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HI Team,

This document will describe the WIP Calculation form the Project System.  Basically the Project System comes under the ETO Scenario i.e., MTO

Here I am not going to describe the Project Structure & I am straight way going to present the calculation part of the WIP Calculation.

For understanding better I am going to describe the example of requirement.

Requirement :  WIP Calcualtion based on the Qty Deliverable.  For Ex;  I have a WBS with 2 Qty Deliverable &  Cost occured for the respective WBS would be 1000/- till now.  Then the WIP would be Rs.5000/- for the first month of my WIP Calcuation.  In the 2nd month 1 Qty was delivered then the 2nd month end my WIP would be Rs.2,500/- ie., based on my deliverable Qty (Percentage of Completatioin (POC) Method)

1) Creation of Project : Creation of Project with the 2 WBS Elements in the 2nd level & 1 WBS Element would be the 1st level. All the  WBS elements should be activated with Account Assigment Category .  RA Key is the important key to calculate the WIP & it should be assigned to all the Delierable WBS Elements

For better understanding i have taking the WBS Structure like below :

Project Project A-0001 1st Level WBS 2nd Level WBS Acc *** Cat Billing Document RA Key
1st Level WBS A-0001 YES YES YES
2nd Level WBS A-0001-01 YES
A-0001-02 YES

2) Sales Order Creation : Sales Order Creation with 2 Qty with the WBS A-001 Account assignment & the revienue updates into respective WBS Elements & the same can be visiable in reports

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3) Planned Qty maintance  :  CJS2

Planned Qty should maintained with the SKF ABGMNG to calcualted the Qty based the WIP.  ABGMNG is the SAP standard SKF & the same should be use in this case.

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4) Expness booking to the respective WBS :     The cost booked into the 2 WBS elements through direct posting from FI.   Total Cost would be Rs.5000/-

CJI3 Report :

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5) Running the WIP KKA2 :  Running the WIP Calcualtion for the respective the WBS

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In above activity you can able to idenfity the Actual cost & WIP Amount.  You can also obser the POC % is 0.  This only stastical posting.  If every thing found correct then it should be saved.  In he next step it ll be update to the FI.

6) Rulling the Settlment CJ88 :  At the time of settlemtn sytem ll consider the WIP Amount which was calculated in the previous step & ll post to FI side.  The account document would be

WIP  Account A/C ( P & L A/C) Dr………….. 5000 ( This account shold not be cost elemeent & precation should be taken care at the time of this account)

WIP Account A/C  ( B /  S A/C)                   5000

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This is month end activity & the amout aupdated in FI books of accounts.  If suppose the coming moth 1 qty ll be delivered then the impact wouild be ..! let see.

7)1 Qty Deliverty from SD : VL01N :  Nothing to do in this step for this WIP Calcuation.

8) Maintain the Deliverable Qty KB31N : This is important point & needs to maintin the 1 Qty here then only  you ll get the impact on WIP Calcualtion.  Hence 1 Qty was delivered & the same 1 Qty has been maintaned here.

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9) WIP Calculation KKA2 :  Second month WBs caculation.  As per as the above requirement my my WIP would be 2500/- since 1 Qty was delivered (50% POC)

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Here you can find the WIP Amount Rs.2500/- & the WIP POC would be 50%.  If the calcualtion is correct then its required to save the WIP

10) Settlement CJ88 :  Here the amoutn 2500/- would be accounted as WIP.

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Its going on.., until unless the WBS status would be TECO or DLV.  Once its TECO or DLV then the entire WBS would be reversed.

I have shared only one insight on the WIP Calculation & there are several methods would be available on WIP Calcuations based on the client requirement.  I have not covered the RA Key configuration in this post.  Here you can find the WIP methods i.e.,  each & every method would have the different accounting impact.

WIP Methods are :

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Any suggestions or views would be appreciated.

Regards

Raj

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7 Comments

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  1. TIN DINH TRUNG

    Dear Raj,

    Thank for your sharing, POC here is cumulated by period so we could have COGS but there is no Revenue yet. How can we avoid this problem?

    Regards,

    Tin

    (0) 

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