Step by Step Guide To MM Configuration in Sap

Material
Management
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Contents
2. Organizational Structure .......................................................................................................... 8

2.1 Company ....................................................................................................................................... 9
2.2 Company Code............................................................................................................................. 11
2.3 Plant ............................................................................................................................................ 16
2.4 Storage Location .......................................................................................................................... 20
2.5 Purchase organization.................................................................................................................. 22
2.6 Assign company code to Company ............................................................................................... 23
2.7Assign Plant to Company Code ...................................................................................................... 24
2.8. Assign Purchase Organization to Company Code ......................................................................... 24
2.9 Assign Purchase Organization to Plant ......................................................................................... 25
2.10 Assign Standard Purchase organization to Plant ......................................................................... 25
3. MASTER DATA ........................................................................................................................ 26

3.1Material Master ........................................................................................................................ 26
3.1.1Define Output Format of Material Number ................................................................................ 28
3.1.2 Industry Sector.......................................................................................................................... 29
3.1.3 Material Types .......................................................................................................................... 30
3.1.4 Define Number Range for each Material type ........................................................................... 35
3.1.5 Maintain Company Codes for Materials Management............................................................... 38
3.1.6 Maintain Field Selection for Data Screens ................................................................................. 38
3.1.7 Assign Fields to Field Selection Groups ...................................................................................... 39
3.1.8 Material Groups ........................................................................................................................ 41
3.1.9 Maintain Attributes of System Messages .................................................................................. 41
3.1.10Define Shipping Instructions .................................................................................................... 42
3.11 Define Purchase Value Keys ....................................................................................................... 42
3.1.12 Transactional Data of Material Master .................................................................................... 43
3.2 Vendor Master ........................................................................................................................ 46

3.2.1 Define Account Group and Field Selection ................................................................................. 47
3.2.2 Define Number Ranges for Vendor Master Records .................................................................. 51
3.2.3 Define Payment Terms .............................................................................................................. 52
3.2.4 Check Inco Terms ...................................................................................................................... 54
3.2.5 Message Controls of Vendor Master ......................................................................................... 54
3.2.6 Transaction Data of Vendor Master........................................................................................... 55
3.3 Purchase Info Record .......................................................................................................... 56

3.3.1 Define Number Ranges ............................................................................................................. 58
3.3.2 Define Screen Layout ................................................................................................................ 59
3.3.3 Define Price History .................................................................................................................. 60
3.3.4 Transaction Data of Purchase Info record .................................................................................. 61
3.4 Source List ............................................................................................................................... 62

3.4.1 Define Source List Requirement at Plant Level .......................................................................... 62
3.4.2 Transaction data for Source List ................................................................................................ 63
3.5 Quota Arrangement .............................................................................................................. 63

3.5.2 Define Quota Arrangement Usage............................................................................................. 64
3.5.3 Transaction Data of Quota Arrangement ................................................................................... 65
4. Procurement Cycle .................................................................................................................. 66

4.1 Purchase Requisition ........................................................................................................... 68
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4.1.2 Define Document type .............................................................................................................. 70
4.1.3 Define Process Time .................................................................................................................. 73
4.1.4 Define Screen layout at document Level ................................................................................... 74
4.1.5 Texts for Purchase Requisition .................................................................................................. 76
4.1.6 Set up authorization Check for G/L account .............................................................................. 77
4.1.7 Transaction Data of Purchase Requisition ................................................................................. 77
4.2 Request for Quotation .......................................................................................................... 78

4.2.2 Define Document types............................................................................................................. 80
4.2.4 Maintain Quotation Comments ................................................................................................. 82
4.2.5 Texts for RFQs / Quotations ...................................................................................................... 82
4.2.6 Transaction Data of Request for Quotation ............................................................................... 83
4.3 Purchase order ....................................................................................................................... 84

4.3.2 Define Document types............................................................................................................. 87
4.3.4 Set Tolerance Limit For price Variance ...................................................................................... 88
4.3.5 Texts for Purchase order ........................................................................................................... 90
4.3.6 Set up authorization Check for G/L account .............................................................................. 91
4.3.7 Transaction Data of Purchase order .......................................................................................... 91
4.4 Release Procedure ............................................................................................................... 93

4.4.1 Edit Characteristic ..................................................................................................................... 94
4.4.2 Edit Class .................................................................................................................................. 96
4.4.3 Define Release Procedure for Purchase order ........................................................................... 97
4.5 Contracts ................................................................................................................................. 107

4.5.1 Define Number Ranges ........................................................................................................... 108
4.5.2 Define Document types........................................................................................................... 108
4.5.3 Define Screen layout at document Level ................................................................................. 109
4.5.4 Transaction Data of Contracts ................................................................................................. 109
4.6 Scheduling Agreement ...................................................................................................... 110

4.6.1 Define Number Ranges ........................................................................................................... 110
4.6.2 Define Document types........................................................................................................... 110
4.6.3 Define Screen layout at document Level ................................................................................. 111
4.6.4 Transaction Data of scheduling agreement ............................................................................. 111
4.7 Pricing Procedure ................................................................................................................ 112

4.7.1 Define Access Sequence .......................................................................................................... 113
4.7.2 Define Condition Type............................................................................................................. 114
4.7.3 Define Calculation Schema ...................................................................................................... 117
4.7.4 Define Schema Group ............................................................................................................. 118
4.7.5 Define Schema Determination ................................................................................................ 121
4.7.6 Define Transaction/Event key ................................................................................................. 122
4.7.7 Maintain Condition Table ........................................................................................................ 123
4.8 Version Management ......................................................................................................... 127

4.8.1 Setup Version Management for Purchase Requisition ............................................................. 127
4.8.2 Setup Version Management for External Documents .............................................................. 128
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4.8.3 Define Reason for Changes ..................................................................................................... 129
4.9 Reporting ................................................................................................................................ 131

4.9.1 Define scope list...................................................................................................................... 131
4.9.2 Define default values for transactions ..................................................................................... 133
4.9.3 Define selection parameters ................................................................................................... 133
4.9.4 Define default values for transactions ..................................................................................... 135
4.10. Message Determination................................................................................................. 135

5. Inventory Management ........................................................................................................ 139
5.1. Define Plant Parameters ........................................................................................................... 143
5.2Define Number Range assignment for material & Physical inventory documents ........................ 145
5.3Define Number Range assignment for Reservation ..................................................................... 147
5.4Field Selection for MIGO ............................................................................................................. 149
5.5Field Selection for Movement type ............................................................................................. 150
5.6Settings for Transactions and Reference Documents ................................................................... 151
5.7. Movement Types ...................................................................................................................... 153
5.8. Copy Change Movement Type .................................................................................................. 155
5.9. Record Reason for Movement Type .......................................................................................... 157
6. Goods Receipts ............................................................................................................................ 158
6.1. Set Tolerance Limits .................................................................................................................. 161
6.2. Create Storage Location Automatically...................................................................................... 162
6.3. Create Purchase order automatically ........................................................................................ 163
6.4. Define Screen Layout ................................................................................................................ 164
6.5. Set Delivery Completed Indicator .............................................................................................. 165
6.6. For GR Based Invoice, Reversal of Invoice Despite invoice ......................................................... 166
6.7. Set Expiration Date Check ......................................................................................................... 167
6.8. Price Difference for Sub contracting orders at Goods Receipts .................................................. 168
6.9. Transaction Data of Goods Receipts .......................................................................................... 169
7. Goods issues and Transfer Postings .............................................................................................. 178
7.3. Allow Negative Stocks ............................................................................................................... 183
7.4. Set up Dynamic Availability Check ............................................................................................. 185
7.5. Transaction Data of Goods issues/Stock Transfer/Transfer
Postings .................................... 188
7.5. Automatic Movements ............................................................................................................. 190
7.8. Set Expiration Date Check ......................................................................................................... 192
7.12. Reservation............................................................................................................................. 193
7.13. Define Default Values.............................................................................................................. 194
7.14. Set Dynamic Availability Check ................................................................................................ 195
7.15. Transaction Data of Reservation ............................................................................................. 196
7.16. Define Field Selection for Material Document List ................................................................... 197
7.17 Authorization Check for Storage Location ................................................................................ 198
7.18 Authorization Check for G/L Account ....................................................................................... 199
7.19 Define Attributes of System Message ....................................................................................... 199
8. Physical Inventory ........................................................................................................................ 200
8.1. Define Number Assignment for Material Physical Inventory Document ..................................... 201
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8.2. Define Field Selection for Physical Inventory ............................................................................. 202

8.3. Default Values for Physical Inventory ........................................................................................ 202
8.4. Settings for Physical Inventory .................................................................................................. 203
8.5. Default Values for Batch Input .................................................................................................. 205
8.6. Allow Freezing of Book Inventory Balances in Storage Location ................................................. 206
8.7. Cycle Counting .......................................................................................................................... 206
8.8. Transaction Data of Physical inventory ...................................................................................... 207
9. Valuation and Account Assignment................................................................................. 209

9.1Account Determination............................................................................................................... 209
9. 1.1 Define Valuation Control ........................................................................................................ 215
9. 1.2 Group Together Valuation Areas ............................................................................................ 216
9. 1.3 Define Valuation Classes ........................................................................................................ 217
9. 1.4 Define Account Groupings for Movement types ..................................................................... 220
9. 1.5 Configure Automatic Postings ................................................................................................ 220
9.2 Purchase Account Determination ............................................................................................... 224
9.2.1 Activate Purchase Accounts in Company Code ........................................................................ 224
9.2.2 Calculation of Value Purchase Accounts .................................................................................. 225
9.2.3 Separate Accounting Documents for Purchase Accounts ......................................................... 226
9. 3 Split Valuation........................................................................................................................... 230
9. 3.1 Activate Split Valuation .......................................................................................................... 230
9. 3.2 Configure Split Valuation ........................................................................................................ 231
Assignment Process: ........................................................................................................................ 231
10. Invoice Verification .............................................................................................................. 237

10.1 Maintain Number Assignments for Accounting Documents ...................................................... 241
10.2 Maintain Number Range Intervals for Invoice Documents ........................................................ 243
10.3 Tax Treatment in Invoice Reduction ......................................................................................... 245
10.4 Maintain Default Values for Tax codes ..................................................................................... 245
10.5 Configure How Unplanned Delivery Costs are posted ............................................................... 246
10.6 Activate Direct Postings to G/L Accounts and Materials ........................................................... 247
10.7 Set Check for Duplicate Invoice ................................................................................................ 248
10.8 Determine Payment Block ........................................................................................................ 248
10.9 Set Tolerance Limits ................................................................................................................. 249
10.10 Activate Stochastic Block ........................................................................................................ 250
10.11 Set Stochastic Block ............................................................................................................... 251
10.12 Define Attributes of System Messages ................................................................................... 252
10.13 Transaction Data of Invoice Verification ................................................................................. 253
11. External Service Management........................................................................................ 254

11.1 Define Organizational Status for Service categories .................................................................. 255
11.2 Define Service category............................................................................................................ 256
11.3 Define Number Ranges ............................................................................................................ 257
It is similar to regular number assignment. ...................................................................................... 257
11.4 Define Number Ranges for Service Entry Sheets ....................................................................... 257
11.5 Source Determination and Default Values ................................................................................ 258
11.6 Transaction Data of Service Purchase Process .......................................................................... 259
12. Special Stock Process in Material Management ............................................................... 264

12.1 Consignment............................................................................................................................ 264
12.2 Subcontracting ......................................................................................................................... 268
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12.3 Returnable Transport Packing .................................................................................................. 273

12.4 Pipeline Handling ..................................................................................................................... 274
13. Special Scenario in Material Management ........................................................................ 276

13.1 Automatic G/L account in Service Purchases ............................................................................ 276
13.2 Reporting in Purchasing ........................................................................................................... 278
13.2 1. Define Default Values for Transactions ................................................................................. 278
13.2 2. Define Selection Parameters ................................................................................................ 278
13.3 Vendor Evaluations .................................................................................................................. 280
13.3.1 Define Weighing Keys ........................................................................................................... 282
13.3.2 Define Criteria....................................................................................................................... 282
13.3.3 Define Scope List ................................................................................................................... 283
13.3.4 Maintain Purchase Organization Data ................................................................................... 284
13.4 Import Purchase Process .......................................................................................................... 285
1. SAP Overview
SAP Stands for:
System, Anwendungen, Produkte in der Datenverarbeitung (in German)
Systems, Applications & Products in Data Processing (in English)
FACTS ABOUT SAP AG
Founded by five former IBM employees in 1972 and head quartered in Walldorf,
Germany.
Leading global provider of client/server business software solutions.
Number one vendor of standard business application software, with a worldwide market
share of 31%.
Fourth-largest independent software supplier in the world.
SAP R/3
R/3 employs a 3-tier client/server architecture;
The database layer resides on the central server.
The Application layer holds the processing logic of the system.
The Presentation layer, typically on personal computers.
R/3 APPLICATIONS
R/3 applications are categorized into 03 core functional areas ;
Logistics
Financial
Human Resources
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LOGISTICS APPLICATIONS
Logistics is the largest of the three functional areas. It includes the following modules
MM
Materials Management
SD
Sales and Distribution
WM
Warehouse Management
PP
Production Planning
LO
General Logistics
QM
Quality Management
FINANCE APPLICATIONS
FI
Finance
CO
Controlling
IM
investment Management
HUMAN RESOURCE S
PA
Personal Administration
PD
Personal Development
INFORMATION INTEGRATION THRO ERP SYSTEM
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2. Organizational Structure
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2.1 Company
Client
The client is a commercial, organizational unit within

the R/3 System, with its own data, master records, and
set of tables.
From a business perspective, the client forms a
corporate group.
Configuration:
R
T-code
SPRO
SAP AG
MenuPath
SPRO IMG Enterprise StructureDefinition Financial

accounting Define Company
Click
on new entries
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Maintain above details, then enter save.
Whenever
you find this icon
while entering the value, you need to select the value from the drop down list. For drop down
click on the displayed icon or press F4.
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2.2 Company Code
Configuration:
T-code
EC01
Menu Path
SPRO IMG Enterprise StructureDefinition Financial

accounting Define Company code
Creat
e your company codes based on the reference (company code 1000) delivered with the
standard system. SAP recommends using the function "Copy Company Code" to create your
company codes.
Double click on copy, delete, check company code
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Click on Copy Org Object
Enter from company code 1000 in ides system and 0001 in real time.
To company code will be company code which youre going to be create.
Click on Yes
Click on Yes
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Enter the country currency

Keep continue then save the company code.
Continue
Go to the back to configuration >
Double click on Edit Company Code Data
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Go to position
Enter
Click on details
Click on address icon
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Maintain complete address as per the company letter head.

Continue
Save.
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2.3 Plant
Plant
A plant is an organizational logistics unit that

structures the enterprise from the perspective of
production, procurement, plant maintenance, and
materials planning.
A plant is manufacturing facility or branch within a
company.
Configuration:
T-code
SAP AG
OX10
Menu Path
IMG Enterprise StructureDefinitionLogistics GeneralDefine

Copy, Delete, Check plant.
Double click on Define plant

Click on new entries
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Maintain above details then click on address icon
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Maintain plant address

Then continue
Save.
Double click on Copy, delete, check plant
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Click on copy org objects
Enter from plant 1000 in IDES system and 0001 in real time.
To plant will be which was created in the earlier step.
Continue
Click on yes
Keep continues
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Click on NO
2.4 Storage Location
Storage Location
An organizational unit that allows the differentiation of

material stocks within a plant.
Inventory Management on a quantity basis is carried
out at storage location level in the plant.
Physical inventory is carried out at storage location
level.
Configuration:
T-code
OX09.
MenuPath
SAP AG IMG Enterprise StructureDefinitionMaterial
managementMaintain Storage Location.
Plant: HIL1
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Press enter
Select all storage location then delete

Save.
New entries
Save.
The above screen shots provides the storage locations maintained for the plant of CLIENT
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2.5 Purchase organization
Purchasing Organization / Group

Purchasing
Organization
A purchasing organization is an organizational level that

negotiates conditions of purchase with vendors for one or
more plants or companies. It is legally responsible for
completing purchasing contracts.
A purchasing group is the key for a buyer or group of
buyers responsible for certain purchasing activities.
Configuration:
T-code
OX08
SAP AG
Menu Path
IMG Enterprise StructureDefinitionMaterial

managementMaintain Purchase organization.
Go to new entries
Enter purchase org code and description then save.
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T-code
SPRO
Menu Path
IMG Material Management Purchasing Purchase Group
Maintain purchase group code and description. No need to assign to any organizational
objects.
Assignments
2.6 Assign company code to Company
Configuration:
T-code
SPRO
Menu Path
SPRO IMG Enterprise StructureAssignment Financial

accounting Assign Company code to Company
Go to position find out your company code then assign company.
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2.7Assign Plant to Company Code

In the IMG activity "Assignment Plant - Company Code" you assign each plant to a company
code.
A plant can only belong to one company code.
Configuration:
T-code
OX18.
Menu Path
IMG Enterprise StructureAssignmentLogistic

GeneralAssign Plant to company code.
Click
on new entries
Entry company code and plant then save.

2.8. Assign Purchase Organization to Company Code
You can assign a purchasing organization to one company code. This is company-specific
purchasing.
Configuration:
T-code
OX01.
Menu Path
IMG Enterprise StructureAssignmentMaterial

ManagementAssign Purchase organization to company code.
Go to
position find out purchase org then assign company code.
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2.9 Assign Purchase Organization to Plant

Assignment of purchasing organizations to the plants, for which they are responsible, so that
One purchasing organization procures for several plants.
Plant specific purchase org: one purchase org is responsible for one plant ( plant is assigned to
only one purchase org).
Central purchase org: one purchase org is assigned to more than one plant ( for plant more than
one purchase org are assigned).
Configuration:
T-code
OX17.
Menu Path

ManagementAssign Purchase organization to plant.
Go
to new entries
2.10 Assign Standard Purchase organization to Plant

If several purchasing organizations procure for a certain plant, you can define one of them as
the standard purchasing organization for the transactions "pipeline procurement", "consignment"
and "stock transfers".
In source determination for stock transfers and consignment, the system automatically utilizes
this standard purchasing organization. In the case of goods issues of pipeline materials, the
purchasing info records of the standard purchasing organization are read.
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Configuration:
T-code
SPRO
Menu Path

ManagementAssign standard Purchase organization to plant.
Go
to position find out plant then assign one purchase org as a standard purchase org.
3. MASTER DATA
Master datas in material management as below
1. Material Master
2. Vendor Master
3. Purchase info record
4. Source list
5. Quota arrangement
6. Condition records
3.1Material Master
Master data:
The data in consolidation system that remains unchanged over a long period of time called
master data.
The material master contains information on all the materials that a company procures or
produces, stores, and sells.
It is the company's central source for retrieving material-specific
Data. This information is stored in individual material master records.
The data in a material master record can be divided into two categories:
Data of a purely descriptive nature
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This is data with information content such as name, size, or dimension.
Data that the system uses to perform a control function

This is data such as MRP type and price control.
Since different departments in a company work with the same material, but each department
uses different information on the material, the data in a material master record is subdivided by
user department.
Material Master: Organizational Levels
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Material Master Tables
3.1.1Define Output Format of Material Number

For every material that your company uses, create a material master record. This record is
uniquely identified by a material number. Maximum length of material number will be 18
characters (numeric and alpha numeric ), it includes special characters and space also.
External number assignment
Internal number assignment
Configuration:
T-code
OMSL
Menu Path
IMG Logistic General Material Master Basic settings

Define Output Format of Material Numbers
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If leading zeros is active: if material number ranges are internal, zero will be valid.
Ex : material number length 5 characteristics
Material number range 1 10000
Material number will be 00001
You should enter the material number 00001 every time in the transaction.
If leading zero is not activated, system generates the material number 1.
o
Lexicographical: if lexicographical is activate leading zero will not be updated in

the database. If not leading zero will be updated in the data base tables like
MARA.
Best combination is lexicographical is activate and leading zero is not activate.
Material number template: as per the desired requirement you can maintain the
material number template for creation of material number. It will be used for only
external number ranges and complete system. It is not possible to restrict with
material type wise.
3.1.2 Industry Sector
When you create a material master record, classify the material according to industry
sector and material type.
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Industry sectors have control functions in the R/3 System. It determines the screen
sequence and field selection in a material master record. Once you have assigned an
industry sector to a material, you cannot change the industry sector again afterwards.
Configuration:
T-code
OMS3
Menu Path
IMG Logistic General Material Master Field Selections

Define Industry Sector
Sele
ct relevant industry sector
Click on copy as
Save.
3.1.3 Material Types
Certain attributes of material called material type or grouping of materials with same basic
attributes or characteristics.
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Control functions in the material type
Field selection group should be assigned to material type.
Quantity and value updation should be activated against the plant wise . if not activated
quantity and value is not updated in the master master. While doing the transactions
system ask for account assignment .
Only Quanity updation check is required for Non valuated materials (UNBW) . Quanitity
and value updation check is not requird for non stock materials (NLAG).
Material number ranges should be assigned for material type . As per the requirement
number ranges will be assigned to group then material type is assigned to group.
Standard SAP Material types : Below materials are important standard material types.
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S.No
1
2
3
4
5
6
7
9
10
11
12
13
14
15
Material Type
DIEN
ERSA
FERT
HALB
HAWA
HERS
HIBE
KMAT
LEIH
NLAG
PIPE
ROH
UNBW
VERP
Description
SERVICES
SPARE PARTS
FINISHED GOODS
SEMI FINISHED GOODS
TRADING GOODS
MANUFACTURER PARTS
OPERATING SUPPLIES
CONFIGURABLE MATERIAL
RETURNABLE PACKAGING
NON-STOCK MATERIAL
PIPELINE MATERIAL
RAW MATERIAL
NON- VALUATED MATERIAL
PACKAGING MATERIAL
Configuration:
T-code
OMS2
Menu Path

Material Type Define Attribute of Material Type
It is not recommended to use the standard material types as it is. Create new material types as
per the requirements. As per the standard sap prefix must be Z or Y.
For creation of new movement type
Select required reference material type
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Click on copy as
Rename the code and description of material type then press enter
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Enter
Save.
Select the material type click on details
Change the system settings as per the requirements like

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User departments, procurement type and field selection

Then double click on
Then activate qty update and value update as per the requirements.
Similarly create all required material types.
3.1.4 Define Number Range for each Material type
It is possible to define external or internal number ranges for the materials. For internal number
range system will allow for only numeric, for external alphanumeric.
Configuration:
T-code
MMNR
Menu Path

Material Type Define number range for each material type
Click on change groups
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Go to menu bar > group > insert
Maintain the text then for number ranges,

If internal number ranges press F4 for number range help then select the ranges ( use small
range).
If external number range enter external number
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Continue
Find out group which was created
Then select the group

Then find out your material type
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Select material type > click on select element group
> click assign element group
save.
3.1.5 Maintain Company Codes for Materials Management
Maintain your company codes. There are two situations in which you do this: When setting up
company codes for materials management. When changing the Allow back posting or Disallow
back posting indicators. By using of this configuration setting it is possible to do the inventory
posting within two months, i.e. current month and previous month.
Configuration:
T-code
OMSY
Menu Path
IMG Logistics-GeneralMaterial MasterBasic Settings

Maintain company codes for material management
Find out your company code then enter current year and month
Save.
If ABP is activate, we can post inventory transaction in the previous month.
3.1.6 Maintain Field Selection for Data Screens
To define whether a field is hidden or displayed, or whether an entry is mandatory or optional in
material master maintenance, you must assign the field to a field selection group. Define field
selection group by using of standard field selection available in the material type which is
created. As per SAP standards use prefix as Z or Y for field selection group. Make necessary
change for the fields like required, optional, display, hide as per the requirements. It is always
recommended to assign one field selection group to one material type.
Configuration:
T-code
OMS9
Menu Path
IMG Logistics-GeneralMaterial Master Field Selections

Maintain Field Selection for Data Screens
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For creation of new field selection group > go to material type OMS2 transaction > check the
field reference group.
Select the same field reference group
Click on copy as
Rename field reference group same as material type.

Enter
Save.
Go to material type OMS2 > find out the material type > assign field reference group > save.
3.1.7 Assign Fields to Field Selection Groups
If any field selection contains more than one field but as per the our requirement we want to use
only one field the we will use this configuration.
Configuration:
T-code
OMSR
Menu Path
IMG Logistics-GeneralMaterial Master Field Selections

Assign Fields to Field Selection Groups
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Click on sort field selection groups
Select field selection group then remove the field selection number against the field wise.
Ex: my requirement is material group field only.
Save.
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3.1.8 Material Groups

Material Groups are used for reporting purpose. These are done at Client Level and do not
belong to any Identity. Multiple material groups can be assigned under one material type but not
vice- versa.
Configuration:
T-code
OMSF
Menu Path
IMG Logistics-GeneralMaterial MasterSettings for Key

FieldsDefine Material groups.
Click on the new entries
Maintain material group code (9 digits) and description then save.

3.1.9 Maintain Attributes of System Messages
When processing material master records, the system issues a number of system messages
containing important user information. In this activity, you define how the SAP system handles
these messages. You have the following options:
The message can be suppressed.
The message can be displayed as a warning.
The message can be displayed as an error message.
Configuration:
T-code
OMT4
Menu Path
IMG Logistics-GeneralMaterial MasterBasic Settings Define

Attributes of System Messages
Based on the requirement select the message number > maintain the message status
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3.1.10Define Shipping Instructions

These are certain instructions in purchase orders issued to Vendors. When the relevant goods
receipts are entered, the extent to which the vendor has complied with these instructions can
then be noted. Shipping Instructions should be assigned in Purchase value key. It is possible to
assign one shipping value key to one purchase value key.
Configuration:
T-code
SPRO.
Menu Path
IMG Material Management PurchasingMaterial

MasterDefine Shipping instructions.
3.11 Define Purchase Value Keys

In the material master record, the following rules are stored in the form of Purchase Value Keys.
They decide the following:
The issue of reminders and urging letters (expediters) with respect to nearly due and
overdue deliveries
The admissibility of over- and under deliveries in the goods receipts.
Order acknowledgment requirements for PO items
Shipping/packaging instructions
Vendor evaluation
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Purchase value key should be assigned in material master, under the purchasing value, then
only the purchase value key functionality will be work.
Configuration:
T-code
SPRO
Menu Path
IMG Material Management Purchasing Material Master

Define Purchase Value Keys
For definition of new purchase value key

3.1.12 Transactional Data of Material Master

Material View
Module Responsible
Basic Data 1
Material Management
Basic Data 2
Material Management
Classification
Production Planning
Purchasing
Material Management
Foreign Trade: Import Data
Material Management
Purchase Order Text
Material Management
Sales: Sales Org. Data 1
Sales: Sales Org. Data 2
Sales: General/Plant Data
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Foreign Trade: Export Data
Sales Text
MRP1
Production Planning
MRP 2
Production Planning
MRP 3
Production Planning
MRP 4
Production Planning
Forecasting
Production Planning
Work Scheduling
Production Planning
Production Resources/Tools
Production Planning / Plant Maintenance
General Plant Data / Storage 1
Material Management
General Plant Data / Storage 2
Material Management
Warehouse Management 1
Warehouse Management 2
Quality Management
Quality Management
Accounting 1
Finance
Accounting 2
Finance
Costing 1
Controlling
Costing 2
Controlling
Page 44 of 369
Note: Material views and responsible module will be change depend on the project or client
requirements.
Material Master contains 27 material views
Maximum length of material description is 40 characteristic including space and special

characteristics.
Basic data 1 , basic data 2 , Purchasing , General Plant Data / Storage 1, General Plant
Data / Storage 2, Accounting 1 and Accounting 2 views are required for practice of MM
transactions .
Once view is extended to the material it is not possible to de activate the material view.
Base unit of measure, Batch Management, valuation class field information it cant be
changed after occurring of transactions. However provision is there for change of above
field information provide clear all transactions which are occurred so for , like purchase
order , stocks, reservations etc.
Price control indicator : Indicates the price control used to valuate the stock of a
material. You have the following options:
Standard price ( S ) Used for manufacturing products
Moving average price ( V) Purchased products
General recommendation will be if material is to purchase and manufactured then also

use Moving average price
Dont changes the price control if stock is available, if price control is changed system
generates an accounting document for price difference account. if required to change
price control follow the appropriate procedure .
Material Master Transaction codes as follows
MM01 : Create Material Master
MM02 : Change Material Master
MM03 : Display Material Master
MM04 : Display Changes in Material Master
MM06 : Flag for Deletion of Material
MMSC : Extend storage locations
MM50 : Extend Material Views
MM60 : List of Material Master
MMPV : Close the periods
MMRV : Allow back Postings
MMAM :Change Material type
MM17 : Mass Maintenance
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3.2 Vendor Master

The vendor master database contains information about the vendors that supply an enterprise.
This information is stored in individual vendor master records. A vendor master record contains
the vendors name and address, as well as data such as:
The currency used for ordering from the vendor
Terms of payment
Names of important contact persons (sales staff)
Since, to the accounts department, vendors are generally creditors (accounts payable), the
vendor master record also contains accounting information, such as the relevant control account
(reconciliation account) in the general ledger.
Therefore, the vendor master record is maintained by both Accounting and Purchasing.
Vendor Master Structure

Vendor master records contain important data on your vendors. You can also store data in the
vendor master record that applies to certain specific organizational levels (e.g. company code,
purchasing organization, plant) within your enterprise.
Vendor Master Record

Vendor
master
record
General data
Purchasing
data
1. General data
Accounting data
R
Data that applies equally to each company code within your enterprise (address, telephone
SAP AG
number,
language in which you communicate with your vendor, etc.).
2. Company code data
Data kept at company code level (payment transaction data or number of control account, for
example).
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3. Purchasing data
Data that is of importance with regard to your enterprises purchasing activities and which is
kept at purchasing organization level (such as contact person or terms of delivery).
Vendor account group is control function in the vendor master.
Vendor Master Tables:
3.2.1 Define Account Group and Field Selection

You must assign each vendor whose data you wish to store in the SAP System to an account
group. Vendor account group is control function in the vendor master.
Control functions:
The type of number assignment and the number range from which the account number
used by the system to identify the vendor is assigned
Whether or not a one-time vendor is involved
Field selections and Which partner determination schemas are valid
Partner functions and vendor sub range
Configuration:
T-code
OMSG
Menu Path
IMG logistics-GeneralBusiness partnerVendorControl

Define account groups and field selection (vendor).
For creation of new vendor account group
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Select KRED > click on copy as
Rename the vendor group code and description then press enter
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Select the group > click on details

For partner functions maintain partner schema group, for Vendor sub-range relevant is active.
For field selections
Double click on field status group
Double click on select group
Maintain field selection as per the requirement & Save.
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Example for vendor account groups in the real time.

Vendor
Account
Group
Account Group Description
Number range (Internal)
ZDCP
Domestic Capital goods
810000 -810999
ZDOM
Domestic Vendors
811000-811999
ZICP
Import Capital goods
820000-820999
ZIOM
Import Raw Material
821000-821999
ZFRE
Freight vendor
830000-830999
ZSER
Service Providers
840000-840999
ZSUB
Job Work Providers
850000-850999
ZEMP
Internal Employees
860000-869999
ZVEN
Casual (One time)
870000-870999
Code for vendor account group will be 4 characteristic (numeric or alpha numeric).
One Time Vendor Concept: Vendor master data is not maintained completely,
Ex : Machine is breakdown at night , purchase department is not available at that time .
Maintenance department person go outside and purchase a required material for the machine in
the market .In sap vendor master data is not available hence we are not purchased the material
in open market. This one time vendor purchases. Vendor address and other communication
details will not be maintained in the vendor master, these details will be maintained in purchase
order or invoice verification. like canteen material purchases and refreshment material
purchases.
Only one vendor is created on the name of one time vendor. Standard vendor account group is
0099.
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3.2.2 Define Number Ranges for Vendor Master Records

We define the number intervals of the number ranges for vendor master records. When a
vendor master record is created, a unique number identifying the master record is assigned.
The number comes from the number range provided for the account group.
There are two ways in which numbers can be assigned:
Internal number assignment
Here the SAP R/3 System automatically assigns a consecutive number from the number
range defined.
External number assignment
Configuration:
T-code
OMSJ.
Menu Path

Define Number ranges for vendor master record.
Click on intervals
Click on intervals
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Maintain number object and number range

Save.
Click on
Find out your vendor account group
Assign number range object.

