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Invoicing Overview

APM invoicing is used to match supplier invoices against the information in the APM procurement system (purchase orders and purchase order lines). The invoicing function allows invoices to be entered, matched, and balanced. Discrepancies are displayed immediately, and a user can make the necessary corrections or forward the invoice to the appropriate person to act on.

This topic discusses concepts related to invoice entry in the APM system. It covers:

•	Introduction to APM Invoicing

•	Invoice Life Cycle

•	Price Differences and Tolerances

•	Automatic Balancing Threshold

•	Balancing an Invoice

•

Approvals

•	Invoice Lines

•	Invoice Liability Records

•	Prorating Taxes and Extra Charges

•	Credit Memos

•	Posting Invoices

•	Updating Maintenance Costs

•	Updating Inventory Balances

•	Invoice Financial System Entries Information

•

Holds

•	Invoice Batches

•	Invoice Payment Memos

Introduction to APM Invoicing

This section provides a brief overview of some of the key invoicing features in APM.

Three-Way Matching

Invoicing logic automatically ensures that you are paying only for the goods and services ordered, that the quantity invoiced matches what was received, and at the agreed upon price.

Price Tolerances

You can control the maximum price difference that can be accepted by invoicing clerks. Invoices with a price difference that exceeds your allowable value are routed for approval before the invoice can be posted.

Purchasing Activities

In addition to the traditional material receipts, the following purchasing activities can also be matched to an invoice’s lines:

•	Service acknowledgments

•	Equipment rentals

•	Repair orders

•	Consignment inventory usage

Maintenance Costs and Inventory Value Updates

Invoicing is fully integrated with the other components of APM. Any differences between the purchase order and invoice price for direct purchases are immediately reflected in the work order, asset, and project costs. Differences between expected and invoiced taxes and extra charges are also tracked. Inventory values are also updated to reflect the difference between the purchase order and invoice price for inventory purchases.

Invoices that do not reference an APM purchase order and transaction can also be entered. If the invoice is charged to a maintenance work order or asset, the maintenance costs are updated.

Credit Memos

Credit memos are used to record a credit if the material invoiced was faulty, the wrong part was delivered, or the invoice was incorrectly entered.

Non-Purchase Order Invoices

APM invoicing can be used to enter all of your invoices. This includes invoices for employee expenses and miscellaneous purchases where a purchase order was not issued.

Invoice Reversals

You can create reversing invoices for posted invoices (including credit memos) that were entered in error or that have errors. The process includes reversing liabilities, PO lines, and inventory. You can also create a replacement for the original invoice.

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Invoice Life Cycle

APM invoices have a well-structured life cycle that moves from initial creation through balancing, approval, and posting. The diagram below summarizes the invoice life cycle.

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Price Differences and Tolerances

The invoice price does not always match the expected price from the purchase order line. There are a number of reasons why prices might differ, for example, if the purchase order was not updated when the supplier provided the correct price.

When you create an invoice line, the system sets the invoice line price to the purchase order line’s current price. If the invoice price differs from the default price, you can change the price to match the price on the invoice.

Price tolerances allow you to control what is an acceptable price change and what is an unacceptable price change. An invoice with an acceptable price change can be entered and accepted by the invoicing clerk. No further approval is required.

An unacceptable price change occurs when the difference between the purchase order price and invoice price exceeds your tolerances.

You can define separate price tolerances to control situations where the invoice price is higher than the purchase order price, and where the invoice price is lower than the purchase order price. To be within your tolerances, the change as a percentage and value must both be within your site’s tolerances.

You can also define tolerances for tax and extra charge lines. The expected amount on extra charge lines is the sum of the expected amounts from all of the invoice line extra charges for the same extra charge. For each individual invoice line, the expected extra charge amount is calculated from the purchase order line’s extra charge (if one is referenced). If there is no purchase order line referenced then the expected value is zero.

If you do not enter price tolerances for an invoice line type, the system allows any difference for that line type and does not require approval of that type of invoice line.

Note: The tolerances used are those entered for the site that owns the invoice. These may be different than the tolerances for the site at which the transaction was originally entered. Site tolerances can also be overridden at the resource level.

The price tolerances are defined as:

•	Percentage: the percent by which the invoice line price can differ from the purchase order line price.

•	Amount: the amount by which the invoice line can differ from the expected line price based on the purchase order price and quantity being invoiced.

For example, a purchase order line has an order quantity of 10 at a price of $2. An invoice line is entered for a quantity of five at a price of $2.25. In this case the price differences are:

•	Percent difference = 12.5% ($0.25 / $2.00 *100)

•	Amount difference = $1.25 ((5 * $2.25) - (5 * $2.00))

If either the percentage or amount exceeds your tolerances, the line and invoice cannot be posted until one of the following occurs:

•	The invoice line is sent for approval and is approved (if invoice line approval is used)

•	The line is made acceptable (if invoice line approval is not used). There are three ways this can occur:

•	The invoice line price can be changed. If the price was entered incorrectly or the price on the invoice is incorrect, the price on the invoice is updated.

•	The purchase order line price is updated. If the buyer agrees with the price, the price on the purchase order is changed. The invoice line is updated as “okay”.

•	The price tolerances can be changed if they are too restrictive.

Service Acknowledgments

For service orders, you can enter the amount of any additional charges as part of the service acknowledgment. When an invoice line is matched to a service acknowledgment, the system creates an extra charge line for the additional charges entered on the acknowledgment. The extra charge line is automatically prorated to the service invoice line. The type of extra charge used for additional service charges is set on the site’s invoicing settings.

