During invoice entry, the system checks whether the total of the net amounts of the invoice items, the tax amounts and, if applicable, the planned delivery costs match the invoice amount. For invoices with small differences, the question arises whether you need to determine the reason for this variance at item level. If you want to reduce the entry effort, you can use the following functions in such cases:
Total-based invoice reduction (automatic reduction)
Total-base acceptance
With both functions, the system can post an invoice despite the difference if the variance is within a predefined tolerance range.
Total-Based Invoice Reduction
Whether a variance is automatically reduced depends on whether you have assigned a tolerance group to the supplier in the supplier master record and on the specific Customizing settings for this tolerance group.
As with manual invoice reduction, two accounting documents are created for total-based invoice reduction. The first document contains the invoice postings and an additional posting to a invoice reduction clearing account. The second document contains a credit memo, which creates the offsetting entry to the invoice reduction clearing account.
Therefore, in invoice reduction you do not actually reduce an invoice. Instead, an additional credit memo for the amount of the reduction is posted. The amount payable to the supplier is the value of the invoice reduced by the credit memo amount.
When you post an invoice reduction, the system creates a message which can be used to send a letter of complaint (notification of credit memo posting) to the vendor. In contrast to manual invoice reduction, you cannot inform the vendor of the cause of the reduction because the system does not actually determine this.
Total-Based Acceptance
In total-based acceptance, a difference in the invoice is assumed and automatically posted to an expense or revenue account.
For example, you can use total-based acceptance in the following situations:
- The invoice is for an amount less than expected.
- The invoice with an increased amount comes from a reliable vendor.
- The reasons for the difference are too minor to be researched.
- The expected costs of research for invoice reduction are too high compared to the amount or the likely impact on vendor relations.
Customizing for Total-Based Reduction and Total-Based Acceptance
You specify the limits for total-based acceptance in Customizing. You have two options:
Company-code-dependent with tolerance limit BD (Form small differences automatically)
IMG → Materials Management → Logistics Invoice Verification → Invoice Block → Set Tolerance Limits (OMR6)
Caution
If you set the BD tolerance limit to Do not check, all variances are accepted as small differences. However, if you do not want to accept small differences automatically, activate the check and do not enter a limit value.Supplier dependent and company code dependent using the tolerance group of the invoice verification.
IMG → Materials Management → Logistics Invoice Verification → Incoming Invoice → Configure Supplier-Specific Tolerances (OMRX)
If the master record of the vendor contains a tolerance group for invoice verification, these settings take priority over those of tolerance group BD. Enter the tolerance group of invoice verification in the vendor master record in the company code-specific data for Payment transactions.
You can configure different tolerances for each tolerance group of invoice verification:
Negative differences:
You can specify a tolerance for small differences and for total-based acceptance of the invoice.
If the negative difference falls within the configured tolerance limits for negative small differences, the system creates a posting to the relevant small differences account.
If the negative difference is larger than the configured small difference, the system checks whether it falls within the tolerance area for total-based acceptance (lower limit). If the difference falls within this tolerance area, the system posts the difference to the small differences account.
If the difference is absolutely greater than the defined tolerances for small differences and total-based acceptance, the invoice cannot be posted.
Positive differences:
You can specify a tolerance for small differences, a tolerance for total-based acceptance, and a tolerance for total-based invoice reduction.
If the positive difference falls within the configured tolerance limits for positive small differences, the system creates a posting to the relevant small differences account.
If the positive difference exceeds the small difference tolerance, the system checks whether the difference falls within the defined invoice reduction limit. If it does, the system performs a total-based invoice reduction for the difference amount.
If the invoice reduction limits are set to Do not check, the system compares the variance with the upper limits for total-based acceptance for positive differences. If the positive difference falls within this configured tolerance limit, the system creates a posting to the relevant small differences account.
If the difference is greater than the defined tolerances for total-based acceptance and/or total-based reduction the invoice cannot be posted.
The following figure shows a screenshot of the customizing setting for a supplier-specific tolerance group.
