Exports

[Former Member]

Dear Friends

Lets say today an exports SO is made for 100 USD. Assume today, 1USD= Rs 50. If the customer pays after 30 days & on taht day, if I USD= Rs 60, then what amount will customer pay & how is this exchange rate deviation maintained in SAP?

what if the customer makes advance payment.

Request an expert, who has worked extensively on exports to guide on this.

Rgds

Sumanth.G

[Former Member]

answered & closed.

[Former Member]

HI

As other friends said for wxports foreign exchange whatever the difference in the posting amount the same will goto the G/L a/cs GAIN/LOSS from foreign exchange.

If the exchange rate is high as compared to the billing then it will go to gain from foreign exchange and vice-versa.

You will know this just try in DEV

regards

Prashanth

[Lakshmipathi]

Customer will ways pay in foreign currency only and hence, there will not be any difference as for as the foreign currency value is concerned.

You will have exchange difference only at the time of posting incoming payment in foreign currency.

When you generate a billing document in foreign currency, system will always consider the exchange rate is what is maintained in ob08 and based on that rate only value will be posted to FI as a local currency.

Here while posting such foreign currency payments, exporters' bank will give credit into their local currency based on the exchange rate rules prescribed by RBI.

So the finance people will update with the same exchange rate what is adviced by their bank and obviously, there will be a difference.

From FI side, there will be two G/Ls for export scenarios; one is "Exchange Rate Gain" and another is "Exchange Rate Loss" and the difference will be posted to respective G/Ls.

This is what I come across when I was handling exports.

thanks

G. Lakshmipathi

[Former Member]

Dear Mr.Lakshmipathi & Mr.Balaji

I thank you for your prompt response.

I shall keep this thread open & any doubts/issues, on this, will revert .

Rgds

Sumanth.G

[Former Member]

Dear Lakshmipathi & Balaji

I thank you for your quick response.

I will check that & revert.

Meanwhile,pls permit me to keep this thread open & if any doubt/issue on this, will let you know.

Rgds

Sumanth.G

[Former Member]

Dear Mr.Lakshmnipathi/Mr.Balaji

Can you pls tell , what is the process & the complexities involved if an export customer wants to RETURN back the goods to the indian plant?

Also, wat about the statutaury complexities involved.

Rgds

Sumanth.G

[former_member187989]

Raise a separate thread.

[Lakshmipathi]

Statutory Points

1) Before bringing back the goods to origin country, exporter has to inform the customs / excise authorities about the extent of rejection of goods and take concurrence from excise authorities

2) Whether the original exports was made under any export obligation like DEPB, Duty Drawback etc., if so, you need to off set this entry in SAP if any zee table is developed

3) If the original exports was made under Rebate, then you need to check how the excise entry should get posted in FI

From SAP Purview

1) For return process, just you need to configure return order type, delivery type and credit note; thats it.

2) As stated above, if through SAP any obligation is generated, ensure that while creating credit note, the same is reversed

But from my experience, most of the exporters wont prefer to take back the goods to their plant due to the fact that it involves exhorbitant cost. Right from customer warehouse in overseas country till the material reaches the plant in local country, exporter has to bear all the charges.

So instead what exporters will follow the process is that they will send their staff to the site, inspect the material and declare the exact scrap value.

These are all just for your information I am telling. Dont bother about all these. Client will take care of functional issues.

thanks

G. Lakshmipathi

[Former Member]

hi,

it is better to find a new customer there only and sell the product there in that place.

issue credit memo to the old customer and raise a debit memo to the new customer.

100% those goods which we export will not be returned back until its inferior quality is sent.

hope this clears your issue.

balajia

[Former Member]

Dear Lakshmipathi..

Your answer was pretty valuable to me. Here, the exports are under LUT.

You are a moving encycleopedia of knowledge.

Rgds

Sumanth.Gururaj

[Former Member]

hi,

you have two options:

1. static rate made as agreement - for payment terms.

this rate will be fixed at the time of agreement with the customer & both parties comes to an agreement stating that what ever is the prevailing rate they will be bounded to the agreement rate as agreed.

2. Current Exchage rate - flows from OBA8 as you maintain exchange rate. here we will maintained as direct and indirect quote

in OBA8

that depends upon the agreement made to the customer with the company.

regards,

balajia

[former_member187989]

It is OB08 not OBA8 as mentioned by you.

[Former Member]

Dear Jaykanthan

You cleared by confusion. Thank you boss.

Rgds

Sumanthg.G