SAP MM :

Day:-1

SAP DATA :

1. Organizational Data or Enterprise structure

( company , plant, purchase organization , sales organization , stores etc.,)

2. Master Data
( Materials master data, vendor master data, customer master data , employees data , etc.,,, )

3. Transactional Data.
( Purchase requisition ( PR) , RFQ ( Request for Quotation), Purchase order , Goods Receipt (GR) , Invoice receipt (IR) ,
etc.,,)
Customization ( backend )
Customize all the data’s , i.e., organizational data , master data, transactional data (to some extent)

End user side ( Front end )

- In the defined plants , purch orgs., creating master records i.,e material master record, vendor master record ,
etc and with this master records , create business transaction documents i.e., PR , RFQ, PO, GR, and IR etc.,,
 ENTERPRISE STRUCTURE

- In SAP Client , code should be unique and company codes should be unit for each company.
- Company code should also be unique for each but may be used same or twice of company for any single company code.
- Similarly, plants, purchase organisations and storage locations must be unique for each single entity within the company
codes.

1. Client : commercially , technically, it is also an organizational unit or level which contains a set of tables , master records.
It is top organizational level in sap and it is 3 digit numberic number .

- in real time we work on the clients prescribed by the basis consultants , creating new clients ( eg., 100, 200, 300, etc., ) we
will be working with these clients only .

System landscape in real time

development server --------> Quality Server -------------- > Production Server
( SAP consultants) ( Testing will be performed) ( End users only)

2. Company Code : It is a separate entity for accounting department at this level accounts are maintained by Finance , to
maintain the client’s business in GL accounts.
Business balance sheet , profit and loss statements etc, will be carried out at company code level.
It is an internal accounting department in an organization.
Plant : It is a manufacturing unit or operational unit or sales branch or distribution center.

Purchasing organisations: It is a responsible to procure materials / services by negotiating terms and conditions from an
external vendor from internal plant.

Different types of Purchase organization:

1. Plant specific / local plant purchasing org.

2. Cross plant Purchasing organization
3. Cross company code purchase org.
4. Central purchase organization ( company code level)
5. Standard purchase organization
6. Reference purchase organization.

 when is central purchase org. involved ? What are its advantages?

If a material is required for multiple plants then central p.org will be involved and the advantage is better prices can be
obtained from the vendor.

 Cross company code purch. Org is assigned only at plant level but, not at company code level.
 One p.org can be assigned to only one company code. But, one company code can have multiple central purch.org.
 Reference purchase organisation will be involved in outline agreements( contracts and scheduling agreements).
Storage location: It is a place or a location where stock of material is kept . Only for storage location repetitive code is
possible but in different plant.

Q. What are the MM organizational levels

1. Purchase organization ( top level in MM).
2. Plant
3. Storage location ( least level in MM) .
Customization of Enterprise structure:

While practicing , for smoother performance of the assigned tasks, please use below

Company code:1000
Plant: 1000
P.Org : 1000 or create your own and assign it as standard purchase org .
S.loc: 0001 or create your own and use it.
Material : create your own
Vendor : 1000 or create your own vendor

Creation
GPP1- plant
PSL1- sloc-1
PSL2- sloc -2
GPPO- std purchase org.

Assigning
Comp code(1000)- plant- ( GPP1 )
Plant (GPP1) – P.org ( GPPO )
No need of assigning the slocations to the plant, as they’re already created or copied from the standard plant.
T001- Company code data table.
T001W- Plant data table
T001L – Storage location data table
T024E – Purchase organisation data table.
Master Data in Materials Management :

1. Material Master data

2. Vendor Master data
3. Purchasing Info record
4. Source list record
5. Quota arrangement record
6. Service Master Record
7. Batch Master record
8. Condition Records ( Pricing Procedure) .
1 . Material Master Record:

Material Type:
Eg: raw materials , semi finished , finished , spare parts, trading goods, etc.,
Material Type Control Functions

1. Number range , that is either internal or external or both.

2. Field selection : it means , which field is mandatory or optional or hidden or only display entries while creating the
material master.
3. Which user department is allowed to enter their data.
4 . External Procurement / in-house production .
5. Inventory is required or not on quantity or value basis.
6. Which valuation classes are to be allowed.
Material Type IMG Settings ( OMS2 ):

Define Material Number Range

(MMNR)

Creation of Material Master (MM01)

100000059
100000065
Basic data 1 & 2 details are maintained at client level in MARA table.
OME4

Automatic PO Pre-reqiusities

1. Select Automatic PO indicator in Material Master

2. Maintain a fixed Vendor for this material in quota arrangement ( 1st priority ) or source list or contract or info record.
3. In the vendor master , select automatic PO indicator
4. For this material and a vendor , maintain an info record in order to pick prices automatically in the Purchase order.
Note: ME59N – is the t.code to create automatic purchase orders.
Material Master Data tables.

MARA- client level data

MARC- Plant level Data
MARD – Storage location level data

MBEW – for accounting view (valuation Table)

Extend same material to other user department ( MM01 )

Extend same material to another Plant ( MM01)

Extend same material to another storage location ( MM01 )

Extend existing material to multiple storage location at a time. ( MMSC )

Change the material ( MM02 )

Note: If there is already stock of material in the storage location and also there are open PO’s and Production orders and
sales orders etc.. Then it is not possible to change base unit of measure , batch mgmt. and valuation classes etc.
Change the Material type: ( MMAM )
Change the Material Price ( MR21) :

Important Customization settings of Material Master:

( OMS9 ): Maintain field selection for data screens:

Flag Material for Deletion ( MM06 )

Delete or archieve the flagged material ( MM71)

Mass Maintenance ( MM17 )

Important T codes for checing the stock

MM60 – To display materials list

MMBE – To check stock overview
MB52 – To check stock overview for multiple materials
 VENDOR MASTER RECORD.
 It is maintained by both Purchasing and accounting department from their respective point of view.
 Before going to purchasing transactions vendor master in MK01 in purchasing point of view is to be created.
 Before going for invoice and payment transactions , extend the same vendor to accounting department in FK01
separately.
 Or else , vendor can be created for both the views in XK01.

