Production ordre settlement to revenue G/L account

Dear All,
The user has created one production order with order type PP05 that is for "Repair Work Order". The settlement rule receiver category is the G/L account Income statement account group and it has been created as a cost element with cost element category "1".
we assume that the receiver G/L account is "S999710099" that is "   Total Production Credits - Manual Adj".
the production order has been created without material because of this is for repairs for production machines. for this some materials are issued and labours are also posted to this production order.
in the allocation structure, settlement cost elements folder we have given the settlement cost element "S999720003" that is "Over/Under Absorbed-Manufact (Cost Elem Ca" with the cost element category "22".
when we do the production order settlement by using the KO88, the document has generated as below:-
Itm PK Account    Account short text   Cost ctr   Tr.prt Profit ctr           Amount Text
1 40 S999710099 Total Prod Credits   JX09A00180        JX09                106,75 ORD 6002531
2 50 S999720003 Ovr/Und Abs (CEC=22)                   JX09                106,75- ORD 6002531
Here the 2nd lind item is not updated the Cost Center. The user is also don't know weather the cost center is requied are not for the 2nd line item. I am also don't know weather the cost center is requied or not?
Could any body help me in this the cost center is required or not for the 2nd line item cost element, category is 22.
Thanks and regards,
Mr.Rao.

Hello Mr. Rao,
Cost Element Category 22 is for external settlement which means that they are used to settle order costs, project costs, or cost object costs to objects outside of CO. These objects could be assets (Asset Management), materials (Materials Management), or general ledger accounts (Financial Accounting). The System creates an accounting document when the costs are settled. Therefore the system is right in not posting that to an cost object.
However, what I feel is that the credit entry should have been posted to the order with GL S999710099 and the debit should have been to this one. Is the order having a credit balance or its incorrect configuration.
If you want to analyse the repair costs by cost centers then you should have defined secondary cost element with category 21 and then you could have settled this to cost center.
My personal opinion is you should take the repair cost to some cost object either Cost center or PSG in COPA (in case you have COPA) to analyse the information on some basis.
Kind Regards // Shaubhik

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Production order settlement accounting entry

Hi,
Can u gibve some link what is production order settlement , and how the accounting entry is generated, our PP person have done the settlement in april 2010 but accounting entry are not updated in the corresponding g/l account how to check this.
regards,
zafar

Production order settlement is just a process of closing the order after goods recipt (production) is being booked in system
Production order settle the costs to CCNs from the orders. It doesnt have any entry unless under / over absorption. In that case following entry will be generated (i.e. of difference amount)
Inventory Change Dr. To Inventory & vice a versa as the case may be of under/over absorption.
If you go thru MB5B for the material, you will find the same without any Mvt. type.
Hope it is clear.
R/s

Production order settlement in case of non valuated material

Hello guys,
Our client wants some of the materials have to be non valuated. These materials are raw materials and SFG also. We can assign UNBW material types to those materials.
I have created one material for test purpose. It doesn't contain the accounting view so as no valuation class. BOM of it , doesn't contain any component as client doesn't want to show any consumption on production order.While creating the order for that material system asks for the settlement rule. I skip that step and create the order. I do GR for the same.
My question is, is production order settlement essential for these orders? What if we don't settle the order. No activity type has been assign to the work center.
Kindly give ur valuable inputs.

Hi,
No need to create material as UNBW type.
Normal ROH, HALB, FERT material type we can achieve this.
In the BOM of FG or SFG goto item detail screen there is a tick mark in costing.
Remove the tick by OS23 - BOM status.
Now you can do your production as regular. But cost will not get update.You can do regular settlement also.
Regards,
Dharma

Actual cost of Production Order settled to Fixed Assets

Dear all,
My client is doing in-house production of moulds (internal order suggestion is not accepted by the client) for which
they have the following
1. BOM
2. Machine hour
3. labour
4. overhead etc
5.plan value
6. actual value
Can i settle the actual cost of production order to Fixed Asset ?
If yes
what are process kindly give me if any process other then the below
1.production order created
2. settlement profile - FA is settlement optional
3. allocation structure
4. Asset created
5 define asset in settlement rule
Kindly give me your valuable input
regards
elango

Hi,
Although i am not CO expert , please check with your FICO consultant who are expert before make the final call.
During settlement to a G/L account or a fixed asset, the system ignores additional account assignments that were manually specified in the distribution rule.
Based on what i know .
you can stipulate that settlement may be made to cost centers and orders, but not to fixed assets.
The Settlement profile is something that you need to create a settlement rule to settle the actual costs of a sender object.
About the Settlement rule is something that contains the distribution rules for the sender. It will define how the way to settle the cost.
Allocation Structure
In the settlement structure you combine the primary and secondary cost elements into groups, in which debits are then posted to the sender objects. For each group, you specify whether (for settlement to a given receiver type) settlement is performed
by cost element or using a settlement cost element.
For example, you might use settlement cost elements:
To document the purpose of an order (such as, repairs or maintenance)
To reduce data volumes (you can combine a number of debit cost elements
under one settlement cost element).
TQ

Production order settlement (co88/ko88)

when we settle the production order variances , it will take one account from OBYC(t-code)/PRD-PRF. But how does systemdetermines the other account?
and what should be the GL entry?
Like Credit which balnce sheet account /P&l account
Or debit which balnce sheet account /P&l account

Hi,
it is going to hit GBB-AUA or GBB-AUF based on your configuration.
AUA: for order settlement
AUF: for goods receipts for orders (without account assignment) and for order settlement if AUA is not maintained.
PRD-PRF- GL account should not to be a cost element.make sure that.
Are you analysing production variance in COPA?if so.check the configuration
1.Configuration like allocation structure,PA transfer structure,Settlement profile.
2.Variance Analysis configuration,like target version,variance key etc.
Postings:
Credit : GBB-AUA or AUF -->
Debit : PRD-PRF--> this should not a be cost element.
Hope this helps you.
Thanks,
Rau

Production Order Settlement to GL by Labor ,Material,Ovhd,etc

Our client would like to settle Cost Collectors and Discrete Orders, make to stock, to the GL by Cost Element Category.   The goal is to definitely have the variance account by cost element category. They may also want to have the Delivery to Stock COS account and settlment offset by cost element category.
I am beginning to evaluate alternatives.
Has anyone done this before and what methods di you follow.
Thank you,
Jeffrey Webber
[email protected]

Dear Sadasivan,
Will you explain in details, we have gone through the suggested path, where there is only two defaul rules
PP1 - Production Full Mat. Settlement
PP2- Production Periodic Settlement
Actually we want to settle the production order variance as a financial variance through cost center, we don't want to settle this variance to the materail. Currently while doing the settlement, system posting the journal entry as
Inventory Account   Dr.
To COGM               Cr.
We want the accounting entry as
Price Variance       Dr.
   To COGM

Settlement of Revenue Bearing Project

Hi,
Please tell me where can we settle a Revenue Bearing Project to ? I don't want to settle it to a PSG segment . Is it possible settle to the sales order line item (SDI) . Revenues or customer down payments can only be settled to G/L accounts, profitability segments, sales documents (SDI). so please anyone explain how to settle against sales document (SDI) what is prerequisite for this. Please explain step by step if possible.
Regards

Hi Nivrutti ,
You are repeating your question so many times.
Please study about settlement and check why you want to settle your projects.
Muzamil

Production order settlement with 0

Hi,
I understand each month end Internal Order must be 0.
When I see in production order, those production order with status teco, it is 0 in KOB1 but those production order status which not teco, i see the balance in KOB1.
So I would like to know should production order need to be 0 when come month end for all production order status be it teco or not?
what is the impact to costing and finance?
Thanks

Dear,
Please check in your Result Analysis Version (OKG9) whether Transfer to Financial Accounting is checked. If you check this then only results analysis data saved under this results analysis version can be passed to Financial Accounting when you settle.
For Details information please refer below ;
Transfer Results Analysis Data to Financial Accounting?
This indicator means that results analysis data saved under this results analysis version can be passed to Financial Accounting when you settle.
If Profit Center Accounting is active, an additional posting is made in Profit Center Accounting on the basis of this posting if the profit center number is indicated in the object to be settled.
Use
You set this indicator when you want to pass results analysis data to Financial Accounting.
Procedure
Set this indicator if appropriate.
To be able to pass results analysis data to Financial Accounting, you must define posting rules on the basis of which the work in process or reserves are capitalized or shown as a liability (see also: Posting rules for settlement to FI).
Dependencies
In results analysis it is possible to make a cross-company valuation for projects or sales orders and update under a results analysis version. The results of this valuation cannot be passed to Financial Accounting.
The results analysis data that you transfer to Financial Accounting is also passed to the ledgers in which the transaction "KOAE" was assigned the combination company code / ledger.
The results analysis data that you transfer to Financial Accounting is also transferred to Consolidation.
Br,Vivek

How we will settle "Increase/Decrease of stock account"

Hi Friends,
How we will settle "Increase/Decrease of stock account" while receiving Finished goods from production order.(PRD transaction key)
Urgent...
Regards,
Ramakrishna

Hi,
Generally The Finished Goods always maintained with Standarad Price.When Goods recieved with 101, the stocks are updated automatically.
Also go through this:
http://help.sap.com/erp2005_ehp_03/helpdata/EN/42/ef768694106a1ee10000000a114cbd/frameset.htm
Regards
Rahim

Production order settlement info

Hi,
In production order settlement category is MAT.Some times it is CTR .But costing varient is PPP2.In settlement configuration i check that Allocation structure is A1 ,PA transfer sture is A1 butdefault object trype is blank . So how system take it MAT some times CTR sometimes and wt is the impact and wt is the meaning of this thing when production settlement i is happened ?
Thanks & Regards,
Debashis

HI,
You can check order type in the Production or Maintenance order as Type.
Check the Order Type in T.code KOT2 and view details for your order type in which you can see the settlement profile. The settlement profile(T.Code OKO7) will have the Default object MAT or CTR etc.
Costing variant doesn't have any relevance.
Generally all maintainence order will be settled to cost Center.
And Production Order will be settled to Material.
At the settlement all the costs incurred for the production order will be settled (Moved) to respective Finished product if it is MAT and for Cost center if it is CTR.
The accounting entries for production order will be
Price Difference F.G A/c DR
To Change in Stock A/c Cr
or Vice versa.
Regards,
Raj

Production order settlement variance button

Hi,
I check the settlement of production order and would like to clarify.
In the settlement rule, the account assignment category is MAT, when double click the rule or click settlement variance button, it shows category PSG.
why there are 2 settlement? for settlement to asset, there is only 1 and no settlement variance button.
so why production order settlement has 2 settlement?
Thanks

Hi,
On settlement of Production order, two documents gets created one is Accounting document for posting the variances to Accounts and the Profitability analysis documents.
This is because, when COPA is activated, the Sold quantity in copa is valuated using the Standard cost estimate.
For eg: if the SCE of X material is 100 Rs. and Billed quantity is 10 Qty, this billed quantity is valuated using the 100 rs and 1000 Rs is transferred to COPA as COGM.
But when production is carried out, the actual cost can be different from that of SCE. I,e it can be 120 Rs.
Hence there is a difference of 20 Rs with which inventory is being valuated less in both Accounts and also in COPA. Hence the same is settled to the respective module on the settlement of Production order so that you have FI and COPA gets reconciled to that extent.
But Asset settlement we are valuating it with full amount of acquisition. and there is no standard set for the same. Hence the result.
Thanks & Regards,
Ravi Kumar

Production order settlement to post wip

Hi,
My understanding on production order settlement is to carry out 2 task :
variance posting in the case the operation is complete
cr p&l change in stock
dr p&l price difference
and also
WIP posting in the case the operation is not complete yet.
cr p&l change in stock
dr balance sheet wip
WIP calculation is done in KKAX / KKAO and posting is done in KO88.
Now my question is, in KO88 setting I do not see any setting to tell the system to do the WIP posting. I only can see the setting to post to variance only.
and OKG8 is to set which account to post to.
So how KO88 know to post WIP?
Thanks

Hi,
KO88 transaction code is used for both WIP and Variance settlement.
It is the Order status which decides whether KO88 settles variances or WIP.
When the Order status is Released, Partially delivered, Partially released, KO88 gives you WIP
When the status is Delivered or TECO it gives Variances. Hence this is the link which we establish in the WIP configuration OKGC and in OKG8 we link the GL accounts for WIP.
For variance we assign in OBYC, PRD transaction
Thanks & Regards,
Ravi Kumar

Production order settlement posting

Hi all,
For our production order settlement now, it is posting to:
Debit u2013 Production Order settlement (OBYC --> GBB --> AUA )
Credit u2013 inventory
For the credit posting though, in OBYC --> PRD --> PRF it is set to hit the 'cost of goods sold' account instead of the 'inventory' account. What can be causing it to hit inventory?

Dear,
In production order, there are 3 elements. 1 Material consumption 2 inventory change and 3 is confirmation on which planned cost and actual cost is determined.
Material consumption and inventory change is directly relevant to stock of materials but confirmation is only relevant to activities e.g. labor, machine, FOH and setup.
Settlement is difference of plan and actual cost on production order. This difference can be due to either first 2 elements or 3rd element i.e. activity. That's why it can not be "inventory' account".
Thanks
Muhammad Ashfaq

After production order settlement, where does the cost go?

Dear Experts,
I understand after we did the "order settlement" for production order, the cost will be settled to material manufactured from the said production order. Say, the total cost is $10,000 to produce 1000 units of finished goods (FG), then the cost settled to each individual FG at $10 each, am I right? Where can I see the settled cost in the material master?..
I checked in the cost center report, S_ALR_87013611, I can see the cost Credited from "production" cost center with a breakdown in settlement cost element such as machine hour, setup and personnel hour. I understand the other side of Debit was to the production order, and only after order settlement, I'm not sure which cost center will be Debited.
That would be the CO side, how about the FI, would there be any cost posted to the GL side after production order settlement to the material?
Please advise..
regards,
Abraham

Hi Abraham,
It's not the button i mentioned. I was just trying to take u to the accounting document from the settlement screen. well just drill down the settlement screen and u'll get it. No big deal.
But more important is the concept. I'll share my understanding here. (cost by production order)
Any value that flow into controlling module should have a cost object. Here production order is the cost object.
First u create a production order (cost object) for say 1 unit of X with a std price of Rs. 10
Std price comes frm material master as a result of std cost estimate
U start production - Raw materials are consumed - 2 qty x Rs.3.
Entry RM Consumption Dr Rs. 6    Inventory Cr Rs.6 (Prod order is debited with Rs.6)
Activity (Let's say machine hours - 3 Hrs x Rs.2) According to the routing it was 2 hrs but actual production took 3 hrs.
Entry - None - But production order is debited with Rs. 6.
When production is complete for 1 qty of X, entry flows
Finished Goods Dr Rs.10    Change in Stock Cr. Rs.10 (Production order is credited with Rs.100
Abraham, now visualise both sides of the production order. It will have debit of Rs.12 and credit of Rs.10.
Now accountant sees the production order and confirms the values are ok and puts the status of TECO to the order. which means the order is technically complete.
Now when u run the order settlement, this production order is picked up by the system (due to it's status). System sees difference between debit and credit of Rs 2.
So it cedits the production order with Rs. 2. Now both debit and credit of production order is equal (Rs.12)
Entry Price diff A/c Rs,2     Change is stock A/c Rs.2
Now this rs. 2 is settled to COPA. It does not flow to material.
Reason: in a std costing system materials are valued at standard cost and
Hope this helps. Do revert in case of doubts.
Best Regards
Vimal

Settlement of Revenues from IO to CC

Hey there,
We are on ECC6.0 with New GL Doc Splitting active. We would like to:
1. Book the Revenues on an Internal Order as real object hitting NO cost center at all.
2. Settle the IO by giving the Revenues in some % to 3 or 4 different Cost Centers.
3. The receiver Cost Centers are allowed for Revenue Postings.
4. On running the Settlement we receive the message as: Either the sender is already settled, or there is nothing to settle
5. Does this mean that there is no way we can settle the Revenues from IO to CC?
Please Help...

Thanks for your reply Ram. I already had updated those fields...
I found out that it would eventually not be possible as I got this error with a Note stating that:
Note
Revenues can only be settled to G/L accounts, profitability segments, sales documents, real estate objects, orders with revenues, or WBS elements.
So now I think that Revenues cannot be settled on a Cost Center.
What are your thoughts on it Ram?
Thanks...

Production ordre settlement to revenue G/L account

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