Shrini Damarla

SAP MM 2020

SAP Material Management

Workbook - II
SAP Material Management Workbook - II

TABLE OF CONTENT

1. Inventory Management Overview ………………………………………………………………..

1.1. Goods movement ……………………………………………………………
1.2. Types of Goods movement ……………………………………………………………
1.2.1.Goods Receipt (GR) ……………………………………………………………
1.2.2.Goods Issue (GI) ……………………………………………………………
1.2.3.Stock Transfer……………………………………………………………
1.2.4.Transfer Posting……………………………………………………………
1.3. Result of Goods movement. ……………………………………………………………
1.4. Document concept: ……………………………………………………………
1.5. Document type in Inventory management……………………………………………
1.6. Movement Type ……………………………………………………………
1.7. MIGO Transaction code ……………………………………………………………
2. Tcodes in Inventory Management ……………………………………………………………
3. Inventory Management IMG settings ……………………………………………………………
3.1. Plant Parameters ……………………………………………………………
3.2. Define Number Assignment for Material and Phys. Inv. Docs ……………
3.3. Define Number Assignment for Accounting Documents ………………………………
3.4. Before GR and After GR……………………………………………………………
4. Goods Receipt ………………………………
4.1. Goods Receipt - Un-restricted stock type………………………………
4.2. Goods Receipt - QI stock type………………………………
4.3. Goods Receipt - Blocked stock type………………………………
4.4. Goods Receipt - Blocked………………………………
4.5. Release of GR-Blocked stock………………………………
4.6. Goods Receipt – Others………………………………
4.7. GR others - Initial stock entry - by using MB1C………………………………
4.8. GR others - Initial stock entry - By using MIGO………………………………
4.9. GR others - W/o PO………………………………
4.10. GR - Single line item - partial quantities in to multiple stock types……………
5. Stock transfer………………………………
5.1. Intra Company Stock transfer ( With in the Co_cd ) ………………………
5.1.1.Str. Loc. - to – Str. Loc. ………………………………
5.1.1.1. One step method………………………………
5.1.1.2. Two step method………………………………
5.1.1.2.1. Rem. from str. Loc . ………………………………
5.1.1.2.2. Placing into str. Loc . ………………………………
5.1.2.Plant - to - Plant………………………………
5.1.2.1. One step method………………………………
5.1.2.2. Two step method………………………………
5.1.2.2.1. Rem. from str. loc…
5.1.2.2.2. Placing into str. loc…
5.1.3.Inter Company Stock transfer (Between Co_cd) ………………………………
5.1.3.1.1. Co_cd - to Co_cd………………………………
6. Transfer Posting …………………………
6.1. Un-restricted to Blocked …………………………
6.2. Blocked to QI stock type …………………………
6.3. QI Stock type to U/R …………………………
7. Goods Issue: …………………………
7.1. Goods Issue - (To Cost Centre) …………………………

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8. Reservation
8.1. What is Reservation?
8.2. How to reserve a reservation document?
9. Logistic Invoice Verification ……………………………………………..
9.1. IMG settings: LIV …………………………………………………………
9.2. Maintain Number Assignments for Accounting Documents ………………………………
9.3. Maintain Number Range Intervals for Invoice Documents ………………………………
9.4. Tax settings: LIV…………………………………………………………
9.4.1.Check Calculation Procedure …………………………………………………………
9.4.2.Assign Country to Calculation Procedure ………………………………………………
9.4.3.Define Tax Codes for Sales and Purchases ………………………………………
10. Logistic Invoice Verification ……………………………………………
10.1. Check Points …………………………………………………………
10.2. How to do the Invoice verification …………………………………………………………
10.3. Observations …………………………………………………………

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Inventory Management
Inventory Management Overview

• Inventory Management is a part of a Material Management module.

• Inventory management means managing the material stock by maintaining the proper records
or material movements.
• Inventory management works on two ways
o On Qty. updating (at store location)
o On Value updating (at A/c)
• Inventory Management is fully integrated with PP, SD, QM, FI/CO

Goods movement

There will be a transaction resulting in a change in stock.

Types of Goods movement

• Goods Receipt (GR)

• Good Issue (GI)
• Stock Transfer
• Transfer posting

Goods Receipt (GR)

It is a goods movement, with which the receipt of the goods from vendor or production is posted.
A good receipt leads to an increase in warehouse stock

Goods Issue (GI)

It is also a good movement, with this

• Material with drawl

• Material Issue
• Material consumption
• Shipment of goods to a customer - is posted

A goods issue leads to a reduction in warehouse stock

Stock Transfer

• It is also one more goods movement

• It means removal of material from one storage location (or plant) to other storage location (or
other plant) with in or between company codes

Transfer Posting

• It is a general term for changes in stock type or stock category or stock status of a material
• Transfer posting from material to material
• Release from quality inspection stock

[Note: It is irrelevant whether the posting occurs in connection with Phy. movement or not]

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Result of Goods movement.

When you enter a goods movement

• A Material document is created

• If the movement is relevant for financial a/c accounting document will also be created
• Stock quantities of the material are updated
• Stock value of the material master is updated
• Depending on the movement type additional updates are also carried out like in case of good
issue for cost center the consumption values of the items are also updated.

