Atlas Finance Accounts Payable Training up to date as of R3.4 P7 2014

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The Accounts Payable module records and administers accounting data for

all Vendors. It is also an integral part of the purchasing system: Deliveries

and invoices are managed according to vendors.

Accounts Payable is a subsidiary ledger within the FI module that contains

all vendor information.

All detail relating to individual vendors, transactions and vendor balances is

contained at the sub-ledger level.

The total amount due to all Vendors is simultaneously reflected in GL

reconciliation account(s)

The main AP reconciliation account is 953001 (AP 3rd Part Domestic) and

this cannot be posted to directly. Therefore all activity must be posted in the

Subsidiary Ledger (AP)

The Automatic Payment program or payment run pays due items that are

released for payment

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This slide explains the Subledger concept

All postings for Accounts Payable must take place in the AP sub-ledger. For

example Vendors 1,2 and 3 have values posted against them in the AP

Subledger.

The total for all Vendors (40,200) on the Subledger is then simultaneously

posted to the GL against a reconciliation account

If Users want to see Accounts Payable details, reports must be executed in

the AP module (the sub-ledger). The General Ledger should not be used

for this detailed reporting

Accounts Payable

Accounts Payable heavily interacts with other SAP modules

The purchasing process (Indirect) takes place in EBP Ebuy. The approval for

these purchases also takes place in this module

Once the Purchase Order has been raised the order items can be delivered. At

this point a goods receipt and invoice processing, through Logistics Invoice

Verification or Selfbilling, takes place against the PO takes place in MM.

MM heavily interacts with FI through the GL reconciliation account and FI AP open

items.

The Vendor Master contains MM and FI information

Once the invoice is processed an FI and MM document is posted

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Accounts Payable impacts Material Management (MM), Financial

Accounting (FI) and Controlling (CO)

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Materials Management provides Logistics Invoice Verification (LIV)

functionality:

LIV has the following features:

It completes the material procurement process, which started with

the purchase requisition and resulted in a goods receipt.

It allows invoices that do not originate in materials procurement

(such as services, expenses, course costs) to be processed.

As invoices and Goods Recipts are posted in MM, the module

therefore facilitates the 2-way match process. This is hte key control

in Account Payable

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Logistics Invoice Verification is closely integrated with Financial

Accounting (FI).

It passes on the relevant information about payments or invoice

analyses to this component

Finanical Accounting is key because it contains the General Ledger

as well as the AP Sub-Ledger and Vendor Accounts

Payment of Vendor open items is also triggered through FI

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Logistics Invoice Verification is closely integrated with Controlling

(CO).

It passes on the relevant information about payments or invoice

analyses to these components.

Contorlling is iften impacted through the account assingment of a PO.

Postings are made to Cost Centres, Interal Orders and WBS

Elements

AP balaces must also be passed to Profit Centre Accounting as part

of the AP Period Close

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This slides brings together the integration previously described between

CO, MM and FI

CO is impacted through:

Cost Centres

Internal Orders

Profit Centres

MM is impacted through:

Purchase Requisitions

Purchase Orders

Good Receipts

Invoice Receipts

FI is impacted through:

The General Ledger

Vendors Accounts

Payment

These integrations all impact Treasury with the Cash Position and Liquidity

Forecast

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General or Indirect Buying covers purchases such as:

Media

Services

Technical or Capital Purchases against Projects

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The Golden rule in Indirect Buying is No Purchase Order - NO PAY

A Purchase Order must be in place before commitment is given to Supplier due to

2 main factors:

1. RISK

o Without a contract or standard legal terms & conditions Mars is

exposed to a range of financial, legal, ethical, IP and reputational

risks

2. LOST SAVINGS OPPORTUNITIES

o The buying process makes requisitions visible to Commercial

o Allows for significant savings potential

o Without a requisition in advance this visibility is lost

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There are several steps in the Buying Process:

1. The General Buying process starts with a business need or

requirement for procurement of advertising, stationery, asset etc

2. The Buyer should be consulted to decide on the sources of the

required material. This will normally be through external procurement

(Purchasing) via Catalogs, the Market Place, Contracts or traditional

manual vendor identification, through vendor allocation or through a

tendering process (RFQ) or other sourcing agreement.

3. Once the source is defined the Request is made through a Requisition

4. This is approved by the budgetholder

5. The external purchase order is created and sent to the Supplier to

signify the Buy stage.

6. The order progress is monitored.

7. The goods arrive and the Goods Receipt note (or GRN) is checked

against the PO or in case where 2 Way Matching Framework order is

used, invoice approval will take place later in the process. Under/over

deliveries are noted, and procedures applied.

8. The invoice arrives and is checked against the PO (and the GRN if 3

way matching). If it is in accordance with terms of trade it is cleared for

payment, otherwise procedures are applied.

9. Most items for General Buying will go through a 2 or 3 way matching

process perhaps requiring invoice approval.

10. The invoice is paid on the date due.

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The Specify step is where the Client (Requisitioner) defines the

Business need or requirement as clearly as possible. What type of

purchase procurement of advertising, stationery, asset etc

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The Buyer should be consulted to decide on the sources of the

required material ie what Supplier to use

Which method of procurement should aloes be discussed for

examples Catalogs, Contracts, manual vendor identification, or

through a tendering process

At this point quotes will be discussed and agreed between the Buyer

and the Requisitioner

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Once the source is defined the Request is formalised through a

Requisition

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Once the source is defined the Request is formalised through a

Requisition

The budgetholders agrees the budget to be charged

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During the Buy stage the Buyer places a Purchase Order which

defines the Contract and the Terms & Conditions

If there is no PO no work should stat

The PO should be raised before any work starts, there should be no

after the fact POs

During this phase the style of purchase is defined , for example:

Stand-alone Purchase Order

Framework contract

Direct Order

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During the Receive phase of the process the goods arrive and the

Goods Receipt is made against the PO

This is confirmation that receipt of the good or service has taken

place

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The invoice arrives and is posted against the PO by Finance

The PO and the GRN is checked in a 3 way matching scenario. If

there is a discrepancy the invoice is blocked for payment.

In a 2 way match scenario the invoice is blocked and will require

approval by the Requisitioner

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If approval is required on the invoice, once approved the invoice

block will be released and the invoice will be free for payment

The invoice is paid by Finance on the invoice date due according to

the terms of payment

Once payment is complete the contractual relationship with the

supplier has finished

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If the Specify, Consultation, Request and Approve stages are correct

then the Receive, Invoice and Pay steps will be more efficient with

fewer errors

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eBuy is used in Indirect Buying as a requisitioning tool

It is an Internet solution to map the complete procurement process for indirect

materials & services

All requisitioners can carry out the following tasks in eBuy:

Log requirements & search for suitable products

Check procurement status

Enter goods receipts

Managers are responsible for approving the shopping carts of their requisitioners

where above approval limit and special requests.

