FI SD Integration

Account Determination is an important integration between SD & FICO modules. whenever a sale takes place, the system automatically posts the various prices and discounts and freights to the respective GL accounts through the account keys.

The account key is assigned to the respective GL account. Also in the pricing procedure we have a column called as account key(second last column). There we assign the account key. For eg., in Std SAP for basic price we have acct key ERL, for discounts ERS, for Output tax MWS, for freight ERF, etc. These account keys are basically defined by the FICO consultant and then the SD consultant assigns the respective account keys against the respective condition type in the pricing procedure.

The customer group is nothing but the grouping of various customers like wholesaler, retailer, subsidairies, etc. This is basically useful while maintaining pricing like for X group basic price is 10Rs, for Y group it is 15Rs. like that. Similarly material group is a grouping of materials like Ball pens, ink pens, gell pens, etc.

When you create the condition table and select these fields and save it and when you assign this table to your access sequence, the system searches for the condition record according to this key combination. For that you have to maintain the condition record in VK11.

Now you are done with pricing. you create the sales order. delivery and invoice. Now for the system to generate an accounting document when you save the invoice in VF01 you have to maintain the account determination correctly otherwise the system will give an error - "error in account determination." For doing account determination you have to go to : IMG-sales & distribution-basic functions-account assignmentcosting-revenue account determination.

In this you first have to maintain the customer account assignment group and material account assignment group. This group for the customer means for which customer whether domestic or foreign etc. For material whether finished, semi finished, raw material, etc. You can also maintain as per name of the division.

This account assignment group you have to assign in customer master as well asmaterial master. In customer master (XD01) -sales area data- billing you have customer acct asst group, make an entry here. In material master (MM01)-sales:sales org.2 you have account asst group, make a proper entry here also.

Note: Regarding condition types KOFI & KOFK KOFK: KOFK is used when ever we are posting the document where a cost is involved that can be checked via the Requirment class in the Sales order in the Procurment step. In the requirements class there is "E" in account assignment category & hence you have to use KOFK.

KOFI: If there is no "E" in the account assignment category then use KOFI.

Now in the above IMG path only you have access sequence, condition type,procedure. maintain everything and assign properly the procedure to the billing document type.

Define the account keys & assign them properly in the pricing procedure. Now go to transaction code VKOA. You will see 5 tables. first is customer group/material group/acct key. When you double click on this it will show as following: Application, condition type, chart of accounts, sales org., customer acct asst group, material acct asst group, acct key, G/L acct, provision acct. depending upon your customer type and material type you have to maintain all the columns and the respective G/L accounts. The first table is for more specific assignments & the other tables are for general assignments.

Now whenever you make a sales order, delivery and invoice and when you save the incoice the system will automatically post the price, discount, tax, freight to the respective G/L accounts. This will make an accounting document which will show the exact value of price, discount, tax, freight for that particular transaction Apart from this when you do PGI in the delivery the system updates various G/Laccounts related to inventory.

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1. Whenever you create a delivery with reference to a sales order, goods movement takes place in the bacgground. eg. In case of standard sales order, you create an outbound goods delivery to the customer. Here movement 601 takes place. This movement is configured in MM. Also, this movement hits some G/L account in FI. Every such movement of good s hits some G/L account.

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2. The accounts posting in FI is done with reference to the billing documents (invoice, debit note, credit note etc) created in SD. Thus this is a link between SD and FI 3. Tax determination: In case of a tax determination also, there is a direct link between SD and MM

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SD Integration points with other modules

SD module is highly integrated with the other modules in SAP.

