Invoicing

This chapter provides an overview of invoicing and discusses how to:

• Print standard invoices.

• Set up invoice cycles.

• Run cycle billing.

Note. Country-specific functionality for invoicing exists for Argentina, Chile, China, and Peru.

See Also

Printing Invoices for Argentina

(CHL and PER) Working With Sales Order Processing for Chile and Peru

Printing VAT Invoices from the Sales Order System for China

Understanding Invoicing

After you process a sales order detail line through ship or load confirmation and perform the required billable and payable freight calculations, you can invoice the customer for goods received. You can set up cycles to determine invoice schedules that meet customers' needs. For example, one customer prefers an invoice at the end of the month for all shipments made during that month, and another customer wants a weekly invoice for specific items.

An invoice provides information about an order, such as:

• Item, quantity, and cost.

• Shipping date and payment due date.

• Additional charges and applicable discounts.

You can set up customer-specific information to facilitate the processing of invoices. Through a combination of preferences, cycle calculation rules, and schedules, you can print invoices that meet the company's business needs.

You set up invoice cycles to apply different cycle calculation rules and schedules to different customer and item combinations. To set up invoice cycles, you set up invoice cycle calculation rules and create invoice cycle preferences. Use the Cycle Billing program (R49700) to calculate scheduled invoice dates. After you schedule the invoice dates, you run the Print Invoices program (R42565) to print either an individual invoice or a batch of invoices at the appropriate time.

See Also

(POL and RUS) Working with Sales Order Management Processes for Poland and Russia

(POL and RUS) Working with Invoices for Poland and Russia

Printing Standard Invoices

This section provides overviews of the Print Invoices program and kit component and parent invoicing, lists prerequisites, and discusses how to:

• Set processing options for the Print Invoices program (R42565).

• Run the Print Invoices program.

Understanding the Print Invoices Program

The Print Invoices program (R42565) updates this information in the Sales Order Detail File table (F4211):

• Invoice number.

• Invoice date.

• Invoice document type.

• Status codes (the program sets the next status code to run the Sales Update program (R42800)).

You must specify the next status codes that the system selects for processing.

Note. You can process and print a group of invoices in a batch using a proof or final mode. When you run the R42565 program in proof mode, the system does not perform updates to status codes or any files. You can use the proof version for other functions, such as sales order acknowledgements or invoice reprints. To properly process invoice proofs, you should run version XJDE0005 or a copy of this version.

Invoice Types

You can specify one of these types of invoices for the customers:

Note. You can consolidate or summarize invoices, but you cannot do both.

Currencies

You can determine the currencies in which you want to print net, tax, and gross amounts on the invoices. The processing options for the R42565 program enable you to print amounts in either the domestic or foreign currency, or in these two currencies:

• Domestic and as if currency.

• Foreign and as if currency.

The Print Invoices program uses as if currency processing to print invoice amounts as if they were entered in a different currency. One of the advantages of as if processing is that it does not affect disk space. The system temporarily stores the as if currency amounts in the Invoice Print File table (F42565), and then deletes them after the invoices are processed.

To print foreign and as if currency amounts, the Print Invoices program:

• Calculates the foreign and as if currency amounts based on the domestic amount of the sales order.

• Uses the exchange rate on the sales order date, not the invoice date.

• Prints foreign amounts only for each detail line.

If you print invoice amounts in an as if currency, you can also set a processing option to print tax summary amounts in the same as if currency.

Taxes

You can print tax summary information in a domestic or foreign and as if currency based on:

• Tax group - total taxable amount.

• Tax area - tax rate area, such as a state.

• Tax authority - tax authority with jurisdiction in the tax area, such as a county or city.

If the order has items that are taxed at different rates, the system calculates the taxes, but prints N/A (not applicable) instead of a tax rate. The system calculates tax amounts only for items that you ship. Any backordered items on the invoice do not have tax amount information. If you print invoice amounts in an as if currency, you can also set a processing option to print tax summary amounts in the same as if currency.

Intercompany Invoices

The system processes intercompany sales orders in the same way as other sales orders with the exception that during invoice processing, the system prints an intercompany invoice for the selling branch/plant.

You must set the interbranch processing options for intercompany orders in the Sales Order Entry program (P4210) to identify the intercompany document type, which creates a sales order detail record in the Sales Order Detail File - Tag File table (F49211). After you process the intercompany order through the R42565 program, the system updates the F49211 table with the intercompany invoice number.

You can print intercompany invoices through the normal invoice process in the R42565 program or the Cycle Billing program (R49700). However, you cannot print an intercompany invoice with customer invoices. You can print consolidated invoices for intercompany invoices; however, you must specify this feature in the customer billing instructions for the selling branch/plant.

If you generate an intercompany invoice, you must specify the same intercompany document types in the Sales Order Entry (P4210), Ship Confirm Batch Application (R42500), Print Invoices (R42565), and Sales Update (R42800) programs.

Understanding Kit Component and Parent Invoicing

When you set the processing option of the Invoice Print program (R42565) to indicate that the system invoices for kit component items when they are processed individually, you must ensure that you run the R42565 program before you run the Sales Update program (R42800).

To avoid double accounting for amounts at the parent and component level, the system maintains an accumulated invoice amount for the kit parent. This amount represents the total amount invoiced to date for the kit. When the system calculates an invoice amount for a kit, the system validates the sum of the accumulated invoice amount and the current transaction amount so that the invoice amount does not exceed the extended price of the kit parent. The system reduces the transaction amount to equal the remaining amount to be invoiced. This is the difference between the parent extended price and the accumulated invoice amount. The sales order detail line for the kit parent must be at a status that is set to create records in the S.O. Detail Ledger File table (F42199) when the accumulated amount changes due to invoicing a component.

When a kit parent line on a sales order gets split by partially processing through ship confirm or backorder release, the system evaluates the remainder of the accumulated amount to reassign to the new kit parent line. If the extended price remaining on the original line is greater than or equal to the total amount invoiced to date, the system retains the value on the original line. If the extended price remaining on the original line is less than the total amount invoiced to date, the system reassigns the excess amount to the new parent line.

You can manipulate the component quantities for each kit transaction using the Kit Balance Window form. Adjusting quantities can cause a residual amount to exist following the complete processing of a kit. When this occurs, the system adjusts the invoice price of the last transaction to include the additional amount required to account for the residual. If the amount remaining to be invoiced on the parent is greater than the total amount invoiced to date and no more shipments are to be made, the system adds the difference to the invoice amount for the final transaction.

Note. Component invoicing is available only through the R42565 program. To review invoices online, you must run the R42565 program prior to inquiring on invoice information for the sales order. You cannot create component invoices when the Kit/Configurator Pricing Method field in the F4101 table is set to 2, List Price of Final Kit, because the components do not have a unit price.

Example: Partial Ship Component and Full Ship Parent

You have a sales order for a quantity of 100 poker chip kits:

If you ship 100 units of kit component CHIP01, the system:

• Splits the component line.

• Invoices the 100 units using the unit price of the component (100 × 5.00 = 500.00).

• Updates the accumulated amount on the parent.

The sales order looks like this:

If you then ship 100 units of parent item PDH01, the system:

• Ships the remaining 100 units of component CHIP01.

• Ships additional components, CHIP02.

• Invoices the parent for the balance of the extended price (1800.00 − 500.00 = 1300.00).

• Updates the accumulated amount on the parent.

• Does not invoice the additional components separately when the parent is invoiced with the additional components.

Example: Partial Ship Component and Partial Ship Parent

You have a sales order for a quantity of 100 poker chip kits:

If you ship 100 units of kit component CHIP01, the system:

• Splits the component line.

• Invoices the 100 units using the unit price of the component (100 × 5.00 = 500.00).

• Updates the accumulated amount on the parent.

The sales order looks like this:

If you then ship 10 units of parent item PDH01, the system:

• Ships 20 units each of components CHIP01 and CHIP02.

• Splits the parent line, as well as the component lines.

• Updates the order quantity, ship quantity, and extended price for the parent and component lines.

• Creates an invoice for the 10 units of parent item with no charge because the amount was previously invoiced and the remaining amount to be invoiced is zero.

• Updates the accumulated amount on the parent.

• Assigns the excess accumulated amount from the original parent to the new parent line (500.00 − 180.00 = 320.00).

• Does not invoice the additional components separately when the parent is invoiced with the additional components.

The sales order looks like this:

Finally, you ship the remaining 90 units of parent item PDH01. The system:

• Ships the remainder of components CHIP01 and CHIP02.

• Invoices the parent for the balance of the extended price (1620.00 − 320.00 = 1300.00).

• Updates the accumulated amount on the parent

• Does not invoice the additional components separately when the parent is invoiced with the additional components.

The sales order looks like this:

Foreign Currency

When you invoice kit components for foreign transactions, the system examines the foreign extended amounts independently of the domestic extended amounts. Examining the amounts independently prevents the system from introducing additional currency conversions into the invoicing calculations. However, this may create invoices with a value on one side of the transaction, domestic or foreign, where the other side of the transaction has a value of zero. These unbalanced invoices would likely have immaterial values and be infrequent. Disposition these invoices based on the business practices of your company.

Prerequisites

Before you complete the tasks in this section:

• Verify that sales orders have the correct status code for printing invoices.

• If you use customer sets, ensure that the system constant for customer sets is activated in the Item Branch program (P41026) so that the Print Invoices program (R42565) displays all entities that belong to the customer set.

Setting Processing Options for the Print Invoices Program (R42565)

Use these processing options to set system default values, define print parameters, specify whether the system updates costs and prices, and define how the system processes data.

Default

Use these processing options to specify the default values that the system uses.

Print

Use these processing options to specify the data that the system prints.

Cost/Price Update

Use these processing options to specify how the system processes cost and the version of the cost program to use.

Prepayment

Use this processing option to specify whether the system displays prepayments.

Process

Use these processing options to specify the processes that the system performs.

EDI

Use these processing options to specify how the system processes electronic data interchange (EDI) information.

Demand Scheduling

Use these processing options to specify how the system processes demand scheduling.

E-mail

Use these processing options to specify how the system processes emails.

Running the Print Invoices Program

Select Sales Order Processing (G4211), Print Invoices.

Setting Up Invoice Cycles

This section provides an overview of invoice cycle setup and discusses how to:

• Create invoice cycle preferences.

• Add scheduled invoice date ranges.

Understanding Invoice Cycle Setup

You set up invoice cycles to control how the Cycle Billing program (R49700) calculates scheduled invoice dates. When you set up invoice cycles, you apply different cycle calculation rules and schedules to different customer and item combinations. For example, one customer prefers an invoice at the end of the month for all shipments made during that month, and another customer wants a weekly invoice for specific items.

You set up an invoice cycle calculation rule to define the type of calculation that the system uses to calculate an invoice date. After you set up invoice cycles, you assign the rules to customer and item combinations with the invoice cycle preference. You can later revise scheduled invoice dates, if necessary.

After you confirm orders for delivery, you process them through the R49700 program. The R49700 program calculates scheduled invoice dates based on the invoice cycle preference, invoice cycle calculation rules, and scheduled invoice date ranges. You then run the Print Invoices program (R42565) to create the invoice document that you send to your customer.

Invoice Cycle Preference

You set up invoice cycle preferences to assign an invoice cycle based on combinations of customer number, customer group, item number, or item group. The combinations are defined in the preference hierarchy. For example, if all customers use the same invoice cycle for all items, the hierarchy is set for all customers and all items. You can add invoice cycles as required.

Invoice Cycle Calculation Rules

You set up an invoice cycle calculation rule to define the type of calculation that the system uses to calculate an invoice date. For example, you can set up daily, bi-weekly, or based-on-date invoicing. You can then enter test dates to review the calculated invoice dates and ensure that you have set up the calculation correctly.

If the calculation rules are bi-weekly, semi-monthly, or at the end of each month, you must also set up scheduled invoice date ranges.

This table contains invoice cycle calculation rules that are hard-coded and require specific settings:

Example: Scheduled Invoice Date Calculation

This example illustrates how the R49700 program calculates the scheduled invoice date and how the calculation affects the generation of invoices. These values are entered for the invoice cycle calculation rule:

• Based on Date field is set to the order or transaction date of September 27.

• Days to Increment field is set to 0.

• Calculation Rule field is set to end of month.

• These are the Scheduled Invoice Date Ranges:

  • Start Dates are September 1 and October 1.

  • End Dates are September 30 and October 31.

  • Invoice Dates are September 30 and October 31.

If the delivery confirmation occurs on September 29, these events occur:

• On September 29

  The R49700 program processes the order line and calculates the scheduled invoice date to be September 30. Because the scheduled invoice date is greater than the system date (September 29), the R49700 program creates deferred journal entries.

• On September 30

  Because the scheduled invoice date is before or equal to the system date, the R49700 program generates the invoice and the Sales Update program (R42800) reverses the deferred entries and completes the required general ledger entries.

Automatic Accounting Instructions for Invoice Cycles

You must set up these automatic accounting instructions (AAIs) when processing invoice cycle information for stock items:

• 4221 - deferred cost of goods sold (COGS).

