By Sriram Chary 21st June 2018

AGENDA

WELCOME TO ALL

FI-MM INTEGRATION - WHAT IS HAPPENING CURRENTLY FOR

BUSINESS TRANSACTIONS?

FUNDAMENTALS FOR FI-MM INTEGRATION

UNDERSTANDING OF FI-MM INTEGRATION – FROM MM

TRANSACTION TO FI JOURNAL ENTRY

ADVANCED TOPICS IN FI-MM INTEGRATION ALONG WITH ISSUES

DURING IMPLEMENTATION

KEY TRANSACTION CODES PERTAINING TO FI-MM INTEGRATION

EXERCISES
GROUND RULES & TIMELINES

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Minimize side conversations
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Actively listen to and engage in the presentations
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interruptions.

Date of Training = 21st June 2018

Total Duration = 1.0 Hour
Start Time = 12:00 Hrs
Venue = Room No.01 [Kaziranga Tower A 10th Floor]
AGENDA

FI-MM INTEGRATION - WHAT IS HAPPENING CURRENTLY FOR BUSINESS

TRANSACTIONS?

FUNDAMENTALS FOR FI-MM INTEGRATION

UNDERSTANDING OF FI-MM INTEGRATION – FROM MM TRANSACTION

TO FI JOURNAL ENTRY

ADVANCED TOPICS IN FI-MM INTEGRATION ALONG WITH ISSUES

DURING IMPLEMENTATION

KEY TRANSACTION CODES PERTAINING TO FI-MM INTEGRATION

EXERCISES
FI-MM DOCUMENT RELATIONSHIP
MATERIAL DOCUMENT
1. Material Document 4902134525
has been posted in Plant 201.
2. This is pertaining to the Mvt.
Type “261”, wherein the
Material is issued to Product
Cost Collector.
3. This automatically creates the
Financial Document(s) in the
background, if it is relevant to
Financial Accounting.
FINANCIAL DOCUMENT(S)
AGENDA

FI-MM INTEGRATION - WHAT IS HAPPENING CURRENTLY FOR BUSINESS

TRANSACTIONS?

FUNDAMENTALS FOR FI-MM INTEGRATION

UNDERSTANDING OF FI-MM INTEGRATION – FROM MM TRANSACTION

TO FI JOURNAL ENTRY

ADVANCED TOPICS IN FI-MM INTEGRATION ALONG WITH ISSUES DURING

IMPLEMENTATION

KEY TRANSACTION CODES PERTAINING TO FI-MM INTEGRATION

EXERCISES
 GOODS MOVEMENT

“Goods Movement” is defined as the transaction resulting in a change in stock. The following are the different types of Goods
Movements:
Goods Receipt
Goods Issue
Stock Transfer
Transfer Posting

Goods Receipt (GR) is a goods movement with which the receipt of goods from vendor or from production is posted. A goods
receipt leads to an increase in warehouse stock.

Goods Issue (GI) is a goods movement with which a material withdrawal or material issue, a material consumption, or shipment
of goods to customer is posted. A goods issue leads to reduction in stock.

Stock Transfer (ST) is the removal of stock from one storage location and its transfer into another storage location. Stock
transfers can occur either within the same plant or between two plants.

Transfer Postings (TP) is a general term for the stock transfers and changes in stock type or stock category of material. It is
irrelevant whether postings occur in conjunction with a physical movement or not. For eg:

Transfer posting from Material to Material

Release from quality inspection stock
Transfer of consignment material into company’s own stock
 MOVEMENT TYPE

“Movement Type” is a 3-digit identification key for a goods movement. There are standard movement
types defined in the system. The reversal movement type for the standard movement is standard
movement type + 1. For eg: the reversal for the movement type 101 is 102.

“Material Document” is generated in the Inventory Management System, when the goods movement is
posted. It acts as a proof of movement and source of information for any applications that follow. A
material document contains a Header and at-least one Line Item. Each line item describes one
movement.

