CLASS NO-9

INTEGRATION
01. How Do You Go About Setting The FI MM Account Determination?
FI MM settings are maintained in transaction code OBYC. Within these there are various
transaction keys to be maintained like BSX, WRX, GBB, PRD etc. In each of these transaction keys
you specify the GL accounts which get automatically passed at the time of entry. Few examples
could be:BSX- Stands for Inventory Posting Debit GBB-Stands for Goods Issue/Scrapping/delivery
of goods etc PRD- Stands for Price Differences.

02. At What Level Is The FI-MM, FI-SD Account Determination Settings?

They are at the chart of accounts level.

03. What Are The Additional Settings Required While Maintaining Or Creating
The Gl Codes For Inventory Accounts?
In the Inventory GL accounts (Balance sheet) you should switch on the ‘Post
automatically only’ tick. It is also advisable to maintain the - aforesaid setting for all FI-MM
accounts and FI-SD accounts. This helps in preserving the sanctity of those accounts and
prevents from having any difference between FI and MM, FI and SD.

04. What Is Valuation And Account Assignment In Sap?

This is actually the link between Materials Management and Finance. The valuation in
SAP can be at the plant level or the company code level. If you define valuation at the plant level
then you can have different prices for the same material in the various plants. If you keep it at
the company code level you can have only price across all plants. Valuation also involves the
Price Control .Each material is assigned to a material type in Materials Management and every
material is valuated either in Moving Average Price or Standard Price in SAP. These are the two
types of price control available.

05. What Is Valuation Class?

The Valuation Class in the Accounting 1 View in Material Master is the main link
between Material Master and Finance. This Valuation Class along with the combination of the
transaction keys (BSX, WRX, GBB, PRD) defined above determine the GL account during posting.
We can group together different materials with similar properties by valuation class. Eg
Raw material, Finished Goods, Semi Finished We can define the following assignments in
customizing : All materials with same material type are assigned to just one valuation class.
Different materials with the same material type can be assigned to different valuation classes.
Materials with different material types are assigned to a single valuation class.

06. Can We Change The Valuation Class In The Material Master Once It Is
Assigned?
Once a material is assigned to a valuation class in the material master record, we can
change it only if the stocks for that material are nil. If the stock exists for that material, then we
cannot change the valuation class.
In such a case, if the stock exists, we have to transfer the stocks or issue the stocks and
make the stock nil for the specific valuation class. Then only we will be able to change the
valuation class.

07. Does The Moving Average Price Change In The Material Master During Issue
Of The Stock Assuming That The Price Control For The Material Is Moving
Average?
The moving average price in the case of goods issue remains unchanged. Goods issue
are always valuated at the current moving average price. It is only in goods receipt that the
moving average price might change. A goods issue only reduces the total quantity and the total
1
value in relation to the price and the moving price remains unchanged. Also read the next
question to learn more about this topic.

08. If The Answer To The Above Question Is ‘Yes’, Then List The Scenario In
Which The Moving Average Price Of The Material In The Material Master Changes
When The Goods Are Issued.
The moving average price in the material master changes in the scenario of Split
Valuation which is sometimes used by many organizations. If the material is subject to split
valuation, the material is managed as several partial stocks and each partial stock is valuated
separately. In split valuation, the material with valuation header record will have ‘v’ moving
average price. This is where the individual stocks of a material are managed cumulatively. Here
two valuation types are created, one valuation type can have ‘v’ (MAP) and the other valuation
type can have ‘s’(standard price). In this case, whenever the goods are issued from the
respective valuation types, always the MAP for the valuation header changes.

09. What Is The Accounting Entry In The Financial Books Of Accounts When The
Goods Are Received In Unrestricted Use Stock? Also Mention The Settings To Be
Done In The ‘Automatic Postings’ In Sap For The Specific G/L Accounts.
On receipt of the goods in unrestricted-use stock, the Inventory account is debited and
the GR/IR account gets credited. In customization, in the automatic postings, the Inventory G/L
account is assigned to the Transaction event key BSX and the GR/IR account is assigned to the
Transaction event key WRX.

