Defining Movement Types and Reason Codes

In SAP S/4HANA, standard movement types used in physical inventory processes, specifically those in the 7XX range, are designed to facilitate various inventory activities.

Standard 7XX movement types:

• 701 - Goods Receipts of Physical Inventory (Unrestricted Use)

  This movement type is used to post the results of a physical inventory count when there is an increase in stock for unrestricted-use stock.

• 702 - Goods Issue of Physical Inventory (Unrestricted Use)

  This movement type is used when there is a decrease in unrestricted-use stock as determined by a physical inventory count.

• 703 - Goods Receipts of Physical Inventory (Quality Inspection Stock)

  This movement type posts an increase to the quality inspection stock based on physical inventory count results.

• 704 - Goods Issue of Physical Inventory (Quality Inspection Stock)

  This movement type posts a decrease in quality inspection stock as determined by a physical inventory count.

• 707 - Goods Receipts of Physical Inventory (Blocked Stock)

  This movement type is used for posting an increase in blocked stock as a result of a physical inventory count.

• 708 - Goods Issue of Physical Inventory (Blocked Stock)

  This movement type is used when the blocked stock decreases as determined by the results of a physical inventory count.

These movement types facilitate accurate stock adjustments following physical inventory counts, ensuring that inventory data are correctly updated to reflect current stock levels.

The Reason for Movement field captures why an inventory adjustment was made (for example, counting error, damage, theft) and helps with approvals, posting logic, reporting, and audit trails.

In SAP S/4HANA (and SAP ERP Central Component), managing the Reason for Movement field is a standard configuration that allows you to track why stock was adjusted, scrapped, or moved. The following steps guide you through configuring and controlling reasons for movement during inventory transactions, aiding in accurate tracking and accountability of goods movements across SAP systems.

1. Create custom reason codes.
   1. Choose SPRO→Materials Management→Inventory Management and Physical Inventory→Copy, Change Movement Types. Pick the movement type you want to update (for example, 551 for scrapping).
   2. Open the "Reason for Movement" section and choose New Entries.
   3. Add a short code (such as 0001) and a clear description (for example, "Quality damaged") and save.
2. Make the Reason field required, optional, or hidden (via SPRO→Materials Management→Inventory Management and Physical Inventory→Copy, Change Movement Types.
   1. In transaction, select the movement type and open Field Selection (or Update Control).
   2. Find the GRUND field (Reason for Movement).
   3. Set the indicator: + = mandatory, . = optional, - = hidden. Save your change.
3. Control the field by transaction (via SPRO).
   1. If you need the field behavior to depend on the transaction (for example MIGO), go to IMG→Materials Management→Inventory Management and Physical Inventory→Settings for Enjoy Transactions→Settings for Goods Movements (MIGO)→Field Selection per Movement Type.
   2. Choose the movement type and set GRUND as Required or Optional as needed, then save.

• Standard 7XX movement types manage stock adjustments during physical inventory in SAP S/4HANA, covering unrestricted, quality, and blocked stock.
• Each movement type records either a stock increase or decrease, ensuring inventory levels match actual physical counts.
• The Reason for Movement field captures the reason for inventory adjustments, supporting approvals, reporting, and audit trails.
• You can configure custom reason codes and control whether the Reason field is required, optional, or hidden for each movement type.
• Field behavior can be adjusted by transaction, allowing flexibility for specific inventory processes in SAP.