cts final mm trg day3

SAP MM TRAINING ENDEVOUR FROM SAP COE - MM

ENDEVOUR FROM SAP COE - MM

Compiled by: Kalidas K.Date: 16-06-2011Venue: Pune

SAP MM ARCHITECTUREPart-III

© 2011 Cognizant Technology Solutions All Rights Reserved; For Private Circulation Only

ENTERPRISE RESOURCE PLANNING - SAP

Conducted by : Mohammedniyas


SAP MM Basics Pg: # 2 © 2011 Cognizant Technology Solutions

All Rights Reserved; For Private Circulation Only

Split valuation.

Vendor Consignment.

Material valuation

Agenda Topics of Discussion




Split Valuation

To have different prices for the same material in a Plant, Split valuation function is used .

Reasons for having different price

Different origins of the material

Different grades of quality for the material

Different statuses for the material

Differentiation between in-house production and external procurement




Configurations for Split valuation

Activating the Split valuation

Creation of Valuation category

Creation Of valuation Types

Linking Valuation category to valuation type

Activate the Valuation categories to Plant




The valuation category specifies which criterion should be

used as the basis for differentiating between the various

partial stocks.

The standard system contains several default valuation categories, for example:B for procurement type

The stock is divided up according to whether the material is manufactured in-house or procured externally.H for origin

Valuation category




There are valuation types for each valuation category, which

specify which individual characteristics exist for that

valuation category. Each valuation type represents the name

of a sub-stock

Valuation Type




ConfigurationIMG: Material Management > Valuation > Split Valuation

1. Activate Valuation – T.code OMW0

Split valuation function Configuration

Configure Split Valuation – T.code OMWC




Creation of valuation category

Split valuation configuration




Linking Valuation category to valuation type





Linking Valuation category to Plant





Activating split valuation in material

.





Consignment process is process in which the vendor

provides materials and stores them on your premises.

The vendor remains the legal owner of the material until

you withdraw materials.

Consignment stocks are considered as special stocks in

SAP, when the material is withdrawn it is valuated at the

price of the respective vendor

Consignment Process




Before you can order a material from a vendor or post a goods receipt to consignment stock, you must maintain the consignment price for the vendor in an info record. The price is required for material valuation and accounting purposes.

If you order consignment material from several vendors, the system maintains the consignment stock separately for each vendor, since the individual quantities of the material can have different prices with each vendor.

Pricing for consignment stocks




A withdrawal from the consignment results in the following updates in the

system:

The consignment withdrawal results in a vendor liability that must be

settled.

A consumption history is updated.

No need to expect an invoice from the vendor for goods withdrawals from a pipeline. Instead settle for the posted withdrawals and return deliveries ourselves and send the vendor a statement of the settlement. The following documents can be involved:

Invoices Credit memos

Consignment settlement




Material Valuation

Material Valuation depends on the following parameters:

Valuation Level – Valuation Area

Material – Accounting Data

Price Control in material master – Standard Price or Moving Average Price




Valuation Area

SAP AG 1999

3000

Company code Plant

Valuation areaValuation area

Valuation Area

............ ............

................ ........

........




Valuation level

Valuation Area at company code level:

If the valuation area maintain at company code level then the valuation price of the material is the same in all of the plant maintain in the company code.

Valuation Area at Plant level:

If the valuation area maintain at plant level then the valuation price of the material can be different in each of the plant maintain in the company code.

So SAP recommends that maintain the valuation area at plant level so that we can differentiate the valuation price of the material in each and every plant. As well as valuation area at plant level is mandatory if you want to use either of the production planning or product cost accounting components or if the system is a Retail system.

Note: Once if the valuation level defined in the customizing and it is very difficult to reverse




Transactions involved in material valuation

Transactions in Inventory Management that affect Accounting are: Goods Receipts Goods Issues Stock Transfer and Transfer Posting

These transactions can change the valuation price of the material, depending on the type of price control.

Postings in Invoice Verification can also affect Material Valuation.




Transactions involved in material valuation

SAP AG 1999

Valuation of Goods Movements

SAP AG 1999

Valuation of Goods Movements

Initial entry of stock balances:Receipts are valuated at the current material price or using another amount specified externally.

