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author's profile photo Former Member
Former Member

Free of charge Sub Contracted Material receipts

Hello expert i want your solution on below issue,

Issue:-

I send Raw Material to Sub contractor for printing activity. e.g 100 kg of RM on 541 Movement type to produce output 100 kg of printed RM,

but our standard practice, SC Vendor should charge for 93 kg and 7% is free of cost receipts.

In Our system, we receive 100 kg output to knock off 541 MT same time system, pass the following entry.

RM Consumption A/c 100 kg = Rs. 100000

Labour charges A/c 100 kg = Rs. 2000

SFG A/c 100 kg = Rs. 102000

To Stock of RM A/c 100 kg = Rs. 100000

To COGM A/c 100 kg = Rs 102000

To GR/IR Clearing A/c 100 kg = Rs. 2000

But when SC Vendor invoice receives, he charges for 93 kg only i.e Rs. 1860 (93 X 20) and following entry passes

GR/IR Clearing A/c Dr. 1860

To Vendor A/c 1860.

because of this GR/IR accounts not off set, in our organization Manual clearing is not acceptable.(MR11)

So, please suggest how we should post GR and IR, So the 541 should be cleared and 20 Units must be keep in stock with GR/ IR auto clearing

Thanks & Regards

Suhas Kale

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4 Answers

  • Posted on Aug 31, 2016 at 11:01 AM

    Why is the 7% discount not reflected in your PO?

    Isn't this the basis that causes all trouble?

    7% on the quantity is just nonsense, maybe a simplification to make some people understand, but technically and practical just useless.

    The vendor produced 100 kg, you got 100, and his bill is for a 100, even it has a reduced amount by 7%

    In short you pay 1860 for 100kg.

    And this can well be defined in the price conditions.

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  • Posted on Aug 31, 2016 at 01:16 PM

    Use price condition in PO to achieve your business requirement. you can have price discount condition on Qty basis at first place ...

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  • author's profile photo Former Member
    Former Member
    Posted on Aug 31, 2016 at 01:19 PM

    Hi Suhas,

    Create PO with 2 line item with 93 kg & 7 kg having same material. Line item having material 7 KG should have marked free of charge in subcon PO. Maintain component as usual for both line items & Save.

    Perform normal subcontracting process, you will get result as required.

    Regards,

    Arsh

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  • author's profile photo Former Member
    Former Member
    Posted on Sep 08, 2016 at 07:39 AM

    If query is resolved, please close the thread,

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