Sap Integration Fi MM SD 2

SAP FINANCIALS
INTEGRATION
SAP FI ECC6.0 INTEGRATION WITH OTHER

MODULES
SAP FI Integration with Other Modules
Overview
Financial activities from other SAP modules are integrated

with FI
Overview – Business Process

SAP FI Integration with Material Management (MM)
Procure to Pay
• Purchasing Master Data
– Vendor Master
– Material Master
• Procure to Pay – Purchase Order
– Account Assignment
• Procure to Pay – Goods Movement
– Automatic account determination for goods movement (goods

receipt, goods issue, transfer)
• Procure to Pay – Invoice Verification
– Automatic account determination for invoice verification

Purchasing Data – Vendor Master
© 2010-2012 ALL RIGHTS RESERVED

Purchasing Data – Material Master
• Pricing control of material: Standard price or Moving Average Price
• Valuation Class: determine G/L accounts which needs to be updated for

goods movement

Purchase Order – Account Assignment
• Determine purchase order specification
– For example, what the purchase order is raised for, e.g., asset, non-
stock, services
– Only for non-material purchase orders
– Nature of the account assignment (cost object), e.g., cost centre,

sales order, project
– Indicates which account is used at goods receipt and invoicing
Purchase Order – Account Assignment (cont.)
– FI posting will be created automatically based on the account

assignment and account determination (for material purchase)
– Example:

Account Assignment = Blank (Material)
 Goods Receipt
Dr. Material
Cr. GR/IR
Account Assignment = A (asset)
 Goods Receipt
Dr. Asset
Cr. GR/IR
Account Assignment: Example
Enter Account assignment Cat here List of

Account Category
Goods Movement – Account Determination (1 of 3)
– For example, what the purchase order is raised for,

such as asset, non-stock, services
– Only for non-material purchase orders
– Nature of the account assignment, for example, cost

center, sales order, project

– Indicates which account is used at goods receipt and
invoicing
• Determine purchase order specification (cont.)
– FI posting will be created automatically based on the

account assignment and account determination (for
material purchase)
– Example:
Account Assignment = Blank (Material)
 Goods
Receipt
Dr.
Material
Cr. GR/IR
Account Assignment = A (asset)
 Goods
Receipt
Dr.
Asset
Cr.
GR/IR
• Roadmap to Automatic Posting
– Valuation Class is maintained in Material Master –

Accounting View
• For example, Material 100-401 with Valuation class

7900
– Account determination has been configured for

movement type and valuation class
• For example, Movement Type 101 (goods receipt) for

valuation class 7900 is debited to stock account

304000

Account Determination – Example
Account Determination – Configuration

Invoice
Verification
• When a vendor invoice is entered through MM invoice verification,
automatic posting is generated to FI
• If the Purchase Order is set with goods receipt, invoice verification is a 3-

way matching (e.g., quantity from the goods receipt and price/invoice
amount from the PO)
• Transaction code MIRO
Purchase Order from FI Invoice
• Purchase Orders can be drilled into from FI invoice

and vice versa
– Transaction code FB03
– Enter the FI document number
– Go to Environment and select Original Document
– Click on Purchase Order number to display the PO

FI Invoice from Purchase Order
• Transaction code ME23N
• Go to PO History
• Click on the Invoice Receipt material document
• Click on FI documents button
• Double click on the FI doc number to display the accounting journal

FI Invoice from Purchase Order (cont.)

SAP FI Integration with SD
Sales Master Data – Customer Master

Customer Credit Management
• Credit limit is assigned per customer
We can determine when the checking is done: order, delivery, goods

issued, etc.

Sales Order – Credit
Check Example
• System checks customer outstanding balance against the
credit limit allowed before a sales order can be saved
Sales Order – Revenue Account Determination (1 of 3)
 Condition Type determines items included in the Sales Order, for

example, material price, tax, discount, etc.

Sales Order – Revenue Account
Determination (2 of 3)
Account key is assigned to condition type
Sales Order – Revenue Account Determination (3 of 3)
Account key and other parameters determine GL accounts for

automatic posting during A/R
invoicing

Condition type Sales Org
Account key
Profit Center Assignment in Material Master
• Default profit centre is maintained in Material Master
• This profit centre will be taken to Sales Order and then to A/R
invoice generated from the
Sales Order

Billing/Invoicing
(1 of 3)
• When a billing document is created, the system
automatically creates all relevant accounting documents
Billing/Invoicing (2 of 3)

Billing/Invoicing
(3 of 3)
• Display Billing document from FI Invoice:
– Transaction code FB03
– Enter the FI document number
– Go to Environment and select Original Document

