Accounting Entries Related to MM Transactions

Accounting Entries related to MM transactions... Initial stock entry: Movement type - 561(Receipt per initial entry of stock balances into unrestricted-use) TCO! - M"1C FI Document Type - WA 89 Raw material BSX S 91 InitialStockentry GBB BSA  Physical inventory differences: Movement type # $%& ('oods ssue # *ysical nventory difference) t*is is tri++ered because of t*e movement type 1%&, *ic* is +iven *ile calculatin+ t*e difference # ./0 for ependiture2income from inventory differences TCO! - M%$ (M%1 3 M%4)  ocument Type -  81 In!entory"i##erence$% G&' GBB I() S 99 Raw material BSX  Goods Issue to Production Order: Movement type - &61 (Consumption for order from are*ouse) # /"R0 for internal +oods issues (for eample, for cost center) TCO! - M"17  ocument Type - 70 'oods ssue 81 Rawmaterial*on$umption GBB )BR S 99 Raw material BSX  In ca$e +o!ement type ,i!en i$ .1/*on$umption #or co$t center #rom ware0ou$e2 at t0e time o# +B1A $y$tem a$k$ #or t0e *3ST *4(T4R 5 G4(4RA' '4DG4R6 ere2 t0e account "etermination 0appen$ "irectly #rom +B1A an" not #rom t0e 3B7*6 Accountin, entry will e $ame a$ ao!e ecept t0e :Raw material *on$umption:; it tri,,er$ w0ate!er t0e G' ,i!en6 Goods Issue / Delivery: SD Movement type - 6%1 (Customer delivery) # /780 for +oods issues for sales orders it*out account assi+nment ob9ect (t*e account is not a cost element) TCO! - /:%&  ocument Type - :0 'oods ssue2elivery 81 +ater6 con$ume"&tra"in, ,oo"$ GBB )AX S wit0out co$t element COGS 99 Fini$0e" Goo"$ BSX 

Goods Receipt: FG PP Movement type - 1%1 ('oods Receipt) # '""-7;0 for +oods receipts for orders (it*out account assi+nment) and for order settlement if 7;7 is not maintained TCO! - M" GR / IR *learin,account ?1

)en"or account

WRX

WRX @BS

A=F



S 

S 

@BS % i$ wit0out any account "etermination an" po$tin, key$ are 81 5 916 It tri,,er$ w0en t0ere i$ no material i$ a$$i,ne" in t0e 3 at t0at time6 WRX % In ca$e o# any po$tin, reuire" wit0out material2 account "etermination $0oul" e wit0out !aluation cla$$6

I# price c0an,e" at t0e time o# IR2 t0en a$e" on t0e "i##erence in t0e material price $y$tem po$t$ amount$ to particular material account an" not to t0e price "i##erence account /t0i$ i$ relate" to t0e material$ wit0 price control % )6 Material aluation: MM +o!ement type TCO! - MR&& r2Cr Material # material valuation (belo +iven calculation) 3 MR&10 rice C*an+e (ifference amount posts to t*e material account and calculation is ((.e price # Old price) = >uantity)  ocument Type - R0 rice c*an+e # "elo entry in case of price increase 89 Ra! "aterial BSX S 9?

+aterial)aluation

C 

*alculation -

Euantity

=+B

*urrent Stock )alue 

/



Amount ,i!en in +R & Euantity ,i!en in +R  *r6

#illin$ Docu"ent: SD T*3D4 - )F.1 Billin, - )F11 *ancel Billin,  ocument Type - R/0 "illin+ document transfer - R0 Reversal of billin+ .1 Custo"er account BSX S H.

Sale$Re!enueaccount

=+B



MM- inte+ration0 7 conceptual understandin+ ? @C. Most of us are comfortable it* @--CO7 inte+ration concepts as it is easy to correlate and understandA "ut, *en it comes to MM- inte+ration, many of us find difficulties in understandin+ t*e concepts and account determination processA *en  as tryin+ to analyBe my first issue related to *o a stock account is determined in a valuated transaction,  as lost in O"CA :et us try to understand fe terminolo+y used in MM- inte+ration conceptsA Once e are familiar it* t*e concepts, e ill furt*er discuss account determination process in a stock movement related transactionA

Valuation area:

@tock of a material oned by a company is an asset to t*e companyA /aluation area defines t*e or+aniBation level at *ic* materials are valuatedA @7 *as provided to options for valuationA

1A /aluation at plant level0 7ll materials are valuated at plant levelA &A /aluation at company code level0 7ll materials in all plants of a company are valuated at company code levelA

T*is settin+ is defined in t-code OX14A

Valuated stock:

Total valuated stock D @tock in unrestricted use E @tock in transit beteen stora+e locations2are*ouses of a plant E @tock in Fuality inspectionA

Material type:

T*is defines t*e type of materialA

!'0 Ra material, inis*ed +oods etcA

Material type is defined durin+ material master data creationA

Movement type:

T*is defines t*e type of material movement from one place to ot*erA Movement type enables t*e system to find predefined postin+ rules determinin+ *o t*e stock and consumption accounts are to be postedA 7ll possible +oods movements are already defined by standard @7

