Advanced Invoicing Overview October 21, 2010

1. Advanced Invoicing OverviewOctober 21, 2010

2. MFMP Overview MFMP Buyer Benefits • More choice for buyers: • Online access to more than 140,000 registered vendors and their goods/services. • Online access to procurement vehicles (i.e. state term contracts [STC], eQuote, Sourcing, Vendor Bid System [VBS]). • Reduction in the cost of goods and services: • MFMP enables Florida to act as a single entity during contract and purchasing negotiations. • Also reduces overhead and processing costs. • Faster order processing times • eInvoicing (electronic invoicing) • Faster invoice to check cycle time • Customer service support available to provide real-time assistance • Green catalog and product listing options for purchasing Page - 2

3. Invoice Reconciliation Managing Invoices Audit Process MFMP / FLAIR Relationship Change Orders Keeping MFMP/FLAIR Balanced Tips & Tricks Resources Contact Us Agenda Page - 3

4. Invoice Reconciliation (IR) • With the Requester group, customers can: • Create and submit a requisition. • Initiate change orders. • Initiate receipts against their orders. • Create an submit an Invoice eForm. • Search and copy their purchase orders (PO). • Create folders and file items. • With the Invoicing group, customers can: • Create and submit an Invoice eForm. • Edit all accounting fields. • Initiate change orders. • Reconcile, approve and reject invoice reconciliations (IR). Page - 4

5. Invoice Reconciliation (IR) Page - 5

6. An IR begins when a invoice is entered into MFMP. There are two ways to create an IR: Invoice eForm (agency creation) Using the paper invoice, the agency enters the invoice into MFMP. Department of Financial Services (DFS) requires a scanned image of the invoice to be attached. We recommend attaching any supporting documentation. eInvoice (vendor creation) Also known as a PO flip or ASN invoice. Vendors can submit invoices electronically. A paper copy of the invoice is not required by DFS. F&A then audits and rejects or approves the IR for payment. Invoice Reconciliation (IR) Page - 6

7. Tips & Tricks • Advantages for agencies processing eInvoicesinclude: • Time: You do not need to create an Invoice eForm. • Paperless: No need to scan attachments. • No manual processing: Reduce invoice data entry requirements for state agencies. • Instant communication: Vendors are notified systematically if an invoice is rejected and can view agency comments as to the reason for rejection. • Environmentally friendly: Reduction in paper flow. • Efficiency: Improved data accuracy (no keying mistakes). • Advantages for vendors using eInvoices include: • Reduced costs • Save time • Manage more effectively • Faster payments • Environmentally friendly Page - 7

8. Invoice Reconciliation: eInvoicing vendors • eInvoicing Vendors • Office Depot BSD • Grainger Industrial Supply • Dell Marketing • Hayes E-Government Resources • Lewis Digital, Inc. • Gulf Ice System • Computer Tutors USA • VF Imagewear • Marpan Supply Company, Inc. • Colamco, Inc. • Sysco Foods • MSC Industrial Supply • Leitz & Reed Office Products, Inc. • Mac Paper • A complete list of eInvoicing vendors is located at http://dms.MyFlorida.com/mfmp_einvoicing Page - 8

9. Invoice Reconciliation: Invoice eForms • Invoice eForms are electronic versions of a vendor’s paper invoices. • Invoices for services • When you create and submit an invoice for services, the IR adds the requester as the first approver for the invoice. • To create an Invoice eForm: • Log in to MFMP with your username and password. • Under Create on the shortcut menu, Click ‘Company eForm.’ • Select ‘Invoice eForm.’ Page - 9

10. Invoice Reconciliation: Invoice eForms • Next, complete three basic steps: • Invoice Header • Invoice Lines • Summary • Invoice Header • Title should be completed based on agency naming conventions. • Supplier Invoice # - The last nine digits will be recorded in FLAIR. • Services Start and End Dates are required by DFS for a service invoice. • Vendor location must match the location on the order. Page - 10

11. Invoice Lines Select ‘purchase order’ Generate invoice Ensure the correct line number is chosen. Verify quantity, update to match the vendor invoice. Verify the unit price is accurate with the vendor invoice. Summary Enter comments as required to ensure payment or per agency standards Add attachments as required by DFS for payment. Common error messages you may receive The sum of the lines does not add up to the total. An invoice already exists for this supplier and invoice number. Invoice Reconciliation: Invoice eForms Page - 11

