In this document I’m going to explain about Gross Invoice Posting (RE) V/S Net Invoice Posting (RN) in detail.
Gross Invoice Posting:
In Gross invoice posting system will ignore the cash discount at the time of invoice posting and posts the cash discount at the time of payment.
Net Invoice Posting:
In Net invoice system will consider the cash discount at the time of invoice posting and post the cash discount amount in to cash discount in to cash discount G/L account at the time of payment.
Before going in to detail about this topic first we have to understand Cash discounts
What is Cash Discount?
Cash Discount is a discount given on total amount of invoice posted, in those cases when payment is made within a stipulated period.
This cash discount is determined by payment terms entered in the purchase order for example.
Configuration path to define Payment terms:
SPRO —> Materials Management–> Purchasing–> Vendor Master–> Define terms of payment.
As shown below you will enter the cash discount granted in percentage if you make payment within specified days from baseline date selected.
In SAP LIV this gross invoice posting and net invoice posting is controlled by the definition of invoice document type as shown below.
Transaction code OBF4
RE – Gross Invoice Posting
RN – Net Invoice Posting
Gross Invoice Doc.type: RE
Example1: Gross Invoice Posting
carry out goods receipt w.r.t Purchase order in transaction code MIGO.
Observe the baseline date filled as per the setting in terms of payment.
The below is simulation screen in invoice posting and observe only vendor account and GR/IR clearing account as cash discount is not considered in gross invoice posting
Below is the accounting document and postings at LIV.
Gross invoice doc. type, system ignores cash discount at the time of Invoice posting.
Gross Invoice Settlement or outgoing payment to vendor
Transaction code F-53
Observe the cash discount is 3% applied as per the terms of payment from payment base line date.
Gross invoice doc. type, system posts cash discount at the time of payment.
Below is the posting and accounting document generated at the time of payment.
Example2: Net Invoice Posting
Definition of Net Invoice Doc. Type: RN
Create a PO via., ME21N as shown below by entering payment terms in header invoice tab of PO. tax code is mandatory to work with payment terms.
carryout Goods receipt w.r.t. Purchase order for Net invoice posting.
do Invoice posting w.r.t. Purchase order.
in detail tab of MIRO select document type ‘Net Invoice Doc. Type: RN’
In Net invoice doc. type system will post the cash discount at the time of Invoice posting itself.
Note: if the material is Moving average price (V) controlled then the discount amount is credited from stock account if sufficient stock exists for that material and debited to discount clearing account.
If the material is standard price (S) controlled then the discount is credited to gain from price difference account and debited to discount clearing account.
account postings are as shown below
Net Invoice Settlement or outgoing payment to vendor
Transaction code F-53
if the payment is made later period than invoice posting then the discount actually applicable on payment date will be considered and the discount amount reduced is debited to ‘discount loss account’ and total discount amount is credited to cash discount clearing account as shown below.
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