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Former Member

WIP Calculation in SAP

Hello All,

When we are Calculating WIP in SAP i found two things

it is taking all the materail cost from the order for which the raw material has been issued but the stock from the orders were not delivered. I think that is correct since the Stock is still lying in the shop floor and SAP is calculating the WIP from that stock.

But i have a problem in Understanding that WIP calculated for a Specifical Month is not getting reversed on the first day of the next month, but it is getting reversed on the settlement of the Order after complete delivery only.

For Example:

One Production Order ZYX is Created In March 20th for getting the output Material 123

for that we issued raw material A, B,C with total value of 200 EUR on 31st of may we calculated the WIP and it showed the value of 200 EUR in WIP but on 1st of April it is not getting reversed.

next month i.e. April we issued raw material to Order say D,E,F with Total Value of 800 EUR this time WIP is calculated on 30th April for 800 EUR and showing in the GL without any reversal in May 1st.

On 15th of may the Production Order ZYX Had the GR of Material 123 and now at the settlement of Order on the 31st May it is showing the settlement Entry and the addition entry of WIP Reversal for 1000 EUR.

Now i want to know why is SAP not Reversing the entry for every month and why is it getting reversed at the Order Closing Time.

Is it the SAP Standard Process or Is it some thing that can be changed by Customization.

Best Regards.

Krishna Chandra

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  • author's profile photo Former Member
    Former Member
    Posted on Jun 12, 2011 at 06:02 PM

    Hi,

    so at the end of March WIP is 200 EUR and at the end of April it is 1000 EUR. The posting at the end of March posts the WIP change in March which is Zero at th 1st of March but 200 EUR at the end of march so the change is 200 EUR. In April the change is 800 EUR (200 EUR at 1st of April, 1000 EUR at the end of April) so this 800 EUR is posted.

    The total WIP at the end of April 1000 EUR (200 EUR from March, 800 EUR from April), everything ok.

    WIP is reversed if the order is finished (order status TECO or DLV). Thats how it works.

    BR Christian

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    • Former Member

      Hi Christian,

      In that case what happens if there is a partial GR for the order for EUR300 on 5th Of May, now the FG stock accounts will get an update of EUR300 and the final standing of the balance sheet on 5th of May will be as follows :-

      Balance sheet

      FG stock accounts : EUR300

      WIP Total : EUR1000

      Total BS stock value = EUR1300

      This is actually wrong because the total stock cannot be EUR1300 where EUR300 more than total WIP of EUR1000

      The right way is when a GR of 300 is happening the system should reverse a WIP value of 300 from the WIP total instead of waiting till the order changes status to DLV or TECO. Only then the BS stock total can be correct as follows :-

      Balance sheet

      FG stock accounts : EUR300

      WIP Total : EUR700

      So my question is why SAP is not reversing the value of the GR from the WIP total computed earlier?

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