Invoice Verification 2.0.ppt

sap invoce

1. CONFIDENTIAL
Version 2008
SAP MM Training Material-Level 1, 2
Part 4 / 4

2. Document Name
CONFIDENTIAL
Invoice Verification

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Course Objectives
•Enter and verify vendors invoice
•Enter and verify vendor’s excise invoice
•Devalue materials
•Carry out physical inventory
On conclusion of this course, you should be able
to understand invoice verification processing
SAP and configuration settings.

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Introduction
•Contents
•Invoice entry and verification
•Subsequent debit
•Subsequent credit
•Credit memo
•Material devaluation
•Physical inventory
•Inventory management information

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MM -invoice verification
•Themaintaskoflogisticsinvoiceverificationistocompletetheprocedureof
materialsprocurementbypostingthevendorinvoice&topasson
informationconcerningtheinvoicetofinancialaccounting&subsequent
applications.
•Theinvoicedocumentsupdatebothmaterialmanagement&financial
accounting.
•Aftertheinvoiceverificationthefinancedepartmentprocessthevendor
payment.
•Invoicedocumentcanbeprocessedw.r.tmanydocumentssuchas
purchaseorder,deliverynote,billoflading,serviceentrysheetetc.

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MM -invoice verification
•The Accounts Payable department is responsible for entering invoices received from
vendors and then paying those vendors.
•In SAP, there are three methods for entering invoices.
–One-way : These are direct invoices. This method is used for invoices such as cash
purchases, credit card invoices, petty cash and change fund reimbursements, employee
travel expenses. This is also called one-way bill matching
–Two Way : In these cases invoice is matched with reference to PO only and GR is not
referenced. This is possible if “GR-Based Invoice” check box is not selected. Import is one
case where this process is used. user has to pay to the Customs authority before actual GR
is made at plant.
–Three Way : The other method is called the Three Way Match method. It is nothing but
matches the vendor’s invoice to the purchase order and the goods receipt. In brief Quantity
is compared with Goods receipt Quantity, Price is compared with Purchase order Price.

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CONFIDENTIAL
MM -invoice verification –Standard Three way match
•ProcuringitemsonaSAPpurchaseorderispartofthethree-waymatchprocess.Inorder
forapurchaseordertobepaid,threethingsmustoccur:
ThePurchasingofficercreatesapurchaseorderinSAP.Inthisstepthereisno
accountingimpact,althoughPOitemsareassignedtotheappropriategeneralledger
accountandcostcenter,orasset.
TheGoodsReceivingAgententersagoodsreceipt(GR)intoSAP.Inthisstep,thegoods
receiptwillmatchuptheinformationthatwasenteredonthepurchaseorder.Ifthisisa
partialshipment,theclerkmaymodifythequantity,whichwillleavethePOopenuntilthe
restoftheshipmentisentered.
TheAccountsPayableClerkreceivestheinvoice.InvoiceVerificationisthelaststepof
thethree-waymatchprocess.TransactioncodeMIROisusedtoenterthepurchaseorder
numberandverifythattheamountofthePOthatappearsonthescreenistheamount
beinginvoiced.MIROmustmatchwhatwasenteredatthepurchaseorderleveland
goodsreceipt.

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CONFIDENTIAL
Invoice verification
•Path for invoice verification
•SAP MENULOGISTICSMATERIAL MANAGEMENTS LOGISTICS
INVOICE VERIFICATIONDOCUMENT ENTRY ENTER INVOICE

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Invoice verification
Enter the invoice
Date & PO Number
& execute.
All relevant data’s
will get copied to
invoice creation
screen from
purchase order

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CONFIDENTIAL
Invoice Verification
The received quantity & the
balance amount will come by
default in to the invoice.
After verifying the quantity ,
price & other terms of
payment,
the total amount will be
entered in the amount field.
Then click on the ‘simulate’
tab.

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Invoice verification
In the simulation
The accounting
entries will
appear.
After verifying
Post the
document

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CONFIDENTIAL
Invoice verification
•Suppose invoice verification is done for 10 quantities with price Rs20/-each.
•Then the after invoice verification the accounting entries will be as follows:
•Vendor account = -200/-
•GR/IR account = + 200/-
•Note : for this same quantity when Goods receipt had been done the the
accounting entries would be like as follows:
•Material stock account = +200/-
•GR/IR account = -200/-
so after invoice verification the GR/IR account gets nullified & it generates
the vendor liability.

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CONFIDENTIAL
Invoice verification
•When you post an invoice, the system carries out the account movements
and updates the following
–The system generates a Financial Accounting document that displays the
accounts involved in the posting and the amounts posted to these
accounts.
–The system creates a purchase order statistic for each item in the
purchase order.
–The moving average price is updated in the material master record If the
invoiced price differs from the price in the purchase order for a material
with moving average price control

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Display invoice document & its accounting document
•SAP MENULOGISTICSMATERIALS MANAGENMENT LOGISTICS
INVOICE VERIFICATIONFURTHER PROCESSING DISPLAY INVOICE
DOCUMENT

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Display invoice
Put the
invoice no &
the fiscal
year. then
enter

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Display invoice
You can see the
whole invoice entries
& to see the
accounting entries
click on the “follow on
document”

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Invoice-accounting entries
You can see the
accounting entries
where vendor account
is credited & GR/IR
account is debited.

