How the GR-Based Invoice Verification Setting Affects Credit Memo Processing

  • by Luc Cayet, SAP Practice Manager, Ariston Consulting & Technologies, Inc.
  • September 15, 2004
The choice of whether to activate the GR-based invoice verification setting may seem inconsequential. However, this setting can have unforeseen repercussions, including inaccurate reconciliation figures. The author shows you what the GR-based invoice verification setting does and how it affects your bookkeeping. He also provides tips to help you avoid related processing errors.
Key Concept
The GR-based invoice verification check box records invoices and credit memos against individual deliveries, while the Service-based invoice verification check box records them against the sum of all deliveries for a purchase order (PO) line item. The two settings work in the same way, the difference being that the service-based indicator allows you to track invoices to individual services listed on the service entry sheets.

The customizing settings for the vendor master offer you several check box options. Of these, the two that seem particularly simple are GR-based invoice verification (where GR equals "goods receipt") and Service-based invoice verification. You can find both settings on the Purchasing data screen of the vendor master data, as shown in Figure 1.

Figure 1
The vendor master’s customizing settings

The choice of whether to turn on the GR-based invoice verification and Service- based invoice verification indicators in the vendor master seems straightforward. In the many implementations I have been involved with, I've often noticed that the implementation teams have made across-the-board decisions regarding one or both options (i.e., switching the check box on or off for all vendors). Many sites choose to use GR-based invoice verification all the time because it prevents a user from entering an invoice against a purchase order (PO) item for which no deliveries are recorded. Because the results of turning the setting on or off don't show up until long after, you could easily make the same error many times without realizing it. Unfortunately, these two check boxes can complicate the jobs of those who work in A/P.

I will show you why an across-the-board decision regarding these settings might not always be in your best interest by explaining the real impact of these settings on the business process of entering invoices and credit memos. I will focus on the GR-based invoice verification check box, but I trust that you can extrapolate my conclusions to the Service-based invoice verification setting.

Luc Cayet

Luc Cayet is an SAP practice manager with Ariston Consulting & Technologies, Inc. Luc has been working with SAP since 1991, focusing on the FI/CO modules with emphasis on cross-module integration to FI/CO, cost accounting, and product costing. He also has experience with MM, SD, PS, and ABAP. Although he has extensive experience with the high-tech and bioscience industries, Luc has focused his attention for the last several years on the public sector (mainly state and local government).

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