PGI Date and COGS accounting date should be different

[former_member188076]

Hi All,

I have a scenario where the client wants to post the COGS account when the material reach to the Customer and on the same date wants to Invoice the Customer, this is required for the Matching Concept of Accounting so that Recognition of Cost and Revenue should be on the same Date.

For example : Order (01-01-2012) --> Delivery (02-01-2012) - material send to Customer and it reach to the Customer on 10-01-2012 --> PGI (10-01-2012) --> Invoice (10-01-2012)

However in India we need to update the RG1 register at the time when we remove the material from our Factory, and to update it we need to do the PGI, and as soon as we do the PGI the COGS accounts will be Debited. Whereas the material will reach to the customer, say for example, after 10 days and then the invoice will be created, so the Posting of COGS account and Revenue account will be different.

For Example (In India) : Order (01-01-2012) --> Delivery (02-01-2012) --> PGI (02-01-2012)(NO Accounting to COGS) - material send to Customer and it reach to the Customer on 10-01-2012 --> COGS entry (10-01-2012) --> Invoice (10-01-2012)

My Querry is:-

1) Is it possible to achieve the above requirement that we do the PGI but do not make any accounting entry?

2) If yes, then how can we recognise the COGS accounting on a later date, when the material reach to Customer?

3) Is it possible through Standard SAP?

4) If standard SAP procedure is not possible, kindly suggest the work-around and basic logic for the same.

For any further query feel free to ask.

Thanks and regards,

Amitesh Anand

[Former Member]

Hi Amitesh Anand,

I think VL01N screen Actual GI date can serve your purpose.

Ram

[jpfriends079]

In my opinion, its neither possible nor practical.

B'coz its standard for PGI that

1. Stock quantity is updated in goods outward movement.

2. Books for inventory accounting is updated with values.

3. Status in all sales document is updated accordingly.

4. Books for Cost of Goods Sold is updated.

6. Billing due list is updated

And these all happen in one instance.

Accounting entries:

COGS GL Acc	CR
Inventory GL Acc		DR

Further, kindly check & clarify with your's clients CFO or Finance head about this practise.

Hope this can help,

If in case any concern or doubt, do revert back with it.

Regards

JP

[former_member188076]

Hi Prakash,

Thanks for your quick response.

I understood that this is not possible through standard process. However I am looking for some work-around and its complications from Indian Excise and Sales Tax perspective. like ;-

1) Can we update RG1 without Material Document (I feel it is not possible, correct me if I am wrong)

2) Is it possible to create material document without the accounting entry at the time of PGI, so that we update the RG1 and later on create the accounting entry for COGS through some work-around. If yes, what will be the legal implications and what should be the possible work around.

3) Is it possible to update some other G/L (not COGS) at the time of PGI, and later on through some work-around transfer the accounting entry from this other G/L to COGS account. If yes, what will be the legal implications and what should be the possible work around.

4)

Accounting entries:
COGS GL Acc CR   
Inventory GL Acc   DR 

I think the Standard Accounting Entry at the time of PGI should be:

COGS Dr (G/L nature will be - P&L account)

Inventory Cr (G/L nature will be of Balance Sheet account)

Kindly correct, if I am wrong.

Looking forward for some more suggestions.

Thanks and regards,

Amitesh Anand

[Former Member]

Hi Amitesh,

For RG1 register update, we need Material document for sure. However there is a workaround.

During PGI the entry can be posted to GL(say Deferred COGS).

Further, a report has to developed,

> It should show the list of documents posted to the 'Deferred COGS GL and not reversed yet.

> Based on the customer receipt, the reports should post an entry reversing 'Deferred COGS' GL to the regular 'COGS' GL

With Regards,

Karthik

[jpfriends079]

Wow!

Your understanding is absolutely fine.

There can be a possiblity of having separate provisional/deferred account for this.

You can determine the same in OBYC for GBB.

Have to look out way for transferring the same from Provision account for COGS to Actual GL Account.

This link can be helpful to you -

But,

legal implications 

????

No idea.

You need to check this with CA or finance team of your client.

For this legal implications on this scenario, post your query in FI forum.

Regards

JP

[former_member188076]

Hi Ram / Karthik,

I think VL01N screen Actual GI date can serve your purpose.

Ram 

If I change the Actual PGI Date to a future date and do the PGI, then the material document will be posted on the given future date, and so on Current Date (actual date when the material physically move out from the factory) we can not Update the RG1 Register. RG1 Register will be updated on the Posting Date of Material Document, so this will be an Excise Audit Issue.

Further, a report has to developed, 
> It should show the list of documents posted to the 'Deferred COGS GL and not reversed yet.
> Based on the customer receipt, the reports should post an entry reversing 'Deferred COGS' GL to the regular 'COGS' GL

I am looking for the same work-around without defeating any Excise Legal norms. How do we reverse the "Deferred COGS G/L" and make the posting in actual COGS G/L, and what will be its implication on Inventory Ledger and Excise Audit?

Thanks and regards,

Amitesh Anand

[former_member188076]

Hi Prakash,

Thanks for your suggestions.

I know this is difficult , but am looking for this and trying to find some solution. I will update the forum, if I get any solution.

In the mean time I am still open for any standard or work-around suggestion from the forum.

Thanks and regards,

Amitesh Anand

[former_member188076]

Hi,

Any suggestion!!

Thanks and regards,

Amitesh Anand

[Lakshmipathi]

As already confirmed, through straight configuration, this is not possible. May be you can think of going with consignment process. That is you should have two order types, delivery types with different schedule lines. For one schedule line, assign 631 movement type so that there wont be any impact on inventory and once, customer receives the goods, create one more delivery with 633 movement type and subsequently, billing.

May be, you can consider doing automation of issue delivery and PGI, once the user creates the issue order. Not sure, how far, you will succeed in this, but you can have a try in development client.

G. Lakshmipathi

[Former Member]

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