Thursday, January 10, 2013

Payables Invoice Matching Explained

 Explained very clearly in Payables Invoice Matching Explained [ID 1441364.1]


Oracle Payables shares purchase order information from your purchasing system to enable online matching with invoices.

You can match Payables invoices to purchase orders to ensure that you pay only for the goods that you have ordered, or you can match to purchase order receipts to ensure that you pay only for goods that you have received.

Purchase order matched invoices are invoices that you match to any of the following:

Purchase order shipments
Purchase order receipts
Purchase order receipt lines
Purchase order distributions
You can set up controls in your system to require you to purchase order match each invoice. You can also set an option on a purchase order shipment that controls whether invoices should match to that shipment directly or to a receipt. You set tolerances to specify the range of variance you will allow if the amounts or quantities on the invoice are greater than the amounts or quantities on the purchase order or receipt.

When you enter an invoice and match it, Payables automatically creates distributions for you and checks that the match is within the tolerance you define.

After you save the match, Payables updates the quantity or amount billed for each matched shipment and its corresponding distribution(s) based on the amount you enter in the Quantity Invoiced field. Payables also updates the amount billed on the purchase order distribution(s).

You can match an invoice to a purchase order in different ways:

Receipt match. Matching to receipts allows you to pay only for goods or services you receive, and to pay for partial shipments without getting invoice holds. In addition, any exchange rate variance is likely to be smaller because the time between the receipt and invoice is less than the time between the purchase order and invoice.
If you use one of the Periodic Costing options available in Oracle Cost Management to record costs of goods that you order, it is critical that you always match to receipts to ensure accurate cost accounting. When you match an invoice for goods to a receipt, you can also link other charges, such as freight, tax, and miscellaneous to that receipt, so that costing can include those charges in the cost of the goods. If you match to a purchase order instead of a receipt, you will not have accurate costing data.

Purchase order shipment match. Based on the Quantity Invoiced, Payables prorates the Match Amount across all non-fully billed purchase order distributions associated with the purchase order shipments you match to. Payables automatically creates invoice distributions based on the purchase order distributions.
You can match to individual purchase order shipments. Payables automatically creates invoice distributions based on the purchase order distributions.

Purchase order distribution match. You can allocate the match amount to specific purchase order distributions. Payables automatically creates invoice distributions based on the purchase order distributions you match to.
Price correction. Use a price correction to adjust the invoiced unit price of previously matched purchase order shipments, distributions, or receipts without adjusting the quantity billed.
When you are matching to a purchase order, open the View PO window to have easy access to purchase order information.

You can match a single invoice to multiple purchase order shipments, or you can match multiple invoices to a single purchase order shipment. Oracle Payables ensures that you match only to purchase orders for the supplier on the invoice and that the purchase order and invoice currencies match.

Purchase orders are created for Inventory Items or Expense Items. The accounting entries created by matching invoices to POs will be different for Inventory Items as compared to Expense Items depending on whether you accrue expense items on receipt or at period end.


Oracle Payables supports three levels of matching which verify that purchase order and invoice information match within defined tolerances as follows:

2-way matching    quantity billed <= quantity ordered
3-way matching    quantity billed <= quantity ordered
         quantity billed <= quantity received
4-way matching    quantity billed <= quantity ordered
         quantity billed <= quantity received
         quantity billed <= quantity accepted

This option can be setup as a default at various levels:

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