and discount

number of days
which contains a
. Terms of payments: It's a key
percentage. terms.
International commercial
4 Incoterms;

Vendor master consists of 3 data etc.

contact details
which contains vendor address
7. General data; Maintained centrally Maintained by accounting
department.(FKO1,

2. Company code data/Accounting data:

FKO2, FKO3) which contains order currency

3. Purchasing data: Maintained by purchasing department
etc.(MKO1,MK02,MK03)
terms of payments

T-codes:
XKO1-Create vendor master

XK02-Edit/Change

XK03-Display
XKO6- Activate and deactivate deletion flag

MKVZ-List of vendors
Purchasing info record:
relationship between vendor
contains the information about the
It's type of master data which
a

and their materials.

of delivery days, conditions etc.
Info record contains vendor, material net price
no

Info record is created at plant and purchase organization level.

Info record can be created in two ways

1. Automatically:
Can be created automatically through info update indicator in purchase order.

2. Manually:
Can be created manually using below T-Codes
ME11- Create Purchase info record
ME12-Edit Purchase info record
ME13-Display Purchase info record
ME1M- List of info record per Material
ME1L-List ofinfo record per Vendor

Source List:
 f's a type of master data which contains the list of alowed source of supply for a paricula,
material within prescribed time period.
Source list contains vendor, plant, material, validity period, fix indicator, block indicator etc

T-Codes

ME01-Create and edit source list.

ME03- Display source list.

MEOM- List of source list.

2p
3. PROCUREMENT PROCESS OR P2P PROCESS:
Procurement process or p2p process starts with requirement of material or service and ends

with vendor payment.

Requirement of material
Vendor Payment
service

Determination of spource of
Invoice Verification
supply

Vendor Selection
Goods reciept

Purchase order

PURCHASE REQUISITION RFQ Purchase order GOODS RECIEPTINVOICE

There are 4 different types of procurement Process

1. Standard procurement
2. Subcontract procurement
3. Consignment procurement
4. Service procurement
 service and
requirement of material
or
are same which
All the Above procurement process takes place. SAP
ends with vendor payment but it differs only what and how procurement
different procurement process.
has given item category to differentiate

Item category
If's not
has given 0-8 item categories.
Itskey used to differentiate procurement process.SAP their external
if want only you can change
possible to create new item categories, you
representation.

Item Category Description

Standard

Subcontract

K Consignment
Service
D
Stock Transfer
U

Text

Third party

Pipeline

STANDARD PROCUREMENT PROCESS:

materials.
Direct Procurement: Used to procure stock

stock or consumable materials. These are also

Indirect Procurement: Used to procure non

called as Account assigned purchase orders.

Account assignment category is nothing but auxliary g/l account.

PURCHASEREQUISITION:
It's an internal document used to request a purchasing department to procure certain quantity of
material within prescribed time period.

etc
Purchase requisition contains Material, Quantity, Delivery date, Plant
Document type "NB Standard PR" Is used for Purchase requisition.

Purchase Requisition can be created in two ways

 A Automatica
Can be created
B Manualy Automatcally Through MRP
(material requirement
Can be aeated
manually using below T-Codes plannina
MESIN-Ceate PR run
MES2N-Eit PR
MESSN-Dsoiay PR
MESA- Ls of PR

REQUESTFOR QUOTATION (RFQ:

ts an
eteme
atera wihin doaumert used to request a vendor
presccbed time period. to give a
detailed price
RFQ Cortairs description
endor. Material, of
Docret type "AN Deivery date Net price.
s used for RFQ quantity, etc
RFQ onsss d3
deet phases
RFQ can be
ceated
wih
ME41-Ceae
ME2-Eit RFQ
RFQ or
without reference to
PR using below T-Codes
ME4Disciay
MEA-Ls RFQ
RFQ
2 otzion maintenance
VE47
3 Price ca
WE4
URCHASE ORDER:
ts an
erera
Terte imedoarmet
ercd use to
request a vendort supply certain
PTee r E vtars quantity of material vithin
Matera.
rmertye NE Strdrd PO"Vender,
s
Oertty, Delivery date. Net
price, Plant etc
e ir Purchase rder.
refzence to RFQ ard PR
MEZT Crrate PO uing belon T-Codes
MEZ2 EstPO
MEK- Dsgiey Po
MEZ L
 GOODSRECIEPT:
of material delivery from the vendor which
acknowledgement receipt for the proof
It's an
is posted with reference to Purchase order or
updates P0 history as well as Inventory.GR
scheduling agreement.
MIGO
Posting GR can generates