Managers receive approvals automatically via the Web-capable SAP Business

Workflow and can navigate from work items directly to the Shop application where

they can approve or reject the shopping cart.

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This slide shows the process flow for eBuy

Create shopping basket

Users either search in a catalog for a suitable material or service, or enter

the requirement directly on the entry screen and transfer this to the

shopping cart.

When an order is placed, eBUY checks whether the shopping cart needs

to be approved

If no approval is required, the system creates one or more follow-on

documents (for example, a purchase requisition, purchase order and/or

reservation). Which document is created, and in which system, depends

on the information on the entry screen and the settings in eBUY.

Approve or reject shopping basket

If one or more budget holders need to approve the shopping basket, for

example, because it exceeds a certain value, the system automatically

submits it to the inbox of those responsible via the Web-compatible

workflow. They then decide whether to approve or reject the document. If

the shopping basket is approved, the system creates the follow-on

documents (for example, a purchase order).

If the budget holder rejects the document, the client receives a message in

his/her inbox, informing him/her of the rejection, the shopping basket gets

deleted automatically

Create purchase order (Assign source of supply)

If SAP creates a purchase requisition, Commercial converts it as before to

a purchase order and transmits it to the vendor.

It can then be sent to the vendor as a printout or by e-mail, fax, or XML.

Confirm goods receipt or performance of service

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After the goods are delivered or the service is performed, Users confirm this by

postings a goods receipt in eBuy.

Process payment

Based on the goods receipt the payment process starts in Atlas this will be dealt

with by Account Payable.

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There are 2 types of approval limits:

Spending Limits for Special Requests

Delegation Limits for Catalogs and Direct Orders

The Spending Limit applies to all eBuy processes and a requisitioner

can buy without approval below limit

The Delegation limit applies to Catalogue & Direct Orders only.

Requisitioner receives a PO instead of requisition if below this limit.

There is an automatic switch to requisition for Buyer over this limit

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There are several different types of purchasing methods:

Requisition or special request:

Once approved this will lead to a Purchase requisition which is

then converted to Purchase Order.

Framework Order:

The end User requests services or goods

A Framework Order covers multiple procurement transactions

over a longer period in cases where the administrative costs of

processing discrete POs would be disproportionately high

This must fall within the rules set up by the buyer

Purchase must be agreed via a written agreed contract

Framework orders are defined via the document type FO

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This slide shows the process for Special Requests and Framework Orders :

Once the shopping basket is created the value is compared to the spending

limit.

If the basket is below the spending limit then a purchase requisition is

created and from that a PO created by the Buyer

If a special request is above the spending limit of the Requisitioner then the

shopping basket must be approved in eBuy. Once approval is complete a

Requisition is created and converted to a PO by the Buyer. If rejected the

shopping basket is automatically cancelled

The PO is then sent to the Supplier to notify them of the order

Once the goods are received a goods receipt is processed (special Request

only)

Once the invoice is received from the Supplier this is processed and paid

Accounts Payable

There are 2 other different types of purchasing method:

Direct Order:

Depending on the value the direct order may

automatically become Purchase Order to

Or the Purchase Requisition will be converted to

Purchase Order by the Buyer

Catalogs:

A catalog takes the end user to a Vendor Website, where

a defined item can be picked out of a range of items

Items are brought back to eBUY shopping cart at Mars

where the account assignment is added

Depending on value of the catalog order the PO will be

automatically sent to Supplier or the Purchase

Requisition will be converted to a PO by the Buyer

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This slide shows the process for Catalogs and Direct Orders

Once the shopping basket is created the value is compared to the spending

limit.

If the basket is below the spending limit then the delegation limit is the

applied

If the basket is above the spending limit of the Requisitioner then the

shopping basket must be approved in eBuy. Once approval is complete the

delegation limit is applied

If rejected the shopping basket is automatically cancelled

If the basket is above the delegation limit then a Requisition is created and

converted to a PO by the Buyer. The PO is then sent to the Supplier to

notify them of the order

If below the delegation limit then a PO is created by the system and sent to

the Supplier to notify them of the order

Once the goods are received a goods receipt is processed

Once the invoice is received from the Supplier this is processed and paid

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Direct Buying includes the following types of purchases:

Raws

Packaging - incl Set up & Origination

Logistics

External Manufacturing

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All external procurement for direct materials must have a contract (except line trial

materials)

The PO will be sent but not the contract the contract is not sent even at

Material level

A Material is anything that has a physical nature that we buy, sell, make, move or

stock as part of our operational business process

Direct Material Buyers ensure valid source lists and info records are in place,

these items will be covered later in the module

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This slide shows the Material procurement process steps:

1. A material requirement is identified (at plant or storage location), either

manually or through MRP (material requirements planning)

2. The source of the required material is determined through external

procurement (Purchasing) or in-house (through Production or Inventory). If

the item is externally procured, the rest of the procurement cycle follows

3. The supplier is identified - manually, through vendor allocation or through a

tendering process (RFQ) or other sourcing agreement.

4. The external purchase order is created.

5. The order progress is monitored.

6. The goods arrive and the Goods Receipt note (or GRN) is checked against

the PO. Under/over deliveries are noted, and procedures applied.

7. The invoice arrives and is checked against the PO and the GRN. If it is in

accordance with terms of trade it is cleared for payment, otherwise

procedures are applied. The Selfbilling process may aloes be used in the

materials procurement process

8. The invoice is paid on the date due.

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Within the material procurement process there are various key requirements

including:

Contracts, the type of which depends on the material and supply process

Purchasing Inforecords

Source Lists

Quota Arrangements

These items ensure that materials are ordered from the right supplier, at the right

time for the correct price

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In Atlas the preferred outline agreement is the contract

This is a form of longer-term purchase agreement against which materials or

services are released (ordered, or called off) over a certain timeframe

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The Purchasing Info record holds information relevant to a Material,

Supplier and Plant including:

Last Price Paid

Lead time (planned delivery time)

Tax code (needed for Self Billing)

During contract creation it is imperative to use the correct item category

because the item category selected tells the system what type of info

record should be generated, for example:

C for consignment

L for sub contracting

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The Sub-contracting info record is particularly important for Finance and it

is created when a contract is first created

It is required to record the standard price of subcontracting services. This

is then built into the total standard price of the material being

subcontracted

As this is used as the Standard Price, info record is not updated when the

price is subsequently changed in the contract.

