SAP MM Configuration Steps

SAP Career Guidance 2020
SAP ECC 6.0

PRACTICAL KNOWLEDGE SHARING
SAP MM TRAINING
PRASHUN SHETTY
CAREER COACH
CONTACT: 8971164999
1
Index
Sr. Date Topic Pg.
1 19-06-2020 Course Curriculum 3
2 20-06-2020 Introduction to Org. Structure 7
3 21-06-2020 Master data Creation with P2P process 9
a. Material
b. Vendor
c. Purchase Info Record
d. Source List
e. Purchase Requisition(PR)
f. Purchase Order(PO)
g. Goods Receipt(GR)
h. Invoice Receipt(IR)
4 22-06-2020 Customization of Master Data with related 22

material document.
a. Material
b. Vendor
c. Purchase Info Record
d. Source List
e. PR
f. PO
5 23-06-2020 Request For Quotation 39
6 24-06-2020 Release Procedure 48
7 25-06-2020 Outline Agreement 57
8 26-06-2020 Pricing Procedure 66
9 27-06-2020 Special Procurement 91
10 20-06-2020 Service Management 131
a. Service Master Creation
a. Service PO
b. Service Entry Sheet
11 02-07-2020 Inventory Management 135
12 05-07-2020 Physical Inventory 157
13 06-07-2020 Automatic Account Determination 168
14 07-07-2020 Split Valuation 182
15 08-07-2020 Invoice Verification 192
16 09-07-2020 Automatic PO Process 201
17 10-07-2020 Cross Module – Integration Configuration 208
2
SAP MM Consultant – Course Content
Candidate Name : Jeevan Naik
SAP MM Course Curriculum:

Introduction to SAP
Discussion on ERP and other ERP clients in the market

Comparison with SAP to other ERP clients and focusing on the points of SAP over other ERP
clients
Introduction to SAP screens and ways of calling the transaction
Definition on Configuration and Customization
Organization Structure
Definition on Organization elements Client

Company Code
Plant
Storage Location
Purchase organization
Purchasing Group
Assignment of Organization elements and making of Organization structure
Master Data in Material Management
Configuration and customization activities on Material Master

Configuration and customization activities on Vendor Master
Configuration and customization activities on Info Record Master
Configuration and customization activities on Source List Master
Procurement Cycle
Discussion of complete procurement cycle from Demand to Supply in real time perspective
Purchase Requisition
Direct Purchase Requisition

Configuration on Purchase Requisition
Request For Quotation (RFQ)
Configuration and Customization activities on RFQ
3
Quotation
Maintain Quotation
Price Comparison
Purchase Order
Standard Purchase Order

Configuration on Document type
Discussion on item category
Subcontracting Purchase Order
Complete process discussion like creating Sub contracting PO, Goods Issue, GR.
Creation and exploding of BOM
Details of consumption of components with respective movement types
Consignment Purchase Order
Complete process execution like PO creation, GR and settlement.

Stock Transport Order
Intra-Stock STO with MM route
Intra-Stock STO with Delivery
Inter-Stock STO
Service Purchase order process
Pricing Procedure
Condition Techniques
Access Sequence
Pricing determination process
Schema determination
Release Procedures
Edit Characteristics
Edit Classes
Release Procedures
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Release Group
Release Code
Release Indicator
Release Strategy
Contracts
Value Contracts
Quantity Contracts
Schedule Agreements
Schedule Agreements without Release profile
Inventory Management
Goods Receipts
Goods Issues
Transfer Posting
Movement Type Creation
Automatic Account Determination
Valuation Class
Account Category Reference
Account Postings
Split Valuation
Valuation Type
Configuration related to Split Valuation
Physical Inventory Process
Annual Inventory
Periodic Inventory
Cyclic Inventory
Invoice Verification
Credit Memo
5
Subsequent Debit
Subsequent Credit
Automatic PO process
Configuration on automatic PO
Cross Module i.e Integration Configuration
Warehouse Module
Quality Module
Sales and Distribution
Finance and Controlling
6
Exercise:
Day 1:
SAP MM Org Structure:
7
Master Data & P2P application:

Master data in MM module contains all the basic information need to manage
a material. These data records are stored centrally and are used and
processed on a cross-application basis. Material Management of SAP
maintains the records of various activities and processes material
procurement, material modification and production, such as purchasing
materials, storing and maintaining them. Creating masters is the basis to
start any implementation, which reduces repetitive work and minimizes the
chances of errors.
The following are the list of master records in SAP MM as shown in below
figure:
Material Master: It contains all data required to define and manage

material.
Service Master: It contains the details of all the services that can be
procured from an external vendor within organization.
Vendor Master: It contains information on vendors from which a company
can procure or sell.
Info Record: It used to record purchasing information with the vendor for
certain material and also store information about last purchasing price,
planned delivery time, remainder for invoice verification etc.
Source List: It includes the list of possible sources of supply for a material
over a given framework of time.
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Day 2:
Master Data (Material/Vendor/PIR/Source List) with P2P
process (PR-PO-GR-IR):
1) Material master consist of following views as shown in the figure.

T Code – MM01.
The following are the level to which all the data will be stored as per the Material view.
1. Basic data - Client level.

2. Purchasing, MRP, Costing data – Plant level.
3. Sales data – Sales Organization level (tax indicator is at country level).
4. Storage data – Storage location level.
5. Accounting data – Valuation Area level.
6. Warehouse Data – Warehouse Number level.
7. Storage Type Data – Warehouse number and storage type level.
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We are Creating Material master using following views.
- Basic data 1&2

- Purchasing
- Accounting view
- General data 1 & 2
Basic Data View:
In the below figure we can see the highlighted data is been saved in this view such as UOM,
Material Group, weight etc.
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Purchasing View:
In this view we can save default order unit to order the material .
Purchasing Value Key:
Purchasing Value Key is useful for setting reminder for the material you can find in material master in
Purchasing view.
Purchasing value key determines the following things:
1) Reminders keys- There are 3 keys which determine in how many days before or after the vendor has to
be reminded or urging letters for the material procurement.
2) Over and under deliveries tolerances.
3) Order acknowledgement requirements in PO.
It gives all the conditions in which the procurement is made. You can have different purchasing value keys
which has to be customized in IMG - MM - Purchasing - MM - Define Purchasing Value Keys / OME1 Tax
code.
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Accounting View:
The Valuation Classes & its prices is maintained in this view.
As we observe in the above we can have a price control for standard view as well as for moving
price. Also we can maintain the valuation class as per the valuation area level, can have multiple
valuation class as per the valuation category.
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2) Vendor master consists of three areas:

T Code – XK01
1. General Data – Company Code Level
2. Company code Data – Company Code Level
3. Purchasing Data – Purchase Organization Level
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3) Purchase info record:

T Code – ME11
Purchasing info record stores information on material and vendor, supplying that material. For
example, a vendor's current price of a particular material is stored in info record. Purchase info
record can be maintained at the plant level or at the purchasing organization level.
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4) Source list:
T Code – ME01
Particular material maintained in Purchase info record can be ordered from different vendors in
different time intervals. This information can be maintained in a list that is called as the source
list.
Note: We can block the vendor & Source list can be copied from one plant to another plant. we
have to mention the agreement also if any in this list or it will give warning in PO. In purchasing
view of material master we can make source list mandatory.
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Procure to Pay Cycle:
Below Figure shows the flow for P2P cycle.
In the System the P2P are as follows:
ME51N - Purchase Requisition - Internal document
ME21N - Purchase order (If vendor is already) - External document.

If there is no vendor then go with RFQ
MIGO -Goods receipt
MIRO - payment to vendor
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Purchase Requisition:
T Code: ME51N
It is an internal document contain the list of requirement raised within the organization. It is the
internal document which require approval from purchase Organization.
Purchase requisition number 0010017540 created
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PR Release:
T Code: ME54N
As the Purchase Requisition document with high price required permission of higher grade
officers as shown.
Purchase requisition 0010017540 changed
Purchase Order:
T Code: ME21N
The Purchase order is an external document used to request item or services from a vendor at
an agreed upon price.
Standard PO created under the number 4500018422
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Goods Receipt:
T Code: MIGO
A goods receipt is the physical inbound movement of the goods or material into the
warehouse. All Goods receipt result in an increase of stock in the warehouse.
Material document 1105 posted
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Note: After MIGO transaction the material is available for further stock we can able to
check by using T Code MMBE (Stock Overview) , in which it is directly added to
unrestricted stock
Note: In the Above Figure before GR it was 4000 in unrestricted use & after doing GR
1000kg is added in unrestricted stock from Ordered Stock.
Invoice receipt:
T Code: MIRO
Once the Goods or Material are procured from a vendor and placed in company
premises through GR, we need to pay the vendor for acquired goods. The amount to be
paid along with the details of the material is provided by the vendor in the form of a
document that is known as the invoice.
We can be the document type & the accounting view for Invoice receipt Using T code:
MIR4
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Document no. 5200000245 created
Summary Recap:
In this Session we made a Master Data for Material, vendor & their Purchase Info
Record fallowed by Source list. We also done the P2P cycle of Material and also
overview the material in stock.
The below table shows the accounting entries after MIGO, MIRO & Payment
The detail we be seen in Account determination & Invoice Verification topic.
(Refer Page No. 168 for complete detail)
Transaction MIGO MRKO Payment
Key (Goods (Invoice
Receipt) Settlement)
WRX Credit (-) Debit (+)
BSX Debit (+)
KBS Credit (-) Debit (+)
(Vendor
Account)
Bank Account Credit (-)
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Day 3:
Customization of Mater Data & Material Document.
Customization in the standard system is mainly done for Business requirement in an organization.
created by Functional consultant while configuring the data through SPRO.
If any technical change, program change that will be handled through Workbench - ABAP
consultant , Technical Consultant
• Material master:
The following are example in the standard SAP R/3 System, and what their different roles are:
FERT (finished products)

Finished products are produced by the company itself. Since they cannot be ordered by
Purchasing, a material master record of this material type does not contain purchasing data
HALB (semi-finished products)

Semi-finished products can be procured externally (sub-contracting) as well as manufactured in-house.
They are then processed by the company. A material master record of this material type can contain both
purchasing and work scheduling data.
ROH (raw materials)

Raw materials are always procured externally and then processed. Since raw materials cannot be sold, a
material master record of this material type contains no sales data.
In System we create a Material of ROH Type in the system – WROH.
22
The above figure shows the path to create a new Material Type & to set the respective number
ranges.
Note: After Creating a Material type its Qty./Value should be updated in its Valuation
area using T code OMS2
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The Below figure shows the details stored in material type which are highlighted
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Number Ranges of Material type:
As any new material for respective material type is created its automatically takes the number
range as it is defined in the system. We can modify the number range as per Organization
requirements.
As we see the new material we created earlier was saved in the All material types group by
default. Now we will change this Material type Number Range & its Group
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The Below Figure shows in All Material types Both the Number Ranges are there.ie. Internal &
External.
We will Change number range of the Material group to TEST1 from All Materials Type as
shown in the figure
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Hence if we create the new material for WROH material type, the number range will
take as per the allotted group i.e. Test 1. As shown in the below figure as Test 1 group
contains the internal number range between 1 – 1000 & external number range
between 1000001001 - 1000001300.
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Material 3706 created
Note: Similarly the number range plays the same role for other master data as well as the
Document type.
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• Vendor Master:
Vendors are created to procure the material which are not able to produce inside the plant.
Account group determines vendor account group through which we can group certain vendors into one
group and maintain certain configuration for that.
We have material type in material master where we use select the fields and number ranges with the help
of material type-its act as a bridge, coming to vendor master in similar to material master we have account
group here, where we use to define the account group select the field selecting as per that and we will
maintain the number ranges in the intervals and we will apply that interval to account group.
Vendor -Account group
Interval-Number range
Number range-Account group
SPRO
Logistics general
Business partner
Vendor
Control
Define Account group and field selection / Number Range
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We can Create new account Group & required field selection
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After Creating a new account group & its field selection as per business requirement we can
assign the number range as shown in below figures.
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• Purchase Info Record:
Purchase info record stores the record in Stock (IL) & Non Stock (IN) respective allotted number
range as shown in the figure.
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Note: When we create the Purchase info record it default choses the element type IL in number
range .
Purchasing info record 5300007487 1000 1000 created
- Purchase info record created for Material 3706 & Vendor 100455
Customization of Material Document:

