Monitoring

In order to secure the quality of the P2P process output, P2P clerks are responsible for checking and
reporting the following items on a regular basis for and to the concerned local units:

1. Vendors with a debtor balance

Extract vendors which need to pay the company, instead of the company paying them. These

vendors will be dunned (sending of reminder letter) to address the due payment to them.

2. Items older than 4 weeks

Items older than four weeks have to be cleared by the P2P clerk: he/she contacts the designated
approver of the invoice, investigates the reason for non-approval and requests that the outstanding
item should be cleared or rejected.

3. Items over specific amount/sensitive items

Here the check is on items booked over a specific value (for control reasons) and on specified
sensitive items. Both the threshold and the sensitive items are agreed by the local unit. Monthly a
report on these items will be delivered from the SSC to the local unit F&A manager.

4. Double postings

SSC is running the duplicate analyzer. Two related documents are reviewed whether they represent
two separate instances. When an actual double posting is found, one of the documents is blocked
for payment. If both have already been paid, the amount is claimed by the P2P clerk back from the
vendor.

5. Deleted workflow items

Deleted items out of the invoice verification workflow described in chapter 3. These deletions must
have a reason stated in the system; for control purposes.

6. Asset acquisitions

Check 5% of assets (at least 5 assets): whether it should b class 1020 (Low Value Asset), correctness
of asset class, net amount per one piece.

7. Asset retirements (sales, scrapping)

Check 5% of assets (at least 5 assets): whether signed sales documentation is attached, profit/loss on
retirement, customer name.

8. Asset transfers (Intercompany)

Check 5% of assets (at least 5 assets): whether the transfer was correct. Report is typically empty.

9. Assets with goods receipt, without invoice receipt

On the day when depreciation run is done: Run the report again.
 10. Asset-related costs in P&L

Verify 5% of postings (at least 5 postings) whether it was really an expense, or whether it should
posted as asset.

11. Check blocked vendors with open items - weekly before payment proposal

Follow up with local F&A/HR-Payroll on open items. If they agree with payment, vendor has to be
unblocked by VMD team before payment.

12. Check vendors marked for deletion with open items - weekly before payment proposal

Same as previous report

13. Asset master records with blocked cost centers, profit centers and internal orders

Load variant "SSC", which contains all company codes migrated to BSCE.

14. Run report on Dummy assets; create asset master records - weekly

Create asset master records for purchase orders that are in the result of the report.

15. Check invoices posted incorrectly with future invoice date

Payment Process

Payment process
When an invoice has been released for payment (e.g. after the approval in the invoice booking process) it can be paid-
out to the vendor.
As a standard a Shared Service Center will make outgoing payment runs with a fixed schedule. In most cases there will
be a weekly payment run. Besides standard payment runs, the SSC also has an option for an exceptional payment run,
where urgent items on request can be paid out immediately.

The description below is based on a standard payment run:

Standard payment types included in a payment run can be: Vendor invoices, Customer reimbursements, Netting items
and Intercompany payments.
Normally payment types as Tax payments, Salary payments, Cheques are not part of the A/P payment run due to their
country local dependency or sensitivity.

 Step 1: The P2P clerk starts the payment program (transaction F110). The 'run date' is entered and by entering
parameters, specific filters can be set on the full payment range. As standard all vendors will be chosen as a range, so
that every applicable document will be included in the run.
After this the clerk is able to produce a payment proposal list. Firstly, this list has to be verified/approved by the local
unit. In this step individual payments can still be altered.
 Step 2: After payments have been reviewed, possibly altered, and eventually approved by the local unit, the P2P clerk
can excecute the actual payment run. At the same time actual FI payment documents (KZ type) are booked (Vendor <->
Bank).
 Step 3: The P2P clerk uploads the payment documents created by the payment run (KZ, number range) into the online
payment tool in ISP (this is a different tool compared to transaction F110!).
After upload the tool creates/sends ISP work items to defined payment approvers in the local unit. These users are
authorized to sign payment orders for their bank.
In the work item the local payment authorizer enters the tool via a hyperlink in the item and has the possibility to review,
to analyse and eventually to approve the payment documents with a digital signature. Two digital signatures are
required before a payment document can be sent to the bank. Whenever a second signature has been set to the
payment document(s), the tool sends the payment order to the connected bank (via an online connection), which then
excecutes the actual payment.
 Step 4: As last step, the tool (automated) will send out payment advises by email to the payment receivers. This only
happens in case this email address is maintained in the master record from the concerned receiver (e.g. vendor master
record). After these steps the P2P clerk will archive the payment list from this run and by this step the process is
finished.

