When activated, for each goods receipt of a stockable material the system automatically makes an additional posting:

• Debit: Purchase account
• Credit: Adjustment purchase account

To fulfill this legal requirement, SAP has set up Purchase Account Management. You need to activate this functionality per company code. I’ll describe the customizing of Purchase Account Management and then go through an example to show the results of the customizing.

Set Up Purchase Account Management

You can find the settings for Purchase Account Management within the customizing settings for Materials Management. In the customizing menu follow menu path Materials Management > Valuation and Account Assignment > Account Determination > Purchase Account Management. This path has all the settings for Purchase Account Management except for those regarding automatic postings. You can find those settings by following menu path Materials Management > Valuation and Account Assignment > Account Determination > Configure Automatic Postings.

I will now explain the different settings for Purchase Account Management.

Step 1. Activate purchase account per company code. You do this by simply setting the Purch.acct indicator for each applicable company code (Figure 1). You can also do this when maintaining the global parameters for the company code in transaction OBY6. By activating Purchase Account Management, you ensure that SAP automatically creates the additional postings on the purchase accounts.

Figure 1

Activate Purchase Account Management

Step 2. Calculate the value for the purchase account. With this transaction you determine which value you want to post to the purchase account. You can choose between the stock value and purchase value. Figure 2 shows an example of the settings for the calculation of the value the system posts on the purchase management account. The first indicator, called Recpt val., determines whether the system posts the purchase value or the stock value. In this example the indicator has been set, meaning that the system posted the purchase value. During goods receipt, the system posts the value according to the purchase order. During invoice verification the system posts the possible price difference between the purchase value and invoice value on the purchase management account.

Figure 2

Settings for value determination for the purchase account

The second indicator, called Del.costs, determines how the system posts delivery costs. Delivery costs are always posted on a purchase management account for freight costs. The value equals the freight costs as specified in the purchase. When the indicator is set, as in the example, then during invoice verification the system posts freight cost price differences on the purchase management account. In the last column (From year) of the screen in Figure 2 you can enter the fiscal year from which the entry is valid, but it’s optional.

Now I’ll go through an example to show the difference between both indicators not set and both indicators set. Say there is a purchase order for the purchase of 10 pieces of a material. The standard price for the material is 100 Euro, the purchase order price is 125 Euro, and the delivery costs are 20 Euro. The value of the purchase invoice is 1302 Euro, of which 22 Euro are delivery costs so the material cost is 1280 Euro.

Table 1 shows the postings resulting from the goods receipt and the invoice receipt. (The standard SAP system uses the GR/IR clearing account as an intermediate account in the process of goods receipt/invoice receipt.) The dotted line indicates what is posted in which document if the document split indicator is set (see step 3).

Step 3. Create separate accounting documents for purchase account postings. For legal reasons in specific regions (e.g., Italy), you need to create two separate FI documents for purchase account postings and for the purchase offsetting account. This is only possible if the postings on the purchase account are against receipt value. It is not possible to have separate documents when you post against the stock value.

When you post the goods receipt, the first document contains the postings to the stock account, the purchase offsetting account, and, if applicable, the price difference. The second document contains the postings to the GR/IR clearing account and the purchase account. If the purchase order contains delivery costs, it also contains the postings to the freight purchasing account.

When you post the purchase invoice, the system only automatically posts a second document if there are price differences. The first document contains the vendor item, the GR/IR clearing account, the purchase account and, if applicable, purchase freight account. The second document contains the postings to the purchase offsetting accounts and the stock or price difference account.

The customizing of a separate accounting document for the purchase accounting postings consists of five steps. When you select Separate Accounting Document for Purchase Account Postings from the customizing menu, you see a pop-up menu stating these five steps (Figure 3). The settings for the document types to be used for the separate posting are global settings, so they are applicable for all organizations for which you activated the separate accounting document.

Figure 3

Pop-up menu for separate accounting document for purchase account posting

Follow this process:

Activate the separate accounting document in the required valuation areas. In this step you indicate that you want to activate the use of a separate document for a specific valuation area. Depending on your customizing setting for valuation level within logistics, you either activate the separate documents on plant level or company code level. Figure 4 shows the activation for the French company code on plant level.

Figure 4

Activate separate accounting document for Purchase Account Management

Define a new document type for the second accounting document. For the second document you use a document type that is different from the first posting. You can define new document types for the second posting, but you only need to do so if you can’t or don’t want to use a document type delivered with standard SAP. Sometimes it is not possible to use an existing document type because there is no document type available that you haven’t used yet. You can make the usage of document types dependent on the transaction used for the goods receipt and invoice receipt. See the fourth and fifth steps of this section for more information. The creation of new document types is a very common standard activity in the SAP system so I won’t discuss it further.

