Beruflich Dokumente
Kultur Dokumente
Debit Credit
Raw Material GR/IR XXX
Vendor Account XXX
Table 2.0
Debit Credit
Vendor Account XXX
Bank Account XXX
Table 3.0
GL Entries during Step 5: Semi Finished Good 1 used as raw material for the production of Semi Finished Good 2
Debit Credit
Stock of Semi Finished Good 2 XXX
COGM of Semi Finished Good 2 XXX
COGM of Semi Finished Good 1 XXX
Stock of Semi Finished Good 1 XXX
Table 5.0
GL Entries during Step 6: Semi Finished Good 2 used for the production of Finished Good
Debit Credit
Stock of Finished Good XXX
COGM of Finished Good XXX
COGM of Semi Finished Good 2 XXX
Stock of Semi FInished Good 2 XXX
Table 6.0
Live posting example during sales invoice release from accounts using VFX3.
Now let us try to understand COGM, COGS and Production Order Price Difference Accounts;
Finished and Semi Finished Material will be valuated at Standard Price for all COGM, COGS and Closing
Stock calculation.
1.1) COGM: Cost of Goods Manufactured
Transactions hitting COGM account are;
a) Goods Produced
b) Goods Issued to Production Order
c) Reversal of Goods Produced
d) Entries posted during settlement of Production Orders ( Variance)
I have broken down the COGM entries for clear understanding. Please find the below screen shots.
The below attached image shows how the Production Order Settlement amount of 1,403,463.52 has been
arrived.
If ML is not activated we will not be able to apportion the total variance between stock, COGM and COGS. We
follow the below mentioned procedure to split the variance.
In the first column the total variance for each product has been entered. Second column we enter the total
quantity produced for the material. So Total Variance / Production Quantity = Variance Per Ton.
You have the quantity for Closing Stcok, COGM and COGS of the material. Multiply it with Variance per ton.
Figure 1.0
1.1.b) Goods Issued to Production Order:
When a Semi finished good is issued against a production order Stock of the semi finished good is credited and
cost of manufacturing the semi finished good is debited with document type WA. (Refer Table 6.0)
Entires will be posted against the particular material i.e with material number.
Figure 2.0
1.1.c) Reversal of Goods Produced:
When a finished / semi finished good A Quantity is produced at X rate and reversed B Quantity at Y rate,
the quantity will be reversed at Y rate and the difference in price X Y will be posted in Price Difference and
COGM account.
GL entries posted will be;
(For GL entries posted when Raw Material is Issued to Production of Semi Finished Good refer Table 4.0)
Debit Credit
COGM of Semi Finished Good XXX
Stock of Semi Finished Good XXX
Stock of Raw Material XXX
Raw Material Consumption XXX
Production Order Price Diff Account XXX
Table 11.0
1.1.d) Entries posted during settlement of Production Orders ( Variance)
During settlement of production order variance will be posted to Production Order Price Diff Account and COGM
KIndly chek my blog Understanding Production Order Variance Part 1
(http://scn.sap.com/community/erp/manufacturing-pp/blog/2012/03/13/understanding-production-order-variance
part-1).
Note: There is no hard and fast rule for analysing COGM. Analyse COGM based on the analysis I have given
above, if any other entries are posted we have to analyse those entries one by one.
Let me try to explain COGM entry for one material.
COGM entry posted for material FG1 is 27,134.90 AED.
Let me explain the entries. FG1 produced is (Execute Transaction Code MB5B for movement type 101 + 102 )
28,507,148.10 AED.
FG1 issued to production order is (Execute Transaction Code MB5B for movement type 261 + 262 )
28,480,013.2 AED.
COGM -> 28,507,148.10 28,480,013.2 = 27,134.90
1.2) COGS: Cost of Goods Sold
For calculating Cost of Goods Sold materials will be va;luated at standard price maintained in the material
master.
Execute Transaction Code MB51 for movement type 601 + 602. Also consider price difference during sales
reversal.
Both the 601 & 602 values should match with COGS general ledger (If no price diference for sales reversal is
there).
MB5B 601 + 602 Report
Figure 4.0
FBL3N COGS Report
Figure 5.0
1.3) Production Order Price Difference Account
KIndly chek my blog Understanding Production Order Variance Part 1
(http://scn.sap.com/community/erp/manufacturing-pp/blog/2012/03/13/understanding-production-order-variance
part-1).
2.0) Closing Stock:
Formual for closing stock;
( Opening Stock + Receipt ) Issues = Closing Stock
i.e Opening Stock + COGM = Closing Stock
But in most of the cases if we apply the formula the closing stock will not match. All material movement has to be
considered while calculating closing stock of material.
