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 It's also used if the material is only for consumption or is immediately withdrawn.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.

Stock Transfer Using Stock Transport Order in SAP

The number of procedures are available to enable us to transfer materials from one plant to another:

Advantages of the Stock Transport Order

The transfer of stock using a stock transport order has the following advantages over the transfer of stock without a stock transport order:

Ø  A goods receipt can be planned in the receiving plant.

Ø  We can enter a vendor (transport vendor) in the stock transport order.

Ø  Delivery costs can be entered in the stock transport order.

Ø  The stock transfer order is part of MRP: Purchase requisitions that were created in MRP can be converted into stock transport orders.

Ø  The goods issue can be entered using a delivery via Shipping

Ø  The goods receipt can be posted directly to consumption.

Ø  The entire process can be monitored via the purchase order history.

Ø  Simplified Inter-Company or Inter-Plant Transfers: STOs streamline the movement of goods between different plants within the same company or even across company codes. This is much smoother than handling external purchase orders.

Ø  Reduced Paperwork and Manual Processes: STOs automate many steps involved in transfers, reducing manual data entry and potential for errors.

Ø  Automatic Updating of Stock: When an STO is processed, the system automatically updates stock levels in both the sending and receiving locations. This real-time visibility is essential for accurate inventory management.

Ø  Improved Material Planning: STOs help with better material requirements planning (MRP). The system can recognize pending STOs and factor them into future material needs.

Ø  Trackable Movement of Goods: STOs provide a clear audit trail of the entire transfer process, allowing you to track the movement of goods at each stage.

Characteristics of the Various Stock Transfer Procedures

The following table lists the characteristics of the individual procedures used for stock transfer.

	Plant to plant 1 step	Plant to plant 2 steps	St. trnsp. ord. w/o SD	St. trnsp. ord. with SD	St. trnsp. ord. with billing
Order type MM-PUR	-	-	UB	UB	NB
Movement type MM-IM	Transfer postg. using 301	GI: 303 GR: 305	GI: 351 GR: 101	GI: 641 GR: 101	GI: 643 GR: 101
Delivery type SD	-	-	-	NL	NLCC
Billing type SD	-	-	-	-	IV
Doc. type MM-IV	-	-	-	-	RE
Price	Valuation price	Valuation price	Valuation price	Valuation price	Pricing in SD and MM
Planning via...	Reservation	-	Purchase order	Purchase order	Purchase order
Stock after GI	-	Stock in transfer	Stock in Transit	Stock in Transit	(Stock in transit CC)
Delivery costs	-	-	yes	yes	yes
Cross-company-code via...	Company code clearing	Company code clearing	Company code clearing	Company code clearing	Revenue account; GR/IR clearing

 

Price differences (PRD) If the PO Net price has the same value than standard price in SAP

Price differences (PRD) when the PO Net price has the same value than standard price in SAP

This page is to explain how it is possible to have price differences when the Purchase Order Net Price has the same value that standard price in the material master data.

Here is an example to justify the standard system design.

Standard Behavior

Because the rounding rule adopted by SAP system is restricted to two decimal places. It affects the goods receipt valuation calculation.

SAP note 107206 explains this behavior in details.

Example

This example show us price differences when the values are the same:

Data:       

PO qty: 99 KG          

PO Net price: 10,04 EUR  

PO Price Unit: 100 KG

A)     Create a Purchase Order in ME21N.

ME21N – Create Purchase Order

B)      Post a partial Goods Receipt for the Purchase Order in MIGO

Data:               

GR qty: 87 KG

MIGO – GR for PO

C)      Calculate the GR value (WRX)

Data:  

PO qty: 99 KG  

PO Net price: 10,04 EUR  

PO Price Unit: 100 KG    

GR qty: 87 KG

Formulas:  

PO Net Value = Po qty x (Po Net price / Po Price Unit)   

GR value (WRX) = GR qty x (PO Net Value / PO qty) 

Calculation:        

PO Net Value = Po qty x (Po Net price / Po Price Unit)  

 PO Net value = 99 KG x (10,04 EUR / 100 KG)        

PO Net value = 9,9396 EUR             

PO Net value = 9,94 EUR

GR value (WRX) = GR qty x (PO Net Value / PO qty)     

GR value (WRX) = 87 KG qty x (9,94 EUR / 99 KG)    

