Invoice Matching TIPS

1. Invoice Matching TIPS What you really need to know about Lawson’s MA Module

2. PO Receipt Archival Reconciliation Filter Inv Message Listing Process Flows and Triggers AOC Reporting Duplicate Payment Report Smart Notifications Matched, Not Received JE Invoice Matching Enhancements in 8.1 • Prepayment Processing • Quantity Tolerances • Chargeback Numbering • More Lines on Invoice Detail Entry Screen • Combining of Invoice Detail Entry Screens • Tax Code for PO Invoices • Enhancements to Auto Match Output Rocky Mountain Lawson User Group

3. Match Processing The match process compares the Invoices and Receipts in a match pool in order to eliminate the need for human intervention. If there are match exceptions they can be handled through a reconciliation process and messaging if that is required. Rocky Mountain Lawson User Group

4. Unmatching an Invoice • If an invoice has not been posted to General Ledger, it can be unmatched in MA70 – Invoice Unmatch. Rocky Mountain Lawson User Group

5. When tolerances do not work • Check the match tolerance set up at the company and vendor level on MA00.9 and AP10.1. Rocky Mountain Lawson User Group

6. Rocky Mountain Lawson User Group

7. Match Pool Receipts Invoices Match Pool • Match pool is based on set up and use of organizational comparison rules being applied to a grouping of invoices and receipts in order to automate the processing and payment of those invoices. Rocky Mountain Lawson User Group

8. Quantity Tolerances • Compares invoice quantity with receipt quantity • Must use Detail Level match Rocky Mountain Lawson User Group

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10. Rocky Mountain Lawson User Group

11. Invoice Matching Setup • Tolerances • Tolerances are setup for Match Rules and are specific to an organization • Without tolerances operator intervention will be required for every transaction that does not have an exact dollar match • As part of a match rule, you can select whether to generate chargebacks for matches that occur within tolerance Rocky Mountain Lawson User Group

12. Rocky Mountain Lawson User Group

13. Rocky Mountain Lawson User Group

14. Setting Tolerances • Determine what percentage of matched invoices should be processed automatically by using the Normal Distribution Curve Rocky Mountain Lawson User Group

15. Chargeback Numbering in 8.1 • Numbering of chargebacks is now more user friendly • Used to be system assigned number • In 8.1 chargeback number = original invoice number – 111 (suffix) Rocky Mountain Lawson User Group

16. Rocky Mountain Lawson User Group

17. Finding the Chargeback Number • In AP30.2 you can inquire on invoice and drill on "related invoice transactions" or in AP90.1 inquire on invoice and drill on "related invoice transactions". Rocky Mountain Lawson User Group

18. Rocky Mountain Lawson User Group

19. Common Reasons for Unmatched Invoices System Issues in version 8.0.2 Vendor Issues Purchasing and Receiving Issues Invoice Issues

20. System Issues in 8.0.2 • No flexibility in matching multiple invoices to one receipt in DM • Cannot un-match and cancel a PO once posted to the GL • Cannot combine Service and Special items on one PO Rocky Mountain Lawson User Group

21. Common Reasons for Unmatched Invoices • Vendor Issues • Invoices with wrong PO numbers • Invoices with no PO numbers • Invoices for a closed PO • Invoice lines not on a PO Rocky Mountain Lawson User Group

22. Common Reasons for Unmatched Invoices • Purchasing and Receiving Issues • Item costs are not updated in the item master file in a timely manner • Use of “Add Receive All” function (PO30) versus what’s on the packing slip • Lines cancelled / closed • Delayed receiving for off-site locations • Vendor information on PO and Invoice do not match Rocky Mountain Lawson User Group

23. Common Reasons for Unmatched Invoice • Invoice Issues • Use of Incorrect handling code • Use of “Create Detail” action (MA43), but cost and quantity are not reviewed • Line item details on Invoice do not agree with line items on the Purchase Order Rocky Mountain Lawson User Group

24. Rocky Mountain Lawson User Group

25. New Rule in 8.0.3 • Invoice Matching (MA) version 8.0.3 has an additional rule level option available--DM A-1. This level will allow multiple invoices to be matched to one receipt. For example, DM A-1 will allow one receipt for a quantity of 10 to be matched to multiple receipts as follows: Rocky Mountain Lawson User Group

26. New Rule in 8.0.3 • DM A-1 must be the first rule level set up in the rule group. If the system can match at any other level prior to reaching the DM A-1 level, the functionality will not be available for future invoices against that receipt. • If the invoice quantity multiplied by the unit cost is less than the receipt quantity multiplied by the unit cost, but is still within tolerance, the system will match at DM 1-1 or DM 1-A and not leave a quantity remaining to match later. Rocky Mountain Lawson User Group

27. Unit Option Rule Usage • The Unit Option rule affects match rule groups. • Purchase order line for 10 items at a price of $10.00 each. Receipt for 10 items. Invoice is entered for $100.00, with purchase order details for 5 items at a price of $20.00 each. • Invoice Qty does not equal Receipt quantity – NO MATCH • Out-of-tolerance error message generated and does not match on AP20/MA43/MA126 • Using the Extended Rule option, the Invoice Matching (MA) system matches this invoice to the receipt. (Extended cost of both the invoice and receipt are $100.00.) Rocky Mountain Lawson User Group

28. LIM does not work in 8.0.3 • Lawson discommends use of LIM in MA 8.0.3 • It’s use is not well-defined and does not work consistently Rocky Mountain Lawson User Group

29. Match Completed? • If the match is successful the invoice will proceed through the system onto payment. • If match was not successful the invoice will be available in the Reconciliation Queue for review. • Reconciliation allows the user to look more closely at the invoice and the receipts available for that invoice. • Through the forced match in the reconciliation screens invoice messaging is also triggered. Rocky Mountain Lawson User Group

