Inventory Groups: Process Table

Attention! This manual is developed for the MKG004 software. If you are using MKG5 or MKG3, the description of the operation may differ slightly from your environment. We aim to provide a product-specific description for this topic in the future.

In MKG, various inventory groups can be used to categorize items/purchases into different groups. Inventory groups can be used for:

• items;
• material lines of production orders, calculations, and bill of materials;
• production orders and semi-finished product lines;
• sales and purchase order lines.

The master table with inventory groups can be accessed via: Menu Items Process Tables Inventory Group. The following screen will appear:

In the above screen example, two lines with inventory groups are presented. Within an inventory group, general ledger accounts can be assigned. Financial mutations related to inventory groups pertain to a mutation concerning inventory, revaluation, price differences, and/or costs. In the case of a simple financial setup, 'Material' and 'Price Differences' are the main categories. In a comprehensive financial setup, the other fields are also filled with the applicable general ledger accounts.

When there is a financial basic setup, two basic inventory groups are assumed for:

• Purchases for orders
• Costs

Purchases for Orders

A general ledger account is assigned to an inventory group for purchases for orders and price differences. This provides insight into the actual costs of the purchased material. The account for price differences must be of the type 'Profit and Loss Account'. In the following screenshot, the settings of this process group are presented:

The general ledger account in the 'Price Differences' section would have a different account number when items are purchased with a different valuation system. This could involve the following valuation systems: the fixed settlement price (VVP) and the actual settlement price (WVP), without the 'GVP' checkbox.

Difference between Basic Setup and Comprehensive Setup

In a basic setup, the general ledger accounts will refer to general ledger accounts with the property 'Profit and Loss', often general ledger accounts in the 7000 group. In a basic setup, the purchase is a final booking, and there is no transfer from work in progress to cost of sales. At the time of material purchase, the cost booking must already be made. In a comprehensive financial setup, where the material inventory is also booked on the balance sheet, we use general ledger accounts with the property 'Balance'. These are often general ledger accounts in the 3000 group. In this setup, upon purchase, the material is first booked to inventory, then to work in progress, and finally to cost of sales.

Costs

For this inventory group, it concerns the general ledger accounts on which process-related purchases are booked that are not created from a requirement on a production order. It involves purchases that are handled within the organization's purchasing process. For these types of inventory groups, only one general ledger account (expense account) needs to be assigned.

Examples of costs in Inventory Groups:

• footwear and overalls for staff;
• general production costs, such as welding wire, cutting inserts, cooling oil.

It is not mandatory to handle these purchases process-wise, but this makes ongoing purchases transparent. When there are items without the property 'Cost Item' within an inventory group with costs, a general ledger account for price differences must be entered.

If investments in fixed assets can also be made via the purchasing process, an inventory group could also be created that is linked to the general ledger account used as an interim account for investments.

Financial: index

Related

• Purchase Groups: Process Table
• Production Groups: Process Table
• Sales Groups: Process Table