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SAP MM Interview questions and Answers sapmmguide.

com

1. What is the difference between a Purchase Requisition and a Purchase Order?

A PR is an internal document that sends notification to purchase department when some


material or service is required. PR can be generated by department that needs any material
or service.
A PO is a document sent to vendor by purchaser which is an official request of mentioned
material or services. POs are generally binding on purchaser, though it depends on terms
and conditions mentioned in PO.

2. How does the system pick price in PO?


In vendor master record schema group vendor is assigned.
The schema group vendor and schema group purchasing organization is assigned to pricing
procedure RM0000
Now whenever a PO is created system system will pick the price from procedure RM0000.

3. How does the system calculate non-deductible taxes?


System will calculate non-deductible taxes based on the condition types assigned to the
pricing procedure

4. How can we restrict a user to limit him to create only service purchase orders?
In Define document types we can create a Zee document type and allow only item category
D (Services)
With the help of Basis team we can control the user authorization to be only for creating PO
with above Zee document type.

5. What are different Info Records types?

Different Info Record types are Standard, Consignment, Sub-Contracting and Pipeline.

6. What is a consignment Stock?

The stock supplied by the vendor is in the company’s premises but the company has no
liability for the same. The liability for the company will only arise once the goods are issued
from the consignment stock for use.
However, in this case, even before the use, purchasing company can check in system how
much stock is lying in inventory.

7. What are the steps involved in a consignment cycle?


Create consignment info record with proper tax code.
Create PO with item category K
Process GR, no invoice verification done, but settlement is done through MRKO transaction.
7. What is Sub-Contracting cycle in MM?

In Sub-contracting, we send raw material or input material to sub-contractor and then


receive the finished goods. A sub-contracting PO is created with item category ‘L’. Input
material is sent to vendor for processing with movement type 541. When GR is done using
movement type 101, movement type 543 takes place automatically and takes care of
consumed material.

8. What is meant by Scales in MM?

When we maintain price in Info Records, we can make use of scales. It is used when price
of a material is dependent on quantity purchased. For eg. For 500 pieces of material ABC,
price is Rs. 10, however, if the order quantity is more than 500, price is Rs. 9. Scales are
maintained in various master data like info record, quota arrangement etc. from where
scales can be pulled in a Purchase Order.

9. Can we assign one plant to many company codes?


No we can assign a plant to one company code only. But we can assign as many plants as
we like to one company code.

10. How to Flag a material for deletion?

A material must be flagged for deletion before deleting it using Archive and Delete program.
A deletion flag can be set at client level, plant level or storage location level. Whatever level
you flag a material for deletion, it is flagged for deletion at all corresponding lower levels.
Transaction MM06 is used to flag a material for deletion.
Then we can delete the material by MM70
Before the material can be deleted there must be no open POs or stock of the material. We
need to delete the material at the closing of a period.

11. Can a material be used after flagging it for deletion?

Yes, even after flagging a material for deletion, it can be used till it is actually deleted. It will
just trigger a warning message whenever the material is used. If you want a material to be
blocked for any use with immediate effect, you should use a material status which is there in
Basic View 1 for general level or in MRP 1 view for plant level blocking.

12. What is the function of OBYC?

OBYC is t-code used for configuring Automatic Account Posting.


Postings are made to G/L accounts automatically in the case of Inventory Management and
Invoice Verification relevant to Financial and Cost Accounting.

13. What is valuation grouping code related to OBYC?

Valuation grouping code is used to group the valuation area, In SAP, we can have valuation
level at Company code level or at plant level.
General practice is to use the valuation area at plant level, because valuation may differ
from one plant to another. The valuation grouping code makes it easier to set automatic
account determination. If we need to define common account determination for several
valuation areas, we can assign same valuation grouping code to all those valuation areas.
We can maintain the valuation group code in OMWD for various valuation areas.

14. Can we change the valuation class of a material?


To change material valuation class, the materials shouldn’t have
Valuated stock in current or previous period.
Open purchase orders or delivery schedule lines.
Production order for which goods movement has already taken place.
If any of the above conditions fail, then follow the procedure mentioned.
1. If valuated stocks already exist, you can change the valuation class only as follows:
a) Post the stocks of the material to an interim account.
b) Change the valuation class in the material master record.
c) Post the stocks of the material back to their original account.
2. If open purchase orders already exist, you can only change the valuation class if we first flag
the corresponding purchase order items for deletion.
3. If production orders exist for which a goods movement has already taken place, you can only
change the valuation class if we first set the status of the production orders to Deleted.

