if we have to create a new material type or a new valuation classes or a new Account Category Reference or all the three, then we have to establish this link. In configuration we have to make the following settings[@more@]

Create new material type
Create new account category reference
Define new valuation class
Link material types & valuation class via account category reference
Create an account determination for each valuation class in the step configure automatic posting

Once this link has been established for the entire new requirement and automatic posting has been configured to meet this requirement, then nothing more is required. The system will take care of the rest of the activities automatically.

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Account category reference is the link between the valuation classes and the material types. The account category reference is a combination of valuation classes. Precisely one account category reference is assigned to a material type. In the standard SAP R/3 System, an account category reference is created for each material. The account category reference is, in turn, type assigned to precisely one valuation class. This means that each material type has its own valuation class. In the Standard SAP we have the following account category references for material type finished goods and valuation classes 7920

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MM-step to create a new material type/valuation cloass//account category reference

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