Integration Point of MM-FI-SD in SAP ERP

December 31, 2013 | 19,897 Views |

Dibyendu Patra
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Hello friends,

Hope you all are fine.

As we know about the module MM, FI and SD in SAP ERP.

MM stands for Material Management, FI standard for Financial Accounting, SD stands for Sales and
Distribution.

These two modules FI and SD is very much integrated with MM modules. As we are in MM module, we
should know about the integration point.

Here in my blog you can get the knowledge for integration between MM-FI, MM-SD and SD-FI.

We know MM modules means procure to pay process, FI module means financial statement and payment
process, SD module means sale to customer process.

Most of the manufacturing business logic is stands for 3 things BUY-MAKE-SALE

It means an organization buy a raw material/product from a vendor, then he makes from this raw
material/product to finished material/product, then he sale the finished material/product to a customer.

In that 3 part the 3 module are integrate each other.

—>When the organization buy a raw material/product then its coming into warehouse stock, which is goes to
MM modules. And because of the organization has buy something from a vendor, he has to pay for this to the
vendor, which id goes to FI modules.

—>When the organization make the raw material to finished material, at that time the organization needs a
subcontractor vendor, who will make the subcontracting process. Then process from raw material to finished
material, it goes to MM module. And the organization has to pay the subcontracting vendor, this will goes to
FI module.

—>When the organization sale the finished material to customer, They have to proceed the sales process (Like
as sales order, delivery, billing etc), its goes to SD modules. At the time finish goods stock is decreased from
warehouse, which is goes to MM module. We sale the finished material to customer, so customer will pay for
this finish material, the payment terms goes to FI modules.

MM-FI Integration
In this part, we learn about MM-FI integration points. When we do a movement for a material, if the
movement is account effect-able, then it will post a account entry in FI.

Lets discuss about how the accounting entry are posted and how you can do the configuration.

We have a material master data in our procurement process.

In material master, we stored all information for a certain material. Like as material type, material group,
purchasing information, sale and distribution information etc etc.

The valuation class (in accounting 1 view) is most important for automatic account posting purpose.

We can see the valuation class for individual material from t-code MM03.
Valuation class is used to group together several material with their same attributes, so that we can carry the
same account determination for various material.

Every material has a valuation class, many materials can contain same valuation class.

As we know the valuation class is link with material type via account category reference.

You can see the blog to understand about material type, account category reference and valuation class.

Account Category Reference (ACR) – Grandfather of Automatic Account Determination Process

The valuation class will be for Raw material, Semi-finished, finished goods. We can differentiate valuation
class as per our business requirement.

Valuation class and Movement type is used for the G/L determination.

Movement type is used for all types of material movement. Suppose if you receive a material from a vendor, a
movement is happens for the movement.

If we transfer a material from one location to another, a movement type is happens for the movement.

It means, whenever we do a off-setting entry, a movement type will be created for that.

For various movement type SAP defines a G/L account for the material movement.
Lets discuss about an account entry for a movement type.

When we do a goods receipt, the movement type happens is 101. And SAP designed as per business process
the account entry will

Inventory A/C debit

GR/IR A/C credit.

We know about these account, Inventory a/c for material master and GR/IR account is a provision account for
vendor.

The all account entry is done via automatic account posting.

SPRO-IMG-MM-Valuation and Account Assignment-Account Determination-Account Determination Without

Wizard-Configure Automatic Postings (t-code OMWB)

Direct t-code OBYC.

You can find the all details of automatic account determination with this document Automatic Account
Determination
For different different movement type, the account entry is done via different transaction event key.

For example
If any movement type hits the inventory entry then it will hit the BSX transaction event key..

If any movement type hits the off-settings entry then its hit the GBB transaction event key.

If any movement type hits the provision entry then its hit the WRX transaction event key.

If you noticed the transaction key GBB, then you can find the a lots of account modifier are used for various
movement type.

We can’t remember the all account modifier at all, for this purpose SAP introduce Simulation Mode . Using
simulation mode, you can easily identify the account modifier which is used for GBB.
Path = SPRO-IMG-Materials Management-Valuation and Account Assignment-Account Determination-
Account Determination Without Wizard-Configure Automatic Postings

T-code OMWB

Set up the simulation criteria as per your requirement.

Set up the Application Area, Input Mode, Account Check. Then press simulation
You can see the all G/L account uses with all transaction event key and account modifier for this particular
movement type.

In this way when we post a movement type in MM module, its also update in FI module.

In short, we can say the main point of MM-FI integration is OBYC

From MM side its Valuation class and for FI side its G/L account. When we do a movement type, the
movement type finds the valuation class for the material, and post the amount to this G/L account which is
assigned to this particular valuation class.

SD-FI Integration
In this part, we learn about SD and FI integration point.

Whenever we sale a finish material to customer, then the customer have to pay for that. We send a bill to
customer.

In that position all billing document which is happens to sales and distribution module will be posted into FI
module.

The account entry of respect to the billing always have two sides

One side is Customer account and other side will be revenue account.

For example:

Customer A/c Debit

Revenue A/c Credit.

AS per SD module, the customer account will be picked from customer master data, which is maintained from
SD module.

