Valuated Sales Order Stocks

Use

You use a valuated sales order stock if you want the goods movements to have corresponding
postings in Financial Accounting (FI).

A sales order stock is assigned exclusively to a particular sales order and sales order item and
cannot be used for other sales orders or sales order items. Sales order stocks can be for
independent requirements as well as for the dependent individual requirements of the individual
requirements material (finished product). For this reason, the material components can only be
used to manufacture the material ordered by the customer and listed in a particular sales order
item, and the material manufactured can only be delivered to the customer in the context of the
sales order item.

As a manufacturing enterprise, you can use the valuated sales order stock in:

 Complex make-to-order production

In this case you use the functions of Product Cost by Sales Order.

 Mass production environments using sales orders

In this case you use the functions of Product Cost by Order or Product Cost by
Period (refer to: product cost collectors in sales-order-related production).

You can also use the valuated sales order stock for external procurement (trading goods).
There are two types of trading goods:

 Mass trading goods

Here you analyze the profitability for specific markets in Profitability

Analysis (CO-PA) (such as for the consumer goods industry).

 Trading goods specific to the sales order

Here you use the functionality of Product Cost by Sales Order.

Prerequisites
If you are using a valuated sales order stock or a valuated project stock, an accounting view
must have been created for the individual requirements material.

If you are using configurable materials and want the individual requirements materials to be valuated,
do not use material type KMAT because in the standard system this material type does not allow
accounting views to be created (or open the accounting view for material type KMAT). Use any other
material type with an accounting view and set the Material is configurable indicator in the basic data view
of the material master record if applicable. You can specify this indicator as a default value in
Customizing. To do this, go into Customizing for Logistics General under Basic
Data  Material  Control Data  Define attributes of material types.

You have specified that the sales order stock should be valuated in Customizing for Product Cost by
Sales Order under Control of Sales-Order-Related Production  Check Requirements Classes in
the Valuation field. You select this requirements class through the requirements type (refer to: Control of
Requirements Type Determination). You can:

 Carry only the quantity of the sales order stock separately from the make-to-stock
inventory

The sales order stock is valuated together with the make-to-stock inventory. Here
you enter A in the Valuation field in the requirements class. The individual
requirements material is valuated according to the valuation of the make-to-stock
material. You view the inventory quantity and inventory value of all sales order
stocks that are manufactured with valuation indicator "A" in the material master
record.

You are in an order-related production environment and are collecting the

actual costs of production on a product cost collector.

o If you valuate the sales order stock separately, then when you
settle, the system dynamically generates a distribution rule with
equivalence numbers in accordance with the delivery quantity and
settles the balance of the product cost collector proportionally to
the different stock segments.

o If you only carry the quantity of the sales order stock separately
from the make-to-stock-inventory, the delivery value of the
 valuated sales order stock is included with the delivery value of
the make-to-stock-inventory Settlement is performed in the same
value segment.

 Carry both the quantity and the value of the sales order stock separately from the make-
to-stock-inventory

The system valuates the sales order stock separately. The valuation is performed
in accordance with the indicator Without valuation strategy in the requirements
class. If you specify in the valuation strategy that the sales order stock is to be
valuated on the basis of the standard price of the material manufactured for the
make-to-stock inventory, the Valuation indicator in the requirements class should
have the setting for only quantity-based separate valuation (entry A).

The Accounting 1 view includes the following fields:

 Valuation class

You always enter a valuation class in this field.

 Sales order stock VC

If you want to assign the valuated sales order stock in FI to a different account
than the make-to-stock-inventory, enter an additional valuation class in this field.

 Project stock VC

If you want to assign the valuated project stock in FI to a different account than
the make-to-stock-inventory, enter an additional valuation class in this field.

The system uses this valuation class together with automatic material account determination to
find the account to which the inventory values of the valuated sales order stock are updated.

Features

A valuated sales order stock provides a number of benefits such as efficient cost management
in sales-order-related mass production environments, simplified inventory processing with
individual requirements materials, and comparable processing in sales-order-based and make-
to-stock production environments.

Valuated sales order stocks have the following advantages:

  The full costs are available at each manufacturing level.
 All goods movements are immediately reflected in Financial Accounting.