For example, a service order is issued for a contractor to come on site and perform a task. The order is for 8 hours at $50/hour. The service acknowledgment is entered for the hours worked. An additional charge of $80 is entered on the acknowledgment for the cost of the materials the supplier used. In this case the invoice's expected amount of the invoice is $480 (the purchase order price of $50/hour plus the extra charge of $80).

Consignment Invoices and Price Tolerances

By definition, the line price for a consignment usage cannot be changed. Consigned resources are issued at the supplier's current price and this is the price paid by the customer. However, timing problems may create situations where an issue is recorded before the supplier's new price is entered. This results in the resource being issued at the wrong price.

Therefore the invoice line price can be changed for consignment invoices. When the price is changed on a consignment invoice line:

•	The value of the difference is charged to the distribution accounts on the matched transaction (e.g. the work order the material was issued to is charged).

•	The price change must always be approved; tolerances are not checked.

Fixed Price Purchase Order Lines and Price Changes

A fixed price purchase order line is from a purchase order that references a purchasing contract with fixed pricing. By definition, fixed price contracts have zero tolerance for price changes. If you change the purchase order price from that on the contract, the purchase order must be approved. If the invoice price is changed, the invoice line must be approved. The invoice line will be routed for approval based on the purchase order’s buyer.

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Automatic Balancing Threshold

The automatic invoice balancing threshold can simplify the process of entering an invoice when there is a small difference between the supplier's invoice total and APM's expected total. These differences are usually caused by differences in the number of decimal positions or rounding rules in the two systems.

For example, assume that three pens have been purchased at a price of $0.33 each. In the supplier’s system, the price has been recorded to three decimal positions as $0.333. In APM, the price was entered simply as $0.33. On the supplier invoice, the cost of the pens is $1.00 (3 X 0.333 = $0.999 which would be rounded up to $1.00). Because APM has a price of just $0.33, the expected price is only $0.99. For this example, APM has been configured to only allow two decimal places for the price. Therefore, the price cannot be changed on the invoice.

The invoice balancing threshold will force the APM amount to equal the supplier's invoice amount as long as the difference between the two totals is within the threshold defined for the site. In this case, the APM invoice total would be forced to $1.00.

Each site in your organization might have a different automatic balancing threshold.

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Balancing an Invoice

Before an invoice can be posted, it must be balanced. To be balanced, the total invoice amount (as entered from the supplier’s invoice) must equal the sum of the line amounts, including remitted extra charges and remitted tax lines.

This table shows an out-of-balance invoice:

Line	Type	Amount	Status
1	Regular line	1,000.00
2	Regular line	1,500.00
3	Freight	300.00
4	Taxes	170.00
Line totals		2,970.00
Invoice amount		2,500.00
Difference		470.00	Out of balance

This table shows a balanced invoice:

Line	Type	Amount	Status
1	Regular line	830.00
2	Regular line	1,200.00
3	Freight	300.00
4	Taxes	170.00
Line Totals		2,500.00
Invoice amount		2,500.00
Difference		0.00	Balanced

If an invoice is out of balance and the difference is above the balancing threshold, you can take one or more of the following steps:

•	Ensure that the total invoice amount from the supplier’s invoice was entered correctly and is correct. If necessary, you can correct the total invoice amount entered on the invoice.

•	Ensure that all of the appropriate lines have been included on the invoice. If necessary, you can add any missing lines.

•	Ensure that no lines have been incorrectly included on the invoice. You can delete a line that should not be on the invoice.

•	Verify that the quantity and price are correct for each line. If necessary, you can change the quantity and/or price on an invoice line.

•	Verify that the extra charge lines are correct. If necessary, you can change the value on the extra charge line.

•	Verify that the tax lines are correct. If necessary, you can change the value on the tax line.

Automatically Balancing an Invoice

APM will automatically balance an invoice if the amount by which the invoice is out of balance is within the site's threshold.

For example, an invoice is entered for $100. The invoice has two lines: one for $50.00, the second for 50.02. Rather than requiring the invoicing clerk to review the lines and determine the source of the problem APM automatically corrects the problem by applying an adjustment to the first line. The resulting invoice appears as:

•	Invoice amount: $100

•	Line 1: $50.00 + balancing adjustment -0.02 = net value $49.98

•	Line 2: $50.02

•	Line totals: $100

•	Invoice status: Balanced

Automatic balancing applies to all invoices. This includes consignment invoices, and invoices with lines that are not matched to an existing liability. The value of the difference is always applied to the invoice's first line, and is tracked in the 'balancing adjustment amount' on the invoice line.

Note: Automatic balancing is calculated and shown on the lines after the invoice has been posted.

Although the value of the balancing difference is entered in the site’s currency, the system treats the value as a non-currency amount when comparing it to the invoice difference. The value of the balancing difference is always calculated in the supplier’s currency. The difference between the invoice amounts and line totals must be within the site’s balancing tolerance for APM to automatically adjust the invoice.

Currency example 1:

Site currency	Canadian
Supplier currency	US
Exchange rate	1.25
Balancing tolerance	$0.10 CDN
Invoice amount	$100.00 US
Line totals	$99.90 US
Difference	$0.10 US
Invoice status	Balanced (auto balancing applied)

Currency example 2:

Site currency	US
Supplier currency	Canadian
Exchange rate	0.80
Balancing tolerance	$0.10 US
Invoice amount	$100.00 CDN
Line totals	$99.89 CDN
Difference	$0.11 CDN
Invoice status	Out of balance (auto balancing not applied)

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Approvals

Two levels of approvals are supported for invoices: invoice approval and invoice line approval.

