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MM Configuration - V.1.1 PDF
MM Configuration - V.1.1 PDF
Management
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Contents
2. Organizational Structure .......................................................................................................... 8
2.1 Company ....................................................................................................................................... 9
2.2 Company Code............................................................................................................................. 11
2.3 Plant ............................................................................................................................................ 16
2.4 Storage Location .......................................................................................................................... 20
2.5 Purchase organization.................................................................................................................. 22
2.6 Assign company code to Company ............................................................................................... 23
2.7Assign Plant to Company Code ...................................................................................................... 24
2.8. Assign Purchase Organization to Company Code ......................................................................... 24
2.9 Assign Purchase Organization to Plant ......................................................................................... 25
2.10 Assign Standard Purchase organization to Plant ......................................................................... 25
3. MASTER DATA ........................................................................................................................ 26
3.1Material Master ........................................................................................................................ 26
3.1.1Define Output Format of Material Number ................................................................................ 28
3.1.2 Industry Sector.......................................................................................................................... 29
3.1.3 Material Types .......................................................................................................................... 30
3.1.4 Define Number Range for each Material type ........................................................................... 35
3.1.5 Maintain Company Codes for Materials Management............................................................... 38
3.1.6 Maintain Field Selection for Data Screens ................................................................................. 38
3.1.7 Assign Fields to Field Selection Groups ...................................................................................... 39
3.1.8 Material Groups ........................................................................................................................ 41
3.1.9 Maintain Attributes of System Messages .................................................................................. 41
3.1.10Define Shipping Instructions .................................................................................................... 42
3.11 Define Purchase Value Keys ....................................................................................................... 42
3.1.12 Transactional Data of Material Master .................................................................................... 43
3.2 Vendor Master ........................................................................................................................ 46
3.2.1 Define Account Group and Field Selection ................................................................................. 47
3.2.2 Define Number Ranges for Vendor Master Records .................................................................. 51
3.2.3 Define Payment Terms .............................................................................................................. 52
3.2.4 Check Inco Terms ...................................................................................................................... 54
3.2.5 Message Controls of Vendor Master ......................................................................................... 54
3.2.6 Transaction Data of Vendor Master........................................................................................... 55
3.3 Purchase Info Record .......................................................................................................... 56
3.3.1 Define Number Ranges ............................................................................................................. 58
3.3.2 Define Screen Layout ................................................................................................................ 59
3.3.3 Define Price History .................................................................................................................. 60
3.3.4 Transaction Data of Purchase Info record .................................................................................. 61
3.4 Source List ............................................................................................................................... 62
3.4.1 Define Source List Requirement at Plant Level .......................................................................... 62
3.4.2 Transaction data for Source List ................................................................................................ 63
3.5 Quota Arrangement .............................................................................................................. 63
3.5.1 Define Number Ranges ............................................................................................................. 63
3.5.2 Define Quota Arrangement Usage............................................................................................. 64
3.5.3 Transaction Data of Quota Arrangement ................................................................................... 65
4. Procurement Cycle .................................................................................................................. 66
4.1 Purchase Requisition ........................................................................................................... 68
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4.1.1 Define Number Ranges ............................................................................................................. 69
4.1.2 Define Document type .............................................................................................................. 70
4.1.3 Define Process Time .................................................................................................................. 73
4.1.4 Define Screen layout at document Level ................................................................................... 74
4.1.5 Texts for Purchase Requisition .................................................................................................. 76
4.1.6 Set up authorization Check for G/L account .............................................................................. 77
4.1.7 Transaction Data of Purchase Requisition ................................................................................. 77
4.2 Request for Quotation .......................................................................................................... 78
4.2.1 Define Number Ranges ............................................................................................................. 79
4.2.2 Define Document types............................................................................................................. 80
4.2.3 Define Screen layout at document Level ................................................................................... 81
4.2.4 Maintain Quotation Comments ................................................................................................. 82
4.2.5 Texts for RFQs / Quotations ...................................................................................................... 82
4.2.6 Transaction Data of Request for Quotation ............................................................................... 83
4.3 Purchase order ....................................................................................................................... 84
4.3.1 Define Number Ranges ............................................................................................................. 86
4.3.2 Define Document types............................................................................................................. 87
4.3.3 Define Screen layout at document Level ................................................................................... 88
4.3.4 Set Tolerance Limit For price Variance ...................................................................................... 88
4.3.5 Texts for Purchase order ........................................................................................................... 90
4.3.6 Set up authorization Check for G/L account .............................................................................. 91
4.3.7 Transaction Data of Purchase order .......................................................................................... 91
4.4 Release Procedure ............................................................................................................... 93
4.4.1 Edit Characteristic ..................................................................................................................... 94
4.4.2 Edit Class .................................................................................................................................. 96
4.4.3 Define Release Procedure for Purchase order ........................................................................... 97
4.5 Contracts ................................................................................................................................. 107
4.5.1 Define Number Ranges ........................................................................................................... 108
4.5.2 Define Document types........................................................................................................... 108
4.5.3 Define Screen layout at document Level ................................................................................. 109
4.5.4 Transaction Data of Contracts ................................................................................................. 109
4.6 Scheduling Agreement ...................................................................................................... 110
4.6.1 Define Number Ranges ........................................................................................................... 110
4.6.2 Define Document types........................................................................................................... 110
4.6.3 Define Screen layout at document Level ................................................................................. 111
4.6.4 Transaction Data of scheduling agreement ............................................................................. 111
4.7 Pricing Procedure ................................................................................................................ 112
4.7.1 Define Access Sequence .......................................................................................................... 113
4.7.2 Define Condition Type............................................................................................................. 114
4.7.3 Define Calculation Schema ...................................................................................................... 117
4.7.4 Define Schema Group ............................................................................................................. 118
4.7.5 Define Schema Determination ................................................................................................ 121
4.7.6 Define Transaction/Event key ................................................................................................. 122
4.7.7 Maintain Condition Table ........................................................................................................ 123
4.8 Version Management ......................................................................................................... 127
4.8.1 Setup Version Management for Purchase Requisition ............................................................. 127
4.8.2 Setup Version Management for External Documents .............................................................. 128
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4.8.3 Define Reason for Changes ..................................................................................................... 129
4.9 Reporting ................................................................................................................................ 131
4.9.1 Define scope list...................................................................................................................... 131
4.9.2 Define default values for transactions ..................................................................................... 133
4.9.3 Define selection parameters ................................................................................................... 133
4.9.4 Define default values for transactions ..................................................................................... 135
4.10. Message Determination................................................................................................. 135
5. Inventory Management ........................................................................................................ 139
5.1. Define Plant Parameters ........................................................................................................... 143
5.2Define Number Range assignment for material & Physical inventory documents ........................ 145
5.3Define Number Range assignment for Reservation ..................................................................... 147
5.4Field Selection for MIGO ............................................................................................................. 149
5.5Field Selection for Movement type ............................................................................................. 150
5.6Settings for Transactions and Reference Documents ................................................................... 151
5.7. Movement Types ...................................................................................................................... 153
5.8. Copy Change Movement Type .................................................................................................. 155
5.9. Record Reason for Movement Type .......................................................................................... 157
6. Goods Receipts ............................................................................................................................ 158
6.1. Set Tolerance Limits .................................................................................................................. 161
6.2. Create Storage Location Automatically...................................................................................... 162
6.3. Create Purchase order automatically ........................................................................................ 163
6.4. Define Screen Layout ................................................................................................................ 164
6.5. Set Delivery Completed Indicator .............................................................................................. 165
6.6. For GR Based Invoice, Reversal of Invoice Despite invoice ......................................................... 166
6.7. Set Expiration Date Check ......................................................................................................... 167
6.8. Price Difference for Sub contracting orders at Goods Receipts .................................................. 168
6.9. Transaction Data of Goods Receipts .......................................................................................... 169
7. Goods issues and Transfer Postings .............................................................................................. 178
7.1. Create Storage Location Automatically...................................................................................... 182
7.2. Define Screen Layout ................................................................................................................ 183
7.3. Allow Negative Stocks ............................................................................................................... 183
7.4. Set up Dynamic Availability Check ............................................................................................. 185
7.5. Transaction Data of Goods issues/Stock Transfer/Transfer Postings .................................... 188
7.5. Automatic Movements ............................................................................................................. 190
7.6. Create Storage Location Automatically...................................................................................... 191
7.7. Define Screen Layout ................................................................................................................ 192
7.8. Set Expiration Date Check ......................................................................................................... 192
7.12. Reservation............................................................................................................................. 193
7.13. Define Default Values.............................................................................................................. 194
7.14. Set Dynamic Availability Check ................................................................................................ 195
7.15. Transaction Data of Reservation ............................................................................................. 196
7.16. Define Field Selection for Material Document List ................................................................... 197
7.17 Authorization Check for Storage Location ................................................................................ 198
7.18 Authorization Check for G/L Account ....................................................................................... 199
7.19 Define Attributes of System Message ....................................................................................... 199
8. Physical Inventory ........................................................................................................................ 200
8.1. Define Number Assignment for Material Physical Inventory Document ..................................... 201
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8.2. Define Field Selection for Physical Inventory ............................................................................. 202
8.3. Default Values for Physical Inventory ........................................................................................ 202
8.4. Settings for Physical Inventory .................................................................................................. 203
8.5. Default Values for Batch Input .................................................................................................. 205
8.6. Allow Freezing of Book Inventory Balances in Storage Location ................................................. 206
8.7. Cycle Counting .......................................................................................................................... 206
8.8. Transaction Data of Physical inventory ...................................................................................... 207
9. Valuation and Account Assignment................................................................................. 209
9.1Account Determination............................................................................................................... 209
9. 1.1 Define Valuation Control ........................................................................................................ 215
9. 1.2 Group Together Valuation Areas ............................................................................................ 216
9. 1.3 Define Valuation Classes ........................................................................................................ 217
9. 1.4 Define Account Groupings for Movement types ..................................................................... 220
9. 1.5 Configure Automatic Postings ................................................................................................ 220
9.2 Purchase Account Determination ............................................................................................... 224
9.2.1 Activate Purchase Accounts in Company Code ........................................................................ 224
9.2.2 Calculation of Value Purchase Accounts .................................................................................. 225
9.2.3 Separate Accounting Documents for Purchase Accounts ......................................................... 226
9. 3 Split Valuation........................................................................................................................... 230
9. 3.1 Activate Split Valuation .......................................................................................................... 230
9. 3.2 Configure Split Valuation ........................................................................................................ 231
Assignment Process: ........................................................................................................................ 231
10. Invoice Verification .............................................................................................................. 237
10.1 Maintain Number Assignments for Accounting Documents ...................................................... 241
10.2 Maintain Number Range Intervals for Invoice Documents ........................................................ 243
10.3 Tax Treatment in Invoice Reduction ......................................................................................... 245
10.4 Maintain Default Values for Tax codes ..................................................................................... 245
10.5 Configure How Unplanned Delivery Costs are posted ............................................................... 246
10.6 Activate Direct Postings to G/L Accounts and Materials ........................................................... 247
10.7 Set Check for Duplicate Invoice ................................................................................................ 248
10.8 Determine Payment Block ........................................................................................................ 248
10.9 Set Tolerance Limits ................................................................................................................. 249
10.10 Activate Stochastic Block ........................................................................................................ 250
10.11 Set Stochastic Block ............................................................................................................... 251
10.12 Define Attributes of System Messages ................................................................................... 252
10.13 Transaction Data of Invoice Verification ................................................................................. 253
11. External Service Management........................................................................................ 254
11.1 Define Organizational Status for Service categories .................................................................. 255
11.2 Define Service category............................................................................................................ 256
11.3 Define Number Ranges ............................................................................................................ 257
It is similar to regular number assignment. ...................................................................................... 257
11.4 Define Number Ranges for Service Entry Sheets ....................................................................... 257
11.5 Source Determination and Default Values ................................................................................ 258
11.6 Transaction Data of Service Purchase Process .......................................................................... 259
12. Special Stock Process in Material Management ............................................................... 264
12.1 Consignment............................................................................................................................ 264
12.2 Subcontracting ......................................................................................................................... 268
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12.3 Returnable Transport Packing .................................................................................................. 273
12.4 Pipeline Handling ..................................................................................................................... 274
13. Special Scenario in Material Management ........................................................................ 276
13.1 Automatic G/L account in Service Purchases ............................................................................ 276
13.2 Reporting in Purchasing ........................................................................................................... 278
13.2 1. Define Default Values for Transactions ................................................................................. 278
13.2 2. Define Selection Parameters ................................................................................................ 278
13.2 3. Define Default Values for Transactions ................................................................................. 279
13.2 4. Define Default Values for Transactions ................................................................................. 279
13.3 Vendor Evaluations .................................................................................................................. 280
13.3.1 Define Weighing Keys ........................................................................................................... 282
13.3.2 Define Criteria....................................................................................................................... 282
13.3.3 Define Scope List ................................................................................................................... 283
13.3.4 Maintain Purchase Organization Data ................................................................................... 284
13.4 Import Purchase Process .......................................................................................................... 285
1. SAP Overview
SAP Stands for:-
System, Anwendungen, Produkte in der Datenverarbeitung (in German)
Systems, Applications & Products in Data Processing (in English)
FACTS ABOUT SAP AG
Founded by five former IBM employees in 1972 and head quartered in Walldorf,
Germany.
Leading global provider of client/server business software solutions.
Number one vendor of standard business application software, with a worldwide market
share of 31%.
Fourth-largest independent software supplier in the world.
SAP R/3
R/3 employs a 3-tier client/server architecture;
The database layer resides on the central server.