Document concept:

• The account principle of ‘No posting without document” is applies even IT based Inventory
management system
• A document is a proof that a transaction involving stock changes has taken place
• When a good movement is posted, a Material Document is generated as a proof of the
movement.
• If the movement is relevant to the financial accounting (i.e. if it is leads to an update of G/L
accounts) an accounting document will be generated parallel to the material document.

Material Document consists of Accounting Document consists of

Document Header Document Header
Posting date posting date
Name of he person who created Document currency
At item level At item level
Quantity G/L Account no
Storage location Associated amount posted
Plant, Movement type

Note: The Material and Accounting Documents are independent documents

Document type in Inventory management:

WA – Goods Issue
WE – Gross Goods Receipt
WN – Net Goods Receipt
WI – Physical Inventory Document
WL - Transfer posting

Movement Type

• It is a three digit identification key

• In order to differentiate various goods movements movement type is used
• Movement type has an important control function in Inventory Management
o Updating the quantity fields
o Updating the stock and consumption accounts
• Determining which fields are to be displayed during the entry of a document in a system

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• Example of Movement types are

Movement type Description of the goods movement

101 Good receipt for PO
103 Good Receipt + Blocked stock (GR Blocked)
105 Releasing from GR blocked
122 Return to vendor/supplier
124 Return to vendor from blocked stock
201 Goods Issue for a cost center
301 Stock transfer from plant to plant with 1st step
303 Stock transfer from plant to plant with 2 step - issue
305 Stock transfer from plant to plant with 2 step - receiving

Note1: Movement type + 1 = reversal

Note2: for 121 – no reversal movement type

MIGO Transaction code

It is meant for

• Goods Receipt
• To display of material document
• Goods Issue
• Releasing of GR Blocked stock
• Place in storage
• Removal from storage
• Cancellation of material document

Tcodes in Inventory Management

1. Material documents
a. MB51 – List of Material documents
b. MR51 – List of Accounting documents
2. Stock
MMBE – Stock Overview MB52 -- Warehouse Stock
MB53 – Plant Stock Availability MB5B – Stock between Posting Dates
MB5T – Stock in Transit MBLB – Stock with Subcontract Vendor
ME2o -- Stock provided to the vendor MB50 -- Total Stock all materials
MB5S -- List of GR/IR balances

3. MB1A – Goods Issue

4. MB1B – Transfer Posting
5. MB1C -- Good Receipt

6. Layouts:
a. ME9F -- PO Printout
b. MB90 -- Output from Goods Movements
c. ME9A -- RFQ Printout
d. ME9E -- Schedule Agreement Printout
7. Reports:

a. ME80FN – General Analysis PO Report

b. MC48 -- Current Inventory
c. MC45 -- Consumption Value

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Inventory Management IMG settings

1. Plant Parameters

SPRO→IMG →Materials Management →Inventory Management and Physical Inventory →Plant

Parameters
• System displays list of plants with their parameters
• Check your plant entry in this table
o click position
o Enter Plant = XPL1
o If your plant entry available
▪ No need to do any thing
o Else
▪ Select SAP std. Plant 0001
▪ Click copy as
▪ Your XPL1 Plant parameters
o Click saves
• repeat the same for your plant 2

2. Define Number Assignment for Material and Phys. Inv. Docs (OMBT)

SPRO→IMG→Materials Management →Inventory Management and Physical Inventory →Number

Assignment →Define Number Assignment for Material and Phys. Inv. Docs

• Click pencil marked group button

• On Menu bar→Groups→insert or F6

o Enter Grp. name text as 'XMOT GR NR grp'

Year Frm. To Currno. Ext
2015 XXX XXX. 0
o Click save
• Assign WE Doc type to your NR grp
o Double click WE color of WE change into blue
o Check the Check box of your GR NR grp.
• click 'Element/group' button on application tool bar or F5
• Save and transport it manually
• Repeat the same steps for WA and PI docs

3. Define Number Assignment for Accounting Documents (OMBA)

SPRO→IMG→Materials Management →Inventory Management and Physical Inventory →Number

Assignment →Define Number Assignment for Accounting Documents

• click 'Financial A/c doc types' button

• System displays the list of Doc types
• click position
• enter your doc type = WE
• Select WE doc type
• Click details button on appl. tool bar
• System displays WE doc Details
• Click 'Number range information' button
• Enter your company Code….. XMOT
• Click Pencil marked interval button
• System displays a list Number range for every doc grp name year wise
• Check for an entry of Number range
o 50 with year 2013

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o If this entry not available

▪ Click + interval
▪ Create 50 with year 2013 a number range
o Else
▪ no need to do any thing
• Click save and transport it manually

3. Set Tolerance Limits (OMC0)

SPRO→IMG→Materials Management →Inventory Management and Physical Inventory →Goods

Receipt →Set Tolerance Limits

SAP std. Tolerance keys are three

B1 Order price qty. variance (GR)/E-MSG
B2 Order price qty. variance (GR)/W-MSG
VP Moving average price variance
• In this steps SAP provides The 3 TL keys for every co_cd in this table
• Check Your Co_cd is having the above 3 TL Keys or not?
o Click Position
o Enter Company Code ASMT
o If your co_cd does not have these 3 TL keys
▪ Copy the same from existing SAP Std. Co_cd
o Else
▪ No need to do any thing