10. If A Material Has No Material Code In Sap, Can You Default The G/L
Account In Purchase Order Or It Has To Be Manually Entered?
If a material has no material code in SAP, we can still, default the G/L account with the
help of material groups. We can assign the valuation class to a material group and then in FI-
automatic posting, we can assign the relevant G/L account in the Transaction event key. The
assignment of a valuation class to a material group enables the system to determine different
G/L accounts for the individual material groups.

11. What Is The Procedure In Sap For Initial Stock Uploading? Mention The
Accounting Entries Also.
Initial stock uploading in SAP from the legacy system is done with inventory movement
type 561( a MM transaction which is performed).

Material valuated at standard price: For a material valuated at standard price, the
initial entry of inventory data is valuated on the basis of standard price in the material master. If
you enter an alternative value at the time of the movement type 561, then the system posts the
difference to the price difference account.

Material valuated at moving average price: The initial entry of inventory data is
valuated as follows : If you enter a value when uploading the initial data, the quantity entered is
valuated at this price.
If you do not enter a value when entering initial data, then the quantity entered is valuated at
the MAP present in the material master. The accounting entries are: Inventory account is
debited and Inventory Historical upload account is credited.

FI-PP INTEGRATION
1. When you Create & Release the production order, the planned cost will be calculated from
BOM (Bill Of Material) & Roling master receipts master data – Co document will be generated
for planned postings.

2
2. When you issue goods (Raw Material) to production (against production order) the FI & CO
entries will be generated – CO27.
Consumption A/C……………………………..Dr. xxx
To Inventory A/C…………….. xxx
CO – Primary Cost Postings Will BE triggered against the cost center.

3. When Operation is roiling are confirmed the cost centers in the work centers will be
changed with the activity costs. Here secondary cost posting will be triggered in the production
cost centers.

FI – MM Integration is Based on the following

Movement Type – It’s a classification key indicator. The type of material movement (
G/R, Goods Issue, Physical Stock Transfer) determines the A/C in FI stock & consumption A/c
are to be posted & how the stock Fields in the Material master records are to be updated.

Transaction Key – Also known as even key or process key allow users to differentiate
between various transaction & events (such as physical inventory transaction & good
movement) that occur in inventory mgt.

Material Type – Group together material with the same basic attributes (EG – raw
material, Finish goods, semi Finished) together with plant, material type determines the
material inventory mgt.

Valuation Class / Valuation String – String means way or sequence of process. Here
the movement type & G/L is connected through valuation string.

MM
1. OX10 – Plant
2. OX09 – Storage Location
Where Material is stored.
3. OX08 – Purchasing Organization
Org. Unit subdividing an Enterprise according to requirement of Purchasing. Process
Materials, Services, and Negotiates Conditions of Purchase with Venders & is
responsible for such transaction.
4. OME4 – Purchasing Group
Responsible for procurement of Material or Class of Material
Medium through which Contacts with Vender are maintained.
5. OMS2 – Material Type
6. MMNR – No. Range of Material Type
7. OMSY – Fiscal Year (MM)
8. MMRV – To View MM Posting Period
9. MMPV – Change Fiscal Year Period (MM)
10. XK01 – Vender
11. OMSK – val. Class & Acct. Cat. Ref.
12. MM01 – Update Material
13. G/L Creation
14. OBYC
15. ME21N – Purchase Order
16. OMBT – No. Range WE & WA
17. MIGO
18. MIRO
3
19. MBST – Cancel of Material Document
20. MB03 – Display Material Document
21. MR8M – Cancel Invoice
22. MIR4 – Display Invoice Document
23. MB1C – Enter Other Goods Receipt