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The Source list shows available sources of supply for a Material, indicating

the period when procurement from such sources is possible

This enables site Logistics to determine the source that is valid at a certain

point in time by Material by Plant

A source list is MANDATORY for all Materials, all types of supply and all

types of outline agreements.

The source list is automatically created upon completion of Contract

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Quota arrangements enable the system to compute which source of

supply can be assigned for multi sourced materials with overlapping

validity dates

The objective is to guarantee that the agreement quantities will be

respected at the end of the validity date

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Accounts Payable

Master Data is data that is stored in SAP on a long-term basis.

Master data is contained in master records (Customer, G/L Accounts,

Materials, Vendors).

The Vendor Master record is considered a piece of Finance master

data

Other pieces of master data such as cost elements, cost centre and

Projects are Controlling Master Data

Transactional Data results from individual postings in SAP. All

transactional data is assigned to master data.

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The vendor master record contains information on the Vendors (external

suppliers) from a Purchasing and Accounting perspective.

Vendor master data is the data required to conduct business relationships

with Vendors. It controls how business transactions are posted to a vendor

account and how the posted data is processed

A vendor master record contains information such as:

the vendors name and address

the currency used for ordering from the vendor

terms of payment and any discount

names of important contact persons

control account (reconciliation account) to tie to the General Ledger

In procurement the vendor functions as each of the following:

ordering address

supplier of goods

invoicing party

Payee

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The vendor master record contains information about a vendor from a Purchasing

and Accounting perspective.

The vendor master record is structured according to three organizational aspects:

General - the data is valid for the entire client; all of Mars. Examples are

vendors address and tax information.

Company Code (Accounting) the data of the vendor master record is

maintained at the company code level. Examples include, payment method,

payment terms, and invoice amount tolerances. Invoices cannot be created for

a vendor until the Company Code portion of the vendor master record has

been created.

Purchasing Organization - the data of the vendor master record is managed

separately for each purchasing organization. Data that applies to a purchasing

organization can be maintained differently for a specific plant. For example,

the Automatic PO Allowed field could be selected for one plant but not another.

In procurement the vendor functions as each of the following:

ordering address

supplier of goods

invoicing party

Payee

For this reason, several roles (partner functions) can be assigned to the vendor

Vendor (VN): The master vendor, typically the corporate headquarters

Invoice Presented by (PI): Entity through which they are billed and that they pay

The invoicing partys account will be charged instead of the vendors

Payments are based on the document currency, so there is no need to

Accounts Payable

maintain separate vendor accounts per currency

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The vendor master record is made up of three main areas that contain the

following information:

General data including the vendor's address and bank details (data at the

client level is owned by Commercial)

Accounting data is at the company code level owned by Accounting

Purchasing data is at purchasing organization level, which may be wider in

scope than one company but is owned by Commercial

Data that exists at the client level is available to all company codes. Vendor

numbers are assigned to accounts at this level so the Vendor receives the same

account number in all company codes.

The individual company codes store their own information on vendors at the

company code level.

This company code information includes the following:

Reconciliation Account

Sort Key

Payment Terms

Payment Method

Accounting Clerk

Statement Type

Act Clerk Telephone number

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General data applies to every Company Code and every Purchasing

Organisation

It includes the following information for example:

Vendors name

Address

Language

Telephone number

Email

Fax

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General data also includes tax information (VAT number) and bank detail

information

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Several company codes within Mars are likely to do business with the

same vendor.

The general data, such as the address, is stored in the general area. Both

company codes use this data for communication with the vendor.

Each company code maintains specific information for financial accounting

(for example, the reconciliation account) and for their business

transactions with the vendor (for example, payment terms) in their own

company code area.

When you post items to a subsidiary ledger, the system automatically

posts the same data to the general ledger. Each subsidiary ledger has

one or more reconciliation accounts in the general ledger.

The payment method specifies the procedure, such as cheque, EFT, by

which payments are made.

The Company Code data also contains a duplicate invoice check flag.

This should be highlighted so that the systems checks for duplicate

invoices upon processing. The check looks at the Vendor, Currency,

Company Code, Invoice gross amount, Invoice Reference number and

Invoice date to see if they have already been entered in the system on

another invoice

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Correspondence and withholding tax information is also included in the

Company Code data of the Vendor

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Purchasing data contains information that is relevant to the Purchasing

Ogrannsaionts

It includes:

Requests for quotations

Purchase orders

Invoice verification information

Selfbilling information

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Payment Terms are of cash discount percentages and payment periods and are

crucial to our commercial relationship with the vendor. They must not be

changed without the consent of the buyers using the vendor in the same

purchasing organisation.

The GR-Based invoice verification flag means that the invoice can only be

processed once a goods receipt has been made. If this field is selected then the

field "GR-based invoice verification" is preselected in the info record when such a

record is created for this vendor. The field "GR-based invoice verification" is also

preselected in the order item field when a purchase order is created for this

vendor if no info record exists for the vendor and the ordered material.

There are also two flags for selfbilling or evaluated receipt settlement (ERS).

These fields specify ERS or the automatic generation of invoices according to an

invoicing plan is to be used in relation to materials supplied or services

performed against the vendor. If the PO is to be settled up using Evaluated

Receipt Settlement (ERS), this indicator must be set. This indicator must also be

set for purchase orders used in conjunction with invoicing plans when procuring

external services.

The payment program can make payment to a vendor other than the one to

which the invoice was posted. Payment is made to an alternative payee, which

must be specified in the master record.

You can specify an alternative payee in the general data area and in the

company code data area. The alternative payee specified in the general data

area is used by every company code. If you specify an alternative payee in both

areas, the specification in the company code area has priority.

