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Understanding the Procure to Pay Dashboard Content Modernization of Financial Reporting Project Summer 2015

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Understanding the Procure to Pay Dashboard Content

Modernization of Financial Reporting Project

Summer 2015

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Objective of Todays Discussion

Introduce users to the new OBI dashboards and provide a high-level overview of the associated business processes

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Overview

Agile Software Development

What is P2P?

Transaction Types

Committed Funds Dashboard

Vendor Invoice Detail Dashboard

Understanding P2P Accounting

Escheat Dashboard

Appendix

Agile Software Development

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Agile software development methodology

More responsive than the traditional model

Uses a sequential approach to building software

Delivers the more software quickly

Changes quickly and change often

Promotes team collaboration and adaptability throughout a project lifecycle.

http://www.bottomlineperformance.com/this-week-on-talktech-agile-learning-design-cognitive-overhead-and-mistake-correction-through-games/

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What is Procure-to-pay?

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Involves the integration of purchasing with accounts payable

Entire life-cycle of a transaction

These steps are usually involved in your typical procure to pay cycle:

Identification of Requirement

Authorization of Purchase Request

Final Approval of Purchase Request

Procurement

Identification of Suppliers

Inquiries

Receipt of the Quotation

Negotiation

Selection of the Vendor

Purchase Order Acknowledgement

Advance Shipment Notice

Goods Receipt

Invoice Recording

3 Way Match

Payment to Supplier

Transaction Types

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Transaction types included in the Procure to Pay process

SystemDescriptionAppears on Committed Funds Appears on Vendor DetailCommentsHCOMMarketPlace POYesYesPO# beginning with 4Non-Catalog POYesYesPO# beginning with 7Payment RequestYesYesPO# beginning with PRNon-Employee ReimbursementYesYesPO# beginning with NRWeb ReimbursementCorporate Card PaymentsYesYesVendor is Citibank / Direct PayBCD TravelYesYesVendor is BCD Travel / CambridgeEmployee Expense ReimbursementYesYesVendor is employee nameFedExFedEx TransactionsYesYesPO# beginning with MXAP ImportsDirect feeds to AP systemNoYesIncludes RICOH, FAS phys res., dining and library trxPCARD SettlementDirect feed to GLNoNoJournal source AP 015 Pcard entry

Oracle Subledgers and GL Integration

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Web Reimbursements

iProcurement

(HCOM)

AP Invoice Import

P-Card

Oracle Payables

(AP)

Oracle Assets

Oracle Receivables

(AR)

Oracle General Ledger

(GL)

Manual JE or Adjustments

(ADI)

HCOM PO Lifecycle (Marketplace and Non-Catalog)

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If match is not successful (goods not recd, incorrect qty/ price) invoice goes on hold AND does not post to GL until resolved

If vendor is paid via check and does not cash it within 6 months the Escheat due diligence process begins

* A few dozen vendors are set-up to electronically submit invoices. Remainder are sent directly to AP (PO Box or 1033 Mass Ave) or to the department.

** E-invoice data is loaded

Expense may be posted before vendor receives check due to payment terms (net/30)

AP does not have visibility into all PO information. This is one of our audit controls so they cannot see what users received by line.

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Requisition approved and PO created

PO sent to Vendor(MarketPlace electronically, Non-Cat dept sends)

Goods/Services shipped to Harvard and vendor sends invoice*

Goods received in HCOM by dept (if required) and invoice sent to Central AP

System successfully matches invoice data keyed by AP to PO and Receipt data entered locally

Payment scheduled and expense posted to GL

Vendor paid via Paymode or paper check

Central AP enters invoice data in system**

HCOM PR/NR Lifecycle (payment req. and non-empl reimb)

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If match is not successful (incorrect qty/ price) invoice goes on hold AND does not post to GL until resolved

If vendor is paid via check and does not cash it within 6 months the Escheat due diligence process begins

Expense may be posted before vendor receives check due to payment terms (e.g. net/30)

Non-employee incurs expense or department receives good/service

Supporting documentation sent to AP

System successfully matches invoice/reimb data keyed by AP to PR/NR

Vendor paid via Paymode or paper check

Central AP enters invoice/reimb data in system (blind entry they do not see PR/NR info)

After the fact requisition approved and PR/NR created

Payment scheduled and expense posted to GL

Reimbursement and Card Services (RCS) Lifecycle

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If employee is paid via check and does not cash it within 6 months the Escheat due diligence process begins

Reimbursement and corporate card request created and approved locally

Supporting documentation sent to RCS

Paperwork received and audited by RCS

Reimbursement and corporate card trx entered and successfully matched by RCS

Payment created and expense posted to GL

Payment sent to employee based on Payroll set-up and to corporate card vendor

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Committed Funds Dashboard

DescriptionThe Committed Funds dashboard is used to track open purchasing/invoice activity that has been approved for purchase but not yet posted to the General Ledger.