When posting a goods movement, the following documents get generated automatically:
Material Document;
Accounting Document;
Controlling Document ; &
Profit Center Document
IMPLICATIONS OF GOODS MOVEMENT

“Transaction/Event Types” allows the detailed document number assignment and systematic storage of
documents, material documents. Similarly, the Accounting Documents are sub-divided into “Document
Types”. The linkage between the Transaction/Event Types with Accounting Document Types is as below:

When a goods movement is entered, the following chain of events takes place –

A material document is started which is used as proof of the movement and source of information
for any other applications involved.
If the movement is relevant for financial accounting, one or more accounting documents will be
generated.
The stock quantities of the materials are updated.
The stock values in the material master record are also updated, as are the stock and
consumption accounts.

Depending upon the movement type, additional updates are carried out. For eg: in the case of the goods
issue to cost center, the consumption values of the items are also updated.
AGENDA

FI-MM INTEGRATION - WHAT IS HAPPENING CURRENTLY FOR BUSINESS

TRANSACTIONS?

FUNDAMENTALS FOR FI-MM INTEGRATION

UNDERSTANDING OF FI-MM INTEGRATION – FROM MM TRANSACTION TO

FI JOURNAL ENTRY

ADVANCED TOPICS IN FI-MM INTEGRATION ALONG WITH ISSUES DURING

IMPLEMENTATION

KEY TRANSACTION CODES PERTAINING TO FI-MM INTEGRATION

EXERCISES
BASICS FOR FI-MM INTEGRATION

“Automatic Account Determination” for the Material Transactions allows the automatic determination of
GL Accounts based on configuration settings, thereby enabling the posting of the Financial Document(s) for
the Material Document. The determination of the GL Account is dependant on the following parameters:

Chart of Accounts;
Valuation Grouping Code;
Transaction Key;
Account Modifier; &
Valuation Class of the Material.

For every material transaction, the following are the mandatory parameters, which need to be mentioned:
Plant
Material
Movement Type

Plant represents the organizational unit, where the material transaction happens. This business transaction
affects the inventory position in that plant. Plant also represents the valuation area, regarding valuation .

Material represents the object which being transacted through this material transaction.

Movement Type represents the business process, which drives the material movement.
OBJECT DERIVATION FOR FINANCIALS

G/L
ACCOUNT
FI-MM INTEGRATION - PICTORIAL
AGENDA

FI-MM INTEGRATION - WHAT IS HAPPENING CURRENTLY FOR

BUSINESS TRANSACTIONS?

FUNDAMENTALS FOR FI-MM INTEGRATION

UNDERSTANDING OF FI-MM INTEGRATION – FROM MM

TRANSACTION TO FI JOURNAL ENTRY

ADVANCED TOPICS IN FI-MM INTEGRATION ALONG WITH ISSUES

DURING IMPLEMENTATION

KEY TRANSACTION CODES PERTAINING TO FI-MM INTEGRATION

EXERCISES
TRANSACTION / EVENT KEY : HEART OF FI-MM INTEGRATION
“Transaction/Event Key” are pre-defined for those Inventory Management and Invoice Verification
Document relevant for Accounting. Posting Transactions are generalized by “Value Strings” and each of
the Value Strings are assigned to the relevant Movement Types.
“Account Grouping” is the finer sub-division of
Transaction/Event Key for Account Determination.
The following the Account Groupings available:

GBB – Offsetting Entry for Inventory Postings

PRD – Price Difference
KON – Contingent Liabilities

It is possible to define own Account Groupings for

GBB, whereas it is pre-defined for PRD & KON.
TRANSACTION KEY DETERMINATION
“Movement Types” play a significant role in the determination of the Transaction Key and its allowed
Account Modifier. The Determination of the Transaction Key is also dependent on other parameters like:

Special Stock Indicator;

Value & Quantity Updates;
Value String with Condition Count

Let us study this for the Movement Type “201 – Goods Issue to Cost Center”
DECODING : MM DOCUMENT TO FI DOCUMENT
MATERIAL DOCUMENT

To determine the GL Account, the below mentioned parameters are derived from given parameters:
 FAQ’s – FI MM INTEGRATION ASPECTS

1. The Organization has both Manufacturing facilities and also Export Bonded Warehouse, wherein GL
Accounts for Inventory Postings needs to be different for Manufacturing & Bonded Warehouse.
a. It is assumed that the Manufacturing facilities and Bonded Warehouse are defined as “Plants” in SAP.
b. Define “Valuation Grouping Code” separately for Manufacturing facilities and Bonded Warehouse
“Z001” – Manufacturing Plants; &
“Z002” – Bonded Warehouse
c. In OBYC, ensure that the Transaction Keys are defined for both the Valuation Grouping Code and
assign different GL Accounts based on the Valuation Grouping Code.

