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Integrating Materials Management with Financial Accounting in SAP (2nd Edition)

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Product Details

ISBN:
978-1-59229-426-8
Author:
Faisal Mahboob
Type:
Hardcover, 508 pages
Year:
2012

Product Description and Table of Contents

  • Explains the key financial integration points in Materials Management
  • Includes best practices, real-world examples, and configuration steps for logistics, business transactions, and more
  • Teaches you how to integrate procurement and financial accounting processes
  • 2nd Edition Updated for SAP ERP 6.0, EHP 5 and 6

Master Financial Accounting (FI) and Materials Management (MM) with this completely updated and comprehensive guide. Explore the integration of MM and FI and optimize your entire supply chain network with ease. Ensure that you have the right product, in the right place, at the right quantity and price to meet your business needs. With a practical, straightforward approach, benefit from real-world examples, troubleshooting techniques, and step-by-step descriptions to create a smooth and efficient procurement process.

Relationship between Materials Management and Financial Accounting
Discover the relationship between Materials Management and Financial Accounting and learn how to drive an efficient procurement process.

Configure your SAP Procurement
Configure the FI and MM components with ease and learn the pros and cons of each within an SAP ERP workflow.

MM and FI Processes and Concepts
Improve your procurement process with a flexible and integrated MM solution set that highlights FI compliance and account and controlling postings.

Technical Meets Functional
Discover the technical aspects of SAP ERP functionality, including coding and database tables to help you develop a more technical understanding of integration issues.

Second Edition, Updated and Expanded
Updated to include new and expanded content on differential invoicing with respect to purchasing, inventory management, invoice verification, and more.


Highlights

  • Basic configuration
  • Stock and consumption materials
  • Procurement conditions
  • Troubleshooting techniques
  • Price determination
  • Material price change
  • Balance sheet valuation
  • AP invoicing
  • Account determination

The Author

Faisal Mahboob currently works in the UK as a freelance consultant in SAP MM/SRM. He has over 8 years of experience in SAP both on the technical and functional side of MM. Over the years, he has worked with almost every industry sector and every kind of project related to SAP MM, including implementation, support, upgrade, and global roll-out.


