SAP – Flashcard

Inventory and warehouse management processes are concerned with the storage and movement of materials within an organization. They are closely related to the procurement, fulfillment, and production processes.

Four goods movements are involved in inventory management: goods receipt, goods issue, transfer postings, and stock transfers.

a movement of materials into inventory, which results in an increase in inventory. Goods receipt occurs in both the procurement and production processes (provide an example for each process). Goods receipts for both the procurement and production processes result in the creation of a material document and a financial document. The material received for both processes is stored in the appropriate storage location with the appropriate status such as unrestricted use or in quality inspection. It is not uncommon to post a goods receipt without reference to an order in scenarios such as unplanned receipt from vendors or unplanned returns from customers.

results in a decrease in inventory. a goods issue occurs in both fulfillment and production, (provide an example for each process). A goods issue can be unplanned; for example, issuing materials to scrap, sampling, or using the material for internal consumption.

is used to change the status or type of materials in stock. The four common stock statuses are unrestricted use, in quality inspection, blocked, and in transit. A transfer posting need not include a physical movement of materials. A transfer posting could take place as a result of changing the material number of a material, which is a material-to-material posting, or consignment, an arrangement in which materials are stored at a customer's facilities although the vendor retains ownership. In the case of consignment, when the ownership changes from vendor to customer, there is a financial impact.

are used to physically move materials within the enterprise from one organizational level or location to another. A stock transfer can take place between storage locations within one plant, between plants in one company code, and between plants in different company codes. Regardless of the organizational levels involved, however, three options are available for moving materials: one-step procedure, two-step procedure, and using a stock transport order.

issue (removing materials from storage at the supplying location) and receipt (placing the materials into storage at the receiving location). In the one-step procedure both tasks — removing and placing the materials —as well as the recording are executed simultaneously. the one-step procedure is typically used when two locations are physically close to each other and there is no significant time gap between issue and receipt.

issue and receipt are performed in two separate steps.

there is a time lag between the two steps, for example, when the locations are geographically separated by distance. A material document is created during both the one-step and two-step procedures. In the one-step procedure, one material document is created. During the two-step procedure, two material documents are created, one at the time of issue and one at the time of receipt.

Companies use this option when materials are placed in a temporary location before being moved to a permanent location within the same plant. The transfer within the plant can be accomplished via the one-step or two-step procedure. In the one-step procedure, the materials can be in any stock status in the supplying location and can be moved into any stock status in the receiving location. In contrast, the two-step procedure can be executed only when the materials are in unrestricted use at the supplying location. When the first step (removal) is posted, the quantity in unrestricted use in the supplying location is reduced, and a corresponding increase is noted in the receiving location.

Again, both the one-step and two-step procedures can be used. Typically, only materials in the unrestricted use status can be moved between plants. the difference between the one-step and two-step procedure is the stock status at the receiving plant. In the one-step procedure the materials are placed in unrestricted use at the receiving plant. In contrast, in a two-step procedure, the materials are placed in the stock in-transit status at the receiving location after the first step (issue) and then changed into unrestricted use when the materials are actually received.

A plant-to-plant transfer represents a change in the value of the materials. Consequently, there is a FI impact, and an FI document is created.

Once again, this type of transfer can be accomplished via the one-step or two-step procedure. Because each plant has a different company code, two FI documents are created, one for each company code. The FI document contains one line item for the material account and another (offsetting) line item for a clearing account created to accommodate such a transfer.

• They cannot take into account the cost of transporting materials between plants, • They cannot track the progress of the transfer, and • Valuation can be based only on the book value of the materials at the sending plant and not a negotiated value or price between plants.

In this process, one plant essentially "purchases" the materials and another plant "sells" them. An STO is very similar to a purchase order in the purchasing process, except that it is used for plant-to-plant movements.

i. Within the same plant ii. Between plants under the same company code iii. Between plants under different company codes

i. One step ii. Two step iii. Stock Transport Orders

1. Without delivery 2. With delivery 3. With delivery and billing

the key organizational data in warehouse management is the warehouse. A warehouse is associated with one or more combinations of plant and storage location. the association between storage locations and a warehouse provides the linkage between IM processes and WM processes. a warehouse is divided into a hierarchy comprised of storage areas, storage sections, and storage bins.

a division of a warehouse based on the characteristics of the space, materials, or activity. space in the warehouse can be divided into storage types based on how the materials are stored, such as hazardous material or material requiring a specified temperature. the assignment of storage locations to a warehouse links IM activities to WM activities. interim storage areas represent the physical links between IM and WM.

groups bins with similar characteristics such as fast-moving, slow-moving, heavy, light, large, and small. Fast-moving items are usually located close to the receiving and shipping areas. Heavy and bulky materials are placed in lower shelves, and lighter and smaller materials are stored in higher shelves. Each storage type must have at least one storage section.

is a division of a storage area based on removing or picking materials. A picking area groups storage bins based on similar picking strategies. For example, picking areas can be assigned to specific employees who are responsible for picking from specified bins.

The warehouse management unit of measure, which can be different from the base unit of measure. A material can have a base unit of measure in single units (e.g., one helmet) but be managed in larger quantities (e.g., box of 24 helmets) in the warehouse.

