Automated Invoice Processing and Enhanced Controls with ERS

Agenda • Ubex Corporation Overview • Business Need for Automation and Controls • ERS

Ubex Corporation • Premier provider of end-to-end business solutions • Exclusive focus on Oracle

Areas of Expertise Applications Technical Transformation • Oracle E-Business Suite • Core Technology, Financials,

Business Need for Automation and Controls Copyright © 2005 Ubex Corporation 5

Typical Process Copyright © 2005 Ubex Corporation 6

Why Automation and Controls? • Paper based transactions resulting in duplicate manual entry •

What is ERS? • ERS stands for “Evaluated Receipt Settlement” • Automatic invoice creation

ERS Process Copyright © 2005 Ubex Corporation 9

ERS - Benefits • Streamlines business process • Ensures accuracy of invoice processing •

ERS - Implications • No more invoices from suppliers • Significant process change for

Solution Features Copyright © 2005 Ubex Corporation 12

Oracle ERS Solution Components • Pay On Receipt Auto. Invoice Program • Can be

Oracle ERS Process • Pay On Receipt Auto. Invoice Program Copyright © 2005 Ubex

ERS Supplier Site Copyright © 2005 Ubex Corporation 16

Invoice Summary Level • The levels are: • 'Pay Site' -- one invoice created

Invoice Numbering Invoice Summary Level ERS Invoice Number Pay Site : ERS-<Invoice Date>-<Unique One

ERS PO Copyright © 2005 Ubex Corporation 19

Essential Considerations • Visibility for the supplier about invoices created, via • i. Supplier

Tax Insights • Use payables options to automate the invoice tax calculation • Use

Our Solution Approach • Automatic tax calculation and accrual process based on supplier’s tax

When can ERS go wrong? • Data entry error while creating purchase order •

Conclusion • Implementing ERS involves significant challenges… • • supplier involvement tax process automation

Follow-Up & Additional Details Booth in Exhibitor Hall www. ubex. com • Uma Mohan

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Automated Invoice Processing and Enhanced Controls with ERS Pay On Receipt • Presented by: • Nor. Cal OAUG • March 7, 2005 Uma Mohan Kishore Bodhireddy

Agenda • Ubex Corporation Overview • Business Need for Automation and Controls • ERS Process • Benefits • Implications • • Solution Features Essential Considerations Conclusion Q&A Copyright © 2005 Ubex Corporation 2

Ubex Corporation • Premier provider of end-to-end business solutions • Exclusive focus on Oracle Applications • Oracle Certified Partner • Bay-area based • 9+ years in high-tech vertical • 100% success rate • Founded by an Oracle veteran Copyright © 2005 Ubex Corporation 3

Areas of Expertise Applications Technical Transformation • Oracle E-Business Suite • Core Technology, Financials, MFG, Quality, Distribution, Projects, HRMS, CRM, OFA • Administration • Customization • Interfaces • Process Analysis • Global Integration • Project Management • Training • Data Migration Service Offerings • Implementation • Upgrade • Integration • Customization • Maintenance • Support Copyright © 2005 Ubex Corporation 4

Why Automation and Controls? • Paper based transactions resulting in duplicate manual entry • Manual processing • Inconsistent application of business processes • Inappropriate disbursements • Increases audit risk of non-compliance • High payables overheads • Long purchasing to pay cycle 1. Not able to take advantage of supplier provided payment term discounts Copyright © 2005 Ubex Corporation 7

ERS - Benefits • Streamlines business process • Ensures accuracy of invoice processing • Eliminates duplicate manual data entry • Reduces Payables overhead • Reduces purchase to pay cycle times • Ensures on-time payments to suppliers • Takes advantage of supplier discounts • Improves supplier cash flow • Improves supplier relationship • Provides enhanced controls over invoice processing Copyright © 2005 Ubex Corporation 10

ERS - Implications • No more invoices from suppliers • Significant process change for suppliers, purchasing and payables • Responsibility for invoice accuracy shifts from Supplier / AP to Purchasing department • Price accuracy • Tax accuracy • Freight etc. • Upfront investment needed to: • Bring suppliers on-board • Verify suppliers’ tax registration status Copyright © 2005 Ubex Corporation 11

Oracle ERS Solution Components • Pay On Receipt Auto. Invoice Program • Can be scheduled OR run on demand • Builds invoices with the following information : • Amount - Quantity received X Item Unit Price • Payment Terms - from PO • Tax - Based on Tax Codes on each PO shipment, or the default tax hierarchy in Payables • Delays ERS Process – Aging Period • Any discrepancies and/or adjustments beyond aging period must be handled manually Copyright © 2005 Ubex Corporation 13

Key Setups • Profile Options • PO: ERS Invoice Number Prefix • PO: ERS Aging Period • Supplier Site • Purchasing site and Pay Site / Purchasing site with alternate pay site • Pay On Receipt • Invoice Summary Level • Purchasing • Line Type – 3 way match Copyright © 2005 Ubex Corporation 15

Invoice Summary Level • The levels are: • 'Pay Site' -- one invoice created per supplier pay site • 'Packing Slip' -- one invoice created per packing slip per supplier pay site • 'Receipt' -- one invoice created per receipt per supplier pay site Copyright © 2005 Ubex Corporation 17

Invoice Numbering Invoice Summary Level ERS Invoice Number Pay Site : ERS-<Invoice Date>-<Unique One Invoice / Supplier Pay Site system generated seq#> Packing Slip : One Invoice / Packing Slip # / Supplier Pay Site ERS-<Packing Slip#>-<Unique system generated seq#> Receipt : ERS-<Receipt#>-<Unique One Invoice / Receipt / Supplier system generated seq#> Pay Site Copyright © 2005 Ubex Corporation 18

Essential Considerations • Visibility for the supplier about invoices created, via • i. Supplier module • Invoice remittance advice • Automatic tax calculation and accrual process • Control users from modifying default ERS values in PO • Payment discrepancies handling process • Changed audit requirements and controls Copyright © 2005 Ubex Corporation 20

Tax Insights • Use payables options to automate the invoice tax calculation • Use purchasing tax hierarchy to default tax code in the PO shipments • Tax code should reflect • Ship-to location • Supplier registration status • Line type • For suppliers registered to collect the tax, pay tax • For suppliers not registered to collect the tax, accrue tax Copyright © 2005 Ubex Corporation 21

Our Solution Approach • Automatic tax calculation and accrual process based on supplier’s tax registration • Provide invoice visibility • To suppliers about ERS invoice payments • To users about non-processed ERS invoices • Controls • To track changes made to ERS/non-ERS invoices after it is created • To restrict buyers from changing PO from Pay On Receipt process • Reports • To monitor and manage the automation process Copyright © 2005 Ubex Corporation 22

When can ERS go wrong? • Data entry error while creating purchase order • Receiving and return-shipment error • Inaccurate PO pricing, can result in over payment to supplier • Improper tax setup • Inadequate discrepancy handling process Copyright © 2005 Ubex Corporation 23

Conclusion • Implementing ERS involves significant challenges… • • supplier involvement tax process automation internal business responsibility shift changed audit requirements • …but delivers very quick business benefits • Start small with select suppliers, evaluate and finally roll-out Copyright © 2005 Ubex Corporation 24