Part VII of the series: “Automated Audit of the Configuration and Authorizations in SAP MM”
Today’s blog post presents you with audit-related authorizations concerning physical inventory.
1. Is everything well organized? Auditing organizational structures in SAP MM
2. Proper protection of vendor master data
3. The procedure for checking the approval process for purchase requisitions
4. Are your purchase orders ordered in the best way?
5. Everything under control for critical goods movements
6. How to protect your invoice verification
7. Clear interrelationships when recording the physical inventory
8. Customizing in SAP MM set at the test bench
9. Segregation of duties in “purchase to pay”
10. Good practices in relation to the segregation of duties between “purchase to pay” and “financial accounting”
SAP Authorizations for the physical inventory
Within the context of the physical inventory, there is a difference between continuous physical inventory and periodic physical inventory. In the continuous physical inventory, all of the changes to stock are mapped directly in the system by continuously posting receipts and issues, which ensures that there is always accounting-based evidence of the stock levels. The stock levels are recorded on an ongoing basis throughout the entire fiscal year. It must be ensured that each material is physically recorded at least once per year. The periodic physical inventory is a physical stock-check on a key balance sheet date. This process is time-consuming because the the entire warehouse is locked for material movements during the physical stock-check.
SAP authorizations as part of the physical inventory have a direct effect on stock levels and may result in inconsistencies in the stock levels.
Setting physical inventory tolerance limits
In Customizing, tolerance limits can be configured for both physical inventory documents and physical inventory items. At physical inventory tolerance group level, the maximum difference amount can be configured for each document and physical inventory item. If the tolerance limits for differences are too high, recounts of the physical inventory may not be required and may therefore be undermined. In turn, this may result in an incorrect balance sheet display.
Payment and difference posting
Transaction MI10 can be used to summarize specific physical inventory steps. It can be used to post physical inventory differences without a reference to the physical inventory document and therefore create a physical inventory document, post a payment and clear the physical inventory difference in one step. Assigning this transaction undermines any dual-control principle as part of an internal control system and it should therefore be assigned only in exceptional cases with additional safeguards as a basic principle!
You can download the details about all SAP settings here:
