Do checkout this commonly asked SAP MM Interview Series and prepare for your interviews easily. This is Part 7 of 10 Part Series.
SAP MM Interviews Series
1. What are the accounting entries for subcontracting & consignment procurement?
Subcontracting & consignment both involves different accounting entries. The accounting entries for both consignment & subcontracting are as followe: Subcontracting Procurement: In this, the company gives the raw materials from the vendors, then vendor uses that raw material to create finished products & gives them back to the company. Accounting entries for goods issue for subcontracting are posted in MB1B and MIGO and are “Credit” for raw material inventory stock and ‘Debit’ for subcontracting stock account. Accounting entries for goods receipt of finished goods from subcontractor are credit for GR/IR clearing account, debit for ginished goods inventory account. For consumption of raw material, accounting entries are debit for consumption account & credit for subcontracting stock account. For invoice receipt (vendor payment), the entries for debit and credit are GR/IR clearing account and vendor account respectively.
Consignment Procurement: The organization stores all the goods by the vendor at its own place. The main account entries involved vendor payment, consignment stock withdrawal, receiving consignment stock etc. There are no posting to financial accounts for consignment stock. The entries for withdrawal of consignment stock are debit for inventory account and credit for consignment payable account. The entries of incoice receipt (vendor payment) are debit for consignment payable account and credit for vendor account.
2. What do you understand by STO in SAP MM? Which field in Material Master Data in SAP MM will trigger STO?
STO is Stock Transport Order in SAP MM which is a document used to move the materials from one plant to other plant, within multiple company codes. It helps in internal transfer of stocks. STO also helps in integration of all other SAP Modules for easy stock movement. STO are of two types including within same company stocks or between different company codes. ME21N is the tcode to create stock transport order. Major key fields in material master data which is used to trigger the STO are: Purchasing view, plant or storage relevant data, material type, MRP data and special procurement key. By using STO, companies can manage the internal stock movements & maintain accurate inventory records.
3. How account determination is being done in SAP MM?
Ans: In SAP MM, Account determination is a complex way in which all the financial transactions are being mapped to the correct General Ledger accounts. This helps in ensuring all the procurement activities happened, should be reflected in the financial statements. Account determination is based on some key points which includes: Valuation Class helps determining the GL accounts for the posting. Account Category Reference links valuation class to the material type. Transaction/Event Key defines the transaction type eg GR/IR etc. Account Grouping Code which used to group similar type of transactions thegther.
The steps to determine the accounts include: First, valuation control is being defined & then account category reference is being assigned to the material types. Then, configuration of the automatic postings are being done. This process is very much crucial to maintain the correct financial records and to ensure all the procurement activities are being correctly done.
4. What is Quota Arrangement and how quota rating is being calculated in SAP MM?
Ans: When the total required quantity of any particular material is divided amongst different vendors, to order, based on predefined percentage, then that is known as quota arrangement tool. This way the suppliers and vendors relationships can be maintained and a balance can be created amongst the orders between them. It basically defined the combination of material and plant both, over a specific period of time. When the system creates some kind of PR or PO, it uses this quota arrangement to determine which vendor though order from & what level of quantity to order. Following are important key points for quota arrangements which are quota i.e. the proportion of total requirement out be allocated.
Quota arrangement usage which is whether the quota is active or not for a particular material. Quota based quantity which is the quantity which is already been ordered or planned to order. Quota allocated quantity which is already allocated to vendor but not yet ordered. In SAP MM, the quota rating is being determined using the below formula: (Quota Base Quantity+Quota allocated quantity)/quota This tool helps to ensure the balance between the procurement orders among multiple vendors.
5. How is scheduling agreement created in SAP MM?
Ans: Scheduling agreements are basically the long term purchasing arrangements done with the vendors for a specific period or scheduled delivery of time. The scheduling agreements mainly contains the details such as materials, delivery dates, quantities etc. Here how we can create scheduling agreements: Go to the Tcode ME31L to topen create scheduling assignment screen.
Enter the details of vendor, PO, Purchasing Group, Company Code. Enter the document type and the header data. Add all the item details & delivery schedule lines with the pricing conditions. Check all for the errors. Save the scheduling agreement once all the details are being done. ME32L and ME33L are the tcodes to manage the scheduling agreements.
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