Account Group : It classifies all our suppliers as vendors ordering address , goods suppliers , invoice presented by ,
forwarding agents, import vendors , one time vendor etc.,

(OMSG) :

Define the number ranges for vendor master record ( OMSJ ) :

CREATE VENDOR MASTER BY PURCHASING DEPARTMENT ( MK01)

Ex: if GR date is selected , here then against the PO when GR is posted then that Stock will be valuated with GR date price
which is in our database.
ABC Indicator

Based on ABC analysis , vendors are classified based on their significance to our company

A- Very important vendors

B- Medium important vendors
C- Low important vendors
It is only used for report / information purpose.

Vendor -34 created.

Create / Extend same vendor to accounting department using FK01

To Create Vendor Master Centrally by Purchasing & Accounting department ( XK01 )

Note :
LFA1 – General data / client level data table
LFB1 – Company code data table
LFM1 – Purchase org data table.
T.Codes

Purchase A/C Centrally

Create vendor MK01 FK01 XK01
CHANGE VENDOR MK02 FK02 XK02
DISPLAY VENDOR MK03 FK03 XK03
DISPLAY CHANGES IN VENDOR MK04 FK04 XK04
BLOCK/UN BLOCK VENDOR MK05 FK05 XK05
FLAG FOR DELETION VENDOR MK06 FK06 XK06
CHANGE A/C GROUP --- --- XK07
 PURCHASE INFO RECORDS

It contains information of material and vendor combination .

Main purpose of info record is to copy data from info record to PO, Quotation and outline agreements
Info record can be created manually by user or by automatically in the background during quotation or PO or outline
agreement by selecting * info update option.
 Info record is created with material master or without material master , with or without plant as well.

Types of Info records

1. Standard
2. Pipeline
3. Consignment
4. Sub-Contracting

To Define Number ranges for Info records ( OMEO)

To Define Screen layout ( OMF1) ( to display, hide, required, optional entry)

* Create Purchasing info record ( ME11 )

Infor record general data table will be maintained at client level and the table is EINA
Create info record without material master with material group ( ME11)

Note:

ME14 – Info Record changes display

ME15 – Flag for deletion of info record
MEMASSIN – Mass maintenance
ME1L – List of info records by vendor
ME1M – List of info records by material
ME1W – List of info records by material group.
 SOURCE LIST RECORD

 It is used to determine the list of available vendors for a particular material in a plant.
 Availability of a material with the vendors can also be maintained in the source list.
 Blocking of a vendor, inorder to avoid the purchasing from an authentic source can also be done .
 Fixing a vendor to purchase the material can also be utilized using source list record.

ME01 ( Maintain source list) :-

Note:

1. In same validity period , only one vendor is fixed vendor with material combination .
2. An info record is must to pick the price in Automatic Purchase order.
3. Source list data table is EORD.
 QUOTA ARRANGMENET RECORD.

 If a material is required in huge quantity then % of quotas are allocated to several vendors in Quota arrangement record.
 It determines vendors from quota arrangement to Purchase Requisition

MEQ1 :
 PURCHASING

We can procure material / service from external vendor or from internal plant in standard process (or) in consignment /
sub contracting processes etc…,
Procurement Cycle:

Purchase Requisition (PR)

Approval of PR ( in SAP , called as Release strategy)

Request for Quotation (RFQ)

Maintain Quotation

Price Comparision

Purchase Order ( PO )

Approval of PO ( in SAP , release strategy for PO)

Goods Receipt

Invoice Receipt
Types of Purchasing Documents

1 . Purchase requisition ( PR) ( internal purchasing document)

2. Request for Quotation (RFQ) ( external purchasing document)
3. Purchase Order ( PO ) ( External purchasing document)
4. Contract ( External )
5. Scheduling Agreement ( External )

Document Types:
1. Number ranges
2. Field selection
3. Allowed item categories

Item categories

Procurement Cycle
1. Purchase Requistion :

Create Purchase requisition ( ME51N)

1st priority – Quota arrangement
2nd - source list
3rd –contract
4th – info record .

Note : In PR itself , if vendors are assigned and directly PO’s are created to that vendor without referring to RFQs and
Quotation , then it is called Optimised purchasing.

Note : List of Purchase requisition displays – ME5A.

Created PR- 227.

REQUEST FOR QUOTATION

NUMBER RANGES:

Create RFQ ( ME41 ) :

Price Comparison ( ME49 ) :

Purchase Order

IMG Settings

Create PO ( ME21N )

Header Level Data

Item level Data

Standard PO created under the number 102

PRINT OR TRANSMIT PURCHASE ORDER TO VENDOR ( ME9F ) :

 INVENTORY MANAGEMENT

* Managing of stock of material in warehouse on Quantity and value basis is known as inventory management

 In SAP for Materials inventory is essential or not is controlled at material type and valuation area combination.
 In OMS2 Screen, select any material type and click on Qty / value updating button on left side.

Val.area matl type Qty updating Value updating

1000 ROH √ √
2000 ROH √ √

GOODS MOVEMENTS
1. Goods Receipt
2. Goods Issue
3. Stock Transfer
4. Transfer Posting
RESULTS OF GOODS MOVEMENT :-

1.
2.
3.
4.
5.

