Introduction to SAP:

SAP: System, Applications and products in data Processing.

• It is an ERP tool (Enterprise resource planning)
• It is a German software implemented in year 1972 and introduced in year
1971 by 5 IBM employees.
1. Wallen Reuther
2. Tschira
3. Plattner.
4. Hector
5. Hopp
• In SAP Euro currency is accepted.

What is SAP?
SAP is an ERP tool or an application or a software.
3 Types of business.
1. MTS: Make to stock
You are making and selling. Ex.: Mobiles and clothes
2. MTO: Make to Order
Especially for us they are making (Giving order and making). Ex:
Construction
3. ETO: Engineer to order
Urban Clap people come and check AC is working or not and if any issues
give solution or troubleshoot. If any issue he will ask us to replace. This
order is called ETO. Same as mobile service centre or bike mechanic
shop service asks us to change something called ETO.

What is SAP?
Which supports each & every business process of company such as
Procurement of goods & service and delivering goods to customer &
finance manufacturing activities (Converting Raw materials to final
product), Logistic activities, warehouse management.
Why SAP?
SAP offers following advantages,
1. SAP is marketing leader in providing solution & Services to every
business available in the market.
2. The beauty of SAP is Integration of modules. (Integration = Combine).
3. Data Security.
4. SAP will capture each and every transaction taking place in company
from start to end.

Why Not SAP?

SAP Suffer from following disadvantage.
High Cost.

Who will use SAP?

SAP can be used by all types of industries such as pharma, chemical,
construction, engineering works, procurement companies, Automobile,
banking, insurance, retail, etc.
SAP will bring all the required documents on single platform to do the
business.

Modules in SAP:
In SAP Each and every object is called module.
Each & Every business process of company will be treated as module in SAP.
In SAP we have technical and Business Modules.

The people who working in Function module are called Functional Consultants
and there is no coding knowledge is required.
The people who working in technical module like ABAP are called Technical
Consultants & developers and coding knowledge is required
List of Modules in SAP:

1. FI – Finance.
This Module helps in all financial Activities of company such as
AP – Account Payable
AR- Accounts receivable and Taxation.
2. CO – Controlling.
It Provides the information to management or to the decision makers to
understand where company money is spent.

3. MM – Material Management.
This Module helps in Company procurement activities, inventory
activities & Logistic invoice verifications.

4. QM – Quality Management.
This Module helps in Quality Check of company materials.

5. SD – Sales and Distribution.

This Module helps in Selling & Delivering goods to customers.

6. PP – Production Planning.
This Module helps in manufacturing of company’s final product.

7. PM – Plant Maintenance.
This Module helps in all maintenance activities of company.

8. PS – Project Systems.
This Module helps in Tracking of company projects budget.

9. WM – Warehouse Management.
This Module helps in Storing company material Physically.
 10. HCM – Human Capital Management.
This Module helps in all HR activities of company.

11. ABAP – Advanced Business Application Programming.

ABAP is technical module in sap which helps in new development by
writing new program (coding) and it require coding Knowledge.
12. Basis Module
13. SAP Security.

What Happens in real time Project:

• We functional consultants will take the SAP Business Requirements from
the clients (Individual End users / departments).
• Once we receive the requirements, we consultants will check solution in
Standard SAP.
• If we got solution, then we consultants will do the configuration
(Settings) as per client requirement then it will be tested by both
Consultants & Clients.
• If it is working Fine, we will deliver to client & Client will use to do
regular Business.
• In case no solution in standard SAP then we functional consultants will
approach ABAP with a requirement document called FSD- Functional
specification document.
• Based on FSD, ABAP consultants will develop new program. (Report,
Printout, etc.)

Testing:
1. Positive Testing.
2. Negative Testing.
3. Random testing.
4. Individual Module (Unit Testing).
5. Integrated Testing.

What is ERP?
ERP stands for Enterprise’s resource planning & it’s a tool which supports every
business process of the company.
 It is used by small sector industries to large sector industries based on
company size & strength.
If we want to run Enterprises company, we require 4M’s
1. Money,
2. Manpower
3. Machine and
4. Material.
And 4P,
1. Product,
2. Price,
3. Place
4. People.
To control all the activities with proper planning then we require Suitable ERP.
In market we have many ERP such as Oracle, JD, Edwards BAAN, PeopleSoft,
SAP, etc.

Why ERP?
1. It saves Time & Expense.
2. It provides real time information whenever we require (reports).

Why Not ERP?

1. Sometimes it’s very difficult to provide solution to client requirements.

In SAP we have following servers,

1. Development server,
2. Quality server,
3. Production server,
4. Sandbox server,
It is used by consultants to learn new things before providing solution to
clients & it’s not mandatory in all Project/ Companies.
5. IDES / Dummy server.
It is used for learning SAP. It is also Called rental server
 Servers in SAP

Development Quality Server Production Server

Server

Golden Client

This Server is Used only This Server is to enter

Testing Client
for Testing Live Buisness

Testing Client

Above Servers are used in Live Servers.

Development Server:
DEV server divides into multiple section clients.
Development Server will be used only by consultants to provide solution to
client requirement.
Every Dev server will have one golden client & one or more testing client
(depends on consultant)
Golden client will be used to provide the requirements.
Testing client will be used to test the client requirement.
Golden client & Testing client are just screen names.
Quality Server:
In Quality server client will do testing.

Production Server:
In Production Server Clients will enter live Business Data.
Production Server will be accessed only by clients.

How To add new server details?

• Select new Icon to add server details in SAP.
• In real time project server details will be given by basis Consultants
based on project allocated to you.
• In practice we will get server details from rental server providers.
• Each & Every screen of SAP will be identified with 3-digit numeric code
called client.
• Client 800 is designed by SAP which will be used only for practice.
• In Real time project, we will use different codes other than 800 & those
are decided by project manager.
• Some of the real time client code are as below,

Server Client Project 1 Project 2 Project 3

DEV Golden 100 801 250
Testing 101 802 251
QA 200 850 350
Prod 300 900 450

New Password:
It is used to change the password of SAP but while changing we have to
remember two things,
• we can change password only once a Day.
• System will not accept last 5 used passwords.
Maintain username & PWD to login:
• In real time this will be given by Basis Consultants.
• Once we login to any server of SAP Systems will open default screen
called SAP easy access
• In DEV server easy access screen will be used by consultants for testing
purpose.
• Quality server Easy Access will be used by clients for testing only.
• Prod server easy access screen will be used by client to enter live
business entry.
• Go to IMG (Implementation guide).
• Consultants will provide solution to client requirement in IMG screen of
development server – Golden client.

In SAP we can enter data in 2 ways,

1. T-code (Shortcut note).
2. Navigation Path (Long route).

Navigation to IMG screen.

Give SPRO in command box -> Enter -> Click SAP Reference IMG & System will
display IMG Screen where all module consultants will work.

SPRO- SAP project reference Object.

Max is 6 screens in SAP with one login ID.
Types of DATA in SAP:

Whenever we consultants receive the requirement from client will divide into
3 types of data they use.

Client Requirement

Types of DATA

Organizational Data Master Data Transactional Data

Organizational Data:
Organizing things in sequence.
Company/ Client: Reliance.
Business – Jio/Petroleum/footwear/trends.
Branches – HYD/BLR/Chennai.

TCS (Working payroll) → Jindal Group (client).

Jindal -> requirements -> consultants -> we will inform to SAP Systems.
Once done tested by consultant / client -> go to prod (Live business)

Jindal Group – Company Name.

Jindal Steels – Business.
Jindal Purchase Department – Purchasing Department / Purchase.
Jindal Steel Branches – Branches.
Storage Location – Production Storage.
Organizational data also called organization structure or enterprise structure.
Every ORG will have a structure occurring to which entire business runs. Every
org will have ORG levels with their own roles & Responsibilities.
SAP MM will have following standard organization Structure:
MM Organizational Structure:
1. Company (6 char)
2. Company code (4 char)
1 & 2: Here Organizational level will be created by FI consultants In
Realtime projects
3. Purchase organization (4 char)
4. Plant (4 char)
5. Storage Location (4 char)
3,4 &5: These organizational levels will be created by MM consultants
in Realtime projects

Storage Location: Local Storage room like kitchen (manually need to check
where it is after system check).
WM - can check where it is including which rack / shelf or cupboard.

Define enterprises structure in SAP.

We will design client company structure in SAP System.
Define Company
Company is a type of business Structure owned by induvial or group of people
In market we have different types of company & every company will have their
own business line.
Use below T-code or path to create company in SAP system.
T-code – OX15
Path (Navigation):
SPRO -> IMG -> Enterprise structure -> definition -> financial accounting ->
define company -> enter -> go to new entries.
➔ Give company (6 char),
Street, Postal code, city, country (IN), language (EN), currency (INR)->
enter.
➔ Click on save icon to Save.
Use same T-code or path to create edit, check & delete company.
Define company code:
• Company code is the sub division of company. Company code will be
defined by FI consultant in real time project.
• All the financial transactions maintained and saved under the company
code.
• Each and every business of the company will be created as one company
code in SAP.
• Company code is a legal entity with their own balance sheets and profits
& Loss accounts.
As we are non-FI consultants, we don’t know how to configure FI settings so
we will use SAP standard company code 1000. In this 1000 company code, Sap
defined all FI settings for non-FI consultant to practice SAP.
We can use Standard company code 1000 or we can create new company code
by copying standard 1000. If we do copy then all the FI settings from 1000
company code will copy to our own company code.
Use below T-code or path to copy company code.
OX02 – Create/ edit/ delete company code (FI will use in projects)
EC01 – Copy company code
Path:
SPRO -> IMG -> Enterprise structure -> definition -> FI accounting -> edit, copy,
delete, check company code -> enter -> click on copy org. object icon -> give
from company code 1000 and give to company code (our own 4 character
code) -> enter -> click yes to copy G/L account -> click yes to change currency,
maintain currency -> continue for 4 times -> click no to copy number range ->
continue -> cancel(X) -> click copy -> read the information -> continue -> go
back -> double click on edit company code line -> click on positions -> give your
company code -> enter -> double click on your company code -> maintain
company name, city, country, language key then press enter -> click on address
icon, maintain company code address in detail (address will be given by clients
in real time projects but in practice we have to maintain on assumption) ->
press enter and save the company code.
Maintain Purchase Organization:
Purchasing organisation will be created by MM consultants.
Client purchasing dept will be created as purchase organization in SAP who are
responsible to purchase materials and services from market.
T-code: OX08
Path:
SPRO -> IMG -> Enterprise structure -> Definition -> Material management ->
Maintain purchase organization -> new entries ->give details (4 char) ->
maintain purchasing organisation description and save.

Define Plant:
Plant will be created by MM consultant but will be used by entire Logistics.
Plant is a place where business happens, or material manufacture happens
(Branch nearby).
Whether it’s a construction site, branch, stations, metro manufacturing units,
depos will be created as plant in SAP system by using below T. code or path
T-code: OX10
Path: SPRO -> IMG -> Enterprise structure -> Definition -> Logistic general ->
define/copy/delete check plant -> enter -> double click on define plant line ->
click on new entries -> plant (4 char), maintain plant name -> click on address
icon -> maintain address in detail -> enter and save
Maintain Storage location:
Storage location is always a part of plant. Each plant can have multiple storage
location to store different types of products.
Storage location is the place where plant materials are stored physically
T-code: OX09
Path: SPRO -> IMG -> Enterprise structure -> Definition -> Material
management -> Maintain storage location -> enter -> give plant -> enter ->
new entries -> give storage location -> enter & save it.
Eg: 001 – Raw materials
002 – Finished product
003 – Consumables
004 – Other materials

Assignment of Organization Structure:

Under this heading, we will assign all individual organization levels to convert
into organization structure.

1. Assign company code to company:

We can assign multiple company codes under one company.
(T code – OX16)
Path:
SPRO → IMG → Enterprise structure → Assignment → Financial accounting
→ Assign company code to company → enter → positions → give your
company code →enter → assign company (6 char) → Save.

2. Assign plant to company code:

We can assign multiple plants under one company code.
T. code: OX18
 Path:
SPRO → IMG → Enterprise structure → assignment → logistics-general →
Assign plant to company code → enter →new entries → give company code
→ assign plant→ enter → save.

3. Assign purchasing organization to company code: (Central purchasing

organization)
If we assign purchasing organization to company code then it will become
central purchasing organization.
Path:
SPRO → IMG → enterprise structure → assignment → materials
management → assign purchasing organization to company code → enter
→ click on positions → give your purchasing organization (4 char) → enter
→ assign your company code → enter → save.

• We can assign multiple purchasing organizations for one company

code.

4. Assign purchasing organization to plant: (Plant specific)

If we assign purchasing organization to plant then it will become plant

specific purchasing organization.
T. code: OX17
Path:
SPRO → IMG → Enterprise structure → assignment → materials management
→ assign purchasing organization to plant → enter → click on new entries →
give purchasing organization (4 char) & assign plants → enter → save.
 Master Data
Master Data will be created by clients in real time projects but back-end
settings will be done by we consultants. Master data is a one-time activity
created by clients in real time projects. The information of the material or
vendor or customers maintained in SAP system is called master data.

Types of Master data:

In SAP-MM we have following master data’s,
• Material master data
• Vendor master data
• Purchasing info record (PIR)
• Source list
• Quota arrangement list (QAL)
• Condition master data (Pricing)
Material master data:
Material is the first master data available in MM module. Material is a tangible
product and it is also called as product/ item/ goods.
The information of the material (like material name, unit of measurement,
material weights etc..) maintained in SAP system is called Material Master
Data.
If we want to buy or sell or to check the material stock through SAP system,
then we will create material in SAP system.
From today onwards until end of the course content, we will discuss the
following in every topic:
• Introduction to the topic
• Project requirement – Business requirements
• Consultant role – solution to client’s requirement
• Client’s role
• Transaction codes
• Tables
Business requirement:
In real time project clients deal with different types of materials such as raw
materials, semi-finished material, finished materials, spares, consumables,
packing material, food material, operating material, trading material etc. we
consultants have to provide solutions to differentiate types of materials in SAP
system.

Consultant’s role in Material master:

Under this heading, we will learn how to provide solution to client’s
requirement in material master. We will do these settings in IMG screen of
golden client – development server.
• In material master data, we segregate the different types of materials
into different categories by giving them different serial numbers
(material numbers).
EX: raw material – RAW000001, RAW000002, etc.
Spares – SP00001, SP00002, etc.
Note: material numbers might be in the form of numbers or alphanumerical
(ex: spare parts – 6700001, 6700002…. & Raw materials – RAW0001,
RAW002…)
Generalized Examples are as follows:
• In banking sector, there will be two types of accounts savings and
current.
For savings account and current account, there will be different series of
starting numbers of an account number. (For example, savings account
number may start with 5 and current account may start with some other
number)
• Similarly, vehicle registration number series will vary from state to state.
Ex: Andhra Pradesh – AP; Telangana – TS; Karnataka – KA etc.
1. Define material type:
Material type differentiate the types of materials in SAP system by generating
material code to every material. SAP has designed standard types. We can use
below standard material types or we can customize new material type by
copying standard examples.

1. ROH – Raw materials

2. HALB – Semi finished material
3. FERT – Finished goods
4. VERP – Packaging material
5. ERSA – Spares
6. FOOD – Food material
7. PIPE – Pipeline material
8. DIEN – Services (In ECC version)
9. SERV – Services (in S4 Hana)
10. HAWA – Trading material
11. NLAG – Non stock material
12. UNBW – Non-valuated material

Examples of material type codes customization in Live projects:

• ZRM – Raw material
• ZSFG – Semi finished goods
• ZFG – finished goods
• ZSPR – spares
• ZCON – Consumables
• PIPE – pipe line materials
• SERV – Service materials
• ZPAK – Packing material
• FOOD – Food material
• ZNVL – Non valuated material
• ZTG – Trading goods
• ZOTH – other materials
• ZSCP – Scrap materials
• ZOM – Operation materials
Identification of customization can be done by seeing Z or Y at the start of
code.
Use below T. code or path to customize new material type.
T. code: OMS2 – Material type
Path:
SPRO -> IMG -> Logistics general -> Material master -> Basic settings ->
Material type -> Define attributes of material type -> enter -> click on positions
-> give standard material type ROH for raw material -> enter -> select ROH line
-> click on copy as icon -> give your own material type (should start with Z or Y
with 4 CHAR), maintain material type description -> press enter, click continue
and save the material type.
Note:
Use same above steps to configure other material types.
• Material types controls material master.
Types of controls:
1. It controls number range of materials.
2. It manages fields of materials
3. It controls view of materials

Define Number ranges of material:

Number ranges will be used to identify materials in SAP system. Each material
will have unique code which will be used to buy, sell or to check material stock
in SAP system. These unique codes will generate based on material type.
We consultants will create number ranges and it will be assigned to material
type. Clients while creating materials they will select material they will select
material type & based on material type selection, system will generate
material code.
In SAP standards, for each material type we can maintain 1 internal and 1
external number range.
Internal means system will generate automatically within the range we defined
in SAP system & while creating material, if we are entering material code
manually within the range, we defined then it is called as external number
range.
Material number range length is 18 digits maximum.
Internal number range will accept only numeric and external will accept
alphanumeric. (To customize external number range series: Go to OMS2 t-
code -> select your material type -> double click on your material type and deactivate
below field -> external no. assignments w/o check)

T. code: MMNR
Path:
SPRO -> IMG -> logistics general -> material master -> basic settings -> material
types -> define number range for each material type -> enter -> we will get
maintenance screen -> click on maintain groups -> click on create icon -> give
group name (EX: raw material number range) -> give from no. and to number
range for both internal and external -> enter -> save.
Go back -> click control + F & give your material type -> enter -> click on
material type -> click on element/ group -> search your number range group
name -> double click on same group name -> save.

Define field selection of material master:

Field selection will be used to manage fields of material. Managing fields is
nothing but we can make field mandatory or optional or display or we can hide
the fields.
In SAP standard, each material type should have one field to manage fields.
SAP has designed below standard field selections.
ROH – Raw material field selection
HALB – semi finished material
FERT – Finished material
And for remaining all other standard material types SAP system will use ROH as
standard field selection.
We can use above standard field selections or we can customize new field
selections by copying standard. (Same like material type)
 Use below T. code or path to define, manage and assign fields
T. code: OMS9
Path:
SPRO -> IMG -> logistics general -> material master -> field selection ->
material field selection for data screens -> click on positions -> give standard
field selection ROH for raw material -> enter -> select ROH line -> click on copy
as icon -> give your own field selection (field reference) (4 CHAR), maintain
description -> enter -> double click on your own field selection -> click on field
selection group (contact box) -> check the field name and close the field
selection group -> manage field (hide/ display/ reqd. entry/ opt. entry) -> save
-> go back to material type (/nOMS2) -> click on position -> give your own
material type -> enter -> double click on your own material type -> assign your
own field selection in field reference box -> save.
View of material master:
If any department wants to use the material, then we have to inform system
by selecting view. SAP has defined below standard views to use in real time
projects and we consultants don’t have any options to add new views.
MM FI CO SD PP WM QM

Sales Quality
Basic data 1 Accounting1 Costing1 MRP1 Warehouse1
org.1 management

Sales
Basic data 2 Accounting2 Costing2 MRP2 Warehouse2
org.2

Purchasing MRP3

Purchase
MRP4
order text
Plant data/
storage1
Plant data/
storage2
Client’s role in Material master:
Under this heading, we will learn how to create material but in real time
project, client will create the material and we consultants will provide training.
T. code: MM01 (create material)
Creation of material with MM views:
Path:
SAP Easy access screen -> SAP menu -> logistics -> material management ->
material master -> material -> create (general) -> MM01 -> enter
Create material initial screen:
1. Material: client while creating material, if they enter material code
manually in this field, then system will take external number range and if
we leave this field blank while creating material then system will take
internal number range.

2. Industry sector: In this field we have to select our client’s industry. If our
client’s industry is not available in the list, then we consultants can
customize new industry by using below T-code or path and by copying
standard “A”.
T. code: OMS3
Path:
SPRO -> IMG -> Logistics general -> material master -> field selection –>
define industry sector -> enter -> click on new entries -> give industry sector
(1 CHAR) -> maintain industry description -> give field reference ‘A’ -> enter
-> save.

