Subcontracting PO charges

Hello ,
In SC Po the output material comes in line item where we specify qty and net price. In this case the net price will be for the input material/sending material which is specified in the components tab. pl suggest how the net price charges to be put on sending material in PO. As the party will charge the processing charge of jobwork based on the material received at his end and not the what it has produced.
Thanks & Regards,
AK
Edited by: Atul Karajgi on Sep 11, 2010 9:38 AM
Edited by: Atul Karajgi on Sep 11, 2010 9:40 AM

Hi,
If there is no fixed ratio between input & output, release PO with 1 to 1 ratio, receive the scrap/waste also in the same output code and the after the GR, convert the output item code to scrap item code thro 309. Now you will be able to pay same rate to party for all his supplies of good & scrap.
Check with your CO whether the 309 entries are acceptable to them.
To differentiate good or scrap receipt, you may create a new Zmovement type or new storage location to recieve scrap items in output item code.
This is only a workaround avl.
With regards,
Jeeva

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Overhead on Subcontract Vendor Charge

We have implemented Raw Material Costing, adding overhead through use of a costing sheet.
We use subcontracting (PrcTypF/SpcPrcTyp 30). In most plants it is a minor portion of the cost, so we did not need to know how to add overhead to the vendor charge
At One of the plants that we are converting now to Raw Material costing, the Subcontract vendor charge is 80 - 90% of the value. We need overhead added to that charge.
I thought I could just check the box in the valuation variant for Overhead on Subcontract Materials and it would calculate.
It did not..
I did add the subcontract cost element to the BASE on the costing sheet.
What else do I need to do to get the overhead
thank you
Althea

Have you specified OH costing sheet under the tab overhead? This costing sheet needs to be specified for the Finished/semi finished field.
Please check if you can see the OH sheet under the valuation tab. Also check if the cost element in OH costing base is showing in itemization.
I think it is a OH costing sheet issue and not subcontracted material issue.
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Subcontracting Processing charge Issue.

Dear All,
With regards to one of my subcontracting scenario, I would like to post the following issue.
We have one finished Material "D" for making D we provide the component "A".Subcon vendor process their side A to B, B to C and C to D.Finally we got the product D from subcon vendor with the Processing charge Rs.6.00 (each activity having Rs.2.00). In some cases we provide Component B or C (In house produced) to subcon vendor directly to make finished product "D".For that we only charge either Rs.4.00 (from B to D) or Rs.2.00 (from C to D).
But here we found the problem that all the activity price coming from Inforecord (Subcon) only and in Inforecod I can only maintain one price.So kindly help me to address this issue ??
Regards
AKS

Hi AKS,
You can do it in two ways.
1. You can maintain the BOM for the finished material with A B C and explode the BOM when you are providing all the materials to the SC vendor. In PO you are mentioning the price against D (FG) only and you have the option to enter the price of your choice depending on which components you are providing.
2. You can do it without BOM, and in PO you should mention only those components being provided to the SC vendor and enter the charges as said above.
You should maintain two PIRs, 1 with all the components and the other with limited components.
Hope it helps
Revert if needed..
Regards
Shiva

Subcontracting charges and process

Hi,
We are implementing the Sub Contracting process, we have sonme restriction from our finance department that tehy do not wnat to include the subcontracter service charges in the total product cost, means payment to the subcontracter should be paid but it should not include in product total cost , for example:
Sub Contracter PO for X Product = 50 pcs
Issued Component A = 10 pcs ( 10 $)
Issued Component B = 10 pcs ( 15 $)
sub contractor charges $ 2 / pcs = 2 x 50 = 100 $
Good receipt of 50 pcs of X product
Total cost in above Good recipt is ( A (10) + B (15 ) + Sub contracter Chrges (100 ) = 125 $
now our finance want to exclude this subcontracting charges from the above process, so that our final product cost should always be same and it should not have any other cost impact. ( because finance is directly crfediting / debiting subcontractor charges from custome and vendor and it is not included in product cost.
or is ther anyway that we can create 0 value subcontracting Purcahse order?
We want to use subcontracting process to monitor the stock status and goods movement at co packer end.
Reagrds
Saeed

