GR IR Clearing Account in SAP is an intermediary clearing account for goods and invoices in transit. It represents Goods Receipt and Invoice Receipt Account. It’s a balance sheet account for which balance is not zero at the end of the period. This may happen because of following reasons;
- Goods received but not yet invoiced
- Invoices of goods which have not yet been received.
If the GR IR clearing account’s balance is not zero in SAP then that balance need to be either shown as an asset or liability in balance sheet for the period end closing. In OBYC we do customization to create accounting documents for goods received in store.
Entries Related to GR IR Clearing in SAP
When goods received in Store following entry has been passed from MM module to Financial module of sap;
Inventory Account Dr.
To Goods delivered but not invoiced Clearing Account
At the time of receiving Vendor invoice;
Goods delivered but not invoiced Clearing A/c Dr.
To Inventory A/c
Suppose vendor has sent invoice only for the part of the goods and not for the entire amount then in that case the amount that has already been credited to GR/IR Clearing Account has not yet been completely reversed.
Before preparing balance sheet of an organization, we have to take that particular amount from Goods delivered but not invoiced Clearing account to a particular a/c for disclosure purpose. Two additional a/cs are created for this purpose.
- Goods delivered but not invoiced clearing Adjustment A/c
- Goods delivered but not invoiced A/c
In the first step GR IR Clearing adjustment account is debited in SAP for the differential amount and the “Goods delivered but not yet invoiced account” is credited for the same amount. In the second step after preparing the balance sheet the above entry get reversed to nullify the transaction.
Where goods received but invoice not received, system passes the following entry;
GR/IR Clearing Adjustment Account Dr
To Goods Received Not Invoiced Account
Where the invoices have been received but goods not received, system passes the following entry;
Goods Invoiced Not Received Account Dr
To GR/IR Clearing Adjustment Account
Analyze the the Clearing account and carry out adjustments in SAP:
Periodic Processing> Closing> Regroup> Clear goods/invoice received
If the a/c has a credit balance, goods have been received but not invoiced; if the a/c has a debit balance, goods have been invoiced but not yet received. Based on that program places necessary adjustment posting. These entries are then reversed on the day as mentioned on the program run.
Define Adjustment A/c for GR/IR Clearing Account in SAP
GR IR clearing account can be created by using following path or Tcode.
IMG> Financial Accounting New> General ledger Accounting New> Periodic Processing> Reclassify> Define Adjustment Account for GR IR Clearing
T Code: OBYP
Note: Program “RFWERE00” is used to analyze GR IR Clearing A/c (goods receipts and invoice received clearing a/cs) and generates adjustment posting to classify business transactions correctly for balance sheet presentation.
Step 1: Goods Received
We have posted $ 2000 for goods received to the inventory account. System automatically posts the transaction to the GR IR clearing account.
Inventory A/c Dr $2000
To Goods delivered but not invoiced Clearing A/c or GR IR Clearing Account $2000
Step 2: Invoice Received
Invoice received for $ 1500 towards part of the goods delivered. In this step the above credit entry of GR IR A/c is debited and vendor a/c credited to nullify the Account but in our case we have a balance of $500 which has not been cleared so balance will be in this a/c unless and until we transfer it or clear it.
Goods delivered but not invoiced Clearing A/c or GR IR clearing Account Dr $1500
To Vendor A/c $1500
Step 3: Clearing of GR/IR Account
On the date of running clearing program, system transfer posting to the extent of goods “delivered but not yet invoiced” to the GR IR Adjustment A/c by debiting GR IR Clearing adjustment a/c. The offsetting entry is posted to the a/c used for presenting goods delivered but not invoiced (target account) and the balance in GR IR Clearing account and Adjustment a/c is set to zero in balance sheet as both a/cs are balance sheet items.
GR IR Clearing Adjustment A/c Dr $500
To Goods received but not yet invoiced A/c $500
Step 4: Reverse the transfer entry of gr ir clearing adjustment a/c
As mentioned in the clearing program system reverses the step 3 entry and the above process gets corrected.
Goods received but not yet invoiced A/c Dr $500
To GR IR Clearing Adjustment A/c $500
Download the Goods delivered but not invoiced clearing account in to a excel sheet then separate the items to debit and credit. Find out those items which are not cleared and reason of not clearing. Ask the concern person for the details of the balance amount in Goods delivered but not invoiced clearing account.
Goods delivered but not invoiced Clearing A/c is used only in SAP Financial Module to manage three way match of a purchase order. Its a bookkeeping device to manage the timing difference of arrival of goods before the invoice is generated or when the invoice arrive before the delivery of goods. GR IR clearing Account in SAP is used as a buffer between the inventory and vendor a/c. It should be cleared at regular interval to have a clarity on your accounts.
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