Credit memo for non inventory item

Hi MM consulatnats,
My client need to know the best practices to handle teh credit memo for non inventory item ??
We have two options like FB65 in FI part where it wont update in PO history.
In MIRO also we can make credit memo w.r.to PO.
What they want to know is if FB65 is the correct way to do this to fully reverse the effect that the receipt and invoicing of the item had on the financial accounts.
What is the best pracise to adopt ??
Need your views
Thanks
A.Gururajan

Hi,
You can use MIRO for credit Memo with ref to PO.
This will update both PO history as well as your FI accounts/Vendor Balance.
Thanks & Regards,

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Credit note for non inventoriable item

Dear All,
I would like to return the goods that has been invoiced in the SBO system but it is a certain item that freely given to customer. Is it possible to do that ?
TIA
Message was edited by:
        Eduard Ginting

Hello,
I guess you should generate a Service type credit note. Do not copy the invoice
to the credit note. This will cause a reverse stock transaction and will close the invoice. To solve this problem, please perform the following steps:
   1. Go to AR/Sales in the command center.
   2. Click on "credit" note and select "service" on the top left of your window.
   3. Select the customer you want to issue a credit note for.
   4. In the column "description" type in the item invoice number.
   5. Select account code and price.
   6. Add credit note to the system by pressing the add button.
I've got those steps from SAP notes.
Rgds,

GRPO for Non-Inventory Items

Hi Mentors,
This is again the issue on doing a GRPO(Item Type) of a non-inventory item not creating a JE. Based on inventory perspective, there is nothing to update in the warehouse stock level. But from an accounting perspective, it should debit inventory expense account and credit "Goods Received not invoiced" account?
I'm not an accountant so I'm not sure if my reasoning/understanding on this is correct. Please do enlighten me on this.
We have a GRPO which does not have any JE tied to it, how will such a transaction be Invoiced? The "Copy to AP Invoice" or "Copy From GRPO" does not seem to work? The base document of the GRPOs are POs', and the POs' themselves don't have a tied JE.
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Sean

Hi Sean......
System is behaving properly as per its logic. Infact it does same in all the previous or upcoming versions.
If you have Item Type GRPO for Non Inventory Item it does not create any accounting but you can see the same during AP invoice.
GRPO for such type is only optional. For further clarification you can discuss this with your CA what he suggests. But i suggest you to raise AP invoice also for getting Account effect. Just see doing this in test DB you get your answer......
Regards,
Rahul

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Can anybody explain if GR/IR reconciliation can be done for non-inventory items in PO. For example, I've raised a PO for a service and received invoice before the service is delivered (little hypothetical, of course, but incase).
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durga.

Hi,
First of all , in case of Service ,Only SR/IR reconcilation can be done.....second ,if your service is not delivered then you can give advance against service PO.
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Formatted Search - Calculate GP Base Price for Non Inventory Items

Hi Experts,
On one of our customer's 8.8 PL 15 installation, requirement was to calculate GP for Non Inventory Items (on SO screen). Since SAP does not automatically calculates it we proposed and implemented following solution.
1. Have all Non Inventory Items to be costed at Standard cost so that you can manually enter the cost in the Item Master.
2. Write following formatted search on GP Base Price field so as to calculate the GP Base Price for the Non Inventory Items only. The formatted search must not make any changes to Inventory Items as we want system to calculate the GP automatically (just in case cost changes from SO to Delivery or Invoice).
DECLARE @II AS nVarchar(1)
DECLARE @COST AS Numeric(19,2)
SET @II = (SELECT OITM.InvntItem FROM OITM WHERE OITM.ItemCode = $[RDR1.ItemCode])
SET @COST = (SELECT (OITW.AVGPrice * $[RDR1.NumPerMsr]) FROM OITW WHERE OITW.ItemCode = $[RDR1.ItemCode] AND
OITW.WhsCode = $[RDR1.WhsCode])
IF (@II = 'N')
BEGIN
SELECT @COST
END
3. Formatted search achieves what was originally required however if a user overwrites the Item Code (Inventory Item) in the SO then above formatted search clears the GP Base Price field and sets the GP basis for the item as "Manual". By obverwrite means user first selected item A0001 on line 1 and then entered A0002 on same line i.e. Line 1.
My question here is what is wrong in the formatted search that is resulting in this behaviour.
Any questions please let me know.
Thanks in advance.
Regards
Devinder

