Movement Types in SAP MM: A Comprehensive Guide

Movement Types in SAP MM

Movement types in SAP MM are an important component of the module and form an essential part of recording and managing stock movements in the SAP ERP system. A movement type is a way to identify various types of inventory transactions such as goods receipts, goods issues, transfer postings, and stock adjustments that can be accounted for in the SAP MM. These types do not only govern the inventory but also dictate how postings will be financially posted and, as a consequence, what happens to the valuation of the stock.  This blog explains in detail the movement types, their functions, and major examples such as movement types 701 and 702 in SAP MM.

What Are Movement Types in SAP MM?

Movement types are three-digit identifiers. The nature of the material movement within the SAP MM module is described with these movement types. They each have a respective inventory transaction- be it goods receipt, goods issue, or even posting of the transfer. Thus, not only does it depict the way of moving the mate rial, but associated financial accounts, stock quantity, and even valuation can also be impacted. For instance, 

  • Movement type 101: Goods receipt against the purchase order.
  • Movement Type 201: Goods Issue to a cost center.
  • Movement Type 311: Transfer Posting between storage locations.

Movement types have the following impacts

  • Accounting Entries: Defines debit and credit postings in financial accounts.
  • Screen Layouts: Define fields to be displayed during the time of inventory transactions.
  • Stock Updates: Define updates in material master data such as unrestricted, blocked, or quality inspection stocks.

Standard Movement Types in SAP MM

Here’s an overview of the frequently used movement types that are often accessed in SAP MM:

Movement Type Description Purpose
101 Goods Receipt Receiving goods into inventory.
102 Reversal of Goods Receipt Canceling movement type 101.
201 Goods Issue to Cost Center Issuing goods to internal departments.
301 Transfer Posting Moving stock between storage locations.
561 Initial Stock Entry Adding opening stock during SAP implementation.
701 Goods Receipt during Physical Inventory Adjusting inventory after stock count.
702 Goods Issue during Physical Inventory Removing excess stock during reconciliation.

A list of movement types in SAP MM ensures that users can manage every conceivable inventory scenario effectively.

Two Movement Type 701 and 702 in SAP MM

Movement types 701 and 702 are crucial for physical inventory processes, ensuring stock accuracy and transparency.

Movement Type 701: Goods Receipt when Physical Stock is Determined

  1. Purpose: Maintain good receipt for material that is found at the time of the stock count.
  2. Scenario: In case the physical stock count is more than the stock maintained in the system, movement type 701 rectifies the stock.
  3. Effect:
  • Stock quantity increases.
  • Debit posting in the inventory account is made.
  • The corrected stock value is updated on the material master record.

Movement Type 702: Goods Issue when Physical Stock is Determined

  1. Purpose: Stocks issued for physical stock count differences.
  2. Scenario: When the actual stock count reveals a shortage, movement type 702 decreases the inventory.
  3. Effect:
  • Reduces the stock amount.
  • Increases the credit of the inventory account.
  • Updates the material master record to reflect the shortage.

Both movement types are important for the reconciliation of physical stock with system records for accurate financial reporting and stock management.

Special Movement Types: Consignment in SAP MM

In SAP MM, the movement type of consignment handles material owned by a vendor but is at the company’s location. During consignment, the company only pays for materials that have been consumed in the process. Key movement types for consignment:

  • Movement Type 201 K: Goods issued to a cost center for consignment stock.
  • Movement Type 411 K: Transfer posting from consignment stock to company-owned stock.
  • Movement Type 261 K: Goods Issue to a production order using consignment stock.

Example Workflow:

  1. Goods are received into consignment stock (movement type 101 K).
  2. Materials are used and, thus lead to goods issues (movement type 201 K).
  3. The financial liability to the vendor is created only after the issue of goods.

Transfer Posting Movement Types

Transfer postings represent stock movements that do not involve physical relocation but change the stock’s status or classification.

Common Transfer Posting Movement Types

Movement Type Description
311 Stock transfer between storage locations.
321 Transfer from quality inspection stock to unrestricted stock.
343 Transfer from blocked stock to unrestricted stock.
411 Transfer of own stock within the company.

Transfer postings are essential for scenarios like:

  • Reclassifying stock from blocked to unrestricted.
  • Moving quality inspection stock to unrestricted stock after approval.
  • Adjusting stock based on internal requirements.

Configuring Movement Types

SAP provides users with an option to customize movement types according to specific business processes. The OMJJ transaction code is used for the configuration of movement types. The key configurations include:  

  • Define Posting Rules: Specify the financial accounts affected by the movement type.
  • Screen Layout Customization: Change field visibility while entering a transaction.
  • Message Control: System messages that are created when movement types are being used

Through the customizing of movement types, organizations can tailor SAP MM to their inventory and accounting needs. Best Practices in Managing Movement Types  

  • Know Business Processes: Before using or customizing movement types, study your organization’s inventory and financial needs.
  • Use Standard Movement Types: Use movement types wherever possible and avoid mistakes; it will eventually lead to compliance.
  • Document Customizations: Clear documentation on custom movement types should be maintained to troubleshoot and audit easily.
  • User Training: The employees are educated on the movement types applicable in each job function to avoid transaction errors.

Conclusion

Movement types are the heart of SAP MM for managing inventory and financial activities. Starting from standard process movements, including goods receipts and issues, to special cases in SAP MM, these identifiers help smooth the process while maintaining data accuracy.

It helps businesses understand these movement types in SAP MM and their application to optimize workflow efficiency, improve stock accuracy, and enhance decision-making. Companies with consignment stocks or transfer postings should use this and transfer posting for the smooth running of the inventory. Movement types and their settings remain an important part of the SAP MM process as the product develops.  

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