15. How does the system hit the G/L accounts when we do inventory postings like
GR?
In OMJJ the movement type is linked to transaction key which is the link to G/L account.
Whenever any inventory posting is done movement type is used which hits the transaction
key which hits the G/L accounts.

15. What types of special stocks are available?

Various special stock types available in SAP are Consignment, Subcontracting, pipeline,
project, sales order stock, Returnable transport packaging.

16. What is the difference between Contracts and Scheduling Agreements?

A contract is a pre-determined long term agreement to supply material or service for a


certain period of time. Specific delivery dates are not mentioned in the contracts. Contracts
can be of two types: Value Contract or Quantity contract

In Scheduling agreements, we can enter scheduling lines which gives details of quantity
that should be delivered on specific date. Plant must be entered in SA so that materials can
be delivered at plant. These are generally used for materials whose requirements are
predictable.

17. How can we create new transaction codes in SAP?

New transaction codes can be created using t-code SE93.


18. What are release procedures with and without classification?

Release Strategy with Classification:


Here the document can be released at header level as well as item level.
It can be used for both internal/external documents like PO/ PR.

Release Strategy without Classification:


Here the document can be released only at item level.
It can be used only for internal documents such as PR.
This strategy can be used only on 4 parameters which are Account assignment category,
Plant, Material Group and value of PR.

19. Can we use release procedure without classification for PO?


No we can use only release procedure with classification (where release at header or item level is
possible) for PO. PO document can be released at header level only.

20. What is meant by batches?

A batch is a subset of the total stock of a material. It represents a homogeneous unit which
has unique specification. Normally, a batch is assigned to the quantity of material produced
during a given production run. A batch number uniqueness can be assigned at any of the
following 3 levels:

At client level: The same batch number can be assigned only once within the entire client.
At material and plant combination level: Same batch number can be assigned to material
with different specification in each plant.
At material number level: A batch assigned to a material has the same specification for all
plants where material is extended. Batch number can be reassigned with a different
specification for each material.

21. How to handle free items in PO?

While creating PO, we can tick the item as free item in item overview section of PO. The
price will be zero for free marked item.

22. What information is maintained in Accounting View of material master?

Accounting view is a plant specific view. Besides other information, it contains important
information such as valuation class and price control. Valuation class helps in determining
the relevant GL account used for account posting. It is also used while configuring OBYC
settings. Price control indicator determines if material is maintained at Standard price(S) or
Moving average price (V).

23. What is the use of Material types?

‘Material Types’ is used to group various materials based on some common properties. It
helps in maintain material master data for a particular material. Using material types, we
can control which all views are required for a material type, which fields are required or
optional, the material number range etc.

23. What is Plant specific material status how it is used?

First we need to define plant specific material status in configuration in Logistics – General
> Material Master > Settings For Key Fields > Define Material Statuses as below

Select any one status and click details


Assign the following appropriate parameters in plant Specific settings

"A" = warning

"B" = error message

" " = no message

24. What is the use of ‘Partner Functions’ for a vendor?

Partner Function is used to define responsibilities and duties of other business partners.
Some partner functions are AZ(Alternate payee), CR(Carrier), OA(Ordering address),
GS(Goods supplier), PI(Invoice presented by) etc.

25. What is the use of ‘Material Status’?

Material Status helps in determining the usability of a material. It is a 2-digit code which can
be maintained as plant specific material status, cross-plant material status, and distribution
material status.

26. What is the ‘Price Control Indicator’?

‘Price Control Indicator’ is maintained in accounting view and is used to determine how a
material will be valuated. It can be Standard Price(S) or Moving Average Price(V). If the
indicator is set to S, all inventory postings are posted at standard price maintained in
material master. If there are variances in any transaction due to different price, the variance
is posted in price difference account.

If price control indicator is set at V, goods received will be done at GR price. The moving
average price will be adjusted in material master using weighted average formula. If goods
movements or invoice receipts are posted using a price that differs from the moving
average price, the differences are posted to the stock account.

