Procure-to-Pay
Showcase
Presented by:
Cindi Stinebaugh, Purchasing
Gayle Stetler, Accounts Payable & Travel
Agenda
 Purchase to Pay Overview
 Importance of an Accurate Purchase Order (PO)
 Form 26 (Request to Change Order)
 ‘Confirmation/Goods Receipt’ Overview
 Current Process (3-Way Match)
 GR/IR Overview
 To Be Process (2-way Match) Update
 How an Invoice gets Blocked/Tolerance
 New Blocked Invoice Report
 New Blocked Invoice Process
Procure-to-Pay Overview
1
2
SRM
Shoppin
g Cart
3
Purchase
Order
4
5
Confirmation
(Goods Receipt)
Invoice
Payment
 Step 1 –A Shopping Cart is created through SRM
 Step 2 – Once a Shopping Cart is fiscally approved and sourced it is converted
into a Purchase Order (PO) and places the order with the selected
Vendor
 Step 3 – When the vendor delivers the items ordered, a Confirmation is
processed in SRM and posted in R3 as a Goods Receipt (GR) Step 4
- The Invoice is received from the vendor and posted in R3
 Step 5 – Payment is made once the invoice is matched to the PO and the
goods receipt.
Importance of an Accurate PO



Price
To expedite the processing of PO’s in Purchasing,
indicate how pricing was determined (i.e. website give the date, phone or email pricing – give
contact name and phone number). List in internal
note field.
Quoted prices - List Quote number on the
Purchase Order in vendor text and attach quote to
shopping cart– the vendor should invoice at the
quoted price. This helps avoid the blocked invoice
list and the business office of preparing a F26.
Importance of an Accurate PO



The end user may have already checked the price, we
just need to close the circle and list it on the PO. If
pricing is current and details listed on PO, Purchasing
does not need to recheck pricing, expediting the PO to
the vendor.
If there is no price information listed, Purchasing is
required to verify pricing. This may delay the PO in
being released to the vendor.
If a vendor list vendor is used, Purchasing will not see
the PO. If prices were not checked, a F26 may be
required. This may be to either change the PO or
release a blocked invoice.
Importance of an Accurate PO- cont
 Quantity

Accurate quantities help avoid blocked
invoices, out of balance situations in the
GR/IR account and preparing a F26.
 Changes to a PO (i.e. qty, price descriptions,
account assignment) in SRM can only be
made prior to any confirmations or invoices
posting. No changes may be made when an
asset is assigned to PO.
 Best practice – do not call vendor to add
additional items or quantities to a PO.
Goods Receipt (GR)/Confirmation
Overview (when required)
 Important to Confirm the actual line items that
are received.
 Confirm in a timely manner, invoices posted
without a Confirmation/GR will block the
invoice for payment and create an out of
balance situation in the GR/IR account.
Goods Receipt (GR)/Confirmation
Overview - (when required)
 Confirm the actual number of items received,
if you only receive 5 of the 10 you ordered
only confirm 5.
 All of these situations create an incorrect
account balance on the departmental
account.
Current Process (3-Way Match)
3 Requirements:
PO
 Confirmation
 Invoice

GR/IR (Goods Receipt/Invoice
Receipt)
Expense Acct
Goods Receipt =
DR
GR/IR (Acc. A/P)
Invoice Receipt =
DR
GR/IR (Acc. A/P)
CR
Vendor Payable
CR
 GR/IR Account is only out of balance
when the quantities between goods
receipt and invoice receipt DO NOT
MATCH on a line item basis.
Three scenarios affect GR/IR
 Goods receipt without invoice receipt
 Invoice receipt without goods receipt
 Goods receipt AND invoice receipt, difference in
quantity
 NOTE: New report ZFI_GR_IR_CLEARING is
searchable so you can see what is in GR/IR for
your area.
Scenario 1 - Goods Receipt without invoice
Scenario 2 - Invoice without goods receipt
Scenario 3 - Goods receipt AND invoice
receipt, difference in quantity
Ordered
15 at
$34.43
each
Received
11 at
$34.43
each
Did you really receive 11?
Why only invoiced for 7?
Are we going to get anymore?
Invoiced
7 at
$34.43
each
Scenario 3 - Goods receipt AND invoice
receipt, difference in quantity – cont
 If the receiver confirmed (in SRM) a quantity more
than what was physically received, have the receiver
do a return delivery
http://www.purdue.edu/purchasing/doc/How_to_Retur
n_an_item_in_SRM_or_delete_a_confirmation.doc.
If the receiver knows there will NOT be additional
items physically received the receiver may check the
last delivery box. This will relieve the commitment
and will not allow additional confirmations. Do NOT
check the last delivery box if you expect to receive
additional items.
To Be Process (2-Way Match)
2 Requirements:
PO
 Invoice

Blocked Invoices
 Invoices will be blocked for payment for one (or more) of three
reasons on a line item basis:
 Price is out of tolerance
 Quantity is out of tolerance
 Goods are not confirmed
 Review the PO History with tcode ME23N for details
Tolerance
 Tolerance for price has been set for 15%
above the line item price, up to $100.
 Tolerance for quantity has been set for 0%,
meaning that quantity must match exactly on
a line item basis or payment will be blocked.
 Find Out of Tolerance guidelines here:

http://www.purdue.edu/acctpay/doc/OutofToler
anceguidelines.doc
Blocked Invoices – Price out of tolerance
Ordered 3 at
$18 each for a
total of $54
Line
1
Invoiced for 3
at $46 each for
a total of $138
This invoice is greater than 15% more than
this line item, therefore, out of tolerance and
payment is blocked.
Blocked Invoices – Quantity out of tolerance
Ordered 12
at $6.50
each
Received
12 at $6.50
each
This invoice is out of tolerance
for quantity, but not price –
payment blocked
Invoiced for
15 at $6.50
each
Blocked Invoices – Not Received
Ordered 2 at
$1,415.99
No Goods Receipt!!
Payment blocked
Invoiced 2 at
$1,415.99
Blocked Invoice Process
 Report created for departments to identify their
own blocked invoices
 ZFI_Blocked_Invoice
 Searchable by many data elements
 Fund Center
 Vendor
 View PO using tcode ME23N to determine
blocking reason (Drill down from report)
 New process outlined at B@P
 Form 26 replaces email to ap@purdue.edu to
release OT invoices
F26 Process Updates
 Additional process for the F26 – authorize the release of
a blocked payment
 Headings renamed include Relieve Partial Remaining
Commitment, and Authorize Release of Blocked
Payment
 Explanation needs to be very specific






Give part number or describe item
Indicate line item(s)
Give dollar amounts and quantities
Indicate if the vendor needs a copy of the change
Answer the question, why is the F26 needed?
Example,
http://www.purdue.edu/purchasing/xls/F26_Blocked_Invoic
e.XLS
Example of Blocked Invoice F26
Why is this important?
 Account balances are not accurate, if there
are blocked invoices, or situations where the
GR/IR is out of balance.
 Avoid blocked invoices
 Avoid preparing F26’s
 Promotes work time efficiency
 Unpaid vendors might delay delivery of other
open POs
 GR/IR issues could remain unresolved