Integration Points of MM FI in SAP

Mm Fi Integration Points In Sap

MM – FI Integration: Material -&gt, Material type .

– Automatic Account determination:

– GR =PO: 101: BSX – Dr., WRX: Cr. GR # PO: 521: BSX – Dr.

– Initial Stock Entry: 561: BSX – Dr.

– Physical Entry While Posting: MI07: BSX – Dr.

– Consignment and Pipeline: 201K, P, BSX – Dr.

Inventory Management in SAP

Let’s start with discussion of SAP MM FI integration in the area of inventory management. As you can tell from from its name, MM module is responsible for managing materials and inventory in SAP. However, value of the inventory must be reflected on financial accounts of a company. Stock of materials that a company has is its asset and it is a legal requirement to mention it on various financial reports. SAP ERP is able to automatically calculate value the company’s stock and keep financial accounts up-to-date thanks to the integration between MM and FI modules.

SAP utilizes various parameters to determine the appropriate accounts for different materials. When a goods movement is performed in MM, SAP automatically identifies these parameters.

1. Account Structure

2. Grouping Code for Valuation

3. Key for Transactions/Events

4. Grouping of Accounts

5. Classification of Valuation

SAP Integration Points for Chart of Accounts

The first parameter influencing automatic determination of accounts is the chart of accounts. SAP determines the chart of accounts based on the plant mentioned in an MM transaction. Each plant is assigned to a particular company code (transaction OX18 ) and each company code uses a particular chart of accounts (transaction OB62 ). This is how SAP knows which chart of accounts should be used for account determination.

Valuation Grouping Code in SAP: Integration Points

The use of valuation grouping codes in SAP allows for customized account determination based on different valuation areas. These valuation areas can be defined at either the company code or plant level. By assigning valuation areas to a specific valuation grouping code, they are treated similarly during account determination and correspond to the same G/L account. The configuration of these settings is done through SAP customizing transactions such as OX14 and OMWD.

Assign Valuation Grouping Code to Valuation Areas – Transaction OMWD

Valuation grouping code simplifies maintenance of customizing because you don’t need to enter the same account determination settings for individual valuation areas. If you would like to use valuation grouping code, it first must activated in transaction OMWM.

To enable the SAP Valuation Grouping Code, you can use the OMWM transaction.

Transaction/Event Key in SAP MM-FI Integration

The next parameter is associated with the MM transaction and provides information about the movement of goods. It is referred to as the transaction/event key, which is determined based on another parameter known as the posting value string (also called value string or posting string). The posting value string represents a set of rules that consistently includes specific characteristics for a particular transaction or event. SAP utilizes certain criteria to determine the appropriate posting string for values.

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The movement type, special stock indicator, value update, quantity update, movement indicator, and consumption posting indicator are all important integration points in SAP for MM-FI.

Modifying or adding new posting value strings is not possible as they are predefined and managed by SAP. To determine the relationship between posting strings, movement types, and other factors, you can refer to transaction OMWN.

Each posting value string is associated with multiple transaction/event keys. To view the complete details of these assignments, you can refer to table T156W or simply double click on a relevant line in the table displayed in transaction OMWN.

Transaction/Event Keys and Value Strings in Table T156W can be viewed using the SE16N transaction to browse tables.

The transaction/event keys in SAP are pre-set and cannot be changed. They are specifically designed for internal use within the system.

Integration Points of MM-FI in SAP

In certain situations, it may be necessary to split postings related to the same transaction or event key. For instance, when offsetting inventory postings are made (using the GBB transaction/event key), they can be for either goods issue or scrapping purposes. By utilizing account grouping codes, SAP is able to distinguish between these scenarios and assign different accounts accordingly.

Account Grouping (Account Modifier) in Transaction OMWN allows for the classification and organization of accounts within SAP. This feature enables users to group similar accounts together, making it easier to manage and analyze financial data. By assigning account modifiers, users can customize the grouping based on their specific business requirements.

Valuation Category

The use of valuation class in SAP enables us to customize the account determination for specific materials. This is done by assigning different valuation classes within the material master records on the Accounting 1 tab.

Valuation Class in Material Master – Transaction MM02 can be modified and updated.

Automatic Posting Configuration in SAP

After gaining knowledge about the various customization options for automatic account determination in SAP MM FI integration, we can now explore how different financial accounts are allocated to specific combinations of these parameters.

The setup for this is done in transaction OBYC. In the main screen of this transaction, you will find a compilation of all the available keys for transactions and events.

Automatic posting configuration can be done through the transaction OBYC in SAP.

To customize a specific transaction key, simply double click on the corresponding line and the system will prompt you to enter the applicable chart of accounts. Once entered, you can proceed to the next screen. For instance, we have displayed an example below where we customized G/L accounts related to the BSX transaction key.

Account determination for the BSX transaction key can be managed through the OBYC transaction in SAP.

In the given example, it is evident that not all parameters for account determination are utilized in this transaction key. SAP allows us to select which factors should be considered when determining accounts. Therefore, in straightforward scenarios, only specific parameters need to be used instead of all of them. The configuration of these chosen parameters can be done through the Rules button displayed in the screenshot above.

Furthermore, it is possible to customize the posting keys for automatic postings in the financial accounting module. This can be achieved by utilizing the Posting Key button for various rows within the account assignment table.

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Let’s have a look at a different example – transaction key GBB. As you can see from the screenshot below, all the available parameters for account determination are used in this case. “Valuation modification” column contains valuation grouping code that we discussed earlier. “General modification” column contains account grouping code that we also mentioned earlier.

The process of determining the account for the GBB transaction key can be done through the OBYC transaction in SAP.

We should also examine the Rules screen for this transaction key.

In the scenario of GBB transaction key, the selection of accounts is dependent on various factors and parameters.

The SAP system utilizes the account assignment information entered in transaction OBYC to automatically determine the appropriate G/L accounts based on the details provided in MM transactions.

What is the connection between SAP MM and SAP FI?

To achieve this integration, there is a specific configuration setting called OBYC. By accessing this setting, you can see all the G/L (General Ledger) account uses with their respective transaction event keys and account modifiers for a particular movement type. This means that you can view which G/L accounts are affected when a certain movement type is posted.

Invoice Verification

In the integration of SAP MM and FI, an essential aspect to consider is the invoice verification process. When verifying invoices, the SAP system automatically records transactions in one or multiple accounts.

– Account for suppliers

– Inventory account (transaction code BSX)

– Accounts for goods receipt/invoice receipt clearing (transaction code WRX)

– Accounts for taxes

– Accounts for price differences (transaction code PRD)

– Account for cash discount clearing (transaction code SKV)

– Account for freight clearing (transaction code FR1)

The concept of automatic account determination remains consistent, as explained earlier. The only variation lies in the transaction keys employed by SAP during invoice verification. Nevertheless, there are additional distinctions pertaining to vendor account determination and tax account determination. These variations will be discussed in subsequent sections.

SAP Integration Points for Vendor Accounts

The vendor account is obtained from the vendor master record and is indicated in the Reconciliation Account field on the Accounting Information screen. SAP utilizes MM FI integration to perform a financial posting to the reconciliation account.

Tax Account Integration Points in SAP

In SAP FI, tax account determination is carried out by considering the tax code provided during the verification of invoices. For India, specific tax codes are established and managed within the system.

In India, the tax calculation procedure varies from country to country. In order to determine the input tax condition type in the calculation process, we can assign an account key. This account key is equivalent to the transaction/event key that was previously mentioned.

SAP utilizes the account key and customizations made in transaction OB40 to automatically identify the accounts where tax postings should be made.

Tax account determination in SAP is a process that can be automated using the transaction code OB40. This functionality helps businesses determine the appropriate tax accounts to use for different transactions. By automating this process, companies can ensure accurate and efficient tax accounting in their financial systems.

The screenshot provided above illustrates the resemblance between OB40 and OBYC, which was previously discussed. By double-clicking on a line in the table, SAP will display a subsequent screen where you can specify account numbers for automatic postings.

Automatic Tax Account Determination in SAP is facilitated through the use of VST Transaction Key.

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Understanding Mmfi integration in SAP

FI MM integration in SAP is an example of how different modules of SAP ERP systems are integrated. With the integration, SAP ensures that data from one module flows to another module automatically.

SAP MM FI Integration –

SAP MM FI integration is one of the advanced topics in SAP configuration. It is important to configure automatic postings in Financial Accounting and even more important to thoroughly test this configuration to make sure that postings are made to the correct G/L accounts. We hope that our explanation of SAP MM FI integration is easy and understandable. If you have any question or found a mistake, please let us know in the comments.

The Tcode for integrating FI and MM in SAP

1. Valuation Class: The valuation class in MM determines how the material will be valued in FI.

2. Account Determination: In MM, different accounts are assigned to various transactions such as goods receipt, invoice receipt, and goods issue. These accounts are determined based on the account determination settings configured in FI.

3. Automatic Posting: When goods receipts or invoices are posted in MM, corresponding accounting entries are automatically generated and posted to the relevant G/L accounts in FI.

4. Inventory Management: The inventory values maintained in MM for materials impact the balance sheet and profit/loss statements generated by FI.

5. Material Price Changes: Any changes made to material prices within MM will have an impact on cost of sales and inventory valuation within FI.

6. Goods Issue: When goods are issued from stock (e.g., for consumption or transfer), corresponding accounting entries need to be created and updated accordingly between FI-MM.

7. Invoice Verification: Invoices received from vendors need to be verified against purchase orders or goods receipts recorded in MM before posting them into financial accounting (FI).

8. Payment Processing: Payments made through automatic payment programs within FI should consider open items related to procurement activities recorded in MM.

Integration points between SAP MM and other SAP modules

Material Requirement Planning plays a crucial role in ensuring that the right amount of materials are available at the right time for production purposes. In this process, stocks, expected receipts, and expected issues are taken into consideration to determine the material requirements. By integrating MM with PP, organizations can streamline their procurement processes by aligning them with their production plans.

The integration points between MM and PP include:

1. MRP: The MRP functionality within SAP helps organizations plan their material requirements based on factors like sales orders, forecasts, stock levels, and lead times. By integrating MM with PP through MRP run settings and parameters configuration, organizations can ensure that they have sufficient materials available to meet their production demands.

2. Receipt against Production Order: When a production order is created in SAP PP to manufacture a product or assembly, it requires specific raw materials or components to be consumed during the manufacturing process. These required materials are procured using SAP MM functionalities such as purchase requisitions or purchase orders. The integration ensures seamless transfer of information from PP to MM modules regarding the required quantities and timings for material procurement.

Understanding the integration of mm fi

Movement of material leads to automatic generation of accounting document and this is referred as MM FI integration. Question is how system determines which accounts to debit and which accounts to credit?