High level functional overview Oracle Retail Invoice Matching application

2. Functional Overview

3. • An itemized statement of money owed for goods purchased /
shipped / services rendered
Invoice

4. • A receipt is a document stating that the goods that have arrived
to the store or warehouse. For the purposes of ReIM, only goods
associated with purchase order are considered.

5. Oracle Retail Invoice Matching (OReIM) is designed to
support the invoice matching verification with accuracy
and efficiency, ensuring that a retailer pays the
negotiated cost for the actual quantities received.
OReIM takes Invoices and matches them to POs and
Receipts, either manually or through the AUTOMATCH
process.

6. Automated PO, Receipt & Invoice Matching
Reason Code driven pre-defined actions for resolution
Supports both centralized and decentralized resolution
processes
Ability to match one to many, one to one or many to one
(receipts to invoices)
The application of the best payment terms for an invoice
Full integration with the Oracle Retail Applications,
therefore, minimizes interface development and
maintenance costs

7. Key Concepts:
Documents

8. Invoice:
Merchandise Invoice:
◦ Merchandise Invoice is typically the bill for goods or
services received from a supplier, which includes:
Merchandise Costs: Costs that are associated with items
Costs:
on documents
Non-
Non-merchandise Costs: Costs that are indirectly
Costs:
associated with invoice items (may not exist in the
merchandise invoice)
◦ The Sum of the merchandise costs and non-merchandise
costs is the total cost for a merchandise invoice.
Non-
Non-Merchandise Invoice:
Invoice:
◦ Non-Merchandise invoice is typically the bill for non-
merchandise costs only. These invoices cannot contain
items.

9. Notes:
Credit Notes:
◦ A credit note is a document received from the supplier,
often issued in response to a credit note request from the
retailer, which results in a reduction of the retailer’s balance
owing to the supplier.
Debit Memos:
Memos:
◦ A debit memo is a document created to support a deduction
from the invoice being paid. Deductions may result from a
price or quantity discrepancy. A Debit Memo also refers
supplier billing for rebates, RTVs, and so on. Debit Memos
can be created as ‘stand-alone’ (not supported by any
OReIM or RMS process).

10. Credit Note Requests:
Requests:
◦ A credit note request is a document sent from the retailer to
the supplier, requesting a credit note for an over-invoiced
amount or in support of various billing activities (e.g. RTVs).
If the supplier does not satisfy a Credit Note Request,
OReIM provides the ability to convert it into a Debit Memo.
Credit Note Request can be created as standalone
documents.
Memos:
Credit Memos:
◦ A credit memo is a document created to refund a supplier
for an under-invoiced amount. Credit Memos can be
created as a dispute on a Debit Memo. Credit Memos may
also be created as standalone documents.

11. Key Concepts:
Invoice Matching Process

12. Matching Resolution Financial
Entry Phase
Phase Phase Posting

13. by:
Invoices can be entered/created by:
◦ Via EDI
◦ Manually
Single Entry
Group Entry
Group of Invoices to a Group of Receipts at a “Summary” level
Manual Mass Entry
Summary matching occurs in matching process
No Details (Line Items) are entered, only totals

14. match:
In OReIM it is possible to match:
◦ Merchandise Invoices against PO Receipts from
ORMS
On-line Matching
Automatically
◦ Credit Notes against Credit Note Requests
On-line Matching

15. • On-Line Matching provides users with the ability to match
merchandise invoices with available (unmatched) receipts.
• This provides more flexibility than the initial PO/Location
relationship.
• On-Line matching either matches a document, which is later posted
to the financial staging table, or supports creation and resolution of a
cost and/or quantity discrepancy.
• It is important to note that On-Line matching is only required when a
On-
auto-
group of invoices by PO/Location, in the auto-match process, result
in an ‘Unresolved’ or ‘Multi-Unresolved’ status The retailer only
‘Multi- status.
needs to concentrate in exceptions.

16. Level:
Summary Level:
◦ In summary level matching, invoice total extended cost is
matched against receipts total extended costs and is done
in the following way:
◦ Extended Cost is defined as the unit cost for an item
multiplied by the quantity (received or invoiced).
◦ Invoice Total Extended Cost = Total Merchandise Cost in
the Invoice
◦ Receipts Total Extended Cost = Sum of all receipt extended
costs linked to an invoice

17. Level:
Detail Level:
◦ In detail level matching, following things are done:
Invoice Line Item quantities against Receipts Line Items
quantities for the same item.
Invoice Line Item unit costs against Receipts Line Items
unit costs for the same item.

