{This is my 2nd blog in SCN and 1st blog in SAP ERP – Logistics Materials Management (SAP MM) Forum. I do realise and strongly believe now, there is another part of SCN world rather than answering the thread/threads where I expressed in my SCN 1st blog ‘Me, Myself, SDN and now SDN is SCN @10Years’ http://scn.sap.com/community/about/blog/2013/10/07/me-myself-sdn-and-now-sdn-is-scn-10years for “SCN and Me- Blog Competition” http://scn.sap.com/docs/DOC-45348}.

Every movement of goods is followed by movement type only and without movement type use / without help of movement type – no goods movement is possible in SAP. During goods movement of transaction posting, movement type trigger transaction event key and G/L account assignment triggers based transaction event key (OBYC) with valuation class where valuation class determines the valuation class available in material master which is used for transaction posting. For automatic account determination, the vital direct parameters involves are  movement type, valuation class, chart of account, valuation area, business key (transaction key), valuation grouping code{ valuation modification or valuation modifier}, account grouping code{general modification or general modifier },nature of G/L account ,posting keys and value string.

Moderately understandable, only large vital factor – valuation class in material master determine G/L account on goods movement for a movement type and then, all are happy on validation in/for business process by cross checking accounting entries in each case/stage. Essential regard to account category reference (which is very much responsible of having valuation class in material master), play grandparent role by being silent friend for success to automatic account determination process.

The account category reference (ACR) is an artificial code of four characters which allows flexibility in linking material type with valuation class. In reality, the valuation class is linked to an account category reference and account category reference linked to material type. In other term account category reference is used to simplify the assignment of permitted valuation class/valuation classes to the material type/ material types.

Business Case-1: How to use Account Category Reference

Based on requirement, business can have one material type, one account category reference and one valuation class by assigning material type to account category reference and then assigning account category reference to valuation class. For example business can have one custom material type ZROM (Raw Material) with custom account category reference (Z001) and new valuation class (3005) for Raw Material(Raw material – inventory managed with quantity and value)

Business Case-1.PNG

During material creation with transaction code: MM01 with certain material type manually or by any uploading tool, only one permitted valuation class is defaulted for that material type by account category reference. So in material creation process no chance of making any mistakes by users or by any uploading tool.

Business Case-2: How to use Account Category Reference

Based on requirement, business can have one material type, one account category reference and multiple valuation classes by assigning material type to account category reference and then assigning account category to valuation classes. For example business can have one custom material type ZROM (Raw Material) with custom account category reference (Z001) and new valuation classes i.e. (3005) for Raw Material, (3006) for Chemicals and (3007) for Filter material (all materials are inventory manage with quantity and value)

Business Case-2.PNG

During material creation with transaction code: MM01 with certain material type manually or by any uploading tool, only permitted valuation classes are defaulted for that material type by account category reference . Here, there is a chance of entering wrong valuation class by user manually or through upload file using a tool which needs to be validated.

Business can go for designing a custom transaction code where material can be created through uploading file which can be verified by central material creation officer.

Business Case-3: How to use Account Category Reference

Based on requirement, business can have multiple material types, one account category reference and multiple valuation classes by assigning material types to account category reference and then assigning account category reference to valuation classes. For example business can have three custom material types such as  ZROM (Raw Material), ZCHE(Chemicals ) and ZFIL(Filter material ) with one custom account category reference (Z001) and three new valuation classes ie.. (3005) for Raw Material, (3006) for Chemicals and (3007) for Filter material (all materials are inventory manage with quantity and value)

Business Case-3.PNG

During manual material creation with transaction code: MM01 or material creation by any uploading tool, only permitted valuation classes are defaulted for that material type by account category reference. Here, entering correct combination of material type for material and valuation class are expected through manually or through upload file which needs to be validated.

Business can go for designing a custom transaction code where material can be created by referring uploading file which can be verified by central material creation officer.