Invoice and Credit Memo Approval

Invoice approval approves the invoice as a whole for payment. Typically, an invoice is approved by the person responsible for the account to which the invoice costs are charged.

Most invoices do not require approval. The costs were approved when the requisition and/or purchase order was created. However, invoice approvals can be used to:

•	Approve invoices that do not refer to a purchase order

•	Approve credit memos (by selecting credit memo invoice types for approval)

•	Approve high value invoices

Invoice approval can be activated by invoice type. Because the invoice type defines whether the invoice is a regular invoice or credit memo, you could require that credit memos be approved, while not requiring approval for invoices.

For invoices, approval route selection is based on the GL accounts charged. The approval route’s automatic approval threshold amount is used to automatically approve low value invoices.

Invoice Line Approval

Invoice line approval is used to approve the individual lines on an invoice. Line approval is used when the invoicing clerk cannot accept an individual line because the price difference exceeds the defined tolerances. This situation requires an additional level of approval.

If an invoice line is entered and its price difference exceeds the tolerances, the following behavior occurs:

•	If line approval is being used:

•	The invoicing clerk is warned that the price exceeds the price tolerances.

•	The invoice line status is set to unapproved. The invoice’s post method is disabled; the invoice cannot be posted until the line is approved.

•	The invoice line is sent for approval.

•	The line is approved.

•	If there are no other lines that require approval, the invoice can now be posted.

•	If line approval is not being used:

•	The invoicing clerk is warned that the price exceeds the price tolerances.

•	The invoice’s post method is disabled; the invoice cannot be posted until the line is made acceptable.

Approval route selection is based on the purchase order line’s buyer.

Approver limits are based on the value of the difference between the purchase order line and invoice line. For example, if the purchase order line value is $1,000 and the invoice line value is $1,500, the line must be approved by an approver with an approval limit of $500 (the difference between the purchase order line and the invoice line).

Credit Memo Line Approvals

If you are entering a credit memo line that is matched to a return transaction, the system uses the regular line price tolerances to determine if approval is required. However, since the line is for a credit, the system uses the ‘price increases’ tolerance when the price is lower on the credit line than it was on the return transaction; and the system uses the ‘price decreases’ tolerance when the price is higher on the credit line.

For example, you returned 10 items to the supplier at a price of $10.00 each. When you enter the credit memo line you discover that the price was really $10.50. Since your organization is getting a larger credit due to the increase price, the system uses the ‘price decreases’ tolerance to evaluate the line.

Invoice Line Approval for Extra Charge and Tax Lines

Invoice line approval can also be used to approve an invoice’s extra charge and tax lines. Approval for these lines works in the same way as regular invoice line approval: if the value of the line is different than the expected price and the difference exceeds the tolerances, the line must be approved.

Extra charges and taxes included on the invoice that were not identified on the invoice’s purchase order are assumed to have an expected price of zero; the extra charge or tax was not identified as being applicable for the purchase order.

Extra charge and tax lines on invoices that do not reference a purchase order do not have to be approved. Only extra charges and taxes on purchase order invoices require approval.

Using Invoice and Line Approval Together

When both invoice and invoice line approvals are being used together, the workflow is as follows:

•	Any invoice lines that require approval must be sent for approval and be approved.

•	Once all of the lines have been approved, the invoice is sent for approval.

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Invoice Lines

An invoice line contains the details of the invoice. An invoice line can be matched to a source invoiceable liability (for example, receipt, service acknowledgment) or have no source (that is, not matched to a purchasing source transaction). Each line contains the same information: what is being invoiced (resource), quantity, price, amount, and where the costs are being charged.

Invoice Line Tax Information

Tax information is entered at two levels on the invoice:

•	Tax lines are entered as invoice lines: A tax line identifies the tax and tax rate. The tax amount from the supplier invoice is entered on the tax line. The tax line also identifies how the tax is distributed: a tax can be prorated to the invoice lines or charged directly.

•

Applicable taxes are identified on the invoice lines: The applicable taxes identify the taxes, if any, that apply to the materials, service or extra charge identified on the line. A tax amount is not entered as part of the applicable tax information. APM calculates the amount charged when a tax line is prorated.

Invoice Line Extra Charge Information

Extra charge information is entered at two levels on the invoice:

•	Extra charge lines are entered as invoice lines: An extra charge line identifies the extra charge and the amount charged on the invoice. The extra charge line also identifies how the charge is distributed: a charge can be prorated to the invoice lines or charged directly.

•

Applicable extra charges are identified on the invoice lines: The applicable extra charges identify the charges, if any, that apply to the materials or service on the line. A charge amount is not entered as part of the applicable charge's information. APM calculates the amount charged when an extra charge line is prorated.

Invoice Line Distribution Information

The invoice line’s distribution information identifies where the invoice costs are being charged. Normal purchasing distribution is supported: an invoice line can be distributed to a work order task, asset, cost type, warehouse item inventory, and/or general ledger account. An invoice line can be distributed to multiple distribution entries.

