• Programming
  • Admin & EIM
  • BI & BW
  • FICO & BPC
  • CRM & Sales
  • Introductions
  • SAP PRESS Subscription

Account Determination in SAP S/4HANA Materials Management

SAP PRESS

Various transactions in materials management (MM) are relevant for accounting, such as goods receipts, goods issues, and invoice receipts.

In such cases, the system always creates an accounting document and posts the amount in the appropriate general ledger accounts.

General ledger accounts are automatically determined with the help of automatic account determination settings. Consider, for example, a manufacturing enterprise that stores stock materials purchased from vendors. Whenever a material is received in a storage location with reference to a PO, the company wants its system to automatically determine and update the stock general ledger account. Similarly, whenever an invoice is posted, the system should automatically determine the vendor general ledger account and post the liability.

The SAP S/4HANA system provides automatic general ledger account posting via the automatic account determination process. When posting a goods receipt against a PO, the system creates an accounting document (along with the material document), and general ledger account postings are made. The system determines which general ledger accounts should be debited and credited based on configuration settings you’ve maintained for automatic account determination.

Essential Terms

Before discussing these configuration settings, let’s define a few essential terms:

Chart of Accounts

A chart of accounts provides a framework for recording values to ensure an orderly rendering of accounting data. The general ledger accounts it contains are used by one or more company codes. For each general ledger account, the chart of accounts contains the account number, the account name, and technical information.

Valuation Class

A valuation class is used to determine the general ledger account for the materials stock account. In automatic account determination, valuation classes must be created and then assigned to material types. While creating material master records, selecting the appropriate valuation class under the Accounting 1 tab is required. The valuation class list in the material master record will depend on the material type. For example, in a standard SAP system, material type ROH (raw material) has three valuation classes: 3000, 3001, and 3002.

Transaction Key

Transaction keys are used to determine accounts or posting keys for line items that are automatically created by the system. They’re defined in the system and can’t be changed.

Now that you have an understanding of the key terms in automatic account determination and understand how it can work in your business, we’ll move on to describe the configuration steps and business processes involved.

Configuration with the Automatic Account Determination Wizard

Automatic account determination can be configured either with or without the automatic account determination wizard, a tool provided by SAP to help you manage the automatic account determination functionality. To configure automatic account determination using the wizard, follow the configuration menu path SAP IMG > Materials Management > Valuation and Account Assignment > Account Determination > Account Determination Wizard .

The wizard will ask you a number of questions and, based on your answers, finds the correct settings and saves them in the corresponding SAP tables. Except for a few restrictions (as documented in the wizard), the wizard will perform the following steps:

  • Defines valuation control
  • Groups valuation areas
  • Defines valuation classes
  • Defines account grouping for movement types
  • Manages purchase accounts
  • Configures automatic postings

We’ll explain how to set up automatic account determination without the wizard because this manual and step-by-step approach to account determination will help you understand how to work with the wizard. Further, using account determination without the wizard enables the creation of more complex configurations. Once you’ve gained the concepts and the fundamentals behind account determination, you can use the automatic account determination’s wizard tool to quickly setup account determination processes in SAP systems.

Configuration without the Automatic Account Determination Wizard

We’ll now follow a step-by-step approach to setting up account determination in an SAP system. We’ll cover the necessary configuration steps involved, followed by steps for assigning the configured objects in the master data. Business processes involving account determination and that use the master data are covered next. We’ll also cover the accounting entries that occur as the result of a stock posting.

Let’s walk through the required steps next:

Define a Valuation Control

In account determination, you can group together valuation areas by activating the valuation grouping code (also known as the valuation modifier ), which makes configuring automatic postings much easier. A valuation grouping code can be made active or inactive by choosing the respective radio button.

To define a valuation control, follow the configuration menu path SAP IMG > Materials Management > Valuation and Account Assignment > Account Determination > Account Determination without Wizard > Define Valuation Control .

By default, the valuation grouping code is active in the standard SAP system.

Assign Valuation Grouping Codes to Valuation Areas

The valuation grouping code makes setting up automatic account determination easier. Within the chart of accounts, assign the same valuation grouping codes to the valuation areas you want assigned to that account. As shown in the figure below, valuation grouping code 0001 has been assigned to valuation area 1100 and company code 1100. If another valuation area also uses the same set of general ledger accounts as valuation area 0001, then assign valuation grouping code 0001 to that valuation area.

To assign valuation grouping codes to valuation areas, follow the configuration menu path SAP IMG > Materials Management > Valuation and Account Assignment > Account Determination > Account Determination without Wizard > Group Together Valuation Areas .

Valuation Grouping

Define Valuation Classes

In this step, you’ll define the valuation classes allowed for each material type. Then, you’ll assign the account category reference to the material type. As shown in the second figure below, account category references 0001 and 0002 have been defined, and for each account category reference, one or more valuation classes can be assigned. Account category reference 0001 has been assigned to material type ROH, and valuation classes 3000, 3001, and 3002 have been assigned to account category reference 0001. Consequently, valuation classes 3000, 3001, and 3002 have been assigned to material type ROH. While creating the material master record for material type ROH, select any of these valuation classes. Similarly, for material type HALB, select valuation classes 7900 or 7901.

In this section, through an example, we’ll create the new valuation class 3004 and cover all the associated configuration settings required to ensure a working end-to-end business process.

To define which valuation classes are allowed for a material type, use Transaction OMSK or follow the configuration menu path SAP IMG > Materials Management > Valuation and Account Assignment > Account Determination > Account Determination without Wizard > Define Valuation Classes . On the screen that appears, you’ll see three options: Account Category Reference , Valuation Class , and Material Type/Account Category Reference . Follow these steps:

  • Click on Account Category Reference and, if needed, create an account category reference, as shown here:

Account Category Reference

  • Click on Valuation Class , shown below, and then click on the New Entries Create a new valuation class ( ValCl ) 3004 (with Description Raw Materials- Steel ) and assign the valuation class to account category reference ( ARef ) 0001 . 2

Valuation Classes

  • Click on Account Category Reference and maintain a mapping between the material types and account references. For material type ( MType ) ROH , assign the account reference ( ARef ) 0001 , as shown here:

Account Category Reference with Material Type

Define an Account Grouping for Movement Types

Now, assign an account grouping to movement types. The account grouping is a finer subdivision of the transaction/event keys for account determination. For example, during a goods movement, the offsetting entry for the inventory posting (Transaction GBB) can be made to different accounts, depending on the movement type. The account grouping is provided for the following transactions:

  • Transaction GBB (Offsetting Entry for Inventory Posting)
  • Transaction PRD (Price Differences)
  • Transaction KON (Consignment Liabilities)

The account grouping in the standard system is only active for Transaction GBB. To define account groupings for movement types, follow the configuration menu path SAP IMG > Materials Management > Valuation and Account Assignment > Account Determination > Account Determination without Wizard > Define Account Grouping for Movement Types . Define the account grouping code, the movement type, and the transaction/event key combination, as shown in the next figure.

Movement Types and Account Modifiers Combinations

Note: Value strings group together the various transactions used in account determination. For example, the value string WE01 can be seen by following the configuration menu path SAP IMG > Materials Management > Valuation and Account Assignment > Account Determination > Account Determination Without Wizard > Define Account Grouping for Movement Types . On this screen, if you double-click on any entries that contain WE01, a list of transactions along with their descriptions will appear. The transactions that appear in the value string are hard coded in the system, so you should never try to change them.

Configure Automatic Postings

In this step, enter the system settings for inventory management and invoice verification transactions that result in automatic posting to general ledger accounts. A transaction/event key is a key to differentiate account determination by business transaction. For example, we must differentiate general ledger account posted by goods receipt transaction and posted by invoice receipt transaction.

You don’t need to define these transaction keys; they are determined automatically from the transaction of the movement type (inventory management) or from the transaction of invoice verification. All you need to do is assign the relevant general ledger account to each posting transaction.

To assign general ledger accounts to transaction/event keys, use Transaction OMWB or follow the menu path SAP IMG > Materials Management > Valuation and Account Assignment > Account Determination > Account Determination without Wizard > Configure Automatic Posting . Click on Cancel , as shown below.

Configuring Automatic Postings

To assign a general ledger account, on the screen shown above, click on Account Assignment (not shown). A list of transaction keys will appear; double click on the key for which setting the general ledger accounts is required. Next, define the valuation grouping code (also known as the valuation modifier ), valuation class, and general ledger account, as shown below. Then, check the settings function by using the simulation function.

Automatic Account Posting Transactions

Use Transaction BSX for inventory posting and for assigning general ledgers. In the popup window that appears, enter the Chart of Accounts 1100 , and the screen shown below will appear.

Transaction BSX with Valuation Class 3004 and General Ledger Account

This figure shows the Transaction BSX screen for posting inventory. Click New Entries and enter the newly created Valuation Class 3004 and assign the Account 11020101 .