We can customize the document type as per the Company Requirement.
• Purchase Requisition (PR):
To create a new document with modified field selection we have to do the following
steps as shown in the figure
Step 1: Through IMG Path – Material Management – Purchasing – Purchase Requisition,

Select the define Document type.
33
Step 2: New ZBN Document type created by copying Standard NB document type
Note: We can also able to assign the number range as per company requirement.
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Step 3: We have to create new field selection for the new document type, just go to
Screen layout as shown in Figure in that we will copy NBB document to new document
YBB.
35
Step 4: As per our new document Type YBB created we can now change the Field
selection as per our requirement.
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37
Step 5: Enter the Modified field selection in Document type. As shown in figure the
Field selection ZBB is linked with Document type ZNB.
Note: While making the PR document to execute this customise we need to select the
document type as ZBN & the required field will appear automatically.
• Purchase Order:
Note: For Purchase order customization is similar as of the Purchase requisition only
difference is their Field selection name (In PO – NBF as standard field selection).
Summary Recap: In this session we saw the Customization of Master data & some material
document in which gone through the various number ranges & some field selection view in
some material document. Hence we learnt that any document can be customize using the IMG
path.
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Day 4:
Request For Quotation (RFQ):
Vendor selection is an important process in the procurement cycle. Once requirements

are gathered, we start looking for possible suppliers who can fulfill the requirements at
the best possible price. So, a request is made to the vendors to submit their quotations
indicating the price of the material along with their terms and conditions. This request
is known as the request for quotation (RFQ).
In the SAP System RFQ is of three steps procedure as fallows

ME41 - Creation of Quotation
ME47 - Maintain price
ME49 - Price Comparison
Note: We will take 3 vendors in this system & their respective prices will be compared &
will select one vendor from these by comparing through system.
Vendor 0000100536 has been created for company code 1000 purchasing organization
1000
1000
1000
Step 1: We will send quotation request for Material 3706 for these three vendors.
T Code: ME41
Note: Coll. No. is necessary to compare the Vendors (Bidder) price, once all the prices
are obtained as shown in below figure.
39
RFQ created under the number 6000000140
40
41
Note: In above 3figures we saw the quotation request sent to the 3vendors specifying
the qty., quote date, delivery date etc.
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Step 2: We will Maintain the price for the 3vendors as send by them in the system.
T Code: ME47
Quotation for RFQ 6000000140 maintained
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44
Step 3: All the Price are obtained from the all vendor, now we will compare the price of
these vendors.
T Code: ME49
As we see in the above figure the prices are compared and the rank are been allotted to
the respective vendors as per their quotation value.
From the above example Vendor(Bidder) 100537 is selected as compare to 100538 &
100536.
45
Additional Note:
If we want to reject the vendor in case without comparing the prices of another vendor
then we can do by using T Code : ME47, enter the RFQ document number then click on
the overview and mark as Rejection Indicator as shown in the below figure.
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For Customization of RFQ: Similarly compare to other customization can be done

through IMG path as shown in below figure.
Summary Recap: In this Session we saw the selection of vendors using RFQ as well as
how to Reject the vendor directly without comparing to other vendors and
configuration of RFQ if required.
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Day 5:
Release Procedure for PR & PO:
• it is the online approval given by the person responsible for the release of
purchase document.
The difference In release procedure in PR & PO are:
Release Procedure for PR Release Procedure for PO

1. We can release the PR at both 1. We can release the PO at only
level i.e. Item level & Header Header level.
Level.
2. If we approve any one of 2. We cannot send the partial PO
many item in PR, then to the vendor been an
purchasing can already start external document, hence we
ordering this item regardless can only have an overall
of the release of other items. release.
Eg. If Item A is only approved
and other Item B & C is
blocked, PR will release for
item A.
3. The Database table (SE11) 3. The Database table (SE11)
stored in ABAP dictionary for stored in ABAP dictionary for
PR name as CEBAN. PO name as CEKKO.
4. To Release the PR we use the 4. To Release the PO we use the
T code: ME54N T code: ME29N
Note: We use Database table (SE11) for Service Entry Sheet Release Procedure
Document Table Name
SES (Service Entry Sheet) SESSR
As we observe from the differentiate between the PR & PO, all the processes are same
for both except the Classification of level & database table. Hence we will do the
release procedure for PR in the system (same will do for the PO).
48
Release Procedure for PR:
Let’s see the Difference in Header level & Item in Release procedure for PR.
Header level Release Procedure Item level Release Procedure

1. Releasing the PR as a whole 1. Releasing of the PR line item
document is known as header is known as item level
level release procedure. release procedure.
2. We use field name in reference 2. We use field name in

to table field as GFWRT in Total reference to table field as
Value of Requisition GSWRT in Total value of
requisition.
3. In the Release Group, Overall of 3. In the Release Group,

requisition is flagged. Overall of requisition is not
flagged.
4. In document type overall

4. In document type overall
release of requisition is
release of requisition is flagged.
flagged.
Note: All the Point 2,3 & 4 is
Note: All the Point 2,3 & 4 is
mandatory for Header level Release
mandatory for Item level Release
procedure.
procedure.
49
Note: We cannot do both Release (Item & Header level) in one PR, Only one is possible
item or Overall release (Header).
Release Procedure consist of following

• Characteristics
• Class
• Release Group
• Release Code
• Release Indicator
• Release Strategy
Characteristics: It defines the properties of an object

- In this we will select the Purchase Document type & The Total value.
As we Know the Table Name for PR is CEBAN for release & for field name we can get
from ABAP dictionary database table T Code: SE11
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Characteristic CCP_PRDOC saved //For Purchase Document

Characteristic CCP_TOTALVALUE saved //For Total Value
Class: Characteristics are assigned to Class.
Class type 032: Class CCP_PR created
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Release Group: It is assigned to class & we can create the release group as per our
requirement.
As we see in above figure new release group CC is created, assigned to class CCP_PR
and made it as Overall Release(Header level).
Release Codes: It is an approver of the document .

As below figure shows we made 3 approver (codes) in the Group.
52
Release Indicator: It is an indicator which will release and block as per the requirement.
As reference to above figure we created the two Release Id Release & Block.
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Release Strategy: It contains the condition in which Release Procedure can apply.
In Release Prerequisites tab – we can set the priority as shown in figure.
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Release Statuses tab – we have to set the release indicator as shown in below figure.
Classification tab – we can set the condition as shown in below figure
System Example: We have completed all the release procedure for Purchase Requisition
Header, now using the values set in Release Procedure we will make a PR
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Purchase requisition number 0010017563 created
In the above figure we observe Release strategy condition automatically triggered as it

satisfied the condition mention in the release strategy.
Note: Without the approval of the approver(release code) we cannot able to create the
PO for the same. Therefore in order to approve we use T Code: ME54N.
Purchase requisition 0010017563 changed
Summary Recap: In this Session we have learnt how to create the release procedure for
the purchase document & to release it.
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Day 6:
Outline Agreements:
An outline agreement is a longer-term arrangement with a vendor regarding the supply
of material.
Outline agreement are of two types namely Contracts and Schedule Agreement.
Contracts Schedule Agreement
A contract is a pre-determined long term In Scheduling agreements, we can enter

agreement to supply material or service for a scheduling lines which gives details of quantity
certain period of time. Specific delivery dates that should be delivered on specific date. Plant
are not mentioned in the contracts. Contracts must be entered in Schedule agreement so that
can be of two types: Value Contract or Quantity materials can be delivered at plant. These are
contract generally used for materials whose
requirements are predictable.
When we require we will release the purchase Where as in Schedule agreements

order against contract i.e. we will create a PO we can enter the schedule lines i.e.
with reference to the contract. delivery schedules for a scheduling
agreement.(No PO required)
T code: ME31K T code: ME31L & ME38 to create

Schedule lines.
Contracts:
T Code: ME31K
As we know that the Contracts is of two types value & quantity, let us see the difference
between them.
Quantity Value
The overall value is specified in terms The overall value is specified in terms
of the total quantity of material to be of the total amount to be paid for
supplied by the vendor. that material to the vendor.
Document type: MK Document Type: WK
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We will now create Quantity contract for Material 3147 & Vendor 100537 and validity
will maintain till 24-12-2021 as shown in figure.
58
Quantity contract created under the number 4600000160
Further we set the price & the target qty. in the Contract as shown in above figure.
Now we will create the PO for this contract by referring the outline agreement number
in PO as shown in below Figure.
59

Material document 1153 posted //GR posted.
Note: If we exceed the limit of the contract then in PO system will show the warning
message as we seen in the below figure.
60
Points to be noted: In the PO (4500018474) go to item level conditions tab in that click
on analysis tab & observe the Price took by the system & will discuss later in Pricing
Procedure topic.
61
Schedule Agreement:
T code: ME31L
We will create Schedule agreement for one month for target qty. 1000kg as shown in
the below figures.
62
Scheduling agreement created under the number 5500000179
63
Schedule Lines:
T Code: ME38
We will now create the delivery dates.
Scheduling agreement 5500000179 changed
As we see in the above we created the delivery schedule with the quantity, now we will
do the Goods Receipt as we know schedule agreement doesn’t require PO.
64
Note: From the above example we received the 250kg of 1000Kg as Planned in schedule
lines, remaining stock i.e. 750kg will be marked as on order stock in the system as
shown in below figure.
Summary Recap: In this session we learnt Outline agreement such as contracts type,
schedule agreement & its schedule lines.
65
Day 7:
Pricing Procedure:
Pricing procedure is a way to determine prices in purchasing documents. It gives us
functionality to assign different calculation types for different needs.
Vendor Schema Group

Condition Type Calculation
Schema Purchase Org.
Schema Group
Find Condition Record
Giving Condition Record
Access Sequence
Condition Condition Condition

Table 1 Table 2 Table 3
Price Picking Priority of Access Sequence
Flow Chart for Pricing Procedure
As Shown in the flow chart Calculation Schema is a structure that logically combines the schema
group & the Condition types where Condition types find the condition record in the Access
Sequence. Access Sequence is a strategy to search for a condition record in condition table.
66
Path to customize the pricing procedure are as follows:
SPRO
Material Management
Purchasing
Conditions
Define Price Determination Process
We can maintain the pricing procedure for different vendor such as international or domestic as
the prices are different as compare to each other, For this henceforth we can have different
Calculation schema for each vendor type as well as for different organization.
The vendor & the Purchase Organization is maintained in Schema group and assigned to
calculation schema by Schema determination
Now let us define a Calculation Schema & assign the schema group with schema determination
and then Condition Type assigned to calculation Schema.
67
i. Calculation Schema – Schema Group:
Vendor Schema Group

