Samples processing with excise

[Former Member]

Dear Experts,

I am facing the following situation and would like to seek your opinion on the same.

Plant is configured and manufacturing plant with excise registration and a GRN is made w.r.t. process order into FG store. (SAP transaction recorded)

From FG store some material is moved to samples storage location but that is not out of the plant premises. Client has demarcated an area called as samples stores within the manufacturing plant premises.

To excise authorities they declare that the material lying in the samples stores in duty paid material.

To indicate the same in the system the following is the process used:

1. Create an internal customer

2. Create Sales order in the name of that customer.

3. Outbound delivery, PGI, Billing document (statistical), outgoing excise invoice using J1IIN w.r.t. billing document to show it as a duty paid material.

Physically material moved from FG to Samples store may be of 10 kg, 50 kg etc. but there is no recording of any transaction in the system for this movement.

Then they will send to customer (actually it is not even a customer, it can be called as prospect) the samples as required which is usually of very small quantities 5 grams, 10 grams etc.and again there is no recording of any transaction in the SAP system as material is already shown as issued against internal SO.

We are in the process of revamping SAP System so with reference to the above process used I seek your opinion on the following points

1. Transfer posting using 311 movement to indicate stock transfer between storage locations within a plant. (Client is okay with this point)

2. Ideally the process should be create customer master, SO, Outbound delivery, PGI, Billing document and outgoing excise invoice every time the material leaves the premises of the plant.

But since the quantities of samples is very less and the number of transactions are huge, users are a little reluctant to create these many documents every time.

Is there any way to simplify the process in such a way that excise requirement is also mapped and inventory transactions IN and OUT is also mapped in the system in a much simpler way.

A little lengthy explanation but please advise.

Thanks and Regards,

Yagnesh.

[Lakshmipathi]

With one option what you have indicated, you can automate the entire process like creation of sale orders, delivery, billing and excise invoice by having batch job for each process with some required intervals depending upon the transfer posting happening.

The other option which you can consider is

• inward the stock via 101 (receipt)
• issue the stock via 261 (consumption)
• and for rejections, use 551

With the above activities, via MB5B, you can show to excise authorities the total receipt, issues and closing stock for a given material.

G. Lakshmipathi

[Former Member]

Hi Lakshmipathi,

Thank you very much for going through such a long description.

Yes automation is the most preferred solution in this case, but client may not accept that as it will involve a considerable technical effort.

We are thinking of using the following workaround but still it is under discussion with the client.

1. Continue generating a SO, PGI, Excise Invoice in the name of Internal customer only and move the FG stock which is required as samples in bulk quantities of 10 KG, 20 KG etc.

So excise part will be taken care of.

2. Create a non valuated materials with some prefix let's say S in addition to existing FG material code,

Book an other GR using 561 movement into Samples Store, with which inventory reports will show the samples stock. No finance impact for this movement.

3. Issue the Samples materials as an when required using 201 movement or may be a custom movement type if cost center has to be made optional in that case. In the text field of the GI document maintain customer name, so the OUT transaction will be taken care of and also creating a one time customer master also will not be required. No finance impact for this movement.

But now there is one concern here, will excise authorities have a problem in this setup, specially related to material master code.

I mean when FG is issued against internal SO there is one material code and when sample is issued we are using the same material code but with prefix as S.

What are your views on this.

Thanks and Regards,

Yagnesh.

[Lakshmipathi]

1. Ok
2. I still prefer 101 over 561 since as per Best Practice, only for initial stock upload, we use 561 movement type.  Of course, finance team of your client should take a call on this
3. As you said, when the users would be reluctant to generate mass documents, will they key in the data in text field each and every time?
4. Your client can get approval from excise authorities justifying for this proposal

G. Lakshmipathi