MOVEMENT TYPE:

Movement type control functions

 Field selection at item level

 Accounting documents has to be generated or not.

Define Number ranges - OMBT t.code for Material and physical inv. Documents.

IB- Physical inventory documents

WA- Goods Issues , Transfer postings & Other GRs
WE- GR for Purchase order
WF- GR for production order
Etc……..
 GOODS RECEIPT
GOODS RECEIPT WITH RESPECT TO PURCHASE ORDER

(MIGO)

5000002331

Display Material Document ( Migo)

GR Blocked Stock ( 103 Movement Type)

At GR , if material is placed outside the warehouse without taking the ownership of material is called GR blocked stock.

This may be due to quality inspection or any other reason .

After it is approved by the quality department , the stock will be released from GR Blocked stock to un-restricted
stoscenario
Step 1: create purchase order for a material with qty :100 pcs in ME21N.
Step 2 : MIGO , GR into GR blocked stock using 103 mvmt type
Material document 5000002347 posted
Step3: check the stock in MMBE
Step 4: Release GR blocked stock to warehouse using 105 mvmt type.
enter storage location, check item ok and then post the material document.
Step 5: observe the stock in MMBE under un restricted stock.
BLOCKED STOCK:

STEP1: ME21N , Create a PO with a material and qty-100pcs with price 100 EUR/pc
Step 2: MIGO , enter blocked stock using 107 mvmt type ,
Step3: observe the material document for FI Accounting documents gets generated.
Step4: check MMBE for stock.
Step5: Release the blocked stock using 109 mvmt type.
Step5: observe the stock in MMBE

RETURN DELIVERIES TO VENDOR ( 122 )

TEST SCENARIO

STEP 1: CREATE A PO , FOR 10 PCS , WITH EUR.100/PC

STEP 2: GR FOR ABOVE PO FOR ALL THE PCS WITH 101 MVMT TYPE . 5000002566
OBSERVE STOCK IN MMBE AND DISPLAY MATERIAL DOCUMENT FOR ACCOUNTING DOCS.
STEP 3: RETURN DELIVERY TO VENDOR ( DUE TO POOR QUALITY) , FOR 2 PCS ONLY. ( MIGO ) – 122 Mvmt
reason for mvmt : 0001 – Poor Quality . 5000002567
 In MMBE , stock is decreased and in A/c document , GL A/c credited (-) with BSX and GR/ IR cleasering account is
debited with (+) with WRX.
STEP 4 : SUBSEQUENT DELIVERY ( MIGO )
If vendor replaces the return delivery goods to us then enter subsequent delivery as follows:5000002568
 RETURN DELIVERIES WITH REFERENCE TO RETURN PO
If existing stock has to be returned to same supplier or vendor or even different vendor , but vendor may not accept the goods
with the same price ( price of purchase) then negotiate with the vendor with the agreed price create a Return PO and collect
return goods amount from vendor with credit memo.
Eg., for dead stock , companies go with Return PO scenario.

Test Scenario:
Step 1: Create PO with the negotiated price with the vendor , to whom you’re willing to give your dead stock.
check  Returns item check box , in the line item. 4500023484
Step 2: MIGO for the returns item.
5000002569
 Observe the stock in MMBE and also observe A/c documents in the Material document.

Step 3: In order to receive the amount from the vendor , we will receive that in the form of credit memo.

Credit Memo ( MIRO )

Transaction : 2- Credit Memo

In PO reference tab ( enter the PO number here)

Enter relevant taxes , enter the balance in the amount tab.
Save the credit memo.
Q) What is the difference between 122 and 161 mvmt type?
A) 122 Mvmt type is for Return Delivery to Vendor with reference to Normal PO
whereas , 161 mvmt type is for Return delivery to vendor with respect to Return PO.

 GR without Purchase order : ( 501 mvmt type)

In order to have some stock , for whatever reason in the storage location, we can go with the 501 mvmt type.
This is not the initial entry of stock balance.
MIGO

 GR for initial entry of Stock balances ( 561 mvmt)

In real time after completion of implementation and before go live process, in Production server for the materials
physically stock exist , those materials are uploaded into the SAP system with BDC ( batch data communication ) or LSMW (
legacy system migration workbench) method.

Test scenario:
Step 1: MIGO for GR with 561 mvmt type for a material with Qty: 10 pcs
 GOODS ISSUE
Issuing of stock of material from store to any internal consumption or to production / cost center , to sales or to scrap etc..
Is known as goods issue.

Goods Issue to Production

Step 1: create a production order ( CO01) :
Material – P101 , Qty : 2pcs, END date : 20.02.2019
Component overview- to check the BOM
Click release and save the Production order - 100004220

Step2: Goods Issue for raw materials w.r.to Production order ( MIGO )

A07-Goods Issue A08-Order 100004220 Mvmt 261

4900005515
Note :
Observe the stock in MMBE and also observe the A/c document
In A/c document stock value decreases with BSX and consumption Value increases with Trnascation GBB with A/c
modifier VBR for each issued raw material .
Step3: Confirm the production order-100004220 using CO11-tcode.
Step4: receive the finished product produced by production ( P-101) as per production order.
perform this step same as the purchase order , it will be 101 mvmt type.
GOODS ISSUE TO A COST CENTER ( 201 Mvmt) :

Cost center : wherever the cost is incurring , that I known as cost center,
Eg: any department which wants material can be treated as cost center.
Test scenario:
Note, make sure there’s enough stock available to perform step 1.
Step1 : GI to cost center ( 201 mvmt type)- MIGO-4900005517

Assignment: GOODS ISSUE TO SCRAP ( 551 Mvmt )

 STOCK TRANSFERS
Physical transfer of material from one location to another location , that is from one store to another store within plant.
Or one plant to another plant within the company code.

