Invoice Reduction

SAP AG

SAP AG

TAMM30 4.0B

9-1

Invoice Reduction: Objectives

At the conclusion of this unit, you will know:
That you can reduce invoice items with
Logistics Invoice Verification
How you reduce an invoice item
Which account movements are made with

invoice reduction

SAP AG

SAP AG

TAMM30 4.0B

9-2

Reducing Invoices
Purchase
order
4151599211
100 pcs
10 UNI/pc.

Invoice

Delivery

100 pcs
1000 UNI

70 pcs

Item list
X 4151599211

Suggested quantity/value
70 pcs
700 UNI

Invoice quantity/value
100 pcs
1000 UNI

Invoice document
Materials Management
70 pcs 700 UNI

Accounting document
Invoice for 1000 UNI
Accounting document
Credit memo for 300 UNI
R

SAP AG

In Logistics Invoice Verification, you can reduce invoices.

There is a special view of the item list for invoice reduction. Here you enter separately the invoice
quantities or values that differ from the default quantities or values. The system marks the item with the
comment reduced due to vendor error.
When you post a reduced invoice, two accounting documents are created:
The first document contains the invoice postings for the actual quantities and values; the second
document contains a credit memo for the difference between the actual quantities and values and the
default quantities and values.
Therefore, with invoice reduction, you do not actually reduce an invoice. Instead, you also post a credit
memo for the amount of the reduction. The amount payable to the vendor is the value of the invoice
reduced by the credit memo amount.
The invoice document is listed in the purchase order history with the default value as the invoice value.
When you post a reduced invoice, a message record is created. You can use this to generate a letter of
complaint to the vendor.

SAP AG

TAMM30 4.0B

9-3

Account Movements with Invoice Reduction

Purchase order: 100 pcs @ 10.00 UNI/pc.
Goods receipt for this purchase order: 70 pcs
Invoice: 100 pcs @ 10.00 UNI/pc.
= 1000.00 UNI
10% tax
= 100.00 UNI
= 1100.00 UNI

Goods receipt

Stock account
GR/IR account
Vendor account
Input tax
Clearing account
Invoice reduction

700 +
700 -

Invoice

700
1100
100
300

+
+
+

Credit memo

330 +
30 300 R

SAP AG

When you reduce an invoice, the system creates an invoice and a credit memo at the same time.
The item amount entered in the invoice you create is distributed in the following way: only the amount
shown in the default data is posted to the GR/IR clearing account, the rest is posted to a clearing
account for vendor invoice reduction.
Creating the credit memo clears the clearing account for vendor reduction. The offsetting entry is made
to the vendor account.
The tax posting in the invoice is made on the basis of the item amount entered. The credit memo corrects
the tax posting.
Together, the invoice and the credit memo create the liability, resulting from the default data.

SAP AG

TAMM30 4.0B

9-4

Partial Reduction: Price Variance

Purchase
order
4151599212
100 pcs
10 UNI/pc.

Invoice

Delivery

100 pcs
1200 UNI

70 pcs

Item list
X 4151599212

Default quantity/value
70 pcs
700 UNI
100 pcs
1000 UNI

Invoice quantity/value
100 pcs
1200 UNI

Invoice document
Materials Management
100 pcs 1000 UNI

Accounting document
Invoice for 1200 UNI

Accounting document
Credit memo for 200 UNI
R

SAP AG

You can partially accept invoice variances. In this case, you only reduce the part of the invoice that you
have not accepted.
The above invoice contains variances in the quantity and the price. If you accept the quantity variance,
you must overwrite the default quantity with the actual quantity. Accordingly, you must also overwrite
the default amount with the correct amount for the quantity entered. You then carry out invoice
reduction for the difference between the actual invoice amount and the default amount entered.

SAP AG

TAMM30 4.0B

9-5

Account Movements with Invoice Reduction

Purchase order: 100 pcs @ 10.00 UNI/pc.
Goods receipt for this purchase order: 70 pcs
Invoice: 100 pcs @ 12.00 UNI/pc.
= 1200.00 UNI
10% tax
= 120.00 UNI
= 1320.00 UNI

Goods receipt

Stock account
GR/IR account
Vendor account
Input tax
Clearing account
Invoice reduction

700 +
700 -

Invoice

1000 +
1320 120 +
200 +

Credit memo

220 +
20 200 R

SAP AG

When you reduce an invoice, the system creates an invoice and a credit memo simultaneously.
Since you have accepted the quantity variance, 1000 UNI is posted to the GR/IR clearing account in the
invoice (the system expects another goods receipt for 30 pieces). The 200 UNI difference between the
invoice amount and the amount to be posted to the GR/IR clearing account is posted to a clearing
account for invoice reductions.
The clearing account for vendor reductions is cleared by the creation of the credit memo. The offsetting
entry is made to the vendor account.
The tax posting in the invoice is made on the basis of the item amount entered. The credit memo corrects
the tax posting.
Together, the invoice and the credit memo create the liability, resulting from the changes made to the
default data.

SAP AG

TAMM30 4.0B

9-6

Partial Reduction: Quantity Variance

Purchase
order
4151599213
100 pcs
10 UNI/pc.

Invoice

Delivery

100 pcs
1200 UNI

70 pcs

Item list
X 4151599213

Default quantity/value
70 pcs
700 UNI
70 pcs
840 UNI

Invoice document
Materials Management
70 pcs 840 UNI

Invoice quantity/value
100 pcs
1200 UNI

Accounting document
Invoice for 1200 UNI

Accounting document
Credit memo for 360 UNI
R

SAP AG

You can partially accept variances. In this case, you only reduce the part of the invoice that you have
not accepted.
The above invoice contains variances in the quantity and the price. If you accept the price variance, you
must overwrite the default value with the sum of the default quantity x the actual invoice price. You then
reduce the invoice by the difference between the actual invoice value and the default value entered.

