Introduction
The topic of the Stock in Transit is highly valuable especially in the business environment where import transactions occur and business needs to record these tractions, SAP GR/IR functionality provides solid basis to design the solution to cater the business requirement accordingly.
To record the STOCK IN TRANSIT transactions as period end activity closing entry is made and at start of next month reversal of the same entry is recorded in the system
Concept for Stock in Transit
Stock in transit refers to material and other types of inventory that have left the shipping port of the seller, but not yet reached to the buyer.
Accounting entry for Stock in Transit
Stock in Transit G/L Dr xxxx
Letter of Credit G/L Cr xxxx
To meet the requirement of audit under the head of current assets (b/s) the user will pass the above entry at the end of the month as it is the part of period closing activity.
Reversal of Accounting Entry
Letter of Credit Dr xxxx
Stock in Transit Cr xxxx
On the beginning of the next month user reverse the entry.
Transaction Keys in SAP:
In SAP we have two transaction keys;
1.BNG (Invoiced but not yet delivered)
2.GNB (Delivered but not yet Invoiced)
In standard we use three GLs to perform the process for BNG
Similar to that GNB is for the recording of liabilities;
Following points should be taken care for mapping GL accounts and process
Configurational Settings
Scenario
Now, let’s take an example of import Purchase Order to understand the process of stock in transit where ownership is transferred to the buyer as soon as the shipment depart from the seller side
Creation date for purchase order is 01.03.2020 for 85 Quantity PO is booked with the C& F amount and known planned & delivery costs.
On 29.06.2020 foreign vendor invoice isarrived received which is actually a C& F or other than the charges of port ,customs & clearings which are the local invoices will be catered through condition types on PO and then call them at the time of MIRO.
Accounting Entry for Invoiced Received in SAP
GR/IR Clearing A/c Dr xxxx
Foreign Vendor Cr xxxx
Now 30.06.2020 user wants to close the Trial Balance and want to record the Stock in Transit.
At this point of time the system will allow to post manual entry by using any GL entry t-code but it is better to record through system b/c there are bulk of invoices and for proper recording we should rely on system entries.
By running a process of GR/IR reclassification system will cub all the invoice received in one adjusting GL account and pass the below entry on date 30.06.2020 just to meet the audit requirement. (BNG) Invoiced but goods not delivered
Accounting Entry in SAP after executing the process
(BNG)Stock in Transit GL Dr xxxx
Adjusting Clearing A/c Cr xxxx
On 01.07.2020 system will automatically reverse it.
Adjusting Clearing A/c Dr xxxx
(BNG)Stock in Transit A/c Cr xxxx
Foreign vendor invoice which recorded on 29.06.2020 remain same and ready for payment it can be paid or hold for months as per the contract from the supplier and the local vendor invoices can also include and run in the process if something is paid locally before goods arrived.
Now, on 01.08.2020 when the goods are received,
System will pass the accounting entry as below;
Material Dr. xxxx
GR/IR clearing A/c Cr xxxx
Difference of dates appearing in the above entries showing goods transit period.
Conclusion
Process automation, integration with PO and comprehensive report make GR/IR Regrouping a cool functionally provided by SAP.
Okumaya devam et...
The topic of the Stock in Transit is highly valuable especially in the business environment where import transactions occur and business needs to record these tractions, SAP GR/IR functionality provides solid basis to design the solution to cater the business requirement accordingly.
To record the STOCK IN TRANSIT transactions as period end activity closing entry is made and at start of next month reversal of the same entry is recorded in the system
Concept for Stock in Transit
Stock in transit refers to material and other types of inventory that have left the shipping port of the seller, but not yet reached to the buyer.
Accounting entry for Stock in Transit
Stock in Transit G/L Dr xxxx
Letter of Credit G/L Cr xxxx
To meet the requirement of audit under the head of current assets (b/s) the user will pass the above entry at the end of the month as it is the part of period closing activity.
Reversal of Accounting Entry
Letter of Credit Dr xxxx
Stock in Transit Cr xxxx
On the beginning of the next month user reverse the entry.
Transaction Keys in SAP:
In SAP we have two transaction keys;
1.BNG (Invoiced but not yet delivered)
2.GNB (Delivered but not yet Invoiced)
In standard we use three GLs to perform the process for BNG
- Stock in Transit (BNG)
- Adjustment A/c
- Reconciliation A/c
Similar to that GNB is for the recording of liabilities;
- Adjustment A/c
- GNB Liability A/c
- Reconciliation A/c
Following points should be taken care for mapping GL accounts and process
- Clearing GLs are used in Regrouping and Reclassification process plus one adjustment a/c is also created from the group of clearing accounts.
- All condition types are mapped on Purchase Order
- All vendors’ liability is recorded with reference to Purchase Order
Configurational Settings
- Clearing GL accounts is to be mapped in WRX key in MM which is same for MIGO and MIRO. System club all the Un-delivered goods and Un-Delivered Invoices in one adjusting clearing GL from all the clearing GLs when execute the process of Regrouping/Reclassification.
- Clearing GL in WRX key are also used in regrouping and reclassification process and it should be open item manage else the running of the process will exclude the GLs.
- BNG Stock in transit account (invoiced but not yet delivered) should be from the head of current assets or from Inventories b/c stock in transit is the part of inventory.
- GNB (Liability) A/c should be from liability side.
- Adjustment a/c should be a balance sheet
- GR/IR would be the reconciling account and current asset account would be the targeted account
Scenario
Now, let’s take an example of import Purchase Order to understand the process of stock in transit where ownership is transferred to the buyer as soon as the shipment depart from the seller side
Creation date for purchase order is 01.03.2020 for 85 Quantity PO is booked with the C& F amount and known planned & delivery costs.
On 29.06.2020 foreign vendor invoice is
Accounting Entry for Invoiced Received in SAP
GR/IR Clearing A/c Dr xxxx
Foreign Vendor Cr xxxx
Now 30.06.2020 user wants to close the Trial Balance and want to record the Stock in Transit.
At this point of time the system will allow to post manual entry by using any GL entry t-code but it is better to record through system b/c there are bulk of invoices and for proper recording we should rely on system entries.
By running a process of GR/IR reclassification system will cub all the invoice received in one adjusting GL account and pass the below entry on date 30.06.2020 just to meet the audit requirement. (BNG) Invoiced but goods not delivered
Accounting Entry in SAP after executing the process
(BNG)Stock in Transit GL Dr xxxx
Adjusting Clearing A/c Cr xxxx
On 01.07.2020 system will automatically reverse it.
Adjusting Clearing A/c Dr xxxx
(BNG)Stock in Transit A/c Cr xxxx
Foreign vendor invoice which recorded on 29.06.2020 remain same and ready for payment it can be paid or hold for months as per the contract from the supplier and the local vendor invoices can also include and run in the process if something is paid locally before goods arrived.
Now, on 01.08.2020 when the goods are received,
System will pass the accounting entry as below;
Material Dr. xxxx
GR/IR clearing A/c Cr xxxx
Difference of dates appearing in the above entries showing goods transit period.
Conclusion
Process automation, integration with PO and comprehensive report make GR/IR Regrouping a cool functionally provided by SAP.
Okumaya devam et...