FREE OF COST - Purchase Accounting

Dear all,
I have one serious problem in my project. In purchase the Vendor is giving some schemes like FREE OF COST. ie If we buy 10 items supplier is giving 1 item as Free of Cost. The issue is our client wants the Accounting Entries for the 10 items is as per SAP B 1 Accounting method.
Where as for the Free of Cost item the Accounting Posting Entries as follows;
           1.   Free of Cost Purchase A/c               Dr. xxxxxxx
                 Discount Receipt A/c                      Cr.                   xxxxxxx
                 Closing Stock A/c                          Dr. xxxxxxx
                 Stock in Trade A/c                         Cr.                   xxxxxxx
Please help me out to overcome from this scenario.
thanks in advance.
Rajesh

Hi Rajesh,
This could be possible if you are using G/L determination on warehouse basis and store the FOC items in that warehouse or in Item Group basis G/L determination if its definite that these items will always be on free of cost but if its the same item i mean on buying 10 perfumes your client give one same perfume for free then you must use G/L determination on warehuse basis and prior to sale this item, you need to transfer it to that FOC warehouse and on sales documents you need to pick FOC item from FOC warehouse. ( Same process would be incase of purchasing)
Try it.
Regards,
/Siddiq

Similar Messages

Problem regarding Purchase Order with Free of Cost Material

Dear Xperts,
I am facing problems while doing Goods Receipt of a Purchase Order having all the materials we are going to receive Free of Cost from the Vendor.
This case is happening with Doemstic and as well as Importer Vendors also.
Problems to be solved:
1. If we are using Tax Code(with excise conditions) ,excise duty calculation does not take pace automatically at Goods Receipt as the Material Value is Zero on which the duties will be calculated for a Manufactuing Plant.
2. This case seems very problammatic if that Purchase Order is having almost thousand line items.The user has to enter all the Excise duties manually for each & every line item during Goods receipt in a manufacturing Plant.
3. In case of Importer Purchase Order also, the CVD portion & CESS on CVD portion user has to enter manually.
4. To solve this problem we are not using Free Goods Indicator in PO, we are entering 0.01 paisa , but during the MIRO of Planned Delivery Costs , the system is not showing or providing POP-ups of those relevant condition types to the user to enter the actual amount.
Please advice, how can we proceed in this case.
Regards,
Soumick

First you are putting 0.01 value . So the planned delivery cost is not showing coz if say tax is 8% then 0.01 x 0.08 will be 0.0008. It will take first two digit after decimal and hence its 0.00 and hence plannded delivery cost is not showing.
If you put 0.5 you will be able to put planned delivery cost in MIRO
Now regarding value is zero and how will the import duty be calculated. May be make a pricing routine where in the custom duty is not calculated on this base price 0.5 or 0.01 but on the actual value if it was not free of cost and that value you can maintain through MEK1 transaction code.
And while posting MIRO or MIGO you need to identify that these are free of cost material and use BADI fi_ac_document
and may be replace the actual GL with some other GL so that 0.5 or 0.01 does not add to your inventory cost and you could knock off later.
Regards
Sangeeta
Edited by: Sangeeta Khurana on Feb 6, 2012 1:37 PM

HT5622 I couldn't purchase free application and my account informed there was a billing problem

I couldn't purchase free application and my account informed there was a billing problem.

Try this:
- go to settings>itunes & app store
- tap on your apple id
- select view apple id
- select payment information
- if you have the option none select it
- select done to the top right
- now try downloading the free app again

Free of Cost item with transportation charges

Hi
We have a new scenario in which we are importing some spare parts of the machine which have no value (free of cost). As we are importing the material some charges like custom duty and freight has to paid by us. Now the problem is when we are creating the purchase order and mark the line as free and enters the condition at the purchase order header, the system is not picking the charges at the time of invoicing.
Can anyone has any idea how I could handle this? Is there is any other procedure for handling the scenario?
Immediate response is helpful.