Hi Gordon,
Thanks for taking out time to help me however Key requirement here is
Write formatted search on GP Base Price field so as to calculate the GP Base Price for the Non Inventory Items only.
Your query sets the base price for GP Base Price for Inventory Item to ZERO and Base Price By to Manual.
Note that my Formatted search has a problem only when an Inventory Item line is overwritten. I am not sure if this is a problem with SAP itself rather than my query.
Any other ideas please?
Regards
Devinder

How to correct journals for non inventory items

Hi All,
One of my client by mistake made a non-inventory item as an inventory item and used FIFO valuation.
Now he has created some 30 purchase invoices, goods receipt PO for it in the last month.
While doing month end they reconcillation they realized the inventory numbers are bloated and found this problem.
Now they have cancelled the old item defination and created a new one.
But the problem is how to correct the journal entries for the what has already been done.
Problem is that Cost of this item is wrong because it got created as a inventory item and was using FIFO.
Please suggest a fastest route to correct this problem.
Regards,
Divam

Hi Divam........
I guess Inventory revaluation is not possible in case of Non Inventory Item. You must take the goods return on GRN basis......
Regards,
Rahul

Debit Memo/ Credit Memo for incorrectly shipped items

I Understood this: Lets assume you have sold 100 PCs Of Material A ( DLX model), But Due to some human error you have shiped Materia A (VLX) model, which is having price greater than previous one.In that case you will raise Debit memo for that customer.
But what if the customer says that he doesn’t want to pay the difference?
1. does he have to return the product back for exchange of the originally inquired product?
2. is it the clients fault that we shipped the wrong product? and will take a hit for the loss?
q: what if the customer decides to exchange the product ? there will be an inward and outward deliveries created for the 2 products at the clients plant; and will this trigger creation of one credit memo (for returns, since exchange is technically a return) and one debit memo (corrected invoice)?? Or will it be a straight exchange?
Guru's please help me understand this, thanks

Seems to me, this was Hypothetical Question.
You created sales order,delivery,Billing for X material,
But during delivery you picked Y instead of X.
Normally to move the material from Factory to Gate--there will be different departments & no.of employees has been employed for this--But still there is a chance for manual mistake(very rare)
As i understood this question can be handled in two ways:(Client dependent)
1.Customer not accepted this Y goods:
we cannot do returns with parent sales order--because we dont have a transaction in SAP (with Y material)-So you need to run all sales transactions with Y material followed by returns.
2.Customer Accepted Y material:
So here your actual inventory shows the variations.
So you cancel the parent delivery(so this X will be back into your inventory---if proceeding document exists-need to be cancelled)Change the parent sales order with Y material(you can cancel the parent sales order,Can create new one--it depends on client)
Again here the issue comes with Value variations:
Always you can raise a credit/Debit memo to adjust the receivables.
Phanikumar

A/R Credit memo for the broken items!!!

Dear Expert,
When we received the return products from customers, sometimes they are broken and cannot return to inventory. Due to issue the A/R Credit memo will bring these broken items returning to the inventory which it is not truth. How could we solve this problem in SAP B1? Thanks in advance.

Hi,
Handling of Return of goods which are damaged needs to be decided based on the business process being followed.
Example : If the damaged goods are of some value and they could be sold off in market for some amount(gain), then you can being back into stock and then book the sale again (for the damaged) and then book the rest as a loss.
Another example can be : If the damaged goods are not to be sold , then you can book the loss directly and can leave the stock to be entered back into the warehouse.
Check which process you follow and based on that you can decide and ask the exact need which can be helped by experts in the forum.
Kind Regards,
Jitin
SAP Business One Forum Team

