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Purchasing invoice for Purchasing

hi by the end of this video you are going to have a full understanding of the meaning of the goods receipt invoice receipt or the gri our account and why is it very important you will also understand all the related financial transactions that you have to execute at the end of every financial period which are the goods receipt invoice receipt analysis clearing and reclassification also I'm going to demonstrate all the process on the last version of si PS for Hanna which is s for Hanna 1809 to fully understand this video you must be aware of the overview of the purchasing process I have already explained this in another video so I'm going to leave you a link in the description below and you please check the link before you continue watching this video so now we understand that we have mainly to financial postings in the appreciating process one financial entry at the goods receipt and the other at invoice receipts and we need to understand more about these financial entries so let's assume that we created a purchase order to our supplier for 10 chairs and the value of this purchase order is 1000 USD now the supplier has sent me that fields and when posting the goods receipt the financial entry is going to be debit to the stock account for 1000 and the credit should be to the supplier account but actually the warehouse team did not receive the invoice then voice is going to be sent to the accountant and until the accountant posts the invoice no one should post anything to the supplier account so a Goods receipt instead of posting a credit to the supplier we are going to post a credit to an intermediary or temporary account until we process the invoice so the financial entry is going to be debit stock for 1000 and the credit temporary account for 1000 now when processing the invoice by the accountant the financial entry is going to be credit to the supplier for 1000 and debit to the same temporary account for 1000 so now you see the temporary account is going to have a balance of zero and the net financial impact we have is debit to our stock account and the credit to the supplier accounts so this temporary account is the gri are or the goods receipt invoice receipt accounts now the same process I explained it can work in a different ways so sometimes when we are doing importation we actually receive the invoice before doing the goods receipt and it also works the same way so when the accountant poses the invoice the entry is going to be credit to the supplier and debit to the gri our account and when we do the goods receipt later the financial entry is going to be debit to the stock account and the credit to the gri our account so ideally the gri our account should have a balance of zero because it is a temporary account that we only use to a link between goods receipt and invoice receipt but actually a real life it never has a zero value why because usually you have some products that you have received but not invoiced either because the supplier has not sent the invoice yet or maybe the accounting team made a mistake and they forgot to post this invoice on the other hand you can have some products that you invoiced but you have not received yet either because we have not actually received the product or maybe we received them but the warehouse team forgot or made a mistake and they did not process the goods receipt and actually sometimes when doing importation the supplier can send you 100 units but you only receive 99 because the authorities of the country they took one unit as a sample from the product so they can check it against local standards and this happens all the time and this one unit you are never going to receive back so you have to write it off to a loss or an expense account and unless you understand the value of the GRI our account and the importance of this you actually may not notice the differences that are missing so it is very important to understand why we have a value in the GRI our account and actually it is also required by the financial standards that at the end of every financial period the GRI our account has to be split to two accounts one account is good received but not invoiced and this is going to be a liability and the other account is goods invoiced but not received and this is going to be an asset and then si ap we have a transaction that will do this automatically for you so this transaction is called GRI art classification and it will go through all the open purchase orders and they check why we have a balance either because it has goods received not invoiced or goods invoiced and not received and then it will post an automatic financial entry to accounts that we set up in configuration another important transaction for GRI R is the GRI our maintenance or analysis and this transaction shows you a report showing for each purchase order what is the quantity we received and what is the quantity we invoiced and what is the difference so as an accountant if I know for sure that a purchase order has been closed we have received the quantity and we have also invested them but then I find a variance of one or two units in this report then I understand that these two units were missing because of the local authorities or something then in this case I have to write off the two units to an expense or a loss accounts and this ap will allow you to do this automatically so there is a transaction that shows the differences and when you check the differences that you agree on and then post si P will post the differences to an expense account that we also set up a configuration there is also a third transaction which is the GRI our clearing and this one I will explain when doing the demo it will be much easier there now I'm going to demonstrate the whole process on si ps4 HANA and this will explain a lot more about this process and it is very important so now I'm going to do a quick example to explain this process and I'm going to start by creating a purchase order with three line items and it goes like this so the creation of the pishers order the transaction as in e 