SAP ERP Financials: ERP Post

Implementation Challenges Part

2 Reconciling GL, Raw Material
Consumption, Finished/Semi Finished
Material Production, Vendor Invoice
Posted by Ranjit John 02-Apr-2012
In my previous blog "ERP Post Implementation Challenges - Part 1" I have explained the concept of COGM,
COGS and deriving the closing stock. In this blog I will be concentrating on the Reconciling GL, Raw Material
Consumption, Semi Finished / Finished Goods Production and Vendor Invoice.
Let me divide the topic into;
Reconciliation 1:
Opening Stock + Raw Material Receipt - Raw Material Consumed = Raw Material Closing Stock
Reconciliation 2:
Receipt of Raw Material = Invoice received from Vendor
Reconciliation 3:
Raw Material Consumed = Raw Material Issued for the Production of Finished Good
= Raw Material Consumption GL
Reconciliation 4:
Raw Material Closing Stock = Stock GL of Raw Material
Now let us analyze each scenario;
Reconciliation 1: Opening Stock + Raw Material Receipt - Raw Material Consumed = Raw Material
Closing Stock
As explained in my Previous Blog "ERP Post Implementation Challenges - Part 1" all material movements
should be considered for calculating the closing stock of material.
Reconciliation2: Receipt of Raw Material = Invoice received from Vendor
The Raw Material received should be matching with the invoice received from the vendors. I have done
quite a lot of research to generate report on the list of invoices received against a material.
Material Receipt (MB5B) with movement type 101+102 = Stock GL of Raw Material + Price Diff GL of Raw
Material with Type "WE"
To find the list of Invoice generated against the Raw Material:
There can be invoice and Credit/Debit notes posted against the material.
To generate Invoice list generated against the material:
We have to combine few tables for generating the report.
Execute SQVI and create a query with the following data.
Tables: RBKP, RSEG, LFA1
Joining Condition:
Tables RBKP-RSEG -> Joining Fields BELNR,GJAHR
Tables RBKP-LFA1 -> Joining Fields LIFNR

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SAP ERP Financials: ERP Post Implementation Challenges Part 2 Reconciling GL, Raw Material
Consumption, Finished/Semi Finished Material Production, Vendor Invoice

Figure 1.0

Figure 2.0
To generate Credit Note / Debit Note list generated against the material:
We have to combine few tables for generating the report.
Execute SQVI and create a query with the following data.
Tables: RBKP, RBMA, LFA1
Joining Condition:
Tables RBKP-RBMA -> Joining Fields BELNR,GJAHR

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SAP ERP Financials: ERP Post Implementation Challenges Part 2 Reconciling GL, Raw Material
Consumption, Finished/Semi Finished Material Production, Vendor Invoice
Tables RBKP-LFA1 -> Joining Fields LIFNR

Figure 3.0

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SAP ERP Financials: ERP Post Implementation Challenges Part 2 Reconciling GL, Raw Material
Consumption, Finished/Semi Finished Material Production, Vendor Invoice
Figure 4.0
Debit / Credit will be recorded as "S" or "H"
Reconciliation 3: Raw Material Consumed = Raw Material Issued for the Production of Finished Good =
Raw Material Consumption GL
Raw Material will be consumed for the production of Semi / Finished Good, which will be created against
Process Order. The total raw material consumed against a process order can be generated from transaction
code KOB1.
Let me explain with an example:
Raw Material 1 (RM1) is used for the production of three Finished Good (FG1, FG2, FG3)
Material

Process Orders

Quantity Produced

FG1

10000035

67,981.00

FG2

11000035

343,842.00

FG3

12000035

61,601.00

Total Raw Material RM1 issued during the period is 106,136.00 TO. This is the quantity used for then
production of 473,424.00 TO of FG1, FG2, FG3.

Figure 5.0
Table 1.0
(Report from MB51 movement Type 101 + 102)
From transaction KOB1 we will be able to equate the Finished Good Produced and Raw Material Consumed
quantity.

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SAP ERP Financials: ERP Post Implementation Challenges Part 2 Reconciling GL, Raw Material
Consumption, Finished/Semi Finished Material Production, Vendor Invoice

Figure 6.0

Figure 7.0
Raw Material (RM1) Consumption GL should be updated with the value of 1,061,360.00
(Report from FBL3N Raw Material (RM1) Consumption GL + Raw Material (RM1) Price Difference GL)

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SAP ERP Financials: ERP Post Implementation Challenges Part 2 Reconciling GL, Raw Material
Consumption, Finished/Semi Finished Material Production, Vendor Invoice

Fugure 8.0
GL Entries Posted During the Process;
Raw Material Consumed for Production of Finished Good
Reconciliation 4: Closing Stock = Stock GL of Material
Generate Closing Stock report for Material from MB5B

Figure 9.0
Stock Report of Material From FBL3N

Figure 10.0
Generally We can reconcile opening, receipt, issue Closing by inputting values in the table listed below;
Material Opening0 Qty

