Cost Centre POs with Material Codes

[former_member218048]

Dears

When I analyze certain POs already posted in our system, it is seen that some POs are created with Account Assignment Category 'K' which is posting expenses to Cost Centre. Also in the same PO, Material Code is also entered which has a valuation class and GL account configured.

I hope the GL postings will have the preference from Acc Assignment Category used in PO i.e. 'K'.

Then what is the additional benefit if we put the Material Code also in the PO ?

[kamalkumar_biswas2 · Accepted solution]

Hi nikki

First of all what purpose this PO is created...is it mat procurement or service PO  ?

1. If mat procurement then mat code should be there...

2.If it is service PO...may  or may not materials because some service PO includes materials also.

[former_member218048 · Accepted solution]

Thanks for the inputs.

In some POs I find consumable materials.

Account Assignment Category = 'K'

Material Code = 200003

If it is a service PO, why it should have material code ? I think services are purely expenses.

[former_member198650]

Hi Nikki,

It will post to expense while you do GR. But the GR/IR account will be created based on material valuation class. If you have not maintained any material code, then it will hit GR/IR account which was maintained in OBYC for blank valuation class.

Regards,

Mukthar

[former_member218048]

Your reply is totally confusing me.

While making GR, it will post to Expense. Agreed because we have 'K' in PO.

Your comment that 'GR/IR account will be created based on material valuation class' is contradicting to your first comment.

Could you please put some light on that please ?

[kamalkumar_biswas2]

Hi nikki

You right...in service PO no question of GR because you are not asking for material to be supplied..it is service to be supplied..hence directly it will post to exp a/c linked to CCtr as assignment.

Sometimes we ask for services along with material also in our service contract putting a separate line item as material but whole cost will post as a service cost expense a/c

[former_member218048]

That means, even if Material Code is also there in a Service PO with Acc Assn Cat 'K', the GL posting will always happen in the 'expenses GL'.

Then what purpose is achieved putting the material code ? Just for reporting ?

[former_member218048]

As you said, the GL picked from blank valuation class, for all those POs with account assignment category 'K', the system selects the OBYC entry in GB B-VBR having blank valuation class and post to the GL. (Of course we do not have a valuation class as the PO is not related to a material or service code !). Right ?

[kamalkumar_biswas2]

Hi nikki

  Example

   Service PO for calibration of weighing machine

   item 01   Calibration charge                   100

   item 02   Small spare 0001                      10

   Total Service PO value                          110

Now when we enter the service sheet for raising invoice..we raise against 110 and will post to Exp a/c and also debit to CCtr 

   You will get detail report and analysis for future planning also and by including small items in your service PO can avoid stock carrying cost of that items. Si it's always better to define materials if it finds reasonable for future control otherwise no need

[kamalkumar_biswas2]

nikki

yes

[rajneesh_saxena]

Hi Nikki

Usually materials mentioned in service POs are non stock materials. Means for which we don't maintain any stock values, in such cases materials are directly consumed.

Regards

Rajneesh

[former_member189776]

Hi Saju,

I think there  is no extra benefits,only you can search PO with reference to Material code through standard report like ME2N, ME2M, ME2L etc.

Thanks,