1 Reply Latest reply on Aug 14, 2008 1:07 PM by Chris Strahl

    SAP B1 - How to balance and or verify GL account for WIP

    Mary Ciesielski

      We have just finished our first month with SAP B1 and I am now trying to understand what reports need to be run to verify and or balance various GL accounts so any information is appreciated. I would like to be able to run reports for open items in WIP, inventory value and the RNI (received but not invoiced) accounts - all as of 7/31/08. With RNI report, it seems simple enough to run the Goods Receipt for POs, less any Goods Return for PO's and the net difference should be RNI - BUT I have just been advised that service type PO's and any items without a checkmark of "inventory" on the item master do not have any GL entry created at the time of receipt. So the dollars shown on these reports DO NOT support the RNI account in the GL. This seems really strange from an accounting control standpoint, that I have to run separate reports and then do General Journal Entries to really reflect what all of my oustanding liabilities are at month end.






      I do appreciate any feedback that can help me identify the proper reports. Currently I can balance my bank accounts, A/R and A/P - but need to be sure the three additional GL accounts listed above are correct as well







      Thank you







      Mary Ciesielski



      Office Manager - Western Engravers Supply, Inc.

        • 1. Re: SAP B1 - How to balance and or verify GL account for WIP
          Chris Strahl








          This whole post assumes that you're using WIP for production in SAP - not for job costing or anything like that. 






          That said, there isn't really a good WIP report that shows what has been issued to production orders.  You can use queries and such to come up with one, and then match it to your GL account, but there is no out of the box reprot that shows a WIP value with all the ins and outs.  That said, there is a sample XL reporter report available on the SAP portal site (your partner can show you where) that provides a true production WIP reconciliation.  If you're on the 2007 SAP system, be sure you get the updated one for that version. EDIT I actually found the report and attached it to this message.






          With regard to RNI - you are correct in saying that there is no accounting posting on a receipt if the item is not selected as inventory.  The check boxes in the upper right portion of the item master record state which sub-ledgers are applicable to a particular item.  The three sub-ledgers that are commonly used are AP, AR, and inventory.  If you don't have something checked as being an inventory item, SAP does not know what value to associate with it when you bring it into the system.  Keep in mind that SAP is a perpetual inventory system that uses a costing method of either FIFO, Moving Average, or Standard Cost, but none of these costs are actually tracked unless you're placing a quantity of that item into inventory.  Here is the general schema we follow:






          1.  Items marked as purchase only (AP sub-ledger) are items that are classed for GL expenses only (i.e. utility expenses, rent expenses, consumables)



          2.  Items marked as sales only (AR sub-ledger) are items that are services with no direct costs (i.e. consulting services, installation services, etc.)



          3.  Items marked as inventory only (inventory sub-ledger) are items that only exist as sub-assemblies that are created in-house.



          4.  Items marked as purchase and sales (AP and AR) are typically sub-contracted items (i.e. outside machining services, product finishing services, sub-contractor production)



          5.  Items marked as purchase and inventory (AP and Inventory) are sub-assembly items or consumables that are purchased and the value is tracked as part of a set of direct costs - as opposed to consumables tracked as part of indirect overhead costs.  These include packing materials, production kits, etc.



          6.  Items marked as sales and inventory (AR and inventory) are items that are produced but never purchased from a vendor (i.e. finished goods)



          7.  Items marked with all three (AR, AP, and inventory) are items that are purchased for resale, or raw materials that are also re-sold as parts.  This is the most common item time for distribution centers or service shops.  Some examples include replacement parts, tools, equipment sales, etc.



          Also, service documents ALWAYS ignore sub ledger entries and are ONLY directly posted to a single GL account for revenue and COS.  Additionally, as they aren't associated with items, they DO NOT appear on any sales or purchasing reports that gather item data (i.e. sales or purchase analysis).  Only in rare cases do I ever recommend that a client use a service document. 



          It sounds like you're doing RNI in a way that is outside the system, as you shouldn't be trying to journal in the value of  inventory and the RNI amounts.  This is somewhat dangerous as, unlike the AP and AR sub-ledgers, you're able to create direct journal entries to your inventory account.  This can cause a serious reconcilliation issue and cause inventory values and quantities within your reports to become inconsistent with the GL.  I'd recommend working with your partner to handle these RNI issues, as you could be unintentionally creating a real mes.  If you need to continue to purchase goods that will be placed in inventory (and carry a value), but not tracked by the system, I'd work on a process for that with a consultant that understands the implications of what that does in the system.  Otherwise, rather than journal entries, I'd attempt to solve the issue with some custom reporting.






          Hope that helps!