7/8/2021 Stock In Transit (GR/IR Regrouping/Reclassification) | SAP Blogs

Community

Ask a Question Write a Blog Post

Product Information

Syed Usama
October 6, 2020 3 minute read

Stock In Transit (GR/IR Regrouping/Reclassification)

Follow RSS feed Like

9 Likes 2,022 Views 7 Comments Edit

Introduction

The topic of the Stock in Transit is highly valuable especially in the business environment where import
transactions occur and business needs to record these tractions, SAP GR/IR functionality provides solid basis
to design the solution to cater the business requirement accordingly.

To record the STOCK IN TRANSIT transactions as period end activity closing entry is made and at start of next
month reversal of the same entry is recorded in the system

Concept for Stock in Transit

Stock in transit refers to material and other types of inventory that have left the shipping port of the seller, but
not yet reached to the buyer.

Accounting entry for Stock in Transit 

Stock in Transit G/L Dr xxxx

Letter of Credit G/L Cr xxxx

To meet the requirement of audit under the head of current assets (b/s) the user will pass the above entry at
the end of the month as it is the part of period closing activity.

Reversal of Accounting Entry 

https://blogs.sap.com/2020/10/06/stock-in-transit-gr-ir-regrouping-reclassification/ 1/7
7/8/2021 Stock In Transit (GR/IR Regrouping/Reclassification) | SAP Blogs

Letter of Credit Dr xxxx

Stock in Transit Cr xxxx

On the beginning of the next month user reverse the entry.

Transaction Keys in SAP:

In SAP we have two transaction keys;

1.BNG (Invoiced but not yet delivered)

2.GNB (Delivered but not yet Invoiced)

In standard we use three GLs to perform the process for BNG

1. Stock in Transit (BNG)

2. Adjustment A/c
3. Reconciliation A/c

Similar to that GNB is for the recording of liabilities;

1. Adjustment A/c
2. GNB Liability A/c
3. Reconciliation A/c

Following points should be taken care for mapping GL accounts and process

Clearing GLs are used in Regrouping and Reclassification process plus one adjustment a/c is also created
from the group of clearing accounts.

All condition types are mapped on Purchase Order

All vendors’ liability is recorded with reference to Purchase Order

Configurational Settings

 Clearing GL accounts is to be mapped in WRX key in MM which is same for MIGO and MIRO. System club all
the Un-delivered goods and Un-Delivered Invoices in one adjusting clearing GL from all the clearing GLs when
execute the process of Regrouping/Reclassification.

Clearing GL in WRX key are also used in regrouping and reclassification process and it should be open item
manage else the running of the process will exclude the GLs.

BNG Stock in transit account (invoiced but not yet delivered) should be from the head of current assets or
from Inventories b/c stock in transit is the part of inventory.
GNB (Liability) A/c should be from liability side.
Adjustment a/c should be a balance sheet

https://blogs.sap.com/2020/10/06/stock-in-transit-gr-ir-regrouping-reclassification/ 2/7
7/8/2021 Stock In Transit (GR/IR Regrouping/Reclassification) | SAP Blogs

GR/IR would be the reconciling account and current asset account would be the targeted account

Scenario

Now, let’s take an example of import Purchase Order to understand the process of stock in transit where
ownership is transferred to the buyer as soon as the shipment depart from the seller side

Creation date for purchase order is 01.03.2020 for 85 Quantity PO is booked with the C& F amount and known
planned & delivery costs.

On 29.06.2020 foreign vendor invoice is arrived  received which is actually a C& F or other than the charges of
port ,customs & clearings which are the local invoices will be catered through condition types on PO and then
call them at the time of MIRO.

Accounting Entry for Invoiced Received in SAP

GR/IR Clearing A/c Dr xxxx

Foreign Vendor Cr xxxx

Now 30.06.2020 user wants to close the Trial Balance and want to record the Stock in Transit.

At this point of time the system will allow to post manual entry by using any GL entry t-code but it is better to
record through system b/c there are bulk of invoices and for proper recording we should rely on system entries.

By running a process of GR/IR reclassification system will cub all the invoice received in one adjusting
GL account and pass the below entry on date 30.06.2020 just to meet the audit requirement. (BNG) Invoiced
but goods not delivered

Accounting Entry in SAP after executing the process

(BNG)Stock in Transit GL Dr xxxx

Adjusting Clearing A/c Cr xxxx

On 01.07.2020 system will automatically reverse it.

Adjusting Clearing A/c Dr xxxx

(BNG)Stock in Transit A/c Cr xxxx

Foreign vendor invoice which recorded on 29.06.2020 remain same and ready for payment it can be paid or
hold for months as per the contract from the supplier and the local vendor invoices can also include and run in
the process if something is paid locally before goods arrived.

