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Overview of MM ..................................................................................................................................11 Quantitative inventorying .....................................................................................................................12 Inventorying in terms of value..............................................................................................................13 Purchasing transactions ........................................................................................................................14 Procurement for consumption ..............................................................................................................15 Procurement for inventory....................................................................................................................16 Material valuation process (JUDSKLF) ...................................................................................................17 Valuation upon restoring] (JUDSKLF).....................................................................................................18 Material price changes..........................................................................................................................19 Inventorying process (graphic).............................................................................................................21 Bilanzbewertung...................................................................................................................................22

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Order point planning.............................................................................................................................31 Stochastic planning...............................................................................................................................33 Rhythmic planning................................................................................................................................34 Batch method........................................................................................................................................35 Qualifications........................................................................................................................................36 Reports..................................................................................................................................................36 Tables ...................................................................................................................................................36

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4.2.1 Materials movements............................................................................................................................58 4.2.1.1 Types of procedures and types of vouchers .....................................................................................59 4.2.1.2 Tables ...............................................................................................................................................59 4.2.1.3 Reports..............................................................................................................................................60 4.2.1.4 Movement type .................................................................................................................................61 4.2.1.5 Tables ...............................................................................................................................................62 4.2.1.6 Reports..............................................................................................................................................63 4.2.1.7 Materials master data set ..................................................................................................................64 4.2.1.8 Report ...............................................................................................................................................64 4.2.1.9 Parallel nature of inventorying and valuation...................................................................................64 4.2.2 Goods receiving/invoice receiving offset account................................................................................65 4.2.2.1 Tables ...............................................................................................................................................66 4.2.2.2 Reports..............................................................................................................................................66 4.2.2.3 Handling price differences................................................................................................................66 4.2.2.4 Tables ...............................................................................................................................................67 4.2.2.5 Handling differences in quantity ......................................................................................................67 4.2.3 Under-delivery/Over-delivery...............................................................................................................69 4.2.4 Goods receiving blocked inventory ......................................................................................................70 4.2.5 Goods receiving/Invoice receiving balance lists...................................................................................71 4.2.6 Inventory value list ...............................................................................................................................72 4.2.7 Restoring...............................................................................................................................................73 4.2.8 Transfer ................................................................................................................................................73 4.2.9 Qualifications........................................................................................................................................75 4.2.10 Reports..................................................................................................................................................77 4.2.10.1 Tables ...........................................................................................................................................80
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As significant modifications are made. Düsseldorf . However. but will be integrated into the existing SAP R/3 Auditing Manual (FI and Basics). release 3. systems auditors. this manual will be updated as necessary in subsequent releases. and employees of internal auditing departments of SAP users. regarding approaches to audits of materials management in the SAP R/3 environment. Grunewald Mr. Any and all responsibility for the type. Grosser Mr. Walldorf C&L Deutsche Revision AG. and results of external and internal audits lies with the auditor. and cannot be taken as a norm or compulsory guideline. Eschborn Auditor for Tax Consultants. Hungerbühler Mr. who are offering the benefit of their experience through this manual.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ% 0 Introduction This auditing manual for materials management (MM). Düsseldorf KPMG Deutsche Treuhandgesellschaft AG. later versions of the manual will not constitute an independent manual. St. This manual is intended for auditors – primarily systems auditors – with professional experience and at least a basic understanding of the SAP system. Copyright 1997: Ms. Schiwek Mr. scope. Melle Schitag Ernst & Young. This manual merely provides recommendations. Düsseldorf Bansbach Sch bel Br sztl & Partner GmbH.0E in the R/3 SAP systems environment. is intended to provide helpful suggestions for auditors. The authors are members of a team from the SAP Auditing Working Group. Frettl hr Mr. Walldorf KPMG Deutsche Treuhandgesellschaft AG. Klein Dr. Stuttgart SAP Aktiengesellschaft. the manual focuses on features specific to materials management. Lenczes Mr. Stein SAP Aktiengesellschaft. As a result. Gallen Arthur Andersen AG. Koch Mr. the manual does not address many fields and auditing steps that apply more generally to the inventory sector overall. Furthermore. Stuttgart ATAG Ernst & Young. Filla Mr.

Further information is provided in the original SAP documentation for the R/3 environment. microfilming. This work and all of its parts are protected by copyright. and storage in electronic systems. translation. This applies particularly to duplication. SAP AG. Grunewald and Mr. Schiwek. edited this manual. Any unauthorized use of this work outside the limits of the copyright is improper and punishable by law. .Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ& The authors are responsible for the contents. Ms. Walldorf.

Efficiency considerations are the only aspects that will not be addressed below. and profit situation at all times. Any software used in accounting must correspond to the provisions of business and tax law. as well (§264. paragraph 2 HGB [Commercial Code]. and is therefore a component of the provisions of law in Germany. financial position. in terms of tax law. We would also like to point out that this manual. of course. and in an orderly manner. the principles referenced above are essentially contained in §§238ff HGB. the wording of §§140ff AO [Tax Code] is now nearly identical to that of the Commercial Code. „true and fair view“ is an internationally recognized principle of accounting. Business accounting must assist the businessman in management decision making. accurately. so there is no need to address the tax law separately in this manual. deals only with management of inventories. and the methods used must ensure that transactions are thus recorded. including the principles of sound accounting [GoB]. Since this is a manual for internal and external auditors. paragraph 2 HGB) completely. but only for corporations).Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ' 1 1. Note that only German legal relationships are examined in this manual. both the individual transaction and the method used to process it must conform to the following conditions: • The transactions must be recorded (§239. . and thus does not address procurement of services or capital goods (fixed assets). compliance with the provisions of law is. According to the provisions of the business and tax laws referenced above. in its initial form.1 Materials Management in R/3 Objectives and requirements A key component of business accounting is that it must provide businessmen (and third parties) with as up-to-date and accurate a view as possible of the company’s asset position. in a timely manner. In German law. and it must do so efficiently – and in keeping with the provisions of the laws of the particular country. Indeed. a primary focus of the explanations that will follow.

i.. for the inventories sector.“ §239. must be ensured at all times (§239. naming conventions transac. As a precautionary control measure. the path of each item (= each part) and each work step. published by the Federal Ministry of Finance. from acquisition to the warehouse. paragraph 3 HGB). • The transactions must not be alterable unless the alteration can be reproduced („electronic erasure prohibition. In addition. the software must also incorporate an appropriate authorization feature. paragraph 1). The principle of data security also imposes requirements on modern software: it must include provisions for data protection (access protection method) and data security. . proofs of changes made to original data or tables. and from unfinished goods to finished goods to sale. qualification concepts. Examples of auditing steps for this general formal area include: • retrograde auditing (i.e. good software should be expected meet all these requirements through appropriate controls.). which means that: -an expert third party must be capable of reproducing them within a reasonable period of time (§238.). e. paragraph 1 HGB). I. types of movement. to provide adequate capacity for the effective separation of functions. paragraph 1 HGB).Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ( • The transactions must be reproducible (§238. by means of downloading the appropriate tables as RDIR. objects. must be able to be followed physically and in terms of value. etc.g. among other things. etc. paragraph 4 and §257. programs. availability and printout capacity. and the separatelydeveloped types of movement contained in Table 156*. tables.e. starting from the production system) of the regularity of company-specific modifications (name fields. efficient internal control system (ICS). paragraph 3 HGB). Interpretations of these provisions are found in the position statements issued by FAMA (Fachausschuß für moderne Abrechnungssysteme – the Technical Committee for Modern Accounting Systems) of the IDW (Institut der Wirtschaftsprüfer – Auditors Institute).. and in „Sound Accounting Principles for Computer-Assisted Accounting Systems (GoBS)“ (BStBl [Federal Tax Gazette] 1995. The principle of reproducibility includes such control requirements as proofs of program identity (when a particular version of a particular program was used). and -all the supporting documentation needed to understand the accounting documents and the method used must be available (§257. • The transactions must be secure. In terms of a functional. pp. or of adaptation of the standard to company-specific requirements. 738ff.

including those with error status. evaluation program activated). auditing the handling of batch input folders. according to past SKIP instances. .g. auditing key record types with internal issuance of record numbers for gaps. and • auditing the complete trace of changes to tables (REC CLIENT map on. Detailed materials requirements are given in the individual chapters.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà  • auditing the system log via the information system. These basic statements apply to all areas of the SAP R/3 MM described below. logging switch on. e.

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„Old“ material valuation Price „New“ material valuation Price: 4.00 change Price: 4.50 Total inventory: 10 units Total inventory: units Total value: 40.00 Total value: 45.00 Material price change => revaluation verification Inventory account [3] 5.00 | Cost/earning revaluation [2] | 5.00

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A change in the material valuation price is not only a change in original material, but an hpp‚ˆ‡vtDžh†hp‡v‚, as well, in which the total inventory of the valuation field is revalued. For a material with price governance T, it may be necessary to change the current valuation price if the escalation price that reflects developments in the cost price differs too greatly from the standard price.

g. A price change can be handled automatically (using batch input folders). e. through the plan-product calculation. the current valuation price adjusts to cost prices. In customizing the valuation and allocation of accounts. or the current valuation price. is determined when the program is called in. . and thus the accounting period for these price changes. for each accounting field it is determined whether the price changes registered for the previous period modify only the previous period price.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ! For a material with price governance W. In this scenario. when no movement has taken place over a fairly long period of time. The standard price T can be reset automatically in the materials master data set as of date x. Therefore. manual price changes are required only in exceptional cases. the accounting date. through the lower of cost or market principle. as well.

2.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ! 1.10à Inventorying process (graphic) D‰r‡ˆ…iryrt hyrtr  Tƒr……xr“rvpurÃ  Ihpu“luyˆt D‰r‡ˆ…iryrtà q…ˆpxr ‰r…hyh††r E  aluyˆt lqr… D‰r‡ˆ…“luyˆt D  9vssr…r“r yv†‡r  9vssr…r“rÃ hˆ†iˆpur  .

2.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ!! 1.11à Bilanzbewertung Ivrqr…†‡r…‡r…€v‡‡yˆt 6x‡ˆryyr Hh…x‡ ƒ…rv†r Bltvt xrv‡ Srvpurv‡r BE GDAPÃÃ7rr…‡ˆt ÃGh’r…ÃÃXr…‡rà Hrtr 7…ˆ‡‡‚ r…‡ ((" ((# (($ $ " ! # !& ! '& Ir‡‡‚ Xr…‡ " !  % Hh‡r…vhy†‡h€€Ã (($ Hrtr)à  WQ)Ãà  %& T‡rˆr…Cq…ÃQ…rv†Ã )ÃÃÃÃÃÃ( T‡rˆr…Cq…ÃQ…rv†Ã!)ÃÃÃÃÃÃ' 7ˆpuˆt)ÃÃ"  !($ T‡‚…‚) 7rr…‡ˆt†yv†‡r 7XÃÃà  IXÃÃÃÃÃÃ'ÃÃ9vssÃÃ! ÃÃà Tˆ€€r 9vss Y   (% 7rr…‡ˆt†yv†‡r 7XÃÃà  GDAPÃÃÃÃ%&ÃÃ9vssÃÃ"" ÃÃà A7 " Tˆ€€r 9vss Y .

Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ!" 1. by utilizing movement type 561. is of particular importance because it can endanger compliance with the criteria of regularity if it is improperly handled. increases that are then withdrawn after the outflow of goods is posted. In other words. to show movements of materials at the client level within a company. or to solve problems in the planning system that result from entering material reservations. which must be utilized here. In fact. . In these circumstances. after which the quantities and values are incorporated (after a take-over inventory is performed).3 Incorporating old data In order to incorporate physical unsold inventory previously tracked in an old system as book inventory in an SAP system. Movement type 561 (Taking Inventory from Old Systems). While the debit balance entry that it generates is reflected in the material accounts. Accordingly. the need sometimes arises for circumventing previous materials reservations since they are no longer relevant at that particular time. because there is no justifiable. This authority undermines the ICS principle that there should be separation of personnel between the quantitative audit and recording of a delivered batch through stock receipt and the input of its value. it is possible to impose one-sided influence on inventories and inventory value while sidestepping an internal control system. As a rule. SAP recommends that movement type 561 should be disabled after the data is incorporated. movement type 561 is frequently utilized. Since it must be assumed that the corresponding credit entries and their progression have already been represented in the financial accounting. This must be viewed as „bookkeeping without vouchers“. factual reason for making the entry increasing the inventory figure. the requisite credit counter-entry occurs in an „Inventory Counter-Entry“ account. manual increases in the available to promise inventory. the appropriate material master data sets must be set up prior to transfer. For preparation of delivery receipts or for inventory expensing. this „account“ is nothing more than a traffic-flow summary of movement type 561. users do not carry out this disabling step. for example. people have found a way around the problem by making short-term.

Therefore. appropriate reference numbers must be provided for old stock in the new SAP materials master data set. prior to incorporation materials from the old system. (If there is no access to movement data in the old system.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ!# $XGLWLQJ VWHSV Is movement type 561 included in the T156* tables? Who has access to it? Were entries made using it? What was the reason for doing so? It must be determined whether.) . and whether it was carried out. by the exact time of transfer. inventory coverage and marketability allowances can be calculated only from the point when they were incorporated. the need for evaluating marketability allowances or inventory coverage in the old system was weighed.

: Movement type: XXX Accounting string Transaction key -> Account Modification Const.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ!$ 1. Valuation class: Account debit: Account credit: 403000 403000 VBR GBB Counter-entry INT 1000 VBR Consumption 3030 Operating supplies .: Automatic Bookkeeping Entry Transaction: Account plan: Valuation Modification Const.4 Account tracking F‚‡rƒyh) DIU 7rrtˆt†h…‡) 7ˆpuˆt†x…rv†)  7rH‚qvF‚†‡) 7rr…‡F…rv†)   ‡Ã7ˆpuˆt††‡…vt YYY ‡ÃW‚…tht††puy††ry Ð ÃF‡‚H‚qvF‚†‡)ÃÃW7S ÃÃÃÃÃÃÃÃÃÃÃÃÃÃÃ6ˆ‡‚€h‡v†purÃ7ˆpuˆt ÃÃà Hh‡r…vhy†‡h€€ W‚…tht) F‚‡rƒyh) 7rH‚qvF‚†‡) F‡‚H‚qvF‚†‡) 7rFyh††r) B77 DIU  W7S "" Brtriˆpuˆt 7rr…‡ˆt†xyh††r "" ÃÃà Wr…i…hˆpu Cvys†ÈÃ7r‡…vri††‡ F‡‚ÃT‚yy) F‡‚ÃChir) #" #" Account plan: INT Accounting field: Valuation field: 1000 1000 1000 Valuation Modification Const.: Account Modification Const.

Inventory account numbers for the resulting bookkeeping vouchers are generated automatically. Factors influencing automatic account tracking are: ‡ur…thv“h‡v‚Ãyr‰ry (valuation field..Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ!% Materials master data set … Valuation class 3030 . accounting field. account plan) ‡urÃiˆ†vr††Ã‡…h†hp‡v‚ (determined by the movement type) ‡urÀh‡r…vhy (valuation class in the materials master data set) . Various processes in materials management are relevant for accounting purposes..

production delays and shortfalls in sales may arise – with consequences relating to the need to set aside reserves to cover imminent losses from pending transactions. It is at this early stage that appropriate stocking of the inventory (prevention of overstocking or inventory deficiencies) and timely availability of materials for manufacturing or delivery orders is determined. and time. .Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ!& 2 2. in order to minimize inventories while maintaining the capacity to deliver products. Although nearly no business transactions that require bookkeeping entry or the ability to be entered into the books arise during this phase. a key objective in material requirements planning is to define the quantities needed. To accomplish this objective. and that ordering and planning data flowing into the material requirements planning process be managed in terms of quantity. That determination is then converted into ordering recommendations for Purchasing and Production. in terms of materials and time. the amount of material needed continuously or at given intervals is determined through a range of planning methods (based on a variety of procedures). as realistically as possible. it is essential that inventories be managed correctly in terms of quantity and value. supply overruns or unusable materials may pile up in the warehouse – with a resulting impact on valuation (the quantity of materials subject to devaluation increases).1 Material Requirements Planning Objectives and requirements In material requirements planning. If need is overestimated or is estimated inaccurately in terms of the technical demand. • Therefore. value. consequences having an impact on the annual statement of accounts may be associated with risks related to need assessment: • Owing to underassessment or untimely assessment of need in material requirements planning/availability.

etc. as required for compliance with the Sound Accounting Principles for Computer-Assisted Accounting Systems [GoBS]. See also the procedural documentation and the history function for customizing parameters. so that it can be reproduced. Complete. From an auditing perspective. the functional separation of the order requisition and ordering areas (specifically the authorization to correct orders) must be ascertained and verified. the data must be processed correctly in terms of technical content. quantity. in compliance with the provisions relating to regularity. requests. batch sizes. controls must be placed and maintained on all governing systems that directly influence the volume of inventories. unbroken documentary proof must be supplied from need control (planning. .Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ!' From an auditing perspective. ordering data. order times. quantities consumed. The methods used to balance out contradictory objectives (maintaining low inventory levels at the same time as a high delivery capacity) must be identifiable and verifiable.) used in determining need must be managed. and program versions used. and value. tables. delivery times. and basic information (parts lists or product structures. orders) and consumption control (inventory shortfalls) as well as manual processes (following inventory audits) for all order requisitions and need generators. Data on unsold inventory. contingency inventories.

these planning methods are used in areas that do not have their own production. simple methods that can be used to achieve the stated objectives with relatively little outlay. or in manufacturing plants. If he opts for the target planning order.and C-parts and operating supplies. the entire inventory available in the plant (available to promise inventory) is used as the basis for planning. in practice. The ordering point and the registration inventory are taken into consideration in this process. Preferably therefore. In the other case.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ!( 2. For outside production. . he must follow it up with an additional step to convert it into an order requisition. if the order recommendation is sent to Purchasing directly and without processing. • • • statistical batches. • • • order point planning stochastic planning rhythmic planning and the batch methods used. A planning order is generated basically for in-house production. The advantage of the second method lies in the additional control (ICS documentation) that the planning officer has over order recommendations. the planning officer can choose between target planning orders and order requisitions.2 SAP facts The methods used to determine need in the context of need-driven planning. Since materials planning is essentially implemented for each material at the plant level. for planning B. and optimal batches are. periodic batches. The type of order recommendation automatically generated during planning depends on the material’s procurement type. and make it available to Purchasing in this form. Purchasing then assumes responsibility for having the materials available and for unsold inventory. In this instance. Purchasing can then wait to order the materials until the planning officer has checked over and negotiated the order recommendation.

or independently planned.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ" However. these inventories are not taken into consideration in planning at the plant level. . Inventories consigned by suppliers are also included in planning. inventories at individual warehouse locations can be excluded from planning. In this case.

. the reporting inventory and the contingency inventory are determined by the integrated forecasting program.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ" 2. This provides continuous assistance in minimizing inventories. and additional demand from delays in deliveries. The reporting inventory and contingency inventory are entered into the respective materials master data set by hand or electronically. the reporting inventory and the contingency inventory are adjusted to the respective consumption and delivery situations. in addition to previous material consumption values. an order recommendation is generated when the available unsold inventory falls below the reporting inventory. can be determined manually by the planning officer (manual order point planning). in determining the reporting inventory.1à Order point planning In this method. the program uses the service grade as determined by the planning officer and the replacement period. the on-time delivery history of the supplier or manufacturer must be taken into consideration. and the duration of the replacement period. In machine order point planning. consumption to date. in determining the contingency inventory. the following items must be taken into consideration: • • • • the contingency inventory. in addition to prior consumption and future demand. or can be calculated by machine through the system (machine order point planning). The reporting inventory and contingency inventory. as central control parameters in order point planning. The reporting inventory (order point) is comprised of the contingency inventory and the average demand for materials to be expected during the replacement period. Since the forecasting calculation is performed at regular intervals.2. The contingency inventory must taken into account any increased material consumption during the replacement period. future demand. In this process. Accordingly. Therefore.

If returned materials make planned deliveries of incoming goods unnecessary. a planning memo is generated for the next planning cycle. Whenever materials are removed. the program checks to see whether the available unsold inventory then exceeds the reporting inventory level.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ"! The inventorying program handles continual monitoring of the available unsold inventory. then a planning memo is produced to cancel excess order recommendations. When materials are returned. If it does. a recommendation for cancellation of those deliveries is made. If it does. . the program checks to see whether the available inventory falls below the reporting inventory level.

The forecasting timeframe (day. One advantage of this approach is that the demand established electronically is constantly adjusted to actual current consumption. in the stochastic planning method the forecasting values for future demand.2à Stochastic planning In contrast to the order point method. net demand budgeting is verified to determine whether the forecast demand is covered by the available unsold inventory and/or the deliveries of incoming goods planned by Purchasing or Production.2. the distribution of the forecast demand values can be determined on a more refined time scale. are combined into one batch. are used as the basis for the planning process. established by the forecasting program on the basis of material consumption. For each period. month. The forecast demand is thus reduced by the quantities of materials already removed during the current period. In addition. If the inventory falls short of forecast demand. several requirement quantities. If applicable. corresponding to the selected batch method. The number of periods to be taken into consideration from forecasting to planning can be defined. week. and accounting period) and the number of forecasting periods. can be individually determined for each material.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ"" 2. an order recommendation is generated. as well. so that parts of the predicted demand that have not yet been utilized can be put back into the available pool. . The forecasting calculation is performed at regular intervals.

the system bases its work on the time interval between the planning date and the availability date. Materials to be made available at a regular rhythm are given a planning date in a planning memo file. and is reset later according to the planning process. but also whenever the inventory falls below the reporting level when goods flow out. The materials are then made available not only by the availability date entered in the planning memo file. dynamic contingency inventory is established on the basis of average daily demand. the delivery rhythm. By specifying a range profile in the materials master data set. It is set only when a material master data set is created. In this case. The system uses the consumption quantities reported by the forecasting program for the following period and a contingency inventory. if it is included as a customizing feature. In calculating material requirements. The rhythmic planning method can be combined with the order point planning method.3à Rhythmic planning This method provides for making materials available at a defined. . a reporting inventory level must be set in the material master data set. Any specified Purchasing processing time and/or Receiving processing time is taken into consideration. The method is controlled by the planning characteristic and by specifying the planning rhythm.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ"# 2. A check is made to determine whether the current inventory and the planned incoming goods are adequate for the time period under consideration. a demand-oriented.2. steady rhythm – deferred by the delivery time. Demand is thus determined according to the following formula: D‡r…‰hyÃs‚…rph†‡Ã‰hyˆr† (rhythm + Purchasing processing time + planned delivery time + Receiving processing time) Ã8‚‡vtrp’Ãv‰r‡‚…’ The system generates an order recommendation for the amounts determined necessary. That date corresponds to the next materials availability date. and a range profile in the materials master data set.