Go back to the screen shown when utilizing Transaction OMWB, and this time, use Transaction WRX (for the goods receipt/invoice receipt [GR/IR] clearing account) and maintain the general ledger account of the newly created Valuation class 3004 . Similarly, repeat the same steps for Transaction PRD (for price difference account).

Let’s now look at the business processes and the associated master data setup and transactions, not only to check that the newly created valuation class 3004 works correctly, but also that the associated general ledger accounts are correct.

Master Data Setup

Access the screen shown below via Transaction MM01. Under the Accounting 1 tab of the material master 157 , assign the newly created Valuation Class 3004 .

Assigning the Newly Created Valuation Class to a Material

Now, let’s discuss the account determination for the general ledger as it relates to goods receipt and goods issue postings. Post a good receipt of the material 157 with reference to a PO via Transaction MIGO. Then, display the goods receipt document and go to the Doc. info tab. Click on the FI Documents button, which will display a list of financial documents created for the goods receipt document. Select Accounting document to see the details of that accounting document.

As shown below, you’ll see the general ledger account postings, which are determined based on the automatic account determination configuration. General ledger account 11020201 (inventory raw material stock account) is debited, and GR/IR account 22010202 is credited.

Accounting Entries of Goods Receipt

In this blog post, we covered the account determination process that is useful to those running materials management with SAP .

Editor’s note : This post has been adapted from a section of the book Materials Management with SAP S/4HANA: Business Processes and Configuration by Jawad Akhtar and Martin Murray.

Recommendation

Materials Management with SAP S/4HANA

Manage your materials with SAP S/4HANA! Whether your focus is on materials planning, procurement, or inventory, this guide will teach you to configure and manage MM in SAP S/4HANA. Start by creating your organizational structure and defining business partners and material master data. Then follow step-by-step instructions for your essential processes, from purchasing and MRP runs to goods issue and receipt. Discover how to get more out of SAP S/4HANA by using batch management, demand-driven MRP, SAP Fiori reports, and other built-in tools.

SAP PRESS is the world's leading SAP publisher, with books on ABAP, SAP S/4HANA, SAP CX, intelligent technologies, SAP Business Technology Platform, and more!

Share on facebook

Latest Blog Posts

A Look at Materials Management and Logistics in SAP S/4HANA

A Look at Materials Management and Logistics in SAP S/4HANA

Sales Contract Management with SAP S/4HANA Logistics

Sales Contract Management with SAP S/4HANA Logistics

The official sap press blog.

As the world’s leading SAP publisher, SAP PRESS’ goal is to create resources that will help you accelerate your SAP journey. The SAP PRESS Blog is designed to provide helpful, actionable information on a variety of SAP topics, from SAP ERP to SAP S/4HANA. Explore ABAP, FICO, SAP HANA, and more!

SAP Blog Topics

  • Administration
  • Business Intelligence

Blog curated by

  • Legal Notes
  • Privacy Policy
  • Terms of Use
  • Guest Posting
  • ABAP Snippets
  • Top SAP Courses
  • Top SAP Books

SAP and ABAP Free Tutorials

Account assignment in SAP Purchasing (MM) – FAQ

SAP Purchase Order ME21N Exit e1472546229483

This note provides answers to frequently asked questions regarding account assignment in purchasing documents. This post is based on Snote 496082.

Table of Contents

FAQ: Account Assignement in SAP Purchasing

Account assignement : g/l account for a sales order.

Question: Why is the G/L account for a sales order with nonvaluated individual sales order stock different from the account with valuated indivi dual sales order stock?

Answer: See Note 458270.

Multiple Account Assignment in Purchasing

Question: Can you create several assets at the same time in the new purchasing transactions?

Answer: You can create several assets at the same time. However, you must first ensure that at least as many account assignment lines have bee n created as the number of assets that you want to create. You can do this very easily using the copy function.

G/L Account is not saved if switch to a material group

Question: You create a purchase order with account assignment using transaction ME22. You enter a material group, from which a G/L account is de termined using the valuation class. If you then switch to a material group that does not determine a G/L account via the valuation class, the system deletes the previous G/L account and prompts you to enter a G/L account. If you cancel the account assignment screen and change the material group back on the item detail screen, the previously determined G/L account is not determined again. Why is this ?

Answer: Unfortunately, this system behavior cannot be changed. First, enter any G/L account, so that the item is valid. If you then switch to the old material group again, the system also determines the correct G/L account again.

Entering the same account assignments for different items

Question: Is there an easy way of entering the same account assignments for different items in the new EnjoySAP transactions?

Answer: Ensure that Note 315676 has been implemented in your system and follow the procedure described there

Repeat account assignment function not work in the new EnjoySAP

Question: Why does the repeat acc. assignment function not work in the new EnjoySAP transactions when you create new account assignments in multiple acc. assign. ?

Solution: Use the copy function in multiple acc. assignment to create identical account assignment lines. You can use the repeat account assi gnment function to create similar account assignments for different items with the same account assignment category. To do this, proce ed as described in the answer to question 4.

Issue message KI 161 “Cost center &/& does n ot exist on &

Question: When you change the account assignment of an existing purchase order, why does the system issue message KI 161 “Cost center &/& does n ot exist on &” ? The same phenomenon occurs for other account assignment objects (for example, profit center).

Solution: Refer to Note 193371.

Can you create assets from the single account assignment screen?

Solution: Assets can only be created from the multiple account assignment screen (“Account assignment” tab). You can switch between single account assignment and multiple account assignment on the “Account assignment” tab page by clicking the icon above on the left.

Why does the system not display an account assignment tab page even though you have entered an account assignment category?

Solution: After you have implemented Note 520149, the account assignment tab is not displayed until all the required information is available, for example, the company code.

Why are account assignment objects derived in some situations, even though the relevant field on the account assignment tab page is hidden?

Solution: Refer to Note 619203.

ME 453 “Changing consump. or spec. stock indicator not allowed

You create a purchase order with reference to a subcontracting purchase requisition. This purchase requisition was created with an unknown account assignment, that is, account assignment category “U”. When you change the account assignment category in the purchase order, the system issues error message ME 453 “Changing consump. or spec. stock indicator not allowed (subcontracting)”.

Solution: See Note 205597

Select a valuated goods receipt together with multiple account assignment

Why can you not select a valuated goods receipt together with multiple account assignment in a purchase order or purchase requisition?

Solution: See Note 204252.

EBAN-FISTL, -GEBER, -KBLNR, -GRANT and -FKBER (as in table EKPO) empty

Funds Management is active. Why are the fields EBAN-FISTL, -GEBER, -KBLNR, -GRANT and -FKBER (as in table EKPO) empty? Solution: These fields are only filled if the account assignment category is set to “blank”. If you maintain an account assignment category in t he purchasing document, the system adds the information from these fields to the EBKN table (as in EKKN).

AA 334 “You cannot post to this asset (Asset & & blocked for acquisitions)

You try to change a purchase order item with acc. assignment category “A”, which contains a locked asset. The system issues error message AA 334 “You cannot post to this asset (Asset & & blocked for acquisitions)”. Solution: This is the standard system design. To make changes to this purchase order item, you have the following two options:

a) If you no longer require the purchase order item with the blocked asset, delete the purchase order item. b) Otherwise, you must activate the asset, make the required changes to the purchase order item, and then block the asset again.

The indicator for the account assignment screen

Question: What is the meaning of the indicator for the account assign. screen that you can set in Customizing for single account assignment/m ultiple account assignment? Solution: The indicator determines which account assignment screen is used by default for maintaining the account assign. for a purchase orde r item. For the EnjoySAP transactions, this value is simply a proposal that you can change in the purchasing document. For the old transactions, this value is the only one that you can use.

Question: Is there an unknown account assign. for standard purchase orders?

Solution: This is generally not allowed, and the system issues message ME 069 “Unknown account assignment not defined for use here”. There is an exception in the case of service items that are created with item category D (service) or B (limit).

Acc. Assignment check is not performed when Purchase Order is updated

Question: You change data in a purchase order item (for example, purchase order value, delivery date, and so on). Why does the system not perform another acc. assignment check?

Solution: This is the standard system design. When you created the purchase order item, if the system already checked the acc. assignment and there were no errors, another acc.?assignment check only takes place if you change a field that is relevant to account assign.?(for example, quantity, material number, and so on). If this system response does not meet your requirements, implement the account assignment check in the BAdI ME_PROCESS_PO_CUST. The BA dI is called each time the purchase order is changed.

“In case of account assignment, please enter acc. assignment data for item”

Question: If you delete all the account assign?lines that were entered in the account assignment screen, the system exits the account assign. tab page and goes to the material data. In addition, the system issues the error message “In case of account assignment, please enter acc. assignment data for item”.

Answer: In the current system design, if you delete all the account assignment lines, the system assumes that you do not want to maintain any account assignment data. This conflicts with the account assignment category and the system issues error message 06 436. You can then remove the account assignment indicator. Procedure: If you want to delete all the account assignment data that was entered, see the answer to question 24.

