Customer Project RA settle to gross profit

[Former Member]

HI all,

      I am PS guys,Now our customer have the following requirements for customer project settlement,i.e:

      use Cost-Based POC Method,SD billing credit project settlement account,not revenue account,revenue generate by project settlement

      project plan revenue 2000,plan cost 1200,plan profit 800(2000-1200)

      In February

                occur actual cost  300, POC = acutal cost / plan cost = 300/1200 = 25%

                COS = plan cost * poc = 300, revenue = plan revenue *  poc = 2000 * 25% = 500 ,gross profit  = revenue - cos = 500 -300 =200

      settlement Accounting document :

               DR cos 300

                     gross profit 200

                    CR  revenue 500

       In March. project complete,use 2 steps settlement

                 total actual cost 1200,POC =100,actual revenue(project settlement account) 2000

                 COS = 1200,revenue = 2000,gross profit  = 800

                settlement accounting docment

               (1)    DR   cos 900

                             gross profit 600

                            CR  revenue 1500

                (2)   DR  project settlement 2000

                          CR  acutal cost   1200

                                 gross profit   800

       Do any of you have tips and tricks to reconcile this area? how to configure RA ? Tks~~~~

[Former Member]

out of curiosity, when you say you post to Gross Profit what does that mean?

The postings you show don't balance.

[Former Member]

1.The general approch only reflect COS and Revenue in project RA,but this customer needs to reflect the gross profit before project completion settlement in SAP system.

2.The posting is balanced,maybe I don't write the billing document.All posting just as follow:

    1) cost accur

        DR  actual cost                     1200

          CR  material consumption   1200

    2) billing

      DR  customer AR               2000

           CR  project settlement    2000

   3) project settle

        DR  COS                          1200

              gross profit                  800

           CR  revenue                   2000

    4) manually adjusted

          DR project settlement             2000

            CR  actual cost                       1200

                   profit gross                       800

[Former Member]

With Cost based POC RA in February (assume here that actual revenue = 0) you get to recognize 500 revenue.  RA settlement will post CR 500 to the P&L and DR 500 to the balance sheet.

Then in March when you complete the project the RA will allow you to recognize all of the actual revenue posted and will undo the postings from February.  CR 500 the balance sheet and DR 500 the P&L.

This RA method doesn't make postings to COS since Actual Costs = Recognized Costs.  It basically adjusts the revenue on the P&L depending on the difference between Recognized and Actual revenue.

[Former Member]

Dear ken,thanks for your reply.

       I have solved this problem.The method just as following step:

• I use cost-based POC RA
• not use COPA,WBS element's settlement rule is G/L account (gross profit) 
• Posting rule for RA configure COSR,CLRV
• In Feb. project's settlement document is right,just as:

        DR  COS   300

               gross profit  200

        CR   Revenue   500

• In Mar.

        DR COS 900

             gross profit 600

         CR  Revenue  1500

         Finacial department entry document manually as follow:

         DR project settlement 2000

            CR  actual cost 1200

                   profit gross 800

  That's all.

[Former Member]

so pity nobody reply,the problem solved

Message was edited by: Moderator