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Goods Receipt/Invoice Receipt Reconciliation

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The abbreviation G R I R refers to goods, receipts, and invoice receipts. Usually the GRI, our accounting, the general ledger, where the goods, receipts, and invoice receipts posted this section is all about how to monitor that account and keep it neatly reconciled. Although perhaps more of a general ledger function, rather than strictly accounts payable. I'm including it here, partly because accounts payable may be involved in the reconciliation. And also because how invoices are posted in accounts payable will have a direct impact on the reconciliation. It may be a good thing for accounts payable to have a general understanding of the way the account works and what has to be done to correct mistakes. I've already talked a little about the three-way matching in the purchase or procure to pay section where I explain the different documents in the flow, but concentrated more on the different types of documents. And in section six, I'll talk a lot about blocking and unblocking, the supplier invoices for me, look at the payment program. In this section, I'll go into detail about analyzing, reconciling, troubleshooting, and clearing the general ledger side. In other words, the GRI, our account, and why it's so important to Spire is from the start. I'll introduce the new tools available such as the goods and invoice reconciliation overview and the intelligent goods and invoice receipt. We conciliation. And show you how to correct clear or write off outstanding amounts. Just to recap, when you create a purchase order, there's no posting to the general ledger, but when you post a valuated goods receipt, the offset or credit will be posted to the GRI, our account with the debit to the account assigned in the purchase order, usually a cost stock or fixed asset account. Then when the invoice arrives credit is posted to the supplier account and the debit to the GRI or account plus any relevant debits to tax accounts, any credit notes or corrections should follow a similar process in an ideal world. The GRI, our account at the end of the period should contain only a few short term timing differences, which will clear during the following period. The balance at year end or foreign part for your cruise, if the company and should represent mainly good sort of thing received, but not yet invoiced, but in some cases may also contain invoice items without a corresponding goods receipt. Many organizations just have one gr IRA account, potentially you could have more than one. The different types of purchases, the GL I, our account should always be set to automatic postings only. You should never need to manually post this account. In addition to the GRI, our account itself. You may have an adjustment account to separate out purchases with the debit balance from purchases, with the credit balance. If required, I'll explain how to do this later in this section, when an organization first goes live on SAP or SAP, S four HANA, it's usually all hands on deck to ensure that the sales invoices go out, production continues. Incoming payments processed correctly. And the suppliers and employees are paid in a best case scenario. Reconciling the clearing accounts may be left to the end of the period in the worst I scenario the outstanding balances around you notice year end, and then by the auditors, when it's so much harder to investigate and clear up any mess and important to get it right. But this point, the organization is invariably surprised the invoices appear to be correct and have been paid, but nevertheless, I've left a messy trail of incorrect postings, which should have been much easier to correct at the time. Yeah. Up in the slide is the general ledger display line item map F two two on eight. The slide shows the G R I R account summarized by purchase order item. Using the assignment reference for you so that you can see that in some cases, the balance is not Sarah. If we drill down into one of the items, you can see that, although there's a goods receipt and an invoice receipt, there's still a balance indicating that the related invoices and goods, receipts do not have matching quantities. Although this could be a timing difference in this case, this is an example where something has gone wrong. Which needs to be investigated and corrected. Although the gr I, our account is important from a finance and audit point of view, and historically was key and reconciliation. There are now new tools that can be used to analyze and tidy up any discrepancies so that the GN account gives an accurate picture of the accruals period. And here end. The side, for example, shows the same transaction as the previous slide, but with more detail using one of the new tools in this scenario, the invoice was in fact manually unblocked for an urgent payment, which solved the problem of an angry supplier. But as the invoice was originally blocked because of the quantity discrepancy I'm blocking the invoice for payment did not update the GRI or account. So debit balance was left on the GRI. Our account, even the cost or stock is understated in the accounts. We'll go into more detail of this out. later in this section. Okay. To say it should really have been corrected in the period it was posted. And the block removed automatically by refreshing the GRI or matching rather than manually. To ensure that the correction to the goods receipt did in fact clear the quantity difference. And there was no additional price discrepancy investigating quantity discrepancies late today is much harder to do and difficult to fix, especially if the stock has already been consumed or resold. And even if you do find the error, it's not always easy to correct. Especially if stock adjustments have been made in the meantime. If the invoice was posted against the incorrect item, it will be hard to reverse as it's already been paid. The side shows the postings from the previous example, using the app display journal entries in Tia count view F three six, six, four. First posting colored blue is a good receipt, debiting costs and crediting the GRI. Our account. The second posting colored orange is the invoice debiting, the GRI, our account and crediting the supplier. The third posting colored purple is the payment debiting, the supplier and crediting the bank clearing. Most important thing to remember about the GRI, our general ledger account is that it's functionalities entirely driven by quantities. If you ordering goods, receipt, 10 items at $10, each as long as you enter a quantity of 10 in the invoice, the invoice will clear the gr I our account. If the invoice is for 900 or $110, because the price on the invoice is $10 lower or higher than the goods you see it. And purchase order. The system will still post 10 times 10 in afterwards, a hundred dollars to the GI or account. And in order to balance the posting, it will post any difference to the same GL accounts as the original. Could she say. The goods receipt posting would take most likely value if no invoice has been received at the time, the goods receipts is posted, then the most likely value for that purchase will be that, which is in the purchase order. We'll go stock items valued at standard cost behave slightly differently. If the standard cost is different to the purchase order, any difference will be posted to purchase variance account. However, if the invoice was already received before the goods receipt, the amount posted to the GRI, our account will be the invoice amount. So the goods receipt posting has to take the same value as the invoice, in order to clear the GRI or account, assuming the quantities match. The value used for the goods. Receipt is only the accrue. The amount payable will always be what seemed for you. Stop posting things can be tricky for a number of reasons, depending on the stock valuation. If the product or material is valued at standard cost, the stock will always be updated at standard cost. Whatever happens in the postings and the differences will go to price, variance account. If the stock is valuated at moving average price, you may get odd fluctuations. If the postings are not made in a timely manner, managing a purchase order for 10 materials of $5 each there's currently no stock. So when the goods receipt is posted, the stock is updated at $5 and therefore the total stock is 50. Almost immediately. Let's say those 10 items are sold and removed from stock. After that the invoice comes in at a different price, let's say it costs $1 more so that there's a difference of $10. However, if you post the $10 to the stock account, that doesn't make sense value the stock at $10 is there's no stock because you just sold it. Even if you have only one item. You don't want to post the whole adjustment to that one item. Similarly, if the price is less, you don't want to end up with a negative stock value, non valuated goods, receipts have no postings to the gr I R account. And if you're using goods, receipt based invoice verification, that means that the invoice is posted against the goods receipt line rather than the purchase order line. So you cannot post the invoice. If the goods receipt it's not been posted. Finally, just to reiterate, there's no connection between payment blocks and what's on the Grio. Removing a payment block does not make a posting to the GRI or account will not clear any outstanding balance on it. So you can have a line item, which has a balance on the GRI, our account that is not blocked for payment on the supplier account. And you can have an item which is blocked for payment on the supplier account that has no balance on the GRI. Our account. We'll go into this a bit more later. The slide shows the app of the standard gooey transaction F dot 13, which can be used for different types of clearing, for example, suppliers, customers, and GL accounts, but only those open item ones that allow clearing, for example, the GRI, our account. The clearing is configured to work on certain fields. For example, the GRI, our account should normally be configured to group of your assignment field, which should contain the purchase order number line item. If the total of all the line items are the same content in the assignment, field is zero. Then it can automatically clear them. The advantage of this is that when you look at the accounts select only the open items, you should see only unmatched items, making it easier to check reconcile the account. This happened, the GUI transaction can be run directly or using the schedule general ledger jobs that F1 nine two seven. The advantage of using the schedule general ledger jobs app is that you can see the history of what's been run the job blocks of the results, essentially fields that need to be filled in are identical and the results are identical. So I'll show you a couple of screens using the app directly in test mode, and then demo the complete run using the schedule general ledger jobs. In the example to clear the whole G R I R account. In addition to the key fields, such as the company code and posting date, you need to select the select GL accounts field, and immediately below it into the account number of the GRI, our account in this case, two one one two zero zero zero zero. However, you can also run the transaction just for a single or range of specific documents or including items up to a specific date. Normally you should not need to select the GRI or accounts special processing indicator unless clearing by purchase order line item is not enough. For example, you're using goods receipt based in fleece verification and want to clear using additional criteria. For the first example, I'm not select the box, but I will show you what happens when it's selected shortly. You can choose whether to select test run or not. And also whether you want to see everything or just the items that the program