Explain ‘Invoice Verification’ (IV) in SAP

‘Invoice Verification’ involves:

1.      Validating the accuracy of the invoices (quantity, value, etc.).

2.      Checking for ‘blocked’ invoices (which vary to a great extent from that of the PO).

3.      Matching of invoices received from vendors with that of the Purchase Order/ Goods Receipt. At this point in time, the PO History is updated for the corresponding PO Line Item(s) of the matched invoice.

4.      Passing of matched invoices to the FI module. The system posts the following entries:

o        Debit: GR/IR Clearing Account

o        Credit: Vendor a/c (Accounts Payable open line item)

o        Credit: GL Reconciliation Account

The different scenarios in invoice verification include:

4.                  GR-based Invoice Verification indicator is not set in the PO detail screen: Although this setting enables you to post the invoice referenced to a PO prior to making a GR, the system will block the invoice for payment (this kind of posting results in a Quantity Variance as there has not been a GR).

5.                  GR-based Invoice Verification indicator is set in the PO detail screen: When the PO number is referenced the system brings up all the unmatched items of GR in the selection screen. You will not be able to post the invoice for its full value, unless the PO has been fully received.