Difference between GR Indicator and GR Indicator Firm in SAP MM

 

The GR indicator and the GR indicator "firm" in SAP control whether and how a goods receipt (GR) is expected and processed against a purchase order (PO). Here's a breakdown of their differences:

GR Indicator:

• Purpose: Indicates whether a goods receipt is expected for a PO item.
• Options:
  • Blank: A GR is expected. This is the most common setting. The PO history will show that a GR is still pending.
  • X: No GR is expected. This is used for services or other items where a physical goods receipt isn't relevant. The PO history will not expect a GR.
• Impact: Primarily affects the PO history and reporting. It doesn't prevent a GR from being posted, even if the indicator is set to "X." You can still post a goods receipt if you need to, and in some cases, you must post a GR even with "X" to complete the procure-to-pay cycle if there's an invoice to pay. However, it might trigger warnings if the GR is unexpected based on the indicator.
• Flexibility: More flexible, allowing for adjustments and GR postings even if the initial setting suggests no GR is needed.

GR Indicator - Firm (Also known as "GR Non-Valuated"):

• Purpose: Indicates whether a goods receipt is expected and whether it impacts inventory valuation. It represents a GR that does not update inventory.
• Setting: A checkbox in the PO item details.
• Impact:
  • Checked: A GR is expected, but it will not update inventory quantities or values. This is often used for non-stock materials or when goods are received but not yet owned (e.g., consignment). While the GR is recorded, the system does not post to the stock account or update inventory quantities. This can be particularly useful for third-party or pipeline scenarios. It's also used if the material is only for consumption or is immediately withdrawn.
  • Unchecked: A standard GR is expected, which will update inventory.
• Flexibility: Less flexible. While you can technically still post a standard GR even if the "firm" indicator is set, doing so will likely lead to accounting discrepancies and require manual corrections. Therefore, it's crucial to get this setting right from the start.
• Key Difference: The main difference is the impact on inventory valuation. A regular GR increases inventory value, while a firm GR does not.

In Summary:

Feature	GR Indicator (Blank/X)	GR Indicator - Firm (Checked/Unchecked)
GR Expected	Yes/No	Yes
Inventory Update	Yes (even if 'X')	No/Yes
Primary Impact	PO History/Reporting	Inventory Valuation
Flexibility	More Flexible	Less Flexible

The "firm" GR indicator offers more control over inventory valuation, while the regular GR indicator primarily manages expectations and reporting related to goods receipts. Choosing the correct setting is crucial for accurate inventory management and financial reporting.