Sales Order Integration Points Module Availability Check Credit Check Costing FI MM

CO/ MM FI PP/ MM

Tax Determination -

Transfer of Requirements -

Delivery & Goods Issue Integration Points Module Availability Check Credit Check Reduces stock FI MM MM

Reduces Inventory $ Requirement Eliminated -

FI/ CO PP/ MM

Billing Integration Points Module Debit A/R FI/ CO FI/ CO FI/ CO

Credit Revenue Updates G/ L -

(Tax, discounts, surcharges, etc.) Milestone Billing PS

Return Delivery & Credit Memo Integration Points Module Increases Inventory Updates G/ L Credit Memo FI FI FI FI MM

Adjustment to A/R Reduces Revenue -

Accounting Entries:

1. Sales Order Created

-No Entry-

2. PGI done (Goods issue)

Cost of Goods Sold To Inventory Account

Dr (Configured in OBYC GBB T-Key)

3. Billing document released to Accounting

Customer Account Dr. To Sales Revenue Account (ERL T-key in Pricing procedure)

Note : The GL account is assigned to this ERL in VKOA

4. Payment Received

Bank Clearing A/c Dr Customer A/c Cr.

FI MM Integration The following is the flow of both MM & SD and the Entries are as follows. Purchase Order No Accounting Entry will be there during PO. Goods Receipt Inventory Raw Material A/C Dr (BSX) To GR/IR Clearing A/C (WRX) Invoice Receipt GR/IR Clearing A/C Dr (WRX)

To Vendor A/C Payment Vendor A/C Dr To Bank A/C

Consumption Raw Material Consumption A/C Dr To Inventory Raw Material A/C (BSX) Finished Goods Inventory Finished Goods A/C Dr (BSX) To Cost Of Goods Sold A/C (GBB - ZOF) Delivery Cost Of Goods Sold A/C Dr (GBB - VAX) To Inventory Finished Goods A/C (BSX) Billing or Sales Customer A/C Dr To Sales/Revenue A/C (GBB - VBR)

Purchase Order No Accounting Entry will be there during PO. Goods Receipt Inventory Raw Material A/C Dr (BSX) To GR/IR Clearing A/C (WRX) Invoice Receipt GR/IR Clearing A/C Dr (WRX) To Vendor A/C Payment Vendor A/C Dr To Bank A/C Consumption Raw Material Consumption A/C Dr (GBB - VBR)

To Inventory Raw Material A/C (BSX) Finished Goods Inventory Finished Goods A/C Dr (BSX) To Cost Of Goods Sold A/C (GBB - ZOF) Delivery Cost Of Goods Sold A/C Dr (GBB - VAX) To Inventory Finished Goods A/C (BSX) Billing or Sales Customer A/C Dr To Sales/Revenue A/C

This is for Country Version India, Financial Accounting Flow of Entries:

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I. Procurement of Stock. What should be my accounting entry in procurement? For Domestic Procurement of Raw Material During GR Material Stock Dr. GR/IR clearing Cr. During Excise Invoice Credit Cenvat Account Cenvat Clearing Cr. During Invoice Verification Cenvat Clearing GR/IR Clearing Vendor Payable Cr. Dr. Dr. Dr.

For Domestic proceurement of Capital Goods During GR Material Stock Dr. GR/IR clearing Cr. During Excise Invoice Credit Cenvat Account Dr. Cenvat On-hold Dr. Cenvat Clearing Cr. During Invoice Verification Cenvat Clearing GR/IR Clearing Vendor Payable Cr Subsequent of Capital Goods Cenvat Account Dr. Cenvat On-hold Cr. (50%) (50%) Dr. Dr. (50%) (50%)

For Import Procurement of Raw Material During Customs Duty Clearing invoice Custom Clearing Custom Payable Cr. During GR Material Stock Dr. GR/IR clearing Cr. During Excise Invoice Credit Cenvat Account Dr. Custom Clearing Cr. Dr.

During Invoice Verification GR/IR Clearing Vendor Payable Cr. For Excise Duty Credit of Raw Material without PO Dr.

Cenvat Account Dr. Cenvat Clearing Cr. For Excise Duty Reversal through Excise JV

Cenvat Clearing Dr. Cenvat Account Cr. What should be my accounting entry when the goods are issued through MM and excise invoice is created (J1IS & J1IV)? During Excise Invoice Creation Cenvat Suspense Account Cenvat payable Cr. For TR6C Challan PLA Account Dr. PLA on hold Account Cr. During Fortnightly Utilization Cenvat payable Cenvat Account Cr. PLA Account Cr. Note: Cenvat Suspense Account should be cleared apprpiately using FI JV's. What should be my accounting entry in subcontracting reversal / Recredit ? For Subcontracting Challan Reversal Cenvat Reversal Cenvat Account Cr. Dr. Dr. Dr.

