SAP MM Interview Questions

"It starts with a need. A user raises a purchase requisition in ME51N, or MRP creates one automatically. If we don't have a supplier or price yet, purchasing sends RFQs, records the quotations and compares them. Then the buyer creates a purchase order in ME21N, usually with reference to the requisition, and it goes through release if the value needs approval. When the goods arrive, the store posts a goods receipt in MIGO with movement type 101, which updates stock and posts to inventory and GR/IR. Then accounts payable enters the supplier invoice in MIRO, which matches it against the PO and the receipt. That creates an open item on the supplier account, and finance pays it, usually through the automatic payment run. So MM owns everything up to the invoice, and the payment itself sits with finance."

"The company code is the legal entity that produces its own books. Under it sit plants, which are the factories, warehouses or offices where stock is held and valued, and under each plant sit storage locations, which are just where the stock physically sits. The purchasing organisation negotiates with suppliers. If I assign it to one company code, it buys only for that company; if I leave it unassigned and link it to plants from several company codes, it buys centrally across companies. A plant can be linked to more than one purchasing organisation. The purchasing group is different: it's the buyer or team of buyers responsible for a document, and it isn't assigned to anything in the structure. It's used for reporting, responsibility and often in release strategy."

"The material master is split into views, and each is maintained at a different organisational level. Basic data, like the description, base unit of measure and material group, is at client level, so every plant sees the same values. Purchasing, MRP, work scheduling and quality data are kept per plant, because the buyer, lead time or MRP type can differ from plant to plant. Accounting and costing are kept per valuation area, which is normally the plant, so the same material can have a different price in each plant. Storage location data sits below the plant, sales data sits per sales organisation and distribution channel, and warehouse data per warehouse number. In practice, when a user says a material doesn't exist, it usually does exist but hasn't been extended to their plant or storage location, and I fix that in MM01 by adding the missing views."

"The material type groups materials that behave the same way. The standard ones include ROH for raw materials, HALB for semi-finished, FERT for finished goods, HAWA for trading goods, NLAG for non-stock items and DIEN for services. The type controls which views a user can maintain, which number range the material gets and whether numbering is internal or external. It controls whether quantity and value are updated in each valuation area, so a non-stock material has no quantity update at all. It sets the default price control, and whether the material may be made in-house, bought, or both. Through the account category reference it also limits which valuation classes are allowed, which drives the GL accounts. I'd create a custom type when a business group needs different numbering or screens, for example spare parts with their own number range, and I'd usually copy a standard type rather than change it."

"With standard price, the stock is always valued at the fixed price in the accounting view. Say the standard is 10 and the PO price is 12. At goods receipt, inventory is debited at 10 per unit, GR/IR is credited at 12, and the difference of 2 per unit goes to the price difference account. The material's price doesn't move. With moving average price, inventory is debited at 12, and the system recalculates the average from the total stock value divided by the total quantity. If the invoice later comes in at a different price, under standard price the gap again goes to price differences. Under moving average it goes to stock, as long as the quantity received is still in stock; if some has already been issued, that share goes to price differences. Typically finished and semi-finished goods use standard, and bought-in materials use moving average."

"Split valuation lets one material carry different values within the same plant. A classic case is a spare part that's bought new and also repaired: the refurbished ones are worth less, but they're the same part number for planning. Another is the same raw material bought locally and imported at very different costs. To set it up, I activate split valuation globally, define a valuation category, like origin or condition, and the valuation types under it, like new and repaired, then assign them to the plants that need it. In the material master I set the valuation category in the accounting view, and then create an accounting record for each valuation type, each with its own price. From then on, every goods receipt or issue has to say which valuation type it's for, and it's common to link that to a batch. The header record just adds up the types, and it always runs on moving average price."

"A purchase requisition is an internal request. It tells purchasing what's needed, how much and by when, but it doesn't commit us to anything and it posts nothing to accounts. A purchase order is the external, legally binding document we send to the supplier. To convert, a buyer can open ME21N and copy the requisition into the PO, or use ME57 to see all open requisitions, assign sources to them and create POs in bulk. There's also an automatic route with ME59N. For that to work, the requisition needs a source of supply already assigned, and the automatic PO indicator must be set in both the material master purchasing view and the supplier's purchasing data. Requisitions can come from users or from MRP, and they can also go through their own release before anyone is allowed to convert them."

"Source determination checks the master data in a set order. First it looks for a quota arrangement, which splits requirements between several suppliers by quota. If there isn't one, it checks the source list, which says which suppliers or agreements are allowed for this material in this plant and period, and marks one as fixed or blocks others. Next it looks at outline agreements, meaning contracts and scheduling agreements. Last, it falls back to purchasing info records. The info record is the link between one supplier and one material, holding the price and conditions, the planned delivery time, the order unit and tolerances, and it can be kept per purchasing org and plant. If a business wants tight control, I set the source list as mandatory for the plant or the material, so a PO can't go to a supplier that isn't on the list."

