SAP MM / EWM Consultants: September 2019

Friday 20 September 2019

Accounting Entries Effect in Procurement Cycle Concepts- SAP MM&FI

Accounting Entries Effect in Procurement Cycle Concepts- SAP MM&FI:

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As we studied in previous post regarding accounting determination, here we are discussing how the accounting determination is going to work based on the settings you done and which are all the GL accounts its getting hitting based on which scenario and why is the reason behind that.

Concept:

We have N number of activities in procurement cycle and one of the main thing is Inventory and to know the spend, goods inbound and outbound will take place in plant, we need to depend on reports in SAP and even the reports we will be taken on -which accounting entry for which type of movement or else goods inside and outside will be calculated full based on accounting entries.

While we are defining account determination, we have something called modifiers, many things were surrounded to modifiers.

Each entry in procurement where stock and price are involving then automatically accounting entries will come into picture.

We are doing many activities in Inventory by ordering stock from vendor, Normal order from vendor, Consumables, Subcontracting, Pipeline, Consignment, Physical Inventory, Stock movements like STO/Inter and Intra, return PO, service PO.

Here we will study which accounting entry will affect on what scenario and the reason.

1.Standard PO Order-

This is the normal order where we use to procure from vendor and vendor mainly materials like Raw-materials and finished goods, which are physically used for production purpose.

Once the vendor delivers the goods to plant, based on invoice we need to make a payment to the vendor and APAY will release the payment – Here from which GL account the payment should release.

Because we cannot use some other GL account for these types of materials, as per the company its already predefined in OBYC like which GL account should hit for which type of orders-----these settings are predefined by SAP.

While paying amount to the vendor few accounts will hit automatically with the help of transaction event key.

If anything like stock is getting crediting to plant or withdrawal of stock from plant will reduce or increase the quantity, in those cases BSX will hit automatically.

And for clearing the invoice always WRX will hit and from this vendor account will get paid automatically.

Accounting Entries:

Inventory Posting- BSX +

Clearing GR/IR entry- WRX –

Here we have 1 more scenario, where material master price is coming into picture and it is Standard price and moving average price.

Standard price- S

Moving price- V

For every material we have price indicator and S means standard price- Where price will not fluctuate normally.

For material with moving average price then price may change as per the market.

Accounting entries for moving average price is same as explained above like BSX and WRX.

(!)Moving price in Material master: for moving price if we are doing MIGO/MIRO and payment to the vendor then one more accounting entry will come into picture that is PRD.

Inventory Posting- BSX +

Clearing GR/IR entry- WRX –

Price difference account- PRD –

2.Indirect PO/Service PO:

As above if we have material then with the help of valuation class and account category reference the GL account will hit, and accounting entries will be displayed while payment.

In indirect PO, there will be no material and there is no Material master/valuation class, so in this case how the accounting entries will be recorded.

Note: Indirect PO’s are always consumable materials and services and for now just consider as Consumable material.

Now we need to maintain GL account in OBYC and without valuation class and here is the procedure for that.

Accounting Entries:

In this case accounting entries will be KBS and WRX

But when you see in OBYC- KBS, there are no GL accounts in that modifier.

But when you enter material in PO, based on the account assignment the direct effect will be on VBR and we can see these settings in OME9

Here it’s an SAP recommended setting, where it explains which account assignment should hit which modifier.

Now in this case, VBR is an account modifier but for consumption it’s showing KBS and WRX, but the GL account will be taken from VBR modifier and in that search for blank valuation class GL

account.

3.Sub-Contracting:

We all know the sub-contracting process and in these many scenarios, but accounting entries will be same for financial point of view.

( ! ) Stock transfer to vendor

(!!) Scrap

(!!!) Buying components and service from vendor

(!!!!) Vendor to Sc. vendor

We have above 4 scenarios and process are different, but payment is same we need to pay to vendor finally and accounting entries will be same.

Here main activity we are doing is transferring stock to vendor and vendor is consuming that and providing full finale material to us, so let’s think what type of inventory effects are involving.

While stock transfer the inventory stock will get reduce

Vendor will consume and prepare final material, so service payment should be done.

Accounting Entries: BSX, WRX, FRL, BSV

BSX- the stock we are transferring to vendor, so stock will get reduced

WRX- we need to pay to vendor

FRL- Service done by vendor like manufacturing or something fittings

(!!) Scrap ----------!

(!!!) Buying components and service from vendor--! BSX, WRX, FRL and BSV

(!!!!) Vendor to Sc. vendor ----------!

4.Consignment:

Here we use to procure from vendor as bulk quantity and once it’s received, we ill place in vendor consignment stock- Non billable for company.

