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Former Member

Consignment Payable difference in Import Consignment Purchase Process

Hi All,

We have a requirement related to import consignment purchase process. In invoice settlement (MRKO) system should pick exchange rate from goods withdrawal document so that the consignment payable account is posted with same value with which it is posted during goods withdrawal.

Standard Process

Exchange Rate at the time of Goods withdrawal 1 USD = 60 INR

Accounting entry in local currency

Material Consumption - 60 INR Dr

Consignment Payable - 60 INR Cr

Exchange Rate at the time of settlement MRKO 1 USD = 65 INR

Accounting entry in local currency


Vendor Account - 65 INR Cr

Consignment Payable - 65 INR Dr

In standard process this difference has to be transferred manually & after that we can clear Consignment payable.

Requirement

Exchange Rate at the time of Goods withdrawal 1 USD = 60 INR

Accounting entry in local currency


Material Consumption - 60 INR Dr

Consignment Payable - 60 INR Cr

Exchange Rate at the time of settlement MRKO 1 USD = 65 INR

Accounting entry in local currency


Vendor Account - 60 INR Cr

Consignment Payable - 60 INR Dr

Please suggest how to achieve it.

Thanks in advance

Nitesh

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3 Answers

  • author's profile photo Former Member
    Former Member
    Posted on May 20, 2015 at 11:07 AM

    Hi,

    What i believe is this difference occurs as this is due to exchange rate difference and this cannot be overridden by the old value.

    The difference amount needs to be settlement to price difference account due to exchange rate so that this is handled correctly during financial closing by finance team.

    Kindly co-ordinate with your finance team and act accordingly.

    Rgds,

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  • Posted on May 20, 2015 at 11:11 AM

    Please read the OSS note 487162 - MRKO: Manual clearing of consignment liabilities account

    It explains the system design.

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  • author's profile photo Former Member
    Former Member
    Posted on May 20, 2015 at 12:40 PM

    Hi Mallinath / Dev,

    I agree with your point, I have already checked the note shared by you.

    Think from the business perspective, does it makes sense to have a difference in vendor liability when we are self processing goods withdrawal & self processing settlement for the same.

    I know its standard system design, but I am looking for enhancement to pull the exchange rate from withdrawal document, In that I am struggling to build a logic as in single settlement run system generates single invoice for multiple withdrawals which may refer to different posting date (different exchange rate).

    Do you have any idea how can we generate separate invoice for separate withdrawal in single settlement run ?

    The idea is If i am able to achieve this then I will pull the exchange rate from withdrawal documents.

    Need little more brain storming into this...

    Regards

    Nitesh

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