Profit Booking in inter-plant

[Former Member]

We have scenario where one plant manufatures and supplies mat to other plant. Our client requirement is that they would like capture the profit for manufature plant.

How this can addressed in SAP?

[Former Member]

answered

[Former Member]

There are various ways in which to do this.

If the plants are in different company codes, it is simple, because you will have full sales and purchase invoice functionality.

For transfers in the same company code, you can activate profit centre transfer pricing, which is a more formal, complete solution.

Alternatively, you just need to make sure that the SCE/material price in the destination plant includes the "profit" margin. This approach however will lead to unrealised profits being booked, which then needs to be eliminated.

[Former Member]

Hi Piet,

Thanks for the quick reply.

In our scenarion the company code is only one. The sale is happening between 2 plants. If the margin is included in the materail then how the profit is captured?

What SCE?

How the unrealized profit to be eliminated?

Could u also through some light on Profit center transfer pricing?

[Former Member]

Hi,

The process is Inter company sales.

For ex: Plant A produce material & sale the material to customer of Plant B.

The invoice will be generated from Plant B to customer & Plant A to PlantB.

In this case say plant A produce material COGM is 80. COGS in plant A is 100.But plant B invoice to customer is 120.Your requirement is now the profit should share to Plant A.

For this sceneario,you can check the KE24 transaction for the company sales to customet of Plant A

& Intercomapny sales of Plant A to Plant B.

Make the difference between this two sales,direct sales & intercompan sales.

Now make the difference of COGS & Gross sale price.Post the difference to Plant A.

This is manual.

But you can do this by ABAP development & make the job background job schedule daily to post like this.

Regards,

Raj