Integration of Materials Management with Financial Accounting in SAP

Click to enlarge

Price:

Starting From $69.99

Product Code:

H3130

Average Rating:

( 12 product reviews )

Availability:

Discontinued THIS PRODUCT HAS BEEN REPLACED BY A NEW EDITION.CLICK HERE TO VIEW THE LATEST VERSION.

Product Details

ISBN:

978-1-59229-337-7

Author(s):

Faisal Mahboob

Format:

Hardcover, 432 pages

Year:

2010

Product Description and Table of Contents

This book teaches you about Materials Management (MM) and Financial Accounting (FI), and the intersection points between them. It explains how to configure the system so that you can streamline your business and continually improve your procurement processes with MM and FI. You’ll learn about account and controlling postings as related to FI compliance, and their impact on MM functional design and configuration. You’ll find practical, real-world examples, troubleshooting techniques, and step-by-step descriptions throughout to help you master this crucial integration effectively.

Relationship Between Materials Management and Financial Accounting
Discover the relationship between Materials Management and Financial Accounting, and learn how you can drive an efficient procurement process.

Materials Management and Financial Accounting Functionalities
Get a thorough understanding of a flexible, integrated MM solution set that allows your business to grow efficiently.

Configuring the SAP System
Learn how to configure MM and FI in SAP ERP, focusing on the continued business improvement of procurement.

Technical Database Tables and Coding
Discover the technical aspects of SAP ERP functionalities, including coding and database tables, to help you develop a more technical understanding of integration issues.

Practical, Real-World Examples and Troubleshooting Tips
Find expert advice provided throughout to help you find solutions to your own MM/FI issues.

Highlights

· Master Data
· Stock Material
· Consumption Material
· External Services
· Subcontracting
· Conditions
· Price Determination
· Material Price Change
· Split Valuation
· Accounts Payable Invoices
· Blocking Invoices
· Invoices with Variances

The Author

Faisal Mahboob works in the UK as a freelance consultant in Materials Management and Supplier Relationship Management. He has over 9 years of experience in SAP on the functional and technical sides of MM, and has worked with various industry sectors on implementation, support, upgrade, and global roll out.

