GR IR Clearing Process in SAP

Efficient management of the GR IR account is crucial for maintaining accurate financial records in SAP. This blog will walk you through the key aspects of the GR IR Clearing Process, common challenges, and how to streamline the process using advanced tools.

Background

The GR IR account is an intermediary clearing account in SAP for goods and invoices in transit. It is commonly referred to as the GRIR (Goods Receipt Invoice Receipt) or GRNI (Goods Received Not Invoiced) account. Both of which mean the same thing. This account represents the value of goods received that are awaiting an invoice or the value of goods invoiced that are awaiting a goods receipt. It is a balance sheet account and is shown as either an asset or, more commonly, a liability—representing the value of goods receipts awaiting an invoice.

The account also has implications on the Profit and Loss (P&L) accounts, as when goods are received, their value is charged to either inventory or cost accounts. If these goods receipts are not matched with invoices, the amount charged to the P&L is higher than it should be, reflecting lower profitability. Regularly performing the GR IR Clearing Process in SAP ensures that the accounts accurately reflect the correct values.

Common process

Accounts Payable is often under pressure from budget holders to clear the GR IR account at the end of the month or quarter. The process typically involves downloading the GR IR account to a spreadsheet and applying formulas to identify which goods receipts can be cleared. A single clearing document is then created, releasing the value of the goods receipts back to profit.

However, the potential pitfall of having a single clearing document for multiple goods receipts arises if an invoice arrives in the next period that relates to one of those goods receipts. In this scenario, the clearing document must be entirely reversed to make a single goods receipt available for posting the invoice against. The clearing process is then repeated to reverse the rest of the goods receipts, and the cycle continues if another invoice arrives in the period that relates to one of the other goods receipts in the clearing document.

The fundamental issue with this process is the creation of a single clearing document containing multiple goods receipts. However, manually creating individual clearing documents for each goods receipt reversal would take even more time. The next section explains how we overcome this issue.

Process using Basware’s Statement Matching & Winshuttle

How to ensure the GR IR values are correct

1. Get suppliers to send a statement of their outstanding account.
2. Reconcile the supplier statement ensuring all the invoices/credits have been received and are on your SAP system.
3. Run the GR IR report for the supplier and clear all the items dated prior to the invoice dates on the statement.
   
   

GR IR clearing process in SAP using Statement Matching & Winshuttle

1. Supplier statement is uploaded to the Statement Matching solution and matched to invoice data.
2. GR IR report for the supplier is extracted to Excel from SAP.
3. The Excel GR IR report is uploaded via Winshuttle using MR11 transaction to clear GR IR items requiring clearing.

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