Logistics Invoice Verification (MM-IV-LIV)

Purpose
Logistics Invoice Verification is a part of Materials Management (MM). It is situated at the end of the logistics supply
chain that includes Purchasing, Inventory Management, and Invoice Verification. It is in Logistics Invoice Verification
that incoming invoices are verified in terms of their content, prices and arithmetic. When the invoice is posted, the
invoice data is saved in the system. The system updates the data saved in the invoice documents in Materials
Management and Financial Accounting.

Integration
Logistics Invoice Verification is closely integrated with the components Financial Accounting (FI) and Controlling
(CO). It passes on the relevant information about payments or invoice analyses to these components.

Features
In Materials Management , Logistics Invoice Verification has the following features:
 It completes the material procurement process, which started with the purchase requisition and resulted in a
goods receipt.
 It allows invoices that do not originate in materials procurement (such as services, expenses, course costs) to be
processed.
 It allows credit memos to be processed, either as invoice reversals or return deliveries.
An invoice can be processed in Logistics Invoice Verification in various ways:
 Invoice Verification Online
You receive an invoice and enter the information contained in it in the system, comparing the data (such as quantities
and values) suggested by the system with that in the invoice and making any necessary corrections. You then post
the invoice. In the SAP System, a distinction is made between the following types of invoices:
 Invoices with purchase order reference
All the items in a purchase order can be settled. With purchase-order-based Invoice Verification, all the items of a
purchase order can be settled together, regardless of whether an item has been received in several partial deliveries.
 Invoices with goods receipt reference
Each goods receipt is settled separately.
 Invoices without purchase order reference
Invoices can be posted directly to G/L accounts or material accounts.
 Document Parking
You receive an invoice, enter the data in the system, and save the invoice document. The system does not make any
postings. You can change this parked document. When you have finished changing the document, you can post the
parked document.
 Invoice Verification in the Background
You receive an invoice, only enter the total amount of the invoice and match the invoice up with another system
document. The system then checks the invoice in the background. If no errors occur, the system also posts the
 invoice in the background. If errors do occur, the system saves the invoice and you then have to process it in a
separate step.
 Automatic Settlement
 Evaluated Receipt Settlement (ERS)
Here, you do not receive any invoices from your vendors, but post them yourself based on information contained in
purchase orders and goods receipts.
 Consignment and pipeline settlement
You are not expecting a vendor invoice, instead you settle posted withdrawals yourself and send the vendor a
statement of the settlement.
 Invoicing plan
You do not wait for the vendor invoice for goods supplied or services performed every time. Instead you create
invoices based on the dates scheduled in the purchase order and these trigger the payment to the vendor.
 Revaluation
You determine difference values based on retroactively valid price changes and create the associated settlement
documents. You send these documents to the vendor.
 Invoices Received via EDI
The invoice information is transmitted to the SAP System using electronic data interchange and the system tries to
post the invoice automatically. If errors occur, you have to process the invoice manually.
Comparison with Conventional Invoice Verification
Logistics Invoice Verification was developed to take into account requirements that were technically not possible in
the conventional Invoice Verification component, such as distributing MM and FI to separate systems.
All the functions in conventional Invoice Verification are available in Logistics Invoice Verification . If required, you can
use conventional Invoice Verification and Logistics Invoice Verification alongside each other.
The following functions are available only in Logistics Invoice Verification :
 Worklist that you can show or hide
 PO structure that you can show or hide
 Unlimited multiple selection
 Manual invoice reduction
 Total-based invoice reduction
 Invoice Verification in the background
 Verification of invoices with installment conditions
 Posting across company codes
 Control of document parking using workflow
Every organization acquires goods or services to complete its business needs. Once
goods are procured from a vendor and placed in company’s premises through goods
receipt, we need to pay to the vendor for the acquired goods and services. The amount
to be paid along with the details of the material is provided by the vendor in the form of
a document that is known as the invoice. Before paying to the vendor, we need to
verify the invoice. This process of verifying the invoice before making a payment is
known as invoice verification. The key points to note about invoice verification are as
follows −
 Invoice verification marks the end of procurement, after purchase order and
goods receipt.
 Invoice posting updates all the related documents in financials and accounting.
 Blocked invoice that vary from actual invoice can be processed through invoice
verification.
One normally comes across the following terms in invoice verification −

