Price in material master

Environment:
1. In order to calculate the appropriate and near actual cost for the sale order cost estimate the material master should reflect the actual cost whether the price control is V or S. It has been observed that the price in the material master in most of the cases has not been updated. 2. Even if the actual price is updated now, there is no possibility to get automatically updated during the course of transaction as the whole production order costing and inventory valuation is based on sale order stock. 3. Hence care has to be taken to update the cost periodically, most preferably once in three months to start with ,and on stabilization may be every monthMaterial Master price change.

Remedial measure:
1. Identify the materials with price of 1.00 or less and update the available actual price through MR21

Action Points:
1. Prepare the excel file with date identification and upload the price through an LSMW program, as the program has to be used in the future also

Responsibility:
IT dept will be responsible to complete the task as well as make sure for new materials the price is near to the actual.

Settlement of existing production orders

Environment:
1.The settlement of production order updates the price of the manufactured material if it is V or causes price difference if the price control is S. 2 . In order to enable settlement the status of the production order should be either TECO or DLV. 3. TECO has to be manually set in as soon as the order is complete but the delivery qty is not Equal to the order qty 4) DLV is automatically set by the system once the production order qty is fully delivered. 5) If any order is open for more than one calendar month then the WIP calculation has to be done to pass the entry in PL account reflecting the balance amount tin the production order. To carry on this WIP entry in FI the settlement has to be carried out.

Remedial measure:
1. Irrespective of the period in which the production has been completed, all closed/completed orders have to set as TECO or DLV as on date 2. The open orders has to be verified and validated properly and separate action will be taken to pass on the FI WIP entry

Action Points:
1. Execute the KOB1 report to identify the production orders which has balance on this date. 2. Each order has to be verified whether it is open at closed/complete 3. If the order is closed and TECO, then no action is needed 4. If the order is closed but it is not having the status TECO, then change the order quantity Equal to the delivered quantity 5. Execute KO88 and settle all the closed orders 6. Whatever the production order is open , then execute WIP calculation and then settle the Production order 7. If the configuration is not available, enable the WIP configuration and then execute Settlement for the open orders. 8. List of open production orders

Responsibility:
IT dept will be responsible to complete the task as well as make sure that all the production orders are properly set the status every month and WIP calculation also done for open orders before settlement. Shan will enable the necessary configuration for calculation of WIP. IT Dept will prepare the list of production orders open

Sale order cost estimate

Environment:
1. Sale order cost estimate can be done during the sale order creation as well as after creation also by selecting the re-cost mode 2 .Sale order cost estimate has to be validated for its accuracy as well as completeness 3. During verification it has been observed that the sale order cost estimate does not contain the Correct price of the procured materials, sub contracting charges for the sub contracted Materials, accurate plan price for the internal activity. 4. The Bill of material , the routing , the info record has to be maintained properly in order to reflect the accurate the cost of the material and sub contracting charges in the sale order cost estimate 5. If pre budget price is available before execution of sale order, the same could be maintained as plan price for the yarn, info record charges for the sub contracting charges. This will result in higher accuracy and control for the cost control of the sale order. 6. The actual cost of the sale order execution can be compared with the estimated cost periodically for better visibility and control

Remedial measure:
1. All manufactured materials should have correct BOM and routing 2. The sub contracting charges has been maintained in the Info record

Action Points:
1. Ensure the BOM and Routing is maintained properly and prepare a check list for the new Materials also. 2. Is it noted that updating of price in info record has not been enabled .This has to be enabled to get it reflected in the sale order cost estimate 3. Once the info record has been maintained, please ensure that the system considers the rate in the info record for the sale order cost estimate. 4. User manual has to be created to enable the users to follow the process steps correctly

Responsibility:
1. IT dept will be responsible to complete the task of updating the BOM and Routing 2. IT dept will be responsible to complete the task of updating the Sub contracting charges in the info record 3. Shan will check the correctness of the sale order cost estimate

7. Inventory valuation check perfectly. Action: After correcting the material price we will do physical inventory. 8. Account mapping for sub-contracting consumption. Action: Auditor should map the G/L accounts with valuation class. The Excel document has been prepared for the mapping of the GL account and the configuration has too be done directly in Production client IT dept is responsible for making the changes in the configuration 9. Posting the production related expenses to respective cost center. Action: In future we will follow. 10. Provisions should post at monthly once. Action: In future we will follow. 11. Checking the activity hours for cost center. 12. Calculation of actual activity price and revaluation of production order. 13. Profit center document to be created on internal dyeing activity. 14. Profit center substitution in sales order..