Note: in vendor master you can assign only one number range either internal or external
where as material type you can assign both.
3.2.3 Define Payment Terms
Control functions in the payment terms are
Cash discount percentages
Periods allowed for payment (discount-qualifying periods)
Payment Blocking and Payment modes
These terms of payment are stored under an alphanumeric key.
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You enter this key in the vendor master record in order to specify terms of payment for a
vendor.
Configuration
T-code
OME2
Menu Path
IMG Material ManagementPurchasingVendor

masterDefine Terms Of Payment.
Maintain payment term code and description

Maintain account type: payment is used for purchase (vendor) or customer.
Default for baseline date: which date will be consider for calculation of baseline date for
payment.
If any cash discounts, maintain cash discounts & Save.
Page 53 of 369
3.2.4 Check Inco Terms

"Inco terms" are international rules for the interpretation of the most commonly used terms of
foreign trade. Inco term in simple term is risk sharing between vendor and customer. In
particular, the Inco terms regulate
The division of costs, and
The transfer of risks.
Configuration:
T-code
SPRO
Menu Path
IMG Material ManagementPurchasingVendor

masterCheck Inco terms
For creation of new Inco terms go to new entries
3.2.5 Message Controls of Vendor Master

You can set system messages to appear as you require them.
You can
determine whether a message is issued as a note in the dialog box or in the footer
change warnings into error messages
switch off warnings and error messages
EX: Flag for deletion vendors should not be used in procurement process.
Configuration:
T-code
SPRO
Menu Path

change message control for vendor master
Page 54 of 369
3.2.6 Transaction Data of Vendor Master

GR-Based Invoice Verification:
Indicator specifying that provision has been made for goods-receipt-based invoice verification
for a purchase order item or invoice item.
Service-Based Invoice Verification:
Indicates that service-based invoice verification is defined for a purchase order item.
In service-based invoice verification, the quantities and values of services performed and
ordered to date are available for checking purposes. As in the case of invoice verification for
materials, you are able to change quantities and values within the permitted tolerances.
In addition, if service-based invoice verification is active, the acceptance posting is carried out at
the level of the services in the entry sheet, and the quantities and values of the accepted and
invoiced services are shown in the PO history.
XK01: Create vendor Master
XK02: Change vendor Master
XK03: Display Vendor Master
XK04: Display Changes of Vendor Master
XK05: Block Vendor Master
XK06: Flag for Deletion of vendor Master
XK07: Change Vendor Account Group
MKVZ: List of Vendors
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3.3 Purchase Info Record

The purchasing info record (also referred to in abbreviated form as the "info record") contains
information on a specific material and a vendor supplying the material. For example, the
vendor's current pricing is stored in the info record.
The combination of both material master and vendor master is called as purchase info record.
The info record allows buyers to quickly determine:
Which materials have been previously offered or supplied by a specific vendor
Which vendors have offered or supplied a specific material
Whatever data stored in purchase info record will follow in to the purchase order
document
Purchase info record (PIR) will be created at plant level and purchase org level.
PIR is valid for all the plants covered by the purchase org or for a single plant with one
purchase org. If PIR is created at purchase org level then PIR is valid for all plants which
are assigned to the purchase org.
PIR can be created manually or automatically.
PIR can be created manually by using of transaction ME11( Create Purchase info
record).
PIR Can be created automatically while creation of purchase order to vendor for the
material under the purchase org and plant. Info update field is checked by default in the
system hence PIR is created automatically while creation of purchase orders. if PIR is
available system update the price difference in the same PIR which is already available.
Purchase info record Structure:
The info record contains:
Data such as prices and conditions that you can store for the relevant purchasing
organization or plant
The number of the last purchase order
Tolerance limits for over deliveries and under deliveries
The planned delivery time (lead time required by the vendor to deliver the material)
Vendor evaluation data
An indicator showing whether the vendor counts as the regular vendor for the material
The availability period during which the vendor can supply the material
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The info record contains quotation and ordering data. The data in the info record (prices for
example) is also used as default data for purchase orders.
For instance, you can store the current and future quotation conditions (discounts, fixed costs
etc.) in the info record.
Types Of Purchase Info Record
.
Standard
A standard info record contains information for standard purchase orders. The info
records can be created for materials and services with and without master records.
Subcontracting
A subcontractor info record contains ordering information for subcontract orders. For
example, if you subcontract the assembly of a component, the subcontractor info record
would include the vendor's (subcontractors) price for assembling the component.
Pipeline
A pipeline info record contains information on a vendors commodity that is supplied
through a pipeline or pipes (for example, oil or water) or by similar means (for example,
electricity through the mains). The info record contains the vendors price for the
consumption of such commodities by the buyer ("pipeline withdrawals"). You can store
withdrawal/usage prices for different validity periods.
Consignment
A consignment info record contains information on a material that vendors keep
available at their own cost on the orderers premises. The info record contains the
vendors price for withdrawals by the orderer from consignment stock. As in the case of
the pipeline info record, you can store prices for different validity periods
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Purchase info record Tables

EINA: PIR Main Data
EINE: PIR Purchase org Data
KONH: Condition Header
KONP: Condition Item
3.3.1 Define Number Ranges

The SAP System manages purchasing info records as documents.
Each transaction is assigned to a number range group. You define the number range interval
for each group. You can also specify whether the number range is assigned by the user at the
time of entry (i.e. externally) or by the system (i.e. internally).
Configuration:
T-code
OMEO.
Menu Path
IMG Material ManagementPurchasingPurchasing info

recordDefine Number Ranges.
Click on maintain groups
If required create a new group and assign number ranges for purchase info record as per the
requirements. Number range assignment part is similar to material master.
Note: it is not possible to purchase info record for material group ( non stock material ( without
material code) in ME11 transaction.
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3.3.2 Define Screen Layout

Make the settings for the screen layout and field attributes In the purchasing info record, you
can control the attributes of input fields. You can specify which fields:
Require an entry (required-, or mandatory-entry field)
Permit an entry (optional-entry field)
Do not allow an entry (display-only, or hidden field)
Control of the input attribute of a field depends on the screen layout in PIR.
Configuration:
T-code
SPRO
Menu Path

recordDefine Screen layout
So for the material master and vendor master we did field selection based type not t code wise.
In purchase info record we need to do the field selection based on t code wise.
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Select the t code then click on details
Double click on field selection groups
Select the fields then make it as a required/optional/display/hide. For hide dont select the check
box.
Save.
3.3.3 Define Price History
Specify whether the purchase order price history is to be updated with the net price or the
effective price.
Set the indicator if the order price history is to be updated with the effective price.
Ex :
QTY
TOTAL
Gross price 100
10
1000
Tax
10
`40
Net Price
104
10
1040
Freight
10
10
100
Effective Price114 10
1140
By default system update net price in PIR history.
Page 60 of 369
Configuration:
T-code
OMHP
Menu Path

recordDefine Price history.
3.3.4 Transaction Data of Purchase Info record

While creation of Purchase info record following field information as below
Vendor Number, Material Number and purchase org are required. User need to select the
purchase info record type by default standard info record was selected.
ME11: Create Purchase info record
ME12: Change Purchase info record
ME13: Display Purchase info record
ME14: Display Changes Purchase info record
ME15: Flag for Deletion Purchase info record
ME1X: Buyer negotiation Sheet by vendor
ME1Y: Buyer negotiation Sheet by Material
Reports
ME1L: Purchase info record by Vendor
ME1M: Purchase info record by Material
ME1C: Purchase info record by Material Group
***ME1P: Order Price History
ME1E: Quotation Price History
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3.4 Source List
It is also a master record and gives a list of vendors available for a particular material
and checks the validity.
It specifies the possible source of supply for a material over a given period of time.
In the source list you can block a vendor for a single material or fix the vendor.
Source list can be activated at material level and plant level. Always recommended to
activate at material level only.
For activation of source list at material level go to material master > purchasing view >
check source list. If source list is activated without source list it is not possible to create a
purchase order. It is possible to create a purchase order which are vendors are
maintained in the source list.
Source list can be created manually or automatically from outline agreements or

purchase info record by using info update.
Provision is not available for marinating of number ranges to source list.
It is not possible to maintain the source list for one time vendors.
Table for source list is EORD.
3.4.1 Define Source List Requirement at Plant Level

This is the combination of Plant and Material that is necessary for Purchasing Operations; which
determines the Vendor from which Material is to be bought. The source list lets you determine
the source that is valid (effective) at a certain time.
Configuration:
T-code
OME5
Menu Path
IMG Material ManagementPurchasingSource

listDefine source list requirement at plant level.
If source list is activated at plant, source list must be maintained for all materials in the plant.
Page 62 of 369
3.4.2 Transaction data for Source List
While creation of source list material number and plant are required.
It is possible to activate the source list for material after occurring of transaction, in this
case source will be generated automatically when click on generate icon in the source
list. While generation of source list system consider the all purchase info records.
ME01: Maintain Source List
ME03 : Display Source List
ME04 : Display Changes in Source List
MEOM : Source List by Materials
3.5 Quota Arrangement

The system can make use of a certain mechanism to determine which source is to be assigned
to a material requirement. The assignment of requirements to different vendors and plants is
based on quota arrangements. 60% of a material requirement can be automatically assigned to
one vendor and the remaining 40% to another, for example.
In this process, you display the material master record (quota arrangement field) and a quota
arrangement. To see how the system assigns sources on the basis of quota arrangements, you
enter two manual purchase requisitions and have the sources assigned. The system assigns
different sources in accordance with the quota arrangement.
Create a group for quota arrangement and assign numbers to group. Assign element Q to the
quota arrangement Group.
Configuration:
T-code
OMEP
Menu Path
IMG Material ManagementPurchasingQuota

Arrangement Define Number ranges
Number assignment for quota arrangement is similar to material master.
Page 63 of 369
3.5.2 Define Quota Arrangement Usage

Below elements are consider for quota arrangement usage.
Purchase orders
Scheduling agreement delivery schedules
Planned orders
Purchase requisitions
Materials planning and control
In this step, you specify for each material master record which quota arrangement rule is
allowed. You group the usage combinations you have chosen under keys. You then store these
keys at plant level in the material master record.
Configuration:
T-code
SPRO
Menu Path
IMG Material ManagementPurchasingQuota

Arrangement Define Quota arrangement Usage
Select the quota arrangement usage then click on details
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If required create new quota arrangement usages.

3.5.3 Transaction Data of Quota Arrangement
Quota arrangement usage indicator should enter in the material master under
purchasing view.
MEQ1 : Maintain Quota Arrangement
MEQ3 : Display Quota Arrangement
MEQ4 : Display Changes Quota Arrangement
MEQM : Quota Arrangement By Material
Page 65 of 369
4. Procurement Cycle
Procurement Environment
Requisition
8
Vendor
invoice
Payment
Requirements determination
Purchase
order
? 10
20
30
Invoice Verification
Procurement
Goods receipt
Source determination
Vendor selection
Purchase
order
10
20
30
Purchase order monitoring
10
20
30
Order processing
1. Determination of Requirements
SAP AG
Requirements will be passed manually to the purchase department.
In case of Material requirement planning system generate the Purchase requisition

automatically against demand or Consumption based planning.
The material requirements are identified by the user departments or material

requirement planning.
2. Source Determination
Identify the potential source for the supply
This is based on the past orders, existing information, other communication methods
like internet, paper, etc.
3. Vendor Selection
Selection of vendors by comparing the prices, delivery date and credit period of
various quotations.
Page 66 of 369
Sending the rejection letters for non selected vendors.
4. Purchase order Processing
Create the purchase order for the selected vendors against the purchase order
requisition or manual purchase order.
Purchase order contains required material qty, delivery date, shipping conditions and
price which agreed in negotiation.
5. Purchase order Monitoring
Sending the purchase order to supplier by using of various communications methods

like email, fax, courier, etc.
Sending the reminders to vendors in a pre defined intervals.
6. Goods Receipts
Confirming the receipts of the goods.
Compare the goods receipts quantities with the vendor invoice quantities.
Inform the limit over or under deliveries of order goods.
7. Invoice Verification
Invoices are checked for accuracy of prices and content.
Verifying the quantities against the GR and price against purchase order.
8. Payment Processing
Processing of vendor payment against the vendor invoice.
Purchasing Document
A purchasing document is used for purchasing of materials or services structure of the
purchasing documents.
It is common for all purchasing documents. In earlier versions (i.e before 4.6 c) below three
segments are as three screens.
In latest versions all three screen information is in a single screen with tabular this is called as a
enjoy transactions.( The transaction code ends with N).
Header
Item over view
Item details
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1. Header data consist of document type, Document number, document date etc.
2. Item overview consist of material number, qty, delivery date , plant , location,
purchase group, price etc.
3. Item Details consist of material group, unit of measure, vendor material number
and account assignment etc.
4. All documents are subject to the release of documents (approval process).
Types of Purchasing Documents
1. Internal purchasing document : Purchase requisition
2. External purchasing documents are Request for Quotation (RFQ), Purchase order,
contracts and schedule agreements.
3. Contracts and schedule agreements are called as outline agreements.
4.1 Purchase Requisition
A purchase requisition is a request or instruction to Purchasing to procure a certain quantity of a
material or a service so that it is available at a certain point in time.
There is no vendor details should be filling in the purchase requisition.
Purchase requisition (PR) can be created more than one line item or more than one
plant.
PR does not influence finance updating.
PR can be created manually or automatically. PR is created by using of manual inputs

in ME51N transaction. PR is created automatically if you setup the material requirement
planning.
PR can be converting in to Request for quotation, purchase order and outline

agreements.
Release procedure can be configured for purchase requisitions at header level and item
level. it is possible to configure release procedure for rest of purchasing documents at
header level only.
New text elements can be configured.
Table are EBAN Purchase requisition and EBKN for PR with account assignment.
The item category determines the field selection and whether any additional data screens are
shown.
Standard
Subcontracting
Consignment
Stock transfer
External service
An item of a requisition contains the quantity and delivery date of the material to be supplied or
the quantity of the service to be performed.
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For items to be supplied by subcontractors, you can specify the necessary input materials or
components that are to be provided to the subcontractor for assembly or processing in respect
of each delivery date stipulated.
It is an internal document: it is not used outside the enterprise.
Requisition Processing
MRP Run
(MD01/MD02/MD03)
Plant Stock
Check
No Stock
Create Planned
order
In Background
Convert planned order

into Purchase requisition
(MD14)
Process Purchase
Requisition
(ME52N)
Stock exists
End
Manual (Non Production Items)

Create Purchase requisition
manually for non production
items
(ME51N)
Quotation Processing
Create Purchase Order with Respect

to Quotation for Approved Vendor
(ME21N)

The SAP System manages Purchase Requisition as documents. Each document type is
assigned to a Number range Interval. This interval is further assigned to a Number series. This
series is generated whenever a new Requisition is Created. These number series are either
assigned by the user at the time of entry (i.e. externally) or by the system (i.e. internally).
Configuration:
T-code
OMH7
Menu Path
IMG Material ManagementPurchasingPurchase

RequisitionDefine Number ranges.
Click on change intervals
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Click on insert interval
Maintain object number and number range then click on insert

Save.
4.1.2 Define Document type
The SAP System manages purchase requisitions as documents. You can group requisitions into
any number of document types.
Control functions in the document are
Define the item interval
Define allowed item categories
Define link purchase requisition-document type
Field selections
Control for Release procedure at header level.
Purposes for creating new document are above control functions and reporting purpose. It
differentiae the various kinds of purchase requisitions. Number range object should be assigned
in the document type.
Standard Document types are
NB: Standard PR and
FO: Service PR
Page 70 of 369
Configuration:
T-code
SPRO
Menu Path

RequisitionDefine Document types.
Example: Below purchase requisition types are used in the real time
Document Type
Description
Number range
RM
Purchase Requisition- Raw Materials
0010000000 - 0019999999
CI
Purchase Requisition Consumable
0020000000 - 0029999999
NB
Purchase requisition other than PRD

materials
0030000000 - 0039999999
AS
Asset Purchase Requisitions
0040000000 - 0049999999
FO
Service Purchase Requisition
0050000000 - 0059999999
SU
Job work Purchase requisitions
0060000000 - 0069999999
Select NB then click on copy as
Rename the code from NB to desired code and description

Item interval: item number of purchase requisitions intervals, if item interval is 10 PR line item
number will be 10,20,30,40. If item interval is 1 PR line item number will be 1,2,3,4,.
Maintain internal number range assignment, which is created in the earlier screen.
Page 71 of 369
Click on copy all

Continue
Select the document type then double click on allowed item categories
Kept required allowed item categories then delete rest of the item categories. Item category is
nothing but type of procurement.
Overall release: This is one of the pre requisite for configuration of release for purchase
requisition at header level.
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Select un required item categories then click on delete > Enter > all entries
Select allowed item category then double click on link PR. This configuration will be explained in
the RFQ concept.
4.1.3 Define Process Time
Define the plant-specific purchasing department processing time.The processing time is the
time required by the buyer to convert a requisition into a purchase order. The processing time is
taken into account during the scheduling process for externally procured materials within the
framework of materials planning and control.
Configuration:
T-code
OMEW
Menu Path

RequisitionProcessing time.
Page 73 of 369
Maintain processing time against the plant

4.1.4 Define Screen layout at document Level
For all external purchasing documents and purchase requisitions, you can specify the input
attributes of fields by using field selection keys.
A field selection key determines whether a field is:
A mandatory-entry field (input required)
An optional-entry field (input possible)
A display field (field displayed only, input not possible)
Suppressed
Field selection group should be assigned to PR document type. Always recommended to create
one field selection for one PR document type and assign vice versa.
Configuration:
T-code
SPRO
Menu Path

RequisitionDefine Screen layout at document level.
For the PR document type contains the field selection group is NBB. It recommended to create
a new field selection group for each document type.
Select NBB then click on copy as
Page 74 of 369
Rename field selection group as a PR document type > enter
Select field selection group the click on details
Double click on field selection keys
Maintain the field selection >save.
Page 75 of 369
Go to document type configuration
Assign the field selection group to relevant PR document type> save.

4.1.5 Texts for Purchase Requisition
Define the text elements as per the client requirements; text element is nothing but text heading
in the document. Text element is a cross client object
T-code
SPRO
Menu Path

RequisitionTexts for purchase requisitions Define text types
For definition of new text element > click on new entries
Enter code sequence number and text heading name >save.
Page 76 of 369
4.1.6 Set up authorization Check for G/L account

As per the business scenario of service PR or shot text PR user has to enter the G/L account in
the purchase requisition. While entering the g/l system checks whether the user has the posting
authorization for the specified account.
T-code
SPRO
Menu Path

Requisitionset up authorization check for G/L account
4.1.7 Transaction Data of Purchase Requisition
While creation of purchase requisition required inputs are document type, material
number, qty, delivery date, plant, storage location, requestor and purchase group.
Account assignment A - asset should be entered in for creation of asset purchase

requisition. Asset number should be entered in the account assignment tab which is
located in the purchase requisition line item level.
Account assignment K (cost center) or F (Order) should be entered in for creation of

consumable purchase requisition for non stock & non valuated materials. Cost center
& G/l account should be entered in the account assignment tab which is located in
the purchase requisition line item level.
Account assignment K (Cost center) or F (Order). Item category D (services) should

be entered in for creation of service purchase requisition. Cost center & G/l account
should be entered in the account assignment tab which is located in the purchase
requisition line item level.
Account assignment K (Cost center) or F (Order). Item category L (sub contracting)

should be entered in for creation of Job work purchase requisition only for standard
room and tool room. . Cost center & G/l account should be entered in the account
assignment tab which is located in the purchase requisition line item level.
Components should be entered in components list which is located in the material
tab at purchase order in item level.
Item category L (sub contracting) should be entered in for creation of Job work
purchase requisitions for product processing. Components should be entered in
components list which is located in the material tab at purchase order in item level.
ME51N: Create Purchase Requisition
ME52N: Change Purchase Requisition
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ME53N : Display Purchase Requisition
ME54N : Individual release Purchase Requisition
ME55 : Collective release Purchase Requisition
ME5A: List of Purchase Requisition
ME5K : List of Purchase Requisition by account assignment
MSRV2 : List of Purchase Requisition by service
4.2 Request for Quotation

A request for quotation (RFQ) is an invitation extended to a vendor by a purchasing organization
to submit a quotation (bid) for the supply of materials or performance of services.
An RFQ consists of the RFQ header and the items.
RFQ header
Contains general information on the RFQ, such as the vendors address
Items
Contain the total quantities and delivery dates for the materials or services specified in the RFQ.
QUOTATION
A quotation is an offer by a vendor to a purchasing organization regarding the supply of
materials or performance of services subject to specified conditions.
A quotation is legally binding on the vendor for a certain period. The quotation is the vendors
response to a request for quotation issued by a purchasing organization.
Release procedure can be configured for RFQ at header level of the document.
Tables for external purchasing documents
Page 78 of 369
Quotation Processing
Request for
Quotation
(ME41)
Vendor 1
Maintain Vendor 1
Quotation
(ME47)
Request for
Quotation
(ME41)
Vendor 2
Purchase
Requisition
(ME51N)
Maintain Vendor 2
Quotation
(ME47)
Price
Comparision
(ME49)
Approved
Create Purchase Order for

approved Vendor
(ME21N)
Rejected
Request for
Quotation
(ME41)
Vendor 3
Maintain Vendor 3
Quotation
(ME47)
Reject Remaining
Quotations
(ME49 or ME42)

These are the documents where in the requirement of Material is sent to multiple Vendors for
their Quotation of the Price and Delivery time and such other factors. Then after receiving the
Quotation from all the Vendors before the submission date, they are updated into the system
and are converted into Purchase orders for the Vendor who has given the Best required
parameters.
The Number Ranges for RFQ and Quotation are maintained as Internal Number Ranges
(Generated by the system) according to the Document type. These are maintained at Client
Level. They are also not Transportable Objects and are to be maintained in each Client where
they are being used.
Configuration:
T-code
OMH6
Menu Path
IMG Material
ManagementPurchasingRFQ/QuotationDefine Number
ranges.
It is similar to purchase requisition number range creation.
Click on change intervals
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Maintain number object and number range. It is recommended to maintain 10 digit number
range for all external purchasing documents.
4.2.2 Define Document types
The SAP System manages RFQ as documents. You can group RFQ into any number of
document types. Control functions in the document are
Define the item interval
Define allowed item categories
Define link purchase requisition-document type
Field selections
differentiae the various kinds of request for quotations. Number range object should be
assigned in the document type.
AB: Request for GP bid
AN: RFQ
Configuration:
T-code
SPRO.
Menu Path
IMG Material ManagementPurchasing

RFQ/QuotationDefine Document types.
Page 80 of 369
Document type configuration is similar to PR document type configuration.

Configuration of link PR to document type:
Select item category then double click on link pr documents
Maintain purchase requisition with item category > save. Based on this configuration we can
restrict conversion of PR to RFQ.
For all external purchasing documents and purchase requisitions, you can specify the input
attributes of fields by using field selection keys.
Suppressed
Field selection group should be assigned to RFQ document type. Always recommended to
create one field selection for one RFQ document type and assign vice versa.
Configuration:
T-code
SPRO
Menu Path
IMG Material ManagementPurchasingRequest for

QuotationDefine Screen layout at document level.
Page 81 of 369
Standard field selection is ANA, do the configuration and assignment part is similar
to PR.
4.2.4 Maintain Quotation Comments

In this step, you can define internal comments relating to quotations. This enables you to note in
the detailed data on a quotation the Acton that you have taken against a Quotation.
Configuration:
T-code
OMES
Menu Path
IMG Material ManagementPurchasing

RFQ/QuotationMaintain Quotation comments.
If required create new quotation comments > click on new entries > enter code and description.
4.2.5 Texts for RFQs / Quotations
T-code
SPRO
Menu Path
IMG Material ManagementPurchasingRFQ/

QuotationTexts for RFQs/ Quotations Define text types for
Header texts
Page 82 of 369
For definition of new text elements > click on new entries > enter sequence no and text
description name. To avoid confusion and data entry mistake it is recommended to rename the
text elements instead of new creation.
For item text:
T-code
SPRO
Menu Path

QuotationTexts for RFQs/ Quotations Define text types for
item texts
description name.
4.2.6 Transaction Data of Request for Quotation
Standard Request for Quotation and Quotation Process will be included.
User can generate RFQ with reference to Purchase Requisition, RFQ and any outline
agreement.
RFQ and the Quotation form a single document. Internal number ranges provided by
SAP with 10 digit.
You create an RFQ either manually or by referencing an already existing RFQ,

requisition, or outline purchase agreement.
Page 83 of 369
You specify which vendors are to receive the RFQ. A separate document is then created
for each addressee.
You enter the prices and conditions set out in the quotation submitted by the vendor into
the RFQ document.
You carry out a comparative appraisal of several vendor quotations by means of the
price comparison list.
The individual quotations are compared item by item. The mean value quotation
represents the average value of the individual quotes.
You can save the most favorable quotation in info record and send rejection letters to
unsuccessful bidders. Sending of rejection letters to supplier is a manual process.
You can monitor the status of follow-on activities relating to the RFQ and quotation (e.g.
a contract is set up or a purchase order issued).
All the Activities are carried out Manually
Follow the transaction in sequence which is specified below
ME41 : Create Request for Quotation
ME42 : Change Request for Quotation
ME43 : Display Request for Quotation
ME9A: Print Request for Quotation
ME47: Maintain Quotation
ME48:Display Quotation
ME49: Price Comparison

Reports
ME4M: Request for Quotation by Material
ME4L: Request for Quotation by vendor
ME4C: Request for Quotation by Material group
ME4N: Request for Quotation by RFQ number
MSRV4: Request for Quotation by Service
ME4B: Request for Quotation by Tracking
ME80AN: General analysis
4.3 Purchase order

Purchase order is a formal request or instruction from purchase department to a vendor or a
plant to supply or provide a certain quantity of goods or services at or by a certain point of time.
A purchase order consists of a document header and a number of items.
The information shown in the header relates to the entire purchase order For example, the
terms of payment and the delivery terms are defined in the header.A procurement type is
defined for each of the document items. The following procurement types exist:
Page 84 of 369
Standard
Subcontracting
Consignment
Stock transfer
External service
The total quantity of materials to be delivered or services to be performed that is defined in the
purchase order item can be subdivided in the schedule lines into various partial quantities with
the relevant delivery dates.
For PO items to be supplied by subcontractors, you can specify the necessary input materials or
components that are to be provided to the subcontractor for assembly or processing in respect
of each delivery date stipulated.
An item of the procurement type external service contains a set of service specifications.
Outline levels structure the service specifications and service lines determine the quantity
ordered. Value limits are specified instead of service lines for services or work that initially
cannot be specified precisely.
If services covered by an already existing contract are released (ordered, or called off against
the contract), the PO item can contain a value limit relating to the contract in question.
Conditions : Conditions can apply at various levels:
To the entire purchase order
At item level, to the material to be supplied or to the set of service specifications in the
case of services
At service line level for individual services (tasks or activities).
Account Assignment (Open Purchase Orders)

A key indicating whether an item is to be assigned to an auxiliary account (such as a cost
center).The account assignment category determines which account assignment details are
required for the item (for example, cost center or account number).
A
Asset
Sales order
Order
Cost center
Ind. Cust. w/o KD-CO
Network
Project
Project make to order
PO History
Page 85 of 369
The transactions following on from a purchase order are documented in the PO history
on an item-specific basis.
Plant
In the purchase order, each item is destined for a certain plant. Each plant belongs to a
company code, to which the vendors (creditors) invoice is directed.
Texts
You can enter text in a purchase order directly or change texts that are suggested by
the system. There are two kinds of text:
Header texts: apply to the whole document
Item text: apply only to the relevant item
You define which texts appear in which order on printouts in Customizing for
Purchasing. You can enter several header or item texts, which you can identify by your own
codes.
Purchase order Processing

Request for
Quotation
(ME41)
Vendor 1
Purchase
Requisition
(ME51N)
Request for
Quotation
(ME41)
Vendor 2
Maintain Vendor 1
Quotation
(ME47)
Maintain Vendor 2
Quotation
(ME47)
Price
Comparision
(ME49)
Approved

approved Vendor
(ME21N)
Rejected
Request for
Quotation
(ME41)
Vendor 3
Maintain Vendor 3
Quotation
(ME47)
Reject Remaining
Quotations
(ME49 or ME42)

The Number ranges of Purchase Orders have been configured based on the Document Types.
Each document type has a different Number Series. These are Client Specific settings.
The purchase order can be used for a variety of procurement purposes. You can procure
materials for direct consumption or for stock. You can also procure services. Furthermore, the
Page 86 of 369
special procurement types "subcontracting", "third-party" (involving triangular business deals

and direct-to-customer shipments) and "consignment" are possible.
Configuration:
T-code
OMH6
Menu Path

orderDefine Number ranges.
It is similar to RFQ number range configuration

The SAP System manages purchase orders as documents. You can group purchase orders into
any number of document types.
Define item interval
Define allowed follow-on document types
Assign document types to a number range group
Define a number range interval
Choose type of number assignment:

o
Internal
External
differentiae the various kinds of purchase orders.
Number range object should be assigned in the document type.
NB: Standard Purchase order
FO: Service purchase order
UB: Stock Transport Order
Configuration:
T-code
SPRO
Menu Path
IMG Material ManagementPurchasing Purchase

orderDefine Document types.
It is similar to RFQ Document type configuration
Page 87 of 369
Example for real time document type

Document
type
Description
Number ranges
Field selection group
DP
Domestic Purchases
4500000000-4599999999
DPPO
IM
Import Purchases
4600000000-4699999999
IMPO
FO
Framework Order
4700000000-4799999999
FOPO
SU
Job Work
4800000000-4899999999
SUPO
AS
Asset Purchases
490000000-4999999999
ASPO
RO
Return Purchase order
5000000000-5099999999
ROPO

For all external purchasing documents, you can specify the input attributes of fields by using
field selection keys.
Suppressed
Field selection group should be assigned to PO document type. Always recommended to create
one field selection for one PO document type and assign vice versa.
Configuration:
T-code
SPRO
Menu Path

orderDefine Screen layout at document level.
It is similar to RFQ field selection key configuration

4.3.4 Set Tolerance Limit For price Variance
Define the tolerance limits for price variances.
When processing a purchase order, the system checks whether the effective price of a PO item
shows variances compared with the valuation price stored in the material master record. In
addition, it checks whether the specified cash discount value is admissible.
Variances are allowed within the framework of tolerance limits. If a variance exceeds a
tolerance limit, the system issues a warning or error message.
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In the SAP System, the types of variance are represented by the tolerance keys. For each
tolerance key, you can define percentage and value-dependent upper and lower limits per
company code.
Configuration:
T-code
SPRO.
Menu Path
IMG Material ManagementPurchasing Purchase

orderSet Tolerance Limits for Price Variance.
The standard SAP System supplied contains the following tolerance keys:
PE Price variance, Purchasing
o
Tolerance limit for system message no. 207. This message appears if the
specified effective price exceeds the predefined tolerances when compared with
the material price.
Maximum Cash Discount Deduction:
SE Maximum cash discount deduction, Purchasing

o
Tolerance limit for system message no. 231. This is a warning message, which
appears when the specified cash discount percentage exceeds the predefined
tolerances.
For more details
Select line item > click on details
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4.3.5 Texts for Purchase order

