SAP Make-to-Order with Valuated Sales Order Stock: T-Codes, Movement Types and Accounting Entries

SAP Make-to-Order (strategy 20) with valuated sales order stock: T-codes, movement types and Dr/Cr entries from sales order to customer payment.

SAP Make-to-Order with Valuated Sales Order Stock: T-Codes, Movement Types and Accounting Entries
SAP S/4HANA make-to-order swimlane (SD, FI/CO, PP, MM, QM) with VA01, MD01N, MIGO 261/101 E, KKS2, KO88, VL02N 601 E and debit/credit entries
Make-to-Order process with valuated sales order stock in SAP S/4HANA, strategy 20 (diagram by Bhavin Patel, CPA).

SAP Make-to-Order (MTO) with valuated sales order stock is shown here end to end, with the transaction, the movement type and the accounting entry for each step. The process runs on planning strategy 20 in SAP S/4HANA and touches SD, FI/CO, PP, MM and QM.

Strategy 20 and Valuated Sales Order Stock

With strategy 20, the finished product is produced for a specific sales order and kept as sales order special stock (E). Because this stock is valuated, it carries an inventory value in FI, so every finished-goods movement posts with the E indicator: 101 E at goods receipt, 321 E or 350 E at the quality decision and 601 E at goods issue.

Not every step reaches the ledger. The sales order, the optional sales order costing and the purchase requisition have no FI posting; postings start with the goods receipt of components and follow the material through production, delivery, billing and payment.

The G/L entries below are illustrative and assume classic settlement. Actual accounts depend on SAP configuration, and tax and purchasing price differences are left out. For a strategy 50 view of MTO with result analysis and VA88 settlement, see SAP PP Make to Order Process Flow Diagram with Tcodes.

Sales Order, Costing and MRP

Create Sales Order (VA01)

The process starts in SD with VA01. The sales order creates the demand and has no FI posting.

Sales Order Costing (VA02)

An optional sales order cost estimate can be created with VA02. It runs alongside the main flow and has no FI posting.

Run MRP (MD50 / MD01N)

MD50 / MD01N runs MRP, which plans both production and the component purchases. From here the process splits into production and procurement. How strategy 20 and other strategies are set up is shown in SAP MRP Strategy Parameter Configuration Diagram.

Convert and Release (CO40 / CO02)

CO40 / CO02 converts the planned order into a production order and releases it for production.

Component Procurement with Incoming Inspection

Purchase Requisition and Purchase Order (ME51N, ME21N)

The purchase requisition (ME51N) comes from MRP or is entered manually, with no FI posting. ME21N converts the requisition into a purchase order.

Receive Components (MIGO 101)

The goods receipt for components posts Dr RM inventory / Cr GR/IR clearing.

Incoming Inspection (QA11)

If QM is active, the component stock goes through an incoming inspection. The usage decision in QA11 has three outcomes: 321 release stock, 350 block stock, or 122 return to supplier. If QM is inactive, the components can be issued to production directly after goods receipt.

Return to Supplier (QA11 / MIGO 122)

When the inspection fails, the goods go back to the supplier, which posts Dr GR/IR clearing / Cr RM inventory.

Verify Supplier Invoice (MIRO) and Pay Supplier (F110)

The supplier invoice is verified in MIRO with Dr GR/IR clearing / Cr Supplier A/P. The payment run F110 then posts Dr Supplier A/P / Cr Bank clearing. The same three-step pattern is covered in Stock Procurement with Accounting Entries.

Production Execution and Finished Goods Receipt

Issue Components (MIGO 261)

Components are issued to the production order with movement type 261, which charges the production order: Dr Material consumption / Cr RM inventory.

Confirm Operations (CO11N)

The confirmation posts the internal activity allocation: Dr Production order / Cr Sending cost center. If configured, CO11N can also post the 261 component issue and the 101 E goods receipt automatically.

Receive Finished Goods (MIGO 101 E)

The finished goods go into valuated sales order stock with 101 E, and the production order is credited in CO. The entry is Dr FG inventory (E) / Cr FG inventory change.

FG Quality Decision (QA11)

When inspection applies, the usage decision moves the stock with 321 E (release stock) or 350 E (block stock). Blocked stock goes to Hold stock / rework for review, rework or other disposition. Released stock is available for delivery. If QM is inactive, the finished goods can be delivered right after goods receipt.

Period-End Production Order Close

At period end, the production order is closed in two steps, each followed by settlement with KO88.

WIP Calculation and Settlement (KKAX → KO88)

While the order is still in process, work in process is capitalized: Dr WIP inventory / Cr Change in WIP (P&L).

Variance Calculation and Settlement (KKS2 → KO88)

Once the order is delivered (DLV) or technically completed (TECO), the variance is settled: Dr Price differences / Cr Inventory change offset. In the example the variance is unfavorable, and the WIP posted earlier is reversed once the order is complete. Production cost flows in general are covered in SAP Manufacturing Cost Management Process Flowchart.

Delivery, Billing and Customer Payment

Delivery and Goods Issue (VL01N → VL02N, 601 E)

The outbound delivery is created and the goods issue is posted in VL02N with movement type 601 E: Dr Cost of goods sold / Cr FG inventory (E).

Bill Customer (VF01)

Billing is created from the delivery: Dr Customer A/R / Cr Sales revenue.

Customer Payment (F-28)

The incoming payment posts Dr Bank / bank clearing / Cr Customer A/R and ends the process.

Make-to-Order T-Codes, Movement Types and Postings

StepT-codeMovement typeDr / Cr (illustrative)
Create sales orderVA01—No FI posting
Sales order costing (optional)VA02—No FI posting
Run MRPMD50 / MD01N——
Convert & release production orderCO40 / CO02——
Purchase requisitionME51N—No FI posting
Purchase orderME21N——
Receive componentsMIGO101RM inventory / GR/IR clearing
Incoming inspectionQA11321 / 350 / 122—
Return to supplierQA11 / MIGO122GR/IR clearing / RM inventory
Verify supplier invoiceMIRO—GR/IR clearing / Supplier A/P
Pay supplierF110—Supplier A/P / Bank clearing
Issue componentsMIGO261Material consumption / RM inventory
Confirm operationsCO11N—Production order / Sending cost center
Receive finished goodsMIGO101 EFG inventory (E) / FG inventory change
FG quality decisionQA11321 E / 350 E—
WIP (in process)KKAX → KO88—WIP inventory / Change in WIP (P&L)
Variance (DLV / TECO)KKS2 → KO88—Price differences / Inventory change offset
Delivery & goods issueVL01N → VL02N601 ECost of goods sold / FG inventory (E)
Bill customerVF01—Customer A/R / Sales revenue
Customer paymentF-28—Bank / bank clearing / Customer A/R

Quality stock transfers (321/350) at the same value usually have no FI posting.

Additional SAP Notes (Not Shown in the Diagram)

These points are general SAP knowledge added for context, not part of the original image:

  • MD50 is single-item, sales-order-specific MRP; MD01N is MRP Live in SAP S/4HANA.
  • KKAX is WIP calculation and KKS2 is variance calculation, both for individual orders.
  • Movement types 321 and 350 move stock out of quality inspection into unrestricted and blocked stock, and 122 is a return delivery to the supplier.

Key Takeaways

  • With strategy 20 and valuated sales order stock (E), the finished goods are valued on the balance sheet while they stay assigned to the sales order.
  • Sales order, sales order costing and purchase requisition steps have no FI posting; the first posting comes at goods receipt of components.
  • QM adds release, block and return paths; if QM is inactive, goods flow straight to the next step.
  • Period-end close capitalizes WIP while the order is open and settles the variance after DLV or TECO, both with KO88.
  • The goods issue for delivery (601 E) posts cost of goods sold against FG inventory (E), before billing and customer payment.

For a different view of the same process in the cloud edition, see Make-to-Order in SAP S/4HANA Cloud.

Diagram as Text

Show the diagram as plain text

SD: START → VA01 Create sales order (creates demand, no FI posting) → … → VL01N → VL02N, 601 E, Delivery & goods issue (post goods issue in VL02N; Dr Cost of goods sold, Cr FG inventory (E)) → VF01 Bill customer (bill from the delivery; Dr Customer A/R, Cr Sales revenue) → F-28 Customer payment (Dr Bank / bank clearing, Cr Customer A/R) → END.

FI/CO: VA02 Sales order costing (optional cost estimate, no FI posting). MIRO Verify supplier invoice (Dr GR/IR clearing, Cr Supplier A/P) → F110 Pay supplier (Dr Supplier A/P, Cr Bank clearing). Period-end order close: KKAX → KO88, in process, capitalize WIP (Dr WIP inventory, Cr Change in WIP (P&L)); KKS2 → KO88, DLV / TECO, settle variance (Dr Price differences, Cr Inventory change offset); unfavorable variance shown, reverse WIP at completion.

PP: MD50 / MD01N Run MRP (plans production and component purchases) → CO40 / CO02 Convert & release (convert planned order, release for production). CO11N Confirm operations (internal activity allocation; Dr Production order, Cr Sending cost center).

MM: ME51N Purchase requisition (from MRP or entered manually, no FI posting) → ME21N Create purchase order (convert requisition to PO) → MIGO 101 Receive components (Dr RM inventory, Cr GR/IR clearing) → MIGO 261 Issue components (charge production order; Dr Material consumption, Cr RM inventory) → MIGO 101 E Receive finished goods (prod. order credited in CO; Dr FG inventory (E), Cr FG inventory change).

QM: QA11 Incoming inspection (321 release stock, 350 block stock, 122 return to supplier) → QA11 / MIGO 122 Return to supplier (Dr GR/IR clearing, Cr RM inventory). QA11 FG quality decision (when inspection applies; 321 E release stock, 350 E block stock) → Hold stock / rework (review for rework or other disposition). “321 E · Released for delivery” leads to VL01N; “If QM inactive” bypasses the inspections.

Notes: E = sales order special stock. RM = raw materials, FG = finished goods, GR/IR = goods receipt / invoice receipt clearing. Same-value 321/350 transfers usually have no FI posting. CO11N can post 261 or 101 E automatically if configured. Illustrative G/L entries for classic settlement; accounts depend on SAP configuration; examples omit tax and purchasing price differences.