can clear is a separate task. You may want to review items that it cannot clear if you've not managed to reconcile everything using other tools, for example, with legacy systems or where there have been changes to the system. In between posting for example, a goods receipt, and an invoice. You can also include a tolerance if you want to clear items, even if the balance is not zero, but there's only a tiny difference. There is an execute button at the bottom, right of the screen to run the transaction. This slide shows the results caring for just one purchase order, which has four goods, receipts posted, but only one invoice. And the GRI, our accounts, special processing indicators not been selected. The items that match are highlighted in green would all be clear to Kevin. If this was not a test run. This slide shows the items in the purchase order from the previous slide, the purchase order has good receipt based selected. And as you can see, we're very, everything has been posted against the same item in the purchase order. Each invoice has been matched against a specific goods receipt. Only this slide shows the results of automatic clearing for the same purchase order as before. But this time I've selected gr I, our account special processing indicator, as you can see, it is grouped together. The goods receipt with its related invoice for clearing, rather than grouping everything related to the single purchase order line item. I'm now going to demo view automatic clearing out using shedding. First I go into the app, shared your general ledger jobs on the overview screen. I can see all existing jobs for a specific time period, but I'm going to click on the plus button to create a new task on the next screen or choose a different job template. The templates available will depend on how your system's configured in order to see the full dropdown. I have to remove everything in the search field and then click on search. I select automatic clearing, and I could also rename the job. For example, adding the period or my initials to it. I'll leave it as it is. Under scheduling options. I can click on the define recurrence pattern and set up a regular job. For example, daily or monthly, I can also set the program to run immediately or by deselecting start immediately. I can share to that for later. If I screw up two parameters, you can see that I have the same selection criteria as I had when running the Gobi transactions after 13. Although they're in rather a different order. I will fill in the relevant criteria and press share jewel. The next screen shows the job, both of you, and you can see that the job is in process. If I refresh by pressing go a couple of times, you should see the job is finished depending how large the account is. It may take some time, but you can press go as often as you want, be careful because if you click on the results button before the job is finished, it will show that there's no content once finished. It will show the spool file information, and I can scroll down to look at the different items. Because I have selected both items that can be matched as well as items that do not have a match. I will see both here, but only the matched items, which balance back to zero will clear in this case, all the green items. I'm not going to have a quick look at the GL account line item display to check that the items have been cleared. The default in this app is currently the standard failure, which is grouped by company code, journal type, et cetera. So I'll select a variant that I created earlier. It shows more clearly the open and cleared items. I checked that my default company code is selected. And then to the GM account number for the gr I R account beyond Sims, which have a green square in the status, the cleared items. And you can see these items have a clearing entry number and clearing, right. If I scroll down a bit further, You can see that there are some items which have a red circle, which are the items that are still open. These will not have a clearing date or clearing entry. This slide shows an example of the fury app based on the classic GUI transaction MRE 11 to write off differences on the GRI, our accounts, generally any errors should be corrected in a logical way. For example, if you posted the wrong quantity in a goods receipt, you should correct the goods receipt. If the invoice is for the wrong amount, you should get a credit note. Unfortunately due to the existence of follow on documents and especially if too much time has elapsed before the error is discovered, it's not always possible to correct every item by reversing or adjusting. The original postings stock is especially tricky. Some or all of may already have been. So by the time that you tried to crack the price and adjustments may already have been made to quantity, if the stock has been checked before the correction has been made. Let's work through an example in a demo, let's say that a large quantity, such as a thousand items of something relatively smaller has been ordered and not properly counted. And a goods receipt is posted for the full amount that was on the delivery note. However, the supplier notices that not all of the items were sent and a couple of boxes for left in the warehouse or on the lorry. I miss there was no imminent deliveries in that area. They deduct the missing boxes and send an invoice for a lower amount, which is posted and paid shortly after a month or so later we noticed there's an outstanding amount of the GRI, our account. We cannot reverse the goods receipt and post it correctly because the invoice has already been posted against it. Maybe even paid. We can't reverse the invoices it's been paid in one amount with a load of other invoices. It turns out somebody noticed missing stock and has already done the take adjustment to correct the stock. So we can't touch his stock anymore. However, we also can't just leave them out on the GRI, our accounts, what to do. Yep. CLIA I R counts