Variances and Blocking Reasons

SAP AG

SAP AG

TAMM30 4.0B

8-1

Variances and Blocking Reasons: Objectives

At the conclusion of this unit, you will know:
How the R/3 System reacts to variances in

invoices and purchase orders

Which variances are recognized by the R/3

System
That you can set tolerances for the individual

variance types
Which account movements take place in the

case of quantity variance and price variance

That you can set the amount above which

invoice items are blocked

That invoices can be blocked at random

(stochastic blocking)

SAP AG

SAP AG

TAMM30 4.0B

8-2

Invoices with Variances

Purchase order
Invoice

Purchase
order

Goods receipt

Tolerances
10%

10%

Variance!
Post

Document
no. 5100012345
created:
blocked for payment

SAP AG

The system checks every invoice for variances.

You set tolerance limits for each variance type in Customizing for Invoice Verification.
If the variance is not within the tolerance limits, the system displays a message to this effect.
If an upper tolerance limit is exceeded, the invoice will be blocked when posted.
You must release a blocked invoice in a separate step before it can be paid.

SAP AG

TAMM30 4.0B

8-3

Variances
Invoice
Goods receipt

GR 40

Purchase
order
5,- UNI

Quantity

50

pcs

Invoice

Price

@ 6.00 UNI

Invoice
Goods receipt
10 pcs = 230g

PO

Purchase order
price quantity

10 pcs @ = 200g
20.00 UNI/g
PO
Planned
delivery date 21.04.98

= 250 g

10 pcs

Invoice
10 pcs

Date

= 250 g

Invoice
R

11.04.98

SAP AG

The system carries out the following checks for each invoice item:
Quantity variance
The system compares the difference between the delivered quantity and the quantity already invoiced
with the invoice quantity.
Price variance
The system compares the purchase order price with the invoice price (invoice value : invoice quantity).
Purchase order price quantity variance
Goods receipt before invoice receipt
The ratio quantity of goods received (purchase order price unit) : quantity of goods received (order unit)
is compared with the ratio invoice quantity (purchase order price unit) : invoice quantity (order unit).
Invoice receipt before goods receipt
The ratio purchase order quantity (purchase order price unit) : purchase order quantity (order unit) is
compared with the ratio invoice quantity (purchase order price unit) : invoice amount (order unit).
Date variance
The planned delivery date is compared with the date of invoice entry.

SAP AG

TAMM30 4.0B

8-4

Quantity Variance
Purchase
order
100 pcs
@ 10 UNI

Invoice
Goods receipt

50 pcs

Goods receipt
Stock account
GR/IR account
Vendor

80 pcs
@ 10 UNI
= 800 UNI

Invoice

500 +
500 -

800 +
800 -

Goods receipt
at a later time
300 +
300 -

Goods receipt

SAP AG

The invoice quantity is larger than the goods receipt quantity. When you post, a balance is created on the
GR/IR clearing account.
You expect another goods receipt. The GR/IR clearing account is cleared when you post the goods
receipt.

SAP AG

TAMM30 4.0B

8-5

Price Variance
Purchase
order
100 pcs
@ 1.30UNI/pc.

Goods receipt

100 pcs

Goods receipt
Stock account
GR/IR account
Vendor account
Price differences

Invoice

130 +
130 -

130 +
124 -

Invoice
100 pcs
@ 1.24 UNI
= 124 UNI

?
6R

Price control

SAP AG

When price variances occur, the account movements differ depending on how the material is valuated.
There are two types of price control:
S Standard price
V Moving average price (MAP)
If the invoice is received after the goods receipt, the following occurs, depending on the price control
used:
In the case of a material with standard price, the price variance is posted to a price difference
account.
In the case of a material with moving average price, the price variance is posted to the stock
account if there is sufficient stock coverage. This changes the moving average price.
If the invoice is received before the goods receipt, the price variance is posted to the GR/IR clearing
account. The price variance is only posted to the price difference account or stock account when the
goods receipt is posted.

