Invoice Verification

In the Procure to Pay(P2P) life cycle procurement part ends when Account Payable(AP)
processor/Invoice clerk posts the vendor invoice in SAP using MIRO transaction which is
also called Logistics Invoice Verification(LIV). It is tedious job for invoice clerk manually to
verify each and every invoice line item is conforming to agreed price or quantity in PO. SAP
provides systemic way of verifying this kind of discrepancies and blocks the invoice for
payment using the 2 digit key called “Tolerance key”.

Lower & upper tolerance limits for all possible discrepancies can be maintained in tolerance
key. I would try to explain all the invoice tolerance keys in this blog with possible examples.

There are 2 kinds of invoice matching in SAP which are controlled by tolerance keys.

o 3 way match:

Invoice line item is checked against corresponding purchase order and good receipt
documents item for price & quantity matching

o 2 way match:

Invoice is checked against only to PO price/qty if there is no goods receipt planned

Let us understand the how the automatic block is working via tolerance keys. In SAP we
have many tolerance keys, I am going to discuss only below keys in this part
AN,AP,BD,BR,BW,DQ,DW.
Tolerance Limits:

 SAP tolerance limits work only for MIRO transaction

 Invoice posted in FB60 is not subject to tolerance keys limit check
 Tax amount is not included during tolerance check
 It is stored in table T169G

Invoice blocking ways:

In SAP vendor invoice can be blocked for payment by anyone of the following way.

1. Automatic block:

Only if there is a discrepancy due to price or quantity or date variance in an invoice. If the
item amount is exceeded from the limit maintained in the tolerance key.

2. Manual block:

Invoice processor could manually block an invoice either at item level or header level

3. Blocking through payment term:

Invoice can be blocked always with a particular payment term even if there is no variance

4. Stochastic blocking:

Random blocking of invoices without any variance

5. Blocking at vendor master level:

Invoice can be blocked always for a particular vendor if specific blocking key is maintained
at vendor master level

Blocking indicators:

Blocking indicators are available both at header and item level of invoice document.
System set this indicator in the document wherever and whenever it is appropriate.

Header level:

Table: RBKP_BLOCKED Field: MRM_ZLSPR

Possible values:

A Automatically blocked due to existence of blocking reasons

S Stochastically blocked
M Manual payment block set in header – no blocking reasons
W Automatically blocked due to entry via Web Invoice
Item level:

Table: RSEG Value = X

Fields:

SPGRP Blocking reason price

SPGRM Blocking reason quantity
SPGRT Blocking reason date
SPGRG Blocking reason OPQ
SPGRV Blocking reason Project
SPGRQ Manual blocking reason
SPGRS Blocking reason amount
SPGRC Blocking reason: Quality

1.AN – Amount for an item without order reference

Definition:
“System checks every line item in an invoice with no order reference against the absolute
upper limit defined.”

Without order reference means direct posting to G/L or Material.

System behavior:
If only the invoice line item is greater than absolute upper limit the invoice would be blocked.

Let us understand with below example.

It updates RBKP table without a header Block – R. But updates table RBKP_BLOCKED
with payment block – ‘A’.

No entries in RSEG table as it is directly posted to G/L or Material

Tolerance Key RBKP RBKP_BLOCKED RSEG Auto release

AN No blocking A- Auto block No update Not possible
indicator
update(ZLSPR) (item amount
block)

2.AP – Amount for an item with order reference

Definition:

“System checks every line item in an invoice with order reference against the absolute upper
limit defined.”

Pre-requisite:
 Item amount check must be activated at company code level – OMRH
 Item amount check must allowed for item category and GR indicator – OMRI

System behaviour:
Let us understand with below example

No blocking indicator at header table RBKP but RBKP_BLOCKED table has blocking
indicator ‘A’.
Blocking indicator RSEG- SPGRS (Blocking reason item amount) is set at item level.

Item amount block must be released manually. There is no automatic release possible even if
we perform any one of the following activities


Post subsequent credit

Adjust AP tolerance limit
Tolerance RBKP RBKP_BLOCKED RSEG Auto
Key release
AP No blocking A-Auto block RSEG- Not
indicator SPGRS = X possible
update(ZLSPR)
(item
amount
block)

3.BD – Form small differences automatically

Definition:
“The system checks the balance of the invoice against the absolute upper limit defined. If the
upper limit is not exceeded, the system automatically creates a posting line called
Expense/Income from Small Differences, making the balance zero and allowing the system to
post the document”

System behavior:
Let us understand with below example

Small difference within tolerance limit:

As per the PO reference the invoice amount is 1000 USD.

