Free Material Delivered by Vendor

[Former Member]

Hi

I have a situation regarding free goods that were delivered by vendor in excess to the amount ordered in PO. We had ordered 2000 units but 2700 were delivered. How to post the GR in this case without changing the PO. I know that one easy method is to change the PO and check the Free indicator after adding extra line item for the extra material but changing PO is not an option here. What are the alternates ?

Thanks

Sohaib

[Former Member · Accepted solution]

Hi Shoiab,

Another way of doing it is, you can GR 2000 qty of goods against PO. If you don't want to create another PO for 700 qty you can use movement type 511 as delivery free of charge for the rest 700 quantities.

Regards,

Atal

[former_member198492 · Accepted solution]

Agree with Atal

Use MB1C with mvt type 511 is correct choice

Regards

Darren

[raviraj_sharma]

Post the GR of 2000 against the PO.

for the remaining 700 , you have 2 options for Goods receipt without reference :

501 - GR Without Purchase order

511- GR of Free Material

In case of 501 movement Type - Stock will update MAP (Moving Average Price) but in 511 movement case Stock without any accounting document. I.e. means There will be no Accounting document generation.

Delivery Free of Charge

If you receive a free-of-charge delivery from a vendor without a PO having been issued beforehand, you post the free delivery as an other goods receipt. In the standard system, you specify a text and a vendor for each item. This control for the Text and Vendor fields can be changed depending on the movement type 511 in Customizing for Inventory Management and Physical Inventory under Settings for Enjoy Transactions u2192 Settings for Goods Movements (MIGO) u2192 Field Selection per MvT Type.

For Free Material, Price control plays a crucial role for Accounting entries.

1. If the material is valuated at moving average price, the stock figure is updated on a quantity basis only, not on a value basis. Thus the total stock quantity increases but the total value of the stock remains unchanged. This results in a reduction in the moving average price.

2. If the material is valuated at standard price, the stock figure is updated on a quantity and a value basis. The receipt is valuated on the basis of the standard price. The offsetting posting to the stock account posting is made to a revenue account for price differences.

[Former Member]

After testing I have seen that moving average price decreases whether you create a new PO with 'free' check or you MIGO with 511. Is there anyway in which Moving price does not change even the quantity of stock will increase in case of free delivery ?

Edited by: Sohaib on Sep 24, 2011 10:10 AM

[Former Member]

Hi,

Createa new plant to receive this free material and always receive free material in this plant

Thanks

Manoj

[Former Member]

Hi,

Why is that a material valuated at MAP is updated only on a quantity basis and a material valuated at SP is updated both on quantity and value basis? Can some one please explain?

Thanks.

Edited by: Arun Kumar_PS on Dec 9, 2011 6:31 PM

[former_member564225]

Hi
> I have a situation regarding free goods that were delivered by vendor in excess to the amount ordered in PO. We had ordered 2000 units but 2700 were delivered. How to post the GR in this case without changing the PO. I know that one easy method is to change the PO and check the Free indicator after adding extra line item for the extra material but changing PO is not an option here. What are the alternates ?
> 
> Thanks
> Sohaib

Sohaib,

If you had ordered 2000 qty say at 1 rupee each then you are paying 2000 rs to the vendor. But whe you receivet 2700 units and post GR, then your payables will raise to Rs. 2700 which is not true according to your Free Supply Concept. If you happen to receive 2700 units and pay only Rs. 2000 then you cannot set it in tolerance.

If you want to pay for 2700 units then you can set tolerance OR you have to make a saperate PO with free good indicator or change the PO.

Regards

Shiva

[Former Member]

Price of 2000 items is to be paid not for the extra 700. The purchase department is neither allowing to make a change in the original PO nor allowing to create a new PO for the free items. Is there any flexibility in MIGO to deal with such a case ? I hope you understand my problem more clearly now.

[Former Member]

Hi,

If you dont want to ammend the PO qty , you can assign an over delivery tolerance ( 35% for your case) at item level.This will allow you to excess GR.