We just need to configure the revenue account and if there any discount and surcharges account.

We have to do that via access sequence, access sequence is just a SAP terminology to determine the G/L
accounts.

SAP provides 5 ways to determine G/L account in SD modules.

These are

1    Cust.Grp/MaterialGrp/AcctKey

2    Cust.Grp/Account Key

3    Material Grp/Acct Key

4    General

5    Acct Key

The assigned G/L accounts are used to post the discount and revenue and any kind of surcharges.

To configure this

Go to Path = SPRO-IMG-Sales and Distribution-Basic Functions-Account Assignment/Costing-Revenue

Account Determination-Assign G/L Accounts

T-code = VKOA

You can see the below screen and you can also see the default table and description for above 5 ways.

First system checks the first table entry Cust.Grp/MaterialGrp/AcctKey. If any G/L maintained here then
system will go to the transaction and the particular billing document, then system search the combination of
customer group and material group. If system will find any G/L, then system will go through the G/L, if
system doesn’t find the G/L, then it will search the next table.

Customer group is maintained in Customer master Data, Material Group is maintained in Material Master
Data, Account key is maintained for condition type in pricing procedure.

Lets maintain One G/L account for material group and account key combination.

Double click on the Material Grp/Acct Key

I have maintained the G/L for this combination. here AAG is the material grp.

Whenever system search the table and find the combination for transaction, then system will debit customer
account and credit to this account (180033)

The account key determine that it is a revenue or discount or surcharges.

Press F4 on the Account Key field, you can see the all account keys.

The account keys are also maintained in calculation schema in Pricing procedure.

Path = SPRO-IMG-Sales and Distribution-Basic Functions-Pricing-Pricing Control-Define And Assign Pricing

Procedures-Maintain pricing procedures

In this way SD and FI are integrated each other.

MM-SD Integration
I don’t think I have to give any explanation about MM-SD integration.

One of our friend Satish Babu explain very much in these 3 document.

Check these below document for MM-SD integration.

Integrating MM & SD Modules in Same Client to Create Sales order in Supplying Company Code Using PO
raised in Receiving …
Integrating MM & SD Modules in Same Client to Create Delivery in Supplying Company Code & do GR in
Receiving Company Cod…
Integrating MM & SD Modules in Same Client to do Billing in Supplying Company Code & do LIV in
Receiving Company Code By…
I hope this blog will help you all.

Thanks

Dev Patra
Account Category Reference (ACR) – Grandfather of Automatic
Account Determination Process
October 31, 2013 | 5,166 Views |

Bijay Kumar Barik

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MM (Materials Management)

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{This is my 2nd blog in SCN and 1st blog in SAP ERP – Logistics Materials Management (SAP MM) Forum.
I do realise and strongly believe now, there is another part of SCN world rather than answering the
thread/threads where I expressed in my SCN 1st blog ‘Me, Myself, SDN and now SDN is SCN
@10Years’http://scn.sap.com/community/about/blog/2013/10/07/me-myself-sdn-and-now-sdn-is-scn-
10years for “SCN and Me- Blog Competition” http://scn.sap.com/docs/DOC-45348}.
Every movement of goods is followed by movement type only and without movement type use / without
help of movement type – no goods movement is possible in SAP. During goods movement of transaction
posting, movement type trigger transaction event key and G/L account assignment triggers based
transaction event key (OBYC) with valuation class where valuation class determines the valuation class
available in material master which is used for transaction posting. For automatic account determination,
the vital direct parameters involves are  movement type, valuation class, chart of account, valuation area,
business key (transaction key), valuation grouping code{ valuation modification or valuation modifier},
account grouping code{general modification or general modifier },nature of G/L account ,posting keys and
value string.
Moderately understandable, only large vital factor – valuation class in material master determine G/L
account on goods movement for a movement type and then, all are happy on validation in/for business
process by cross checking accounting entries in each case/stage. Essential regard to account category
reference (which is very much responsible of having valuation class in material master), play  grandparent
role by being silent friend for success to automatic account determination process.
The account category reference (ACR) is an artificial code of four characters which allows flexibility in
linking material type with valuation class. In reality, the valuation class is linked to an account category
reference and account category reference linked to material type. In other term account category
reference is used to simplify the assignment of permitted valuation class/valuation classes to the material
type/ material types.
Business Case-1: How to use Account Category Reference
Based on requirement, business can have one material type, one account category reference and one
valuation class by assigning material type to account category reference and then assigning account
category reference to valuation class. For example business can have one custom material type ZROM
(Raw Material) with custom account category reference (Z001) and new valuation class (3005) for Raw
Material(Raw material – inventory managed with quantity and value)
During material creation with transaction code: MM01 with certain material  type manually or by any
uploading tool, only one permitted valuation class is defaulted for that material type  by account category
reference. So in material creation process no chance of making any mistakes by users or by any
uploading tool.
Business Case-2: How to use Account Category Reference
Based on requirement, business can have one material type, one account category reference and
multiple valuation classes by assigning material type to account category reference and then assigning
account category to valuation classes. For example business can have one custom material type ZROM
(Raw Material) with custom account category reference (Z001) and new valuation classes i.e. (3005) for
Raw Material, (3006) for Chemicals and (3007) for Filter material (all materials are inventory manage with
quantity and value)

