Service Entry WIP

[Former Member]

Dear All,

Service entry going on huge level in my indujstry. While Calculating of WIP Service Entry also came into Picture. Here the Process going on like this, Purchase requisition is going based on Account Assignment Cat "N" through Net Wrok. After that ML81N Service entry then MIRO, then finally Payment.

Here my doubt is at what level to up to what level the should be reflect in Work In Process.

Regards

Edited by: raj on Dec 1, 2009 6:34 AM

[Former Member · Accepted solution]

Hi,

At the time of ML81N,Cost will be debited to your project.

If you want to calculate WIP,then run RA and settle as per the RA Config.Here WIP B/S will be debited and P&L will be credited.

After you invoice to your customer,this entry will be reversed.

Thanks,

Muzamil

[Former Member · Accepted solution]

Dear muzamil firdosi

I have done RA Key and its shows the Service amount in RA transaction. Here my doubt is while the Service Entry is going though the Ml81n, miro & Payment, here after the Payment to the Vendor, the Service Entry Amount should be out of WIP, but here the amount appearso in the RA report.. After Payment to Vendor menas that amount out of WIP. Right?

Regards

Edited by: raj on Dec 1, 2009 9:57 AM

[Former Member · Accepted solution]

Hi,

The cost you incur on the project will be WIP.

Payments is not WIP that is payment to vendor.

Muzamil

[Former Member · Accepted solution]

Dear muzamil firdosi,

Your not cathing the point, Service Cost for the Project is also included into WIP. Because it is also one of the Cost like Raw Materials. Service is nothing but; if we are giving contract to compeltle a project to one Vendor. The Project will take to 1 year to complete, every month we have to pay the Service amount to the Contractor/ Vendor. Is it correct? means it is also invoced into WIP.

Regards

[Former Member]

Answered

[Former Member]

Raj,

The expenditure is posted to the WBS at the time of service entry. When those costs are settled they are posted to WIP (the asset account) debit and a settlement account (credit). Payment is not relevant to the WIP and will not affect it in any manner.