A typical flow of entries in SAP from production / sales perspective1. Raw material procurement Dr.

Raw matrial inventory (B/S) Cr. GR/IR clearing (B/S) 2. Production process - Issue of material Dr. Consumption (P/L) Cr. Raw matrial inventory (B/S) 3. Production process conversion cost Dr. conversion cost (P/L) secondary cost element in SAP Cr. conversion cost (P/L) secondary cost element in SAP 4. Production process Goods receip into stock Dr. Finished stock (B/S) (including conversion & raw material cost) Cr. COGM - Cost of goods manufactured (P/L) 5. Sales process delivery to customer Dr. COGS - Cost of goods sold (P/L) Cr. Finished stock (B/S) 6. Revenue Dr. Customer (B/S) Cr. Revenue (P/L) For Ex: in the purchase to pay cycle Dr Inventory Cr GR/IR A/c Dr GR/IR A/C Cr Vendor A/C Dr Vendor A/c Cr Cash A/C Freight GL SHould be as a Balance Sheet (Liabilities) account not required any c ost center or assigning in OKB9. Entry on MIGO: When Freigh to be included in material cost. Inventory Dr 100 GR/IR Clearing Account cr 90 Freight Clearing Account cr 10 MIRO: GR/IR Clearing Account 90 Dr Freight Clearing Account 10 Dr Vendor Account 100 This is the entry. Note: Vendor is liability and unless miro is not done GR IR/Freight Clearing acc ount are considered as liability.

1. UMB - Gain/Loss from Revaluation - P/L Account 2. BSX - Inventory Accounts - B/S Accounts

3. GBB - BSA - Initial Uload - B/S Accounts 4. GBb-INV - Offsetting entry for Stock Posting (for expenditure / income from i nventory differences - P/L Accounts 5. GBB-VAY - Cost of Goods Sold - P/L Entry 6. GBB-VBR - Consumption 7. PRD - price Difference - P/L Accounts 8. WRX - GR/IR Clearing A/C - /S Accounts 9. KDM - Materials Diff in Exchange rates - P/L Account