During material creation with transaction code: MM01 with certain material type manually or by any
uploading tool, only permitted valuation classes are defaulted for that material type  by account category
reference . Here, there is a chance of entering wrong valuation class by user manually or through upload
file using a tool which needs to be validated.
Business can go for designing a custom transaction code where material can be created through
uploading file which can be verified by central material creation officer.
Business Case-3: How to use Account Category Reference
Based on requirement, business can have multiple material types, one account category reference and
multiple valuation classes by assigning material types to account category reference and then assigning
account category reference to valuation classes. For example business can have three custom material
types such as  ZROM (Raw Material), ZCHE(Chemicals ) and ZFIL(Filter material ) with one custom
account category reference (Z001) and three new valuation classes ie.. (3005) for Raw Material, (3006)
for Chemicals and (3007) for Filter material (all materials are inventory manage with quantity and value)

During manual material creation with transaction code: MM01 or material creation by any uploading tool,
onlypermitted valuation classes are defaulted for that material type  by account category reference. Here,
entering correct combination of material type for material and valuation class are expected through
manually or through upload file which needs to be validated.
Business can go for designing a custom transaction code where material can be created by referring
uploading file which can be verified by central material creation officer.
Also business can think of having “material master creation form” for any new material master creation, if
necessary material code/ material number is not available in system – User/Users can fill the “template of
uploading file’ with duly filled “material master creation form” and send for approval.On appropriate check
and verification with approval from approving authority, if central material creation officer is happy, then
he /she can upload file with custom transaction code for new material code.
Reference:
http://scn.sap.com/thread/1748734
https://scn.sap.com/thread/2012467
http://scn.sap.com/thread/3158751
Before concluding, based on business scenarios and material behaves to business on purchasing,
inventory management and accounting management – one can decide on usage of valuation class and
material type permitted by account category reference.
Thanks for your time to read my 2nd Blog. Also I would like to thank all my present project team members
for their great encouragement and strong motivation.
Regards,
Biju K
Automatic Account Determination
November 21, 2013 | 23,268 Views |

Ravindra Devarapalli
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MM (Materials Management)
 account assignmentfimm

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Before Explaining the Account determination, will look into Inventory Management Introduction.

Inventory Management :
Simply explanation :  Managing the stock of material on qty and value basis is known as Inventory
Management..
Whether Inventory is required or not for the material is controlled at material type and valuation area (plant)
level.

In OMS2, Configuration required  for each material type qty and value updating at valuation area level.

Case 1: If both Qty and Value update indicators are selected then PO can be raise for stock purpose and at GR
material can be placed in store on qty basis and this Qty means stock value will be updated in inventory or
stock G/L account.
Case 2 : If qty update selected and value update not selected for material type at valuation area level, These
material type related materials must procure for consumption Purpose. Means you should select account
assignment category in PR and PO. At GR, received material is placed in store on qty basis but material value
will be booked in relevant consumption G/L account but not in stock or inventory g/l account.
Inventory Management scenario’s can be defined as  1) Goods Receipt 2) Goods Issue 3) Stock Transfer
4)Transfer Posting
Characteristics of Goods Movements :
1) At least one material document will be generated and if goods movement is relevant to FI then accounting
document to be generate.

2) Stock and Stock Value and Consumption Value may increase or decrease based on the goods movement.

3) If GR is entered against PO then PO history to be updated in Display PO.

4) Total value and Total stock, Moving average price to be updated (may be increase or decrease) in Material
Master.

5) If Quality Management views are maintained with required fields, then when you completed the GR or GI,
inspection lot to be generated when you run in QA32 , Based on Usage decision stock to be accepted or
Rejected.

Sample process for Goods Receipt, Goods Issue, Stock Transfer, Transfer Posting.
Goods Receipts : 1) GR w.r.t Po for raw material
                            2) GR w.r.t Production order for finished Product.

                            3) GR With out for Production order

                            4) GR with out Purchase Order.

Goods Issue :       1) GI w.r.t Production order for raw material.

                            2) GI w.r.t sales order for finished product

                            3) GI to cost center or to plant maintenance.

                            4) GI to Scrap.
Stock Transfer :   1) Plant to plant stock transfer with in the company code.
                            2)From plant to plant across company code.

                             3)Store to Store stock transfer

Transfer Posting :1) Unrestricted <———> QI <————–> Blocked

Account Determination : (MM & FI Integration)
                           With this account determination Configuration settings,system will determine a suitable G/L
account while posting GR (or) GI etc.

1)Account Determination with out wizard

    I explained simply in one diagram, it is use full to remember the Process. Below I explained step by step.

1st Part :
Chart of account includes G/L accounts. This chart of account to be assigned to one company code or multiple
company codes.
Note : Similar account determination required plants are grouped together and assigned to a valuation grouping
code and then account determination will be configured at valuation grouping code level.
Step 1 : Define Valuation Control (OMWM)

  Here need to activate valuation grouping code.

