Integration Point of MM-FI-SD in SAP ERP

As we know about the module MM, FI and SD in SAP ERP.

MM stands for Material Management, FI standard for Financial Accounting, SD stands for Sales and Distribution.

These two modules FI and SD is very much integrated with MM modules. As we are in MM module, we should know about
the integration point.

Here in my blog you can get the knowledge for integration between MM-FI, MM-SD and SD-FI.

We know MM modules means procure to pay process, FI module means financial statement and payment process, SD
module means sale to customer process.
Most of the manufacturing business logic is stands for 3 things BUY-MAKE-SALE
It means an organization buy a raw material/product from a vendor, then he makes from this raw material/product to
finished material/product, then he sale the finished material/product to a customer.

In that 3 part the 3 module are integrate each other.

—>When the organization buy a raw material/product then its coming into warehouse stock, which is goes to MM modules.
And because of the organization has buy something from a vendor, he has to pay for this to the vendor, which id goes to FI
modules.

—>When the organization make the raw material to finished material, at that time the organization needs a subcontractor
vendor, who will make the subcontracting process. Then process from raw material to finished material, it goes to MM
module. And the organization has to pay the subcontracting vendor, this will goes to FI module.

—>When the organization sale the finished material to customer, They have to proceed the sales process (Like as sales
order, delivery, billing etc), its goes to SD modules. At the time finish goods stock is decreased from warehouse, which is
goes to MM module. We sale the finished material to customer, so customer will pay for this finish material, the payment
terms goes to FI modules.

MM-FI Integration
In this part, we learn about MM-FI integration points. When we do a movement for a material, if the movement is account
effect-able, then it will post a account entry in FI.

Lets discuss about how the accounting entry are posted and how you can do the configuration.
We have a material master data in our procurement process.
In material master, we stored all information for a certain material. Like as material type, material group, purchasing
information, sale and distribution information etc etc.
The valuation class (in accounting 1 view) is most important for automatic account posting purpose.

We can see the valuation class for individual material from t-code MM03.

Valuation class is used to group together several material with their same attributes, so that we can carry the same account
determination for various material.

Every material has a valuation class, many materials can contain same valuation class.
As we know the valuation class is link with material type via account category reference.

You can see the blog to understand about material type, account category reference and valuation class.

Account Category Reference (ACR) – Grandfather of Automatic Account Determination Process

The valuation class will be for Raw material, Semi-finished, finished goods. We can differentiate valuation class as per our
business requirement.
Valuation class and Movement type is used for the G/L determination.

Movement type is used for all types of material movement. Suppose if you receive a material from a vendor, a movement is
happens for the movement.
If we transfer a material from one location to another, a movement type is happens for the movement.

It means, whenever we do a off-setting entry, a movement type will be created for that.
For various movement type SAP defines a G/L account for the material movement.
Lets discuss about an account entry for a movement type.

When we do a goods receipt, the movement type happens is 101. And SAP designed as per business process the account
entry will

Inventory A/C debit

GR/IR A/C credit.

We know about these account, Inventory a/c for material master and GR/IR account is a provision account for vendor.

The all account entry is done via automatic account posting.

SPRO-IMG-MM-Valuation and Account Assignment-Account Determination-Account Determination Without Wizard-
Configure Automatic Postings (t-code OMWB)

Direct t-code OBYC.

You can find the all details of automatic account determination with this document Automatic Account Determination
For different different movement type, the account entry is done via different transaction event key.

For example
If any movement type hits the inventory entry then it will hit the BSX transaction event key..

If any movement type hits the off-settings entry then its hit the GBB transaction event key.
If any movement type hits the provision entry then its hit the WRX transaction event key.

If you noticed the transaction key GBB, then you can find the a lots of account modifier are used for various movement
type.
We can’t remember the all account modifier at all, for this purpose SAP introduce Simulation Mode . Using simulation
mode, you can easily identify the account modifier which is used for GBB.
Path = SPRO-IMG-Materials Management-Valuation and Account Assignment-Account Determination-Account
Determination Without Wizard-Configure Automatic Postings
T-code OMWB

Set up the simulation criteria as per your requirement.

Set up the Application Area, Input Mode, Account Check. Then press simulation

You can see the all G/L account uses with all transaction event key and account modifier for this particular movement type.

In this way when we post a movement type in MM module, its also update in FI module.
In short, we can say the main point of MM-FI integration is OBYC

From MM side its Valuation class and for FI side its G/L account. When we do a movement type, the movement type finds
the valuation class for the material, and post the amount to this G/L account which is assigned to this particular valuation
class.

