Maintenance of Output Condition Records for Purchase Orders

Posted on October 23, 2014 by giscodeguru — 2 Comments

A brief on output Condition Records

Output messages are basically used by the SAP System to remember the preferred mode of communication with the Vendors. Some Vendors may accept Purchase Orders though Fax and others through EDI etc. The output condition records are used to record these output preferences for each Vendor. The Output Message Determination works by the Condition technique which is used in many other areas in SAP such as pricing. The Output Condition records are maintained in the Table NACH.

Below is a snapshot of 2 sample records from the NACH table. When the system finds the

Cl. CondRecNo. Created by Created on U Tab App CTyp VarKey Valid From to SrchTerm Funct Partner Med No. Time
010 0000000021 123456 8/31/1999 B 505 EF Z001 Y0030004 EK 1 0 4
010 0000000022 123456 8/31/1999 B 508 EF Z001 Y0030004156001 EK 1 0 4

CONDITION TECHNIQUE

TNAPR

The following requirements can be satisfied through

  1. Send the Purchase Orders via Fax to all Vendors in Purchasing Organization XXX.
  2. Send the Purchase Orders via Fax to all Vendors in Organization YYY, except a few for whom use EDI as the transfer medium.

Fields worth remembering

  1. NACHA  Medium
  2. KSCHL Ouptut Type
  3. VAKEY Variable Key
  4. KAPPL Application (Purchase Orders/PRs/
  5. SPRAS Language
  6. Dispatch Time

NACHA

Analysis on the Production System

Find the Output types used in the Production system in the past one year by downloading records from the NAST table. Looks for all the records in NAST relevant to the Purchase Organization or Plant. This can be done in two steps

  1. Find all the POs in adate range from table EKKO (SE16, EKKO, Export to Excel)
  2. Copy the PO numbers from Step 1 and paste in OBJKY field of NAST table to get all the records for these POs.

BUSINESS SCENARIO

Consider a case where a business is implementing a different Purchase Order Doc Type ZA. This Purcahse Order has a different Number Range, specifies what item categories can be procured through ZA, different display fields etc. Previously the SAP system had output condition records maintained for Doc Type NB. Now, as part of new implementation, the business decided to duplicate the existing condition records to the new document

MASS UPLOAD USING LSMW

record the screens

Create a structure with field names

Background processing  is faster

View error – If a failure is due to duplicate record, it is not really a big deal

TESTING

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Posted in Master Data, Purchasing

How to pass the SAP Certification exam

Posted on March 15, 2014 by giscodeguru — Leave a comment

As is the case with most competitive exams, SAP certification exam for a procurement associate tests how well a candidate can remember the content in the prescribed manuals ( (TSCM50, TSCM52) .

I have successfully completed my certification exam for a SAP Procurement consultant. The best advice I can offer is to read through all the four manuals thoroughly. Make sure that you attempt the quizzes at the end of each section and understand the answers to the questions.

One thing that came in really handy was the SAP MM Iphone app that costed about $4.99. This was very useful for revision. It basically has the same content as the TSCM manuals but it is easy to quickly revise the topics whenever you find some free time.

A decent site with questions for practice

http://www.daypo.net/test-sap-mm.html#

I wish all of you luck.

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Trial balance Sheet

Posted on February 23, 2014 by giscodeguru — Leave a comment

What is a Trial Balance Sheet?

A trial balance sheet is prepared to check if all the transaction have been recorded correctly. It does this by checking the credit balance vs the debit balance.