Periodic batch method The quantities needed for one or more periods are combined to form one batch. The number can be set at any desired interval: daily batch weekly batch monthly batch periods of flexible length.2. The following methods are available: unit/period adjustment sliding economic batches dynamic planning calculation. the system takes the batch method determined in the materials master data set into consideration. Optimal batch method By combining several quantities needed into batches. Three calculation criteria are available for this process: exact batch fixed batch replenish to maximum inventory. The following methods are available in the SAP standard system: • Statistical batch method The batch is formed exclusively on the basis of quantity standards in the respective material master data sets. .Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ"$ 2. and the Groff batch method. • • - Formulas tailored to the user are also possible. optimum cost is used as the basis for set batch costs and warehousing costs. Batch specification must also be influenced by additional restrictions in the materials master data set: specification of limit values specification of rounding-off values.4à Batch method In preparing the order recommendation.

2.7à Tables T023 T024D Goods groups Materials planning officers .2.2.5à Qualifications The following qualifications are available in the context of standard delivery: MM_D Materials management / Master data M_MATE_BUK M_MATE_LGN M_MATE_PER M_MATE_STA M_MATE_VKO M_MATE_WRK MM_D Master data: Accounting field Master data: Inventory number Master data (Reverse entry/Interval deferral) Master data: Accommodation status Master data (Sales organization/Distribution channel) Master data: Plant Materials management / Materials availability M_MIPA_ORG M_MTDI_ORG M_PLAF_ORG Reduction of backlogs Organizational levels (Material requirements planning) Organizational levels (Planning order processing) 2.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ"% 2. reservations 2.6à Reports RMMVRZ00 RM07RMAT RMCBBW00 RMCBBW10 RMCBIN00 R00LMB15 Materials list Materials reservations General analysis of inventory values Hit list of inventory values ABC Analysis of Consumption/Requirements Suggested values.

Inaccurate material requirements data (through cancellation or modification of orders. Inaccurate structural data (parts lists) In reducing the quantity of materials required. • • The following risks must be taken into consideration as a result of the organizational and data problem areas outlined above: IrrqÃv†Ã†r‡qrsvrqÃh‡Ã‡‚‚ÃuvtuÃhÃyr‰ry) -> Excess inventories -> Coverage is too extensive -> Coverage must be reduced IrrqÃv†Ã†r‡qrsvrqÃh‡Ã‡‚‚Ãy‚ÃhÃyr‰ry) -> -> -> -> Delivery power is questionable -> Reserves needed Sales are lowered Output decreases Hardware inventories are too high . or incomplete or delayed flows of vouchers prevent or have a significant negative impact on correcting original material requirements values when changes are made in the fundamental planning data.3 Risks In the context of material requirements planning. a range of sources of error may lead to material requirements figures that are inaccurate. inaccurate structural data leads to incorrect information at subsequent structural levels. or falsified inventory figures) A lack of organizational feedback. either from a technical or a scheduling perspective: • Inaccurate base data (master data) Inaccurate control content in the base data poses a fundamental impediment to accurately carrying out the material requirements planning process. calls for materials.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ"& 2.

1à Auditing steps Audit documentation/Working papers In preparation for and performance of the audit.4. the following evaluations must be completed and archived: ICS: -> description of the requirements planning process and description of the supply process.2à Auditing steps The following auditing steps are required in the context of the various kinds of audits: ICS: Mandatory for general audit: -> -> audit of compliance with ICS directives no mandatory auditing steps . including ICS controls no mandatory evaluations Mandatory for general audit: Optional for general audit: -> -> analysis of coverage in warehouse inventories (individual items) inventories of order-related materials documentation of the customizing parameters documentation of table contents (modification history) -> System audit: -> 2.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ"' 2.4.4 2.

Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ"( Optional for general audit: -> audit of coverage and planning for devaluation of materials (audit at the item level is necessary. since group evaluations provide a deceptive average profile for items with excess coverage and inadequate delivery power) audit of AB materials for cancelled/reduced orders audit of AB materials for call orders audit of customizing adjustments (conformity with GoBS [Sound Accounting Principles for ComputerAssisted Accounting Systems]) audit of table contents/history (conformity with GoBS [Sound Accounting Principles for Computer-Assisted Accounting Systems]) -> -> System audit: -> -> .

3à Audit question list The following questions must be answered during the auditing steps: -> Are the material requirements planning and availability methods familiar and clearly described in the ICS documentation.4à Using the audit information system If the audit information system is available.4.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ# 2. entry via the • • Inventories -> Inventories -> Basic data Material requirements planning menu options is recommended. including controls? Is there a history of the customizing parameters and contents of tables (use of correction and transport systems) for material requirements planning and availability? Is a coverage analysis of warehouse inventories available at the item level? Are inventories of order-related materials recorded separately? Is the order data in use up to date in terms of reorganization? Does the data contain any fictitious orders? Have periodic variations in consumption been taken into consideration? Is there an individual breakdown by all need generators? Are all interventions by hand documented in availability records? -> -> -> -> -> -> -> 2.4. The following reports are available here: Requirements planning -> -> Warehouse coverage analysis Order backlog .

no. if applicable. During the ordering process. do not result in any correction of the basis of valuation until the time the invoice is received. in addition to information on quantities. Proof of lower replacement costs must be derived from current market prices on the accounting date. .1 PURCHASING Objectives and requirements Order recommendations from material requirements planning are processed in purchasing. where they are converted into external orders to suppliers. In determining the future drain on liquidity and the creation of reserves for potential losses from pending transactions. price and value components are taken into consideration in the transaction for the first time. and must be taken into consideration in the audit. An exorbitant order price results in a pecuniary loss – provided that the invoice subsequently received is also exorbitant – and. proof of losses from contracts owing to lower replacement costs as of the accounting date (§249 HGB).Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ# 3 3. however. may result in a need for devaluation in the annual financial statements (see chapter on Valuation). For this reason. in addition to order liability. the history function must be guaranteed in the area of offer and order prices (see chapter on Valuation). through the supply department. The actual cost prices. 3 HGB [Commercial Code]. firm bids from central or distributed contracts must be taken into consideration. and pursuant to §285. The main auditing objectives are: • • complete information relating to the future drain on liquidity as of the accounting date.

and governance tables (in conformity with GoBS [Sound Accounting Principles for Computer-Assisted Accounting Systems]) • • • • • • • • • • • • • • . the following requirements are imposed on the client’s ordering department: • Capacity for continuous control of concluded and current inventory processes. with respect to: Supplier Item Order quantity Price Conditions Terms of payment Accounting • • Proof of all current/concluded contracts with suppliers Compliance with/Adherence to the GoBS [Sound Accounting Principles for Computer-Assisted Accounting Systems]. GoB [Sound Accounting Principles]. GoS [Sound Accounting Principles for Data Storage Accounting Systems]. quantities.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ#! From the auditing perspective. and RP) Presentation of the function/procedure type schema for the Ordering subprocess Proof of open orders (order liability) Proof of advance payments on orders Proof of suppliers and conditions Directory of suppliers (order book) Proof of orders (order history) Proof of contracts and delivery schedules Proof of current EK negotiations or orders (items. the customizing parameter. prices. conditions) Proof of changes in order prices/price and conditions history Accounting controls in direct accounting of goods receipt Proof of workflow integration. goods receipt. and the BDSG [Federal Data Protection Act] Proof of control functions within the ICS Adherence to the principle of separation of functions (Organizational separation of procurement.

purchasing has transition points into the overall integrated system.g. invoice receipt/ invoice verification. • 9v†‡…viˆ‡v‚ÃT9 Requirements that arise from distribution and that have been transferred to purchasing. In addition. request/offer.(materials requirement/planning. • • • potential sources of supply are determined and suppliers are selected/allocated.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ#" 3. ordering. purchasing can already determine the particular account to be charged in the financial accounting. can be allocated directly to the customer order at the same time the order requisition is recorded. and orders are monitored from delivery of the goods through payment for order requisitions. • AvhprÃ9rƒh…‡€r‡ÃAD Purchasing (purchasing data) oversees supplier master data in cooperation with the finance department (accounting data). In allocating an account for orders. e. In the context of purchasing. inventorying. external procurement of materials and services is handled. outgoing payment). goods receipt/WEK. .2 SAP facts As a component in materials management. ordering is an element in the process chain.: • 8‚‡…‚yyvtÃ8P Orders for consumable materials and services can be allocated directly to cost centers or orders.

In this case. If it is not allocated. in addition. A plant must be allocated to one or more purchasing organizations. • Qˆ…puh†r…Ãt…‚ˆƒ Organizational subdivision of the employees in purchasing. economic and/or administrative units • 6pp‚ˆ‡vtÃqv‰v†v‚ Legally independent unit that prepares accounts within a client entity • Qyh‡ Factory shops within an accounting division • Qˆ…puh†vt…thv“h‡v‚ Organizational unit that provides materials or services for one or more plants. organizational. This scenario presumes that the plant for which procurement is being provided is allocated to the purchasing organization. an allocation to an accounting division must also be provided for a plant. operational. or to no accounting division. A purchaser group can also be responsible for several purchasing organizations. who are responsible for operational activities. A purchasing organization can be allocated to one accounting division. and negotiates general purchasing conditions with suppliers. any purchasing organization can perform procurement for any accounting division.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ## The following organizational levels are the corporate structures that are significant for purchasing: • 8yvr‡ Summary of legal. allocation to an accounting division must handled when the purchase voucher is prepared. .

from which other purchasing organizations responsible for procurement in the plants can call materials. it is possible to distribute requirement quantities among various sources of supply automatically. The source of supply is clearly identified in order book data fields (supplier. can use contracts jointly (qv†‡…viˆ‡rqÃp‚‡…hp‡†). Order book: Quotas: . basic contract position). Number fields: Numbering for purchase vouchers and master data is handled internally – automatically by the system. With the assistance of SAP-ALE. Proof of the source of supply provided for a material. a purchasing organization can procure materials for a plant of one supplier/ plant that belongs to another accounting division within the same client/group ( …rqv†‡…viˆ‡v‚Ãhp…‚††Ãhpp‚ˆ‡vtÃqv‰v†v‚† with one SD delivery and one invoice). By establishing quotas. extensive contracts (pr‡…hyÃp‚‡…hp‡†) with advantageous conditions can be negotiated through reference purchasing organizations with one supplier. plant. with the dates of validity during which procurement is possible from these sources of supply. When the system is set up appropriately. even individual companies that belong to a group.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ#$ When the system is set up appropriately. or externally – manually by the user. but each having its own independent SAP system.

voucher type Delivery schedule classification. purchasing organization Offer. purchaser group Ordering. purchasing organization Request. purchaser group Purchasing information system. purchasing organization Ordering.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ#% 3. voucher type Offer. plant M_LFM1_EKO Purchasing organization. plant Offer. release code Order requisition. purchaser group Offer. plant Ordering. Supplier master data M_LIBE_EKO M_LPET_BSA M_LPET_EKG M_LPET_EKO Supplier assessment Delivery schedule classification. purchasing organization . plant Order requisition. voucher type Request. plant Purchasing information system. purchaser group Request. voucher type Ordering. purchasing organization Order requisition. purchasing organization M_EINF_WRK Purchasing information system.2.1à Qualifications The following standard qualification documents are significant in the context of purchasing: MM_E Materials Management/Purchasing M_ANFR_BSA M_ANFR_EKG M_ANFR_EKO M_ANFR_WRK M_ANGB_BSA M_ANGB_EKG M_ANGB_EKO M_ANGB_WRK M_BANF_BSA M_BANF_EKG M_BANF_EKO M_BANF_FRG M_BANF_WRK M_BEST_BSA M_BEST_EKG M_BEST_EKO M_BEST_WRK M_EINF_EKG M_EINF_EKO Request. voucher type Order requisition. purchaser group Order requisition. purchaser group Delivery schedule classification.

Release
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M_LPET_WRK Delivery schedule classification, plant M_ORDR_EKO Order book, purchasing organization M_ORDR_WRK Order book, plant M_QUOT_WRK Quotas, plant M_RAHM_BSA Basic contract, voucher type M_RAHM_EKG Basic contract, purchaser group M_RAHM_EKO Basic contract, purchasing organization M_RAHM_WRK Basic contract, plant V_KONH_EKO Master condition, purchasing organization

3.2.2Ã

Reports RMKKVZ00 Directory of suppliers RMMVRZ00 Materials list

3.2.3Ã

Tables T000 T001P T001W T024 T024B T024E Clients Plant/Operation Plant/Branch Purchasing groups Processor groups Purchasing organizations

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3.3

Risks
The following areas can be identified as problem zones in the framework of the ordering division: Organization: Workflow control is switched off or circumvented

Prices Order price incorrect incorrect prices* /Price determination dummy prices (1.00) used* prices unknown* Price corrections Gross prices date critical* imaginary conditions for net prices*

Additional expenses incomplete calculation* planned/not planned Order price is used for DU price formation (V price)* * - DU prices (V prices) incorrect/Order liability incorrect
6pp‚ˆ‡Ãhyy‚ph‡v‚)

Account allocation unverified/changed (ICS) during direct entry, goods management/FIBU
P…thv“h‡v‚hyƇ…ˆp‡ˆ…r)

Process chain requirement notification -> procurement request -> release Process chain -> ordering -> modification -> release -> modification Process chain -> invoice control -> goods receiving -> order
P…thv“h‡v‚hyÃsy‚Q…‚pr††r†)

Pressure to get orders? Use of price lists/catalogues -> gross order prices? Market prices

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Q…‚pˆ…r€r‡Ã…vtu‡†)

Method for selecting providers Establishing and observing order value limits
6…puv‰vtCv†‡‚…’)

Contents/exceptions, archiving conditions
6ˆ‡u‚…v“h‡v‚†Trƒh…h‡v‚Ã‚sÃsˆp‡v‚†

Establishment and modification of creditor master data Item/part master data Pricing information/corrections Orders/modifications

Documentation on conditions .Workflow control schema of the processes . Inv.Supplier documentation .4. I.Price control evaluations L.Governance table contents (history) Mandatory for Order liability general audit: . the following evaluations or methodological documentation must be prepared and archived: ICS: . processing ..Changes in order prices .Current offers/current prices.Order book .Customizing parameters (e.4 3.(Sorting/compression/addition) for standard orders/call orders/contracts .1à Auditing Procedures Audit documentation/Working papers In the context of preparing for and performing the audit.Description of the ICS components and controls.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ$ 3. replacement .Schema of procedure type. purchase parts . periodic DU-EK/V price.Contracts/delivery schedules/skeleton agreements .Item documentation .Advance payments on orders . price governance) . including proof of implementation .Proof of all order authorizations and user authorizations .Additional cost vouchers. current price_ .Price history for sample audits (DU prices) . EK.Price correction accounts Optional for general audit: .g.

Calculation schema System audits: .Archiving variants .Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ$ .Ordering history .Purchasing data history .Documentation on communication paths (EDI) .Batch input interfaces .Application integration .Documentation on communications procedures (EDI) .

and is it constant? Audit of additional costs (completeness. etc. simultaneous master data + ordering or authorization for modification and release.g.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ$! 3.) Audit of account allocation for direct postings (e. if any. allocation) Account modifications in current processing Option for general audits: Sample audits of the calculation schema . EDMS) Are the customizing parameters in conformity with the Sound Accounting Principles for Computer-Assisted Accounting Systems? Does the table history contain all values pursuant to the Sound Accounting Principles for Computer-Assisted Accounting Systems? Mandatory for general audits: Audit of order liability (including call orders) (completeness.g. trend values Sample audits of price history (using DU/V prices) Control of account price differences/ corrections Is price governance defined comprehensively.4. accurate value content) Audit of price control evaluations (variations. with respect to limits) Audit of price history/current prices.2à Auditing steps The following auditing steps must be performed in the context of various types of audits: ICS: Audit of the procedure type schema (correct debit functions) Control of authorization structures (separation of functions)(e.

Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ$" System audits: Are the batch input interfaces complete and accurate? Are workflow controls complete and permanent? EDI used? Internet used? -> DMS archiving? Separate audit EIS/DWH used? EDMS involved? -> Separate audit needed -> Firewall concept? -> Compliance with GoS -> Data synchronicity? -> Accounting controls? .

invoice verification (posting) departments? -> Are the order numbering circuits maintained? Have any gaps or double numberings been checked? -> Have the authorizations for material requirement requisitions been clarified (origination. goods receiving. administration)? -> Has the responsibility for order releasing and order modification been clearly established? Processes: -> Is the inventory audit prior to order modification clearly regulated? -> Are there are regulations for procuring settlement offers? -> Has the responsibility for contract negotiations been clarified? -> Is all order information available to goods receiving? Objects: -> Is the inventory of open orders followed on an on-going basis.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ$# 3.3à Audit question list The following audit questions must be clarified in the course of the audit: ORG: -> Is the structure of the purchasing division maintained? Are the work processes and the ICS controls clearly defined? -> Is the separation of functions guaranteed in the purchasing. sales. and is it reorganized continuously? . production.4.

totals by deadline .4à Use of the audit info system If the audit info system is available.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ$$ 3.inventory material/order material -> Open contracts/Contingencies/Call orders .4. it is recommended that entry to the system be gained through the following menu options: • • Inventories -> Inventories -> basic data purchasing The following reports are available through these options: Basic data -> -> -> -> -> Purchasers Suppliers Items/materials Conditions Numbering circuits Purchasing -> -> Order book Open orders for goods .totals by accounts .

which is gaining in importance in production companies. In terms of an effective internal control system. customer orders . inventorying should be able to distinguish among the possible types of inventory. and physical inventory of incoming goods. physical incorporation of the part into a semi-finished product. is desirable. secondly. is also an important precondition for proper inventorying (see Chapter 6). and data from sales – i. which material management software must be capable of handling: the physical location of the product. the admittance – subject to mandatory recording in the accounts – of an asset and. such as restoring. Since the physical tracking of the path of a part. therefore. the originating point of a liability – which must also be entered into the accounting record. under the terms of which these incoming goods are deemed permissible. must be recorded in this area.1 GOODS MOVEMENTS Objective and requirements Goods receiving is. and other similar changes. first. Goods received without an order must also be able to be processed. Changed that may be made in physical location must also be able to be tracked.g. automated controls should be available. withdrawal. such as . Accurate record keeping of both movements is. the deduction of an asset – which must be recorded in the accounts – the originating point for a claim that must also be recorded in the accounting record. through the warehouses and production. and physical characteristics. standards. it is particularly important that all variations from the order. and thus determining its physical location at all times. the place where it is being stored. preparation for production.e. an essential prerequisite for providing an accurate image of the asset. and must be able to be forwarded to invoice verification. with respect to quantity or quality. Furthermore. financial. Its mirror image is goods outflow. value. i.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ$% 4 4.e. through the ISO 9000 ff. e. changed in the allocation to a customer order. The general principles listed in chapter 1 form the basic requirements for the software.for controlling the outflow of goods. Integration with quality control. there is a fourth component in addition to quantity. value. Since it is generally a sensitive area of an ICS. data from purchasing should be able to be used to control quantity. and earnings position in the accounting record. A price history must be included for evaluation (see also under 7) in the annual accounts.

accurate. etc. even the best software cannot record all these movements automatically. consignment warehouses. which means that appropriate organizational precautions must be taken to ensure secure and complete recording of these processes.g. it must be noted that (at least for the moment). accessories. inventory from outside sources (e. timely allocation of inflows and outflows of goods are of great importance for the cut off date in the annual accounts. . reserved inventories. in third-party manufacturing). Owing to the material importance of inventories. However.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ$& standard inventory.

these operational processes that change the inventories are illustrated by the functions of inventorying.1à SAP Facts Materials movements Materials movements. as a rule.g.2. restoring. The inventory accounts affected by a goods movement are adjusted via an automatic account tracking. and transferring) – these materials being RHB materials. merchandise. are defined as both „external“ movements of materials (goods received from third-party sources. a bookkeeping voucher (bookkeeping outlook) is created in parallel with the material voucher (warehouse outlook).e. and unfinished and finished products. material vouchers and bookkeeping vouchers are generated. .Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ$' 4. or warehouse movements. as a rule. only the consumption statistics are adjusted in the material master data. the system increases the total assessed inventory and the type of inventory (e. withdrawal of materials for in-house purposes. Material voucher numbers and bookkeeping voucher numbers are different. In booking a movement of goods in the SAP system. b) goods receiving -> consumption If the goods are delivered for consumption. or actions taken.2 4. a valuation is performed at the same time as the quantitative inventorying process. on the basis of booking incoming goods: • • • • material voucher bookkeeping voucher bill of delivery inventory adjustment a) goods receiving -> warehouse If the goods are delivered for the warehouse. In SAP materials management.. The following vouchers are created. i. The inventory value is adjusted at the same time. freely usable inventory) by the amount delivered. outflows of goods for customer orders) and „internal“ movements of materials (outflows of goods for production.

Release
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c) goods receiving -> goods receiving blocked inventory If the received goods are booked in the goods receiving blocked inventory, the inventory remains unchanged. Only in the goods receiving blocked inventory are the goods directed to the order history. • • Adjustment of the affected inventory accounts Adjustment of ordering (order history, order position)

4.2.1.1Ã

Types of procedures and types of vouchers To make it possible to issue different voucher numbers and to provide for systematic filing of the vouchers in the voucher data file, material vouchers are divided into types of procedures and bookkeeping vouchers are divided into types of vouchers. The procedure and voucher types differentiate the transactions, and govern the issuance of vouchers. (One numbering circuit is defined for each type of procedure, for issuing material voucher numbers. One numbering circuit is defined for each voucher type, for issuing the numbers of the bookkeeping vouchers). Goods movement Goods receiving for purchase orders Goods receiving for contract orders Outflows of goods, transfers, other inflows of goods Outflows of goods for deliveries Procedure type WE WF WA WL Voucher type WE or WN WE WA WL

4.2.1.2Ã

Tables T003 T003A T003M T003T Voucher types Voucher types for books with counterbalancing Procedure types for SAPMM07M/SAPMM07I Voucher type texts

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4.2.1.3Ã

Reports ROOKMB10 Materials management voucher types ROOLMB11 Voucher types / Numbering circuits, goods movements ROOLMB12 Voucher types / Numbering circuits, goods receiving ROOLMB13 Voucher types / Numbering circuits, inventory RSEMBNKR List of numbering circuits (NRV tables) RSM56000 Display numbering circuit buffer

RSNROBUF Buffer numbering circuit objects RSNRODS1 Display buffering information of numbering circuit objects RSSNRODSP Display buffering information of numbering circuit objects RSSNR0T1 Consistency checking and repair of numbering circuit intervals

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4.2.1.4Ã

Movement type Materials movements are distinguished by a three-digit key, the movement type. Among other things, the movement type controls the screen layout, the adjustment of inventories, account allocation for cost calculation, and account tracking for adjusting the financial record keeping.
@‘h€ƒyr†Ã‚sÃt‚‚q†Ã€‚‰r€r‡†ÃhqÀ‚‰r€r‡Ã‡’ƒr†)

H‚‰r€r‡Ã‡’ƒr

B‚‚q†Ã€‚‰r€r‡

101 104 122 201 221 231 241 251 261 291 321 551 321 451 453 501 511 521 561

Goods receiving for ordering Goods receiving blocking status for ordering Return delivery to suppliers Goods outflow (WA) to cost centers Goods outflow to project Goods outflow to customer order Goods outflow to factory Goods outflow to sales Goods outflow to order Goods outflow for all account allocations Release from quality checking Goods outflow for scrap Release from quality checking Returns from customers Inventory to inventory transfers Goods receiving without order No cost delivery Internal goods receiving without manufacturing order Inventory taking

Outflows of goods are handled in the SAP system through planned and unplanned reservations. A reservation is intended to ensure that a material is available when it is needed. A distinction is made between automatic (system-generated) and manual reservations. Automatic reservations cannot be handled directly by the user.

4.g.2.1. global Fixed account table – business area apportionment Account tracking – Governing accounts Rules for fixed account tracking Account tracking for balance sheet transfer Description of the procedure key Groups of procedure keys Description of procedure groups Movement type Movement type. image selection Inventory types and their development Fields in the quantity string Help texts relating to movement type Account allocation fields in field selection Booking string: quantity Next movement type . or through restoring orders. this method is advantageous given the greater time lag between the restoring booking and the physical performance of restoring the materials. Since materials that are on the move owing to restoring (restoring inventory) can be monitored only in the two-step process. If the usefulness of a material changes. authorizations are required in this scenario for both the issuing and receiving plants. a transfer must be done between the different types of inventories (T156C) (e. Material to material transfers assume that both materials are tallied using the same warehouse quantity units.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ%! Restoring can be handled in a one-step or a two-step process. However. The advantage of the one-step is that the „outflow of goods“ from the issuing center and the „receipt of goods“ at the receiving center can be booked in a single step.5à Tables T030 T030A T030B T030C T030G T030K T030R T030U T030W T030X T030Y T156 T156B T156C T156F T156H T156K T156M T156N Fixed account table Procedure key and allocation to groups Fixed booking key Fixed account table. release from quality checking).

reservations.2. texts Groupings of quantity units Texts on dimensions Evaluation of movements by warehouse type Evaluation of movements of materials by warehouse type RM07MGR1 Statistics on goods movements RM07MGR Statistics on goods movements RM07RKON Reservations for account allocation RM07RMAT Display reservations for materials ROOLMB14 Manual account allocation for goods movement ROOLMB15 Reports or recommendation values. material movement .6à Reports RLT10010 RLT10050 Movement type: quantity/value booking Movement type text Availability table Booking string: values Procedure key modification Measurement units Allocation of external 3-digit – internal measurement unit Allocation of external 6-digit – internal measuring unit Dimensions ISO codes for measurement units ISO codes for quantity units.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ%" T156S T156T T156V T156W T156X T006 T006B T006C T006D T006I T006J T006M T006T 4.1.

a material position can be provided only according to a valuation method in the inventories. . even if no invoice is yet available. Exception: If received goods are booked in the goods receiving blocked inventory. This means that it is not the invoice. a value-based adjustment of the inventory takes place in addition to the quantity-based adjustment for the material. In other words. the price governance letter „V“ is used. For a valuation at the average escalation price.9à Parallel nature of inventorying and valuation Although at the time the goods are received or are entered into the warehouse a warehouse employee books only quantities into the SAP system.8à Report RM03TD02 data Managing the material master data set: Displaying administrative 4. 4.2. The fields of a material master data set that are relevant for this purpose are the valuation price.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ%# 4. and thus also for valuing the service of the goods. the goods are directed to the order history only in the goods receiving blocked inventory status. In these cases. The price governance reference letter „S“ stands for the standard pricing procedure. The material value is determined at the plant level. through which all quantity movements are valued with a single „fixed“ valuation price in a materials master data set. Inventory amounts are always handled and valued in warehouse quantity units.1. but initially the order price that is used for establishing the price of the material. the agreed order position price is determined for the appropriate order. and the valuation procedure. the „price governance“.2.1. its allocation to a material account group. However. while other segments clearly contain movement data. the recalculation of the average escalation price in the V price field of the material master data set is handled in the same way as the adjustment of the order (open order quantity) and the order obligation. the inventory remained unchanged.2. on the basis of the order price. and is sent along to the goods receiving/invoice receiving offset account (WE/RE account). One key element to note is that data in the A segment is generally master data (the material consumption account is indicated here. That means that an average escalation price or a standard price always applied for the warehouse quantity unit indicated in the material master data set.7à Materials master data set All necessary external and internal information is stored in the materials master data set. during the plausibility check upon receipt at the warehouse. for example).1.

and the goods receiving/invoice receiving offset account is debited by that amount. the booking of the goods receiving offsets the goods receiving/invoice receiving offset account. and to allocate it to the appropriate balance sheet items. or the invoice receiving for an order can first be recorded. A corresponding function is included in invoice verification.2à Goods receiving/invoice receiving offset account The goods receiving/invoice receiving offset account is an intermediate account between the inventory account and the creditor account. the booking offsets the invoice. In the first instance.e.2. In booking the receipt of goods. in order to incorporated it as „goods in transit“ or „invoice in transit“.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ%$ 4. the balance is not offset in the good receiving/invoice receiving account. among other things. . the system waits for an additional receipt of goods or an additional invoice that offsets that balance.. i. in which the goods receiving can first be recorded. By booking the receipt of goods. through the goods receiving/invoice receiving offset account. The goods receiving/invoice receiving account must be maintained at regular intervals. the system performs the following account movements: The value of the delivery is credited to the inventory account (net order price * quantity of gods received). in the second instance. With the booking of the with the corresponding goods receiving or invoice receiving. the goods receiving/invoice receiving offset account must be balanced manually. If a later invoice or goods receiving remains outstanding. the balance is then offset in the goods receiving/invoice receiving account to the debit of the creditor account. the recalculation of the average escalation price is handled at the level of the material master data set and the order obligation is adjusted. The detailed information on the goods receiving/invoice receiving offset account is needed as of the balance sheet date. If that remains outstanding.

the inventory account can only be credited or debited with the invoice difference for the actual inventory (inventory * price difference). this booking is handled in the „expenditure from price difference“ account.2.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ%% 4.1à Tables T169 T169W Transaction governance. the inventory account can only be charged or credited only in accordance with the actual inventory.2.2. the total must be reduced (lower invoice) or increased (higher invoice price) during invoice verification. If the material inventory is smaller than the invoice quantity. For materials with a standard price. Invoice verification/ valuation Booking strings (values) for SAPMM08R 4. the remaining amount is booked in a price difference account. The following must be noted in terms of booking: For materials with an average escalation price.2.2à Reports RFWERE00 Analysis of goods receiving/invoice receiving offset accounts and statement of profits tax RM07MSAL Goods receiving/invoice receiving balance list SAPF123W Machine balancing of goods receiving/invoice receiving accounts RMCBBW00 Overall analysis of inventory values RMCBBW10 Hit list of inventory values 4. .2.3à Handling price differences Since the material was charged according to the order price when the goods were received.2. if there is a difference in the invoice price.

additional invoices are expected for that order.g.2. by returning excess goods received to the creditor. the goods receiving/invoice receiving balance must be offset. invoice verification/ valuation Booking string: invoice verification Notifiable order appendix types Invoice verification: verification of order amounts Tolerance threshold key Transaction-dependent recommendation values: invoice 4. If the quantity of goods received is greater than the invoice quantity.2.5à Handling differences in quantity When there are differences in quantity between goods receiving and invoice receiving for an order.4à Tables T169 T169A T169B T169D T169E T169F verification T169G T169K T169O T169P T169S T169V T169W T169X Tolerance thresholds: invoice verification Recommendation values: account management Accounting block: fields to be excluded in invoice verification Invoice verification parameters Tolerance threshold key Recommendation values: invoice verification Booking strings (values) for SAPMM08R Procedure texts for invoice verification Transaction governance. e. As a general rule. additional receipts of goods are expected for that order. If there are not further receipts of goods or invoices for the order. a balance shows up in the goods receiving/invoice receiving offset account: If the invoiced quantity is greater than the goods receiving quantity. through which the balance will be offset. through which the balance will be offset.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ%& 4. the goods receiving/invoice receiving account is balanced .2. or by directly offsetting the goods receiving/invoice receiving offset account.2. discounting the invoice.

• Materials with a standard price Counter-booking is handled in an expense or earnings account. The offset booking of the goods receiving/invoice receiving offset account corresponds to the booking that was performed when the invoice was recorded for the order. only the inventory actually on hand is proportionally credited or debited. . If the material inventory is smaller than the amount to be offset. • Materials with an average escalation price: Reverse entry is made in the inventory account. the residual amount is booked in an expense or earnings account. unless there is no inventory coverage.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ%' periodically or at the end of the fiscal year. • Allocated orders Counter-booking is handled in the cost or fixed-asset account in which the invoice was booked.

the final delivery marker must be set. no over-deliveries are permitted.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ%( 4. The system does not issue any warning messages. In the order position. A goods receiving quantity that falls below the under-delivery tolerance threshold is interpreted as a partial delivery. The system does not issue any warning message. will not be accepted by the system. the following data can be used in the order: • Unlimited marker If this marker is set. it is also possible to enter a percentage tolerance for under-delivery.3à Under-delivery/Over-delivery Under-deliveries are essentially permitted in the standard system. The system issues an error message in cases of over-delivery. In the standard system. If the under-delivery is not a partial delivery. and is accepted. If the under-delivery falls below the tolerance threshold. • Over-delivery tolerance threshold An over-delivery percentage can be entered in ordering. the system does issue a warning message. but a final delivery.2. unlimited over-deliveries are permitted. . If over deliveries are to be permitted. An amount of goods received that is larger than the ordered quantity plus the over-delivery tolerance value.

but the outstanding order quantity is not reduced. the material voucher serves merely as a report on the receipt of the goods. ‘Order to blocked inventory’). because the regular goods receiving procedure has not occurred. neither the total evaluated inventory nor an inventory type is adjusted. For material voucher positions that are booked in goods receiving blocked inventory. The effects of booking received goods in the goods receiving blocked inventory format are as follows: • Issuance of the material voucher: If the entire delivery is booked in goods receiving blocked inventory. they are recorded in „goods receiving blocked inventory“ (supplier certification is missing. No bookkeeping voucher is issued. quality testing is required.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ& 4.4à Goods receiving blocked inventory If deliveries are accepted subject to reservation.).2. . The goods receiving blocked inventory advances to the order history. etc. • Adjustment in ordering: The quantities booked in goods receiving blocked inventory are adjusted in the order history. • Adjustment of the inventory: When goods are received in goods receiving blocked inventory. • Adjustment of the inventory account: No values are booked in accounts. no booking lines are generated. but are merely maintained in the order history (movement type 103. Quantities booked in the goods receiving blocked inventory status are not directed into the inventory.

and. and the difference in additional supply costs. the total value of gods received. the value of goods received and the face amount of invoice in domestic currency for additional supply costs. the face amounts of invoice in domestic currency and.5à Goods receiving/Invoice receiving balance lists The report compares the quantity and value of goods received for an order to the quantity and value of the invoice received for that order if the balance of the quantities is not equal to zero. display summary page. order quantity. the additional supply costs for all selected purchasing vouchers can be indicated by supplier. and per purchasing organization. the quantities received.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ& 4. order price quantity unit. invoice amount. if available. material. this summary page displays the difference in value of goods received and the face amount of the invoice in domestic currency. net price. you will obtain the following lists (environment -> balance statement -> goods receiving/invoice receiving balance list. . order quantity units. Depending on the settings for the scope of the list. if available. On the summary page. by purchasing group. The following details are presented for each purchasing voucher position: position number. quantity received. As additional information with respect to the basic list. goods received value. price unit. RM07NSAL): • • • basic list summary page The selected purchasing vouchers are given by supplier in the basic list. the invoice quantity. The report is used to provide an overview of the goods and invoices received when purchasing vouchers are not counterbalanced.2. face amount of invoice in the domestic currency. You can perform various functions starting with the basic list: • • • display order history.

the inventory account that is booked with the indicated materials during movements of goods is determined. you open up a dialogue window in which the balance for the selected inventory account is displayed. and the variation between the two sums is evaluated. for each inventory account. and the differences in the two sums are displayed. you obtain the sum of all inventory account in the selected accounting field. . • Accounting field balance By positioning the cursor on the desired accounting field and Process -> Accounting field balance. you can activate a variety of functions: • Inventory account balance By positioning the cursor on the inventory account and Process -> Inventory account balance. the cumulative sum of the inventory value of all selected materials that are booked in the selected inventory account is compared to the reported balance. You can select the following balance values: • • • balance for the current period balance for the previous period balance for the previous year The basic list provides an overview. The balance values are listed by accounting field or inventory account. From this list. If several materials are indicated.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ&! 4. The balance of the inventory account is compared to the inventory value of the indicated material. of the inventories of the indicated material at the plant and warehouse level. and the variations in the two sums are evaluated. and the positive or negative variations are evaluated. and the sum of all inventory values of the materials in the cumulative inventory accounts. These sums are compared once again. The balance of the inventory account is compared to the inventory value of the indicated material.2. In addition. the total inventory quantity and the total inventory value at the plant or warehouse level can be displayed for one or more materials.6à Inventory value list With this report (environment -> balance statement -> inventory value list).

such as consignment inventories or returns. Transfers are booked first.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ&" 4. This means that a transfer order and a shipping order are prepared. or is can be moved to another storage place within the warehouse.7à Restoring Restoring in the material management system include physical transportation of materials from: • • • • plant to plant storage area to storage area (internal movements) warehouse to warehouse storage location to storage location 4.2. in the company’s own inventory to change the owner of materials in the warehouse.2. for example. the material can either remain at its original storage location. then carried out. . When a transfer order is processed.8à Transfer Transfer is done primarily for the following reasons: • • to release inventories from quality control to available inventory to transfer inventories from blocked inventory status to quality control inventory status • to transfer in-house inventory from available status to quality control inventory • • • • to change the material number of a specific material to perform a charge separation for available materials to transfer special inventories.

Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ&# Gv†‡Ã‚sDžh†sr…Â…qr…† Booked transfers can be displayed as a list of transfer orders. or completely or partially completed – can be displayed. . as well. Transfer orders – whether open-ended.

Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ&$ 4.2.9à Qualifications The following qualifications are contained in the scope of the product distributed: MM_B Materials Management – Inventorying and Stocktaking Stocktaking: booking discrepancies at the plant Stocktaking: Stocktaking voucher at the plant Stocktaking: counting and booking discrepancies at the plant M_ISEG_WZL M_MBNK_ALL M_MRES_BWA M_MRES_WWA M_MSEG_BMB M_MSEG_BWA M_MSEG_BWE type M_MSEG_BWF M_MSEG_WMB M_MSEG_WWA M_MSEG_WWE M_MSEG_WWF M_SKPF_VGA M_SKPF_WRK Goods receiving for orders: movement type Materials vouchers: plant Goods movements: plant Goods receiving for purchase ordering: plant Goods receiving for orders: plant Sample audits for stocktaking: procedure Sample audits for stocktaking: plant Stocktaking: counting at the plant Materials vouchers: managing the numbering field Reservations: movement type Reservations: plant Materials vouchers: movement type Goods movements: movement type Goods receiving for purchase ordering: movement M_ISEG_WDB M_ISEG_WIB M_ISEG_WZB MM_D Materials Management – Materials Planning M_MIPA_ORG Disposition of arrears M_MTDI_ORG Organizational levels of material needs planning M_PLAF_ORG Organizational levels for processing target orders .

Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ&% MM_G Materials Management – Master Data M_MATE_BUK M_MATE_LGN M_MATE_PER M_MATE_STA M_MATE_VKO M_MATE_WRK Master data: accounting field Master data: inventory number Master data: allow reverse entries/ postpone periods Master data: Management status Master data: Sales organization/ Distribution path Master data: plant MM_E Materials Management – Purchasing M_ANFR_BSA M_ANFR_EKG M_ANFR_EKO M_ANFR_WRK M_ANGB_BSA M_ANGB_EKG M_ANGB_EKO M_ANGB_WRK M_BANF_BSA M_BANF_EKG M_BANF_EKO M_BANF_FRG M_BANF_WRK M_BEST_BSA M_BEST_EKG M_BEST_EKO M_BEST_WRK M_EINF_EKG M_EINF_EKO M_EINF_WRK M_LFM1_EKO M_LIBE-EKO Voucher type in inquiry Purchaser group in inquiry Purchasing organization in inquiry Plant in inquiry Voucher type in offer Purchaser group in offer Purchasing organization in offer Plant in offer Voucher type in order requisition Purchaser group in order requisition Purchasing organization in order requisition Release code in order requisition Plant in order requisition Voucher type in order Purchaser group in order Purchasing organization in order Plant in order Purchaser group in purchasing info set Purchasing organization in purchasing info set Plant in purchasing info set Purchasing organization in supplier master data Supplier assessment .

2.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ&& M_LPET_BSA M_LPET_EKG M_LPET_EKO M_LPET_WRK M_ORDR_EKO M_ORDR_WRK M_QUOT_WRK M_RAHM_BSA M_RAHM_EKG M_RAHM_EKO M_RAHM_WRK V_KONH_EKO Voucher type in delivery schedule classification Purchaser group in delivery schedule classification Purchasing organization in delivery schedule classification Plant in delivery schedule classification Purchasing organization in order book Plant in order book Plant by quotas Voucher type in skeleton agreement Purchaser group in skeleton agreement Purchasing organization in skeleton agreement Plant in skeleton agreement Purchasing organization in master data condition MM_R Materials Management – Invoice Verification M_RECH_BUK M_RECH_SPG Invoices: accounting field Invoices: grounds for blocking MM_W Materials Management – Valuation and Account Tracking M_LIFO_MLY M_NIWE_BIL Authorization for LIFO assessment Authorization for determination of cost or market value whichever is lowest 4.10à Reports RM07ICHI Stocktaking: List of stocktaking positions with missing material voucher position RM07ICHK Correction program for stocktaking vouchers with incorrect cancellation status RM07ICHM Stocktaking: list of inventory positions with incorrect quantities in the material voucher RM07ICN1 Batch input: set up stocktaking vouchers for cycle counting RM07IDOC Display inventory overview RM07IE31 Batch input: set up stocktaking vouchers for customer orders RM07II31 Batch input: set up stocktaking vouchers for standard inventory RM07II32 Batch input: block material for stocktaking .

Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ&' RM07II34 RM07II37 RM07II38 Batch input: record numbering with voucher reference Batch input: write off discrepancies Batch input: record numbering with voucher reference. range: selection RMCBUH00 Overall analysis. warehouse floor set: selection RMCBBW10 Hit list. inventory values: selection RMCBLH10 Hit list. handling frequency: selection RMCLAEBL Display modification vouchers RMCTAEBL Display modification vouchers RMIMWAKA Goods catalogue for the Federal Statistical Office RMINTRA0 INTRASTAT reports RMKKVZ00 Supplier list. purchasing RMLIFO00 Valuation at the individual level . book discrepancy RM07IINV Display stocktaking date for the material RM07IK31 Batch input: Set up stocktaking vouchers for supplier consignment RM07IMAT Display stocktaking vouchers for the material RM07IO31 Batch input: Set up stocktaking vouchers for supplier ordering RM07IV31 Batch input: set up stocktaking vouchers for customer loaned goods RM07IW31 Batch input: set up stocktaking vouchers for customer consignment RM07MAAU Evaluation for material voucher archiving RM07MBST Warehouse inventory list: balance statement RM07MCHB Inventorying: balancing of inventory value for materials that must be evaluated RM07MCHV Display charge utilization certificate RM07MGR1 Statistics on goods movements RM07MGRU Statistics on goods movements RM07MKBS Display consignment inventories RM07MLBS Display warehouse inventories for the material RM07MMAT Display material vouchers for the material RM07MSAL Goods receiving/invoice receiving balance list RM07MSTO Display discounted material vouchers RM07RMAT Display reservations for the material RM07SINV Display sample audit stocktaking RM07SVOR Batch input: sample audit stocktaking RM07XFLA Set clearing status in stocktaking voucher header RM08MMAT Display bookkeeping vouchers for the material RMCBAB10 Hit list of consumption values: selection RMCBBS10 Hit list. book discrepancies RM07II39 Batch input: record numbering without voucher reference RM07II40 Batch input: record numbering without voucher reference. shelf warmers: selection RMCBRW10 Hit list.

field modifications RMMMBEST Inventory overview: accounting field/plant/warehouse/ charge RMMMDE00 Clear all materials from current client RMMMFELD Display field history from MM13 (modification voucher history) RMMMMIN00Reset movement data. master data set.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ&( RMLIFO02 Valuation at the pool level RMLIFO06 Cost or market value whichever-is-lowest adjustment RMLIFO10 Presentation at the individual level RMLIFO12 Presentation at the pool level RMLIFO20 Perform group formation RMLIFO21 Check group formation RMLIFO22 Display group formation RMLIFO30 Build basis layer RMLIFO32 Form voucher extract RMLIFO34 Outside data entry for LIFO valuation RMLIFO36 Accept cost or market value whichever-is-lowest prices RMLIFO39 Display modification vouchers RMLIFO50 Clear layer RMM00C02 General overview. current client RMMMLISTList display of all modified fields from MM13 (modification voucher history) RMMMPERI Period postponement. master data set RMMR02ST Release blocked invoices: status information RMMVRZ00 Materials list RMNIWE00 Lowest-value calculation: market prices RMNIWE10 Lowest-value calculation: range RMNIWE20 Lowest-value calculation: marketability RMNIWE80 Lowest-value calculation: market price variance RMNIWE90 Lowest-value calculation: balance sheet value per account RMOT001K Allocation of the plants to accounting fields RMPPOS01 List of previously recorded vouchers RMUTDELE Delete program -> do not start RMVKON00 Obligations from consignment warehouses .

external processes to internal processes Allocation.2. governance accounts Rules for fixed account tracking . manual processes to internal processes Text tables for T028H Voucher type for booking rule Fixed account tables Procedure key and allocation to groups Fixed booking key Fixed account tables.10.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ' 4. global Account tracking for price differences in open items Account tracking for price differences in open items Reserve method for bad debt Fixed account tables – distribution by business area Account tracking for price differences in open items Account tracking.1à Tables TZUN TZUNT T000 T001K T001L T001P T001W T001Y T003 T003A T003T T004 T023 T023T T024 T024B T024D T024E T025 T025T T028E T028G T028H T028I T028J T030 T030A T030B T030C T030D T030E T030F T030G T030H T030K T030R Rules for constructing the ALLOCATION field Description of the allocation rules Clients Valuation field Storage location Plant/Factory area Plants/Branches Valuation levels for LIFO inventory valuation Voucher types Voucher types for books with adjustments Voucher type texts List of account schedules Goods groups Descriptions of goods groups Purchasing groups Credit management: processor groups Materials managers Purchasing organizations Valuation classes Descriptions of valuation classes Text tables for T028D Allocation.

