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Former Member

SETTLEMENT OF PROD ORDER

HI,

WHY WE NEED TO SETTLE THE PRODUCTION ORDER ? WHAT WE GET FROM THAT ?? IS IT NECESSARY ??

HOW WE SETTLE THE ORDER ??

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4 Answers

  • Posted on Jan 05, 2008 at 04:46 PM

    Hi,

    we use transaction ko88 or co88 for order settlement.

    pl. refer,

    http://www.sap-img.com/financial/what-is-production-order-settlement.htm

    Regards,

    Senthilkumar

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  • Posted on Jan 05, 2008 at 04:50 PM

    Dhiraj,

    Every order has Planned costs and because of some difference in the actuals there will be variance, this has to be settelled. If the order is not settelled, the order will have cost balance, and this will not allow the order to have CLSD or DLFL flag set.

    Individual orders can be settled using transaction KO88 and collectively using CO88.

    Regards,

    Prasobh

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  • author's profile photo Former Member
    Former Member
    Posted on Jan 06, 2008 at 11:12 AM

    simply it is settling the extra/less cost incurred in production.

    example

    Std cost of a product is 10 USD

    You start producing this material. At the edn of production let us say the cost is 11 USD.

    Now the extra 1 USD has to be settled to material or variance account/cost centre as the production order finally recibes the total cost = 0.

    that is raw material cost and activity cost is 11

    Product when we did GR cost booked is 10

    Difference 1 USD

    after the settle ment

    that is raw material cost and activity cost is 11

    Product when we did GR cost booked is 10

    Settlement account 1

    Difference 0 USD

    Now you can close the order

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  • author's profile photo Former Member
    Former Member
    Posted on Jan 06, 2008 at 05:24 PM

    Settlement is always necessary otherwise in FI account there will be mismatch between Debit and credit account.

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