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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:
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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.
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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
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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.
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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.
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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.
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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
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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
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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.
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Screens for Invoice Verification
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.
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Screens for Invoice Verification
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
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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.
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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.
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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
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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)
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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
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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.
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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
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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.
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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
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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
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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
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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
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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
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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.
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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.
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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.
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Inventory management information
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
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Inventory management information
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