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Vendor Retention process

Dec 22, 2016 at 10:48 PM

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Hi all,

I'm struggling to get the vendor retention process work they way our business wants. I've been exploring forums since days now, didn't find anything specific to my problem and hoping I can get some pointers here.

I'm configuring vendor retentions process for which I've activated the function LOG_MMFI_P2P and then did all necessary config for retention as well. The problem is that the system applies taxes on the PO amount first and then deducts the retention from the amount including taxes (this retention amount of course includes some tax portion as well). The business wants retention amount to be applied first and then calculate tax on the remaining amount (since the tax authorities won't accept input tax claim on the retention portion as it is withheld and paid to the vendor years after the deduction). I've been searching for the solution and some people have suggested using BADI MRM_RETENTIONS to modify the calculation. I have the ABAP help available and just need to understand exactly how to use this BADi.

I'm wondering if I can get any help on using BADi MRM_RETENTIONS.

Thanks for all your help and looking forward for your guidance!

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Wondering if anyone can help!

Thanks

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4 Answers

Best Answer
Jürgen L
Dec 31, 2016 at 08:19 PM
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Isn't it just customizing how the system deals with tax in a retention?

See you IMG > MM > Logistics Invoice Verification > Incoming Invoice > Retention > Define Tax Handling for Retention

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Moazzam Mubarak Dec 22, 2016 at 10:58 PM
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Example: If PO Amount is 6,000, Tax Rate is 5% and Retention is 10%;

Existing

PO Value 6,000

Add: 5% tax 300

Sub-Total 6,300

Retention 10% (630)

Net 5,670

Required

PO Value 6,000

Less: 10% Ret (600)

Sub-Total 5,400

5% Tax

Net 5,670

the system first calculates 6,000 * 1.05 = 6,300 then 10% Retention Deduction = 630

The requirement is first deduct 6,000 * 10% = which means 6,000 less Retention 600 = 5,400, then apply 5% tax on 5,400 which is 270

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Moazzam Mubarak Dec 22, 2016 at 10:58 PM
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Example: If PO Amount is 6,000, Tax Rate is 5% and Retention is 10%;

Existing

PO Value 6,000

Add: 5% tax 300

Sub-Total 6,300

Retention 10% (630)

Net 5,670

Required

PO Value 6,000

Less: 10% Ret (600)

Sub-Total 5,400

5% Tax 270

Net 5,670

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Moazzam Mubarak Jan 27, 2017 at 04:02 PM
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Thanks for pointing out Jurgen,

Yes it was supposed to do that but somehow it wasn't working. I've defaulted the net calculation flag in MIRO layout which served the purpose.

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