27. What are various types of Stock transfer?

The physical movement of stock between different physical locations is called as ‘Stock
transfer’. Stock transfer can be either a single step process or a two-step process. Various
Stock transfers are:

Inter Company (Company to Company)


Inter Plant/Intra Company (Plant to Plant)
Intra Plant (Storage location to Storage location)

28. What is the difference between stock transfer between plants belonging to the
same company code and plants belonging to different company codes?
In case of stock transfer between two plants (assuming valuation is at plant level) belonging
to same company code one material document and one accounting document is created.
In case of stock transfer between two plants belonging to different company codes one
material document and two accounting documents are created.
The other differences are as below.

Intracompany STO
Purchase order type is UB
Delivery type is NL
Material is issued from supplying plant using movement type 641

Intercompany STO
Purchase order type is NB
Delivery type is NLCC
Material is issued from supplying plant using movement type 643

29. What are various Stock Types?

In SAP, commonly used stock types are:


Unrestricted Stock (Stock that is available for use)
Restricted Stock
Quality Inspection Stock (Not the unrestricted stock but can be considered for MRP)
Blocked Stock (Stock rejected by quality or production)
GR Blocked Stock (Conditionally accepted stock. Not the unrestricted stock)

30. What are various procedures for counting Physical Inventory?

Physical Inventory procedures in SAP MM are as follows:

Periodic Inventory (All stocks are counted on a pre-determined date)


Continuous Inventory (stocks are counted continuously during the entire fiscal year)
Cycle Counting (Counting is done at fixed intervals)
Inventory Sampling (Randomly selected material stocks are physically counted on the
balance sheet key date. If variances are small enough, it is presumed that the book
inventory balances for the other stocks are correct.)

31. What is the use of ‘Split Valuation’?

Within a valuation area, sometimes, we need to valuate various stocks of a material


separately. It can be because of different origin, quality, status, etc. We use split valuation in
such cases. In this case, material is managed at several partial stocks which are sub-stocks
of main material stock. Any transaction, relevant for valuation, is carried at this partial stock
level. In accounting view, we define if we need split valuation for any material.

32. What are the various stock valuation methods?

Stock revaluation can be done by following three methods:

LIFO(Last In First Out): Materials received last are consumed first. You can assume
example of elevator where people who enter last exit first!

FIFO(First In Firs Out): Materials received first are consumed first.

Lowest Value Method: Stocks are valued at their original price or the current market price
whichever is lower.

33. How do you set ‘Automatic Account Assignment’ in MM?

Once OBYC settings are properly done, system finds the correct G/L account using the
following data:
Chart of Accounts: Chart of Accounts is determined based on plant or company code used
in transaction
Valuation Grouping Code: It is determined based on the valuation area. Valuation Grouping
Code is maintained in t-code OMWD.
Transaction Key: eg. BSX, GBB etc. Transaction keys are determined automatically from
the transaction (invoice verification) or the movement type (inventory management).
Account grouping /Account Modifier (only for offsetting entries, consignment liabilities, and
price differences)
Valuation class of material or (in case of split valuation) the valuation type: The valuation
class allows you to define automatic account determination that is dependent on the
material. This can be achieved by assigning different valuation classes to the materials in
material master (Accounting view) and by assigning different G/L accounts to the posting
transaction for every valuation class

34. What are ‘Transaction Keys’ while setting OBYC?

Since each movement type is assigned to a ‘value string’ which in turn is identified with a
transaction key, the goods movement determines the correct transaction key. Transaction
Keys’ are pre-defined in the system to enable transaction postings in Inventory
Management and Accounting (Invoice Verification). Examples of pre-defined transaction
keys are:

BSX (Inventory Postings)


WRX (GR/IR Clearing Postings)
PRD (Cost/Price differences)
UMB (Revenue/Expenses from revaluation)
GBB (Offsetting entries in Stock postings)

BSX, WRX, and PRD are relevant for a GR with reference to a purchase order for a
material with standard price control. The transaction key UMB is used when the standard
price has changed and the movement is posted to a previous period. GBB is used to
identify the GL account to post to as the offsetting entry to the stock account (when not
referencing a purchase order) such as miscellaneous goods receipts, goods issues for
sales orders with no account assignment, and scrapping etc.