SAP AG

TAMM30 4.0B

9-7

Account Movements with Invoice Reduction

Purchase order: 100 pcs @ 10.00 UNI/pc.
Goods receipt for this purchase order: 70 pcs
Invoice: 100 pcs @ 12.00 UNI/pc.
= 1200.00 UNI
10% tax
= 120.00 UNI
= 1320.00 UNI

Goods receipt

Stock account
GR/IR account
Vendor account
Input tax
Clearing account
Invoice reduction

700 +
700 -

Invoice

140
700
1320
120
360

+
+
+
+

Credit memo

396 +
36 360 R

SAP AG

When you reduce invoices, the system creates an invoice and a credit memo simultaneously.
Since you have accepted the price variance, the GR/IR clearing account in the invoice is cleared and the
price difference is debited to the stock account. The 360 UNI difference between these two amounts and
the invoice amount is posted to a clearing account for vendor invoice reductions.
The clearing account for vendor reductions is cleared by the creation of the credit memo. The offsetting
entry is made to the vendor account.
The tax posting in the invoice is based on the item amount entered. The credit memo corrects the tax
posting.
Together, the invoice and the credit memo create the liability, resulting from the changes made to the
default data.

SAP AG

TAMM30 4.0B

9-8

Total-Based Invoice Reduction

Item list

Invoice
For purchase order 45123
Item 1
10 pcs 1 000 UNI
Item 2
20 pcs
800 UNI

Item 100 15 pcs

900 UNI
Total

100 493 UNI

X 45123
X 45123
X 45123

X 45123
Total

Default quantity
10 pcs
20 pcs

15 pcs

0001
0002
0003
0100

Value
1000 UNI
800 UNI

900 UNI
100 483 UNI

Account movements
Invoice
Stock accounts
GR/IR accounts
Vendor account
Clearing account
Invoice reduction

Credit memo

100483 +
100493 10 +

10 +
10 -

SAP AG

With total-based invoice reduction, the system creates two accounting documents when you post the
invoice:
The first document contains the invoice postings with the default quantities and values, changed if
necessary, and an additional posting to a clearing account. The second document contains a credit
memo, which creates the offsetting entry to the clearing account.
Therefore, with invoice reduction, you do not actually reduce an invoice. Instead, by posting a credit
memo for the amount of the reduction, the amount payable to the vendor is the value of the invoice
reduced by the credit memo amount.
When you post an invoice, a message record is created. You can use this to generate a letter of
complaint to the vendor. In contrast to manual invoice reduction, you cannot inform the vendor of the
cause, because this is not actually determined.
In Customizing you can allocate each vendor to a tolerance group for Logistics Invoice Verification. For
each tolerance group you set a limit up to which invoices without item references can be automatically
reduced

SAP AG

TAMM30 4.0B

9-9

Total-Based Acceptance
Item list

Invoice
For purchase order 45123
Item 1
10 pcs
1 000 UNI
Item 2
20 pcs
800 UNI

Item 100 15 pcs

900 UNI
Total

100 485 UNI

X 45123
X 45123
X 45123

X 45123
Total

0001
0002
0003
0100

Default quantity
10 pcs
20 pcs

15 pcs

Value
1000 UNI
800 UNI

900 UNI
100 483 UNI

Account movements
Invoice
Stock accounts
GR/IR accounts
Vendor account
Small differences

100483 +
100485 2 +

SAP AG

When the system automatically accepts a difference between the item total the system expects and the
item total in the actual invoice, the system posts the difference to a non-operating expense or revenue
account.
In Customizing you set the maximum permitted difference with which a difference posting can be made
automatically.
In conventional Invoice Verification, you set a tolerance range for the difference for each company code.
In Logistics Invoice Verification, you assign each vendor to a tolerance group. You set a tolerance range
for the difference for each tolerance group. (If you do not allocate a vendor to a tolerance group, the
system uses the same tolerance range as in conventional Invoice Verification.)
In conventional Invoice Verification, the system cannot automatically create a difference if you have the
system calculate the tax amounts using the function Calculate tax.

SAP AG

TAMM30 4.0B

9-10

Manual Acceptance
Item list

Invoice

X 45123
X 45123
X 45123

X 45123
Total

For purchase order 45123

Item 1
10 pcs 1 000 UNI
Item 2
20 pcs
800 UNI

Item 100 15 pcs

900 UNI
Total

100 495 UNI

0001
0002
0003
0100

Default quantity
10 pcs
20 pcs

15 pcs

Value
1000 UNI
800 UNI

900 UNI
100 483 UNI

Header data
Difference

Account movements
Invoice
Stock accounts
GR/IR accounts
Vendor account
Small differences

12 UNI

Accept difference

100483 +
100495 12 +

SAP AG

In conventional Invoice Verification, you can manually accept a difference by adding a new item to a
G/L account (see the unit Invoices without Reference).
In Logistics Invoice Verification, you can only accept a difference manually if the invoice was verified in
the background as containing errors. Then you can accept the difference on the header data screen when
you re-process the invoices. When you post the invoice, the difference amount is posted to the same
account as automatically accepted differences.

SAP AG

TAMM30 4.0B

9-11

Invoice Reduction: Summary

In Logistics Invoice Verification, invoice items

can be reduced.
In invoice reduction, you do not actually

reduce the invoice, instead you post a credit

memo simultaneously, thereby reducing your
liability to the vendor.
You can inform the vendor that you reduced

their invoice in a letter of complaint.

SAP AG

SAP AG

TAMM30 4.0B

9-12