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Ross Christoph is responsible for processes and solutionsSpeaker Badge for SAP product costing at Eli Lilly and Company on a global basis. Eli Lilly has manufacturing plants in 13 countries, and products marketed in 125 countries. Ross has been with Eli Lilly since 1999 and participated in the implementations of SAP product costing and other CO functionality in plants and countries around the world. Previously Ross worked at other manufacturing companies focused on internal accounting and financial roles since 1979 and become involved with SAP projects in 1992. Ross has been a Certified Management Accountant since 1981.

GR/IR (Goods Receipt / Invoice Receipt) Processing

GR/IRoss Christoph 2017R is the SAP process to perform the three-way matchpurchase order, material receipt, and vendor invoice.  It uses a clearing account to record the offset of the goods receipt (GR) and invoice receipt (IR) postings.  Once fully processed the postings in the clearing account will balance.

Clearing is performed at the purchase order (PO) line item level based on quantity entered. Price variance is calculated and recorded, along with exchange rate variance.  You can write off small differences using transaction MR1.

Purchace Price Variance
This discussion assumes you are using standard price control (S)  for purchased materials. The quantity and amount on the GR and IR postings are important. You must have posted GR to record purchase price variance (PPV). There is no PPV posting for just IR. There can be additional variance postings on IR after GR is posted for differences between PO price and actual price paid.

When posting GR, the price variance is based on the PO price, unless IR has already been posted, then it is based on actual price paid. If IR has already been posted, the GR will be based on the IR up to the quantity of the IR, after that is will use the PO price again.

After all postings to a PO line item, the net PPV posted will be the difference between the actual price paid and the standard cost of the material.

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John Jordan
You're welcome. What other areas interest you in SAP that we could provide information on?
Saturday, 22 June 2019 20:19
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