FG1

Mat
Price
MIR7
Receipt Revaluvation
(101+102)

Issue
Issue
Physical GL
Sales
To
To
InventoryConsumption
Production
Cost
Posting
Order Center
261 +
201 +
262
202

Closing

D+E+F J
+G+H

0.00

7,800,377.40
161,430.24
1,828,847.87

1,683,916.80
54,700.537,539,313.34
256,027.28
670.28

7,543,679.84
0.00

(A+B
+C+D)
- (F+G
+H+J)

Table 2.0
0 Quantity - Execute Transaction MB5B. Sort Based on Movement Type
0 Quantity Included Price Revaluation & MIR7 entries
0 Qty of FG1 Entry:

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SAP ERP Financials: ERP Post Implementation Challenges Part 2 Reconciling GL, Raw Material
Consumption, Finished/Semi Finished Material Production, Vendor Invoice
0 Qty Other
= 54,700.53 +
Price Revaluation = 256,027.28
0 Qty
-> 310,727.81

Figure 11.0
Debit
Raw Material Consumption

Credit

XXX

Stock of Raw Material

Stock of Finished Good 1 (FG1)

XXX
XXX

COGM of Finished Good 1 (FG1)

XXX

Table 3.0
Important Transaction Codes:
Transaction Code

Description

MB5B

Material Report

MB51

Material Report

FBL3N

GL Report

FBL1N

Vendor Report

KOB1

Production Report

MCBE

Material Report

MC.A

Material Report

MC+E

Sales Report

SQVI

Dynamic Query

Table 4.0
6741 Views Tags: financial_excellence, public_sector, mill_products, enterprise_resource_planning,
sap_erp_financials

Ranjit John
07-Dec-2014 14:31
Happy to know that my efforts helped.

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SAP ERP Financials: ERP Post Implementation Challenges Part 2 Reconciling GL, Raw Material
Consumption, Finished/Semi Finished Material Production, Vendor Invoice
Abhijeet More
28-May-2014 10:17
Hello Ranjit,
Thanks for the effort Ranjith .
Lakshmi Sama
07-Jan-2014 12:39
Hello Ranjit,

Thanks for sharing such a nice document. Your efforts are appreciatable

and keep sharing

Regards,
Lakshmi S
Ranjit John
20-Dec-2013 15:43
Thanks
Ikram hazari
18-Jul-2013 22:49
excellent post, thanks for sharing
padmaja gan
24-Sep-2012 15:04
Dear Ranjit,
Thank you for sharing very helpful document, I am learning a lot!
Thanks,
Padmaja
Ranjit John
21-Sep-2012 06:59
Thank you. Thanks for the inspiration and support.
Regards
Ranjit Simon John
SAP FICO SAP FICO
10-Sep-2012 16:43
Hi Ranjeet,
I read all your articles...its really good---- sharing good information.. thax a lot yaar
Rehman Ahmed Siddiqui
03-Aug-2012 11:47

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SAP ERP Financials: ERP Post Implementation Challenges Part 2 Reconciling GL, Raw Material
Consumption, Finished/Semi Finished Material Production, Vendor Invoice
Great job Ranjit.....
RAHEEM BAKSH
28-May-2012 13:37
Hi Ranjit,
Thanks for Excellent work
SAP FICO SAP FICO
25-May-2012 09:26
hi Ranjith,
it is excellent----- great efforts--- thanks a lot
Robert Miranda
10-May-2012 13:56
Hi Ranjit,
Coming from a non-FICO consultant this is awesome. Good one and best of luck.
Robert Miranda
Aberdeen, Scotland
Ranjit John in response to Hari Reddy on page 9
08-May-2012 12:00
Thank you Hari, without Your support and help it would have been too difficult.
Hari Reddy
08-May-2012 11:58
Hello Ranjit,
Excellent work done by you. I know that it was very difficult for you in the beginning since you are not from
Finance background.
Keep up the good work and hope to meet you again the near future.
Regards,
Hari
SAP FICO SAP FICO
26-Apr-2012 06:49
Great efforts, thanks a lot
RaJAN
Ihsen ABROUG
20-Apr-2012 15:22
Very good post
Thanks for your effort

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SAP ERP Financials: ERP Post Implementation Challenges Part 2 Reconciling GL, Raw Material
Consumption, Finished/Semi Finished Material Production, Vendor Invoice
Ranjit John in response to Murali Babu Nallamothu on page 10
18-Apr-2012 18:07
Thank You Murali
Murali Babu Nallamothu
18-Apr-2012 15:07
Dear Ranjit,
Thanks for your efforts and your useful document.
Rgds
Murali. N
Ranjit John in response to KTP RAO on page 10
04-Apr-2012 09:37
Thank You Rao.
KTP RAO
04-Apr-2012 09:25
Hi
This is really good. I went through your Part 1 document now one more document i.e., part 2 in detail.
Thanks for your great efforts..... This really help to better understanding the concepts.
I will go through your document and let you know if any.
Superb............
Regards
Rao

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