Purchase Order and Invoice Workshop Overview

Chrome River Purchase Order

• Chrome River PO includes:
• Ability to create a “PO Request”
• PO workflow and approval tools
• Purchasing specific tools (PO Management)
• Holds suppliers accountable to agreed upon terms / pricing via transmission of the PO PDF
• Enforces the use of favorable terms negotiated with preferred suppliers using Invoice / PO matching process
• Provides visibility into committed (future) spend versus (past) involved spend through ANALYTICS reports
• Makes AP’s job processing an invoice easier
• Linking a PO to an invoice copies the PO information and lines onto the invoice

What is not included in Chrome River PO

PO is a simple but powerful tool. It helps manage spend without a lot of overhead. It is not designed to managed ALL spend however, including:

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• Not an RFP or sourcing tool
• Not a Contract Management tool
• Not a Vendor Management tool (ERP is the vendor system of record)
• Cannot convert one requisition into multiple, supplier-specific Purchase Orders

Optional PO Features

• Goods Receipt Module for 3-way matching
• Do you have a receiving department who records what was received?

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• Transmit approved PO via email to vendors
• How do you currently send purchase orders to vendors?

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• Amend an approved PO
• Do you allow PO change orders?

Blanket POs

• Used to cover spend over an extended period of time
• Common Uses
• Monthly Landscaping services
• Equipment maintenance services
• Do Not Exceed Consulting service contracts
• PO structure is important
• Uses the PO Service item type
• Single PO line for the annual cost of the service
• Multiple line items for discrete time periods (e.g. January services, February services, March services)

PO Process

How we define the Procure to Pay cycle

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Initiate Requisition

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Submit Request for Approval

Process Invoice

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Invoice Entry/PO matching/Invoice Approval & Export

Goods / Services Delivered

Sourcing / Supplier Management

Spend Analysis & Management

Approved request becomes the PO

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Transmit PO to Supplier

Pay Supplier

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ERP System,

Emburse Payments,

Emburse Spend

CAPTURE / VISION

Services

PO Connector Service

PO and Invoice Priorities & Stakeholders

Procurement and Accounts Payable can have different priorities:

• AP: Post the invoice appropriately, pay on time and only what was delivered
• Procurement: Negotiate pricing and terms, manage spend, issue purchase orders

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Shared Stakeholders:

• Accounts Payable
• Procurement / Purchasing
• Requesters, Office Administrators, Receiving personnel, Approvers
• Vendors
• Finance, Budget Office

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PO is a shared process and tool. Keep all stakeholders and needs in mind.

PO Request Entry

Need to buy something from a vendor

Create PO Request

Submit Request

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Compliance & Routing rules

PO sent to Vendor

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Email , Printed, Faxed

PO Request Approved

Receiving and Matching

Receiving and Invoice Matching

PO Invoice

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Non PO Invoice

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Receiving & Invoice Matching

Invoice matching compares the Invoice and Receipt (if applicable) to the PO.

3-Way Matching using Goods Receipt

• Requires a match between the PO, Receipt, and Invoiced line item amounts and quantities (uses PO Item line type)
• The Goods Receipt module creates Receipts against line items on the PO
• Packing slips can be uploaded as images on the Goods Receipt record and are viewable by the receiver and via the PO Management screen

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Receiving and Invoice Matching

2-Way Matching with Invoice module

• Includes a match between the PO and Invoice header or line item amounts
• Approval of the INVOICE indicates that the invoiced items have been received and can be paid for

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Matched versus Unmatched Invoices

• Invoices “matched” to a PO are ready to be approved, posted, and paid and need little to no additional review.
• “Unmatched” invoices have some exception to be resolved and need to be routed for review.
• The matching process is supported via INVOICE routing rules
• Balances at the header and line item level are maintained so you can have multiple receipts and invoices referencing the same PO and track remaining quantities and amount

Receiving and Invoice Matching

Matched Invoice

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Search and link PO to Invoice

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Matched by line amount

Receiving and Invoice Matching

Unmatched Invoice – No PO dollars remaining to Invoice

Receiving & Invoice Matching

3-Way Example

Invoice Qty > Received Qty

Best Practices

PO Best Practices – User Interface

• New Item Types for PO and Invoice:
• PO Service - for services and blankets
• PO Item – for goods
• PO Freight – for planned freight
• The same Item Types must exist within PO and Invoice for PO related expenses.
• Fields required to process a PO Invoice need to exist on both the PO and Invoice forms

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• PO Form Includes:
• Requester
• Ship To and Bill To addresses
• Terms and Conditions

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PO Best Practices – PO Compliance

Best Practice PO Compliance rules:

• Ensure a vendor is identified
• Ensure lines exist to describe what is being requested / purchased
• Ensure the header amount matches the sum of all lines
• Ensure quantity * unit price match the line amount
• Set a minimum dollar threshold for use of a PO
• Identifies the requestor / authorized by person

PO Best Practices – PO Routing

Best Practice PO Routing rules:

• If creator is not the requester, route to the requester
• If a new Vendor or Vendor address is identified, route to APNewVendor
• Route to the requester’s supervisor or a budget owner
• If the PO Total exceeds $X, route to Controller or CFO
• Route to AP
• Route to Procurement

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PO Best Practices – Invoice Rules

• Our invoice rule sheets will go through best practice options on how to handle Purchase Order and Goods Receivable matching with an invoice for the following scenarios and how to handle resolving
• 3-way mismatch
• Unit Price (with or without tolerance)
• Open to Invoice Quantity (with or without tolerance)
• Extended Amount (with or without tolerance)
• 2-way mismatch
• Line Item Amount (with or without tolerance)
• Line on Invoice not on PO

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PO Best Practices – Invoice Rules

Best Practice Invoice Compliance Rules for PO matched Invoices:

• Ensures the invoice is flagged if the invoiced quantity is greater than remaining PO quantity
• Ensures PO is attached (linked) on all PO item types

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Invoice Routing Rules associated for PO matched Invoices:

• If a PO is attached and the invoice is outside a 10% tolerance (unit price, line amount) to account for sales tax / unplanned freight, route to Procurement
• If a PO is attached and the invoice is outside a 10% tolerance (quantity received), route to Procurement
• Route to APInvReview
• Skip all other invoice routing rules if PO is attached

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Humanize Work