Colleagues often ask me about the integration of Materials Management (MM) & Financial Accounting (FI):
Many SAP practitioners, IT and business alike, do not know where to start on MM-FI data flow and reconciliation. This blog clarifies the fundamentals of MM-FI account determination.
Configuration Transaction OBYC forms the core of the integration between the MM, FI, and Controlling (CO) modules in an SAP ERP system.
Transaction keys (1) are used to determine general ledger accounts used by the system. Account modifier is used to differentiate account determinations, depending on the procedure. Transaction and account modifiers are a logical grouping similar types of transactions. The transaction-account modifier, along with the valuation class, drives the accounting entries. Transaction keys are predefined in SAP and cannot be changed.
Figure 1: OBYC setup for BSX – Inventory posting
Many of you may have seen an accounting entry at the time of the purchase of raw material as a debit to inventory and credit GR/IR. The configuration setup of transaction BSX (inventory posting) is responsible for the inventory posting (see Figure 1), and WRX (GR/IR clearing account) is responsible for GR/IR posting.
When movement type 101 is used to record the goods receipt of raw material (valuation class 3000) for a purchase order, the system looks up the GL Account for transaction BSX and WRX for valuation class 3000 and records it in the accounting document.
Figure 2: OBYC setup for GBB-VBR – Consumption to Order
Similarly, when raw material is consumed using movement type 261, the system looks up transaction GBB (offsetting entry for inventory posting) for account modifier VBR,consumption for internal goods issues, and that reflects the GL Account in the accounting document as shown in Figure 2.
Figure 3 provides a summary of a few important movement types and accounting entries. Business process is listed in the column furthest to the left, with movement type in the next column and the debit and credit posting in the subsequent columns.
There is a column for transaction and account modifiers; as we noted earlier, these are the SAP terms for logically grouping similar types of transactions. The transaction account modifier, along with the valuation class, drives the accounting entries.
The OBYC MMFI account determination configuration is set up at the time of original implementation, and once set up, these accounts are derived automatically. You’ll want to test the setup before going live to ensure that the correct accounts are being hit for the respective transactions. You can change this configuration after go-live, but the revised setup needs to be thoroughly tested. Otherwise, we may run the risk of impacting regular operations.
Figure 3: Summary of Movement Types and Accounting Entries
(1) - The transaction key in MM-FI account determination is not the same as transaction code. A transaction code is an alphanumeric code that represents a particular task in SAP. It allows users to access tasks directly without having to use menu paths.
Ashish Sampat is an SAP FI/CO Consultant who has provided solutions in SAP Controlling, including product costing, Material Ledger, and cost center accounting to global clients in consumer-packed goods, life sciences, and industrial sectors. Ashish is based in Chicago, working as an independent SAP FI/CO consultant.
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This key indicates the type of material movement such as goods receipt, goods issue, and physical stock transfer. The movement type enables the system to find predefined posting rules, which determine how the stock and consumption general ledger accounts post and how the stock fields in the material master record are updated.
The valuation class in the material master Costing 2 view determines which general ledger accounts are updated as a result of inventory movement or settlement.
Iam very thankful to you, every time you post all informative post thanks for the great share keep posting.
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Its noting new people require innovative, Most of the Certified people know how MM and FI work , but still appreciate your hard work.