Elkay Manufacturing Company Accounts Payable – Global Sourcing February 18-20, 2008

Who are We? Market leader in stainless steel sinks, faucets, water coolers/drinking fountains, kitchen cabinets Medium size manufacturing company with approximately 3500 employees Privately held, started in 1921 Live on Peoplesoft, all modules 8/99 Currently on PS V8.42, Oracle database Upgrading - ???? PS V ??

Global Sourcing at Elkay Purchase on open account as well as prepay Utilize freight forwarder for all China purchases Sourcing Department researches and initiates setup of most new Vendors Approval for prepayments must be included in documentation for voucher processing/payment processing procedures. Utilize EDI transactions to automate prepayment activity; reconciliation done upon receipt of goods

Expectations Your company is responsible for providing correct Purchase Order requirements with all pertinent information to Supplier and/or Freight Forwarder. Documented procedures/expectations of Suppliers and Freight forwarders should be reviewed and agreed upon by all parties.

Prepay Vouchers PO to Supplier and Freight Forwarder Supplier acknowledges receipt of PO and performs accordingly. Freight forwarder monitors all PO activity and is responsible to get with supplier to verify on-going status. Freight forwarder receives and reviews commercial invoice, packing slip and quality certificate. Freight forwarder initiates an electronic ASN & sends notification to a designated box.

Prepay Vouchers ASN automatically creates a prepay voucher and an electronic communication goes to AP AP retrieves commercial invoice and attachments from box If everything matches, AP initiates wire transfer paperwork and sends to Treasury.

Recording Prepayments Treasury advises reference ID # to AP AP manually records reference ID as payment ID and respective date of wire as payment date. AP holds wire transfer paperwork until goods are received

Regular Vouchers Upon posting of receipts to prepay suppliers automatic notifications is sent to designated box AP clerk pulls through receipts, applies prepay reference ID from prepay voucher. Match process runs nightly, voucher post process runs, and payment ID from prepay voucher is automatically posted as payment ID to regular voucher.

Additional Notes Set up for automatic processing of prepay vouchers requires IT set up Automatic notification of prepay vouchers is sent upon issuance of ASN and upon receipt of goods. 3-day turn-around from receipt of prepay voucher to payment is our acceptable procedure Extremely clean, smooth process when I’s are dotted and T’s are crossed. On-going communication is required between all parties. VIP – decision as to where AP goes when prepay vouchers don’t match commercial invoice

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