Goods receipts result in automatic capitalization of the costs of the finished products that
are relevant to inventory valuation; goods issues result in a corresponding inventory
reduction. The flow of quantities and values is the same as in make-to-stock production.
With goods issue postings for delivery to the customer, the sales order item is debited if
you have flagged the sales order item as carrying costs and revenues (refer to: Sales
Order Items That Carry Costs and Revenues).

For trading goods procured externally, the goods receipt is posted to the valuated
sales order inventory. If you have flagged the sales order item as carrying costs
and revenues, the sales order item is not charged until the goods issue posting
for delivery to the customer.

The costs for externally procured raw materials are only debited to the sales
order item when the goods issue for delivery of the finished product to the
customer is posted.

If you are using the cost-of-sales accounting in Financial Accounting, the cost of
sales is updated to Financial Accounting immediately rather than when results
analysis is carried out.

 Efficient cost management in mass production environments using sales orders

 Simplified inventory processing with sales order or project inventory materials
 Standard costing for make-to-order manufacturers This is particularly recommended in
mass production environments.
 Calculation of variances

In multilevel make-to-order production, you can calculate variances on

manufacturing orders and collective orders because you can report the full costs
for the manufacturing orders assigned to the sales order item.
Variance calculation determines the difference between the valuation of the
goods receipt and the actual costs, and explains how the variance occurred.

 You can view the funds commitment in the valuated sales order inventory on the sales
order item as statistical actual data.

You can view the valuated sales order stock in the menu Inventory Management (refer to: Displaying
Valuated Special Stocks).
You can settle the variance of a manufacturing order or product cost collector that produced an
individual requirements material to Actual Costing/Material Ledger (CO-PC-ACT).

Posting Goods Movements

All goods movements for materials produced in-house that are assigned to a sales order take
place on the sales order stock.

With a valuated sales order stock, goods movements result in postings in Financial
Accounting just as with make-to-stock inventories.

Quantity and Value Flow with Valuated Sales Order

Stock

External Procurement with a Valuated Sales Order Stock

The system generates a purchase requisition from the sales order.

When you are using a valuated sales order stock, externally procured individual requirements
materials are assigned to the sales order stock at the net order price at the time of the goods
receipt. The net order price is updated as the standard price. If the sales order item is flagged
as carrying costs and revenues, then when the goods issue for delivery to the customer takes
place, the sales order item is debited with the costs of the externally procured material. If there
are differences between the standard price (the net order price) and the actual costs, and if the
sales order item is flagged as carrying costs and revenues, the price differences are posted to
the sales order item.
In-House Production with a Valuated Sales Order Stock

See also:

Valuated Sales Order Stock: Valuation

Standard Price with Valuated Sales Order Stock

Example for Valuated Sales Order Stock Without Product Cost by Sales Order: Quantity and Value Flow

Variances with a Valuated Sales Order Stock

Product Cost by Sales Order: Scenario

Example for Product Cost by Sales Order with Valuated Sales Order Stock: Quantity and Value Flow

Transfer Prices

If you are using transfer prices with a valuated sales order stock, you can update data in
multiple valuation views.

See also:

For more information on valuated sales order stocks, refer to the following sections:

Valuated Sales Order Stock: Valuation

Standard Price with Valuated Sales Order Stock

Displaying Valuated Special Stocks

Product Cost Collectors in Sales-Order-Related Production

Variances with a Valuated Sales Order Stock

For information on mass production on the basis of sales orders, refer to the following
documents:

Cost Object Controlling: Mass Production on the Basis of Sales Orders

Product Cost by Order

Product Cost by Period

For information on complex make-to-order production, refer to the following section:

Cost Object Controlling: Complex Make-to-Order Production

For information on automatic material account determination, refer to the Implementation Guide (IMG)
for Materials Management under Valuation and Account Assignment  Account Determination  Create
Automatic Postings.

For information on goods movements, refer to the following section:

Actual Costs in Cost Object Controlling

For information on updating data in multiple valuation views when using a valuated sales order
stock, refer to the following section:

Transfer Prices in Cost Object Controlling

For information on analyzing profitability for specific markets, refer to the document Profitability
Analysis (CO-PA).