Differential Invoicing in the Commodity Procurement Process
Differential invoicing for commodities is a multi-step process that you can start for purchase order items relevant to differential invoicing. Within this process you can create a provisional invoice, one more differential invoices, and at the end, a final invoice.
You can use differential invoicing to take account of price differences that arise, for example, due to the price development of a commodity during a specified calculation period, or based on new results from quality assays. Price determination can be performed using standard price determination or using the connection to the Commodity Pricing Engine (CPE).
Materials Management Component (MM)
You are using functions from the area of Materials Management (MM) and have performed the necessary customizing steps for purchasing, goods movements, and invoice verification.
Price Determination
You have made the necessary standard settings for price determination in Materials Management: To do this you have, if necessary, created application-specific condition types with the calculation rule Q
(Commodity Price
), and added these condition types to the calculation schema. You have assigned the calculation schema to the master data of the vendor that you enter in the purchase order.
You must specify how you want to depict, for example, rate fluctuations or quality fluctuations in pricing. For example, quality fluctuations can be depicted using batches and their batch-specific units, on which the conditions in pricing are based. However, you can also use pricing without batches.
BAdI: Relevance Determination at Document Item Level
The Business Add-In BAdI: Relevance Determination at Document Item Level
(ITEM_RELVANCE_DETERMINATION
) helps you define criteria that the system uses to determine the relevance of a purchase order item for differential invoicing. When determining whether a purchase order item is relevant for differential invoicing, the default implementation LOG_PO_COMMODITY_RELEVANCE
checks the Differential Invoicing
field in the purchasing info record belonging to the purchase order item. For more information, see Customizing for Materials Management
, under .
BAdI: Invoice Validation
You can use the Business Add-In BAdI: Invoice Validation
(MRM_DINV_VALIDATION)
) to define criteria that determine whether a final invoice is allowed to be created for a goods receipt item or purchase order item. You can do this for each invoice item that is relevant to differential invoicing. As criteria you can use invoice header data, item data, and pricing data. For more information, see Customizing for Materials Management
, under .
For more information, see:
The differential invoicing process straddles the Logistics applications of Purchasing, Inventory Management, and Invoice Verification. For further information about the standard process, see Procurement in the Materials Management System. The following process describes the features of differential invoicing, which is integrated with the standard process.
Creating a commodity purchase order
You create a standard purchase order for the prepared material and the prepared vendor (transaction Create Purchase Order
(ME21N
)). The purchase order contains at least one purchase order item relating to a commodity that is relevant for differential invoicing.
In the item data, check the following settings:
Invoice
tab page:
The Invoice Receipt
checkbox is selected, so that an invoice receipt is connected with the purchase order item (in other words the delivery is not free of charge).
The Differential Invoicing
field has the value Relevant
.
Recommendation
Select the GR-Based IV
(Goods-Receipt-Based Invoice Verification
) checkbox, in order to specify goods-receipt-based invoice verification and to be able to use the full range of differential invoicing features. Goods-receipt-based invoice verification is, for example, a prerequisite for the transfer of the batch number from the goods receipt to the invoice item. (The system adopts the checkbox setting from the purchasing info record).
Condition Control
tab:
Set the pricing date category GR Date
so that the system performs pricing at goods receipt with the goods receipt date (taking batches into account).
Conditions
tab:
If a commodity price (calculation rule Q
(Commodity Price
)) is stored for a condition type, you can display the formula details on the Conditions
tab page by choosing the
(Formula Details
) pushbutton.
Note
Purchase order items that are relevant for differential invoicing and whose price-relevant quality characteristics you want to depict using batch-specific units must have batch-unspecific base units of measure (for purchase order unit and purchase order price unit) in the item overview. On the other hand, there must be batch-specific material units of measure in the detail data on the Conditions
tab page.
For more information on commodity purchase orders, see Differential Invoice in Commodity Management and Purchase Orders Relevant to Differential Invoicing.
Goods Receipt
In the Goods Movement
(MIGO
) transaction, you post the goods receipt for the purchase order.
Note
If you have specified price-relevant information, such as quality, as batch characteristics, you can create and edit the values for the characteristics during the goods receipt posting. To do this, choose the Classification
pushbutton on the Batch
tab page. The system then posts the goods receipt for the batch number with the characteristic values of the charge.