For account determination, you can group together valuation area by activating the valuation grouping code.

Step 2 : Group together valuation area.(OMWD)

here you assigned the valuation grouping code with combination of company code and chart of account and
valuation area (plant)  combination. If suppose similar account determination required plants are grouped
together , here you can assign same valuation grouping code to multiple plants (or) multiple valuation areas.

2nd Part :
Material type and Account category reference and Valuation class.
Step 3 : Define Valuation Classes.(OMSK)
In this step, you define which valuation classes are allowed for a material type.

Bijay already explained  about Account category reference (ACR) in below link

http://scn.sap.com/community/erp/logistics-mm/blog/2013/10/31/account-category-reference-acr–grandfather-
of-automatic-account-determination-process
So I am not going to this detailed..  As account category reference is main controller and Mediator for material
type and valuation class.
There is no direct configuration between material type and valuation class. Account category elaborates which
material types related materials can be choose the which valuation classes.

You should enter this valuation class in material master.

3rd Part :
Step 4 :Define Account Grouping for Movement types (OMWN)

     Note : It is not  possible to define new valuation string and new transaction event keys but account modifiers are
editable with any movement type, for GBB or PRD or KON transaction keys are triggering then only account
modifier also triggers.
Based on movement type system is triggering a valuation string and this valuation string is again triggers
several transaction keys.. but few transaction keys again triggers account modifiers or account grouping code
also.

Below are the transaction event keys relevant account modifiers

GBB ——-> BSA,INV,VBO,VBR,VNG,ZOB

PRD——–.>PRA,PRE,PRU

KON———>PIP

Step 5 : Configure Automatic Postings (OBYC)

In this step, you enter the system settings for inventory management and invoice verification transactions for
automatic postings to G/L account.

For transaction key w.r.t to chart of account need to assign g/l account based on transactions with combination
valuation class, account modifier or valuation modifier
FI SD INTEGRATION

SD FI integration in very
simple terms [EXPLAINED]

Automatic generation of accounting document due to sales activity is referred as SD FI integration. 

Below article will help you understand SD FI integration in Order To Cash cycle (sales cycle).

Lets understand accounting document generation at the time of goods issue/

dispatch.
When goods are dispatched, finance document as shown below is posted automatically. Question is
how system determines the GL account and amount to post the accounting document?
Since goods are moved hence material document is created. Corresponding finance document gets
created as a result of MM-FI integration. GL account for inventory account is picked from OBYC
setting (transaction key BSX). GL account for COGS is picked from OBYC setting (transaction key
GBB and account modifier VAX).

Inventory & COGS is always valued at standard cost of the material.

Amount calculated = Quantity * standard cost of material per unit.

Let's understand accounting document generation when  billing document is

released to accounting.
When billing document is released to accounting, accounting document gets posted automatically.
Question is how system determines GL account and amount to post accounting document?

Let’s understand how SD-FI integration enables GL account and amount determination for posting
accounting entry.

SD FI integration in detail

Price determination procedure or pricing procedure:

Price determination procedure is basically combination of multiple condition type. Condition type
represents different prices that are put together (addition or subtraction) to arrive at net sales price.

Net price = Base price –Discount + surcharge + tax

Each of these prices “Base price, Discount, Surcharge, Tax etc. is created as condition type in sap.

Once pricing procedure is selected, list of all condition types involved is known. Now for each
condition type system has to determine the condition value.

Each condition type is linked to an access sequence. Access sequence is basically sequence in which
condition tables are to be accessed to search for condition record (Condition records are maintained
in condition table).

As per sequence maintained in access sequence, system starts with table 1. If condition record is
found then system picks the condition value and stops searching any further. If condition record is
not found in table 1 then system starts searching for table 2. If condition record is found then system
picks the condition value and stops searching any further, if not found in table 2 then system starts
searching in table 3.

If no condition record is found in all the tables, system issues message no record found. Condition
type gets zero value.

Similarly value for each & every condition type is determined. System calculates (addition &
subtraction of condition values) to arrive at net sales price. This net price is basically the price which
is charged to customer. Hence GL account for account receivable is debited with this net price.

 
Note: Condition types can be real or statistical. Only real condition types are included in price
calculation. Statistical condition types are not included in price calculation and are only for
information/ reporting purpose.

GL account determination for each condition type:

Till now system has calculated condition type value but GL account needs to be determined for
posting accounting entry.

Now business might require to record sales price & discount separately. This can be done by
assigning condition type to account key and mapping account key to GL account.

Sap provides large number of predefined account keys. Below are just two examples of account key

ERL – Sales

ERS – Sales deduction or sales discount

All those condition types whose value needs to be posted to sales account are assigned account key
ERL

All those condition types whose value needs to be posted to discount account are assigned account
key ERS.

We understood how pricing procedure works. How system determines the GL account and amount
for posting accounting entry. Now let’s understand how pricing procedure is selected.

Pricing procedure selection process:

Selection of pricing procedure plays a big role in calculation of sale price.

In practical business scenario, sale price depends upon:

Customer:

Company offers different prices to different customers depending upon the kind of business relation
that the customer has with company. Hence company categorizes the customers into different
categories and customers in a particular category can be offered special discount.

