Supplier Invoice to Payment

Contents 1 Introduction 2 Abstract Business Process 3 Roles Involved 4 Configuration 5 Step-by-Step 5.1 Manage Pending Invoices 5.2 Issue the Purchase Invoice 5.2.1 1. Creating a Purchase Invoice Directly from a Goods Receipt 5.2.2 2. Creating an Invoice from Pending Lines to be Invoiced 5.2.3 3. Creating an Invoice Manually 5.2.4 4. Copy lines from an existing Purchase Invoice 5.2.5 Attach Supplier Invoice Information 5.2.6 Linking of documents 5.3 Payment Plan 5.4 Review Payments Due 5.5 1. Payment Proposal 5.6 2. Payment against an invoice 5.7 3. Payment Out window 6 Execution Process 7 Payment Transaction 7.1 Add Transaction 8 Accounting 8.1 Posting of a Purchase Invoice 8.2 Posting of a Payment 8.3 Cash & Bank

Introduction

In Openbravo ERP, when generating an invoice, the payments details, such as the form of payment and payments terms (date and amount) are also created. In this chapter we will explain the supplier payment management, from the pending purchase invoice review to the final payment.

Abstract Business Process

The abstract supplier payment management process is defined by the following diagram:

[[Image:]]

These are the main sub-processes for it:

• Review invoices pending to be paid and its payment details
• Decide whether to pay or to renegotiate
• Perform the payment depending on the payment method

Roles Involved

The following roles are involved with this process:

• Finance - this role authorizes and executes payments

Configuration

Some configuration needs to be done before performing this process. Please refer to the Configuration Manual.

Step-by-Step

The Finance Role should be used.

Manage Pending Invoices

There is currently no support in Openbravo ERP to review purchase orders and goods receipts pending to be invoiced.

Issue the Purchase Invoice

The Finance role should be used.

There are four ways of creating a Purchase Invoice:

• Creating an Purchase Invoice from within a Goods Receipt
• Retrieving lines from pending Purchase orders or goods receipts to be invoiced
• Creating a Purchase Invoice from scratch (in case no previous order/shipment exists)
• Copy lines from an existing Purchase Invoice

1. Creating a Purchase Invoice Directly from a Goods Receipt

Use the Warehouse Management || Transactions || Goods Receipt window and find the receipt in question. See the Generate Invoice from Shipment button:

Click the button and confirm the dialog:

Note: You can also change the price list used for the pricing at this point.After confirming the dialog, the success message should be shown, indicating the number of the invoice that has been generated:

Navigate to the Procurement Management || Transactions || Purchase Invoice and find the invoice that has been generated. Make any corrections or add more lines if necessary and complete it since it will be left in Draft status otherwise:

Notice the payment plan that has been generated by the Purchase Invoice inside the [Payment Plan]:

This scheduled payment will be outstanding, indicating that you owe money to the vendor.

2. Creating an Invoice from Pending Lines to be Invoiced

Go to Procurement Management || Transactions || Purchase Invoice window create a new record:

Fields to note:

• Order Reference - supplier invoice number
• Business partner - the supplier
• Invoice Date - date when the invoice is entered in the system
• Accounting Date - date that defines the date of the general ledger posting and the fiscal period it belongs to
• Payment Method - Payment method associated to the invoice. This value will be inherited from the supplier, but can be changed.
• Payment Terms - Payment terms associated to the invoice. This value will be inherited from the supplier, but can be changed.

Save the record. Click the Create Lines From button:

Select a purchase order or a goods receipt that is pending to be invoiced from that supplier.

Once a pending document to be invoiced is selected, its pending lines (products) will automatically be displayed to be selected. Select the ones that were invoiced in the supplier's invoice and click OK.

Selected lines will be entered automatically into the [Lines] tab where they can still be modified or new lines added:

Complete the document. You will see that each line has been linked to the original purchase order and the goods receipt lines. This way, the whole flow of documents connected and navigable.

