSL

c) Define posting periods for variant X

for X—1, 2008 –12,2008

Material types Price controls

Raw materials ROH V-Moving average price purchase price

Stores & spares ERSA V-Moving average price purchase price

Packing & material VERP V-Moving average price purchase price

Finishing goods FERT S-Standard price Raw materials +

Semi finished goods HALB Overheads

Purchased V-Moving average price Purchase price

Produced S-Standard price Raw material+Overheads

Trading goods HAWA V-Moving average price Purchase price

Services DIEN

Semi finished goods purchased

Dept A Dept B Dept C Dept D

15 days FG

Sales order –To be delivered with in 2 days

Purchase an item where with

In 2 days purchase an item

Where processing of A,B and C is completed

D processing of D

Semi finished goods produced

Dept A Dept B Dept C Dept D

Issue RM 15 days time

Sales Dept –got an order for sale where the processing of A and B is completed

Take production

After completion

Of B and sell

Trading goods: Purchase FG and sell FG without doing any processing.

Services: Plant is having operating capacity

No sales orders

Job work for others

We get job work changes –Material

Does not belong to us

- Material types are similar to account groups in FI

- There we create GL masters here we create material masters.
- GL master are created under account group where as material masters are
created under material type.
- Material master is created at plant level-when number of plants are using
the same material it will be extended(copied) to other plants.
- For materials we can open 2 periods at a time.

Oct Nov.

When we open Dec.-Automatically Oct will be closed.

Where we crate material master –We will have number of tabs (Views)

Basic data

Purchase view

Sales view

MRP view

Quality

Ware house management

Accounting
Costing

SD steps

L) Delivery –At product cost

INC /DEC in stocks FG DR 120 P & L Credit

GBB VAX –If sales account is not created as revenue element (Co not implemented
/GBB VAY –If sales account is created as revenue element (Co Implemented)

To Inventory FG 120 BS C/A

M) Sales billing

Customer A/c DR 150 BS C/A From sales order, customer number will be
taken

To Sales 150 P & L credit ERL

LCL=Local

Inventory FG=Raw material consumption local +wages

GR=Goods receipt

INC/DEC STK FG=Increase /Decrease stock finished goods

P & L account

H) RM can local 100 L)Sales 150

Wages 20 J)INC/DEC STKFG 120

Net profit 30 K)INC DEC STK FG -120 0

 ------- -----

150 150

=== ===

Balance Sheet

Surplus in P & L Account 30 F) INV RM LCL 100

F) GR/IR CLG RM LCL 100 H) INV RM LCL -100

A) GR/IR CLRG RM LCL -100 0 ---------

a) Sundry creditors RM 100 I) Bank -20

j) INV FG 120

K)INV FG -120 0

L)Sundry debtors 150

---- --------

130 130

=== ===

Integration rules

A) In material master we specify valuation class

B) For valuation class we assign GL accounts based on the nature of transaction
C) At the time of material receipt/Issue stores person enters movement type, material
number and quantity. Our accounts will be up dated automatically based on
accounts assignment to valuation class which is specified in material master

Eg: Material no. Valuation Inventory postings GR/IR Consumption

BSX Clearing (GBB VBR)

 (WRX)

RM1 (local) 3000 RM local 200121-INV-RM 100520-GR/IR 40000-RM

Local CLRG RM LOCAL Consumption-

IMP

Local Raw Material

1. Purchase order Material –RM1

Vendor -1234

Qty-100 Kgs

Rate 5 Rs Save P.O.No.1

2. Goods receipt with reference to P.O-P.O No.1

Movement Type:101 Debit BSX 200121

Credit WRX

Material RM1

Qty 60 kgs

Save

Material Doc no.200001

200121 –Inventory RM local DR 300

100520 GR/IR CLR RM Local 300

(Qty IN GR *Rate as per P.O)

60*5

Raw material consumption

Movement type 201 Debit GBB VBR Debit A/c No. 400000

Credit BSX 200121

Material RM1 3000

Qty 10 Kgs

400000 RM Consumption LCL DR 50

200121 Inventory RM Local 50

(Qty issued * Moving average rate)

