COGS Vs Local Sale

[Former Member]

Hi All,

While checkin a few delivery documents and their corresponding invoices, i am having a few doubts in the JE passed by the system.

Delivery:

Cogs---> 668043 Dr

To FG----> 668043

A/R

customer--> 753120 Dr

To Vat Payable---> 14767

To Local Sale----> 738353

Just wanted to know, why there is this difference between COGS and Local sale. I know COGS entry is based on the item cost, wanted to know how the system takes the calculation of local sale because when i compare the value of COGS from 01-04-09 to 31-03-10 with that of local sale, there a huge difference. Please assist to clarify the doubt.

Thanks,

Joseph

[Former Member · Accepted solution]

Hi,

Lets assume an Item 'I001' with an Item Cost of Rs. 100/- and you do the delivery for the Item at Rs. 120/-.

Following will be the Jourmal Posting after Delivery:

Cogs---> 100 Dr

Inventory Account----> 100 Cr

Now you do the Invoice the customer based on the Delivery,

Following will be the Jourmal Posting after Invoice:

Customer---> 120 Dr

Revenue Account----> 120 Cr

Now when you compare the COGS account with the revenue account, there is a differnce of Rs. 20/- which is the Profit in the Sales.

Hope this clarifies you.

[Former Member · Accepted solution]

Hi Sri,

So, this means that if I run the GL report of local sale and cogs, the difference of these would give me the profit?? I wanted to clarify this because the accounts department wants to match the COGS with the local sale account which is not possible i guess.

Thanks,

Joseph

[Former Member · Accepted solution]

Hi Joseph,

Please ask you accounts department to browse through the following link of SAP that explains the various account postings posted by SAP due to Marketing documents and your accounts team will be able to understand this. Also take your finance consultant to explain the concepts of SAP B1 to the client

[http://help.sap.com/saphelp_sbo2007b/helpdata/en/27/9700ec7367444cbda17ca38c3b3f81/content.htm]

[Former Member]

Thanks Guys.

Joseph

[Former Member]

Hi Joseph..........

COGS account is nothing but your purchase account which hits after the delivery of a perticular Item. On the basis of this COGS account your sales account will be calaculated which gives you the profit or loss as per sale.

Ex. If Purchase of A is 10/-

Then Item cost of A will be 10/-

Now if the same you are selling at cost 12/-

then delivery JE will be 10/- credit of stock to the COGS

and invoice will be 12/- Sales

This way you get the P&L 2/-

Regards,

Rahul