SAP MM Automatic Account Determination

There are many transactions in Material Management (MM) that relevant for Accounting. These
transactions must be recorded in accounting documents that contain the postings made to the G/L
accounts in Financial Accounting (FI). The mostly used MM transactions that relevant for FI can be
seen at Accounting Journals of SAP Material Management (MM) Transactions.
For those transactions, as far as possible, the SAP R/3 System should determine automatically the
G/L account numbers that are involved in the accounting journal. By doing so, we can minimize the
inputs and error possibilities made by MM end-users who perform the transactions as they don’t
determine the G/L account numbers.
We can do this by Automatic Account Determination process in MM configuration (T-code: SPRO).
The automatic account determination process must be done together with Accounting Department.
The influencing factors that determine how SAP choose the G/L account numbers that are involved
in the accounting journal for MM transactions are:

• Chart of accounts of the company code

We must assign a chart of account to each company code. Several company codes can
use the same chart of accounts. This process must be done in FICO configuration. You
can learn how to configure FICO module in its relation with MM module at SAP FICO
minimal configuration for MM posting.
SAP R/3 determines the chart of account affected by MM transaction from the company
code or plant entered by user when performs a transaction.We must define the
automatic account determination individually for each chart of accounts.

• Valuation grouping code of the valuation area

See Material Valuation to know more about valuation area. The Valuation grouping code
is a key to differentiate account determination by valuation area within a chart of
account. Valuation grouping code is also called Valuation modification.
SAP screenshots of How to activate the valuation grouping code(T-code:
SPRO/OMWM):
SPRO menu:
IMG - Materials Management-Valuation and Account Assignment - Account
 Determination - Account Determination Without Wizard-Define Valuation Control

• The above image is © SAP AG 2010. All rights reserved

A valuation grouping code consists of a group of valuation areas that can have same
account determination in a specific chart of account. It is a tool that enables us to
configure the automatic account determination with a minimum of effort.
If we activate the valuation grouping code in configuration process, we have to assign a
valuation grouping code to each valuation area.
SAP Screenshots of How to define valuation grouping code (T-code: SPRO/OMWD):
SPRO menu: IMG - Materials Management-Valuation and Account Assignment -
Account Determination - Account Determination Without Wizard - Group Together
Valuation Areas.

The above image is © SAP AG 2010. All rights

reserved
 By activating and using the valuation grouping code, we don’t have to configure account
determination for each valuation area (that is a plant or company code) if we don’t want
to differentiate it for each valuation area. If we want the automatic account determination
within a chart of accounts runs differently for valuation areas, we can assign different
valuation grouping codes to these valuation areas.
We must define the automatic account determination individually for every valuation
grouping code within a chart of accounts. It applies to all valuation areas which are
assigned to this valuation grouping code.
For example, if we want to differentiate the account determination for a group of two
plants with another group of other three plants in a company code (where the valuation
level is plant), we can assign a valuation grouping code for the group of two plants and
another valuation grouping code for the group of other three plants. By doing so, we just
have to configure the account determination for the two valuation grouping codes, no
need for five valuation areas (plants).
SAP R/3 determines the valuation area and the valuation grouping code affected by MM
transaction from the company code or plant entered by user when performs a
transaction.

• Valuation class of material

The valuation class is a key to differentiate account determination by materials. For
example, we can post a goods receipt of a raw material to a different inventory account
than if the goods receipt were for finished-product.
We can do this by assigning different valuation classes to the raw material and finished-
product and by assigning different G/L accounts to the posting transaction for every
valuation class. If we don’t want to differentiate account determination according to
valuation classes we don’t have to maintain a valuation class for a transaction.
The valuation class must be entered in the accounting data view of material master data
for a valuated-material. The allowed valuation classes for a material depend on its
material type. More than one valuation class can be allowed for a material type. More
than one material type can be allowed for a valuation class. The relationship between
valuation classes and material types is established by the account category reference.
The account category reference is a compilation of valuation classes. A material type is
assigned to only one account category reference.
SAP screenshots of How to define valuation classes (T-code: SPRO/OMSK)
SPRO menu: IMG - Materials Management-Valuation and Account Assignment -
Account Determination - Account Determination Without Wizard-Define Valuation
Classes.

