Valuated Sales order stock - Goods Receipt

[Former Member]

Greetings,

I am trying to better understand the concept of 'Valuated Sales order stock" and I read in the SAP documentation that:

"When you are using a valuated sales order stock, externally procured individual requirements materials are assigned to the sales order stock at the net order price at the time of the goods receipt"

But I find that in our SAP system, this is not the case. Externally procured materials are valued at whatever price they are costed in the sales order they are used.

I can have a PO whose net price is 5000 Euros for Material X but if that same Material X is costed at 8000 Euros in the Sales order to which is it used, the GR for Material X will be at 8000 Euros.

(the PO for Material X is assigned against the sales order).

Perhaps I am misunderstanding what is meant by "externally procured individual requirements materials"?

In the example above, material X is not the Finished Goods sold to customer through the Sales order. It is a component that is involved in the production of the FG.

It seems to me more logical that Material X value be based on the cost estimate computed in the sales order rather than on the PO Net price...

Thanks in advance for your valuable feedbacks!

Best regards,

Sylvain

[Former Member · Accepted solution]

Sounds like the price control for your material is "S" rather than "V". Which is a bit unusual (but not wrong) if it's a material that is externally purchased.

As for your argument that an externally procured material should better not be valued at net order price, I can't follow your argument.

If you buy a material for that sales order and you know when the material is received that the supplier will write you an invoice for 100 u20AC for this delivery, I think it makes sense to value that sales order stock at 100 and not at - say - 80 u20AC that were estimated when the sales order was priced. If you use the 80 to value the GR, you will have to put the difference of 20 elsewhere when the invoice arrrives. Now what yould be a good CO-object to charge those 20 u20AC to? Why not value at actual purchase price?

[Former Member · Accepted solution]

Hello Nikolas,

Thanks for your answer.

Yes, we value our inventory at Std.

(Is this why the GR is valued at Sales order cost estimate and not Net Price?. SAP does not mention this in its documentation)

I understand your point but my argument is based on the fact that if a purchased material (Material X in my example) is received into stock at the Net Price value, then, there will be a mismatch between

- the Cost Estimate of Material X in the Sales order (Material X will be valued at its Std there, based on our Costing variant)

and

- the value at which this Material X will be consumed in the Production process (since it will be at Net Price).

This would cause a Production variance to be recognized since the actual costs to produce the Finished good would be different from the Cost estimate of the Finished Good in the Sales order (and the cost estimate in the sales order determine the COGS of the Finished Goods in accounting).

The difference of 20 you mention is treated as a Purchase Price variance in our case. That PPV is assigned against the Sales order.

Best regards,

Sylvain

[Former Member · Accepted solution]

So it's just a choice between a production variance and a purchase variance. As long as the variance is assigned to the correct Sales order, the difference of the two methods is not that large. It's mainly about when the variance hits your P&L and thus the sales order.

[Former Member · Accepted solution]

Yes, this is correct.

It is either Prod variance or PPV.

But this does not explain why SAP says that GR is at PO Net price, as if no alternatives were possible...

Again, unless I am misunderstanding the point, this is not our model...

Thanks,

Sylvain

[Former Member · Accepted solution]

I think that SAP says this because there isn't much of a point in having a valuated stock by sales order if you are not going to put a different valuation on the same material for the different sales orders. With S-price for purchased goods, you could just as well have your stocks at plant level (and only assign price differences individually to sales orders in your scenario). So SAP takes it for granted that with valuated sales order stock you have price control V and thus materials will be valued at net price from PO when they enter the stock.

[ajaycwa1981 · Accepted solution]

Hi

I agree with Nikolas said... Usually externally procured mats are valuated at V,.. Hence, the SAP doc is based on that

However, the net result of the discussion is a choice between PPV or Prod variance

br, Ajay M

[Former Member · Accepted solution]

OK. Good to know.

Thanks,

Sylvain

[Former Member · Accepted solution]

ok. Thank you.

My company is valuating all components of finished goods at Std so we are not using V price but S price.

Best regards,

Sylvain

[sanjay_ram · Accepted solution]

Hi Nikolas,

It will be absurd for SAP to make a presumption as such because if Material ledger is activated all materials are normally maintained at Standard price. I think the SAP documentation must be corrected to reflect the true behaviour of the system under various circumstances.