Hence customer play role in selection of pricing procedure.

Distribution channel + Division + Sales organization

Price for online order might be different from showroom price. Wholesale order might be eligible for
additional wholesale discount. (Hence distribution channel play role in selection of pricing procedure.)
If you are buying car, price may be composed of base price, insurance charge, road tax etc. But if you
are buying bicycle, price may not have insurance charge & road tax. Goods which are being sold play
role in selection of pricing procedure. (Hence division play role in selection of pricing procedure)

If you purchase product directly from company or if your purchase from marketing agency (selling on
behalf of company), price may differ. (Hence sales organization play role in selection of pricing
procedure).

Above examples are given just to help you understand that selection of pricing procedure depends
upon combination of Sales organization + Distribution channel + Division

Order type:

Different business scenarios (sales order, return sales order, free samples, rework order etc.) will
have different nature of prices involved. Price components involved in sales order can be different
from price component involved in return sales order.

Hence, order type play role in selection of pricing procedure.

Overall, selection of pricing procedure depends upon combination of

Order type + Customer + Sales area (sales organization + distribution channel + division)

→ When a sales order is created, sales order has all information (order type, customer, sales
area) necessary for selection of pricing procedure.

From pricing procedure system determines GL account & amount for accounting entry. When billing
document (sales document) is released then accounting document (finance document) gets generated
automatically. This is referred as SD FI integration.

 
How does FI integrate with SD and what is their account
determination?
SAP FI
FI – SD account determination:- 

All Billing transactions happening in the Sales and Distribution

module will result in FI postings. All accounting entries with
respect to the billing will have one side of the account as a
Customer or receivable and the other side to be a revenue account.

For e.g.  
Customer –Dr. 
To Revenue Account- Cr. 

You have to bear in mind that the customer account gets picked
up from the customer master data. All we need to do is to
configure the revenue account or the discounts and surcharges 

Where and how do we do this? 

You make the allocation for each of these through access

sequences. Access sequence is nothing but SAP’s terminology of
determining the Gl accounts. SAP provides the following six ways
of determining the Gl accounts in SD. 

 Application (key for the Sales and Distribution

application) 
 Account determination type 
 Chart of accounts (from the FI System 
 Customer account assignment group
 Materials account assignment group 
 Account key 
The allocated accounts are used to post revenues, surcharges and
discounts automatically.

The account determination in SD happens through an access

sequence which can be seen in the below table.

The system goes about checking for the gl account from more
specific criteria to less specific criteria. 

Thus you can maintain different GL codes for each combination

of the above table entry.  
This is how SAP will determine the revenue account: 

It will go through first table entry CustGrp/Material grp/ account

key. If any Gl account is maintained here the system will then go
to the transaction data of the particular billing document and see
whether such a combination of Customer group and material
group exists if it does it will pick that relevant Revenue account
and post the accounting document.

If it does not it moves to the next combination in the table which

is Customer group/account key and so on and so forth Customer
grp is maintained in the Sales view of the customer master.
Material grp is maintained in the Sales view of the material
master. Account key is maintained in the pricing procedure for
that condition type. 

The last option it checks is account key entry. We will now

maintain the Gl account for the combination of Material
Grp/account key 

Double Click  
AAG is the material grp. We maintain this since we want it to post
to a different GL code as Sales 3rd parties. That's it. The system
will look into this table see this combination and if the relevant
combination exists in the transaction it will debit the customer
account and credit this account  
As simple as it is. So basically the SAP FI-SD integration is for
picking up the revenue accounts or the discounts and surcharges.
The account key determines whether it is revenue or a surcharge
or discount.  
 

FI-SD INTEGRATION

Process Flow in SD

Step 1 Receipt of enquiry from customers (only SD is involved)

Step 2 Sending quotations (SD)

Step 3 Receipt of sales order (SD)

Step 4 Delivery of finished goods (SD, MM and FI are involved)  

Entry will be 
Change in stock a/c Dr 
Finished goods inventory a/c Cr

Step 5 Billing and invoicing to customer (SD and FI)  

Entry will be 
Customer a/c Dr 
Sales a/c Cr 
For this step create number ranges for document type RV in t code
OBA7

Step 6 Receipt of payment (SD-FI) 

cash a/c Dr 
Customer a/c Cr 
 

Customization Steps

In T-code VKOA assign sales account to account key ERL

depending upon the pricing procedure in SD we have to assign
accounts in VKOA

 1) Insert regions OVK2 

 2) Define sales organization OVX5 
 3) Define distribution channel OVX1  
 4) Define shipping point OVXD 
 5) Assign sales organization to co. code OVX3  
 6) Assign distribution channel to sales organization OVXK  
 7) Assign division to sales org OVXA  
 8) Assign sales org/distribution channel to plant OVX6  
 9) Assign shipping point to plant OVXC  
10) Setup sales area OVXG 
11) Define rules by sales area OVF2 
12) Define pricing procedure determination  
13) Define tax determination rules 
14) Creation of G/L accts FS00 
15) Assign G/L accts VKOA 
16) Setup partner determination 
17) Assign shipping points OVKC 
18) Creation of SD customer master XD01 
19) Creation of finished goods material master MM01  
20) Maintain condition types VK11
FI -sd integration
 This question is answered