But vendor actual invoice copy has amount of 1002 USD.

AP invoice processor enters the invoice amount as per the vendor’s invoice copy which is 2
USD higher than PO price.

Since small difference is within the tolerance limit, invoice would be posted without block.
Small difference amount would be debited to small difference G/L account maintained for the
transaction event key DIF in OBYC. Same rule is applied in the lower side as well
Small difference above the tolerance limit:
PO price: 1000 USD

Vendor invoice amount: 1003 USD

If the small difference above the tolerance limit then system would not allow to post the
invoice with hard error “ Balance is not zero”. Still AP invoice processor could able to post
invoice via menu bar option Edit -> Accept and Post provided if he/she has authorization
object M_RECH_AKZ allowed.

If we post with above option then system would behave as below.

o Invoice will be posted without block

o Small difference G/L account (DIF) get posted
o RBKP – MAKZN (net amount accepted manually) field will get updated with small
diff. amount : 3.00

Tolerance Tolerance RBKP RBKP_BLOCKED RSEG Auto

Key release
Dq Within No blocking No update No NA
range indicator blocking
BD update(ZLSPR) reason
update
BD Above No blocking No update No NA
indicator blocking
update(ZLSPR) reason
update
MAKZN field
updated with
diff. amount
4.BR: Percentage OPUn variance (IR before GR)
Definition:

The system calculates the percentage variance using below formula and compares the
variance with the upper and lower percentage tolerance limits.

Pre-requisite to simulate this scenario:

1. No GR based IV
2. Variable order unit is activated at material level
3. Maintain tolerance key DW with “Do not check” active

Tolerance:

Material master:

‘CRT’ is maintained as order unit

‘EA’ is maintained as order price unit in info record 1 EA = 100 USD

PO Details:
PO has been created with CRT as Order unit and EA as Order price unit
Po quantity: 2 CRT = 24 EA

Invoice details:

Invoice is simulated before GR as below

Scenario 1:

Order unit quantity – 2 CRT

Order price unit quantity – 22 EA and amount 2200 USD

Observation: There is no warning message on the variance.

Let us use the above formula to find the variance percentage.

Difference is 100 – 91.6 = 8.9 % which is within the BR tolerance limit 10% maintained

Scenario 2:

Order unit quantity – 2 CRT

Order price unit quantity – 21 EA and amount 2100 USD

Observation: There is a warning message as below.

Let us use the above formula to find the variance percentage.

Difference is 100 – 87.5 = 12.5 % which is more than the BR tolerance lower limit 10%.
Hence we are seeing the above warning message which will block the invoice for payment.

Tolerance RBKP RBKP_BLOCKED RSEG Auto

Key release
BR No blocking A- Auto block RSEG- Not
indicator SPGRS = X possible
update(ZLSPR)
(item
amount
block)

5.BW: Percentage OPUn variance (GR before IR)

Definition:
“The system calculates the percentage variance using below formula and compares the
variance with the upper and lower percentage tolerance limits.

Let us understand with same master data

PO Details:

PO quantity in order unit – 2 CRT

Po quantity in order price unit – 24 EA

GR Details:
GR quantity in order unit – 2 CRT

GR quantity in order price unit – 22 EA

IR Details:
Scenario 1:

IR quantity in order unit – 2 CRT

IR quantity in order price unit – 20 EA

Observation: There is no warning message on the variance.

Variance % = (20/2) / (22/2) *100

= 90.9%

Difference is 100 – 90.9 = 9.1 % which is within the BR tolerance limit 10% maintained

Scenario 2:

IR quantity in order unit – 2 CRT

IR quantity in order price unit – 19 EA

Observation: There is a warning message as below

Variance % = (19/2) / (22/2) *100

= 86.4%

Difference is 100 – 86.4 = 13.6 % which is more than the BR tolerance limit 10% and invoice
posted with payment block.

Tolerance RBKP RBKP_BLOCKED RSEG Auto

Key release
BR No blocking A- Auto block RSEG- Not
indicator SPGRS = X possible
update(ZLSPR)
(item
amount
block)

6.DQ: Exceed amount: quantity variance

This tolerance key has both absolute and percentage limits.