If you look at the subcontract process, you semi finished or finished product which you are going to order from the subcontract vendor is going to be valuated with raw material cost + Vendor service charges.
So when we create subcon PO there 3 different prices involved here.
1. Raw material cost
2. Subcon vendor service charges
3. Semifinished or Finished material valuation.
Out of these 3, which one you are talking about.
If you are talking about the 2 (Subcon vendor service charges ) then you can alsways tick the free of charge on the PO line item so that Service performed with free of cost and your semifinished or finished will be valuated with reference to sum of the ram material costs
You may need to enter the Account assignment category as T.
I hope this informations helps.
Thanks,
Satya

Subcontracting scrap, component consumption and service cost booked to vendor

Hi,
Our client is issuing 100 pieces of component "A" to subcontracting vendor to manufacture finished product "B". In MIGO, we are receiving finished product B and consumption is booked for 100 pieces of component A . Invoice is paid to the subcontracting vendor for the service cost.
Later, we realized finished product did not met the quality standards and decided to scrap out the finished product B. This is scrapped and stocked out using std. SAP using 551 mov type. But the client want to charge scrap cost of finished product B, service cost (Job work cost) and the consumed components (A) of 100 pieces to subcontracting vendor. How to map this challenging scenario in Std. SAP.
Regards,
Sat

No need to create subcontracting PO.
Just create a standard PO, use material as FG (Material B as per your scenario)
Enter the vendor (whom you want to charge for it)
Let me explain the scenario:
1. You have created a subcontracting PO for vendor X, FG material B and component A.
Subcontracting service charge = Rs. 10.
Price for Material B = Rs. 50
Price for material A = 30.
2. You have done GR.
Now the FG material B is in your stock. (Here, you have done 551 movement type). Right ?
Now just do not do 551 movement type. Leave the stock as it is.
3. Then create a standard PO for material B and vendor X, give the price = (10+50+30) 90 and tick the return option in PO line item.
4. Then do goods receipt. Movement type 161 will be automatic posted in system and stock will be consumed from your storage location.
Then accounting entry will be
Stock account Credit
GR/IR account Debit.
5. Then you can do credit memo to vendor from MIRO with the reference of this PO. Then the accounting entry will be
GR/IR account Credit
Vendor Account Debit.

What Production Method Should I use

We sell products to customers the following way :
We recieve an order - create a PO.
The item is usually a BOM, i.e. A steel plate with holes drilled.
We create a PO for the Steel PLate from supplier 1 and order them to ship to Supplier 2 (Engineering Firm).
We issue a PO to supplier 2 to drill holes in the plate and order them to ship the plate to the customer.
How do I get B1 to automatically create the purchase orders to make this work as we do not actually keep any stock or really touch the product through the process.
How should I set up my items and manage the sales / production orders etc ... ?
Thanks.
Nick

Using Drop-ship warehouse is very much unavoidable in this case. And Back to back PO can also be opted for.
Any way .... for the Subcontracting, though there is no direct fitment in SAP B1, the following workaround can be tried -
Sol 1:
Production Order (for the Item, which is subcontracted) + Service Type Purchase Order to Purchase Invoice (for the Service Charge by the subcontractor)
Here : The the subcontracting charge can't be included into BOM.
Sol 2:
Production Order (for the Item, which is subcontracted) + Item Type Purchase Order to Purchase Invoice (for the Service Charge by the subcontractor, but the charge is created as non-inventory Item, but not as Labor Type Item)
>>Here in the next solution the Item's accounts mapping will be different than the other inventory Item.
>>The Subcontracting Service Charge item will be Buy type in planning method.

Partial Vat Calculation...................

Hi Experts..
I have an Issues.. Please through some Light on this..
My Problem:
Scenerion is like this :
In Subcontracting PO Charge is For Eg :100 rs . Out of Hundred Rupees
Vat Will be Calculated for 80 rs. and Remaining 20rs wil be calculated as
Service Tax...so in this Scenerio Please Guide me How to Calculate
Partial Vat..
Wating for Your Valuable InPuts.
Thanks in Advance
Purushottam

I am also facing same problem,pls update me also.
Points will be awarded.
Thanks and regards,
Raghu.
[email protected]

Subcontracting charges for the processed qty not for GR qty

Hi Friends,
We know the subcontracting process having scrap involvement. BOM created for 1000kg of semi finished goods for which Raw Material required is 1200Kg and scrap generation is 200kg (-ve qty BOM). PO raised on supplier for 1000Kg of Semifinished goods. Carried 541 for 1200kg of Raw Material. GR with Mvt101 for 1000Kg triggers Mvt543 for 1200kg of Raw Material supplied and Mvt545 for 200kg of scrap.
Here one will be able to pay SC for labour charges towards 1000kg only (based on PO and GR qty). While as the SC has processed 1200Kg of Raw Material. How SC will be paid for his actual work of 1200Kg?
Thanks