Hi,
While creating Po, check the check box for free goods...
While doing MIRO, enter your all costs in planned delivery costs.
Or
1. Create a PO for free goods with Free goods delivery indicator on.
2. Do goods receipt of free goods.
3. Create MIRO without PO and debit the account of material with delivery cost.
Note- Material tab is visiable in MIRO if you have activated direct posting to material account in SPRO.
SPRO - > Mat Mgmt - > LIV -> Incoming Invoice -> Activate Direct Posting to G/L Accounts and Material Accounts
Hope it helps.
Uts
Award if helpfull
Edited by: utsa agr on Feb 23, 2009 1:37 AM

Purchase Account activation in Company Code

Hi,
We have a situation where for the finished goods, we have a new Purchasing Condition to make accruals of Inbound freight costs. And for these finished goods, for the Company codes which have Purchase account activated, we do not want the posting to be done to FRE, Freight purchase account.
For the rest of the material types, the posting should be normal and have no change.
Even for the company codes which has Purchase account actiavted, we want the posting to be as ... during goods receipt.
89     108400000      1500    USD   BSX
96     132200000     1250- USD     WRX
86      815030000        250   USD   PRD
40     450100000          100        USD   ZFN (new)
50     132390000     100-        USD   FR1
Could you please provide your comments?
Thank you,
Vamshi

Hi Vamshi,
I donot think this can be done as if PAM is active FRE will be trigerred
See the IMG documentation for:
Materials Management
-> Valuation and Account Assignment
   -> Account Determination
      -> Account Determination Without Wizard
         -> Configure Automatic Postings
Here do not execute the transaction, but click on the icon to display
the documentation instead. Then, scroll down the different posting keys.
You will see the following:
"Purchase account(EIN), purchase offsetting account (EKG),
freight purchase account (FRE):
These transactions are used only if Purchase Account Management is
active in the company code."
Therefore, 'FRE' is the freight purchase account and it is only used if
Purchase Account Management is active in the company code.

Add VISA Transaction Amount Free of Cost

Hello,
During my project work, I generate Purchase Requisitions for most equipment, but occasionally use the company VISA for purchases. My company does not have the module to pull the VISA information directly into SAP.
Is there a method that can be used to place the VISA transaction amount into the SAP project (WBS Element), but not have this amount charged against the project in the SAP system? Using the Free of Cost AcctAssgntCateg Desc, does not allow the use of the WBS element in the Item Account Assignment field.
I have developed a report to pull all Purchase Orders against the project (WBS Element), and would like the VISA transactions to be shown in the report.

I found a Stat check box in the ME23N/Item/Conditions tab. I don't have access to this check box at my user level.
Are you suggesting that if this Stat check box was deselected, the item cost would not post to the GL account?

Can i get Adobe Photoshop CS2 for free of cost?

I have came across that photoshop cs2 is coming legally free of cost

As gener7 has pointed out there is no "free Photoshop CS2", it has been made available for people who hold legitimate licenses for versions affected by the activation server having been taken offline and a lot of people seem to have misunderstood that.
While it may be tempting to ignore the distinction it may be worth considering that Photoshop is still the product of other persons’ efforts (no matter how the profits are being distributed between the corporation Adobe and the individual developers etc.) – supposing you do produce images yourself (as a photographer, designer, illustrator, …) how would you feel about people assuming because you publish them online they are theirs to use for free?
Maybe you should consider using the free image editing application Gimp if your economical circumstances should not allow for purchasing a Photoshop license currently.