Before GR After GR
In Material Master Record (MM03) In Material Master Record (MM03)
- No new View will be Created - A new View Storage loc. will be Created
No Material and A/c Documents will be created one Material and one A/c Documents will be
created
No Updates in Stock status (MMBE) Updates in Stock status (MMBE)will be done
By increasing the Quantity of the material
In Purchase Order (ME23N) In Purchase Order (ME23N)
- In Header Data – Status tab: - In Header Data – Status tab:
Ordered Qty. – X Nos. Ordered Qty. – X Nos.
Delivered Qty. – 0 Nos. Delivered Qty. – Y Nos.
Still to be delivered Qty. – X Nos.
Still to be delivered Qty. – (X-Y) Nos.
- In Item Details - In Item Details
Delivery Tab Delivery Tab
 No check on Deliver completion
indicator check on Deliver completion indicator
- No New Tab: PO History will be created (If the full Qty. received)
- New Tab: PO History will be created with GR
updated details

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Goods Movements
Goods Movements are 4 types

A. Goods Receipt (GR)

B. Goods Issue (GI)
C. Stock Transfers (ST)
D. Transfer Postings (TP)

A) Goods Receipt:

Goods Receipt can be made in the following ways

GR w.r.t PO
1. Goods Receipt - Un-restricted stock type
2. Goods Receipt - QI stock type
3. Goods Receipt - Blocked stock type
4. GR - Partial quantities in to multiple stock types
5. GR – Multiple POs from SAME vendor
6. GR – Multiple POs from Multiple vendors
7. Goods Receipt - Blocked
8. Release of GR-Blocked stock

GR - W/o PO
9. GR - W/o PO - Initial stock entry – Before Go-live
o GR - W/o PO - Initial stock entry – into Un-restricted stock type
o GR - W/o PO - Initial stock entry – QI stock type
o GR - W/o PO - Initial stock entry – Blocked stock type

10. GR - W/o PO – Auction stock entry – After Go-live

o GR - W/o PO - Auction stock entry – into Un-restricted stock type
o GR - W/o PO - Auction stock entry – QI stock type
o GR - W/o PO - Auction stock entry – Blocked stock type

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1. Goods Receipt - Un-restricted stock type

Steps:

• Use Tcode = MIGO

• Option: Goods Receipt
• Sub Option: Purchase Order
• MVT: 101 (GR w.r.t PO into Stores)
• PO No : xxxxxx.

System Display PO details in to MIGO

Stock Type: U/R Stock Type (default)
Check ‘OK’ check box
Click ‘check’ button on application to bar Observations:
System validate your entries 1. One Material document will be created
If No Error 2. One A/c document will create and
Sys Display ‘Document OK’ Message Trigger the following G/L accounts
If Error occurs
Solve it G/L account Description
Click save or Post 300000 Inventory of Raw mat +ve
191100 GR/IR Clearing A/c -ve

3. Stock Status
Org Unit U/R Stock qty. On order
Plant Increased Decreased
Str. loc. Increased Decreased

2. Goods Receipt – QI stock type

Steps:

• Use Tcode = MIGO

• Option: Goods Receipt
• Sub Option: Purchase Order
• MVT: 101 (GR w.r.t PO into Stores)
• PO No : xxxxxx.

System Display PO details in to MIGO

Stock Type: QI Stock Type
Check ‘OK’ check box
Click ‘check’ button on application to bar Observations:
System validate your entries 1. One Material document will be created
If No Error 2. One A/c document will create and
Sys Display ‘Document OK’ Message Trigger the following G/L accounts
If Error occurs
Solve it G/L account Description
Click save or Post 300000 Inventory of Raw mat +ve
191100 GR/IR Clearing A/c -ve

3. Stock Status
Org Unit QI Stock qty. On order
Plant Increased Decreased
Str. loc. Increased Decreased

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3. Goods Receipt - Blocked stock type

Steps:

• Use Tcode = MIGO

• Option: Goods Receipt
• Sub Option: Purchase Order
• MVT: 101 (GR w.r.t PO into Stores)
• PO No : xxxxxx.

System Display PO details in to MIGO

Stock Type: Blocked Stock Type
Check ‘OK’ check box
Click ‘check’ button on application to bar Observations:
System validate your entries 1. One Material document will be created
If No Error 2. One A/c document will create and
Sys Display ‘Document OK’ Message Trigger the following G/L accounts
If Error occurs
Solve it G/L account Description
Click save or Post 300000 Inventory of Raw mat +ve
191100 GR/IR Clearing A/c -ve

3. Stock Status
Org Unit Blkd Stk qty. On order
Plant Increased Decreased
Str. loc. Increased Decreased

4. GR Partial quantities in to multiple stock types

Steps:
• Use Tcode = MIGO
• Option: Goods Receipt
• Sub Option: Purchase Order
• MVT: 101 (GR w.r.t PO into Stores)
• PO No : xxxxxx.