35. What is a Business Area?

The business area is an organizational unit within financial accounting. It corresponds to a


defined business segment or area of responsibility, to which value movements recorded in
Financial Accounting can be assigned. It is usually derived automatically as it linked to other
organizational units. For eg. Business area for a combination of plant and division is
maintained by t-code OMJ7.
36. What is a Cost Center?

Cost Center accounting is used for controlling purposes. It is an organizational unit within a
controlling area which represents a defined location of cost incurrence. For example, any
department can be a cost center for recording all expenses incurred for that department.

37. What is a Profit Center?

Profit Center Accounting evaluates the profit or loss of individual, independent areas within
an organization. Profit center is an organizational unit in controlling to recognize your profit.
Profit center is attached to material master at plant level.

38. How do you configure pricing procedure in SAP MM?


Below are the steps to configure pricing procedure

1. Condition Table (Here maintain fields like plant, purchasing organization etc)

2. Access Sequence (it specifies the system to search for condition records from condition
tables)

3. Condition Type (like discounts, surcharges etc)

4. Condition Record

5. Schema Group

6. Calculation Schema

7. Schema Determination

38. What is the difference between condition type PB00 and PBXX?
Difference between PB00 & PBXX
1. Condition maintained in PB00 is time dependent whereas PBXX is time independent.
2. Condition type PB00 – used for IR, RFQ, Contract, Schedule Agreement
Condition type PBXX – used for PO.

38. How to create Tax calculation procedure in MM?

Tax can be calculated for each line item of a PO separately based on the tax code. Earlier TAXINJ, which
is a formula based tax procedure, was used. Now, TAXINN, which is a condition based tax procedure, is
generally used.
Tax procedure contains the condition type and necessary specification for each condition
type.
Account keys are assigned to condition types and these account keys determine the G/L to
which the tax amount is to be posted(OB40).
These account keys are maintained using t-code OBCN. (All these transactions are under
Financial Accounting Global Settings >> Tax on Sales/Purchases >> Basic Settings). Tax
codes are assigned to country codes and country are linked with tax procedure.
Thus, based on tax code, corresponding tax procedure is determined and then calculation is
done based on condition types in that tax procedure.

39. How is scrap material taken care of in sub-contracting?

Scrap can be maintained in BOM as operational scrap, component scrap, By-Product or


Co-Product. Common practice is to maintain scrap as by-product and receive it back along
with processed material.

40. How are the by-products taken care of in sub-contracting?

When you create BOM using CS01, we can maintain main components with + ve quantities
and By Products / Scraps with - ve quantities.
When you make Goods Receipt for Subcontracting Purchase Order with 101 movement
type, components are automatically consumed with movement type 543 By Products /
Scrap are updated as stock provided to vendor movement type 545. Now we can receive
this scrap/ By product back in company’s inventory using movement type 542 (reversal of
541) with t-code MB1B.

41. What are the commonly used movement types in Sub-Contracting process?

541 - Issues of goods from warehouse to subcontractor stock


542 - Reversals of goods issues from warehouse to subcontractor stock
543 - Consumption from subcontracting stock (Automatic updating during GR)
544- Co-products receiving
545- Goods receipt of by-products from subcontracting (Stock provided to vendor)
101 – Finished good/ Sub-Contracted good received after processing

42. What are accounting entries in standard sub-contracting process?

Accounting entries in standard sub-contracting process are as follows:

For finished goods received:


Debit stock account of assembly(FG) (BSX)
Credit Change in Stock (BSV)

For amount payable to vendor:


Debit SC/JW charges (FRL)
Credit GR/IR (WRX)

For material provided to vendor:


Debit Consumption Account of components (GBB-VBO)
Credit Stock account of components (BSX)

If there is a price difference and customization is done for accounting for price difference in
subcontracting, PRD transaction key comes in picture.
43. What are the possible values of procurement type in Material Master?