21 in hit enter the event whereas this one enter the choosing organization is 1710 group is zero zero one company could as 1710 enter again then the material I'm going to buy as this one and that quantity is going to be ten pieces the price is going to be let's hit enter first oh okay the plant is 1710 enter and the price I'm going to make it 10 USD then I'm going to copy this item so copy and again now the Biot quantity is going to be 10 pieces for the first item then 20 and then 30 you are going to understand more about why I need 3 items in the next step of the process so I'm going to hit enter again and then now I'm going to click on post so this is our purchase order number so I'm going to copy this now I'm going to post the goods receipt so first I'm going to enter /n so I can exit this transaction then the transaction for goods receipt is mi geo enter so I'm going to do a Goods receipt for purchase order now I'm going to paste the purchase order number and hit enter so here are the 3 aligned items we have in the purchase order so I'm going to receive all of them so for the first one I'm going to receive 10 units and then later I'm going to also invoice the same 10 units so in the text here I'm going to mention goods receipt equal invoice receipt for the second line item I'm going to receive 20 units but I'm going to invoice only 18 so this is going to be gr more than I are now for the third line item I'm going to receive only 25 but I'm going to invoice the 30 units so this is going to be gr less than I are so this way we can see the impact on J and the GRI our account in all the three cases so the storage location is going to be one seven one see here then I'm going to click on post so now I have posted a goods receipt to display the financial entity for the Bulls receipt go here and then select display material document and then it automatically comes with the last material document that we posted so hit enter then go to the document information here and click on fi documents then double click on accounting the comments so this is our financial entry and this is a very simple case you may have differences in the financial entry based on the difference between the hosting of the product you are buying and the price but we are not going to include this in our example today so for now this is a very simple financial entry very straightforward so the financial entry as you see we have three line items which are the three line items of our purchase order so they are 10 20 and 30 these are the number of the items so the first one is for 10 pieces second one is for 20 pieces third one we received 25 pieces and the entry if you look at only one line item so at number 10 the entry is debit to the inventory account for 100 and whoever created to the gri our account for 100 so the RIR is a temporary account that we are going to keep until we process the invoice so now we have a balance of 100 and our gri our account and the same goes for the other units items so for 20 we have also debit to the inventory credit to the Gir and then for 30 we have the same so I'm going to keep this financial entry here and I'm going to open a new screen so / oh great now before we post the invoice I am going to show you the report of the GRI our analysis so we can see the impact of posting the invoices on this report so the transaction is going to be in logistics materials management logistics invoice verification as you see GRI R is an integration point between finance and the materials management this is why you are going to find it under the logistics materials management and you are not going to find this transaction in financials so this one is in materials logistics invoice verification and then GRI our account maintenance this one double click on the transaction mr11 so this is our company code number the posting date is 0 6 0 1 2019 so this is the posting date if we decide to post any clearing to this account we are going to talk about this later today and then the vendor I'm going to limit it to I'm going to leave it empty but the purchasing document I'm going to select only our purchase order here enter and then in purchase order date you have to be sure that it includes the date of your pressures order so this one I just created today so I'm going to open this until 2019 and then I want to see the delivery surplus and also the invoice surplus click here then execute so it is very simple as you see we have the purchase order number we have the item number and we have the supplier name so the mistake u.s. supplier then we have the quantity received we have received 10 units here 20 and 25 we just did there was receipt now and then the invoiced quantity here is zero zero and zero because we have not yet posted any invoices then you have a difference of 10 20 and 25 so now you can see easily that we have an open purchase order that we received but have not yet invoices now I'm going to go back and post the supplier invoice so I'm going to open a new screen again now to post the transaction is Mir oh then voice date is going to be 0 6 0 1 2019 reference is going to be tests and then we are I'm going to enter the purchase order number here enter and the tax code is going to be 0% this one now as you see we have the three items of our purchase order 1 2 3 and you have here the quantity that we received which is 10 20 and 25 so as we agreed the first item I'm going to receive and the invoice that in pieces the second one I received 20 but I'm going to invoice only 15 units so this way we have an invoice less than the goods receipt so we can see the impact and the third unit the third item I'm going to invoice 30 units and I only received 25 so the 30 is going to be for 300 actually so I'm going to change this to 300 enter and as you see in the second line item I'm going to receive 15 pieces for 200 so I'm assuming that the supplier is charging me for extra costs for Freight or for any reason so we can also see the impact now I'm going to put the amount here so 600 hit enter and post now I'm going to display the financial entry so go to invoice document display and then enter so this is the invoice