MM: Invoice Reduction

Purpose:

    Invoice Reduction is used to correct errors (price or quantity variance) in vendor invoice.

Process:

1. Use layout Invoice Reduction for posting invoice.
2. Use correction id: Vendor error: reduce invoice. Correction ID is as item level in MIRO tcode.
3. Enter invoice qty (as per vendor invoice) in invoice quantity according to vendor field and invoice amount ((as per vendor invoice)) in invoice amount according to vendor field.
4. This invoice posting creates two accounting documents, fist doc contains account postings for actual qty and amount (as per vendor invoice) while sec document (credit memo) contains difference in between invoice qty and value (as per vendor invoice) and proposed (system) qty and values. The difference amount is posted to clearing account for invoice reduction.
5. PO history displays proposed (system) qty and values for the invoice document.
6. Invoice reduction posting creates a message record which is used to generate a complaint letter to the vendor.

Configuration:

Tax reduction can be carried out at

1. In the complaint document: tax in original posting documents is same as vendor invoice.
2. In the original document: There will not be any tax posting in complaint document.  The tax amount in the original document will be reduced by tax amount for invoice reduction.

MM: Material Valuation

•
• Material can be valuated (valuation area) either at plant level or company code level. 
• Material type controls if material is valuated or not.
• Material can be valuated either at Standard Price or Moving Average Price (MAP). 

Standard Price:
• All goods movements are valuated with the same (standard) price. Variances from this standard price are posted to price difference accounts.
• GR/IR account is updated at PO price.

MAP:
• System valuates goods receipts with the purchase order price and goods issues with the current moving average price. If there is any difference in price during IR, difference is posted to stock account and system calculates new MAP (total value / total stock).
• If material stock is less than invoice quantity, stock account is debited or credited for actual stock and remaining amount is posted to price difference account.
• GR/IR account is updated at PO price.

SD: Rebates

Purpose:

1. A rebate is a discount given to the customer retroactively. This discount is based on the sales volume over a specific period of time.
2. Rebate can be independent of sales volume also.

Process:

1. Create rebate agreement. Specify payer, condition record, validity, settlement material etc.
2. System keeps track of rebated related billing documents including credit and debit memos.
3. Accruals are posted to financial accounting when billing document is released to accounting.
4. Rebate settlement can be done either manually or automatically or using batch programs (in the background).
5. A credit memo is issued for the accumulated rebate amount to settle the rebate agreement.
6. Retroactive rebate agreement helps to take care of billing document (within rebate agreement validity period) created before creation of rebate agreement.

Configuration/Master Data

1. Rebate processing must be activated for customer master (payer), Sales organization and Billing document type.
2. Rebate condition types are created with condition class ‘C’ (Expense reimbursement).
3. Define rebate agreement type.
4. Define condition type groups to define group of condition types and tables for rebate processing.
5. Assign condition type group to rebate agreement type.
6. Assign condition types and conditions tables to condition type groups.