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FI – MM Integration – Part I

This is first part of the series of posts discussing the FI-MM Integration where automatic determination of G/L accounts (for Material Management) is maintained in the system. Definition

When we speak about SAP, we must also talk about integration as we all are familiar with the integrated nature of SAP. Hence, today we will discuss about the integration of Material Management (MM) with Finance (FI) module.

In order to understand the integration, we first need to find answers of some questions:

A) What are automatic postings in MM-FI Integration?

Postings are made to G/L accounts automatically in the case of Invoice Verification and Inventory Management transactions relevant to Financial and Cost Accounting.

Example:

Posting lines are created in the following accounts in the case of a goods issue for a cost center: o   Stock account o   Consumption account

B) How does the system find the relevant accounts?

When entering the goods movement, the user does not have to enter a G/L account, since the ERP system automatically finds the accounts to which postings are to be made using the following data:

Chart of accounts of the company code If the user enters a company code or a plant when entering a transaction, the ERP system determines the chart of accounts which is valid for the company code. You must define the automatic account determination individually for each chart of accounts.

Valuation grouping code of the valuation area If the automatic account determination within a chart of accounts is to run differently for certain company codes or plants (valuation areas), assign different valuation grouping codes to these valuation areas. You must define the automatic account determination individually for every valuation grouping code within a chart of accounts. It applies to all valuation areas which are assigned to this valuation grouping code. If the user enters a company code or a plant when entering a transaction, the system determines the valuation area and the valuation grouping code.

Transaction/event key (internal processing key) Posting transactions are predefined for those inventory management and invoice verification transactions relevant to accounting. Posting records, which are generalized in the value string, are assigned to each relevant movement type in inventory management and each transaction in invoice verification. These contain keys for the relevant posting transaction (for example, inventory posting and consumption posting) instead of actual G/L account numbers. You do not have to define these transaction keys, they are determined automatically from the transaction (invoice verification) or the movement type (inventory management). All you have to do is assign the relevant G/L account to each posting transaction.

Account grouping (for offsetting entries, consignment liabilities, and price diff.) Since the posting transaction “Offsetting entry for inventory posting” is used for different transactions (for example, goods issue, scrapping, physical inventory), which are assigned to different accounts (for example, consumption account, scrapping, expense/income from inventory differences), it is necessary to divide the posting transaction according to a further key: account grouping code. An account grouping is assigned to each movement type in inventory management which uses the posting transaction “Offsetting entry for inventory posting”. Under the posting transaction “Offsetting entry for inventory posting”, you must assign G/L accounts for every account grouping, that is, assign G/L accounts. If you wish to post price differences to different price difference accounts in the case of goods receipts for purchase orders, goods receipts for orders, or other movements, you can define different account grouping codes for the transaction key. Using the account grouping, you can also have different accounts for consignment liabilities and pipeline liabilities.

Valuation class of material The valuation class allows you to define automatic account determination that is dependent on the material. for example: you post a goods receipt of a raw material to a different stock account than if the goods receipt were for trading goods, even though the user enters the same transaction for both materials. You can achieve this by assigning different valuation classes to the materials and by assigning different G/L accounts to the posting transaction for every valuation class. If you do not want to differentiate according to valuation classes you do not have to maintain a valuation class for a transaction.

Background As discussed above, we all know that SAP is highly integrated and creates all the financial documents automatically. In order to automate the financial posting related to Material Management, it becomes very important to map the G/L Accounts to appropriate transactions. The G/L account mapping in this case has to cater a lot of transactions, please keep reading for complete information.

Transaction Code: OBYC

IMG Path: Materials Management > Valuation and Account Assignment > Account Determination > Account Determination Without Wizard > Configure Automatic Postings

Once you type this code and press enter or use the IMG Path, system will navigate you to the screen which contains a list of Transactions. Before going ahead with individual transactions, lets understand first three radio buttons available in every transaction.

Posting key Button This button contains the Posting Key that will be used to Debit/Credit the account when that particular transaction is executed.



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Rules Button  This button contains some important options, Valuation Modifier and Valuation Class.

Valuation Modifier Select this radio button to enable assignment of different G/L accounts for different plants by activating the field Valuation Modifier for Account assignment.

Valuation Class Select this radio button to enable assignment of different G/L accounts for different valuation classes by activating the field Valuation Class for Account assignment. In case of transactions like freight where one G/L account is to be assigned to all valuation classes, do not activate this radio button. This will save your time of assigning same G/L account too all the valuation classes.

Select the appropriate option as per your requirement and proceed further.



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Accounts Button This is the button where all the G/L accounts are to be assigned for FI-MM Integration. This button contains, the options to enter G/L accounts based on the radio buttons selection under Rules button.



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Note: Activation/deactivation of any of the above options has to be done very very carefully. In case of transactions where G/L accounts are already assigned, activation/deactivation of these resets the assigned G/L accounts. Hence, if any such thing is to be done, first note down the already assigned G/L accounts.

Once Posting Keys and Rules are done, we will discuss about the majorly use transactions in this integration in the next post.

Part II

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