Logistic (MIRO)

1. Logistics Invoice Verification
Logistics invoice verification is the final step in procure to pay cycle. It begins with the vendor submitting the
invoice for the goods sold. The Accounts Payable group, after receiving the invoice from the vendor, enters it in
SAP. Based on the Purchase Order details, Goods Receipt, invoice data and configuration settings, the system
prompts the user with messages. The user then takes one of the following action:
• Park / Save the invoice
• Post the invoice
Park / Save the invoice allows user to make changes later on, so that it can be posted. Once posted, the invoice
is released to accounting for payment. Under certain circumstances, depending upon the configuration, the
invoice can get blocked upon posting. It means that until the block is removed from the invoice document, it
will not be released to accounting for payment. There is an alternative way to carry out Logistics Invoice
Verification. The process is called Automatic Settlement or Evaluated Receipt Settlement (ERS). In this
process, instead of vendor submitting the invoice for payment, the company creates an invoice document (based
on the purchase order and goods receipt). This document is then used as the basis for payment by the accounting
team.
Frequently used transactions:
MIRO - Enter Invoice
MIR7 - Park Invoice
MIR4 - Display Invoice Document
MR8M - Cancel Invoice Document
MRBR - Release Blocked Invoices
MIR6 - Invoice Overview Automatic Settlement
MRRL - Evaluated Receipt Settlement (ERS)
Invoice BlockingInvoice is blocked either by the system automatically or manually. The reason for blocking is
usually a high variance between the PO data and Goods Receipt data as compared to the details mentioned in
the invoice document. If an invoice is blocked, all the items are blocked; even if the block is applicable to a
particular line item. Invoice block needs to be removed on time particularly if the invoice includes a cash
discount. Delay in releasing the invoice may cause expiry of cash discount, if applicable. The most common
variances which are encountered during invoice processing are:
• Quantity VarianceThis generally relates to the difference between quantity received and invoiced by vendor.
Or quantity in the purchase order and invoiced by the vendor.
• Price VarianceThis refers to the variance of per unit price as compared to the purchase order.
• Schedule VarianceThis is generally invoked if the date of invoice entry is earlier than the delivery date in the
purchase order.
The variances can be configured and activated as per the company posting rules. Setting up these variances
helps in two ways. It allows the invoices with minor differences to go through so that a lot of time is not wasted
on small differences. At the same time, these variances stop invoices from financial payment when the
difference exceeds company standards thereby providing a strong control in the process. There is a different
kind of block, 'stochastic block' which is sometimes implemented by the Accounts Payable group. It means that
certain invoices will be blocked for payment at random, so that they can be checked again. There will be no
particular reason for blocking and the block will not be at any line item level. If it is set, there will be an "R" in
the payment block field in document header data. It is usually based on 'threshhold value' and 'probability'.
Configuration Setting for Tolerance Limits:
Tolerances are defined in customizing to configure which variance to be accepted and which one to be blocked.
Tolerance limit for invoice block is set at company code level. The Tolerance limit for each company code is
specified here for each Tolerance Key.

2. The followingscreenshowshowtosetitup for tolerance key“PP” – Price Variance.Itsays thattolerance keyPPis
active forcompanycode 2600 and the lowerlimitfortolerance is5% andupperlimitis$ 100.
There are alsosituationswhenthe invoice,thoughwithintolerance,isenteredwithalarge amount.Itisthen
recommendedtoblockthe invoice tocheckthe amount.Itcan also be applicable tocaseswheninvoicesdonotreferto
any purchase order.To activate thischeck,tolerance key“AN” - Amountforitemwithoutorderreferenceand“AP” -
Amountforitemwithorderreference,needtobe configured.Subsequentlythe followingnode “ActivateItemAmount
Check”needstobe activated.

3. ConfigurationSettingfor Stochastic Block:
In the step"Activate StochasticBlock",stochasticblockisactivatedatcompanycode level fordesiredcompanycodes.
The nextstepis"Set StochasticBlock"andhere "thresholdvalue","currency"and"percentage"isenteredtosetthe
stochasticblockon invoices.If the invoice valueexceedsthresholdvalue,basedonthe percentage (probability) block
will be setonthe invoices.If the invoice valueislowerthanthe thresholdvalue,the percentage (probability) gets
reducedinproportiontothe invoice value andaccordinglyablockisseton the invoices.
Example
Thresholdvalue:$6000 Percentage:50
value Percentage or probability of a block
$7000 50 %
$8000 50 %
$3000 25 % (= 3000/6000 * 50)
$300 2.5 % (= 300/6000 * 50)

4. ReleasingBlockedInvoices
The invoice blockneedstobe removedbeforeanypaymentcanbe processedforthe vendor.Toremove the block,
invoicescanbe released individually,collectivelyandautomatically.
T Code - MRBR
Process
• Enterthe selectioncriteriatoselectthe desiredinvoicesforprocessing.
• Processthe invoice listbyremovingindividual blockingreasons.Thiscouldbe aresultof workflow betwee nbuyerand
AccountsPayable specialist.
• The invoice isthenreleased,eitherbythe buyerorthe AccountsPayable resource.