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FK03 - Accounting>Financial Accounting>Accounts Payable>Master

Records

XK03 Logistics>Materials Management>Purchasing>Master

Data>Vendor>Central

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Local or Regional Master Data Teams, for example the CVT in Europe

have the following role:

Responsible for Vendor Master data creation and changes

Increase Control and Expertise around Master Data

Ensure that there is no Duplication of Vendors

Ensure data maintained according to GRD standards

Reporting on vendor information

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Storing Vendor master data centrally and sharing it throughout the

organisation means it only needs to be entered once

This prevents inconsistencies in master data. If a vendor changes their

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address, only have to change this once

All Vendor Master Data changes should be made in AMP, the Global Master

Data box

Once updated in AMP the changes will be transported to the three

Production boxes where they will need to be confirmed by the Accounts

Payable Team

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All requests to change data in Address and Control views of General or Purchasing Organisation data should come from Buyer

If the Buyer has written confirmation of a change from the Vendor then no prior agreement is needed to make a change

All requests to change bank details or Company Code data should come from Accounts Payable

To add a bank account, Template rule is that there is only one account per currency

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There are 3 classifications of the type of data that can be modified:

Low Risk - Data which if changed will not impact other users

Medium Risk - Data which if changed will impact other users but will not expose Mars to significant risk

High Risk Sensitive data that needs to be strictly controlled and could significantly impact both users and Mars if it is not

Below are examples of changes that fall into each category:

Address Data:

Low Risk None - General data is used globally

Medium Risk Name, Address (Street, City, Post Code, Main Telephone, Main Fax

High Risk Email / Zetafax

Control Data:

Low Risk None

Medium Risk Tax Numbers, VAT Number, Credit Info Number (DUNS Number)

High Risk None

Payment Transactions:

Low Risk None

Medium Risk None

High Risk Bank Data - account no, Swift code, IBAN

Accounting Information:

Low Risk Payment Methods

Medium Risk None

High Risk Payment Terms

Withholding Tax:

Low Risk This is used by Finance only

Purchasing Data:

High Risk Payment Terms Should not be changed without the consent of the buyers

High Risk Goods Receipt Based Invoice Verification

Partner Functions:

High Risk Partner Functions

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A List Changes report creates a list of changes made to Vendor master

data, including:

Date, time, and user ID of the change

Old and new values of the changed fields

A List Changes screen displays the changes for a specific vendor

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S_ALR_87012089:

Accounting>Financial Accounting >Accounts Payable >Information

System>Reports for Accounts Payable Accounting>Master Data FK04:

Logistics>Materials Management>Purchasing>Master

Data>Vendor>Central

XK04:

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Vendor is blocked for automatic payment until approval or confirmation of changes by

AP Team

Given that vendor master data contains sensitive information it is important that we

protect these fields against incorrect or unauthorized changes.

This protection is based on dual control, which means that every change made to an

important field has to be confirmed by another person.

The master record is blocked from the payment run until the field change has been

confirmed.

The sensitive fields in the customer/vendor master records that are controlled using

dual control are defined in the Customizing table T055F.

Incorrect master data might lead to serious problems. Therefore, the highest level of

security is required when creating or maintaining master data. This is vital to protect

important master data fields so that incorrect or unauthorized changes are not made.

Changes can be confirmed either individually, using transaction FK08, or in a list,

using transaction FK09.

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This slide shows the fields that are considered as sensitive in the configuration

If these fields are changed the Vendor will become unconfirmed and blocked for

payment

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Accounting>Financial Accounting>Accounts Payable>Master

Records>Confirmation of Change

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Vendor accounts that should no longer be posted to can be blocked from posting.

The block set can be cancelled at any time.

When setting a posting block, all company codes can be blocked or individual

company codes can be blocked

When accounts are blocked using central maintenance, the system sets the following

blocks:

Posting block, which wont allow postings

Purchasing block, which prevents order processing in certain or for all purchasing

organizations

If a supplier provides unsatisfactory performance, Units may wish to prevent further

transactions taking place. An Accounting block my be used in this case to block

within the Company Code to prevent posting and payment taking place

A Vendor Account should only be blocked if there are no more open items in the

account. If an account is blocked, the open items cannot be cleared

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If a Vendor is blocked at the General Data level all relevant parties need to be

informed

If a Vendor is blocked for purchasing only then all Buyers to be informed

If a Vendor is blocked for payment then all Buyers and Accounts Payable to be

informed

If the Vendor is to be deleted it is important that Accounts Payable are consulted

beforehand

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It is not possible to delete a supplier master record if any line items

The effect of marking an item for deletion is to indicate that the supplier should be

moved from on-line to offline (archived) data.

Before master data can be deleted, a deletion indicator needs to be set in the master

record. This can be cancelled if the archiving program has not yet been executed.

A vendor master record must be blocked before it can be marked for deletion

A master record marked for deletion is not deleted in the archiving run

(reorganization) if its account still has transaction figures in the system that need to

be archived.

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Accounts Payable

Purchase orders represent a formal request to provide materials or services

A purchase order is normally the output from the requisition phase, and represents

goods or services whose procurement has been approved

Purchase Orders are used for specific/oneoff purchases

The Purchase Order identifies:

The Supplier/Vendor

The items required Material or Services

Quantity ordered

Price and Terms

The delivery point and date

The order pricing conditions

There are key flags on a PO including:

Item Category

Account Assignment

GRIR flag

GR valuation flag

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The item category on the PO determines whether the item defined in a PO

Line:

Requires a material number

Requires an account assignment

Is to be managed as a stock item

Requires a goods receipt (GR) and/or an invoice receipt (IR)

L & K are often used for Subcontracting and Consignment

B & D are used for frameworks signifying a Limit Framework to Service

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Accounts Payable

The Account Assignment specifies the objects that can be charged via the

PO, for example:

Cost Centres

WBS Elements

Internal Orders

Work Orders

The Account Assignment Category controls which account assignment data

is necessary on the PO

For example P means that a WBS must be entered

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Accounts Payable

There are 3 important flags on the Delivery tab of the PO, including:

Good Receipt:

This specifies whether a goods receipt is allowed and expected for

the order item

GR Non Valuated:

This flag specifies that the goods receipt for this item is not valuated

Valuation of the item will take place on invoice verification

This indicator must be set in the case of multiple account assignment

for example.

This should be used on very rare occasions

Delivery Completed

This indicates that the item is to be regarded as closed with all

deliveries completed

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Accounts Payable

There are 3 important flags on the Invoice tab of the PO, including:

Invoice Receipt:

This specifies whether an invoice receipt is expected or not

If the indicator is not set, goods are to be delivered for free

Final Invoice:

Indicates that the last invoice has been received and no further

invoices are expected PO commitments are reset

However, the final invoice indicator does not prevent further invoices

from being posted.

