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Copyright © 2005 Ubex Corporation Automated Invoice Processing and Enhanced Controls with ERS Pay On Receipt Presented by: NorCal OAUG Uma Mohan March 7, 2005 Kishore Bodhireddy
Copyright © 2005 Ubex Corporation 2 Agenda Ubex Corporation Overview Business Need for Automation and Controls ERS Process Benefits Implications Solution Features Essential Considerations Conclusion Q&A
Copyright © 2005 Ubex Corporation 3 Premier provider of end-to-end business solutions Exclusive focus on Oracle Applications Oracle Certified Partner Bay-area based 9+ years in high-tech vertical 100% success rate Founded by an Oracle veteran Ubex Corporation
Copyright © 2005 Ubex Corporation 4 Areas of Expertise Service Offerings Applications Oracle E-Business Suite Core Technology, Financials, MFG, Quality, Distribution, Projects, HRMS, CRM, OFA Technical Administration Customization Interfaces Data Migration Transformation Process Analysis Global Integration Project Management Training Implementation Upgrade Integration Customization Maintenance Support
Copyright © 2005 Ubex Corporation 5 Business Need for Automation and Controls
Copyright © 2005 Ubex Corporation 6 Typical Process
Copyright © 2005 Ubex Corporation 7 Why Automation and Controls? Paper based transactions resulting in duplicate manual entry Manual processing Inconsistent application of business processes Inappropriate disbursements Increases audit risk of non-compliance High payables overheads Long purchasing to pay cycle Not able to take advantage of supplier provided payment term discounts
Copyright © 2005 Ubex Corporation 8 What is ERS? ERS stands for “Evaluated Receipt Settlement” Automatic invoice creation process Invoice Amount = Receipt Quantity * Unit Price in Purchase Order
Copyright © 2005 Ubex Corporation 9 ERS Process
Copyright © 2005 Ubex Corporation 10 ERS - Benefits Streamlines business process Ensures accuracy of invoice processing Eliminates duplicate manual data entry Reduces Payables overhead Reduces purchase to pay cycle times Ensures on-time payments to suppliers Takes advantage of supplier discounts Improves supplier cash flow Improves supplier relationship Provides enhanced controls over invoice processing
Copyright © 2005 Ubex Corporation 11 ERS - Implications No more invoices from suppliers Significant process change for suppliers, purchasing and payables Responsibility for invoice accuracy shifts from Supplier / AP to Purchasing department Price accuracy Tax accuracy Freight etc. Upfront investment needed to: Bring suppliers on-board Verify suppliers’ tax registration status
Copyright © 2005 Ubex Corporation 12 Solution Features
Copyright © 2005 Ubex Corporation 13 Oracle ERS Solution Components Pay On Receipt AutoInvoice Program Can be scheduled OR run on demand Builds invoices with the following information : Amount - Quantity received X Item Unit Price Payment Terms - from PO Tax - Based on Tax Codes on each PO shipment, or the default tax hierarchy in Payables Delays ERS Process – Aging Period Any discrepancies and/or adjustments beyond aging period must be handled manually
Copyright © 2005 Ubex Corporation 14 Oracle ERS Process Pay On Receipt AutoInvoice Program
Copyright © 2005 Ubex Corporation 15 Key Setups Profile Options PO: ERS Invoice Number Prefix PO: ERS Aging Period Supplier Site Purchasing site and Pay Site / Purchasing site with alternate pay site Pay On Receipt Invoice Summary Level Purchasing Line Type – 3 way match
Copyright © 2005 Ubex Corporation 16 ERS Supplier Site
Copyright © 2005 Ubex Corporation 17 Invoice Summary Level The levels are: 'Pay Site' -- one invoice created per supplier pay site 'Packing Slip' -- one invoice created per packing slip per supplier pay site 'Receipt' -- one invoice created per receipt per supplier pay site
Copyright © 2005 Ubex Corporation 18 Invoice Numbering Invoice Summary LevelERS Invoice Number Pay Site : One Invoice / Supplier Pay Site ERS- - Packing Slip : One Invoice / Packing Slip # / Supplier Pay Site ERS- - Receipt : One Invoice / Receipt / Supplier Pay Site ERS- -
Copyright © 2005 Ubex Corporation 19 ERS PO
Copyright © 2005 Ubex Corporation 20 Essential Considerations Visibility for the supplier about invoices created, via iSupplier module Invoice remittance advice Automatic tax calculation and accrual process Control users from modifying default ERS values in PO Payment discrepancies handling process Changed audit requirements and controls
Copyright © 2005 Ubex Corporation 21 Tax Insights Use payables options to automate the invoice tax calculation Use purchasing tax hierarchy to default tax code in the PO shipments Tax code should reflect Ship-to location Supplier registration status Line type For suppliers registered to collect the tax, pay tax For suppliers not registered to collect the tax, accrue tax
Copyright © 2005 Ubex Corporation 22 Our Solution Approach Automatic tax calculation and accrual process based on supplier’s tax registration Provide invoice visibility To suppliers about ERS invoice payments To users about non-processed ERS invoices Controls To track changes made to ERS/non-ERS invoices after it is created To restrict buyers from changing PO from Pay On Receipt process Reports To monitor and manage the automation process
Copyright © 2005 Ubex Corporation 23 When can ERS go wrong? Data entry error while creating purchase order Receiving and return-shipment error Inaccurate PO pricing, can result in over payment to supplier Improper tax setup Inadequate discrepancy handling process
Copyright © 2005 Ubex Corporation 24 Conclusion Implementing ERS involves significant challenges… supplier involvement tax process automation internal business responsibility shift changed audit requirements …but delivers very quick business benefits Start small with select suppliers, evaluate and finally roll-out
Copyright © 2005 Ubex Corporation 25
Copyright © 2005 Ubex Corporation 26 Booth in Exhibitor Hall www.ubex.com Follow-Up & Additional Details Uma Mohan firstname.lastname@example.org Kishore Bodhireddy email@example.com
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