1

BASIC
KNOWLEDGE
IN SAP

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Email: info@zarantech.com
Website: www.zarantech.com
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Basic knowledge of SAP MM

FULL FORM OF SAP:

System application and products in data processing.

Terminology as an END USER:

MASTER DATA

As an END USER we should focus on these

TRANSCATION DATA

CONFIGURATION DATA It is used from consultant side

UNDER MASTER DATA :

Material master MM01/MM02/MM03
Vendor master/ supply
Purchase record
Source list

These data based on MM module

UNDER TRANSACTION CODE :

Purchase requisition
Purchase order
Goods receipt/ goods issue
Invoice verification

TRANSACTION CODE FOR MASTER DATA :

Material master mm01 (display) ; mm02 (change) ; mm03 (display)

Vendor master BP (BUSINESS PATNER) used in S/4 hana ; XK01 (central) used in ECC
MK01 (purchase level) FK01(financial level). All these codes are obsolete
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TRANSACTION CODE FOR TRANSCATIONAL DATA:

Purchase requisition ME51N / ME52N / ME53N
Purchase order ME21N / ME22N / ME23N
Goods receipt / good issue MIGO
Invoice verification MIRO

MAJOR LIST OF REPORTS TO VIEW IN SAP

Stock overview MMBE
Purchase req list ME5A
Purchase order ME2N
Material doc list MB51

BASIC TERMINOLOGY TO KNOW IN SAP

Material : The matter from which things can be made of
Plant : Manufacturing location where all the production of material and product takes
place.
Storage location: Is an organization unit, which actually differentiates between the
different material stocks in a plant.
Purchase org : an organization unit subdividing an enterprise according to the requirement
of purchasing.
Purchase group: key for a buyer or group of buyers in SAP.
Material group: used to classify materials for reporting.
Valuation class: group of raw materials with same account determination.
Material type : classifies types of material.

GENERAL LANDSCAPING IN SAP

DEVELOPMENT
TR (TRANPORTATION REQ)

QUANTITY

REGRESSION

PRODUCTION SERVICES
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STEPS OF SAP IMPLEMENTATION (PROJECT)

Step 1 > Implementation

Step 2 > roll out
Step 3 > up gradation / migration
Step 4 > support
Step 5 > notification

GAP : Missing information from clients for SAP system

SAP MM ORGANIZATON STRUCTURE ( HIRARCHY)

COMPANY

COMPANY CODE

PLANT

STORAGE LOCATION

PURCHASE ORGANISATION

PURCHASE GROUP
ASSIGNMENTS DONE AFTER CREATING THE STRUCTURE(RELATIONSHIP)
Plant is assigned to company code
Purchase org is assigned to plant
Purchase org is assigned company code
Note : purchase group is an independent things there are no assignment to be done.
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What is master data?

Which stores all the main things such as material master, vendor data, PIR, source list in MM.

MATERIAL MASTER (TCODE – MM01)

What is valuation class?

Group of material having same account determination is called valuation class. It is completely integrated
with FI(financial accounting). OR
Valuation class categorizes the G/L account on the basis of material type.

For example: RAW material will have diff G/L account than the finished material, as the cost will be
different in the both cases. Account reference is also maintained along with the valuation class.

What is use of valuation class in SAP MM?

A valuation class is used to determine the general ledger account for the materials stock account.

What is price control ?

Price Control is an indicator defined in the material master data.
It indicates the method used to valuate the stock of a material.
It can either be S (standard price) or V (Moving average price).

What is standard price (S)

In standard price, the price is set by the organization based on the historical/ assume value which will be
considered as a standard price for the material. Standard price is always fixed.

What is moving avg price (v)

So in moving average price the price is determined on the basis of averaging the total value of the stock.
moving average price is adjustable or flexible.
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VENDOR MASTER (TCODE –XK01)

What is vendor master data ?
The vendor master contains information about the vendor that supply materials or
service to Enterprises.
Information about a vendor is stored in individual vendor master records.
vendor master record contains data like
vendor name
address
the currency used for ordering from the vendor
terms of payment names of important contact

STANDARD VENDOR IS KRED

WHAT IS VENDOR ACCT GROUP?