"Both are outline agreements, meaning a longer-term deal with a supplier. A contract commits us either to a total quantity or a total value over a period, but it has no delivery dates. Each time we need something, we create a release order, which is really a PO that references the contract, so the price comes from the contract and the consumed amount is tracked against it. That suits things like office supplies or maintenance parts bought on demand. A scheduling agreement is for repeated deliveries of the same material, like components to a production line. Instead of creating POs, we keep delivery schedule lines on the agreement, either by hand or from MRP, and the supplier ships against those. With release documentation switched on, we can send forecast and short-term just-in-time schedules separately. Less paperwork, and it fits steady, planned demand."

"The item category says how the item is procured. Blank is a standard stock item. K is consignment, L is subcontracting, S is third-party where the supplier ships straight to our customer, U is a stock transfer between plants, and D is a service. It controls things like whether a goods receipt or an invoice is expected and which fields are required. The account assignment category says where the cost goes. K means a cost centre, F an internal order, P a project, and A an asset. When a PO line has an account assignment like K, the goods receipt doesn't add to valuated stock; it posts straight to the consumption account and the cost centre. So I'd use an item with no account assignment for a stock material, and K for something like office supplies charged to a department. Both fields can be combined, like a service item charged to a project."

"PO release strategy with classification is built in a few layers. First I create characteristics that point at fields of the release structure for POs, like total net value, document type and purchasing organisation, making sure the value one carries a currency. Then I put them in a class of class type 032. In customising I create a release group linked to that class, and release codes for each approver, say one for the purchasing manager and one for the finance head. Release indicators define the states, like blocked and released, and whether the PO can still be changed or output. Then I define the strategy: which codes apply, that the finance code needs the manager's code first, and which indicator each step sets. Finally, in the strategy's classification, I enter the values, like document type NB and value above the limit. Approvers release in ME29N, or several at once in ME28."

"At my last company the maintenance team asked us to remove PO release for their plant, because urgent spare parts were waiting a day or two for approval and machines stayed down. Removing release completely would have let anyone raise high-value orders with no check, and audit would never have accepted it. So I looked at the data. Most of their urgent orders were small, and a few spare parts made up most of the volume. I proposed a separate document type for emergency maintenance orders, with a higher single-approver limit, and contracts with the main spare parts suppliers so the prices were already agreed. I walked the maintenance head and the finance controller through it together, and both agreed. After it went live, the approval wait on urgent orders dropped to hours, and the release strategy stayed intact for everything else."

"In subcontracting we send our own components to a supplier, they process them, and we get back a finished or semi-finished item. I create a PO with item category L for the item we expect back, and the components are pulled in from the bill of materials, or I add them by hand. Then I send the components with movement type 541, usually from the subcontracting cockpit or MIGO. They move out of unrestricted stock into stock provided to the supplier, but they're still our stock and still valued. When the supplier delivers, I post a goods receipt 101 for the finished item, and at the same moment the system posts 543 to consume the components from the supplier's stock. The supplier's invoice covers only the processing charge. On moving average price, the finished item is valued at the processing charge plus the components used; on standard price, any gap goes to price differences."

"In consignment, the supplier keeps ownership of the stock sitting in our warehouse until we use it. I keep a consignment info record for the price, and the PO line uses item category K. When the goods arrive, the receipt puts them into consignment stock. It's not valued, so there's no accounting document and nothing owed yet. The liability arises only when we withdraw it, either by transferring it to our own stock with movement type 411 K, or by issuing it straight to a cost centre or order. At that point the system posts a liability to the supplier at the consignment price. Then, on the agreed cycle, we run consignment settlement in MRKO, which settles those liabilities and creates the invoice documents, and the supplier is paid from there. So nothing is paid for goods that just sit on the shelf."

"The simplest way is a transfer posting. Movement type 301 moves the stock in one step. With 303 and 305 it's two steps, and the stock sits in stock in transfer at the receiving plant until it's put away. That's quick, but there's nothing to plan against and no delivery costs. A stock transport order is a proper purchasing document, so MRP can create it and I can track it. Within one company I use the UB document type. With delivery, the supplying plant creates an outbound delivery and posts goods issue 641, the stock shows as in transit at the receiving plant, and the receiving plant posts 101. Across two company codes it's really a purchase between two companies, so I'd use a normal PO type, goods issue 643, then the supplying company bills and the receiving company posts the invoice in MIRO. That needs the SD side set up too."