The Application layer holds the processing logic of the system.
The Presentation layer, typically on personal computers.
R/3 APPLICATIONS
R/3 applications are categorized into 03 core functional areas ;
Logistics
Financial
Human Resources
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LOGISTICS APPLICATIONS
Logistics is the largest of the three functional areas. It includes the following modules
MM - Materials Management
SD - Sales and Distribution
WM - Warehouse Management
PP - Production Planning
LO - General Logistics
QM - Quality Management
FINANCE APPLICATIONS
FI - Finance
CO - Controlling
IM - investment Management
HUMAN RESOURCE S
PA - Personal Administration
PD - Personal Development
INFORMATION INTEGRATION THRO’ ERP SYSTEM
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2. Organizational Structure
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2.1 Company
Client
Configuration:
R
T-code SPRO
MenuPath
SAP AG
SPRO IMG Enterprise StructureDefinition Financial
accounting Define Company
Click
on new entries
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Maintain above details, then enter save.
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2.2 Company Code
Configuration:
T-code EC01
Creat
e your company codes based on the reference (company code 1000) delivered with the
standard system. SAP recommends using the function "Copy Company Code" to create your
company codes.
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Click on Copy Org Object
Enter from company code 1000 in ides system and 0001 in real time.
To company code will be company code which you‟re going to be create.
Click on Yes
Click on Yes
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Enter the country currency
Keep continue then save the company code.
Continue
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Go to position
Enter
Click on details
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Maintain complete address as per the company letter head.
Continue
Save.
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2.3 Plant
Plant
Configuration: R
T-code
SAP AG OX10
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Maintain above details then click on address icon
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Maintain plant address
Then continue
Save.
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Click on copy org objects
Enter from plant 1000 in IDES system and 0001 in real time.
To plant will be which was created in the earlier step.
Continue
Click on yes
Keep continues
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Click on NO
Storage Location
T-code OX09.
Plant: HIL1
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Press enter
Save.
The above screen shots provides the storage locations maintained for the plant of CLIENT
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2.5 Purchase organization
Purchasing
Organization
Configuration: R
T-code OX08
SAP AG
Go to new entries
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T-code SPRO
Maintain purchase group code and description. No need to assign to any organizational
objects.
Assignments
2.6 Assign company code to Company
Configuration:
T-code SPRO
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2.7Assign Plant to Company Code
In the IMG activity "Assignment Plant - Company Code" you assign each plant to a company
code.
A plant can only belong to one company code.
Configuration:
T-code OX18.
You can assign a purchasing organization to one company code. This is company-specific
purchasing.
Configuration:
T-code OX01.
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2.9 Assign Purchase Organization to Plant
Assignment of purchasing organizations to the plants, for which they are responsible, so that
One purchasing organization procures for several plants.
Plant specific purchase org: one purchase org is responsible for one plant ( plant is assigned to
only one purchase org).
Central purchase org: one purchase org is assigned to more than one plant ( for plant more than
one purchase org are assigned).
Configuration:
T-code OX17.
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Configuration:
T-code SPRO
3. MASTER DATA
3.1Material Master
Master data:
The data in consolidation system that remains unchanged over a long period of time called
master data.
The material master contains information on all the materials that a company procures or
produces, stores, and sells.
It is the company's central source for retrieving material-specific
Data. This information is stored in individual material master records.
The data in a material master record can be divided into two categories:
• Data of a purely descriptive nature
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This is data with information content such as name, size, or dimension.
• Data that the system uses to perform a control function
This is data such as MRP type and price control.
Since different departments in a company work with the same material, but each department
uses different information on the material, the data in a material master record is subdivided by
user department.
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Material Master Tables
T-code OMSL
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o If leading zeros is active: if material number ranges are internal, zero will be valid.
Ex : material number length 5 characteristics
Material number range 1 – 10000
Material number will be 00001
You should enter the material number 00001 every time in the transaction.
If leading zero is not activated, system generates the material number 1.
o Lexicographical: if lexicographical is activate leading zero will not be updated in
the database. If not leading zero will be updated in the data base tables like
MARA.
o Best combination is lexicographical is activate and leading zero is not activate.
o Material number template: as per the desired requirement you can maintain the
material number template for creation of material number. It will be used for only
external number ranges and complete system. It is not possible to restrict with
material type wise.
When you create a material master record, classify the material according to industry
sector and material type.
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Industry sectors have control functions in the R/3 System. It determines the screen
sequence and field selection in a material master record. Once you have assigned an
industry sector to a material, you cannot change the industry sector again afterwards.
Configuration:
T-code OMS3
Click on copy as
Save.
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Control functions in the material type
Standard SAP Material types : Below materials are important standard material types.
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S.No Material Type Description
1 DIEN SERVICES
2 ERSA SPARE PARTS
3 FERT FINISHED GOODS
4 HALB SEMI FINISHED GOODS
5 HAWA TRADING GOODS
6 HERS MANUFACTURER PARTS
7 HIBE OPERATING SUPPLIES
9 KMAT CONFIGURABLE MATERIAL
10 LEIH RETURNABLE PACKAGING
11 NLAG NON-STOCK MATERIAL
12 PIPE PIPELINE MATERIAL
13 ROH RAW MATERIAL
14 UNBW NON- VALUATED MATERIAL
15 VERP PACKAGING MATERIAL
Configuration:
T-code OMS2
It is not recommended to use the standard material types as it is. Create new material types as
per the requirements. As per the standard sap prefix must be Z or Y.
For creation of new movement type
Select required reference material type
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Click on copy as
Rename the code and description of material type then press enter
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Enter
Save.
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User departments, procurement type and field selection
Then activate qty update and value update as per the requirements.
Similarly create all required material types.
3.1.4 Define Number Range for each Material type
It is possible to define external or internal number ranges for the materials. For internal number
range system will allow for only numeric, for external alphanumeric.
Configuration:
T-code MMNR
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Go to menu bar > group > insert
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Continue
Find out group which was created
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Select material type > click on select element group > click assign element group
save.
T-code OMSY
Find out your company code then enter current year and month
Save.
If ABP is activate, we can post inventory transaction in the previous month.
3.1.6 Maintain Field Selection for Data Screens
To define whether a field is hidden or displayed, or whether an entry is mandatory or optional in
material master maintenance, you must assign the field to a field selection group. Define field
selection group by using of standard field selection available in the material type which is
created. As per SAP standards use prefix as Z or Y for field selection group. Make necessary
change for the fields like required, optional, display, hide as per the requirements. It is always
recommended to assign one field selection group to one material type.
Configuration:
T-code OMS9
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For creation of new field selection group > go to material type OMS2 transaction > check the
field reference group.
Select the same field reference group
Click on copy as
T-code OMSR
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Click on sort field selection groups
Select field selection group then remove the field selection number against the field wise.
Ex: my requirement is material group field only.
Save.
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3.1.8 Material Groups
Material Groups are used for reporting purpose. These are done at Client Level and do not
belong to any Identity. Multiple material groups can be assigned under one material type but not
vice- versa.
Configuration:
T-code OMSF
Configuration:
T-code OMT4
Based on the requirement select the message number > maintain the message status
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3.1.10Define Shipping Instructions
These are certain instructions in purchase orders issued to Vendors. When the relevant goods
receipts are entered, the extent to which the vendor has complied with these instructions can
then be noted. Shipping Instructions should be assigned in Purchase value key. It is possible to
assign one shipping value key to one purchase value key.
Configuration:
T-code SPRO.
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Purchase value key should be assigned in material master, under the purchasing value, then
only the purchase value key functionality will be work.
Configuration:
T-code SPRO
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Foreign Trade: Export Data Sales and Distribution
Accounting 1 Finance
Accounting 2 Finance
Costing 1 Controlling
Costing 2 Controlling
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Note: Material views and responsible module will be change depend on the project or client
requirements.
Material Master contains 27 material views
Maximum length of material description is 40 characteristic including space and special
characteristics.
Basic data 1 , basic data 2 , Purchasing , General Plant Data / Storage 1, General Plant
Data / Storage 2, Accounting 1 and Accounting 2 views are required for practice of MM
transactions .
Once view is extended to the material it is not possible to de activate the material view.
Base unit of measure, Batch Management, valuation class field information it can‟t be
changed after occurring of transactions. However provision is there for change of above
field information provide clear all transactions which are occurred so for , like purchase
order , stocks, reservations etc.
Price control indicator : Indicates the price control used to valuate the stock of a
material. You have the following options:
Standard price ( S ) – Used for manufacturing products
Moving average price ( V) – Purchased products
General recommendation will be if material is to purchase and manufactured then also
use Moving average price
Don‟t changes the price control if stock is available, if price control is changed system
generates an accounting document for price difference account. if required to change
price control follow the appropriate procedure .
Material Master Transaction codes as follows
MM01 : Create Material Master
MM02 : Change Material Master
MM03 : Display Material Master
MM04 : Display Changes in Material Master
MM06 : Flag for Deletion of Material
MMSC : Extend storage locations
MM50 : Extend Material Views
MM60 : List of Material Master
MMPV : Close the periods
MMRV : Allow back Postings
MMAM :Change Material type
MM17 : Mass Maintenance
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3.2 Vendor Master
The vendor master database contains information about the vendors that supply an enterprise.
This information is stored in individual vendor master records. A vendor master record contains
the vendor‟s name and address, as well as data such as:
The currency used for ordering from the vendor
Terms of payment
Names of important contact persons (sales staff)
Since, to the accounts department, vendors are generally creditors (accounts payable), the
vendor master record also contains accounting information, such as the relevant control account
(reconciliation account) in the general ledger.
Therefore, the vendor master record is maintained by both Accounting and Purchasing.
General data
Purchasing
data Accounting data
1. General data R
Data that applies equally to each company code within your enterprise (address, telephone
SAP AG
number, language in which you communicate with your vendor, etc.).
2. Company code data
Data kept at company code level (payment transaction data or number of control account, for
example).
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3. Purchasing data
Data that is of importance with regard to your enterprise‟s purchasing activities and which is
kept at purchasing organization level (such as contact person or terms of delivery).
Vendor account group is control function in the vendor master.
T-code OMSG
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Select KRED > click on copy as
Rename the vendor group code and description then press enter
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Select the group > click on details
For partner functions maintain partner schema group, for Vendor sub-range relevant is active.
For field selections
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Example for vendor account groups in the real time.
Code for vendor account group will be 4 characteristic (numeric or alpha numeric).
One Time Vendor Concept: Vendor master data is not maintained completely,
Ex : Machine is breakdown at night , purchase department is not available at that time .
Maintenance department person go outside and purchase a required material for the machine in
the market .In sap vendor master data is not available hence we are not purchased the material
in open market. This one time vendor purchases. Vendor address and other communication
details will not be maintained in the vendor master, these details will be maintained in purchase
order or invoice verification. like canteen material purchases and refreshment material
purchases.
Only one vendor is created on the name of one time vendor. Standard vendor account group is
0099.
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3.2.2 Define Number Ranges for Vendor Master Records
We define the number intervals of the number ranges for vendor master records. When a
vendor master record is created, a unique number identifying the master record is assigned.
The number comes from the number range provided for the account group.
There are two ways in which numbers can be assigned:
Internal number assignment
Here the SAP R/3 System automatically assigns a consecutive number from the number
range defined.
External number assignment
Configuration:
T-code OMSJ.
Click on intervals
Click on intervals
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Maintain number object and number range
Save.
Click on
Find out your vendor account group
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You enter this key in the vendor master record in order to specify terms of payment for a
vendor.
Configuration
T-code OME2
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3.2.4 Check Inco Terms
"Inco terms" are international rules for the interpretation of the most commonly used terms of
foreign trade. Inco term in simple term is risk sharing between vendor and customer. In
particular, the Inco terms regulate
The division of costs, and
The transfer of risks.
Configuration:
T-code SPRO
T-code SPRO
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3.2.6 Transaction Data of Vendor Master
GR-Based Invoice Verification:
Indicator specifying that provision has been made for goods-receipt-based invoice verification
for a purchase order item or invoice item.
Service-Based Invoice Verification:
Indicates that service-based invoice verification is defined for a purchase order item.
In service-based invoice verification, the quantities and values of services performed and
ordered to date are available for checking purposes. As in the case of invoice verification for
materials, you are able to change quantities and values within the permitted tolerances.
In addition, if service-based invoice verification is active, the acceptance posting is carried out at
the level of the services in the entry sheet, and the quantities and values of the accepted and
invoiced services are shown in the PO history.
XK01: Create vendor Master
XK02: Change vendor Master
XK03: Display Vendor Master
XK04: Display Changes of Vendor Master
XK05: Block Vendor Master
XK06: Flag for Deletion of vendor Master
XK07: Change Vendor Account Group
MKVZ: List of Vendors
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3.3 Purchase Info Record
The purchasing info record (also referred to in abbreviated form as the "info record") contains
information on a specific material and a vendor supplying the material. For example, the
vendor's current pricing is stored in the info record.
The combination of both material master and vendor master is called as purchase info record.
The info record allows buyers to quickly determine:
Which materials have been previously offered or supplied by a specific vendor
Which vendors have offered or supplied a specific material
Whatever data stored in purchase info record will follow in to the purchase order
document
Purchase info record (PIR) will be created at plant level and purchase org level.
PIR is valid for all the plants covered by the purchase org or for a single plant with one
purchase org. If PIR is created at purchase org level then PIR is valid for all plants which
are assigned to the purchase org.
PIR can be created manually or automatically.
PIR can be created manually by using of transaction ME11( Create Purchase info
record).