The above image is © SAP AG 2010. All rights

reserved
 The above image is © SAP AG 2010. All
rights reserved

The above image is © SAP AG 2010. All

rights reserved

The above image is © SAP AG 2010. All

rights reserved
 The above image is © SAP AG 2010. All
rights reserved

The above image is © SAP AG 2010. All rights

reserved

• Transaction/event key (internal processing key)

The Transaction/event key is a key to differentiate account determination by business
transaction. For example, we must differentiate G/L account posted by goods receipt
transaction and posted by invoice receipt transaction.
Posting transactions are predefined for those inventory management and invoice
verification transactions relevant to accounting. Posting records, which are generalized
in the value string, are assigned to each relevant movement type in inventory
management and each transaction in invoice verification. These contain keys for the
relevant posting transaction (for example, inventory posting and consumption posting)
instead of actual G/L account numbers.
 We do not have to define these transaction keys, they are determined automatically from
the transaction (invoice verification) or the movement type (inventory management). All
we have to do is assign the relevant G/L account to each posting transaction.
You can see list of transaction key here.

• Account grouping(only for transaction: offsetting entries, consignment liabilities, and

price differences)
Account grouping is a key that allows us to subdivide number assignments for each
transaction key in account determination.
Account grouping is also called general modification. Since the posting transaction
"Offsetting entry for inventory posting" is used for different transactions (for example,
goods issue, scrapping, physical inventory), which are assigned to different accounts (for
example, consumption account, scrapping, expense/income from inventory differences),
it is necessary to divide the posting transaction according to a further key: account
grouping code.
An account grouping is assigned to each movement type in inventory management
which uses the posting transaction "Offsetting entry for inventory posting". Under the
posting transaction "Offsetting entry for inventory posting", we must assign G/L accounts
for every account grouping, that is, assign G/L accounts.
If we wish to post price differences to different price difference accounts in the case of
goods receipts for purchase orders, goods receipts for orders, or other movements, we
can define different account grouping codes for the transaction key.
Using the account grouping, we can also have different accounts for consignment
liabilities and pipeline liabilities.
You can see list of account grouping here.

Configure Automatic Postings

Automatic Postings are postings made to G/L accounts automatically in the case of Invoice
Verification and Inventory Management transactions relevant to Financial and Cost Accounting.

When entering the goods movement, the user does not have to enter a G/L account, since the SAP
R/3 System automatically finds the accounts to which postings are to be made using the influence
factors as explain above.
SAP Screenshots of how to configure automatic posting (T-code: SPRO/OBYC):
 • Posting made in the case of goods receipt (GR) to purchase order (PO):

GR/IR Clearing
Inventory account Account

500 500

We need to update the BSX transaction key (Inventory posting) with the GL code Inventory account.
SPRO menu:
IMG - Materials Management-Valuation and Account Assignment - Account Determination - Account
Determination Without Wizard - Configure Automatic Posting.

The above image is © SAP AG 2010. All rights reserved

The above image is © SAP AG 2010. All rights reserved

Enter Chart of Account which we want to configure its account determination, then enter the G/L
account affected by the transaction as below:
 The above image is © SAP AG 2010. All rights reserved

We also need to update the WRX transaction key with the GL code GR/IR Clearing account.

The above image is © SAP AG 2010. All rights reserved

Enter Chart of Account which we want to configure its account determination, then enter the G/L
account affected by the transaction as below:

The above image is © SAP AG 2010. All rights reserved

 • posting made in the case of goods issue to cost center:

Material consumption
Inventory account expense account

500 500
We have configured the inventory posting transaction in the previous section (GR to PO).

Now, we have to configure transaction key GBB. GBB key is used for various offsetting posting
entries. Within GBB transaction there are various account grouping (general modification). In this
case we need to update general modification VBR with the material consumption expense account.