or Claire gr I R clearing account. It's based on the gooey transaction MRE leopard, which allows you to safely write off amounts like this without messing up the stock. GUI transaction itself is called maintain gr IRA account. Although it's probably more of a financial transaction than accounts payable. I'll run through it. As accounts payable may come across it, Murray left and postings by investigating documents, relating to a specific invoice or purchase order. For example, it may not be possible to post a very late invoice because the balance of the purchase order has already been written off using Mr. 11 on the selection screen, I selected a number of fields. Namely the company code, posting date and purchasing document number that I want to check. I could select delivery or invoice surplus or both, but here I'm just selecting delivery surplus at the bottom of the screen. If I select prepare list, this is the equivalent of test run and will not post anything automatically. When I click on execute the results screen appears. And as expected, we can see that a thousand is delivered 998 invoiced. And there is a surplus of two to write off. I have to select the line that I want to post and click post. And now you can say a document has been created. I go to manage journal entries. As it happens, it being a sandbox so far today, I've only posted three documents in company code OFC, zero one, all relating to this purchase order. So I can easily find the goods, receipt, invoice, and account maintenance document frame. Our 11 note that as the material is valued at moving average price and there's sufficient material in stock. The stoke value has been updated, but the MOF and posting did not touch the stock quantity. Although you can still use the RF and transaction and app, it can also be called directly from one of the new tools that we'll cover shortly. You can display and reverse the Mr. 11 document. Using the app display canceled account maintenance document, which is going to be transaction code Mr. 11, to show you first select the document that you want to display or with us and clicking on overview takes you to the document from the document display screen. You can reverse it using the top menu options more. And then edit and then reversed the document. This slide shows the document display, and you can also see that it's been reversed and the reversal document number. If you select the line item, you can drill it down to the purchase order and clicking on document header gives header details, such as date and time of posting and who posted it. In some countries, if you have credits on the J R I R account from goods, receipts, without invoices, as well as debits from invoices without goods, receipts, you're required to report them separately on the balance sheet. This can be done using the app repost gr I are clearing based on the gooey transaction F dot 19. As it's more of a finance tasks and accounts payable. I won't go into the detail of how to run it, but I just wanted to mention it so that you're aware it exists. If you need it. The tools in this demo and you in SAP S four HANA and designed to be used with machine learning, but they're excellent for reporting as well. However, in this tutorial, as the machine learning requires a separate license, I'll just be showing the basic tools and not the machine learning. The screen shows the goods and invoice receipt, reconciliation overview. Which is called from the monitor GRI, our account reconciliation app F three three zero three premise app. You can drill down into the goods and invoice receipt, account reconciliation. And from there into the individual documents at the top of the app is a filter bar that can be pinned at the top or hidden is required. If I click on the adapt filters button. As you can see, you can add up a selection criteria as required. If I click on the little me button, you can see there's a new option that only appears in some of the overview apps. This option is called managed cards in the popup. I can use the slider to hide any cards. I don't want to see. I can also drag and drop the cards to reorganize them how I want on some of the cards. There's a dropdown and I can change the information shown on the screen. For example, in the Jr amount surplus, I can talk between company code, supplier material, group, and so on. In this example, I've selected only two company codes in the field to being a test system, only a few suppliers and documents, and the numbers are quite low. Some cards to show information and some allow you to drill down further note that if I click on the card as a whole, the drill drown will show the items. But in some cases, for example, if I just want to see the two items in orange, in the GRI, our reconciliation processing. I can just click on the orange part of the chart to see just those items. Although in the card, the color coding refers to company codes. It indicates different things in the drill down. By the way, if I drew it down from the overview, the result will be filtered by whichever card I've drove down from. For example, in this case, those items, which have a good receipt surplus. If I want to see everything, I can go directly into the app, which is called reconsolidate G gr I R accounts. I'm just going to add company code Oh, F Sierra two and change the time period to the whole year so that it shows similar data to the overview. The reconciliation screen is split into three parts. The first part is the filter bar, which can be shown as both the normal fields about, and as the chart in normal form, the adapt filter button behaves as before. And I can add fields, I'm going to change the filter to chart format. As you can see, the number of charts is shown in the filter. If I click on the adapt filters button while in chart format, the options are in chart form and I can add and remove the mini filter charts. I'm just going to reset that back again quickly. In some cases, clicking on a specific