Tips to remember Accounting Entries related to P2P Cycle by Ganesh Padala


Dear Friends,

Thanks for your strong support. As per many of your requests, I made video on Accounting Entries related to P2P Cycle.

I hope it will be helpful for you. Watch and Share with your SAP Circle.

Best Regards,

Ganesh

If the material Price is 100 INR per 1EA and the Quantity is 10 EA. And, the Freight amount is 200 INR. Then what are accounting entries during Goods Receipt?


The Correct Answer is Option 2

Stock Account (BSX) – 1200 Debit (+Ve)

GR/IR Clearing Account (WRX) – 1000 Credit (-Ve)

Freight Clearing Account (FR1) – 200 Credit (-Ve)

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What is the Transaction Key and Account grouping for the Credit (-Ve) Account Entry during Initial Entry of stock posting with 561 Movement in SAP MM?


The correct Answer is GBB-BSA. You can find supported screen shot below.

Thanks and Best Regards,

Ganesh Padala

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SAP MM Consignment Procurement Process


Hi Friends,

I provided the Consignment procurement process in this document

Vendor Consignment is a process wherein the supplier provides materials and stocks them in the purchaser’s premises. The material remains in the books of the supplier (vendor) until the same is withdrawn from the stock of the consignment and put to use. The inventory gets transferred to the books of the purchaser only when the same is removed from the consignment stock. The supplier (vendor) would not invoice the purchaser initially when they come into the premises of the purchaser. The purchaser is liable to pay the supplier (Vendor) only when the stock is withdrawn (consumed).

Prerequisites:

  1.  Special Procurement type Consignment has to be given in Material Master (Optional)
  2. Create Consignment Info Record –Mandatory
  3. Maintain OBYC settings for Transaction Key KON –Consignment Accounts Payable
  4. Maintain Output Condition Records for Output type KONS with Transaction Code MRM1

 Process Steps:

  1. Create Purchase Order with Item Category K– Consignment- T Code ME21N
  2. Goods Receipt against Consignment Purchase Order,Mvt Type 101 K – No accounting Entries – T Code MIGO-Goods Receipt
  3. Transfer the Consignment Stock to Own stock- Transfer Posting –411 KT Code MIGO-Transfer Posting

Accounting Entries:

Here Debit means +Ve and Credit means -Ve.

Consignment Payable – KON – Credit

Stock – BSX – Debit

  1. Invoice Settlement – MRKO

Accounting Entries:

Consignment Payable(KON) – Debit

Vendor Account – Credit

  1. Payment F110 or any other payment transaction

Accounting Entries:

Bank Account – Credit

Vendor Account – Debit

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Goods Issue for Scrapping in SAP MM


Hi Friends,

In this video, I have explained the process of generating scrap in SAP Inventory Management. I hope it will be helpful for you.

Learn and share with friends.

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Regards,

Ganesh

ganesh.sap2015@gmail.com

What are the accounting entries for Free Goods receipt?


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Answer: After clicking ‘F’ (Free Goods Indicator)  in purchase order , the net price of the item  will become Zero and the condition tab will be disappeared. Finally when we do the Goods Receipt, accounting entries won’t be generated.

If the material has price control as Moving Average Price (V), no accounting entries. But if the material has price control as Standard Price (S), the accounting entries will be as shown below.

Inventory Account – BSX – Debit (+)

Price Difference Account – PRD – Credit (-)

 

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Ganesh

 

Subcontracting Process in SAP MM


Hi Friends,

I have provided brief details about Subcontracting process as per my experience. Make it useful. What is subcontracting process? Subcontracting is one of the procurement processes available in MM. In this process, components are shared to vendor to get the final product. Below are the steps involved in this process. Steps to perform subcontracting:

  1. Create subcontracting Info record (Optional) – T Code – ME11
  2. Create subcontracting PO with item category L – T Code – ME21N                                         Steps:  ME21N —>  Enter Item Category L –>, Material (End Product), PO Quantity, Delivery Date, Net Price, Plant  –> Click on Item Details –> Tab Material Data  — >Components, select Explode BOM –> Click on Components button –>  Enter the sub components –> Go back & Save.                                                                                                                                                                                                                                                            Note: Components can be exploded through BOM (T Code CS01) or components can be given manually also.
  3. Create Transfer Posting with Movement Type 541 to issue the sub components to the vendor T Code -ME2O/ MIGO
  4.  Goods Receipt for finished product – T Code -MIGO                                                                                                                                                                                                                                       Note: During goods receipt, final product will be received with movement type 101 and components will be consumed automatically with 543 movement type
  5. Invoice Receipt for the services performed – T Code – MIRO

Accounting entries for subcontracting: Example: Components cost is 100 INR, Subcontracting Charges are 40 INR

There will be no account entries at transfer posting 541.

Accounting entries at the time of Goods Receipt 101 (&543) : Finished goods will be received with 101 and the Components will be consumed with Movement type 543. 

Here Dr means Debit (+Ve) and Cr means Credit (-Ve)

(BSX) Stock A/c of Assembly – 140 Dr

(BSV) Change in Subcontracting Stock -140 Cr

(FRL) Subcontracting Charges – 40 Dr

(WRX) GR/IR Clearing A/c – 40 Cr

(BSX) Stock A/c of Components – 100 Cr

(GBB-VBO) Consumption A/c of Components – 100 Dr

Regards,

Ganesh

 

 

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