SAP: MM- Inventory Management

TABLE OF CONTENT

18. Inventory Management Overview ………………………………………………………………..

18.1. Goods movement ……………………………………………………………
18.2. Types of Goods movement ……………………………………………………………
18.2.1. Goods Receipt (GR) ……………………………………………………………
18.2.2. Goods Issue (GI) ……………………………………………………………
18.2.3. Stock Transfer……………………………………………………………
18.2.4. Transfer Posting……………………………………………………………
18.3. Result of Goods movement. ……………………………………………………………
18.4. Document concept: ……………………………………………………………
18.5. Document type in Inventory management……………………………………………
18.6. Movement Type ……………………………………………………………
18.7. MIGO Transaction code ……………………………………………………………
19. Tcodes in Inventory Management ……………………………………………………………
20. Inventory Management IMG settings ……………………………………………………………
20.1. Plant Parameters ……………………………………………………………
20.2. Define Number Assignment for Material and Phys. Inv. Docs ……………
20.3. Define Number Assignment for Accounting Documents ………………………………
20.4. Before GR and After GR……………………………………………………………
21. Goods Receipt ………………………………
21.1. Goods Receipt - Un-restricted stock type………………………………
21.2. Goods Receipt - QI stock type………………………………
21.3. Goods Receipt - Blocked stock type………………………………
21.4. Goods Receipt - Blocked………………………………
21.5. Release of GR-Blocked stock………………………………
21.6. Goods Receipt – Others………………………………
21.7. GR others - Initial stock entry - by using MB1C………………………………
21.8. GR others - Initial stock entry - By using MIGO………………………………
21.9. GR others - W/o PO………………………………
21.10. GR - Single line item - partial quantities in to multiple stock types……………
22. Stock transfer………………………………
22.1. Intra Company Stock transfer ( With in the Co_cd ) ………………………
22.1.1. Str. Loc. - to – Str. Loc. ………………………………
22.1.1.1. One step method………………………………
22.1.1.2. Two step method………………………………
22.1.1.2.1. Rem. from str. Loc . ………………………………
22.1.1.2.2. Placing into str. Loc . ………………………………
22.1.2. Plant - to - Plant………………………………
22.1.2.1. One step method………………………………
22.1.2.2. Two step method………………………………
22.1.2.2.1. Rem. from str. loc…
22.1.2.2.2. Placing into str. loc…
22.1.3. Inter Company Stock transfer (Between Co_cd) ………………………………
22.1.3.1.1. Co_cd - to Co_cd………………………………
23. Transfer Posting …………………………
23.1. Un-restricted to Blocked …………………………
23.2. Blocked to QI stock type …………………………
23.3. QI Stock type to U/R …………………………
24. Goods Issue: …………………………
24.1. Goods Issue - (To Cost Center) …………………………

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25. Logistic Invoice Verification ……………………………………………..

25.1. IMG settings: LIV …………………………………………………………
25.2. Maintain Number Assignments for Accounting Documents ………………………………
25.3. Maintain Number Range Intervals for Invoice Documents ………………………………
25.4. Tax settings: LIV…………………………………………………………
25.4.1. Check Calculation Procedure …………………………………………………………
25.4.2. Assign Country to Calculation Procedure ………………………………………………
25.4.3. Define Tax Codes for Sales and Purchases ………………………………………
26. Logistic Invoice Verification ……………………………………………
26.1. Check Points …………………………………………………………
26.2. How to do the Invoice verification …………………………………………………………
26.3. Observations …………………………………………………………

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Inventory Management
Inventory Management Overview

 Inventory Management is a part of a Material Management module.

 Inventory management means managing the material stock by maintaining the proper records
or material movements.
 Inventory management works on two ways
o On Qty. updating (at store location)
o On Value updating (at A/c)
 Inventory Management is fully integrated with PP, SD, QM, FI/CO

Goods movement

There will be a transaction resulting in a change in stock.

Types of Goods movement

 Goods Receipt (GR)

 Good Issue (GI)
 Stock Transfer
 Transfer posting

Goods Receipt (GR)

It is a goods movement, with which the receipt of the goods from vendor or production is posted.
A good receipt leads to an increase in warehouse stock

Goods Issue (GI)

It is also a good movement, with this

 Material with drawl

 Material Issue
 Material consumption
 Shipment of goods to a customer - is posted

A goods issue leads to a reduction in warehouse stock

Stock Transfer

 It is also one more goods movement

 It means removal of material from one storage location (or plant) to other storage location (or
other plant) with in or between company codes

Transfer Posting

 It is a general term for changes in stock type or stock category or stock status of a material
 Transfer posting from material to material
 Release from quality inspection stock

[Note: It is irrelevant whether the posting occurs in connection with Phy. movement or not]

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Result of Goods movement.

When you enter a goods movement

 A Material document is created

 If the movement is relevant for financial a/c accounting document will also be created
 Stock quantities of the material are updated
 Stock value of the material master is updated
 Depending on the movement type additional updates are also carried out like in case of good
issue for cost center the consumption values of the items are also updated.

Document concept:

 The account principle of „No posting without document” is applies even IT based Inventory
management system
 A document is a proof that a transaction involving stock changes has taken place
 When a good movement is posted, a Material Document is generated as a proof of the
movement.
 If the movement is relevant to the financial accounting (i.e. if it is leads to an update of G/L
accounts) an accounting document will be generated parallel to the material document.

Material Document consists of Accounting Document consists of

Document Header Document Header
Posting date posting date
Name of he person who created Document currency
At item level At item level
Quantity G/L Account no
Storage location Associated amount posted
Plant, Movement type

Note: The Material and Accounting Documents are independent documents

Document type in Inventory management:

WA – Goods Issue
WE – Gross Goods Receipt
WN – Net Goods Receipt
WI – Physical Inventory Document
WL - Transfer posting

Movement Type

 It is a three digit identification key

 In order to differentiate various goods movements movement type is used
 Movement type has an important control function in Inventory Management
o Updating the quantity fields
o Updating the stock and consumption accounts
 Determining which fields are to be displayed during the entry of a document in a system

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 Example of Movement types are

Movement type Description of the goods movement

101 Good receipt for PO
103 Good Receipt + Blocked stock (GR Blocked)
105 Releasing from GR blocked
122 Return to vendor/supplier
124 Return to vendor from blocked stock
201 Goods Issue for a cost center
301 Stock transfer from plant to plant with 1st step
303 Stock transfer from plant to plant with 2 step - issue
305 Stock transfer from plant to plant with 2 step - receiving

Note1: Movement type + 1 = reversal

Note2: for 121 – no reversal movement type

MIGO Transaction code

It is meant for

 Goods Receipt
 To display of material document
 Goods Issue
 Releasing of GR Blocked stock
 Place in storage
 Removal from storage
 Cancellation of material document

Tcodes in Inventory Management

1. Material documents
a. MB51 – List of Material documents
b. MR51 – List of Accounting documents
2. Stock
MMBE – Stock Overview MB52 -- Warehouse Stock
MB53 – Plant Stock Availability MB5B – Stock between Posting Dates
MB5T – Stock in Transit MBLB – Stock with Subcontract Vendor
ME2o -- Stock provided to the vendor MB50 -- Total Stock all materials
MB5S -- List of GR/IR balances

3. MB1A – Goods Issue

4. MB1B – Transfer Posting
5. MB1C -- Good Receipt

6. Layouts:
a. ME9F -- PO Printout
b. MB90 -- Output from Goods Movements
c. ME9A -- RFQ Printout
d. ME9E -- Schedule Agreement Printout
7. Reports:

a. ME80FN – General Analysis PO Report

b. MC48 -- Current Inventory
c. MC45 -- Consumption Value

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Inventory Management IMG settings

1. Plant Parameters

SPROIMG Materials Management Inventory Management and Physical Inventory Plant

Parameters
 System displays list of plants with their parameters
 Check your plant entry in this table
o click position
o Enter Plant = XPL1
o If your plant entry available
 No need to do any thing
o Else
 Select SAP std. Plant 0001
 Click copy as
 Your XPL1 Plant parameters
o Click saves
 repeat the same for your plant 2

2. Define Number Assignment for Material and Phys. Inv. Docs (OMBT)

SPROIMGMaterials Management Inventory Management and Physical Inventory Number

Assignment Define Number Assignment for Material and Phys. Inv. Docs

 Click pencil marked group button

 On Menu barGroupsinsert or F6

o Enter Grp. name text as 'XMOT GR NR grp'

Year Frm. To Currno. Ext
2015 XXX XXX. 0
o Click save
 Assign WE Doc type to your NR grp
o Double click WE color of WE change into blue
o Check the Check box of your GR NR grp.
 click 'Element/group' button on application tool bar or F5
 Save and transport it manually
 Repeat the same steps for WA and PI docs

3. Define Number Assignment for Accounting Documents (OMBA)

SPROIMGMaterials Management Inventory Management and Physical Inventory Number

Assignment Define Number Assignment for Accounting Documents

 click 'Financial A/c doc types' button

 System displays the list of Doc types
 click position
 enter your doc type = WE
 Select WE doc type
 Click details button on appl. tool bar
 System displays WE doc Details
 Click 'Number range information' button
 Enter your company Code….. XMOT
 Click Pencil marked interval button
 System displays a list Number range for every doc grp name year wise
 Check for an entry of Number range
o 50 with year 2013
o If this entry not available
 Click + interval

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 Create 50 with year 2013 a number range

o Else
 no need to do any thing
 Click save and transport it manually

3. Set Tolerance Limits (OMC0)

SPROIMGMaterials Management Inventory Management and Physical Inventory Goods

Receipt Set Tolerance Limits

SAP std. Tolerance keys are three

B1 Order price qty. variance (GR)/E-MSG
B2 Order price qty. variance (GR)/W-MSG
VP Moving average price variance
 In this steps SAP provides The 3 TL keys for every co_cd in this table
 Check Your Co_cd is having the above 3 TL Keys or not?
o Click Position
o Enter Company Code ASMT
o If your co_cd does not have these 3 TL keys
 Copy the same from existing SAP Std. Co_cd
o Else
 No need to do any thing