Material Master Creation.PNG

Also business can think of having “material master creation form” for any new material master creation, if necessary material code/ material number is not available in system – User/Users can fill the “template of uploading file’ with duly filled “material master creation form” and send for approval.On appropriate check and verification with approval from approving authority, if central material creation officer is happy, then he /she can upload file with custom transaction code for new material code.

Reference:

http://scn.sap.com/thread/1748734

https://scn.sap.com/thread/2012467

http://scn.sap.com/thread/3158751

Before concluding, based on business scenarios and material behaves to business on purchasing, inventory management and accounting management – one can decide on usage of valuation class and material type permitted by account category reference.

Thanks for your time to read my 2nd Blog. Also I would like to thank all my present project team members for their great encouragement and strong motivation.

Regards,

Biju K

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118 Comments

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  1. SAP Learner

    Hi Biju,

    Good Info. Let me describe situation for determining account to get valuable inputs from expert :

    BSX: Inventory Posting configuration

    Plant A = valuation grouping = 0001

    Plant B = valuation grouping = 0001

    Plant C = valuation grouping = 0001

    Valuation grouping code is “0001” same because of all three plants follow one inventory posting account.

    Plant D = valuation grouping = 0002

    Plant E = valuation grouping = 0002

    Plant F = valuation grouping = 0002

    Same situation for BSX configuration inventory account is same for plant D,E&F. This will work as for BSX inventory posting configuration.

    GBB – INV: Inventory adjustment account configuration

    Now, i have little challenge for GBB- INV configuration as such, Plant A & B follow same inventory adjustment account “5000001”,  Plant C & D follow inventory adjustment account “5000002” and Plant E & F follow inventory adjustment account “5000003”.

    Do you suggest to create another three valuation grouping codes (one valuation grouping code for two plants) for handling GBB-INV three GL inventory adjustment accounts configuration ? All plants are same but will system determine correct GL for as we are repeating same plants under diff. valuation grouping code ?

    Thanks,

    (0) 
    1. Bijay Kumar Barik Post author

      Hi,

      System already designed for two valuation grouping codes 0001 and 0002 for Plant A,Plant B,Plant C, Plant D, Plant E and Plant F.

      At present changing existing design not advisable and you can go for only inventory adjustment account with GBB- INV with valuation grouping codes 0001 and 0002 as following:

      adjustment account “5000001” for Plant A,B & C
      AND
      adjustment account “5000002” for Plant D,E & F.

      NOTE: On changing existing design to have three valuation grouping codes for entire system for only three inventory adjustment accounts may not justified.

      Regards,

      Biju K

      (0) 
      1. SAP Learner

        Hi Biju,

        I got your views that it may not justified but if company follow a diff. inventory adjustment accounts for GBB-INV – so do not have any option to create three grouping code only for GBB-INV. or define valuation grouping code for each of the plant which follow diff. inventory adjustment account. since we do not have option to tie directly to valuation area level.

        Thanks for your feedback.

        (0) 
  2. Hoysala SAP

    Hello Bijay – Thanks a lot and integration points are well-explained. I have one doubt.

    Why can not we create 3 ACRs and assign them to 3 Material Types and their respective Valuation classes. So that User doesn’t have option to choose the Valuation class as there is only one, which would be defaulted automatically for each of the 3 Material Types.

    Pls clarify my doubt.

    Thanks

    (0) 
    1. Bijay Kumar Barik Post author

      Hi Hoysala,

      Yes, you can proceed with your option where you have link in between of only

      One material type-One account category reference – One valuation class which is already explained in Business Case-1

      Regards,

      Biju K

      (0) 
  3. s v venu

    Very Nice & informative article but please have command over english language, some words totally confuse the meaning you wanted to convey. I hope this will not offend you .

    (0) 
  4. Bijay Kumar Barik Post author

    Hi Venu,
    I appreciate your comments and feedback.
    You made me happy, but I always knew something was missing!!!!

    Your comments is best comment to me where you pointed it out and now I need to correct it with an update to this blog.

    Thank you again.

    Regards,
    Biju K

    (0) 

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