SAP ERP - Logistics Materials Management

(SAP MM): SAP Threeway Match

Functionality & configuration
Posted by Madhavan Krishnamurthi Mar 19, 2012
Scope of the Blog:
The purpose of the blog is to provide the overview of three way match Functionality & how SAP configuration
can be utilized to achieve three way match functionality. SAP Three way match is one of the most common
Purchase to Pay Business Process for Direct Materials (Stock Items) which exists across all industries.
SAP Three-way match overview:
The Quantity & Price is matched between PO, GR & IR. (Three Levels)
SAP Three way match is based on PO Line item (If a PO has multiple line items, Three way match is
achieved in each line items)
Buyer of the Purchase order ensures three way match in SAP & Buyer resolves the discrepancy by
correcting PO,GR or IR.
SAP Provides configuration & Reports (MRBR Report) to achieve three way match Functionality
during Business transactions.

Configuration for Three-way Match

The Configuration for Three way match is done in the Following path is done in the following path.
SPRO-> Materials Management-> Logistics Invoice Verification-> Invoice Block-> Set Tolerance Limits
Configuration for Quantity Variance (Q):
Tolerance Key DW:
Tolerance Key DW blocks the Invoice when there is no corresponding GR for a line item of a PO.
It prevents the invoice to be paid immediately to vendor.
Example:
PO Qty -100
Vendor Provides Invoice first for 100 Qty .
GR is Posted after few days of invoice Posting
Result:
As soon as the invoice is posted in the system the invoice gets blocked due to DW tolerance key
& doesnt allow the system to pay the invoice immediately. The Blocked invoice appears in MRBR
report & Buyer of the Purchase order takes the suitable Decision to ensure three way match.

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SAP ERP - Logistics Materials Management (SAP MM): SAP Threeway Match Functionality & configuration

Tolerance Key DQ :
Tolerance Key DQ Blocks invoice when there is Quantity discrepancy
Example:
DQ tolerance Config-5%
PO Qty-100
GR Qty-100
Invoice Qty-150
Result:
Since the invoice quantity is higher than the PO quantity the invoice gets blocked due to DQ tolerance
Key. The Blocked invoice appears in MRBR report & Buyer corrects the discrepancy by taking suitable
organisational decisions.

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SAP ERP - Logistics Materials Management (SAP MM): SAP Threeway Match Functionality & configuration

Configuration for Price Variance (P)

Tolerance Key PP:
Tolerance Key PP compares the price between purchase order & invoice with the Tolerance limit specified in
the configuration.
Example:
PP tolerance in Config-200 $
PO Price -1000$ Qty-1
GR-Qty1
Invoice Price- 1400 $
Result:
Invoice is blocked since the Invoice price is higher than the PO price (More than Tolerance Specified.) The
blocked invoice appears in MRBR report & Buyer corrects the discrepancy by taking suitable decisions.

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SAP ERP - Logistics Materials Management (SAP MM): SAP Threeway Match Functionality & configuration

Configuration for Order Price Quantity (OPQ)

SAP provides two Tolerance Keys Tolerance Key BR (IR before GR) & Tolerance Key BW (GR before IR) to
address the order price quantity scenarios.
Tolerance Key BR (IR before GR) :
Invoice gets blocked if the Order Price Quantity variation is more than the value specified in configuration.
The system compares the ratio between quantities invoiced in order price quantity units: quantity invoiced in
order units Vs quantity ordered in order price quantity units: quantity ordered in order units

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SAP ERP - Logistics Materials Management (SAP MM): SAP Threeway Match Functionality & configuration

MRBR (Program RM08RELEASE)Report

This report is run by Buyer of the Purchase order (Purchasing group wise) to verify the list of invoices blocked
due to Quantity & Price variance for a given company code.

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SAP ERP - Logistics Materials Management (SAP MM): SAP Threeway Match Functionality & configuration

This program doesnot remove the block if the discrepancy is not resolved.The best practice is to run this report
in background by company code so that the program removes the block automatically after the corrective
action taken by Buyer.
32656 Views

Nitin U Kaple
Jun 12, 2014 2:18 PM
Very good document
Thanks
Boris Purer
May 28, 2014 4:25 PM
Excelent post!
Does anybody know a report that shows the hole three-way-match configuration??
thx
David Shardell in response to Dharmesh Hirapara on page 7
Apr 11, 2014 12:24 AM
We use an extension to post a Credit Memo for the difference and execute a BAPI to unblock the IR, allowing
the IR + CM to clear together, and post a "Residual Invoice" (blocked) for the remaining quantity invoiced but
not received. But SAP would consider it an improper invoice if you didn't receive full qty.
David Shardell

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Apr 11, 2014 12:21 AM

Do you know how to configure so that GRs cannot be reversed below the quantity of IRs already posted WITHOUT using GR-based IV?
Dharmesh Hirapara
Jan 7, 2014 3:32 AM
One Question on Qty variance block...lets say i have short receipt and invoice is came with full Qty and that
way invoice will be blocked....but how it is handled as no shortage receipt is expected...how do i pay to vendor
only for received quantities not the invoiced qty ?
has anyone idea on this ?
Nishu Shah
Sep 16, 2013 3:38 PM
Neatly explained
Thank You
Nishu
kush kumar
Sep 16, 2013 10:52 AM
Nice Article. Thanks sharing the same with crisp detail
bhawna sajwani
Sep 16, 2013 8:14 AM
A good read for GR/IR issue ...helpful for FI people too.
This will help us in f.13/f.19 issues
venkat krishna
Sep 6, 2013 8:29 AM
Really very nice........
PREETI KASHYAP
Sep 3, 2013 1:51 PM
Good One. Looks like ready made and easily available for quick future reference.

Thanks
Kingsuk Mukherjee
Aug 15, 2013 12:37 AM
Hello Madhavan,
If we like to enforce 3-way match for the direct purchases but not for indirect purchases how can we do it ? We
can differentiate direct from indirect either based on P-org or PO doc type.
shivendra Tripathi

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Jun 11, 2013 1:10 PM

Really helpful ..
Sandeep jain
Jun 3, 2013 8:29 PM
Nice post which has cleared many doubts. It would be better to understand BR and BW tolerance keys, if it
would have been provided with example for these keys.
Sameer Nirgude
May 15, 2013 5:36 PM
Nice compilation.
Suggest you to review for addition of Quality block too.
Since MRBR can be used for releasing the blocked invoices (manually), the access is normally not provided to
Buyers. They instead can review the MRBR reports for decision making.
Cecil D'Souza
Apr 4, 2013 7:58 PM
Perfectly explained and presented. Thank you for your effort.
Priti Singare
Mar 7, 2013 5:35 AM
One of the best document ... clears the concept...

Basavaraj Angadi
Feb 12, 2013 12:24 PM
Good one for quick ref..!!
Javier Torres
Jan 21, 2013 7:58 PM
Good Post
Javier Torres
Mustapure Avinash
Sep 27, 2012 11:24 AM
Its Good
Avinash
anitha bochala
May 4, 2012 6:41 AM
Very good Post Madhavan.

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A very quick question, Is there a reference document which relates the Invoice Vs Confirmation? In a scenario
where more than one confirmation and more than one Invoice are received per line item, Is there a way to
relate the Invoice for confirmation or set of confirmations.
Anitha
Carlos Wagner Moatto
Apr 11, 2012 5:07 PM
Excellent post
Arvind Kumar
Apr 4, 2012 12:00 PM
Good one!!

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