Subcontracting Material Valuated/Non Valuated

[subhadeep_das]

Hi,

In subcontracting process, I understand the customer will have a value of material showing in their register while the subcontractor will have the physical quantity of material in hand but without valuation (ie: Non valuated) .

My client has this specific requirement that they want the material to be valuated with the subcontractor as well. is there any such solution  to this ? I am a FI person, hence I am not able to understand how can anybody show stock of same material in both the balance sheet of two companies.

As per client they otherwise face excise related problems, the excise people ask for the assessable value for those goods also which are received for subcontracting. My client is both customer and the subcontractor also in here.

best regds

Subha

[former_member184536]

Hi

Material Assessable value is maintained in J1ID to declare or printing in subcontracting challan.

So it is not mandatory to create as valuated material.

Consult you MM guy.

regards

Manish

[subhadeep_das]

Hi Manish,

thank you for replying to me, can you elaborate this a little more so that I can do a little sandbox on this issue ?

best regds

Subha

[former_member192897]

Are you sending the Material for Job work or Subcontracting process to another company code? What is the issue in this process?

Subcontracting process includes Creation of a Subcontracting challan in Parent Company code using J1IF01 with reference to Transfer posting document provided if the Material is Excisable. You need to maintain Material Accessible value for Components in J1ID under node Maintain Accessible Value. This will be used while reversing the Excise duty portion provided Material is not returned with in the specified period.

[binoy_vargis1]

Are you saying that your plant itself is doing subcontracting for you. We have dealt with a similar issue. I will elaborate once you give a clear picture.

Regards

Binoy

[subhadeep_das]

Hi Binoy,

my situation is that client have two companies, parent and subsidiary. The subsidiary unit sends the material to parent company under subcontracting. now the kind of material sent for processing under subcontracting is very homogeneous and cannot be separately quantified. So at parent plant, all the stocks get mixed and after processing only, they deliver back as per product specifications and quantity. Thats why at parent company they want the RM stock to be valuated even for those material which has been received for subcontracting. Now this is where I am unable to determine how the material can be valuated at two companies.

Ideally the subsidiary unit should have valuated material with zero quantity showing and in parent company it should be material quantity that should be showing with zero value  ie non valuated. Any help will be very appreciated.

best regds

Subha

[former_member192897]

Inter company Sales Process or Sub Contracting Process is exactly same as Normal sales and Purchase or Normal Subcontracting process.

In Sub Contracting Process, you normally create the Vendor in Supplying company code and create normal subcontracting PO using Item category "L" and Perform Stock transfer posting using ME2O / MIGO / MB1B. Stock will will be shown in Stock at Sub Contractor end until Goods receipt process is completed.

Once Receiving Company receives the Material, they can perform the Goods receipt using 501 Movement type. The Material in the Receiving company code must be valuated as the liability is still lying with Parent Company code until the Job work or Subcontracting process is completed.

That means, even though the Job work  / Sub contracting vendor belonging to your Sister concern Company, you can not have the Qty valuated in the Receiving company code.

If you want the Material to be valuated in Both Supplying and Receiving Company code, try checking the Stock transfer scenario. Once Sub Contracting or Job work is done in Receiving Company code, The stock of Parent Material can be transferred again to Supplying company code using Stock transfer process.

[former_member184536]

Hi  Subhadeep Das

It is subcontracting process.

1.Make Subcontracting PO for Subsidiary company(Create Subsidiay Company as Vendor).

2.Issue material to Vendor by t-code MB1B 541 movement type and post document.  

3. Create Challan 57FC wrt to material doc posted in step 2.TCODE J1IF01

4. Now subsidiary company will create non-valuated to receive material.

5. Material will be received as non valuated by movement type 501

6. Now subcontracting process will be done by subsidiary company. All process will be done on

non-valuated materials

7. Subsidiary will create sale order to charge subcon charges. It can be charge with help of non valuted material or service material.

8.  Comumption and subsidiary challan will be created by subsidiary company.

9. Parent company will receive material against purhcase order and while doing MIGO, will refer 57fc challan, consumption will be posted with movement type 543 and receving of parent material with movement type 101.

10. Reconciliation of challan wrt material doc posted above in J1IFQ.

11. Completion of challan in J1IF13

regards

Manish

[binoy_vargis1]

You can go with Non valuated material code in receiving company. The same material at a given point of time should not be valuated at two different plants ideally. We have done this scenario by automation .We will create a Non valuated PO and GR at receiving company once the 541 from sending company is saved.

Regards

Binoy