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SAP MM Automatic Account

Determination
Date: 2006.10.27 | Category: Materials Management
(MM), Procurement, Supply Chain Management (SCM) | Tags:
Sometimes I wonder how many implementations it would take to get the
Automatic Account Determination process down-pat.

Every consultant I’ve dealt with has had to brush up on the account
determination process before implementing it, no matter their experience
level.

So, for my sake, and yours, here’s a simple (as much as it can be)
explanation of what Automatic Account Determination is, what it does, and
how to do it.

Why do I need Automatic Account


Determination?
Every time a transaction with financial implications is run, postings must
be made to financial accounts. I’m a logistics consultant, so to be honest, I
don’t care. But it has to happen, so since this is anintegration
point between us and FI, unless you can make the FI consultant do it, we
have to fight through it.
We could let the user enter the GL account each time we post an invoice
or goods receipt, but SAP is supposed to be a productivity tool, so that’s
not really acceptable.

So, the idea is that the system will determine (based on our config) what
account to post to depending on a number of factors, namely; company
code, valuation area (plant vs company code), material / material type,
transaction or business event and movement type.

So, with five variables, the determination


system must be pretty complex?
Yes. When you come to understand the way SAP have done it, it is an
elegant solution, but it is pretty damn complex.
Before you begin, sit down with the FI consultant, find out what accounts
there are and in a business sense, how and when each of the accounts
should be posted to. Discuss all five of the categories above. With this info
set in concrete in front of you, you can begin the SAP config.

Here’s the lowdown, try and stay with me.

Essentially all that is happening is that SAP are allowing us to maintain a


record of “if x and y happen, then use account z” and “if a and b occur
then use account q”.

I can just imagine the conversation many years ago in Germany


(translated for your convenience):

“Ok, we need a table of possible outcomes for account determination.”

“That’s faaarrr too easy. Let’s break it into fifty different tables, come up
with many interchangeable names for the same thing, and hide the tables
beneath several different, unimaginable directory paths.”

Configuration Steps
First up, since we have to do something first, let’s specify our valuation
control. This is done via IMG > Materials Management > Valuation and
Account Assignment > Account Determination > Account Determination
Without Wizard > Define Valuation Control.

All that we’re doing here is specifying whether the system should consider
the valuation grouping code in it’s determination procedures.

“What’s the valuation grouping code?” I hear you asking?

The valuation grouping code (vgc) is a collection of valuation areas that


will have the same account determination. Since a valuation area can be a
company code or plant, we can say that a vgc represents a group of
plants or company codes that have the same account
determination.
If you don’t use the valuation grouping code, you’ll have to set up account
determination for each plant or company code in SAP.
If you’re using the vgc, then jump into “group together valuation areas”
and assign your company codes or plant a code (any code). They should
be somewhere in the list automatically, all you should need to do is give
them a code.

The next step is to manage different account determination per material


type. This is where it can get complicated if you let it.

The valuation class is linked to an account category reference. The


account category reference (acr) is an artificial code which allows
flexibility in linking material types with valuation classes.

“Huh?” I hear you asking. Let’s consider the alternatives.

We could relate the GL account directly to the material type. This would be
easy to setup for a few material types, but would take a huge amount of
time for many material types, and would be hard to understand if changes
needed to be made.

We could use the valuation class, assign the GL account to it, and then
assign valuation classes to material types. This is better, since we could
for instance have a “Raw Materials” vc and a “Finished Materials” vc and
then simply link all the various material types under each category to the
valuation class. This would make updates and initial loads easier, but
there is still one thing missing, a material type can only be part of one
valuation class and can only post to one account.

However, in the real world, a material type may post to different accounts
depending on things other than just the material type, such as plant,
movement type or indeed any of the factors above.

So, we have an account category reference which is linked to a material


type. This acr is then linked with a valuation class and the GL account is
linked to the valuation class. So a material type can be linked to one or
more valuation classes (and hence GL Accounts) and in turn, a valuation
class can be linked to multiple material types (enabling ease of
understanding and updates).

Now that you (hopefully) understand that, the actual updates are pretty
simple.
Go to transaction: IMG > Materials Management > Valuation and Account
Assignment > Account Determination > Account Determination Without
Wizard > Define Valuation Classes and begin by defining your valuation
classes. Then define your account category references and go back into
your valuation classes and assign them (or you could do the acr’s first).
Then go into your material types and assign your acr’s to your material
types and done! For the moment.

At this point we should consider another factor, the actual business event
that is occurring and it’s effect on account determination. This is another
area where you have to try and see through the impenetrable fog of
terminology.

Each time “something” occurs in the system it produces a “key” for each
of the postings that need to be made (i.e. debit and credit). This “key” is
entered in our account determination procedure so that postings for credit
and debit go to different accounts. Simple aye?

Well when (as far as I understand) the “something” can be called


‘transaction (key)’ or ‘event (key)’ and the “key” can be called ‘value
string’, ‘posting rule’ or ‘posting string for values’ and the column header
in SAP for the “key” says “Trans”. Fun, fun, fun.

The combinations of movement type and “keys” and how they are
determined are all internally programmed by SAP, so we don’t really care.
What we do care about is the account modifier or ‘account grouping code’.

This is the topic I spent the most time on, and I’m still not completely
clear, so don’t feel bad if you’re confused.

The account grouping code (aka account modification code, modifier or (in
SAP) general modifier) is a three character code (which rather oddly
has no link with the posting strings (“key”)) which we use to break
account determination down by movement type.
For example, by default in SAP, the system says for movement type 101
and posting key PRD there is no modification. So the account
determination is not different based on movement type. However, I can
enter a code (e.g. AAA) against movement type 101 and posting key PRD
and code BBB against movement type 102 and PRD.
Then in ‘Configure Automatic Postings’ when we go into posting key PRD,
we will make entries for ‘general modifier’ AAA, account 100000 and BBB
of 100001 (there will also need to be an entry for a “blank” modifier which
should cover all the other movement types).

So, make sense? Hopefully.

Now you need to go through and for each posting key that we’re
concerned with, record each of the defining factors mentioned above (you
don’t need to enter them if you’re not using them) and enter a GL account
for each permutation.

You should now find that your account determination is working. I wouldn’t
put any money on that promise. My hope is that having read this guide,
you’re a little bit closer to having your account determination working, and
that in conjunction with a number of other resources you’ll get there
eventually.

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