However. goods receiving.2à Incorrect delineation of time periods If recording of good movements and invoices is not handled in the correct period. and other documents). 4. the online inventories no longer correspond to the physical inventories. there could be a „base set“ of completed – but not officially ended – transactions. or is not available in a timely manner.3 Risks If the record of warehouse management processes is not available. From the organizational methods of purchasing. 4. the annual accounts could be presented inaccurately. risks may arise in relation to valuation at year’s end. If the goods receiving/invoice receiving account is not handled at all.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ' 4. problems may occur in invoice verification. inventory management. and if the bookings done through account tracking result in the formation of reverse entries in the goods receiving/invoice receiving offset account. extensive deceitful transactions are possible. because of a lack of bills of delivery (goods receiving and outflow certificates. invoice verification. financial accounting.3. deliveries are not made. In extreme cases.1à Inadequate separation of functions If the authorization system and prior and subsequent manual controls are not in place. or in production order accounting. and invoices are not prepared. there is no risk of presenting an excessively high or low result. these time lags result in the collapse of important operational functions. the activities in purchasing.3. for example. and if the existing level of separation of functions does not guarantee the effectiveness of the internal control system. or not in a timely fashion. if complete and timely recording of processes based on orders does take place (materials receiving for orders. and inventorying take place independently of each other. with respect to entering inaccurate order prices. for example. . which leads to including inaccurate facts in the annual accounts. because given the large time discrepancies between physical and data processing records of materials movements. Thus. or invoice receiving for orders). commission lists.

4. materials.3.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ'! 4.4à Goods outflows risks In the area of goods outflows. errors in the use of movement types may not be discovered. the following risks in particular are possible: • • • • inaccurate entry of prices and payment conditions inaccurate credit limit verification insufficient adjustment and control system reservation errors. and inventories may be correctly allocated and evaluated.3. . orders. under certain circumstances: • • • goods receiving blocked inventory may be inaccurately processed (acceptance of deliveries subject to reservation without firm warehousing). etc. etc. or may be discovered too late.3à Inadequate manual control and adjustment procedures If there are inadequate preliminary and subsequent control and adjustment procedures.

Th€ƒyrÃhˆqv‡Ãv†ƒrp‡v‚Ã‚sɂˆpur…†ǂÃqr‡r…€vrÐur‡ur…Çur…rÃh…rÃh’Ãshv…y’ yh…trÇv€rÃyht†Ãir‡rrÃ…rp‚…qvtÃhqÃr…s‚…€vtÃhÀ‚‰r€r‡Ã‚sÃt‚‚q†Ã9‚r† ‡urÐh…ru‚ˆ†rÃhq€vv†‡…h‡‚…ÂsÇurÃpr‡…hyÃt‚‚q†Ã…rprv‰vtȁv‡Ãƒ‚†‡Ã‡urÃt‚‚q† …rprv‰vtÃs‚…ÇurÅr„ˆr†‡vtÃqrpr‡…hyv“rqÐh…ru‚ˆ†r†Ãqv…rp‡y’Ãs‚…Æv€ƒyvsvph‡v‚ …rh†‚†Ãs‚…Ãr‘h€ƒyr4ÃDÃtrr…hyÃv†Ã‡urr†‡rƒÃ‚…ǐ‚†‡rƒÃƒ…‚pr††Ãˆ†rqÃs‚… …r†‡‚…vt4Ã9‚ÇurÐh…ru‚ˆ†rƒr…h‡‚…†ÃvÃhqqv‡v‚Ã‡‚Çur††vivyv‡’Âs†‡vt „ˆh‡v‡vr†Ãs‚…À‚‰r€r‡†Ã‚sÃt‚‚q†Ãhy†‚Ãuh‰rÇurÅvtu‡Ã‡‚†‡Ã‡urv…ÉhyˆrÃh† ryy4ÃA‚…ÐuvpuÀ‚‰r€r‡Ã‡’ƒr†Ãv†Ã‡ur…rÃh††vivyv‡’ÂsÃt‚vtÃir’‚qÇur hpp‚ˆ‡Ã‡…hpxvtÃhˆ‡‚€h‡vphyy’Ã…rp‚€€rqrqÃi’Çurƒ†‡r€ÃhqÃr‡r…vt h‚‡ur…Ãhpp‚ˆ‡Ãhyy‚ph‡v‚4 The monthly warehouse movements must be squared with the accounts in the general bookkeeping department. and in a timely manner. The results of this examination are used as the basis for assessing the regularity of the stocktaking process and the valuation of the finished and unfinished products. 6Ãuryƒ)ƈ€€h…’ÃhqÃihyhprÃyv†‡†Ãp‚qr†rqÉhyˆh‡v‚†Ã‚sÀh‡r…vhyÀ‚‰r€r‡† 4. and inhouse offsetting in particularly should be examined. and how the settlement of the obligations arising from such deliveries has been handled in the books. Th€ƒyrÃhˆqv‡Ã†„ˆh…vtÂsÃqryv‰r…’Ã…rprvƒ‡Ãvs‚…€h‡v‚Ãv‡uÇurÃt‚‚qÅrprv‰vt i‚‚xxrrƒvtÃr‡…vr†Ã€hqr 6†Ã‚sÃihyhprÆurr‡Ãqh‡rÆh€ƒyrÃhˆqv‡Ã†„ˆh…vtÂsÇurÃpˆ‡Ã‚ssÃhÃuryƒ)Årƒ‚…‡Ã‚s ‡urÁˆ€ir…vtÃsvryqƇh‡ˆ†Ã‚sÇurÅryr‰h‡Ã‰‚ˆpur…Ç’ƒr†Ãt‚‚q†Ã…rprv‰vtt‚‚q† ‚ˆ‡sy‚†Ãr‡pÃh†Ã‚sÇurÃihyhprÆurr‡Ãqh‡r The regularity of warehousing management.1à Under-delivery/Over-delivery Are the customizing settings appropriate for handling under-deliveries and overdeliveries? Are the customizing settings adequate for automatically reporting end delivery markers (setting tolerances)? . internal flows of materials. The squaring and control process must be recorded and examined for error processing.4.4 Auditing steps The auditing organization of goods receiving and invoice verification must determine whether all goods received have been recorded completely.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ'" 4. correctly.

3à Goods receiving/Invoice receiving offset account The goods receiving/invoice receiving offset account must be checked for machine-triggered inventory value corrections and the open positions as of the balance sheet date.4. Specifically.2à Goods receiving blocked inventory Is goods receiving blocked inventory processed in a timely manner? Ch‰rÃhÃ‚‰r…‰vrÃ‚sÇurÃv‰r‡‚…vr†Ãh†Ã‚sÇurÃihyhprÆurr‡Ãqh‡rÃqv†ƒyh’rqÃs‚… ’‚ˆ Are the goods receiving blocked inventories correctly resolved in the annual accounts. and allocated to the appropriate period? 4.4.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ'# Are they implemented or authorized by the responsible division? D†ƒrp‡Ã‡urǂyr…hprÇu…r†u‚yq†ÃhqÃhhy’“rÇurǂyr…hprÇu…r†u‚yqÆr‡ÃvÃ‡ur %(Çhiyr† 9r‡r…€vrÇurÃt…‚ˆƒ†Ã‚sÃvqv‰vqˆhy†Ãu‚Ãuh‰rÃpˆ†‡‚€v“vt…Àhhtr€r‡Ã…vtu‡† s‚…Çur†rÇhiyr† 4. 9r‡r…€vrÇurÃhpp‚ˆ‡Ãˆ€ir…†Ã‚sÇurÃt‚‚q†Ã…rprv‰vtv‰‚vprÅrprv‰vtÂss†r‡ hpp‚ˆ‡†ÃCh‰rÇurÃhpp‚ˆ‡†Ãqv†ƒyh’rqÃs‚…Ã’‚ˆÃh‡Ã‡urDžhssvpÃh’€r‡Ãyr‰ry D†Ã‡urÃihyhprÃh†Ã‚sÇurÃihyhprÆurr‡Ãqh‡rÃv†Ã9HÃ0Ãuh†Ã‡urÃp‚€ƒh’Ãqv‰vqrq ‡urÃt‚‚q†Ã…rprv‰vtv‰‚vprÅrprv‰vtÃihyhpr†ÃhqÃhppˆ…h‡rÉr…vsvph‡v‚Ã‚s Ät‚‚q†ÃvÃ‡…h†v‡³Ã‚…ÃÄvp‚€vtÃv‰‚vpr†Ã†‡vyyˆ‡†‡hqvt³4 6…rÂyqDžh†hp‡v‚†Ã†‡vyyÅr†r‡rqÃvÃ‡urÃt‚‚q†Ã…rprv‰vtÃv‰‚vprÅrprv‰vt ‚ss†r‡Ãhpp‚ˆ‡†Ã‡uh‡Ãhpp‚…qvtǂÇurÃshp‡†Ã‚sÇurÀh‡‡r…Æu‚ˆyqÃhy…rhq’Ãuh‰r irrÃp‚€ƒyr‡rqÁ‚…€hyy’4ÃU‚Ér…vs’Çuv†ȆrÇurÃvqv‰vqˆhyÃv‡r€Ãƒ…r†r‡h‡v‚Ã‚s ‡urÃt‚‚q†Ã…rprv‰vtv‰‚vprÅrprv‰vtÂss†r‡Ãhpp‚ˆ‡†Ã‚…ÇurÃt‚‚q† …rprv‰vtv‰‚vprÅrprv‰vtÃihyhprÃyv†‡Ã6…rÇur…rƇvyyÃt‚‚q†Ã‚…Ãv‰‚vpr† vp‚€vtÃs…‚€Ãƒ…v‚…Ã’rh…†Ãs‚…ÐuvpuÁ‚Ã…r‰r…†rÃr‡…’Ãuh†ÃirrÃr‡r…rq4 8hÃ‡urÃt‚‚q†Ã…rprv‰vtv‰‚vprÅrprv‰vtÂss†r‡Ãhpp‚ˆ‡†Ãir†‡rqy’ hˆ‡‚€h‡vphyy’…Ãh…rÀhˆhyÃr‡…vr†Ãƒr…€v‡‡rq4ÃU‚Ér…vs’Çuv†Ãuh‰rÇurÃhpp‚ˆ‡ †rt€r‡Ãt‚‰r…hprÃqv†ƒyh’rqÃs‚…Ã’‚ˆÃs…‚€Ã‡urÀh†‡r…Ãqh‡hÆr‡ 9‚r†Ã‡urÃp‚€ƒh’ȆrÃhÀhpuvrÁˆ€ir…vtłprqˆ…rÃs‚…ÇurÃt‚‚q† …rprv‰vtv‰‚vprÅrprv‰vtÂss†r‡Ãhpp‚ˆ‡†4 . the management of accounts must also be analyzed critically.

521 (stock receipt without manufacturing order). it is important to verify whether goods movements of the movement types 561 (inventory acceptance from the old system). If there are traffic figures for movement type 561. check the account tracking and its history for the related procedure keys/movement types. but as order-neutral entries. how the traffic figures in offset accounting have changed in the reporting period.5à Audits of goods outflows By verifying the outflows of goods.00 as of the balance sheet date. ask why they were used. and determine.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ'$ 6…rÀhˆhyÃr‡…vr†Ã€hqrÃrtÃs‚…Ãr€r…trp’Ãv‰‚vpr†Ãv‡u‚ˆ‡Ã‡urƒƒ‚…‡ˆv‡’ s‚…Ãhyy‚ph‡v‚ÃhqÁˆ€ir…vt4ÃCh‰rÇur’ÃirrÃ‚ss†r‡Ã‡u…‚ˆtuÃhqqv‡v‚hyÀhˆhy r‡…vr†4 6…rˆ‡†‡hqvtłpr††r†ÃvÃ‡urÃt‚‚q†Ã…rprv‰vtv‰‚vprÅrprv‰vtÂss†r‡ hpp‚ˆ‡†Ãh‰hvyhiyrÇurÃih†v†Ã‚sÃh’Ãpˆ†‡‚€v“vtÃr……‚…†ÃrtÃur…rÇu…‚ˆtu qv†p‚ˆ‡Ãr‡Ãr‡…vr†Ãqv†p‚ˆ‡Ãqrqˆp‡v‚ÃurÃ‡urÃv‰‚vprÅrprvƒ‡Ãv†Ãƒ‚†‡rq qr†ƒv‡rÃt…‚††Ãt‚‚q†Ã…rprv‰vtɂˆpur…Ç’ƒrÃhqÃhÃyhpxÂsÃqrsvv‡v‚4 9‚r†Ã‡urǂyr…hprÇu…r†u‚yqÃs‚…Ð…v‡vtÂssÃt‚‚q†Ã…rprv‰vtÃv‰‚vprÅrprv‰vt hpp‚ˆ‡Ãqvssr…rpr†Ã†‡vyyÃsˆp‡v‚Ã‡…ˆy’Ãh†ÃhÇu…r†u‚yqÉhyˆrà p‚†vqr…hiy’Ãvp…rh†rqÇu…‚ˆtuÃpˆ†‡‚€v“vt4 È…Ãuh†Ãv‡Ãirr 4. For example.4. on the basis of these results. 501 (stock receipt without order). The balance of the offset account must show as DM 0. 4. . and others have been posted through the company. In any case. for example. a determination should be made as to whether all sold goods have been recorded in the active account. and whether corresponding charges have been posted.4à Movement types/Account tracking Have movement types been used that might escape the existing internal control system of the company? These sensitive movement types are present in those areas where. incoming goods are booked not on the basis of an existing order (which has gone through the ICS authorization path in the company).4. and check the procedures.

Which data should be archived or reorganized? Determination of the archiving cycle for the WM data. Test the archiving run or archiving program. 3. You can use these programs to clear the data base and to keep the data sets ready for future purposes. or organize the materials as follows: 1. 2.4. If optical archiving systems are used.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ'% The following specific verifications must be performed: • Verification of the coordination of delivery receipts and sales invoices from the viewpoint of whether each delivery resulted in an invoice. the following guidelines and recommendations should be followed: . the user must make the following decisions.6à Archiving concept Check to determine whether there is an archiving concept. Incorporate the program into the job operations. and whether it has already been implemented. The following data can be reorganized: • • • • • transport requirements (reorganization program RLREOB00) transport orders (RLREOT00) transfer orders (RLREOU00) stocktaking acceptance vouchers (RLREOI00) stocktaking histories (RLREOH00) In so doing. 4. There are several programs in the SAP system that archive vouchers from h…ru‚ˆ†rÀhhtr€r‡. and verification of posting of the claim and outflow of goods in the appropriate period voucher/handling of complimentary deliveries regularity of price breaks • • 4.

Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ'& • letter of the Minister of Finance. 1991. printed in Foreign Trade and Payments Ordinance [AWV] publication 08 506. regarding the use of optical storage plate systems in accounting. file reference number: IV A 7 – S 0317 – 5/91 dated July 8. . Foreign Trade and Payments Ordinance [AWV] publication 440 • The following areas must be examined in detail in optical archiving systems: • • accurate transfer of the original voucher to the storage medium accurate safekeeping of the storage media. 17f. pp.

In this area. and to payment transactions. In addition. as well as creditor bookkeeping and payment transactions). invoice verification. They must be checked to see whether they match orders and goods receipts or services. INVOICE VERIFICATION Objectives and requirements Invoice receipt and invoice verification are the bookkeeping and value counterparts of goods receiving and goods verification. and within divisions between invoice verification and purchasing. Only those invoices that correspond to ordered and delivered goods or services in the correct quantities under the agreed conditions should be paid. so that they and their consequences – involving payment operations in this instance. For reasons of regularity. as well. as in the preceding chapter. prices must be managed here. Complete. there are interfaces here with the creditor area. settlement). Since these are particularly sensitive areas in all businesses. and can be set in the system. Tolerances for variances are permissible. of through additional subsequently compensatory controls. must be integrated to the greatest extent possible with orders. and monitored separately. of course. In this context.g. in order to prevent inconsistency and redundancy. with corresponding consequences on representing authorizations in terms of the software. Therefore. When materials management. complete and accurate certification of claims and obligations is prescribed. Personnel with access to master data must be distinct from personnel with access to movement data. . Master data fields relevant for payment (such as information on the bank account and the party receiving payment indicated in the voucher) should be monitored according to the four-eyes principle. consistent and up-to-date creditor master data is essential handling and processing movement data accurately within operational functions (e. it is especially important that all variances be recorded. The integration of these two areas is an important requirement for software systems. avoid such separations of functions) should be reduced to a minimum. between master data administration and posting. in particular.g. is implemented. incoming invoices must be recorded in a timely fashion. as well – can be managed. Therefore. the division-specific responsibility for creating and managing the master data must be clearly regulated between bookkeeping and purchasing. Furthermore. the number of CpD accounts (which. and as was the case for goods receiving.1 INVOICE RECEIPT. special attention must be paid to the separation of functions and to the four-eyes principle (e. the foremost objectives and requirements are the same as those presented in the preceding chapter.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ'' 5 5.

or through an appropriate internal control system in master data management and invoice releasing. Payments should be made in a timely manner and taking discount deadlines into account. This can be realized either through controlling payment recommendation lists. provided that invoices are able to be posted not in an up-to-date manner. The four-eyes principle must be maintained for outflows of money. on the basis of verifications that have not yet taken place. .Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ'( SAP offers the ability to pre-record vouchers (in replacement of an invoice receipt book).

Items can be posted only if debit and credit amounts are the same. and to indicate the account connection. the average price of the material invoiced is corrected (if the price in the invoice varies from the order price).e. and to process credits. the person verifying the invoice has the opportunity to post the invoice in a CpD account. the role of invoice verification is to conclude the process of materials procurement. . and the system keeps track of those modifications. the data in the invoice/credit is recorded and stored in a voucher – but the voucher is not posted right away. By posting the invoice. reverse entries are provided manually by the person verifying the invoice. through the allocation numbers.).2. SAP offers to opportunity to pre-record an invoice or credit. Within invoice verification. If the differences fall within preset tolerance thresholds (T169 ff.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ( 5. and the order history and data on the payments to be made are adjusted in the system. to process invoices that do not originate in the materials procurement area. the system automatically generates an accounting line that posts the difference in a neutral expense or revenue account. For invoices that do not have any reference to an order. if these are present.2 5. If it happens that the supplier is not entered in the system. a great deal of information is already available. automatic postings are made for turnover tax. and the invoice. If there are variances between the order. the invoice cannot be posted. For invoices that relate to an order. SAP allows the invoice to be posted.1à SAP Facts Overview Within SAP materials management. If the variances are not permissible. discount offsets. Otherwise the invoice is automatically blocked. i. However. small differences can be tolerated through customized settings. and price variances. A pre-recorded voucher can be modified as often as desired. whether these be invoice discounts or rebates. and must be released in a separate work step (which is documented by a modification voucher). goods receiving. the system issues a warning for the user. so that the person verifying the invoice usually just has to enter the order number into the system to pull up the recommended value and the handling history from the system.