Request to Receipt
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Request to Receipt
The process 'Request to Receipt' covers the procurement activities within local organizations. The responsibility for this
process stays with the local units and the Global Purchasing Organization (GPO). Based on the requirements by the
different Lines of Business (LOB) goods or services are ordered via the Enterprise Buyer Professional (EBP) system or
directly using the ERP system. A requestor expresses his needs to the Purchasing department that contacts the
conerned suppliers for different bids. After the bid selection, a shopping cart is created by the Purchaser. Once it has
been approved by the manager's cost center or the Managing Director, the shopping cart os transformed into a
purchase order that is sent to the supplier.
Once the service or the goods are delivered the purchaser validates the good receipt to launch the payment bill.
 Period Close
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Period Close
Closing guidelines and timeline will be communicated for every month-end closing and year-end closing by Corporate
Finance Reporting (CFR) to both the local unit F&A responsibles as to the SSC clerks. Both teams have a joined task to
bring each closing to a timely and successful one.

- Prepare and post accruals

At the end of each period we need to make sure that all expenses are booked for all goods and services delivered. For
invoices not yet received/booked there is therefore a need to reflect these in the financial statements.
Bases on inputs such as invoices from the rejected invoice workflow, expectations from local departments such as
marketing, checking of accrual relevant accounts, and future obligations extracted from "open purchase order reports".
There are as well some accruals for Parked items and rejection invoices. The basis of these accruals are coming from
ISP standard report run by SSC clerk and this proposal is then sent to the local unit's responsible for approval and
review.
After approval the local unit will request to General Accounting team (see process GA) at the SSC via a posting
template to book the final accrual amount(s).
- Reconcile (settle/clear) transitory accounts
At the end of each period there is a need to reconcile transitory accounts, such as intercompany transitory accounts. In
this case the SSC-clerk checks if the
accounts' balance is zero. If this is not the case, the clerk contacts the respective person at the concerned subsidiary
from where the booking is missing. He or she needs then to instruct either their local or SSC responsible clerk to make
the missing posting.
The missing invoices/goods receipt accounts are also checked. On the day of period-end closing, the SSC clerk
prepares an account statement and checks whether the balance of the goods receipt account is equal to zero. The list
of missing invoices is printed. If necessary, the local purchasing department is contacted in order to obtain the missing
invoices.
- Reconcile vendor accounts
Depending on the Service Level Agreement with the local unit, the SSC clerk sends reconciliation statements to
vendors. A possible agreement could be for example: The top 10 vendors are reconciled every month and all vendors
are reconciled once a year.
The SSC clerk examines the reply sent back by the vendors. In case the reply agrees with the ISP system account
balance, the process ends here. In case of a mismatch, for example due to a missing invoice they contact the vendor in
order to obtain a copy of the concerned document. The document can then be processed in the invoice booking process
described earlier. If the mismatch reason is an improper posting by SSC, the AP clerk reverses the improper entry.
Then the original invoice is routed back into the regular invoice processing workflow.
It is possible that the vendor itself sends the SSC a reconciliation statement. The activities are then similar to described
above. In case there is a match of balance, checked by the SSC clerk, the local unit's responsible for A/P will sign the
vendors reconciliation statement, which is then sent back to the vendor.
If the statement mismatches, the SSC clerk fills out a mismatch report and/or prints a separate account statement from
the ISP-System and sends it to the vendor/auditors.
- Provide audit support/prepare country specific reports
In period-end closing activities the SSC-A/P team provides support for the local unit, in ways like creating and sending
out vendor reconciliation letters (in most cases this is a year-end activity).