3. Material type

4. Copy from material:

If you want to create new material by copying the existing material code,
then in this field maintain existing material code.
After giving all above fields press enter. Select MM views then click on default
setting -> press enter -> give your plant & storage location -> enter -> data
entry screen will be displayed. (Create material screen)
Material Basic data:
Under this basic data view, we will maintain material general information as
shown below & it is applicable to entire company. (Basic data information
belongs to entire company/ client data)
1. Material description
2. Unit of measurement
3. Material group
4. Old material number
5. Gross weight/ net weight
6. Weight units
7. Volume
8. Volume unit
9. Size/ dimension
10. Packaging material details
The information maintained in basic data belongs to entire company.
1. Material description: Material description is also called as short text in SAP.
In this field we have to maintain name and it accepts 40 CHAR.

2. Base unit: In this field we have to maintain unit of measurement in which

material is measured.
Ex: KGS, Litres, EA, SQ. Ft, Nos, BAG, MT etc. we consultants can add new
units of measurement to fulfil client’s requirement.
T. code: CUNI
Path:
SPRO -> IMG -> SAP NetWeaver -> general setting -> check units of
measurement -> click on create icon -> then give units of measurement (3
CHAR) (Ex: KGS) -> maintain commercial, technical (KGS), maintain unit of
measurement text -> enter -> save.

3. Material group: Material group is sub-division of material type. Materials

with same features grouping together is called material group.
In real time projects, we consultants have to add new material group by
using below T-code or path.
T. code: OMSF
Path:
SPRO -> IMG -> logistics general -> material master -> settings for key fields ->
define material groups -> enter -> click on new entries -> give your own
material group (9 CHAR), maintain material group description -> enter -> save.

4. Old material number:

In this field we can capture non-SAP material code.

5. Division

6. X – Plant material status & valid from:

If you want to block the material from further procurement then in this
field maintain 01(blocked for procurement) along with valid from date.

7. Gross weight, net weight and weight unit:

In this field we have to maintain material weights.

8. Volume and volume unit:

These fields are used for liquid materials.

9. Size/ dimensions:
In this field we can maintain material size, if required.

10. Packaging material:

In this field we have to maintain packaging material details, if maintained
material required packing.
Purchasing view:
Under this view we will maintain material purchasing information. This
information belongs to individual plant and it will be used for purchasing the
products.
1. Base unit of measurement: This field will copy automatically from basic
data1.
2. Order unit: In this field we have to maintain unit of measurement in which
material is purchased from market. This field will be maintained only if base
unit and order unit are different along with conversion factor.
 Ex: 1 dozen = 12 Each; 1MT = 1000 KG; 1 pair = 2 Each/ nos
If base unit of measurement and order unit are same then leave this
field blank
3. Purchasing group: The group of people from purchasing department who
are involved in buying material are called purchasing group or buyer’s
group. In real time projects we consultants have to create purchasing
groups by using below T. code or path.
T. code: OME4
Path:
SPRO -> IMG -> Materials management -> purchasing -> create
purchasing group -> enter -> click on new entries -> give purchasing
group (3 CHAR), maintain description and maintain tel. no. Purch Grp ->
enter and save.
4. Material group: This will copy from basic data 1.
5. Plant Sp. mtl status and valid from: If we want to block the material for
particular plant from purchasing then in this field maintain 01 (Blocked for
procurement) along with valid from date.
6. Automatic PO: In SAP standard, we can create PO manually &
automatically. If we want to create automatic PO then activate this field.
7. Batch management: If we want to procure or produce materials in batches
then activate this field.
8. Remainders/ Expend.: If we want to send remainder messages or emails for
delivery of material on time then we will maintain remainder days and we
will design the message with the help of ABAP consultant.
9. Under delivery, over delivery and unlimited over delivery tolerance:
If we want to receive material quantity less than order quantity from
vendor then maintain under delivery tolerance in percentage.
If we want to receive material quantity more than order quantity from
vendor then maintain over delivery tolerance in percentage.
If there is no limit for over delivery then activate unlimited over delivery
tolerance check box.
10. Acknowledgement required: If we want acknowledgement copy for the
materials ordered then activate this field.

Remainders, tolerances and acknowledgement will be maintained based on

the selection of purchasing keys based on client’s requirements.
Path:
SPRO -> IMG -> materials management -> purchasing -> material master ->
define purchasing value keys -> enter -> click on new entries -> give purchasing
value key (4 CHAR code), maintain remainder days, activate acknowledgement
required, maintain tolerances and save.
11.GR processing time: In this field we have to maintain number of days to
move goods to storage location after GR and quality check.
12. Source list: If we activate this field then we can assign fixed vendor. If we
assign fixed vendor then we have to buy materials only from fixed vendor.
We will assign fixed vendor in 4th master data.
13. MPN (Manufacture part number): In this field we can maintain material
model number.
14. Manufacturer: In this field we can maintain material manufacturer name.
---------------Press enter------------
Purchase order text:
In this view/tab we can maintain any material information in the form of text.
Ex: Handle with care
Plant data/ storage 1:
In this view, we will maintain storage information and this storage information
belongs to individual storage location.
1. Base unit: This field will copy from basic data 1
2. Unit of issue: In this field we will maintain unit of measurement in which
goods are issued from company. This field will be maintained only if base
unit and unit of issue are different along with conversion factor and
leave this field blank if base unit & unit of issue are same.
3. Storage bin: Storage bin is the exact location where materials are stored
physically.
4. Shelf-life data: Under this heading we will maintain maximum and
minimum storage period and total shelf life along with time unit. (press
enter)
Note: Important: the date of production must be entered in goods
receipt
-------------------------press enter-------------------
Plant data/ storage 2:
Profit centre

** After maintaining all required field in material master, click on save icon to
save the material and system will generate material code at left bottom
corner.

Extension of material:
We will extend material for following ways.
1. Views extension
2. Organization levels extension

Extend material to Accounting view:

T. code: MM01
• Go to MM01
• Give extension material code in material field
• Press enter key for 2 times
• Select accounting views & Press enter.
• Give plant
• Press enter and maintain below information in accounting views and save
the material.
1. Maintain valuation class: maintain valuation class 3000 for raw material.
Valuation class will help us to link MM and FI modules. Valuation class will
be used to valuate the material.
2. Price control: In SAP, for materials we can maintain 2 types of prices.
S – Standard Price
V – Moving average price/ periodic unit price
For all external procurement materials, maintain price control ‘V’ and maintain
moving price. For all internal manufactured products (finished goods) maintain
price control ‘S’ and maintain standard price and save the product.
Extend material to new Plant and Storage locations:
Under this heading, we will learn how to extend the material to new plant and
storage location if we have multiple plant and storage locations using same
material. Follow below steps to extend product new organization levels.
• Go to T-code MM01.
• Give extension material code in material field and press enter.
• Give same material code in copy from material.
• Press enter and select all required views & press enter.
• Maintain extension plant and storage location & maintain copy from plant
and storage location.
• Press enter key. System will copy all data from plant1 to plant2 and in
plant2 if data is different then, edit the same in all views and save the
product.
T. codes of Material Master:
MM01 – Create/ extend material
MM02 – change/ edit material
MM03 – Display material
MM04 – Changes
MM06 – Flag for deletion/ undeleting
MM11 – Create schedule material
MM12 – Change schedule material
MM13 – Display schedule material
MM14 – Changes schedule material
MM16 – Flags for schedule material deletion
MM17 – mass maintenance
MR21 – Change material price
MMAM – Change material type
MMSC – Extend material to storage location
MM60 – Material list

Tables in SAP:
The data maintained in SAP in any module will store in a data base (DB2,
ORACLE, HANA etc) in the form of tables.
Tables T. code: SE16N
MARA – Material general data
MARC – Material purchasing data (plant data)
MARD – Material storage data
MBEW – Material accounting data
MVKE – Material sales data
MAKT – Material Description
 Vendor master data
Vendor is a supplier or seller or service provider. The information of vendor
like vendor name, address, purchasing info, accounting information
maintained in SAP system is called Vendor master data.
Vendor is an individual person or individual company or group of companies
who sell materials or who provides service.
We will have different types of vendors like regular vendor, fixed vendor or
one time vendor.
Business requirements
In real time project, company deal with different types of vendors such as
domestic, foreign, service, transportation etc. we consultants have to provide
solutions to differentiate types of vendors in SAP system.
Consultant role in vendor master:
Under this heading, we will learn how to provide solution to differentiate types
of vendors in SAP system.

Define vendor account group:

Vendor account group differentiates the types of vendors by generating
numbers (vendor codes) in SAP system. Each vendor will have a vendor code
generated by SAP based on selection of vendor account group.
SAP has defined below standard vendor account groups.
0001 and LIEF – standard Vendor
We consultant can use above standards or we can customize our own vendor
account group by copying standards.
Real time vendor group account examples:
ZDMV – domestic vendor
ZIV – Import vendor
ZSV – Service vendor
ZSCV – Sub contracting vendor
ZTRV – Transport vendor
ZOTV – One-time vendors ETC
Use below T-code or path to define new vendor account groups.
T. code: OMSG
Path:
SPRO -> IMG -> logistics general -> business partner -> vendor -> control ->
define vendor account group -> enter -> click on position -> give standard
vendor account group (LIEF or 0001) -> enter -> select LIEF or 0001 line then
click on copy as icon -> give your own vendor account group, description ->
enter and save.
Note: Vendor account group length is 4 CHAR maximum
➢ Vendor master will be controlled by vendor account group.
Types of controls by vendor account group:
1. It controls number range of vendor
2. It manages fields of vendor
3. It controls partner functions
Define number range of vendor:
Number ranges will be used to identify vendors in SAP system. Each vendor will
have their own code and those codes are generated by system based on
vendor account group.
We consultants will create numbers and it is assigned to vendor account group.
Clients while creating vendors they will select vendor account group, based on
this system will generate code to vendor.
In SAP standard each vendor account group will have 1 internal or 1 external
number range.
Internal number range means system will generate automatically and external
means clients have to enter manually while creating vendor but both should be
assigned to vendor account group. (mandatory)
Vendor number range length is 10 digits maximum.
T. code: OMSJ
Path:
SPRO -> IMG -> logistics general -> business partner -> vendors -> control ->
define number ranges for vendor master record -> enter -> click on intervals
-> insert line (+ icon) -> give serial number (2 CHAR), maintain from no. and to
no. range (either external or internal) -> enter -> save. Go back -> click on
number range -> click on position -> give your own vendor account group ->
enter -> assign your number range serial number to vendor account group ->
enter -> save.
Define field selections of vendor:
As discussed in material master, field selections will be used to manage fields
of vendor. Managing fields is nothing but making fields hide, mandatory,
optional, display.
Clients will share field list to be managed and we consultants will use following
T-code to manage the fields.
T. code: OMSG
Path:
Go to OMSG -> click on position -> give your own vendor account group ->
enter -> double click on your own vendor account group -> double click on field
status tabs (general data, company code, purchasing data etc) -> double click
on field selection groups -> manage fields of vendor -> save.
Partner functions:
Partner functions will be controlled by vendor account group in vendor master.
If multiple people or companies are involved in selling of a product from
vendor side then those multiple people or companies are called partner
functions.
SAP has designed below partner functions:
OA – Ordering address
GS – Goods supplier
IP – Invoice presented by
FA – Forwarding agent
 VN* – Vendor
Path:
SPRO -> IMG -> Materials management -> purchasing -> partner determination
-> partner roles -> define permissible partner roles per account group -> click
on new entries-> give your partner functions and assign your vendor groups ->
press enter for each line -> save.
Go back -> select partner setting in vendor master record (in partner
determination) -> define partner schemas -> enter -> click on new entries ->
give partner (4 CHAR), maintain description of partner schemas -> press enter
(2 times) -> select partner schema line -> double click on partner functions
procedure -> click on new entries ->

➔ Maintain entries as shown above and save.

Go back to vendor account group screen -> click on position -> give your
vendor account group -> enter -> double click on your vendor account group ->
assign your partner schema (4CHAR) in partner schema purch. Org. box ->
enter -> save.
T. codes of vendor master:
As we know, we will purchase the products from vendor and we will make
payment to vendor. Purchasing activities will be done by purchasing
department and payment activities will be done by finance department. In SAP
standard, we can create vendor centrally (purchase + finance) or individually.
 Below are the T-codes used in vendor master:
Event Purchasing Finance Central (Purch. + FI
Create vendor MK01 FK01 XK01
Change/ Edit MK02 FK02 XK02
Display MK03 FK03 XK03
Changes MK04 FK04 XK04
Block/ unblock MK05 FK05 XK05
Flag for deletion MK06 FK06 XK06

Creation of vendor centrally:

As we know the information of the vendor maintained in SAP system is called
vendor master data. In real time projects, client’s end user will gather the
information from purchasing department, finance department & from vendor
and all together vendor will be created centrally.
T. code: XK01
Path:
SAP easy access screen -> SAP menu -> logistics -> materials management ->
purchasing -> master data -> vendor -> central -> XK01 (create) -> enter
Create vendor initial screen:
I. Vendor:
In this field we have to maintain vendor number manually if we are using
external number range or else, we have to leave this field blank, if we are
using internal number range.
II. Maintain company code to maintain financial information
III. Maintain Purchasing organization to maintain purchasing information
IV. Maintain vendor account group which represents type of vendor
➢ Press enter key to enter into data in following tabs

1. Address: In this tab we have to maintain vendor name, vendor address

along with communication details. (Press enter key to go to next tab)
2. Control: In this tab, we will maintain vendor’s GST number in tax number-3
field. (Press enter key to go to next tab)
3. Payment transactions: In this tab, we have to capture vendor bank account
details. (Press enter key to go to next tab)
4. Contact person: In this tab, we can maintain contact person details from
vendor side. (Press enter key to go to next tab)
5. Accounting information accounting:
Recon. Account: Reconciliation account will be used to record all the
transaction into sub-ledger accounts. Maintain 160000 standard Recon.
Account, but in real time project finance department will create
Reconciliation account. (Press enter key to go to next tab)

6. Payment transactions accounting:

Chk double inv.: (check double invoice)
If we activate this field, then system will check duplicate invoices. (Press
enter key to go to next tab)
7. Correspondence accounting: Not Applicable
8. Purchasing data:
I. Order currency: In this field, we have to maintain currency in which
vendor is accepting the order
II. Terms of payment: In this field, we have to maintain payment terms
agreed with the vendor. Ex: Advance payment, delivery payments
etc.
III. Incoterms: Incoterms means International commercial terms. This
helps us to know the scope of delivery.
EXW – EX works
FOB – Free on board
FCA – Free carrier
DDP – Delivery duty paid
CIF – Cost, insurance and freight
IV. Schema group vendor: this we will discuss in 6th master data.
V. Sales person/ telephone: In this field we will maintain sales person
details from vendor side.
VI. GR -Based inv. Verif.: If we want to make the payment for only
received goods then activate this field. If we activate this field then
system will allow to make invoice payment only for goods (GR)
quantity.
VII. Srv. – Based inv. Ver.: If we want to make the payment for only
received services then activate this field. If we activate this then
system will allow to make invoice payment only for received services.
 VIII. Acknowledgement required: If we activate this field then system will
expect acknowledgement copy from vendor for given orders.
IX. Automatic purchase order: If we want to create purchase order (PO)
automatically then we need to activate this field. (Same like material
master)
X. Purchasing group: In this field we have to select purchasing group.
XI. Planned delivery time: In this field we have to maintain number of
days taking by the vendor to deliver the products. (Press enter key to
go to next tab)
9. Partner functions:
In this tab, system will copy partner function from vendor account group.

After maintaining all the vendor screens, click on save icon to save the
vendor and system will generate a vendor code at left bottom of the screen.
Remaining T. codes of vendor:
XK07 – change vendor account group
XK99 – Mass maintenance
MKVZ – Vendor list
Tables of Vendor master:
LFA1 – Vendor general data
LFM1 – Vendor purchasing data
LFB1 – Vendor company code data
LFBK – Vendor bank details

** This above vendor master concept is replaced by business partner (BP) in

S4 HANA.
 Purchasing Info Record (PIR)
Purchasing info record is also called as PIR or info record. It is used to capture
purchasing Information of a vendor and material combination.

Possibilities of creating PIR:

We can create info record manually by using T. Code ME11 or we can update
info record automatically by activating INFO UPDATE check box in Purchase
order material data tab.
Info record can be created with material code or without material code but
material description and material group are mandatory.

Consultants role in PIR:

Define number ranges

As we are aware info record can be created with and without material code.
We consultants have to provide solutions to show difference between with
and without material code info records.

Number ranges will be used to identify PIR in SAP system. Every material and
vendor combination system will generate a unique info record number.

When we are creating PIR with material code system will copy numbers from IL
group and if it is without material code then system will copy number range
from IN group, for both IL and IN we can assign internal and external number
range. (Same like material master)

T. code: OMEO

Path:
SPRO -> IMG -> Materials management -> purchasing -> purchasing info record
-> define number ranges -> enter -> click on maintain groups -> click on create
icon -> give group name, give From and To number ranges for both external
and internal -> save -> go back -> click control + F, give IL or IN group -> click on
Element/ group -> search your number range group -> double click on your
number range group -> save.
Define field selection of Info record:
As we are aware, field selection will be used to manage fields of purchasing
info record.
Path:
SPRO -> IMG -> material management -> purchasing info record -> define
screen layout -> enter -> double click on ME11 line -> double click on field
selection group -> manage the fields of Info record -> go back -> save.

Client’s role in Info record:

Under this heading, we will learn how to create Info record with vendor and
material combination. But in real time project, it will be created by end users
of purchasing department.
T. code: ME11
Path:
SAP easy access screen -> SAP menu -> logistics -> material management ->
purchasing -> master data -> info record -> ME11-create -> enter
Info Record initial screen:
1. Maintain Vendor code (Mandatory)
2. Maintain material code (optional)
3. Maintain Purchasing org. (mandatory)
4. Give plant (optional)
5. Info record: In this field we have to maintain info record number manually
if we are using external number range or else leave this field blank if we
are using internal number range.
6. Info category: we can create Info recording in following 4 categories.
I. Standard
II. Sub-contracting
III. Pipe line
IV. Consignment
** As of now, select info category “Standard” (after maintaining all above
fields, press enter key to enter into Info record data tabs)
 Info Record: General Data tab:
I. Short text: In this field, we have to maintain material description, if info
record is created without material code.
II. Material group: In this field system will copy material group from
material master, if we create info record with material code. If we are
creating info record without material code then in this field, we have to
maintain material group manually.
III. 1st Rem, 2nd Rem, 3rd Rem/ Exped.: These fields will copy from material
automatically and if required we can edit here with this vendor
combination. Same will copy to purchase order but not to material.
IV. Sales person and telephone: These fields will copy from vendor master
automatically. If required we can edit here which will copy to purchase
order.
V. Purchase order unit of measure: Under this heading system will copy
order unit and conversion factor from material master. If required we
can edit here which will copy to purchase order.
VI. Origin data: Maintain origin certificate details.
VII. Available From and Available To: In this field, we have to maintain info
record validity dates.
VIII. Regular vendor: If this info record vendor is a regular supplier of info
record material, then activate this field. Once we activate this field, info
record vendor will become regular vendor. If our regular vendor is not
available then we will go for Prior vendor.
IX. Prior vendor: Maintain prior vendor.
Info Record Purchasing organization data1:
I. Planned delivery time (Pl. deliv. Time): This field will copy from vendor
master, if required we can edit here which will copy to purchase order
automatically.
II. Purchasing Group: We will copy from material master.
III. Un-delivery, over delivery, unlimited over delivery tolerance and
acknowledgement required: These fields will copy from material master,
if required we can edit here.
IV. GR -Based IV.: This field will copy from vendor master and if required we
can edit here.
V. Tax code: I his field we will select tax code to calculate taxes on
purchasing. Tax codes will be created by FI consultants with FTXP t-code.
 If we miss to select tax code here then we can select in purchase order
directly.
VI. Conditions: Maintain price of the product.
Text Overview Tab:
In this tab system will copy text from material master. We can maintain text
here in this tab.
After maintaining all fields and screens, save the info record. After saving,
info record number/ code will be generated at left bottom of the screen.
T-codes of Info Record:
ME11 – Create Info record
ME12 – Change Info Record
ME13 – Display Info Record
ME14 – Changes
ME15 – Flag for deletion
MEMASSIGN – Mass maintenance
ME1M – List of info records by material
ME1L – List of Info Records by vendor
ME1W – List of Info records by material group

PIR Tables – SE16N:

EINA – Info record general data
EINE – Info Record purchasing data
 Source List
Source list is one of the master data available in SAP MM. It is used to maintain
fixed vendor to a material. Once source list is maintained then we have to buy
material from source vendor only.
Source list Process flow:

Source list

Activate Maintain
source list source list

Consultant/ Client/ Easy

IMG level Access

Plant level Material

level

Activate source list by consultant:

If consultant is activating source list, then he/she will activate at plant level and
it is applicable to all the materials available in that plant.
T. code: OME5
Path:
SPRO -> IMG -> Materials management -> purchasing -> source list -> Define
source list requirement at plant level -> enter -> click on positions -> give your
plant -> enter -> activate source list check box only if required -> save.
Client’s role in source list activation:
If client is activating source list, then they will activate only for required
materials.
Use T-code MM01 for newly creating materials and MM02 for already created
materials. Go to Purchasing view and activate source list check box.
Maintain Source list:
Under this heading, we will assign fixed vendor to a source list activated
material. But in real time project this will be done by purchasing end user.
T. code: ME01
Path:
SAP easy access screen -> SAP menu -> Logistics -> Materials management ->
master data -> source list -> ME01 – maintain -> enter -> give material code for
which source is activated, maintain plant -> enter -> maintain source valid from
and valid to dates, maintain vendor, maintain purchasing organization -> save.
T. codes of Source list:
ME01 – Maintain/ change source list
ME03 – Display source list
ME04 – Changes
ME0M – List of source list by material code
Table of source list – SE16N:
EORD – Source list
 Quota Arrangement List (QAL)
This is one of the master data available in SAP MM. if our client is diving bulk
quantities order into ratios to multiple vendors then it is called Quota
Arrangements list in SAP.
Quota arrangements T. codes:
MEQ1 – Maintain/ change QAL
MEQ3 – Display QAL
MEQ4 - Changes
MEQM – List of QAL
Tables – SE16N:
EQUK – Quota header table
EQUP – Quotation item table
What is Materials Management (SAP – MM)?
SAP MM is the short form of SAP materials management module. SAP MM is
one of the functional modules which supports all the aspects of materials
procurement i.e., Purchasing, stock handling i.e., Inventory management (IM)
and logistics invoice verification (LIV).
MM is the backbone of Logistics.
MM module integrates with other modules such as SD, FI, CO, QM, PP, PM, PS
and WM.
MM as a process ensures no shortage of material or any gaps in supply chain of
the company.
The Business process or procurement process of MM is P2P cycle.
P2P stands for Procurement 2 Pay.