It determines the internal and external number
It controls the no. ranges
It will control screen field settings(*)
Types of vendor (such as international vendor or domestic vendor)
What is reconciliation account?
Reconciliation account is also called as vendor account ,which is nothing but a transaction history
happened between the vendors and it is managed by the accounting team.

What is dunning procedure?

Dunning procedure which is nothing but a reminder kind of thing a notification sent to the vendor in case of
returning the remaining material or remaining balance.

PURCHASE INFO RECORD (TCODE – ME11)

what is PIR?
The combined information of material master and vendor master altogether is kept in a record
that we call it as a purchase info record.
material and vendor master are separate data record for keeping information of materials and
vendors from where material is procured.
info record is useful to provide price, condition, delivery tolerance,tax code ETC.
the purchase info record can be maintained at the plant level or a purchasing organisation level.
Example : a vendors current price of a particular material is stored in info record.
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Info record can be maintained for 4 procurement types

Standard
subcontracting
consignment
pipeline

SOURCE LIST (TCODE – ME01)

What is source list?

Source list includes list of vendors that supply material over a period of time.

It specifies the time period of ordering of a particular material from a given vendor.

PURCHASE REQUISITION (ME51N)

What is purchase requisition?

Procurement in every organization starts with gathering requirements. Once requirements are gathered, we
need to inform the purchasing organization. A Purchase Requisition is a document that contains a list of
requirements.

A purchase requisition is a request that is made to the purchasing organization to procure a certain list of
materials.
It is an internal document and remains within the organization.
Purchase requisition needs approval from the purchasing organization.

Purchase requisition can be created for the following procurement types −

o Standard − Getting finished material from vendor.
o Subcontracting − Providing raw material to vendor and getting finished material.
o Consignment − Procuring material that is kept in company’s premises and paying to vendor for that.
o Stock transfer − Getting material from within the organization.
o External service − Getting services like maintenance from third party vendor.

REQUEST FOR QUOTATION (TCODE- ME41)

What is RFQ?
its a request for quotation sent to vendor regarding the information of material type, qty, deadline and
delivery date.
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PURCHASE ORDER (TCODE ME21N)

What is po?

Procurement starts with creating a purchase order, i.e., a formal document given to vendors and it includes a l
of goods and materials that are to be procured.
Po includes list of materials, pricing, vendor, plant, company code, delivery date, pg.

GOODS RECIEPT (TCODE –MIGO)

What is goods receipt?

Goods Receipt In SAP is a confirmation, that the material mentioned in the Purchase Order has been

received at
the plant, which is mentioned in the PO document while creating.
And then it is stored in storage location.

Movement type 101

Accounting entries

INVOICE VERIFICATION (TCODE – MIRO)

What is miro?
A document that a supplier creates to charge a customer for goods.
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CONFIGURATION
Configuration is done for the sake client requirement, by selecting the specific
functionality from the list of SAP software.

MATERIAL CONFIGURATION: things to be configured

Industry sector : (example : P – paint industry)
Material type : ( example: MKRM – raw materials for paint)
Material group : ( example: liquid RM/ solid RM)
Number ranges : ( as u customized)
Field settings:
Valuation class:

VENDOR MASTER CONFIGURATION Things to be configured

Types of vendor such as
KRED – standard vendor
MLOC – Local vendor ( ‘M’ is as per my assignment)
MGLO – Global vendor
MSERV – service vendor
MPLT – STO vendor

Screen field setting

Number ranges

SOURCE LIST CONFIGURATION : things to be configured

Plant level
Material level
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PIR CONFIGURATION : Things to be configured.

Number ranges ( but before creating no. Ranges, create element group then create no.
Ranges and then assign the element to the element group)
Screen field selection

PR CONFIGURATION : Things to be configured.

Config DOC type – NB standard to MMAT (as per my assign)
Number ranges
Field selection key ( make any fillup mandatory)
Screen field ( NBB MMAT)

PO CONFIGURATION : things to be configured.