Business Questions Answered

How much funding do I really have left to spend? When you look at a GL report and see you have a remaining budget of $2000 you may not have the complete picture. The committed funds dashboard will display outstanding commitments. If you have $500 in committed funds then what you really have left to spend is $1500 ($2000 remaining budget on GL report less $500 in open commitments).

What open POs do I have? This is useful if you are:

Looking to close a grant and want to confirm all activity has been accounted

Looking to identify POs no longer needed and may be closed (see Appendix for close process)

How much do I need to accrue? The committed funds report can identify where you have received goods/services, but have not been invoiced and therefore should accrue.

What invoices am I missing? You can use this dashboard to identify where goods/services have been received, but an invoice has not yet been processed by Central AP (vendor never billed Harvard, invoice got lost in transit etc). If a transaction appears on this report that you believe was submitted then you may want to do some research.

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Committed Funds Dashboard

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Committed Funds Dashboard

FiltersThe Committed Funds dashboard only displays PO lines with an Open status. Once a PO line has been closed, it falls off of this dashboard

Output Columns

ColumnDefinitionColumnDefinitionTubFirst segment of the 33-digit codingVendor NameSupplier from whom the purchase was made OrgSecond segment of the 33-digit codingVendor SiteVendors can have multiple sites. This is the one associated with purchase.ObjectThird segment of the 33-digit codingTypeThe application purchase was made, such as Market Place, Web Reimbursement, etc.FundFourth segment of the 33-digit codingItem DescriptionMarket place description from Sciquest. For all other types it is a free from field.ActivityFifth segment of the 33-digit codingPO Line AmountPO Line Amount is the Quantity * Unit Price * Distribution % of account code of an item.Sub-ActivitySixth segment of the 33-digit codingPosted Invoice AmountPortion of the PO Line amount that has posted to the GL for the 33-digit code distribution. RootSeventh segment of the 33-digit codingOpen Commitment AmountPortion of PO Line amount open and not posted to the GL. Calculation of PO Line less Posted Invoice Amt.PO NumberSystem number generated when a purchase is Final Approved (can be for non-POs reimbursements etc..)Unposted AmountThe Unposted Amount is where an invoice has been processed and matched but is unaccounted, likely due holdsPreparerPerson who logged into Oracle EBS and created the Requisition Quantity OrderedThe number of a given item ordered. It is the Quantity Order * Distribution % for account code. PO Creation DateThe date the Requisition was Final Approved and a PO # generated.Quantity ReceivedThe number of ordered items that have been received. Quantity Received * Distribution % PO Line #Individual line item number of a PO purchaseQuantity CancelledThe number of ordered items that have been cancelled.Vendor NumberHarvard assigned value for supplierQuantity BilledQuantity Billed is the quantity indicated on the invoice. Quantity Billed * Distribution % for account code.

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Committed Funds Dashboard

System and Process Challenges

Purchase orders close when:

Quantity billed equals or exceeds quantity ordered (two-way matching), or

Quantity ordered is less than or equal to quantity received and quantity received is less than or equal to quantity billed

Because the committed funds dashboard only pulls open PO lines there are occasions where the PO is closed, but the invoice is on hold. These transactions do not appear on the committed funds AND are not posted to the GL.

It is important to review transactions on hold to have an accurate fund balance.

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Committed Funds Dashboard

System and Process Challenges

Unspent balances Open POs with small dollar balances users do not intend to further spend against create noise on the dashboard. Examples include BCD travel balances, payments made in foreign currency due to exchange rate variances and FedEx shipment variations due to actual weight. These transactions may result in small remaining balances on the CFR if actual costs vs. approved PO differ. In order to have these balances not appear on the committed funds dashboard the PO must be manually closed by Central AP (see Appendix for PO close process).

Kick-outs Invoices that CANNOT be entered against the PO.Because these invoices cannot be entered into the system, they do not appear on the CFR or any other report. Reasons the invoice cannot be entered include:

The PO was closed

There wasnt enough funds on the PO

The items dont match in a way that allows the AP Invoice Processor to line up the items with the PO

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Vendor Invoice Detail Dashboard

DescriptionThe Vendor Detail dashboard is used to review matched payables activity that has posted to the General Ledger.

Business Questions Answered

Do we have a relationship with a particular vendor? This dashboard can be used to see all past activity with a specific vendor for tub(s) you have access to. You can use this to review when you last did business with the vendor, whats your overall spend with the vendor etc

Has the vendor cashed the check? This is useful if you receive a call from a vendor stating they were not paid. You can review the payment status to determine if the check has been issued, cashed etc

What payables activity has been posted to the GL? This dashboard will show you details of all payables activity that has been posted to the GL.