Third-party order processing (CS) and individual purchase order processing (CB)

Question: Which account assignment categories should you enter in schedule line categories for third-party order processing (CS) and individual purchase order processing (CB)? Solution: See Note 210997.

G/L Account is not transfered from Valuation class

Question: In a blanket purchase order or blanket purchase requisition with account assignment, you subsequently change the material group. Even though the new material group is assigned to another G/L account via the valuation class, the system does not redetermine the account assignment for the relevant item. The old G/L account remains.

Solution: See Note 449216.

Customizing Account assignment fields as required entry, optional entry, or display fields

Question: In Customizing, you can set the, or as completely hidden fields, depending on the account assignment category. These settings also determine whether the system deletes or retains the values for the account assignment fields when you change the account assignment category in a purchase order item.

Answer: In Customizing for materials management (MM), when you maintain account assignment categories (IMG: Materials Management-> Purchasing -> Account Assignment-> Maintain Account Assignment Categories), you can control the different account assignment fields as follows: Required entry: You must make an entry in the field, otherwise the system issues error message ME 083.

  • Optional entry: Entry in this field is optional.
  • Display: The field is displayed, but it is not ready for input.
  • Hidden: The field is hidden. Example:

The acc. assignment category is K, the cost center is an optional entry field and it is filled with the value 1000. You change the acc. assignment category to P. Subject to the field settings for the cost center for the acc. assignment category P, the system response is as follows: The cost center is a required entry or an optional entry field: The system transfers the value 1000 for the cos t center.The cost center is a display field: First, the value 1000 for the cost center is deleted. If the system can determine a value again after you enter the changed acc. assignment category, this value is transferred. The cost center is a hidden field: The system deletes the value 1000 for the cost center.

System ignores the acc. assignment data of the purchase requisition for the second schedule line.

Question: You create a purchase order item assigned to an account with reference to a purchase requisition. For this purchase order item, you create a second schedule line with reference to another purchase requisition. The system ignores the acc. assignment data of the purchase requisition for the second schedule line. Solution: This is the standard system design. The system does not generate multiple acc. assignment in the purchase order item, even if the t wo referenced purchase requisitions are assigned to different CO objects. Refer to Note 47150 for the old transactions and to Notes 422609 and 771045 for the EnjoySAP transactions.

Undelete an item in a purchase requisition if assignment data is no longer valid

Question: Why can you undelete an item in a purchase requisition if the corresponding acc. assignment data is no longer valid? Solution: When you undelete an item in a purchase requisition, the system does not perform a new acc. assignment check. Therefore, the accoun t assignment data is not checked again. Nevertheless, errors occur if you try to create a purchase order with reference to this purchase requisition. When you undelete an item in a purchase order, however, the system does perform another acc. assignment check.

Transfer of Acc. Assign. with Reference Document

Question: You create a purchasing document with reference to a reference document. What account assig. data is transferred? Solution: The acc. assignment data is derived from the reference document. If you delete the acc.?assignment category and enter it again, a new automatic general ledger account determination takes place.

Question What is the correct procedure for changing acc. assignment data?

– If, for example, you want to change the acc. assignment category: Note that you MUST first delete all existing acc. assignment data for the relevant item. You can do this by initializing (deleting) the acc. assignment category and confirming by choosing ENTER. Following this, you can enter the new acc. assignment category and the relevant acc. assignment data.

– If you want to change acc. assignment data for the relevant item: For example, you want to change the main acc. assignment objects such as cost center, G/L account, sales order, network, or WBS ele ment, and so on. Here also, we recommend deleting all existing acc. assignment data by initializing (deleting) the account assignme nt category and confirming by choosing ENTER.If you are working with contracts, you must delete the acc. assignment line on the acc. assignment screen and enter a new line t o ensure that the data is derived correctly again. You MUST NOT change the current settings. For example, in some circumstances, the requirements type (OVZH) or the valuation of the requirements class (OVZG) is changed after th e purchasing document is created. This can cause errors in a valuation of goods movements (goods receipt, for example) and MUST BE AVOIDED.

Read more on? Account Assignment

Related Posts

SAP Payment Terms Table

The Most Important SAP Payment Terms Tables (ZTERM, Text…)

October 21, 2018 March 24, 2021

SAP Batch Management 1

SAP Batch Management: User-exits and BAdIs

June 17, 2017 January 21, 2022

SAP Batch Management Tcodes, Tables and Customizing (SAP Batch Management)

June 16, 2017 January 21, 2022

SAP Material Management Tutorial

  • SAP MM Tutorial
  • SAP MM- Home
  • SAP MM - Overview
  • SAP MM - Screen Navigation
  • SAP MM - Procurement Process
  • SAP MM - Organization Structure
  • SAP MM - Enterprise Structure
  • SAP MM - Defining Structure
  • SAP MM - Organizational Units
  • SAP MM - Master Data
  • SAP MM - Purchase Info Record
  • SAP MM - Source Determination/List
  • SAP MM - Procurement Cycle
  • SAP MM - Purchase Requisition
  • SAP MM - Request for Quotation
  • SAP MM - Outline Agreement
  • SAP MM - Quota Arrangement
  • SAP MM - Posting Period
  • SAP MM - Purchase Order Types
  • SAP MM - Inventory Management
  • SAP MM - Invoice Verification
  • SAP MM - Service Management
  • SAP MM - Valuation

SAP MM - Account Determination

  • SAP MM - Configuration
  • SAP MM - Transaction codes
  • SAP MM Useful Resources
  • SAP MM - Questions & Answers
  • SAP MM - Quick Guide
  • SAP MM - Useful Resources
  • SAP MM - Discussion
  • Selected Reading
  • UPSC IAS Exams Notes
  • Developer's Best Practices
  • Questions and Answers
  • Effective Resume Writing
  • HR Interview Questions
  • Computer Glossary

In SAP MM, procurement process involves the cost of goods and services that needs to be paid to the vendor by an organization. The cost being paid must be posted in an organization necessarily in a correct general ledger (G/L) account. It is quite impossible to recollect and feed the correct G/L account every time during procurement. To avoid this inconvenience, the SAP system can be configured so that the system will automatically determine the correct G/L account that needs to be posted. G/L account is posted when goods receipt is done as well as during clearing the invoice verification. Account determination deals with the following terms−

Define Valuation Control

  • Group together Valuation Areas

Define Valuation Classes

Configure automatic posting.

Valuation areas can be grouped together and can be assigned to one grouping code, if they belong to the same G/L account. For example, different plants under one company code can be assigned the same valuation grouping code and vice versa. Before this, valuation grouping code must be activated and this can be done by following the steps given below.

Path to Activate Valuation Grouping Code

IMG ⇒ Materials Management ⇒ Valuation and Account Assignment ⇒ Account Determination ⇒ Account Determination without Wizard ⇒ Define Valuation Control

TCode: OMWM

Step 1 − On the Display IMG screen, select Define Valuation Control by following the above path.

SAP Activate Grouping code

Step 2 − Select Valuation grouping code. Click on Save. Valuation grouping code is now activated.

SAP Activate Grouping code

Group Together Valuation Areas

In valuation grouping, valuation area and valuation grouping code are assigned to the company code. This can be done by following the below steps.

Path to Define Valuation Area and Valuation Grouping Code

IMG ⇒ Materials Management ⇒ Valuation and Account Assignment ⇒ Account Determination ⇒ Account Determination without Wizard ⇒ Group Together Valuation Areas

TCode: OMWD

Step 1 − On the Display IMG screen, select Group Together Valuation Areas by following the above path.

SAP valuation area path

Step 2 − Here you can define a valuation area with grouping code, and assign them to a company code. Click on Save. Valuation area and valuation grouping code are now defined for a company code.

SAP valuation area

Valuation class categorizes the G/L account on the basis of material type. For example, raw material will have different G/L account than the finished material, as the costs will be different in both the cases. Account reference is also maintained along with the valuation class. Account reference and valuation class can be defined by following the steps given below.

Path to Define Account Reference and Valuation Class

IMG ⇒ Materials Management ⇒ Valuation and Account Assignment ⇒ Account Determination ⇒ Account Determination without Wizard ⇒ Define Valuation Classes

TCode: OMSK

Step 1 − On the Display IMG screen, select Define Valuation Classes by following the above path.

SAP valuation class

Step 2 − Click the Account Category Reference button.

SAP valuation ARef

Step 3 − Click New Entries.

SAP valuation ARef entry

Step 4 − Provide the name of ARef (Account reference) along with its description.

SAP valuation aref detail

Step 5 − Now go to same screen and click Valuation Class.

SAP valuation class path

Step 6 − Click New Entries.

SAP valuation class entry

Step 7 − Provide the name of valuation class, ARef (Account reference), and description of valuation class.

SAP valuation class entry

Step 8 − Now go to the same screen and click Material Type/Account Category Reference.

