GR/IR Clearing 

Use

The GR/IR clearing function computes price variances between goods receipts and invoice receipts. It then allocates these variances to inventory, price differences, or the assignment object based on the valuation procedure in the material master and the settings in the purchase order item. The goods receipts and invoice receipts are stored temporarily in GR/IR clearing accounts and settled periodically by the GR/IR clearing function.

Performance can be improved by scheduling a GR/IR clearing run with the Schedule Manager. The Schedule Manager processes only the goods receipts or invoice receipts that are new since the last clearing run.

Prerequisites

You have implemented Inventory Accounting.

Features

The system matches the goods receipts with the invoice receipts based on the following factors:

·        Purchase order

·        Purchase order item

·        Type of purchase order item (standard purchase order, service purchase order, and so on)

·        Indicator for invoice verification (such as goods-receipt-based invoice verification)

·        Material or delivery costs (such as freight)

Variances are determined by comparing each goods receipt with its associated invoice receipt. Invoice receipts are recorded with a plus sign (debit) and goods receipts with a minus sign (credit).

The associated goods receipts and invoice receipts are combined into objects and the price variances for those objects cleared.

The price variances are computed using the lower of the goods receipt quantity and the invoice receipt quantity. Since price variances are quantity-based, it is possible to settle variances for partial deliveries and partial invoices.

Some objects may not be completely balanced even after GR/IR clearing because only a partial quantity was cleared.

Calculation of Price Variance Using the Minimum Quantity

	Purchase Order	Purchase Order Item	Amount in Local Currency	Quantity in Order Units
GR	1100	0010	EUR -500	-50
IR	1100	0010	EUR 1200	100
GR/IR clearing
	1100	0010	EUR -100	50

The system determines whether the goods receipt or the invoice receipt has the smaller quantity. In the example above, the goods receipt has the smaller quantity (50 units). This quantity is therefore used to determine the price variance.

The system computes the currency amount of the invoice receipt based on 50 units.

On this basis, the currency amount of the invoice receipt is 600. The price variance against the goods receipt is therefore EUR 100. The price variance of EUR 100 is cleared based on a quantity of 50 units.

Purchase Orders for Services

The GR/IR clearing process for services has the following special aspects:

·        GR-based invoice verification is active (service-based invoice verification inactive):
No usable quantity is available because the entire entry sheet is used to determine the price variances, and the individual lines of the sheet can have different units. GR/IR clearing is therefore based on the amount rather than the quantity. The price variance is the difference between the full amount of the entry sheet and the amount of the invoice receipt (in the example above, the price variance would be 1200 – 500 = 700). Quantities are disregarded with this type of GR/IR clearing.

To enable price variances to be computed at the next GR/IR clearing run, you must set the clearing indicator for GR/IR posting for services in the invoice receipt.

·        Service-based invoice verification is active:
Clearing is quantity-based as usual. In this case each line is cleared separately (incoming invoices in the entry sheet by line).

Activities

       1.      You are on the initial screen of GR/IR clearing (transaction FAIP04).

       2.      Enter the necessary data.

The posting date is used as both the selection date and the posting date for GR/IR clearing.

 

The system selects only the postings before or on the posting date.

       3.      Extras ® Additional Selections On/Off displays additional fields for restricting the selection to standard purchase orders, GR-based invoice verifications, and service purchase orders.

       4.      Processing Options:

¡        To reduce the system load during periods of high utilization or in case of long processing times, select Background Processing.

¡        To see the results without actually writing them to the database, select Test Run (default). For an update run, deselect this option.

¡        If you select Detailed Lists, the results list displays the variances in addition to the errors, number of objects, and their status. You can also select a layout for the list.

¡        The Parallel Processing option improves performance by distributing the processing load across multiple servers.

       5.      Choose  with quick info Execute.

       6.      Depending on the options selected, either the basic list or the detailed list of the test run or update run appears.

The basic list contains summary information on the selected objects (without errors, not relevant, or completed with errors). It also shows the error messages issued.

The detailed list also shows the variances and the total that was posted (update run) or that would be posted (test run).

       7.      You can choose between two views in the detailed list:

                            a.      Result: Values to Post

                            b.      Total Variance by Object

To see the line items that led to the variance, choose  Details. The line items are displayed in the lower part of the screen.

To see the values to be posted or that were posted in the corresponding journals, choose Source Document.

Note the following special aspects:

§         Even if the goods receipt and the invoice receipt have the same quantity and value, a GR/IR clearing line is still written in the GR/IR journal (quantity greater than or less than zero). Since there were no amount variances, no accounting document is posted and therefore no accounting document number is assigned (document number is zero).

§         With logistical GR/IR account maintenance, Financial Accounting is notified about the completion of GR/IR clearing even if the quantities of the goods receipt do not match those of the invoice receipt. Only the invoice receipt quantity is adjusted to match the goods receipt quantity. Since only the quantity and no amount is saved, no accounting document is posted and thus no document number is assigned (document number is zero).
In the above example, logistical GR/IR account maintenance would transfer a quantity of –50 units because the quantity of the invoice receipt is larger than that of the goods receipt by 50.
Logistical GR/IR account maintenance is stored in Financial Accounting under the business transaction category invoice receipt.