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SAP Invoice Verification Process - Inventory Management - SAP Implementation

INVOICE VERIFICATION   Overview: Logistics Invoice Verification Logistics Invoice Verification is a part of Materials Management... thumbnail 1 summary

INVOICE VERIFICATION

 Overview: Logistics Invoice Verification

Logistics Invoice Verification is a part of Materials Management (MM). It puts an end to the purchasing cycle and hands over further processing to Financial Accounting. The verification process checks the incoming invoices of their content, prices and other details.

Logistics Invoice Verification is thus integrated with the components Financial Accounting and Controlling. It passes on the relevant information about payments or invoice analyses to these components.

Credit memos can also be processed, either as invoice reversals or return deliveries.

SAP Recommended Process of  Invoice Verification

An invoice is a document from the vendor containing the payments to be made against the delivery of goods or services. An incoming invoice can be an invoice or a credit memo. An invoice is to be used when the vendor charges for the goods/services he has supplied to MyCompany. A credit memo is to be used when a return delivery has been made to the vendor due to quality problems or any other reason.


All invoices will be parked by commercial department after verification and the same will be finally booked / posted by Accounts Payable Section. Invoice verification will also be required in case of import. The invoice verification will be done on the basis of bank advice in accounts. At the time of final payment/ release of payment to vendor, adjustment of the advances (if applicable) will also be done by accounts.

Vendor Invoice

The invoice is to be entered against the purchase order. The system will suggest the amount to be invoiced. The invoiced amount would be equal to the value of the goods/services delivered. The system would not allow excess amounts to be posted (unless tolerance is devised otherwise).

The vendor/invoicing party’s details are automatically picked from the master data record.  Details would include the vendor’s name, address, payment terms, withholding tax etc.

The invoice entry is to be checked and simulated so that vendor liability can be created in the system. As soon as the invoice has been parked by the commercial department (pre-decided), it would be available for verification and posting by Accounts Payable Section.

Credit Memo

The term credit memo always refers to a credit memo from the vendor. Therefore, posting a credit memo always leads to a debit posting on the vendor account.

As in the case of invoices, credit memos refer to purchase orders or goods receipts. They are used to correct the purchase order history if the quantity invoiced was too high, for example, if an invoice was too high or if part of the quantity was returned.

When you post a credit memo, the total quantity in the purchase order history is reduced by the credit memo quantity.

 

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