Procurement type is maintained in MRP1 view of material master. This is a plant specific
view as MRP is done at plant level. Various procurement types in material master are as
follows:

In-house production (E)


External procurement (F)
No procurement
Both Procurement types (X)

44. What are the requirements for an ‘MRP Run’?

MRP should be activated in that plant


Master Data for MRP should be maintained (Planning Calendar etc.)
MRP data for material should be maintained
MRP1 view should be maintained (e.g.. Reorder point, Safety stock etc.)
MRP2 view should be maintained (e.g..Plan delivery time etc.)
MRP can be run using MD03

45. What is a MRP Area?

MRP Area is an organizational unit for which material requirement planning can be carried
out independently. MRP Areas are of three types:

Plant MRP Area


MRP Areas for Storage Locations
MRP Areas for Subcontractors

After defining MRP areas, MRP area is assigned to material in material master.

46. What is MRP list?

The system creates MRP lists during the planning run. The MRP list always displays the
future stock/requirements situation at the time of the last planning run. The MRP list is
stored in the system until it is either deleted manually or replaced by a new list from a
subsequent planning run.

47. What MRP procedures in Consumption Based Planning?

MRP procedures in CBP are as follows:


Reorder Point Procedure
Forecast based Planning
Time phased material planning
48. What is the difference between standard purchasing organization and reference
purchasing organization?
Purchasing organization is an organizational unit within Logistics. A standard purchasing
organization must be provided to one or more plants for which it is directly responsible for
procurements.
A purchasing organization is assigned to reference purchase organization to avail
conditions and centrally agreed contracts or release orders contained in the assigned
reference purchasing organization

49. Why do we use document types in SAP?

Document types are used to distinguish the business transactions to be posted. It also
helps in determining the account types to be posted and subsequent transactions to
complete the process. Document types are defined at client level.

50. Can we receive the goods before the scheduled delivery date in scheduling
agreement?

No, we cannot receive the goods before scheduled delivery date. GR can be posted on or
after the scheduled dates. Though, SAP has provided some OSS notes to resolve this.
(708973, 741385)

51. Can changes be made in PO once it is released?

This can be controlled by settings given in release indicator in PO release procedure. If it is


a significant change, it will re-trigger approval cycle.

52. What is the use of ‘Info Update’ indicator in purchasing documents?

This indicator is used to decide if the info record is to be created/updated or not based on
this purchasing document.

53. What is a Material Ledger?

A material ledger retains all transactions that relate to the purchase and use of materials for
producing goods. Material ledger data is valuation and control data for a material in a plant
for a specific posting period. Material ledger contains data for material movements that are
relevant to the valuation of the material.

54. What is a ‘Return Delivery’?

Return Delivery is used if we want to return goods to a vendor for any reason such as bad
quality, or bad packaging etc. In normal cases, return delivery is done by movement type
122. For creating return delivery, reason for return is a mandatory field.
55. How to deactivate a vendor so that it cannot be used for further transactions?

A vendor can be blocked at various levels as follows:

All Company Code


Single Company Code
All Purchasing Organization
Single Purchasing Organization

56. What is EAN?

An article can be carried in different units of measure. An European article number (EAN) is
created as a unique indicator for each of these units of measure. The most important use of
EANs within a company is to identify articles at the point of sale (POS) using the barcode.

57. What are basic tables used for Material Master?

Some of the basic tables used in Material master are:

MAKT: Material Descriptions


MARA: General Material Data
MARD: Storage Location Data for Material
MVER: Material Consumption

MARC: Plant Data for Material


MVKE: Sales Data for Material
MAST: Material to BOM link
MARM: Unit of Measurement
MBEW: Material Valuation

58. What is the difference between release strategy for a PR and that for a PO?

Basic difference is that PR can released at a line item level or at a header level. However,
PO can be released only at header level.

52. How can we know the moving average price of an item as on last month or before
two months? (capgemini)

Ans:
Implementation questions and answers

ASAP Roadmap is aimed at providing step-by-step direction and guidance throughout the
project implementation by providing a process-oriented, clear and concise project plan. The
roadmap meanders through the following milestones or phases in the project implementation
lifecycle:
1. Project preparation
2. Business blueprint
3. Realization
4. Final preparation
5. Go-live, support, and continuous improvement

1. Project preparation
Project preparation is the first and initial phase of the ASAP roadmap where you are just starting
the project. You will perform activities such as preparation of the initial scope, high-level
timelines and plans, project charters, identification of project team members, project kick-off, etc

2. Business blueprint
Business blueprint is the second phase in the implementation where you will try, identify, and
document business requirements and goals to prepare the foundation for future stages of the
project. Ideally, you will organize ‘business requirement gathering’ workshops with the various
business/functional users of the company, lead them through the discussion with structured
business functionality questionnaires, understand their existing business processes, and identify
and document their requirements in the wake of this new implementation. A ‘sign-off’ at the end
of the phase ensures an agreement to move forward outlining the scope of the project.