Let us try to analys few Scenarios:
Material Opening Receipt Issue Price Diff. (0 Qty) Material Transfer Closing
FG1 276,120.06 116,157,464.09 115,882,172.88 37,161.73 225,528.12 814,101.12
FG2 0.00 7,868,063.25 7,616,416.50 (251,646.75) 0.00
Table 13.0
Also
Refer: http://help.sap.com/erp2005_ehp_06/helpdata/EN/7e/cb7ead43a311d189ee0000e81ddfac/frameset.htm
ERP Post Implementation Challanges Part 2 Reconciling GL, Raw Material Consumption,
Finished/Semi Finished Material Production, Vendor Invoice
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In my previous blog ERP Post Implementation Challenges Part 1 I have explained the concept of COGM, COGS and
deriving the closing stock. In this blog I will be concentrating on the Reconciling GL, Raw Material Consumption, Semi
Finished / Finished Goods Production and Vendor Invoice.
Let me divide the topic into;
Reconciliation 1:
Opening Stock + Raw Material Receipt Raw Material Consumed = Raw Material Closing Stock
Reconciliation 2:
Receipt of Raw Material = Invoice received from Vendor
Reconciliation 3:
Raw Material Consumed = Raw Material Issued for the Production of Finished Good
Reconciliation 4:
Raw Material Closing Stock = Stock GL of Raw Material
Reconciliation 1: Opening Stock + Raw Material Receipt Raw Material Consumed = Raw Material Closing
Stock
As explained in my Previous Blog ERP Post Implementation Challenges Part 1 all material movements should be
considered for calculating the closing stock of material.
Reconciliation2: Receipt of Raw Material = Invoice received from Vendor
The Raw Material received should be matching with the invoice received from the vendors. I have done quite a lot of
research to generate report on the list of invoices received against a material.
Material Receipt (MB5B) with movement type 101+102 = Stock GL of Raw Material + Price Diff GL of Raw Material
with Type WE
To find the list of Invoice generated against the Raw Material:
There can be invoice and Credit/Debit notes posted against the material.
To generate Invoice list generated against the material:
We have to combine few tables for generating the report.
Execute SQVI and create a query with the following data.
Tables: RBKP, RSEG, LFA1
Joining Condition:
Tables RBKP-RSEG -> Joining Fields BELNR,GJAHR
Tables RBKP-LFA1 -> Joining Fields LIFNR
Figure 1.0
Figure 2.0
To generate Credit Note / Debit Note list generated against the material:
We have to combine few tables for generating the report.
Execute SQVI and create a query with the following data.
Tables: RBKP, RBMA, LFA1
Joining Condition:
Tables RBKP-RBMA -> Joining Fields BELNR,GJAHR
Tables RBKP-LFA1 -> Joining Fields LIFNR
Figure 3.0
Figure 4.0
Debit / Credit will be recorded as S or H
Reconciliation 3: Raw Material Consumed = Raw Material Issued for the Production of Finished Good = Raw
Material Consumption GL
Raw Material will be consumed for the production of Semi / Finished Good, which will be created against Process Order.
The total raw material consumed against a process order can be generated from transaction code KOB1.
Let me explain with an example:
Raw Material 1 (RM1) is used for the production of three Finished Good (FG1, FG2, FG3)
Material Process Orders Quantity Produced
FG1 10000035 67,981.00
FG2 11000035 343,842.00
FG3 12000035 61,601.00
Total Raw Material RM1 issued during the period is 106,136.00 TO. This is the quantity used for then production of
473,424.00 TO of FG1, FG2, FG3.
Figure 5.0
Table 1.0
(Report from MB51 movement Type 101 + 102)
From transaction KOB1 we will be able to equate the Finished Good Produced and Raw Material Consumed quantity.
Figure 6.0
Figure 7.0
Raw Material (RM1) Consumption GL should be updated with the value of 1,061,360.00
(Report from FBL3N Raw Material (RM1) Consumption GL + Raw Material (RM1) Price Difference GL)
Fugure 8.0
GL Entries Posted During the Process;
Figure 9.0
Stock Report of Material From FBL3N
Figure 10.0
Generally We can reconcile opening, receipt, issue Closing by inputting values in the table listed below;
Issue To Issue To
Physical
Materia Mat Receipt Price Production Cost GL
Opening 0 Qty MIR7 Inventory Sales Clos
l (101+102) Revaluvation Order Center Consumption
Posting
261 + 262 201 + 202
A B C D E F G H I J K
(A+B+C
FG1 A B C D E F G H D+E+F+G+H J
(F+G+
1,683,916.8 670.2
54,700.53 7,539,313.34 256,027.28 7,543,679.84 0.00 0.00 7,800,377.40 161,430.24 1,828,84
0 8
Table 2.0
Debit Credit
Raw Material Consumption XXX
Stock of Raw Material XXX
Stock of Finished Good 1 (FG1) XXX
COGM of Finished Good 1 (FG1) XXX
Table 3.0