SAP MM Training

SAP MM Training
September Weekend Batch

Tuesday, 20 October 2020

Accounting Entries Effect in Procurement Cycle Concepts

 

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

 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 _____

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, 26 May 2020

SAP MM---Inbound Delivery/CCK/Advanced Shipping Notifications

Inbound Delivery/CCK/Advanced Shipping Notifications:

Inbound delivery will be created for few of the vendors/ Materials to know the advanced information rereading materials that going to store in a company
Advanced shipping notifications gives prior information to stakeholders related to stock that going to place, so that we can make arrangements in plant/Warehouse
CCK plays a major role in deciding this Inbound delivery and this will be activated in vendor master or PO

We can have our customized CCK –Confirmations while creating PO we can assign to vendor as per the requirements
We can also maintain delivery date tolerance in customization
Reminder check to vendor related to notification that prior

GR cannot be posted without Inbound delivery, where its mandatory to receive the advanced shipping notification about goods
To create inbound delivery T-code is VL31N/VL32N/VL33N


Friday, 22 May 2020

SAP MM Returnable Transport Packaging (RTP)


Returnable Transport Packaging (RTP)
RTP is a special kind of stock that we handle in organization
Once we are transferred the material to our storage location then we will return this packaged material
Material type for RTP is –LEIH
Movement type that indicates receiving material with RTP is 501 M
Returning RTP packaged material movement type is 502-M

Sunday, 26 April 2020

SAP MM-- Import Procurement full overview explanation


 Import Procurement full overview explanation

•Procuring of goods from US to India or any other places
     India to USA
•Currently India is using GST, so there are no different condition types will trigger
•Whereas in case of different country, the condition types for customs will come into picture
•Remove the tax code or maintain it to 0% and maintain the vendor to unchecked GR based IV



•Customs Clearance vendor will be different/Same as per the company requirements
•But if the customs vendor is different then IV needs to be posted before GR and that should be paid
•Once material received to plant then GR and following with IV       will happen


•Orders or u can use even same normal doc type(Preferred to use different)
•Material master—Foreign trade import tab –Fill details what type of products /region and Origin
•Vendor master—remove the GR based IV check for vendor or Invoice tab
•Check calculation schema whether import condition are maintained to calculate charges in PO
•Perform PO with all the details and do the Invoice with planned delivery costs
•Now perform the Goods receipt and Invoice receipt for normal goods
•Payment will release to vendor and prior payment of customs will be processed to vendor.
•This completes Import type of procurement

Featured post

What is IDOC? Explanation for Interview Purpose

What is IDOC? Explanation for Interview Purpose: Overview Explanation for Interview purpose Question: What is IDOC ? IDOC i...

Popular Posts