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Plant to Plant Sales

john_steven
Explorer
0 Kudos

Hi,

My client has STO process but they are considering it as sale i.e. they are charging the receiving plant for the goods sent. Please find the below.

1. Receiving plant will raise the purchase order to supplying plant.

2. Sales order or stock transport order is created and is moved to production. Once production is completed the material is moved to stores and is dispatched.

3. Before the dispatch 100% payment should be done by the receiving plant. Here supplying plant is charging the recieving plant (as how they charge a normal customer)

This process is done under the same company code.

So please let me know a better way to map this scenario from SD module. Also let me know how the accounting entries will happen for this process.

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
0 Kudos

Dear steve19

Though 2 plants are in same company code there is a financial transaction in between those two plants so you have to consider the receiving plant is a customer.

As per my knowledge below configuration will fix your requirement.

Create Respective sales order, delivery, billing documents.

Create respective pricing procedure with PR00 Because u r going to charge receiving plant ,(Since normal STO there is no PROO because no cost transfer).

Create a status profile for sales document , once an authorized person release the sales document then only the goods will be dispatched.

I think after invoice accounting entries are

Recieving plant is Debited

Revenues for supplying palnt Credited

Taxes credited

Please revert if you want any further clarifications

Hope it will fix the issue.

Thanks&Regards

Raghu.k

Answers (4)

Answers (4)

reazuddin_md
Active Contributor
0 Kudos

Dear Steve,

As already suggested in above replies, process can be mapped in SD to achieve ur requirement.

But first have sol's for below queries from client ( legality & feasibilty) :-

- Does your client wants to show this as Revenue ? not only from the plant perspective but from the whole company wide. Because this is not actually a sale?

- If client wants to show only Plant revenues, not for company wide, then while invoice posting, u may have STO specific G/L accounts which should not be shown in Company Balance sheet ( final statement)?

- As our mate already pointed, what price this transfer is occuring to receving Plant?

- Where FI wants to show this Difference in price from Supplying plant to receiving Plant? Will this diff amount will be inventorized in Receiving Plant? if not, how it will be accounted?

- How Costing will be performed? If this case in both the plants?

So I understood that you need to discuss further more with your client's Accounting dept?

Regards,

Reazuddin MD

john_steven
Explorer
0 Kudos

Hi Reazuddin,

Please find the explanation below,

- My client wants to show this revenue from the Plant perspective.

- Supplying plant is adding 10% as profit margin and the same they are charging to Receiving plant.

- They are using this price mainly for excise calculation purpose.

Regards,

Steve

reazuddin_md
Active Contributor
0 Kudos

Hello Steve,

- My client wants to show this revenue from the Plant perspective.

With the help of Report, You can get Plant revue. Ask the client whether invoice posting to accounts is really reqd?

(hint: You can very well get the report ( std or Customized) Sales based on sold to or payer. )

Develop own report for more flexibility ( copy of VF05N )

- Supplying plant is adding 10% as profit margin and the same they are charging to Receiving plant.

- They are using this price mainly for excise calculation purpose.

This 10% is known as "Mark up price" or "Transfer Price". if this is used for excise calculation, then create price cond type for which cond record has to trigger automatically ( or via cond record).

Transfer price ( ZTPR) = Cost (VPRS) + 10% of VPRS

maintain your pricing procedure accordingly. ( Customer no will differentiate the STO pricing procedure). so no need to have seperate Invoice. Create pro-forma invoice & create Excise Invoice .

Let us know, if you need further clarifications.

Regards,

Reazuddin MD

ajitsingh6
Active Contributor
0 Kudos

Hi,

U can achieve it through standard STO process,

P.O. Created -- Delivery Created -- Billing Created ,only do keep Copy Control between NL(Delivery Document) and Billing Document (F2 instead of Proforma Invoice) and maintain Pricing at Billing level.

Need further clarification,let me know.

Regards,

Ajit K Singh

Lakshmipathi
Active Contributor
0 Kudos

It is as simple as that the receiving plant should be considered as a customer and accordingly, customer master has to be created. Then follow the normal SD process. Sending Plant has to create a sale order, delivery and billing. Accounting entries will be as like your normal sales.

G. Lakshmipathi

john_steven
Explorer
0 Kudos

Hi Lakshmipathi,

My client has only one company code and he want to generate accounting entries for the STO done between the plants. He is generating the invoice and collecting the amount from the other plant. But in standard SAP is it possible to do this scenario?

Former Member
0 Kudos

Hi,

There are some very important things to consider before customizing this scenario.

1.Stock transfer price- which price they are using for this process. In case they are using internal price for stock transfer, copy VPRS and use it as price condition.

2.Invoicing - Do they want accounting entries for this process? If so the received amount is treated as sales revenue. Subsequently when they sell from the second plant to the customer again accounting entries will be posted. Thus, sales revenues get inflated since same material is billed twice, i.e. First, for the Plant sale and second, for the customer.

3.SIS u2013 should these sales values to be considered for statistical purposes.

In case the Plant is a considered as a customer, in every sense, then create the receiving plant as a normal customer with a separate Account group. It is better to have separate distribution channel and treat this sale as a normal sale and not as STO. You can also activate SIS configuration. Please discuss with your FI CO consultant.

In case of any clarifications please revert back.

Regards,

Sharan