"A movement type is a three-digit key that tells SAP what kind of goods movement I'm posting. From it the system knows which stock type changes, whether value is updated and which account keys to use. The ones I use every day: 101 is a goods receipt, for example against a PO, and 102 reverses it. 122 is a return to the supplier. 103 receives into GR blocked stock, which isn't valued yet, and 105 releases it into stock. 201 issues to a cost centre, 261 to a production or maintenance order. 311 moves stock between storage locations in one plant, and 301 between plants in one step. 309 transfers one material to another, 321 moves quality inspection stock to unrestricted, and 551 scraps stock. For opening balances at go-live we use 561. Most reversals are simply the next number up."

"First I create a physical inventory document in MI01 for the plant, storage location and materials being counted. I can set a posting block so no goods movements happen during the count, and freeze the book stock so the comparison uses the quantity at that moment. Then I print the count sheets and the team counts. The counted quantities go in with MI04. Before posting anything, I check the difference list in MI20, because big differences usually mean a miscount or a movement that wasn't posted, and I ask for a recount where it doesn't make sense. Once it's agreed, I post the differences in MI07. That creates a material document with movement type 701 for a gain or 702 for a loss, and the value goes to the inventory difference account. For regular counting of fast movers, I'd use cycle counting, driven by an indicator in the material master."

"At my last company, a plant kept getting goods receipts posted at the wrong value for a few imported materials, and finance flagged it at month-end. The users swore the PO prices were right, and they were. I took one PO and traced every document: the PO, the receipt, the accounting entries. The receipt value included a freight condition that shouldn't have been there. It turned out someone had maintained the freight condition in the info records for those materials, so it was copied into every new PO line, and because those materials were on moving average price and the freight posted at goods receipt, it inflated the stock value. I corrected the info records, worked with the buyer to fix the open POs, and finance handled the revaluation. Then I added a monthly report of info records with freight conditions, so the buying team could spot it early."

"MRP makes sure the right quantity is available on time. For each material it's planning, it takes the requirements, like sales orders, forecasts and dependent demand from production, and subtracts available stock and firm receipts already on the way, such as open POs. It keeps safety stock aside. If there's a shortage, it applies the lot size from the MRP view to decide how much to procure, and uses the planned delivery time and the goods receipt processing time to work out when. For materials we buy, it creates purchase requisitions, or schedule lines if there's a scheduling agreement. For materials we make, it creates planned orders. It also raises exception messages, like reschedule in or cancel, where existing orders no longer fit. The buyer then works from MD04, the stock and requirements list, and converts requisitions into POs."

"The MRP type decides how a material is planned. PD is standard MRP: it looks at actual and forecast requirements and plans against them. VB is manual reorder point planning: I set a reorder point, and when stock falls below it, MRP proposes a replenishment. There's also an automatic version, VM, where the system works out the reorder point from the forecast. ND means no planning at all, which suits things we buy only on demand. The lot size decides how much is proposed. EX, lot-for-lot, orders exactly the shortage. FX orders a fixed quantity every time, useful when the supplier ships by pallet. HB replenishes up to a maximum stock level I set, which often pairs with reorder point planning. For expensive production components I'd use PD with EX, and for cheap consumables VB with HB."

"First I'd make sure none of these requisitions turn into POs, so I'd ask the buyer to hold them and, if automatic PO creation is on, check it won't pick them up. Then I'd open MD04 for the material and look at what each requisition is pegged to. There's always a requirement behind it: maybe an old forecast still sitting there, a BOM that still uses the part in an active product, a dependent requirement from planned orders, or a safety stock that wasn't cleared. For a phase-out material, the usual fix is to set a material status that blocks purchasing, change the MRP type to no planning, clear the forecast, and ask engineering to replace the component in the BOM with its successor. Then I'd delete the unwanted requisitions, or let the next MRP run remove them, and check the following run is clean."

"When an invoice is posted in MIRO, SAP compares it with the PO and the goods receipt. The tolerance keys, set per company code, say how far each kind of difference may go. PP covers price variances, DQ covers quantity, like invoicing more than was received, and BD lets small differences post automatically to a small differences account. There are others for dates and for items without a PO. Each key has upper and lower limits as an absolute amount, a percentage, or both. If a variance breaks a limit, the invoice still posts, but it's blocked for payment. To clear it, someone fixes the cause: the buyer corrects the PO price, the store posts the missing receipt, or the supplier sends a credit memo. Then the invoice is released in MRBR, either manually or by the automatic release, which checks whether the reason for the block has gone."

"GR/IR is a bridge between the goods receipt and the invoice. At receipt, inventory or consumption is debited and GR/IR is credited. At invoice, GR/IR is debited and the supplier is credited. When the quantity received and the quantity invoiced match, the account nets to zero for that PO line. Balances stay when goods came in but the invoice hasn't, when the invoice came but no receipt was posted, or when they'll never match, like a supplier short-shipping and invoicing only what they sent. I start by going through the open items by PO. Where a receipt or invoice is genuinely missing, I get it posted. Where the difference is final, I run MR11, which posts the difference and clears the line, and I can set the PO item to delivery completed so no more receipts are expected. Then finance runs the clearing for the period close."