Calculation
Schema Group
Step 1: Define Calculation Schema.
We have crested the new Calculation Schema CCP001 as shown in figure below by
copying the standard calculation schema or we can create as per our own by clicking
in New Entries Tab.
68
Step 2: Define Schema Group
In this step we will define the schema group for vendor & the purchase organization.
Then we will assign to respective vendors and purchase organization.
This further divided into sub steps as shown in figure below:

a. Schema Groups: Vendor
b. Schema Groups for Purchasing Organizations
c. Assignment of Schema Group to Purchasing Organization.
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a. Schema Groups: Vendor
New Schema Group Vendor created as CP as shown in below figure.
70
Now we will assign the schema group vendor in its master data of the vendors.
This is to be assigned in the purchasing view of the Vendor master data.
In this Case we will take vendor as 100455 and assign schema group vendor CP in it.
71
b. Schema Groups for Purchasing Organizations
We have created the new Schema group for Purchase Organization as shown in figure
below.
72
c. Assignment of Schema Group to Purchasing Organization
As the name suggest the Schema Group is assign to the Purchase organization.
We will assign Purchasing Organization 1000 to Schema Group CCP1 as per below
figure.
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Step 3: Define Schema Determination
In this Step we will assign the Calculation schema and schema groups together for
Purchase Order functioning as shown in below figure.
74
Referring the above Configurations, updating the flow chart we have
Vendor Schema Group

Calculation CP = 100455

CCP001 Schema Group
CCP1= 1000
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ii. Condition Types – Calculation Schema:
Condition Type Calculation

Schema
Access Sequence
Condition Condition Condition

Table 1 Table 2 Table 3
Flow Chart for Condition Type – Calculation Schema
Previous topic we saw the Schema Group is assigned to the Calculation schema, in
this topic we will see the Calculation Type assigned to Calculation Schema. Also we
will assign the condition table to Access Sequence & access sequence to condition
type.
76
Step 1: Maintain Condition Table
It’s a table where we can save all the fields with combination for individual condition
record/ Value.
Note: We can create the Condition Table from 501 to 999 as before 501 uses by SAP
system.
The above figure shows the creation of Condition tables where in right hand consist of
field catalog, in which the selected field from the field catalog comes in left hand side.
Hence if we save this Condition table it takes the table number as 605 as shown in
figure.
77
Step 2: Define Access Sequences
It searches the condition record for condition types from conditions table.
We can set the priority from which the condition record/Value should from its
Condition Tables.
We can create the new Access Sequence by clicking on new entries/ copying from
existing and then we can give the Condition table as per our priority to pick the
condition record/ values.
78
In this Example we will add the Condition table & their fields in the existing access
sequence.
I.e. we will add Condition Table 968 in the Access sequence PB01.
From the above Figure Access sequence PB01 has 6condition table, the priority for
Gross Price Value will be given from top to bottom as per mention serial number
i.e. Starts from No.5 Contract Item, No.10 Material Info Record (Plant-Specific),
No.20 Material Info Record,…………..so on.
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From the above example we now can have a flow chart for Access Sequence
and Condition table for Gross Price are as fallow:
Access Sequence PB01
Condition Condition Condition Condition Condition Condition

Table 16 Table 17 Table 18 Table 25 Table 28 Table 968
Flow Chart for Access

Sequence
Where,
Condition Table 16 = Contract Item
Condition Table 17 = Material Info Record (Plant-Specific)
Condition Table 18 = Material Info Record
Condition Table 25 = Info Record for Non Stock Material (Plant-Specific)
Condition Table 28 = Info Record for Non Stock Material
Condition Table 968 = Vendor/Material/Plant
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Step 3: Define Condition Types.
It is the specific feature of daily activities in a system & used for different types of
charges like Gross Price, discount, surcharge, freight etc.
As per our example we are taken gross price for customization.
We can have our own condition type by creating new entries or copying from other as
per business requirement, In our case we are using the standard Condition Type for
Gross price i.e. PB00
81
Access Sequence is assigned to Condition type.
From the above figure we observe that Condition type PB00 (Gross Price) is assigned
to the Access Sequence PB01.
82
Step 4: Creating Condition Record/Value for Condition Table
Using T Code: MEK1
T Code: MEK1 menu path

Logistics → Materials Management → Purchasing → Master Data → Conditions →
Other → Create
We created a new condition table 968; now let us put the condition values for
condition type PB00
The above figure gives the Condition Type – Condition table option to enter the value
which is stored in the access Sequence as we have seen earlier.
83
We will give the Condition Value to our new created Condition Table.
Condition records saved
Condition Values are maintained as per our fields selected in the Condition table as
shown in the above figure.
Referring to above figure we created the Condition value for Vendor/Material/Plant

combination where Price is given as 105 INR per Kg.
Note: We can assign the Condition value in Condition table fields only when the
Condition Type is assigned with the Access Sequence.
84
Step 5: Define calculation Schema (Condition Type – Access Sequence)
Here we maintain sequence for the pricing calculation like Gross price, Discount etc.
We maintain here the calculation for all condition type & group together all required
condition types for our pricing procedure.
Below figure we can see PB00 is maintained.
Note: Conditions inside a calculation scheme are organized using steps. The SAP
system will perform pricing for purchasing documents according to the steps
numbers. First, the pricing condition from Step 1 with Counter 1 will be calculated
and displayed. Then, Step 1 with Counter 2 and so on.
The Column “From” & “To” represents the dependent values for that table
E.g. in RA01 discount % depend on PB00 Gross price to calculate the value. Similarly
“to” table can use to set the Range.
We can set values for Calculation Schema manually (Manual Input), required
(Maintain the Value) or statistical (act like neutral independent of value).
“Acctkey” column can be used to set the G/L account for specific condition type using
the OBYC configuration if required.
85
From the above Customization we obtain the flow chart for Gross price as:
Vendor Schema Group

Condition Type
PB00 Schema
CCP001 Purchase Org.
Schema Group
CCP1= 1000
Access Sequence PB01
Condition Condition Condition Condition Condition Condition

Table 16 Table 17 Table 18 Table 25 Table 28 Table 968
Flow Chart for Pricing

Procedure
Note: We put green color in Condition Table 17 & 968 because we maintain the price
value (17 – Purchase Info Record in Master data, 968 – Price Maintained in Condition
Record).
86
Now we will create the PO using the Vendor & Purchase Organization
combination & observe the Pricing Procedure as per our customization.
The Pricing of the material can be seen in the item level Condition type then go to the
analysis tab as shown in below figure.
87
In the Pricing Analysis we observe that
The Calculation Schema CCP001, Condition Type PB00 and the Condition value for
Gross price triggered as done in customization.
In the above Analysis pricing figure we observe the element maintain as per the
sequence & respective price found in the Material info record (Plant-specific).
Why is doesn’t pull the value for Condition table no.968?

We had also maintained the Condition Value for our newly created table 968 in the
respective condition record but it didn’t pull this value because Access sequence find
the price as per the priority list maintain in it, When it finds the proper condition
value it returns the value to condition type and does not move further & condition
type to calculation schema.
Hence, as per the Priority given it found value in Condition Table 17 first in which
Material info record was maintained for the material.
88
Let us see the execution of pricing Procedure of Purchase order in above example
using the flowchart.
Vendor Schema Group

Condition Type
PB00 Schema
CCP001 Purchase Org.
Schema Group
CCP1= 1000
Find Gross Price
Price Found (Info

Record)
Access Sequence
PB01
Condition Condition
Table 16 Table 17
Price Picking Priority

of Access Sequence
Flowchart for Pricing Procedure
The PB01 searched the gross price as per the sequence where it didn’t find the price
in contract item (Condition table 16) moved to next sequence where the price is
maintained in material info record. The Gross price returns the value to condition
type and does not move further & condition type to calculation schema.
Therefore, price in Condition Table 968 not taken.
89
Note:
• Let us take an example for better understanding if we want any additional

Condition Type:
Suppose we need freight charge to be maintained for lot pieces in PO then following
steps can be done.
1. Search for the Condition Type – CUFR

2. Assign the Condition type CUFR to Access Sequence e.g. 0002
3. Maintain the new Condition table in access sequence
E.g. Condition Table – 044 (for Vendor)
4. Using T code MEK1 enter the condition value (Price for pieces) for
Condition Table i.e. 044 ( for Vendor).
5. Assign the Condition Types to Calculation Schema. E.g. CUFR to RM0000
6. Assign Vendor & Purchase Organization schema group to Calculation
Schema.
7. Create the PO then the value will be trigger in the condition type of item
level.
• Condition Value is necessary to trigger the price in the condition type.
Summary Recap: To learn about the Pricing Procedure in Purchase order, we

created the new Condition table & assigned the value in its field & observed from
which price is triggered from Condition table. Also we saw Customization of the
Pricing Procedure.
90
Day 8:
Special Procurement:
In Standard procurement process, we buy the material from the vendors and after
production process we deliver it to customer. Once deliver is done then goods
belongs to the Customer.
In case of special procurement process, the goods are not necessarily delivered from
the vendor to the customers.
The following are the Special Procurement used in Material Management module:
• Consignment
• Subcontracting
• Returnable Transport Packaging
• Pipeline Handling
• Stock Transfer Order
Consignment:
In this type of procurement the goods procured are still in vendors ownership, but
the company is keeping the material on stock and able to sell it directly where goods
become the property of our company only in case of consuming.
Goods Receipt for Vendor

Consignment Goods - MIGO
Warehouse Consignment
Stock
Stock Transfer to Store Transfer posting to own stock

consignment Stock (Payment) – MB1B if some
process to be done in-house.
Sales from Consignment Stock

(Payment) Transfer to Store for Sales
Consignment flow chart
-Where Store is handled by Sales Organization of the Company.
91
To create the Consignment Process following steps involved as follows:
1. Create Purchase info record for Vendor/Material combination – ME11

(We have to create material master in MRP2 special procure type – optional)
2. Create PO Item Category K – ME21N
3. Post Goods Receipt in MIGO Transaction.
Referring the flow chart after this step we have two options either sale from
consignment stock or Transfer Posting to own stock.
If we want to transfer posting to own stock then we have to proceed by
4. Transfer Posting from Consignment to own Stock – MB1B
5. Create Invoice using MRKO Transaction.
Step 1: Create Purchase Info Record

T Code: ME11
Create the Consignment type info record as shown in above & below figure where we
maintained the price of the material.
Note: Always mention the Tax Code in Purchase Info Record
92
Step 2: Create Consignment PO

T Code: ME21N
As Shown in the below figure create the PO & select the item Category as
Consignment type “K”.
93
Step 3: Post the Goods Receipt

T Code: MIGO
94
As we observe in above figure the Goods Receipt the movement type as 101K.
Now we will see the material in stock overview using T code: MMBE
We observe in the below figure that the stock is under the Vendor Consignment of
Quantity 12000Kg is added.
As per the requirement of the Organization we can either transfer the material from
warehouse to store & sale it directly by Sales Organization or we can convert the
material into the own stock & Payment is done simultaneously, Normally we convert
to own stock if any production process is to be done.
For the above Example we are assuming that the material is require to undergo some
in-house, hence we will convert the consignment to own stock as shown in the flow
chart.
95
Step 4: Transfer Posting Consignment to own Stock
T Code: MB1B
Note: We can also do Transfer posting from T Code: MIGO.
As we are Transfer Posting Consignment to own it is given by movement type as