Table of Contents

  • ... Preface ... 17
  • 1 ... Overview of SAP ERP ... 19
  • 1.1 ... The Building Blocks of SAP ERP ... 19
  • 1.1.1 ... Financials ... 20
  • 1.1.2 ... Logistics ... 21
  • 1.1.3 ... Human Resources ... 22
  • 1.1.4 ... Materials Management ... 22
  • 1.2 ... Integration of Materials Management in SAP ERP ... 24
  • 1.3 ... Analysis and Resources for Materials Management ... 25
  • 1.3.1 ... SAP Easy Access ... 26
  • 1.3.2 ... SAP Customizing ... 27
  • 1.3.3 ... SAP Library ... 29
  • 1.3.4 ... SAP Service Marketplace ... 31
  • 1.4 ... Business Processes ... 34
  • 1.4.1 ... Procure to Pay (P2P) ... 34
  • 1.4.2 ... Order to Cash (O2C) ... 34
  • 1.4.3 ... Forecast to Stock (F2S) ... 35
  • 1.4.4 ... Record to Report (R2R) ... 35
  • 1.4.5 ... Acquire to Retire (A2R) ... 35
  • 1.4.6 ... Hire to Retire (H2R) ... 35
  • 1.5 ... Technical Aspects of SAP ERP ... 36
  • 1.5.1 ... Enhancement Package ... 36
  • 1.5.2 ... Business Function ... 37
  • 1.5.3 ... Switch Framework ... 38
  • 1.5.4 ... Service-Oriented Architecture (SOA) ... 38
  • 1.6 ... Summary ... 39
  • 2 ... Overview of the Materials Management and Financials Relationship ... 41
  • 2.1 ... Elements of Materials Management ... 43
  • 2.1.1 ... Purchasing ... 44
  • 2.1.2 ... Inventory Management ... 48
  • 2.1.3 ... Material Valuation ... 49
  • 2.1.4 ... Logistics Invoice Verification ... 50
  • 2.1.5 ... GR/IR Account Maintenance ... 51
  • 2.2 ... Elements of Financial Accounting ... 52
  • 2.2.1 ... SAP General Ledger ... 52
  • 2.2.2 ... Accounts Payable ... 53
  • 2.2.3 ... Asset Accounting ... 53
  • 2.3 ... Elements of Controlling ... 54
  • 2.3.1 ... Cost Element Accounting ... 55
  • 2.3.2 ... Cost Center Accounting ... 55
  • 2.3.3 ... Activity-Based Costing ... 56
  • 2.3.4 ... Internal Orders ... 56
  • 2.3.5 ... Product Cost Controlling ... 56
  • 2.3.6 ... Profitability Analysis ... 56
  • 2.3.7 ... Profit Center Accounting ... 56
  • 2.4 ... Relationship between the Elements of Materials Management and Financial Accounting and Controlling ... 58
  • 2.4.1 ... Commitments in Procurement ... 58
  • 2.4.2 ... Elements of Financial Accounting and Controlling in a Purchase Order ... 61
  • 2.4.3 ... Accounting Documents for Goods Receipt ... 62
  • 2.4.4 ... Accounting Documents for Invoices ... 62
  • 2.5 ... Reporting ... 64
  • 2.5.1 ... External Reports ... 65
  • 2.5.2 ... Management Reporting ... 65
  • 2.5.3 ... Business Intelligence ... 66
  • 2.6 ... Troubleshooting Techniques ... 68
  • 2.6.1 ... Introduction to Technical Elements ... 69
  • 2.6.2 ... The Troubleshooting Approach ... 71
  • 2.6.3 ... The Technical Analysis ... 71
  • 2.6.4 ... Debugging ... 72
  • 2.7 ... Summary ... 75
  • 3 ... Basics of Configuration and the Processes in Procurement ... 77
  • 3.1 ... General Settings ... 77
  • 3.1.1 ... Settings for Currency Codes ... 79
  • 3.1.2 ... Decimal Places for Currencies ... 79
  • 3.1.3 ... Standard Quotation for Exchange Rates ... 80
  • 3.1.4 ... Prefix for Quotation of Exchange Rates ... 80
  • 3.1.5 ... Exchange Rate Type ... 81
  • 3.1.6 ... Translation Ratios for Currencies ... 82
  • 3.1.7 ... Exchange Rates ... 83
  • 3.1.8 ... Exchange Rate Spread ... 83
  • li class="liivzthree">3.1.9 ... Rounding Rule ... 83
  • 3.2 ... Enterprise Structure ... 84
  • 3.2.1 ... Definition ... 86
  • 3.2.2 ... Assignment ... 90
  • 3.2.3 ... Materials Management Enterprise Structure ... 93
  • 3.2.4 ... Financial Accounting Enterprise Structure ... 95
  • 3.3 ... Processes in Procurement ... 96
  • 3.3.1 ... Procurement Cycle ... 99
  • 3.3.2 ... Procurement of Stock Material ... 102
  • 3.3.3 ... Procurement of Consumable Materials ... 102
  • 3.3.4 ... Procurement of External Services ... 104
  • 3.4 ... Master Data ... 105
  • 3.4.1 ... General Ledger Account ... 106
