MM Transactions 1

8/4/2019 MM Transactions 1

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Unit 12

Materials Management (MM)

- Transactions -


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Rushmore Group, LLC 2008. All rights

reserved.

2

Business Process Integration

MM


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3

Transaction Data

Includes internal and external exchanges that

describe business activities

Unlike master data, aggregate transactionaldata is dynamic each transaction is unique


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R/3

FIFinancial

Accounting

COControlling

PSProject

SystemWFWorkflow

ISIndustry

Solutions

MMMaterials

Mgmt.

HRHuman

Resources

SDSales and

Distribution

PPProduction

Planning

QMQuality

Mgmt.PMPlant Maintenance

SMService

Mgmt.Client / Server

Integrated Business

Solution

ECEnterprise

Controlling

AMFixed Assets

Mgmt.

Materials Management (MM)


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Procurement Process(Procure-to-Pay)

Purchase

Requisition

Payment

to Vendor

NotifyVendor

Vendor

ShipmentInvoice

ReceiptGoods

Receipt

Purchase

Order

3-Way

Match


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Basic Procurement Process

Requirements Determination - PurchaseRequisition

Vendor Selection

Order Processing - Purchase Order

Order Tracking

Goods Receipt and Inventory Management

Invoice Verification

Payment


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Purchase Requisitions

Internal document

Requesting a certain quantity of material or

service on a certain date Can be created:

Manually

Automatically (Materials Requirements Planning(MRP), sales orders, etc.)

Release approval procedures are optional


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Purchase Requisitions Sources

Manually created by user department Office supplies

Projects

Prototype materials Automatically created by

Planning (Material Requirements Planning (MRP),Master Production Schedule (MPS))

Plant Maintenance Production Orders

Sales Orders


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Purchase Requisitions Processing

Create purchase requisition (manually or

automatically)

Determine source of supply Release procedure (optional)

Assign vendor and process


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Purchase Requisitions Creating

Default data for line items Delivery dates, plants, purchasing groups, etc.

Maintain line item data Materials, quantities, delivery dates, etc.

Maintain account assignment (if required) Cost center, General Ledger accounts, project

number, etc.

Check data Save


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Purchase Orders

Purchase Orders are: A formal request to a vendor to provide materials

or services

An internal planning and tracking tool Purchase Orders identify:

Vendor

Material and/or service

Quantity and price Delivery dates

Terms of payment


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Purchase Order Structure

Header

Header - information specific to the entire

purchase order

Vendor

Currency

Payment terms


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Purchase Order Structure

Line Items

Line item details

Account assignment

Delivery schedule Materials or services quantity

Price

Description

Item category


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Purchase Order

Request for Quotations

Purchase Order

Order Acknowledgment


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Purchase Order Output Format

Printed and mailed

E-mail

Electronic Data Interchange (EDI)

Faxed (hardcopy or electronic)

eXtensible Markup Language (XML)


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Goods Receipt

Goods receipt with reference to a purchaseorder

Copy data from purchase order

Delivery notification

Invoice verification

Updates purchase order history

Inventory update Automatic update of General Ledger (G/L)

accounts


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Goods Receipt (continued)

You can search for the purchase order number

with

Material number, vendor number, etc.


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Goods Receipt Destinations

Stock - given a storage location, can be postedto three different stock statuses Unrestricted-use

Quality inspection

Blocked stock (valuated)

Consumption - can be assigned a recipient orunloading point

Goods receipt for blocked stock - updatesinventory, but material is not valuated(conditional acceptance)


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Goods Receipt Movement Types

Movement types - stock transactions

Goods receipt

Goods issue

Stock transfer

Movement type determines which

Quantity fields are updated

Stock types are updated

General Ledger (G/L) stock or consumption accounts areupdated

Fields are displayed during document entry


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Goods Receipt Movement Types

(continued)

101 - goods receipt for purchase order into

warehouse/stores

102 - reversal of goods receipt for purchaseorder into warehouse/stores

122 - return delivery to vendor

501 - receipt w/o purchase order intounrestricted-use stock


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Goods Receipt Account Postings

Inventory account is debited at standard price

Goods Receipt/Inventory Receipt (GR/IR)

clearing account is credited at purchase orderprice

Price difference account is debited (credited)

with difference between standard price and

purchase order price


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Goods Receipt Effects

Purchase Order (PO) history and Purchase

Order (PO) updated

Material Master - stock and value updated Notification of goods receipt issued (optional)

Transfer request to Warehouse Management

system (if active)


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Goods Receipt Effects (continued)

Material and financial documents created

and/or updated

Stock and consumption accounts updated Inspection notification in Quality Management

(QM) - if active


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Invoice Verification

Matches the vendors invoice to the purchase

order and the goods receipt (3rd part of 3-

way match)

Matches price and quantity

Updates the purchase order and its history

Updates accounting information


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Invoice Payment

Selects invoices for payment based on the

payment terms in the vendor master or

purchase order

Generates payment for released invoices

Updates accounting information


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3-Way Match for Payment

Purchase

Order

Goods

Receipt

Invoice

Receipt

Debit Credit

Payment

Program

Verification


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Accounts Payable Settlement Process

Determines:

Open items to be paid

When they will be paid

Bank from which payment will be made

Payment medium

Who will get paid

Payment process creates a financial accounting

document to record the transaction


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Goods Receipt/ Invoice Receipt

Reconciliation Account

Purchase requisition

Purchase order

Materials Management (MM)and Financial Accounting (FI)

via automatic account

assignment

Goods receipt

No impact on

Financial Accounting (FI)

Dr Cr

Inventory

$100

Dr Cr

GR / IR

$100


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Goods Receipt / Invoice Receipt

Reconciliation Account

Amount owed is

assigned and transferred to

vendor account payable

Invoice receipt

Dr Cr

Vendor A/P

$100

Dr Cr

GR / IR

$100


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Vendor Payment

Amount owed is paid to

vendor and account payable is

reduced

Bank

Dr Cr

Vendor A/P

$100

Dr Cr

Bank

$100


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(FI MM) Integration Points

Invoice

Receipt

Payment

Program

Goods

Receipt

AP(Vendor)

Dr Cr

GR / IR

$100

Bank

Dr Cr

Inventory

$100 $100 $100

Dr CrDr Cr

$100$100


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Automatic Account Assignment

Debit posting $100

BSX - inventory

posting to trading

goods inventory

account 201XXX

Credit posting $100

WRX goods receipt

posting to GR/IR account

310XXX


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Unit 12 Exercises

100. Create Purchase Order for Slick Pens

101. Create Purchase Order for Premier Pens

102. Create Purchase Order for Promotions, Ltd.

103. Create Goods Receipts for Purchase Orders

104. Create Invoice Receipts from Vendors

105. Post Payment to Vendors

106. Display Vendor Line Items

Documents

MM Transactions 1