In procurement process in large corporate generally raise a bulk (Monthly/Quarterly/Half yearly/Yearly) Purchase Order (PO) on Vendor/Business partner based on the business Sales plan. Delivery and Invoicing from the supplier can be in multiples.
As a business process, payments are processed against a Purchase Order rather on individual deliveries.
When a customer is invoiced with a reference of a Purchase order, customer payment will only refer to a purchase order in the remittance advice.
Anna is a financial analyst responsible for process collection. Her day starts with huge number of emails with payment advice as attachment. Anna should scan all the attachments and prepare data to process the collection from customers. There are remittance advice from few customers which have an Invoice reference and deduction made on the invoices paid by the customer. The challenge Anna have with those remittance advice which don’t have invoice reference, rather customer payment is with reference to a purchase order. Anna has to get into detailed analysis of the payment order and match the quantity delivered and invoiced and match the amount with the details available on the payment advice sent by the customer.
Anna spends half of her time in a day to get the details of Purchase order paid by the customer on remittance advice. She reports the challenge to her supervisor Rohan.
Rohan understood the challenge and effort spent by Anna on daily basis. Rohan reaches to IT Consultant to provide a Solution. Zubin is IT Consultant who understood Anna’s challenge and proposes an RPA (Robotic Process Automation) to Rohan.
When a customer is invoiced with a reference to a Purchase order, customer payment will only refer to a purchase order in the remittance advice. The logic of payment matching is
- Purchase Order number
- Customer number
Few Customers give reference of the Invoice reference number on the payment reference sent to bank.
Payments received with reference to a Purchase order or Invoice reference should be processed automatically without manual intervention.
Zubin IT architecture had proposed a solution, Purchase order number to be updated at Sales Order header level. When a billing document is posted with reference to the sales Order, Purchase order number will be copied into header reference field of the financial document (Customer open item). When payment is received from customer against purchase order reference, system should be checked, and clear customer open items based on the header reference field.
- Update the purchase order in Sales Order, field “VBKD” customer reference
- Billing document has a copy function update the header reference (XBLNR) when billing document is posted into financial accounting
- Purchase Order (updated in Sales Order) will be updated in Accounting document (RV document type from SD module) in field name Reference (XBLNR)
- SD invoice reference is updated in field payment reference (KIDNO)
There are two proposed solutions for Automation Cash application when payments are received in the bank statement.
- Cash application using Invoice reference in MT940 BAI format
- Cash application using Purchase Order reference in MT940 BTC format
Solution option 1: – Customer payments based on Purchase order
Sales Order (20167) with reference to Purchase Order-4500009000
Solution option 2: – Customer payments based on Invoice Number in MT949 (BAI format)
How we can achieve the above process automation
- In customization in OT83 setting, in Customization of assignment of external transaction types SAP has a interpretation algorithm “026: Ref doc no – search with preceding zeros”. When we use this algorithm, system searches for reference document number for clearing.
- In customization in OT83 setting, in Customization of assignment of external transaction types SAP has a interpretation algorithm “001: standard algorithm”. When we use this algorithm, system searches for payment reference document number for clearing.
- Copy function to copy purchase order to billing document (please check with SD module consultants)