WIP Cancellation Needed During Goods Receipt

[Former Member]

Hi,

I noticed SAP cancels the WIP total only after the order status changes the DLV or TECO. If that is the case when the partial goods receipts are posted after the WIP postings to BS, the stock accounts will be double posted and this will be wrong.

For example :-

Production order debit costs = $1000

WIP calculated = $1000 and posted to Balance sheet

Partial goods receipt occurs for = $200

Now stock accounts in balance sheet will have a debit value of $200 in addition to the WIP amount of $1000 in the WIP accounts. Hence the total debit value of the balance sheet will be $1200 (200 + 1000) until the final goods receipt is posted so that the WIP is cancelled after the final goods receipt.

Hence the balance sheet debit values will be wrong till the final goods receipt is posted.

How can we correct this situation?

[Former Member]

Hi – check your settings in TC OKG3 and remember that some valueadjustments happends during your period-end closing (settlements).

BR

René V. Nielsen

[Former Member]

Hi Rene,

How this setting can help me to prevent the overstating of stock value as explained in my example? In my example the total stock value is reported wrongly because WIP total is 1000 and the FG total is 200. In actual fact the WIP Total should be reduced to 800 immediately after a partial GR for 200.

However the WIP total will remain at 1000 after the partial GR of 200 until the time i run the WIP re-calculation at month end. So the total stock value from the time i do the partial GR up until the WIP recalculation will be wrong.

[Former Member]

Hi, a lot of sub-modules in SAP are “out-of-sync” with the general ledger during the period.

For instance is Assets out of sync with the G/L as each country are having different rules. Once a month will the depreciations be posted to the G/L according the legal requirement of the country.

Most of these postings happens on-line (say an asset acquisition against a vendor) but some needs to be adjusted in order to activate and expense the individual assets in the (from a legal point-of-view) correct periods.

It’s the same in production … you need to analyse the settings of WIP for your orders “life”.

Reporting in SAP happens ”on periods” where certain steps need to be fulfilled! These steps are defined in your period-end procedure and it makes no sense to analyse costs or balances before the period-end procedures for the module has been completed.

From my perspective does it not make sense to say its absurd or not … it’s the concept of SAP whatever you like it or not.

I don’t think it’s possible to make a global system that is constantly “in balance and reconciled” because of the performance impact! Such a system would lag a hell.

BR

René V. Nielsen

[Former Member]

Fair enough Christian and Rene, however i don't think it will be a huge and complex task for a big company like SAP to devise a proper logic for this WIP re-calculation at the point of each gradual GR.

This would have been an accurate real-time valuation of WIP and i see there is no significant technical bottleneck present for SAP to program in that way.

When a GR is posted against a production order, they just have to adjust the WIP for that production order as well. It is just an additional accounting posting and system speed should not be hindered for just an additional accounting document.

I see this is a great mistake in SAP logic!

[Former Member]

Hi,

this does not happen automatically but is part of the period-end closing activities.

When WIP is calculated for your partly delivered order and the order is settled the remaining WIP is 800.

BR Christian

[Former Member]

Hi,

So you mean that between the time period of partial GR and until settlement is executed the balance sheet will be reported wrongly as $1200 ($1000 WIP total + $200 partial GR)?

Don't you think this is absurd because the total stock value (WIP + FG) is overstated?

[Former Member]

HI,

a balance sheet (and a P&L statement as well) is only correct for a given period and AFTER all the month-end closing activities and that is not specific to WIP..

Thats how it is designed...

BR Christian