How To Fix FARR_MSG_CUSTOM026 - Perf. obl. &1's invoice amount must not exceed its contractual price

SAP Error Message - Details

• Message type: E = Error

• Message class: FARR_MSG_CUSTOM - Customizable Messages for Revenue Accounting

• Message number: 026

• Message text: Perf. obl. &1's invoice amount must not exceed its contractual price

Self-Explanatory Message

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Smart SAP Assistant

• What is the cause and solution for SAP error message FARR_MSG_CUSTOM026 - Perf. obl. &1's invoice amount must not exceed its contractual price ?

  The SAP error message FARR_MSG_CUSTOM026 indicates that the invoice amount for a performance obligation (Perf. obl.) exceeds the contractual price defined in the system. This error typically arises in the context of SAP's Revenue Accounting and Reporting (RAR) module, which is used for managing revenue recognition in compliance with accounting standards.
  Cause:
  
  Invoice Amount Exceeds Contractual Price: The primary cause of this error is that the invoice amount being processed is greater than the amount specified in the contract for that particular performance obligation.
  Incorrect Contract Data: There may be discrepancies in the contract data, such as incorrect pricing or terms that do not align with the invoice.
  Data Entry Errors: Manual entry errors during the invoicing process can lead to incorrect amounts being submitted.
  Changes in Contract Terms: If there have been changes to the contract terms after the invoice was created, this could lead to inconsistencies.
  
  Solution:
  
  Review the Contract: Check the contractual price for the performance obligation in question. Ensure that the invoice amount does not exceed this price.
  Adjust the Invoice Amount: If the invoice amount is indeed higher than the contractual price, adjust the invoice to reflect the correct amount.
  Verify Contract Data: Ensure that all contract data is accurate and up-to-date. If there have been changes, make sure they are reflected in the system.
  Consult with Relevant Departments: If there are discrepancies that cannot be resolved, consult with the sales, finance, or contract management teams to clarify the situation.
  Check for System Configuration Issues: If the issue persists, it may be necessary to check the system configuration or consult with your SAP support team to ensure that the RAR module is set up correctly.
  
  Related Information:
  
  SAP Notes and Documentation: Check SAP Notes for any known issues or updates related to this error message. SAP's support portal may have specific guidance or patches.
  Training and User Guides: Ensure that users involved in the invoicing process are trained on how to enter data correctly and understand the implications of contractual terms.
  Audit Trail: Maintain an audit trail of changes made to contracts and invoices to help identify the source of discrepancies in the future.
  
  By following these steps, you should be able to resolve the error and ensure that your invoicing process aligns with contractual agreements.