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author's profile photo Warren Nash
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Warren Nash

USA Method for WIP in SAP

Posted on Mar 14, 2014 at 06:56 AM 16 Views

Dear All,

I have come across a situation where a business requirement in APAC is asking to post the raw material consumption and finished goods confirmation to balance sheet. Now I have to assume that this is the USA method. The issue we have is if we map this in OBYC then the production order has an error saying that it does not exist as a cost element.

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Also if we do use the BS for WIP (actually consumption & COGM) then how do we map this to the Cost Component in OKTZ?

Hoping some of the US SCN colleagues can assist here!!

Regards

Waza

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    author's profile photo Former Member
    Former Member
    Posted on Mar 14, 2014 at 08:17 AM
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    Hi Warren

    I dont think this approach is supported in SAP. However during month end closing, we normally recognise WIP as per the situation of the production orders and this has been quite acceptable practice for atleast the clients, I have been working with, in APAC region.

    We had a similar requirement in one of our clients in South Africa, however they too agreed that this requirement is dealt with during month end and this is the only option in SAP.

    I would be surprise if I hear any differing observation.

    Regards

    Mustafa

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  • author's profile photo Ajay Maheshwari
    Ajay Maheshwari
    Posted on Mar 14, 2014 at 09:03 AM
    1

    Hi Warren

    Your requirement says "RM Consumption and Activity Confirmation should post to Balance sheet" - Possible!!! But in SAP's own style

    Law cant dictate you that when you do MB1A - > It should post to Balance sheet.. SAP has a way of capturing the information, to produce an integrated view across functions like Logistics and Finance

    When you post consumption and confirmations - They are charged to P&L i.e. to an Internal order or Production order...

    Later on, when you settle the WIP - > WIP A/c is Debited (Balnce sheet) and Change in WIP is Credited (P&L account)... Net effect is what you want!!

    The change in WIP offsets the RM Consumption and Activity confirmation!!

    Br, Ajay M


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  • author's profile photo Warren Nash
    Warren Nash
    Posted on Mar 14, 2014 at 11:14 AM
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    Dear All,

    Thanks for the replies. And yes at EoM all is balanced. I just recall in a previous project in the US when I wasn't doing any CO-PC that they also wanted the backflush postings to be in the WIP account(s) too.

    It would be interesting to find out how GM, Honeywell and GE do all this in their SAP systems. Maybe userexits are used to DR the consumption/COGM and CR the WIP in Production. Then when we move the production stock to sales stock another userexit or posting program is done to reverse out this posting.

    Regards

    Waza

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