Configure the number range for the new document type. If you have defined a new document you may allocate this to a special number range. This may be useful for reporting purposes. Creating a new number range and allocating it to a document type is a very common standard activity in the SAP system so I won’t go into more detail.

Inventory management: Configure the document type for a separate financial document. You need to assign a document type to all the transactions that generate goods movements with reference to purchase orders, such as MIGO, MIGO_GI, and MIGO_GR. You also need to assign the new document type for automatic movements (for example, movements from Kanban and Quality Management). Figure 5 shows how the goods movement transaction codes starting with MIGO are assigned to document type WI.

Figure 5

Assign document type to inventory management transactions

Invoice verification: Configure the document type for separate financial document. You must assign a document type to all the transactions for logistics invoice verification, such as MIRO and MIRA. Figure 6 shows the logistics invoice verification transaction codes MIRA and MIRO assigned to document type SU.

Figure 6

Assign document type to invoice verification transactions

Step 4. Configure automatic postings. The final activity to set up Purchase Account Management is to define the settings for the automatic postings on the purchase management accounts. The transaction code for the settings of the automatic postings is OBYC. When you start this transaction you see a pop-up window. Click on the Cancel button. You then see the main screen for maintaining the settings of automatic postings within Materials Management (MM) as shown in Figure 7.

Figure 7

Main menu automatic postings in MM

Click on the Account assignment button to go the overview screen with transaction keys. The SAP system has predefined transaction keys in transaction OBYC. Within the MM module you can configure the automatic financial postings by making customizing settings per transaction key. A transaction key represents part of a business event within MM. You cannot add or remove transaction keys; you can only customize them so that the financial postings are correct. For Purchase Account Management you must maintain the settings for the transaction keys EIN (for the purchase account), EKG (for the purchase offsetting account), and, if required, FRE (for the purchasing freight account) (Figure 8). The last setting is optional. Not all companies use freight costs within the purchasing module.

Figure 8

Overview transaction keys within transaction OBYC

You need to maintain the settings per transaction key. The way you do this is the same for all three transaction keys. Double-click on the line with the transaction key that you need to maintain. In the pop-up window that appears, enter the chart of accounts for which you want to make the settings. After you enter the code of the chart of accounts, the system shows the screen in which you can enter the purchase management accounts (Figure 9).

Figure 9

Assign accounts in transaction OBYC

In this example, you must assign a G/L account per valuation class. The settings that are applicable depend on the settings for the Rule belonging to the transaction key. The rule belonging to the transaction key determines on what level you need to assign the account. To see how the rule is defined, click on the Rules button. In this example the rule has been defined that you must assign the purchase management accounts at valuation class level (Figure 10). Save your entries after assigning the purchase management account. After making all the settings you are ready to use Purchase Account Management.

Figure 10

Define rules in transaction OBYC

An Example in the SAP System

Now I’ll show you an example in R/3 (Release 4.7C in this example, but it works the same in other releases) to show how the postings look in reality. The example is based on the same figures that I used in Table 1. Say there is a purchase order for 10 materials. The standard price is 100 Euro per piece, the purchase price is 125 Euro per piece, and 20 Euro is assigned to the purchase order. This makes the total value of the purchase order 1270 Euro. The value to be posted on the purchase management accounts is based on the actual values (Figure 2). Figure 4 shows that you set the separate document indicator.

Goods Receipt

In this example you use transaction MIGO to post the goods receipt. Because the document split indicator is set, the system automatically posts two financial documents.

The first document contains the stock account, price difference account, and the purchase management offsetting account (Figure 11). The amount on the stock account equals the standard material price multiplied by the purchase order quantity. The amount on the purchase management offsetting account is the value of the material in the purchase order including the freight costs.

Figure 11

First document goods receipt

The second document holds the GR/IR postings and the purchase management account postings (Figure 12). The values on these accounts are based on the purchase order values.

Figure 12

Second document goods receipt

Invoice Receipt

You post the invoice receipt with transaction MIRO, the standard transaction for logistics invoice verification. The first document contains the vendor account, GR/IR postings, and the purchase management account postings (Figure 13). The amount on the vendor account equals the actual invoiced amount. The amounts on the GR/IR account are opposite amounts of the goods receipt. The amounts on the purchase management accounts are the values between the purchase prices and the actual prices of the vendor invoice.

Figure 13

First document invoice receipt

The second document holds the price difference account and the purchase management offsetting accounts (Figure 14). The values on these accounts are the differences between the goods receipt values and the actual invoiced amounts.

Figure 14

Second document invoice receipt

Kees van Westerop

Kees van Westerop has been working as an SAP consultant for more than 25 years. He has an MBA degree in mathematics and a degree in finance. Kees has been concentrating on the financial modules, especially in general ledger accounting, cost center accounting, and consolidation. He also has a great deal of experience with rollouts of kernel systems and integrating finance and logistics.

You may contact the author at keesvanwesterop@hotmail.com.

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