The distribution for lines that are matched to a transaction originates with the transaction’s distribution. For example, the distribution for a line associated with a purchase receipt defaults to the distribution on the receipt’s purchase order lines. The defaulted distribution can be overridden on the invoice line with the following restrictions:

•	The distribution cannot be changed for lines that are matched to an inventory receipt. The invoice must be charged to the same inventory account (that is, warehouse) as the receipt.

•	Lines matched to a non-inventory receipt cannot be charged to inventory.

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Invoice Liability Records

In APM, liabilities contain the information relating to the four types of resource transactions that can be matched to invoice lines:

•	Purchase receipts - this includes both regular purchase receipts and repair order receipts.

•	Service acknowledgments

•	Equipment rental usage

•	Consignment usage - all consignment usage transactions are included in this group. This includes consignment usage, returns, transfers and adjustments (if the customer is responsible for the adjustment).

You can create invoice lines from liabilities. Invoice liabilities identify:

•	The originating transaction

•	The purchase order and line

•	The supplier

•	The quantity to be invoiced

•	The amount to be invoiced

•	The value to be invoiced

•	The accrual account (e.g. RNI account) used by the transaction

•	The date of the transaction

Purchasing Events and Invoice Liabilities

The system creates an invoice liability when each of the following events occur:

•	A non-consignment purchase receipt is posted, including negative receipts

•	A service acknowledgment is posted.

•	An equipment rental usage is posted.

•	A consignment issue is posted.

•	A consignment return is posted.

•	A from-consignment-to-regular inventory transfer is posted.

•	A from-regular-to-consignment inventory transfer is posted.

•	A consignment adjustment is posted and the customer is responsible for the cost of the adjustment.

In addition, the invoice liability records are updated when the following events occur:

•	A receipt is reversed - the receipt's invoice liability is deleted

•	A service acknowledgment is reversed - the acknowledgment's invoice liability is deleted.

•	An equipment rental usage is reversed - the usage's invoice liability is deleted.

Creating Invoice Lines from an Invoice Liability

When an invoice line is created from an invoice liability the transaction information is copied from the liability invoice to the new invoice line. Some of the information cannot be changed on the invoice line. The invoicing clerk simply verifies that the information is correct. Price, quantity, charges, taxes and distribution can be changed on the invoice with the restrictions described below.

Property	Description	Locked	Restrictions
Resource	The liability's resource is copied to the invoice line	Yes	The resource cannot be changed on a line that references a liability.
Title	The liability's title is copied to the invoice line.	Yes	The title (non-catalog description) cannot be changed on a line that references a liability.
Quantity	Set to the invoice liability's quantity remaining to invoice	No	Cannot be made greater than the quantity remaining to invoice
Price	Set to the liability's price	No	The price can be changed, but the new price must be within the site's tolerances
Expense date	The date on which the expense was incurred (e.g. the date received)	Yes	The date expensed cannot be changed on a line that references a liability - the line's expense date is set to the date of the transaction
Applicable extra charges	Matched to PO Transaction The matched PO line's extra charges are copied to the invoice line. Matched to a Consignment Transaction The extra charges from the supplier resource consignment price are copied to the invoice line. Both PO and Consignment The extra charge's taxes are also copied if the tax is remitted to the supplier	No	Cannot be changed to 'to inventory' if the original transaction was not a 'to inventory' receipt.
Applicable taxes	Matched to PO Transaction The matched PO line's taxes are copied to the invoice line. Matched to a Consignment Transaction The taxes from the supplier resource (consignment) are copied to the invoice line.	No	Cannot be changed to 'to inventory' if the original transaction was not a 'to inventory' receipt.
Distribution	The distribution from the matched transaction is copied to the invoice line.	No	The distribution can be changed only if "override distribution" is selected on the invoice line

Updating the Invoice Liability when the Invoice is Posted

The invoice liability is updated when the invoice is posted:

Property	Update
Quantity invoiced	Increased by the quantity invoiced on the current invoice.
Invoiced in full	Set to true if the quantity invoiced equals the quantity to be invoiced or if 'final invoice' was checked on the invoice line
Quantity remaining to be invoiced	Set to zero if invoiced in full is true, otherwise it is calculated: Quantity to be invoiced - Quantity invoiced = Quantity remaining to be invoiced
Value invoiced	Increased by the value of the line
Value remaining	Decreased by the value off the line
Most recent invoice line	This reference is set to the current invoice line

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Prorating Taxes and Extra Charges

Prorating is the process by which the value of a tax or extra charge is distributed over the invoice’s lines. For example, an invoice contains a freight line for $100. The invoice contains two lines, each for $500. Prorating the $100 freight charge results in the cost charged to each line to be increased by $50. Therefore $550 would be charged to the work order or account associated with each line.

The general rules for prorating are:

•	Both extra charges and taxes may be prorated. Taxes can be prorated to all invoice lines, including extra charge lines, except for other tax lines. Extra charge lines cannot be prorated to other extra charge lines or to tax lines.

•	If an extra charge or tax is being prorated to all lines, the value is prorated to the lines in the following order:

•	The charge is first charged to the lines where it has been identified as being applicable (in the case of a tax amount, to the lines where the tax has been identified as applicable). The amount charged is calculated using the tax or charge rule (for example, the tax rate).

•	For taxes, if the complete tax amount is not charged to the applicable lines, the remaining amount is divided over the lines where the tax is not applicable, except for extra charge lines. The amount charged to each line is calculated based on the tax rate.