411K as shown in the above figure
96
Document 4900003155 posted
We have convert 8000kg to own stock from Consignment Stock. So let’s observe the
stock overview of the Material using T Code MMBE
We observe 8000kg is converted into the unrestricted stock from vendor consignment
to storage location 0001.
Step 5: Create Invoice

T Code: MRKO
We are not creating an invoice using MIRO transaction for consignment goods.
Instead, liabilities are settled in MRKO transaction for the appropriate period.
Steps to execute MRKO
97
1) Enter the Company Code, Vendor/ Plant and tick display & withdrawal not
settle option. Click on Execute this will display the Info Status.
2) Go back to initial screen choose settle instead of display & Click on Execute.
3) Once again go back to and choose display document, and choose to see settled
withdrawal. You can see the status is now settled
98
Alternative Step 4: Transfer Posting Using MIGO
We will Transfer Consignment to own stock of 2000kg & observe the output.
Click on the FI Document – Account entries & observe the document for account entries.
99
Accounting Entries for Consignment:
In Consignment we observe that in step 3 posting the Goods Receipt we does not
have any accounting entries as we are not paying the vendor at that time.
While in other case when we transfer the Consignment stock to own stock (Step 4)
we have to pay the vendor for respective stock then we have the following entries in
system as observed in above figure.
For Accounting lets understand term transaction key.
Transaction Key:
The ‘Transaction Keys’ are pre-defined in the system to enable transaction postings in
Inventory Management and Accounting (Invoice Verification). For each of the
movement types in MM, there is a value string that stores these possible
transactions.
The Below Account entries generated when we pay the vendor for consignment stock
I.e. Transfer posting from Consignment to own with movement type 411K.
Transaction MIGO MRKO Payment

Key (Goods (Invoice
KON Credit (-) Debit (+)
BSX Debit (+)
KBS Credit (-) Debit (+)
Where,
KON – Consignment Payable
BSX – Inventory
KBS – Vendor Account.
The outcome is debit to Vendor Account & Credit to Bank account.
Note: If any price difference seen in Info record & Standard price (Material master)
then Transaction Key AKO will generate.
The Complete detail will be seen in Account determination & Invoice Verification.
(Refer Page No.168 for Automatic Account determination & Page No. 192 for invoice
verification)
100
Day9:
Subcontracting:
In subcontracting, you give components to a vendor from which a product is

produced. The product is then ordered by your company through a purchase order.
The components required by the vendor to manufacture the ordered product are
imported in the purchase order through the BoM (Bill of Materials), and they are
provided to the vendor. After the contractor has produced the finished product, we
can post the goods receipt.
Steps to perform subcontracting:

1. Create Subcontracting info record (optional) – ME11
& Create BOM – CS01
2. Create Subcontracting PO (Item category L) – ME21N
3. Create transfer posting to issue the Sub components – ME2O
4. Goods Receipt for finished product – MIGO
5. Invoice Receipt for the services performed – MIRO
Step 1: Create BOM for Assembly & Child Part

T Code: CS01
101
As per the above figure 3839 – Magnetic Plug & 3044 – Breather Cap are the child
part for 10015048 – Oil Drain Plug, hence we can represent it by flow chart.
To complete the assembly we require the one each child part to complete.
Creating BOM for material 10015048
Drain Plug
Part No.10015048
Magnetic Plug Magnet

Part No.3839 Part No.3840
102
Step 2: Create Subcontracting PO (Item category L)

T Code: ME21N
Note: Components should be entered manually for first procurement after that it will
take automatic.
The PO is created for assemble part 10015048 & Child part BOM is also exploded as
shown in above figure.
103
Step 3: Create Transfer Posting to issue Sub Component
T Code: ME2O / MIGO
104
In this step we provide the child part to vendor for assembly purpose where we
observe in the above figure that stock is already transfer to the vendor.
Now we will observe the movement type for the for the sub assembly part which
provided to the vendor using T Code: MB51
105
We observe the movement type taken by the Sub assembly part as 541 (issuing
goods to vendor) as shown in above figure.
Step 4: Goods Receipt for finished product:

T Code: MIGO
As we observe in the above figure the movement type taken as the goods receipt is
done as fallows
106
Oil Drain Plug (Assembly part) – 101+
Plug & Magnet (Child Part) – 543- (Consumption of material provided to vendor)
In Stock Overview (T Code: MMBE) for Assembly part no.10015048 1000nos posted
to unrestricted stock as we observe in below figure
107
Step 5: Invoice Receipt for Service performed
T Code: MIRO & MIR4 (to display the Invoice document)
As we observe in above figure only Transaction Key KBS - & WRX + posted.
Note:
Problem: Suppose we have a scenario such that in Subcontracting process we had

given raw material A of 100 kg to make finish product B, But when the Vendor
Supply the Product B it consumes 95kg and remaining 5kg occur as rejection from
the vendor. The 5kg rejected material can be sent to scrap, so how to manage in the
system?
Solution:
While Creating a BOM for the Finished Material B, maintain the Scrap Quantity
Material C as a negative in the component list.
As a result while doing the GR for the finished material B in MIGO, the scrap material
C will be generated as -5kg & movement type as 545 O+ (This will make the material
available in material provided to vendor stock)
Then do the GR with 542 movement type (Reversal of 541- goods issue movement
type) to get the scrap material into plant material.
108
Accounting Entries for Subcontracting:
Accounting entries will be posted at the time of Goods Receipt.

As we seen in the above example the finished goods will be received with 101 and
the component will be consumed with 543 movement type.
Referring to previous example let see the accounting document in recent GR no.1207
as this was assembly process we have two account entries for Child part and the
assembly part as shown in below screenshot for MIGO.
109
The above figure shows the child part accounting entry with their transaction key and
their respective amount.
The Above figure represents the accounting entries of the finished assembly part with
their transaction key and their respective amount.
Let a summary of transaction key after each process of above example
Trans. Movement Description MIGO MRKO Payment

Key Type (Goods (Invoice
BSX 541 Unfinished Credit (-)
(Issuing products
GBB goods to Raw Material Debit (+)
(VBO) Vendor for Consumption
child part) (Plug)
BSX Unfinished Credit(-)
products
GBB Raw Material Debit(+)
(VBO) Consumption
(Magnet)
BSX 101 & 543 Finished goods Debit(+)
(Goods inventory
WRX Receipt for GR/IR Credit(-) Debit(+)
BSV finish Change in Credit(-)
product) subcontracting
Stock
FRL Subcontracting Debit(+)
Charges
KBS Vendor account Credit(-) Debit(+)
Bank Bank account Credit(-)
a/c
110
Day 10:
Returnable Transport Packaging (RTP):
It is the process in which the user returns the packaging material to vendor once
utilizes the material through the transporting.
The material type for Returnable Packaging is LEIH
Steps to create Returnable Transport Packaging (RTP)-

1. Create Material for Returnable Packaging - MM01
2. Create PO for Material which Returnable Packing material to be used – ME21N
3. Create Goods Receipt for Material with including Returnable packaging – MIGO
4. Return the Packaging material back to vendor - MIGO
5. Invoice verification – MIRO
Scenario:
We will order SS-410 coil of 500kg, in which is sent through the pallets of capacity of
20kg each i.e. 25pallets X 20kg = 500kg. After receiving the material we will return
the pallets to the respective vendor.
Here Pallets = Returnable Transport Packaging
Steps to Create RTP process:
Step 1: Create Material for RTP of material type LEIH (Returnable

Packaging)
T Code: MM01
Material PALLETS created
111
Step 2: Create PO for Material which Returnable Packing material to be used

T Code: ME21N
112
Step 3: Create Goods Receipt for received material from Vendor with
Returnable Packaging material - MIGO

As shown in the above figure we posted the GR for SS-410 of 500kg material then by
clicking on Transport equipment (highlighted in red mark) we get to add the
packaging material which is dispatched by the vendor with the ordered material.
The Packaging Material takes the movement type 501 M (GI receipt to RTP)
Considering the above example, The Vendor 100537 sent SS-410 Coil of 500kg with
loading 20kg each in one pallet which makes 25 no. of pallet.
Note: The RTP (Returnable Transport Packaging) is not included in PO because we

are not paying for this material as we not consuming, which later are return to the
Vendor.
After the GR the Packaging material is stored in storage location by RT packaging as

shown in below figure (We can view by T Code: MMBE)
113
Step 4: Return the Packing material back to Vendor
As we are not paying for the packaging material to vendor, hence it must be return
back to the respective vendor
114
Referring the above figure in order to return the Packaging material to vendor
Go to “Goods receipt – other” option & select the movement type as 502 M.
Fill the item level detail such as Material, Quantity, Where & Partner (Vendor).
Where, 502 M – Reverse receipt to RTP
Now the Packaging material is returned to the vendor we see through the Stock
overview by T Code: MMBE
115
The above figure confirms all the Packaging material is return to vendors.
Hence, there will not be any accounting entries as there is no payment.
Step 5: Invoice Verification

T Code: MIRO
The Payment will be only done for the material & not for RTP
Now we can see the Invoice Document entries using T Code: MIR4
The Accounting entries is seen in the below figure for Invoice Verification (MIRO).
116
Accounting Entries for Returnable Transport Packaging (RTP):
From the Accounting view for MIGO, MIRO & the further we get the table as:
The Detail will be seen in Account Determination & Invoice Verification.
Transaction Description MIGO MRKO Payment

Key (Goods (Invoice
WRX GR/IR Clearing Credit (-) Debit (+)
BSX Inventory Posting Debit (+)
KBS Vendor Account Credit (-) Debit (+)
Pipeline Handling:
In pipeline handling, the company does not need to order or store the material
concerned. It is ready available as and when required via a pipeline (e.g. oil or
water), or some other type of cable (e.g. electricity). Consumption of the material is
settled with the vendor on a regular basis.
Steps to create the Pipeline

1. Create a Material Master for Pipeline Material Type (PIPE) – MM01
2. Create PIR of Category Pipeline (Provided Vendor) – ME11
3. Create Goods Issue Using Movement Type 201 P – MIGO
4. Create Invoice - MRKO
Step 1: Create Material Master for Pipeline Material type

T Code: MM01
117
Step 2: Create PIR of category pipeline
T Code: ME11
Purchasing info record 5300007584 1000 P 1000 created
118
Step 3: Create Goods Issue using Movement type 201 P
T Code: MIGO
As highlighted in the above figure select the movement type as 201 P (Consumption
for cost center from pipeline) and enter the item level entries.
Now we will observe the accounting entries for above GR.
119
Step 4: Create Invoice
T Code: MRKO
120
Now we will observe the accounting entries for Invoice Using T Code: MIR4
Note: In the above figure VST – Input tax came as we maintained V1 as tax code
which is 15%.
The Transaction key KBS which is debited in invoice is the transaction key KON of
the GR which was credited.
The Account Summary table for Pipeline after payment we have
Transaction Description MIGO MRKO Payment

Key (Goods (Invoice
KON Accounts Credit (-) Debit (+)
(KBS – Post Payable
Invoice)
GBB Raw material Debit (+)
Consumption
KBS Vendor account Credit (-) Debit (+)
121
Day 11:
Stock Transport Order:
In Stock Transfer process, Goods are supplied and Procured within a company.
One Plant (issuing plant) orders the goods from another plant (receiving
plant).
For STO we are using “UB” as a document type in PO
We can do supply the goods from one plant to another plant two method
namely by
1) Transfer posting of material plant to plant by one-step/ two-step
method. (Refer Page No.146 for Transfer posting details)
2) Stock Transfer between two plants with & without delivery.
Let find the difference between STO & Transfer Posting:

Stock Transfer Order Transfer Posting
1. This process is done through T 1. This Process is done through
Code: ME21N by selecting the MIGO
Document type as UB.
2. Separate Pricing procedure is 2. We cannot maintain any

available for STO. conditions.
3. Through STO delivery & billing 3. We can only transfer the goods.
can be done.
4. This process is generally 4. This process is generally

preferred when client has plants preferred when plants are in
in different cities or states and same city or client doesn’t want
when client requires to monitor to monitor freight detail etc.
details like tax related ,
conditions related etc.
Now we will see the example for Stock Transport Order (STO) for Delivery &
without delivery from plant to plant with same company code (Intra STO)
➢ Steps to create STO (with delivery) plant to plant having same
company code.
1. Create SD-MM configuration for respective STO (SD team) - SPRO

2. Create PO for STO (Doc Ty – UB) – ME21N
3. Create Outbound delivery(OBD) for supplying plant – VL10D (SD Team)
4. Create Post Goods Issue (PGI) for supplying plant – VL02N (SD Team)
5. Post Goods Receipt for receiving plant - MIGO
122
Step 1: Create SD-MM configuration for respective STO
T Code: SPRO
This is done by the sales & distribution team for the respective supplying plant
& the receiving plant.
As we observe in the below figure the configuration is done in the for STO in
the Purchasing – Purchase Order view, the highlighted points is set by the SD
team which contains data like Shipping Data, Delivery Type Etc.
Step 2: Create PO for STO Doc type.

T Code: ME21N
Before creating the PO let’s get some idea about the example what we are
going to execute.
Example:
We are transferring the material INTRASTOMATERIAL01 from plant 1000 to
Plant 12000 using STO (PO Doc Type – UB).
Hence we have the data as,
Material = INTRASTOMATERIAL01
Supplying Plant = 1000
123
Receiving Plant = 1200
Qty. to Transfer = 70nos.
Now, let the Stock Overview of the material – T Code – MMBE
As we observe in above we have 250nos in Plant 1000 Hamburg & 130nos in Plant
1200 Dresden.
We are now going to transfer 70nos from plant 1000 to Plant 1200, So we will make
the PO for STO Doc type – UB.
Below figure shows the STO doc type PO in which Shipping Tab from the Item level
should be required mandatory for the STO procurement type. If it doesn’t appear
then we have to contact Sales and Distribution team to debug the error in
configuration.
124
S.T.O created under the number 4500018592
Step 3: Create outbound delivery (OBD) for supplying plant

T Code: VL10D
This Step is done by the Sales & Distribution team in which they create outbound
delivery process.
125
As per the above figure for OBD we have to flag the mention material area and click
on the background we get the following output below which shows the green
indicator which means that OBD is posted.
Step 4: Create Post Goods Issue (PGI) for supplying plant

T Code: VL02N
This step is also done by the Sales & distribution team where the option to pick the
material fully or partially is available. This transaction also manage the if delivery qty.
is more than our stock qty.
The Movement type takes as 647 while doing the PGI (Post Goods Issue)
126
Replenishment dlv. 80017680 has been saved
Step 5: Post Goods Receipt for receiving plant

T Code: MIGO
After receiving the material for the supplying plant we post the goods receipt
as 101 movement type.
The Below figure shows that material INTRASTOMATERIAL01 is transferred

from Plant Hamburg to Plant Dresden to their respective location.
127
128
The above figure shows the stock overview where the changes for the material
are highlighted as per the STO process.
No accounting entries are created only stock is credited & debited

respectively i.e. BSX as shown in above figure.
129
Note:
Steps to Create STO for without delivery:
1) Create MM-SD configuration for respective STO - SPRO
2) Create STO – PO of doc type UB for supplying plant – ME21N
3) Create Goods Issue for 351- movement type for supplying plant - MIGO
4) Post Goods Receipt for receiving Plant – MIGO
There are no billings involved as both Supplying and receiving plant belongs to
same company code. The Billing only comes when we are transferring the
goods with different company codes.
Summary Recap: In this Session we came across different types of special

procurement and their accounting entries as per the movement types.
We also saw the various transaction key as per the movement type is posted
which we will see in the Automatic Account determination & Invoice
Verification topic.
130
Day 12:
Service Management:
Besides procurement of goods, an organization may occasionally require some kind of services. Such
services include small maintenance tasks such as changing the lights, painting, and housekeeping. These
services are carried out by external contractors and hence the whole process of procurement of services is
known as service management.
Service management deals with the following terms−
• Service Master Record
• Service Purchase Order
• Service Entry Sheet
131
Service Master Record:
T code – AC03.
Service Purchase Order:

T Code – ME21N.
Note: Put Validity Period in additional data tab & put Delivery date as end date of validity.
For Service select
Account assignment category – K
Item category – D
132
Service Entry sheet:

T Code: ML81N
System stores the service that has been procured as a record in a sheet called as service entry sheet.
Instead of Goods Receipt we have this service entry sheet
Entry sheet 100000556 saved
133
As in below image we can see the service entry in the PO history.
Summary Recap:
We saw the Service related activity for the planned type where we maintain new master & the
entry sheet is made as per the PO made.
134
Day 13:
Inventory Management:
The Inventory Management deals with the management of stock, either value
(Accounting) or quantity basis. It includes Planning, entry and keeping record of all
the movements of goods.
Goods movement creates a document that updates all the stock quantity and value in
the in the inventory that is known as material document.
Material Document shows the movement type & accounting document describes the
type of stock posting in the inventory.
We have the following types Inventory Management where all the transaction done
through MIGO
1. Goods Receipt
2. Goods Issue
3. Transfer Posting
We will take an example of some movement type for different Inventory Management
and observe the Stock overview & respective accounting entries as per the
movement type.
1. Goods Receipt:
T Code: MIGO
It is the type of inventory where the material is receiving from the vendor through
any source to a plant as new quantity.
Now we will go through some movement type for goods receipt
Exercise:
In order to understand the various movement types we will procure the material with
the vendor in the system with some of the movement type in Goods receipt.
Material – 4196
Vendor - 100537
135
❖ 101 – Goods receive through Purchase Order.
Let’s observe the Stock Overview of material 4196 before Goods Receipt as 101
movement type
We see the stock is in On-Order Stock of 5000nos before Goods receipt that means
the material is been ordered.
As the material received then we post the goods receipt which takes the movement
type as 101 as shown in above figure.
136
Accounting entries for movement type 01 as shown below
Stock changed from on-order stock to unrestricted as shown in below in which can be
used in further process.
137
❖ 102 – Reversal of GR.
Referring the above example we can reverse the Goods receipt by movement type
102.
Suppose let reverse the entry for 2000nos of 5000nos.
After reversing the 2000nos from 5000nos means 2000nos quantity is converted to
on order stock as per our mention PO.
138
The account entries will be reversed as we reversed the GR as shown in below figure.
As per our two movement type we have 2000nos which is not accepted as we
reversed the GR, means we have directly return the stock to the vendor & the vendor
will have to dispatch another 2000nos to complete the PO order.
The summary for account entries for above movement type as
Transaction Key 101 – GR goods receipt 102 – reversal of GR

BSX Debit(+) Credit(-)
WRX Credit(-) Debit(+)
Note: Instead of 102 movement type is normally done when some error is done
while posting the GR. In case if we have to return some material due to some quality
issue to vendor we can have 122 movement type.
139
Origin Acceptance:
Acceptance at origin allows acceptance of goods at the supplier facility before

shipment to destination.
The Purchaser acknowledges acceptance but does not perform the final goods receipt
until the goods arrive at the final destination.
The system shows that the items are IN TRANSIT to their final destination and
prevents them from being available for use.
When goods are arrived in respective destination after the final goods receipt is done,
the item changes the status IN TRANSIT to Available for use.
Example:
We will take same example & will executive in the system
It is the two-step process in which the movement is given by 107 & 109
Where,
107 – Goods receipt to valuated blocked stock.
109 – Goods receipt from valuated blocked stock.
Now the PO has made for 10000nos to vendor & will accept the material at origin
using movement type 107 in Goods Receipt (MIGO)
140
Now we will see the Stock overview of the material using T Code: MMBE
We observe that the stock is placed in On-order as well as in transit stock where the
ownership is already taken by the purchaser.
The accounting entries generated are same as that of the goods receipt done for
unrestricted stock.
141
After receiving the respective stock we have to do good receipt with movement type
as 109 (Goods receipt from valuated blocked stock)
As we observe in above figure 10000nos is added to the unrestricted stock.

There will not be any accounting entries as payment done before in 107 movement
type.
142
Note: We saw the Goods receipt example in RTP process where we used 501 & 502
movement type. You refer Page No. 111 for more details.
In Some case we get some quantity more as compare to PO quantity in order to put
this quantity in system we can maintain over tolerance (for extra material) or under
tolerance (for less material) in delivery tab present in item level as shown in below
figure.
Day 14:
2. Goods Issue:
T Code: MIGO
Goods Issue is the physical issue of the goods or material from the warehouse. Goods
issue posting results in a decrease in stock in the warehouse.
Now we have gone through the Pipeline procurement where we used movement type
201 P - Consumption for cost center from pipeline.
For pipeline procurement refer Page No. 117 for more detail.
In subcontracting procurement we supplied the sub assembly parts to the vendors

using 541 movement type.
For Subcontracting procurement for goods issue refer Page No. 104 for more detail.
Also in Stock Transfer Order (STO) with delivery type, we posted Goods Issue using
VL02N for Outbound delivery which takes 647 movement type.
For STO refer Page No. 126 for more detail.
Now let us some Goods issue movement type, their applications and respective
accounting entries.
143
❖ 551 – Goods Issue for Scrapping
In this movement type we will scrap the rejected material from the unrestricted
stock.
In above figure we can see that we have rejected 1000nos from the unrestricted
stock which earlier was 13000nos now it will become 12000nos.
By using T Code: MMBE we can have Stock Overview for the above goods issue.
144
Accounting entries for above transaction is shown below
We observe that BSX is credited & GBB (Offset entry for inventory posting) is debited
when we scrap the material from the unrestricted stock.
The GL account for BSX – 79000 & GBB - 400020

Day 15:
3. Transfer Posting:
T Code: MIGO
Transfer posting deals with transferring of goods from one place to other for the
business requirements.
We have seen the transfer posting in Consignment Process in which we have

transferred the vendor owned stock to company (purchaser) own stock using
movement type 411 K
Refer Page No. 96 for consignment process for more details.
In this type of Inventory management we will go through the example such as

transfer posting from one plant to another plant by one step as well as two step
method. In the STO process which is similar to transfer process discussed the
difference between transfer posting & STO.
Refer Page No.122 for STO & Transfer Posting difference.
145
❖ 301 – Plant to Plant transfer in one step
The supplying plant will transfer the goods to receiving plant and posting goods
movement accordingly by supplying plant in one step.
We will take Material 4196 & transfer some quantity from plant 1000 to Plant 1100
Note: We have to ensure that the both transferring plants should have same master
data.
Before transferring the material to plant 1000 to 1100 lets us see the present stock in
both plants.
Plant 1000 has 12000nos & Plant 1100 has 4000nos.