Now, on 01.08.2020 when the goods are received,

System will pass the accounting entry as below;

https://blogs.sap.com/2020/10/06/stock-in-transit-gr-ir-regrouping-reclassification/ 3/7
7/8/2021 Stock In Transit (GR/IR Regrouping/Reclassification) | SAP Blogs

Material Dr. xxxx

GR/IR clearing A/c Cr xxxx

Difference of dates appearing in the above entries showing goods transit period.

Conclusion

Process automation, integration with PO and comprehensive report make GR/IR Regrouping a cool functionally
provided by SAP.

Alert Moderator

Assigned tags

FIN General Ledger | FIN (Finance) |

Related Blog Posts

Valuation Areas - a generic approach

By
Marek Turczynski , Nov 19, 2018

Tax Return in SAP

By
Bohdan Petrushchak , Feb 09, 2017

Date / Day Wise Trial Balance in ECC - General Ledger

By
S Abinath , Jan 16, 2020

Related Questions

GR IR account clearing back dated 2017

By
Srikanth Dasari , Jun 17, 2019
GR and IR posted in different currencies
By
Srikanth Dasari , May 24, 2019
GR/IR account during F.05 even if Post Local currency enabled
By
VADIRAJ TANJORE , Mar 31, 2018

7 Comments
https://blogs.sap.com/2020/10/06/stock-in-transit-gr-ir-regrouping-reclassification/ 4/7
7/8/2021 Stock In Transit (GR/IR Regrouping/Reclassification) | SAP Blogs

Salman Akbar

October 6, 2020 at 5:33 pm

Nice article!

Like (0) | Reply | Alert Moderator

Syed Farooq Ali

October 7, 2020 at 6:05 am

Informative !

Like (0) | Reply | Alert Moderator

SIKANDER WAHAB

November 10, 2020 at 6:26 am

Good quality article!

Like (0) | Reply | Alert Moderator

Evgeniy Biryukov

February 18, 2021 at 9:26 am

Hi Syed,

May I ask a question on the described topic, please?

There is a case when all the above settings are set in SAP. Per one of the import invoice, we had goods in transit
as ownership on materials was transferred at vendor shipment point. Then we faced some documents issues on
local customs and could not release all goods from customs. It's not the fault of our vendor, we paid 100%
invoice and materials value should be posted as expences on responsible department P&L.

Could you describe please how technically the correct disposal of goods in transit value from GR/IR Clearing
A/c to expenses G/L account should be done in SAP both in MM and FI modules?

Thanks a lot in advance.

Like (0) | Reply | Alert Moderator

https://blogs.sap.com/2020/10/06/stock-in-transit-gr-ir-regrouping-reclassification/ 5/7
7/8/2021 Stock In Transit (GR/IR Regrouping/Reclassification) | SAP Blogs

Syed Usama | Post author

February 18, 2021 at 10:48 am

Your Welcome!

Biryukov

You should post the liability  as per the actual vendor invoice because your vendor sent you the 100% Goods.
But when you will  do MIGO the price difference GL would be targeted which is the actual posting between the
GR IR difference

Like(0) | Reply | Edit | Alert Moderator | Trash

Evgeniy Biryukov

February 18, 2021 at 12:35 pm

Syed,

All entries related to vendor invoice were done as a usual transaction, 100% of liability was reflected and paid to
the vendor. It's a clear moment.

When we receipted the goods under PO, MIGO was done partly, only with PO items, which were released from
the custom and transfer to the warehouse.

The difference (value of unreleased materials) was posted on GR/IR account as you wrote and every monthly
closing we have entries on BNG account, then reverse of that on the next day.

31st day of the closing month: Dt BNG Ct GR/IR

1st day of the next month: Dt GR/IR Ct BNG

Which steps (for example, something with PO) should be done for the posting of unreleased materials value to
P&L account? It can be a price difference what you suggest above, but operating expenses would be the better
option as it's not a price difference.

Advice please if know.

Thank you.

Like (0) | Reply | Alert Moderator

Amar Mohite

June 24, 2021 at 10:55 am

There is standard LOG_SIT_MM business function

Like (0) | Reply | Alert Moderator

https://blogs.sap.com/2020/10/06/stock-in-transit-gr-ir-regrouping-reclassification/ 6/7
7/8/2021 Stock In Transit (GR/IR Regrouping/Reclassification) | SAP Blogs

Find us on

Privacy Terms of Use

Legal Disclosure Copyright

Trademark Cookie Preferences

Newsletter Support

https://blogs.sap.com/2020/10/06/stock-in-transit-gr-ir-regrouping-reclassification/ 7/7