Reference and Education

What Is the Business Process in SAP MM?

What Is the Business Process in SAP MM?
The SAP MM Module has a component called SAP Business Process. It is responsible for a company’s sales, manufacturing, distribution, unit maintenance, planning, and warehouse management. It aids in the management of a company’s inventory and human resources. The SAP MM Online Training will provide you with complete knowledge about the SAP MM module and its business process. The training is structured in a way that the aspirants can establish a reminiscing career in the respective field.


About Business Process:

Every business either offers services or sells goods. In order to do this, the business must engage in a number of interconnected activities. This series of events is referred to as a business process. The start of one action may be contingent on the completion of a preceding action, or numerous actions may be carried out simultaneously.

There are numerous departments in any corporation (Human Resource, production, material, sales & distribution, finance, etc.) Each department is responsible for a certain set of activities or tasks.

SAP is used by businesses to handle data and share information for a variety of purposes. Each activity generates data and information, which is gathered and accurately recorded. SAP essentially aids in the tracking of all actions completed and the simplification of actions to be completed by providing up-to-date information.

SAP’s Contribution to Business Process Enablement:

 

Let’s look at some instances to better grasp what a business process is and how SAP helps to enable it.

Product sold to wholesale clients by a company.

A wholesale customer places an order for items with the company. The products are put into a ship or truck and given to a transporter for delivery. The client is billed by the company, and the client pays the bill. The company must compensate the carrier for his services.

Due to quality difficulties, the client is now returning some of the items. Before adding returned products to inventory, a quality check is undertaken to determine if they should be scrapped or reworked.

A business process is a well-defined series of operations that must be carried out in order to deal with a certain business issue.

Now, how can we achieve the same thing in SAP? A sales order is produced in the SAP SD module when the firm gets an order from a customer.

The goods are given to the carrier, and the delivery status is tracked throughout, with a delivery document produced in SAP SD. The delivery document is used to trace the selection, packaging, and distribution of items. Documents are uploaded in SAP MM after products have been transported out of the firm, ensuring that inventory is corrected and financial effect is documented in SAP FI.

When a firm invoices a customer, SAP SD generates a billing document. Revenue is booked because the firm anticipates money from the consumer for the sale. Client invoices are entered into SAP, which records revenue and receivables for the customer. SAP FI has been used to record this accounting transaction.

When a customer pays, the payment is applied to the client’s invoice. The payment document is entered into SAP FI, clearing the account receivable and adjusting the balance in the bank account.

If a client returns any of the products, a credit memo is provided to the customer with a reference to the sales order so that the financials may be adjusted. In SAP SD, a credit memo is produced. To change financials in SAP FI, submit a credit memo as a financial document. When goods are returned, they are subjected to a quality review, and a choice is made as to whether they should be scrapped or reworked. If products are returned to inventory, a document in SAP MM is created to update inventory.

The company must compensate the carrier for his services. Because the corporation has acquired transportation services from a provider, as a result, SAP MM generates a service purchase order with the specifics of the service agreement. When a transportation provider sends a bill to the company, the firm is expected to pay it, thus a record is created in SAP FI that reflects the vendor’s accounts payable.

Vendor payments are documented against vendor invoices when the firm pays the vendor. SAP FI records the payment document, which clears the account payable and modifies the balance in the bank account.

As a result, SAP facilitates the business process by capturing and distributing the data and information created at each stage. SAP assists all departments (sales, material, and finance) in coordinating and achieving the intended outcome.

Conclusion:

In this article, we came across the business process of the SAP MM module and how does SAP contributes to it. To learn and explore more about SAP MM, get enrollment in the SAP MM Course in Noida. The course is well-structured and has all the necessary courseware.

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