3. Realization
Realization is the third phase where the implementing team breaks down the business
processes identified in the second phase and configures the SAP settings. Initially, you will do a
Baseline Configuration, test the system functionality and if necessary make changes to the
baseline configuration, and close the phase with Final Configuration, signalling that all the
business processes have been captured and configured in the system.

4. Final preparation
Final Preparation is the penultimate phase in the project. This phase also serves to resolve all
crucial open issues. A ‘go-live check’ is also conducted to analyze whether the system has been
properly configured.

This phase is marked by the following activities:


1. End-to-testing of the configured system (User Acceptance Test—UAT)
2. Training of the end users (Usually follows the concept ‘Train-the-Trainer’)
3. System management activities (creation of users, user profiles, allocation of roles
to profiles, etc.)
4. Cut-over (data migration activities)
5. Go-live, support, and continuous improvement
On successful completion of this phase, you are ready to run your business in your production
system. Go-Live and Support is the final and fifth phase of the project where the configured
system is declared ‘live’ for day-to-day business use. Users make productive (live) business
transactions in the system and all the issues cropping up in the wake of going live are supported
and resolved by a support team immediately.

CIN Interview questions and answers

1. What is Excise group?


Ans: An excise group allows you to maintain a separate set of excise registers and excise accounts.
The RG 23A, RG 23C and PLA serial numbers are created for an excise group.

2. I will create an excise invoice with zero duty. Will it create a Accounting document?
Ans: No

3. How many types of registers are there to be maintained in CIN?


Ans: RG23A Part I: - Part I shows the quantities of the Input Materials.
b. RG23C Part I: - Part I shows the quantities of the Capital Goods.
c. RG23A Part II: - Part II shows the amounts of excise duty on the Materials, and how much you
have transferred to the CENVAT accounts.
d. RG23C Part II: - Part II shows the amounts of excise duty on the Capital Goods, and how much
you have transferred to the CENVAT accounts.
e. PLA: - Personal Ledger Account
f. RG23D: - A record of receipts and issues of excisable materials, as kept by depots.
4. What is the difference between tax procedures TAXINJ and TAXINN?
Ans : TAXINJ is formula based and TAXINN is condition based

5. What is the function of condition types NAVS, JEXS and JEXC in pricing procedure?
Ans: NAVS Non-Deductible Tax
JEXC IN Manual Excise
JEXS Taxes on the PO
6. What is the difference between process steps in domestic PO and import PO?
Ans:
In domestic PO the steps are
Create PO
Inbound delivery
GR and Excise capture
Excise post (J1IEX)
In Import PO the steps are
Create PO
Inbound delivery
Custom MIRO
GR and Excise capture
Excise post
7. What are the settings to be done to get Excise Tab in MIGO while doing Goods receipt?
Ans: To appear EXCISE TAB in MIGO t.code,you need to select check boxes of "EI capture" & "Post
EI at MIGO" in MIGO Settings segment in Maintaining Excise Group setting in following path & save.

SPRO -> Logistics general -> tax on Goods Movements -> India -> Basic setting -> Maintain Excise
Groups

AND

If excise master maintained in t.code:J1ID for vendor number and material number, then the
answer is-
YES. You will get EXCISE TAB in MIGO t.code in all cases and If Non-excisable, then enter NOT
APPLICABLE in Excise Number field.
If excise master not maintained in t.code:J1ID for vendor number and material number, then you
will NOT get EXCISE TAB in MIGO t.code.

8. Can we reverse the fortnightly utilization done?

Ans: No we cannot reverse the posting done with fortnightly utilization. Simulate option is provided
in this option for the user to check whether things are ok so that the chances of error are minimal in
the actual run.

9. When I run fortnightly utilization the system is showing zero balance even though there is
some balance in the GL account?

Ans: The balances for utilization are picked up in CIN only when the MM period closing is done for
the previous period. For eg. If you r posting date is 5th Dec and the November period is still open
system will show zero balance.