Before GR After GR
In Material Master Record (MM03) In Material Master Record (MM03)
- No new View will be Created - A new View Storage loc. will be Created
No Material and A/c Documents will be created one Material and one A/c Documents will be
created
No Updates in Stock status (MMBE) Updates in Stock status (MMBE)will be done
By increasing the Quantity of the material
In Purchase Order (ME23N) In Purchase Order (ME23N)
- In Header Data – Status tab: - In Header Data – Status tab:
Ordered Qty. – X Nos. Ordered Qty. – X Nos.
Delivered Qty. – 0 Nos. Delivered Qty. – Y Nos.
Still to be delivered Qty. – X Nos. Still to be delivered Qty. – (X-Y) Nos.
- In Item Details - In Item Details
Delivery Tab Delivery Tab
 No check on Deliver completion check on Deliver completion indicator
indicator (If the full Qty. received)
- No New Tab: PO History will be created - New Tab: PO History will be created with GR
updated details

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Goods Movements
Goods Movements are 4 types
A. Goods Receipt (GR)
B. Goods Issue (GI)
C. Stock Transfers (ST)
D. Transfer Postings (TP)

A) Goods Receipt:
Goods Receipt can be made in the following
ways
 Goods Receipt - Un-restricted stock type
 Goods Receipt - QI stock type
 Goods Receipt - Blocked stock type
 Goods Receipt - Blocked
 Release of GR-Blocked stock
 Goods Receipt – Others
 GR others - Initial stock entry - by using
MB1C
 GR others - Initial stock entry - By using
MIGO
 GR others - W/o PO
 GR - Single line item - partial quantities
in to multiple stock types

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B Stock transfer

Stock Transfer are two types

1) Intra Company Stock transfer ( With in the Co_cd )
a) Str. loc - to – Str. loc
i) One step method
ii) Two step method
a) Rem. from str. loc.
a) Placing into str. loc.
b) Plant - to - Plant
i) One step method
ii) Two step method
a) Rem. from str. loc.
a) Placing into str. loc.
2) Inter Company Stock transfer ( Between Co_cd )
c) Co_cd - to Co_cd
i) W/o SD w/o billing
ii) With SD w/o billing
iii) With SD with billing

C) Transfer Posting:

Un-restricted to Blocked
Blocked to QI stock type
QI Stock type to U/R

D) Goods Issue:
Goods Issue - (To Cost
Center)

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 SAP: MM- Inventory Management

Goods Movements
Goods Movements are 4 types
E. Goods Receipt (GR)
F. Goods Issue (GI)
G. Stock Transfers (ST)
H. Transfer Postings (TP)

A) Goods Receipt:
Goods Receipt can be made in the following ways
 Goods Receipt - Un-restricted stock type
 Goods Receipt - QI stock type
 Goods Receipt - Blocked stock type
 Goods Receipt - Blocked
 Release of GR-Blocked stock
 Goods Receipt – Others
 GR others - Initial stock entry - by using MB1C
 GR others - Initial stock entry - By using MIGO
 GR others - W/o PO
 GR - Single line item - partial quantities in to multiple stock types

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1 Goods Receipt - Un-restricted stock type

User Entries System Response Observations
In Header data
Use Tcode = MIGO 1. A material document will be created
2. An accounting doc will create & trigger below
Action: Goods Receipt a/cs
Sub action: Purchase Order G/L Accounts Description
300000 Inv.- Raw Mate
Mvt: 101 +ve
191100 Goods Rcvd/Inv.
Press enter System validate your entries -ve
Enter PO No: xxxx 3. Stock Status: U/R stock qty
Delivery Note : xx/xx/xx Plant: Increased
Bill of Lading xx/xx/xx Str. Loc: Increased
Click execute button or F8 System pull relavent PO data
In Item overview or item details
Check Item OK button either
Enter qty in case partial GR
Stock Type : Un-restricted
(default)
Click Check button on appl. tool
bar System validates our entries
displays a message as 'Doc OK'
Click save System will Post the document

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2 Goods Receipt - QI stock type

User Entries System Response Observations
In Header data
Use Tcode = MIGO 1. A material document will be created
Action: Goods Receipt 2. An accounting doc will create & trigger below a/cs
Sub action: Purchase Order G/L Accounts Description
Mvt: 101 300000 Inv.- Raw Mate +ve
Press enter System validate your entries 191100 Goods Rcvd/Inv. -ve
Enter PO No: xxxx 3. Stock Status: QI stock qty
Delivery Note : xx/xx/xx Plant: Increased
Bill of Lading xx/xx/xx Str. Loc: Increased
Click execute button or F8 System pull relavent PO data
In Item overview or item details
Check Item OK button either
Enter qty in case partial GR
Stock Type : QI stock
Click Check button on appl. tool bar System validates our entries
displays a message as 'Doc
OK'
Click save System will Post the document

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3 Goods Receipt - Blocked stock type

User Entries System Response Observations
In Header data
Use Tcode = MIGO 1. A material document will be created
Action: Goods Receipt 2. An accounting doc will create & trigger below a/cs
Sub action: Purchase Order G/L Accounts Description
Mvt: 101 300000 Inv.- Raw Mate +ve
Press enter System validate your entries 191100 Goods Rcvd/Inv. -ve
Enter PO No: xxxx 3. Stock Status: Blocked stock qty
Delivery Note : xx/xx/xx Plant: Increased
Bill of Lading xx/xx/xx Str. Loc: Increased
Click execute button or F8 System pull relavent PO data
In Item overview or item details
Check Item OK button either
Enter qty in case partial GR
Stock Type : Blocked
Click Check button on appl. tool bar System validates our entries
displays a message as 'Doc OK'
Click save System will Post the document