we just posted and go to a follow on documents click on accounting document so this is the financial entry for the invoice and as you see we have a credit to the supplier of six hundred and we have a debit to our GRI our accounts so the GRI our account we used as a temporary account between goods receipt and invoice receipt so to understand the impact we are going to talk about each item in the pictures order alone so now I'm going to talk about the item number ten so item number ten we received ten pieces and we invoices the same team pieces to show that quantity is ten and we had so that URI are as debit for one hundred now to make this easier I'm going to also show the other entry of the goods receipt in the same window so this is this one is our invoice receipt entry and this one is decodes receipt financial entry so now for item number ten for item number ten here in the goods receipt we received ten pieces and here we have invoices the same team pieces so that URI are here and the goods receipt is credit for one hundred and the Indian voice it is debit for 100 so that URI are here for the unit number ten is zero which is perfect now for item number twenty so we have received twenty pieces and here we only invoice at fifteen so the gri are at goods receipt was credit for two hundred but here in our invoice it is only debit for 150 although we posted the invoice for two hundred but the remaining 50 has been posted as a price difference why because as far as GRI R is concerned you did not invoice the full quantity that you received so it understands that we have received twenty pieces and only invoice at fifteen so it still has five openin pieces and this will show in our GRI our analysis report and this is actually a very good result so now you understand that GRI R is concerned with with quantities and they're not values so if we receive 20 pieces and we invoice 20 pieces then it is cleared but if we receive 20 but we only invoice 15 then it will remain open for five pieces regardless of the value of the goods receipt and the invoice so now the GRI are here has been debited for 150 and it is credit for 200 so it still has a value of 50 that is open and this will show in our GRI our and else's report now for item number 30 we have received 25 pieces but we have invoices 30 pieces so as you see in our goods receipt we have a debit we have a credit to the GRI are for 250 but in our invoice receipt we have a debit of 300 we have a limit of 300 so now we have a balance in our GRI our 450 debit which means that we have invoices more than we received and this will also show in our GRI R&S reports so now you understand the impact of receiving and invoicing on the GRI our account now I'm going to go back to the GRI our analysis report this one and I'm going to refresh so I'm going to go back and I'm going to filter again on our purchase order and then execute again so now we see in a set of three items we only have to because item number 10 was completely cleared the the same quantity we received is what we invoice it so it doesn't show in this report because this one shows only the open purchase orders and then here you have the item number 20 and 30 item number 20 we have received 20 but we invoice it only 15 so there is a difference of five pieces which is 50 USD and on the other hand for item number 30 we have received 25 and invoice at 30 so we have a difference of 5 which is negative 50 USD so this is our GRI our analysis now before I post anything from this report I'm going to run the GRI our classification reports so you can see how si ap can actually understand that this line item should go to an account that is goods received but not invoiced and this one should go to the goods invoice but not received so the transaction for the GRI our classification I'm going to open a new window here that transaction our IR account as in accounting financial accounting general ledger periodic processing closing reclassify GRI are clearing fa dot 19 so the GL account for the GRI R is this one and the company could is 1710 and I'm going to run the classification for January 2019 so 31st of January 2019 so I'm doing a GRI are clearing and I'm going to execute ok so this is our supplier and we have many pictures in the comments then we have is 2 8 3 so as you see it is showing that we have 250 and then we have 300 and if you go down so this is the goods receipt and this is the invoice receipt so here if you check we can actually filter on the purchase order here I'm going to filter on this one ok so now you see we have invoice receipts for 250 and then another 300 so we have a vet we have 50 remaining and we have goods receipt for 200 and then 150 so we have the 50 and this is what we got from the GRI our analysis we have 50 positive and 50 negative which is the same result we have here so one of these items will be posted the ones that are in the invoice this will go to invoice but not received and then that are in goods receipt will go to received but not invoiced if you go to postings here this is actually showing all the transposons that will be done for the supplier so you are going to find many items but it all has the same concept so the entry is going to debit the gri our account and it will credit this account that we set up in configuration so to see the name of this account I'm going to open a new window so I'm going to copy this one copy and then I'm going to open a new window again transaction if s0 0 to display the GL account master data please enter so this account is goods and services not yet invoiced so this is what we received but not yet invoiced which has a liability so if you see the financial entry it will debit the gri our account and it will credit the goods and services not yet invoiced now if you check this one B and G this one is what we invoiced but not yet received so if you check this financial entry it has a different account so if we check the account name here so this one is goods and services not yet delivered so now you see how ACP can identify whether this Pio is open because it is invoiced and not received or received and not invoiced and it will