FI-MM INTEGRATION JOURNAL ENTRIES

2 way – Invoice & P.O matched

3 ways – P.O, Goods Receipt, and Invoice received.
Points to Remember:
Tax never calculate on MIGO
Tax always calculate on MIRO
Automatic creation of Primary & Secondary cost elements, If this was configured, you
could create a batch File now that would catch up with any cost element not yet created
(Cost element mandatory creation).
Movement type Parameter
a. Quantity update
b. Value update
Creating P.O – MT (base) – MI (identify movement indication) – Whether goods.
Movement for production order, Purchase order, Delivery note & Identify for consumption
(assets, sales order) and identify value string cash.
ERS – Discount, ERL – Sales Revenue, ERF – Freight.
ERB – Rebate, MWS – Taxes, ERV – Accruals.
Valuation String are For SAP internal Usage. It’s Just a pointer to the Transaction Event
Key which is necessary for automatic A/C determination. Movement Types are linked with
transaction key via Valuation String (OMWN). It contains all posting transaction that are
possible for a certain transaction.
WE01 (Std.) BSX, WRX, PRD
4
 SD
1. OVX5 – Sales Organization
Organizational unit responsible for sales of certain products & services
2. OVXI – Distribution Channel
The way in which product reached to customer Eg:-Wholesale, Retail
3. OVX1 – Sales Office
Physical location that has responsibility for the sale of certain products & services
within a given geographical area. Each Customer is assigned to a sales Office (Customer
Master Record)
4. OVX4 – Sales Group
A Group of Sales People who are responsible for processing sales. Each Customer can
be assigned to a particular sales group.
5. OVXB – Division
Way of grouping Material, Product, Services. It determine Business Area & Sales Area
Division : Product = 1:1
6. OVXG – Sales Area
7. VOR1 – Common Distribution Channel

11. Sales Area is Combination of Sales Organization, Distribution Channel and Division

5
 How Do You Configure FI-SD A/C Determination
FI - SD A/C Determination Happens Through A Access Sequence. The System Goes About
Finding A/C From More Specific Criteria To Less Specific Criteria. Sequence Are As Follows:-
1. It Will First Access And Look For The Combination Of Customer A/C Assignment
GRP/Material A/C Assignment GRP / A/C Key.
2. It Does Not Find The A/Cs For The 1st Combination –It Will Look For Customer A/C
Adjustment GRP / A/C Key Combination.
3. Furthermore, If It Does Not Find A/Cs For The First 2 Criteria Then It Will Look For
Material A/C Assignment GRP/ A/C Key.
4. If It Does Not Find Any A/Cs For The A/C Earlier Criteria Then Finally It Will Look For
A/C Key And Assign The G/L A/C Code.
There Posting Of Sales Invoices Into FI Are Effected On The Basis Of A Combination Of Sales
6
Org. A/C Type Or Customer And Material A.C Assignment Grps And Following Are The Options
Available:-
A. Customer AAG. / Material AAG. / A/C Type
B. Material AAG. / A/C Type
C. Customer AAG. / A/C Type
For Each Of This Option You Can Define A G/L A/C. Thus The System Uses The G/L A/C To
Automatically Post The Entries.

Price Control
Std. Illustrations
01.04.07 Initial Stock: 1000 Units Std Price/Unit (A): Rs. 5
Initial Stock Value Rs 5000 (1000*5)
20.05.07 G/R: 1000 Units / G/R price per unit (A1): Rs. 6
Stock A/C ………………………..Dr 5000
PRD A/C ………………………….Dr 1000
To GR/IR 6000
Stock Value = 5000+5000 = 10,000

29.05.07 Goods Issue : 100 Units, Price per unit Rs. 5

Map
01.04.07 Initial Stock: 1000 Units Map per unit (A): Rs. 5
Initial Stock Value Rs 5000 (1000*5)
20.05.07 G/R: 1000 Units / G/R price per unit (A1): Rs. 6
Stock A/C ………………………..Dr 6000
To GR/IR 6000
Stock Value = 5000+5000 = 11,000 (5.50 per unit)
System Reflect new stock value automatically. Now Moving Average Price = Rs. 5.50 per unit.
29.05.07 Goods Issue: 100 Units, Price per unit Rs. 5.50