3 Replies Latest reply on May 12, 2010 8:04 AM by user5781213

    3-Way Match with Multiple Invoices

    769852
      This may be a basic Oracle iProcurement functionality question, but i have been unable to get a good answer. Any information will be greatly appreciated.

      I am currently using Oracle 11i iProcurement.

      The problem I am having is I am unable to perform a 3-way Match in the system on purchase orders that will use multiple invoices. Our vendors require a tiered payment structure (i.e. 50% due up front before shipment, 30% due when item has reached shipment destination, and 10% due after our engineers have inspected the shipment).

      We have been currently using a 2-way match for all of our purchase orders because when we apply the first invoice against the PO (50%), the PO will automatically close before we can receipt the goods against the purchase order.

      Our Invoice Receipt Close % Tolerance and Invoice Close % Tolerance are set at 0%.

      Our goal is to receipt the first 50% against the purchase order, have the PO remain open, and receipt the goods in Oracle after the 2nd or 3rd invoice application against the PO.

      Thanks in advance.

      Edited by: user13053863 on Apr 28, 2010 2:44 PM
        • 1. Re: 3-Way Match with Multiple Invoices
          john dickey, mccarthy
          Hmm, an interesting situation. What are the quantities on your purchase orders? Are they almost always a quantity of 1? Payables should only close a purchase order when quantity billed and quantity received is GT or equal to the quantity ordered. So if you order a quantity of 10, you could match for quantity 5 on the first invoice, quantity 3 for the second invoice, and quantity 2 for the final invoice. But since you don't receive the quantity until the 3rd invoice, you cannot match on receipts, so that would be a problem.

          Maybe you need to approach this from a different angle? Maybe you should look at the prepayments ability in Payables. Typically Prepayments will be charged to a Prepayment Account (asset). Say you have a purchase order for $10,000. You prepay $5,000 up front, so basically Debit Prepayment 5,000 and Credit Cash 5,000. Same for the next prepayment level - $3,000. Then you get the ordered material received. So you want to do an invoice for $10,000. Match the invoice to the purchase order. Apply the prepayments to the purchase order. Thus you get an entry something like Debit Inventory $10,000, Credit Prepayments $8,000, and Credit Cash $2,000.

          From an accounting perspecitive, you don't show the prepayments in inventory until received, but do show a prepayment asset. Which is reflecting what you really are doing I think.

          I have never worked for anyone who has had to do prepayments, but this is an area that you may wish to investigate as a possible solution for your situation. Good luck.

          John Dickey
          • 2. Re: 3-Way Match with Multiple Invoices
            769852
            Thanks for the input!

            I believe that prepayments would essentially capture the process like you said.
            • 3. Re: 3-Way Match with Multiple Invoices
              user5781213
              Hi,

              The way we proceed is the follows:

              We do receiving as before paying so before you pay you have to receive the amount you would like to pay at the percentage you like. and so on. The payable would then be able to match against the Receipt. You have to set the PO line to match on Receipt.

              I hope this could help
              Best