How System Chooses Between KOFI or KOFK

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How System Chooses Between KOFI Or KOFK Describe how the system chooses KOFI or KOFK when both are maintained in VKOA. In other

words, I have the entry set up for both conditions, however sometimes it chooses KOFI and sometimes KOFK depending on the billing type, but I don't see the setting on the billing type that

controls this.

Account determination procedure for all is KOFI00 but within this it somehow determineswhether to use kofi or kofk - how?

Explanation:

In the standard SAP, SAP provided 2 condition types for SD module.

1. KOFI - If the using company code is not activated for Product Costing, this condition type will

be used for revenue account determination.

2. KOFK - If the using company code is activated for Product Costing, PA, then this conditiontype will be used for revenue account determination in the financial accounting as well as

controlling.

The difference between KOFI and KOFK is

KOFI -- Account determination without CO

KOFK -- Account determination with CO

You can control through Routine, which you can placed in Requirement Column of the account

determination procedure.

Routine 2 - With CO acct.assigntRoutine 3 - Without CO acct.assignt

If you have both whenever the costing related transfer system will take KOFK, if there is no

costing related transfer system will take KOFI

KOFI is used for the Make to Stock ScenarioKOFK is used for the Make to Order Scenario.

The Controlling is activated from the Requirement Class. This Requirement Class is linked tothe Requirement type which you will find in the Procurement tab in the Sales Order.

The Requirement Type is linked with the Strategy which you maintain in the Material Master

(MRP 3)



Basically it is triggered because in the MTO scenario we are directly linked with the PP module.And PP module is linked with Controlling (Cost centers, etc)

The main difference is the separation between Finance part (KOFI) and Controlling(KOFK) part.

When posting is necessary within FI or CO, system will take settings as defined in the system

with regard to the entries for KOFI/KOFK.

When KOFK is involved it posts both in FI and CO , wherein CO Objects are involved in CO postings. When KOFI is involved, the posting only happens to FI not CO.

If you maintain the CO objects in the sales order, system will choose KOFK to do the further

processing.EX. internal order no from CO.

The key why the KOFK is determined is in:

Sales and Distribution-->Basic Functions-->Account Assignment/Costing-->Maintain

Requirements Classes For Costing/Account Assignment

There is in standard for 039 Service item which I'm using setting Account Assignment CategoryE (Customer indiv. reqt).

I removed this value with a blank, and everything works with KOFI!!!

4. Account determination

4.1. Document flow 4.2. Sales Order

4.3. Goods issue posting 4.4. Revenue Posting

4.5. Account determination configuration 4.5.1. Goods issue - MM account determination

4.5.2. Billing - SD account determination

4. Account determination

Now the sales order process is completed. Let's take a closer look at it from the accounting perspective.

4.1. Document f low



You find the document flow from the menu Environment in every phase of the sales order process. There also a button for it. The document flow looks slightly different depending on the

phase, but if you open it from the sales order, you will see all the phases and sub phases.

The document flow ties together all the documents of the sales process. Put the cursor on the line

and click on 'Display document' to open the document.

Accounting documents are created at the goods issue and billing. The text 'not cleared' beside

accounting document means that the invoice is not paid.

The integration points are following:

Sales order: the profit center is determined and copied to the following documentsGoods issue: posting to inventory and inventory change accounts.

Invoice: posting to revenue account, accounts receivable and tax accounts



4.2. Sales order

Move from the document flow to the sales order. Place the cursor on the Standard Order andclick the 'Display document'-button.

The sales order does not create any documents to accounting. However, some of the accountassignments are decided at this point. There are accounting relevant fields on both header and

item level. The item level fields are more relevant. The sales order items can be splitted intodifferent deliveries and invoices and the accounting information follows the items. Generally you

could say that the header level information is customer related and item level is product related.

Select the sales order line item and then menu Goto / Item / Account Assignment (or doubleclick the item row and open tab Account Assignment).

The profit center is defined at sales order level. Depending on the system settings the profitcenter comes either from the material master (View: Sales:General/Plant) according to delivering

plant (transaction MM03) or from the Sales order substitution rules defined in profit center accounting (transaction 0KEL). With these rules the profit center can be defined for example

according to sales organisation, product or customer characterics.

If no profit center is found and COPA is active, the dummy profit center is used. If COPA is notactive, the profit center is left empty and you will get an error situation in billing.

4.3. Goods issue posting



In the Document Flow place cursor on the GD goods issue: delvy document and click on'Display document' -button. This takes you to the MM Material document.

The movement type for sales delivery is 601.

Click the accounting documents button.