Definition: If a goods receipt has been defined for an order item and a goods receipt has
already been posted, the system multiplies the net order price by (quantity invoiced – (total
quantity delivered – total quantity invoiced)).
If no goods receipt has been defined, the system multiplies the net order price by (quantity
invoiced – (quantity ordered – total quantity invoiced)).

System behavior:

Absolute limits:

Let us see the system behavior if only absolute values are maintained and percentage limits
are marked as “Do not check”.

Upper limit: 100.00 Lower limit: 100.00

Test data :- (GR has been defined)

PO quantity = 100 EA

PO price = 100 USD

GR quantity = 50 EA

a) System behavior when invoice quantity is 51

Variance = PO price x (quantity invoiced – (total quantity delivered – total quantity

invoiced))

= 100 * (51 – (50-0))

= 100 * (1)

= 100

Variance 100 is equal to upper limit 100 and there will not be any warning message.

b) System behavior when invoice quantity is 52

Variance = PO price x (quantity invoiced – (total quantity delivered – total quantity

invoiced))

= 100 * (52 – (50-0))

= 100 * (2)

= 200

Variance 200 is more than upper limit 100 and there will be a warning message as below.
When we post invoice with above variance it will get blocked for payment.

It updates tables as below

Tolerance RBKP RBKP_BLOCKED RSEG Auto

Key release
DQ No blocking A- Auto block RSEG- Yes
indicator SPGRM = X
update
(ZLSPR) (Quantity
block )

Automatic release possible if the blocking reason RSEG- SPGRM is deleted when we post
GRN for the balance quantity or credit memo for the excess invoiced quantity.

Same rules apply on the lower side as well

Test data :- (GR has not been defined)

PO quantity = 100 EA

PO price = 100 USD

GR not possible

a)System behavior when invoice quantity is 51

Variance = PO price x (quantity invoiced – (total quantity ordered – total quantity

invoiced))

= 100 * (51 – (50-0))

= 100 * (1)

= 100

Variance 100 is equal to upper limit 100 and there will not be any warning message.

b)System behavior when invoice quantity is 52

Variance = PO price x (quantity invoiced – (total quantity ordered – total quantity

invoiced))
 = 100 * (52 – (50-0))

= 100 * (2)

= 200

Variance 200 is more than upper limit 100 and there will be a warning message as below.
Invoice will be blocked for payment and same tables will be updated as above.

Percentage limits:
“We can also configure percentage limits for the quantity variance check. In this case, the
system calculates the percentage variance from the expected quantity, irrespective of the
order price, and compares the outcome with the percentage limits configured.”

Let us see the system behavior with same example if only percentage limits are maintained
and absolute values are marked as “Do not check”.

Upper % limit: 10.00 Lower % limit: 10.00

Test data :- (GR has been defined)

PO quantity = 100 EA

PO price = 100 USD

GR quantity = 50 EA

a)System behavior when invoice quantity is 55

Variance = (quantity invoiced – total quantity delivered)/ (quantity expected)*100 %

= (55-50)/50 * 100 %

= (5/50)*100 %

= 10 %

Variance 10% is equal to upper limit 10 % and there will not be any warning message.

b)System behavior when invoice quantity is 56

Variance = (quantity invoiced – total quantity delivered)/ (quantity expected)*100 %

 = (56-50)/50 * 100 %

= (6/50)*100 %

= 12 %

Variance 12% is more than upper limit 10% and there will be a warning message as
below. Invoice will be blocked for payment and same tables will be updated as above.

Both Variances active:

If both absolute & percentage variance are active the system would block which ever
tolerance is first breached.

Quantity check for Delivery cost:

The system also carries out a quantity variance check for planned delivery costs when we
post only planned delivery cost.

Tolerance key not maintained:

If the tolerance key DQ is not maintained for a company code when we perform the same
transactions discussed earlier, system considers this as zero tolerance and block the invoice
for the payment for any deviation.

7.DW: Quantity variance when GR quantity = zero

Definition:
If a goods receipt is defined for an order item but none has as yet been posted, the system
multiplies the net order price by (quantity invoiced + total quantity invoiced so far).

The system then compares the outcome with the absolute upper tolerance limit defined.

System behavior:

This tolerance key works only for PO based invoice verification because GR based invoice
verification will not allow IR without GR.