3. Creating an Invoice Manually

Sometimes there is no purchase order or a goods recept available from which to create the invoice, for example when purchasing services. In this case, the purchase invoice needs to be created manually from scratch. To  do so use the Procurement Management || Transactions || Purchase invoice window again and create a new record. When you´re done with the header, switch to [Lines]. Create as many records here as there are products invoiced:

Fields to note:

• Product - product or service invoiced by the supplier.
• Attribute set Value - product attribute if needed (normally, manually invoices do not require products with attributes).
• Quantity - quantity of the product invoiced.
• Unit Price - price per product unit. This field is retrieved from the product information although can be changed.
• Tax - Tax that will apply to this product in this invoice line. This field is retrieved from the product information although can be changed.
• Line Net amount - Quantity of the line * Unit Price.

Save the record. Create new lines if needed. When finished, go to [Header] and Complete the document.

4. Copy lines from an existing Purchase Invoice

When you order the same or similar items from a Vendor, you can copy lines from a previous Purchase Invoice. First of all you enter the Header and select the Vendor as the Business Partner.

Then you click the button Copy Lines. In the popup you can click the invoice selector:

Which takes you to another selector, where you can filter for the specific Vendor:

Once you have found the invoice that you want to copy from, you select it and click Ok. The invoice is now selected and you can indicate if the price should be taken from the Pricelist:

After clicking the Ok button, the line(s) from the selected invoice get added.

Back at the [Header] complete the document using the Complete button.

Attach Supplier Invoice Information

A scan of the original supplier's invoice document can be attached to the purchase invoice inside Openbravo ERP using the paper clip icon in the toolbar.

Linking of documents

When the first two methods are used, the Purchase Invoice will be linked to the document it was created from. For example, each receipt line will be linked to the Purchase order line it delivers for. Within the [Lines] of the Goods receipt window the user can click on the links to drill down.

Each Purchase Invoice line will also be linked both to the Purchase order line and the Goods Receipt line it invoices. Within the [Lines] of the Purchase Invoice window the user can click on the links to navigate to either of them.

From the Purchase Order Header or Lines by clicking 'Linked Items', the connected Purchase Invoice and Goods Receipt information is displayed and by clicking the links, the user can navigate to these documents.

Payment Plan

When completing an invoice, a payment plan will be created related to the invoice. Revise it inside [Payment Plan]:

These are the relevant fields:

• Due date - the deadline by which this payment is supposed to be paid. This date is calculated depending on the Invoice date and the Payment terms
• Payment Method- the form of payment of the invoice
• Expected Amount - full amount To be paid in the due date.
• Paid - Amount already paid.
• Outstanding - Amount that remains unpaid.
• Last Payment Date - Date of the last payment received against this payment plan.
• Number of payments - Number of payment events against this payment plan.

A brief summary of the payment plan information of each invoice appears in the invoice header. These are the relevant fields:

• Total paid - Amount paid for the selected invoice.
• Outstanding Amount - Amount pending to be paid for the selected invoice.
• Days till due - Number of days left to reach the next maturity date. If it is a negative value it reflects number of over due days.
• Due Amount - Total amount that has already reached the maturity date.
• Payment complete - Flag indicating if an invoice is fully paid.
• Last calculated on date - Date on which this info was last calculated.

At this point the payment status is Awaiting Payment

Review Payments Due

Payments due to be paid can be reviewed using the Purchase Invoice window (Grid View) using a column filter criterion "No" for the column Payment Complete.

The Financial Management || Receivables and Payables || Analysis Tools || Payment Report displays payments and their statuses:

To see which invoices need to be paid, you can filter by Status selecting the Awaiting Payment option.

There are 3 ways to pay vendor bills:

1. Payment Proposal

The easiest way to pay existing bills is through Payment Proposal Window. Create a new payment proposal for a payment method and a financial account and select the due payments. A payment proposal can be created to pay one or multiple vendors/suppliers. When processing the document all payment events will be created at once.

Navigate to Financial Management || Receivables & Payables || Transactions || Payment Proposal  ||  Header window.