SD-FI Integration
In this part, we learn about SD and FI integration point.
Whenever we sale a finish material to customer, then the customer have to pay for that. We send a bill to customer.

In that position all billing document which is happens to sales and distribution module will be posted into FI module.
The account entry of respect to the billing always have two sides
One side is Customer account and other side will be revenue account.
For example:

Customer A/c Debit

Revenue A/c Credit.

AS per SD module, the customer account will be picked from customer master data, which is maintained from SD module.

We just need to configure the revenue account and if there any discount and surcharges account.
We have to do that via access sequence, access sequence is just a SAP terminology to determine the G/L accounts.
SAP provides 5 ways to determine G/L account in SD modules.

These are
1 Cust.Grp/MaterialGrp/AcctKey

2 Cust.Grp/Account Key
3 Material Grp/Acct Key
4 General

5 Acct Key
The assigned G/L accounts are used to post the discount and revenue and any kind of surcharges.

To configure this

Go to Path = SPRO-IMG-Sales and Distribution-Basic Functions-Account Assignment/Costing-Revenue Account

Determination-Assign G/L Accounts
T-code = VKOA

You can see the below screen and you can also see the default table and description for above 5 ways.

First system checks the first table entry Cust.Grp/MaterialGrp/AcctKey. If any G/L maintained here then system will go to
the transaction and the particular billing document, then system search the combination of customer group and material
group. If system will find any G/L, then system will go through the G/L, if system doesn’t find the G/L, then it will search
the next table.
Customer group is maintained in Customer master Data, Material Group is maintained in Material Master Data, Account
key is maintained for condition type in pricing procedure.
Lets maintain One G/L account for material group and account key combination.

Double click on the Material Grp/Acct Key

I have maintained the G/L for this combination. here AAG is the material grp.

Whenever system search the table and find the combination for transaction, then system will debit customer account and
credit to this account (180033)
The account key determine that it is a revenue or discount or surcharges.
Press F4 on the Account Key field, you can see the all account keys.

The account keys are also maintained in calculation schema in Pricing procedure.

Path = SPRO-IMG-Sales and Distribution-Basic Functions-Pricing-Pricing Control-Define And Assign Pricing Procedures-
Maintain pricing procedures

In this way SD and FI are integrated each other.

MM-SD Integration
I don’t think I have to give any explanation about MM-SD integration.

One of our friend Satish Babu explain very much in these 3 document.
Check these below document for MM-SD integration.
Integrating MM & SD Modules in Same Client to Create Sales order in Supplying Company Code Using PO raised in
Receiving …
Integrating MM & SD Modules in Same Client to Create Delivery in Supplying Company Code & do GR in Receiving
Company Cod…
Integrating MM & SD Modules in Same Client to do Billing in Supplying Company Code & do LIV in Receiving Company
Code By…

===================================================================================
Link Between SAP SD, MM & FI
The link between SD and MM :-
1. When you create sales order in SD, all the details of the items are copied from Material master of MM.
2. MRP and availibility check related data is also taken from MM although you control this data in SD also.
3. While you create inbound/outbound delivery with reference to a sales order,the shipping point determination
takes place with the help of the loading group, plant data, shipping conditions etc. This also refers to Material
Master.
4. The material which you are entering in a sales order must be extended to the sales area of your sales
order/customer otherwise you cannot transact with this material.
There are many such links between SD and MM.
Now the link between SD and FI :-
1. Whenever you create a delivery with reference to a sales order, goods movement takes place in the
bacgground. eg. In case of standard sales order, you create an outbound goods delivery to the customer.
Here movement 601 takes place. This movement is configured in MM. Also, this movement hits some G/L
account in FI. Every such movement of good s hits some G/L account.
2. The accounts posting in FI is done with reference to the billing documents (invoice, debit note, credit note etc)
created in SD. Thus this is a link between SD and FI
3. Tax determination: In case of a tax determination also, there is a direct link between SD and MM
SD Integration points with other modules
SD module is highly integrated with the other modules in SAP.
Sales Order –
Integration Points Module
•Availability Check - MM
•Credit Check - FI
•Costing - CO/ MM
•Tax Determination - FI
•Transfer of Requirements - PP/ MM
Delivery & Goods Issue –
Integration Points Module
•Availability Check - MM
•Credit Check - FI
•Reduces stock - MM
•Reduces Inventory $ - FI/ CO
•Requirement Eliminated - PP/ MM
Billing -
Integration Points Module
•Debit A/R - FI/ CO
•Credit Revenue - FI/ CO
•Updates G/ L - FI/ CO
(Tax, discounts, surcharges, etc.)
•Milestone Billing - PS
Return Delivery & Credit Memo -
Integration Points Module
•Increases Inventory - MM
•Updates G/ L - FI
•Credit Memo - FI
•Adjustment to A/R - FI
•Reduces Revenue - FI
SD Transaction Code Flow:
Inquiry / Document type IN
Tcode for creation VA11,VA12,VA13. tables VBAK,VBAP
Quotation / QT
Tcode for creation VA21,VA22,VA23. tables VBAK,VBAP
Purchase Order PO
Tcode for creation ME21,ME22,ME23. tables EKKO,EKPO.
Sales Order OR
Tcode for creation VA01,VA02,VA03. tables VBAK,VBAP
Delivery LF
Tcode for creation VL01,VL02,VL03. tables LIKP,LIPS
Billing MN
Tcode for creation VF01,VF02,VF03. tables VBRK,VBRP
To create a sales order we need purchase order number and custmer number. Before that, to create a purchase
order we need to have material no, vendor no.
To create vendor tcode is
xk01(create), xk02(change) , xk03(display)
Tables are lfa1.
To create custmer tcode is xd01, xd02, xd03.
Table is kna1.
After creating sales order using this no we can create delivery note tcode is vl01.
and go through this link also it will be helpfull
http://www.sap-img.com/sap-sd/link-between-sap-sd-mm-and-fi.htm

Link Between SAP SD, MM & FI

1. In SAP you will always get integration with other modules. SD will interact with FI, MM will interact with SD :-

1a. Looking at MM and SD interaction first, take the scenario of a third party order process. This process
uses a purchase order (which is sent to your vendor). Also invoice verification is used further along the
process to check that the invoice you send to your customer is the same material and quantity as that which
the vendor sends to you (but obviously shipped
directly to your customer).

1b. Billing is an SD function. But SAP needs to know, when processing a customer's payment, to which GL
account the payment has to be processed. For instance payment of a UK based material would be placed in a
different GL account to that of a non-UK based material. Furthermore, a UK based customer may have a
different GL account to that of an Export customer. This is configured in Account Determination.

2. ABAPers are there to essential do some bespoke development. Your integration, or interaction, with them
would be when specifying the tables, fields, input fields, a simple process explanation, data mapping (if
doing an interface from one system to another) etc. *-- Shahee

The link between SD and MM :-

1. When you create sales order in SD, all the details of the items are copied from Material master of MM.

2. MRP and availibility check related data is also taken from MM although you control this data in SD also.

3. While you create inbound/outbound delivery with reference to a sales order,the shipping point
determination takes place with the help of the loading group, plant data, shipping conditions etc. This also
refers to Material Master.

4. The material which you are entering in a sales order must be extended to the sales area of your sales
order/customer otherwise you cannot transact with this material.

There are many such links between SD and MM.

Now the link between SD and FI :-

1. Whenever you create a delivery with reference to a sales order, goods movement takes place in the
bacgground. eg. In case of standard sales order, you create an outbound goods delivery to the customer.
Here movement 601 takes place. This movement is configured in MM. Also, this movement hits some G/L
account in FI. Every such movement of good s hits some G/L account.

2. The accounts posting in FI is done with reference to the billing documents (invoice, debit note, credit note
etc) created in SD. Thus this is a link between SD and FI

3. Tax determination: In case of a tax determination also, there is a direct link between SD and MM

SD Integration points with other modules

SD module is highly integrated with the other modules in SAP.

Sales Order –
Integration Points Module
•Availability Check - MM
•Credit Check - FI
•Costing - CO/ MM
•Tax Determination - FI
•Transfer of Requirements - PP/ MM

Delivery & Goods Issue –

Integration Points Module
•Availability Check - MM
•Credit Check - FI
•Reduces stock - MM
•Reduces Inventory $ - FI/ CO
•Requirement Eliminated - PP/ MM

Billing -
Integration Points Module
•Debit A/R - FI/ CO
•Credit Revenue - FI/ CO
•Updates G/ L - FI/ CO
(Tax, discounts, surcharges, etc.)
•Milestone Billing - PS

Return Delivery & Credit Memo -

Integration Points
•Increases Inventory
•Updates G/ L
•Credit Memo
•Adjustment to A/R
•Reduces Revenue
Tips by: Subha
Module
- MM
- FI
- FI
- FI
- FI

SD Transaction Code Flow:

Inquiry / Document type IN

Tcode for creation VA11,VA12,VA13. tables VBAK, VBAP

Quotation / QT
Tcode for creation VA21,VA22,VA23. tables VBAK, VBAP

Purchase Order PO
Tcode for creation ME21,ME22,ME23. tables EKKO, EKPO.