Once we shift from consignment stock to own stock then we should do MRKO- Billing to the vendor for payment.

Biased on the usage, it may be 10% or 50%- we will do invoice (MRKO) for the used quantity.

Accounting entries hit will place in – KON and BSX

5.STO (Intra):

For STO, where stock will transfer from plant to plant and here, we have two scenarios.

Within company code

Between two different company codes

Within company code:

Within the company codes, there will be no billing takes place whereas plants are within same company code, where we can exchange the stock as per the requirements.

But whereas two different company codes, the billing will take place and billing will be done by SD consultant.

6.Physical Inventory:

In every company there will be physical inventory and stock will be verified and make it corrected if there is plus or minus.

Accounting entries takes place are: BSX and INV with modifier GBB

Tuesday 17 September 2019

SAP Landscape-Transport Request (TR) Process in SAP- All Modules:

SAP Landscape-Transport Request (TR) Process in SAP- All Modules

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Concept:

Landscape in other words we can call as Servers, and TR-Transport request- is whenever we make any changes to the configuration then system will pop-up a TR number.

TR number will be used to transfer the configuration from one client to another client- this will be within the server or outside server to server.

The below process is purely organisation dependent and it may vary from company to company.

Server:

A server is a devise where set of programs has been installed to respond and save the queries into the database (Don’t worry if you don’t understand)

Client:

Client is the base where it will be always located in the server- and any queries to the client we can run in the server program (Don’t worry if you don’t understand).

Note: One server may have N number of clients.

SAP Point of View explanation:

Here SAP, in any company we have 3 servers, the landscape concept it may vary from business to business and organisation to organisation.

But every company will have all these 3 servers to maintain the company standards.

We can have SPRO settings option in only Development server and remaining two servers will not show any SPRO settings.

Movement of one server to other server will be done by SAP Basis team, and ticket needs to be created by our side to move the data.

1. Development server

1)Sand Box

2)Unit test

2. Quality Check server

3. Production Server

Here above mentioned we have 3 servers and 1^st server contains 2 clients.

Client 1: Sand box- where sandbox will be used for testing and development purpose and before implementing in main server, the consultant needs to test in Sandbox and once the consultant believes that 100% accurate then he will be implementing in Unit test Client.

Important note: Whatever the implementation we are doing it’s a custom and original one is developed by SAP and it been hidden in the systems- we will be calling as Golden client.

Whenever something goes wrong then we can reset all things from this client.

Client 2: Unit test:

Here in the above step, its sandbox and where we will test for samples and once we are succeeding there then we can input the same in unit test by transferring the ticket to unit test from Sand box—SCC1 can be used to move.

For this step, no need to release the TR, we can move within client without releasing and without Basis help.

Now once you moved to unit test, Use the same TR number for moving-which will be done by BASIS team.

2. Quality Check server-QAC

Now TR needs to be released to move from one client to other client with the help of BASIS tam and TR needs to be released with T-code SE01

TR number should be provided to BASIS team with raising a ticket or email-Depends on your organisation process, once the BASIS team checks and moves the configuration to QAS Server.

Basis team will transfer the TR from one serer to another server by using STMS.

Here the testing will be done by Superuser from Purchasing team and in this server, they cannot open SPRO-Only Transactional data can be opened

Here the testing will be done and if everything is goods then they will reply to MM consultant that everything is fine to move to production, and the same TR can be transformed to production for real time.

If there is any failure in testing, then same thing will be replied to MM consultant and another TR needs to be created with correct configuration and repeat the process up to QAC test pass.

Once the TR is released and moved to quality then we cannot use the same TR for other amendments.

If the configuration is tested and passed, then we will follow the below process.

3.Production Server

As per the above step, if everything is goods then QAC team will be informing us regarding working of configuration and once after confirmation then we will ask the BASIS team will to move the TR-Configuration from QAC to Production.

Once the Configuration moved to production then they will inform in ticket regarding confirmation then after we will inform the end user to test the configuration by processing some real data.

Once the user confirms with UAT- User acceptance test then we can close the ticket.

Note: UAT is the mandatory from User and only after that we can close the ticket.

Important Notes:

Access for Different roles in SAP Landscape:

SAP Consultant:

SAP Consultant will be having access for all these servers.

1. Development- where SPRO Configuration settings must be done.

2. Quality- Having access for QAS server

3. Production- Only Display access for production server.

SAP Super user:

SAP Super user will be having access to 2 servers

1. Development- No Access

2. Quality- Having access for QAS server

3. Production- Having access to Production server to make changes for real time data

SAP End user:

SAP Super user will be having access to 1 server.

