Complete Purchase Cycle Till FI
Let us go about purchase cycle:
A D V E R T I S E M E N T
1. Purchase Requistation : First Purchase requisation has to made to purchase
department wheever the product need by the user or production depaartment.They
are created by tcode me51k.
2. Once the purchase requested, then the purchase department will search for
the materail, where available and when available. That is called Material
determination.
3. After the search of material is over, then look for who are the parties ,
who is going to supplies the material in competitive rate. Then select the
correct vendor is known as material determination.
4. After that Tender process done through Tcode-ME41.
5. After finilisation of Tender, the vendor selected and purchase order
issued. The Creation of Purchase Order is ME21N. There will not be any finance
entry while creating the Purchase Order.
6. Once the purchase order issued, then by the terms of PO, the vendor will
supply the materials. The Receipt of Good (GR) , done through MIGO or if it is
an service entry done through ML81N.
The Entry will be
Inventory account - dr-
GR/IR Clearing a/c - cr-
Purchase a/c - dr-
Purchase offset a/c -cr-
GR/IR clearing is a intermediate account, will be used to connect cost and
vendor.
In GR/IR clearin a/c - 1. Assesable Value
2. Sales Tax
3. Surcharge
ie., Other than Cenvat Clearing will be there.
7. After the receipt of material, the Good Receipt along with Invoice Bill
submitted to the Excise person handling Central Excise matters, to take Credit
of duty for the product.
The entry will be
1. Cenvat Clearin a/c - cr
RG23a Part II a/c - dr
RG23a Part II cess a/c - dr.
8. From the Excise person , the bill move towards the person who passing the
bills for payment. He will do the Invoice Receip First through MIRO. Here two
document will be created, one for MM and one for FI.
The entry will be
Vendor a/c - Cr-
Gr/IR Clearing a/c - dr
Cenvat Clearing a/c- dr.
9. After finalisation of Invoice receipt, the bill is for Payment process
mode through F-53.
The entry will be
Vendor a/c - dr
Bank a/c - cr.
BOM Is Not Exploding In P.O.
While creating subcontract order, BOM is not exploding in P.O even though
we are maintaining BOM for end product. How to solve this problem?
Please check the following things :
1. In Material master MRP4 view - Field "Individual/Coll" should have value
"2" or "Blank" & In BOM (Transaction code CS03) item detail section - Field
"Explosion Type" should have value "LB" ("Individual/Coll" should have value
"2" or "Blank") .
2. PIR should have PIR Info category "3" , i.e., Subcontracting PIR must
available for header material which we receive back from subcontractor.
3. Special Procurement Key must be "30" in material master MRP2 View.
4. Purchasing Item Category must be "L" and production BOM must be
maintained, if you want to explode BOM in PO.
5. Please check BOM valid period is effective from in Tcode cs03
6. Please check your PO date against the valid date of the BOM valid period.
Where is Cost Derived When Doing Goods Receipt
Explain what are the cost account when doing the goods receipt. For
example when doing GR, system post as follows.
Dr Stock (is this the cost of sales?)
Cr GR/IR (what exactly is GR/IR)
and when do IV it post
Dr GR/IR
Cr Vendor etc.
Goods Receipts/Invoice Receipts for Purchase Order:
Transaction OMW1 allows you to set whether the Price Control is a mandatory "S"
or "V".
- V indicate that you want the system to value the stocks with the latest
price.
- S indicate that you want the system to value the stocks with a fixed price
method.
Price Control V - Moving Average Price
Assume Material Master current price is 10
Goods Receipts for Purchase Order - Movement Type 101
Material Document Posting created - inventory increases
Accounting Document Posting created
Debit 12345 Inventory 12
Credit 67890 GR/IR 12
New Moving Average Price = ( GR value + Total value ) / ( GR quantity + Total
stock )
Invoice Recipts for Purchase Order - MR01
Accounting Document Posting created
Debit 67890 GR/IR 12
Debit 12345 Inventory 3
Credit 45678 Vendor 15
New Moving Average Price = ( Inventory difference of 2 + Total value ) / (
Total Stock)
Price Control S - Standard Price
Material and Accounting Document is the same.
The one with the lower value will be posted with a price variance entry.
Goods Receipts for Purchase Order - Movement Type 101
Material Document Posting created - inventory increases
Accounting Document Posting created
Debit 12345 Inventory 10
Debit 23456 Price Variance 2
Credit 67890 GR/IR 12
No change in Standard Price
Invoice Recipts for Purchase Order - MR01
Accounting Document Posting created
Debit 67890 GR/IR 12
Debit 23456 Price Variance 3
Credit 45678 Vendor 15
NO change in standard price*
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