SAP MM INVOICE VERIFICATION.ppt

 TATA CONSULTANCY SERVICES
MM - INVOICE VERIFICATION

Target Group
 Purchase department
 Stores department
 Finance department

Introduction
 Contents
 Invoice entry and verification
 Credit memo
 Excise invoice
 Material devaluation
 Physical inventory
 Inventory management information
Exercises
Solutions

Course Goals
 To enter and verify vendors invoice
 To enter and verify vendor’s excise invoice
 Devaluate materials
 Carry out physical inventory
At the conclusion of this course you will be
able to:

MM - invoice verification
 Invoice Verification in Materials Management serves the
following purposes:
 It completes the materials procurement process
 It allows invoices that do not originate in materials procurement
(for example, services, expenses, course costs, etc.) to be
processed
 It allows credit memos to be processed, either as invoice
cancellations or discounts
 Invoice Verification does not handle the payment or the
analysis of invoices.
 The information required for these processes is passed on to
A/C department.

Invoice verification
 Invoice Verification tasks include:
 Entering invoices and credit memos that have been received
 Checking the accuracy of invoices with respect to contents,
prices, and arithmetic
 Executing the account postings resulting from an invoice
 Updating certain data in the SAP system, for example, open
items and material prices
 Checking invoices that were blocked because they varied
too greatly from the purchase order

Types of Invoice Verification
 As a rule, an invoice refers to a transaction for which the
issuing party requests payment.
 Invoice Verification differs depending on the type of invoice
involved:
 Invoices based on purchase orders
 With purchase-order-based Invoice Verification, all the items of a
purchase order can be settled together,
 Invoices based on goods receipt
 With goods-receipt-based Invoice Verification, each individual
goods receipt is invoiced separately.

Types of Invoice Verification
 Invoices without an order reference
 When there is no reference to a purchase order, it is possible to
post the transaction directly to
 a material account
 a G/L account
 or an asset account.

Data required for invoice verification
 The key data required for Invoice Verification is
 Master data
 Transaction data
 Material data
 Material data is information on the materials bought or
produced in the company
 Vendor data
 Vendor data provides information on the suppliers a company
deals with.

Data required for invoice verification
 Accounting data
 Accounting data is used to define G/L accounts
 Transaction data
 Transaction data records transactions or events in the SAP
system.
 Purchasing document
 Material document
 Accounting document

Invoice data
 An invoice contains various information, such as:
 Who issued the invoice?
 Which transaction does the invoice refer to?
 How much tax do you have to pay?
 If the invoice refers to a particular transaction, the system
will automatically retrieve information pertaining to the
transaction
 Terms of payment
 Quantities to be invoiced
 The amounts the system expects per item

Screens for Invoice Verification
 The initial screen
 This contains general data such as
 company code
 currency
 invoice reference.
 The vendor screen
 This contains data on the vendor
 The terms of payment
 taxes.

 The selection screen
 This lists the items of the transaction specified on the initial
screen.
 The layout of the selection screen depends on whether the
invoice is based on a purchase order or a goods receipt.
 Invoice Based on a Purchase Order
 All the purchase order items are listed.
 The quantity that is still to be billed (i.e. the difference
between the quantity delivered and the quantity invoiced
so far) appears as a default in the Quantity column.

 Invoice Based on a Goods Receipt
 Goods-receipt-based invoice verification must have been
defined in the purchase order.
 If the GR-IV field on the item screen in the purchase order is
not selected, the goods receipt cannot be settled in this way.
 There are two ways of finding the correct transaction in
goods-receipt-based Invoice Verification:
 You can enter a delivery note number or a GR document
number and the system will list the items for the goods
receipts on the selection screen;
 you can enter a purchase order number and the system will
list all the GR documents

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

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

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

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

Credit memos
 The term credit memo always refers to a credit memo from
the vendor.
 Posting a credit memo always leads to a debit posting to the
vendor account.
 Two types of credit memos are possible:
 Credit memos that refer to a purchase order or goods receipt
 Credit memos that do not refer to a transaction.
 Processing of credit memos is same as invoice verification

