Understanding Invoice Verification Process

The Invoice Verification component completes the material procurement process and allows credit memos to be processed. Invoice Verification includes entering invoices and credit memos that have been received, checking the accuracy of invoices with respect to price and arithmetic, and checking block invoices (these are the ones which differ too much from the original PO).

Different Types of Invoice Verification

Invoices based on Purchase Orders: With purchase-order-based Invoice Verification all of the items of a purchase order can be settled together, regardless of whether or not an item has been received in several partial deliveries. All of the deliveries are totaled and posted as one item.

Invoices based on Goods Receipt: With goods receipt based Invoice Verification, each individual goods receipt is invoiced separately.

Invoices without an order reference: When there  is no reference to a PO, it is possible to post the transaction directly to a Material Account, a G/L Account, or an Asset Account.

You can park Invoices that reference POs and GRs as well as Invoices with no reference in the system. When you park a document or change a parked document, neither substitution nor validation is supported. The system only carries out these functions after you actually post a parked document.

Perform Invoice Verification

If the Invoice refers to an existing document (PO, etc.), then the system pulls up all of the relevant information like Vendor, Material, Quantity, Terms of Delivery, and Payment Terms etc. When the Invoice is entered, the system will find the relevant account. Automatic posting for Sales Tax, Cash Discount, Corrections etc. When the Invoice is posted, certain data such as Average Price of Material and Price History are updated. Use Transaction MIRO.

Tolerances of Invoice Verification

If the Invoice refers to an existing document (PO, etc.), then the system pulls up all of the relevant information like Vendor, Material, Quantity, Terms of Delivery, and Payment Terms etc. When the Invoice is entered, the system will find the relevant account. Automatic posting for Sales Tax, Cash Discount, Corrections etc. When the Invoice is posted, certain data such as Average Price of Material and Price History are updated. Use Transaction MIRO.

The following are instances of tolerances that can be defined for Logistic Invoice Verification.

  1. Small Differences
  2. Moving Average Price variances
  3. Quantity variances
  4. Price variances

Based on the client requirement, the transaction can be “Blocked” or Posted with a “Warning” in the event of the Tolerances being exceeded. Tolerances are nothing but the differences between invoice amount and payment amount or differences between goods receipt amount and invoice amount which is acceptable to the client.

Tutorial with Steps

The Quick reference on Invoice Verification will provide you all the steps on:

  • Enter Incoming Invoice referencing a PO – MIRO
  • Display Invoice Document – MIR4
  • Display List of Invoice Documents – MIR5
  • Release Blocked Invoices – MRBR
  • Cancel Invoice Document – MR8M

Download the Quick Reference on Invoice Verification

 

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