Store to Store stock transfer within plant

a. One step procedure.
b. Two step procedure.

a. Store to store STO within plant – one step procedure:

TEST SCENARIO
*Make sure, the material is extended for both the storage locations(supply and receiving) in MM01 .
*Make sure , stock is available in the supply store.
Step 1:
MIGO
Transfer posting other mvmt-311
4900005518

b. Store to store STO within plant – two step procedure: ( 313, 315)
TEST SCENARIO
*Make sure, the material is extended for both the storage locations(supply and receiving) in MM01 .
*Make sure , stock is available in the supply store.
STEP 1: REMOVE STOCK FROM SUPPLY STORE TO TRANSIT
MIGO
TRANSFER POSTING OTHER 313 MVMT
ENTER MATERIAL, QTY ,
RECEIVE AND SUPPLY STORE WITHIN SAME PLANT.
SAVE.
4900005519
OBSERVE THE STOCK IN MMBE,
STOCK IS DECREASED IN SUPPLY STORE AND IS INCREASED IN TRANSIT BUT NOT IN RECEIVE STORE.

STEP2 : PLACE THE STOCK IN RECEIVE STORE FROM TRANSIT. ( 315 Mvmt)
MIGO
PLACE IN STORAGE MATERIAL DOCUMENT 4900005519
In where tab.,
Observe mvmt type -315 picked automatically
4900005520
Observe the stock in MMBE. Stock is decreased in transit and increased in receive store .
no A/c docs created, as this is store to store transfer.
STOCK TRANSFER FROM PLANT TO PLANT WITHIN COMPANY CODE.
A. ONE STEP PROCEDURE
B. TWO STEP PROCEDURE.

A. Plant to plant in one step procedure ( 301 mvmt )

Ensure material is created in both the plants ( receiving and supplying).

Observe the prices and price control indicators in both the plants., in material master a/c -1 view, observe stock overview
(MMBE)

Test Scenario
Step1: MIGO

Transfer posting other mvmt -301

4900005521

B. Plant to plant in Two step procedure. ( 303 & 305 )

Ensure material is created in both the plants ( receiving and supplying).
Observe the prices and price control indicators in both the plants., in material master a/c -1 view, observe stock overview
(MMBE)
Step1: MIGO for removing stock from receiving plant to transit
4900005525
Step 2: place the transit stock into receiving plant ( MIGO ) -305 mvmt type
4900005526
No A/c docs gets generated .
Observe the Stock in MMBE

TRANSFER POSTINGS

Local transfer of material within storage location, i.e.., from one stock type to another stock type., material to material and
special stock to our own stock etc., is know as transfer postings.

Transfer posting from un-restricted stock to Quality inspection (MIGO ) ( 322Mvmt )

Transfer posting other mvmt 322 ( Un-restricted Quality inspection)

321  Quality inspection to un-restricted .

343  Blocked stock to un-restricted
344 unrestricted to blocked
309 – Mmvmt type:

If there is material to material transformation ex., Milk to curd in dairy industry .

In such cases , material is transformed from one form to another, so the same has to be indicated in the stock .
In order to process such materials, we need to have some pre-requisite.
i. Maintain both the materials with same UOM
ii. Material should exist inorder to transform its form from one to another.

Test scenario.:

Step 1: create two materials with same UOM.

238 – Milk
239- Curd

Step2: maintain some milk in your plant. Using 501 mvmt type.
GR w/o PO. MIGO.
4900005528

Step3 : Convert the Milk into curd , using 309 mvmt type. ( transfer posting from material to material )
MIGO.
Transfer posting other 309 mvmt
4900005529
OBSERVE MMBE FOR both milk and curd Quantities .

Notes:

MIGO

Test scenario:

Cancellation material doc number.

Also , the stock will be reversed in MMBE , and G/L a/c will also be reversed.
 RESERVATION
Reserving of material in advance for future purpose , is known as reservation.

Test Scenario:
 Reserving a material against a cost center.
 Pre requisite: create a material, maintain stock of that material.

Step1 : create reservation in MB21 .

0000089435
Observe stock in MMBE and MB25.( MB25 is the list of reservations)
Step2: goods Issue against the reservation ( MIGO )

Observe MB25 and MMBE.

 RELEASE STRATEGY OR RELEASE PROCEDURE
Release procedure :

Test scenario

1)Create Characteristic for net order value as follows:- (CT04)

Characteristic Name: Char_netorder

2) Create characteristic for Purchase group field: (CT04)

Characteristic Name: Char_purgroup

3) Group the Characters together and assign a class to it. ( CL02N)

Class name: class_extdoc

4) Define Release procedure for PO

 release groups
 LOGISTICS INVOICE VERIFICATION
Before 4.6c version LIV was know as conventional invoice verification and after 4.6c version onwards it was named as
Logistics Invoice verification was introduced.

Following are the advantages of LIV when compared to CIV

 We can display or hide the work list

 We can display or hide the PO structure
 We can park or hide the invoice.
 Invoice verification in background is possible
 Cross company code clearing account posting is possible in case of inter company stock transfer.

Types of Invoice Transactions

1. Invoice
2. Credit Memo
3. Subsequent Credit
4. Subsequent Debit
1. Invoice Verification

It is the final step in procurement cycle.

It verifies the document in accordance with purchase order , in order to proceed with the payment to the vendor.

Test scenario:
1. Create PO in ME21N for material-x, qty :100 pcs @ 100 EUR/pc. + taxes-4500023532
2. Enter GR in MIGO for the above PO for all the Goods Qty.
3. Invoice verification ( MIRO )

• Entering of Invoice Receipt before Goods Receipt.

Test Scenario
Step 1: Create PO for 10 pcs with 100 EUR/pc in invoice tab uncheck GR Based IV button.
Step 2: Invioce Verificaiton ( MIRO )
Document no. 5105610041 created (Blocked for payment)
Step 3: Releasing of Blocked invoices ( MRBR) :
Q) What is 3 way check?
A) Verification of invoice document based on Purchase order and Goods receipt is known as 3-way check.

Q) What is 2 way check.

A) In purchase order if GR based-IV is not selected then invoice document ( Qty & Price ) will be verified based on the
Purchse order document ( Qty & Price) only. This is known as 2-way check.

Manual Invoice blocking

Blocking of an invoice intentionally with a reason is known as manual invoice blocking.

Test Scenario:

Step1: create a PO for 10 pcs with 100 EUR/pc- 4500023534

Step 2: GR for 10 pcs
Step 3: Block the invoice manually. Go to payment tab: paymnt block : Block for payment.
Save the document .
Document no. 5105610042 created (Blocked for payment)
Step4: Release the invoice in ( MRBR)

*Observe the above document whether the status changed to release, Go to MIR4
*Stochastically blocking an invoice. ( monthly wise)

Settings:

Test Scenario:

Step1: Create a purchase orde with the value greater than the threshold value .
Step 2: enter GR for the total qty for the above PO
Step 3: Enter IR as usual,,
After saving , observe the message as below
Document no. 5105610043 created (Blocked for payment).
This is blocked due to threshold value has exceeded ( random / stochastic block )
Step4: Release the above invoice in MRBR .
Select ( stochastic block) then execute.
Flag the release indicator in order to release the invoice.

• Revert the settings of stochastic .

Q) In how many ways the invoice can be blocked ?

A) 1. Blocked due to variance ( qty , quality , price , date etc.,,)
2. Manual payment block
3. Stochastically block.
 CREDIT MEMO:
credit memos are entered to reduce the amount on excess quantity or to collect the amount from vendor for return goods
etc.,,,

Example 1:
Step 1: create a PO for 10 pcs , with 100 EUR/pc , - uncheck □ GR Based –IV . Save PO-4500023538
Step 2: MIGO for 8 pcs only. And post the GR.
Step3: Enter Invoice, with respect to Purchase order for full PO qty , rather than 8 pcs as per GR qty.
Assume vendor has promised to deliver 2 pcs after some time.
(MIRO)
Step4: credit memo:
Credit Memo ( MIRO )
Transaction : 2- Credit Memo

In PO reference tab ( enter the PO number here)

Enter price for the 2 pcs with taxes and click on calculate tax check-box
Enter relevant taxes , enter the balance in the amount tab.
Save the credit memo.
 SUBSEQUENT DEBIT:
Test Scenario:
Step1: Create a PO for 10 pcs with 100 EUR /pc
Step2 : enter GR for 10 pcs w.r.to above PO
Step3: enter IR as usual for the PO and GR qty.
Note: assume due to price fluctuation/quality reasons, vendor is asking to pay additional amount say 10 EUR/pc on
already invoiced quantity of 10 pcs. But not on extra quantity. Then in such case, enter the subsequent debit.
Step4 : subsequent debit for 10 pcs @ 10 EUR/pc .
MIRO
Transaction : Subsequent debit.

Step5: release the above blocked subsequent debit document. In MRBR

SUBSEQUENT CREDIT
Test Scenario:
Step 1: Create a Po for 10 pcs with 100 USD/pc-4500023550
Step 2: enter GR for above PO for all the 10 pcs- 5000002621
Step 3: Enter IR for the 10 pcs as per PO price.
• Assume due to poor quality/ price fluctuations , on already invoiced Qty 10 pcs, we want to reduce the amount , say 10
USD/pc and is to be collected from the vendor, then enter subsequent credit memo as follows :-
Note:
 In subsequent credit and subsequent debit , Quantity is fixed but the amount is fluctuating.

Q) What is the difference b/w Credit memo and Subsequent Credit.

A) Credit memo is entered to reduce the amount on excess quantity invoiced whereas, in subsequent credit, the Quantity
is fixed but amount is reduced ( price is dropped) .

DELIVERY COSTS
There are two types of delivery costs:
1. Planned delivery cost
2. Un-planned delivery cost.

1. Planned delivery cost : the delivery cost which are planned in Purchase order itself, are known as planned delivery cost.
Ex.: freight charges, customs, etc, condition types are included in the PO.

Test Scenario:
Step 1: Create a PO , for 10 pcs with gross price as 100 Rs/pc and enter freight condition type FRC1 , say 10 Rs/pc
4500023552
Step 2: Enter GR for above PO. And observe the A/c documents.
Step 3: Enter IR only for the goods from main vendor ( here 1000 is the main vendor.)
Step 4: Enter IR for freight , for the freight vendor ( here 34 is the freight vendor).
UNPLANNED DELIVERY COST:
Delivery cost which are not planned and are not included in the Purchase order and is directly coming from the freight
vendor ( same as main vendor or different vendor ) are called as un-planned delivery cost.

Settings for unplanned delivery cost:

Company code unplanned deliv.cost
1000 blank ( preferred is blank)
2 - it will post the amount to different G/L account with trnx key UBF.
Test Scenario:
Step 1: PO for 10 pcs with net price 100 USD/pc without freight charges in condition type.
Step 2: GR for above PO.
Step 3: IR for 10 pcs + add un-planned delivery cost in the same invoice.

