LOGISTICS INVOICE VERIFICATION:

Logistics Invoice Verification is the part of the MM. It is at the end of supply chain management. (MIRO)
α Mm and Fi both are involved in this.
α LIV will be verifying the incoming invoices in terms of content, prices, quantity. With respect to Goods
receipt quantity and with purchase order for price and taxes.
α When an invoice is posted an accounting document and material document will be generated and PO history
gets updated.
α IVR is only for material price but quantity cannot be updated.
α Incoming invoice can be verified with reference to PO/ SA/deliver note/Vendor /Service entry sheet/ Bill of
lading etc.
α If GR is not performed, invoice will not be posted if we check the Gr-Based IN check in PO.
Verify the invoice from the supplier and the goods received, Once it matches we can post invoice.
α We can use different reference documents to post the invoice.
α Invoices received from online, we just compare and verify.
α Invoices based on purchase order whether complete delivery or partial deliveries, the IVR depends on the PO,
hence it shows the PO quantity irrespective of GR.
α Invoice based on the goods receipt,

Invoice Verification Structure:

 Transaction : invoice, Credit memo, sub credit, sub debit

 Balance : Sum of delivery cost, goods, tax
 Header : basic data, payment, details , tax, withholding tax, amount split, notes, contacts
 Vendor Data : address ,
 Ref doc type : PO, SA, delivery note, bill of lading
 Invoice items : Goods and service, Planned delivery costs or both
 Layout : PO, invoice reduction
 List of individual items

α Basic data: In the basic data you will enter invoice date, Reference, amount, tax amount, tax code, Business
place,
α Payment: Baseline date, payment terms, payment method- from vendor. We can block the invoice here.
α Details: unplanned del costs will be distributed in invoice
α Tax: Tax amount will be reflected based on the tax code.
α Follow on documents: Accounting entries can be seen here.
α SU01: maintain user -parameters -- IVAMOUNTADJUST --- maintain X -- so that when we enter the
quantity, amount will be adjusted.
α MIR4- Display invoice document, new tab-CTRL R

Functionalities in invoice verification:

1. Basic Invoice Verification
2. Credit Memo/ Subsequent Debit, Credit, Delivery costs
3. Variance and Invoice blocks/ Invoice reduction
4. GR/IR account maintenance

1. Basic Invoice verification:

Types of invoice verification
α Purchase order based invoice verification
α GR based invoice verification
α Document parking
 α Taxes , cash discounts, and foreign currency
α Invoices for PO’s with account assignment

In PO Based verification, the partial deliveries will not be considered or flagged as invoice items. With reference to
PO or delivery note system considers only one delivery or one line item. For this we need to uncheck the GR based
IR. Single invoice item will give the sum of all the delivery notes.

4500001866
Vl31- 180000047

In GR based invoice verification: In order to have this we need to check in the GR based IV in PO, or else it would be
copied from the vendor master. In order to post GR based invoice at least one GR should be done else invoice will not
be posted.
For each partial delivery created an invoice item will be created. So if you enter the delivery note , system accepts as
individual or partial delivery.

In a normal invoice verification for goods receipt below are the accounting entries:
Vendor -- KBS-- CR
GR/IR -- WRX-- DR
Tax --JIC/JII/JIS—DR
4000000501

For a normal invoice

2. Variances and invoice blocks:

a. Variances and blocking reasons:
b. Invoice Reduction
c. Variances without reference to an item
d. Releasing blocked invoices

Variances and Blocking Reasons:

If there is any variance in the goods like price, quantity as system propose the values from PO. Any variance we
need to check the reason. So for minor variance we keep tolerance limits.
If within the limit, no block of invoice.
If the tolerance limit is crossed then we can post the invoice but the payment is blocked. Even if single line item
is beyond the tolerance limit payment is blocked.
Variances: Quantity, Price, Purchase order price quantity, Date
Quantity variance: when the invoice quantity is more than GR, the excess amount will be updated to GR/IR
clearing account. Later when the remaining quantity is done in GR the remaining amount adjusted to GR/IR
account and to stock clearing account
Eg: PO-100, GR-50, IV-80

Price variance: When the price variance occurs the account movement depends on how the material is valuated
i.e standard price or moving average price.
Eg: PO : 100 pcs at 13 rps
GR: 100 pcs at 13 rps and the IV: 100 pcs is 12 rps
The invoice is lower but when we post the invoice the accounts are GR/IR will be taken from PO price.
Vendor account will be taken from IV price.
If the material is valuated with standard price control the system posts the difference to the price difference
account (PRD). And the standard price remains unaffected.
If the material is valuated with MAP, the price variance will be given to the stock account if there is sufficient
stock. This changes the moving average price.

Quantity and price variance : When the invoice is posted before GR, system posts invoice value to GR/IR
clearing . This is cleared at GR.
If already IV is cleared and the GR quantity greater than the IV, then for remaining amount the price is taken
from PO.
If the Invoice qty is greater than GR, then system clears the GR/IR account for invoice and posts the differenc to
stock account or PRD based on the price control.

Tolerances:

Other blocking reasons: Can be blocked due to quality inspection.

Blocking due to amount: In customizing we will keep block if the line item crosses upper tolerance limit.
SPRO—material management--- Logistics invoice verification—Invoice block ---Item amount check --- activate
item amount check ---

For invoices w/o reference to a purchase order or with reference to a PO use customizing for material
management under Logistics invoice verification – Invoice Block – Set tolerance limits, where we can maintain
limts for company code .