T-code
SPRO
Menu Path

QuotationTexts purchase order Define text types for
Header texts
Page 90 of 369
description name. To avoid confusion and data entry mistake it is recommended to rename the
text elements instead of new creation.
For item text:
T-code
SPRO
Menu Path

QuotationTexts for purchase order Define text types for
item texts
description name.
4.3.6 Set up authorization Check for G/L account
As per the business scenario of service PR or shot text PR user has to enter the G/L account in
the purchase requisition. While entering the g/l system checks whether the user has the posting
authorization for the specified account.
T-code
SPRO
Menu Path

Requisitionset up authorization check for G/L account
4.3.7 Transaction Data of Purchase order

Purchase Orders can be created automatically or manually from Purchase Requisitions.
Purchase Order can be created by referencing any existing RFQ, Quotation, PO,
Contract or Scheduling Agreement, Purchase Requisition.
Purchase Order will have Approval Process (Release procedure) at header level.
Page 91 of 369
Detailed terms and conditions will be defined in the system so that it will be automatically
printed in the Purchase order.
Restriction of field selection is different for one document type to another, every
document type has unique field selection group. Restriction of fields will decided based
on the document type.
Changes in the purchase order will be updated in version tab in header of the purchase
order, for Updating of changes in Purchase order it requires version management
activation. Version management will be covered in version management topic in
purchasing.
In condition tab all pricing condition will be appeared based on the vendor selected in the
purchase order, user has to enter required input in conditions. All taxes related
information is available in the invoice tab, if user press F4 on the tax code it will appear
all possible tax classification, user has to select appropriate tax code in the purchase
order. For viewing of tax calculations in the purchase order user has to click on display
taxes tab in invoice tab in the purchase order line item.
Octroi is a special tax in the state of Maharashtra, user has to enter the percentage of
Octroi in the purchase order, and this will be loaded to material cost. While entering of
the tax user has to enter the service tax amount which will be collected by Octroi agent
from company.
All planned delivery cost will be loaded to material cost.
Purchase order number and purchase order line item are mandatory fields in the F-48
transaction for Making of advance payments to vendor against the purchase order.
Purchase against F form and C forms are tracked in sap system, for identification of
Purchases against the F form using tax code.
Generally Price variance for purchasing order is maintained 10 % upper to 10 % lower
Limit.
Generally Max. Cash disc. Deduction for Purchase orders is satisfied 10 % Upper to 5 %
Lower Limit.
Info update check box is checked for all the purchase order except return purchase
orders, functionality is system create the purchase info record automatically and update
the price history in the purchase info record.
It is possible to maintain the vendor retentions in the purchase order header level or item
level.
If we want to post the GR with beyond tolerance limits change the purchase order
delivery tolerance limits in the delivery tab. If delivery tolerances are changed in the
purchase order it will effect vendor rating. if changes are not effected to vendor rating
instead of changing delivery tolerances change purchase order quantity .
Goods Receipts indicator should be check in the purchase order > item details >delivery
tab, if this indicator is not your unable to post the GR against the Purchase order.
Transaction codes
ME21N: Create Purchase order
ME22N: Change Purchase order
ME23N: Display Purchase order
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ME29N: Individual release Purchase order
ME28: Collective release of Purchase order
ME9F: Print Purchase order
Reports
ME2M: List of Purchase order by Material
ME2N: List of Purchase order by PO number
ME2C: List of Purchase order by Material Group
ME2B: List of Purchase order by Tracking Number
MSRV3: List of Purchase order by services
ME2S: Planned Vs Actual Comparison
ME2K: List of Purchase order by Account Assignment
ME80FN: General Analysis
ME81N: Analysis of order values
ME2O: SC Stock at Subcontractor
4.4 Release Procedure

Release Procedure is nothing but approval process. Release procure can be configured for all
purchasing documents. For Purchase requisition Release procedure can be configured at
header level and item level. However it is possible to configure only one level (header level and
item level) for one Purchase requisition. Tables are used for configured release procedure is
CEBAN,
For external purchasing documents release procedure can be configured at header level only.
Tables are used for configured release procedure is CEKKO, CEKPO. Release procedure can
be Configuring for Service entry also.
How do you set p a release procedure for POs?
To set up the release procedure, you must make a series of settings in Customizing. This
section provides you with an overview of the necessary activities.
You must perform the following steps:
Create characteristics
Define Class and assign Characteristics
Create release group
Create release code
Create release indicator
Create release strategy
In one Release strategy it is possible to use maximum 8 release codes.

Characteristics and classes are not transported .it should be created as same as development
system.
Page 93 of 369
4.4.1 Edit Characteristic

In this step, you create characteristics for a release procedure for purchase orders (POs).
Classification characteristics are the criteria for a release condition. If the criteria of a release
condition are satisfied, the associated release strategy is assigned to the purchasing document
Example
Release condition for release strategy 01
Characteristic
Characteristic value
Total net value of PO Above Rs 10,000

If the total value of a purchase order exceeds Rs10, 000, release strategy 01 is assigned to this
PO.
Configuration:
T-code
CT04
Menu Path
IMG Material ManagementPurchasing Release

procedure for purchase order Edit Characteristic
Enter characteristic name > click on create
Page 94 of 369
Enter description; data type will be selected based on nature of field.

Number of characteristic = 4 digits
Value assignment: multiple values: while assigning the values for classification in release
strategy system will give you the facility to assign multiple values.
Click on additional data
Enter table cekko and field of bsart. Document type is maintained at purchase order at header
level. Purchase order header level data is maintained at ekko table. C for communication
structure.
Enter
Page 95 of 369
Click on restrictions
Maintain class type 032
Enter the value then save.

Similarly create all required characteristics.
4.4.2 Edit Class
You create classes for a release procedure for purchase orders (POs).
You use a class to group together characteristics that are to constitute a release condition for a
release strategy. In the step " Define Release Procedure for Purchase Orders" you assign this
class to the release strategy. While creation of class, characteristics should be assigned .This is
not transported.
Configuration:
T-code
CL02
Menu Path
IMG Material ManagementPurchasing Release

procedure for purchase order Edit Class
Page 96 of 369
Enter class and class type > click on create
Enter Description for Po class > click on char tab.
Enter document type > save.

4.4.3 Define Release Procedure for Purchase order
This component is used if you wish to set up approval procedures for purchase Orders. Under
such a procedure, if an external purchasing document fulfills certain conditions (e.g. the total
order value lies between Re1 and 10Crore), it has to be approved (by different authorized
persons ) before it can be processed further. This process of approving (clearing, or giving the
"green light" to) a proposed item of expenditure is replicated in the SAP System by the "release
procedure".
Page 97 of 369
This is possible only at the Header level of the Purchase Order or any External Purchasing
document.
Configuration:
T-code
SPRO
Menu Path
IMG Material ManagementPurchasingPurchase OrderRelease

Procedures for Purchase ordersDefine Release Procedure for
Purchase Orders.
1. Create Release Group:

This permits the multiple usage of the same release strategy key. Create release group then
assign class which is already created.
Double click on release group

Maintain release group: any two digits

Class: Maintain class which is created in the earlier screen. Make sure that there is no spell
mistake.
2. Release Codes:
The release code is a two-character ID allowing a person to release (clear, or approve) a
requisition or an external purchasing document. Who may work with which release codes is
basically controlled via a system of authorizations (authorization object M_EINK_FRG)
Create release codes against the release group. There is no limit for release codes .Maintain
description for release codes.
Page 98 of 369
Ex: 10: Manager

20: General Manager
30: Vice President
Double click on release codes
Create release codes with combination of release codes >Save.

3. Release indicators:
When a requisition or an external purchasing document has been processed via a release code,
a release indicator is assigned to it.
When the system sets which release indicator is defined in the Customizing facility for
Purchasing (in the release strategy via the release statuses).
What does the release indicator determine?
Requisitions...
External purchasing documents....
Whether the item may be changed by

Purchasing or Materials Planning and Control
after the start of the release procedure
Whether the document may be changed by

Purchasing after the start of the release
procedure
Whether a new strategy is determined and

Whether a new strategy is determined and
whether existing releases must be cancelled in whether existing releases must be cancelled in
the event of changes
the event of changes
Page 99 of 369
Whether an RFQ or a PO may be created with Whether the purchasing document is released
reference to the item
for transmission
Release Id will Specifies whether the purchasing document can be processed in or is blocked
for follow-on functions.
Changeability of Purchasing Document During/After Release
Define how the system reacts if an internal or external purchasing document is changed after
the start of the release procedure.
Note that the values 1 to 4 apply to internal purchasing documents (purchase requisitions) and
the values 1 bis6 to external purchasing documents.
1
Cannot be changed
Changeable, no new determination of strategy
Changeable, new release in case of new strategy
Changeable, new release in case of new strat. or val. change
Changeable, new release if new strategy/outputted
Changeable, new rel. if new strat. or value change/outputted

Changeable, new release in case of new strategy
Double click on release indicator
Maintain details as per the screen shot.

Released is active: release will be saving in the document otherwise even though document is
release it is not stored. System will ask the release again.
Page 100 of 369
4. Release Strategy
A plan defining the release codes with which a purchase requisition item, a complete purchase
requisition, or a complete external purchasing document must be released (that is, approved)
and the sequence in which release is to be effected using these codes.
You can use maximum 8 release codes in one release strategy.
Create a release strategy for your release group and assign your release codes accordingly.
Release prerequisites
With the release prerequisites, you specify the order in which the individual release points
(individuals or departments) represented by the release codes may release the document.
Example
The following table shows release prerequisites for a strategy with four release codes.
Code/Release prerequisite
01 02 03 04
01 -
[] [] []
02 [x] -
[] []
03 [x] [x] -
[]
04 [x] [x] [x] In this release strategy, the codes 01, 02, 03, and 04 must successively release the purchase
order.
Read the table from left to right. For instance, the third line for release code 03: For code 03,
release via code 01 and code 02 is a prerequisite. That is to say, the PO must be released via
codes 01 and 02 before it can be released via code 03.
Release statuses
Here you specify the status a PO has after certain release points have effected release.
Specify which release indicator/status a PO is to have after having been released via a certain
release code.
Classification
In classification, you maintain the values assigned to the characteristics. Via the characteristics
and their values, you specify the POs to which your release strategy is assigned.
Maintain values (individual values or intervals) for your characteristics.
Example
Two characteristics and their values have been maintained in classification for release strategy
'01':
- Document type - 'NB - standard purchase order'
- Total value - above Rs10,000
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All POs with the document type 'NB' and a total value in excess of Rs10,000 are thus subject to
a release procedure with the release strategy '01'.
Release simulation
The release simulation function enables you to check which status a PO will achieve with your
release strategy if release is effected by a certain release point.
Choose "Simulate release" and release the document with the desired release code by doubleclicking. The system shows you which status the PO now has as a result of this release.
Example:
Release procedure will trigger based on the following details.
PO Document
Type CEKKOBSART
PO total value CEKKO-GNETW
<=5000/-
5001-50000/-
50001 100000 /-
>100000 /-
NB: Standard
Manager
/GM/VP
GM/VP/JMD
GM+VP/JMD
GM/VP+JMD
FO : Frame
work or service
Manager
/GM/VP
GM/VP/JMD
GM+VP/JMD
GM/VP+JMD
Double click on release strategies
Page 102 of 369
Maintain release group and enter sequence number or serial number for release strategy.
Enter release codes as per the strategy.
Click on release prerequisites.
Page 103 of 369
Click on continue
Click on
Page 104 of 369
Check box is active mean concerned person is released. Based on your strategy maintain
release indicator > continue
Click on
Maintain values > continue > go back > save.
Click on
Page 105 of 369
Click on simulate release
Double click on release possible

Save.
Page 106 of 369
4.5 Contracts
An outline purchase agreement is a longer-term agreement between a purchasing organization
and a vendor regarding the supply of materials or the performance of services within a certain
period according to predefined terms and conditions. (Outside SAP, such agreements may be
referred to by a number of terms, including "blanket", "master", "framework" or "umbrella"
agreements)
In the SAP System, such agreements are subdivided into:
Contracts
o
Centrally agreed contracts
Distributed contracts
Scheduling agreements
o
Scheduling agreement referencing a centrally agreed contracts
Structure
The contract consists of items defining the individual materials, material groups, or services with
prices and in many cases quantities.
An item is assigned to an item category, which defines the type of procurement (e.g. item
category K for consignment, or L for subcontracting).
An item of the procurement type external service contains a set of service specifications. Such
specifications may be hierarchically structured. The summary view of such a hierarchical
structure is termed an outline, and the individual levels of the hierarchy are referred to as
outline levels. Quantities are specified in service lines. Services can be released (ordered, or
called off against the contract) at item level or at the level of the service line.
Costs can be apportioned among various Controlling objects via the account assignment.
Release orders issued against the contract (see below) are logged in the release
documentation.
Contracts can take the following forms:
Quantity contracts
Use this type of contract if the total quantity to be ordered during the validity period of the
contract is known in advance. The contract is regarded as fulfilled when release orders totalling
a given quantity have been issued.
Value contracts
Use this type of contract if the total value of all release orders issued against the contract is not
to exceed a certain predefined value. The contract is regarded as fulfilled when release orders
totaling a given value have been issued
Page 107 of 369
Contract Processing
Request for
Quotation
(ME41)
Vendor 1
Request for
Quotation
(ME41)
Vendor 2
Purchase
Requisition
(ME51N)
Maintain Vendor 1
Quotation
(ME47)
Maintain Vendor 2
Quotation
(ME47)
Price
Comparision
(ME49)
Approved
Create Contract
ME31K
Rejected
Request for
Quotation
(ME41)
Vendor 3
Maintain Vendor 3
Quotation
(ME47)
Reject Remaining
Quotations
(ME49 or ME42)

approved Vendor
(ME21N)

Number ranges should be defined and assigned to the document type. Number range length is
maximum 10 digits.
Configuration:
T-code
OMH6
Menu Path
IMG Material ManagementPurchasingContractDefine

Number ranges.

The SAP System manages contracts as documents. You can group contracts into any number
of document types.

o
Internal
External
Page 108 of 369
differentiae the various kinds of contracts. Number range object should be assigned in the
document type.
Standard document types
MK : This document is used for all Quantity Contracts.
WK : This document is used for all Value Contracts.
Configuration:
T-code
SPRO.
Menu Path
IMG Material ManagementPurchasing ContractDefine

Document types.

A display field (field displayed only, input not possible) and Suppressed
Field selection group should be assigned to document type. Always recommended to create
one field selection for one document type and assign vice versa.
Configuration:
T-code
SPRO
Menu Path
IMG Material ManagementPurchasing ContractDefine

Screen layout for Document types
4.5.4 Transaction Data of Contracts

Contract can be created against Purchase requisition or RFQ.
Purchase order should be created against the contract.
Contracts can be created with material master and without material master.
As when required we make purchase order against contract is called as release order.
ME31K: Create Contract
ME32K: Change Contract
ME33K: Display Contract
ME35K: Release Contract
ME9K: Print Contract
Page 109 of 369
4.6 Scheduling Agreement

A form of outline purchase agreement under which materials are procured on predetermined
dates within a certain time period.
A scheduling agreement consists of a number of items, for each of which a procurement type is
defined. It is possible to create following procurement types of scheduling agreements.
Standard
Subcontracting
Consignment
Stock transfer
Delivery of the total quantity of material specified in a scheduling agreement item is spread over
a certain period in a delivery schedule, consisting of lines indicating the individual quantities with
their corresponding planned delivery dates.
For scheduling agreement items involving subcontracting, you can specify the materials or
components to be provided to the subcontractor with respect to each scheduled delivery of the
ordered item.Conditions can apply to the entire scheduling agreement. Conditions at item level
apply specifically to the material to be supplied in each case.
Number ranges should be defined and assigned to the document type. Number range length is
maximum 10 digits.
Configuration:
T-code
OMH6
Menu Path
IMG Material ManagementPurchasingScheduling

agreementDefine Number ranges.

The SAP System manages scheduling agreements as documents. You can group scheduling
agreements into any number of document types.

o
Internal
External
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differentiae the various kinds of scheduling agreements. Number range object should be
assigned in the document type.
Standard document types
LP : Scheduling agreement
LPA : Scheduling agreement
LU: Transport. scheduling agreements
Configuration:
T-code
SPRO.
Menu Path
IMG Material ManagementPurchasing Scheduling

agreement Define Document types.

Suppressed
Field selection group should be assigned to document type. Always recommended to create
one field selection for one document type and assign vice versa.
Configuration:
T-code
SPRO
Menu Path
IMG Material ManagementPurchasing Scheduling

agreement Define Screen layout for Document types
4.6.4 Transaction Data of scheduling agreement

Scheduling agreement can be created against Purchase requisition, RFQ. And contracts.
ME31L: Create Scheduling agreement
ME32L: Change Scheduling agreement
ME33L: Display Scheduling agreement
ME35L: Release Scheduling agreement
ME38:Maintain Delivery Schedules
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ME39: Display Delivery Schedule

ME9E: Print Delivery Schedule
ME9L: Print Scheduling agreement
4.7 Pricing Procedure
This component enables you to store pricing stipulations agreed with the vendor (such as
applicable discounts or surcharges, or stipulations regarding the payment of freight costs) in the
system. You can enter these conditions in quotations, outline purchase agreements, and info
records. You also have the option of entering general conditions at vendor level, for example.
The system then applies the conditions in determining the price in purchase orders (POs). You
can enter further conditions in the PO itself.
There are three kinds of price in Purchasing:
Gross price
Price without taking any possible discounts and surcharges into account.
Net price
Price taking any applicable discounts and surcharges into account.
Effective price
Net price after deduction of cash discount, with allowance for any miscellaneous
provisions, delivery costs, and non-deductible taxes.
You can enter conditions for items in respect of which you do not expect to receive an invoice in
purchase orders and outline agreements. Customer exit LMEXF001 is available for this
purpose.
Time-Dependent and Time-Independent Conditions
A distinction is made between conditions that are valid for a certain period and conditions for
which no special validity period can be specified. In the latter case, the validity period
corresponds to that of the purchasing document. Whether time-dependent or time-independent
conditions are created is determined via the document type
You maintain time-dependent conditions for info records, RFQs, scheduling

agreements, and contracts directly in the info record or purchasing document.
You can also enter document conditions for contracts and info records via the
master data menu.
SAP recommends maintaining such conditions via the relevant document.
Time-dependent general conditions are always maintained via the master data
menu.
Time-independent conditions are always maintained directly within the relevant

document
Condition Technique
The condition technique is used to determine the purchase price by systematic consideration of
all the relevant pricing elements. A feature of the technique is the formulation of rules and
requirements. By applying conditions defined by means of the condition technique, the system
arrives at a suggested price for purchase transactions.
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4.7.1 Define Access Sequence

An access sequence is a search strategy with the aid of which the SAP System searches for
valid condition records of a certain condition type.
For condition types for which you wish to maintain conditions with their own validity period, you
must assign an access sequence. With this, you define which fields the SAP System checks in
searching for a valid condition record.
Configuration:
T-code
SPRO.
Menu Path
IMG Material ManagementPurchasingConditionsDefine price

determination processDefine access sequences.
Maintain access sequence code and description
Select access sequence > double click on access
Page 113 of 369
Maintain sequence number and condition table
Select line item > double click on fields
Save.
4.7.2 Define Condition Type
The condition types are used to represent pricing elements such as prices, discounts,
surcharges, taxes, or delivery costs in the SAP System. These are stored in the system in
condition records.
Conditions for subsequent (end-of-period rebate) settlement can also be used.
For condition types for which you wish to maintain conditions with their own validity period, you
must specify an access sequence. In this way, you stipulate the fields the SAP System is to
check in its search for a valid condition record.
Page 114 of 369
The condition types are used to represent pricing elements such as prices, discounts,
surcharges, taxes, or delivery costs in the SAP System.
Condition types are stored in condition records.
Configuration:
T-code
SPRO.
Menu Path

determination processDefine Condition types.
Create condition types if required prefix should be J or Z, all condition types are available in
SAP.
Double click on define condition types
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Accruals: accruals will be activated for delivery type condition types. Based on the accrual
active it is possible to condition type value in a separate G/L account.
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4.7.3 Define Calculation Schema

In the MM area, a calculation schema - a framework of steps used to calculate or determine
something - is used to calculate costs, prices, period-end rebates, and taxes along with the Net
Prices of a purchase Order.
In the calculation schema (pricing procedure), you specify which condition types are to be taken
into account in which sequence. In the price (or cost) determination process, the SAP System
automatically determines which calculation schema is valid for a business transaction and takes
into account, one after another, the condition types it contains.
RM0000
Purchasing Document (Big)
RMIMP0
Import Processing
RM2000
Stock Transfer Document
RMMP00
Market Price
Above pricing procedure will be used in regular business. In calculation schema total line
columns are available.
Configuration:
T-code
SPRO.
Menu Path

determination processDefine Calculation schema.
Maintain procedure code and description
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Select procedure > double click on control data
Maintain the procedure as per the requirement. Pricing procedure contain 16 columns.
Statics: it will be activated for condition types which are used for calculation purpose. System
will not consider condition type for accounting document.
Subtotal 9 must be maintained for PB00 and PBXX condition types otherwise system will not
allow to create a purchase order.
4.7.4 Define Schema Group
A Schema Group allows you to group together purchasing organizations that use the same
calculation schema ("pricing procedures".)
You can also use them to group together vendors for whom the same calculation schema is
valid.
For example, you can define one schema group that uses a simple calculation schema with just
a price and a discount, and another that works with a more complex schema containing a large
number of conditions.
T-code
SPRO.
Menu Path

determination processDefine schema group.
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Double click on schema groups: vendors
Save.
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Double click on schema groups for purchase org
Save.
Double click on
Page 120 of 369
Against the purchase org assign schema purchase org.

4.7.5 Define Schema Determination
In this step, you assign purchasing transactions and processes to a calculation schema; that is,
you specify the cases in which a certain schema is used.
o
For standard purchase orders

(depending on the schema group of the vendor and the purchasing organization)
For stock transport orders
(Depending on the supplying plant, the document type and the schema group of the
purchasing organization.
Configuration:
T-code
SPRO.
Menu Path

determination processDefine schema determination.
Determine calculation schema for standard purchase order:

Here assign schema group vendor, schema purchase org to calculation schema. Repeat the
same for incase of import also.
Determine calculation schema for stock transport order:
Here assign schema group vendor, schema purchase org to calculation schema
Note: schema group vendor should be assigned in vendor master > purchasing data> schema
group vendor. While creation of purchase orders system picks the respective calculation
schema (pricing procedure).
Double click on
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Enter schema purchase org, schema group vendor and pricing procedure>save.
4.7.6 Define Transaction/Event key
Define transaction/event keys for condition types involving Calculation schema .To enable the
system to find the relevant account for provisions (for accrued delivery costs or miscellaneous
provisions, for example), you must assign a transaction/event (internal processing) key to each
condition type that is relevant to provisions in the step Define Calculation Schema. These
Transactions event key will be appear in OBYC transaction, assign the Relevant G/L. Account
postings will be happened for the same G/L.
Configuration:
T-code
SPRO.
Menu Path

determination processDefine Transaction/event key
Double click on Trans/event key
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4.7.7 Maintain Condition Table

Condition table created as per the client requirement. Generally to trigger condition values
automatically in the purchase order.
Configuration:
T-code
SPRO.
Menu Path

determination processDefine condition tables
Double click on create condition table
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Enter number between 501-999
Double click on required fields
Click on generate
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Click yes
Click on local object
Page 125 of 369
Domestic Pricing Procedure

For Material procured by
Manufacture / Trader
Pricing element /
Condition Type
Description
Value
Price calculation with taxes

Quantity
as per purchase order / schedule
Basic price
as per negotiation had between PUR &

Supplier
100.00
Discount -

Supplier
10.00
Net Price
Quantity x basic price
90.00
P&F- 3%

Supplier
Assessable Value
Net price + P&F
Ex. Duty 10%
extra as applicable
9.27
Cesss 2%
extra as applicable
0.19
HSE 1%
extra as applicable
0.09
Sub Total
Ass.value + Ex.duty+cess+HESE
Vat 12.5% or 5%
extra as applicable
CST 2%
extra as applicable
G Total
Sub Total + VAT+CST
Transportation
Extra as per negotiation had between PUR &

Supplier
Octroi - 3%
as applicable
Unloading charges
as applicable
Installation/ Commissioning
Extra as per negotiation had between PUR &

Supplier
Page 126 of 369
2.70
92.70
102.25
12.78
115.03
10.00
4.38
Lumbsum Manual
4.8 Version Management

The Version Management facility enables you to generate and manage versions of purchase
requisitions and external purchasing documents such as POs. A version groups together the
change documents generated in the course of subsequent processing of the relevant document.
A version thus indicates the revision level of a document (version 0 = original document,
versions 1 + = revisions) and provides the user with an overview of the various changes that
may have been made in the course of time.
Version Management thus represents an extension to the hitherto existing change
documentation functionality for internal and external purchasing documents.
4.8.1 Setup Version Management for Purchase Requisition
Set up the Version Management facility for purchase requisitions.
For a combination of document category and document type, you can:
Activate Version Management

If Version Management is active; the changes made to a purchasing document are
managed in versions.
Set up field selection for versions

for certain fields of the version, you can specify which properties they are to have:
mandatory entry, optional entry, display only, suppressed.
Note
When a purchase requisition is created externally (e.g. via a BAPI), the system does
not check whether these fields have been designated as mandatory-entry fields
Configuration:
T-code
SPRO.
Menu Path
IMG Material ManagementPurchasingversion

managementSetup version Management for Purchase requisitions
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Maintain required details as per requirement.

4.8.2 Setup Version Management for External Documents
Set up the version management facility for external purchasing documents. For a combination of
purchasing organization, document category, and document type, you can:
Activate version management

If version management is active, changes to a purchasing document are managed in
versions.
Define field selection for versions

You can specify the attributes certain fields of the version are to have: mandatory entry,
optional entry, display only, field suppressed.
Configuration:
T-code
SPRO.
Menu Path

managementSetup version Management for external documents.
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Fields are:
Reason
Short text
Requester
External Number
Posting date
4.8.3 Define Reason for Changes

Define the reasons for changes to requisitions and external purchasing documents (e.g.
increase in material requirement).Reason code should be 4 digits.
Page 129 of 369
Configuration:
T-code
SPRO.
Menu Path

managementDefine Reason code for changes.
Maintain reason code and description and save.

