Posted by: ahmedashfaque | August 27, 2014

What is SAP – goods movement in inventory management 2

In my last post, i discussed about goods movement in SAP. We will continue to discuss it further in this post.

Whenever any goods movement happens there is a direct impact on financial as well as stock accounting. To take care of these aspects, SAP has developed a concept known as movement type. Movement type is always linked with some financial and material accounting. Which accounts will be impacted with a goods movement depends on settings done inside SAP for each movement type. For example when goods receipt happens then 2 financial entries are done in financial accounts. One entry is for PO and the other is for inventory stock. The PO account is debited and the inventory account is credited during goods receipt. In SAP there is a movement type number 101 for goods receipts. Like financial entry, a stock entry is also done. This results in increase in stock when goods receipt happens and decrease in stock when goods issue happens.

When goods movement happen inside the same valuation area (e.g. inside a plant) then there is no change in valuation of material. In such cases, entry into financial accounts is not done as they are not affected due this type of goods movement. But when goods movements happen between a plant and some outside organization (so the valuation area is not the same) then in those cases, entries into financial accounts is always done.

In most goods movements, financial and material accounts are updated automatically in SAP. This happens because goods movements are always done through movement types. And in most cases, these movement types are linked with financial and material accounts.

When for any goods movement, if financial accounts are not linked with the movement type then the user has to manually assign the financial accounts. For example, movement type associated with goods receipt for non stock materials is never linked with a financial account. In this case, the user has to assign the financial account manually.



  1. […] the last post, we had seen how inventory management postings related to goods movements are posted in SAP. To day […]

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