PARK INVOICE ( MIR7 )

Daily 100’s of invoices will be received from vendors, and for every invoice to be checked will take huge time. In such
case Junior Accountants will park the invoices in system, and will have no authorization to post the invoice.
Later, seniors or superiors will review those parked invoices and will post after cross verifying them.

Test Scenario
Step 1: Create a PO 4500023554
Step 2: Enter GR for above PO.
Step 3: Parking of invoice ( MIR7 )  Document number 5105610053 has been parked.
Step 4: Post the parked invoice ( MIRO )
HOLD INVOICE:
During the invoice is being posted, if users find any ambiguity in the document received from the vendor, instead of
exiting from the document , user will have option to hold the invoice in MIRO .
Invoice number will be generated but will be held against without any accounting document generation . And whenever
the missing information is available or the invoice is OK to be posted then, in the MIRO screen, by clicking show worklist
and under the held documents, it can be retrieved and can be posted .

EVALUATED RECEIPT SETTLEMENT (ERS)

In this process we will not receive the invoice from the vendor , instead of that our system will generate the invoices
automatically based on the GR Quantity and Purchase order price. ( condition, vendor has to accept it.).
Pre- requisites
1. In vendor master, select
auto ERS delivery
Auto ERS Return
GR based – IV
2. In info-record
un-check □ NO ERS
3. Maintain condition record in NACE t-code ( for ERS Output type) .
Test Scenario:
Step1: create PO for above vendor + material with some price.
√ ERS
√ GR Based –IV
Tax code ( enter tax code)
4500023557
Step 2: Enter GR for full qty or partial qty .
suppose , enter it for 8 pcs only.
Post the GR document.

Step3: ERS ( Automatic Invoice receipt ) ( MRRL )

First, test run
Then, settle good items + planned delivery cost then execute .
Observe the created FI docs, according to the GR qty and PO price.

Step 4: Print / Transmit ERS ( Automatic IR Document ) to vendor

MR90

-------- END OF LIV --------

SPECIAL STOCK PROCUREMENT

THERE ARE DIFFERENT TYPES OF SPECIAL PROCUREMENT

1. PIPE LINE
2. CONSIGNMENT
3. SUB-CONTRACTING*
4. STOCK TRANSFERS ( NOT INCLUDED IN YOUR TRAINING SYLLABUS)

PIPE LINE PROCUREMENT

SETTING IN PIEPLINE
OMS2
TEST SCENARIO:
STEP1: create a material for pipe line material type – PIPE say for “ Gas “ with MM views in MM01.
in A/c -1 view, valuation class is optional , because value updation is not selected. - 255 created
STEP2: Create info record in ME11
vendor-1000, material – 255 , p.org-1000(std) , plant-1000
info category – pipeline.
If plant is having multiple p.orgs , then enter standard purchasing organization here and this standard p.org info record prices
only will be picked in automatic settlement.
Step 3: Goods issue for pipeline material ( MIGO )
issue with respect to cost center (1000)
201 P
1000 – cost center Vendor -1000
Qty : 10 kgs Material –
Note: Before sending the GI docuemnts to vendor, maintain condition record for GI output type in NACE t.code.

Step 4: MB90 – send the GI document to vendor ,

Output type : WA01
Material Document No :-----------
Note:
Before Settlement (IR) , maintain condition record in NACE t.code with application MR, for output type KONS , with its
condition record and maintain output type to be fax/email/ etc..,

Step 5: Automatic Settlement

( MRKO )
Comp.code :1000
Vendor:1000
Plant: 1000
Material : 255
√ pipeline
Processing  display first / then next processing
Click execute.
Step 6: print / transmit the above settled dcouemnt, in MR90 / MR91.
MR91

Out put type : kons

Sort order 01
Processing mode 1
Doc. Number :- settled document number

Execute.

CONSIGNMENT
In this process , vendor places his material stock in our warehouse and immediately no invoice, no payment to vendor is
made. Whenever material is required with drawl it from vendor consignment stock and consume it to production, sales, cost
center , etc., & for this withdrawal quantity settle liabilities to vendor immediately.

Test scenario:100000138
Step 1: create info record
ME11
mat- x plant -1000 p.org-1000 std. purch.org.
Info category : consignment.
Step 2: create Purchase requisition

item cat material qty UOM plant

K 100000138 1000 pcs 1000

0000000515
Note: RFQ and quotations are also possible , and in quotation if info update is selected then info records updates or gets
created with info category consignment in the background.

Step 3: Create PO for above PR

Enter above PR number ,

4500023765
Step 4: MIGO w.r.to PO .

Note : in MMBE , our own stock is not increased, instead vendor consignment stock is increased.
this consignement lying in our plant is not valuated stock of our company and still belongs to the vendor ., that’s
the reason no A/c documents are generated at GR . Goto MIGO display document and check if any A/c document exists.

Step 5: MIGO , Goods issue to cost center .

Mvmt : 201 K , plant -1000, sloc-0001,
In MMBE , observe, vendor consignment stock is decreased and A/c docs gets generated at Goods issue.
In A/c docs, at GI consumption G/L account debits with Trsnx GBB & VBR and A.c payable A.c credits with KON
Step 6: Automatic settlement ( IR ) ( MRKO )
Here , automatic settlement of consignement liablilities to vendor for Goods issue quantity only.

Comp. 1000
vendor:1000
plant:1000
Consignment
√ withdrawls not settled

Execute.

In next screen, observe the settlement doc number like IR A/c documents, which is created in background.

Note: matainain condition record for MR application , and output type KONS in NACE otherwise the settlement document
will not be created in MRKO

Step 7: print or transmit the settlement document in MR90 / MR91 with output type KONS
Output type: KONS
Doc. Numbe.
Execute

Print preview will be displayed

Note:
If consignment validity to period finishes and still there is some stock is left over under vendor consignment stock , then
enter transfer posting to convert the vendor consignment stock into our own stock with 411K- MVmt type ,in MIGO .
After the above step,
The stock will be transferred from vendor consignement stock to un-restricted stock., later create automatic settlement
document in MRKO t-code.

SUBCONTRACITNG
In this process material is procured from sub-contractor ( vendor ) by providing components or input materials from our
company to subcontractor .
This scenario of procurement is useful in big industries where there is lack of time, lack of skill recognition or
lack of infrastructure .

Test scenario:
Step 1: Create Finsihed / semi finished material : Z – MM01- 256
Create ROH material –C - 100000140
Create ROH material – D - 100000141
Step 2 : Create Bill of material for ordering product ( mat-Z ) in CS01
Step 3 : create PIR ( ME11 ) ( optional )
Step 4: create Purchase requisition ( ME51N) -0000000517
Step 5: create PO w.r.to above PR in ME21N- 4500023900
As the stock of raw material ( components ) is to be provided by us, we should have the stock of Mat-C & Mat-D readily
available in our plant to perform the transfer posting, inorder to send the material to sub-contractor.
So, purchase the material from different vendor and maintain the stock .
Here, as per test scenario , we will be maintaining the stock using 561 or 501 mvmt types , rather than running a
procurement scenario for the components in order to maintain stock.
 Maintain some stock using, 501 or 561 mvmt

Step 6: Transfer posting or Goods issue of components to sub contractor ( via invenetory mgmt.) -541 mvmt .
4900005595

Note : In MMBE , check for MAT- C & D and its quantity.

Provided raw material stock is decreased in our storeage location and increased with sub contractor.
but sub-contracting stock is still under our plant level , in MMBE , that’s the reason there are no A/c docuemnts
generated with 541 mvmt type.

Step 7: Assuming that the sub contractor has performed necessary actions and has produced the end product and can be
received in our plant ,
Perform, GR for finished product.
Here , observe the tree button , which will drill down the components under the MAT-Z , click on the components and
observe mvmt type 543 [O] - GI to sub stock, it means components are being consumed at sub-contractor in order to
produce the finished product .
Select , item ok
Click check and post the document.-5000002944
Q) In sub contracting process if material – x & y are provided to vendor and material Z is received from sub contractor
then how many G/L Accounts will be triggered?

A) For each provided component or Raw material 2 G/L A/cs will be created , stock G/L ac/ gets credited with BSX and
consumption G/L A/c debits with Transx key GBB with account modifier VBO.
For received finished product 2 G/L A/cs will be triggered i.e., finished product inventory G/L account debits
with BSX and additionally two more G/L A/cs will be triggered .
cost of goods sold G/L account credits with transaction key BSV., viz., ( offsetting entry
finished product inventory G/L account)
and purchased services G/L A/c debit with transaction FRL ( viz., opposite entry GR/IR with
transaction key WRX) . Total 8 G/l A/cs will be triggered.
If freight also there in PO then another two G/L a/c will be triggered ie., external procurement G/L a/c debit
with FRN transaction key and freight clearing account debits with FR1 .

Step 8: IR ( MIRO )
Transaction : Invoice

Now if suppose , after GR for Finished product, if vendor informs that any under consumption of components or raw
materials has taken place.,enter subsequent adjustment as follows.Ex; if vendor informs that the Material-D of 2 Qty is
left.., then it belongs to us and we have to collect it back from the vendor.
Step 9 : subsequent Adjustment of the left over material at the vendor
Raw material mvmt changes from 543 [O] – to 544 [O] +
5000003018
Check the MMBE screen for the availability of the stock shown as stock at sub contractor premises.

Step 10 : collect the material from the vendor by transfer posting

For the under consumption qty from sub contractor to our plant , it will be 542 mvmt type w/o PO reference in MIGO .
MIGO
 Observe MMBE , for the raw material under consumption Qty , it will be shifted from sub contracting stock to our own
stock.

CO-PRODUCT HANDLING IN SUB CONTRACTING:

While producing finished product with the components , if parallel another product is also being produced along with
the main finished product viz., called as co-product.
Then in sub-contracting we are liable to received that co-product as well with the main finished product., it will also be
accounted in our stock.
Test scenario:

Step 1: create material for co-product with HALB or FERT

In MRP 1or 2 screen ,
select co-product check box and Procurement as “X”
Save the material.- 263
Step 2 : Add the co-product to the BOM in CS02 t.code.
check the co-product button , after selecting the co-product line item and clicking the F7 button in the next screen.
Step 3: Create PO for the finished material . ( 256 ) and observe the components in material tab. 4500023982
As the stock of raw material ( components ) is to be provided by us, we should have the stock of Mat-C & Mat-D readily
available in our plant to perform the transfer posting, inorder to send the material to sub-contractor.
So, purchase the material from different vendor and maintain the stock .
Here, as per test scenario , we will be maintaining the stock using 561 or 501 mvmt types , rather than running a
procurement scenario for the components in order to maintain stock.
 Maintain some stock using, 501 or 561 mvmt

Step 4: Transfer posting or Goods issue of components to sub contractor ( via invenetory mgmt.) -541 mvmt
4900005719
Note : In MMBE , check for MAT- C & D and its quantity.
Provided raw material stock is decreased in our storeage location and increased with sub contractor.
but sub-contracting stock is still under our plant level , in MMBE , that’s the reason there are no A/c docuemnts
generated with 541 mvmt type.
Also check ME2O for sub contracting stock .
Step 5 : GR for the finished product ( main product 256 material ) ,

