Exploring the Automated Invoice Settlement (2LH) Scenario

Objective

After completing this lesson, you will be able to execute the end-to-end process steps of the Automated Invoice Settlement (2LH) scenario.

Introduction

This brief dialogue between consultant Julia and supply chain manager Paul highlights Automated Invoice Settlement as an additional opportunity to streamline and automate stock procurement processes.

Benefits

The Automated Invoice Settlement process is designed to automatically generate supplier invoices at regular intervals, reducing manual effort and improving efficiency.

By automating key steps in the procurement cycle, it contributes significantly to streamlining and optimizing the overall supply chain.

Process Description

The graphic shows the Automated Invoice Settlement process: the supplier does not send invoices for your purchase order. Instead, you have the system automatically create an invoice based on the goods receipt. The invoice is created based on the data from the purchase order and the associated goods receipt.

If you want to use the self-billing process, you must first reach an agreement with the supplier that they will not submit invoices for purchase orders or scheduling agreements.

Instead, the system automatically generates invoice documents based on the purchase order and the corresponding goods receipts. These goods receipts are then settled, and the supplier is notified of the automatic settlement of their deliveries.

This self-billing procedure is also known as Evaluated Receipt Settlement (ERS) or the credit memo process.

Prerequisites

As mentioned earlier, Automated Invoice Settlement must be agreed upon with your supplier. This agreement is reflected in the system by setting a specific indicator in the supplier’s master record.

In addition to this, there are several other system-side prerequisites that must be fulfilled.

Let's briefly review the prerequisites for Automated Invoice Settlement.

Prerequisites for Automated Invoice Settlement

The following prerequisites must be met before you can automatically settle goods receipts for a supplier:

The indicator for automatic goods receipt settlement (Evaluated Receipt Settlement indicator) must be set in the supplier master record.
A payment terms key must be entered in the header data of the purchase order. You can enter a default value for the terms of payment in the supplier master record in the purchasing organization data.
The following indicators must be set in the purchase order item:
- Evaluated Receipt Settlement indicator: This indicator is defaulted in the purchase order item and can only be maintained if it is already set in the supplier master record.
- Goods-Receipt-Based Invoice Verification indicator: This indicator can be derived from the purchasing organization data in the supplier master record or from the purchasing info record.
- Tax Code : The tax code can be set manually in the purchase order item. The tax code can also be transferred from the source of supply into the purchase order.

Execute Automated Invoice Settlement (2LH)

Watch the interactive demo to learn how to prepare and run Evaluated Receipt Settlement (ERS).

DemoStart Demo

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