scrap sale

[Former Member]

Dear Gurus,

I need Scrap sale order entair process and T-Codes. How to configure pricing procedure for that.

Regards

Eswar

[Former Member]

Hi,

<b>Scrap Sales:</b>

In a manufacturing industry say for example machine components are manufatured from steel bars. So during machining / turning of the raw material turning scrap is generated in the form of <b>"chips"</b>. Again you will have scrap for stationary which is used, then scrap in the form of <b>"used coolant oil"</b>, <b>"cotton waste"</b>, <b>"defective packing material"</b>, etc.

The scrap also generates revenue as it is saleable in the scrap market. When we sell the scrap it is called as scrap sales.

<b>Role of scrap sales in SD:</b>

The scrap material is not considered as finished goods but for creating the master data for scrap material you can use the material type as <b>"FERT"</b> But do not select the <b>MRP</b> for this material. For accounting purposes to differentiatethe scrap sale from normal sale you can create a new "material account assignment group" which you will select in <b>Sales:Sales Org.2</b> screen. As and when a sufficient quantity is generated then the management can decide to sell it. A <b>sales order</b> is generated, <b>delivery + PGI</b> and then <b>invoice</b> and <b>excise invoice</b> if the scrap material is excisable. The scrap sale process will be basic only

Sales order - Delivery+PGI - Invoice - Excise invoice(if scrap material is also excisable)

<b>Configuration & settings:</b>

<b>Material type</b> - It should be <b>FERT</b> only with no <b>MRP</b> settings, no quality, no forecasting. Accounting & Costing will be there as well as plant stock. The scrap sale generates revenue for the organization.

You can create separate sales document type for scrap sales say "ZSCR" in VOV8. Create a new document pricing procedure using t.code "OVKI" for scrap DPP and assign it to the document type "ZSCR" using t.code "OVKJ".

<b>Pricing</b> - The pricing procedure will be the same except for scrap sales you have an extra condition type for <b>"TCS - tax deducted at source"</b>. The rate of this is may be <b>"1.133%"</b>

So in your pricing procedure you will have to include an extra condition type say for eg:<b>ZTCS</b>. So you create a new pricing procedure in which everything will be same and add a condition type "ZTCS" mark it mandatory. Maintain the condition record in VL11 for ZTCS. Then in OVKK use the new DPP to determine the pricing procedure.

Now whenever you create the sales order using the document type "ZSCR" the system willcarry out scrp pricing automatically.

Rest everything is the same.

Reward points if solution helps.

Regards,

Allabaqsh G.Patil.

Message was edited by:

allabaqsh patil

[Former Member]

HI Eshwar

Scrap Sales:

In a manufacturing industry say for example machine components are manufatured from steel bars. So during machining / turning of the raw material turning scrap is generated in the form of "chips". Again you will have scrap for stationary which is used, then scrap in the form of "used coolant oil", "cotton waste", "defective packing material", etc.

The scrap also generates revenue as it is saleable in the scrap market. When we sell the scrap it is called as scrap sales.

Role of scrap sales in SD:

The scrap material is also considered as finished goods with no MRP. As and when a suficient qty is generated then the management can decide to sell it. A sales order is generated, delivery + PGI and then invoice and excise invoice if the scrap material is excisable.

Configuration & settings:

Material type - It should be FERT only with no MRP settings, no quality, no forecasting. Accounting & Costing will be there as well as plant stock.

Pricing - The pricing procedure will be the same except for scrap sales you have an extra condition type for "TCS - tax deducted at source". The rate of this is may be "1.133%"

So in your pricing procedure you will have to include an extra condition type say for eg:ZTCS.

Role of scrap sale in SD - The scrap sales is treated in SD in a similar way as we treat normal sales.i.e Sale order -- Delivery PGI Invoice --accounting. But , the sales area for scrap sales should be different.

3. Configuration - For this the Division is defined for Scrap sales and assigned accordingly. (refer set up sales area -- OVXG). Separate Sales Order type + Delivery + Billing is defined. The scrap material master is defined by assigning the division to the materials.Revenue account determination is set up for scrap sales G/L accounts.( VKOA).Customer master to be created for Scrap sales area.All other SD relevant seetings to be maintained. But the transaction process to be followed as per normal SD process.

Reward if useful to u

narendran vajravelu

Message was edited by:

narendran vajravelu

[Former Member]

There is no particular tcodes for scrap sales.

pricing procedure same as normal process

[Former Member]

Dear Guru,

my query is it requires invoice generation or not. If we generate invoice what could be treatment in sales. kindly clarify pls.

Reg

Eswar

[Lakshmipathi]

Hi Eshwar

You should create an invoice for scrap sales. But before creating the sale order, you have to do the following:-

1) Create a dummy part number say Aluminium scrap, Oil Barrel scrap etc

2) Assign the item category as TAX

Once you generate invoice, accounting document will be generated where the value will be debited to customer account and ED and CESS will be credited.

Thanks

G. Lakshmipathi