PIR Can be created automatically while creation of purchase order to vendor for the
material under the purchase org and plant. Info update field is checked by default in the
system hence PIR is created automatically while creation of purchase orders. if PIR is
available system update the price difference in the same PIR which is already available.
Purchase info record Structure:
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The info record contains quotation and ordering data. The data in the info record (prices for
example) is also used as default data for purchase orders.
For instance, you can store the current and future quotation conditions (discounts, fixed costs
etc.) in the info record.
Standard
A standard info record contains information for standard purchase orders. The info
records can be created for materials and services with and without master records.
Subcontracting
A subcontractor info record contains ordering information for subcontract orders. For
example, if you subcontract the assembly of a component, the subcontractor info record
would include the vendor's (subcontractor‟s) price for assembling the component.
Pipeline
A pipeline info record contains information on a vendor‟s commodity that is supplied
through a pipeline or pipes (for example, oil or water) or by similar means (for example,
electricity through the mains). The info record contains the vendor‟s price for the
consumption of such commodities by the buyer ("pipeline withdrawals"). You can store
withdrawal/usage prices for different validity periods.
Consignment
A consignment info record contains information on a material that vendors keep
available at their own cost on the orderer‟s premises. The info record contains the
vendor‟s price for withdrawals by the orderer from consignment stock. As in the case of
the pipeline info record, you can store prices for different validity periods
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Purchase info record Tables
EINA: PIR Main Data
EINE: PIR Purchase org Data
KONH: Condition Header
KONP: Condition Item
T-code OMEO.
If required create a new group and assign number ranges for purchase info record as per the
requirements. Number range assignment part is similar to material master.
Note: it is not possible to purchase info record for material group ( non stock material ( without
material code) in ME11 transaction.
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3.3.2 Define Screen Layout
Make the settings for the screen layout and field attributes In the purchasing info record, you
can control the attributes of input fields. You can specify which fields:
Require an entry (required-, or mandatory-entry field)
Permit an entry (optional-entry field)
Do not allow an entry (display-only, or hidden field)
Control of the input attribute of a field depends on the screen layout in PIR.
Configuration:
T-code SPRO
So for the material master and vendor master we did field selection based type not t code wise.
In purchase info record we need to do the field selection based on t code wise.
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Select the t code then click on details
Select the fields then make it as a required/optional/display/hide. For hide don‟t select the check
box.
Save.
3.3.3 Define Price History
Specify whether the purchase order price history is to be updated with the net price or the
effective price.
Set the indicator if the order price history is to be updated with the effective price.
Ex : QTY TOTAL
Gross price 100 10 1000
Tax 4 10 `40
Net Price 104 10 1040
Freight 10 10 100
Effective Price114 10 1140
By default system update net price in PIR history.
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Configuration:
T-code OMHP
Reports
ME1L: Purchase info record by Vendor
ME1M: Purchase info record by Material
ME1C: Purchase info record by Material Group
***ME1P: Order Price History
ME1E: Quotation Price History
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3.4 Source List
It is also a master record and gives a list of vendors available for a particular material
and checks the validity.
It specifies the possible source of supply for a material over a given period of time.
In the source list you can block a vendor for a single material or fix the vendor.
Source list can be activated at material level and plant level. Always recommended to
activate at material level only.
For activation of source list at material level go to material master > purchasing view >
check source list. If source list is activated without source list it is not possible to create a
purchase order. It is possible to create a purchase order which are vendors are
maintained in the source list.
Source list can be created manually or automatically from outline agreements or
purchase info record by using info update.
Provision is not available for marinating of number ranges to source list.
It is not possible to maintain the source list for one time vendors.
Table for source list is EORD.
T-code OME5
If source list is activated at plant, source list must be maintained for all materials in the plant.
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3.4.2 Transaction data for Source List
While creation of source list material number and plant are required.
It is possible to activate the source list for material after occurring of transaction, in this
case source will be generated automatically when click on generate icon in the source
list. While generation of source list system consider the all purchase info records.
ME01: Maintain Source List
ME03 : Display Source List
ME04 : Display Changes in Source List
MEOM : Source List by Materials
3.5 Quota Arrangement
The system can make use of a certain mechanism to determine which source is to be assigned
to a material requirement. The assignment of requirements to different vendors and plants is
based on quota arrangements. 60% of a material requirement can be automatically assigned to
one vendor and the remaining 40% to another, for example.
In this process, you display the material master record (quota arrangement field) and a quota
arrangement. To see how the system assigns sources on the basis of quota arrangements, you
enter two manual purchase requisitions and have the sources assigned. The system assigns
different sources in accordance with the quota arrangement.
3.5.1 Define Number Ranges
Create a group for quota arrangement and assign numbers to group. Assign element Q to the
quota arrangement Group.
Configuration:
T-code OMEP
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3.5.2 Define Quota Arrangement Usage
Below elements are consider for quota arrangement usage.
Purchase orders
Scheduling agreement delivery schedules
Planned orders
Purchase requisitions
Materials planning and control
In this step, you specify for each material master record which quota arrangement rule is
allowed. You group the usage combinations you have chosen under keys. You then store these
keys at plant level in the material master record.
Configuration:
T-code SPRO
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If required create new quota arrangement usages.
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4. Procurement Cycle
Procurement Environment
Requisition
Vendor Purchase
invoice order
? 10
20
7 30
Invoice Verification 2 Source determination
Procurement
6 Goods receipt
3 Vendor selection
Purchase
order
10
10
20
20
30
30
1. Determination of Requirements
The material requirements are identified by the user departments or material
SAP AG
requirement planning.
Requirements will be passed manually to the purchase department.
In case of Material requirement planning system generate the Purchase requisition
automatically against demand or Consumption based planning.
2. Source Determination
Identify the potential source for the supply
This is based on the past orders, existing information, other communication methods
like internet, paper, etc.
3. Vendor Selection
Selection of vendors by comparing the prices, delivery date and credit period of
various quotations.
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Sending the rejection letters for non selected vendors.
4. Purchase order Processing
Create the purchase order for the selected vendors against the purchase order
requisition or manual purchase order.
Purchase order contains required material qty, delivery date, shipping conditions and
price which agreed in negotiation.
5. Purchase order Monitoring
Sending the purchase order to supplier by using of various communications methods
like email, fax, courier, etc.
Sending the reminders to vendors in a pre defined intervals.
6. Goods Receipts
Confirming the receipts of the goods.
Compare the goods receipts quantities with the vendor invoice quantities.
Inform the limit over or under deliveries of order goods.
7. Invoice Verification
Invoices are checked for accuracy of prices and content.
Verifying the quantities against the GR and price against purchase order.
8. Payment Processing
Processing of vendor payment against the vendor invoice.
Purchasing Document
A purchasing document is used for purchasing of materials or services structure of the
purchasing documents.
It is common for all purchasing documents. In earlier versions (i.e before 4.6 c) below three
segments are as three screens.
In latest versions all three screen information is in a single screen with tabular this is called as a
enjoy transactions.( The transaction code ends with N).
Header
Item details
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1. Header data consist of document type, Document number, document date etc.
2. Item overview consist of material number, qty, delivery date , plant , location,
purchase group, price etc.
3. Item Details consist of material group, unit of measure, vendor material number
and account assignment etc.
4. All documents are subject to the release of documents (approval process).
Types of Purchasing Documents
1. Internal purchasing document : Purchase requisition
2. External purchasing documents are Request for Quotation (RFQ), Purchase order,
contracts and schedule agreements.
3. Contracts and schedule agreements are called as outline agreements.
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For items to be supplied by subcontractors, you can specify the necessary input materials or
components that are to be provided to the subcontractor for assembly or processing in respect
of each delivery date stipulated.
It is an internal document: it is not used outside the enterprise.
Requisition Processing
Stock exists
End
T-code OMH7
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Click on insert interval
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Configuration:
T-code SPRO
Example: Below purchase requisition types are used in the real time
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Click on copy all
Continue
Select the document type then double click on allowed item categories
Kept required allowed item categories then delete rest of the item categories. Item category is
nothing but type of procurement.
Overall release: This is one of the pre requisite for configuration of release for purchase
requisition at header level.
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Select un required item categories then click on delete > Enter > all entries
Select allowed item category then double click on link PR. This configuration will be explained in
the RFQ concept.
4.1.3 Define Process Time
Define the plant-specific purchasing department processing time.The processing time is the
time required by the buyer to convert a requisition into a purchase order. The processing time is
taken into account during the scheduling process for externally procured materials within the
framework of materials planning and control.
Configuration:
T-code OMEW
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Maintain processing time against the plant
4.1.4 Define Screen layout at document Level
For all external purchasing documents and purchase requisitions, you can specify the input
attributes of fields by using field selection keys.
A field selection key determines whether a field is:
A mandatory-entry field (input required)
An optional-entry field (input possible)
A display field (field displayed only, input not possible)
Suppressed
Field selection group should be assigned to PR document type. Always recommended to create
one field selection for one PR document type and assign vice versa.
Configuration:
T-code SPRO
For the PR document type contains the field selection group is NBB. It recommended to create
a new field selection group for each document type.
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Rename field selection group as a PR document type > enter
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Go to document type configuration
T-code SPRO
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4.1.6 Set up authorization Check for G/L account
As per the business scenario of service PR or shot text PR user has to enter the G/L account in
the purchase requisition. While entering the g/l system checks whether the user has the posting
authorization for the specified account.
T-code SPRO
While creation of purchase requisition required inputs are document type, material
number, qty, delivery date, plant, storage location, requestor and purchase group.
Account assignment A - asset should be entered in for creation of asset purchase
requisition. Asset number should be entered in the account assignment tab which is
located in the purchase requisition line item level.
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ME53N : Display Purchase Requisition
ME54N : Individual release Purchase Requisition
ME55 : Collective release Purchase Requisition
ME5A: List of Purchase Requisition
ME5K : List of Purchase Requisition by account assignment
MSRV2 : List of Purchase Requisition by service
4.2 Request for Quotation
A request for quotation (RFQ) is an invitation extended to a vendor by a purchasing organization
to submit a quotation (bid) for the supply of materials or performance of services.
An RFQ consists of the RFQ header and the items.
RFQ header
Contains general information on the RFQ, such as the vendor‟s address
Items
Contain the total quantities and delivery dates for the materials or services specified in the RFQ.
QUOTATION
A quotation is an offer by a vendor to a purchasing organization regarding the supply of
materials or performance of services subject to specified conditions.
A quotation is legally binding on the vendor for a certain period. The quotation is the vendor‟s
response to a request for quotation issued by a purchasing organization.
Release procedure can be configured for RFQ at header level of the document.
Tables for external purchasing documents
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Quotation Processing
Request for
Quotation
Maintain Vendor 1
(ME41)
Quotation
Vendor 1
(ME47)
Request for
Purchase Price Create Purchase Order for
Quotation
Requisition Maintain Vendor 2 Comparision Approved approved Vendor
(ME41)
(ME51N) Quotation (ME49) (ME21N)
Vendor 2
(ME47)
Rejected
Request for
Quotation
Maintain Vendor 3 Reject Remaining
(ME41)
Quotation Quotations
Vendor 3
(ME47) (ME49 or ME42)
T-code OMH6
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Click on insert interval
Maintain number object and number range. It is recommended to maintain 10 digit number
range for all external purchasing documents.
4.2.2 Define Document types
The SAP System manages RFQ as documents. You can group RFQ into any number of
document types. Control functions in the document are
Define the item interval
Define allowed item categories
Define link purchase requisition-document type
Field selections
Purposes for creating new document are above control functions and reporting purpose. It
differentiae the various kinds of request for quotations. Number range object should be
assigned in the document type.
Standard Document types are
AB: Request for GP bid
AN: RFQ
Configuration:
T-code SPRO.
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Document type configuration is similar to PR document type configuration.
Configuration of link PR to document type:
Maintain purchase requisition with item category > save. Based on this configuration we can
restrict conversion of PR to RFQ.
T-code SPRO
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Standard field selection is ANA, do the configuration and assignment part is similar
to PR.
4.2.4 Maintain Quotation Comments
In this step, you can define internal comments relating to quotations. This enables you to note in
the detailed data on a quotation the Acton that you have taken against a Quotation.
Configuration:
T-code OMES
If required create new quotation comments > click on new entries > enter code and description.
T-code SPRO
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For definition of new text elements > click on new entries > enter sequence no and text
description name. To avoid confusion and data entry mistake it is recommended to rename the
text elements instead of new creation.
For item text:
T-code SPRO
For definition of new text elements > click on new entries > enter sequence no and text
description name.
4.2.6 Transaction Data of Request for Quotation
Standard Request for Quotation and Quotation Process will be included.
User can generate RFQ with reference to Purchase Requisition, RFQ and any outline
agreement.
RFQ and the Quotation form a single document. Internal number ranges provided by
SAP with 10 digit.
You create an RFQ either manually or by referencing an already existing RFQ,
requisition, or outline purchase agreement.
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You specify which vendors are to receive the RFQ. A separate document is then created
for each addressee.
You enter the prices and conditions set out in the quotation submitted by the vendor into
the RFQ document.
You carry out a comparative appraisal of several vendor quotations by means of the
price comparison list.
The individual quotations are compared item by item. The mean value quotation
represents the average value of the individual quotes.
You can save the most favorable quotation in info record and send rejection letters to
unsuccessful bidders. Sending of rejection letters to supplier is a manual process.
You can monitor the status of follow-on activities relating to the RFQ and quotation (e.g.
a contract is set up or a purchase order issued).