System Display PO details in to MIGO

Select the Line item which you wish to receive
Click ‘Distribute’ button in Item overview screen
System will display window. Then enter
Quantity Stock type Str loc
Xxxxx U/R Sxx Observations:
Xxxxx U/R Sxx 1. One Material document will be created
Xxxxx U/R Sxx 2. One A/c document will create and
Click ‘Adopt’ button Trigger the following G/L accounts
Check ‘OK’ check box G/L account Description
Click ‘check’ button on application to bar 300000 Inventory of Raw mat +ve
System validate your entries 191100 GR/IR Clearing A/c -ve
If No Error 300000 Inventory of Raw mat +ve
Sys Display ‘Document OK’ Message 191100 GR/IR Clearing A/c -ve
If Error occurs 300000 Inventory of Raw mat +ve
Solve it 191100 GR/IR Clearing A/c -ve
Click save or Post 3. Stock Status
Org Unit U/R stk QI stk . Blkd stk
Plant Increase Increase Increase
Str. loc. Increase Increase Increase

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5. GR – Multiple POs from SAME vendor

Steps:
• Use Tcode = MIGO Observations:
• Option: Goods Receipt 1. One Material document will be created
• Sub Option: Purchase Order 2. One A/c document will create
• MVT: 101 (GR w.r.t PO into Stores) and trigger the following G/L accounts
• PO No : xxxxxx. G/L account Description

System Display PO details in to MIGO 300000 Inventory of Raw mat +ve

Again enter one more PO details in MIGO 191100 GR/IR Clearing A/c -ve
System appends 2nd PO details 300000 Inventory of R/mt +ve
Select the Line items which you wish to receive 191100 GR/IR Clearing A/c -ve
Click ‘Adopt’ button
Check ‘OK’ check box 3. Stock Status
Click ‘check’ button on application to bar Org Unit U/R stk QI stk . Blkd stk
System validate your entries Plant Increase Increase Increase
If No Error Str. loc. Increase Increase Increase
Sys Display ‘Document OK’ Message
If Error occurs
Solve it
Click save or Post

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6. GR – Multiple POs from Multiple vendors

Steps:
• Use Tcode = MIGO Check ‘OK’ check box
• Option: Goods Receipt Click ‘check’ button on application to bar
• Sub Option: Purchase Order System validate your entries
• MVT: 101 (GR w.r.t PO into Stores) System display an ERROR
• PO No : xxxxxx. “Enter Vendor XXX (same) vendor Only

System Display PO details of one vendor System DONOT allow you to post
Again enter one more PO details of other vendor multiple POs of Multiple vendors
System appends 2nd PO details in a single GR (MIGO)
Select the Line items which you wish to receive

7. Goods Receipt - Blocked: Due to administrative reasons sometimes company will receive
the material inside the premises, however not taken into the str. loc

Steps:
• Use Tcode = MIGO
• Option: Goods Receipt
• Sub Option: Purchase Order
• MVT: 103 (GR w.r.t PO into Blocked NOT
Into the Str.Loc.)
• PO No : xxxxxx
• System Display PO details in to MIGO

Sys set NON Editable the following fields

o Str Loc
o Stock Status

Select the Line items which you wish to receive Observations:

Check ‘OK’ check box 1. One Material document will be created
Click ‘check’ button on application to bar 2. NO A/c document will be created
System validate your entries 3. Stock Status
If No Error Org Unit GR blocked On order
Sys Display ‘Document OK’ Message Plant Increased Decreased
If Error occurs Str. loc. No change No change
Solve it Click save or Post

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8. Releasing of GR Blocked

1st Method

Tcode = MIGO
Option: Goods Receipt
Sub Option: Purchase Order
MVT: 105 Releasing of GR Blocked
Enter PO No: XXXXXX
(Same PO through which we blocked the
Stock earlier)
Sys Display the PO Details

2nd Method

Tcode = MIGO
Option: Release of GR Blocked
Sub Option: Material Document (Through which we blocked the stock earlier)
Enter Material Document No: XXXXXX
Sys Display the Material Document Details Observations:

Mat OK Qty Str loc MVT S typ Plant 1. One Material doc will be created
Xxx xx S11 105 U/R XPL1 2. One A/c document will be created
Check OK Check Box It triggers the following GL accounts
Enter Str. Loc GL A/c no Description
30000 Inv. Raw of Material
+ve
Click Check button on application tool bar 191100 GR/IR Clearing A/c
-ve
If No error 3. Stock Status:
Sys display ‘Doc OK’ Org Unit U/R GR blocked On
order
Click Post Plant
Str. Loc

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GR without PO or GR Others
Again GR others are Two Types
a. Before Go-Live (GR – w/o PO as Initial Stock entries)
b. After Go-Live (GR – w/o PO as Auction Stock entries)

Before Go-Live (GR – w/o PO as Initial Stock entries)

Before Go-live our company is already having the

following material with different stock types

Material Qty Stock Type

Chairs 22 U/R
Chairs 11 QI
Chairs 05 Blocked

How to show into SAP’s account?

