Product Costing Process-Sales order costing for MTO scenario...

[mvikasfico]

Hi All Experts,

Can anyone please explain the detail process of sales order costing with FI and CO entries passed at every step?

Regards,

Vikas Pandey

[Former Member]

Hello Vikas,

Below is the process wise entries.

Valuated and non-valuated Sale Order scenarios - Business Process Flow – FI/CO
SAP Scenario 1 - Valuated Sale Order Stock – with Sale Order Controlling – (MTO, ATO and ETO with VC):

Enquiry
Opportunity
Quotation (Creation and Approval). In case of ETO – BPO is created and updated in quotation (condition type)
Creation of Sale Order
MRP Run – Creation of Planned Order – Creation of Production Order and Purchase Order
External Procurement – Goods Receipt:
       ROH Inventory Account           Dr (BALANCE SHEET)
To GR/IR Account                   Cr (PROFIT & LOSS ACCOUNT)

Material Consumption to Production Order:
In FI:

ROH consumption Account       Dr (PROFIT & LOSS ACCOUNT)
To ROH Inventory Account       Cr (BALANCE SHEET)

Same in the case with HALB

In CO: Cost of Material is debited to Production Order

Activity Consumption to Production Order:

In FI: No Posting
In CO: Production Order is debited and cost center is credited with activity cost.

Goods Receipt from Production Order:
       FG Inventory Account           Dr (BALANCE SHEET)
To COGM Account                Cr (PROFIT & LOSS ACCOUNT)

Delivery to customer:
                    In-Transit Account             Dr. (BALANCE SHEET)
To FG Inventory Account     Cr (BALANCE SHEET)

Invoicing to customer:
                    In FI:
Customer Account             Dr (BALANCE SHEET)
To Revenue Account          Cr (PROFIT & LOSS ACCOUNT)

COGS Account                  Dr (PROFIT & LOSS ACCOUNT)
To In-Transit Account       Cr (BALANCE SHEET)

In CO: COGS and Revenue are posted to COPA Period end closing – Production Order

Revaluation of activity prices: Production Order and Cost Center will be debited or credited as the case may be
Calculation of WIP In FI:
       WIP Account                           Dr. (BALANCE SHEET)
To Change in WIP Account      Cr (PROFIT & LOSS ACCOUNT)

If the Order is completed:

In FI:

Change in WIP Account           Dr (PROFIT & LOSS ACCOUNT)
To WIP Account                     Cr (BALANCE SHEET)

Calculation of Variances: Variances are calculated on the Production Order. No FI or CO entries
Settlement to Sale Order: Production Order and Sales Order will get debited/credited depending on whether they are positive or negative variances. 
Result analysis at Sale Order: Result Analysis run will identify the status of the sale order and will enable the postings to COPA at the time of settlement
Settlement of Sale Order:
In FI:

Variances Account                        Dr (PROFIT & LOSS ACCOUNT)
To COGS Account                         Cr (PROFIT & LOSS ACCOUNT)
(It would be otherwise if variances are positive)

In CO:

COGS, Revenue and Variances are settled to COPA
  
SAP Scenario 2 – Non-valuated Sale Order Stock – with Sale Order Controlling: Process Step Business Process Flow Value Flow – FI/CO

Enquiry
Opportunity
Quotation (Creation and Approval)
Creation of Sale Order
MRP Run – Creation of Planned Order – Creation of Production Order and Purchase Order
External Procurement – Goods Receipt
In FI:

Consumption Account             Dr (PROFIT & LOSS ACCOUNT)
To GR/IR Account                  Cr (PROFIT & LOSS ACCOUNT)

In CO: Material costs will directly get posted to Sale Order

Material Consumption to Production Order:             -           Not applicable
Activity Consumption to Production Order
In FI: No Entry
In CO: Activity Costs are posted to Production Order

Goods Receipt from Production Order:
Only Material Document for movement of goods will be there.
The stock is neither valuated in CO nor in FI
Delivery to customer:
Just goods movement from sale order stock to customer.
No value postings in FI and CO
Invoicing to customer
In FI:

Customer Account                 Dr (BALANCE SHEET)
To Revenue Account             Cr (PROFIT & LOSS ACCOUNT)

In CO: COGS and Revenue get posted to Sale Order Period end closing – Production Order

Revaluation of activity prices: Production Order and Cost Center will be debited or credited as the case may be
Calculation of WIP:                 -           No WIP
Calculation of Variances:            -           No Variances
Settlement of costs to Sale Order: All the costs accumulated in Production Order gets collected to Sale Order
Settlement of Variances: No Variances in Production
Result analysis at Sale Order:
In FI:

WIP Account                                Dr. (BALANCE SHEET)
To Change in WIP Account            Cr (PROFIT & LOSS ACCOUNT)

If the Order is completed:

Change in WIP Account               Dr (PROFIT & LOSS ACCOUNT)
To WIP Account                         Cr (BALANCE SHEET)

No CO postings will happen
18.   Settlement of Sale Order: COGS, Revenue and other direct sale order related values will get posed to PA.

[mvikasfico]

Thanks Pankaj Its really very useful.

Regards

[mvikasfico]

Hi Pankaj,

As per my understanding GR/IR is balance sheet account but above its shown as P&L???

Please clarify...

Regards,

Vikas Pandey