Receiving: Critical to the PO Process

Kristen BerningPurchasing Services

Agenda

• Refresher of receiving basics• Review of common questions and errors• Recap of fiscal year end 2015• Tips on how to monitor departmental

receiving

Session Goals

• Articulate why receiving is important• Look at ways your cluster can

streamline the receiving process• Learn how to prevent common issues• Troubleshoot common issues• Spark discussion with your teammates• Be proactive: monitor blanket/CPS POs

Why Do We Receive?• University policy decision to ensure internal

controls:– Data integrity– Risk Mitigation:

• Ensure suppliers are correctly paid• Ensure suppliers are paid only for the goods/services

the University actually received

– Separation of duties– Note: we do NOT receive U Market or VCPS POs

Procurement Life Cycle

Note: U Market & VCPS POs do not require receiving.

Receiving Roles and Access

EFS Role Receive via: eProcurement>Manage Requisitions

Receive via: eProcurement> Receive Items

Receive via: Purchasing> Receipts>Add/Update Receipts

U Market Requester

No No No

Receiver No Yes Yes

Requester Yes Yes No* (would need receiver role, too)

Procurement Specialist

No* (takes them to Add/Update Receipts)

No* (takes them to Add/Update Receipts)

Yes

Receiving by FunctionType of Order Receive via:

eProcurement>Manage Requisitions

Receive via: eProcurement> Receive Items

Receive via: Purchasing> Receipts>Add/Update Receipts

Who Can Receive?

POs created in the current fiscal year

Yes Yes Yes Requester, receiver, procurement specialist

Rolled POs No No Yes Receiver, procurement specialist

New lines added on PO (weren’t on requisition)

No No Yes Receiver, procurement specialist

Assets

No No Yes Procurement specialist

eProcurement>Receive Items

• User sees ALL lines available for receiving on one page.

• Once item(s) is selected, screen looks identical to Manage Requisitions receiving page, as the Manage Requisition page links directly to this page.

• Common user comment: can be difficult to search if you are associated to many requisition preparers/receivers.

eProcurement>Manage Requisitions

• Requisition preparer must use the proper search parameters to locate the requisition.

• Data is grouped specific to a requisition rather than displaying all items available for receiving.

• Once item(s) are selected, takes them to the same Receive Items receiving page.

• Common user statement: three clicks/screens compared to two (if using Receive Items).

Purchasing>Receipts>Add/Update

• User must know the PO number to start the receiving process.

• Page does not default according to user’s associated orders.

• Some users feel the screens are not as user friendly.

• User is able to edit receipt via these pages as long as they do not reduce the receipt’s amount below the vouchered amount.

Business Process: Non Assets

A. Receive, Then Voucher• Order arrives as expected.• Receiver verifies packing

slip and/or invoice then receives.

• Invoice is imaged in ImageNow.

• Voucher specialist copies from PO/receipt and creates voucher and links it to invoice via ImageNow.

B. Voucher, Then Receive• Invoice is imaged into

ImageNow.• Voucher specialist creates

voucher and links it to invoice via ImageNow.

• Requisition preparer receives match exception notification.

• Order arrives as expected.• Receiver verifies packing slip

and/or invoice then receives.

Match Exceptions• Nightly voucher job runs to ensure there is a 3-

way match between the PO, receipt, and voucher.

• Goal is to have checks and balances.• Must be resolved or supplier will not get paid.• Timely resolution avoids missed discounts.• Receipt exceptions include:

– No receipts found (prevents paying for items we did not receive)

– Tolerance (prevents overpayments)

Example: Match Exception• Requester receives email notification.

Receiving Assets Business Process

• Requester/department gives completed UM1681 form to procurement specialist.

• Procurement specialist receives in EFS.• Form gets imaged with invoice and linked to

voucher via ImageNow.• Inventory Services queries for asset vouchers

and finds UM 1681 form linked to voucher.• Inventory Services completes capitalization

process in EFS.

Most Common Help Tickets

• Majority of the callers ask: “Why can’t I receive? I don’t see any lines.”

• Key troubleshooting themes:– Security Access:

• U Market requesters cannot receive• Regular receivers cannot receive assets• Requisition preparers cannot access the core

Purchasing>Receipts>Add/Update page

– Purchase Order Inquiry Page:• Review PO status• Verify information for each PO line• Links to other information via Document Status feature

Invalid PO Status• Since the Upgrade, PO change orders route,

making the PO in pending status.• Cannot receive: closed, pending, approved, open,

sent back, complete, or canceled POs.• POs must also have a valid budget.• Navigate to: Purchasing>Purchase

Orders>Review PO Information>Purchase Orders to see the header status.

• Work with the procurement specialist; or approver(s) if the PO is in pending status.

Encumbrances• The caller sees an encumbrance balance on

the PO Inquiry page and believes there is still money to receive.

• Encumbrances are tied to vouchers and the merchandise on PO—not receipts.