2. In the SAP system. order in units. the grounds for blocking the invoice depend on the amount of the invoice position. In net posting. For an order with an order price quantity. • ‰h…vhprÃvÃqrhqyvrÃiy‚pxvtÀh…xr…ÃU A variance in deadline comes about when the due date falls before the delivery date agreed upon in the order. If this ratio varies in the invoice from the ratio upon the receipt of the goods. the ratio of the quantities is established in order price quantity units and order quantity units. the material must be valued at the average escalation price. that quantity is referred to as the order price quantity (e. price in DM/kg). or in the order. For posting in the inventory account. The product of the amount of the invoice position and the days of variance serves as the basis for determining whether the invoice is blocked. During invoice verification. there is a variance in order price quantities. Discount agreements can be entered into the creditor master data.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ( Only when the final pre-recorded voucher is posted are the usual account movements and adjustments made. which is then displayed and can be overwritten.2à Reasons for blocking invoices Invoice verification distinguishes among four types of variance: • „ˆh‡v‡’Éh…vhprÃiy‚pxvtÀh…xr…ÃH The quantity indicated in the invoice varies from the difference between the quantity delivered and the quantity already calculated • • • ƒ…vprÉh…vhprÃiy‚pxvtÀh…xr…ÃQ The price indicated in the invoice differs from the price indicated in the order ƒ…vprÃhqĈh‡v‡’Éh…vhpr There is a variance in both price and quantity ‰h…vhprÃvÃ‚…qr…Ã…vprĈh‡v‡vr†Ãiy‚pxvtÀh…xr…ÃB If the price of an order related to another quantity unit than the order quantity. 5. as in gross posting.g. the system first accesses the order data. the ratio from the invoice is compared to the ratio from the order. variances such as a discount are posted in a price difference account. in the standard price. and are thus entered in the neutral result. the respective discount amount is credited directly to the account in which the cost is posted. If the invoice is received before the goods. because. (determined through voucher type). .

checks).2. The payment program reports unsettled items. An invoice for this material is blocked until the verification process has been successfully completed. If an invoice is posted before the goods are received. an advantage of this approach is that an invoice cannot be posted prior to the receipt of the goods. payment forms (e. the invoice is blocked if any verification procedure whatsoever has not been completed for the goods received. If several shipments of goods are received or one order position. It prints payment lists. . the invoice is blocked if the verification process for the related receipt of goods has not yet been completed. however. and supplies data for the payment support program. a verification process is performed for each shipment. and creates data supports (diskettes. So a distinction must be made in invoice verification between the following two cases: If a goods receiving-related invoice verification is provided for in the order. • Rˆhyv‡’Ér…vsvph‡v‚Ãiy‚pxvtÀh…xr…ÃD If quality management is active for a particular material. (In invoices relating to a delivery schedule. Therefore. and singles out which items must be paid. any receipt of such materials is posted in the quality verification inventory. there is not deadline verification because there is no clearly defined delivery date in the delivery schedule). and thus prior to quality verification.3à Payment program The payment program is designed so that both outgoing and incoming payments can be handled. it is recommended that work proceed on the basis of quality verification with goods receiving-related invoice verification. The exact time of payment is determined by the configuration of the payment program.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ(! Thus. Basically. The program generates payment vouchers. it pays items as late as possible without loss of discounts. it is not blocked for reasons of quality verification. lower invoice positions are granted relatively large differences in deadline. magnetic tapes). whereas higher invoice positions are allowed only very small differences.g. 5. These functions are supported for creditors and debtors alike. If this is not the case. In addition to accurately blocking received goods.

payment routes. since the account is used for several creditors. invoice verification Transaction governance. payment conditions. the system acknowledges the master data set for CpD accounts.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ(" 5. For creditors with one-time or infrequent invoicing.5à Tables TZUN TZUNT T066 T169 T169A T169B T169D T169E T169F Rules for constructing the ALLOCATION field Description of the allocation rules Dynpro selection. invoice verification/ valuation Booking string: invoice verification Notifiable order appendix types Invoice verification: verification of order amounts Tolerance threshold key Transaction-dependent recommendation values: invoice verification T169G T169K T169O T169P T169S T169V T169W T169X Tolerance thresholds: invoice verification Recommendation values: account management Accounting block: fields to be excluded in invoice verification Invoice verification parameters Tolerance threshold key Recommendation values: invoice verification Booking strings (values) for SAPMM08R Procedure texts for invoice verification .2. banking information. appropriate information is provided from the master data (name. address. The specific data must be entered when the invoice is recorded. and account governance data). 5.4à Creditor master data To ensure regular posting of invoices. No customer-specific data is stored there.2.

2.2.6à Reports RMMR02ST Release blocked invoices: status information SAPF123W Machine balancing of goods receiving/invoice receiving accounts RFBNUM10 Double-issued invoice numbers RFUMD001 Reorganization of discount offset accounts in OP management 5.7à Qualifications MM_R Materials Management – Invoice Verification M_RECH_BUK M_RECH_SPG Invoices: accounting field Invoices: grounds for blocking .Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ(# 5.

there is a risk of double payments (e. which makes information difficult to track. etc.g.3 Risks Without adequate protection of payment transactions through system plausibility and machine controls/squaring. account links). modifications of master data). . and make their way into the payment path. and without effective organizational preliminary and subsequent manual controls.g.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ($ 5. A lack of functional separation between alternate access to master data and movement data increases the risk of manipulations in creditor data (e. if it remains at all possible (see also Chapter 7. and manipulations (e. payment receiver. of if there is no squaring between the payment recommendation and the payment. If no controls are in place. D‰‚vprÉr…vsvph‡v‚ Without internal company regulations on invoice verification (four-eyes principle. posting and payment of copies of invoices or reminders). the company may suffer pecuniary loss owing to work errors and/or deceitful transactions. Qh’€r‡Ã…rp‚€€rqh‡v‚Ãyv†‡†ÃhqÃh’€r‡Ãyv†‡† Blocked invoices do not appear on the payment recommendation lists. 8…rqv‡‚…Àh†‡r…Ãqh‡hÆr‡† Incomplete or incorrect management of creditor master data sets can result in costly reworking. release procedure). invoices may be released unnoticed after the recommendation list is released. separation of functions. The use of CpD accounts in payment transactions involves additional risks based on the open-ended input potential in the payment path.). invoice with service). and the lack of transparency regarding the opportunities for evaluation (supplier statistics.g.

and organizational charts. Trƒh…h‡v‚Ã‚sÃsˆp‡v‚† In verifying authorizations. questions must also be asked concerning the handling of CpD accounts. descriptions of centers. information should be assembled regarding which form of operational organization the company has selected. The questions here are: What verifications does the ICS provide? Is the four-eyes principle applied for entry and management of creditors.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ(% 5. Are the payment recommendation lists checked prior to payment? If yes. and are plausibility verifications performed for the services or invoice amount contained in the invoice for each creditor? 8ƒ9Ã6pp‚ˆ‡† In verification of internal business regulations concerning the establishment and management of creditors. What work orders are in place? Are CpD accounts controlled separately? Under what conditions are posting made to CpD accounts? Qh’€r‡Ã…rp‚€€rqh‡v‚Ãyv†‡†ÃhqÃh’€r‡Ãyv†‡† The process of preparing and controlling payment recommendation lists and payment transaction data files must be verified. do any errors discovered or modifications to the recommendation lists correlate with the payments? Are there any rules for setting and resetting blocking markers? Are there any adjustments between the recommendation inventory total and the payment transaction total? . questions must be asked regarding corresponding measures in the internal control system.4 Auditing steps Based on interviews. The questions run as follows: Are there employees who can enter/manage creditor master data and post invoices and/or release invoices for payment? Can employees with system authorizations set these up themselves? If these functional separations are lacking because several work stages are combined in the course of payment transactions given the small size of the company. posting and release for payment to a work place. Using the documentation on the access authorization procedure designed by the company. it should then be determined to what extent the organizational structure of the company coincides with the authorization plan. it should be determined whether there is functional separation within the company between invoice verification/posting/release for payment.

The invoice/credit entry is posted directly. if no errors appear in it. and is then posted after verification by an employee in charge of this function. Two approaches are available: • • The invoice/credit entry is first stored by invoice preliminary recording. Electronically transferred invoices/credit entries without reference to an order cannot be recorded automatically in the invoice verification process. Are their work instructions for handling copies of invoices and reminders? Are plausibility verifications set up in the system? Can creditors be entered more than once into the master data? 5. such as EDIFACT (Electronic Data Interchange for Administration. national standard). The formats of the EDI reports are in conformity with international standards. . There is a three-level EDI architecture within SAP R/3: • • • determination of EDI-capable applications. The rules for recording EDI invoices must be set in customizing the finance department. and what measures the company has put in place to avoid them. EDI interface (definition of receive/send rules) connection of EDI subsystems (including conversion and archiving of EDI reports. exchanges of reports) to the EDI interface Electronically transferred invoices/credit entries with reference to an order can be recorded automatically in the invoice verification process.S.5 EDI invoice receipt An automated exchange of business data is possible by means f electronic data interchange (EDI) (including orders and invoices).Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ(& How are payment transaction data files safeguarded? Is access to the data file and spool systems possible? 9‚ˆiyrÃh’€r‡† A check should be made to determine the extent to which double payments can occur. a function of this type is provided only in the finance department. which communicate with the EDI interface via functional modules. Commerce and Transport) or ANSI X12 (U.

In this case. and must be correctly appropriately. The data transmitted in incorrect. Two types of errors are possible in recording EDI invoices: • • The system settings for the business partner are incorrect.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ(' Processing EDI invoices in invoice verification depends on whether the invoice is preliminarily recorded or posted directly. . the party issuing the invoice must transmit a new invoice.

5. the authorization concept – including management of authorization. Since. again. in accordance with §257 HGB [Commercial Code]. This is also true for the collective statement. The SAP procedures for safeguarding settlement data must be verified in detail: • • • • • • completeness of transmission and processing accuracy of transmission and processing allocation to the appropriate period accuracy of table governance reproducibility of the data compliance with legal and contractual requirements The objects of this verification are the procedural documentation. to the extent that such correspondence contains processes that are subject to posting. only on the party receiving EDI reports.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃÃ(( 5. the log report (completeness of recording. The individual statement must be able to be squared with the EDI transmission report. Special requirements are imposed. invoices must exist in documentary form. customizing – including management of master data. the procedure for recognizing and handling errors.1à EDI Regularity requirements In accordance with §14. and the data security procedure. must be able to be squared with the turnover of the corresponding transmission period. which. the use of EDI does not impose any new obligations to keep correspondence on the part of the sender. regularity of archiving). A written individual statement or a collective statement is required for input tax deduction. the content of business correspondence that has been sent must be able to be kept. paragraph 4 UstG [Turnover Tax Law]. . therefore. the EDI contract.

accurate. . Furthermore.“ • The invoice documents are recorded via the EDI interface as „interim vouchers“. Archiving of the original EDI report (Original) is not required. As little separation in time as possible must exist between the receipt of the EDI report and its processing. Timely processing is accomplished if a business transaction is processed immediately after it takes place. but must demonstrate that controls are being implemented. the capacity for auditing includes a description of the processing procedure. timely and verifiable processing. for which the various archiving programs can be used. it must be ensured that no falsification can be made of the content of the report. The requirement for completeness extends to the number of all business transactions (authorized and subject to documentation) that are to be carried out internally. The user is free to select the procedure. which enables expert third parties to trace the origin and course of business transactions within a reasonable amount of time. According to FAMA 1/1995. Finally. no requirements are imposed with respect to a specific storage format. and designated IDOCs (Intermediate Documents). The special IDOC archiving class has been created for this purpose.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà  In accordance with FAMA [Technical Committee for Modern Accounting Systems] 1/1995. the following requirements must be imposed on the application system after the EDI report is received: • „The EDI process must guarantee complete.

paragraph 3 HGB). whereby.or post-scheduled fixed-date stocktaking (§242. are presented. but no estimated quantities. and . as must their implementation. . • • . EAN codes. for inventories of economically lesser significance. • Furthermore. We refer the reader to the position taken by the Main Technical Committee (HFA) at the IDW (Auditors Institute). are not covered in standard commercial software. at the close of each business year in a schedule of expendable stores. once again attention must be given to the separation of functions. as a basic condition for determining the estimated quantities. accurate inventorying procedure must be guaranteed. etc. the mathematical and statistical requirements of which. The preparation for the physical listing must be supported (e. that they must perform an inventorying (stocktaking).1 STOCKTAKING Objectives and requirements German commercial law provides (§240 HGB [Commercial Code]) that businessmen must list their property assets. and for quantities and values that remain approximately the same. and.pre. in other words their inventories. through closed numbering circuits of the listing vouchers for reverse movement control. in which all storage locations and all item numbers. 1/1990 and 1/1981.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà  6 6. as a rule. etc. an on-going.fixed-date stocktaking and expanded fixed-date stocktaking. for which a physical listing must be performed only every three years (§240. With the exception of the sample audit stocktaking. a modern materials management system must support these various listing methods: • As described in the preceding chapters. sample audit stocktaking without complete physical listing (§241 paragraph 1 HGB).perpetual stocktaking (§241. by payment lists. in preparation of that schedule. hand terminals. paragraph 3 HGB).). and to the greatest possible extent through interfaces with largely automated listing procedures such as voucher readers. The valuation of the stocktaking (estimated/actual comparison) must be possible.g. during processing and posting of the differences in stocktaking. the creation of a socalled „fixed value“ is permitted. The following stocktaking procedures are permissible for this purpose: • complete physical listing in the form of . paragraph 2 HGB).

HGB apply.overstocks . the following principles must be applied: • • completeness of the inventorying accuracy of the inventorying 1. the completeness of the physical listing must be supported by machine.availability • • individual listing of the inventories verifiability of inventory acceptance With respect to valuation of the inventory.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà ! • • It must be possible to adjustment book quantities (by quantity and value) in an integrated way with the actual quantities. . implementing. applicable identification 2.condition .cost or production price .technical and economic exploitability . we refer the reader to the next chapter. recording of all information relevant for the valuation .financial soundness . In planning. Specifically for perpetual stocktaking.quality . for which the principles of regularity given in §238ff. reliable determination of quantities and values 3. and evaluating the inventory. overseeing. Stocktaking and stocktaking documentation are components of accounting.

it is recommended that the materials involved in the stocktaking be blocked from postings during the stocktaking process. distortion can arise between the actual warehouse inventory and the book inventory.2.2. see SAP documentation): • • • • fixed-day stocktaking perpetual stocktaking sample audit stocktaking cycle counting 6. a separate stocktaking voucher is produced. The posting block is automatically released when the results of the counting have been entered.2à Stocktaking implementation In the SAP system.2 6.1à SAP Facts Stocktaking procedures SAP supports the following methods (or details.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà " 6. Print and distribute stocktaking voucher/stocktaking recording lists D‰r‡‚…’Ãp‚ˆ‡vt • • count stocks on hand enter the result of the count in the expression of the stocktaking voucher . Therefore. for each storage location. The course of stocktaking is subdivided into: T‡‚px‡hxvtÅrƒh…h‡v‚ • • Prepare stocktaking voucher/Stocktaking recording lists Block materials for postings Because of a time lag between posting a goods movement and its physical implementation. stocktaking occurs at the warehouse level.

a materials voucher is prepared that reports the inventories. posting stocktaking variances without reference to the stocktaking voucher. value tolerances (maximum amount per stocktaking voucher. the counting is posted. the date of the recording is noted in the material master data) run a recount (preparation of recount vouchers if discrepancies are large) offset stocktaking variances In posting the stocktaking variance. .e. This type of procedure can influence the effectiveness of the internal control system with regard to recording processes. In addition. for individual user groups. in a single step. i. or voucher position) can be defined for posting stocktaking variances. there is the possibility of combining several stocktaking steps. e. and the stocktaking variance is offset.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà # D‰r‡‚…’Éhyˆh‡v‚ • • • record the result of the count in the system (at the same time. a stocktaking voucher is set up.g. In customizing the inventorying process. as well as a bookkeeping voucher that contains the necessary account movements.

3à 6. it is assumed that the estimated variances from the book inventory are small enough that they can be disregarded. the sample audit inventory is considered successful. inventories for the remaining inventory units remain unchanged. Based on the results of the count posted. a complete stocktaking must be performed for the inventory units that were not counted. a computer forecast is run on all the inventory units involved in the sample audit inventory. Of the variance between the computer forecast value and the book value is small. • • If the sample audit inventory is successful.2. .Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà $ 6.1à Sample audit procedures Overview Mathematical and statistical methods are used to perform the sample audit inventory: • From the inventory units to be inventoried. and if the probability is great that only a very small margin of error is possible in the computer forecast. Only inventories for those elements that were actually counted are corrected in the traditional stocktaking process.2. a random sample to be counted is selected. The scope of the random sample depends on the accuracy probability that is supposed to apply for generalization from individual counts to all the inventory units involved. If a sample audit inventory is not successful.3.

The method in both instances is the same.3à Method In both areas. these may vary according to the following criteria: • • • 6. stocktaking proceeds via the selection of materials according to the plant. Movements in the warehouse. warehouse management. Changes in the book inventories thus flow into the calculations of the sample audit inventory. • ƒr…ƒr‡ˆhyÆh€ƒyrÃhˆqv‡Ãv‰r‡‚…’0 perpetual sample audit inventorying can be done over a very long period of time. the type of material.3. the only difference is in the selection of the objects to be inventoried: • • inventorying.2. In fixed-date sample audit inventorying.2à area of the sample audit inventory method used for the sample audit inventory computer forecast method Area The sample audit inventory can be used in the areas of inventorying and warehouse management.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà % The sample audit inventory can be performed in various ways. and changes in the book inventories are not permitted during the stocktaking process. sample audit inventorying – analogous to the traditional stocktaking process – can be implemented according to two methods: • sv‘rqqh‡rÆh€ƒyrÃhˆqv‡Ãv‰r‡‚…’ . the counting is done as of a fixed date. .3. or in the system’s calculation procedures. either in the processing steps during implementation. there is no distinction between these two methods. stocktaking proceeds via the selection of the storage areas. 6. The data from the sample audit inventorying is updated from time to time to the latest version of the book inventories. according to storage number and storage type. in fixed-date sample audit inventorying. the storage location. In the SAP system. there must be organizational guarantees in place to ensure that the book values are not changed during the sample audit inventory. and the type of inventory.2. however.

€rhÃ‰hyˆr phypˆyh‡v‚.3. • 8…rh‡rÅhq‚€Ã†h€ƒyvt In random sampling. Furthermore.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà & 6. If this error falls below the maximum value set in the parameters (usually 1%).5à Implementation of sample audit inventorying When a sample is representative. Successive individual classes are comprised of layers.2. • 9v‰vqrÃv‡‚Ãyh’r…† Division into layers is done on the basis of the subdivision into classes. The warehouse totality is subdivided into the sample room and the complete assessment room. For now. a selection is made for each layer of the elements in the layer that are to be counted. The same room comprises material classes that later serve to establish layers. These inventory units are clearly defined by allocating the inventory levels to a sample audit inventory. The sample audit inventory takes place according to the following processing steps: • • 6yy‚ph‡rÇurÃv‰r‡‚…’Ãyr‰ry† @†‡hiyv†uÇurÐh…ru‚ˆ†rǂ‡hyv‡’ The warehouse totality is the amount of all inventory units that belong to a sample audit inventory.4à Computer forecasting method Various mathematical methods are possible in terms of the computer forecasting method.2. 6. the sample is representative.3. the relative sample audit error is decisive. additional assessment is recommended. It is essential for the successful conclusion of a sample audit inventory that the total inventory value (estimated value of the sample room and actual value of the complete assessment room) vary by a maximum of 2% (standard settings) from the book inventory. the SAP system is limited to one method. .

Determine changed book inventories and values 3. the system establishes an estimated value for the warehouse totality from the sample audit inventory. the results of the count from the complete assessment room are incorporated into the overall calculation. Read additional posted results of counting 2. In addition. the system performs three actions: 1. From these two results.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà ' • Qr…s‚…€Ãˆƒqh‡r In the update. The principle of the sample audit inventory is based on the fact that the results of the count of the randomly selected inventory units are used in a computer forecast for all inventory units in the sample room. Determine necessary additional assessments • Qr…s‚…€Ãp‚€ƒˆ‡r…Ãs‚…rph†‡vtà (SAP currently supports the layered mean value calculation method). .

movement type RM-LVS-decentralized -> HOST transaction .2.4à Tables T001K T001L T064A T064B T064F T064S T064T T150 T150F T158I T159G T159H T159I T159L T322 T320 T320C T321 T321D Valuation field Storage locations Inventory types for stocktaking Inventory types and texts for stocktaking Function codes.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà ( 6. stocktaking Inventory levels for sample audit inventorying Texts on stocktaking Order types for stocktaking and related movement types Order types and associated field in stocktaking Transaction governance. movement type RM-MAT -> movement type RM-LVS Allocation. stocktaking LVS RM storage location – LVS warehouse number allocation LVS warehouse number – RM storage location allocation Allocation. stocktaking Standard values for sample audit inventory profile Long text on sample audit inventory profile Test data for batch input in inventorying (stocktaking) Recommended values for inventorying and stocktaking RM Movement types for offsetting.

Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà  6. stocktaking Selection of storage locations for fixed-date stocktaking Performing perpetual fixed-date stocktaking Variance lists by warehouse type Valuation of stocktaking variances Progress of stocktaking Composite commissioner lists Offsetting variances in RM List of TBs by material Valuation of the communications vouchers Printing stocktaking recording lists for perpetual .5à Reports RMCBIN00 RM07ICN1 RLI30010 RLINV010 RLINV015 RLINV020 RLINV030 RLINV040 RLKOMM00 RLL03T01 RLLB1100 RLLD0400 RLLI0400 stocktaking RLLI0401 stocktaking RLLI0500 RLLI1400 RLLI2001 RLLI2100 Displaying stocktaking history at the storage location Stocktaking variances Stocktaking variances Off-setting variances in RM Printing stocktaking recording lists for perpetual ABC analysis by consumption or demand Due dates for cycle counting materials Overview.2.

Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà 6.6à Qualifications MM_B Materials Management – Inventorying and Stocktaking M_ISEG_WDB M_ISEG_WIB M_ISEG_WZB the plant M_ISEG_WZL M_MBNK_ALL M_MRES_BWA Stocktaking: counting at the plant Materials vouchers: managing the numbering field Reservations: movement type Stocktaking: booking discrepancies at the plant Stocktaking: Stocktaking voucher at the plant Stocktaking: counting and booking discrepancies at M_MRES_WWA Reservations: plant M_MSEG_BMB M_MSEG_BWA M_MSEG_BWE type M_MSEG_BWF M_MSEG_WMB Goods receiving for orders: movement type Materials vouchers: plant Materials vouchers: movement type Goods movements: movement type Goods receiving for purchase ordering: movement M_MSEG_WWA Goods movements: plant M_MSEG_WWE M_MSEG_WWF M_SKPF_VGA M_SKPF_WRK Goods receiving for purchase ordering: plant Goods receiving for orders: plant Sample audits for stocktaking: procedure Sample audits for stocktaking: plant .2.

which may lead to errors in the annual result (income statement) and in the balance sheet statement (receivables and payables): • • • principle of completeness and accuracy in inventorying principle of individual listing of stocks principle of reproducibility of inventory acceptance A consequence of errors in delineating the period is that the annual result may be incorrectly presented. The following risks arise in the sample audit stocktaking procedure: • incorrect selection of the acceptance or refusal thresholds used for the computer forecast (size of the relative sampling error in reference to the sample room). and receivables and payables may be reported incompletely. incorrect setting by the user of the upper threshold value for defining the complete recording layer. incorrect layer formation based on insufficient setting of the minimal sample (the SAP system does not have any automatic setting for a minimum sample number per layer. relative variance between book value and actual value). • • • 6. establishing the correct setting is left up to the user). rather.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà ! 6.4 Auditing steps Auditing steps: • • What guarantees are in place to ensure that all materials are listed? Was posting generally blocked while the stocktaking voucher was being prepared? 7’Ær‡‡vtÇur†‡vtÃiy‚pxÃvÃ‡urÃG‚tv†‡vp†Ã€rˆHh‡r…vhy† Hhhtr€r‡T‡‚px‡hxvtTr‡Ã†‡‚px‡hxvtɂˆpur…Ã3ÃP‡ur…Ãvs‚…€h‡v‚) . error in setting the statistical parameters (accuracy probability. relative statistical error.3 Risks There is a risk that the following sound accounting principles will not be maintained.

handling via variance interface) Cut-off auditing is done by balancing the goods receiving or outflow certificates and the delivery receipts with the corresponding sales or entry invoices -> see audit menu AUDI_VORRÄTE -> AUDI_WARENBEWEGUNGEN ‘AUDI_WARENEINGANG’. goods receiving. from/to Cut-off.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà " Q‚†‡vtÃiy‚pxÃhyyÀh‡r…vhy†Ã€‚‰r€r‡†Ãs‚…ÇurÀh‡r…vhy†Ã‡‚ÃirÃv‰r‡‚…vrqÐvyyÃir pˆ‡Ã‚ss • • • • Have materials movements been posted after stocktaking vouchers are generated? Assess the completeness and accuracy of acceptance of stocktaking data. goods receiving open to now Cut-off. standard application of movement types 711 and 712. and the evaluation of it. invoice receiving open to now Cut-off. correct application of movement types. Are guarantees in place to ensure that the correct period is delineated? (Audit of period delineation = cut-off auditing) How are stocktaking variances handled? (Process. invoice receiving from/to ‘AUDI_WA_CUT_OFF’ ‘AUDI_WARENAUSGANG’ . ‘AUDI_WE_CUT_OFF: • • • • • OBYP_1 Goods receiving/invoice receiving offset accounts RFWERE00_1 RFWERE00_3 RFWERE00_2 RFWERE00_4 Cut-off.

1. it contains all the inventory units that are involved in the selection of the units to be counted. the following auditing steps are necessary: • 8‚‡…‚yÂsÇurÃp‚……rp‡Ã†r‡‡vtÂsÇurƇ‚px‡hxvtłsvyrÃvÃpˆ†‡‚€v“h‡v‚ ‚sÃv‰r‡‚…’vt†‡‚px‡hxvt . • 8‚‡…‚yÂsÇurÃp‚……rp‡Ãqryvrh‡v‚hyy‚ph‡v‚Ã‚sÆh€ƒyrł‚€Ãhq p‚€ƒyr‡rÃh††r††€r‡Ã…‚‚€ The sample room is a part of the warehouse totality. book to actual value Wr…vsvph‡v‚Ã‚sÇurÃv‰r‡‚…’Ãyr‰ry†Ã†r‡Ãˆƒ Through customizing the stocktaking process. The book inventory for the inventory unit is zero. it is possible to set the inventory levels for which sample audit stocktaking is permitted. Since.“ [Sample audit stocktaking permitted] column. by using Q…‚prqˆ…r†Ã3ÃT‡‚px‡hxvtÃ3ÃTh€ƒyr hˆqv‡Ã†‡‚px‡hxvtÃ3ÃD‰r‡‚…’Ãyr‰ry†. 5. The inventory levels that should be selected for a sample audit stocktaking procedure must be marked in the „Stlnv zugel. 2. as a rule. several inventory levels are allocated to one sample audit stocktaking procedure. 4. these form the complete assessment room. Five parameters control whether a complete assessment is scheduled for an inventory unit: A delete marker is set for the inventory unit in the material master data set.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà # If the SAP sample audit process is used. • Sample audit stocktaking method Computer forecasting method Accuracy probability Relative statistical error Relative variance. . From the setting menu for inventorying/stocktaking. you can obtain a list of all possible inventory levels. 3. a complete assessment is necessary. „related“ inventory levels can be combined into a group. The system divides the warehouse totality into sample and complete assessment rooms automatically when the warehouse totality is created. For the remaining inventory units of the warehouse totality.

at least from the perspective of the general audit. according to SAP documentation. sufficient samples must be used. under certain circumstances. • 8‚‡…‚yÂsÇurÅrtˆyh…ÃhqƂˆqÃp…rh‡v‚Ã‚sÃyh’r…† According the HFA requirements. The Main Technical Committee (HFA) of the Auditors Institute. usually fixed at 30 positions. October 1978. relative statistical error. from the requirements of the Foreign Trade and Payments Ordinance. • 8‚‡…‚yÂsÇurƇh‡v†‡vphyÃh…h€r‡r…†Ãˆ†rq The statistical parameters (accuracy probability. Therefore. rather. However. the sample audit scope in the SAP system is. SAP does not automatically take into account a minimum sample per layer. in each layer. i. According to SAP documentation. relative variance between book and actual value) can. in that the relative sample audit error is related to the sample room and the complete assessment room. in the 1990 version). Financial Management Board. If this is not the case.e. 8‚‡…‚yÂsÇurÃh…h€r‡r…Ær‡‡vt†Ãs‚…ÇurÃhpprƒ‡hprÃhqÅrsˆ†hyÃyv€v‡† s‚…ÇurÃp‚€ƒˆ‡r…Ãs‚…rph†‡vtłprqˆ…r According to SAP documentation. it is possible that the requirement of the Bureau of Internal Revenue (relative sample audit error related to the sample room = 2%) may be avoided. be set as the user wishes. the setting at = 1% can be adjusted. The price of the material falls above a specified limit. In this way. however. in its document on sample audit inventorying (HFA 1/1981.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà $ • The inventory unit has a specific ABC marker. it allows the user to set the number of samples. set the limit at 2%. Therefore. The value of the inventory unit (material price * quantity) falls above a specified limit. the stocktaking procedure does not fulfill the HFA requirements. the accuracy probability must be at least 95%. higher than is necessary. . however. Therefore. if no minimum sample is set by the user. the mathematical and statistical requirements for layered methods must be met for each layer. it is initially assumed that the relative sample audit error relating to the same room must be = 1% in order to be absolutely representative. it is important to determine whether this condition is met. when the proportion of the complete assessment room equals more than 50% of the total room. additional assessment are required. a minimum sample is required for each layer. According to documentation from HFA.

and what effects those postings may have had on the result of the stocktaking procedure. Therefore. nonetheless. Therefore. or if changes made in the process have resulted in any stocktaking errors.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà % • Wr…vsvph‡v‚Ã‚sÃv‰r‡‚…’†‡vt†Ã€hqr If the sample audit stocktaking is performed on a fixed date. since otherwise the sample audit stocktaking would lead to errors. the individual procedures from creating the warehouse totality up to and including the final updating must take place soon after each other. perpetual sample audit inventorying may have been performed. . It must be determined whether the correct procedure was followed. it is recommended that the system perform additional assessments. it is important to determine whether inventory postings have been made anyway. This has an impact on the allocation of inventory units to layers. variances between book inventories and book values as of the planning date and the current date are not permitted. and. • 8‚‡…‚yyvtÃp‚€ƒyvhprÐv‡uÇurƇ‚px‡hxvtłprqˆ…r If any variances between book inventories and book values have turned up between the planning date and the current date. In these cases. under certain circumstances the fixed-date stocktaking procedure may not have been followed. Inventory postings must not be made in the meantime.

line 1) or there is a lower „attributable value“ (§253. paragraph 3. In addition.1 VALUATION Objectives and requirements Under German commercial law. the „ADS“. paragraph 4 HGB). although this is not mandatory. lower values may be used. paragraph 4 is not to be applied to commercial corporations. pursuant to §279. because they are not automated. this means that the individual inventories must be assigned a lower value than the acquisition or manufacturing costs. First. has 224 pages of commentary on §253 HGB and another 124 pages on §255!) – this is the very area in which software must meet the greatest requirements for information content and automated control capacity. and therefore also for inventories. line 2) which plays a role in the area of inventories. line 3) and „in the context of the reasonable judgement of a businessman“ (§253. no additional analysis of them will be provided here. particularly with regard to overstocking and obsolete inventories. . paragraph 1 HGB). because the valuation of inventories is one of the most difficult and most materially significant problems areas in accounting – since considerable investment in controls and the risk of arbitrariness are involved – (the auditor’s Bible. valuation of inventories must be made basically at the higher of the acquisition prices (raw materials. We will also not go into further detail regarding the possibility of fixed or group valuation (§240. to take impending reductions in value into consideration earlier (§253. paragraph 3. paragraph 1 HGB [Commercial Code] and §255 for determining that value). auxiliary materials. The strict lower-value principle also applies to liquid assets. paragraph 3. since these latter optional determinations do not play a large role in practice (§253.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà & 7 7. Against this legislative background. provided that • • a lower exchange price or market price can be determined (§253. paragraphs 3 and 4 HGB) because dealing with the problem is of secondary importance. operating supplies) or manufacturing costs (semi-finished and finished products) (§253. and second.

.g. With regard to the actual purchase price – unless an escalating average is provided – the question must be answered as to the prices at which items found in the inventories at the time of stocktaking were acquired. where possible. The following items are of importance in this respect: the actual purchase prices (automated). For control and calculation purposes. and the lowest purchase price for an item by period (automated). and secondly. errors in recording and other „runaways“ can be readily monitored (e.) In addition. the most recent purchase price for an item (automated). To that end. or an item received is posted under an incorrect item numbers. first. furthermore. as outlined above. namely: the LIFO method (last in – first out) perpetual LIFO period LIFO the FIFO method (first in – first out).and post-calculations more easily comparable. These methods must also be machine supported. which can thus be automated.1à Determining acquisition costs and lower of cost or market balance A data processing precondition for extensively automated. §256 HGB permits inventories to be subject to a specific consumption sequence.1. an item is posted with a high low-quantity or urgent-delivery rate. to serve as a control price. also to serve as a control price. a replacement part or a repair is posted as an item received.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà ' 7. the average price to be determined from those prices (automated). it is essentially that there be a capacity to use manually administered prices for inventory valuation. to manage that information automatically. for simplification purposes. accurate inventory valuation is that the software must provide the ability to store different prices by date and. etc. the possibility of using internal prices must also be provided. since the lower exchange or market price or „attributable value“ to be used does not usually correspond to any of the prices that can be determined from purchasing. this makes pre.

using which of the possible values.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà ( It is specifically this latter point that imposes the greatest demands on an ICS [internal control system]. for each item. in this sector. Considerable demands are also placed on reproducibility and history. i. and. and corresponding valuation algorithms should be capable of being automated. These demands include the following: age grouping and range (based on production planning) of the inventory of each item should be able to be determined automatically. price variance analyses right down to the level of the individual invoice) should be possible. for purposes of inventory valuation. .e. since it must always be possible to determine which item was valued at what moment.e. and thus also on the capacities of a software package. comparisons between the possible prices mentioned above that are as flexible and as detailed as possible for the user. of course. determining and using the lowest of the prices discussed above. the lowest value adjustment itself should be automated. depending on the specific circumstances (i.

Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà ! 7. EstR 1993 Inclusion Inclusion require allowe forbidden require allowe forbidden d d d d 1. 2 and 3 33. Production costs X X Direct labor costs X X Production costs incl. Administrative costs General administrative costs Expenditures for social services of the operation Expenditures for voluntary social benefits payments Expenditures for operational old-age pensions 4.1. depreciation on production facilities X X Special individual X X production costs Special production overhead Interest on outside capital used to finance production of an asset 3. Material costs Production material X X Material overhead X X 2.2à Determining manufacturing costs The following schema applies for determining manufacturing costs: Manufacturing costs per Manufacturing costs per R §255. Manufacturing costs Total 1 through 3 X X X X X X X X X X . para.

actual costs must be compared and. complete „online integration“ – which is theoretically possible – which. these costs are determined using calculated budget costs. the actual cost is not normally used in determining manufacturing costs. every modification by a committee. in combination. for purposes of evaluating these budget costs. data from production (parts lists and work plans) are needed. if necessary. in the interest of comparable data – desirable (and. . rather. not all manufacturing cost components are derived from materials management itself. corrected. except for the cost of production materials. As a result. and specifically from cost accounting. every change in wage costs owing to illness. among others. such as payroll accounting. On the other hand. in part. all repairs. also impermissible). is neither rational nor. Both factors. In addition. and other variations and other chance events used in determining manufacturing costs. but from financial accounting and other elements of accounting. Interest on equity capital and outside capital. for allocation of the individual cost elements to individual articles. Therefore. if not covered under item 2 6. Documentation and output must provide answers to the following question. place further demands on the reproducibility of the process. at this point.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà ! 5. as high a degree as possible of integration is of particular importance for the quality of the software. includes every change in purchase price. One outcome of this is that. Marketing costs X X X X This shows that.

from the purchase requisition to allocation of the order? How are quantities entered into the system? How are prices entered into the system? How is the lowest-value adjustment handled? Where can one see whether valuation is done at GIDP. auxiliary materials. last purchase price. and what consequences are drawn from that analysis? .1à Raw materials.2. last purchase price.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà !! 7. or lowest purchase price? • What systematic approach is then used for valuation. physically and in terms of bookkeeping. GIDP. at what price? Who handles the VP? • Are large differences between VP.1. VP. and lowest purchase price analyzed (on-going). and operational supplies • What is the overall path of a purchased part.

work preparation. and when is valuation done according to actual costs. and sometimes as purchased parts? What is the route from the warehouse to the cost center to the cost unit? QÅÂÃqÈÃpÇÃvÂÁÃÃÃpÂÆÇÆ • • • • • What are the overall procedures for calculation.1. and at what price? How are parts produced in-house entered into the system? What is the chain of events when physically identical parts appear sometimes at semi-finished products.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà !" 7. and what happens when there are discrepancies? When is valuation done according to budget costs. and what happens when there are discrepancies? When is valuation done according to budget costs.2à Finished products/Unfinished products HÃhÇÃrÅÃvÃhÃyÆ • • • • • • • What is the overall path of a purchased part from the warehouse through to the finished product.2. and scheduling? How does target consumption (= work schedules) appear in the system? How does actual consumption appear in the system. and at what price? What is the route from scheduling to the cost center to the cost unit? . physically and in terms of bookkeeping? How do target consumption figures (= parts lists) appear in the system? How do actual consumption figures appear in the system. and when is valuation done according to actual costs.

non-operating expenses . which requires that the products must be depreciated if the cost that have occurred to date. other administrative costs still to come _____________________________________________ = value to be attributed as of the closing date of the financial statement.e. In addition. therefore. what overhead costs are used in valuation (EstR 33)? What quantity units (e./. production costs still to come . and how are the overhead costs recorded? What assessment system is there (BAB)? What is the route from the origination of the cost to the cost unit? The strict lowest-value principle described above also applies to the valuation of semi-finished and finished products./. plus costs still to be anticipated. are not covered by the sales price that can be obtained: Sales price ./. .g./. and what prices? How is valuation done. machine hours) are there. Depreciation from the raw materials area must.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà !# PÉÃrÅÃuÃrÃhÃqÃÃpÂÆÇÆ • • • • • What is the actual composition of the overhead costs. The majority of the objectives and requirements described here apply to the areas of (customer) order management and production. be able to be „passed through“ to the valuation of semi-finished and finished products. as well./. in the valuation of semi-finished and finished products. packaging costs. other marketing costs still to come . i. shipping costs . the principle of „loss-free valuation“ must be taken into consideration.

As described in the previous chapter. particularly from the creditors. • . there are significant points of interaction between production and production control. on the one hand the PPS module of modern software should be as flexible as possible and. because that department required extensive information from the other areas. a high degree of integration is important. since production control is the most individual area in production. and between the cost account and valuation sectors. production scheduling. However. on the other hand. the remaining areas should have clearly defined interfaces to outside (PPS) systems.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà !$ The following points must also be noted: • In the area of (customer) order processing. and cost accounting departments.

. such as the purchase. • Whyˆh‡v‚Ã‡’ƒr The valuation type is used for separate valuation. structures. in the regard. • Whyˆh‡v‚Ã†‚…‡ The expression of the valuation type in separate valuation is called the valuation sort.2. which makes valuation possible at the charge level. the valuation sort is the individual charge when the goods are received. or condition of the material. a few basic terms. to define the valuation sorts „in-house production“ and „purchased from a third party“ for the purchasing valuation type. One special feature. 7. for example. customizing can be used to make an accounting area or a plant the valuation area. In valuation at the charge level. and procedures in the SAP R/3 system must first be explained. • Whyˆh‡v‚Ãpyh†† Materials having similar properties can be combined into valuation classes for bookkeeping purposes. The following structure must be distinguished: • Whyˆh‡v‚Ãh…rh Organizational level at which the valuation of materials is made. It sets up the criterion by which the inventories of a material can be valued separately.1à Valuation structures Valuation is governed by the valuation structures in the SAP R/3 system. is the valuation type „X“. Customizing can be used.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà !% 7.2 Basics of valuation in SAP R/3 To understand material valuation. This is done as a function of the type of material. through the allocation of the material in the material master data record. The inventory account tracking for the respectively material is also handled with the help of the valuation class. origin. As an alternative.

2à Material and movement types • Hh‡r…vhyǒƒr† Each material is allocated to a material type in the SAP system.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà !& 7. • H‚‰r€r‡Ã‡’ƒr† Material movements are mapped in the SAP R/3 system via movement types. The price in the material master data record is then adjusted to the respective cost prices. This makes price controlling possible. T‡hqh…qÅvprà 6‰r…htrÃr†phyh‡v‚Ãƒ…vprÃ(price governance marker „V“) All incoming goods are posted at accession values. Variants are posted in price difference accounts. what price governance is used.2. and adjusted. so that price differences occur only in exceptional instances. The movement types govern whether quantity and/or value adjustment of the material takes place. and whether a movement is relevant for a LIFO/FIFO valuation. whether a posting in the financial books is offset. This includes information on whether a material is managed in terms of quantity and/or value.3à Price governance The SAP R/3 system makes a distinction between two types of price governance: • (price governance marker „S“) All inventory postings are made at the standard price. The material type is used to control what properties a material has in relation to its valuation. and the valuation class to which the material is allocated. 7.2. • .

If this is not done with the correct facts. from the perspective of the SAP R/3 system. on the one hand.3.1. When changes are made for immediate effect. for a variety of reasons. which result in automated postings. In terms of bookkeeping. in that.3. where this topic is discussed in detail. see sub-point 7.2à Risks Using the capacity to make manual entries for price changes. there is a danger that the material at issue may be incorrectly valued. with all the .Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà !' 7. Posting a price change in the system results in an adjustment of both the material master data record and the corresponding accounts in financial accounting. in a revenue or expense counter-entry. 7. an accounting voucher is generated. Through customizing.3 Changes in materials valuation Changes in materials valuation can be distinguished. when the change is recorded. a posting date from the prior period is entered. from the perspective of financial accounting. or for the current period. and. furthermore.3. 7. to change the price of a material manually. This is possible.1à Price changes SAP Facts In the practice of materials management. independent of price governance. and through retirement in the context of stocktaking differences. Automated changes in material valuation refer mainly to processes in the context of invoice verification and inventorying. on the other hand. make it possible to change material valuations directly. Manual changed. the user can access the automatic materials valuation of the SAP R/3 system directly.3. With regard to the last of these. it may be necessary. by price changes or materials entry or release.3 „Reverse entries in the prior period“). in an inventory posting in the amount of the total quantity multiplied by the price difference. into automated and manual changes. by contrast. it is determined whether price changes apply only for the prior period or prior year. both for a future date and for immediate effect. there is also the possibility of posting price changes in the prior period or in the prior year (in this regard. through revaluation of a material.1. the price change results. whereby.1à 7. We refer the reader to chapters 4 and 5. as well. or if such access is not factually justified. we refer the reader to chapter 6.

price changes are handled through the accounting aspect of the material master data record. . the following qualifications for materials management – master data. A systemoriented auditing valuation based on the automated valuation procedure of the SAP R/3 system. a distinction must be made between price changes having a future date. Additionally. and price changes that are for immediate effect. through which the mapping of this functional distribution is handled in the SAP R/3 system.3à Auditing steps A basic determination must be made as to whether the manual entry possibilities for price changes are provided organizationally with the client. must be examined as a function of the organizational and functional structure of the company: MM_G Materials Management – Master Data M_MATE_BUK M_MATE_LGN M_MATE_PER M_MATE_STA Master data: accounting area Master data: inventory number Master data: allow reverse entries/ postpone periods Master data: Management status M_MATE_VKO Master data: Sales organization/ Distribution path M_MATE_WRK Master data: plant In addition. In the SAP R/3 system. The urgent need for such access into the automated materials valuation of the SAP R/3 system often arises because of procedural routines within the company (for example.3.1. taking functional separation concerns into consideration. the first thing to check is what group of individuals is entrusted with this responsibility. In the first instance. As a result. so that in addition to the qualifications specified above.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà !( attendant consequences under commercial and tax law. adjusting a standard price or updating an average escalation price for goods movements that have been omitted for a long time). can no longer be maintained in such a case. the date as of which the price is to be valid is entered into the master data. in addition to the entry of the future price. this future price must be activated explicitly via a batch input process. this type of access may escape any internal control system that may be in place. 7. If the ability to make manual entries of price changes is present. In addition.

are contained in the material master data record (menu: Hh‡r…vhyÀh†‡r…Ãqh‡hÅrp‚…q Är‰v…‚€r‡³Ã3ÃÄ9v†ƒyh’Ãpuhtr†³). It is also important to determine whether an organization procedure has been implemented that prevents errors in dealing with future prices. and the corresponding accounting voucher is generated. taking into consideration the organizational details of the client. price changes may be made only at a fixed date. For example. On the one hand. a determination must be made as to whether the price change applies only for the prior period or prior year. In the customizing settings.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà " a corresponding batch input qualification is required. and on the other hand. and the date of the last change. (Menu: Whyˆh‡v‚ÃÄ9r‡r…€vh‡v‚Ã‚sÅvpr†³Ã3ÃÄ8uhtrÅvpr³Ã3ÃÄ9v†ƒyh’“). or for the current period. . The report generating mechanisms of the SAP R/3 system can be used as an additional internal control mechanism. and whether this setting corresponds to the provisions of commercial and tax law. as well. the previous price. and for performing audits of individual instances. the accounts in financial accounting are adjusted because of the price change.