  • 3.4.2 ... Cost Element ... 107
  • 3.4.3 ... Cost Center ... 107
  • 3.4.4 ... Profit Center ... 108
  • 3.4.5 ... Internal Orders ... 108
  • 3.4.6 ... Segment ... 109
  • 3.4.7 ... Material Master ... 110
  • 3.4.8 ... Vendor Master ... 113
  • 3.4.9 ... Master Data in Purchasing ... 116
  • 3.5 ... Documents in Procurement ... 117
  • 3.5.1 ... Purchase Requisition ... 117
  • 3.5.2 ... Request for Quotation and Quotation ... 119
  • 3.5.3 ... Purchase Orders ... 121
  • 3.5.4 ... Outline Purchase Agreements ... 128
  • 3.5.5 ... Purchasing Info Records ... 130
  • 3.6 ... Summary ... 131
  • 4 ... Procurement of Stock and Consumable Materials ... 133
  • 4.1 ... Procurement of Stock Material ... 133
  • 4.1.1 ... Stock Material within Document Flow ... 134
  • 4.1.2 ... RFQs/Quotations ... 141
  • 4.1.3 ... Conditions and Calculation Schema ... 145
  • 4.1.4 ... Purchasing Info Record ... 150
  • 4.1.5 ... Stock and Valuation ... 152
  • 4.1.6 ... Material Valuation Procedure ... 154
  • 4.1.7 ... Stock Valuation in Inventory Management and LIV ... 156
  • 4.2 ... Procurement of Consumable Materials ... 159
  • 4.2.1 ... Purchase Requisition and Purchase Order ... 160
  • 4.2.2 ... Blanket Purchase Order ... 162
  • 4.2.3 ... Materials Management Multiple Account Assignment ... 165
  • 4.3 ... Procurement of External Services ... 168
  • 4.3.1 ... Procurement Cycle for External Services ... 168
  • 4.3.2 ... Service Entry Sheet, Its Acceptance, and Its Invoicing ... 171
  • 4.4 ... Subcontracting ... 176
  • 4.4.1 ... Subcontracting in Purchasing ... 177
  • 4.4.2 ... Subcontracting in Inventory Management ... 178
  • 4.4.3 ... Subcontracting in Logistics Invoice Verification ... 179
  • 4.4.4 ... Price Difference for Subcontract Order at Goods Receipt ... 180
  • 4.4.5 ... Technical Elements of Subcontracting ... 187
  • 4.5 ... Summary ... 188
  • 5 ... Conditions, Price Determination, and the Basics of Material Price Changes ... 189
  • 5.1 ... Conditions and Price Determination ... 189
  • 5.1.1 ... Elements of Condition Techniques ... 190
  • 5.1.2 ... Price Determination ... 200
  • 5.1.3 ... Header and Group Conditions ... 210
  • 5.1.4 ... Special Condition Types and Special Functions ... 211
  • 5.1.5 ... Subsequent Settlement ... 221
  • 5.2 ... Basics of Material Price Changes ... 224
  • 5.2.1 ... Control of Material Valuation ... 225
  • 5.2.2 ... Valuation Structure ... 227
  • 5.2.3 ... Changes in Material Valuation ... 229
  • 5.3 ... Summary ... 230
  • 6 ... Balance Sheet Valuation ... 231
  • 6.1 ... Lowest Value Determination ... 232
  • 6.1.1 ... Lowest Value Determination Based on Market Prices ... 233
  • 6.1.2 ... Lowest Value Determination Based on Range of Coverage ... 235
  • 6.1.3 ... Lowest Value Determination Based on Movement Rate ... 237
  • 6.1.4 ... Lowest Value Determination Based on Loss-Free Valuation ... 241
  • 6.2 ... LIFO Valuation ... 241
  • 6.2.1 ... LIFO Methods and the Layer Versions ... 244
  • 6.2.2 ... Quantity and Index LIFO Procedures ... 247
  • 6.2.3 ... Pool LIFO Valuation ... 253
  • 6.2.4 ... Lowest Value Comparison ... 254
  • 6.3 ... FIFO Valuation ... 255
  • 6.3.1 ... FIFO Configuration ... 256
  • 6.3.2 ... Procedures for FIFO Valuation ... 258
  • 6.4 ... Summary ... 258
  • 7 ... Material Price Change ... 259
  • 7.1 ... Value Changes in Inventory Management ... 259
  • 7.1.1 ... Goods Receipt for Purchase Orders ... 260
  • 7.1.2 ... Account Postings: Planned Delivery Costs ... 262
  • 7.1.3 ... Delivery Free of Charge ... 263
  • 7.1.4 ... Value Changes in Transfer Postings ... 264
  • 7.1.5 ... Initial Entry of Inventory Data ... 270
  • 7.1.6 ... Goods Receipt Reversal ... 272
  • 7.1.7 ... Inventory Management Inconsistency Prevention ... 278
  • 7.2 ... Value Changes in Logistics Invoice Verification ... 280
  • 7.2.1 ... Subsequent Debit/Credit ... 281