DW absolute upper limit as 100:

PO quantity = 100 EA

PO price = 10 USD
No GRN posted

a)If the IR quantity is 10 then system calculates variance as below

Variance = Net order price * (quantity invoiced + total quantity invoiced so far)

= 10 *(10+0) = 100

This value is equal to DW limit hence there is no warning message and system will not
block the invoice.

b)If the IR quantity is 11 then system calculates variance as below and block the invoice.

Variance = 10 *(11+0) = 110

This value is more than DW tolerance absolute upper limit hence invoice got blocked.

It updates tables as below

Tolerance Key RBKP RBKP_BLOCKED RSEG Auto release

DW No blocking A- Auto block RSEG- SPGRM Yes
indicator update =X
(ZLSPR)
(Quantity block
)

Automatic release possible if the blocking reason RSEG- SPGRM is deleted when we post
GRN for the balance quantity or credit memo for the excess invoiced quantity

DW absolute upper limit as “Do not check”:

PO quantity = 100 EA

PO price = 10 USD

No GRN posted

If the IR quantity is 112 then also system would not block even though this is beyond
the DQ tolerance since it has been maintained as “Do not check” and there is no GR has been
done.

“One should be very careful to use this option as this would by-pass quantity variance DQ
block if there is no GR posted where GR has been planned”
DW tolerance key is not maintained:
If this key is not maintained for a company code it would always blocks the invoice for PO
based invoice verification when there is no GR has been posted.

KW: Variance from condition value

Definition:
The system calculates the amount by which each delivery costs item varies from the product
of quantity invoiced * planned delivery costs/ planned quantity. It compares the variance with
the upper and lower limits defined (absolute limits and percentage limits).

System Behavior:

PO Qty = 100 EA

FRB1 = 100 SGD

GRN Qty = 100 EA

IR Qty = 100 EA

Planned delivery cost = 110 SGD

Variance (KW) = 100 * (110/100) = 110 which is 10 SGD more than PO but within the tolerance hence No
warning message.

If planned delivery cost is 111 SGD

Variance (KW) = 100 * (111/100) = 111 which is 11 SGD more than PO value above the tolerance hence
below warning message will be issued and invoice will be blocked for payment.
Tolerance Key RBKP RBKP_BLOCKED RSEG Auto release
KW No blocking A- Auto block RSEG- SPGRP NO
indicator update =X
(ZLSPR)
(Price block for
Delivery cost
line)

LA: Amount of blanket purchase order

Definition: The system calculates the sum of the value invoiced so far for the order item
and the value of the current invoice and compares it with the value limit of the purchase
order. It then compares the difference with the upper percentage and absolute tolerances
defined.

System Behavior:

PO Limit = 1000 SGD

GR not applicable

IR1 Value = 500 SGD

IR2 Value = 510 SGD system allows without any warning message as the variance = (500 +510)=1010 is
compared with PO limit 1000 SGD which is within the tolerance.

If we try to post the invoice for 511 then system would throw below pop-up message. Still we can post the
invoice which will be blocked for payment.

Tolerance Key RBKP RBKP_BLOCKED RSEG Auto release

LA No blocking A- Auto block RSEG- SPGRP A. Yes. If
indicator update =X we
(ZLSPR) adjust
the PO
overall
limit
LD: Blanket purchase order time limit exceeded
Definition:

The system determines the number of days by which the invoice is outside the planned time
interval. If the posting date of the invoice is before the validity period, the system calculates
the number of days between the posting date and the start of the validity period. If the posting
date of the invoice is after the validity period, the system calculates the number of days
between the posting date and the end of the validity period. The system compares the number
of days with the absolute upper limit defined.

System behavior:

Scenario 1:

PO Validity end date: 03/12/2015

Posting date : 13/12/2015

No warning message because (13-03)= 10 days is within tolerance

Scenario 2:

PO Validity end date: 03/12/2015

Posting date : 14/12/2015

Warning message as below since variance is above tolerance (14-3) = 11 days. It will be
blocked for payment .
Tolerance Key RBKP RBKP_BLOCKED RSEG Auto release
LD No blocking A- Auto block RSEG- SPGRT A. Yes. If
indicator update =X we
(ZLSPR) adjust
the PO
Validity
end
date

PP: Price Variance

Definition:

The system determines by how much each invoice item varies from the product of quantity
invoiced * order price. It then compares the variance with the upper and lower limits defined
(absolute limits and percentage limits).