4.8.4 Version Relevant Fields of Purchase Requisitions
You can specify whether changes to a field are version-relevant. ("Version-relevant" means that
a change to a field causes a new version to be created.) for the table EBAN. This provision is
not available for external documents.
Configuration:
T-code
SPRO.
Menu Path

managementVersion Relevant Fields of Purchase requisitions.
Page 130 of 369
Maintain document type, table and field name. Version management for PR will be triggered for
given fields.
4.9 Reporting
In this section you able to understand what is scope list and selection parameters. What are the
control functions in the scope list and selection parameters and how we can make it as default
in the transactions and reports.
4.9.1 Define scope list

Define scope list as per the client requirement, it not required to configure new scope list.
Configuration:
T-code
OLME
Menu Path
IMG ReportingMaintain Purchasing list scope of list Define

scope list
Page 131 of 369
For details
Select the scope list > click on details
Page 132 of 369
4.9.2 Define default values for transactions

Assign scope list to transaction as per desired. This is a default for the transaction.
Configuration:
T-code
OLME
Menu Path
IMG ReportingMaintain Purchasing list scope of list Define

values for transactions.
Assign scope list to desired transaction.
4.9.3 Define selection parameters

Selection parameters will be defined as per the requirements.WE101 open purchase order
Configuration:
T-code
OLME
Menu Path
IMG ReportingMaintain Purchasing list selection Parameters

Define selection parameters
Page 133 of 369
Page 134 of 369
4.9.4 Define default values for transactions

Assign scope list to transaction as per desired. This is a default for the transaction.
Configuration:
T-code
OLME
Menu Path
IMG ReportingMaintain Purchasing list selection Parameters

Define default values for transactions
4.10. Message Determination

Message determination is required to take print out of any document from sap in standard Print
transactions. If you maintain Nace settings system determines the message determination
automatically in the corresponding document to take the printout.
T code: NACE
Select EF: Purchase order > click on condition records
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Select output type NEU > click on condition records
Select purchasing output determination: document type > continue
Execute
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Enter document type , function : vn- vendor , medium printout ,date/time : 3-Send with
application own transaction
Select the line item click on communication
Save.
For maintain of smart form to output type as per the client requirement
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Select EF: Purchase order >output type
Select output type NEU > double click on processing routines
Assign the developed smart form in form field/ pdf/ smartform.
Page 138 of 369
5. Inventory Management
Inventory management and physical inventory deals with
Management of material stocks on a quantity and value basis

Planning, Entry, and Documentation of all Goods Movements
Carrying out the Physical Inventory
Managing Stocks by Quantity
All transactions that bring about a change in stock are entered in real time, as are the
stock updates resulting from these changes. You can obtain an overview of the current
stock situation of any given material at any time. This, for example, applies to stocks
that:
Are located in the warehouse
Have already been ordered, but have not yet been received
Are located in the warehouse, but have already been reserved for production or a
customer.
Are in quality inspection.
If a further subdivision by lots is required for a material, one batch per lot is possible.
These batches are then managed individually in the stock.
Special Stocks
Inventory Management can manage various types of a companys own special stocks
and externally owned special stocks separately from standard stock.
Managing Stocks by Value
The stocks are managed not only on a quantity basis but also by value. The system
automatically updates the following data each time there is a goods movement:
Quantity and value for Inventory Management.
Account assignment for cost accounting.
G/L accounts for financial accounting via automatic account assignment.
The valuation area is the organizational level at which a materials stock value is
managed. The valuation area can be plant level or company code level.
In Inventory Management, work is basically done at plant and storage location levels.
When you enter a goods movement, you only have to enter the plant and the storage
location of the goods. The system derives the company code from the plant via the
valuation area.
Planning, Entry, and Documentation of all Goods Movements
Goods movements include both external movements (goods receipts from external
procurement, goods issues for sales orders) and internal movements (goods receipts
from production, withdrawals of material for internal purposes, stock transfers, and
transfer postings).
For each goods movement a document is created which is used by the system to update
quantities and values and serves as proof of goods movements.
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You can print goods receipt/issue slips to facilitate physical movements and monitor the
individual stocks in the warehouse.
Goods Movement
Transaction results in a change in stock.
Types of Goods Movements in Inventory management
Goods receipt
A goods receipt (GR) is a goods movement with which the receipt of goods from a vendor or
from production is posted. A goods receipt leads to an increase in warehouse stock.
Goods issue
A goods issue (GI) is a goods movement with which a material withdrawal or material issue,
a material consumption, or a shipment of goods to a customer is posted. A goods issue
leads to a reduction in warehouse stock.
Stock transfer
A stock transfer is the removal of material from one storage location and its transfer to
another storage location. Stock transfers can occur either within the same plant or between
two plants.
Transfer posting
A transfer posting is a general term for stock transfers and changes in stock type or stock
category of a material. It is irrelevant whether the posting occurs in conjunction with a
physical movement or not. Examples of transfer postings are:
Transfer postings from material to material
Release from quality inspection stock
Transfer of consignment material into companys own stock
When posting a goods movement in the SAP System, the following documents are
created:
Page 140 of 369
Documents for Goods Movements

Warehouse
Warehouse
Goods movements
Receipts
Material
document
Material document
Issues
Accounting
document
In the Inventory Management system, when a goods movement is posted, a material

document
generated that serves as proof of the movement and as a source of information
SAPisAG
for any applications that follow. A material document consists of a header and at least one
item. The header contains general data about the movement (for example, its date). Each
item describes one movement.
Accounting document
If the movement is relevant for Financial Accounting (that is, if it leads to an update of the
G/L accounts), an accounting document is created parallel to the material document. In
some cases, several accounting documents are created for a single material document. This
might be the case, for example, if you have two material document items with different
plants that belong to different company codes. The G/L accounts involved in a goods
movement are updated through an automatic account assignment.
The Movement Type Concept
When you enter a goods movement in the system, you must enter a movement type
to differentiate between the various goods movements. A movement type is a threedigit identification key for a goods movement. Movement types consist of 3 digits.
Page 141 of 369
Control Functions of the Movement Type

The movement type has important control functions in Inventory Management.
For example, the movement type plays an important role
in Updating of quantity fields,

Updating of stock and consumption accounts
Determining which fields are displayed during entry of a document in the system.
Allowed transaction
Account determination
Quality management (inspection lot).
Results of a Goods Movement in the System:
When you enter a goods movement, you start the following chain of events in the
system:
A material document is generated, which is used as proof of the movement and as a
source of information for any other applications involved.
If the movement is relevant for Financial Accounting, one or more accounting documents
are generated.
The stock quantities of the material are updated.
The stock values in the material master record are updated, as are the stock and
consumption accounts.
Depending on the movement type, additional updates are carried out in participating
applications.
All updates are based on the information contained in the material document and the
financial accounting document. For example, in the case of a goods issue for a cost
centre, the consumption values of the items are also updated.
Important Movement types are
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101: Goods receipt for purchase order or order :
131: Goods receipt for an order
261 : Goods issues to production order
201 : Goods issues to cost center
601 : Goods issues to delivery
309: Transfer posting material to material
543: Consumption from stock of material provided to vendor
311: Store to store transfer
551 : Material Scraping
561 : initial entry of the stock
5.1. Define Plant Parameters

You make the general plant settings for Inventory Management. All settings are also contained
in the individual steps of the Implementation Guide for Inventory Management.
Configuration:
T-code
SPRO
Menu Path
IMG Material ManagementInventory management and Physical

inventoryPlant parameters.
Select Plant HIL1 > click on details
Page 143 of 369
Important controls are

Create automatic storage location: This is a prerequisite for extension of storage location
automatically in the transactions.
Delivery completed indicator: if purchase order qty is received completely system update
delivery complete indicator automatically in the purchase order.
Physical inventory controls:
Stock type: 1 ware house stock : while creation of physical inventory document system by
default takes unrestricted stock type and also consider alternative UOM.
Batches in Background: if material is managed in batches while creation of physical inventory
document system consider all batches automatically.
Change document: to update change log in the physical inventory document activate change
document.
Reservations:
Movements allowed: active then only system will allow to perform inventory transactions
against the reservation.
Days movement allowed: validate of the reservation.
Retention period: after deletion of reservation how many days u would like to hold the
reservation in the system.
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5.2Define Number Range assignment for material & Physical inventory documents
The number assignment for material documents and physical inventory documents depends on
the transaction/event type which is also allocated to each transaction in Inventory Management.
The transaction/event types are divided into groups of number ranges. A number range interval
has to be defined for each group.
Material documents for goods movements and inventory differences

WA Goods issues, transfer postings, other goods receipts
WI Material documents for inventory adjustment postings
WL Goods issues for delivery documents (SD)
WQ Goods movements for usage decisions (QM)
WR Goods movements for completion confirmations (PP)
Material documents for goods receipts

WE Goods receipts for purchase orders
WF Goods receipts for production orders
WO Subsequent adjustment of subcontract orders
WW Subsequent adjustment of active ingredient materials
Configuration:
T-code
OMBT
Menu Path

inventoryNumber assignmentDefine number assignment for
Material & Physical inventory documents
Click on Maintain Groups
Go to menu bar > Group > insert
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Maintain text > number range for the year > click on insert. System is consider only calendar
year.
Select the group > click on object WE> click on select element > click on assign element group
> save.
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5.3Define Number Range assignment for Reservation

Number assignment for reservation, this will apply for all plants in the client.
Configuration:
T-code
OMC2
Menu Path

Reservations.
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Click on intervals
Click on change interval
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Maintain number range > click on insert > save.
Click on No range res/dep.rq
Assign reservation number range object >save.
5.4Field Selection for MIGO

Define the field selection for goods movements initial and header screens of transaction MIGO.
Select the fields as per the requirements then use the available functions like required, optional,
display and hide.
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Configuration:
T-code
OMJX
Menu Path

inventorySettings for enjoy transactions Settings for Goods
movements (MIGO) Field selection for MIGO
As per the requirements select the required fields and do the field selection. This field selection
will be effect only for MIGO.
5.5Field Selection for Movement type
Define the field selection for fields which are not available in the configuration of field selection
for MIGO. Maintain the field selection against movement type wise.
Configuration:
T-code
OLMB
Menu Path

movements (MIGO) Field selection for Movement type
Page 150 of 369
If required go to new entries > enter movement type, field name > select the required or
optional.
5.6Settings for Transactions and Reference Documents
You can limit the number of selectable transactions (goods receipt, goods issue, and so on) and
reference documents (material document, delivery note), and you can specify the movement
type that the system is to propose for every reference document.
This configuration helps in control prospective and to avoid the mistakes from user side. It is
possible to put the default movement type for each transaction event.
Configuration:
T-code
SPRO
Menu Path

movements (MIGO) Settings for Transactions and Reference
documents
Select MIGO > double click on transaction/ event keys
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As per the requirements activate or deactivate the transaction in MIGO.
Select the transaction/event > double click on reference documents
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Activate or deactivate reference documents against the transaction event wise. It is possible to
maintain default movement type for reference document wise. This default movement types will
be appeared in the MIGO transaction.
5.7. Movement Types
A classification key indicating the type of material movement (for example, goods receipt,
goods issue, physical stock transfer).The movement type enables the system to find predefined
posting rules determining how the accounts of the financial accounting system (stock and
consumption accounts) are to be posted and how the stock fields in the material master record
are to be updated.
101
GR goods receipt Against Purchase order
102
GR for PO reversal
122
Return delivery to vendor
123
Reversal of Return delivery to vendor
131
Goods receipt from Production order
161
Material Return to vendor
162
Reversal of Material Return to vendor
201
Goods issues for cost center
202
Reversal of goods issues for cost center
241
Goods issues for asset
242
Reversal of goods issues for asset
261
Goods issues for Production order
262
Reversal of Goods issues for Production order
301
Plant to plant transfer
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302
Reversal of plant to plant transfer
309
Material to material transfer
310
Reversal of material to material transfer
311
Store to store transfer
312
Reversal of store to store transfer
321
Transfer posting from quality stock to unrestricted
322
Reversal of Transfer posting from quality stock to unrestricted
343
Transfer posting from Blocked stock to unrestricted
344
Reversal of Transfer posting from Blocked stock to unrestricted
349
Transfer posting from blocked stock to quality stock
350
Reversal of Transfer posting from blocked stock to quality stock
501
GR without Purchase order
502
Reversal of GR without Purchase order
541
Goods issues to subcontractor
542
Reversal of Goods issues to subcontractor
543
Consumption of material from subcontractor
551
GI scrapping
552
RE scrapping
553
GI scrapping QI
554
RE scrapping QI
555
GI scrapping blocked
556
RE scrapping blocked
601
GD goods issue: delivery
602
Reversal of GD goods issue: delivery
651
GD ret.del. Returns
652
GD ret.del. Returns rev
701
GR physical inventory
702
GI physical inventory
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5.8. Copy Change Movement Type

You can
change the setting of existing movement types
define new movement types
When you enter a goods movement, you must always enter the movement type. The movement
type has important control functions in Inventory Management. It is essential for
updating the quantity fields
updating the stock and consumption accounts
selection of the fields used for entering documents
Allowed transactions: it is possible to execute the transaction for the movement type
which is specified in the allowed transaction.
Update Control / WM movement type
Account Groupings
Reversal /follow on movement types
Reason for movement
Deactivate QM inspection /Delivery Category
Configuration:
T-code
OMJJ
Menu Path

inventoryMovement typeCopy, change movement type.
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Select movement type > continue
Continue
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Select the movement type > copy > rename the movement type>save.
Reasons for creation of new movement are: 1. One movement type is used for multiple purpose
2. As per the business requirement it is required to change the controls in the movement type.
5.9. Record Reason for Movement Type
You can carry out the following for each movement type:
maintain the input status of the Reason field
Store a key that gives a reason for the movement (for example, reason for return
delivery) and a corresponding text.
When you enter a goods movement, you can only enter reasons which have been defined for
the movement type here.
Configuration:
T-code
OMBS
Menu Path

inventoryMovement typeRecord reason for movement type.
Click on control reason
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Maintain reason is required/option, display against the movement type wise.
Maintain reasons against movement type wise.

6. Goods Receipts
You use this component to post the receipt of goods from an external vendor or from
production. A goods receipt leads to an increase in warehouse stock.
The system distinguishes between the following types of goods receipt:

Goods receipts with reference to a reservation
Goods receipts with reference to an order
Other goods receipts
101: Goods receipt for purchase order or order
If the purchase order or order has not been assigned to an account, a stock type
(unrestricted-use stock, stock in quality inspection, blocked stock) can be entered during
goods receipt.
If the purchase order or order has been assigned to an account, the goods receipt is not
posted to the warehouse, but to consumption.
In the case of non-valuated materials, the goods receipt is posted to the warehouse,
although the purchase order has not been assigned to an account.
System generates material document and accounting document.
One Inspection lot is created for one line item in the Goods receipts.
Capture excise invoice against the purchase order.
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Accounting entries are :

Inventory Raw material +
GR / IR account
103 Goods receipt for purchase order into GR blocked stock
The quantity of a material delivered by a vendor that has been received subject to
conditional acceptance but has not yet been placed in final storage. Goods receipt (GR)
blocked stock is not yet regarded as part of the receiving company's stock, but is tracked
in the purchase order history.
You cannot receive goods into goods receipts blocked stock for stock transport orders.
System generates material document
System is not generates an accounting document, i.e. stock is not valuated at plant
level.
Capture excise invoice against the purchase order.
One Inspection lot is created for one line item in the Goods receipts.
Goods Receipts for Purchase Orders

Use
If the SAP Purchasing component is used, deliveries from vendors are most likely the result of
purchase orders initiated by the purchasing department.
The purchase order is not only the document with which the purchasing department orders
goods from the vendor; it is also an important planning and tracking tool for the following:
Purchasing, Material Requirements Planning (MRP), Inventory Management, and Invoice
Verification.
Features:
Reference to a Purchase Order
If a material is delivered for a purchase order, it is important for all of the departments involved
that the goods receipt entry in the system references this purchase order, for the following
reasons:
Goods receiving can check whether the delivery actually corresponds to the order.
The system can propose data from the purchase order during entry of the goods
receipt (for example, the material ordered, its quantity, and so on). This simplifies
both data entry and checking (over deliveries and under deliveries).
The delivery is marked in the purchase order history. This allows the Purchasing
department to monitor the purchase order history and initiate reminder procedures in
the event of a late delivery.
The vendor invoice is checked against the ordered quantity and the delivered
quantity.
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The goods receipt is valuated on the basis of the purchase order price or the invoice
price.
Goods Receipts for Orders

Use:
If the Production Orders component is used, deliveries from production are the result of orders
used as a basis for manufacturing the materials required.
The production order is not only the document on the basis of which a material is manufactured;
it is also an important planning and tracking tool for the following departments: Materials
Planning and Inventory Management.
Features
Reference to an Order
When material resulting from a production order is delivered, it is important for the departments
involved that the goods receipt entry in the system references this order, for the following
reasons:
Goods receiving can check whether the delivery actually corresponds to what has been
planned.
The system can propose data from the order during entry of the goods receipt (for
example, the material produced, its quantity, and so on). This simplifies both the data entry and
checking (over deliveries and under deliveries).
The quantity delivered and the delivery date is updated in the order.
The order number is usually listed on the slip accompanying the delivered material. If it is not
listed on the slip accompanying the delivered material, you can find the order pertaining to the
delivery via the material number
Other Goods Receipts
Purpose:
In addition to the goods receipts described previously, you can enter goods receipts in the SAP
system without referencing another document. You enter such goods receipts by
selecting Goods movement Goods receipt other.
Scope of Functions
You can enter the following types of goods receipts this way:
Initial Entry of Inventory Data
Using this goods movement, you can transfer book inventory balances from an existing system
to the SAP System when you first implement the Inventory Management component.
External Goods Receipts without a Purchase Order
If you are working without the Purchasing component, you enter external receipts as other
goods receipts. You can plan such a movement with a reservation.
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Internal Goods Receipts without a Production Order:

If you are not using the Production Orders component, you enter receipts from production as
other goods receipts. You can plan such a movement with a reservation.
Goods Receipt of By-Products:
Goods receipts of by-products can also be entered as miscellaneous goods receipts.
Delivery Free of Charge

If you receive a delivery from a vendor free of charge, for which no purchase order was placed,
you can only enter the receipt of the goods as an other goods receipt.
Returns from Customer
Even without a returns delivery from the Sales component, you can post returns from a
customer into blocked stock returns.
6.1. Set Tolerance Limits
Set the tolerance limits for goods receipts. When processing a goods receipt, the system checks
each item to determine whether the goods receipt varies from the purchase order or the material
master data.
The different types of variances are defined by tolerance keys. For each tolerance key,
tolerance limits can be set per company code.
Configuration:
T-code
OMC0
Menu Path

inventoryGoods ReceiptSet Tolerance Limits.
Select tolerance keys > click on copy as
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Maintain company code for three tolerance keys >save.

6.2. Create Storage Location Automatically
Specify whether the automatic creation of storage location data is allowed for goods receipts in
the plant or not. If yes then specify the movement types which are used for Goods receipts.
This is advisable if you want to post a goods receipt without having to maintain the storage
location view of the material master record in advance. The storage location data is only created
if the quantity is posted to 'standard' storage location stock
Configuration:
T-code
OMB3
Menu Path

inventoryGoods ReceiptCreate Storage Location Automatically
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Click on movement type
As per the client requirement, activate create storage location automatic functionality.
6.3. Create Purchase order automatically
Define for movement type whether a purchase order is automatically created when a goods
receipt is posted.
When it is, the user can enter a goods movement without entering the purchase order number,
using the Goods receipt for purchase order function. The system valuates the goods receipt at
the price defined in the purchasing info record. This is new concept of automatic Purchase order
creation.
Configuration:
T-code
OMB3
Menu Path

inventoryGoods ReceiptCreate Purchase order Automatically
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6.4. Define Screen Layout

Set the field selection for the movement types including Goods Receipts.
When creating goods Receipts, the field selection determines which fields
can be filled ( optional entry)
must be filled (required entry)
are suppressed fields
In Inventory Management, the field selection depends on the movement type.

Configuration:
T-code
OMCJ
Menu Path

inventoryGoods ReceiptDefine Screen layout
Select movement type > double click
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Double click on the select groups as per the requirements
Maintain the field selection as per the requirement >save.

6.5. Set Delivery Completed Indicator
Specify that the ERP system automatically suggests the inward delivery completed indicator for
goods receipts if the delivered quantity lies within the under/over delivery tolerance. The "inward
delivery completed" indicator has the following effects:
The item is regarded as closed, even if the total quantity was not delivered.
A further delivery is not expected, may, however, arrive.
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In the next goods receipt, the item appears on the selection list but has no selection
indicator.
The item can be reorganized even if the total quantity has not been delivered
Configuration:
T-code
OMCD
Menu Path

inventoryGoods ReceiptSet Delivery completed indicator.
6.6. For GR Based Invoice, Reversal of Invoice Despite invoice

Specify for which movement type whether, with GR-based invoice verification, a reversal with
reference to the purchase order or a return delivery can be entered, even if the invoice relating
to the goods receipt document has already been posted.
Configuration:
T-code
OMBZ
Menu Path

inventoryGoods ReceiptFor GR based Invoice, Reversal of invoice
Despite invoice.
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If invoice verification was posted for the document, system will not allow for reversals of material
document, you must cancel the invoice before you enter the reversal of the goods receipt or the
return delivery. Allowed movement types are 102 ,122 and 162.
6.7. Set Expiration Date Check
Set the material shelf life expiration date check for goods receipts for each plant and movement
type wise.
Prerequisites
The shelf life expiration date of a material can only be entered if:
The minimum remaining shelf life is maintained in the material master record
The minimum remaining shelf life is the time the material must still be usable, so that
the goods receipt is accepted by the system.
You can define the time unit the system uses in the storage data of the material
master record in the Period ind. field.
the shelf life expiration date check is active in the plant
the shelf life expiration date check is active for the movement type
Configuration:
T-code
OMJ5
Menu Path

inventoryGoods ReceiptSet Expiration Date Check
Click on movement types
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Activate shelf life check against the movement type wise.
6.8. Price Difference for Sub contracting orders at Goods Receipts

Based on this configuration system generates price difference account in the sub contracting
GR. Generally 6 entries in the sub contracting GR accounting document. Based on this
configuration 7 entries are also generated in the sub contracting GR accounting document.
Configuration:
T-code
OMJ5
Menu Path

inventoryGoods ReceiptPrice difference for subcontracting orders at
goods receipts
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6.9. Transaction Data of Goods Receipts

The following functions can be carried out in the Goods receipts. Transaction code is MIGO.
System checks whether the delivery is the same as the purchase order data, i.e.
whether the goods that we ordered have been delivered.
Based on the configuration for reference documents, it is possible to do the GR , system
picks the data from relevant reference documents . This makes it earlier to enter the
goods receipts and check over deliveries and under deliveries when goods arrive.
Purchase order history is automatically updated as a result of the deliveries.
When you post the Goods receipts, system generates a material document containing
such as the material delivered and the quantity delivered. The system also records the
storage location in which you palace the material into stock in the plant concerned.
Systems generate an accounting document too.
If quality management is activated for the material system generates a quality inspection
lot.
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Initial Entry of Stock Balance
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Delivery Completed Indicator
Under and over Delivery
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Shelf life Expiration Date Check
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Transaction Codes:
MIGO: Goods Movements
MB31: Goods Receipts against Production Order
MB02: Change Material Document
MB03: Display Material Document
MBSL: Copy Material Document
MBST: Cancel/ Reverse Material Document
MBRL: Return Delivery
MB90: Printout of Material Document
Important Reports
MB51: Material Document List
MBSM: Cancelled Material Documents
MMBE: Stock Overview
MB52: Warehouse Stock
MB5B: Stock as on posting date
MBBS: Valuated Special Stock
MBLB: Stock at subcontractor
7. Goods issues and Transfer Postings
Goods issue
A goods issue (GI) is a goods movement with which a material withdrawal or material issue,
a material consumption, or a shipment of goods to a customer is posted. A goods issue
leads to a reduction in warehouse stock.
Types of Goods issue
Material issues to Production

Material issues to Cost center (General issues)
Material issues to sampling
Material issues to Scrap
Return delivery to vendor
Material issues to sales
Good issues will always happen from unrestricted stock when the goods are issued;
valuation of the material is done from current price of the material master record
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Stock transfer
A stock transfer is the removal of material from one storage location and its transfer to another
storage location. Stock transfers can occur either within the same plant or between two plants.
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In the transfer postings, no accounting document is created except for material to material
transfer.
Types of stock Transfer:
Stock transfers are three types,
1. Company code to company code transfers
2. Plant to plant with in the same company code
3. Storage location to Storage location
Under the same plant, if transfer done from one storage location to another storage location,
system is not generates an accounting document .as a proof of inventory transaction system
generates a material document.
Transfer from plant to plant and company code to company code system generates an
accounting document as well as material document. System is considering the price from
issuing plant.
1. Material transfer from one plant another in the same company will be done two types.
One step process: movement type 301 will be used in MB1B transaction to transfer the
material from one plant to another plant. System generates an accounting document as well as
material document.
Two step process: movement type 303 will be used in MB1B transaction to transfer the material
from one plant to another plant. System generates an accounting document as well as material
document. Stock is updated in the transfer of stock in the receiving plant. Receiving plant will be
use 305 movement type in MB1B for receiving of the material. System generates a material
document only and stock is updated in the receiving plant.
Note: Reversal of movement types will be +1.
However above process is used very few companies and also this is not advisable process.
This process will be advisable plants are located beside and delivery and taxes are not
applicable.
2. Stock Transfer from storage location to storage location
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3. Material to Material Transfer
Transfer posting
A transfer posting is a general term for stock transfers and changes in stock type or stock
category of a material. It is irrelevant whether the posting occurs in conjunction with a
physical movement or not. Examples of transfer postings are:
Transfer postings from material to material
Release from quality inspection stock
Transfer of consignment material into companys own stock
At goods receipts, it is possible to choose the stock type which you post the goods. it is possible
to withdraw the material for consumption from unrestricted stock type only.
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Configuration:
T-code
OMB2
Menu Path

inventoryGoods Issues / Transfer PostingsCreate Storage Location
Automatically
Click on movement types
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Activate create storage location automatically as per the client requirement, above movement
types are required for activation in generally.
Set the field selection for the movement types including Goods Receipts.When creating goods
Receipts, the field selection determines which fields

Configuration:
T-code
OMBW
Menu Path

inventoryGoods Issues / Transfer PostingsDefine Screen layout
It is similar to GR field selection, please refer GR field selection.

7.3. Allow Negative Stocks
Here you specify whether negative stocks are allowed for unrestricted-use stock in the valuation
area (plant) and in the storage location.
Negative stocks are necessary, for example, when goods issues are entered for organizational
reasons prior to the corresponding goods receipts and the material is already physically located
in the warehouse. Once the goods receipts have been posted, the book inventory balance must
again correspond to the physical stock, that is, the book inventory balance may no longer be
negative.
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Negative stocks are always a sign that physical movements must be be entered in the system at
a later stage.
Configuration:
T-code
OMJ1.
Menu Path

inventoryGoods issue/transfer postingsAllow negative stocks.
Activate negative stock allowed against the Plant > click on storage location
Double click
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7.4. Set up Dynamic Availability Check

Setup dynamic availability check configuration will be useful to check the availability stock of the
material while doing the GI and stock transfer. It is possible to provide the inputs to the system
what are the factors system has to consider while issuing message during the transactions.
Availability check indicator is maintained in the material master. As per SAP standard practice
03 is checking rule for the inventory transactions.
Configuration:
T-code
OMCP
Menu Path

inventoryGoods issue/transfer postingsset up dynamic availability
check
Click on checking rule
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As per standard SAP checking rule 03 will be standard one for inventory management. If
required define new checking rule by click on new entries.
Click on define checking rule
Select the record > click on details
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Control functions of availability check.
Click on transaction code
Maintain checking rule against the t code wise.
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Against the movement type wise maintain the dynamic availability check.
7.5. Transaction Data of Goods issues/Stock Transfer/Transfer
Postings
Goods issues will be carried out in MB1A or MIGO transaction.

Stock transfer and transfer postings will be carried out in MB1A or MIGO transaction.
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7.5. Automatic Movements

In this section, you make the system settings for goods movements that are posted
automatically.
Examples:
Goods issue for a delivery via Shipping
Goods movements for repetitive manufacturing
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Inventory adjustment postings in Inventory Management
Status changes of batches
Here, you can only set those movements which cannot be entered manually in Inventory
Management.
Caution
Please note that the automatic movements are not divided into goods receipts and goods
issues/transfer postings. This means that not all valid settings are suitable for all movement
types.
Configuration:
T-code
OMJ8
Menu Path

inventoryAutomatic MovementsCreate Storage Location
Automatically
Activate create storage location automatically functionality for required movement types.
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Set the field selection for the movement types including Goods Receipts.
When creating goods Receipts, the field selection determines which fields

Configuration:
T-code
OMJA
Menu Path

inventoryAutomatic MovementsDefine Screen layout
It is similar to GR field selection.

7.8. Set Expiration Date Check
Set the material shelf life expiration date check for goods receipts for each plant and movement
type.
Prerequisites
The shelf life expiration date of a material can only be entered if:
the minimum remaining shelf life is maintained in the material master record
The minimum remaining shelf life is the time the material must still be usable, so that
the goods receipt is accepted by the system.
You can define the time unit the system uses in the storage data of the material
master record in the Period ind. field.
the shelf life expiration date check is active in the plant
the shelf life expiration date check is active for the movement type.
Configuration:
T-code
OMJ5
Menu Path

inventoryGoods receiptset expiration date check.
It is similar to GR field selection.
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7.12. Reservation
With this component, you make a request to the warehouse to keep materials ready for
withdrawal at a later date and for a certain purpose. This simplifies and accelerates the goods
receipt process.
A reservation for goods issue can be requested by various departments for various account
assignment objects (such as cost center, order, asset, etc.).
The purpose of a reservation is to ensure that a material will be available when it is needed. It
also serves to simplify and accelerate the goods issue process and prepare the tasks at the
point of goods issue.
It is also important that reservations are taken into account by Material Requirements Planning
(MRP), which means that required materials are procured in time if they are out of stock.
You can handle both planned goods issues and unplanned goods issues.
You can also use reservations to plan goods receipts and stock transfers (see Planning Goods
Receipts and Planning Stock Transfers and Transfer Postings). This section deals only with
reservations for goods issues.
Information in a Reservation
In a reservation, information is stored that is relevant for the goods issue and for materials
planning, for example:
Which?
(Which material?)
How much?
(In what quantity?)
When?
(For which requirement date?)
From where? (From which plant or warehouse?)

To where?
(To which recipient or customer?)
A reservation document consists of a header and at least one item. The header contains
general data about the reservation (creator, movement type, account assignment). The items
describe individual planned movements (material, quantity, requirement date).
Manual and Automatic Reservations
There are manual and automatic reservations. Manual reservations are entered directly by the
user. Automatic reservations are generated automatically by the SAP system. There are two
types of automatic reservations:
Reservations for orders, networks, WBS elements:

When an order, a network, or a project is created, the components from the warehouse are
reserved automatically.
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Stock transfer reservations:

If reorder point planning is used at storage location level and the available stock on hand falls
below the reorder point, the system generates a stock transfer reservation in the plant for the
replenishment quantity.
You cannot manually process automatic reservations. For example, it is not possible to change
reservations for an order directly. You have to change the components in the order. The system
then updates the reservation automatically.
Creation of
Reservation
MB21
Change
Reservation
MB22
Display
Reservation
MB23
Reservation List
MB25
7.13. Define Default Values

You specify the default values for the following functions for each plant:
allow goods movements for reservations
delete reservations
create storage-location stock data automatically for reservations
Allow movements for reservations
You can only post a goods movement with reference to a reservation if the Movement allowed
indicator is set in the reservation item.
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Configuration:
T-code
OMBN
Menu Path

inventoryReservationDefault values.
Click on plant
Mvt- movement allowed: if movement is activate, so that we can perform inventory transactions
against the reservation.
Days movement allowed: validity of the reservation.
Retention: After deletion of the reservation how many days wants to keep the reservation in the
system.
7.14. Set Dynamic Availability Check
You configure the dynamic availability check.
In Inventory Management, two types of availability check are carried out.
availability check during the entry of reservations
availability check during the entry of goods movements
The system checks whether the material to be withdrawn is available and issues a message, if
necessary.
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Configuration:
T-code
OMB1
Menu Path

inventoryReservationset up dynamic availability check.
This configuration is similar to GI dynamic availability check.

7.15. Transaction Data of Reservation
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Transactions of Reservation
MB21: Create Reservation
MB22: Change Reservation
MB23: Display Reservation
MB25: List of Reservation
MBBR: Create Sessions
MBVR: Administer
7.16. Define Field Selection for Material Document List
You can configure the selection screen and the number of fields contained in the field catalog
for the report used to display material documents ( RM07DOCS). Without technical help it is
possible to customize the MB51 report as per the requirements.
Configuration:
T-code
OLMB
Menu Path

inventoryReportingDefine field selection for material document list.
By using of this configuration we can configure MB51 as per the requirement. It is possible to
add any field in MSEG and MKPF tables. For new addition click on new entries
Press F4
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Select the field > double click
S: selection screen if activate S- this field will be displayed in the selection screen of the MB51
report.
O: output list if activate O- this field will be displayed in the output of the MB51 report.
7.17 Authorization Check for Storage Location
You activate storage location authorization for individual storage locations.
Storage location authorization means that a user has to have authorization for authorization
object M_MSEG_LGO in order to enter a goods movement in the storage location, using a
particular movement type. In the list of material documents, only the document items for which
the user has a display authorization are displayed
Configuration:
T-code
OLMB
Menu Path

inventoryauthorization ManagementAuthorization check for storage
location
As per the requirement activate storage location, based on this configuration we can restrict the
users storage location wise in administration.
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7.18 Authorization Check for G/L Account

G/L accounts authorization check which is to be applied when goods movements and
reservations are entered
Configuration:
T-code
OLMB
Menu Path

inventoryauthorization ManagementAuthorization check for G/L
Account
As per the requirement activate checkbox against company code wise.

7.19 Define Attributes of System Message
In Inventory Management, the system issues messages in the course of transactions to inform
the user about certain system responses or data situations (for example, a message indicating
that the order item is flagged "delivery completed").
In this step, you can define for the type of system message for a version:
warning message
error message
no message
Configuration:
T-code
OMCQ
Menu Path

inventoryDefine attributes of system messages
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8. Physical Inventory
In the SAP system, a physical inventory can be carried out both for a companys own stock and
for special stocks. Inventory for a companys stock and for special stocks (such as consignment
stock at customer, external consignment stock from vendor, or returnable packaging) must be
taken separately (in different physical inventory documents).
Note that the blocked stock returns and the stock in transfer cannot be inventoried. If these
stocks are still to be counted in a physical inventory, you must transfer post these stocks to
other stocks capable of inclusion in a physical inventory. ABC analysis will be maintained in the
material master.
The stock in a warehouse can be divided into 3 stock types. In the standard system, a physical
inventory can be carried out for the following stock types:
Unrestricted-use stock in the warehouse
Quality inspection stock
Blocked stock
If batch status management is active, the first stock type covers both unrestricted-use stock and
restricted-use stock.
Inventory of all stock types mentioned can be taken in a single transaction. For the materials to
be inventoried, one item is created in the physical inventory document for every stock type.
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Physical inventory takes place at storage location level. A separate physical inventory document
is created for every storage location.
If a material does not exist in a storage location, this means that no goods movement has ever
taken place for the material in the storage location. The material, therefore, has never had any
stock in this storage location. The material does not exist at stock management level in the
storage location. It is therefore not possible to carry out a physical inventory for the material in
this storage location.
This is not to be confused with a material for which a goods movement has taken place and for
which the stock balance is currently zero. A physical inventory must be carried out in this case,
since storage location data is not deleted when the stock balance is zero.
Physical Inventory Procedures
The SAP System supports the following physical inventory procedures:
Periodic inventory
Continuous inventory
Cycle counting
Inventory sampling
Periodic Physical Inventory

In a periodic inventory, all stocks of the company are physically counted on the balance sheet
key date. In this case, every material must be counted. During counting, the entire warehouse
must be blocked for material movements.
Continuous Physical Inventory
In the continuous physical inventory procedure, stocks are counted continuously during the
entire fiscal year. In this case, it is important to ensure that every material is physically counted
at least once during the year.
Cycle Counting
Cycle counting is a method of physical inventory where inventory is counted at regular intervals
within a fiscal year. These intervals (or cycles) depend on the cycle counting indicator set for the
materials. The Cycle Counting Method of Physical Inventory allows fast-moving items to be
counted more frequently than slow-moving items.
Inventory Sampling
Randomly selected stocks of the company are physically counted on the balance sheet key
date. If the variances between the result of the count and the book inventory balance are small
enough, it is presumed that the book inventory balances for the other stocks are correct.
8.1. Define Number Assignment for Material Physical Inventory Document
The number assignment for material documents and physical inventory documents depends on
the transaction/event type which is also allocated to each transaction in Inventory Management.
The transaction/event types are divided into groups of number ranges. A number range interval
has to be defined for each group.
Physical inventory documents
IB Physical inventory documents

ID Physical inventory documents for counts and differences
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without reference
IN Physical inventory documents for recounts
IZ Physical inventory documents for count without reference
WV Physical inventory documents for difference postings
Configuration:
T-code
OMBT
Menu Path

Material & Physical inventory documents
It is similar to number range definition of material documents.

