“Period based” means that during the month or period, all and only actual events / transactions are posted in the appropriate period. At the end of the period estimated accruals and deferrals are made and posted to that posting period to GIVE a more accurate view of profit. IE any expected revenues and expenditures that should relate to the CURRENT period are accrued for and equally any prepaid expenses or revenues are deferred to the next period. (Accruals and Deferrals are posted temporarily, usually to special accounts, and reversed prior to the next period end.)

Cost of Sales Accounting:

Cost of Sales in SAP means that we attempt to record or rather report the “costs of sales” against the actual sale at as low a level as possible and during the period. (In CO-PA this is down to a transaction level.) This enables the company to get a reasonably accurate view of profitability on a real time basis.

This is done by using EITHER standards or ESTIMATES for many of the components that make up the “cost of goods sold”. Any VARIATIONS from the standards are usually posted through to the cost of sales system either at month end or when they occur.

“Period based” means that during the month or period, all and only actual events / transactions are posted in the appropriate period. At the end of the period estimated accruals and deferrals are made and posted to that posting period to give a more accurate view of profit. IE any expected revenues and expenditures that should relate to the current period are accrued for and equally any prepaid expenses or revenues are deferred to the next period. (Accruals and Deferrals are posted temporarily, usually to special accounts, and reversed prior to the next period end.)

Cost of Sales Accounting:

Cost of Sales in SAP means that we attempt to record or rather report the “costs of sales” against the actual sale at as low a level as possible and during the period. (In CO-PA this is down to a transaction level.) This enables the company to get a reasonably accurate view of profitability on a real time basis.

This is done by using either standards or estimates for many of the components that make up the “cost of goods sold”. Any variations from the standards are usually posted through to the cost of sales system either at month end or when they occur.