All the Activities are carried out Manually
Follow the transaction in sequence which is specified below
ME41 : Create Request for Quotation
ME42 : Change Request for Quotation
ME43 : Display Request for Quotation
ME9A: Print Request for Quotation
ME47: Maintain Quotation
ME48:Display Quotation
ME49: Price Comparison
Reports
ME4M: Request for Quotation by Material
ME4L: Request for Quotation by vendor
ME4C: Request for Quotation by Material group
ME4N: Request for Quotation by RFQ number
MSRV4: Request for Quotation by Service
ME4B: Request for Quotation by Tracking
ME80AN: General analysis
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Standard
Subcontracting
Consignment
Stock transfer
External service
The total quantity of materials to be delivered or services to be performed that is defined in the
purchase order item can be subdivided in the schedule lines into various partial quantities with
the relevant delivery dates.
For PO items to be supplied by subcontractors, you can specify the necessary input materials or
components that are to be provided to the subcontractor for assembly or processing in respect
of each delivery date stipulated.
An item of the procurement type “external service” contains a set of service specifications.
Outline levels structure the service specifications and service lines determine the quantity
ordered. Value limits are specified instead of service lines for services or work that initially
cannot be specified precisely.
If services covered by an already existing contract are released (ordered, or called off against
the contract), the PO item can contain a value limit relating to the contract in question.
Conditions : Conditions can apply at various levels:
To the entire purchase order
At item level, to the material to be supplied or to the set of service specifications in the
case of services
At service line level for individual services (tasks or activities).
Account Assignment (Open Purchase Orders)
A key indicating whether an item is to be assigned to an auxiliary account (such as a cost
center).The account assignment category determines which account assignment details are
required for the item (for example, cost center or account number).
A Asset
C Sales order
F Order
K Cost center
N Network
P Project
PO History
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The transactions following on from a purchase order are documented in the PO history
on an item-specific basis.
Plant
In the purchase order, each item is destined for a certain plant. Each plant belongs to a
company code, to which the vendor‟s (creditor‟s) invoice is directed.
Texts
You can enter text in a purchase order directly or change texts that are suggested by
the system. There are two kinds of text:
Header texts: apply to the whole document
Item text: apply only to the relevant item
You define which texts appear in which order on printouts in Customizing for
Purchasing. You can enter several header or item texts, which you can identify by your own
codes.
Request for
Quotation
Maintain Vendor 1
(ME41)
Quotation
Vendor 1
(ME47)
Request for
Purchase Price Create Purchase Order for
Quotation
Requisition Maintain Vendor 2 Comparision Approved approved Vendor
(ME41)
(ME51N) Quotation (ME49) (ME21N)
Vendor 2
(ME47)
Rejected
Request for
Quotation
Maintain Vendor 3 Reject Remaining
(ME41)
Quotation Quotations
Vendor 3
(ME47) (ME49 or ME42)
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special procurement types "subcontracting", "third-party" (involving triangular business deals
and direct-to-customer shipments) and "consignment" are possible.
Configuration:
T-code OMH6
Configuration:
T-code SPRO
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Example for real time document type
T-code SPRO
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In the SAP System, the types of variance are represented by the tolerance keys. For each
tolerance key, you can define percentage and value-dependent upper and lower limits per
company code.
Configuration:
T-code SPRO.
The standard SAP System supplied contains the following tolerance keys:
PE Price variance, Purchasing
o Tolerance limit for system message no. 207. This message appears if the
specified effective price exceeds the predefined tolerances when compared with
the material price.
Maximum Cash Discount Deduction:
SE Maximum cash discount deduction, Purchasing
o Tolerance limit for system message no. 231. This is a warning message, which
appears when the specified cash discount percentage exceeds the predefined
tolerances.
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4.3.5 Texts for Purchase order
Define the text elements as per the client requirements; text element is nothing but text heading
in the document. Text element is a cross client object
T-code SPRO
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For definition of new text elements > click on new entries > enter sequence no and text
description name. To avoid confusion and data entry mistake it is recommended to rename the
text elements instead of new creation.
For item text:
T-code SPRO
For definition of new text elements > click on new entries > enter sequence no and text
description name.
4.3.6 Set up authorization Check for G/L account
As per the business scenario of service PR or shot text PR user has to enter the G/L account in
the purchase requisition. While entering the g/l system checks whether the user has the posting
authorization for the specified account.
T-code SPRO
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Detailed terms and conditions will be defined in the system so that it will be automatically
printed in the Purchase order.
Restriction of field selection is different for one document type to another, every
document type has unique field selection group. Restriction of fields will decided based
on the document type.
Changes in the purchase order will be updated in version tab in header of the purchase
order, for Updating of changes in Purchase order it requires version management
activation. Version management will be covered in version management topic in
purchasing.
In condition tab all pricing condition will be appeared based on the vendor selected in the
purchase order, user has to enter required input in conditions. All taxes related
information is available in the invoice tab, if user press F4 on the tax code it will appear
all possible tax classification, user has to select appropriate tax code in the purchase
order. For viewing of tax calculations in the purchase order user has to click on display
taxes tab in invoice tab in the purchase order line item.
Octroi is a special tax in the state of Maharashtra, user has to enter the percentage of
Octroi in the purchase order, and this will be loaded to material cost. While entering of
the tax user has to enter the service tax amount which will be collected by Octroi agent
from company.
All planned delivery cost will be loaded to material cost.
Purchase order number and purchase order line item are mandatory fields in the F-48
transaction for Making of advance payments to vendor against the purchase order.
Purchase against F form and C forms are tracked in sap system, for identification of
Purchases against the F form using tax code.
Generally Price variance for purchasing order is maintained 10 % upper to 10 % lower
Limit.
Generally Max. Cash disc. Deduction for Purchase orders is satisfied 10 % Upper to 5 %
Lower Limit.
Info update check box is checked for all the purchase order except return purchase
orders, functionality is system create the purchase info record automatically and update
the price history in the purchase info record.
It is possible to maintain the vendor retentions in the purchase order header level or item
level.
If we want to post the GR with beyond tolerance limits change the purchase order
delivery tolerance limits in the delivery tab. If delivery tolerances are changed in the
purchase order it will effect vendor rating. if changes are not effected to vendor rating
instead of changing delivery tolerances change purchase order quantity .
Goods Receipts indicator should be check in the purchase order > item details >delivery
tab, if this indicator is not your unable to post the GR against the Purchase order.
Transaction codes
ME21N: Create Purchase order
ME22N: Change Purchase order
ME23N: Display Purchase order
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ME29N: Individual release Purchase order
ME28: Collective release of Purchase order
ME9F: Print Purchase order
Reports
ME2M: List of Purchase order by Material
ME2N: List of Purchase order by PO number
ME2C: List of Purchase order by Material Group
ME2B: List of Purchase order by Tracking Number
MSRV3: List of Purchase order by services
ME2S: Planned Vs Actual Comparison
ME2K: List of Purchase order by Account Assignment
ME80FN: General Analysis
ME81N: Analysis of order values
ME2O: SC Stock at Subcontractor
4.4 Release Procedure
Release Procedure is nothing but approval process. Release procure can be configured for all
purchasing documents. For Purchase requisition Release procedure can be configured at
header level and item level. However it is possible to configure only one level (header level and
item level) for one Purchase requisition. Tables are used for configured release procedure is
CEBAN,
For external purchasing documents release procedure can be configured at header level only.
Tables are used for configured release procedure is CEKKO, CEKPO. Release procedure can
be Configuring for Service entry also.
How do you set üp a release procedure for POs?
To set up the release procedure, you must make a series of settings in Customizing. This
section provides you with an overview of the necessary activities.
You must perform the following steps:
Create characteristics
Define Class and assign Characteristics
Create release group
Create release code
Create release indicator
Create release strategy
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4.4.1 Edit Characteristic
In this step, you create characteristics for a release procedure for purchase orders (POs).
Classification characteristics are the criteria for a release condition. If the criteria of a release
condition are satisfied, the associated release strategy is assigned to the purchasing document
Example
Release condition for release strategy 01
If the total value of a purchase order exceeds Rs10, 000, release strategy 01 is assigned to this
PO.
Configuration:
T-code CT04
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Enter description; data type will be selected based on nature of field.
Number of characteristic = 4 digits
Value assignment: multiple values: while assigning the values for classification in release
strategy system will give you the facility to assign multiple values.
Enter table cekko and field of bsart. Document type is maintained at purchase order at header
level. Purchase order header level data is maintained at ekko table. C for communication
structure.
Enter
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Click on restrictions
T-code CL02
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Enter class and class type > click on create
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This is possible only at the Header level of the Purchase Order or any External Purchasing
document.
Configuration:
T-code SPRO
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Ex: 10: Manager
20: General Manager
30: Vice President
Whether the item may be changed by Whether the document may be changed by
Purchasing or Materials Planning and Control Purchasing after the start of the release
after the start of the release procedure procedure
Whether a new strategy is determined and Whether a new strategy is determined and
whether existing releases must be cancelled in whether existing releases must be cancelled in
the event of changes the event of changes
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Whether an RFQ or a PO may be created with Whether the purchasing document is released
reference to the item for transmission
Release Id will Specifies whether the purchasing document can be processed in or is blocked
for follow-on functions.
Changeability of Purchasing Document During/After Release
Define how the system reacts if an internal or external purchasing document is changed after
the start of the release procedure.
Note that the values 1 to 4 apply to internal purchasing documents (purchase requisitions) and
the values 1 bis6 to external purchasing documents.
1 Cannot be changed
2 Changeable, no new determination of strategy
3 Changeable, new release in case of new strategy
4 Changeable, new release in case of new strat. or val. change
5 Changeable, new release if new strategy/outputted
6 Changeable, new rel. if new strat. or value change/outputted
Changeable, new release in case of new strategy
01 02 03 04
01 - [] [] []
02 [x] - [] []
03 [x] [x] - []
In this release strategy, the codes 01, 02, 03, and 04 must successively release the purchase
order.
Read the table from left to right. For instance, the third line for release code 03: For code 03,
release via code 01 and code 02 is a prerequisite. That is to say, the PO must be released via
codes 01 and 02 before it can be released via code 03.
Release statuses
Here you specify the status a PO has after certain release points have effected release.
Specify which release indicator/status a PO is to have after having been released via a certain
release code.
Classification
In classification, you maintain the values assigned to the characteristics. Via the characteristics
and their values, you specify the POs to which your release strategy is assigned.
Maintain values (individual values or intervals) for your characteristics.
Example
Two characteristics and their values have been maintained in classification for release strategy
'01':
- Document type - 'NB - standard purchase order'
- Total value - above Rs10,000
Release simulation
The release simulation function enables you to check which status a PO will achieve with your
release strategy if release is effected by a certain release point.
Choose "Simulate release" and release the document with the desired release code by double-
clicking. The system shows you which status the PO now has as a result of this release.
Example:
Release procedure will trigger based on the following details.
Maintain release group and enter sequence number or serial number for release strategy.
Enter release codes as per the strategy.
Click on release prerequisites.
Click on
Click on
Click on
Structure
The contract consists of items defining the individual materials, material groups, or services with
prices and in many cases quantities.
An item is assigned to an item category, which defines the type of procurement (e.g. item
category K for consignment, or L for subcontracting).
An item of the procurement type “external service” contains a set of service specifications. Such
specifications may be hierarchically structured. The summary view of such a hierarchical
structure is termed an “outline”, and the individual levels of the hierarchy are referred to as
“outline levels”. Quantities are specified in service lines. Services can be released (ordered, or
called off against the contract) at item level or at the level of the service line.
Costs can be apportioned among various Controlling objects via the account assignment.
Release orders issued against the contract (see below) are logged in the release
documentation.
Contracts can take the following forms:
Quantity contracts
Use this type of contract if the total quantity to be ordered during the validity period of the
contract is known in advance. The contract is regarded as fulfilled when release orders totalling
a given quantity have been issued.
Value contracts
Use this type of contract if the total value of all release orders issued against the contract is not
to exceed a certain predefined value. The contract is regarded as fulfilled when release orders
totaling a given value have been issued
Request for
Quotation
Maintain Vendor 1
(ME41)
Quotation
Vendor 1
(ME47)
Request for
Purchase Price
Quotation Create Contract
Requisition Maintain Vendor 2 Comparision Approved
(ME41) ME31K
(ME51N) Quotation (ME49)
Vendor 2
(ME47)
Rejected
Create Purchase Order for
Request for
approved Vendor
Quotation
Maintain Vendor 3 Reject Remaining (ME21N)
(ME41)
Quotation Quotations
Vendor 3
(ME47) (ME49 or ME42)
T-code OMH6
T-code SPRO.
T-code SPRO
T-code OMH6
T-code SPRO.
T-code SPRO
T-code SPRO.
Save.
4.7.2 Define Condition Type
The condition types are used to represent pricing elements such as prices, discounts,
surcharges, taxes, or delivery costs in the SAP System. These are stored in the system in
condition records.
Conditions for subsequent (end-of-period rebate) settlement can also be used.
For condition types for which you wish to maintain conditions with their own validity period, you
must specify an access sequence. In this way, you stipulate the fields the SAP System is to
check in its search for a valid condition record.
Configuration:
T-code SPRO.
Create condition types if required prefix should be J or Z, all condition types are available in
SAP.
T-code SPRO.
Maintain the procedure as per the requirement. Pricing procedure contain 16 columns.
Statics: it will be activated for condition types which are used for calculation purpose. System
will not consider condition type for accounting document.
Subtotal 9 must be maintained for PB00 and PBXX condition types otherwise system will not
allow to create a purchase order.