post this financial entry automatically no if you go down you are going to see other entries which are the same interest but with different signs because it is a reversal so the final the SAS AP is going to post the original entry at the last day of the current month and then it will post the reversal entry in the first day of the new month and actually we determine these dates when we are executing the transaction here so if I go back if you go to the posting tab here you can select the document date the posting date and the reverse are posting date so usually the posting date will be the last day of this month and the reversal posting date will be the first day of the new month so this is the GRI classification so now you understand the meaning of GRI are the impact of goods receipt and the invoice receipt and the meaning of GRI our classification and GRI are maintenance or analysis so now I'm going to go back to the GRI our maintenance this one and I did not post anything in the classification it was just a test run I just display the report so now let's assume that for this one or let's say for this one for this item number 30 the supplier has sent me actually the 30 units but we only received 25 because 5 pieces were lost due to local authorities or any other reason and I am responsible for these five items so they should be charged it to me and not to the supplier so if you click on this check mark here and then you can click on posts si ap has posted a financial entry and this is the number of the financial entry now this is the financial entry so if you go to follow on documents accounting documents so si ap has posted a credit to the GRI our account for the balance which is 50 USD and it posted a debit to a loss account for 50 because ing to this transaction we have been invoice it for 30 pieces but we only received 25 so we have lost 5 pieces and this was posted to this expense account this was also an account that we set up in configuration so now this is the full vision on the rir maintenance or analysis transaction now the last one is the gri are clearing now to understand the importance of the GRI are clearing I'm going to display the line item of the GRI our account so the transaction to display the line items of a GL account as /n f h GL l 0 3 and i'm going to display all the line items we have open on this GL account so I'm going to execute now if I filter on our purchase order so this one filter as you remember the item number 10 we actually invoiced 10 pieces and we received the same Tim pieces so this one shouldn't be shown in our open item lists this one has been already cleared but until you run the GRI our kinetic transaction ASAP will show the this item in our open item list in the GL account line items so in order to remove it from here and the market has cleared you have to run a clearing transaction and actually this clearing has no impact on financial accounting so the financial entry will be the same debits and credits so there is no actual impact on your financial statements but it is only very important for you to to have more visibility and what you have opened on the account line items so the transaction is if we go back I'm going to keep the screen I'm going to use another one so let's go to automatic clearing transaction I'm going to go to accounting financial accounting general ledger periodic processing automatic clearing without specification of creating currency if it was 30 this one so I'm going to and company called 1710 desk so 1710 fiscal year 2019 then I am going to select GL accounts this is my account number the GRI R and then I'm going to select GRI our account special processing so this way s ap knows that it is cleaning as URI our account and it's going to check for the purchase order document number and the precious item number and this way it can more accurately match the goods received and the invoice received together so the clearing date is going to be today and I'm going to execute so now as you see if I filter on our if I look for our purchase order so I'm going to post it here same three nines and here we have the here we have our purchasing document so as you see now for precious document that's ending with two or three our purchasing document for item number 10 which we cleared because we received the same quantity we invoiced s AP is going to clear these two items together so it's going to clear the goods receipt and the invoice receipt I'm going to execute the automatic clearing transaction so go back and you remove test run so until now this was only a report to show what will happen if we remove this check box so I'm going to remove it and then I'm going to execute again the program is in production run okay all right so this is done and it has posted a financial document now if I go back to the GL account line items here and then I'm going to refresh the transaction now filter in our purchasing documents enter now as you see the only item we have open in the purchase order is number 20 why because item number 10 we have received and invoices the same quantities so it is cleared and item number 30 we have received 25 and then voices 30 then we have executed an essay ap GRI our analysis transaction to write off the remaining 5 units so also for GRI are the item number 30 has been cleared so now as you see we only have the item number to any open because this one still has different quantities in goods receipt and invoice receipt so now you understand the importance of GRI our account and the meaning of this account you also know what is meant by GRI our analysis or maintenance GRI are clearing and GRI our classification I know this video has been a long one it has a lot of information you can always watch it another time if there is something you don't understand and the please let me know if you have any questions I will try to make it easier for you to understand and thank you for watching see you again in the next video thank you for watching my videos don't forget to subscribe to the YouTube channel like the Facebook page follow me on LinkedIn and also helping me by sharing the videos so other people can find them