Every company maintain a set of accounts also know as the Chart of Accounts. As the business transactions occur they are noted down as the journal entries and later moved to the respective Account book. For example, when a Retail Store such as Marshals buys shoes from Nike on credit to sell them at their store, the following journal entry is recorded –

Purchase A/c DR       XXXX USD                   (Purchase Account Debited)
Sundry Creditors A/C  CR      XXXX USD           (Supplier-Nike Account Credited)  

Similarly, Marshals buys trading goods, sells trading goods, pays salaries,, buys furniture, pays the bills. Let us consider a few transactions that happen in a real business and pass the Journal entries, open the books and post them to the Ledger accounts, close the ledger account and prepare the trial balance (For a better understanding of these steps google for “Accounting Cycle”)

  1. Mr X Started Business with 100000 USD
  2. Bought goods for resale 50000 USD
  3. Paid rent 20000 USD
  4. paid Other bills 5000 USD
  5. Bought Furniture 10000 USD
  6. Paid Salaries 10000 USD

The Journal Entries for the following business transactions would be ( To understand this better google for “Traditional Classification of Accounts” and “Rules for Debit and Credit of Traditional Accounts”)

Cash A/c DR                  100000 USD                   
Capital A/C  CR              100000 USD

Purchase A/c DR               50000 USD                   
Cash  A/C    CR               50000 USD

Rent A/c DR                   20000 USD                   
Cash A/C  CR                  20000 USD


 
 

DEBIT TRIAL BALANCE
CREDIT TRIAL BALANCE

Work out problems – one easy and one tough

Posted in Financial Accounting

Understanding ABC Analysis (Inventory Control)

Posted on January 17, 2014 by giscodeguru — Leave a comment

According to ABC analysis, it is economical to stock more low-value items than high-value items. This is demonstrated with the example below. Assume that the ordering cost is the same for all kinds of items – A, B & C. Observe that the inventory holding costs are predominantly lower in the Scenario 2 than Total inv. costs in Scenario 1. Keeping the number of orders the same, Scenario 2 stocked less of the high-value items and ordered them more frequently. This helps in maintaining a low inventory value.

Scenario 1
Item No. Annual consumption Value Number of Orders Value per Order Avg Inv. (0+Ann. Consumption Value/2)
A 60000 4 15000 7500
B 4000 4 1000 500
C 1000 4 250 125
8125
Scenario 2
Item No. Annual consumption Value Number of Orders Value per Order Avg Inv. (0+Ann. Consumption Value/2)
A 60000 8 7500 3750
B 4000 3 1333.33 666.67
C 1000 1 1000 500
4916.67
Posted in Inventory Control

SAP MM – Business Scenarios

Posted on December 22, 2013 by giscodeguru — Leave a comment

A business in Mumbai procures material from Delhi and Calcutta. The client wants to maintain two different number ranges to diferentiate the Delhi Vendor POs from the Calcuatta Vendor POs. How can this be accomplished?

Create a custom document type and assign a number range of choice to this. Always use this document to procure material from the Delhi vendor.  Use the default PO document to procure material from the Calcutta vendor.

 

Returnable Purchase Orders – Purchase orders for which goods receipt or Invoice posting is already done are classified as Returnable Purchase orders if some of the line items are to be returned back to the vendor. This

 

How to remove Quality Management for a newly created movement type  – This can be done through OMJJ

How to view all the open Purchase orders. – MIGO and search by Vendor/ Supplying Plant

Posted in SAP Implementation

Brief overview of Outline agreements by Rajen Patel

Posted on December 15, 2013 by giscodeguru — Leave a comment

Copied from

http://scn.sap.com/community/erp/logistics-mm/blog/2012/10/03/brief-overview-of-outline-agreements

Posted by Rajen Patel in SAP ERP – Logistics Materials Management (SAP MM) on Oct 3, 2012 5:33:29 AM

inShare

What is Outline Agreements? Where it fits in purchasing process?

The outline purchase agreement is often referred to as a blanket or umbrella purchase order. It is basically a long-term agreement between the purchasing department and vendor for material or services for a defined period of time. The purchasing department negotiates with the vendor a set of terms and conditions that are fixed for the period of agreement.

wh.JPG

Which business requirements lead to use of outline agreement?

