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 Goods Receipts in Cost Object Controlling Locate this document in the navigation structure

Use

A goods receipt is a goods movement in Materials Management (MM) that transfers a product to the warehouse.

There are different types of goods receipts:

  • Goods receipt of an externally procured material with reference to a purchase order

  • Goods receipt of a material manufactured in-house with reference to a manufacturing order (production order or process order) or run schedule header

    There are two different cases:

    • The production order or process order is not assigned to a product cost collector:

      The manufacturing order is credited.

    • The production order, process order, or run schedule header is assigned to a product cost collector:

      The product cost collector is credited.

  • Goods receipt of a material manufactured in-house with reference to a product cost collector

A preliminary inventory valuation takes place with goods receipts to the make-to-stock inventory or to the valuated sales order stock. The inventory value in the material master is updated accordingly.

Prerequisites

You have specified which accounts are updated with the relevant goods movement in Customizing for Materials Management under Valuation and Account Assignment in Creating Automatic Postings . You link the following for a valuation area:

  • You link transaction key BSX (inventory posting) to a material stock account.

  • You link transaction key GBB (offsetting entry for inventory posting) to account modification AUF (goods receipts for orders with account assignment) and a plant activity account (inventory change).

Features

You enter a goods receipt for the manufacturing order or run schedule header. This goods receipt can be created automatically at the time of confirmation of the last operation in a manufacturing order or run schedule header.

Note Note

In repetitive manufacturing, all goods movements are entered in the Repetitive Manufacturing menu. In repetitive manufacturing, goods movements are not entered from the Materials Management menu.

End of the note.

If you deliver goods to the make-to-stock inventory or to the valuated sales order stock, the valuation takes place as follows:

  • With external procurement, material can be valuated either when the goods receipt is entered or when the invoice is received. If the material is valuated at the time of the goods receipt, this is a preliminary valuation using the net order price. If the invoice price is not the same as the net order price, the difference between the invoice price and the net order price is debited to inventory when the invoice is received.

  • For in-house manufacture, preliminary valuation takes place when the goods receipt is entered. The valuation is calculated by multiplying the quantity delivered to inventory by the price in the accounting view of the material’s master record. The price control specified in the accounting view determines which price is used to valuate the goods receipts:

    • If the price control indicator is S , the goods receipts are valuated at the standard priceof the material.

    • If the price control indicator is V , the goods receipts are valuated in accordance with the settings in Customizing:

      • In Product Cost by Period , you make this setting under   Simultaneous Costing   Define Goods Received Valuation for Order Delivery   .

      • In Product Cost by Order , you make this setting under Define Goods Received Valuation for Order Delivery .

The following discussion concentrates on goods receipts with in-house production.

When a goods receipt is posted for a manufacturing order or run schedule header, the following events take place:

  • The order or product cost collector is credited.

  • In Financial Accounting (FI), the inventory account is debited and the inventory change account is credited. A material document and an accounting document are generated.

The inventory valuation performed at the time of the goods receipt for the manufacturing order or product cost collector is a preliminary valuation.

The following postings are generated when you settle in the period-end closing process in Product Cost by Period or Product Cost by Order :

  • If valuation is at standard price, actual cost exceeds standard cost, and stock coverage is sufficient, the system debits the expense account (price differences) and credits the inventory change account ( see also : Example for Settlement with Stock Shortage ).

  • If valuation is made at standard price, actual cost is less than standard cost, and stock coverage is sufficient, the system debits the inventory change account and credits the revenue account (price differences).

    These postings ensure that the inventory is valuated at the standard price even after settlement of the variance.

  • If valuation is at moving average price and actual cost exceeds standard cost, the system debits the inventory account and credits the inventory change account.

  • If valuation is at moving average price and actual cost is less than standard cost, the system debits the inventory change account and credits the inventory account.

If there is a mixed cost estimate for the relevant material, the standard price is the mixed price.

The moving average price can change with each goods movement and when variances are settled at the end of the period.

If the controlling area currency differs from the company code currency, the system will update the value of the goods receipt in both currencies.

Automatic Goods Receipt

You can have the system automatically generate a goods receipt when the last operation is confirmed.

You need to have made the following settings:

  • With repetitive manufacturing, you specified in the repetitive manufacturing profile that an automatic goods receipt is to be generated when the actual data are entered for the last reporting point.

