Working with Invoice Management

For Invoice Management, several SAP Fiori apps were released with SAP S/4HANA. The most important ones for Invoice Processing are: Create Supplier Invoice, Manage Supplier Invoices, and Supplier Invoices List.

With the Manage Supplier Invoices, Supplier Invoices List and Create Supplier Invoice apps, SAP S/4HANA offers business users the possibility to create supplier invoices with or without reference to a purchase order, and to view and directly correct inaccurate supplier invoices. Invoice reduction, invoice blocking and the simulation function are also available within these apps. The same applies to the invoice statuses Hold, Parked and Saved as Completed.

Integration between the apps and object pages accelerates completion of the processing of supplier invoices.

In addition to the mentioned SAP Fiori apps, traditional SAP GUI transactions are also still useable and accessible as a tile on the SAP Fiori launchpad. An example of such an app is Create Supplier Invoice - Advanced (MIRO).

A received invoice is matched against other documents in a specific procurement process like the purchase order and the material document of the goods receipt. The system automatically identifies discrepancies between purchase order item price and quantity, and the supplier's invoice data. If an invoice has to be released, this can be done from the supplier invoices list. If a workflow for the release is active and a certain user is responsible for the release, this user can then release the invoice using the My Inbox app.

Features of invoice processing in SAP S/4HANA include:

• The SAP Fiori app Supplier Invoices List offers flexible and dynamic search capabilities.

• Direct navigation to object pages is supported.

• Reverse and release actions are available for already created supplier invoices.

• A business user can directly view draft invoices coming from the Ariba Network and can create the supplier invoice directly using the available data.

With SAP S/4HANA, users can flexibly search for a supplier invoice with the dynamic search options which are available in the smart filter bar.

As mentioned, the Manage Supplier Invoices app is one of the apps that can be used to create and display a supplier invoice based on a received document. It is possible to specify the purchase order items to which a supplier invoice relates. If the Simulate or Post function is used, the system compares the quantity and amount data of each supplier invoice item with the data of the related purchase order item. If goods-receipt-based invoice verification has been defined for a purchase order item, the system compares the supplier invoice data with the related goods receipt data. If the deviation is outside defined tolerances, the invoice is posted, but the invoice is automatically blocked for payment. If the system determines the responsible person, an approval process is initiated. The Supplier Invoices List app can then be used to display these supplier invoices. In the details view, a blocked supplier invoice can then be released or reversed.

SAP S/4HANA 2020 introduced a prepayment functionality within the Manage Supplier Invoices app. With this feature, it is possible to use prepayment for suppliers with whom a company has built up good business relations over a longer period of time. In the case of goods-receipt-based invoice verification, the invoice can be created without a goods receipt having taken place. This means that the invoice is to be posted to an account without invoice items but with header information including taxes, since it might not be possible yet to create the invoice items themselves. The amount is then posted against a clearing account and cleared with the final invoice posting.

If a user is authorized to do so, they can release blocked invoices directly from within the supplier invoices list, after having selected the detailed view of a list item.

Invoice collaboration provides fast access to accurate invoices for the accounts payable department. This is achieved through electronic invoice submission and automated verification. A standard integration into SAP Business Network/Ariba Network is provided in SAP S/4HANA.

To increase process efficiency, supplier invoices received from suppliers via Ariba Network show up as draft invoices in the Supplier Invoices List app. They can then be converted into complete supplier invoices.

If a supplier has no system from which they can upload an invoice to Ariba Network, they can use the PO Flip function.

PO Flip is a simple online process enabled by Ariba Network which allows a supplier to easily convert a purchase order received via Ariba Network into an invoice. It also allows for transmitting this invoice to the customer from which the supplier received the purchase order.

Suppliers can check the invoice and payment status using Ariba Network. This helps to reduce the required communication between customer and supplier.

SAP Ariba also offers a payment solution for suppliers called SAP Ariba Payables Payment Capability. For details about this solution, check https://www.ariba.com/resources/library/library-pages/sap-ariba-payables-payment-capability-global.

Benefits of Invoice Collaboration are:

• Resolving invoice exceptions while receiving digitally signed, legally compliant invoices over a cloud-based business network.

• Using a single network to receive invoices that suppliers can submit through standard digital interfaces.

• Verifying invoices automatically and sending them to accounts payable faster for approvals, making accounting and shared services more productive.

• Providing visibility about invoice status to the supplier.

• Reducing procurement costs by replacing a paper-based process with the automatic sending and receiving of invoice data.

• Reducing supplier calls about invoice statuses.

If a supplier is not able or willing to send invoices via the SAP Business Network/Ariba Network, SAP Ariba also offers an invoice conversion service. This means that the supplier sends a paper invoice to an SAP Ariba scan center, where the invoice is scanned and sent to the customer via Ariba Network.

SAP S/4HANA uses a specific authorization concept for supplier invoices which enables simplified handling, especially for invoice items without a purchase order reference.

The SAP ERP concept was based on checking header data against the item authorization object for all items. The system checked for all items if a user was allowed to complete certain activities.

With the SAP S/4HANA concept, the behavior of the system is more comprehensive. SAP S/4HANA introduces a header authorization object for invoices that enables the system to perform the following authorization checks:

• Check header data against the header authorization object (M_RECH_BUK). This authorization object checks the activities a user performs for the header company code.

