Scrap Sales

[rahul_mirashi2]

Hi Friends

Is there any difference in normal sales & Scrap sales...if Yes please revert me.

Regards

Rahul

[Former Member · Accepted solution]

Hi Rahul,

Scrap sales is processed the same way as normal sales process.

Create a scrap sales order,

Followed by Scrap delivery,

PGI for the scrap material

Proforma or F2 Invoice.

In case of excisable material, you also have to create a excise invoice through J1IS transaction.

also check this post

https://www.sdn.sap.com/irj/sdn/forums

Please note that if you have defined in PP Module as SCRAP then it is out of SAP system and you cannot sell this.

In order to Sell the scrapo you have define scrap as a BYPRODUCT and give a material number and the sell it as you sell anormal materail in SAP.

The scrap material is considered as finished goods with no MRP. As and when a suficient qty is generated then the management can decide to sell it. A sales order is generated, delivery + PGI and then invoice and excise invoice if the scrap material is excisable.

Configuration & settings:

Material type - It should be FERT only with no MRP settings, no quality, no forecasting. Accounting & Costing will be there as well as plant stock.

Pricing - The pricing procedure will be the same except for scrap sales you have an extra condition type for tax deducted at source. So a separate pricing procedure is required.

You can maintain the standard OR-LF-F2 process itself.

Only thing is that Picking is not relevant for scrap process and hence, in 0vlp, just copy Item Category TAN and remove the tick from "Relevant for picking".

Also you should have seperate pricing procedure and maintain "Tax Collected at Source @ 1.1% and 3% on 1.1% towards Ed.Cess. If the vendor / buyer to whom you is a small vendor / buyer and they are not paying TDS, you can deduct @ 1.30% instead of 1.1% and bill accordingly.

Last but not least, I have briefed about Indian scenario. If you are asking for other countries, sorry I am not sure about that.

SALE OF SCRAP

The sale of scrap (non-stock) shall be mapped as a direct manual FI entry. The customer will be created as a FI customer. No Logistics module will be involved in the process.

A FI Invoice will be prepared for the sale of scrap with the following entries:

Customer Dr

Sale of Scrap Cr

Excise Duty Payable Cr

Please Reward If Really Helpful,

Thanks and Regards,

Sateesh.Kandula

[Former Member]

Hi Rahul !

Rajesh and Venkata have given you the required information for scrap sales. Just a point to add...

Under the govt tax rules the component of TCS and the ECess,HECess on TCS should be rounded off to the next higher rupee, incase it has a fractional part.

Regards,

Shamik.

[Former Member]

Hi Rahul,

The main diffrence between Scrap Sale and normal sale is, there will be no excise duties for scrap sale, instead tax collected at scorce (TCS) is collected from customer. So there is different pricing procedures for both. One with excise and one without excise with additional duties of TCS and ECESS. Apart from this all other conditions remain same as normal sales.

regards

prasad

[Lakshmipathi]

Dear Rahul

The main differences between normal sale and scrap sales are

- only when the scrap materials are generated, you will be generating a scrap sale order for the weight accumulated

- seperate pricing procedure for scrap sale with TCS as one of the condition type

thanks

G. Lakshmipathi

[Former Member]

Pricing Procedure

In SD, Pricing Procedure is determined based on Sales Area (Sales Organization + Distribution Centre + Division) + Customer Pricing Procedure + Document Pricing Procedure. Sales Area is determined in Sales Order Header Level. Customer Pricing Procedure is determined from Customer Master. Document Pricing Procedure is determined from Sales Document Type / Billing Type (if configured). Once the pricing procedure is determined, Condition records are fetched. If appropriate condition records are found, the price is determined. If Mandatory pricing condition is missing, system will through an error message.

In SD, the steps to configure Pricing procedure are as under:

Step 1:

Condition table: If existing condition table meets the requirement, we need not create a new condition table. Considering the requirement for new condition table, the configuration will be done in spro as follows: IMG --> Sales & Distribution --> Basic Function --> Pricing Control --> Condition Table (select the required fields combination, which will store condition record).

Step 2:

Access Sequence: If existing access sequence meets the requirement, we need not create a new access sequence. Considering the requirement for new sequence, the configuration will be done in spro as follows: IMG --> Sales & Distribution --> Basic Function --> Pricing Control --> Access Sequence (Access sequence is made up of Accesses (Tables) & the order of priority in which it is to be accessed. Here we assign the condition table to access sequence.

Step 3:

Condition Type: If existing condition type meets the requirement, we need not create a new condition type. Considering the requirement for new condition type, the configuration will be done in spro as follows: IMG --> Sales & Distribution --> Basic Function --> Pricing Control --> Condition Type. It is always recommended to copy an existing similar condition type & make the neccessary changes. Here we assign Access sequence to Condition type. Ensure to create a TCS i.e Tax Collected at source Condition Type, as a copy of discount & surchage condition tpe & place it as the last Condtion in Pricing Procedure, which requires to collected from the vendor & paid to Government (in Indian Scenario)

Step 4:

a. Pricing Procedure: It is recommended to copy a similar pricing procedure & make the neccesary changes in new pricing procedure. Pricing Procedure is a set of condition type & arranged in the sequence in which it has to perform the calculation. Considering the requirement for new Pricing Procedure, the configuration will be done in spro as follows: IMG --> Sales & Distribution --> Basic Function --> Pricing Control --> Pricing Procedure --> Maintain Pricing Procedure.

b. Pricing Procedure: After maintaining the pricing procedure the next step will be determination of pricing procedure. Configuration for determining pricing procedure in SPRO is as follows: IMG --> Sales & Distribution --> Basic Function --> Pricing Control --> Pricing Procedure --> Determine Pricing Procedure.

