Accounting
Entries Effect in Procurement Cycle Concepts- SAP MM&FI:
As we studied in previous post regarding
accounting determination, here we are discussing how the accounting
determination is going to work based on the settings you done and which are all
the GL accounts its getting hitting based on which scenario and why is the
reason behind that.
Concept:
We have N
number of activities in procurement cycle and one of the main thing is
Inventory and to know the spend, goods inbound and outbound will take place in
plant, we need to depend on reports in SAP and even the reports we will be
taken on -which accounting entry for which type of movement or else goods
inside and outside will be calculated full based on accounting entries.
While we are
defining account determination, we have something called modifiers, many things
were surrounded to modifiers.
Each entry
in procurement where stock and price are involving then automatically
accounting entries will come into picture.
We are doing
many activities in Inventory by ordering stock from vendor, Normal order from
vendor, Consumables, Subcontracting, Pipeline, Consignment, Physical Inventory,
Stock movements like STO/Inter and Intra, return PO, service PO.
Here we will
study which accounting entry will affect on what scenario and the reason.
1.Standard
PO Order-
This is the
normal order where we use to procure from vendor and vendor mainly materials
like Raw-materials and finished goods, which are physically used for production
purpose.
Once the
vendor delivers the goods to plant, based on invoice we need to make a payment
to the vendor and APAY will release the payment – Here from which GL account
the payment should release.
Because we
cannot use some other GL account for these types of materials, as per the
company its already predefined in OBYC like which GL account should hit for
which type of orders-----these settings are predefined by SAP.
While paying
amount to the vendor few accounts will hit automatically with the help of transaction
event key.
If anything
like stock is getting crediting to plant or withdrawal of stock from plant will
reduce or increase the quantity, in those cases BSX will hit automatically.
And for
clearing the invoice always WRX will hit and from this vendor account will get
paid automatically.
Accounting
Entries:
Inventory
Posting- BSX +
Clearing
GR/IR entry- WRX –
Here we have
1 more scenario, where material master price is coming into picture and it is
Standard price and moving average price.
Standard
price- S
Moving
price- V
For every
material we have price indicator and S means standard price- Where price will
not fluctuate normally.
For material
with moving average price then price may change as per the market.
Accounting
entries for moving average price is same as explained above like BSX and WRX.
(!)Moving
price in Material master: for moving price if we are doing MIGO/MIRO and payment to the vendor
then one more accounting entry will come into picture that is PRD.
Inventory
Posting- BSX +
Clearing
GR/IR entry- WRX –
Price
difference account- PRD –
2.Indirect
PO/Service PO:
As above if
we have material then with the help of valuation class and account category
reference the GL account will hit, and accounting entries will be displayed
while payment.
In indirect
PO, there will be no material and there is no Material master/valuation class,
so in this case how the accounting entries will be recorded.
Note:
Indirect PO’s are always consumable materials and services and for now just
consider as Consumable material.
Now we need
to maintain GL account in OBYC and without valuation class and here is the procedure
for that.
Accounting
Entries:
In this
case accounting entries will be KBS and WRX
But when you
see in OBYC- KBS, there are no GL accounts in that modifier.
But when you
enter material in PO, based on the account assignment the direct effect will be
on VBR and we can see these settings in _____
Here it’s an
SAP recommended setting, where it explains which account assignment should hit
which modifier.
Now in this
case, VBR is an account modifier but for consumption it’s showing KBS and WRX,
but the GL account will be taken from VBR modifier and in that search for blank
valuation class GL account.
3.Sub-Contracting:
We all know
the sub-contracting process and in these many scenarios, but accounting entries
will be same for financial point of view.
( ! )
Stock transfer to vendor
(!!)
Scrap
(!!!)
Buying components and service from vendor
(!!!!)
Vendor to Sc. vendor
We have
above 4 scenarios and process are different, but payment is same we need to pay
to vendor finally and accounting entries will be same.
Here main
activity we are doing is transferring stock to vendor and vendor is consuming
that and providing full finale material to us, so let’s think what type of
inventory effects are involving.
While stock
transfer the inventory stock will get reduce
Vendor will
consume and prepare final material, so service payment should be done.
Accounting
Entries: BSX,
WRX, FRL, BSV
BSX- the
stock we are transferring to vendor, so stock will get reduced
WRX- we need
to pay to vendor
FRL- Service
done by vendor like manufacturing or something fittings
(!!)
Scrap ----------!
(!!!)
Buying components and service from vendor--! BSX,
WRX, FRL and BSV
(!!!!) Vendor
to Sc. vendor ----------!
4.Consignment:
Here we use
to procure from vendor as bulk quantity and once it’s received, we ill place in
vendor consignment stock- Non billable for company.
Once we
shift from consignment stock to own stock then we should do MRKO- Billing to
the vendor for payment.
Biased on
the usage, it may be 10% or 50%- we will do invoice (MRKO) for the used
quantity.
Accounting
entries hit will place in – KON and BSX
5.STO
(Intra):
For STO,
where stock will transfer from plant to plant and here, we have two scenarios.
Within
company code
Between two
different company codes
Within
company code:
Within the
company codes, there will be no billing takes place whereas plants are within
same company code, where we can exchange the stock as per the requirements.
But whereas
two different company codes, the billing will take place and billing will be
done by SD consultant.
6.Physical
Inventory:
In every
company there will be physical inventory and stock will be verified and make it
corrected if there is plus or minus.
Accounting
entries takes place are: BSX and INV with modifier GBB