8.2. Define Field Selection for Physical Inventory
The posting of physical inventory differences is subject to certain time constraints:
The posting period is automatically set during counting. Therefore, the inventory
difference must be posted to the same period or - if postings to the previous period
are allowed - in the following period.
The fiscal year is set by specifying a planned count date when creating a physical
inventory document. All subsequent postings to this document must take place in this
fiscal year and/or in the first period of the following fiscal year, if postings to the
previous period are allowed.
These are controlled by Field selection of Physical Inventory postings.

Configuration:
T-code
OMJU.
Menu Path

inventory Physical inventoryField selection for physical inventory..
Based on this configuration we can maintain field selection for reason field in MI07 transaction.
8.3. Default Values for Physical Inventory
The Presetting for entering physical inventory documents
The stock type(unrestricted-use, in quality inspection, blocked)
the indicator for batch determination (in the foreground or in the background)
the unit of entry (stock keeping unit or unit of issue)
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These indicators are suggested as default values when you enter a physical inventory
document. But you can also change them there.
Configuration:
T-code
OMBH
Menu Path

inventory Physical inventoryDefault values for Physical inventory..
Select plant > click on details
This controls we are already discussed in the plant parameters.

8.4. Settings for Physical Inventory
You make the basic settings for the physical inventory. You define that:
Change documents are activated
The book inventory balance is adjusted in the physical inventory
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document
Serial number management is set up
Activating the creation of change documents:

The system creates a change document when a user changes a physical inventory document
or physical inventory count. The system creates a new change document every time a change
is made.
Configuration:
T-code
OLMB
Menu Path

inventory Physical inventorySettings for Physical inventory..
Select plant > click on details
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Change document: for activation of change log in the physical inventory document.
Display Serial Number: if material was maintained in serial number while doing the count of
physical inventory in MI04 transaction for the serial number maintained material system propose
the serials numbers.
Print Serial Numbers: For serial number maintained material, empty lines will be printed in the
physical inventory document in MI21.
No Serial No Lines: how many lines should be print in the physical inventory document for serial
number maintained materials.
8.5. Default Values for Batch Input
You define default values for batch input reports used in physical inventory. These reports do
not allow you to transfer data from an external system, but allow bulk processing of data in the
ERP system (for example, creating physical inventory documents for all materials in a storage
location).
Configuration:
T-code
OMCN.
Menu Path

inventory Physical inventoryDefault values for batch input.
It is possible to maintain the batch input defaults in the transactions as per the user requirement.
Page 205 of 369
8.6. Allow Freezing of Book Inventory Balances in Storage Location

You determine whether the book inventory balances of items in a physical inventory document,
which have not yet been counted, can be frozen the storage location. The frozen inventory
balance is recorded in the physical inventory document. It is relevant to calculating inventory
differences.
Configuration:
T-code
OMBP
Menu Path

inventory Physical inventoryAllow freezing of book inventory
balance in storage location.
Enter plant > continue
Activate against the storage location as per requirement.

8.7. Cycle Counting
You complete the system settings for the physical inventory method of cycle counting by
defining the individual cycle counting indicators for the given plant. The cycle counting
indicators are used to group the materials together into individual categories. Normally, the
cycle counting indicators are assigned when an ABC analysis is run.
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Configuration:
T-code
OMCO
Menu Path

inventory Physical inventoryCycle counting.
8.8. Transaction Data of Physical inventory
While creation of physical inventory document posting block and freezing book inventory
should be check.
Posting Block:
Indicates that no goods movements involving the materials listed in the physical inventory
document can be posted for the duration of a physical inventory count.
Freeze Book Inventory
Specifies that the book inventory balances of those items in a physical inventory document that
have not yet been counted are frozen.
This indicator has the effect that the current book inventory balance is recorded in the physical
inventory document. The system compares the counted stock with the frozen book inventory
balance to determine any inventory differences.
Process Flow 1:
1. MI01: Create Physical inventory document
2. MI02: Change Physical inventory document
3. MI03: Display Physical inventory document
4. MI21: Print Physical inventory document
5. MI04: Enter Count for Physical inventory document
6. MI05: Change count of Physical inventory document
7. MI06: Display Count Physical inventory document
8. MI07: Post Physical inventory document.
If difference are accepted in MI07 post for those line item only, for rest of the materials initiate
recount.
9. MI11: Recount of Physical inventory document
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15. MI31: Create Physical inventory document by using of sessions
16. MI10: Post Physical Inventory without Reference
Once Physical inventory document is posted, it is not possible to cancel / reverse.
While posting of count in MI04 if physical quantity is zero then you need to enter the zero
count indicator then only system consider the stock of the material is Zero. Select the
stock of the material while entering of count.
Reports:
MI20: Difference List
MI22: Physical inventory documents for material
MI23: Physical inventory data for material
MI24: Physical inventory documents list
MI12: Changes to Physical inventory documents
Process Flow 2:
1. MI01: Create Physical inventory document
2. MI02: Change Physical inventory document
3. MI03: Display Physical inventory document
5. MI08: Enter Count / Difference
Process Flow 3:
1. MI09: Enter without document reference
2. MI20: Difference List
3. MI07: Post Difference
Process Flow 4:
1. MI10: Enter Without document reference
Process Flow 5:
1. MI31: Create Physical Inventory without special stock
6. MI20: Difference List
Page 208 of 369
9. Valuation and Account Assignment

9.1Account Determination
An automatic function that determines the accounts for posting amounts in Financial Accounting
For account determination, you can group together valuation areas by activating the valuation
grouping code. This makes the configuration of automatic postings much easier.
The valuation grouping code makes it easier to set automatic account determination.
Within the chart of accounts, you assign the same valuation grouping code to the valuation
areas you want to assign to the same account.
Valuation grouping codes either reflect a fine distinction within a chart of accounts or they
correspond to a chart of accounts.
Within a chart of accounts, you can use the valuation grouping code
Define individual account determination for certain valuation areas
Define common account determination for several valuation areas (company codes or
plants)
The valuation class is a group of materials with the same account determination. If a transaction
is to be posted to different accounts depending on the valuation class, create an account
determination for each valuation class in the step Create automatic postings.
The valuation classes allowed depend on the material type. Several valuation classes are
generally allowed for one material type. A valuation class can also be allowed for several
material types.
The link between the valuation classes and the material types is set up via the account category
reference.
The account category reference is a combination of valuation classes. Precisely one account
category reference is assigned to a material type.
Postings are made to G/L accounts automatically in the case of Invoice Verification and
Inventory Management transactions relevant to Financial and Cost Accounting.
Chart of accounts
List of G/L accounts is called as Chart of accounts. You must define the automatic
account determination individually for each chart of accounts.
Valuation grouping code of the valuation area
If valuation is same for all plants, assign different valuation areas to one valuation
grouping code. If not, assign different valuation areas to different valuation grouping
code. You must define the automatic account determination individually for every
valuation grouping code within a chart of accounts. It applies to all valuation areas which
are assigned to this valuation grouping code.
Transaction/event key (internal processing key)
Posting transactions are predefined for those inventory management and invoice
verification transactions relevant to accounting.
Account grouping (only for offsetting entries, consignment liabilities, and price
differences)
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Since the posting transaction "Offsetting entry for inventory posting" is used for different
transactions (for example, goods issue, and scrapping, physical inventory), which are
assigned to different accounts (for example, consumption account, scrapping, and
expense/income from inventory differences), it is necessary to divide the posting
transaction according to a further key: account grouping code.
An account grouping is assigned to each movement type in inventory management
which uses the posting transaction "Offsetting entry for inventory posting".
Under the posting transaction "Offsetting entry for inventory posting", you must assign
G/L accounts for every account grouping, that is, assign G/L accounts.
If you wish to post price differences to different price difference accounts in the case of
goods receipts for purchase orders, goods receipts for orders, or other movements, you
can define different account grouping codes for the transaction key.
Using the account grouping, you can also have different accounts for consignment
liabilities and pipeline liabilities.
Valuation class of material or (in case of split valuation) the valuation type
The valuation class allows you to define automatic account determination that is
dependent on the material. for example: you post a goods receipt of a raw material to a
different stock account than if the goods receipt were for trading goods, even though the
user enters the same transaction for both materials.
You can achieve this by assigning different valuation classes to the materials and by
assigning different G/L accounts to the posting transaction for every valuation class.
Page 210 of 369
MM Account Determination Logic Flow
Material Type
Valuation Area
(Plant )
Valuation Class
Valuation
Grouping Code
Account Category
Reference
Company Code
Movement Type
Chart of Accounts
Valuation String
Account Modifiers
G/L Account
Transaction event
Keys
Expenditure/income from transfer posting (AUM)

This transaction is used for transfer postings from one material to another if the complete
value of the issuing material cannot be posted to the value of the receiving material. This
applies both to materials with standard price control and to materials with moving
average price control. Price differences can arise for materials with moving average
price if stock levels are negative and the stock value becomes unrealistic as a result of
the posting. Transaction AUM can be used irrespective of whether the transfer posting
involves a transfer between plants. The expenditure/income is added to the receiving
material.
Change in stock (BSV)

Changes in stocks are posted in Inventory Management at the time goods receipts are
recorded or subsequent adjustments made with regard to subcontract orders.
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If the account assigned here is defined as a cost element, you must specify a preliminary
account assignment for the account in the table of automatic account assignment
specification (Customizing for Controlling) in order to be able to post goods receipts
against subcontract orders. In the standard system, cost center SC-1 is defined for this
purpose.
Stock posting (BSX)

This transaction is used for all postings to stock accounts. Such postings are effected,
for example:
o
In inventory management in the case of goods receipts to own stock and goods
issues from own stock
In invoice verification, if price differences occur in connection with incoming

invoices for materials valuated at moving average price and there is adequate
stock coverage
In order settlement, if the order is assigned to a material with moving average

price and the actual costs at the time of settlement vary from the actual costs at
the time of goods receipt
Because this transaction is dependent on the valuation class, it is possible to manage

materials with different valuation classes in separate stock accounts.
Take care to ensure that:
A stock account is not used for any transaction other than BSX
Postings are not made to the account manually
The account is not changed in the productive system before all stock has been
booked out of it
Small differences, Materials Management (DIF)

This transaction is used in Invoice Verification if you define a tolerance for minor
differences and the balance of an invoice does not exceed the tolerance.
Purchase account(EIN), purchase offsetting account (EKG), freight purchase account

(FRE)
These transactions are used only if Purchase Account Management is active in the
company code.
Note
Due to special legal requirements, this function was developed specially for certain
countries (Belgium, Spain, Portugal, France, Italy, and Finland).
Before you use this function, check whether you need to use it in your country.
Freight clearing (FR1), provision for freight charges (FR2), customs duty clearing (FR3),
provision for customs duty (FR4)
These transactions are used to post delivery costs (incidental procurement costs) in the
case of goods receipts against purchase orders and incoming invoices. Which
transaction is used for which delivery costs depends on the condition types defined in
the purchase order.
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You can also enter your own transactions for delivery costs in condition types.
External service (FRL)

The transaction is used for goods and invoice receipts in connection with subcontract
orders.
purpose.
External service, delivery costs (FRN)

This transaction is used for delivery costs (incidental costs of procurement) in connection
with subcontract orders.
purpose.
Offsetting entry for stock posting (GBB)

Offsetting entries for stock postings are used in Inventory Management. They are
dependent on the account grouping to which each movement type is assigned. The
following account groupings are defined in the standard system:
o
AUA: for order settlement
AUF: for goods receipts for orders (without account assignment)

and for order settlement if AUA is not maintained
AUI: Subsequent adjustment of actual price from cost center directly

to material (with account assignment)
BSA: for initial entry of stock balances
INV: for expenditure/income from inventory differences
VAX: for goods issues for sales orders without

account assignment object (the account is not a cost element)
VAY: for goods issues for sales orders with

account assignment object (account is a cost element)
VBO: for consumption from stock of material provided to vendor
VBR: for internal goods issues (for example, for cost center)
VKA: for sales order account assignment

(for example, for individual purchase order)
VKP: for project account assignment (for example, for individual PO)
VNG: for scrapping/destruction
VQP: for sample withdrawals without account assignment
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VQY: for sample withdrawals with account assignment
ZOB: for goods receipts without purchase orders (mvt type 501)
ZOF: for goods receipts without production orders

(mvt types 521 and 531)
Purchase order with account assignment (KBS)

You cannot assign this transaction/event key to an account. It means that the account
assignment is adopted from the purchase order and is used for the purpose of
determining the posting keys for the goods receipt.
Exchange rate differences in the case of open items (KDM)

Exchange rate differences in the case of open items arise when an invoice relating to a
purchase order is posted with a different exchange rate to that of the goods receipt and
the material cannot be debited or credited due to standard price control or stock
undercoverage/shortage.
Consignment liabilities (KON)

Consignment liabilities arise in the case of withdrawals from consignment stock or from a
pipeline or when consignment stock is transferred to own stock.
Depending on the settings for the posting rules for the transaction/event key KON, it is
possible to work with or without account modification. If you work with account
modification, the following modifications are available in the standard system:
None for consignment liabilities
PIP for pipeline liabilities
Price differences (PRD)

Price differences arise for materials valuated at standard price in the case of all
movements and invoices with a value that differs from the standard price. Examples:
goods receipts against purchase orders (if the PO price differs from the standard
pricedardpreis), goods issues in respect of which an external amount is entered,
invoices (if the invoice price differs from the PO price and the standard price).
Price differences can also arise in the case of materials with moving average price if
there is not enough stock to cover the invoiced quantity. In the case of goods
movements in the negative range, the moving average price is not changed. Instead,
any price differences arising are posted to a price difference account.
Depending on the settings for the posting rules for transaction/event key PRD, it is
possible to work with or without account modification. If you use account modification,
the following modifications are available in the standard system:
o
None for goods and invoice receipts against purchase orders
PRF for goods receipts against production orders and

order settlement
PRA for goods issues and other movements
PRU for transfer postings (price differences in the case

of external amounts)
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Invoice reductions in Logistics Invoice Verification (RKA)

This transaction/event key is used in Logistics Invoice Verification for the interim posting
of price differences in the case of invoice reductions.
If a vendor invoice is reduced, two accounting documents are automatically created for
the invoice document. With the first accounting document, the amount invoiced is posted
in the vendor line. An additional line is generated on the invoice reduction account to
partially offset this amount. With the second accounting document, the invoice reduction
is posted in the form of a credit memo from the vendor. The offsetting entry to the vendor
line is the invoice reduction account. Hence the invoice reduction account is always
balanced off by two accounting documents within one transaction.
Unplanned delivery costs (UPF)

Unplanned delivery costs are delivery costs (incidental procurement costs) that were not
planned in a purchase order (e.g. freight, customs duty). In the SAP posting transaction
in Logistics Invoice Verification, instead of distributing these unplanned delivery costs
among all invoice items as hitherto, you have the option of posting them to a special
account. A separate tax code can be used for this account.
Input tax, Purchasing (VST)

Transaction/event key for tax account determination within the "subsequent settlement"
facility for debit-side settlement types. The key is needed in the settlement schema for
tax conditions.
GR/IR clearing (WRX)

Postings to the GR/IR clearing account occur in the case of goods and invoice receipts
against purchase orders. For more on the GR/IR clearing account, refer to the SAP
Library (documentation MM Material Valuation).
Caution
You must set the Balances in local currency only indicator for the GR/IR clearing
account to enable the open items to be cleared. For more on this topic, see the field
documentation.
9. 1.1 Define Valuation Control

For account determination, you can group together valuation areas by activating the valuation
grouping code. This makes the configuration of automatic postings much easier. In the
standard SAP R/3 System, the valuation grouping code is set to active.
Configuration:
T-code
OMWM.
Menu Path
IMG Material ManagementValuation and Account

assignmentAccount determination Account determination without
wizardDefine valuation control.
Page 215 of 369
9. 1.2 Group Together Valuation Areas

Since Valuation Grouping has been activated, assign valuation areas to a valuation grouping
code. The valuation grouping code makes it easier to set automatic account determination.
Within the chart of accounts, the same valuation grouping code is assigned to the valuation
areas needed to be assigned to the same account.Valuation grouping codes either reflect a fine
distinction within a chart of accounts or they correspond to a chart of accounts. Within a chart of
accounts, you can use the valuation grouping code: to define individual account determination
for certain valuation areas ( company codes or plants) and to define common account
determination for several valuation areas (company codes or plants).
Configuration:
T-code
OMWD
Menu Path

wizardGroup together valuation areas.
Page 216 of 369
Against your plant, company code, chart of accounts maintain the valuation grouping code.
There is no validation for valuation grouping code.
Ex: you have 3 plants, If want to capture the raw material consumption value in single G/ L use
same valuation grouping code for all 3 plants. If you required assign different G/L then maintain
different valuation grouping code.
9. 1.3 Define Valuation Classes
In this step, which valuation classes are allowed for material types are defined. If a user creates
a material, he must enter the material's valuation class in the accounting data. The ERP system
proposes these allowed Values while Creating a Material with a Configured Material Type.
The valuation class is a group of materials with the same account determination. If a transaction
is to be posted to different accounts depending on the valuation class, create an account
determination for each valuation class in the step Create automatic postings.
The valuation classes allowed depend on the material type. Several valuation classes are
generally allowed for one material type. A valuation class can also be allowed for several
material types.
The link between the valuation classes and the material types is set up via the account category
reference.
The account category reference is a combination of valuation classes. Precisely one account
category reference is assigned to a material type.
Configuration:
T-code
OMSK.
Menu Path

wizardDefine valuation classes.
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Click on account category reference
Maintain ACR code and description >save.
Account category reference used to set the link between valuation class and material
type.
Click on valuation class
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Enter valuation class, description and assign to ACR>save. it is not possible to assign
multiple ACR to one valuation class.
Click on material type/account category reference
Assign ACR to required material type, it is not possible to assign multiple ACR to one
material type.
Valuation class has the following functions:
Allows the stock values of materials of the same material type to be posted to
different G/L accounts.
Allows the stock values of materials of different material types to be posted to the
same G/L account.
Determines together with other factors the G/L accounts updated for a valuation-relevant
transaction (such as a goods movement.
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Material type/Account category reference: Assignment of account category reference to

material type is done here. This is the link between the Material Type and the Valuation
Class
9. 1.4 Define Account Groupings for Movement types

Using this function, you can assign an account grouping to movement types. The account
grouping is a finer subdivision of the transaction/event keys for the account determination.
Configuration:
T-code
OMWN
Menu Path

wizardDefine account groupings for movement types.
It is possible to change the account modifiers for the GBB,KON and PRD transaction event keys
for required movement types. However it is not recommendable to change the standard
settings. In this configuration account determination logic is pre defined by SAP based on
movement type wise.
9. 1.5 Configure Automatic Postings
System settings for Inventory Management and Invoice Verification transactions for automatic
postings to G/L accounts are entered. The list of transactions in Materials Management and
their definitions are given here.
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Postings are made to G/L accounts automatically in the case of Invoice Verification and
Inventory Management transactions relevant to Financial and Cost Accounting.
Configuration:
T-code
OMWB.
Menu Path

wizardConfigure automatic postings.
Click on cancel
Click on account assignment
Page 221 of 369
As per the requirement > select the key BSX > double click
Enter chart of accounts
Continue
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Maintained valuation grouping code, valuation class and G/L account.

If required it is possible to change the rules > click on rule
Activate rules as per the requirement.

Click on posting keys to enter posting keys for the transaction event key
Page 223 of 369
9.2 Purchase Account Determination

9.2.1 Activate Purchase Accounts in Company Code
Activate the purchase account management function in the company code.
In some countries purchase accounts must be managed to document the value at which
externally procured materials are posted.
The purchase account is posted at the time goods receipts and incoming invoices are posted,
with the same amount as the stock account. The offsetting entry is posted to a purchase
offsetting account. The purchase account is generally not posted upon goods receipts for
purchase orders with account assignment. A freight purchase account also exists. This is used
to document delivery costs posted for externally procured materials
Configuration:
T-code
OLMW
Menu Path

wizardPurchase accounts activate purchase accounts in company
code
Page 224 of 369
Activate purchase account against company code.

9.2.2 Calculation of Value Purchase Accounts
You define for each valuation area whether the purchase account should be posted with the
same amount as the stock account (stock value) or with the same amount as the GR/IR clearing
account (receipt value).
You can also specify that delivery costs are also posted to the price difference account instead
of only to the purchasing freight account when purchase account management is active. The
offsetting account for this additional posting is the purchase offsetting account.
You can use this additional posting to ensure that an active material ledger takes into account
the freight costs when prices are adjusted. If you set the indicator Delivery costs to PDA when
purchase account active, this takes effect immediately. If you also enter a fiscal year in the
indicator Valid from date, you specify when the validity period starts.
Configuration:
T-code
OLMW
Menu Path

wizardPurchase accounts calculation of value for purchase
accounts
Page 225 of 369
9.2.3 Separate Accounting Documents for Purchase Accounts

You define for each valuation area whether the system should create two separate FI
documents for stock and purchase account postings or for invoice and purchase account
postings (in Logistics Invoice Verification only).
Goods receipt
The first document contains the postings to the stock or price difference account and the
purchase offsetting account. The second document contains the postings to the GR/IR
clearing account and the purchase account. For delivery costs, it also contains the
postings to the freight clearing account and freight purchasing account. The second
document contains the postings to the purchase offsetting account and the stock or price
difference account.
Invoice receipt
The first document contains the postings to the vendor account, the GR/IR clearing
account and the purchase account. For delivery costs, it also contains the postings to
the freight clearing and freight purchase account.
Configuration:
T-code
OLMW
Menu Path

wizardPurchase accounts Separate accounting document for
purchase account postings
Process of assignments in the configuration:

Activated two accounting documents for the company code 3100.
Page 226 of 369
Configure the document type: Standard document type WN for Purchase accounts
Standard document type WN for Purchase accounts
Page 227 of 369
Number ranges will be maintained
Page 228 of 369
Page 229 of 369
9. 3 Split Valuation
Split valuation enables you to valuate sub stocks of a material in different ways (for
example, according to external procurement or in-house production) under the menu
option "Split valuation", you can determine whether and how you want to use split
valuation at your company.
It is possible to find out the quantity and value of the material against the valuation type.
You need to extend the material for valuation types. Activate the split valuation type at
the plant level.
9. 3.1 Activate Split Valuation

You configure whether split valuation is allowed at your company. If you generally allow split
valuation, this does not mean that you must valuate each material on this basis. You decide
whether to do so or not for a particular material when creating the material master record.
Configuration:
T-code
OMWO
Menu Path

assignmentSplit Valuation Activate Split Valuation
Page 230 of 369
9. 3.2 Configure Split Valuation

In split valuation, you can distinguish between partial stocks of a material according to certain
criteria and valuate them separately.
The material stock is divided according to valuation category and valuation type:
The valuation category determines how the partial stocks are divided, that is,
according to which criteria.
The valuation type describes the characteristics of the individual stocks
Valuation Category: Criterion for the separate valuation of different stocks of a material
managed under one material number.
Valuation type: Characteristics
Assignment Process:
1. Determine the valuation categories and valuation types that are allowed for all
valuation areas:
global valuation categories via menu "Goto --> Global Categories"
global valuation types via menu "Goto --> Global Types"
2. Allocate the valuation types to the valuation categories.

a) Select "Goto --> Global Categories".
b) Position the cursor on a valuation category and select "Goto --> Global
Categories --> Allocations --> Types->Category".
c) Activate the valuation types you want.
3. Determine the local valuation categories for each valuation area.
a) Select "Goto --> Local definitions".
b) Position the cursor on a valuation area
Page 231 of 369
Configuration:
T-code
OMWC
Menu Path

assignmentSplit Valuation Configure Split Valuation
Click on global type
Click on create
Page 232 of 369
Enter valuation type code, attributes like whether this valuation type for external purchase or
internal purchase and maintain ACR>save>create.
Click on Global categories
Page 233 of 369
Click on create
Enter valuation category , if required maintain default valuation type external and internal
procurement types>save>create.
Page 234 of 369
Select valuation category > click on type categories
Select valuation type > click on activate
Page 235 of 369
Save> click on cat OUs
select the plant > click on activate
Page 236 of 369
10. Invoice Verification

It is in Logistics Invoice Verification that incoming invoices are verified in terms of their content,
prices and quantity. When the invoice is posted, the invoice data is saved in the system. The
system updates the data saved in the invoice documents in Materials Management and
Financial Accounting.
Invoices with purchase order reference
All the items in a purchase order can be settled. With purchase-order-based Invoice
Verification, all the items of a purchase order can be settled together, regardless of
whether an item has been received in several partial deliveries.
Invoices with delivery document reference
Each goods delivery document is settled separately.
Invoices can be posted directly to G/L accounts or material accounts
Invoices with service entry sheet reference.
Credit Memo for the vendors is nothing but debit memo
Subsequent debit/ credit for vendors.
Page 237 of 369
Functionalities
1.Invoice verification
2.Credit Memo
3.Subsequent debit
4. Subsequent credit
5. Invoice reduction
Above functionalities are supported with Purchase order, delivery note, bill of lading, service
entry sheet.
1. Credit memo: The term credit memo always refers to a credit memo from the vendor.
Therefore, posting a credit memo always leads to a debit posting on the vendor account.
Usage of credit Memo :
As in the case of invoices, credit memos refer to purchase orders or goods receipts. They
are used to correct the purchase order history if the quantity invoiced was too high, for
example, if an invoice was too high or if part of the quantity was returned.
When you post a credit memo, the total quantity in the purchase order history is reduced by
the credit memo quantity.
2. Subsequent debit/credit: it is exists when an additional invoice or credit memo is
received for a transaction that has already been invoiced.
Usage of subsequent debit / credit :
The system records every subsequent debit/credit in the purchase order history.
By posting a subsequent debit/credit, the system updates the ordering transaction on a
value basis but not on a quantity basis. The quantity invoiced therefore does not change, but
the total value invoiced does.
The maximum quantity you can subsequently debit or credit is the quantity that has already
been invoiced. It is not possible to post a subsequent debit before an invoice. The system
does not check the quantity delivered. A subsequent debit/credit cannot be blocked due to
quantity variance.
If you are entering invoices or credit memos containing both standard items and subsequent
debits/credits, you have the following options:
3.Invoice reduction
Raising of debit note to vendor by automatic method , while processing of the invoice ,
system propose the value from purchase order , if you found any difference between
system value and vendor invoice then select the functionality of invoice reduction at line
item level . System compare system value and value enter in vendor account then
system raise the debit note for the balance amount. In this process system post two
accounting documents.
Draw back in the invoice reduction: while generating the debit note in invoice verification
it is not possible to get round off the debit note value i.e., debit note is raised by
automatic process. As of now system is not able to consider inventory excise & CST in
the debit note generation. In this case we will recommend creating manual debit notes.
SAP note 1402928 is delivered for the above error.
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4.Block invoices :
When an invoice is blocked, Financial Accounting cannot pay the invoice. Invoices
can be blocked either automatically or manually for automatic block of invoice
prerequisite is configure the tolerance limits of different variances like price variance,
qty variance, quality variance etc .
You can block an invoice manually, You can block an invoice by entering an R in the
field Payment block in the document header data
It is possible to round off the invoice value in invoice verification but user has to enter value
manually , round off amount will be add to round off g/l account .
AS of now customs duties and material qty is not copied from the purchase order in to
invoice verification. while doing the invoice verification user has to select the indicator
goods / services item for all vendor invoice other than freight , for freight select indicator for
planned delivery cost & select the indicator goods / service items + planned delivery cost for
both.
Invoice with Variances
An invoice is said to contain variances if a quantity or value in at least one item is invoiced at
a different value to the value that the system proposes.
There are four different types of variance:
Quantity Variance
The difference between the quantity delivered and the quantity invoiced for goods received for a
purchase order is the quantity still to be invoiced. A quantity variance exists if the quantity you
are entering from the invoice does not match this open quantity.
Ordered:
100 pieces at Rs100/pc.
Delivered:
50 pieces
Invoiced so far:
0 pieces
Invoice:
80 pieces at Rs100/pc. = Rs 8000
Page 239 of 369
Price Variance
A price variance occurs if the price per unit of measure differs to that in the purchase order,
based on the quantity and amount invoiced. Price variances occur if: The vendor does not keep
to the price arrangements made with your Purchasing department. Your purchasing department
entered the wrong price in the order item.
Ordered:
Delivered:
100 pieces
Invoiced so far:
0 pieces
Invoice:
100 pieces at Rs124/pc. = Rs124
Quantity and Price Variance

Quantity and price variances occur when an invoice not only contains a different quantity to that
still to be invoiced, but also a different price basis to that specified in the purchase order.
Ordered:
Delivered:
60 pieces
Invoiced so far:
0 pieces
Invoice:
100 pieces at Rs11/pc. = Rs1100
Order Price Quantity Variance

If the price in the purchase order refers to a unit of measure different to the order quantity, this
quantity is referred to as the order price quantity (for example, you order in pieces but are
invoiced in Rs/kg). As a check, the system works out the ratio between the quantities in order
price units and in order units. If this ratio in the invoice is different from the ratio at goods
receipt, a variance in order price quantity exists. If the invoice is received before the goods, the
ratio in the invoice is compared with that in the purchase order.
Page 240 of 369
Ordered:
100 pieces (= 250 kg) at Rs 200/kg
Delivered:
100 pieces (= 240 kg)
Invoiced so far:
0 pieces
Invoice:
100 pieces (= 260 kg) at Rs520/kg =

Rs520000
Thus, the ratio of order price quantity to order quantity is:
2.5 kg/piece in the purchase order
2.4 kg/piece at goods receipt
2.6 kg/piece in the invoice
Schedule Variance (D)

The date of invoice entry is before the delivery date agreed in the purchase order. In the SAP
system, schedule variances are treated differently depending on the value of the invoice items.
The product of the invoice item value and the number of days variance is used as a basis for
determining whether the invoice is to be blocked.
Quality Inspection (I)
If a material is defined as being relevant for quality management, goods receipts for this
material are posted to stock in quality inspection. Usage decision is not yet taken ,while doing
the invoice verification will be blocked .
10.1 Maintain Number Assignments for Accounting Documents
The ERP system creates documents in Financial Accounting when incoming invoices are
posted and groups together these documents using document types. Here,
Define the document types
Assign each document type to a number range
Assign document types to the Logistics Invoice Verification transactions
The document number ranges for accounting documents are based on the Company
Code and the Fiscal Year.
Configuration:
T-code
OMR4.
Menu Path
IMG Material ManagementLogistics invoice

verificationIncoming invoiceNumber assignmentMaintain
number assignment for accounting documents.
Page 241 of 369
Click on document types in invoice verification
Select MIRO > click on details
Page 242 of 369
Select MIRO then double click then assign the

Document Type
Doc. type adds. Doc:
RE Invoice - Gross
WN Net Goods Receipt
DocType invoice reduction: RN Vendor Auto Retentions

10.2 Maintain Number Range Intervals for Invoice Documents
Here, configure how the invoice document number generated in Logistics Invoice Verification is
created. This is done in two stages as follows:
o
You must assign a number range to the transactions in Logistics Invoice Verification.
You must assign a number interval to the number ranges.
Configuration:
T-code
OMRJ
Menu Path
IMG Material ManagementLogistics invoice verificationIncoming

invoiceNumber assignmentMaintain number assignment for
logistics documentsMaintain number range intervals for invoice
documents.
Page 243 of 369
Click on intervals
Save.
Transaction Assign number range
RD Post invoice
RS Cancel/reverse invoice,
Page 244 of 369
Number object s should be assigned in Transaction-assign number ranges against to

Transaction key RD and RS.
10.3 Tax Treatment in Invoice Reduction
You can configure how taxes are to be posted for invoice reduction.
The system creates two accounting documents for invoice reduction. The first document
(original document) contains the invoice data sent by the vendor. The second document
(complaint document) contains information about the invoice reduction.
Standard configuration is sufficient for regular business.
Configuration:
T-code
OLMR
Menu Path

invoiceTax treatment in invoice reduction.
If the tax reduction is carried out in the complaint document, the taxes in the original
document correspond to those in the vendor invoice. The tax amount for the invoice
reduction is credited in the complaint document.
If the tax reduction is carried out in the original document, the taxes in the original document are
reduced by the tax amount for the invoice reduction. In this case, the complaint document does
not contain any tax postings. This procedure is particularly recommended if you have the
system calculate the taxes automatically.
10.4 Maintain Default Values for Tax codes
You define for each company code which tax code(s) the SAP System suggests when you enter
incoming invoices.
Domestic invoices
You can define tax codes for invoices that you receive from within your own country.
Invoices with unplanned expenses

You can define tax codes for invoices with unplanned expenses. These are used if you
post to a separate account in Logistics Invoice Verification
Input tax code V0 and output tax code A0 is assigned to the company code.
Page 245 of 369
Configuration:
T-code
OLMR
Menu Path

invoiceMaintain default values for tax codes.
10.5 Configure How Unplanned Delivery Costs are posted

You specify how the system posts unplanned delivery costs in Logistics Invoice Verification.
There are two options:
Unplanned delivery costs are distributed among the individual items in proportion to the
item amounts invoiced so far and the item amounts in the current invoice.
o
The amounts determined are added to the respective item amounts.
The amounts determined are posted in a separate line for each item.
Unplanned delivery costs are posted in a separate line. You must enter a specific tax
code for the posting. You can define a default value for this in Maintain Default Values
for Tax Codes.
Page 246 of 369
Configuration:
T-code
OLMR
Menu Path

invoiceConfigure how unplanned delivery cost are posted
It is recommended to maintain space against the company code for unplanned delivery cost.
10.6 Activate Direct Postings to G/L Accounts and Materials
You configure whether you can make postings to G/L accounts and material accounts during
invoice entry and document parking. This functionality is required while posting of freight invoice
in import purchases and other special cases.
Configuration:
T-code
OLMR
Menu Path

invoiceActivate direct postings to G/l accounts and material accounts.
As per the client requirement, activate G/L tab and material tab in the MIRO. With help of these
two tab it is possible to post the entry directly.
Page 247 of 369
10.7 Set Check for Duplicate Invoice

Company code is configured for checking the Duplication of Invoices after checking the
attributes of Company Code, Reference Number and Invoice Date. This check should prevent
incoming invoices being accidentally entered and paid more than once.
The more criteria that you activate, the lower the probability of the system finding a duplicate
invoice. The Accounting documents are checked first, followed by documents from Logistics
Invoice Verification.
Configuration:
T-code
OLMR
Menu Path

invoiceSet check for duplicate invoice.
10.8 Determine Payment Block

You define the payment blocks used to block invoices for automatic payment. Payment blocks
apply to all company codes. When entering an invoice, the user can enter a payment block; the
invoice is then only paid once the payment block has been deleted.
Configuration:
T-code
OMR9
Menu Path
IMG Material ManagementLogistics invoice verificationInvoice

blockDetermine payment block.
Page 248 of 369
If required create new payment blocks.

