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SAP MM TRAINING ENDEVOUR FROM SAP COE - MM

ENDEVOUR FROM SAP COE - MM


Compiled by: Kalidas K.
Date: 16-06-2011
Venue: Pune
SAP MM
ARCHITECTURE
Part-III
2011 Cognizant Technology Solutions
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ENTERPRISE RESOURCE PLANNING - SAP
Conducted by : Mohammedniyas
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Split valuation.

Vendor Consignment.

Material valuation







Agenda


Topics of Discussion

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Split Valuation


To have different prices for the same material in a Plant,
Split valuation function is used .

Reasons for having different price

Different origins of the material

Different grades of quality for the material

Different statuses for the material

Differentiation between in-house production and external
procurement
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Configurations for Split valuation

Activating the Split valuation

Creation of Valuation category

Creation Of valuation Types

Linking Valuation category to valuation type

Activate the Valuation categories to Plant

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The valuation category specifies which criterion should be
used as the basis for differentiating between the various
partial stocks.

The standard system contains several default valuation
categories, for example:
B for procurement type

The stock is divided up according to whether the material is
manufactured in-house or procured externally.
H for origin

Valuation category

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There are valuation types for each valuation category, which
specify which individual characteristics exist for that
valuation category. Each valuation type represents the name
of a sub-stock



Valuation Type

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Configuration
IMG: Material Management > Valuation > Split Valuation

1. Activate Valuation T.code OMW0


Split valuation function Configuration

Configure Split Valuation T.code OMWC
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Creation of valuation category








Split valuation configuration
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Linking Valuation category to valuation type









Split valuation configuration
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Linking Valuation category to Plant













Split valuation configuration
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Activating split valuation in material









.


Split valuation configuration
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Consignment process is process in which the vendor
provides materials and stores them on your premises.
The vendor remains the legal owner of the material until
you withdraw materials.

Consignment stocks are considered as special stocks in
SAP, when the material is withdrawn it is valuated at the
price of the respective vendor
Consignment Process
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Before you can order a material from a vendor or post a goods receipt to
consignment stock, you must maintain the consignment price for the vendor in
an info record. The price is required for material valuation and accounting
purposes.

If you order consignment material from several vendors, the system maintains
the consignment stock separately for each vendor, since the individual quantities
of the material can have different prices with each vendor.








Pricing for consignment stocks
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A withdrawal from the consignment results in the following updates in the
system:

The consignment withdrawal results in a vendor liability that must be
settled.

A consumption history is updated.

No need to expect an invoice from the vendor for goods withdrawals from
a pipeline. Instead settle for the posted withdrawals and return deliveries
ourselves and send the vendor a statement of the settlement. The following
documents can be involved:

Invoices

Credit memos
Consignment settlement
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Consignment settlement
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Consignment settlement
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Material Valuation

Material Valuation depends on the following parameters:

Valuation Level Valuation Area

Material Accounting Data

Price Control in material master Standard Price or Moving Average Price


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Valuation Area
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Valuation level
Valuation Area at company code level:

If the valuation area maintain at company code level then the valuation price of the
material is the same in all of the plant maintain in the company code.

Valuation Area at Plant level:

If the valuation area maintain at plant level then the valuation price of the material can
be different in each of the plant maintain in the company code.
So SAP recommends that maintain the valuation area at plant level so that we can
differentiate the valuation price of the material in each and every plant. As well as
valuation area at plant level is mandatory if you want to use either of the production
planning or product cost accounting components or if the system is a Retail system.
Note: Once if the valuation level defined in the customizing and it is very difficult to
reverse




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Transactions involved in material valuation

Transactions in Inventory Management that affect Accounting are:

Goods Receipts
Goods Issues
Stock Transfer and Transfer Posting

These transactions can change the valuation price of the material, depending on the type of
price control.

Postings in Invoice Verification can also affect Material Valuation.









