Let’s understand MM FI integration

Movement type:

It’s a three digit number which represents the nature of movement of material.

Movement types are predefined by sap. Depending upon transaction, sap

automatically picks the corresponding movement type.

Below shows few examples of movement types:

Transaction key:

GL account is determined with the help of transaction key.

Below are few examples:

BSX : Inventory account (helps in determining GL account for inventory)

GBB : inventory offsetting account (helps in determining offsetting GL account of
inventory GL account)

WRX : GR/IR clearing account (helps in determining GR/IR clearing account)

PRD : Price difference account (helps in determining GL account for booking any
difference in prices)

Valuation modifier:

Valuation areas are grouped together and this group is known as valuation modifier
or valuation grouping code.

Valuation area is basically the level at which material is valued. Material can be
valued either at plant level or at company code level. Hence valuation area is either
plant or company code.

Consider a scenario; a company code has 3 plants.

If valuation area is set as company code, then the price of material in all 3 plants will
be same and material in all 3 plants will be posted to same set of GL accounts.

If valuation area is set as plant, then material price in each plant can be different and
material can be maintained using a separate set of GL accounts.

Standard practice is to keep valuation area as plant.

If multiple plants to use the same set of GL accounts, then valuation areas (plants)
can be grouped together. GL account to be mapped to this group in OBYC.

Benefit of using valuation grouping code or valuation modifier is reduced number of

entries to be maintained in OBYC.

Using valuation modifier is optional. Depending upon business requirement it may or

may not be used in account determination.
General modifier

General modifier is used only with three transaction keys (GBB, PRD & KON)

General modifier help to post to different GL accounts with the same transaction key.

Valuation class:

Valuation class is used in automatic account determination.

Valuation class is maintained in material master.

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ullamcorper mattis, pulvinar dapibus leo.

Let's take an example and understand above concept:

From the nature of business transaction, system automatically determines the
material movement type involved.

From movement type, system automatically determines the transaction key and
general modifier involved in posting the accounting document.

The material involved in the transaction belongs to a particular plant. From plant,
valuation modifier is identified.

From material master, valuation class is identified. (Every material is assigned to a

valuation class and this assignment is done in materiel master)
Now system searches for combination of valuation modifier, general modifier,
valuation class and mapped GL account. This combination is maintained in T code
OBYC.

Example:
When goods receipt (GR) is posted against purchase order (PO), System
automatically determines that movement type 101 is involved.

From movement type 101, system knows transaction key involved is BSX, WRX &
PRD.

From movement type, account modifier if involved is identified.

From plant, valuation modifier is identified.

From material, valuation class is identified.

Below accounting entry is posted:

DR. Inventory account (GL account mapped under transaction key BSX)

CR. GR/IR clearing account (GL account mapped under transaction key WRX)

DR/CR. Price difference account (GL account mapped under transaction key PRD)
MM-FI integration: A conceptual understanding

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Most of us are comfortable with SD-FI-COPA integration concepts as it is easy to correlate and understand. But, when it comes to
MM-FI integration, many of us find difficulties in understanding the concepts and account determination process. When I was trying
to analyze my first issue related to how a stock account is determined in a valuated transaction, I was lost in OBYC. Let us try to
understand few terminology used in MM-FI integration concepts. Once we are familiar with the concepts, we will further discuss
account determination process in a stock movement related transaction.

Valuation area:

Stock of a material owned by a company is an asset to the company. Valuation area defines the organization level at which materials
are valuated.

SAP has provided two options for valuation.

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

2. Valuation at company code level: All materials in all plants of a company are valuated at company code level.

This setting is defined in t-code OX14.

Valuated stock:

Total valuated stock = Stock in unrestricted use + Stock in transit between storage locations/warehouses of a plant + Stock in quality
inspection.

Material type:

This defines the type of material.

EG: Raw material, Finished goods etc.

Material type is defined during material master data creation.