12. Invoice Reconciliation: Invoice eForms • The Invoice eForm or eInvoice generates the IR. • Discrepancies or differences between the order, invoice, and receipt (if applicable) are listed on the IR as exceptions. • All exceptions must be reconciled before the IR can be approved for payment. • MFMP handles services differently than commodities. • MFMP performs a three-way match for commodities: invoice compared to the order and the receipt. • MFMP performs a two-way match for services: invoice compared to the order. Page - 12

13. Invoice Reconciliation: Exceptions • Header Level exceptions are differences for the entire invoice. • Amount Variance • The total cost of the invoice is different than the total cost of the purchase order. • This variance occurs when you have a partial payment for an order. • Auto Reject Amount Variance • The invoice's amount, $128.04000USD, does not match the purchase order's amount, $0.00000USD. • Invoice Reconciliation Already Exists • An IR with the same invoice number and supplier already exists. This could be a result of the vendor having already sent an electronic invoice. • If this occurs, the IR will be placed into auto-reject status • PCard Order • Invalid invoices created from PCard orders are not accepted. Page - 13

14. Invoice Reconciliation: Exceptions • Line Item exceptions are differences at the individual line level. • Accounting Verification • Every IR will have this exception; accounting information must be verified before accepting this exception. • Quantity Variance • The quantity on the invoice line item is different from the quantity left to invoice on the order line item. • Price Variance • The price on the invoice line item is different from the price on the order line item. • Received Quantity Variance • The quantity field on the invoice line item is different from the quantity left to invoice on the receipt line item. Page - 14

15. Reconciling an IR • From the Homepage, Click on yourReconcilequeue in the shortcut menu. • When referring to the IR, use the sequence number Page - 15

16. Invoice Reconciliation (IR) • An IR includes six components: • Exceptions: Performs the match and displays the discrepancies. • Approval Flow: Defines who is required to approve and who has approved. • Invoice: Details the invoice. • Order: Offers direct access to the PO. • Receipt: Captures all receiving reports (If PO is for service, this tab will be blank). • History: Details and records all activity on the IR. Page - 16

17. Invoice Reconciliation (IR) • The ‘PO Balance’ shows the current remaining balance of the order. It is reduced when an IR moves to Paid status. • All IRs in Paid status can be tracked in the payment history, including IRs marked ‘Paid in FLAIR.’ • An IR in Reconciling, Approving, or Rejecting status is not recorded as part of the payment history. • Cancelled warrants can also be tracked and recorded by using the Payment Update eForm. Page - 17

18. Invoice Reconciliation (IR) Page - 18

19. Invoice Reconciliation Managing Invoices Audit Process MFMP / FLAIR Relationship Change Orders Keeping MFMP/FLAIR Balanced Tips & Tricks Resources Contact Us Agenda Page - 19

20. If an invoice is not acted on within five days, the supervisor of the active approver in the approval flow receives an Escalation Warning notification. If the approver does not act or edit the transaction by day 10, the transaction escalates to their supervisor for approval. Transactions sitting with roles do not escalate. Managing Invoices Page - 20

21. Managing Invoices • Use the Transaction Date field in the Exception Handler and Invoice Manager queues. • Group items by status • Sort items by Transaction Date • Follow up with customers who do not approve IRs or complete receipts in a timely fashion. • Use the IR Last Approver Report: • Contains all IRs in Reconciling and Approving status and where they currently are in the approval flow. • Available daily through the DMS Secure Reports website: • http://dms-purchasing-ftp.state.fl.us/xx00/ Page - 21

22. Managing Invoices • You can group items by status, supplier, etc. to assist in prioritizing your work. • By Clicking the Table Options menu, you can Show / Hide fields, Group, and/or Export to Excel within your queue. • NOTE: • The IR number is comprised of two parts: the invoice number that was entered on the invoice eForm (eInvoice) and a seven digit sequence number. • When referring to the IR, use the sequence number. Page - 22

23. Each time an IR is approved or a Release Encumbrance eForm is submitted, MFMP sends the customer’s FLAIR username and password to FLAIR. When a password is updated in FLAIR, complete a FLAIR Login Information eForm to record the FLAIR information. If you do not complete this eForm, approved transactions will not pass FLAIR successfully. Managing Invoices Page - 23

24. Invoice Reconciliation Managing Invoices Audit Process MFMP / FLAIR Relationship Change Orders Keeping MFMP/FLAIR Balanced Tips & Tricks Resources Contact Us Agenda Page - 24