Obsreve the movement type for co-product as 545 [O] + in the Material display .
Now, observe, ME2O for sub contracting stock .
Also MMBE for the stock
STOCK TRANSFERS:
Types:

1. Stock transfer from plant to plant with one step procedure:-

MB1B / MIGO Mvmt type: 301
2. Stock transfer from plant to plant with two step procedure :
MIGO Mvmt : 303 & 305
3. Stock transport order without SD shipping and without billing
PO doc type: UB supplying plant Mvmt Type : 351
Receiving plant Mvmt type : 101
4. Stock transport order with SD shipping and without billing
PO doc type : UB Outbound delivery using SD shipping : NL
Post goods issue mvmt type: 641
Goods Receipt Mvmt type: 101

3. STO:

IMG SETTINGS:
SUPPLY PLANT SETTINGS :
1. CHECK THE DOCUMENT TYPE in supplying plant.
UB doc type , click allowed item category and allow only item category : U

If Purchase order is created with this purch org (1000) and with the document type UB to this supplying plant then this
pricing procedure RM2000 will determine the PO item condition tab.
Test Scenario:
• Note: make sure , a material is created and extended in both the plants ( supplyin reciving plant.)
• Make sure , stock is maintained in the supplying plant in order to transfer it to receiving plant when requested.

Step 1: Create STO in ME21N

UB document type.
Supplying plant : 1000
Receving plant :1100
Item cat: U
Observe conditions tab, because of P101 condition type, there is no net price in the item row.
Save the PO
4500024036
observe the MMBE for on order stock.

Step 2: Issue goods from supplying plant using mvmt : 351.

4900005722
observe MMBE for stock being decreased in supplying plant but will not increase at this point in receving plant but will
increase in transit
Also, you check thi stock in MB5T ( to check stock in transit).
Step 3: receive the material in reciveving plant ( 1100 ) MIGO.
No A.c docs are created at GR because stock values are updated in the while goods issue is done .
No invoice for goods due to item category U , but for freight if required can enter Invoice receipt for freight vendor.
 ACCOUNT DETERMINATION
OR AUTOMATIC ACCOUNT DETERMINATION ( MM – FI INTEGRATION )

It determines G/L Accounts automatically during goods movements ( GR, GI , etc.., )

IMG SETTINGS:
Account Determination without wizard.

Note: The valuation areas which requires same account determination , assign those valuation areas to same valuation
grouping code and later configure account determination at valuation grouping code level then that A/c determination is
applicable to all plants., which are there in the valuation grouping code.

Note : one A/c cat ref. can be assigned to multiple valuation classes. But one valuation class can be assigned to only one
A/c cat ref.

Note : one material type is assigned to only one A/c cat. Ref. but one A/c cat.ref can be assigned to multiple material
types.

Note: here, movment type valuation strings are assigned in the combination of value update , quantity update , special
stock and movement indicator etc., combinations. And valuation string triggers some set of transaction keys but some
transaction keys ( such as, GBB, KON, PRD) again triggers A/c modifiers
TEST SCENARIO:
Step 1: create material using your material type ZROH- 100000147
Step 2: create Purchase order in ME21N . For above material.-4500024123
Step 3: Enter GR for above PO.
Observe the FI documents in material display .

SPLIT VALUATION
It is used to maintain different prices for a material i.es., for externally purchased stock one price and internally produced (
inhouse production ) another price . It also allows to maintain external procured stock value in one G/L account and
internally procured (inhouse produced) stock value in different G/L account.

Test Scenario:

Step 1 : Create a material with ROH material type , plant-1000, in A/c -1 view , select valuation category-G
and save the material.- 265 created.
Step 2: extend same material for external procurement : valuation type- EXT. ( MM01)
A/c -1 view :
val.class-3000
price control- V mvg. Avg price: 100. save material.
Step 3: extend the same material for internal procurement .
plant-1000, val.type- INT,
A/c-1 view,
Price control- S, val.class- 7900 ; std.price : 70 USD.
Save
Step 4: create PO for external vendor .
Valuation type: EXT ( will be chosen default.). 4500024272
Step 5: GR for above PO.
material tab:
val.type: EXT.
Item ok,
Post the GR.
Step 6: material display. 5000003281
Step 7: in MM03, observe with EXT valuation type, total stock and total value , as it belongs to external procurement type.

Task:

Extend the same material in another plant ex:1100, maintain some stock in 1100 and perform STO type 3 process and
observe the STO order , INT –valuation type is picked automatically.
Reciveing plant -1000, supply plant -1100.
 BATCH MANAGEMENT
 It is integration between, SD – MM – PP – QM
 Batch Management is used in industries such as beverages, pharmaceutical , chemical industries, dairy industry, FMCG.,
etc…
 It is for the convenience of a manufacturer to identify the batches and process it further .

IMG SETTINGS FOR BATCH MGMT:

** BATCH MANAGEMENT WITHOUT CLASSIFICATION

TEST SCENARIO:
STEP 1: Create a material in MM01, activate batch management in purchasing view.
Step 2: Create Batch Master receord in MSC1N 0000000669
Step 3: Create PO – ME21N-4500024279
Step 4: Goods Receipt MIGO.
5000003287
IN MMBE , check the stock for different batch numbers.
If batch number is restricted use then, stock will not appear in MMBE , go to MSC2N and change the batch status from
restricted to un-restricted., then check in MMBE.
-> when you try to issue the batch managed material then, the system proposes 2 different batches , you can choose from
which batch you want to issue material .
BATCH MANAGEMENT WITH CLASSIFICATION