Payables shares purchase order information from your purchasing system to enable online matching with invoices. When matching based on quantity, match your billed (invoice) items to the original purchase orders or receipts to ensure that you pay only for the goods or services you ordered. If you are billed for an item in excess of the amount and quantity tolerances you define in the Invoice Tolerances window, Invoice Validation applies a hold to the invoice, which prevents payment.
Note: To prevent overbilling when amount matching, enable the Shipment Amount tolerance and set it to zero.
You can match a single invoice to multiple purchase order shipments and distributions, or you can match multiple invoices to a single purchase order shipment or distribution. Payables ensures that when you match an invoice to a purchase order that the invoice and purchase order have the same supplier and currency.
When you match an invoice to a purchase order or receipt, Payables creates invoice distributions using the purchase order distribution accounting information. You cannot delete invoice distributions created through matching. If you incorrectly match an invoice to a purchase order, you may either cancel the invoice, or reverse the individual distributions which are incorrectly matched.
Landed Cost Management allows companies to calculate cost required to take a product to market, to source a product overseas, or to do business with a particular vendor or customer. Knowing the total actual landed cost of goods provides powerful insight in to competitive global markets. When companies use the landed cost information strategically, they can control overall product margin and optimize profitability.
The landed cost is calculated in different times during the procurement flow:
simulated at PO creation
estimated at materials receipt
and finally, recalculated based on the actual item and invoice pricing during the invoice creation
The estimated landed cost calculates the item cost and generates the accounting entries of the material receipt transactions. These support an enhanced item cost management with enhanced margin control, ability to recalculate the landed costs based on the latest invoice pricing and properly handling variances on the landed cost components are key prerequisites for allowing companies to have optimized cost management and better sourcing decisions.
Landed Cost Management relies on the association of charge invoice amounts to receipts to calculate actual landed cost.
The existing invoice matching to receipts in Payables lets you match the charge invoices in the order currencies and considers the landed cost information whenever you perform the matching activities for freight and miscellaneous matching types.
The invoice matching includes fields and links to Landed Cost Management that let you search by landed cost information. You can review and take decisions based on the landed cost details when matching charge lines to landed cost management-enabled receipt lines.
The invoice validation process includes validations to check the invoice charged amounts against the estimated landed cost information and raise appropriate holds.
This feature provides enhancements in Landed Cost Management and Payables applications.
Enter Charge Invoices in Other Currencies
The Freight and Miscellaneous Charges Matching window is enhanced to support charge invoices in other currencies than the PO to be matched to the receipt lines.
Enhanced Find Receipts for Matching
The new landed cost fields let you use additional information to correctly identify the receipt lines to receive the allocations from the charge lines.
When the AP: Show Closed LCM Receipts on Charge Invoice Matching Profile is set to No, the closed Landed Cost Management enabled receipt lines are not displayed.
Review Landed Costs during Matching
The Freight and Miscellaneous Charges Matching window is enhanced to include landed cost information to help select the correct Landed Cost Management-enabled receipt lines for matching.
The estimated landed cost information calculated during the material receiving process helps you during the matching process. For example, details about a receipt line has an estimated $90 of freight is critical when matching a freight invoice.
The Match Other Charges to Receipts window displays the estimated and billed amount for the selected cost factor that is matched to help you select correct receipt lines for matching. The estimated amount provides a reference of the calculations done at receiving time and the billed amount shows the previously matched amount for each of the receipt lines.
Screen Validation at the Time of Matching to Receipt Lines
The Freight and Miscellaneous Charges Matching window alerts you on business exceptions when you select a receipt line. You can define your own tolerance percentage and amount parameters.
Tolerance Check for Charge Invoices Based on Landed Costs
The freight and miscellaneous charges invoice amount is verified against the estimated landed cost. This ensures the matched charge amounts are compliant with the rules established when calculating estimated amounts for each cost factor during receiving. You can define your own tolerance percentage and amount parameters.