When posting a subsequent debit/credit, the system first checks if a price check has been
defined for subsequent debits/credits. If so, the system calculates the difference between
(value of subsequent debit/credit + value invoiced so far) / quantity invoiced so far * quantity
to be debited/credited and the product of the quantity to be debited/credited * order price and
compares this with the upper and lower tolerance limits (absolute limits and percentage
limits).

System behavior:

Scenario 1:

PO Price :100 SGD / Item

PO Qty -:100 EA

PO Total value : 10000 SGD

IR Total amount: 10010 SGD

IR Qty – 100 EA

System would allow without any message. Since the variance is (10010 – 10000) = 10 SGD
which is within the tolerance.

Scenario 2:

PO Price :100 SGD / Item

PO Qty -:100 EA

PO Total value : 10000 SGD

IR Total amount: 10011 SGD

IR Qty – 100 EA

System would pop-up below message. Since the variance is (10011 – 10000) = 11 SGD
which is above the tolerance and it will be blocked for payment.

Scenario 3:

Invoice & Subsequent debit:

For the same PO Qty & amount if we do invoice as

IR Qty = 100 EA

IR Value = 10000 SGD

Then

Subsequent debit as

Qty = 100 EA

Value = 10 SGD

No warning message since the variance (already invoiced value+ current subquent debit value
– PO amount ) = ( 10000+ 10 – 10000) = 10 is within tolerance.

If the value is 11 SGD then system would pop-up below message

Tolerance Key RBKP RBKP_BLOCKED RSEG Auto release
PP No blocking A- Auto block RSEG- SPGRP A. Yes. If
indicator update =X we
(ZLSPR) adjust
the PO
Price

PS: Price variance: estimated price

Definition:

If the price in an order item is marked as an estimated price, for this item, the system
calculates the difference between the invoice value and the product of quantity invoiced *
order price and compares the variance with the upper and lower tolerance limits defined
(absolute limits and percentage limits).

When posting a subsequent debit/credit, the system first checks whether a price check has
been defined for subsequent debits/credits, If so, the system calculates the difference between
(value of subsequent debit/credit + value invoiced so far) / quantity invoiced so far * quantity
to be debited/credited and the product quantity to be debited/credited * order price. It then
compares the variance with the upper and lower tolerance limits defined (absolute limits and
percentage limits).

This works same as ‘PP’ tolerance key when the PO price is flagged as
Estimate price.
Tolerance Key RBKP RBKP_BLOCKED RSEG Auto release
PS No blocking A- Auto block RSEG- SPGRP A. Yes. If
indicator update =X we
(ZLSPR) adjust
the PO
Price

ST: Date variance (value x days)

Definition:

The system calculates for each item the product of amount * (scheduled delivery date – date
invoice entered) and compares this product with the absolute upper limit defined. This allows
relatively high schedule variances for invoice items for small amounts, but only small
schedule variances for invoice items for large amounts
 javascript:;

System behavior:

Scenario 1:

PO item value: 100 SGD Per item

PO Qty = 10 EA

PO Value = 1000 SGD

PO Delivery date: 03/12/2015

IR Value = 1000 SGD

IR Qty = 10 EA

Invoice entering date = 02/12/2015

Variance = PO item amount * ( PO delivery date –Invoice entry date)

= 100 (3- 2) = 100 *1 = 100 SGD

This is within tolerance hence no warning message.

If we post the invoice on 01/12/2015 then variance would be

= 100(3-1) = 100(2) = 200 SGD

This is above the tolerance limit hence invoice would get blocked for payment.

There won’t be any warning message for date discrepancies before posting the
invoice
Tolerance Key RBKP RBKP_BLOCKED RSEG Auto release
ST No blocking A- Auto block RSEG- SPGRT A. Yes.
indicator update =X
(ZLSPR)
VP: Moving average price variance
Definition:

When a stock posting line is created as a result of an invoice item, the system calculates the
new moving average price that results from the posting. It compares the percentage variance
of the new moving average price to the old price using the percentage tolerance limits
defined.

System behavior:

Material master MAP price: 100 SGD

PO Price = 100 SGD , Quantity = 10 EA and Value = 1000 SGD

Invoice value = 1060 SGD

New MAP after invoice posting = 1060/10= 106 SGD

Variance = (106 – 100 )/100 = 6%

Within PP tolerance limit but above the VP tolerance limit.

Below information message will pop-up and Invoice will not be blocked for payment. Based
on this tolerance key we can make the below info message as Warning or error before
posting.

With this I have completed all the tolerance keys relevant for Invoice Posting.