GR-IR PROCESS WALKTHROUGH

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 GRIR Process Description

In the process of purchasing goods there is a goods

receipt an invoice receipt.
To control and match goods receipts and invoice
receipts from an accounting point of view an
intermediate account is used, the GR/IR account.
This account is meant for Monitoring the receipt pf
Goods in Warehouse and the invoices that are
booked by Finance and accounts(F&A)
The resulting line items on the GR/IR account are
then cleared to indicate that the purchase flow is
complete.

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Goods Receipt

What is GR ?

As a business process, it is
acknowledging the “Receipt” (i.e.
acceptance) of goods and/or services.
This implies that payment can
proceed.

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Invoice Receipt

What is an Invoice?
An invoice is a commercial
document issued by a seller to
a buyer, indicating the
products, quantities and
agreed prices for products or
services with which the Seller
has already provided the
Buyer

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 GR/IR account description
 Reconciliation of GR/IR account means matching goods receipts with its
invoices as it is shown on below accounts. Matching items on the GR/IR
account must be regularly cleared so the open items give an overview of
incomplete purchase flows.The GR/IR account must regularly be checked
for old open items. These items must be investigated and cleared if
necessary.

Invoice Goods Receipt

GRIR A/C Vendor A/C Stock A/C GRIR A/C

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 Types of Invoice

Product Related (PR) / Bill of Material (BOM)

NON Product Related
Purchase order
It is a common practice that
companies enter into
agreement/contracts for procuring
goods/availing services on the
agreed terms. Such
agreements/contracts are called
purchase orders for procurement
of physical goods and work orders
for procuring services. Purchase
orders are raised by the purchase
department.

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 Raising Purchase Order/Work Order
The format of purchase/work order used by various companies may differ, this
document typically contains following details

•Header – Name & address of the company issuing purchase/work order

•PO Number & Date
•Name/Address of the vendor
•Description of goods or services ordered
•Part number (if applicable)
•Quantity ordered along with delivery schedule, if any
•Price (with relevant information on freight/ taxes/ insurance etc.)
•‘Bill To’ and ‘Ship To’ Address
•Payment Terms
•Other relevant information/ Terms & Conditions, if any

Price and the payment terms are the most important fields in these documents.
Payment terms include the terms and conditions agreed upon with the vendor with
regard to due dates. In general, payment terms give an option to the purchasing
company to pay the invoice before the due date and take a discount available for early
payments.

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 Types of PO’s
These are the most commonly used purchase order wherein the
Standard Purchase order buyer knows all details pertaining to the goods and services to be
purchased, such as cost, quantity, delivery schedule etc

A Blanket Purchase Order is a type of purchase order designed to

Blanket Purchase Order consolidate repetitive small purchases from a single supplier.

A scheduling agreement is a long term arrangement with a

Scheduling Agreement Purchase vendor covering the supply of materials subject to predetermined
conditions on predetermined dated. The price, other conditions
Orders like transport charges, taxes, discounts and surcharges may be
changed in next order basing on pre-agreed with vendor.

Material returned to vendor will be entered in RTV PO’s as

Return Purchase Order Negative GR. We need to receive the credit memo / RMA –
Return Material Authorization (Third party alone) have to be
processed.
Standard PO

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Blanket PO
Scheduling Agreement
(RTV)Return to Vendor PO’s
 Non Po Based Invoices
Non PO invoices are the invoices issued for utility
bills such as rental charges, water bills, and
telephone charges. They are also used in case of
services where no WO is raised.
While making a payment against the Non PO
invoices approval from designated authority is very
important. This is so because, unlike a PO invoice,
there is no prior approval of the expenditure. That
is why these invoices are sent for approval before
payment. Since there is no PO for these invoices no
matching is carried out.

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Some of the GR and IR Discrepancy
• Need IR
• Partial IR
• Need GR
• Partial GR
• Invoice adjustment
• Need Credit memo
• Partial GR
 Scenarios
Need IR
Partial IR
Need GR
Partial GR
Need Invoice Adjustment
Need Credit Memo
 Subsequent Debit/Credit
Subsequent Debits/Credits are used in cases where the quantity is in the original
invoice is to remain the same

Ex:
PO 10 - $10
Gr 10 - $10
LIV 10 - $11 (Logistics Invoice Verification)

The vendor invoice is more than that in the Purchase Order. In order to correct, the
Vendor may send in another invoice for the Increased amount or a credit memo for the
increased amount. If you approve of the price increase, post the subsequent invoice
received as a Subsequent Credit Invoice.
If it is a credit memo that has been received, then post the credit memo as Subsequent
Credit. This would retain the quantity but reduce the amount.
Subsequent Credit is for the case when the credit is not for the full amount eg. if the
Vendor decided to credit only the $1 overcharged. Credit memo is for the credit of the
full amount and value Contd..

