Unit 2: Variances and Invoice Block

Lesson 1 · Entering Invoices with Variances

Key concepts

With PO reference, LIV proposes quantity and amount for every item from the PO conditions and GR history. If the supplier's figures differ, the clerk should find out why (ask Purchasing, the warehouse, or the supplier). Researching tiny differences is uneconomical, so tolerance limits per variance type and company code define what is acceptable. When the clerk overwrites a proposal, the system checks the result against these limits:

A block at item level blocks the whole invoice (the payment block is set in the vendor line of the FI document). Blocked invoices must be released in a separate step (Lesson 5).

Variance types

Account movements

Quantity variance (invoice qty > GR qty): the extra invoiced quantity is posted to GR/IR, leaving a balance that clears when the remaining GR arrives or a credit memo for the over-invoiced quantity is posted.

Price variance, invoice after GR: standard price → price difference account (PRD), valuation unchanged. MAP → stock account (BSX) with MAP adjustment if stock coverage exists; without coverage → PRD; with partial coverage the variance is split proportionally.

Price variance, invoice before GR: the invoice value is posted to GR/IR; the variance moves to stock or PRD at the later GR.

Combined quantity and price variance:

• GR quantity zero: invoice value to GR/IR. A later GR for the same quantity clears GR/IR at invoice price (MAP material: stock valued at invoice price). A GR for more than was invoiced values the invoiced part at invoice price, the rest at PO price.
• 0 < GR quantity < invoice quantity: GR/IR is cleared at PO price for the delivered quantity, the price variance for that part goes to stock or PRD, and the undelivered part is posted to GR/IR at invoice value.

Worked example: 100 pcs ordered at 5 EUR, 20 received, invoice 30 pcs at 10 EUR = 300 EUR. GR/IR is debited 20 × 5 = 100 (delivered part at PO price) + 10 × 10 = 100 (undelivered part at invoice price) = 200 EUR; the 100 EUR price variance on the delivered 20 pcs goes to stock (MAP) or PRD (standard).

Order price quantity variance: GR and invoice are entered in both units. GR before IR with a deviation in the price unit → posted like a price variance (stock or PRD). No GR → compared to the PO ratio and posted like a quantity variance.

Tolerance keys (OMR6, per company code)

Each key has a lower and an upper limit, each as an absolute value and as a percentage, and for each limit you choose Do not check or Check limit. All limits set to "Do not check" → every variance is accepted. To always block a variance, set the upper limit to 0 with "Check limit".

Lesson 2 · Use Further Blocking Reasons

Overview of block types

Whether set at header or item level, a manual block always results in the payment block in the vendor line of the FI document.

Quality block

In the material master (QM view) you control whether a GR is inspection-relevant (an inspection lot is created per GR) and whether the invoice is blocked until the quality decision is made. The Quality blocking reason is set when:

• GR-based IV: the inspection lot of that particular GR has no usage decision or was rejected – delivery-specific blocking.
• PO-based IV: any inspection lot of the PO item lacks a usage decision or was rejected – including lots of earlier deliveries.

Merely having stock in quality inspection is not the trigger – the inspection lot status is.

Amount block

Large invoice items can be blocked automatically so that a second person checks them (four-eyes principle). Activate the check per company code, define which PO items (item category and GR indicator) are checked, and set the amount thresholds with keys AN (items without PO reference) and AP (items with PO reference). If an item exceeds the threshold it receives blocking reason Amount and the whole invoice is blocked.

Stochastic block

Random spot checks apply to the whole invoice and only to invoices that are not already blocked for another reason. With a threshold value and a percentage: invoices ≥ threshold are blocked with exactly that probability; smaller invoices with a proportionally lower probability (e.g. threshold 10,000, 20 % → a 5,000 invoice has a 10 % chance).

Lesson 3 · Reducing Invoices

Key concepts

If you do not accept a variance – the supplier simply billed too much – you can reduce the invoice instead of posting and blocking it. You do not change the supplier's document: the invoice is posted with the supplier's figures, and the system automatically creates a credit memo for the difference. The net payable is therefore the amount you accept.

1. In MIRO, in the item, set Correction ID = Supplier error: reduce invoice. Fields "Invoice quantity acc. to vendor" and "Invoice amount acc. to vendor" become available.
2. Enter the supplier's quantity and amount in these fields.
3. In the normal Quantity/Amount fields keep (or adjust to) the values you accept.
4. Post. The system computes the reduction amount and creates two FI documents.

The PO history shows the accepted values. Posting creates an output message, so a complaint letter (notification of the credit memo) can be sent to the supplier. Optional reasons for invoice reduction can be recorded per item (not visible in the overviews MIR5/MIR6 because they are item data).

