Mystery Solved: Pay on ReceiptMystery Solved: Pay on Receipt

Melissa Sider

DARC Corporation

About YouAbout You

• Current Pay on Receipt users?

• Planning to implement POR?

• Just curious about it?

ObjectivesObjectives

• Introduce Pay on Receipt

• Identify Set Up Requirements

• Discuss Benefits and Features

What is Pay on Receipt?What is Pay on Receipt?

• Oracle Purchasing Function

• Integrates to Payables

• Enables Automatic Creation of Invoices

• Based on Receiving Transactions

• Use Receipt and PO Data

• Matching Rules ensure proper payment

A.K.A. Pay on ReceiptA.K.A. Pay on Receipt

• This feature is alternately known in Oracle User Guides as:

– Evaluated Receipt Settlement (ERS)

– Payment on Receipt (POR)

– Self-Billing Invoices (SBI)

How does it work?How does it work?

• Receipt transactions trigger invoice creation

– Receipt

– Delivery

– Advance Shipment Notice

– Advance Shipment and Billing Notice

How does it work?How does it work?

• Depending on your business needs, you can use Pay on Receipt to automatically create invoices for:

– All your vendors; or

– Select vendors; or

– Select Purchase Orders

How does it work?How does it work?

• Invoices are generated by running the Pay on Receipt AutoInvoice and Payables Open Interface Import processes.

• Invoices move normally through Approval and Payment processes.

• Process Returns with automatic Debit Memos that are matched to the original Purchase Order.

How does it work?How does it work?

• Invoices are consolidated at one of the following levels:

– Packing Slip – Triggers one invoice per packing slip

– Receipt – Triggers one invoice per receipt

– Supplier Pay Site – Triggers one invoice per supplier pay site

How Invoices are BuiltHow Invoices are Built

• Invoice Amount = Quantity Received X Purchase Order Item Unit Price

• Payment Terms –Default from the Purchase Order Payment Terms or from Supplier Site Payment Terms

• Tax– Based on the tax code in PO Shipment or the Default Tax Hierarchy in Payables.

How Invoices are BuiltHow Invoices are Built

The invoice number is created in the following format ’ERS’–<X>–<Seq#> where:– ERS is the default prefix for Pay On Receipt invoices

or any prefix specified in the profile option PO: ERS Invoice Number

– X depends on the summary level:• if summary level = Pay Site then X = Invoice Date

• if summary level = Packing Slip then X = Packing Slip Number

• if summary level = Receipt then X = Receipt Number

– Seq# is a unique system generated number.

Pay on Receipt BenefitsPay on Receipt Benefits

• Pay on Receipt offers the following benefits:– Reduce or eliminate paperwork associated with invoice

payment processes

– Reduce the risk of manual data entry errors

– Avoid duplicate entry of invoices

– Ensure that invoices are entered into the system in a timely manner

Setting Up Pay on ReceiptSetting Up Pay on Receipt

• PO: ERS Aging Period

• PO: ERS Invoice Number Prefix

The Pay on Receipt Process

The Pay on Receipt Process Supplier

$ $$

Purchasing

ReceivingQuality AssuranceInventory

Supply BaseManager

Sets Supplier Optionsfor Pay on Receipt

Creates Purchase Orderusing POR Supplier

Ships Goods

Receives GoodsInspects Goods

Goods Deliveredto Inventory

Goods Returnedto Supplier

$

$

Accounts Payable

Invoice Created viaAutoInvoice Process

RTS

Debit Memo Created

Pay to $

Payment to Supplier

Set Up Supplier SBISet Up Supplier SBI

Set Up Supplier CurrencySet Up Supplier Currency

Create Purchase OrdersCreate Purchase Orders

Run POR AutoInvoice Run POR AutoInvoice

Using Payables BatchingUsing Payables Batching

• Pay on Receipt supports AP Batching

• Invoice Count and Total are automatically calculated

Handling ErrorsHandling Errors

• Two reports assist in identifying and solving errors:

– Purchasing Interface Errors Report

– Payables Open Interface Report

TaxTax

• Set up Supplier Site with Automatic Tax Calculation at Line or Tax level

• Tax values inherited from Tax Codes (PO Shipment) or Default Tax Hierarchy

• Tax is calculated at Invoice Approval or manually in the Distributions window

Different Purchasing and Pay SitesDifferent Purchasing and Pay Sites

• Set up both sites for Pay on Receipt

• Indicate Pay Site as Alternate Site in the Purchasing Site Self-Billing Region

Return to SuppliersReturn to Suppliers

• Select Create Debit Memo from RTS Transaction checkbox in the Supplier Sites window.

• Ensure the Create Debit Memo option is selected in the Returns window.

Invoice InquiryInvoice Inquiry

• Use the ERS Invoice Number Prefix as a starting point for searches

ConclusionConclusion

• Easy to set up and use

• Reduces paper consumption

• Reduces manual entry of invoices

• Test completely in safe environment

• Use aliases to search for information in PO and AP User Guides

Q & AQ & A

msider@darc.com