The above image is © SAP AG 2010. All rights reserved

Enter Chart of Account which we want to configure its account determination, then enter the G/L
account affected by the transaction as below:

The above image is © SAP AG 2010. All rights reserved

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Posted by Rizki
Share your opinions or suggestions by posting a comment below.

Posted by Rizki at 16.12.07

Labels: 0170-MM-FICO: Automatic Account Determination

13 comments:

Yuvi said...
 This is Gr8 Document who ever created it!! Thanks a Lot
September 18, 2008 10:56 PM

mk said...

Appreciate the effort especially in connecting Valuation Class, Valuation

Grouping Code (Valuation Modification) and Account Grouping (where
applicable).

I have one question though (at the end of the following restatements)

1. The Valuation Class is on the part number. It is an attribute of the

product. Right?

2. The Valuation grouping code is an attribute of the Valuation area e.g. a

plant or a warehouse, which is part of the inventory movement transaction.
Right?

3. The Transaction/Event key and the Account Grouping are connected to

the Business Transaction type. Right?

In all screen shots shown connecting the three/four attributes above with a
GL account do not include the Account Category Reference. quote "The
relationship between valuation classes and material types is established by
the account category reference."

What is the role of ACR in account determination?

January 19, 2009 11:37 PM

Anonymous said...
 Thanks for sharing this, Great blog.

I have a question: Do you know whether SAP can be configured to post to

expense account rather than balance sheet account at goods receipt/issue?
Some organizations with minimal inventories of certain items do not want to
account the inventory (due to cost of physical inventory, audits, etc.) but
want to book straight to expense account. They would like to keep the
moving average and inventory updated. Is this possible? Your comments
will be appreciated. Thanks!
March 11, 2009 2:29 AM

a Blogger said...

Yes, you can post a goods receipt to expense account by choosing "K" in
"account assignment" field of the Purchase Order (PO). You can read this
post to know more about it.
March 11, 2009 7:41 AM

Anonymous said...

I think the A/c Cat.Ref. is only used to establish many to many relationship
between Material Types and Valuation Classes.Consider the following
example:
Mat.typeVal.Class
ax
ay
az
bx
by
bz
 cx
cy
cz
this way we are is using 3-as, 3-bs, 3-cs as also 3-xs, 3-ys and 3-zs. Not
only that we are using more number of lines but also it is difficult to
understand. Moreover, if we assign mat.types to val. classes as above, it is
against normalization rules of DataBase management bcoz they
creatredundent data.
I feel I should be right.
regards
Anoopjeet.
March 25, 2009 1:58 AM

Anonymous said...

Further to my post on Mar-24-09 I wld like to add that in tcode OMSK

ACRef is assigned to Val.classes and then ACRef is assigned to Mat.Types
thus creating relationship among val.classes and mat.types.
regards
Anoopjeet
March 25, 2009 10:52 PM

Anonymous said...

Thanks you for your response to my March 11 comment regarding posting

to expense accout. I understand using K and I read the details. However,
my questions is- If I want to maintain the inventory and post the purchase
cost of the inventory to balance sheet a/c. Is this possible?
May 11, 2009 5:09 AM
Anonymous said...

Thanks a ton for this commendable effort.

June 7, 2010 1:34 PM

Anonymous said...

reallythanx for this study material..

Regards
sidhartha
September 8, 2010 1:51 AM

Anonymous said...

Very Good Document..Simpleexplaination with Screenshots..

Commendable Work..

Thanks for the material....

September 18, 2010 4:16 PM

Anonymous said...

Really nice and well documented...Very good and quick reference for a
quick interview review...Nicely explained.

Nureya
November 21, 2010 2:39 AM
Anonymous said...

Super document ... however I have a problem ?

Created a new plant and want to assign ValGrpgCode nut my new plant
does not appear in the view list for me to assign ValGrpgCode. it is created
at CoCo level.

Where can i had my plant/valuation area so it is listed in the OMWD view.

December 22, 2010 11:02 PM

Anonymous said...

very nice explained. i did not understand offsetting entries. would you
please give a real time example for this.
February 26, 2011 6:34 AM