Dear all,
Can you plz explain me in detail regarding FI- SD integration
Regards,
Tulsi

 tulsi jiddimani
February 20, 2008 at 06:59 AM
 4 Likes
 Correct Answer

 Allabaqsh Patil replied
February 19, 2008 at 11:29 AM

Hi Tulsi,
Account Determination is an important integration between SD &
FICO modules. whenever a sale takes place, the system automatically posts the
various prices and discounts and freights to the respective GL accounts through
the account keys.
The account key is assigned to the respective GL account. Also in the pricing
procedure we have a column called as account key(second last column). There
we assign the account key. For eg., in Std SAP for basic price we have acct key
ERL, for discounts ERS, for Output tax MWS, for freight ERF, etc. These account
keys are basically defined by the FICO consultant and then the SD consultant
assigns the respective account keys against the respective condition type in the
pricing procedure.
The customer group is nothing but the grouping of various customers like
wholesaler, retailer, subsidairies, etc. This is basically useful while maintaining
pricing like for X group basic price is 10Rs, for Y group it is 15Rs. like that.
Similarly material group is a grouping of materials like Ball pens, ink pens, gell
pens, etc.
When you create the condition table and select these fields and save it and when
you assign this table to your access sequence, the system searches for the
condition record according to this key combination. For that you have to
maintain the condition record in VK11.
Now you are done with pricing. you create the sales order. delivery and invoice.
Now for the system to generate an accounting document when you save the
invoice in VF01 you have to maintain the account determination correctly
otherwise the system will give an error - "error in account determination."
For doing account determination you have to go to :
IMG-sales & distribution-basic functions-account assignmentcosting-revenue
account determination.
In this you first have to maintain the customer account assignment group and
material account assignment group. This group for the customer means for
which customer whether domestic or foreign etc. For material whether finished,
semi finished, raw material, etc. You can also maintain as per name of the
division.
This account assignment group you have to assign in customer master as well
as materialmaster. In customer master (XD01) -sales area data- billing you have
customer acct asst group, make an entry here. In material master (MM01)-
sales:sales org.2 you have account asst group, make a proper entry here also.
Note: Regarding condition types KOFI & KOFK
KOFK: KOFK is used when ever we are posting the document where a cost is
involved that can be checked via the Requirment class in the Sales order in the
Procurment step. In the requirements class there is "E" in account assignment
category & hence you have to use KOFK.
KOFI: If there is no "E" in the account assignment category then use KOFI.
Now in the above IMG path only you have access sequence, condition
type, procedure. maintain everything and assign properly the procedure to the
billing document type.
Define the account keys & assign them properly in the pricing procedure.
Now go to transaction code VKOA. You will see 5 tables. first is customer
group/material group/acct key. When you double click on this it will show as
following:
Application, condition type, chart of accounts, sales org., customer acct asst
group, material acct asst group, acct key, G/L acct, provision acct. depending
upon your customer type and material type you have to maintain all the columns
 and the respective G/L accounts. The first table is for more specific assignments
& the other tables are for general assignments.
Now whenever you make a sales order, delivery and invoice and when you save
the incoice the system will automatically post the price, discount, tax, freight to
the respective G/Laccounts. This will make an accounting document which will
show the exact value of price, discount, tax, freight for that particular
transaction.
Apart from this when you do PGI in the delivery the system updates
various G/L accounts related to inventory.
Also as far as profitability analysis is concerned it is an important integration
between SD & FICO basically known as "profitability analysis - CO-PA".
I hope I have answered your Query. Please reward valuable points if solution
found useful.
Regards,
Allabaqsh G. Patil
Edited by: allabaqsh patil on Feb 19, 2008 3:59 PM
 4View this answer in context 

Helpful Answer
 by

 Jonathan Yap 
 Rajesh Banka 
 VijayaSateeshKumar Kandula 
 Sadhu Kishore 
 Rakesh Singh Chauhan

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6 replies
Helpful Answer

Jonathan Yap replied
February 19, 2008 at 11:23 AM

hello, friend.
we will limit the discussion to the general integration points...
1. if CO-PA is active, your material usually has profit center assigned. this is
required in sales order processing
2. when you post goods issue, SD integrates with FI and inventory valuation is
changed. costs of sales are also recorded.
3. when you do billing and post the same to accounting, you post revenue, costs,
discounts, surcharges, taxes, etc. to the proper GL accounts.
4. account assignment groups for customers and materials are SD settings that
influence FI as well.
regards.
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Correct Answer

Allabaqsh Patil replied
February 19, 2008 at 11:32 AM

Hi Tulsi,
Account Determination is an important integration between SD &
FICO modules. whenever a sale takes place, the system automatically posts the
various prices and discounts and freights to the respective GL accounts through
the account keys.
The account key is assigned to the respective GL account. Also in the pricing
procedure we have a column called as account key(second last column). There
we assign the account key. For eg., in Std SAP for basic price we have acct key
ERL, for discounts ERS, for Output tax MWS, for freight ERF, etc. These account
keys are basically defined by the FICO consultant and then the SD consultant
assigns the respective account keys against the respective condition type in the
pricing procedure.
The customer group is nothing but the grouping of various customers like
wholesaler, retailer, subsidairies, etc. This is basically useful while maintaining
pricing like for X group basic price is 10Rs, for Y group it is 15Rs. like that.
Similarly material group is a grouping of materials like Ball pens, ink pens, gell
pens, etc.
When you create the condition table and select these fields and save it and when
you assign this table to your access sequence, the system searches for the
condition record according to this key combination. For that you have to
maintain the condition record in VK11.
Now you are done with pricing. you create the sales order. delivery and invoice.
Now for the system to generate an accounting document when you save the
invoice in VF01 you have to maintain the account determination correctly
otherwise the system will give an error - "error in account determination."
For doing account determination you have to go to :
IMG-sales & distribution-basic functions-account assignmentcosting-revenue
account determination.
In this you first have to maintain the customer account assignment group and
material account assignment group. This group for the customer means for
which customer whether domestic or foreign etc. For material whether finished,
semi finished, raw material, etc. You can also maintain as per name of the
division.
This account assignment group you have to assign in customer master as well
as material master. In customer master (XD01) -sales area data- billing you
have customer acct asst group, make an entry here. In material master (MM01)-
sales:sales org.2 you have account asst group, make a proper entry here also.
Note: Regarding condition types KOFI & KOFK
KOFK: KOFK is used when ever we are posting the document where a cost is
involved that can be checked via the Requirment class in the Sales order in the
Procurment step. In the requirements class there is "E" in account assignment
category & hence you have to use KOFK.
KOFI: If there is no "E" in the account assignment category then use KOFI.
Now in the above IMG path only you have access sequence, condition
type, procedure. maintain everything and assign properly the procedure to the
billing document type.
Define the account keys & assign them properly in the pricing procedure.
Now go to transaction code VKOA. You will see 5 tables. first is customer
group/material group/acct key. When you double click on this it will show as
following:
Application, condition type, chart of accounts, sales org., customer acct asst
group, material acct asst group, acct key, G/L acct, provision acct. depending
upon your customer type and material type you have to maintain all the columns
and the respective G/L accounts. The first table is for more specific assignments
& the other tables are for general assignments.
Now whenever you make a sales order, delivery and invoice and when you save
the incoice the system will automatically post the price, discount, tax, freight to
the respective G/L accounts. This will make an accounting document which will
show the exact value of price, discount, tax, freight for that particular
transaction.
Apart from this when you do PGI in the delivery the system updates
various G/L accounts related to inventory.
Also as far as profitability analysis is concerned it is an important integration
between SD & FICO basically known as "profitability analysis - CO-PA".
I hope I have answered your Query. Please reward valuable points if solution
found useful.
Regards,
Allabaqsh G. Patil
Edited by: allabaqsh patil on Feb 19, 2008 3:59 PM
4 likes

Helpful Answer

Rajesh Banka replied
February 19, 2008 at 20:00 PM

Now the link between SD and FI :-

1. Whenever you create a delivery with reference to a sales order, goods
movement takes place in the bacgground. eg. In case of standard sales order,
you create an outbound goods delivery to the customer.
Here movement 601 takes place. This movement is configured in MM. Also, this
movement hits some G/L account in FI. Every such movement of good s hits
some G/L account.
2. The accounts posting in FI is done with reference to the billing documents
(invoice, debit note, credit note etc) created in SD. Thus this is a link between
SD and FI
3. Tax determination: In case of a tax determination also, there is a direct link
between SD and MM
SD Integration points with other modules
SD module is highly integrated with the other modules in SAP.
Sales Order –
Integration Points Module
•Availability Check - MM
•Credit Check - FI
•Costing - CO/ MM
•Tax Determination - FI
•Transfer of Requirements - PP/ MM
Delivery & Goods Issue –
Integration Points Module
•Availability Check - MM
•Credit Check - FI
•Reduces stock - MM
•Reduces Inventory $ - FI/ CO
•Requirement Eliminated - PP/ MM
Billing -
Integration Points Module
•Debit A/R - FI/ CO
•Credit Revenue - FI/ CO
•Updates G/ L - FI/ CO
(Tax, discounts, surcharges, etc.)
•Milestone Billing - PS
Return Delivery & Credit Memo -
Integration Points Module
•Increases Inventory - MM
•Updates G/ L - FI
•Credit Memo - FI
•Adjustment to A/R - FI
•Reduces Revenue - FI
Accounting Entries:
1. Sales Order Created
-No Entry-
2. PGI done (Goods issue)
Cost of Goods Sold Dr (Configured in OBYC GBB T-Key)
To Inventory Account
3. Billing document released to Accounting
Customer Account Dr.
To Sales Revenue Account (ERL T-key in Pricing procedure)
Note : The GL account is assigned to this ERL in VKOA
4. Payment Received
Bank Clearing A/c Dr
Customer A/c Cr.
Points to Know : Good to understand the pricing procedure and how the different
transaction keys are used like ERL, ERS etc.
Regards,
Rajesh Banka
Reward points if helpful.
5 likes

