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10/19/2017
Using XA to Match Purchase Orders, Receiving Documents, & Invoices
(Session 222 / 3-way match)
Rick Altenau
Guide Technologies, LLC
513-218-7286
Agenda
• What is 3-way Match
• How does this work within XA?
• Enterprise Financials?
• International Financial Management?
• Accounting Management?
• Implementing 3-way Match
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• Three-way match refers to coordinating three documents:
• Purchase order that was prepared by the organization.
• Receiving report/transactions that was prepared by the organization.
• Vendor's invoice which was received and will become part of an organization's accounts payable if approved.
What is 3-way Match?
All Financial Systems work with 3-way Match
This presentation will use several screens as examples.
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3-Way Match with XA
Controlled by Purchasing
A/P Interface from Purchasing
Procurement
Management
Enterprise
Financials
International
Financial
Management
Accounting
Management
• Control Points for 3-way matching are all found in Procurement Management
• Procurement works with all three financial systems
• Responsibility for Purchase Order controls falls on the Buyer
• A PO is a contract:
• I will buy, You will sell, You will bill, I will pay
• The Buyer is responsible for the PO from the time it is created through to its completion and purge.
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Typical Purchasing Process
Purchase
Order
Creation
Dock to
Stock
Invoice
Receipt
Account
Payable
Entry
Cash
Disbursement
Purchase
Order may be
closed here.
“Complete”
the Material
“Complete”
the Payments
Goal of Accounts Payable / Purchasing Interface
• Electronic three-way matching of:
• Purchase orders
• Purchase receipts
• Vendor invoice
• Purchase order will not close until payment is made.
• Purchase Price Variance calculated.
• Automatic A/P vouchers from the Invoice Proof & Post process.
• Ease of entry for vendor invoices.
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Key Item Revision / Warehouse Fields
• Inventory Codes (inventory, miscellaneous, and service)
• Account Number
• Purchase Price
• Receipt Required (always on for inventory code 1)
• Receipt Tolerance Percentage
• Inspect on Receipt
• Stocking / Purchase Unit of Measure
XA Procurement Application Settings
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• Accounts Payable has received an invoice
• Entry into the systems requires fields from the invoice to match to PO and provide new information:
• Invoice Number
• Purchase Order Number
• Total Value of Invoice
• Special Charges not on Purchase Order:
• Freight
• Taxes
• Etc.
• Optional capabilities (Goods Received Notes, etc.) are also available
Typical Invoice Processes
• The Purchase Order is retrieved
• The receipts against that PO are calculated
• The payable is created from the PO
• Entire PO
• Selections
• Manually entered
• Calculated value compares to entered value.
System Develops the Payable
OK… this is overly simplified, but this is the logic
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The Matching Process
• Verify valid purchase order
• Verify item invoiced is on the order
• Verify quantity invoice=quantity received
• Verify quantity not previously paid
Vendor
Invoice
Invoice HEADER Entry: 1
• “Auto Gen”: Auto Creation of Invoice Entries
• Y = Match Invoice to PO Amounts
• N = Enter Invoice Values
• (Includes Freight and Spec Charges)
• Completion Codes
• C = Complete, P = Partial, X = NC
• Voucher Number: Tailoring Option
• Invoice Sequence number: for Multiple PO’s
• Tax: Not “Extended Tax” Facility
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Invoice HEADER Entry: 2
• Displays Details of Invoice Entry(From Prior Display and Database)
• Full, Net, and Discount Amounts
• Support for Overrides and Options
• Foreign Currency
• Landed Cost
• Halt Codes (User Procedure / Definition)
Tax / Freight / Sp.Chg
Expense Accounts can be split into multiple accounts or prorated across all invoice entries.
Default to Tailoring Value
Default to Tailoring Value
Required entry - no default
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Common Issues & Problems
• Completion codes, incomplete orders, and lack of correct data at the right time.
• Quantity received is zero.
• Sequence numbers improperly posted
• Blanket releases.
• PO price not equal invoice price.
• All PO’s not on system.
• All receipts not in system.
• Timely & accurate inventory transactions.
• Un-identified sequence numbers.
• Halt codes.
Researching Invoices
• Should the invoice be entered yet?
• If your company will not voucher an invoice unless the material ordered has been received, then the purpose of the matching process was to determine if the vouchering process should even be attempted. There are multiple methods of determining this:
• List Windows / Workbenches of POs, PO Items & Blankets, Scheduled Receipts
• Attempted entry will indicate if the item has been received.
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Receiving
Arrival Identify Unload Count
Instructions Move QC Move Stock
The purchase receipt transaction is a requirement for all items.
• Are all PO’s entered in the system?
• Are all receipts recorded in the XA?
• Do we receive in multiple locations?
• Are receipts accurate and timely?
• Are blanket PO sequence numbers identified?
Receiving Transaction Entry
Transactions:
VA Vendor Accept.
• Changes status code of purchase order to show vendor acknowledgment. No impact to accounts payable.
RD Receipt To Dock.
• Changes the status code of the order and displays a quantity at the dock.
RI Receipt To Inspection.
• Changes the status code of the order and displays a quantity in inspection.
RP / PQ Receipt To Stock.
• Changes the status code of the order. Increases the quantity on hand, decreases the quantity on order.
VR Returns Items To Vendor.
• Used for creating a debit memo.
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Receiving Transaction Entry
Creating an AP Invoice from the Receipt
(eFinancials)
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Implementing 3-Way Match
A Team Approach
• The theory behind 3-way match is fairly simple
• Implementing this looks easy
• “The devil is in the details”
• Create a plan, and involve the correct people. This should not be turned on by AP for “ease of entry”
• Do not correct data created by other departments. The issue will never get corrected.
Implementing 3-way match
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• Many customers have activated this function without knowledge of ramifications
• How many POs exist in your open PO file?
• Who is responsible to make sure orders are closed?
• What audits are in place to verify the process?
• Do we contact vendors if we receive material without an invoice?
Cleaning up POs
Standardize your Receiving Transactions
Activities to be Accommodated
• Standard/Basic Procedure
• Inspection / QC Needs
• Variable By Item
• Dock to “Available”
THIS SIDE UP
Instrutions Move QC Move Stock
THIS SIDE UP
Arrival Identify Unload Count
ING CO.N. USA
TRMIS
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Determine paperwork and audit requirements
• Lots of paperwork typically associated with AP
• Copy of Purchase Order
• Bill of Lading(s)
• Receivers
• Vouchers
• Invoices
• Freight Bills
• Cash Disbursements (checks)
• How can you go paperless?
• Document Management
• Filing PDFs
• Source of documents
• Develop a team from three departments
• Use a test environment to enter a batch of AP
• Work together to find sources of problems
• Correct the processes that have been identified
• Repeat the process until you are comfortable to go live
Run a Test
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• Know that mistakes will occur
• Work the problems.
• Track the progress (metrics)
• Keep the database clean
• This is a starting line, there is no finish line. This is a new business process.
Go Live
Agenda
• What is 3-way Match
• How does this work within XA?
• Enterprise Financials?
• International Financial Management?
• Accounting Management?
• Implementing 3-way Match
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10/19/2017
(Session 222 / 3-way match)
Rick Altenau, CPIM, CIRM (Guide Technologies, LLC)
(513) 218-7286