SAP AG

TAMM30 4.0B

8-6

Price Variance: Material with Standard Price

Material with standard price 1.20 UNI/pc.
Stock: 100 pcs
Purchase order: 100 pcs @ 1.30 UNI/St.
Goods receipt for this purchase order: 100 pcs
Invoice: 100 pcs @ 1.24 UNI/pc. = 124.00 UNI
Goods
receipt
Stock account
GR/IR account
Vendor account
Price diff. expense
Price diff. revenue

120 +
130 -

Invoice

130 +
124 -

10 +
6-

Material master record

Stock

Value

100
200
200

120
240
240

Standard
price

1.20
1.20
1.20

SAP AG

The price variance is posted to a price difference account.

The material price remains unchanged both at goods receipt and invoice receipt.
The moving average price, which is included in the material master record for statistical purposes,
changes by the amount of the variance.

SAP AG

TAMM30 4.0B

8-7

Price Variance: Material with Moving Average

Price (MAP)
Material with moving average price 1.20 UNI/pc.
Stock:
100 pcs

Purchase order: 100 pcs @ 1.30 UNI/pc.

Goods receipt for this purchase order: 100 pcs
Invoice:
100 pcs @ 1.24 UNI/pc. = 124.00 UNI
Goods
receipt
Stock account
GR/IR account
Vendor account

130 +
130 -

Invoice
6130 +
124 -

Material master record

Stock

Value

100
200
200

120
250
244

MAP

1.20
1.25
1.22

SAP AG

The price variance is posted to the stock account.

The material price changes:
If no stock quantity exists for the invoice quantity, the price variance is posted to a price difference
account.
If stock coverage is available for only part of the invoice quantity, the price variance is distributed
proportionally between the stock account and the price difference account.

SAP AG

TAMM30 4.0B

8-8

Blocking due to Quality Inspection

Subject to GR check
with invoice block

Goods receipt
Material A

Inspection
lot
Usage
decision

Inspection
lot
Usage
decision

Inspection
lot
Accepted

Inspection
lot
Rejected

Invoice

Invoice

Invoice

Material A

Material A

Material A

Blocked due to
quality inspection

Blocked due to
quality inspection

SAP AG

In the material master record of a material you define:

Whether a goods receipt for a material is subject to inspection.
In this case, an inspection lot is created for every goods receipt for this material.
Whether an invoice should be blocked due to quality inspection.
In this case, an inspection lot without a usage decision or a rejected inspection lot leads to an invoice
block.
The system sets reason for blocking I for an item in the following cases:
Goods-receipt-based invoice verification
The invoice is blocked when the inspection lot for the goods receipt concerned does not have a usage
decision or was rejected.
No goods-receipt-based invoice verification
The invoice is blocked when any inspection lot for the purchase order item does not have a usage
decision or was rejected.

SAP AG

TAMM30 4.0B

8-9

Blocking due to Amount

Customizing
Tolerance of amount
Upper limit
1500

Invoice
Material A 1000
Material B 1700
Material C 1600

blocked
blocked

4300
R

SAP AG

You can activate the amount check in Customizing for Invoice Verification. You set a tolerance for the
amount of every individual item for each company code. You do this separately for:
Invoices that reference purchase orders
Invoices that do not reference purchase orders
In Customizing for Invoice Verification, you determine for which purchase orders quality inspections are
to be performed with regard to invoices that reference purchase orders (according to item category and
goods receipt indicator).
If an invoice item exceeds the set tolerance, the item is given blocking reason O.

SAP AG

TAMM30 4.0B

8-10

Tolerances
Tolerances for
Company code
Amounts in

1000
UNI

Absolute lower limit

No check
X
Check limits
Absolute upper limit
No check
Check limits
X

above value 10.00

Percentage lower limit

No check
Check limits
X

above

Percentage upper limit

No check
Check limits
X

above

20.00 %

5.00 %

SAP AG

You define tolerances in Customizing for:

Quantity variance
Price variance
Purchase order price quantity variance
Date variance
The system checks the following value in the case of quantity variance:
Purchase order price x quantity variance
The greater the purchase order price, the lower the tolerated quantity variance.
The system checks the following value in the case of schedule variance:
Invoice value x days variance
The greater the invoice value, the lower the tolerated schedule variance.

SAP AG

TAMM30 4.0B

8-11

Manual Blocking

Invoice
for PO
4151599043
100 pcs
40 pcs

Conventional
Invoice Verification

Item list

Su Fi Ma

X T-M15Z03
1000 UNI
X T-M15Z01
4000 UNI

Shaft
100 pcs
Bearing
40 pcs

Logistics
Invoice Verification

4151599043 Item 10

4151599043 Item 20

Detail screen
4151599043
1000 UNI
T-M15Z03
100 pcs

Item 10
Shaft

Manual blocking
reason

SAP AG

You can block each individual invoice item manually, regardless of whether it is blocked for other
reasons or not.
In conventional Invoice Verification, the manual block is set on the item detail screen.
In Logistics Invoice Verification, the manual block is set on the item list.
In addition, you can set the payment block without reference to an item:
In the vendor line item in conventional Invoice Verification

In the document header in Logistics Invoice Verification

SAP AG

TAMM30 4.0B

8-12

Stochastic Blocking

100%
Threshold value
50%

1000

2000

3000

Invoice

Invoice value

Block

Material A 500.00
Material B 1000.00
1500.00
R

SAP AG

Invoices which do not contain a blocking reason can be blocked stochastically (that is, at random).
You set a threshold value and associated percentage in Customizing.
If the invoice value is greater than or equal to the threshold value, the probability of a block is equal to
the percentage.
If the invoice value is smaller than the threshold value, the probability is calculated on a proportional
basis.
If an invoice is blocked stochastically, the system sets the payment block in the vendor line item. The
individual items are not given a blocking indicator.

SAP AG

TAMM30 4.0B

8-13

Releasing Blocked Invoices

Invoice selection

Make selection

Company code________________________
Fiscal year____________________________
Vendor_______________________________
Purchasing group______________________
Define
processing

Processing
__Change baseline date for payment
__Release automatically
X
Automatic
release

__
Manual
release

SAP AG

Select the invoices you wish to process.

In the time between the blocking and releasing of an invoice, the cash discount period could expire.
When you release an invoice, you have the opportunity to change the baseline date for payment.
You can define whether you want to release the invoices manually or automatically via the field
Automatic release.

SAP AG

TAMM30 4.0B

8-14

Automatic Release
Purchase
order

50 pcs

100 pcs
IR > GR

Invoice
Invoice
blocked
for payment!

80 pcs

50 pcs

Blocking reason no longer valid

X Automatic release
R

Payment program can pay the invoice

SAP AG

Blocking reason Q (quantity) may no longer apply after a further delivery arrives.
Blocking reason D (date) becomes invalid over time.
Blocking reason P (price) may no longer apply if the purchase order price is changed. It does not
become invalid by entering a credit memo for the item.
Blocking reason I (quality) becomes invalid when the goods pass the quality inspection.
Invoices with blocking reasons that are no longer valid must still be released for payment.
In the case of automatic release, the system releases all invoices which:
Satisfy the selection criteria and
Only contain blocking reasons which are no longer valid
Even if only one item has a blocking reason that is still valid, the blocking reasons for all items are
retained.
You can carry out automatic release in the background using program RMMR0200.

SAP AG

TAMM30 4.0B

8-15

Manual Release
Document

Item

510001234
510001234
510001234
510001474
510001503
510001503
510001503
510001503

001
003
007
001
001
002
007
009

Q
x

x
x

x
x

Total

Individual release

Collective release

Place cursor on item

Activate item
R

Release

Release

SAP AG

You can delete individual blocking reasons in the list of document items. When you delete the last
blocking reason in an invoice, the system releases the invoice for payment.
You cannot release individual invoice items; you can only release an entire invoice. Therefore you must
total up the list before releasing it. Each document number is only listed once in the totals display.
To release a single invoice, you use individual release.
To release several invoices at the same time, you use collective release.
When invoices are released, they remain in the list. A new list is created only when you re-enter the
release function.
Once you have released an invoice, you cannot cancel the release using this function. The blocking
indicator can only be reset in Financial Accounting.

SAP AG

TAMM30 4.0B

8-16

Variances and Blocking Reasons: Summary

The R/3 System checks every invoice item for

variances on the basis of content and price.

You can set tolerances for every variance

type.
If an upper tolerance limit is exceeded, the

invoice is blocked for payment and must be

released in a separate step.
Invoices that do not contain variances can

still be blocked at random (stochastic

blocking).
R

SAP AG

SAP AG

TAMM30 4.0B

8-17