1. Invoice Verification Workflow

2. Agenda
Invoice Verification Workflow Overview
Topic 1: Remind s to requester
Topic 2: Process Prepayment
Exercises

3. Business Process Overview Invoice Verification Workflow

4. New Process Benefits
Invoicing provides paperless electronic flow within company.
Requestors can receive the system reminder if the invoice be blocked/parked/subsequent delivery
Accounting can trace PO and GR information through system, and if any unmatched case can be followed per system reports and process
SRM provides parked invoice function.
It will reduce the chance of missing invoice in the paper transfer process
Controllers can support by system report for provision analysis

5. Course Objectives After completing this course you will be able to:
Understand the new overall process of Invoice Verification, Parked Invoice, and Prepayment
Requester aware of the remind s format

6. Key Terms (1/3) Purchase Order (PO) Goods receipt (GR)
Formal request from L’Oreal China to a vendor to provide a certain quantity of good(s) or service(s) at or by a certain point in time.
Goods receipt (GR)
Goods Receipt is to do the goods receipt record in SRM system
It’s based on PO information.
Invoice Verification (IV)
Invoice Verification is to verify the invoice amount, invoice title.
It’s based on PO and Goods Receipt information.

7. Key Terms (2/3) Parked Invoice Subsequent Delivery Blocked Invoice
The Parked Invoice provide the function to record invoice before requester confirm the goods receipt.
It based on invoice and PO information.
It will not impact the P&L and B/S.
Subsequent Delivery
If Invoice quantity > Goods Receipt quantity, but < PO quantity,
In SRM, workflow is carried out electronically to requester for a subsequent delivery to settle the difference.
After the requester do the subsequent delivery, Accounting will release the payment manually per the MRBR report.
Blocked Invoice
If the invoice unit price and/or quantity discrepancy, and it is greater than PO unit price and/or quantity tolerance,
In SRM, System workflow is triggered, which starts with the PO requester's approval, then goes through all the defined PO approvers for PO update.
The payment will be hold until the workflow is finished in SRM.

8. Key Terms (3/3) Partial Invoice Workflow
If Invoice quantity < GR quantity, accounting will do invoice verification based on invoice quantity.
It will be treated as partial invoice.
System will effect the payment on due date.
Workflow
The process of moving documents and business data between individuals in order to complete a business process or function.
Example: POs are created by a requestor and are sent to an approver before being issued to the vendor.
In SRM, workflow is carried out electronically.

9. Key Policies (1/6) Supporting documents: PO, Invoice, Contract.
Please mark PO no., L’Oreal contact, brand, and contract no. as request on Invoice, which will facilitate for internal follow up. If it’s installment payments, please mark the payment percentage on invoice.
The contract is requested to be signed for total purchasing amount is over/equals RMB100,
The annual contract hard copy is not requested from vendor but request to mark contract no. on invoice,
- e.g. Legal Department, Purchasing Department, should pass the contracts to accounting when signed.
The information must be matched among PO, Invoice, and Contract, including amount, company title.

10. Key Policies (2/6) Insufficient supporting documents
If any supporting document is insufficient, e.g. no PO create in system, missing contract, invoice without PO no. etc., accounting will return the documents to vendor with specific reason for checking.
Company title unmatched
If company title is unmatched among PO, Invoice, and contract, accounting will return the documents to vendor for checking.
Parked Invoice of IV document received without system GR
Accounting will park the invoice, and release payment until requester confirms GR. The system will send the reminder (reference to attachment 1) to requester to follow up.
Accounting will follow up the monthly parked invoice report (T-code: YFD1). For any long term outstanding, accounting will send reminder to requester. If 6 months no answer, accounting will cancel parked invoice and return the invoice to vendor.

11. Key Policies (3/6) Unit price and/or quantity discrepancy (1/3)
Attention: the system tolerance
Media (PO in value): 0% for unit price, 5% for quantity, and Rmb2000 for total amount.
Other service: 5% for unit price, 0% for quantity, and Rmb2000 for total amount.
Physical goods: same as other service.
Subsequent Delivery (Quantity Discrepancy: IV>GR, IV<PO)
If Invoice quantity > Goods Receipt quantity, but < PO quantity, accounting will do invoice verification based on invoice quantity.
System will send (reference to attachment 2) to requester for a subsequent delivery to settle the difference.
The requester action according to the situation: dunning supplier, enter the missing GR, activating the final delivery flag, etc.

