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Impact of MR11 Execution

Author: Ranjit Simon John

I started researching on GR/IR & MR11 after we came across a business scenario. Let me explain the business scenario that we came across.

Against a Purchase Order created in 2010 Goods receipt was made in 2011 and Invoice received in 2012. As a best practice we have cleared all GR/IR balance for the year 2011 during year end through MR11. By March 2012 the vendor has sent the invoice.  Since the entry was cleared from GR/IR, we were not sure on how to make the payment to the vendor.

After detailed study research I could get more understanding on GR/IR and MR11 which I thought I will share .

Whenever a goods receipt is done GR/IR account is hit, and if the process runs smoothly i.e. Goods receipt  = Invoice Receipt, GR/IR gets cleared automatically.

But entries will be left out in GR/IR if (Practical Scenarios we came across);

1) Invoice  received is Greater than Goods Received (More number of Goods Invoiced).

2) Invoice  received is Greater than Goods Received (GR =I R goods receipt, Invoice  contains Freight Charges, transportation charges and any other charges)

3) Goods Received is Greater than Invoice Received.

4) Invoice Received and Goods not received

5) Goods Received, Invoice Received but invoice cleared not against the PO

6) Goods Received, Invoice Not Received

Now let us try to analyze the impact of MR11 in all the scenarios;

Scenario 1: Goods Received is Less than Invoice Received (More number of Goods Invoiced)

Purchase Order Quantity = 15 No’s

GL Entries during Goods Receipt = 10 No’s

Debit

Credit

Stock of Material

10

GR / IR

10

  After Invoice receipt Quantity = 15 No’s

Debit

Credit

GR / IR

15

Vendor Account

15

Assuming if the remaining 5 No’s will be received latter

Debit

Credit

Stock of Material

5

GR / IR

5

In our example we imagine that extra Quantity 5 No’s is not delivered. So in order to clear GR/IR we have to run MR11.

After executing MR11

Debit

Credit

Stock of Material

5

GR / IR

5

In this case the MAP of the material will be;

Inventory details Before Goods Receipt

Material

Quantity

Amount

MAP

material X

10

100

10

  After Goods receipt

Material

Quantity

Amount

MAP

material X

20 (10 + 10)

200 (100 + 100)

10

After Executing MR11

Material

Quantity

Amount

MAP

material X

25 (10 + 10 + 5)

300 (100 + 100 + 50)

10

Note: No Change in MAP of the material

Scenario 2: Invoice  received is Greater than Goods Received (GR =I R goods receipt, Invoice  contains Freight Charges, transportation charges and any other charges)

Purchase Order Quantity = 15 No’s +Freight Charge + Air Charge

GL Entries during Goods Receipt = 15 No’s +Freight Charge + Air Charge

Debit

Credit

Stock of Material

25

Material GR / IR

15

Freight GR / IR

7

Air Faire GR / IR

3

After Invoice receipt Quantity 15 No’s

Debit

Credit

Material GR / IR

15

Vendor Account

15

After MR11 Execution

Debit

Credit

Freight GR / IR

7

Stock of Material

7

Air Faire GR / IR

3

Stock of Material

3

In this case the MAP of the material will be;

Inventory details Before Goods Receipt

Material

Quantity

Amount

MAP

material X

10

100

10

After Goods Receipt

Material

Quantity

Amount

MAP

material X

25 (10 + 15)

350 (100 + 150 + 70 + 30)

14

After Executing MR11

Material

Quantity

Amount

MAP

material X

25 (10 + 15)

150 (100 + 150 – 70 – 30)

6

Scenario 3: Goods Received is Greater than Invoice Received

Purchase Order Quantity = 15 No’s

GL Entries during Goods Receipt = 15 No’s

Debit

Credit

Stock of Material

15

GR / IR

15

After Invoice receipt Quantity = 10 No’s

Debit

Credit

GR / IR

10

Vendor Account

10

Assuming if the remaining 5 No’s Invoice will be received latter

Debit

Credit

GR / IR

5

Vendor Account

5

In our example we imagine that extra Quantity 5 No’s Invoice is not received. So in order to clear GR/IR we have to run MR11.

