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Accounting Entries

1. Create Purchase Order with Item Category K– Consignment- T Code ME21N


2. Goods Receipt against Consignment Purchase Order,Mvt Type 101 K – No
accounting Entries – T Code MIGO-Goods Receipt
3. Transfer the Consignment Stock to Own stock- Transfer Posting –411 K –T
Code MIGO-Transfer Posting

Accounting Entries:
Consignment Payable – KON – Credit
Stock – BSX – Debit

4. Invoice Settlement – MRKO

Accounting Entries:
Consignment Payable(KON) – Debit
Vendor Account – Credit

4. Payment F110 or any other payment transaction

Accounting Entries:
Bank Account – Credit
Vendor Account – Debit
Accounting Entries

Subcontracting is one of the procurement processes available in MM. In this


process, components are shared to vendor to get the final product. Below are the
steps involved in this process. Steps to perform subcontracting:

1. Create subcontracting Info record (Optional) – T Code – ME11


2. Create subcontracting PO with item category L – T Code – ME21N
Steps: ME21N —> Enter Item Category L –>, Material (End
Product), PO Quantity, Delivery Date, Net Price, Plant –> Click on Item Details –
> Tab Material Data — >Components, select Explode BOM –> Click on
Components button –> Enter the sub components –> Go back & Save.

Note: Components can be exploded through BOM (T Code CS01) or


components can be given manually also.
3. Create Transfer Posting with Movement Type 541 to issue the sub components
to the vendor T Code -ME2O/ MIGO
4. Goods Receipt for finished product – T Code -MIGO

Note: During goods receipt, final product


will be received with movement type 101 and components will be consumed
automatically with 543 movement type
5. Invoice Receipt for the services performed – T Code – MIRO

Accounting entries for subcontracting: Example: Components cost is 100 INR,


Subcontracting Charges are 40 INR
There will be no account entries at transfer posting 541.
Accounting entries at the time of Goods Receipt 101 (&543) : Finished goods
will be received with 101 and the Components will be consumed with
Movement type 543.
(BSX) Stock A/c of Assembly – 140 Dr
(BSV) Change in Subcontracting Stock -140 Cr
(FRL) Subcontracting Charges – 40 Dr
(WRX) GR/IR Clearing A/c – 40 Cr
(BSX) Stock A/c of Components – 100 Cr
(GBB-VBO) Consumption A/c of Components – 100 Dr
Accounting Entries

1.When Sales Order is created.


No FI Entry
2. When PR is Created
No FI Entry
3. When ME21N is done
No FI Entry
4. MIGO
(GBB-VAY) COGS - 3rd Party A/c - Dr
(WRX) GR/IR Clearing A/c - Cr
5. MIRO
Vendor Account - Cr
GR/IR Clearing A/c - Dr
6. VF01
Customer Account - Dr
Sales Revenue A/c - Cr