We will transfer 3000nos from Plant 1000 to Plant 1100.
146
The Accounting Entries for this 301 movement type we get as
147
Where BSX is inventory posting which supplying plant gets credited & receiving plant
gets debited.
Here Transaction Key AUM is generated due to the price difference occurred in
material master of both the plants
Let us confirm the stock transferred by T Code: MMBE
We observe the stock is transferred to Plant 1000 to Plant 1100.
148
❖ 303 & 305 – Plant to Plant transfer in two step
Where
303 – Transfer posting plant to plant - Remove from Storage
305 – Transfer posting plant to plant - Place in storage
In this type the Supplying plant will transfer the goods to the receiving plant in which
they transferred get posted in Transit in order stock and when the receiving plant
receives the goods in plant then receiver will post the other movement to move from
in transit stock to plant stock.
Supplying Plant will transfer from 303 movement type

Receiving Plant will receive from 305 movement type
We will Transfer 2000nos from Plant 1000 to Plant 1100 in two steps.
Let us see the stock overview before transferring the Stock using T Code: MMBE
We will transfer 2000nos from plant 1000 using movement type 303
149
As we observe in above figure the stock is stored in the Transit stock of 2000nos in
the stock overview.
150
Accounting Entries is same as we observed in one step transfer posting as shown
below
Now as per the two step transfer posting once they seen the stock in their they will
convert Transit to unrestricted stock using 305 movement type in MIGO (Goods
Receipt)
151
The Transit Stock gets transfer to the receiving plant storage location when we use
305 movement type as shown in below figure where 2000nos (7000 + 2000) is
already transfer to Plant 1100 & 0001 storage location from transit stock.
There will not accounting entries in movement type 305 as it is already transfer
through 303 movement type.
Note: We can do the transfer posting from one Storage location to another Storage
location using 311 – one Step & 313-315 – Two steps. The process is similar to the
above plant to plant transfer.
Configuration Path for GR, GI & TP as shown in below figure
152
Movement Types:
Goods Movement Type is 3 digital identifying the type of Good movement.

The movement type is very important, actually it controls the adjustment of
inventories, and GL related account and even the screen layout for MIGO transaction.
We had gone through so many movement types in various examples which are
common in the system.
The reference table for movement is T156 (SE16N table – will discuss later)
As movement type is the 3 digit numeric number we will make list of some
movement type as per series & their application
1XX Series for Goods Receipt:
Note: Anything Cancellation will be +1 in most cases (e.g. for 101 cancellation is 101
+ 1 = 102)
Movement Description
type
101 Goods receipt for Purchase Order
103 Goods receipt into GR blocked stock
105 Release from the GR blocked stock for the purchase order
107 Goods receipt to valuated blocked stock
109 Goods receipt from valuated blocked stock
122 Return deliveries to vendor
124 Return delivery to vendor from GR blocked stock
161 Returns for purchase order
2XX Series for Goods Issue:
type
201 Goods issue for a cost center
221 Goods issue for a project
251 Goods issue for sale (without sales order)
261 Goods issue for an order
281 Goods issue for a network
291 Goods issue for any account assignment
153
3XX Series for Transfer Posting:
type
301 Plant to plant transfer in one step

303 Transfer posting plant to plant - Remove from Storage
305 Transfer posting plant to plant - Place in storage
309 Transfer postings from material to material
311 Transfer of storage location to storage location in one step
313 Transfer of storage location to storage location in two steps : Remove
from Storage
315 Transfer of storage location to storage location in two steps : Place in
storage
321 Transfer of inspection stock : unrestricted-use stock
323 Transfer of storage location to storage location : inspection stock
325 Transfer of storage location to storage location : blocked stock
331 Sample from the inspection stock
333 Sample from the unrestricted-use stock
335 Sample from the blocked stock
341 Status change of a batch (unrestricted-use to restricted)
343 Transfer of blocked stock : unrestricted-use stock
349 Transfer of blocked stock : inspection stock
351 Goods issue for a stock transport order (without shipping)
4XX Series for Special Stock, Transfer Stock and Blocked Stock Return:
type
411 Transfer of special stock to own stock

413 Transfer posting to sales order stock
451 Returns from customer (without shipping)
453 Transfer of blocked stock returns to unrestricted-use stock
455 Returns stock transfer
457 Transfer of blocked stock returns to inspection stock
459 Transfer of blocked stock returns to blocked stock
154
5XX Series for Special GR/GI:
type
501 Goods receipt without purchase order : unrestricted-use stock

503 Goods receipt without purchase order : stock in quality inspection
505 Goods receipt without purchase order : blocked stock
521 Goods receipt without order : unrestricted-use stock
523 Goods receipt without order : inspection stock
525 Goods receipt without order : blocked stock
531 Goods receipt of by-products from order
541 Transfer of unrestricted-use stock to subcontracting stock
543 Consumption from subcontracting stock
545 Goods receipt of by-products from subcontracting
551 Scrapping from unrestricted-use stock
553 Scrapping from inspection stock
555 Scrapping from blocked stock
557 Issue from stock in transit (adjustment posting)
561 Initial entry of stock balances : unrestricted-use stock
563 Initial entry of stock balances : quality inspection
565 Initial entry of stock balances : blocked stock
6XX Series for Sales:
type
601 Goods issue for delivery

603 Goods issue for a stock transport order (shipping) with additional item
605 Goods receipt for a stock transport order (shipping) with additional item
641 Goods issue for a stock transport order (shipping)
643 Goods issue for a cross-company-code stock transport order
645 Goods issue for a cross-company-code stock transport order performed
in one step (shipping)
647 Goods issue for a stock transport order performed in one step
(shipping)
155
7XX Series for Physical Inventory: (Refer Page No.157 for details)
type
701 Goods receipt for unrestricted stock

702 Goods issue for unrestricted stock
703 Goods receipt for quality inspection stock
704 Goods issue for quality inspection stock
707 Goods receipt for blocked stock
708 Goods Issue for blocked stock
711 Inventory difference in unrestricted-use stock (LE-WM)
713 Inventory difference in quality inspection stock (MM-IM)
715 Inventory difference for returns
717 Inventory difference in blocked stock (LE-WM)
Summary Recap:
In this we came across various movement types and their application as well as
impact on the stock. In Inventory management there where different accounting
entries are been posted as per the movement type and their respective GL account is
also been posted.
156
Day 16:
Physical Inventory:
It is the process to map or to compare the system stock with the physical stock; this
process is performed in 4 different ways
1. Periodic Inventory
Most of the time companies use this kind of inventory. In most cases, it is done once
a year, and this kind of inventory is called annual physical inventory. That means that
material stock is counted once a year. Most of the times at the end of the year or
after the season end (in seasonal industries).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.
2. Continuous Inventory
All materials are counted at some point in the year, but that can be at any day
appointed for. So we can count some material in February, others in April and so on.
A single material can be counted on a single date. This type of inventory is mainly
utilized in warehouse management based warehouses, but it can be done in
inventory management too.
Note: In Continuous inventory we can inventory Unrestricted, Quality Inspection &
block stock types.
3. Cycle Counting
This type of inventory allows us to set a period for regular intervals for physical
inventory on the material level. So a fast moving and high value material can be
counted four times a year while slow moving and low value material can be counted
once a year. The indicator for this is set in material master in the Plant/Storage
Location 1 View.
The Cycle counting only supports unrestricted stock type.
4. Inventory Sampling
Only a number of randomly selected materials are counted on the balance sheet key
date, and if those materials show small enough differences, the other materials can
also be considered to have a correct stock level. Not really used that often, as it is
essentially an approximation, but in some cases it can be used if material and
warehouse structure imply that. High rate value items are normally considered.
157
Steps to perform Physical inventory:
1. Create Physical Inventory – MI01

Monitor Stock Overview - MMBE
2. Enter count for Physical Inventory – MI04
List of the Physical Inventory difference – MI20
3. Post Physical Inventory – MI07
Create Physical Enter Counting Post the

Inventory Result Differences
Document
MI04 - Execution MI07 – Post
MI01 - Preparation Processing
The above diagram represents the common steps for doing physical inventory.
Step 1: Create Physical Inventory

T Code: MI01
The above figure shows the initial screen of the physical inventory in which we have
to enter the Plant & storage location
Let us see the other option in the screen
158
Posting Block: We are marking posting block indicator such that there will be no
inventory postings done in SAP before completing this physical inventory for this
material.
If the physical inventory is taking 10 days, then up to 10 days there will be no
postings done in SAP.
Freeze book inventory: If we select this option, then system will allow for postings
in SAP, but the physical inventory number will be frozen or locked with that number
such that there will be no difference in number of counts.
Most of the companies will prefer this option because we don’t know how much time
it may take for counting.
Physical inventory document 100000170 created
When we click enter, the next screen shows the material need to be entered in which
the physical inventory is to be done (can enter as many as material) also we can
have the respective material stock type for Physical inventory as shown in the above
figure.
To understand the concept we will take two materials 4196 & 3147 of stock type as
unrestricted (refer above figure).
Using these materials we will do the further steps for physical Inventory.
Note: We can print the above physical inventory document to give the information to
the respective department about the physical inventory using T Code: MI21.
159
To Monitor Stock Overview – T Code: MMBE
Referring to the above figure we have Material 3147 = 20750KG & Material 4196 =
7000EA is present in unrestricted stock.
Note: This step is only used to see the stock overview; we calculate the stock
physically as per the department wise in the company.
160
Step 2: Enter count for physical inventory
T Code: MI04
Once we get the count from the warehouse person, then the count needs to be
entered in the system as per the material through MI04.
Update the physical inventory number and execute then it will show the material then
update the quantity in quantity field and save the screen.
The initial screen we have to enter the Document number & Fiscal year.
Note: By Maintaining the Variance in % will give the warning message of the
difference between the previous stock quantities and counted quantity.
E.g. if we maintain variance as 10% & we had 1000nos & we enter 1100 then it will
give warning message.
Count entered for phys. inv. doc. 100000170
161
As we enter the screen we have get the above screen in which have to enter the
inventory count of the material and save it.
To find List of the Physical Inventory difference - T Code: MI20
We can have a list of inventory difference
As we observe that there is difference in the inventory because we posted the exact
quantity as stock. If we satisfy with this data then we can go further and post the
physical inventory in next step or else we can recount the material and reenter the
count using MI05.
Step 3: Post Physical Inventory

T Code: MI07
Note: You can use the threshold value to enter the maximum allowed differences
value in local currency. If you don't want a limit leave this field blank. In order for
this to work, materials need to have the standard or variable price maintained.
162
Phys. inventory document 100000170 posted without differences
By above example there were not any difference found while inventory.
Scenario: Now in the next example we will have the inventory difference of the
above material and observe the inventory posting and their respective accounting
entries.
In this example the stock overview is same as there were no posting in previous due
to physical inventory.
Step 1: Create physical Inventory document (Preparation)

T Code: MI01
Physical inventory document 100000172 created
Step 2: Enter counting results (Execution)

T Code: MI04
Count entered for phys. inv. doc. 100000172
163
The Count we have entered is not exact as the present stock of the materials
Step 3: Post the differences

T Code: MI07
Diffs in phys. inv. doc. 100000172 posted with m. doc. 4900003303
While posting the Inventory we see the difference for material 3147 it is 250 kg short
whereas for material 4196 we get 1000nos more.
As the result the stock gets updated as per our posting difference for physical
inventory and respective goods receipt & goods issue is generated.
We can view this data and their respecting accounting entries using T Code: MB03
164
We Observe in above figure that the GR is posted for material 4196 material in which
we obtain 1000nos more, for material 3147 GI is posted as we got 250kg less.
The following table shows the movement type generated for other stock type due to
difference.
type
701 Goods receipt for unrestricted stock

