Understanding Split Valuation in SAP MM

What Is Split Valuation In Sap Mm

Split valuation is a concept in SAP MM that allows for the classification and tracking of different types of materials within an organization. It involves assigning multiple valuation categories to a single material, which enables companies to manage and monitor various aspects such as quality, location, or batch-specific information. This article will provide an overview of split valuation in SAP MM and explore its benefits and implementation process.

Split Valuation in SAP MM

Split valuation in SAP MM is a useful feature that allows for the separate valuation of stocks within the same company or plant. This means that different values can be assigned to materials based on specific criteria. There are various scenarios where split valuation becomes necessary, such as when dealing with items that have varying qualities or conditions. By implementing split valuation, businesses can effectively manage and track their inventory by assigning distinct values to different batches or characteristics of a material.

In SAP MM, split valuation refers to the practice of assigning different values to stocks based on various factors. For instance, when stock is purchased externally from a vendor or produced in-house, it may have a different valuation price. Additionally, stock obtained from one vendor can be valued differently than stock obtained from another vendor. Furthermore, even if two batches of the same material are being considered, they may have different valuation prices.

Before proceeding with any other configuration, it is necessary to enable Split Valuation. To activate split valuation, please refer to the following steps.

Activating Split Valuation in SAP MM

To enable split valuation in SAP MM, go to IMG and navigate to Materials Management. From there, access the Valuation and Account Assignment section and select Split Valuation. Activate the split valuation option to proceed.

To enable split valuation, go to the Display IMG screen and choose the option to activate it as per the instructions mentioned above.

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Proceed to Step 2 by selecting the Split Material Valuation Active option and then save it. This will activate split valuation in SAP MM.

Below are a few significant terms related to split valuation in SAP MM.

Valuation Area refers to the level at which materials are valued, either at the plant or company code level. Valuation Category is the criteria used for split valuation of materials. Valuation Type determines the characteristics of a valuation category.

What is the T code for split valuation in SAP?

By default, split valuation is active in SAP MM. This means that different materials can have different values based on certain criteria. In order to activate split valuation, you need to use the transaction code OMW0 in SAP.

To differentiate between material stocks and assign different values to them, you must define a valuation category and a valuation type. A valuation category is used to group materials with similar characteristics together. For example, all raw materials could be assigned to one valuation category while finished goods could be assigned to another.

A valuation type is then used within each valuation category to further classify the materials based on specific criteria such as size, color or quality. This allows for more precise differentiation of material stocks within each category.

Split Valuation Configuration in SAP MM

To configure split valuation in SAP MM, you can follow the steps outlined below. These steps involve defining the valuation category and valuation type.

Configuring Split Valuation in SAP MM: A Guide

To set up split valuation in SAP MM, navigate to IMG and go to Materials Management. From there, access the Valuation and Account Assignment section and proceed to Configure Split Valuation.

First, go to the Display IMG screen and choose the option to Configure Split Valuation. This can be done by following the path mentioned above.

Proceed to the next step by selecting Global Types in order to generate a valuation type.

Step 4 – Enter the valuation type name and save it. This will create a new Valuation Type.

Step 5 – Next, navigate to the same page and select Global Categories in order to generate a valuation category.

Step 7 involves entering the name of the valuation category and saving it, resulting in the creation of a new Valuation Category.

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Proceed to the identical screen and select Local Definitions in order to establish a connection between valuation type and valuation category.

Step 10 – Enter the required details for valuation type and valuation category, set their status as active, and then click on the Activate button. This will successfully map and activate both the valuation category and valuation type.

Once you have entered the necessary details for valuation type and valuation category, you can specify them in the material master as demonstrated below.

To access the material master change screen, navigate to mm02. Within this screen, you have the ability to update the valuation category and valuation class in the accounting view. These settings will determine how the material is valued when creating a purchase order.

Understanding split valuation in inventory management

In split valuation scenarios, the pricing for materials can vary depending on their origin or characteristics. For example, if a company purchases raw materials externally from one vendor and produces some internally through their own manufacturing process, these two types of stock will be assigned separate valuation prices. This differentiation allows businesses to accurately track costs associated with each type of inventory.

How to implement split valuation

To implement split valuation in SAP MM, it is necessary to activate this feature for your plants. This can be done by accessing the Customizing settings and configuring split valuation under the Materials Management Valuation and Account Assignment section of the SAP Customizing Implementation Guide. Within the Material or Article Master data, you need to specify “X” as the Valuation Category in the Accounting tab.

Once split valuation is activated, it allows for better control over inventory management and financial reporting. It enables businesses to differentiate between materials with varying characteristics and assign them separate valuations accordingly.

By implementing split valuation in SAP MM, organizations gain greater flexibility in managing their inventory and accounting processes. This functionality helps streamline operations by providing a more accurate representation of material values based on specific attributes or conditions set within the system configuration.

The functioning of split valuation in SAP

Split valuation in SAP MM refers to the practice of assigning different prices or values to a material based on certain criteria. This allows for better control and management of inventory, especially when dealing with materials that have varying characteristics or are used in different ways.

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There are three main categories involved in split valuation: Global category, Global type, and Local definition. The Global category is also known as Valuation category and represents the broad classification of materials based on their characteristics or usage. For example, materials can be categorized as raw materials, finished goods, spare parts, etc.

The Global type is also referred to as Valuation type and further refines the categorization by considering additional factors such as quality level or special properties of the material. This helps in determining more specific pricing strategies for each type within a given category.

Creating a material with split valuation in SAP MM

To enable Split Valuation in SAP MM, follow these steps:

2. Configure Split Valuation:

2.1 Global Types: Click on Create to define different types of split valuations based on specific characteristics like size, color, or location.

2.2 Global Categories: Click on Create to assign values to each type defined in the previous step.

3. Create Material Master:

– Extend the same material via MM01 transaction code by providing all relevant information such as description, unit of measure, etc.

4. Create Purchase Order (PO): Use ME21N transaction code and enter details like vendor, quantity required, delivery date, etc., for each split valuation category if necessary.

5. Post Goods Receipt (GR) for both POs: Once the goods are received from vendors against each PO created in step 4, post GR using MIGO transaction code.

In simple terms, Split Valuation is a feature in SAP MM that allows you to differentiate and track inventory items with similar attributes but different values within a single material master record. It helps manage materials that have multiple valuations due to variations such as size or color.

By activating Split Valuation and configuring global types and categories based on specific characteristics of your materials (e.g., different sizes), you can create separate purchase orders for each variant if needed. This enables better control over inventory management by tracking costs associated with individual variants separately during procurement processes like goods receipt posting.