"I'd start with the documents, not the opinions. I'd open the blocked invoice and see which line and which blocking reason it shows, then compare it with the PO line and the goods receipt. Often both sides are right in their own way. The buyer might have agreed a new price by email but never changed the PO, or the PO is per box and the supplier invoiced per piece, or a surcharge was invoiced that isn't a condition on the PO. If the PO is wrong, the buyer corrects it and the invoice can be released in MRBR. If the supplier's invoice is wrong, AP asks for a credit memo or a corrected invoice. Once we know which, I'd make sure someone calls the supplier with a clear date, because a key supplier waiting a month is a relationship problem, not just a system one."

"The valuation class sits in the accounting view of the material master. It's how SAP groups materials so they can post to different GL accounts even when the movement is the same. For example, raw materials and packaging might both be bought, but finance wants them on separate inventory accounts, so they get different valuation classes. Which valuation classes a material can use is controlled by the account category reference. I link each valuation class to an account category reference, and each material type to one account category reference, so a raw material can only pick raw material classes. Then in OBYC, the valuation class is one of the fields used to find the account for each transaction key, along with the chart of accounts and valuation grouping code. So if finance wants a new stock account for one group of materials, I create a new valuation class rather than a new material type."

"GBB is the offset key used by lots of movements, so on its own it can't tell a consumption from a scrapping. The difference comes from the account modifier, sometimes called the account grouping, which is attached to the movement type in its account determination settings. A goods issue to a cost centre with 201 passes VBR, for consumption. Scrapping with 551 passes VNG. Inventory differences from 701 and 702 pass INV, and initial stock entry with 561 passes BSA. Subcontracting consumption with 543 passes VBO. In OBYC, under GBB, I tick the modifier and valuation class as rules, then enter a separate GL account for each combination. So the inventory side of both postings comes from BSX, but the offset for the cost centre goes to a consumption account and the scrapping goes to a scrap account. If I create a custom movement type, I have to give it the right modifier."

"First I'd get the exact error text, because it tells me almost everything: the chart of accounts, the transaction key GBB, the valuation grouping code, the account modifier and the valuation class. Then I check which is odd. Very often a material was created recently with a valuation class nobody configured for that modifier, or someone used a movement type whose modifier has no entry. I'd look at the material's accounting view and at OBYC for that combination. If the valuation class on the material is the wrong one, that's harder, because it can't simply be changed while there's stock, so I'd agree the correction with finance. If the OBYC entry is missing, I'd confirm the right GL account with finance, configure it in development and move it through the transport path as an urgent change. Meanwhile I'd tell stores which materials are affected, so they can keep issuing everything else."

"In S/4HANA the old supplier transactions like XK01 and MK01 redirect to the Business Partner transaction, BP. I create the business partner as an organisation with its name, address and tax details, which are general data. Then I add roles. The supplier role, FLVN01, holds the purchasing organisation data, like the order currency, payment terms for purchasing, incoterms and settings like GR-based invoice verification. The financial supplier role, FLVN00, holds the company code data, like the reconciliation account and payment methods, which finance usually owns. Behind the scenes, customer-vendor integration keeps the classic supplier tables filled, so a PO still picks up everything it needs. One practical point: the business partner grouping and number ranges need to line up with the supplier account groups, otherwise creation fails, so I check that mapping early on a new project."

"The biggest change is in the inventory data model. Material documents are stored in one table, MATDOC, instead of header and item tables, and many old stock totals tables are no longer where the data really lives; stock is calculated from the documents, with compatibility views so old reads still work. That matters for custom reports and for performance. The material number field can now hold 40 characters once the long number is switched on, which affects interfaces. The material ledger is always active for valuation. Older transactions like MB1A, MB1B and MB1C are gone, and MIGO does their job. MRP can run as MRP Live, which runs in the database and is much faster. Buyers and warehouse users get Fiori apps for things like managing requisitions and POs, and for approvals you can use flexible workflow instead of classic release strategy, although classic release strategy still works."

"On my last project we moved a manufacturing business onto S/4HANA, and I owned the MM objects: materials, suppliers, info records, open POs and opening stock. We did three mock loads. In the second mock, a big share of open POs failed because the suppliers had loaded without purchasing org data, so the PO couldn't find payment terms or currency. The cause was a mapping that dropped the supplier role. We fixed the load template, and I added a check that every supplier on an open PO had the right role before we loaded POs. At go-live, loads went through, but the stock reconciliation showed a few materials with a different value from the legacy system; the valuation class had been mapped wrong for one group. We caught it before first posting. My lesson: reconcile quantity and value by plant after every mock, and get the business to sign off on the numbers, not just the file."