Movement type:

This defines the type of material movement from one place to other. Movement type enables the system to find predefined posting
rules determining how the stock and consumption accounts are to be posted. All possible goods movements are already defined by
standard SAP

EG: Movement type 101 refers goods receipt

Movement type is entered while posting stock movement related transactions. Most of the time, standard SAP automatically derives
the movement type based on transaction code.

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

Valuation class:

Valuation class is defined for the combination of plant and material (In Accounting 1 view of material master).

Valuation class allows posting of stock values of

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

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

Note: G/L accounts can be defined at valuation class level along with other parameters.

Valuation grouping code:

Valuation grouping code combines the valuation areas having same business properties for the account determination. This reduces
number of entries to be created for automatic account determination for the stock postings.

EG: Valuation area 1 and 2 are required to be posted to same G/L account, these are grouped to valuation grouping code ABC and
G/L is determined based on valuation grouping code and valuation class.

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

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

In below example, five valuation areas are assigned to same valuation grouping code.

Account modification/General modification:

This key is used to determine different G/L account for the same kind of goods movement based on origin and target.

EG: During Goods issue, offsetting G/L is determined from transaction key GBB. If business wants to post to different G/Ls for goods
issue for cost centers (Movement type 201) and good issues to orders (Movement type 261) for the same material and plant,
Account modifier can help here. To understand this better, let us go to t-code OMWN where we define the transaction key and
account modification for the movement type.

Transaction key which we see in OBYC is determined based on the movement type. In below screenshot, you can see all
parameters are same for movement type 201 and 261 except account modification.

Please read F1 help on different fields in this screen to know more about functionality of each field.

T-code OMWN:

When material document is posted with these movement types, offsetting account is determined from transaction key GBB based on
account modifier and valuation class.
From below screenshot, you can see that, different offsetting G/L account can be determined for the same transaction key and
valuation class.

By Default, Standard SAP defines account modification keys for below transaction keys. User defined keys can also be defined and
respective account determination settings can be maintained.

GBB (offsetting entry for inventory posting)

PRD (price differences)

KON (consignment liabilities)

Below are the modification keys defined by SAP (Extracted from F1 help).

Modifiers for GBB

For the transaction/event GBB (offsetting entry for inventory posting), the following account groupings have already been assigned to the relevant
movement types:

AUF: for goods receipts for production orders with account assignment

BSA: for initial entries of stock balances

INV: for expense/revenue from inventory differences

VAX: for goods issues for sales orders without account assignment object

VAY: for goods issues for sales orders with account assignment object

VBO: for consumption from stock of material provided to vendor

VBR: for internal goods issues (e.g., for cost center)

VKA: for consumption for sales order without SD

VNG: for scrapping/destruction

VQP: for sampling

ZOB: for goods receipts without purchase orders

ZOF: for goods receipts without production orders

Modifiers for PRD

If you also activate account grouping for transaction/event PRD (price differences) when you make the settings for automatic postings, the following
account groupings are already assigned to the relevant movement types in the standard:

none for goods receipts and invoice receipts for purchase orders

PRF: for goods receipts for production orders

PRA: for goods issues and other goods movements

Modifiers for KON

If you also activate account grouping for transaction/event KON (consignment liabilities) when you make the settings for automatic postings, the
following account groupings are already assigned to the relevant movement types in the standard:
 none for consignment liabilities

PIP: for pipeline liabilities

How are the account determination attributes determined for each transaction key/event?

Did you observe different set of fields appears for different transaction keys in OBYC while maintaining G/L account? Yes. This is
defined in Rules for the transaction key.

EG: Select transaction key AUM in OBYC and click on “Rules” in toolbar.

You can see that general modification and valuation modifier is active.

If you go to G/L account maintenance for this key, you would see the same fields.

Quick snap of MM-FI Integration process:

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

1. Movement type and other attributes like special stock indicator, movement indicator etc are determined based on business
transaction like goods receipt for PO, production order etc.(OMWN). This is defined by standard SAP.