Use Tcode = MIGO

Option: Goods Receipt
Sub Option: Others
MVT: 561 (GR as initial stock entry balances into U/R stock type)

In item Overview screen

Mat Qty Str. loc. MVT Stock type Plant
Chair 22 S11 561 U/R XPL1
Chair 11 S11 563 QI XPL1
Chair 05 S11 565 Blocked XPL1

Click Check
Click Post

Observations

One Material Document will be created

One Accounting document will be created and triggers the following GL accounts
GL account Description
300000 Inv.- Raw Mate +ve
399999 Inventory taking –ve
Stock Status
Material U/R QI Blocked
Chair

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Before Go-Live (GR – w/o PO as Auction Stock entries)

After Go-live our company is Purchased the following material

Through auction with different stock types

Material Qty Stock Type

Tables 14 U/R
Tables 03 QI
Tables 02 Blocked

How to take it into SAP’s account?

Use Tcode = MIGO

Option: Goods Receipt
Sub Option: Others
MVT: 501 (GR without PO into U/R stock type into stores)

In item Overview screen

Mat Qty Str. loc. MVT Stock type Plant
Chair 14 S11 501 U/R XPL1
Chair 03 S11 503 QI XPL1
Chair 02 S11 505 Blocked XPL1

Click Check and Click Post

Observations

One Material Document will be created

One Accounting document will be created and triggers the following GL accounts
GL account Description
300000 Inv.- Raw Mate +ve
400020 Raw materials consumption -ve
Stock Status
Material U/R QI Blocked
Chair

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B Stock transfer

Transferring of Stock from one organizational unit to other organizational unit can be called as Stock
Transfer
1. Stock Transfer are two types
a. Intra Company Stock transfer ( With in the Co_cd )
i. Str. loc - to – Str. loc
1. One step method
2. Two step method
a. Rem. from str. loc.
b. Placing into str. loc.
ii. Plant - to - Plant
1. One step method
2. Two step method
a. Rem. from str. loc.
3. Placing into str. loc.
b. Inter Company Stock transfer ( Between Co_cd )
i. Co_cd - to Co_cd
1. W/o SD w/o billing
2. With SD w/o billing
3. With SD with billing
a. Stock transfer (Intra company Stock Transfer)

a) Str. loc - to – Str. loc - One step method

Note:- This step will be carried out by the Supplying Str loc

Steps
Use Tcode = MIGO
Option: Transfer Posting
Sub Option: Others
MVT: 311 – Transfer posting str 2 Str
one step

In Item details Observations:

√𝑇𝑟𝑎𝑛𝑠𝑓𝑒𝑟 𝑃𝑜𝑠𝑡𝑖𝑛𝑔 1. A material document will be created
From Destination 2. No accounting doc will be created
Mat: xxxxx Mat: xxxxx
Plant: XPL1 Plant: XPL1 3. Stock Status:
Str Loc : S11 Str Loc: S12 Org Unit U/R
Qty: XX Nos Plant No change
S11 Decreased
S12 Increased

Dis-advantages of One step method:

1. The person indented does NOT have a choice to receive

2. What ever enter the data by supplying storage loc. Is updates in SAP irrespective of physical
quantity received by receiver

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b) Str. loc - to – Str. loc - Two step method

i) Rem. from str. loc. - This step will be carried out by the Supplying Str loc

Steps
Use TCode = MIGO
Option: Transfer Posting
Sub Option: Remove from Str Loc
MVT: 313 – Transfer posting str 2 str –
- Remove form str loc.

In Item details Observations:

√𝑇𝑟𝑎𝑛𝑠𝑓𝑒𝑟 𝑃𝑜𝑠𝑡𝑖𝑛𝑔 1. A material document will be created
From Destination 2. No accounting doc will be created
Mat: xxxxx Mat: xxxxx
Plant: XPL1 Plant: XPL1 3. Stock Status:
Str Loc : S11 Str Loc: S12 Org Unit U/R Stk in Trn
(strloc)
Qty: XX Nos Plant No change
S11 Decreased
S12 No Change Increased

b) Str. loc - to – Str. loc - Two step method

ii) Place in to loc. - This step will be carried out by the Supplying Str loc

Steps
Use Tcode = MIGO
Option: Transfer Posting
Sub Option: Place into Str Loc
MVT: 315 – Transfer posting str 2 str –
- Place into str loc.

In Item details Observations:

√𝑇𝑟𝑎𝑛𝑠𝑓𝑒𝑟 𝑃𝑜𝑠𝑡𝑖𝑛𝑔 1. A material document will be created
Destination From 2. No accounting doc will be created
Mat: xxxxx Mat: xxxxx
Plant: XPL1 Plant: XPL1 3. Stock Status:
Str Loc : S12 Org Unit U/R Stk in Trn
(strloc)
Qty: XX Nos Plant No change
S11 Decreased
S12 Increased Decreased

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b. Stock transfer (Intra company Stock Transfer)

a) Plant – To - Plant - One step method

Note:- This step will be carried out by the Supplying Str loc

Steps
Use Tcode = MIGO
Option: Transfer Posting
Sub Option: Others
MVT: 301 – Transfer posting
plant 2 plant one step

In Item details Observations:

√𝑇𝑟𝑎𝑛𝑠𝑓𝑒𝑟 𝑃𝑜𝑠𝑡𝑖𝑛𝑔 1. A material document will be created
From Destination 2. One accounting doc will be created
Mat: xxxxx Mat: xxxxx
Plant: XPL1 Plant: XPL2 3. Stock Status:
Str Loc : S11 Str Loc. : S21 Org Unit U/R
Qty: XX Nos Plant 1 Decreased
S11 Decreased
Plant 2 Increased
S12 Increased

Dis-advantages of One step method:

3. The person indented does NOT have a choice to receive

4. What ever enter the data by supplying storage loc. Is updates in SAP irrespective of physical
quantity received by receiver

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b) Plant – To - Plant - Two step method

i) Rem. from str. loc. - This step will be carried out by the Supplying Str loc

Steps
Use Tcode = MIGO
Option: Transfer Posting
Sub Option: Remove from Str Loc
MVT: 303 – Transfer posting plant 2 plant–
- Remove form str loc.