Has something escheatable already been paid? This dashboard is useful for researching escheatable payments to determine if another payment was issued for the same amount using a different PO/payment number.

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Vendor Detail Dashboard

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Vendor Invoice Detail Dashboard

Output Columns

ColumnDefinitionColumnDefinitionVendor NameSupplier from whom purchase was madeSub-ActivitySixth segment of the 33-digit codingVendor NumberSystem generated number to uniquely identify a VendorRootSeventh segment of the 33-digit codingInvoice NumberSupplier generated number corresponding to the purchaseInvoice AmountThe total amount of the Invoice Distribution LineInvoice DateDate printed on the Vendor invoice, or via electronic feedsDiscount TakenDiscount taken based on the Terms of the Vendor taken at the time of paymentGL DateThe accounting period dateNet AmountInvoice Amount less the Discount TakenPeriod NameThe GL Period in which the Invoice was accounted forCheck StatusStatus of the check with the bank. Shows if the check was cashed by the vendor, or is still outstanding. TubFirst segment of the 33-digit codingPO NumberSystem number generated when a purchase is initiated.OrgSecond segment of the 33-digit codingCheck DateDate the check is issued. The date the check is issued is based on Vendor Terms, i.e. Net 30.ObjectThird segment of the 33-digit codingCheck NumberSystem generated number attributed to the payment. Multiple payments are often associated with one check number.FundFourth segment of the 33-digit codingCheck Cleared DateDate the check clears the bank accountActivityFifth segment of the 33-digit coding

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Vendor Invoice Detail Dashboard

Understanding Data on the Dashboard

Its important to be aware that if something appears on the Vendor Detail dashboard it does not mean a check has been mailed to a vendor. It means that it has been scheduled for payment. Many of our vendors are on terms of net/30 which means a check is not cut until 30 days after the invoice date.

The Check Status column on the dashboard displays the different types of check statuses. They include:

Negotiable check has been cut, but not cashed

Reconciled Unaccounted pre-R12 payment has cleared the bank account no longer used

Cleared but Unaccounted funds were electronically initiated into suppliers bank account through EFT Vendor (i.e. Paymode)

Reconciled payment has cleared the bank account

Voided check has been voided or payment stopped

Null check has not been issued yet

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Understanding General Ledger Posting Activity

Payables activity posts to the General Ledger when the invoice is successfully matched and approved not necessarily when the vendor is paid

On a nightly basis, accounting entries are posted to the General Ledger and will appear on the detail listing the morning after the invoice is successfully matched

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Escheat Unclaimed Checks

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Escheat Unclaimed Checks

According to Massachusetts Abandoned Property Law, any uncashed check that has been inactive for more than 3 years is declared abandoned and turned over to the State Treasury.

Due Diligence: Escheat Due Diligence letters need to be issued (for all checks >$100) notifying the vendor/individual of their uncashed check within 60 days of being turned over to the state every October 30th.

Is check due to the vendor/individual?

Has every possible attempt to notify the vendor or individual?

Is the correct address on file?

Issue send them a replacement check

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Escheat Dashboard

DescriptionThe State of Massachusetts requires Harvard University to make an effort to contact vendors that have not cashed checks that were sent to them. This dashboard shows a list of uncashed checks. It contains data needed by local units to perform due diligence research on checks that have been outstanding (uncashed) for more than 6 months.

Business Questions Answered

Does my department have uncashed checks in Escheatable status? This dashboard can be used to view all checks for your tub-org that are designated as escheatable

Does my department have uncashed checks aged 6 months and older?

Does my department need to send any Escheat Due Diligence Letters this month?

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Escheat Dashboard

Escheat Statuses

blank Check is older than 6 months and was never cashed but not yet escheatable. Checks with this status are added continuously to the report. It is recommended that due diligence process begins on these checks by the issuing department

ReIssued a request has been made to reissue the check to a known correct address.

Not Due Vendor/ Redeposit - a request has been made to re-deposit the check to a 33-digit code. Usually this is the result of services cancelled or duplicate payments.

Escheatable Check is deemed escheatable (due to be turned over to the state). Thisstatus is given at the start of every FY (roughly July 1) to uncashed check(s) in the report. By state law, attempts must be made to contact the owner of the check before it is turned over to the state.

