What is GR/IR reconciliation?
GR/IR reconciliation is the process of comparing goods receipts with invoice receipts to identify purchasing transactions where the receipt and supplier invoice do not agree, or where one side is still missing. GR stands for goods receipt and IR stands for invoice receipt.
The GR/IR clearing account is a temporary account used between receiving goods and recording the supplier invoice. Matched goods receipts and invoice receipts should offset one another. Outstanding balances require review.
How does GR/IR reconciliation work in SAP?
When goods are received against a purchase order, SAP records the goods receipt and posts to the GR/IR clearing account. When the supplier invoice is recorded, SAP posts the corresponding invoice receipt.
If the quantity and value agree, the related entries can clear. A balance remains where:
- Goods have been received but the invoice is missing
- An invoice has been received before the goods
- Quantities or values differ
- A return or reversal has not been reflected correctly
- Delivery costs, exchange rates or purchase-order changes create a difference
What does GR/IR reconciliation involve?
A period-end review normally includes:
- Identifying unmatched goods receipt and invoice receipt items.
- Grouping items by purchase order and supplier.
- Checking timing differences.
- Investigating quantity and value differences.
- Confirming whether further goods or invoices are expected.
- Posting or requesting corrections where necessary.
- Documenting valid outstanding items.
Example: SAP shows a goods receipt for 100 units but an invoice for 90 units. The remaining difference stays in the GR/IR account until the missing invoice quantity arrives or the purchase-order history is corrected.
Why is GR/IR reconciliation important?
An unexplained GR/IR balance can affect liabilities, inventory costs and period-end reporting. Regular review helps finance and procurement teams distinguish genuine timing differences from missing documents or posting errors.
How does GR/IR reconciliation relate to BEST?
SAP provides standard GR/IR clearing and reconciliation capabilities. BEST does not replace the operational matching of goods receipts and invoice receipts.
The GR/IR account may, however, be included in the organisation’s wider balance sheet reconciliation process. The BEST Balance Sheet Recons module can support the preparation, review, evidence and approval of that account within SAP. Where individual open items require complex matching and clearing across accounts, the separate BEST Open Item Clearing module may also be relevant, subject to the customer’s process and configuration.
Frequently asked questions
What does GR/IR stand for?
GR means goods receipt and IR means invoice receipt.
Is a GR/IR balance always an error?
No. It can represent a valid timing difference, such as goods received before the supplier invoice. Older or unexplained items require investigation.
Who is involved in GR/IR reconciliation?
The process often involves finance, accounts payable, procurement and goods-receiving teams because the cause may sit in any part of the purchase-to-pay process.