Need negative quantity non-inventory items on Credit Memo

Version: (2007A)
Description of requirements: (Please provide a detailed description)
Our customer issues many invoices with a negative quantity line item for a miscellaneous non-inventory item. These non-inventory items are used to reduce the amount of the invoice regarding miscellaneous credits to their customers. These are not discounts.
When the customer wants to credit these invoices, they canu2019t create a Credit Memo based on the invoice because SAP wonu2019t allow this if there are line items with negative amounts.
When they create a credit memo not based on an invoice, they arenu2019t allowed to enter a negative quantity for a line item as they are for an Invoice. They are forced to create a credit memo not based on an invoice the inventory item line items and an invoice or Journal Entry for the negative quantity line item to debit back the miscellaneous line amount.
As an example:
Invoice line item one for inventory item: qty one, price 100,line total $100.00
Invoice line item two non-inventory item misc credit: quanity -1, price 10, total -$10.00
Invoice Total $90.00
In Order to provide the correct credit amount, they have to create a Credit Memo not based on an invoice for line item one, qty one, price 100 u2013 value -100 and an invoice for the non-inventory item for qty one, price 10 - value 10.00.
This creates a net credit for the customer of 90.00
This looks ridiculous to their customers when they see these transactions on their statements, creates extra work for the users and there is no link between the three documents.
By using inventory items for these miscellaneous credits, they can assign a sales revenue of their choice. They have multiple sales accounts and the GL posting is determined by the item group for the item. By assigning the desired item group to these non-inventory items, they can control which sales account is updated on their marketing documents when using these non-inventory items.
If they were to use the Freight items, they would need a separate freight setup entry for combination of item group and miscellaneous credit. Because they have so many Item Groups and types of credits, they would need a great many separate Freight Charges to choose from.
All of the above pertains to all of our customers. This customer has a custom add-on and their marketing documents are all created from custom objects. They hit a button on the custom sales contract screen and an invoice is created. When they hit another button on the screen, the selected invoice is credited. They have legally binding contracts for fixed quantities to be shipped, so we decrease the quantity shipped when creating an invoice and decrease the quantity shipped when a credit memo is created. The contract is fulfilled when the exact quantity contracted for has been shipped. Because the credit memo fails, we canu2019t update the custom objectu2019s remaining to be shipped, rendering it inaccurate from that time forward. (reducing the quantity shipped is part of the Credit Memo creation process).Creating Credit Memos and Invoices from the interface fixes the inventory count, customer balance, etc., but we have no way of fixing the sales contractu2019s quantity shipped & remaining to be shipped or linking the contracts to the documents created from the interface.
Business needs: (Please describe the impact on your business, if the functionality is not realized)
Examples: (Please describe a typical example, how the functionality should work.)
Credit Memos should allow negative quantities and line total amounts for non-inventory items, the same way that A/R Invoices do, so that credit memos can be based on invoices that have negative quantity non-inventory line items.
Current Workaround: (Please describe the workarounds you are using at the moment)
Please see above
Proposed solution: (Please suggest how the new functionality should work)
Credit Memos should allow negative quantities and line total amounts for non-inventory items, the same way that A/R Invoices do.

Hi Sean......
System is behaving properly as per its logic. Infact it does same in all the previous or upcoming versions.
If you have Item Type GRPO for Non Inventory Item it does not create any accounting but you can see the same during AP invoice.
GRPO for such type is only optional. For further clarification you can discuss this with your CA what he suggests. But i suggest you to raise AP invoice also for getting Account effect. Just see doing this in test DB you get your answer......
Regards,
Rahul

Credit Memo for Service items that are returned

Hey Friends,
I'm trying to create credit memo for a service item that is returned. I sold one laptop with one year extended warranty and now I want to RMA both the laptop and extended warranty.
What are the setups to create credit memo - when I do the RMA, it's only has one line because the extended warranty is non-returnable. I ran Main Billing program but nothing happened. After running autoinvoice, I was able to see the credit memo only for the laptop and not the service item. Ideally they should be in the same credit memo and not separate.
Help.
Thanks a lottttttttt.

Any ideas gurus?

Freight on credit memo for returns PO

We are trying to achieve the below solution for a returns PO, created 2 condition types, assigned to the pricing procedure to achieve the GR posting. When we use MRRL to create a credit memo for both the material and the freight. the system creates a credit memo for the material and an invoice for the freight. Can someone tell me, what drives the credit memo generation for both freight and material
GR
Cr INV
Dr GRIR
Dr Freight clrg
Cr Freight
Credit Memo/ERS settlement/ MRRL
Dr Vendor
Cr GRIR
Cr Freight Clrg
We were able to create the GR side of the entry, using two other condition types on the PO.
Now when we do ERS settlement,
the system creates a credit memo for the INV line item and an invoice for the freight line item.
Both the freight and the material is charged to the PO vendor, we dont charge separate to the freight vendor at this point.
Any help will be appreciated.
Thanks

Ganesh,
Thx for the reply!!
We did that before as well, Even as we select it, it creates 2 documents
1. credit memo for the inventory to the vendor
2. invoice for the freight to the same vendor
I guess i am missing some config piece that makes the freight on the PO to be also a credit memo while doing the MRRL
i am using 2 condition types FRA1 and a ZFR1 (mimicking FRA1 with a negative sign)
i have assigned 2 diff (ActKey/Accrual Key) combination to each one of them
FRE/FR1 and FRE/ZR1(Mimicking FR1) respectively.
I am not sure which config drives the freight as a credit memo on the MRRL side.

