SAP FI MM Integration – Control Parameters

SAP FI MM Integration – Know the Basics First

FI MM integration in SAP is an example of how different modules of SAP ERP systems are integrated. With the integration, SAP ensures that data from one module flows to another module automatically.

How FI and MM are inter-related in SAP?

Although SAP MM (Material Management) is responsible for managing materials and inventory in SAP. However, inventory value must be reflected in the financial accounts of a company too.

Likewise, the stock of a company has its asset. And it is a legal requirement to mention it on various financial reports.

Control Parameters in FI MM Integration in SAP

SAP uses different control parameters to differentiate different materials. The Best Four of them are:

Chart of Accounts
Valuation Grouping Code
Transaction key
Valuation Class

Before going deep into these parameters, it is important to know the Valuation Area. Thus, we should know the options available for valuation.

Options for Valuation

Valuation at plant level– The System evaluates all materials at the plant level. It is the most used one.
Valuation at the company code level– All materials in all plants of a company are evaluated at the company code level.

Here now we go to the details of control parameters that help in SAP FI MM Integration work.

Chart of Accounts for FI MM Integration

Chart of accounts in SAP is the grouping of G/L accounts that forms the framework for recording accounting transactions in a structured way.

Concerning logistics transactions like goods received, vendor invoice, material issues, goods delivery to the customer, we get respective account documents.

Therefore it is highly required the following integration settings must be configured under the operational chart of accounts.

Valuation Grouping Code

Valuation Grouping Code enables us to customize account determination according to different valuation areas. Surely, it is possible to have a valuation level at the company code or plant level as I explained above.

Depending on the valuation level, we will either use company codes or plants as valuation areas.

Furthermore, Valuation grouping codes enable us to combine several valuation areas for account determination.

Thus, all the valuation areas in one particular valuation grouping code will be treated in the same way during account determination. Likewise, they all will correspond to the same G/L account too.

Transaction Key

Transaction Key determination depends on posting value string. This is an additional parameter of SAP FI MM integration.

Posting value string

Posting value string indicates a posting rule that always contains the same account assignment characteristics for a certain transaction or event.

SAP uses the following criteria to determine the posting string for values.

Movement Type
Special stock indicator
Value update
Movement indicator

More on FI-SD & FI-MM Integration – Interview Questions

Valuation Class

It allows customizing account determination according to a particular material. Consequently, you can achieve this by assigning different valuation classes on material master Accounting Tab-1.

Now we have learnt different parameters that we can use for customization of automatic account determination. You also must know that this is very important in SAP MM FI integration.

Further, learn how can we assign different financial accounts to a different combination of these parameters.

How to Configure Valuation Class for FI MM Integration?

Perform this configuration in transaction OBYC.

Firstly, double-click on the line with a transaction key that you want to customize.
Secondly, the system will ask for a chart of accounts.
Further, You enter the relevant chart of accounts
Lastly proceed to the next screen.

Important Note

This transaction key does not use all the parameters for account determination that we mentioned previously.

Noteworthy, SAP enables us to choose which factors should we take into account during account determination.

Additionally, we can configure the posting keys that we will use for automatic postings in the financial accounting module.

We can also do this using the Posting Key button for different rows in the account assignment table.

Posting Key

Another important point in SAP FI-MM integration is the process of invoice verification.

You may be interested in: SAP FICO Interview Question on GR/IR

Invoice Verification in FI MM Integration

During invoice verification, the system makes automatic postings to one or more of the following accounts:

Vendor Account
Stock Account ( Transaction Key BSX)
GR/IR Clearing Accounts ( Transaction key – WRX)
Price Difference Accounts ( transaction key –PRD)
Cash Discount Clearing Account ( Transaction Key-SKV)
Freight Clearing account ( Transaction key – FR1)

Read Related: SAP FI MM Integration Interview Questions

Conclusion

SAP FI-MM integration is one of the important and advanced topics in SAP. It is highly required to configure automatic postings in Financial Accounting and test this configuration to make sure that postings are made to the correct GL accounts.

However, to learn the complete process of SAP FI MM Integration, you must understand the basic configuration of SAP FI and MM. Hence, you can co-relate easily all the integration steps and outcomes.

Watch this video to learn the step by step process of SAP FI MM integration.

Watch Video: SAP FI MM Video in SAP FICO

Pradeep