COGS Vs revenue recognition for export sales

[Former Member]

Dear Guru's

I have an export sales scenario where we are doing the PGI from the plant . As per the Sap process COGS will get updated when we do the PGI. but the commercial invoice will be created once the Bill of lading is recieved.Now once we do the billing my sales revenue account will be updated.Till the time i do billing i have only cost but no revenue against it . during the month end how we will tally the cost /revenue accounts .

Is there any way we can book provision or any work around to handle the scenario

[Former Member]

You can achieve this with standard functionality, but you will have to make some configuration change:

- Create the new movement type

- Create the new MM account assignment

- Create a new schedule line category

- Create a new item category

- Create the assignment of the new schedule line category to the / a (new) item category.

Maybe you have to create a new item category group to ensure that the proper item category in the sales order is being determined.

Around user exits in MM in account determination: I'm not aware of any (good) ones, but you might want to take a look at the Business Transaction Events (transction FIBF). These are also a kind of user exit and might provide the functionality you are looking for.

If you can't accomplish the requirement through an enhancement (user exit, BAPI, BADI, BTE) you might want to consider using an intermediate G/L account during the Post Goods Issue. And then during the release to accounting doing an accrual to the "correct" G/L account, since in the (standard) Revenue Account Determination you can use all kinds of criteria.

Regards,

Jan Pel

[Former Member]

You can achieve this with standard functionality, but you will have to make some configuration change:

- Create the new movement type

- Create the new MM account assignment

- Create a new schedule line category

- Create a new item category

- Create the assignment of the new schedule line category to the / a (new) item category.

Maybe you have to create a new item category group to ensure that the proper item category in the sales order is being determined.

Around user exits in MM in account determination: I'm not aware of any (good) ones, but you might want to take a look at the Business Transaction Events (transction FIBF). These are also a kind of user exit and might provide the functionality you are looking for.

If you can't accomplish the requirement through an enhancement (user exit, BAPI, BADI, BTE) you might want to consider using an intermediate G/L account during the Post Goods Issue. And then during the release to accounting doing an accrual to the "correct" G/L account, since in the (standard) Revenue Account Determination you can use all kinds of criteria.

Regards,

Jan Pel

[Former Member]

Take help of your CO consultant,

On the basis of sales order you can post your revenue to COPA, and cost when PGI.

use t-codes KE4I, KE4M, KEKF

This option or provision is already in SAP.

kapil

Edited by: Kapildev Farakte on Nov 10, 2009 8:41 AM

[Former Member]

Hi there,

At the time of PGI, there will be two postings one debit COGS account and credit stock account. That means cost of goods sold increased to the tune of valuation of stock decreased. Revenue will be posted only upon billing against debit to customer account, now I am just wondering what is that you are reconciling? would you be able to provide all your account entries at the time of PGI and invoice?

Thanks

Murali

[Former Member]

Hi Murali,

thanks for your reply,

But the issue is cost is captured at the time if PGI against material stock account. and we raise invoice after 15 days ( after getting the bill of lading). when its a month end closing my cost is only captured but i have not booked any revenue at that part as i will raise invoice after 15 days.!!!!

[Former Member]

So may I assume problem is not with reconciliation, instead you want to know sakes revenue in pipeline (i.e. stock that is PGIed and not invoiced yet). If this is the requirement you can ask your developer to create a customized report which checks all the open deliveries for which PGI is already done and calculating sales value (tentative) of these open items based on quantities from actual PGIed quantity and price from sales order.

Hope that helps, if my understanding of your requirement is incorrect please excuse me and post your query with more detail.

Thanks

Murali

[Former Member]

Thanks Murali,

Thats right.... I have already suggested about the report , but they want the enteries to be passed diretcly from system.

Do you mean to say that a manual JV need to be passed in the month end . Because they cannot show the only cost incurred revenue need to be also shown agains the cogs.

[Former Member]

Manual journal comes in to picture if and only if you want to reconcile some accounts at the end of period, but I would not suggest that route for revenue. However you may try revenue recognition (might help to some extent) for your requirement. Please check revenue recognition SAP documentation for this.

Thanks

Murali