... Preface ... 15
1 ... Introduction ... 19
1.1 ... Business ... 19
1.2 ... Enterprise Resource Planning ... 20
1.3 ... Procurement and Finance ... 20
1.4 ... Purpose of this Book ... 22
1.5 ... Scope of the Book ... 23
1.6 ... Summary ... 23
2 ... Overview of SAP ERP ... 25
2.1 ... The Building Blocks of SAP ERP ... 25
2.1.1 ... Financials ... 26
2.1.2 ... Logistics ... 27
2.1.3 ... Human Resources ... 28
2.1.4 ... Materials Management ... 28
2.2 ... Integration of Materials Management in SAP ERP ... 30
2.3 ... Analysis and Resources for Materials Management ... 31
2.3.1 ... SAP Easy Access ... 32
2.3.2 ... SAP Customizing ... 32
2.3.3 ... SAP Library ... 35
2.3.4 ... SAP Service Marketplace ... 37
2.4 ... Summary ... 40
3 ... Overview of the Materials Management and Financials Relationship ... 41
3.1 ... Elements of Materials Management ... 43
3.1.1 ... Purchasing ... 44
3.1.2 ... Inventory Management ... 48
3.1.3 ... Material Valuation ... 49
3.1.4 ... Logistics Invoice Verification ... 50
3.1.5 ... GR/IR Account Maintenance ... 51
3.2 ... Elements of Financial Accounting ... 52
3.2.1 ... General Ledger ... 52
3.2.2 ... Accounts Payable ... 52
3.2.3 ... Asset Accounting ... 53
3.3 ... Relationship between the Elements of Materials Management and Financial Accounting and Controlling ... 54
3.3.1 ... Commitments in Procurement ... 54
3.3.2 ... Elements of Financial Accounting and Controlling in a Purchase Order ... 57
3.3.3 ... Accounting Documents for Goods Receipt ... 58
3.3.4 ... Accounting Documents for Invoices ... 59
3.4 ... Troubleshooting Techniques ... 61
3.4.1 ... Introduction to Technical Elements ... 61
3.4.2 ... The Troubleshooting Approach ... 63
3.4.3 ... The Technical Analysis ... 64
3.4.4 ... Debugging ... 64
3.5 ... Summary ... 67
4 ... Basics of Configuration and the Processes in Procurement ... 69
4.1 ... Enterprise Structure ... 69
4.1.1 ... Definition ... 71
4.1.2 ... Assignment ... 75
4.1.3 ... Materials Management Enterprise Structure ... 78
4.1.4 ... Financial Accounting Enterprise Structure ... 80
4.2 ... Processes in Procurement ... 81
4.2.1 ... Procurement Cycle ... 84
4.2.2 ... Procurement of Stock Material ... 87
4.2.3 ... Procurement of Consumable Materials ... 88
4.2.4 ... Procurement of External Services ... 89
4.3 ... Master Data ... 91
4.3.1 ... Material Master ... 91
4.3.2 ... Vendor Master ... 95
4.3.3 ... Master Data in Purchasing ... 97
4.4 ... Documents in Procurement ... 99
4.4.1 ... Purchase Requisition ... 99
4.4.2 ... Request for Quotation and Quotation ... 100
4.4.3 ... Purchase Orders ... 102
4.4.4 ... Outline Purchase Agreements ... 108
4.4.5 ... Purchasing Info Records ... 111
4.5 ... Summary ... 111
5 ... Procurement of Stock and Consumable Materials ... 113
5.1 ... Procurement of Stock Material ... 113
5.1.1 ... Stock Material within Document Flow ... 114
5.1.2 ... RFQs/Quotations ... 121
5.1.3 ... Conditions and Calculation Schema ... 124
5.1.4 ... Purchasing Info Record ... 128
5.1.5 ... Stock and Valuation ... 130
5.1.6 ... Material Valuation Procedure ... 132
5.1.7 ... Stock Valuation in Inventory Management and LIV ... 134
5.2 ... Procurement of Consumable Materials ... 138
5.2.1 ... Purchase Requisition and Purchase Order ... 138
5.2.2 ... Blanket Purchase Order ... 141
5.3 ... Procurement of External Services ... 144
5.3.1 ... Procurement Cycle for External Services ... 144
5.3.2 ... Service Entry Sheet, Its Acceptance, and Its Invoicing ... 147
5.4 ... Subcontracting ... 152
5.4.1 ... Subcontracting in Purchasing ... 152
5.4.2 ... Subcontracting in Inventory Management ... 153
5.4.3 ... Subcontracting in Logistics Invoice Verification ... 154
5.4.4 ... Technical Elements of Subcontracting ... 155
5.5 ... Summary ... 156
6 ... Conditions, Price Determination, and the Basics of Material Price Changes ... 157
6.1 ... Conditions and Price Determination ... 157
6.1.1 ... Elements of Condition Techniques ... 157
6.1.2 ... Price Determination ... 168
6.1.3 ... Header and Group Conditions ... 176
6.1.4 ... Special Condition Types and Special Functions ... 178
6.1.5 ... Subsequent Settlement ... 181
6.2 ... Basics of Material Price Changes ... 184
6.2.1 ... Control of Material Valuation ... 185
6.2.2 ... Valuation Structure ... 187
6.2.3 ... Changes in Material Valuation ... 189
6.3 ... Summary ... 190
7 ... Balance Sheet Valuation ... 191
7.1 ... Lowest Value Determination ... 192
7.1.1 ... Lowest Value Determination Based On Market Prices ... 193
7.1.2 ... Lowest Value Determination Based On Range of Coverage ... 195
7.1.3 ... Lowest Value Determination Based On Movement Rate ... 197
7.1.4 ... Lowest Value Determination: Loss-Free Valuation ... 201
7.2 ... LIFO Valuation ... 201
7.2.1 ... LIFO Methods and the Layer Versions ... 204
7.2.2 ... Quantity and Index LIFO Procedures ... 206
7.2.3 ... Pool LIFO Valuation ... 212
7.2.4 ... Lowest Value Comparison ... 213
7.3 ... FIFO Valuation ... 214
7.3.1 ... FIFO Configuration ... 215
7.3.2 ... Procedures for FIFO Valuation ... 217
7.4 ... Summary ... 217
8 ... Material Price Change ... 219
8.1 ... Value Changes in Inventory Management ... 219
8.1.1 ... Goods Receipt for Purchase Orders ... 220
8.1.2 ... Account Postings: Planned Delivery Costs ... 222
8.1.3 ... Delivery Free of Charge ... 223
8.1.4 ... Value Changes in Transfer Postings ... 224
8.1.5 ... Initial Entry of Inventory Data ... 229
8.1.6 ... Goods Receipt Reversal ... 231
8.2 ... Value Changes in Logistics Invoice Verification ... 237
8.2.1 ... Subsequent Debit/Credit ... 238
8.2.2 ... GR/IR Clearing Account Maintenance ... 240
8.3 ... Value Changes Resulting from Cash Discounts ... 242
8.3.1 ... Gross Goods Receipt – Gross Invoice Receipt ... 243
