Accounting entries for subcontracting

[Former Member]

Dear Experts,

Please explain the accounting entries for subcontracting process in details.....

[former_member581212 · Accepted solution]

hi,

If Material has Price Control as "V" (MAP)

(BSX) Stock A/c of Assembly - Dr

(BSV) Change in Subcon Stock - Cr

(FRL) Subcontracting Charges - Dr

(WRX) GR/IR Clearing A/c - Cr

(BSX) Stock A/c of Components - Cr

(GBB-VBO) Consumption A/c of Components - Dr

If Material has Price Control as "S" (Std. Price)

If Material is having Price Control as "S" then Price Difference A/c will also in picture.

This depends on configuration; SPRO > MM > Inventory Management and Physical Inventory > Goods Receipt > Price Differences for Subcontract Orders at Goods Receipt

Price Differences for Subcontract Orders at Goods Receipt

In this step, you configure for each valuation area whether price differences are generated for a Subcontract order at the time of a goods receipt if the manufactured material is managed at standard price and the standard price varies from the receipt value (externally performed service + value of components + delivery costs).

Example

Finished product: $400 (value at standard price)

Subcontract order:

o Ext. service : $250

o Components : $100

Posting schema without price differences:

Stock account FERT : 400 +

Stock change : 400 -

GR/IR clearing acct : 250 -

External service acct : 250 +

Compon. stock account : 100 -

Consumption account : 100 +

Posting schema with price differences:

Stock account FERT : 400 +

Stock change : 350 -

Price difference : 50 -

GR/IR clearing acct : 250 -

External service acct : 250 +

Compon. stock account : 100 -

Consumption account : 100 +

And cost center is mandatory for subcontracting process

the accounts for the BSX FRL and GBB-VOB needs the cost elements

Regards

Priyanka.P

[Former Member · Accepted solution]

Hi Priyanka,

The entries which you had given happens at the time of Transfer posting????Please explain what are the entries happen during 541 and 101 for FG in both cases.

[former_member581212 · Accepted solution]

hi,

In 541:

Stock A/c of Assembly - Dr

Change in Subcon Stock - Cr

Subcontracting Charges - Cr.

GR/IR Clearing A/c - Cr

Stock A/c of Components - Dr.

Consumption A/c of Components - cr.

At 101 :

Stock A/c of Assembly - Cr.

Change in Subcon Stock - Dr.

Subcontracting Charges - Dr

GR/IR Clearing A/c - Dr.

Stock A/c of Components - Cr.

Consumption A/c of Components - Dr.

Hope it helps..

Regards

Priyanka.P

[Former Member · Accepted solution]

Hi Aritra

Please also remember that no accounting documents gets generated during MB1B and 541 transaction against the PO. It in only when we receive the material back against 101 the entries mentioned takes place and stock gets reduced and account postings happen.

Also sometimes if you have freight the key FRN also gets used.

Regards

Edited by: samuel mendis on Apr 29, 2009 6:34 AM

Edited by: samuel mendis on Apr 29, 2009 6:35 AM

[Former Member · Accepted solution]

Hi Priyanka,

R u sure about the accounting entries as u told which is as follows:-

In 541:

Stock A/c of Assembly - Dr

Change in Subcon Stock - Cr

Subcontracting Charges - Cr.

GR/IR Clearing A/c - Cr

Stock A/c of Components - Dr.

Consumption A/c of Components - cr.

At 101 :

Stock A/c of Assembly - Cr.

Change in Subcon Stock - Dr.

Subcontracting Charges - Dr

GR/IR Clearing A/c - Dr.

Stock A/c of Components - Cr.

Consumption A/c of Components - Dr.

[former_member581212 · Accepted solution]

hi,

Extermely sorry for my last post...

There will be no account entries at transfer posting 541..

While the account entries will be at 101 those are:

Unfinished product : +

Gr/IR : --

Cost of goods sold : --

Purchased services : +

Inv. raw material : --

Raw material consumption - +

Regards

Priyanka.P

[Former Member · Accepted solution]

Dear Priyanka,

As you told,

While the account entries will be at 101 those are:

Unfinished product : +

Gr/IR : --

Cost of goods sold : --

Purchased services : +

Inv. raw material : --

Raw material consumption - +

means, (BSX)Stock Acc of Assembly--Dr

(WRX)--Cr

(BSV)-Dr

(BSX)Stock Acc of Components-Cr

(VBO)-Dr

Then what about FRL and FRN ?Please clarify me

[former_member581212 · Accepted solution]

FRL will be debit (Because you pay for the subcontracting work done)and Freight will be credit(Because you send the material and need to get charges for the same...

Regards

Priyanka.P

[Former Member · Accepted solution]

Thanks a lot Priyanka...

I need a small favor from you regarding the Accounting entries for Imports

Please tell me the Accounting entries in case of imports at every stages imean

1.Entering Invoices for Bills of Entry

2.Capturing Excise Invoices for Bills of Entry

3.GR

4..Posting Excise Invoices

Edited by: ARITRA MUKHERJEE on May 15, 2009 7:26 AM

[Former Member · Accepted solution]

Hi

these are the accounting entries during Import

Import Procurement of Raw Material

During Customs Duty Clearing invoice

Custom Clearing Dr.

Custom Payable Cr

During Excise Invoice Credit

Cenvat Account Dr.

Custom Clearing Cr.

During Invoice Verification

GR/IR Clearing Dr.

Vendor Payable Cr.

with regards

shrinivas gangoor

[former_member405046 · Accepted solution]

Hi,

I want to add VAT component for Subcontracting vendor.

Can some body tell me the condition type to be used.

Gyanesh

[Former Member · Accepted solution]

Hi ,

May be coming in between but need clarification on Purchase account....

client wants to use the Purchase account instead of Inventory account.

As per SAP, while Goods receipt time, based on a/c determination Posting to inventory

Inventory A/c Dr

To GR/IR A/c Cr

As Client expecting

Purchase A/c Dr

To GR/IR A/c Cr

Main Three concerns

1. If I am using the Inventory account, how will I see my purchase?

2. As purchase Account capture my supplier bill amount but inventory is capture Supplier bill add with fright + Insurance +... hence same inventory value use to Goods Issue for production. Hence I need purchase account separately

3. Finally, Even he wants to show Balance sheet as Schedule IV.

Now I request is there any strong point to overcome and convince the client

Thanks

Anil

[former_member187989 · Accepted solution]

Raise your question as separate thread.

[Former Member · Accepted solution]

This message was moderated.

[Former Member]

Please explain the entries at the time of 541 and 101