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During the Implementation we come across many requirements around free goods, minor consumable, one time purchase items etc. Many of the time Client does not want to follow the whole SAP procurement process or does not want either value or quantity or both to be updated. Many of the time these requirements come in very vague terms, complicated terminologies ,or sometime using many legal/confusing terms. At the end MM Consultant ends up creating customized material times or other workaround custom solutions for the same.

However SAP has provided 2 Standard Material Types to cover many of these requirements,

SAP provides two options for Non Valuated Materials

     1. NLAG – neither quantity nor value is updated (non-stock material)

     2. UNBW – only quantity updated and not value.(non-valuated materials)

During Procurement they behave as below:

1)NLAG is material that is not held in stock because it is consumed immediately. (Office supplies such as stationary. You need to create purchase order and accounting document for payment but the stock balance is always zero as it is issued out immediately to the various department.)

2) If the material is set to quantity update but no value update and it is included in a Purchase Order with account assignment, a goods receipt will increase the stock.

3) For UNBW, accounting documents are created only at the time of goods receipt, i.e where we are liable to pay the vendor. However when we issue this material for consumption or any other transaction accounting documents are not generated.Important feature of UNBW is that it can’t be expensed without receiving in stock.

4) All non-stock  material  will be immediately consumed upon goods receipt. These are charged to a cost element such as Account Assignment, Work Order, or Work Breakdown Structure. As a result, the non-stock will not be charged to inventory.

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  1. Mahi Kam

    Hey Vijay.

    Good blog…wow,impressive one.

    You have started with example as ‘free goods, minor consumable, one time purchase items etc.’, fine for ‘minor consumable, one time purchase items’, once has to decide on its stocking decision to put under NLAG or UNBW since both mapped under paid/payable purchase..all right.

    Now coming to ‘free goods’, Which ICat do you suggest?….see, being free no question of payment to vendor so no acct posting, stock or do not stock is different question…so here NLAG or UNBW does not seems to be right fit. I think one need to flag item line carring ordered material on PO with ‘Free’ Or ‘having a special ‘subICat’ key. Please check of adding ‘subICat’ to complete your blog if agree.

    Suggest to correct the title to ‘Valuated’ from ‘Valudated’

    Bye..

    (0) 

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