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SETTLEMENT OF PROD ORDER

Former Member
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HI,

WHY WE NEED TO SETTLE THE PRODUCTION ORDER ? WHAT WE GET FROM THAT ?? IS IT NECESSARY ??

HOW WE SETTLE THE ORDER ??

Accepted Solutions (0)

Answers (4)

Answers (4)

Former Member
0 Kudos

Settlement is always necessary otherwise in FI account there will be mismatch between Debit and credit account.

Former Member
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simply it is settling the extra/less cost incurred in production.

example

Std cost of a product is 10 USD

You start producing this material. At the edn of production let us say the cost is 11 USD.

Now the extra 1 USD has to be settled to material or variance account/cost centre as the production order finally recibes the total cost = 0.

that is raw material cost and activity cost is 11

Product when we did GR cost booked is 10

Difference 1 USD

after the settle ment

that is raw material cost and activity cost is 11

Product when we did GR cost booked is 10

Settlement account 1

Difference 0 USD

Now you can close the order

former_member196398
Active Contributor
0 Kudos

Dhiraj,

Every order has Planned costs and because of some difference in the actuals there will be variance, this has to be settelled. If the order is not settelled, the order will have cost balance, and this will not allow the order to have CLSD or DLFL flag set.

Individual orders can be settled using transaction KO88 and collectively using CO88.

Regards,

Prasobh

former_member184627
Active Contributor
0 Kudos

Hi,

we use transaction ko88 or co88 for order settlement.

pl. refer,

http://www.sap-img.com/financial/what-is-production-order-settlement.htm

Regards,

Senthilkumar