Free of cost material but the planned delivery cost is to be invoiced

Hi,
We are having a scenario where in we receive material free of cost but have to pay for the delivery cost to the vendor.
We are creating Purchase order with the "free item" checked and we are maintaining the freight condition at the header level as at the item level as soon as you check the free item check box, the conditions tab disappears.
Secondly if we are maintaining planned delivery at the header level it requires the Invoice check box to be checked. Which is not possible to maintain with the free check box ticked.
Have maintained the vendor master without the GR based IV tick.
Request to kindly do let us know where have we missed out.
Regards,
mahesh.

one of the way out of this issue is
give a heavy discount on that material from vendor and put the price of material such as to do the frieght .but if u r having moving average price for that material thenit is not at all preffered

Free of Cost   sales error during billing

Dear all,
i am facing the problem while doing Free of Cost sales ,   i have created a seperate document order type for FOC with the sd document category as "C" and and doc prcing porcedure as "C" . and in billing document   i have also included doc prcing procedure as "C" .
My problem is when i create the sales order and when doing delviery there is no problem.. but when i created a delivery related billing
*the first error i am getting is   document no XXXXXX ( error in account determination ) but when i went to VF 02 and put the billing document number to check account determination analysis .*
*i am getting this second error " billing document XXXXXX does not exist"*
*Message no. VF041*
*Diagnosis*
*The billing document you specified does not exist.*
*This document was possibly archived.*
but when i went i checked in the table level it is the corresponding billing document number is showing in the table
when i check the document flow of the order i am not getting the order number also to see the document flow for it
wht could be the reason
i am confused.
my senario is    foc sales should be done   the customer should not be debited but excise entry has to be made for it.
please give ur valuable inputs
Edited by: k.kumi on Aug 8, 2010 7:06 AM
Edited by: k. on Aug 8, 2010 7:40 AM

Thanks for your reply
your absolutely right, i have used FD document type and i have created a proforma invoice so that i can have a excise posting done for the particular materials , because since it should excised .
i have a billing type with SD document category as "U" for proforma invoice .
here everything is happening like sales order is created , PGI is happening and when it comes to delivery related billing
The system cannot able to able to save the data during billing.
the system is saying an error "billing document XXXX does not exist"
since i am creating a proforma invoice atleast i need to have the billing document number generated to do the exicse posting
Is it related to number ranges problem ?
Kindly reply me , waiting for your reply in anticipation
thanks

Free Of Cost Material Receipt & Issue

Dear Expert
We have received some materials free of cost from govt. , and also we have issued same material to our project/cost centre free of cost. Pl. guide us how to receipt & issue free of cost material to the cost centre/Project.
Thanks & Regards
Piyush Dave

If you receive a delivery free of charge from the vendor, you must first determine whether a purchase order was created for it or not.
A delivery free of charge increases both total valuated and unrestricted-use stock of the material.
Activities
Entering a Delivery Free of Charge with Reference to a Purchase Order
If the Purchasing component ordered a material with a price of zero and specified in the purchase order that no invoice is expected for the delivery, you post the goods receipt with reference to the purchase order.
Entering a Delivery Free of Charge Without Reference to a Purchase Order
If you receive a delivery from a vendor free of charge for which no purchase order was placed, you post the receipt of the goods as a miscellaneous (other) goods receipt.
Choose Goods movement ® Goods receipt ® Other. Enter the data as required and choose movement type 511. When you process the items, the system prompts you, for every item, to maintain a text for the delivery free of charge on the detail screen. This entry is mandatory, since without a purchase order there is no other way of entering information about the delivery

Transfer of Free of cost unit at 10% markup to Main product

Dear Gurus,
we are consumer products industry and offer bundle scheme i.e. one unit free on the purcahse of one unit.Let assume our main unit is LCD TV and free of cost unit is BD player. both units have common Division and common profit enter. we offer that on purchase of LCD (Sale Price PKR. 100,000) BD Player (COst price PKR 10,000) is free
now managment wants that when they execute profitiblity report of LCD it should show following figures
Sales Price of LCD                                                                          PKR 100,000
Less COst +10% transfer price of BD player                                         11,000
Net Sales Revenue of LCD TV                                                                 89,000
while as we see profitibility of BD player it should show followings
COst Price of BD player                                                            PKR       11,000
10% profit margin(Mark up)                                                      PKR         1,000
Totale Sales Figure                                                                    PKR      12,000
While At present following figures are being derived i.e.
Sales Price of LCD                                                                          PKR 100,000
and net result of BD players is NIL
Requirement
Transcational Procedure `to transfer BD player COst price +10% to LCD and how to get above desired figures which are realistic
BR
Sajida