10.9 Set Tolerance Limits
You specify the tolerance limits for each tolerance key for each company code. When
processing an invoice, the R/3 System checks each item for variances between the invoice and
the purchase order or goods receipt. The different types of variances are defined in tolerance
keys.
AN
Amount for item without order reference
AP
Amount for item with order reference
BD
Form small differences automatically
BR
Percentage OPUn variance (IR before GR)
BW
Percentage OPUn variance (GR before IR)
DQ
Exceed amount: quantity variance
DW
Quantity variance when GR qty = zero
KW
Var. from condition value
PP
Price variance
PS
Price variance: estimated price
ST
Date variance (value x days)
VP
Moving average price variance
Page 249 of 369
Configuration:
T-code
OMR6
Menu Path

blockSet tolerance limits.
Maintain above tolerance keys against company code wise as per the requirement. if not
required also maintain all tolerance keys against the company code wise with dont check
activate. Otherwise system is not allowed to post the invoice.
10.10 Activate Stochastic Block
You control in which company codes the stochastic block is active.
Configuration:
T-code
OLMR
Menu Path

blockStochastic Block Activate Stochastic Block
Page 250 of 369
Activate against company code wise.

10.11 Set Stochastic Block
You determine for each company code the degree of probability that an invoice will be
stochastically blocked.
The degree of probability depends on the invoice value; if it is the same or larger than the
threshold value, the degree of probability is the same as the percentage. If the invoice value is
smaller, the degree of probability is calculated in proportion to the threshold value.
Example
Threshold value: 3000 percentage: 60
Invoice value Degree of probability of a block
3000
60 %
5000
60 %
1500
30 % (= 60 * 1500/3000)
100
2 % (= 60 * 100/3000)
Configuration:
T-code
OLMR
Menu Path

blockStochastic Block Activate Stochastic Block
Page 251 of 369
Maintain threshold value and percentage of block against the company code wise. System will
block all invoices which are crossing threshold value against the percentage wise.
10.12 Define Attributes of System Messages
You can define the category of message received by individual users for certain messages in
Invoice Verification. This allows you determine whether a user receives a message as an
indication of:
Information ,Warning, Error
Or whether no message should be issued at all
Configuration:
T-code
OMRM
Menu Path
IMG Material ManagementLogistics invoice verificationDefine

message controls
Page 252 of 369
10.13 Transaction Data of Invoice Verification
Invoice verification will be done against the reference document ( purchase order
number , vendor invoice number , service entry sheet ,bill of lading)
While processing of invoice, system gets the data from master data as well as reference
document.
User has to cross verify the details which is mentioned in vendor invoice against system
proposed information.
If any difference in terms of qty or rate, raise debit note to vendor.
It is possible to create debit note to vendor automatic or manual. For manual creation of
debit note user has to run the MIRO transaction code.
If automatic creation if user found any difference in invoice line item, go to correction ID
field then user has to select vendor error As soon as select correction ID two fields are
open i.e., vendor invoice qty & vendor invoice amount.
User has to enter the qty and value as per vendor invoice in the above fields; system will
raise the debit for the difference amount .system generates two accounting documents,
one for debit note.
Ex: Invoice amount is Rs 1000 as per the GR

Vendor invoice is Rs 1200
In this while doing the MIRO system propose the invoice amount Rs 1000 in amount column, as
explained above user need to select the vendor error option in the correction iD field. Then user
has to enter the Rs 1200 in the vendor invoice amount.
System will compare the price from vendor invoice amount- Invoice Amount (Rs1200-Rs1000).
System will generate a debit note for Rs 200. In this process system will consider taxes also if
applicable.
Transaction:
MIRO: Enter Invoice Verification
MIR7: Park Invoice Verification
MIR4: Display Invoice Verification
MIR5: List Invoice Verification
MIR6: Overview of Invoice Verification
MR8M: Cancel Invoice Verification
MRBR: Release Invoice Verification
MR90: Print out of Invoice Verification
MR11: GR/IR Maintenance
Page 253 of 369
11. External Service Management

In addition to their own workforce, many firms now employ external service providers to do work
of various kinds. This may be due to a number of reasons: for example, their own staff may lack
either the capacity or the qualifications to perform certain tasks.
This section describes the business processes available within the application component MM
External Services Management for the efficient procurement of externally performed services:
You can specify yourself the cases in which the basic process with all steps is to be used and
the cases in which it makes sense to omit certain steps in order to save time.
You can assign the service master records administered in your company to different groups,
according to their usage. Such a group is described by the service category.
Service Master : Contains the description of a service.
The service master record counts as part of the master data within External Services
Management and serves as a source of data for you to draw upon when creating service
specifications. This enables you to save time and reduces the frequency of errors, since you
need only enter the complete service descriptions in the service master record once.
A service master record contains the following principal information for the unique description of
a service:
Service number
Service category
Descriptive texts (short and long text)
Base unit of measurement
Material/service group
Valuation class
If service master is using it is possible to determine the G/L accounts automatically in the
Purchasing documents.
To characterize the service categories in more detail, the latter are assigned an organization
status. The organization status indicates the areas in which service master records are used.
For example, units of your company may use services provided internally by other units of the
company, or procure services externally (from other companies). Your company may also
provide services for others
Define the service category.
The service category is the most important criterion for structuring service master records. It
provides a default value for the valuation classes. Service master records can be assigned to
number ranges on the basis of the service category.
Following critical information shall be maintained in the service master
Record:
Page 254 of 369
Service Number: This gives a unique identification to the service.

This is internally generated by the system.
Service Category: This describes whether a service is an internal service or a service to
be procured externally, or services performed for third parties. In conjunction with
the organizational (maintenance) status of the service master, the maintenance
views can be controlled i.e. whether a service master can have a basic data
view, controlling view, sales & distribution view. Based on the type of service, the
service category shall be maintained.
Description: This describes the service in brief
Example:
The following service categories exist:
Master records describing internal services
Master records describing services to be procured externally
Master records describing services performed for third parties.
The following service categories are available in the standard system:
ALL
Complete service
GRND
Basic services
SERV
Services, Purchasing
Actions
Maintain the service categories.
Be sure to assign number ranges to newly created service categories.
11.1 Define Organizational Status for Service categories
The organization status of service categories has a descriptive function only, not a control
function in the program. You can assign the service master records administered in your
company to different groups, according to their usage. Such a group is described by the service
category.
To characterize the service categories in more detail, the latter are assigned an organization
status. The organization status indicates the areas in which service master records are
used.SAP recommends to use the standards supplied. In this case, you need take no action.
Configuration:
T-code
OMV2.
Menu Path
IMG Logistics-GeneralMaterial ManagementExternal services

managementService masterDefine organizational status for Service
categories.
Page 255 of 369
11.2 Define Service category

The service category is the most important criterion for structuring service master records. It
provides a default value for the valuation classes. Service master records can be assigned to
number ranges on the basis of the service category.
The following service categories are available in the standard system:
ALL
SERV
BSL : BSL Services
Complete service
Services, Purchasing
For automatic G/L determination of service purchase, assign Account category reference to the
service category.
Configuration:
T-code
OMV1.
Menu Path

managementService masterDefine service category.
Select serv> click on copy as
Page 256 of 369
Save.
11.3 Define Number Ranges
Maintain the number ranges for the service master record. SAP recommends that you should
work with the standard SAP System supplied. In this case, you need take no action.
Maintain the number ranges for the service master record. Create the individual groups with the
number intervals. Assign the service categories to these groups.
Configuration:
T-code
ACNR.
Menu Path

managementService masterDefine number ranges.
It is similar to regular number assignment.

11.4 Define Number Ranges for Service Entry Sheets
Here, the number ranges for service entry sheets are maintained. They are internal (i.e)
generated by the system whenever a Service Entry sheet is saved.
Configuration:
T-code
OMH9.
Menu Path

managementNumber rangesDefine number ranges for service entry
sheet.
Page 257 of 369
11.5 Source Determination and Default Values

You can
set up the source determination facility
define default values for
the unit of measure of the service at item level
the material group of the service at item level
the line number increment for the service specifications
the updating of conditions in the service master record via conditions in

purchasing documents
define texts for user fields in the service specifications
You must generally maintain all the above settings for the client. In addition, you can make
different settings for each purchasing organization.
Priority of settings: If you have made settings at purchasing organization level, the system
applies these first. If not, it uses the general settings made at client level.
Configuration:
T-code
OLMSRV
Menu Path

managementsource determination and default values for client
T-code
OLMSRV
Menu Path

managementsource determination and default values for Purchase
org
Page 258 of 369
11.6 Transaction Data of Service Purchase Process
Service masters shall be maintained for various Services with Description, Category
and Unit of Measure using the Master Data Maintenance.
Number Ranges for service master will be internal as defined by the standard SAP with
8 digits.
Service purchase requisitions will be raised by the user departments with document type
FO, user has to enter the account assignment K (cost center), F (Order) etc and item
category D (services).
Enter service numbers in the service tab which is located in purchase requisition line
item level. Service numbers will be created for each service activity. If service master is
not maintained write the short text in the material description.
Service purchase order will be raised to the approved service vendor against to the
service purchase requisition. User has to select the propionate tax code for service tax.
Post service entry sheet instead of Goods receipt against the service purchase order.
Service entry sheet is nothing but confirmation of service against the service purchase
order. System generates the material document with 101 movement type and
accounting document to.
Invoice verification against the service entry sheet.
Process
Chart:
Page 259 of 369
Flow
Service Purchase Process Flow
Create
Purchase
Requisition
ME51N
Release
Purchase
Requisition
ME54N / ME55
Create
Request for
quotation
ME41
Maintain
Quotation
W.r t RFQ
ME47
Price
Comparison
ME49
Approed
Rejected
Reject Quotations
ME42
Release
Service
Purchase
order
ME29N /
ME28
Activity
Printout of
Service
Purchase
order
ME9F
Service entry
sheet
ML81N
Description /
Comment
Release Block Invoice if

invoice was blocked for
payment
MRBR
Invoice
verification
MIRO
Performed By
SAP
Transaction/Function
Creation of
Purchase
Requisition
manually
PR will be created Requisitioner

manually by the
indenter based on
requirement.
Account assignment
K and item category
should be D.
ME51N
Change / display
Purchase
requisition
Change / display Requisitioner

purchase requisition
ME52N / ME53N
Page 260 of 369
Create
Service
Purchase
order
ME21N
Release
Purchase
Requisition
Release
purchase Requisitioner
requisition
individual/ collective
ME54N/ ME55
Create RFQ
RFQ created by
Purchase
purchase department
and print output sent
to vendors who are
eligible to supply
indented material
ME41-create RFQ
ME9F-Print RFQ
(Development
SAP smart form)
Change RFQ
Changes in RFQ
Purchase
ME42
Maintain
Quotation
Enter details of
Purchase
ME47
Purchase
ME49 (Overall
Quotations of
Bidders
Compare
Prepare
Prices
Comparative
Prices).
statement
Create PO
Create PO with
respect to requisition
Purchase
Department
ME21N
Release PO
Signing of
Authorized
Person
ME28/ME29N
Printed PO can be
sent via Fax, E-Mail,
Post or delivered
personally
Purchase
Department
ME9F
Service entry
sheet
Service entry sheet
Concerned
Department
ML81N
Invoice
verification
Logistics invoice
verification
Finance
Department
MIRO
Park invoice
Park invoice
Finance
Department
MIR7
Credit memo
Credit for return

quantity
Finance
Department
MIRO
Purchase Order
Print PO
Page 261 of 369
(Development
SAP smart form for print
Layout)
Subsequent debit/
credit
Sub sequent debit/

credit for invoice
documents
Finance
Department
MIRO
Cancel invoice
Cancel invoice
document
Finance
Department
MR8M
Release invoice
document
Release invoice
document
Finance
Department
MRBR
Change RFQ
Changes in RFQ
Purchase
ME42
Maintain
Quotation
Enter details of
Purchase
ME47
Purchase
ME49 (Overall
Quotations of
Bidders
Compare
Prepare
Prices
Comparative
Prices). / ZME49
statement
Create PO
Create PO with
Release PO
Signing of
Purchase
Department
ME21N
ME28/ME29N
Purchase Order
Print PO
Printed PO can be
Post or delivered
personally
Purchase
Department
Material provide
to vendor
Material provided to
vendor (
components)
Store
MB1B
Creation of Sub
contract challan
Creation of sub
contract challan
against the material
document
Store
J1IF01
Change Sub
contract challan
Change Subcontract
Challan
Store
J1IF11
Page 262 of 369
ME9F
(Development
Layout)
Display Sub
contract challan
Display Subcontract
Challan
Store
J1IF12
Create Goods
Receipt
Goods receipt is
prepared at STORE
on the basis of
suppliers
Challan/Invoice and
our Purchase order
after quantity count
Store
MIGO/MB01
Print out of
Material
document
Print out of material

document
store
MB90
Inspection of
received Material
Quality check is
carried out for
sample quantity and
usage decision will
be taken
Quality
department
QA32
Transfer accepted
goods
If the goods are

accepted transfer the
stock from quality to
unrestricted use
Quality
department
QA32
Reconcile
Quantity
Material
reconciliation against
the material
document
Store
J1IFQ
Complete /
Reverse
Complete / reverse
sub contracting
challan
Store
J1IF13
Post sub sequent

adjustments
Post sub sequent

adjustment while
receiving the
material
Store
MIGO
Print out of
material
document
Print out of return

delivery document
store
MB90
Cancel Material
document
Cancel material
document
store
MBST/MIGO
Invoice
Logistics invoice
Finance
MIRO
Page 263 of 369
verification
verification
Department
Park invoice
Park invoice
Finance
Department
MIR7
Credit memo
Credit for return

quantity
Finance
Department
MIRO
Subsequent debit/
credit
Sub sequent debit/

credit for invoice
documents
Finance
Department
MIRO
Cancel invoice
Cancel invoice
document
Finance
Department
MR8M
Release invoice
document
Release invoice
document
Finance
Department
MRBR
12. Special Stock Process in Material Management

Special stocks are stocks that are managed separately as a result of their not belonging to your
company or being stored at a particular location.
1.
2.
3.
4.
5.
6.
Consignment
Subcontracting
Returnable transport packaging
Pipeline handling
Third-party processing
Stock transfer using stock transport order
12.1 Consignment
In consignment processing, the vendor provides materials and stores them on your premises. The
vendor remains the legal owner of the material until you withdraw materials from the consignment
stores. Only then does the vendor require payment. The invoice is due at set periods of time, for
example, monthly. In addition, you can also arrange with the vendor that you take over ownership
of the remaining consignment material after a certain period of time.
Process Steps
1. Create Purchase info record:
Page 264 of 369
Before you can order a material from a vendor or post a goods receipt to consignment stock, you
must maintain the consignment price for the vendor in an info record with consignment info record
type. The price is required for material valuation and accounting purposes.
If you order consignment material from several vendors, the system maintains the consignment
stock separately for each vendor, since the individual quantities of the material can have different
prices with each vendor.
2. Procurement
You can procure consignment material via purchase requisitions, purchase orders and outline
agreements for consignment material.
Creating Purchase Requisitions for Consignment Material
You enter purchase requisitions for consignment materials in exactly the same way as for other
materials. You accept the order category (such as NB) that the system proposes as a default and
enter the item category K (for consignment).
Creating Purchase Orders / Outline Agreements for Consignment Materials
The procedure for creating consignment orders is the same as for standard purchase orders or
outline agreements. However, you must note the following:
Enter the item category K for the consignment item. To ensure that the goods receipt is
posted to the consignment stores and an invoice receipt cannot be generated for the item.
Do not enter a net price.
3. Goods Receipts
Goods receipts to your consignment stores can either:
refer to a purchase order or

be made by the vendor directly without a purchase order
The posting procedure differs slightly.

A goods receipt to consignment stock is possible for three stock types:
Unrestricted-use stock
Quality inspection stock
Blocked stock
Page 265 of 369
Goods Receipts against purchase order:MIGO

System generates the material document as a proof of inventory transaction with movement type
101 K- for unrestricted stock, 103k-blocked stock. Accounting document will not be generated.
Goods Receipts against without purchase order: MIGO
System generates the material document as a proof of inventory transaction with movement type
501 K- for unrestricted stock, 503k-Quality stock and 505K Blocked stock. Accounting document
will not be generated.
Updating Consignment Stock
After a goods receipt for consignment material has been posted, the consignment stock of the
material increases in the given storage location. The consignment stock is available for MRP.
However, the material's valuated stock does not increase since the consignment stock still belongs
to the vendor.
4. Display Stock
You can view stock of the material in MMBE and MB54 Transactions. System is updated under
consignment vendor.
5. Goods issue
You can only post a goods issue from consignment stock to consumption if the material belongs to
unrestricted-use stock. If the consignment material is in quality inspection or blocked stock, you
must first transfer it to the unrestricted-use stock.
Goods issue will be done in MB1A with corresponding GI movement type with special stock K.
System generates the material document as a proof of inventory transaction. Accounting document
will not be generated.
Page 266 of 369
6. Transfer Postings: MB1B

It is possible to transfer consignment material within a plant from one storage location to another,
You posted the consignment material to the quality inspection stock or blocked stock; you must
transfer it to the unrestricted-use stock before it can be withdrawn.
Use the required movement types (311,312,321,322,323,324,325,326,343,344,349,350) with
special stock K.
7. Transfer Postings to Own Stock
Supposing you agreed with the vendor that after six months you will take over ownership of the
remaining consignment stock. To do this, carry out the following goods movement:
Use the required movement types (411 and 412) with special stock K.
8. Consignment and Pipeline Settlement: MRKO

Removing material from consignment stores or transferring material to your companys own stock
results in liabilities towards the vendor. You should settle these liabilities at regular intervals.
Consignment materials are settled without the vendor issuing an invoice, as the vendor company is
unable to track withdrawals directly. The vendor can only manage its consignment stock by taking
deliveries and payments into account.
Accounting document:
Vendor account
Consignment clearing
Page 267 of 369
12.2 Subcontracting
In subcontract order processing, the vendor receives materials (components) with which it
produces the end product. The following are involved:
You order the end product using a subcontract order. The components that the vendor
needs to manufacture the end product are specified in the purchase order.
In Inventory Management, the components are posted to the stock of material provided to
vendor. The components are then supplied to the vendor.
The vendor performs its service and delivers the ordered material (the end product). The
consumption of the components is posted.
If, after the goods receipt has been posted, the vendor informs you that a larger or smaller
quantity of the components was actually consumed than planned in the purchase order,
you must make an adjustment.
The vendor charges for his or her service. The invoice is posted in Invoice Verification.
Stock of Material Provided to Vendor
The quantities of the components to be provided to the vendor are entered into the stock of
material to be provided to vendor. This stock has the following features:
It is managed as part of your total valuated stock, and is available for MRP.
It is only managed at plant level, since it is not stored at your own company but on the
vendor's site.
Two stock types are possible:
unrestricted-use stock
quality inspection stock
Stock can be transferred between the two stock types. Withdrawals can only be posted
from unrestricted stock, however.
You can take a physical inventory of the stock of material to be provided to vendor.
Process Flow
If material is excisable material maintain excise master data in J1ID. For the components in
the subcontracting order , maintain material and chapter id combination , in that check
subcontracting check box as well a maintain excise assessable value for the same material
. Assessable value is required for print out of subcontracting challan.
Maintain excise master data > material and chapter id combination and CENVAT
determination for the incoming material in the subcontracting purchase order.
Create purchase requisition with item category L (L: sub contracting) and maintain the same
component in the subcontracting PR. Purchase requisition can be generated in two ways.
Page 268 of 369
Purchase requisitions created automatically in production process. If purchase requisition is

generated in Production process account assignment will be F (order).
If required create request for quotation to the approved suppliers, maintain the quotation, do
the price comparison for the quotations selected best vendor.
Create purchase order to selected vendor against the subcontracting purchase requisition
then enter the activity price &save the purchase order. If subcontracting purchase info
record was maintained system picks the price into subcontracting purchase order.
Goods issues to vendor in MB1B transaction with 541 movement type, click on the purchase
order tab then enter purchase order number and line item; press enter, in MB1B purchase
order field should be filled with subcontracting purchase order number.
After completion of transaction stock will be display as material provided to vendor system is
not generating accounting document.
If the material is excisable create 57F4 challan against the material document (541
movement type) in J1IF01 transaction. Change of subcontracting challan in J1IF11 and
display of subcontracting challan in J1IF12.Take the print of 57F4 challan.
Goods receipts against the job work order, in goods receipts user has to confirm the receiving
material as well as component in GR .System updates the stock of receiving material as
well as consumed the components. Enter the sub contracting challan number in the excise
tab.
System generates a material document as well as accounting document. System updates the
stock of receiving material and reduces the stock of material provided to vendor.
For receiving material system update the stock with 101 movement type, for component
consumption system reduce the stock with 543 O movement type O standards for material
provided to vendor.
Reconciliation against the GR in J1IFQ transaction. User has to enter the receiving qty in the
reconciliation.
Run the report J1IFR for Annexure-IV (Subcontracting register), for challan which are
pending for reconciliation check challan captured in J1IFR.
Invoice verification against the subcontracting order.
Page 269 of 369
Sub Contracting Purchase Process Flow
Create
Purchase
Requisition
ME51N
Release
Purchase
Requisition
ME54N / ME55
Create
Request for
quotation
ME41
Maintain
Quotation
W.r t RFQ
ME47
Price
Comparison
ME49
Approed
Create Sub
Contracting
Purchase
order
ME21N
Quality
Inspection
QA32
Rejected
Rejected
Reject Quotations
ME42
Release Sub
Contracting
Purchase
order
ME29N /
ME28
Printout of
Sub
contracting
Purchase
order
ME9F
Goods
Issues to
Vendor
MB1B
Create 57F4
Challan
J1IF01
Goods
Receipts
MIGO
Approed
Release Block Invoice if

invoice was blocked for
payment
MRBR
Work Step
Creation of
Purchase
Requisition
manually
Change / display
Purchase
requisition
Release Purchase
Page 270 of 369
Description
Invoice
verification
MIRO
Performed By
Reconciliation
Quantity
J1IF13
SAP
PR will be created User department

manually / automatic
ME51N
Change / display User department

Purchase requisition
ME52N/ ME53N
Release
ME54N / ME55
purchase GM/ VP
Transfer
quality stock
To
Unrestricted
stock
QA32
Transfer
quality stock
Return
delivery
QA32
Requisition
Create RFQ
requisition
RFQ created by
purchase department
to vendors who are
eligible to supply
indented material
Change RFQ
Changes in RFQ
Maintain Quotation Enter details of
Purchase
ME41-create RFQ
ME9F-Print RFQ
(Development
Purchase
Purchase
SAP smart form)

ME42
ME47
Purchase
ME49 (Overall
Quotations of
Compare
Bidders
Prepare
Prices
Comparative
Create PO
Release PO
statement
Create PO with
Signing of
Prices). / ZME49
Purchase
Department
ME21N
ME28/ME29N
Purchase Order
Print PO
Material provide to
vendor
Creation of Sub
contract challan
Page 271 of 369
Printed PO can be
Post or delivered
personally
Purchase
Department
Material provided to
Store
vendor ( components)
Creation of sub
Store
contract challan
ME9F
(Development
Layout)
MB1B
J1IF01
Change Sub
contract challan
document
Change Subcontract
Challan
Display Sub
contract challan
Display Subcontract
Challan
Create Goods
Receipt
Goods receipt is
prepared at STORE
on the basis of
suppliers
Challan/Invoice and
our Purchase order
after quantity count
Print out of
Material document document
Inspection of
Quality check is
received Material carried out for sample
quantity and usage
decision will be taken
Transfer accepted If the goods are
goods
unrestricted use
Reconcile Quantity Material reconciliation
document
Complete /
Complete / reverse
Reverse
sub contracting
challan
Post sub sequent Post sub sequent
adjustments
adjustment while
receiving the material
Print out of
Print out of return
Page 272 of 369
Store
J1IF11
Store
J1IF12
Store
MIGO/MB01
store
MB90
Quality
department
QA32
Quality
department
QA32
Store
J1IFQ
Store
J1IF13
Store
MIGO
store
MB90
material document
Cancel Material
document
Invoice verification
Park invoice
Credit memo
Subsequent debit/
credit
Cancel invoice
Release invoice
document
delivery document
Cancel material
document
Logistics invoice
verification
Park invoice
Credit for return
quantity
Sub sequent debit/
credit for invoice
documents
Cancel invoice
document
Release invoice
document
store
MBST/MIGO
Finance
Department
Finance
Department
Finance
Department
Finance
Department
MIRO
Finance
Department
Finance
Department
MR8M
MIR7
MIRO
MIRO
MRBR
12.3 Returnable Transport Packing

Returnable transport packaging (RTP) is a multi-trip packaging medium (for example, pallets or
containers) in which goods can be transported more than once between vendors and customers.
Returnable transport packaging from a vendor that is stored at a location on your premises is
managed as special stock and clearly assigned as belonging to the vendor. It is the property of the
vendor and is therefore not included in the customers valuated stock.
Standard Purchase order will be follow for procurement.
RTP process will be start from goods receipts.
Standard material type for returnable transport packing is LEIH, create RTP materials as
per the requirements. No need to maintain the accounting view and account determination.
While doing the goods receipts against the purchase order ( Gas) in MIGO click on the
Transport equipment icon
new line item will be add in the GR. Enter RTP
material number , qty received (cylinders) , plant and storage location.
System generates the material document and accounting document for procured material
only. Movement type for procured material is 101 and RTP material is 501 M. stock of two
Page 273 of 369
materials are updated. This goods movement results in an increase in the unrestricted-use
RTP stock from the vendor. The total valuated stock remains unchanged.
Reports will be used for RTP materials like MB52, MB5B and MB51.
RTP material issues to Vendor, In MIGO transaction use 502 M movement type.
It is possible to transfer the RTP material from one storage location another in MB1B
transaction with movement type 311M. This goods movement results in a decrease in the
unrestricted-use RTP stock from the vendor at the issuing storage location. The
unrestricted-use RTP stock at the receiving storage location increases .
12.4 Pipeline Handling

A pipeline material is a material that flows directly into the production process from a pipeline (for
example, oil), from a pipe (for example, tap water), or from another similar source (for example,
electricity).
A material from the pipeline is always available; i.e. it can be withdrawn from the pipeline at any
time and in any quantity.
Depending on the system configuration, a material can be withdrawn only from the pipeline or, in
addition to the pipeline, normal stocks of the material can also be managed.
Prerequisites:
1. Create Material
Materials with Material Type PIPE

Pipeline handling is mandatory for materials with material type PIPE; i.e. only withdrawals
from the pipeline can be posted for these materials. These materials have the following
characteristics:
They are neither procured nor planned. They can be withdrawn from the pipeline at
any time and in any quantity.
They are not stored or kept in stock. No physical inventory is taken.
Pipeline movements are mandatory in all valuation areas; i.e. no other goods
movements may be posted.
Other Material Types

For each material type, you can specify in the valuation area whether pipeline movements
are:
Page 274 of 369
o
o
Mandatory
Allowed
If pipeline movements are not mandatory but allowed, the material can be kept in stock and
both pipeline and other movements can be posted.
A material of this type can be withdrawn from your companys own stock, from consignment
stock, or from the pipeline
2. Create Purchase info record
You determine the price of a pipeline material from a vendor in a pipeline info record. You can only
post pipeline movements after you have created the pipeline info record. Tax code is required as well
as price should be maintained in the scale process.
3. Creation of purchase order is not required.