Hello All,
For better clarity please refer below scenarios which will take you more closure to the requirement:
PO
PO Qty
Oun
Net price
Curr
Per
OPU
1000
kg
100
GBP
1200
Kg
GR based payment
Processed Qty
Semifinished
Scrap
GR Qty
Oun
Payment as per GR
Desired payment to SC
Diff in Pay
Scenario 1
1200
1000
200
1000
Kg
1000 x 100/1200 = 83.33 GBP
1200 X 100/1200 = 100 GBP
@17GBP
Scenario 2
1200
900
300
900
Kg
900 x 100/1200 = 75 GBP
1200 X 100/1200 = 100 GBP
25 GBP
Scnario 3
1200
1100
100
1100
kg
1100 x 100/1200 = 91.67 GBP
1200 X 100/1200 = 100 GBP
@8GBP

Subcontracting charges

Dear,
How to get subcontracting charges in COOIS report.
Also , withdrawn value for the mvt type 543 is not coming in COOIS report.
Regards
vinod

Hi,
In COOIS report , value withdrawn for mvt 261 is display in component level. But for mvt 543 which is against material consume in vendor location sending for subcontracting, Value withdrawn for qty consume is not display.
Regards
Vin

URGENT: FM to update subcontract PO item component's field batch 'CHARG'

Hi, Experts,
Is there a FM to update subcontract PO item component's field batch 'CHARG' ?
Thanks

Hi,
I want to change filed <b>]BATCH</b> in subcontracting PO item using FM 'BAPI_PO_CHANGE' , but the parameter TABLES 'POCOMPONENTS' doesn't contain filed 'BATCH', is there another FM to substitute this one ?
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Sun Jimin

Subcontracting Charge

hai friends,
I have a situation where I need to pick up Subcontracting charge in product costing from a particular subcontractor among many subcontractors.How to make that possible in costing.
Seeking your reply

Hi Arun
In the standard system, the lowest info record is always considered... So, if this sub-con charge is the lowest, it will be considered automatically
Secondly, info records which are marked for scheduling agremeent, are not considered... So, if you mark all other condition records for Outline Agreeements (as per note 499699), the one left out will be considered for Product Costing.. You can ask your MM guy how to mark it as relevant for Outline agreement
Third option is to use EXIT_SAPLMEQR_001 in order to 'overrule' the standard search for source of supply (enhancement LMEQR001)
Regards
Ajay M

Subcontract GL acc for service charges

Deall all
as we know in GR of semifinished goods of subcontract goods,
6 GLS are posted -
2 for semi-finished and 2 for raw material and 2 for labour/service expences
can anybody reply where we assign or link labour GL AC/service chargs....in OBYC or else where?
Regards,
Vimlesh

HI
Following are the entries for Subcontracting
Accounting Entries in Subcontracting
   For SFG
       Stock Acnt SFG      u2013 Dr(+)                 - BSX
       Change in Stk Ac     - Cr(-)                  - BSV
   For Operational/Labour Cost
        External Activity Acnt   - Dr(+)        -   FRL
        GR/IR Acnt                    - Cr(-)         - WRX
   For RM
       Consumption Acnt RM     - Dr(+)      - GBB-VBO
       Stock Acnt RM                 - Cr(-)       - BSX
All the Keys (BSX,BSV,FRL,WRX,GBB-VBO,) are assigned GL accounts in Tcode OBYC and GLs are made in Tcode FS00

Subcontract Charges and it should not affect GR/IR Clearing Account

Hi expert
I have subcontracting process in house production, i send my ROH material from my one plant to another plant for subcontracting process. my subcontractor's is my other plant, because this is my internal/in house production, i dont want do the Miro for my plant which is my vendor. is there any solution that i can closed mt po with doing a miro.
regard
nabil

Dear Nabil
As per the Experts it is better to Use the Free Good indicator in Purchase order ,by this Gr/IR clearing GL account will no hit the value,Even Po doesnt ask for the Vendor Price.Though it is your companies requirement,did you think about the process cost that your other plant is investing?How will you calculate the process cost or expenditure that other plant has invested on the first plant.
Please discuss this with your company head once again ,if value is negotiable go for the "Free Goods" Indicator which is the best choice