A list of created accounting documents is shown. Click on the Accounting document.

In this example the goods issue posting looks like this.

The stock posting goes to a balance sheet account and the offsetting posting to inventory change

(P&L account).

The posting is created automatically at goods issue and the system has to find somewhere all the

necessary information for the posting. The accounts used are determined in MM automaticaccount determination. The account assignments of the offsetting posting depend on the settings.

If the account is not defined as a cost element the posting goes to the profit center from the

material master.



If the account is a cost element, a cost object becomes mandatory. Usually the system looks for itin the CO automatic account assigment table OKB9. In this example the cost assignment is a

profitability segmentand the posting rules are defined in COPA IMG.

4.4. Revenue Posting

Move from Document Flow to the billing document. Place cursor over Invoice and click on

'Display Document'.

In the invoice you can find accounting information from several places. There is a direct link to

accounting documents. The Accounting button lists all the accountig documents created. Fromthe Environment menu you find Account determination Analysis, which lets you analyze how

the account determination is made. On both header and item level you will also find lots of

accounting relevant data.

4.5. Account determination configuration



4.5.1. Goods issue - MM account determination

At goods issue the the owner of the goods changes and the stock change must be recorded. It is

posted in the balance sheet to the inventory account and the offsetting posting (cost) goes to a profit an loss account Inventory changes.

Account assignments

The inventory account is a balance sheet account. In Profit center customizing you can define

wether you transfer the material stock balance to Profit Center Accounting periodically or on-line. The profit center always comes from the material master according to the delivering plant

(tr. MM03, Sales: General/Plant).

The account assigments of the offsetting posting depend on how the account is defined. If theinventory change account is not defined as a cost element, the posting goes to a profit center.

Here the profit center is copied from the sales order. It can come from a substitution rule or fromthe material master.

If the account is defined as a cost element, it requires a cost assignment, which can be a cost

center, order or profitability segment. As the good issue posting is an automatic posting, thesystem has to find the assignment automatically. It looks for the assignment in CO automatic

account assignment table OKB9. You can also define Automatic assignment to a COPA

profitability segment (COPA-IMG: PA transfer structures, tr. KEI2), which is the case here. .

Accounts

The accounts are defined in MM customizing under Valuation and account assignment. MMaccount determination is not a 'straight forward -task. SAP has has made Wizard to assist in this.

Here I will only show you how to find the configurations for our example.



Start the 'Configure automatic postings under 'Account determination without the Wizard'. If you

get a pop up for missing account grouping code, press cancel. CLick the 'Simulation' button.

Enter the plant (1200), material number (R-1180) and movement type 601 Goods issue Delivery.Press enter and then click the Account Assignments button.



On the simulation screen the system combines all the relevant information and shows theaccounts it has determined.

The MM account determination is based on transaction technique. In inventory postings there is

alwaus the transaction Inventory Posting (BSX). It defines the inventory account, which here is

310000. The system finds this account according to the transaction and valuation class of thematerial.

The transaction for offsetting posting is GBB 'Offsetting entry for inventory'. This transaction

has an extra specifications called Account Modification key, which has a different meaningdepending on the procedure. The system finds this account according to the transaction, accountmodification key and valuations class.

If you are interested on how the account determination works, SAP Press has published a book

about SAP Account determination. In book reviews you find my review of this book.

4.5.2.Billing - SD account determination



The accounting document created at SD billing contains typically following three lines:

- Customer posting in accounts reveivable and simultaneously posting to reconciliationaccount in general ledger

- Sales revenue posting

- Tax postingThere can also be other accounts like discounts. Let's study the origin of these postings.

Customer line / reconciliation account

The first row in the posting is the customer line. It shows the customer number and makes an

open item posting to accounts receivable. At the same time it makes a posting in general ledger to a reconciliation account. Double click the customer line and you can see the reconciliation

account.

The main rule is, that the reconliliation account comes from the paying customer's master data.

For special cases, it is possible to use an alternative reconciliation account. Settings for that can be found in FI and SD customizing.

The reconciliation account is a balance sheet account and has no other account assignments.However, you can transfer the posting to a profit center. This does not happen automatically. At

period end you must first Calculate Balance Sheet Readjustment in FI closing (tr. F.5D9 and thentransfer the postings in profit center accounting (tr. 1KEK).

Revenue posting

The setting for revenue account are defined in SD customizing.



In spite of the title 'revenue account determination', this is where the settings for all other

accounts are made as well.

Select option Assign G/L accounts.

SD account determination is based on condition techniques. The system reads the conditions

sequentially searching for a match. In this IDES case it will find the match on the second level incondition CustomerAccountGroup/AccountKey.