3. can no longer be maintained in such a case. in an earnings or expenditure account. on the one hand. an inventory posting is generated by the debit or credit entry of the material. or if such access is not factually justified.2. For materials with an average escalation price governance.1à Materials entry and release SAP Facts If the inventory of a material is to be appreciated or depreciated or specific reasons. there is no revaluation of the material. If this is not done with the correct facts. or is divided proportionally into the inventory account and a price difference account. this type of access may escape any internal control system that may be in place. a debit or credit entry can be posted directly for that material. this will have varying effects on the accounts. the material debit or credit entry is posted in a price difference account. Depending on price governance. In addition.2. . can have direct access to the automatic material valuation of the SAP R/3 system. in a manner similar to price changes. As a result. whereas the value is increased or decreased.3. For standard price governance. Depending on the inventory range. The inventory of the material remains unchanged. this posting takes place with the full amount in the inventory account. 7.2à 7.2à Risks By using the manual entry capacity for credit or debit entries for a material.3. the user. there is a danger that the material at issue may be incorrectly valued. A system-oriented auditing valuation based on the automated valuation procedure of the SAP R/3 system. and on the other hand.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà " 7. with all the attendant consequences under commercial and tax law.

The urgent need to do this may arise because of company-specific circumstances. through user qualifications.3. The following qualifications apply to this scenario: MM_B Materials Management – Inventorying and Stocktaking M_MSEG_BMB M_MSEG_WMB M_MBNK_ALL Materials vouchers: movement type Materials vouchers: plant Materials vouchers: managing the numbering area The posting vouchers automatically generated by the system serve as an additional internal control mechanism.2.3à Auditing steps As was the case for the manual entry capacity for price changes.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà "! 7. and for auditing individual instances. from an accounting perspective. . and should be taken into due consideration in the assessing the audit results. and how this is mapped in the SAP R/3 system. the first thing to determine is whether the client has provided an organizational capability for credit or debit entry of a material. A determination must be made as to which of the company’s employees are entrusted with this responsibility.

which are possibly only in the prior period.3. If an invoice is posted in the last period of the prior year. the inventory value changes in the prior period. which can be posted in the prior period and in the final period of the prior year: In reverse entries of goods movements. correction entries are necessary when dealing with reverse entries. under certain circumstances. In terms of bookkeeping. among other things. A fundamental distinction must be made between reverse entries of goods movements. If posting into the prior period become necessary after the period shift has taken place as a result of special circumstances.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà "" 7. involving the goods receiving/invoice receiving account.3à 7. the same posting procedures as those used in the current prior are used for reverse entries.3. and in the current period. data for the current period as well as the prior period are adjusted. the inventory quantity and inventory value change in both the prior period and in the current period. Accurate management of the permissible posting period in financial account (Table T001B) is one essential condition for a reverse entry. the period shift moves data.1à Reverse entries in the prior period SAP Facts At the end of each period. as is the entry of a posting date from the prior period when the posting is made. which are generated automatically by the SAP R/3 system: . In this case. changes in the inventory value may only occur if price changes are present for a material having a valuation by average escalation price. Thus. Under certain conditions. The open items are carried forward as a balance carried forward into the current fiscal year.3. In reverse entries of invoices. from the current period into the prior period. and must be squared there with the receipt of goods. since a reverse entry for the corresponding goods movement cannot be made in the prior year. mainly inventory quantities and values as well as prices and price units. the average escalation price in the prior period and in the current period is also affected. a balance appears in the goods receiving/invoice receiving account. and the last data from the prior period is used as the starting data for the period just beginning. and reverse entry of processes from invoice verification.

and as to whether they are entrusted with this responsibility in accordance with their area of responsibility. a correction entry must be made for the current period.2à Risks In reverse entries in a prior period. Auditing steps The accurate delineation in financial accounting of the posting periods that are valid for the accounts in which entries are to be made is an essential condition for accurate reverse entries in the prior period. In this case. there may be variations in valuation between a completed cost accounting (SAP R/3 module CO) and materials management. as described elsewhere in this document.3. The consumption of the material was valued in the cost accounting using the average escalation price prior to the reverse entry. and to what extent. Although an automatic revaluation entry occurs following the reverse entry in materials management. there may be a change in the average escalation price in the prior period and in the current period. The settings of these tables must be examined. we refer the reader to the importance of auditing the accurate delineation of periods (cut-off auditing). a comparable correction entry is not performed in cost accounting. particularly with respect to the changeover of the fiscal year. If this material has been consumed in the interim. Table modification reports must also be included in the examination. In this regard.3à A determination must be made as to which employees have access to this qualification. The possibility of accessing the reverse entries in a prior period is governed by the following qualification: MM_G Materials Management – Master Data M_MATE_PER Master data: allow reverse entries/ postpone periods 7.3. This takes place via the tables of the valid posting periods (T001B). subject to the essential conditions specified above. and a debit entry may result for the inventory account. via the T001Z tables. if the fiscal year does not coincide with the calendar year.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà "# For materials with a standard price valuation. and. for accurate inventory valuation (revaluation entry). .3. 7. provided that there is inventory coverage.3. but this does not apply to the current period. a correction entry is necessary if there is inventory coverage when a variation in standard price for the material occurs in the prior period.

Transfers are different from restoring procedures in that. rather.3. since the restored material remains in the same plant. inventory accounts). if both plants are allocated to different valuation areas. charge number. because any change in the plant inventory must be taken into consideration by planning. • Sr†‡‚…vtÃs…‚€Ãƒyh‡Ã‡‚Ãyh‡ Restoring from plant to plant has an impact on: .4. Restoring can take place at three different levels: • Sr†‡‚…vtÃs…‚€Ãhpp‚ˆ‡vtÃh…rhǂÃhpp‚ˆ‡vtÃh…rh ‰‚ˆpur…† In restoring from accounting area to accounting area. as a rule. both restoring and transfers are posted. they do not involve a physical movement of goods.accounting. As a rule.4à 7. along with the material voucher. An accounting voucher is generated for the restoring procedure.1à Transfer (=restoring with value) SAP Facts In the SAP system. ‡‚Ãhpp‚ˆ‡vt are generated for the material voucher: an accounting voucher for withdrawal from the warehouse from the sending accounting area.3.planning. This means that restoring also results in a value adjustment (inventory value. and is thus handled with the same valuation data as before.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà "$ 7. of material number changes. . Only if the material is separately valued and the valuation type of the material changes during the restoring is an accounting voucher generated during restoring. it is posted without a value. the inventory type. . and an accounting voucher for entry into the warehouse in the receiving accounting area. • …r†‡‚…vtÃs…‚€Ã†‡‚…htrÃh…rhǂƇ‚…htrÃh…rhÐv‡uvÃ‡urÃyh‡ Restoring from storage area to storage area takes place within a plant. for example.

the inventory is „in the process of being restored“ at the receiving location. and thus make implementation and accuracy of perpetual stocktaking difficult. - 7. in organizations where reference is made to perpetual stocktaking. to see how goods movements generated in the one-step method are taken into consideration just before the time they are recorded.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà "% Any restoring/transfer involves an „outflow of goods“ from the sending location and a „receipt of goods“ at the receiving location.3à Auditing steps Check to see whether the authorizations over the accounting area or plant have been issued in connection with transfer or restoring movement types. .3. Watch to see whether. the one-step procedure is used almost without exception. there are basically three methods available: restoring via a restoring posting in a one-step procedure. since restoring from plant to plant or between accounting areas can only be recorded in the one-step method is there are authorizations in both plants/accounting areas for the restoring. restoring via several restoring entries. After the outflow of goods posting from the sending location. for example.4. Because of the incapacity inherent in the one-step method to monitor inventories that are in transit.4. The two-step procedure makes it possible to monitor the inventories that are „in transit“. For restoring. in a two-step procedure. the target and actual inventories of a material may evolve separately. for example. particularly if there is a fairly large time lag between the recording of the restoring and its actual implementation. the advantage of which is that only a single procedure must be recorded.3. 7. This organizational rule points out more or less clearly any weaknesses in the company’s own authorization concept. and is managed as such in the system. Check the accounting area offset accounts against each other. restoring via restoring order.2à Risks In practice.

In this regard. inhouse service offsets. by order.1) on the basis of goods quantities reported back to date for the individual processes (target costs)(also starting with release 3.1à 7. if the actual costs incurred to date for the production order are less than the credit entry when the goods were received. The determination is done periodically.0) 7.1à Goods in process of manufacture at actual cost SAP Facts The value of goods in process of manufacture is determined basically from the difference between actual costs incurred and actual recouped costs. the remaining goods in process of manufacture are released to inventory. With the final delivery of the ordered lot to the warehouse.1. outside services. This approach involves a determination of variance or an accounting of variances once the final delivery is made. In detail.4. to determine costs for orders that have not yet been settled: • • goods in process of manufacture by order (usually in the context of the close of a period for cost unit accounting) goods in process of manufacture for production orders (determination via balancing ledgers for all orders in the „Production“ object class) (not addressed here) Two methods are used for valuation of goods in process of manufacture per order: • • on the basis of actual costs incurred to date (as of release 2.4. this means the difference between the debit entries for withdrawal of materials. . and implies that the production order complies with the standard rule for general accounting (PP1).4 Goods in process of manufacture Goods in process of manufacture can be reported according to a variety of criteria. as well as credit entries for goods received. for regular accounting of order costs. and overhead. reserves may be established for missing costs. under specific conditions.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà "& 7.

0. or may not be carried as assets. may. In addition. and actual costs or spoilage and variance cannot be ignored.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà "' In comparison to the methods relating to target costs outlined below. the accounting rules for goods in process of manufacture that must be carried as assets must be determined for the corresponding inventory and inventory modification accounts. as a rule. the determination of goods in process of manufacture cannot be combined in the same period with a determination of variance and spoilage. not as accurate as those resulting from target calculation.4. may. incorrect account tracking may result in irregular allocation of processes to the corresponding balance sheet accounts. 7. • • • the actual postings are. the components of the material and production costs of the goods in process of manufacture that must be carried as assets must be determined. starting with release 3.1. Incorrect settings in customization pose significant risks with respect to material and production costs that must. the order number is retrieved via the Allocation area when the goods in process of manufacture are transferred to the FI module. I‚‡r) In order to fulfill the voucher function in the FI module subsequently. and cannot be carried as assets. in accordance with the provisions of commercial and tax law that regulate what must. . In addition.2à Risks In the context of system settings (customizing) of product cost controlling.

7.2. any questions that may arise regarding interfaces must be clarified. The essential conditions for this method are: • • • creating. . recording.4. the determination is made periodically per order.0. Ina manner similar to goods in process of manufacture at actual costs. and ensuring that the target calculation is valid at the time the goods in process of manufacture are determined per order. Furthermore.1. and releasing the target calculation for materials to be produced. The goods in process of manufacture thus established are released once again for delivered materials. starting with release 3. In the context of periodic determination of variances or accounting of goods in process of manufacture. I‚‡r) In order to fulfill the voucher function in the FI module subsequently.4. a determination must be made as to whether the production order complies with the standard rules for periodic accounting (PP2).Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà "( 7. in addition to accurate knowledge of the respective procedures followed in the business of the SAP user. in accordance with the familiar schema.4. the order number is retrieved via the Allocation area when the goods in process of manufacture are transferred to the FI module.2à 7.1à Goods in process of manufacture at target cost SAP Facts The value of goods in process of manufacture by production order is calculated from the quantity reported per procedure multiplied by the target costs for the procedure. ensuring that the material components are correctly allocated to the processes. include inspection of the customizing settings referenced above.3à Auditing steps Important auditing steps. and must be included in the auditing steps.

or may not be carried as assets. 7. Furthermore.4. and cannot be carried as assets.3à Auditing steps Important auditing steps. incorrect account tracking may result in irregular allocation of processes to the corresponding balance sheet accounts. the accounting rules for goods in process of manufacture that must be carried as assets must be determined for the corresponding inventory and inventory modification accounts. .2à Risks In the context of system settings (customizing) of product cost controlling. in accordance with the provisions of commercial and tax law that regulate what must. include inspection of the customizing settings referenced above. In addition. may. Incorrect settings in customization pose significant risks with respect to material and production costs that must.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà # 7. the components of the material and production costs of the goods in process of manufacture that must be carried as assets must be determined. in addition to accurate knowledge of the respective procedures followed in the business of the SAP user. may.4. In addition. in accordance with the familiar schema.2. and must be included in the auditing steps. any questions that may arise regarding interfaces must be clarified.2.

7.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà # 7.5.5 Balance sheet valuation The SAP system offers various methods for determining the price for balance sheets valuation of a material pursuant to tax or commercial law: • • • lowest-value determination according to current market prices lowest-value determination according to marketability lowest-value determination according to range A distinction is made between a one-stage and a multi-stage method: • one-stage method In the one-stage method. the system ph access the following objects: • Incoming goods for orders For each material. The discount determined is deducted from the result of the determination of the lowest value according to market prices.5. or only according to marketability. • multi-stage method In the multi-stage method. or according to range.1à Determination of lowest value by market price SAP Facts To determine the market prices. the lowest value is determined either only according to current market prices. all ordering procedures are included that meet the following criteria: Goods have been received for the order. the lowest value is determined according to current market prices.1à 7.1. coupled with the determination of lowest value according to marketability or according to range. .

therefore.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà #! The quantity delivered is in accordance with the quantity ordered. If information records are to be used as a source for determining the lowest value. For those materials. the prices of all contracts the terms of which ends in the required time period or thereafter are compared. • Orders For each material. Contracts For each material. This is independent of whether orders have already been placed under the contract. and the receipt of invoice all fall within the required time period. it is not meaningful to take the price from the purchasing information record. Materials that are handled with separate valuation are excepted. The price is calculated from the total calculated value divided by the total delivered quantity. Ordering. . independent from the movement type. including additional supplier charges and subsequent charges. the prices of all purchasing information records for which the date of the last price change falls within the required time period are compared. an independent purchasing information record cannot be established for each movement type. • Purchasing information records For each material. guarantees must be in place to ensure that they are well managed. All costs incurred have been taken into account for the accession price. This is independent of whether: • any goods have been received for the order. the receipt of goods. the price in the purchasing information record is. Since the determination of the lowest market price is handled separately for each movement type. the order prices of all orders whose order date falls within the required time period are compared. and an invoice that differs from the order price has been posted.

or if no current market price could be determined. the system determines the lowest value for each movement type. The following overview shows a listing of hyy the reports and tables that are relevant for determining the lowest value. the result of the lowest-value determination can be adjusted in the material master data record.5. the system compares the lowest price determined with the valuation price from the prior year or prior month. an average price is calculated on the basis of these individual prices and the material inventories.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà #" In determining the lowest value. For valuation at the valuation area level. The system enters the following price into the Uh‘ÃyhÃƒ…vprà field or in the field: • • the lowest determined price. For materials having separate valuations. The result is that the system provides a list of materials showing the lowest prices. is puts the valuation price from the prior year or month in the lists.1. if the system cannot determine any current market price. the system looks for the lowest price from the price sources for each material. If a decision is made to proceed with the adjustment.2à Risks The automatic lowest value determination according to market prices can lead to meaningless or incorrect values if the reports and tables on which it is based are not adapted to the realities of the particular company. if it is less than the valuation price. if that is less than or equal to the lowest determined price. Furthermore. with the emphasis on reports and tables used in determining the lowest price according to market prices: . 8‚€€r…pvhyÃyhÃƒ…vprà 7. or the valuation price. either in the Uh‘ÃyhÃƒ…vprà field or in the 8‚€€r…pvhyÃyhÃƒ…vprà field.

Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà ## SÃrÃÂÅÇÆ RMNIWE00 Lowest-value calculation: market prices RMNIWE10 Lowest-value calculation: range RMNIWE20 Lowest-value calculation: marketability RMNIWE80 Lowest-value calculation: market price variance RMNIWE90 Lowest-value calculation: balance sheet value per account UÃhÃiÃyÃrÆ TNIW3 TNIW4 TNIW5 TNIW6 TNIW7 TNIW8 Lowest value: Lowest value: Lowest value: Lowest value: voucher types movement types devaluation according to range devaluation for non-marketability Weighting factors for consumption values (lowest value) Weighting of inventory quantities (lowest value) AÈÅÇÃuÃrÅÃÃvÁÃsÂÅÀÃhÇÃvÂÁ If information records are to be used as a source for determining the lowest value. Incorrect selection in report generation (if a valuation date not close to the balance sheet date is not used). guarantees must be in place to ensure that they are well managed. .

30. • Valuation prices Indicate whether you have adjusted the lowest market prices in the Uh‘Ãyh ƒ…vprà field or in the 8‚€€r…pvhyÃyhÃƒ…vprà field. You can also have all the materials listed for which the difference between the valuation price and the lowest market price is greater than a given percentage value. . select the following options: 7hyhprÆurr‡Ã‰hyˆh‡v‚Ã3ÃG‚r†‡Ã‰hyˆrÃ3Ã6qqv‡v‚hyƒ‡v‚†Ã3ÃHh…xr‡Ãƒ…vpr ‰h…vh‡v‚ You will reach the screen you want. Then enter the materials for which you want to verify the lowest market prices. the price is entered as DM 3.1. it is important to verify the lowest determined prices. in managing an information record by using a number counter. even if the prices from the other price sources and the valuation price range from DM 9 to DM 10.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà #$ 7.90 instead of DM 9. An essential condition for doing that is that the lowest market price has been adjusted in the material master data record. proceed as follows: On the manu screen for valuation.5. For example. if. If you perform the valuation at the accounting area level. In order to verify the lowest market prices. and the criteria by which to do so. any entries made in the valuation area field are ignored. the system does not check to see whether the lowest determined price is „meaningful“. the system will use that price as the lowest price. • Materials Enter the materials for which you want to perform the verification.3à Auditing steps In determining the lowest value according to market prices. For this reason.

Using the Q…‚t…h€Ã3ÃSˆ commands. Based on the listed results for the lowest value determination. . you can now determine the price sources from which the tax or commercial law price is derived. the regularity of the setting in Table UIDX" ‘Lowest value: voucher types’ must be verified (Price source: access to orders). The system lists all materials for which the difference between tax or commercial law price 1 and the valuation price is greater than the threshold value. you will obtain a list of the materials at issue. price changes in the appropriate material master data records may be necessary. Furthermore. If applicable.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà #% • Threshold value Indicate how large the minimum percentage variation between the valuation price and the lowest market price should be for the material to be listed.

up to 99 future months can be included. the system checks to see whether the price of a material should be valued on the basis of a large range.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà #& 7. the following points must be observed: • • In determining consumption based on past values. consumption of the months in the reporting year are included. The range of a material is determined as follows: ShtrÃ2Ãh‰r…htrÃv‰r‡‚…’Ã)Ãh‰r…htrÃp‚†ˆ€ƒ‡v‚ To establish the average inventory and consumption.prior prior period inventory .prior period inventory.the weighted average based on past consumption.2à 7. the following factors apply: The average inventory is a weighted average of: .5. less reserves and plus ordered inventory) Two calculations are possible for the average consumption: . Current period inventory (depending on your input.5. In determining consumption based on forecast values. or . starting with the month in which the forecast is made.2.prior prior year inventory .1à Determination of lowest value by range SAP Facts In determining the lowest price by range. .prior year inventory .the weighted average of forecast values that were calculated during the most recent forecast run The weighting of inventories and consumption is adjusted through the customizing feature. In calculating the average consumption.

• If.is set to zero. For material types for which no discounts are defined. then the range . a percentage discount can be set by which the material is discounted. If the range is not set. in calculating on the basis of forecast values.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà #' • If there is no consumption. Accounting area 1 1 1 1 1 1 1 1 1 1 Material type Range (in months) 2 4 6 10 2 3 4 5 8 12 Percent discount ROH ROH ROH ROH ROH ROH 5% 10% 15% 20% 3% 5% 7% 10% 15% 25% For example. For materials with separate valuations. or . the system looks for the next smallest value. there is no forecast data for a material. the discount for range 8 applies. if inventory is present. by customizing the valuation as a function of accounting area and material type.e. if a range of four months is determined for a material of material type ROH. For a material of material type ROH. but at the level of the valuation header record. The way in which the lowest price is determined depends on whether the lowestvalue determination is handled according to range in one or more stages. and a range of 11 months. entries are made without material type. . if no inventory is present. the determination of lowest value by range is not performed separately for each movement type. the percentage discount is also zero. the system sets the range to zero. Depending on the range. the discount is 7%. 15%. The following table shows a possible setting of this value.is set to maximum. i.

SÃrÃÂÅÇÆ RMNIWE10 Lowest-value calculation: range RMNIWE90 Lowest-value calculation: balance sheet value per account .2. the lowest price can be adjusted in the material master record in the Tax law price 2 field or Commercial law price 2 field. The automatic lowest-value determination according to range can lead to meaningless or incorrect value if the reports and tables used as the basis for them are not adapted to the realities of the particular company. Multi-stage method The lowest value is determined on the basis of the first price stage of the commercial law or tax law price in the material master data record: G‚r†‡Ãƒ…vprÃ2Çh‘p‚€€r…pvhyÃyhÃƒ…vprà ñÃqv†p‚ˆ‡ The result that the system returns is a list of materials having discount records and the lowest prices. 7.5.2à Risks Risks from accepting old data.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà #( Pr†‡htrÀr‡u‚q The lowest value is determined on the basis of the valuation price of the prior year or prior month: G‚r†‡Ãƒ…vprÃ2Éhyˆh‡v‚Ãƒ…vprñÃqv†p‚ˆ‡ Which valuation price is used depends on when you perform the lowest-value determination. because of missing information regarding range and marketability. furthermore.

