SAP FAQ

Accounting Entries for MM, FI related

What should be my accounting entry in procurement?

For Domestic Procurement of Raw Material

During GR

Material Stock Dr.

GR/IR clearing Cr.

During Excise Invoice Credit

Cenvat Account Dr.

Cenvat Clearing Cr.

During Invoice Verification

Cenvat Clearing Dr.

GR/IR Clearing Dr.

Vendor Payable Cr.

For Domestic procurement of Capital Goods

During GR

Material Stock Dr.

GR/IR clearing Cr.

During Excise Invoice Credit

Cenvat Account Dr. (50%)

Cenvat On-hold Dr. (50%)

Cenvat Clearing Cr.

During Invoice Verification

Cenvat Clearing Dr.

GR/IR Clearing Dr.

Vendor Payable Cr

Subsequent of Capital Goods

Cenvat Account Dr. (50%)

Cenvat On-hold Cr. (50%)

For Import Procurement of Raw Material

During Customs Duty Clearing invoice

Custom Clearing Dr.

Custom Payable Cr.

During GR

Material Stock Dr.

GR/IR clearing Cr.

During Excise Invoice Credit

Cenvat Account Dr.

Custom Clearing Cr.

During Invoice Verification

GR/IR Clearing Dr.

Vendor Payable Cr.

For Excise Duty Credit of Raw Material without PO

Cenvat Account Dr.

Cenvat Clearing Cr.

For Excise Duty Reversal through Excise JV

Cenvat Clearing Dr.

Cenvat Account Cr.

What should be my accounting entry when the goods are issued through MM and excise invoice is created (J1IS & J1IV)?

During Excise Invoice Creation

Cenvat Suspense Account Dr.

Cenvat payable Cr.

For TR6C Challan

PLA Account Dr.

PLA on hold Account Cr.

During Fortnightly Utilization

Cenvat payable Dr.

Cenvat Account Cr.

PLA Account Cr.

Note: Cenvat Suspense Account should be cleared appropriately using FI JV's.

What should be my accounting entry in subcontracting reversal / Recredit?

For Subcontracting Challan Reversal

Cenvat Reversal Dr.

Cenvat Account Cr.

For Subcontracting Challan Recredit

Cenvat Account Dr.

Cenvat Reversal Cr.

What should be my accounting entry in SD ?

For Factory Sale

During Billing Document

Customer Account Dr.

Sales Account Cr.

Cenvat Suspense Account Cr.

During Excise Invoice Creation

Cenvat Suspense Account Dr.

Cenvat payable Cr.

For TR6C Challan

PLA Account Dr.

PLA on hold Account Cr.

During Fortnightly Utilization

Cenvat payable Dr.

Cenvat Account Cr.

PLA Account Cr.

For Stock Transfer through SD

No Accounting entries for Performa Billing Document

During Excise Invoice Creation

Cenvat Suspense Account Dr.

Cenvat payable Cr.

For TR6C Challan

PLA Account Dr.

PLA on hold Account Cr.

During Fortnightly Utilization

Cenvat payable Dr.

Cenvat Account Cr.

PLA Account Cr.

Note: Cenvat Suspense Account should be cleared appropriately using FI JV's.

Product Costing scenario in NUT SHELL :

Let us assume that the company is manufacturing finished product ZZZ for which we need raw materials XXX and semi finished materials YYY.
The Production Order consist of BOM consisting of the above three components and the routing which has the operations to be performed.
The production is carried out through a Machine what we say as a Work Center.
The production order has to be carried out in the work center.
The operations are going to be processed through various activities like power, water, labour etc.
The prices of these activities are being defined for a cost center through KP26.
The planned and actual quantities of the raw materials and other activities are done in the production orders.
The work centers carries the activities and the actual activity performed will be confirmed during production process.
We have a costing sheet to calculate the raw material, packing material consumed along with other overheads.
This costing sheet is assigned in the Valuation Variant of a Plant.
The Valuation Variant also carries the cost component structure defined in OKTZ.
The planned and actual valuation variant for the plant is assigned to the costing variant.
During creation of Production order CO01, we assign these costing variants.
We also assign the settlement rule to the order type.
Whenever the Production Order is created, the costing variant planned captures the values through the cost component structure the materials consumed and the planned activity prices and the costing analysis of the production order shows the planned values of all the costs.
After settlement of Production Order, it shows the actual values.
If you run cost estimate through CK11N or CK40N for the finished product ZZZ, it will capture all the cost through cost component structure and gives you the cost of the material as per the lot size defined by you.
The example referred holds for manufacturing orders and the actual costs are captured based on the settlement of production orders at any point of time.
Whereas in product costing by period, the costs are captured in Product cost collectors and settled based on period settings in settlement rule.
On activation of the material ledger, the material price analysis can be done for the actual cost postings.

