SAP ERP FINANCIALS

CIN FINANCIAL ACCOUNTING FLOW OF ENTRIES

Source SDN.SAP.COM (wiki)

Prepared By:
Ms.Pramila Nagaraj
First Class MBA Finance Graduate (2009-10)
Global Academy of Technology, Bangalore (VTU- Belgaum)
Trained up in SAP FICO @ SAPTAC Bangalore (FRESHER)

COUNTRY VERSION INDIA FINANCIAL ACCOUNTING FLOW OF ENTRIES

This is for Country Version India, Financial Accounting Flow of Entries:

I. Procurement of Stock.
What should be my accounting entry in procurement?
For Domestic Procurement of Raw Material
During GR
Material Stock
Dr.
GR/IR clearing
Cr.
During Excise Invoice Credit
Cenvat Account
Dr.
Cenvat Clearing
Cr.
During Invoice Verification
Cenvat Clearing
Dr.
GR/IR Clearing
Dr.
Vendor Payable
Cr.
For Domestic proceurement of Capital Goods
During GR
Material Stock
Dr.
GR/IR clearing
Cr.
During Excise Invoice Credit
Cenvat Account
Dr.
(50%)
Cenvat On-hold
Dr.
(50%)
Cenvat Clearing
Cr.
During Invoice Verification
Cenvat Clearing
Dr.
GR/IR Clearing
Dr.
Vendor Payable
Cr
Subsequent of Capital Goods
Cenvat Account
Dr.
(50%)
Cenvat On-hold
Cr.
(50%)
For Import Procurement of Raw Material
During Customs Duty Clearing invoice
Custom Clearing
Dr.
Custom Payable
Cr.
During GR
Material Stock
Dr.
GR/IR clearing
Cr.
During Excise Invoice Credit
Cenvat Account
Dr.
Custom Clearing
Cr.
During Invoice Verification
GR/IR Clearing
Dr.
Vendor Payable
Cr.
For Excise Duty Credit of Raw Material without PO
Cenvat Account
Dr.
Cenvat Clearing
Cr.
For Excise Duty Reversal through Excise JV
Cenvat Clearing
Cenvat Account

Dr.
Cr.

COUNTRY VERSION INDIA FINANCIAL ACCOUNTING FLOW OF ENTRIES

What should be my accounting entry when the goods are issued through MM and
excise invoice is created (J1IS & J1IV)?
During Excise Invoice Creation
Cenvat Suspense Account
Dr.
Cenvat payable
Cr.
For TR6C Challan
PLA Account
Dr.
PLA on hold Account
Cr.
During Fortnightly Utilization
Cenvat payable
Dr.
Cenvat Account
Cr.
PLA Account
Cr.
Note: Cenvat Suspense Account should be cleared apprpiately using FI JV's.
What should be my accounting entry in subcontracting reversal / Recredit ?
For Subcontracting Challan Reversal
Cenvat Reversal
Dr.
Cenvat Account
Cr.
For Subcontracting Challan Recredit
Cenvat Account
Dr.
Cenvat Reversal
Cr.
What should be my accounting entry in SD ?
For Factory Sale
During Billing Document
Customer Account
Dr.
Sales Account
Cenvat Suspense Account
During Excise Invoice Creation
Cenvat Suspense Account
Dr.
Cenvat payable
For TR6C Challan
PLA Account
Dr.
PLA on hold Account
Cr.
During Fortnightly Utilization
Cenvat payable
Dr.
Cenvat Account
Cr.
PLA Account
Cr.
For Stock Transfer through SD

Cr.
Cr.

Cr.

No Accounting entries for Proforma Billing Document

During Excise Invoice Creation
Cenvat Suspense Account
Dr.
Cenvat payable
Cr.
For TR6C Challan
PLA Account
Dr.
PLA on hold Account
Cr.
During Fortnightly Utilization
Cenvat payable
Dr.
Cenvat Account
Cr.
PLA Account
Cr.
Note: Cenvat Suspense Account should be cleared apprpiately using FI JV's.

COUNTRY VERSION INDIA FINANCIAL ACCOUNTING FLOW OF ENTRIES

II. Central Excise
RG 1 - Production & Issues or Inputs form Production and Sales
RG 23A Part I - Link Stock Register, only Product details and Quantity details.
RG 23A Part II - Cenvat Credit on Incoming Materials & Duty Paybale on Outgoing
Materials or on Sales (Monthly Register)
Excise PLA Register - TR 6 Challans
Form No. 5 Register - For Return Goods (Form D3 to be submitted to Excise Dept.,)
In SAP the Movement you save the MIGO Transaction, it automatically generate FI
Document. It will create the following entry.
i). Inventory Raw Material A/c

Dr

To GR/IR Clearing A/c

Cr

In MIGO Transaction itself, you can post Excise by choosing capture and post
Excise Invoice. The FI Document will be as follows.
ii). RG 23 A Basic Excise Duty A/c

Dr

To Canvat Clearing A/c

Cr

After doing MIGO, you execute MIRO. In this transaction also SAP will generate FI
document automatically. The Entry will be as follows:
iii). GR/IR Clearing A/c

Dr

Cenvat Clearing A/c

Dr

VAT Setoff A/c

Dr

To Vendor A/c

Cr

III. Flow of Entries for a Normal Manufacturing Activity:

I. On Receipt of Raw Materials: (MIGO-movement type:101)
Dr. Inventory of Raw Materials
100
Dr. Inventory of Operating Supplies

20

Dr. Inventory of Packing Materials

10

Cr. GR/IR Clearing A/c

130

II. On Invoice Verification: (MIRO)

Dr. GR/IR Clearing A/c
Cr. Vendor A/c

130
130

III. On Goods Issued for Production: (MIGO-movement type:261)

Dr. Consumption of Raw Materials
100
Dr. Consumption of Operating Supplies

20

Cr. Inventory of Raw Materials

100

Cr. Inventory of Operating Supplies

20

IV. On Semi-Finished Goods Received form Process: (MIGO-movement type:101)

Dr. Inventory of Semi-Finished Goods
120

COUNTRY VERSION INDIA FINANCIAL ACCOUNTING FLOW OF ENTRIES

Cr. Cost of Goods Manufactured (Semi-Finished Goods)120
V. On Issued of Semi-Finished Goods for further Processing: (MIGO-movement
type:261)
Dr. Consumption of Semi-Finished Goods
120
Dr. Consumption of Packing Materials

10

Cr. Inventory of Semi-Finished Goods

120

Cr. Inventory of Packing Materials

10

VI. On Finished Goods Received from Process: (MIGO-movement type:101)

Dr. Inventoyr of Finished Goods
130
Cr. Cost of Goods Manufactured (Finished Goods)

130

VII. On Finished Goods Issued for Sales: (VL01N-movement type:601)

Dr. Cost of Goods Sold (Finished Goods)

130

Cr. Inventory of Finished Goods

130

VIII. On Raising Bill for the Customer: (VF01)

Dr. Customer A/c
Cr. Sales A/c

145
145