30. Tax Validation (MSP#2) • Validation that invoice tax equals or is within tolerance of sum tax distributions. • If tax is not in balance invoice will not match and it will not be released. • AP Company: • Tax Tolerance Amount • Tax Code • Tax Rounding Account Rocky Mountain Lawson User Group

31. Tax Processing • Additional tax entry flexibility • During invoice entry tax code can be: • brought over onto invoice from PO • added or changed Rocky Mountain Lawson User Group

32. MA43 – Tax Code Rocky Mountain Lawson User Group

33. Auto Match Output (MA126) • Auto match optionally includes matched invoices • Also retrofitted back to 8.0.3 • 8.0.3 CTP#24064 • Factsheet Article ID: 100652 Rocky Mountain Lawson User Group

34. Reconciliation Process • After the initial match process, exceptions are available for review in the reconciliation queue. • Initial match took into consideration your organizations match rules in order to attempt the match. • Reconciliation is a forced match and only if messaging is being used are there match rules applied during the reconciliation process. • There is a reconciliation queue which lists all invoices which have not been matched. • From the reconciliation queue the INV button will open the invoice match screen and the DTL button will open the detail match screen. Rocky Mountain Lawson User Group

35. Invoice Match • Invoice Match from the reconciliation screen compares the invoices and the receipts at the header level. • From Reconciliation it is a forced match so if the invoice is greater than the receipt instead of match if the option is chargeback, the match will be completed and a chargeback created for the difference. • If chargeback is not the option, the match will be performed and the difference written to the account on the MA company or process level for invoice tolerance. • The entire receipt will be moved to a closed status. • This option should not be used if inventory items are tracked in Lawson’s I/C application. Rocky Mountain Lawson User Group

36. Detail Level Match • This screen displays the lines of the invoice to be matched to the lines of the receipt. • Select the invoice lines and the receipt lines. Use the select option. • Then choose the match option or chargeback option. • If messaging flags on Match Company are set to YES additional processing will occur. • If match is the option and messaging is used a message will be created to resolve the difference. • If match is the option and messaging is not used the invoice will be released and approved. The difference between the invoice and the receipt will booked to accounts based off the purchase order line type. • Inventory line item discrepancy will write to the item cost variance suspense. • Non-stock and special line item discrepancy will write to the accounts on the purchase order line. Rocky Mountain Lawson User Group

37. After Match • If your organization uses messages there are other actions that will take place after the reconciliation process. • It is possible to unmatch an invoice prior to the payment process or distribution posting. • It is also possible to reverse a payment on a matched invoice. • Invoices can be approved without receipts by using Match Invoice Approval. • Open receipts can be written off and the purchase order line closed. • Invoices paid and no receipts every recorded invoice line can be written off. Rocky Mountain Lawson User Group

38. Archive Only Option (MA180) • HC driven requirement • Receipt archival • Original functionality: receipt write off • New functionality: no expense recognized if invoice is not present Rocky Mountain Lawson User Group

39. MA180 - Archive Only Option Rocky Mountain Lawson User Group

40. Reconciliation Filter (MA60) • Filter out invoices: • with Open PO Cost Messages • with no receivers • AP can focus on invoices they can take action on Rocky Mountain Lawson User Group

41. Reconciliation Filter Rocky Mountain Lawson User Group

42. Match Invoice Reconciliation

43. Buyers Responsibility • Have the most updated cost in the Vendor Agreement (PO25) • Use PO536 to update Agreement pricing • Resolve cost and buyer messages in a timely manner • Review user requisitions with special and service items for cost and correct vendor • Use Buyer Worksheet (PO22) to verify cost • Determine if a requisition can accept entered cost for X and S type items (“Use Entered Cost” flag on RQ04) Rocky Mountain Lawson User Group

44. AP Responsibility • Verify PO Vendor and AP Vendor are the same • Verify correct entry of invoice Invoice Total = Invoice Detail + Invoice AOC + PO AOC (+ Tax) Rocky Mountain Lawson User Group

45. AP Responsibility • Promptly identify all invoice match problems and notify appropriate person(s) • System only creates Invoice Messages for pricing discrepancies • System messages do not always clearly identify all problems with a match • Utilize various inquiry screens to research matching problems. Such as PO64 and PO54 • Document all identified invoice problems Rocky Mountain Lawson User Group

46. AP Responsibility • Monitor the Reconciliation Queue • Consider use of Chargeback functionality Rocky Mountain Lawson User Group

47. Managing the Reconciliation Queue • Identify clear responsibilities and procedures for resolving common invoice problems types before live processing begins • Document invoice problems and steps taken to resolve • Hard copy documentation, Use of Invoice Comments and Reason Codes Rocky Mountain Lawson User Group

48. Managing the Reconciliation Queue • Create an expeditor role to monitor and expedite resolution of problem invoices • Accounts Payable or Purchasing • Run MA126, Auto Matching regularly and review report • Create a separate Match Rule Group just for Auto match and test it • Create a Matching Improvement Team with members from Accounts Payable, Purchasing and Receiving and meet regularly Rocky Mountain Lawson User Group

49. Matching in the Reconciliation Queue Pros • Must match in Reconciliation Queue to fully use Chargeback functionality • Give AP more control over matching process and ability to expedite match of an invoice • Only way to match multiple invoices to one receipt in 8.0.2 without using the IM level match in the Match Rule Groups Rocky Mountain Lawson User Group

50. Matching in the Reconciliation Queue Cons • Gives AP more control over matching process – can be dangerous tool if not used correctly • Requires a high degree of skill and understanding to use correctly – suggest limiting access to a few well trained staff members • Difficult to view and research detail lines in queue Rocky Mountain Lawson User Group