Material document

Accounting document

Po history Updates

Stock updates

Vendor is informed

Invoice verification:
Invoice verification is used to
It's an acknowledgement receipt for the proof of vendor payment.
process the vendor payment.

T-Code
MIRO-To post invoice

MR8M- To cancel invoice documents

cONSIGNMENT PROCUREMENT PROCESS:

our company premises
in which vendor keeps his material in
It's a type of procurement process material from consignment
material unless we issue the
and vendor remains the owner of that
stock to own stock.
stock to own
when we issue the goods from consignment
We are liable to vendor payment only
drawl on regular basis.
stock and vendor is informed of material with

Eg.TV showroom

Pre-requisites:

1. consignment info record using me 11

create
to plant
2. Assign standard purchase organization

Process steps
1. Consignment PO with item category "k" using ME2IN
Create
101k 501k using MIGO
2. Post goods receipt into consignment stock with mvt type
or
3. Post goods issue from consignment stock to own stock with mvt type 411k using MB1B

4. post invoice settlement using MRKO

bety
Accounting entries:

Goods issue
With
DEBITED+
Inventoryac BSX
Accounts payable consumption KON CREDITED

Invoice settlement:

Accounts payable consumption KON DEBITED +

Vendor ac CREDITED

SUBCONTRACTPROCUREMENT PROCESS:
It's
a type of
procurement process in which we provide raw material or semi-
vendor to make it as semi-finished or
finished finished ml..
out product and vendor is paid for the
work Caris
arne
Pre-requisites:
1. Create
subcontract info record for final
Create BOM for final material material using ME11
with child
components using CS01
Process:
1. Create subcontract PO
with item
2. Goods issue
to category L using me 21n and attach BOM
subcontract vendor using MB1B
3. Post
goods receipt for final receipt using with mvt type 541
(Subcomponents MIGO with mvt
4. Post invoice
comes back with
mvt type 101
verification for vendor type 542)
Accounting entries: payment using MIRO
MIGO:
RAW MATERIAL

Consumption Alc GBBNBO-

Debited (+)
Inventory Ac BSX- Credited
()
FINISHEDPRODUCT
Inventory Alc
BSX-Debited (+)
GRIR clearing Alc
Vendor Alc FRL-
WRX-Credited (-)
Debited (+)
Change in stock BS-
Credited ()
With Chillan:
me 21n and attach BOM
1. Create
PO with item category L using
subcontract
mvt type 541
vendor using MB1B with
issue to subcontract
2. Goods J1IGSUBCON against material
document.
3. Create Challan Using with mvt type 101
final receipt using MIGO
4. Post goods receipt for
(Subcomponents comes
back with mvt type 542)
MIRO
for vendor payment using
5. Post invoice verification
6. Reconsile Challan using J1IGRECON
A. First in first out-

B. Manual

Without Chillan: BOM

me 21n and attach
Create subcontract PO with item category L using
1. 541
vendor using MB1B with mv type
2. Goods issue to subcontract document.
J1IGSUBCON against material
3. Create Chelan Using
MIGO with mvt type 101
4. Post goods receipt for final receipt using
mvt type 542)
(Subcomponents comes back with
vendor payment using MIRO
5. Post invoice verification for
material using FB60
6. Create Vendor invoice for consumed

Service procurement:
services and
hires a vendor for external
of procurement process in which a company
It'stype
a
are also called as account assigned
or Non
vendor is paid for servicè the performed.These
stock procurement.

