ENHANCED program – Shopfloor 1 module

Invoice matching

21st of April 2016 (V2)

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 Invoice validation before payment

 Situation as of today: As usual

Late invoice validation Accounting is late!!
 Delays in payments
 Risk to block the plant

 The reality is a little more complicated: Notion of 3-Way Match (3WM)

 All Invoices need to be matched with Faurecia Good Receipt and Price before payment.
 Various actors are involved in the flow which should result in invoice booking.

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 Invoice validation before payment

 Objectives
 We must secure cash-out  We must pay no more than what has been provided.
 We must pay on due date  Faurecia image + Risk of vendors supplies rupture.
 We must secure inventory  Our inventory is exactly what it has cost us, not more, not less.

 The 3WM documents

1. Purchase Order (PO) that is prepared by the plant Purchasing department.
2. Good Receipt (GR) that is performed by the plant PC&L Receiving clerk.
3. Invoice Receipt (IR) that is done by Finance Shared Service Center (SSC) and will become part of the
plant accounts payables if approved.

If 3WM fails: the validation process will trigger an NRFT validation / verification flow.

 NRFT (Not Right First Time)

 An invoice document is called NRFT if it has triggered at list 1 workflow requiring a validation, a
clarification or an action to be performed outside of AP department perimeter.
 The duty of Finance Shared Services is to ensure Faurecia is not paying more than what has been really
provided and agreed with our suppliers.
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 Invoice validation before payment

Rule is 1 ASN, 1 Delivery Note #, 1 Invoice # per Inbound Delivery #

(usually the documents #, parts # and quantities match between
Supplier Delivery Note signed by Receiving clerk & Invoice received by SCC)

 Issues in invoice matching as consequence of Good receipt misuse

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 Invoice validation before payment

 Issues in invoice matching as consequence of Good receipt misuse

To do Overwise

Receiving clerk manually enters (VL32N) or scans (Mii RCP_d) the External ID. Invoice matching impossible (Inbound
It must be equal to: Delivery # Vs Invoice #)
1 • The Supplier Delivery Note #
LISA suppliers could use MURN # as Delivery Note #

Double check to make sure no typo was made while filling the External ID field. Invoice matching impossible (Inbound
Examples : Delivery # Vs Invoice #).
2
• Delivery Note # 00132 is recorded as 132 in the system at receiving.
• Delivery Note # 00132 is recorded as 00123 in the system at receiving.
VL32N RCP_d

External ID field
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is critical
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 Invoice validation before payment

 The Receiving clerk MUST enter the SUPPLIER DELIVERY NOTE # in the EXTERNAL ID FIELD.
Otherwise, mistakes like the ones below generate back and forth communication between Faurecia
Payment department and the Material planners, delaying drastically the Supplier payment.

Bad practice 1:

Correct Ext. ID = LS0003842 (Delivery note #)

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 Invoice validation before payment

Bad practice 2:

Correct Ext. ID = LS0003869 (Delivery note #)

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 Invoice validation before payment

Bad practice 3:

Correct Ext. ID = 400160184 (Delivery note #)

Correct Inb. Dly Group = 0251334953

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 Invoice validation before payment

 What should a Receiving clerk do in these situations?

 The Receiving clerk has detected an underdelivery between Manifest (100pcs) and the Physical quantity (80pcs). Delivery
Note is equal to Physical quantity received.
Which quantity should be entered at Goods receipt? _________________________________________________________

 3 days later, the missing quantity (20pcs) from this supplier is received at the plant.
There is no Manifest in the Receiving board for it. What should the Receiving clerk do? ______________________________
____________________________________________________________________________________________________

 The Receiving clerk has detected an overdelivery between Manifest (2000pcs) and the Physical quantity (2500pcs). Delivery
Note is equal to Physical quantity received. It is midnight and the corresponding Material planner is not on duty.
Which quantity should be entered at Goods receipt? __________ What should Receiving clerk do with this Manifest?
___________________________________________________________________________________________________
Why for? ___________________________________________________________________________________________

 A Supplier sends 2 Delivery Notes for Manifest MURN 0250124975.

Delivery Note #123 lists part # A: 100pcs. Delivery Note #456 lists part # B: 1000pcs.
Physical quantities received match with Manifest and Delivery Notes.
What should the Receiving clerk do in order to ensure Invoice matching? _________________________________________
___________________________________________________________________________________________________
And to force the supplier to correct its setup and prevent re-occurrences? ________________________________________

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 Invoice validation before payment

 Issues in invoice matching as consequence of Good receipt misuse

To do Overwise

If the quantity shipped by the Supplier is LESS than the Inbound Delivery:
• The Receiving clerk must change the Inbound Delivery to the physically • Payment of Supplier for parts not
received quantity and post Goods receipt with the corresponding External ID #. received.
3 • Whenever the initially missing quantity is delivered: the Material planner must • Invoice matching impossible for
have placed the Shortage manifest/Receiving list in the Receiving board. missing material if no new Inbound
Receiving clerk must post Goods by using this new Inbound Delivery and the Delivery is created.
corresponding External ID #.