  • 7.2.2 ... GR/IR Clearing Account Maintenance ... 284
  • 7.3 ... Value Changes Resulting from Cash Discounts ... 286
  • 7.3.1 ... Gross Goods Receipt/Gross Invoice Receipt ... 287
  • 7.3.2 ... Gross Goods Receipt/Net Invoice Receipt ... 288
  • 7.3.3 ... Net Goods Receipt/Net Invoice Receipt ... 289
  • 7.4 ... Revaluation ... 289
  • 7.4.1 ... Price Changes in the Previous Period Only ... 291
  • 7.4.2 ... Price Changes in the Previous and Current Period ... 292
  • 7.5 ... Posting to a Previous Period ... 293
  • 7.5.1 ... Posting Goods Movements to the Previous Period ... 294
  • 7.5.2 ... Posting Invoices to the Previous Period ... 295
  • 7.5.3 ... Posting to a Previous Period after a Price Change ... 295
  • 7.5.4 ... Stock Shortage in the Current Period ... 297
  • 7.6 ... Several Accounting Documents during LIV ... 298
  • 7.7 ... Closing Previous Period for Posting ... 299
  • 7.8 ... Summary ... 300
  • 8 ... Accounts Payable Invoice from Materials Management ... 301
  • 8.1 ... Logistics Invoice Verification ... 301
  • 8.1.1 ... Functional Basis ... 302
  • 8.1.2 ... SAP Functional Design ... 302
  • 8.1.3 ... Checkpoints and Real-Time Issues ... 305
  • 8.1.4 ... Technical Elements ... 305
  • 8.1.5 ... Troubleshooting Tips ... 306
  • 8.2 ... Incoming Invoice ... 306
  • 8.2.1 ... Functional Basis ... 307
  • 8.2.2 ... SAP Functional Design ... 307
  • 8.2.3 ... Checkpoints and Real-Time Issues ... 309
  • 8.2.4 ... Technical Elements ... 310
  • 8.2.5 ... Troubleshooting Tips ... 312
  • 8.3 ... Invoice Verification Online ... 313
  • 8.3.1 ... Functional Basis ... 313
  • 8.3.2 ... SAP Functional Design ... 313
  • 8.3.3 ... Invoices for a One-Time Vendor ... 319
  • 8.3.4 ... Duplicate Invoice Check ... 323
  • 8.3.5 ... Checkpoints and Real-Time Issues ... 325
  • 8.3.6 ... Technical Elements ... 329
  • 8.3.7 ... Materials Management, Financial Accounting, and Controlling Interface for Transaction MIRO ... 330
  • 8.3.8 ... Business Transaction Events (Open FI) ... 331
  • 8.4 ... Invoice Parking ... 332
  • 8.4.1 ... Functional Basis ... 332
  • 8.4.2 ... SAP Functional Design ... 332
  • 8.4.3 ... Integration with Financial Accounting ... 335
  • 8.4.4 ... Checkpoints and Real-Time Issues ... 336
  • 8.4.5 ... Troubleshooting Tips ... 337
  • 8.5 ... Prepayment ... 337
  • 8.5.1 ... Functional Basis ... 337
  • 8.5.2 ... SAP Functional Design ... 338
  • 8.5.3 ... Checkpoints and Real-Time Issues ... 339
  • 8.5.4 ... Troubleshooting Tips ... 340
  • 8.6 ... Invoice Verification in the Background ... 341
  • 8.6.1 ... Functional Basis ... 341
  • 8.6.2 ... SAP Functional Design ... 342
  • 8.6.3 ... Technical Elements ... 343
  • 8.6.4 ... Checkpoints and Real-Time Issues ... 344
  • 8.6.5 ... Troubleshooting Tips ... 345
  • 8.7 ... Account Determination ... 345
  • 8.7.1 ... Principles of Financial Accounting Integration in an SAP System ... 345
  • 8.7.2 ... Functional Elements of Account Determination ... 347
  • 8.8 ... Purchase Account Management ... 347
  • 8.8.1 ... Postings at Receipt Value ... 348
  • 8.8.2 ... Postings at Stock Value ... 348
  • 8.9 ... Direct Posting ... 349
  • 8.9.1 ... Posting to SAP General Ledger Accounts ... 349
  • 8.9.2 ... Posting to a Materials Account ... 351
  • 8.10 ... Posting Taxes ... 352
  • 8.10.1 ... Types of Taxes ... 353
  • 8.10.2 ... Proposal Logic for Tax Codes ... 355
  • 8.10.3 ... Settings for Taxes in Customizing and in Master Data ... 357
  • 8.10.4 ... Technical Flow and Architecture ... 358
  • 8.10.5 ... Technical Details of Tax Calculations ... 359
  • 8.11 ... Cash Discount ... 360
  • 8.11.1 ... Cash Discount Base ... 361
  • 8.11.2 ... Cash Discount Postings ... 361
  • 8.12 ... Summary ... 365
  • 9 ... Variances and Blocking of Invoices ... 367
  • 9.1 ... Invoice with Variances ... 367