•

If the complete charge has not been charged, the remaining amount is divided over all the lines. Each line is charged a percentage of the remaining charge that is equal each line’s percent value of the invoice (excluding taxes and extra charges). For example, if a line’s value is 25% of the total of the invoice lines, the line gets 25% of the amount being prorated.

•	If an extra charge or tax is being prorated to applicable lines only, the value is prorated only to the lines which have identified the charge (or tax) as being applicable:

•	The charge is first charged to the lines where the charge has been identified as applicable (in the case of a tax amount, to the lines where the tax has been identified as applicable). The amount charged is calculated using the tax or charge rule (for example, the tax rate).

•	If all of the charge has not been accounted for the remaining value is prorated to the applicable lines using the same percentage of the charge rule described above.

•	Any small amount (for example, pennies) that is left over after the prorating is complete is charged to any line. The full amount of the charge must be accounted for.

•	APM attempts to honor the line’s extra charge or tax calculation definition. If the line has an applicable tax or extra charge record, APM will calculate the amount to charge and will attempt to charge the line this amount.

The results of the prorating are seen in the maintenance adjustments for each invoice line.

Using the example of the $100 freight charge and the two $500 lines, if the lines have an applicable freight charge identified on them, APM would use the calculation defined on the extra charges to determine how much to charge each line. For example

•	Line 1: freight charged defined as 15% of the line value; $75 charged to the line

•	Line 2: freight charged defined as 5% of the line value; $25 charged to the line

If the amount of the charge (or tax) cannot be completely prorated using the lines' charge definitions, APM distributes the remaining value based on the percentage of the line's value.

For example, a freight charge is being prorated over 3 lines:

•	Line 1 has a value of $100; receives 20% of the remaining value of the charge

•	Lines 2 and 3 are for $200 each; receive 40% each of the remaining value of the charge

If necessary, APM increases or decreases the lines' calculated value to ensure that all of the charge is distributed.

Another example is an invoice with a $40 freight charge and two $500 lines, where both of the lines have an applicable freight charge of 5%. The initial calculation would result in a charge of $25 being added to each line. This exceeds the invoice's freight charge by $10. The system then removes $5 from each of the two line’s charges, resulting in only $20 being charged to each line.

Example 1: A Freight Charge to Applicable Lines Only

In this example, a freight charge is being prorated. The user has selected the 'prorate to applicable lines only' option.

The freight charge is for $100.

First APM attempts to honor the lines' freight calculation rules:

Line	Quantity	Line Value	Freight Applicable?	Freight Calculation	Amount Charged
1	10	$200	Yes	10%	$20
2	10	$100	Yes	$5 per unit	$50
3	10	$100	Yes	Fixed amount of $20	$20
4	10	$100	No
5	10	$100	No
				Total amount prorated	$90

At this point only $90 of the $100 freight charge has been prorated. The remaining $10 needs to be prorated. Since the charge is only being applied to the applicable lines, APM recalculates the amounts charged to lines 1, 2 and 3.

The total value of the lines the charge is being distributed to is $400. This results in the following amounts being added to each line’s charge:

Line	Quantity	Line Value	Percent of Applicable Lines	Freight Calculation	Amount Charged
1	10	$200	50%	10%	$20 + $5 = $25
2	10	$100	25%	$5 per unit	$50 + $2.50 = $52.50
3	10	$100	25%	Fixed amount of $20	$20 + $2.50 = $22.50
				Total amount prorated	$100

The full amount of the freight charge has now been prorated over the applicable lines.

Example 2: A Freight Charge to All Lines

In this example, a freight charge is being prorated. The user has selected the 'prorate to all lines' option.

The freight charge is for $100.

First APM attempts to honor the lines' freight calculation rules where freight has been identified as applicable. The calculations are the same as the previous example:

Line	Quantity	Line Value	Freight Applicable?	Freight Calculation	Amount Charged
1	10	$200	Yes	10%	$20
2	10	$100	Yes	$5 per unit	$50
3	10	$100	Yes	Fixed amount of $20	$20
4	10	$100	No
5	10	$100	No
				Total amount prorated	$90

At this point only $90 of the $100 freight charge has been prorated. The remaining $10 needs to be prorated. Since the user has selected the all lines option, the $10 is prorated over all of the lines.

The total value of all of the lines is $600. The remaining $10 is prorated to each line based on each line’s percent of the total value.

Line	Quantity	Line Value	Percent of Value of All Lines	Freight Calculation	Amount Charged
1	10	$200	33%	10%	$20 + $3.32 = $23.32
2	10	$100	16.7%	$5 per unit	$50 + $1.67 = $51.67
3	10	$100	16.7%	Fixed amount of $20	$20 + $1.67 = $21.67
4	10	$100	16.7%		$1.67
5	10	$100	16.7%		$1.67
				Total amount prorated	$100

The full amount of the freight charge has now been prorated over the lines.

Example 3: A Freight Charge to All Lines With No Applicable Lines

In this example, a freight charge is being prorated to all lines. No lines have been identified as having freight as an applicable charge. In this case the amount is distributed over all of the lines.

The freight charge is for $90. The total value of the lines the charge is being prorated to is $600. Each line is charged a percentage of the $90 equal to the line's percentage of the total value of all lines.