If the quantity shipped by the Supplier is MORE than the Inbound Delivery:
• If the Material planner is on duty: The Receiving clerk must ask the Material
planner if the excess quantity is accepted.
4  If YES: the Receiving clerk must change the Inbound Delivery to the physically accepted • No payment for parts actually received.
quantity and posts Goods receipt with the corresponding External ID #.
 If NO: the Receiving clerk must ask parts to be loaded on truck, create a CMR and post • Payment for parts returned to Supplier.
Goods receipt with the corresponding External ID #.
• If the Material planner is not on duty:
 The Receiving clerk must change the Inbound Delivery to the physically received quantity
and post Goods receipt with the corresponding External ID #. The Receiving clerk must
inform the Material planner (NOK box + internal process), who will decide to return or not
the material. * When it concerns a Quality defect
 If a return is decided, the Material planner must place a Return Shipping Note in the and not excess material: JA10 => IN10
Receiving board at the date/time of return. The Receiving clerk will then post the Goods
movement must be performed before
shipping when excess material is loaded in truck. (transaction VL02).*
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VL02.
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 Invoice validation before payment

To move forward:
 Receiving clerk must always record MPM after each delivery.
MPM measure the adequation between physical quantity received and expected.
MPM reports are used by PC&L Material planners & Purchasing to push Supplier improving their
performance.

 If it becomes reccurrent, Material planner can record a L34.3 claim in QSS (“No Supplier alert before
shortage”), which triggers QRCI and potentially a debit note.

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 Invoice validation before payment

 Issues in invoice matching as consequence of Good receipt misuse

To do Overwise

If a Supplier sends multiple Delivery Notes per Inbound Delivery (Manifest / Invoice matching impossible (Inbound
Receiving list): Delivery # Vs Invoice #)
• The Receiving clerk must change the Inbound Delivery to the physically
received quantity of 1 Delivery Note* and fill External ID # field with the
corresponding Delivery Note #.
• The Receiving clerk must then create additional Inbound Delivery(ies) * It is only possible to change the
matching every single other Delivery Note and post them with the quantities of an Inbound Delivery.
corresponding External ID # (Delivery Note(s) #). To add a part number: create a new
Inbound Delivery.

To move forward:
 Ask Material planner if all part # are set up with the same Unloading point : «(Auto) UnloadPt» field on ME32L.
If they are not, it generates automatic multiple Delivery Notes at Supplier; 1 per Unloading point.

 Record a L33.3 claim in QSS: “Incomplete ASN or DN. Multiple ASN or DN per Manif”.
This will request a QRCI from the Supplier and, if decided to, send them a debit note.

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 Invoice validation before payment

 Issues in invoice matching as consequence of Good receipt misuse

To do Overwise

If a Supplier sends a unique Delivery Note for parts listed on multiple Invoice matching impossible (Inbound
Inbound Deliveries, expected on the same truck (initial + Supplementary Delivery # Vs Invoice #)
Manifest):
• The Receiving clerk must change the initial Inbound Delivery to the physically
received quantity of the 2 Inbound Deliveries, fill External ID # field with the
unique Delivery Note # and delete the other Inbound Delivery.

To move forward:
 Ask Material planner to contact the Supplier and remind them the rule!

Rule is 1 ASN, 1 Delivery Note #, 1 Invoice # per Inbound Delivery #

 Record a L33.2 claim in QSS: “Manifest or Delivery Note missing”.

This will request a QRCI from the Supplier and, if decided to, send them a debit note.

Classification\_- FAURECIA - INTERNAL

Classification Date - 21/05/2017 22:52:10
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 Invoice validation before payment

 Issues in invoice matching as consequence of Good receipt misuse

To do Overwise

If a Supplier sends a Delivery Note listing parts NOT on truck: Payment of Supplier for parts not
• The Receiving clerk must ensure the Inbound Delivery show the physically received
received quantity, fill the External ID field with the Delivery Note # and inform
the Material planner that the Delivery Note is incorrect (NOK box + internal
process).
• The Material planner must inform Supplier accounting to correct the Invoice. If
the Invoice was already sent, Supplier Accounting will be able to prepare the
Debit note.

To move forward:
 Record a L34.1 claim in QSS: “Discrepancy between announced quantity and physical quantities”.
This will request a QRCI from the Supplier and, if decided to, send them a debit note.

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