FI-MM Integration
Process Flow in MM
Step 1 Generating purchase requisition( PP-MM involved)
Step 2 Making inquiries (MM)
Step 3 Raising purchase order (MM)
Step 4 Release of purchase order ( MM)
Step 5 Goods received from vendor ( MM and FI )
Entry will be
Raw Material Inventory a/c Dr.
GR/IR clearing a/c Cr.
Step 6 Invoice verification and quality assurance (FI and MM)
Entry will be
GR/IR clearing a/c Dr
Vendor a/c Cr
Step 7 Goods issued for consumption(MM, FI and PP)
Entry will be
Raw material consumption a/c Dr
Raw material inventory account Cr
Step 8 Production receipt( FI, MM & PP)
Entry will be
Finished goods inventory a/c Dr
Change in stock Cr
Step 9 Finished goods delivered to customer(MM, SD & FI)
Entry will be
Change in stock Dr
Finished goods inventory a/c Cr
Step 10 Raising invoice on customers( SD & FI)
Customers a/c Dr
Sales a/c Cr
Step 11 Receipt of payment from customers( Same as SD-FI integration)
CUSTOMIZATION STEPS
Main screen of FI-MM integration is OBYC
Here we have to link the MM movement types to FI G/L accounts
Assign Following G/L accounts to movement type according to valuation class.
BSX- Raw material Inventory account
GBB- Raw material consumption account
WRX- GR/IR clearing account
http://www.bhejacricket.com/sop2.htm
Please refer the period end activities list.
Sl. No. Module Closing Activity Transaction
1 FI Open posting period 01 for New Year OB52
2 FI Capitalize AUC (Projects) Assets if needed AIBU
3 FI Upload Payroll Data into SAP ZMXFI03/ 04
4 FI Review Accounts Receivable Open Items S_ALR_87012174
5 FI Review Accounts Payable Open Items S_ALR_87012083
6 FI Post all Pending Invoices FB60/65/70/75
7 FI Clear Open Item for GRIR account F.19
8 FI Reconciliation of Financial Documents and transactional figures F.03
9 FI Perform Manual Adjustment if needed FB01
10 FI Verify balance of the GR/IR account FS10N
11 FI Post Accruals and Deferrals FBS1
12 FI Check the check run numbers FCHI
13 FI Reconcile GL balances with subledger balances AR/MM/AP "S_ALR_87012172
MC.9
S_ALR_87012082"
14 FI Post Balance Sheet Adjustments FB01
15 FI Post Foreign Currency Valuation (foreign exchange) F.05
16 FI Fiscal Yr Balance carryforward AP/AR/AM F.07
17 FI Fiscal Yr balance carryforward FI F.16
18 FI Set Document number ranges - FI - new year FBN1
19 FI Set Document number ranges AP/AR - new year FBN1
20 FI Generate Financial statement Reports F.01
21 FI Close Year Accounts Receivable Posting Period OB52
22 FI Close Year Accounts Payable Posting Period OB52
23 FI Close Year Materials Management Posting Period OB52
24 CO Open new CO Posting Period
25 CO Compare current (cost estimates) with last current price (Moving Avg)
26 CO Update current cost price to material master price field.
27 CO Review Internal Order Postings
28 CO Settle All Orders
29 CO Check Profitability Segment Adjustment
30 CO Check generic cost centers for posting with wrong accounts
31 CO Correct wrong postings on generic cost centers
32 CO Check Validation dates for Cost Centers, Cost Elements, CO area
33 CO Reconcile PA to G/L
34 CO Post Cost Centre Assessments and Distributions
35 CO Run CO-FI Reconciliation to balance
36 CO Maintain CO yr variant
37 CO Fiscal Yr Balance carryforward CO
38 CO Fiscal Yr balance carryforward PCA
39 CO Close CO Posting Period
40 CO Load Balances, Budget Data for Cost centers, sales
41 FI/MM GR/IR account maintenance - if necessary
42 MM Verify In-transist Inventory MB5T
43 MM Posting Goods Receipt and Invoice receipt on hand
44 MM Define Number Assignment for Material and Phys. Inv. Docs OMBT
45 MM Closing the MM Period MMPV
46 MM Maintain number ranges for Invoice documents OMRJ
47 SD Verify All Post Goods Issue have been Invoiced (Billing Due List)
48 SD Review SD Billng Doc from prior mth that have not yet been released to accounting
49 Process Freight charges, Match SD freight to actual
50 Clear all Pending IDOCs
51 Doubtful receiviables
Sales and Distribution Accounting Entries
INVOICE GENERATION
Invoices will be generated at the Smelters and stock points. The accounting entries for
the sale of goods despatched will flow from the Sales invoice generated in SAP Sales and
Distribution module. The following entries shall be passed
Customer Account Dr
Revenue Cr
Excise Duty Payable Cr
Sales Tax Payable (local or central) Cr
Note: As mentioned above in the FI document, which is created in the background, the
SD invoice number shall be captured. However as per the current accounting procedure
the accounting entry passed is as follows :-
Customer Account Dr
Revenue Cr
Excise Duty Billed Cr
Sales Tax Payable (local or central) Cr
Excise duty paid a/c Dr
Excise duty payable a/c Cr
EXPORT SALES
There have been very few export transactions in the past. SAP system will be designed to
handle export business. Exports are mainly from the mines and will be handled at the
mines, however the documentation part will be taken care at the Head Office. The
accounting entry is:
Customer Account Dr
Revenue (Exports) Cr
The realisation of export sales will be directly credited to the bank. The accounting
entries will be as follow:
Bank Dr
Customer Cr
Exchange Fluctuation Dr/ Cr
The accounting entries will be:
Rebates/Discounts Dr
Customer Cr
DEBIT MEMOS
Debit Memos shall be issued in case of price difference, sale tax difference and interest
on usance period and overdue payments.