*****************************************************************************************************************
2. The Price Variance calculated by SAP should be able to provide the classification of the variances
between procurement variances and production variances for better responsibility management
(i.e) procurement variances by Purchasing Department and production variances by Production
Department
a. The Variances will be calculated by the system for the Material(s) with Price Control Indicator “S” –
Standard Price (Exceptional Cases for “V” – Moving Average Price)
b. For the Transaction Key “PRD” – Price Differences, enable the Account Grouping as below:
“Blank” - Price Difference for Goods & Invoice Receipts against Purchase Order;
“PRF” – Price Difference for Goods Receipts against Production Order and Order Settlement;
“PRA” – Price Difference for Goods Issue and Other Movements; &
“PRU” – Price Difference for Transfer Postings
c. In OBYC, different GL Accounts can be defined for each of the “Account Modifiers”.
FAQ’s – FI MM INTEGRATION ASPECTS

3. In SAP, the Consumption is a “Booked Value” unlike Traditional Accounting wherein Consumption is
a “Derived Value”. Hence, it is required to have “Purchases Value” captured in SAP.
a. It is assumed that the “Purchase Accounting” is active at the Company Code Global Settings level .
b. The Purchase Account settings needs to be activated through the Transaction Keys in OBYC as below:
“EIN” – Purchase Account; &
“EKG” – Purchase Offsetting Account
c. The Purchase Account is booked for the same value as the “Stock Value” and the Purchase Offsetting
Account is booked for the same value as “Purchase Account”, thereby balancing Purchase Accounts.

*****************************************************************************************************************
4. Suggest the levels at which the GL Accounts need to be defined distinctively in-order enable
coherent reporting between Materials Management (MM) and Financial Accounting (FI)

a. Normally it is suggestive that the GL Accounts needs to be different at the Material Type level
b. It is suggested that each Material Type in Materials Management need to have the complete set of
GL Accounts in Financial Accounting for the following business transactions:
- Stock Accounts;
- Consumption Accounts;
- Subcontracting Activities Accounts; &
- Transfer Posting Accounts.
c. The further sub-division of the GL Accounts for a particular Material Type (say Raw Materials) is
dependant on the individual business requirements.
 FAQ’s – FI MM INTEGRATION ASPECTS
5. During the transaction processing, the business requires to post the forward and its reverse
transactions to different GL Accounts (For eg: Variances Accounts)

a. It is possible to segregate the postings based on the Posting Rules in the OBYC transaction.
b. In the Posting Rules, we have the possibility to activate the “Debit/Credit Indicator”, thereby
enabling different GL Accounts for forward and its corresponding reverse transactions.
c. In the current business requirements, it is possible to activate the Debit (Adverse) and Credit
(Favourable) indicator and enable the tracking of the variances separately.

*****************************************************************************************************************
6. There are some specific Inventory transactions in the business, which requires postings to be done
to specific GL Accounts other than the regular Inventory Accounts (Movement between the Bonded
and Non-Bonded warehouse)

a. Normally it is suggestive the business requirements need to mapped through the Standard SAP
processes using the standard objects.
b. However, if the business requirement is not met through the standard SAP processes, then it is better
to customize own objects to meet the business requirements
c. In this current business requirement, looks like we need to define a “Z” movement type in Materials
Management (MM) and also its corresponding GL Accounts. The actual configuration of the “Z”
movement type needs to be done after understanding the business requirements completely.
d. There is also an Exercise scheduled in this regard at the end of this presentation.
AGENDA

FI-MM INTEGRATION - WHAT IS HAPPENING CURRENTLY FOR

BUSINESS TRANSACTIONS?