4.7.4 Define Schema Group
A Schema Group allows you to group together purchasing organizations that use the same
calculation schema ("pricing procedures".)
You can also use them to group together vendors for whom the same calculation schema is
valid.
For example, you can define one schema group that uses a simple calculation schema with just
a price and a discount, and another that works with a more complex schema containing a large
number of conditions.
T-code SPRO.
Save.
Save.
Double click on
T-code SPRO.
Double click on
T-code SPRO.
T-code SPRO.
Click on generate
Pricing element /
Condition Type Description Value
T-code SPRO.
T-code SPRO.
T-code SPRO.
Configuration:
T-code SPRO.
Maintain document type, table and field name. Version management for PR will be triggered for
given fields.
4.9 Reporting
In this section you able to understand what is scope list and selection parameters. What are the
control functions in the scope list and selection parameters and how we can make it as default
in the transactions and reports.
Configuration:
T-code OLME
T-code OLME
T-code OLME
Configuration:
T-code OLME
Execute
Save.
For maintain of smart form to output type as per the client requirement
Goods Movement
Transaction results in a change in stock.
Types of Goods Movements in Inventory management
Goods receipt
A goods receipt (GR) is a goods movement with which the receipt of goods from a vendor or
from production is posted. A goods receipt leads to an increase in warehouse stock.
Goods issue
A goods issue (GI) is a goods movement with which a material withdrawal or material issue,
a material consumption, or a shipment of goods to a customer is posted. A goods issue
leads to a reduction in warehouse stock.
Stock transfer
A stock transfer is the removal of material from one storage location and its transfer to
another storage location. Stock transfers can occur either within the same plant or between
two plants.
Transfer posting
A transfer posting is a general term for stock transfers and changes in stock type or stock
category of a material. It is irrelevant whether the posting occurs in conjunction with a
physical movement or not. Examples of transfer postings are:
When posting a goods movement in the SAP System, the following documents are
created:
Receipts Issues
Material Accounting
document document
Material document R
When you enter a goods movement in the system, you must enter a movement type
to differentiate between the various goods movements. A movement type is a three-
digit identification key for a goods movement. Movement types consist of 3 digits.
T-code SPRO
Configuration:
T-code OMBT
Select the group > click on object WE> click on select element > click on assign element group
> save.
T-code OMC2
T-code OMJX
As per the requirements select the required fields and do the field selection. This field selection
will be effect only for MIGO.
5.5Field Selection for Movement type
Define the field selection for fields which are not available in the configuration of field selection
for MIGO. Maintain the field selection against movement type wise.
Configuration:
T-code OLMB
T-code SPRO
Configuration:
T-code OMJJ
Continue
T-code OMBS
Features:
Reference to a Purchase Order
If a material is delivered for a purchase order, it is important for all of the departments involved
that the goods receipt entry in the system references this purchase order, for the following
reasons:
Goods receiving can check whether the delivery actually corresponds to the order.
The system can propose data from the purchase order during entry of the goods
receipt (for example, the material ordered, its quantity, and so on). This simplifies
both data entry and checking (over deliveries and under deliveries).
The delivery is marked in the purchase order history. This allows the Purchasing
department to monitor the purchase order history and initiate reminder procedures in
the event of a late delivery.
The vendor invoice is checked against the ordered quantity and the delivered
quantity.
Scope of Functions
You can enter the following types of goods receipts this way:
Initial Entry of Inventory Data
Using this goods movement, you can transfer book inventory balances from an existing system
to the SAP System when you first implement the Inventory Management component.
External Goods Receipts without a Purchase Order
If you are working without the Purchasing component, you enter external receipts as „other‟
goods receipts. You can plan such a movement with a reservation.
T-code OMC0
Configuration:
T-code OMB3
As per the client requirement, activate create storage location automatic functionality.
6.3. Create Purchase order automatically
Define for movement type whether a purchase order is automatically created when a goods
receipt is posted.
When it is, the user can enter a goods movement without entering the purchase order number,
using the Goods receipt for purchase order function. The system valuates the goods receipt at
the price defined in the purchasing info record. This is new concept of automatic Purchase order
creation.
Configuration:
T-code OMB3
T-code OMCJ
T-code OMCD
T-code OMBZ
Configuration:
T-code OMJ5
T-code OMJ5
System checks whether the delivery is the same as the purchase order data, i.e.
whether the goods that we ordered have been delivered.
Based on the configuration for reference documents, it is possible to do the GR , system
picks the data from relevant reference documents . This makes it earlier to enter the
goods receipts and check over deliveries and under deliveries when goods arrive.
Purchase order history is automatically updated as a result of the deliveries.
When you post the Goods receipts, system generates a material document containing
such as the material delivered and the quantity delivered. The system also records the
storage location in which you palace the material into stock in the plant concerned.
Systems generate an accounting document too.
If quality management is activated for the material system generates a quality inspection
lot.
Transfer posting
A transfer posting is a general term for stock transfers and changes in stock type or stock
category of a material. It is irrelevant whether the posting occurs in conjunction with a
physical movement or not. Examples of transfer postings are:
Transfer postings from material to material
Release from quality inspection stock
Transfer of consignment material into company‟s own stock
At goods receipts, it is possible to choose the stock type which you post the goods. it is possible
to withdraw the material for consumption from unrestricted stock type only.
T-code OMB2
T-code OMBW
T-code OMJ1.
Activate negative stock allowed against the Plant > click on storage location
Double click
T-code OMCP
Against the movement type wise maintain the dynamic availability check.
7.5. Transaction Data of Goods issues/Stock Transfer/Transfer Postings
Goods issues will be carried out in MB1A or MIGO transaction.
Stock transfer and transfer postings will be carried out in MB1A or MIGO transaction.
T-code OMJ8
Activate create storage location automatically functionality for required movement types.
T-code OMJA
T-code OMJ5
You can handle both planned goods issues and unplanned goods issues.
You can also use reservations to plan goods receipts and stock transfers (see Planning Goods
Receipts and Planning Stock Transfers and Transfer Postings). This section deals only with
reservations for goods issues.
Information in a Reservation
In a reservation, information is stored that is relevant for the goods issue and for materials
planning, for example:
Which? (Which material?)
How much? (In what quantity?)
When? (For which requirement date?)
From where? (From which plant or warehouse?)
To where? (To which recipient or customer?)
A reservation document consists of a header and at least one item. The header contains
general data about the reservation (creator, movement type, account assignment). The items
describe individual planned movements (material, quantity, requirement date).
Creation of
Reservation
MB21
Change
Reservation
MB22
Display
Reservation
MB23
Reservation List
MB25
T-code OMBN
Click on plant
Mvt- movement allowed: if movement is activate, so that we can perform inventory transactions
against the reservation.
Days movement allowed: validity of the reservation.
Retention: After deletion of the reservation how many days wants to keep the reservation in the
system.
7.14. Set Dynamic Availability Check
You configure the dynamic availability check.
In Inventory Management, two types of availability check are carried out.
availability check during the entry of reservations
availability check during the entry of goods movements
The system checks whether the material to be withdrawn is available and issues a message, if
necessary.
T-code OMB1
T-code OLMB
By using of this configuration we can configure MB51 as per the requirement. It is possible to
add any field in MSEG and MKPF tables. For new addition click on new entries
Press F4
S: selection screen – if activate S- this field will be displayed in the selection screen of the MB51
report.
O: output list – if activate O- this field will be displayed in the output of the MB51 report.
T-code OLMB
As per the requirement activate storage location, based on this configuration we can restrict the
users storage location wise in administration.
T-code OLMB
T-code OMCQ
In the SAP system, a physical inventory can be carried out both for a company‟s own stock and
for special stocks. Inventory for a company‟s stock and for special stocks (such as consignment
stock at customer, external consignment stock from vendor, or returnable packaging) must be
taken separately (in different physical inventory documents).
Note that the blocked stock returns and the stock in transfer cannot be inventoried. If these
stocks are still to be counted in a physical inventory, you must transfer post these stocks to
other stocks capable of inclusion in a physical inventory. ABC analysis will be maintained in the
material master.
The stock in a warehouse can be divided into 3 stock types. In the standard system, a physical
inventory can be carried out for the following stock types:
If batch status management is active, the first stock type covers both unrestricted-use stock and
restricted-use stock.
Inventory of all stock types mentioned can be taken in a single transaction. For the materials to
be inventoried, one item is created in the physical inventory document for every stock type.
T-code OMBT
T-code OMJU.
Based on this configuration we can maintain field selection for reason field in MI07 transaction.
8.3. Default Values for Physical Inventory
The Presetting for entering physical inventory documents
The stock type(unrestricted-use, in quality inspection, blocked)
the indicator for batch determination (in the foreground or in the background)
the unit of entry (stock keeping unit or unit of issue)
T-code OMBH
T-code OLMB
T-code OMCN.
It is possible to maintain the batch input defaults in the transactions as per the user requirement.
T-code OMBP
T-code OMCO
Account Category
Reference
Company Code
Movement Type
Chart of Accounts
Valuation String
Transaction event
Keys
T-code OMWM.
Configuration:
T-code OMWD
T-code OMSK.
Assign ACR to required material type, it is not possible to assign multiple ACR to one
material type.
Valuation class has the following functions:
Allows the stock values of materials of the same material type to be posted to
different G/L accounts.
Allows the stock values of materials of different material types to be posted to the
same G/L account.
Determines together with other factors the G/L accounts updated for a valuation-relevant
transaction (such as a goods movement.
T-code OMWN
It is possible to change the account modifiers for the GBB,KON and PRD transaction event keys
for required movement types. However it is not recommendable to change the standard
settings. In this configuration account determination logic is pre defined by SAP based on
movement type wise.
9. 1.5 Configure Automatic Postings
System settings for Inventory Management and Invoice Verification transactions for automatic
postings to G/L accounts are entered. The list of transactions in Materials Management and
their definitions are given here.
T-code OMWB.
Click on cancel
Continue
T-code OLMW
T-code OLMW
T-code OLMW
T-code OMWO
T-code OMWC
Click on create
Enter valuation category , if required maintain default valuation type external and internal
procurement types>save>create.
1.Invoice verification
2.Credit Memo
3.Subsequent debit
4. Subsequent credit
5. Invoice reduction
Above functionalities are supported with Purchase order, delivery note, bill of lading, service
entry sheet.
1. Credit memo: The term credit memo always refers to a credit memo from the vendor.
Therefore, posting a credit memo always leads to a debit posting on the vendor account.
As in the case of invoices, credit memos refer to purchase orders or goods receipts. They
are used to correct the purchase order history if the quantity invoiced was too high, for
example, if an invoice was too high or if part of the quantity was returned.
When you post a credit memo, the total quantity in the purchase order history is reduced by
the credit memo quantity.
When an invoice is blocked, Financial Accounting cannot pay the invoice. Invoices
can be blocked either automatically or manually for automatic block of invoice
prerequisite is configure the tolerance limits of different variances like price variance,
qty variance, quality variance etc .
You can block an invoice manually, You can block an invoice by entering an R in the
field Payment block in the document header data
It is possible to round off the invoice value in invoice verification but user has to enter value
manually , round off amount will be add to round off g/l account .
AS of now customs duties and material qty is not copied from the purchase order in to
invoice verification. while doing the invoice verification user has to select the indicator
goods / services item for all vendor invoice other than freight , for freight select indicator for
planned delivery cost & select the indicator goods / service items + planned delivery cost for
both.
An invoice is said to contain variances if a quantity or value in at least one item is invoiced at
a different value to the value that the system proposes.
Delivered: 50 pieces
Delivered: 60 pieces
T-code OMR4.
T-code OMRJ
Save.
Transaction –Assign number range
RD Post invoice
RS Cancel/reverse invoice,
T-code OLMR
If the tax reduction is carried out in the complaint document, the taxes in the original
document correspond to those in the vendor invoice. The tax amount for the invoice
reduction is credited in the complaint document.
If the tax reduction is carried out in the original document, the taxes in the original document are
reduced by the tax amount for the invoice reduction. In this case, the complaint document does
not contain any tax postings. This procedure is particularly recommended if you have the
system calculate the taxes automatically.
T-code OLMR
T-code OLMR
It is recommended to maintain space against the company code for unplanned delivery cost.
10.6 Activate Direct Postings to G/L Accounts and Materials
You configure whether you can make postings to G/L accounts and material accounts during
invoice entry and document parking. This functionality is required while posting of freight invoice
in import purchases and other special cases.
Configuration:
T-code OLMR
As per the client requirement, activate G/L tab and material tab in the MIRO. With help of these
two tab it is possible to post the entry directly.
T-code OLMR
T-code OMR9
T-code OMR6
Maintain above tolerance keys against company code wise as per the requirement. if not
required also maintain all tolerance keys against the company code wise with don‟t check
activate. Otherwise system is not allowed to post the invoice.
10.10 Activate Stochastic Block
You control in which company codes the stochastic block is active.
Configuration:
T-code OLMR
3000 60 %
5000 60 %
1500 30 % (= 60 * 1500/3000)
100 2 % (= 60 * 100/3000)
Configuration:
T-code OLMR
T-code OMRM
In addition to their own workforce, many firms now employ external service providers to do work
of various kinds. This may be due to a number of reasons: for example, their own staff may lack
either the capacity or the qualifications to perform certain tasks.
This section describes the business processes available within the application component MM
External Services Management for the efficient procurement of externally performed services:
You can specify yourself the cases in which the basic process with all steps is to be used and
the cases in which it makes sense to omit certain steps in order to save time.
You can assign the service master records administered in your company to different groups,
according to their usage. Such a group is described by the service category.
T-code OMV2.