!'0 Movement type 1%1 refers +oods receipt

Movement type is entered *ile postin+ stock movement related transactionsA Most of t*e time, standard @7 automatically derives t*e movement type based on transaction codeA

!'0 f e +o to M'O, default movement type 1%1 is displayed by systemA

Valuation class:

/aluation class is defined for t*e combination of plant and material (n 7ccountin+ 1 vie of material master)A

/aluation class allos postin+ of stock values of

1A Materials of same material type to different '2: account (ifferent valuation class is assi+ned in different plants for t*e same material) &A Materials of different material type to same '2: account (@ame valuation class is assi+ned to materials of different material type)

.ote0 '2: accounts can be defined at valuation class level alon+ it* ot*er parametersA

Valuation grouping code:

/aluation +roupin+ code combines t*e valuation areas *avin+ same business properties for t*e account determinationA T*is reduces number of entries to be created for automatic account determination for t*e stock postin+sA

!'0 /aluation area 1 and & are reFuired to be posted to same '2: account, t*ese are +rouped to valuation +roupin+ code 7"C and '2: is determined based on valuation +roupin+ code and valuation classA

"efore usin+ valuation +roupin+ code, it needs to be activated in OMWMA

/aluation +roupin+ code is assi+ned to valuation area in tcode OMWDA

n belo eample, five valuation areas are assi+ned to same valuation +roupin+ codeA

Account modification/General modification:

T*is key is used to determine different '2: account for t*e same kind of +oods movement based on ori+in and tar+etA

!'0 urin+ 'oods issue, offsettin+ '2: is determined from transaction key '""A f business ants to post to different '2:s for +oods issue for cost centers (Movement type &%1) and +ood issues to orders (Movement type &61) for t*e same material and plant, 7ccount modifier can *elp *ereA To understand t*is better, let us +o to t-codeOMWN *ere e define t*e transaction key and account modification for t*e movement typeA

Transaction key *ic* e see in O"C is determined based on t*e movement typeA n belo screens*ot, you can see all parameters are same for movement type &%1 and &61 ecept account modificationA

lease read 1 *elp on different fields in t*is screen to kno more about functionality of eac* fieldA

T-code OMWN0

*en material document is posted it* t*ese movement types, offsettin+ account is determined from transaction key '"" based on account modifier and valuation classA

rom belo screens*ot, you can see t*at, different offsettin+ '2: account can be determined for t*e same transaction key and valuation classA

"y efault, @tandard @7 defines account modification keys for belo transaction keysA ;ser defined keys can also be defined and respective account determination settin+s can be maintainedA •

GBB (ofsetting entry or inventory posting)

•

PRD (price diferences)

•

KON (consignment liabilities)

"elo are t*e modification keys defined by @7 (!tracted from 1 *elp)A

Modifers or GBB or t*e transaction2event '"" (offsettin+ entry for inventory postin+), t*e folloin+ account +roupin+s *ave already been assi+ned to t*e relevant movement types0

•

A!" or goods receipts or prod#ction orders $it% acco#nt assignment

•

B&A" or initial entries o stoc' balances

•

N" or e*pense+reven#e rom inventory diferences

•

A," or goods iss#es or sales orders $it%o#t acco#nt assignment ob-ect

•

A." or goods iss#es or sales orders $it% acco#nt assignment ob-ect

•

BO" or cons#mption rom stoc' o material provided to vendor

•

BR" or internal goods iss#es (e/g/0 or cost center)

•

KA" or cons#mption or sales order $it%o#t &D

•

NG" or scrapping+destr#ction

•

1P" or sampling

•

2OB" or goods receipts $it%o#t p#rc%ase orders

•

2O!" or goods receipts $it%o#t prod#ction orders

Modifers or PRD

f you also activate account +roupin+ for transaction2event R (price differences) *en you make t*e settin+s for automatic postin+s, t*e folloin+ account +roupin+s are already assi+ned to t*e relevant movement types in t*e standard0 •

none or goods receipts and invoice receipts or p#rc%ase orders

•

PR!" or goods receipts or prod#ction orders

•

PRA" or goods iss#es and ot%er goods movements

Modifers or KON f you also activate account +roupin+ for transaction2event GO. (consi+nment liabilities) *en you make t*e settin+s for automatic postin+s, t*e folloin+ account +roupin+s are already assi+ned to t*e relevant movement types in t*e standard0 •

none or consignment liabilities

•

PP" or pipeline liabilities

Ho are t!e account deter"ination attri#utes deter"ined or eac! transaction $e%&e'ent(

id you observe different set of fields appears for different transaction keys in O"C *ile maintainin+ '2: accountH esA T*is is defined in Rules for t*e transaction keyA

!'0 @elect transaction key 7;M in O"C and click on IRulesI in toolbarA

ou can see t*at +eneral modification and valuation modifier is activeA

f you +o to '2: account maintenance for t*is key, you ould see t*e same fieldsA

Quick snap of MM-FI Integration process:

*en e do material postin+ for a valuated material, belo flo *appensA

1A Movement type and ot*er attributes like special stock indicator, movement indicator etc are determined based on business transaction like +oods receipt for O, production order etcA(OM.)A T*is is defined by standard @7A &A Transaction key2event and account modifier is identified based on movement type and ot*er standard attributes in step 1 (OM.)