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SAP Invoice Verification Process Guide
A comprehensive visual guide to understand the complete process
Procure to Pay Cycle
The Invoice Verification process is a critical part of the Procure to Pay cycle in SAP. It ensures that invoices match the goods ordered and received before payment is processed.
Invoice Entry Methods
There are multiple ways an invoice can be entered into the SAP system:
Manual Entry
Using transaction MIRO
Consignment
Settlement document
Pipeline Material
Settlement document
Automated
EDI/IDocs connection
ERS
Evaluated Receipt Settlement
Invoice Plan
Scheduled invoices
Invoice Verification Types
What is Three-Way Match?
Three-way match is a procedure that matches information from three documents to ensure accuracy before payment is made:
Purchase Order
- Supplier/Invoice party
- PO quantity
- Price per unit
- Material details
- Delivery terms
Goods Receipt
- Material received
- Quantity received
- Receipt date
- Storage location
- Quality status
Invoice
- Supplier information
- Invoice quantity
- Price per unit
- Invoice date
- Payment terms
Note: The system automatically checks for matches between these documents. If discrepancies exceed defined tolerances, the invoice may be blocked for payment.
PO-Based Invoice Verification
In PO-based verification, the invoice is matched primarily against the Purchase Order:
- The reference document is the Purchase Order
- Even if no Goods Receipt has been posted, an invoice can still be processed
- If multiple GRs exist, the system shows a single line item based on PO
- Traceability to specific deliveries is limited
Warning: This method provides less control over invoice-to-delivery matching, but offers more flexibility for processing invoices.
GR-Based Invoice Verification
In GR-based verification, the invoice is matched primarily against the Goods Receipt documents:
- The "GR-based Invoice Verification" checkbox must be set in the PO or vendor master
- Reference documents are the Goods Receipt documents
- For each GR, a separate invoice line item is created
- Provides better traceability between invoices and deliveries
- At least one GR must exist before an invoice can be processed
Note: Both PO-based and GR-based methods will show warnings if invoice quantity exceeds GR quantity. The main difference is in how the reference documents are handled and displayed.
Evaluated Receipt Settlement (ERS)
ERS is an automated invoice creation process used for trusted vendors with regular deliveries:
- No physical invoice from vendor is required
- The system automatically creates invoice documents based on Goods Receipts
- Requires "ERS" checkbox to be set in vendor master and PO
- Can run manually or as a scheduled background job
- Settlement documents are sent to vendors as proof of payment
Benefits: Reduces manual invoice processing, eliminates invoice matching errors, and streamlines the P2P process for trusted vendors.
Special Cases in Invoice Verification
Unplanned Delivery Costs
Unplanned delivery costs are additional costs that were not included in the original PO but appear on the vendor's invoice:
Examples
- Expedited shipping (air freight) requested after PO creation
- Additional packaging requirements
- Equipment rental for unloading
- Special handling fees
How to Process Unplanned Delivery Costs
There are several ways to handle unplanned delivery costs:
- During invoice entry: Enter the additional cost in the "Unplanned Delivery Cost" tab in MIRO
- Direct posting to material: Add cost directly to material value (affects moving average price)
- Posting to G/L account: Post to specific expense accounts
Configuration: The system can be configured to distribute unplanned costs among invoice items or post them to specific G/L accounts.
Credit Memos
Credit memos are used when the vendor needs to refund or credit money to your company, usually related to quantity discrepancies:
Key Point: Credit memos adjust both quantities and values in the system. They are typically used for active/recent POs where quantities need to be corrected.
Subsequent Credit/Debit
Subsequent credits and debits are used primarily to adjust values without changing quantities:
Subsequent Credit
Used when vendor needs to refund money but quantities are correct
Example: Vendor charged €15/unit instead of agreed €10/unit
Subsequent Debit
Used when additional payment to vendor is required but quantities are correct
Example: Agreed additional services not included in original price
Important: Subsequent debits should be carefully controlled as they represent additional outflow of funds. Make sure proper documentation exists to support the additional payment.
Background Invoice Processing
Background processing allows for efficient handling of large volumes of invoices:
Benefits: Allows invoice clerks to focus only on problematic cases while routine invoices are processed automatically. Significantly improves efficiency for high-volume invoice processing.
Comparison: PO-Based vs. GR-Based Invoice Verification
| Feature | PO-Based Verification | GR-Based Verification |
|---|---|---|
| Reference document | Purchase Order | Goods Receipt |
| Requires GR before invoice | No - can post invoice without GR | Yes - at least one GR must exist |
| Line items in invoice | One line per PO item | One line per GR document |
| Traceability to deliveries | Limited - cannot trace which delivery an invoice relates to | High - each invoice line links to specific GR |
| Configuration | Default behavior | Requires checkbox in PO or vendor master |
| Flexibility | Higher - fewer restrictions | Lower - more controls |
| Best for | Simple scenarios, services | Complex supply chains, multiple deliveries |
Key SAP Transactions
MIRO
Enter incoming invoices
MR8M
Display invoice document
MRBR
Release blocked invoices
MIRA
Park invoice for background processing
MR6
Review problematic invoices
MRL
Evaluated receipt settlement