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

Creating a excise invoice
 Transaction J1IA
 Required entries
 Purchase order number
 Excise group
 Vendor’s Excise invoice number
 Excise invoice date
 In the details screen you can change
 Description
 Quantity
 Excise duty

Valuation - Lowest value determination
 The Lowest Value Principle
 The lowest value principle is a method of valuating material
stocks for balance sheet purposes.
 The aim of this method is to valuate stocks as accurately as
possible according to the recognition-of-loss principle.
 Profits that exist solely on the books as a result of changes in
market prices are to be avoided.
 Expected losses are included in the balance sheet.

Lowest value determination
 Methods
 In the SAP System there are various methods of determining tax
or commercial prices:
 lowest value determination based on current market prices
 system searches for the lowest price from among the various
prices stored for each material.
 lowest value determination based on rate of movement
 lowest value determination based on range of coverage
 Range of coverage = average stock : average consumption

Lowest value determination
 Calculating the Movement Rate
 Movement rate = Total quantity of receipts/issues : Material
stock x 100
 If the percentage of receipts/issues is smaller than Movement
rate, the material is slow or non-moving
 Devaluation percentage
 Devaluation indicator
 Updating prices in the material master record

Physical inventory
 Every company must carry out a physical inventory of
its warehouse stocks at least once per fiscal year to
balance its inventory
 Stocks that can be inventoried
 unrestricted-use stock in the warehouse
 quality inspection stock
 Blocked stock

Physical Inventory Process
 The process of physical inventory can be divided into
three phases:
 Physical inventory preparation
 Create a physical inventory document.
 Block materials for posting.
 Print and distribute the physical inventory document.
 Physical inventory count
 counting stocks
 entering the result of the count on the physical inventory
document printout

Physical inventory
 Physical inventory analysis
 entering the result of the count into the system
 initiating a recount, if necessary
 posting inventory differences
 Processing Steps
 Creating a physical inventory document
 Entering the Physical Inventory Count
 Post inventory differences

Physical inventory
 posting the physical inventory count and inventory
differences
 If a physical inventory document exists, the following are combined in
this step:
 The count is posted.
 Any inventory differences are posted.
 Posting inventory differences without reference to the
physical inventory document
 A physical inventory document is created.
 The count is posted.
 Any inventory differences are posted.

Physical inventory
 Physical Inventory Status
 To monitor physical inventory processing, each physical
inventory document records the inventory steps which have
been carried out. This information can be found in an item or
document header.
 physical inventory history for an item
 In an inventory history you can determine which steps have
been carried out for the item.
 document header
 In the document header, the fields Count status, Adjustment
status and Delete status provide information on whether some
or all of the items have been counted, posted (inventory
differences), or deleted.

Inventory management information
 You can perform the following functions by selecting
Environment from the Inventory Management menu.
 List display
 The List display function offers reports for documents posted in
Inventory Management.
 Example: material documents for a material.
 Stock display
 Example: Stock overview
 Information
 The Information function allows you to display data (master data,
transaction/movement data) from other applications.
 Example: displaying a purchase order.

 Balances display
 The Balances display function offers analysis of the stock
accounts and of the GR/IR clearing account.
 Consignment
 The Consignment option permits analysis of the consignment
stocks from vendors as well as the consignment stocks and the
returnable packaging stocks at the customer’s site.
 Batch where-used list
 Batch search strategy

 Material analysis
 Stock values
 Receipts and issues
 Inventory turnover
 Inventory turnover of the value of valuated stock is calculated as
follows:
 Value of total consumption / Value of average valuated stock
 Range of coverage
 The range of coverage of the value of valuated stock is
calculated as follows:
 Value of valuated stock / value of average total usage / day

SAP MM INVOICE VERIFICATION.ppt

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