In Item details Observations:

√𝑇𝑟𝑎𝑛𝑠𝑓𝑒𝑟 𝑃𝑜𝑠𝑡𝑖𝑛𝑔 1. A material document will be created
From Destination 2. No accounting doc will be created
Mat: xxxxx Mat: xxxxx
Plant: XPL1 Plant: XPL2 3. Stock Status:
Str Loc : S11 Str Loc: S21 Org Unit U/R Stk in Trn
(strloc)
Qty: XX Nos Plant No change
S11 Decreased
S12 No Change Increased

b) Str. loc - to – Str. loc - Two step method

ii) Place in to loc. - This step will be carried out by the Supplying Str loc

Steps
Use Tcode = MIGO
Option: Transfer Posting
Sub Option: Place into Str Loc
MVT: 305 – Transfer posting plant 2 plant –
- Place in to str loc.

In Item details
√𝑇𝑟𝑎𝑛𝑠𝑓𝑒𝑟 𝑃𝑜𝑠𝑡𝑖𝑛𝑔 1. A material document will be created
Destination From 2. No accounting doc will be created
Mat: xxxxx Mat: xxxxx
Plant: XPL1 Plant: XPL1 3. Stock Status:
Str Loc : S12 Org Unit U/R Stk in Trn
(strloc)
Qty: XX Nos Plant No change
Observations:
S11 Decreased
S12 Increased Decreased

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Transfer posting

Stock Types

 Stock Types
 When we receive the material, we have to apply a status for the material is called
Stock type or stock category, i.e. the materials available in stores must be a stock
status
 There are 3 stock types that indicate a material’s usability.
 Unrestricted Stock type
 Quality Inspection Stock type
 Blocked Stock type

Transfer posting

 Transferring of stock from one stock type to

another stock type can be called Transfer posting
 The following Transfer posting are possible
 U/R to QI
 QI to Blocked
 Blocked to U/R
 U/R to Blocked
 Blocked to QI
 QI to U/R

 T Code for Transfer posting is MB1B

 MVT type are as under

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 SAP Material Management Workbook - II

Cost Center

 It is an expenditure category
 In a company normally the following departments are available
 Sales
 Production
 Project
 Service
 Administration
 R&D
 In order to post the respective expenditures in the respective departments these cost center
will be created like
 Sales Cost Center
 Production Cost Center
 Project Cost Center
 Service Cost Center
 Administration Cost Center
 R & D Cost Center

Creation of cost center

 To create a cost center, two steps to be done

1. Define standard hierarchy
2. Create Cost Center
1. Standard hierarchy
 A field name should be the mandatory for Cost center creation
 It should be created under your controlling area only
 Steps for defining of standard hierarchy
 Tcode = OKKP
 Enter Std. hierarchy name and text description
 save
2. Creation cost Center
 Steps for Creation of Cost center
 Tcode = KS01
 Enter Cost Center Name and validity stating date
 In second screen
 Description, Std. hierarchy name, Cost center type etc.
 save

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Goods Issue

 Goods issue is the with drawl of stock or delivery to customer

 Goods issue leads to reduction in stock
 Types of Goods Issue
 With drawl of material for Production orders
 With drawl of material for sampling & scrap
 Return deliveries to vendor
 Other types of internal staging of material
 Deliveries to the vendor without involvement of
SD shipping component

 T Code for Goods issue

 MB1A or MIGO
 MVT = 201 Goods issue towards cost center

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SAP Material Management Workbook - II

Physical Inventory
What is Physical Inventory?

• Physical Inventory is the procedure used to maintain an accurate count of material

• This involves physically counting the quantity of stock at storage location.

Which stocks can be inventoried?

• Company’s own stock

• Special stock (consignment stock at customer, external consignment stock from vendor or
returnable packaging material)
Notes:
1. Above stocks to be taken separately in different physical inventory documents.
2. Physical inventory can be carried out for the following stock types
a. Unrestricted stocks in warehouse
b. Quality inspection stock
c. Blocked stock
d. If batch status management is active, stock type 1 covers both unrestricted-use stock
and restricted-use stock
3. Inventory of all stock types mentioned could be taken in a single transaction
4. For the material to be inventoried, one item is created in the physical inventory document for
every stock type.
5. Physical inventory takes place at storage location level.
6. A separate physical inventory document is created for every storage location
7. If no storage location segment exists for a material, this means that no goods movement has
ever taken place for the material in the storage location.
8. The material therefore has never had any stock at the storage location and does not exist at
stock management level.
9. It is therefore not possible to carry out a physical inventory for the material in this storage
location
10. This is not to be confused with a material for which a goods movement has taken place and
for which the stock balance is currently zero.
11. A Physical inventory must be carried out in this case.
12. It is also possible to carry out a physical inventory since storage location data is not deleted
when the stock balance is zero

Physical inventory procedure:

• Periodic Inventory
• Continuous inventory
• Cycle counting
• Inventory sampling

Periodic Inventory:
• In periodic Inventory all stocks of the company are physically counted on the balance
sheet key date.
• Every material must be counted
• During counting, the warehouse must be blocked for material movements.