Click on the second row.The table looks baffling, but is really is not that complicated.



In the first column you have the appilication. It is always V, which comes from the german wordfor sales. Next you have a condition type. There are two alternatives. You choose KOFI, if the

posting goes to accounts that in CO are revenue elements (cost element types 11 and 12) and theaccount assighment is profitablity segment (COPA) or profit center. This is usually the case for

revenues and discounts. KOFIK is used if you want to post to an account that is a cost element(type 01) and the account assignment is cost center. In the third column you give the name of

your Chart of Accounts. In the fourth column enter the name of the Sales Organisation. In thefift column you give the Account assginment group of the paying customer . Next comes the

Account assignment key. This is defined in SD customizing and is in SD pricing assigned to SDconditions like sales price.

You don't anywhere define the company code in whose accounting the entry is made. This is

determined indirectly via the sales organisation, which is assigned to the company code.

The Account assignment groups for customers and materials are defined in SD IMG / Accountassignment/costing customizing under 'Check masterdata relevant for account assignment'.

Tax posting

The tax account determination is not done in SD. The account is taken from FI tax accountdefinitions. The tax account is a balance sheet account and has no account assigments.

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

SAP MM Automatic Account DeterminationPosted on December 16, 2007 by Rizki

There are many transactions in Material Management (MM) that relevant for Accounting. These

transactions must be recorded in accounting documents that contain the postings made to the G/L



accounts in Financial Accounting (FI). The mostly used MM transactions that relevant for FI can be seen at Accounting Journals of SAP Material Management (MM) Transactions.

For those transactions, as far as possible, the SAP R/3 System should determine automatically

the G/L account numbers that are involved in the accounting journal. By doing so, we can

minimize the inputs and error possibilities made by MM end-users who perform the transactionsas they don¶t determine the G/L account numbers.

We can do this by Automatic Account Determination process in MM configuration (T-code:SPRO). The automatic account determination process must be done together with Accounting

Department.

The influencing factors that determine how SAP choose the G/L account numbers that are

involved in the accounting journal for MM transactions are:

y Chart of accounts of the company code

We must assign a chart of account to each company code. Several company codes canuse the same chart of accounts. This process must be done in FICO configuration. Youcan learn how to configure FICO module in its relation with MM module at SAP FICO

minimal configuration for MM posting.SAP R/3 determines the chart of account affected by MM transaction from the company

code or plant entered by user when performs a transaction.We must define the automaticaccount determination individually for each chart of accounts.

y Valuation grouping code of the valuation area See Material Valuation to know more about valuation area. The Valuation grouping code

is a key to differentiate account determination by valuation area within a chart of account.Valuation grouping code is also called Valuation modification.

SAP screenshots of How to activate the valuation grouping code(T-code: SPRO /OMWM):

SPRO menu:IMG ± Materials Management-Valuation and Account Assignment ± Account

Determination ± Account Determination Without Wizard-Define Valuation Control

The above image is © SAP AG 2010. All rights reserved A valuation grouping code consists of a group of valuation areas that can have sameaccount determination in a specific chart of account. It is a tool that enables us to

configure the automatic account determination with a minimum of effort.If we activate the valuation grouping code in configuration process, we have to assign a



valuation grouping code to each valuation area.SAP Screenshots of How to define valuation grouping code (T-code: SPRO / OMWD):

SPRO menu: IMG ± Materials Management-Valuation and Account Assignment ± Account Determination ± Account Determination Without Wizard ± Group Together

Valuation Areas.

The above image is © SAP AG 2010. All rights reserved By activating and using the valuation grouping code, we don¶t have to configure account

determination for each valuation area (that is a plant or company code) if we don¶t wantto differentiate it for each valuation area. If we want the automatic account determination

within a chart of accounts runs differently for valuation areas, we can assign differentvaluation grouping codes to these valuation areas.

We must define the automatic account determination individually for every valuationgrouping code within a chart of accounts. It applies to all valuation areas which are

assigned to this valuation grouping code.For example, if we want to differentiate the account determination for a group of two

plants with another group of other three plants in a company code (where the valuationlevel is plant), we can assign a valuation grouping code for the group of two plants and

another valuation grouping code for the group of other three plants. By doing so, we justhave to configure the account determination for the two valuation grouping codes, no

need for five valuation areas (plants).SAP R/3 determines the valuation area and the valuation grouping code affected by MM

transaction from the company code or plant entered by user when performs a transaction.y V

aluation class of material The valuation class is a key to differentiate account determination by materials. For example, we can post a goods receipt of a raw material to a different inventory account

than if the goods receipt were for finished-product.We can do this by assigning different valuation classes to the raw material and finished-

product and by assigning different G/L accounts to the posting transaction for everyvaluation class. If we don¶t want to differentiate account determination according tovaluation classes we don¶t have to maintain a valuation class for a transaction.