Issue with conversion charge in subcontracting order

Dear SAP Team
I would request you, please suggest me for below issue.
Scenario is like this.
there are 2 company as A & B. Both company are working separately.when A company take service from B (vendor), then B charge to A as on actual. Now sharing one real scenario.
Company 'A; place sub contracting purchase order many times in a month to B by providing raw material for processing and company B (vendor) do all processing on raw material and return processed material to A .
Suppose vendor processed 100 Ton of material in a month against different orders and end of month, vendor submit a bill of operational cost to company A at month end. this bill contain cost as actual mean fuel consumed X1 amount as per market price, labor charge X2 amount as actual, water charge X3, electricity charge X4 etc... but these charges are purely actual. meaning of as actual is same charges as expend by vendor A in produce of finish good.
Now every month per tonnage conversion charge vary and same actual charges are submitted to company A by vendor.
Now how this scenario will be fit in sap where as actual cost need to be expended out and this cost is not known at the time of SC Order creation then how sc order will be create when conversion charge is not known.
client also want to book these operational(conversion) cost on processed material.
Regards
Mohit

Hi Suresh,
I guess you can accomplish this using SAVE_DOCUMENT_PREPARE in MV45AFZZ. In table xvbap you will find all order items with an update indicator. If an item has indicator 'D' (deleted) and field GRKOR (delivery group) filled you should find the corresponding FREIGHT line having the same value for GRKOR. Then find the remaining non-FREIGHT item with the earliest material availability date and set the value of GRKOR for this item to the same value as the FREIGHT item.
Regards,
John.

Error while releasing Billing document in Subcontract process

Hi All,
We are working on Subcontract process as explained below:
Company code X purchases the component A and sends it to Company code Y on Subcontract. Company codes X and Y belongs to one company using single operative chart of Accounts, Controlling area & operating concern. FI configuration has been maintained in OBYA by treating above company codes Inter company GLs. The component A is sent to company code Y as non value added item. Through 501 movement type, as the component is sent by Company code X.
Company code Y will add some components (like B,C and charges some expenses as service component D for preparing Finished good) and send this FG to Company code X. For this company code Y will raise a Sales order and followed by MRP run and Production order is created.
In VA02 of above Sales Order, while entering Item details, where the Settlement rule is asking for PA Transfer structure (in Account assignment tab of Item details) and giving the following error analysis:
Enter a PA transfer structure
Message no. KD 044
Diagnosis
A PA transfer structure is required for settlement to profitability analysis.
System Response
You cannot save this settlement rule.
Procedure
Enter a PA transfer structure. To do this, choose the "Parameters" function in the settlement rule. As part of customizing, you can also store a default value for the PA analysis structure, in the settlement profile. The system then uses this default value when you enter a settlement rule.
In addition to above, another issue has raised while releasing the Billing document after doing PGI. Accounting document is not getting generated and while releasing the Billing document (VF02) it is throwing an error as
Enter profitability segment as cost object for Revenue and COGS posting
Message no. ZC 001.
MM,PP,SD & FICO configuration settings maintained:
1. All required OBYC settings
2. All cost element and Cost element categories have been maintained
3. From MM side the system is generating FI & CO documents
4. Settlement profile in Production Order type is maintained (in KOT2). Allocation structure and PA transfer structure were maintained in (OK06, OK07 & KEI1). In PA transfer structure we have assigned the required Sources and Value fields and settlement cost elements.
5. In VKOA condition types KOFI and KOFK were maintained for relevant Customer & Material Account Assignment groups.
6. Required settings have maintained in OKB9.
Movement types 501 (sub contract), Received back to Company code X through Movement type 101. In spite of these settings still we are getting the above mentioned errors.
Could any one help to provide some inputs on the above issue as early as possible.
Thanks in advance.

Hi,
check in the sales order line item procurement tab . u can get the requirement type. in SPRo check the requiremnt class for the requirement type. in that requirement clas u will get settrlemnt profile for the sales order. Check that settlemnt profile there u have to maintain the PA transfer structure.
I think both problem will get solved by maintaing the PA structure..
You are doing sales order costing right....and i hope it is non vsaluated sales order costing .....
If help ful please assign points.
cheers
Prabhat

Subcontracting PO charges

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