SAP valuation class map

Step 9 − Here you can map material type with ARef (Account reference). Click on Save. G/L account can now be posted for different material types.

SAP valuation map

G/L account is automatically determined for each of the transactions. It happens so because automatic postings are configured in the SAP system. Automatic posting can be configured by following the steps given below.

Path to Configure Automatic Posting

IMG ⇒ Materials Management ⇒ Valuation and Account Assignment ⇒ Account Determination ⇒ Account Determination without Wizard ⇒ Configure Automatic Postings

TCode: OMWB

Step 1 − On the Display IMG screen, select Configure Automatic Postings by following the above path.

SAP automatic posting

Step 2 − Click Account Assignment.

SAP automatic posting entry

Step 3 − Here you can maintain the transaction for which automatic account determination is there. Click on Save. Automatic posting for transactions is now configured.

SAP automatic posting

To Continue Learning Please Login

Setting Up Account Determination

After completing this lesson, you will be able to:

  • Use the control options for account determination

Account Determination Influencing Factors

The system automatically determines the financial accounts that are automatically posted with the goods movement.

When a goods movement is recorded, the system posts to the stock account of the material and to one or more offsetting accounts depending on the goods movement. This automatic account determination depends on various factors, such as the chart of accounts, the plant (or valuation area), but also on the material.

The following table roughly represents the account determination logic for goods movements with the determining factors.

It shows an example for a simple goods issue to a cost center.

Let's look at the influencing factors one by one.

The type of goods movement

Depending on whether you are posting a goods issue to a cost center or a goods receipt with reference to a purchase order, for example, different posting schemas result:

  • A goods receipt with reference to a purchase order results in at least a debit posting to an inventory account, possibly another debit posting to a price difference account if the material is valuated at standard price, and a credit posting to a GR/IR clearing account that is cleared when the invoice is posted.
  • A goods issue to a cost center results in at least one credit posting to an inventory account and one debit posting to a cost account.

The posting schema, that is the possible posting line types to be generated, is assigned to the movement type. You can view it in the movement type configuration.

Start the following interactive demo to learn more about the posting schema depending on the type of goods movement.

In the previous demo, we learned that when a goods issue is posted to a cost center, in addition to the stock account (transaction key BSX), an offsetting account is also updated, which is further specified by transaction key GBB plus account modification VBR. This explains columns 2 and 3 in the table above.

  • The valuation area

The valuation area is a logical organizational unit that structures a company for the purpose of uniform and complete valuation of material stocks. In SAP S/4HANA Cloud Public Edition, each plant represents a valuation area. 

This means that you can basically control automatic account determination per plant.  You assign a valuation grouping code to each plant to group plants that should be treated the same for account determination. The valuation grouping code is an account determination key (see column 4 of the table above).

The following image shows the Group Together Valuation Areas configuration activity where you assign a valuation grouping code to plants. Here, you can see that valuation grouping code 0001 is assigned to all plants.

account key assignment in sap mm

The product

The following video explains how account determination is affected by the valuation class in the material master record.

To learn how to create and assign valuation classes start the following interactive demo.

To learn how to create an account category reference and assign it to a material type, start the following interactive demo.

We have reviewed each of the following  factors that influence account determination:

  • The movement type
  • The material

Account Determination Configuration

Automatic account determination configuration activity.

Now that we have examined the factors that influence account determination, start the following demo to learn how you can define accounts for certain combinations of factors that the system can automatically determine for goods movements.

In practice, account determination for goods movements is a joint task of the logistics/supply chain and finance teams. An important contribution of the supply chain consultants is to understand the interrelationships and influencing factors so that the finance people can assign the correct accounts.

Log in to track your progress & complete quizzes

Valuation and Account Assignment In SAP MM

Banner-Img

  • Share this blog:

SAP MM valuation and Account Assignment

This is completely integrated with FI(Financial Accounting). material Valuation: stock value= stock Qty x Price. The material valuation will update the G/L accounts in Financial Accounting.

SAP MM valuation:

The procurement process begins with generating a purchase order plus ends with invoice verification. Within the entire process, one of the relevant parts is material Valuation. While developing purchase orders, material price is a necessary field plus it is automatically determined. It arises because material valuation is attested within the SAP system in the material master. Material valuation describes integration among MM & FI (Financial Accounting) modules as it updates the general ledger accounts within financial accounting. The important points to note regarding material Valuation are −

Material valuation assists in managing the price of the material.

Stock obtained from one vendor is valuated at a different price than the stock, which is obtained from the other vendor.

We can evaluate the material based on various types of Procurement which are called Split Valuation.  

Split Valuation:

Split valuation assists in evaluating the stocks of materials within the same valuation area differently. Some of the examples where we use split valuations are:

A stock that is procured externally from a vendor has a distinct valuation price than the stock of in-house production.

Stock acquired from one vendor is valuated at a distinct price than the stock obtained from another vendor.

The same material possessing a different batch may maintain distinct valuation prices.

Split Valuation requires to be activated before setting any other configuration.

Valuation and Account Assignment :

  • This is fully integrated with FI. Material Valuation: Stock value = Stock Qty X Price
  • The material valuation will update the G/L accounts in Financial Accounting.

Material Valuation features:

  • It allows you to evaluate the materials
  • You can evaluate the materials differently based on sub stocks.
  • It allows you to evaluate the balance sheet.

Material Valuation control:

This valuation is controllable by

  • System settings (where valuation has to be done)
  • Material master records (As a rule for each material has to be evaluated under a material type). If this material type is evaluated or not

For every material, you are assigning a valuation class.

  • You are grouping a material type under the valuation class.
  • All materials of a material type can have one material valuation class.
  • Under a material type, you can have different valuation class for different materials

Materials under different material types can have the same valuation class.

Valuation structure:

Data over material is evaluated using the following structure

  • Valuation area
  • Valuation class
  • Valuation category 
  • Valuation type
  • Material type
  • Movement type

Valuation area:

The valuation area is an Organizational level at which material valuation is done; the valuation area is defined as 

Valuation area= company code

Complete stocks of that particular material in the company code are evaluated together

Valuation area= one plant

Valuation class:

We can group the different materials with the same properties into the valuation calls so that there is no need to control a separate stock account for each material.

All the materials with the same type are assigned to one valuation class.

Various materials with the same material type are assigned to different valuation classes.

Valuation category:

The criterion, according to which split Valuation is carried out:

Procurement: You can evaluate a material uniquely depending on whether it is made in-house or procured externally.

Origin: You can evaluate a material uniquely depending on where it comes from (such as home or else from abroad). 

Status: You can evaluate a material uniquely depending on its status (such as new, used, or repaired). 

Valuation Type:

The valuation type defines the unique character of the valuation category, like internal or external, within the case of Procurement. In the valuation category Origin, you can determine the different countries as the valuation types. You determine valuation types within Customizing. You first define all the correct valuation types for a valuation category.

You specify within this material master record that valuation types are permitted for a different material. For every material subject to split valuation, you must enter all the valuation types permitted within the material master record.

Material Type:

We can assign every material to a material type when we create it. Examples of material types in the standard system incorporate operating supplies, raw materials, and finished products.

Movement Type:

For every material movement, there is a movement type within the SAP System. The movement type manages the properties of the movement, for instance, which entries you have to make when entering a material movement, and which updates are taken out when the movement is posted.

Customization

SPRO -> Material Management -> Valuation and Account Assignment -> Define Price Control for Material Types

SPRO -> Material Management -> Valuation and Account Assignment -> Account Determination -> Account Determination Without Wizard

  • Define Valuation Control (OMWM)
  • Group Together Valuation Areas
  • Define Valuation Classes
  • Define Account Grouping for Movement Types (OMWN)
  • Configure Automatic Postings

Define Valuation Control (OMWM):

Choosing the valuation level is one of the first steps we will perform while customizing the system.

If using the PP Production module, the valuation area must be set at the plant level. For account determination, you can group valuation areas by activating the valuation grouping code. This makes the configuration of automatic postings much easier.

Group Together Valuation Areas:

Valuation areas are grouped with the objective of simplifying the management of the standard accounts table by minimizing the number of entries.

Along with other factors, the valuation grouping code determines the G/L Accounts, to which a goods movement is posted (Automatic Account Determination).

The valuation grouping code makes it easier to set the automatic account determination.

Within the chart of accounts, we assigned the same valuation grouping code to the valuation areas.

Since we want to assign to the same G/L account, we assigned the same valuation grouping code to the valuation areas.

Define Valuation Classes:

The Valuation class is a group of material with the same G/L account.

When you create a material master record, you must assign the material to a valuation class. The valuation class is assigned to a material at the plant level. However, if using the split valuation, the valuation class will be assigned at the valuation type level.

The choices for valuation class are dependent on the material type. In general, several valuation classes can be allowed for one material type. Also, the same valuation class could be allowed for different material types.

The link between the valuation class and the material type is the account category reference. The account category reference is assigned to a material type.

The G/L account determined for the material is carried out according to the settings for its valuation class.