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Continuous Inventory:

• With the continuous Inventory procedure, stocks are counted continuous during the
entire fiscal year.
• In this case, it is important to ensure that every material is physically counted at least
once during the year.

Cycle Counting:

• Cycle Counting is a method of physical inventory where the inventory is counted at

regular intervals with in the fiscal year.
• These intervals (or cycles) depend on the cycle counting indicator set for the moving
items for examples.

Inventory Sampling:

• In inventory Sampling, randomly selected stock of the company are physically counted
on the balance sheet key date.
• If the variance between the result of the count and the book inventory balance are
small enough, it is presumed that the book inventory balances for the other stock are
correct.

Physical Inventory process:

Independent of the Physical inventory procedure, the physical inventory process can be
divided into three phases:

• Physical Inventory Preparation

o This includes creating a physical inventory document

o Blocking the material for posting and printing.
o Distributing the physical inventory document

• Physical Inventory count

o The stocks in the warehouse are counted and the count results are entered in
the count list.
o These are then transferred from the count list to the system in the step “Enter
Physical inventory count”

• Physical Inventory check

o Using the list of inventory differences, you can check variances in the stocks.
o You should check whether the transferred count result is correct (change
count) or whether you want to initiate a recount.
o If the difference is accepted, it is posted and stock is corrected.

• Posting the difference

o A Physical inventory document is corrected to record the results of a physical

Inventory.
o Once actual counts are entered in to the physical inventory document, the
values are posted online, resulting in creation of SAP material and accounting
documents Tolerance group can be limited to a maximum difference per
physical inventory document and maximum difference per line item with in a
document.

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SAP Material Management Workbook - II

Steps in Physical inventory

1. Create a Physical Inv. document

Steps:

• Use Tcode = MI01

• In initial screen
o Document date 12.04.2013
o Planned count date 12.04.2013
o Plant VPL1
o Storage Location S11
• Press enter
o Material no’s (for which you wish to carry out the Physical Inventory)
• Click save

2. Entering of Inventory count

Steps:

• Use Tcode = MI04

• In initial screen
o Phys. Inventory Doc. 510 (Phy. doc created in the above step)
o Fiscal Year 2013
o Count Date 12.04.2013
• Press enter
• In second screen
o Enter Material qty. counted against each stock type
• click save

3. List of Inventory differences

Steps:

• Use Tcode = MI20

• In Initial screen
o Plant ASP1
o Storage Location S11
o Physical Inventory Document 510
• Press execute button
• System displays the
o Book qty. and value against Phy. counted qty. and value
• Click select all button and
• Click Post the difference button on application tool bar
o or do the following step

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SAP Material Management Workbook - II

4. Post the Inventory difference

Steps:

• Use Tcode = MI07

• In initial screen
o Phys. Inventory Doc. 510
o Fiscal Year 2013
o Posting Date 12.04.2013
• Press enter
• In second screen
o System display the difference qty. (either excess or less)
o Enter if any reason (optional)
o Click save
• Observations:
• system will create a material doc as a proof of posting this differences
• Go to MIGO see the material document
o for Less Qty. of material
o System triggers Mvt 702 (GI for Phy. Inv. from warehouse)
o for Excess Qty. of material
o System triggers Mvt 701 (GR for Phy. Inv. to warehouse)
• During this action for less qty. and excess qty.
o System will trigger an a/c ing document and hit the following a/c.s
G/L A/c Description
o For Less Qty. 300000 Inventory - Raw Mate –ve.
233000 Losses - inventory +ve.
o For Excess Qty.
300000 Inventory - Raw Mate +ve.
283000 Gain - inventory diff - ve.
• Stock status:
o All Counted Qty. only will be the stock qty. from now onwards

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SAP Material Management Workbook - II

Reservations
IMG Settings:
SPRO → MM → Inv. Mgmt. and Phy. Inv. → Plant parameters
Steps in Reservation
1. Create a material with General plant data/storage 2 view
2. Create Reservation for the above material (MB21)
• Note: Enter MVT = 201, plant, material no, qty. and str. loc details
3. System generates a Reservation doc.
4. Note down the reservation doc no.
5. Now check the stock status (MMBE) for the above material
6. System reserves the above material qty. under reservation category
7. Make a PO and GR for the above material
8. Check the stock status (MMBE) for the above material
• Note: The Material Qty in U/r stock type will be increased and another reservation qty
will also appear
9. Make a Goods Issue (MB1A) w.r.t above reservation (MVT 201)
10. Check the stock status: (MMBE)
• It is observed that both U/r Qty and reserved qty. will be reduced

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SAP Material Management Workbook - II

Logistic Invoice Verification (LIV)

