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Issue:

You do not understand the value posted to the Stock Account (BSX) in a Goods Receipt for a Purchase Order when the stock was negative before the posting.

Solution:

First take into account the concept of negative stocks:

Negative stocks are allowed when the goods issue needs to be done urgently. Just due to organizational reasons goods issues are entered before than the corresponding goods receipts.

Once the goods receipts have been posted, the book inventory balance must again correspond to the physical stock, that is, the book inventory balance may no longer be negative.

Negative stocks are always a sign that physical movements must be be entered in the system at a later stage.

So that negative stocks are allowed, the 'Negative stocks' indicator should be marked into the material master data via MM01/MM02 transactions on General Plant Data 2 view at ‘General Plant Parameters’ screen.

 
 

  • Customizing settings:

You have also to allow negative stocks by plant. You should customize your system to accept this possibility. Go to SPRO->IMG->MM->Inventory Management & Physical Inventory->Goods Issue/Transfer Postings->Allow Negative Stocks (OMJ1).

 

  • System Messages:

Message ‘M7 021’ should be set as warning in OMCQ transaction.

In some cases, you can face the error message ‘M7 021’. It is not mandatorily related to stock inconsistencies. It is hard-coded in several programs. See SAP note 24312 for more details. Example: you have set this message as ‘w’ in OMCQ and set the negative stocks indicator into the material master but you did not allow negative stocks in your customizing settings. In this case, error message ‘M7 021’ will be presented when doing the goods issue.

 

 

Example: Goods Receipt Valuation when allowing negative stocks

A)     Notice you have negative stocks in MMBE transaction and a corresponding negative value in MM03.

For example: -5 KG valuated at -350 EUR (Moving Average Price of 70 EUR/KG) .

B)      Create a Purchase Order in ME23N transaction for 10 KG.

C)      Post a Goods Receipt for the Purchase Order in MIGO transaction for 10 KG.

D)     Check stock position after posting the GR in MMBE transaction.

Goods receipt was done by 10 KG. So we will have -5 KG + 10 KG = 5 KG.

E)      Calculate the GR value (WRX).

Data (for example):                            

PO qty = 10 KG       

PO Net price: 75 EUR   

PO price unit: 1 KG    

GR qty: 10 KG

Formulas:       

PO Net Value = PO qty x (PO Net price / PO price unit)    

GR value = GR qty x (PO net value / PO qty)

Calculation:               

PO Net Value = PO qty x (PO Net price / PO price unit)   

PO Net Value = 10 KG x (75 EUR / 1 KG) = 750 EUR.

GR value = GR qty x (PO net value / PO qty)    

GR value = 10 KG x (750 EUR / 10 KG) = 750 EUR.

F)      Calculate the stock account value.

Data (for example):                   

-5 KG valuated at -350 EUR (Moving Average Price of 70 EUR/KG) .
 

Process:             

The first 5 KG in the reception will clear the negative stock. After receiving the first 5 KG, the stock will be zero. Since the stock will be zero, the value needs to be cleared also. The first 5 KG are valuated at 350 EUR in order to clear the stock value.

Then, the remaining 5 KG are valuated according to the value given externally by the purchase order:

5 KG x 750 EUR / 10 KG = 375 EUR.

The total value posted to stock is:

BSX = 350 EUR + 375 EUR = 725 EUR.
 

G)     Calculate the price difference value.

PRD = WRX - BSX

PRD = 750 EUR - 725 EUR = 25 EUR.

H)     Check FI document via ME23N (PO history), MB03 (via material document) or in FB03 directly.  Considering the above example, you would see that stock account would be debited on 725 EUR, clearing account would be credited on 750 EUR and, as a consequence, price difference account would be debited on 25 EUR.

Related notes / content:

SAP Note 24312: Inventory management - system message M7022

SAP Note 212286: Overview note: Valuation during goods movements

SAP Note 518485: FAQ: Valuation of goods movements

SAP Note 518368: FAQ: Valuation for the purchase order