T-code OMV1.
T-code ACNR.
T-code OMH9.
T-code OLMSRV
T-code OLMSRV
Service masters shall be maintained for various Services with Description, Category
and Unit of Measure using the „Master Data Maintenance.
Number Ranges for service master will be internal as defined by the standard SAP with
8 digits.
Service purchase requisitions will be raised by the user departments with document type
FO, user has to enter the account assignment K (cost center), F (Order) etc and item
category D (services).
Enter service numbers in the service tab which is located in purchase requisition line
item level. Service numbers will be created for each service activity. If service master is
not maintained write the short text in the material description.
Service purchase order will be raised to the approved service vendor against to the
service purchase requisition. User has to select the propionate tax code for service tax.
Post service entry sheet instead of Goods receipt against the service purchase order.
Service entry sheet is nothing but confirmation of service against the service purchase
order. System generates the material document with 101 movement type and
accounting document to.
Invoice verification against the service entry sheet.
Process Flow
Chart:
Create
Create Release Create Maintain
Price Service
Purchase Purchase Request for Quotation
Comparison Approed Purchase
Requisition Requisition quotation W.r t RFQ
ME49 order
ME51N ME54N / ME55 ME41 ME47
ME21N
Rejected
Reject Quotations
ME42
Release
Printout of
Service Release Block Invoice if
Service Service entry Invoice
Purchase invoice was blocked for
Purchase sheet verification
order payment
order ML81N MIRO
ME29N / MRBR
ME9F
ME28
1. Consignment
2. Subcontracting
3. Returnable transport packaging
4. Pipeline handling
5. Third-party processing
6. Stock transfer using stock transport order
12.1 Consignment
In consignment processing, the vendor provides materials and stores them on your premises. The
vendor remains the legal owner of the material until you withdraw materials from the consignment
stores. Only then does the vendor require payment. The invoice is due at set periods of time, for
example, monthly. In addition, you can also arrange with the vendor that you take over ownership
of the remaining consignment material after a certain period of time.
Process Steps
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.
2. Procurement
You can procure consignment material via purchase requisitions, purchase orders and outline
agreements for consignment material.
You enter purchase requisitions for consignment materials in exactly the same way as for other
materials. You accept the order category (such as NB) that the system proposes as a default and
enter the item category K (for consignment).
The procedure for creating consignment orders is the same as for standard purchase orders or
outline agreements. However, you must note the following:
Enter the item category K for the consignment item. To ensure that the goods receipt is
posted to the consignment stores and an invoice receipt cannot be generated for the item.
Do not enter a net price.
3. Goods Receipts
Unrestricted-use stock
Quality inspection stock
Blocked stock
System generates the material document as a proof of inventory transaction with movement type
101 K- for unrestricted stock, 103k-blocked stock. Accounting document will not be generated.
System generates the material document as a proof of inventory transaction with movement type
501 K- for unrestricted stock, 503k-Quality stock and 505K –Blocked stock. Accounting document
will not be generated.
After a goods receipt for consignment material has been posted, the consignment stock of the
material increases in the given storage location. The consignment stock is available for MRP.
However, the material's valuated stock does not increase since the consignment stock still belongs
to the vendor.
4. Display Stock
You can view stock of the material in MMBE and MB54 Transactions. System is updated under
consignment vendor.
5. Goods issue
You can only post a goods issue from consignment stock to consumption if the material belongs to
unrestricted-use stock. If the consignment material is in quality inspection or blocked stock, you
must first transfer it to the unrestricted-use stock.
Goods issue will be done in MB1A with corresponding GI movement type with special stock K.
System generates the material document as a proof of inventory transaction. Accounting document
will not be generated.
It is possible to transfer consignment material within a plant from one storage location to another,
You posted the consignment material to the quality inspection stock or blocked stock; you must
transfer it to the unrestricted-use stock before it can be withdrawn.
Supposing you agreed with the vendor that after six months you will take over ownership of the
remaining consignment stock. To do this, carry out the following goods movement:
Use the required movement types (411 and 412) with special stock K.
Removing material from consignment stores or transferring material to your company‟s own stock
results in liabilities towards the vendor. You should settle these liabilities at regular intervals.
Consignment materials are settled without the vendor issuing an invoice, as the vendor company is
unable to track withdrawals directly. The vendor can only manage its consignment stock by taking
deliveries and payments into account.
Accounting document:
Vendor account
Consignment clearing
You order the end product using a subcontract order. The components that the vendor
needs to manufacture the end product are specified in the purchase order.
In Inventory Management, the components are posted to the stock of material provided to
vendor. The components are then supplied to the vendor.
The vendor performs its service and delivers the ordered material (the end product). The
consumption of the components is posted.
If, after the goods receipt has been posted, the vendor informs you that a larger or smaller
quantity of the components was actually consumed than planned in the purchase order,
you must make an adjustment.
The vendor charges for his or her service. The invoice is posted in Invoice Verification.
The quantities of the components to be provided to the vendor are entered into the stock of
material to be provided to vendor. This stock has the following features:
It is managed as part of your total valuated stock, and is available for MRP.
It is only managed at plant level, since it is not stored at your own company but on the
vendor's site.
Two stock types are possible:
unrestricted-use stock
quality inspection stock
Stock can be transferred between the two stock types. Withdrawals can only be posted
from unrestricted stock, however.
You can take a physical inventory of the stock of material to be provided to vendor.
Process Flow
If material is excisable material maintain excise master data in J1ID. For the components in
the subcontracting order , maintain material and chapter id combination , in that check
subcontracting check box as well a maintain excise assessable value for the same material
. Assessable value is required for print out of subcontracting challan.
Maintain excise master data > material and chapter id combination and CENVAT
determination for the incoming material in the subcontracting purchase order.
Create purchase requisition with item category L (L: sub contracting) and maintain the same
component in the subcontracting PR. Purchase requisition can be generated in two ways.
Create Sub
Create Release Create Maintain
Price Contracting
Purchase Purchase Request for Quotation
Comparison Approed Purchase
Requisition Requisition quotation W.r t RFQ
ME49 order
ME51N ME54N / ME55 ME41 ME47
ME21N
Rejected
Reject Quotations
ME42
Approed
Transfer Transfer
Release Block Invoice if quality stock quality stock
Invoice Reconciliation
invoice was blocked for To Return
verification Quantity
payment Unrestricted delivery
MIRO J1IF13
MRBR stock QA32
QA32
Quotations of
Bidders
Compare Prepare Purchase ME49 (Overall
statement
Create PO Create PO with Purchase ME21N
respect to requisition Department
Release PO Signing of ME28/ME29N
Purchase Order
Returnable transport packaging from a vendor that is stored at a location on your premises is
managed as special stock and clearly assigned as belonging to the vendor. It is the property of the
vendor and is therefore not included in the customer‟s valuated stock.
Transport equipment icon new line item will be add in the GR. Enter RTP
material number , qty received (cylinders) , plant and storage location.
System generates the material document and accounting document for procured material
only. Movement type for procured material is 101 and RTP material is 501 M. stock of two
A material from the pipeline is always available; i.e. it can be withdrawn from the pipeline at any
time and in any quantity.
Depending on the system configuration, a material can be withdrawn only from the pipeline or, in
addition to the pipeline, normal stocks of the material can also be managed.
Prerequisites:
1. Create Material
Pipeline handling is mandatory for materials with material type PIPE; i.e. only withdrawals
from the pipeline can be posted for these materials. These materials have the following
characteristics:
They are neither procured nor planned. They can be withdrawn from the pipeline at
any time and in any quantity.
They are not stored or kept in stock. No physical inventory is taken.
Pipeline movements are mandatory in all valuation areas; i.e. no other goods
movements may be posted.
For each material type, you can specify in the valuation area whether pipeline movements
are:
If pipeline movements are not mandatory but allowed, the material can be kept in stock and
both pipeline and other movements can be posted.
A material of this type can be withdrawn from your company‟s own stock, from consignment
stock, or from the pipeline
You determine the price of a pipeline material from a vendor in a pipeline info record. You can only
post pipeline movements after you have created the pipeline info record. Tax code is required as well
as price should be maintained in the scale process.
4. Goods Issues
You can enter a pipeline withdrawal for an order or for a cost center. Pipeline withdrawals differ
from other goods movements in that they are entered with the special stock indicator P. The
withdrawal is valuated at the price defined in the pipeline info record. Transaction code is
MB1A.System generates the material document as well as accounting document.
If pipeline liabilities are to be posted to the same account as consignment liabilities, you have to
settle consignment and pipeline liabilities together.
If pipeline liabilities and consignment liabilities are to be posted to different accounts, you settle
them separately.
Pipeline settlement is not connected to the purchasing information system, because the purchase
order history is not updated during consignment settlements.
Example:
YSER Services
Configure automatic postings in OBYC transaction under the transaction event key GBB> account
modifier VBR. Assign the G/L accounts against the valuation class wise.
Assign valuation class against the material group wise. so that when ever material group is entered
in the purchasing documents system picks the G/L account which is assigned for the valuation
under VBR account modifier.
Configuration:
T-code SPRO
In case of service Mater assign account category reference to service category in the service
category configuration.
Configuration:
T-code SPRO
Configuration:
T-code SPRO
Configuration:
T-code SPRO
Configuration:
T-code SPRO
In the SAP System, Vendor Evaluation is completely integrated into the MM Purchasing
component within Materials Management. This means that information such as delivery dates,
prices, and quantities can be taken from purchase orders.
Vendor Evaluation also uses data from the Quality Management component, such as the results of
incoming inspections or quality audits.
Vendor Evaluation accesses basic Materials Management data, Inventory Management data (such
as goods receipts), and data from the Logistics Information System (LIS).
Procurement of Materials
The Vendor Evaluation component helps you select sources of supply and facilitates the continual
monitoring of existing supply relationships. It provides you with accurate information on prices, and
terms of payment and delivery. By evaluating vendors, you can improve your enterprise‟s
competitiveness.
On the basis of detailed information, and in collaboration with the relevant vendors, you can quickly
identify and resolve any procurement problems that may crop up from time to time.
Procurement of Services
You can check the reliability of vendors from whom you procure services on a plant by plant /
purchase organization basis. You can determine whether the vendors perform the services within
the specified timeframes and appraise the quality of the work carried out.
The standard SAP System offers you a scoring range from 1 to 100 points, which is used to
measure the performance of your vendors on the basis of five main criteria.
You can determine and compare the performance of your vendors by reference to their overall
scores.
Price
Quality
These four main criteria serve as a basis for evaluating vendors from whom you procure materials.
This main criterion serves as a basis for evaluating those vendors you employ as external service
providers.
The Vendor Evaluation System ensures that evaluation of vendors is objective, since all vendors
are assessed according to uniform criteria and the scores are computed automatically.
To create a detailed evaluation, each main criterion can be divided into several sub criteria.
The standard system provides you with certain sub criteria which suffice as a basis for evaluation.
You can also define your own additional sub criteria.
The scores for the sub criteria are calculated in different ways.
Scoring Methods
Analyses
The results of vendor evaluation are displayed in the form of analyses. For example, you can
generate ranking lists of the best vendors according to their overall scores or ranking lists for
specific materials. Changes to evaluations are recorded in logs, and you have the option of printing
out evaluation sheets.
Generally weighing key 01: % per for calculation of each criteria is same, if it is varies it will be
weighing key 02.
Configuration:
T-code OMGC.
Price
o Price level
o Price history
Quality
o GR lots
o Complaints level
o Quality audit
Delivery
o On-time delivery performance
o Quantity reliability
o Compliance with shipping instructions
General service/support
Configuration:
T-code OMGI.
In the standard system, the scope-of-list parameters 'standard' and 'version 1' are supplied as an
example:
The parameter Standard provides the user with a ranking list of vendors by overall
score. The main criteria are arranged in the order "Price", "Quality", "Delivery", "General
service/support " and "Externally performed service/work".
The parameter Version 1 yields a ranking list of vendors sorted according to the score
for the main criterion "Price". Then follow the overall evaluation and the main criteria
"General service/support", "Quality", "Delivery", and "Externally performed
service/work".
Configuration:
T-code OMGU.
On the detail screen for the purchasing organization, the following parameters are defined:
General parameters
Price level
Complaints level
Quality audit
Copy maintain purchase org data from sap standard to your purchase org.
Maintain criteria as per the requirement then delete rest of the criteria‟s.
Select the purchase org then click on weighting , maintain weighing score here against the
weighing key . For exam
Quality 70 7
Delivery 20 2
Price 10 1
Maintain weighting against the weighing and criteria wise in single digit
Based on the criteria wise maintain points score for automatic criteria against to the sub criteria
wise.
Configuration:
T-code SPRO.