P2P Cycle

Any dept. required

material/ services Contracts

Purchase Source RFQ – Quotation Price

requisition (PR) determination Request comparison
for statement
quotation

FI
Invoice Goods Purchase order
Payment Receipt
Verification (PO)
Note (GRN)

Not
OK OK
Stores/ WM Quality Reject
check
 P2P Overview
Procurement process starts with purchase requisition and ends with goods
receipt and payments.
Whenever any department requires materials or services to fulfil their business
needs then they will raise a request document called Purchase Requisition
(PR). PR is an internal purchasing document which will be used to request
materials to purchasing dept. once purchasing dept receives the request then
they will search vendors (suppliers) in market called Source determination.
Once we got the source then we will raise price request to vendor called RFQ –
Request for quotation. RFQ will be created to vendor to know the price, terms
and conditions offered by vendor. Vendor will submit price, terms and
conditions in the form of a document called Quotation. Once we receive
quotations from multiple vendors then purchasing department will compare
the prices (quotations) to finalize the vendor. The process of comparing prices
and finalising vendor is called Price comparison statement. Once vendor is
finalised then the purchasing department will raise order called Purchase
order PO. Purchase order is a document issued by purchasing department to
the vendor for procurement of materials and services. In this PO we will
maintain materials requirement, quantity, delivery date, price and other terms
and conditions. Once vendor receives the order then based on delivery date,
they will deliver the goods to company and company will perform Goods
Receipt (GR). Once company receives the material physically then goods
Receipt will be posted in SAP. After GR immediately our quality department/
team will check the quality of material if everything looks ok then we will move
goods to storage location or if stock is not ok then we will reject the stock.
Vendor will submit invoice to company for payment called Invoice receipt (IR).
Company once receives the invoice then they will compare invoice with goods
receipt document and purchase order (3-way match) if all are matching then
they will submit the invoice to FI department for payment. Verifying invoice
before making payment is called logistics invoice verification (LIV).
Terms of material management:
MM deals with following terms
Purchasing

Terms of MM Inventory management (IM)

Logistics invoice verification (LIV)

Components of MM along with T. codes:

Components T. codes
Purchase requisition (PR) ME51N
RFQ ME41
Quotations ME47
Price comparison statement ME49
Purchase order (PO) ME21N
Goods Receipt MIGO
Invoice Receipt MIRO

Purchasing:
Purchasing is one of the components in SAP MM (MM-PUR). Purchasing
concept will be used to procure materials and services from vendor/ supplier
to fulfil business requirements. The process of buying materials and services
from vendor or dealers is called purchasing.
Types of Purchasing:
We have below different types of purchasing in SAP MM

Standard
Procurement
Types of purchasing

Special Procurement
Standard Procurement:
Procurement process is used to procure materials and services required by the
company from external vendor. In this standard procurement company orders
goods to vendor and vendor supplies the goods to company (one to one
relation). Standard procurement process flow is as below:

Purchase Purchase Create Price

Quotations
requisition requisition RFQ WRT comparison
release PR

Invoice GR WRT PO Create PO

receipt PO Release WRT PR

**RFQ/ Quotation/ PC are not mandatory in SAP. Project to project

requirements will change.
** WRT – With reference to
Types of Purchasing document:

Internal Purchase requisition

Purchasing
documents
RFQ – Request for quotation
External

PO – Purchase Order

Contracts

Scheduling Agreement
Structure of Purchasing document:
All purchasing document in SAP divides into multiple structure. They are:
1. Header data
2. Item overview
3. Item data
The data maintained at header level is applicable to whole document.
In Item overview we have to maintain list of materials to be procured.
The data maintained at item level is applicable only to particular line items.
Material to material item data will be different. For every material we need to
maintain item data.
 Purchase Requisition
PR is the first purchasing document in SAP purchasing component.
It is an Internal document.
If any department in the company required materials or services then those
departments will raise request to the purchasing department in the form of a
document called PR – Purchase requisition to procure the same in the market.
PR can be Standard, Third party, Sub-contracting, Stock transfer order (STO),
Consignment and Services.
PR – Business requirements
Project requirement:
In real time project client’s internal departments will create purchase
requisitions. We consultants have to provide solution to differentiate
department wise PRs in SAP system. Example HR department, Sales,
Purchasing, Stores, Design, Manufacturing, Maintenance etc.
Consultant Role in PR
Under this heading we will learn consultant role in PR. They are:
1. Define document type
2. Define number ranges to PR document type
3. Field selection of PR
4. Item Categories
Define document types:
Document types differentiates types of PRs in SAP by generating PR number to
each PR. SAP has defined standard document type
NB – Standard purchase requisition
We consultants may use standard document type NB or we can customize new
document types by copying standard. In real time project, we will customize
below document types and these are just examples. Project to project
requirements may get change but the process is same.
ZSPR – Sales PRs
ZHPR – HR PRs
ZMFP – Manufacturing PR
ZSTR – Stores PR
ZMNT – Maintenance PR
ZPPR – Purchasing PR
Path:
SPRO -> IMG -> Materials management -> Purchasing -> Purchase requisition ->
Define document types -> enter -> click on positions -> give standard
document type NB -> enter -> select NB line -> click on copy as icon -> give
your own document type (4 characters), maintain document type description
-> press enter key -> click copy all -> continue -> save
➢ Document type controls PR**
Types of controls by document type
1. It controls number range of PR
2. It manages fields of PR
3. It allows item category.
Define number range of PR:
Number range will be used to identify PRs in SAP system. In SAP standard we
can create & assign internal and external number range for each document
type.
PR number range length is 10 digits.
T. code: OMH7
Path:
SPRO -> IMG -> Material management -> purchasing -> purchase requisition ->
define number ranges -> enter -> click on change intervals -> insert two line ->
give serial number (2 char), give From and To number range for both internal
and external -> enter -> save.
Go back to PR document type screen -> click on positions -> give your own
document type -> enter -> assign number range serials for both internal and
external -> save.
Define Field selection of PR
As we know the field selection will be used to manage the fields of PR. In SAP
standard each document type will have one field selection. SAP has designed
standard field selection or we can customize our own field selection based on
document type (if we customize document type then customize field selection
also)
Path:
SPRO -> IMG -> Materials management -> purchasing -> purchase requisition ->
define screen layout at document level -> click on position -> give standard
field selection NBB -> enter -> select NBB line -> click on copy as icon -> give
your own field selection (4 char), maintain description -> enter -> double click
on your own field selection -> double click on field selection group -> manage
fields of PR based on client’s requirements -> go back (2 times) -> save
Go back to PR document type screen -> click on position -> give your own
document type -> enter -> assign your own field selection -> save.
Item categories:
Item category differentiates types of procurements in SAP system. Item
categories will be calculated by document type. SAP has designed below
standard item categories for purchase and we consultants don’t have any
option of adding new item category.
Standard types of Item category
Blank – Standard
S – Third party
L – Sub-contracting
U – Stock transfer order (STO)
K – Consignment
D – Service
Client’s role in PR
Under this heading, we will learn how to create purchase requisition but in real
time project client’s end user will create purchase requisition and we
consultants will provide training.
Create standard Purchase Requisition
T. Code – ME51N
Path:
SAP easy access screen -> SAP menu -> Logistics -> Material management ->
Purchasing -> Purchase requisition -> ME51N – Create -> enter
1. Select PR document type based on creation department
2. PR item overview:
Under this Item overview, we will maintain list of required material,
quantity along with below fields.
I. Item: In this field system will generate line-item serial numbers
automatically.
II. A – Account assignment category: If we are procuring materials for
direct consumption (use) then we have to maintain account assignment
category. Please find below are few standard account assignment
categories.
A – Assets
C – Sales order
1 – Third party
E – Customer Individual requirements
F – Order
K – Cost centre
N – Network
P – Project
Q – Project, make to order

As of now leave this field blank because we are buying this material for
stock.
III. I – Item category: Leave this field blank (Blank – Standard)
IV. Material: In this field we have to maintain required material code.
V. Short text: In this field system will copy material description from
material master based on material.
VI. Quantity: In this field we have to maintain required quantity of
material.
VII. UN – Unit of measurement: In this field system will copy base unit of
material from material master basic data1 view.
VIII. Delivery date: In this field we have to maintain material required date.
If we leave this field blank then system will take current date as delivery
date automatically.
IX. Material group: In this field system will copy material group from
material master.
X. Maintain Plant and Storage location.
XI. Purchasing group (PGr): This field will copy from material master
automatically.
XII. Requisitioner (Requisnr): In this field we have to maintain PR requestor
name
PR Header Data:
The data maintained at header level is applicable to entire PR.
I. Text tab: In this tab, we can maintain any information in the form of
text.
PR Item data:
The data maintained at item level is applicable to individual material, for every
material we have to maintain item data.
I. Material Data: In this tab, we have to maintain material details.
Quantity/ Date:
I. Quantity/ quantity ordered/ open quantity: In quantity field we will
maintain required quantity. When we covert PR into PO then PO
quantity will update automatically in quantity ordered field, remaining
quantity of PR after order will update in open quantity field.
II. Closed (Check box): If you want to close PR line item manually then
activate this field.
III. GR processing time: This field will copy from material master.
Valuation:
I. Valuation Price: In this field system will copy material price from
material master accounting-1 view.
II. Goods receipt: This field will be in disable mode always. This field will be
in active always based on item category. If this field is in active then
system will expect goods receipt entry.
III. Invoice receipt: If this field is in active then system will expect invoice
receipt entry.
Source of Supply:
Assign source of supply: If we click on this option then system will copy
vendors in following sequence.
QAL – SL – Contracts – PIR
Status tab: In this tab we can check PR current status.
Contact Person: In this tab we can check PR creator details and how it is
created. (Manually or automatically)
Text: In this tab, system will copy text from material master. We can add any
information here in the form of text.
Delivery address:
In this address vendor will deliver the materials. This address will copy from
plant address.

➢ After maintaining all the required fields and tabs, click on check icon if
system displays “No messages issued during check” then save the PR and
system will generate PR number at left bottom of screen.
T. Codes:
ME51N – Create Purchase requisition
ME52N – Change Purchase requisition
ME53N – Display Purchase requisition
ME54N – Release Purchase requisition (Individual)
ME55 - Release Purchase requisition - collectively
ME5A – List of PRs
ME5K – List of Account assignment PRs
ME5J – Project PRs
MEMASSRQ – Mass Maintenance
Tables of PR – SE16N
EBAN – General Purchase requisition
EBKN – Account assignment Purchase requisitions

PR Error:
➢ Account assignment mandatory for Material XXXXXXXXX
Solution for above error is as follows:
➢ Go to T. code OMS2
➢ Click on positions, give your material type and press enter key
➢ Select your material type line and double click on your Qty/ value updating
option (left side of the screen)
➢ Again, click on positions and give valuation area (plant) and press enter (2
times)
➢ Activate Qty and value updating check boxes
➢ Press enter and save.
 RFQ – Request for Quotations
RFQ is one of the external purchasing documents.
RFQ is a form of invitation sent to vendors through email, fax or telephone to
submit the price, terms & conditions for required material.
RFQ contains details of a required material, quantity, date of delivery and
quotation submission last date.
RFQ is used to know the Price, terms & conditions offered by the vendor for a
material.
RFQ business requirements
In real time projects, clients request quotations to different types of vendors
such as domestic vendors (Domestic RFQs), Import vendor (Foreign RFQs),
Service RFQs etc. we consultants have to provide solution to differentiate
types of RFQs in SAP system.
RFQ – Consultant Role
1. Define document type
As discussed in PR, document type differentiates types of RFQs in SAP by
generating RFQ number to each RFQ. SAP has defined standard document
type: AN – RFQ
We consultants can use standard document type AN or we can customize
new document types by copying standard. In real time project we will use
below document types and these are just examples.

ZDRQ – Domestic RFQ

ZIR – Import RFQ
ZSR – Service RFQ
Path:
SPRO -> IMG -> materials management -> purchasing -> RFQ/ Quotations/
Define document types -> enter -> click on position -> select AN line -> click on
copy as icon -> give your own document type (4 CHAR), maintain description ->
enter -> click on copy all (and if you get an error like “enter valid document
type”, simply click on cancel button in application tool bar which will be in red
colour) -> continue -> save.
** Document type controls RFQ
Types of controls by document type
1. It controls number range of RFQ
2. It manages fields of RFQ
3. It allows Item category
Define number range of RFQ:
As discussed in PR, each document type will have 1 internal and 1 external
number range. Number range will be used to identify RFQs in SAP system.
T. code: OMH6
Path:
SPRO -> IMG -> Material management -> Purchasing -> RFQ/ Quotation ->
define number ranges -> enter -> click on change intervals -> Insert 2 line ->
give your own number range serial number -> give from & To number range
(10 digits) -> enter -> save -> go back to your RFQ document type screen ->
click on positions -> give your own RFQ document type -> enter -> assign
interna1 & external number range serial numbers -> enter & save
Define Field selections of RFQ:
As we are aware, field selections will be used to manage fields of RFQ. SAP has
defined standard field selections “ANA” for RFQ standard document type. We
can use standards or we can customize our own field selections, same like
document types.
Path
SPRO -> IMG -> Materials management -> purchasing -> RFQ/ quotations ->
Define screen layout at document level -> select ANA line -> click on copy as
icon -> give your own field selection, maintain field selection description ->
enter -> double click on your own field selection -> double click on field
selection groups -> manage fields of RFQ -> go back (2 times) -> save
Go back to RFQ document type screen -> click on positions -> give your own
document type -> enter -> assign your own field selection -> enter -> save.
Client’s Role in RFQ
Under this heading, we will learn how to create RFQs but in real time project,
client’s purchasing department will create RFQs and we consultants have to
provide training.
Possibilities of creating RFQs:
We can create RFQs in following ways.
1. RFQ WRT PR (WRT – with reference to)
2. RFQ WRT outline agreement (contracts)
3. RFQ without any reference.
Creation of RFQ WRT PR:
If we create RFQ wrt PR then system will copy data from PR to RFQ screens
automatically. We can create multiple RFQs to multiple vendor wrt to one PR.
T. code: ME41
Path:
SAP easy access screen -> SAP menu -> logistics -> material management ->
purchasing -> RFQ/ Quotation -> Request for quotation -> ME41-Create ->
enter
Create RFQ: Initial screen:
I. RFQ type: In this field, we have to select RFQ document type.
II. Language Key: Maintain language key as EN (English)
III. RFQ date: In this field, we have to maintain Quotation/RFQ request
date.
IV. Quotation Deadline: In this field, we have to maintain quotation/RFQ
expiry date. Vendor should submit quotations on or before this date
only.
V. RFQ: In this field, we have to maintain RFQ number manually if we are
using external number range or else leave this field blank, if we are using
internal number range.
VI. Purchasing organisation and Purchasing group: Maintain purchase
organisation and purchasing group.
Click on “reference to PReq” option -> give PR number -> enter
Create RFQ: Header data
I. Coll. No. (Collective number): In this field, we can maintain serial
number just for reference purpose. (We can maintain here numbers up
to 10 digits)
Create RFQ: selection list: Purchase Requisition:
Here system will display PR details. Select PR line item -> Click on “Adopt +
details” icon.
Create RFQ: Item 00010:
I. Delivery date: Maintain delivery date. It should be greater than
quotation deadline date.
Create RFQ: Item overview:
Here system will copy from PR to RFQ screen.
Click on Vendor address icon
Create RFQ: Vendor address:
Give vendor code to whom you are requesting quotations.
Press enter and save.
Creation of RFQ without any Reference:
If we create any RFQ without any reference, then we need to maintain all data
manually.
Go to T. Code ME41
Create RFQ: Initial screen:
I. RFQ type: In this field, we have to select RFQ document type.
II. Language Key: Maintain language key as EN (English)
III. RFQ date: In this field, we have to maintain Quotation/RFQ request
date.
IV. Quotation Deadline: In this field, we have to maintain quotation/RFQ
expiry date. Vendor should submit quotations on or before this date
only.
 V. RFQ: In this field, we have to maintain RFQ number manually if we are
using external number range or else leave this field blank, if we are using
internal number range.
VI. Purchasing organisation and Purchasing group: Maintain purchase
organisation and purchasing group.
After maintaining all the above field, Press enter key.
Create RFQ: Header data:
Maintain collective number. Again, press enter key.
Create RFQ: Item overview:
Maintain RFQ date, quotation date. Maintain material number, quantity and
delivery date.
Click on vendor address icon.
Create RFQ: Vendor address:
Give vendor code to whom we are requesting quotations. Press enter and all
details will copy from vendor and then save.
T. codes:
ME41 – Create RFQ
ME42 – Change RFQ
ME43 – Display RFQ
ME45 – Release RFQ
ME4M – List of RFQs by material
ME4L - List of RFQs by vendor
ME4C - List of RFQs by Material group
ME4S - List of RFQs by collective number
ME4N - List of RFQs
ME9A – RFQ print
Tables – SE16N
EKKO – Purchasing header data
EKPO – Purchasing item data
** Above table will store all the external purchasing documents data including
RFQ. (PO, Contracts, Scheduling agreement and RFQ)
Note: After creating RFQs, clients will take the printouts and they will send it to
vendors through email for submitting quotations.