After executing MR11

Debit

Credit

GR / IR

5

Stock of Material

5

In this case the MAP of the material will be;

Inventory details Before Goods Receipt

Material

Quantity

Amount

MAP

material X

10

100

10

After Goods receipt

Material

Quantity

Amount

MAP

material X

25 (10 + 15)

250 (100 + 150)

10

After Executing MR11 (Only Value of the material will be hit, quantity remains same)

Material

Quantity

Amount

MAP

material X

25 (10 + 10 + 5)

200 (100 + 150 – 50)

8

Scenario 4: Goods Received, Invoice Received but invoice cleared not against the Scenario 5: PO Goods Received, Invoice not Received

Purchase Order Quantity = 15 No’s

GL Entries during Goods Receipt = 15 No’s

Debit

Credit

Stock of Material

15

GR / IR

15

After executing MR11

Debit

Credit

GR / IR

15

Stock of Material

15

In this case the MAP of the material will be hit;

Inventory details Before Goods Receipt

Material

Quantity

Amount

MAP

material X

10

100

10

After Goods receipt

Material

Quantity

Amount

MAP

material X

25 (10 + 15)

250 (100 + 150)

10

After Executing MR11 (Only Value of the material will be hit, quantity remains same)

Material

Quantity

Amount

MAP

material X

25 (10 + 15)

100 (100 + 150 – 150)

4

All the Scenario explained above is when the Material Stock is equal to the Quantity to be Cleared.

If material Stock is not equal to Quantity to be cleared the actual stock quantity is debited or credited proportionally. The remaining amount is posted to a price difference account.

Ideally MR11 should be executed once in a year or twice after getting clearance from MM team and the FI team.

Executing MR11 can either over estimate or under estimate the stock value.

More Details Can be found from:

http://help.sap.com/saphelp_46c/helpdata/en/a8/b99471452b11d189430000e829fbbd/content.htm

Also refer the following SAP Notes;

10757    -> FAQ: MR11, clear GR/IR clearing account
790426 ->  MR11: Functionality
710865 ->  MR11: Important information on account maintenance

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36 Comments

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  1. Atul Deshmukh

    Hi Ranjitth

    Doc is Nice however could you please check the 1st case  i think MAP will get chnage to 12.5 since the Invetory Value is getting loaded by 50 after executing MR11 so it will be 250/20,please correct If I am wrong.

    (0) 
  2. Avinash Goswami

    Hi Ranjitth ,

    I think you have written wrong explanation for scenario 1 – IV qty > GRqty

    MR11 cannot actually change qty received it simply removes GR/IR value and insert offsetting entry to INV / PRD account based on Qty coverage available

    So MAP is bound to change when u run MR11 as long as there is stock in system.

    regards

    Avinash

    (0) 
  3. Shobhit Kastuar

    Hi Ranjit,

    Very nice information given by you.

    But, for 1st scenario entry will be like below mentioned:

    After Executing MR11

    Material

    Quantity

    Amount

    MAP

    material X

    20 (10 + 10)

    250 (100 + 100 + 50)

    12.50

    (0) 
    1. Fatima Khan

      I really like your post I hope you will be able to help me. 

      Requirement:

      After running the f.13 there are still balance left in the
      GRIR account, because of need to maintain GRIR through MR11

      1. GR > IR ( need to resolve
        this issue) (in scope)
      2. IR > GR (not in scope)

      The Client is going to develop a Vendor aging report, those
      vendors who are aged out, The client then will know in which PO of a Vendor
      will not expect any more invoices against the GR’s, for that

      When the clerk will go in MR11 and will pick the target PO
      and will post them and it will clear the GRIR account. After clearing the PO
      the extra GR credit the Inventory account and create a KP account maintenance
      document, but client wants this extra GR which will not expect any more
      invoices should hit and credit a different GL account rather than the inventory. SO please let me know what to do.

      Because it  credits
      the inventory means, for example If they had 5 item after credit the extra GR
      (2 ) it will reduce the inventory account to 3 items, even though the physical
      inventory is still 5.

      Client is using Moving average price Instead of
      standard price

      (0) 
  4. Unnivel Raman

    Hi Ranjith,

    I was looking at the numbers ‘After executing MR11’ under Scenario 2, 3 and 4. It looks like the value your mentioned is incorrect. eg. in Scenario 2

    After Goods Receipt

    Material

    Quantity

    Amount

    MAP

    material X

    25 (10 + 15)

    350 (100 + 150 + 70 + 30)

    14

    After Executing MR11

    Material

    Quantity

    Amount

    MAP

    material X

    25 (10 + 15)

    150 (100 + 150 – 70 – 30)

    6

    Before passing MR11 the quantity was 25, amount was 350 and the MAP and MAP was 14. But after executing MR11 the amount should be 250. i.e. (350 – 70 – 30) and the MAP will be 10.

    The situation is similar under Scenario 3 and 4.

    Otherwise, you did a wonderful job.

    Regards,

    Unnivelan

    (0) 
  5. Natasha Simadri

    Hi Ranjit, thank you for the useful information. It has helped me alot. I train GRIR at respective stores but wasn’t clear about MR11. Its a big no by trainers who don’t fully understand the impact is not letting users use MR11 but playing around the IR to assume the extra qty recipted. Can I please ask if your article has been updated as per the comments regarding calculations for MAP? Thanks

    (0) 

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