Return
Release Print Create Goods Quality Transfer
Post Excise Quality Stock delivery to
Purchase Purchase Receipt and Capture Inspection
Invoice Rejected to Blocked vendor
Order Order Excise invoice of received stock
(J1IEX) Stock (MBRL/
(ME29N) (ME9F) (MIGO) (QA32) (QA32)
MIGO)
Accepted
Capture
Transfer Quality Excise
Invoice verification for customs
Stock to invoice with
MIRO
Unrestricted use respect to
(QA32) Return
delivery
document
(MIGO/J1IS)
Logistics Invoice
Verification
(MIRO) Post Excise
Invoice
(J1IS)
Quotations of
Bidders
Compare Prepare Purchase ME49 (Overall
statement
Create Contract Create quantity Purchase ME31K
contract
Change / Display Change / display Purchase ME32K / ME33K
Contract Contract
Create PO Create PO with Purchase ME21N
respect to purchase Department
requisition
using release
codes by
approving
authority
Gate entry gate pass will be Security LECI
generates with details
of consignment
Invoice verification Logistics invoice Finance MIRO
for Customs verification for bill of Department
lading
Create Goods Goods receipt is Stores MIGO/MB01
Receipt prepared at Store on
the basis of physical
verification. give the
reference of customs
invoice verification
Capture Excise If the material is store MIGO/J1IEX_C
invoice excisable then
capture the Part1
entries while
receiving the goods
Print out of Print out of material Store MB90
CIN
Configuration Guide
CONTENTS
0. CIN Overview .....................................................................................................................293
1.12. ACTIVATE CONTRY INDIA VERSION FOR SPECIFIC FISCAL YEARS ................................327
2.2 ASSIGN USERS TO MATERIAL MASTER SCREEN SEQUENCE FOR EXCISE DUTY: ..........335
5. SUBCONTRACTING ...........................................................................................................360
6. UTILIZATION .....................................................................................................................362
8. TOOLS ..............................................................................................................................367
0. CIN Overview
A claim for refund of the deductible portion of input tax can be submitted to the tax authorities
OUTPUT TAX -Tax levied on customers at all levels of production and trade.
SERVICE TAX - Tax levied on the customer on services specified by the Government.
DEPOT - Depot is a plant where the material is stored and sold. There is no manufacturing activity
at the depot. The depots when registered with the excise authorities can pass on the Modvat
benefits to the customer.
EXCISE DUTY (BED) - A quantity-based tax which must be paid when a dutiable material is
moved from a duty-free (bonded) location to a duty-paid (unbounded) location or the customer.
Also known as excise tax. The excise duty is based on the quantity / Value of material moved.
AED – Additional Excise duty is a duty which is calculated over and above the Excise Duty payable
on the material.
SED – Special Excise Duty is an additional duty levied on certain materials depending on the
characteristics of the material. The statute specifies these materials.
CHAPTER ID –All materials that are required for manufacturing and subsequently those which are
manufactured, are classified under the Central Excise Law into chapters. These chapters are
further subdivided into headings and subheadings, which together form the chapter ID. Chapter ID
7216.10 is an example.
CVD – Countervailing duty is a levy charged on the imports of materials in lieu of excise duty.
CENVAT – Central Value Added Tax. The tax is levied on the difference between the output and
the input value. This is also referred as MODVAT.
CESS – Cess is a tax imposed for a specific purpose under different acts with reference to certain
goods. Cess is levied at the time of removal of goods from the factory.
ASSESSABLE VALUE - Denotes the value of goods that you have manufactured in-house at the
price as assessed by an authorized auditor.
INTERSTATE TRANSACTIONS - A transaction where the goods / material are traded between
two different states.
CONCESSIONAL TAX FORMS – The Government announces tax concessions in excise and
taxes on sales and purchase. This can be availed by submitting the forms prescribed by the
Government. E.g „C‟ form , AR4 , CT3.
TDS - Tax deducted at source ( Withholding tax) is a form of indirect taxation deducted at the
beginning of the payment flow. Generally, an amount is withheld and paid over or reported to the
tax authorities on behalf of (as opposed to by) the person subject to tax, the exception being self-
withholding tax.
REGISTERS – The registers are the books prescribed having specific format under the statute e.g
RG23A,RG23D.
RETURNS – The prescribed forms having a specified format under the statute e.g. RT12, RG1,
ANNUAL RETURN FOR TDS.
Service Tax
This is a tax that is levied on the services rendered. It is applied on the total price of the service. In
addition to the standard Implementation Guide (IMG) settings for taxes on service tax, you must
also have maintained the tax registration numbers of your vendors, customers and your own
plants.
Tip:If there are multiple tax registration numbers, you should have separate account postings to
different General Ledger Accounts based on service registration number. You can do this provided
you have maintained a separate tax code for each service registration number. To do this, for
every service registration number, you should define separate General Ledger Accounts for service
tax and education cess on service tax.
The interim General Ledger Account contains the total service tax that you have to receive.
The final General Ledger Account contains only the actual amount that you have received.
You can take credit for only the amount in the final General Ledger Account.
Service tax can be used to set off excise duty paid by you. Additional duty of customs
cannot be used to set off the service tax paid by you.
Example
Total amount to be received by you is INR 11,224. The system updates the interim General Ledger
Account with this amount.
Now, assume that the customer makes a part payment, out of which INR 500 is against service
tax. You have to manually update the final General Ledger Account with this amount.
You can offset only INR 500 against the payables in that month.
Sales Tax
This is a tax levied on the sale of a product. It is applied on the gross price of goods, inclusive of
excise duty.
In addition to the standard Implementation Guide (IMG) settings for taxes on sales and purchases,
you must also have maintained the tax registration numbers of your vendors, customers, and your
own plants.
Furthermore, if the state legislation allows you to offset input local sales tax (LST) against output
LST, you must also have defined this.
A percentage of input LST can be deducted against output LST, depending on what percentage of
goods you have purchased in the state in question.
The system calculates the sales taxes automatically, when you enter the tax codes. A report is also
available that tells you how much sales tax you have paid and collected.
You use this report to see how much tax has been accumulated under the various tax codes and
tax jurisdiction codes for a combination of conditions.
You can also report how much input sales tax has been set off against the outputs. This report also
can serve as the basis of determining your local sales volume and central sales volume.
In India, VAT has been levied in certain states from April 1, 2005. VAT is levied instead of the Local
Sales Tax (LST). VAT also replaces other taxes such as, turnover tax, surcharge, additional
surcharge.
The essence of VAT is that you can set off the input tax against the tax paid earlier. VAT is based
on the value addition to the goods, and your VAT liability is calculated by deducting input tax credit
from tax collected on sales during the payment period (say, a month).
Excise Registers
The excise authorities require you to maintain a number of registers relating to excise duty. They
have to be printed out monthly and shown to the authorities in the event of an audit. The SAP
system makes all the entries for these registers automatically, and you can prepare copies of them
as and when necessary
The SAP system handles the following excise registers:
Register RG 1
An accounting document that the system automatically creates when it generates a Part II entry.
Register RG 23D
A record of receipts and issues of excisable materials, as kept by depots.
In procurement, when the warehouseman posts a goods receipt, the system creates a register
entry. In sales, when a sales clerk creates a sales order, he has to specify which excise invoices
were delivered with the goods that are being sold. Then, when the warehouseman posts the goods
issue, the system generates another register entry.
A document, in India, that accompanies exports and deemed exports. The documents ensure that
you do not have to pay excise duty on these transactions.
Excise Bond
A document, in India, that effectively licenses a manufacturing plant to remove goods from its
premises without paying basic excise duty, on condition that the goods are then exported.
An excise bond covers a fixed amount of excise duty. The excise duty of the goods exported under
bond cannot exceed the bond value.
A license issued by the excise authorities under which an exporter can procure goods from a
manufacturer without payment of basic excise duty.
The license is not a blanket exemption. It only applies to purchases of specific quantity or value of
specific goods from a specific vendor, for example, 20 personal computers from Computer World
Pvt. Ltd.
Exemption Forms
Some customers may be liable to excise duty at reduced rates or exempt from it altogether (for
example, customers abroad). Such businesses must provide you with a copy of their exemption
forms in order to claim their exemption.
If you make a sale to a customer that is in possession of an exemption form, you have to record
the form number in the sales order. The system then automatically applies the appropriate rate of
excise duty.
When you create the sales order, enter the form, using the customer tax classification fields. Based
on the customer tax classification status, you can use different excise rates for a sale transaction.
Any sales that you make to export-oriented units (EOUs) require special treatment by the SAP
System. You have maintained a zero-rate excise duty indicator for customers that qualify as 100%
EOUs.
When you come to create the excise invoice, the excise value is zero in the pro forma excise
invoice document. No excise duty is debited to the CENVAT account, and so no accounting entries
are generated. However, the sale is marked as a deemed export, and the system generates an
outgoing excise invoice.
Even though the excise duty is zero, when you print the excise invoice, the system calculates the
duty for the purposes of printing.
When you create an excise invoice, the system allows you to display the information about the
excise duty, including which CENVAT accounts the excise will be debited to. If a company defaults
in the fortnightly payment of CENVAT, the excise collectorate can enforce an immediate payment
of excise. Alternatively, you may have excess CENVAT credit and want to pay the duty
immediately and not wait for a fortnight. This is also the case for some export removals where you
claim the refund from DGFTA, in which case you need to pay the duty immediately.
You may first ship them to a separate location for storage (a depot), from where you will sell them.
Excise duty is payable when you send the goods from the factory to the depot, but it is not levied
again when you sell the goods.
Sometimes when you make a final sale of goods from a depot, price escalations could have
happened with retrospective effect. In such scenarios you need to pay the extra excise duty at the
factory using an A Certificate. You need to register the A certificate details in the RG 23D register
and the excise recovered from the customer
One of the ways of exporting goods without paying basic excise duty is to obtain an excise bond
from the excise authorities and then fill out an ARE-1 document to go with every export.
Excise Bond
A document that effectively licenses a manufacturing plant to remove goods from its premises
without paying basic excise duty, on condition that the goods are then exported.
An excise bond covers a fixed amount of excise duty. The excise duty of the goods exported under
bond cannot exceed the bond value.
In the system, the term "excise bond" also covers letters of undertaking, and all of the excise bond
functions apply equally to letters of undertaking, unless stated otherwise.
When you obtain a bond from the excise department, enter it in the system. The system numbers
each bond automatically.
If you have not obtained an excise bond, you must pay any excise duty liable when removing
goods from your premises for export. However, you can claim a rebate for the excise duty once
you have completed the export if you fill out an ARE-1 to go with the export.
Deemed Exports
You can ship deemed exports to any customers in possession of a deemed export license without
paying any basic excise duty, but only if the goods are accompanied by an ARE-3 document.
Notes
Capital Goods
Businesses are allowed to set off excise duty on purchases of capital goods against excise duty on
outputs. However, unlike with raw materials, you can only set off half of the duty in the first year,
and the rest in any year after that
In most cases, the system does not generate an RG 1 entry at runtime. It generates any missing
entries when you execute the Register Update program (see below).
Register RG 23A/23C
Part I Entries
When you enter a goods receipt for excisable materials, the system automatically asks you if you
want to create the Part I entry in Register RG 23A or RG 23C. If so, the system generates a Part I
entry. If not, it does not, but you can generate all missing Part I entries later.
The system automatically enters the excise invoice number in the Part I entry. If the excise clerk
has already captured the excise invoice when the warehouseman enters the goods receipt, the
system enters the excise invoice number in the Part I entry immediately. If the warehouseman
enters the goods receipt before the excise clerk enters the excise invoice, the Part I entry does not
contain a link to the excise invoice number. However, the system updates the excise invoice
number automatically when the excise clerk captures the excise invoice later on.
The system does not automatically generate Part I entries for goods issues of excisable materials,
with two exceptions:
The system only creates a Part II entry when you post an incoming excise invoice. It does not
create one if you only capture an excise invoice. That way, you can ensure that excise clerks can
capture excise invoices but cannot make any Part II entries. The excise supervisors can then
check and post the excise invoices posted by the clerks.
When the system generates a Part II entry for an incoming excise invoice, it creates a CENVAT
document to debit the excise duty to the excise duty account, and credit it to the CENVAT clearing
account:
When the system generates a Part II entry for an outgoing excise invoice, it creates a CENVAT
document to debit the excise duty to the excise duty account, and credit it to the CENVAT
suspense account:
Part II Entries
Whenever you – as a manufacturing plant – post an incoming excise invoice, or create an outgoing
excise invoice, the system automatically creates an entry in Part II of the appropriate register (RG
23A or RG 23C).
The system assigns all Part II entries a serial number, and creates an accounting document for
each, to transfer the various types of excise duty to the appropriate CENVAT account.
Similarly, the system also creates a Part II entry when you post an outgoing excise invoice
The system creates RG 23D entries for all receipts of excisable materials, and when you enter a
goods issue, you specify which RG 23D entries the goods came from originally.
When you enter a goods receipt for excisable materials, the system generates a Part I
entry in Register 23D.The system creates one entry for each goods receipt, each of which
is numbered with a serial number. Each entry contains a separate line item for each
material in the goods receipt, and each line item has its own folio number.
Example
A purchasing clerk places an order with a vendor. When the warehouseman enters the goods
receipt, the system generates the appropriate RG 23D entry automatically, as follows:
The RG 23D entry contains a separate line item for each material in the goods receipt, and each
line item has its own folio number.
Later that day, a second lot of goods is delivered. Again, the warehouseman enters the goods
receipt in the system, and the system creates the RG 23D entry automatically.
This is the second RG 23D entry, so the serial number is 0002. The folio numbers start at the next
available number, in the example, 004.
Later on, a sales clerk enters a sales order. When the excise clerk selects the RG 23D entries to
go with the goods issue, the system generates the following RG 23D entry:
Excise details
This shows you the excise invoice type, which you can change if necessary by choosing
. It also shows you how much excise duty will be charged on the sale.
Balance utilization
This shows you which CENVAT accounts the excise duty will be debited to.
The system automatically proposes which CENVAT accounts it is to debit the excise duty
to. It first takes the RG 23 accounts, and if there is not enough credit to cover it, it debits the
remainder to the personal ledger account (PLA). The cess component of excise can only
be taken from the PLA.
If immediate utilization is active for a series group, you can change the default utilization proposal.
You can decide from which register to pay the amount. When you save the invoice, the system
generates Part II entries in the appropriate registers. These excise invoices are not listed further
during fortnightly payment of CENVAT.
