Stock based Accounts

Question

Dear Experts,
      My client is doing  trading business,  currently they are using the tally accounting package here  When we do the procurement  and slaes below accounting  entries are generating  inventory is automatically updating .
Purchase a/c Dr.
  To vendor a/c Cr.
Customer a/c Dr.
To sales a/c Cr.
    How can we mab the above entries in SAP , because when we do the  Procurement and sales  below entries  we suggested to
our client  but they are not agree on this point 
Inventory a/c Dr.
GR/ IR a/c Cr.
GR/ IR a/c Dr.
Vendor A/c Cr.
COGS  a/c  Dr.
Inventory a/c cr.
Customer a/c Dr.
Sales a/c Cr.
  Could you please any one give me your inputs
Thanks
Sri

Answer 1

Hi Venkat,
SAP follows a consumption based accounting and not purchase based accounting.
On purchases, Stock will be debited and liability booked in GR/IR.
whenever there is an issue of stock for production/consumption, consumtion(P/L) will hit the books.
The difference in the way accounting takes place in SAP(Consumption based) as compared to purchase based accountign needs to be explained to your client. All companies running on SAP follow this way of accounting.
Regards,
Kavita