2. Transaction key/event and account modifier is identified based on movement type and other standard attributes in step 1 (OMWN)

3. Valuation grouping code activation is checked from OMWM

4. If active, for the given valuation area, valuation grouping code is identified from OMWD

5. For the identified transaction or event, check if valuation grouping code is active or not in OBYC (Click the rules button for the
transaction key)

6. Valuation class is determined from material master.

7. Based on the above identified attributes, select the G/L account from OBYC.

If system can’t find any account for the found attributes, stock posting can’t be done and system through clear error stating for which
combination of attributes, G/L account is missing. Such errors are mostly seen during go live/while posting to new materials due to
missing G/L account maintenance or due to incorrect valuation class in material master data.

Now you know the process, here is the short cut to find out G/L.

Account determination details are stored in table T030. If you want to know based on what details XXX account is determined, simply
give that G/L in T030 table in field KONTS. This gives the possible combination of entries where this G/L is assigned. We can further
drill down based on the filtered entries.
MM-FI integration: Account determination simulator

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Note: Assuming that reader is aware of MM-FI integration concepts. You can go through below blog as well to understand the MM-
FI integration concepts.

MM-FI integration: A conceptual understanding

Now we know how MM and FI are integrated and how the account determination happens. If we want to test inventory account
determination, neither you need to do actual material posting in the system nor go through master data and customization to identify
the accounts. SAP has delivered account determination simulation tool.

This helps to find how an account is determined while posting stock related transactions. We just need to input plant, material,
movement type and select the transaction we would like to check say GR for purchase order, GR for process order etc. Based on
above inputs, system would read customization, master data and simulate the account determination process. Apart from above,
system would also identify missing account assignments for a given transaction. This would further help to analyze issues in an easy
manner.

Go to T-code OMWB and close the initial popup. Click on Simulation button.

Fill in plant, material , movement type and enter. Transaction list would be automatically refreshed based on the movement type. Double
click on required type of transaction to be checked say GR and click on Account assignments.
In next screen, we can see the list of all available transactions possible for this movement type, plant and material combination. Some fields
like material type, valuation class etc. are derived from material master data. Some fields like valuation area, valuation grouping code etc.
are derived from customization of the plant.
In this screen, we can see what all accounts are determined for different kind of transactions.

EG: For Inventory posting, you can see Debit/Credit posting keys and respective G/L accounts. If there are any missing account assignment
for a given transaction, this is also highlighted with text as “Missing”.

In above example, you can see this happened for Purchase account and purchase offsetting account. We don’t have any account
assignments here as we are not using this scenario. By this way, we can clearly identify the gaps in account assignment without even doing
the actual posting.

We can change to different movement types and transaction combinations and see how account determination happens and based on what
fields it happens. You can try this in your system for various permutations and combinations.

Second feature available with this tool is, to check the screen layout. This would help to identify any conflicts in screen layout rules for the
inventory G/L account item during material document posting.

Screen layout for the inventory account item is determined at two levels.

1. From field status group of movement type

2. From field status group of inventory G/L account.

Click on “Check screen layout” button. In Next screen, we can see what is the field status set at movement type level and G/L account
level. We should ensure that, there is no conflict between these two field status exist.

EG: We can’t have a field mandatory in one FSG and suppressed in other FSG. Posting would fail in such cases.

Sample output:
Just hover on the small ICON to see if a field is Mandatory/Optional/Suppressed/Display only. Any conflicts found should get reported in
the error log in tool bar.

In case of conflicts, priority would be given in the sequence below with the exception of Required and suppressed combination which is not
allowed.

1. Suppressed
2. Display
3. Required
4. Optional

Third option provided by this tool is, “where used list of G/Ls”. This would help to Identify in what all scenarios a G/L has been
configured in the system.

From the main screen of OMWB, click on where used list of G/L.