Incorrect selection in report generation (if a valuation date not close to the balance sheet date is not used). errors may result in the inventory valuation. guarantees must be in place to ensure that they are well managed.3à Auditing steps WÃrÅÃvÃsÃvÃpÃhÇÃvÂÁÃÂÃsÃÃpÈÆÇÂÀÃvÓÃvÁÃtÃÃÆÃrÇÇÃvÁÃtÆ In determining the lowest value by range. For automatic price changes.2. the playback date for the batch input folder is the date as of which the determined valuation price is valid. If the folder is played back later because of an error. consumption determine on the basis of forecast data (future months – starting with the month in which the forecast is made – can be included in determining the lowest value). 7. How the consumption should be weighted in calculating the range is determined in the „Weighting of consumption values“ option in the menu: • consumption determined from materials master data (the months of the reporting year can be included in determining the lowest value).5.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà $ UÃhÃiÃyÃrÆ TNIW5 TNIW7 TNIW8 Lowest value: discount by range Weighting factors for consumption values (lowest value) Weighting of inventory quantities (lowest value) AÈÅÇÃuÃrÅÃÃvÁÃsÂÅÀÃhÇvÂÁ If information records are to be used as a source for determining the lowest value. • . the range is determined from the weighted average of the inventory quantities divided by the weighted average of the consumption quantities.

prior period inventory. How the inventory quantities are weighted in calculating the range is determined in the „Tr‡ÃXrvtu‡vtÂsÃp‚†ˆ€ƒ‡v‚Ã‰hyˆr†“ option in the menu.prior prior period inventory . whereby the weighting is entered for each relevant inventory: . the discounts that are entered without indication of a material type apply to all material types that are not expressly entered here (see Table TNIW5 ‘Discount by range’).prior year inventory . consumption determine on the basis of forecast data 1 the month in which the forecast was made 2 the following month etc.prior prior year inventory . • The corresponding consumption weightings entered for each month in the customizing settings must be verified with respect to the regularity of their determination.current year inventory . The following inventory quantities can be taken into consideration. In each accounting area.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà $ The significance of the month depends on the type of consumption determination. In the ‘HhhtrÃ9v†p‚ˆ‡Ãhpp‚…qvtǂÅhtr¶ customizing menu option. . it must be determined for each accounting area and for each material type how large the percentage discount should be for each range. and on the date entered into the 8ˆ……r‡Ãqh‡r field: • consumption determined from materials master data 1 the last month of the reporting year/month of the 8ˆ……r‡Ãqh‡r 2 the next-to-last month etc.

When this folder is played back. Marketability can be determined in two ways: • via the material voucher In this case. if the percentage of inflows or outflows is smaller than the predetermined percentage value. The marketability of a material is determined on the basis of inflows or outflows of the material. . This percentage is compared to a predetermined percentage value. the valuation price for each material involved is replaced by the lowest determined price.5. In this case. the material is considered marketable.5. and the current material inventory: Hh…xr‡hivyv‡’Ã2ÃU‚‡hyĈh‡v‡’ÂsÃv‚ˆ‡sy‚Ã)Àh‡r…vhyÃv‰r‡‚…’Ãà  The marketability of a material. the material is considered non-marketable. the system checks to see whether the price of a material should be valued on the basis of non-marketability.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà $! WÃrÅÃvÃsÃvÃpÃhÇÃvÂÁÃÂÃsÃÅÃrÉÃhÃyÈÃhÇÃvÂÁÆ For automatic price changes. if it is greater. In so doing. a batch input must be generated. As a rule. the date on which the price change is to be posted must be indicated. 7. this is the date on which the batch-input folder is played back.3à 7.1à Determination of lowest value by marketability SAP Facts In determining the lowest value by marketability. the material is considered non-marketable if one of the two values is less than the predetermined percentage values. the marketability for inflows and outflows gang be examined.3. If you look at inflows as well as outflows. you will obtain a marketability for inflows and a marketability for outflows. therefore. indicates as a percentage how many quantity units have come in or out in relationship to the material inventory.

For materials having a separate valuation. So that non-marketability from previous years is also utilized in the discount. each percentage discount is allocated to each discount marker as a function of the accounting area and material type. therefore. In determination from materials master data records. Through customizing of the valuation.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà $" • via the material master data In this case. using the following rules: If a material is classified as non-marketable for one year. marketability is done at the level of the valuation header record. If a material is classified as marketable for one year. the discount marker is increased by 1. The discount marker. and the lowest price is calculated directly. the lowest-value determination is differentiated by marketability: In determination from material vouchers. Therefore. This process is considerably less time consuming than determination via material vouchers. the discount process runs through a discount marker. In determining marketability. indicates the number of years that the material is considered non-marketable. For the valuation header record. the discount marker is set to zero. only outflows are automatically taken into consideration. only data from the current year or from the prior year are taken into consideration. an average price is calculated based on the lowest prices and the inventories of the individual valuation types. the system uses only materials movements that fall within the reporting year. . marketability is examined separately for each valuation type.

• One-stage method The lowest value is calculated on the basis of the valuation price from the prior year or prior month: G‚r†‡Ãƒ…vprÃ2Éhyˆh‡v‚Ãƒ…vprñÃqv†p‚ˆ‡ Which valuation price is used depends on when the lowest-price determination was made.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà $# Accounting area 1 1 1 1 1 1 1 1 1 1 Material type Discount marker 1 2 3 4 5 1 2 3 4 5 Percentage discount 15% 20% 30% 40% 60% 20% 30% 40% 50% 60% ROH ROH ROH ROH ROH For example. the system uses the valuation price from the prior year. the discount is 30%. and which basis for comparison was selected in calling up the program. . Entries without material types apply to material types for which explicit discounts are not defined. if a new discount marker of 2 is determined for a material of material type ROH. If the determination is made in the first half of the current year. How the lowest price is determined depends on whether the lowest-value determination is done by marketability in one or more stages.

3.If the determination is made in the second half of the current year. Incorrect selection in report generation (if a valuation date not close to the balance sheet date is not used).3.5.3à Auditing steps The following reports and tables must be checked to ensure that their parameters and values are accurate: SÃrÃÂÅÇÆ RMNIWE20 Lowest-value calculation: marketability RMNIWE90 Lowest-value calculation: balance sheet value per account . guarantees must be in place to ensure that they are well managed. • Multi-stage method The lowest value is determined on the basis of the first price stage of the commercial or tax law price in the materials master data record: G‚r†‡Ãƒ…vprÃ2Çh‘p‚€€r…pvhyÃyhÃƒ…vprà ñÃqv†p‚ˆ‡ The result that the system produces is a list of materials with the discount records and the lowest prices. The automatic lowest value determination according to market prices can lead to meaningless or incorrect values if the reports and tables on which it is based are not correctly adapted to the realities of the particular company.5. 7. in addition. or in the commercial law price 2 field. If information records are to be used as a source for determining the lowest value.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà $$ . 7. the system uses the valuation price from the prior period. in the tax law price 2 field.2à Risks Internal and external movement types can be used (table setting errors are possible). the lowest price can be adjusted in the material master data record.

it is determined for each accounting area and for each material type how large the percentage discount per discount market should be.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà $% UÃhÃiÃyÃrÆ TNIW3 TNIW4 TNIW8 Lowest value: Lowest value: voucher types movement types Weighting of inventory quantities (lowest value) 8ÈÆÇÂÀÃvÓÃvÁÃt The customizing settings must be checked for the following menu options: • Determine voucher types Determination of material voucher types that are taken into consideration in determining consumption for calculating the lowest value according to marketability. • Manage discount according to non marketability In this menu item. • Determine movement types Determination of movement types that are taken into consideration in determining consumption (inflows/outflows) for calculating the lowest value according to marketability. . In each accounting area. the discounts entered without indication of a material type apply to all material types that are not expressly indicated below.

and thus longer-term pools can be constructed. changes in the inventory of a material or pool are considered separately for each fiscal year.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà $& 7. because fluctuations in inventory of individual materials can be offset through other materials.4. a new layer is added for that fiscal year. . • Pool LIFO valuation Similar material or materials having the same function are combined in groups. the inventory for the material or pool at the end of the fiscal year is compared to the total of the quantities that appear in the existing layers.5. On the other hand. starting with the newest one. If the inventory at the end of the fiscal year is smaller. the previous layers are reduced in sequence. called pools.5.1à LIFO valuation SAP Facts There are two possibilities for LIFO valuation in the SAP system: • Individual LIFO valuation The materials are valued individually according to the LIFO method. The pool LIFO valuation has advantages over the individual LIFO valuation. In addition. and Index LIFO method In the quantity LIFO method. it is difficult to set up a pool that is meaningful and permissible under tax law. If the inventory at the end of the fiscal year is larger.4à 7. To that end. in the pool LIFO valuation approach. there are two LIFO methods in the SAP system: • • Quantity LIFO method. which contains the quantity and value increase of the material of pool in that fiscal year. and valued together.

VOM . LIFO pool -> materials that are to be valued jointly in the LIFO valuation method are combined via the pool number. depending on the customizing settings. end of prior year Inventory end of prior prior period – Inventory.2à Risks Incorrect customizing settings in the following areas (see IMG: Customizing Whyˆh‡v‚ÃhqÃ6pp‚ˆ‡Ã6yy‚ph‡v‚Ã3ÃTr‡ÃGDAPADAPÀr‡u‚q†). base quantity unit. and . price unit) • • 6yy‚ph‡v‚Ã‚sÀh‡r…vhy†Ã‡‚ÃGDAP‚y† 6††vtvtÇurÃih†v†Ãs‚…Ãp‚€ƒh…v†‚ Assigning the LIFO valuation levels to be compared for a specific fiscal year. and thus an incorrect inventory valuation.which quantities are to be compared in determining the increase in inventory.5.VVM Inventory. the movement types that are relevant for LIFO/FIFO are determined here. • 6††vtvtÇurÃGDAP‚y† (LIFO valuation levels -> can be the accounting area or valuation area.which final inventory is to be valued according to the FIFO method.GJE . in the LIFO valuation method. whereby the governance of the quantity comparison is controlled through specific marking of the ‘quantity comparison’ field: . end of prior prior year Inventory. end of prior year – Inventory. end of prior year The basis of comparison determines: . measurement unit text. in the FIFO valuation method. which may lead to errors in quantity and price determination. All movement types marked as relevant are taken into consideration in determining any increase in inventory.4. .Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà $' 7. • 9r‡r…€vvtÃGDAPADAPÀ‚‰r€r‡† For the LIFO and the FIFO methods. end of prior period – Inventory.

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In the standard method, the following movement types are relevant for the LIFO/FIFO methods:
H‚‰r€r‡Ã‡’ƒr 9r†p…vƒ‡v‚Ã‚sÇurÀ‚‰r€r‡Ã‡’ƒr

101 101 101 101 102 102 102 102 105 105 105 106 106 106 121 122 122 131 131 132 132 501 502 503 504 505 506 511 512

WE Goods receiving for ordering WE Goods receiving to factory WE Goods receiving to account allocation WE Goods receiving to order WE Goods receiving to ordering, cancellation WE Goods receiving to factory, cancellation WE Goods receiving to account allocation, cancellation WE Goods receiving to order, cancellation WE Goods receiving from blocked inventory WE Goods receiving Factory from blocked inventory WE Goods receiving Account allocation from blocked inventory WE Goods receiving from blocked inventory, cancellation WE Goods receiving, Factory, Blocked inventory, cancellation WE Goods receiving, Account allocation, Blocked inventory, cancellation WE Goods receiving, subsequent offsetting WR Return delivery to suppliers WR Return delivery to order WE Goods receiving to factory WE Goods receiving to account allocation WE Goods receiving to factory WE Goods receiving to account allocation WA Goods receiving, Entry without order WR Return delivery, Entry without order WA Entry to quality verification WR Entry to quality verification WA Entry blocked WR Entry blocked WA No-cost delivery WR No-cost delivery

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9r†p…vƒ‡v‚Ã‚sÇurÀ‚‰r€r‡Ã‡’ƒr

521 522 523 524 525 526 531 532 561 562 563 564 565 566 7.5.4.3Ã Auditing steps

WA Entry without production order WR Entry without production order WA Qua. without production order WR Qua. without production order WA Ges. without production order WR Ges. without production order WA By-product WR By-product WA Inventory taking WR Inventory taking WA Inventory taking, Qua. WR Inventory taking, Qua. WA Inventory taking, Ges. WR Inventory taking, Ges.

The auditor must look at the selected valuation method, and the valuation guidelines that are specific to the company. • • • • • • • Examining the following customizing settings (applies for the LIFO and FIFO methods) is particularly important: Determining the LIFO/FIFO valuation levels Determining the base year Determining the final inventory Marking the movements that are relevant to LIFO/FIFO Marking the materials that are relevant to LIFO/FIFO Acceptance of posted data from the fiscal year (relevant only if the LIFO/FIFO settings were not made directly at the beginning of the fiscal year)

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The following reports are relevant for the LIFO method, and should be checked for the regularity of their application and use within the user-specific control and adjustment procedures: RMLIFO00 RMLIFO02 RMLIFO06 RMLIFO10 RMLIFO12 RMLIFO1A RMLIFO1B RMLIFO1C RMLIFO1D RMLIFO20 RMLIFO22 RMLIFO30 RMLIFO32 RMLIFO34 RMLIFO36 RMLIFO39 RMLIFO50 Valuation at the individual level Valuation at the pool level Cost or market value whichever-is-lowest adjustment Presentation at the individual level Presentation at the pool level LIFO balance sheet valuation: presentation and analysis LIFO balance sheet valuation: presentation and analysis LIFO balance sheet valuation: presentation and analysis LIFO balance sheet valuation: presentation and analysis Perform group formation Display group formation Build base layer Form voucher extract Outside data entry for LIFO valuation Accept cost or market value whichever-is-lowest prices Display modification vouchers Clear layer

RMLIFOAL Data part to Archive link for LIFO RMLIFOI0 (not yet explained in release 3.0E)

RMLIFOME Determine conversion factor, quantity units

If the ƒ‚‚yÃGDAPÉhyˆh‡v‚ has been set. 3. In addition. and LIFO pools. Using Q…‚t…h€Sˆ. the system displays statistical information for you. At the valuation menu screen (G‚tv†‡vp†Ã3ÃHh‡r…vhy†ÃHhhtr€r‡Ã3 Whyˆh‡v‚Ã3ÃWhyˆh‡v‚). There are two ways to mark a material for LIFO valuation: • • individual management collective management (automatic allocation to pool) The system offers the following control functions: • • Tu‚Ãhyy‚ph‡v‚ 8urpxÀh‡r…vhyÀh†‡r…Ãqh‡hÅrp‚…q† In the accounting map of the material master data record. proceed as follows: 1. the following fields are displayed in the ‘LIFO data’ area: • • relevant for LIFO/FIFO.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà %! Materials that are to be valued according to the LIFO method must be marked in the material master data record. from the accounting perspective. 2. Fill in the selection screen. select: 7hyhprÆurr‡Ã‰hyˆh‡v‚Ã3ÃGDAPÉhyˆh‡v‚Ã3ÃB…‚ˆƒÃs‚…€h‡v‚ÃÃ3 9v†ƒyh’ You will arrive at the selection screen. you will obtain a list of the appropriate pools with the materials they contain. you may need a list of allocations between materials and pools. . If you want to display which materials belong to which pool.

7rƈ…rÇuh‡Ã‡urÃBE@Ãp‚€ƒh…v†‚Ãv†Ã†r‡Ãs‚…Éhyˆh‡v‚Ã‚sÇurÃp‚€ƒyr‡rqÃsv†phy ’rh…Ä The „ˆhyvsvph‡v‚† relating to compliance with the internal control system (ICS) that. must be set up and described (a component of the procedural documentation). Fill in the selection screen. the implementation of the set-up and operational organization must be checked against the actual functional separation put in place. Proceed as follows: 1. you can generate the following lists: • • Materials that are marked as not relevant for LIFO. and Materials not allocated to a pool. which are of interest for internal reporting purposes. you will obtain the ‘Check pool formation’ lists of the appropriate materials. Specifically. select 7hyhprÆurr‡Ã‰hyˆh‡v‚GDAPÃWhyˆh‡v‚B…‚ˆƒÃA‚…€h‡v‚8urpx You will reach the selection screen. 3.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà %" In order to check whether materials master data records must still be managed for LIFO valuation. Using Q…‚t…h€Sˆ. 2. must be examined. pursuant to the Sound Accounting Principles for Computer-Assisted Accounting Systems (GoBS). The following qualifications are relevant in this matter: . with information on: accounting area valuation area material number material type quantity unit inventory quantity inventory value ‘No Pool’ marker ‘No LIFO/FIFO marked’ marker The GJE comparison is used for valuation of the inventory at the end of the fiscal year. The VOM comparison or the VVM comparison is used to be able to perform interim valuations in the current fiscal year. At the valuation menu screen.

Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà %# Aˆp‡v‚†Ã…ryh‡vtǂ« Rˆhyvsvph‡v‚ Q…vprÃpuhtr† Hh‡r…vhy†Ãr‡…’…ryrh†r GDAPÉhyˆh‡v‚ G‚r†‡‰hyˆrÃqr‡r…€vh‡v‚ F_BKPF_BLA F_BKPF_BUK F_BKPF_BLA F_BKPF_BUK M_LIFO_MLY M_NIWE_BIL Voucher types Accounting areas Voucher types Accounting areas LIFO valuation Lowest value determination The standard version of SAP contains the following profiles for „Valuation/Account Allocation“: M_BILA_ALL M_BILA_ANZ Management qualification for balance sheet valuation Display qualification for balance sheet valuation UurƇhqh…qÃT6Qłsvyr†Ãhyh’†Ãt…h‡Ãhˆ‡u‚…v“h‡v‚Ãs‚…Ãhyy…thv“h‡v‚hy ˆv‡† .

Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà %$ 7.5. a determination is made as to whether the FIFO price should be adjusted in the materials master data record. The valuation of the inventory value is thus oriented toward the most recently received items. as well as the FIFO value. The FIFO method can be used in a number of ways: • Listing of the FIFO values of specific materials By implementing the FIFO valuation. for the selected period. • adjustment of the FIFO price (possibly after the lowest-value comparison) in the materials master data record In implementing the FIFO valuation.1à FIFO valuation SAP Facts FIFO valuation (first in – first out) assumes that the stocks that were procured or manufactured first are consumed or sold first. the system determines the FIFO values of the desired materials. a determination is made as to whether a lowest-value comparison should be performed. As a result.5à 7. and • Difference with respect to the inventory value the net value on the basis of the lowest-value determination (if you perform the FIFO valuation using the lowest-value comparison) the totals per inventory account for each valuation or accounting area • the totals per valuation or accounting area lowest-value comparison of the FIFO value after the lowest-value determination is completed In implementing the FIFO valuation.5. The Tax law valuation price 3 field and the Commercial law valuation price 3 field are available for this purpose. This results in an inventory valuation using recent prices.5. . you obtain a list that contains the following information: the final inventory and the value of the final inventory by material.

7. . and thus to incorrect inventory valuation.5.e.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà %% • Revaluation of the material. The tables listed below are used for both the LIFO and FIFO methods.5. a date must be assigned. the following reports are used in the standard method. see also the SAP BC/FI manual).3à Auditing steps In the FIFO valuation. individual material LIFO Material layers LIFO Pool layers The regularity of the REORG implementation must be checked on the basis of the reports generated.5. replacing the current value with the FIFO value In implementing the FIFO valuation. they must be checked for the regularity of their composition and use within the userspecific control and adjustment procedures: RMFIFO00 RMFIFO20 RMFIFO32 Balance sheet valuation according to the FIFO method Mark materials (Mark materials as relevant for FIFO) Create voucher extract (Voucher extract for initial construction of the MYMP table) Delete valuation data RMFIFO50 The ABAP RMFIFO50 performs to a REORG for the following tables: TMYMP TMYML TMYPL LIFO Period inventories. based on the ‘rec/client’ parameter settings and customizing settings for reports of changes.2à Risks Incorrect customizing settings that lead to errors in determining quantities and prices. 7. i. Changes in these tables must be noted in a report (verification of correct use of parameters in table reporting.5. as of which the change is to become effective. The price changes are made when the folder is played back. a batch-input folder can be generated for a price change. In this case.

so the usual auditing steps apply in this area. and for overstocks of raw materials. The sales market is fundamentally authoritative for unfinished and finished products. and operating supplies. the value of the delivery claim is determined according to the regulations that apply to the valuation of the particular objects. in the context of the general audit. packing costs. and capital service costs (retrograde valuation). 7. The anticipated sales profit must be reduced for loss-free valuation by non-operating expenses. for example.5. If the content of the transaction is the procurement of an asset that must be carried as an asset. auxiliary materials. for raw materials.6à Loss-free valuation The principle of loss-free valuation is based on valuation from the sales market perspective. Automatic determination of loss-free valuation is not supported by the SAP system. Both the procurement market and the sales market are authoritative for trade goods (double authority). .5. individual material LIFO-relevant materials LIFO Pool layers 7. usually according to the (lower) replacement price (see also §249 HGB [Civil Code]).7à Reserves for impending losses Reserves for impending losses from pending procurement transactions must be created if and to the extent that the value of the delivery claims as of the balance sheet date is less than the value of the compensation owed.Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà %& TMYML TMYMP TMYMS TMYPL LIFO Material layers LIFO Period inventories.

lines 1 and 2).Release T6QÃ6ˆqv‡ÃBˆvqryvr†ÃS"HH ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà ÃÃÃÃÃÃÃÃÃÃÃÃÃÃà "@ Current #!((& Author‘ 6FÃS@W Page ÃÃÃÃÃÃÃà %' Reserves must be created in the commercial balance sheet for procurement transactions regarding liquid asset items. if: • • the value as of the balance sheet date resulting from the exchange or market price. paragraph 3. or the value as of the closing date of the financial statement to be attributed to the ordered asset items falls below the agreed purchase price (§253 HGB [Commercial Code]. .

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