SAP MM Book 1 Unit 3: Stock Material Procurement

purchasing conditions
agreements with vendors regarding prices, surcharges, and discounts
conditions are maintained while entering:
1. quotations
2. info records
3. outline agreements (contracts & scheduling agreements)
4. purchase orders
What types of conditions are used in purchasing?
1. conditions in a contract (apply to all contract release orders created with reference to the contract)
2. conditions in a purchasing info record (apply to all PO items that contain material and vendor in PIR)
3. general conditions (display price agreements that don’t apply to individual quotations, outline agreements, PO’s, and info records)
Time dependency of conditions
conditions can be time independent or time dependent
Time dependent conditions
only valid during a specific time period, and include conditions in info records, contracts, and general conditions
Conditions in PO’s are ___________________
Quotations and scheduling agreements are _________________
time independent OR time dependent. can use doc type to control this
contracts, info records, and general conditions are ____________
always time dependent
What do condition types map?
price factors such as gross price, discounts, freight costs, customs, taxes

ex of a condition type: ZA01, PB00, etc

Condition types determine_________
how a price factor is calculated and define the reference magnitude for scales (unit of scale value refers to quantity, item value, or weight)
Condition type categories
1. absolute
2. percentage
3. quantity dependent
access sequence
a search strategy that the system uses to define the sequence in which condition records for a condition type are read

can be assigned to condition type

calculation schema
-group of condition types that play a role in price determination

-provides framework for price determination by defining the sequence in which condition types are taken into account

-can define diff calculation schemas, like for individual purch orgs and vendors

calculation schema determines:
1. subtotals (no subtotals in time-dependent)
2. extent to which manual processing of price determination is possible
3. basis (reference level) on which the system calculates surcharges/discounts in percentages
4. prereqs that must be fulfilled so that a particular condition type is taken into consideration
RFQ and Quotation process
1. Enter an RFQ for the material or service to be procured. (manually, copied from another RFQ, or reference a purchase req or outline agreement)

2. Vendors send quotations or rejections. The vendor’s price and and deliv date specs are entered directly into original RFQ in a transaction for quotation maintenance. Makes RFQ–>quotation

3. determine the most favorable items or quotation using a quotation comparison. can also save the conditions for the shortlisted quotations in a PIR.

Collective Number
can link several RFQs that belong to a group using a collective number in header of RFQ. Alphanumeric up to 10 char.
One Time Vendor
-used to avoid making unnecessary master records
-cannot save vendor specific data in the master record for one time vendors
-use a one time account group
-have to enter other info like address for PO or bank info for invoice manually
-entered info is saved only in the relevant docs and not in the one time vendor master record
Quotation Entry and price comparison list
-enter and compare the info from multiple quotations simultaneously; displays best quotation for each material

-save quotation data for a material in a PIR; can do this automatically by setting the Info update checkbox during quotation maintenance on Item Details screen

Purchase orders with reference
-purchase req

item data and any existing header data is copied. can change most of it in the PO if necessary.

In document overview, you can display these purchase docs:
1. PO
2. Purch Reqs
3. RFQ’s
4. Contracts
Layout in the document overview
-display additional fields from column set or hide them
-arrange the fields
-create cross-user and user-specific layouts
-define one of your layouts as a default setting using the manage layout function
purchasing info records
provides the option of storing vendor and material info as the master data at purch org and plant level
you can define this info in PIRs:
1. current and future prices and conditions
2. delivery data (planned deliv time and over deliv/under deliv tolerances)
3. vendor data (such as contact person) and vendor specific data about the material
4. number of last PO
5. texts
text types that are stored in PIR
1. info record memo
internal comment that the system transfers to PO item. never printed on PO– just a note for the purchaser.

2. PO text
system uses this text to describe the PO item. system transfers it to PO item and prints it. can be in addition to or instead of text in material master.

data for PIR is divided as follows:
1. general (valid for a single client) and purchasing org specific data

general- vendor data, original data, PO unit, info record memo, admin data
purch org- control, prices, stats, PO text

2. purchasing org specific and plant specific data

purch org & plant- control, prices, stats, PO text

price determination
when you create a purch doc, system searches for a price.

when you create a PO, system searches for an info record for the vendor or material combo at purch org and plant level. if none, system searches at PO level. if no data again, must enter price manually.

*in the PO, valuation price from material master is not proposed as PO price*

price determination if PIR exists
-system determines prices based on existing VALID conditions
-if PIR doesn’t have conditions, or they’re all invalid, the system reads the number of the last purch doc in info record and proposes the price from that. buyer can change when making the PO.

*can define how system handles conditions from last PO in the default values for buyers (customizing)

these specs are available when transferring conditions from the last PO:
-conditions are always copied
-conditions are not copied if the price is entered manually
-conditions are never copied
creating a PIR
-you can manually create or change an info record for a purch org and plant
-can also create and update PIR automatically by setting the InfoUpdate checkbox when maintaining a quotation, PO, or outline agreement
these purchasing docs determine which updates are triggered by the InfoUpdate checkbox:
1. quotation
conditions are transferred to the info record

2. PO
a contract release order or scheduling agreement, the document and item number is updated as the last doc

3. contract
it’s important to know whether an info record already exists for the vendor material combo. when you create or change a contract, the system creates a PIR with the conditions from the contract if there are no existing PIRs for that combo of vendor/material/org level. if one already exists then it is not updated.