1. Development- No Access

2. Quality- No Access

3. Production- Having access to Production server to make changes for real time data

Firefighter ID:

Sometimes end users were not able to make changes to data or release the PR/PO and some other data.

In emergency case they can request consultant to release the data instead of them.

For this we have given access for FF ID, where we can work upon approval from manager and respective solution lead then we can process further make changes.

Service Now:

Service now is the toll where stakeholders and consultants work on tickets.

Here each request/problem the ticket needs to be created by the requester and consultant needs to work on that based on ticket.

Time will be recorded that time of ticket handled and resolved.

Each company uses some ticketing tool to receive the tickets and each department will have respective group ID, and it will be routed to the respective persons by separate team.

Once we handle the ticket then each time ticket will be handled to the same person.

Each conversation needs to be recorded and send to tech lead for the final approval of making changes.

Here changes will be done only 2 times in a month and every change will be recorded and final approval will be taken from solution manager and 2 days in a month we will make configuration changes.

If there is a priority request then we can do in the same day with appropriate approvals from respective team lead and business justification is required from requester that why they want it as urgent and this completes the TR process.

Wednesday 11 September 2019

Partner Functions/ Vendor Sub-range and One-Time vendor -SAP MM:

Partner Functions/ Vendor Sub-range and One-Time vendor -SAP MM:

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One-time vendor Concept:

Every organisation has a vendor master, where it fulfils the activities of buying goods and services for running their production activities, if one organisation which is big in market having a vendor master data in SAP. Let’s think it’s having data of around 10000 vendors in their vendor master data, but in that there are using only 2000 vendors regularly and remaining vendors are used yearly once and twice.

Here SAP or other ERP data is not unlimited, we need to remove the data or save the data for other transactions to process and not for these unwanted things.

We all know that if we need to select any vendor for the purchase order purpose then first thing is like we need to maintain a master record for that vendor and after we can process the purchase order request.

In SAP, we have a solution that particular vendors account groups is maintained with one-time vendor concept, it means that vendor number will be used only for one time vendor, it can be any vendor we need to use this vendor number only by changing the vendor number in the purchase order.

Vendor account group:

we will define all the vendors by vendor account group itself- because I control field settings, number ranges, one-time vendor, vendor sub range and partner functions.

If we are creating one vendor, then selection priority will be vendor account group.

E.g.: KRED is for normal vendor

CPD- One-time vendor

CPDL-One-time vendor

In this blog we are studying about one-time vendor then we need to select the CPD account group for creating the one-time vendor.

Here CPD and CPDL are both considered for one- time vendor account group

Working:

If we got a requirement to create a new one-time vendor, then we will select the account group as KRED and maintain all the data in vendor master and here we cannot find some details like transaction details and all other remaining details we can update as normally.

Once we are done with vendor creation, we need to ask the buyer to create PO, here once he enters the vendor number in PO, then vendor filed will be blank and here we need to select the vendor name and update details as required.

And in normal case, we will not get that fields blank because those are not one-time vendor account.

Path to select the vendor-One-time account:

SPRO-

Logistics general-

Business Partner-

Vendor-

Account-

Define account group-

Here we need to select the vendor -CPD and double click to edit the settings and inside select the one-time vendor option.

Once we select that option then vendor will become onetime vendor for that account group, and we can maintain the field settings as per that in system.

Vendor sub-ranges- Purchasing:

Two levels of vendor sub-range

1.Purchasing

2.Plant

Purchasing:

As we all know there are vendors who can supply internationally like 1 vendor where headquarters in USA and branches in all other countries, here if they have many branches then there will be many conditions and many different values like

E.g.: Different currency and payment terms, Incoterms and lead time

Whereas in vendor purchasing view we can maintain only 1 value but here as per the country the currency and payment terms will change.

So here SAP we have option called vendor sub-range and this field helps to maintain different purchasing views for 1 vendor like 3-4 different currency, Payment terms and incoterms.

To achieve this one, we need to select the options like- vendor purchasing view -menu bar-extras-add purchasing data and allow VSR.

Now maintain the sub range number and data that required, and we can view this data in XK03 and in PO we can use this data through sub range number.

We can also maintain back-end settings for this.

Path:

SPRO-

Logistics general-

Business Partner-

Vendor-

Account-

Define account group-vendor sun ranges

While creating PO- The system will automatically take the default purchasing view and in material data we need to select the vendor sub- range number then all the fields will change automatically.

Plant:

As we studied about multiple sub-ranges and the same scenario, we can have multiple partners for 1 vendor by plant wise and we can maintain N number of plants with this scenario.