The valuation class must be entered in the accounting data view of material master datafor a valuated-material. The allowed valuation classes for a material depend on its

material type. More than one valuation class can be allowed for a material type. Morethan one material type can be allowed for a valuation class. The relationship between

valuation classes and material types is established by the account category reference. The

account category reference is a compilation of valuation classes. A material type isassigned to only one account category reference.

SAP screenshots of How to define valuation classes (T-code: SPRO / OMSK )

SPRO menu: IMG ± Materials Management-Valuation and Account Assignment ± Account Determination ± Account Determination Without Wizard-Define Valuation

Classes.

The above image is © SAP AG 2010. All rights reserved



The above image is © SAP AG 2010. All rights

reserved


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y Transaction/event key (internal processing key)

The Transaction/event key is a key to differentiate account determination by businesstransaction. For example, we must differentiate G/L account posted by goods receipt

transaction and posted by invoice receipt transaction.Posting transactions are predefined for those inventory management and invoice

verification transactions relevant to accounting. Posting records, which are generalized inthe value string, are assigned to each relevant movement type in inventory management

and each transaction in invoice verification. These contain keys for the relevant postingtransaction (for example, inventory posting and consumption posting) instead of actual

G/L account numbers.We do not have to define these transaction keys, they are determined automatically from

the transaction (invoice verification) or the movement type (inventory management). Allwe have to do is assign the relevant G/L account to each posting transaction.

You can see list of transaction key here.



y Account grouping(only for transaction: offsetting entries, consignment liabilities, and price differences)

Account grouping is a key that allows us to subdivide number assignments for eachtransaction key in account determination.

Account grouping is also called general modification. Since the posting transaction

³Offsetting entry for inventory posting´ is used for different transactions (for example,goods issue, scrapping, physical inventory), which are assigned to different accounts (for example, consumption account, scrapping, expense/income from inventory differences),

it is necessary to divide the posting transaction according to a further key: accountgrouping code.

An account grouping is assigned to each movement type in inventory management whichuses the posting transaction ³Offsetting entry for inventory posting´. Under the posting

transaction ³Offsetting entry for inventory posting´, we must assign G/L accounts for every account grouping, that is, assign G/L accounts.

If we wish to post price differences to different price difference accounts in the case of goods receipts for purchase orders, goods receipts for orders, or other movements, we can

define different account grouping codes for the transaction key.Using the account grouping, we can also have different accounts for consignment

liabilities and pipeline liabilities.You can see list of account grouping here.

Configure Automatic Postings

Automatic Postings are postings made to G/L accounts automatically in the case of Invoice

Verification and Inventory Management transactions relevant to Financial and Cost Accounting.When entering the goods movement, the user does not have to enter a G/L account, since the

SAP R/3 System automatically finds the accounts to which postings are to be made using the

influence factors as explain above.SAP Screenshots of how to configure automatic posting (T-code: SPRO / OBYC):

y Posting made in the case of goods receipt (GR) to purchase order (PO):

Inventory accountGR/IR Clearing

Account

500 500

We need to update the BSX transaction key (Inventory posting) with the GL code Inventoryaccount.

SPRO menu:IMG ± Materials Management-Valuation and Account Assignment ± Account Determination ±

Account Determination Without Wizard ± Configure Automatic Posting.




The above image is © SAP AG 2010. All rights reserved Enter Chart of Account which we want to configure its account determination, then enter the G/L

account affected by the transaction as below:

The above image is © SAP AG 2010. All rights reserved We also need to update the WRX transaction key with the GL code GR/IR Clearing account.



The above image is © SAP AG 2010. All rights reserved Enter Chart of Account which we want to configure its account determination, then enter the G/Laccount affected by the transaction as below:


y posting made in the case of goods issue to cost center:

Inventory accountMaterial consumption

expense account

500 500

We have configured the inventory posting transaction in the previous section (GR to PO). Now, we have to configure transaction key GBB. GBB key is used for various offsetting posting

entries. Within GBB transaction there are various account grouping (general modification). Inthis case we need to update general modification VBR with the material consumption expense

account.



The above image is © SAP AG 2010. All rights reserved Enter Chart of Account which we want to configure its account determination, then enter the G/Laccount affected by the transaction as below:

Documents

How System Chooses Between KOFI or KOFK