Imported raw material

1. Purchase order Material -RM2

Vendor -4567

Qty-1Kg

Rate -100 PO No.2

1. Goods receipt- with reference to PO-PO No.2

Movement type:101 Debit BSX 200122

Credit WRX 100521

Martial RM2 3001

Qty 1 Kg

Save Material Doc No.200003

200122- Inventory RM IMP DR 100

100521 GR/IR CLRG RM IMP 100

(Qty IN GR* Bate as per P.O)

1*100

Raw material returns

Material doc no.200003

Movement Type 102 Debit WRX 100521

Credit BSX 100122

Material RM2 3001

Qty 1 Kg

Save Material doc no.200004

100521 GR/IR CLR RM IMP DR 100

200122 Inventory RM IMP 100

Why SAP does not support purchase accounting why it supports inventory
accounting:

RM –Local raw material 1 2 3

Not included in purchase Bill received Less stock reported

Provision statement by stores

RM consumption=Qty Value

Opening stock 0 0 0 0

Add purchase 0 516.50 516.50

_____________________________

516.50 516.50

Less :Closing stock 300 300 200

------------------------------------------

Raw material consumption X X X

========================

Wrong wrong wrong

1. Purchase order material no. RM1

 Vendor 1234

Qty 100 Kgs

Rate 5 Rs

Excise 10%

CST 2%

Other change 1%

Material receipt:

We get excise invoice to claim cenvat –Final invoice many come or may not come.

Only excise invoice received

Basic price 500

Excise 50

Stores person updates his records with the above data.

Issue: Not included in purchase provision statement:

Account Dep gets a statement from stores in the month end material received bills not
received to make purchase provision.

Stores person –By mistake he has not included the above item in the purchase provision
statement.

Account Dept.gets closing stock statement from stores-in the statement he is showing 60
kgs stock at 5Rs.300

Issue2 –Closing stock valuation wrong

We have received invoice after words in invoice

wrong

Basic 500 500

Excise 50 50

CST2% 11 11

Other 1% 5.5 5.5

------- -------- ---

Bill amount 566.50 516.50 50

Purchase a/c cenvat receivable

In the month end stores person sends closing stock statement

60 kgs at Rs.5

Should be value 516.5/100*60=309

*Issue less stock reported by stores

If this month production is more, profitability will be more.

If this month production is less, profitability will be less.

Physical stock available -60 Kgs

Reporting to accounts only 40 kgs

40*5=200

Inventory accounting

1. Purchase order Material no.RM1

Vendor 1234

Qty 100

Rate 5

Tax code A1 (10% Excise +2% CST) other charges 1%

PO no.1
2. Goods receipt with reference to PO no.1

Movement type 101

Material RM1

Qty 100

Save

Entry will be passed automatically

Inventory RM local DR 516.50

To GR/IR CLR RM Local 516.50 Qty in

GR*Rate as per PO

Store records : Material RM1

Qty :Value

Receipt :100 Kgs 516.50

Account records 200121 Inventory RM local

516.50 DR

3. Raw material consumption

Movement type 201

Material RM1

Qty 40 Kgs

Save

Accounting entry will be generated automatically RM consumption local DR

206.5 (516.5) 100*40

To Inventory RM local 206.6

Qty issued moving .AVG price

Stores records: Material RM1

Qty Value

Receipt 100 Kgs 516.50

Issue 40 Kgs 206.6

------ ------

60 Kgs 309.9

Accounts records 200121 Inventory RM local

516.50 DR 206.60 DR

CL stock value 309.9

Sales and Distribution Flow:

1. Inquiry and quotation:

2. Sales order : Product, Plant, Sales organization, customer no., quantity, rate
delivery

terms, payment terms.

3. Delivery :With reference to sales order

A) Delivery without post goods issue (Delivery without PGI) ownership is not
transferred.

Eg. Export sales –Terms of delivery –FOB (Free on board)

 Hyderabad Factory Chennai Port Customer

Delivery without PGI Delivery with PGI

No FI document only FI document material

material document document

FI document :At product cost

Increase /Decrease in stocks FG DR GBB VAY-If sales account is created as revenue

element (Co implemented)1

GBB VAX if sales account is not created as revenue element (Co not implemented)

To inventory FG BSX

B) Delivery with Post Goods Issue (Delivery with PGI)

Eg. Local sales terms of delivery –Ex works

Hyderabad factory Customer

Delivery with PGI

Sales Billing: With reference to delivery

Customer account DR From sales order

To Sales :ERL

SD-Pricing procedure
Eg: 1 2 3 4

From R egion Andhra Andhra Andhra Andhra

To Region Andhra Tamilnadu Andhra Tamilnadu

Customer Taxable Taxable Non-taxable Non-taxable

Material Taxable Taxable Non-taxable Non-taxable

Basic price

Excise % on basic

VAT % on Basic+Excise CST % on basic+ Excise

From H sales

Condition type: KOFI (Account assignment-FI)

KOFK (Account Assignment –CO)

Assignment of accounts

1 2 3 4 5 6 7 8
Application Conditi Chat Sales Account Account Accou
area on type of originatio assignment assignment nt keys
accoun n group for group for
ts customers materials
V-Sales & KOFI BIL HYD 01 03 ERL 300001 –
Distribution Sales Local
own goods
V-Sales & KOFI BIL HYD 02 03 ERL 300002-
Distribution Sales
exports own
goods
 V-Sales & KOFI BIL HYD 01 01 ERF 300003
Distribution Sales local
trading
goods
V-Sales & KOFI BIL HYD 01 03 ERL 400350 –
Distribution Sales Freight
revenu Local own
e goods
01- 01 Traded ERF
Domestic goods Freight
revenues Reven
ues
02-Foreign 02 Services ERB-
revenues Rebate
s
/Tradi
ng
Discou
nts
03- 03 ERS
Afflicated Finished Sales
company goods Deduct
revenues ions

Note :ERS :Sales commission

Bank 5000 From customer 5000

Reimbursement of expenses

MM CUSTOMIZATION

MM consultant job

1.Define Plants

Path: SPRO-Enterprise structure- Definition –Logistic general-Define copy, delete

check plant.

Double click on define plant

Select new entries button

Plant :BAN1

Name :BAN Factory plant

Factory calendar : 01 (Standard calendar) Save

Give the name :Banagalore factory plant

Country :IN Enter & Save

Q.What is Plant?

A Place where material are produced goods , Services are provided.

2.Define division:

Path :Up to logistic –General the path is same-Define copy, Delete, check division.

Double click on define division

Select new entries button

Division :BS (It is a text filed)

Name :Steel Division Save

Q. What is division?

It is one of the Organizational unit in sales Distribution in SD Module.

3.Maintain storage location

It is a place where stock is physically kept within the plant.

Path :SPRO-Enterprise structure –Definition- materials management –Maintain

storage location (OX09)

Give the plant :BAN1 Enter

Select new entries button

Give the storage location :MAR

Description :Marathahalli storage location Save

4.Maintain purchasing organization

It is a place which is Reasonable for all purchasing Activity in the Organization.

 Select new entries button

Purchase organization :POBA

Description : Purchase organization Bangalore Save

5.Assign plant to company code:

Path : SPRO-Enterprise structure –Assignment- logistics General –Assign plant to

company code (OX18)

Select new entries button

Company code :IBMR

Plant :BAN1 Save

Q. Can one Co.Code be Assigned to more than one plant ?

YES

Note:1.One plant can't be Organized to more than one Co.Code.

2.In this Activity we assigned Material Master Organization unit with FI Organization
Unit.