For Subcontracting Challan Recredit Cenvat Account Cenvat Reversal Cr. What should be my accounting entry in SD ? For Factory Sale During Billing Document Customer Account Dr. Sales Account Cr. Cenvat Suspense Account Cr. During Excise Invoice Creation Cenvat Suspense Account Cenvat payable Cr. For TR6C Challan PLA Account Dr. PLA on hold Account Cr. During Fortnightly Utilization Cenvat payable Cenvat Account Cr. PLA Account Cr. For Stock Transfer through SD Dr. Dr. Dr.

No Accounting entries for Proforma Billing Document During Excise Invoice Creation Cenvat Suspense Account Cenvat payable Cr. Dr.

For TR6C Challan PLA Account Dr. PLA on hold Account Cr. During Fortnightly Utilization Cenvat payable Cenvat Account Cr. PLA Account Cr. Note: Cenvat Suspense Account should be cleared apprpiately using FI JV's.
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Dr.

II. Central Excise RG 1 - Production & Issues or Inputs form Production and Sales RG 23A Part I - Link Stock Register, only Product details and Quantity details. RG 23A Part II - Cenvat Credit on Incoming Materials & Duty Paybale on Outgoing Materials or on Sales (Monthly Register) Excise PLA Register - TR 6 Challans Form No. 5 Register - For Return Goods (Form D3 to be submitted to Excise Dept.,) In SAP the Movement you save the MIGO Transaction, it automatically generate FI Document. It will create the following entry. i). Inventory Raw Material A/c To GR/IR Clearing A/c Cr Dr

In MIGO Transaction itself, you can post Excise by choosing capture and post Excise Invoice. The FI Document will be as follows. ii). RG 23 A Basic Excise Duty A/c To Canvat Clearing A/c Cr Dr

After doing MIGO, you execute MIRO. In this transaction also SAP will generate FI document automatically. The Entry will be as follows: iii). GR/IR Clearing A/c Dr

Cenvat Clearing A/c Dr VAT Setoff A/c Dr To Vendor A/c Cr

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III. Flow of Entries for a Normal Manufacturing Activity: I. On Receipt of Raw Materials: (MIGO-movement type:101) Dr. Inventory of Raw Materials 100 Dr. Inventory of Operating Supplies 20 Dr. Inventory of Packing Materials 10 Cr. GR/IR Clearing A/c 130 II. On Invoice Verification: (MIRO) Dr. GR/IR Clearing A/c 130 Cr. Vendor A/c 130 III. On Goods Issued for Production: (MIGO-movement type:261) Dr. Consumption of Raw Materials 100 Dr. Consumption of Operating Supplies 20 Cr. Inventory of Raw Materials 100 Cr. Inventory of Operating Supplies 20 IV. On Semi-Finished Goods Received form Process: (MIGO-movement type:101) Dr. Inventory of Semi-Finished Goods 120 Cr. Cost of Goods Manufactured (Semi-Finished Goods)120 V. On Issued of Semi-Finished Goods for further Processing: (MIGOmovement type:261) Dr. Consumption of Semi-Finished Goods 120 Dr. Consumption of Packing Materials 10 Cr. Inventory of Semi-Finished Goods 120 Cr. Inventory of Packing Materials 10

VI. On Finished Goods Received from Process: (MIGO-movement type:101) Dr. Inventoyr of Finished Goods 130 Cr. Cost of Goods Manufactured (Finished Goods) 130

VII. On Finished Goods Issued for Sales: (VL01N-movement type:601) Dr. Cost of Goods Sold (Finished Goods) Cr. Inventory of Finished Goods 130 VIII. On Raising Bill for the Customer: (VF01) Dr. Customer A/c 145 Cr. Sales A/c 145 130