Storage bins are the smallest unit of space in a warehouse; they are the containers in which materials are physically stored. Storage areas can vary in size depending on the size of the materials. Storage bins have unique addresses that identify their location in a warehouse. These addresses are frequently based on a coordinate system.

A storage bin can be used to store different materials. To distinguish between quantities of different materials, the materials with the same characteristics are grouped into quants. A quant is a specific quantity of materials that have similar characteristics and are stored in a single bin. Point out that quants are created as needed by the ERP system when materials are moved into bins. After a quant has been created, the quantity of materials can be increased or decreased only by a goods movement. When the quantity is reduced to zero, the system automatically deletes the quant. One material can exist in different storage bins with different valuation.

Warehouse management is triggered by a goods movement in another process, such as procurement, fulfillment, production, and inventory management. A goods movement in inventory management automatically generates a transfer requirement. Transfer requirements are used to plan the movement of materials in and out of a warehouse. The actual execution of the movement is accomplished via a transfer order. After a transfer order is created, the materials are physically moved between interim storage areas and the storage bins, to complete put-away or picking activities. Identifying the source and destination bins is necessary to execute a WM transfer. The destination bin is often determined automatically by the ERP system. It can also be provided by the individual who is executing the transfer. After the materials have been moved from source bins to destination bins, the confirm warehouse movement step is executed. This step uses the same data concerning the materials from the transfer order in the execute warehouse movement step.

Confirming the movement involves updating the transfer order to indicate that the movement was completed. The outcome of the confirm warehouse movement step is to record the confirmation of a warehouse movement. The ERP system automatically updates the associated reference documents such as the delivery document, transfer requirement, and posting change notice to reflect the fact that the transfer of materials has been completed.

a request to change the status of the material, for example, from in quality inspection to unrestricted use. Posting change notices can be created either manually or automatically by the ERP system as a result of a transfer posting in inventory management.

is concerned with recording the financial impacts of business processes as they are executed. These data are then used to generate financial statements to meet legal or regulatory reporting requirements. These statements are directed toward external audiences such as regulatory bodies; for example, the SEC

is internally focused, providing the information needed to effectively manage the company's various business processes. CO reports focus on the costs and revenues that management uses to achieve the business objectives of increasing revenues, minimizing costs, and achieving profitability.

The general ledger is used to record the financial impacts of business process steps. It contains much of the data needed for financial reporting

AR accounting is associated with the fulfillment process and is used to manage money owed by customers for goods and services they have purchased.

AP accounting is associated with the procurement process. Companies use AP accounting to record and manage money owed to vendors for the purchase of materials and services

Asset accounting is used to record data related to the purchase, use, and disposal of assets such as buildings, equipment, machinery, and automobiles.

Bank ledger accounting is concerned with recording data associated with bank transactions.

The key organizational data in financial accounting are client, company code. and business area. The client is the highest organizational level; it represents an enterprise that consists of multiple companies. These companies in turn are represented by company codes. Business areas are internal divisions of an enterprise that are used to define areas of responsibility or to meet the external reporting requirements of an enterprise segment. Financial statements are generated for each business area within the enterprise.

The general ledger is used to record the financial impacts of business process steps. It therefore contains much of the data needed for financial reporting. The chart of accounts is an ordered listing of accounts that comprise a company's general ledger.

Subsidiary ledgers are accounts that are not directly maintained in the general ledger; for example, accounts that track the amounts owed to customers and the payments made for each customer. Reconciliation accounts are general ledger accounts that consolidate data from a group of related sub-ledger accounts, such as customers (accounts receivable) and vendors (accounts payable). Data cannot be posted directly into a reconciliation account. Rather, they must be posted to sub-ledger accounts, at which point they are automatically posted to the corresponding reconciliation account.

An accounting document (FI document) records the impact (financial data) of a transaction step on financial accounting.

A self-contained, organizational unit for which the management of revenues and expenses can be performed May include one or more company codes; therefore, an enterprise can perform management accounting analyses and reports across several companies A way to identify and track where revenues and costs are incurred for evaluation purposes

Responsible for revenue generation and cost containment Evaluated on profit or return on investment

Region Function Product Cost Center Responsible for cost containment, not responsible for revenue generation One or more value-added activities are performed within each cost center.

A one-to-one linkage (mapping) between General Ledger expense accounts and CO cost elements is established to permit the transfer of FI expense information to CO. Postings in FI that impact cost accounts lead to a posting in CO to a cost element.

= cost element - just different words depending on whether FI object or CO object.

Originate in the General Ledger within FI and are automatically transferred to CO when an FI transaction is recorded in the General Ledger

Used exclusively in CO for allocations and settlements between and amongst cost centers

Provide the foundation for accurate and effective cost allocations between cost objects support internal cost allocations involving allocations, assessments, and distributions Examples: number of employees square footage minutes of computer usage

uses the original cost element for allocating cost to the sender cost center. Thus on receiving cost center we can see the original cost element from the sender cost center. Distribution only allocates primary cost.

uses ONE assessment cost element to allocate cost. Thus various costs are summarized under a single assessment cost element. In receiver cost center the original cost breakup from sender is not available.

both primary as well as secondary cost.