 Doc type (NB MLOC) * As per my assign

Field selection key ( NBF MIMP)

Number ranges

Field settings

PO layout
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SUBCONTRACTING PROCUREMENT
Procuring materials from the vendor for which the client provides the material components to the
vendor and vendor make a final material from the given material.

THINGS TO BE MAINTAIN SUB-PROCUREMENT

 BOM ( bill of material)
 Sub-con PIR
 PO with item cat L
 Save all the list of material mi10 Issue
 the material to the vendor me20
 GR
 MIRO

MOVEMENT TYPE USED FOR SUB-CON IS “541”

SUBCONTRACTING WITH SCRAP

THINGS TO KEEP
 Create material mm01
 BOM
 PIR
 PO
 Me20
 GR with 545 mvt type
 TF with 542 mvt type
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AUTOMATIC PO CREATION
This process will enable system to create the Purchase Orders automatically from the Purchase
Requisitions created in the system.
Things to be maintained

Create material master (check the auto PO in purchasing view)

Vendor master
PIR with check of standard
Source list with fixed vendor maintain
Create PR with source of supply assign
ME59N AUTO PO CREATION

CONSIGNMENT PROCESS
The vendor provides materials and stores them on your premises. The vendor remains the legal
owner of the material until you withdraw materials from the consignment stores.
Process flow:

create material
create vendor
create consignment PIR (check the consignment)

create PO with “K” item category.

Create GR with 101 mvt type
Transfer posting from vendor consignment to our sloc 411k mvt type
Invoice verification mrko
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SCHEDULING AGREEMENT
Scheduling agreement is outline agreement between vendor and ordering party for a predefined
material, defining particular time intervals at which material is required.
Process flow:
Create material
Me31l create S.A (acct type LP)
Me38 to maintain time and delivery etc)
Migo

TRANSFER POSTING
Transfer posting which is nothing but transfer of goods from one plant to another plant.

Some scenarios on transfer posting

Plant to plant (one step) – Mvt type  301

Plant to plant (two step) – mvt type  303 and 305
SL to SL – mvt type 311

TWO TYPES OF STO (STOCK TRANSPORT ORDER)

INTRA STO (MEANS within the company code)

Without delivery (within MM STO)

With delivery (with MM SD integration)

INTER STO ( means between 2 company code)


Without delivery (MM STO)

With delivery ( mm sd integration)
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PIPELINE PROCUREMENT
Pipeline production which is nothing but enters the production process directly through pipe -
oil, pipe line – water , cable – electricity and consumed accordingly.
Its similar to consignment but here there is no need of doing purchase order, with the
movement type 201.
Material type  PIPE ( this mat type is not qty or value updated)
We only record in MIGO transaction with mvt type 201 and special stock type P, hence need
not create any PO , no goods receipt)
Material is issued to the cost center.
No stock for these materials, no physical inventory.

Process flow
MM01 (with material type PIPE)
XK01
ME11
MIGO ( WITH A07 good issue , mvt type 201)
Settle the order by MRKO

RTP (RETURN TRANSFORTABLE PACKAGING)

Packaging material or the means of transport which has to be returned to the supplier.
Example: oxygen-cylinder, milk container, water bottle, soft drink bottle, pallets and crates.
Material type – LEIH- returnable packaging only quantity based and not value based.
Post the goods receipt for the material with 101 movement type and add the non-ordered
material through 501 movement type with special stock type – M to accept RTP
If consumed to some of the materials, then we will have to return the packaging material for
those material which has been provided from supplier.

Process flow

Create mm01
Create XK01
Create PO me21n
Post grn MIGO
Stock overiew MMBE
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SUBSEQUENT ADJUSTMENT
After creating GR Accounting entries will be created such as BSX,WRX

BSX ( DEBIT +) ADDING TO THE INVENTORY

WRX ( CREDIT - ) REMOVING FROM INVENTORY

BSX IT’S A STOCK ACCOUNT WHILE ADDING MATERIAL TO STOCK ITS WILL (+) IF WE REMOVING
ITS (-)
WRX IT’S A GL ACCOUNT COMES TO PICTURE WHILE DOING INVOICE

KBS IT’S A VENDOR ACCOUNT COMES TO PICTURE WHILE DOING PAYMENT

THERE ARE 3 TYPES OF SUBSEQUENT

1) SUBSEQUENT DEBIT
2) SUBSEQUENT CREDIT
3) RETURN PO/CREDIT MEMO

SUBSEQUENT DEBIT In this scenario we are going to pay the extra amount due to some reasons here just we
doing one more invoice by means verifying given from vendor against the same po number OR in simple words
sometimes vendor tells us to pay additional for some margin.