Helpful Answer

VijayaSateeshKumar Kandula replied
February 19, 2008 at 22:37 PM

Hi Tulsi,
SD & FI are related when you do
1) Post goods issue
Accounts are hit based on your settings of the movement type and the G/L
accounts in transactions OMJJ and OBYC.
The valuation class which you put in the material master is also helpful in
determining the G/L accounts for posting along with your above transactions.
The accounting entries will be
COGS DEBIT
Inventory CREDIT
2) Post your invoice to accounting
Based on your settings in the transaction VKOA,your billing document will be
posted to accounting.
The accounting entries generally are:
REVENUE Credit
Customer account Debit
SD & MM are related in following cases
1) When a sales order triggers the Purchase requistion.
This can be done either in the third party scenario in sales or sales order can
trigger PR through planned order as well.
Link Between SAP SD, MM & FI
1. In SAP you will always get integration with other modules. SD will interact
with FI, MM will interact with SD :-
1a. Looking at MM and SD interaction first, take the scenario of a third party
order process. This process uses a purchase order (which is sent to your
vendor). Also invoice verification is used further along the process to check that
the invoice you send to your customer is the same material and quantity as that
which the vendor sends to you (but obviously shipped
directly to your customer).
1b. Billing is an SD function. But SAP needs to know, when processing a
customer's payment, to which GL account the payment has to be processed. For
instance payment of a UK based material would be placed in a different GL
account to that of a non-UK based material. Furthermore, a UK based customer
may have a different GL account to that of an Export customer. This is
configured in Account Determination.
2. ABAPers are there to essential do some bespoke development. Your
integration, or interaction, with them would be when specifying the tables,
fields, input fields, a simple process explanation, data mapping (if doing an
interface from one system to another) etc.
Please Reward If Really Helpful,
Thanks and Regards,
Sateesh.Kandula
2 likes

Helpful Answer

Sadhu Kishore replied
February 20, 2008 at 02:36 AM

hi,
FI-SD Integration:
Rev AC determination
1. Sales Order Created
-No Entry-
2. PGI done (Goods issue)
Cost of Goods Sold Dr (Configured in OBYC GBB T-Key)
To Inventory Account
3. Billing document released to Accounting
Customer Account Dr.
To Sales Revenue Account (ERL T-key in Pricing procedure)
Note : The GL account is assigned to this ERL in VKOA
4. Payment Received
Bank Clearing A/c Dr
Customer A/c Cr.
Credit Management
If you implement both SD and FI-AR, Credit Management provides the following
facilities:
You can define automatic credit limit checks according to a range of criteria and
in line with your company’s requirements
You can also define at what point the system carries out these checks (order,
delivery, goods issue, and so on).
The credit representative is automatically alerted to a customer’s critical credit
situation as soon as order processing starts.
The relevant employees can be automatically notified of critical credit situations
via internal mail.
Your credit representatives are able to check a customer’s credit situation
quickly and reliably, and, in line with the appropriate credit policy, to decide
whether the customer should be granted credit.
Using Credit Management you can work in distributed systems. A distributed
system is one with central financial accounting and non-central sales and
distribution on several sales and distribution computers.
COPA
Mapping of SD conditions to CO-PA value fields (transaction KE4I) is the first
bridge between the SD and CO-PA modules.
regards
sadhu kishore
2 likes

Helpful Answer

Rakesh Singh Chauhan replied

February 20, 2008 at 06:59 AM

Dear Tulsi,
Now the link between SD and FI :-
1. Whenever you create a delivery with reference to a sales order, goods
movement takes place in the bacgground. eg. In case of standard sales order,
you create an outbound goods delivery to the customer.
Here movement 601 takes place. This movement is configured in MM. Also, this
movement hits some G/L account in FI. Every such movement of good s hits
some G/L account.
2. The accounts posting in FI is done with reference to the billing documents
(invoice, debit note, credit note etc) created in SD. Thus this is a link between
SD and FI
3. Tax determination: In case of a tax determination also, there is a direct link
between SD and MM
SD Integration points with other modules
SD module is highly integrated with the other modules in SAP.
Sales Order –
Integration Points Module
•Availability Check - MM
•Credit Check - FI
•Costing - CO/ MM
•Tax Determination - FI
•Transfer of Requirements - PP/ MM
Delivery & Goods Issue –
Integration Points Module
•Availability Check - MM
•Credit Check - FI
•Reduces stock - MM
•Reduces Inventory $ - FI/ CO
•Requirement Eliminated - PP/ MM
Billing -
Integration Points Module
•Debit A/R - FI/ CO
•Credit Revenue - FI/ CO
•Updates G/ L - FI/ CO
(Tax, discounts, surcharges, etc.)
•Milestone Billing - PS
Return Delivery & Credit Memo -
Integration Points Module
•Increases Inventory - MM
•Updates G/ L - FI
•Credit Memo - FI
•Adjustment to A/R - FI
•Reduces Revenue - FI
Do let me know in case of any queries.
Hope this helps you.
Regards,
Rakesh