Furthermore, it does not replace GR/IR account maintenance in the

event of a variance between GR quantity and invoice quantity. Any

differences must be cleared using GR/IR clearing

GR-Based invoice:

Invoices relates not to the PO, but to individual deliveries

If this is flagged a goods receipt GR must occur before the invoice

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Accounts Payable

Logistics>Material Management>Purchasing>Purchase Order

Header Tabs:

Delivery/Invoice Payment Terms & Currency

Conditions Conditions on the PO

Additional Data VAT Number

Org Data Purchasing Org

Status Ordered, delivered, invoiced values

Item Overview:

Account Assignment category

Item Category

Material

Net Price

Item Detail:

Delivery GR flags

Invoice Invoice flags

Account Assignment for the PO

Purchase Order History postings against the PO

Texts PO texts

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A Framework Order is a special type of Purchase Order

Framework Orders have limited validity determined by start and end dates

They can also be limited in terms of value, this is determined by the order

value on the document

Framework Orders should be backed up by written agreement outlining for

what and by whom the order can be used

Goods or services are either supplied automatically (on demand) or by user

call-off outside of SAP

The goods or services not received in system, which means there are no

Goods Receipts against a Framework Order

Budgets are therefore impacted when the invoice is processed against he

Framework Order

Framework Orders operate a 2 way match between the invoice and the PO

and will therefore be subject to approval

Payment of invoices against a Framework Order will therefore only happen

once the budgetholder has approved

Multiple invoices can be entered against one Framework Order

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Framework Orders are linked to the written Contract agreement in

SAP

Goods or services are either supplied automatically (on demand) or by

user call-off outside of SAP

The goods or services not received in system and all invoices received

must be approved

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Framework Orders should only be used in certain circumstances

They are generally suitable for recurring, regular amounts, for example:

Insurance

Telephone bills

Temporary factory staff

As a general rule they should be used when the exact price, quantity or

other factor is not known

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When viewing a Framework Order there are several things which stand out:

Framework Order can be seen in the top left-hand corner

Account assignment category is likely to be 1 or 2

Cost centre w/o GR

Order w/o GR

Item category likely to be D (Service) or B (Limit)

Limits should be entered on the Limits tab under the item view

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Logistics>Material Management>Purchasing>Purchase Order

Header Tabs:

Delivery/Invoice Payment Terms & Currency

Conditions Conditions on the PO

Additional Data VAT Number

Org Data Purchasing Org

Status Ordered, delivered, invoiced values

Item Overview:

Account Assignment category

Item Category

Material

Net Price

Item Detail:

Delivery GR flags

Invoice Invoice flags

Account Assignment for the PO

Purchase Order History postings against the PO

Texts PO texts

Accounts Payable

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Logistics>Materials Management>Purchasing>Purchase Order>List

Displays

Another report is available in the same menu path that allows POs by

material to be displayed - ME2M By Material

There are also similar reports that allows POs to be displayed by different

types of Account Assignment:

ME2J By Project

ME2K By Account Assignment

These are displayed under the following menu path:

Logistics>Materials Management>Purchasing>Purchase

Order>List Displays>By Account Assignment

Accounts Payable

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Accounts Payable

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Accounts Payable

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Accounts Payable

The goods receipt phase is a key control as it identifies the quantities of goods

received and acts as the 2nd part of the three way match conducted when the

invoice arrives.

At the time of goods receipt material & accounting documents are created to

record the event

These documents can be seen on the PO in the purchase order history tab

The goods receipt is the responsibility of the Budgetholder to perform

The GRN in SAP R/3 is also important because it is the stage where the supplier

is evaluated against the promised terms of supply. Typically several criteria are

considered:

Timely arrival

Quantity compliance

Quality compliance.

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The goods receipt has several purposes:

It makes accounting entries to record liability for goods received

pending the supplier invoice

The postings ensures valuation on the P&L and a liability for

payment shown on Balance Sheet

The liability is recorded in a Goods Receipt - Invoice

Reconciliation account or GR-IR account, which effectively acts

as a control account.

The liability remains until the invoice is processed

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Within the system there is the option to tick the non valuated goods receipt flag

This should be used in limited circumstances as it is a sub-optimal process

The issue is that no postings are made to a budget at the point of GR Postings are only made when the invoice is processed This increased the workload for S&F in terms of managing the

accruals process at Period Close and Year End

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This slide shows the postings that take place when a goods receipt is posted.

The document type of a goods receipt is always WE and will be processed using movement type 101

The example used on the slide is for a generic expense PO with a Cost Centre as the Account Assignment

In the General Ledger the following postings takes place: DR P&L expense accounts according to the Account Assignment

of the PO CR Generic GRIR Account

In controlling the Cost Centre on the PO is posted to together with the expense account

At the goods receipt stage no posting take place against the AP subledger

Depending on the type of material being purchased there are other GRIR Accounts. These will be posted to automatically depending on the type of material used on the PO

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The example used on this slide is for Pack Material PO The document type of a goods receipt is still WE and will be

processed using movement type 101 The main difference between a material PO and a generic PO is in

the accounts used In the General Ledger the following postings takes place:

DR Material Stock Account at the value of the standard price of the material multiplied by the quantity of the goods received

CR Packs GRIR Account at the value of the PO At this stage there are no postings to Controlling or to the AP

Subledger The scenario may arise where the material price on the PO is

different to the standard price of the material If this is the case the difference is posted to a PPV account, in

this example 222020 for Packs PPV. This PPV posting is also posted to a Cost Centre in Controlling.

As per the example at the bottom of the slide: The standard Price is 100 per case The PO is for a quantity of 10 The PO price is 120 per case The total value of the PO is 1200 (120 x 10)

When the goods receipt postings take place: Stock is posted at 1000 standard price (100) x PO quantity

(10) GRIR is posted at 1200 PO price (120) x PO quantity (10) PPV is posted as 200 difference between 1000 and 1200

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Logistics>Material Management>Purchasing>Purchase Order

Header Tabs:

Delivery/Invoice Payment Terms & Currency

Conditions Conditions on the PO

Additional Data VAT Number

Org Data Purchasing Org

Status Ordered, delivered, invoiced values

Item Overview:

Account Assignment category

Item Category

Material

Net Price

Item Detail:

Delivery GR flags

Invoice Invoice flags

Account Assignment for the PO

Purchase Order History postings against the PO

Texts PO texts

Accounts Payable

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Accounts Payable

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Accounts Payable

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Accounts Payable

Invoices are posted using LIV or Logistics Invoice Verification

Processing the invoice against the PO facilitates the 3rd part of the 3 way match

process

Once the invoice has been booked in MM an FI document is also created which

then flows through to the Vendor account (line item) ready for the payment run in

FI. This invoice posting updates the PO and the PO history tab

If you need to cancel a vendor invoice that has been booked against a PO this

needs to be performed in MM

The invoice receipt phase concludes the buying activities in the MM module.

The receipt of the invoice cancels the temporary recording of liability in the GR/IR

account and transfers the liability to Accounts Payable for the supplier and via the

suppliers reconciliation account assignment, to the reconciliation account

(Purchase Ledger control account) in the general ledger.

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This slide shows the key fields of the Logistics Enter Invoice screen (MIRO) and Logistics Park Invoice (MIR7)

These are similar to the fields of the Vendor Invoice screen (FB60) The main difference is the Purchase Order/Scheduling Agreement field. The purchase order number is entered

in this field to tie the invoice to the purchase order and goods receipt. The transaction MIRO is also used to enter a credit memo. The value of the Transaction field can be changed

from Invoice to Credit Memo for this scenario To park an invoice from MIRO, select Edit > Switch to document parking Header - key fields: Invoice date The date on the invoice. This date, in conjunction with the vendors payment terms (on the vendor

master) determine the payment due date for this invoice. The Automatic Payment program uses the Invoice Date field to determine which payment run the invoice will be included in.

Posting Date - Determines the period to post the invoice to and defaults to system date Reference The vendors invoice number is entered in this field Amount The total amount of the invoice including taxes into this field. Currency This field is not labeled but is to the right of the Amount field. Indicate the currency that the payment

is to be issued in. Calculate tax field can be flagged if Users want the system to calculate tax automatically based on the tax code Tax amount The amount of the taxes for this invoice. Tax code This field is not labeled, but is to the right of the Tax Amount field. The tax code controls whether or

not the item is to be taxed and at what rate. For VAT type taxes, the tax code entered assists in calculating the tax amount and control where it is posted in the GL.

Text Enter a description of the invoice. Allocation Area: Procurement Document Category indicate the type of procurement document to associate to this invoice.

Common choices are PO number/scheduling agreement, service entry, or vendor. Procurement number indicate the number of the procurement document or vendor. Currency and payment method default to MIRO from the PO, (via the vendor master record) Line Items: Line Item information for the PO is displayed here Posting directly to G/L Accounts and Material Accounts: With PO reference - To post an invoice with reference to a purchase order to G/L accounts or material accounts,

proceed as follows: In the screen area Allocation, click PO reference tab Assign the invoice to a document and select the goods items to be settled. Choose either the tab page G/L account or the tab page Material and enter data as required.

At the top of the screen there is a Balance field this is useful as it shows if there are any errors in the invoice. In order to post the invoice the balance in this field should be 0 and the status icon should be green. Any error messages can be accessed by clicking on the Messages icon at the top of the screen.

Accounts Payable

Purchase Order: When the invoice is posted the GRIR clearing account is cleared and

the vendor line is credited In the GL the following posting take place:

CR 953001 AP Reconciliation Account DR 953071 In this case general GRIR, but other GRIR account

will apply depending on the material type In the AP subledger the credit it posted to the Vendor When an invoice is posted using MIRO an RN document type is

posted

Framework Order: When the invoice is posted the vendor line is credited and a P&L

expenses account is debited In the GL the following posting take place:

CR 953001 AP Reconciliation Account DR P&L Expenses depending on the type of cost

In the AP subledger the credit it posted to the Vendor When an invoice is posted using MIRO an RN document type is

posted

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Logistics>Materials Management>Logistics Invoice

Verification>Document Entry

To Show Both MM doc Number and FI doc Number you can maintain your

user Profile

System User Profile Own Data Parameters tab

On a blank line, in the Parameter ID field, enter ivfidisplay and in the

Parameter Value field, enter x

To save, click the SAVE icon

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Mars Add Ons>Finance>Accounts Payable

This tool is an upload program to upload multiple MM invoices

Accounts Payable

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The system checks for duplicate invoices by comparing the following:

Vendor

Company Code

Currency

Invoice Date (Document Date field)

Vendors invoice number (Reference field)

Amount

If an invoice exists with these same field values, the possible duplicate

invoice warning message displays with the document number to review

If this message appears, the user should review the indicated document

number and verify that the invoice is not being entered again.

There is an internal review mechanism to warn a user invoice entry matches

with an existing entry

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Preliminary posting or parking allows Users to enter data and store it without posting it. This allows you time to ensure that the analysis for the charge is correct.

A document is parked when a user cannot finish the document (invoice or credit memo) or needs to gather further information before posting the document

Parking a document assigns a document number to the transaction without updating the account transactions or totals

Parked documents can have any field on the document changed or updated, which allows for another user to verify that the right accounts were being used, etc. Parked documents can be changed as often as required

When no further changes are required, it is possible to post the parked document. Only then does the system carry out the normal account movements and make the necessary updates

Parked documents must be posted in order to update the accounts balance When a parked document is posted, the document number does not change. Parking a document should not be confused with holding a document. If you

hold a document it is simply suspended and no accounting or other update takes place. Held documents are assigned a manual document reference.

The advantage of parking documents is that you can evaluate the data in the documents online for reporting purposes from the moment they are parked, rather than having to wait until they have been completed and posted.

The preliminary posting function can be of great advantage if: Users are interrupted when entering an invoice, this saves duplicate data

entry Users wish to clear up some questions before you post an invoice. Users wish to split the invoice authorisation 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

Depending on the G/L account it may require a cost object assignment e.g.; Cost Centre, Internal order

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To make changes and re-park the document, types the changes and select

the Save as Completed button.

Select the Simulate button to see the entire document before posting.

A posted document has the same document number as the parked

document.

Accounts Payable

Logistics>Materials Management>Logistics Invoice

Verification>Document Entry

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Logistics>Materials Management>Logistics Invoice

Verification>Further Processing

Invoices posted can be reviewed by using transaction MIR4 that will show

the logistics view of the document

Accounts Payable

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When an invoice is booked in MM this creates an FI document which then

flows through to the vendor account (line item) ready for the payment run in

FI.

The relevant accounting documents can be reviewed by using the follow-on-

documents function or by using transaction code FB03

Accounting>Financial Accounting>General Ledger>Document

Accounts Payable

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After the invoice has been posted, the document appears as an open item

on the vendor account (payment proposal list).

Accounting>Financial Accounting>Accounts Payable>Account

Accounts Payable

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This slide summarises the movements that take place for a Purchase Order and

how they link together, for example

A PO is raised for a quantity of 50 cases at $2 per case

A goods receipt is posted for a quantity of 50 cases against this order, the

value is taken from the PO price (2 x 50 =100):

DR P&L Expense

CR GRIR Account

An invoice arrives for 50 cases at $2 per case (100) which:

DR GRIR

CR Vendor

As a result the GRIR is cleared

This example also illustrates the principle of a 3 way match in this example the

invoice would be processed and remain free for payment

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The 3 way match process is a key control in AP

This check take place against Purchase Orders

A 3 way match is achieved if the PO, Goods Receipt and Invoice are

all the same

If a 3 way match is not achieved then the invoice is blocked for

payment until any differences are approved

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For example:

1. This shows the net price of the PO

2. Shows the price of the Goods Receipt

3. Shows the value of the invoice

These should be equal for a 3 way match to be achieved

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An invoice can be blocked for payment if there are price and/or quantity

differences between invoice amount and order amount.