    You make this setting in Customizing for Product Cost by Period under   Simultaneous Costing   Check Control Data for Repetitive Manufacturing Profiles   .

  • With order-related production and process manufacturing, you specified in the control key of the routing that the last operation is a reporting point (repetitive manufacturing) or a milestone (order-related production and process manufacturing).

  • With order-related production and process manufacturing, you specified in the control key of the routing that an automatic goods receipt should be generated.

    Note Note

    If an additional operation follows a reporting point for which an automatic goods receipt is posted, the activities of that operation are no longer automatically posted.

    End of the note.
Goods Receipt and Backflush

When you post the goods receipt, you can backflush the input materials.

You can change the proposed material components and add others. The backflush uses the standard price or the moving average price (if the Actual Costing/Material Ledger component is not active) or the period price (if Actual Costing/Material Ledger is active) selected in accordance with the price control in the accounting view of the material’s master record.

You can change the proposed materials and quantities for the backflush.

Prerequisites for Backflush at Goods Receipt

Make the settings required for the automatic goods receipt (see above).

Also make the following additional settings:

Repetitive Manufacturing

You specify in the repetitive manufacturing profile with the indicator GR and GI that a simultaneous goods receipt / goods issue is to take place.

In repetitive manufacturing, you can create a reporting point backflush with an automatic goods receipt and simultaneous goods issue backflush. Make the required settings in Customizing in the repetitive manufacturing profile.

In repetitive manufacturing, the system explodes the current BOM for the material (the BOM specified for the posting date or the BOM specified on the basis of a revision level in the production version) to determine which material component usage is proposed.

You enter the goods receipt in the menu of Repetitive Manufacturing .

Example Example

You deliver 500 tons to stock for a run schedule header. The standard cost estimate for the product was created on the basis of 1000 tons. A reference time of 100 minutes to produce 1000 tons is assumed. To produce 500 tons, an activity allocation on the basis of 50 minutes is performed. The activity price for the activity type is EUR 20 per minute. The system updates actual costs of EUR 1000 to the product cost collector.

A backflush of 500 tons is posted on the basis of the current BOM. The system updates material costs of EUR 2000 to the product.

The standard price for the product is EUR 5 per ton. The goods receipt is valuated at EUR 2500. The system credits the product cost collector with EUR 2500. At the end of the period the remaining EUR 500 is settled to inventory.

End of the example.
Order-Related Production and Process Manufacturing

In order-related production and process manufacturing, you must specify in the operation of the routing that a backflush should be generated.

You specify in the control key of the last operation that an automatic goods receipt should be generated.

In order-related production and process manufacturing the system includes the BOM in the manufacturing order and includes the assignment of material components to operations.

Goods Receipt and Activity Allocation

In repetitive manufacturing, if you are not using reporting points you can specify in the repetitive manufacturing profile that an activity allocation should be performed when the goods receipt is entered.

When activities are posted, the system generates an internal activity allocation on the basis of the following information:

  • The activity quantity is determined on the basis of the quantity structure in the current standard cost estimate for the material produced, or in the preliminary cost estimate for the product cost collector. You can change the activity quantity manually.

  • The current price for each activity type is taken from Cost Center Accounting on the basis of a valuation variant. The valuation variant is determined through the costing variant for actual costs. The costing variant for actual costs is determined through the order type of the production cost collector.

Special Features of Production Cost Collectors for Individual Requirements Materials

If you are using a production cost collector for an individual requirements material, the production cost collector is always debited with all material costs and activity allocations, and credited with the standard price at the time of the goods receipt.

See also:

For information on the posting logic, see Cost Object Controlling from an Accounting Point of View .

For more information on material valuation at period prices, see Actual Costing/Material Ledger .

For more information on goods receipts and inventory management, refer to the documentation LO Materials Management.

For information on goods receipts for confirmations, refer to the documents LO-PP Production Orders - Confirmations and LO-PP Repetitive Manufacturing – Backflushing .

For information on the special requirements regarding product cost collectors in sales-order-related production, see:

For information on settlement, see Settlement in Product Cost by Order or Period .

For information on the recommended price control, see Basic Decisions in Cost Object Controlling .