 

Line	Quantity	Line Value	Freight Applicable?	Percent of Value of All Lines	Amount Charged
1	10	$200	No	33%	$29.88
2	10	$100	No	16.7%	$15.03
3	10	$100	No	16.7%	$15.03
4	10	$100	No	16.7%	$15.03
5	10	$100	No	16.7%	$15.03
				Total amount prorated	$90.00

Example 4: A Tax Charge to All Lines

Taxes are prorated in more or less the same manner as extra charges. The only differences are:

•	Taxes are prorated to both material lines and extra charge lines.

•	Only percentage and per unit calculation methods are supported for taxes; fixed amount taxes are not supported.

In this example, a state tax charge is being prorated to all lines. The invoice contains four material lines and a fifth line for a freight charge. The freight charge is also being prorated to all lines.

The tax rate is 8%. The invoice is for $1,000. The tax on the invoice is $80.

Line	Line Type	Quantity	Line Value	Percent of Value of All Lines	Tax Amount Charged To Line
1	Material	10	$100	10%	$8.00
2	Material	10	$200	20%	$16.00
3	Material	10	$300	30%	$24.00
4	Material	10	$300	30%	$24.00
5	Extra charge		$100	10%	$8.00
			Total amount prorated		$80

After the tax has been prorated, the freight charge is prorated. Since the amount being charged has been increased by $8.00 tax, a total of $108 freight charges is prorated.

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Credit Memos

A credit memo is used to credit your organization for a previously entered invoice. Common reasons why a credit memo is issued are the wrong price was charged on the original invoice, the quantity was incorrect on the original invoice, the wrong material was shipped, or the material was sub-standard and was returned.

A credit memo works in the same way as an invoice, except that normally you can enter lines with negative amounts.

Both quantity and price adjustment credits are supported in APM. A quantity credit is entered when your organization is receiving a credit for some or all of the quantity previously invoiced. A price adjustment is used when the credit is adjusting the price at which the material was originally invoiced.

When creating a credit memo for items that have been returned to the supplier, you must first have created a return receipt transaction to record the quantity that was returned. Then you can create a credit memo line matched to the return transaction.

When a supplier issues a credit for materials that are not being returned, you can enter a price adjustment line to the credit memo. For example, you could use this process when your organization was overcharged for materials delivered on the original invoice.

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Posting Invoices

An invoice can be posted when all of the following conditions are met:

•	The invoice is in balance.

•	All prorated extra charge lines and tax lines can be successfully prorated. All this requires is that at least one invoice line exists that is capable of accepting the prorated charge or tax.

•	The invoice has been approved or does not require approval.

•	None of the invoice lines has an unapproved significant price difference.

•	If the invoice is part of an invoice entry batch, the batch must be in balance.

APM automatically posts an invoice when any of the following events occur:

•	The invoice is approved.

•	The last price discrepancy is approved.

•	The invoice batch is posted.

An invoice is only automatically posted if all of the prerequisites for posting are met. For example, an invoice batch that contains five invoices is posted. All of the invoices are balanced. One of them requires approval, while another invoice has one line with a price discrepancy that requires approval. When the batch is posted:

•	The three invoices that do not require approval are posted.

•	The invoice that requires approval is not posted. It is posted when it is approved.

•	The invoice with the line that requires approval is not posted. It is posted when its line is approved.

An invoice and its lines cannot be redrafted after the invoice has been posted. However, non-financial information can be changed on a posted invoice, as long as the financial entries have not been sent to an interfaced financial system.

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Updating Maintenance Costs

Maintenance costs are updated with the information from the invoice lines. Maintenance costs are updated for any line that is having its costs distributed to a maintenance account (either a work order task or an asset) when either the amount charged or distribution information (work order task, asset, cost type) has changed.

Invoice adjustment type resource transactions are created to update the maintenance costs. Invoice adjustment transactions are only created in the situations listed below. In these examples, for simplicity the term 'receipt' is used to refer to the transaction that is being invoiced. The functionality is the same for the other types of transactions that are invoiced: service acknowledgments, equipment rentals and consignment usage.

1.	The amount charged on the invoice differs from the value charged on the receipt. The value of the adjustment is equal to the difference between the invoice line and the receipt. For example:

•	$100 is charged to work order 100 when a purchase order is received

•	$105 is charged to work order 100 when the receipt is invoiced

•	An invoice adjustment transaction for $5 is created and charged to work order 100

2.

The work order charged on the invoice differs from the work order charged on the receipt. Two cost adjustment transactions are generated in this case. The first adjustment reverses the amount charged for the receipt. The other adjustment charges the full value of the invoice line to the new work order.

•	$100 is charged to work order 100 when a purchase order is received

•	$105 is charged to work order 101 when the receipt is invoiced

•	An invoice adjustment for -$100 is created for work order 100

•	An invoice adjustment for $105 is created for work order 101

3.	The receipt is charged to a GL account and the invoice is charged to a work order. A cost adjustment is created to charge the work order. A cost adjustment is not generated to reverse the GL account's charged; this is handled by the financial system entries.

•	$100 is charged to GL account 100-001 when a purchase order is received

•	$95 is charged to work order 102 when the receipt is invoiced

•	An invoice adjustment for $95 is created for work order 102

4.	The receipt is charged to a work order and the invoice is charged to a GL account only. A cost adjustment is created to reverse the work order charges. A cost adjustment is not generated to charge GL account; this is handled by the financial system entries.

•	$100 is charged to work order 103 when a purchase order is received

•	$95 is charged to GL account 100-001 when the receipt is invoiced

•	An invoice adjustment for -$100 is created for work order 103

5.	An unmatched invoice line is entered and charged to a work order. A cost adjustment is created to charge the work order with the value charged.

