SAP Accounting Entries from MM

SAP MM Accounting Entries

For Moving average price (MAP)

E.g. : Purchase new material $22 quantity = 2 pcs

During Goods Receipt
Dr. Inventory Account $22
Cr. GR / IR Account $22

During Invoice Verification
Dr. GR / IR Account $22
Cr. Vendor Payable $22

Price Control V – Moving Average Price (MAP)
If current MAP of Material Master is $8 , quantity = 1 pc
Now we Purchase additional material $22 quantity = 2 pcs

During Goods Receipt
Debit Inventory $20
Credit GR/IR $20
New Moving Average Price = ( $22 + $8) / (2 + 1)

During Invoice Verification
Debit GR/IR 20
Debit Inventory 2
Credit Vendor 22

SAP recommends: Price control V (MAP) for raw materials and trading goods; price control S (Standard) for semi-finished products and products.

MAP are used mainly for raw materials that are purchased externally. The advantage of using MAP for your raw materials is that your inventory costs will always reflect the current market cost.


SAP strongly recommends that you do not select price control V for semi-finished products and finished products, because doing so will very easily cause the calculation of unrealistic valuation prices.

If MAP is used, you have to be very careful with Invoice Verification, as Invoice price discrepancies affect the stock account and MAP.

The following example demonstrates this;

A Material is ordered at $1 , then received and posted to the inventory account.
If clerk entered for $10 for this PO by mistake, it will be blocked for payment,
BUT, $9 will be posted to the inventory account and the MAP will change to $10.

Any issues that occur until the correction is made will be at the inflated price and will NOT be automatically corrected when the credit note is received or the Invoice is reversed/cancelled.

(Because of this problem that you get the warning messages in InV. and POs stating that the MAP will change by more than X percent.

It is warning you that you will be corrupting the MAP).

Also See: Inter-Company Billing – Automatic Posting To Vendor Account

Recommended Reading For You

  • What is Consumption based Planning in SAP MM?What is Consumption based Planning in SAP MM?The below sap mm tutorials (Material Management) will help to know more on the consumption based planning in sap mm. The central role of material requirements planning is to monitor stocks […]
  • What is Invoice Verification in the SAP System?What is Invoice Verification in the SAP System?The SAP system is made up of several components linked together so that different departments within a company can cooperate with one another. The Invoice Verification component is part of […]
  • How to Create Activity types [KL01] in SAP?How to Create Activity types [KL01] in SAP?SAP Activity types are activities provided by a cost center. They are measured in units of time or quantity. Activity quantities are valued using a price. For e.g. Activity types are used […]
  • What are all accounts important for Invoice Verification?What are all accounts important for Invoice Verification?As we know that the Invoice Verification is a sub-component of MM and it has its integration with other sub-component of MM Module such as Purchasing and Inventory Management. Since SAP […]
  • How to do Material Ledger Multiple Currency?How to do Material Ledger Multiple Currency?Material Ledger Multiple Currency: The system stores valuation data for a material in its material ledger in up to three currencies. You specify in which currencies the system stores this […]
Comments(5)
  1. Oscar Mar 15, 2013
  2. Tom Mar 30, 2013
  3. maryland cpa Apr 1, 2013
  4. sivarangaiah Oct 10, 2014
  5. SAP SD Online Training Dec 15, 2014

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: