ERP Post Implementation Challenges Part 2 Reconciling GL, Raw Material Consumption, Finished/Semi Finished Material Production, Vendor

r Invoice
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; 1: Opening Stock + Raw Material Receipt - Raw Material Consumed = Raw Material Closing Stock
Reconciliation

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

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 Tables RBKP-LFA1 -> Joining Fields LIFNR

Figure 3.0

Figure 4.0 Debit / Credit will be recorded as "S" or "H" 3: Raw Material Consumed = Raw Material Issued for the Production of Finished Good = Raw Material Consumption GL
Reconciliation

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 FG1 FG2 FG3 Process Orders 10000035 11000035 12000035 Quantity Produced 67,981.00 343,842.00 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.

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)

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;

Issu e Issue To To Physi Mat Cos Produc cal Receipt Price t GL Mate Openin MI tion Inven Cen 0 Qty Revalu Consu rial g R7 Order tory ter mption (101+1 vation Posti 02) ng 261 + 201 262 + 202 A FG1 A B B C C D D E E F F G G H H I D+E+F +G+H

Sales

Closin g

J J

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

1,683,9 54,70 7,539,3 256,027 670 7,543,6 0.00 0.00 16.80 0.53 13.34 .28 .28 79.84

7,800,37 161,43 1,828,8 7.40 0.24 47.87

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: 0 Qty Other = 54,700.53 +

Price Revaluation = 256,027.28 0 Qty -> 310,727.81

Figure 11.0 Debit Raw Material Consumption Stock of Raw Material Stock of Finished Good 1 (FG1) COGM of Finished Good 1 (FG1) Table 3.0 Important Transaction Codes: Transaction Code MB5B MB51 FBL3N FBL1N KOB1 MCBE MC.A MC+E SQVI Table 4.0 Material Report Material Report GL Report Vendor Report Production Report Material Report Material Report Sales Report Dynamic Query Description XXX XXX XXX XXX Credit