Enter company code and valuation area in next screen and execute.

Sample output:

This output shows the list of valuation classes and transaction keys a G/L has been assigned to.
Hierarchy is as below.

Chart of accounts

|-G/L account

|-Valuation class

|-Transaction event key

|-Account grouping code

Hope this information would be helpful in your projects 🙂

 MM-FI Integration OR
Automatic Account Determination

What is Automatic Account determination?

● Procurement process requires the cost of goods and services that needs to be paid to the
vendor by an organization.
● The cost being paid must be posted in an organization in a correct general ledger (G/L
Account)
● SAP system can be configured so that the system will automatically determine the
correct G/L account that needs to be posted.
● In short System will trigger a particular G/L account automatically when any goods
purchase or movement happens; this triggering is known as Automatic Account
Determination.
There are certain parameters or an element that decides automatic account determination these
are;
● Chart of Accounts
● Valuation Grouping Code
● Valuation Class
● Transaction/event Key
● Account Modifier or Account Grouping Code
● Event Key and G/L Mapping with Valuation Class
Chart of account
- In SAP Chart of accounts is decided at the client level and Assigned to Company code.
- It is a list of different master account data that fall under different account groups of that
particular company code.
-This helps to develop better financial reports
-One can check it with the T code OB62 in the system. Ash shown in figure
-We can assign Same chart of Account to another company code also.

Chart of Accounts Company Code Plant/Valuation Area

Assigned Assigned
Ex.INT Ex. 1000 Ex.1000

1 | Page S.B.Chopade([email protected])
 OB62

Valuation Grouping Code

- Valuation grouping Code is Collection of valuation areas that will have the same
account determination. In other words, it represents group plants with the same account
determination.
- T Code for checking it into the system is OMWD

Chart of Accounts Company Code Plant/Valuation Valuation

Area Grouping Code
Ex.INT Ex. 1000
Ex.1000 Ex.1000

OMWD

2 | Page S.B.Chopade([email protected])
Valuation Class and Account Category Reference
- Valuation Class is assigned to Material in material master.
- It allows stock of the same material type to be posted in different G/L Accounts.
- It also allows the stock values of materials of different material types to be posted in
the same G/L account.
- Each Material type is assigned to valuation class but; it is not directly assigned, it is
assigned through account category reference.

Material Type Valuation Class

Ex.INT Ex.INT

Account Category
reference
Ex.INT

- If in case we need different valuation classes for the same material type in that case
you can create different valuation classes and assign similar account category
references to those valuation classes.
- Account Category reference is just artificial code of alphanumeric characters which
allows flexibility in linking material type with valuation class.
- T code to check is OMSK

- You can click on account category reference and check or you can create a new
account category reference. It is for digit alphanumeric code.

3 | Page S.B.Chopade([email protected])
 - After creating an account category reference just come back and click on the valuation
class.

- After assigning valuation class to account category reference just come back and assign
account category reference to your material type.

4 | Page S.B.Chopade([email protected])
 Transaction or Event Key
A transaction/event key is a key to differentiate account determination by business transaction.
For example, we must differentiate the general ledger account posted by goods receipt
transaction and posted by invoice receipt transaction.
- With any movement type there are some value strings in the background. Value strings
group together the various transactions used in account determination.
- Value string key is just a pointer to the transaction event key which is necessary for
account determination.
- Movement types are linked to the transaction keys through value string and each value
contains some transaction event key

Movement type Valuation string Key Transaction Event KEY

WE06, WE01, WA01, BSX, WRX, PRD, KDM, FRL,

WA14 BSV

5 | Page S.B.Chopade([email protected])
 - The System uses the Transaction Event key to determine the account in which the
posting line is generated. Generally two transaction event keys are involved in each
posting.
- We can check that with T code OMWN also you can check valuation string in OMJJ.

