For credit Memo
For invoice reduction
Example Accepting Price variance
Example Accepting Qty variance
If you go through these links you will get the clear picture
In SAP you can say these are different but in business point of view these are same
as because both of these postings are similar in nature
When we cancel MIRO using MR8M postings are
Vendor A/c Dr.
Gr/IR A/c Cr.
And when we perform MIRO with option credit Memo
Vendor A/c Dr.
Gr/IR A/c Cr.
So these are similar nature
HI, Credit Memo will be used if you want to send the vendor the Credit note for deduction,because vendor should know about the Credit Memo,
MR8M is your internal adjustment, if you by mistake did wrong posting & you want to correct it then you will use MR8M & again do the LIV.
Subsequent Credit u2013 You receive a credit memo from a vendor decreasing the total invoiced value on a previous invoice, not the total invoiced quantity. You must change the transaction from Invoice to Subsequent credit. It is a reduction of value but not quantity by the amount of the credit memo.
Example: If due to poor quality the value of the material is reduced by vendor as compared to PO amount.but u posted invoice to the amount as in po.so excess payment done----
here we need to adjust it in subsequent credit memo.
Difference between Credit Memo & Invoice Reduction,
Credit memo: This functionality is used if you have performed an IV for quantity 100 and later you have relaised that you have to make it for only 90 then you hit a credit memo for remaining 10 .Note that during credit memo the Inventory accounts are not getting hit .It is only negation of IV entries.
Credit Memo for eg. it can be used for vendor returns, Return delivery (via GRN) will be done and based on the PO and return delivery quantity, the credit memo will be raised .
Invoice Reduction: If your Vendor Invoice you for the stock quantity which he has not delivered yet,
So u will be using this invoice reduction to reduce the invoice by the undeliverd quantity
PO 10 pc @ 10rs/pc
MIGO 5 pc @ 10 rs/pc
so invoice should be of
5 pc multiplied by 10 rs
now vendor sends u invoice for 100 rs
so now u r going to reduce his invoice
so system post the invoice with 100 rs but simultaneously system creates credit memo of 50 rs
means u r giving 100 rs and at the same time getting back 50 rs in the form of credit note.
Hi, As i told above,
> but i have one doubt if i made and invoice of 100qty and later i feel that i need for 90
>>> If your finance had already did the payment then you need to go for credit memo, and if not then you can do MR8M & again book the invoice for 90 & do the payment for 90 only,
>then what abt the MIGO is that would be for 100qty or 90qty as my GR
>>> if MIGO is for 100 then you do not need to do anything, if MIGO is for 90 follow the above process.
You are right when we post Invoice Reduction System posts a credit memo document in the background automatically.
Just check this link for the Tax treatment in invoice reduction
Credit memo :
You can only use Credit memo when you already entered the GR for 100 qty and posted the invoice for 100 qty. now you find that 10 qty is damaged and you return 10 qty to vendor and you want to adjust the value of the 10 qty with a credit memo. i.e you are cancelling 10 qty in the previously posted Invoice.
Invoice reduction :
You use Invoice reduction at the time of Invoice and not after the Invoice posting. Vendor reduction is done for both value and qty. If vendor delivers only 90 qty @ GR and sending the invoice for 100 qty. I understand your point of confusion here. In this case, when you try to post the invoice, system only picks 90 qty if you activated GR based invoice verification. Now you can simply post the invoice i.e ignoring the vendor invoice which is 100 Qty. or you post the invoice for 90 Qty and also you raise a complaint to vendor for excess invoice. So you select " correction indicator 2" so system allows you to enter the actual amount or actual quantity of the vendor invoice (physical invoice from vendor). Subsequently you can print the complaint document using below config. another example for invoice reduction with excess value. PO qty = 10, PO value 100, GR received = 10 qty. Vendor sends the invoice for 10 Qty and value 110. Now if you agree with vendor, you simply change the amount(it allows as per tolerance) or you can ignore vendor invoice and post only 100(system picked the value from PO) or you want to post the invoice also complaint to vendor by entering actual amount sent by vendor. Now you can print the complaint document using MR90 and output type - REKL. Sending complain to the vendor is main funda of invoice reduction.
Configuration neccessary for Invoice reduction
Account determination u2013 transation event key - RKA
Document type for Invoice reduction u2013 OMR4
Message type u2013 REKL
Condition record u2013 MRM1