SUBSEQUENT CREDIT In this situation vendor will return the amount which we had paid additional due to
some reason price will go down and vendor return the additional amount. Or in other simple words If vendor
pay an return amount to customer then it can be called as Subsequent credit
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RETURN PO OR CREDIT MEMO If material is damaged& returns to vendor then it can done using Return and it
is said as credit memo.
If we use normal invoice instead of credit memo then the balance amount cannot be entered.

INDIRECT PROCUREMENT

Indirect procurement or indirect sourcing is the process of buying material that isn't a direct input to
the end product that you manufacture. Some examples are stationery and office supplies, your
housekeeping and other services vendor contracts, and also hardware such as computers, printers,
network and telecommunications provider etc.
THERE ARE 2 TYPES OF INDIRECT PROCUREMENT

1. NON – STOCK MATERIAL

Will procure it and consume it
2. NON – VALUATED MATERIAL
Will procure it and store it.

Non – stock material

We’ll procure the procurement with respect to,

1) Material master (with NLAG as M.T )
with OMS2 qty and value unchecked
General data and purchasing view check
And procure all material with COST CENTER.

2) WITHOUT MATERIAL MASTER (text PO)

Only cost centre

Non – valuated material

We’ll procure the procurement with respect to,
1) With material master (UNBW) with qty and value unchecked
General data, purchasing view and plant data checked.
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SERVICES PROCUREMENT
Services procurement can be done by with service master or without services master.

There are 2 types of services procurement

Planned services
Unplanned services

Path to be followed

Create services master with tcode AC03

Create PO with item cat D and account assignment as K all the goods information will come to
po from service master
We don’t any GR directly we go to service entry sheet with tcode of ML81N
Automatically GR will be posted
Invoice.

SPLIT VALUATION
Stock that is procured externally from a vendor has a different valuation price than the stock
of an in- house production. You can have different accounting views for same material.
Things to be followed for the configuration.

Valuation types
Valuation category
Assignment (assigned to non valuation category)

INTER STO & INTRA STO

INTRA STO : Transfer of material from one plant to another plant within a company code.

INTER STO : Transfer of material between 2 plant of different company code.

When it comes to STO we call the 2 plants as supplying plant and receiving plant. i.e supplying plant will
be vendor and receiving plant or ordering plant will be customer.
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NOTE: IN intra STO we wont be doing invoice as of its of same plant.

Some difference between intra STO and inter STO

INTRA STO INTER STO

Doc type UB NB
Item cat U N/A
Del. types NL NLEC
customer YES YES
invoice N/A YES
VENDOR N/A YES

PRICING PROCEDURE

Pricing procedure in MM module is a way to determine prices in purchasing documents

Here,

PBXX and PB00 are gross price which are manual and automatic.

RA01 and FRA1 are discount and freight .These are all said as condition types or standard condition we use d
to day.

THEIRE ARE 2 TYPES OF CONDITION TYPES

1. HEADER CONDITIONS
2. ITEM CONDITIONS

PBXX GROSS PRICE BUT ENTERED MANUALLY

PB00 GROSS PRICE PICKED AUTOMATICHALY FROM PIR

RA0 DISCOUNT
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IN THE CONDITION TYPE THERE ARE CALCULATING SCHEMA

1) PURCHASE ORDER SCHEMA

2) VENDOR SCHEMA

steps to be followed

Define condition types

Define calculation schema

Define schema group

Define schema determination

AUTOMATIC ACCOUNT DETERMINATION

in SAP system some configuration for account determination is done so that system will automatically
determine the correct G/L account that needs to be posted. G/L account is posted when goods receipt is
done as well as during clearing invoice verification.
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