  1. When purchasing department want to setup long term relationship with vendor for specific group of materials or services
  2. To negotiate binding conditions for purchasing (i.e. price, quantity, discounts etc.) without actually releasing purchase order
  3. Using pre-negotiated offer during day-to-day purchasing
  4. Increase speed of actual purchasing to satisfy actual requirements
  5. Provides better monitoring and control of actual release of purchase order against offer

Structure of an Outline Purchase Agreement

An outline purchase agreement consists of the following elements:

  • Document header: contains information relating to the entire agreement. For example, the vendor information and header conditions are in the document header.
  • Items: containing the information specific to the relevant material or service. For example:
  • Statistics on ordering activities for the item
    • Quantity or price of the item
    • Conditions, such as quantity discounts and surcharges

Contracts v/s Scheduling agreement

In SAP MM Purchasing, such agreements are subdivided into “contracts” and ” Scheduling agreements.”

Contracts:

  • Longer- term contract with subsequent issue of release orders
  • Different POs can be released for same contract
  • Mainly used for frequent non-predictable requirements e.g. Purchasing office supplies

Scheduling agreement

  • Longer-term scheduling agreements and delivery schedules
  • Same scheduling agreement number is used with different release calls
  • Mainly used for repetitive/predictable requirements e.g. purchasing spare parts of a large fleet
  • Can be tightly integrated with MRP

Contract

A contract is a longer-term agreement with a vendor (one of the two forms of “outline agreement” in the SAP system) to supply a material or provide a service for a certain period of time. A number of different terms may be used for this concept in purchasing literature, including “blanket order”, “blanket contract”, “systems contract” and “period contract”.

The contract does not contain specific delivery dates or the individual delivery quantities. These are specified subsequently in release orders issued against the contract when customer requires them.

Contract types

When creating a contract, you can choose between the following contract types:

  1. Value contract (MK) : The contract is regarded as fulfilled when release orders totalling a given value have been issued. Use this contract type when the total value of all release orders should not exceed a certain amount.
  2. Quantity contract (WK) : The contract is regarded as fulfilled when release orders totalling a given quantity have been issued. Use this contract type when the total quantity to order over the duration of the contract is known.

qq.JPG

Ways of Creating Contracts

Contract can be created in one of the following ways:

  1. Manually: Enter all the contract data manually.
  2. Using the referencing technique: Create a contract by referencing

a.          Purchase requisitions

b.          RFQs/quotations

c.          Other contracts

Characteristics of contract:

  • Contracts are outline agreements. They do not contain details of the delivery dates for each of the items.
  • To inform vendors of which quantity you need for which date, you enter contract release orders for a contract. A release order is a purchase order that references a contract.
  • If a purchasing information record with conditions exists for the material and the vendor, the system automatically suggests the net price according to these conditions when you create the contract item.
  • Contract validity period is defined in the contract header as the validity period
  • For each item in a quantity contract, you define the target quantity and purchase order conditions.

Item categories in contracts

Item Category

M – The material is unknown

W – Value and quantity are unknown

D – Procuring an external service

K – Consignment material is involved

L – Subcontracting material is involved

  • Item category M is recommended for similar materials with same price but different material numbers. For example, contract for copier paper.
  • Item category W is recommended for material belonging to the same material group but with different prices. For example, contract for office supplies.
  • Item category W can be used only in value contracts.
  • Item category M and W are not allowed in contract release orders.
  • Item category D is used for services contracts.

ic.JPG

  • Account assignment category, ‘U’ unknown can be used in contracts. In this case, cost center will be determined at time of creating release order.
  • The account assignment category, ‘U’ is denied in contract release orders. You have to replace the account assignment category with a valid account assignment category.