Sales Order OR
Tcode for creation VA01,VA02,VA03. tables VBAK, VBAP

Delivery LF
Tcode for creation VL01,VL02,VL03. tables LIKP, LIPS

Billing MN
Tcode for creation VF01,VF02,VF03. tables VBRK, VBRP

To create a sales order we need purchase order number and custmer number. Before that, to create a
purchase order we need to have material no, vendor no.

To create vendor tcode is

xk01(create), xk02(change) , xk03(display)
Tables are lfa1.

To create custmer tcode is xd01, xd02, xd03.

Table is kna1.

After creating sales order using this no we can create delivery note tcode is vl01. *-- Ujwala Shirsulla

See also:
The Flow Of Return Sales Order

Get help for your SAP SD problems

Do you have a SAP SD Question?
SAP Sales and Distribution Books
SAP SD Books - Certification, Interview Questions and Configuration

SAP SD Tips
SAP SD Discussion Forum and Sales/Distribution Tips

Main Index
SAP Basis, ABAP Programming and Other IMG Stuff

SAP FI-MM-SD INTEGRATION

Link Between SAP SD, MM and FI

The link between SD and MM :-

1. When you create sales order in SD, all the details of the items are copied from Material master of MM.
2. MRP and availability check related data is also taken from MM although you control this data in SD also.
3. While you create inbound/outbound delivery with reference to a sales order, the shipping point determination takes place with the help of
the loading group, plant data, shipping conditions etc. This also refers to Material Master.
4. The material which you are entering in a sales order must be extended to the sales area of your sales order/customer otherwise you
cannot transact with this material.
There are many such links between SD and MM.

Now the link between SD and FI :-

1. Whenever you create a delivery with reference to a sales order, goods movement takes place in the background. eg. In case of standard
sales order, you create an outbound goods delivery to the customer.

Here movement 601 takes place. This movement is configured in MM. Also, this movement hits some G/L account in FI. Every such
movement of good s hits some G/L account.
2. The accounts posting in FI is done with reference to the billing documents (invoice, debit note, credit note etc) created in SD. Thus this is
a link between SD and FI
3. Tax determination: In case of a tax determination also, there is a direct link between SD and MM
SD Integration points with other modules

SD module is highly integrated with the other modules in SAP.

Sales Order -

Integration Points Module

•Availability Check - MM

•Credit Check - FI

•Costing - CO/ MM

•Tax Determination - FI

•Transfer of Requirements - PP/ MM

Delivery and Goods Issue -

Integration Points Module

•Availability Check - MM

•Credit Check - FI

•Reduces stock - MM

•Reduces Inventory $ - FI/ CO

•Requirement Eliminated - PP/ MM

Billing -

Integration Points Module

•Debit A/R - FI/ CO

•Credit Revenue - FI/ CO

•Updates G/ L - FI/ CO

(Tax, discounts, surcharges, etc.)

•Milestone Billing - PS

Return Delivery and Credit Memo -

Integration Points Module

•Increases Inventory - MM

•Updates G/ L - FI

•Credit Memo - FI

•Adjustment to A/R - FI

•Reduces Revenue - FI

SD Transaction Code Flow:

Inquiry / Document type IN

Transaction code for creation VA11,VA12,VA13. tables VBAK,VBAP

Quotation / QT

Transaction code for creation VA21,VA22,VA23. tables VBAK,VBAP

Sales Order OR

Transaction code for creation VA01,VA02,VA03. tables VBAK,VBAP

Delivery LF

Transaction code for creation VL01,VL02,VL03. tables LIKP,LIPS

Billing F2

Transaction code for creation VF01,VF02,VF03. tables VBRK,VBRP

Excise Invoice (Only for India - Manufacturing Scenario)

Transaction code for creation J1IIN.

