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SAP ERP Financials: ERP PostImplementation Challenges – Part2 Reconciling GL, Raw MaterialConsumption, Finished/Semi FinishedMaterial Production, Vendor Invoice

Posted by Ranjit John 02-Apr-2012

In my previous blog "ERP Post Implementation Challenges’ - Part 1" I have explained the concept of COGM,

COGS and deriving the closing stock. In this blog I will be concentrating on the Reconciling GL, Raw Material

Consumption, Semi Finished / Finished Goods Production and Vendor Invoice.

Let me divide the topic into;

Reconciliation 1:

Opening Stock + Raw Material Receipt - Raw Material Consumed = Raw Material Closing Stock

Reconciliation 2:

Receipt of Raw Material = Invoice received from Vendor

Reconciliation 3:

Raw Material Consumed = Raw Material Issued for the Production of Finished Good

= Raw Material Consumption GL

Reconciliation 4:

Raw Material Closing Stock = Stock GL of Raw Material

Now let us analyze each scenario;

Reconciliation 1: Opening Stock + Raw Material Receipt - Raw Material Consumed = Raw Material

Closing Stock

As explained in my Previous Blog "ERP Post Implementation Challenges’ - Part 1" all material movements

should be considered for calculating the closing stock of material.

Reconciliation2: Receipt of Raw Material = Invoice received from Vendor

The Raw Material received should be matching with the invoice received from the vendors. I have done

quite a lot of research to generate report on the list of invoices received against a material.

Material Receipt (MB5B) with movement type 101+102 = Stock GL of Raw Material + Price Diff GL of Raw

Material with Type "WE"

To find the list of Invoice generated against the Raw Material:

There can be invoice and Credit/Debit notes posted against the material.

To generate Invoice list generated against the material:

We have to combine few tables for generating the report.

Execute SQVI and create a query with the following data.

Tables: RBKP, RSEG, LFA1

Joining Condition:

Tables RBKP-RSEG -> Joining Fields BELNR,GJAHR

Tables RBKP-LFA1 -> Joining Fields LIFNR

SAP ERP Financials: ERP Post Implementation Challenges – Part 2 Reconciling GL, Raw MaterialConsumption, Finished/Semi Finished Material Production, Vendor Invoice

Generated by Jive on 2014-12-07+01:002

Figure 1.0

Figure 2.0

To generate Credit Note / Debit Note list generated against the material:

We have to combine few tables for generating the report.

Execute SQVI and create a query with the following data.

Tables: RBKP, RBMA, LFA1

Joining Condition:

Tables RBKP-RBMA -> Joining Fields BELNR,GJAHR

SAP ERP Financials: ERP Post Implementation Challenges – Part 2 Reconciling GL, Raw MaterialConsumption, Finished/Semi Finished Material Production, Vendor Invoice

Generated by Jive on 2014-12-07+01:003

Tables RBKP-LFA1 -> Joining Fields LIFNR

Figure 3.0

SAP ERP Financials: ERP Post Implementation Challenges – Part 2 Reconciling GL, Raw MaterialConsumption, Finished/Semi Finished Material Production, Vendor Invoice

Generated by Jive on 2014-12-07+01:004

Figure 4.0

Debit / Credit will be recorded as "S" or "H"

Reconciliation 3: Raw Material Consumed = Raw Material Issued for the Production of Finished Good =

Raw Material Consumption GL

Raw Material will be consumed for the production of Semi / Finished Good, which will be created against

Process Order. The total raw material consumed against a process order can be generated from transaction

code KOB1.

Let me explain with an example:

Raw Material 1 (RM1) is used for the production of three Finished Good (FG1, FG2, FG3)

Material Process Orders Quantity Produced

FG1 10000035 67,981.00

FG2 11000035 343,842.00

FG3 12000035 61,601.00

Total Raw Material RM1 issued during the period is 106,136.00 TO. This is the quantity used for then

production of 473,424.00 TO of FG1, FG2, FG3.

Figure 5.0

Table 1.0

(Report from MB51 movement Type 101 + 102)

From transaction KOB1 we will be able to equate the Finished Good Produced and Raw Material Consumed

quantity.

SAP ERP Financials: ERP Post Implementation Challenges – Part 2 Reconciling GL, Raw MaterialConsumption, Finished/Semi Finished Material Production, Vendor Invoice

Generated by Jive on 2014-12-07+01:005

Figure 6.0

Figure 7.0

Raw Material (RM1) Consumption GL should be updated with the value of 1,061,360.00

(Report from FBL3N Raw Material (RM1) Consumption GL + Raw Material (RM1) Price Difference GL)

SAP ERP Financials: ERP Post Implementation Challenges – Part 2 Reconciling GL, Raw MaterialConsumption, Finished/Semi Finished Material Production, Vendor Invoice

Generated by Jive on 2014-12-07+01:006

Fugure 8.0

GL Entries Posted During the Process;

Raw Material Consumed for Production of Finished Good

Reconciliation 4: Closing Stock = Stock GL of Material

Generate Closing Stock report for Material from MB5B

Figure 9.0

Stock Report of Material From FBL3N

Figure 10.0

Generally We can reconcile opening, receipt, issue Closing by inputting values in the table listed below;