Initial entry of stock balances:Receipts are valuated at the current material price or using another amount specified externally.

Goods receipt for purchase order:Receipts are valuated at the order price (GR before IR) or at the invoice price (IR before GR).

Goods receipt for purchase order:Receipts are valuated at the order price (GR before IR) or at the invoice price (IR before GR).

Goods issue:Issues are valuated at the current material price (or using another amount specified externally).

Goods issue:Issues are valuated at the current material price (or using another amount specified externally).

Free delivery:The value of receipts is zero.

Free delivery:The value of receipts is zero.




Types of Price control in material valuation

SAP AG 1999

Price control(in material master)

“S”Standard price

“V”Moving average price

Material valuationMaterial valuation

Material Valuation Procedures




Moving Average price

Moving Average Price:

In the moving average price procedure (price control “V”), the system valuates goods receipts with the purchase order price and goods issues with the current moving average price. The system automatically calculates the latter upon every goods movement by dividing the total value by the total stock quantity. Differences between the purchase order price and the invoice are posted directly to the relevant stock account if there is sufficient stock coverage.

Generally SAP suggests that maintain the price control MAP (V) for the raw material and semi finished material and it vary depends on the business scenario.

The formula to calculate the MAP (V) is MAP = Total Value/Total Stock




Standard price

Standard Price:

In the standard price procedure (price control “S”), the system carries out all stock postings at a price defined in the material master record. Any variances are posted to price difference accounts.

All goods issues, such as issues to a production order, are valuated at the same standard price. This allows better analysis of the costs of production orders.

Generally SAP suggests that maintain the price control Standard price (S) for the finished goods and it vary depends on the business scenario.

The material price can be changed if required generally using MR21 transaction




Standard price Scenario

Steps Transaction Stock Total Value (INR)

Standard Price (INR)

MAP (INR)

1 Start of the scenario 100 200 2.00 2.00

2 GR for PO: 100 @ 2.40 200 400 2.00 2.20

3 IR for PO: 100 @ 2.20 200 400 2.00 2.10

After GR is done for the above PO. Then the system generated the following accountsafter GR Posting Stock account - 200.00 INR (D) GR/IR account – 240.00 INR (C) Price difference account (Expense account) – 40.00 (D)




Standard price Scenario

After posting the IR system has generated the following accounts: Vendor account – 220.00 INR (C) GR/IR account – 240.00 INR (D) Price Difference account – 20.00 INR (C) The price difference account 20.00 INR has been credited because IR amount is 220 INR instead of240 INR so the remaining amount 20 INR credited to the price difference account.




Moving average price Scenario

Steps Transaction Stock Total Value (INR)

Standard Price (INR)

MAP (INR)

1 Start of the scenario 100 200 2.00 2.00

2 GR for PO: 100 @ 2.40 200 440 2.00 2.20

3 IR for PO: 100 @ 2.20 200 420 2.00 2.10

I have done the GR for the above PO. Then the system generated the following accountsafter GR Posting Stock account - 240.00 INR (D) GR/IR account – 240.00 INR (C)




Moving average price Scenario

After GR the material master record updated like below Initially the material stock was 100 and the price was 2.00/PCS and the GR happened for

100 quantities with the price 2.40/ Pcs. So now the stock is 200 (100+100) and the total value is 440 (200+240). So the MAP is calculated based on the formula

MAP = 440.00/200.00 = 2.20

After posting the IR system will generates the following accounts: Vendor account – 220.00 INR (C) GR/IR account – 240.00 INR (D) Stock Account – 20.00 (C)The stock account 20.00 INR has been credited because IR amount is 220 INR instead of240 INR so the remaining amount 20 INR credited to the stock account.

MAP = 420/200 = 2.10




IT’S TIME FOR DISCUSSION………..

Open House !!!




Questions & Answers

Thank you !

cts final mm trg day3

Documents

sap coe mm2split valuation

origin valuation category

split valuation t

substock valuation type

default valuation categories

code omwc sap

cognizant technology

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