Note: Tables for Document Flow VBFA

Configuring Purchase Requisition created automatically by Sales
Order/Sales Quotation
Some Business Processes require Automatic creation of Purchase Requisition from Sales Order. This would
arise especially if the Customer Orders Goods for which we create a Sales Order and Pass on the Customer
Requirement to our Vendor by creating a Purchase Order. The Purchase Order created is linked with the Sales
Order in the ERP System.

The Purchase Order Created can be of Two Types depending on the System configuration:

1. Individual Purchase order: This is a Purchase order in which we are asking the Vendor to Deliver the Goods
to us, instead of the Customer. Goods Receipt is Mandatory against the Purchase Order. On Goods Receipt, the
Stock is available in our System as Sales Order Stock and can be delivered only against the Sales Order Linked
to the Purchase order
2. Third Party Purchase Order: This is a Purchase order in which we are asking the Vendor to Deliver the
Goods directly to the Customer. Goods Receipt is not mandatory against the Purchase Order. On Goods
Receipt the Warehouse Stock is not updated in System.
The Purchase Order is always created with reference to the Purchase Requisition which is created automatically
from the Sales Order/ Sales quotation.
We will not go into details of the differentiation between the above two types of Purchase Orders.

We will here just look into how a Purchase Requisition is created automatically from a Sales Order/Sales
quotation Item. The prerequisites required in terms of Master Data and Customization in achieving the Automatic
PR creation from Sales Order/ Sales quotation item.

So, let’s begin…..

Configuration done to achieve it:

The Main Element which defines the Parameters of The Requisition that is created from the Sales
Quotation/Sales Order is the Schedule Line Category of the Sales Order.
Let’s see its configuration in below SPRO Node.
 As can
be seen in above Screenshot, The Schedule Line Category has different Fields in it.
Important among them are:
The Order Type Field which is the Document Type of the Purchase Requisition that will be created
automatically.
The Item Category Field which is the Item Category of the Purchase Requisition that will be created
automatically.
The Account Assignment Category Field which is the Account assignment Category of the Purchase
Requisition that will be created automatically.
The Other Fields are also of significant importance but not relevant for Our Case.

Now let’s see how this Schedule Line Category is determined for a given Sales Order/Quotation

As can be seen in above Screenshot the Schedule Line Category is determined from the Sales Order/Quotation
Item Category and MRP Type of the Sales Order Material.

In below Screenshot we will see how the Item Category for a Sales order/Quotation is determined.

As can be seen the Item Category of the Sales Order is determined from the combination of Sales Document
Type and the Item category Group of the Material Master.
Apart from the above Configuration which is done from the Sales and Distribution End, additional Configuration
from Material Management End too is required.
As can be seen in below Screenshot, the valid Combination between Item category and Account Assignment
Category too for a Purchasing Document also needs to be maintained.

This is illustrated in below Screenshots:

===========================================================================

1. Question: What are the names of the item and schedule line categories delivered by SAP in the standard system
for the third-party and individual purchase order processing?

Answer: For the third-party order processing, the item category is TAS and the schedule line category is CS; for the
individual purchase order, the item category is TAB and the schedule line category is CB, and for the ALE process
(automatic order creation) the item category is ALES. It can be combined with schedule line category CS or CB.

2. Question: What settings must be made in Customizing to achieve that a purchase requisition (PREq) is generated
when creating a an order item with this schedule line category?

Answer: In schedule line Customizing (Transaction VOV6), the entry for the 'Order type' (TVEP-BSART) must be set to
'NB (Purch.requis. Stand)'.

3. Question: What indicator in schedule line Customizing distinguishes between third-party and individual purchase
order?

Answer: For the third-party processing the 'Item category' indicator (TVEP-PSTYP) must be set to '5 (Third-party)', for
the individual purchase order processing it is generally set to '0 (Standard)'.

4. Question: What account assignment categories should be entered in the schedule line categories for the third-
party order processing and individual purchase order processing?

Answer: For the third-party order processing the account assignment type (TVEP-KNTTP) should be set to 'X (all
aux.acct.assgts.)', for the individual purchase order this indicator should be set to 'E (Customer-indiv. reqt)' or to 'M
(Ind. cust. w/o KD-CO)'. If you want to use other or ypur own PReq account assignment categories, refer to the
additional information in Note 210997.

5. Question: What indicator must be set in Customizing during the ALE process so that a purchase order is generated
automatically?

Answer: Up to and including Release 4.5, you must set the 'ALE relevant' flag in item Customizing (Transaction
VOV7). As of Release 4.6, the corresponding flag is called 'Create PO Automatic.'