Difference between movement type 201 & 261 in SAP Material Module

Hello viewers! If you are also one among those who dont know the difference between material movements 201 and 261, here I am to clarify the same. Every movement type entry in MB51 is mapped to the corresponding ledgers. Lets go ahead.

To understand the difference between the above mentioned movement types, first we need to discuss about two storage locations namely stores and shop floor.

Stores location is where all the materials including raw materials are received and stored. Shop floor is a storage location under the control of production department but not stores department. Issues of materials for consumption from stores can be of two types i.e, direct consumption by the cost centre (Indirect materials), consumed in the production process (Direct Materials).

In case of indirect materials where the materials are consumed by the user department directly and are not direct materials, then for such material consumptions the stores department passes 201 movement type.

In case of direct material used in production process, upon the request for material by the production department, then the stores department transfers the storage location of materials from stores to shop floor through movement type 311. Now the production department passes the consumption entry through movement type 261 for issue of materials to a specific order of production based on actual consumption in the factory.

As I said that every movement type entry in MB51 is mapped to corresponding ledgers based on material group, let us check it out.

Indirect materials : 

For example let us take diesel used for generator. Diesel is grouped under indirect materials in the material group and consumption is mapped to "Diesel Consumption A/c" ledger. On issue of diesel to maintenance department, the stores department passes consumption movement to diesel through movement type 201, which intiates a journal entry in the SAP background as follows,

                                         Diesel Consumption A/c Dr xxx
                                                   To Diesel Stock A/c            xxx

If you see here, the Diesel consumption A/c is an expense account and diesel stock A/c is a current asset.

Direct materials :

For example let us take raw material Plastic for manufacture of Pens. Intially upon purchase of such material, the stores department raises GRN in SAP through movement type 101 say for quantity 100. Later upon material requisition from the production department, the quantity is transferred from Stores storage location to Shop floor (Storage location under control of Production Department) through movement type 311 assume quantity is 70. But on that day only 50 kgs of plastic was consumed in production of pens for that day, then production department passes 261 movement for 50 kgs of plastic against the order of production batch to which the plastic was used. Remaining quantity of 20 kgs lies in Shop floor stock and other 30 kgs in stores stock.

Upon passing an entry of movement type 311 no background journal entry will be posted in SAP as there is financial transaction involved but on posting the movement type 261 by the production department the journal entry will be as follows,

                                                    Inventory Work-In-Progress A/c Dr xxx

                                                               To Plastic Stock A/c                       xxx

Here, the inventory work-in-progress A/c is a current asset and also the Plastic Stock A/c is also a current asset.

To view the journal entry passed in SAP background, select the material document number against such material movement in MB51 and see the journal entry in the Tcode MB03. In this way you can explore the effects of movement types of different materials in that particular company.

Hope the same got clarified!