Matching Supplier Invoices with Purchase Orders—Exercises

IMPORTANT
If you are a student, it is extremely important that you set up and work within your own site to maintain your data integrity. If you work within any other site, you will compromise your own exercise data as well as the data of other students. Predictable exercise results require that your data be isolated in your own site.

Basic Data Setup

Site

Purpose: The purpose of this exercise is to show you how to enter a site and connect it to your user.

Windows:
Site
Sites per User

  1. Open the Site window.
  2. Enter a site.
  3. Connect the site to your user.

General exercise for Site

Inventory Locations

Purpose:  The purpose of this exercise is to create inventory locations for your site.

Windows:
Inventory Locations

  1. Open the Inventory Locations window.
  2. Enter one inventory location with a location type of Picking for your site.
  3. Enter one inventory location with a location type of Arrival for your site.
  4. Save your changes.

General exercise for Inventory Locations

Inventory Part

Purpose: The purpose of this exercise is to show you how to enter an inventory purchase part.

Windows:
Inventory Part

  1. Open the Inventory Part window.
  2. Enter an inventory part of part type Purchased.
  3. Set Inventory Valuation Method to Weighted Average for the part.
  4. Save your changes.

General exercise for Inventory Part

Charge Type

Purpose:  The purpose of this exercise is to show you how to enter a charge type.

Windows:
Procurement Basic Data/Purchase Charge Types

  1. Open the Procurement Basic Data and click the Purchase Charge Types tab.
  2. Enter a charge type with a charge price.

General exercise for Charge Type

Supplier

Purpose:  The purpose of this exercise is to show you how to enter a supplier.

Windows:
Supplier

  1. Open the Supplier window.
  2. Enter a supplier.
  3. Save your changes.

General exercise for Supplier

Supplier for Purchase Part

Purpose: The purpose of this exercise is to connect your part to a supplier.

Windows:
Supplier for Purchase Part

  1. Open the Supplier for Purchase Part window.
  2. Connect your purchase part to a supplier. Use the receive case Receive into Inventory.
  3. Save your changes.

General exercise for Supplier for Purchase Part

Main Exercises

Purpose: The purpose of these exercises is to show you how supplier invoices can be matched with purchase order receipts.

Windows:
Purchase Order
/Supplier
/Supplier/Invoice/General
Register Purchase Order Arrivals
Manual Supplier Invoice
Self-billing Invoices Analysis
Inventory Part

Invoice Matching—Enter Supplier Invoice and Match with Purchase Order Receipt

  1. Open the Purchase Order window.
  2. Enter a purchase order for your supplier.
  3. Enter one order line for your part. Release or confirm the order. Note the order number and the total amount.
  4. Receive the purchase order into an inventory location.
  5. In the Manual Supplier Invoice window, enter a new supplier invoice entry. Enter your purchase order number in the PO Reference field, an invoice ID in the Identity field, and your total amount from the purchase order in the Net Amount field. Save the information.

Note: If you save the record before matching, you will create a preliminary invoice. If you do not want a preliminary invoice, wait until after matching to save the record.

  1. Right-click Purchasing and then click Match PO Receipts. Match the displayed order line by selecting the Matched check box. Notice that Remaining becomes zero.

Note: The matching is executed either by selecting the Matched check box or by clicking Match All. (This can be used when all displayed lines should be matched). The Remaining field helps you make sure that the order lines match add up to the amount entered on the invoice. In the Matched field, you can analyze how much has already been already matched.

  1. Finish the matching by clicking OK in the dialog. Analyze the expense postings that your matching has created.

Note: If the Standard Cost inventory valuation method is used, purchase price difference postings will be created if the invoiced purchase price differs from the inventory value. If the Weighted Average or FIFO/LIFO inventory valuation methods are used, price difference postings will be created if the invoiced purchase price differs from the price on the PO line (more exactly, the value on the Arrival transaction). If the Periodic Weighted Average is used, the cumulative price difference can be viewed in the Inventory Part window, i.e., no price difference postings are made. 

  1. Save the invoice.

Price Adjustment

Note: This exercise assumes that you have already entered and matched the invoice in the exercise above. You will use the same purchase order in this exercise.

  1. Open the Manual Supplier Invoice window.
  2. For the already matched purchase order receipt, you receive one credit invoice because the first supplier invoice did not have the price that you had agreed upon.
  3. In the Manual Supplier Invoice window, enter a new supplier invoice entry. Enter your purchase order number in the PO Reference field, an invoice ID in the Identity field, and a total amount of –100 in the Net Amount field.
  4. Right-click Purchasing and then click Price Adjustment Purchase. You will see the matched receipts. For the line, enter –100 in the Total Price Difference field. Notice that Remaining becomes zero.
  5. Finish the matching by clicking OK in the dialog. Analyze the expense postings that your matching has created.

Note: Price difference postings are created if you make a price adjustment for an inventory part. No price difference postings are created if you make a price adjustment for a non-inventory part.

  1. Save the invoice.

Invoice Matching—Enter Supplier Invoice and Match with Purchase Order Charge

Note: In this exercise you will create two separate invoices.