Processing contracts

  • Contract release orders are purchase orders that are created with reference to contract.
  • The release order documentation (i.e. the quantity released until now, and the open quantity) is automatically updated when you create a contract release order. This can be used for monitoring the contract.
  • The release order document is contained in the statistics for contract item.
  • You can enter source of supply in the purchase requisition. This ensures that the outline agreement is referenced when the purchase requisition is converted into a purchase order.
  • Contract release order can be created with or without reference to a purchase requisition.
  • The release order documentation comprises details of ordering activity relating to a contract. The system supplies the following data on each release order:

a.          Number of contract release order

b.          Order date

c.          Order quantity

d.          Order value

e.          Quantity released to date

f.          Target quantity

g.          Open target quantity

  • You can list all contracts that are due to expire in the immediate future. The analysis is carried out using the Target value and Total value released fields in the contract header, based on suitable selection parameters

Centrally Agreed contract

The centrally agreed contract allows a central purchasing organization to create a contract with a vendor that is not specific for just one plant. In this way, the purchasing organization can negotiate with a vendor by leveraging the whole company’s requirements for certain materials or services.

  • Contract items can relate all plants covered by a purchasing organization
  • All plants of a purchasing organization can order against a centrally agreed contract
  • Using the plant conditions function, the centrally agreed contract allows you to stipulate separate prices and conditions for each receiving plant. For example, different transport costs.

ca.JPG

SAP Transactions

  • Create value contract for material group (WK) – ME31K
  • Change contract – ME32K
  • List display contract – ME3L
  • Monitor contracts – ME80RN

References:

1.          help.sap.com

2.          SAP MM:Functionality and Technical Configuration, SAP Press

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Intro to SAP FI/CO

Posted on December 13, 2013 by giscodeguru — Leave a comment

Classify Accounts

  1. Personal Accounts – vendors, customers, trading partners, Capital accounts, bank accounts
  2. Real Accounts – Assets accounts, Cash accounts
  3. Nominal Accounts – expenses/losses, incomes/gains

Rules followed for accounts

  1. Personal accounts – Dr(Debit) the receiver and Cr(Credit) the giver
  2. Real Accounts –       Dr what comes and Cr what goes out  (Cash account credited when buying goods)
  3. Nominal accounts – Dr all expenses/losses and Cr all incomes /gains

BOOKS of ACCOUNTS

  1. Journal – Primary book of accounts
  2. Cash Book – 2-Column Cash Book and 3-Column cash book
  3. Purchase Register
  4. Purchase Returns Register
  5. Sales Register
  6. Sales Returns register
  7. Bills Payable
  8. Bills Receivable
  9. Ledger – Principal book of accounts – Used to maintain the summary and classification of G/L accounts used in the business

Definition of ‘Accounting Cycle’

The name given to the collective process of recording and processing the accounting events of a company. The series of steps begin when a transaction occurs and end with its inclusion in the financial statements. The nine steps of the accounting cycle are:

  1. Collecting and analyzing data from transactions and events.
  2. Putting transactions into the general journal.
  3. Posting entries to the general ledger.
  4. Preparing an unadjusted trial balance.
  5. Adjusting entries appropriately.
  6. Preparing an adjusted trial balance.
  7. Organizing the accounts into the financial statements.
  8. Closing the books.
  9. Preparing a post-closing trial balance to check the accounts.

Also known as “bookkeeping cycle”.

Copied from http://www.investopedia.com/terms/a/accounting-cycle.asp

Enterprise Structure Settings

  1. Controlling Area
  2. Cost element accounting (CEA)
  3. Cost Center Accounting (CCA0
  4. Internal Order Accounting (IOA)
  5. Profit center Accoutning (PCA)
  6. FI-MM Integration
  7. FI-SD Integration
  8. CO-PC or CO-PCC (product Costing)
  9. CO-PA (Profitability Analysis)

Implementation

  1. Green Field
  2. Roll-out Project/Secondary Implementation
  3. Up-gradation Process
  4. Support Maintenance – High Medium Low tickets; Ticket Management done using “IBM Manage Now” or remedy 100; Super Users are mediators that facilitat the implementation issues between the Client Company and SAP

Costing Cycle

 