Purchasing - A/P Transaction Processing for Services and Non Inventory Item

On of the main areas of concern that businesses have is in the area of Purchasing, Goods Receipts and AP Invoices Processing - There is a requirement that businesses have widely referred to as 3-way matching.
While SAP Business One has this functionality covered quiet well via the following, there is still some need for enhancements so that the application can correctly reflect the AP Accruals:
- Purchase Order processing with Approval Process (if configured)
- Ability to perform Goods Receipts for Services.
- Matching of AP Invoices to Goods Receipts with AP Invoice Approval Process (if configured)
The above transactions serve the 3-way matching quiet well for all purchases however when it comes to accuring for Services that have been provided, the application does not do this. The Goods Receipt transaction processing to acknowledge the service delivery is allowed however the related posting to the allocation account is missing.
The process that is followed by the application is same for Items that have not Inventory Items in Item Master.
As a result of the above, the business have to manually work out what the Accurals for services provided but not invoiced should be.
With little enhancement to the product this shortfall could very easily be overcome.

Hi,
Once there are transactions, we cannot make existing Inventory type item to Non Inventory type item.
Check SAP note:937297 which states as follows :
Symptom
Changing the status of the Inventory Item checkbox (in Item Master Data) for items with inventory transactions and documents, might lead to inaccuracies in the calculations of inventory value.
Other terms
Inventory Item, Non-inventory Item, Item Master Data, Continuous Stock, Perpetual Inventory, Inventory Valuation, 2004, 2005, 2005 A SP01
Reason and Prerequisites
Consulting Note
Solution
The status of an item (Inventory Item/Non-Inventory item as selected in the Inventory Item checkbox in the Item Master Data window), cannot be changed once an A/P, A/R, or Inventory document is posted for the item.
Regards,
Jitin Chawla

Picking non inventory items for delivery

hello
Can anyone help us with the following issue :
- in our deliveries we have both inventory items and non inventory items (freight lines, software). Non inventory items have to appear in the same delivery document as the inventory items
- we cannot create those non-inventory items in inventory as they cannot appear in any stocktake
- the picklist doesn't accept to release non-inventory items for picking
Any idea ?
Fabrice

Hi Fabrice,
Just an idea. Will it work if you create the non-inventory items in your item master data as just a sales and purchasing item, but not an inventory item? That way you can include it along with your inventory items without having any impact in your stocks. One issue is that the non-inventory item will not be shown in your pick and pack, but you can print a copy of your sales order as a pick list.
Gavin

Journal Entry for non-stock Item while Good Receipt PO

In accordance to Accounting Rules, the EXPENSES of non-stock item purchase should be recognize
upon Good Receipt PO, journal entry should be created at the point time of GRN instead of invoice.
We would like to see this as part of the SBO standard accounting process as it is also important for
us to make sure the the software process is comply to the Standard Accounting Rules.
Thank you and Warmest regards,
Ong Siyu Kim
AFON PTE LTD
+65 6412 0686

Hi Martin,
I fully agree with this requirement. In Australia, the tax Office is asking us to recognise the expense in the profit and loss at the time of receiving products or services.
With SAP Business One, receipting inventory products through the GR PO will create a simpel journal entry:
Debit Stock
Credit Goods Receipt Not Invoiced
In the context of non inventory items, SAP Business One should do exactly the same:
Debit Expense account of the service item
Credit the Allocation Account (GRNI or other)
Currently, we have to create a big journal entry at the end of the month to recognise the expense of services that we have received but we have not received the invoice.
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A/r credit memo for tax only

Hello,
I need to do an a/r credit memo for sales tax only. Reason: customer was charged sales tax when he should have been exempt.
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Shelby

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Suda

Credit memo for non inventory item

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