FUNDAMENTALS FOR FI-MM INTEGRATION

UNDERSTANDING OF FI-MM INTEGRATION – FROM MM

TRANSACTION TO FI JOURNAL ENTRY

ADVANCED TOPICS IN FI-MM INTEGRATION ALONG WITH ISSUES

DURING IMPLEMENTATION

KEY TRANSACTION CODES PERTAINING TO FI-MM INTEGRATION

EXERCISES
 CONFIGURATION & MASTER DATA
Organization Units

Configuration Data

Master Data

FI-MM Configuration
Settings in Sekurit

TBFI38_V5_MM-FI_Automatic postings English.xls.zip

QUESTIONS / CLARIFICATIONS
 AGENDA

FI-MM INTEGRATION - WHAT IS HAPPENING CURRENTLY

FOR BUSINESS TRANSACTIONS?

FUNDAMENTALS FOR FI-MM INTEGRATION

UNDERSTANDING OF FI-MM INTEGRATION – FROM MM

TRANSACTION TO FI JOURNAL ENTRY

ADVANCED TOPICS IN FI-MM INTEGRATION ALONG

WITH ISSUES DURING IMPLEMENTATION

KEY TRANSACTION CODES PERTAINING TO FI-MM

INTEGRATION

EXERCISES
 EXERCISES

BUSINESS REQUIREMENTS

To have distinction between Material Issues for Production Order and Internal Order in both the
Material Management Module as well as Financial Management Module.

UNDERSTANDING OF THE BUSINESS NEEDS

In Materials Management Module, the Material Issues should be distinguished at the Transaction
Level (i.e) a different Material Movement Type for Issues to Internal Order from that of the Issues
to the Production Order.

In Financial Module, the General Ledger Account for the Issues to the Internal Order should be
different from the General Ledger Account for the Issues to the Production Order.

Configuration should also ensure that the Material Issues happening from different plants flow to
the respective General Ledger Accounts as per the Business Requirements.

Validation should be built in so that the Material Issues to the Internal Order should be done only
with the Movement Type identified for this purpose.
 SOLUTION STEPS
SOLUTION STEPS

Identify the Standard Movement Type corresponding to the Movement Type required. In this case,
the Standard Movement Type “261” corresponds to the Business Requirements.
Proceed to the Movement Type Configuration “OMJJ” and copy the Standard Movement Type,
including the dependant entries, into a “Z” Movement Type. (Note: It is always recommended to
copy a Standard Movement Type rather than creating a Movement Type from the scratch)
Copy the Standard Movement Type “261” into “Z” Movement Type “Z61”. Also, do not forget to
copy the Reversal Movement Type “262” into “Z” Movement Type “Z62”.
Proceed to the Automatic Account Configuration “OBYC” and consider the Transaction Key “GBB”
and Account Modifier “VBR”, which is responsible for the Material Issues against the Order.
Copy the Configuration Settings for the Account Modifier “VBR” into another “Z” Account Modifier
for the Transaction Key “GBB”. Let us assume that the “Z” Account Modifier is “ZBR”.
Define and Assign the New GL Accounts defined for this purpose to the Transaction Key “GBB” and
Account Modifier “ZBR”.
Once again, go back to the Movement Type Configuration and select the Movement Type “Z61”
and proceed to the sub-menu “Account Grouping”. Modify the Account Modifier from “VBR” to
“ZBR” to complete the linkage between the Movement Type and Automatic Account Configuration
for the Material Movements.
 ACHIEVED OBJECTIVES

FI-MM INTEGRATION – UNDERSTANDING OF CURRENT

BUSINESS TRANSACTIONS

FUNDAMENTALS FOR FI-MM INTEGRATION

UNDERSTANDING OF FI-MM INTEGRATION – FROM MM

TRANSACTION TO FI JOURNAL ENTRY

ADVANCED TOPICS IN FI-MM INTEGRATION ALONG

WITH FAQ’s IN INTEGRATION ASPECTS

KEY TRANSACTION CODES PERTAINING TO FI-MM

INTEGRATION

EXERCISES FOR CREATION OF THE “Z” MOVEMENT TYPE

AND ITS IMPLICATIONS
 POST TRAINING SESSION

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most WELCOME