item, we'll display it in the chart and the table below. For example, clicking on the purchase order (457) 000-3945. The second time, resets it back to what it was previously. Reset the filter bar back to normal to give me more space and expand the middle section, which is the chart. Currently, the view is by company code and it shows normal items and statuses. If I go to settings and de-select status and instead choose material group and series, for example, You can see that the material group shown in the chart instead of the status, the company code is along the bottom access and the series is inside the column chart, or I could change the material group to category instead of series. You can see the path in the top left. If I go back to settings and set material group back to series, and that account assignment, you can see the bottom axis now has two levels and the path at the top left increases. I can move up the path and get rid of account assignment by clicking on the item above buffet, the material group, go back to settings and at the supplier in the series. The lower part of the ax. So it's the top of the hierarchy. I, the company code and the company code is topping the menu path. If I go back and change the order using arrows. The menu path now has supplier at the top and the supplier is in the lower part of the access. There's so few suppliers and company codes. It doesn't yeah, much of a difference, but you can see how it should work. The series shows in the columns is color coded, or I could change to bar chart, pie chart, or any number of other charts. I can also use the view by button to change the menu path on the left. For example, by adding account assignment category, I can take the account assignment category out again by clicking on the blue item in the path that I want to go back to. Going back to the normal screen. If I click anywhere in the chart, it will filter those items below in the table. And you can also click on the details button to see more and drill down. For example, to the supply fact sheet, to see the supply master data and transactions. I'm now going to look at the table. I could click on the blue items to jump to other apps. I can either make the table full screen, or I can switch to just table view instead of both table and chart with a table I could drag and drop columns and increase the width easily. I can click on a, heading to sort filter and group here. I can also freeze for example, the first column, the purchasing document, so that it stays even when I scroll to the right, if I click on the blue purchase order number, I can drill into the purchase order nine item using the managed purchase or app. But the most effective way to analyze the transactions is to click on the arrow to the right of the nine item. The new screen is spitting too. I'm going to make the right hand side, full screen and zoom in a bit. We can see that the invoice amount is larger than the goods receipt amount. The invoice quantity is larger than the goods, receipt, quantity, both of which are due to the fact that there's no goods receipt posted. This would be scrubbed down through the amounts, quantities, and purchase all the history. You can clearly see this everywhere and in the financial accounting by items, I could drill down the goods receipt document to see the financial postings, and then the purchase order history. I can drill down to the original posting in the material document. If I go back to the reconsideration and search in the smart fax box for the goods receipt amount, surplus and choose one of the purchase orders. Pick sample four five seven zero zero zero three four. You can see that no invoice has been posted. If we look at (450) 000-3911, which we can see in some invoices and goods receipts. The result is more interesting and we can scroll down and look over the things that have happened. We can also see the timeline in each section. There's a settings button where we can add more items, sort, filter and group. I will now find and display purchase order for five zero zero three nine five eight, which is the one where you wrote off the difference using their mobile app and transaction. As you can see everything is now green, meaning it all matches and no smart facts show a surplus of either invoice or good receipt scrolling down. We can see from the financial accounting open items and the purchase order history that everything balances neatly to see row. Although you will note that the account maintenance document for the write-off does not always show value. Instead of using Mr. 11, I could also perform the write-off using this app. If I could back to the main screen and remove the filter for the last purchase order and select a new purchase order. I can click on process item and assign various different tasks. Assuming the appropriate workflow is set up. This is where machine learning would come in, as the machine would learn the tasks to propose. Normally you would assign someone to check everything first, before performing a write-off, but assuming everything has been checked, I can select purchase sort of four or five series zero three, six four, three, and then select the form. Write-off this creates an account maintenance documents similar to before. Drill down into the same purchase order. You can see the details. Of course, there were a lot more columns that you can add in settings. You can also direct the call up contact details from the supplier by clicking on the supplier number. Repeat the most relevant reports are the ones which form part of the new utils to reconcile the G R I R. Now, if the next slides show a quick reminder of some of the reports already covered in this section, so that you have the related reports together with the app number. This overview is the name implies shows various KPIs related to goods and invoice receipts. You can drill down into further detail on some of the cards and you can also use the dropdown to change the KPIs shown on the cart.