transfer overhead

[Former Member]

1. If I use Direct Posting From FI/MM, this will post overheads as well. Now in this case is it ok if i dont use transfer of overhead. ?

2. can i use direct posting from fi/mm and transfer of overhead simultaneously, what is the best

practice ?

3. if I use Direct posting from fi/mm, and do not assign mm condition types to value field/qty. field, what would be the impact or say is that correct?

4. Is it must to use assessment cycles, i am ok with using direct posting from fi/mm, and dont want to use assessment, what would be the impact.

[Former Member]

Hi,

The best practice for overhead allocation is

-to go ahead with costing sheet & overhead calculation at period end

-by distributing the overheads (accumulated at some object) to various respect object through assement cycle, as a part of period end process.

- by making a direct entry to respective object with respect to that entry.

It all depends on the fact that which is best suitable for your business and acceptable to your business.

The only care that one has to take while using any of these ways is : there shouldn't be any duplication of entries while posting these overheads. Like water bill paid by transformer manufacturing unit cud be a overhead to them, so while paying the water bill they they can debit water cost center and credit the vendor for water and in period end process either you can

- distribute the amount to different object using assesment cycle, which will be only a controlling posting and no financial posting ( as it accounting entry has already been done once).

- internal transfer posting ( again only a controlling posting only, no financial posting).

I hope this would help you.

Regards

Avisek Bhardwaj