1. Resolve Invoice Exceptions
Module 4

2. Accept Expected PO Amount?
Ariba Invoice Flow
Supplier
Department AP Processer
AP Supervisor or Cost Center Approver
SAP
Send Invoice
Submitted via AN? No
Review Invoice No
Yes
Enter Invoice
Exceptions?
Yes
Accept Invoice Amount? No
Accept Expected PO Amount?
Yes No
Yes
Reject
Dispute or Reject No
Approve?
Yes
Receive OK to Pay
Inv Module 5 – Approve an Invoice

3. Invoice Reconciliation (IR)
Invoice Documents
Supplier’s original request for payment.
Sent to SCC via the Ariba Network or manually entered by County A/P staff.
CANNOT be changed.
Invoice
(INV)
A copy of the invoice used for internal processing and approvals.
Where exceptions are tracked and resolved.
Invoice Reconciliation (IR)
Created when IR is fully approved.
Tracks information on payment of invoice to the supplier (remittance from SAP).
Payment Transaction
(PAY)

4. Access IRs from the To Do Portlet
All invoices with exceptions route to the appropriate invoice specialist’s To Do portlet.
Look for items with a Status of Reconciling.
Click the Title to open the invoice reconciliation and address exceptions.

5. Invoice Reconciliation Document Overview
Exceptions: Review and address exceptions.
Approval Flow: View Approval Flow
Reference: View Purchase Order, Receipt,
Invoice, and Payment Requests.
Line View: See exceptions in the invoice layout
History: See all actions taken on the IR.
Attachment/Comment icon: See attachment or comment if there is any.
Invoice PDF copy: download or open invoice PDF copy.

6. Open IR document to reconcile Exceptions
Check Line View for exceptions on invoice layout
To act on the exceptions, click Open.
Check exceptions Assigned to Me.

7. Reconcile an Exception
Click Reference or View Detail arrow to check all detailed information
Click Action to see the options to reconcile the exception

8. Reconcile an Exception (Continued)
Invoice can also be reconciled under Line View Tab

9. Common Types of Invoice exceptions
Exception Rule and Reconcile Principle
Tolerance
PO Received Quantity Variance
Receipt is not posted or receipt quantity does not match invoiced quantity. Do NOT reconcile. It is cleared after Receipt is posted. Check with receiver if needed.
Zero tolerance
PO Quantity Variance
Invoiced quantity is more than PO quantity. Rarely happens. Compare PO quantity and invoice quantity to see what action need to take.
Shipping Variance
Shipping amount on invoice is more than PO shipping amount and the difference is not within the tolerance. Verify if need to pay the shipping charge before reconcile.
Lower of $20 and 2.5%
Special Handling Variance
Handling amount on invoice is more than PO shipping amount and the difference is not within the tolerance. Verify if need to pay the handling charge before reconcile.
Over Tax Variance
Invoice tax amount on line item is more than PO calculated tax amount and the difference is not within tolerance. Verify tax code on line items and taxable amount before reconcile.
Higher of $0.5 or 1% of expected tax amount
Under Tax Variance
Invoice tax amount on line item is less than PO calculated tax amount and the difference is not within tolerance. Verify tax code on line items and taxable amount. Accrue tax as needed.
Lower of $0.5 and 1% of expected tax amount
PO Over Price Variance
Invoice price on line item is more than PO price on line item. Generally do not allow price increase on invoice unless supplier could justify price increase.
Lower of $10 and 0.1% of unit price

10. PO Received Quantity Variance
If the receipt is not posted or is partially posted, wait until the goods are received. The exception will automatically clear when the order is fully received. Contact receiver if invoice is pending for a long time.
Click the Reference to check detail of receipt.

11. Shipping or Special Handling Variances
Verify Shipping/Special Handling charge. If valid, click Accept Invoice Amount. If not, click Accept Expected Amount.
Click Order ID in Reference tab to check PO.

12. Check Tax Code on tax Variances
Click Line View tab and check if the Tax Code on each line item correct. The Tax Code is carried from PO.

13. Over Tax Variance
After checking the Tax Code on each line item and determine Taxable Total, go back to Exception tab.
If Tax Code is correct on line item, Accept Expected Tax Amount.
If Tax Code is incorrect marked on line item(s) as non-taxable and supplier charges correct tax on invoice, Accept Invoice Tax Amount.

14. Under Tax Variance
After checking the Tax Code on each line item and determine Taxable Total, go back to Exception tab.
If Tax Code is correct on line item, Accept Expected Tax Amount. Or, accrual tax by changing Tax Code and Accept Invoice Tax Amount.
If Tax Code is incorrect marked on line item(s) as taxable and supplier charges no tax on the line item, Accept Invoice Tax Amount. For invoice should not charge any tax, change Tax Code to I0.

15. PO over price Variance
Ariba network allows supplier to submit invoice with +/- 3% price adjustment.
Price decrease does not trigger price exception, but price increase triggers exception.
Generally Accept Expected Price since it is approved PO price.

16. Remittance Errors
If Ariba returns a remittance error, expend Header Information, and click Remit To Location, select Search More.
Find the correct address and click Select.
Save and submit the invoice.

17. Submit the Invoice for Approval and Payment
When all exceptions have been resolved, Ariba indicates that the invoice is reconciled.
Click Submit.
Click Save again to submit the invoice.

18. Understand the Approval Flow
All invoices with accepted exceptions require Budget Unit Manager approval.

19. Reject an Invoice Click Reject ONLY if invoice cannot be reconciled.
Note: Rejecting an invoice sends it back to the supplier with no payment. Supplier need to re-submit a corrected invoice for payment,
After providing comments to supplier, click Submit.
Type Comments to the Supplier explaining why you rejected the invoice.

20. System Demonstration In this demonstration, you will see how to
Reconcile common invoice exceptions
Fix remittance error
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