Pre-requisites;
1. Create Service master using AC03
2. Maintain service conditions using ML33

Process steps:

1. Create service po with item category D using me21n

2. Maintain service entry sheet against service PO and accept it using ML81N

3. Post invoice verification for vendor payment using MIRO

BATCH MANAGEMENT:
It's defined as managing of materials in terms of batches.

TERMS IN BATCH MANAGEMENT

Batch: it's a sub set of same material maintaining separately from other sub set of same
material
 date of mgf.
stored frm
can
tat matl
it's the max tym b expectedby d
Maximum storage period:
tat matl
shld hv at pt ofgrto
amt of tym
it's a min of d product
Minimum storage period: to d expire
fm date of mgf
Total shelf ife:
it's a total life of productl,e

Pre-requisites: in purchasing view also

batch management
batch and activate
material for MM01
1. Create view USING
data/storage1
maintain general plant
MSCIN
2. Create batch using

Process steps: tab in item detail)

in material
batch nor
me21n (maintain maintained in po)
1. Cerate PO using tab if not
MIGO(maintain
batch nor batch
2. Post GR using MIRO
verification using
3. Post invoice

4. OUTLINE AGREEMENT:
between vendor and a purchasing organization.
It's a long tem purchase agreement

There are two types of outline agreements

1. Contract
2. Scheduling agreement

Contract agreement:
services.
These are outline agreements with a vendor concerning
the supply of material or
dates are imposed through
There are no delivery dates in contracts. Instead delivery
contract release orders(PO with ref to contracts)

There are two types of contracts

A. Quantity contract (MK)

B. Value contract(WK)

Quantity contract:

If's a type of contract in which vendor supplies a material according to predefined terms and
conditions up to over all agreed quantity. system issues an warning message when agreeo
quantity exceeds.

Process steps:

1. Create PO with ref to contracts

using me21n with documents type MK
2. Post GR with ref to PO
using
MIGO
 with ref to PO using MIRO
3. Post invoice verification

Value contract:
to predefined terms and
vendor supplies a material according
It's a type of contract in which when agreed
value. system issues an warning message
. '

conditions up to over all agreed

value exceeds

Process steps;
me21n with document type WK
4. Create PO with ref to contracts using
MIGO
5. Posf GR with ref to PO using
6. Post invoice verification with ref to PO using MIRO

Scheduling agreements:
which vendor supplies a material according to predefined
It's a type of outline agreements in
terms and conditions.
dates are fixed
There are no purchase orders in scheduling agreements hence delivery
through delivery schedule.

Process steps:
documents type LP using ME31
1. Create Scheduling agreement with
2. Create delivery schedule using me38
MIGO
3. Post GR with ref to scheduling agreements
4. Post invoice verification using MIRO

STOCK TRANSFER AND TRANSFER POSTING

Transfer posting

There may or may not be physical movement of goods

UNRESTRICTED STOCK
 343
321
344
322
349
BLOCK STOCK
QUALITY STOCK
350

Stock transfer:
There is a physical movements of goods
Store to store stock transfer
1. One step store to store stock transfer

311
Store 1
Store2
2. Two
step store to store stock transfer
313
STORE 1 315
STOCK IN TRANSIT
STORE 2

Plant to Plant stock

Transfer
1. One
step plant to plant stock transfer

Plant 1 301
Plant 2

2. Two
step plant to plant stock
transfer
Plant1
303
STOCK IN TRANSIT 305
Plant 2
STOCK TRANSPORT ORDERS:
There are two types of
stock transport orders
1. Intra company STO without Delivery

We use thisSTO when we want tract stock transferbetween two plants through purchase
order.In this there is no integration with SD moduleand complete end within mm

Only Two step process allowed for STO without delivery.