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GR-Based Invoice Verifications:
There are two ways of doing invoice verification w.r.t a purchase order.
•GR-Based invoice verification
•With out GR-Based invoice verification

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GR-Based invoice verification
•You have to flag the GR-Based invoice indicator in purchase order.
•When you are doing invoice verification , system will show each goods
receipt wise quantity & price.
•Suppose total PO quantity is 100 with price of each item is EUR 10/-. You
have done goods receipt for 20, 30 & 50 quantities separately. Then in the
invoice verification system will show as follows:
•Quantity price
•20 200
•30 300
•50 500
Along with this system shows the corresponding material document no. this
gives better way of verifying the material document.
In case of non GR Based verification all quantities & price come cumulatively.
quantity price
100 1000

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GR-Based indicator in purchase order (item details invoice tab)

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GR Based invoice verification
Here, for each
goods receipt
against the
purchase order,
the quantity &
amount will come
separately

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NO GR-Based IV indicator in purchase order (item details invoice tab)

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Non GR Based verification

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Parking the invoice
•Preliminary Posting
–You can enter an invoice (or a credit memo) without posting it and simply
"park" it.
–If you park an invoice or a credit memo the system does not make any
postings.
–A parked document can be changed as often as you like.
–When data is added or changed, the changes are noted by the system.
–When no further changes are required, you can then post the parked
document.
–Parking of invoice creates only a material document & no accounting
document
–Only after posting the invoice creates an accounting document.

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Parking the invoice
•The preliminary posting function can be of great advantage if:
–You are interrupted when entering an invoice. You can park the
document and continue processing it later on. This saves you time
having to enter the data twice.
–You wish to clear up some questions before you post an invoice.
You can park the document and continue processing it later on.
–You wish to split the Invoice Verification process. One employee
can, for example, park an invoice without checking it, while another
carries out the actual checks and posts the document after making
any necessary corrections.

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Parking of invoice
•Path for the parking invoice
•SAP MENULOGISTICSMATERIALS MANAGEMENT LOGISTICS IN
VOICE VERIFICATIONDOCUMENT ENTRY PARK INVOICE
•The screen for general invoice & park invoice is same.

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Blocking the invoice
•When an invoice is blocked, Financial Accounting cannot pay the invoice.
•The invoice must first be released in a separate step before it can be
processed.
•Variances in an Invoice Item
–Quantity variance (M)
–Price variance (P)
–Variance in order price quantity (G)
–Schedule variance (T)
–Quality inspection (I)

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Credit memos
•The term credit memo always refers to a credit memo from the vendor.
•Posting a credit memo always leads to a debit posting to the vendor
account.
•Processing of credit memos is same as invoice verification
•You have to select “credit memo” in the header of invoice verification

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Credit memo
Choose credit
memo in the
header for
credit memo
entries. Rest all
process is
same as
invoice
verification

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CONFIDENTIAL
Subsequent debit
•Suppose for any reason the vendor has charged you more in the invoice &
now you want to reduce the extra liability. For this you have to create a
subsequent debit. Entry.
•Suppose you have received an invoice for 10 quantity with price of each unit
is Rs 20/-. Then after invoice verification entry the accounting posting will
be as follows:
•Vendor account = -200/-
•GR/IR account = +200/-
•Now for any reason you want to deduct Rs 50/-.let it be as a penalty for
later delivery. so with subsequent debit posting the accounting entries will be
as follows
•Vendor account = +50/-
•Material stock account = -50/-
•So the net liability of the vendor reduces & it becomes Rs 150/-.
•This transaction raises changes the valuation of material & the Moving
average price decreases.

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Subsequent debit
Choose subsequent debit
at the header , enter the
invoice date , the amount
to be deducted. Then
process it like an invoice.

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Subsequent credit.
•Suppose for any reason the material price has increased & the vendor
wants to charge additional amount. For this you have to create a
subsequent credit entry.
•Suppose you have received an invoice for 10 quantity with price of each unit
is Rs20/-. Then after invoice verification entry the accounting posting will be
as follows:
•Vendor account = -200/-
•GR/IR account = +200/-
•Now for any reason you have to pay Rs50/-.let it be increase in material
price . so with subsequent credit posting the accounting entries will be as
follows
•Vendor account = -50/
•Material stock account = +50/-
•So the net liability of the vendor reduces & it becomes Rs250/-.
•This transaction raises changes the valuation of material & the Moving
average price increases.

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CONFIDENTIAL
Subsequent credit
Choose subsequent credit
at the header , enter the
invoice date , the amount
to be credited. Then
process it like an invoice.

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CONFIDENTIAL
Types of Delivery Costs
•In the SAP System, there are two types of delivery costs:
•Planned delivery costs
–They are entered in the purchase order. Provisions are set up for
the relevant costs at goods receipt. The delivery costs posted at
goods receipt can be referenced at invoice entry.
•Unplanned delivery costs
–They are only entered when the invoice is entered. No provision is
made at goods receipt.

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Planned delivery cost:
Planned delivery cost can
be processed along with
the material or separately.
depending on this choose
“planned delivery cost”, 0r
Goods/service + planned
delivery cost.
Then the processing is
same as invoice.

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Material valuation change due to invoice posting.
•Suppose quantity ordered in a PO is 10 & the price per item is Rs20/-
.
•After goods receipt the accounting entries will be as follows:
•Material stock account = + 200/-
•GR/IR account = -200/-
material valuation will change after this above accounting posting.
•After invoice verification the accounting entries will be as follows:
•Vendor account = -200/-
•GR/IR account = + 200/-
There wont be any change in material valuation
Suppose there is a difference in invoice price . Let it be Rs22/-per item. Then
the accounting entries will be as follows
Vendor account = -220/-
GR/IR account = + 200/-
Material stock account = +20/-
So with this posting there will be a change in material valuation.

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CONFIDENTIAL
Thank you