{"id":2052,"date":"2015-02-12T17:22:22","date_gmt":"2015-02-12T17:22:22","guid":{"rendered":"https:\/\/www.peeriosity.com\/shared-services\/articles\/?p=2052"},"modified":"2022-08-11T13:11:04","modified_gmt":"2022-08-11T13:11:04","slug":"resolving-evaluated-receipt-settlement-price-discrepancies","status":"publish","type":"post","link":"https:\/\/www.peeriosity.com\/shared-services\/articles\/2015\/02\/resolving-evaluated-receipt-settlement-price-discrepancies\/","title":{"rendered":"Resolving Evaluated Receipt Settlement Price Discrepancies"},"content":{"rendered":"

As companies transition from paper-based to electronic transactions for ordering and paying for goods and services, many have taken an end-to-end approach to reengineering the purchase-to-pay process by eliminating the need for an invoice<\/a> entirely.\u00a0 With Evaluated Receipt Settlement (ERS), also referred to as a \u201ctwo-way match\u201d, the shipping notice or packing slip information is matched to the purchase order to initiate a payment, without an invoice being needed to complete a \u201cthree-way match\u201d before payment is authorized and issued.\u00a0 This process works well as long as the shipment notice information agrees with the count in Receiving, and the price information is in synch between the ordering company and their supplier.\u00a0 And, unfortunately, because payments are created in Accounts Payable<\/a>, a separate department for Purchasing, there often isn\u2019t clear visibility as to why a discrepancy happens or how to resolve one once it does.<\/span><\/p>\n

A business analyst at a large global manufacturing company was interested in knowing how other Peeriosity member companies handled a specific issue \u2013 eliminating discrepancies between the purchase order price and a negotiated contract price<\/a> that was expected from the supplier.\u00a0 To find out, she created iPollingTM<\/sup> questions and within 24 hours she had a much better idea of how her peers were tackling this issue.\u00a0<\/span><\/p>\n

Here is the background statement on the reason for the poll:\u00a0 \u201cWe are evaluating our Evaluated Receipts Settlement (ERS) Control Process with a focus on contract price management and are interested to learn how other companies handle discrepancies between PO and contract to price<\/em>.\u201d<\/span><\/p>\n

The first of two iPollingTM<\/sup> questions asked about the status of having a proactive process to eliminate discrepancies between the PO and the negotiated contract price on an ERS transaction.\u00a0 The results were interesting, with no companies indicating that they had an automated process to proactively eliminate discrepancies, and 34% indicating that they had a manual process for doing so.\u00a0 In addition, 8% are evaluating this issue, and 58% indicate they haven\u2019t considered the idea, suggesting that such discrepancies are most often resolved after they occur, and not eliminated proactively.<\/span><\/p>\n

\"ipolling<\/p>\n

The second iPollingTM<\/sup> question asked how differences between the PO price and the negotiated contract price are avoided or resolved.\u00a0 For 36% of member companies, the approach taken is to always use the PO pricing, and 10% rely on the supplier to notify them of a price discrepancy.\u00a0 Another 36% rely on manual detection, with the remaining 18% relying on a back-end (after payment) audit to identify discrepancies.<\/span><\/p>\n

\"<\/p>\n

Here are a number of the comments added by iPollingTM<\/sup> participants:<\/span><\/p>\n