Comparing Procurement Processes for Stock and Consumption

A stock material is a material that is kept in stock. Such materials are placed in storage following a goods receipt. When such materials are received by, or issued from stores, the stock on hand is increased or reduced by the amount of the quantity received or issued.

To order a material for stock, the material must have a master record.

When you order a material for stock, the system does not require a manual account assignment. For each goods movement (for example, goods receipt or goods issue), the necessary postings to the corresponding stock and consumption accounts are made automatically. The value and the quantity of the stocked material are updated in the material master record.

In procurement for direct consumption, you specify the consumption purpose in the purchase order by entering account assignment data (consumption account, account assignment object) manually. During goods receipt and/or invoice receipt, the consumption account specified in the purchase order is debited with the procurement value. In addition, data for the account assignment object is updated.

This has no effect on the total value and usually does not affect the total quantity of the stock.

If material is procured directly for consumption, a material master record is not mandatory. The possible options for consumable material are:

• Consumable material without a material master record.

• Consumable material with a material master record that is not subject to inventory management (on either a quantity or value basis).

• Consumable material with a material master record that is subject to inventory management (on a quantity, but not value, basis).

When procuring a consumable material without a material master record, you must manually enter a short description, a material group, and a purchase order unit in the purchasing document because this data cannot be taken from a master record. This is different from a material with a master record.

In the case of materials with a master record, the material type controls whether inventory management for a material is to take place on a value or quantity basis. The following material types exist by default for consumable materials:

• Non-stock material (Material Type NLAG): Inventory management is not possible for these materials either on a quantity or a value basis. For frequently required consumables, the use of this material type enables you to store the information required to create purchasing documents (such as texts and units of measure).

• Non-valuated material (Material Type UNBW): This type of material is subject to inventory management on a quantity basis, but not on a value basis. This makes sense for low-value materials that have stocks, which must still be monitored.

You can procure stock material for stock and also directly for consumption. You can purchase trading goods for a customer (sales order), for example.

When you make an account assignment to a cost center, you must enter the G/L account number of the consumption account and the cost center for which the material is to be procured. You enter this data on the account assignment data screen. You can specify in Customizing that the system automatically proposes the number of the G/L account to be charged.

If you use account assignment category A, you must enter the asset number on the account assignment data screen. The system automatically determines the G/L account to be charged from the asset number. You cannot enter it manually.

If necessary, you can also define more account assignments in one item. If you specify a multiple account assignment, you must also specify how the value of the item is distributed among the individual account assignment objects. You can select from the following options:

• Distribution on a quantity basis

• Distribution by percentage

• Distribution by amount

In addition, you must specify in the item how the costs are to be distributed if only part of the ordered quantity is initially delivered and invoiced.

• The partial invoice amount can be distributed among the account assignment items of a purchase order item proportionally (in accordance with the distribution ratio).

• The partial invoice amount can be distributed among the account assignment items of a purchase order item on a progressive fill-up basis (in sequence). In this procedure, account assignment item 1 is completed first, then account assignment item 2 and so on, until the invoice value is reached.

If a partial invoice indicator is specified in Customizing for the account assignment category, the partial invoice indicator can also be derived automatically from the account assignment category.