MM-FI Integration - A Conceptual Understanding - SAP Blogs

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MM-FI integration: A conceptual

understanding
May 7, 2014 | 22,091 Views |
Vinod Vemuru
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FIN (Finance)
accountdetermination | accounting | accountmodification | accountmodifier | bsx | erp financials | event
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Most of us are comfortable with SD-FI-COPA integration concepts as it is easy to

correlate and understand. But, when it comes to MM-FI integration, many of us
https://blogs.sap.com/2014/05/07/mm-fi-integration-a-conceptual-understanding/ 1/19
find difficulties in understanding the concepts and account determination process.

When I was trying to analyze my first issue related to how a stock account is
determined in a valuated transaction, I was lost in OBYC. Let us try to understand
few terminology used in MM-FI integration concepts. Once we are familiar with the
concepts, we will further discuss account determination process in a stock
movement related transaction.
Valuation area:
Stock of a material owned by a company is an asset to the company. Valuation

area defines the organization level at which materials are valuated.
SAP has provided two options for valuation.
1. Valuation at plant level: All materials are valuated at plant level.
2. Valuation at company code level: All materials in all plants of a company are
valuated at company code level.
This setting is defined in t-code OX14.
Valuated stock:
Total valuated stock = Stock in unrestricted use + Stock in transit between storage
locations/warehouses of a plant + Stock in quality inspection.
Material type:
This defines the type of material.
EG: Raw material, Finished goods etc.
Material type is defined during material master data creation.
Movement type:
This defines the type of material movement from one place to other. Movement
type enables the system to find predefined posting rules determining how the
stock and consumption accounts are to be posted. All possible goods movements
are already defined by standard SAP
EG: Movement type 101 refers goods receipt
Movement type is entered while posting stock movement related transactions.

Most of the time, standard SAP automatically derives the movement type based
on transaction code.
EG: If we go to MIGO, default movement type 101 is displayed by system.
Valuation class:
Valuation class is defined for the combination of plant and material (In Accounting
1 view of material master).
Valuation class allows posting of stock values of
1. Materials of same material type to different G/L account (Different valuation

class is assigned in different plants for the same material)
2. Materials of different material type to same G/L account (Same valuation

class is assigned to materials of different material type)
Note: G/L accounts can be defined at valuation class level along with other
parameters.
Valuation grouping code:

Valuation grouping code combines the valuation areas having same business
properties for the account determination. This reduces number of entries to be
created for automatic account determination for the stock postings.
EG: Valuation area 1 and 2 are required to be posted to same G/L account, these
are grouped to valuation grouping code ABC and G/L is determined based on
valuation grouping code and valuation class.
Before using valuation grouping code, it needs to be activated in OMWM.
Valuation grouping code is assigned to valuation area in t-code OMWD.
In below example, five valuation areas are assigned to same valuation grouping
code.
Account modification/General modification:
This key is used to determine different G/L account for the same kind of goods
movement based on origin and target.
EG: During Goods issue, offsetting G/L is determined from transaction key GBB. If
business wants to post to different G/Ls for goods issue for cost centers
(Movement type 201) and good issues to orders (Movement type 261) for the
same material and plant, Account modifier can help here. To understand this
better, let us go to t-code OMWN where we define the transaction key and
account modification for the movement type.
Transaction key which we see in OBYC is determined based on the movement

type. In below screenshot, you can see all parameters are same for movement
type 201 and 261 except account modification.
Please read F1 help on different fields in this screen to know more about
functionality of each field.
T-code OMWN:
When material document is posted with these movement types, offsetting account
is determined from transaction key GBB based on account modifier and valuation
class.
From below screenshot, you can see that, different offsetting G/L account can be
determined for the same transaction key and valuation class.
By Default, Standard SAP defines account modification keys for below transaction
keys. User defined keys can also be defined and respective account determination
settings can be maintained.
GBB (offsetting entry for inventory posting)
PRD (price differences)
KON (consignment liabilities)
Below are the modification keys defined by SAP (Extracted from F1 help).
Modifiers for GBB
For the transaction/event GBB (offsetting entry for inventory posting), the following account
groupings have already been assigned to the relevant movement types:
AUF: for goods receipts for production orders with account assignment
BSA: for initial entries of stock balances
INV: for expense/revenue from inventory differences
VAX: for goods issues for sales orders without account assignment object
VAY: for goods issues for sales orders with account assignment object
VBO: for consumption from stock of material provided to vendor
VBR: for internal goods issues (e.g., for cost center)
VKA: for consumption for sales order without SD
VNG: for scrapping/destruction
VQP: for sampling
ZOB: for goods receipts without purchase orders
ZOF: for goods receipts without production orders
Modifiers for PRD
If you also activate account grouping for transaction/event PRD (price differences) when
you make the settings for automatic postings, the following account groupings are already
assigned to the relevant movement types in the standard:
none for goods receipts and invoice receipts for purchase orders
PRF: for goods receipts for production orders
PRA: for goods issues and other goods movements
Modifiers for KON
If you also activate account grouping for transaction/event KON (consignment liabilities)
when you make the settings for automatic postings, the following account groupings are
already assigned to the relevant movement types in the standard:
none for consignment liabilities
PIP: for pipeline liabilities
How are the account determination attributes determined for