These are the relevant fields:

• Payment Method - Form of payment to be used such as Bank Transfer, Cash ...
• Paying From - Financial Account used to pay the debt.
• Payment Date - Day of the payment event.
• Due Date - Maximum due date of the payments inside the payment proposal.
• Select expected payments - Planned payments selector.
• Generate Payments - Button to process payment proposal and generate the payments.

Click On Select Expected Payments button to select payments planned till Due Date.

Select pending invoices or orders to be paid and modify the amount to be paid if needed.

If the amount paid is less than the outstanding amount, the system will offer the options to 'Write of the difference' or 'Leave this as an underpayment' (the remaining debt will have to be paid afterwards). In case that the amount paid is more than the outstanding amount, the system offers the option to 'Write off the difference'.

Once the selection is complete, click on the Process button:

and then on Generate Payments button.

Select the Action and click Process for the payments to be created.

The payment status has changed to Awaiting Execution (when an automatic Execution type is defined) or Payment Made (when a manual Execution Type is defined)

The finance staff can see the pending payables with the Payment Report and Payment Aging Balance report.

2. Payment against an invoice

It is also possible to make a payment directly against an existing invoice. Navigate to Procurement Management || Transactions || Purchase Invoice window.

Once a purchase invoice is processed, Add Payment button is displayed. Press the button to pay the invoice.

Modify the amount if needed and click on process to pay the selected amount. Additional pending invoices or orders can also be selected and paid.

If the amount paid is less than the outstanding amount, the system will offer the options to 'Write of the difference' or 'Leave this as an underpayment' (the remaining debt will have to be paid afterwards). In case that the amount paid is more than the outstanding amount, the system offers the option to 'Write off the difference'.

Once the selection is complete, click on the Process button

Fields to note:

• Action regarding document
  • Process received payment(s) - Payment is processed and documents are marked as paid.
  • Process received payment(s) and withdraw - Payment is processed, documents are marked as paid, and payment amount is reflected in the financial account (bank).

NOTE: The payment amount can also be automatically reflected in the financial account (bank or cash) when processing the Make Payment document, in the case that the payment method is configured to do that step automatically. See Payment Method configuration.

The payment status has changed to Awaiting Execution (when an automatic Execution type is defined) or Payment Made (when a manual Execution Type is defined)

3. Payment Out window

Another way of paying existing bills is using the Financial Management || Receivables & Payables || Transactions || Payment Out window:

Fields to note:

• Paying to - Business partner who amount is paid to.
• Payment Method - form of payment of this payment.
• Business partner - the business partner this payment belongs to. Use the original business partner here, because the two new payments must belong to the same business partner.
• Paying From - Financial account used for paying.
• Amount - Amount of this payment.
• Payment Date - Date when payment event occurs.
• Status - Status of payment document. Existing statuses are:
  • Awaiting Payment - Before payment document is processed.
  • Awaiting Execution - Before payment is executed. Only used if there is an execution process related to the pair of payment method and financial account for the given payment.
  • Payment Made - Payment event occurred and document is posted to the ledger.
  • Withdrawn Not Cleared - Payment recognized in OB Financial account as a transaction.
  • Withdrawn Cleared - Payment has been cleared through a reconciliation process.

Note that the amount is not editable, since it will be calculated as sum of the details selected. Press Add Payment Details button.

Fields to note:

• Amount - Total amount to be paid.
• Transaction type - Select type of details to be added to the payment:
  • Orders - Outstanding orders within due date.
  • Invoices - Outstanding invoices within due date.
  • Orders or Invoices - Both outstanding orders and invoices within due date.
  • GL Items - For any other payment detail. Relate the amount to a GL Item if the amount paid is not related to any invoice or order.

                           

Multiple GL Items can be added as part of the payment detail. The amount in the payment header will be automatically populated with the aggregated value.

If the amount paid is less than the outstanding amount, the system will offer the options to 'Write of the difference' or 'Leave this as an underpayment' (the remaining debt will have to be paid afterwards). In case that the amount paid is more than the outstanding amount, the system offers the option to 'Write off the difference'.

