MIDWEST USER GROUP ALMOST PAPERLESS PAYABLES

1. MIDWEST USER GROUPALMOST PAPERLESS PAYABLES

2. Session Goals • Reduce paper to minimum • Reduce time matching paper, filing • Increase integrity of AP transactions • Increase timeliness of transaction entry • Increase cash flow with timely credit processing

3. External Control • Company Policy: • Authorization levels based on MRP, FA, expenses. • Evidence required on PO’s, packing slips, invoices. • Discount policy, return policy, return documentation. • When POs are required. • Competitive bidding process. • Separation of Duties: • Purchasing, receiving, vouching, payment • Safeguard assets – custody and check numbering

4. Internal – Security • Transaction Security • Supplier set up • Inventory/administrative • Remit to addresses • Separation of Duties supported by screen security • Entity security for multiple Entity database

5. Internal – APCF View

6. Internal - APCF • Enter Voucher confirmed Y/N • Yes – JE created and voucher can be paid. • No – JE not created. Can not access voucher trailer field to confirm after voucher complete. Must run voucher confirm automatic or manual. • Set to Yes. At voucher entry, override to no to keep data entry when matching errors or authorization necessary. • External voucher reference allowed Y/N • No. Business need to manually number vouchers?

7. Internal – APCF - cont • Use assigned to field Y/N • Yes is mandatory. • No – assigned to field can still be used to “log out” invoices for variance approval or authorization. • Release recurring voucher confirmed Y/N • Works the same as Enter Voucher confirmed. • Consider using Recurring vouchers to record monthly bills at budget, release unconfirmed, update and confirm when invoice received. Accrual based on unconfirmed report.

8. Internal - APCF - cont • ERS Update GL Average Cost Y/N • Defaults to ERS Maintenance, update average cost yes or no based on voucher amounts. • ERS Voucher Date Option (invoice date not eff) • 0 – receipt date • 1 – shipment date • Select based on payment terms calculation desired

9. Internal – APCF - cont • ERS Packing Slip Error Y/N • Packing slip number is used as invoice number • Yes – print error message if packing slip # is blank – must manually vouch; or un-receive and re-receive with packing list (must manually vouch offsetting blank receivers) • No – receiver ID used as voucher number. Update to invoice number in voucher maintenance.

10. Internal – POCF View

11. Internal - POCF • Receiver Type – print option • 0 – No print. This is option for “paperless payables”. • 1 – Print each PO/shipment. • 2 – Print for each item/shipment. Consider using if receipts to receiving floor then transfer to random put away location. • Receiving Tolerances: • Tolerance percent – units and tolerance cost • Hard stop in receiving if over either • Set at levels that would trigger return to supplier

12. Internal - POCF • ERS Processing Y/N • Yes – ERS enabled. Pop up window appears on PO’s, Blanket Orders, and Scheduled Orders – header and lines. • If Yes the first time through POCF, pop-up prods to run initial set up. If no, must run 36.25.61, or type uxers.p in menu line prior to using. • ERS Option (value defaults to popup window on order header, can be changed) • Blank – ERS line setting determined based on ERS maintenance setting at time of PO entry. • 0 – ERS line setting determined based on ERS maintenance setting when ERS processor run. • 1 – ERS processing does not occur.

13. View Banks

14. Banks • Bank set up represents more than bank account: • Check numbering sequence – create bank code for each unique sequence. • Currency other than base – create bank code for each separate currency and maintain GL account in that currency. • Unique processes – ie: wire transfers – create bank for wires and record wire as manual check. Automatic check selection is by bank. • Bank defaults from APCF to supplier record. Can override on supplier. Defaults to voucher header, where it can be overridden.

15. Credit Terms • Credit terms – code with meaning for automatic check selection and lookup. • N for net terms (N30), discount (21030), specific days (N10T – Net 10th) • Set up discount and due days for aging. Use check selection to alter selection to pay late, always take discount. • Entered on supplier. Defaults to PO and then voucher, where it can be overridden. • Can change terms code on a voucher if not selected on check. Must clear out discount and final payment dates to recalculate.

16. Use Tax • Item purchases: • Product line tax flag defaults to item and can be changed. • Both item and supplier must be taxable Yes to invoke tax. • Miscellaneous purchases: • Supplier must be taxable Yes to invoke tax. • Tax flag default: • Items must be taxable for sales tax calculation. • Use supplier tax flag to indicate use tax. • Defaults from supplier to PO and voucher, where it can be overridden.

17. View Supplier Set Up

18. Supplier Set Up • Multiple ownership of supplier data. • Supplier is PO address. • Use supplier add sheet with routing. • Supplier type facilitates reporting and check selection for AP. • Purchasing owns supplier set up – even for admin suppliers. • Set up misc creditor to process one time admin charges. • Purchases account on supplier should be suspense account unless absolute single GL coding. • Terms are part of supplier negotiation. Co policy regarding terms? IE: always take disc, pay monthly, net 45?

