SAP ERP - Logistics Materials Management

(SAP MM): Invoice Tolerance Keys - An

insight - Part 1
Posted by Raja Ramasamy Apr 18, 2014
In this blog I am going to share the invoice tolerance limits learning and understanding which would help to
understand invoice blocking techniques and provide a base to apply in real time situations depending on the
client's need.
This document will help consultant who is going to implement Open Text Vendor Invoice Management (VIM)
Introduction:
In the Procure to Pay(P2P) life cycle procurement part ends when Account Payable(AP) processor/
Invoice clerk posts the vendor invoice in SAP using MIRO transaction which is also called Logistics Invoice
Verification(LIV). It is tedious job for invoice clerk manually to verify each and every invoice line item is
conforming to agreed price or quantity in PO. SAP provides systemic way of verifying this kind of discrepancies
and block the invoice for payment using the 2 digit key called "Tolerance key".
Lower & upper tolerance limits for all possible discrepancies can be maintained in tolerance key. I would try to
explain all the invoice tolerance keys in this blog with possible examples.
There are 2 kinds of invoice matching in SAP which are controlled by tolerance keys.
3 way match:
Invoice line item is checked against corresponding purchase order and good receipt documents item for price &
quantity matching

2 way match:
Invoice is checked against only to PO price/qty if there is no goods receipt planned

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SAP ERP - Logistics Materials Management (SAP MM): Invoice Tolerance Keys - An insight - Part 1

Let us understand the how the automatic block is working via tolerance keys. In SAP we have many tolerance
keys, I am going to discuss only below keys in this part AN,AP,BD,BR,BW,DQ,DW.
Tolerance Limits:
1.
SAP tolerance limits work only for MIRO transaction
Invoice posted in FB60 is not subject to tolerance keys limit check
Tax amount is not included during tolerance check
It is stored in table T169G

Invoice blocking ways:

In SAP vendor invoice can be blocked for payment by anyone of the following way.
1. Automatic block:
Only if there is a discrepancy due to price or quantity or date variance in an invoice.
If the item amount is exceeded from the limit maintained in the tolerance key.
2.Manual block:
Invoice processor could manually block an invoice either at item level or header level
3.Blocking through payment term:
Invoice can be blocked always with a particular payment term even if there is no variance
4.Stochastic blocking:
Random blocking of invoices without any variance
5.Blocking at vendor master level:
Invoice can be blocked always for a particular vendor if specific blocking key is maintained at vendor master
level
Blocking indicators:
Blocking indicators are available both at header and item level of invoice document. System set this
indicator in the document wherever and whenever it is appropriate.
Header level:
Table: RBKP_BLOCKED
Field: MRM_ZLSPR
Possible values:
A

Automatically blocked due to existence of blocking

reasons

Stochastically blocked

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SAP ERP - Logistics Materials Management (SAP MM): Invoice Tolerance Keys - An insight - Part 1

Manual payment block set in header - no blocking

reasons

Automatically blocked due to entry via Web Invoice

Item level:
Table: RSEG
Fields:

Value = X

SPGRP

Blocking reason price

SPGRM

Blocking reason quantity

SPGRT

Blocking reason date

SPGRG

Blocking reason OPQ

SPGRV

Blocking reason Project

SPGRQ

Manual blocking reason

SPGRS

Blocking reason amount

SPGRC

Blocking reason: Quality

1.AN Amount for an item without order reference

Definition:
System checks every line item in an invoice with no order reference against the absolute upper
limit defined.
Without order reference means direct posting to G/L or Material.
System behavior:
If only the invoice line item is greater than absolute upper limit the invoice would be blocked.
Let us understand with below example.