Once all the details are selected or added press the Process button.

Fields to note:

• Action regarding document
  • Process received payment(s) - Payment is processed and documents are marked as paid.
  • Process received payment(s) and withdraw - Payment is processed, documents are marked as paid, and payment amount is reflected in the financial account (bank).

NOTE: The payment amount can also be automatically reflected in the financial account (bank or cash) when processing the Make Payment document, in the case that the payment method is configured to do that step automatically. See Payment Method configuration.

The payment status has changed to Awaiting Execution (when an automatic Execution type is defined) or Payment Made (when a manual Execution Type is defined)

Execution Process

Different ways of paying have different steps to be executed. For some payment types you might need some additional system steps. For example for payment with a check, you want to print the check on your local printer. Also, payment by credit card would require system steps.

For all these payment forms that require a seperate system activity, you choose the Execution Type 'Automatic' in the Payment method configuration. When selecting 'Automatic' the field 'Execution Process' appears. The execution process is a definition of the activity that the system has to execute.

An overview of all the Execution processes can be found in Financial Management || Receivables & Payables || Transactions || Payment Run screen.

In case of a cash payment, there is no system process and the execution type is set to 'manual'.

The execution process can be activated by clicking the 'Execute Payment' button on the Payment Out or Payment Proposal screen or by going to the Payment Execution process.

The Payment Status will change from Awaiting Execution to Payment Made.

Payment Transaction

Navigate to the Financial Management || Receivables & Payables || Transactions || Financial Account  || Account  window and select a defined Financial Account.

Financial Accounts are used in Openbravo to represent accounts at financial institutions, such as bank accounts, credit cards, electronic payment services, as well as cash and petty cash registers.

Go to the Transactions tab to see the transactions associated with this financial account.

Fields to note:

• Account: The account number and name of the financial account.
• Last reconciliation: The date of the last time this account was reconciled with the bank statement from the bank. A count of the number of unmatched items is shown for today's date.
• Current Balance: The current balance of the account.
• Hide reconciled transactions: By default the grid only shows unreconciled transactions.

Grid:

• Date: The transaction date.
• Business Partner: The name of the business partner.
• Payment No: The reference to the Payment Document (e.g., the cheque number)
• Description: The text added to the payment transaction upon entry.
• Paid Amount: The amount of the payment made.
• Received Amount: The amount of the payment received.
• Cleared: Whether the transaction has been matched to a transaction on the Bank Statement.

Add Transaction

The user can add a Transaction (Payment, GL item or Bank Fee) to the account by clicking on the Add Transaction button.

In the grid all the completed payments will appear. Select them and press OK button. The user can also add a new payment clicking on the Add Payment button. In a new popup all the pending payments will be shown based on the selected filtering option.

After clicking on the Process button, the application will return to the previous popup and the recently added payment will be shown in the grid. This is the result of adding all the payments as transactions.

The payment status has changed from 'Payment Made' to 'Withdrawn not Cleared'.

Accounting

Posting of a Purchase Invoice

When a purchase invoice is posted the general ledger entry is the following:

The accounts of the post are retrieved according to this configuration:

• Vendor Liability account inside the [Vendor Accounting] tab of the Master Data Management || Business partner window
• Tax Credit inside the [Accounting]  tab of the Financial Management || Accounting || Setup || Tax Rate window
• Product Expense account inside the [Accounting]  tab of the Master Data Management || Product window

Posting of a Payment

The accounts configured in Financial Management || Receivables & Payables || Transaction || Financial Account >> Accounting Configuration will be used when posting a payment.

In the example, as the In Transit Payment Account has been configured, when clicking on Post button on Financial Management || Receivables & Payables || Transactions || Payment Out || Header, a posting will be made to the In Transit Payment Account

The following journal entry will be created:

Cash & Bank

Please refer to the Financial Account to Reconciliation chapter of the user manual for more information on how to reconcile Financial Account transactions.