The target audience for this blog include; SAP Finance & Accounts Payable Super-users and implementation partners.
What to expect from this blog:
The purpose of this blog is to describe the conditions that lead to an M8783 “Negative MAC” error and how it might be overcome. An understanding of the principles behind Moving Average Cost is necessary to make sense of this situation.
TLDR You can use the GL Posting feature of MIRO (and BAPI invoice post) to “force” any price difference between GR and IR to an account of your choice and avoid the M8783 error.
The error is documented in SAP Note 66754 first published in 1997
66754 - Negative moving price prevents posting
https://launchpad.support.sap.com/#/notes/66754
A document cannot be posted since the user receives the error message M8783 "Moving average price for material & & & is negative". It concerns a material which is valuated with the moving average price. The system makes no automatic posting to a price difference account.
753286 - Moving average price becomes very low
https://launchpad.support.sap.com/#/notes/753286
You post invoice documents with the online transactions of the Logistics Invoice Verification. When you update the Moving Average Price (MAP), for specific constellations this may result in the MAP continuously decreasing until it nearly reaches 0, or the system issues error message M8 783 "Moving average price for material is negative: ..."
In layperson terms, the conditions that lead to this error include:
A product is valued with moving average price
Over time, the product is purchased and received on multiple orders
The price of the product is dropping with each PO (perhaps natural price decreases or user-error inputting PO price)
The quantity of goods on hand are being partial consumed by various business processes. And/or the moving average price is being manually corrected down via transaction MR22 Material price Debit/Credit.
Invoices are posted, at consistently lower values than the original PO price and subsequent goods receipt
As these invoices are posted, they need to clear out the original GR amount posted to the GRIR account, the difference between GR and IR is always posted back into moving average price (with 2 exceptions; zero stock and partial stock coverage) If these are of interest to you, refer to “How-To” note 3073585 - Procurement - Invoice Verification - Standard behaviors guide and How-to scenarios – section 2
https://launchpad.support.sap.com/#/notes/3073585
In this situation, the difference to be cleared from GRIR account exceeds the remaining value of inventory on hand and triggers the M8783 error – MAC cannot go negative.
I won’t go into a detailed discussion of the exact conditions under which this error occurs, you can read the notes referenced above for detailed information. Suffice to say that SAP has determined that a hard-error is the only appropriate response to this condition – which is problematic in a high-volume environment. The corrective steps described by SAP are time-consuming to carry out, require access to multiple transactions which may not be part of a finance back-office user’s security profile and may require the use of a firefighter ID to resolve.
The standard solution proposed by SAP is to arbitrarily increase the value of inventory on hand to allow the invoice to be posted – using transaction MR22.
Problems arise with this approach, customers find it to be in conflict with generally accepted accounting principles and time consuming, additionally it can be difficult to know exactly how much to increase the price. A user needs to look at the PO history to determine the quantity ordered/delivered and original price.
Secondly, it is possible for a multi-line invoice to have multiple M8783 errors however, the system will error out at the first instance and the user will not know of subsequent errors until they adjust the first material price. This can be frustrating and time-consuming for the user.
Third, the delay in processing invoices may lead to a situation where a supplier withholds future deliveries and leads to an out-of-stock situation and subsequent business impact.
Alternate solution to M8783 error
Most customers who encounter this situation expect that SAP standard functionality would be to post the invoice difference to a price difference account (modifier PRD) as is done in the cases of limited stock coverage or zero stock. SAP has stated that they do not have a valid basis to determine the variance amount to be posted and therefore do not treat it as a price difference posting.
There is a simple technique in standard MIRO to post a price variance manually to avoid the M8783 error. During invoice entry, accept the default value for invoice header amount and the default item price from the Purchase Order. To make the document balance, create a manual line item on the “GL Posting” tab of MIRO, the account can be your default purchase price variance account. This GL posting line will override the standard functionality which would try to apply the price variance to moving average cost.
You may need to configure MIRO for direct posting to G/L in the IMG, follow the path:
SPRO > Materials Management > Logistics Invoice Verification > Incoming Invoice > Activate Direct Posting to G/L Accounts and Material Accounts > Activate "Dir.posting to G/L acct = active" and save.
In transaction MIRO - It will show additional Tab as "GL Account" along with "Reference"
This solution can also be built into automatic processing via EDI/ALE. Please refer to the following note for sample code to determine the value of the GL posting:
2711960 - Procurement IV: Help to analyze and solve the error M8783
https://launchpad.support.sap.com/#/notes/2711960
Additionally, it is possible to populate the following fields on the GL posting via BTE1102, Function Module SAMPLE_PROCESS_00001120
PO number, Line, Article.
00001120 DOCUMENT POSTING: Field substitution header/items
- copy the Standard Function Module 'SAMPLE_PROCESS_00001120' to customer namespace
- append the parameter structure in SE1, BSEG_SUBST (the parameter only allows change of text fields such as ZUONR, SGTXT, XREF,...)
- add fields such as PO, PO Item, Quantity, Plant, Material Number to the append
- Use code in FM to copy fields from the GR/IR line into the G/L Line
Call to action
You should be able to test this out in almost any SAP system whether it is an ECC or S/4HANA system, assuming that GL postings have been allowed in configuration and you can identify a suitable expense account to post to.
If you have questions or comments, please message me here.