Step1: Account Category Reference: Account Category Reference (4 Char): Group of valuation classes that’s the system uses to check whether the valuation class you have entered is allowed when you maintain accounting data in a material master record.

Step2: Valuation Class: Here The Valuation Class is defined and an Account Category Reference is attached to a Valuation Class. Example: 3000 (Raw Materials) -> 0001 (Reference for Raw Materials)

Step3: Material Type / Account Category Reference: Here the Material Type can be assigned to an Account Category Reference. Example: ROH (Raw Materials) -> 0001 (Reference For Raw Materials)

Define Account Grouping for Movement Types: Movement type - Special stock indicator - Value updating - Quantity updating - Movement Indicator - Consumption posting - Posting string for values - Counter - Transaction/event key - Account modification - Check

The following diagram shows the relation between Chart of account, Transaction, account modifiers, accounts posting keys. 

TRANSACTION / EVENT KEYS IN SAP

AUM: Stock transfers are there between plants and from one movement type to another with split valuation. The difference between the price at the delivery plant and the receiving point is booked at the latter.

Account to be opened: Loss – Stock Transfer Gain – Stock Transfer A/c

BO1: Check up Subsequent settlement of Provisions (e.g.: volume-based rebate)

BO2: Check up Subsequent settlement of revenues -conditions in inv. Verification

BO3: Check up Provision Differences

BSV: The Company sends materials for subcontract work, this transaction is considered, Accounts to be opened, Materials Consumed/Trading Goods w/o cost element, for ROH Inventory Change, Cost of Goods sold w/o Cost element, for FERT s

BSX: All stock postings to Stock Accounts due to Goods receipts & goods issues in Inventory Management. B/s Inventory A/c s 11101 to 11111

DIF: Small Differences that may arise during invoice verification in the invoice amount not exceeding tolerance.

Accounts to be opened: Loss—Inventory Differences A/c, Gain---Inventory Differences A/c

FRX: These are used for posting delivery costs when goods and invoices are received for purchase orders

FR1: Freight Clearing 69002 Separate A/c s is required

FR2: Provisions for freight Charges 69002

FR3: Customs Clearing 69002

FR4: Provisions for Customs Clearing

FRL: Services are performed for the company externally. Account to be opened: Purchased Services A/c

FRN: Services are performed for the company externally and hence delivery costs

Account to be opened: External Procurement Costs A/c

GBB: Offsetting Entries for Inventory Postings AUA For Order settlement 68005 (Factory output for Production)

AUF: For GRs for orders (w/o account assignment) 68005

BSA: For initial entry of stock balances 11199  

INV: Expenditure/Income from Inventory differences 68004 – Raw Material Consumption A/c  

VAX: For goods issues for sales orders with no assignment object The account will not be a cost element 68002 –Raw Material Indigenous 72001 – Stores & Spares

VAY: For goods issues for sales orders with assignment object The account is a cost element

VBO: Consumption from stock provided to vendor 68002 –Raw Material Indigenous

VBR: For internal goods issues (e.g.: to a cost center) 68005—Factory output for Production 72001 – Stores & Spares

VKA: For consumption in Sales Order without SD (Mvt. Type 231) 68005—Factory output for Production

VNG: For Scrapping & destruction 68004 – Raw Material Consumption – Others

VQY: For sampling with account assignment

ZOB: For goods issues with no Purchase order reference (Mvt 501)

ZOF: For goods issues with no production order reference (Mvt 521)

KBS: Account - assigned Purchase Order ie. account assignment taken from PO Account need not be assigned in OBYC

KDR: Exchange rate rounding differences in case of foreign currency invoices 80029 -- Exchange Rate Difference - Valuation 1

KDM: Exchange rate rounding differences for open items (invoice posting with a Different exch. rate than the GR/due to Std price difference/insufficient stock coverage) 80028 --Exchange Rate Difference - foreign currency to local

KDV: Material ledger from low levels E/R diff.

KON: Consignment payables

KTR: Offsetting entry for price differences in cost object hierarchies 68005—Factory output for Production

LKW: Accruals and deference. acct (material ledger)

PRD: Price Differences, Loss/Gain Inventory Differences (Two A/cs to be opened & assigned) 68004 – Raw Material Consumption – Others A/c is assigned

PRK: Price Differences in cost object hierarchies Loss/Gain Inventory Differences (Two A/cs to be opened & assigned)

RKA:  Inv. reductions from logistic invoice verification

UMB: Gain/loss from revaluation Checkup- 68004 is found attached (Raw Material Consumption – Others A/c )

UPF: Unplanned delivery costs

VST: Input Tax

WGI: Goods issue inflation revaluation

WGR: Goods receipt inflation revaluation

WRX: GR/IR clearing account 40051 – GR/IR Clearing A/c

WRY: GR/IR clearing acct (mat. ledger) (old) 

[Check Out: SAP MM Tutorial ]

Account assignment in SAP MM:

Account Assignment category is a very relevant field available and utilized in the purchasing documents. It has various control functions and assists in managing the objects (e.g. sales order, cost center, project) that are charged within the case of a purchase order for material that is meant for direct usage or consumption.

Use of account assignment:

You define which account assignment object is to be charged through the account assignment category such as (sales order, cost center, etc.,) Which accounts are to be charged. At the same time, the incoming invoice or else goods receipt is posted, and which account assignment data you have to give. The account assignment category is utilized at the time of the creation of a purchase order. For regular PO, no account assignment category is used.

Account assignment category:

The account assignment category defines:

The quality of the account assignment (sales order, cost center, and so on)

Which accounts are to be charged while the incoming invoice or goods receipt is posted.

Which account assignment data you have to provide.

Account assignment categories:

Conclusion :

A valuation modifier is used to let the system find the predefined posting rules discover how the accounts of the financial accounting system are to be posted and update the stock fields within the material master data. Whereas by using the account assignment, we can specify which object is to be charged through the account assignment. 

You liked the article?

Vote for difficulty

Current difficulty (Avg): Medium

Recommended Articles

Embedded Systems Interview Questions Views 1547 Types of Pointers in C Views 14352 Oracle Procure To Pay Interview Questions Views 4352 Characteristics of C Language Views 10834 Salesforce Sample Triggers with different Scenarios Views 11712 Oracle Financials Interview Questions Views 9437

Recommended Courses

About author.

TekSlate is the best online training provider in delivering world-class IT skills to individuals and corporates from all parts of the globe. We are proven experts in accumulating every need of an IT skills upgrade aspirant and have delivered excellent services. We aim to bring you all the essentials to learn and master new technologies in the market with our articles, blogs, and videos. Build your career success with us, enhancing most in-demand skills in the market.

Stay Updated

Get stories of change makers and innovators from the startup ecosystem in your inbox

Related Blogs

SAP MM Tutorial

SAP MM Interview Questions

Enterprise Structure in SAP MM

Material Master Data in SAP MM

Vendor Master In SAP MM

Procurement Cycle In SAP MM

Account Assignment Category MM

This characteristic specifies account assignment category MM.

Technical Data

Meet Gavern - Free Joomla! 3.0 Template

  • ERPCorp FI/CO Books
  • Access SAP Modules
  • SAP Webinars
  • Client Roster
  • BECOME A MEMBER

Member section cover

ERPCorp SAP FICO Blog

Sap mm account determination.

SAP Press Salehttps://shrsl.com/43z0d

SAP MM-FI Account Determination

Ashish sampat.

Ashish

Table of Contents

Introduction.

  • Account Determination Configuration
  • Consumption to an Order

Movement Types and Accounting Entries

Key takeaways, about the author.

Several colleagues have asked me questions about integration of MM and FI such as:

  •  How do postings flow from Materials Management into Financial Accounting?
  • How do we find out what occurs behind the scenes?
  • How do we identify which movement types point to a specific General Ledger (GL) Account?
  • How do you change the posting to a different  GL Account?
  • How do you create a new movement type and assign it to a specific GL Account?

This blog explains the fundamentals of MM-FI account determination.

Let's start with some configuration basics, including OBYC.

Account Determination Configuration  

Transaction OBYC defines the integration between the MM, FI, and CO modules

Transaction keys   determine the general ledger accounts during goods movements

An account modifier is used to differentiate account determinations, depending on the procedure

Transaction keys and account modifiers are a logical grouping of similar types of transactions. The transaction-account modifier, along with the valuation class, drives the accounting entries.

Transaction keys are predefined and cannot be changed

AshishBlog1

 Figure 1 : OBYC Setup for Transaction Key BSX – Inventory Posting

You may have seen an accounting entry at the time of the purchase of raw material as a debit to inventory and credit GR/IR. The configuration setup of transaction key BSX for inventory posting is responsible for the inventory posting as shown in Figure 1, and WRX for GR/IR clearing account is responsible for GR/IR posting . When movement type 101 is used to record the goods receipt of raw material with valuation class 3000 for a purchase order, the system looks up the GL Account for transaction BSX and WRX for valuation class 3000 and records it in the accounting document.