18. No Pre-
Cost Pre-
Matching
Fetch Invoices, Receipt
receipts and PO Exists?
Yes Summary One-to-
One-to-one Detail
Matching Matching Matching

19. Pre-Match:
Cost Pre-Match:
◦ This is only applicable on invoices where no receipt is
available for matching yet. This process compares the
invoice item costs to the PO costs in order to pre-empt any
cost discrepancies that may arise after receipt of the goods.

20. Matching:
PO/Location Summary Group Matching:
◦ This sub-process handles all the invoices in “Ready for Match”,
“Unresolved” or “Multi-Unresolved” status and the Receipts related
with the PO (assign to the invoice) that already exist in the system.

21. Invoices Receipts
Receipts for Total Extended Total
Invoices for Total Extended Total PO/Location Cost Quantity
PO/Location Cost Quantity
Receipt 1 50,000$ 2000
Invoice 1 50,000$ 1000 Receipt 2 50, 000$ 2000
Invoice 2 150, 000$ 5000 Receipt 3 100,000$ 2000
Totals: 200,000$ 6000 Totals: 200,000$ 6000
Status = ‘MATCHED’

22. Invoices Receipts
Receipts for Total Extended Total
Invoices for Total Extended Total
PO/Location Cost Quantity
PO/Location Cost Quantity
Receipt 1 50,000$ 2000
Invoice 1 50,000$ 1000
Receipt 2 50, 000$ 2000
Invoice 2 150, 000$ 5500
Receipt 3 100,000$ 2000
Totals: 200,000$ 6500
Totals: 200,000$ 6000
Status = ‘UNMATCHED’

23. Invoices Receipts
Invoices for Total Extended Total Receipts for Total Extended Total
PO/Location Cost Quantity PO/Location Cost Quantity
Invoice 1 50,035$ 1000 Receipt 1 50,000$ 2000
Invoice 2 150, 100$ 5000 Receipt 2 50, 000$ 2000
Receipt 3 100,000$ 2000
Totals: 200,135$ 6000
Totals: 200,000$ 6000
Status = ‘MATCHED’

24. One-to-
One-to-One Invoice Matching:
Matching:
◦ This sub-process handles all the invoices in “Unresolved” or “Multi-
Unresolved” status and the Receipts related with the PO (assign to
the invoice) already exist in the system.

25. Invoices Receipts
Receipts for Total Extended Total Status post
Invoices for Total Extended Total Status post
PO/Location Cost Quantity matching
PO/Location Cost Quantity matching
Invoice 1 50,000$ 5000 Matched Receipt 1 50,000$ 5000 Matched
Invoice 2 100,000$ 10000 Unresolved Receipt 2 25,000$ 2500 Unresolved
Receipt 3 35,000$ 2500 Unresolved

26. Invoices Receipts
Invoices for Total Extended Total Status post Receipts for Total Extended Total Status post
PO/Location Cost Quantity matching PO/Location Cost Quantity matching
Invoice 1 50,000$ 5000 Matched Receipt 1 50,000$ 5000 Matched
Invoice 2 25,000$ 2500 Matched Receipt 2 25,000$ 2500 Matched
Invoice 3 35,000$ 3000 Matched Receipt 3 15,000$ 2500 Unresolved
Receipt 4 35,000$ 3000 Matched
Receipt 5 75,000$ 10000 Unresolved

27. Line-
Line-Level Matching:
Matching:

28. Invoices Receipts
Invoice Lines for Unit Status post Receipt Lines Status post
PO/Location Item Cost Quantity matching for PO/Location Item Unit Cost Quantity matching
Invoice 1 550 Match Receipt 1 565 Match
- Invoice line Item 1 5000$ 100 Match - Receipt line Item 1 5020$ 105 Match
- Invoice line Item 2 10,000$ 200 Match - Receipt line Item 2 10,100$ 210 Match
- Invoice line Item 3 15,000$ 250 Match - Receipt line Item 3 15,030$ 250 Match

29. Invoices Receipts
Invoice Lines Unit Status post
Receipt Lines Unit Status post
for PO/Location Item Cost Quantity matching
for PO/Location Item Cost Quantity matching
Invoice 1 Match Receipt 1 Match
- Invoice line Item 1 5$ 100 Match - Receipt line Item 1 5$ 70 Match
Receipt 2 Match
- Receipt line Item 1 5$ 30 Match