6.Assign business area to plant/valuation area and division

Path :Same path -Select plant /valuation area –Division button

Select new entries button

Plant :BAN1

Division :BS

Business area :BAN Save

7.Assign purchasing organization to company code

Path :Up to assignment the path is same –Materials management –Assign

purchasing organization to company code

For POBA for assign company code IBMR Save

Note:One Co.Code can be Assigned to Multiple Purchase Org.. However One PO can be
Assigned Only one Co.Code [where it is Co.Code] Specific purchasing However one
purchasing Organization can procure material for more than one Co.Code via the plant
Assigned to Co.code.
8.Assign purchasing organization to plant:

Same path

Select new entries button

Purchasing org :POBA

Plant :BAN1 Save

9.Create purchasing groups

Path :SPRO-Materials management –Purchasing –Create purchasing groups.

Select new entries button

Purchasing group :PG

Description :Purchasing group for IBMR Save

Note: It is a key for a buyer of Group of Buyers which is responsible for purchasing
activity. Later Assign this key in Material Master Record and in Purchase Order.

10.Define material groups:( OMSF)

It is a key for grouping of material & Services According to the Characteristics/Attributes

[Nature of the material].Later we assign this key in material master record and in
Purchase Organization.

Ex: Electrical, Beverages, Cosmetics…etc

Path :SPRO-Logistic general –Material master-Settings for key fields –Define

Material groups.

Select new entries button

Material group :BILC

Material groups description :Chemicals Save

11.Maintain company code for material management:

Path :SPRO-Logistic General –Material master-Basic settings-Maintain company

code for materials management

Select position button

Give the comp code :BIL Enter

Year :2008
Period :7 (October)

Note : This period enter carefully, if you once enter not modified

Select ABP check box (ABP stands for Allow Back Period Posting)

Note: September entries allowed Save

12.Define attributes of material types:

It is nothing but Similar to Account Group Which are used to create the Material Master
Records.

Path:up to the material master the path is same – Basic settings –Material type-
Define attributes of material types.

Select position button

Select material type :ROH (Raw materials) Enter

Select ROH

Double click on quantity / Value updating folder

Select position button

Valuation area :VARM ( Nothing but plant) Enter

For VARM select quantity updating, value update check box Save

Select back arrow

Select material FERT for finished product

Double click quantity / value updating folder

Select position button

Valuation area :VCFG Enter

For VCFG select quantity updating check box value updating check box Save

13.Set tolerance limits for price variance for purchase order

While processing the goods receipt system check the price of purchase order item with
the valuation price stored in materials master records. In case if there is any difference are
there the variances are within the tolerance limit specified.

Path: SPRO-Material management –Purchasing –Purchase order –set tolerance

limits for price variance
Select TIKY :PE & SE for company code 1000

Select copy as button

Enter the company code to IBMR

For tolerance key :PE Enter

Change the company code to :IBMR

For tolerance key :SE Enter and save

14.Plant parameters:

Path :SPRO-Materials management –Inventories management –Physical inventory

–Plant parameters

Select plant :1000

Select copy as button

Change the plant to BAN1 Enter and save

15.Set tolerance limits for goods receipt

While processing the goods receipts system check each item to get on whether the goods
receipts varies from the purchase order or the material master record [System check
Quantity material value whatever is order is there].

Path :Up to inventory management and physical inventory the path is same -Goods
receipt-Set tolerance limits

Select tolerance key B1,B2,VP for company code 1000

Select copy as button

Change the company code to IBMR for B1 Enter

Change the company code IBMR for B2 Enter

Change the company code to IBMR for VP Enter and save

16.Maintain default values for tax codes

Path: SPRO- Materials management –Logistics invoice verification-Incoming

invoice maintain default values for tax codes

Select new entries button

Company code :IBMR Save

17.Set tolerance limits for invoice verification

While processing the invoice verification the system check for variances between invoice
and the PO and goods receipt the different types of variances are defined in Tolerance
keys.