19. Remit To Set Up • AP owns remit to set up. • Remit to is address only. • Numbering – make remit to number base of supplier number. • MFG/PRO does not support tiered supplier (like customer). If multiple suppliers have one remit to • create one remit to address. Link all suppliers to that address. Checks will be cut based on supplier. • If there is a need to move invoices or credit balances between suppliers, change supplier on the voucher prior to selecting for payment.

20. View PO Lines

21. Inventory Purchases • Requirements driven by MRP or manually. • Inventory usually not taxable (item tax Y, supplier N). • GL coding defaults from product line (accessed in single line mode). Even if manually override, MFG/PRO recognizes inventory, uses product line inventory/AP receipts accounts. • The AP voucher account on the trailer defaults from the supplier. This must not be overridden. • PO price from price list, supplier xref, or manually entered. If nothing found, defaults to standard material cost.

22. Memo Inventory Transactions • Non-inventory purchase of inventory item, or correction. • Taxable if purchased for internal use, not if correction. • GL coding defaults from the product line – purchases account. This should be a suspense account requiring entry of correct account. • AP receipts account defaults from the SACF – expense purchases. • The AP voucher account on the trailer defaults from the supplier and must not be overridden. • PO prices default same as though inventory.

23. Memo Purchases • Purchases of supplies & services. • Usually taxable. Supplier is taxable. • GL coding defaults from the supplier purchases account. This should be suspense account, requiring entry of correct GL account. • AP receipts account defaults from the SACF – expense purchases. • The AP voucher account on the trailer defaults from the supplier and must not be overridden. • PO price must be manually entered.

24. Purchase Order Corrections • Purchase orders must be corrected when: • Tax flag is not correct. • PO prices are incorrect. Determined from: • PPV review. • AP rate variance. • Correct even if PO is complete – can return against a PO, want history correct.

25. Purchasing Responsibilities • Supplier Master • Supplier approval process, documentation. • Supplier master add routed, fields entered correctly. • Supplier contact, price/quantity issues, return authorization. • Purchase Orders • Maintain physical file, proper authorization. • Correct pricing, GL coding, sales taxability. • PO clean up. • PPV and APV (rate) • Monitor variances, update PO’s for errors.

26. View Receiving

27. Receiving Process • Verify packing list to items received, date and initial. • Enter packing list into receiving screen. • Packing list number. • Packing list date as ship date. • Verify/assure inventory locations are correct • If actual and packing list quantity are different, enter packing list quantity in that field. • If packing list is not available, direct purchasing to contact vendor to supply packing list. • If tolerance errors, notify purchasing to resolve.

28. Receiving Corrections • PO prices are incorrect • If standard cost, do not reverse receipt. Correct PO. • If Average cost, reverse receipt, correct PO, re-receive. • Quantity received is incorrect • Inventory is correct (cycle count or physical performed) • Reverse cycle count, then follow next. • Inventory is incorrect • Negative receive original, receive correct quantity • Corrections must reference original packing list, ship date, and effective date (use first of month if error in previous month)

29. Receiving Returns • Purchasing must authorize returns. • Process PO returns in Purchase Order Returns. • If supplier does not require RTV, use original packing list. • Purchasing must determine setting on return to replace flag. • Process Annual returns in RTV, or enter negative PO and process as negative receipt. • Provide return documentation to AP.

30. Receiving Responsibilities • Inventory • Ensure quantities and locations are correct. • Receiving Documentation • Maintain physical packing list file, daily receiving report. • Assure packing list documentation. • Enter one receiving transaction per PO/Packing list. • Communication (exceptions) • Purchasing - Returns, corrections, tolerance exceptions. • AP – returns, receiving corrections

31. Recurring Vouchers • Determine use for recurring vouchers • Same payee, quantity, GL over period • Quantity changes over period • Select release recurring vouchers confirmed Y/N based on requirements • Set up schedule for releasing D/W/M • Run voucher report to book unconfirmed accrual

32. Non-PO Vouchers • Enter non-PO vouchers in separate batch. • Use batch header for control. • GL default is supplier purchases account. Should be suspense account and require entry of GL data. • Verify per authorization policy. • Accrue taxes where necessary. Supplier taxable is yes, taxes not billed on invoice. • Use allocation codes for rent/util/other. Allocation is pct of total, does not include Entity. • Determine invoice numbering scheme.