The accounting entries for two possible scenarios are as follows:
Price Undercharged:
Customer Account Dr.
Revenue Cr.
Sales tax payable Cr.
Sales tax undercharged
Customer Account Dr.
Sales tax adjustment Cr.
Interest on delayed payments/usance period and other charges
Customer Account Dr.
Interest Others Cr.
In case of HZL a complete retirement or a partial retirement of asset is done. The system
uses the asset retirement date to determine the amount to be charged off for each
depreciation area. The existing accounting policy is to provide depreciation for the full
quarter in which the asset is sold/discarded, recommended that the depreciation be
provided from the date of acquisition on prorata basis .
Accounting entry for sale of Asset to customers:
Customer Account Dr
Asset Sale Cr
Accumulated Depreciation Dr
Loss on Sale (if applicable) Dr
Asset Sale account Dr
Asset account Cr
Profit on sale (if applicable) Cr
Note: In case of any Sales Tax /Excise duty applicable for this transaction, SAP will
calculate the Sales Tax/Excise Duty based on the Tax Code selected the entry is posted
to the GL Account (Sales Tax Payable)
Accounting entry for sale without a customer:
Accumulated Depreciation Dr
Loss on Sale (if applicable) Dr
Asset Sale account Dr
Asset account Cr
Profit on sale (if applicable) Cr
Accounting entry for scrap
Accumulated Depreciation Dr
Loss on Sale of Assets Dr
Asset account Cr
SALE OF SCRAP
The sale of scrap (non-stock) shall be mapped as a direct manual FI entry. The customer
will be created as a FI customer. No Logistics module will be involved in the process.
A FI Invoice will be prepared for the sale of scrap with the following entries:
Customer Dr
Sale of Scrap Cr
Excise Duty Payable Cr
ADVANCES FROM CUSTOMERS
Advances are received from the customers against delivery. These advances will be
recorded in a special general ledger account. The accounting entry for the same will be:
Bank Account Dr
Advance Customer Payments Cr
These advances will be later on adjusted against the invoices raised on the customers.
Advances can be adjusted against more than one invoice at the time of clearing of the
invoices against advances.
Adjustment of Advances
Customer Account Cr
Advance Customer Payments Dr
A financial document would be created for each Bank Guarantee received and this
document number will be referred to in the Sales Order which would then monitor the
value and the validity of the of the Bank Guarantee instrument wise while doing the
billing.The letter of credit /Bank guarantee given will be recorded as a noted item.
Accounting Entry for Goods receipt
Stock/Inventory account Dr
GR/IR account Cr
Freight clearing account Cr
Accounting Entry on invoice verification of supplier
GR/IR Dr
Vendor account Cr
Accounting Entry on invoice verification of freight vendor
Freight clearing account Dr
Freight Vendor account Cr
GOODS RECEIPT
Based on the Purchase order and the Quantity actually received Goods Receipts (GR)
will be done. Based on the GR done the following accounting entry will be passed in the
Financial Accounts
RM/PM Stock Account Dr
GR/IR Account Cr
Freight Clearing Account Cr
EXCISE INVOICE VERIFICATION
On receipt of the excise invoice cum gate pass the following entry will be passed
RG 23 A / RG 23 C Part 2 Account Dr
Cenvat Clearing Account Cr
