Provisioning Process in SAP ?

[sohamd18]

Hello, I am an audit intern and wanted to understand the process of "Provisions for expenses".

Currently my understanding is that Expenses for which service have been received but invoice has not been received yet, provisions shall be created. So firstly is this understanding right ?

Also, I wanted to know when is MIGO passed through ML81N (SES) - when we receive the services or when invoice is received as the company I am auditing passes MIGO and MIRO on same date in some cases so what is the point of having Clearing accounts.

I would really appreciate detailed explanation for the process if possible as I feel there are lot of flaws in my understanding of processes as I have taken information from internet in a scattered way.

Thanks

[robin_mcrae2 · Accepted solution]

Hi,

Your understanding is correct. SAP will accrue automatically for any goods received for which the invoice has not been processed. When a goods receipt is posted, the cost object and element from the purchasing document are debited along with the GR/IR account being credited. You're basically settin the money aside for the invoice processing.

The GR/IR account plays an important role in the 3 way match. PR, GR and IR. (invoice receipt) An example, when the invoice receipt takes place before the goods receipt.

Clearing takes place, either manually or automatically. This is where tolerances come into play for price variances. Quick answer, but I hope this helps a bit.

[sohamd18 · Accepted solution]

Thanks a lot