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SAP ERP - Logistics Materials Management (SAP MM): Invoice Tolerance Keys - An insight - Part 1

It updates RBKP table without a header Block R. But updates table RBKP_BLOCKED with
payment block A.
No entries in RSEG table as it is directly posted to G/L or Material
Tolerance Key

RBKP

RBKP_BLOCKED

RSEG

Auto release

AN

No blocking
indicator
update(ZLSPR)

A-

No update
(item amount
block)

Not possible

Auto block

2.AP Amount for an item with order reference

Definition:
System checks every line item in an invoice with order reference against the absolute upper
limit defined.
Pre-requisite:
Item amount check must be activated at company code level OMRH
Item amount check must allowed for item category and GR indicator - OMRI
System behavior:
Let us understand with below example

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SAP ERP - Logistics Materials Management (SAP MM): Invoice Tolerance Keys - An insight - Part 1

No blocking indicator at header table RBKP but RBKP_BLOCKED table has blocking indicator A.
Blocking indicator RSEG- SPGRS (Blocking reason item amount) is set at item level.
Item amount block must be released manually. There is no automatic release possible even if we perform any
one of the following activities
Post subsequent credit
Adjust AP tolerance limit

Tolerance Key

RBKP

RBKP_BLOCKED

RSEG

Auto release

AP

No blocking
indicator
update(ZLSPR)

A-Auto block

RSEG- SPGRS = X
(item amount
block)

Not possible

3.BD Form small differences automatically

Definition:
The system checks the balance of the invoice against the absolute upper limit defined. If the
upper limit is not exceeded, the system automatically creates a posting line called Expense/
Income from Small Differences, making the balance zero and allowing the system to post the
document
System behavior:
Let us understand with below example
Small difference within tolerance limit:
As per the PO reference the invoice amount is 1000 USD.

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SAP ERP - Logistics Materials Management (SAP MM): Invoice Tolerance Keys - An insight - Part 1

But vendor actual invoice copy has amount of 1002 USD.

AP invoice processor enters the invoice amount as per the vendors invoice copy which is 2 USD
higher than PO price.

Since small difference is within the tolerance limit, invoice would be posted without block. Small difference
amount would be debited to small difference G/L account maintained for the transaction event key DIF in
OBYC.
Same rule is applied in the lower side as well
Small difference above the tolerance limit:
PO price: 1000 USD
Vendor invoice amount: 1003 USD
If the small difference above the tolerance limit then system would not allow to post the invoice
with hard error Balance is not zero. Still AP invoice processor could able to post invoice via
menu bar option Edit -> Accept and Post provided if he/she has authorization object M_RECH_AKZ
allowed.

If we post with above option then system would behave as below.

Invoice will be posted without block
Small difference G/L account (DIF) get posted
RBKP MAKZN (net amount accepted manually) field will get updated with small diff.
amount : 3.00

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SAP ERP - Logistics Materials Management (SAP MM): Invoice Tolerance Keys - An insight - Part 1

Tolerance Key

Tolerance

RBKP

RBKP_BLOCKEDRSEG

Auto release

BD

Within range

No blocking
No update
indicator
update(ZLSPR)

No blocking
reason update

NA

BD

Above

No blocking
No update
indicator
update(ZLSPR)
MAKZN field
updated with
diff. amount

No blocking
reason update

NA

4.BR: Percentage OPUn variance (IR before GR)

Definition:
The system calculates the percentage variance using below formula and compares the variance with the upper
and lower percentage tolerance limits.

Pre-requisite to simulate this scenario:

1. No GR based IV

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SAP ERP - Logistics Materials Management (SAP MM): Invoice Tolerance Keys - An insight - Part 1

2. Variable order unit is activated at material level

3. Maintain tolerance key DW with Do not check active
Tolerance:

Material master:

CRT is maintained as order unit

EA is maintained as order price unit in info record 1 EA = 100 USD
PO Details:
PO has been created with CRT as Order unit and EA as Order price unit
Po quantity: 2 CRT = 24 EA

Invoice details:
Invoice is simulated before GR as below
Scenario 1:
Order unit quantity 2 CRT

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SAP ERP - Logistics Materials Management (SAP MM): Invoice Tolerance Keys - An insight - Part 1
Order price unit quantity 22 EA and amount 2200 USD
Observation: There is no warning message on the variance.
Let us use the above formula to find the variance percentage.

Difference is 100 91.6 = 8.9 % which is within the BR tolerance limit 10% maintained
Scenario 2:
Order unit quantity 2 CRT
Order price unit quantity 21 EA and amount 2100 USD

Observation: There is a warning message as below.

Let us use the above formula to find the variance percentage.

Difference is 100 87.5 = 12.5 % which is more than the BR tolerance lower limit 10%. Hence we
are seeing the above warning message which will block the invoice for payment.
Tolerance Key

RBKP

RBKP_BLOCKED

RSEG

Auto release

BR

No blocking
indicator
update(ZLSPR)

A- Auto block

RSEG- SPGRS = X
(item amount
block)

Not possible

5.BW: Percentage OPUn variance (GR before IR)

Definition:
The system calculates the percentage variance using below formula and compares the variance
with the upper and lower percentage tolerance limits.

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SAP ERP - Logistics Materials Management (SAP MM): Invoice Tolerance Keys - An insight - Part 1

Let us understand with same master data

PO Details:
PO quantity in order unit 2 CRT
Po quantity in order price unit 24 EA
GR Details:
GR quantity in order unit 2 CRT
GR quantity in order price unit 22 EA

IR Details:
Scenario 1:
IR quantity in order unit 2 CRT
IR quantity in order price unit 20 EA
Observation: There is no warning message on the variance.
Variance % = (20/2) / (22/2) *100
= 90.9%
Difference is 100 90.9 = 9.1 % which is within the BR tolerance limit 10% maintained
Scenario 2:
IR quantity in order unit 2 CRT
IR quantity in order price unit 19 EA
Observation: There is a warning message as below

Variance % = (19/2) / (22/2) *100

= 86.4%
Difference is 100 86.4 = 13.6 % which is more than the BR tolerance limit 10% and invoice
posted with payment block.

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SAP ERP - Logistics Materials Management (SAP MM): Invoice Tolerance Keys - An insight - Part 1

Tolerance Key

RBKP

RBKP_BLOCKED

RSEG

Auto release

BR

No blocking
indicator
update(ZLSPR)

A- Auto block

RSEG- SPGRS = X
(item amount
block)

Not possible

6.DQ: Exceed amount: quantity variance

This tolerance key has both absolute and percentage limits.
Definition:
If a goods receipt has been defined for an order item and a goods receipt has already been posted, the system
multiplies the net order price by (quantity invoiced - (total quantity delivered - total quantity invoiced)).
If no goods receipt has been defined, the system multiplies the net order price by (quantity invoiced - (quantity
ordered - total quantity invoiced)).
System behavior:
Absolute limits:
Let us see the system behavior if only absolute values are maintained and percentage limits are
marked as Do not check.
Upper limit: 100.00

Lower limit: 100.00

Test data :- (GR has been defined)

PO quantity = 100 EA
PO price
= 100 USD
GR quantity = 50 EA
a) System behavior when invoice quantity is 51
Variance = PO price x (quantity invoiced - (total quantity delivered - total quantity invoiced))
= 100 * (51 (50-0))
= 100 * (1)
= 100
Variance 100 is equal to upper limit 100 and there will not be any warning message.
b) System behavior when invoice quantity is 52
Variance = PO price x (quantity invoiced - (total quantity delivered - total quantity invoiced))
= 100 * (52 (50-0))
= 100 * (2)
= 200
Variance 200 is more than upper limit 100 and there will be a warning message as below.

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SAP ERP - Logistics Materials Management (SAP MM): Invoice Tolerance Keys - An insight - Part 1

When we post invoice with above variance it will get blocked for payment.
It updates tables as below
Tolerance Key

RBKP

RBKP_BLOCKED

RSEG

Auto release

DQ

No blocking
indicator update
(ZLSPR)

A- Auto block

RSEG- SPGRM = X Yes

(Quantity block )

Automatic release possible if the blocking reason RSEG- SPGRM is deleted when we post GRN for the
balance quantity or credit memo for the excess invoiced quantity.
Same rules apply on the lower side as well
Test data :- (GR has not been defined)
PO quantity = 100 EA
PO price
= 100 USD
GR not possible
a)System behavior when invoice quantity is 51
Variance = PO price x (quantity invoiced - (total quantity ordered - total quantity invoiced))
= 100 * (51 (50-0))
= 100 * (1)
= 100
Variance 100 is equal to upper limit 100 and there will not be any warning message.
b)System behavior when invoice quantity is 52
Variance = PO price x (quantity invoiced - (total quantity ordered - total quantity invoiced))
= 100 * (52 (50-0))
= 100 * (2)
= 200
Variance 200 is more than upper limit 100 and there will be a warning message as below. Invoice will be
blocked for payment and same tables will be updated as above.

Percentage limits:

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SAP ERP - Logistics Materials Management (SAP MM): Invoice Tolerance Keys - An insight - Part 1
We can also configure percentage limits for the quantity variance check. In this case, the system
calculates the percentage variance from the expected quantity, irrespective of the order price,
and compares the outcome with the percentage limits configured.
Let us see the system behavior with same example if only percentage limits are maintained and
absolute values are marked as Do not check.
Upper % limit: 10.00

Lower % limit: 10.00

Test data :- (GR has been defined)

PO quantity = 100 EA
PO price = 100 USD
GR quantity = 50 EA
a)System behavior when invoice quantity is 55
Variance = (quantity invoiced - total quantity delivered)/ (quantity expected)*100 %
= (55-50)/50 * 100 %
= (5/50)*100 %
= 10 %
Variance 10% is equal to upper limit 10 % and there will not be any warning message.
b)System behavior when invoice quantity is 56
Variance = (quantity invoiced - total quantity delivered)/ (quantity expected)*100 %
= (56-50)/50 * 100 %
= (6/50)*100 %
= 12 %
Variance 12% is more than upper limit 10% and there will be a warning message as below. Invoice will be
blocked for payment and same tables will be updated as above.

Both Variances active:

If both absolute & percentage variance are active the system would block which ever tolerance is first
breached.
Quantity check for Delivery cost:
The system also carries out a quantity variance check for planned delivery costs when we post only planned
delivery cost.
Tolerance key not maintained:
If the tolerance key DQ is not maintained for a company code when we perform the same transactions
discussed earlier, system considers this as zero tolerance and block the invoice for the payment for any
deviation.

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SAP ERP - Logistics Materials Management (SAP MM): Invoice Tolerance Keys - An insight - Part 1

7.DW: Quantity variance when GR quantity = zero

Definition:
If a goods receipt is defined for an order item but none has as yet been posted, the system multiplies the net
order price by (quantity invoiced + total quantity invoiced so far).
The system then compares the outcome with the absolute upper tolerance limit defined.
System behavior:
This tolerance key works only for PO based invoice verification because GR based invoice verification will not
allow IR without GR.
DW absolute upper limit as 100:
PO quantity = 100 EA
PO price
= 10 USD
No GRN posted
a)If the IR quantity is 10 then system calculates variance as below
Variance = Net order price * (quantity invoiced + total quantity invoiced so far)
= 10 *(10+0) = 100
This value is equal to DW limit hence there is no warning message and system will not block the invoice.
b)If the IR quantity is 11 then system calculates variance as below and block the invoice.
Variance = 10 *(11+0) = 110

This value is more than DW tolerance absolute upper limit hence invoice got blocked.
It updates tables as below
Tolerance Key

RBKP

RBKP_BLOCKED

RSEG

Auto release

DW

No blocking
indicator update
(ZLSPR)

A- Auto block

RSEG- SPGRM = X Yes

(Quantity block )

Automatic release possible if the blocking reason RSEG- SPGRM is deleted when we post GRN for the
balance quantity or credit memo for the excess invoiced quantity
DW absolute upper limit as Do not check:
PO quantity = 100 EA
PO price
= 10 USD
No GRN posted
If the IR quantity is 112 then also system would not block even though this is beyond the DQ
tolerance since it has been maintained as Do not check and there is no GR has been done.
One should be very careful to use this option as this would by-pass quantity variance DQ block if
there is no GR posted where GR has been planned
DW tolerance key is not maintained:

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If this key is not maintained for a company code it would always blocks the invoice for PO based invoice
verification when there is no GR has been posted.
Reference:
* SAP IMG documentation
9609 Views Tags: invoice_verification, tolerance_limit, spgrp, rbkp_blocked, invoice_block, three_way_match,
3way_match, tolerancekey

Pratik Jadhav
Mar 28, 2015 3:04 AM
Nice Explanation ... helpful and easy to understand...
thanks for this article
Kishan H
Jan 5, 2015 9:53 AM
Good one. Whre is part 2?
Dalapathy Sankar in response to Raja Ramasamy on page 17
Jan 2, 2015 8:28 PM
Nice Blog. Could you please guide me for the below scenario. PO Qty = 100 with unlimited over delivery check
box, GR = 140 Qty. GR checked but No GR based IV, MIRO should post for 140 Qty by blocking invoice with
Tolerance key DQ as 1% (warning message). Currently system is not checking DQ tolerance as its two way
match (PO based invoice) and ignores the tolerance % as its unlimited delivery check box in PO
Dalapathy Sankar
Jan 2, 2015 8:25 PM
Nice Blog. Could you please guide me for the below scenario.
PO Qty = 100 with unlimited over delivery check box, GR = 140 Qty. GR checked but No GR based IV, MIRO
should post for 140 Qty by blocking invoice with Tolerance key DQ as 1% (warning message). Currently
system is not checking DQ tolerance as its two way match (PO based invoice) and ignores the tolerance % as
its unlimited delivery check box in PO
Alaeddine BDH
Dec 31, 2014 6:03 PM
hello @Raja Ramasamy,
what about tolerance customizing? how can I set low MAX and MIN level case of company code?
thanks.
Raja Ramasamy in response to Pravin Bakrania on page 16
Sep 15, 2014 12:07 PM
Hi Pravin,
Thanks for the feedback , i will publish shortly...

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B V Yadav
Sep 12, 2014 1:10 PM
Hi Raja Ramasamy,
Good effort i think you spent more time to prepare this document. Good document and thank for share value
information.
Regards,
BV
Danny Roussel
Sep 12, 2014 10:39 AM
very usefull blog, thanks!
I was wandering if we can block an invoice if the received quantity > ordererd quantity.
So we want to do the goods receipt, but the related invoice should get blocked.
Any idea please?
Danny
Pravin Bakrania
Aug 8, 2014 4:17 PM
Hello Raja Ramasamy - This is very useful document and would appreciate if you can also post "Part -2" of this
"Tolerance Keys - An Insight" - I am more interested in examples of "KW" "ST" "PP".
Thanks once again !
Sanil Bhandari
Jun 20, 2014 12:16 PM
Very useful document
Regards
Sanil Bhandari
Raja Ramasamy in response to Mehmet Ozgur Unal on page 16
Apr 21, 2014 9:13 AM
Thanks........
Mehmet Ozgur Unal in response to Raja Ramasamy on page 17
Apr 20, 2014 12:36 AM
Hi ,

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Good effort , i wrote a similiar subject in document M8 messages for incoming invoices with tolerances
Regards.
M.Ozgur Unal
Raja Ramasamy
Apr 18, 2014 7:32 PM
Hi All
Appreciate your comments and valuable feedback....

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