Quotations
After requesting Quotations to vendor by issuing RFQ document, in reply to
RFQ vendor will submit quotations through email, fax, courier or directly
vendor will submit in company’s purchasing department.
Quotation contains price, terms & conditions of the material offering by the
vendor to company.
Use below T. code or path to maintain quotation in SAP
T. code: ME47
Path:
SAP easy access screen -> SAP menu -> logistics -> materials management ->
purchasing -> RFQ/ quotation -> Quotation -> ME47 – maintain -> enter -> give
RFQ number -> press enter key.
Maintain Quotation: Item overview:
➢ Select RFQ line item and click on “item conditions”.
➢ Maintain PB00 gross price. (PB00 represents gross price code).
➢ Maintain RA01 discount percentage. (RA01 represent discount in
percentage)
➢ Maintain FRA1 freight charges in percentage.
Press enter key -> go back -> save
T. codes:
ME47 – Maintain/ Change Quotations
ME48 – Display Quotations
 Price Comparison Statement
After receiving all the quotations from all the requested vendors then we will
use price comparison statement concept to compare quotations and finalize
the vendor. While comparing quotations, we can include discounts and
delivery costs (freight charges)
T. code: ME49
Path:
SAP easy access screen -> SAP menu -> logistics -> materials management ->
purchasing -> RFQ/ quotation -> Quotation -> ME49 – Price comparison ->
enter.
Price comparison list:
Give your purchasing organisation then give your RFQ number in quotation
field. (We can use multiple selection option)
Activate include discounts and include delivery cost check boxes. Press on
execute and check the price comparison statement.
 Purchase Order (PO)
Purchase order is also called as order document. If we want to procure
material and services then we will place order to vendor in the form of a
document called Purchase Order.
Possibilities of creating PO:
In standard SAP we can create PO in following ways.
1. PO WRT PR
2. PO WRT RFQ
3. PO WRT Contracts
4. PO WRT PO
5. Manual creation of PO (W/o any reference)
Types of Purchase order in SAP:
We have below different types of Purchase orders in SAP standards.
1. Standard PO
2. Third party PO
3. Subcontracting PO
4. Consignment PO
5. Stock transfer order (STO)
6. Service order
Business requirements:
In real time project, client’s creates different types of purchase orders such as
standard PO, domestic PO, Import PO, third party PO, Subcontracting PO,
service PO, Consignment PO, STO etc. we consultants have to provide solution
to show PO differences in SAP system.
Consultant Role in Purchase Order
Define Document Type:
As discussed in PR and RFQ, document type will differentiate types of
purchases in SAP by generating different numbers to each purchase order.
SAP has defined standard document type NB for Purchase order and we
consultants can use standard document type or we can customise our own by
copying standard.
Realtime project document types examples of purchase order:
ZDMP – Domestic purchase
ZIMP – Import purchase
ZSC – Sub contracting purchase
ZTHP – third party purchase
ZSER – Service purchase
ZCON – Consignment PO
ZCAP – Capital Purchase
ZSPR – Spares Purchase
ZCPO – Consumables PO etc.
➢ Company to company PO types may be different
Path:
SPRO -> IMG -> Materials management - > Purchasing -> purchase order ->
Define document types -> enter -> click on position -> give standard document
type NB -> enter -> select NB line -> click on copy as icon -> give your own
document type (4 char), maintain description of document type -> enter ->
click on copy all -> continue -> save.
➢ Document type controls purchase order.
Types of control by PO document types
1. It controls number ranges of PO
2. It controls field selection of PO
3. It allows Item category.
Define number range of PO:
As discussed in PR and RFQ, each document type will have 1 internal and 1
external number range. Number range will be used to identify the POs in SAP.
T. code: OMH6
Path:
SPRO -> IMG -> Materials management -> Purchasing -> purchase order ->
define number range -> enter -> click on change intervals -> insert 2 lines ->
give number range serial numbers, from & To number ranges for both internal
and external (10 digits) -> enter -> save.
Go back to PO document type screen -> click on positions -> give your own
document type -> enter -> assign your number range serial numbers for both
internal and external -> save.
Define Field selections of PO:
As we are aware, field selections will be used to manage fields of PO. SAP has
defined standard field selection “NBF” for purchase order. We can use NBF or
we can customise new field selections by copying standard.
Path:
SPRO -> IMG -> Materials management -> purchasing -> purchase order ->
Define screen layout at document level -> enter -> click on positions -> give
standard field selection “NBF” -> enter -> Select NBF line -> click on copy as
icon -> give your own field selection (4 char), maintain field selection
description -> enter -> double click on your own field selection -> double click
on field selection groups -> manage fields of PO -> go back (2 times) -> save.
Go back to PO document type screen -> click on position -> give your own
document type -> enter -> assign your own field selection to document type ->
enter and save.
Client’s Role in PO
Under this heading, we will learn how to create purchase order but in real time
project purchasing department end user will create the order and we
consultants have to provide training.
Creation of Purchase order (PO) WRT PR:
If we create purchase order WRT PR then system will copy data from PR to PO
screen and we can edit the data, if required and save the PO.
T. code: ME21N – Create purchase order
Steps:
1. Go to t-code ME21N
2. Select document type based on type of purchase.
3. Maintain vendor code, to whom we are placing the order.
4. Maintain Purchasing organisation, purchasing group and company code.
-------------------------------------- Press ENTER ----------------------------------------
PO Item overview:
Drag item overview screen to right and maintain PR number -> press enter key.
➢ System will copy data from PR to PO.
➢ Maintain the required fields like purchase price, delivery dates and other
required fields -> click on check icon and save the PO.
Note:
1. We can create multiple Purchase orders (PO) WRT one PR till PR
becomes 0.
2. We can create one Purchase order (PO) WRT to multiple PRs if we are
buying all PR products with same vendor.

Manual creation of Purchase order:

Under this heading, we will learn how to create purchase order without any
reference.
T. code: ME21N
Path:
SAP easy access screen -> SAP menu -> logistics -> materials management ->
purchasing -> purchase order -> create -> ME21N -> enter -> select document
type -> give vendor code to whom we are placing the order -> give purchasing
organisation, purchasing group and company code -> enter

PO Item Overview:
Under this item overview we will maintain list of required materials, qty,
delivery date along with below detailed information.
1. Item: In this field system will generate line-item serial no’s automatically (Ex:
10, 20, 30…. etc)

2. A - Account assignment category: If we are procuring materials for direct

consumption (use) then we have to maintain account assignment category.
Please find below are few standard account assignment categories.

A - Assets
C - Sales order
1 - Third Party
E - Customer individual requirement
F - Order
K - Cost centre
N - Network
P - Project
Q - Project, make to order.

As of now leave this field blank because we are buying this material for stock.

3. I - Item category: maintain item category (Blank - Standard).

4. Maintain required material code

5. Material Description: In this field system will copy material description from
material master.

6. Maintain PO quantity

7. OUn - Order unit: In his field system will copy order unit from PIR or from
material master

8. Delivery date: In this field we have to maintain material required date. If we

leave this field blank then system will take PO creation date as delivery date.

9. Maintain net price

10. currency will copy from PO header data - invoice tab.

11. Material group: In this field system will copy material group from material
master
12. Maintain plant and storage location.

13. Info record: In this field system will copy info record number automatically
if we maintain info record for the PO vendor and material. System will data
from info record to PO if info record is available

14. R - Return Items: If we want to return materials back to vendor by creating

return purchase order then activate this field. If we activate this field then
standard purchase order will become return purchase order.

If we are buying materials then leave this field blank.

15. F - Free Items: If we are getting any materials free from vendor then
activate this field.

16. Purchase requisition and requisition item: In this field we will give PR
number if we want to create PO WRT PR.

17. Outline agreement and contracts item: In this field we will maintain
contacts number and contracts item if we want to create PO WRT contracts.

18. RFQ and RFQ item: In this field we will maintain RFQ and item number if
we want to create PO WRT RFQ.

19. Purchasing and item: In this field we will maintain PO number if we want
to Create PO WRT PO.

PO header data:

The data maintained in header level is applicable to whole document. (Entire

purchase order)

1. Delivery/ Invoice tab:

I. Payment terms/ incoterms/ currency: These fields will copy from
vendor master if required we can edit here.
II. Exchange rate: If order currency is different from company code
currency, then in this field system will copy currency exchange rate from
OB08 T. code. In this OB08 T. code finance team will maintain currency
exchange rates. Ex: 1USD = 75 INR
2. Conditions tab: In this tab, we can check total purchase order values.
3. Text Tab:
In this tab we can maintain text if it is applicable to ensure purchase order
by selecting text type.
4. Address:
In this tab, address will copy from vendor master.
5. Communication:
Sales person/ Telephone: These fields will copy from vendor master.
6. Partners tab:
In this tab we have to maintain partner function codes if multiple people
are involving in selling of one product.
7. Additional data:
Valid start and valid end: In this field, we can extend PO validity dates.
8. Organisation data:
In this tab, we have to maintain organisation levels immediately after
maintaining vendor. In this tab we will maintain purchasing organisation,
purchasing group and company code.
9. Status tab:
In this tab we can check current status of PO.
10.Payment processing tab:
DP category:
If we want to make down payment (advance payment) to the vendor, then
in this field select mandatory down payment then press enter, maintain
down payment percentage & due date (last date of payment). Down
payment calculates automatically based on PO total value when we click on
check icon.

PO Item data:

We have to maintain PO item data for every material available in the purchase
order.

1. Material data:
In this tab, we can check material information.
2. Quantity/ weighs:
In this tab we can maintain PO quantity which will copy to item overview
or vice-versa.
3. Delivery schedule:
In this tab, we can maintain multiple delivery dates for one material
along with quantity.
4. Delivery tab:
Over delivery, under delivery, unlimited delivery tolerance and 1st, 2nd, 3rd
reminders:
These fields will copy from purchasing info record if it is available or else
from material master.
Stock type:
As we know we have 3 different types of stocks in MM.
I. Unrestricted stock
II. Quality stock
III. Blocked stock

In this field, we will check what type of stock we are buying.

Goods receipt: This field is in active which is copied from item category. If
this field is in active mode, then system will expect goods receipt for this
purchase order.

Delivery completion: If we don’t want to receive the materials from vendor

and you want to close the purchase order, then activate this field manually.

5. Invoice tab:
Invoice Receipt: If we activate this field then system will expect invoice
posting (MIRO) against this purchase order.
Final Invoice: If we activate this field then system will come to know that
we received final invoice from vendor.
GR Bsd.Inv: This field will copy from purchasing info record or from vendor
master.
Tax code: In this field system will copy tax code from PIR or we can
maintain tax code here to calculate tax or tax code can be selected in
invoice screen.
6. Conditions tab:
In this tab, we will maintain material prices like gross price, discounts,
freight charges etc.
7. Texts tab:
In this tab, system will copy texts from material master, PIR & PR. We can
add new text here by selecting text types. We consultants can add new text
types to fulfil client requirements by using below path.
SPRO -> IMG -> materials management -> purchasing -> purchase order ->
text for purchase orders -> define text type for item text/ header text ->
enter -> continue -> click on new entries -> give serial number, maintain
text type -> enter and save
8. Address tab:
Vendor will deliver the materials to the address maintained in this tab. In
this tab address will copy from plant.
9. Confirmations tab:
Acknowledgement required:
This field will be copied from PIR or material master.
10.Condition control tab:
Print price: If we activate this field, then system will print material price on
print out.

After maintaining all required fields and tabs, now determine the output type.

Output determination:

1. Click on messages icon

2. Give output type NEU
3. Maintain medium printout
4. Maintain language key – EN
5. Press enter key
6. Click on communication method
7. Give your printer number. As of now for practice give standard printer
LP01.
8. Activate print immediately, maintain number of copies.
9. Press enter key -> go back -> click on print preview to check the print.

** Click on check icon if there are no errors in PO then save it. System will
generate PO number at left bottom of the screen.

** After PO creation we will send PO to vendor via emails and vendors supply
goods to company. Company will perform GR. (Inventory management)

T. codes:

ME21N – Create Purchase order

ME22N – Change Purchase order

ME23N – Display Purchase order

ME28 – Release Purchase order collectively

ME29N – Release Purchase order individually

ME9F – PO print

MEMASSPO – Mass Maintenance

ME2L – List of Purchase orders by vendor

ME2M – List of Purchase orders by material

ME2K – List of Account assignment POs

ME2J – List of Project Purchase orders

ME2C - List of Purchase orders by material group

ME2N - List of Purchase orders

ME1P – Purchase order history (POH)

Tables – SE16N

EKKO – Purchasing header data

EKPO – Purchasing item data

EKBE – Purchasing history

EKKN – Account assignment Purchasing

EKE1 – Purchasing schedule lines (Delivery dates)

EKPA – Purchasing partner roles

 Inventory management
Inventory Management is a sub module in SAP MM and its component SAP
MM – IM. Procurement process starts with purchase requisition and ends with
goods receipt from vendor. After receiving goods from vendor, they need to be
stored under company’s location (storage location) so that we can use
whenever we required. Inventory management deals with placing and handling
the stock received from vendor.
Points to be noted in Inventory:
1. IM deals with managing stock either quantity or value basis.
2. Goods movement creates a document which updates quantity and value in
the inventory books called material document.
3. Material document number range length is 10 digits.
Terms of Inventory management:

Movement types

Good Receipt (GR)

Terms of IM

Reservation

Goods issue (GI)

Movement types: OMJJ

Each and every goods movement will be identified with a 3-digit code called
movement type. SAP has defined below standard movement types to use in
regular business activities.
101 – Goods Receipt WRT PO
102 – Cancel GR
103 – GR WRT PO to blocked stock
105 – Release from GR blocked stock
122 – Return delivery to vendor
124 – Return delivery to vendor from GR blocked.
161 – Goods return to vendor WRT return PO
201 – Goods issue to cost centre
202 – GI cancellation
221 – GI to project
251 – Goods issue to sales (w/o sales order)
261 – Goods issue for an order
281 – Goods issue to network
291 – Goods issue to any account assignment
301 – Plant to plant stock transfer 1 step
303 – Plant to plant stock transfer 2 step (stock removal)
305 – Plant to plant stock transfer 2 step (stock put away)
309 – Transfer posting from material to material
311 – Storage to storage stock transfer 1 step
313 – Storage to storage stock transfer 2 step (stock removal)
315 – Storage to storage stock transfer 2 step (stock put away)
321 – Transfer of stock from inspection to unrestricted
351 – Goods issue to STO (Without shipping)
411 – Transfer of special stock to own stock
411 K – Transfer of consignment to own stock
451 – Return from customer (without shipping)
501 – Goods receipt w/o purchase order
502 – Cancel GR
541 – Stock issue to sub-contracting
543 – Stock Consumption of sub-contracting
545 – Goods receipt of by-product from sub-contracting
551 – Scrapping from unrestricted use
553 – Scrapping from inspection stock
555 – Scrapping from blocked stock
561 – Initial stock upload
581 – Goods receipt of a by-product for network
601 – Goods issue to delivery
641 – GI to STO (shipping) – Intra 2 step
643 – GI to STO (shipping) – Inter 2 step
647 – GI to STO (shipping) – Intra 1 step
645 – GI to STO (shipping) – Inter 1 step
651 – Returns from customer (shipping)
657 – Returns from customer to blocked stock (shipping)
701 – Inventory difference (Physical inventory)
702 – Inventory difference (Physical inventory)
Goods Receipt:
Goods receipt will be performed when the material is produced from the
production department or goods are procured from external vendor and
placed in storage location. When we perform GR then material quantity stock
will increase. Goods receipt is also called as inwards movement of material.
Effects of Goods Receipt:

Material value and Quality

WM Stock Stock
qty will update in Inspection Update
acc1 view

System will
System will
update MAP in Goods Receipt (GR) update PO status
acc view
tab

Batch stock in Material Accounting PO history

MMBE document Document will update

Goods Movement Documents:

Goods Receipt (GR) Goods Movement Goods Issue

Material document Documents Accounting document

Consultant role in Inventory management:
Define Document type:
T. code: OBA7
WE – Goods Receipt
WA – Goods Issue
IB – Physical Inventory
RE – Invoice Receipt
➢ In real time projects we will use only standards, no need to customise new
document types for inventory and invoice.
Define number range:
As we know when we do any goods movement, system will generate material
and accounting document. So, we have to define number range for both.
Define Material document number range:
Material document number range will be created by MM consultants and
accounting document number range will be created by FI consultants in real
time projects.
Material document will be used to identify the goods movement and
accounting documents records the changes in the values of company code
arising from accounting transactions.
Material and accounting document number range length is 10 digits and
internal number range.
T. code: OMBT – Material document number range
Path:
SPRO -> IMG -> Materials management -> Inventory management and physical
inventory -> number assignment -> define number assignment for material and
physical Inv. Docs -> click on maintain groups -> click on create icon -> give
group name (GR/ GI number range), maintain current year, give from & to
numbers (Internal, 10 digits) -> press enter and save -> go back -> click on
control + F -> give your document type WE or WA -> enter -> click on
document type WE or WA -> click on element/ group -> search for group &
double click on the same -> save.
Define number range for accounting document:
As discussed, accounting document number range will be created by FI
consultant in real time project. Number ranges will be defined yearly once with
below series numbers.
T. code: FBN1
Path:
SPRO –> IMG -> Materials management -> Inventory management and physical
inventory -> number assignment -> define number assignment for accounting
documents -> enter -> click on financial account number range -> give your
company code -> click on change intervals -> Insert line -> give serial number
(standard), maintain year, give from and to number range (standard) (Internal,
10 digits) -> enter and save.
Standard number range:
Sl.
Year From To
No
GR 50 Current year 5000000000 5099999999
GI/ TP/ other than GR 49 Current year 4900000000 4999999999
IR 51 Current year 5100000000 5199999999

➢ All number ranges are internal

➢ After maintaining number ranges, save it.
Define field selections:
T. code: OMJN
Path:
SPRO -> IMG -> Materials management -> Inventory management and physical
inventory -> field selection for goods movement initial/ header screens ->
enter -> manage the fields -> press enter and save.
Client’s role in Goods Receipt:
Under this heading we will learn how to perform goods receipt but in real time
project store keeper will perform and we consultants will provide the training
and user manuals.
Possibilities of Goods Receipt:
We can perform goods receipt in following ways.
1. GR WRT PO.
2. GR w/o PO.
3. GR WRT order (production module)
4. GR WRT delivery (SD module)
T. code: MIGO – Goods movement
MIGO_GR – Goods Receipt
Goods Receipt WRT Purchase order:
Once we place the order to vendor then he will supply physical products to the
company as per delivery date. Once we receive physical products then client’s
store keeper will perform goods receipt in SAP system. We can perform
multiple times GR WRT one PO till PO quantity becomes Zero. (0)
1. Select Event A01 – Goods receipt
2. Select reference document R01 – Purchase order
3. Give movement type – 101
4. Give Purchase order number
----------------------------------- Press enter ---------------------------------------------
System will copy data from PO to GR screen.
Header data:
1. General Tab:
I. Document date: In this field we have to maintain delivery challan date.
What is Delivery challan (DC)?
Delivery challan (DC) is a supporting document given by the vendors at
the time of goods delivery. In this DC we can see the details of
material, quantity etc.
 II. Posting date: In this field we have to maintain system entry date. As
per SAP we can use current month dates and previous dates as posting
dates.
III. Delivery note: In this field we have to capture delivery challan number.
IV. Bill of lading: It is also a kind of delivery document given by the foreign
vendor customs.
V. Vendor: In this field system will copy vendor from PO.
VI. Header text: In this field we can maintain any information in the form
of text.
2. Vendor Tab:
In this tab system will copy vendor from PO
3. Doc. Info. Tab:
In this tab we can check accounting documents in display mode not in
creation mode.
Item Data:
1. Material tab: In this field tab we can check material details copied from PO.
2. Quantity tab: In this tab we have to maintain physically received quantity
from vendor in field Qty in unit of entry.
3. Where tab: In this field we have to maintain following details.
➢ Movement type – 101
➢ Plant will copy from PO
➢ Storage location will copy from PO if we maintain or else, we can maintain
manually here.
➢ Goods recipient – In this field we will capture store keeper name who
received physical products.
4. Purchase order data: In this tab we can check PO details
5. Partner: In this tab we can check goods supplier partner or vendor code.
6. Batch:
➢ Batch: In this field system will generate batch no. automatically based on
batch settings. Batch number will generate when we click on check icon.
➢ Date of manufacture: In this field, we have to maintain material
manufacture date. this date we will get it on product packing.
After maintaining all required fields and tabs then activate ITEM OK check box
then click on check icon and if document is Ok then click post. Once document
is posted, system will generate material document and accounting document.
(We can check accounting document only in display mode)
Errors in GR:
Posting period error:
• Go to T. code MMRV
• Give your company code and press enter. Check the current period and
year. If it is not current year and current month, then we have to open
current year and current period posting periods.
• Go to T. code MMPV, give period and fiscal year which is next to
system’s current period then execute and press enter. A period
conversion message will be displayed. Same process to be repeated until
we reach the actual current period and year.
Account determination error:
• go to T. code OBYC
• double click on transaction ID (BSX…. etc)
• give chart of account Int (Int is standard copied from company code
1000) and press enter
• type your valuation class and maintain G/L account, press enter and
save.
How to check accounting document number after goods movement:
➢ Go to T. code MIGO
➢ Select event – display
➢ Select reference document material document
➢ Maintain material document then press enter
➢ Go to doc. Info. Tab
➢ Click on FI document options
➢ Double click on accounting document and check the accounting entries.
GR WRT PO accounting entries are as below:
BSX – Inventory A/c – Dr (+)
WRX – GR/ IR clearing A/c – Cr (-)
FR1 – Freight charges A/c – Cr (-) ______ (Only If we maintain freight in PO)

** Moving average Price (MAP) – Material total value/ material total stock
(We can check this in accounting 1 view of material master)
GR W/O PO:
Sometimes clients will request goods to vendor over phone based on priority.
In this case we will perform GR without PO after receiving physical goods from
vendor.
1. Go to T. code MIGO
2. Select event goods receipt and reference document – others -> enter
3. Give document date and posting date
4. Go to material tab and maintain material code -> enter
5. Go to quantity tab and maintain GR quantity.
6. Go to where tab and maintain movement type – 501, plant and storage
location.
7. Go to partners tab and maintain vendor code.
8. Go to batch tab and maintain date of manufacture. Batch number will
generate automatically when we click on check icon.
9. Activate item OK then check and post.
Note:
1. Check stock in T. code MMBE
2. GR w/o PO accounting entries are
BSX – Inventory A/c – Dr
GBB – Offsetting entry A/c – Cr
Opening stock entry:
Opening stock entry is also called as initial stock. Closing stock of non-SAP will
be the opening stock of SAP.
1. Go to T. code MIGO
2. Select event goods receipt and reference document – others -> enter
3. Give document date and posting date
4. Go to material tab and maintain material code -> enter
5. Go to quantity tab and maintain GR quantity, add stock value in Amount
in LC field.
6. Go to where tab and maintain movement type – 561, plant and storage
location.
7. Go to batch tab and maintain date of manufacture. Batch number will
generate automatically when we click on check icon.
8. Activate item OK then check and post.
 Note:
1. Check stock in T. code MMBE – MMBE
2. Initial stock upload accounting entries are
BSX – Inventory A/c – Dr
GBB – BSA – Initial stock A/c – Cr

Goods Issue (GI):

Goods issue will take place when materials are consumed to produce finished
goods or goods issue will be done to customers, to other plants of same
company or internal departments etc. when goods issue is done then system
will decrease stock from SAP books and from physical storage location also.
Goods issue to cost centre:
1. Go to T. code MIGO
2. Select event goods issue and reference document – other -> enter
3. Give document date and posting date.
4. Go to material tab and maintain material code -> enter
5. Go to quantity tab and maintain goods issue quantity.
6. Go to where tab and maintain movement type – 201, plant and storage
location.
7. Go to account assignment tab and give cost centre.
8. Activate item OK then check and post.
Note:
1. Check stock in T. code MMBE
2. Goods issue to cost centre accounting entries are
BSX – inventory A/c – Cr
GBB – VBR – Off setting entry A/c – Dr (Consumption A/c)
Reservation:
Reservation will be used to block the stock for future use. Reservations can be
created by any departments who requires materials.
Consultant Role:
Define number range for Reservation:
T. code: OMC2
Path:
SPRO -> IMG -> Materials management -> inventory management and physical
inventory -> number assignment -> define number assignment for reservations
-> enter -> click on interval -> click on change intervals -> insert line -> give
your own serial number, maintain from and to number range (10 digits,
internal) -> press enter and save -> go back (2 times) -> No. range res/ dep. rq
-> assign your number range serial number -> enter and save.
Create Reservations:
T. code: MB21
Path:
SAP easy access screen -> SAP menu -> logistics -> materials management ->
inventory management -> Reservation -> MB21 – create -> enter -> maintain
base date -> maintain movement type ->
201 – Cost centre
221 – Project (PS)
261 – Order (PP)
281 – Network (PS)
Maintain plant -> enter -> maintain cost centre -> enter -> maintain material
code, quantity, storage location, maintain batch number manually by copying
from MMBE -> enter and save the reservation.
T. codes:
MB21 – Create Reservation
MB22 – Change Reservation
MB23 – Display reservation
MB25 – List of reservations

Tables – SE16N
RESB – Reservation
• We can check reservation stock in T. code MMBE along with MB25.

Goods issue against Reservation:

1. Go to T. code MIGO
2. Select event goods issue and reference document – Reservation -> give
reservation number -> enter
3. System will copy data from reservation to goods issue screen
4. Go to quantity tab and maintain goods issue quantity
5. Active Item OK then check and post.
Note:
1. Check reservation stock in T. code MMBE and MB25.
2. Goods issue against reservation accounting entries are
BSX – Inventory A/c – Cr
GBB – VBR – off setting entry A/c – Dr (Consumption A/c)
T. codes and Tables of Inventory management:
MIGO – Goods movement
A01 – Goods Receipt
A02 – Return delivery
A03 – Cancel material document
A04 – Display material document
A07 – Goods issue
A08 – Transfer posting
MB1A – Goods issue
MB1B – Transfer posting
MB1C – other than goods receipt
MB02 – Change material document
MB03 – Display material document
MBRL – Reverse material document
MBST – Cancel material document
MB51 – List of material documents
MB52 – Stock list with value
MMBE – Stock overview
MBBS – List of special stock
MB5B – Stock on posting date
MB5M – Shelf-life stock (expiry stock)
MMRV – Check and open previous posting periods
MMPV – Open MM posting periods
OB52 – FI Posting periods
OMJJ – Movement types
Tables – SE16N
MKPF – Material document header data
MSEG – Material document item data
BKPF – Accounting document header data
BSEG – Accounting document item data
MATDOC – Material document (S4 HANA table)
ACDOCA – Accounting document (S4 HANA)
 Controlling module
Controlling is one of the modules available in SAP, it provides the information
to the management or to decision maker to understand where company’s
money is spent.
CO module integrates with other modules like MM, SD, PP, FI etc.
Components of controlling module:
1. Cost centre accounting
2. Cost element accounting
3. Profit centre
4. Internal order
5. Product cost controlling
6. Activity based costing
The controlling module helps to schedule, monitor, execute and report on cost.
CO module takes care of cost management.
Controlling module organisational structure:
Maintain controlling area:
Controlling area is an organisational unit that represents a closed system used
for cost accounting purpose.
Controlling area will be assigned to multiple company codes to handle
different currencies.
Path:
SPRO -> IMG -> enterprise structure -> definition -> controlling -> maintain
controlling area -> enter -> double click on maintain controlling area line ->
click on new entries -> click on CoArea = CCode -> give your company code ->
enter -> system will copy data from company code to controlling area data
screen -> maintain assignment control 1 (Controlling area same as company
code) -> press enter and save
Assign company code to controlling area:
We can assign controlling area to multiple company codes.
Path:
SPRO -> IMG -> enterprise structure -> assignment -> controlling -> assign
company code to controlling area -> enter -> click on position -> give your
controlling area -> enter -> select controlling area line -> double click on
assignment of company codes -> click on new entries -> assign your company
code -> enter and save
Cost centre:
Define/ maintain cost centre:
Cost centre is the exact location where the costs are occurred inside the
company. The main purpose of cost centre is used to track expenses of the
company. Each and every work will be created as cost centre in SAP.
Ex: HR expenses, IT expenses, manufacturing expenses, machinery expenses
etc.
T. code: KS01
Path:
SPRO -> IMG -> enterprise structure -> definition -> controlling -> create cost
centre -> double click on create cost centre -> give controlling area -> enter ->
maintain cost centre (10 CHAR), maintain cost centre valid From and To dates
-> enter -> maintain cost centre name/ description, maintain person
responsible (Ex: site engineer), maintain cost centre category 1, maintain
hierarchy area H1, maintain currency INR -> enter and save
T. codes:
KS01 – Create cost centre
KS02 – Change cost centre
KS03 – Display cost centre
KS04 – Delete cost centre
 Logistics invoice verification – LIV
Logistics invoice verification is a part of P2P cycle. It is situated at the end of
procurement that includes purchasing and inventory management.
Every company require materials and services to fulfil their business needs.
Once materials are purchased from vendor then those material will be stored
in company’s location through goods receipt. We need to make payment for
received goods to the vendor. The amount to be paid along with the details of
materials, qty will be provided by vendor in the form of document called
invoice/bill. Before making the payment, we will verify the invoice with PO and
GR (it is also called as 3 Phase in MM). the process of verifying invoice before
making payment is called Logistics invoice verification.
Points to be noted in invoice verification:
1. Invoice verification marks the end of procurement after PO and GR.
2. Invoice posting updates all finance documents.
Terms of LIV
LIV deals with following terms
1. Posting vendor invoice
2. Blocked invoice
Consultant Role
Define number ranges for invoice posting:
T. code: OMRJ
Path:
SPRO -> IMG -> materials management -> logistics invoice verification ->
incoming invoice -> number assignment -> maintain number assignment for
logistics document -> maintain number range intervals for invoice document ->
enter -> click on change intervals -> insert line -> give serial number, maintain
year, give from and to number range (Internal, 10 digits) -> enter and save.
Go back (2 times) -> select transaction - assignment number range -> enter ->
assign number range serial number to RD & RS transactions -> enter -> save.
Client’s role
Post vendor Invoice:
Posting of vendor invoice will be done after goods receipt. The invoice received
from the vendor will be verified with cost, quantity, quality. If all are matching
then clients will enter invoice in SAP system against PO.
T. code: MIRO
Path:
SAP easy access screen -> SAP menu -> logistics -> materials management ->
logistics invoice verification -> document entry -> MIRO – enter invoice ->
enter.
Enter incoming invoice: company code (screen)
Give company code and enter.
Select transaction as Invoice
Invoice header data:
1. Basic data tab:
I. Invoice date – In this field, we have to maintain invoice date maintained
on invoice copy.
II. Posting date – In this field, we have to maintain invoice entry date in
SAP system
III. Reference – In this field, we can capture invoice number.
2. Payment tab:
I. Baseline Dt – In this field we have to maintain payment due date.
II. Pmnt block – In this field we have to select blocked for payment option
if we want to block the invoice or else select free for payment option (no
block)
3. Details tab:
Unpl. Del. Csts (unplanned delivery costs)
What is delivery cost??
The amount spent on procurement of material other than material price is
called delivery cost.
EX: freight charges, loading and unloading charges, packing charges etc.
We have 2 types of delivery cost.
I. PDC – Planned delivery cost
 II. UDC – Unplanned delivery cost
If the delivery cost is maintained at PO level in condition tab, then it is
called planned delivery cost which we know at the time of order.
If we don’t know the delivery cost at the time of order (PO) but we came to
know at the time of invoice then it is called UDC – unplanned delivery cost,
we will maintain UDC in details tab of invoice in unplanned delivery cost
field. This will add to payment field.
4. Tax tab: In this tab, we can check tax amount.
5. Contacts tab: In this tab, we can check end user details.
Item data:
PO reference tab:
Maintain PO number and press enter. System will copy data from PO to invoice
screen based on GR.
➢ Go back to basic data tab again, select tax code ‘V0’ and activate calculate
tax check box to calculate tax amount.
➢ Copy Balance amount and paste it in Amount field and press enter, if
balance amount becomes zero with indicator in green colour, then click on
simulate icon and post it.
** After posting invoice in SAP system then purchasing team will handover
original invoice copies to FI and finance will make payment.
LIV T. codes:
MIRO – Post vendor invoice
MIR4 – Display Invoice
MIR5 – List of Invoices
MIR6 – Invoice overview
MIR7 – Park invoice
MRBR – Release blocked invoice
MR8M – Cancel invoice
MR90 – Invoice output
LIV Tables – SE16N
RBKP – Invoice header
RSEG – Invoice item

Sales and distribution module (SD)

Sales and distribution is one of the functional module available in SAP. This
module helps in capturing material information & customer information.
Organisations will use this information to sell the product, delivery and billing.
Business process of SD:
What is SD cycle in SAP?
SD cycle means it is the order to cash (O2C) is from sales to delivery to billing.
OTC – Order to Cash

Sales order Checking Outbound Transportation Goods

or order availability delivery Pickup
release

Payment/ Billing Goods

cash Issuing

SD Organisation Data:
1. Company (6 CHAR)
2. Company code (4 CHAR)
1 & 2: Here Organizational level will be created by FI consultants In
Realtime projects
3. Sales organization (4 CHAR)
4. Distribution channel (2 CHAR)
5. Division (2 CHAR)
6. Shipping point (4 CHAR)
3, 4, 5 & 6: These organizational levels will be created by SD
consultants in Realtime projects
Define sales organisation
Client’s sales department will be created as sales organisation in SAP. Sales
organisation will be used to sell products & services to the customers.

Path:
SPRO -> IMG -> Enterprise structure -> definition -> sales and distribution ->
define, copy, delete, check sales organisation -> enter -> double click on define
sales organisation line -> select 0001 sales organisation line -> click on copy as
icon -> give your own sales organisation (4 CHAR), maintain description ->
enter -> maintain sales organisation address in detail -> enter and save.
Define Distribution channel:
Distribution channel is used to send the goods and services to the customer.
Path:
SPRO -> IMG -> enterprise structure -> definition -> sales and distribution ->
define, copy, delete, check distribution channel -> enter -> double click on
define distribution channel -> click on new entries -> give distribution channel
(2 CHAR), maintain description -> press enter and save.
Division:
Division is same like material group. Material group is used for MM and
division is used for SD.
The materials with same features dividing individually is called division.
Ex: FG – finished goods, TG - Trading goods etc
Path:
SPRO -> IMG -> Enterprise structure -> definition -> logistics general -> define,
copy, delete, check division -> enter -> double click on define division -> click
on new entries -> give division (2 CHAR), maintain description -> press enter
and save.
Define shipping point:
Shipping point is a place/ location where goods & services are delivered to the
customer.
Path:
SPRO -> IMG -> Enterprise structure -> logistics execution -> define, copy,
delete, check shipping point -> enter -> double click on define shipping point ->
click on new entries -> give shipping point (4 CHAR), maintain description ->
maintain factory calender 01 -> click on address icon and maintain address
details -> press enter and save the shipping point.
Assignment of SD organisation structure
Assign sales organisation to company code:
We can assign multiple sales organisations to one company code.
Path:
SPRO -> IMG -> Enterprise structure -> assignment -> sales & distribution ->
assign sales organisation to company code -> enter -> click on positions -> give
your sales organisation -> enter -> assign company code -> enter & save.
Assign distribution channel to sales organisation:
We can assign multiple distribution channels under one sales organisation.
Path:
SPRO -> IMG -> Enterprise structure -> assignment -> sales & distribution ->
assign Distribution channel to sales organisation -> enter -> click on position ->
give your sales organisation and assign distribution channels -> enter & save.
Assign Division to sales organisation:
We can assign multiple divisions under one sales organisation.
Path:
SPRO -> IMG -> Enterprise structure -> assignment -> sales & distribution ->
assign division to sales organisation -> enter -> click on new entries -> give
sales organisation & assign division -> enter & save.
Set up sales area:
Sales area = sales organisation + distribution channel + division
Path:
SPRO -> IMG -> Enterprise structure -> assignment -> sales & distribution -> set
up sales area -> enter -> click on new entries -> give sales organisation +
distribution channel + division -> enter & save.

Assign sales organisation – distribution channel – plant:

Path:
SPRO -> IMG -> enterprise structure -> assignment -> sales and distribution ->
assign sales organisation – distribution channel – plant -> enter -> click on new
entries -> give sales organisation, distribution channels & assign plant -> enter
& save
Assign business area to plant/ valuation area and division:
Path:
SPRO -> IMG-> Enterprise structure -> assignment -> logistics general -> assign
business area to plant/ valuation area and division -> enter -> click on new
entries -> give plant, assign divisions and assign business area (0001) -> press
enter and save
Assign shipping point to plant:
Path:
SPRO -> IMG -> enterprise structure -> assignment -> logistics execution ->
assign shipping point to plant -> enter -> click control + F -> give your plant ->
enter -> click on plant -> click on assign icon -> again click control + F -> give
your shipping point -> enter -> activate your shipping point check box -> enter
and save.

Physical inventory
If material stock showing in books and physical stock lying in storage/
warehouse are not same due to various reasons like missing of GR, missing GI
entry in SAP etc. then we will use physical inventory concept to match both.
Once physical inventory is done, book stock and physical stock must be same.
Types of Physical inventory:
1. Periodic inventory (Once in a year)
2. Continuous inventory (every month materials will be counted)
3. Cycle counting (Slow moving, fasting moving)
4. Inventory sampling (random material)
Steps involved in physical inventory document:
1. Create physical inventory document (MI01)
2. Enter count result (MI04)
3. Post the difference (MI07)
Create Physical inventory document:
Under this heading we will add list of materials to be counted along with the
count date, plant, storage location & batch number
T. code: MI01
Path:
SAP easy access screen -> SAP menu -> logistics -> materials management ->
physical inventory -> physical inventory document -> MI01 – create -> enter
➢ Give document date (PI creation date)
➢ Give Planned count date
➢ Maintain plant and storage location
➢ Activate the required check boxes (Batch w. del flag check box is mandatory
in our practice)
➢ Press enter key
➢ Give material code which you want to count, maintain batch then enter and
save.
T. codes:
MI01 – Create Physical inventory
MI02 – Change Physical inventory
MI03 – Display Physical inventory
Note: Once physical inventory is created storekeeper will count the physical
stock of a material on count date and they will maintain the count result in SAP
system.
Enter the count result:
T. code: MI04
Path:
SAP easy access screen -> SAP menu -> logistics -> materials management ->
physical inventory -> inventory count -> MI04 -> enter
➢ Give physical inventory number and enter
➢ Maintain count result quantity, press enter and save.
T. codes:
MI04 – Enter count result
MI05 – Change count result
MI06 – Display count result/ check history
Note: If books stock and physical stock are not same then we will post the
difference to make both same.
Post the difference:
T. code: MI07
Path:
SAP easy access screen -> SAP menu -> logistics -> materials management ->
physical inventory -> difference -> MI07 – post -> enter
➢ Give physical inventory number and press enter
➢ Maintain reason for stock difference and save.
Movement types:
701 – Inventory difference (Books stock is less than physical stock)
702 - Inventory difference (Books stock is more than physical stock)
Split Valuation:
Split valuation will be used to maintain multiple prices (values) for one product
in one plant.
Ex: If we are buying products from external and manufacturing internally will
have different prices and if our clients want to capture both the prices then we
will go for split valuation concept.

Consultant steps in Split valuation:

1. Activate split valuation – OMW0
2. Configure split valuation – OMWC
2.1 Maintain valuation type
2.2 Valuation category
2.3 Assign category to valuation area

1. Activate Split valuation:

T. code: OMW0
Path:
SPRO -> IMG -> Materials management -> valuation and account
assignment -> split valuation -> activate split valuation -> enter
➢ Click on split material valuation active radio button then press enter and
save.
2. Configure Split valuation:
T. code: OMWC
Path:
SPRO -> IMG -> Materials management -> valuation and account
assignment -> Split valuation -> configure split valuation -> enter
➢ Click on global types (valuation type) (we have to create no. of valuation
types based on no. of prices we want to maintain)
➢ Click on global types and click on create icon
➢ Maintain valuation type, maintain external purchase order allowed (2),
maintain account category reference -> press enter -> click on create and
save.
➢ Go back (2 times) -> click on global categories (valuation category, we will
create group with 1 CHAR and in this group, we will assign valuation types)
➢ Click on create -> give valuation category, maintain description -> press
enter -> click on create icon and save.
➢ Go back, click on Types - cat., -> search your valuation types -> click on your
valuation type -> click on activate icon and save.
➢ Click on cat. → OUs [in this step we will assign valuation category to
valuation area (plant)]
➢ Search your plant -> click on plant -> click on activate and save.

