Managing Closing Activities in Materials Management

All goods and invoice receipts are collected on GR/IR accounts. If amounts and prices match, they are automatically cleared by the system. However, not all items can be cleared automatically, for various reasons:

• Invoice or goods receipt is missing

• Amounts do not match

• Purchase order item was created with an outdated price list

• Delivery costs were posted on the wrong GR/IR account

The GR/IR account reconciliation process is an exception-handling process for all purchase order items with differences between goods receipts and invoice receipts. This is a highly manual process that delays the period-end closing.

SAP S/4HANA for Goods and Invoice Receipt Reconciliation improves the process by displaying all necessary data on one screen so that the processing steps and statuses can easily be documented in the apps Monitor GR/IR Account Reconciliation and Intelligent Goods and Invoice Receipt Account Reconciliation.

The proposal service with machine learning automatically proposes next steps for items that could not be matched, based on the status and situation of a purchase order item. Furthermore, it recommends a priority value for the action, and indicates an estimated root cause of the difference.

The GR/IR clearing account is maintained in MM when the quantity of a material delivered differs from the quantity of the material invoiced, and no further materials are expected. Closing activities in FI also involve analyzing the GR/IR clearing account and ensuring that the balance is zero (goods are delivered but not invoiced, or goods are invoiced but not delivered).

It is recommended to maintain the GR/IR clearing account on a monthly basis. This means that purchase orders and accounts should be adjusted immediately after the actual transactions.

The GR/IR clearing account records all the goods and invoices that are received.

The following activities are performed during RSC stock valuation:

1. Balance sheet valuation:

   You can evaluate stocks for the balance sheet in the following ways:

   • Lowest value determination according to current market prices (RMNIWE00).
   • Lowest value determination according to the rate of movement and range of coverage (RMNIWE10/20).

   You can use the methods separately (single-level procedure) or in combination (multilevel procedure).

2. Value determination:

   You can determine market prices on the basis of goods receipts or invoice receipts. You can provide percentage devaluations for stocks that are not fast-moving or have a large coverage range.

3. Price update in the material master:

   To document the results of the lowest value determination in the material master, you can update the values determined in the price fields in the material master.

   You can also provide a new standard price. In this case, you do not need to carry out the next step, revaluation of the total, since the valuation approach on the balance sheet is calculated directly from the stock quantity and the (new) standard price.

4. Revaluation of total:

   Transaction MRN9 displays the balance sheet values aggregated at account level by company code.

To display several new buttons, select the Database Update checkbox. The first and second buttons control the update of the material prices in the material master.​

The delta posting automates the posting procedure. During the posting, the difference between the balance sheet value and the book value on the balance sheet accounts is posted. This includes the original assignment of the material stocks for the plants, profit centers, segments, or business areas, and so on.

The prerequisites for a delta run are as follows:

• Before you start a delta run, you need to set up the parameters for the delta valuation. To do this, in Customizing, choose Materials Management→Valuation and Account Assignment→Balance Sheet Valuation Procedures→Set Up Delta Run for Balance Sheet Valuation.

• In addition to the standard settings for the accounting document, like Document Type and Document Header Text (optional), an accounting principle and an account modifier for the MM account determination must be assigned. Both are mandatory.

  The accounting principle serves to simplify the depiction of parallel accounting in the system. In Customizing, a ledger group is assigned to an accounting principle. If an assignment of this type is made, documents posted in relation to this accounting principle are only posted to the ledgers that belong to the corresponding ledger group.

• You also need to set up the number range for material ledger documents in relation to the transaction type MY. To do this, in Customizing, choose Materials Management→Valuation and Account Assignment→Maintain Number Ranges for Material Ledger Documents.

The account modifier specifies the account determination for the delta posting. You can carry out a balance sheet valuation numerous times with different valuation approaches in one period. For example, these approaches include different generally accepted accounting principles. You can then display the results on a separate account in financial accounting.

The transaction MRN9 (SAP Fiori tile Balance Sheet Values by Account) allows you to update the balance sheet values to correct accounting principle and business area, profit center, and segment.

The delta balance sheet accounts are set in the MM account determination under the transactions BSD (delta balance sheet) and UMD (offsetting entry for delta balance sheet).

With transaction MRN9DELTA (SAP Fiori tile Delta Runs for Balance Sheet Valuation), you can check, analyze, and reverse the delta postings of the delta run in transaction MRN9.

The figure shows a production order that consists of six transactions. The first four transactions are partially confirmed on the balance sheet key date. The production order is still in production and the goods have not been posted to the warehouses yet.

The procedure for WIP stock valuation is as follows:

1. WIP is calculated on the key date. This determines the WIP value that is to be used.

2. The settlement of the production order displays the value of the WIP on the balance sheet. At the same time, it posts the change in stock in the profit and loss (P&L) statement.

3. After the balance sheet key date, the production order is finally confirmed and settled. This cancels the WIP and the key date posting is reversed in the subsequent period. The balance sheet displays the value of the finished products. At the same time, the production order is credited.

4. You can calculate the WIP on the basis of either the actual costs incurred for the order, or the target costs for completed transactions, depending on the type of production order.

   In the case of the actual costs method, the WIP value of an order is the difference between the actual cost debit and the total credit for partial deliveries.

   With the target costs method, you can calculate the WIP value by multiplying the quantity remaining after each transaction with the planned costs for the transaction. To determine the planned costs, use the current standard cost estimate or the version-specific cost estimate (repetitive manufacturing). In both cases, determine in Customizing which cost apportionment is to be capitalized.