 Posting of Invoice
 Blocked Invoice
 Evaluated Receipt Settlement(ERS)

Posting of Invoice
Posting of invoice is done after having received the goods from the vendor and after
having completed the goods receipt. The invoice received from a vendor is verified
against cost, quantity, and quality by the ordering party, and then the invoice is posted
against that purchase order.
This is the phase where the vendor (seller) is paid from the company and reconciliation
of the invoice and PO is accomplished. Follow the steps given below to post an
invoice.

Path to Post Invoice

Logistics ⇒ Materials Management ⇒ Logistic Invoice Verification ⇒ Document Entry
⇒ Enter Invoice
TCode: MIRO
Step 1 − On the SAP Menu screen, select Enter Invoice by following the above path.
Step 2 − Fill in all the necessary details such as invoice posting date, amount that is
paid to the vendor along with the quantity for which the amount is paid. Click on Save.
Invoice is now posted for the goods receipt.
Blocked Invoice
Sometimes the accounting department may not be able to pay a vendor as per the
invoice raised. This may happen in the following scenario. You try to post an invoice,
however the system expects certain default value against the purchase order or the
goods receipt and the posted invoice differs from the default value. This may lead to
invoice blocking. Invoice blocking is caused due to −
 Variance in amount at item level
 Variance in quantity at item level
It is difficult to analyze small variances in invoice. So, tolerance limits are set up in the
system and if the variance in the invoice is within the tolerance limit, then the system
accepts the invoice. If the variance exceeds the tolerance limit, then it may lead to
invoice blocking. In such cases, we need to manually unblock or release the blocked
invoice if it has to be processed. Follow the steps given below to unblock an invoice.
Path to Release Blocked Invoice
Logistics ⇒ Materials Management ⇒ Logistic Invoice verification ⇒ Further
Processing ⇒ Release Blocked Invoice
TCode: MRBR
Step 1 − On the SAP Menu screen, select Release Blocked Invoices by following the
above path.

Step 2 − Provide necessary details such as company code, invoice document number,
vendor, posting date, and purchasing group. Then click the execute button. The
blocked invoice will be released.
Evaluated Receipt Settlement
Evaluated Receipt Settlement (ERS) is an easy method of settling goods receipt
automatically. If the ordering party has agreed with the vendor on all financial terms
and condition, then it need not verify the invoice. Invoice will be posted automatically
from the information present in the purchase order and the goods receipt. Given below
are the advantages of having an ERS −
 Purchase orders can be settled and closed quickly.
 It reduces human efforts, as there is no need to verify the invoice.
 Amount and quantity variances in invoice can be avoided with the help of ERS.
To implement ERS, some mandatory settings are to be done in the vendor master.
  Go to XK02 (Change mode of vendor master).
 Select Control data tab.
 Check the AutoEvalGRSetmt Del. and AutoEvalGRSetmt Ret box.
 Click on Save. Now the particular vendor is enabled for ERS.

Follow the steps given below to create an ERS.

Path to Create ERS

Logistics ⇒ Materials Management ⇒ Logistic Invoice verification ⇒ Automatic
Settlement ⇒ Evaluated Receipt Settlement (ERS)
TCode: MRRL
Step 1 − On the SAP Menu screen, select Evaluated Receipt Settlement (ERS) by
following the above path.

Step 2 − Fill in all the necessary details such as company code, plant, goods receipt
document number and date, vendor, and purchasing document. Click on Save. ERS
will be created for the corresponding purchase order and goods receipt.