This tool lets you reconcile vendor invoices (bills) against received inventory.
Vendors often invoice a customer for multiple POs, but purchase orders may only be partially received (for example, the vendor did not send all ordered items and units). This makes it challenging to confirm the accuracy of billing charges against the PO totals in SellerCloud.
Here’s an example. Suppose a customer only sends one PO to a vendor for a total PO cost of $3000. Two weeks later, the vendor invoices the customer. Consider the following scenarios 1 through 5:
|PO Cost = $3000||—||—|
|Invoice Charge||PO Receiving Status||Reconciliation|
|Scenario 1: $3000||Fully received||Charged at agreed upon price|
|Scenario 2: $4000||Fully received||Overcharge|
|Scenario 3: $3000||Not fully received||Possible overcharge|
|Scenario 4: $2000||Fully received||Possible undercharge|
|Scenario 5: $2000||Not fully received||No indication from totals|
- Invoice charge is $3000 and PO is fully received – Totals match, so the customer is charged at the agreed upon price.
- Invoice charge is $4000 and PO is fully received – Totals do not match, so there is an obvious overcharge.
- Invoice charge is $3000 and PO is not fully received – Totals indicate a possible overcharge for received items.
- Invoice charge is $2000 and PO is fully received – Totals indicate a possible undercharge for received items.
- Invoice charge is $2000 and PO is not fully received – No indication from the total about the accuracy of the billing charges.
Reconciliation becomes even more complex if the invoice is for multiple POs that are partially received.
How does the vendor reconciliation tool help?
The tool addresses accuracy by matching the bill against the receiving sessions of a single or multiple POs.
Each 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 totals and the received status of the POs.
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 for a single PO, receiving sessions can also be grabbed from multiple POs.
Reconciling vendor invoices with POs
- Select the Client Setting Enable vendor invoices workflow.
- Click Company Settings > Toolbox > Vendors > select Vendor > Invoices.
- Click New Invoice. Use the data from the vendor bill to enter Invoice Date, Invoice Number, and Invoice Amount. You can also attach the actual invoice from your PC by clicking Choose File.
- Click Save Invoice.
- Click Add Receive Session. A window appears to show receiving sessions from the vendor, with session IDs, date/time received, PO number, quantity received, and session cost. You can filter by PO number or Product ID.
- Select the matching sessions and click Add Selected Sessions.
- The session will be added to the Existing Sessions grid. The sessions’ total cost will appear in the Received Amount field. If it matches the invoice amount, the invoice can be considered reconciled.
- After 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 shows totals from a receiving session, but you can break that down further to enter an exact amount of units received against a particular invoice:
- Follow the steps 1-5 above. The grid will now display the receiving sessions with the product quantity breakdown. Each product will have its own receiving ID.
- The Qty for Invoice will default to the received quantity; edit the quantity if necessary.
- Select the Receiving IDs at the product level and click Add Sessions. If the full Received qty is not invoiced, the receiving session will remain in the grid.
- Continue with step 8 above.