4. Goods Issues
You can enter a pipeline withdrawal for an order or for a cost center. Pipeline withdrawals differ
from other goods movements in that they are entered with the special stock indicator P. The
withdrawal is valuated at the price defined in the pipeline info record. Transaction code is
MB1A.System generates the material document as well as accounting document.
Accounting entry is Consumption account 1000+
Liabilities from Pipe line 10005. Pipeline Settlement: MRKO
If pipeline liabilities are to be posted to the same account as consignment liabilities, you have to
settle consignment and pipeline liabilities together.
If pipeline liabilities and consignment liabilities are to be posted to different accounts, you settle
them separately.
Accounting entry is vendor account 1000Liabilities from Pipe line 1000+
Pipeline settlement is not connected to the purchasing information system, because the purchase
order history is not updated during consignment settlements.
Page 275 of 369
13. Special Scenario in Material Management

13.1 Automatic G/L account in Service Purchases
While creation of service purchases documents or non stock, non valuated and short ext
purchases system is asking to enter the G/L account. In generally it is difficult to enter the G/L by
user, more scope for wrong G/L selection and issues in the purchasing documents. To avoid these
please follow the below process.
1. Create Material group.
Create material groups in OMSF transaction as per the requirements.
NSTOCK: Non Stock
NONVALUE: Non Valuated Stock
SERVICE: Services for AMC
EXSS: External Services
YSER: Miscellaneous services
SSER Subcontracting services
2. Create Account Category references

Create account category reference as per the requirements in OMSK transaction
Example:
YNST Non Stock
YNVL Non Value
YSER Services
3. Define Valuation Class
Page 276 of 369
Define valuation classes as per the requirements in OMSK transaction

9010 YNST NON STOCK
9000 YSER AMC (other than IT)
9040 YSER External Services
9020 YSER Miscellaneous services
9030 YSER Subcontracting services
4. Configure Automatic Postings

Configure automatic postings in OBYC transaction under the transaction event key GBB> account
modifier VBR. Assign the G/L accounts against the valuation class wise.
5. Entry Aids for items without Material Master
Assign valuation class against the material group wise. so that when ever material group is entered
in the purchasing documents system picks the G/L account which is assigned for the valuation
under VBR account modifier.
Configuration:
T-code
SPRO
Menu Path
IMG Logistics-GeneralMaterial ManagementPurchasing

Material Master Entry aids for items without material master.
In case of service Mater assign account category reference to service category in the service
category configuration.
Page 277 of 369
While creation of service master in AC01 transaction, material group and valuation class should be
entered then only system picks the G/L while doing the service purchasing documents.
13.2 Reporting in Purchasing

It is possible to execute the standard reports in the different scope list, by default BEST will be
displayed for all purchase order report. It is possible to change the default scope list for
transactions.
13.2 1. Define Default Values for Transactions

Assign the scope list against the transaction code .
Configuration:
T-code
SPRO
Menu Path

ReportingScope list Maintain Purchasing Lists Define Default
values for Transactions.
13.2 2. Define Selection Parameters

You can define additional criteria for the selection of purchasing documents in the output list. Ex:
Via a selection parameter, you can specify that only "partially delivered" purchase orders are to be
displayed (POs for which a goods receipt has already been recorded, where the GR quantity is
less than the quantity ordered).
Configuration:
T-code
Page 278 of 369
SPRO
Menu Path

ReportingSelection Parameters Maintain Purchasing Lists Define
selection parameters

You can configure the default selection parameters for transaction, this will help to user while
execution of the reports.
Configuration:
T-code
SPRO
Menu Path

ReportingSelection Parameters Maintain Purchasing Lists Define
Default values per transaction

Assign the scope list against the transaction code like ME55.
Configuration:
T-code
SPRO
Menu Path

ReportingScope list Maintain Purchase requisition Lists Define
Default values for Transactions.
Page 279 of 369
13.3 Vendor Evaluations

The Vendor Evaluation component supports you in optimizing your procurement processes in the
case of both materials and services.
In the SAP System, Vendor Evaluation is completely integrated into the MM Purchasing
component within Materials Management. This means that information such as delivery dates,
prices, and quantities can be taken from purchase orders.
Vendor Evaluation also uses data from the Quality Management component, such as the results of
incoming inspections or quality audits.
Vendor Evaluation accesses basic Materials Management data, Inventory Management data (such
as goods receipts), and data from the Logistics Information System (LIS).
Procurement of Materials
The Vendor Evaluation component helps you select sources of supply and facilitates the continual
monitoring of existing supply relationships. It provides you with accurate information on prices, and
terms of payment and delivery. By evaluating vendors, you can improve your enterprises
competitiveness.
On the basis of detailed information, and in collaboration with the relevant vendors, you can quickly
identify and resolve any procurement problems that may crop up from time to time.
Procurement of Services
You can check the reliability of vendors from whom you procure services on a plant by plant /
purchase organization basis. You can determine whether the vendors perform the services within
the specified timeframes and appraise the quality of the work carried out.
Scores and Criteria
The standard SAP System offers you a scoring range from 1 to 100 points, which is used to
measure the performance of your vendors on the basis of five main criteria.
You can determine and compare the performance of your vendors by reference to their overall
scores.
The main criteria available in the standard system are:
Price
Quality
Page 280 of 369
Delivery
General service/support
These four main criteria serve as a basis for evaluating vendors from whom you procure materials.
External service provision
This main criterion serves as a basis for evaluating those vendors you employ as external service
providers.
You can also define other or further main criteria, as required.
You can assign different weights to the individual criteria. The vendors overall score is computed
taking into account the weighted scores awarded for each of the main criteria.
The Vendor Evaluation System ensures that evaluation of vendors is objective, since all vendors
are assessed according to uniform criteria and the scores are computed automatically.
In this way, subjective impressions and judgments can be largely eliminated.
To create a detailed evaluation, each main criterion can be divided into several sub criteria.
The standard system provides you with certain sub criteria which suffice as a basis for evaluation.
You can also define your own additional sub criteria.
The scores for the sub criteria are calculated in different ways.
Scoring Methods
Scoring method
Fully automatically
Semi-automatically
Manually
Description
Scores are calculated by the system on the basis of existing data.
You enter individual scores for important materials, or for the quality
and timeliness of a service performed yourself. The system then
calculates the higher-level score from these.
You enter a blanket score for a sub criterion per vendor.
You can decide which of these methods to use.

Analyses
The results of vendor evaluation are displayed in the form of analyses. For example, you can
generate ranking lists of the best vendors according to their overall scores or ranking lists for
specific materials. Changes to evaluations are recorded in logs, and you have the option of printing
out evaluation sheets.
Page 281 of 369
13.3.1 Define Weighing Keys

Different vendors can be evaluated by several purchasing organizations. To ensure the
comparability of these evaluations, the system settings must not differ. Here, you define the
weighting keys for the main criteria of vendor evaluation. Weighting keys 01 and 02 are defined in
the standard system. You combine the following weighting shares for the standard main criteria:
Generally weighing key 01: % per for calculation of each criteria is same, if it is varies it will be
weighing key 02.
Configuration:
T-code
OMGC.
Menu Path
IMG Material managementPurchasingVendor evaluationDefine

weighting keys.
13.3.2 Define Criteria

In this step, you define the criteria by which the system computes scores for vendors and specify
whether the scores for the sub criteria are computed manually, semi-automatically, or
automatically. If required it is possible to create new criteria also. Maintain scoring methods for all
sub criteria as per the requirements.
The SAP standard system includes the following evaluation criteria:
Price
o Price level
o Price history
Quality
o GR lots
o Complaints level
o Quality audit
Delivery
o On-time delivery performance
o Quantity reliability
o Compliance with shipping instructions
General service/support
Page 282 of 369
Externally performed service/work

o Quality of service provision
o Timeliness of service provision
Configuration:
T-code
OMGI.
Menu Path

criteria.
13.3.3 Define Scope List

You can define various types of list, each representing different main criteria or the same main
criteria in a different order.
In the standard system, the scope-of-list parameters 'standard' and 'version 1' are supplied as an
example:
The parameter Standard provides the user with a ranking list of vendors by overall
score. The main criteria are arranged in the order "Price", "Quality", "Delivery", "General
service/support " and "Externally performed service/work".
The parameter Version 1 yields a ranking list of vendors sorted according to the score
for the main criterion "Price". Then follow the overall evaluation and the main criteria
"General service/support", "Quality", "Delivery", and "Externally performed
service/work".
Configuration:
T-code
OMGU.
Menu Path

scope of list.
Page 283 of 369
13.3.4 Maintain Purchase Organization Data

You define individual Vendor Evaluation System settings for each purchasing organization.
On the detail screen for the purchasing organization, the following parameters are defined:
General parameters
Price level
Complaints level
Quality audit
On-time delivery performance
Copy maintain purchase org data from sap standard to your purchase org.
Maintain criteria as per the requirement then delete rest of the criterias.
Select the purchase org then click on weighting , maintain weighing score here against the
weighing key . For exam
Criteria
percentage
configuration weighting
Quality
70
Delivery
20
Price
10
Maintain weighting against the weighing and criteria wise in single digit
Based on the criteria wise maintain points score for automatic criteria against to the sub criteria
wise.
Configuration:
T-code
SPRO.
Menu Path
Page 284 of 369
purchase organization data for vendor evaluation.
13.4 Import Purchase Process

Purchase order document type IM represents all import Purchases; it includes Raw
Materials & Capital goods. Purchase order document type will be created by copying of NB.
Wood scrap, alloy scarp & insurance can be captured in the import purchase order
conditions. Customs duties and CVD Duties should be entered in the purchase order. For
maintaining of vendor against the condition types , select the condition type then click on
details and enter the vendor number.
Customs invoice is prepared once the goods enter in to customs premises in MIRO
transaction for customs. We treat as Customs clearing agent as a vendor.
Goods are received in MIGO transaction after customs clearance and excise duty is
captured with Part1 details.
Part2 entries are posted with respect to captured excise invoice.
Final invoice to main vendor for purchasing of goods will be done in MIRO transaction.
Final invoice to freight vendor, if required insurance agent will be done in MIRO transaction.
Import Purchase of Raw Material against DFIA Licenses, if the consignment is related
DFIA, no need to maintain CVD duties in the purchase order.
No need to the customs invoice for this purchase order, but it is required to maintain the
customs duties in the purchase order. As per Law no need to maintain the customs duties
but as per our material valuation purpose customs duties should be entered in the
purchase order.
Customs duty should be added to material cost at time of GR.
Freight value will be entered (as per bill of lading) in the purchase order, but this freight
value is not final value for the consignment. Final invoice amount received from the vendor
may different from freight value in bill of lading.
While doing the invoice verification for freight vendor, user has to enter the exact amount
as per the vendor invoice. Vendor invoice contains two parts. One is tax free and taxable.
In initial screen of invoice verification tax free amount should be entered with tax code V0,
and then select the material tab enter the material number and taxable amount. User has to
select the tax code as per taxes mentioned in the vendor invoice then post the invoice.
Page 285 of 369
Import of capital goods the user has to enter the account assignment A - asset, material
number then enter the required data in the purchase order the user has to enter the asset
number in the account assignment tab in the purchase order line item level.
Process flow is same as above, but while posting the excise invoice system posts the
accounting entry for 50 % to on hold account.
Import of capital goods against the EPCG bond, there is no duties will applicable for the
consignment. i.e., no need to maintain the customs & CVD duties in the purchase order.
No need to do the customs invoice verification, user has to enter the freight charges &
other charges in the purchase order. For valuation purpose if required maintain the
customs duties that will be loaded to asset cost .GR & Invoice process is same as normal
purchase.
Import of capital goods without EPCG license, the process flow is same as normal import
purchases.
Any import purchases against License user has to maintain the licence name in the
collective no. field in the additional data tab in purchase order header level.
Page 286 of 369
Import Purchase Process Flow

Create Request for
Quotation for all
possible vendors
(ME41)
Create PR
ME51N/
MD01
Maintain Vendor
Quotation with
respect to RFQ
(ME47)
Release PR
ME54N / ME55
Release
Purchase
Order
(ME29N)
Print
Purchase
Order
(ME9F)
Price
Comparison
(ME49)
Approved
Create Contract
ME31K
Create purchase
order
(ME21N)
Reject Quotations
(ME42)
Create Goods
Receipt and Capture
Excise invoice
(MIGO)
Quality
Inspection
of received stock
Post Excise
Invoice
(J1IEX)
Rejected
(QA32)
Transfer
Quality Stock
to Blocked
Stock
(QA32)
Return
delivery to
vendor
(MBRL/
MIGO)
Accepted
Transfer Quality
Stock to
Unrestricted use
(QA32)
Invoice verification for customs

MIRO
Logistics Invoice
Verification
(MIRO)
Release Block Invoice if invoice

was Blocked for Payment
(MRBR)
Transaction
Purchase
Requisition in
Production
department
Creation of
Purchase
Requisition
manually
Change / Display
Purchase
Requisition
Release Purchase
Requisition
Page 287 of 369
Description
PR will be created in
background
Performed By
Production
For all the items with

stock.
PR will be created Requisitioner
manually by the
indenter based on
requirements
Change or display of Requisitioner
purchase requisition
Release
purchase VP
requisition individually
SAP
MD01
ME51N
ME52N/ ME53N
ME54N
Capture
Excise
invoice with
respect to
Return
delivery
document
(MIGO/J1IS)
Post Excise
Invoice
(J1IS)
individual release
Release Purchase
Requisition
Collective release
Create RFQ
Release
purchase VP
requisition collective
ME55
RFQ created by
purchase department
to vendors who are
eligible to supply
indented material
ME41-create RFQ
Change RFQ
Changes in RFQ
Maintain Quotation Enter details of
Purchase
ME9F-Print RFQ
(Development
Purchase
Purchase
SAP smart form)

ME42
ME47
Purchase
ME49 (Overall
Quotations of
Compare
Bidders
Prepare
Prices
Comparative
Create Contract
Change / Display
Contract
Create PO
Change / Display
Purchase order
Release PO
Page 288 of 369
statement
Create quantity
contract
Change / display
Contract
Create PO with
respect to purchase
requisition
Change/ display
purchase order
Release purchase
order ( approval )
Prices). / ZME49
Purchase
ME31K
Purchase
ME32K / ME33K
Purchase
Department
ME21N
Purchase
department
GM / VP / MD
ME22N/ ME23N
ME28/ME29N
Print PO
Change in PO
Printed PO can be
Post or delivered
personally
Purchase
Department
If any change
Purchase
Department
required in PO by
(Parameters for release

are to be provided by
BSL)
ME9F
(Development
Layout)
ME22N
using release
codes by
approving
Gate entry
for Customs
Create Goods
Receipt
Capture Excise
invoice
Print out of
Page 289 of 369
authority
gate pass will be
generates with details
of consignment
Logistics invoice
verification for bill of
lading
Goods receipt is
prepared at Store on
the basis of physical
verification. give the
reference of customs
invoice verification
If the material is
excisable then
capture the Part1
entries while
receiving the goods
Security
LECI
Finance
Department
MIRO
Stores
MIGO/MB01
store
MIGO/J1IEX_C
Store
MB90
Material document document

Inspection of
Quality check is
received Material carried out for sample
quantity and usage
decision will be taken
Transfer accepted If the goods are
goods
unrestricted use
Transfer rejected
If the goods are
goods
rejected then transfer
the stock to Blocked
from quality
Print out of return Print out of return
delivery document delivery document
Cancel Material
document
Post excise
Invoice for goods
receipt
Post excise
invoice for return
delivery
Cancel excise
Invoice
Park invoice
Credit memo
Subsequent debit/
credit
Page 290 of 369
Cancel material
document
Post excise invoice
Quality
department
QA32
Quality
department
QA32
Quality
department
QA32
Quality
MB90
department /
Store
store
MBST/MIGO
Excise
Department
J1IEX/J1IEX_P
Capture and post

excise invoice for
return delivery
Cancel excise
Excise
Department
J1IS
Excise
Department
J1IEX/J1IEX_P
Logistics invoice
verification
Park invoice
Finance
Department
Finance
Department
Finance
Department
Finance
Department
MIRO
Credit for return

quantity
Sub sequent debit/
credit for invoice
documents
MIR7
MIRO
MIRO
Cancel invoice
Release invoice
document
Cancel invoice
document
Release invoice
document
Finance
Department
Finance
Department
MR8M
MRBR
CIN
Configuration Guide
CONTENTS
0. CIN Overview .....................................................................................................................293
1. BASIC SETTINGS ..............................................................................................................307
1.1 MAINTAIN EXCISE REGISTRATIONS .................................................................................307
1.2 . MAINTAIN COMPANY CODE SETTINGS ...........................................................................309
1.3 MAINTAIN PLANT SETTINGS ............................................................................................311
1.4 MAINTAIN EXCISE GROUPS .............................................................................................312
1.5 MAINTAIN SERIES GROUPS .............................................................................................314
1.6 MAINTAIN EXCISE DUTY INDICATORS ..............................................................................315
1.7 MAINTAIN POSTAL ADDRESSES ......................................................................................316
1.8 MAINTAIN SUB-TRANSACTION TYPES ..............................................................................317
1.9. CHECK CALCULATION PROCEDURES .............................................................................318
1.10 ASSIGN COUNTRY TO CALCULATION PROCEDURE ........................................................324
1.11. CHECK AND CHANGE SETTINGS FOR TAX PROCESSINGS ............................................325
1.12. ACTIVATE CONTRY INDIA VERSION FOR SPECIFIC FISCAL YEARS ................................327
Page 291 of 369
1.13 MAINTAIN EXCISE DEFAULTS ........................................................................................329

1.14. DEFINE TAX CODE FOR PURCHASING DOCUMENTS .....................................................330
1.15. ASSIGN TAX CODE TO COMPANY CODE .......................................................................332
1.16 CLASSIFY CONDITION TYPES ........................................................................................333
2. MASTER DATA ..................................................................................................................335
2.1. MAINTAIN CHAPTER IDs: ................................................................................................335
2.2 ASSIGN USERS TO MATERIAL MASTER SCREEN SEQUENCE FOR EXCISE DUTY: ..........335
3. ACCOUNT DETERMINATION ..............................................................................................337
3.1 DEFINE G/L ACCOUNTS FOR TAXES ................................................................................337
3.2 SPECIFY EXCISE ACCOUNTS PER EXCISE TRANSACTION ...............................................342
3.3 SPECIFY G/L ACCOUNTS PER EXCISE TRANSACTION: .....................................................348
4 BUSINESS TRANSACTIONS ................................................................................................350
4.1 SELECT FIELDS ..............................................................................................................350
4.2 DEFINE PROCESSING MODES FOR TRANSACTIONS ........................................................351
4.3 DEFINE REFERNCE DOCUMENTS FOR TRANSACTIONS ...................................................352
4.4 MAINTAIN REJECTION CODES .........................................................................................354
4.5 SPECIFY WHICH MOVEMENT TYPES INVOLVE EXCISE INVOICES .....................................355
4.6 ASSIGN BILLING TYPES TO DELIVERY TYPES ..................................................................358
4.7 MAINTAIN DEFAULT EXCISE GROUPS AND SERIES GROUPS ...........................................359
5. SUBCONTRACTING ...........................................................................................................360
5.1 SUBCONTRACTING ATTRIBUTES .....................................................................................360
5.2 MAINTAIN MOVEMENT TYPE GROUPS .............................................................................362
6. UTILIZATION .....................................................................................................................362
6.1 UTILIZATION DETERMINATION.........................................................................................362
6.2 Maintain Minimum Balances for Excise Accounts ...................................................................364
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7. EXCISE REGISTERS ..........................................................................................................365

7.1 SPECIFY SAP SCRIPT FORMS .........................................................................................365
8. TOOLS ..............................................................................................................................367
8.1NUMBER RANGES ............................................................................................................367
8.2 MESSAGE CONTROLS .....................................................................................................369
0. CIN Overview
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INPUT TAX -Tax that is charged by the vendor.

A claim for refund of the deductible portion of input tax can be submitted to the tax authorities
OUTPUT TAX -Tax levied on customers at all levels of production and trade.
Output tax represents a tax liability.
SERVICE TAX - Tax levied on the customer on services specified by the Government.
DEPOT - Depot is a plant where the material is stored and sold. There is no manufacturing activity
at the depot. The depots when registered with the excise authorities can pass on the Modvat
benefits to the customer.
EXCISE DUTY (BED) - A quantity-based tax which must be paid when a dutiable material is
moved from a duty-free (bonded) location to a duty-paid (unbounded) location or the customer.
Also known as excise tax. The excise duty is based on the quantity / Value of material moved.
AED Additional Excise duty is a duty which is calculated over and above the Excise Duty payable
on the material.
SED Special Excise Duty is an additional duty levied on certain materials depending on the
characteristics of the material. The statute specifies these materials.
CHAPTER ID All materials that are required for manufacturing and subsequently those which are
manufactured, are classified under the Central Excise Law into chapters. These chapters are
further subdivided into headings and subheadings, which together form the chapter ID. Chapter ID
7216.10 is an example.
CVD Countervailing duty is a levy charged on the imports of materials in lieu of excise duty.
CENVAT Central Value Added Tax. The tax is levied on the difference between the output and
the input value. This is also referred as MODVAT.
CESS Cess is a tax imposed for a specific purpose under different acts with reference to certain
goods. Cess is levied at the time of removal of goods from the factory.
OCTROI A levy payable on the material to the local authorities.
ASSESSABLE VALUE - Denotes the value of goods that you have manufactured in-house at the
price as assessed by an authorized auditor.
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SETOFF A certain percentage of input tax which is refunded by the government to the
manufacturer. This refund does not form part of material cost.
INTERSTATE TRANSACTIONS - A transaction where the goods / material are traded between
two different states.
CONCESSIONAL TAX FORMS The Government announces tax concessions in excise and
taxes on sales and purchase. This can be availed by submitting the forms prescribed by the
Government. E.g C form , AR4 , CT3.
TDS - Tax deducted at source ( Withholding tax) is a form of indirect taxation deducted at the
beginning of the payment flow. Generally, an amount is withheld and paid over or reported to the
tax authorities on behalf of (as opposed to by) the person subject to tax, the exception being selfwithholding tax.
If a withholding tax exemption is available, withholding tax is not withheld.
REGISTERS The registers are the books prescribed having specific format under the statute e.g
RG23A,RG23D.
RETURNS The prescribed forms having a specified format under the statute e.g. RT12, RG1,
ANNUAL RETURN FOR TDS.
Service Tax
This is a tax that is levied on the services rendered. It is applied on the total price of the service. In
addition to the standard Implementation Guide (IMG) settings for taxes on service tax, you must
also have maintained the tax registration numbers of your vendors, customers and your own
plants.
Tip:If there are multiple tax registration numbers, you should have separate account postings to
different General Ledger Accounts based on service registration number. You can do this provided
you have maintained a separate tax code for each service registration number. To do this, for
every service registration number, you should define separate General Ledger Accounts for service
tax and education cess on service tax.
Service tax has the following features:
It is charged at 12% on the price of the service rendered.
An education cess of 2% is applicable on the service tax.
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This is a deferred tax. Only the amount of service tax that is actually received (credits) by
the customer can be offset against the tax payable.
The interim General Ledger Account contains the total service tax that you have to receive.
The final General Ledger Account contains only the actual amount that you have received.
You can take credit for only the amount in the final General Ledger Account.
Service tax can be used to set off excise duty paid by you. Additional duty of customs
cannot be used to set off the service tax paid by you.
This tax is payable to the Central Government.
Example
The price of the service is INR 10,000.
Service tax that is applicable is INR 1,200.
Education cess is INR 24.
Total amount to be received by you is INR 11,224. The system updates the interim General Ledger
Account with this amount.
Now, assume that the customer makes a part payment, out of which INR 500 is against service
tax. You have to manually update the final General Ledger Account with this amount.
You can offset only INR 500 against the payables in that month.
Sales Tax
This is a tax levied on the sale of a product. It is applied on the gross price of goods, inclusive of
excise duty.
In addition to the standard Implementation Guide (IMG) settings for taxes on sales and purchases,
you must also have maintained the tax registration numbers of your vendors, customers, and your
own plants.
Furthermore, if the state legislation allows you to offset input local sales tax (LST) against output
LST, you must also have defined this.
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There are two types of sales tax. Interstate sales (for example, between Karnataka and Tamil
Nadu) are subject to central sales tax (CST). The tax rate is the same throughout the country.
Intrastate sales, on the other hand, are subject to local sales tax (LST), which differ from state to
state. The system handles these using tax jurisdiction codes.
A percentage of input LST can be deducted against output LST, depending on what percentage of
goods you have purchased in the state in question.
The system calculates the sales taxes automatically, when you enter the tax codes. A report is also
available that tells you how much sales tax you have paid and collected.
Sales Tax Register

You use this report to see how much tax has been accumulated under the various tax codes and
tax jurisdiction codes for a combination of conditions.
You can also report how much input sales tax has been set off against the outputs. This report also
can serve as the basis of determining your local sales volume and central sales volume.
Value Added Tax (VAT)
In India, VAT has been levied in certain states from April 1, 2005. VAT is levied instead of the Local
Sales Tax (LST). VAT also replaces other taxes such as, turnover tax, surcharge, additional
surcharge.
The essence of VAT is that you can set off the input tax against the tax paid earlier. VAT is based
on the value addition to the goods, and your VAT liability is calculated by deducting input tax credit
from tax collected on sales during the payment period (say, a month).
Excise Registers
The excise authorities require you to maintain a number of registers relating to excise duty. They
have to be printed out monthly and shown to the authorities in the event of an audit. The SAP
system makes all the entries for these registers automatically, and you can prepare copies of them
as and when necessary
The SAP system handles the following excise registers:
Register RG 1
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Register RG 23A and 23C, Parts I and II
Register RG 23D
Personal Ledger Account (PLA)

This is the bank account from which you transfer any money owing to the excise authorities.
Register RT-12
This is a monthly report that summarizes the CENVAT and PLA information from the other
registers.
Register RG 1
A register of excisable finished goods kept by manufacturing plants. The register shows goods
movements from the factory to a store specifically for excisable finished goods.
The SAP system generates all the necessary entries in the register, and to prepare a copy of the
register. Set the material type to Finished Goods in the material masters that you use for finished
goods.
Register RG 23A/23C
A record of receipts and issues of excisable materials, as kept by manufacturing plants. The
register consists of two parts:
Part I shows the quantities of the materials.

Part II shows the amounts of excise duty on the materials, and how much you have
transferred to the CENVAT accounts.
Previously, manufacturers were required to keep two separate registers, RG 23A and RG 23C for
raw materials and capital goods respectively. This is no longer the case, but the distinction still
remains in the system.
The system generates all the necessary entries in the register. You can prepare a copy of the
register as required.
CENVAT Document
An accounting document that the system automatically creates when it generates a Part II entry.
Register RG 23D
A record of receipts and issues of excisable materials, as kept by depots.
In procurement, when the warehouseman posts a goods receipt, the system creates a register
entry. In sales, when a sales clerk creates a sales order, he has to specify which excise invoices
were delivered with the goods that are being sold. Then, when the warehouseman posts the goods
issue, the system generates another register entry.
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The system generates all the necessary entries in the register. You can prepare a copy of the
register as required.
ARE Document
A document, in India, that accompanies exports and deemed exports. The documents ensure that
you do not have to pay excise duty on these transactions.
There are two types of ARE documents, ARE-1 and ARE-3.
Excise Bond
A document, in India, that effectively licenses a manufacturing plant to remove goods from its
premises without paying basic excise duty, on condition that the goods are then exported.
An excise bond covers a fixed amount of excise duty. The excise duty of the goods exported under
bond cannot exceed the bond value.
Deemed Export License
A license issued by the excise authorities under which an exporter can procure goods from a
manufacturer without payment of basic excise duty.
The license is not a blanket exemption. It only applies to purchases of specific quantity or value of
specific goods from a specific vendor, for example, 20 personal computers from Computer World
Pvt. Ltd.
Exemption Forms
Some customers may be liable to excise duty at reduced rates or exempt from it altogether (for
example, customers abroad). Such businesses must provide you with a copy of their exemption
forms in order to claim their exemption.
If you make a sale to a customer that is in possession of an exemption form, you have to record
the form number in the sales order. The system then automatically applies the appropriate rate of
excise duty.
When you create the sales order, enter the form, using the customer tax classification fields. Based
on the customer tax classification status, you can use different excise rates for a sale transaction.
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If the form has not been submitted by the time you create the pro forma excise invoice, the excise
value will be recalculated at the normal rate.
Export-Oriented Units (EOU)

Any sales that you make to export-oriented units (EOUs) require special treatment by the SAP
System. You have maintained a zero-rate excise duty indicator for customers that qualify as 100%
EOUs.
When you come to create the excise invoice, the excise value is zero in the pro forma excise
invoice document. No excise duty is debited to the CENVAT account, and so no accounting entries
are generated. However, the sale is marked as a deemed export, and the system generates an
outgoing excise invoice.
Even though the excise duty is zero, when you print the excise invoice, the system calculates the
duty for the purposes of printing.
Excise Duty Utilization

When you create an excise invoice, the system allows you to display the information about the
excise duty, including which CENVAT accounts the excise will be debited to. If a company defaults
in the fortnightly payment of CENVAT, the excise collectorate can enforce an immediate payment
of excise. Alternatively, you may have excess CENVAT credit and want to pay the duty
immediately and not wait for a fortnight. This is also the case for some export removals where you
claim the refund from DGFTA, in which case you need to pay the duty immediately.
Sales from Factories
The SAP system handles sales from factories, allowing for the creation of excise invoices, which
you have to send with each delivery that is subject to excise duty. There are two scenarios,
depending on whether you want to send the commercial invoice along with the delivery or at a later
date.
Along with the delivery

the document flow would be OR (standard sales order type) LF (standard delivery type)
F2 (invoice).
At a later date
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The document flow would be OR JF (delivery type, a copy of LF) JEX (pro forma billing
document type, a copy of document type F8) F2.
Two sample pricing procedures are provided for this sales procedure, J1INFAC (condition-based
excise determination) and JFACT (formula-based excise determination).
Sales from Depots
You may first ship them to a separate location for storage (a depot), from where you will sell them.
Excise duty is payable when you send the goods from the factory to the depot, but it is not levied
again when you sell the goods.
Sometimes when you make a final sale of goods from a depot, price escalations could have
happened with retrospective effect. In such scenarios you need to pay the extra excise duty at the
factory using an A Certificate. You need to register the A certificate details in the RG 23D register
and the excise recovered from the customer
Other Outward Movements
The system also allows you to create an excise invoice with reference to various other documents,
as follows:
Goods issue documents (for example, transfer postings)
Vendor excise invoices (for when you return faulty goods to a vendor, for example)
Factory excise invoice (for sales returns)
Note: you can create an excise invoice without reference to any document at all.
Exports under Excise Regulations
Manufacturing plants are entitled not to pay any basic excise duty on export sales, as long as the
goods are accompanied by an ARE document. The system handles AREs and the appropriate
permit documents, such as export bonds and deemed export licenses.
The system does not handle exports to Nepal and Bhutan, which are subject to separate
legislation.
The system allows you to process three types of exports:
Exports under bond
Exports under claim for rebate
Deemed exports
You must create an ARE document for all goods that you export under these schemes. You use
the same function to process all ARE documents.
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Exports under Bond

