How should the PPV (Purchase Price Variance )be handled in Materials Management (SAP MM)

[former_member253084]

Hi SAP,

We don’t have Material master. We create Purchase orders directly for expenses. When there is a difference in the cost between the time of PO creation and Invoice creation, how should the PPV (Purchase Price Variance) be handled?

Say for example PO cost was $100 and the cost increased to $103 at the time of invoicing. How should be post the $3 as PPV?

Regards,

Bhaskar Reddy.S

[BijayKumarBarik · Accepted solution]

Hi,

Use t.code: OMR6 and maintain the required tolerance limit( for example:- 5$) for the tolerance key BD and then assign a G/L account to DIF key in t.code:OBYC.

Now test to post the MIRO document with your PO amount(999$) against required Invoice amount(1002$) and see the difference which account the  difference is 3$ posting!

Regrads,

Biju K

[Former Member]

This message was moderated.

[former_member197616]

Hi,

This can posted in another way using a GL account . In the item detail screen there will be a tab for GL account enabling to post to separate GL account . Enter the difference of the amount in that to the GL which is for your price diff / as you wish and make the header and item to the same vendor amount and then post so that that difference will be to the desired GL will get post . Please test and let us know .

Regards,

[former_member253084]

Hi Raghavendra Sai,

We want it to be automated. We don’t want manual entry.

Kindly advise

Regards,

Bhaskar Reddy.S

[former_member233510]

Consumable material without a material master requires manual assignment to an account assigned object such as cost center, project or directly to a customer order. If there is a price variance between the PO & IR, then the system use tolerance key PP to check variance. If the variance is within the specified limit, then the difference amount charges to account assigned object.

[former_member183424]

It will be depend upon different business scenarios. Let me explain:

1. Create PO with price 100 and do MIRO (change amount to 103 in MIRO line item), GR Non-Valuated tick, No goods receipt.

=> There will be no price difference.

System will post accounting entry as below:

KBS - G/L account Debit (used in purchase order) 103.

KBS - Vendor Account credit 103 .

2. Create PO with price 100 and do MIRO (change amount to 103 in MIRO line item), GR Non-Valuated untick, No goods receipt.

=> There will be no price difference.

System will post accounting entry as below:

WRX - GR/IR clearing account debit 103.

KBS - Vendor Account credit 103 .

3. Create PO with price 100, post goods receipt (value 100) and do MIRO (change amount to 103 in MIRO line item or change PO price to 103), GR Non-Valuated tick.

=> There will be no price difference.

System will post accounting entry as below:

KBS- G/L account Debit (used in purchase order) 103.

KBS - Vendor Account credit 103.

4. Create PO with price 100, post goods receipt (value 100) and do MIRO (change amount to 103 in MIRO line item or change PO price to 103), GR Non-Valuated untick.

WRX - GR/IR clearing account debit 100.

KBS - G/L account Debit (used in purchase order) 3.

KBS - Vendor Account credit 103.

System doesn't need transaction key PRD at all for these above 4 scenarios.

You should test the same in your SAP system. If you have different scenario, then please explain your scenario.

[former_member253084]

Hi Dibyendu Patra,

We have tried your's suggested scenario.

It is not working as per our requirement .

Below is the scenario

PO created 999 USD$

Invoice Receipt is 1002$

ME22N Screen Shot.

MIRO Screen Shot with 3$ difference

Kindly revert if any additional settings are to be done.

Regards,

Bhaskar Reddy.S

[former_member183424]

Did you ever try to post the invoice document ?

You can't post this document as it is incomplete. The mismatched amount will go to small price difference account (transaction event key DIF). If you haven't configured that, then you can't post this invoice document.

[former_member253084]

Hi Dibyendu Patra,

We have already having those settings in OBYC Transaction Type : DIF

Still it is not working Kindly advise.

Regards,

Bhaskar Reddy.S

[former_member183424]

Honestly this would not be correct way. here you should change the amount for MIRO line item as per scenario 1 (in my initial comment).

Actually transaction key DIF is used for minor difference (not price difference).

You have some error in your invoice. That may causes this behavior.

[PollyGan]

Hi,

You need to change the item amount in invoice to 1002 as well. The difference 3 will be allocate to the consumption account.

GR debit 999 GL account in account assignment tab

       credit 999 GR/IR clearing account

IR credit 1002 account payable to vendor 

     credit 999  GR/IR clearing account 

     debit    3  GL account in account assignment tab

Best regards,
Polly

[tomas_talpa]

When you use PO with Account Assignment, the PRD transaction (from OBYC) is not used at all; all price differences simply follow the costs, being posted to AccAsgnmt from PO.

TomT

EDIT: btw, what's wrong with you font?