Hi,
The copy control setting can be made through VTFL
But not sure about percentage of margin, it will transfer hole cost of free item to main item
For your requirement in pricing procedure create two conditions for represnting cost
Say
PR00 - is for basic price - 100000
VPRS - Cost - 10000
VPRM - Margin Cost - 1000
Profit will be 89000
Now to bring the 10 % cost from free item to main item you have to write routine and assign in pricing procedure aginst VPRM condition
kapil

Question regarding free of cost order (samples)

scenario: i have a customer who wants to send 100 qty of good A free of cost to a customer. he wants the tax to show up on this order but the taxes on this are paid by the client himself and not the customer. how would i translate this into SAP?
thanks!

Hi
Create a seperate pricing procedure for free samples.....
let us take a example..
step :10       PR00---100 quantity---    +100 /- rs -
ERL
    Step 20 : R100--- 100% discount- -100/- Rs-----ERS
       Step 30:               Customer A/C    0 /- Rs
     Step 40: tax caluculate on step 10 CST 2 %--2 /-RsMWS
In this way customer account 0/-Rs debited CST account 2/-Rs credited.
Thanks
Sree

Exicse for free of Cost Material

Hello,
I have a question regarding Excise on Free of cost Material. When we are sending material to Customer as a sample or free of cost then we do not pass any accounting entry for the same during VF01.
In the above scenario how do we capture the excise in our system..Please guide me.
Br,Vivek

Hi taurian,
This is very simple.
in the Pricing Procedure for FOC, shall I maintain the Excise Condition Type as Statistical?
for this no need to Specify statistical for condition types because after delivery subsequent billing is proforma.because this value should not post to accounts,that's why we create proforma invoice.So even without specifying statistical accounting document will not be generated.
but as per central department of excise we should pay the duty while goods leaving from factory.So that we should post this excise conditions amount to the accounts.
So create subsequent excise invoice then accounting document will be generated.system will calculate the excise condition amounts based on basic price you maintained in V/08,system does not bother whether basic price condition type is statistical or not.
For your understanding:
Configuration:
order type FD,Item category-KLN,Schedule line-CP
Delivery type LF
Billing type F8 (delivery related proforma)
Sales cycle:
Va01>vl01n>vf01>j1iin
Let me know for further clarifications.
Thank you,

Free of cost supply for Rejected item

Dear All,
Please help me in the following scenario :
a. A line item ( Imported item )rejected by quality .
b. For that rejected item foreign supplier send us the same material in free of cost . No need to pay for that item.
c. I paid the freight and customs duty for both rejected item as well as for free of cost item .
My questions :
1. How to make GR for free of cost in the same P.O ???
2. How to account the customs duty and freight that has been paid twice for the same item ???
3. Can i avail cenvat facility for both item .???
Please clear ....
Cheers,
Somu

Hi
If the PO is not taken into GR then add the item once again in the PO and chec the FREE GOODS checkbox. By this check the GR taken will not affect the cost of this item.\
For the double payment made already , you can create a credit note for the vendor in MIRO [Subsequent credit], by choosing the amount and entering the articles.
On confirmation of MIRO the value will be reduced from these articles in proportion which was actually increased due to double payment.
Hope this helps.
Regards
Govind.

Free of cost sale in Manufacturing

Hi,
We have one manufacturing plant, as when we create the invoice the customer account is debited and the excis etax account are creadited now in case of free of cost sale we required that insted of customer we have a different GL account the total invocie amount of inovice should be debited to that GL account insted of customer and the tax account should be credited as per regular process, so what setting cam be done to this, but SO, delivery and billing shold be done on customer name only.
regards,
zafar

Hello
Your most of the requirement should get solved by use of Item Cat TANN.
I hope the following SDN thread will be a good referenc for your requirement.
- free goods Accounting
- Excise in free goods sale
Regards
JP

FREE OF COST - Purchase Accounting

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