Recommended Book –  Modern Accounting by Hanif & Mukherjee

Posted in Financial Accounting

Purchasing Contracts

Posted on April 30, 2013 by giscodeguru — Leave a comment

Mr. Thomson enjoys his hot oil Massage 

A rubber products company called RUBCOM makes rubber based products. RUBCOM makes rubber linings used in the Automobiles and gaskets used in pressure cookers. RUBCOM has manufacturing plants situated at Gurgaon and Manesar for Maruti and two more plants at Wagle Estate Thane (Mumbai) and Jaunpur (UP) that make gaskets for pressure cookers made by Hawkins. RUBCOM has many purchasing organizations locally and one central Purchasing organization as shown in the chart below. RUBCOM gets all its rubber from Kerala.

SAP MM- COntracts

It is economical for RUBCOM to group together all its raw-material needs. This way it can negotiate a better price with Rubber supplier.So RUBCOM entered into a contract with Thomson Rubbers in Kerala to buy 3000 tonnes of rubber for the next three years. This is good for Thomson Rubbers because Mr. Thomson is assured of his rubber sale for the next three years (validity period) and doesn’t have to run around looking for customers. Instead he can relax at Punnamada Backwater Resorts getting a hot oil massage .

Different types of Contracts

  • Value Contracts
  • Quantity Contracts

SAP HELP – Contracts

LAB

Create a quantity contract with the central Purchasing organization and using this contract to make Purchase orders for a Plant specific Purchasing organization

Prerequisites for creating Contracts

  1. Create the material master common to all the different plants
  2. Create a vendor common to all the different purchasing organisations
  3. Create Purchasing organization of different kinds by making the necessary assignments – Plant-specific, Cross-Plant , Cross-Company, Standard and Referential  (Refer to the article)  

 

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Stock Transfer Order

Posted on April 29, 2013 by giscodeguru — Leave a comment
What is Stock Transfer OrderWhat is Stock Transfer Order? What are the IMG configurations? How do you create a STO?by: Jupalli Samatha

The following steps have to be followed in order to configure stock transport order between two plants.

1. Create a vendor for the Company code of the receiving plant using account group 0007 via T-Code XK01.
2. In the purchasing data view assign the supplying plant and the schema group.
3. Create customer with the sales area of the vendor.
4. The shipping conditions, the delivering plant and the transportation zone determine the route in the STO.
5. In the pricing procedure determination relevant to the STO assign document pricing procedure and customer pricing procedure to get the pricing in the invoice.
6. Maintain condition records for pricing condition.
7. Maintain carrier as a partner in the customer master.
8. In OMGN select the supplying plant and assign the company code and sales area. Similarly select the receiving plant and assign the company code and sales area (The company code to which the plant is assigned to).
9. Assign the delivery type and checking rule to the document type.
10. And finally, assign the purchasing document type to the supplying plant and the receiving plant.
11. Create the STO using T-Code ME 21N and save.
12. Check for release strategy if any and release using T-Code ME 28.
13. Create delivery in background using VL10G.
14. If delivery is created, it is an indication of correct configuration and master data creation.

Stock transfer between two plants in different company codes is known as inter company stock transfer.
1. Material should be maintained in both supplying and receiving plant MM01
2. Stock should maintain only in supplying plant MB1C
3. Create receiving plant as a customer in supplying plants company code and sales area XD01
4. Assign this customer number in receiving plant details OMGN
5. Assign supplying sales area in supplying plant details OMGN
6. Assign delivery type NB for in combination of supplying/ receiving plants.

Create STO ME21N
As it is normal there in the item details were should get shipping date i.e. customer number

Go for Delivery VL10B
Shipping point *****
Select PO go for execute
then select the delivery then go for delivery …………create delivery,,,, delivery number generated.

Goods Issue VL02
Delivery doc **********
Click on picking
enter the picking qty
Click on PGI

In the mean time check in the PO history you will get the details

Goods receipt MIGO
In Stock overview, the stock will be updated….

Copied from http://www.gotothings.com/sd/what-is-stock-transfer-order.htm
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