The change in stock for WIP is not created as a cost element because the

amount is not credited toproduction order when WIP is created as it is a

financial entry and the balance is already held in the order. TheCOGM
account is defined in G ! "#$ and it is the account that should
be credited when finished or semifinished goods are recei%ed in stock
from the order. The change in stock account & '"( is debited when
thematerials are issued to production or cost center. The change in stock
account for raw materials is )MConsumption $ccount* for semi finished
goods the same may be defined in the following way

Strategy 1:Define 1 single account as 'Increase / Decrease in SFG' and

define it as COGM account in GBB / VBO as well asc ange in stoc!
account in BSV"Strategy #:

Define # different accounts in GBB / VBO and BSV and grou$ t e% at

one $lace in your financial state%ent&ersion so t at t e net c ange is
always re$orted"
)emember* WIP and 'emi finished goods are not same from '$P point of
%iew. The COGM account for WIP ismaintained in O#G+ and do not
create a cost element for the same.,or ,inished Goods maintain COGM
account in G ! " O and nothing is to be maintained in '".I hope this
clarifies.
-)P Post Implementation Challanges Part /0nderstanding COGM*
COG'* Price 1ifference 2Closing 'tock Calculation
$uthor3 )an4it 'imon 5ohn
$fter our Go67i%e we had gone through %arious tough stages
while trying to stabilise the system.Ma4or challenge we faced was resistance
from end users* lack of confidence on the new system bythe e8ternal and internal
stake holders. ,inally after working so hard on the %arious points raised bythe
internal as well as e8ternal team* we succeeded.In this blog I would like to highlight
the most important challenge we faced. Mainly they are two innumber9/( Clarity on
COGM* COG' 2 Production Order Price 1ifference general ledger accounts.:(
Trying to e;uate the formula
Opening Stock + Receipt – Issue = Closing Stock
/( COGM* COG' 2 Production Order Price 1ifference general ledger accounts.7et
us start with COGM9