  • 9.1.1 ... Quantity Variance ... 368
  • 9.1.2 ... Price Variance ... 372
  • 9.1.3 ... Quantity and Price Variance ... 377
  • 9.1.4 ... Order Price Quantity Variance ... 382
  • 9.2 ... Invoice Blocking ... 385
  • 9.2.1 ... Functional Basis ... 386
  • 9.2.2 ... SAP Functional Design ... 386
  • 9.2.3 ... Checkpoints and Real-Time Issues ... 393
  • 9.2.4 ... Technical Elements ... 393
  • 9.2.5 ... Troubleshooting Tips ... 394
  • 9.3 ... Invoice Release ... 396
  • 9.3.1 ... Functional Basis ... 396
  • 9.3.2 ... SAP Functional Design ... 396
  • 9.3.3 ... Checkpoints and Real-Time Issues ... 399
  • 9.3.4 ... Technical Elements ... 400
  • 9.3.5 ... Troubleshooting Tips ... 401
  • 9.4 ... Delivery Costs ... 402
  • 9.4.1 ... Planned Delivery Costs ... 402
  • 9.4.2 ... Unplanned Delivery Costs ... 407
  • 9.5 ... Total-Based Differences ... 412
  • 9.5.1 ... Functional Basis ... 412
  • 9.5.2 ... SAP Functional Design ... 412
  • 9.5.3 ... Checkpoints and Real-Time Issues ... 414
  • 9.5.4 ... Technical Elements ... 415
  • 9.5.5 ... Troubleshooting Tips ... 415
  • 9.6 ... Invoices for Purchase Orders with Account Assignment ... 416
  • 9.7 ... Entering Invoices in a Foreign Currency ... 418
  • 9.7.1 ... Parallel Currencies in Material Ledger ... 420
  • 9.7.2 ... Parallel Local Currencies in Financial Accounting ... 421
  • 9.7.3 ... Exchange Rate Rounding Difference ... 421
  • 9.7.4 ... Exchange Rate Differences for Standard Price-Controlled Materials ... 422
  • 9.8 ... Summary ... 430
  • 10 ... Additional Functionalities in LIV ... 431
  • 10.1 ... Valuation and Account Determination ... 431
  • 10.1.1 ... Influencing Factors ... 432
  • 10.1.2 ... Organizational Level Dependency ... 433
  • 10.1.3 ... Account Determination of Stock Materials ... 434
  • 10.1.4 ... Account Determination of Consumable Materials ... 441
  • 10.1.5 ... Simulation ... 443
  • 10.2 ... Automatic Settlements ... 445
  • 10.2.1 ... Evaluated Receipt Settlement (ERS) ... 445
  • 10.2.2 ... Consignment and Pipeline Settlement ... 450
  • 10.2.3 ... Revaluation ... 453
  • 10.2.4 ... Invoicing Plan Settlement ... 457
  • 10.3 ... Messages in Logistics Invoice Verification ... 459
  • 10.3.1 ... Areas of Messages ... 460
  • 10.3.2 ... Message Schema ... 461
  • 10.3.3 ... Outputting Messages ... 461
  • 10.4 ... Credit Memos, Returns, and Reversals ... 462
  • 10.5 ... GR/IR Clearing Account ... 466
  • 10.6 ... Summary ... 470
  • 11 ... Conclusion ... 471
  • 11.1 ... Lessons Learned ... 471
  • 11.2 ... Additional Resources ... 474
  • ... Appendices ... 477
  • A ... Optimizing the Integration between Materials Management and Financial Accounting ... 479
  • A.1 ... Screen Layout ... 479
  • A.2 ... Validation ... 481
  • A.3 ... Substitution ... 483
  • A.4 ... Technical Elements of Validation and Substitutions ... 483
  • A.5 ... Enhancements ... 486
  • B ... Commonly Used Abbreviations ... 489
  • C ... References ... 493
  • D ... Useful Links ... 495
  • E ... The Author ... 499
  • ... Index ... 501



Product Reviews


Showing reviews 1-4 of 18 | Next

  1. Highly Recommend

    Posted by Anonymous on Mar 18th, 2014

    If you need answers MM and FI integration, do not hesitate to grab this book!


  2. Best MM book from SAP Press

    Posted by Kunal Parekh on Mar 18th, 2014

    I have looked at many SAP Press books but this is awesome. It has in-depth technical details and I do not think that I require any other book on this subject. Highly recommended!


  3. best fi - mm integration book i ever followed

    Posted by Anandaroop on Dec 23rd, 2013

    really nicely written. concepts are well explained.


  4. GOOD ONE

    Posted by Anonymous on Nov 8th, 2013

    This book have good integration with other module with FICO.


Showing reviews 1-4 of 18 | Next

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