By-Product Receipt from a Production Order (Movement Type 531)
A production order yields a secondary output alongside the main product: a BOM item with a negative quantity marks it as a by-product, movement 531 receives it into stock, and its value is credited to the order.
Educational content. SAP behaviour varies by configuration and release. Spotted something off? Report it.
Digital twin
01The BOM carries a negative item
Order 1000003 lists BP-9000 with −20 KG. A negative component quantity means "this comes out", not "this goes in".
Component overview
Production Order 1000003
- RM-1000
- +100 EA (consumed)
- BP-9000
- −20 KG (produced)
Business scenario
Cutting the steel brackets for 100 EA of FG-2000 leaves 20 KG of clean offcuts that a scrap dealer buys. The BOM lists the offcuts as a by-product so they are received into stock instead of being thrown away unrecorded.
All companies, numbers and documents are fictional demo data.
Step-by-step flow
- 01
The BOM carries a negative item open in twin
Order 1000003 lists BP-9000 with −20 KG. A negative component quantity means "this comes out", not "this goes in".
The negative sign makes the reservation a planned receipt, so MRP sees the offcuts coming and the order knows to expect them.
- 02
Issue the steel and build open in twin
100 EA of RM-1000 are issued (261) and cut on the line: ₹1,00,000 to the order.
The by-product item is not issued — it will be received.
- 03
Confirm and receive the brackets open in twin
Confirmation records 100 EA; FG-2000 is received with 101 (40 → 140 EA) and the offcuts are left at the line.
The by-product is a separate receipt with its own movement type, so it is handled next.
- 04
What about the offcuts? open in twin
20 KG of clean offcuts sit at the line. How should they enter stock?
Its value reduces the order's cost; a receipt without the order reference loses that link.
- 05
Stock without the order credit open in twin
A 501 receipt books the offcuts into stock against a general offset account. The order keeps its full cost and the by-product reservation stays open.
The order's costs stay overstated by the by-product's value and MRP still expects a by-product receipt that will never come.
- 06
Receive the by-product (531) open in twin
BP-9000: 0 → 20 KG. The order is credited ₹1,000 at the by-product's price.
The order's net cost drops by the by-product's value, which is the simple valuation method used for by-products.
- 07
Settle the order open in twin
Debits ₹1,20,000, credits ₹1,21,000: ₹1,000 favourable — the by-product credit, which this demo's cost estimate did not plan.
Whether the by-product credit shows as a variance or lowers the product's standard cost depends on whether costing planned it.
- 08
By-product cycle complete open in twin
One order, two outputs: the main product by 101 and the by-product by 531.
Co-products are the alternative when both outputs are equally important and costs must be split between them by an apportionment structure.
SAP documents
Stock impact
| Step | Plant / SLoc | Stock type | MvT | Change |
|---|---|---|---|---|
| Issue the steel and build | 1000 / 0002 | Unrestricted use | 261 | −100 EA |
| Confirm and receive the brackets | 1000 / 0001 | Unrestricted use | 101 | +100 EA |
| Receive the by-product (531) | 1000 / 0001 | Unrestricted use | 531 | +20 KG |
Accounting impact
Components consumed by the order
TypicalIssue the steel and build
- Dr Consumption — order 1000003 (GBB/VBR)₹1,00,000
- Cr Inventory — raw materials (BSX)₹1,00,000
Standard order consumption.
Activity allocation for the confirmed operation
ConceptualConfirm and receive the brackets
- Dr Production order 1000003 — machine hours₹20,000
- Cr Cost center CC-4300 — activity allocation₹20,000
Confirmed machine hours at the work center's activity rate.
Goods receipt of the main product
TypicalConfirm and receive the brackets
- Dr Inventory — finished goods (BSX)₹1,20,000
- Cr Factory output — order 1000003 (GBB/AUF)₹1,20,000
Received at standard price, crediting the order through factory output.
By-product received and credited to the order
Configuration dependentReceive the by-product (531)
- Dr Inventory — by-products (BSX)₹1,000
- Cr Production order 1000003 — by-product credit₹1,000
The by-product is valued at its own price (here the material's valuation price). Inventory is debited and the order credited, reducing its net cost. Requires configuration validation: the offsetting account comes from automatic account determination.
