Accounting entries for subcontracting - MPVs

[Former Member]

Hi gurus!

Does anyone SELL components to their subcontractors?

If you do, what GL postings do you record at the moment of components GR at the subcon?

I studied "Subcontracting with chargeable components" model, but this one does not seem to fit to the scenario when OEM actually transfers ownership for components to it's subcontractor...

Please advise,

Mara

[Former Member · Accepted solution]

Please chk the link, you can get some help.

http://www.sdn.sap.com/irj/scn/go/portal/prtroot/docs/library/uuid/10d3b904-78b9-2c10-8186-9d317c8e1...

[Former Member · Accepted solution]

Thanks Kumar,

Do you know if accounting postings for "subcontracting with chargeable components" are different form that used for generic subcontracting?

What are GL postings for invoices issued to a subcontractor?

When does MPV consumption happen?

I am trying to understand if this process has any impact on the books or it just creates invoice documents without changing accounting records.

Thanks in advance!

Mara

[JL23 · Accepted solution]

Please follow this link to the docu SAP-Bibliothek

because in this link you can see the account documents in a bigger size than in the other link above.

This should clear your doubts. within this docu you will find many more links, e.g. to the normal subcontracting. You can then compare account postings between the  alternatives yourself.

Of course there are much more account postings if you bill your subcontractor for the components, as they are in addition to the normal subcontract postings.

[Former Member · Accepted solution]

Hi,

Yes the postings will be different some how. Plz chk the image

[Former Member]

Thanks Kumar! Would it be correct to assume that there is no BOM "back-flushing" for component consumption in "Subcontracting with chargeable components" model?

It looks like components costs are identified when component invoice is issued (BEFORE production cycle) - which is a big difference from a generic subcontracting where components costs are determined by BOM AFTER finished goods are received. What do you think?

[JL23]

Moderator message: we make an end here, the answer to your question is in point 5 in the documentation. You really need to read to the docu, it does not make much sense that we repeat the whole docu in the discussion.

[former_member183424]

Subcontracting with Chargeable Components is different process.

There are nothing workaround to sell component to subcontractor. In standard SAP process, you can sell something only to your customer. You can't sell anything to your vendor. You need to treat your vendor as customer (as it has to be created as customer master in your SAP system), only then you can do the normal sale process.

[Former Member]

Thanks for the response,

If we record component sales to subcon as regular sales the following issue arise:

The components sales would be posted as revenue - which is incorrect. We can't recognize component sales ones when they shipped to a subcon and a second time then they are sold to an end customer as a part of finished product value. Is there a way to prevent revenue recognition for component sales - what would the the correct GL account to post invoices for these components? What do you think?

Thanks

Mara