Account Modifier or Account Grouping Code

- Account Modifier or Account Grouping Code is a three character code especially used
to differentiate the offsetting accounts for consumption postings which could be
different in cases for Trans/event Keys GBB & PRD.
- For example, if you issue goods to a cost centre 201 movement type the trs/event key
that is affected is GBB and similarly if you issue goods for sale to a customer again the
transaction event key is GBB. The account modifier helps you to identify the different
G/L accounts automatically for making the offsetting posting.
- In other words; It is used for account determination. Use club some transaction under
account group like GBB (offset entry of inventory posting - entries which affects the
inventory).
- So, depending upon the account modifier (say VBR (goods issues), VNG (scrapping) -
with transaction event key say GBB) system determines the account determination.
- Tcode to check this is OMWN

Event Key and G/L Mapping

- T code for doing this is OBYC

6 | Page S.B.Chopade([email protected])
Now we will see Account determination Process in SAP
1. Check valuation Area
● Whether it is company code or plant; 90% times it is at plant level.
● Tcode for checking it OX14
2. Define Material Type
● T code for creating material type OMS2.Select ROH and copy as new material
type.ELTR Electronic raw materials

● Update its value and quantity for plant 1000

7 | Page S.B.Chopade([email protected])
 3. Group together Valuation Area
● SPRO-🡪IMG🡪MM🡪Valuation and Account assignment-🡪Account
determination-🡪Account Determination without wizard-🡪Define Valuation
Control
● Tcode OMWM
● If it is not active the you cannot use G/L Account in different valuation area.

● SPRO→IMG-→MM→Valuation and Account assignment-→Account

determination-→Account Determination without wizard-→Group Together
Valuation area
● T Code OMWD
● You can assign same valuation grouping code to different valuation area.

4. Define Account Category reference

● SPRO-→IMG-→MM-→Valuation and Account assignment--→Account
determination→Account Determination without wizard-→Define Valuation
Classes
● T Code OMSK

8 | Page S.B.Chopade([email protected])
 ● Click on account category reference and click on new entry

● New Account Category reference ELTR is created and save the data
●

● Now go back and click on valuation class and create new valuation class

9 | Page S.B.Chopade([email protected])
 ● New valuation Class ELT1 and ELT2 are created and assigned to same Account
Cat. Reference ELTR.
● Come back and click on Material Type/Account Category reference
● Here assign Account Category reference to material type. Save data

5. Assigning G/L Account to the transaction event key and valuation class mapping
● T code for this is OBYC
● You must have an idea about the triggering of Transaction event key like which key
is going to trigger eg. in case of inventory GBB will trigger
● Follow path in IMG as shown in figure. Click on cancel after that click on Account
assignment.
● You will get the window as shown below.Same window can be obtained by running
t code OBYC

10 | Page S.B.Chopade([email protected])
 ● Now let us consider we are going to do simple GR with 101 movement then BSX and
WRX will trigger.
● Click on BSX

● Enter Proper chart of account in our case it is INT

11 | Page S.B.Chopade([email protected])
 ● Enter your Valuation class and assign proper G/L Account and save data

● Repeat the same process for WRX and save data

12 | Page S.B.Chopade([email protected])
 ● Here Configurations are done but, in your case, different event keys may trigger so
check for movement type and assign G/L account accordingly.

13 | Page S.B.Chopade([email protected])
 ● Now create new material follow p2p for the same.and check for transaction
event key after MIGO
1. Create Material master with type ELTR and maintain valuation class as ELT1

2. Material is Created 60000467

3. Create Vendor XK01,100571 created

4. Create PO ME21N, PO created 4500022497

5. Now go for good receipt with MIGO and movement type 101

6. Again, check with MIGO, if no error found post MIGO document 5000001396
7. Again, go to Display mode of MIGO and Check FI Document and check for
transaction event key entries.
8. You can check entries with SE16N and put table number T030

Note: You will get many errors initially in this process during PO and MIGO.

14 | Page S.B.Chopade([email protected])