Describing GR/IR Reconciliation for Accounts Payable Closing

Objective

After completing this lesson, you will be able to manage the GR/IR clearing account using the Monitor GR/IR Account Reconciliation Fiori app

GR/IR Account Clearing

The figure illustrates the process flow for transitioning from an old fiscal year to a new fiscal year. It begins with GR/IR Reconciliation, followed by Intercompany Reconciliation and Supplier Balance Confirmation. These steps are part of the old fiscal year. The process then moves to Balance Carryforward, marking the transition to the new fiscal year. In the new fiscal year, the steps include Managing Posting Periods and Special Periods, Foreign Currency Valuation, Regrouping/Reclassification, and finally, Managing Special Periods. In this image, the GR/IR reconciliation process step is highlighted.

Introduction

So now that we understand period-end closing activities, let’s learn about reconciling the GR/IR account.

In a perfect world, invoice quantities and amounts correspond to purchase orders and goods receipts and are cleared automatically on GR/IR accounts.

However, not all items can be automatically cleared for many reasons:

  • Missing invoice or goods receipt
  • The amounts don’t match up
  • Outdated price list for the purchase order
  • Delivery costs were posted to the wrong GR/IR account
The figure illustrates the procurement process cycle, starting with the creation of a purchase order for a supplier. This leads to the receipt of incoming goods, followed by the generation of goods receipts. Concurrently, incoming invoices are received and recorded as invoice receipts. The process culminates in automatic clearing, resulting in cleared financial documents. This cycle ensures a streamlined and efficient procurement and financial reconciliation process.

Be aware that some financial documents that can't be cleared automatically need to be reviewed and processed manually.

GR/IR Reconciliation

So, how do open items on the GR/IR account affect period-end closing activities? Let’s have a look at some ways this can affect our work in General Ledger Accounting, with some help from Jake and his manager.

Select the play button to learn about the GR/IR account analysis to be performed in the SAP system.

When it comes to the clarification of open purchase order items, you perform the following steps.

  1. Analyze open purchase order items
  2. Define items
  3. Process items

All three steps can be performed using the SAP Fiori apps Monitor GR/IR Account Reconciliation and Reconcile GR/IR Accounts.

Business Scenario: GR/IR Reconciliation

In his new role, Jake will be in charge of running periodic GR/IR reconciliations to manage the number of open purchase order items. He will use the Monitor GR/IR Account Reconciliation app to view open items that require clarification on the GR/IR accounts and analyze the reconciliation of the goods and invoice receipts using various KPIs. Following that, Jake will navigate the Reconcile GR/IR Accounts app to investigate or clarify additional purchase document items.

We will observe Jake and his manager demonstrating the process of clarifying an open purchase order item together with the invoice verification team.

Select the play button to learn how to reconcile open purchase orders and monitor the GR/IR account in this informative video. Discover key performance indicators and how to investigate open transactions. Find out how to resolve issues and clear open purchase order items.

For additional information, please refer to: Working with Reconcile GR/IR Accounts - SAP Help Portal

Reconcile the GR/IR Clearing Account

In this exercise, you will reconcile the GR/IR clearing account by performing a write-off posting.

Glossary

Were there some terms in this lesson you’d like further information on? See below a glossary of mentioned terms:

Situation Handling: Situation Handling is a feature that alerts users about important situations. For further info, see Situation Handling in a Nutshell - SAP Help Portal

GR Amount Surplus: KPI in the Monitor GR/IR Account Reconciliation app. It shows the number of total purchase order items with surplus goods receipts.

IR Amount Surplus: KPI in the Monitor GR/IR Account Reconciliation app. It shows the number of total purchase order items with surplus invoice receipts.

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