Ready for faster, smarter, simpler invoice and goods receipt reconciliation?

Suresh Ramanathan

Posted by Suresh Ramanathan on November 15, 2013

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SAP Business Suite powered by HANA (SoH – Suite on HANA) was released to customers early this year. In my role with our Global HANA COE for sales support, I am beginning to see a lot of prospects that are looking deeper into the potential of HANA as the main database for their Suite solutions to combine transactions and analytics together through Smarter, Faster and Simpler capabilities. In this blog and the next few, I will provide some examples of what we mean by Smarter, Faster and Simpler and I like to call them Sweet spots in SoH.

The first example is from the procurement line of business. Let us take the concept of GR/IR clearing account and reconciliation. Customers create and place purchase orders with their suppliers, receive the goods or services and book the receipt in the system, receive invoices from suppliers and book them in the system. There is generally a lag between the actual posting of goods receipts and posting of the invoices. In some cases the invoices are booked before the goods/services are confirmed. There are also potential differences in quantities and amounts of the goods/services confirmed and invoices for all the valid reasons. From a financial accounting perspective, customers need to account for these discrepancies correctly.

This is where the GR/IR reconciliation account comes in. This account is credited during goods receipt posting and debited during invoice receipt posting. In a perfect scenario, when all the goods receipts are completely invoiced, this account should carry zero balance. But as described before, due to timing of various activities and practical problems in the business process (quality of goods, duplicate invoices etc.) the account generally carries a balance which needs to be properly accounted and adjusted during the period end financial close activities. Generally it takes a team of people from accounting, procurement/sourcing, inventory/warehouse management and the vendors to closely collaborate and resolve these discrepancies. Not to mention the numerous reports and transactions that needs to be executed to check all the related activities. This complexity is compounded when you take into consideration the huge volumes of purchase orders (plus the individual line items) corresponding receipts, returns, invoices, credit memos, subsequent adjustments, accounting documents and so on.

Smarter, Faster, Simpler applications that are based on Suite on HANA to the rescue!

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Now for Suite on HANA customers we deliver, the new SAP invoice and goods receipt reconciliation application that provides the following advantages:

  • intuitive user interface (smarter)
  • encapsulates analytics within transactions with real-time data (simpler) – no duplication
  • processes large volumes of data more efficiently (faster)

This application allows a business user to get a snap shot of all outstanding/open purchase orders, open items per vendor and other key KPIs that can be personalized. They also see purchase activity over a timeline to easily select a given set of POs for further analysis. Upon narrowing down to a list of POs, they can drill down to the line items, their corresponding receipts and invoices as well. The display can be adjusted, filtered, sorted among other things for a more focused analysis. With all these details readily available (without having to run several other transactions and reports), the user can start collaborating with other key stakeholders such as warehouse manager or the buyer or the vendor using the contact information that is readily displayed on the side. Once the resolution process is established, they can assign the document to the responsible person, save the status and proceed to the next activity. Once the issue is resolved, the necessary GR/IR account can be correctly adjusted if necessary.

This streamlined process leads to productivity, compresses the timeline for reconciliation and creates efficiency for the entire end to end process. Early adopter surveys and our analysis indicates significant benefits are possible

  • 40% reduction in reporting FTEs
  • 50% reduction in GL posting corrections

All of this would not be practically possible without HANA processing large data sets much faster to enable business users to make smarter decisions using a simpler architecture to combine transaction processing and analytics!

Suresh Ramanathan – suresh.ramanathan@sap.com | @sapsuresh

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