each transaction key/event?
Did you observe different set of fields appears for different transaction keys in
OBYC while maintaining G/L account? Yes. This is defined in Rules for the
transaction key.
EG: Select transaction key AUM in OBYC and click on Rules in toolbar.
You can see that general modification and valuation modifier is active.
If you go to G/L account maintenance for this key, you would see the same fields.
Quick snap of MM-FI Integration process:
When we do material posting for a valuated material, below flow happens.
1. Movement type and other attributes like special stock indicator, movement
indicator etc are determined based on business transaction like goods receipt for
PO, production order etc.(OMWN). This is defined by standard SAP.
2. Transaction key/event and account modifier is identified based on movement

type and other standard attributes in step 1 (OMWN)
3. Valuation grouping code activation is checked from OMWM
4. If active, for the given valuation area, valuation grouping code is identified from
OMWD
5. For the identified transaction or event, check if valuation grouping code is active
or not in OBYC (Click the rules button for the transaction key)
6. Valuation class is determined from material master.
7. Based on the above identified attributes, select the G/L account from OBYC.
If system cant find any account for the found attributes, stock posting cant be
done and system through clear error stating for which combination of attributes,
G/L account is missing. Such errors are mostly seen during go live/while posting
to new materials due to missing G/L account maintenance or due to incorrect
valuation class in material master data.
Now you know the process, here is the short cut to find out G/L.
Account determination details are stored in table T030. If you want to know based
on what details XXX account is determined, simply give that G/L in T030 table in
field KONTS. This gives the possible combination of entries where this G/L is
assigned. We can further drill down based on the filtered entries.
Please share your valuable feedback, thoughts and add additional

information/corrections if any
Check out the next blog in this series.
MM-FI integration: Account determination simulator
Thanks,
VV
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143 Comments
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Basappa Allannavar
August 26, 2014 at 6:51 am
Hello,
Its a very useful document, really helpful for me.
Thank you very much.
Vinod Vemuru Post author
August 27, 2014 at 5:57 am
Thanks dear
Ajay Goel
August 26, 2014 at 8:50 am
Thanks VV, this is really nice document.
August 27, 2014 at 5:57 am
Thanks dear
Declan Bolger
August 27, 2014 at 2:09 pm
Great summary.
August 31, 2014 at 4:46 pm
Thanks dear
Rahul Arya
September 17, 2014 at 11:56 am
Hello,
Nice document, really helpful for me.
Thank u so much .
Thanks a lot Rahul
Sapan Agarwal
Dear Vinod,
The summary at the last of the document is enough to revise the whole document.
Great Work.
BR,
Sapan
October 15, 2014 at 5:16 am
Thanks Sapan
Arvind Pereira
November 26, 2014 at 5:55 am
Vinod,
Excellent paper & thanks a lot for sharing your knowledge, keep it flowing.
Regards,
Arvind Leo Pereira
November 26, 2014 at 3:44 pm
Thanks buddy
Not much in to SCN now a days due to time constraints. But will be back as
and when time permits.
Hans-Peter Steinbacher
Thanks, very helpful.
Aziz Dohadwala
Vinod,
Wonderful document. Clears up a lot of questions.
thanks,
Aziz
November 27, 2014 at 7:20 am
Thanks Hans , Aziz
Maria Trik
January 20, 2015 at 3:53 pm
Hi,
very nice work!
Thank you and regards,
Maria
Thanks Maria
kishan kakarla
May 20, 2015 at 7:25 am
Very neatly presented and clearly explained. This is a great contribution to the
community.
Thanks Vinod for sharing.
May 22, 2015 at 2:10 am
Thanks Kishan
Sachin Jain
May 20, 2015 at 10:29 am
Nice document Vinod !!
May 22, 2015 at 2:10 am
Thanks Sachin
Rohan Patil
May 23, 2015 at 5:53 pm
Great document Vinod. Well done.
May 27, 2015 at 8:35 pm
Thanks Rohan
Marthy Ganesh
May 28, 2015 at 5:35 am
Very useful blog indeed! Thaanks a lot, VV
May 30, 2015 at 12:19 am
Thanks Ganesh
Shivakumar Subramani
June 23, 2015 at 9:00 am
Thank you for your efforts and support. Good document
June 25, 2015 at 1:01 am
Thanks Shiva
Prakash Subramanian
June 25, 2015 at 2:15 am
Thanks Viond, and you have been doing fabulous Job. Thanks for sharing your
knowledge thats a very big deal which is missed with many intelligent consultants these
days.
June 25, 2015 at 7:23 pm
Thanks a lot Prakash. Sharing knowledge only improves our knowledge

further. On top of this, if our knowledge makes some ones day, nothing
better than that satisfaction. So, it is a win-win situation
Unable to contribute more these days due to tight work schedules and time
zone differences. I see almost no postings during US day time.
Diwakar reddy Redlapalli
June 25, 2015 at 12:30 pm
Hi Vinod,
Very nice document to understand the detailed integration of FI-MM.
Thanks
Diwakar
June 25, 2015 at 7:23 pm
Thanks Diwakar
Piyush Pareta
October 6, 2015 at 8:30 am
Thank you Sir for providing this wonderful document.
October 12, 2015 at 7:02 pm
Thanks Piyush:)
sujeeth sowdri
December 4, 2015 at 3:27 pm
Explained in simplest form possible. Thanks a lot.
Dave Adoni
December 4, 2015 at 9:33 pm
Thanks for sharing Vinod.
CA Paresh Bhagwat
April 21, 2016 at 6:29 am
Nice document.
May 16, 2016 at 3:25 am
Thank you Paresh
Ashok Keshari
August 31, 2016 at 5:27 am
Thanks Vinod.
Good one and quite helpful document!
Durga sai ram Naraharisetty
Thanks Vinod.
It really helpful me and cleared lot of question. You explained neatly and presentation.
SACHIN GORE
Very nice doc.good summery.!!
Shilpa V
February 28, 2017 at 8:28 am
Thanks for your explanation
sachin shinde
May 27, 2017 at 6:56 am
thanks you
can u give explain about the link fi mm integration in simple method
Dinesh reddy M
June 23, 2017 at 9:42 pm
Hi Vinod,
You have explained clearly FI-MM Integration, Thanks for sharing the knowledge .
Awesome article
Please also share the FI-SD integration article
Thanks
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11/24/2017 MM-FI integration: A conceptual understanding | SAP Blogs

MM-FI integration: A conceptual

Most of us are comfortable with SD-FI-COPA integration concepts as it is easy to

find difficulties in understanding the concepts and account determination process.

Stock of a material owned by a company is an asset to the company. Valuation

SAP has provided two options for valuation.

1. Valuation at plant level: All materials are valuated at plant level.

This setting is defined in t-code OX14.

This defines the type of material.

EG: Raw material, Finished goods etc.

Material type is defined during material master data creation.

EG: Movement type 101 refers goods receipt

Movement type is entered while posting stock movement related transactions.

EG: If we go to MIGO, default movement type 101 is displayed by system.

Valuation class allows posting of stock values of

1. Materials of same material type to different G/L account (Different valuation

2. Materials of different material type to same G/L account (Same valuation

Valuation grouping code:

Before using valuation grouping code, it needs to be activated in OMWM.

Valuation grouping code is assigned to valuation area in t-code OMWD.

Account modification/General modification:

Transaction key which we see in OBYC is determined based on the movement

GBB (offsetting entry for inventory posting)

PRD (price differences)

KON (consignment liabilities)

Modifiers for GBB

groupings have already been assigned to the relevant movement types:

Modifiers for PRD

assigned to the relevant movement types in the standard:

PRF: for goods receipts for production orders

PRA: for goods issues and other goods movements

Modifiers for KON

already assigned to the relevant movement types in the standard:

none for consignment liabilities

PIP: for pipeline liabilities

How are the account determination attributes determined for

Quick snap of MM-FI Integration process:

When we do material posting for a valuated material, below flow happens.

PO, production order etc.(OMWN). This is defined by standard SAP.

2. Transaction key/event and account modifier is identified based on movement

3. Valuation grouping code activation is checked from OMWM

6. Valuation class is determined from material master.

Please share your valuable feedback, thoughts and add additional

Check out the next blog in this series.

MM-FI integration: Account determination simulator

August 26, 2014 at 6:51 am

Its a very useful document, really helpful for me.

Thank you very much.

Vinod Vemuru Post author

August 27, 2014 at 5:57 am

August 26, 2014 at 8:50 am

Thanks VV, this is really nice document.

Vinod Vemuru Post author

August 27, 2014 at 5:57 am

August 27, 2014 at 2:09 pm

Vinod Vemuru Post author

August 31, 2014 at 4:46 pm

September 17, 2014 at 11:56 am

Nice document, really helpful for me.

Vinod Vemuru Post author

September 18, 2014 at 6:35 am

Thanks a lot Rahul

September 23, 2014 at 9:08 am