  Note

  The authorization object M_RECH_BUK was extended to include the invoice release activity. It is, for example, possible to define that an account payable accountant is only responsible for posting and/or releasing supplier invoices.

• Check item data against the item authorization object (M_RECH_WRK). This authorization object checks the activities a user performs for the plant of the respective item.

With the Monitor GR/IR Account Reconciliation (Overview) app, it is possible to get an overview of the status of open items on the GR/IR accounts that need clarification. The goods and invoice receipts reconciliation can be analyzed by using KPIs for purchase order items and open FI items. After possible issues have been detected it is possible to navigate from the monitor to the list of items for GR/IR clarification. Then the details may be investigated, or processing can be started for purchase order items with not-matching goods and invoice receipts.

The analytical overview of the app is based on two types of key performance indicators (KPIs):

1. Purchase Order Items:

   The number of purchase order items can be displayed with the KPIs listed below by controlling area, company code, supplier, plant, purchasing organization, and material group:

   • Invoice Receipt Amount Surplus: This KPI shows the number of purchase order items for which there is an amount surplus in invoice receipts, for example, by company code.

   • Goods Receipt Amount Surplus: This KPI shows the number of purchase order items for which there is an amount surplus in goods receipts, for example, by purchasing organization.

   • GR Matches IR Amount: This KPI shows the number of purchase order items for which the amounts in goods receipts and invoice receipts match, for example, by plant.

   • GR/IR Reconciliation Processing: The purchase order items can be grouped by processor, processing department, status, priority, or root cause. It is possible to see the number of purchase order items that need to be processed, for example, by status.

2. Open FI Items:

   • Open FI Items by Company Code: This KPI shows for each company code the number of open FI items and the amount in the respective currency.

   • Open FI Items by Posting Date: This KPI shows how the number of open items spreads over the posting dates.

   • Open FI Items by Supplier: This KPI shows for each supplier the number of open FI items and the amount in the respective currency.

   • Open FI Items by Dimension: This KPI shows the open FI items by company code, supplier, purchasing organization, purchasing group, material group, plant, controlling area, and profit center.

The key features of the Monitor GR/IR Account Reconciliation app are:

1. Compile a work list with open items that need clarification:

   It is possible to create a worklist of purchase order items with differing amounts and/or quantities in goods receipts and invoice receipts that need attention urgently. The open items to be clarified and processed are displayed in a results table. Selection by company code, supplier, purchasing document, posting date of latest open item, and additional filter criteria is supported.

2. Display items to be processed as a chart using different chart types or as a results list in table format or both.

3. Smart facts:

   Smart facts describe the business situation for the items to be clarified. This facilitates work as it is not required for a user to completely analyze the figures and business situation themselves. The worklist for the items to be clarified can be selected by smart facts, such as look for items where no goods receipt or invoice has been posted yet, or for items where the amounts or quantities differ in goods and invoice receipts. Smart facts are also displayed for each purchase order item with open items in Financial Accounting (FI) that needs clarification.

4. Display the following details of a purchasing document to be processed:

   • An Overview that shows smart facts, the quantity of received goods and the invoiced quantity, and amounts of ordered and invoiced goods.

   • Financial Accounting Open Items that shows the journal entries (goods receipt and invoice).

   • Purchasing Document History

   • The Processing Log, where processors can create notes that document the progress in clarifying any outstanding issues

5. Display information from purchasing and financial accounting at the same time.

6. Reduce purchasing document items with open items in FI continuously:

   It is possible to select one or several purchasing documents and assign a status to them, such as check goods movement, request completion of delivery, or request correction of invoice. It is also possible to assign a priority, a processor, or processing department and a root cause, such as different quantity in invoice or missing goods receipt. Comments can also be entered. If an open item needs a write-off the respective purchasing document item can be selected and the option Perform Write-off can be used.

7. Integration of SAP Jam and e-mail.

Example: A user is looking at open purchase order items by purchasing group for which there is an amount surplus in invoice receipts. From there, the user can click on the purchasing group they are interested in (in the graphic) and directly navigate to the Reconcile GR/IR Accounts app where the list of purchase order items for this purchasing group is displayed and can be processed.

As stated above, when there is an open balance on the GR/IR account, a check needs to be executed to check whether the invoice from the supplier really matches the goods that were received. The app Reconcile GR/IR Accounts can be used to reconcile the GR/IR (Goods Receipt/Invoice Receipt) accounts. This app supports a user in reducing open items and thus increasing the accuracy of a financial statement and it enables a user to spot issues early on.

In SAP S/4HANA, machine learning (ML) algorithms are available to support this process. Benefits of using ML is this environment are:

• Intelligent recommendations simplify and accelerate the reconciliation process

• Fewer human interactions reduce the effort for non-value adding activities

• ML learns from the accountant’s decisions

• Reduction of open items

• Faster period end closing with higher precision (write-offs)

The machine learning service used for reconciling goods and invoice receipt (GR/IR) accounts is a cloud service that uses machine learning technology to enable a thorough and dynamic observation of the reconciliation of GR/IR accounts. It providing recommendations for further processing.

The machine learning service improves the process by displaying all necessary data on one screen so that the processing steps and statuses can easily be documented in the app. The recommendation service using machine learning automatically proposes next steps for items that could not be matched, based on the status and situation of a purchase order item. Furthermore, it recommends a priority value for the action and indicates an estimated root cause of the difference.