33. View PO Vouchers

34. View PO Vouchers

35. View PO Vouchers

36. PO Vouchers • Enter PO vouchers in separate batch with batch total. • Reference PO even if receipt lines not matched (payment correction, prepayment). • Auto select – Yes • Selection criteria screen • Select based on packing slip • Voucher open quantity Yes – MFG/PRO fills in invoice quantity as receipt quantity, invoice cost as po cost • Select All Yes - MFG/PRO selects receipt lines (*) • Combination figures total of detail lines pulled

37. PO Vouchers - cont • Receiver selection maintenance screen • Compare selection $’s to invoice subtotal • Review to assure match with line items – select and deselect as required. • Receiver matching detail screen • Access lines as necessary to correct price or quantity • If quantity is over – opens close line Y/N. Yes forces AP usage variance. • If quantity is under – either leave line open or invoice complete and adjust on distribution screen.

38. PO Vouchers - cont • Distribution screen • If immaterial difference from receiver selection screen, write off to AP manual variance account. • If difference due to receiver matching detail to close short line, force AP usage variance line. • Trailer screen • MFG/PRO automatically holds bad variances – zero out if policy is not to hold. • If need to get invoice or variance approval, change confirmed to no, enter initials in assigned to field.

39. AP Vouching Responsibilities • Batching • Separate types into batches – PO, non-PO exps, travel • Run batch balance reports to assure compliance • AP Evidence • PO # or authorization and GL coding, voucher # on invoice • Review • Voucher GL, unconfirmed vouchers, amounts on hold. • Paper Flow • Mail – touch once, batch stmts, po invs, non po invs, misc • File vouched by batch date or supplier name • Handle problems daily

40. Charge Back Process • Supplier corrections • Change face of invoice and remit copy • Use remarks field on voucher to note peratt • Create supplier DM/CM process • Transact original completely, adjust for corrections • Supplier notification, communication • Use original packing list, PO, invoice numbers with suffix • Use GL variances from original invoice

41. Check Process • Determine monthly check cycle, payees • Run AP Aging in detail • Run Payment Selection – Automatic • If always take discount policy, select based on terms with check date over six months • Run Payment Selection – Manual • Add/remove amounts selected for checks • Print Payment Selection Register • Print Checks • Caution – if allow amounts on hold – verify prior to check cycle

42. Check Cancellation (Clear) • Reconcile Bank account daily, weekly, monthly • Cancel checks in 28.9.13 or balance bank account in Cash Book Maintenance 31.13. • If daily, weekly bank update, use PIP account • Check JE debits Voucher AP and credits PIP (outstanding checks). Clear JE debits PIP and credits cash.

43. Manual & Void Checks • Manual Checks • Consider no manuals – run system check • Manual can pay against voucher or charge GL accounts • If separate check series, create manual bank account • If same check series, timing of entry important • Void Checks • Void re-opens vouchers for payment • To cancel voucher – create negative voucher. PO details can not be selected again.

44. AP Responsibilities • Remittance Address • Cash management – terms, payment • Vouching – batch control, authorization & GL, vouched invoice file • Supplier Adjustments – timely processing of dm/cm, invoice errors, stmt recon • AP manual variance

45. View ERS Set Up

46. ERS Set Up • Selection – based on records found in ERS maintenance • First -Supplier/site/item. If no record found, • Looks for Supplier/site. If no record found, • Looks for two records: supplier/item and Site • If both records found, lower of the two ERS options used. • If supplier/item record not found, looks for supplier record. If found, lower of ERS options from supplier or site used. • If all above passed, sets ERS to 1 – no ERS. • Enabling ERS creates supplier records based 1 – no ERS (see ERS option on next page). • When setting up manually, must enter supplier or site or both.

47. ERS Set Up - cont • ERS Option • 1 – no ERS • 2 – Create unconfirmed vouchers • 3 – Create confirmed vouchers • If supplier billing and site receiving integrity create unconfirmed vouchers (2). • If supplier invoice is packing list number, create as confirmed vouchers (3). • Create records based on environment. Supplier set up as no ERS. If multi site, set up site records. Only go to item level where required.

48. ERS Set Up - cont • ERS Price List Option – shows on PO popup. Only used if PO has price list and fixed price is NO. • 1 – receipt date • 2 – ship date (must require entry of ship date on receipt transaction) • 3 – order date • Discrete orders – order date, blanket orders – release date, scheduled orders – main order date • ERS Report • Run by ERS option to verify suppliers in category 2 & 3.

49. ERS Execution • Run ERS Processor (28.10) • Select by range of suppliers, sites, receiving #’s, receipt dates. • Error report always prints. • Create vouchers no to review first. • ERS process • If create unconfirmed vouchers, must confirm vouchers. • Run voucher register for ERS only and unconfirmed Yes. • Run 513.5 ERS only Y, non-vouched Y to preview receipts for ERS process.

50. Supplier Statements • Balance Forward Statements • Keep for review, trash if next statement shows payment for previous. • Open Activity Statements • Highlight activity with date older than cut off payment. IE: if terms Net 30, select older than 60. • Trash current statements. • Research highlighted activity.