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GR IR – Current activity at SSC Chennai

Run GR\IR
Open Clear Items on Analyze over/Under Check the Invoice
Item report and GR\IR account Delivery Status
analyze

Clear items & Clear Items &

write-off differences allocate differences

Reconciliation Activities Follow-up of over/under deliveries

Vendor reconciliation Contact vendor for open statement requests for
Missing invoices/over deliveries
Invoice Adjustment Contact procurement/buyers/requestors for under
deliveries
Purchase Order reconciliation Contact approvers to clear items and allocate
differences
Handle queries received via email/Fax/Calls etc.

Adherence to Escalation procedure

Commonly used terminologies
Terms
Return Purchase Order
Blanket Purchase Order
Migration GL account
Mapping Purchase orders
Scheduling Agreement Purchase
Orders
Remarks
Material returned to vendor will be entered in RTV PO’s as Negative GR. We
need to receive the credit memo / RMA – Return Material Authorization
(Third party alone) have to be processed.
A Blanket Purchase Order is a type of purchase order designed to
consolidate repetitive small purchases from a single supplier.
Merger of one kernel to another kernel. At the time of Merger the open
PO in need of IR as well as GR Entry will get transferred to Migration GL
account. We need to analyze both the kernel to reduce the line items in
merger GL account.
A method and system for defining a data mapping between at least two
purchase order from one kernel to another kernel for unutilized funds.
A scheduling agreement is a long term arrangement with a vendor covering
the supply of materials subject to predetermined conditions on
predetermined dated. The price, other conditions like transport charges,
taxes, discounts and surcharges may be changed in next order basing on
pre-agreed with vendor.
 Step 1: Run GR\IR open items report and analyze

Transaction code Purpose

FBL3N To retrieve the open line items available in the

GRIR account
FS10N To display the GRIR GL account balance

MB5S To retrieve the total goods receipted and total

goods Invoiced in a Purchase order on a
particular date
To retrieve the Vendor Number for the invoice
receipt entry
S_ALR_87012087 To get the Vendor Name based on the Vendor
Number

•Aging is calculated based on the Invoice date

•Analysis is done for all the items and follow up is done for all the items that are > 90 days
•KPI reports are published on a monthly basis
 Step 2: Analyze Over / Under Delivery
Enter the PO
No. in SAP

N Y Request open
Contact buyer/PO
GR>IR? statement from
requisitioner
vendor

N Follow escalation Open invoice

N
Buyer confirms process till GR gets
under delivery? available?
created
Y Y

Request soft copy Contact site for

Contact vendor for of the invoice from unclaimed GR
credit memo the vendor clearance

Y Approval
Credit memo Process credit received?
received? memo

N Y

Clear items &

Follow up with the allocate
vendor till receipt differences

•In case of under-delivery due to materials lost, clearance happens at the discretion of the site
 Step 3 : Clear items on GR\IR account

•The count of line items cleared are reported as a part of SLA report under GL04 and under the
resource unit
Automatic clearing - F.13

Enter company code

Enter GRIR control a/c

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Click Execute

Click Test run

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Documents which will be

cleared under test run
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Uncheck test run and execute

Production run is
started
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Goods Receipt and

Invoice receipt matched
under PO # and line item
and cleared from GRIR
control a/c
 Manual Clearance – F-03

F-03
 Continuation

Click Execute

Enter GL # and Co code

Click document number

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Click process open items once

the doc number entered

Give document number

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Click Charge off Diff

Copy the difference

in amount
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Enter posting key –

40/86 for Debit
50/96 for Credit
Enter price difference GL a/c
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Click process open items and if

no errors and no difference
occur -post the clearing and save

Enter amount, profit center,

Purchasing doc, Assignment and
text
Write Off - MR11

Enter company code,

Reference and Doc Header
text

Enter purchasing document,

line item, purchase order date
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Click Execute

Ensure whether all the four

items are selected.
Make sure the “Qty Var. Less
Than / Equal To” column box is
blank.
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Check the box and post

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Write off posted

ACCM ENTRY
Thank “U”