Negative WIP posting in Finance

[Former Member]

Dear All,

i have doubt, as far as i know System will never post Negative WIP in finance when we do the settlement or an order.

but in my client system post Negative WIP in Finance, i dont know why

can any body tell me the reason of that.

Regards

Shayam

[Former Member · Accepted solution]

Hi Shayam,

I have seen this kind of WIP posting also.

May i ask you which WIP are u referring to? the one maintained as BS account or PL account?

if it is the former one (BS account)

it will be negative when the total credit balance in you production order is bigger than your total debet

Hope that helps.

Regards, Erwin

[Former Member · Accepted solution]

Thanks for Reply,

Normally it should be

WIP A/C Dr (B/S Account)

To Change in WIP (P/L Account)

But if user produce more and consume less raw material then in that case system should not post Negative WIP.

But in our system it is posting as

Change in WIP (P/L Account)

To WIP A/C Dr (B/S Account)

Which is totally wrong according to accounting standard as wip can not be negative.

Pl. suggest

regards

shayam

[Former Member · Accepted solution]

Shayam,

In configuration you can control if negative wip is posted to FI and what accounts it should be posted to. When you calculate wip the system will assign the wip amount to an RA category. If the wip amount is positive the amount is assigned RA category WIPR and if it is negative the amount is assigned to category RUCR. Using transaction code (OKG8) you map the RA categories to the proper G/L accounts, If you don't want an FI document to post for negative wip then just remove the entry for RUCR from that table. Of course, if you do this that then the costs remaining on your open production orders won't tie to the wip balance. Maybe a better approach would be to map the RUCR category to different G/L accounts than WIPR.

thanks,

[Former Member · Accepted solution]

resolved

Thanks

Shayam

[Former Member]

Hi,

In cases where the standard price of the Finished Product is more than the actual cost incurred there is a possibility of system calclating reserves for unrealised costs.

Thanks & Kind Regards

Umapathi G

[Former Member]

in WIP calulation, order still in REL, how come you have goods receipt, if you already goods receipt, you should calculate variance instead of WIP