At plant level, you can specify whether or not ______________ are allowed.
plant-related conditions
InfoUpdate Checkbox
in the PO, it controls whether an inforecord is updated or created
if the infoupdate checkbox is set, these situations are possible:
1. if an inforecord exists at a purch org level or purch org and plant level, the info record is updated

2. if an info record exists with purch org data or purch org and plant data, the plant specific data is updated

3. if no info record exists and the plant condition req has been specified in customizing, the system creates an info record with a plant. otherwise, the system creates an info record without a plant

You need a ________________ for inventory managed material because…..
material master record; the quantity and value of the material stock and valuation price are updated in the material master record
material valuation
-determines and maintains the stock value of a material
-shows connection btw mm and fi because material valuation accesses and updates G/L accounts
stock value formula
stock value = stock quantity * material valuation price

so, stock value changes when stock q or val price change

material valuation is controlled by:
1. system settings (customization)
2. material master record
material valuation answers:
1. On which level are materials valuated?
2. Which types of goods movements are relevant for valuation? (movement type + material determine this)
3. Which accounts are posted to during a transaction? (settings for auto account determination establish this)
valuation area
organizational level at which material is valuated
you can decide whether the valuation area is determined at company code or plant level based on these conditions:
1. valuation area = company code
at cc level, valuation data of a material is created separately for each cc. price ctrl and valuation price of a material are valid for each cc, so the material is valuated consistently in all plants within the cc.

2. valuation area = plant (recommended)
at plant level, valuation data of a material is created per plant, and the price ctrl and valuation price of a material are valid for each plant. so, same material could be valuated differently in each plant.

material master record- accounting data
when entering acct data, must answer:
1. In which g/l account should the stock value of this material be managed?

2. Is the stock of a material valuated at a constant price, or should the price be adjusted to match the fluctuations of the cost price?

material type determines…
whether the material is to be valuated, whether stock needs to be managed on q and value basis, and whether this update can be controlled at valuation area level
valuation class characteristics
1. used to determine which stock account needs to be updated during goods mvmt of a material
2. valuation class combines materials for assigning g/l accounts so you don’t have to manage a separate stock account per material. seen in FI view of material master.
3. valuation classes for material depend on material type (configured in customizing). can also assign a valuation class to multiple material types.
procedures for material valuation
-the price control procedure set in the material master record determines the value used to valuate the GR of a material
-standard price OR moving average price
standard price (s)
-there are multiple stock postings to a price, which are determined in the material master
-variances to the standard price are posted to the price difference accounts
standard price formula
total value = standard price (per base unit of measure) * total stock
moving average price (v)
-system valuates GR’s with the PO price and GI’s with the current moving average price
-if there is sufficient stock coverage, differences btw the PO price and invoice are posted directly to the relevant stock account, changing the moving average price of the material
moving average price formula
total stock value / total stock quantity = moving average price
Debit ________ and credit _________ for goods receipts
stock; GR/IR clearing account

will have to debit or credit a price diff account sometimes with standard price

when incoming invoice is posted, GR/IR is cleared at order price and vendor account is updated at invoice price, then difference between order and invoice prices gets posted to a price differences account (if standard pricing); stock account or price diff acct if it’s a loss (if moving avg)

stock overview
analysis that delivers info about the stock situation of a material. displays stocks of material for each org level.

can display stock overview for batches or valuation type and special stocks (like consignment) and also the stock overview for org units.

valuated goods receipt
for GR’s, you decide which stock type a quantity is posted to. type is relevant to MRP and inv mgmt
you can post a GR for the warehouse into these stock types:
1. unrestricted
2. quality inspection stock (available from MRP perspective but no withdrawals for consumption possible)
3. blocked stock (not avail for MRP and no withdrawals– damaged or unsellable)
what can you do with quality inspection stock and blocked stock?
no consumption

can withdraw from one sample, scrap a quantity, or post an inventory difference

transfer postings stock to stock
-between stock types
-material doc generated
-no acct doc for stock to stock
docs generated at GR
-material doc
-acct doc if movement is relevant to valuation
how do we know if a GR is relevant to valuation?
when it affects acct dept. for ex, a GR posting of raw mat will increase stock, but if the raw mat is transferred within a plant, no postings are made in fi.
key effects of a goods receipt
1. update stock and value in material master
2. material doc
3. update stock and consumption accounts
4. QM
5. transfer req for WH mgmt (if active)
6. update PO and PO history
7. output (GR slip; optional)
8. notification of the orderer (optional)
Delivery costs
planned delivery costs
costs agreed upon before delivery with the vendor, freight forwarder, or customs office

costs have separate condition types in PO, and when you post the GR, the system makes postings to separate clearing accounts for those expenses

advantage: system includes them in the valuation of the material at the time of GR

unplanned delivery costs
costs not known at time of ordering, and are not entered until system posts incoming invoice

if needed, system will correct material valuations that happened at time of GR and balances out differences when invoice is received

Docs generated at Invoice Receipt
when you enter an invoice using LIV, a FI doc is generated in addition to the invoice doc in materials management
IVFI display
user parameter where you can enter the value x for the user in order to activate the display of both MM and FI doc numbers
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