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4 Goods Receipt - Blocked : Due to administrative reasons some times company will receive the material
inside the premises, however not taken into the str loc
User Entries System Response Observations
In Header data
Use Tcode = MIGO 1. A material document will be created
Action: Goods Receipt 2. No accounting doc will create so no GL a/cs
Sub action: Purchase Order G/L Accounts Description
Mvt: 103 -GR wrt PO into GR Blocked - -
Press enter System validate your entries - -
Enter PO No: xxxx 3. Stock Status: GR Blocked stock qty
Delivery Note : xx/xx/xx Plant: Increased
Bill of Lading xx/xx/xx System will block the Str loc field Str. Loc: No change
Click execute button or F8 System pull relavent PO data
In Item overview or item details
Check Item OK button either
Enter qty in case partial GR
Stock Type : - Blank filed-
Click Check button on appl. tool bar System validates our entries
displays a message as 'Doc OK'
Click save System will Post the document

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5 Release of GR-Blocked stock : Once the Material has been blocked under GR Blocked action,
we can release the same by using Two methods
User Entries System Response Observations
In Header data
Method - I
Use Tcode = MIGO 1. A material document will be created
Action: Goods Receipt 2. An accounting doc will create & trigger below a/cs
Sub action: Purchase Order G/L Accounts Description
Mvt: 105 -Rel of GR blocked stock 300000 Inv.- Raw Mate +ve
Method - II 191100 Goods Rcvd/Inv. -ve
Use Tcode = MIGO 3. Stock Status: U/R or QI or Blocked
Action: Rel GR Blocked Plant: Increased
Sub action: Material Doc No Str. Loc: Increased
MVT field will disappear
Press enter System validate your entries
Enter PO No: xxxx
Delivery Note : xx/xx/xx
System will block the Str loc
Bill of Lading xx/xx/xx field
Click execute button or F8 System pull relavent PO data
In Item overview or item details
Check Item OK button either
Enter qty in case partial GR
Stock Type : U/R or QI or Blocked
Click Check button on appl. tool bar System validates our entries
displays a message as 'Doc OK'
Click save System will Post the document

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6 Goods Receipt - Others

There are two types of GR others - 1. GR - Initial stock entry, 2. GR - w/o PO
GR- Others Initial stock entry: In general this action will be performed only before Go-live of SAP
It does not require any PO. It is to update the stock in Stores we use this method
GR others - Initial stock entry are again can be done in two ways
a) By using MB1C b) By using MIGO
a) GR others - Initial stock entry - by using MB1C
User Entries System Response Observations

Use Tcode = MB1C 1. A material document will be created

In Initial Screen 2. An accounting doc will create & trigger below a/cs
Mvt: 561 initial stock entry - U/R G/L Accounts Description
Plant : xxxx 300000 Inv.- Raw Mate +ve
Storage Location : XX 399999 Inventory taking -ve
Press enter 3. Stock Status: U/R stock qty
In Second Screen Plant: Increased
Material No xxxxx Str. Loc: Increased
Qty xxxx
Press enter System validate your entries
Click save System will Post the document

Note: 1
GR - Initial stock entry - QI stock type
Enter Mvt: 563 initial stock entry - QI, Rest of the procedure is same as above

Note: 2
GR - Initial stock entry - Blocked stock type
Enter Mvt: 565 initial stock entry - Blocked, Rest of the procedure is same as above

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6 b) GR others - Initial stock entry - By using MIGO

In this step at a time you can enter all materials with different stock type into warehouse as initial stock entries

User Entries System Response Observations

In Header data
Use Tcode = MIGO 1. A material document will be created
Option : Goods Receipt 2. An accounting doc will create & trigger below a/cs
Sub option : Others G/L Accounts Description
Mvt: 561 300000 Inv.- Raw Mate +ve
Press enter System validate your entries 399999 Inventory taking -ve
In Item overview or item details 3. Stock Status: U-R/QI/Blocked stock qty
Material No xxxxx/xxxxx/xxxxx Plant: Increased
Qty xxxx/xxx/xxx Str. Loc: Increased
Mvt: 561/563/565
Press enter
Click save System will Post the document

Note: 1
Mvt: 563 initial stock entry - QI
Mvt: 565 initial stock entry - Blocked

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 SAP: MM- Inventory Management

6 c) GR others - W/o PO
This is use full after go live time

User Entries System Response Observations

In Header data
Use Tcode = MIGO 1. A material document will be created
Option : Goods Receipt 2. An accounting doc will create & trigger below a/cs
Sub option : Others System automatically chooses G/L Accounts Description
Press enter the MVT 501 300000 Inv.- Raw Mate +ve
System validate your entries 400020 Raw materials consum -ve
In Item overview or item details 3. Stock Status: U-R/QI/Blocked stock qty
Material No xxxxx/xxxxx/xxxxx Plant: Increased
Qty xxxx/xxx/xxx Str. Loc: Increased
Mvt: 501/503/505
Press enter
Click save System will Post the document

