Accounts Payable

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

Accounts Payable

Accounts Payable

Accounts Payable

Accounts Payable

Accounts Payable

Accounts Payable

Accounts Payable

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

Accounts Payable

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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Accounts Payable

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

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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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Accounts Payable

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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Accounts Payable

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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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

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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:

Purchasing Data:

Low Risk

This is used by Finance only

High Risk
buyers

Payment Terms Should not be changed without the consent of the

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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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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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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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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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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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

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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

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Accounts Payable

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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

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Accounts Payable

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Accounts Payable

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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.

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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

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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.

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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

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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-ondocuments function or by using transaction code FB03
Accounting>Financial Accounting>General Ledger>Document

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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

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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

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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

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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

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Price variances occur if:

Vendor does not keep to price arrangements made
Commercial entered wrong price in the order item

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Accounts Payable

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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Accounts Payable

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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Accounts Payable

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

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Logistics>Material Management>Logistics Invoice Verification>Further

Processing

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Accounts Payable

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

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Logistics>Materials Management>Logistics Invoice

Verification>Further Processing

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Accounts Payable

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

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Accounting>Financial Accounting>Vendors>Account

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Accounts Payable

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)

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Logistics>Materials Management>Logistics Invoice

Verification>Document Entry

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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

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