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COGS price different than Billing Price

Former Member
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Hello, currently I am facing an issue where when a sales order or an STO is PGI'd it posts a different price than when it's billed.

Example below

Total for Sales order is = $33.98

Price in the COGS after PGI = $38.27

Price in the Invoice to customer = $33.98

Price in the Intercompany billing = $38.28

As you can see the price is all over the board. We are currently trying to work through a rounding issue as well. But what I'm focused on now is the pricing from sales to COGS. Does anyone have any suggestions? Also if you have any suggestions about the rounding issue please let me know. For the rounding issue we have implemented note 78799 but it does not seem to have helped. Thanks for you help.

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
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The COGS account is hit when the material document is posted. The amount comes from the price of material master, and not from the sales order or condition records.

Normally, COGS is the cost of the material sold, and billing / sales order price is what is expected from the customer. The difference is the profit for the company. In case there is no difference, the company will not be able to show a profit.

Answers (2)

Answers (2)

Former Member
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Thank you this has explained a lot, but i do have a question currently ours is set to 'G' and the Rounding rule is blank for commercial. What I am wondering is if i change the cond. category from 'G' to 'S' and also change the rounding rule from blank to 'B' to round down would that work? Possible take care of both issues?

Former Member
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This is not an area where you don't want to be creative!

IMHO you should copy exactly the definition of VPRS to your own condition type.

In the systems of my Consulting customer, I stick with the standard condition type VPRS; just in case there is anything hardcoded on the condition type in some place of the standard system.

Regards,

Franck

former_member184555
Active Contributor
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Hi

Guess, you are maintining moving average price in your material master. Maintain only standard price and create another cycle till billing for different scenarios. Hopefully it should pick the same value. Though we maintain G in the condition category, it first checks for standard price and if it is not available, then picks the moving average (which changes based on info records).

Regards,

Ravi

Former Member
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In this test I did the price was 19.49 and I test ordered 2. So that would be 38.98 but when the PGI is posted it's 38.27. I checked the article in MM43 and the Eff. price is 19.49. Would it have something to do with the calculation in the movement type 601?

Former Member
0 Kudos

Hi Charles,

The COGS is defined as VPRS condition type in the standard SAP system.

To understand the behavior you need to "divide and conquer".

Analyze separately the 4 different flows:

- Standard Sales Order

- Intercompany Sales Order

- Stock Transport Order (within the same company)

- Intercompany Purchase Order

Each flow is somehow handled differently for COGS depending on the Business Logic.

What always applies is that the value of goods sold is based on the material valuation in the current plant at the moment of the goods issue.

- If the material is managed trough S (standard) cost, then the COGS / unit it will always be the same.

- If the material is managed through V (variable) cost, then it will fluctuate.

This is one of the reason why it makes sense to you use standard cost for finished products.

BTW VPRS in SAP is not directly related to the Sales Price, but it should definitely be lower than the Net Sales Value if your company wants to make money!!

Best Regards,

Franck