5. Condition record: Condition record is a master data, which is required to be maintained by Core team / person responsible from the client. During new implementation, the condition records can be uploaded using tools like SCAT, LSMW, etc.

Scrap Sales Order Cycle:-

Step 1: Sales Document Type

IMG > Sales and Distribution > Sales > Sales Documents >

Sales Document Header:

1. Sales Document Type:The sales document types represent the different business transactions, such as Inquiry, Quotation, Sales Order, etc. To create new sales order type, always copy as with reference to similar sales order. If possible use standard sales order.

2. Define Number Ranges For Sales Documents: Maintain number range with discussion with core team.

3. Assign Sales Area To Sales Document Types:

A. Combine sales organizations / Combine distribution channels / Combine divisions: Ensure to maintain these, else Sales Order creation will give error.

B. Assign sales order types permitted for sales areas: Assign only required Sales Order Types to required Sales Area. This will minimize selection of Sales Order Type as per sales area.

Sales Document Item:

1. Define Item Categories: If possible use Standard Item Category. Incase if required to create new, copy as from standard & maintain New.

2. Assign Item Categories: If possible, use standard. Formula for deriving item category: Sales Document Type + Item Category Group + Usage + Higher Level Item Category = Item Category

Schedule Line:

1. Define Schedule Line Categories: If possible use Standard Schedule Lines. Incase if required to create new, copy as from standard & maintain New.

2. Assign Schedule Line Categories: If possible, use standard. Formula for deriving Schedule Line: Item Category + MRP Type / No MRP Type.

Step 2:

IMG > Logistic Execution > Shipping > Deliveries >

1. Define Delivery Types: If possible use Standard Delivery Type. Incase if required to create new, copy as from standard & maintain New.

2. Define Item Categories for Deliveries: If possible use Standard Item Categories for Delivery Type. Incase if required to create new, copy as from standard & maintain New.

3. Define Number Ranges for Deliveries: Ensure to maintain number range.

Step 3:

IMG > Sales and Distribution > Billing >

1. Define Billing Types: If possible use Standard Billing Type. Incase if required to create new, copy as from standard & maintain New.

2. Define Number Range For Billing Documents: Ensure to maintain number range.

3. Maintain Copying Control For Billing Documents: Maintain relevant copy controls such as Sales Order to Billing, Deliver to Billing, etc.

Stock for Scrap Sale:

There are 2 options -

1. Scrap material can be identified as regular material at the point of sale. If yes, then we can use the same material in Sales Order.

2. Scrap material cannot be identified as regular material at the point of sale. For Eg: A Automotive seat manufacturing company purchases different grades of foam, but has a single scrap yard for foams. Now at the point of sale it may not be possible to differentiate. But we require a material & stock to sell scrap. We can create a dummy material say 'scrapfoam' & as concerned for stock, we can generate stock as per requirement through T.Code: MB1A, using movement type 502.

Regards,

Rajesh Banka

[rahul_mirashi2]

Hi Sateesh

I got the idea that what are the accounting entries generated but i want to know that...

1. What is meant by direct manual FI Entry

2. Customer is created only for FI and no sales area tab is created. Correct?

3. No Logistics module is involved means? No SD Process or what?

Regards

Rahul

[Former Member]

Hi Rahul,

A FI Invoice will be prepared for the sale of scrap with the following entries:

Customer Dr

Sale of Scrap Cr

Excise Duty Payable Cr

Thanks and Regards,

Sateesh.Kandula

[Former Member]

Hello Rahul,

Material type for Scrap:

You sell the scrap & it generates revenue for the organization. So you can use FERT for creating the scrap material. But you can create a new one also but the assignment will have to be done accordingly for FI-MM integration for respective G/L accounts.

No MRP is required for this. The scrap keeps on generating & you can store it in a separate storage location in the plant. As & when it is decided to sell the scrap, create a sales order & complete the cycle.

Pricing:

The normal pricing procedure which you use to sell the finished products can be used for selling scrap. Only thing extra in scrap sales is an additional condition type for "TDS (tax deducted at source). Normally the rate for this condition type will be "1.133%". You can create a condition type say "ZTDS" for scrap sale with

condition class: "A"

calculation type: "A"

condition category: "D"

Assign a suitable acces sequence to the condition type & maintain the condition record using VK11.

Whenever you creat a sales order the extra condition type will be determined & rest cycle will be the same.

Excise invoice will also be generated if the scrap material is excisable. For this you have to maintain the relevant chapter ID for the scrap material.

With best regards,

Allabaqsh G. Patil

[rahul_mirashi2]

Hi Satish

The sale of scrap (non-stock) shall be mapped as a direct manual FI entry. The customer will be created as a FI customer. No Logistics module will be involved in the process.

I cant get the above sentenses...can you give me the brief...

Regards

Rahul

[Former Member]

There is no difference between normal and scrap sales;

Difference will be ur scrap materials which u want to sale which are existing in the plant.How to move it into the market;

so some discounts,price variation will be der;

sales cycle vl b the same.

Reward points if useful

[Former Member]

Hi Rahul,

I would like to tell you with reference to the scrap sales process in our implementation.

Unlike normal sales, scrap sales will not start directly from Sales Order creation.

In scrap sales a contract will be created with the party who is supposed to purchase scrap from us.

This contract will be a rate contract with infinite quantity & a fixed rate per unit of measurement. (eg Rs.200 / KG)

During actual sales the quantity to be sold will be actually measured & entered in sales order, whereas the rate will flow from contract created, required that the order is created with reference to the contract.

Rest of the process from sales order to invoice will be same.

You can use standard contract type 'CQ' for this purpose

This should solve your query.

Regards

Dhananjay