702 Goods issue for unrestricted stock
703 Goods receipt for quality inspection stock
704 Goods issue for quality inspection stock
707 Goods receipt for blocked stock
708 Goods Issue for blocked stock
The Above figure shows the accounting entries generated due to physical inventory
difference in the stock where we see Inventory Posting BSX is credited as well as
debited for the respected material, GBB is the offsetting entries in the stock postings.
165
Note:
Path to Configure Physical Inventory
We can configure the physical inventory & can allot the number ranges as per the
business requirement.
For Cycle Counting:

The Material can be set such that it inventoried several times within a fiscal year. All
stock units are inventoried at least once a year.
Step 1: In configuration we can define a plant with Cycle counting and set the
number of physical inventories annually as per plant as shown in figure below
Where from below figure table,

Inventories per year – with the number of inventories per year, the system
calculates the number of workdays between the inventories (interval).
Float time – The time buffer is the time interval within which the inventory of a
stock unit must be executed.
Percentage of the total value – The cycle counting indicator is determined with an
ABCD analysis (56+28+14+2 = 100).
166
Step 2: In order to set material for cycle counting then we has to assign cycle
counting physical indicator to Material master as shown below.
As highlighted below from Plant data storage location 1 view select the indicator A B
C or D. If we flag the CC fixed indicator then cycle counting indicator will not change.
Summary Recap:
In this session we saw the various types of physical inventory process & its stock
posting difference in the material as per the inventory count.
167
Day 17:
Automatic Account Determination
All the procurement activities are done right from the material creation to PO
ordering, receiving material from GR etc. Once every process is done, we need to pay
to vendor from the respective department GL account and for that we cannot do
manually for all the material and it’s very hard to remember.
In Order to deal with this, SAP having a feature where it can recognize the respective
GL account automatically.
PO: - G/ L account comes automatically in account assignment - material & account
assignment category play main role.
Goods Movement: - G/L accounts come automatically – Material & Movement Type
play main role.
1. 2.
Material Material Valuation
Type Class Valuation Grouping Code
Movement
Type Account Category Valuation area (Plant)
Reference
3.
Company Code
Transaction
Key G/L account
(BSX, WRX)
Chart of account
Flow Chart for Automatic Account Determination
Let us divide the Automatic Account Determination process into 4 parts for better
understanding. (The first 3 parts are shown in diagram)
1. Material Type – Account Category Reference – Valuation Class

2. Valuation Grouping Code
3. Movement Type – Transaction Key
4. Automatic Posting – OBYC
168
Configuration Path for Account determination as shown in below figure:
Now we will go step by step to understand the process.
Step 1: Material Type – Account Category Reference – Valuation Class
1.
Material Valuation
Type Class
Account Category
Reference
169
As we know that the materials are of various materials types defined in our system,
in this step the material type is assigned through valuation classes through account
category reference. This makes to see relevant valuation classes of the material type
during creation of material but not all the list of valuation classes.
Scenario: We will take one material type as example and observe link to valuation
class through Account Category Reference
(We can create & assign the Valuation classes through AGR and give the respective
GL account with the help of FI person)
We will use Material type as HALB (Semi finished)

Note: Material Quantity/ Value updating is to be flagged mandatory for the
respective plant. If not then it will not update in the respective field which is not
flagged while doing GR. This can also done through T Code: OMS2
For Plant 1000 we flagged quantity/ value updating as shown in above figure.
Account Category Reference:
Account category reference acts as a mediator between the material type and
valuation class, where we will define the account category reference to create the
valuation class and assigning the material type to account category reference.
As per above mention configuration path go to Define Valuation classes then we can
enter the values for ACR & Valuation Class respectively as shown in below figure.
170
Here we defined the Account type Category for Material Type – HALB is 0008 as
shown in the below figure.
Valuation Class:
Valuation class is defined as per the number of material group in our organization.
Suppose if we have 6 material groups then we can have 6 valuation classes & each
valuation class will link to creation GL account.
171
As we observe in below figure that the valuation class 0790 & 2790 is linked through
the account category reference 0008.
The Valuation Class created with the link to ACR, hence ACR automatically set for
material type as shown in figure.
Note: The valuation class option will be seen in the material master accounting view
1 for respective material type as shown in below figure.
From below figure, we can see 6 valuation class been created where we selected
valuation class as 7900 as highlighted.
The 0790 & 2790 also there which we had seen in while creating valuation class
previously.
172
From The Above all the observed configuration and the values taken we have the
flowchart as:
Material Valuation
Type Class
HALB 7900
Account Category Reference

0008
173
Step 2: Valuation Grouping Code
Valuation area is normally taken as plant, in this step Plant, company code & Chart of
account is grouped together in single valuation grouping code.
Valuation Grouping Code
Valuation area (Plant)
Company Code
Chart of account
The Plants will combine and create a valuation grouping code which having same
attributes with same account determination, this will make all those plants in one
grouping code this results in reduce the number of entries in OBYC setting (will see in
4th part) while assigning the GL account.
Therefore the plant will trigger same set of GL accounts with the help of chart of
accounts for the entire group as shown in diagram.
In case if we require separate GL account system, then we need to create a new
valuation grouping code, means two grouping codes for same chart of accounts with
different GL accounts in OBYC.
The number of GL account is decided by the FI team.
Note: Before going to valuation grouping code we have to make ensure that
valuation group code is active in define valuation control.
174
In order to create a valuation grouping code then go to Group Together valuation
areas as shown below
After selecting the above path give the respective valuation grouping code for plant
and company code as shown below
In above figure we can see Plant 1000 Company Code 1000 is grouped together with
Valuation grouping code as 0001 where INT is the chart of accounts (Decided by FI
team)
175
Hence, putting the above in the flow chart from above observation we get,
Valuation Grouping Code

0001
Valuation area (Plant)

1000
Company Code
1000
Chart of account
INT
Step 3: Movement Type – Transaction Key
No customization is done as these settings are standard and organization will follow
the same settings as system recommended.
GL accounts are triggered while doing MIGO, where the movement type is linked with
certain general modifier and Transaction event key.
General Modifier are only allowed for Transaction Key GBB and PRD.
The general modifier will come and hit the GL accounts for procurement process like
Sub-Contracting, Consignment, Pipeline, Goods Transfer etc.
Examples of General modifier are VBR, VNG, BSA and VBO etc.
Transaction Event Key:
As we seen in our pervious topics we have seen most common transaction key were
BSX, WRX, PRD & GBB.
Where,
BSX – It is use for the inventory posting for addition & subtraction of the stock where
respective GL account will pick.
WRX- It is use for GR/IR clearing account after doing the normal inventory addition
and subtraction the vendor should paid.
176
PRD – This key will be posted when system determine the price difference compare
to the material master if we maintain as standard price control.
GBB - Where we have many procurement types like sub-contracting, Consignment,

Pipeline, Goods transfer- there we have different modifiers should effect because we
may pay or not because few are internal transfers and some should be like
consignment and sub-contracting and few are goods issue to cost center- this may be
different type of stock gets credited. For this we have modifiers linked to movement
types and each procurement type we have different movement types and its linked to
account determination, so that respective modifier will affect.
As we see in the above the values are already defined in the standard system for
each movement type transaction key and account modifier is assigned where no any
changes are done in the standard system.
177
We can have the flow chart for the movement type as (defined in System)
Movement
Type
101
Transaction
Key
BSX, WRX,
PRD
Step 5: Configure Automatic postings:

T Code – OBYC
In this Step Valuation Class is assigned to the G/L account

This configuration completely handled by FI team
Note: Valuation modifier = Valuation grouping code

Using this Valuation modifier, we have the flexibility to map different GL account for
same valuation class materials.
In standard transactions and FI team will maintain the GL accounts as per valuation
grouping code and modifiers.
178
As refer to the above figure for Transaction key GBB, the GL account credit/debit is
maintain for Valuation modifier, General modifier & the valuation classes.
Similarly for all Valuation classes the GL account is maintained.
Now the entire configuration we have seen for automatic account determination, let
us go through our previous examples for various topic automatic account
determination in form of flow chart.
Example 1: In Consignment process (Page No. 99)
The below flow chart shows the execution of the Automatic account determination for
the consignment process, when we transfer consignment stock to own stock.
Material Material Valuation Valuation Grouping Code

3147 Type Class 0001
ROH 0300
Movement Valuation area (Plant)

Account Category 1000
Type Reference
411K 0001
Company Code
1000
G/L account
Transaction
Chart of account
Key
INT
KON 169900
BSX 300000
179
Example 2: In Sub Contracting Process (Page No. 110)
When accepting the final assembly part from the vendor after supplying the child part
(Sub product) to the vendor from our end.

10015048 Type Class 0001
FERT 7920
Movement Account Valuation area (Plant)

Type Category 1000
101 – GR Reference
543 – 0009
Consumption of
Company Code
stock (Child Part)
1000
G/L account
Chart of account
INT
Transaction
Key
BSX 792000
WRX 191100
893010
BSV
FRL 417001
180
Example 3: Physical Inventory (Page No. 165)
We will consider only material i.e. 3147 for below flow chart where in that example
we had two material (3147 & 4196).

Type Class 0001
3147
ROH 0300
Movement Valuation area (Plant)

Account Category
Type 1000
Reference
702
0001
Company Code
1000
G/L account
Transaction
Key
Chart of account
INT
BSX 300000
GBB INV 400020
Where,
INV = Account Modifier for transaction key GBB.
Summary Recap: In this session we have learnt how the GL account is picked when
we post the Goods Receipt for the respective movement type or when the transfer
the stock from one end to other end.
181
Day 18:
Split Valuation
It is used to valuate stock of material in same valuation area differently.
E.g. if the material is procured externally form the vendor has different valuation
price as compare to the stock of in-house production & if we are procuring same
material from different origin at that time this split valuation comes into picture.
Quality Procurement Origin

