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Need to deduct a percentage or a flat amount from a vendor’s invoice? Here’s how…

Need to deduct a percentage or a flat amount from a vendor’s invoice?  Here’s how:

  1. Setup a distribution code on AP05.3 as a percentage and indicate the account that the amount should go to. You can actually setup two or more different percentages to distribute to two different accounts. Make the percentage a negative percentage when deducting an amount from the invoice.
  2. On the vendor’s AP10 record on the Default Tab add the distribution code. It will default onto the invoices and automatically deduct the percent or percentages specified on the AP05.3 form for the distribution code.

  1. You may have to adjust the invoice total amount to reflect the deduction(s) to be in balance.

Can you have a single BL & AR company and have transactions post to more than one GL company?

The short answer is no.

However, there are some creative ways to accomplish having a single BL & AR company and still booking information to various GL Companies.

Option 1: Using allocations and getting creative with your Process Levels and possibly accounting units, you can move the amounts to various companies using the allocation module.

The AR process Level setup has a default accounting unit that allows you to book all transactions for this process level to the various accounting units and then setting up an allocation to transfer those amounts at the end of each period would allow you to see the AR amounts on your various GL companies in the financial statements.  I would make these allocations auto reversing so that you can show what you need to for financial reporting only.

Option 2: Setup the various AR and BL companies and use the National Account relationship for your processing.  This option will allow everything to book in the correct company, and still allow you to process payments and adjustments, produce various reports, create consolidated aging reports and all other AR reports.

So as often is the case, you can get what you want, you just need to think it through and see if it will work for your needs.

Are you thinking about integrating an external project system to your ERP?

There are several things that you need to take into consideration:

  1. What are the accounting needs?
  2. When do the commitments need to be booked in the GL?
  3. Budgets:
    • Do you want a budget to be tracked in your external Project tracking system?
    • Do you want a total not to exceed budget in your ERP to make sure someone is notified when the budget is exceeded?
    • Do you want a detailed budget in both places?
  4. If there is retention from supplier invoices to be paid at the end of the project, when does the retention need to be booked?
  5. Where is the project initially setup? In the external project tracking system or the ERP?
  6. What are the touch points that need to be considered when determining what the interface points are?
  7. How will your ERP know when the project is complete so it can be marked as closed?

Changing Prices on Reqs and POs

Can’t Change Pricing on a Requisition or a PO?

There are settings in the Buyer (PO04) or Requestor (RQ04) setup.  It allows control over defaulting in pricing from any contracts or vendor agreements that you might have in place.  If you want a buyer or a requestor to be able to change the price on a PO or a Requisition, then consider the following changes:

 

PO04:

At the bottom of the Main tab in PO04 – you can setup a buyer to allow unit cost overrides from different costs.  In this case, the user can’t override a cost that defaults in from a vendor agreement or Strategic Sourcing (Contracts).  However they can override the cost on a PO line item if it defaults in from the last PO or Last Cost (Invoice cost or adjusted cost).

 

RQ04:

At the bottom of the Main tab in RQ04 – you have similar options.  This user does not have the ability to override any cost that might default onto a requisition.

Importance of Creating a BRD

Creating a new interface? Doing an Upgrade? Don’t forget the Business Requirements Document (BRD)

Often we go through the process of meeting and discussing different aspects of a project.  Those meetings are essential to understanding what is needed to be done.  A good BRD is basically a bible for all to refer back to during and even after the process to make sure that everything has been done at the level that was decided upon.

It is also a good way to make sure that everyone goes into the project with the same understanding. It is important to keep the BRD up to date with any changes that are decided upon.  This limits overlooking small aspects of a project that might have been referred to in – when did that email get sent again?

Based on client needs, we put together a BRD that reiterates what we think the client said.  When you review and approve it, it means we are both are working under the same premise.

It helps to eliminate those famous cartoon moments:

Considering a Divestiture? Here are a few things to consider

Considering a Divestiture?  Here are things to consider:

History: How much data do you need to extract to send with the divested division/company?

Consider each module that currently has data and determine if there is a similar module in the new system. If there isn’t a similar module in the new system, then how will the data be accessed? Possibly a separate database that stores the information for lookups as needed.

