SAP MM Flow

MM and FI Intergration T-code OBYC

Some of the Main SAP MM Transactions are:

ME51N Create Requisition ME21N Create Purchase Order MIGO Goods receipt MIRO Create Invoice

SAP MM (Materials Management)

SAP MM (Materials Management) is a module of the SAP Enterprise Resource Planning (ERP) package that is used for Procurement Handling and Inventory Management. The module has two important master data material and vendor. Broadly, the various levels that can be defined for a SAP MM implementation are: Client, Company Code, Plant, Storage Location and Purchase Organization. This is the largest and most complex in all of SAP modules. It can be divided into five major components. There are: materials management, plant maintenance, quality

management, production planning and control, and a project management system. Each is divided into number of subcomponents. SAP Materials management covers all tasks within the supply chain, including consumption-based planning, planning, vendor evaluation and invoice verification. It also includes inventory and warehouse management to manage stock until usage dictates the cycle should begin again. Electronic Kanban/Just-in-Time delivery is supported. Material Management covers the functionality required to purchase goods and services, manage inventory, and inspect incoming materials. The Purchasing function includes creation of requisitions, requisition approval, purchase order generation, and receipt of goods and services. Inventory Management includes issuing and transferring inventory, inventory restocking, and the inventory count and adjustment processes.

The basic of the purchase to pay flow is explained below.

Determination of Requirements In this step, there is a requirement of material or service, which must be procured externally, from the user. The requirement must be recorded as Purchase Requisition (PR) document in SAP MM. Purchase Requisition (PR) is an internal purchasing document in SAP ERP that is used to give notification to responsible department about the requirement of material/service and to keep track of such requirement. Determination of the Source of supply After the PR has been created in the previous step, the responsible department must process it. The buyer of the procurement department must determine the possible sources of supply of the material/service specified in the PR. Vendor Selection If in the previous step, there are some outline agreements or info record documents that can be used as references to create a PO, the buyer can select or choose which vendor that will be appointed to provide the material/service at this time. PO Processing In the previous step, the buyer has selected the vendor which will provide the material/service needed in PR. In this step, the buyer creates a Purchase Order (PO) based on the PR and the reference document (that can be an outline agreement, an info record, or a quotation). PO Monitoring After the PO has been sent to the vendor, the buyer has the responsibility to monitor whether the vendor delivers the material/service at the right time on the right place. Goods Receipt when the vendor delivers the material or perform the service, the responsible person of the company must perform the goods receipt (GR) or service acceptance (SA) transaction. The GR/SA will update the PO history. Invoice Verification After the vendor delivered the material/service; it will send the invoice to the person responsible in the company. Invoice is a formal document issued by a vendor to the

company to request the payment for the material or service that the vendor has already provide to the company according to the terms of payment agreed in the PO. Payment Processing After the Invoice Receipt (IR) transaction has been posted, the vendors account payable will increase and the company must process the payment to that vendor as stated in the terms of payment of the PO. The payment transaction will be performed in FI module. After the payment has been posted, the vendors account payable will be debited and the cash or bank account will be credited.

SAP MM stands for Materials Management and this is part of SAP Logistics includes:

Requisitions Purchase orders Goods receipts Accounts payable Inventory management BOMs Master raw materials, finished goods.

Some of the Main SAP MM Transactions are:

ME51N Create Requisition ME21N Create Purchase Order MIGO Goods receipt a PO MIRO Create Invoice

One of the main areas covered by MM module is Purchasing/Procurement. The purchasing process is initially started when there is a requirement of material/service from a user. If the material/service cannot be obtained from companys internal resource, the responsible person of that company must find the vendor/supplier which can provide it on the required date. The purchasing process is ended when the payment processing to the vendor that supply the material/service has been done.

SAP SD Flow
SD and FI Integration T-code VKOA

SAP SD is simply Sales and Distribution

Its all about selling goods & distributing them to relevant parties and gets the payments for relevant parties. Helps to optimize all the tasks and activities carried out in sales, delivery and billing. Key elements are: pre-sales support, inquiry processing, quotation processing, sales order processing, and delivery processing, billing and sales information system. SAP SD application components fulfills many of the international requirements that supports the sales and distribution activities with functions such as pricing and conditions, customer order processing, delivery monitoring, billing, credit and risk management. The SAP sales and distribution is part of the logistics module that support your customers, starting from quotations, sales order and all the way towards billing the customer. It is tightly integrated with the MM and PP functional modules. It allows companies to input their customer sales price, check for open orders and forecast etc.

The most important basic functional features in the SD module are:

Pricing Availability Check Credit Management Material Determination Output Determination Text Processing

SAP SD stands for Sales and Distribution and this is the module which is used to manage customer-focused activities, from selling to delivery, including

RFQ Sales orders Pricing Picking (and other warehouse processes) Packing Shipping

Some of the main SAP SD transactions are:

VA01 Create Customer Order VL01N Create a Delivery VA03 Display a Order VL02N Change Customer Delivery (F20 is to post a good issue) VA05 List Orders VF01 Create an Invoice

The Order to Cash flow roughly follows the following sequence

A customer orders some items from your company by creating a sales order Your company decides to deliver the items ordered by the customer. This is recorded by creating an outbound delivery document Once the items are available for sending to the customer, you post goods issue which reduces your inventory and puts the delivery in transit. This will create a material document. You will post goods but the material document created will be stored in tables. You will then create shipment document to actually ship the items. You finally create a sales billing document. This will have a corresponding accounting document created that will be in different tables. When customer pays to your invoice, it will directly hit your AR account in FI