Note: 1
Mvt: 503 w/o PO - QI
Mvt: 555 w/o PO - Blocked

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7 GR - Single line item - partial quantities in to multiple stock types

User Entries System Response Observations

In Header data
Use Tcode = MIGO 1. A material document will be created
Option : Goods Receipt 2. An accounting doc will create & trigger below a/cs
Sub option : Purchase order G/L Accounts Description
Press enter System validate your entries 300000 Inv.- Raw Mate +ve
Enter Purchase Order ( 3 times) 191100 Goods Rcvd/Invoice R -ve
In Item overview or item details 300000 Inv.- Raw Mate +ve
Qty xxxx/xxx/xxx (partial qty) 191100 Goods Rcvd/Invoice R -ve
Stock types : U-R/QI/Blocked 300000 Inv.- Raw Mate +ve
Press enter System displays warning msgs. 191100 Goods Rcvd/Invoice R -ve
about deficit qty
Click save System will Post the document 3. Stock Status: U-R/QI/Blocked stock qty
Plant: Increased
Str. Loc: Increased

Note: Single GR -Multiple POs - Single Vendor - Possible

Note: Single GR -Multiple POs - Multiple Vendor - NOT Possible

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B Stock transfer
Transferring of Stock from one organizational unit to other organizational unit can be called as Stock Transfer
Stock Transfer are two types
1) Intra Company Stock transfer ( With in the Co_cd )
a) Str. loc - to – Str. loc
i) One step method
ii) Two step method
a) Rem. from str. loc.
a) Placing into str. loc.
b) Plant - to - Plant
i) One step method
ii) Two step method
a) Rem. from str. loc.
a) Placing into str. loc.
2) Inter Company Stock transfer ( Between Co_cd )
c) Co_cd - to Co_cd
i) W/o SD w/o billing
ii) With SD w/o billing
iii) With SD with billing

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B Stock transfer (Intra company Stock Transfer)

a) Str. loc - to - Str loc
i) One step method : This steps will be carried out at supplying str loc

User Entries System Response Observations

Use Tcode = MB1B 1. A material document will be created

In Initial screen 2. No accounting doc will be created
Mvt: 311 (Transfer posting from str - str onestep) G/L Accounts Description
Plant : XPL1 (supplying Plant) - -
Storage Location : xx (Supplying str . Loc) - -
Press enter 3. Stock Status: Supplying side Received side
In second screen Plant: No change No change
Str loc : xx (Receiving Str loc) Str. Loc: Decreased Increased
Mat No : xxxxx
Qty : xx (which to be transferred to dest. Str)
Press enter System validate your entries
Click save System will Post the document

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B Stock transfer (Intra company Stock Transfer)

a) Str. loc - to – Str. loc - Two step method
i) Rem. from str. loc. - This step will be carried out by the Supplying Str loc

User Entries System Response Observations

Use Tcode = MB1B 1. A material document will be created

In Initial screen 2. No accounting doc will be created
Mvt: 313 (Rem. from str. loc.) G/L Accounts Description
Plant : XPL1 - -
Storage Location: xx (Supplying str . Loc) - -
3. Stock Status: Supl side Rec. side
Press enter Transf(strloc)
In second screen Plant: No change No change Increased
Str. loc : xx (Receiving Str. loc) Str. Loc: Decreased No change
Mat No : xxxxx
Qty : xx (which to be transferred to dest.. Str.)
Press enter System validate your entries
Click save System will Post the document

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B Stock transfer (Intra company Stock Transfer)

a) Str. loc - to - Str loc - Two step method
ii) Placing into the str loc - This step will be carried out by the Receiving Str loc

User Entries System Response Observations

Use Tcode = MB1B 1. A material document will be created

In Initial screen 2. No accounting doc will be created
Mvt: 315 (Placing into str loc) G/L Accounts Description
Plant : XPL1 - -
Storage Location : xx (Receiving str loc) - -
3. Stock Status: Supl side Rec. side
Press enter Transf(strloc)
In second screen Plant: No change No change Decreased
Mat No : xxxxx Str. Loc: No change Increased
Qty : xx (Receiver can receive max qty of stock in transit)
Press enter System validate your entries
Click save System will Post the document

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B Stock transfer (Intra company Stock Transfer)

b) Plant - to - Plant
i) One step method : This steps will be carried out at Supplying plant/str loc

User Entries System Response Observations

Use Tcode = MB1B 1. A material document will be created

In Initial screen 2. An accounting doc will create & trigger below a/cs
Mvt: 301 (Transfer posting from olnt-plnt onestep) G/L Accounts Description
Plant : XPL1 (supplying Plant) 300000 Inv.- Raw Mate -ve (suply plnt)
Storage Location : xx (Supplying str . Loc) 300000 Inv.- Raw Mate +ve (Recv plnt)
Press enter 3. Stock Status: Supplying side Received side
In second screen Plant: Decreased Increased
Receiving Plant : xxx Str. Loc: Decreased Increased
Str loc : xx (Receiving Str loc)
Mat No : xxxxx
Qty : xx (which to be transferred to dest. Str)
Press enter System validate your entries
Click save System will Post the document