Invoice Reduction: If there is a variance in an invoice when compared to the expected quantity or expected
amount and we cannot accept the difference, we can reduce the invoice.

In such cases we have to select the correction indicator vendor error to reduce invoice and enter the invoice
quantities or values that differ from the default quantity or value suggested by the system separately into the
column aty acc to vendor and amount acc to vendor.

When we post the reduced invoice, the system creates two accounting documents. The first document reflects
actual values and the quantities. The second document credit memo for the difference between the actual
quantities and the default values

Therefore with the invoice reduction, we do not actually reduce the invoice but creating a credit memo
instead(less amount to vendor than he quoted).
Eg PO received for 1000, but vendor sent only 70 pcs. But quoted 1000.
In such case we use the invoice reduction with 1000 invoice and 300 credit memo.

Accounting entries:
PO –100/10 r/pc GR 700/70 invoice is 1000/100
Stock account- Debit
GR/IR account- credit
Input debit- debit
 Clearing account – debit

Credit memo:

SPRO—Material management—Logistic invoice verification –Incoming invoice – tax treatment in invoice

reduction.

Credit Memo: Credit Memo is reversal or return of the goods or services after completion of invoice
verification. As accounting liabilities was posted use credit memo to reverse the liabilities Or simply for partial
cancellation of the invoice we can use this. It leads to post debit entry to vendor account.
Credit Memo: Taking money back from suppliers. 5105600441
A It impacts both quantity

Accounting entries:

Vendor Account -DR-- KBS

GR/IR Account- CR-- WRX
Tax-JIC/JIS/JII-- CR

Subsequent Credit:
If a purchase order item was invoice at too high price and the vendor sends a credit memo we enter a subsequent
credit.
Vendor A/c -- KBS--debit
Material A/c -- PDR/BSX--CR
Tax-JIC/JIS/JII-- CR

α Subsequent Debit: In subsequent debit the total invoice amount changes but the total invoice quantity
doesn't change.

For example, increase of the material after agreement or increase of tax while transportation the vendor raise
the subsequent debit memo to the customer to pay the extra amount.

In subsequent debit/credit the system suggests the entire invoiced quantity ,but no value. The maximum
quantity that we subsequently debit or credit is the quantity that has already been invoiced.

Subsequent credit or debit can be done with reference to a PO only but not with invoice.

The subsequent debit is shown separately in the PO.

In the subsequent debit stock account gets debited as it updates as per the map. It will be added to the price
difference account when standard price.
For PO with account assignment category the system makes the entry to consumption account.

Vendor A/C --KBS -- CR

Inv --BSX---DR
Tax-JIC/JIS/JII- DR

A subsequent debit/Credit exists when an additional invoice or credit memo is received for a transaction
that has been already invoiced.
 Invoice reduction:

At the time of invoice reduction it is possible to post both invoice verification and subsequent credit.
Eg: As per PO vendor should share 1000, but vendor bill is more.

So subsequent credit for 100 and invoice verification for 1000, use invoice reduction.

Invoice Block: There are 3 ways to block invoice

1. Manual Block: At the time of MIRO, user will block
2. Due to Variance: quantity, quality delivery if it is not within the tolerance limits system will block.

3. Stohastic Block: System will block the invoice based on thresold limit.

Tables:

RBKP: Document Header- invoice Receipt

RSEG: Document item: Incoming invoice
BSET: Tax Data Incoming invoice
RBMA: Document item, Incoming invoice for materials
RBCO: Document Item, Incoming invoice, Account assignment

Procurement cycle accounting entries:

MIGO:
BSX: stock A/c DR
WRX : GR/IR A/c CR
FR1 : Freight clearing A/c CR
A credit is recorded on the right side of an account and increases liabilities, equity, and revenue while
decreasing assets and expenses. A debit is recorded on the left side of an account and increases assets and
expenses while decreasing liabilities, equity, and revenue.
Configurations:
Configurations:
 Maintain System msgs
 Incoming invoice - number ranges for RD and RS
 Transaction - Assign NR
 Tax treatment in invoice reduction: while generating sub credit system will consider taxes.
 Maintain reasons for invoice reduction.
 Maintain default values for tax code.
 Configure how exchange rates are treated.
 Configure how unplanned delivery costs are posted: distribute among all line items.
 Activate direct postings to GL and material account and assets: we can post miro w/o PO.
 Activate direct postings to alternate GL accounts
 Maintain item list variants
 Aggregation- check for duplicate invoice( supplier master- co cd level)
 Activate scenarios for LIV

Invoice Block:
Configure determine payment block.
Set tolerance limits
Set stochastic stock
Logistic invoice Posting:

SAP easy access -- Logistics -- Material Management -- logistics invoice verification -- Document entry -- MIRO

We will compare the goods received against physical invoice and post the invoice if everything matches. Only then
liabilities will be generated in our records.

Invoice terms:
Invoice Date: The date on the invoice i.e mentioned on physical invoice.
Reference:
Debit note and Credit note:

DEALER:

DEA: Drawings expenses Assets -----Debit Balance, increase of debit and Decrease of credit.

LER: Liability, Equity /Capital Revenue/Income---- Credit Balance, increase of credit and decrease of debit.

Loan: Liability increases as we need to pay to the bank, hence the credit increases.

Asset: you own it so you will consider it as debit,