12. Key Policies (4/6) Unit price and/or quantity discrepancy (2/3)
Blocked Invoice (Quantity Discrepancy : IV>GR, IV>PO; Price Discrepancy: IV>PO)
If the invoice unit price and/or quantity discrepancy, and it is greater than PO unit price and/or quantity, accounting will block invoice in system.
System workflow is triggered, which starts with the PO requester's approval, then goes through all the defined PO approvers for PO update.
Accounting will follow up the monthly blocked invoice report (T-code: MRBR), checking block reason and release manually some blocked invoices. For any long term outstanding, accounting will send reminder to requester. If 6 months no answer, accounting will cancel parked invoice and return the invoice to vendor.
Partial Invoice (Quantity Discrepancy: IV<GR)
If Invoice quantity < GR quantity, accounting will do invoice verification based on invoice quantity.
System will effect the payment on due date.
Accounting will treat it as partial invoice.

13. Key Policies (5/6) Unit price and/or quantity discrepancy (3/3)
Reverse Expenses (Price Discrepancy: IV<PO)
If Invoice unit price < PO unit price, accounting will do invoice verification based on invoice unit price.
System will effect the payment on due date.
Accounting will manually reverse the difference into the expenses.
All matched information
If all information matched, accounting do invoice verification in system, then go to payment process.

14. Key Policies (6/6)
The policy and process for Accrual for Parked Invoice:
Park the invoice immediately but accrue only once a month
Accrue on the last working date of month end, should be no later than AP’s GR cut-off time
The code for accrue parked invoice will be : Other Payable-Park Invoice
Put the accrue parked invoice list on I drive I:\Accounting\PL\2008
The policy and process for GR reverse:
Mark reasons on printed PO for GR cancel
For amount < RMB500k, approval from Brand GM + Brand controller + Accounting Director are required
For amount > RMB500k, approval from Division GM + Division controller + Accounting Director are required.
For corporate, R&D, and DOA, approval from Budget Manager + Corporate controller + Accounting Director are required.
The policy and process for Accrual for Missing GR:
This is only for running out the information then pass to controller for tracing GR, accounting must not to post the accrual for missing GR.
Test run this report around 20th of each month
Put the accrue missing GR list on I drive I:\Accounting\PL\2008

15. Agenda
Invoice Verification Workflow Overview
Topic 1: Remind s to requester
Topic 2: Process Prepayment
Exercises

16. System Navigation Topic 1: Remind emails to requester – Parked Invoice
New
If the invoice is parked, the requester will receive an
Requester instruction to accounting according to the situation: dunning supplier, entering the missing GR, activating the final delivery flag, etc.

17. System Navigation Topic 1: Remind emails to requester – Subsequent Delivery
New
If the subsequent delivery is request, the requester will receive an
Requester instruction to accounting according to the situation: dunning supplier, entering the missing GR, activating the final delivery flag, etc.

18. System Navigation Topic 1: Remind emails to requester – Blocked Invoice
New
If the invoice is blocked for payment, the requester will receive an
If the requester approved, the PO will be re-approved
If the requester reject, the requester should contact vendor and inform accounting to solve.

19. Agenda
Invoice Verification Workflow Overview
Topic 1: Remind s to requester
Topic 2: Process Prepayment
Exercises

20. System Navigation Topic 2: Prepayment (Overview)
New
How do I process prepayment and finish whole prepayment process?
In SAP R3, use T-code: F-43. And use T-code: MIRO/FB60, F-44, MRBR,
MIR7, YFD1.
Book prepayment and release payment
F-43 is for booking prepayment.
Book normal IV or book parked invoice
MIRO/FB60 is for processing invoice verification for PO/EPR,
MIRO is also for processing parked invoice
Note: The difference between normal IV and Parked Invoice for Prepayment (booking text and follow up report).
Offset prepayment and IV
F-44 is for offset vendor and prepayment
Check the report and release the invoice
MRBR is for checking and releasing the blocked invoice
YFD1 is for checking parked invoice and processing invoice verification for the case that actual expense period is later than prepayment period

21. System Navigation Topic 2: Prepayment – Book Prepayment ( T-code: F-43 )
New 1
Support of PRF form, this form will apply to all prepayment case, including media.

22. Agenda
Invoice Verification Workflow Overview
Topic 1: Remind s to requester
Topic 2: Process Prepayment
Exercises

23. Learning Assessment Questions (1/1)
On what kind of case, the reminder will be sent to the requester?
How to deal with insufficient supporting documents?
Describe the related steps of prepayment, including payment and booking steps.

24. Congratulations! You have completed the Invoice Verification Workflow Course!!