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Gaurav Misri
March 27, 2019 3 minute read

SAP Retention Process

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What is Retention Process?

Retention process is Holding back a portion of payment to vendors who works for your organization.For
example, the retention amount is released to the vendor when certain expectations are met or on a speci ed
date that your vendor has agreed upon.

An organization can have an agreement with the vendor that a certain percentage or amount will be retained
from the total amount that needs to be paid to be vendor. The agreement can have a retention date on
which the help back amount will be paid to the vendor or when certain expectations are attained.

The Purpose of this Blog is to Explain the SAP ow of the Retention process.

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Functionality that needs to be activated is : LOG_MMFI_P2P via tcode SFW5.

Customization:

A new document type needs to be created for the retention process.

Tcode – OMR4.

Click on “Document types in Invoice Veri cation” tab.

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Select the “MIRO” transaction code line and display its details.

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The tab highlighted in yellow is where we maintain the document type for Retention process which will then
ow while we are Invoicing the Purchase order.

The Steps to be done in SAP are given below:

  

Create Purchase order.

Tcode – ME21N

Enter all the relevant details such as Material, Quantity, Unit Price, Plant, Vendor and Retention category.

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We will enter 10% as retention. 

Save the Purchase order.

PO 4500000087 has been created.

 
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Create GRN.

Tcode – MIGO

Enter the Storage location and tick on “Item OK” icon.

Click on “Post“ icon to Post the GRN.

GRN 5000000164 has been created.

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Book the Vendor Invoice

Tcode – MIRO

Enter the PO Number, Invoice date and reference eld and hit Enter.

Enter the Amount, Retention due date and Hit Enter. 

Click on “Messages” icon to view the message log.

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Click on the “Simulate” icon

Hit Enter

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Click on the “Post” icon to book the Invoice.

Document 5100000139 has been created.

Display Invoice document to check for the GL accounts that are hit in Retention process.

Two accounting document will be generated :

1. Original vendor invoice
2. Retention amount invoice.
Tcode – MIR4

Enter the Invoice document and Fiscal year.

Hit Enter

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This is the document we just posted via MIRO.

Click on Follow-On documents icon.

We have got 2 Accounting documents been generated here.

The screenshot given below is the subsequent accounting entries for Accounting document 5100000112.

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Subsequent accounting entries for Accounting document 5100000113.

Alert Moderator

Assigned tags

MM Purchasing | SAP Supply Chain Management | retention | sap mm |

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Conclusion :

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1. LOG_MMFI_P2P
Questions functionality needs to be activated.
2. Message M8_2303 needs to be activated.
3. A to
How special G/L
rounding o indicator needs
the retention to theto be created
nearest rupee for Retention process so that correct G/L accounts will be hit
By from the
Shishir FI side.
Kumar , Jul 23, 2020
Invoicing plan with retention
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9/1/2020 SAP Retention Process | SAP Blogs

By Javier
4. Two Coll-Vinent entries
Accounting , Sep 06,will
2019be generated after booking the Invoice.
Add more than percentage
5. Retention one retention in
andPOcategory
(PO As A Serves)
in the PO and Retention due date in MIRO are a mandate.
By nagy farag , Mar 14, 2019
 

I hope you liked the blog, and if you have any suggestions or questions please let me know.

13 Comments

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V V Santhosh Kumar Kolla

April 1, 2019 at 8:58 am

Hello Gaurav,

Good Blog. Keep it up.

Thanks,

Santhosh Kolla.

Like(1)

Amaranatha Reddy Musali

April 3, 2019 at 10:54 am

Very helpful blog.

Since you have provided step by step screenshots, it makes the it easily understandable.

Regards.

Amar

Like(1)

Samay R Nanda

April 5, 2019 at 9:06 am

Insightful to the Vendor retention Functionality.

Any Use cases or industry speci c examples where we can use it?

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Like(0)

Gaurav Misri | Post author

April 8, 2019 at 2:00 pm

Retention is common practice in certain areas, for example, construction.

In construction projects, it is standard to withhold a percentage of the invoices sent by contractors because,
at the time of invoice, the quality of the goods cannot be assessed. Typically, about six months after
construction projects are nished, quality issues appear and can be assessed. If no quality problems arise,
the money that was withheld is paid to the contractor.

Like(0)

Samay R Nanda

April 9, 2019 at 10:22 am

Thank you! That helps

Like(1)

Sophia Scott

April 19, 2019 at 5:46 am

Thanks For Sharing…Very Helpful Blog.

Like(1)

Olga Nevo

May 3, 2019 at 2:09 am

Hello Gaurav,

Very nice document. Thank you.

Can you please advise, if there are two Ratios of retention in one PO (10% and 5%), means two Retention
documents should be created during MIRO? How to proceed?
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Thanks.

Olga

Like(0)

Gaurav Misri | Post author

May 7, 2019 at 2:22 pm

2 Di erent ratios of retention in a PO means 2 PO line items.

So if you do MIRO for these 2 PO line items in a single go, Yes… 2 Retentions documents would be created.. 1
for each line item.

Like(0)

Olga Nevo

May 22, 2019 at 2:58 pm

Thank you very much, Gaurav.

Actually, the company has a kind of gradual retention process, when two di erent rates should be applied to
the single PO line… Do you have any advice?

Thanks.

Olga

Like(0)

Gaurav Misri | Post author

August 6, 2019 at 10:32 am

oohh sshh, sorry for the delayed response.

rstly, i did not understand how would you apply 2 di erent rates in PO for a single line.

Just an FYI, we can change the retention percentage while doing MIRO. i hope this helps you.

Like(0)

Naresh Raghavan

August 7, 2019 at 7:08 pm

Good one Gaurav!

Like(1)

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Oren Gershon

March 16, 2020 at 9:46 am

Hello Gaurav,

Is it possible to activate the retention in S/4 Fiori app (Mange Purchase Order App)?

Many thanks

Oren Gershon

Like(0)

Shishir Kumar

July 20, 2020 at 11:57 am

Hi Gaurav,

My client wants round o retention amount in miro. For example the gross amount is 1250 in invoice and if
the retention is 2.5% then retention amount will be 31.25. they want this amount round o to 31. Is there any
con guration in sap to do that whenever system calculate retention it will automatically give the roundo
gure. And after that further calculation will be based on that. Please let me know if there is such a
con guration.

Thanks

Like(0)

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