8.3.2 ... Gross Goods Receipt – Net Invoice Receipt ... 244
8.3.3 ... Net Goods Receipt – Net Invoice Receipt ... 245
8.4 ... Revaluation ... 245
8.4.1 ... Price Changes in the Previous Period Only ... 247
8.4.2 ... Price Changes in the Previous and Current Period ... 247
8.5 ... Posting to a Previous Period ... 248
8.5.1 ... Posting Goods Movements to the Previous Period ... 250
8.5.2 ... Posting Invoices to the Previous Period ... 250
8.5.3 ... Posting to a Previous Period after a Price Change ... 251
8.5.4 ... Stock Shortage in the Current Period ... 252
8.6 ... Summary ... 254
9 ... Accounts Payable Invoice from Materials Management ... 255
9.1 ... Logistics Invoice Verification ... 255
9.1.1 ... Functional Basis ... 256
9.1.2 ... SAP Functional Design ... 256
9.1.3 ... Checkpoints and Real-time Issues ... 258
9.1.4 ... Technical Elements ... 259
9.1.5 ... Troubleshooting Tips ... 259
9.2 ... Incoming Invoice ... 260
9.2.1 ... Functional Basis ... 260
9.2.2 ... SAP Functional Design ... 260
9.2.3 ... Checkpoints and Real-Time Issues ... 262
9.2.4 ... Technical Elements ... 264
9.2.5 ... Troubleshooting Tips ... 265
9.3 ... Invoice Verification Online ... 266
9.3.1 ... Functional Basis ... 266
9.3.2 ... SAP Functional Design ... 267
9.3.3 ... Invoices for a One-Time Vendor ... 272
9.3.4 ... Duplicate Invoice Check ... 275
9.3.5 ... Checkpoints and Real-Time Issues ... 277
9.3.6 ... Technical Elements ... 278
9.3.7 ... Materials Management, Financial Accounting, and Controlling Interface for Transaction MIRO ... 280
9.4 ... Invoice Parking ... 280
9.4.1 ... Functional Basis ... 280
9.4.2 ... SAP Functional Design ... 281
9.4.3 ... Integration with Financial Accounting ... 283
9.4.4 ... Checkpoints and Real-Time Issues ... 284
9.4.5 ... Troubleshooting Tips ... 285
9.5 ... Prepayment ... 285
9.5.1 ... Functional Basis ... 285
9.5.2 ... SAP Functional Design ... 286
9.5.3 ... Checkpoints and Real-time Issues ... 287
9.5.4 ... Troubleshooting Tips ... 288
9.6 ... Invoice Verification in the Background ... 289
9.6.1 ... Functional Basis ... 289
9.6.2 ... SAP Functional Design ... 290
9.6.3 ... Technical Elements ... 291
9.6.4 ... Checkpoints and Real-Time Issues ... 292
9.6.5 ... Troubleshooting Tips ... 293
9.7 ... Account Determination ... 293
9.7.1 ... Principles of Financial Accounting Integration in an SAP System ... 293
9.7.2 ... Functional Elements of Account Determination ... 294
9.8 ... Purchase Account Management ... 295
9.8.1 ... Postings at Receipt Value ... 295
9.8.2 ... Postings at Stock Value ... 296
9.9 ... Direct Posting ... 297
9.9.1 ... Posting to SAP G/L Accounts ... 297
9.9.2 ... Posting to a Materials Account ... 298
9.10 ... Posting Taxes ... 299
9.10.1 ... Types of Taxes ... 299
9.10.2 ... Proposal Logic for Tax Codes ... 302
9.10.3 ... Settings for Taxes in Customizing and in Master Data ... 303
9.10.4 ... Technical Flow and Architecture ... 304
9.10.5 ... Technical Details of Tax Calculations ... 305
9.11 ... Cash Discount ... 305
9.11.1 ... Cash Discount Base ... 306
9.11.2 ... Cash Discount Postings ... 306
9.12 ... Summary ... 310
10 ... Variances and Blocking of Invoices ... 311
10.1 ... Invoice with Variances ... 311
10.1.1 ... Quantity Variance ... 312
10.1.2 ... Price Variance ... 316
10.1.3 ... Quantity and Price Variance ... 320
10.1.4 ... Order Price Quantity Variance ... 325
10.2 ... Invoice Blocking ... 329
10.2.1 ... Functional Basis ... 329
10.2.2 ... SAP Functional Design ... 329
10.2.3 ... Checkpoints and Real-Time Issues ... 336
10.2.4 ... Technical Elements ... 337
10.2.5 ... Troubleshooting Tips ... 338
10.3 ... Invoice Release ... 339
10.3.1 ... Functional Basis ... 339
10.3.2 ... SAP Functional Design ... 339
10.3.3 ... Checkpoints and Real-Time Issues ... 342
10.3.4 ... Technical Elements ... 343
10.3.5 ... Troubleshooting Tips ... 344
10.4 ... Delivery Costs ... 345
10.4.1 ... Planned Delivery Costs ... 345
10.4.2 ... Unplanned Delivery Costs ... 350
10.5 ... Total-Based Differences ... 354
10.5.1 ... Functional Basis ... 354
10.5.2 ... SAP Functional Design ... 354
10.5.3 ... Checkpoints and Real-Time Issues ... 356
10.5.4 ... Technical Elements ... 357
10.6 ... Invoices for Purchase Orders with Account Assignment ... 357
10.7 ... Entering Invoices in a Foreign Currency ... 360
10.8 ... Summary ... 361
11 ... Additional Functionalities in LIV ... 363
11.1 ... Valuation and Account Determination ... 363
11.1.1 ... Influencing Factors ... 364
11.1.2 ... Organizational Level Dependency ... 365
11.1.3 ... Account Determination of Stock Materials ... 366
11.1.4 ... Account Determination of Consumable Materials ... 372
11.1.5 ... Simulation ... 375
11.2 ... Automatic Settlements ... 376
11.2.1 ... Evaluated Receipt Settlement (ERS ... 377
11.2.2 ... Consignment and Pipeline Settlement ... 380
11.2.3 ... Revaluation ... 382
11.2.4 ... Invoicing Plan Settlement ... 386
11.3 ... Messages in Logistics Invoice Verification ... 387
11.3.1 ... Areas of Messages ... 388
11.3.2 ... Message Schema ... 389
11.3.3 ... Outputting Messages ... 390
11.4 ... Credit Memos, Returns, and Reversals ... 390
11.5 ... GR/IR Clearing Account ... 394
11.6 ... Summary ... 398
12 ... Conclusion ... 399
12.1 ... Lessons Learned ... 399
12.2 ... Additional Resources ... 402
... Appendices ... 403
A ... Optimizing the Integration between Materials Management and Financial Accounting ... 405
A.1 ... Screen Layout ... 405
A.2 ... Validation ... 407
A.3 ... Substitution ... 409
A.4 ... Technical Elements of Validation and Substitutions ... 409
A.5 ... Enhancements ... 412
B ... Commonly Used Abbreviations ... 415
C ... References ... 417
D ... Useful Links ... 419
E ... The Author ... 421
... Index ... 423

