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setps for invoice reductions

hi sapgurus,

can any body tell the steps for invoice reduction with an example and plz i dont want any theorital expression and let try to explain to me with an perfect example.

thanking you

Former Member


Let the PO be 100 pcs, material A for $ 10 /pc...

Now if the GR is for 70 pcs..and if the invoice is made for all 100 pcs at $12/pc...and tax 10%=120$

Then as invoice is done at the higher to balance the price here we go for the invoice reduction by creating the credit memo...


While GR -

Invoice -

Credit memo

Stock account -


GR/IR - -

700- -


Vendor -- -

1320- -


Input tax -

120+ -


Clearing acc for

invoice reduction-- 200+(Under invoice) -

200-(Posting for credit memo)

When you reduce invoices, the system creates an invoice and a credit memo simultaneously. When you accept the quantity variance, $1000 is posted to the GR/IR clearing account in the invoice (the system expects a further goods receipt of 30 pieces). The difference of $200 to the invoiced amount is posted to a clearing account for vendor invoice reduction.

The posting to the clearing account for vendor invoice reduction is cleared in the credit memo that is created. The offsetting entry is posted to the vendor account.

The tax posting in the invoice is based on the item amount entered. The credit memo corrects the tax posting.

Together, the invoice and the credit memo create the liability that results on the basis of the changed proposed data.

Hope it helps....



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