Optimize Your Sales Order Flow for Accounting

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welcome to another video in the fixed assets playlist in the video today I will explain how we can sell fixed assets using sales orders in sales and distribution first you should know that there is no standard solution for selling fixed Assets in the sales and distribution module but there are some workarounds we can use so if your requirement is only to be able to post taxes when you sell your fixed assets then you don't have to use the sales order you can also investigate the other option of selling the fixed asset with with a customer directly in financial accounting I have already created a full video explaining the process and demonstrating how to do it on Scana of selling a fixed asset to a customer in financial accounting and there you can also post taxes I will leave you a link to the video here in the video cards you should check it but if you also have other business requirements that force you to use the sales order for example you want to use the approval workflow in the sales and distribution module or you want to use the sales conditions in the sales order then in this video I will give you two solutions you can use to sell fixed assets using sales orders in SCS for Han I will start by giving you an overview of the two solutions so this way you know what to expect in this video then I will go into the details of each solution and the accounting entries so for the overview the first solution is to create a non-stock item and then we create a sales order with reference to the non-stock item then we switch to the financial accounting module and we post a fixed asset retirement with an automatic offsetting entry then we switch back to the sales and distribution module and we post a billing document with reference to the sales order so this is the first solution the second solution is to use a movement type in inventory management that can convert the value of any fixed asset into a material aterial stock value and then we sell this material as we sell any other material in the sales from stock process now let's move into the details of the first solution using the non-stock item and I know this solution may sound complicated and that's because there are many things you need to learn before you can understand this solution and I have explained everything already in the channel so now I will give you a list of the videos that you need to watch to be able to understand this and I will leave l links to all the videos in the video cards here so you see the exclamation mark at the top of the video click there and you will find links to all the videos I will tell you about now so the first video is where I explained the difference between non-stock and nonv valuated items and I demonstrated how to create both of them and use both of them in SCS for Han the second video is where I explained and demonstrated on SCS foran the process of fixed asset sale with automatic off setting entry the third video as the order to cash process where I explained and demonstrated how to sell any item from stock if you have not yet watched these three videos then you should pause the video here go watch them and then come back are we good now let's proceed the process of fixed asset sale with sales order and a unsto item it starts by creating the item Master data so we will create a material Master data for a non-stock item and we don't need multiple items we can create only one and then we use it for the different processes where we sell fixed assets using sales orders the second step is to create a normal sales order for the non-stock item and once we insert the item number sap will automatically recognize that this is a non-stock item then in the sales price we insert the fixed asset price after creating the sales order we don't have an outbound delivery or a Goods issue because this is a fixed asset and it's not in the inventory management module so the third step is to switch to the fixed asset module modle and post a fixed asset sale with automatic offsetting account and here we have our first accounting entry the entry will be a debit to the automatic offsetting account with the value of the fixed asset sale then we have a debit to the accumulated depreciation account of the fixed asset a credit to the fixed asset acquisition cost and the difference will go to a gain or a loss account then we switch back to the sales and distribution module and we post a billing document with reference to the sales order and here we have our second accounting entry which is a debit to the customer account for the value of the fixed asset sale plus any applicable taxes then we have a credit to the tax account and a credit to the revenue account but here instead of the revenue account we are going to change the configuration so for this process SCP posts to the automatic of setting account the same one that we used in our fixed asset sale with customer in the fixed asset module so this way the automatic offsetting account has a debit in the fixed asset posting and a credit in the sales billing posting with the same value so the net balance is zero and the net accounting impact we have is a debit to the customer account a debit to the accumulated depreciation credit to fixed asset acquisition cost and a credit to fixed asset sales gain and in case of sales taxes we also have a credit to sales tax we can also add an additional step to the process for governance reasons which is creating an outbound delivery after creating the sales order this step doesn't have any accounting impact because the outbound delivery doesn't have a good issue so we only use this step as a governance step which means that we are not going to post the billing document before creating the outbound delivery and then in the process of the company we can say that the outbound delivery should not be created before we post the fixed asset sale in the fixed asset module so this way we can control that no one will post the sales billing without actually posting the fixed asset sale in the fixed asset module and this is it for the first solution where we use non-stock items the second solution is to use a movement type in Inventory management that will move the value of the fixed asset into a material so we start by posting a material document in Inventory management and now we have a material in our stock that has the fixed asset value and we can sell it like any other regular material using the sales from stock process in the next videos I'm going to demonstrate these processes on SCS foran so again these are not standard processes but from my experience in the projects this is what I have seen so I hope you found the video useful and easy to understand don't forget to leave me your comments and your questions and subscribe to the channel to be notified when I publish the coming videos also don't forget to check the channel membership program to get access to the member exclusive videos configuration documents and the private check group on slack thank you for watching and I'll see you again soon