Clients Role in split valuation:

➢ Create material by using T. code MM01 and maintain all the required views.
➢ In accounting 1 view, maintain valuation category along with valuation
class, maintain price control and price.
➢ Save the material.
Extend material to valuation type
➢ Go to T. code MM01 and press enter, select accounting1 view then give
plant, select your valuation type and press enter.
➢ Maintain valuation class, price control and price then press and save.
Client’s role – 2:
Create PO by using T. code ME21N, maintain all required fields. Go to delivery
tab and maintain valuation type. Click on check and save the PO.

Transfer Posting:
Transfer posting will be used to transfer goods from one plant to another or
one storage location to another or one stock type to another stock type etc.
In transfer posting, physical movement of goods is not mandatory. Transfer
posting will change the stock in SAP books.
Types of transfer postings:

Stock type to stock type

Plant to plant
Transfer postings

Storage to storage

Material to material

Stock type to stock type:

In SAP MM – IM module we have 3 different types of stocks as mentioned
below.
I. Un restricted (No restrictions, anyone can use)
II. Quality stock (Quality inspection is pending)
III. Blocked stock (Restricted stock)
If we want transfer goods between any stock type then we will use transfer
posting concept in SAP.
We can use T. codes – MB1B or MIGO for transfer posting but in SAP HANA we
have to use only MIGO because MB1B is removed.

Un-restricted
stock

Blocked stock Quality stock

 Quality to Un-restricted

Stock type to Quality to blocked

stock type
Blocked to quality

Blocked to un-restricted (Etc.)

Quality to Unrestricted transfer posting:

Go to T. code MB1B, give document and posting date -> maintain document
header text (quality to unrestricted) -> give movement type, plant and storage
location -> press enter -> give material code, transfer posting quantity, batch
and press enter & save.
Note:
1. Check stock in T. code MMBE
2. No accounting entries.

Plant to plant transfer posting:

If you want to transfer stock from one plant to another plant without any
document creation then we will go for transfer posting concept. If you want to
transfer stock from one plant to another plant physically with proper
documentation then we will go for stock transfer order (STO).
➢ Go to T. code MIGO -> select event transfer posting and reference
document as other -> give movement type 301 and press enter -> give
document and posting date -> maintain document header text (plant to
plant)
 Transfer posting:

From Destination
Material code will copy
Material Give material code
automatically
Give receiving plant,
Give plant, storage
storage location & press
location and supply
enter and then give
batch
receiving batch
➢ Maintain transfer quantity
➢ Activate Item OK check box, check and post.
Note:
1. Check stock in T. code MMBE
2. Plant to plant accounting entries are as follows.
BSX - Inventory A/c – Dr.
BSX - Inventory A/c – Cr.
Storage to storage transfer posting:
If we are transferring stock from one storage location to another storage
location within the same plant then will go for storage location to storage
location transfer posting.
➢ Go to T. code MIGO -> select event transfer posting and reference
document as other -> give movement type 311 and press enter -> give
document and posting date -> maintain document header text (storage
location to storage location)

From Destination
Give material code,
Material code & plant
Material plant & storage
will copy automatically
location
Give transfer storage
Give storage location
location

Maintain batch Maintain batch

➢ Maintain transfer quantity

➢ Activate Item OK check box, check and post.
Note:
1. Check stock in T. code MMBE
2. No accounting entries
Material to material transfer posting:
Material to material transfer posting will be used mainly to transfer material
stock from one batch to another batch.
Go to T. code MIGO -> select event transfer posting and reference document
as other -> give movement type 309 and press enter -> give document and
posting date -> maintain document header text (Material to material)

From Destination

Maintain supply
Material Maintain Material code
material code

Plant and storage

Give supplying plant &
location will copy
storage location
automatically
Maintain supplying Maintain receiving
batch batch
➢ Maintain transfer quantity
➢ Activate Item OK check box, check and post.
Note:
1. Check stock in T. code MMBE
2. No accounting entries
 Batch Management
If we want to procure/ produce materials in batches then we will go for batch
management concept. In some projects, batch will be configured by PP
consultants.
Consultant settings in batch management:
1. Activate batch status management:
T. code: OMCS
Path:
SPRO -> IMG -> logistics general -> batch management -> specify batch level
and activate status management -> enter -> click on batch status
management -> click on activate radio button and save. (Go back)
2. Define batch level:
We can maintain batch in following levels.
I. Batch unique at plant level
II. Batch unique at material level
III. Batch unique at client level for a material
By default, SAP will activate batch unique at material level.
T. code: OMCE
Path:
SPRO -> IMG -> logistics general -> batch management -> specify batch
level and activate status management -> enter -> click on batch level ->
Activate Batch unique at material level -> save.
3. Activate internal batch number assignment:
T. code: OMCZ
Path:
SPRO -> IMG -> logistics general -> batch management -> batch number
assignment -> activate internal batch number assignment -> enter -> double
click on activate batch number assignment -> click on activate radio button
and save -> go back -> double click on internal batch number assignment for
assigned goods receipt -> click on position -> give your plant -> activate Bch.
No. automatic f. GR. W. acct check box -> save.

4. Maintain internal batch numbers:

T. code: OMAD
 Path:
SPRO -> IMG -> logistics general -> batch management -> batch number
assignment -> Maintain internal batch number assignment range -> enter ->
maintain batch object (BATCH_CLT) -> click on ranges -> click on change
intervals -> insert line -> give serial number 01, maintain from and to
number range (10 digits, internal) -> press enter and save.
Client’s Role in Batch management:
Create material by using T. code MM01 and activate batch management in
purchasing view.
T. codes:
MSC1N – Create Batch
MSC2N – Change Batch
MSC3N - Display Batch
MSC4N - Changes
Tables – SE16N
MCHA – Material Batches
MCHB – Batch stocks

OBYC – Automatic Account determination (AAD)

In Procurement process, cost of goods and services will involve which need to
make payment to vendor by the company. The cost being paid to vendor must
be posted in the organisation system in a correct G/L account. It is very difficult
to find correct G/L account every time during procurement so it may lead in
wrong selection of G/L account. To avoid these manual selections, we will go
for automatic account determination concept.
In AAD, system will select G/L accounts automatically based on following
setting and in real time these settings will be done by FI consultants.
1. Define valuation control – OMWM
2. Group together valuation areas – OMWD
3. Define Valuation class – OMSK
4. Configure automatically posting – OBYC
1. Define valuation control:
T. code: OMWM
Path:
SPRO -> IMG -> Materials management -> valuation and account
assignment -> account determination -> account determination without
wizard -> define valuation control -> enter -> click on valuation grouping
code active radio button -> save
2. Group together valuation area:
Valuation area can be grouped together and can be assigned to one
grouping code, if they belong to same G/L accounts.
T. code: OMWD
Path:
SPRO -> IMG -> material management -> valuation and account assignment
-> account determination -> account determination without wizard -> group
together valuation area -> enter -> click on position -> give your plant ->
enter -> maintain valuation grouping code 0001 or leave blank -> save.
3. Define valuation class:
Valuation classes categorises the G/L accounts based on material types.
Ex: Raw material will have different G/L account compared to finished
goods because both the costs will be different.
T. code: OMSK
Path:
SPRO -> IMG -> material management -> valuation and account assignment
-> account determination -> account determination without wizard ->
define valuation class -> enter -> click on valuation class -> click on new
entries -> give valuation class (4 CHAR), maintain account reference
(material type), maintain valuation class description -> enter and save.

4. Configure automatic posting:

AAD related error:
Account determination for entry INT GBB/ BSX/ WRX…….. in 3000/ 7920/
3400 not possible in goods movement.
Solution: If we miss to assign G/L account in OBYC t. code for our valuation
class assigned in material then this error will trigger. In this case we have to
assign G/L account to the transaction keys with valuation class combination
as shown below.
Transaction keys:
BSX – Inventory posting
WRX – GR/ IR cleaning
BSV – Change in stock
GBB – Off setting entry
FR1 – Freight
PRD – Price difference
Etc...

Chart of account – INT (only in Practice)

T. code: OBYC
Path:
SPRO -> IMG -> Materials management -> Valuation and account
assignment -> account determination -> account determination without
wizard -> configure automatic posting -> enter -> click cancel -> click on
account assignment -> double click on transaction -> give chart of account
INT -> enter -> go to new line -> give valuation modifier (0001 or leave
blank) (based on step2), maintain valuation class and assign GL accounts
(copy from previous line for practice) -> enter & save.
 Outline agreement
It is a long-term agreement with the vendor for procurement of materials with
agreed terms and conditions. These terms and conditions are valid only for
certain period of time.
An outline agreement can be of following two types:
1. Contracts
2. Scheduling agreement
Contracts:
Contract is a long-term agreement between vendor and customer (company)
with predefined terms and conditions to purchase materials over certain
period of time. Contracts are in two different types:
1. Quantity contract
2. Value contract
1. Quantity contract: In this type of contract, if the agreement is to
purchase certain quantity of materials in certain period of time from
vendor.
2. Value contract: In this type of contract, if the agreement is to purchase
certain value of materials in certain period of time from vendor.
Consultant Role:
1. Define document type by copying standard WK or MK.
MK – quantity contract; WK – Value contract (same like PO – NB)
2. Define and assign number range to document type
3. Define, manage and assign field selection to document type by copying
standard WKK or MKK.
MKK – Quantity contracts; WKK – Value contracts
Contracts Path:
SPRO -> IMG -> Materials management -> purchasing -> contracts ->
Client’s Role in Contracts
Create contracts:
Under this heading, we will learn how to create contracts but in real time
projects clients end users will create and we consultants have to provide
training.
T. code: ME31K
Path:
SAP easy access screen -> SAP menu -> logistics -> materials management ->
purchasing -> outline agreement -> contract -> ME31K – create -> enter
Create contract: initial screen
• Give vendor to whom we are placing the order
• Maintain agreement type (document type)
• Maintain agreement date (contract starting date)
• Agreement: In this field we have to maintain contract’s number if we are
using external number range or else leave blank if we are using internal
number range.
• Give purchasing organisation and purchasing group.
---------------------Press enter---------------------------
Create contract: Header data
Maintain valid end date (Contracts end date)
------------------------Press enter----------------------------
Create contract: Item overview
Maintain material code, maintain target quantity, maintain price, maintain
plant and storage location. Press enter & save.
T. codes:
ME31K – Create contracts
ME32K – Change contracts
ME33K – Display contracts
ME35K – Release contracts
MEMASSCONTRACT – Mass maintenance
ME9K – Contract print
Creation of Purchase order with reference to contracts:
• Go to T. code ME21N
• Select document type
PO Item Overview:
• Drag your item overview screen to right side and give contract’s number
in outline agreement field and press enter.
• Give quantity, delivery date and price
• Press enter & save the purchase order.
How to check contract history:
• Go to t. code ME33K, give contract’s number and press enter.
• Click on release documentation icon and check the contracts history.
Scheduling Agreement:
It is a long-term agreement between vendor and customer with predefined
terms and conditions to purchase materials over certain period of time with
predefined delivery date.
In contracts delivery dates will be defined by creating purchase orders. But in
scheduling agreement, we will define delivery date at the time of agreement
only, no need to create purchase order.
Consultant Role:
1. Define document type by copying standard LP (Same like PO - NB)
2. Define and assign number range to document type
3. Define, manage and assign field selection to document type by copying
standard LPL.
Client’s Role in Scheduling agreement:
Create scheduling agreement:
T. code: ME31L
Path:
SAP easy access screen -> SAP menu -> logistics -> materials management ->
purchasing -> outline agreement -> scheduling agreement -> create -> ME31L –
vendor known -> enter
Create scheduling agreement: Initial screen
• Give vendor to whom we are placing the order
• Maintain agreement type (document type)
• Maintain agreement date (scheduling starting date)
 • Agreement: In this field we have to maintain scheduling agreement
number if we are using external number range or else leave blank if we
are using internal number range.
• Give purchasing organisation and purchasing group.
---------------------Press enter---------------------------
Create Scheduling agreement: Header data
Maintain valid end date (Scheduling agreement end date)
------------------------Press enter----------------------------
Create scheduling agreement: Item overview
Give material code, quantity, price, plant and storage location.
--------------------------------Press enter and save-------------------------------
T. codes:
ME31L – Create scheduling agreement
ME32L – Change scheduling agreement
ME33L – Display scheduling agreement
ME35L – Release scheduling agreement
MEMASSSA – Mass maintenance
ME9L – scheduling agreement print
Maintain delivery schedule:
Under this heading, we will maintain delivery dates for scheduling agreements.
T. code: ME38 – Delivery schedule
Path:
SAP easy access screen -> SAP menu -> logistics -> materials management ->
purchasing -> outline agreement -> scheduling agreement -> delivery schedule
-> ME38 – Maintain -> enter
• Maintain scheduling agreement number and press enter.
• Select scheduling agreement line item and click on delivery scheduling
icon.
• Maintain delivery dates and scheduled quantity.
 ----------------------Press enter and save------------------------------
T. codes:
ME38 – Maintain/ change delivery schedule
ME39 – Display delivery schedule
ME9E – Print delivery schedule
Outline agreement T. codes:
ME3M – list of agreement by material
ME3L – list of agreement by vendor
ME3N – list of agreements
ME3K – list of account assignment agreements
ME3J – list of project agreements (PS module)
ME3C – list of agreement by material group
Tables – SE16N
EKKO – Outline agreement header data
EKPO – Outline agreement item data
 Condition master Data (Pricing)
Condition master data will be used to maintain prices in purchasing document
like gross price, discounts, freight charges and other charges etc.
Consultant steps involved in pricing procedure:
1. Maintain condition table – M/03
2. Access sequence – M/07
3. Define condition types – M/06
4. Define calculation schema – M/08
5. Schema groups
5.1. Schema group for vendor
5.2. Schema group for purchasing organisation.
5.3. Assign schema group purchasing organisation to purchasing
organisation.
6. Schema determination (Pricing procedure)

1. Maintain condition table:

Condition table will be maintained if we want condition type values
automatically. Condition table are key combination of fields from purchasing
document.
SAP has already defined 1 – 500 condition tables and if we consultants want to
configure new condition tables then we have to use numbers from 501 – 999.
T. code: M/03
Path:
SPRO -> IMG -> materials management -> Purchasing -> conditions -> define
price determination process -> maintain condition tables -> enter -> double
click on create condition table line -> give condition table number (501 – 999) -
> enter -> search fields by using page up and page down keys -> double click on
the same -> click on generate icon -> press enter then click on yes -> click on
local object.
T. codes:
M/03 – Create condition tables
M/04 – Change condition tables
M/05 – Display condition tables
2. Maintain access sequence:
Access sequence is a search strategy it will search key combination from most
specific to most generic.
In this access sequence we will assign condition tables. This access sequence
will be assigned to condition types such as gross price, discounts, freight etc.,
to get automatic price. (value)
M/07 – Maintain access sequence
Path:
SPRO -> IMG -> Materials management -> purchasing -> conditions -> define
price determination process -> define access sequence -> enter -> continue ->
click on new entries -> give access sequence (4 CHAR), maintain description ->
enter (2 times) -> select access sequence line -> double click on access -> click
on new entries -> give serial number, assign condition table -> press enter ->
select condition table line -> double click on fields then press number of enters
based on the number of condition tables available from selected one -> go
back and save.
Note: Condition tables and access sequence will be created only if we want
automatic values for condition types in purchasing documents. If we want
manual price entry then no need to maintain these steps in condition master
data.

3. Maintain condition types:

Condition types are also called as pricing elements and it represents price type
such as gross price, discounts, freight, taxes etc. SAP has defined below
standard condition types which we will use in real time projects.
PB00 – Gross price automatic
PBXX – Gross Price manual
RA01 – Discount % on gross
RA00 – Discount % on net price
FRA1 – Freight %
FRB1 – Freight value
FRC1 – Freight quantity
SKTO – Cash discount
JCDB – Basic Custom duty
If we want any condition type automatically in purchasing documents then we
have to assign access sequence in those condition types.
T. code: M/06
Path:
SPRO -> IMG -> Materials management -> purchasing -> condition -> define
price determination process -> define condition types -> enter -> double click
on define condition type -> click on position -> give standard condition type
(any) -> enter -> select condition type line -> click on copy as icon -> give your
own condition type, maintain description ->
• Assign access sequence if you want condition type value automatically.
• Activate accruals for delivery costs. Accrual field will be activated only to
delivery cost other than gross price & discounts.
• If we activate this accrual to any delivery cost then we will capture those
delivery costs amount in separate GL accounts.
➢ Press enter and save the condition type.

4. Define calculation Schema:

Under calculation schema we will assign condition types in sequence to
calculate material cost in purchasing document.
Calculation schema is also called as pricing procedure.
SAP has defined following pricing procedures:
RM0000 – Domestic pricing
JIMPOR – Imports pricing
But in real time we consultants will create new calculation schema for both
domestic and imports by using below T. code or path.
T. code: M/08
Path:
SPRO -> IMG -> Materials management -> purchasing -> condition -> define
price determination process -> define calculation schema -> enter -> click on
new entries -> give pricing procedure (6 CHAR), maintain description -> press
enter -> select pricing procedure line -> double click on control data -> click
on new entries.

16 Steps in Pricing Procedure

1. Give Step - Serial no. (10,20,30 etc).

2. Maintain counter – Sub step (10.1, 10.2 etc…)
3. Maintain condition types in sequence (check in below table)
4. Description - It will copy from condition types
5. Give FROM No. - from where we have to calculate
6. Give TO No. - till where we have to calculate
7. Activate Manual - if we want to enter condition type manually in PO
then activate this field.
8. Required (Mandatory) - if we activate this field for any condition type
then that will become mandatory in the pricing procedure.
9. Statistical - if we activate this field in pricing procedure for any condition
type then it will not allow the value of condition type to be taken into
net value calculations.
10. Print - if we want to print any condition type in PO print out then
activate this field by maintaining X.
11. Subtotal - this field will determine values to be calculated in subtotals.
Give subtotal 9 for gross price
12. Requirement - it is a routine that is written by ABAP according to
business requirement.
13. Calculation type - it is again a routine that is written by ABAP
14. Base type - it will determine the basis for calculating the value of
condition types alternate to the standard.
15. /16. Account key/Accruals - if we want to capture the condition values in
separate GL account then maintain transaction key in pricing procedure.

➢ Save
5. Schema groups:

Under this heading, we will create schema groups for vendor and the
purchasing organisation. Schema groups will help to trigger pricing procedure
in condition tab of purchasing documents.

5.1. Schema group for vendor:

In real time project we will create 2 schema groups for vendor.
Examples: DM – domestic vendor; IM – Import vendor
Path:
SPRO -> IMG -> Materials management -> purchasing -> condition -> define
price determination process -> define schema group -> enter -> double click on
schema group vendor -> click on new entries -> give schema group vendor,
maintain description -> press enter and save.
5.2. Define schema group purchase organisation:
Path:
Go back -> double click on schema group purchasing organisation -> click on
new entries -> give schema group purch. Org. (4 CHAR), maintain description ->
enter and save
5.3. Assignment of schema group to purchasing organisation:
Path:
go back -> double click on assignment of schema group to purchasing
organisation -> click on position -> give your purchasing organisation -> enter
-> assign schema group purchase organisation -> enter and save
6. Define schema determination: (Pricing procedure)
Under this heading, we will assign pricing procedure and schema group (step 4
and step 5)
Path:
SPRO -> IMG -> Materials management -> purchasing -> condition -> define
price determination process -> define schema determination -> enter ->
double click on determine calculation schema for standard purchase orders ->
click on new entries -> give schema group purchase organisation, schema
group vendor and assign pricing procedure -> enter and save.
Client role in condition master data:
Assign schema group vendor in vendor master. It will help to trigger pricing
procedure in purchase order condition tab.
Use T. code – XK01 for new vendor
XK02 for already created vendor
Maintain condition record (condition master data)
As we are aware if any condition type value (gross price or discounts etc)
required automatically in purchasing documents then we will maintain access
sequence in those condition type. Condition types which are maintained with
access sequence, for those condition types we have to maintain condition
record. (Nothing but value which will trigger in PO automatically)

These condition records will be maintained by purchasing end users.

