Lesson 5 of 6
The finance view of the whole tour
7 min
Step back from the individual documents and look at the tour the way the controller sees it. Every leg left journal entries in company code 1710. Put together, they tell the story of value moving through Contoso: cash out to the supplier, value into raw materials, into finished goods, out to cost of goods sold, and back in as revenue and cash.
- Oct 2Goods receipt of rotorsRaw materials inventory +4,000.00; GR/IR −4,000.00
- Oct 3Supplier invoiceGR/IR cleared; supplier payable 4,000.00
- Oct 6Components issued to productionRaw materials −11,000.00 onto the production order
- Oct 8Operations confirmedActivity cost 5,000.00 from production cost center to the order
- Oct 9Alternators receivedFinished goods +16,000.00; order credited
- Oct 14Goods issue to customerCost of goods sold 8,000.00; finished goods −8,000.00
- Oct 15BillingReceivable and revenue 12,500.00
- Oct 31Payments and period endSupplier paid, customer cash received, production order settled
Where the value sits at the end
| Account area | Movement in the tour (USD) | Why |
|---|---|---|
| Raw materials inventory | +4,000 received; −11,000 issued (other components came from existing stock) | Rotors and other components consumed by production |
| Finished goods inventory | +16,000 received; −8,000 sold = 8,000 remaining | 50 alternators still in stock at 160.00 |
| Cost of goods sold | 8,000 | 50 alternators at standard |
| Revenue | 12,500 | 50 alternators at 250.00 |
| GR/IR clearing | 0 | Receipt and invoice matched |
| Customer and supplier | 0 after payments | Both open items cleared |
Net effect of the tour on key accounts.
Reading it in the system
Use Display Line Items in General Ledger filtered to company code 1710 and the tour dates, or the Trial Balance for the period. Filter by product CMC-ALT-100 to see the alternator story alone. Each line drills back to its source document, so the finance view and the document flows from the earlier lessons are two views of the same facts.
Inventory and stock must agree
One check ties logistics and finance together: the quantity and value of stock in plant 1710 should match the inventory accounts. After the tour, the stock overview should show 50 alternators valued at 8,000.00 USD, and the finished goods inventory account (for the alternator, in plant 1710) should carry the same value. In SAP S/4HANA, inventory valuation runs through the material ledger, which is part of the Universal Journal, so these should never drift apart. If they do, something posted outside the normal process.
Period-end touches
Some parts of the tour are only finished at period end. Production orders are settled, moving variances to finance and margin analysis. If your company uses actual costing in the material ledger, the period-end run revalues inventory and cost of goods sold to actual cost. Open GR/IR balances are analyzed and may be reclassified for the balance sheet. Foreign currency open items are revalued. None of this is needed to prove the tour's documents work, but a full integration test cycle that crosses a period end should include these steps and check that they pick up the tour's postings correctly.
What would you do?
After the tour, the stock overview shows 50 alternators in plant 1710, but the finished goods inventory account for the alternator shows 8,160.00 USD instead of 8,000.00 USD. What is the most plausible explanation to investigate?
- Each leg leaves journal entries; together they trace value from purchase to cash.
- At the end, GR/IR and open items should net to zero and stock value should match inventory accounts.
- Revenue and cost of goods sold share attributes, so margin by product and customer is immediate.
- Integrated checks find defects that pass in single-process tests.
Check your understanding · not graded
Lesson check
1. After the tour, what should the GR/IR balance for the rotor PO be?
2. What should match the finished goods inventory account for the alternator in plant 1710?
3. Which app helps you see all tour postings filtered by product?
4. Why do integrated checks find defects single-process tests miss?