Invoices
Invoices are used for entering and processing bills for materials or services. They ensure that the quantities being billed do not exceed what has been received and that the prices at which they are billed match what is on the originating purchase order.
The invoice also specifies payment information such as the purchase order number, the vendor, any discounts that have been applied and so on. Cost allocation information indicates the taxes, freight, and any other additional costs or discounts applied to the invoice.
Line Items
Invoices specify a number of line items which may originate from a number of purchase order line items. Invoice line items must conform to the following rules:
• If the invoice header references a purchase order, then all purchase order lines added to the invoice must reference that same purchase order.
• If the invoice header does not reference a purchase order, then multiple invoice line items can be added to the invoice using the Invoice Line Item zone.
• If the invoice header does not reference a purchase order because it references multiple purchase orders, the purchase order line items can be added for each purchase order using the Purchase Order Line Items zone on the invoice record for each of the invoice lines.
◦ If an invoice references a purchase order, the total invoiced for a purchase order line item cannot exceed the receipt quantity. If the invoice quantity is more than the net received, the invoice goes into “pending resolution” state.
◦ If a unit price is not the same as last posted invoice price, if any, invoice will also go into pending resolution.
◦ Also, when the invoice amount does not match the PO amount within a certain range defined in master configuration, the user will see a warning or error (also based on setting in master configuration).
The invoice amount is calculated as product of quantity and unit price. Unit price is locked down to latest posted invoice if there is one, otherwise it comes from the purchase order. If master configuration settings trigger an error, the invoice will go into pending resolution status. The tolerance value indicated in Purchasing Master Configuration regulates this behavior.
Invoice Groups
Invoice groups can be used to group invoices together before they are sent to Accounts Payables (A/P). They can be used as an intermediate step to review a set of invoices before those invoices are processed for payment. If no invoice group is configured on the invoice header, individual invoices post as soon as they are approved.
Automatic Invoicing
In order for the system to complete automatic invoicing against purchase orders, the vendor on the purchase order must be set as an “auto pay” vendor. When the purchase order is created, it must also be set as “auto pay”. After items are received against the purchase order, the system automatically creates an invoice with line items. When an invoice is automatically created, no additional line items can be added to the created invoice and none of the line items can be deleted. If the receipt included more items received than ordered, these invoice line items are placed in Pending Resolution status when the invoice is submitted for approval. An authorized user must then change the quantity on the purchase order before the invoice can be reprocessed successfully.
Related Financial Transactions
All invoice line items result in a financial transaction. As the financial transactions are created they zero out the clearing account and make up differences, if any, if information such as the price or tax amount on the invoice is different from the purchase order.
Converted Total and Exchange Rates
Note that if your organization works with foreign currencies, there may be a discrepancy shown in the Invoice Summary section on the Invoice header between the converted total on the invoice header and the converted total calculated by totaling the line items. The converted total is derived by multiplying the invoice total by the exchange rate. This header value might be off by $.01 or more due to the slight offset that results from rounding each individual line item then calculating the header converted total. You can see a more accurate converted total by reviewing each line item individually.
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