We have a vendor in India and having manufactures in all states, so OA, GS, PI will change with respect to state and we can maintain only 1 vendor but different partner views.

To achieve this first maintain the path settings:

Vendor-

Account-

Define account group-vendor partners

Go to purchasing view and select the plant level and maintain the plant and partner functions then automatically partner views are maintained.

Once we enter the plant in PO, then system will take the vendors automatically as per sub-range.

Partner Functions:

We have partner functions for every vendor like we have one vendor which is main vendor and we can call like parent vendor with having headquarters in US and having many branches throughout the world.

Now for every order the main vendor cannot deliver the goods and taking amount for that, here we have many strategies and responsibilities assigning.

VN-Main vendor and we can call like headquarters managing all the things.

OA- Manufacturer who will manufacture and send the goods, where one main vendor can have many manufactures in the other countries to fulfil the requirements of goods.

GS- Once the manufacturer ready the goods in vendor location now goods supplier will supply the goods to ordered party.

PI-Where the ordered party received goods then payment should be made to account related company.

In real scenarios the OA, GS, PI will be same and VN will be different because VN is always headquarters.

We have partner functions for all types of orders, especially we use partner functions for Contracts and PO’s also STO orders.

Backend settings:

Here we define what are all the partner functions needs to mention for document type and functions needs to appear while creating vendor master.

We can also maintain the mandatory vendor functions for contracts and PO’s, such that no one misses to update in PO or contract.

System will through an error to update the partner functions.

Step 1) We need to define the partner roles

SPRO-

Materials Management-

Purchasing-

Partner Determination-

Partner roles-

Define partner roles-

If we are defining partners newly then here, we need to maintain the role-two-digit alpha the assign to vendor category L1

If we are defining OA, GS, IP then maintain all three partners and assign to vendor type L1 then save,

Step 1.2) Define permissible partner roles for account group.

SPRO-

Materials Management-

Purchasing-

Partner Determination-

Partner roles-

Define permissible partner roles A/C-

Here whatever the partner roles we defined, we need to assign to account group and save.

Here if we have defined OA, GS, PI then we need to assign A/c group account like KRED, CPD, CPDL

Just we need to assign to account group.

We know how to define an account group for the vendor.

Step 2) Partner settings in vendor master record:

Define partner schema: Here we are defining two-digit alpha number and maintaining all the related partners in that group by maintaining all the related partners in that group.

Step 2.1) Assign Partner schema to A/C group:

Here we should assign the two-digit number to vendor account group and save.

By these settings, whenever you are creating new vendor for that account group in partners functions these functions will appear to update in vendor master.

We can maintain these functions optional or mandatory also in these settings.

Path-

SPRO-

Materials Management-

Purchasing-

Partner Determination-

Define Partner settings in vendor master record

Step 3: Partner settings in purchasing documents:

3.1- Define partner schema:

Here we have few options/define with four-digit key like Purchase order, Contract, STO and any other as per your organisation requirements.

Double click to enter inside and maintain the roles that you would like to set in the respective transaction like purchase order and contract.

What partners you want to see in PO and same way partners in contract and whether is mandatory to update or not.

SPRO-

Materials Management-

Purchasing-

Partner Determination-

Define Partner schema to document types

Once we are done with updating the required fields in four-digit key, save the screen and follow for next step.

3.2) Assign Partner schema to Document type:

Whatever we defined above just assign that four digits to this PP document type, so that while creating PO these partner functions will come for selection.

If any changes or extra functions to add, then we need to add and after that we need to create PO.

These complete the vendor master concepts and let me know if you require any other concept to explain briefly.

Friday 6 September 2019

Moving Average Price (MAP) and Physical Inventory process Overview - SAP MM

Moving Average Price (MAP) and Physical Inventory:

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Moving Average Price:

Concept:

We all know material will be evaluated at plant/Company code level and once you evaluate the price for the material, we need to update in the material master- based on material type. If the material is Finished good, then material price will be moving average price and semi-finished goods may have standard price indicator in material master.

For finished goods, its good to have moving average price because as per the market value the price will change daily.

For semi-finished goods they cannot be changed daily because it’s not a product, mainly it’s a consumable material which will use for support product and it’s a standard price.

Example:

In our country when ever the budget proposal happens, then they will decide whether this finished goods price should be decreased or not, but they will not worry about consumable materials

Note: We are doing all above things to know the report of spends and correct GL hitting after posting MIGO for a material.

When we are updating price in material master, these things will keep in mind and update the price indicator respectively because its effecting the GL accounts in background.

If you have knowledge on account determination, then the above scenario will affect the PRD transaction key- Price difference account.