Configuration steps:
1. Define Document type ZUB
2. Assign pricing procedure to document type ZUB and the schema group purchase
organization
3. OBYC settings for BSX and AUM

Process steps:

1. Create Material in both plants

2. Create STO at receiving plant with ltem category U using ME21N
3. Create goods issue against PO With mvt type 351 using MB1B
4. Post GR at receiving plant with mvttype 101 using MIGO

2. Intra company STO with delivery:

This process is used when business wants to handle STO process with delivery. This is
used when two plants of the same com code are located far from each other and also
wants to handle through delivery process

Intra Company STO with delivery hastwo types

1 step 641 mvt
2step647 and 101

Configuration steps:
1. Define Document type UB
2. Assign pricing procedure to document type UB and the schema group purchase
orgnisation
3. Set up stock transport order
(Create mat master and assign sales area and customer number)
a. Define shipping data for plants
b. Define checking rule
C. Assign delivery type and checking rule
d. Assign document type, one step procedure under delivery tolerance
4. Assign shipping points under LE-Shipping
5. OBYC setting for BSX and AUM

Process steps:

1. Create Material in both plants

 2. Create STO at
receiving plant with Item category U
3. Create out bond
delivery through VL10B using ME21N
4.
Create goods
5. Post GR at
issue thorugh
VL02N with mvt type 647
receiving plant with mvt type 101
6. Inbound invoice
j_1ig_inv using MIGO

AUTOMATIC PURCHASE ORDER:

1. Assign standard purchase
plant organization to
SPRO-IMG Enterprise str
purchase Assignment Materials
organization to plant. management> assign standard
2. Movement type 101 should be
activated for auto PO
SPRO-IMG-Materials
create PO automatically. management-inventory management& physical
3. Auto P0 should be inventory-Goods receict
XK01/XK02 activated for vendor in
Info-record should be purchasing data
ME11 exists
5. Source list should
be
ME01 maintained
Define industry sector
Controls:
Screen set up
field selection

SPRO-IMGLOGISTIC
INDUSTRY SECTOR ANDGENERAL-BASIC
Material Type: SETTINGS-FILED
INDUSTRY SECTOR
Controls:
SPECIFIC FIELDSELECTION-DEFINE
SECLECTION
Type of number
Number range assignment
Type of procurement
Different views
Price control
Account determination
Quantity and value
updating
 SETTINGS-MATERIAL
TYPE-DEFINE
SPRO-IMG-LOGISTIC GENERAL-BASIC

ATTRIBUTES OF MATERIAL TYPES

Vendor account group:

Controls:

.Type of vendor
Number range
Screen set up

Document type:
Controls:

Number range
Screen sequence
Allowed item category

RELEASE STRATERGY:
such as
for the purchasing document
Release procedure is an approval process
PR,PO,RFQ, CONTRACTS etc.
release strate0y.
this procedure is called as
The manner in which you configure

Release Strategy can be configured in two ways

classification
1. Release strategy without
item level. Hence using this only PR can be configured
It's used to configure release at
2. Release strategy with classification for PR,
release strategy at header level. Using this release strategy
It's used configure
PO, RFQ, Contracts can be configured

Configuration
SPRO-IMG-MATERIALS MANAGEMENTPURCHASING-PUCHASE

ORDER
ORDER-RELEASE PROCEDYRE FOR PURCHASE
A. Edit characteristics

B. Edit class (assign characteristic)

for purchase orders
C. Define release procedure
Release groups
Release codes
Release indicator

Release strategy
 Note: Table CEBAN for PR
Table CEKKO for PO

ME54N to release PR

ME29N to release PO

AUTOMATIC ACCOUNT DETERMINATION:

Its process of determining the proper G/L account to post at the time of GR/IR/GI.

