Vendor Invoice Reconciliation

Understanding Vendor Invoice Reconciliation
Vendor invoice reconciliation is a tool used to reconcile vendor invoices (bills) against received inventory.
Often, vendors will invoice a customer for multiple POs. Often, these purchase orders may be only partially received; the vendor did not send all ordered items and units. This makes it difficult to verify the accuracy of a billing charges against the PO totals in SellerCloud.
Let's say a customer sends only one PO to a vendor. The total cost of the PO is $3000. In two weeks the vendor invoices the customer. Consider the following scenarios:

PO Cost = $3000

Invoice Charge

PO Receiving Status

Reconciliation

1) $3000

Fully Received

Charged at agreed upon price

2) $4000

Fully Received

Overcharge

3) $3000

Not Fully Received

Possible Overcharge

4) $2000

Fully Received

Possible Undercharge

5) $2000

Not Fully Received

No Indication From Totals

  1. Invoice charge is $3000 and PO is fully received - the totals match so customer is obviously being charged at the agreed upon price.
  2. Invoice charge is 4000 and PO fully received - The totals do not match so there is obvious overcharge.
  3. Invoice charge is $3000 and PO is not fully received - the totals indicate a possible overcharge for the received items. 
  4. Invoice charge is $2000 and PO is fully received - the totals indicate a possible undercharge for the received items. 
  5. Invoice charge is $2000 and PO is not fully received - there is no indication from the total to the accuracy of billing charge.
Reconciliation gets further complicated if the invoice is for multiple POs which are partially received.

How does the Vendor Reconciliation Tool Help?
The vendor invoice reconciliation tool addresses the accuracy by matching the bill against receiving sessions of a single PO or multiple purchase orders. Every time items/units on a PO are received, a receiving session is saved. The session saves the cost of the items received as the "Receiving Session Cost". The invoice can then be reconciled against the total from the indicated receiving sessions, regardless of the totals and received status of the purchase orders.

Consider the following scenarios with the single PO Cost of $3000: 

PO Cost = $3000

Invoice Charge

Receiving Sessions Totals

Reconciliation

$2000

$1000 + $1000

Charged as agreed upon price

$2000

$1000 + $500

Possible Overcharge


While this example is with a single PO, receiving sessions can be grabbed from multiple POs as well.

Reconciling Vendor Invoices with Purchase Orders
  1. Enable client setting Enable vendor invoices workflow.
  2. Company Settings > Toolbox > Vendors > Select Vendor > Invoices.
  3. Press New Invoice.
  4. Use the data from the vendor bill to enter the Invoice Date, Vendor Invoice Number, and Invoice Amount. You can also attach the actual invoice from your PC. 
  5. Press Save Invoice.
  6. Press the Add Receiving Session link.
  7. A window will pop open to display receiving sessions from the vendor. It displays session IDs, when they were received, the PO number, Qty Received, and Session Cost. You can filter by PO number or ProductID.
  8. Select the matching sessions and press Add Selected Sessions.
    https://sites.google.com/site/sellercloudhelp/inventory-management/purchase-orders/vendor-invoice-reconciliation/add%20receive.PNG
  9. The session will be added to the "Existing Sessions" grid. 
  10. The sessions total cost will display in the "Received Amount" field. If it matches the invoice amount, the invoice can be considered reconciled.
  11. Once a receiving session is added, it will be removed from the available sessions to select for a new invoice.
Payments against vendor invoices can also be recorded. Payments can be prepaid or recorded after the receiving sessions are added. Read more here.


View Receiving Sessions Per Product/Qty
The default workflow above displays the totals from a receiving session. You can break that down further to enter an exact amount of units received against a particular invoice.
  1. Enable Client Setting Enable vendor invoices to be product/qty level.
  2. Follow the steps 1-5 above.
  3. The grid will now display the receiving sessions with the product qty breakdown. Each product will have it's own receiving ID.
  4. The qty to invoice will default to the received qty. Edit the qty if necessary.
    https://sites.google.com/site/sellercloudhelp/inventory-management/purchase-orders/vendor-invoice-reconciliation/Receiving%20ID.PNG
  5. Select the Receiving ID's at the product level and press Add Sessions. If the full Received qty is not invoiced, the receiving session will remain in the grid.
  6. Continue with step 10 above.
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