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 SAP: MM- Inventory Management

B Stock transfer (Intra company Stock Transfer)

b) Plant - to - Plant
i) One step method : This steps will be carried out at Supplying plant/str loc

User Entries System Response Observations

Use Tcode = MB1B 1. A material document will be created

In Initial screen 2. An accounting doc will create & trigger below a/cs
Mvt: 301 (Transfer posting from olnt-plnt onestep) G/L Accounts Description
Plant : XPL1 (supplying Plant) 300000 Inv.- Raw Mate -ve (suply plnt)
Storage Location : xx (Supplying str . Loc) 300000 Inv.- Raw Mate +ve (Recv plnt)
Press enter 3. Stock Status: Supplying side Received side
In second screen Plant: Decreased Increased
Receiving Plant : xxx Str. Loc: Decreased Increased
Str loc : xx (Receiving Str loc)
Mat No : xxxxx
Qty : xx (which to be transferred to dest. Str)
Press enter System validate your entries
Click save System will Post the document

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 SAP: MM- Inventory Management

B Stock transfer (Intra company Stock Transfer)

b) Plant - to - Plant - Two step method
i) Rem from str. loc. - This step will be carried out by the Supplying Str loc

User Entries System Response Observations

Use Tcode = MB1B 1. A material document will be created

In Initial screen 2. An accounting doc will create & trigger below a/cs
Mvt: 303 (Transfer posting Plant-Plant rem frm str loc) G/L Accounts Description
Plant : XPL1 (supplying Plant) 300000 Inv.- Raw Mate -ve (suply plnt)
Storage Location : xx (Supplying str . Loc) 300000 Inv.- Raw Mate +ve (Recv plnt)
Press enter 3. Stock Status: Supl side Rec. side Stk in trnst(plnt)
In second screen Plant: Decreased No change Increased
Receiving Plant : xxx Str. Loc: Decreased No change -
Receiving Str loc : xx (Optional)
Mat No : xxxxx
Qty : xx (which to be transferred to dest. Str)
Press enter System validate your entries
Click save System will Post the document

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 SAP: MM- Inventory Management

B Stock transfer (Intra company Stock Transfer)

b) Plant - to - Plant - Two step method
ii) Placing into the str. loc - This step will be carried out by the Receiving Str. loc

User Entries System Response Observations

Use Tcode = MB1B 1. A material document will be created

In Initial screen 2. No accounting doc will be created
Mvt: 305 (placing into str. Loc.- plant. - plant) G/L Accounts Description
Plant : XPL2 (Receiving Plant) - -
Storage Location: xx (Receiving str. Loc.) - -
Press enter 3. Stock Status: Supl side Rec. side Transfer (str.loc)
In second screen Plant: No change Increased Decreased
Mat No : xxxxx Str. Loc: No change Increased
Qty. : xx (Receiver can receive max qty. of stock in transit)
Press enter System validate your entries
Click save System will Post the document

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 SAP: MM- Inventory Management

C) Transfer Posting:
Changing of the stock status from one stock type to another stock type can be called as Transfer posting
Tcode for Transfer posting = MB1B
Transfer
SAP std. Stock types are Transfer Postings MVT Postings MVT
Un-restricted QI - U/R 321 U/R - to - QI 322
Blocked U/R - Blocked 344 QI - to - Blocked 350
QI stock Blocked - QI 349 Blocked - to - U/R 343

Transfer Posting QI - to - U/R

User Entries System Response Observations

Use Tcode = MB1B 1. A material document will be created

In Initial screen 2. No accounting doc will be created
Mvt: 321 (Transfer posting from QI - to - U/R) G/L Accounts Description
Plant : XPL1 - -
Storage Location : xx - -
Press enter 3. Stock Status: QI Stock U/R Stock
In second screen Plant: Decreased Decreased
Mat No : xxxxx Str. Loc.: Increased Increased
Qty. : xx
Press enter System validate your entries
Click save System will Post the document

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 SAP: MM- Inventory Management

D. Goods Issue:
It can also be called with the following name
Material with drawl (from the production point)
Material consumption ( from Fincance point)

Goods Issue - (To Cost Center)

User Entries System Response Observations

Use Tcode = MB1A 1. A material document will be created

In Initial Screen 2. An accounting doc will create & trigger below a/cs
Mvt: 201 (Consumption to Cost center) G/L Accounts Description
Plant : xxxx 300000 Inv.- Raw Mate +ve
Storage Location : XX 400000 Consumption, raw mat.1 +ve
Press enter 3. Stock Status: U/R stock qty.
In Second Screen Plant: Decreased
Cost center = XX_CC (Your production cost center) Str. Loc.: Decreased
Material No xxxxx
Qty xxxx System validate your entries
Press enter System will Post the document
Click save

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SAP: MM- Inventory Management

Physical Inventory
What is Physical Inventory?

 Physical Inventory is the procedure used to maintain an accurate count of material

 This involves physically counting the quantity of stock at storage location.

Which stocks can be inventoried?