•	$50 is charged to work order 104 on an unmatched invoice line

•	An invoice adjustment for $50 is created for work order 104

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Updating Inventory Balances

Invoice lines that are matched to an inventory receipt update the inventory balances if the amount charged on the invoice differs from the amount charged on the receipt. When this occurs, an invoice adjustment type of resource transaction is generated. The adjustment value on the transaction is set to the difference between the invoice and the receipt:

•	If the value of the invoice is higher than the receipt value, a positive value adjustment is created (i.e. the inventory value is increased)

•	If the value of the invoice is lower than the receipt value, a negative adjustment is created (i.e. the inventory value is decreased)

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Invoice Financial System Entries Information

The invoice line distribution identifies the “accounts” (that is, the work order task, asset, cost type, warehouse, and GL account) that are charged with the cost of the line. This is the full amount of the charge. It does not reflect the amount that was charged when the materials were received. The invoice line distribution is what the invoicing clerk sees and works with when entering the invoicing.

The invoice financial system entries identify the accounts and amounts to be updated in the financial system to reflect the difference between the receipt and the invoice. This assumes that you are already interfacing purchasing receipts to your financial system. Financial system entries are generated when an invoice is posted.

Note: If necessary, you can change the site settings so that full financial system entries are generated for invoice lines, instead of the default behavior described above. This would reflect the full amounts and accounts charged on the invoice. However, you would only use this setting when you are not interfacing purchase receipts to your financial system.

Depending on the nature of the changes between the receipt and the invoice, the financial system entries can consist of:

•	Two entries: One to update the AP Accrual account with the value of the invoice, and a second entry to clear the value previously charged to the RNI accrual account. These two entries are generated for all invoices that are matched to a receipt.

•

The basic two entries, plus entries to reflect differences between the receipt and invoice price: If the amount being charged on the invoice line differs from the receipt values, additional entries are generated for each account charged. These entries reflect the difference between the receipt value and invoice value. The AP accrual and RNI clearing entries are also generated.

•

The basic two entries, plus entries to clear the accounts charged on the receipt, plus a set of entries to reflect the accounts and amounts charged on the invoice: If the accounts charged on the receipt are overridden on the invoice line, entries are created to clear the accounts and amounts that were charged with the receipt. A complete set of entries is created for the accounts and amounts identified on the invoice distribution. The AP accrual and RNI clearing entries are also generated.

•

The AP accrual entry, plus the distribution from the invoice line: For invoice lines not matched to a source transaction, the financial system entries are a straight copy of the invoice line distribution entries. The AP accrual entry is also generated. No entry is generated for the RNI accrual account in this case.

•	If necessary, an entry can also be created in the invoice debit/credit balancing account. The system uses this account to correct small differences in an invoice’s debit and credit entries due to rounding or currency exchange rates. Normally, this account is not used.

The examples that follow illustrate the entries that are generated in each of the different cases.

Invoice as Received

This is the simplest case. The invoice and receipt are identical - the invoice price is equal to the value at which the material was received and the same accounts are being charged.

The receipt values are:

Quantity	10
Price	$10.00
Amount	$100.00
Distribution:	Work order and task: 100 -1 Asset: MOT100 Cost type: Direct purchases Account: 1234001
Offset account	RNI account

The invoice line and distribution values are:

Quantity	10
Price	$10.00
Amount	$100.00
Distribution:	Work order and task: 100 -1 Asset: MOT100 Cost type: Direct purchases Account: 1234001

The following financial system entries are created

1.	AP Accrual account	Credit: $100.00
2.	RNI account	Debit: $100.00

No entries are generated for the work order, asset and account charged since the values from the receipt match the information on the invoice.

A Price Change on the Invoice

In this case the material is invoiced at a different cost than what was used on the receipt. The price difference could be for any of the following reasons:

•	An actual difference between the receipt price and the invoice price

•	A different currency exchange rate is being used

•	A difference between the purchase order and invoice extra charges

•	A difference between the purchase order and invoice taxes

Any of these reasons can result in a different amount being charged on the invoice than the value that was charged on the receipt.

The receipt values are the same as the previous example:

Quantity	10
Price	$10.00
Amount	$100.00
Distribution:	Work order and task: 100 -1 Asset: MOT100 Cost type: Direct purchases Account: 1234001
Offset account	RNI account

The invoice line and distribution values are entered as shown below:

Quantity	10
Price	$10.10
Amount	$101.00
Distribution:	Work order and task: 100 -1 Asset: MOT100 Cost type: Direct purchases Account: 1234001

The following financial system entries are created

1.	AP Accrual account	Credit: $101.00
2.	RNI account	Debit: $100.00
3.	Distribution: Work order and task: 100-1 Asset: MOT100 Cost type: Direct purchases Account: 1234001	Debit: $1.00

Note that the value charged to the work order, asset and GL account is equal to the difference between the receipt and invoice - one dollar. The receipt already charged the other $100.

The Distribution is Overridden on the Invoice

In this case the distribution is overridden on the invoice. That is, a different work order, asset, and/or account is charged.

The receipt values are the same as the previous examples:

Quantity	10
Price	$10.00
Amount	$100.00
Distribution:	Work order and task: 100 -1 Asset: MOT100 Cost type: Direct purchases Account: 1234001
Offset account	RNI account

The invoice line and distribution values are entered as shown below. Note that the work order task has been changed. This resulted in changes to both the asset and GL account.

