Free goods cost

[cathy_liang]

Hello experts,

If the cost of free goods is not transferred to ordered goods (i.e. saleable goods), how to settle the cost of free goods?

For e.g. buy 10 pc of A then get extra 1 pc of A. This extra 1 pc of A is free of charge. When post goods issue in delivery, material doc & FI doc is generated for 11 pc of A. When billing, FI doc is generated for 10 pc of A only because the extra 1 pc is free of charge.

For this case, how to settle the cost for the extra 1 pc of A?

[ajaycwa1981 · Accepted solution]

Hi Cat

There can be multiple ways of handling this.. You would need to collaborate with your SD consultant

1. Add Sales Order item in your Sales order, where you enter 11 PC of the Product as the Qty

In the Pricing procedure, enter Base Price for 11 PC and Discount worth of 1 PC..

Remember that, in COPA, the COGS will be transferred only when you do billing.. So, if you do billing of 10 PC, the COGS of only 10 PC will go to COPA

2. Add 2 Sales order items as below

10 - Product A - 10 PC - Item Category  -  TAN

20 - Product A - 1 PC - Item Category - ZTAN

For the ZTAN you can call up a different pricing procedure which will have the discount condition type

May be there are few more ways of doing this.. I suggest you touch base with your SD guy

Br. Ajay M

[cathy_liang · Accepted solution]

Hi Ajay,

Thanks for your advice.

Currently I use way no. 2 mentioned in your reply. But price discount for free goods is not activated, i.e. no price condition type is configured for free goods.

For this case, material doc & FI doc are generated for free goods after post goods issue. While no FI doc for free goods after billing. You know, no price for free goods.

At this point, I wonder how FI deals with free goods cost. Please advise. Thanks.

[ajaycwa1981 · Accepted solution]

Hi

See, in this case, for the Free Goods - Only the Cost will post in FI upon PGI... There will be no revenue postings in FI for the Free Goods.. That's precisely the concept of Free Goods

However, if you have COPA, the Cost of Free Goods flows to COPA upon Billing.. COPA is not updated upon PGI.. Hence, in order to update the Cost of Free Goods to COPA, you must do billing for the same...

   You must ensure that the billing does not generate a receivable on the customer..
For this, you must mark the Item Catg (ZTAN) relevant for Billing and do billing with 100% discount

Note that if COPA is not implemented, you don't need to do billing for the Free Goods.. If the cost is posted in FI, that's where your process ideally ends'

Br. Ajay M