Material Price Change Transaction (MR21) in details

Sometimes we need to change the value (price) of our inventory material in order to adjust it to a certain condition.


Maybe, it because the current standard price (for material with price control procedure “S”) has been differed too greatly with the statistical moving average price (MAP). For a material with price control procedure “S”, SAP R/3 system also calculates its moving average price and save it as statistical-MAP at accounting view on material master data. This statistical MAP has no influence in material valuation.


Or, for a material with price control procedure “V”, we maybe need to change the price of a material because it has no movement transaction for a long time period and we want to revaluate it to the current market price (You can read our previous article to understand more about Material Valuation in SAP ).


This material price change transaction usually occurs in manufacturing or trading companies. This transaction is an accounting transaction, not material transaction. It will post an accounting document but will not create a material document. It will change the price of a material at accounting view on material master data but will not change the quantity of it.

The T-code fro the transaction is: MR21.

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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: Continue reading

Accounting (FICO) Journals of SAP Material Management (MM) Transactions

Accounting (FICO) Journals of SAP Material Management (MM) Transactions

SAP R/3 is an Enterprise Resource Planning (ERP) software that makes an enterprise able to integrate all of its business processes so it can be run more efficient. It can reduce the duplication of data and process. Data recorded by one department can be used by other departments in a real-time process. As an example we will explain the typical business process in an enterprise.

Typical business processes in an enterprise

Demand for finished products from customer will be recorded by Sales department in a sales order document. Sales order data can be analyzed by Inventory department. If there are not enough finished products in current stock, the sales order can trigger a production order that request the Production department to start producing the finished products. In order to produce the finished products maybe it requires some raw materials that have to be bought from vendors. The production order can trigger a purchase requisition for the raw materials. The purchase requisition will be processed by Procurement department to be a purchase order that is sent to vendor. Vendor will deliver the raw materials and Inventory department will receive them. Accounting department will record the vendor’s invoice and Finance department will process the payment. Once the raw materials are available, the Production process begins. Then the finished products will be delivered to the customer, and Finance department will send invoice to the customer.All of the above processes need man powers that are managed by HR department and paid by Payroll Accounting department.

All of the above processes can be recorded by SAP R/3 in: Continue reading

Accounting (FICO) Journal of MM Goods Issue, Transfer Posting, and Physical Inventory Difference Transactions

Goods Issue(GI)
T-Code used: MIGO or MB1A.

The Goods Issue transaction will trigger cost accounting process. Cost accounting will record the expense occurred from the goods issue transaction whether it will be charged to cost center, cost of goods sold, or other objects.

The required field that must be filled in all Goods Issue process:

  • Material number which will be issued
  • Quantity issued
  • Plant from where the material issued
  • Storage location from where the material issued

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Accounting (FICO) Journal of MM Goods Receipt (GR) and Invoice Receipt (IR) Transactions

GR for initial entry for stock balance (movement type: 561).

T-Code used: MIGO or MB1C.

We must carry out an initial entry of stock balances when implementing the MM module of SAP R/3 System in order to transfer physical warehouse stocks or book inventories from an existing inventory accounting software into the SAP R/3 System as book inventories.
“Typically, a traditional accounting software program usually has an inventory sub module which records the inventories values in the balance sheet. But it’s not an online accounting software which record the inventory movement transaction in real-time basis like SAP does. Usually, this accounting software records the material movements transaction once in a certain period, e.g. once a month after get the information from other department.”

In the GR for initial entry for stock balance transaction, no physical movements actually take place.

The the typical accounting journal is: Continue reading