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Evaluated Receipt Settlement (ERS)

Evaluated Receipt Settlement (ERS)


Usage Purpose

ERS allows you to settle goods receipts without needing to receive an invoice from the supplier. The system automatically generates and posts the corresponding invoices. You no longer require a supplier invoice, and the system can also send the settlement documents directly to the suppliers.

The system calculates the invoice amount for the relevant transaction using the purchase order prices, payment terms, tax details, and the quantity received in the goods receipt.

 

ERS is especially useful for generating settlement documents at regular intervals. It offers several benefits:

  1. Faster Purchasing Activities: By automating invoice creation, ERS significantly reduces the time required to complete purchasing activities.

  2. Avoids Transmission Errors: Since the process is automated, the risk of errors during data transmission is minimized.

  3. Eliminates Manual Invoice Verification Costs: ERS removes the need for manual invoice verification, saving time and resources.

  4. Prevents Quantity and Value Differences: With ERS, discrepancies in invoice verification are avoided, as the system relies on accurate purchase order and goods receipt data.

5.  ERS also handles credit memos: If an invoice has already been posted for a goods receipt and a return delivery occurs, the system will automatically generate a credit memo for the returned quantity.

 

Constraints and Limitations

While ERS is a good option in some cases, it does have some limitations:

  1. No Planned or Unplanned Delivery Costs: ERS cannot include planned or unplanned delivery costs in the settlement.

  2. Rounding Differences: Proportional debiting may result in rounding differences when settling partial return deliveries.

  3. Structured Articles: Structured articles cannot be summarized when creating settlement documents.

  4. Revaluation Challenges: If a revaluation occurs, the percentage handling surcharge cannot be recalculated after price changes.

 

Prerequisites

To use ERS, the following conditions must be met:


Master Data

  • You must have a material created with a Purchasing view, or be settling purchase orders with account assignments.

  • The price for the items ordered must not be an estimated price.

  • In the vendor master, you need to enable the GR-based Inv. ver. and Auto GR Setmt fields.  The ERS indicator can be set for the affected business partners in the BP transaction. Choose the business partner with the Supplier role (FLVN01), go to the Purchasing section, and select the indicator under Purchasing Data > Additional Purchasing Data.


Movement Data

  • Goods-receipt-based Invoice Verification must be set for the purchase order item. If the GR-based Inv. ver. and Auto GR Setmt fields are selected in the vendor master, they will be automatically selected in the purchasing document. You must have at least one schedule line in your scheduling agreement.

  • A tax code must be included in the scheduling agreement or purchase order.

  • The goods receipt must be linked to a purchase order or scheduling agreement.

  • To send settlement documents to the supplier, you must set up message determination.

When you flag a supplier as ERS-enabled, the system automatically sets the ERS indicator for each item when you create a purchase order for that supplier. To prevent this, you can flag the info record for the material and supplier as not subject to ERS.

In Purchasing, you can remove the default ERS indicator from individual purchase order items

 

Process Flow for ERS

Goods movements can be settled without needing an invoice from the supplier. The system can automatically create and post the correct invoices. This eliminates the need for the supplier to send an invoice and for you to verify it. You can send the settlement information to the supplier through printed documents, fax, EDI, or the internet.


Note that you can unselect the GR-based Inv. ver. field in the purchase order item if needed. For single purchase orders, you can also unselect ERS in the order item or exclude them from ERS in the material’s info record.

 

Process Flow


















  1. The customer agrees on a scheduling agreement with the supplier that includes fixed conditions.

  2. The customer orders goods from the supplier.

  3. The supplier delivers the goods according to the purchase document.

  4. The customer posts the goods receipt for the delivery.

  5. The customer creates the settlement documents using ERS.

  6. The customer sends the settlement documents to the supplier by EDI, email, or as printed documents.

 

Customizing Steps


Document type and number range 

Customizing Path — SPRO –> Material Management –> Logistics Invoice Verification –> Incoming Invoice –> Number Assignment –> Maintain Number Assignment for Accounting Documents

Transaction Code — OMR4


Click on the 3rd box “Document Types in Invoice Verification”.















Double click on MRRL transaction code in the sub screen.



















In the screen below we maintain the document type for ERS.












Customizing Path — SPRO –> Material Management –> Logistics Invoice Verification –> Incoming Invoice –> Number Assignment –> Maintain Number Assignment for Logistics Documents –> Maintain Number Range Interval for Invoice Documents

Transaction Code — OMRJ

In the screen below we maintain the number range for Logistic Invoice Documents.












Customizing Path — SPRO –> Material Management –> Logistics Invoice Verification –> Incoming Invoice –> Number Assignment –> Maintain Number Assignment for Logistics Documents –> Transaction – Assign Number Range

Create a number range and assign it to transaction RD and










NACE Customizations for Message Determination


When the invoice is posted, the settlement documents are automatically sent to the supplier as printed documents, via email, or by fax. The Message Determination setup mentioned below is needed for this process.


Maintain Output Type

Customizing Path — SPRO –> Material Management –> Logistics – Invoice Verification –> Message Determination –> Maintain Message Types
















Maintain Conditions

Customizing Path — SPRO –> Material Management –> Logistics — Invoice Verification –> Message Determination –> Maintain Conditions










Customizing Path — SPRO –> Material Management –> Logistics – Invoice Verification –> Message Determination –> Assign Forms and Programs



Vendor Master Data

1-     Select the GR-Based Inv. Verif. indicator

2-     Select the AutoEval. GR Setmt. Del. and AutoEval. GR Setmt. Ret. İndicator


 

 

 

 

 

 

 

 













Sample Process


If your vendor master data set as correctly, ERS checkbox is selected by default in PO screen. If not you can edit in PO screen or in the Info record you can also set ERS checkbox as marked.



Goods receipt done for the related PO.



You can perform ERS process with the MRRL Tcode.


In this screen you can filter by Vendor so just that Vendor’s goods receipts will automatically converted to Invoices. You can also use test run functionality to see if there are errors or not.


















If there are no errors for posting an invoice, the postable column will be marked with “X”. If there are any errors about goods receipt, configuration or with the transactional data error message will be displayed in the Info Text Column.


In the example below first row has an error and it is not postable but the second row can be posted.


After executing the program without selecting “Test Run” relevant postings done and Invoice documents created.


You can also get the printout of the Invoice from MR90 Tcode.

You can see the Sap standard ERS printout below.

 

























When To Use ERS


ERS is most effective when:

  • Agreements with vendors are clear and well-documented.

  • Price agreements in purchase orders are regularly updated.

  • Goods movements are recorded promptly and accurately.

  • Settlement documents are created periodically (e.g., daily).

 

Conclusion


Evaluated Receipt Settlement (ERS) is a powerful tool for businesses that want to make their purchasing and payment processes faster and simpler. By automatically creating invoices and removing the need for manual checks, ERS helps reduce mistakes, saves time, and makes operations more efficient. But for ERS to work well, it’s important to have clear agreements with vendors, enter data accurately, and keep purchase orders up to date.

In short, ERS can make your procurement process smoother and more efficient—if you set it up correctly!

 

 

Have you implemented ERS in your organization? Share your experiences and insights in the comments below! If you’re considering ERS, feel free to reach out to me through LınkedIn for more information or guidance on getting started.




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