A blocked invoice cannot be released for payment until the blocking

indicator is removed from the document which is set during posting.

If a variance in an invoice item is accepted and the proposed value

overwritten, the system checks if the variance is within the tolerance limits

defined in Customizing. If an upper tolerance limit is exceeded, the invoice

is posted but blocked for payment. The invoice has to be released for

payment in a separate step

Accounts Payable

An invoice can be lined to the Attachment List of the document

When an invoice is posted, the following occurs:

The individual items are posted to the corresponding accounts

A document is created

The purchase order history is updated

The transaction asks for a barcode number, this can be scanned in or typed in

This barcode can then be linked to a scanned image

Accounts Payable

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Accounts Payable

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Accounts Payable

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Accounts Payable

The system checks every invoice for variances

Variances occur if a quantity or value in at least one item is invoiced

at a different value to the one the system proposes

If the variance is accepted on an invoice item and the proposed value

overwritten, the system checks if the variance is within the tolerance

limits defined in Customising.

If an upper tolerance limit is exceeded, the invoice is posted but

blocked for payment

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The system checks every invoice for variances.

Tolerance limits for each variance type can be set in the Customizing system for

the invoice check.

If the invoice is within the tolerance limits, the invoice is posted and ready for

payment through the Payment Run

If the invoice is not within the tolerance limits, the system displays a message to

this effect.

If an upper tolerance limit is exceeded, the invoice is blocked for payment

A blocked invoice must be released in a separate step before it can be paid

Once the invoice is blocked the Payment block field is filled in the vendor line item

of the invoice document. Financial Accounting is then unable to settle the invoice

via the payment run

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When an invoice that requires a block is posted the system

automatically sets an R in the field Payment block field in the vendor

line of the accounting document.

For Framework Orders this is likely to be a C

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There are 3 main types of variances:

Quantity:

Invoice quantity is not the same as the difference between the quantity

delivered and the quantity invoiced so far

Lower priced items are therefore allowed relatively large quantity variances,

whereas more expensive items are allowed only very small variances.

In the example a goods receipt was made for 40 cases but the invoice is

received for 50

This results in the invoice being blocked

Price:

The price in the invoice differs from the price in the purchase order

In the example the PO price is $5 but the invoice is charged at $6

This results in the invoice being blocked

Price and Quantity:

A variance in both quantity and price

In the example a PO is raised for 10kg at $20 per kg

The invoice arrives for 15kg at $25 per kg

This results in the invoice being blocked

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The difference between quantity delivered and quantity invoiced so

far for goods received for a PO is the quantity still to be invoiced

A quantity difference arises when the quantity to be delivered is not

the same as the difference between the quantity delivered and

quantity invoiced so far for goods received for a PO.

In the example:

The quantity to be invoiced is 50 (quantity delivered 50 quantity

invoiced so far 0)

When the invoice is processed the quantity entered (80) is

compared to the value (50). In this case they are not the same so

the invoice is blocked with a quantity difference.

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This shows a visual of the previous example

As in the case of invoices without variances, the GRIR account is

cleared and the amount invoiced is posted from the GR/IR clearing

account to the vendor account.

When quantity variances occur, the following applies:

If the quantity invoiced is larger than the quantity received, the

system expects that the extra quantity invoiced will still be

delivered.

If the quantity received is larger than the quantity invoiced, the

system expects a further invoice to arrive.

When the goods or invoice are received, the balance is cleared on

the GR/IR clearing account.

If no more goods or invoices are received, the balance remains open

on the GR/IR clearing account. The GRIR account must be

maintained at regular intervals to clear these amounts manually.

The quantity difference of 300 (30 x $10) is still on GRIR, awaiting a

future GR

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Quantity variances occur if the vendor: Sends a partial invoice for one or more deliveries - In this case,

the system expects to receive more invoices (or return deliveries) Sends an invoice for a delivery that the goods receipt has not yet

been posted for - In this case, the system expects further goods receipts (or credit memos). The system will block the invoice item when the document is posted, depending on how the tolerance key DW is set (quantity variance to GR quantity = zero).

The invoice is for a service item for which an invoice has already been posted

There is also a special case for goods receipt based invoice verification: If goods-receipt based Invoice Verification has been defined for

an order item and the goods receipt has not yet been posted, the system does not allow you to post the invoice.

If goods-receipt based invoice verification has been defined for a purchase order item, a goods receipt has been posted, and an invoice is now entered for a larger quantity, the standard system is configured to display a warning message. This enables the User to post a quantity larger than that received at the time of invoice receipt even when goods-receipt based invoice verification is active. Note that no more goods receipts can be matched to this invoice. As a result, it is no longer possible to tell from the purchase order history which goods receipt items belong to which invoice items

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A price variance occurs if the price per unit of measure differs to that

in the purchase order, based on the quantity and amount invoiced.

The system establishes whether the value invoiced exceeds the

expected price (quantity invoiced * net order price) by more than the

tolerance for price variances set in Customising

When the invoice is posted, the system blocks the invoice with the

blocking reason "price variance".

In the example on the slide:

The Order was raised for 100 pieces at $1.3 per piece

100 pieces were delivered

When the invoice arrives the 100 pieces have been charged at

$1.24 per piece

Accounts Payable

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Price variances occur if:

Vendor does not keep to price arrangements made

Commercial entered wrong price in the order item

Accounts Payable

135

Quantity and price variances occur when an invoice not only contains

a different quantity to that still to be invoiced, but also a different price

basis to that specified in the purchase order

In the example:

The Order was raised for 100 pieces at $10 per piece

60 pieces are delivered

When the invoice arrives the 100 pieces have been charged at

$11 per piece

The system calculates the following the quantity variance as

follows:

The quantity to be invoiced is 60 (quantity delivered 60

quantity invoiced so far 0)

When the invoice is processed the quantity entered (100) is

compared to the value (60). In this case they are not the

same so the invoice is blocked with a quantity difference.

