The case study covers one of our implementations for a large multi-business & FMCG company headquartered in North India with over USD 750 million in revenue. Our client has a large SAP S/4 HANA implementation with over 30+ employees supporting SAP functions.
Incorrect MIGO & MIRO entries - A perennial problem
Like any other large company, our client has thousands of purchase entries being posted in their SAP ERP by multiple users. They have multiple company codes setup in their SAP ERP, hence, on average every month, around 1 to 1.5 lacs purchase documents are posted in the SAP ERP. While doing GRN (Goods Receipt Note) or SRN (Service Receipt Note) entry in SAP using MIGO & related T-code, vendor document reference (invoice) number & invoice date needs to be captured. Same also needs to be captured while doing accounting entry of PO based or non-PO based purchase documents via MIRO or FB60 T-codes in SAP.
Due to wrong data reading or human mistakes, purchase document fields are captured incorrectly. This leads to wrong capture of vendor invoice data in the SAP ERP & an incorrect purchase register is created. For claiming right Input Tax Credit (which runs into crores of rupees) every month, our client was struggling with reconciling the purchase register with vendor data available on the Government’s portal (GSTR2A/2B) and they had to manually correct the vendor document related fields outside of SAP ERP. This led to a large effort by indirect tax team of the client to confirm input tax register every month and it was also resulting in leakages in claiming rightful input tax credit in their monthly GST (3B) return.
Digitising validation of MIGO & MIRO entries is a boon
We presented our GRN & Accounting Validation SAP cockpit solution to our client and in no-time client was able to understand its effectiveness in solving their incorrect purchase entry concerns. Our MIGO & MIRO validation cockpit solution in SAP uses vendor e-Invoice data available through GST APIs to do real-time data validations while MIGO (GRN) or MIRO (accounting entries) are being posted in the SAP ERP. The solution restricts users from posting an incorrect purchase entry, depending on the criticality of the data field being entered the solution either generates a warning or an error message to the user in the SAP screen itself. Our solution compares various purchase document fields like document number, document date, place of supply, ITC eligibility, HSN code, etc. with the help of vendor e-Invoice data.
Our MIGO & MIRO validation SAP cockpit solution also has the functionality to automatically capture e-Invoice applicability of all the vendors who have been created in the vendor master. Validations of purchase document data fields with vendor e-Invoicing data is only done for the vendors who are required to submit e-Invoices to their customers. This validation also helps our client to detect vendors who have not generated the authenticate e-Invoice as per the GST regulations.
Our MIGO & MIRO validation cockpit solution in SAP ERP downloads vendor e-Invoice data from GST APIs automatically on daily basis & saves it in SAP ERP. The entire solution runs on auto-mode and on manual intervention is required by the users, there is also no change in their existing purchase invoice booking process.
Impact of MIGO & MIRO validation
We implemented our MIGO & MIRO validation cockpit solution in SAP ERP of our referred client inside 6 weeks. Solution implemented brought down GST purchase register reconciliation errors of our clients by 30 to 40%. It has also saved around 100 working hours of our client’s indirect tax team every month.
Our MIGO & MIRO validation cockpit solution deployed in SAP ERP of our client has enabled us to cross-sell other effective indirect tax automation cockpit solutions as well. We have also implemented Auto-ITC reconciliation & Vendor Payment Management solution for the client in their SAP ERP. Every week our client is discovering the impactful benefits of our effective SAP cockpit solutions, it is great to become a partner in our client’s Tax & Finance function transformation journey.