SAP MM: Item Category/Account Assgt. Category in Contracts using SAP MM Outline Purchase Agreements With Vendors

Use

The following table shows you when to use which item or account assignment category in contracts:

You enter ...	if
item category M	the material is unknown
item category W	value and quantity are unknown
item category D	you are procuring an external service
item category K	consignment material is involved
item category L	subcontracting material is involved
account assignment category U	the account assignment is unknown

Features

Item Categories in Contracts

Just as with purchase orders, you can enter an item category to define the item as an external service item, a consignment item, a subcontracting item or as a free-form text item.

Item Category M (Material Unknown)

Item category M is for entering contract items without specifying the material number.

Item category M is recommended for similar materials with the same price but with differing material numbers.

Consider a contract item for different types of office paper. The various types of paper have the same weight, quality, and price. However, they differ in the following respects: One type is lined, another is unlined, and another has two holes on the left side for filing purposes.

How Do You Use Item Category M?

In the case of items of category M, you enter the short text (short description), target quantity, unit of measure, and price. As soon as a contract release order is created, the material number or a short text is entered (e.g. the exact type of paper, say, two-hole punched). The system determines the net price on the basis of the gross price entered, less any discounts.

Item Category W (Material Group)

Item category W allows you to enter a material group without entering the value or quantity of the contract item. Item category W is for value contracts only.

Consider a contract for cable. The contract covers every type of cable on the vendor's price list. The exact type of cable is known only at the time a specific cable is ordered.

Instead of entering an item for every type of cable the vendor is able to supply, you could enter item category W and the material group (say, CABLE). The short text would indicate that the contract item covers all types of cable supplied by the vendor.

Each release order issued against this contract would then specify the actual type and quantity of cable (for example, double-shielded coax, 1 spool) as well as the price.

How Do You Use Item Category W?

When you create the contract item, enter the item category W, the short text, and the material group. You do not enter a price or conditions for the item. However, it is possible to specify conditions in the document header. For example, you can enter a discount in the header conditions if the vendor grants a discount on all Pos relating to the contract. The discount is automatically taken into account when the release order is created.

You can enter a material number in the contract release order. The corresponding material master record must be assigned to the same material group specified in the referenced contract item. If the release order does not have a material number, then it must contain a valid account assignment, such as a cost center.

Account Assignment Category U (Account Assignment Unknown)

Use the account assignment category U if you are creating contract items for which an account assignment is required but cannot be specified in the contract. You must then specify a valid account assignment when creating the corresponding release orders.

You have negotiated a contract for office chairs. The account assignment cannot yet be specified in the contract because it will not be decided until the chairs are actually ordered.

How Do You Use Item Category U?

In the contract item, you specify the material data (with or without reference to a material master record), u as the account assignment category, the quantity, and the price. The person creating the release order against the contract must specify a valid account assignment, such as a cost center.