Consumption to an Order  

AshishBlog2

When a raw material is consumed with movement type 261, the system looks up transaction GBB (offsetting entry for inventory posting) for account modifier VBR for consumption for internal goods issues, and that reflects the GL Account in the accounting document as shown in Figure 2.

  Figure 3 summarizes a few important movement types and accounting entries. Business process is listed in the column furthest to the left, with movement type in the next column and the debit and credit posting in the subsequent columns.

There is a column for transaction and account modifiers; as we noted earlier, these are SAP terms for logically grouping similar types of transactions. The transaction account modifier, along with the valuation class, drives the accounting entries.

The MM-FI account determination configuration is set up at the time of original implementation with Transaction OBYC , and once set up, these accounts are derived automatically. You’ll want to test the setup before going live to ensure that the correct accounts are being used for the respective transactions. You can change this configuration after go-live, but the revised setup needs to be thoroughly tested. Otherwise, you may run the risk of impacting regular operations.

AshishBlog3

  • Transaction-account modifier and valuation class map the accounting entries
  • Transaction key: determines GL accounts for posting
  • Account modifier: differentiates account determination based on the procedure
  • OBYC MM-FI Account determination setup is stored in Table T030
  • OMJJ Movement Type is stored in Table T156X
  • You can combine these two tables via SQ00 query or Excel
  • The account modifier links the movement type to accounting entries

The transaction key in MM-FI account determination is different from the transaction code. A transaction code is an alphanumeric code that represents a particular task in SAP. It allows users to access tasks directly without menu paths.

Ashish Sampat is an SAP FI/CO Consultant who provides solutions in SAP Controlling, including product costing, SAP Material Ledger, and cost center accounting to global clients in consumer-packed goods, life sciences, and industrial sectors. Ashish is based in the Chicago region, working as an independent SAP FI/CO consultant. Ashish is the author of several SAP books.

Bill of Material

A bill of material (BOM) is a structured hierarchy of components necessary to build an assembly. BOMs and purchasing info records provide cost estimates with the information necessary to calculate the material costs of assemblies.

A by-product is a product that is produced in conjunction with other products. The system does not create a separate order item for each by-product. The material valuation of a by-product is always based on the price specified by price control in the material master. If a by-product is indicated as being relevant to costing in BOM, the total cost of the process is reduced by the costs of the by-products

You select the co-product indicator in the MRP 2 and Costing 1 views if a material is a valuated product that is produced simultaneously with one or more other products. Setting this indicator allows you to assign the proportion of costs this material will receive in relation to other co-products within an apportionment structure.

Backflushing is the automatic posting of a goods issue for components in an order during confirmation. It reduces the amount of work in warehouse management, especially for low-value parts. The material components from the BOM are assigned to operations in the routing.

Base Quantity

All component quantities in a BOM relate to the base quantity. You increase the accuracy of component quantities by increasing the base quantity, similar in concept to the price unit.

 Base Unit of Measure

Material stocks are managed in the base unit of measure. The system converts all quantities you enter in other units of measure (alternative units of measure) to the base unit of measure.

A bill of material (BOM) is a structured hierarchy of components necessary to build an assembly. BOMs, and purchasing info records allow cost estimates to calculate material costs of assemblies.

BOM Application

A BOM application is a costing variant component for automatic determination of alternative BOMs.

A BOM group is a collection of BOMs for a product or number of similar products.

BOM Item Component Quantity

The quantity of a BOM item that is entered in relation to the base quantity of the product.

BOM Item Status

Six indicators, such as costing relevancy, are contained in the Status/Long Text tab of a BOM item.

This controls the current processing status of the BOM. For example, a BOM may have a default status of not active when initially created, which then may be changed to active when the BOM is available for use in material requirements planning (MRP) and released for planned orders.

This determines a section of your company, such as production, engineering, or costing. You define which item statuses can be used in each BOM usage; for example, all items in BOMs with a certain usage may be relevant to production.

Bulk Material

Bulk materials are not relevant for costing in a cost estimate and are expensed directly to a cost center. The Bulk Material checkbox is maintained in the MRP 2 view and the BOM item. If a material is always used as a bulk material, set the indicator in the material master. If a material is only used as a bulk material in individual cases, set the indicator in the BOM item, which has a higher priority.

Calculation Base

A calculation base is a group of cost elements to which overhead is applied. The calculation base is a component of a costing sheet, which summarizes the rules for allocating overhead.

Chart of Accounts

A chart of accounts is a group of general ledger accounts assigned to each company code. This chart of accounts is the operative chart of accounts used in both financial and cost accounting. All companies within the one controlling area must have the same operative chart of accounts. Other charts of accounts include the country-specific chart of accounts required by individual country legal requirements and the group chart of accounts required by consolidation reporting.

Company Code

A company code is the smallest organizational unit of financial accounting for which a complete self-contained chart of accounts can be drawn up for external reporting.

Component Scrap

Component scrap is the percentage of component quantity that does not meet required quality standards before being inserted in the production process. The plan quantity of components is increased. Component scrap is an input scrap because it is detected before use in the production process. You can plan component scrap in the MRP 4 view and the Basic Data tab of the BOM item. An entry in the BOM item field takes priority over an entry in the material master MRP 4 view.

Conditions are stipulations agreed upon with vendors, such as prices, discounts, surcharges, freight, duty, and insurance. You maintain purchasing conditions in quotations, purchasing info records, outline agreements, and orders.

Condition Technique

The condition technique is used to determine the purchase price by consideration of all the relevant pricing elements. A feature of the technique is the formulation of rules and requirements.

Condition Type

A condition type is a key that identifies a condition. The condition type indicates, for example, whether the system applies a price, a discount, a surcharge, or other pricing, such as freight costs and sales taxes.

Confirmation

A confirmation documents the processing status of orders, operations, and individual capacities. You specify the operation yield, scrap and rework quantity, the activity quantity, work center, and who performed the operation.

Consignment Material

Consignment occurs when a vendor maintains a stock of materials at a customer site. The vendor retains ownership of the materials until they are withdrawn from the consignment stores.

Cost Center

A cost center is master data that identifies where the cost occurred. A responsible person assigned to the cost center analyzes and explains cost center variances at period end.

Cost Component

A cost component identifies costs of similar types, such as material, labor, and overhead costs by grouping together cost elements in the cost component structure.

Cost Component Group

Cost component groups allow you to display cost components in standard reports. In the simplest implementation, you create a cost component group for each cost component and assign each group to a corresponding cost component. You assign cost component groups as columns in cost estimate list reports and costed multilevel BOMs.

Cost Component Split

The cost component split is the combination of cost components that makes up the total cost of a material. For example, if you need to view three cost components (material, labor, and overhead) for your reporting requirements, the combination of these three cost components represents the cost component split.

Cost Component Structure

You define which cost components make up a cost component split by assigning them to a cost component structure. Within the cost component structure, you assign cost elements and origin groups to cost components.

Learn more about SAP S/4HANA FICO topics  become a member  click here now :

erp book 2

Cost Component View

Each cost component is assigned to a cost component view. When you display a cost estimate, you can choose a cost component view, which filters the cost components displayed in the cost estimate.

Movement Type

This key indicates the type of material movement such as goods receipt, goods issue, and physical stock transfer. The movement type enables the system to find predefined posting rules, which determine how the stock and consumption general ledger accounts post and how the stock fields in the material master record are updated.

Raw Materials

Raw materials are items that you purchase from suppliers or vendors.

SAP Query is used to create reports for users who have little knowledge about SAP Table data storage structure. SAP Query allows evaluating data in the SAP system.

SAP Query offers users a broad range of ways to define reporting programs and create different types of reports such as basic lists, statistics, and ranked lists.

Valuation Class

The valuation class in the Costing 2 view determines which general ledger accounts are updated during inventory movement or settlement.

Cost Element

Cost elements are included as part of a general ledger account. Primary cost elements identify external costs, while secondary cost elements identify costs allocated within controlling, such as activity allocations from cost centers to manufacturing orders.

Cost Estimate

A cost estimate calculates the plan cost to manufacture a product or purchase a component. It determines material costs by multiplying BOM quantities by the standard price, labor costs by multiplying operation standard quantities by plan activity price, and overhead by costing sheet configuration.

Costed Multilevel BOM

A costed multilevel BOM is a hierarchical overview of the values of all items of a costed material according to the material’s costed quantity structure (BOM and routing). You display a costed multilevel BOM on the left side of a cost estimate screen. You can also view a costed multilevel BOM separately with Transaction CK86_99.

Event-Based Processing

As of SAP S/4HANA release 2022, event-based processing is available, where goods movements and confirmations represent events that trigger the calculation of overhead according to the costing sheet. Then, depending on the status of the order, this triggers either the posting of a journal entry for the work in process (WIP) or the cancellation of any existing WIP and the calculation of production variances.

Goods Issue

A goods issue is the movement (removal) of goods or materials from inventory to manufacturing or to a customer. When goods are issued, it reduces the number of stock in the warehouse.

GR/IR is the SAP process to execute the three-way match- purchase order, Material Receipt, as well as vendor invoice. You use a clearing account to record the offset of the Goods Receipt (GR) and Invoice Receipt (IR) postings. As soon as completely processed, the postings in the cleaning account balance.

Internal Order

An internal order monitors costs and revenue of an organization for short- to-medium-term jobs. You can carry out planning at a cost element and detailed level, and budgeting at an overall level with availability control.

Long-Term Planning

Long-term planning allows you to enter medium- to longer-term production plans, and simulate future production requirements with long-term MRP. You can determine future purchasing requirements for vendor RFQs, update purchasing info records, and transfer planned activity requirements to cost center accounting.

Margin Analysis

Margin Analysis is the refined version of Account-based COPA. The Universal Journal combines financial and managerial accounting and directly records all dimensions, including custom fields. Margin Analysis provides consistent financial information without any reconciliation needs along with a financial audit trail. All innovations developed for the Universal Journal are immediately available within Margin Analysis. A consistent approach ensures common usage of ledgers, currencies, valuations, predictions, and simulations, as well as their availability in planning and reporting.

Master Data

Master data is information that stays relatively constant over long periods of time. For example, purchasing info records contain vendor information such as a business name, which usually doesn’t change.

Material Master

A material master contains all the information required to manage a material. Information is stored in views, and each view corresponds to a department or area of business responsibility. Views conveniently group information together for users in different departments, for example, sales and purchasing.

Process Order

A process order is a manufacturing order that is used in process industries. A master recipe and materials list are copied from master data to the order. A process order contains operations that are divided into phases. A phase is a self-contained work-step that defines the detail of one part of the production process using a primary resource. In process manufacturing, only phases are costed not operations. A phase is assigned to a subordinate operation and contains standard values for activities, which are used to determine dates, capacity requirements, and costs.

Procurement Alternative

A procurement alternative represents one of a number of different ways of procuring a material. You can control the level of detail in which the procurement alternatives are represented through the controlling level. Depending on the processing category, there are single-level and multilevel procurement alternatives. For example, a purchase order is single-level procurement, while production is multilevel procurement.

Production Order

A production order is used for discrete manufacturing. A BOM and routing are copied from master data to the order. A sequence of operations is supplied by the routing, which describes how to carry out work-steps. An operation can refer to a work center at which it is to be performed. An operation contains planned activities required to carry out the operation. Costs are based on the material components and activity price multiplied by a standard value.

Product Drilldown Reports

Product drilldown reports allow you to slice and dice data based on characteristics such as product group, material, plant, cost component, and period. Product drilldown reports are based on predefined summarization levels and are relatively simple to setup and run.

Production Variance

Production variance is a type of variance calculation based on the difference between net actual costs debited to the order and target costs based on the preliminary cost estimate and quantity delivered to inventory. You calculate production variance with target cost version 1. Production variances are for information only and are not relevant for settlement.

Production Version

A production version determines which alternative BOM is used together with which task list/master recipe to produce a material or create a master production schedule. For one material, you can have several production versions for various validity periods and lot-size ranges.

Purchase Price Variance

When raw materials are valued at the standard price, a purchase price variance will post during goods receipt if the goods receipt or invoice price is different from the material standard price.

Profitability Analysis

Costing-based profitability analysis enables you to evaluate market segments, which can be classified according to products, customers, orders (or any combination of these), or strategic business units, such as sales organizations or business areas concerning your company’s profit or contribution margin.

Profit Center

SAP Profit Center is a management-oriented organizational unit used for internal controlling purposes. Segmenting a company into profit centers allows us to analyze and delegate responsibility to decentralized units.

Purchasing Info Record

A purchasing info record stores all the information relevant to the procurement of a material from a vendor. It contains the Purchase Price field, which the standard cost estimate searches for when determining the purchase price.

Raw materials are always procured externally and then processed. A material master record of this type contains purchasing data but not sales.

A routing is a list of tasks containing standard activity times required to perform operations to build an assembly. Routings, together with planned activity prices, provide cost estimates with the information necessary to calculate labor and activity costs of products.

Sales and Operations Planning

Sales and operations planning (SOP) allows you to enter a sales plan, convert it to a production plan, and transfer the plan to long-term planning.

S&OP is slowly being replaced by SAP Integrated Business Planning for Supply Chain (SAP IBP), which supports all S&OP features. S&OP is intended as a bridge or interim solution, which allows you a smooth transition from SAP ERP to on-premise SAP S/4HANA and SAP IBP. See SAP Note 2268064 for details.

SAP Fiori is a web-based interface that can be used in place of the SAP GUI. SAP Fiori apps access the Universal Journal directly, taking advantage of additional fields like the work center and operation for improved variance reporting.

Work in process (WIP) and variances are transferred to Financial Accounting, Profit Center Accounting (PCA), and Profitability Analysis (CO-PA) during settlement. Variance categories can also be transferred to value fields in CO-PA.

Settlement Profile

A settlement profile contains the parameters necessary to create a settlement rule for manufacturing orders and product cost collectors and is contained in the order type.

Settlement Rule

A settlement rule determines which portions of a sender’s costs are allocated to which receivers. A settlement rule is contained in a manufacturing order or product cost collector header data.

You need setup time to prepare equipment and machinery for the production of assemblies, and that preparation is generally the same regardless of the quantity produced. Setup time spread over a smaller production quantity increases the unit cost.

Simultaneous Costing

The process of recording actual costs for cost objects, such as manufacturing orders and product cost collectors in cost object controlling, is called simultaneous costing. Costs typically include goods issues, receipts to and from an order, activity confirmations, and external service costs.

Source Cost Element

Source cost elements identify costs that debit objects, such as manufacturing orders and product cost collectors.

Source List

A source list is a list of available sources of supply for a material, which indicates the periods during which procurement is possible. Usually, a source list is a list of quotations for a material from different vendors.

 You can specify a preferred vendor by selecting a fixed source of supply indicator. If you do not select this indicator for any source, a cost estimate will choose the lowest cost source as the cost of the component. You can also indicate which sources are relevant to MRP.

Standard Price

The standard price in the Costing 2 view determines the inventory valuation price when price control is set at standard (S). The standard price is updated when a standard cost estimate is released. You normally value manufactured goods at the standard price.

Subcontracting

You supply component parts to an external vendor who manufactures the complete assembly. The vendor has previously supplied a quotation, which is entered in a purchasing info record with a category of subcontracting.

Tracing Factor

Tracing factors determine the cost portions received by each receiver from senders during periodic allocations, such as assessments and distributions.

Universal Journal

The efficiency and speed of the SAP HANA in-memory database allowed the introduction of the Universal Journal single line-item tables ACDOCA (actual) and ACDOCP (plan). The Universal Journal allows all postings from the previous financial and controlling components to be combined in single items. The many benefits include the development of real-time accounting. In this book, we discuss both period-end and event-based processing.

The valuation class in the Costing 2 view determines which general ledger accounts are updated as a result of inventory movement or settlement.

Valuation Date

The valuation date determines which material and activity prices are selected when you create a cost estimate. Purchasing info records can contain different vendor-quoted prices for different dates. Different plan activity rates can be entered per fiscal period.

Valuation Grouping Code

The valuation grouping code allows you to assign the same general ledger account assignments across several plants with Transaction OMWD to minimize your work. The grouping code can represent one or a group of plants.

Valuation Type

You use valuation types in the split valuation process, which enables the same material in a plant to have different valuations based on criteria such as batch. You assign valuation types to each valuation category, which specify the individual characteristics that exist for that valuation category. For example, you can valuate stocks of a material produced in-house separately from stocks of the same material purchased externally from vendors. You then select procurement type as the valuation category and internal and external as the valuation types.

Valuation Variant

The valuation variant is a costing variant component that allows different search strategies for materials, activity types, subcontracting, and external processing. For example, the search strategy for purchased and raw materials typically searches first for a price from the purchasing info record.

Valuation Variant for Scrap and WIP

This valuation variant allows a choice of cost estimates to valuate scrap and WIP in a WIP at target scenario. If the structure of a routing is changed after a costing run, WIP can still be valued with the valuation variant for scrap and WIP resulting in a more accurate WIP valuation.

Valuation View

In the context of multiple valuation and transfer prices, you can define the following views: – Legal valuation view – Group valuation view – Profit center valuation view

Work Center

Operations are carried out at work centers representing; for example, machines, production lines, or employees. Work center master data contains a mandatory cost center field. A work center can only be linked to one cost center, while a cost center can be linked to many work centers.

Work in Process

Work in process (WIP) represents production costs of incomplete assemblies. For balance sheet accounts to accurately reflect company assets at period end, WIP costs are moved temporarily to WIP balance sheet and profit and loss accounts. WIP is canceled during period-end processing following delivery of assemblies to inventory.