Quantity	10
Price	$10.10
Amount	$101.00
Distribution:	Work order and task: 222 -1 Asset: MOT200 Cost type: Direct purchases Account: 3344001

The following financial system entries are created as shown below. In this case the amount that was charged to the work order, asset, and GL account at the time is cleared with the negative charge (row 3). The full amount of the invoice is charged to the work order, asset and GL account identified on the invoice (row 4).

1.	AP Accrual account	Credit:$101.00
2.	RNI account	Debit: $100.00
3.	Distribution: Work order and task: 100-1 Asset: MOT100 Cost type: Direct purchases Account: 1234001	Credit: $100.00
4.	Distribution: Work order and task: 222-1 Asset: MOT200 Cost type: Direct purchases Account: 3344001	Debit: $101.00

No Source Transaction Matched to the Invoice Lines

In this case the invoice line is entered without a matching source transaction.

The invoice line and distribution values are:

Quantity	10
Price	$10.10
Amount	$101.00
Distribution:	Work order and task: 222 -1 Asset: MOT200 Cost type: Direct purchases Account: 3344001

The following financial system entries are created. Since the invoice was not matched to a source transaction, an entry to clear the RNI accrual is not required. The example also shows that invoice lines that are not matched to a source transaction can be charged to a work order, asset or GL account as per usual.

1.	AP Accrual account	Credit: $101.00
2.	Distribution: Work order and task: 222-1 Asset: MOT200 Cost type: Direct purchases Account: 3344001	Debit: $101.00

Information Contained in Invoice Financial System Entries

The following information is defined at the invoice financial system entry level:

•	GL Account: the GL account charged

•	Work order: the work order charged

•	Work order task: the work order task charged

•	Asset: the asset charged

•	Cost type: the cost type charged

•	Amount: the amount charged in the site currency

•	Invoice line: identifies the invoice line that generated the entry

•	Invoice line extra charge: identifies the invoice line extra charge that generated the entry

•	Invoice line tax: identifies the invoice line tax that generated the entry

•	Type of entry: identifies the entry as either a AP account entry, accrual account clearing entry or invoice expense entry

•	Credit or debit entry: identifies the entry as either a debit or credit entry. The AP account entry is a credit. The other entries are debits.

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Holds

After purchased items have been received, you can hold them from being invoiced. For example, you might want to do this if the material is still being inspected or if it was damaged. When you hold a liability, you cannot create an invoice line for the liability or post an invoice line that was already created. You can later release the hold so that the invoice can be created.

After an invoice has been created, you can hold it from being posted. For example, you might want to do this if the material is still being inspected or if it was damaged. When you hold an invoice, you cannot post the invoice lines. You can later release the hold so that the invoice can be posted.

You can also hold an invoice from being paid. This allows the invoice to be posted but prevents the creation of an invoice payment record.

Invoice Batches

An invoice entry batch is a collection of invoices that are being entered and balanced as a group. The purpose of the batch is to ensure that all of the invoices have been entered and that the amounts entered are correct. The use of invoice batches is optional.

If an invoice is included in a batch, the invoice cannot be posted until the batch is balanced and posted.

The following information is entered for each batch:

•	Batch number: uniquely identifies the batch

•	Batch date: the date the batch was entered

•	Entered by: an invoice batch is typically entered by one employee

•	Batch total: number of invoices: the number of invoices in the batch

•	Batch total invoice amount: total value of the invoices in the batch

•	Invoices total - number of invoices: the number of invoices entered for the batch

•	Invoices total - invoice amount: total value of the invoices entered for the batch

•	AP Account: You can select an accounts payable account to be used for the batch

•	Batch status: out of balance, balanced, posted

•	Batch posted by: employee who posted the batch

Balancing a Batch

Before an invoice batch can be posted, it must be balanced. To be balanced, the number of invoices and their value must equal the totals entered for the batch. The invoice batch totals and status are displayed on the Invoice Entry Batch window.

If all of the batch’s invoices have been entered and the batch is still out of balance, the reason could be one of the following:

•	The totals entered for the batch were incorrect or entered incorrectly.

•	One or more of the invoices in the batch was overlooked and was not entered.

•	One or more of the batch’s invoices were entered but not included in the batch.

•	One or more invoices were included in the batch but were not included in the batch totals.

•	The invoice value was entered incorrectly on one or more invoices.

•	One or more of the invoices are out of balance.

Invoice Batches with Invoices with Different Currencies

For the purpose of balancing an invoice batch, no currency conversion is performed. The batch total is entered as a numeric value, not as a currency amount. The invoices’ amounts are totaled and balanced to the batch total simply based on the numeric value of the invoice.

For example, an invoice batch is entered consisting of three invoices. The batch value is entered as 300.00. The following invoices are entered for the batch:

Invoice	Supplier currency	Value
1	Canadian	100.00
2	US	100.00
3	Euro	100.00
Total	three invoices	300.00

The batch is in balance.

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Invoice Payment Memos

While APM does not include check-writing capability, attributes are included in the invoicing function for payment information. This allows your organization to use a custom interface to send the payment information to APM. This will allow APM users to be aware of the status of the payment of an invoice. For example, if a planner is being questioned by a contractor as to the status of an invoice, the information will be readily available within APM.

No processing is associated with the invoice payment information within APM other than to set the invoice line and invoice status to partially or fully paid.

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