GR value (WRX) = 8,7351 EUR   

GR value (WRX) = 8,74 EUR  

D)     Calculate the stock account value

Data:              

Standard Price: 10,04 EUR   

Price unit: 100

Formula:     

BSX = GR qty x (Standard Price / Price Unit)   

BSX = 87 KG x (10,04 EUR / 100 KG)       

BSX = 8,7348 EUR                

BSX = 8,73 EUR                                       

MM03 – Display Material – Accounting 1

E)      Calculate the price difference value

PRD = BSX – WRX           

PRD = 8,73 EUR – 8,74 EUR  

PRD = 0,01 EUR

F)      Check FI document via ME23N (PO history), MB03 (via material document) or in FB03 directly. See that stock account was debited on 8,73 EUR, clearing account was credited on 8,74 EUR and, as a consequence, price difference account was debited on 0,01 EUR.

ME23N – Display Purchase Order


 
 

Source:https://help.sap.com/docs/SUPPORT_CONTENT/erpscm/3362168409.html

Subcontracting Stock Transfer Order (STO) process

 STO process in  Subcontracting

We are referring to the Subcontracting Stock Transfer Order (STO) process in the context of SAP or a similar ERP system. Subcontracting is a business arrangement where a company sends components or raw materials to a subcontractor (a third-party manufacturer) to have them processed or assembled into finished goods.

Here's a general outline of the Subcontracting Stock Transfer Order process:

Create Purchase Requisition (PR):

A purchase requisition is created to initiate the procurement process. This is usually generated based on the requirements for the components that need to be sent to the subcontractor.

Create Purchase Order (PO):

A purchase order is created based on the purchase requisition. The PO specifies the details of the subcontracting arrangement, including the components to be sent, quantities, delivery dates, and the subcontractor's details.

Goods Issue (GI) - Stock Transfer to Subcontractor:

Before sending the materials to the subcontractor, a goods issue is performed to reduce the stock of the components in the issuing plant. This is done using a stock transport order (STO) to transfer the materials to the subcontractor's stock.

Transportation of Components to Subcontractor:

The components are physically transported to the subcontractor's location. This may involve coordination with a logistics or transportation system.

Goods Receipt (GR) at Subcontractor:

When the subcontractor receives the components, they perform a goods receipt to acknowledge the receipt of the materials into their stock.

Subcontracting Process at Subcontractor's Facility:

The subcontractor processes or assembles the components into finished goods according to the specifications outlined in the purchase order.

Goods Issue (GI) - Finished Goods Transfer:

Once the subcontracting process is complete, the subcontractor issues the finished goods back to the originating plant using a goods issue.

Goods Receipt (GR) - Finished Goods at the Originating Plant:

The originating plant receives the finished goods through a goods receipt, and the stock is updated accordingly.

Invoice Verification (MIRO):

The originating plant performs invoice verification to process the subcontractor's invoice based on the services provided.

Payment to Subcontractor:

The payment is made to the subcontractor based on the terms agreed upon in the purchase order.

This process ensures that the components are sent to the subcontractor, processed into finished goods, and then returned to the originating plant, all while maintaining proper stock and financial records in the ERP system.

Purchase Order condition type default value set as 0.01 / Purchase Order condition type default percentage set as 0.01

There are 3 options to maintain the default value set as 0.01 for a condition type.

 

1)   Condition record maintain in the Purchase Info record

Ø  We can maintain the condition as fixed value or percentage in the purchase info record for a particular Material-Vendor-Purchasing Organization-Plant combination.

 

Ø  Example: We can maintain the condition FRA1 as 0.01 %/PC in info record for a particular Material-Vendor-Purchasing Organization-Plant combination.

 

2)   Condition Record maintain via MEK1/MEK2/MEK3 Transaction.

Ø  Condition record contains the record which is maintained against condition table with regards to condition type.

Ø  It can be fetched via access sequence and condition type.

Ø  Suppose we maintain a condition record against condition table (vendor) with regards to condition type. Then whenever the vendor used this condition type, the condition record will be fetched.

3)   Restrict the Value via BAdi

If still we want to restrict the value at PO level based on condition type then check the below Badi and method processing.

Badi:ME_PO_PRICING_CUST

Method: PROCESS_KOMP