30. Invoices Receipts
Receipt Lines Unit Status post
Invoice Lines Unit Status post
for PO/Location Item Cost Quantity matching
for PO/Location Item Cost Quantity matching
Receipt 1 550 Unresolved
Invoice 1 550 Unresolved
- Receipt line Item 1 5000$ 100 Unresolved
- Invoice line Item 1 12,000$ 100 Unresolved
- Receipt line Item 2 10,000$ 200 Match
- Invoice line Item 2 10,000$ 200 Match
- Receipt line Item 3 10,000$ 250 Unresolved
Invoice 1 550 Unresolved

31. It is assumed that auto-match will not be run during the day
when there are users online interacting with the system –
Auto-match must only be run at night.
It is assumed that invoice unit cost and the order’s unit cost
are expressed in the same currency. Auto-match will not do
any currency conversion.
It is assumed that quantities on the invoice are expressed in
the same unit of measure as quantities on the receipt. Auto-
match performs no unit of measure conversion.

32. • Credit Notes can also be matched against Credit Note Requests in
Invoice Matching System.
• The On-Line Credit Note Matching process is identical to the
Merchandise Invoice Matching process:
• Summary Level for Credit Notes against Credit Note Requests
• If Summary match is not possible, then the user needs to go
thought the detail match, creating discrepancies as needed.

33. • Only performed if Supplier and Location have same VAT Region
• VAT information must be entered at invoice header and detail levels
• Header VAT breakdown can default from details
• The Calculation Tolerance allows for rounding differences between
header and detail
• VAT on the invoice is validated against VAT on the RMS tables

34. • Three main options for handling VAT in ReIM:
• Reconcile VAT
• Flags invoice details as having VAT discrepancies if the invoice
item VAT does not equal the system item VAT
• Reconciliation must be done on the invoice details before
matching
• Always Use Invoice VAT
• Writes an audit record if invoice item VAT does not equal
system item VAT
• Invoice is processed using the invoice VAT
• Always Use System VAT
• Does not allow invoice to be saved if invoice item VAT does
not equal system item VAT

35. Discrepancy is generated when either of the following are
out of tolerance between the invoice and receipt
◦ Quantity
◦ Cost
◦ VAT
Discrepancy resolution process allows the user to assign
reason codes to discrepancies in the system.

36. Supplier has the reason: The cost stated in the invoice is the agreed one
reason:
and by mistake was incorrectly registered in ORMS.
Retailer has the reason: The supplier is charging an incorrect cost and
reason:
should be debited.
Based on each type of situation mentioned above, the user needs to tell
the system the correct action to apply as shown below:
Receiver Cost Adjustment
Credit Note Request Cost
Debit Memo Cost
Discrepancy Write-off

37. Supplier has the reason: The quantity in the invoice is the correct received
reason:
and by mistake was incorrectly registered when it was received.
Retailer has the reason: The supplier is invoicing an incorrect quantity and
reason:
should be debited.
Based on each type of situation mentioned above, the user needs to tell
the system the correct action to apply as shown below:
Receiver Unit Adjustment
Split Receipt
Credit Note Request Quantity
Debit Memo Quantity
Discrepancy Write-off

38. The tolerance levels setup defines the amount of variance allowed between
an invoice and a receipt.
If the variance is within the defined tolerances, then the invoice can be
considered a match.
OReIM allows the user to define the tolerances at system level, supplier
level or department level.
The types of tolerances can be Summary Total Cost and Summary
Quantity, and Line Level Cost and Quantity.
Differences can be in favor of the supplier or retailer.
The tolerance can be defined in ranges. The lower limit is included when
calculating variance, while the upper limit is excluded.
The Values of tolerance can be an amount or percentage.

39. The reason codes setup allows the user to maintain reason
codes used to resolve discrepancies between receipts and
invoices.
Associated to a reason code is an action that helps the user
to resolve a discrepancy.

40. OReIM exports to a standard interface of data for Oracle
Financials Accounts Payable and/or General Ledger:
◦ Matched Invoices and Approved Documents
Merchandise Invoices matched through auto-matching and
on-line matching;
Credit Notes matched on-line with Credit Note Requests
Pre-Paid Invoices
Non-merchandise Invoices
Write – Offs