Key points while PCA configuration:

Profit Center Accounting (EC‑PCA) is being used to determine profits and losses by profit center using period accounting approach.

Set Controlling area – OKKS
Maintain Controlling area settings - 0KE5

o In this IMG activity you define the general control parameters for the controlling area.

o The first step you need to take is to enter the name of the standard hierarchy of profit center master data. The system creates the standard hierarchy automatically when you save.

o The dummy profit center receives all the postings in your system to objects, which are not assigned to a profit center. This ensures that your data will be complete in Profit Center Accounting. This field is displayed here for informational purposes only. You create the dummy profit center under Master data -> Dummy center.

o The checkbox Elimination of internal business volume for Profit Center Accounting is ticked for the controlling area OP01

o Currencies:

o Profit Center Local Currency Type = Controlling area currency

o Profit Center Local Currency = USD (as this is the group reporting currency)

o Store Transaction currency: Yes

o Valuation view = Legal valuation

o ALE Distribution method: No distribution to other systems

o Currency Type changed to 30. This is as per OSS Note 119428.This note recommends keeping the PCA currency type to 30 if the currency type for the controlling area is 30 since the currency type in Controlling area settings is 30 the PCA Currency type is changed to 30.

Activate Average Balance Ledger – 0KE6: The average balance ledger is not being used hence the 8Z ledgers have been kept as deactivated.
PCA –Allow balance C/F: In PCA the balances have been configured to allow carry forward. The Pre requisite are that retained earnings accounts have been maintained.
Set Control Parameters for Actual Data -1KEF: As soon as Financial Accounting entries are been made the PCA – 8A Ledgers will be updated simultaneously.
Maintain Document Types: GCBX -> Document type maintained is A0. The three check boxes are for:

The transaction currency,
Local/company code currency and
Third currency determines which currencies are stored for this document type has been used.

SL: Maintain additional document type. This needs to be used when correction documents, (to rectify data posted from Finance and other modules) are posted during the test phases for the period end scenario. This process will be used only during the test phases and hence this document type will not be transported to Production.

7. Maintain Number ranges for local documents - GB02: The number assignment is dependent on the company code

8. Maintain Automatic account assignment – OKB9

9. Choose Accounts: 3KEH: In this activity, you define which accounts or account intervals you want to transfer to Profit Centre Accounting. If no profit center is specified in a posting, the system uses the default profit center for the account or account interval.

BS readjustment: The balance readjustment program read all AR, AP and TAX postings (posted without or with profit center DUMMY). It allocates the correct profit center to AR/AP and TAX and creates postings in FI and In the period end-closing schedule we also run the PCA AR/AP update where all open items (AR/AP) are updated in total in PCA per profit center. The offset postings are updated real time. This means we have double counting in PCA in the AR/AP area. To solve this the readjustment accounts are removed from 3KEH.

10. Derivation Rules for Finding the Profit Center: 3KEI: 3KEH configuration is used for determining default profit centres for all Balance Sheet accounts, other than reconciliation accounts, where the COB cannot be determined. These accounts are therefore, assigned to Corporate or Financing. Certain Balance Sheet accounts are defaulted to DUMMY because the COB cannot be determined at time of posting, and should not be reported against any particular COB from a 'day to day' perspective. They are, however, dealt with during the period end and eventually are allocated to the COB's guidelines.

11. Adding fields to PCA distribution /assessments: Transaction GCA6: View/Table: V_T811I

12. Assignment of Profit Centres to Co codes: In this activity the profit centres are assigned to company codes. This can be done while changing the Profit center or can be done collectively. Transaction KE52, KE56

13. Perform Account Control for Valuation Differences: When payables and receivables are transferred to Profit Center Accounting, the system adjusts valuation differences arising from foreign currency revaluation. In this activity, you decide which account these adjustments through foreign currency revaluation are to be posted to. There are two possibilities here:

§ Posting to the General Ledger account for payables/receivables

§ Posting to the balance sheet adjustment account of the general ledger account for payables/receivables