 Company‟s own stock

 Special stock (consignment stock at customer, external consignment stock from vendor or
returnable packaging material)
Notes:
1. Above stocks to be taken separately in different physical inventory documents.
2. Physical inventory can be carried out for the following stock types
a. Unrestricted stocks in warehouse
b. Quality inspection stock
c. Blocked stock
d. If batch status management is active, stock type 1 covers both unrestricted-use stock and
restricted-use stock
3. Inventory of all stock types mentioned could be taken in a single transaction
4. For the material to be inventoried, one item is created in the physical inventory document for
every stock type.
5. Physical inventory takes place at storage location level.
6. A separate physical inventory document is created for every storage location
7. If no storage location segment exists for a material, this means that no goods movement has ever
taken place for the material in the storage location.
8. The material therefore has never had any stock at the storage location and does not exist at stock
management level.
9. It is therefore not possible to carry out a physical inventory for the material in this storage location
10. This is not to be confused with a material for which a goods movement has taken place and for
which the stock balance is currently zero.
11. A Physical inventory must be carried out in this case.
12. It is also possible to carry out a physical inventory since storage location data is not deleted
when the stock balance is zero

Physical inventory procedure:

 Periodic Inventory
 Continuous inventory
 Cycle counting
 Inventory sampling

Periodic Inventory:
 In periodic Inventory all stocks of the company are physically counted on the balance
sheet key date.
 Every material must be counted
 During counting, the warehouse must be blocked for material movements.

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SAP: MM- Inventory Management

Continuous Inventory:

 With the continuous Inventory procedure, stocks are counted continuous during the entire
fiscal year.
 In this case, it is important to ensure that every material is physically counted at least once
during the year.

Cycle Counting:

 Cycle Counting is a method of physical inventory where the inventory is counted at regular
intervals with in the fiscal year.
 These intervals (or cycles) depend on the cycle counting indicator set for the moving items
for examples.

Inventory Sampling:

 In inventory Sampling, randomly selected stock of the company are physically counted on
the balance sheet key date.
 If the variance between the result of the count and the book inventory balance are small
enough, it is presumed that the book inventory balances for the other stock are correct.

Physical Inventory process:

Independent of the Physical inventory procedure, the physical inventory process can be divided
into three phases:

 Physical Inventory Preparation

o This includes creating a physical inventory document

o Blocking the material for posting and printing.
o Distributing the physical inventory document

 Physical Inventory count

o The stocks in the warehouse are counted and the count results are entered in the
count list.
o These are then transferred from the count list to the system in the step “Enter
Physical inventory count”

 Physical Inventory check

o Using the list of inventory differences, you can check variances in the stocks.
o You should check whether the transferred count result is correct (change count) or
whether you want to initiate a recount.
o If the difference is accepted, it is posted and stock is corrected.

 Posting the difference

o A Physical inventory document is corrected to record the results of a physical

Inventory.
o Once actual counts are entered in to the physical inventory document, the values
are posted online, resulting in creation of SAP material and accounting documents
Tolerance group can be limited to a maximum difference per physical inventory
document and maximum difference per line item with in a document.

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SAP: MM- Inventory Management

Steps in Physical inventory

1. Create a Physical Inv. document

Steps:

 Use Tcode = MI01

 In initial screen
o Document date 12.04.2013
o Planned count date 12.04.2013
o Plant VPL1
o Storage Location S11
 Press enter
o Material no‟s (for which you wish to carry out the Physical Inventory)
 Click save

2. Entering of Inventory count

Steps:

 Use Tcode = MI04

 In initial screen
o Phys. Inventory Doc. 510 (Phy. doc created in the above step)
o Fiscal Year 2013
o Count Date 12.04.2013
 Press enter
 In second screen
o Enter Material qty. counted against each stock type
 click save

3. List of Inventory differences

Steps:

 Use Tcode = MI20

 In Initial screen
o Plant ASP1
o Storage Location S11
o Physical Inventory Document 510
 Press execute button
 System displays the
o Book qty. and value against Phy. counted qty. and value
 Click select all button and
 Click Post the difference button on application tool bar
o or do the following step

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SAP: MM- Inventory Management

4. Post the Inventory difference

Steps:

 Use Tcode = MI07

 In initial screen
o Phys. Inventory Doc. 510
o Fiscal Year 2013
o Posting Date 12.04.2013
 Press enter
 In second screen
o System display the difference qty. (either excess or less)
o Enter if any reason (optional)
o Click save
 Observations:
 system will create a material doc as a proof of posting this differences
 Go to MIGO see the material document
o for Less Qty. of material
o System triggers Mvt 702 (GI for Phy. Inv. from warehouse)
o for Excess Qty. of material
o System triggers Mvt 701 (GR for Phy. Inv. to warehouse)
 During this action for less qty. and excess qty.
o System will trigger an a/c ing document and hit the following a/c.s
G/L A/c Description
o For Less Qty. 300000 Inventory - Raw Mate –ve.
233000 Losses - inventory +ve.
o For Excess Qty.
300000 Inventory - Raw Mate +ve.
283000 Gain - inventory diff - ve.
 Stock status:
o All Counted Qty. only will be the stock qty. from now onwards

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SAP: MM- Inventory Management

Logistic Invoice Verification (LIV)