One of the ways of exporting goods without paying basic excise duty is to obtain an excise bond
from the excise authorities and then fill out an ARE-1 document to go with every export.
Excise Bond
A document that effectively licenses a manufacturing plant to remove goods from its premises
without paying basic excise duty, on condition that the goods are then exported.
An excise bond covers a fixed amount of excise duty. The excise duty of the goods exported under
bond cannot exceed the bond value.
In the system, the term "excise bond" also covers letters of undertaking, and all of the excise bond
functions apply equally to letters of undertaking, unless stated otherwise.
When you obtain a bond from the excise department, enter it in the system. The system numbers
each bond automatically.
Exports under Claim for Rebate

If you have not obtained an excise bond, you must pay any excise duty liable when removing
goods from your premises for export. However, you can claim a rebate for the excise duty once
you have completed the export if you fill out an ARE-1 to go with the export.
Deemed Exports
You can ship deemed exports to any customers in possession of a deemed export license without
paying any basic excise duty, but only if the goods are accompanied by an ARE-3 document.
Notes
Capital Goods
Businesses are allowed to set off excise duty on purchases of capital goods against excise duty on
outputs. However, unlike with raw materials, you can only set off half of the duty in the first year,
and the rest in any year after that
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Register RG 1 Entries
The SAP system creates all register RG 1 entries automatically.
In most cases, the system does not generate an RG 1 entry at runtime. It generates any missing
entries when you execute the Register Update program (see below).
It assigns all entries a serial number.
Register RG 23A/23C
Part I Entries
When you enter a goods receipt for excisable materials, the system automatically asks you if you
want to create the Part I entry in Register RG 23A or RG 23C. If so, the system generates a Part I
entry. If not, it does not, but you can generate all missing Part I entries later.
The system automatically enters the excise invoice number in the Part I entry. If the excise clerk
has already captured the excise invoice when the warehouseman enters the goods receipt, the
system enters the excise invoice number in the Part I entry immediately. If the warehouseman
enters the goods receipt before the excise clerk enters the excise invoice, the Part I entry does not
contain a link to the excise invoice number. However, the system updates the excise invoice
number automatically when the excise clerk captures the excise invoice later on.
The system does not automatically generate Part I entries for goods issues of excisable materials,
with two exceptions:
When you enter a goods issue for vendor returns

When you enter a goods issue for stock transport orders for plants, but only when you use
the Goods Movements transaction
Part II Entries
The system only creates a Part II entry when you post an incoming excise invoice. It does not
create one if you only capture an excise invoice. That way, you can ensure that excise clerks can
capture excise invoices but cannot make any Part II entries. The excise supervisors can then
check and post the excise invoices posted by the clerks.
When the system generates a Part II entry for an incoming excise invoice, it creates a CENVAT
document to debit the excise duty to the excise duty account, and credit it to the CENVAT clearing
account:
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The excise duty is cleared from the clearing account when the accounting clerk enters the vendor
invoice.
When the system generates a Part II entry for an outgoing excise invoice, it creates a CENVAT
document to debit the excise duty to the excise duty account, and credit it to the CENVAT
suspense account:
Part II Entries
Whenever you as a manufacturing plant post an incoming excise invoice, or create an outgoing
excise invoice, the system automatically creates an entry in Part II of the appropriate register (RG
23A or RG 23C).
The system assigns all Part II entries a serial number, and creates an accounting document for
each, to transfer the various types of excise duty to the appropriate CENVAT account.
Similarly, the system also creates a Part II entry when you post an outgoing excise invoice
Register RG 23D Entries

The system creates RG 23D entries for all receipts of excisable materials, and when you enter a
goods issue, you specify which RG 23D entries the goods came from originally.
When you enter a goods receipt for excisable materials, the system generates a Part I
entry in Register 23D.The system creates one entry for each goods receipt, each of which
is numbered with a serial number. Each entry contains a separate line item for each
material in the goods receipt, and each line item has its own folio number.
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When you enter a goods issue, you have to specify which folio numbers are associated
with it. Again, each entry has its own serial number. The excise duty associated with these
items is then added to the customer invoice.
Example
A purchasing clerk places an order with a vendor. When the warehouseman enters the goods
receipt, the system generates the appropriate RG 23D entry automatically, as follows:
The RG 23D entry contains a separate line item for each material in the goods receipt, and each
line item has its own folio number.
Later that day, a second lot of goods is delivered. Again, the warehouseman enters the goods
receipt in the system, and the system creates the RG 23D entry automatically.
This is the second RG 23D entry, so the serial number is 0002. The folio numbers start at the next
available number, in the example, 004.
Later on, a sales clerk enters a sales order. When the excise clerk selects the RG 23D entries to
go with the goods issue, the system generates the following RG 23D entry:
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The information is shown in two group boxes:
Excise details
This shows you the excise invoice type, which you can change if necessary by choosing
. It also shows you how much excise duty will be charged on the sale.
Balance utilization
This shows you which CENVAT accounts the excise duty will be debited to.
The system automatically proposes which CENVAT accounts it is to debit the excise duty
to. It first takes the RG 23 accounts, and if there is not enough credit to cover it, it debits the
remainder to the personal ledger account (PLA). The cess component of excise can only
be taken from the PLA.
If immediate utilization is active for a series group, you can change the default utilization proposal.
You can decide from which register to pay the amount. When you save the invoice, the system
generates Part II entries in the appropriate registers. These excise invoices are not listed further
during fortnightly payment of CENVAT.
If immediate utilization is off for the series group, the system proposes the excise duty values
directly in the RG 23A fields, but the postings are made to intermediate accounts for excise duty.
The system does not create any Part II entries. Entries are posted into a dispatch register. When
you then run the fortnightly payment program, the system picks up these invoices and allows
payment of CENVAT.
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1. BASIC SETTINGS
1.1 MAINTAIN EXCISE REGISTRATIONS
Excise registration number will configure in SAP system as per the requirement.
Excise Registration: A tax number assigned, in India, by the Department of Revenue to legal and
natural persons liable to excise duty.
The taxpayer is required to obtain a separate ECC number for each registered premises (for
example, factory, warehouse, or dealer's premises).
Configuration:
T-code
SPRO.
Menu Path
IMG Logistics GeneralTax On Goods MovementsINDIABasic

SettingsMaintain Excise Registrations.
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Excise registration details will be given by client along with liabilities like as per the registration
client can avail the AED (Additional excise Duty), SED (Special excise Duty), Cess (cess). Cess
will be activated for food industries only.
EI items: No of excise invoice item are allowed in the outgoing excise.
Partial Credit: When you post a goods receipt, the system splits the input excise duty on the
material into its deductible and nondeductible amounts. It posts the deductible duty to the
appropriate CENVAT account, and adds the nondeductible duty to the material value.
Liable to AT1: AT1 means secondary education cess. This needs to be active.
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1.2 . MAINTAIN COMPANY CODE SETTINGS
Company Code 1000 is to be configured for Excise with the Fiscal Year Variant starting from April and
ending in March of the subsequent Calendar year.
Capital Goods Credit can be availed of immediately. Exchange Rate is to be configured from the Standard
Type M.
Configuration:
T-code
SPRO.
Menu Path

SettingsMaintain Company Code Settings.
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CENVAT document type / Ut I document type will be maintained as SA as per the standard
system. Based on this document type system generates an accounting document in excise.
Debit Acc Override: while posting excise JV in J1IH transaction it is possible to change the Debit
account as per the requirement.
Auto adjust Indicator: while posting excise JV in J1IH (other adjustment) if balances are not
available then system post the entry in to the PLA (personal ledger account) account.
Immediate credit on capital goods: while posting the incoming excise invoice for the RG23C
register system will post entry in on hold account with 50 % excise invoice value.
Excise invoice selection parameters: based on these settings excise invoice will be displayed in the
J1IS transaction for the selection purpose.
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Rounding duty on Procurement: The system rounds the duty off to the nearest rupee. However, if
the duty amount is less than one rupee then no rounding is done.
Rounding duty on removal: Rounds off the excise duty be paid when you create an outgoing excise
invoice.
CVD account: CVD clearining needs to maintain this G/L account will be trigger while posting the
incoming excise invoice in case of imports.
1.3 MAINTAIN PLANT SETTINGS

Maintain whether the plant is depot or manufacturing plant. Against the Plant maintain excise
registration number and GR per excise as multiple goods receipts and multiple credits.
Configuration:
T-code
SPRO.
Menu Path

SettingsMaintain Plant Settings.
Against the Plant if check Depot it means that this plant is depot.
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1.4 MAINTAIN EXCISE GROUPS
Excise Group: A unit within an excise registration, in India, which keeps its own set of excise
records. Whereas the excise registration reports to the excise authorities, the excise group is a
purely internal organizational unit. Each excise group keeps records of all transactions that have to
be reported to the excise authorities. When the time comes to present these records to the
authorities, the excise registration compiles the information from all of its excise groups.
Configuration:
T-code
SPRO.
Menu Path

SettingsMaintain Excise Groups.
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Against the excise group assign plant and excise registration along with multiple goods receipts
and multiple credits.
Default challan qty in GR: System will copy GR Qty in to Excise invoice
Excise inv during billing: This is a prerequisite configuration for the creation of excise after billing
automatically.
Create and Post invoice single step: purchase return excise invoice will post in MIGO transaction
itself based on this configuration. But it is not advised.
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Consumption: if activate this indicator system will post two serial number for the Goods receipts
with account assignment as K.
Depot settings: If Plant is a depot activate all settings, so that depot functionalities will be work.
MIGO settings: Based on these settings in MIGO transaction > Excise tab > excise functionalities
will be work.
1.5 MAINTAIN SERIES GROUPS

In this IMG activity, you define the different excise series groups within your company. Series
groups allow you to maintain multiple number ranges for the outgoing excise documents.
Based on excise regulations and exemptions from the authorities you can maintain multiple
number series for outgoing documents. But each of these series has to be declared to the excise
authorities.
Generally series groups are domestic sales, export sales, subcontracting.
Configuration:
T-code
SPRO.
Menu Path

SettingsMaintain Series Groups.
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Immediate utilization: if activate this function system will post debit entry in the RG23A/RG23C/
PLA/ Service Tax while doing the outgoing excise invoice in J1IIN transaction.
1.6 MAINTAIN EXCISE DUTY INDICATORS

Excise indicator will be sued to collecting indicator
Excise Duty is to be maintained as 1 for 100% Tax and 2 for 50% Tax and 3 for No Tax.
Configuration:
T-code
SPRO.
Menu
Path
IMG Logistics GeneralTax On Goods

MovementsINDIABasic SettingsMaintain Excise Duty
Indicators.
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1.7 MAINTAIN POSTAL ADDRESSES
In this IMG activity, maintain the addresses of various customs and excise organizations that the
company deals with. You use these addresses in the ARE Documents functions. When you create
an ARE-1 or ARE-3, you enter the address of the excise department and the customs department
involved in the export process. The system then prints their names and addresses on the AREs.
Then a default local excise department can be defined for the excise group and a default customs
department for each series group.
Configuration:
T-code
SPRO.
Menu Path

SettingsMaintain Postal Addresses.
Click on address icon then maintain address then assign to appropriate excise group.
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1.8 MAINTAIN SUB-TRANSACTION TYPES

Subcontracting type will used to assign the different G/L accounts for the same excise transaction
type. By default, the system records excise duties on the accounts that are specified in the IMG
activity Specify Excise Accounts per Excise Transaction. But if some excise duties are to effect
some other accounts, then they have to be configured as another Sub-Transaction and assigned
the required accounts.
In generally below subtractions are defined
IP: Import
RT: Purchase Return
01: Subcontracting
Configuration:
T-code
SPRO.
Menu Path

SettingsMaintain Sub-Transaction Types.
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1.9. CHECK CALCULATION PROCEDURES
The standard system comes with two tax calculation procedures. TAXINN is only supports
condition-based excise determination, whereas TAXINJ supports condition-based excise
determination and formula-based excise determination.
Both tax procedures contain condition types that cover all of the excise duties and sales taxes
applicable.
Since the exact rates of excise duty can vary on a large number of factors, such as which vendor
you purchase a material from, or which chapter ID the vendor stocks the material under, you create
condition records for every sort of excise duty.
When you come to enter a purchasing document, the system applies the excise duty at the rates
you have entered in the condition records.
As per the industry standard practices TAXINN procedure will be used. For all excise condition
types we will maintain access sequences as JTAX and rest is MWST. If access sequence is JTAX
condition record needs to maintain as per the desired combination in FV11 transaction. If required
create new access sequence then maintain the condition records. If the access sequence is MWST
then tax code will be maintained in the FTXP transaction .
Configuration:
T-code
SPRO.
Menu Path
IMG Financial accounting new Tax on sales / Purchases Basic

settings Check calculation Procedure.
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Standard Access sequence will be sufficient to satisfy the client requirement, if required create
access sequence in the pricing concept.
Condition types
Configuration:
T-code
SPRO.
Menu Path

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All condition types are available in the standard system, if required create condition types as per
the requirement. Service tax abatement condition types will be created as per the SAP Note
1736781. Generally condition class as D, Calculation type as A and condition category as D for all
the condition types.
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Define Procedure:
Configuration:
T-code
SPRO.
Menu Path

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Select TAXINN procedure then click on Copy
Rename procedure code and name then click on the control
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Maintain all condition types as per the requirement. Very recently SAP release (1857288) note for
excise duties round off in the purchase order so that excise duties are round off in the J1IEX
transaction. Maintain Condition from and To Vales as per the requirement wise.
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1.10 ASSIGN COUNTRY TO CALCULATION PROCEDURE

In this activity, you enter the key for the calculation procedure to the Country key so that system
will determines the conditions which are allowed per document and which defines the sequence of
the conditions in the document for each country. Assigned ZTAXIN tax procedure to country IN.
Configuration:
T-code
SPRO.
Menu Path

settings Assign country to calculation procedure.
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1.11. CHECK AND CHANGE SETTINGS FOR TAX PROCESSINGS

Create Tax accrual as per the requirement wise.
Tax type
Output tax, input tax, additional taxes, or "not tax-relevant" can be specified as the tax type.
No deductibility of tax amounts

For this, tax amounts are marked as not deductible.
Posting indicator
Here you specify whether the tax amount is posted separately or distributed to expense or
revenue items.
Tax not relevant to cash discount (Not discount relevant)

This indicator is set only for Canada. If you select it, the system does not take into account
the corresponding tax amount when determining the tax base .
Configuration:
T-code
OBCN
Menu Path

settings check and change settings for tax processing
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Accrual needs to create for all benefit condition types only then it is possible to assign the relevant
G/L accounts for the same. If condition type non deductable then maintain Non deductable check
for against that accrual.
1.12. ACTIVATE CONTRY INDIA VERSION FOR SPECIFIC FISCAL YEARS

In this activity, you specify for which fiscal years you want to activate Country Version India for the
accounting interface.
Activities
In the table, maintain data as follows:
Comp. (Component): IND
To year: 2999
Active: X
Component IND is activated to fiscal year 2999.
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Configuration:
T-code
SPRO
Menu Path

settings India Activate country India version for specific fiscal years
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1.13 MAINTAIN EXCISE DEFAULTS

Based on this configuration excise duties are replicated from original document to excise
document. For example excise value from purchase order to Goods receipts transaction. Maintain
all relevant condition types against the tax procedure. Assign import pricing condition types like
CVD (JCV1), CVD ECS to ECS Condition Type A/P Imports, Additional customs duty.
Configuration:
T-code
SPRO.
Menu Path

SettingsDetermination of Excise DutyMaintain Excise Defaults.
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1.14. DEFINE TAX CODE FOR PURCHASING DOCUMENTS

Tax code will used to calculate the taxes. As per configuration tax codes needs to be created for
the VAT/Service tax/ CST. Because we maintain access sequence MWST for these condition
types.
Configuration:
T-code
FTXP.
Menu Path

SettingsDetermination of Excise DutyCondition Based Excise
DeterminationDefine Tax Code for Purchasing Documents.
Enter country code IN
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Enter tax code > Press enter
Maintain Tax code description and tax type (input / output)
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Maintain rate against the condition types as per the requirement > save.
1.15. ASSIGN TAX CODE TO COMPANY CODE

All tax codes need to assign to the company code in this configuration. So that taxes will be
calculated in the respective transactions. It is a mandatory requirement for assignment of non
deductable tax codes.
Configuration:
T-code
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SPRO.
Menu Path

DeterminationAssign Tax Code to Company Code.
1.16 CLASSIFY CONDITION TYPES
In this IMG activity, specify which condition types are used for which sort of tax. This only applies
to condition types that you use with the new excise determination method.
The system uses this information when you create a document from another one. For example,
when you enter an incoming excise invoice from a purchase order, or when you create an outgoing
excise invoice from a sales order, the system determines the various excise duties in the excise
invoice using the information that you have entered here.
In addition, when you create a purchasing document, the system only uses the condition types that
you enter here. This configuration is one of the pre requisite to display tax accounts in MIRO
transaction.
Page 333 of 369
Configuration:
T-code
SPRO.
Menu Path

DeterminationClassify Condition Types.
Note: Maintain all tax procedure condition types with appropriate condition name against your tax
procedure.
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2. MASTER DATA
2.1. MAINTAIN CHAPTER IDs:
In this IMG activity, the chapter IDs and the corresponding descriptions are maintained as per the
schedules published by the Central Board of Excise and Customs. Generally chapter id s will be
created in j1ID transaction under sap easy access.
Configuration:
T-code
SPRO
Menu Path
IMG Logistics GeneralTax On Goods MovementsINDIAMaster

DataMaintain Chapter IDs.
2.2 ASSIGN USERS TO MATERIAL MASTER SCREEN SEQUENCE FOR EXCISE

DUTY:
Based on this configuration we will get CIN tab in the vendor master and customer for the assigned
user ids.
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Configuration:
T-code
SPRO.
Menu Path
IMG Logistics GeneralTax On Goods MovementsINDIAMaster

Data Assign Users to Material Master Screen Sequence for Excise
Duty.
Select the reference transaction 01 with all * then click on user screen reference.
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3. ACCOUNT DETERMINATION
3.1 DEFINE G/L ACCOUNTS FOR TAXES
All the accrual which are defined in the system will be displayed here. Maintain G/L account against the
accrual wise as per the requirement wise.
For excise accruals maintain CENVAT clearining account only. In MM point of view all these G/L will be
displayed in the MIRO transaction and accounted similarly.
Configuration:
T-code
SPRO.
Menu Path
IMG Logistics GeneralTax On Goods MovementsINDIAAccount

Determination Define G/L accounts for Taxes.
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Double click on accrual
Click on Rules
If you would like to maintain G/L against the tax code > select the Tax code > save.
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Click on posting key
Maintain posting keys as per the requirement wise. Given posting keys are as per the standard
system.
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Click on accounts
Maintain G/L account against the tax code wise.

Note: in Rule tax code is not selected in this case input tax code field is not displayed maintain G/L
account only.
3.2 SPECIFY EXCISE ACCOUNTS PER EXCISE TRANSACTION

This is critical configuration in the excise account determination. As per the standard SAP excise
transaction types are predefined by SAP. It is not possible to create new excise transaction types
as per the requirement wise. Based on the excise transaction type we can configure the excise
account means which account needs to debit and credit in the transaction.
It is also possible to insert the sub transaction type for each excise transaction type. As per the
requirement maintain excise accounts against the excise transaction and sub transaction wise. In
MM account determination configuration is not possible to configure which account type needs to
debit and credit but here in excise account determination it is possible where as on excise
transaction type cant be used for two postings like debit in one same and other case it should be
credit by with help of sub transaction type.
Example: GRPO : EXCISE INVOICE FOR GOODS RECEIPT/PO.
BED account will be debit. By using of sub transaction type for the GRPO you can configure BED
account will credit but system generates account document as per configuration where as debit
only is updated in the respective table.
Page 342 of 369
Configuration:
T-code
SPRO.
Menu Path

Determination Specify Excise accounts per Excise Transaction.
Page 343 of 369
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3.3 SPECIFY G/L ACCOUNTS PER EXCISE TRANSACTION:

In this configuration assign the G/L accounts
Excise group
Transaction type
Company code
Sub Transaction type
Chart of accounts
While posting the excise transaction system will trigger the relevant G/L accounts based on
the above combination.
Configuration:
T-code
SPRO.
Menu Path

Determination Specify G/L accounts per Excise Transaction.
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4 BUSINESS TRANSACTIONS
4.1 SELECT FIELDS
In this transaction it is possible to maintain the field selection for the incoming invoice (J1IEX
transaction).
Configuration:
T-code
SPRO.
Menu Path

MovementsINDIABusiness Transactions Incoming Excise
InvoicesSelect fields
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4.2 DEFINE PROCESSING MODES FOR TRANSACTIONS

In this IMG activity, you specify which processing modes the user can use in the various Incoming
Excise Invoice transactions. Generally Standard settings are sufficient.
This way, you can tailor the transaction to what your users have to do.
The system comes with three standard transactions relating to the Incoming Excise Invoices
function (those that are included in the role SAP_CIN). The processing modes available in these
transactions are as follows:
J1IEX_C
This transaction is for excise clerks: users of this transaction can only capture and display
excise invoices.
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Configuration:
T-code
SPRO.
Menu Path

InvoicesDefine processing modes for transactions
Enter transaction code, processing mode then click on active.
4.3 DEFINE REFERNCE DOCUMENTS FOR TRANSACTIONS

In this IMG activity, you specify for each combination of transaction and processing mode which
reference documents you want the users to be able to use.
If the standard settings meet your requirements, you do not have to do anything.
Otherwise, add the entries that you need to the table: For each transaction, make one entry per
combination of processing mode and reference document. Activate each entry for it to work.
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Configuration:
T-code
SPRO.
Menu Path

InvoicesDefine reference documents for transactions
Enter transaction code, Processing Mode, reference document then click on active.
Based on this configuration system will allow perform excise transactions with respective
actions and reference documents.
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4.4 MAINTAIN REJECTION CODES

In this IMG activity, you define the rejection codes that are used in the Incoming Excise Invoices
transaction. The rejection codes are to be maintained for Damage & Return under Quality .
Configuration:
T-code
SPRO.
Menu Path

InvoicesMaintain Rejection Codes.
Page 354 of 369
4.5 SPECIFY WHICH MOVEMENT TYPES INVOLVE EXCISE INVOICES

In this IMG activity, you specify which movement types relating to goods receipts involve excise
invoices. The system uses this information during the goods receipt procedure. When you post a
goods receipt using one of the movement types that you have specified here, the system prompts
you to enter the excise invoice number so that it is possible update the appropriate register.
Configuration:
T-code
SPRO.
Menu Path

InvoicesSpecify which movement types Involve Excise Invoices.
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Against the movement type wise maintain the appropriate register type so that we will performing
the GR system will prompt the excise tab for excise selection.
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4.6 ASSIGN BILLING TYPES TO DELIVERY TYPES

You enter outgoing excise invoices by referring to either of the following documents:
Customer invoices
Pro forma excise invoices
These options are represented in the system by different document types and document flows.
In this IMG activity, you:
Specify which billing document types you use as a reference for CENVAT utilization
Assign them to the appropriate delivery document types.
Configuration:
T-code
SPRO.
Menu Path

MovementsINDIABusiness Transactions Outgoing Excise
InvoicesAssign billing types to delivery types.
Page 358 of 369
4.7 MAINTAIN DEFAULT EXCISE GROUPS AND SERIES GROUPS

In this IMG activity, you specify which excise group and series group you want to appear in these
fields by default. You can make separate settings for different combinations of sales organization,
distribution channel, division, and shipping point. Generally this setting will be done by SD
consultants.
Configuration:
T-code
SPRO.
Menu Path

MovementsINDIABusiness Transactions Outgoing Excise
InvoicesMaintain default excise group and series group
Based on this configuration system will create outgoing excise invoice immediately after billing .
Page 359 of 369
5. SUBCONTRACTING
5.1 SUBCONTRACTING ATTRIBUTES
The subcontracting attributes help determine conditions for a combination of an excise group, a
transaction type, and a sub transaction type.
The conditions such as the number of excise items per subcontracting challan, if the non excisable
materials have to be filtered or not when the subcontracting challan is created, the movement type
groups for issues and receipts and the hierarchy of determining the excise base value are
mentioned here.
Configuration:
T-code
SPRO.
Menu Path

MovementsINDIABusiness
TransactionsSubcontractingSubcontracting Attributes.
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Excise Transaction type: 57FC (Create subcontracting challan).

Sub transaction type: Maintain sub transaction type 01 as per the standard system.
Subcontracting period: As per the legal requirement send material should be return within 180 days
else need to pay the excise.
Maintain movement type groups for issue and receipts.
Excise item: 999 system will allow no of line items in the subcontracting challan.
Assessable value/ excise invoice: System will fetch assessable value from the j1ID transaction.
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5.2 MAINTAIN MOVEMENT TYPE GROUPS

In this IMG activity, movement types are grouped together to form movement type groups.
0001 is used for those movements for which a challan needs to be created 0002 is used for
movement types involved in reconciliation.101 movement SHOULD NEVER BE assigned to either
0001 or 0002.
Configuration:
T-code
SPRO.
Menu Path

MovementsINDIABusiness TransactionsUtilizationUtilization
determination
6. UTILIZATION
6.1 UTILIZATION DETERMINATION
In this IMG activity, you specify which CENVAT accounts are to be debited by the Fortnight
Utilization of CENVAT report: When the report calculates how much excise duty you must remit, it
automatically proposes which CENVAT accounts the duty should be debited to. Here, you specify
those defaults.
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Example
If you want 50% of basic excise duty (BED) to be debited to the RG 23A account and the remaining
50% to the RG 23C account, you would make the following settings:
Acct name
BED perc.
RG 23A BED account 50

RG 23C BED account 50
Alternatively, to debit all of the BED to the RG 23A account, and then RG 23C account, if there is
not enough in the RG 23A account, you would make the following settings:
Acct name
BED perc. +
RG 23A BED account
RG 23C BED account
When you come to run the report, the system takes the RG 23A account because it is the first one
you have entered. If this account does not cover the BED, the system takes the RG 23C account
instead.
After posting of outgoing excise invoice in J1IIN transaction.
Configuration:
T-code
SPRO.
Menu Path

MovementsINDIABusiness
TransactionsSubcontractingMaintain Movement Type Groups.
Page 363 of 369
6.2 Maintain Minimum Balances for Excise Accounts

In this IMG activity, you can maintain minimum balances in your excise accounts. When the
balance in these accounts during utilization falls below this level, the system automatically utilizes
funds in the PLA account. Maintain the minimum balance amount for the excise accounts. If you
have more than one excise group, you can maintain different minimum balances.
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7. EXCISE REGISTERS
7.1 SPECIFY SAP SCRIPT FORMS
In this IMG activity, for each of your company codes, you specify which SAPscript forms the
system prints the excise registers with.
Standard settings
Country Version India includes a number of sample SAPscript forms and printing programs, which
you can use as follows:
Reg. name
Lay. no. Form
Tcode/Prog
RG 23A Part I 1
J_2IRG23A_PART1 J_2IRAP1
RG 23C Part I 1
J_2IRG23C_PART1 J_2IRCP1
RG 23A Part II 1
J_2IRG23A_PART2 J_2IRAP2
RG 23C Part II 1
J_2IRG23C_PART2 J_2IRCP2
PLA
J_2I_PLA
J_2IPLA
RG 23 D
J_2I_RG23D
J_2IRG23
RG 1
J_2I_RG1
J_2IRRG1
RT 12
J_2I_RT12_ABSTRA J_2IRT12
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RT 12
J_2I_RT12_ABSTRA J_2IRT12
RT 12
J_2I_RT12_3
J_2IRT12
The layout description can be left blank or an appropriate description maybe filled in. You may not
change the register name. You can have your own layouts and maintain the name here. If the
output device and number of copies are maintained it is automatically picked up for printing.
Configuration:
T-code
SPRO.
Menu Path

MovementsINDIABusiness TransactionsExcise
RegistersSpecify SAP script forms.
Based on the above configuration, it is possible to display the excise registers in the J2I6
transaction.
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8. TOOLS
8.1NUMBER RANGES
You can maintain the number ranges for all CIN Number range objects using this transaction
The number ranges are to be maintained as per each Register Type into which the documents are
posted.
Configuration:
T-code
SPRO.
Menu Path

MovementsINDIAToolsNumber Ranges.
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Note: As per the standard system number object always be 01.
Page 368 of 369
8.2 MESSAGE CONTROLS

In this activity, you can specify whether a given message should appear as a warning message or
an error message.
Enter each message that you want, specifying whether it should apply to one user or all users.
Configuration:
T-code
SPRO.
Menu Path

MovementsINDIAToolsMessage controls
Page 369 of 369

Step by Step Guide To MM Configuration in Sap

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Material

2. Organizational Structure .......................................................................................................... 8

3. MASTER DATA ........................................................................................................................ 26

3.2 Vendor Master ........................................................................................................................ 46

3.3 Purchase Info Record .......................................................................................................... 56

3.4 Source List ............................................................................................................................... 62

3.5 Quota Arrangement .............................................................................................................. 63

4. Procurement Cycle .................................................................................................................. 66

4.1.1 Define Number Ranges ............................................................................................................. 69

4.2 Request for Quotation .......................................................................................................... 78

4.3 Purchase order ....................................................................................................................... 84

4.4 Release Procedure ............................................................................................................... 93

4.5 Contracts ................................................................................................................................. 107

4.6 Scheduling Agreement ...................................................................................................... 110

4.7 Pricing Procedure ................................................................................................................ 112

4.8 Version Management ......................................................................................................... 127

4.8.3 Define Reason for Changes ..................................................................................................... 129

4.9 Reporting ................................................................................................................................ 131

4.10. Message Determination................................................................................................. 135

8.2. Define Field Selection for Physical Inventory ............................................................................. 202

9. Valuation and Account Assignment................................................................................. 209

10. Invoice Verification .............................................................................................................. 237

11. External Service Management........................................................................................ 254

12. Special Stock Process in Material Management ............................................................... 264

12.3 Returnable Transport Packing .................................................................................................. 273

13. Special Scenario in Material Management ........................................................................ 276

System, Anwendungen, Produkte in der Datenverarbeitung (in German)

Systems, Applications & Products in Data Processing (in English)

FACTS ABOUT SAP AG

Leading global provider of client/server business software solutions.

Fourth-largest independent software supplier in the world.

R/3 employs a 3-tier client/server architecture;

The database layer resides on the central server.

The Application layer holds the processing logic of the system.

The Presentation layer, typically on personal computers.

R/3 applications are categorized into 03 core functional areas ;

Sales and Distribution

INFORMATION INTEGRATION THRO ERP SYSTEM

The client is a commercial, organizational unit within

SPRO IMG Enterprise StructureDefinition Financial

Maintain above details, then enter save.

2.2 Company Code

SPRO IMG Enterprise StructureDefinition Financial

Double click on copy, delete, check company code

Click on Copy Org Object

Enter the country currency

Go to the back to configuration >

Double click on Edit Company Code Data

Click on address icon

Maintain complete address as per the company letter head.

A plant is an organizational logistics unit that

IMG Enterprise StructureDefinitionLogistics GeneralDefine

Double click on Define plant

Maintain above details then click on address icon

Maintain plant address

Double click on Copy, delete, check plant

Click on copy org objects

2.4 Storage Location

An organizational unit that allows the differentiation of

Select all storage location then delete

2.5 Purchase organization

Purchasing Organization / Group

A purchasing organization is an organizational level that