Fixed Assets: Do you have assets that need to be moved with the divested division/company?

What are the criteria for which assets need to be moved with the divested division/company?

What date will these assets be last depreciated in your current system and how will the depreciation continue in the new system?

Will you keep the original in-service date and depreciation history and continue depreciating the same in your new system?

AP Payments:  How will you handle bank reconciliations and payment voids that occur after the division/company is divested?

Will there be on-going communication for this information to be sent?

Will there be a complete pay-off in the current system so that AP starts clean in the new system with no open invoices?

Do you have a consolidated AP process now that needs to be split into multiple AP processes? If so, when should you start this process of separation?  Especially important if you have any EDI or other interfaces to AP that will need separation as well.

Vendors: How will you notify Vendors that invoices after a certain date should be handled differently? Are your vendors even aware that there are two different divisions or companies that they are currently billing? It is very important to start working with your vendors and any 3rd party AP interfaces sooner than later.

Purchases: How will any open POs and/or requisitions be handled?

Make sure that you have enough inventory on hand for the divested division/company prior to cutting off standard replenishment.

 

 

Acquiring a new Hospital? Here are some things you should consider…

If you are acquiring a new hospital in the near future, below are 5 things to consider:

  1. Will adding the new hospital cause a difference in your GL structure?
    • Are there different management hierarchies that need to be addressed in the new departments/cost centers?
    • If you are using automated flows for approvals will the current structure work for the new location as well?
  2. Localized vs. Centralized purchasing and AP
    • It is often thought that just centralizing purchasing and AP is the norm when acquiring a new hospital. This is often more difficult to achieve then it seems on paper.
    • There are item number differences – how will those be handled? Is there some normalized data in the item master that will allow for consolidating the item master? Does the new hospital provide specialty services that requires adding many more items into the item master? Who will maintain the new items?
    • There are long term contracts in place at both locations – often different prices and terms – Will these stay separate or renegotiated?
      • Different locations often have different sales reps for the same suppliers. How will these relationships be affected? And what affect will it have on the local service if the local rep is no longer involved?
  3. What kind of reports are used at the new location that are not used currently in-house? Are the reports necessary? If these are not canned reports- how will the reports be created and maintained?
  4. What amount of history is necessary to bring over to the new system for each module that is being transferred to your ERP? How will older data be accessed when needed?  Will the old data be available for research?

How are Recurring Journal Entries Approved?

When you journalize a Recurring Journal Entry, it goes through the standard JE approval flow. There is no delivered flow that looks at the Recurring Journal.

If you want the Recurring Journal Entry to be approved once when it is created and not approved each time it is journalized, a Custom IPA will need to be created to do that.

If you want changes on the Recurring Journal Entry to be re-approved when generated, make sure your custom trigger kicks off the IPA every time the Recurring Journal Entry is released.

You may then want to modify your JE approval flow to exclude transactions with the RJ system code since it was already approved – both initially and when it was changed.

The Problem of Creating Purchase Orders for Store Local Purchases

The procurement modules in large ERP systems are great for buying in bulk and keeping stock supplied for your larger purchasing needs.  Usually items are shipped to a receiving dock and are received into the ERP system by the receiving personnel.  This makes doing AP matching viable for these purchases.

What do you do with the items that your local store needs that are not shipped to a warehouse for distribution?  What about when the items are not part of a current contract or even needed on a contract? A store may need light bulbs for their light fixtures, for example, and the local manager has the authority to place an order for them without getting them in his regular warehouse deliveries.  This type of local purchase does not need approval beyond the store manager.  Waiting for a long process to establish a local supplier of light bulbs could leave the store in the dark before the process completes.

You still want these local store purchases to have an approval process that is tracked for audit compliance and a way to know what your commitments are.  How do you deal with these purchases now?  Wouldn’t it be great to have a local purchasing solution that doesn’t require a receiving department and still allows you to know:

Who approved the order

What your total corporate commitments are

Where you purchased something before for when you need to purchase them again

A solution is coming – stay tuned for more information soon!