IMG settings: LIV

1. Maintain Number Assignments for Accounting Documents (OMR4)

Path: SPRO→IMG→Materials Management →Logistics Invoice Verification →Incoming Invoice

→Number Assignment →Maintain Number Assignments for Accounting Documents
Steps:
• Click 'Document type' button
• System displays the List of Doc types
• Click Position
o Enter Document Type RE (Gross Inv. Receipt)
• Select RE and
• Click details button
• Click 'Number Range Information' button
• Company Code : VMOT
• Check an entry for 51 with year 2013
o If it is available
▪ no need to do any thing
o If it is not available
▪ Click + interval and create Number range for 51 with year 2013

2. Maintain Number Range Intervals for Invoice Documents (OMRJ)

Path: SPRO→IMG→Materials Management →Logistics Invoice Verification →Incoming Invoice

→Number Assignment →Maintain Number Assignment for Logistics Documents →Maintain Number
Range Intervals for Invoice Documents

Steps:

• Click Pencil marked interval button

• Check for an entry 01 with year 2013
o In case if you find this entry
▪ No need to create
o Else
▪ Create an entry for 01 with year 2013
• Click save

Tax settings: LIV

1. Check Calculation Procedure (OBYZ)

Path: SPRO→IMG→Financial Accounting →Financial Accounting Global Settings →Tax on

Sales/Purchases →Basic Settings →Check Calculation Procedure
Steps:
• Click 'Define Procedures'- System displays the list of tax procedures
• Click 'New entries'
Procedure Description
TAXVOL Volvo Tax Procedure
• Click save
• Select TAXVOL - and Click Control data folder

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SAP Material Management Workbook - II

• An empty schema in non-editable mode will appear

• click New entries
Step counter Cod type Description frm. to A/c key AK acc.
1 0 BASB Base Amt.
2 0 MWVS I/p Tax 1 VST VST
3 0 Total 1 2
• Click save

2. Assign Country to Calculation Procedure (OBBG)

Path: SPRO→IMG→Financial Accounting →Financial Accounting Global Settings →Tax on

Sales/Purchases →Basic Settings →Assign Country to Calculation Procedure
Steps:
• System displays the list of countries and their Tax procedures
• Click Position
• Enter Country = IN
• Replace the existing procedure with your tax procedure
Country Tax procedure
IN TAXVOL
• Click save

3. Define Tax Codes for Sales and Purchases (FTXP)

Path: SPRO→IMG→Financial Accounting →Financial Accounting Global Settings →Tax on

Sales/Purchases →Calculation →Define Tax Codes for Sales and Purchases
Steps:
• Enter country = IN
• In initial screen
o Country Key IN India
o Tax Code V1
• Press enter
• In Properties screen
Tax Code V1 Volvo 10% Tax code
Tax type V
• Press enter
• System displays the following screen
Country Key IN India
Tax Code V1 Volvo 10% Tax code
Procedure TAXVOL
Tax type V Input tax
Tax Type Acct Key Tax Percent Rate Lev Frm Lvl To Cond. Type
Base Amount 1 0 BASB
Input Tax VST 10 2 1 MWVS
Total 3 1
• Enter tax percentage as 10
• Repeat the same for A2 as Volvo 4% tax code

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How to do the Logistic Invoice Verification (LIV)

• In this module system verify the vendor Invoices for its content and price
• Tcode for Invoice verification = MIRO
• Pre requisites are:
o You should have a PO for which GR has to be made
Or
o You can have a Scheduling Agreement and its GR

Check Points:

Note: before processing MIRO the following 4 Check points to be verified

1. Check the Co_cd in Basic data - tab

a. If it is your Co_cd
i. No need to do anything...proceed to point no 2
b. Else
i. On menu bar-->Edit-->Switch Co_cd or F7
ii. Enter Co_cd = Your Co_cd
iii. Press enter
2. Enter Invoice date = Current date
3. Check the Drop down list of Tax codes.
a. It should show your tax codes (for ex: V1 – Volvo 10% Tax code and V2 - Volvo 4%
tax code)
b. If system does not show your Tax codes
i. Go to OBBG
ii. Click Position
iii. Enter country = IN
iv. Replace the existing tax proc. with your tax proc, =
TAXVOL - Volvo tax proc.
v. Click save
vi. In MIRO tax codes will appear
vii. choose your tax code from tax code list
4. Check the 'Calculate Tax' check box

How to do the Invoice verification

Steps:
• Use Tcode = MIRO
• In initial screen
• Check the above 4 check points
• Enter the PO no = XXXX
• Enter the Amount as Balance amount
• No errors will be appeared
• green light indicates to proceed for post by clicking save button
• Click Save to post the document
• Note down the document No

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Observations:

• System will create an invoice document as a proof of entering the incoming invoice
• How to view this Invoice document?
• Use Tcode = MIR4 (display of Invoice doc)
• Enter the document No and year
• Press enter
• system will display the invoice doc
• To view an a/c if any created during this process
• Click 'follow-on document' button
• System will display the a/c doc which is attached to this invoice doc
• The Following a/c will trigger during the invoice verification
G/L A/cs Description
400000 JK Tyres Limited -ve
191100 Goods Rcvd/Invoice R +ve
154000 Input tax +ve

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