SAP FI Integration with
Controlling
• Controlling (CO) and Financial Accounting (FI) are independent components
in the SAP
system but the data flow between the two components takes place
on a regular basis
• All data relevant to cost flows automatically to CO from FI
• The system assigns the costs and revenues to different CO account

assignment objects like:
• Cost centres
• Business processes
• Projects or orders
• All relevant accounts in FI are managed in CO as cost elements or

revenue elements, which enables one to compare and reconcile values
from CO and FI
Transaction Type: Purchase

Transaction Type: Settlement
Transaction Type: Allocation

Accounting
Documents
• Accounting documents consist of FI document, Special Ledger
document, Profit Centre document, Profitability Analysis
document, and CO document
• Display Billing document from FI invoice:
• Transaction code FB03
• Enter the FI document number
• Go to Environment and select Accounting Documents

• List of Accounting docs:
– FI document
– Profit centre document
– Special Ledger document
– CO document

SAP Purchase to Pay Flow- SAP MM
SAP MM (Materials Management)
1. SAP MM (Materials Management) is a module of the SAP

Enterprise Resource Planning
(ERP) package that is used for Procurement Handling and
Inventory Management.
2. The module has two important master data – material and
vendor.
3. Broadly, the various levels that can be defined for a SAP MM
implementation are: Client, Company Code, Plant, Storage
Location and Purchase Organization.
4. This is the largest and most complex in all of SAP modules. It can
be divided into five major
components. There are: materials management, plant
maintenance, quality management, production planning and
control, and a project management system. Each is divided into
number of subcomponents.
5. SAP Materials management covers all tasks within the
supply chain, including consumption-based planning,
planning, vendor evaluation and invoice verification.
6. It also includes inventory and warehouse management to
manage stock until usage dictates the cycle should begin
again. Electronic Kanban/Just-in-Time delivery is supported.
7. Material Management covers the functionality required to
purchase goods and services, manage inventory, and inspect
incoming materials.
8. The Purchasing function includes creation of requisitions,
requisition approval, purchase order generation, and receipt of
goods and services.
9. Inventory Management includes issuing and transferring
inventory, inventory restocking,
and the inventory count and adjustment processes.
The basic of the purchase to pay flow is explained below.
1. Determination of Requirements
In this step, there is a requirement of material or service, which must

be procured externally, from the user. The requirement must be
recorded as Purchase Requisition (PR) document in SAP MM.
Purchase Requisition (PR) is an internal purchasing document in SAP

ERP that is used to give notification to responsible department about
the requirement of material/service and to keep track of such
requirement.
2. Determination of the Source of supply

After the PR has been created in the previous step, the responsible
department must process it. The buyer of the procurement
department must determine the possible sources of supply of the
material/service specified in the PR.
3. Vendor Selection
If in the previous step, there are some outline agreements or info

record documents that can be used as references to create a PO, the
buyer can select or choose which vendor that will be appointed to
provide the material/service at this time.

4. PO Processing
In the previous step, the buyer has selected the vendor which will
provide the material/service needed in PR. In this step, the buyer
creates a Purchase Order (PO) based on the PR and the reference
document (that can be an outline agreement, an info record, or a
quotation).
5. PO Monitoring
After the PO has been sent to the vendor, the buyer has the
responsibility to monitor whether the vendor delivers the
material/service at the right time on the right place.
6. Goods Receipt
When the vendor delivers the material or perform the service, the
responsible person of the company must perform the goods receipt
(GR) or service acceptance (SA) transaction. The GR/SA will update the
PO history.
7. Invoice Verification
After the vendor delivered the material/service, it will send the invoice
to the person responsible in the company. Invoice is a formal document
issued by a vendor to the company to request the payment for the
material or service that the vendor has already provide to the company
according to the terms of payment agreed in the PO.
8. Payment Processing
After the Invoice Receipt (IR) transaction has been posted, the
vendor’s account payable will increase and the company must process
the payment to that vendor as stated in the terms of payment of the
PO. The payment transaction will be performed in FI module. After the
payment has been posted, the vendor’s account payable will be
debited and the cash or bank account will be credited.
SAP MM stands for Materials Management and this is part of SAP

Logistics includes:
1. Requisitions
2. Purchase orders
3. Goods receipts
4. Accounts payable
5. Inventory management
6. BOM’s
7. Master raw materials, finished goods etc
Some of the Main SAP MM Transactions are:

