settlement and invoicing in otminvoice • the invoice is ‘entered’ into otm auto pay • the...
TRANSCRIPT
Settlement and
Invoicing in OTM
Jai Shahpuri
Consology Solutions
High Level Overview of Settlement in OTM
• Settlement is a very vast subject…
• Carriers expect to be paid once the promised service has been
conducted
• Usually the carrier contract dictates at what point in a Shipments • Usually the carrier contract dictates at what point in a Shipments
lifecycle does the payment process start
• Commonly carriers are paid once a Shipment has been delivered
• Rail carriers tend to bill upon receiving the Shipment Tender with
payment due according to negotiated terms
• OTM’s processes do not allow for invoice to be created/matched
until shipment has at least been tendered
Types of Settlement Processes
Match Pay vs.
Auto Pay
Match Pay
• The Shipment is Rated
based on Carrier rates
• The Carrier/Service
Provider sends an
Invoice
• The invoice is ‘entered’
into OTM
Auto Pay
• The Shipment is Rated
based on Carrier rates
• The Invoice is
automatically created
with the same cost
• Invoice is automatically into OTM
• The ‘Matching’
Shipment is found in
OTM
• Approval ‘Tolerance
Levels’ are checked
• Invoice is Approved
• The Vouched is
generated and send to
the A/P system for
payment
• Invoice is automatically
Approved
• The Vouched is generated
and send to the A/P
system for payment
Match Process
• Carrier sends the Invoice to OTM
o Invoice can be sent via Interface or manually entered
• OTM will ‘Match’ the Invoice to its related Shipment
• Criteria is specified in the Match Rule
• Matching is done based on:
Carrier (Carrier ID or Carrier Alias(s))o Carrier (Carrier ID or Carrier Alias(s))
o Reference Number(s)
o Source and Destination Locations
• Additional Matching criterion can also be applied such as
matching invoice to Shipment, Ship Unit or Ship Unit Line
Match Pay Process
• OTM ‘waits’ for the carrier to send the Invoice
Invoices sent to OTM Matching Shipments
Note: Financial amounts are NOT
CONSIDERED during the Match Process
Pay (Approval) Process
• Once the Invoices have been ‘matched’ to their respective
Shipments, OTM will check the amounts
• The Invoice amount is compared to the Shipment amount
• If the two amounts are within the specified ‘Tolerance’, OTM
will approve the Invoice
o Once Approved, a Voucher is created from the Invoiceo Once Approved, a Voucher is created from the Invoice
• If the two amounts are not within the specified tolerance, the
Invoice Approval will fail
Match Pay Process
• Tolerance check between Shipment and its Match Invoice
Matched Invoices Approval Process Vouchers
Match Pay Challenges
Pros:
• Very robust process
• Forces financial and accounting discipline on the carrier
Cons:
• Entering Invoices into OTM
• Incorrect ‘Matching’ reference numbers
Repeated ‘Matching’ reference numbers• Repeated ‘Matching’ reference numbers
• Incorrect Cost on Invoices
o Wrong rates
o Wrong or Missed Accessorial Costs
o Incorrect dates causing Fuel and Rate discrepancies
o Missed consolidation
Auto Pay process
• The Shipment is Rated based on Carrier rates
• OTM creates the Invoice automatically upon reaching a certain point
in the Shipments Lifecycle (say Shipment Delivery)
• The Invoice created is ‘attached’ to the Shipment, effectively is pre-
matched
• The Invoice amounts are identical to the Shipment costThe Invoice amounts are identical to the Shipment cost
• Based on policy, once the Invoice is approved, a Voucher is created
and sent to A/P for payment
Shipment Delivery Invoice Creation Voucher Creation
Auto Pay Challenges
Pros:
• Simpler to setup
• Reduced need for extensive integrations
• Works well for smaller Carriers
Cons:
• Much more rudimentary process• Much more rudimentary process
• Missed Carrier charges, e.g. Accessorials, Detention Charge etc
• Incorrect Rates are not caught immediately
• Constant need for Invoice adjustments
How to Run the Pay Process
• Match Carriers:
o Auto Match Invoices agent action based on trigger (say Invoice creation)
o Scheduled recurring process to run agent
o Schedule Process All Invoices (Matches and Approves)
• Auto Pay Carriers:
Schedule Generate All Auto-Pay Invoiceso Schedule Generate All Auto-Pay Invoices
o Scheduled recurring process to run agent
• Approval of Invoices:
o Auto Approve Invoices agent action based on trigger (say Auto Match)
o Scheduled recurring process to run agent
o Schedule Process All Invoices (Matches and Approves)
Payment Adjustments
• Once an Invoice has been approved and paid (Voucher
transmitted to A/P), the Voucher cannot be changed
• Payment Adjustments can be done in a couple of ways:
o Make changes to the Shipment Financials
o Propagate Changes to the Invoice
Create new Adjustment Vouchero Create new Adjustment Voucher
OR
o Make changes to the Shipment Financials
o Create new Adjustment Invoice
o Create new Adjustment Voucher
Invoice XML
Testing (Match Pay)
• Normal Scenarios:
o Invoice with correct Carrier ID and matching RefNums matches successfully
o Invoice with amounts within set Tolerance approves automatically
• Exception Scenarios:
o Incorrect Matching criteria (ServProv ID, Alias, Refnum, Locations etc)etc)
o Invoice matching to multiple Shipments
o Multiple Invoices matching to same Shipment
o Out of Tolerance invoice amounts
o Rounding errors, one penny above or below tolerance
o Shipment amount/data adjustments
o Invoice amount/data adjustments
o Line level tolerances
Testing (Auto Pay)
• Normal Scenarios:
o Create Invoice and approve successfully
• Exception Scenarios:
o Shipment amount adjustments
o Invoice amount adjustments
Testing (Integration)
• Normal Scenarios:
o Receive Invoice from Carrier
o Successfully send approved Voucher to A/P
• Exception Scenarios:
o Invoice adjustments from Carriers (Update existing Invoice)
Multiple Invoices for the same Shipment received from o Multiple Invoices for the same Shipment received from
Carriers
o Send adjustment Vouchers to A/P (Multiple Vouchers for
the same Shipment)
Match-Pay Setup
Other Use Cases
• Matching based on multiple Refnums
Qualifiers
• Matching based on all Values of a
Refnum Qualifier
• Line Level Approval• Line Level Approval
• Parent Service Provider Invoicing for
multiple OTM Service Providers
• Match and Approve by Accessorial
Code
