Mystery Solved: Pay on Receipt

Melissa Sider

DARC Corporation

Objectives

• Introduce Pay on Receipt

• Identify Set Up Requirements

• Discuss Benefits and Features

What is Pay on Receipt?

• Oracle Purchasing Function

• Integrates to Payables

• Enables Automatic Creation of Invoices

• Based on Receipt Transactions

• Use Receipt and PO Data

• Matching Rules ensure proper payment

A.K.A. Pay on Receipt

• This feature is alternately known in Oracle User Guides as:

– Evaluated Receipt Settlement (ERS)

– Payment on Receipt (POR)

– Self-Billing Invoices (SBI)

How does it work?

• Receipt transactions trigger invoice creation

– Receipt

– Delivery

– Advance Shipment Notice

– Advance Shipment and Billing Notice

How does it work?

• Invoices are consolidated at one of the following levels:

– Packing Slip – Triggers one invoice per packing slip

– Receipt – Triggers one invoice per receipt

– Supplier Pay Site – Triggers one invoice per supplier pay site

How does it work?

• Depending on your business needs, you can use Pay on Receipt to automatically create invoices for:

– All your vendors; or

– Select vendors; or

– Select Purchase Orders

How does it work?

• Invoices are generated by running the Pay on Receipt AutoInvoice and Payables Open Interface Import processes.

• Invoices move normally through Approval and Payment processes.

• Process Returns with automatic Debit Memos that are matched to the original Purchase Order.

How Invoices are Built

• Invoice Amount = Quantity Received X Purchase Order Item Unit Price

• Payment Terms –Default from the Purchase Order Payment Terms or from Supplier Site Payment Terms

• Tax– Based on the tax code in PO Shipment or the Default Tax Hierarchy in Payables.

How Invoices are Built

The invoice number is created in the following format ’ERS’–<X>–<Seq#> where:– ERS is the default prefix for Pay On Receipt invoices or any

prefix specified in the profile option PO: ERS Invoice Number

– X depends on the summary level:• if summary level = Pay Site then X = Invoice Date

• if summary level = Packing Slip then X = Packing Slip Number

• if summary level = Receipt then X = Receipt Number

– Seq# is a unique system generated number.

Pay on Receipt Benefits

• Pay on Receipt offers the following benefits:

– Reduce or eliminate paperwork associated with invoice payment processes

– Reduce the risk of manual data entry errors

– Avoid duplicate entry of invoices

– Ensure that invoices are entered into the system in a timely manner

Setting Up Pay on Receipt

• PO: ERS Aging Period

• PO: ERS Invoice Number Prefix

The Pay on Receipt Process

Supplier

$ $$

Purchasing

ReceivingQuality AssuranceInventory

Supply BaseManager

Sets Supplier Optionsfor Pay on Receipt

Creates Purchase Orderusing POR Supplier

Ships Goods

Receives GoodsInspects Goods

Goods Deliveredto Inventory

Goods Returnedto Supplier

$

$

Accounts Payable

Invoice Created viaAutoInvoice Process

RTS

Debit Memo Created

Pay to $

Payment to Supplier

Set Up Supplier SBI

Set Up Supplier Currency

Create Purchase Orders

Run POR AutoInvoice

Using Payables Batching

• Pay on Receipt supports AP Batching

• Invoice Count and Total are automatically calculated

Handling Errors

• Two reports assist in identifying and solving errors:

– Purchasing Interface Errors Report

– Payables Open Interface Report

Tax

• Set up Supplier Site with Automatic Tax Calculation at Line or Tax level

• Tax values inherited from Tax Codes (PO Shipment) or Default Tax Hierarchy

• Tax is calculated at Invoice Approval or manually in the Distributions window

Different Purchasing and Pay Sites

• Set up both site for Pay on Receipt

• Indicate Pay Site as Alternate Site in the Purchasing Site Self-Billing Region

Return to Suppliers

• Select Create Debit Memo from RTS Transaction checkbox in the Supplier Sites window.

• Ensure the Create Debit Memo option is selected in the Returns window.

Invoice Inquiry

• Use the ERS Invoice Number Prefix as a starting point for searches

Conclusion

• Easy to set up and use

• Reduces paper consumption

• Reduces manual entry of invoices

• Test completely in safe environment

• Use aliases to search for information in PO and AP User Guides