25. Reconciling an IR Typical Audit Steps Receive invoice Compare invoice to terms in contract document Approve invoice Key into FLAIR Verify receiving report/ services were approved MFMP Audit Steps • MFMP pre-audits your invoice against the order and receipt (if a commodity). • All discrepancies display exceptions for you to reconcile • Reconciling is “auditing” the invoice. • By approving the invoice, you are bypassing the requirement to enter the information into FLAIR. Page - 25

26. Audit Process • During the reconciliation process, you can make corrections to the IR: • If you select an incorrect line from the order, change it using the Manual Match function. • Reject the entire invoice if it is incorrect. • Dispute a line of an invoice instead of rejecting the entire invoice • If the invoice is an eInvoice, the vendor will receive any comments entered. • Refer the IR to someone else if you ‘Cannot Resolve’ it. • Change the vendor sequence number. Page - 26

27. Audit Process Correct the Vendor Sequence number to the applicable location as required for payment. Page - 27

28. The requester or central receiver completes the receipt for commodities. If receipts are completed incorrectly, negative receiving enables customers to correct a quantity error from a previous receipt. An error message is initiated to reject the change if payment was made. If the item was received and paid in error, the receiver will need to communicate that information with their F&A staff. The On Behalf of or Requester approves the services (orders with commodity codes beginning with “9”) by approving the IR before the reconciliation process begins. Audit Process Page - 28

29. The ‘Edit Accounting’ group allows you to validate/update all accounting including: Organization code Expansion option Object code Encumbrance number Encumbrance line number Mark the transaction with an ‘F’ in the ‘Final Payment Indicator’ if it is the final payment to be processed on an encumbered order. Only use the ‘Final Payment Indicator’ for orders encumbered through MFMP. Insert the grouping character Grouping character has to be entered on each line. Create ‘Split Accounting’ to pay the IR line from multiple funding sources Updates to the accounting information on an IR created from a requisition are completed by clicking on the ‘Split Accounting’ button. Audit Process Page - 29

30. Customers with the Invoicing group can delete a disbursement (voucher) before the warrant is issued by completing the Delete Disbursement eForm. Disbursement deletions must be performed the same day as receiving the Departmental FLAIR confirmation message on the IR prior to FLAIR going down for the day. Once Central FLAIR approves the disbursement, the disbursement cannot be deleted through MFMP. A comment will be automatically added to the IR when the eForm is successful. This will not restore the FLAIR encumbrance nor restore the amount to the PO. Audit Process Page - 30

31. If you need to process payments directly in FLAIR (i.e., JT payments), mark the ‘Payment Completed in FLAIR’ check box. Update payments that have been completed manually in FLAIR to include the warrant number and warrant date via the Payment Update eForm. As FLAIR approves a MFMP IR, a message is recorded. If the IR was not successful, a message will also be recorded. Additional information about the FLAIR failure is available by viewing the line detail information at the bottom of the IR. Audit Process Page - 31

32. Follow the guidelines of CFO Memorandum 03 2004-2005 and CFO Memorandum 01 2010-2011 for Contract Summary Forms. Contract Summary Forms are not required in MFMP. Amendment to CFOM 01 in 2007-2008 provides further clarification of the 2004-2005 memo. http://www.myfloridacfo.com/aadir/cm0/cmmaster0405.htm http://www.myfloridacfo.com/aadir/cm0/cmmaster1011.htm Audit Process Page - 32

33. Invoice Reconciliation Managing Invoices Audit Process MFMP / FLAIR Relationship Change Orders Keeping MFMP/FLAIR Balanced Tips & Tricks Resources Contact Us Agenda Page - 33

34. Denied requisitions can have an impact on F&A. When a requisition is denied by FLAIR Integration, it is returned to the requester in their Denied status folder. Withdraw requisitions denied by FLAIR in order to ensure the encumbrance balance with FLAIR remains correct. MFMP processes change orders with FLAIR Integration by: Adding new lines (TR 60) first. Updating existing line (TR 61) second. The updates to the encumbrance might not be a result of the requester making changes if invoices were paid directly in FLAIR without notifying MFMP, resulting in different encumbrance balances. FLAIR Page - 34

35. MFMP allows an IR to process lines that are encumbered (TR 70) or unencumbered (TR 51), but not both. There are times when you may need to override the disbursement transaction type. A transaction can be overridden: By checking or unchecking the ‘Encumber Funds’ box on the accounting details page. If the disbursement transaction type is changed from encumbered to unencumbered, it may be necessary to use the Release Encumbrance eForm to release the remaining funds. MFMP / FLAIR Relationship Page - 35