T code – MEK1 – Maintain condition records
Path:
SAP easy access screen -> SAP menu -> Logistics -> material management ->
purchasing -> master data -> conditions -> other -> MEK1 – create -> enter ->
Give condition type which is assigned with access sequence -> Click on key
combination -> enter -> maintain condition values, maintain value, maintain
amount, maintain valid From and valid To dates -> enter & save.

T. codes:
MEK1 – Create condition record
MEK2 – Change condition record
MEK3 – Display condition record

Tables – SE16N
KONH – Conditions header
KONV – Conditions transaction data
KONP – Condition item
 Special Procurement
The name itself indicates special procurement type procuring material either
internally or externally. In standard procurement, vendor supplies goods to
company after receiving purchase order but in special procurement case it is
not mandatory. sometimes goods will flow directly to customers, goods will be
received to plant within the company
Types of Special procurement:
1. Third party process
2. Stock transfer order (STO)
3. Sub-contracting process – job work process
4. Consignment process
5. Pipe line process

Sub-contracting Process:
Sub-contracting process is also called as job work in real time projects.
In sub-contracting process companies will send their own components (any
type of material) to outside vendor, outside vendor will convert those
components into another product (final product) and sends back to company.
Vendor will charge payment for converting components into final product.
(Another product)
Sub-contracting Process flow:

BOM – Bill Goods issue

Purchase Create PO
of material Maintain to
requisition WRT PR
(optional) PIR subcontractor

Goods
Sub-contracting Invoice Create
receipt
reconciliation receipt delivery
WRT PO
challan
Consultant role in subcontracting process:
Set up sub-contract order:
Under this heading, we will assign delivery type supplying plant.
Path:
SPRO -> IMG -> Materials management -> Purchasing -> Purchase order -> set
up sub-contract order -> enter -> click on new entries -> give supplying plant,
assign delivery type LB -> enter and save
End user steps involved in sub-contracting process:
1. Create BOM – CS01 (optional)
2. Create sub-contracting info record – ME11
3. Create PR – ME51N (optional)
4. Create Purchase order – ME21N
5. Goods issue to sub-contractor – MB1B/ MIGO
6. Create challan – J1IGSUBCON
7. Goods receipt (final product) – MIGO
8. Post vendor invoice – MIRO
9. Sub-contracting reconciliation – J1IGRECON
Create BOM (Bill of material):
Bill of material represents list of components & quantity required to produce
final product.
BOM is one of the master data in SAP PP module.
T. code: CS01
Go to t. code CS01 -> Give material (Final product), maintain plant and BOM
usage (1) -> enter.
Create material BOM: General item overview
➢ Maintain item category (L)
➢ Maintain components material code and maintain quantity.
➢ Press enter and save.
T. codes:
CS01 – Create BOM
CS02 – Change BOM
CS03 – Display BOM
Create sub-contracting Info record:
Sub-contracting info record will be created in combination of final product &
subcontracting vendor.
Go to T. code ME11 -> give sub-contract vendor, maintain material (final
product), maintain plant & purchasing organisation -> activate sub-contracting
info category -> enter.
System will copy data from vendor and material, if required make the changes
here which copies to purchase order automatically. Press enter and save the
info record.
Create sub-contracting purchase order:
We can create sub-contracting PO wrt PR or without any reference.
Consultant Role:
1. Define document type by copying standard NB.
2. Define and assign number ranges to document type.
3. Define, manage and assign field selection to document type by copying
standard NBF.
4. Item category – L
Client Role:
Create PO
Path to create PO:
1. Go to T. code – ME21
2. Select sub-contracting document type or standard NB
3. Maintain sub-contracting vendor code.
4. Maintain purchasing organisation, purchasing group and company code.
------------------------Press enter----------------------------------
Go to item overview or expand item overview:
1. Maintain Item category – L
2. Maintain material code (Final product)
3. Maintain quantity, delivery date
4. Maintain price (sub-contracting charges)
5. Give plant and storage location -> press enter
Sub-contracting PR to PO error:
Error – Not possible to determine any components
Solution: This above error will trigger in all sub-contracting PR’s or PO’s
because if we miss to maintain components list.
Go to material data tab in PR or PO then click on explore BOM if we maintain
BOM then from BOM components will copy otherwise click on components
option then maintain components (material codes), quantity and supplying
plant. Press enter and then go back.
Click on check icon and save the sub-contracting purchase order.
Goods issue to sub-contractor:
Under this heading, we will learn how to issue goods to sub-contractor with
reference to PO.
➢ Go to t. code MB1B
➢ Give document date and posting date.
➢ Maintain movement type 541 – goods issue to sub-contractor.
➢ Click on “To purchase order” icon and give sub-contracting PO number
then press enter.
System will display components list -> select components list -> click on
adopt + details icon -> maintain supplying batch number manually (we
will get batch number from t. code MMBE) -> press enter & save
**Note: Once sub-contracting goods issue is done then immediately system
will add a line called stock provided to vendor” in MMBE t. code along with
quantity provided.
Create delivery challan:
T. code: J1IGSUBCON
This T. code is designed only for Indian projects to create delivery challan.
Delivery challan is the supporting document for the components issued.
➢ This T. code is introduced only after GST implementation in India.
➢ Go to T. code J1IGSUBCON
➢ Give company code, maintain supplying plant, give material document
number (goods issue number)
➢ Activate create challan radio button and click on execute.
➢ Activate material document check box and click on create challan icon.
Note: We will take the help of ABAP to design challan print out. Once challan is
created, we will take the print out and will transport physical document to
subcontractor. Once sub-contractor receives the components then they will
convert into final products and sends back to company.
Once company receives final product, they will do GR for final product and will
inform about components consumption.
Goods Receipt (Final product):
➢ Go to T. code MIGO.
➢ Select event goods receipt and reference document as purchase order.
➢ Give subcontracting PO number and press enter.
➢ Maintain document and posting dates.
➢ Expand Final product & click on “+” icon.
➢ Click on final product line.
➢ Go to quantity tab and maintain final product received quantity.
➢ Where tab: Movement type 101 for final product received.
➢ Batch tab: system will generate batch number automatically for final
product. Maintain date of manufacture.
➢ Activate Item Ok.
➢ Click on component line item and go to quantity tab, maintain consumption
quantity.
➢ Where tab: Movement type 543
➢ Batch tab: maintain goods issue batch number manually. (copy from 541
movement type)
➢ Click on Item OK check box.
➢ Click on check icon and post.
Note: Check stock in T. code MMBE for both final products and components.
Accounting entries:
BSX – Inventory A/c – Dr
WRX – GR/ IR Clearing A/c – Cr
BSX – Inventory A/c – Cr
GBB/ VBO – Stock consumption A/c – Dr
BSV – Change in stock A/c – Dr
FRL – SC charged A/c - Cr
Post vendor Invoice – MIRO
➢ Go to T. code MIRO
➢ Select transaction Invoice
➢ Maintain invoice date and posting date.
➢ Give invoice number in reference field in reference field and press enter.
➢ Go to PO reference tab, give sub-contracting PO number and press enter.
System will copy data from PO to invoice screen.
➢ Go back to basic data tab, select tax code VA/ V0 and activate calculate tax
check box. Copy balance and paste in amount field. If balance amount
becomes zero with its status in green colour, then simulate and post.
Sub-contracting Reconciliation:
Under this heading, end user will compare components issued (541 movement
type) and components consumed (543 movement type).
➢ Go to T. code J1IGRECON
➢ Give material document number (GR number) & maintain year.
➢ Activate first in first out (FIFO) and execute.

Consignment process:
In consignment process, vendor keeps his own materials in company’s location
but material ownership remains same with the vendor until the company uses
(withdraws) it. Once company uses the consignment stock then vendor will
request for payment and company should make payment.
 Consignment Process flow:

Create
Material Purchase Purchase Goods Own the Consignment
PIR requisition order WRT receipt stock from settlement
(optional) PR WRT PO consignment

End user steps involved in consignment process:

1. Create PIR – ME11
2. Create purchase order with item category K – ME21
3. Goods receipt – MIGO
4. Stock withdrawal from consignment stock – MB1B/ MIGO
5. Consignment settlement (payment) – MRKO
Create consignment Purchase info record:
➢ Go to T. code ME11
➢ Give vendor, maintain purchasing organisation and plant.
➢ Activate consignment info category & press enter.
➢ System will copy data from vendor and material, if required edit the data
here.
➢ Maintain tax code, price then press enter & save.
Note: In consignment process, taxes and amount will copy from purchase info
record to payment screen.
Create Consignment Purchase order:
We can create PO WRT PR or without any reference.
1. Go to T. code ME21N
2. Select consignment document type or standard NB.
3. Give vendor code.
4. Give purchasing organisation, purchasing group and company code.
-------------------------------Press enter--------------------------------------
Expand item overview tab or go to item overview:
1. Give item category K – consignment
 2. Give material code, qty, delivery date.
3. Maintain plant & storage location.
------------------------------------Press enter--------------------------------
Click on check icon and save the PO.
Note:
1. In consignment PO, Net Price field will be in disable mode because of
item category K.
2. Condition tab and invoice tab will be in hide.
3. In consignment, payment amount and taxes will copy from PIR instead
of PO.
Consignment goods receipt:
➢ Go to T. code MIGO
➢ Select event as goods receipt and reference document as Purchase
order. Give PO number and press enter.
➢ System will copy data from PO to goods receipt screen.
➢ Give document date and posting date.
➢ Go to quantity tab and maintain receipt quantity.
➢ Where tab: movement type 101 K
➢ Batch tab: under this heading, system will generate batch number
automatically. Maintain date of manufacture.
➢ Activate item OK, check and post.
Note:
1. Check consignment stock in t. code MMBE
2. No accounting entries will generate in consignment GR.
Stock withdrawal from consignment stock:
Under this heading, we will accept consignment stock ownership company’s
stock.
T. code: MB1B or MIGO
➢ Go to t. code MB1B
➢ Give document date and posting date. (Both can be same)
➢ Movement type 411, special stock K
➢ Give plant and storage location. Press enter key.
 ➢ Maintain consignment vendor.
➢ Maintain material, quantity (ownership acceptance) & maintain batch.
➢ Press enter & save.
Note:
1. Check stock in T. code MMBE
2. Consignment accounting entries:
In consignment process accounting entries will generate at the time of
accepting the stock ownership. (Movement type 411 K)
BSX – Inventory A/c – Dr (+)
KON – Consignment payables – Cr (-)
Consignment settlement:
In consignment process we will use T. code MRKO for invoice settlement
instead of using MIRO.
Go to T. code MRKO -> give company code, give material document number
(411 K number) -> activate consignment check box and activate settle radio
button -> execute -> check the document number and year.

Pipeline Process
Pipeline is one of the special procurements in SAP MM. the materials which
will flow through pipes, cables, wires etc are called pipeline materials.
Examples are electricity, water, gas etc., if we want to make pipeline material
payments through SAP system then we will use pipeline process.
Pipeline process flow:

Pipeline
Maintain PIR Goods issue
settlement
End user steps involved in pipeline process:
1. Create pipeline material by using material type PIPE – MM01
2. Create vendor or we can use existing vendor – XK01
3. Create PIR (Info category – PIPELINE) – ME11
4. Record the consumption – MIGO
5. Pipeline settlement – MRKO

1. Create Pipeline material:

Go to t. code MM01 -> select industry sector -> maintain pipeline material
type -> press enter -> select basic data, purchasing & accounting views ->
enter -> give plant -> enter -> maintain all required data -> press enter & save.
2. Create vendor or we can use existing vendor.
3. Create Pipeline purchasing info record:
Go to T. code ME11 -> give vendor, give pipeline material, purchasing
organisation, plant -> activate pipeline info category -> enter -> system will
copy data from material & vendor.
➔ Maintain tax code VA & net price.
➔ Press enter and save.
Note: System will copy price and tax from info record to settlement screen.
(MRKO)
4. Record the consumption:
Under this heading, we will record the pipeline materials used based on bill
received from vendor.
➢ Go to T. code MIGO
➢ Select event “goods issue” and reference document “other”
➢ Give document date and posting date
➢ Go to material tab, give pipeline material code and press enter.
➢ Go to quantity tab and maintain quantity used.
➢ Where tab: give movement type 201 P and plant, press enter.
➢ Partner tab: Give vendor
➢ Account assignment tab: give cost centre & press enter
➢ Activate item OK, check and post.
5. Pipeline settlement:
Same like consignment process, payment settlement of pipeline will be done
by using T. code MRKO and amount, tax code will copy from info record
screen to payment settlement screen.
➢ Go to T. code MRKO
➢ Give company code, material document number. (Consumption number)
➢ Activate pipeline checkbox & activate settle radio button.
➢ Execute
➢ Check the document number.

Third party process

Third party is one of the special procurements in MM module. In third party
process, goods required by the customer is not delivered by the company’s
sales department. Instead of that company forwards the order to external
vendor who sends goods directly to customer.
Third Party Process flow:

7 6
Invoice to customer Vendor invoice to company

Customer Company/ 1 Sales 2 3 PO WRT

Auto PR
order goods sales org. order 2 2 PR

Customer Provides
Acknowledgement
5

4 Vendor
Vendor supply goods to customer
What happens in third party process:
1. Customers order goods to company and sales order will be created. (SD –
VA01)
2. Purchase requisition will be created automatically once sales order is saved.
(SD/ MM)
3. Purchase order is created to the vendor. (MM – ME21N)
4. Invoice receipt from vendor. (MM/ FI – MIRO)
5. Invoice to customer. (SD – VF01)
Define customer master data:
Customer is one of the master data available in SD module. The information of
the customer maintained in SAP system is called customer master data.
Customer is an individual person or individual company or group of companies
who purchases materials & services.
Business requirements:
In real time, client deals with different types of customers such as domestic
customers, foreign customers (exports), service customers etc. we consultants
have to provide solutions to differentiate types of customers in SAP system.
(Same like vendor)
Consultant role:
Define account groups & field selections for customers:
Account groups will be used to differentiate types of customers in SAP system.
T. code: OVT0
Path:
SPRO -> IMG -> logistics general -> business partner -> customers -> control ->
define account groups and field selections for customers -> enter -> select
0001 line -> click on copy as icon -> give your own customer (4 CHAR), maintain
description (examples are ZDMC – domestic customers; ZEXP – Export
customer; ZSC – Service customer) -> Press enter -> double click on your own
customer account group -> double click on field status tabs -> double click on
field selections groups -> manage the fields of customer -> save
** Customer account group controls customer master.
Types of controls:
1. It controls number range of customers.
2. It manages field of customer.
3. It controls partner functions.
Define number range of customers:
T. code: OVZC
Path:
SPRO -> IMG -> logistics general -> business partner -> customer -> control ->
define and assign customer number ranges -> enter -> double click on define
number ranges for customer master -> click on change intervals -> insert line ->
give serial number, give from and to number range (either internal or external,
10 digits) -> enter and save
Go back (2 times) -> double click on assign number ranges to account group ->
click on position -> give your customer account group -> enter -> assign your
number range serial number -> press enter and save
Define customer partner functions:
If multiple people are involving in buying the product, then these people are
called partner functions. Partner functions represents the responsibility of
each partner.
SAP has defined below partner functions for customers.
SP* – Sold to party
SH – Ship to party
BP – Bill to party
PY – Payee

Path:
SPRO -> IMG -> Sales and distribution -> basic functions -> partner
determination -> set up partner determination -> enter -> double click on set
up partner determination for customer master -> click on new entries -> give
partner schema (4 CHAR), maintain description -> enter (2 times) -> select
partner schema line -> double click on partner functions in procedure -> click
on new entries ->
Partner functions Name No change Mandatory
SP Sold to party √ √
SH Ship to party √
BP Bill to party √
PY Payee √

->Save -> double click on partner determination procedure assignment -> click
on position -> give your own customer account group -> enter -> assign
customer partner schema -> enter and save -> double click on account groups
– function assignment -> click on new entries -> give your partner functions
and maintain account group -> press enter for every partner function -> save
Client Role in Customer master:
Creation of customer master data:
T. code: XD01
Path:
SAP easy access screen -> SAP menu -> logistics -> sales and distribution ->
master data -> business partner -> customer -> create – XD01 – complete ->
enter
Create customer: initial screen
➢ Select document type
➢ Maintain company code
➢ Maintain sales organisation, distribution and division
➢ Press enter key
Create customer: General data
Address tab: In this tab, we have to maintain customer name, customer
address along with communication details.
➢ Press enter key.
➢ Click on company code, maintain recon. Account 140000.
➢ Press enter key
➢ Click on sales area data
Create customer: sales area data
➢ Maintain currency
➢ Maintain customer pricing procedure ‘1’
➢ Press enter key
➢ Click on shipping tab
➢ Maintain delivery priority ‘1’ and maintain shipping conditions ‘01’ (as soon
as possible)
➢ Billing documents tab: Maintain tax ‘1’
➢ Partner functions tab: In this tab, system will copy partner functions from
customer account group.
➢ Save the customer.
T. codes:
XD01 – Create customer
XD02 – change customer
XD03 – display customer
XD04 – Changes
XD05 – Block/ unblock customer
XD06 – flag for deletion
XD07 – change customer account group
XXD99 – mass maintenance
XCUST – customer list
Tables – SE16N
KNA1 – customer general data
KNB1 – customer company code data
KNVV – customer sales data
Sales order:
If we want to sell the goods to any customer then we have to create sales
order.
Third party sales order:
Order type – OR (Standard type)
Item category for third party – TAS
Schedule line – CS
Note:
As we are aware in third party sales order automatic PR will generate to
purchase materials for customer SD consultant will do following configuration
to generate PR automatically.
In schedule line CS, SD consultants will assign PR document type, based on this
system will generate PR once sales order is saved.
T. code: VOV6
Go to T. code VOV6 -> click on position -> give schedule lines CS -> enter ->
double click on CS, maintain PR document type in order type field -> enter &
save
Creation of third-party sales order:
T. codes: VA01
Path:
SAP easy access screen -> SAP menu -> logistics -> sales and distribution ->
sales -> order -> VA01 – create -> enter
Create Sales order: initial screen
➢ Maintain order type ‘OR’
➢ Give sales organisation, distribution channel and division.
➢ Enter
Create standard order: overview
➢ Maintain customer number in sold to party field and press enter.
➢ Maintain material code, order quantity, maintain item category ‘TAS’.
➢ Press enter key
➢ Select the line item
➢ Click on ‘go to’ option in menu bar -> item -> click on schedule lines.
➢ Maintain schedule line CS
➢ Go back
➢ Click on edit option in menu bar -> click on incompletion log -> maintain
missing data -> complete data and if system gives the message document is
complete -> save the sales order
T. codes:
VA01 – Create sales order
VA02 – Change sales order
VA03 – Display sales order
VA05 – List of sales order
Tables – SE16N
VBAK – Sales order header data
VBAP – Sales order item data
How to check PR number in sales order:
As we are aware once we save the third-party sales order then system will
generate PR number automatically in schedule lines tab of sales order.
Go to T. code VA03 – display sales order -> give sales order number -> enter ->
double click on line item -> go to schedule lines tab and copy PR number ->
check in display mode ME53N.
Creation of third-party PO WRT PR:
T. code: - ME21N – Create Purchase order
Steps:
1. Go to t. code ME21N
2. Select document type based on type of purchase (NB or new document
type for third-party)
3. Maintain vendor code to whom we are placing the order.
4. Maintain purchasing organisation, purchasing group and company code.
----------------------Press enter---------------------------
PO item overview:
Drag item overview screen to right and maintain PR number and press enter.
➢ System will copy data from PR to PO screen.
➢ Maintain the required fields like purchase price, deli very dates and other
required fields.
➢ Go to delivery tab and remove GR tick marks (in third-party no Gr concept)
➢ Go to Invoice tab remove GR Bsd. Inv. Tick mark.
➢ Click on check icon and save the PO.
Note:
1. In third-party process no goods receipt concept because goods are
delivered directly to company’s customer. Once goods are delivered,
vendor will raise the invoice receipt to company and company will enter
the same in SAP by using invoice receipt concept T. code – MIRO
2. Now SD end user will raise bill to customer by using T. code VF01.
Post vendor invoice:
➢ Go to T. code MIRO
➢ Maintain Invoice date & posting date.
➢ Maintain invoice number in reference field.
➢ Go to PO reference tab, give third-party PO number & press enter.
➢ System will copy data from PO to invoice screen directly.
➢ Go to basic data tab, select tax code VA and activate calculate tax check
box.
➢ Copy balance and paste in amount field, if balance amount becomes zero
click on simulate and post.
 Stock Transfer order – STO
It is one of the special procurement available in SAP MM. STO will be used to
transfer materials from one plant to another plant within company.
Types of STO’s:
In STO we have following two types
1. Intra STO
2. Inter STO
If materials are transferring from one plant to another plant within the same
company code, then it is called Intra STO.
If materials are transferring from one plant to another plant between 2
different company codes, then it is called Inter STO.
We can configure STO with MM and SD modules integration.
Process flow of Stock transfer order:
Delivery
Outboard – PG1
Supplying
1 delivery (post Billing 5 6
plant
(OBD) goods
issue)
Goods
Create
Receiving receipt GST
purchase 2 3 4
plant note Invoice
order
(GRN)

