1. QuestDirect.org Managing Old Receipts and Purchase Orders Mark Kirkland – Boise Inc.. August 27-29, 2012

2. QuestDirect.org Abstract Whereas there are many automated PeopleSoft processes for closing PO's and Receipts, there are many transactions that do not meet the criteria to Close even though the transaction is essentially complete. Open PO's and Unmatched Receipts represent a potential liability to the company. Boise Inc.. has added two new strategies/policies to deal with these transactions, and uses several customized programs and Pagelets to achieve compliance.

3. QuestDirect.org Objectives Objective 1: Share with User Group Boise Inc..'s strategy on handling aging receipts and PO's Objective 2: Gain insight on how other companies handle these situations.

4. QuestDirect.org Boise Inc.. Background Boise Inc.. is a publicly traded company (BZ) Boise Inc.. was spun off by Boise Cascade about 5 years ago. www.boiseinc.com Boise Inc.. manufactures Paper, Packaging, and Newsprint, as well as specialty Papers like Label and Release products Leader in the Recycled Paper market

5. QuestDirect.org Boise Inc.. Background Installed PeopleSoft in 1997 PeopleSoft Version 9.0 PeopleTools Version 8.51 (October 15 th, 2011) Support for Boise Inc. and Boise Cascade, LLC – 27 PO Business Units – 134 Buyers (~135,000 PO Lines/Year) – 171 Receivers (~145,000 Receipt Lines/Year)

6. QuestDirect.org Boise Inc.. Background HQ - Idaho St Helens, OR Wallula, WA Deridder, LA Jackson, AL International Falls, MN Salt Lake City, UT Waco, TX Burley and Nampa, ID Salem, OR Sparks, NV Hexacomb (13 BU’s) Tharco (10 BU’s)

7. QuestDirect.org Why are we here today? Who has Unmatched Receipts > 60/90/180 days old? Who has PO’s that have been open for more than 60/180/365 days? Who is concerned in your company about the status of these documents? Buyers, AP, Controllers, Auditors? How did these documents get in this status?

8. QuestDirect.org Problem Purchase Orders and Receipts are sometimes left in a status that will not allow the system to close them through normal processes. If the Purchase Order or Receipt is left in this status but is actually complete, they continue to represent a potential Liability, and these create ‘noise’ for various stakeholders that has to be dealt with on a continual basis.

9. QuestDirect.org Back to the Basics A Purchase Order is a contractual agreement to procure goods or services There is an expectation that what is ordered is what will be received and paid. Without further changes to the Purchase Order, the PeopleSoft system has no way of knowing ‘intent’ of Open Purchase Order Quantity or Amounts

10. QuestDirect.org Contributing Factors Boise Inc.. typically requires a Receipt for all purchases of physical Materials. These Receipts go through Matching (a three way match) Boise Inc.. typically does not require a Receipt for Services (or we use Receiving is Optional), and we typically use Amount Only Purchase Orders. These PO’s will go through Matching (a two way match).

11. QuestDirect.org Contributing Factors Vendors are a major source of problems – Nature of transactions can present problems with application of cash, and ultimately late invoicing – Vendors are increasing the number of drop shipments, splitting up shipments and invoicing inconsistently – Vendors may not keep Buyers informed of credits or warranty work Communication – centralized Accounts Payable and decentralized Purchasing

12. QuestDirect.org Example – Receipt Left Open PO is written for Qty 2 – Two Receipts are written Qty of 1 – Vendor decides to not bill for second Receipt (warranty, good will, etc.) – Second Receipt will never Match – Since the Receipt will not Match, it will never Close

13. QuestDirect.org Example – PO left Open Boise Inc.. uses a tremendous amount of Blanket Purchase Orders. Example – 10,000,000 LBS of Caustic Soda for a fiscal year – 215 Receipts are written for a total of 9,000,000 LBS – All Receipts are Invoiced and Matched – 1,000,000 LBS of material are left to be received, but a new Blanket is written for next fiscal year

14. QuestDirect.org Accruals Receipts for Inventory Items accrue and are sent to the G/L on the day they are entered. Receipts for Direct Charge materials – Accrue the day the Invoice is entered – Accrue at month end through Direct Accruals Service Purchase Orders – Manually accrued at month end for Services received but not yet invoiced

15. QuestDirect.org Basic Problem A great deal of focus has been given to why Purchase Orders and Receipts are put into situations where they will not Close automatically (order of events can be problematic). There are Buyer errors on PO’s, Receiver errors, Vendor invoicing errors, problems entering Vouchers, and system errors. There is nothing systematic about human error and attention to detail.

16. QuestDirect.org Thinking about the Box Boise has been in this position for many years Is the problem – Inside the box? – Outside the box?

17. QuestDirect.org What can be done to help users? Training has not been as effective as desired Get more Information to the Users – Delivered Queries – Delivered Reports – Pagelets Systematically fix problem – Policy on Open Receipts – Policy on Open Purchase Orders

18. QuestDirect.org Delivered Queries The PeopleSoft Scheduled Query functionality delivers to the users email spreadsheets on the following: – Match Exceptions – PO’s that are eligible to Close (but have not) – Unmatched Receipts > 60/90 days

19. QuestDirect.org Delivered Reports The PeopleSoft Scheduled Report manager delivers to the users and Vendors the following: – Expediting Report (Buyers and Vendors) – PO’s that have not had any activity for 180 days. – Unmatched Receipts > 60/90 days

20. QuestDirect.org Pagelets

21. QuestDirect.org Pagelet – Match Exceptions by Buyer

22. QuestDirect.org Pagelet – Overdue PO Lines

23. QuestDirect.org Pagelet – Overdue Match Exceptions

24. QuestDirect.org How Receipts Close Receipts Reconcile– Runs twice a month Manually Match Individual Receipt Lines per Buyer Request Manually Match Mass Lines of Receipts by Buyer Request Per Policy, Automatically Match Receipts that are over 180 days old

25. QuestDirect.org How Purchase Orders Close PO RECON – Runs twice a month Buyer Override – Reconciliation Workbench Mass Closure Request by Buyer Per Policy, custom automated process to automatically Close any PO that has not had any activity for over 180 days.

26. QuestDirect.org Reopening Closed PO’s Although this is possible, Boise Inc.. has discontinued this functionality. Too many problems integrating PO’s after their initial Closure with third-party CMMS system (Maximo). Problem are compounded with further Invoices and/or Receipts Greater question on why a PO needs to be opened

27. QuestDirect.org Automated Process for Closing PO Buyers receive a report on the 10 th day of the month. Report lists all PO’s by Business Unit, Buyer, and Vendor Name that have not had any activity for 180 days Only Buyers with a PO in this status receive the report. Pending Buyer interaction, on the 24 th day of the month, these PO’s are automatically Closed.

28. QuestDirect.org Report

29. QuestDirect.org PO Comment- Inactivity

30. QuestDirect.org PO Comment – Mass Close PO’s

31. QuestDirect.org PO Comment – Recon Workbench

32. QuestDirect.org PO Comment – Manual Match Receipt

33. QuestDirect.org Receipt Header Comment - Matched

34. QuestDirect.org Q & A Thanks for showing up, do you have any questions?