Managing Old Receipts
and Purchase Orders
Mark Kirkland – Boise Inc..
August 27-29, 2012
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.
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.
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
QuestDirect.org
Boise Inc.. Background
•
•
•
•
Installed PeopleSoft in 1997
PeopleSoft Version 9.0
PeopleTools Version 8.51 (October 15th, 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)
QuestDirect.org
Boise Inc.. Background
•
•
•
•
•
•
HQ - Idaho
St Helens, OR
Wallula, WA
Deridder, LA
Jackson, AL
International Falls,
MN
• Salt Lake City, UT
•
•
•
•
•
•
QuestDirect.org
Waco, TX
Burley and Nampa, ID
Salem, OR
Sparks, NV
Hexacomb (13 BU’s)
Tharco (10 BU’s)
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?
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.
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
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).
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
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
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
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
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.
QuestDirect.org
Thinking about the Box
• Boise has been in this position for many years
• Is the problem
– Inside the box?
– Outside the box?
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
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
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
QuestDirect.org
Pagelets
QuestDirect.org
Pagelet – Match Exceptions by Buyer
QuestDirect.org
Pagelet – Overdue PO Lines
QuestDirect.org
Pagelet – Overdue Match Exceptions
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
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.
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
QuestDirect.org
Automated Process for Closing PO
• Buyers receive a report on the 10th 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 24th day of the
month, these PO’s are automatically Closed.
QuestDirect.org
Report
QuestDirect.org
PO Comment- Inactivity
QuestDirect.org
PO Comment – Mass Close PO’s
QuestDirect.org
PO Comment – Recon Workbench
QuestDirect.org
PO Comment – Manual Match Receipt
QuestDirect.org
Receipt Header Comment - Matched
QuestDirect.org
Q&A
• Thanks for showing up, do you have any
questions?
QuestDirect.org