Partial reduction

• Accept the quantity variance, reject the price variance: overwrite the proposed quantity with the invoiced quantity and enter the amount = invoiced quantity × PO price. Example: GR/IR receives 1,000 EUR (a further GR of 30 pcs is expected), the 200 EUR overcharge goes to the reduction clearing account and is cleared by the credit memo.
• Accept the price variance, reject the quantity variance: keep the proposed (delivered) quantity and enter amount = proposed quantity × invoice price. Example: GR/IR is cleared for 70 pcs and the price difference goes to stock (MAP with coverage); the 360 EUR for the not-delivered quantity is reduced.

Configuration (IMG)

The reduction credit memo needs a document type assigned for the invoice reduction transaction; the system selects it automatically.

Lesson 4 · Handling of Variances Without Reference to an Item

Key concepts

At posting, the system checks the balance: gross invoice amount vs. sum of item net amounts + tax (+ planned/unplanned delivery costs). For small differences it is not worth identifying which item is wrong. Two total-level functions allow posting despite a balance:

Where the tolerances come from

• Company-code-wide: tolerance key BD in OMR6. Caution: BD set to "Do not check" accepts every difference as small difference. To accept none, activate the check without entering a value.
• Supplier-specific: tolerance groups for invoice verification (OMRX), assigned in the supplier's company code data, payment transactions (BP role FI Vendor). If the supplier has a group, it overrides BD.

Check logic of a supplier tolerance group

Manual acceptance

If the balance exceeds all tolerances, the traffic light is red. A user with authorization object M_RECH_AKZ can still post via Edit › Accept and Post; the difference goes to the small differences account. Not available when processing parked documents.

Lesson 5 · Releasing Blocked Invoices

Key concepts

A blocked invoice carries a payment block in the vendor line, so the payment program skips it. Reasons: item variances, manual header or item block, stochastic block, payment block from the terms of payment. Release removes the payment block from the vendor line.

MRBR (Logistics Invoice Verification › Further Processing › Release Blocked Invoices; also available as a Fiori tile) has three areas: Selection (company code, supplier, dates, buyer…), Processing (manual or automatic release; option to move cash discount days) and Blocking procedure.

Cash discount days: because the discount period may lapse while an invoice is blocked, you can shift the discount days (not the baseline date) at release; visible only in the vendor line details of the FI document.

Automatic release

The system re-evaluates each blocking reason and deletes those that are no longer valid; when no reason remains, the invoice is released. A reason becomes invalid when:

• Quantity: the missing quantity has been delivered or a credit memo posted. With GR-based IV the later receipt must be posted as a subsequent delivery to the first GR so it can be matched.
• Price: the PO price was changed or a subsequent credit posted.
• Quality: a positive usage decision was made.
• Date: the planned delivery date has been reached.

Invoices that also carry a manual header payment block are not released automatically. Automatic release can run as a background job with report RM08RELEASE.

Manual release

The list shows the blocked invoices; reasons that are no longer valid are highlighted in yellow. You can delete individual blocking reasons (the invoice is released when the last one is deleted and saved) or release the whole invoice – this removes the payment block but leaves the item blocking reasons untouched. Authorization object M_RECH_SPG controls which blocking reasons a user may delete; display-only M_RECH_EKG prevents overall release.

Process flow

Workflow for price blocks

Workflow template WS20000397 informs the buyer responsible for the PO when an item is price-blocked. The buyer can change the PO, release the items by deleting the blocking reason, or flag them as Cannot be clarified – then a work item goes to the invoice verification clerk, who ends the process. The workflow ends automatically when the price block is no longer valid.

Unit summary & exam focus

T-codes in this unit

Self-check questions

1. 100 pcs ordered at 5 EUR, 20 delivered, invoice for 30 pcs at 10 EUR. What is posted to GR/IR?
   Answer

   200 EUR: 20 × 5 (delivered, PO price) + 10 × 10 (undelivered, invoice price).
2. What happens when a variance exceeds the upper tolerance limit?
   Answer

   A warning is issued, the invoice can be posted, and the entire invoice is blocked for payment.
3. How many FI documents does an invoice reduction create and what are they?
   Answer

   Two: the invoice with the supplier's amount (difference to the reduction clearing account) and an automatic credit memo that clears it against the vendor.
4. Where is the supplier-specific tolerance group entered, and what does it override?
   Answer

   In the supplier's company code data (payment transactions); it takes precedence over tolerance key BD.
5. Which blocks can never be released automatically by MRBR?
   Answer

   Manual header payment blocks (incl. from payment terms) and stochastic blocks.
6. When is an invoice blocked for quality in PO-based IV?
   Answer

   If any inspection lot for the PO item has no usage decision or was rejected – also from earlier deliveries.
7. How do you ensure a certain variance always leads to a block?
   Answer

   Set the upper limit of that tolerance key to zero and choose "Check limit".