Settlement of the favourable variance
Configuration dependentSettle the order
- Dr Production order 1000003 — settlement₹1,000
- Cr Price difference — production variance (PRD)₹1,000
If the standard cost estimate includes the by-product credit, the finished good's standard cost is lower and no variance arises. In this demo the estimate ignored it, so it surfaces as a favourable variance.
Typical conceptual flow. Actual G/L accounts and posting behaviour depend on material valuation, automatic account determination and system configuration.
Movement type
- 531GR for by-product from orderReversal: 532
- 261GI for orderReversal: 262
- 101GR for orderReversal: 102
Records secondary outputs of production as stock, valued at a fixed price that reduces the cost of the order, so they are neither lost nor mis-costed.
Transactions & Fiori apps
- CS02 — Change BOM (negative by-product item)
- CO02 — Change Production Order
- MIGO — Goods Movement (531)
- CO11N — Confirmation
- KO88 — Order Settlement
- Post Goods Movement
- Manage Production OrdersAvailability depends on release and scope
Differences by SAP version
By-products via negative BOM items and movement type 531 as described.
Unchanged logic; postings land in MATDOC and ACDOCA.
Same movement type and BOM modelling, maintained through Fiori apps.
Configuration
By-product vs co-product
TypicalA by-product is valued at a fixed price credited to the order. A co-product needs the co-product indicator and an apportionment structure to split costs.
Account determination for 531
Configuration dependentThe offsetting entry credits the order; the accounts used are determined by configuration.
Cost estimate
Configuration dependentWhether the by-product credit is included in the finished good's standard cost.
Prerequisites
- By-product material with its own material master and a valuation price
- BOM item for the by-product with a negative quantity
- Production order created after the BOM change so it carries the by-product item
Master data
- By-product material master
- Valuation price used for the 531 receipt and the order credit.
- BOM
- Negative component quantity marks the by-product.
Organizational structure
- Plant 1000
- Storage locations 0002 and 0001
Tables
| Table | Description |
|---|---|
| STPO | BOM item with negative quantity |
| RESB | Planned by-product receipt on the order |
| MATDOC | The 531 movement |
Integration
- MMThe by-product is valuated stock that can be sold or reused.
- COThe by-product credit lowers the order's net cost.
- SDThe by-product can be sold through a normal sales order.
Common errors
“531 not proposed in MIGO for the order”
Likely causes: BOM item quantity not negative; Order created before the BOM change
Where to look: BOM item · Order component list
“By-product receipt cannot be valued”
Likely causes: No valuation price on the by-product material; Material type not valuated
Where to look: Material master accounting view
Troubleshooting
Something went wrong? Work through these checks in order. They are diagnostic questions, not configuration instructions — confirm changes with your system owner.
CHECK 1
No 531 proposed
- Is the BOM quantity negative?
- Does the order include the by-product component?
CHECK 2
Valuation
- Does the by-product have a valuation price?
- Is the order credited in the cost analysis?
Interview questions
How do you model a by-product in SAP PP?
As a BOM item for the by-product material with a negative quantity. The production order then carries a planned receipt for it, MIGO proposes movement type 531 against the order, and the receipt is valued at the by-product's price and credited to the order.
What is the difference between a by-product and a co-product?
A by-product is a secondary output valued at a fixed price that simply reduces the order's cost. A co-product is an equally important output: it is flagged as a co-product, and the order's costs are split between the main product and co-products using an apportionment structure, with each receiving its share at settlement.
Why not just receive the offcuts with 501?
Because 501 has no link to the order. Stock would appear, but the order would not be credited, its cost would be overstated by the by-product's value and the planned by-product receipt would stay open in MRP.
Quiz
References
- SAP SE — SAP Help Portal: Co-Products and By-Products (source)
- SAP SE — SAP Help Portal: Production Orders (source)
- SAP SE — SAP Help Portal: Bill of Material (source)
Explanations are original. They summarize standard behaviour; always validate against your system's release and configuration.
Version history
| Version | Change |
|---|---|
| 1.0.0 | Initial version. |