WIP Calculation in SAP

[Former Member]

Hello All,

When we are Calculating WIP in SAP i found two things

it is taking all the materail cost from the order for which the raw material has been issued but the stock from the orders were not delivered. I think that is correct since the Stock is still lying in the shop floor and SAP is calculating the WIP from that stock.

But i have a problem in Understanding that WIP calculated for a Specifical Month is not getting reversed on the first day of the next month, but it is getting reversed on the settlement of the Order after complete delivery only.

For Example:

One Production Order ZYX is Created In March 20th for getting the output Material 123

for that we issued raw material A, B,C with total value of 200 EUR on 31st of may we calculated the WIP and it showed the value of 200 EUR in WIP but on 1st of April it is not getting reversed.

next month i.e. April we issued raw material to Order say D,E,F with Total Value of 800 EUR this time WIP is calculated on 30th April for 800 EUR and showing in the GL without any reversal in May 1st.

On 15th of may the Production Order ZYX Had the GR of Material 123 and now at the settlement of Order on the 31st May it is showing the settlement Entry and the addition entry of WIP Reversal for 1000 EUR.

Now i want to know why is SAP not Reversing the entry for every month and why is it getting reversed at the Order Closing Time.

Is it the SAP Standard Process or Is it some thing that can be changed by Customization.

Best Regards.

Krishna Chandra

[Former Member]

Hi,

so at the end of March WIP is 200 EUR and at the end of April it is 1000 EUR. The posting at the end of March posts the WIP change in March which is Zero at th 1st of March but 200 EUR at the end of march so the change is 200 EUR. In April the change is 800 EUR (200 EUR at 1st of April, 1000 EUR at the end of April) so this 800 EUR is posted.

The total WIP at the end of April 1000 EUR (200 EUR from March, 800 EUR from April), everything ok.

WIP is reversed if the order is finished (order status TECO or DLV). Thats how it works.

BR Christian

[Former Member]

Thanks Christian,

For your reply but what the mangement here wants and expecting SAP to do is Reverse all the WIP Calculated on the last day of the month to be automatically get reversed on the first day of next month.

Is it possible in SAP?

Because in the old legacy system here people said that it was possible and SAP is not having this feature.

Also couple of people who had taken SAP Certification training were saying that they know that SAP works in the same way.

can you please help me how to explain the management that the feature they had in legacy system is Possible or not possible in SAP.

Thanks in Advance

Best Regards,

Krishna

[Former Member]

Hi Khrisna,

Hmm i wonder what is the background why your management want to do that way? Is that your all order always finish (status : teco) in the end of the month?

In my opnion about your main question that it can't. Hope you can share the information.

Thanks

[Former Member]

Hi Christian,

In that case what happens if there is a partial GR for the order for EUR300 on 5th Of May, now the FG stock accounts will get an update of EUR300 and the final standing of the balance sheet on 5th of May will be as follows :-

Balance sheet

FG stock accounts : EUR300

WIP Total       : EUR1000

Total BS stock value = EUR1300

This is actually wrong because the total stock cannot be EUR1300 where EUR300 more than total WIP of EUR1000

The right way is when a GR of 300 is happening the system should reverse a WIP value of 300 from the WIP total instead of waiting till the order changes status to DLV or TECO. Only then the BS stock total can be correct as follows :-

Balance sheet

FG stock accounts : EUR300

WIP Total       : EUR700

So my question is why SAP is not reversing the value of the GR from the WIP total computed earlier?