36. Example: An encumbered order was a one-line purchase order for three boxes of building materials. The vendor ships the three boxes of materials, but also invoices you on a separate line for shipping. If a change order is not processed (recommended), adding this line to the order and to FLAIR, the shipping will need to be added as a separate line on the IR. If the IR is submitting two lines to FLAIR (line one encumbered, line two not encumbered), it will fail FLAIR. This can be prevented by ensuring both lines are marked as encumbered or unencumbered. You can manually enter the encumbrance number and encumbrance line number. MFMP / FLAIR Relationship Page - 36

37. MFMP / FLAIR Relationship • Line Item Comment – Password Not On File - This occurs when your FLAIR password has been reset and/or expired and not updated in MFMP. • In order to successfully process this IR you will need to complete a FLAIR Login Information eForm in MFMP to update your password. • Once this form has been completed, you should be able to complete the IR. Page - 37

38. MFMP / FLAIR Relationship • Line Item Comment – Insufficient Available Balance - MFMP checks the available balance much like FLAIR to ensure budget availability. • If budget is unavailable, you will receive this error. • Check with your budget professional to confirm that budget is available for the purchase. Page - 38

39. MFMP / FLAIR Relationship • Line Item Comment – Expansion Option Record Not on File - This occurs when your Expansion Option (EO) and Version combination are not valid in FLAIR. • In order to successfully process this requisition, verify that the EO and Version selected are correct, if not update your choice appropriately. • However, if your EO and/or Version are not allowing you to process your requisition and you have validated that they are correct in FLAIR, please contact BuyerHelp. Page - 39

40. MFMP / FLAIR Relationship • Line Item Comment-Encumbrance Record Is Not On File- This occurs when your encumbrance for that specific line item has been completely paid out which causes FLAIR to close out that encumbrance line. • In order to successfully process your change order, add a new line or complete a new requisition, as appropriate. Page - 40

41. MFMP / FLAIR Relationship • Header level comment - SplitAccounting number: 1 failed to disburse with the following errors: + 1A1A. • Depending on the reason for the rejection a DFS rejection code will be noted. Page - 41

42. MFMP / FLAIR Relationship Page - 42

43. Invoice Reconciliation Managing Invoices Audit Process MFMP / FLAIR Relationship Change Orders Keeping MFMP/FLAIR Balanced Tips & Tricks Resources Contact Us Agenda Page - 43

44. Use the CO No Workflow group to make accounting changes to an order without additional approvals. There are limited changes that this group can make and the workflow will not be generated. If you make a change other than one of the allowed fields, an approval workflow willgenerate. If the order was originally marked with a ‘Delay Purchase Until’ or a ‘Need By’ date that has passed, delete the date. If you change the ‘Delay Purchase Until’ or ‘Need By’ dates, MFMP will route the order through the original workflow. Change Orders Page - 44

45. Change Orders Page - 45

46. Invoice Reconciliation Managing Invoices Audit Process MFMP / FLAIR Relationship Change Orders Keeping MFMP/FLAIR Balanced Tips & Tricks Resources Contact Us Agenda Page - 46

47. There are four ways to update encumbrances in MFMP: Change order to reduce the encumbered amount can be submitted and is the only method that notifies the vendor of the change in obligation. Final Payment Indicator is used when approving an IR for payment to unencumber the remaining encumbrance balance. Release Encumbrance eForm is used to release all the remaining funds associated on an order. Release Encumbrance Request Form is submitted to the CSD to release the encumbrance if the Release Encumbrance eForm fails. Keeping FLAIR / MFMP Balanced Page - 47

48. Keeping FLAIR / MFMP Balanced • Complete an IR for all order or master agreement (MA) payments: • Benefit from payment history tracking • One-stop for research • Payment, procurement, and receiving information all in one location • MFMP and FLAIR remain balanced • Change orders can result in an overstated encumbrance. • If payments are made directly in FLAIR, MFMP is not aware of those reductions. • When a change order is sent to FLAIR, MFMP amends the FLAIR balance so that it is in synch with the MFMP total. Page - 48

49. It is important to create and reconcile IRs for MFMP orders to reduce potential encumbrance balance inaccuracies. When you encumber a requisition and process your payment through MFMP, MFMP updates FLAIR. If a change order is created, MFMP recalculates the amount and updates FLAIR. Keeping FLAIR / MFMP Balanced Page - 49

50. Keeping FLAIR / MFMP Balanced Page - 50