Path:Up to logistics invoice verification the path is same – Invoice block-Set

tolerance limits

select tolerance key BD, ST for company code 1000

select copy as button

change the company code to BIL for BD Enter

change the company code to BIL for ST Save

18.Define automatic status change

Path :Up to the logistic invoice verification the path is same – Invoice verification in
back ground –Define automatic status change

Select new entries button

Company code :IBMR Save

19.Group together valuation areas:

Path :SPRO-Material management –Valuation and account assignment-Account

determination-Account determination without wizard-Group togather valuation
areas.

Select position button

Valuation :VARM Enter

Give the valuation grouping code :X Save

Q. What is valuation modifier or Area?

It's a key for group of valuation areas, which is used to maintain GL A/c determination
for inventory posting. In other words, we can called as Valuation Grouping code.

20.Define valuation classes:

Path :Same path – Select valuation class button

Select valuation class 3000 Raw materials local

Select valuation class 7920 Finished products

Select copy as button

Change valuation class 3000 to BIL1

Change the description to Raw materials local

Change valuation class 7920 to BIL2 – Finished product Enter and save

Q. What is valuation Class?

It is used to maintain GL A/c determination for automatic posting between FI-MM

integration. The valuation class , Later is assigned in MM records.

Every Material we have valuation class field valuation class could be finished goods,
semi finished goods and Raw material ..etc. Combination of valuation class+ The moment
types determine the GL A/c.

MM Flow (P2P CYCLE)

A) Material requisition By production Dept to Stores

B) Purchases requisition By stores to purchase Dept

C) Call for enquiries, Get quotations and do price comparisons By purchase Dept.

D) Create purchase order Vendor number, Material

Quantity, Rate, Plant, Company code

Delivery terms, payment terms,

Purchase organization

E) Release It is optional

It will work through work flow

If P.O value is less than Rs.10000 To be released by manager purchases

If P.O value is Rs.10000 and above To be released by GM(Purchases)

And less than 100000 if P.O value is

10000 and above To be released by Director

Once we save the purchase order, based on the value it goes to the inbox of the command
authorized person, till is releases we can’t take goods receipt.

F) Goods receipt –With reference to P.O

Inventory RM local DR 100

To GR/IR clearing RM local 100

Balance sheet current asset BSX

Balance sheet current liability WRX

(Qty in GR*Rate as per P.O)

G) Invoice verification-Against PO/GR

GR/IR clearing RM local DR 100 Balance sheet CL WRX

To party 100 Balance sheet CL From PO,

Party no. will be taken

H)Raw material consumption

RM Consumption Local DR 100 P & L Debit GBB VBR

To inventory RM local 100 BS C/A(Current Asset) BSX

I) Wages payment

Wages A/c DR 20 P & L Debit

To Bank 20 BS CA

J) Production Receipt At product cost

Inventory FG DR 120 BS C/A BSX(FG =Finished goods)

To INC/DEC in stocks FG 120 P & L Credit GBB

ZOF – In case of on production order /CPP module not implement GBB AUF –in case of
production order (PP module implemented)

FI-MM CUSTOMIZATION

1.Creation of GL masters FS00

Inventory RM local B/S: ASSET, Only Local, *(Without Tax

Inventory finished goods
GR/IR clearing RM local
Allowed), Open item ,Line item, 001,G006
B/S: ASSET, Only Local , *(Without Tax
Allowed), Open item ,Line item, 001,G001
B/S: LIA, Only Local ,Open item ,Line item,
014,Post Automatically,G045
 RM consumption local P/L: EXP, Only Local , Line item, 001,G003

Create Cost Element(01)

INC/DEC in stocks FG P/L: REV, Only Local , Line item, 001,G030
SAVE

Q. What is GR/IR clearing A/c?

It is an offsetting account for inventory posting for tie being. Where we receive the goods,
not at receive the Invoice or where we receive the invoice not at receive the goods. By
end of the process the GR/IR clearing accounting value will "0"

2.Assignment of accounts for automatic postings

Path :Up to account determination without wizard the path is same – Configure
automatic postings (OBYC) (MM to FI Integration )