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Escheat Dashboard

Output Columns

ColumnDefinitionColumnDefinitionVendor NameSupplier check was issued toOrgSecond segment of the 33-digit codingEscheat StatusEscheat status (see prior slide for definition of values)ObjectThird segment of the 33-digit codingCheck NumberSystem generated number attributed to the payment. Multiple payments are often associated with one check number.FundFourth segment of the 33-digit codingCheck DateDate the check was issued to vendorActivityFifth segment of the 33-digit codingCheck AmountTotal amount of the checkSub-ActivitySixth segment of the 33-digit codingInvoice NumberSupplier generated number corresponding to the purchase. Number is unique to supplier, but different suppliers can have the same invoice number RootSeventh segment of the 33-digit codingTubFirst segment of the 33-digit codingInvoice Line AmountThe total amount of the Invoice Distribution Line

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Painpoint in Current Process and Recommendation

Today there are two primary painpoints with reporting

Committed Funds dashboard does not display ALL open commitments. If the PO is closed, but the invoice is on hold it does not display.

Users have visibility into only 3 of the many hold types and have to run 3 separate reports within Oracle

Recommendation

As part of MFR we create a single holds report that will provide users visibility into all holds. This will allow them to get at the gap in the committed funds.

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Appendix

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OBI Tips and Tricks

Search a Dialog Box for "Double-column" Prompts

"Double-column" prompts are created for values that have a code and a description (vendor, chart values). Some users may be more familiar with a value code, while others are more comfortable seeing the description. This feature allows users to see and choose from both in the same drop-down list of values.

Searching on Vendor Name

When using the search box to search on the description you must remember to select the "Contains" option rather than leaving the default of "Starts". In this example, since the list of values "Starts" with the Vendor ID, if the user searches on the vendor name and does not change to contains, no results will be returned.

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How to Cancel or Close a Purchase Order

If you no longer need a Purchase Order / Reimbursement or do not plan to spend any more against a PO (and want it off of the Committed Funds) you can request that a PO be cancelled or closed

Whats the difference between cancel and close?

Close no longer expect further activity on a PO (initiated a return and do not expect a replacement; PO was created based on an estimate and there is a balance on the committed funds report; recurring services no longer needed)

Cancel irrevocable and no invoices may be processed against it. This is generally used when the PO was created in error (wrong vendor selected, decided you do not need order etc).

To request cancel/close e-mail ap_customerservice @harvard.edu

AP Customer Service cannot cancel/close an order if there is:

unpaid goods/services received against the order

pending change order

You must first correct the receipt or accept the change

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Holds Process

In order for vendors to be paid timely, it is important that administrators involved in the procure-to-pay lifecycle closely monitor invoices on hold and address holds as quickly as possible

Hold Types there are many reasons invoices go on hold and the notification and resolution process vary based on the type of hold.

Some holds, users will receive a system generated e-mail 3 days that they need to take an action

Hold NameHold ReasonNotification ProcessHow to Relieve HoldMax Qty RecQuantity billed is more than the quantity receivedShopper receives email notification 3 days after invoice is processed and then again at 5 and 12 days if not resolved.Shopper must receive goods in HCOM or contact [email protected] about the intended action.Max TotalAmountAmount billed exceeds amount of PO.Final Approver receives email notification 3 days after invoice is processed and then again at 5 and 12 days if not resolved.Final Approver must contact [email protected] about the intended action or if applicable process a change request.Max Qty OrdQuantity billed is morethan quantity orderedFinal Approver receives email notification 3 days after invoice is processed and then again at 5 and 12 days if not resolved.Final Approver must contact [email protected] with intended action or if applicable process a change request.

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Holds Process

Invoices may be placed on a number of other holds that users do not receive a system generated e-mail on. AP will involve the requestor/approver on these hold types as appropriate.

Hold NameHold ReasonNotification ProcessHow to Relieve HoldDist AcctInvalidPO was posted to valid coding, but coding subsequently became invalidAP e-mails requestorRequestor provides AP new codingVENDORAll unprocessed invoices for supplier regardless of site are on hold. Generally a Vendor Hold is associated with Withholding TaxNoneAP removes supplier hold when appropriateAWT ERROR AP cannot perform automatic withholding of taxNoneAP needs to correct error that caused automatic withholding of tax to fail.LINE VARIANCETotal of Invoice Lines does not equal Invoice AmountNoneContact APDist VarianceInvoice amount is not equal to the sum of invoice distribution amount.NoneContact APInvoice ImportInvoice imports automatically go on hold until paperwork is receivedNoneAP removes hold when they receive all paperworkHU Local Unit RequestTub calls to request a hold for any reason.NoneAP removes hold when appropriateMA Tax HoldWhen performers 8690/ 8692 coding adds to greater than 5000 USD, a 5.25% tax may need to be applied.NoneAP determines if tax needs to be applied and releases hold when appropriateCANNOT EXECUTE ALLOCATIONGenerally occurs when freight or misc charges on an invoice are being allocatedto account coding that has been inactvated by the TubNoneContact AP at [email protected]

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