Professional Documents
Culture Documents
A PR is an internal document that sends notification to purchase department when some material is service is
required. PR can be generated by department that needs any material or service.
A PO is a document sent to vendor by purchaser which is an official request of mentioned material or services. POs
are generally binding on purchaser, though it depends on terms and conditions mentioned in PO.
2. What are different Info Records types?
Different Info Record types are Standard, Consignment, Sub-Contracting and Pipeline.
3. What is a consignment Stock?
The stock supplied by the vendor is in the purchasing companys premises but the company has no liability for the
same. The liability for the company will only arise one the goods are issued from the consignment stock for use.
However, in this case, even before the use, purchasing company can check in system how much stock is lying in
inventory.
4. What is Sub-Contracting cycle in MM?
In Sub-contracting, we send raw material or input material to sub-contractor and then receive the finished goods. A
sub-contracting PO is created with item category L. Input material is sent to vendor for processing with movement
type 541. When GR is done using movement type 101, movement type 543 takes place automatically and takes care
of consumed material.
5. What is meant by Scales in MM?
When we maintain price in Info Records, we can make use of scales. It is used when price of a material is dependent
on quantity purchased. For eg. For 500 pieces of material ABC, price is Rs. 10, however, if the order quantity is more
than 500, price is Rs. 9. Scales are maintained in various master data like info record, quota arrangement etc. from
where scales can be pulled in a Purchase Order.
6. How to Flag a material for deletion?
A material must be flagged for deletion before deleting it using Archive and Delete program. A deletion flag can be set
at client level, plant level or storage location level. Whatever level you flag a material for deletion, it is flagged for
deletion at all corresponding lower levels. Transaction MM06 is used to flag a material for deletion.
7. Can a material be used after flagging it for deletion?
Yes, even after flagging a material for deletion, it can be used till it is actually deleted. It will just trigger a warning
message whenever the material is used. If you want a material to be blocked for any use with immediate effect, you
should use a material status which is there in Basic View 1 for general level or in MRP 1 view for plant level blocking.
8. What is the function of OBYC?
OBYC is t-code used for configuring Automatic Account Posting.
Postings are made to G/L accounts automatically in the case of Inventory Management and Invoice Verification
relevant to Financial and Cost Accounting.
9. What is valuation grouping code related to OBYC?
Valuation grouping code is used to group the valuation area, In SAP, we can have valuation level at Company code
level or at plant level.
General practice is to use the valuation area at plant level, because valuation may differ from one plant to another.
The valuation grouping code makes it easier to set automatic account determination. If we need to define common
account determination for several valuation areas, we can assign same valuation grouping code to all those valuation
areas. We can maintain the valuation group code in OMWD for various valuation areas.
or area of responsibility, to which value movements recorded in Financial Accounting can be assigned. It is usually
derived automatically as it linked to other organizational units. For eg. Business area for a combination of plant and
division is maintained by t-code OMJ7.
29. What is a Cost Center?
Cost Center accounting is used for controlling purposes. It is an organizational unit within a controlling area which
represents a defined location of cost incurrence. For example, any department can be a cost center for recording all
expenses incurred for that department.
30. What is a Profit Center?
Profit Center Accounting evaluates the profit or loss of individual, independent areas within an organization. Profit
center is an organizational unit in controlling to recognize your profit. Profit center is attached to material master at
plant level.
31. How to create Tax calculation procedure in MM?
Tax can be calculated for each line item of a PO separately based on the tax code. Earlier TAXINJ, which is a formula
based tax procedure, was used. Now, TAXINN, which is a condition based tax procedure, is generally used. Tax
procedure contains the condition type and necessary specification for each condition type. Account keys are assigned
to condition types and these account keys determine the G/L to which the tax amount is to be posted(OB40). These
account keys are maintained using t-code OBCN. (All these transactions are under Financial Accounting Global
Settings >> Tax on Sales/Purchases >> Basic Settings). Tax codes are assigned to country codes and country are
linked with tax procedure. Thus, based on tax code, corresponding tax procedure is determined and then calculation
is done based on condition types in that tax procedure.
32. How is scrap material taken care of in sub-contracting?
Scrap can be maintained in BOM as operational scrap, component scrap, By-Product or Co-Product. Common
practice is to maintain scrap as by-product and receive it back along with processed material.
33. How are the by-products taken care of in sub-contracting?
When you create BOM using CS01, we can maintain main components with + ve quantities and By Products / Scraps
with - ve quantities.
When you make Goods Receipt for Subcontracting Purchase Order with 101 movement type, components are
automatically consumed with movement type 543 By Products / Scrap are updated as stock provided to vendor
movement type 545. Now we can receive this scrap/ By product back in companys inventory using movement type
542 (reversal of 541) with t-code MB1B.
34. What are the commonly used movement types in Sub-Contracting process?
541 - Issues of goods from warehouse to subcontractoru2019s stock
542 - Reversals of goods issues from warehouse to subcontractoru2019s stock
543 - Consumption from subcontracting stock (Automatic updating during GR)
MRP Area is an organizational unit for which material requirement planning can be carried out independently. MRP
Areas are of three types:
Plant MRP Area
MRP Areas for Storage Locations
MRP Areas for Subcontractors
After defining MRP areas, MRP area is assigned to material in material master.
39. What is MRP list?
The system creates MRP lists during the planning run. The MRP list always displays the future stock/requirements
situation at the time of the last planning run. The MRP list is stored in the system until it is either deleted manually or
replaced by a new list from a subsequent planning run.
40. What MRP procedures in Consumption Based Planning?
MRP procedures in CBP are as follows:
Reorder Point Procedure
Forecast based Planning
Time phased material planning
41. What is the difference between standard purchasing organization and reference purchasing organization?
Purchasing organization is an organizational unit within Logistics. A standard purchasing organization must be provided
to one or more plants for which it is directly responsible for procurements.
A purchasing organization is assigned to reference purchase organization to avail conditions and centrally agreed
contracts or release orders contained in the assigned reference purchasing organization
42. Why do we use document types in SAP?
Document types are used to distinguish the business transactions to be posted. It also helps in determining the
account types to be posted and subsequent transactions to complete the process. Document types are defined at
client level.
43. Can we receive the goods before the scheduled delivery date in scheduling agreement?
No, we cannot receive the goods before scheduled delivery date. GR can be posted on or after the scheduled dates.
Though, SAP has provided some OSS notes to resolve this. (708973, 741385)
44. Can changes be made in PO once it is released?
This can be controlled by settings given in release indicator in PO release procedure. If it is a significant change, it
will re-trigger approval cycle.
45. What is the use of Info Update indicator in purchasing documents?
This indicator is used to decide if the info record is to be created/updated or not based on this purchasing
document.