Select account assignment button

Give your Chart of Accounts :IBMR enter

Transaction valuation General modification valuation Account

modifier class
Inventory RM
BSX X - VCRM
local
X3 - VCFG Inventory FG
GR/IR clearing
WRX X - VCRM
local
VBR (consumption) RM consumption
VCRM local

ZOF (Production receipt without

production order)
AUF with production

GBB X VAY (Delivery where sales account is

created as revenue element Increase / Decrease
VCFG
stocks FG
Co implemented)
VAX Delivery where is sales account
is not created as revenue element

CO not implemented
enter+ Save

3.Document types and no. ranges for FI(OBA7& FBN1) & MM Postings[OMBT]

WE :Goods receipt 50 50000 50999

WA :Goods issue 49 49000 49999
RE :Grass invoice receipt 51 51000 51999
MM end user area

1.We create Account Category reference as per material master records[OMSK]

Ex: RM:-Raw Material,

FG: Finished Goods

2. We assign the Account Category reference to valuation class and material

type[OMSK]

Valuation class Account Reference

VCRM RM:-Raw Material
VCFG FG: Finished Goods
3.Material Type

Path:up to the material master the path is same – Basic settings –Material type-
Define attributes of material types.

ROH-RM:-Raw Material

FERT- FG: Finished Goods

4.Creation of Purchase Organization in vendor master [XK01]

Give the company code :IBMR

Purchasing organization :POBA

Account group :DO Domestic vendors for IBMR Enter

Give the name :Nagarjuna Steels Limited

Country :IN

Select next screen button 3 times

Reconciliation account :select 100501 Sundry credit RM

Sort key :012 vendor

Select next screen button

Payment terms :0001

Select next screen button 2 times

Order currency :INR

Select GR based invoice verification check box Save

Q. How many Payment term keys can be enters in Vendor Master Record?

There are two types, we can enter 2 payment term keys

1.Co.Code Segment

2.Purchase organization Segment

DIFFERENCES:

1.In the invoice is generated in FI without PO.

Integration the terms of payment key is Extracted from Co.Code segment of vendor
master record. In case if the vendor invoice is generated with from MM with PO
integration then the terms of payment key is Extracted from purchasing data of vendor
master records.

5.Creation of RM material master

Path :Logistics –Materials management –Material master-material-Create(General)

–Immediately (MM01)

Material :RM1

Industry sector :Mechanical engineering

Material type :ROH(Raw material)

Press select views button

Select basic data1, purchasing, general plant data/storage1/accounting1

Select organization levels button (bottom side)

Give the plant :BAN1

Storage location :BA Enter

Give the description :Raw material 1

Basic unit of measurement :EA

Material group :MG

Division :BS (Steel)

Select purchasing tab

Purchasing group :PG

Select accounting one tab

Valuation class :VCRM(RM local)

Price control :select V moving average price

Moving price :50

Select save button or Ctrl+S

6.In Material Master Record we specify the Valuation Class[MM01]

7.To open material periods for Current month:

Up to material master the path is same –Other-Close period (MMPV& MMRV)

From company code :IBMR

Give the period :10 (January)

Fiscal year :2019

Select check and close period radio button Execute

8.Purchase order creation

Path :Logistics – Material management –Purchasing –Purchase order-Create-

Vendor/supplying plant known (ME21N)

Give the purchasing organization :POBA

Company code :IBMR Enter

Give the purchasing group :POG

Item :10

Material :RM1

PO quantity :100 Kg

net price :75

Plant :BAN1

Give the currency :INR

Vendor no. :40031 Save

Note the purchase order no.4500017092

9.Goods receipt:
Path :Logistics –Material management –Inventory management –Goods movement
–Goods receipt- for purchase order –PO number known (MIGO)

Select goods receipt

Give purchase order no.4500017092 Enter

Storage location select :BA

Select quantity tab

Quantity in delivery note :100

Select item ok check box Save

Select display button Enter

Select document information tab

Select FI documents button

BSX 200121 Inventory RM local 7500 RM1

WRX To 100520 GR/IR CLRG RM local -7500 RM1

Qty .Received(GR) *Rate as per PO

100*75

A01-Goods Receipts Moment Type- 101(GR)

Q. What is Movement Type?

It is used to specify the movement of the material.