Any moment of material can generates two documents Material document and accounting
document if the materials are subjected to valuation.It is difficult to remember all the G/L
Account Hence SAP has provided some key factors to determine g/l account
automatically.
Account determination plays vital role at the time of reporting.
Flow Diagram

Material Account Material Valuation

Type category class
Reference

ROH 0001 PEN 3000

Movement Value Transaction Valuation Account

type string event key
Valuation Accout
grouping modifier class
code
101 WE01 BSX 0001 VBR 3000 300000
201 WA01 GBB 0001 3000 400000

Configuration steps:
1. Define valuation control
Activate valuation grouping code
2. Group together valuation area
 .Also called ad Valuation grouping code.
Grouping of one or more valuation area
Valuation area is nothing but the level át which you valuate the material stock
Valuation area may be plant or company code

3. Define valuation class

a. Define account category reference
b. Define valuation class and assign it to account category reference
C. Material typelaccount category reference
Assign account cat reference to material type
4. Define account grouping for Movement type
assigned
Here each Movement type is
No changes until we create new Movement type.
modifiers
to different transaction event keys and account
5. Configure automatic postings
to G/L account
I n this step Assign Valuation class

Important Transaction event keys

BSX-Stock account

stock postings
GBB-Offsetting entry for

PRD-Price difference

WRX-GRIR dlearing
KON-Consignment payable

Pricing procedure: different types of

material including
net price of
the
determine the
is used to ec.
Pricing procedure price,discounts,freight,surcharges

charges like, gross

and purchase
schema.
vendor schema
works on
Pricing.procedure
mainly

Configuration
of Pricing procedure

1. Condition table are stored.

records
fields of condition org/
where all the Purchase
It's a table V e n d o r / p l a n t / m a t group
plant
Plant,
Ex: Material,
for a condition type from
record
2. Access sequence
searches all the condition
which
a search
strategy
It's table.
condition
condition table one or more
sequence
and assign
createaccess
Here
3. Condition type different types of Charge like gross
Condition types are nothing but
price,discounts,freight

Charges etc.
 4. Condition record

Condtion
Records
5. Schema group are created only for the condition
type which has access
a.
Vendor schema sequence
b. group
Purchase organization
6.
Calculation schemalpricingschema group
Here we maintain
different
procedure
7. Schema determination conditions in sequence
a.
Assign purchase schema to
b.
Assign Purchase organizationpurchase organization.
C. schema-Vendor schema-Pricing procedure
Assigh Vendor schema to vendor master.
SPLIT VALUATION:
Its defined as
splitting of value of a material based on
following reasons.
Procurement
By origin.
type l,e (extemal or
internal).
By quality of. mat.
Purpose of splitting matl is to know the
valuation area(plant). price difference for same matl and which
controls by
Valuation area (local defn)
Valuation type(global type)
Valuation categories (global category).
Steps
1.
Create material for. split valtuation using MM01
Assign valuation category in
2. Create same material for accounting view
3. internal
Create same mateial for
Here just
external
assign Valuation type i.e. internal, extermal ,inland, ausland
etc.
GST IMPLEMENTATION

INTRA STATE PROCUREMENT:

JISG Central GST

JICG State GST

Tax Values

CGST 0,2.5, 6, 9, 14
SGST 0,2.5, 6, 9, 14

INTERSTATE PROCUREMENT:

JiIG Integrated GST

Tax Values: 0,5, 12, 18, 28

UNIOIN TERITORY:

JIUG

Tax Values:

CGST 0, 2.5, 6,9, 14

SGST 0, 2.5, 6, 9, 14

Material Master
HSN CODE (Control code tab)
Service master:

SAC CODE (Tax tariff code)

Consumable Procurement:

India tab
of PO
manually in
Maintain HSN code

Standard Procurement SAC/HSN code)

code
I N D I A C o n t r o l

1. PO(newtab

HSN/SAC code
2. GR-Same
Place of supply,
GST partner,
3. Invoice

STO Process:
Within one state
Business Places
JISG If2
JICG J

states
If two Business place in Different
JIG inforecord
maintained in
and tax code should be
Info record is mandatory

IMPORT Procurement:

JIMD Import condition type

IGST is applicable in custom miro:

cessteducation cessx
Assessable value+BCD+Secondary

1. PO(Zero Tax code)

2. Custom miro
PO qtyx Net pricexExchange rate
3. MIGO
4. MIRO