AP Evaluated Receipts Settlement

• Overview
• ERS Controls
• ERS Supplier Maintenance
• ERS Document Codes
• ERS Receipts and Returns
• ERS Tax and Matching Considerations

Overview

Evaluated Receipt Settlement allows you to set up an agreement with a supplier for the supply of goods and to have those goods automatically invoiced on receipt against an ERS order.  When orders are created and goods received, the pricing on the order and the quantity received will be used as the basis, along with other core data, to create the invoice. This is a time and cost effective option for both parties. Benefits to be gained using ERS include:

• Invoices no longer have to be generated
• No mail, fax, electronic transmission costs or time incurred
• No data entry of invoices required
• Price and Quantity mismatches are removed from the equation
• Because there are no delays in getting the invoice record created after receipt all prompt payment discounts can be taken.

When you use ERS, there are a number of control settings required to govern its use. These settings help ensure that document codes are not created if ERS is not allowed for the company, as well as ensuring that Orders are not created with ERS document codes if the Supplier is not flagged for ERS.

If the document code is set for use in ERS on an order, when goods are received for that order, the system will automatically generate an AP invoice for those goods using the quantity received, the price(s) from the order and other data from the Order and the Supplier.

Similarly, when returns are entered against an order that has an ERS document code, the system can automatically generate a credit note for the return if controls are set for that functionality.

ERS Controls

On the Common Purchasing Company Controls screen (MPAB) you must set the ERS control on to indicate that ERS is to be used. If you set this flag on, and then later switch it off again, then the system will check that no Suppliers have ERS processing set on before allowing the change. You can optionally also set the system here to also generate a Credit Note for any ERS related returns.

You may optionally also specify a particular Invoice sub type to be used when generating Invoices automatically from an ERS Order. If you do so, then the sub type must be valid for type 1 (Invoice) transaction types. If you do not set a sub type here, then the system will use the default of sub type 00.

Invoice Creation Method

You must specify an Invoice Creation Method to determine how the system will generate invoices for receipts. The options are:

0 – By GRN (the default setting)

1 – By GRN (combined)  

2 – By Advice Note (combined).

Invoice Number Generation

You must also specify how you wish Invoice numbers to be generated by the system. The control can take the following values:

• System Generated (the default) - The system will use the receipt date from the GRN and a sequential number. The date format to be used in the invoice number will be YYYYMMDD. The sequential numbering will be generated by date within supplier starting with 0001 and incrementing by 1.
• Advice Note - The system will use the Advice note and generate an invoice per advice note entered.
• Prefix - the system will use a user defined Prefix from Common Purchasing Company Controls and a sequential suffix starting with 0000000001. You can optionally choose a new starting number for this sequence by amending the field on company controls.

1. • NOTE If the invoice creation flag is set to 1 (GRN)
     then the invoice number generation flag can be set to 1 (System Generated) or 2 (Advice Note).

   NOTE If the invoice creation flag is set to 2 (Advice Notes Combined)
   then the invoice number generation flag must be set to 2 (Advice Note).

Credit Note Controls

If you have opted to automatically create Credit notes, then you can set controls for the generation of Credit Notes that mirror those for Invoices. For control settings, refer to those for invoices above. Note that automatic Credit note numbers will contain the suffix CR.

ERS Supplier Maintenance

Once you have ERS company controls defined, you can then flag individual suppliers as ERS suppliers. The ERS control is set off by default. If set on, then the controls governing Invoice generation and numbering must also be set. The settings for these controls will default to those set at the company level.

Refer to ERS Controls for more information on these settings.

If Credit Notes are to be automatically generated, then these controls will also default from the company level and can be overridden for specific suppliers.

You can optionally elect to print a VAT invoice for generated ERS invoices.  If you do so, then the existing Supplier controls for Document Format and Transmission Mechanism will be used to determine the type of output produced for VAT Invoices.

ERS  Document Codes

In order to generate ERS orders, you will need to create a document code for use in generating them. This is done by setting the ERS control on for a document code. You can only do this when the relevant company control settings have been put in place.

Note that when you specify that a document code is to be used fror ERS processing, the following controls must also be set as specified below:

• Price Mandatory - Set on.  
• Auto GRN from Invoice flag - Set off.

Documents created using an ERS document code can only be assigned to a supplier that is also set for ERS processing.

ERS Receipts and Returns

Receiving Goods

When goods are received (online or background) for an ERS order the system will automatically create an ERS invoice (Transaction Type 1 with sub-type from Common Purchasing Company Controls) using information from several sources.

Invoice creation is determined by the controls you set for the Invoice Creation Method defined on the Supplier. Once the invoice is created, the system will automatically perform the invoice match function, either using the ERS invoice file as input into GB9 or via a new process triggered from the online receipt function.

Returns

When goods are returned (online or background) for an ERS order, the system will automatically create an ERS Credit Note (Transaction Type 2 with sub-type from Common Purchasing Company Controls) using information from several sources.

Credit Note creation is determined by the controls you set for Credit Note Creation Method defined on the Supplier. Once the credit note is created, the system will automatically perform the invoice match function either using the ERS invoice/credit note file as input into GB9 or by a new process triggered from the online return.

ERS Tax and Matching Considerations

VAT Invoice Production

If you choose to flag VAT Invoices as Required on the Supplier Purchasing Controls, then the system will produce VAT Invoices and VAT Credit Notes for the supplier when VAT invoices and credits are created from receipts and returns.

Online Invoice Matching

In the unlikely event that an ERS fails to generate, or a manual invoice is generated to be matched to an ERS order, then standard invoice order matching rules will apply.

See also

Accounts Payable Home Page