Understanding Invoice Reconciliation

Buyers process invoices from suppliers in order to pay for goods and services. Invoice reconciliation is the process of identifying and managing discrepancies between invoices and related purchase orders, contracts, or receipts so that they can be paid.

To understand the invoice reconciliation process it is important to understand the documents you will be working with.

Invoice (INV) - When an invoice arrives from SAP Business Network or is manually entered in the SAP Ariba Buying and Invoicing application by the Accounts Payable department, the invoice is recorded by the system with the prefix INV, for example, INV1234-152. Once in the SAP Ariba Buying and Invoicing system, the invoice document never gets touched or modified as it is a legal document. You can consider it a master document and for audit reasons must be left the way it arrived.

Invoice Reconciliation (IR) - The Invoice Reconciliation (IR) document is a copy of the original invoice. It is used for the reconciliation process instead of the original invoice which is saved as is. Invoice reconciliation numbers have the same numbering scheme as invoices but have the prefix of IR, for example IR1234-152.

The Invoice Reconciliation (IR) tracks the history of the invoice data within the system: an invoice has arrived, has been matched to an order, has been validated, and any exceptions found were addressed by an invoice exception handler or the requester.

The IR document is always generated regardless of whether exceptions are generated or not.

The reconciliation process uses approval flows to trigger exceptions for the evaluated invoice data. In the default configuration, each invoice exception type is associated with a group, which determines the list of users on the approval flow for each invoice reconciliation document.

For example, in the default configuration, users who are members of the:

• Tax Manager group - can reconcile tax exceptions
• Invoice Manager group - can reconcile unmatched invoice exceptions
• Receiving Manager group - can reconcile receiving invoice exceptions
• Invoice Agent group - can reconcile contract invoice exceptions

The default approval rules use the groups associated with exception types to determine the set of approvers. The approval rules look over the invoice reconciliation document, find all exceptions on that document, and define as approvers those users who have permission to reconcile the specified exceptions. These users are typically the first approvers on the flow and are the users who are expected to reconcile any listed exceptions.

For a complete list of the system permissions associated with invoice reconciliation activities, please review the SAP Ariba Procurement Solutions Group Descriptions table. Enter reconciliation in the Action column to filter the table.