Movement types: Similar to posting keys in FI

101 Material receipt against purchase order /production order

102/122 Reversal of 101

201 Issue to cost centers

202 Reversal of 201

261 Issue to orders

262 Reversal of 261

521 Production receipt without production orders.

522 Reversal of 521

561 Opening stocks taking

562 Reversal of 561

601 Delivery (sales)

602 Reversal of 601

Difference between 201 and 261

Cost centers Dept A Dept B Dept C

Issue material Production order 1

(Movement type 261)

Stores items to issue Production order 2

(Mov.type 201)

(cost center 201) Production order 3

Material issue is identifiable to production orders use movement type 261

Material issue is not identifiable to production orders use movement type 201

It Controls:

 Field status of inventory posting

 Controls Account Determination for inventory posting based on the
valuation class defined.[OMJJ]

10.Invoice verification:

Path :Logistics –Materials management –Logistics-Invoice verification –Document

entry-Enter invoice (MIRO)

Give the invoice date :Today’s date

Reference :Party bill no.1234

Text :Invoice verification

Purchase order :4500017092

Select payment tab

Payment terms :0001

Baseline date :today’s date

Select base data tab

Tax code :select V0 Enter

Business area :BAN

Select beside data tab

Amount :7500 Enter+ save

From the menu select invoice document –Display

Select follow on document button

From PO 2001 Nagarjuna Steels Limited 7500 –From party no is taken

WRX 100520 GR/IR CLRG RM local 7500 RM1

11.Display Material Doc Number[MB03]

12.Display Stock ledger[MB5B]

Path :Logistics –Materials management –Inventory management –Environment –

Stock for posting date (MB5B)

Material no. :RM1

Company code :IBMR

Plant :BAN1

Selection date :01.04.2019 to 31.03.2020

Select valuated stock radio button Execute

13.Display Material Master record to check stock Qty, Rate and value[MM03]

Q. In Which view we can see the stock value?

Accounting 1 view

14.Display Invoice Doc Number[MIR4]

SCENARIOS
A.PRICE DIFFERENCES

Note: Where the material is following moving average Rate

1.FULL STOCK COVERAGE

Price differences are two types

1)Batch method 2)Moving average method

-------------------------------------------------------

| | |

Stock fully available Stock partly available Stock no available

1st method –Batch method:

RM1 PO PR 10 RS BILL for 12Rs

1.Material Receipt

Batch Qty Rate Amount Inv RM local DR 1000 BSX

1 100 10 1000 To GR/IR CLR RM LCL/100 WRX

2 50 40 2000 2. Raw Material consumption

----- ----- RM consumption local DR 100 GBB VBR

150 3000 To INV RM local 100 BSX

10 10 100

--- ----

140 2900 3. Invoice verification

180 GR/IR CLRG RM LCR DR 100 WRX

----- ----- INV RM LOCAL DR 180 BSX 90*2

140 3080 Price diff RM LCL 20 PRD 100*2

 To Vendor 1200 form PO vendor no. is
taken

Break up

1 90 12 1080

2 50 40 2000

Preparation in P & L account :

Raw material consumption :

Raw material consumption +/ price difference RM

Eg: RMC 100

PD RM 20

----

120

===

For the truncation key PRD –We can assign raw material consumption account or price
difference RM A/c

1.Moving average method: stock fully available

A.PO Creation[ME21N]

Qty rate amount

100 10 1000

Note: No Accounting Doc generated

B.Post Goods receipt [MIGO]

Qty rate amount

100 10 1000

BSX Inv.RM local DR 1000

To GR/IR CLRG RM LCL 1000-

C. Invoice verification [MIRO]

Qty rate amount

100 12 1000

WRX GR/IR CLRG RM LCL DR 1000

BSX INV RM Local DR 200 (100*2)

from PO To Vendor 1200 –

2.Moving average method: No stock available

A.PO Creation[ME21N]