Consultant role in STO:

1. Set up stock transfer order
1.1. Assign shipping data to plants
2. Checking rule - 01
3. Delivery Type
NL – Intra STO
NLCC – Inter STO
4. Define STO document type by copying standard UB. (Same line NB)
 Real time examples:
UB – Intra STO – NL
ZSTO – Inter STO - NLCC
5. Define and assign number ranges to STO document type.
6. Define, manage and assign field selection to STO document type by copying
standard UBF. (Same like NBF)
7. Item Category – U
8. Assign delivery type, checking rule to document type.
9. Assign document type, one step procedure, underdeliver. (Optional, only in
case if we want one step process or else leave this step)

1. Set up stock transfer order

1.1. Assign shipping data to plants:
Under this heading, we will inform system about supplying plant and receiving
plant.
Path:
SPRO -> IMG -> Materials management -> purchasing -> purchase order -> set
up stock transfer order -> define shipping data for plants -> enter -> click on
position -> give supplying plant or receiving plant -> enter -> double click on
plants and maintain below information
Fields Supplying plant Receiving plant
Maintain plant customer
Customer No. Blank
number
Sales organization Sales organization Sales organization
Distribution channel Distribution channel Distribution channel
Division Division Division

& Save.
2. Checking rule - 01
3. Delivery Type
NL – Intra STO; NLCC – Inter STO
4. Define STO document type by copying standard UB. (Same line NB)
Real time examples:
UB – Intra STO – NL
 ZSTO – Inter STO - NLCC
5. Define and assign number ranges to STO document type.
6. Define, manage and assign field selection to STO document type by copying
standard UBF. (Same like NBF)
7. Item Category – U
8. Assign delivery type, checking rule to document type:
Under this heading, we will assign delivery types to STO document types.
Path:
SPRO -> IMG -> Materials management -> Purchasing -> Purchase order ->
set up stock transfer order -> assign delivery type and checking rule -> enter
-> click on new entries -> give STO document type, supplying plant then
maintain delivery type, assign checking rule -> enter & save
9. Assign document type, one step procedure, underdeliver. Tolerance:
This step is completely an optional step if we want one step process then
configure this step and if you are going for 2 step process then leave this
step.
What is 1 step procedure?
In one step procedure, when supplying plant issues the goods then
automatically GR is done in receiving plant.
What is 2 step procedure?
In two step procedure supplying plant issues the goods and receiving plant
will do GR manually by using T. code MIGO.
➢ In real time project maximum companies will use 2 step process.
Path:
SPRO -> IMG -> Material management -> purchasing -> purchase order ->
set up stock transfer order -> assign document, one-step procedure, under
deliver. Tolerance -> enter -> click on new entries -> give supplying plant,
receiving plant, maintain STO document type -> activate one step check box
-> enter & save
10.Define shipping point determination:
Go to T. code OVL2 -> click on new entries -> give shipping conditions ‘01’
(maintained in customer master), give loading group 0001 (maintained in
material master), give supplying plant & assign shipping point -> enter &
save
Note: There is no concept of vendor in STO process. We will have only
supplying and receiving plants.
➢ SD consultants will create a customer with receiving plant information and
they will assign to receiving plant.
Client Role in Stock Transfer Order
STO end user steps:
1. Extend material to both supplying and receiving plants.
2. Assign supplying plant to vendor for inter STO.
3. Create STO PR (optional) – ME51N
4. Create STO PO – ME21N
5. Create outbound delivery (OBD) – VL10B – (SD)
6. Edit delivery (Post goods issue) – VL02N – (SD)
7. Create Billing – VF01 – (SD)
8. Goods receipt by receiving plant (MIGO)
Assign supplying plant to vendor for inter STO:
Sometimes instead of using STO standard document type UB, we will use NB
document type for STO inter purchase orders. So, in NB document type system
will ask vendor code but in STO there is no vendor concept then in this case we
have to create a vendor with supplying plant information and we need to
assign a plant in a vendor.
Path:
Go to purchasing tab of vendor master -> click on extras in menu bar -> click on
add purchasing data -> maintain plant -> enter & save
Create Stock transfer order PO:
We can create PO WRT PR or without PR also.
➢ Go to T. code ME21N
➢ Select your document type UB or our own document type.
➢ Maintain supplying plant, maintain purchasing organisation, purchasing
group & company code
-------------------------------------Press enter--------------------------------
PO item overview
1. Give item category U
2. Maintain material code
3. Quantity
 4. Delivery date
5. Receiving plant and storage location
6. Press enter key
7. Check the shipping tab in item level if it is available then only click on
check icon and save the PO.
** If shipping tab is not available in STO PO then don’t save the PO.
➢ Once supplying plant receives the order then they will create outbound
delivery. (OBD)
Create outbound delivery:
Outbound delivery will be created by sales end users by using below T. code
➢ Go to T. code VL10B
➢ Go to purchase order tab and give STO PO number
➢ Remove delivery date and execute.
➢ System will display PO line. Select PO line, click on background icon.
➢ Click on show/ hide delivery then system will display delivery number. Copy
the same. (Delivery number)
STO goods issue (PGI – Post goods issue):
In STO, goods issue (PGI) will be done by supplying plant sales end users.
➢ Go to T. code VL02N
➢ Give outbound delivery number and press enter
➢ Go to picking tab, maintain supplying storage location & picked quantity
same as delivery quantity, maintain supplying batch.
➢ Press enter key
➢ Click on post goods issue (PGI)
STO Accounting entries
In STO process accounting entries will not generate at the time of gods receipt
but accounting entries will generate at the time of goods issue. (PGI)
Accounting entries are
1. BSX – Inventory A/c – Dr
2. BSX – Inventory A/c – Cr
Create Billing:
Under this heading, we will create Performa invoice to send physical goods to
receiving plant.
Billing will be created by SD end users.
➢ Go to T. code VF01
➢ Select billing type F8
➢ Give billing date
➢ Give outbound delivery number in document field.
➢ Press enters (2 times) & save then again press enter (2 times)
• Once billing is created then physically goods will be transported to
receiving plant. Once receiving plant receives the goods physically then
they will perform goods receipt. (GR)
Goods receipt by receiving plant:
Under this heading, we will learn how to do GR with reference to delivery.
(OBD)
➢ Go to T. code MIGO
➢ Select event goods receipt and reference document outbound delivery.
➢ Give outbound delivery number and press enter.
➢ Go to quantity tab and maintain received quantity
➢ Activate item OK, check and post.
Note:
1. Check stock in T. code MMBE
2. No accounting entries will generate in STO GR.
3. STO movement type list
STO movement types list:

SD + MM Intra STO Intra STO Inter STO Inter STO

STO (1- step) (2-step) (1-step) (2-step)
Movement PGI – 647 PGI – 641 PGI – 645 PGI – 643
types GR – 101 GR – 101 GR – 101 GR – 101

How to check accounting entries in STO:

➢ Go to T. code VL03N – Delivery outbound number
➢ Give outbound delivery number & enter
➢ Click on document flow icon
➢ Click on TF to stock in trans. Option.
➢ Click on display document.
➢ Click on accounting documents.
➢ Double click on accounting document number and check the accounting
document entries.
 ESM - External Service Management
In every company along with material sometimes they require services which
includes installation, testing, painting work, lighting, housekeeping etc. these
services are purchasing services is called external service management.
Key points:
1. Services are always direct consumption.
2. Item category D represents services.
Service management deals with following terms:
1. Service master record
2. Service purchase record
3. Service entry sheet (SES)
Service master Record:
Same like material master, service master contains the details of services then
can be procured from external vendor. It contains details of service, unit of
measurement etc.
Business requirements:
In real time project company process different types of services like AMC,
installation and testing, housekeeping work, outsourcing work etc. we
consultants have to show the difference between each service type.
Consultant Role:
1. Define service category:
Service category differentiates types of services in SAP. (Same like material
type)
SAP has defined standard service category.
ALL – All services we can use standard ALL or we can customize our own
service category by copying standard.
Examples: ZAMC – Maintenance services; ZINT – Installation and testing etc.
Path:
SPRO -> IMG -> materials management -> external service management ->
service master -> define service category -> enter -> select ALL line -> click
on copy as icon -> give your own service category (4 CHAR), maintain
description -> Press enter and save
Define number ranges for service master:
Same like material type, each service category will have one internal and one
external number range.
T. code: ACNR
Path:
SPRO -> IMG -> materials management -> external service management ->
service master -> define number ranges -> enter -> click on maintain groups ->
click on create icon -> give group name, maintain from and to number range
for both internal and external (18 digits) -> enter & save -> go back -> press
control + F -> give your service category -> enter -> click on your service
category -> click on element/ group -> search your number range group name
& double click on the same -> save.
Define field selection of service master:
T. code: OXA2
Path:
SPRO -> IMG -> materials management -> external service management ->
service master -> field display for service master -> define field selection for
service master (individual maintenance) -> enter -> manage the fields -> save
Client Role in service master record:
Under this heading, we will learn how to create service master but in real time
project purchasing end users will create service master records and we will
provide training.
T. code: AC03
Path:
SAP easy access screen -> SAP menu -> logistics -> material management ->
service master -> service -> AC03 – service master -> enter -> click on create
icon -> give service description -> select service category -> maintain base unit,
maintain material/ service group and maintain valuation class 3200 -> press
enter and save the service master
T. codes:
AC03 – Create/ edit/ display/ delete service master
AC06 – List of service masters/ record
Tables – SE16N
ASMD – Services
Service purchase process flow:

Create Create Service

Purchase Invoice
service purchase entry sheet
requisition receipt (IR)
master order WRT (SES)
PR

End user steps involved in service purchase:

1. Create service master T. code – AC03
2. Create Vendor T. code – XK01
3. Create service PR – ME51N
4. Create Service PO – ME21N
5. Maintain service entry sheet (SES) – ML81N
6. Invoice Receipt T. code – MIRO
Create service purchase order:
1. Go to T. code ME21N
2. Select service document type or standard NB
3. Give Vendor code
4. Give purchasing org., Purchasing group and company code.
----------------------------------Enter--------------------------------
Expand item overview tab or go to item overview:
1. Give Item category D – services.
2. Maintain account assignment – K – Cost centre
3. Material description (Service description Ex- AMC charges)
4. Delivery date
5. Material group (service group)
6. Maintain Plant
----------------------------------Enter---------------------------------------------
Go to service tab in item data
1.Give service master number (Optional)
2.Give service description directly without service master number.
3.Maintain quantity (total service value)
4.Maintain unit price (always 1)
5.Maintain UOM if it is without service number
-------------------------------Enter---------------------------------------------
• Maintain GL account – 417000 (Services)
• Maintain cost centre -> click continue
• Click on check icon and save the purchase order.
Maintain Service entry sheet (SES):
Service entry sheet is also called as goods receipt. When we order materials
then we will do goods receipt and if we order service then we will maintain
service entry sheet.
Whenever we receive services from vendor then we will maintain service entry
sheet to capture services received from vendor.
Define number ranges for service entry sheet:
T. code: OMH9
Path:
SPRO -> IMG -> materials management -> external service management ->
number ranges -> define number ranges for service entry sheet -> enter-> click
on change intervals -> insert line -> give serial number, give from and to
number range (internal, 10 digits) -> save -> go back (2 times) -> select assign
number ranges -> enter -> assign your number range serial number for 01 line
-> save
Define Field selection of service entry sheet:
Path:
SPRO -> IMG -> materials management -> external service management ->
define screen layout -> enter -> click on position -> give field selection ML81 ->
enter -> double click on ML81 line -> double click on field selection groups ->
manage the fields -> continue -> go back & save
Client Role in Service entry sheet:
Maintain Service entry sheet:
Once we receive the services from vendor then we will maintain Service entry
system to capture received services in SAP (Same like GR)
T. code: ML81N – Maintain SES
Path:
SAP easy access screen -> SAP menu -> logistics -> materials management ->
service entry sheet -> ML81N – Maintain -> enter -> click on other purchase
option -> give your PO number -> enter -> click on create icon -> maintain short
text ->
Acceptance data tab (Accept data)
➢ Maintain document date & posting date.
➢ Click on service sel. Option and continue.
➢ System will display service line item from purchase order.
➢ Select service line item and click on services.
➢ Maintain received service in quantity field.
➢ Click on accept icon (green flag) if entry sheet status is in yellow colour,
then click on save.
T. codes:
ML81N – Maintain/ edit/ display/ reverse service entry sheet
ML84 – List of service entry sheet
ML85 – Release service entry sheets
Tables – SE16N
ESSR – Service entry sheet header data
ESLL – Service lines
Post vendor invoice:
➢ Go to T. code MIRO
➢ Give invoice date and posting date
➢ Give invoice number in reference field.
➢ Go to PO reference tab and give service PO number then press enter.
➢ System will copy data from PO to invoice screen based on services received.
➢ Go back to basic data tab, activate calculate tax check box.
➢ Copy balance and paste in amount field, if balance becomes zero then click
on simulate and post.

Mass Maintenance:
Mass maintenance concept will be used to update any data in multiple
documents at a time. In SAP for every topic, we have mass maintenance T.
codes.
Examples:
MM17 – Material mass maintenance
XK99 – Vendor mass
MEMASSIN – PIR mass
MEMASSRQ – PR mass
MEMASSPO – PO mass

Example – How to operate material mass maintenance T. code:

1. Go to T. code MM17
2. Select table then go to fields tab
3. Select the field which we want to update in mass.
4. Then execute.
5. Click on multiple selection option then maintain all the material code and
continue then execute.
6. Again execute
7. Maintain the data in new values line.
8. Click on carry out a mass change icon (2 down arrows) then system will
update new data in all the materials.
9. Save and once we save, data will update in all materials.
Profit centre:
A profit centre is an SAP controlling module organisational unit and it will be
used for internal control. We can divide our company into multiple profit
centres that enables management to analyse the area of responsibility. Use
below T. code or Path to define profit centres but in real time project
controlling model consultants will design.
T. code: KE51
Path:
SAP easy access screen -> SAP men -> accounting -> controlling -> profit centre
accounting -> master data -> profit centre -> individual processing -> KE51 –
create -> enter -> give controlling area -> enter -> give profit centre (10 CHAR) -
> enter -> maintain profit centre name, maintain person responsible, maintain
profit centre group -> press enter & save
T. codes:
KE51 – Create Profit centre
KE52 – Change Profit centre
KE53 – Display Profit centre
KE54 – Delete Profit centre
How to create profit centre group:
This will be created by controlling module consultants.
T. code: KCH1
➢ Go to T. code KCH1
➢ Give profit centre group (15 CHAR)
➢ Press enter and give group name
➢ Save
 Release strategy
Release strategy will be used to approve purchasing documents in SAP system.
Purchasing documents like PR, RFQ, PO, contracts and Scheduling agreement.
Possibilities of release strategy configuration:
We can configure release procedure (RP) with and without classification.
RP with classification RP without classification
1. RP with classification will be used RP without classification will be used
to approve internal and external to approve only PR.
purchasing documents (PR, RFQ,
contracts, Scheduling agreement)
2. PR can be released at header and PR can only be released at item level
item level as well
3. All external documents will be No scope for external purchasing
released at header level. documents.
4. Communication structure No communication structure.
PR – CEBAN
PO – CEKKO
SES – CESSR

Consultant’s steps involved in release strategy:

1. Edit characteristics – CT04
2. Edit class – CL02
3. Define release group
4. Release codes
5. Release indicators
6. Release strategy
6.1. Release Pre-requisites
6.2. Release statuses
6.3. Release classification
6.4. Release simulation

1. Edit characteristics – CT04:

Under this heading, we will create purchasing document fields as characters.
PO value characteristics:
T. code: CT04
Path:
SPRO -> IMG -> Materials management -> purchasing -> purchase order ->
release procedure for purchase order -> edit characteristics -> enter -> give
characteristics (Ex: ZPOVALUE1) -> click on create icon -> go to additional data
tab -> maintain communication structure name in table name field (CEKKO) ->
maintain field technical name in field name box (gnetw) (we will get technical
names from tables) -> enter -> continue -> maintain currency -> activate
multiple values radio button to maintain multiple conditions -> activate
interval vals. allowed check box -> go to value tab -> maintain character values
-> save the character
Document type characteristic:
Go to T. code CT04 -> give characteristic (Ex: ZDOCTYPE) -> click on create icon
-> go to additional data tab -> maintain communication structure name
(CEKKO) -> maintain field technical name in field name box (Ex: BSART) -> enter
-> continue -> activate multiple values -> go to values tab -> maintain list of
document types to which release is required -> enter and save
Note:
Use same CT04 T. code to create/ edit/ display/ delete characteristics.
2. Edit class:
Under this heading, we will create a class (group) and will assign all the
characteristics.
T. code: CL02
Path:
SPRO -> IMG -> Materials management -> purchasing -> purchase order ->
release procedure for purchase order -> edit class -> enter -> give class (Ex:
ZPOCLASS) -> maintain class type 032 (032 represents release) -> click on
create icon -> maintain class description (Ex: PO release) -> go to char tab and
assign your characteristics -> enter and save.
Define Release procedure for purchase order:
Path:
SPRO -> IMG -> Materials management -> purchasing -> purchase order ->
release procedure for purchase order -> define release procedure for purchase
orders -> enter
3. Double click on Release groups -> click on new entries -> give release group
(2 CHAR) -> assign class, maintain release group description -> enter & save
-> go back (2 times)
4. Double click on Release Codes -> click on new entries -> give release group
and release codes (2 CHAR) (Maintain 8 levels in SAP standard), maintain
description -> enter & save -> go back (2 times)
5. Double click on Release indicators -> Maintain release indicators 1 to 6 for
release IDs B and R in changeable field -> save (Release indicator will define
whether we can edit purchasing document after release) -> go back (2
times)
6. Double click on Release strategies -> click on new entries -> give release
group, maintain release strategy (Ex: S1) (2 CHAR), maintain description ->
maintain release codes in sequence -> enter
6.1. Click on Release pre-requisites

PE PM PH
PE
PM √
PH √ √
• Continue.
6.2. Click on Release statuses -> Check the release indicators to release IDs
-> continue
6.3. Click on Classification -> maintain the characteristics value by using F4
key in keyboard -> click on next screen ->
6.4. Click on Release simulation -> continue -> save the release strategy
Clients testing in release strategy:
1. Create PO by using T. code ME21N
2. Maintain all required Fields.
 3. Click on check icon if PO conditions are satisfying with release strategy
conditions, then system will add new tab called release strategy in PO
header level.
4. Save the PO.
How to Release PO:
In standard SAP we clients can approve purchase orders in following 2 ways.
1. Individual release – ME29N
2. Collective release – ME28
PO individual release:
1. Go to T. code ME29N
2. Click on other purchase order icon
3. Give your release purchase order number
4. Press enter key
5. Click on edit icon if PO is in display mode.
6. Go to release tab.
7. Click on release tick mark.
8. Save the purchase order to effect release (Approval)
• Individual release means we will approve single-single purchase orders.
PO collective release:
Collective release will be used mainly by managers and heads to release POs at
a time.
1. Go to T. code ME28
2. Give release code.
3. Execute and system will display all the approach pending POs
4. Single Click on every PO then click on release icon and save.