Example
At goods receipt, a metal ore concentrate such as copper concentrate contains price-relevant components such as copper, silver, and gold. The material is subject to batch management requirements, and the characteristics describe the proportion of the respective price-relevant metals in the concentrate. The proportion of these metals per ton depends on the amount of moisture.
After posting, you can display the goods receipt document in the purchase order, on the Purchase Order History
tab page. Using the
(Conditions
) pushbutton, you can call up calculation details of the goods-receipt-based pricing for the material document.
For more information, see Goods Receipt in Differential Invoicing.
Creating a Provisional Invoice
To create a provisional invoice (transaction Enter Incoming Invoice
(MIRO
)), choose the invoice type Provisional Invoice
in the Transaction
field.
After you have entered the invoice date
on the Basic Data
tab and the purchase order on the PO Reference
tab, the system displays the items which are relevant for the provisional invoice, the amount, and the quantity. The items are either goods receipt items or, if invoice verification is not goods-receipt-based, purchase order items.
Note
On the PO Reference
tab, specify the display variant Differential Invoicing
.
If you are using a batch, it is displayed in the invoice item. Double clicking takes you to the Batch Information Cockpit
, where you can display the detail data for the batch and the characteristic values (Classification
tab).
In the invoice item, you can display the conditions for the item by double clicking on the Amount
column or choosing the
(Own Conditions
) pushbutton.
Creating a Differential Invoice
If the vendor sends another (non-final) invoice with modified prices, you can you determine the difference amount using a differential invoice.
Example
A material assay can identify a change in quality due to a change in the moisture content, so that you have to change a price-relevant characteristic of the batch that you used at goods receipt. You can make this change, for example, under
(transaction BMBC
): After selecting the batch that you used for the purchase order at goods receipt, you change the price-relevant values on the Classification
tab.
To create a differential invoice (transaction Enter Incoming Invoice
(MIRO
)), choose the invoice type Differential Invoice
in the Transaction
field.
After you have entered the invoice date
on the Basic Data
tab and the purchase order on the PO Reference
tab, the system displays the purchase order items which are relevant for the differential invoice. The system displays both the current item as well as the item from the predecessor document (two-line display for each purchase order item that an invoice refers to). The Difference Amount
column contains the calculated difference between the current invoice and the previous document.
In the current invoice item, you can use the
(Conditions
) pushbutton to display the conditions for the item: On the Conditions
tab page, you can see the calculation results in detail. The Diff. Conditions
tab contains the variances for each condition compared to the previous invoice. If it is a condition type with the calculation rule Q
(Commodity Price
), you can use the
(Formula Details
) pushbutton to display, for example, the commodity quantity used.
Example
To trigger pricing manually, choose the
(Pricing
) pushbutton.
Then, choose the
(Own Conditions
) pushbutton to compare, for example, the new and old net values.
In the condition display for the item, choose the Transfer
pushbutton to transfer the updated values for amount and difference amount to the invoice item.
You post the difference amount in the Difference Posting
field, with the value As Invoice
(positive difference) or As Credit Memo
(negative difference).
Note
Note that if the setting in the Difference Posting
field is changed, all manual changes are reset.
Repeated Change of Price or Quality
Repeat step 4 until the final data is available and the final quantity has been determined.
Final Invoice
As a last step, you create a final invoice in the Enter Incoming Invoice
(MIRO
) transaction. To do this, choose the invoice type Final Invoice
in the Transaction
field.
You create a final invoice in the same way as a differential invoice. Afterwards you cannot create any further differential invoices.
The final invoice closes the differential invoicing process. You can still enter subsequent debits and credits. However, the system does not perform pricing in that case.
On the Purchase Order History
in the purchase order, you can display the documents created for a particular purchase order item during the process.
Note
For the display in the purchase order history, you can adapt the standard terms for provisional invoice, differential invoice, and final invoice. You do this in Customizing for Materials Management
, under .
For more information about the display in the purchase order history, see Purchase Orders Relevant to Differential Invoicing.
For more information about invoice verification and pricing in Differential Invoicing, see: