Order Settlement

[former_member218048]

We are in the 'product cost by Production Order' scenario.

We have lot of orders created and released every period.

Now we are in the process of making settlements in the period end. I know that at the time of settlement, WIP & varainces are posted in Finance.

Is it mandatory that we should have calculated the WIP & variances of the orders before executing the Order settlement ? Or at the time of order settlement, WIP & Variance will automatically posted eventhough it was not calculated through KKAX/KKS2 ?

Also advise me what are the status the Orders should have for (1) WIP Calculation (2) Variance Calculation (3) Order settlement.

[Former Member · Accepted solution]

Hi,

Please check below points , it may help.

The production prder status TECO is nothing but like labellling an order to be technically complete.. You can reverse the TECO status simply.. But closing means you are trying to finish off all the formalities with an order.. SO it needs balance of the order to be zero.. You cannot arrive at zero balance until you do full delivery....

So try to do that and settle the order..

To settle..

1. After Final Confirmation of Order ( Status : CNF) make GR for for order using Tcode : MIGO / MB31 so Production Order Status will be DLV.

2. Then complete the order technically by using Tcode : CO02--> Functions ( Menu)---> Restrict Processing -

---

> Technically Complete. You can carry out TECO for multiple Orders in Tcode : COHV (Mass Processing).

3.Now Calculate Overheads using Tcode : KGI2 - Individual Processing

CO43 - Collective Processing

4.Calculate WIP using Tcode : KKAX - Individual Processing

KKAO - Collective Processing

5.Calculate Variance by using Tcode : KKS2 - Individual Processing

KKS1 - Collective Processing

6.Finally do the settlement of Order in Tcode : KO88 - Individual Processing

CO88 - Collective Processing

Regards,

Ram

[former_member218048 · Accepted solution]

Please see my specific requirement : "Is it mandatory that we should have calculated the WIP & variances of the orders before executing the Order settlement ? Or at the time of order settlement, WIP & Variance will automatically posted eventhough it was not calculated through KKAX/KKS2 ?"

[former_member218048]

Thanks for all the inputs

[venkatasatyakrishna_achan]

hi

u need to calculate wip(kkax) and variance(kks2) and neet to settle it after calculation these are different steps.

production order status partially confirmed, confimed, partially delivered u can calculate wip, delivered and technically completed u can calculate variance

order settlement, is each time when u calculate wip and variance. but all these processes are mainly carried out as month end activities

krishna

[former_member218048]

Thanks for the input.

If I do not execute WIP and Variance calculation and try to settle Production order, what would be the effect ?

[Former Member]

hi

there might be a wrong price calculated and updated in material master

[venkatasatyakrishna_achan]

hi

when u try to settle nothing will get settled to to the receiver, settlement is nothing but, if u have wip or variance available in ur production order it has to be reported to FI. if u dont calculate anything only zero value will be settled

krishna

[Former Member]

hi

if u do not execute WIP and Variance Calculation that will adversely effect at COGM And also effect inventory and also cost product