Material Opening0 Qty Mat

Receipt

(101+102)

Price

Revaluvation

MIR7 Issue

To

Production

Order

261 +

262

Issue

To

Cost

Center

201 +

202

Physical

Inventory

Posting

GL

Consumption

Sales Closing

A B C D E F G H I J K

FG1 A B C D E F G H D+E+F+G+H

J (A+B+C+D)- (F+G+H+J)

1,683,916.8054,700.537,539,313.34256,027.28670.28 7,543,679.840.00 0.00 7,800,377.40161,430.241,828,847.87

Table 2.0

0 Quantity - Execute Transaction MB5B. Sort Based on Movement Type

0 Quantity Included Price Revaluation & MIR7 entries

0 Qty of FG1 Entry:

SAP ERP Financials: ERP Post Implementation Challenges – Part 2 Reconciling GL, Raw MaterialConsumption, Finished/Semi Finished Material Production, Vendor Invoice

Generated by Jive on 2014-12-07+01:007

0 Qty Other = 54,700.53 +

Price Revaluation = 256,027.28

0 Qty -> 310,727.81

Figure 11.0

Debit Credit

Raw Material Consumption XXX

Stock of Raw Material XXX

Stock of Finished Good 1 (FG1) XXX

COGM of Finished Good 1 (FG1) XXX

Table 3.0

Important Transaction Codes:

Transaction Code Description

MB5B Material Report

MB51 Material Report

FBL3N GL Report

FBL1N Vendor Report

KOB1 Production Report

MCBE Material Report

MC.A Material Report

MC+E Sales Report

SQVI Dynamic Query

Table 4.06741 Views Tags: financial_excellence, public_sector, mill_products, enterprise_resource_planning,sap_erp_financials

Ranjit John07-Dec-2014 14:31

Happy to know that my efforts helped.

SAP ERP Financials: ERP Post Implementation Challenges – Part 2 Reconciling GL, Raw MaterialConsumption, Finished/Semi Finished Material Production, Vendor Invoice

Generated by Jive on 2014-12-07+01:008

Abhijeet More28-May-2014 10:17

Hello Ranjit,

Thanks for the effort Ranjith .

Lakshmi Sama07-Jan-2014 12:39

Hello Ranjit,

Thanks for sharing such a nice document. Your efforts are appreciatable and keep sharing

Regards,

Lakshmi S

Ranjit John20-Dec-2013 15:43

Thanks

Ikram hazari18-Jul-2013 22:49

excellent post, thanks for sharing

padmaja gan24-Sep-2012 15:04

Dear Ranjit,

Thank you for sharing very helpful document, I am learning a lot!

Thanks,

Padmaja

Ranjit John21-Sep-2012 06:59

Thank you. Thanks for the inspiration and support.

Regards

Ranjit Simon John

SAP FICO SAP FICO10-Sep-2012 16:43

Hi Ranjeet,

I read all your articles...its really good---- sharing good information.. thax a lot yaar

Rehman Ahmed Siddiqui03-Aug-2012 11:47

SAP ERP Financials: ERP Post Implementation Challenges – Part 2 Reconciling GL, Raw MaterialConsumption, Finished/Semi Finished Material Production, Vendor Invoice

Generated by Jive on 2014-12-07+01:009

Great job Ranjit.....

RAHEEM BAKSH28-May-2012 13:37

Hi Ranjit,

Thanks for Excellent work

SAP FICO SAP FICO25-May-2012 09:26

hi Ranjith,

it is excellent----- great efforts--- thanks a lot

Robert Miranda10-May-2012 13:56

Hi Ranjit,

Coming from a non-FICO consultant this is awesome. Good one and best of luck.

Robert Miranda

Aberdeen, Scotland

Ranjit John in response to Hari Reddy on page 908-May-2012 12:00

Thank you Hari, without Your support and help it would have been too difficult.

Hari Reddy08-May-2012 11:58

Hello Ranjit,

Excellent work done by you. I know that it was very difficult for you in the beginning since you are not from

Finance background.

Keep up the good work and hope to meet you again the near future.

Regards,

Hari

SAP FICO SAP FICO26-Apr-2012 06:49

Great efforts, thanks a lot

RaJAN

Ihsen ABROUG20-Apr-2012 15:22

Very good post

Thanks for your effort

SAP ERP Financials: ERP Post Implementation Challenges – Part 2 Reconciling GL, Raw MaterialConsumption, Finished/Semi Finished Material Production, Vendor Invoice

Generated by Jive on 2014-12-07+01:0010

Ranjit John in response to Murali Babu Nallamothu on page 1018-Apr-2012 18:07

Thank You Murali

Murali Babu Nallamothu18-Apr-2012 15:07

Dear Ranjit,

Thanks for your efforts and your useful document.

Rgds

Murali. N

Ranjit John in response to KTP RAO on page 1004-Apr-2012 09:37

Thank You Rao.

KTP RAO04-Apr-2012 09:25

Hi

This is really good. I went through your Part 1 document now one more document i.e., part 2 in detail.

Thanks for your great efforts..... This really help to better understanding the concepts.

I will go through your document and let you know if any.

Superb............

Regards

Rao