Type
Valuation Q P O
Category
Valuation A B C In-house Outsource India USA

Type
Split Valuation
For certain materials, it is necessary to valuate the various stocks in a particular

valuation area separately as shown in above figure
• Different grades of quality of material
• Differentiation between in-house production and outsource procurement
• Different origins of the material. E.g. Same material with different vendors.
182
The Configuration path for split valuation as shown below:
Make sure that the Split valuation is active in configuration path
Exercise: For understanding the concept we will create a Valuation type for In-house
& Outsource Material and define new valuation category. Also we will procure the
both material and observe the status.
System Procedure:-
Step i) Create Global Type & Global Categories
Now we will create global types followed by global category
183
We have created Valuation Types CCP_IN & CCP_OUT for internal & external
respectively where we allotted to semi-finish material with account category
reference 0008 (We have seen in Automatic account determination refer Page
No.168).
184
Step ii) Activate Global Type to Global Categories
We have created a new global category – P (CCP _ Procurement) activated to the

global type as shown in figure.
185
Step iii) Create Local Definition for Plant
As we observe in above figure local definition already created for plant 1000
Note: Click on Cats->OU to activate global category to plants in next step
186
Step iv) Activate Valuation Categories (same as Global) to Local Definition

for Plant.
Click on activate for respective category type defined by us.
187
Step v) Create new Material with valuation type to be mention in beginning
for respective Plant where in Accounting 1 View Valuation Category is to be
maintain.
1. We first create the material & mention valuation category in Accounting 1 view
Note: In Split Valuation the price control should be moving average price for the
material.
188
2. Extend the same material into Valuation types.
After creating the material we will extend the material into different valuation type
which option appears in starting as shown below.
As we see in the above figure, while extending the material we can have material
with different valuation type. So we will extend the material for both valuation types.
I.e. CCP_IN & CCP_OUT
From above data we will get the flow chart as,
Procurement
Type
Valuation
Category P
Valuation
Type CCP_IN CCP_OUT
(In-house) (Outsource)
189
For above valuation type we need to make the purchase info record for two vendors
respectively mentioning the Valuation type as shown in below figure.
190
After doing all the procurement activities we have separate stock to valuate it as we
observe in stock overview as shown in below figure.
Summary Recap: In this session we learnt how to create Split valuation for material
and related configuration for the same.
191
Day 19:
In Invoice verification we verify the amount against the PO to pay the respective
vendor.
E.g. After receiving the goods from the vendor, we verify the invoice given by the
vendor to pay.
Note: Before going to the examples lets go through some basic point that we must
know while doing the invoice verification.
1. If we flagged “GR-Bsd IV” in item level then we have 3 way match or it will
become as 2 way match as shown in figure.
I.e. in 3 way match we need GR to post the invoice (PO—GR—IR) &
In 2 way match GR is not necessary we can post invoice with reference to PO (PO—
IR)
2. We can have a separate invoice for Goods/Service items or planned delivery,

also we can calculate the tax as per the tax code & the amount will be show in
the balance tab as highlighted in below figure.
192
After the Payment to the vendor using the invoice verification and we can have price
settlement between the vendor and the buyer using option such as Credit Memo,
Subsequent Credit & Subsequent Debit. These three can be done after the Invoice
verification entry in MIRO.
Invoice Verification & Subsequent Debit is payment to the vendor whereas for Credit
Memo & Subsequent credit vendor will pay for buyer.
Scenario: We take will order the material form the vendor and go through the each
process starting with the invoice verification after doing the GR.
193
Invoice Verification:
As we observe figure we are not considering any tax so we are taken tax code as 0%,
If we want to put the tax then we can change the tax code & click on the calculate
tax, it will calculate the tax amount & balance will be displayed in the balance and
accordingly we can put the amount. After complete the above process then go to
simulate mention in the top & then save it.
Accounting entries for invoice verification we get as shown in below figure where
vendor account (KBS) is credited and the GR/IR clearing account (WRX) is debited
As we seen before after payment vendor account will be debited & our company bank
account will be credited.
194
Subsequent Debit:
It’s a correction kind of payment in which vendor sends an invoice to pay the
additional charges after few months of the payment due to various reasons.
Suppose he sends an invoice of additional 40000 INR then we have
195
The accounting entries for subsequent debit is as fallows
Credit Memo:
This type is used if we want to charge the vendor.

E.g. we have received the goods form the vendor later found that it is damaged or
not meeting the quality therefore we will return the goods back to vendor. In this
case we will create credit memo for the goods amount equal to the goods.
As per the agreement, if the vendor doesn’t provide the materials/service within
specific date or quality customer can send credit memo to vendor to pay the penalty.
196
Accounting entries for credit memo are as below
The PRD is posted as price was more as per the material price.
Subsequent Credit:
Whenever you want to charge or receive the correction amount from the vendor, we
will create Subsequent credit.
E.g. we want to charge the amount from the vendor about the poor performance of
the material which was bought from the vendor few months back and the payment
was also done.
197
The Accounting Entries after doing subsequent credit is as shown below figure:
198
We can view the following above transactions in Purchase Order in item level tab
Purchase Order history as highlighted below.
Summary Recap: In this session we have gone through the invoice verification,
Credit memo, Subsequent Credit/ Debit processes and their accounting entries.
Overall summary for accounting entries for above process we get

Transaction Description Invoice Subsequent Credit Subsequent
Key Verification Debit Memo Credit
KBS Vendor Credit (-) Credit (-) Debit (+) Debit (+)
Account
WRX GR/ IR Debit (+) Credit (-)
Clearance
PRD Price Debit (+) Credit (-) Credit (-)
Difference (Posted due
to difference
between
Material
price &
memo price)
Input Debit(+) Debit (+) Credit (-) Credit (-)
Tax
(If we put
Input tax in
Invoice)
199
Additional Points to Remember:
Evaluated Receipt Settlement (ERS) for Invoice Verification:
Evaluated Receipt Settlement is the process of settling goods receipt automatically.

The Vendor Invoices are posted automatically (without actually receiving from the
vendor) in the system based on the information in the purchase order and goods
receipt. The settlement documents are sent automatically to the vendor in print,
email or fax form.
Before implementing ERS, there must be an agreement with the vendor about ERS
process and applicable conditions.
Advantages of ERS:
• Purchase Orders can be closed quickly

• No price and quantity variances in Invoice Verification
• No need to receive invoice from vendor
• Communication errors can be avoided
The following are the pre-requisites for implementing ERS:
• In the vendor master data, the indicators for evaluated receipt settlement
must be activated.
• A Confirmation is expected for the purchase order
• GR – IR Indicators and ERS Indicators should be activated in the PO
• Tax code must be maintained in the PO item
200
Day 20:
Automatic PO Process
It is the process in which the PO is automatically created after the PR.
The following are the steps to perform the automatic PO
1. Material Master purchasing view tick automatic PO check box.

2. Vendor Master purchasing view tick automatic PO check box.
3. Maintain Purchase Info Record.
4. Maintain Source list for Vendor & Material.
5. Create a Purchase Requisition.
6. Create automatic PO using T code: ME59N
Step1: Material Master purchasing view tick automatic PO check box.

T Code: MM01
While creating the material master we have to ensure that in purchasing view
automatic PO indicator is flagged for doing the automatic PO process.
201
Step2: Vendor Master purchasing view tick automatic PO check box.

T Code: XK02 (XK01 – to create new vendor)
Like Material Master, Vendor Master Data in Purchasing view the automatic PO
indicator should be flagged as highlighted in below figure.
202
Step 3: Maintain Purchase info Record
T Code: ME11
The Purchasing Info Record is mandatory in the Automatic PO process for vendor
material combination as price will be taken from this info record in an automatic
created PO.
203
Step 4: Maintain Source list
T Code: ME01
The Source list is also mandatory and we have to flagged fix for respective vendor as
highlighted in below figure.
Step 5: Create Purchase requisition

T Code: ME51N
While creating the Purchase Requisition we have to flag the source determination as
highlighted in below figure and enter the respective Plant, vendor, Material etc.
204
Step 6: Create Automatic PO
T Code: ME59N
After all completing the above step using T code ME59N enter the details such as
vendor, plant, Purchase Group and Purchase requisition. In new Purchase order Zone
flag per plant & per requisition (as data provided), then flagged test run in other
parameters and execute it.
After executing the above we will get the following output as shown in below figure,
we can see the PO number and the status.
205
Note: if we get error in this process, we can get the details by clicking in document
icon (Column D).
To confirm the execution we can view in the Respective Purchase requisition status in
item level tab as shown in below figure
206
By clicking in the PO which was mention in PR status we can observe the PO which
was created automatically using above steps as shown in below figure.
We can also note the PO number after executing the automatic PO (ME59N) and then
display the PO using ME23N.
Summary Recap: In this Session we learnt about how to create automatic PO from
the PR and the steps involves in it.
207
Day 21:
Cross Module – Integration Configuration

In this Session we will see the examples in which SAP MM integrates with the other
modules.
1. SAP MM – QM
As we know goods before accepting should meet the quality specification, Therefore
quality is monitor by the Quality Management team for any manufacturing sector.
Without the approval of the Quality Management team material will not get certified
to use for production activities and vendor will not be paid.
The following are the steps to perform SAP MM – QM integration

1. Create Material Master with Quality Management view – MM01
2. Maintain Quality Info Record – QI01 (QM team)
3. Create Purchase Order – ME21N
4. Post the Goods Receipt – MIGO
5. Release the material from Quality Inspection to Unrestricted Stock – QA32
(QM team)
Step 1: Create Material Master With Quality Management View.

T Code: MM01
This View is maintained by the QM team.
208
As Shown below in QM view, Click on post to inspection stock and then go to
inspection set up.
After going to inspection setup click on new inspection type as highlighted in below
figure.
209
Select the inspection type as “01” which represent Goods Receipt for Order and make
it active.
Step 2: Maintain Quality Info Record

T Code: QI01
Maintain the Release date in which material to be released.
210
Step 3: Create Purchase Order
T Code: ME21N
Step 4: Post Goods Receipt

T Code: MIGO
211
After posting the Goods Receipt we observe that the stock directly moved Quality
inspection stock (Using T Code: MMBE).
Step 5: Release the material from quality to unrestricted stock.

T Code: QA32
Stock will be confirmed by the QM team if it all the requirement then they will release
the material to unrestricted stock.
We will obtain below output further process done by the QM team in order to put
Quality to Unrestricted Stock.
212
2. SAP MM – FI
Refer Page No. 168 example for integration between MM – FI module.
3. SAP MM - SD
Refer Page No. 122 example for integration between MM – SD module.
Summary Recap:
In this session we have gone through other module integration with MM module.
213

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SAP Career Guidance 2020

SAP ECC 6.0

4 22-06-2020 Customization of Master Data with related 22

SAP MM Course Curriculum:

Discussion on ERP and other ERP clients in the market

Definition on Organization elements Client

Assignment of Organization elements and making of Organization structure

Master Data in Material Management

Configuration and customization activities on Material Master

Direct Purchase Requisition

Request For Quotation (RFQ)

Configuration and Customization activities on RFQ

Standard Purchase Order

Subcontracting Purchase Order

Consignment Purchase Order

Complete process execution like PO creation, GR and settlement.

Intra-Stock STO with MM route

Intra-Stock STO with Delivery

Service Purchase order process

Schedule Agreements without Release profile

Automatic Account Determination

Physical Inventory Process

Cross Module i.e Integration Configuration

SAP MM Org Structure:

Master Data & P2P application:

Material Master: It contains all data required to define and manage

1) Material master consist of following views as shown in the figure.

1. Basic data - Client level.

- Basic data 1&2

Basic Data View:

Purchasing Value Key:

2) Vendor master consists of three areas:

3) Purchase info record:

Procure to Pay Cycle:

Below Figure shows the flow for P2P cycle.

In the System the P2P are as follows:

ME51N - Purchase Requisition - Internal document

ME21N - Purchase order (If vendor is already) - External document.

MIGO -Goods receipt

MIRO - payment to vendor

Purchase requisition number 0010017540 created

Purchase requisition 0010017540 changed

Standard PO created under the number 4500018422

Material document 1105 posted

Document no. 5200000245 created

FERT (finished products)

HALB (semi-finished products)

ROH (raw materials)

In System we create a Material of ROH Type in the system – WROH.

Material 3706 created

We can Create new account Group & required field selection

Purchasing info record 5300007487 1000 1000 created

Customization of Material Document:

• Purchase Requisition (PR):

Step 1: Through IMG Path – Material Management – Purchasing – Purchase Requisition,

Vendor selection is an important process in the procurement cycle. Once requirements

In the SAP System RFQ is of three steps procedure as fallows

RFQ created under the number 6000000140

RFQ created under the number 6000000141

RFQ created under the number 6000000142

Quotation for RFQ 6000000140 maintained

Quotation for RFQ 6000000141 maintained

Quotation for RFQ 6000000142 maintained

For Customization of RFQ: Similarly compare to other customization can be done