What is Automatic Account Determination in SAP MM

 

In SAP Materials Management (MM), Automatic Account Determination is a powerful feature that automates the process of assigning the correct General Ledger (G/L) accounts to various inventory-related transactions. This automation eliminates manual entry, ensuring accuracy and efficiency in financial postings. Here's a detailed breakdown:

How it Works (5 Steps):

1. G/L Account Setup (FS00): Before anything else, the required G/L accounts must exist in your system. Transaction code FS00 is used to create new G/L accounts or select existing ones. These accounts will represent things like inventory, cost of goods sold, GR/IR clearing, etc. Ensure they are properly configured for your company code.

2. Define Material Type (OMS2): Material types classify different kinds of materials (e.g., raw materials, finished goods, trading goods). In OMS2, you activate quantity and value updates for each material type. This activation tells the system to track the quantity and value of materials of that type and update the corresponding G/L accounts. Valuation is crucial for accurate inventory accounting.

3. Assign Valuation Class (OMSK): Valuation classes group materials with similar valuation characteristics. For example, all raw materials might belong to one valuation class, while finished goods belong to another. In OMSK, you assign a valuation class to each material. This links the material to specific accounting procedures and helps determine the G/L accounts used during transactions.

4. Set Valuation Grouping Code (OMWD): Valuation grouping codes allow you to further refine how materials are valuated within a valuation area (e.g., plant). This step is essential for companies with complex valuation requirements. OMWD is where you link the valuation grouping code to your valuation area.

5. Configure Automatic Postings (OBYC): This is the heart of automatic account determination. Transaction code OBYC is where you define the actual mapping between inventory transactions and G/L accounts. You assign G/L accounts to various transaction keys (e.g., BSX for inventory postings, WRX for GR/IR clearing accounts). The combination of valuation class, transaction key, and other criteria determines which G/L account is used.

Real-World Example:

Let's say a manufacturing company purchases 1000kg of steel (raw material).

1. Purchase Order: The procurement team creates a purchase order. At this stage, no accounting entries are made.

2. Goods Receipt (MIGO): When the steel arrives, the warehouse team uses MIGO to post a Goods Receipt. This is where the magic happens. Based on the material type, valuation class, and the transaction key for goods receipt, the system automatically determines the correct G/L account for inventory and posts the increase in stock quantity and value.

3. Invoice Receipt (MIRO): The finance team receives the supplier invoice and enters it into the system using MIRO. SAP automatically posts to the GR/IR clearing account (WRX), offsetting the liability.

4. Payment: When the invoice is paid, the GR/IR clearing account is cleared, and the final financial postings are complete.

Benefits:

• No Manual G/L Account Entry: Saves time and reduces errors.
• Accuracy: Ensures consistent and correct financial postings.
• Seamless Integration: Streamlines the flow of information between MM and FI.

By mastering automatic account determination, businesses can significantly improve the efficiency and accuracy of their inventory accounting processes within SAP.

Account Assignment Category in SAP MM

Account Assignment Category in SAP MM

Definition

                         Account Assignment category is one of the very important fields available and used in the purchasing documents. It has many control functions and helps in determining the objects (e.g. cost center, sales order, project) that are charged in the case of a purchase order for a material that is intended for direct usage or consumption.

Use

                                   You specify which account assignment object is to be charged via the account assignment category such as (cost center, sales order, and so on) Which accounts are to be charged when the incoming invoice or goods receipt is posted & which account assignment data you must provide. Account assignment category is used at the time of creation of a purchase order. For normal PO no account assignment category is used. 

               You can specify one account assignment for an item, or several ( Specifying Single Account Assignment or Specifying Multiple Account Assignment respectively).

             Multiple account assignment allows you to apportion the cost of a material covered by a PO among your own cost center and several others, for example.
You specify which account assignment object is to be charged via the account assignment category.

Account Assignment Category

The account assignment category determines:

The nature of the account assignment (cost center, sales order, and so on)

• Which accounts are to be charged when the incoming invoice or goods receipt is posted
• Which account assignment data you must provide

Account Assignment Categories

Description	Required account assignment data
Asset (A)	Main asset number and sub-number
Order ( F)	Order and G/L account number
Production order	Production order number
Cost center(K)	Cost center and G/L account number
Sales order (C)	Sales order and G/L account number
Individual customer requirement(E)	Sales order and G/L account number
Project	Project and G/L account number
Unknown	None

Note: You can change the account assignment category after entering the item provided that field selection has been set up accordingly in Customizing.