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Transactions involved in material valuation
SAP AG 1999
Valuation of Goods Movements
SAP AG 1999
Valuation of Goods Movements
Initial entry of stock balances:
Receipts are valuated at the current material price or
using another amount specified externally.
Initial entry of stock balances:
Receipts are valuated at the current material price or
using another amount specified externally.
Goods receipt for purchase order:
Receipts are valuated at the order price (GR before IR)
or at the invoice price (IR before GR).
Goods receipt for purchase order:
Receipts are valuated at the order price (GR before IR)
or at the invoice price (IR before GR).
Goods issue:
Issues are valuated at the current material price (or using
another amount specified externally).
Goods issue:
Issues are valuated at the current material price (or using
another amount specified externally).
Free delivery:
The value of receipts is zero.
Free delivery:
The value of receipts is zero.
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Types of Price control in material valuation
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Moving Average price
Moving Average Price:

In the moving average price procedure (price control V), the system valuates goods
receipts with the purchase order price and goods issues with the current moving average
price. The system automatically calculates the latter upon every goods movement by
dividing the total value by the total stock quantity. Differences between the purchase order
price and the invoice are posted directly to the relevant stock account if there is sufficient
stock coverage.

Generally SAP suggests that maintain the price control MAP (V) for the raw material and
semi finished material and it vary depends on the business scenario.

The formula to calculate the MAP (V) is

MAP = Total Value/Total Stock








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Standard price
Standard Price:

In the standard price procedure (price control S), the system carries out all stock postings
at a price defined in the material master record. Any variances are posted to price
difference accounts.

All goods issues, such as issues to a production order, are valuated at the same standard
price. This allows better analysis of the costs of production orders.

Generally SAP suggests that maintain the price control Standard price (S) for the finished
goods and it vary depends on the business scenario.

The material price can be changed if required generally using MR21 transaction










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Standard price Scenario
Steps Transaction Stock Total Value
(INR)
Standard
Price (INR)
MAP (INR)
1 Start of the scenario 100 200 2.00 2.00
2
GR for PO: 100 @ 2.40
200 400 2.00 2.20
3 IR for PO: 100 @ 2.20 200 400 2.00 2.10
After GR is done for the above PO. Then the system generated the following accounts
after GR Posting
Stock account - 200.00 INR (D)
GR/IR account 240.00 INR (C)
Price difference account (Expense account) 40.00 (D)







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Standard price Scenario
After posting the IR system has generated the following accounts:
Vendor account 220.00 INR (C)
GR/IR account 240.00 INR (D)
Price Difference account 20.00 INR (C)
The price difference account 20.00 INR has been credited because IR amount is 220 INR instead of
240 INR so the remaining amount 20 INR credited to the price difference account.








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Moving average price Scenario
Steps Transaction Stock Total Value
(INR)
Standard
Price (INR)
MAP (INR)
1 Start of the scenario 100 200 2.00 2.00
2
GR for PO: 100 @ 2.40
200 440 2.00 2.20
3 IR for PO: 100 @ 2.20 200 420 2.00 2.10
I have done the GR for the above PO. Then the system generated the following accounts
after GR Posting
Stock account - 240.00 INR (D)
GR/IR account 240.00 INR (C)




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Moving average price Scenario
After GR the material master record updated like below
Initially the material stock was 100 and the price was 2.00/PCS and the GR happened for
100 quantities with the price 2.40/ Pcs. So now the stock is 200 (100+100) and the total
value is 440 (200+240). So the MAP is calculated based on the formula
MAP = 440.00/200.00 = 2.20




After posting the IR system will generates the following accounts:
Vendor account 220.00 INR (C)
GR/IR account 240.00 INR (D)
Stock Account 20.00 (C)
The stock account 20.00 INR has been credited because IR amount is 220 INR instead of
240 INR so the remaining amount 20 INR credited to the stock account.



MAP = 420/200 = 2.10
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ITS TIME FOR DISCUSSION..

Open House !!!
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Thank you !