Additional Resource(s)

Download:

Corrected INDEX for readers of this book

Product Reviews

Showing reviews 1-4 of 12 | Next

Highly Recommended!

Posted by Ron Don on Jul 31st, 2012

There are two things that I love about this book. One being the diverse account posting examples. Two being the strong technical concepts for the database tables, function modules, reports, programs etc. It helps us with almost all the integration scenarios we work on.
Highly recommended!
Average Book

Posted by Nitin on Jun 15th, 2012

I have gone through this book in depth & finally reach on conclusion that this book is totally based on theoretical basis.

Subjects described on majorly by technical perspective not from functional perspective this book is good for those folks who never worked on any kind of MM integration specially for beginners not for experienced professionals who already worked on MM-FI integration.

Most of the topics described with theoretical examples not practical examples one thing is good about this book that you will get good understanding of MM database tables & it's relation to FI module.
Amazing book

Posted by Chika on May 31st, 2012

I really like this book, worth it to spend buck on this, you will no regret at all.
This book will complement my MM series, expecting SAP Press publishes similar content as this one for SD in the future !

I highly recommend this book to everyone.
Has lot of information

Posted by Hans Peters on May 14th, 2012

There is a lot of information in there. It gives me an idea of how vast SAP is. The concepts of procurement and finance have been explained well. Also, the book makes the complex topics appear simple. Overall, it provides a thoughtful insight into the integration and concepts.