The system calculates the following the price variance as the

difference between the net price on the PO and the net price on

the invoice

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Any invoice that is blocked by LIV will need to go through an approval process so

that it can be released

In Europe Smart Approval issued as an invoice approval tool:

This is a Lotus Notes based system

It interfaces to SAP at regular intervals to release blocks automatically

Smart Approval has the following blocking reasons:

Q Quantity block

Q Invoice status: no goods receipt : Quantity block, no Goods Receipt

P Price block

PQ Price and Quantity block

N Needs authorisation : Occurs where a PO does not require a goods

receipt e.g. Contractor on site

M Manually blocked by AP Clerk

P Parked : Usually invoices are parked as they are incomplete, for instance

no PO number is quoted and account assignments are unknown

The other option is manual invoice approval

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Quantity Variances are approved by relevant purchasing/receiving Associate the

requisitioner

Price Variances are approved by Commercial

Favourable Price variances do not require approval

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139

Occasionally, invoices are blocked for payment as a result of Invoice

Verification due to price and/or quantity variances.

A blocked invoice cannot be released for payment until the blocking

indicator set during posting is removed.

Once the user has investigated and resolved the reasons for the block, the

invoice can be released.

Examples:

Price Variance - After consulting the vendor, the buyer changes agrees

or approve the price. The blocking reason is no longer valid. However,

you still have to release the invoice before it can be paid.

Quantity Variance - For a purchase order for 100 pieces, 80 pieces are

delivered, but 100 pieces are invoiced. The invoice is entered and

blocked for payment. A day later, the missing 20 pieces are delivered.

The blocking reason is no longer valid. However, you still have to release

the invoice before it can be paid.

Once approved the invoice is released for payment

Accounts Payable

Logistics>Material Management>Logistics Invoice Verification>Further

Processing

Accounts Payable

140

A Credit Memo relates to volume and price, whereas subsequent credits only

relates to price. When credit memo is posted, the total quantity in the purchase

order history is reduced by the credit memo quantity. If the requirement is to keep

the total quantity invoiced to, the credit memo would be posted as a subsequent

credit

Mars usually receives a credit memo from a vendor if we have been overcharged

or if goods are returned.

An invoice cannot be cancelled if the invoice is already paid, therefore a credit

memo should be requested

Invoice cancelling is normally used if a processing error has been made upon data

entry

When a credit memo is posted, the system makes a number of checks:

The maximum quantity that can be credited is the quantity that has already

been invoiced. If you enter a larger quantity, the system issues the following

error message - Reversal quantity greater than quantity invoiced to date

If a credit memo is posted for the same quantity as was invoiced so far, the

system expects that the total amount invoiced so far is also credited.

Otherwise, a situation might arise where you had no stock for a material but a

stock value.

Credit memos are posted as RC document

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Posted transactions must be reversed or cancelled from their source

An invoice created using Logistics Vendor Invoice (MIRO) must be reversed

or cancelled in Logistics

MR8M is used to cancel an incorrectly posted invoice

This transaction only reverses the MM portion of the invoice; FI documents

must be cleared manually

There are two different cases for cancellation:

If an invoice is cancelled, the system automatically creates a credit

memo

If a credit memo is cancelled, the system automatically creates an

invoice

The system takes the amount and quantity for the credit memo or invoice

from the invoice or credit memo to be cancelled, thus avoiding any

differences between the invoice and the credit memo or the credit memo

and the invoice.

An invoice document can only be cancelled if:

It was posted in Logistics Invoice Verification

It has not already been cancelled

It is not a cancellation document for another document

It has not yet be paid

Accounts Payable

Logistics>Materials Management>Logistics Invoice

Verification>Further Processing

Accounts Payable

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Vendor open items need to be cleared manually

This is typically required when an invoice has been entered using

transaction MIRO and then subsequently cancelled using transaction

MR8M.

When this happens only the MM portion of the invoice is reversed,

the FI documents must be cleared manually

In order to clear the Vendor open items on a vendor account need to

be present that can be matched (debit and credit line items) and

cleared off

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Through this process, different line items of a vendor are matched together

and cleared. The user completely controls which open items are to be

cleared together.

The clearing process matches predefined criteria to group together open

items per account

If the balance of the group of open items equals zero in local and foreign

currencies, the items are marked as cleared

The program groups together those items from an account that have the

same:

Assignment field values

Currency in which the General Ledger is updated

Accounts Payable

Accounting>Financial Accounting>Vendors>Account

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146

Subsequent debit or credits exists when an additional invoice or

credit memo is received for a transaction that has already been

invoiced

The System records every subsequent debit/credit in PO history

The System updates the PO on a value basis but not on a quantity

basis. The quantity invoiced does not change, but the total value

invoiced does

A price check is carried out by comparing the value invoiced to date

plus the value of the subsequent debit with expected value based on

PO

If a price variance exceeds one of the upper tolerance limits, the

subsequent debit is blocked for payment

The maximum quantity that can be subsequently debited or credited

is the quantity that has already been invoiced. It is not possible to

post a subsequent debit before an invoice has been processed and

the system does not check the quantity delivered. A subsequent

debit/credit cannot be blocked due to quantity variance.

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Subsequent postings are when there is a need to post a pure price difference

invoiced by a supplier.

A Subsequent credit results from an undercharge ie the vendor is invoicing an

extra charge such as a additional freight charge for being held up

This must have approval by the Buyer

A subsequent debit is when we have been over charged by the Vendor

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If a subsequent debit is not used system would interpret second

invoice as another partial invoice

When entering the invoice quantity and price variance warning

messages would be received

When posting the invoice the quantity update for the PO would be

wrong as the invoice quantity would be updated with 100 pieces.

In the example:

The PO is raised for 100 pieces at $10 per piece

50 pieces are received and a goods receipt is posted

The first invoice is sent for 50 pieces at $10 giving a total of 500

The second invoice is posted for $50 which represents

unforeseen costs for the 50 pieces.

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If a subsequent credit is not used the system would interpret the

credit memo as a reversal

When posting the credit memo the quantity update for the PO would

be wrong as the invoice quantity would be updated with 30 pieces

In the example:

The PO is raised for 100 pieces at $10 per piece

50 pieces are received and a goods receipt is posted

The first invoice is sent for 30 pieces at $10 giving a total of 300

The second invoice is posted for $220 which is 20 pieces at $11

Too high a price was invoices by mistake and therefore a credit

memo is sent for $20 20 pieces at $1 ($11-$10)

Accounts Payable

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Logistics>Materials Management>Logistics Invoice

Verification>Document Entry

Accounts Payable

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Accounts Payable

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Accounts Payable

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Who should create and change Vendor Master data - by the central Data

Administrator CVT or Regional Master data team

The distinction between a PO and FO:

PO = specific one off purchase

FO = recurring where one factor is uncertain

Accounts Payable

Accounts Payable

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