  1. Open the Purchase Order window.
  2. Enter a purchase order for your supplier.
  3. Enter one order line for your part.
  4. Enter one charge line for your charge type and connect it directly to the purchase order part line by entering the Line No and Release No.
  5. Enter a second charge line for your charge type without any distribution.
  6. Release or confirm the order. Note the order number and the total amount of each charge line.
  7. Receive the purchase order line into an inventory location.
  8. In the Manual Supplier Invoice window, enter a new supplier invoice entry. Enter your purchase order number in the PO Reference field, an invoice ID in the Identity field, and your total amount of the first charge line from the purchase order in the Net Amount field.
  9. Right-click Purchasing and then click Match PO Receipts. Now you should see three lines in the matching dialog box. Match the invoice with the first charge line by selecting the Matched check box of that line. Notice that Remaining becomes zero.
  10. Finish the matching by clicking OK in the dialog box and save the invoice. Analyze the expense postings that your matching has created.

Note: You could also try this with an invoice amount that does not equal the order amount.

  1. In the Manual Supplier Invoice window, enter a new supplier invoice entry. Enter your purchase order number in the PO Reference field, an invoice ID in the Identity field, and your total amount of the second charge line from the purchase order in the Net Amount field.
  2. Right-click Purchasing and then click Match PO Receipts. Now you should see two lines in the matching dialog box. Match the invoice with the second charge line by selecting the Matched check box of that line. Notice that Remaining becomes zero.
  3. Finish the matching by clicking OK in the dialog box and save the invoice. Analyze the expense postings that your matching has created.

Credit Invoice

  1. Enter a purchase order for 10 pieces of your part. On the order line, use receive cases Receive into Arrival, Inspect at Arrival, and Inspect Code A. Release the order. Note the order number and the total amount.
  2. Receive the purchase order.
  3. In the Manual Supplier Invoice window, enter a new supplier invoice entry. Enter your purchase order number in the PO Reference field, an invoice ID in the Identity field, and your total amount from the purchase order in the Net Amount field.
  4. Inspect the purchase order. As a result of the inspection, two pieces are sent back to the supplier for credit and one piece is sent back for rework.
  5. Right-click Purchasing and then click Match PO Receipts. On the displayed order line, change the value in the Qty in Buy U/M field to 10. Notice that Remaining becomes zero.

Note: Parts that have not been approved must be added manually. The system suggests that you do not match these parts.

  1. Finish the matching by clicking OK in the dialog. Save the invoice.
  2. After some time, your credit invoice for three pieces arrives. Enter a new supplier invoice entry. Enter your purchase order number in the PO Reference field and an invoice ID in the Identity field. The net amount should be the negative price for three pieces. Save the information.
  3. Right-click Purchasing and then click Match PO Receipts to open the Match Receipts Purchase window. Check that the value in the Qty in Buy U/M field is –3. Select Match All and finish the matching by clicking OK in the dialog. Save the invoice.
  4. After some time, your part sent for rework arrives. Receive and inspect the purchase order. Approve the piece.
  5. Enter a new supplier invoice entry. Enter your purchase order number in the PO Reference field and an invoice identity in the Identity field. The net amount should be the price for one piece. Save the information.
  6. Right-click Purchasing and then click Match PO Receipts to open the Match Receipts Purchase window. Check that the value in the Qty in Buy U/M field is 1. Select Match All and finish the matching by clicking OK in the dialog. Save the invoice.

Note: If the lead time for doing rework is short and/or the purchase part's value is low, parts sent for rework may not get a credit invoice. Instead, no new invoice is received from the supplier when the reworked parts arrive.

Self-billing

  1. On the Invoice/General tab of the Supplier window, select the Self-billing check box. Save the information.
  2. Enter a purchase order for a quantity of five of your part.
  3. Release or confirm the order.
  4. In the Register Purchase Order Arrivals window, enter a receipt reference and finish the dialog by clicking OK.

Note: The receipt reference entered will become the invoice identity on the invoice that is created automatically.

  1. In the Self-billing Invoices Analysis window, query for your automatically created invoice..

Note: The automatically created invoices are created as a background job, so you may have to wait a few seconds until you will find your record.

  1. Right-click and click Supplier Invoice Entry to view the details.

Note: The automatically created invoice is already matched.

Using Supplier Invoice Matching Tolerances

  1. Open the Supplier/Invoice/General tab.
  2. Clear the Self-billing check box.
  3. Enter 2 in the Tolerance % field. Save the record.
  4. Open the Purchase Order window.
  5. Enter a purchase order for your supplier.
  6. Enter one order line for a quantity of 10 of your part. Release or confirm the order. Note the order number and the total amount.
  7. Receive the purchase order into an inventory location.
  8. In the Manual Supplier Invoice window, enter a new supplier invoice entry. Enter your purchase order number in the PO Reference field, an invoice ID in the Identity field, and the total gross amount from the purchase order in the Gross Amount field.
  9. Right-click Purchasing and then click Match PO Receipts to open the Post from Purchase Order window.
  10. In the Invoiced Price/Unit field, increase the unit price by 5%, then click OK.
  11. Save the invoice.
  12. You should receive a warning message that the matching is not within the tolerance specified. Click OK to override the tolerance.

Note: Tolerances parameters can also be specified on the Company/Invoice/PO Matching tab. These values will be used if no parameters are entered for the specific supplier.

Note: Tolerance amounts can be specified in place of, or in addition to tolerance percentages. You can simulate other invoice matching situations by entering discounts or additional charges in the applicable fields in the Post from Purchase Order window.