How it works:

Once we are maintaining the material then we are updating price control as V or S.

After updating how the price will change for price indicator V-Moving average price, this filed in material master will change daily if we are doing MIGO with the combination of material and plant.

For standard price the price will not change automatically, if required we need to change it manually.

How price is changing for V (Moving average price)-in material master:

Here the price needs to change whenever the MIGO was done for PO

We have one standard formula that on what basis, the price will change in material master.

Previous MAP * Previous stock + PO price per quantity * GR Quantity

MAP= ---------------------------------------------------------------------------------------------

Previous stock + GR Quantity

Check out the formula

Note 1: Where check the previous MAP price in material master for that material and in the same screen we can find out the stock present for that material.

Note 2: Once you get that information then check the current PO price per quantity and GR quantity.

If you are creating PO, then take that info like if you are creating PO now for 100 quantity where per 1 quantity is 10 EUR then GR quantity as 100.

Note 3: Check the previous stock for that material in material master and GR quantity that you are doing now.

Example: lets think previous MAP is 10 and previous stock is 125 and current PO price is 15 with current GR quantity as 100

Now for denominator- Old GR quantity is 120 and new GR quantity is 100

10 * 125 + 15 * 100

MAP= ---------------------------------------------------- =12.22

125+100

The new price is 12.22 EUR

Now check the material master price in that material- Moving average price – the price will be 12.22 EUR.

Physical Inventory:

Every company will have stock of materials in warehouse for there production activities and everyday the respective persons needs to update the entry and exit of stock in the plant and sometimes it may affect the production if we are not doing this properly.

Example: we all know PR’s will be created by System and manually but if incise system wants to create PR then it will check the level of stock in plant and once the level of stock decreases then automatically system will create PR for that material. To do that correctly the system stock should be updated correctly and there are many scenarios that people tends to forget the updating the inventory with correct numbers and for that SAP has been recommended the physical inventory.

If the level of stock decreases by 50% then system will create auto PR’s with fixed vendors.

End of the day of physical inventory both the stocks needs to match -if not we will post the differences and match it in SAP.

Physical Inventory:

the concept is the warehouse stock should match with physical stock in plant and this counting will be done manually in plant.

Overview:

Every company they will follow this physical inventory process and its recommended by SAP to do, like for every 3 months or 6 months this physical inventory check should happen and this is the process done in SAP and warehouse persons will update and provide the stock to respective person to update in SAP.

Few companies they will check this physical inventory monthly because they don’t to be in trouble of production loss.

Procedure:

This activity mostly done in weekends and once we are doing this will mark freeze option or block option to avoid incorrect count in physical inventory.

Once we are decided to check for physical inventory then respective team will open T-code MI01 and create a physical inventory.

Create Physical Inventory: MI01---

Where we will enter the plant, material and storage location and save the screen

Now the physical inventory has been created.

1. Posting Block:

We are marking posting block indicator such that there will be no inventory postings done in SAP before completing this physical inventory for this material.

If the physical inventory is taking 10 days, then up to 10 days there will be no postings done in SAP.

2. Freeze book inventory:

If we select this option, then system will allow for postings in SAP, but the physical inventory number will be frozen or locked with that number such that there will be no difference in number of counts.

Most of the companies will prefer this option because we don’t know how much time it may take for counting.

Print Physical Inventory: MI21

Enter physical documentary number and execute, so that it will allow you to print.

Whatever they created for material they need to segregate as per the material group wise and take a printout of that what we created.

Once we have taken the print of that physical inventory then we need to send that print to the respective warehouse person then they will count and update in paper that stock is this much.

Enter count for Physical Inventory: MI04

Once we get the count from the warehouse person, then the count needs to be entered in the system as per the material through MI04.

Update the physical inventory number and execute then it will show the material then update the quantity in quantity field and save the screen.

MI05- if we need to correct the number what they have updated then we can update it.

Post Physical inventory: MI07

Once you have posted above step now, we need to do the posting the difference.

Go to MI07 and enter the physical inventory number then system will automatically show the difference in quantity and just check with original quantity in system then post the differences -Save

Here we have only 2 cases the quantity in the physical stock is more than the system stock

Quantity in the system stock is more than the physical stock

Or else both the stocks are matching with correct quantity.

Here once we are posting the differences the system will automatically generates the movement types accordingly.

Movement types-

701/702- Unrestricted Stock

703/704- Quality Inspection

707/708- Blocked Stock

System will automatically pick up as per the stock selected in MI01- here we have 3 options to select that physical inventory needs to be done from which stock.

701- Goods receipt for Warehouse Unrestricted stock