Table of Contents

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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
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