A cost center is master data that identifies where the cost occurred. A responsible person is assigned to the cost center that analyzes and explains cost center variances at period-end.

An internal order monitors the costs and revenue of an organization for short-to medium-term jobs. You can carry out planning at a cost element and detailed level and budgeting at an overall level with availability control.

Intra Materials

Intra Materials are intermediate materials generated in a process. They can be neither purchased nor sold. They do not have a purchase or sales view.

Investment Order

An investment order monitors investment costs to be capitalized and settled to fixed assets.

Master Recipe

A master recipe consists of a header and several operations, each of which is carried out at a primary resource

A process order consists of operations, each of which is carried out at a primary resource. An operation is subdivided into phases. A phase is an independent process step that contains the detailed description of a part of the entire manufacturing process.

A process order is a manufacturing order used in process industries. A master recipe and materials list are copied from master data to the order. A process order contains operations which are divided into phases. A phase is a self-contained work step that defines the detail of one part of the production process using the primary resource of the operation.

In process manufacturing only phases are costed, not operations. A phase is assigned to a subordinate operation and contains standard values for activities which are used to determine dates, capacity requirements, and costs.

A production order is used for discrete manufacturing. A bill of material and routing are copied from master data to the order. A sequence of operations is supplied by the routing which describes how to carry out work steps.

An operation can refer to a work center at which it is to be performed. An operation contains planned activities required to carry out the operation. Costs are based on the material components and activity price multiplied by a standard value.

Production variance is a type of variance calculation based on the difference between net actual costs debited to the order and target costs based on the preliminary cost estimate and quantity delivered to inventory. You calculate production variance with target cost version 1. Production variances are for information only, and are not relevant for settlement.

A production version describes the types of production techniques that can be used for a material in a plant. It is a unique combination of bill of material, routing and production line and is maintained in the MRP 4, Work scheduling and Costing 1 views of the material master.

A profit center receives postings parallel to cost centers and other master data, such as orders. Profit center accounting is a separate ledger that enables reporting from a profit center point of view. You typically create profit centers based on areas in a company that generates revenue and have a responsible manager assigned.

Purchase Price Variance PPV

When raw materials are valued at a standard price, a purchase price variance will post during goods receipt if the goods receipt or invoice price is different from the material standard price resulting in GR/IR posting.

Operations are carried out at work centers representing, for example, machines, production lines, or employees. Work center master data contains a mandatory cost center field. A work center can only be linked to one cost center, while a cost center can be linked to many work centers.

Meet Ashish Sampat and other SAP experts in-person at SAP Controlling Financials 2024 Conference in San Diego, CA:  Use Exclusive Coupon Code: JJ100 and Save $100: click here

For the latest updates

About the author

account key assignment in sap mm

Ashish Sampat is a qualified finance and costing professional with over two decades of industry experience in the SAP Finance and Controlling space. Ashish has been an SAP consultant for most of his career with various consulting organizations and now works as an independent SAP FI/CO consultant. He has provided solutions in several areas of SAP Controlling including product costing, Material Ledger, and cost center accounting to global clients in consumer packed goods, life sciences, and industrial sectors. Born and educated in India, Ashish now lives in suburban Chicago with his wife and two kids. Ashish is the author of First Steps in SAP Controlling (CO) and Expert Tips to Unleash the Full Potential of SAP Controlling.

Author's recent posts

account key assignment in sap mm

Great article & simple to understand.

Thanks for this nice overview of the MM account determination! I am surprised to see in my project work, how often the FICO colleagues let the SD or MM guys take care for the account determination. Because IMHO even it can be found in the IMG in SD and MM etc. too, it's 100% the responsibility of the finance team. As a finance consultant, I have the strong "desire" to take care for this, this must be my baby :-)

Captcha Image

account key assignment in sap mm

IMAGES

  1. SAP MM Automatic Account Assignment

    account key assignment in sap mm

  2. Account Assignment Model In SAP Part 2

    account key assignment in sap mm

  3. Item Categories & Account Assignment Categories

    account key assignment in sap mm

  4. SAP MM

    account key assignment in sap mm

  5. Create Account Keys for GST in SAP Hana

    account key assignment in sap mm

  6. Account Assignment Model in SAP: FKMT

    account key assignment in sap mm

VIDEO

  1. Sap Mm Logical Questions

  2. #9 How can you create a Vendor Master Record in SAP MM?

  3. Pricing Procedure Configuration in SAP MM S4 HANA

  4. Account assignment mandatory for material

  5. How to Create Purchase Order..Consultant Steps in PO. #purchaseorder #purchase #sap #saptelugu #mm

  6. Assign sales organization to company code in SAP SD

COMMENTS

  1. Account Determination in SAP S/4HANA Materials Management

    The SAP S/4HANA system provides automatic general ledger account posting via the automatic account determination process. When posting a goods receipt against a PO, the system creates an accounting document (along with the material document), and general ledger account postings are made. The system determines which general ledger accounts ...

  2. Account assignment in SAP Purchasing (MM)

    Solution: The indicator determines which account assignment screen is used by default for maintaining the account assign. for a purchase orde r item. For the EnjoySAP transactions, this value is simply a proposal that you can change in the purchasing document. For the old transactions, this value is the only one that you can use.

  3. SAP MM

    Step 1 − On the Display IMG screen, select Configure Automatic Postings by following the above path. Step 2 − Click Account Assignment. Step 3 − Here you can maintain the transaction for which automatic account determination is there. Click on Save. Automatic posting for transactions is now configured.

  4. SAP: MM Account Determination (1): Basic Configuration

    SAP Automatically posts financial entries related to inventory movements, how can we configure these entries?*Explanation and Demo on S4HANA 1909*Basic Confi...

  5. account assignment category (MM-PUR) (SAP Library

    Purchasing (MM-PUR) A key indicating whether an item is to be assigned to an auxiliary account (such as a cost center). The account assignment category determines which account assignment details are required for the item (for example, cost center or account number).

  6. Account Assignment

    Account Assignment. Home; SAP ERP Support Package Versions; Purchasing (MM-PUR) Purchase Orders (MM-PUR-PO) Account Assignment; Purchasing (MM-PUR) 6.0 EHP3 SP24. Available Versions: 6.0 EHP8 SP20 ; 6.0 EHP8 SP19 ; 6.0 EHP8 SP18 ; ... If you do not have an SAP ID, you can create one for free from the login page.

  7. Setting Up Account Determination

    Conclusion. In practice, account determination for goods movements is a joint task of the logistics/supply chain and finance teams. An important contribution of the supply chain consultants is to understand the interrelationships and influencing factors so that the finance people can assign the correct accounts. Continue to quiz.

  8. Account Assignment

    Learn how to use the account assignment category in SAP ERP to control the cost object, stock, and account assignment details for different items. Find out how it relates to requirements class, requirement type, and item category.

  9. Display SAP MM-FI Automatic Account Assignment

    Type in Table T030 and press Enter to display the selection screen shown in Figure 1. Figure 1: Table T030 Selection Screen To Display SAP MM-FI Configuration Settings. You restrict the table entries displayed on the subsequent results screen by making entries in the Selection Criteria section. To display G/L accounts posted during goods issues ...

  10. SAP Library

    G/L account assignments for the charts of accounts INT and the valuation grouping code 0001 are SAP standard. Activities. 1. Create account keys for each chart of accounts and each valuation grouping code for the individual posting transactions. To do so, proceed as follows: a) Call up the activity.

  11. SAP MM Account Determination

    The transaction key in MM-FI account determination is different from the transaction code. ... SAP Query is used to create reports for users who have little knowledge about SAP Table data storage structure. ... The valuation grouping code allows you to assign the same general ledger account assignments across several plants with Transaction ...

  12. MM, Multiple Account Assignment

    MM, Multiple Account Assignment | SAP Help Portal. 1909 FPS01 (Feb 2020) English. Favorite. Download PDF.

  13. Valuation Class in SAP MM

    Account assignment in SAP MM: Account Assignment category is a very relevant field available and utilized in the purchasing documents. It has various control functions and assists in managing the objects (e.g. sales order, cost center, project) that are charged within the case of a purchase order for material that is meant for direct usage or ...

  14. Account Assignment in Purchase Order

    Account Assignment in Purchase Order; Virtual Data Model and CDS Views. 2402.2. Available Versions: 2402.2 ; 2308.4 * * This product version is out of mainstream maintenance. The documentation is no longer regularly updated. ... If you do not have an SAP ID, you can create one for free from the login page. Log on

  15. Account Assignment Category MM

    This characteristic specifies account assignment category MM. Technical Data. Available as of Release — External Hierarchy

  16. SAP MM Account Determination

    Account modifier: differentiates account determination based on the procedure. OBYC MM-FI Account determination setup is stored in Table T030. OMJJ Movement Type is stored in Table T156X. You can combine these two tables via SQ00 query or Excel. The account modifier links the movement type to accounting entries.