IMG settings: LIV

1. Maintain Number Assignments for Accounting Documents (OMR4)

Path: SPROIMGMaterials Management Logistics Invoice Verification Incoming Invoice

Number Assignment Maintain Number Assignments for Accounting Documents
Steps:
 Click 'Document type' button
 System displays the List of Doc types
 Click Position
o Enter Document Type RE (Gross Inv. Receipt)
 Select RE and
 Click details button
 Click 'Number Range Information' button
 Company Code : VMOT
 Check an entry for 51 with year 2013
o If it is available
 no need to do any thing
o If it is not available
 Click + interval and create Number range for 51 with year 2013

2. Maintain Number Range Intervals for Invoice Documents (OMRJ)

Path: SPROIMGMaterials Management Logistics Invoice Verification Incoming Invoice

Number Assignment Maintain Number Assignment for Logistics Documents Maintain Number
Range Intervals for Invoice Documents

Steps:

 Click Pencil marked interval button

 Check for an entry 01 with year 2013
o In case if you find this entry
 No need to create
o Else
 Create an entry for 01 with year 2013
 Click save

Tax settings: LIV

1. Check Calculation Procedure (OBYZ)

Path: SPROIMGFinancial Accounting Financial Accounting Global Settings Tax on

Sales/Purchases Basic Settings Check Calculation Procedure
Steps:
 Click 'Define Procedures'- System displays the list of tax procedures
 Click 'New entries'
Procedure Description
TAXVOL Volvo Tax Procedure

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SAP: MM- Inventory Management

 Click save
 Select TAXVOL - and Click Control data folder
 An empty schema in non-editable mode will appear
 click New entries
Step counter Cod type Description frm. to A/c key AK acc.
1 0 BASB Base Amt.
2 0 MWVS I/p Tax 1 VST VST
3 0 Total 1 2
 Click save

2. Assign Country to Calculation Procedure (OBBG)

Path: SPROIMGFinancial Accounting Financial Accounting Global Settings Tax on

Sales/Purchases Basic Settings Assign Country to Calculation Procedure
Steps:
 System displays the list of countries and their Tax procedures
 Click Position
 Enter Country = IN
 Replace the existing procedure with your tax procedure
Country Tax procedure
IN TAXVOL
 Click save

3. Define Tax Codes for Sales and Purchases (FTXP)

Path: SPROIMGFinancial Accounting Financial Accounting Global Settings Tax on

Sales/Purchases Calculation Define Tax Codes for Sales and Purchases
Steps:
 Enter country = IN
 In initial screen
o Country Key IN India
o Tax Code V1
 Press enter
 In Properties screen
Tax Code V1 Volvo 10% Tax code
Tax type V
 Press enter
 System displays the following screen
Country Key IN India
Tax Code V1 Volvo 10% Tax code
Procedure TAXVOL
Tax type V Input tax
Tax Type Acct Key Tax Percent Rate Lev Frm Lvl To Cond. Type
Base Amount 1 0 BASB
Input Tax VST 10 2 1 MWVS
Total 3 1
 Enter tax percentage as 10
 Repeat the same for A2 as Volvo 4% tax code

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SAP: MM- Inventory Management

How to do the Logistic Invoice Verification (LIV)

 In this module system verify the vendor Invoices for its content and price
 Tcode for Invoice verification = MIRO
 Pre requisites are:
o You should have a PO for which GR has to be made
Or
o You can have a Scheduling Agreement and its GR

Check Points:

Note: before processing MIRO the following 4 Check points to be verified

1. Check the Co_cd in Basic data - tab

a. If it is your Co_cd
i. No need to do anything...proceed to point no 2
b. Else
i. On menu bar-->Edit-->Switch Co_cd or F7
ii. Enter Co_cd = Your Co_cd
iii. Press enter
2. Enter Invoice date = Current date
3. Check the Drop down list of Tax codes.
a. It should show your tax codes (for ex: V1 – Volvo 10% Tax code and V2 - Volvo 4% tax
code)
b. If system does not show your Tax codes
i. Go to OBBG
ii. Click Position
iii. Enter country = IN
iv. Replace the existing tax proc. with your tax proc, =
TAXVOL - Volvo tax proc.
v. Click save
vi. In MIRO tax codes will appear
vii. choose your tax code from tax code list
4. Check the 'Calculate Tax' check box

How to do the Invoice verification

Steps:
 Use Tcode = MIRO
 In initial screen
 Check the above 4 check points
 Enter the PO no = XXXX
 Enter the Amount as Balance amount
 No errors will be appeared
 green light indicates to proceed for post by clicking save button
 Click Save to post the document
 Note down the document No

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SAP: MM- Inventory Management

Observations:

 System will create an invoice document as a proof of entering the incoming invoice
 How to view this Invoice document?
 Use Tcode = MIR4 (display of Invoice doc)
 Enter the document No and year
 Press enter
 system will display the invoice doc
 To view an a/c if any created during this process
 Click 'follow-on document' button
 System will display the a/c doc which is attached to this invoice doc
 The Following a/c will trigger during the invoice verification
G/L A/cs Description
400000 JK Tyres Limited -ve
191100 Goods Rcvd/Invoice R +ve
154000 Input tax +ve

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