If immediate utilization is off for the series group, the system proposes the excise duty values
directly in the RG 23A fields, but the postings are made to intermediate accounts for excise duty.
The system does not create any Part II entries. Entries are posted into a dispatch register. When
you then run the fortnightly payment program, the system picks up these invoices and allows
payment of CENVAT.
Excise registration number will configure in SAP system as per the requirement.
Excise Registration: A tax number assigned, in India, by the Department of Revenue to legal and
natural persons liable to excise duty.
The taxpayer is required to obtain a separate ECC number for each registered premises (for
example, factory, warehouse, or dealer's premises).
Configuration:
T-code SPRO.
Partial Credit: When you post a goods receipt, the system splits the input excise duty on the
material into its deductible and nondeductible amounts. It posts the deductible duty to the
appropriate CENVAT account, and adds the nondeductible duty to the material value.
Liable to AT1: AT1 means secondary education cess. This needs to be active.
Company Code 1000 is to be configured for Excise with the Fiscal Year Variant starting from April and
ending in March of the subsequent Calendar year.
Capital Goods Credit can be availed of immediately. Exchange Rate is to be configured from the Standard
Type “M”.
Configuration:
T-code SPRO.
Debit Acc Override: while posting excise JV in J1IH transaction it is possible to change the Debit
account as per the requirement.
Auto adjust Indicator: while posting excise JV in J1IH (other adjustment) if balances are not
available then system post the entry in to the PLA (personal ledger account) account.
Immediate credit on capital goods: while posting the incoming excise invoice for the RG23C
register system will post entry in “on hold account” with 50 % excise invoice value.
Excise invoice selection parameters: based on these settings excise invoice will be displayed in the
J1IS transaction for the selection purpose.
Rounding duty on removal: Rounds off the excise duty be paid when you create an outgoing excise
invoice.
CVD account: CVD clearining needs to maintain this G/L account will be trigger while posting the
incoming excise invoice in case of imports.
Configuration:
T-code SPRO.
Against the Plant if check Depot it means that this plant is depot.
Excise Group: A unit within an excise registration, in India, which keeps its own set of excise
records. Whereas the excise registration reports to the excise authorities, the excise group is a
purely internal organizational unit. Each excise group keeps records of all transactions that have to
be reported to the excise authorities. When the time comes to present these records to the
authorities, the excise registration compiles the information from all of its excise groups.
Configuration:
T-code SPRO.
Default challan qty in GR: System will copy GR Qty in to Excise invoice
Excise inv during billing: This is a prerequisite configuration for the creation of excise after billing
automatically.
Create and Post invoice single step: purchase return excise invoice will post in MIGO transaction
itself based on this configuration. But it is not advised.
Depot settings: If Plant is a depot activate all settings, so that depot functionalities will be work.
MIGO settings: Based on these settings in MIGO transaction > Excise tab > excise functionalities
will be work.
Based on excise regulations and exemptions from the authorities you can maintain multiple
number series for outgoing documents. But each of these series has to be declared to the excise
authorities.
Configuration:
T-code SPRO.
Excise Duty is to be maintained as “1” for 100% Tax and “2” for 50% Tax and “3” for No Tax.
Configuration:
T-code SPRO.
In this IMG activity, maintain the addresses of various customs and excise organizations that the
company deals with. You use these addresses in the ARE Documents functions. When you create
an ARE-1 or ARE-3, you enter the address of the excise department and the customs department
involved in the export process. The system then prints their names and addresses on the AREs.
Then a default local excise department can be defined for the excise group and a default customs
department for each series group.
Configuration:
T-code SPRO.
Click on address icon then maintain address then assign to appropriate excise group.
IP: Import
01: Subcontracting
Configuration:
T-code SPRO.
The standard system comes with two tax calculation procedures. TAXINN is only supports
condition-based excise determination, whereas TAXINJ supports condition-based excise
determination and formula-based excise determination.
Both tax procedures contain condition types that cover all of the excise duties and sales taxes
applicable.
Since the exact rates of excise duty can vary on a large number of factors, such as which vendor
you purchase a material from, or which chapter ID the vendor stocks the material under, you create
condition records for every sort of excise duty.
When you come to enter a purchasing document, the system applies the excise duty at the rates
you have entered in the condition records.
As per the industry standard practices TAXINN procedure will be used. For all excise condition
types we will maintain access sequences as JTAX and rest is MWST. If access sequence is JTAX
condition record needs to maintain as per the desired combination in FV11 transaction. If required
create new access sequence then maintain the condition records. If the access sequence is MWST
then tax code will be maintained in the FTXP transaction .
Configuration:
T-code SPRO.
Menu Path IMG Financial accounting new Tax on sales / Purchases Basic
settings Check calculation Procedure.
Condition types
Configuration:
T-code SPRO.
Menu Path IMG Financial accounting new Tax on sales / Purchases Basic
settings Check calculation Procedure.
Configuration:
T-code SPRO.
Menu Path IMG Financial accounting new Tax on sales / Purchases Basic
settings Check calculation Procedure.
In this activity, you enter the key for the calculation procedure to the Country key so that system
will determines the conditions which are allowed per document and which defines the sequence of
the conditions in the document for each country. Assigned ZTAXIN tax procedure to country IN.
Configuration:
T-code SPRO.
Menu Path IMG Financial accounting new Tax on sales / Purchases Basic
settings Assign country to calculation procedure.
Tax type
Output tax, input tax, additional taxes, or "not tax-relevant" can be specified as the tax type.
Posting indicator
Here you specify whether the tax amount is posted separately or distributed to expense or
revenue items.
This indicator is set only for Canada. If you select it, the system does not take into account
the corresponding tax amount when determining the tax base .
Configuration:
T-code OBCN
Menu Path IMG Financial accounting new Tax on sales / Purchases Basic
settings check and change settings for tax processing
In this activity, you specify for which fiscal years you want to activate Country Version India for the
accounting interface.
Activities
To year: 2999
Active: X
T-code SPRO
Menu Path IMG Financial accounting new Tax on sales / Purchases Basic
settings India Activate country India version for specific fiscal years
Based on this configuration excise duties are replicated from original document to excise
document. For example excise value from purchase order to Goods receipts transaction. Maintain
all relevant condition types against the tax procedure. Assign import pricing condition types like
CVD (JCV1), CVD ECS to ECS Condition Type A/P Imports, Additional customs duty.
Configuration:
T-code SPRO.
Tax code will used to calculate the taxes. As per configuration tax codes needs to be created for
the VAT/Service tax/ CST. Because we maintain access sequence MWST for these condition
types.
Configuration:
T-code FTXP.
Configuration:
T-code SPRO.
In this IMG activity, specify which condition types are used for which sort of tax. This only applies
to condition types that you use with the new excise determination method.
The system uses this information when you create a document from another one. For example,
when you enter an incoming excise invoice from a purchase order, or when you create an outgoing
excise invoice from a sales order, the system determines the various excise duties in the excise
invoice using the information that you have entered here.
In addition, when you create a purchasing document, the system only uses the condition types that
you enter here. This configuration is one of the pre requisite to display tax accounts in MIRO
transaction.
T-code SPRO.
Note: Maintain all tax procedure condition types with appropriate condition name against your tax
procedure.
In this IMG activity, the chapter IDs and the corresponding descriptions are maintained as per the
schedules published by the Central Board of Excise and Customs. Generally chapter id „s will be
created in j1ID transaction under sap easy access.
Configuration:
T-code SPRO
T-code SPRO.
Select the reference transaction 01 with all * then click on user screen reference.
All the accrual which are defined in the system will be displayed here. Maintain G/L account against the
accrual wise as per the requirement wise.
For excise accruals maintain CENVAT clearining account only. In MM point of view all these G/L will be
displayed in the MIRO transaction and accounted similarly.
Configuration:
T-code SPRO.
Click on Rules
If you would like to maintain G/L against the tax code > select the Tax code > save.
Maintain posting keys as per the requirement wise. Given posting keys are as per the standard
system.
Note: in Rule tax code is not selected in this case input tax code field is not displayed maintain G/L
account only.
This is critical configuration in the excise account determination. As per the standard SAP excise
transaction types are predefined by SAP. It is not possible to create new excise transaction types
as per the requirement wise. Based on the excise transaction type we can configure the excise
account means which account needs to debit and credit in the transaction.
It is also possible to insert the sub transaction type for each excise transaction type. As per the
requirement maintain excise accounts against the excise transaction and sub transaction wise. In
MM account determination configuration is not possible to configure which account type needs to
debit and credit but here in excise account determination it is possible where as on excise
transaction type can‟t be used for two postings like debit in one same and other case it should be
credit by with help of sub transaction type.
BED account will be debit. By using of sub transaction type for the GRPO you can configure BED
account will credit but system generates account document as per configuration where as debit
only is updated in the respective table.
T-code SPRO.
Excise group
Transaction type
Company code
Sub Transaction type
Chart of accounts
While posting the excise transaction system will trigger the relevant G/L accounts based on
the above combination.
Configuration:
T-code SPRO.
In this transaction it is possible to maintain the field selection for the incoming invoice (J1IEX
transaction).
Configuration:
T-code SPRO.
In this IMG activity, you specify which processing modes the user can use in the various Incoming
Excise Invoice transactions. Generally Standard settings are sufficient.
This way, you can tailor the transaction to what your users have to do.
The system comes with three standard transactions relating to the Incoming Excise Invoices
function (those that are included in the role SAP_CIN). The processing modes available in these
transactions are as follows:
J1IEX_C
This transaction is for excise clerks: users of this transaction can only capture and display
excise invoices.
T-code SPRO.
In this IMG activity, you specify for each combination of transaction and processing mode which
reference documents you want the users to be able to use.
If the standard settings meet your requirements, you do not have to do anything.
Otherwise, add the entries that you need to the table: For each transaction, make one entry per
combination of processing mode and reference document. Activate each entry for it to work.
T-code SPRO.
Enter transaction code, Processing Mode, reference document then click on active.
Based on this configuration system will allow perform excise transactions with respective
actions and reference documents.
In this IMG activity, you define the rejection codes that are used in the Incoming Excise Invoices
transaction. The rejection codes are to be maintained for Damage & Return under Quality .
Configuration:
T-code SPRO.
In this IMG activity, you specify which movement types relating to goods receipts involve excise
invoices. The system uses this information during the goods receipt procedure. When you post a
goods receipt using one of the movement types that you have specified here, the system prompts
you to enter the excise invoice number so that it is possible update the appropriate register.
Configuration:
T-code SPRO.
You enter outgoing excise invoices by referring to either of the following documents:
Customer invoices
These options are represented in the system by different document types and document flows.
Specify which billing document types you use as a reference for CENVAT utilization
Configuration:
T-code SPRO.
Configuration:
T-code SPRO.
Based on this configuration system will create outgoing excise invoice immediately after billing .
The subcontracting attributes help determine conditions for a combination of an excise group, a
transaction type, and a sub transaction type.
The conditions such as the number of excise items per subcontracting challan, if the non excisable
materials have to be filtered or not when the subcontracting challan is created, the movement type
groups for issues and receipts and the hierarchy of determining the excise base value are
mentioned here.
Configuration:
T-code SPRO.
Sub transaction type: Maintain sub transaction type 01 as per the standard system.
Subcontracting period: As per the legal requirement send material should be return within 180 days
else need to pay the excise.
Excise item: 999 – system will allow no of line items in the subcontracting challan.
Assessable value/ excise invoice: System will fetch assessable value from the j1ID transaction.
0001 is used for those movements for which a challan needs to be created 0002 is used for
movement types involved in reconciliation.101 movement SHOULD NEVER BE assigned to either
0001 or 0002.
Configuration:
T-code SPRO.
6. UTILIZATION
In this IMG activity, you specify which CENVAT accounts are to be debited by the Fortnight
Utilization of CENVAT report: When the report calculates how much excise duty you must remit, it
automatically proposes which CENVAT accounts the duty should be debited to. Here, you specify
those defaults.
If you want 50% of basic excise duty (BED) to be debited to the RG 23A account and the remaining
50% to the RG 23C account, you would make the following settings:
Alternatively, to debit all of the BED to the RG 23A account, and then RG 23C account, if there is
not enough in the RG 23A account, you would make the following settings:
When you come to run the report, the system takes the RG 23A account because it is the first one
you have entered. If this account does not cover the BED, the system takes the RG 23C account
instead.
Configuration:
T-code SPRO.
In this IMG activity, for each of your company codes, you specify which SAPscript forms the
system prints the excise registers with.
Standard settings
Country Version India includes a number of sample SAPscript forms and printing programs, which
you can use as follows:
RG 23 D 1 J_2I_RG23D J_2IRG23
RG 1 1 J_2I_RG1 J_2IRRG1
RT 12 1 J_2I_RT12_ABSTRA J_2IRT12
RT 12 1 J_2I_RT12_3 J_2IRT12
The layout description can be left blank or an appropriate description maybe filled in. You may not
change the register name. You can have your own layouts and maintain the name here. If the
output device and number of copies are maintained it is automatically picked up for printing.
Configuration:
T-code SPRO.
Based on the above configuration, it is possible to display the excise registers in the J2I6
transaction.
8.1NUMBER RANGES
You can maintain the number ranges for all CIN Number range objects using this transaction
The number ranges are to be maintained as per each Register Type into which the documents are
posted.
Configuration:
T-code SPRO.
In this activity, you can specify whether a given message should appear as a warning message or
an error message.
Enter each message that you want, specifying whether it should apply to one user or all users.
Configuration:
T-code SPRO.