• 4231 - deferred revenue.

• 4232 - unbilled accounts receivable.

UDCs for Invoice Cycles

You must set up these UDC tables for use with invoice cycle processing:

• Invoice Cycle - 40/CY.

• Day of Week - 42/DW.

• Based on Date Name - 42/DN.

• Calculation Rule - 42/CR.

See Also

Activating Preferences

Forms Used to Set Up Invoice Cycle Preferences

Creating Invoice Cycle Preferences

Access the Invoice Cycle Calculation Rule form.

This form displays the invoice cycle calculation rule.

Adding Scheduled Invoice Date Ranges

Access the Scheduled Invoice Date form.

Running Cycle Billing

This section provides an overview of cycle billing, lists a prerequisite, and discusses how to:

• Set processing options for the Cycle Billing program (R49700).

• Run the Cycle Billing program.

Understanding Cycle Billing

You use the Cycle Billing program (R49700) to calculate scheduled invoice dates. The R49700 program is a batch program that works in conjunction with the invoice cycle preference and the invoice cycle calculation rule. If no invoice cycle preference is found, the system applies the default invoice cycle identified in the appropriate processing option.

The scheduled invoice date determines whether the system writes deferred journal entries to general ledger accounts. If the scheduled invoice date is more recent than the current date, the invoice is on a billing cycle.

The R49700 program updates deferred general ledger accounts for COGS, revenue, and unbilled accounts receivable. You can run the program in proof mode for review purposes or in final mode to perform the updates.

Deferred entries are necessary because, although you have delivered the order to the customer, the system does not include the order in the sales update until the order has been invoiced on the next billing cycle. The system must update the records to indicate that inventory is no longer in transit, and the accounting records must reflect the deferred billing.

A scheduled invoice date for an order that is before or equal to the current date indicates:

• A daily invoice cycle.

• No billing cycle.

• The current date as the cycle date.

The program does not create deferred entries because the order will be included in the sales update that night.

The system processes orders differently for cycle billing and non-cycle billing. The following tables provide examples of how the system updates different general ledger accounts for non-cycle and cycle billing. The debit and credit amounts represent sample monetary values for each transaction.

Non-Cycle Billing Journal Entries

This table describes the general ledger accounts and corresponding entries for non-cycle billing:

Cycle Billing Journal Entries

This table describes the general ledger accounts and corresponding entries for cycle billing stock items:

Note these exceptions:

• If load confirmation and delivery confirmation occur at the same time (that is, the inventory is never considered to be in transit), then the Transportation Load Confirmation program (P49640) does not create journal entries. The R49700 program credits the Inventory account instead of crediting Inventory In-Transit entries.

• If the P49640 program prints a primary invoice:

  The system does not generate deferred journal entries. The system generates non-cycle billing journal entries.

After you process orders through load confirmation and perform billable and payable freight calculations, the orders advance to cycle billing status. Depending on whether you have printed invoices with the delivery documents, the R49700 program processes order lines in the following way:

• If a sales order line has been invoiced:

  The R49700 program changes the status of the sales order line to indicate that it is not to be included in periodic invoicing. The system advances the order line to the Update Customer Sales status.

• If a sales order line has not been invoiced:

  The R49700 program checks the invoice cycle preference or the processing option, and calculates the scheduled invoice date. When you run the R49700 program in final mode, the program updates the F49211 table with the invoice cycle and scheduled invoice date. It also changes the status of the order line to indicate that it is to be included in periodic invoicing. The program writes deferred accounting entries for order lines that are to be invoiced on a future date.

Review the Cycle Billing Transaction Report

If you want to review the general ledger entries or determine the presence of errors, you can review the Cycle Billing Transaction report that the system generates for deferred entries. This report details the general ledger entries for a particular order line. The system enables up to four general ledger entries for a single order line. When you run the R49700 program in proof mode, this report displays the general ledger entries that will occur when you run the program in final mode. When you run the program in final mode, the report displays the updates that have been made.

Prerequisite

Verify that a UDC for the default invoice cycle exists. The system applies this code when no preference is found for a customer and item combination.

Setting Processing Options for the Cycle Billing Program (R49700)

Use these processing options to set report default values.

Defaults 1

These processing options specify override statuses for invoiced and processed orders, determine the version of the Sales Update program (R42800) to call, determine whether the program runs in proof or final mode, and specify the default invoice cycle.

Running the Cycle Billing Program

Select Invoice Processing (G42113), Scheduling Invoice Cycle.