Qty rate amount

PO 100 10 1000

GR 100 10 1000

IR 100 11 1100

Note: No Accounting Doc generated

B. Post Goods receipt [MIGO]

Qty rate amount

100 10 1000

BSX Inv.RM local DR 1000

To GR/IR CLRG RM LCL 1000-

C. Raw material consumption Or Goods issue for Consumption[MB1A]

Qty rate amount

100 10 1000

GBB VBR RM consumption local DR 1000

BSX To INV RM local 1000-

D. Invoice verification [MIRO]

Qty rate amount

100 11 1100
WRX GR/IR CLRG RM LCL DR 1000

PRD Price Diff. Act Dr 100

from PO To Vendor Act 1100-

3.Moving average method: Partial stock available

A.PO Creation[ME21N]

Qty rate amount

PO 100 10 1000

GR 100 10 1000

IR 100 11 1100

Note: No Accounting Doc generated

B. Post Goods receipt [MIGO]

Qty rate amount

100 10 1000

BSX Inv.RM local DR 1000

To GR/IR CLRG RM LCL 1000-

C. Raw material consumption Or Goods issue for Consumption[MB1A]

Qty rate amount

60 10 600

GBB VBR RM consumption local DR 600

BSX To INV RM local 600-

D. Invoice verification [MIRO]

Qty rate amount

100 11 1100

WRX GR/IR CLRG RM LCL DR 1000

PRD Price Diff. Act Dr 60(60*1)

 INV RM local 40(40*1)

from PO To Vendor Act 1100-

Note: Incase material having standard price than the price difference amount will be
posted to P&L Act irrespectively stock exist or not.

1.How to Release blocked invoice[MRBR]

2.List Invoice material Doc[M1R5]

3.List Invoice Doc[M1R4]

4.Maintain GR/IR clearing Account[MR11]

Generally this transaction is perform only where there is delivery surplus or Invoice
surplus. It means where we receive the goods not expecting invoice or vice verse.

5.Create PO[ME21N]

No Accounting entry generated in this transaction.

6.Post Goods receipt[MIGO]

INV RM Act Dr

To GR/IR Clearing 33Act

7.Maintain GR/IR Clearing Act[MR11]

Company Code IBMR IBMR IBS

Posting Date 27.01.2020

Vendor 40031 to

Purch. Organization to

Purchasing Group to

Plant BAN1 to

Purchase Order Date 01.01.2018 to 29.11.2019

Select delivery surplus

Select invoice surplus

We have to use no. range 48 no range "KP"

8.How to display PO history[ME21N]

9.Release PO Individually[ME29N]

10.Release More than one PO[ME28]

11.How to Purchase Asset from PO

4th Method-moving average method: Stocks not available safety socks

RM1 PO Price 10 Rs Bill for Rs12

1. Material receipt

Qty Rate Amount Inv RM local DR 1000 BSX

Bill Qty 100 10 1000 To GR/IR CLRG RM LCL 1000WRX

50 40 2000 2. Raw material consumption

---- ---- ------ RM Consume local DR 3000 GBB VBR

150 3000

150 20 3000 To INV RM Local

---- ----- 3. Invoice verification

AVBL Qty 0 0 GR/IR CLRG RM LCL DR 1000 WRX

Price Diff RM DR 200

To Vendor 1200 form PO vendor no.is

taken

11.Raw material consumption

Path :Logistics –Materials management –Inventory management –goods movement

–goods issue (Transaction code is MB1A)

Movement type :201

Plant :BILP

Storage location :HYD Enter

Give the cost center :Dept A

Material :BILRM1
Quantity :30

Select save button or Ctrl+S

From the menu select goods –Issue display Enter

Select accounting documents button

Select accounting document number

BSX

200121 Inventory RM local 2250-BILRM1 BIL1

GBB VBR

400000 RM consumption LCL 2250-BILRM1 BIL1

Qty consumed * moving average price 30*75