Automatic Account Determination

The system attempts to suggest a specific G/L account for a given preliminary account assignment. The number of the G/L account to be charged can be automatically suggested by the system provided that automatic account determination has been defined for the chart of accounts of the relevant company code. 

Specifying Single Account Assignment 

With this procedure, you specify one account assignment for a PO item.

1. When entering an item on the item overview screen, specify the account assignment category for the item.
2. Choose Item ® Account assignments.

The box for entering account assignment data appears.

3. Enter the account assignment data that is dependent on the account assignment category.

• If additional information is available on a specific account assignment, the More field is displayed.
• If you wish to enter further items with the same account assignment data, choose Acct. assgt. on. The account assignment data will then automatically be adopted in the next item.

1. Branch to the item overview and repeat the process if necessary.
2. Save the purchase order.

Specifying Multiple Account Assignment 

This procedure allows you to apportion the costs associated with a PO item among several cost centers, for example.

With multiple account assignment, the account assignment data entered takes the form of individual account assignment items.

Prerequisites

When specifying multiple account assignment for an item, you must consider the following points:

• How the net value of a PO item to be distributed is (apportioned) among the individual account assignment items?

The costs can be allocated on a quantity or percentage basis (for example, 10 pieces or 10% of the order value to cost center 100).

• How are the costs to be apportioned if only a part of the ordered quantity has been delivered and invoiced?

- The partial invoice amount can be distributed proportionally, i.e. evenly, among the account assignment items of a purchase order.

- The partial invoice amount can be distributed on a "progressive fill-up" basis, i.e. the invoiced amount is allocated to the individual account assignment items one after the other. Only when account assignment item 1 has been charged in full is item 2 charged; only when account assignment item 2 has been charged is item 3 charged, and so on. This process continues until the total invoice value of the PO item is reached.

Procedure

1. When entering an item, specify the account assignment category for the desired item on the item overview screen.
2. To do so, choose Item ® Account assignments.

The account assignment window appears.

3. Enter the account assignment data for the first account assignment item.

Choose Change display to call up the multiple account assignment screen.

4. In the item fields (upper part of this screen) enter the relevant data:

– Select the GR non-val. field to designate the GR for this item as non-valuated (as the item has been ordered for direct consumption).

– In the Distribution field, specify whether the costs are to be apportioned on a quantity basis or by percentage.

– In the Partial invoice field, specify whether the value of a partial invoice is to be allocated to individual account assignment items successively, whereby one is debited in full before a posting is made to another one (in which case, some account assignment items may not be debited at all as a result of a particular invoice), or whether the value of such a partial invoice is to be distributed among all account assignment items in equal portions.

5. For each account assignment item, enter either the quantity or the percentage of the total value to be charged to the relevant account assignment item.

Note: To enter further items with the same account assignment data, choose Edit ® Repeat account assignment ® Switch on. The account assignment data will then be automatically adopted in the next item.

6. Repeat as necessary for other items.
7. Save the purchase order.

                A vendor submits an invoice for 60% of the total order value. The cost of the ordered goods is to be divided equally among cost centers 1 - 5 (that is, 20% of the total cost is to be borne by each).

                 If you specified for the PO item that the value of a partial invoice is to be debited to the individual account assignment items on a "progressive fill-up" basis, cost centers 1 to 3 will each be debited with their full 20% share of the total cost on the basis of this partial invoice, whereas cost centers 4 and 5 will not be charged at all. (The latter two cost centers will not be debited until the remaining amount is invoiced.)

 ACCOUNT ASSIGNMENT CATEGORY RELATED TRANSACTION CODES

SPRO - Customizing - Edit Project   Basis - Customizing Project Management (IMG)

OBYC - C FI Table T030   FI - Basic Functions

OKB9 - Change Automatic Account Assignment   CO - Overhead Cost Controlling

ME21N - Create Purchase Order   MM - Purchasing

OME9 - C MM-PUR Acct. Assignment Categories   MM - Basic Functions

MIRO - Enter Incoming Invoice   MM - Invoice Verification

ME51N - Create Purchase Requisition   MM - Purchasing

MIGO - Goods Movement   MM - Inventory Management

FS00 - G/L acct master record maintenance   FI - Basic Functions

KA02 - Change Cost Element   CO - Overhead Cost Controlling

OMS2 - Maintain Material Types   Logistics - Material Master

OLME - IMG View: Purchasing   MM - Basic Functions

ME22N - Change Purchase Order   MM - Purchasing

RZ20 - CCMS Monitoring   Basis - Monitoring

SE16 - Data Browser   Basis - Workbench Utilities