1. ME51N – Create Requisition
2. ME21N – Create Purchase Order
3. MIGO – Goods receipt a PO
4. MIRO – Create Invoice

One of the main areas covered by MM module is
Purchasing/Procurement. The purchasing process is initially started
when there is a requirement of material/service from a user. If the
material/service cannot be obtained from company’s internal resource,
the responsible person of that company must find the vendor/supplier
which can provide it on the required date. The purchasing process is
ended when the payment processing to the vendor that supply the
material/service has been done.
SAP Order to Cash Flow- SAP SD
SAP SD is simply Sales and Distribution
1. It’s all about selling goods & distributing them to relevant parties
and gets the payments
for relevant parties.
2. Helps to optimize all the tasks and activities carried out in sales,
delivery and billing.
3. Key elements are: pre-sales support, inquiry processing,
quotation processing, sales order processing, and delivery
processing, billing and sales information system.
4. SAP SD application components fulfills many of the international
requirements that supports the sales and distribution activities
with functions such as pricing and conditions, customer order
processing, delivery monitoring, billing, credit and risk
management.
5. The SAP sales and distribution is part of the logistics module
that support your customers, starting from quotations, sales
order and all the way towards billing the customer.
6. It is tightly integrated with the MM and PP functional modules. It
allows companies to
input their customer sales price, check for open orders and
forecast etc.
The most important basic functional features in the SD module are:
1. Pricing
2. Availability Check
3. Credit Management
4. Material Determination
5. Output Determination
6. Text Processing
SAP SD stands for Sales and Distribution and this is the module which is
used to manage customer- focused activities, from selling to delivery,
including -
1. RFQ

2. Sales orders
3. Pricing
4. Picking (and other warehouse processes)
5. Packing
6. Shipping

Some of the main SAP SD transactions are:
1. VA01 – Create Customer Order

2. VL01N – Create a Delivery
3. VA03 – Display a Order
4. VL02N – Change Customer Delivery (F20 is to post a good
issue)
5. VA05 – List Orders
6. VF01 – Create a Invoice
The Order to Cash flow roughly follows the following sequence -
1. A customer orders some items from your company by creating

a sales order
2. Your company decides to deliver the items ordered by the
customer.
3. This is recorded by creating a outbound delivery document
4. Once the items are available for sending to the customer,
you post goods issue which reduces your inventory and puts
the delivery in transit. This will create a material document.
5. You will post goods but the material document created will be
stored in tables.
6. You will then create shipment document to actually ship the
items.
7. You finally create a sales billing document.
8. This will have a corresponding accounting document created
that will be in different tables.
9. When customer pays to your invoice, it will directly hit your AR
account in FI.

Sap Integration Fi MM SD 2

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Sap Integration Fi MM SD 2

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SAP FINANCIALS

SAP FI ECC6.0 INTEGRATION WITH OTHER

Financial activities from other SAP modules are integrated

Overview – Business Process

• Purchasing Master Data

• Procure to Pay – Purchase Order

• Procure to Pay – Goods Movement

– Automatic account determination for goods movement (goods

• Procure to Pay – Invoice Verification

– Automatic account determination for invoice verification

© 2010-2012 ALL RIGHTS RESERVED

• Pricing control of material: Standard price or Moving Average Price

• Valuation Class: determine G/L accounts which needs to be updated for

© 2010-2012 ALL RIGHTS RESERVED

• Determine purchase order specification

– Only for non-material purchase orders

– Nature of the account assignment (cost object), e.g., cost centre,

– Indicates which account is used at goods receipt and invoicing

Purchase Order – Account Assignment (cont.)

• Determine purchase order specification

– FI posting will be created automatically based on the account

© 2010-2012 ALL RIGHTS RESERVED

Account Assignment = A (asset)

Account Assignment: Example

Enter Account assignment Cat here List of

Goods Movement – Account Determination (1 of 3)

• Determine purchase order specification

– For example, what the purchase order is raised for,

– Only for non-material purchase orders

– Nature of the account assignment, for example, cost

© 2010-2012 ALL RIGHTS RESERVED

Goods Movement – Account Determination (2 of 3)

• Determine purchase order specification (cont.)

– FI posting will be created automatically based on the

Account Assignment = Blank (Material)

Account Assignment = A (asset)

Goods Movement – Account Determination (3 of 3)

• Roadmap to Automatic Posting

– Valuation Class is maintained in Material Master –

• For example, Material 100-401 with Valuation class

– Account determination has been configured for

• For example, Movement Type 101 (goods receipt) for

© 2010-2012 ALL RIGHTS RESERVED

© 2010-2012 ALL RIGHTS RESERVED

Account Determination – Configuration

© 2010-2012 ALL RIGHTS RESERVED

• If the Purchase Order is set with goods receipt, invoice verification is a 3-

• Transaction code MIRO

Purchase Order from FI Invoice

• Purchase Orders can be drilled into from FI invoice

– Transaction code FB03

– Enter the FI document number

– Go to Environment and select Original Document

– Click on Purchase Order number to display the PO

© 2010-2012 ALL RIGHTS RESERVED

• Transaction code ME23N

• Click on the Invoice Receipt material document

• Click on FI documents button

• Double click on the FI doc number to display the accounting journal

© 2010-2012 ALL RIGHTS RESERVED

© 2010-2012 ALL RIGHTS RESERVED

Sales Master Data – Customer Master

© 2010-2012 ALL RIGHTS RESERVED