Change in PO Price after goods receipts and goods issue

[Former Member]

Dear All,

Happy Holidays!! Wishing you a happy and fun-filled holiday season.

I would appreciate your input of the issue at hand. I support MM users in and Oil & Gas downstream company.

Issue

Purchase Orders are created using price estimates. The price of oil products fluctuates and we usually cannot get the exact price at the point of creation of the PO.

We use Moving Average Price (MAP) for stock valuation and so the price & quantity in the PO affects the moving average price.

We use price estimates to create the PO but when we receive the final price for the oil products from the Supplier, most times there is a significant difference between the estimated price and the final price. Usually, at this point, we have completed all goods receipts and goods issues against the PO and are unable to make changes.

We have an issue posting the invoice because the invoice value is significantly higher than the PO value. We also have an issue with the moving average price because it is understated as a result of this.

To reiterate, this is a summary of the issue:

At the point if PO creation ; Quantity = 10, 000 MT Price = $650

Later when final price is available; Quantity = 10, 000 MT Price = $715

Any advise on how to treat this issue, please? Your assistance will be truly appreciated.

Thanks

[Former Member · Accepted solution]

If i understood your issue correctly

PO price is $100 per MT for example

Then you do GR from same value ( At the time of GR your PO value is $100)

Then Invoice comes of $120

STD SAP has one transaction to tackle such kind of issues

Transaction is MRNB

Preconditions of these is you have to activate revaluation indicator in Vendor master, and update your puirchase order with correct price. but the advantage is you first do GR with old PO value .

What this transaction did is it gives retrospective effect to received deliveries hence corrects your inventory valuation.

this transaction has specific limitations that you can not select single GR etc, but once you give try for this transaction.

this will solve your correct inventory valuation issue.

[Former Member]

Hi All

For my client I have to map the similar requirement for material price which is subject to more than 15% fluctuation. The actual invoice price is having quite a huge difference.

Below are my limitations within which need to give a solution.

PO is subject to release strategy and Material is delivered over a longer duration of time. Hence there is problem to de-Release the PO everytime price is changed.

Since differnce is so huge, the same can not be settled during the MIRO.

Down Payments has to be posted hence PO has to be created with estimated base price.

Please suggest me suitable alternative options which will require no changes in PO and the price change also can be accomodated during the MIRO for Multiple goods receipts.

[Former Member]

Hi All

For my client I have to map the similar requirement for material price which is subject to more than 15% fluctuation. The actual invoice price is having quite a huge difference.

Below are my limitations within which need to give a solution.

PO is subject to release strategy and Material is delivered over a longer duration of time. Hence there is problem to de-Release the PO everytime price is changed.

Since differnce is so huge, the same can not be settled during the MIRO.

Down Payments has to be posted hence PO has to be created with estimated base price.

Please suggest me suitable alternative options which will require no changes in PO and the price change also can be accomodated during the MIRO for Multiple goods receipts.

[Former Member]

Thank you both for your response.

I will try out your suggestion in test environment and revert.

Thanks again and have a great day!

[JL23]

when do you know the correct price? weeks after the receipt and issues, when the invoice arrives?

Or can you already know the price before you post the GR.

I would ask the vendor to send order acknowledgements with the correct price and maintain this in the PO before the GR can be posted. this can be controlled with a confirmation control key.

Alternative you can write on/off value with MR22 transaction.