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FINANCIAL POSTINGS IN SUBCONTRACTING

former_member601500
Participant
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Hi,,,,,,,

can You explain in detail about the Financial Posting Entries for Sub-contracting Documents,

Regards

R.Kannan

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
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Subcontract Posting

Material Document

101 + Receive in the new Material after sub-contract

543 - Clear the quantity in Material Provision for Vendor

Accounting Document

Debit Inventory - New Part 150

Credit Inventory - Purchase Offset 150

Debit Service cost for sub-contract 50

Credit GR/IR - Inventory 50

Debit ROH - Material Consumed 100

Credit ROH - Material Consumed 100

Answers (1)

Answers (1)

Former Member
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Bala,

Basically, I think of it by breaking down the accounting entries into three sets of postings.

<u>For the finished goods you recieve:</u>-

- Debit BSX (FG stock account) with value of components (that you send to the subcontract vendor ) plus the subcontracting charges (that the vendor charges).

- Credit BSV (change in FG stock account) to balance out the above entry.

<u>For the components that you provide:</u>

- Credit BSX (Raw Material/Component Stock account) with the value of the components.

- Debit GBB/VBO (Raw Material/Component Consumption account) to offset the above entry.

<u>For charges payable to subcontract vendor:</u>

- Credit WRX (GR/IR clearing account) with the subcontracting charges.

- Debit FRL (Subcontract Service account) to offset the above entry.

These are general postings in a subcontracting process if the finished goods are MAP controlled. If they have standard price control, the difference if any (value of components plus subcontract charges minus the standard price in the material master) will additionally be posted to a price difference account (trans. event key PRD).

Hope you have a basic understanding of the automatic account determination functionality to get a full grasp of the financial GL account postings.

Hope this helps.

H Narayan