• Any amount added in the freight, taxes, or other expense fields on the voucher entered by the voucher specialist do not affect the PO’s encumbrance balance.

PO Inquiry Page

PO is Fully Received• Many times someone else already received it or the person

forgot they received it. If it is fully received, no lines will appear.• Use the PO Interface or Document Status pages to total all

receipts associated to the PO. (Ex: PO Interface page)

New PO Lines• Whenever a new line is added onto the PO, it

must be received via the Purchasing>Receipts>Add/Update page.

• If the receiver is receiving via either of the two eProcurement receiving pages, no lines will appear.

• Since the line was not on the requisition (created in eProcurement module) but was added on the PO (in the Purchasing module) there is no connection to the line via eProcurement pages.

Rolled POs• Whenever a PO rolls into a new fiscal year, it

must be received via the Purchasing>Receipts>Add/Update page.

• If the receiver is receiving via either of the two eProcurement receiving pages, no lines will appear.

• Rolled POs need to be received in the Purchasing module, not eProcurement. This is because we finalize the requisitions, ending the tie to the PO via the eProcurement module.

Quantity Instead of Amount

• Requisition preparers think that if they use “LOT” on a standard purchase (general PO), it will receive by amount.

• Requisitions can be created using “amount only” receiving (see job aid).

• Procurement specialists can change the PO line to amount only as long as it hasn’t been received or vouchered.

Wrong Category or Account• If the item was incorrectly categorized (e.g.

should be an asset), the PO must be changed before it is received or vouchered.

• Assets must be appropriately recorded.• The procurement specialist must make this

change directly on the PO.• These changes will route for approval.• Reminder: non PO vouchers and journal

entries cannot include assets (e.g. 850101).

Freight• There is no req/PO category for freight.• Requester enters freight details in “comments”

where it can be seen at the voucher level.• University’s business process is to add freight

on the voucher.• Do not add new lines to the PO just to mirror

then receive what is on the invoice.• Freight charges entered on the voucher do not

affect encumbrances.

Blanket or CPS POs

• These recurring orders typically have multiple lines that have different accounts or categories.

• Supplier invoices can be challenging to decipher because they list everything and use their own process for billing.

• Freight and tax charges: ensure the voucher and receipt are consistent.

Receipt Errors Make POs Ineligible for Rolling

• PeopleSoft does not allow any discrepancies when rolling into the new fiscal year. Here is an example:

Fiscal Year End 2015• Almost 1,000 POs were force closed by Purchasing

Services due to receipt-related errors.• Specific receipt-related errors:

– POs with partial receipts (700+) • Receipts with open quantities or amounts remaining after they were vouchered• Ex: $821.76 was received and $820.76 vouchered; Ex: 9 received, 7 vouchered

– Invalid budget status (150)• Receipts with a negative value (Ex: Credit invoice received as a negative number

by receiver)• Encumbrance discrepancy (Ex: $90 item and $10 freight was invoiced. Receipt

was for $100; voucher line was for $90 and $10 added in the freight field)

– Receipts partially vouchered (100)• Receipt was not associated to a voucher• Ex: Believed receipt qualified as “activity” and received it but didn’t pay it

Be Proactive: Monitor Your Cluster

• FYE queries can be run at any time.• Need EFS Query Manager access.• “Procurement Specialist Training Grid:

– http://controller.umn.edu/fye/fye_2011_workshop_procspec.xls

– http://controller.umn.edu/fye/#purchasing

Partial Receipts: Be Proactive• Run Query

UM_DPO_YE_PARTIAL_RECEIPTS• Locate and research items on list.

Resource: PO Interface Page• Monitor blanket and CPS-related activity.• Accounts Payable>Review Accounts Payable

Info>Interfaces>Purchase Order

Resolving Receipt Issues• Receipts do not have a monthly close period so

can be edited up until FYE cutoff.• Common misconception: “It’s too late: the

voucher posted and paid out.”• Receiver or procurement specialist can go to:

Purchasing>Receipts>Add/Update Receipts page to correct the data entry error.

• Receipts can be edited as long as they don’t go below the amount that was vouchered.

Conclusion: Best Practices• Establish clear roles and responsibilities for

receiving to prevent errors and missed payments.• Receive accurately and timely; do not over receive. • If it’s not right on the receiving page: don’t receive!• Discuss how your cluster will deal with common

“gray areas” such as freight, credits, and taxes.• Establish routine monitoring of match exceptions

and partial receipts to catch those that cause errors.• Run queries at fiscal year end and resolve errors by

cutoff. Anything falling on the FYE queries will close.

Resources• University Financial Helpline

– finsys.umn.edu– finsys@umn.edu or controller@umn.edu– 612-624-1617

• Purchasing Services– purchasing.umn.edu– purchase@umn.edu

• Kristen Berning, Sourcing Specialist– kberning@umn.edu– 612-624-4554